SEC Filing - UFP Industries, Inc.

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): October 20, 2021

UFP INDUSTRIES, INC.

(Exact name of registrant as specified in its charter)


Michigan (State or other Jurisdiction of Incorporation)	0-22684 (Commission File Number)	38-1465835 (IRS Employer Identification No.)


2801 East Beltline, NE Grand Rapids, Michigan (Address of Principal Executive Offices)	49525 (Zip Code)

Registrant's telephone number, including area code: (616) 364-6161

None

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425).

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12).

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)).

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)).

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock	UFPI	The NASDAQ Stock Market, LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02 Results of Operations and Financial Condition

On October 20, 2021, the Registrant issued a press release announcing its financial results for the quarter-ended September 25, 2021. A copy of the Registrant’s press release is attached as Exhibit 99(a) to this Current Report.

Item 9.01 Financial Statements, Pro Forma Financial Information, and Exhibits

(c)Exhibits

99(a)Press Release dated October 20, 2021.

104Cover Page Interactive File (the cover page XBRL tags are embedded in the Inline XBRL document).

EXHIBIT INDEX


Exhibit Number		Document

99(a)		Press Release, dated October 20, 2021.

104		Cover Page Interactive Data File (the cover page XBRL tags are embedded in the Inline XBRL document).

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


	UNIVERSAL FOREST PRODUCTS, INC.
	(Registrant)

Dated: October 20, 2021	By:	/s/ Michael R. Cole

		Michael R. Cole
		Principal Financial Officer and Treasurer

UFP Industries, Inc.

Page 1

Exhibit 99(a)

News release

---------------AT THE COMPANY---------------

Dick Gauthier

VP, Corporate Communications and Investor Relations

(616) 365-1555

FOR IMMEDIATE RELEASE

Wednesday, October 20, 2021

UFP Industries Reports Record Third Quarter Results
– Net sales increase 41 percent, earnings increase 57 percent;

Quarterly dividend increases by 33% to 20 cents per share –

GRAND RAPIDS, Mich., October 20, 2021 – UFP Industries, Inc. (Nasdaq: UFPI) today announced net sales of $2.1 billion for the third quarter of 2021, a 41 percent increase over the third quarter of 2020, and net earnings attributable to controlling interest of $121 million, a 57 percent increase over the same period of 2020. The company also reported EPS of $1.93 per diluted share compared to $1.25 in the third quarter last year.

“Our outstanding third-quarter results once again validate our balanced business model and reflect the hard work and commitment of our employees,” said CEO Matthew J. Missad. “Our diversity of markets, coupled with an improved pricing model that quickly adjusts to lumber market fluctuations, have helped UFP deliver record profitability and provide a favorable return on investment to our shareholders, even when some markets face headwinds. When the pandemic and rising lumber prices presented challenges to our industrial and construction segments, our teams responded quickly to meet the unprecedented demand in the retail segment. As we anticipated, retail demand and lumber prices have normalized, and our industrial and construction segments are now experiencing favorable growth trends and profitability.”

Third Quarter 2021 Highlights (comparisons on a year-over-year basis):

●

Net sales of $2.1 billion increased 41 percent due to a 28 percent increase in selling prices and 16 percent unit increase from acquisitions, offset by a 3 percent decrease in organic unit sales.

●

Earnings from operations increased 58 percent to $168 million, including a $9 million gain on the sale of real estate.

●

The increase in SG&A of nearly $35 million, or 26 percent, is largely attributable to recent acquisitions ($14 million), an increase in incentive compensation resulting from improved profitability ($10 million), and increases in wages and benefits ($8 million). SG&A as a percentage of gross profit improved by 400 basis points to 52 percent in 2021, as the company continues to focus on leveraging its cost structure as it grows and continues to invest in capabilities to enhance its value-added mix of products.

●

New product sales of $196.7 million increased 24 percent. Recent acquisitions contributed $15.6 million to the total.

●

Adjusted EBITDA of $187.5 million increased 49 percent and adjusted EBITDA margin expanded by 50 basis points to 9 percent.

UFP Industries, Inc.

Page 2

UFP Industries continues to maintain a strong balance sheet with liquidity of approximately $668 million at the end of the third quarter despite an increase in our seasonal investment in net working capital of $193 million. This increase resulted from unprecedentedly high lumber prices and market demand. Net debt was $182 million compared to $32 million in net surplus cash at the end of the third quarter of 2020, primarily due to these factors and the acquisitions of PalletOne and Spartanburg Forest Products. The company had a cash surplus of $139 million at the end of the third quarter, and it continues to reduce working capital and generate strong free cash flow, allowing it to pursue growth opportunities and returns to shareholders through its dividend and share repurchase activities. UFP Industries has the authority to buy back approximately 1.1 million additional shares.

On October 20, 2021, the Board of Directors of UFP Industries approved a quarterly dividend payment of $0.20 per share, a 33 percent increase over the dividend of 15 cents paid on September 15, 2021, and a 60 percent increase over the dividend of 12.5 cents paid on December 15, 2020. The dividend is payable on December 15, 2021, to shareholders of record on December 1, 2021.

By business segment, the company reported the following third quarter 2021 results.

UFP Retail Solutions

●

$696 million in net sales, down 1 percent compared to the third quarter of 2020. Unit sales fell 1 percent, mostly due to a 38 percent decline in the ProWood business unit. The decrease in ProWood’s year-over-year comparable numbers — an 11 percent drop in prices and a 27 percent drop in unit sales — is the result of the unusually high demand for pressure-treated wood in 2020 that followed the pandemic-related closures.

●

Organic unit growth was achieved by UFP-Edge (up 12 percent). Other business units experienced organic unit declines compared to the third quarter of 2020, which experienced unusually high demand attributable to the pandemic-related closures; they include Handprint (down 17 percent), Deckorators (down 14 percent) and Outdoor Essentials (down 8 percent). Additional capacity for the Deckorators and UFP-Edge product lines is expected to provide growth in 2022.

●

Gross profit for the retail segment fell 90 percent to $11 million from $106 million in the same quarter of 2020, as dramatically falling lumber prices reduced margins for variable-priced products such as pressure-treated wood.

UFP Industrial

●

$573 million in net sales, up 103 percent from the third quarter of 2020. Selling prices increased 69 percent, and unit sales increased 34 percent. The unit sales increase is attributable to the acquisitions of PalletOne and T&R Lumber. New product sales grew 93 percent from the third quarter of 2020.

●

Gross profit for the segment rose 162 percent to $126 million, exceeding unit sales growth of 34 percent, due to the company’s focus on adding value-added products and its ability to better leverage fixed costs and include the impact of higher lumber, labor, and transportation costs in its selling prices. Acquisitions contributed $22 million, or 45 percent, to the increase in gross profit.

●

Value-added sales contributed to the increase in gross profits and improved from 64 percent of net sales in the third quarter of 2020 to 69 percent of net sales in the third quarter of 2021.

UFP Industries, Inc.

Page 3

UFP Construction

●

$723 million in net sales, up 62 percent over the third quarter of 2020, due to a 43 percent increase in selling prices, a 16 percent increase in organic unit sales and a 3 percent increase in unit sales from acquisitions. Unit sales to site-built and factory-built housing customers rose 31 percent and 17 percent, respectively. Unit sales to commercial customers rose 26 percent, and the business unit returned to profitability after a loss in 2020. New product sales increased 131 percent from the third quarter of 2020.

●

Gross profit of $154 million improved 148 percent over the third quarter of 2020, primarily as a result of improved unit sales, falling lumber prices, and the company’s ability to better leverage fixed costs.

CONFERENCE CALL

UFP Industries will conduct a conference call to discuss information included in this news release and related matters at 4:30 p.m. ET on Wednesday, October 20, 2021. The call will be hosted by CEO Matthew J. Missad and CFO Michael Cole, and will be available for analysts and institutional investors domestically at 866-518-4547 and internationally at 213-660-0879. Use conference pass code 6541729. The conference call will be available simultaneously and in its entirety to all interested investors and news media through a webcast at http://www.ufpi.com. A replay of the call will be available through October 22, 2021, at 855-859-2056, 404-537-3406 or 800-585-8367.

UFP Industries, Inc.

UFP Industries is a holding company whose operating subsidiaries – UFP Industrial, UFP Construction and UFP Retail Solutions – manufacture, distribute and sell a wide variety of value-added products used in residential and commercial construction, packaging and other industrial applications worldwide. Founded in 1955, the company is headquartered in Grand Rapids, Mich., with affiliates in North America, Europe, Asia and Australia. For more about UFP Industries, go to www.ufpi.com.

This press release contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act, as amended, that are based on management’s beliefs, assumptions, current expectations, estimates and projections about the markets we serve, the economy and the Company itself. Words like “anticipates,” “believes,” “confident,” “estimates,” “expects,” “forecasts,” “likely,” “plans,” “projects,” “should,” variations of such words, and similar expressions identify such forward-looking statements. These statements do not guarantee future performance and involve certain risks, uncertainties and assumptions that are difficult to predict with regard to timing, extent, likelihood and degree of occurrence. The Company does not undertake to update forward-looking statements to reflect facts, circumstances, events, or assumptions that occur after the date the forward-looking statements are made. Actual results could differ materially from those included in such forward-looking statements. Investors are cautioned that all forward-looking statements involve risks and uncertainty. Among the factors that could cause actual results to differ materially from forward-looking statements are the following: fluctuations in the price of lumber; adverse or unusual weather conditions; adverse economic conditions in the markets we serve; government regulations, particularly involving environmental and safety regulations; and our ability to make successful business acquisitions. Certain of these risk factors as well as other risk factors and additional information are included in the Company's reports on Form 10-K and 10-Q on file with the Securities and Exchange Commission.

Non-GAAP Financial Information

This release includes certain financial information not prepared in accordance with U.S. GAAP. Because not all companies calculate non-GAAP financial information identically (or at all), the presentations herein may not be comparable to other similarly titled measures used by other companies. Management considers Adjusted EBITDA, a non-GAAP measure, an alternative performance measure which may provide useful information to investors.

Net earnings

Net earnings refers to net earnings attributable to controlling interest unless specifically noted.

# # #

UFP Industries, Inc.

Page 4

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS AND COMPREHENSIVE INCOME (UNAUDITED)

FOR THE THREE AND NINE MONTHS ENDED

SEPTEMBER 2021/2020


	Quarter Period								Year to Date
(In thousands, except per share data)	2021				2020				2021				2020
NET SALES	$	2,093,784	100.0	%	$	1,486,227	100.0	%	$	6,619,329	100.0	%	$	3,760,290	100.0	%

COST OF GOODS SOLD		1,766,229	84.4			1,245,153	83.8			5,583,926	84.4			3,147,049	83.7

GROSS PROFIT		327,555	15.6			241,074	16.2			1,035,403	15.6			613,241	16.3

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES		169,467	8.1			134,649	9.1			504,104	7.6			357,770	9.5
OTHER GAINS, NET		(10,037)	(0.5)			(176)	—			(11,248)	(0.2)			(2,120)	(0.1)

EARNINGS FROM OPERATIONS		168,125	8.0			106,601	7.2			542,547	8.2			257,591	6.9

OTHER INTEREST AND EXPENSE, NET		4,750	0.2			921	0.1			9,280	0.1			4,668	0.1

EARNINGS BEFORE INCOME TAXES		163,375	7.8			105,680	7.1			533,267	8.1			252,923	6.7

INCOME TAXES		37,628	1.8			26,819	1.8			127,909	1.9			63,798	1.7

NET EARNINGS		125,747	6.0			78,861	5.3			405,358	6.1			189,125	5.0

LESS NET EARNINGS ATTRIBUTABLE TO NONCONTROLLING INTEREST		(4,706)	(0.2)			(1,657)	(0.1)			(7,624)	(0.1)			(5,299)	(0.1)

NET EARNINGS ATTRIBUTABLE TO CONTROLLING INTEREST	$	121,041	5.8		$	77,204	5.2		$	397,734	6.0		$	183,826	4.9

EARNINGS PER SHARE - BASIC	$	1.94			$	1.25			$	6.40			$	2.98

EARNINGS PER SHARE - DILUTED	$	1.93			$	1.25			$	6.38			$	2.98

COMPREHENSIVE INCOME		123,723				80,548				403,858				185,095

LESS COMPREHENSIVE INCOME ATTRIBUTABLE TO NONCONTROLLING INTEREST		(4,496)				(1,922)				(7,608)				(3,354)

COMPREHENSIVE INCOME ATTRIBUTABLE TO CONTROLLING INTEREST	$	119,227			$	78,626			$	396,250			$	181,741


SUPPLEMENTAL DATA
(In thousands)	Quarter Period					Year to Date
Segment Classification	2021		2020		% change	2021		2020		% change
Retail	$	696,201	$	700,522	(0.6)%	$	2,714,440	$	1,661,873	63.3%
Industrial		573,234		282,124	103.2%		1,633,289		763,046	114.0%
Construction		722,872		447,103	61.7%		2,021,106		1,187,429	70.2%
All Other		101,477		56,478	79.7%		250,494		147,942	69.3%
Total Net Sales	$	2,093,784	$	1,486,227	40.9%	$	6,619,329	$	3,760,290	76.0%

SG&A as a Percentage of Gross Profit		51.7%		55.9%			48.7%		58.3%

UFP Industries, Inc.

Page 5

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS BY SEGMENT (UNAUDITED)

FOR THE THREE AND NINE MONTHS ENDED

SEPTEMBER 2021/2020


	Quarter Period
	2021
(In thousands)	Retail		Industrial		Construction		All Other		Corporate		Total
NET SALES	$	696,201	$	573,234	$	722,872	$	98,689	$	2,788	$	2,093,784
COST OF GOODS SOLD		685,369		446,822		568,809		63,082		2,147		1,766,229
GROSS PROFIT		10,832		126,412		154,063		35,607		641		327,555
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES		36,899		55,723		70,663		15,996		(9,814)		169,467
OTHER		86		281		(805)		(672)		(8,927)		(10,037)
EARNINGS FROM OPERATIONS	$	(26,153)	$	70,408	$	84,205	$	20,283	$	19,382	$	168,125


	Quarter Period
	2020
(In thousands)	Retail		Industrial		Construction		All Other		Corporate		Total
NET SALES	$	700,522	$	282,124	$	447,103	$	56,700	$	(222)	$	1,486,227
COST OF GOODS SOLD		594,896		233,971		385,028		38,543		(7,285)		1,245,153
GROSS PROFIT		105,626		48,153		62,075		18,157		7,063		241,074
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES		43,515		26,080		45,411		10,499		9,144		134,649
OTHER		(70)		36		151		209		(502)		(176)
EARNINGS FROM OPERATIONS	$	62,181	$	22,037	$	16,513	$	7,449	$	(1,579)	$	106,601


	Year to Date
	2021
(In thousands)	Retail		Industrial		Construction		All Other		Corporate		Total
NET SALES	$	2,714,440	$	1,633,289	$	2,021,106	$	243,736	$	6,758	$	6,619,329
COST OF GOODS SOLD		2,480,804		1,292,102		1,644,069		160,853		6,098		5,583,926
GROSS PROFIT		233,636		341,187		377,037		82,883		660		1,035,403
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES		144,375		150,739		193,144		40,021		(24,175)		504,104
OTHER		(182)		104		(437)		(1,703)		(9,030)		(11,248)
EARNINGS FROM OPERATIONS	$	89,443	$	190,344	$	184,330	$	44,565	$	33,865	$	542,547


	Year to Date
	2020
(In thousands)	Retail		Industrial		Construction		All Other		Corporate		Total
NET SALES	$	1,661,873	$	763,046	$	1,187,429	$	148,503	$	(561)	$	3,760,290
COST OF GOODS SOLD		1,429,229		635,424		1,002,932		101,240		(21,776)		3,147,049
GROSS PROFIT		232,644		127,622		184,497		47,263		21,215		613,241
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES		110,596		73,662		134,098		28,228		11,186		357,770
OTHER		(34)		123		(145)		(1,538)		(526)		(2,120)
EARNINGS FROM OPERATIONS	$	122,082	$	53,837	$	50,544	$	20,573	$	10,555	$	257,591

UFP Industries, Inc.

Page 6

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

SEPTEMBER 2021/2020


(In thousands)
ASSETS		2021		2020	LIABILITIES AND EQUITY		2021		2020

CURRENT ASSETS					CURRENT LIABILITIES
Cash and cash equivalents	$	138,637	$	346,154	Cash Overdraft	$	10,812	$	—
Restricted cash		17,592		724	Accounts payable		292,933		231,111
Investments		33,723		20,530	Accrued liabilities		362,832		259,733
Accounts receivable		783,959		583,079	Current portion of debt		93		2,760
Inventories		900,665		528,734
Other current assets		48,174		32,888

TOTAL CURRENT ASSETS		1,922,750		1,512,109	TOTAL CURRENT LIABILITIES		666,670		493,604

OTHER ASSETS		144,904		121,025
INTANGIBLE ASSETS, NET		389,682		311,491	LONG-TERM DEBT AND FINANCE LEASE OBLIGATIONS		310,119		311,267
					OTHER LIABILITIES		155,984		131,945
PROPERTY, PLANT AND EQUIPMENT, NET		552,911		405,995	EQUITY		1,877,474		1,413,804


TOTAL ASSETS	$	3,010,247	$	2,350,620	TOTAL LIABILITIES AND EQUITY	$	3,010,247	$	2,350,620

UFP Industries, Inc.

Page 7

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

FOR THE NINE MONTHS ENDED

SEPTEMBER 2021/2020


(In thousands)		2021		2020
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings	$	405,358	$	189,125
Adjustments to reconcile net earnings to net cash from operating activities:

Depreciation		61,741		47,226
Amortization of intangibles		9,369		5,863
Expense associated with share-based and grant compensation arrangements		8,444		3,152
Deferred income taxes		(594)		110
Unrealized gain on investment and other		(1,756)		(81)
Equity in earnings of investee		2,411		—
Net gain on sale and disposition of assets		(10,482)		(662)
Changes in:
Accounts receivable		(141,088)		(211,238)
Inventories		(204,144)		(39,167)
Accounts payable and cash overdraft		53,437		85,354
Accrued liabilities and other		99,067		105,401
NET CASH FROM OPERATING ACTIVITIES		281,763		185,083

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant, and equipment		(110,092)		(67,024)
Proceeds from sale of property, plant and equipment		26,597		2,588
Acquisitions and purchase of noncontrolling interest, net of cash received		(433,275)		(34,820)
Purchases of investments		(17,866)		(24,266)
Proceeds from sale of investments		9,857		22,281
Other		(3,478)		314
NET CASH USED IN INVESTING ACTIVITIES		(528,257)		(100,927)

CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings under revolving credit facilities		886,966		6,862
Repayments under revolving credit facilities		(888,335)		(6,498)
Contingent consideration payment and other		(2,664)		(3,087)
Issuance of long-term debt		—		150,000
Proceeds from issuance of common stock		1,519		1,042
Dividends paid to shareholders		(27,831)		(23,020)
Distributions to noncontrolling interest		(2,914)		(932)
Repurchase of common stock		—		(29,212)
Other		(334)		23
NET CASH (USED IN) FROM FINANCING ACTIVITIES		(33,593)		95,178

Effect of exchange rate changes on cash		(292)		(1,122)
NET CHANGE IN CASH AND CASH EQUIVALENTS		(280,379)		178,212

ALL CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD		436,608		168,666

ALL CASH AND CASH EQUIVALENTS, END OF PERIOD	$	156,229	$	346,878

Reconciliation of cash and cash equivalents and restricted cash:
Cash and cash equivalents, beginning of period	$	436,507	$	168,336
Restricted cash, beginning of period		101		330
All cash and cash equivalents, beginning of period	$	436,608	$	168,666

Cash and cash equivalents, end of period	$	138,637	$	346,154
Restricted cash, end of period		17,592		724
All cash and cash equivalents, end of period	$	156,229	$	346,878

UFP Industries, Inc.

Page 8

ADJUSTED EBITDA RECONCILIATION (UNAUDITED)

FOR THE THREE AND NINE MONTHS ENDED

SEPTEMBER 2021/2020


	Quarter Period				Year to Date
(In thousands)	2021		2020		2021		2020
Net earnings	$	125,747	$	78,861	$	405,358	$	189,125
Interest expense		3,433		2,486		10,483		6,291
Interest and investment income		(658)		(1,011)		(1,859)		(1,541)
Income taxes		37,628		26,819		127,909		63,798
Expenses associated with share-based compensation arrangements		2,702		849		8,444		3,152
Net gain on disposition and impairment of assets		(8,905)		(391)		(10,482)		(662)
Equity in earnings of investee		946		—		2,411		—
Unrealized loss (gain) on investments		1,028		(554)		(1,756)		(82)
Depreciation expense		23,399		15,896		61,741		47,226
Amortization of intangibles		2,176		2,734		9,369		5,863
Adjusted EBITDA	$	187,496	$	125,689	$	611,618	$	313,170