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     164  0 Kommentare UFP Industries Reports Record Second Quarter Results

    – Net sales increase 117 percent, earnings increase 161 percent –

    GRAND RAPIDS, Mich., July 21, 2021 (GLOBE NEWSWIRE) -- UFP Industries, Inc. (Nasdaq: UFPI) today announced record net sales of $2.7 billion for the second quarter of 2021, a 117 percent increase over the second quarter of 2020, and record net earnings attributable to controlling interest of $173 million, a 161 percent increase over the same period of 2020. The company also reported record EPS of $2.78 per diluted share compared to $1.08 in the second quarter of last year. Recent acquisitions contributed $455 million to net sales and $0.17 to EPS.

    “In the last year and a half, UFP Industries has been tested by an unprecedented economic disruption and the most turbulent supply and pricing changes in our industry’s history. Despite those challenges, we have continued to improve our business and serve customers without disruption,” said CEO Matthew J. Missad. “We continue to break records with our financial performance, a feat I attribute to the hard work of our employees, our new market-focused organizational structure, and our balanced business model, which allows us to sell into a variety of diverse markets. Another key contributor to our success is our improved pricing model and managed inventory programs, which allow us to mitigate the impact of lumber market fluctuations like those we experienced during the second quarter.”  

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

    • Net sales of $2.7 billion increased 117 percent due to a 70 percent increase in selling prices, a 36 percent unit increase from acquisitions, and an 11 percent increase in organic unit sales.
    • Earnings from operations of $236.9 million increased 157 percent, including the impact of an inventory valuation reserve. Management evaluated the impact of falling lumber prices on its products sold with a variable price tied to the lumber market, primarily in its ProWood and Sunbelt wood pressure-treating operations. As a result of its evaluation, a lower of cost or net realizable value reserve was recorded, which reduced the value of inventory and gross profits by approximately $23 million. The company’s vendor-managed inventory programs and ability to shift lumber inventory to business units with high demand and volume requirements helped mitigate the impact of the decline in prices on variable-priced products, particularly in its ProWood business unit.
    • An increase in SG&A of nearly $71 million, or 62 percent, is largely attributable to recent acquisitions ($15 million, including amortization expense of $1.5 million) and increases in bonus and sales compensation resulting from increased profitability (up $33 million and $9 million, respectively, over 2020). SG&A as a percentage of gross profit improved from 56 percent in 2020 to 44 percent in 2021, as the company continues to focus on leveraging its cost structure as it grows.
    • New product sales of $232.1 million increased 61 percent.
    • Adjusted EBITDA of $261.5 million increased 137 percent and the adjusted EBITDA margin expanded by 80 basis points to 9.7 percent.

    UFP Industries maintains a strong balance sheet with liquidity of approximately $288 million at the end of the second quarter despite an increase in our seasonal investment in net working capital of $444 million, which resulted from unprecedentedly high lumber prices and market demand. Net debt increased to $562 million from a net cash position of $37 million at the end of the second quarter of 2020, primarily due to these factors and the acquisitions of PalletOne and Spartanburg Forest Products. Management anticipates that as lumber prices and seasonal demand normalize, the increase in net working capital will be converted to cash, providing significant capital available to pursue growth opportunities and returns to shareholders through its dividend and share repurchase activities.

    “We remain optimistic about the rest of this year and our prospects in 2022,” said Missad. “We expect market conditions to normalize during the second half of 2021. While falling lumber prices and more normalized demand create challenging year-over-year profitability comparisons for our retail segment, the stabilized lumber market should benefit our industrial and construction segments. Furthermore, we expect all of our segments to benefit from more stable pricing in 2022. In addition, our industrial and retail segments should continue to benefit from the integration of our recent acquisitions of PalletOne and its subsidiary, Sunbelt Forest Products, as well as Spartanburg Forest Products.”

    By business segment, the company reported the following second quarter 2021 results:

    UFP Retail Solutions

    • $1.26 billion in net sales, up 107 percent over the second quarter of 2020 due to a 59 percent increase in selling prices and a 48 percent unit increase due to the acquisitions of Sunbelt Forest Products and Spartanburg Forest Products. Organic unit sales fell 4 percent due to a 17 percent decline in the ProWood business unit. Organic growth was achieved by UFP-Edge (up 27 percent), Deckorators (up 11 percent), and Outdoor Essentials (up 6 percent), due in part to expanded operational capacity. Additional capacity for each of these product lines is expected to come online in 2022. New product sales grew 32 percent, driven by UFP-Edge shiplap and trim, ProWood Fire Retardant treated lumber, and Outdoor Essentials fencing and picnic tables.
    • Gross profit dollars for the retail segment grew 47 percent. Acquisitions contributed approximately $3.5 million, or 4 percent, to the increase and were significantly impacted by the inventory valuation reserve.

    UFP Industrial

    • $611 million in net sales, up 172 percent from the second quarter of 2020, reflecting in part the benefits of reopening the U.S. economy after pandemic-related closures. Unit sales increased 73 percent and selling prices increased 99 percent. Organic growth accounted for 26 percent of the unit sales growth; the acquisitions of PalletOne and T&R Lumber accounted for 47 percent. New product sales grew 192 percent from the second quarter of 2020.
    • Gross profit for the segment rose 262 percent, exceeding unit sales growth of 73 percent, due to the company’s focus on adding value-added products and the significant improvement in unit sales, which allows the company to better leverage fixed costs and include the impact of higher lumber, labor, and transportation costs in its selling prices. Acquisitions contributed over $23 million, or 62 percent, to the increase in gross profit.

    UFP Construction

    • $739 million in net sales, up 106 percent over the second quarter of 2020, due to a 29 percent increase in unit sales and a 77 percent increase in selling prices. Unit sales to factory-built and site-built housing customers rose 56 percent and 32 percent, respectively. Unit sales to commercial customers improved, rising 11 percent. New product sales increased 184 percent from the prior comparative quarterly period.
    • Gross profit for the construction segment grew 118 percent over the second quarter of 2020, primarily as a result of significantly improved unit sales and the company’s ability to better leverage fixed costs and include the impact of higher lumber, labor, and transportation costs in its selling prices.

    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, July 21, 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 5780277. 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 July 23, 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.

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

    Dick Gauthier
    VP, Business Outreach
    (616) 365-1555

    CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS AND COMPREHENSIVE INCOME (UNAUDITED)
    FOR THE THREE AND SIX MONTHS ENDED
    JUNE 2021/2020
                                                 
                                               
        Quarter Period Year to Date
    (In thousands, except per share data)      2021 2020 2021 2020
    NET SALES   $ 2,700,541     100.0 %   $ 1,242,001     100.0 %   $ 4,525,545     100.0 %   $ 2,274,063     100.0 %  
                                               
    COST OF GOODS SOLD     2,279,247     84.4       1,037,070     83.5       3,817,697     84.4       1,901,896     83.6    
                                               
    GROSS PROFIT     421,294     15.6       204,931     16.5       707,848     15.6       372,167     16.4    
                                               
    SELLING, GENERAL AND ADMINISTRATIVE EXPENSES     184,539     6.8       113,781     9.2       334,637     7.4       223,121     9.8    
    OTHER GAINS, NET     (180 )         (1,209 )   (0.1 )     (1,211 )         (1,944 )   (0.1 )  
                                               
    EARNINGS FROM OPERATIONS     236,935     8.8       92,359     7.4       374,422     8.3       150,990     6.6    
                                               
    OTHER EXPENSE, NET     3,045     0.1       (992 )   (0.1 )     4,530     0.1       3,747     0.2    
                                               
    EARNINGS BEFORE INCOME TAXES     233,890     8.7       93,351     7.5       369,892     8.2       147,243     6.5    
                                               
    INCOME TAXES     58,530     2.2       23,657     1.9       90,281     2.0       36,979     1.6    
                                               
    NET EARNINGS     175,360     6.5       69,694     5.6       279,611     6.2       110,264     4.8    
                                               
    LESS NET EARNINGS ATTRIBUTABLE TO NONCONTROLLING INTEREST     (1,978 )   (0.1 )     (3,231 )   (0.3 )     (2,918 )   (0.1 )     (3,642 )   (0.2 )  
                                               
    NET EARNINGS ATTRIBUTABLE TO CONTROLLING INTEREST   $ 173,382     6.4     $ 66,463     5.4     $ 276,693     6.1     $ 106,622     4.7    
                                               
    EARNINGS PER SHARE - BASIC   $ 2.79         $ 1.08         $ 4.46         $ 1.73        
                                               
    EARNINGS PER SHARE - DILUTED   $ 2.78         $ 1.08         $ 4.45         $ 1.73        
                                               
    COMPREHENSIVE INCOME     178,080           81,089           280,135           113,103        
                                               
    LESS COMPREHENSIVE INCOME ATTRIBUTABLE TO NONCONTROLLING INTEREST     (2,698 )         (5,691 )         (3,112 )         (3,767 )      
                                               
    COMPREHENSIVE INCOME ATTRIBUTABLE TO CONTROLLING INTEREST   $ 175,382         $ 75,398         $ 277,023         $ 109,336        
                                               
     


    JUNE 2021/2020                                            
    (In thousands)   Quarter Period   Year to Date
    Segment Classification      2021         2020   %      2021          2020   %
    Retail   $ 1,259,218           $ 609,190     106.7 %   $ 2,018,239           $ 961,351     109.9 %
    Industrial     611,181             224,379     172.4 %     1,060,054             480,922     120.4 %
    Construction     738,704             359,170     105.7 %     1,298,235             740,325     75.4 %
    All Other     91,438             49,262     85.6 %     149,017             91,465     62.9 %
    Total Net Sales   $ 2,700,541           $ 1,242,001     117.4 %   $ 4,525,545           $ 2,274,063     99.0 %
                                                 
        2021   % of Sales   2020   % of Sales   2021   % of Sales   2020   % of Sales
    SG&A   $ 184,539     6.8 %   $ 113,781     9.2 %   $ 334,637     7.4 %   $ 223,121     9.8 %
                                                 
    SG&A as a Percentage of Gross Profit     43.8 %           55.5 %         47.3 %           60.0 %    
                                                 


    CONSOLIDATED CONDENSED BALANCE SHEETS (UNAUDITED)  
    JUNE 2021/2020  
    JUNE 2021/2020                            
                                 
    (In thousands)                            
    ASSETS   2021        2020      LIABILITIES AND EQUITY        2021        2020  
                                 
    CURRENT ASSETS             CURRENT LIABILITIES              
    Cash and cash equivalents $ 44,286   $ 200,546   Cash Overdraft   $ 34,229   $  
    Restricted cash   629     724   Accounts payable     359,484     199,338  
    Investments   33,827     19,195   Accrued liabilities     337,507     233,088  
    Accounts receivable   980,571     522,930   Current portion of debt     97     2,786  
    Inventories   1,026,488     459,424                  
    Other current assets   36,699     33,786                  
                                 
    TOTAL CURRENT ASSETS   2,122,500     1,236,605   TOTAL CURRENT LIABILITIES     731,317     435,212  
                                 
    OTHER ASSETS   146,486     120,464                  
    INTANGIBLE ASSETS, NET   424,110     299,963   LONG-TERM DEBT AND FINANCE LEASE OBLIGATIONS     571,856     161,057  
                  OTHER LIABILITIES     163,547     123,014  
    PROPERTY, PLANT AND EQUIPMENT, NET   533,187     401,576   EQUITY     1,759,563     1,339,325  
                                 
                                 
    TOTAL ASSETS $ 3,226,283   $ 2,058,608   TOTAL LIABILITIES AND EQUITY   $ 3,226,283   $ 2,058,608  
                                 


    CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)  
    FOR THE SIX MONTHS ENDED  
    JUNE 2021/2020  
                 
                 
    (In thousands)   2021        2020  
    CASH FLOWS FROM OPERATING ACTIVITIES:            
    Net earnings $ 279,611     $ 110,264    
    Adjustments to reconcile net earnings to net cash from operating activities:            
                 
    Depreciation   38,342       31,330    
    Amortization of intangibles   7,193       3,129    
    Expense associated with share-based and grant compensation arrangements   5,742       2,303    
    Deferred income taxes   177       290    
    Unrealized (gain) loss on investment and other   (2,784 )     473    
    Equity in earnings of investee   1,465          
    Net gain on sale and disposition of assets   (1,577 )     (271 )  
    Changes in:            
    Accounts receivable   (336,094 )     (155,554 )  
    Inventories   (329,577 )     25,983    
    Accounts payable and cash overdraft   143,018       57,017    
    Accrued liabilities and other   78,751       72,246    
    NET CASH (USED IN) FROM OPERATING ACTIVITIES   (115,733 )     147,210    
                 
    CASH FLOWS FROM INVESTING ACTIVITIES:            
    Purchases of property, plant, and equipment   (79,028 )     (46,730 )  
    Proceeds from sale of property, plant and equipment   6,673       644    
    Acquisitions and purchase of noncontrolling interest, net of cash received   (433,239 )     (18,689 )  
    Purchases of investments   (14,581 )     (20,094 )  
    Proceeds from sale of investments   6,885       18,339    
    Other   (708 )     318    
    NET CASH USED IN INVESTING ACTIVITIES   (513,998 )     (66,212 )  
                 
    CASH FLOWS FROM FINANCING ACTIVITIES:            
    Borrowings under revolving credit facilities   849,944       6,759    
    Repayments under revolving credit facilities   (589,695 )     (6,498 )  
    Contingent consideration payment and other   (1,464 )     (3,077 )  
    Proceeds from issuance of common stock   936       697    
    Dividends paid to shareholders   (18,550 )     (15,374 )  
    Distributions to noncontrolling interest   (2,914 )     (299 )  
    Repurchase of common stock         (29,212 )  
    Other   (331 )     32    
    NET CASH FROM (USED IN) FINANCING ACTIVITIES   237,926       (46,972 )  
                 
    Effect of exchange rate changes on cash   112       (1,422 )  
    NET CHANGE IN CASH AND CASH EQUIVALENTS   (391,693 )     32,604    
                 
    ALL CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD   436,608       168,666    
                 
    ALL CASH AND CASH EQUIVALENTS, END OF PERIOD $ 44,915     $ 201,270    
                 
    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 $ 44,286     $ 200,546    
    Restricted cash, end of period   629       724    
    All cash and cash equivalents, end of period $ 44,915     $ 201,270    
                 
                 


    ADJUSTED EBITDA RECONCILIATION (UNAUDITED)
    FOR THE THREE AND SIX MONTHS ENDED
    JUNE 2021/2020
                           
                           
        Quarter Period Year to Date
    (In thousands)   2021   2020 2021
      2020
    Net earnings   $ 175,360     $ 69,694   $ 279,611     $ 110,264  
    Interest expense     3,899       1,898     7,050       3,805  
    Interest and investment income     (659 )     (189 )   (1,201 )     (530 )
    Income taxes     58,530       23,657     90,281       36,979  
    Expenses associated with share-based compensation arrangements     2,761       859     5,742       2,303  
    Net (gain) loss on disposition and impairment of assets     (1,045 )     14     (1,577 )     (271 )
    Equity in Earnings of Investee     835           1,465        
    Unrealized (gain) loss on investments     (1,030 )     (2,701 )   (2,784 )     472  
    Depreciation expense     19,609       15,613     38,342       31,330  
    Amortization of intangibles     3,195       1,558     7,193       3,129  
    Adjusted EBITDA   $ 261,455     $ 110,403   $ 424,122     $ 187,481  
                           



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    UFP Industries Reports Record Second Quarter Results – Net sales increase 117 percent, earnings increase 161 percent –GRAND RAPIDS, Mich., July 21, 2021 (GLOBE NEWSWIRE) - UFP Industries, Inc. (Nasdaq: UFPI) today announced record net sales of $2.7 billion for the second quarter of 2021, a 117 …