CORRECTING AND REPLACING - UFP Industries Reports Best Quarterly Results in the Company's History - GlobeNewswire

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GRAND RAPIDS, Mich., Oct. 22, 2020 (GLOBE NEWSWIRE) -- In the release titled, "UFP Industries Reports Best Quarterly Results in the Company’s History" issued yesterday, Wednesday, October 21, 2020, we were informed by the client UFP Industries, Inc. (Nasdaq: UFPI), the figure "more than $70 million" in the sixth paragraph should be "more than $700 million." The corrected release follows:

UFP Industries, Inc. (Nasdaq: UFPI) today announced record sales of $1.49 billion and net earnings attributable to controlling interest of $77.2 million for the third quarter ended September 26, 2020. The company also reported record EPS of $1.25 per diluted share, a 49 percent increase over the same period of 2019. These are the best quarterly sales and earnings results in the company’s 65-year history.

“One of the many lessons I will take from 2020 is that UFP Industries has the business diversification, processes, and experienced team members to face serious challenges and continue to serve customers while delivering strong results for our stakeholders,” said CEO Matthew J. Missad. “So far this year, we faced a pandemic, shut-down orders that disrupted economic activity, a record increase in lumber pricing, supply constraints, wildfires, hurricanes and rail shortages. Despite that, our teams worked diligently to address shifting customer demands, managed inventory wisely, and delivered record results. When it comes to what we can achieve, they set the bar even higher. I want to thank each of our over 13,000 team members for their fantastic efforts. I’d like to also acknowledge an extraordinary American business leader, UFP’s former president, CEO and chairman, my early and lifelong mentor, Ambassador Peter Secchia, who died today. Peter, the architect of UFP’s remarkable early growth, would have been extremely gratified to see his legacy acknowledged and celebrated today with the reporting of the best quarter in the company’s history.”

UFP Industries’ third quarter unit sales grew 8 percent over the same period of 2019, almost entirely from organic sales increases. Unit sales to Retail customers grew 34 percent organically over this period, led by the company’s ProWood, Dimensions, Outdoor Essentials, and Deckorators product lines.

“At the beginning of the pandemic, no one in the industry predicted the growth we’d see in our Retail segment,” Missad said. “Although UFP Retail Solutions has benefited from higher lumber prices and the spike in consumer demand during the past several months, it was well-positioned for improvement even before the pandemic began. In addition to the extraordinary efforts of our team members, I credit our investments in new products and in our new management structure, which allows us to focus better on our customers’ needs, each market we serve, and launch new products and execute initiatives with greater speed.” New product sales grew 41 percent in the third quarter over the same period of last year.

Keeping with the new product focus, UFP Industries recently completed the acquisition of Fire Retardant Chemical Technologies, LLC (FRCT), the leading R&D company specializing in wood treating technologies such as fire retardants. The addition of FRCT will allow UFP to develop new technologies and value-added wood products for the company’s ProWood pressure-treated line, as well as for other customers.

UFP Industries continues to maintain a strong pipeline of acquisition targets and a disciplined approach to capital allocation. The company’s long-term credit facilities and cash currently provide more than $700 million in available liquidity. Additionally, today the company’s board approved a quarterly dividend payment of 12.5 cents per share, bringing the annual total for 2020 to 50 cents per share, a 25 percent increase over the dividends paid in 2019. The dividend is payable on December 15, 2020, to shareholders of record on December 1, 2020.

“This year has been a difficult year for many, and we hope that those who have lost businesses or livelihoods due to the lockdowns will soon be able to start their recovery. UFP has been very fortunate, and even with market headwinds and COVID-19 restrictions, our record performance has validated the confidence we have in our organization’s ability to execute. Our operations will take the lessons we’ve learned and turn them into improvement opportunities for even higher levels of performance. We know that when challenged, UFP employees answer the call and do great things.”

Third Quarter 2020 Highlights (comparisons on a year-over-year basis):

• Net sales of $1.49 billion, up 28 percent due to a 20 percent increase in pricing and an 8 percent increase in units sold
• Gross profits increased 29 percent to over $241 million for the quarter as our profit per unit sold increased substantially
• Earnings from operations of $106.6 million were up 51 percent, and net earnings attributable to controlling interest of $77.2 million were up 49 percent
• EBITDA of $125.7 million increased 40 percent

By business segment, the company reported the following third-quarter results:

UFP Retail Solutions

• $700.5 million in net sales, up 76 percent over the third quarter of 2019. Unit sales increased 34 percent, with higher selling prices increasing sales by 42 percent. The following business units drove unit sales growth: Dimensions Home and Décor (unit sales up 57 percent); Deckorators (up 50 percent); ProWood (up 30 percent); and Outdoor Essentials Fence, Lawn and Garden (up 28 percent). Unit sales in the segment’s E-Commerce unit, which include sales through large online retailers, grew 94 percent.
  

UFP Industrial

• $282.1 million in net sales, up 4 percent from the third quarter of 2019. Unit sales decreased 2 percent, while higher selling prices increased sales by 6 percent. Industrial unit sales showed steady improvement as the third quarter progressed, with year-over-year sales improving from 5 percent lower in July to 1 percent higher in September. The company has been focusing on providing more value-added products to customers in this segment.
  

UFP Construction

• $447.1 million in net sales, up 0.4 percent from the third quarter of 2019, due to a 9 percent decrease in unit sales and a 9 percent increase in selling prices. Unit sales changes by business unit for the quarter are as follows: Factory Built (up 7 percent); Concrete Forming (down 2 percent), Site Built (down 8 percent), Commercial (down 37 percent). Unit sales for Site Built showed continued improvement during the third quarter as business conditions improved. The Commercial business unit has been the most adversely impacted by the pandemic due to the slowdown in retail and other commercial construction and remodeling activity.
  

CONFERENCE CALL
UFP Industries will conduct a conference call to discuss information included in this news release and related matters at 8:30 a.m. ET on Thursday, October 22, 2020. 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 7497854. 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 from October 22, 2020, at 11:30 p.m. through October 24, 2020, 11:30 p.m. at 855-859-2056 or 404-537-3406.

UFP Industries, Inc. (formerly Universal Forest Products, Inc.)
UFP Industries is a holding company whose subsidiaries supply wood, wood composite and other products to three markets: retail, construction and industrial. Founded in 1955, the company is headquartered in Grand Rapids, Mich., with affiliates throughout 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 EBITDA, a non-GAAP measure, an alternative performance measure which may provide useful information to investors.

CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS AND COMPREHENSIVE INCOME (UNAUDITED)
FOR THE THREE AND NINE MONTHS ENDED
SEPTEMBER 2020/2019
		Quarter Period														Year to Date
(In thousands, except per share data)		2020							2019							2020							2019
NET SALES		$	1,486,227			100	%		$	1,163,026			100	%		$	3,760,290			100	%		$	3,417,969			100.0	%
COST OF GOODS SOLD			1,245,153			83.8				975,756			83.9				3,147,049			83.7				2,889,706			84.5
GROSS PROFIT			241,074			16.2				187,270			16.1				613,241			16.3				528,263			15.5
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES			134,649			9.1				115,958			10.0				357,770			9.5				334,165			9.8
OTHER			(176	)		-				845			0.1				(2,120	)		(0.1	)			948			-
EARNINGS FROM OPERATIONS			106,601			7.2				70,467			6.1				257,591			6.9				193,150			5.7
OTHER EXPENSE, NET			921			0.1				1,490			0.1				4,668			0.1				4,082			0.1
EARNINGS BEFORE INCOME TAXES			105,680			7.1				68,977			5.9				252,923			6.7				189,068			5.5
INCOME TAXES			26,819			1.8				16,396			1.4				63,798			1.7				45,340			1.3
NET EARNINGS			78,861			5.3				52,581			4.5				189,125			5.0				143,728			4.2
LESS NET EARNINGS ATTRIBUTABLE TO
NONCONTROLLING INTEREST			(1,657	)		(0.1	)			(722	)		(0.1	)			(5,299	)		(0.1	)			(1,814	)		(0.1	)
NET EARNINGS ATTRIBUTABLE TO
CONTROLLING INTEREST		$	77,204			5.2			$	51,859			4.5			$	183,826			4.9			$	141,914			4.2
EARNINGS PER SHARE - BASIC		$	1.25						$	0.84						$	2.98						$	2.30
EARNINGS PER SHARE - DILUTED		$	1.25						$	0.84						$	2.98						$	2.30
SUPPLEMENTAL SALES AND SG&A DATA
		Quarter Period														Year to Date
Segment Classification			2020							2019			%				2020							2019			%
Retail		$	700,522						$	397,140			76.4	%		$	1,661,873						$	1,212,330			37.1	%
Industrial			282,124							271,667			3.8	%			763,046							837,671			-8.9	%
Construction			447,103							445,505			0.4	%			1,187,429							1,225,467			-3.1	%
All Other			56,478							48,714			15.9	%			147,942							142,501			3.8	%
Total Net Sales		$	1,486,227						$	1,163,026			27.8	%		$	3,760,290						$	3,417,969			10.0	%
			2020			% of Sales				2019			% of Sales				2020			% of Sales				2019			% of Sales
SG&A, Excluding Bonus Expense		$	92,342			6.2			$	93,344			8.0			$	273,574			7.3			$	280,898			8.2
Bonus Expense			42,307			2.8				22,614			1.9				84,196			2.2				53,267			1.6
Total SG&A		$	134,649			9.1			$	115,958			10.0			$	357,770			9.5			$	334,165			9.8
SG&A as a Percentage of Gross Profit			55.9	%						61.9	%						58.3	%						63.3	%

CONSOLIDATED CONDENSED BALANCE SHEETS (UNAUDITED)
SEPTEMBER 2020/2019
(In thousands)
ASSETS				2020			2019			LIABILITIES AND EQUITY				2020			2019
CURRENT ASSETS										CURRENT LIABILITIES
	Cash and cash equivalents			$	346,154		$	64,498			Accounts payable			$	231,111		$	180,767
	Restricted cash				724			729			Accrued liabilities				259,733			204,529
	Investments				20,530			17,028			Current portion of debt				2,760			152
	Accounts receivable				583,079			474,648
	Inventories				528,734			479,356
	Other current assets				32,888			55,845
TOTAL CURRENT ASSETS					1,512,109			1,092,104		TOTAL CURRENT LIABILITIES					493,604			385,448
OTHER ASSETS					121,025			116,887		LONG-TERM DEBT AND
INTANGIBLE ASSETS, NET					311,491			286,627			CAPITAL LEASE OBLIGATIONS				311,267			162,853
PROPERTY, PLANT										OTHER LIABILITIES					131,945			103,221
	AND EQUIPMENT, NET				405,995			385,007		EQUITY					1,413,804			1,229,103
TOTAL ASSETS				$	2,350,620		$	1,880,625		TOTAL LIABILITIES AND EQUITY				$	2,350,620		$	1,880,625

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)
FOR THE NINE MONTHS ENDED
SEPTEMBER 2020/2019
(In thousands)		2020				2019
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings		$	189,125			$	143,728
Adjustments to reconcile net earnings to net cash from operating activities:
Depreciation			47,226				44,652
Amortization of intangibles			5,863				4,690
Expense associated with share-based and grant compensation arrangements			3,152				3,105
Deferred income taxes (credit)			110				(367	)
Unrealized gain on investments and other			(81	)			(1,611	)
Net (gain) loss on disposition and impairment of assets			(662	)			830
Changes in:
Accounts receivable			(211,238	)			(127,841	)
Inventories			(39,167	)			80,178
Accounts payable and cash overdraft			85,354				14,293
Accrued liabilities and other			105,401				36,423
NET CASH FROM OPERATING ACTIVITIES			185,083				198,080
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant, and equipment			(67,024	)			(66,338	)
Proceeds from sale of property, plant and equipment			2,588				1,180
Acquisitions and purchase of noncontrolling interest, net of cash received			(34,820	)			(38,710	)
Purchases of investments			(24,266	)			(6,475	)
Proceeds from sale of investments			22,281				4,159
Other			314				199
NET CASH USED IN INVESTING ACTIVITIES			(100,927	)			(105,985	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings under revolving credit facilities			6,862				421,464
Repayments under revolving credit facilities			(6,498	)			(460,537	)
Repayments of debt			(3,087	)			(3,099	)
Issuance of long-term debt			150,000				-
Proceeds from issuance of common stock			1,042				812
Dividends paid to shareholders			(23,020	)			(12,270	)
Distributions to noncontrolling interest			(932	)			(1,634	)
Repurchase of common stock			(29,212	)			-
Other			23				41
NET CASH FROM (USED IN) FINANCING ACTIVITIES			95,178				(55,223	)
Effect of exchange rate changes on cash			(1,122	)			157
NET CHANGE IN CASH AND CASH EQUIVALENTS			178,212				37,029
ALL CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD			168,666				28,198
ALL CASH AND CASH EQUIVALENTS, END OF PERIOD		$	346,878			$	65,227
Reconciliation of cash and cash equivalents and restricted cash:
Cash and cash equivalents, beginning of period		$	168,336			$	27,316
Restricted cash, beginning of period			330				882
All cash and cash equivalents, beginning of period		$	168,666			$	28,198
Cash and cash equivalents, end of period		$	346,154			$	64,498
Restricted cash, end of period			724				729
All cash and cash equivalents, end of period		$	346,878			$	65,227

EBITDA RECONCILIATION (UNAUDITED)
FOR THE THREE AND NINE MONTHS ENDED
SEPTEMBER 2020/2019
		Quarter Period						Year to Date
(In thousands)		2020			2019			2020			2019
Net earnings		78,861			52,581			189,125			143,728
Interest expense		2,486			1,900			6,291			6,767
Interest and investment income		(1,011	)		(317	)		(1,541	)		(1,074	)
Income taxes		26,819			16,396			63,798			45,340
Expense associated with share-based compensation arrangements		849			896			3,152			3,105
Net (gain) loss on disposition and impairment of assets		(391	)		1,151			(662	)		830
Unrealized gain on investments		(554	)		(93	)		(82	)		(1,611	)
Depreciation expense		15,896			15,452			47,226			44,652
Amortization of intangibles		2,734			1,744			5,863			4,690
EBITDA		125,689			89,710			313,170			246,427

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS AS A PERCENTAGE OF SALES
CURRENT YEAR'S SALES STATED AT LAST YEAR'S SELLING PRICES (UNAUDITED)
FOR THE THREE MONTHS ENDED - SEPTEMBER 2020/2019
	Quarter Period
	Actual				Sales Adjusted to Last Year's Selling Prices				Actual
		2020				2020				2019
NET SALES		100.0		%		100.0		%		100.0		%
COST OF GOODS SOLD		83.8				80.8				83.9
GROSS PROFIT		16.2				19.2				16.1
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES		9.1				10.7				9.9
OTHER		-				-				0.1
EARNINGS FROM OPERATIONS		7.2				8.5				6.1
OTHER EXPENSE, NET		0.1				0.1				0.1
EARNINGS BEFORE INCOME TAXES		7.1				8.4				5.9
INCOME TAXES		1.8				2.1				1.4
NET EARNINGS		5.3				6.3				4.5
LESS NET EARNINGS ATTRIBUTABLE TO
NONCONTROLLING INTEREST		(0.1	)			(0.1	)			(0.1	)
NET EARNINGS ATTRIBUTABLE TO
CONTROLLING INTEREST		5.2		%		6.2		%		4.5		%
Note: Actual percentages are calculated and may not sum to total due to rounding.
2019 NET SALES	$	1,163,026
2020 SELL PRICE INCREASE		20.00		%
INCREASE IN 2020 NET SALES DUE TO SELL PRICE INCREASE	$	232,605
ACTUAL 2020 NET SALES		1,486,227
LESS SELL PRICE ADJUSTMENT FOR LUMBER COSTS		232,605
ADJUSTED 2020 NET SALES	$	1,253,622
ACTUAL 2020 COST OF GOODS SOLD	$	1,245,153
LESS ADJUSTMENT FOR LUMBER COSTS		232,605
ADJUSTED 2020 COST OF GOODS SOLD	$	1,012,548

 

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

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

 

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