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UFP Industries Reports Record Sales and Profits for First Quarter

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Diluted EPS up 12 percent, unit sales up 5 percent

GRAND RAPIDS, Mich., April 22, 2020 (GLOBE NEWSWIRE) -- UFP Industries, Inc. (UFPI) today announced record net sales and net earnings for the first quarter of 2020, as well as record EPS of $0.65 per diluted share, a 12 percent increase over the same period of 2019.

“Our team jumped out of the gates quickly, extending our record-setting performance from 2019 while delivering an excellent first quarter,” stated CEO Matthew J. Missad. “The realignment we announced last year is going very well, and we are seeing additional opportunities for improvement as a result of these changes. When COVID-19 changed the business landscape late in the first quarter, our business unit and segment leaders adapted quickly, working hard to ensure the safety of our employees while providing essential products and services to our customers. I would like to congratulate our team for seamlessly handling our organizational changes while simultaneously battling the headwinds that came with COVID-19."

The vast majority of UFP Industries’ employees are deemed essential critical infrastructure workers and continue to serve customers. In other cases, the company serves customers who have temporarily shut down, and the company has reduced operations and temporarily furloughed employees as necessary.

UFP Industries has a strong balance sheet with long-term credit facilities and cash that currently provide over $390 million in available liquidity. As a result of its strong financial position and the confidence it has in its future performance after COVID-19 restrictions are eased, the company repurchased approximately 750,000 shares of its common stock during the first quarter at an average price of $38.62. These repurchases substantially reduced the dilutive effect of shares issued in 2019 and 2020 under the company’s various share-based compensation programs.

On April 22, 2020, the company’s board approved a quarterly dividend payment of 12.5 cents a share, a prorated 25 percent increase over the dividends paid in 2019. The dividend is payable on June 15, 2020, to shareholders of record on June 1, 2020. Effective April 22, 2020, the company’s shareholders approved the change in the company’s name from Universal Forest Products, Inc. to UFP Industries, Inc.

UFP Industries will provide further detail on the impact of the COVID-19 virus on its operations during its first quarter earnings call, which has been rescheduled from April 23, 2020, to May 7, 2020.

"We realize most investors will have questions about the impact of COVID-19 on financial results for the second quarter and the balance of 2020,” stated Missad. “Since those results very much depend on the future status of various state directives, and given the assumption that federal stay-at-home guidance is due to expire April 30, we expect to have better insight on May 7 and more detail on our new business segments. On behalf of our employees and other stakeholders, I encourage our elected officials to safely and expeditiously allow a targeted, risk-based resumption of business as soon as reasonably practical.”

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

  • Earnings from operations of $58.6 million were up 21 percent, and net earnings attributable to controlling interest of $40.2 million were up 13 percent

  • EBITDA of $77.1 million increased by 17 percent

  • Net sales of $1.03 billion represent a 2 percent increase; lower lumber prices reduced gross sales by 3 percent

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

UFP Retail

  • $365.0 million in gross sales, up 6 percent over the first quarter of 2019. Retail unit sales increased 9 percent, while lower selling prices reduced the gross sales figure by 3 percent. The following business units drove unit sales growth: Home and Décor (up 26 percent), UFP-Edge (up 14 percent), ProWood (up 14 percent) and Fence, Lawn and Garden (up 8 percent).

UFP Industrial

  • $258.6 million in gross sales, down 7 percent from the first quarter of 2019. Unit sales were flat, with lower lumber prices accounting for the 7 percent reduction in gross sales.

UFP Construction

  • $384.9 million in gross sales, up 4 percent over the first quarter of 2019, due to a 6 percent increase in unit sales and a 2 percent decrease in selling prices. Unit sales rose in all business units: Concrete Forming (up 15 percent), Factory Built (up 12 percent), Commercial (up 3 percent) and Site Built (up 1 percent).

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, May 7, 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 3838977. 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 August 6, 2020, at 855-859-2056, 404-537-3406 or 800-585-5367.

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 robust 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.

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

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


CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS AND COMPREHENSIVE INCOME (UNAUDITED)

FOR THE THREE MONTHS ENDED

MARCH 2020/2019

Quarter Period

Year to Date

(In thousands, except per share data)

2020

2019

2020

2019

NET SALES

$

1,032,062

100%

$

1,015,125

100%

$

1,032,062

100%

$

1,015,125

100.0%

COST OF GOODS SOLD

861,934

83.5

860,858

84.8

861,934

83.5

860,858

84.8

GROSS PROFIT

170,128

16.5

154,267

15.2

170,128

16.5

154,267

15.2

SELLING, GENERAL AND

ADMINISTRATIVE EXPENSES

112,231

10.9

105,317

10.4

112,231

10.9

105,317

10.4

FOREIGN CURRENCY EXCHANGE (GAIN) LOSS

(450

)

-

626

0.1

(450

)

-

626

0.1

NET GAIN ON DISPOSITION AND IMPAIRMENT OF ASSETS

(285

)

-

(122

)

-

(285

)

-

(122

)

-

EARNINGS FROM OPERATIONS

58,632

5.7

48,446

4.8

58,632

5.7

48,446

4.8

OTHER EXPENSE, NET

4,740

0.5

867

0.1

4,740

0.5

867

0.1

EARNINGS BEFORE INCOME TAXES

53,892

5.2

47,579

4.7

53,892

5.2

47,579

4.7

INCOME TAXES

13,322

1.3

11,577

1.1

13,322

1.3

11,577

1.1

NET EARNINGS

40,570

3.9

36,002

3.5

40,570

3.9

36,002

3.5

LESS NET EARNINGS ATTRIBUTABLE TO

NONCONTROLLING INTEREST

(411

)

-

(462

)

-

(411

)

-

(462

)

-

NET EARNINGS ATTRIBUTABLE TO

CONTROLLING INTEREST

$

40,159

3.9

$

35,540

3.5

$

40,159

3.9

$

35,540

3.5

EARNINGS PER SHARE - BASIC

$

0.65

$

0.58

$

0.65

$

0.58

EARNINGS PER SHARE - DILUTED

$

0.65

$

0.58

$

0.65

$

0.58

COMPREHENSIVE INCOME

32,014

37,375

32,014

37,375

LESS COMPREHENSIVE INCOME ATTRIBUTABLE

TO NONCONTROLLING INTEREST

1,924

(686

)

1,924

(686

)

COMPREHENSIVE INCOME

ATTRIBUTABLE TO CONTROLLING INTEREST

$

33,938

$

36,689

$

33,938

$

36,689


SUPPLEMENTAL SALES AND SG&A DATA

Quarter Period

Year to Date

Segment Classification

2020

2019

%

2020

2019

%

Retail

$

365,030

$

343,544

6.3%

$

365,030

$

343,544

6.3%

Industrial

258,603

277,016

-6.6%

258,603

277,016

-6.6%

Construction

384,860

369,052

4.3%

384,860

369,052

4.3%

International

36,343

36,626

-0.8%

36,343

36,626

-0.8%

Other

5,870

5,366

9.4%

5,870

5,366

9.4%

Total Gross Sales

1,050,706

1,031,604

1.9%

1,050,706

1,031,604

1.9%

Sales Allowances

(18,644

)

(16,479

)

-13.1%

(18,644

)

(16,479

)

13.1%

Total Net Sales

$

1,032,062

$

1,015,125

1.7%

$

1,032,062

$

1,015,125

1.7%

2020

% of
Sales

2019

% of
Sales

2020

% of
Sales

2019

% of
Sales

SG&A, Excluding Bonus Expense

$

98,239

9.5

$

92,935

9.2

$

98,239

9.5

$

92,935

9.2

Bonus Expense

13,992

1.4

12,382

1.2

13,992

1.4

12,382

1.2

Total SG&A

$

112,231

10.9

$

105,317

10.4

$

112,231

10.9

$

105,317

10.4

SG&A, Excluding Bonus Expense, as a Percentage of Gross Profit

57.7%

60.2%

57.7%

60.2%



CONSOLIDATED CONDENSED BALANCE SHEETS (UNAUDITED)

MARCH 2020/2019

(In thousands)

ASSETS

2020

2019

LIABILITIES AND EQUITY

2020

2019

CURRENT ASSETS

CURRENT LIABILITIES

Cash and cash equivalents

$

32,129

$

17,111

Cash overdraft

$

-

$

18,732

Restricted cash

724

1,024

Accounts payable

162,039

170,667

Investments

17,778

16,197

Accrued liabilities

164,444

130,985

Accounts receivable

460,821

444,111

Current portion of debt

2,772

185

Inventories

510,681

580,163

Other current assets

38,776

44,866

TOTAL CURRENT ASSETS

1,060,909

1,103,472

TOTAL CURRENT LIABILITIES

329,255

320,569

OTHER ASSETS

124,519

90,463

LONG-TERM DEBT AND

INTANGIBLE ASSETS, NET

299,979

271,297

CAPITAL LEASE OBLIGATIONS

160,550

266,428

PROPERTY, PLANT

OTHER LIABILITIES

120,895

96,035

AND EQUIPMENT, NET

397,575

356,166

EQUITY

1,272,282

1,138,366

TOTAL ASSETS

$

1,882,982

$

1,821,398

TOTAL LIABILITIES AND EQUITY

$

1,882,982

$

1,821,398



CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)

FOR THE THREE MONTHS ENDED

MARCH 2020/2019

(In thousands)

2020

2019

CASH FLOWS FROM OPERATING ACTIVITIES:

Net earnings

$

40,570

$

36,002

Adjustments to reconcile net earnings to net cash from operating activities:

Depreciation

15,717

14,475

Amortization of intangibles

1,571

1,852

Expense associated with share-based and grant compensation arrangements

1,444

1,287

Deferred income taxes (credit)

286

(742

)

Unrealized loss (gain) on investments and other

3,173

(1,348

)

Net gain on disposition and impairment of assets

(285

)

(122

)

Changes in:

Accounts receivable

(94,253

)

(100,716

)

Inventories

(25,783

)

(23,649

)

Accounts payable and cash overdraft

20,047

25,056

Accrued liabilities and other

(8,648

)

(7,924

)

NET CASH FROM OPERATING ACTIVITIES

(46,161

)

(55,829

)

CASH FLOWS FROM INVESTING ACTIVITIES:

Purchases of property, plant, and equipment

(27,286

)

(15,883

)

Proceeds from sale of property, plant and equipment

409

241

Acquisitions and purchase of noncontrolling interest, net of cash received

(18,487

)

-

Purchases of investments

(14,052

)

(449

)

Proceeds from sale of investments

11,260

340

Other

(54

)

200

NET CASH USED IN INVESTING ACTIVITIES

(48,210

)

(15,551

)

CASH FLOWS FROM FINANCING ACTIVITIES:

Borrowings under revolving credit facilities

6,759

237,560

Repayments under revolving credit facilities

(6,498

)

(173,232

)

Repayments of debt

(3,074

)

(3,029

)

Proceeds from issuance of common stock

319

261

Distributions to noncontrolling interest

(299

)

(500

)

Dividends paid to shareholders

(7,730

)

-

Repurchase of common stock

(29,212

)

-

Other

12

9

NET CASH FROM (USED IN) FINANCING ACTIVITIES

(39,723

)

61,069

Effect of exchange rate changes on cash

(1,719

)

248

NET CHANGE IN CASH AND CASH EQUIVALENTS

(135,813

)

(10,063

)

ALL CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD

168,666

28,198

ALL CASH AND CASH EQUIVALENTS, END OF PERIOD

$

32,853

$

18,135

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

$

32,129

$

17,111

Restricted cash, end of period

724

1,024

All cash and cash equivalents, end of period

$

32,853

$

18,135



EBITDA RECONCILIATION (UNAUDITED)

FOR THE THREE MONTHS ENDED

MARCH 2020/2019

Quarter Period

Year to Date

(In thousands)

2020

2019

2020

2019

Net earnings

40,570

36,002

40,570

36,002

Interest expense

1,908

2,460

1,908

2,460

Interest and investment income

(341

)

(245

)

(341

)

(245

)

Income taxes

13,322

11,577

13,322

11,577

Expense associated with share-based compensation arrangements

1,444

1,287

1,444

1,287

Net gain on disposition and impairment of assets

(285

)

(122

)

(285

)

(122

)

Unrealized loss (gain) on investments

3,173

(1,348

)

3,173

(1,348

)

Depreciation expense

15,717

14,475

15,717

14,475

Amortization of intangibles

1,571

1,852

1,571

1,852

EBITDA

77,079

65,938

77,079

65,938




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 - MARCH 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

83.5

84.0

84.8

GROSS PROFIT

16.5

16.0

15.2

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

10.9

10.6

10.4

FOREIGN CURRENCY EXCHANGE (GAIN) LOSS

-

(0.1)

0.1

NET GAIN ON DISPOSITION AND IMPAIRMENT OF ASSETS

-

-

-

EARNINGS FROM OPERATIONS

5.7

5.5

4.8

OTHER EXPENSE, NET

0.5

0.4

0.1

EARNINGS BEFORE INCOME TAXES

5.2

5.1

4.7

INCOME TAXES

1.3

1.3

1.1

NET EARNINGS

3.9

3.8

3.5

LESS NET EARNINGS ATTRIBUTABLE TO

NONCONTROLLING INTEREST

-

-

-

NET EARNINGS ATTRIBUTABLE TO

CONTROLLING INTEREST

3.9

%

3.8

%

3.5

%

Note: Actual percentages are calculated and may not sum to total due to rounding.

2019 NET SALES

$

1,015,125

2020 SELL PRICE DECLINE

3.00

%

DECREASE IN 2020 NET SALES DUE TO SELL PRICE DECLINE

$

30,454

ACTUAL 2020 NET SALES

1,032,062

ADJUSTED 2020 NET SALES

$

1,062,516

ACTUAL 2020 COST OF GOODS SOLD

$

861,934

PLUS DIFFERENCE IN NET SALES (ABOVE)

30,454

ADJUSTED 2020 COST OF GOODS SOLD

$

892,388