Net sales exceed $2 billion, diluted EPS of
$2.36
UFP Industries, Inc. (Nasdaq: UFPI) today announced second
quarter 2023 results including net sales of $2.04 billion, net
earnings attributable to controlling interest of $151 million, and
earnings per diluted share of $2.36.
“I want to thank the hard-working employees of UFP Industries
for delivering another strong quarter. Their focus on innovation,
efficiencies, and value-added solutions has helped us improve our
gross margins, even as lower pricing and volume resulted in
decreases in our top- and bottom-line results,” said Chairman and
CEO Matt Missad. “The positive changes in our business mix and
operating structure are producing better performance when compared
to previous downward cycles in our business. Our strong cash-flow
generation and balance sheet allow us to continue to invest in
operational improvements and growing the business through new
products and acquisitions, all while returning value to our
shareholders. On July 26, 2023, the Board approved a 20 percent
increase in the quarterly cash dividend to $0.30 per share and
increased the share repurchase authorization to $200 million.”
Second Quarter 2023 Highlights (comparisons on a
year-over-year basis):
- Net sales of $2.04 billion decreased 30 percent due to a 22
percent decrease in prices and an 8 percent decrease in organic
unit sales.
- New product sales of $184 million decreased 9 percent, largely
due to lower lumber prices that the company passed on to customers.
New product sales as a percent of total sales rose to 9 percent
from 7 percent in 2022.
- Diluted EPS of $2.36 represents a 27 percent decrease from last
year.
- Adjusted EBITDA of $234 million decreased 27 percent; adjusted
EBITDA margin rose to 11.5 percent from 11 percent in 2022.
Capital Allocation
UFP Industries maintains a strong balance sheet, with $424.9
million in net surplus cash (surplus cash less interest-bearing
debt and cash overdraft) on July 1, 2023, compared to $190.7
million in net debt at the end of the second quarter of 2022. The
company had approximately $2 billion of liquidity as of July 1,
2023. The company’s return-focused approach to capital allocation
includes the following:
- Acquisitions. The company continues to seek acquisitions
in core businesses that generate long-term growth and margin
improvement, enhance its capabilities, and create incremental value
for customers and shareholders.
- Capital expenditures. The company lowered its target for
capital investments to $175-200 million in 2023 due to longer lead
times required for most equipment and rolling stock. The company
plans to double the production capacity of the popular Deckorators
mineral-based composite (MBC) decking by investing approximately
$31 million in upgrades.
- Dividend payments. On July 26, 2023, the Board of
Directors for UFP Industries approved a quarterly dividend payment
of $0.30 per share, a 20 percent increase over the dividend paid in
the first quarter of 2023. The dividend is payable on September 15,
2023, to shareholders of record on September 1, 2023.
- Share repurchases. The company repurchased 700,597
shares during the first half of 2023 at an average share price of
$79.20 (a total of $55.5 million). At their July 26 meeting, the
Board of Directors authorized up to $200 million for share
repurchases through July 31, 2024.
By business segment, the company reported the following
second-quarter 2023 results:
UFP Retail Solutions
Net sales of $920 million, down 18 percent compared to the
second quarter of 2022, attributable to an 18 percent decline in
selling prices due to the pricing decreases in the lumber market.
While below our target level, gross profit of $121 million improved
65 percent compared to the second quarter of 2022 and gross profit
margin improved to 13.2 percent from 6.5 percent, primarily due to
increased sales of new Deckorators products and the impact of
products sold with a variable price such as treated lumber. These
variable-priced products benefited from a more stabilized lumber
market compared to 2022, when a significant decrease in lumber
prices during the second quarter adversely impacted gross
profit.
UFP Packaging
Net sales of $488 million, down 28 percent compared to the
second quarter of 2022, due to a 21 percent decrease in selling
prices, a 9 percent decline in organic unit sales, and a 2 percent
increase in sales from acquisitions. Gross profit was $118.2
million, down 27 percent, due to normalizing market pricing and a
decline in volume that is in line with market conditions. Gross
profit margin remained mostly unchanged at 24 percent due to the
segment’s focus on value-added sales and new products. Value-added
sales increased to 78 percent of total net sales compared to 71
percent for the second quarter of 2022. New product sales as a
percent of total net sales increased to 14.9 percent from 10.6
percent during the same period of 2022.
UFP Construction
Net sales of $550 million, down 44 percent compared to the
second quarter of 2022, due to a 26 percent decrease in selling
prices and an 18 percent decrease in organic unit sales. Gross
profit was $137.2 million, down 40 percent, largely due to
normalizing market pricing and a decrease in volume as a result of
a decline in housing starts and industry production of manufactured
homes. Gross profit margin improved to 25 percent from 23 percent
in 2022.
CONFERENCE CALL
UFP Industries will conduct a conference call to discuss its
outlook and information included in this news release at 4:30 p.m.
ET on Wednesday, August 2, 2023. The call will be hosted by
Chairman and CEO Matthew J. Missad and CFO Michael Cole and will be
available simultaneously and in its entirety to all interested
investors and news media through a webcast at
www.ufpinvestor.com/news-filings-reports. A replay of the call will
be available through the website.
UFP Industries, Inc.
UFP Industries is a holding company whose operating subsidiaries
– UFP Packaging, 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. UFP Industries is ranked
#403 on the Fortune 500 and #149 on Industry Week’s list of
America’s Largest Manufacturers. 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 uses Adjusted
EBITDA, a non-GAAP financial measure, in order to evaluate
historical and ongoing operations. Management believes that this
non-GAAP financial measure is useful in order to enable investors
to perform meaningful comparisons of historical and current
performance. Adjusted EBITDA is intended to supplement and should
be read together with the financial results. Adjusted EBITDA should
not be considered an alternative or substitute for, and should not
be considered superior to, the reported financial results.
Accordingly, users of this financial information should not place
undue reliance on the non-GAAP financial measure.
Net earnings
Net earnings refers to net earnings attributable to controlling
interest unless specifically noted.
CONDENSED CONSOLIDATED
STATEMENTS OF EARNINGS AND COMPREHENSIVE INCOME (UNAUDITED)
FOR THE THREE AND SIX MONTHS
ENDED
JUNE 2023/2022
Quarter Period
Year to Date
(In thousands, except per share
data)
2023
2022
2023
2022
NET SALES
$
2,043,918
100.0
%
$
2,900,874
100.0
%
$
3,866,394
100.0
%
$
5,390,187
100.0
%
COST OF GOODS SOLD
1,643,851
80.4
2,397,422
82.6
3,107,998
80.4
4,408,372
81.8
GROSS PROFIT
400,067
19.6
503,452
17.4
758,396
19.6
981,815
18.2
SELLING, GENERAL AND ADMINISTRATIVE
EXPENSES
204,703
10.0
214,538
7.4
399,386
10.3
434,688
8.1
OTHER LOSSES (GAINS), NET
1,867
0.1
3,348
0.1
3,805
0.1
2,536
—
EARNINGS FROM OPERATIONS
193,497
9.5
285,566
9.8
355,205
9.2
544,591
10.1
INTEREST AND OTHER
(4,025
)
(0.2
)
8,566
0.3
(6,866
)
(0.2
)
13,476
0.3
EARNINGS BEFORE INCOME TAXES
197,522
9.7
277,000
9.5
362,071
9.4
531,115
9.9
INCOME TAXES
46,734
2.3
69,147
2.4
85,705
2.2
130,131
2.4
NET EARNINGS
150,788
7.4
207,853
7.2
276,366
7.1
400,984
7.4
LESS NET LOSS (EARNINGS) ATTRIBUTABLE
TO NONCONTROLLING INTEREST
(27
)
—
(4,735
)
(0.2
)
464
—
(8,163
)
(0.2
)
NET EARNINGS ATTRIBUTABLE TO
CONTROLLING INTEREST
$
150,761
7.4
$
203,118
7.0
$
276,830
7.2
$
392,821
7.3
EARNINGS PER SHARE - BASIC
$
2.40
$
3.24
$
4.41
$
6.25
EARNINGS PER SHARE - DILUTED
$
2.36
$
3.23
$
4.35
$
6.22
COMPREHENSIVE INCOME
$
155,266
$
203,470
$
287,096
$
399,785
LESS COMPREHENSIVE INCOME ATTRIBUTABLE
TO NONCONTROLLING INTEREST
(1,721
)
(4,640
)
(3,481
)
(9,017
)
COMPREHENSIVE INCOME ATTRIBUTABLE TO
CONTROLLING INTEREST
$
153,545
$
198,830
$
283,615
$
390,768
CONDENSED CONSOLIDATED
STATEMENTS OF EARNINGS BY SEGMENT (UNAUDITED)
FOR THE THREE AND SIX MONTHS
ENDED
JUNE 2023/2022
Quarter Period
2023
(In thousands)
Retail
Packaging
Construction
All Other
Corporate
Total
NET SALES
$
919,998
$
488,100
$
550,464
$
86,224
$
(868
)
$
2,043,918
COST OF GOODS SOLD
799,017
369,865
413,260
64,128
(2,419
)
1,643,851
GROSS PROFIT
120,981
118,235
137,204
22,096
1,551
400,067
SELLING, GENERAL AND ADMINISTRATIVE
EXPENSES
60,855
61,377
74,083
13,943
(5,555
)
204,703
OTHER
(54
)
(6
)
1,162
1,336
(571
)
1,867
EARNINGS FROM OPERATIONS
$
60,180
$
56,864
$
61,959
$
6,817
$
7,677
$
193,497
Quarter Period
2022
(In thousands)
Retail
Packaging
Construction
All Other
Corporate
Total
NET SALES
$
1,121,440
$
676,333
$
975,376
$
124,416
$
3,309
$
2,900,874
COST OF GOODS SOLD
1,048,260
514,216
748,060
83,336
3,550
2,397,422
GROSS PROFIT
73,180
162,117
227,316
41,080
(241
)
503,452
SELLING, GENERAL AND ADMINISTRATIVE
EXPENSES
48,387
67,235
94,638
16,356
(12,078
)
214,538
OTHER
266
672
(154
)
1,976
588
3,348
EARNINGS FROM OPERATIONS
$
24,527
$
94,210
$
132,832
$
22,748
$
11,249
$
285,566
Year to Date
2023
(In thousands)
Retail
Packaging
Construction
All Other
Corporate
Total
NET SALES
$
1,669,575
$
974,661
$
1,066,057
$
153,736
$
2,365
$
3,866,394
COST OF GOODS SOLD
1,454,156
735,528
807,194
112,004
(884
)
3,107,998
GROSS PROFIT
215,419
239,133
258,863
41,732
3,249
758,396
SELLING, GENERAL AND ADMINISTRATIVE
EXPENSES
114,210
127,629
141,421
27,465
(11,339
)
399,386
OTHER
(27
)
(92
)
1,235
3,416
(727
)
3,805
EARNINGS FROM OPERATIONS
$
101,236
$
111,596
$
116,207
$
10,851
$
15,315
$
355,205
Year to Date
2022
(In thousands)
Retail
Packaging
Construction
All Other
Corporate
Total
NET SALES
$
2,114,672
$
1,287,702
$
1,761,847
$
219,983
$
5,983
$
5,390,187
COST OF GOODS SOLD
1,907,155
976,031
1,373,119
147,360
4,707
4,408,372
GROSS PROFIT
207,517
311,671
388,728
72,623
1,276
981,815
SELLING, GENERAL AND ADMINISTRATIVE
EXPENSES
111,055
134,466
176,975
32,981
(20,789
)
434,688
OTHER
538
604
103
2,079
(788
)
2,536
EARNINGS FROM OPERATIONS
$
95,924
$
176,601
$
211,650
$
37,563
$
22,853
$
544,591
ADJUSTED EBITDA RECONCILIATION
BY SEGMENT (UNAUDITED)
FOR THE THREE AND SIX MONTHS
ENDED
JUNE 2023/2022
Quarter Period
2023
(In thousands)
Retail
Packaging
Construction
All Other
Corporate
Total
Net earnings
$
45,924
$
43,090
$
47,300
$
6,932
$
7,542
$
150,788
Interest and other
23
419
(1
)
(2,263
)
(2,203
)
(4,025
)
Income taxes
14,233
13,355
14,660
2,148
2,338
46,734
Expenses associated with share-based
compensation arrangements
1,315
1,703
1,686
225
3,309
8,238
Net (gain) loss on disposition and
impairment of assets
(10
)
(7
)
16
70
(87
)
(18
)
Depreciation expense
6,029
7,995
4,634
929
7,425
27,012
Amortization of intangibles
1,277
2,236
702
751
396
5,362
Adjusted EBITDA
$
68,791
$
68,791
$
68,997
$
8,792
$
18,720
$
234,091
Adjusted EBITDA as a Percentage of Net
Sales
7.5
%
14.1
%
12.5
%
10.2
%
(2156.7
)%
11.5
%
Quarter Period
2022
(In thousands)
Retail
Packaging
Construction
All Other
Corporate
Total
Net earnings
$
18,146
$
69,949
$
99,890
$
14,233
$
5,635
$
207,853
Interest and other
17
1,016
—
3,789
3,744
8,566
Income taxes
6,364
23,245
32,942
4,726
1,870
69,147
Expenses associated with share-based
compensation arrangements
1,061
1,236
1,143
99
2,072
5,611
Net loss (gain) on disposition and
impairment of assets
226
672
(13
)
(5
)
192
1,072
Depreciation expense
4,556
6,759
3,354
715
6,808
22,192
Amortization of intangibles
916
1,701
820
503
128
4,068
Adjusted EBITDA
$
31,286
$
104,578
$
138,136
$
24,060
$
20,449
$
318,509
Adjusted EBITDA as a Percentage of Net
Sales
2.8
%
15.5
%
14.2
%
19.3
%
618.0
%
11.0
%
Year to Date
2023
(In thousands)
Retail
Packaging
Construction
All Other
Corporate
Total
Net earnings
$
77,240
$
84,415
$
88,704
$
11,620
$
14,387
$
276,366
Interest and other
44
1,002
(6
)
(4,372
)
(3,534
)
(6,866
)
Income taxes
23,952
26,179
27,509
3,603
4,462
85,705
Expenses associated with share-based
compensation arrangements
2,930
3,799
3,807
503
6,836
17,875
Net loss (gain) on disposition and
impairment of assets
26
(93
)
(31
)
60
(144
)
(182
)
Depreciation expense
11,647
15,677
9,262
1,544
14,656
52,786
Amortization of intangibles
2,332
4,482
1,499
1,283
775
10,371
Adjusted EBITDA
$
118,171
$
135,461
$
130,744
$
14,241
$
37,438
$
436,055
Adjusted EBITDA as a Percentage of Net
Sales
7.1
%
13.9
%
12.3
%
9.3
%
1583.0
%
11.3
%
Year to Date
2022
(In thousands)
Retail
Packaging
Construction
All Other
Corporate
Total
Net earnings
$
72,392
$
132,177
$
159,793
$
24,844
$
11,778
$
400,984
Interest and other
40
1,528
—
4,643
7,265
13,476
Income taxes
23,492
42,896
51,857
8,076
3,810
130,131
Expenses associated with share-based
compensation arrangements
2,282
2,644
2,607
323
4,686
12,542
Net loss (gain) on disposition and
impairment of assets
531
607
(24
)
5
(353
)
766
Depreciation expense
8,992
13,566
6,788
1,287
13,401
44,034
Amortization of intangibles
1,799
3,416
1,684
1,585
256
8,740
Adjusted EBITDA
$
109,528
$
196,834
$
222,705
$
40,763
$
40,843
$
610,673
Adjusted EBITDA as a Percentage of Net
Sales
5.2
%
15.3
%
12.6
%
18.5
%
682.7
%
11.3
%
CONDENSED CONSOLIDATED BALANCE
SHEETS (UNAUDITED)
JUNE 2023/2022
(In thousands)
ASSETS
2023
2022
LIABILITIES AND EQUITY
2023
2022
CURRENT ASSETS
CURRENT LIABILITIES
Cash and cash equivalents
$
702,148
$
138,071
Cash Overdraft
$
—
$
11,926
Restricted cash
761
729
Accounts payable
264,408
386,833
Investments
38,459
35,475
Accrued liabilities and other
289,211
384,738
Accounts receivable
802,300
1,046,543
Current portion of debt
2,385
40,496
Inventories
821,187
1,106,302
Other current assets
50,203
49,324
TOTAL CURRENT ASSETS
2,415,058
2,376,444
TOTAL CURRENT LIABILITIES
556,004
823,993
OTHER ASSETS
228,929
163,464
LONG-TERM DEBT AND FINANCE LEASE
OBLIGATIONS
274,821
276,315
INTANGIBLE ASSETS, NET
481,942
445,751
OTHER LIABILITIES
171,349
185,447
TEMPORARY EQUITY
6,772
—
PROPERTY, PLANT AND EQUIPMENT,
NET
718,014
625,164
SHAREHOLDERS' EQUITY
2,834,997
2,325,068
TOTAL ASSETS
$
3,843,943
$
3,610,823
TOTAL LIABILITIES AND EQUITY
$
3,843,943
$
3,610,823
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS (UNAUDITED)
FOR THE SIX MONTHS
ENDED
JUNE 2023/2022
(In thousands)
2023
2022
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net earnings
$
276,366
$
400,984
Adjustments to reconcile net earnings to
net cash used in operating activities:
Depreciation
52,786
44,034
Amortization of intangibles
10,371
8,740
Expense associated with share-based and
grant compensation arrangements
17,875
12,542
Deferred income taxes (credit)
(319
)
179
Unrealized (gain) loss on investment and
other
(1,291
)
6,181
Equity in loss of investee
1,005
1,532
Net (gain) loss on sale and disposition of
assets
(182
)
766
Changes in:
Accounts receivable
(183,717
)
(304,715
)
Inventories
154,413
(134,653
)
Accounts payable and cash overdraft
56,899
56,120
Accrued liabilities and other
(63,142
)
(1,313
)
NET CASH FROM OPERATING
ACTIVITIES
321,064
90,397
CASH FLOWS USED IN INVESTING
ACTIVITIES:
Purchases of property, plant, and
equipment
(84,981
)
(71,675
)
Proceeds from sale of property, plant and
equipment
789
2,029
Acquisitions, net of cash received and
purchase of equity method investment
67
(39,343
)
Purchases of investments
(14,747
)
(15,166
)
Proceeds from sale of investments
11,486
8,221
Other
2,076
(2,829
)
NET CASH USED IN INVESTING
ACTIVITIES
(85,310
)
(118,763
)
CASH FLOWS USED IN FINANCING
ACTIVITIES:
Borrowings under revolving credit
facilities
11,026
570,700
Repayments under revolving credit
facilities
(11,869
)
(571,075
)
Repayments of debt
(29
)
(2,485
)
Contingent consideration payments and
other
(6,179
)
(2,553
)
Proceeds from issuance of common stock
1,448
1,457
Dividends paid to shareholders
(31,149
)
(28,015
)
Distributions to noncontrolling
interest
(4,859
)
(2,053
)
Repurchase of common stock
(55,484
)
(90,805
)
Other
48
(184
)
NET CASH USED IN FINANCING
ACTIVITIES
(97,047
)
(125,013
)
Effect of exchange rate changes on
cash
4,579
956
NET CHANGE IN CASH AND CASH
EQUIVALENTS
143,286
(152,423
)
ALL CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD
559,623
291,223
ALL CASH AND CASH EQUIVALENTS, END OF
PERIOD
$
702,909
$
138,800
Reconciliation of cash and cash
equivalents and restricted cash:
Cash and cash equivalents, beginning of
period
$
559,397
$
286,662
Restricted cash, beginning of period
226
4,561
All cash and cash equivalents, beginning
of period
$
559,623
$
291,223
Cash and cash equivalents, end of
period
$
702,148
$
138,071
Restricted cash, end of period
761
729
All cash and cash equivalents, end of
period
$
702,909
$
138,800
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Dick Gauthier VP of Investor Relations (616) 365-1555
Grafico Azioni UFP Industries (NASDAQ:UFPI)
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Grafico Azioni UFP Industries (NASDAQ:UFPI)
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Da Giu 2023 a Giu 2024