UFP Industries Reports Record Profits for Fourth Quarter and Year
GRAND RAPIDS, Mich., Wednesday, Feb. 19, 2020 – Universal Forest Products, Inc. (n/k/a UFP Industries) (Nasdaq: UFPI), today announced record net sales and profits for the fourth quarter of 2019, as well as record EPS of $2.91 per diluted share for fiscal 2019 compared to $2.40 for fiscal 2018, a 21 percent increase.
“The hard-working employees of UFP Industries marked our 65th year in business by producing the best fourth quarter and year in our history,” stated CEO Matthew J. Missad. “Our record profitability is the result of increased unit sales, our ability to leverage fixed costs, and increased sales of our higher-margin, value-added products, which continue to comprise a greater portion of our product mix. We also generated record operating cash flow, allowing us to fund our strategic growth initiatives, further strengthen our balance sheet and return even more capital to our shareholders.”
Fourth Quarter 2019 Highlights (comparisons on a year-over-year basis):
- Earnings from operations of $51.8 million were up 14 percent and net earnings attributable to controlling interest of $37.7 million were up 24 percent
- EBITDA of $70.9 million increased by 12 percent
- -Net sales of $998 million represent a 1 percent increase; lower lumber prices reduced gross sales by 5 percent
Fiscal 2019 Highlights (comparisons on a year-over-year basis):
- Earnings from operations of $244.9 million were up 18 percent, and net earnings attributable to controlling interest of $179.7 million were up 21 percent
- EBITDA of $317.3 million was up 19 percent, exceeding the company’s unit sales increase of 6 percent
- New product sales were $540 million, up 13 percent. For 2020, the company has removed $126 million of 2019 sales from its new products classification, although it will continue to sell those products.
- Net sales of $4.42 billion were down 2 percent; lower lumber prices reduced gross sales by 8 percent
- Net cash flow from operating activities of $349.3 million was up 199%
By market, the Company reported the following 2019 results:
- Fourth Quarter: $323.3 million in gross sales, up 7 percent over the fourth quarter of 2018. Retail unit sales increased 10 percent due to new product growth and market share gains. Lower selling prices reduced gross sales by 3 percent.
- Full Year: $1.64 billion in gross sales, down 1 percent from 2018, due to a 7 percent increase in unit sales and an 8 percent decrease in selling prices.
- Fourth Quarter: $309.7 million in gross sales, down 4 percent from the fourth quarter of 2018; unit sales increased 2 percent, while lower lumber prices reduced gross sales by 6 percent. Acquisitions accounted for all the unit sales growth.
- Full Year: $1.33 billion in gross sales, up 2 percent over the previous year. Unit sales increased 7 percent; 5 percent came from acquisitions and 2 percent from organic growth.
- Fourth Quarter: $379.0 million in gross sales, up 1 percent over the fourth quarter of 2018, due to a 5 percent increase in unit sales and a 4 percent decrease in selling prices. Unit sales to commercial, manufactured housing and residential customers rose 9, 4, and 3 percent, respectively.
- Full Year: $1.52 billion in gross sales, down 5 percent from the previous year due to a 10 percent decrease in lumber prices and a 5 percent increase in unit sales. Unit sales to commercial and residential customers rose 11 and 5 percent, respectively. Manufactured housing sales were flat for the year.
On January 1, 2020, the company began doing business as UFP Industries to better reflect its growing diversity of products and markets. (The company will seek shareholder approval for the change to its corporate name at its annual meeting of shareholders in April.) The company also realigned its organizational structure, creating three market-focused segments: UFP Construction, UFP Industrial and UFP Retail.
“Although our results indicate we are performing well, we believe we can continue to improve and have made changes to do so,” added Missad. “Our new structure is intended to bring even greater alignment with our customers and allow for quicker introduction of new, value-added products. It also will help us more effectively allocate capital to grow and improve our business. We are truly excited about the future of UFP Industries.”
On February 3, 2020, UFP Industries announced it changed the frequency of its dividend payments from semi-annual to quarterly. The company also announced a 25 percent pro-rated increase in its dividend payment.
UNIVERSAL FOREST PRODUCTS, INC. (dba UFP Industries) 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.