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Share Name | Share Symbol | Market | Type |
---|---|---|---|
UFP Industries Inc | NASDAQ:UFPI | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
1.68 | 1.42% | 120.14 | 119.44 | 120.88 | 120.44 | 118.34 | 119.61 | 175,646 | 01:00:00 |
UFP Industries, Inc. (Nasdaq: UFPI) today announced first quarter 2024 results including net sales of $1.64 billion, net earnings attributable to controlling interests of $121 million, and earnings per diluted share of $1.96.
“We would like to credit our hard-working team and our balanced business model for allowing us to achieve first-quarter results that were in line with expectations,” said Chairman and CEO Matthew J. Missad. “As demand returns to more normalized levels, we are increasingly focused on improving our operational efficiencies by investing in automation and technology while consolidating operations where opportunities exist. We are also investing in growth through new products and by adding additional capacity in new regions. In addition, we will continue to leverage our strong cash flow and liquidity position to increase our share repurchase activity and support our quarterly dividend payouts. Our ability to invest in growth and return capital to shareholders supports our goal to create shareholder value during any economic environment.”
First Quarter 2024 Highlights (comparisons on a year-over-year basis):
1
Represents a non-GAAP measurement; see the reconciliation of non-GAAP financial measures and related explanations below.
Capital Allocation
UFP Industries maintains a strong balance sheet with $702.6 million in net surplus cash (surplus cash less interest-bearing debt and cash overdraft) on March 30, 2024, compared to $145.3 million in net surplus cash at the end of the first quarter of 2023. The company had approximately $2.2 billion of liquidity as of March 30, 2024. The company’s return-focused approach to capital allocation includes the following:
- Acquisitions and Organic Growth. The company continues to pursue strategic acquisitions that drive long-term growth and margin improvements and offer strong returns. When acquisition targets are not available at valuations that allow it to meet or exceed its hurdle rates, the company will invest in organic growth. The company is targeting capital investments of up to $300 million in 2024, with approximately $100 million targeted for automation and technology upgrades and another $100 million for new facilities and increased capacity at existing facilities.
- Dividend payments. On April 24, 2024, the Board of Directors for UFP Industries approved a quarterly dividend payment of $0.33 per share, a 32 percent increase over the quarterly dividend of $0.25 per share paid in June 2023. The dividend is payable on June 17, 2024, to shareholders of record on June 3, 2024.
- Share repurchases. The Company is authorized to purchase up to $200 million worth of outstanding stock through July 31, 2024. From July 26, 2023, through the end of the first quarter of 2024, the company repurchased approximately 594,000 shares at an average price of $106.64 (a total of $63.3 million). During the first quarter of 2024, the company repurchased approximately 319,000 shares at an average share price of $114.74 (a total of $36.6 million), and in April repurchased approximately 352,000 shares at an average share price of $114.15 ($40.2 million). As of April 30, 2024, the company has $97 million remaining in its authorization.
By business segment, the company reported the following first quarter 2024 results:
UFP Retail Solutions
Net sales of $629 million, down 17 percent compared to the first quarter of 2023, attributable to a 6 percent decline in selling prices, a 3 percent decline due to the transfer of certain sales to other segments, and an 8 percent decline in organic unit sales. Unit sales of Deckorators decking and railing products increased 4 percent (net sales increased 10 percent), partially offsetting the 9 percent unit sales decline in ProWood. Overall, unit sales declined 9 percent with big box customers and 7 percent with independent retailers due to lower demand and more conservative inventory positioning. Gross profit for the retail segment increased 6 percent to $101 million, primarily due to operational improvements, SKU rationalization, and better inventory positioning and utilization of our managed inventory programs.
UFP Packaging
Net sales of $424 million, down 13 percent compared to the first quarter of 2023, due to an 11 percent decrease in selling prices and a 6 percent decline in organic unit sales, partially offset by a 4 percent increase due to the transfer of certain sales from the retail segment. A 9 percent increase in unit sales for PalletOne due to market share gains partially offset the 11 percent decline in unit sales for Structural Packaging, attributable to weaker demand. Gross profit for the packaging segment decreased 29 percent to $85 million due to competitive price pressure.
UFP Construction
Net sales of $518 million was relatively unchanged compared to the first quarter of 2023 as a 10 percent decrease in selling prices was offset by an 8 percent increase in organic unit sales and a 2 percent increase due to the transfer of certain sales from the retail segment. Organic unit sales increased in Site Built (up 18 percent) and Factory Built (up 13 percent), and the company is well-positioned to take advantage of any improvement in demand in these markets. Gross profit for the construction segment decreased 6 percent to $114 million due to competitive price pressure.
Short-Term Outlook
Lumber Market: We continue to anticipate lumber prices will remain at lower, more historical levels in 2024 based on current supply and demand dynamics.
End Market Demand: We continue to follow key indicators and forecasts in the markets we serve and have modified our earlier published outlook based on more recent macroeconomic data and reduced expectations for federal interest rate cuts in the latter half of 2024. We anticipate demand for our packaging and retail segments will be down mid-single digits and demand for our construction segment to be slightly up to slightly down in 2024 as compared to 2023. We expect the soft demand and competitive price environment will continue for most of the year, with year-over-year improvements in the back half of the year because of more favorable year-over-year comparisons.
CONFERENCE CALL
UFP Industries will conduct a conference call to discuss its outlook and information included in this news release at 9 a.m. ET on Tuesday, April 30, 2024. 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 > Events & Presentations. A replay of the call will be available through the website.
UFP Industries, Inc.
UFP Industries, Inc. 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 #128 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 MONTHS ENDED
MARCH 2024/2022
Quarter Period and Year to Date
(In thousands, except per share data)
2024
2023
NET SALES
$
1,638,966
100.0
%
$
1,822,476
100.0
%
COST OF GOODS SOLD
1,312,888
80.1
1,464,147
80.3
GROSS PROFIT
326,078
19.9
358,329
19.7
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
192,059
11.7
194,683
10.7
OTHER LOSSES (GAINS), NET
196
—
1,938
0.1
EARNINGS FROM OPERATIONS
133,823
8.2
161,708
8.9
INTEREST AND OTHER
(12,763
)
(0.8
)
(2,841
)
(0.2
)
EARNINGS BEFORE INCOME TAXES
146,586
8.9
164,549
9.0
INCOME TAXES
25,487
1.6
38,971
2.1
NET EARNINGS
121,099
7.4
125,578
6.9
LESS NET LOSS (EARNINGS) ATTRIBUTABLE TO NONCONTROLLING INTEREST
(308
)
—
491
—
NET EARNINGS ATTRIBUTABLE TO CONTROLLING INTEREST
$
120,791
7.4
$
126,069
6.9
EARNINGS PER SHARE - BASIC
$
1.96
$
2.01
EARNINGS PER SHARE - DILUTED
$
1.96
$
1.98
COMPREHENSIVE INCOME
$
119,969
$
131,830
LESS COMPREHENSIVE INCOME ATTRIBUTABLE TO NONCONTROLLING INTEREST
(591
)
(1,760
)
COMPREHENSIVE INCOME ATTRIBUTABLE TO CONTROLLING INTEREST
$
119,378
$
130,070
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS BY SEGMENT (UNAUDITED)
FOR THE THREE MONTHS ENDED
MARCH 2024/2023
Quarter Period and Year to Date
2024
(In thousands)
Retail
Packaging
Construction
All Other
Corporate
Total
NET SALES
$
628,765
$
424,418
$
517,896
$
66,947
$
940
$
1,638,966
COST OF GOODS SOLD
527,641
338,978
403,561
49,002
(6,294
)
1,312,888
GROSS PROFIT
101,124
85,440
114,335
17,945
7,234
326,078
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
55,610
53,941
69,150
13,391
(33
)
192,059
OTHER
(466
)
253
(157
)
681
(115
)
196
EARNINGS FROM OPERATIONS
$
45,980
$
31,246
$
45,342
$
3,873
$
7,382
$
133,823
Quarter Period and Year to Date
2023
(In thousands)
Retail
Packaging
Construction
All Other
Corporate
Total
NET SALES
$
761,294
$
486,561
$
515,593
$
55,795
$
3,233
$
1,822,476
COST OF GOODS SOLD
665,990
365,663
393,934
37,025
1,535
1,464,147
GROSS PROFIT
95,304
120,898
121,659
18,770
1,698
358,329
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
53,913
66,252
67,338
12,964
(5,784
)
194,683
OTHER
1,133
(86
)
73
974
(156
)
1,938
EARNINGS FROM OPERATIONS
$
40,258
$
54,732
$
54,248
$
4,832
$
7,638
$
161,708
ADJUSTED EBITDA RECONCILIATION BY SEGMENT (UNAUDITED)
FOR THE THREE MONTHS ENDED
MARCH 2024/2023
Quarter Period and Year to Date
2024
(In thousands)
Retail
Packaging
Construction
All Other
Corporate
Total
Net earnings
$
38,063
$
25,328
$
37,468
$
6,166
$
14,074
$
121,099
Interest and other
(94
)
588
(11
)
(3,591
)
(9,655
)
(12,763
)
Income taxes
8,011
5,330
7,885
1,298
2,963
25,487
Expenses associated with share-based compensation arrangements
1,688
2,189
2,465
299
4,636
11,277
Net (gain) loss on disposition and impairment of assets
(272
)
253
(1
)
(9
)
(202
)
(231
)
Depreciation expense
6,965
8,469
5,384
789
8,412
30,019
Amortization of intangibles
998
2,192
702
1,534
456
5,882
Adjusted EBITDA
$
55,359
$
44,349
$
53,892
$
6,486
$
20,684
$
180,770
Adjusted EBITDA as a Percentage of Net Sales
8.8
%
10.4
%
10.4
%
9.7
%
2200.4
%
11.0
%
Quarter Period and Year to Date
2023
(In thousands)
Retail
Packaging
Construction
All Other
Corporate
Total
Net earnings
$
30,740
$
41,325
$
41,404
$
5,264
$
6,845
$
125,578
Interest and other
21
583
(5
)
(2,109
)
(1,331
)
(2,841
)
Income taxes
9,497
12,824
12,849
1,677
2,124
38,971
Expenses associated with share-based compensation arrangements
1,615
2,096
2,121
278
3,527
9,637
Net loss (gain) on disposition and impairment of assets
36
(86
)
(47
)
(10
)
(57
)
(164
)
Depreciation expense
5,834
7,682
4,628
399
7,231
25,774
Amortization of intangibles
1,055
2,246
797
532
379
5,009
Adjusted EBITDA
$
48,798
$
66,670
$
61,747
$
6,031
$
18,718
$
201,964
Adjusted EBITDA as a Percentage of Net Sales
6.4
%
13.7
%
12.0
%
10.8
%
579.0
%
11.1
%
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
MARCH 2024/2023
(In thousands)
ASSETS
2024
2023
LIABILITIES AND EQUITY
2024
2023
CURRENT ASSETS
CURRENT LIABILITIES
Cash and cash equivalents
$
979,746
$
423,299
Accounts payable
$
254,902
$
277,989
Restricted cash
761
761
Accrued liabilities and other
226,065
249,350
Investments
36,978
37,534
Current portion of debt
44,051
3,020
Accounts receivable
713,414
809,389
Inventories
745,295
960,338
Other current assets
38,221
35,692
TOTAL CURRENT ASSETS
2,514,415
2,267,013
TOTAL CURRENT LIABILITIES
525,018
530,359
OTHER ASSETS
258,537
242,541
LONG-TERM DEBT AND FINANCE LEASE OBLIGATIONS
233,046
275,002
INTANGIBLE ASSETS, NET
511,127
487,080
OTHER LIABILITIES
185,097
178,986
TEMPORARY EQUITY
19,383
6,801
PROPERTY, PLANT AND EQUIPMENT, NET
794,560
700,155
SHAREHOLDERS' EQUITY
3,116,095
2,705,641
TOTAL ASSETS
$
4,078,639
$
3,696,789
TOTAL LIABILITIES AND EQUITY
$
4,078,639
$
3,696,789
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
FOR THE THREE MONTHS ENDED
MARCH 2024/2023
(In thousands)
2024
2023
CASH FLOWS USED IN OPERATING ACTIVITIES:
Net earnings
$
121,099
$
125,578
Adjustments to reconcile net earnings to net cash used in operating activities:
Depreciation
30,019
25,774
Amortization of intangibles
5,882
5,009
Expense associated with share-based and grant compensation arrangements
11,277
9,637
Deferred income taxes
119
(242
)
Unrealized gain on investment and other
(2,130
)
(149
)
Equity in loss of investee
594
588
Net gain on sale and disposition of assets
(231
)
(164
)
Changes in:
Accounts receivable
(164,613
)
(191,064
)
Inventories
(17,788
)
14,674
Accounts payable and cash overdraft
52,264
68,388
Accrued liabilities and other
(53,290
)
(95,105
)
NET CASH USED IN OPERATING ACTIVITIES
(16,798
)
(37,076
)
CASH FLOWS USED IN INVESTING ACTIVITIES:
Purchases of property, plant, and equipment
(49,148
)
(38,166
)
Proceeds from sale of property, plant and equipment
1,344
319
Purchases of investments
(9,352
)
(11,709
)
Proceeds from sale of investments
4,300
8,849
Other
(3,206
)
(1,151
)
NET CASH USED IN INVESTING ACTIVITIES
(56,062
)
(41,858
)
CASH FLOWS USED IN FINANCING ACTIVITIES:
Borrowings under revolving credit facilities
5,100
4,437
Repayments under revolving credit facilities
(4,278
)
(4,518
)
Repayments of debt
—
(29
)
Repayment of debt on behalf of investee
(6,303
)
—
Contingent consideration payments and other
(3,779
)
(6,179
)
Proceeds from issuance of common stock
654
685
Dividends paid to shareholders
(20,411
)
(15,642
)
Distributions to noncontrolling interest
(3,331
)
(4,859
)
Payments to taxing authorities in connection with shares directly withheld from employees
(17,838
)
—
Repurchase of common stock
(18,797
)
(33,288
)
Other
15
25
NET CASH USED IN FINANCING ACTIVITIES
(68,968
)
(59,368
)
Effect of exchange rate changes on cash
79
2,739
NET CHANGE IN CASH AND CASH EQUIVALENTS
(141,749
)
(135,563
)
ALL CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD
1,122,256
559,623
ALL CASH AND CASH EQUIVALENTS, END OF PERIOD
$
980,507
$
424,060
Reconciliation of cash and cash equivalents and restricted cash:
Cash and cash equivalents, beginning of period
$
1,118,329
$
559,397
Restricted cash, beginning of period
3,927
226
All cash and cash equivalents, beginning of period
$
1,122,256
$
559,623
Cash and cash equivalents, end of period
$
979,746
$
423,299
Restricted cash, end of period
761
761
All cash and cash equivalents, end of period
$
980,507
$
424,060
View source version on businesswire.com: https://www.businesswire.com/news/home/20240430277967/en/
Dick Gauthier VP of Investor Relations (616) 365-1555
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