8-K
UFP INDUSTRIES INC (UFPI)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 20, 2024
UFP INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
| <br><br> | <br><br> | <br><br> |
|---|---|---|
| Michigan<br><br>(State or other Jurisdiction of Incorporation) | 0-22684<br><br>(Commission File Number) | 38-1465835<br><br>(IRS Employer Identification No.) |
| <br><br><br><br> | <br><br><br><br> |
|---|---|
| 2801 East Beltline, NE **** Grand Rapids , Michigan<br><br>(Address of Principal Executive Offices) | 49525<br><br>(Zip Code) |
Registrant's telephone number, including area code: ( 616 ) 364-6161
None
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425).
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12).
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)).
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)).
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
|---|---|---|
| Common Stock | UFPI | The NASDAQ Stock Market, LLC |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02 Results of Operations and Financial Condition
On February 20, 2024, the Registrant issued a press release announcing its financial results for the quarter-ended December 30, 2023. A copy of the Registrant’s press release is attached as Exhibit 99(a) to this Current Report.
Item 9.01 Financial Statements, Pro Forma Financial Information, and Exhibits
(c)Exhibits
99(a)Press Release dated February 20, 2024
104Cover Page Interactive File (the cover page XBRL tags are embedded in the Inline XBRL document).
2
EXHIBIT INDEX
| | | | |
|---|---|---|---|
| Exhibit Number | Document | | |
| | | | |
| 99(a) | | Press Release, dated February 20, 2024. | |
| | | | |
| 104 | | Cover Page Interactive Data File (the cover page XBRL tags are embedded in the Inline XBRL document). |
3
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| | | | |
|---|---|---|---|
| | UFP INDUSTRIES, INC. | ||
| | (Registrant) | ||
| | | | |
| Dated: February 20, 2024 | By: | /s/ Michael R. Cole | |
| | | Michael R. Cole | |
| | | Principal Financial Officer and Treasurer |
4
UFP Industries, Inc.
Page 1
Exhibit 99(a)
News release
---------------AT THE COMPANY---------------
Dick Gauthier
VP of Investor Relations
(616) 365-1555
FOR IMMEDIATE RELEASE
Tuesday, February 20, 2024
UFP Industries Announces Fourth Quarter and Fiscal 2023 Results Raising long-term goals for unit growth and profitability
GRAND RAPIDS, Mich., Tuesday, Feb. 20, 2024 – UFP Industries, Inc. (Nasdaq: UFPI) today announced net sales of $1.5 billion, net earnings attributable to controlling interest of $103 million, and earnings per diluted share of $1.62 for the fourth quarter of 2023. The company also announced net sales of $7.2 billion and earnings per diluted share of $8.07 for fiscal 2023. Fiscal 2023 results reflect the impact of one less week compared to fiscal 2022.
“Our teammates produced solid results in 2023 and built the foundation for future growth in sales and profits,” said Chairman and CEO Matthew J. Missad. “Our operating margins and robust cash flow continue to surpass historic levels and allow us to remain on offense. We have the capital to make significant investments to grow, both organically and through acquisitions, while continuing to enhance our value-added product offering. This gives us the confidence to raise our long-term targets for growth and profitability.”
“As we look to 2024, we expect market conditions to remain challenging in the first half of the year before improving in the second half,” Missad added. “We are committed to make each aspect of our business better as we work toward greater efficiencies, lower costs and more innovative products and services. The team’s commitment to winning contributed greatly to our success in 2023 and positions us well for the future.”
Fourth Quarter 2023 Highlights (comparisons on a year-over-year basis; results reflect the impact of one less week of operating activity in the fourth quarter of 2023):
| ● | Net sales of $1.52 billion decreased 20 percent due to a 10 percent decrease in prices and a 10 percent decrease in organic unit sales. The organic unit growth decline was due, in part, to the impact of one less week of operating activity in the fourth quarter of 2023, which resulted in a 6 percent unit decline. |
|---|---|
| ● | New product sales of $142 million decreased 18 percent, largely due to lower lumber prices. New product sales comprised 9.2 percent of total sales in 2023 compared to 8.9 percent last year. |
| --- | --- |
UFP Industries, Inc.
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| ● | Earnings from operations of $124 million decreased 26 percent. |
|---|---|
| ● | Adjusted EBITDA^1^ of $166 million decreased 22 percent, and adjusted EBITDA^1^ margin declined 20 basis points to 10.9 percent. |
| --- | --- |
Fiscal 2023 Highlights (comparisons on a year-over-year basis; results reflect the impact of one less week of operating activity in 2023):
| ● | Net sales of $7.2 billion decreased 25 percent from the record year of 2022 due to a 16 percent decrease in prices and a 9 percent decline in organic unit sales. One less week of operating activity in 2023 resulted in a 1 percent unit decline. |
|---|---|
| ● | New product sales were $716 million, down 6 percent, primarily due to lower lumber prices. New product sales comprised 9.7 percent of total sales in 2023 compared to 7.7 percent in 2022. |
| --- | --- |
| ● | Higher-margin, value-added product sales improved to 68 percent of total sales, up from 63 percent in 2022. |
| --- | --- |
| ● | Earnings from operations of $647 million decreased 32 percent. |
| --- | --- |
| ● | Diluted EPS of $8.07 decreased 26 percent. |
| --- | --- |
| ● | Adjusted EBITDA^1^ of $810 million decreased 26 percent. Adjusted EBITDA^1^ margin declined 20 basis points to 11.2 percent. |
| --- | --- |
Capital Allocation
UFP Industries maintains a strong balance sheet with $841.9 million in net surplus cash (surplus cash less interest-bearing debt and cash overdraft) at year-end 2023, compared to $281.3 million in net surplus cash at year-end 2022. The company had more than $2.4 billion of liquidity at year-end 2023. The company’s return-focused approach to capital allocation includes the following:
| - | Acquisitions. In September 2023, the company acquired Palets Suller Group, a leader in machine-built pallets based in Castellón, Spain, for approximately $52 million. The company continues to seek strategic acquisitions that drive long-term growth and margin improvements, enhance its capabilities, and create incremental value for its customers and shareholders. |
|---|---|
| - | Capital expenditures. The company invested approximately $180 million in capital expenditures during 2023 and is targeting $250 million to $300 million in capital expenditures for 2024. These investments include expanding capacity for its Deckorators line in the Northeastern U.S., its site-built construction business in the Western U.S., and its packaging business nationally. |
| --- | --- |
^1^ Represents a non-GAAP measurement; see the reconciliation of non-GAAP financial measures and related explanations below.
UFP Industries, Inc.
Page 3
| - | Dividend payments. The company paid dividends of $68.2 million or $1.10 per share in 2023, a 16 percent increase per share over 2022. On February 1, 2024, the Board of Directors approved a quarterly dividend payment of $0.33 per share, payable on March 15, 2024, to shareholders of record on March 1, 2024. The dividend represents a 10 percent increase over the quarterly dividend of $0.30 per share paid in December 2023 and a 32 percent increase over the quarterly dividend of $0.25 per share paid in March 2023. |
|---|---|
| - | Share repurchases. The company repurchased approximately 975,000 shares of common stock for $82.1 million during 2023 (an average price of $84.27 per share). The company has remaining authorization to purchase up to $173 million in shares through July 31, 2024. |
| --- | --- |
By business segment, the company reported the following 2023 results:
UFP Retail Solutions
Fourth Quarter: $505.6 million in net sales, down 27 percent from the fourth quarter of 2022 due to a 9 percent decline in selling prices and an 18 percent decline in organic unit sales. One less week of operating activity in the fourth quarter of 2023 resulted in a 6 percent unit decline. The remaining organic unit decline was primarily due to the UFP-Edge and ProWood business units.
Full Year: $2.87 billion in net sales, down 21 percent from 2022 due to a 15 percent decline in selling prices and a 6 percent decline in organic unit sales. One less week of operating activity in 2023 resulted in a 1 percent unit decline.
UFP Packaging
Fourth Quarter: $413.7 million in net sales, down 21 percent compared to the fourth quarter of 2022, due to a 10 percent decline in selling prices and an 11 percent decline in organic unit sales. One less week of operating activity in the fourth quarter of 2023 resulted in a 6 percent unit decline.
Full Year: $1.84 billion in net sales, down 23 percent from the previous year due to a 17 percent decline in selling prices and a 6 percent decrease in organic unit sales. One less week of operating activity in 2023 resulted in a 1 percent unit decline.
UFP Construction
Fourth Quarter: $511 million in net sales, down 16 percent from the fourth quarter of 2022, due to a 13 percent decline in selling prices and a 3 percent decline in organic unit sales. One less week of operating activity in the fourth quarter of 2023 resulted in a 6 percent unit decline.
Full Year: $2.16 billion in net sales, down 31 percent from the previous year due to an 18 percent decline in selling prices and a 13 percent decline in organic unit sales. One less week of operating activity in 2023 resulted in a 1 percent unit decline.
UFP Industries, Inc.
Page 4
Short-Term Outlook
Lumber Market: We anticipate lumber prices, which returned to more normalized levels in 2023 after pandemic-inflated highs, will remain at lower levels based on current supply and demand and follow more typical seasonal trends.
End Market Demand: Based on key economic packaging indicators and forecasts for homebuilding and repair and remodeling, we anticipate demand for our packaging segment will be slightly down and demand for our construction and retail segments to be slightly up to slightly down in 2024. We expect softer demand and a more competitive price environment in the first half of 2024, with improvement during the second half of the year.
Long-Term Goals
The company’s five-year financial goals include:
| - | Achieving compounded annual unit sales growth of 7-10 percent. Smaller tuck-in acquisitions are intended to contribute to this goal. |
|---|---|
| - | Realizing and sustaining a 12.5 percent adjusted EBITDA margin by continuing to enhance our capabilities and grow our portfolio of sales of value-added products, and by achieving operating improvements. |
| --- | --- |
| - | Earning an incremental return on investment over our cost of capital. |
| --- | --- |
| - | Maintaining a conservative capital structure. |
| --- | --- |
CONFERENCE CALL
UFP Industries will conduct a conference call to discuss information included in this news release and related matters at 9 a.m. ET on Tuesday, February 20, 2024. The call will be hosted by 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.ufpi.com. 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.
UFP Industries, Inc.
Page 5
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.
#
UFP Industries, Inc.
Page 6
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS AND COMPREHENSIVE INCOME (UNAUDITED)
FOR THE THREE AND TWELVE MONTHS ENDED
DECEMBER 2023/2022
| | | | | | | | | | | | | | | | | | | | | | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| | | Quarter Period | Year to Date | ||||||||||||||||||
| (In thousands, except per share data) | **** | 2023 | 2022 | 2023 | 2022 | ||||||||||||||||
| NET SALES | | $ | 1,524,353 | 100.0 | % | $ | 1,913,697 | 100.0 | % | $ | 7,218,384 | 100.0 | % | $ | 9,626,739 | 100.0 | % | ||||
| | | | | | | | | | | | | | | | | | | | | | |
| COST OF GOODS SOLD | | | 1,228,211 | | 80.6 | | | 1,556,227 | | 81.3 | | | 5,799,446 | | 80.3 | | | 7,837,278 | | 81.4 | |
| | | | | | | | | | | | | | | | | | | | | | |
| GROSS PROFIT | | | 296,142 | | 19.4 | | | 357,470 | | 18.7 | | | 1,418,938 | | 19.7 | | | 1,789,461 | | 18.6 | |
| | | | | | | | | | | | | | | | | | | | | | |
| SELLING, GENERAL AND ADMINISTRATIVE EXPENSES | | | 171,598 | | 11.3 | | | 183,064 | | 9.6 | | | 766,633 | | 10.6 | | | 832,079 | | 8.6 | |
| OTHER LOSSES (GAINS), NET | | | 547 | | — | | | 5,857 | | 0.3 | | | 5,771 | | 0.1 | | | 7,198 | | 0.1 | |
| | | | | | | | | | | | | | | | | | | | | | |
| EARNINGS FROM OPERATIONS | | | 123,997 | | 8.1 | | | 168,549 | | 8.8 | | | 646,534 | | 9.0 | | | 950,184 | | 9.9 | |
| | | | | | | | | | | | | | | | | | | | | | |
| INTEREST AND OTHER | | | (11,664) | | (0.8) | | | (4,490) | | (0.2) | | | (24,707) | | (0.3) | | | 15,368 | | 0.2 | |
| | | | | | | | | | | | | | | | | | | | | | |
| EARNINGS BEFORE INCOME TAXES | | | 135,661 | | 8.9 | | | 173,039 | | 9.0 | | | 671,241 | | 9.3 | | | 934,816 | | 9.7 | |
| | | | | | | | | | | | | | | | | | | | | | |
| INCOME TAXES | | | 31,753 | | 2.1 | | | 41,160 | | 2.2 | | | 156,784 | | 2.2 | | | 229,852 | | 2.4 | |
| | | | | | | | | | | | | | | | | | | | | | |
| NET EARNINGS | | | 103,908 | | 6.8 | | | 131,879 | | 6.9 | | | 514,457 | | 7.1 | | | 704,964 | | 7.3 | |
| | | | | | | | | | | | | | | | | | | | | | |
| LESS NET LOSS (EARNINGS) ATTRIBUTABLE TO NONCONTROLLING INTEREST | | | (461) | | — | | | 710 | | — | | | (145) | | — | | | (12,313) | | (0.1) | |
| | | | | | | | | | | | | | | | | | | | | | |
| NET EARNINGS ATTRIBUTABLE TO CONTROLLING INTEREST | | $ | 103,447 | | 6.8 | | $ | 132,589 | | 6.9 | | $ | 514,312 | | 7.1 | | $ | 692,651 | | 7.2 | |
| | | | | | | | | | | | | | | | | | | | | | |
| EARNINGS PER SHARE - BASIC | | $ | 1.65 | | | | $ | 2.12 | | | | $ | 8.21 | | | | $ | 11.05 | | | |
| | | | | | | | | | | | | | | | | | | | | | |
| EARNINGS PER SHARE - DILUTED | | $ | 1.62 | | | | $ | 2.10 | | | | $ | 8.07 | | | | $ | 10.97 | | | |
| | | | | | | | | | | | | | | | | | | | | | |
| COMPREHENSIVE INCOME | | $ | 111,775 | | | | $ | 135,057 | | | | $ | 529,293 | | | | $ | 702,466 | | | |
| | | | | | | | | | | | | | | | | | | | | | |
| LESS COMPREHENSIVE INCOME ATTRIBUTABLE TO NONCONTROLLING INTEREST | | | (2,139) | | | | | (195) | | | | | (4,800) | | | | | (13,485) | | | |
| | | | | | | | | | | | | | | | | | | | | | |
| COMPREHENSIVE INCOME ATTRIBUTABLE TO CONTROLLING INTEREST | | $ | 109,636 | | | | $ | 134,862 | | | | $ | 524,493 | | | | $ | 688,981 | | | |
| | | | | | | | | | | | | | | | | | | | | | |
UFP Industries, Inc.
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CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS BY SEGMENT (UNAUDITED)
FOR THE THREE AND TWELVE MONTHS ENDED
DECEMBER 2023/2022
| | | | | | | | | | | | | | | | | | | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| | | Quarter Period | ||||||||||||||||
| | **** | 2023 | ||||||||||||||||
| (In thousands) | | Retail | | Packaging | | Construction | | All Other | | Corporate | | Total | ||||||
| NET SALES | | $ | 505,559 | $ | 413,654 | | $ | 511,042 | | $ | 93,722 | | $ | 376 | | $ | 1,524,353 | |
| COST OF GOODS SOLD | | 444,357 | | 331,488 | | 390,983 | | 69,288 | | | (7,905) | | | 1,228,211 | ||||
| GROSS PROFIT | | | 61,202 | | | 82,166 | | | 120,059 | | | 24,434 | | | 8,281 | | | 296,142 |
| SELLING, GENERAL AND ADMINISTRATIVE EXPENSES | | | 38,971 | | | 39,170 | | | 62,393 | | | 13,252 | | | 17,812 | | | 171,598 |
| OTHER | | 753 | | | 92 | | | 87 | | | 59 | | | (444) | | | 547 | |
| EARNINGS FROM OPERATIONS | | $ | 21,478 | | $ | 42,904 | | $ | 57,579 | | $ | 11,123 | | $ | (9,087) | | $ | 123,997 |
| | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| | | Quarter Period | ||||||||||||||||
| | **** | 2022 | ||||||||||||||||
| (In thousands) | | Retail | | Packaging | | Construction | | All Other | | Corporate | | Total | ||||||
| NET SALES | | $ | 690,663 | $ | 522,171 | | $ | 604,895 | | $ | 99,425 | | $ | (3,457) | | $ | 1,913,697 | |
| COST OF GOODS SOLD | | 631,116 | | 391,443 | | 466,541 | | | 70,207 | | | (3,080) | | | 1,556,227 | |||
| GROSS PROFIT | | | 59,547 | | | 130,728 | | | 138,354 | | | 29,218 | | | (377) | | | 357,470 |
| SELLING, GENERAL AND ADMINISTRATIVE EXPENSES | | | 33,893 | | | 49,871 | | | 61,695 | | | 17,012 | | | 20,592 | | | 183,063 |
| OTHER | | 183 | | | (489) | | | 1,259 | | | 4,844 | | | 60 | | | 5,857 | |
| EARNINGS FROM OPERATIONS | | $ | 25,471 | | $ | 81,346 | | $ | 75,400 | | $ | 7,362 | | $ | (21,029) | | $ | 168,550 |
| | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| | | Year to Date | ||||||||||||||||
| | | 2023 | ||||||||||||||||
| (In thousands) | | Retail | | Packaging | | Construction | | All Other | | Corporate | | Total | ||||||
| NET SALES | | $ | 2,886,515 | | $ | 1,838,200 | | $ | 2,161,059 | | $ | 328,884 | | $ | 3,726 | | $ | 7,218,384 |
| COST OF GOODS SOLD | | 2,508,513 | | 1,422,940 | | 1,637,329 | | | 240,106 | | | (9,442) | | | 5,799,446 | |||
| GROSS PROFIT | | | 378,002 | | | 415,260 | | | 523,730 | | | 88,778 | | | 13,168 | | | 1,418,938 |
| SELLING, GENERAL AND ADMINISTRATIVE EXPENSES | | | 209,182 | | | 219,323 | | | 279,107 | | | 55,654 | | | 3,367 | | | 766,633 |
| OTHER | | | 757 | | | 8 | | | 1,277 | | | 4,482 | | | (753) | | | 5,771 |
| EARNINGS FROM OPERATIONS | | $ | 168,063 | | $ | 195,929 | | $ | 243,346 | | $ | 28,642 | | $ | 10,554 | | $ | 646,534 |
| | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| | | Year to Date | ||||||||||||||||
| | | 2022 | ||||||||||||||||
| (In thousands) | | Retail | | Packaging | | Construction | | All Other | | Corporate | | Total | ||||||
| NET SALES | | $ | 3,650,639 | | $ | 2,394,681 | | $ | 3,143,868 | | $ | 431,611 | | $ | 5,940 | | $ | 9,626,739 |
| COST OF GOODS SOLD | | 3,306,112 | | 1,808,449 | | 2,417,212 | | | 300,307 | | | 5,198 | | | 7,837,278 | |||
| GROSS PROFIT | | | 344,527 | | | 586,232 | | | 726,656 | | | 131,304 | | | 742 | | | 1,789,461 |
| SELLING, GENERAL AND ADMINISTRATIVE EXPENSES | | | 193,383 | | | 250,858 | | | 328,125 | | | 66,745 | | | (7,032) | | | 832,079 |
| OTHER | | | 817 | | | 129 | | | 1,097 | | | 5,929 | | | (774) | | | 7,198 |
| EARNINGS FROM OPERATIONS | | $ | 150,327 | | $ | 335,245 | | $ | 397,434 | | $ | 58,630 | | $ | 8,548 | | $ | 950,184 |
| | | | | | | | | | | | | | | | | | | |
UFP Industries, Inc.
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ADJUSTED EBITDA RECONCILIATION BY SEGMENT (UNAUDITED)
FOR THE THREE MONTHS ENDED
DECEMBER 2023/2022
| | | | | | | | | | | | | | | | | | | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| | | Quarter Period | ||||||||||||||||
| | **** | 2023 | ||||||||||||||||
| (In thousands) | | Retail | | Packaging | | Construction | | All Other | | Corporate | | Total | ||||||
| Net earnings | | $ | 16,426 | **** | $ | 31,823 | | $ | 44,104 | | $ | 11,933 | | $ | (378) | | $ | 103,908 |
| Interest and other | | 32 | | 1,356 | | (3) | | (4,456) | | (8,593) | | | (11,664) | |||||
| Income taxes | | | 5,020 | | | 9,725 | | | 13,478 | | | 3,646 | | | (116) | | | 31,753 |
| Expenses associated with share-based compensation arrangements | | | 1,331 | | | 2,110 | | | 1,698 | | | 248 | | | 3,444 | | | 8,831 |
| Net loss (gain) on disposition and impairment of assets | | | 740 | | | 92 | | | 54 | | | (27) | | | (654) | | | 205 |
| Gain from reduction of estimated earnout liability | | | (134) | | | (3,475) | | | — | | | — | | | — | | | (3,609) |
| Depreciation expense | | | 6,353 | | | 8,958 | | | 5,354 | | | 1,520 | | | 7,946 | | | 30,131 |
| Amortization of intangibles | | 1,101 | | | 2,192 | | | 702 | | | 1,642 | | | 365 | | | 6,002 | |
| Adjusted EBITDA | | $ | 30,869 | | $ | 52,781 | | $ | 65,387 | | $ | 14,506 | | $ | 2,014 | | $ | 165,557 |
| | | | | | | | | | | | | | | | | | | |
| Adjusted EBITDA as a Percentage of Net Sales | | | 6.1% | | | 12.8% | | | 12.8% | | | 15.5% | | | 535.6% | | | 10.9% |
| | | | | | | | | | | | | | | | | | | |
| | | Quarter Period | ||||||||||||||||
| | **** | 2022 | ||||||||||||||||
| (In thousands) | | Retail | | Packaging | | Construction | | All Other | | Corporate | | Total | ||||||
| Net earnings | | $ | 19,357 | **** | $ | 62,233 | | $ | 57,451 | | $ | 8,708 | | $ | (15,870) | | $ | 131,879 |
| Interest and other | | 106 | | (572) | | (8) | | (4,038) | | 22 | | | (4,490) | |||||
| Income taxes | | | 6,008 | | | 19,685 | | | 17,957 | | | 2,692 | | | (5,182) | | | 41,160 |
| Expenses associated with share-based compensation arrangements | | | 1,153 | | | 1,283 | | | 1,185 | | | 148 | | | 4,408 | | | 8,177 |
| Net loss (gain) on disposition and impairment of assets | | | 168 | | | (489) | | | 1,287 | | | 342 | | | (375) | | | 933 |
| Impairment of goodwill and other intangibles | | | — | | | — | | | — | | | 4,261 | | | — | | | 4,261 |
| Depreciation expense | | | 6,085 | | | 5,694 | | | 5,263 | | | 964 | | | 7,176 | | | 25,182 |
| Amortization of intangibles | | 1,389 | | | 1,152 | | | 877 | | | 2,504 | | | 129 | | | 6,051 | |
| Adjusted EBITDA | | $ | 34,266 | | $ | 88,986 | | $ | 84,012 | | $ | 15,581 | | $ | (9,692) | | $ | 213,153 |
| | | | | | | | | | | | | | | | | | | |
| Adjusted EBITDA as a Percentage of Net Sales | | | 5.0% | | | 17.0% | | | 13.9% | | | 15.7% | | | 280.4% | | | 11.1% |
UFP Industries, Inc.
Page 9
ADJUSTED EBITDA RECONCILIATION BY SEGMENT (UNAUDITED)
FOR THE TWELVE MONTHS ENDED
DECEMBER 2023/2022
| | | | | | | | | | | | | | | | | | | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| | | Year to Date | ||||||||||||||||
| | **** | 2023 | ||||||||||||||||
| (In thousands) | | Retail | | Packaging | | Construction | | All Other | | Corporate | | Total | ||||||
| Net earnings | | $ | 128,712 | **** | $ | 148,269 | | $ | 186,603 | | $ | 28,790 | | $ | 22,083 | | $ | 514,457 |
| Interest and other | | 108 | | 2,368 | | (10) | | (8,932) | | (18,241) | | | (24,707) | |||||
| Income taxes | | | 39,243 | | | 45,292 | | | 56,753 | | | 8,784 | | | 6,712 | | | 156,784 |
| Expenses associated with share-based compensation arrangements | | | 5,575 | | | 7,595 | | | 7,190 | | | 935 | | | 13,604 | | | 34,899 |
| Net loss (gain) on disposition and impairment of assets | | | 801 | | | 7 | | | 9 | | | (167) | | | (910) | | | (260) |
| Gain from reduction of estimated earnout liability | | | (593) | | | (1,784) | | | (800) | | | | | | — | | | (3,177) |
| Depreciation expense | | | 23,943 | | | 32,996 | | | 19,546 | | | 3,994 | | | 30,084 | | | 110,563 |
| Amortization of intangibles | | 4,566 | | | 8,849 | | | 2,904 | | | 3,488 | | | 1,520 | | | 21,327 | |
| Adjusted EBITDA | | $ | 202,355 | | $ | 243,592 | | $ | 272,195 | | $ | 36,892 | | $ | 54,852 | | $ | 809,886 |
| | | | | | | | | | | | | | | | | | | |
| Adjusted EBITDA as a Percentage of Net Sales | | | 7.0% | | | 13.3% | | | 12.6% | | | 11.2% | | | 1472.1% | | | 11.2% |
| | | | | | | | | | | | | | | | | | | |
| | | Year to Date | ||||||||||||||||
| | **** | 2022 | ||||||||||||||||
| (In thousands) | | Retail | | Packaging | | Construction | | All Other | | Corporate | | Total | ||||||
| Net earnings | | $ | 113,245 | **** | $ | 251,187 | | $ | 299,721 | | $ | 42,844 | | $ | (2,033) | | $ | 704,964 |
| Interest and other | | 162 | | 2,158 | | (12) | | 1,817 | | 11,243 | | | 15,368 | |||||
| Income taxes | | | 36,920 | | | 81,900 | | | 97,725 | | | 13,969 | | | (662) | | | 229,852 |
| Expenses associated with share-based compensation arrangements | | | 4,476 | | | 5,125 | | | 4,882 | | | 614 | | | 13,059 | | | 28,156 |
| Net loss (gain) on disposition and impairment of assets | | | 785 | | | 131 | | | 1,349 | | | 347 | | | (1,327) | | | 1,285 |
| Impairment of goodwill and other intangibles | | | — | | | — | | | — | | | 4,261 | | | — | | | 4,261 |
| Depreciation expense | | | 19,898 | | | 28,191 | | | 15,364 | | | 2,992 | | | 27,618 | | | 94,063 |
| Amortization of intangibles | | 4,131 | | | 6,925 | | | 3,358 | | | 4,571 | | | 514 | | | 19,499 | |
| Adjusted EBITDA | | $ | 179,617 | | $ | 375,617 | | $ | 422,387 | | $ | 71,415 | | $ | 48,412 | | $ | 1,097,448 |
| | | | | | | | | | | | | | | | | | | |
| Adjusted EBITDA as a Percentage of Net Sales | | | 4.9% | | | 15.7% | | | 13.4% | | | 16.5% | | | 815.0% | | | 11.4% |
UFP Industries, Inc.
Page 10
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
DECEMBER 2023/2022
| | | | | | | | | | | | | | | | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (In thousands) | | | | | | | | | | | | | | | |
| ASSETS | **** | | 2023 | **** | | 2022 | **** | LIABILITIES AND EQUITY | **** | | 2023 | **** | | 2022 | |
| | | | | | | | | | | | | | | | |
| CURRENT ASSETS | | | | | | | | CURRENT LIABILITIES | | | | | | | |
| Cash and cash equivalents | | $ | 1,118,329 | | $ | 559,397 | | Accounts payable | | $ | 203,055 | | $ | 206,941 | |
| Restricted cash | | | 3,927 | | | 226 | | Accrued liabilities and other | | | 322,021 | | | 401,952 | |
| Investments | | | 34,745 | | | 36,013 | | Current portion of debt | | | 42,900 | | | 2,942 | |
| Accounts receivable | | | 549,499 | | | 617,604 | | | | | | | | | |
| Inventories | | | 727,788 | | | 973,227 | | | | | | | | | |
| Other current assets | | | 67,801 | | | 75,646 | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| TOTAL CURRENT ASSETS | | | 2,502,089 | | | 2,262,113 | | TOTAL CURRENT LIABILITIES | | | 567,976 | | | 611,835 | |
| | | | | | | | | | | | | | | | |
| OTHER ASSETS | | | 220,278 | | | 232,427 | | LONG-TERM DEBT AND FINANCE LEASE OBLIGATIONS | | | 233,534 | | | 275,154 | |
| INTANGIBLE ASSETS, NET | | | 518,853 | | | 488,551 | | OTHER LIABILITIES | | | 166,067 | | | 181,381 | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | TEMPORARY EQUITY | | | 20,030 | | | 6,880 | |
| | | | | | | | | | | | | | | | |
| PROPERTY, PLANT AND EQUIPMENT, NET | | | 776,577 | | | 688,982 | | SHAREHOLDERS' EQUITY | | | 3,030,190 | | | 2,596,823 | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| TOTAL ASSETS | | $ | 4,017,797 | | $ | 3,672,073 | | TOTAL LIABILITIES AND EQUITY | | $ | 4,017,797 | | $ | 3,672,073 | |
UFP Industries, Inc.
Page 11
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
FOR THE TWELVE MONTHS ENDED
DECEMBER 2023/2022
| | | | | | | | | |
|---|---|---|---|---|---|---|---|---|
| (In thousands) | | 2023 | | **** | | 2022 | | |
| CASH FLOWS FROM OPERATING ACTIVITIES: | | | | | | | | |
| Net earnings | | $ | 514,457 | | | $ | 704,964 | |
| Adjustments to reconcile net earnings to net cash used in operating activities: | | | | | | | | |
| | | | | | | | | |
| Depreciation | | | 110,563 | | | | 94,063 | |
| Amortization of intangibles | | | 21,327 | | | | 19,499 | |
| Expense associated with share-based and grant compensation arrangements | | | 34,899 | | | | 28,156 | |
| Deferred income taxes (credit) | | | (5,573) | | | | (16,289) | |
| Unrealized (gain) loss on investment and other | | | (2,435) | | | | 5,768 | |
| Equity in loss of investee | | | 2,367 | | | | 2,183 | |
| Net (gain) loss on sale and disposition of assets | | | (260) | | | | 1,285 | |
| Impairment of goodwill and other intangibles | | | — | | | | 4,261 | |
| Gain from reduction of estimated earnout liability | | | (3,177) | | | | — | |
| Changes in: | | | | | | | | |
| Accounts receivable | | | 81,659 | | | | 130,704 | |
| Inventories | | | 250,561 | | | | 718 | |
| Accounts payable and cash overdraft | | | (3,578) | | | | (137,907) | |
| Accrued liabilities and other | | | (40,920) | | | | (5,838) | |
| NET CASH FROM OPERATING ACTIVITIES | | | 959,890 | | | | 831,567 | |
| | | | | | | | | |
| CASH FLOWS USED IN INVESTING ACTIVITIES: | | | | | | | | |
| Purchases of property, plant, and equipment | | | (180,382) | | | | (174,124) | |
| Proceeds from sale of property, plant and equipment | | | 3,291 | | | | 3,805 | |
| Acquisitions, net of cash received and purchase of equity method investment | | | (52,383) | | | | (180,151) | |
| Purchase of remaining noncontrolling interest of subsidiary | | | (2,127) | | | | — | |
| Purchases of investments | | | (29,806) | | | | (19,875) | |
| Proceeds from sale of investments | | | 29,935 | | | | 12,874 | |
| Other | | | (8,692) | | | | 3,535 | |
| NET CASH USED IN INVESTING ACTIVITIES | | | (240,164) | | | | (353,936) | |
| | | | | | | | | |
| CASH FLOWS USED IN FINANCING ACTIVITIES: | | | | | | | | |
| Borrowings under revolving credit facilities | | | 28,462 | | | | 605,101 | |
| Repayments under revolving credit facilities | | | (30,125) | | | | (607,549) | |
| Repayments of debt | | | (29) | | | | (38,719) | |
| Contingent consideration payments and other | | | (6,262) | | | | (2,856) | |
| Proceeds from issuance of common stock | | | 2,750 | | | | 2,769 | |
| Dividends paid to shareholders | | | (68,238) | | | | (58,860) | |
| Distributions to noncontrolling interest | | | (7,355) | | | | (12,024) | |
| Repurchase of common stock | | | (82,149) | | | | (95,774) | |
| Other | | | 86 | | | | (2,298) | |
| NET CASH USED IN FINANCING ACTIVITIES | | | (162,860) | | | | (210,210) | |
| | | | | | | | | |
| Effect of exchange rate changes on cash | | | 5,767 | | | | 979 | |
| NET CHANGE IN CASH AND CASH EQUIVALENTS | | | 562,633 | | | | 268,400 | |
| | | | | | | | | |
| ALL CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | | | 559,623 | | | | 291,223 | |
| | | | | | | | | |
| ALL CASH AND CASH EQUIVALENTS, END OF PERIOD | | $ | 1,122,256 | | | $ | 559,623 | |
| | | | | | | | | |
| 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 | | $ | 1,118,329 | | | $ | 559,397 | |
| Restricted cash, end of period | | | 3,927 | | | | 226 | |
| All cash and cash equivalents, end of period | | $ | 1,122,256 | | | $ | 559,623 | |
| | | | | | | | | |