8-K
UFP INDUSTRIES INC (UFPI)
8-K
2021-08-12
For: 2021-08-12
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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): August 12, 2021
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 7.01. Regulation FD Disclosure.
Attached as Exhibit 99.1 is the Company's current version of its first quarter 2021 Investor Relations Presentation provided to investors and posted on the Company's website at www.ufpi.com.
The information in this Form 8-K and the attached Exhibit shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall they be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended.
Item 9.01. Exhibits.
Exhibits
| | |
|---|---|
| 99.1 | 2021 Investor Relations Presentation. |
| | |
| 104 | Cover Page Interactive File (the cover page XBRL tags are embedded in the Inline XBRL document). |
2
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.
| | | |
|---|---|---|
| Dated: August 12, 2021 | UFP INDUSTRIES, INC. | |
| | (Registrant) | |
| | | |
| | By: | /s/ Michael R. Cole |
| | | Michael R. Cole |
| | | Principal Financial Officer and Treasurer |
3
Exhibit 99.1
| 1<br>2020 Investor Relations Presentation |
|---|
| 2<br>UFP INDUSTRIES, INC.<br>2021<br>Please be aware that: Statements included in this presentation that are not historical are forward-looking statements within the meaning of Section 21E of<br>the Securities Exchange Act, as amended, and are based on management’s beliefs, assumptions, current expectations, estimates, and projections about the<br>markets we serve, the economy, and the company itself. Words like “anticipates,” “believes,” “confident,” “estimates,” “expects,” “forecasts,” likely,” “plans,”<br>“projects,” “should,” variations of such words, and similar expressions identify such forward-looking statements. These statements do not guarantee future<br>performance and involve certain risks, uncertainties and assumptions that are difficult to predict with regard to timing, extent, likelihood and degree of<br>occurrence. The Company does not undertake to update forward-looking statements to reflect facts, circumstances, assumptions or events that occur after<br>the date the forward-looking statements are made. Actual results could differ materially from those included in such forward-looking statements. Investors<br>are cautioned that all forward-looking statements involve risks and uncertainty. Among the factors that could cause actual results to differ materially<br>from forward-looking statements are the following: Fluctuations in the price of lumber; adverse or unusual weather conditions; adverse conditions in the<br>markets we serve; government regulations, particularly involving environmental and safety regulations; and our ability to make successful business<br>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<br>and 10-Q on file with the Securities and Exchange Commission. This presentation is the property of UFP Industries, Inc. Any redistribution, retransmission,<br>or reprinting of this presentation in any form without the express written consent of Universal is strictly prohibited. |
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| 3<br>With 184 locations in 9 countries, the companies<br>of UFP Industries comprise one of the world’s largest<br>producers of wood and wood-alternative products for<br>retail, construction and industrial markets.<br>NO MISSION STATEMENTS. JUST PEOPLE ON A MISSION.™ |
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| 4 BUSINESS MODEL<br>OUR PERFORMANCE<br>2021<br>5.9%<br>Adjusted EBITDA Margin<br>7.2% 8.4%<br>$4,489<br>Net Sales<br>$4,416 $5,154<br>$149<br>Net Earnings (ACI)<br>$180 $247<br>0.76<br>Net Debt to Adjusted<br>EBITDA<br>0.0 0.0<br>$266<br>Adjusted EBITDA<br>$317 $431<br>14.0%<br>ROIC<br>15.1% 21.0%<br>2018<br>2019<br>2020<br>Unit sales<br>growth rate<br>6% 6% 6%<br>12%<br>19%<br>36% $ Sales in Millions<br>Growth rate<br>24% 21%<br>37% |
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| 5<br>Company founded in<br>Grand Rapids, MI<br>1955<br>INTRODUCTION<br>WHO WE ARE<br>Number of employees<br>worldwide<br>15,000+<br>Number of facilities<br>worldwide<br>184<br>2021<br>2020 Revenue<br>$5.2B<br>2020 Adjusted<br>EBITDA<br>$431M $<br>Employee and facility counts in this presentation include the PalletOne acquisition, which closed on December 28,2020, in FY 2021. |
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| 6 INTRODUCTION<br>WHERE WE ARE<br>2021<br>167<br>2<br>4<br>1<br>1<br>3 1<br>4<br>GLOBAL LOCATIONS<br>184<br>1 |
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| 7<br>Industrial - $1.1B<br>Big box, independents, & buying co-ops<br>Single and multi-family builders, commercial builders, concrete<br>formers, factory-built housing (mobile & modular homes) & RVs<br>Industrial packaging, packaging materials & OEM components<br>Based on 2020 Sales<br>INTRODUCTION<br>OUR CUSTOMERS<br>Retail - $2.2B<br>Construction - $1.7B<br>34%<br>2021<br>International - $0.2B<br>Overseas sourcing and selling with manufacturing<br>and design assets in nine countries.<br>36%<br>34%<br>25%<br>5% |
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| 8 UFP INDUSTRIES<br>BUSINESS SEGMENTS |
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| 9<br>We manufacture and sell on-trend brands to all major<br>building products retailers, while supporting our<br>customers with best-in-class in-store and e-commerce<br>support.<br>BUSINESS SEGMENTS<br>RETAIL SOLUTIONS<br>2021<br>2020: ProWood - $1.2B, Outdoor Essentials - $300M, Deckorators - $220M, UFP Edge - $115M, Handprint (previously Dimensions) - $88M, Other – $229M<br>YTD June 2021: ProWood - $834M, Outdoor Essentials - $216M, Sunbelt - $472M, Deckorators - $145M, UFP Edge - $78M, Handprint - $52M, Other – $221M |
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| 10<br>The industry’s leading innovator of composite<br>decking, railing and accessories.<br>Deckorators.com<br>BUSINESS SEGMENTS<br>RETAIL SOLUTIONS<br>2021 |
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| 11<br>Preserved lumber including timbers, decking,<br>construction materials and fire-treated.<br>BUSINESS SEGMENTS<br>RETAIL SOLUTIONS<br>ProWoodLumber.com<br>2021 |
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| 12<br>UFPEdge.com<br>Premium siding, pattern, trim and accent wall products.<br>BUSINESS SEGMENTS<br>RETAIL SOLUTIONS<br>2021 |
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| 13<br>OutdoorEssentialProducts.com<br>Outdoor lifestyle products including wood and vinyl fencing, landscape<br>and garden décor, picnic tables, pergolas, trellises and more.<br>BUSINESS SEGMENTS<br>RETAIL SOLUTIONS<br>2021 |
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| 14<br>Coming soon: Handprintmade.com<br>Wood components and ready-to-make products for a variety<br>of inspired home décor and craft projects.<br>BUSINESS SEGMENTS<br>RETAIL SOLUTIONS<br>2021 |
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| 15<br>Supports the largest home improvement retailers in the<br>U.S. in multichannel online B2B2C sales strategies.<br>Provides thousands of curated products and assortments to<br>support customers’ distribution efforts such as direct-to-home,<br>ship-to-store, including UPS, USPS and LTL shipments.<br>BUSINESS SEGMENTS<br>RETAIL SOLUTIONS<br>2021<br>E-COMMERCE |
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| 16<br>Single-source provider of concrete forms, building<br>components, framing, exterior and interior finishing<br>programs designed to make building processes run<br>at maximum efficiency.<br>BUSINESS SEGMENTS<br>CONSTRUCTION<br>• SITE BUILT<br>• FACTORY-BUILT<br>• CONCRETE FORMING<br>• COMMERCIAL<br>2021<br>2020: Site Built - $726M, Factory Built - $597M, Commercial - $222M, Concrete Forming - $151M<br>YTD June 2021: Site Built - $539M, Factory Built - $571M, Commercial - $112M, Concrete Forming - $76M |
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| 17<br>SITE BUILT Roof trusses, wall panels, floor systems, doors and framing<br>services for residential and light commercial builders.<br>BUSINESS SEGMENTS<br>CONSTRUCTION<br>2021 UFPConstruction.com |
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| 18<br>FACTORY BUILT<br>Roof trusses, floor joists, laminated wall panels, cabinet<br>components, countertops and milled components for the<br>modular and manufactured home, RV and mobile office.<br>BUSINESS SEGMENTS<br>CONSTRUCTION<br>2021 |
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| 19<br>CONCRETE<br>FORMING<br>BUSINESS SEGMENTS<br>CONSTRUCTION<br>Custom radius forms, wall and column forms,<br>gang systems, lumber and panels.<br>2021 |
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| 20<br>Full-service, turnkey project management of consumer environment<br>and architectural interiors: Design, development, engineering,<br>manufacturing, assembly, distribution and installation.<br>BUSINESS SEGMENTS<br>CONSTRUCTION<br>COMMERCIAL<br>IDXCorporation.com<br>2021 |
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| 21<br>PP Delivering innovative structural packaging solutions<br>backed by the industry’s leading design team, a global<br>manufacturing footprint, and integrated hyper-<br>responsive service teams.<br>BUSINESS SEGMENTS<br>INDUSTRIAL<br>• INDUSTRIAL PACKAGING<br>• PACKAGING MATERIALS<br>• MANUFACTURED COMPONENTS<br>2021<br>Focus Areas:<br>UFPindustial.com |
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| 22<br>Wood, steel and mixed material crates and specialty<br>containers, hard cases, tracking technology, logistics solutions<br>and onsite packaging services.<br>BUSINESS SEGMENTS<br>INDUSTRIAL<br>INDUSTRIAL<br>PACKAGING<br>2021 |
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| 23<br>Solutions for manufacturing, energy, technology, agriculture and<br>transportation. Stretch wrap, corrugated and boxboard, facility supplies<br>and safety products, labels and tags, printers, hardware and software<br>solutions<br>BUSINESS SEGMENTS<br>INDUSTRIAL<br>2021<br>PACKAGING<br>MATERIALS |
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| 24<br>Precision-milled hardwoods, softwoods, composites and panel<br>goods for bed foundations; cabinet components; shed, door and<br>window companies. Laminated panels for a variety of industries.<br>BUSINESS SEGMENTS<br>INDUSTRIAL<br>MANUFACTURED<br>COMPONENTS<br>2021 |
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| 25<br>UFP International sources and sells products in 65 countries, extending<br>our reach with multinational customers, while opening global<br>opportunities for growth. Additionally, we own manufacturing<br>assets in Canada, Mexico, Australia and Italy.<br>BUSINESS SEGMENTS<br>INTERNATIONAL<br>2021 |
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| 26 BUSINESS MODEL<br>ACQUISITIONS<br>2021<br>PROCESS<br>Identify attractive<br>growth runways in<br>each Business Unit<br>under each Business<br>Segment and identify<br>gaps in our capabilities<br>to pursue those<br>runways.<br>PURPOSE<br>Find new products<br>and services to<br>continue our<br>transformation from<br>commodity sales to<br>value-added selling<br>solutions and brands.<br>GOAL<br>Achieve scale and<br>synergy targets to<br>optimize growth,<br>margins and<br>returns. |
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| 27 BUSINESS MODEL<br>2020 ACQUISITIONS<br>2021<br>Quest Design and Fabrication and Quest<br>Architectural Millwork, collectively known as Quest<br>Quest specializes in designing, fabricating, and<br>installing premium millwork and case goods for<br>a variety of commercial uses, including builder’s<br>sales centers, design studios, hospitality, corporate<br>offices, and healthcare. Architectural millwork is<br>a growth runway in our commercial construction<br>business unit. Their high level of value-add and<br>focus on premium products dovetails with our<br>growth goals as we plan to scale this business<br>with existing customers through our facilities.<br>2020* Annual sales: $20M<br>MARCHJULYOCTOBER<br>T&R Lumber Company and its affiliates,<br>Sullivan & Mann and Kelmar Creations<br>T&R manufactures and distributes a<br>range of nursery supplies, such as tree<br>boxes and growing containers, giving us<br>an opportunity to grow our agricultural<br>product offerings and customer base.<br>2020* Annual sales: $31M<br>Fire Retardant Chemical Technologies, LLC<br>FRCT’s business includes a laboratory<br>that specializes in developing and testing<br>high-performance chemicals, including<br>fire retardants and water repellants. FRCT<br>highlights UFPI’s focus on technology to<br>innovate and bring more value-added<br>products to market and expands the<br>Company’s R&D capabilities.<br>2020* Annual sales: $6M<br>The most consequential acquisition year in our history brought UFP unprecedented opportunities for new technologies, consolidation, share gains,<br>scalability, synergies, new products and new markets.<br>*Annual sales are pre- and post-acquisition. |
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| 28 BUSINESS MODEL<br>2020 ACQUISITIONS<br>2021<br>Enwrap Logistic & Packaging S.r.l.<br>This newly formed company is dedicated to the<br>logistics and packaging business of its predecessor,<br>Job Service S.p.A. Headquartered in Milan, Italy,<br>Enwrap provides high-value, mixed material<br>industrial packaging and logistics services through<br>five locations in Italy, allowing UFP to establish its<br>presence in the region and to serve customers in<br>Central and Southern Europe.<br>2020* Annual sales: $14M<br>OCTOBERNOVEMBER<br>Atlantic Prefab, Inc.; Exterior Designs, LLC; and Patriot Building Systems, LLC<br>These three companies serve the commercial and multi-family<br>construction markets in the Northeast with prefabricated steel wall<br>panels, light gauge metal trusses, exterior cladding, exterior insulation<br>and finish systems and commercial and multi-family framing services.<br>With them, UFPI brings more value-added products and services to its<br>construction customers.<br>2020* Annual combined sales: $28M<br>*Annual sales are pre- and post-acquisition. |
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| 29 BUSINESS MODEL<br>2021 ACQUISITIONS<br>2021<br>PalletOne, Inc.<br>PalletOne is the leading manufacturer of new pallets in the U.S.,<br>with 17 manufacturing facilities and 1,500 employees in the<br>Southern and Eastern regions of the U.S. The company also<br>supplies specialized industrial packaging, including custom bins<br>and crates, and its Sunbelt Forest Products subsidiary operates<br>five pressure-treating facilities in the Southeastern U.S.<br>2020 Annual combined sales: $698M ($267M<br>for PalletOne, $431M for Sunbelt)<br>This acquisition expands UFPI’s capacity, capabilities<br>and customer base, bolsters our position as the leading<br>wood preserver in the United States, and moves us<br>closer to our goal of becoming the preferred global<br>packaging solutions provider.<br>FISCAL JANUARY |
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| 30 BUSINESS MODEL<br>2021 ACQUISITIONS<br>2021<br>Gilmores, Pty Ltd<br>Gilmores adds a wide portfolio of consumable packaging to<br>certain industrial packaging products and expands UFP Industrial’s<br>customer base throughout Australia. Founded in 1988 and<br>operating from its distribution facility in Port Melbourne, Australia,<br>Gilmores is a leading distributor in the industrial and construction<br>industries of packaging tapes, stretch films, packaging equipment,<br>strapping, construction protection products and other items.<br>2020 Annual sales: $10.0M<br>Walnut Hollow Farm, Inc.<br>Located in Wisconsin, Walnut Hollow designs,<br>manufactures, sells and distributes wood products, tools,<br>and accessories for the craft and hobby, personalized<br>home décor, and hardware categories. Walnut Hollow<br>brings UFP Retail a new and unique mix of ready-to-make<br>wood products and wood tools, along with strong<br>relationships with hobby and craft retailers.<br>2020 Annual sales: $12M<br>MARCHAPRIL |
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| 31 BUSINESS MODEL<br>2021 ACQUISITIONS<br>2021<br>Spartanburg Forest Products Corporation<br>Acquired by UFP’s wholly-owned subsidiary Sunbelt Forest<br>Products, Spartanburg and its affiliates are a wood treating<br>operation in the southeastern U.S., with approximately 150<br>employees and operations in five states. The combination of<br>Spartanburg and Sunbelt generate operational efficiencies<br>that allow both companies to provide greater value to our<br>customers, while expanding our capacity and geographic<br>reach<br>2020 Annual sales: $543M<br>Endurable Building Products, LLC<br>Based near Minneapolis, Minnesota, Endurable Building<br>Products is a leading manufacturer of customized<br>structural aluminum systems and products for exterior<br>purposes, such as deck framing, balconies, sunshades,<br>railings and stairs. Their addition will strengthen UFP<br>relationships with existing construction customers by<br>providing them with a new range of products and services<br>that match an important UFP Construction growth<br>runway.<br>2020 Annual sales: $15M<br>APRILAPRIL |
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| 32 BUSINESS MODEL<br>PRODUCT MIX EVOLUTION<br>2013<br>31%<br>58%<br>69%<br>42%<br>Commodity<br>Value-added as a percent of sales<br>2021<br>Value-added<br>2019<br>Commodity Value-added<br>2020<br>Commodity Value-added<br>64%<br>36%<br>2013<br>Note: Lumber price appreciation more significantly impacts commodity-based products compared to value-add products. |
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| 33 BUSINESS MODEL<br>PRODUCT MIX EVOLUTION<br>2013<br>$426m<br>3%<br>10%<br>$85m<br>New Products<br>2021<br>2019 2020<br>10%<br>$539m<br>2013<br>% of Sales Sales % of Sales Sales % of Sales Sales |
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| 34 BUSINESS MODEL<br>HOW WE GOT HERE<br>2021<br>Founded in 1955.<br>Managers are required<br>to own stock.<br>Management team<br>has an average tenure<br>of 22 years.<br>2020 management<br>realignment from<br>geographic to business<br>segment.<br>International in scope,<br>regional in focus.<br>Local decision-making<br>for local customers.<br>Win-Loss record of 65-0.<br>(Yes, we’ve never<br>lost money.<br>Every plant is a profit<br>center whose managers<br>are bonused on ROI.<br>Greater customer<br>alignment, quicker to<br>market, more effective<br>capital allocation.<br>Entrepreneurial Stable Responsive Focused |
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| 35 BUSINESS MODEL<br>WHAT GETS IN OUR WAY<br>Availability of quality labor General economic trends<br>Fluctuation in commodity<br>lumber costs<br>Regulatory burdens<br>2021 |
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| 36 BUSINESS MODEL<br>LONG-TERM FINANCIAL GOALS<br>2021<br>Annual unit sales<br>growth that exceeds<br>positive U.S.<br>GDP growth by 4-6<br>percentage points<br>including acquisitions<br>Adjusted EBITDA<br>growth exceeding<br>unit sales growth<br>Earn ROIC greater<br>than WACC |
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| 37<br>Experienced<br>Leadership<br>BUSINESS MODEL<br>BUILT FOR TOUGH TIMES<br>2021<br>Our profit center<br>organization model<br>results in a stable<br>of seasoned<br>leaders skilled in<br>managing their<br>business.<br>These profit centers<br>have highly variable<br>cost structures<br>allowing rapid<br>adjustment to<br>market demand and<br>have heavier<br>investments in<br>working capital,<br>which are turned into<br>cash flow in tough<br>times.<br>A prudent and<br>return-focused<br>approach to capital<br>allocation provides<br>us with a strong<br>balance sheet<br>and capital reserves<br>we use<br>opportunistically.<br>A compensation<br>structure that<br>emphasizes<br>incentives driven by<br>ROIC, resulting in<br>wise and quick<br>decision-making.<br>Balanced<br>Business Model<br>Flexible<br>Cost Structure<br>Conservative<br>Balance Sheet<br>Incentivized<br>By ROIC<br>A diversified<br>business portfolio<br>mitigates risk of a<br>decline in a single<br>market. |
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| 38<br>FINANCIALS |
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| 39 BUSINESS MODEL<br>LUMBER MARKET IMPACT ON OPERATING RESULTS<br>Goal: to earn a stable profit per unit<br>2021<br>We are less affected by the level of<br>lumber prices than the primary<br>producers of lumber are<br>Level of lumber prices affects gross profit<br>and SG&A to sales ratios<br>Profit per unit is primarily impacted by<br>the trend and volatility of the market<br>Balance in business and risk management<br>techniques mitigate impact on profitability |
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| 40<br>890<br>954<br>1035 1080<br>1428 1344<br>690<br>377<br>402 420<br>358<br>394<br>455<br>530<br>716<br>934<br>826<br>571<br>643<br>331<br>370<br>365<br>354<br>346 329<br>356 346 364<br>360<br>373 371<br>449<br>496 505 496<br>554<br>572<br>525<br>449 443<br>375<br>339 338 $300<br> $350<br> $400<br> $450<br> $500<br> $550<br> $600<br> $650<br> $700<br> $750<br> $800<br> $850<br> $900<br> $950<br> $1,000<br> $1,050<br> $1,100<br> $1,150<br> $1,200<br> $1,250<br> $1,300<br> $1,350<br> $1,400<br> $1,450<br>Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec<br>FINANCIALS<br>LUMBER MARKET<br>2021<br>Lumber Market (in $/MBF)<br>Average weekly random lengths framing lumber composite price.<br>2020<br>2019<br>2018<br>2021 |
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| 41 FINANCIALS<br>LUMBER MARKET - SYP<br>2021<br>858<br>903<br>938 922<br>1150<br>1052<br>564<br>346<br>345 360<br>333<br>412<br>494 552<br>729<br>886<br>711<br>508<br>565<br>370<br>403 408 401<br>383<br>344<br>359 348 355 345<br>344 335<br>418<br>459<br>480 483<br>535<br>562<br>512<br>449<br>440<br>410<br>378 377<br> $300<br> $350<br> $400<br> $450<br> $500<br> $550<br> $600<br> $650<br> $700<br> $750<br> $800<br> $850<br> $900<br> $950<br> $1,000<br> $1,050<br> $1,100<br> $1,150<br> $1,200<br>Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec<br>Lumber Market (in $/MBF)<br>Average weekly Southern Yellow Pine composite price.<br>Purchases of SYP comprise almost two-thirds of our total lumber purchases.<br>2020<br>2019<br>2018<br>2021 |
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| 42 FINANCIALS<br>2021<br>NET SALES<br>Long-Term Goal: Unit sales growth of 4% to 6% over positive GDP, including acquisitions<br>Net Sales (in millions)<br>Percent Change<br>$3,240<br>$3,941<br>$4,489 $4,416<br>$5,154<br>11%<br>15%<br>6% 6% 6%<br>8%<br>4%<br>3%<br>5% 5%<br>3%<br>11%<br>3%<br>1% 1%<br>0%<br>3%<br>6%<br>9%<br>12%<br>15%<br>18%<br>21%<br>24%<br>27%<br>30%<br> $-<br> $500<br> $1,000<br> $1,500<br> $2,000<br> $2,500<br> $3,000<br> $3,500<br> $4,000<br> $4,500<br> $5,000<br> $5,500<br>Acquisition Unit<br>Sales Growth<br>Organic Unit<br>Sales Growth<br>Total Unit<br>Sales Growth<br>Net Sales<br>2016 2017 2018 2019 2020 |
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| 43 FINANCIALS<br>UNIT SALES AND PROFIT GROWTH<br>2021<br>Percent Growth<br>11%<br>15%<br>14% 6% 6%<br>19%<br>14%<br>15%<br>16%<br>17% 18%<br>13% 12%<br>19%<br>36%<br>0%<br>5%<br>10%<br>15%<br>20%<br>25%<br>30%<br>35%<br>40%<br>2016 2017 2018 2019 2020<br>Long-Term Goal: Achieve Adjusted EBITDA growth exceeding unit sales growth.<br>Unit Sales<br>Growth<br>Gross Profit<br>Growth<br>Adjusted EBITDA<br>Growth |
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| 44 FINANCIALS<br>Adjusted EBITDA<br>2021<br>Non-GAAP Financial Information: This release includes certain financial information not prepared in accordance with U.S. GAAP. Because not<br>all companies calculate non-GAAP financial information identically (or at all), the presentations herein may not be comparable to other similarly<br>titled measures used by other companies. Management considers adjusted EBITDA as non-GAAP alternative performance measures which may<br>provide useful information to investors. See the company’s web site at ufpi.com for reconciliation to related GAAP measurement.<br>EBITDA (in millions)<br>EBITDA Margin<br>Adjusted EBITDA<br>Margin<br>Adjusted EBITDA<br>Adjusted<br>Adjusted<br>$210.7 $237.6 $265.6 $317.3 $431.4<br>6.5%<br>6.0%<br>5.9%<br>7.2%<br>8.4%<br>4.5%<br>5.5%<br>6.5%<br>7.5%<br>8.5%<br> $-<br> $25<br> $50<br> $75<br> $100<br> $125<br> $150<br> $175<br> $200<br> $225<br> $250<br> $275<br> $300<br> $325<br> $350<br> $375<br> $400<br> $425<br> $450<br>2016 2017 2018 2019 2020 |
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| 45 BUSINESS MODEL<br>MARGIN IMPROVEMENT DRIVERS<br>2021<br>Operating leverage on sales growth<br>Product mix improvements<br>- New product and core line<br>innovation initiatives<br>- Enhanced capabilities drive<br>conversion from<br>commodity to value-added<br>Strength of market demand<br>Automation initiatives |
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| 46 FINANCIALS<br>RETURN ON INVESTED CAPITAL<br>2021<br>Hurdle Rate = 12% WACC = 10%<br>(1) See the company’s website at ufpi.com for reconciliation to related GAAP measurement.<br>Percent<br>13.7% 13.2% 14.0%<br>15.1%<br>21.0%<br>0.00%<br>3.00%<br>6.00%<br>9.00%<br>12.00%<br>15.00%<br>18.00%<br>21.00%<br>24.00%<br>2016 2017 2018 2019 2020 |
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| 47 FINANCIALS<br>CASH CYCLE<br>2021<br>Cash Cycle = Days Receivables Outstanding + Days Supply of Inventory – Days Payables Outstanding<br>Days<br>47.9<br>52.4 54.1 55.7<br>48.1<br>0<br>10<br>20<br>30<br>40<br>50<br>60<br>70<br>2016 2017 2018 2019 2020 |
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| 48 FINANCIALS<br>NET DEBT<br>2021<br>$ In thousands Jun-21 Dec-20 Dec-19 Dec-18<br>3.89% series 2012 - A notes, Tranche A, due December 2022 $ 35,000 $ 35,000 $ 35,000 $ 35,000<br>3.98% series 2012 - B notes, Tranche B, due December 2024 40,000 40,000 40,000 40,000<br>4.20% series 2018 - C notes, Tranche C, due June 2028 40,000 40,000 40,000 40,000<br>4.27% series 2018 - D notes, Tranche D, due June 2030 35,000 35,000 35,000 35,000<br>3.04% series 2020 - E notes, Tranche E, due August 2032 50,000 50,000 --<br>3.08% series 2020 - F notes, Tranche F, due August 2033 50,000 50,000 --<br>3.15% series 2020 - G notes, Tranche G, due August 2035 50,000 50,000 --<br>Revolving credit facility ($550 million total available) 264,970 4,715 3,976 42,490<br>Industrial Development Revenue Bonds 7,000 7,000 9,700 9,700<br>Other (18) (8) 8 88<br>Less Cash Surplus (44,286) (436,507) (168,336) (27,316)<br>Plus Cash Overdraft 34,229 -- 27,367<br>Total Net Debt (Surplus Cash) $ 561,895 $ (124,800) $ (4,652) $ 202,329<br>Unused debt capacity (1) $ 607,000<br>Total Liquidity $ 288,000<br>(1) 1.75X TTM adjusted EBITDA less net debt |
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| 49 FINANCIALS<br>CAPITAL STRUCTURE<br>2021<br>Percent<br>Net Debt to Total Capitalization<br>vs Maximum Target<br>Net Debt to Adjusted EBITDA<br>vs Maximum Target<br>11.8% 11.5% 12.4%<br>0.0%<br>10.2%<br>12.8%<br>15.7%<br>0.0% 0.0%<br>24.2%<br>0%<br>5%<br>10%<br>15%<br>20%<br>25%<br>30%<br>35%<br>40%<br>45%<br>2012 2013 2014 2015 2016 2017 2018 2019 2020 Jun-21<br>1.10<br>0.80 0.72<br>-<br>0.46<br>0.60<br>0.80<br>--<br>0.84<br>0.0<br>0.5<br>1.0<br>1.5<br>2.0<br>2.5<br>2012 2013 2014 2015 2016 2017 2018 2019 2020 Jun-21<br>Max target<br>Net Debt to Total Capital<br>Net Debt to TTM Adjusted EBITDA |
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| 50 BUSINESS MODEL<br>BALANCED USE OF FREE CASH FLOW<br>2021<br>Current dividend rate of $0.15/quarter,<br>increased annually based on earnings<br>and free cash flow growth<br>Share repurchases totaled over $29M in<br>2020 (1.1M remaining share authorization)<br>CapEx plan of $140M in 2021<br>Long-term target for acquisitions to<br>contribute half of our total annual unit<br>sales growth |
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| 51 FINANCIALS<br>SELECTED INCOME STATEMENT DATA 2nd QUARTER<br>2021<br>(1) See the company’s website at ufpi.com for reconciliation to related GAAP measurement.<br>$ In thousands, except per share data Q2 2021 Q2 2020 % Change Unit % Change<br>Retail $ 1,259,218 $ 609,190 106.7 48.0<br>Industrial 611,181 224,379 172.4 73.0<br>Construction 738,704 359,170 105.7 29.0<br>All Other 91,438 49,262 85.6<br>Total Net Sales $ 2,700,541 $ 1,242,001 117.4 47.0<br>Adjusted EBITDA (1) $ 261,455 $ 110,403 136.8<br>Net Earnings Attributable to Controlling Interest $ 173,382 $ 66,463 160.9<br>Diluted EPS $ 2.78 $ 1.08 157.4 |
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| 52 FINANCIALS<br>SELECTED INCOME STATEMENT DATA 2nd QUARTER YTD<br>2021<br>(1) See the company’s website at ufpi.com for reconciliation to related GAAP measurement.<br>$ In thousands, except per share data Q2 YTD 2021 Q2 YTD 2020 % Change Unit % Change<br>Retail $ 2,018,239 $ 961,351 109.9 52.0<br>Industrial 1,060,054 480,922 120.4 54.0<br>Construction 1,298,235 740,325 75.4 18.0<br>All Other 149,017 91,465 62.9<br>Total Net Sales $ 4,525,545 $ 2,274,063 99.0 41.0<br>Adjusted EBITDA (1) $ 424,122 $ 187,481 126.2<br>Net Earnings Attributable to Controlling Interest $ 276,693 $ 106,622 159.5<br>Diluted EPS $ 4.45 $ 1.73 157.2 |
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| 53 FINANCIALS<br>SELECTED INCOME STATEMENT DATA ANNUAL RESULTS<br>2021<br>$ In thousands, except per share data 2020 2019 % Change Unit % Change<br>Retail $ 2,167,122 $ 1,498,710 44.6 25.0<br>Industrial 1,072,117 1,085,636 -1.2 -6.0<br>Construction 1,695,683 1,637,156 3.6 -6.0<br>All Other 219,076 194,507 12.6<br>Total Net Sales $ 5,153,998 $ 4,416,009 16.7 6.0<br>Adjusted EBITDA (1) $ 431,361 $ 317,297 35.9<br>Net Earnings Attributable to Controlling Interest $ 246,778 $ 179,650 37.4<br>Diluted EPS $ 4.00 $ 2.91 37.5<br>(1) See the company’s website at ufpi.com for reconciliation to related GAAP measurement. |
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| 54<br>2801 E. Beltline Ave. NE<br>Grand Rapids, MI 49506<br>(800) 598-9663 - UFPI.com<br>THANK YOU. |
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