GlobeNewswire Inc | Oct 22, 2020 08:25AM EDT

October 22, 2020

GRAND RAPIDS, Mich., Oct. 22, 2020 (GLOBE NEWSWIRE) -- In the release titled, "UFP Industries Reports Best Quarterly Results in the Companys History" issued yesterday, Wednesday, October 21, 2020, we were informed by the clientUFP Industries, Inc. (Nasdaq: UFPI), the figure"more than $70 million" in the sixth paragraph should be "more than $700 million." The corrected release follows:

UFP Industries, Inc. (Nasdaq: UFPI) today announced record sales of $1.49 billion and net earnings attributable to controlling interest of $77.2 million for the third quarter ended September 26, 2020. The company also reported record EPS of $1.25 per diluted share, a 49 percent increase over the same period of 2019. These are the best quarterly sales and earnings results in the companys 65-year history.

One of the many lessons I will take from 2020 is that UFP Industries has the business diversification, processes, and experienced team members to face serious challenges and continue to serve customers while delivering strong results for our stakeholders, said CEO Matthew J. Missad. So far this year, we faced a pandemic, shut-down orders that disrupted economic activity, a record increase in lumber pricing, supply constraints, wildfires, hurricanes and rail shortages. Despite that, our teams worked diligently to address shifting customer demands, managed inventory wisely, and delivered record results. When it comes to what we can achieve, they set the bar even higher. I want to thank each of our over 13,000 team members for their fantastic efforts. Id like to also acknowledge an extraordinary American business leader, UFPs former president, CEO and chairman, my early and lifelong mentor, Ambassador Peter Secchia, who died today. Peter, the architect of UFPs remarkable early growth, would have been extremely gratified to see his legacy acknowledged and celebrated today with the reporting of the best quarter in the companys history.

UFP Industries third quarter unit sales grew 8 percent over the same period of 2019, almost entirely from organic sales increases. Unit sales to Retail customers grew 34 percent organically over this period, led by the companys ProWood, Dimensions, Outdoor Essentials, and Deckorators product lines.

At the beginning of the pandemic, no one in the industry predicted the growth wed see in our Retail segment, Missad said. Although UFP Retail Solutions has benefited from higher lumber prices and the spike in consumer demand during the past several months, it was well-positioned for improvement even before the pandemic began. In addition to the extraordinary efforts of our team members, I credit our investments in new products and in our new management structure, which allows us to focus better on our customers needs, each market we serve, and launch new products and execute initiatives with greater speed. New product sales grew 41 percent in the third quarter over the same period of last year.

Keeping with the new product focus, UFP Industries recently completed the acquisition of Fire Retardant Chemical Technologies, LLC (FRCT), the leading R&D company specializing in wood treating technologies such as fire retardants. The addition of FRCT will allow UFP to develop new technologies and value-added wood products for the companys ProWood pressure-treated line, as well as for other customers.

UFP Industries continues to maintain a strong pipeline of acquisition targets and a disciplined approach to capital allocation. The companys long-term credit facilities and cash currently provide more than $700 million in available liquidity. Additionally, today the companys board approved a quarterly dividend payment of 12.5 cents per share, bringing the annual total for 2020 to 50 cents per share, a 25 percent increase over the dividends paid in 2019. The dividend is payable on December 15, 2020, to shareholders of record on December 1, 2020.

This year has been a difficult year for many, and we hope that those who have lost businesses or livelihoods due to the lockdowns will soon be able to start their recovery. UFP has been very fortunate, and even with market headwinds and COVID-19 restrictions, our record performance has validated the confidence we have in our organizations ability to execute. Our operations will take the lessons weve learned and turn them into improvement opportunities for even higher levels of performance. We know that when challenged, UFP employees answer the call and do great things.

Third Quarter 2020 Highlights (comparisons on a year-over-year basis):

-- Net sales of $1.49 billion, up 28 percent due to a 20 percent increase in pricing and an 8 percent increase in units sold -- Gross profits increased 29 percent to over $241 million for the quarter as our profit per unit sold increased substantially -- Earnings from operations of $106.6 million were up 51 percent, and net earnings attributable to controlling interest of $77.2 million were up 49 percent -- EBITDA of $125.7 million increased 40 percent

By business segment, the company reported the following third-quarter results:

UFP Retail Solutions

-- $700.5 million in net sales, up 76 percent over the third quarter of 2019. Unit sales increased 34 percent, with higher selling prices increasing sales by 42 percent. The following business units drove unit sales growth: Dimensions Home and Dcor (unit sales up 57 percent); Deckorators (up 50 percent); ProWood (up 30 percent); and Outdoor Essentials Fence, Lawn and Garden (up 28 percent). Unit sales in the segments E-Commerce unit, which include sales through large online retailers, grew 94 percent.

UFP Industrial

-- $282.1 million in net sales, up 4 percent from the third quarter of 2019. Unit sales decreased 2 percent, while higher selling prices increased sales by 6 percent. Industrial unit sales showed steady improvement as the third quarter progressed, with year-over-year sales improving from 5 percent lower in July to 1 percent higher in September. The company has been focusing on providing more value-added products to customers in this segment.

UFP Construction

-- $447.1 million in net sales, up 0.4 percent from the third quarter of 2019, due to a 9 percent decrease in unit sales and a 9 percent increase in selling prices. Unit sales changes by business unit for the quarter are as follows: Factory Built (up 7 percent); Concrete Forming (down 2 percent), Site Built (down 8 percent), Commercial (down 37 percent). Unit sales for Site Built showed continued improvement during the third quarter as business conditions improved. The Commercial business unit has been the most adversely impacted by the pandemic due to the slowdown in retail and other commercial construction and remodeling activity.

CONFERENCE CALLUFP Industries will conduct a conference call to discuss information included in this news release and related matters at 8:30 a.m. ET on Thursday, October 22, 2020. The call will be hosted by CEO Matthew J. Missad and CFO Michael Cole, and will be available for analysts and institutional investors domestically at 866-518-4547 and internationally at 213-660-0879. Use conference pass code 7497854. The conference call will be available simultaneously and in its entirety to all interested investors and news media through a webcast at http://www.ufpi.com. A replay of the call will be available from October 22, 2020, at 11:30 p.m. through October 24, 2020, 11:30 p.m. at 855-859-2056 or 404-537-3406.

UFP Industries, Inc. (formerly Universal Forest Products, Inc.)UFP Industries is a holding company whose subsidiaries supply wood, wood composite and other products to three 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 managements 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.

CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS AND COMPREHENSIVE INCOME (UNAUDITED)FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 2020/2019 Quarter Period Year to Date (In thousands, except per 2020 2019 2020 2019 share data) NET SALES $ 1,486,227 100 % $ 1,163,026 100 % $ 3,760,290 100 % $ 3,417,969 100.0 % COST OF GOODS SOLD 1,245,153 83.8 975,756 83.9 3,147,049 83.7 2,889,706 84.5 GROSS PROFIT 241,074 16.2 187,270 16.1 613,241 16.3 528,263 15.5 SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 134,649 9.1 115,958 10.0 357,770 9.5 334,165 9.8 OTHER (176 ) - 845 0.1 (2,120 ) (0.1 ) 948 - EARNINGS FROM OPERATIONS 106,601 7.2 70,467 6.1 257,591 6.9 193,150 5.7 OTHER EXPENSE, NET 921 0.1 1,490 0.1 4,668 0.1 4,082 0.1 EARNINGS BEFORE INCOME TAXES 105,680 7.1 68,977 5.9 252,923 6.7 189,068 5.5 INCOME TAXES 26,819 1.8 16,396 1.4 63,798 1.7 45,340 1.3 NET EARNINGS 78,861 5.3 52,581 4.5 189,125 5.0 143,728 4.2 LESS NET EARNINGS ATTRIBUTABLE TONONCONTROLLING (1,657 ) (0.1 ) (722 ) (0.1 ) (5,299 ) (0.1 ) (1,814 ) (0.1 ) INTEREST NET EARNINGS ATTRIBUTABLE TO CONTROLLING INTEREST $ 77,204 5.2 $ 51,859 4.5 $ 183,826 4.9 $ 141,914 4.2 EARNINGS PER SHARE - BASIC $ 1.25 $ 0.84 $ 2.98 $ 2.30 EARNINGS PER SHARE - DILUTED $ 1.25 $ 0.84 $ 2.98 $ 2.30 SUPPLEMENTAL SALES AND SG&A DATA Quarter Period Year to Date Segment Classification 2020 2019 % 2020 2019 % Retail $ 700,522 $ 397,140 76.4 % $ 1,661,873 $ 1,212,330 37.1 % Industrial 282,124 271,667 3.8 % 763,046 837,671 -8.9 % Construction 447,103 445,505 0.4 % 1,187,429 1,225,467 -3.1 % All Other 56,478 48,714 15.9 % 147,942 142,501 3.8 % Total Net Sales $ 1,486,227 $ 1,163,026 27.8 % $ 3,760,290 $ 3,417,969 10.0 % 2020 % of 2019 % of 2020 % of 2019 % of Sales Sales Sales SalesSG&A, Excluding Bonus Expense $ 92,342 6.2 $ 93,344 8.0 $ 273,574 7.3 $ 280,898 8.2 Bonus Expense 42,307 2.8 22,614 1.9 84,196 2.2 53,267 1.6 Total SG&A $ 134,649 9.1 $ 115,958 10.0 $ 357,770 9.5 $ 334,165 9.8 SG&A as a Percentage of Gross 55.9 % 61.9 % 58.3 % 63.3 % Profit

CONSOLIDATED CONDENSED BALANCE SHEETS (UNAUDITED) SEPTEMBER 2020/2019 (In thousands) ASSETS 2020 2019 LIABILITIES 2020 2019 AND EQUITY CURRENT ASSETS CURRENT LIABILITIES Cash and Accounts cash $ 346,154 $ 64,498 payable $ 231,111 $ 180,767 equivalents Restricted 724 729 Accrued 259,733 204,529 cash liabilities Current Investments 20,530 17,028 portion of 2,760 152 debt Accounts 583,079 474,648 receivable Inventories 528,734 479,356 Other current 32,888 55,845 assets TOTAL CURRENT 1,512,109 1,092,104 TOTAL CURRENT 493,604 385,448 ASSETS LIABILITIES OTHER ASSETS 121,025 116,887 LONG-TERM DEBT ANDINTANGIBLE CAPITALASSETS, NET 311,491 286,627 LEASE 311,267 162,853 OBLIGATIONSPROPERTY, OTHER 131,945 103,221 PLANT LIABILITIES AND EQUIPMENT, 405,995 385,007 EQUITY 1,413,804 1,229,103 NET TOTALTOTAL ASSETS $ 2,350,620 $ 1,880,625 LIABILITIES $ 2,350,620 $ 1,880,625 AND EQUITY

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED) FOR THE NINE MONTHS ENDED SEPTEMBER 2020/2019 (In thousands) 2020 2019 CASH FLOWS FROM OPERATING ACTIVITIES: Net earnings $ 189,125 $ 143,728 Adjustments to reconcile net earnings to net cash from operating activities: Depreciation 47,226 44,652 Amortization of intangibles 5,863 4,690 Expense associated with share-based and 3,152 3,105 grant compensation arrangementsDeferred income taxes (credit) 110 (367 ) Unrealized gain on investments and other (81 ) (1,611 ) Net (gain) loss on disposition and (662 ) 830 impairment of assetsChanges in: Accounts receivable (211,238 ) (127,841 ) Inventories (39,167 ) 80,178 Accounts payable and cash overdraft 85,354 14,293 Accrued liabilities and other 105,401 36,423 NET CASH FROM 185,083 198,080 OPERATING ACTIVITIES CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of property, plant, and (67,024 ) (66,338 ) equipmentProceeds from sale of property, plant 2,588 1,180 and equipmentAcquisitions and purchase ofnoncontrolling interest, net of cash (34,820 ) (38,710 ) receivedPurchases of investments (24,266 ) (6,475 ) Proceeds from sale of investments 22,281 4,159 Other 314 199 NET CASH USED IN (100,927 ) (105,985 ) INVESTING ACTIVITIES CASH FLOWS FROM FINANCING ACTIVITIES: Borrowings under revolving credit 6,862 421,464 facilitiesRepayments under revolving credit (6,498 ) (460,537 ) facilitiesRepayments of debt (3,087 ) (3,099 ) Issuance of long-term debt 150,000 - Proceeds from issuance of common stock 1,042 812 Dividends paid to shareholders (23,020 ) (12,270 ) Distributions to noncontrolling interest (932 ) (1,634 ) Repurchase of common stock (29,212 ) - Other 23 41 NET CASH FROM (USED 95,178 (55,223 ) IN) FINANCING ACTIVITIES Effect of exchange rate changes on cash (1,122 ) 157 NET CHANGE IN CASH AND CASH EQUIVALENTS 178,212 37,029 ALL CASH AND CASH EQUIVALENTS, BEGINNING 168,666 28,198 OF PERIOD ALL CASH AND CASH EQUIVALENTS, END OF $ 346,878 $ 65,227 PERIOD Reconciliation of cash and cash equivalents and restricted cash:Cash and cash equivalents, beginning of $ 168,336 $ 27,316 periodRestricted cash, beginning of period 330 882 All cash and cash equivalents, beginning $ 168,666 $ 28,198 of period Cash and cash equivalents, end of period $ 346,154 $ 64,498 Restricted cash, end of period 724 729 All cash and cash equivalents, end of $ 346,878 $ 65,227 period

EBITDA RECONCILIATION (UNAUDITED)FOR THE THREE AND NINE MONTHS ENDEDSEPTEMBER 2020/2019 Quarter Period Year to Date(In thousands) 2020 2019 2020 2019Net earnings 78,861 52,581 189,125 143,728 Interest expense 2,486 1,900 6,291 6,767 Interest and investment (1,011 ) (317 ) (1,541 ) (1,074 )incomeIncome taxes 26,819 16,396 63,798 45,340 Expense associated withshare-based compensation 849 896 3,152 3,105 arrangementsNet (gain) loss ondisposition and (391 ) 1,151 (662 ) 830 impairment of assetsUnrealized gain on (554 ) (93 ) (82 ) (1,611 )investmentsDepreciation expense 15,896 15,452 47,226 44,652 Amortization of 2,734 1,744 5,863 4,690 intangiblesEBITDA 125,689 89,710 313,170 246,427

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS AS A PERCENTAGE OF SALESCURRENT YEAR'S SALES STATED AT LAST YEAR'S SELLING PRICES (UNAUDITED)FOR THE THREE MONTHS ENDED - SEPTEMBER 2020/2019 Quarter Period Sales Adjusted Actual to Actual Last Year's Selling Prices 2020 2020 2019 NET SALES 100.0 % 100.0 % 100.0 %COST OF GOODS SOLD 83.8 80.8 83.9 GROSS PROFIT 16.2 19.2 16.1 SELLING, GENERAL AND 9.1 10.7 9.9 ADMINISTRATIVE EXPENSESOTHER - - 0.1 EARNINGS FROM OPERATIONS 7.2 8.5 6.1 OTHER EXPENSE, NET 0.1 0.1 0.1 EARNINGS BEFORE INCOME TAXES 7.1 8.4 5.9 INCOME TAXES 1.8 2.1 1.4 NET EARNINGS 5.3 6.3 4.5 LESS NET EARNINGS ATTRIBUTABLE TONONCONTROLLING (0.1 ) (0.1 ) (0.1 ) INTERESTNET EARNINGS ATTRIBUTABLE TO CONTROLLING INTEREST 5.2 % 6.2 % 4.5 % Note: Actualpercentages arecalculated and may not sum to total due to rounding. 2019 NET SALES $ 1,163,026 2020 SELL PRICE INCREASE 20.00 % INCREASE IN 2020 NET SALES DUE $ 232,605 TO SELL PRICE INCREASE ACTUAL 2020 NET SALES 1,486,227 LESS SELL PRICE ADJUSTMENT FOR 232,605 LUMBER COSTSADJUSTED 2020 NET SALES $ 1,253,622 ACTUAL 2020 COST OF GOODS SOLD $ 1,245,153 LESS ADJUSTMENT FOR LUMBER 232,605 COSTSADJUSTED 2020 COST OF GOODS $ 1,012,548 SOLD



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Dick GauthierVP, Business Outreach(616) 365-1555