Universal Forest Products Earnings 2020-09-26

Balance Sheet	Income Statement	Cash Flow
Assets, Equity	Rev, G Profit, Net Income	Ops, Inv, Fin

Table of Contents

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 26, 2020


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number 0-22684

UFP INDUSTRIES, INC.

(Exact name of registrant as specified in its charter)


	Michigan		38-1465835
	(State or other jurisdiction of incorporation or		(I.R.S. Employer Identification Number)
	organization)

	2801 East Beltline NE, Grand Rapids, Michigan		49525
	(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code (616) 364-6161


	NONE
	(Former name or former address, if changed since last report.)

Indicate by checkmark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ⌧ No ◻

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ⌧ No ◻

Indicate by checkmark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large Accelerated Filer ⌧	Accelerated Filer ◻	Non-Accelerated Filer ◻	Smaller Reporting Company ☐
			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 a new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by checkmark whether the registrant is a shell company (as defined by Rule 12b-2 of the Exchange Act). Yes ☐ No ⌧

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:


	Class		Outstanding as of September 26, 2020
	Common stock, $1 par value		61,186,636


Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class	Trading Symbol	Name of Each Exchange On Which Registered
Common Stock, no par value	UFPI	The Nasdaq Stock Market, LLC

Table of Contents

UFP INDUSTRIES, INC.

TABLE OF CONTENTS

PART I.		FINANCIAL INFORMATION.	Page No.

	Item 1.	Financial Statements

		Condensed Consolidated Balance Sheets at September 26, 2020, December 28, 2019 and September 28, 2019	3

		Condensed Consolidated Statements of Earnings and Comprehensive Income for the Three and Nine Months Ended September 26, 2020 and September 28, 2019	4

		Condensed Consolidated Statements of Shareholders’ Equity for the Three and Nine Months Ended September 26, 2020 and September 28, 2019	5

		Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 26, 2020 and September 28, 2019	7

		Notes to Unaudited Condensed Consolidated Financial Statements	8

	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	18

	Item 3.	Quantitative and Qualitative Disclosures about Market Risk	34

	Item 4.	Controls and Procedures	35

PART II.		OTHER INFORMATION

	Item 1.	Legal Proceedings – NONE

	Item 1A.	Risk Factors	36

	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	36

	Item 3.	Defaults upon Senior Securities – NONE

	Item 4.	Mine Safety Disclosures – NONE

	Item 5.	Other Information – NONE	36

	Item 6.	Exhibits	37

Table of Contents

UFP INDUSTRIES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)


(in thousands, except share data)
	September 26,		December 28,		September 28,
	2020		2019		2019
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	346,154	$	168,336	$	64,498
Restricted cash		724		330		729
Investments		20,530		18,527		17,028
Accounts receivable, net		583,079		364,027		474,648
Inventories:
Raw materials		286,418		236,283		239,585
Finished goods		242,316		250,591		239,771
Total inventories		528,734		486,874		479,356
Refundable income taxes		—		13,272		1,550
Other current assets		32,888		41,706		54,295
TOTAL CURRENT ASSETS		1,512,109		1,093,072		1,092,104
DEFERRED INCOME TAXES		2,070		2,763		2,284
RESTRICTED INVESTMENTS		17,327		16,214		16,082
RIGHT OF USE ASSETS		77,412		80,167		75,436
OTHER ASSETS		24,216		24,884		23,085
GOODWILL		245,925		229,536		232,411
INDEFINITE-LIVED INTANGIBLE ASSETS		7,361		7,354		7,339
OTHER INTANGIBLE ASSETS, NET		58,205		48,313		46,877
PROPERTY, PLANT AND EQUIPMENT:
Property, plant and equipment		935,639		884,963		880,274
Less accumulated depreciation and amortization		(529,644)		(497,789)		(495,267)
PROPERTY, PLANT AND EQUIPMENT, NET		405,995		387,174		385,007
TOTAL ASSETS		2,350,620		1,889,477		1,880,625
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable	$	231,111	$	142,479	$	180,767
Accrued liabilities:
Compensation and benefits		171,472		141,892		127,500
Income taxes		3,024		—		—
Other		69,888		51,572		61,463
Current portion of lease liability		15,349		15,283		15,566
Current portion of long-term debt		2,760		2,816		152
TOTAL CURRENT LIABILITIES		493,604		354,042		385,448
LONG-TERM DEBT		311,267		160,867		162,853
LEASE LIABILITY		62,100		64,884		59,870
DEFERRED INCOME TAXES		22,478		22,880		14,897
OTHER LIABILITIES		47,367		29,071		28,454
TOTAL LIABILITIES		936,816		631,744		651,522
SHAREHOLDERS’ EQUITY:
Controlling interest shareholders’ equity:
Preferred stock, no par value; shares authorized 1,000,000; issued and outstanding, none	$	—	$	—	$	—
Common stock, $1 par value; shares authorized 80,000,000; issued and outstanding, 61,186,636, 61,408,589 and 61,390,216		61,187		61,409		61,390
Additional paid-in capital		216,002		192,173		189,820
Retained earnings		1,127,375		995,022		969,564
Accumulated other comprehensive income		(6,974)		(4,889)		(5,315)
Total controlling interest shareholders’ equity		1,397,590		1,243,715		1,215,459
Noncontrolling interest		16,214		14,018		13,644
TOTAL SHAREHOLDERS’ EQUITY		1,413,804		1,257,733		1,229,103
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	2,350,620	$	1,889,477	$	1,880,625

See notes to consolidated condensed financial statements.

Table of Contents

UFP INDUSTRIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS

AND COMPREHENSIVE INCOME

(Unaudited)


(in thousands, except per share data)
	Three Months Ended				Nine Months Ended
	September 26,		September 28,		September 26,		September 28,
	2020		2019		2020		2019
NET SALES	$	1,486,227	$	1,163,026	$	3,760,290	$	3,417,969
COST OF GOODS SOLD		1,245,153		975,756		3,147,049		2,889,706
GROSS PROFIT		241,074		187,270		613,241		528,263
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES		134,649		115,958		357,770		334,165
OTHER		(176)		845		(2,120)		948
EARNINGS FROM OPERATIONS		106,601		70,467		257,591		193,150
INTEREST EXPENSE		2,486		1,900		6,291		6,767
INTEREST INCOME		(1,011)		(317)		(1,541)		(1,074)
UNREALIZED GAIN ON INVESTMENTS AND OTHER		(554)		(93)		(82)		(1,611)
		921		1,490		4,668		4,082
EARNINGS BEFORE INCOME TAXES		105,680		68,977		252,923		189,068
INCOME TAXES		26,819		16,396		63,798		45,340
NET EARNINGS		78,861		52,581		189,125		143,728
LESS NET EARNINGS ATTRIBUTABLE TO NONCONTROLLING INTEREST		(1,657)		(722)		(5,299)		(1,814)
NET EARNINGS ATTRIBUTABLE TO CONTROLLING INTEREST	$	77,204	$	51,859	$	183,826	$	141,914

EARNINGS PER SHARE - BASIC	$	1.25	$	0.84	$	2.98	$	2.30
EARNINGS PER SHARE - DILUTED	$	1.25	$	0.84	$	2.98	$	2.30

OTHER COMPREHENSIVE INCOME:
NET EARNINGS		78,861		52,581		189,125		143,728
OTHER COMPREHENSIVE GAIN (LOSS)		1,687		(1,200)		(4,030)		644
COMPREHENSIVE INCOME		80,548		51,381		185,095		144,372
LESS COMPREHENSIVE INCOME ATTRIBUTABLE TO NONCONTROLLING INTEREST		(1,922)		(358)		(3,354)		(1,835)
COMPREHENSIVE INCOME ATTRIBUTABLE TO CONTROLLING INTEREST	$	78,626	$	51,023	$	181,741	$	142,537

See notes to consolidated condensed financial statements.

Table of Contents

UFP INDUSTRIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(Unaudited)


(in thousands, except share and per share data)
	Controlling Interest Shareholders’ Equity
							Accumulated
			Additional				Other
	Common		Paid-In		Retained		Comprehensive		Noncontrolling
	Stock		Capital		Earnings		Earnings		Interest		Total
Balance at December 28, 2019	$	61,409	$	192,173	$	995,022	$	(4,889)	$	14,018	$	1,257,733
Net earnings						40,159				411		40,570
Foreign currency translation adjustment								(5,951)		(2,335)		(8,286)
Unrealized loss on debt securities								(270)				(270)
Distributions to noncontrolling interest										(299)		(299)
Additional purchase of noncontrolling interest				130						(225)		(95)
Cash dividends - $0.125 per share - quarterly						(7,730)						(7,730)
Issuance of 10,549 shares under employee stock plans		10		309								319
Net issuance of 350,124 shares under stock grant programs		350		12,454		1						12,805
Issuance of 89,616 shares under deferred compensation plans		89		(89)								—
Repurchase of 756,397 shares		(756)				(28,456)						(29,212)
Expense associated with share-based compensation arrangements				1,404								1,404
Accrued expense under deferred compensation plans				5,343								5,343
Balance at March 28, 2020	$	61,102	$	211,724	$	998,996	$	(11,110)	$	11,570	$	1,272,282
Net earnings						66,463				3,231		69,694
Foreign currency translation adjustment								2,026		125		2,151
Unrealized loss on debt securities								688				688
Cash dividends - $0.125 per share - quarterly						(7,644)						(7,644)
Issuance of 9,714 shares under employee stock plans		10		367								377
Net issuance of 42,880 shares under stock grant programs		43		(174)		2						(129)
Issuance of 14,106 shares under deferred compensation plans		14		(14)								—
Expense associated with share-based compensation arrangements				824								824
Accrued expense under deferred compensation plans				1,082								1,082
Balance at June 27, 2020	$	61,169	$	213,809	$	1,057,817	$	(8,396)	$	14,926	$	1,339,325
Net earnings						77,204				1,657		78,861
Foreign currency translation adjustment								1,319		265		1,584
Unrealized loss on debt securities								103				103
Distributions to noncontrolling interest										(634)		(634)
Cash dividends - $0.125 per share - quarterly						(7,646)						(7,646)
Issuance of 7,511 shares under employee stock plans		7		338								345
Net forfeiture of 1,382 shares under stock grant programs		(1)		(56)								(57)
Issuance of 11,326 shares under deferred compensation plans		12		(12)								—
Expense associated with share-based compensation arrangements				826								826
Accrued expense under deferred compensation plans				1,097								1,097
Balance at September 26, 2020	$	61,187	$	216,002	$	1,127,375	$	(6,974)	$	16,214	$	1,413,804

See notes to condensed consolidated financial statements.

Table of Contents

UFP INDUSTRIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY, CONTINUED

(Unaudited)


(in thousands, except share and per share data)
	Controlling Interest Shareholders’ Equity
							Accumulated
			Additional				Other
	Common		Paid-In		Retained		Comprehensive		Noncontrolling
	Stock		Capital		Earnings		Earnings		Interest		Total
Balance at December 29, 2018	$	60,884	$	178,540	$	839,917	$	(5,938)	$	15,281	$	1,088,684
Net earnings						35,540				462		36,002
Foreign currency translation adjustment								982		224		1,206
Unrealized gain (loss) on investment & foreign currency								167				167
Distributions to noncontrolling interest										(500)		(500)
Issuance of 10,259 shares under employee stock plans		10		251								261
Net issuance of 320,069 shares under stock grant programs		320		6,101								6,421
Issuance of 138,295 shares under deferred compensation plans		138		(138)								—
Expense associated with share-based compensation arrangements				1,226								1,226
Accrued expense under deferred compensation plans

Price	36.30	EPS	3
Shares	61	P/E	13
MCap	2,228	P/FCF	11
Net Debt	98	EBIT	227
TEV	2,326	TEV/EBIT	10
TTM 2019-09-28, in MM, except price, ratios

10-Q	2020-09-26	Filed 2020-10-28
10-Q	2020-06-27	Filed 2020-07-30
10-Q	2020-03-28	Filed 2020-05-06
10-K	2019-12-28	Filed 2020-02-26
10-Q	2019-09-28	Filed 2019-10-30
10-Q	2019-06-29	Filed 2019-08-07
10-Q	2019-03-30	Filed 2019-05-01
10-K	2018-12-29	Filed 2019-02-27
10-Q	2018-09-29	Filed 2018-11-07
10-Q	2018-06-30	Filed 2018-08-01
10-Q	2018-03-31	Filed 2018-05-02
10-K	2017-12-30	Filed 2018-02-28
10-Q	2017-09-30	Filed 2017-11-01
10-Q	2017-07-01	Filed 2017-08-02
10-Q	2017-04-01	Filed 2017-05-03
10-K	2016-12-31	Filed 2017-03-01
10-Q	2016-09-24	Filed 2016-10-27
10-Q	2016-06-25	Filed 2016-07-27
10-Q	2016-03-26	Filed 2016-04-27
10-K	2015-12-26	Filed 2016-02-24
10-Q	2015-09-26	Filed 2015-10-30
10-Q	2015-06-27	Filed 2015-07-29
10-Q	2015-03-28	Filed 2015-05-01
10-K	2014-12-27	Filed 2015-02-25
10-Q	2014-09-27	Filed 2014-10-29
10-Q	2014-06-28	Filed 2014-07-30
10-Q	2014-03-29	Filed 2014-04-30
10-K	2013-12-28	Filed 2014-02-26
10-Q	2013-09-28	Filed 2013-10-30
10-Q	2013-06-29	Filed 2013-08-01
10-Q	2013-03-30	Filed 2013-04-30
10-K	2012-12-29	Filed 2013-02-26
10-Q	2012-09-29	Filed 2012-10-30
10-Q	2012-06-30	Filed 2012-08-08
10-Q	2012-03-31	Filed 2012-04-30
10-K	2011-12-31	Filed 2012-03-14
10-Q	2011-09-24	Filed 2011-10-24
10-Q	2011-06-25	Filed 2011-08-01
10-Q	2011-03-26	Filed 2011-04-19
10-K	2010-12-25	Filed 2011-02-22
10-Q	2010-09-25	Filed 2010-10-20
10-Q	2010-06-26	Filed 2010-07-19
10-Q	2010-03-27	Filed 2010-04-21
10-K	2009-12-26	Filed 2010-02-23

8-K	2020-11-16
8-K	2020-11-12
8-K	2020-11-05
8-K	2020-10-21
8-K	2020-08-12
8-K	2020-08-10
8-K	2020-07-22
8-K	2020-06-09
8-K	2020-04-22
8-K	2020-04-22
8-K	2020-03-26
8-K	2020-02-19
8-K	2020-01-13
8-K	2019-10-23
8-K	2019-08-12
8-K	2019-07-24
8-K	2019-04-25
8-K	2019-04-24
8-K	2019-03-26
8-K	2019-02-20
8-K	2019-01-02
8-K	2018-11-02
8-K	2018-10-16
8-K	2018-07-18
8-K	2018-06-26
8-K	2018-06-18
8-K	2018-05-03
8-K	2018-04-19
8-K	2018-04-18
8-K	2018-04-02
8-K	2018-02-22

EX-31.(A)	ufpi-20200926xex31da.htm
EX-31.(B)	ufpi-20200926xex31db.htm
EX-32.(A)	ufpi-20200926xex32da.htm
EX-32.(B)	ufpi-20200926xex32db.htm

UFPI 10Q Quarterly Report

Universal Forest Products Earnings 2020-09-26