UFP Industries Announces Fourth Quarter and Fiscal 2023 Results

Rhea-AI Summary

UFP Industries, Inc. reports net sales of $1.5 billion and earnings per diluted share of $1.62 for Q4 2023, with a strong focus on long-term growth and profitability. Despite a decrease in organic unit sales and prices, the company remains optimistic about future prospects. Fiscal 2023 results show a decline in net sales and earnings, attributed to one less week of operating activity. The company maintains a robust balance sheet with significant liquidity and a return-focused capital allocation strategy.

Positive

• Strong net sales of $1.5 billion and earnings per diluted share of $1.62 for Q4 2023.
• Focus on long-term growth and profitability with raised targets.
• Decrease in organic unit sales and prices impacting financial results.
• Fiscal 2023 results reflect a decline in net sales and earnings due to one less week of operating activity.
• Robust balance sheet with $841.9 million in net surplus cash and over $2.4 billion in liquidity.
• Capital allocation strategy includes acquisitions, capital expenditures, dividend payments, and share repurchases.

Negative

• Decrease in net sales and earnings for fiscal 2023 compared to the previous year.
• Lower organic unit sales and prices affecting financial performance.
• Decline in adjusted EBITDA margin for both Q4 2023 and fiscal 2023.
• Negative impact of one less week of operating activity on results.

Insights

Financial Analyst

The reported financial results of UFP Industries, Inc. reflect a contraction in net sales and earnings, indicative of a challenging macroeconomic environment. The 20% decrease in Q4 net sales, alongside a 26% drop in earnings from operations, is substantial and may concern investors. This is compounded by a 25% annual decrease in net sales and a 32% reduction in earnings from operations for the fiscal year. These declines are attributed to lower lumber prices and a decrease in organic unit sales, which are critical factors that can affect the company's stock performance. However, the company's ability to maintain a strong balance sheet, with significant net surplus cash and liquidity, suggests financial resilience. The strategic acquisitions and increased dividend payments signal confidence in long-term growth prospects, which could mitigate short-term concerns.

Market Research Analyst

UFP Industries' strategy to increase value-added product sales, which now represent 68% of total sales, indicates a pivot towards higher-margin offerings. This shift is a positive move in diversifying revenue streams and reducing dependence on volatile commodity prices, such as lumber. The company's focus on expanding capacity and investing in capital expenditures reflects a proactive approach to scaling operations and improving market position. The acquisition of Palets Suller Group expands their international footprint, potentially opening new markets and customer segments. These factors could be influential in driving long-term shareholder value and improving competitive stance within the industry.

Economist

The performance of UFP Industries must be contextualized within broader economic trends, including the normalization of lumber prices post-pandemic and the anticipated cyclical demand patterns. The company's cautious outlook for 2024 aligns with economic indicators suggesting a softer demand in the first half of the year, with potential recovery in the second half. This cyclical nature of the industry, combined with UFP Industries' strategic long-term goals, such as achieving a 12.5% adjusted EBITDA margin, indicates an understanding of market dynamics and a plan to navigate them. Investors should note the company's conservative capital structure and ROI goals, which may offer stability in uncertain economic times.

Raising long-term goals for unit growth and profitability

GRAND RAPIDS, Mich.--(BUSINESS WIRE)-- 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.
• Earnings from operations of $124 million decreased 26 percent.
• Adjusted EBITDA¹ of $166 million decreased 22 percent, and adjusted EBITDA¹ 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 EBITDA¹ of $810 million decreased 26 percent. Adjusted EBITDA¹ margin declined 20 basis points to 11.2 percent.

________________________

1 Represents a non-GAAP measurement; see the reconciliation of non-GAAP financial measures and related explanations below.

Capital Allocation

UFP Industries maintains a strong balance sheet with $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.

- 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.

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 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.

This press release contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act, as amended, that are based on management’s beliefs, assumptions, current expectations, estimates and projections about the markets we serve, the economy and the Company itself. Words like “anticipates,” “believes,” “confident,” “estimates,” “expects,” “forecasts,” “likely,” “plans,” “projects,” “should,” variations of such words, and similar expressions identify such forward-looking statements. These statements do not guarantee future performance and involve certain risks, uncertainties and assumptions that are difficult to predict with regard to timing, extent, likelihood and degree of occurrence. The Company does not undertake to update forward-looking statements to reflect facts, circumstances, events, or assumptions that occur after the date the forward-looking statements are made. Actual results could differ materially from those included in such forward-looking statements. Investors are cautioned that all forward-looking statements involve risks and uncertainty. Among the factors that could cause actual results to differ materially from forward-looking statements are the following: fluctuations in the price of lumber; adverse or unusual weather conditions; adverse economic conditions in the markets we serve; government regulations, particularly involving environmental and safety regulations; and our ability to make successful business acquisitions. Certain of these risk factors as well as other risk factors and additional information are included in the Company's reports on Form 10-K and 10-Q on file with the Securities and Exchange Commission

Non-GAAP Financial Information

This release includes certain financial information not prepared in accordance with U.S. GAAP. Because not all companies calculate non-GAAP financial information identically (or at all), the presentations herein may not be comparable to other similarly titled measures used by other companies. Management uses Adjusted EBITDA, a non-GAAP financial measure, in order to evaluate historical and ongoing operations. Management believes that this non-GAAP financial measure is useful in order to enable investors to perform meaningful comparisons of historical and current performance. Adjusted EBITDA is intended to supplement and should be read together with the financial results. Adjusted EBITDA should not be considered an alternative or substitute for, and should not be considered superior to, the reported financial results. Accordingly, users of this financial information should not place undue reliance on the non-GAAP financial measure.

Net earnings

Net earnings refers to net earnings attributable to controlling interest unless specifically noted.

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS AND COMPREHENSIVE INCOME (UNAUDITED) FOR THE THREE 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

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

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	%

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	%

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

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

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20240220036821/en/

Dick Gauthier

VP of Investor Relations

(616) 365-1555

Source: UFP Industries, Inc.

FAQ

What were the net sales and earnings per diluted share for UFP Industries in Q4 2023?

UFP Industries reported net sales of $1.5 billion and earnings per diluted share of $1.62 for the fourth quarter of 2023.

What factors contributed to the decline in net sales and earnings for fiscal 2023?

The decline in net sales and earnings for fiscal 2023 was attributed to a decrease in organic unit sales and prices, as well as the impact of one less week of operating activity.

How does UFP Industries plan to achieve long-term growth and profitability?

UFP Industries aims to achieve long-term growth and profitability by making significant investments for organic growth and acquisitions, enhancing value-added product offerings, and focusing on operational efficiencies.

What is UFP Industries' current approach to capital allocation?

UFP Industries maintains a strong balance sheet with a focus on acquisitions, capital expenditures, dividend payments, and share repurchases as part of its return-focused capital allocation strategy.

What were the highlights of UFP Retail Solutions' performance in Q4 2023?

UFP Retail Solutions reported $505.6 million in net sales for the fourth quarter of 2023, with a 27 percent decrease from the same period in 2022.

What is UFP Industries' short-term outlook for the lumber market?

UFP Industries anticipates that lumber prices will remain at lower levels based on current supply and demand, following more typical seasonal trends.

What are UFP Industries' long-term financial goals?

UFP Industries' five-year financial goals include achieving compounded annual unit sales growth of 7-10 percent, sustaining a 12.5 percent adjusted EBITDA margin, earning an incremental return on investment over the cost of capital, and maintaining a conservative capital structure.