UFP Industries Announces Fourth Quarter and Fiscal 2022 Results

UFP Industries, Inc. today announced net sales of $1.9 billion, net earnings attributable to controlling interest of $133 million, and earnings per diluted share of $2.10 for the fourth quarter of 2022. The company also announced a record $9.6 billion in net sales for fiscal 2022, an 11 percent increase over 2021, and record 2022 earnings per diluted share of $10.97, a 28 percent increase over the previous year.

“As we celebrate record results for 2022, we also turn toward a cooling housing market and softening economy with determination and conviction,” said Chairman and CEO Matthew J. Missad. “Importantly, our strong balance sheet enables us to remain on offense during periods of economic uncertainty and invest in new product innovation and in markets with significant long-term value potential. Our balanced business model continues to prove its advantage by giving us the flexibility to adjust to market fluctuations and allocate resources where we see the greatest return across our diverse and complementary markets. We see opportunities in challenging times, and, as in the past, we plan to take advantage of them in 2023.

“To recognize the hard work of our teammates in 2022, we provided significant wage increases and will pay our production and hourly employees more than $60 million in bonuses and other extra compensation.”

Fourth Quarter 2022 Highlights (comparisons on a year-over-year basis):

• Net sales of $1.91 billion decreased 5 percent due to a 10 percent decrease in organic unit sales, a 4 percent increase in prices, and a 1 percent increase from acquisitions.
• New product sales of $164 million increased 36 percent.
• Earnings from operations of $169 million decreased 14 percent.
• Adjusted EBITDA of $213 million decreased 5 percent from the record performance during the same period of 2021, while adjusted EBITDA margin remained unchanged at 11.1 percent.

Fiscal 2022 Highlights (comparisons on a year-over-year basis):

• Net sales of $9.63 billion increased 11 percent due a 3 percent increase from acquisitions, a 9 percent increase in prices, and a 1 percent decline in organic unit sales.
• New product sales were $736 million, up 53 percent.
• Earnings from operations of $950 million increased 29 percent. Acquisitions contributed $16.5 million to earnings.
• Adjusted EBITDA of $1.1 billion increased 32 percent. Acquisitions contributed $25.5 million to adjusted EBITDA.

Capital Allocation

UFP Industries maintains a strong balance sheet with $281.3 million in net surplus cash (surplus cash less interest-bearing debt and cash overdraft) at year-end 2022, compared to $50.6 million in net debt at year-end 2021, and had more than $1.8 billion of liquidity at year-end 2022. The company’s return-focused approach to capital allocation included:

– Investments of approximately $174 million for capital expenditures during 2022. The company is targeting $200-225 million in 2023, including value-added growth investments as well as significant investments in automation, robotics and technology.

– Repurchases of approximately 1,247,000 shares of common stock for $95.8 million during 2022 (an average price of $76.83 per share). The company is authorized to purchase an additional 2 million shares through February 3, 2024, and will continue to repurchase UFPI shares when the price is advantageous to offset dilution resulting from long-term, share-based incentive compensation programs. In 2022, the company issued 919,000 shares for share-based compensation programs at an average issue price of $82.61 per share.

– Paid dividends of $58.9 million or $0.95 per share in 2022, a 46 percent increase per share over 2021. On February 3, 2023, the Board approved a quarterly dividend payment of $0.25 per share, payable on March 15, 2023, to shareholders of record on March 1, 2023.

The company continues to seek strategic acquisitions that allow it to drive long-term growth and margin improvements, enhance its capabilities, and create incremental value for its customers and shareholders. During the fourth quarter of 2022, UFP Packaging acquired Titan Corrugated and its affiliate, All Boxed Up. For the full year 2022, UFP Industries made four acquisitions, including Cedar Poly, Ultra Aluminum Manufacturing, and a 50 percent stake in Dempsey Wood Products.

By business segment, the company reported the following 2022 results:

UFP Retail Solutions

Fourth Quarter: $690.7 million in net sales, down 2 percent from the fourth quarter of 2021 due to a 9 percent decline in organic unit sales and a 2 percent decline due to the transfer of certain building products to the construction segment, which was offset by a 7 percent increase in selling prices and a 2 percent increase from acquisitions.

Full Year: $3.65 billion in net sales, up 7 percent from 2021 due to a 5 percent increase in unit sales from acquisitions and a 7 percent increase in selling prices, which was offset by a 3 percent decline in organic unit sales and a 2 percent decrease due to the transfer of certain products to the construction segment.

Segment Outlook: After experiencing a significant increase in demand during the pandemic, we continue to expect more normalized demand in our retail solutions segment in 2023. We anticipate lumber prices will normalize and follow more seasonal historical trends in 2023, and the retail segment will experience flat unit sales.

UFP Packaging (formerly UFP Industrial)

Fourth Quarter: $522.2 million in net sales, up 1 percent compared to the fourth quarter of 2021, due to a 1 percent increase in selling prices and flat organic unit sales growth.

Full Year: $2.39 billion in net sales, up 11 percent from the previous year due to a 12 percent increase in selling prices, a 1 percent increase in unit sales from acquisitions, and a 2 percent decrease in organic unit sales.

Segment Outlook: We continue to monitor business activity and the key economic indicators that drive this segment with many of those metrics indicating unit sales will be flat to slightly down in 2023.

UFP Construction

Fourth Quarter: $604.9 million in net sales, down 11 percent over the fourth quarter of 2021, due to a 16 percent decline in organic unit sales, a 3 percent increase in selling prices, and a 2 percent increase from the transfer of certain products from the retail solutions segment.

Full Year: $3.14 billion in net sales, up 17 percent from the previous year due to an 11 percent increase in selling prices, a 4 percent increase in organic unit sales, and a 2 percent increase due to the transfer of certain products from the retail solutions segment.

Segment Outlook: The portion of the construction business which focuses on housing includes site-built residential (14 percent of total company sales in 2022) and factory built (12 percent). There are many estimates on housing starts, with the consensus estimating a 15-20 percent decline in 2023.

For the complete press release, click here.

About UFP Industries, Inc.

UFP Industries (Nasdaq: UFPI) is a holding company whose operating subsidiaries – UFP Industrial, 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 #401 on the Fortune 500 and #149 on Industry Week’s list of America’s Largest Manufacturers. For more about UFP Industries, go to WWW.UFPI.COM.

Contact:

Dick Gauthier – Vice President, Communications and Investor Relations – (616) 365-1555

Source: UFP Industries, Inc.