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Published in Manufacturing

Lumber prices, acquisitions fuel record-breaking quarter for UFP Industries

BY Thursday, July 22, 2021 04:43pm

GRAND RAPIDS — Wood products manufacturer UFP Industries Inc. continues to achieve record-breaking sales numbers as it navigates a volatile industry.

Late Wednesday, the Grand Rapids-based UFP Industries (Nasdaq: UFPI) announced $2.7 billion in sales for the second quarter of 2021, marking a 117-percent increase over the second quarter of 2020. 

UFP Industries CEO Matthew Missad COURTESY PHOTO

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Higher selling prices contributed to 70 percent of the drastic sales increase, while acquisitions propelled growth by 36 percent. The company’s recent acquisitions generated $455 million in net sales for the quarter.

Against the backdrop of a spike in lumber prices, UFP Industries CEO Matthew Missad commended his team for an improved pricing model and managed inventory program to ease the fluctuations.

“In the last year and a half, UFP Industries has been tested by an unprecedented economic disruption and the most turbulent supply and pricing changes in our industry’s history,” he said during a call with analysts this week. “Despite those challenges, we have continued to improve our business and serve customers without disruption.”

“We continue to break records with our financial performance, a feat I attribute to the hard work of our employees, our new market-focused organizational structure, and our balanced business model, which allows us to sell into a variety of diverse markets,” he added.

UFP Industries also posted a record $2.78 in earnings per diluted share, compared to $1.08 the same time last year.

Net sales in all segments of the business — retail, industrial and construction — jumped by more than 100 percent. UFP’s industrial segment led the way, recording $611 million in sales for a 172-percent increase from the second quarter of 2020. 

The company attributed that drastic increase to a widespread reopening of the economy, while acquisitions of PalletOne and T&R Lumber accounted for 47 percent of that growth.

The company’s retail segment generated $1.26 billion in sales, up 107 percent from the second quarter last year. The segment was led by its UFP-Edge — which specializes in siding, pattern and trim — and Deckorators — specializing in composite decking materials — brands, which increased sales by 27 and 11 percent, respectively.

UFP Industries maintains $288 million in liquidity with $562 million of net debt. Company officials expect lumber prices and seasonal demand to reach more typical levels in the coming months.

“We remain optimistic about the rest of this year and our prospects in 2022,” Missad said. “We expect market conditions to normalize during the second half of 2021. While falling lumber prices and more normalized demand create challenging year-over-year profitability comparisons for our retail segment, the stabilized lumber market should benefit our industrial and construction segments.”

Read 2701 times Last modified on Friday, 23 July 2021 08:49
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