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UFP Industries (UFPI) Q1 Earnings Meet Estimates, Margins Up
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UFP Industries, Inc. (UFPI - Free Report) reported first-quarter 2020 results, wherein earnings met the Zacks Consensus Estimate, while revenues missed the same.
The company rescheduled first-quarter earnings call to May 7 from Apr 23 to have a better insight into the company's businesses for the remainder of 2020, post the withdrawal of "stay-at-home" orders. It also noted that the majority of its employees are deemed essential critical infrastructure workers and continue to serve customers. The company has reduced operations and temporarily furloughed a few employees. It will provide an update on the impact of the pandemic on the business.
On Feb 3, 2020, it announced changes in the frequency of dividend payments from semi-annual to quarterly. It raised quarterly cash dividend by 25% to 12.5 cents a share, in line with the previous quarter. The dividend is payable on Jun 15 to shareholders of record on Jun 1.
Earnings & Net Sales Discussion
The company reported earnings of 65 cents per share, up 12% from 58 cents reported in the year-ago period.
Universal Forest Products, Inc. Price, Consensus and EPS Surprise
Net sales of $1.03 billion missed the consensus mark of $1.05 million by 1.7% but grew 2% on a year-over-year basis. Lower lumber prices resulted in 3% year-over-year decline of gross sales.
End-Market Sales Discussion
UFP Industries classifies top-line results on the basis of end-markets served. Its end-market sales sum up to total gross sales. Gross sales during the reported quarter came in at $1.05 billion, up 1.9% from the year-ago period.
UFP Retail: The segment reported sales of $365 million during the quarter, up 6.3% year over year. Retail unit sales were up 9% from the year-ago quarter, backed by 26% growth in Home and Décor, 14% rise in both UFP-Edge and ProWood, as well as 8% improvement in Fence, Lawn and Garden. However, lower selling prices partially offset the same by 3%.
UFP Industrial: The Industrial segment’s sales totaled $258.6 million, reflecting a decline of 6.6% from the year-ago period. During the quarter, unit sales remained flat year over year, while the segment’s overall sales declined due to lower lumber prices.
UFP Construction: Sales in the segment were $384.9 million, up 4.3% year over year. A 6% improvement in unit sales was partially offset by a 2% decrease in selling prices. Unit sales in Concrete Forming, Factory Built, Commercial and Site Built grew 15%, 12%, 3% and 1%, respectively, during the quarter.
International sales were $36.3 million, down 0.8% year over year.
Operating Highlights
Gross margin of 16.5% improved 130 basis points (bps) year over year. Selling, general and administrative expenses — accounting for 10.9% of net sales — increased 50 bps year over year. Operating margin in the quarter improved 90 bps to 5.7%. EBITDA totaled $77.1 million, reflecting an increase of 16.9% year over year.
Balance Sheet & Cash Flow
At the end of the first quarter, cash and cash equivalents were $32.1 million, significantly up from $17.1 million in the comparable prior-year period.
In the quarter under review, net cash used in operating activities totaled $46.2 million compared with $55.8 million a year ago.
During the first quarter, the company repurchased nearly 750,000 shares of its common stock at an average price of $38.62.
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UFP Industries (UFPI) Q1 Earnings Meet Estimates, Margins Up
UFP Industries, Inc. (UFPI - Free Report) reported first-quarter 2020 results, wherein earnings met the Zacks Consensus Estimate, while revenues missed the same.
The company rescheduled first-quarter earnings call to May 7 from Apr 23 to have a better insight into the company's businesses for the remainder of 2020, post the withdrawal of "stay-at-home" orders. It also noted that the majority of its employees are deemed essential critical infrastructure workers and continue to serve customers. The company has reduced operations and temporarily furloughed a few employees. It will provide an update on the impact of the pandemic on the business.
On Feb 3, 2020, it announced changes in the frequency of dividend payments from semi-annual to quarterly. It raised quarterly cash dividend by 25% to 12.5 cents a share, in line with the previous quarter. The dividend is payable on Jun 15 to shareholders of record on Jun 1.
Earnings & Net Sales Discussion
The company reported earnings of 65 cents per share, up 12% from 58 cents reported in the year-ago period.
Universal Forest Products, Inc. Price, Consensus and EPS Surprise
Universal Forest Products, Inc. price-consensus-eps-surprise-chart | Universal Forest Products, Inc. Quote
Net sales of $1.03 billion missed the consensus mark of $1.05 million by 1.7% but grew 2% on a year-over-year basis. Lower lumber prices resulted in 3% year-over-year decline of gross sales.
End-Market Sales Discussion
UFP Industries classifies top-line results on the basis of end-markets served. Its end-market sales sum up to total gross sales. Gross sales during the reported quarter came in at $1.05 billion, up 1.9% from the year-ago period.
UFP Retail: The segment reported sales of $365 million during the quarter, up 6.3% year over year. Retail unit sales were up 9% from the year-ago quarter, backed by 26% growth in Home and Décor, 14% rise in both UFP-Edge and ProWood, as well as 8% improvement in Fence, Lawn and Garden. However, lower selling prices partially offset the same by 3%.
UFP Industrial: The Industrial segment’s sales totaled $258.6 million, reflecting a decline of 6.6% from the year-ago period. During the quarter, unit sales remained flat year over year, while the segment’s overall sales declined due to lower lumber prices.
UFP Construction: Sales in the segment were $384.9 million, up 4.3% year over year. A 6% improvement in unit sales was partially offset by a 2% decrease in selling prices. Unit sales in Concrete Forming, Factory Built, Commercial and Site Built grew 15%, 12%, 3% and 1%, respectively, during the quarter.
International sales were $36.3 million, down 0.8% year over year.
Operating Highlights
Gross margin of 16.5% improved 130 basis points (bps) year over year. Selling, general and administrative expenses — accounting for 10.9% of net sales — increased 50 bps year over year. Operating margin in the quarter improved 90 bps to 5.7%. EBITDA totaled $77.1 million, reflecting an increase of 16.9% year over year.
Balance Sheet & Cash Flow
At the end of the first quarter, cash and cash equivalents were $32.1 million, significantly up from $17.1 million in the comparable prior-year period.
In the quarter under review, net cash used in operating activities totaled $46.2 million compared with $55.8 million a year ago.
During the first quarter, the company repurchased nearly 750,000 shares of its common stock at an average price of $38.62.
Zacks Rank
UFP Industries — which shares space with Trex Company, Inc. (TREX - Free Report) , Louisiana-Pacific Corporation (LPX - Free Report) and Weyerhaeuser Company (WY - Free Report) in the Zacks Building Products - Wood industry — currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.
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