GRAND RAPIDS — Wood products manufacturer UFP Industries Inc. leveraged recent acquisitions and rode surging lumber prices to another record-breaking quarter.
The Grand Rapids-based company reported its fourth quarter and 2021 fiscal year earnings, both of which set new watermarks as the company continues to gain market share with acquisitions.
The strong report sent UFP’s stock soaring, up 11 percent on the week.
“Our new market-focused organizational structure is helping us to better identify growth opportunities, and we are more strategically investing our capital,” UFP Industries CEO Matthew Missad said in a statement. “These investments, coupled with the addition of new value-added products and very strong demand, have resulted in unprecedented growth.”
UFP Industries (Nasdaq: UFPI) generated $2.02 billion net sales for the fourth quarter, a 45-percent jump from the same period a year ago. The company attributed 20 percent of the growth to the increase in lumber prices.
For the year, UFP Industries generated $8.64 billion in net sales, a 68-percent increase from 2020. Unit sales for the company rose 24 percent for the year, while higher lumber prices spiked 40 percent. The company also increased organic sales by 4 percent over the period.
UFP Industries recorded net earnings of $552.3 million, or $8.59 per diluted share, more than double the nearly $253.9 million in earnings it reported last year.
Continuing its string of deals, UFP Industries also closed four acquisitions during the fourth quarter and acquired nine companies overall during the 2021 fiscal year. This included two of the company’s larger deals: PalletOne, which buoyed the company’s industrial segment, and Spartanburg Forest Products.
The acquisitions drove unit sales up 20 percent for the fourth quarter and 24 percent 2021, according to the company.
Retail led the way for UFP Industries with $703.9 million in net sales for the fourth quarter and finished the year at $3.42 billion, a 58 percent increase from last year.
UFP indicated that, to seize growth opportunities, the company is increasing its capital expenditure target to a range of $175 million-$225 million, which is an increase of $151 million. These come in the form of automation, robotics, technology in addition to added capacity for the Deckorators and UFP-Edge brands, both of which are performing well.
The company also boosted its cash allocated for share repurchases, with the board authorizing a repurchase of up to 2.6 million shares.
“I think the ability to implement all of the things that we want to do this year is going to hinge very tightly on what these manufacturers were able to provide for us so we expect there to be some spillover,” Missad told investors on a recent conference call, when asked if supply chain restrictions might hold the company back from executing on its plans to automate. “We won't be able to get everything done that we have hoped to get done this year, so it will probably spill into 2023. But we’re definitely committed to continuing on this journey and making ourselves stronger, and helping our employees make their lives a little easier.”