Document and Entity Information
Document and Entity Information | 3 Months Ended |
Mar. 28, 2020shares | |
Document and Entity Information | |
Document Type | 10-Q |
Document Quarterly Report | true |
Document Transition Report | false |
Document Period End Date | Mar. 28, 2020 |
Entity File Number | 0-22684 |
Entity Registrant Name | UFP INDUSTRIES, INC. |
Entity Incorporation, State or Country Code | MI |
Entity Tax Identification Number | 38-1465835 |
Entity Address, Address Line One | 2801 East Beltline NE |
Entity Address, City or Town | Grand Rapids |
Entity Address, State or Province | MI |
Entity Address, Postal Zip Code | 49525 |
City Area Code | 616 |
Local Phone Number | 364-6161 |
Title of 12(b) Security | Common Stock |
Trading Symbol | UFPI |
Security Exchange Name | NASDAQ |
Entity Current Reporting Status | Yes |
Entity Interactive Data Current | Yes |
Entity Filer Category | Large Accelerated Filer |
Entity Small Business | false |
Entity Emerging Growth Company | false |
Entity Shell Company | false |
Entity Common Stock, Shares Outstanding (in shares) | 61,102,481 |
Current Fiscal Year End Date | --12-26 |
Document Fiscal Year Focus | 2020 |
Document Fiscal Period Focus | Q1 |
Entity Central Index Key | 0000912767 |
Amendment Flag | false |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 28, 2020 | Dec. 28, 2019 | Mar. 30, 2019 |
CURRENT ASSETS: | |||
Cash and cash equivalents | $ 32,129 | $ 168,336 | $ 17,111 |
Restricted cash | 724 | 330 | 1,024 |
Investments | 17,778 | 18,527 | 16,197 |
Accounts receivable, net | 460,821 | 364,027 | 444,111 |
Inventories: | |||
Raw materials | 263,857 | 236,283 | 279,265 |
Finished goods | 246,824 | 250,591 | 300,898 |
Total inventories | 510,681 | 486,874 | 580,163 |
Refundable income taxes | 2,624 | 13,272 | 4,629 |
Other current assets | 36,152 | 41,706 | 40,237 |
TOTAL CURRENT ASSETS | 1,060,909 | 1,093,072 | 1,103,472 |
DEFERRED INCOME TAXES | 2,145 | 2,763 | 2,364 |
RESTRICTED INVESTMENTS | 16,111 | 16,214 | 13,580 |
RIGHT OF USE ASSETS | 81,065 | 80,167 | 66,100 |
OTHER ASSETS | 25,198 | 24,884 | 8,419 |
GOODWILL | 246,459 | 229,536 | 224,247 |
INDEFINITE-LIVED INTANGIBLE ASSETS | 7,288 | 7,354 | 7,364 |
OTHER INTANGIBLE ASSETS, NET | 46,232 | 48,313 | 39,686 |
PROPERTY, PLANT AND EQUIPMENT: | |||
Property, plant and equipment | 906,171 | 884,963 | 828,837 |
Less accumulated depreciation and amortization | (508,596) | (497,789) | (472,671) |
PROPERTY, PLANT AND EQUIPMENT, NET | 397,575 | 387,174 | 356,166 |
TOTAL ASSETS | 1,882,982 | 1,889,477 | 1,821,398 |
CURRENT LIABILITIES: | |||
Cash overdraft | 18,732 | ||
Accounts payable | 162,039 | 142,479 | 170,667 |
Accrued liabilities: | |||
Compensation and benefits | 92,504 | 141,892 | 70,867 |
Other | 55,760 | 51,572 | 45,618 |
Current portion of lease liability | 16,180 | 15,283 | 14,500 |
Current portion of long-term debt | 2,772 | 2,816 | 185 |
TOTAL CURRENT LIABILITIES | 329,255 | 354,042 | 320,569 |
LONG-TERM DEBT | 160,550 | 160,867 | 266,428 |
LEASE LIABILITY | 64,937 | 64,884 | 51,600 |
DEFERRED INCOME TAXES | 22,799 | 22,880 | 14,622 |
OTHER LIABILITIES | 33,159 | 29,071 | 29,813 |
TOTAL LIABILITIES | 610,700 | 631,744 | 683,032 |
Controlling interest shareholders' equity: | |||
Preferred stock, no par value; shares authorized 1,000,000; issued and outstanding, none | |||
Common stock, $1 par value; shares authorized 80,000,000; issued and outstanding, 61,102,481, 61,408,589 and 61,352,372 | 61,102 | 61,409 | 61,352 |
Additional paid-in capital | 211,724 | 192,173 | 190,879 |
Retained earnings | 998,996 | 995,022 | 875,457 |
Accumulated other comprehensive income | (11,110) | (4,889) | (4,789) |
Total controlling interest shareholders' equity | 1,260,712 | 1,243,715 | 1,122,899 |
Noncontrolling interest | 11,570 | 14,018 | 15,467 |
TOTAL SHAREHOLDERS' EQUITY | 1,272,282 | 1,257,733 | 1,138,366 |
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ 1,882,982 | $ 1,889,477 | $ 1,821,398 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Mar. 28, 2020 | Dec. 28, 2019 | Mar. 30, 2019 |
SHAREHOLDERS' EQUITY: | |||
Preferred stock, no par value (in dollars per share) | $ 0 | $ 0 | $ 0 |
Preferred stock, shares authorized (in shares) | 1,000,000 | 1,000,000 | 1,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 | 0 |
Common Stock, Par or Stated Value Per Share | $ 1 | $ 1 | $ 1 |
Common stock, shares authorized (in shares) | 80,000,000 | 80,000,000 | 80,000,000 |
Common stock, shares issued (in shares) | 61,102,481 | 61,408,589 | 61,352,372 |
Common stock, shares outstanding (in shares) | 61,102,481 | 61,408,589 | 61,352,372 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS AND COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 28, 2020 | Mar. 30, 2019 | |
CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS AND COMPREHENSIVE INCOME | ||
NET SALES | $ 1,032,062 | $ 1,015,125 |
COST OF GOODS SOLD | 864,826 | 860,858 |
GROSS PROFIT | 167,236 | 154,267 |
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES | 109,339 | 105,317 |
OTHER | (735) | 504 |
EARNINGS FROM OPERATIONS | 58,632 | 48,446 |
INTEREST EXPENSE | 1,908 | 2,460 |
INTEREST INCOME | (341) | (245) |
UNREALIZED LOSS (GAIN) ON INVESTMENTS AND OTHER | 3,173 | (1,348) |
NET INTEREST EXPENSE | 4,740 | 867 |
EARNINGS BEFORE INCOME TAXES | 53,892 | 47,579 |
INCOME TAXES | 13,322 | 11,577 |
NET EARNINGS | 40,570 | 36,002 |
LESS NET EARNINGS ATTRIBUTABLE TO NONCONTROLLING INTEREST | (411) | (462) |
NET EARNINGS ATTRIBUTABLE TO CONTROLLING INTEREST | $ 40,159 | $ 35,540 |
EARNINGS PER SHARE - BASIC (USD per share) | $ 0.65 | $ 0.58 |
EARNINGS PER SHARE - DILUTED (USD per share) | $ 0.65 | $ 0.58 |
OTHER COMPREHENSIVE INCOME: | ||
NET EARNINGS | $ 40,570 | $ 36,002 |
OTHER COMPREHENSIVE GAIN (LOSS) | (8,556) | 1,373 |
COMPREHENSIVE INCOME | 32,014 | 37,375 |
LESS COMPREHENSIVE INCOME ATTRIBUTABLE TO NONCONTROLLING INTEREST | 1,924 | (686) |
COMPREHENSIVE INCOME ATTRIBUTABLE TO CONTROLLING INTEREST | $ 33,938 | $ 36,689 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) $ in Thousands | Common Stock | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Earnings | Noncontrolling Interest | Total |
Beginning balance at Dec. 29, 2018 | $ 60,884 | $ 178,540 | $ 839,917 | $ (5,938) | $ 15,281 | $ 1,088,684 |
Increase (Decrease) in Stockholders' Equity | ||||||
Net earnings | 35,540 | 462 | 36,002 | |||
Foreign currency translation adjustment | 982 | 224 | 1,206 | |||
Unrealized gain (loss) on investment & foreign currency | 167 | 167 | ||||
Distributions to noncontrolling interest | (500) | (500) | ||||
Issuance of shares under employee stock purchase plans | 10 | 251 | 261 | |||
Issuance of shares under stock grant programs | 320 | 6,101 | 6,421 | |||
Issuance of shares under deferred compensation plans | 138 | (138) | ||||
Expense associated with share-based compensation arrangements | 1,226 | 1,226 | ||||
Accrued expense under deferred compensation plans | 4,899 | 4,899 | ||||
Ending balance at Mar. 30, 2019 | 61,352 | 190,879 | 875,457 | (4,789) | 15,467 | 1,138,366 |
Beginning balance at Dec. 28, 2019 | 61,409 | 192,173 | 995,022 | (4,889) | 14,018 | 1,257,733 |
Increase (Decrease) in Stockholders' Equity | ||||||
Net earnings | 40,159 | 411 | 40,570 | |||
Foreign currency translation adjustment | (5,951) | (2,335) | (8,286) | |||
Unrealized gain (loss) on investment & foreign currency | (270) | (270) | ||||
Distributions to noncontrolling interest | (299) | (299) | ||||
Additional purchases of noncontrolling interest | 130 | (225) | (95) | |||
Cash dividends | (7,730) | (7,730) | ||||
Issuance of shares under employee stock purchase plans | 10 | 309 | 319 | |||
Issuance of shares under stock grant programs | 350 | 12,454 | 1 | 12,805 | ||
Issuance of shares under deferred compensation plans | 89 | (89) | ||||
Repurchase of shares | (756) | (28,456) | (29,212) | |||
Expense associated with share-based compensation arrangements | 1,404 | 1,404 | ||||
Accrued expense under deferred compensation plans | 5,343 | 5,343 | ||||
Ending balance at Mar. 28, 2020 | $ 61,102 | $ 211,724 | $ 998,996 | $ (11,110) | $ 11,570 | $ 1,272,282 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Parenthetical) - $ / shares | 3 Months Ended | |
Mar. 28, 2020 | Mar. 30, 2019 | |
Increase (Decrease) in Stockholders' Equity | ||
Cash dividends per share - semiannually (USD per share) | $ 0.125 | |
Issuance of shares under employee stock plans (in shares) | 10,549 | 10,259 |
Issuance of shares under stock grant programs (in shares) | 350,124 | 320,069 |
Issuance of shares under deferred compensation plans (in shares) | 89,616 | 138,295 |
Repurchase of shares (in shares) | 756,397 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 28, 2020 | Mar. 30, 2019 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net earnings | $ 40,570 | $ 36,002 |
Adjustments to reconcile net earnings to net cash from operating activities: | ||
Depreciation | 15,717 | 14,475 |
Amortization of intangibles | 1,571 | 1,852 |
Expense associated with share-based and grant compensation arrangements | 1,444 | 1,287 |
Deferred income taxes (credit) | 286 | (742) |
Unrealized (gain) loss on investments | 3,173 | (1,348) |
Net gain on disposition of assets and impairment of assets | (285) | (122) |
Changes in: | ||
Accounts receivable | (94,253) | (100,716) |
Inventories | (25,783) | (23,649) |
Accounts payable and cash overdraft | 20,047 | 25,056 |
Accrued liabilities and other | (8,648) | (7,924) |
NET CASH USED IN OPERATING ACTIVITIES | (46,161) | (55,829) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchases of property, plant and equipment | (27,286) | (15,883) |
Proceeds from sale of property, plant and equipment | 409 | 241 |
Acquisitions and purchases of non-controlling interest, net of cash received | (18,487) | |
Investment in life insurance contracts | ||
Purchases of investments | (14,052) | (449) |
Proceeds from sale of investments | 11,260 | 340 |
Other | (54) | 200 |
NET CASH USED IN INVESTING ACTIVITIES | (48,210) | (15,551) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Borrowings under revolving credit facilities | 6,759 | 237,560 |
Repayments under revolving credit facilities | (6,498) | (173,232) |
Repayment of debt | (3,074) | (3,029) |
Proceeds from issuance of common stock | 319 | 261 |
Dividends paid to shareholders | (7,730) | |
Distributions to noncontrolling interest | (299) | (500) |
Repurchase of common stock | (29,212) | |
Other | 12 | 9 |
NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES | (39,723) | 61,069 |
Effect of exchange rate changes on cash | (1,719) | 248 |
NET CHANGE IN CASH AND CASH EQUIVALENTS | (135,813) | (10,063) |
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, BEGINNING OF YEAR | 168,666 | 28,198 |
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, END OF PERIOD | $ 32,853 | $ 18,135 |
CONDENSED CONSOLIDATED STATEM_5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - SUPPLEMENTAL - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 28, 2020 | Mar. 30, 2019 | |
RECONCILIATION OF CASH AND CASH EQUIVALENTS AND RESTRICTED CASH: | ||
Cash and cash equivalents, beginning of period | $ 168,336 | $ 27,316 |
Restricted cash, beginning of period | 330 | 882 |
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, BEGINNING OF YEAR | 168,666 | 28,198 |
Cash and cash equivalents, end of period | 32,129 | 17,111 |
Restricted cash, end of period | 724 | 1,024 |
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, END OF PERIOD | 32,853 | 18,135 |
SUPPLEMENTAL INFORMATION: | ||
Interest paid | 374 | 570 |
Income taxes paid | 2,307 | 2,801 |
NON-CASH FINANCING ACTIVITIES: | ||
Common stock issued under deferred compensation plans | $ 4,900 | $ 4,457 |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 3 Months Ended |
Mar. 28, 2020 | |
BASIS OF PRESENTATION | |
BASIS OF PRESENTATION | A. BASIS OF PRESENTATION The accompanying unaudited interim consolidated condensed financial statements (the “Financial Statements”) include our accounts and those of our wholly-owned and majority-owned subsidiaries and partnerships, and have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Accordingly, the Financial Statements do not include all the information and footnotes normally included in the annual consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States. All intercompany transactions and balances have been eliminated. In our opinion, the Financial Statements contain all material adjustments necessary to present fairly our consolidated financial position, results of operations and cash flows for the interim periods presented. All such adjustments are of a normal recurring nature. These Financial Statements should be read in conjunction with the annual consolidated financial statements, and footnotes thereto, included in our Annual Report to Shareholders on Form 10-K for the fiscal year ended December 28, 2019. On April 22, 2020, the shareholders approved changing the name of the Company from Universal Forest Products, Inc., to UFP Industries, Inc. Seasonality has a significant impact on our working capital from March to August which historically results in negative or modest cash flows from operations in our first and second quarters. Conversely, we experience a substantial decrease in working capital from September to February which typically results in significant cash flow from operations in our third and fourth quarters. For comparative purposes, we have included the March 30, 2019 balances in the accompanying unaudited condensed consolidated balance sheets. On March 11, 2020, the World Health Organization declared the novel strain of coronavirus (COVID-19) a global pandemic and recommended containment and mitigation measures worldwide, which subsequently resulted in a variety of “stay at home” orders issued by states in which we operate. As of the date of this filing, Consequently, all but 3 of our 150 plant locations remain operating. We cannot reasonably estimate the length or severity of this pandemic and government restrictions on business activity, or the extent to which these restrictions may materially impact our consolidated financial position, consolidated results of operations, and consolidated cash flows in fiscal 2020. |
FAIR VALUE
FAIR VALUE | 3 Months Ended |
Mar. 28, 2020 | |
FAIR VALUE | |
FAIR VALUE | B. FAIR VALUE We apply the provisions of ASC 820, Fair Value Measurements and Disclosures March 28, 2020 March 30, 2019 Quoted Prices with Quoted Prices with Prices in Other Prices with Prices in Other Prices with Active Observable Unobservable Active Observable Unobservable Markets Inputs Inputs Markets Inputs Inputs (in thousands) (Level 1) (Level 2) (Level 3) Total (Level 1) (Level 2) (Level 3) Total Money market funds $ 29,561 $ 837 $ — $ 30,398 $ 56 $ 549 $ — $ 605 Fixed income funds 237 15,124 — 15,361 3,860 9,763 — 13,623 Equity securities 9,089 — — 9,089 8,258 — — 8,258 Alternative investments — — 1,960 1,960 — — 1,782 1,782 Mutual funds: — Domestic stock funds 5,204 — — 5,204 2,151 — — 2,151 International stock funds 947 — — 947 2,085 — — 2,085 Target funds 242 — — 242 257 — — 257 Bond funds 222 — — 222 799 — — 799 Alternative funds 921 — — 921 1,344 — — 1,344 Total mutual funds 7,536 — — 7,536 6,636 — — 6,636 Total $ 46,423 $ 15,961 $ 1,960 $ 64,344 $ 18,810 $ 10,312 $ 1,782 $ 30,904 Assets at fair value $ 46,423 $ 15,961 $ 1,960 $ 64,344 $ 18,810 $ 10,312 $ 1,782 $ 30,904 From the assets measured at fair value as of March 28, 2020, listed in the table above, $29.5 million of money market funds are held in Cash and Cash Equivalents, $17.7 million of mutual funds, equity securities, and alternative investments are held in Investments, $0.9 million of money market and mutual funds are held in Other Assets for our deferred compensation plan, and $15.4 million of fixed income funds and $0.8 million of money markets funds are held in Restricted Investments. We maintain money market, mutual funds, bonds, and/or stocks in our non-qualified deferred compensation plan, our wholly owned licensed captive insurance company, and assets held in financial institutions. These funds are valued at prices quoted in an active exchange market and are included in “Cash and Cash Equivalents”, “Investments”, “Other Assets”, and “Restricted Investments”. We have elected not to apply the fair value option under ASC 825, Financial Instruments, In accordance with our investment policy, our wholly-owned captive, Ardellis Insurance Ltd. (“Ardellis”), maintains an investment portfolio, totaling $33.1 million as of March 28, 2020, consisting of domestic and international stocks, alternative investments, and fixed income bonds. Ardellis’ available for sale investment portfolio, including funds held with the State of Michigan, consists of the following (in thousands): March 28, 2020 Unrealized Cost Gain/(Loss) Fair Value Fixed Income $ 1,834 $ 126 $ 1,960 Equity 15,257 104 15,361 Mutual Funds 9,690 (601) 9,089 Alternative Investments 7,298 (569) 6,729 Total $ 34,079 $ (940) $ 33,139 Our fixed income investments consist of a blend of US Government and Agency bonds and investment grade corporate bonds with varying maturities. Our equity investments consist of small, mid, and large cap growth and value funds, as well as international equity. Our alternative investments consist of the private real estate income trust which is valued as a Level 3 asset. The net unrealized loss was $0.9 million. Carrying amounts above are recorded in the investments and restricted investments line items within the balance sheet as of March 28, 2020. |
REVENUE RECOGNITION
REVENUE RECOGNITION | 3 Months Ended |
Mar. 28, 2020 | |
REVENUE RECOGNITION | |
REVENUE RECOGNITION | C. REVENUE RECOGNITION Within the three primary segments (Retail, Industrial, and Construction) that the Company operates, there are a variety of written agreements governing the sale of our products and services. The transaction price is stated at the purchase order level, which includes shipping and/or freight costs and any applicable governmental authority taxes. The majority of our contracts have a single performance obligation concentrated around the delivery of goods to the carrier, Free On Board (FOB) shipping point. Therefore, revenue is recognized when this performance obligation is satisfied. Generally, title and control passes at the time of shipment. In certain circumstances, the customer takes title when the shipment arrives at the destination. However, our shipping process is typically completed the same day. Certain customer products that we provide require installation by the Company or a 3 rd rd The Company utilizes rebates, credits, discounts and/or cash-based incentives with certain customers which are accounted for as variable consideration. We estimate these amounts based on the expected amount to be provided to customers and reduce revenues recognized. We believe that there will not be significant changes to our estimates of variable consideration. The allocation of these costs are applied at the invoice level and recognized in conjunction with revenue. Additionally, returns and refunds are estimated on a historical and expected basis which is a reduction of revenue recognized. Earnings on construction contracts are reflected in operations using over time accounting, under either cost to cost or units of delivery methods, depending on the nature of the business at individual operations, which is in accordance with ASC 606 as revenue is recognized when certain performance obligations are performed. Under over time accounting using the cost to cost method, revenues and related earnings on construction contracts are measured by the relationships of actual costs incurred related to the total estimated costs. Under over time accounting using the units of delivery method, revenues and related earnings on construction contracts are measured by the relationships of actual units produced related to the total number of units. Revisions in earnings estimates on the construction contracts are recorded in the accounting period in which the basis for such revisions becomes known. Projected losses on individual contracts are charged to operations in their entirety when such losses become apparent. Our construction contracts are generally entered into with a fixed price and completion of the projects can range from 6 and commodity costs. During the year, we update our estimated costs to complete our projects using current labor and commodity costs and recognize losses to the extent that they exist. The following table presents our gross revenues disaggregated by revenue source: (in thousands) March 28, March 30, Market Classification 2020 2019 % Change FOB Shipping Point Revenue $ 1,017,906 $ 996,823 2.1% Construction Contract Revenue 32,800 34,782 -5.7% Total Gross Sales 1,050,706 1,031,605 1.9% Sales Allowances (18,644) (16,480) 13.1% Total Net Sales $ 1,032,062 $ 1,015,125 1.7% The Construction segment comprises the construction contract revenue shown above. Construction contract revenue is primarily made up of site-built and framing customers. The following table presents the balances of over time accounting accounts which are included in “Other current assets” and “Accrued liabilities: Other”, respectively (in thousands): March 28, December 28, March 30, 2020 2019 2019 Cost and Earnings in Excess of Billings $ 5,744 $ 4,960 $ 7,880 Billings in Excess of Cost and Earnings 9,920 6,622 5,020 |
EARNINGS PER SHARE
EARNINGS PER SHARE | 3 Months Ended |
Mar. 28, 2020 | |
EARNINGS PER SHARE | |
EARNINGS PER SHARE | D. EARNINGS PER SHARE The computation of earnings per share (“EPS”) is as follows (in thousands): Three Months Ended March 28, March 30, 2020 2019 Numerator: Net earnings attributable to controlling interest $ 40,159 $ 35,540 Adjustment for earnings allocated to non-vested restricted common stock (1,059) (865) Net earnings for calculating EPS $ 39,100 $ 34,675 Denominator: Weighted average shares outstanding 61,842 61,372 Adjustment for non-vested restricted common stock (1,630) (1,493) Shares for calculating basic EPS 60,212 59,879 Effect of dilutive restricted common stock 18 75 Shares for calculating diluted EPS 60,230 59,954 Net earnings per share: Basic $ 0.65 $ 0.58 Diluted $ 0.65 $ 0.58 |
COMMITMENTS, CONTINGENCIES, AND
COMMITMENTS, CONTINGENCIES, AND GUARANTEES | 3 Months Ended |
Mar. 28, 2020 | |
COMMITMENTS, CONTINGENCIES, AND GUARANTEES | |
COMMITMENTS, CONTINGENCIES, AND GUARANTEES | E. COMMITMENTS, CONTINGENCIES, AND GUARANTEES We are self-insured for environmental impairment liability, including certain liabilities which are insured through a wholly owned subsidiary, Ardellis Insurance Ltd., a licensed captive insurance company. We own and operate a number of facilities throughout the United States that chemically treat lumber products. In connection with the ownership and operation of these and other real properties, and the disposal or treatment of hazardous or toxic substances, we may, under various federal, state, and local environmental laws, ordinances, and regulations, be potentially liable for removal and remediation costs, as well as other potential costs, damages, and expenses. Environmental reserves, calculated with no On a consolidated basis, we have reserved approximately $2.0 million on March 28, 2020, and on March 30, 2019, respectively, representing the estimated costs to complete future remediation efforts. These amounts have not been reduced by an insurance receivable. In addition, on March 28, 2020, we were parties either as plaintiff or defendant to a number of lawsuits and claims arising through the normal course of our business. In the opinion of management, our consolidated financial statements will not be materially affected by the outcome of these contingencies and claims. On March 28, 2020, we had outstanding purchase commitments on commenced capital projects of approximately $26.3 million. We provide a variety of warranties for products we manufacture. Historically, warranty claims have not been material. We also distribute products manufactured by other companies, some of which are no longer in business. While we do not warrant these products, we have received claims as a distributor of these products when the manufacturer no longer exists or has the ability to pay. Historically, these costs have not had a material effect on our consolidated financial statements. As part of our operations, we supply building materials and labor to site-built construction projects or we jointly bid on contracts with framing companies for such projects. In some instances, we are required to post payment and performance bonds to ensure the products and installation services are completed in accordance with our contractual obligations. We have agreed to indemnify the surety for claims properly made against these bonds. As of March 28, 2020, we had approximately $8.7 million outstanding payment and performance bonds for open projects. We had approximately $11.6 million in payment and performance bonds outstanding for completed projects which are still under warranty. On March 28, 2020, we had outstanding letters of credit totaling $37.3 million, primarily related to certain insurance contracts and industrial development revenue bonds described further below. In lieu of cash deposits, we provide irrevocable letters of credit in favor of our insurers to guarantee our performance under certain insurance contracts. As of March 28, 2020, we have irrevocable letters of credit outstanding totaling approximately $27.4 million for these types of insurance arrangements. We have reserves recorded on our balance sheet, in accrued liabilities, that reflect our expected future liabilities under these insurance arrangements. We are required to provide irrevocable letters of credit in favor of the bond trustees for all industrial development revenue bonds that have been issued. These letters of credit guarantee principal and interest payments to the bondholders. We currently have irrevocable letters of credit outstanding totaling approximately $9.8 million related to our outstanding industrial development revenue bonds. These letters of credit have varying terms but may be renewed at the option of the issuing banks. Certain wholly owned domestic subsidiaries have guaranteed the indebtedness of UFP Industries, Inc. in certain debt agreements, including the Series 2012 and 2018 Senior Notes and our revolving credit facility. The maximum exposure of these guarantees is limited to the indebtedness outstanding under these debt arrangements and this exposure will expire concurrent with the expiration of the debt agreements. We did not enter into any new guarantee arrangements during the first quarter of 2020 which would require us to recognize a liability on our balance sheet. |
BUSINESS COMBINATIONS
BUSINESS COMBINATIONS | 3 Months Ended |
Mar. 28, 2020 | |
BUSINESS COMBINATIONS | |
BUSINESS COMBINATIONS | F. BUSINESS COMBINATIONS We completed the following acquisitions in 2020 and 2019, which were accounted for using the purchase method in thousands unless otherwise noted: Net Company Acquisition Intangible Tangible Operating Name Date Purchase Price Assets Assets Segment March 13, 2020 $21,851 $ 18,219 $ 3,632 Construction Quest Design & Fabrication and Quest Architectural Millwork ("Quest") A designer, fabricator, and installer of premium millwork and case goods for a variety of commercial uses. Quest had annual sales of approximately $22 million. The acquisition of Quest will expand our architectural millwork in the commercial construction business unit, which aligns with our growth goals in the construction segment. September 16, 2019 $12,422 $ 7,464 $ 4,958 Industrial Pallet USA, LLC ("Pallet USA") A manufacturer and recycler of wood pallet and crating products in the Midwest. Pallet USA had annual sales of approximately $18 million. The acquisition of Pallet USA allows us to expand our capacity to manufacture wood-based industrial packaging products and offer new services to customers in the Midwest. August 12, 2019 $17,809 $ 8,089 $ 9,720 Retail Northwest Painting, Inc. ("Northwest") A supplier of pre-painted building materials, including siding, soffit, panels and trim to the Western U.S. Northwest had annual sales of approximately $14 million. The acquisition of Northwest will expand our capacity to produce coated siding and trim for customers in the Northwest and Mountain West regions. May 1, 2019 $7,168 $ 6,180 $ 988 Industrial Wolverine Wood Products, Inc. ("Wolverine") A manufacturer of wood panel components for furniture, store fixtures and case goods manufacturers. Wolverine had annual sales of approximately million. The acquisition of Wolverine allows us to expand capacity to produce value-added wood components for customers in the Midwest. The intangible assets for the Quest, Pallet USA, Northwest, and Wolverine acquisitions have not been finalized and allocated to their respective identifiable asset and goodwill accounts. In aggregate, acquisitions completed since the end of March 2019 and not consolidated with other operations contributed approximately $9.1 million in revenue and a $0.4 million in operating profit during the first quarter of 2020. |
SEGMENT REPORTING
SEGMENT REPORTING | 3 Months Ended |
Mar. 28, 2020 | |
SEGMENT REPORTING | |
SEGMENT REPORTING | G. SEGMENT REPORTING The Company operates manufacturing, treating and distribution facilities internationally, but primarily in the United States. Effective January 1, 2020, the Company re-organized around the markets it serves rather than geography. The prior periods have been recast to reflect the new segment structure. The business segments align with the following markets: UFP Retail Solutions, UFP Construction and UFP Industrial. This change allows for a more specialized and consistent sales approach among Company operations, more efficient use of resources and capital, and quicker introduction of new products and services. The Company manages the operations of its individual locations primarily through the market-centered reporting structure under which each location is included in a business unit and business units are included in our Retail, Industrial, and Construction segments. The exception to this market-centered reporting and management structure is the Company’s International segment, which comprises our Mexico, Canada, and Australia operations and sales and buying offices in other parts of the world. Our International segment and Ardellis (our insurance captive) have been included in the “All Other” column of the table below. The “Corporate” column includes purchasing, transportation and administrative functions that serve our operating segments. Operating results of Corporate primarily consists of over (under) allocated costs. The operating results of UFP Real Estate, Inc., which owns and leases real estate, and UFP Transportation Ltd., which owns and leases transportation equipment, are also included in the Corporate column. An inter-company lease charge is assessed to our operating segments for the use of these assets at fair market value rates. Three Months Ended March 28, 2020 (in thousands) Retail Industrial Construction All Other Corporate Total Net sales to outside customers $ 352,161 $ 256,543 $ 381,155 $ 42,392 $ (189) $ 1,032,062 Intersegment net sales 29,858 11,220 15,423 53,167 (109,668) — Segment operating profit 15,512 18,074 17,135 4,739 3,172 58,632 Three Months Ended March 30, 2019 (in thousands) Retail Industrial Construction All Other Corporate Total Net sales to outside customers $ 333,100 $ 274,759 $ 365,137 $ 42,110 $ 19 $ 1,015,125 Intersegment net sales 29,571 11,062 11,831 53,129 (105,593) — Segment operating profit 11,031 18,823 15,267 2,048 1,277 48,446 Intangibles have been transferred and goodwill was re-allocated, based on their relative fair values, to our new segments and reporting units. The following table presents goodwill by segment as of March 28, 2020, and December 28, 2019 (in thousands): Retail Industrial Construction All Other Corporate Total Balance as of December 28, 2019 $ 58,098 $ 81,276 $ 82,911 $ 7,251 $ — $ 229,536 2020 Acquisitions — — 18,219 — — 18,219 Foreign Exchange, Net — — — (1,296) — (1,296) Balance as of March 28, 2020 $ 58,098 $ 81,276 $ 101,130 $ 5,955 $ — $ 246,459 The following table presents total assets by segment as of March 28, 2020, and December 28, 2019. Total Assets by Segment (in thousands) March 28, December 28, Segment Classification 2020 2019 % Change Retail $ 521,977 $ 436,397 19.6 % Industrial 363,508 410,383 (11.4) Construction 544,826 583,107 (6.6) All Other 127,406 145,418 (12.4) Corporate 325,265 314,172 3.5 Total Assets $ 1,882,982 $ 1,889,477 (0.3) % |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Mar. 28, 2020 | |
INCOME TAXES | |
INCOME TAXES | H. INCOME TAXES Effective tax rates differ from statutory federal income tax rates, primarily due to provisions for state and local income taxes and permanent tax differences. Our effective tax rate was 24.7% in the first quarter of 2020 compared to 24.3% for same period in 2019. The slight increase was primarily due to an increase in the permanent tax difference for non-deductible officer compensation. |
COMMON STOCK
COMMON STOCK | 3 Months Ended |
Mar. 28, 2020 | |
COMMON STOCK | |
COMMON STOCK | I. COMMON STOCK Below is a summary of common stock issuances for the first three months of 2020 and 2019 (in thousands, except average share price): March 28, 2020 Share Issuance Activity Common Stock Average Share Price Shares issued under the employee stock purchase plan 10 $ 35.59 Shares issued under the employee stock gift program 1 45.22 Shares issued under the director retainer stock program 1 47.90 Shares issued under the long term stock incentive plan 271 47.51 Shares issued under the executive stock match grants 80 47.60 Forfeitures (3) Total shares issued under stock grant programs 350 $ 47.52 Shares issued under the deferred compensation plans 89 $ 54.68 During the first three months of 2020, we repurchased approximately 756,000 shares of our common stock at an average share price of $38.62. March 30, 2019 Share Issuance Activity Common Stock Average Share Price Shares issued under the employee stock purchase plan 10 $ 29.88 Shares issued under the employee stock gift program 2 30.90 Shares issued under the director retainer stock program 1 31.00 Shares issued under the long term stock incentive plan 211 30.83 Shares issued under the executive stock match grants 109 31.57 Forfeitures (3) Total shares issued under stock grant programs 320 $ 31.08 Shares issued under the deferred compensation plans 138 $ 32.23 During the first three months of 2019, we did not repurchase any of our common stock. |
BASIS OF PRESENTATION (Policies
BASIS OF PRESENTATION (Policies) | 3 Months Ended |
Mar. 28, 2020 | |
BASIS OF PRESENTATION | |
Basis of Presentation | The accompanying unaudited interim consolidated condensed financial statements (the “Financial Statements”) include our accounts and those of our wholly-owned and majority-owned subsidiaries and partnerships, and have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Accordingly, the Financial Statements do not include all the information and footnotes normally included in the annual consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States. All intercompany transactions and balances have been eliminated. In our opinion, the Financial Statements contain all material adjustments necessary to present fairly our consolidated financial position, results of operations and cash flows for the interim periods presented. All such adjustments are of a normal recurring nature. These Financial Statements should be read in conjunction with the annual consolidated financial statements, and footnotes thereto, included in our Annual Report to Shareholders on Form 10-K for the fiscal year ended December 28, 2019. On April 22, 2020, the shareholders approved changing the name of the Company from Universal Forest Products, Inc., to UFP Industries, Inc. Seasonality has a significant impact on our working capital from March to August which historically results in negative or modest cash flows from operations in our first and second quarters. Conversely, we experience a substantial decrease in working capital from September to February which typically results in significant cash flow from operations in our third and fourth quarters. For comparative purposes, we have included the March 30, 2019 balances in the accompanying unaudited condensed consolidated balance sheets. On March 11, 2020, the World Health Organization declared the novel strain of coronavirus (COVID-19) a global pandemic and recommended containment and mitigation measures worldwide, which subsequently resulted in a variety of “stay at home” orders issued by states in which we operate. As of the date of this filing, Consequently, all but 3 of our 150 plant locations remain operating. We cannot reasonably estimate the length or severity of this pandemic and government restrictions on business activity, or the extent to which these restrictions may materially impact our consolidated financial position, consolidated results of operations, and consolidated cash flows in fiscal 2020. |
Revenue Recognition | Within the three primary segments (Retail, Industrial, and Construction) that the Company operates, there are a variety of written agreements governing the sale of our products and services. The transaction price is stated at the purchase order level, which includes shipping and/or freight costs and any applicable governmental authority taxes. The majority of our contracts have a single performance obligation concentrated around the delivery of goods to the carrier, Free On Board (FOB) shipping point. Therefore, revenue is recognized when this performance obligation is satisfied. Generally, title and control passes at the time of shipment. In certain circumstances, the customer takes title when the shipment arrives at the destination. However, our shipping process is typically completed the same day. Certain customer products that we provide require installation by the Company or a 3 rd rd The Company utilizes rebates, credits, discounts and/or cash-based incentives with certain customers which are accounted for as variable consideration. We estimate these amounts based on the expected amount to be provided to customers and reduce revenues recognized. We believe that there will not be significant changes to our estimates of variable consideration. The allocation of these costs are applied at the invoice level and recognized in conjunction with revenue. Additionally, returns and refunds are estimated on a historical and expected basis which is a reduction of revenue recognized. Earnings on construction contracts are reflected in operations using over time accounting, under either cost to cost or units of delivery methods, depending on the nature of the business at individual operations, which is in accordance with ASC 606 as revenue is recognized when certain performance obligations are performed. Under over time accounting using the cost to cost method, revenues and related earnings on construction contracts are measured by the relationships of actual costs incurred related to the total estimated costs. Under over time accounting using the units of delivery method, revenues and related earnings on construction contracts are measured by the relationships of actual units produced related to the total number of units. Revisions in earnings estimates on the construction contracts are recorded in the accounting period in which the basis for such revisions becomes known. Projected losses on individual contracts are charged to operations in their entirety when such losses become apparent. Our construction contracts are generally entered into with a fixed price and completion of the projects can range from 6 and commodity costs. During the year, we update our estimated costs to complete our projects using current labor and commodity costs and recognize losses to the extent that they exist. |
FAIR VALUE (Tables)
FAIR VALUE (Tables) | 3 Months Ended |
Mar. 28, 2020 | |
FAIR VALUE | |
Assets measured at fair value | March 28, 2020 March 30, 2019 Quoted Prices with Quoted Prices with Prices in Other Prices with Prices in Other Prices with Active Observable Unobservable Active Observable Unobservable Markets Inputs Inputs Markets Inputs Inputs (in thousands) (Level 1) (Level 2) (Level 3) Total (Level 1) (Level 2) (Level 3) Total Money market funds $ 29,561 $ 837 $ — $ 30,398 $ 56 $ 549 $ — $ 605 Fixed income funds 237 15,124 — 15,361 3,860 9,763 — 13,623 Equity securities 9,089 — — 9,089 8,258 — — 8,258 Alternative investments — — 1,960 1,960 — — 1,782 1,782 Mutual funds: — Domestic stock funds 5,204 — — 5,204 2,151 — — 2,151 International stock funds 947 — — 947 2,085 — — 2,085 Target funds 242 — — 242 257 — — 257 Bond funds 222 — — 222 799 — — 799 Alternative funds 921 — — 921 1,344 — — 1,344 Total mutual funds 7,536 — — 7,536 6,636 — — 6,636 Total $ 46,423 $ 15,961 $ 1,960 $ 64,344 $ 18,810 $ 10,312 $ 1,782 $ 30,904 Assets at fair value $ 46,423 $ 15,961 $ 1,960 $ 64,344 $ 18,810 $ 10,312 $ 1,782 $ 30,904 |
Available for sale investment portfolio | Ardellis’ available for sale investment portfolio, including funds held with the State of Michigan, consists of the following (in thousands): March 28, 2020 Unrealized Cost Gain/(Loss) Fair Value Fixed Income $ 1,834 $ 126 $ 1,960 Equity 15,257 104 15,361 Mutual Funds 9,690 (601) 9,089 Alternative Investments 7,298 (569) 6,729 Total $ 34,079 $ (940) $ 33,139 |
REVENUE RECOGNITION (Tables)
REVENUE RECOGNITION (Tables) | 3 Months Ended |
Mar. 28, 2020 | |
REVENUE RECOGNITION | |
Schedule of Disaggregation of revenue | (in thousands) March 28, March 30, Market Classification 2020 2019 % Change FOB Shipping Point Revenue $ 1,017,906 $ 996,823 2.1% Construction Contract Revenue 32,800 34,782 -5.7% Total Gross Sales 1,050,706 1,031,605 1.9% Sales Allowances (18,644) (16,480) 13.1% Total Net Sales $ 1,032,062 $ 1,015,125 1.7% |
Schedule of percentage-of-completion balances | The following table presents the balances of over time accounting accounts which are included in “Other current assets” and “Accrued liabilities: Other”, respectively (in thousands): March 28, December 28, March 30, 2020 2019 2019 Cost and Earnings in Excess of Billings $ 5,744 $ 4,960 $ 7,880 Billings in Excess of Cost and Earnings 9,920 6,622 5,020 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 3 Months Ended |
Mar. 28, 2020 | |
EARNINGS PER SHARE | |
Schedule of Computation of earnings per share | The computation of earnings per share (“EPS”) is as follows (in thousands): Three Months Ended March 28, March 30, 2020 2019 Numerator: Net earnings attributable to controlling interest $ 40,159 $ 35,540 Adjustment for earnings allocated to non-vested restricted common stock (1,059) (865) Net earnings for calculating EPS $ 39,100 $ 34,675 Denominator: Weighted average shares outstanding 61,842 61,372 Adjustment for non-vested restricted common stock (1,630) (1,493) Shares for calculating basic EPS 60,212 59,879 Effect of dilutive restricted common stock 18 75 Shares for calculating diluted EPS 60,230 59,954 Net earnings per share: Basic $ 0.65 $ 0.58 Diluted $ 0.65 $ 0.58 |
BUSINESS COMBINATIONS (Tables)
BUSINESS COMBINATIONS (Tables) | 3 Months Ended |
Mar. 28, 2020 | |
BUSINESS COMBINATIONS | |
Business Acquisitions Accounted for Using Purchase Method | Net Company Acquisition Intangible Tangible Operating Name Date Purchase Price Assets Assets Segment March 13, 2020 $21,851 $ 18,219 $ 3,632 Construction Quest Design & Fabrication and Quest Architectural Millwork ("Quest") A designer, fabricator, and installer of premium millwork and case goods for a variety of commercial uses. Quest had annual sales of approximately $22 million. The acquisition of Quest will expand our architectural millwork in the commercial construction business unit, which aligns with our growth goals in the construction segment. September 16, 2019 $12,422 $ 7,464 $ 4,958 Industrial Pallet USA, LLC ("Pallet USA") A manufacturer and recycler of wood pallet and crating products in the Midwest. Pallet USA had annual sales of approximately $18 million. The acquisition of Pallet USA allows us to expand our capacity to manufacture wood-based industrial packaging products and offer new services to customers in the Midwest. August 12, 2019 $17,809 $ 8,089 $ 9,720 Retail Northwest Painting, Inc. ("Northwest") A supplier of pre-painted building materials, including siding, soffit, panels and trim to the Western U.S. Northwest had annual sales of approximately $14 million. The acquisition of Northwest will expand our capacity to produce coated siding and trim for customers in the Northwest and Mountain West regions. May 1, 2019 $7,168 $ 6,180 $ 988 Industrial Wolverine Wood Products, Inc. ("Wolverine") A manufacturer of wood panel components for furniture, store fixtures and case goods manufacturers. Wolverine had annual sales of approximately million. The acquisition of Wolverine allows us to expand capacity to produce value-added wood components for customers in the Midwest. |
SEGMENT REPORTING (Tables)
SEGMENT REPORTING (Tables) | 3 Months Ended |
Mar. 28, 2020 | |
SEGMENT REPORTING | |
Segment Reporting | Three Months Ended March 28, 2020 (in thousands) Retail Industrial Construction All Other Corporate Total Net sales to outside customers $ 352,161 $ 256,543 $ 381,155 $ 42,392 $ (189) $ 1,032,062 Intersegment net sales 29,858 11,220 15,423 53,167 (109,668) — Segment operating profit 15,512 18,074 17,135 4,739 3,172 58,632 Three Months Ended March 30, 2019 (in thousands) Retail Industrial Construction All Other Corporate Total Net sales to outside customers $ 333,100 $ 274,759 $ 365,137 $ 42,110 $ 19 $ 1,015,125 Intersegment net sales 29,571 11,062 11,831 53,129 (105,593) — Segment operating profit 11,031 18,823 15,267 2,048 1,277 48,446 |
Schedule of Goodwill by Segment | The following table presents goodwill by segment as of March 28, 2020, and December 28, 2019 (in thousands): Retail Industrial Construction All Other Corporate Total Balance as of December 28, 2019 $ 58,098 $ 81,276 $ 82,911 $ 7,251 $ — $ 229,536 2020 Acquisitions — — 18,219 — — 18,219 Foreign Exchange, Net — — — (1,296) — (1,296) Balance as of March 28, 2020 $ 58,098 $ 81,276 $ 101,130 $ 5,955 $ — $ 246,459 |
Schedule of assets by segment | Total Assets by Segment (in thousands) March 28, December 28, Segment Classification 2020 2019 % Change Retail $ 521,977 $ 436,397 19.6 % Industrial 363,508 410,383 (11.4) Construction 544,826 583,107 (6.6) All Other 127,406 145,418 (12.4) Corporate 325,265 314,172 3.5 Total Assets $ 1,882,982 $ 1,889,477 (0.3) % |
COMMON STOCK (Tables)
COMMON STOCK (Tables) | 3 Months Ended |
Mar. 28, 2020 | |
COMMON STOCK | |
Schedule of common stock issuances | Below is a summary of common stock issuances for the first three months of 2020 and 2019 (in thousands, except average share price): March 28, 2020 Share Issuance Activity Common Stock Average Share Price Shares issued under the employee stock purchase plan 10 $ 35.59 Shares issued under the employee stock gift program 1 45.22 Shares issued under the director retainer stock program 1 47.90 Shares issued under the long term stock incentive plan 271 47.51 Shares issued under the executive stock match grants 80 47.60 Forfeitures (3) Total shares issued under stock grant programs 350 $ 47.52 Shares issued under the deferred compensation plans 89 $ 54.68 March 30, 2019 Share Issuance Activity Common Stock Average Share Price Shares issued under the employee stock purchase plan 10 $ 29.88 Shares issued under the employee stock gift program 2 30.90 Shares issued under the director retainer stock program 1 31.00 Shares issued under the long term stock incentive plan 211 30.83 Shares issued under the executive stock match grants 109 31.57 Forfeitures (3) Total shares issued under stock grant programs 320 $ 31.08 Shares issued under the deferred compensation plans 138 $ 32.23 |
BASIS OF PRESENTATION (Details)
BASIS OF PRESENTATION (Details) | Mar. 28, 2020location |
BASIS OF PRESENTATION | |
Plant locations closed due to COVID-19 | 3 |
Number of plant locations | 150 |
FAIR VALUE - Asset Measured at
FAIR VALUE - Asset Measured at Fair Value (Details) - USD ($) $ in Thousands | Mar. 28, 2020 | Mar. 30, 2019 |
Money market funds | Cash and Cash Equivalents | ||
Fair Value | ||
Investments at fair value | $ 29,500 | |
Money market funds | Restricted Investments | ||
Fair Value | ||
Investments at fair value | 800 | |
Fixed Income | Restricted Investments | ||
Fair Value | ||
Investments at fair value | 15,400 | |
Mutual funds, equity and alternative investments | Investments | ||
Fair Value | ||
Investments at fair value | 17,700 | |
Money market and mutual funds | Other Assets | ||
Fair Value | ||
Investments at fair value | 900 | |
Ardellis Insurance Ltd. | ||
Fair Value | ||
Total Fair Value | 33,139 | |
Estimate of Fair Value Measurement | Recurring | ||
Fair Value | ||
Investments at fair value | 64,344 | $ 30,904 |
Assets at fair value | 64,344 | 30,904 |
Estimate of Fair Value Measurement | Recurring | Money market funds | ||
Fair Value | ||
Investments at fair value | 30,398 | 605 |
Estimate of Fair Value Measurement | Recurring | Fixed Income | ||
Fair Value | ||
Investments at fair value | 15,361 | 13,623 |
Estimate of Fair Value Measurement | Recurring | Equity | ||
Fair Value | ||
Investments at fair value | 9,089 | 8,258 |
Estimate of Fair Value Measurement | Recurring | Alternative Investments | ||
Fair Value | ||
Investments at fair value | 1,960 | 1,782 |
Estimate of Fair Value Measurement | Recurring | Mutual Fund | ||
Fair Value | ||
Investments at fair value | 7,536 | 6,636 |
Estimate of Fair Value Measurement | Recurring | Domestic stock funds | ||
Fair Value | ||
Investments at fair value | 5,204 | 2,151 |
Estimate of Fair Value Measurement | Recurring | International stock funds | ||
Fair Value | ||
Investments at fair value | 947 | 2,085 |
Estimate of Fair Value Measurement | Recurring | Target funds | ||
Fair Value | ||
Investments at fair value | 242 | 257 |
Estimate of Fair Value Measurement | Recurring | Bond funds | ||
Fair Value | ||
Investments at fair value | 222 | 799 |
Estimate of Fair Value Measurement | Recurring | Alternative funds | ||
Fair Value | ||
Investments at fair value | 921 | 1,344 |
Estimate of Fair Value Measurement | Recurring | Quoted Prices in Active Markets (Level 1) | ||
Fair Value | ||
Investments at fair value | 46,423 | 18,810 |
Assets at fair value | 46,423 | 18,810 |
Estimate of Fair Value Measurement | Recurring | Quoted Prices in Active Markets (Level 1) | Money market funds | ||
Fair Value | ||
Investments at fair value | 29,561 | 56 |
Estimate of Fair Value Measurement | Recurring | Quoted Prices in Active Markets (Level 1) | Fixed Income | ||
Fair Value | ||
Investments at fair value | 237 | 3,860 |
Estimate of Fair Value Measurement | Recurring | Quoted Prices in Active Markets (Level 1) | Equity | ||
Fair Value | ||
Investments at fair value | 9,089 | 8,258 |
Estimate of Fair Value Measurement | Recurring | Quoted Prices in Active Markets (Level 1) | Mutual Fund | ||
Fair Value | ||
Investments at fair value | 7,536 | 6,636 |
Estimate of Fair Value Measurement | Recurring | Quoted Prices in Active Markets (Level 1) | Domestic stock funds | ||
Fair Value | ||
Investments at fair value | 5,204 | 2,151 |
Estimate of Fair Value Measurement | Recurring | Quoted Prices in Active Markets (Level 1) | International stock funds | ||
Fair Value | ||
Investments at fair value | 947 | 2,085 |
Estimate of Fair Value Measurement | Recurring | Quoted Prices in Active Markets (Level 1) | Target funds | ||
Fair Value | ||
Investments at fair value | 242 | 257 |
Estimate of Fair Value Measurement | Recurring | Quoted Prices in Active Markets (Level 1) | Bond funds | ||
Fair Value | ||
Investments at fair value | 222 | 799 |
Estimate of Fair Value Measurement | Recurring | Quoted Prices in Active Markets (Level 1) | Alternative funds | ||
Fair Value | ||
Investments at fair value | 921 | 1,344 |
Estimate of Fair Value Measurement | Recurring | Prices with Other Observable Inputs (Level 2) | ||
Fair Value | ||
Investments at fair value | 15,961 | 10,312 |
Assets at fair value | 15,961 | 10,312 |
Estimate of Fair Value Measurement | Recurring | Prices with Other Observable Inputs (Level 2) | Money market funds | ||
Fair Value | ||
Investments at fair value | 837 | 549 |
Estimate of Fair Value Measurement | Recurring | Prices with Other Observable Inputs (Level 2) | Fixed Income | ||
Fair Value | ||
Investments at fair value | 15,124 | 9,763 |
Estimate of Fair Value Measurement | Recurring | Prices with Unobservable Inputs (Level 3) | ||
Fair Value | ||
Investments at fair value | 1,960 | 1,782 |
Assets at fair value | 1,960 | 1,782 |
Estimate of Fair Value Measurement | Recurring | Prices with Unobservable Inputs (Level 3) | Alternative Investments | ||
Fair Value | ||
Investments at fair value | $ 1,960 | $ 1,782 |
FAIR VALUE - Available for Sale
FAIR VALUE - Available for Sale Investment Portfolio (Details) - Ardellis Insurance Ltd. $ in Thousands | Mar. 28, 2020USD ($) |
Available-for-sale securities | |
Total Securities Cost | $ 34,079 |
Unrealized Gain (Loss) | (940) |
Total Fair Value | 33,139 |
Fixed Income | |
Available-for-sale securities | |
Debt Securities Cost | 1,834 |
Debt Securities Unrealized Gain/(Loss) | 126 |
Debt Securities Fair Value | 1,960 |
Equity | |
Available-for-sale securities | |
Equity Securities Cost | 15,257 |
Equity Securities Unrealized Gain/(Loss) | 104 |
Equity Securities Fair Value | 15,361 |
Mutual Fund | |
Available-for-sale securities | |
Debt Securities Cost | 9,690 |
Debt Securities Unrealized Gain/(Loss) | (601) |
Debt Securities Fair Value | 9,089 |
Alternative Investments | |
Available-for-sale securities | |
Debt Securities Cost | 7,298 |
Debt Securities Unrealized Gain/(Loss) | (569) |
Debt Securities Fair Value | $ 6,729 |
REVENUE RECOGNITION - Disaggreg
REVENUE RECOGNITION - Disaggregated revenue (Details) $ in Thousands | 3 Months Ended | ||
Mar. 28, 2020USD ($)item | Mar. 30, 2019USD ($) | Dec. 28, 2019USD ($) | |
Revenue Recognition | |||
Retained earnings | $ 998,996 | $ 875,457 | $ 995,022 |
Number of markets in which the entity operates (in markets) | item | 3 | ||
Total Gross Sales | $ 1,050,706 | 1,031,605 | |
Sales Allowances | (18,644) | (16,480) | |
Total Net Sales | $ 1,032,062 | 1,015,125 | |
Change % | 1.90% | ||
Change % in sales allowances | 13.10% | ||
Change % in net sales | 1.70% | ||
FOB Shipping Point Revenue | |||
Revenue Recognition | |||
Total Gross Sales | $ 1,017,906 | 996,823 | |
Change % | 2.10% | ||
Construction Contract Revenue | |||
Revenue Recognition | |||
Total Gross Sales | $ 32,800 | $ 34,782 | |
Change % | (5.70%) | ||
Minimum | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-03-29 | Construction Contract Revenue | |||
Revenue Recognition | |||
Number of months to complete contract projects | 6 months | ||
Maximum | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-03-29 | Construction Contract Revenue | |||
Revenue Recognition | |||
Number of months to complete contract projects | 18 months |
REVENUE RECOGNITION - Percentag
REVENUE RECOGNITION - Percentage of completion (Details) - USD ($) $ in Thousands | Mar. 28, 2020 | Dec. 28, 2019 | Mar. 30, 2019 |
REVENUE RECOGNITION | |||
Cost and Earnings in Excess of Billings | $ 5,744 | $ 4,960 | $ 7,880 |
Billings in Excess of Cost and Earnings | $ 9,920 | $ 6,622 | $ 5,020 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 28, 2020 | Mar. 30, 2019 | |
Numerator: | ||
Net earnings attributable to controlling interest | $ 40,159 | $ 35,540 |
Adjustment for earnings allocated to non-vested restricted common stock | (1,059) | (865) |
Net earnings for calculating EPS | $ 39,100 | $ 34,675 |
Denominator: | ||
Weighted average shares outstanding (in shares) | 61,842 | 61,372 |
Adjustment for non-vested restricted common stock (in shares) | (1,630) | (1,493) |
Shares for calculating basic EPS (in shares) | 60,212 | 59,879 |
Effect of dilutive restricted common stock (in shares) | 18 | 75 |
Shares for calculating diluted EPS (in shares) | 60,230 | 59,954 |
Net earnings per share | ||
Basic (USD per share) | $ 0.65 | $ 0.58 |
Diluted (USD per share) | $ 0.65 | $ 0.58 |
COMMITMENTS, CONTINGENCIES, A_2
COMMITMENTS, CONTINGENCIES, AND GUARANTEES (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 28, 2020 | Mar. 30, 2019 | |
Long-term commitment | ||
Outstanding purchase commitments on capital projects | $ 26.3 | |
Surety Bonds and Letters of Credit | ||
Outstanding letters of credit | $ 37.3 | |
Remediation reserves | ||
Environmental reserves, discount rate (as a percent) | 0.00% | |
Estimated costs to complete future remediation efforts | $ 2 | $ 2 |
Open Projects | ||
Surety Bonds and Letters of Credit | ||
Payment and performance bonds outstanding | 8.7 | |
Completed Projects | ||
Surety Bonds and Letters of Credit | ||
Payment and performance bonds outstanding | 11.6 | |
Insurance Contracts | ||
Surety Bonds and Letters of Credit | ||
Outstanding letters of credit | 27.4 | |
Revenue Bonds | ||
Surety Bonds and Letters of Credit | ||
Outstanding letters of credit | $ 9.8 |
BUSINESS COMBINATIONS (Details)
BUSINESS COMBINATIONS (Details) - USD ($) $ in Thousands | Mar. 13, 2020 | Sep. 16, 2019 | Aug. 12, 2019 | May 01, 2019 | Mar. 28, 2020 |
Business Acquisition | |||||
Aggregate acquisitions' revenue | $ 9,100 | ||||
Aggregate acquisitions' operating profit | $ 400 | ||||
Quest Design | Construction | |||||
Business Acquisition | |||||
Purchase Price | $ 21,851 | ||||
Percentage of assets purchased (as a percent) | 100.00% | ||||
Intangible Assets | $ 18,219 | ||||
Net Tangible Assets | 3,632 | ||||
Acquired entity, prior year sales | $ 22,000 | ||||
Pallet USA | Industrial | |||||
Business Acquisition | |||||
Purchase Price | $ 12,422 | ||||
Percentage of assets purchased (as a percent) | 100.00% | ||||
Intangible Assets | $ 7,464 | ||||
Net Tangible Assets | 4,958 | ||||
Acquired entity, prior year sales | $ 18,000 | ||||
Northwest | Retail | |||||
Business Acquisition | |||||
Purchase Price | $ 17,809 | ||||
Percentage of assets purchased (as a percent) | 100.00% | ||||
Intangible Assets | $ 8,089 | ||||
Net Tangible Assets | 9,720 | ||||
Acquired entity, prior year sales | $ 14,000 | ||||
Wolverine | Industrial | |||||
Business Acquisition | |||||
Purchase Price | $ 7,168 | ||||
Percentage of assets purchased (as a percent) | 100.00% | ||||
Intangible Assets | $ 6,180 | ||||
Net Tangible Assets | 988 | ||||
Acquired entity, prior year sales | $ 5,000 |
SEGMENT REPORTING (Details)
SEGMENT REPORTING (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 28, 2020 | Mar. 30, 2019 | Dec. 28, 2019 | |
Segment Reporting | |||
NET SALES | $ 1,032,062 | $ 1,015,125 | |
Segment operating profit | 58,632 | 48,446 | |
Segment total assets | 1,882,982 | 1,821,398 | $ 1,889,477 |
Intersegment net sales | |||
Segment Reporting | |||
NET SALES | (109,668) | (105,593) | |
Corporate | |||
Segment Reporting | |||
NET SALES | (189) | 19 | |
Segment operating profit | 3,172 | 1,277 | |
Segment total assets | 325,265 | 314,172 | |
Retail | |||
Segment Reporting | |||
NET SALES | 352,161 | 333,100 | |
Segment operating profit | 15,512 | 11,031 | |
Segment total assets | 521,977 | 436,397 | |
Retail | Intersegment net sales | |||
Segment Reporting | |||
NET SALES | 29,858 | 29,571 | |
Industrial | |||
Segment Reporting | |||
NET SALES | 256,543 | 274,759 | |
Segment operating profit | 18,074 | 18,823 | |
Segment total assets | 363,508 | 410,383 | |
Industrial | Intersegment net sales | |||
Segment Reporting | |||
NET SALES | 11,220 | 11,062 | |
Construction | |||
Segment Reporting | |||
NET SALES | 381,155 | 365,137 | |
Segment operating profit | 17,135 | 15,267 | |
Segment total assets | 544,826 | 583,107 | |
Construction | Intersegment net sales | |||
Segment Reporting | |||
NET SALES | 15,423 | 11,831 | |
All Other | |||
Segment Reporting | |||
NET SALES | 42,392 | 42,110 | |
Segment operating profit | 4,739 | 2,048 | |
Segment total assets | 127,406 | $ 145,418 | |
All Other | Intersegment net sales | |||
Segment Reporting | |||
NET SALES | $ 53,167 | $ 53,129 |
SEGMENT REPORTING - Goodwill (D
SEGMENT REPORTING - Goodwill (Details) $ in Thousands | 3 Months Ended |
Mar. 28, 2020USD ($) | |
Goodwill | |
Goodwill, Beginning Balance | $ 229,536 |
2020 Acquisitions | 18,219 |
Foreign Exchange, Net | (1,296) |
Goodwill, Ending Balance | 246,459 |
Retail | |
Goodwill | |
Goodwill, Beginning Balance | 58,098 |
Goodwill, Ending Balance | 58,098 |
Industrial | |
Goodwill | |
Goodwill, Beginning Balance | 81,276 |
Goodwill, Ending Balance | 81,276 |
Construction | |
Goodwill | |
Goodwill, Beginning Balance | 82,911 |
2020 Acquisitions | 18,219 |
Goodwill, Ending Balance | 101,130 |
All Other | |
Goodwill | |
Goodwill, Beginning Balance | 7,251 |
Foreign Exchange, Net | (1,296) |
Goodwill, Ending Balance | $ 5,955 |
SEGMENT REPORTING - Assets (Det
SEGMENT REPORTING - Assets (Details) - USD ($) $ in Thousands | Mar. 28, 2020 | Dec. 28, 2019 | Mar. 30, 2019 |
Segment Reporting | |||
Segment assets | $ 1,882,982 | $ 1,889,477 | $ 1,821,398 |
Change in assets (as a percent) | (0.30%) | ||
Corporate | |||
Segment Reporting | |||
Segment assets | $ 325,265 | 314,172 | |
Change in assets (as a percent) | 3.50% | ||
Retail | |||
Segment Reporting | |||
Segment assets | $ 521,977 | 436,397 | |
Change in assets (as a percent) | 19.60% | ||
Industrial | |||
Segment Reporting | |||
Segment assets | $ 363,508 | 410,383 | |
Change in assets (as a percent) | (11.40%) | ||
Construction | |||
Segment Reporting | |||
Segment assets | $ 544,826 | 583,107 | |
Change in assets (as a percent) | (6.60%) | ||
All Other | |||
Segment Reporting | |||
Segment assets | $ 127,406 | $ 145,418 | |
Change in assets (as a percent) | (12.40%) |
INCOME TAXES (Details)
INCOME TAXES (Details) | 3 Months Ended | |
Mar. 28, 2020 | Mar. 30, 2019 | |
INCOME TAXES | ||
Effective income tax rate | 24.70% | 24.30% |
COMMON STOCK - Common Stock Iss
COMMON STOCK - Common Stock Issuances (Details) - $ / shares | 3 Months Ended | |
Mar. 28, 2020 | Mar. 30, 2019 | |
Common Stock | ||
Repurchase of common stock | 756,397 | |
Average Share Price | ||
Repurchase of common stock (dollars per share) | $ 38.62 | |
Stock Purchase Plan | ||
Common Stock | ||
Common stock issued | 10,000 | 10,000 |
Average Share Price | ||
Common stock issued (dollars per share) | $ 35.59 | $ 29.88 |
Stock Gift Program | ||
Common Stock | ||
Common stock issued | 1,000 | 2,000 |
Average Share Price | ||
Common stock issued (dollars per share) | $ 45.22 | $ 30.90 |
Stock Retainer Plan | ||
Common Stock | ||
Common stock issued | 1,000 | 1,000 |
Average Share Price | ||
Common stock issued (dollars per share) | $ 47.90 | $ 31 |
LTSIP | ||
Common Stock | ||
Common stock issued | 271,000 | 211,000 |
Average Share Price | ||
Common stock issued (dollars per share) | $ 47.51 | $ 30.83 |
Executive Stock Match Grants | ||
Common Stock | ||
Common stock issued | 80,000 | 109,000 |
Average Share Price | ||
Common stock issued (dollars per share) | $ 47.60 | $ 31.57 |
Deferred Compensation Plans | ||
Common Stock | ||
Common stock issued | 89,000 | 138,000 |
Average Share Price | ||
Common stock issued (dollars per share) | $ 54.68 | $ 32.23 |
Stock grant programs | ||
Common Stock | ||
Common stock issued | 350,000 | 320,000 |
Forfeitures | (3,000) | (3,000) |
Average Share Price | ||
Common stock issued (dollars per share) | $ 47.52 | $ 31.08 |