Document and Entity Information
Document and Entity Information | 3 Months Ended |
Mar. 27, 2021shares | |
Document and Entity Information | |
Document Type | 10-Q |
Document Quarterly Report | true |
Document Transition Report | false |
Document Period End Date | Mar. 27, 2021 |
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, no par value |
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) | 61,838,256 |
Current Fiscal Year End Date | --12-25 |
Document Fiscal Year Focus | 2021 |
Document Fiscal Period Focus | Q1 |
Entity Central Index Key | 0000912767 |
Amendment Flag | false |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 27, 2021 | Dec. 26, 2020 | Mar. 28, 2020 |
CURRENT ASSETS: | |||
Cash and cash equivalents | $ 44,399 | $ 436,507 | $ 32,129 |
Restricted cash | 629 | 101 | 724 |
Investments | 31,439 | 24,308 | 17,778 |
Accounts receivable, net | 808,105 | 470,504 | 460,821 |
Inventories: | |||
Raw materials | 438,762 | 316,481 | 263,857 |
Finished goods | 384,652 | 250,813 | 246,824 |
Total inventories | 823,414 | 567,294 | 510,681 |
Refundable income taxes | 5,836 | 2,624 | |
Other current assets | 29,072 | 33,812 | 36,152 |
TOTAL CURRENT ASSETS | 1,737,058 | 1,538,362 | 1,060,909 |
DEFERRED INCOME TAXES | 2,290 | 2,413 | 2,145 |
RESTRICTED INVESTMENTS | 17,209 | 17,565 | 16,111 |
RIGHT OF USE ASSETS | 98,404 | 77,245 | 81,065 |
OTHER ASSETS | 27,358 | 20,298 | 25,198 |
GOODWILL | 314,189 | 252,193 | 246,459 |
INDEFINITE-LIVED INTANGIBLE ASSETS | 7,401 | 7,401 | 7,288 |
OTHER INTANGIBLE ASSETS, NET | 93,812 | 72,252 | 46,232 |
PROPERTY, PLANT AND EQUIPMENT: | |||
Property, plant and equipment | 1,060,893 | 974,497 | 906,171 |
Less accumulated depreciation and amortization | (572,526) | (557,335) | (508,596) |
PROPERTY, PLANT AND EQUIPMENT, NET | 488,367 | 417,162 | 397,575 |
TOTAL ASSETS | 2,786,088 | 2,404,891 | 1,882,982 |
CURRENT LIABILITIES: | |||
Cash overdraft | 47,140 | ||
Accounts payable | 299,398 | 211,518 | 162,039 |
Accrued liabilities: | |||
Compensation and benefits | 137,208 | 166,478 | 92,504 |
Income taxes | 25,565 | ||
Other | 78,560 | 69,104 | 55,760 |
Current portion of lease liability | 23,051 | 16,549 | 16,180 |
Current portion of long-term debt | 109 | 100 | 2,772 |
TOTAL CURRENT LIABILITIES | 611,031 | 463,749 | 329,255 |
LONG-TERM DEBT | 426,310 | 311,607 | 160,550 |
LEASE LIABILITY | 76,408 | 61,509 | 64,937 |
DEFERRED INCOME TAXES | 34,940 | 25,266 | 22,799 |
OTHER LIABILITIES | 50,856 | 59,608 | 33,159 |
TOTAL LIABILITIES | 1,199,545 | 921,739 | 610,700 |
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, 61,838,256, 61,205,780 and 61,102,481 | 61,838 | 61,206 | 61,102 |
Additional paid-in capital | 231,111 | 218,224 | 211,724 |
Retained earnings | 1,276,722 | 1,182,680 | 998,996 |
Accumulated other comprehensive loss | (3,464) | (1,794) | (11,110) |
Total controlling interest shareholders' equity | 1,566,207 | 1,460,316 | 1,260,712 |
Noncontrolling interest | 20,336 | 22,836 | 11,570 |
TOTAL SHAREHOLDERS' EQUITY | 1,586,543 | 1,483,152 | 1,272,282 |
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ 2,786,088 | $ 2,404,891 | $ 1,882,982 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Mar. 27, 2021 | Dec. 26, 2020 | Mar. 28, 2020 |
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) | 61,838,256 | 61,205,780 | 61,102,481 |
Common stock, shares outstanding (in shares) | 61,838,256 | 61,205,780 | 61,102,481 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS AND COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 27, 2021 | Mar. 28, 2020 | |
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS AND COMPREHENSIVE INCOME | ||
NET SALES | $ 1,825,004 | $ 1,032,062 |
COST OF GOODS SOLD | 1,538,450 | 864,826 |
GROSS PROFIT | 286,554 | 167,236 |
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES | 150,098 | 109,339 |
OTHER LOSSES (GAINS), NET | (1,031) | (735) |
EARNINGS FROM OPERATIONS | 137,487 | 58,632 |
INTEREST EXPENSE | 3,151 | 1,908 |
INTEREST AND INVESTMENT (INCOME) LOSS | (2,296) | 2,832 |
EQUITY IN EARNINGS OF INVESTEE | 630 | |
NET INTEREST EXPENSE | 1,485 | 4,740 |
EARNINGS BEFORE INCOME TAXES | 136,002 | 53,892 |
INCOME TAXES | 31,751 | 13,322 |
NET EARNINGS | 104,251 | 40,570 |
LESS NET EARNINGS ATTRIBUTABLE TO NONCONTROLLING INTEREST | (940) | (411) |
NET EARNINGS ATTRIBUTABLE TO CONTROLLING INTEREST | $ 103,311 | $ 40,159 |
EARNINGS PER SHARE - BASIC (USD per share) | $ 1.67 | $ 0.65 |
EARNINGS PER SHARE - DILUTED (USD per share) | $ 1.67 | $ 0.65 |
OTHER COMPREHENSIVE INCOME: | ||
NET EARNINGS | $ 104,251 | $ 40,570 |
OTHER COMPREHENSIVE GAIN (LOSS) | (2,196) | (8,556) |
COMPREHENSIVE INCOME | 102,055 | 32,014 |
LESS COMPREHENSIVE INCOME ATTRIBUTABLE TO NONCONTROLLING INTEREST | (414) | 1,924 |
COMPREHENSIVE INCOME ATTRIBUTABLE TO CONTROLLING INTEREST | $ 101,641 | $ 33,938 |
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. 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 loss on debt securities | (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 | |||
Net 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 |
Beginning balance at Dec. 26, 2020 | 61,206 | 218,224 | 1,182,680 | (1,794) | 22,836 | 1,483,152 |
Increase (Decrease) in Stockholders' Equity | ||||||
Net earnings | 103,311 | 940 | 104,251 | |||
Foreign currency translation adjustment | (374) | (526) | (900) | |||
Unrealized loss on debt securities | (1,296) | (1,296) | ||||
Distributions to noncontrolling interest | (2,914) | (2,914) | ||||
Cash dividends | (9,274) | (9,274) | ||||
Issuance of shares under employee stock purchase plans | 6 | 357 | 363 | |||
Net issuance of shares under stock grant programs | 537 | 3,888 | 5 | 4,430 | ||
Issuance of shares under deferred compensation plans | 89 | (89) | ||||
Expense associated with share-based compensation arrangements | 2,936 | 2,936 | ||||
Accrued expense under deferred compensation plans | 5,795 | 5,795 | ||||
Ending balance at Mar. 27, 2021 | $ 61,838 | $ 231,111 | $ 1,276,722 | $ (3,464) | $ 20,336 | $ 1,586,543 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Parenthetical) - $ / shares | 3 Months Ended | |
Mar. 27, 2021 | Mar. 28, 2020 | |
Increase (Decrease) in Stockholders' Equity | ||
Cash dividends per share (USD per share) | $ 0.15 | $ 0.125 |
Issuance of shares under employee stock plans (in shares) | 5,816 | 10,549 |
Issuance of shares under stock grant programs (in shares) | 536,970 | 350,124 |
Issuance of shares under deferred compensation plans (in shares) | 89,690 | 89,616 |
Repurchase of shares (in shares) | 756,397 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 27, 2021 | Mar. 28, 2020 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net earnings | $ 104,251 | $ 40,570 |
Adjustments to reconcile net earnings to net cash from operating activities: | ||
Depreciation | 18,733 | 15,717 |
Amortization of intangibles | 3,998 | 1,571 |
Expense associated with share-based and grant compensation arrangements | 2,981 | 1,444 |
Deferred income taxes | 142 | 286 |
Unrealized (gain) loss on investments and other | (1,754) | 3,173 |
Equity in earnings of investee | 630 | |
Net (gain) on disposition of assets | (532) | (285) |
Changes in: | ||
Accounts receivable | (253,323) | (94,253) |
Inventories | (207,768) | (25,783) |
Accounts payable and cash overdraft | 121,892 | 20,047 |
Accrued liabilities and other | 14,090 | (8,648) |
NET CASH USED IN OPERATING ACTIVITIES | (196,660) | (46,161) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchases of property, plant and equipment | (34,656) | (27,286) |
Proceeds from sale of property, plant and equipment | 5,062 | 409 |
Acquisitions and purchases of non-controlling interest, net of cash received | (261,133) | (18,487) |
Purchases of investments | (8,738) | (14,052) |
Proceeds from sale of investments | 3,381 | 11,260 |
Other | (414) | (54) |
NET CASH USED IN INVESTING ACTIVITIES | (296,498) | (48,210) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Borrowings under revolving credit facilities | 236,280 | 6,759 |
Repayments under revolving credit facilities | (121,570) | (6,498) |
Contingent consideration payments and other | (627) | (3,074) |
Proceeds from issuance of common stock | 363 | 319 |
Dividends paid to shareholders | (9,274) | (7,730) |
Distributions to noncontrolling interest | (2,914) | (299) |
Repurchase of common stock | (29,212) | |
Other | (331) | 12 |
NET CASH FROM (USED IN) FINANCING ACTIVITIES | 101,927 | (39,723) |
Effect of exchange rate changes on cash | (349) | (1,719) |
NET CHANGE IN CASH AND CASH EQUIVALENTS | (391,580) | (135,813) |
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, BEGINNING OF YEAR | 436,608 | 168,666 |
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, END OF PERIOD | $ 45,028 | $ 32,853 |
CONDENSED CONSOLIDATED STATEM_5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - SUPPLEMENTAL (Parenthetical) - USD ($) $ in Thousands | Mar. 27, 2021 | Dec. 26, 2020 | Mar. 28, 2020 |
RECONCILIATION OF CASH AND CASH EQUIVALENTS AND RESTRICTED CASH: | |||
Cash and cash equivalents, beginning of period | $ 436,507 | $ 32,129 | $ 168,336 |
Restricted cash, beginning of period | 101 | 724 | 330 |
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, BEGINNING OF YEAR | 436,608 | 32,853 | 168,666 |
Cash and cash equivalents, end of period | 44,399 | 436,507 | 32,129 |
Restricted cash, end of period | 629 | 101 | 724 |
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, END OF PERIOD | $ 45,028 | $ 436,608 | $ 32,853 |
CONDENSED CONSOLIDATED STATEM_6
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - SUPPLEMENTAL AND NON-CASH FINANCING ACTIVITIES (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 27, 2021 | Mar. 28, 2020 | |
SUPPLEMENTAL INFORMATION: | ||
Interest paid | $ 2,694 | $ 374 |
Income taxes paid | 249 | 2,307 |
NON-CASH FINANCING ACTIVITIES: | ||
Common stock issued under deferred compensation plans | $ 5,359 | $ 4,900 |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 3 Months Ended |
Mar. 27, 2021 | |
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. Certain prior year amounts have been reclassified to conform to the current year presentation. 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 26, 2020. 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 28, 2020 balances in the accompanying unaudited condensed consolidated balance sheets. |
FAIR VALUE
FAIR VALUE | 3 Months Ended |
Mar. 27, 2021 | |
FAIR VALUE | |
FAIR VALUE | B. FAIR VALUE We apply the provisions of ASC 820, Fair Value Measurements and Disclosures March 27, 2021 March 28, 2020 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 (Level 1) (Level 2) (Level 3) Total (Level 1) (Level 2) (Level 3) Total Money market funds $ 19 $ 1,127 $ — $ 1,146 $ 29,561 $ 837 $ — $ 30,398 Fixed income funds 244 16,264 — 16,508 237 15,124 — 15,361 Equity securities 18,496 — — 18,496 9,089 — — 9,089 Alternative investments — — 2,126 2,126 — — 1,960 1,960 Mutual funds: Domestic stock funds 9,388 — — 9,388 5,204 — — 5,204 International stock funds 1,395 — — 1,395 947 — — 947 Target funds 21 — — 21 242 — — 242 Bond funds 145 — — 145 222 — — 222 Alternative funds 496 — — 496 921 — — 921 Total mutual funds 11,445 — — 11,445 7,536 — — 7,536 Total $ 30,204 $ 17,391 $ 2,126 $ 49,721 $ 46,423 $ 15,961 $ 1,960 $ 64,344 Assets at fair value $ 30,204 $ 17,391 $ 2,126 $ 49,721 $ 46,423 $ 15,961 $ 1,960 $ 64,344 From the assets measured at fair value as of March 27, 2021, listed in the table above, $31.4 million of mutual funds, equity securities, and alternative investments are held in Investments, $0.5 million of money market funds are held in Cash and Cash Equivalents, $0.6 million of money market and mutual funds are held in Other Assets for our deferred compensation plan, and $16.9 million of fixed income funds and $0.3 million of money markets funds are held in Restricted Investments. We maintain money market, mutual funds, bonds, and/or equity securities 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 $47.9 million as of March 27, 2021, which has been included in the aforementioned table of total investments. This portfolio consists of domestic and international equity securities, 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 27, 2021 March 28, 2020 Unrealized Unrealized Cost Gain/(Loss) Fair Value Cost Gain/(Loss) Fair Value Fixed Income $ 15,867 $ 642 $ 16,509 $ 15,257 $ 104 $ 15,361 Equity 14,664 3,832 18,496 9,690 (601) 9,089 Mutual Funds 8,769 2,049 10,818 7,298 (569) 6,729 Alternative Investments 1,929 197 2,126 1,834 126 1,960 Total $ 41,229 $ 6,720 $ 47,949 $ 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 mutual fund investments consist of domestic and international stock. Our alternative investments consist of a private real estate income trust which is valued as a Level 3 asset. The net unrealized gain was $6.7 million. Carrying amounts above are recorded in the investments and restricted investments line items within the balance sheet as of March 27, 2021 and March 28, 2020. |
REVENUE RECOGNITION
REVENUE RECOGNITION | 3 Months Ended |
Mar. 27, 2021 | |
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 The following table presents our net sales disaggregated by revenue source (in thousands): March 27, March 28, 2021 2020 % Change FOB Shipping Point Revenue $ 1,797,399 $ 999,262 79.9% Construction Contract Revenue 27,605 32,800 (15.8)% Total Net Sales $ 1,825,004 $ 1,032,062 76.8% 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 27, December 26, March 28, 2021 2020 2020 Cost and Earnings in Excess of Billings $ 3,408 $ 4,169 $ 5,744 Billings in Excess of Cost and Earnings 9,396 11,530 9,920 |
EARNINGS PER SHARE
EARNINGS PER SHARE | 3 Months Ended |
Mar. 27, 2021 | |
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 27, March 28, 2021 2020 Numerator: Net earnings attributable to controlling interest $ 103,311 $ 40,159 Adjustment for earnings allocated to non-vested restricted common stock (3,175) (1,059) Net earnings for calculating EPS $ 100,136 $ 39,100 Denominator: Weighted average shares outstanding 61,889 61,842 Adjustment for non-vested restricted common stock (1,902) (1,630) Shares for calculating basic EPS 59,987 60,212 Effect of dilutive restricted common stock 28 18 Shares for calculating diluted EPS 60,015 60,230 Net earnings per share: Basic $ 1.67 $ 0.65 Diluted $ 1.67 $ 0.65 |
COMMITMENTS, CONTINGENCIES, AND
COMMITMENTS, CONTINGENCIES, AND GUARANTEES | 3 Months Ended |
Mar. 27, 2021 | |
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 discount rate, have been established to cover remediation activities at wood preservation facilities in Stockertown, PA; Elizabeth City, NC; and Auburndale, FL. In addition, a reserve was established for our facility in Thornton, CA to remove certain lead containing materials which existed on the property at the time of purchase. On a consolidated basis, we have reserved approximately $1.9 million on March 27, 2021 and $2.0 million on March 28, 2020, respectively, representing the estimated costs to complete future remediation efforts. These amounts have not been reduced by an insurance receivable. In addition, on March 27, 2021, 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 27, 2021, we had outstanding purchase commitments on commenced capital projects of approximately $41.3 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 27, 2021, we had approximately $27.0 million outstanding payment and performance bonds for open projects. We had approximately $4.0 million in payment and performance bonds outstanding for completed projects which are still under warranty. On March 27, 2021, we had outstanding letters of credit totaling $50.9 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 27, 2021, we have irrevocable letters of credit outstanding totaling approximately $43.8 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 $7.1 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, 2018 and 2020 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 2021 which would require us to recognize a liability on our balance sheet. |
BUSINESS COMBINATIONS
BUSINESS COMBINATIONS | 3 Months Ended |
Mar. 27, 2021 | |
BUSINESS COMBINATIONS | |
BUSINESS COMBINATIONS | F. BUSINESS COMBINATIONS We completed the following acquisitions in 2021 and since the end of March 2020, 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 1, 2021 $4,724 $ 4,176 $ 548 Other J.C. Gilmore Pty Ltd (Gilmores) Founded in 1988 and operating from its distribution facility in Port Melbourne, Australia, Gilmores is a leading distributor in the industrial and construction industries of packaging tapes, stretch films, packaging equipment, strapping, construction protection products and other items, with 2020 sales of $15 million AUD ($10 million USD). December 28, 2020 $258,770 $ 82,546 $ 176,224 Retail/Industrial PalletOne, Inc. (PalletOne) Based in Bartow, Florida, PalletOne is a leading manufacturer of new pallets in the U.S., with 17 pallet manufacturing facilities in the southern and eastern regions of the country. The company also supplies other specialized industrial packaging, including custom bins and crates, and its Sunbelt Forest Products (Sunbelt) subsidiary operates five pressure-treating facilities in the Southeastern U.S. PalletOne and its affiliates had 2019 and 2020 sales of November 10, 2020 $27,274 $ 17,894 $ 9,380 Construction Atlantic Prefab, Inc.; Exterior Designs, LLC; and Patriot Building Systems, LLC Based in Wilton, New Hampshire, Atlantic Prefab produces prefabricated steel wall panels and light gauge metal trusses. The company’s steel component and prefinished wall panel lines are new, value-added product additions for UFP Construction that help shorten project timelines. Exterior Designs is a leading installer of siding and exterior cladding such as fiber cement, ACM (aluminum composite material) panels, phenolic panels, and EIFS (exterior insulation and finish systems). The company is based in Londonderry, New Hampshire, and serves commercial and multi-family clients throughout the Northeast. Also based in Londonderry, Patriot Building Systems provides commercial and multi-family framing services in the Northeast and will focus on markets not currently served by companies of UFP Industries. The companies had combined annual sales of approximately $28 million. October 1, 2020 $7,936 $ 7,222 $ 714 Retail Fire Retardant Chemical Technologies, LLC (FRCT) Founded in 2014 and based in Matthews, North Carolina, FRCT’s business includes a research and development laboratory specializing in developing and testing a wide range of high-performance chemicals, including fire retardants and water repellants. The company had annual sales of approximately $6.4 million. September 30, 2020 $4,465 $ 4,607 $ (142) Other Enwrap Logistic & Packaging S.r.l. (Enwrap) Enwrap is a newly formed company dedicated to the logistics and packaging business of its predecessor, Job Service S.p.A. Headquartered in Milan, Italy, Enwrap provides high-value, mixed material industrial packaging and logistics services through eight locations in Italy. These locations generated annual sales of approximately $14 million. Net Company Acquisition Intangible Tangible Operating Name Date Purchase Price Assets Assets Segment July 14, 2020 $19,136 $ 13,098 $ 6,038 Industrial T&R Lumber Company ("T&R") A manufacturer and distributor of a range of products used primarily by nurseries, including plastic growing containers, pots and trays; wooden stakes; trellises; tree boxes; shipping racks; and other nursery supplies based in Rancho Cucamonga, California. T&R had annual sales of approximately $31 million. The acquisition of T&R will allow us to leverage their expertise using our national manufacturing capacity to grow our agricultural product offerings and customer base across the country. The intangible assets for the above acquisitions have not been finalized and allocated to their respective identifiable asset and goodwill accounts. In aggregate, acquisitions completed since the end of March 2020 and not consolidated with other operations contributed approximately $242.8 million in net sales and $14.2 million in operating profits during the first quarter of 2021. |
SEGMENT REPORTING
SEGMENT REPORTING | 3 Months Ended |
Mar. 27, 2021 | |
SEGMENT REPORTING | |
SEGMENT REPORTING | G. SEGMENT REPORTING The Company operates manufacturing, treating and distribution facilities internationally, but primarily in the United States. The business segments align with the following markets: UFP Retail Solutions, UFP Construction and UFP Industrial. The Company manages the operations of its individual locations primarily through a 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. In the case of locations which serve multiple segments, results are allocated and accounted for by segment. 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. Total assets of the Corporate column include unallocated cash and cash equivalents, certain prepaid assets, certain property, equipment and other assets pertaining to the centralized activities of Corporate, UFP Real Estate, Inc., and UFP Transportation Ltd. The tables below are presented in thousands: Three Months Ended March 27, 2021 Retail Industrial Construction All Other Corporate Total Net sales to outside customers $ 759,021 $ 448,874 $ 559,530 $ 55,577 $ 2,002 $ 1,825,004 Intersegment net sales 47,586 17,906 14,461 97,396 (177,349) — Segment operating profit 53,545 40,410 33,018 7,978 2,536 137,487 Three Months Ended March 28, 2020 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 The following table presents goodwill by segment as of March 27, 2021, and December 26, 2020 (in thousands): Retail Industrial Construction All Other Corporate Total Balance as of December 26, 2020 $ 61,943 $ 87,827 $ 90,729 $ 11,694 $ — $ 252,193 2021 Acquisitions 18,178 43,844 — 4,176 — 66,198 2021 Purchase Accounting Adjustments — (2,291) (1,653) (145) — (4,089) Foreign Exchange, Net — — (113) — (113) Balance as of March 27, 2021 $ 80,121 $ 129,380 $ 89,076 $ 15,612 $ — $ 314,189 The following table presents total assets by segment as of March 27, 2021, and December 26, 2020 (in thousands). Total Assets by Segment March 27, December 26, Segment Classification 2021 2020 % Change Retail $ 944,637 $ 510,464 85.1 % Industrial 657,572 416,487 57.9 Construction 535,527 510,972 4.8 All Other 214,815 196,856 9.1 Corporate 433,537 770,112 (43.7) Total Assets $ 2,786,088 $ 2,404,891 15.9 % |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Mar. 27, 2021 | |
INCOME TAXES | |
INCOME TAXES | H. INCOME TAXES Effective tax rates differ from statutory federal income tax rates, primarily due to provisions for foreign, state and local income taxes and permanent tax differences. Our effective tax rate was 23.3% in the first quarter of 2021 compared to 24.7% for same period in 2020. |
COMMON STOCK
COMMON STOCK | 3 Months Ended |
Mar. 27, 2021 | |
COMMON STOCK | |
COMMON STOCK | I. COMMON STOCK Below is a summary of common stock issuances for the first three months of 2021 and 2020 (in thousands, except average share price): March 27, 2021 Share Issuance Activity Common Stock Average Share Price Shares issued under the employee stock purchase plan 6 $ 73.28 Shares issued under the employee stock gift program 1 79.91 Shares issued under the director retainer stock program 2 56.80 Shares issued under the bonus plan 468 53.68 Shares issued under the executive stock match grants plan 77 60.24 Forfeitures (11) Total shares issued under stock grant programs 537 $ 54.63 Shares issued under the deferred compensation plans 89 $ 59.75 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 bonus plan 271 47.51 Shares issued under the executive stock match grants plan 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 2021, we did not repurchase any of our shares of common stock. 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. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Mar. 27, 2021 | |
SUBSEQUENT EVENTS | |
Subsequent Events | J. SUBSEQUENT EVENTS On April 12, 2021, Sunbelt Forest Products Corporation, a wholly owned subsidiary, closed on its agreement to purchase the net operating assets of Spartanburg Forest Products, Inc. and its affiliates. The purchase price for Spartanburg’s property, plant and equipment is approximately $16.5 million. Sunbelt also purchased Spartanburg’s net working capital for an amount equal to the net book value determined on the date of closing, which totaled approximately $146.5 million. Spartanburg and its affiliates are a wood treating operation in the southeastern U.S., with approximately 150 employees and operations in five states. On April 19, 2021, UFP Craft and Hobby, LLC, a wholly owned subsidiary, closed on its agreement to purchase the net operating assets of Walnut Hollow Farm, Inc., for $8.7 million. Walnut Hollow Farm, located in Wisconsin, is engaged in the business of designing, manufacturing, selling, and distributing wood products, tools, and accessories for the craft and hobby, outdoor sportsman art, personalized home décor, and hardware categories. On April 29, 2021, UFP Construction, LLC, a wholly owned subsidiary, closed on its agreement to purchase the net operating assets of Endurable Building Products, LLC for $10.5 million. Endurable Building Products, based near Minneapolis, Minnesota, is a leading manufacturer of customized structural aluminum systems and products for exterior purposes, such as deck framing, balconies, sunshades, railings and stairs. |
BASIS OF PRESENTATION (Policies
BASIS OF PRESENTATION (Policies) | 3 Months Ended |
Mar. 27, 2021 | |
BASIS OF PRESENTATION | |
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 |
FAIR VALUE (Tables)
FAIR VALUE (Tables) | 3 Months Ended |
Mar. 27, 2021 | |
FAIR VALUE | |
Assets measured at fair value | Assets measured at fair value are as follows (in thousands): March 27, 2021 March 28, 2020 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 (Level 1) (Level 2) (Level 3) Total (Level 1) (Level 2) (Level 3) Total Money market funds $ 19 $ 1,127 $ — $ 1,146 $ 29,561 $ 837 $ — $ 30,398 Fixed income funds 244 16,264 — 16,508 237 15,124 — 15,361 Equity securities 18,496 — — 18,496 9,089 — — 9,089 Alternative investments — — 2,126 2,126 — — 1,960 1,960 Mutual funds: Domestic stock funds 9,388 — — 9,388 5,204 — — 5,204 International stock funds 1,395 — — 1,395 947 — — 947 Target funds 21 — — 21 242 — — 242 Bond funds 145 — — 145 222 — — 222 Alternative funds 496 — — 496 921 — — 921 Total mutual funds 11,445 — — 11,445 7,536 — — 7,536 Total $ 30,204 $ 17,391 $ 2,126 $ 49,721 $ 46,423 $ 15,961 $ 1,960 $ 64,344 Assets at fair value $ 30,204 $ 17,391 $ 2,126 $ 49,721 $ 46,423 $ 15,961 $ 1,960 $ 64,344 |
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 27, 2021 March 28, 2020 Unrealized Unrealized Cost Gain/(Loss) Fair Value Cost Gain/(Loss) Fair Value Fixed Income $ 15,867 $ 642 $ 16,509 $ 15,257 $ 104 $ 15,361 Equity 14,664 3,832 18,496 9,690 (601) 9,089 Mutual Funds 8,769 2,049 10,818 7,298 (569) 6,729 Alternative Investments 1,929 197 2,126 1,834 126 1,960 Total $ 41,229 $ 6,720 $ 47,949 $ 34,079 $ (940) $ 33,139 |
REVENUE RECOGNITION (Tables)
REVENUE RECOGNITION (Tables) | 3 Months Ended |
Mar. 27, 2021 | |
REVENUE RECOGNITION | |
Schedule of Disaggregation of revenue | The following table presents our net sales disaggregated by revenue source (in thousands): March 27, March 28, 2021 2020 % Change FOB Shipping Point Revenue $ 1,797,399 $ 999,262 79.9% Construction Contract Revenue 27,605 32,800 (15.8)% Total Net Sales $ 1,825,004 $ 1,032,062 76.8% |
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 27, December 26, March 28, 2021 2020 2020 Cost and Earnings in Excess of Billings $ 3,408 $ 4,169 $ 5,744 Billings in Excess of Cost and Earnings 9,396 11,530 9,920 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 3 Months Ended |
Mar. 27, 2021 | |
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 27, March 28, 2021 2020 Numerator: Net earnings attributable to controlling interest $ 103,311 $ 40,159 Adjustment for earnings allocated to non-vested restricted common stock (3,175) (1,059) Net earnings for calculating EPS $ 100,136 $ 39,100 Denominator: Weighted average shares outstanding 61,889 61,842 Adjustment for non-vested restricted common stock (1,902) (1,630) Shares for calculating basic EPS 59,987 60,212 Effect of dilutive restricted common stock 28 18 Shares for calculating diluted EPS 60,015 60,230 Net earnings per share: Basic $ 1.67 $ 0.65 Diluted $ 1.67 $ 0.65 |
BUSINESS COMBINATIONS (Tables)
BUSINESS COMBINATIONS (Tables) | 3 Months Ended |
Mar. 27, 2021 | |
BUSINESS COMBINATIONS | |
Business Acquisitions Accounted for Using Purchase Method | We completed the following acquisitions in 2021 and since the end of March 2020, 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 1, 2021 $4,724 $ 4,176 $ 548 Other J.C. Gilmore Pty Ltd (Gilmores) Founded in 1988 and operating from its distribution facility in Port Melbourne, Australia, Gilmores is a leading distributor in the industrial and construction industries of packaging tapes, stretch films, packaging equipment, strapping, construction protection products and other items, with 2020 sales of $15 million AUD ($10 million USD). December 28, 2020 $258,770 $ 82,546 $ 176,224 Retail/Industrial PalletOne, Inc. (PalletOne) Based in Bartow, Florida, PalletOne is a leading manufacturer of new pallets in the U.S., with 17 pallet manufacturing facilities in the southern and eastern regions of the country. The company also supplies other specialized industrial packaging, including custom bins and crates, and its Sunbelt Forest Products (Sunbelt) subsidiary operates five pressure-treating facilities in the Southeastern U.S. PalletOne and its affiliates had 2019 and 2020 sales of November 10, 2020 $27,274 $ 17,894 $ 9,380 Construction Atlantic Prefab, Inc.; Exterior Designs, LLC; and Patriot Building Systems, LLC Based in Wilton, New Hampshire, Atlantic Prefab produces prefabricated steel wall panels and light gauge metal trusses. The company’s steel component and prefinished wall panel lines are new, value-added product additions for UFP Construction that help shorten project timelines. Exterior Designs is a leading installer of siding and exterior cladding such as fiber cement, ACM (aluminum composite material) panels, phenolic panels, and EIFS (exterior insulation and finish systems). The company is based in Londonderry, New Hampshire, and serves commercial and multi-family clients throughout the Northeast. Also based in Londonderry, Patriot Building Systems provides commercial and multi-family framing services in the Northeast and will focus on markets not currently served by companies of UFP Industries. The companies had combined annual sales of approximately $28 million. October 1, 2020 $7,936 $ 7,222 $ 714 Retail Fire Retardant Chemical Technologies, LLC (FRCT) Founded in 2014 and based in Matthews, North Carolina, FRCT’s business includes a research and development laboratory specializing in developing and testing a wide range of high-performance chemicals, including fire retardants and water repellants. The company had annual sales of approximately $6.4 million. September 30, 2020 $4,465 $ 4,607 $ (142) Other Enwrap Logistic & Packaging S.r.l. (Enwrap) Enwrap is a newly formed company dedicated to the logistics and packaging business of its predecessor, Job Service S.p.A. Headquartered in Milan, Italy, Enwrap provides high-value, mixed material industrial packaging and logistics services through eight locations in Italy. These locations generated annual sales of approximately $14 million. Net Company Acquisition Intangible Tangible Operating Name Date Purchase Price Assets Assets Segment July 14, 2020 $19,136 $ 13,098 $ 6,038 Industrial T&R Lumber Company ("T&R") A manufacturer and distributor of a range of products used primarily by nurseries, including plastic growing containers, pots and trays; wooden stakes; trellises; tree boxes; shipping racks; and other nursery supplies based in Rancho Cucamonga, California. T&R had annual sales of approximately $31 million. The acquisition of T&R will allow us to leverage their expertise using our national manufacturing capacity to grow our agricultural product offerings and customer base across the country. |
SEGMENT REPORTING (Tables)
SEGMENT REPORTING (Tables) | 3 Months Ended |
Mar. 27, 2021 | |
SEGMENT REPORTING | |
Segment Reporting | The tables below are presented in thousands: Three Months Ended March 27, 2021 Retail Industrial Construction All Other Corporate Total Net sales to outside customers $ 759,021 $ 448,874 $ 559,530 $ 55,577 $ 2,002 $ 1,825,004 Intersegment net sales 47,586 17,906 14,461 97,396 (177,349) — Segment operating profit 53,545 40,410 33,018 7,978 2,536 137,487 Three Months Ended March 28, 2020 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 |
Schedule of Goodwill by Segment | The following table presents goodwill by segment as of March 27, 2021, and December 26, 2020 (in thousands): Retail Industrial Construction All Other Corporate Total Balance as of December 26, 2020 $ 61,943 $ 87,827 $ 90,729 $ 11,694 $ — $ 252,193 2021 Acquisitions 18,178 43,844 — 4,176 — 66,198 2021 Purchase Accounting Adjustments — (2,291) (1,653) (145) — (4,089) Foreign Exchange, Net — — (113) — (113) Balance as of March 27, 2021 $ 80,121 $ 129,380 $ 89,076 $ 15,612 $ — $ 314,189 |
Schedule of assets by segment | The following table presents total assets by segment as of March 27, 2021, and December 26, 2020 (in thousands). Total Assets by Segment March 27, December 26, Segment Classification 2021 2020 % Change Retail $ 944,637 $ 510,464 85.1 % Industrial 657,572 416,487 57.9 Construction 535,527 510,972 4.8 All Other 214,815 196,856 9.1 Corporate 433,537 770,112 (43.7) Total Assets $ 2,786,088 $ 2,404,891 15.9 % |
COMMON STOCK (Tables)
COMMON STOCK (Tables) | 3 Months Ended |
Mar. 27, 2021 | |
COMMON STOCK | |
Schedule of common stock issuances | Below is a summary of common stock issuances for the first three months of 2021 and 2020 (in thousands, except average share price): March 27, 2021 Share Issuance Activity Common Stock Average Share Price Shares issued under the employee stock purchase plan 6 $ 73.28 Shares issued under the employee stock gift program 1 79.91 Shares issued under the director retainer stock program 2 56.80 Shares issued under the bonus plan 468 53.68 Shares issued under the executive stock match grants plan 77 60.24 Forfeitures (11) Total shares issued under stock grant programs 537 $ 54.63 Shares issued under the deferred compensation plans 89 $ 59.75 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 bonus plan 271 47.51 Shares issued under the executive stock match grants plan 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 |
FAIR VALUE - Asset Measured at
FAIR VALUE - Asset Measured at Fair Value (Details) - USD ($) $ in Thousands | Mar. 27, 2021 | Mar. 28, 2020 |
Money market funds | Cash and Cash Equivalents | ||
Fair Value | ||
Investments at fair value | $ 500 | |
Money market funds | Restricted Investments | ||
Fair Value | ||
Investments at fair value | 300 | |
Fixed Income | Restricted Investments | ||
Fair Value | ||
Investments at fair value | 16,900 | |
Mutual funds, equity and alternative investments | Investments | ||
Fair Value | ||
Investments at fair value | 31,400 | |
Money market and mutual funds | Other Assets | ||
Fair Value | ||
Investments at fair value | 600 | |
Ardellis Insurance Ltd. | ||
Fair Value | ||
Total Fair Value | 47,949 | $ 33,139 |
Estimate of Fair Value Measurement | Recurring | ||
Fair Value | ||
Investments at fair value | 49,721 | 64,344 |
Assets at fair value | 49,721 | 64,344 |
Estimate of Fair Value Measurement | Recurring | Money market funds | ||
Fair Value | ||
Investments at fair value | 1,146 | 30,398 |
Estimate of Fair Value Measurement | Recurring | Fixed Income | ||
Fair Value | ||
Investments at fair value | 16,508 | 15,361 |
Estimate of Fair Value Measurement | Recurring | Equity | ||
Fair Value | ||
Investments at fair value | 18,496 | 9,089 |
Estimate of Fair Value Measurement | Recurring | Alternative Investments | ||
Fair Value | ||
Investments at fair value | 2,126 | 1,960 |
Estimate of Fair Value Measurement | Recurring | Mutual Fund | ||
Fair Value | ||
Investments at fair value | 11,445 | 7,536 |
Estimate of Fair Value Measurement | Recurring | Domestic stock | ||
Fair Value | ||
Investments at fair value | 9,388 | 5,204 |
Estimate of Fair Value Measurement | Recurring | International stock funds | ||
Fair Value | ||
Investments at fair value | 1,395 | 947 |
Estimate of Fair Value Measurement | Recurring | Target funds | ||
Fair Value | ||
Investments at fair value | 21 | 242 |
Estimate of Fair Value Measurement | Recurring | Bond funds | ||
Fair Value | ||
Investments at fair value | 145 | 222 |
Estimate of Fair Value Measurement | Recurring | Alternative funds | ||
Fair Value | ||
Investments at fair value | 496 | 921 |
Estimate of Fair Value Measurement | Recurring | Quoted Prices in Active Markets (Level 1) | ||
Fair Value | ||
Investments at fair value | 30,204 | 46,423 |
Assets at fair value | 30,204 | 46,423 |
Estimate of Fair Value Measurement | Recurring | Quoted Prices in Active Markets (Level 1) | Money market funds | ||
Fair Value | ||
Investments at fair value | 19 | 29,561 |
Estimate of Fair Value Measurement | Recurring | Quoted Prices in Active Markets (Level 1) | Fixed Income | ||
Fair Value | ||
Investments at fair value | 244 | 237 |
Estimate of Fair Value Measurement | Recurring | Quoted Prices in Active Markets (Level 1) | Equity | ||
Fair Value | ||
Investments at fair value | 18,496 | 9,089 |
Estimate of Fair Value Measurement | Recurring | Quoted Prices in Active Markets (Level 1) | Mutual Fund | ||
Fair Value | ||
Investments at fair value | 11,445 | 7,536 |
Estimate of Fair Value Measurement | Recurring | Quoted Prices in Active Markets (Level 1) | Domestic stock | ||
Fair Value | ||
Investments at fair value | 9,388 | 5,204 |
Estimate of Fair Value Measurement | Recurring | Quoted Prices in Active Markets (Level 1) | International stock funds | ||
Fair Value | ||
Investments at fair value | 1,395 | 947 |
Estimate of Fair Value Measurement | Recurring | Quoted Prices in Active Markets (Level 1) | Target funds | ||
Fair Value | ||
Investments at fair value | 21 | 242 |
Estimate of Fair Value Measurement | Recurring | Quoted Prices in Active Markets (Level 1) | Bond funds | ||
Fair Value | ||
Investments at fair value | 145 | 222 |
Estimate of Fair Value Measurement | Recurring | Quoted Prices in Active Markets (Level 1) | Alternative funds | ||
Fair Value | ||
Investments at fair value | 496 | 921 |
Estimate of Fair Value Measurement | Recurring | Prices with Other Observable Inputs (Level 2) | ||
Fair Value | ||
Investments at fair value | 17,391 | 15,961 |
Assets at fair value | 17,391 | 15,961 |
Estimate of Fair Value Measurement | Recurring | Prices with Other Observable Inputs (Level 2) | Money market funds | ||
Fair Value | ||
Investments at fair value | 1,127 | 837 |
Estimate of Fair Value Measurement | Recurring | Prices with Other Observable Inputs (Level 2) | Fixed Income | ||
Fair Value | ||
Investments at fair value | 16,264 | 15,124 |
Estimate of Fair Value Measurement | Recurring | Prices with Unobservable Inputs (Level 3) | ||
Fair Value | ||
Investments at fair value | 2,126 | 1,960 |
Assets at fair value | 2,126 | 1,960 |
Estimate of Fair Value Measurement | Recurring | Prices with Unobservable Inputs (Level 3) | Alternative Investments | ||
Fair Value | ||
Investments at fair value | $ 2,126 | $ 1,960 |
FAIR VALUE - Available for Sale
FAIR VALUE - Available for Sale Investment Portfolio (Details) - Ardellis Insurance Ltd. - USD ($) $ in Thousands | Mar. 27, 2021 | Mar. 28, 2020 |
Available-for-sale securities | ||
Total Securities Cost | $ 41,229 | $ 34,079 |
Unrealized Gain (Loss) | 6,720 | (940) |
Total Fair Value | 47,949 | 33,139 |
Fixed Income | ||
Available-for-sale securities | ||
Debt Securities Cost | 15,867 | 15,257 |
Debt Securities Unrealized Gain/(Loss) | 642 | 104 |
Debt Securities Fair Value | 16,509 | 15,361 |
Equity | ||
Available-for-sale securities | ||
Equity Securities Cost | 14,664 | 9,690 |
Equity Securities Unrealized Gain/(Loss) | 3,832 | (601) |
Equity Securities Fair Value | 18,496 | 9,089 |
Mutual Fund | ||
Available-for-sale securities | ||
Debt Securities Cost | 8,769 | 7,298 |
Debt Securities Unrealized Gain/(Loss) | (569) | |
Debt Securities Unrealized Gain/(Loss) | 2,049 | |
Debt Securities Fair Value | 10,818 | 6,729 |
Alternative Investments | ||
Available-for-sale securities | ||
Debt Securities Cost | 1,929 | 1,834 |
Debt Securities Unrealized Gain/(Loss) | 197 | 126 |
Debt Securities Fair Value | $ 2,126 | $ 1,960 |
REVENUE RECOGNITION - Disaggreg
REVENUE RECOGNITION - Disaggregated revenue (Details) $ in Thousands | 3 Months Ended | |
Mar. 27, 2021USD ($)item | Mar. 28, 2020USD ($) | |
Revenue Recognition | ||
Number of markets in which the entity operates (in markets) | item | 3 | |
NET SALES | $ 1,825,004 | $ 1,032,062 |
Change % | 76.80% | |
FOB Shipping Point Revenue | ||
Revenue Recognition | ||
NET SALES | $ 1,797,399 | 999,262 |
Change % | 79.90% | |
Construction Contract Revenue | ||
Revenue Recognition | ||
NET SALES | $ 27,605 | $ 32,800 |
Change % | (15.80%) | |
Minimum | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-03-28 | 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]: 2021-03-28 | 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. 27, 2021 | Dec. 26, 2020 | Mar. 28, 2020 |
REVENUE RECOGNITION | |||
Cost and Earnings in Excess of Billings | $ 3,408 | $ 4,169 | $ 5,744 |
Billings in Excess of Cost and Earnings | $ 9,396 | $ 11,530 | $ 9,920 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 27, 2021 | Mar. 28, 2020 | |
Numerator: | ||
Net earnings attributable to controlling interest | $ 103,311 | $ 40,159 |
Adjustment for earnings allocated to non-vested restricted common stock | (3,175) | (1,059) |
Net earnings for calculating EPS | $ 100,136 | $ 39,100 |
Denominator: | ||
Weighted average shares outstanding (in shares) | 61,889 | 61,842 |
Adjustment for non-vested restricted common stock (in shares) | (1,902) | (1,630) |
Shares for calculating basic EPS (in shares) | 59,987 | 60,212 |
Effect of dilutive restricted common stock (in shares) | 28 | 18 |
Shares for calculating diluted EPS (in shares) | 60,015 | 60,230 |
Net earnings per share | ||
Basic (USD per share) | $ 1.67 | $ 0.65 |
Diluted (USD per share) | $ 1.67 | $ 0.65 |
COMMITMENTS, CONTINGENCIES, A_2
COMMITMENTS, CONTINGENCIES, AND GUARANTEES (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 27, 2021 | Mar. 28, 2020 | |
Remediation reserves | ||
Environmental reserves, discount rate (as a percent) | 0.00% | |
Estimated costs to complete future remediation efforts | $ 1.9 | $ 2 |
Long-term commitment | ||
Outstanding purchase commitments on capital projects | 41.3 | |
Surety Bonds and Letters of Credit | ||
Outstanding letters of credit | 50.9 | |
Open Projects | ||
Surety Bonds and Letters of Credit | ||
Payment and performance bonds outstanding | 27 | |
Completed Projects | ||
Surety Bonds and Letters of Credit | ||
Payment and performance bonds outstanding | 4 | |
Insurance Contracts | ||
Surety Bonds and Letters of Credit | ||
Outstanding letters of credit | 43.8 | |
Revenue Bonds | ||
Surety Bonds and Letters of Credit | ||
Outstanding letters of credit | $ 7.1 |
BUSINESS COMBINATIONS (Details)
BUSINESS COMBINATIONS (Details) $ in Thousands, $ in Millions | Mar. 01, 2021USD ($) | Mar. 01, 2021AUD ($) | Dec. 28, 2020USD ($)facility | Nov. 10, 2020USD ($) | Oct. 01, 2020USD ($) | Sep. 30, 2020USD ($)location | Jul. 14, 2020USD ($) | Mar. 27, 2021USD ($) |
Business Acquisition | ||||||||
Aggregate acquisitions' net sales | $ 242,800 | |||||||
Aggregate acquisitions' operating profit | $ 14,200 | |||||||
J. C. Gilmore Pty Ltd | All Other | ||||||||
Business Acquisition | ||||||||
Purchase Price | $ 4,724 | |||||||
Percentage of assets purchased (as a percent) | 100.00% | |||||||
Intangible Assets | $ 4,176 | |||||||
Net Tangible Assets | 548 | |||||||
Acquired entity, prior year sales | $ 10,000 | $ 15 | ||||||
PalletOne | Industrial | ||||||||
Business Acquisition | ||||||||
Purchase Price | $ 258,770 | |||||||
Percentage of stock purchase (as a percent) | 100.00% | |||||||
Intangible Assets | $ 82,546 | |||||||
Net Tangible Assets | 176,224 | |||||||
Acquired entity, prior year sales | 525,000 | |||||||
Acquired entity, trailing 12-months sales | $ 698,000 | |||||||
Number of pallet manufacturing facilities | facility | 17 | |||||||
Number of pressure-treating facilities | facility | 5 | |||||||
Atlantic Prefab, Inc., Exterior Designs, LLC and Patriot Building Systems, LLC | Construction | ||||||||
Business Acquisition | ||||||||
Purchase Price | $ 27,274 | |||||||
Percentage of assets purchased (as a percent) | 100.00% | |||||||
Intangible Assets | $ 17,894 | |||||||
Net Tangible Assets | 9,380 | |||||||
Acquired entity, prior year sales | $ 28,000 | |||||||
FRCT | Retail | ||||||||
Business Acquisition | ||||||||
Purchase Price | $ 7,936 | |||||||
Percentage of assets purchased (as a percent) | 100.00% | |||||||
Intangible Assets | $ 7,222 | |||||||
Net Tangible Assets | 714 | |||||||
Acquired entity, prior year sales | $ 6,400 | |||||||
Enwrap | All Other | ||||||||
Business Acquisition | ||||||||
Purchase Price | $ 4,465 | |||||||
Percentage of stock purchase (as a percent) | 50.00% | |||||||
Number of plant locations | location | 8 | |||||||
Intangible Assets | $ 4,607 | |||||||
Net Tangible Assets | (142) | |||||||
Acquired entity, prior year sales | $ 14,000 | |||||||
T&R Lumber Company | Industrial | ||||||||
Business Acquisition | ||||||||
Purchase Price | $ 19,136 | |||||||
Percentage of assets purchased (as a percent) | 100.00% | |||||||
Intangible Assets | $ 13,098 | |||||||
Net Tangible Assets | 6,038 | |||||||
Acquired entity, prior year sales | $ 31,000 |
SEGMENT REPORTING (Details)
SEGMENT REPORTING (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 27, 2021 | Mar. 28, 2020 | Dec. 26, 2020 | |
Segment Reporting | |||
Net sales | $ 1,825,004 | $ 1,032,062 | |
Segment operating profit | 137,487 | 58,632 | |
Segment total assets | 2,786,088 | 1,882,982 | $ 2,404,891 |
Intersegment net sales | |||
Segment Reporting | |||
Net sales | (177,349) | (109,668) | |
Corporate | |||
Segment Reporting | |||
Net sales | 2,002 | (189) | |
Segment operating profit | 2,536 | 3,172 | |
Segment total assets | 433,537 | 770,112 | |
Retail | |||
Segment Reporting | |||
Net sales | 759,021 | 352,161 | |
Segment operating profit | 53,545 | 15,512 | |
Segment total assets | 944,637 | 510,464 | |
Retail | Intersegment net sales | |||
Segment Reporting | |||
Net sales | 47,586 | 29,858 | |
Industrial | |||
Segment Reporting | |||
Net sales | 448,874 | 256,543 | |
Segment operating profit | 40,410 | 18,074 | |
Segment total assets | 657,572 | 416,487 | |
Industrial | Intersegment net sales | |||
Segment Reporting | |||
Net sales | 17,906 | 11,220 | |
Construction | |||
Segment Reporting | |||
Net sales | 559,530 | 381,155 | |
Segment operating profit | 33,018 | 17,135 | |
Segment total assets | 535,527 | 510,972 | |
Construction | Intersegment net sales | |||
Segment Reporting | |||
Net sales | 14,461 | 15,423 | |
All Other | |||
Segment Reporting | |||
Net sales | 55,577 | 42,392 | |
Segment operating profit | 7,978 | 4,739 | |
Segment total assets | 214,815 | $ 196,856 | |
All Other | Intersegment net sales | |||
Segment Reporting | |||
Net sales | $ 97,396 | $ 53,167 |
SEGMENT REPORTING - Goodwill (D
SEGMENT REPORTING - Goodwill (Details) $ in Thousands | 3 Months Ended |
Mar. 27, 2021USD ($) | |
Goodwill | |
Goodwill, Beginning Balance | $ 252,193 |
Acquisitions | 66,198 |
Purchase Accounting Adjustments | (4,089) |
Foreign Exchange, Net | (113) |
Goodwill, Ending Balance | 314,189 |
Retail | |
Goodwill | |
Goodwill, Beginning Balance | 61,943 |
Acquisitions | 18,178 |
Goodwill, Ending Balance | 80,121 |
Construction | |
Goodwill | |
Goodwill, Beginning Balance | 90,729 |
Purchase Accounting Adjustments | (1,653) |
Goodwill, Ending Balance | 89,076 |
Industrial | |
Goodwill | |
Goodwill, Beginning Balance | 87,827 |
Acquisitions | 43,844 |
Purchase Accounting Adjustments | (2,291) |
Goodwill, Ending Balance | 129,380 |
All Other | |
Goodwill | |
Goodwill, Beginning Balance | 11,694 |
Acquisitions | 4,176 |
Purchase Accounting Adjustments | (145) |
Foreign Exchange, Net | (113) |
Goodwill, Ending Balance | $ 15,612 |
SEGMENT REPORTING - Assets (Det
SEGMENT REPORTING - Assets (Details) - USD ($) $ in Thousands | Mar. 27, 2021 | Dec. 26, 2020 | Mar. 28, 2020 |
Segment Reporting | |||
Segment assets | $ 2,786,088 | $ 2,404,891 | $ 1,882,982 |
Change in assets (as a percent) | 15.90% | ||
Corporate | |||
Segment Reporting | |||
Segment assets | $ 433,537 | 770,112 | |
Change in assets (as a percent) | (43.70%) | ||
Retail | |||
Segment Reporting | |||
Segment assets | $ 944,637 | 510,464 | |
Change in assets (as a percent) | 85.10% | ||
Construction | |||
Segment Reporting | |||
Segment assets | $ 535,527 | 510,972 | |
Change in assets (as a percent) | 4.80% | ||
Industrial | |||
Segment Reporting | |||
Segment assets | $ 657,572 | 416,487 | |
Change in assets (as a percent) | 57.90% | ||
All Other | |||
Segment Reporting | |||
Segment assets | $ 214,815 | $ 196,856 | |
Change in assets (as a percent) | 9.10% |
INCOME TAXES (Details)
INCOME TAXES (Details) | 3 Months Ended | |
Mar. 27, 2021 | Mar. 28, 2020 | |
INCOME TAXES | ||
Effective income tax rate | 23.30% | 24.70% |
COMMON STOCK - Common Stock Iss
COMMON STOCK - Common Stock Issuances (Details) - $ / shares | 3 Months Ended | |
Mar. 27, 2021 | Mar. 28, 2020 | |
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 | 6,000 | 10,000 |
Average Share Price | ||
Common stock issued (dollars per share) | $ 73.28 | $ 35.59 |
Stock Gift Program | ||
Common Stock | ||
Common stock issued | 1,000 | 1,000 |
Average Share Price | ||
Common stock issued (dollars per share) | $ 79.91 | $ 45.22 |
Stock Retainer Plan | ||
Common Stock | ||
Common stock issued | 2,000 | 1,000 |
Average Share Price | ||
Common stock issued (dollars per share) | $ 56.80 | $ 47.90 |
LTSIP | ||
Common Stock | ||
Common stock issued | 468,000 | 271,000 |
Average Share Price | ||
Common stock issued (dollars per share) | $ 53.68 | $ 47.51 |
Executive Stock Match Grants | ||
Common Stock | ||
Common stock issued | 77,000 | 80,000 |
Average Share Price | ||
Common stock issued (dollars per share) | $ 60.24 | $ 47.60 |
Deferred Compensation Plans | ||
Common Stock | ||
Common stock issued | 89,000 | 89,000 |
Average Share Price | ||
Common stock issued (dollars per share) | $ 59.75 | $ 54.68 |
Stock grant programs | ||
Common Stock | ||
Common stock issued | 537,000 | 350,000 |
Forfeitures | (11,000) | (3,000) |
Average Share Price | ||
Common stock issued (dollars per share) | $ 54.63 | $ 47.52 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - Subsequent Event $ in Millions | Apr. 29, 2021USD ($) | Apr. 19, 2021USD ($) | Apr. 12, 2021USD ($)employeestate |
Spartanburg Forest Products, Inc and its Affiliates | |||
Subsequent Event | |||
Property, plant and equipment | $ 16.5 | ||
Net working capital | $ 146.5 | ||
Number of Employees | employee | 150 | ||
Number of states in which the entity operates | state | 5 | ||
Walnut Hollow Farm, Inc. | |||
Subsequent Event | |||
Purchase Price | $ 8.7 | ||
Endurable Building Products | |||
Subsequent Event | |||
Purchase Price | $ 10.5 |