GRAND RAPIDS, Mich., April 18, 2017 (GLOBE NEWSWIRE) -- Universal Forest Products, Inc. (Nasdaq:UFPI) today reported financial results for the first quarter ended April 1, 2017.

“The employees of Universal delivered record first-quarter sales and profits, underscoring the success of our balanced business model and targeted approach to growing our business,” said CEO Matthew J. Missad. “Those records are even more impressive if you consider we did not have the same purchasing and weather advantages we enjoyed during the first quarter of 2016.”

The Company’s retail and construction markets had net sales increases of 15 and 21 percent, respectively. The industrial market grew 37 percent, largely because of the September 2016 acquisition of idX Corp.

“While we are pleased with these results, we see opportunities to do much more. We’re focused on a number of opportunities to grow sales and create efficiencies among our recent acquisitions that we expect will benefit us in 2017 and beyond.”

First Quarter 2017 Highlights (comparisons on a year-over-year basis):

  • Net earnings attributable to controlling interest were $21.1 million, up 10 percent
  • Diluted earnings per share were $1.03, up from $0.95
  • Net sales of $846.1 million represent a 24 percent increase over net sales of $682.2 million
  • Unit sales contributed to 17 percent of gross sales growth; higher lumber prices contributed 6 percent
  • New product sales were $74.6 million, up from $64.7 million 

The Company’s earnings growth fell short of its unit sales growth in the first quarter of 2017 due to a number of common business factors that impacted several operations. They include the loss in 2017 of inventory cost advantages that the Company realized the previous year in the industrial market, inclement weather in many areas of the country and the cost of start-up operations.

By market, the Company posted the following first quarter 2017 gross sales results:

Retail

$311.8 million, up 15 percent over the same period of 2016

Sales to the retail market grew 15 percent due to a 6 percent increase in selling prices and a 9 percent increase in unit sales, led by a 19 percent increase in sales to big box customers. Net of acquisitions, unit sales grew 2 percent.

Construction

$267.8 million, up 21 percent over the same period of 2016

Unit sales to the construction market rose 13 percent in the first quarter, led by gains of 16 percent to residential construction customers and 14 percent to manufactured housing customers.  The Company remains focused on growing business selectively in areas where housing markets are the most stable.

Industrial

$277.2 million, up 37 percent over the same period of 2016

The Company’s growth in this market is primarily due to its acquisition of idX Corp., which closed in September of 2016. Excluding acquisitions, the Company grew unit sales in this market by 4 percent in the first quarter over the first quarter of 2016. The growth was generated both by adding new customers and by increasing the number of affiliates that serve large customers.

CONFERENCE CALL

Universal Forest Products will conduct a conference call to discuss information included in this news release and related matters at 8:30 a.m. ET on Wednesday, April 19, 2017. The call will be hosted by CEO Matthew J. Missad and CFO Michael Cole, and will be available for analysts and institutional investors domestically at (888) 685-5759 and internationally at (503) 343-6031. Use conference ID 83487335. The conference call will be available simultaneously and in its entirety to all interested investors and news media through a webcast at http://www.ufpi.com. A replay of the call will be available through May 19, 2017, at any of the following numbers: (855) 859-2056, (404) 537-3406 or (800) 585-5367.

UNIVERSAL FOREST PRODUCTS, INC.

Universal Forest Products, Inc. is a holding company whose subsidiaries supply wood, wood composite and other products to three robust markets: retail, construction and industrial.  Founded in 1955, the Company is headquartered in Grand Rapids, Mich., with affiliates throughout North America, Europe, Asia and Australia. For more about Universal Forest Products, go to www.ufpi.com.

This press release contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act, as amended, that are based on management’s beliefs, assumptions, current expectations, estimates and projections about the markets we serve, the economy and the Company itself. Words like “anticipates,” “believes,” “confident,” “estimates,” “expects,” “forecasts,” “likely,” “plans,” “projects,” “should,” variations of such words, and similar expressions identify such forward-looking statements. These statements do not guarantee future performance and involve certain risks, uncertainties and assumptions that are difficult to predict with regard to timing, extent, likelihood and degree of occurrence. The Company does not undertake to update forward-looking statements to reflect facts, circumstances, events, or assumptions that occur after the date the forward-looking statements are made. Actual results could differ materially from those included in such forward-looking statements. Investors are cautioned that all forward-looking statements involve risks and uncertainty. Among the factors that could cause actual results to differ materially from forward-looking statements are the following: fluctuations in the price of lumber; adverse or unusual weather conditions; adverse economic conditions in the markets we serve; government regulations, particularly involving environmental and safety regulations; and our ability to make successful business acquisitions. Certain of these risk factors as well as other risk factors and additional information are included in the Company's reports on Form 10-K and 10-Q on file with the Securities and Exchange Commission.

 
CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS AND COMPREHENSIVE INCOME (UNAUDITED)
FOR THE THREE MONTHS ENDED
MARCH 2017/2016
  Quarter Period   Year to Date  
(In thousands, except per share data)  2017     2016     2017     2016   
                 
                 
                 
NET SALES $846,130  100% $682,151  100% $846,130  100% $682,151  100.0%
                 
COST OF GOODS SOLD   725,390  85.7   579,412  84.9   725,390  85.7   579,412  84.9 
                 
GROSS PROFIT  120,740  14.3   102,739  15.1   120,740  14.3   102,739  15.1 
                 
SELLING,  GENERAL  AND                 
  ADMINISTRATIVE  EXPENSES  86,919  10.3   70,828  10.4   86,919  10.3   70,828  10.4 
                 
EARNINGS FROM OPERATIONS  33,821  4.0   31,911  4.7   33,821  4.0   31,911  4.7 
                 
OTHER EXPENSE, NET  1,417  0.2   891  0.1   1,417  0.2   891  0.1 
                 
EARNINGS BEFORE INCOME TAXES  32,404  3.8   31,020  4.5   32,404  3.8   31,020  4.5 
                 
INCOME TAXES  10,770  1.3   10,765  1.6   10,770  1.3   10,765  1.6 
                 
NET EARNINGS  21,634  2.6   20,255  3.0   21,634  2.6   20,255  3.0 
                 
LESS NET EARNINGS ATTRIBUTABLE TO                
  NONCONTROLLING INTEREST   (572) (0.1)  (1,043) (0.2)  (572) (0.1)  (1,043) (0.2)
                 
NET EARNINGS ATTRIBUTABLE TO                
  CONTROLLING INTEREST $21,062  2.5  $19,212  2.8  $21,062  2.5  $19,212  2.8 
                 
                 
EARNINGS PER SHARE - BASIC  $1.03    $0.95    $1.03    $0.95   
                 
EARNINGS PER SHARE - DILUTED $1.03    $0.95    $1.03    $0.95   
                 
COMPREHENSIVE INCOME  24,669     20,697     24,669     20,697   
                 
LESS COMPREHENSIVE INCOME ATTRIBUTABLE                
  TO NONCONTROLLING INTEREST  (1,427)    (846)    (1,427)    (846)  
                 
COMPREHENSIVE INCOME                
  ATTRIBUTABLE TO CONTROLLING INTEREST $23,242    $19,851    $23,242    $19,851   
                 
SUPPLEMENTAL SALES DATA                
  Quarter Period Year to Date
Market Classification  2017     2016  %  2017     2016  %
Retail $311,750    $271,258  15% $311,750    $271,258  15%
Industrial  277,242     201,649  37%  277,242     201,649  37%
Construction  267,817     220,957  21%  267,817     220,957  21%
Total Gross Sales  856,809     693,864  23%  856,809     693,864  23%
Sales Allowances  (10,679)    (11,713) 9%  (10,679)    (11,713) 9%
Total Net Sales $846,130    $682,151  24% $846,130    $682,151  24%
                 
                 

 

CONSOLIDATED CONDENSED BALANCE SHEETS (UNAUDITED)
MARCH 2017/2016
              
(In thousands)            
ASSETS  2017  2016 LIABILITIES AND EQUITY  2017  2016
              
CURRENT ASSETS     CURRENT LIABILITIES    
 Cash and cash equivalents $31,020 $43,065  Cash overdraft $21,566 $-
 Restricted cash & cash equivalents  4,709  1,139  Accounts payable  156,030  116,525
 Investments  5,928  6,737  Accrued liabilities  97,965  97,910
 Accounts receivable  365,620  287,374  Current portion of debt  2,280  886
 Inventories  472,016  327,177        
 Other current assets  23,820  16,889        
              
TOTAL CURRENT ASSETS  903,113  682,381 TOTAL CURRENT LIABILITIES  277,841  215,321
              
OTHER ASSETS  14,533  10,424 LONG-TERM DEBT AND    
INTANGIBLE ASSETS, NET  250,160  198,338  CAPITAL LEASE OBLIGATIONS  252,904  84,525
PROPERTY, PLANT     OTHER LIABILITIES  49,561  51,003
 AND EQUIPMENT,  NET  309,853  254,634 EQUITY  897,353  794,928
              
              
TOTAL ASSETS $1,477,659 $1,145,777 TOTAL LIABILITIES AND EQUITY $1,477,659 $1,145,777
              
              
              

 

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)
FOR THE THREE MONTHS ENDED
MARCH 2017/2016
(In thousands)   2017    2016 
CASH FLOWS FROM OPERATING ACTIVITIES:     
Net earnings  $21,634   $20,255 
Adjustments to reconcile net earnings to net cash from operating activities:     
       
Depreciation   11,392    9,492 
Amortization of intangibles   1,119    693 
Expense associated with share-based compensation arrangements  571    432 
Expense associated with stock grant plans   46    37 
Deferred income taxes (credit)   224    (156)
Equity in earnings of investee   (5)   (81)
Net gain on disposition and impairment of assets  (64)   (10)
Changes in:      
Accounts receivable   (67,766)   (64,276)
Inventories   (60,984)   (22,159)
Accounts payable and cash overdraft   32,769    21,498 
Accrued liabilities and other   (9,676)   4,318 
NET CASH FROM OPERATING ACTIVITIES  (70,740)   (29,957)
       
CASH FLOWS FROM INVESTING ACTIVITIES:     
Purchases of property, plant, and equipment   (16,531)   (12,941)
Proceeds from sale of property, plant and equipment  353    132 
Acquisitions and purchase of noncontrolling interest, net of cash received  (55,441)   - 
Cash contributed from noncontrolling interest   464    - 
Advances of notes receivable   (228)   (1,259)
Collections of notes receivable and related interest  721    1,408 
Purchases of investments   (819)   - 
Proceeds from sale of investments   1,204    - 
Other   (322)   (173)
NET CASH USED IN INVESTING ACTIVITIES  (70,599)   (12,833)
       
CASH FLOWS FROM FINANCING ACTIVITIES:     
Borrowings under revolving credit facilities   281,090    1,235 
Repayments under revolving credit facilities   (137,767)   (1,495)
Proceeds from issuance of common stock   146    130 
Distributions to noncontrolling interest   (1,673)   (1,170)
Repurchase of common stock   (83)   - 
Other   (16)   (5)
NET CASH FROM (USED IN) FINANCING ACTIVITIES  141,697    (1,305)
       
Effect of exchange rate changes on cash   882    (43)
NET CHANGE IN CASH AND CASH EQUIVALENTS  1,240    (44,138)
       
ALL CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD  34,489    88,342 
       
ALL CASH AND CASH EQUIVALENTS, END OF PERIOD $35,729   $44,204 
       
Reconciliation of cash and cash equivalents and restricted cash:     
Cash and cash equivalents, beginning of period  $34,091   $87,756 
Restricted cash, beginning of period   398    586 
All cash and cash equivalents, beginning of period $34,489   $88,342 
       
Cash and cash equivalents, end of period  $31,020   $43,065 
Restricted cash, end of period   4,709    1,139 
All cash and cash equivalents, end of period  $35,729   $44,204 
       
       


Lynn Afendoulis
Director, Corporate Communications
(616) 365-1502