UFPI First Quarter Net Earnings Up 41 Percent

Net sales up more than 14 percent, led by significant gains in industrial

GRAND RAPIDS, Mich.--()--Universal Forest Products, Inc. (Nasdaq: UFPI) today announced first quarter earnings attributable to controlling interest of $10.2 million, up 41.0 percent over same period of 2014. Diluted earnings per share were $0.51, compared to $0.36 for the first quarter of 2014. Net sales for the first quarter were $633.0 million, up 14.3 percent over the first quarter of 2014.

Each of the Company’s three markets showed sales increases, led by significant gains in industrial. The overall sales increase was attributable to a 14 percent gain in unit sales. “This solid performance resulted from the remarkable efforts of our people, who managed their operations well and who continue to create opportunity in many areas of our business,” said CEO Matthew J. Missad.

“Growth with our retail customers, success with new product introductions, and significant gains in our industrial business aided by strong results from new acquisitions were among the drivers that helped us deliver these results,” he added. “Our strategies to improve top- and bottom-line results are working, and we are focused on enhancing our growth and success day by day.”

While the Company faced typical first-quarter weather challenges, “We noticed a significant improvement in our business when the weather broke in March and customer orders increased in preparation for the building season,” Missad said.

“We are well-positioned to meet the demands of a busy season and anticipate strong orders in line with healthier economic conditions and consumer spending,” he added.

By market, the Company posted the following first-quarter 2015 gross sales results:

Retail: $229.9 million, up 14 percent over the same period of 2014

The Company saw increases in unit sales to its retail customers, reflecting share gains in certain core product lines, success in the company’s new product sales initiative, improved consumer spending and growth with big box retailers, who saw healthy increases in comparable store sales. The Company believes that it is well-positioned to meet the growing demand of customers as the building season kicks into high gear. It remains focused on enhancing its product offerings, creating new products and improving upon existing products, and enhancing services to customers.

Industrial: $211.2 million, up 23 percent over the first quarter of 2014

This market includes packaging, material handling and related products and applications for industrial customers. Acquisitions since the first quarter of 2014 contributed positively to the unit sales growth in this market. The Company also added new customers and increased market share as the economy improved. The Company remains focused on adding customers and products, expanding products and services, adding capacity and growing its business in non-wood packaging materials to offer complete packaging solutions.

Construction: $200.7 million, up 6 percent over the same period of 2014

This market includes residential and manufactured housing, commercial construction and concrete forming. The Company’s growth in this market was attributable to overall unit sales gains, with strong results in concrete forming and commercial construction. A smaller gain in residential construction reflects the Company’s ongoing focus on growing business more selectively and profitably.

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 Thurs., April 16, 2015. 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 (877) 546-5018 and internationally at (857) 244-7550. Use conference pass code 35981639. 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 17, 2015, domestically at (888) 286-8010 and internationally at (617) 801-6888. Use replay pass code 92011785.

UNIVERSAL FOREST PRODUCTS, INC.

Universal Forest Products, Inc. is a holding company with subsidiaries throughout North America and in Australia that supply wood, wood composite and other products to three robust markets: retail, construction and industrial. The Company is headquartered in Grand Rapids, Mich., and is celebrating its 60th year in business. For more information about Universal Forest Products, Inc., or its affiliated operations, 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 2015/2014
    Quarter Period   Year to Date
(In thousands, except per share data)   2015       2014       2015       2014    
               
 
NET SALES $ 633,025 100 % $ 553,998 100 % $ 633,025 100 % $ 553,998 100.0 %
 
COST OF GOODS SOLD   553,443   87.4   487,986   88.1   553,443   87.4   487,986   88.1
 
GROSS PROFIT 79,582 12.6 66,012 11.9 79,582 12.6 66,012 11.9
 
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES 61,705 9.7 53,908 9.7 61,705 9.7 53,908 9.7
NET (GAIN) LOSS ON DISPOSITION AND
IMPAIRMENT OF ASSETS   14   -   (524 ) (0.1 )   14   -   (524 ) (0.1 )
 
EARNINGS FROM OPERATIONS 17,863 2.8 12,628 2.3 17,863 2.8 12,628 2.3
 
OTHER EXPENSE, NET   955   0.2   725   0.1   955   0.2   725   0.1
 
EARNINGS BEFORE INCOME TAXES 16,908 2.7 11,903 2.1 16,908 2.7 11,903 2.1
 
INCOME TAXES   6,104   1.0   4,235   0.8   6,104   1.0   4,235   0.8
 
NET EARNINGS 10,804 1.7 7,668 1.4 10,804 1.7 7,668 1.4
 
LESS NET EARNINGS ATTRIBUTABLE TO
NONCONTROLLING INTEREST   (642 ) (0.1 )   (452 ) (0.1 )   (642 ) (0.1 )   (452 ) (0.1 )
 
NET EARNINGS ATTRIBUTABLE TO
CONTROLLING INTEREST $ 10,162   1.6 $ 7,216   1.3 $ 10,162   1.6 $ 7,216   1.3
 
 
EARNINGS PER SHARE - BASIC $ 0.51 $ 0.36 $ 0.51 $ 0.36
 
EARNINGS PER SHARE - DILUTED $ 0.51 $ 0.36 $ 0.51 $ 0.36
 
COMPREHENSIVE INCOME 9,801 6,968 9,801 6,968
 
LESS COMPREHENSIVE INCOME ATTRIBUTABLE
TO NONCONTROLLING INTEREST   (498 )   (354 )   (498 )   (354 )
 
COMPREHENSIVE INCOME
ATTRIBUTABLE TO CONTROLLING INTEREST $ 9,303   $ 6,614   $ 9,303   $ 6,614  
                                 

SUPPLEMENTAL SALES DATA

Quarter Period Year to Date

Market Classification

2015 2014

%

2015 2014

%

Retail $ 229,885 $ 200,984 14 % $ 229,885 $ 200,984 14 %
Industrial 211,162 171,651 23 % 211,162 171,651 23 %
Construction   200,722     189,562   6 %   200,722     189,562   6 %
Total Gross Sales 641,769 562,197 14 % 641,769 562,197 14 %
Sales Allowances   (8,744 )   (8,199 )   (8,744 )   (8,199 )
Total Net Sales $ 633,025   $ 553,998   $ 633,025   $ 553,998  
 
 
CONSOLIDATED CONDENSED BALANCE SHEETS (UNAUDITED)
MARCH 2015/2014
                             
(In thousands)              
ASSETS   2015   2014   LIABILITIES AND EQUITY   2015   2014
   
CURRENT ASSETS CURRENT LIABILITIES
Cash and cash equivalents $ 22,888 $ - Cash Overdraft $ 21,585 $ 12,151
Restricted cash 710 720 Accounts payable 114,225 91,015
Accounts receivable 260,926 242,433 Accrued liabilities   79,347   57,054
Inventories 404,711 312,010
Other current assets   19,984   27,189
 
TOTAL CURRENT ASSETS 709,219 582,352 TOTAL CURRENT LIABILITIES 215,157 160,220
 
OTHER ASSETS 9,674 13,064 LONG-TERM DEBT AND
INTANGIBLE ASSETS, NET 193,113 169,949 CAPITAL LEASE OBLIGATIONS 187,020 143,471
PROPERTY, PLANT OTHER LIABILITIES 50,309 42,671
AND EQUIPMENT, NET   255,462   241,419 EQUITY   714,982   660,422
 
 
TOTAL ASSETS $ 1,167,468 $ 1,006,784 TOTAL LIABILITIES AND EQUITY $ 1,167,468 $ 1,006,784
 
 
 
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)
FOR THE THREE MONTHS ENDED
MARCH 2015/2014
(In thousands)     2015   2014
CASH FLOWS FROM OPERATING ACTIVITIES:    
Net earnings $ 10,804 $ 7,668
Adjustments to reconcile net earnings attributable to controlling interest
to net cash from operating activities:
Depreciation 8,996 7,691
Amortization of intangibles 983 586
Expense associated with share-based compensation arrangements 378 495
Expense associated with stock grant plans 27 29
Deferred income taxes (credit) (193 ) (150 )
Equity in earnings of investee (83 ) (51 )
Net (gain) or loss on sale of property, plant and equipment 14 (602 )
Changes in:
Accounts receivable (63,148 ) (61,825 )
Inventories (64,422 ) (23,980 )
Accounts payable and cash overdraft 45,219 29,222
Accrued liabilities and other   10,880     (2,743 )
NET CASH FROM OPERATING ACTIVITIES (50,545 ) (43,660 )
 
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant, and equipment (15,102 ) (8,994 )
Proceeds from sale of property, plant and equipment 50 785
Acquisitions, net of cash received (2,740 ) (4,191 )
Advances of notes receivable (1,273 ) (2,462 )
Collections of notes receivable and related interest 5,790 473
Cash restricted as to use (150 ) -
Other, net   (16 )   (36 )
NET CASH FROM INVESTING ACTIVITIES (13,441 ) (14,425 )
 
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings under revolving credit facilities 140,303 106,318
Repayments under revolving credit facilities (52,718 ) (47,547 )
Debt issuance costs (9 ) -
Proceeds from issuance of common stock 469 99
Distributions to noncontrolling interest (939 ) (701 )
Repurchase of common stock (78 ) -
Other, net   -     (8 )
NET CASH FROM FINANCING ACTIVITIES 87,028 58,161
 
Effect of exchange rate changes on cash   (154 )   (76 )
NET CHANGE IN CASH AND CASH EQUIVALENTS 22,888 -
 
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD   -     -  
 
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 22,888   $ -  
 
SUPPLEMENTAL INFORMATION:
Interest paid $ 374 $ 281
Income taxes paid     (9,709 )     1,681  
 

Contacts

Universal Forest Products, Inc.
Lynn Afendoulis
Director, Corporate Communications
(616) 365-1502

Release Summary

UFPI First Quarter Net Earnings Up 41 Percent

Contacts

Universal Forest Products, Inc.
Lynn Afendoulis
Director, Corporate Communications
(616) 365-1502