Universal Forest Products

Universal Forest Products, Inc. Exceeds Targets for Second Quarter

GRAND RAPIDS, Mich., Jul 24, 2001 /PRNewswire/ --Reports Record Earnings

Universal Forest Products(R), Inc. (NASDAQ: UFPI) today announced second quarter net earnings of $14.2 million, an increase of 10.2% over the same quarter a year ago. Earnings per share (diluted) increased 11.1% to $0.70, compared with $0.63 for the second quarter of 2000, and exceeded the Company's target of $0.63 to $0.67 per share (diluted) for the quarter. Net sales for the quarter of $486.3 million were 12.7% higher than last year's second quarter net sales of $431.6 million, and met the Company's target of $460 million to $490 million.

For the first six months of 2001, net earnings were $19.2 million or $0.95 per share (diluted) compared to $19.0 million or $0.93 per share (diluted) last year. Net sales for the first six months of 2001 were $771.0 million, or 4.8% higher than net sales of $735.6 million last year.

"We would be pleased with these results in any economy, but in the context of a slowing economy that saw many businesses report decreased sales, the strength of Universal's strategies and products is evident," said William G. Currie, UFP's vice-chairman and chief executive officer. "Our success this quarter was due in part to strong unit sales growth to our do-it-yourself (D- I-Y) and site-built markets, benefits from strategic acquisitions, and our employees, whose hard work and dedication helped us realize strong results."

Currie noted that sales to the D-I-Y and site-built markets were up 18.0% and 30.1%, respectively, for the quarter. The Company's strength in manufactured housing was underscored by its performance during a difficult quarter. The manufactured housing industry experienced a decline in shipments of approximately 30%, however, Universal's sales to that market were down only 11%. While lumber prices temporarily increased in May, they had little impact on the Company's reported sales for the second quarter.

Outlook

The Company expects to continue its unit sales growth to the D-I-Y, site- built, and industrial/agricultural markets for the balance of the year. While management doesn't expect the slowdown in the manufactured housing market to improve in the next six months, the Company's leadership position will enable it to increase sales to that market when demand returns. With these factors, and current economic conditions in mind, management has set the following targets for the third quarter of 2001:

  • Sales ranging from $420 million to $440 million.
  • Earnings from $0.45 to $0.48 per share (diluted).

The Company continues to target sales and earnings per share growth of 7% to 10% for the year.

Universal Forest Products will conduct a conference call to discuss information in this news release and related matters at 11:00 a.m. EDT on Tuesday, July 24, 2001. The conference call will be hosted by William G. Currie and will be available for analysts and institutional investors domestically at 800-482-2239 or internationally at 303-224-6998. Use conference call ID #1111404. The conference call will be available simultaneously, and in its entirety, to all interested investors and news media through a webcast at www.ufpi.com . Click on "investor relations," then "live webcast."

Universal Forest Products(R) markets, manufactures, and engineers products for D-I-Y retail home centers, structural lumber products for the manufactured housing industry, engineered wood components for the site-built construction market, and specialty wood packaging for various industries. For information about Universal Forest Products on the Internet, please go to the Company's web site at www.ufpi.com .

Included in this report are certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements are based on the beliefs of the Company's management as well as on assumptions made by and information currently available to the Company at the time such statements were 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 are the following: Adverse lumber market trends, competitive activity, negative economic trends, government regulations, and weather. These risk factors and additional information are included in the Company's reports on Form 10K and 10Q on file with the Securities and Exchange Commission.

Financial highlights to follow:

Consolidated Statements of Earnings (unaudited)
For the Six Months Ended
June 2001/2000

(In thousands,
except per share data)		 Quarter Period
  2001 2000
Net Sales
$486,348
 100%
431,578
 100%
Cost of Goods Sold
419,951
 86.35
374,280
 86.72
Gross Profit
66,397
 13.65
57,298
 13.28
Selling, General and Administrative Expenses
38,869
 7.99
32,045
 7.43
Earnings From Operations
27,528
 5.66
25,253
 5.85
Interest Expense
3,539
 0.73
3.607
 0.84
Interest Revenue
(245)
 -0.05
(160)
 -0.04
 
3,294
 0.58
3,447
 0.80
Earnings Before Income Taxes, Minority Interest and Equity in Earnings of Investee
24,234
 4.98
21,806
 5.05
Income Taxes
9,179
 1.89
8,563
 1.98
Earnings Before Minority Interest and Equity in Earnings of Investee
15,055
 3.09
13,243
 3.07
Minority Interest
(794)
 -0.16
(307)
 -0.07
Equity in Earnings of Investee
(23)
 -0.01
(19)
 -0.01
Net Earnings
$14,238
 2.92
$12,917
 2.99
Earnings per Share-Basic
$0.72
  
$0.64
  
Earnings per Share-Diluted
$0.70
  
$0.63
  
Weighted Average Shares Outstanding
19,792
  
20,144
  
Weighted Average Shares Outstanding with Common Stock Equivalents
20,388
  
20,501
  
         

 

Consolidated Statements of Earnings (unaudited)
For the Six Months Ended
June 2001/2000
(In thousands,
except per share data)
Year to Date
 
2001
2000
Net Sales
$770,986
 100%
$735,650
 100%
Cost of Goods Sold
661,470
 85.80
637,941
 86.72
Gross Profit
109,516
 14.20
97,709
 13.28
Selling, General and Administrative Expenses
71,142
 9.22
59,363
 8.07
Earnings From Operations
38,374
 4.98
38,346
 5.21
Interest Expense
6,738
 0.87
6,775
 0.92
Interest Revenue
(317)
 -0.04
(246)
 -0.03
 
6,421
 0.83
6,529
 0.89
Earnings Before Income Taxes, Minority Interest and Equity in Earnings (loss) of Investee
31,953
 4.15
31,817
 4.32
Income Taxes
12,035
 1.56
12,516
 1.70
Earnings Before Minority Interest and Equity in Earnings of Investee
19,918
 2.59
19,301
 2.62
Minority Interest
(861)
 -0.11
(330)
 -0.04
Equity in Earnings of Investee
158
 0.01
27
 0.00
Net Earnings
$19,215
 2.49
$18,998
 2.58
Earnings per Share-Basic
$0.97
  
$0.94
  
Earnings per Share-Diluted
$0.95
  
$0.93
  
Weighted Average Shares Outstanding
19,753
  
20,140
  
Weighted Average Shares Outstanding with Common Stock Equivalents
20,315
  
20,513
  

 

Supplemental Sales Data
 
Quarter Period
Market Classification
2001
2000
Do-It-Yourself/Retail
$272,407
 56%
$230,899
 53%
Manufactured Housing
74,907
 15%
84,413
 20%
Site-Built Construction
81,963
 17%
62,987
 15%
Industrial and Other
57,071
 12%
53,279
 12%
Total
$486,348
 100%
$431,578
 100%

 
 
Year to Date
Market Classification
2001
2000
Do-It-Yourself/Retail
$400,483
 52%
$365,612
 50%
Manufactured Housing
124,568
 16%
160,510
 22%
Site-Built Construction
134,817
 19%
111,890
 15%
Industrial and Other
102,118
 13%
97,638
 13%
Total
$770,986
 100%
$735,650
 100%

 

Consolidated Balance Sheets (unaudited)
June 2001/2000
(in thousands)
Assets Liabilities and Shareholders' Equity
2001
 2000
2001
 2000
Current Assets
  Current Liabilities
 
Cash and cash equivalents $8,490 $2,748 Notes payable
$1,020
 $2,278
Restricted cash equivalents 723 - Accounts payable and accrued liabilities
119,875
 107,811
Accounts receivable 140,698 119,044      
Inventories 148,069 145,768 Current portion of long-term debt and capital leases
21,360
 7,058
Other current assets 8,210 7,005  
 
Total Current Assets 306,190 274,565 Total Current Liabilities
142,255
 117,147
Other Assets 11,698 11,304 Long-Term Debt and Capital Leases, less current portion
197,197
 191,619
Goodwill and Non-Compete 114,903 107,372 Other Liabilities
18,862
 18,072
Property, Plant and Equipment, Net 179,581 164,990 Shareholders' Equity
254,058
 231,393
Total Assets $612,372 $558,231 Total Liabilities and Shareholders' Equity
$612,372
 $558,231

 

Consolidated Statements of Cash Flows (unaudited)
For the Six Months Ended
June 2001/2000
(In thousands) 2001 2000
Cash Flows From Operating Activities:    
Net earnings $19,215 $18,998
Adjustments to reconcile net earnings to net cash from operating activities:    
Depreciation 9,498 7,862
Amortization of non-compete agreements and good weill 2,180 1,639
Loss on sale of property, plant and equipment 38 5
Changes in:    
Accounts receivable (68,218) (40,083)
Inventories (21,951) (9,577)
Accounts payable 36,701 23,647
Accrued liabilities and other 9,909 3,209
Net Cash From Operating Activities (12,628) 5,700
     
Cash Flows From Investing Activities:    
Purchases of property, plant and equipment (17,924) (15,623)
Aquisitions, net of cash received (21,559) (32,386)
Proceeds from sale of property, plant and equipment 399 440
Other 512 (520)
Net Cash From Investing Activities (38,572) (48,089)
     
Cash Flows From Financing Activities:    
Net borrowings under revolving credit facilities and notes payable 67,600 48,774
Proceeds from issuance of long-term debt - 1,937
Repayment of long-term debt (9,038) (7,181)
Proceeds from issuance of common stock 783 379
Dividends paid to share holders (792) (808)
Repurchase of common stock (1,255) (2,070)
Net Cash From Financing Activities 57,298 41,031
Net Change in Cash and Cash Equivalents 6,098 (1,358)
Cash and Cash Equivalents, Beginning of Period 2,392 4,106
Cash and Cash Equivalents, End of Period $8,490 $2,748

 

Contact

At the Company: Michael R. Cole, Chief Financial Officer of Universal Forest Products, +1-616-364-6161
At Fleishman Hillard: Jim Ankner, Vice President of Fleishman Hillard, +1-212-453-2198