Universal Forest Products, Inc. Announces Strong Third Quarter Results
Reports 20% Increase in Earnings
GRAND RAPIDS, Mich., Oct. 16 /PRNewswire/ -- Universal Forest Products, Inc. (NASDAQ: UFPI) today announced third quarter net earnings of $9.8 million or $0.48 per share (diluted), a 20% increase over net earnings of $8.1 million or $0.40 per share (diluted) reported for the third quarter of 2000. Net sales for the quarter were $432.7 million, an increase of 16.6% over net sales of $371.0 million reported for the same quarter last year.
For the first nine months of 2001, net earnings were $29.0 million or $1.43 per share (diluted) compared to $27.1 million or $1.32 per share (diluted) a year ago. Net sales for the first nine months of 2001 were $1.204 billion, an 8.8% increase over net sales of $1.107 billion reported for the first nine months of 2000.
"Universal continues to deliver strong sales and earnings results, despite challenges in this economic environment," said William G. Currie, UFP's chief executive officer. "Our financial performance this quarter demonstrates the success of our business strategy to diversify in four key business segments and expand geographically across the U.S. We saw double-digit unit sales growth in each of our four key markets and the success is due to Universal's employees who are focused on executing our business strategy and delivering on our financial objectives.
"We continue to strengthen our business through successful acquisitions. These transactions, most recently P&R Truss, will enable UFP to continue to enhance its existing business," said Currie. The Company closed on its acquisition of P&R Truss on October 15.
Currie noted that Universal's sales to the site-built construction, industrial, manufactured housing, and Do-It-Yourself (D-I-Y) markets were up 32.1%, 14.7%, 14.6%, and 12.1%, respectively, for the quarter. Although overall lumber prices increased temporarily in August, they had little impact on the Company's reported sales for the third quarter.
Currie attributed a portion of the Company's sales increases in two markets -- site-built construction and manufactured housing -- to recent acquisitions of Superior Truss, D&R Framing Contractors, and the Sunbelt Wood Components division of Kevco Manufacturing.
"We remain cautious about the economy. The results we experienced during the quarter supports our fourth quarter guidance as reflected in UFP's outlook," concluded Currie.
Outlook
The Company expects to continue to grow unit sales to each of its four key markets for the balance of the year. With current economic conditions in mind, management has set the following targets for the fourth quarter of 2001:
- Sales ranging from $310 million to $325 million
- Earnings from $0.16 to $0.19 per share (diluted)
Universal Forest Products will conduct a conference call to discuss information in this news release and related matters at 11 a.m. EDT on Tuesday, October 16, 2001. The conference call will be hosted by William G. Currie and will be available for analysts and institutional investors domestically at 800-521-5426 or internationally at 303-224-6999. Use conference call ID #1258822. 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 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 contact the company's investor relations 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.
Highlights to follow:
Consolidated Statements of Earnings (unaudited)
For the Nine Months Ended
September 2001/2000
| (In thousands,except per share data) | Quarter Period | |||
|---|---|---|---|---|
| 2001 | 2000 | |||
| Net Sales | $432,689 | 100% | $371,030 | 100% |
| Cost of Goods Sold | 376,507 | 87.02 | 322,103 | 86.81 |
| Gross Profit | 56,182 | 12.98 | 48,927 | 13.19 |
| Selling, General and Administrative Expenses | 37,525 | 8.67 | 31,885 | 8.59 |
| Earnings From Operations | 18,657 | 4.31 | 17,042 | 4.60 |
| Interest Expense | 2,948 | 0.68 | 3,648 | 0.98 |
| Interest Revenue | (151) | -0.03 | (135) | -0.04 |
| 2,797 | 0.65 | 3,513 | 0.94 | |
| Earnings Before Income Taxes, Minority Interest and Equity in Earnings (loss) of Investee | 15,860 | 3.66 | 13,529 | 3.66 |
| Income Taxes | 5,519 | 1.28 | 5,177 | 1.40 |
| Earnings Before Minority Interest and Equity in Earnings of Investee | 10,341 | 2.38 | 8,352 | 2.26 |
| Minority Interest | (618) | -0.14 | (144) | -0.04 |
| Equity in Earnings of Investee | 85 | 0.03 | (60) | -0.02 |
| Net Earnings | $9,808 | 2.27 | $8,148 | 2.20 |
| Earnings per Share-Basic | $0.50 | $0.40 | ||
| Earnings per Share-Diluted | $0.48 | $0.40 | ||
| Weighted Average Shares Outstanding | 19,803 | 20,123 | ||
| Weighted Average Shares Outstanding with Common Stock Equivalents | 20,450 | 20,481 | ||
Consolidated Statements of Earnings (unaudited)
For the Nine Months Ended
September 2001/2000
| (In thousands except for per share data) | Year to Date | |||
|---|---|---|---|---|
| 2001 | 2000 | |||
| Net Sales | $1,203,675 | 100% | $1,106,680 | 100% |
| Cost of Goods Sold | 1,037,977 | 86.23 | 960,044 | 86.75 |
| Gross Profit | 165,698 | 13.77 | 146,636 | 13.25 |
| Selling, General and Administrative Expenses | 108,667 | 9.03 | 91,248 | 8.25 |
| Earnings From Operations | 57,031 | 4.74 | 55,388 | 5.00 |
| Interest Expense | 9,686 | 0.80 | 10,423 | 0.94 |
| Interest Revenue | (468) | -0.04 | (381) | -0.03 |
| 9,218 | 0.76 | 10,042 | 0.91 | |
| Earnings Before Income Taxes, Minority Interest, and Equity in Earnings (loss) of Investee | 47,813 | 3.98 | 45,346 | 4.09 |
| Income Taxes | 17,554 | 1.46 | 17,693 | 1.60 |
| Earnings Before Minority Interest and Equity Earnings of Investee | 30,259 | 2.52 | 27,653 | 2.49 |
| Minority Interest | (1,479) | -0.12 | (474) | -0.04 |
| Equity in Earnings of Investee | 243 | 0.01 | (33) | 0.00 |
| Net Earnings | $29,023 | 2.41 | $27,146 | 2.45 |
| Earnings per Share-Basic | $1.47 | $1.35 | ||
| Earnings per Share-Diluted | $1.43 | $1.32 | ||
| Weighted Average Shares Outstanding | 19,769 | 20,134 | ||
| Weighted Average Shares Outstanding with Common Stock Equivalents | 20,360 | 20,502 | ||
Supplemental Sales Data
| Quarter Period | ||||
|---|---|---|---|---|
| Market Classification | 2001 | 2000 | ||
| Do-It-Yourself/Retail | $202,380 | 46% | $180,572 | 49% |
| Site-Built Construction | 90,478 | 21% | 68,496 | 18% |
| Manufactured Housing | 84,645 | 20% | 73,843 | 20% |
| Industrial and Other | 55,186 | 13% | 48,119 | 13% |
| Total | $432,689 | 100% | $371,030 | 100% |
| Year to Date | ||||
|---|---|---|---|---|
| Market Classification | 2001 | 2000 | ||
| Do-It-Yourself/Retail | $602,850 | 51% | $546,191 | 50% |
| Site-Built Construction | 234,300 | 19% | 180,401 | 16% |
| Manufactured Housing | 209,221 | 17% | 234,346 | 21% |
| Industrial and Other | 157,304 | 13% | 145,742 | 13% |
| Total | $1,203,675 | 100% | $1,106,680 | 100% |
Consolidated Balance Sheets (unaudited)
September 2001/2000
| Assets | Liabilities and Shareholders' Equity | ||||
|---|---|---|---|---|---|
| 2001 | 2000 | 2001 | 2000 | ||
| Current Assets | Current Liabilities | ||||
| Cash and cash equivalents | $6,310 | $7,780 | Notes payable | $669 | $2,860 |
| Restricted cash equivalents | 411 | - | Accounts payable and accrued liabilities | 108,023 | 95,524 |
| Accounts receivable | 125,150 | 100,430 | Inventories | 122,228 | 114,139 |
| Other current assets | 7,410 | 7,046 | Current portion of long-term debt and capital leases | 20,952 | 7,291 |
| Total Current Assets | 261,509 | 229,395 | Total Current Liabilities | 129,644 | 105,675 |
| Other Assets | 11,572 | 11,446 | Long-Term Debt and Capital Leases, less current portion | 152,807 | 153,836 |
| Goodwill and Non-Compete | 113,652 | 106,547 | Other Liabilities | 18,728 | 18,149 |
| Property, Plant and Equipment, Net | 177,944 | 168,276 | Shareholders' Equity | 263,498 | 238,004 |
| Total Assets | $564,677 | $515,664 | Total Liabilities and Shareholders' Equity | $564,677 | $515,664 |
>Consolidated Statements of Cash
Flows (unaudited)
For the Nine Months Ended
September 2001/2000
| (In thousands) | 2001 | 2000 |
|---|---|---|
| Cash Flows From Operating Activities: | ||
| Net earnings | $29,023 | $27,146 |
| Adjustments to reconcile net earnings to net cash from operating activities: | ||
| Depreciation | 14,586 | 12,361 |
| Amortization of non-compete agreements and goodwill | 3,348 | 2,673 |
| Loss on sale of property, plant and equipment | 588 | 72 |
| Changes in: | ||
| Accounts receivable | (52,660) | (21,470) |
| Inventories | 3,891 | 22,053 |
| Accounts payable | 20,786 | 6,822 |
| Accrued liabilities and other | 15,096 | 7,901 |
| Net Cash From Operating Activities | 34,658 | 57,558 |
| Cash Flows From Investing Activities: | ||
| Purchases of property, plant and equipment | (22,166) | (23,677) |
| Aquisitions, net of cash received | (21,559) | (32,561) |
| Proceeds from sale of property, plant and equipment | 886 | 642 |
| Other | 1,608 | (816) |
| Net Cash From Investing Activities | (41,231) | (56,412) |
| Cash Flows From Financing Activities: | ||
| Net borrowings under revolving credit facilities and notes payable | 23,106 | 11,950 |
| Proceeds from issuance of long-term debt | - | 2,118 |
| Repayment of long-term debt | (9,838) | (7,535) |
| Proceeds from issuance of common stock | 827 | 431 |
| Distributions to minority shareholder | (1,275) | - |
| Dividends paid to shareholders | (792) | (808) |
| Repurchase of common stock | (1,537) | (3,628) |
| Net Cash From Financing Activities | 10,491 | 2,528 |
| Net Change in Cash and Cash Equivalents | 3,918 | 3,674 |
| Cash and Cash Equivalents, Beginning of Year | 2,392 | 4,106 |
| Cash and Cash Equivalents, End of Period | $6,310 | $7,780 |
Source: Universal Forest Products®, Inc.
Contact
| At the Company: | Michael Cole , Chief Financial Officer, 616/364-6161 |
| At Fleishman Hillard: | James Ankner , Vice President of Fleishman Hillard, 212/453-2198 |