Universal Forest Products, Inc. Meets Earnings Target Reporting $0.25 Per Share
GRAND RAPIDS, Mich., April 24 /PRNewswire/ -- Universal Forest Products® (NASDAQ: UFPI) today announced results for the first quarter of 2001, including net earnings of $5.0 million or $0.25 per share (diluted). Earnings were in line with company targets for the quarter of $0.23 to $0.25 per share (diluted). Net sales for the quarter of $284.6 million, were below the company's target of $300 million to $315 million.
"Although our earnings were in line with our target for the quarter, they could have been better," said William G. Currie, UFP's chief executive officer. "Extremely difficult weather over much of the country negatively impacted sales and overall earnings for the quarter. Weakness in both lumber prices and the manufactured housing market continued to affect our performance, but were anticipated in our forecast."
Given normal weather conditions, the company believes they would have exceeded both earnings and sales targets for the quarter. While there has been a dramatic up-trend in the lumber market over the last several weeks, lumber prices for the first quarter averaged 25% behind the first quarter of 2000. Significant unit sales increases in three of the markets Universal serves were not enough to offset the effect of lower lumber prices during the quarter.
"The manufactured housing industry continues to be adversely effected by excess inventories, increased repossessions, and tight credit conditions. Industry statistics show shipments of manufactured homes were down over 40% for January and February 2001. We have been redirecting our sales efforts and manufacturing capacity to our other three markets since early last year. The results of these efforts is demonstrated by an increase in unit sales," concluded Currie.
ACQUISITIONS
The company closed on three previously announced acquisitions:
- D&R Framing Contactors - The company acquired 50% of the assets of D&R Framing Contractors of Englewood, Colorado on February 28, 2001.
- Thorndale Roof Systems Inc. and Edcor Floor Systems Inc. - On March 2, 2001, the company acquired the remaining 50% of the stock of ECJW Holdings, Inc. and its two subsidiaries, Thorndale Roof Systems Inc. and Edcor Floor Systems Inc. The company acquired the initial 50% in April 2000.
- Sunbelt Wood Components - On April 3, 2001, the company acquired
certain assets of KEVCO's Sunbelt Wood Components Division. The assets include manufacturing facilities in North Carolina, Alabama, Georgia, and Arizona, which serve the manufactured housing market.
All acquisitions are expected to be immediately accretive, and are in line with management's growth objectives.
OUTLOOK
The company noted evidence of a dramatic turnaround in lumber prices. After reaching 8-year lows, the market began an up-trend in the first quarter of 2001. If this trend continues, prices will soon reach levels equal to the second quarter of 2000, positively impacting sales. A significant improvement in the manufactured housing industry is not expected until the end of 2001. The company does expect to continue its growth in the Do-It-Yourself (D-I-Y), site-built construction, and industrial/agricultural markets through the end of the year. With these factors, and current economic conditions in mind, management has set targets for the second quarter of 2001, including sales ranging from $460 million to $490 million, and earnings between $0.63 to $0.67 per share (diluted). The company continues to target sales and earnings per share growth from 7% to 10% on an annual basis. Possible new business acquisitions are not included in the company's forecast.
Universal Forest Products will conduct a conference call to discuss information included in this news release and related matters at 11 a.m. EDT on Tuesday, April 24, 2001. The conference call will be hosted by William G. Currie and will be available for analysts and institutional investors domestically at 800-553-2239 or internationally at 303-224-6998, use conference call ID #1006390. The conference call will be available simultaneously, and in its entirety, to all interested investors and news media through a web cast at www.ufpi.com .
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 , or call 888-BUY-UFPI.
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 Three Months Ended
March 2001/2000
| (In thousands,except per share data) | Quarter Period | |||
|---|---|---|---|---|
| 2001 | 2000 | |||
| Net Sales | $284,638 |
100% | $304,072 |
100% |
| Cost of Goods Sold | 241,519 |
84.85 | 263,661 |
86.71 |
| Gross Profit | 43,119 |
15.15 | 40,411 |
13.29 |
| Selling, General and Administrative Expenses | 32,273 |
11.34 | 27,318 |
8.98 |
| Earnings From Operations | 10,846 |
3.81 | 13,093 |
4.31 |
| Interest Expense | 3,199 |
1.12 | 3,168 |
1.04 |
| Interest Revenue | (72) |
-0.03 | (86) |
-0.03 |
| Earnings Before Income Taxes, Minority Interest and Equity in Earnings (loss) of Investee | 7,719 |
2.72 | 10,011 |
3.30 |
| Income Taxes | 2,856 |
1.00 | 3,953 |
1.30 |
| Earnings Before Minority Interest and Equity in Earnings of Investee | 4,863 |
1.72 | 6,058 |
2.00 |
| Minority Interest | (67) |
-0.02 | (23) |
-0.01 |
| Equity in Earnings of Investee | 181 |
0.05 | 46 |
0.01 |
| Net Earnings | $4,977 |
1.75 | $6,081 |
2.00 |
| Earnings per Share-Basic | $0.25 |
$0.30 |
||
| Earnings per Share-Diluted | $0.25 |
$0.30 |
||
| Weighted Average Shares Outstanding | 19,714 |
20,135 |
||
| Weighted Average Shares Outstanding with Common Stock Equivalents | 20,243 |
20,524 |
||
Consolidated Statements of Earnings
(unaudited)
For the Three Months Ended
March 2001/2000
| (In thousands, except per share data) |
Year to Date | |||
|---|---|---|---|---|
| 2001 | 2000 | |||
| Net Sales | $284,638 |
100% | $304,072 |
100% |
| Cost of Goods Sold | 241,519 |
84.85 | 263,661 |
86.71 |
| Gross Profit | 43,119 |
15.15 | 40,411 |
13.29 |
| Selling, General and Administrative Expenses | 32,273 |
11.34 | 27,318 |
8.98 |
| Earnings From Operations | 10,846 |
3.81 | 13,093 |
4.31 |
| Interest Expense | 3,199 |
1.12 | 3,168 |
1.04 |
| Interest Revenue | (72) |
-0.03 | (86) |
-0.03 |
| Earnings Before Income Taxes, Minority Interest, and Equity in Earnings (loss) of Investee | 7,719 |
2.72 | 10,011 |
3.30 |
| Income Taxes | 2,856 |
1.00 | 3,953 |
1.30 |
| Earnings Before Minority Interest and Equity Earnings of Investee | 4,863 |
1.72 | 6,058 |
2.00 |
| Minority Interest | (67) |
-0.02 | (23) |
-0.01 |
| Equity in Earnings of Investee | 181 |
0.05 | 46 |
0.01 |
| Net Earnings | $4,977 |
1.75 | $6,081 |
2.00 |
| Earnings per Share-Basic | $0.25 |
$0.30 |
||
| Earnings per Share-Diluted | $0.25 |
$0.30 |
||
| Weighted Average Shares Outstanding | 19,714 |
20,135 |
||
| Weighted Average Shares Outstanding with Common Stock Equivalents | 20,243 |
20,524 |
||
Supplemental Sales Data
| Quarter Period | ||||
|---|---|---|---|---|
| Market Classification | 2001 | 2000 | ||
| Do-It-Yourself/Retail | $127,704 |
45% | $134,280 |
44% |
| Site-Built Construction | 62,198 |
22% | 48,615 |
16% |
| Manufactured Housing | 50,835 |
18% | 78,182 |
26% |
| Industrial and Other | 43,901 |
15% | 42,995 |
14% |
| Total | $284,638 |
100% | $304,072 |
100% |
| Year to Date | ||||
|---|---|---|---|---|
| Market Classification | 2001 | 2000 | ||
| Do-It-Yourself/Retail | $127,704 |
45% | $134,280 |
44% |
| Site-Built Construction | 62,198 |
22% | 48,615 |
16% |
| Manufactured Housing | 50,835 |
18% | 78,182 |
26% |
| Industrial and Other | 43,901 |
15% | 42,995 |
14% |
| Total | $284,638 |
100% | $304,072 |
100% |
Consolidated Balance Sheets (unaudited)
March 2001/2000
| Assets | Liabilities and Shareholders' Equity | ||||
|---|---|---|---|---|---|
| 2001 | 2000 | 2001 | 2000 | ||
| Current Assets | Current Liabilities | ||||
| Cash and cash equivalents | $5,273 |
$2,405 | Notes payable | $795 |
$1,428 |
| Restricted cash equivalents | 1,281 |
- | |||
| Accounts receivable | 105,338 |
107,051 | Accounts payable and accrued liabilities | 89,798 |
96,127 |
| Inventories | 148,187 |
159,629 | |||
| Current portion of long-term debt and capital leases | 18,260 |
7,277 | |||
| Other debt and current assets | 8,852 |
7,231 | |||
| Total Current Assets | 268,931 |
276,316 | Total Current Liabilities | 108,853 |
104,832 |
| Other Assets | 11,758 |
10,988 | Long-Term Debt and Capital Leases, less current portion | 197,336 |
191,702 |
| Goodwill and Non-Compete | 113,671 |
92,424 | Other Liabilities | 18,458 |
16,662 |
| Property, Plant and Equipment, Net | 170,752 |
152,432 | Shareholders' Equity | 240,465 |
218,964 |
| Total Assets | $565,115 |
$532,160 | Total Liabilities and Shareholders' Equity | $565,112 |
$532,160 |
Consolidated Statements of Cash
Flows (unaudited)
For the Three Months Ended
March 2001/2000
| (In thousands) | 2001 | 2000 |
|---|---|---|
| Cash Flows From Operating Activities: | ||
| Net earnings | $4,977 |
$6,081 |
| Adjustments to reconcile net earnings to net cash from operating activities: | ||
| Depreciation | 4,577 |
3,830 |
| Amortization of non-compete agreements and goodwill | 1,045 |
791 |
| (Gain) loss on sale of property, plant and equipment | - |
(88) |
| Changes in: | ||
| Accounts receivable | (37,032) |
(37,040) |
| Inventories | (23,587) |
(28,095) |
| Accounts payable | 22,600 |
22,737 |
| Accrued liabilities and other | (7,198) |
(5,089) |
| Net Cash From Operating Activities | (34,618) |
(36,873) |
| Cash Flows From Investing Activities: | ||
| Purchases of property, plant and equipment | (7,781) |
(7,271) |
| Aquisitions, net of cash received | (10,498) |
- |
| Proceeds from sale of property, plant and equipment | 481 |
209 |
| Other | (391) |
(261) |
| Net Cash From Investing Activities | (18,189) |
(7,323) |
| Cash Flows From Financing Activities: | ||
| Net borrowings (repayments) under revolving credit facilities and notes payable | 58,759 |
42,908 |
| Proceeds from issuance of long-term debt | - |
1,949 |
| Repayment of long-term debt | (2,864) |
(379) |
| Proceeds from issuance of common stock | 48 |
65 |
| Repurchase of common stock | (255) |
(2,048) |
| Net Cash From Financing Activities | 55,688 |
42,495 |
| Net Change in Cash and Cash Equivalents | 2,881 |
(1,701) |
| Cash and Cash Equivalents, Beginning of Year | 2,392 |
4,106 |
| Cash and Cash Equivalents, End of Period | $5,273 |
$2,405 |
Source: Universal Forest Products®, Inc.
Contact
| At the Company: | Michael Cole , Chief Financial Officer, 616/364-6161 |
| At Fleishman Hillard: | Matthew Della Croce, Vice President, 212/453-2316 |