Universal Forest Products reports record third-quarter results
Net earnings for the third quarter increase 31%
The Company raises annual target for net earnings growth to 22%–27%
GRAND RAPIDS, Mich., October 10, 2005 – Universal Forest Products (NASDAQ: UFPI) today announced record third-quarter results with net earnings of $19.2 million, an increase of 31.1% over net earnings for the same period in 2004. Diluted earnings per share were $1.00, an increase of 28.2% over the same period last year.
Year-to-date net earnings were $51.2 million, an increase of 28.1% over year-to-date net earnings for 2004. Year-to-date diluted earnings per share were $2.69, a 26.3% increase over the first nine months of 2004.
Net sales for the quarter were $721.5 million, up 1.7% over net sales of $709.3 million for the third quarter of 2004. Net sales for the first nine months of 2005 were $2.04 billion, up 6.3% over net sales of $1.92 billion for the same period in 2004.
“These results underscore the power of focusing on doing things well and on improving the operations of both our new and our under-performing plants,” said Universal CEO and Vice Chairman William G. Currie. “We’ve grown a culture of continuous improvement that drives our performance and ensures we execute to the highest standards.”
Currie noted that COO Michael B. Glenn instituted a program early in the year to focus on and reward innovation that is creating cost savings and revenue enhancements throughout the Company.
In addition, Currie said operations that were added to the company in 2004 have become profitable and are having a positive impact on earnings as are the Company’s product mix and its sales of value-added products.
By market, Universal posted third-quarter sales of:
- $279.6 million in D-I-Y/retail, down 1.0% over the same period last year. This market saw unit sales decline by 8% over the same period last year, due, in part, to the Company’s strategies to walk away from business that doesn’t meet profitability expectations and to better balance its business by growing its other markets faster than the DIY/retail market.
- $205.0 million in site-built construction, an increase of 4.8% over last year. This market saw an increase in unit sales of 7% over the third quarter 2004.
- $133.2 million in industrial, up 5.7% over the third quarter 2004. Unit sales to this market were up 12% over the same period last year.
- $103.6 million in manufactured housing, a decrease of 1.5% from last year. Unit sales to this market, however, were up 4% over the same period in 2004.
OUTLOOK
Based on anticipated growth in its business for the balance of 2005 and on current market and economic conditions, the Company raised its annual target range for net earnings growth to 22%–27% (from a range of 15%–20%) for 2005. In addition, while the Company is meeting its organic growth goals, it has closed on fewer acquisitions than anticipated; therefore, the Company revised its annual target range for unit sales growth to 4%–7% (from 7%–12%). The Company continues to pursue attractive acquisition opportunities and believes that acquisitions will, as they have in the past, play an important role in the Company's long-term growth strategy.
Universal Forest Products will conduct a conference call to discuss information included in this news release and related matters at 11:00 a.m. EDT on Tuesday, October 11, 2005. The conference call will be hosted by William G. Currie and will be available for analysts and institutional investors domestically at (866) 814-8483 or internationally at (703) 639-1373. Use conference call ID #785085. 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.
Celebrating 50 years of business, Universal Forest Products is headquartered in Grand Rapids, MI. The Company markets, manufactures and engineers wood and wood-alternative 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 and wood-alternative packaging for various industries. The Company also provides framing services for site-built construction customers. The Company has approximately 9,500 employees who work in nearly 100 facilities in North America. Universal had 2004 sales of $2.45 billion. For information about Universal Forest Products on the Internet, please visit the Company's 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.