Universal Forest Products Posts Record Second Quarter Results
GRAND RAPIDS, Mich., Jul 15, 2002 /PRNewswire-FirstCall via COMTEX/ -- Universal Forest Products (NASDAQ: UFPI) today announced record results for the second quarter and first six months of 2002, including diluted earnings per share of $0.82 for the quarter and $1.14 for the year-to-date. Diluted earnings per share reported for the second quarter and first six months of 2001 were $0.70 and $0.95, respectively.
Net sales for the quarter were $504.9 million, an increase of 4.1% over sales of $485.2 million in the second quarter of 2001, despite a steep decline in lumber prices that were down as much as 29% compared to last year. Net sales for the first six months of 2002 were $846.6 million, a 10.0% increase compared to sales of $769.2 million for the same period of 2001.
"We were able to absorb one of the worst declines in the lumber market I've seen in my 31 years at Universal -- at a time when our operations are at maximum inventory levels for the spring selling season -- and still stay on pace to meet our targets," said UFP's vice chairman and CEO William G. Currie. "Our ability to show record sales and earnings for the second quarter and the first six months of 2002 is a powerful statement about the strength of Universal's business processes and the spirit of our people."
Universal posted the following second quarter sales by market:
-- $265.4 million in D-I-Y/retail, down 2% from
last year;
-- $88.9 million in site-built construction, an increase of 9%
over lasty ear;
-- $80.9 million in manufactured housing, an 8% increase compared
to last year; and
-- $69.8 million in industrial/agricultural, a 22% increase over
last year.
The Company increased unit sales in each of its four markets. However, these increases were partially offset by a steep decline in lumber prices beginning in April of 2002, which adversely impacted the Company's second quarter selling prices compared to the same period last year.
The Company continues to target annual sales growth of 6% to 10% and diluted earnings per share growth of 18% to 22%, which includes the effect of discontinuing goodwill amortization in 2002.
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, July 16, 2002. The conference call will be hosted by William G. Currie and will be available for analysts and institutional investors domestically at 800-521-5414 or internationally at 303-224-6997. Use conference call ID #2041483. 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 , click on Investor Relations.
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 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.
Financial highlights to follow
Consolidated Statements of Earnings
(unaudited)
For the Six Months Ended
June 2002/2001
| (In thousands, except per share data) |
Quarter Period | |||
|---|---|---|---|---|
| 2002 | 2001 | |||
| Net Sales |
$504,944
|
100% |
$485,153
|
100% |
| Cost of Goods Sold |
436,321
|
86.41 |
418,756
|
86.31 |
| Gross Profit |
68,623
|
13.59 |
66,397
|
13.69 |
| Selling, General and Administrative Expenses |
41,345
|
8.19 |
38,869
|
8.01 |
| Earnings From Operations |
27,278
|
5.40 |
27,528
|
5.67 |
| Interest Expense |
3,047
|
0.60 |
3,539
|
0.73 |
| Interest Revenue |
(52)
|
-0.01 |
(245)
|
-0.05 |
| Gain on Sale of Assets |
(1,082)
|
-0.21 |
-
|
0.00 |
|
1,913
|
0.38 |
3,294
|
0.68 | |
| Earnings Before Income Taxes, Minority Interest and Equity in Earnings (Loss) of Investee |
25,365
|
5.02 |
24,234
|
5.00 |
| Income Taxes |
9,400
|
1.86 |
9,179
|
1.89 |
| Earnings Before Minority Interest and Equity in Earnings (Loss) of Investee |
15,965
|
3.16 |
15,055
|
3.10 |
| Minority Interest |
(611)
|
-0.12 |
(794)
|
-0.16 |
| Equity in Earnings (Loss) of Investee |
-
|
0.00 |
(23)
|
0.00 |
| Reported Net Earnings |
$15,354
|
3.04 |
$14,238
|
2.93 |
| Add: Goodwill Amortization,
net of tax |
761
|
0.16 | ||
| Adjusted Net Earnings |
$15,354
|
3.04 |
$14,999
|
3.09 |
| Reported Earnings per Share-Basic |
$0.86
|
$0.72
|
||
| Add: Goodwill Amortization,
net of tax |
0.04
|
|||
| Adjusted Earnings per Share-Basic |
$0.86
|
$0.76
|
||
| Reported Earnings per Share-Diluted |
$0.82
|
$0.70
|
||
| Add: Goodwill Amortization,
net of tax |
0.04
|
|||
| Adjusted Earnings per Share-Diluted |
$0.82
|
$0.74
|
||
| Weighted Average Shares Outstanding |
17,884
|
19,792
|
||
| Weighted Average Shares Outstanding with Common Stock Equivalents |
18,705
|
20,388
|
||
| (In thousands, except per share data) |
Year to Date | |||
|---|---|---|---|---|
| 2002 | 2001 | |||
| Net Sales |
$846,600
|
100% |
$769,222
|
100% |
| Cost of Goods Sold |
726,700
|
85.84 |
659,706
|
85.76 |
| Gross Profit |
119,900
|
14.16 |
109,516
|
14.24 |
| Selling, General and Administrative Expenses |
79,143
|
9.35 |
71,142
|
9.25 |
| Earnings From Operations |
40,757
|
4.81 |
38,374
|
4.99 |
| Interest Expense |
5,955
|
0.70 |
6,738
|
0.88 |
| Interest Revenue |
(165)
|
-0.02 |
(317)
|
-0.04 |
| Gain on Sale of Assets |
(1,082)
|
-0.13 |
-
|
0.00 |
|
4,708
|
0.56 |
6,421
|
0.83 | |
| Earnings Before Income Taxes, Minority Interest and Equity in Earnings (Loss) of Investee |
36,049
|
4.26 |
31,953
|
4.15 |
| Income Taxes |
13,373
|
1.58 |
12,035
|
1.56 |
| Earnings Before Minority Interest and Equity in Earnings (Loss) of Investee |
22,676
|
2.68 |
19,918
|
2.59 |
| Minority Interest |
(1,240)
|
-0.15 |
(861)
|
-0.11 |
| Equity in Earnings (Loss) of Investee |
-
|
0.00 |
158
|
0.02 |
| Reported Net Earnings |
$21,436
|
2.53 |
$19,215
|
2.50 |
| Add: Goodwill Amortization,
net of tax |
1,457
|
0.19 | ||
| Adjusted Net Earnings |
$21,436
|
2.53 |
$20,672
|
2.69 |
| Reported Earnings per Share-Basic |
$1.19
|
$0.97
|
||
| Add: Goodwill Amortization,
net of tax |
0.07
|
|||
| Adjusted Earnings per Share-Basic |
$1.19
|
$1.05
|
||
| Reported Earnings per Share-Diluted |
$1.14
|
$0.95
|
||
| Add: Goodwill Amortization,
net of tax |
0.07
|
|||
| Adjusted Earnings per Share-Diluted |
$1.14
|
$1.02
|
||
| Weighted Average Shares Outstanding |
18,047
|
19,753
|
||
| Weighted Average Shares Outstanding with Common Stock Equivalents |
18,865
|
20,315
|
||
Supplemental Sales Data
| Quarter Period | ||||
|---|---|---|---|---|
| Market Classification | 2002 | 2001 | ||
| Do-It-Yourself |
$265,359
|
52% |
$271,305
|
56% |
| Site-Built Construction |
88,901
|
18% |
81,773
|
17% |
| Manufactured Housing |
80,850
|
16% |
74,618
|
15% |
| Industrial and Other |
69,834
|
14% |
57,457
|
12% |
| Total |
$504,944
|
100% |
$485,153
|
100% |
| Year to Date | ||||
|---|---|---|---|---|
| Market Classification | 2002 | 2001 | ||
| Do-It-Yourself |
$412,590
|
49% |
$398,998
|
52% |
| Site-Built Construction |
157,385
|
19% |
143,500
|
19% |
| Manufactured Housing |
148,047
|
17% |
124,104
|
16% |
| Industrial and Other |
128,578
|
15% |
102,620
|
13% |
| Total |
$846,600
|
100% |
$769,222
|
100% |
Consolidated Balance Sheets (unaudited)
June 2002/2001
| Assets | Liabilities and Shareholders' Equity | ||||
|---|---|---|---|---|---|
| 2002 | 2001 | 2002 | 2001 | ||
| Current Assets | Current Liabilities | ||||
| Cash and cash equivalents |
$18,020
|
$8,490 | Notes payable |
$2,001
|
$1,020 |
| Restricted cash equivalents |
-
|
723 | Accounts payable and accrued liabilities |
140,699
|
119,875 |
| Accounts receivable |
178,017
|
140,698 | Current portion of long-term debt and capital leases |
19,025
|
21,360 |
| Inventories |
137,999
|
148,069 | |||
| Other current assets |
3,425
|
8,210 | |||
| Total Current Assets |
337,461
|
306,190 | Total Current Liabilities |
161,725
|
142,255 |
| Other Assets |
6,334
|
11,698 | Long-Term Debt and Capital Leases, less current portion |
219,675
|
197,197 |
| Goodwill and Non-Compete |
125,583
|
114,903 | Other Liabilities |
25,180
|
18,862 |
| Property, Plant and Equipment, Net |
188,677
|
179,581 | Shareholders' Equity |
251,475
|
254,058 |
| Total Assets |
$658,055
|
$612,372 | Total Liabilities and Shareholders' Equity |
$658,055
|
$612,372 |
Consolidated Statements of CashFlows (unaudited)
For the Six Months Ended
June 2002/2001
| (In thousands) | 2002 | 2001 |
|---|---|---|
| Cash Flows From Operating Activities: | ||
| Net earnings | $21,436 | $19,215 |
| Adjustments to reconcile net earnings to net cash from operating activities: | ||
| Depreciation | 11,322 | 9,498 |
| Amortization of intangibles | 587 | 2,180 |
| (Gain) / Loss on sale or impairment of property, plant and equipment | (949) | 38 |
| Changes in: | ||
| Accounts receivable | (89,290) | (68,218) |
| Inventories | (15,194) | (21,951) |
| Accounts payable | 43,027 | 36,701 |
| Accrued liabilities and other | 9,347 | 9,909 |
| Net Cash From Operating Activities | (19,714) | (12,628) |
| Cash Flows From Investing Activities: | ||
| Purchases of property, plant and equipment | (13,481) | (17,924) |
| Purchases of licensing agreements | (2,000) | - |
| Aquisitions, net of cash received | (359) | (21,559) |
| Proceeds from sale of property, plant and equipment | 2,545 | 399 |
| Other | 1,094 | 512 |
| Net Cash From Investing Activities | (12,201) | (38,572) |
| Cash Flows From Financing Activities: | ||
| Net borrowings under revolving credit facilities and notes payable | 71,827 | 67,600 |
| Repayment of long-term debt | (7,557) | (9,038) |
| Proceeds from issuance of common stock | 716 | 783 |
| Distributions to minority shareholder | (585) | - |
| Dividends paid to shareholders | (806) | (792) |
| Repurchase of common stock | (36,547) | (1,255) |
| Net Cash From Financing Activities | 27,048 | 57,298 |
| Net Change in Cash and Cash Equivalents | (4,867) | 6,098 |
| Cash and Cash Equivalents, Beginning of Period | 22,887 | 2,392 |
| Cash and Cash Equivalents, End of Period | $18,020 | $8,490 |
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 |