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UFPI net sales up nearly 12% in 4th quarter 2013 over 2012

Wednesday, February 12, 2014

Universal Forest Products, Inc. (UFPI) Net Sales up nearly 12% in 4th Quarter 2013 over 2012 4th Quarter 2013 Net Earnings of $8 million compare to $1.9 million loss in 4th Quarter 2012

– Annual 2013 results vs. 2012: Net Earnings jump 80% and Net Sales up more than 20% –

GRAND RAPIDS, Mich., Wed., Feb. 12, 2014 – Universal Forest Products, Inc. (Nasdaq: UFPI) today announced 2013 results, including fourth-quarter net sales of $525.7 million, up 11.7 percent over the fourth quarter of 2012. Net earnings in the fourth quarter of 2013 were $8.0 million, or $.40 per diluted share, compared to a loss of $1.9 million, or ($.10) per diluted share, in the fourth quarter of 2012. The Company reported annual net sales of $2.5 billion for 2013, an increase of 20.2 percent over 2012. Annual net earnings in 2013 were $43.1 million, or $2.15 per diluted share, compared to annual net earnings of $23.9 million, or $1.21 per diluted share in 2012.

"We benefited from consistent performance in all markets due to a number of factors in the fourth quarter, not the least of which was the hard work of our people in all areas of our organization," said CEO Matthew J. Missad. "We saw much improved performance in housing and construction versus last year and a high and steadily rising lumber market through most of the fourth quarter. Our industrial sales also were strong. And sales to retail remained steady. Higher volume enabled us to keep our facilities operating at a reasonable level, enhancing our operating leverage."

"I'm pleased with the progress on our growth strategies, including our focus on developing new products, which resulted in $85 million in new product sales in 2013," Missad added. "I'm proud of our performance and I look forward to leveraging our many opportunities to continue these improvements in profitability and sales."

For the fourth quarter of 2013, the lumber composite price was up 11.5 percent over the same period of 2012, resulting in a 7 percent increase in selling prices. Unit sales increased 5 percent on a comparative quarter basis. For the year, the lumber composite price was up 18.2 percent over 2012, resulting in a 12 percent increase in selling prices. Unit sales increased 8 percent for the year.

By market, the Company posted the following 2013 gross sales results:

Retail

  • Fourth quarter: $168.8 million, up 6.6 percent over the same period of 2012
  • Year: $936.6 million, up 11.9 percent over 2012
The Company saw positive results from its efforts to diversify product mix, enhance service, create new products and improve upon existing product lines to grow business with big box and independent retailers alike. The Company's optimism in this market is fueled by healthy comparable sales at big box retailers and by forecasts that call for continued growth in home improvement activities in the coming years.


Construction

  • Fourth quarter: $203.3 million, up 14.5 percent over the fourth quarter of 2012
  • Year: $865.6 million, up 31.3 percent over 2012
This market includes residential and manufactured housing, commercial construction and concrete forming. Both of the housing-related markets-site-built (including multifamily and single-family) and factory built-saw significant growth in the fourth quarter of 2013 and are expected to see continued growth in 2014, according to recent industry forecasts. While lumber prices had a positive impact on these results, the Company's efforts to create steady, long-term growth by diversifying both its business and customer base in the construction arena are proving effective. The Company also experienced share gains in nonresidential construction in the fourth quarter of 2013.

Industrial

  • Fourth quarter: $160.6 million, up 14.0 percent over the same period of 2012
  • Year: $701.7 million, up 19.0 percent over 2012
Industrial production in the United States edged up 0.3 percent in December of 2013 after advancing 1.0 percent in November. Manufacturing output rose 0.4 percent in December of 2013, its fifth consecutive monthly gain, and was up 2.6 percent for the year. The Company continues its successful focus on adding customers and products. The Company also is focused on expanding its reach into non-wood packaging materials and on providing complete packaging solutions to industrial customers.

The Company remains focused on its goals of achieving $3 billion in sales by 2017 and returning to operating margins at normal historical levels. "We continue to seek acquisition targets that are aligned with our strategic objectives to grow in various markets and industries," Missad said. He added that the Company decided not to pursue its recently announced intent to acquire National Fiber, a leading manufacturer of cellulose insulation located in Belchertown, Mass.

"We were disappointed and wish National Fiber well," Missad said. "We'll continue to execute on our growth strategies, maintain our dedication to being better tomorrow than we were today and focus on our customers and their needs, and I am confident we will reach our goals."

CONFERENCE CALL

Universal Forest Products will conduct a conference call to discuss information included in this news release and related matters at 8:30 a.m. ET on Thursday, February 13, 2014. The call will be hosted by CEO Matthew J. Missad and CFO Michael Cole, and will be available for analysts and institutional investors domestically at (866) 515-2910 and internationally at (617) 399-5124. Use conference pass code 79724243. The conference call will be available simultaneously and in its entirety to all interested investors and news media through a webcast at http://www.ufpi.com. A replay of the call will be available through February 20, 2014, domestically at (888) 286-8010 and internationally at (617) 801-6888. Use replay pass code 83519895.