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UFPI posts record first-quarter earnings and sales

Wednesday, April 18, 2018

-UFPI posts record first-quarter earnings and sales-

GRAND RAPIDS, Mich., Wednesday, April 18, 2018 – Universal Forest Products, Inc. (Nasdaq: UFPI) today reported record financial results for the first quarter ended March 31, 2018, the eleventh consecutive quarter in which the company has reported records in both net sales and net earnings.

“The dedicated employees of Universal continued to produce record results despite some weather-related shutdowns. Their performance reflects the strength of our balanced business model and focused approach to growth,” said CEO Matt Missad. “Due to the elevated level of the lumber market, we are focused on unit sales growth, and are pleased that half of our sales growth came from increases in unit sales, including new products. We are excited about the diverse range of products that we have launched during the past several years and are seeing significant growth with a number of them. Individually, most new products don’t have a notable sales impact; however, as a whole, they have a positive impact.

“We remain focused on improving our bottom-line performance through production efficiency improvements from automation and through new, value-added products and services. We also will continue to implement cost-saving initiatives as we integrate our recent acquisitions.”

Recent Acquisition Activity
In January, Universal acquired Naches, Washington-based Spinner Wood Products, a manufacturer of agricultural bins and industrial products, and Great Northern Lumber, a manufacturer of industrial and concrete forming products in the Chicago area. In early April, the company acquired Expert Packaging, an Australian industrial packaging manufacturer, and Fontana Wood Products, an industrial lumber-processing facility in Fontana, California. These recently completed acquisitions are expected to contribute annual sales of approximately $50 million. Universal also recently announced an agreement to acquire certain assets of North American Container Corp. (NACC), an industrial packaging manufacturer based in Georgia with sales of approximately $71 million in 2017.

First Quarter 2018 Highlights (comparisons on a year-over-year basis):

  • Diluted earnings per share were $0.53, up from $0.34. The sale of assets, including real property in Medley, Fla., contributed a net gain of $0.08 to diluted earnings per share.
  • Net earnings attributable to controlling interest were $32.8 million, up 56 percent
  • EBITDA, which excludes the net gain on the sale of assets, was $53.4 million, up 14 percent
  • Gross sales increased 18 percent, with gains of 19 percent in the Retail and Industrial markets and 16 percent in the Construction market
  • Unit sales contributed 9 percent of gross sales growth; higher prices due to the lumber market contributed 9 percent
  • Organic sales contributed 5 percent to unit growth while acquisitions added 4 percent
  • New product sales were $103.9 million, up from $86.2 million

By market, the Company reported the following first-quarter 2018 gross sales results.

Retail

  • $371 million, up 19 percent over the same period of 2017, as unit sales contributed 10 percent and price increases accounted for 9 percent
  • Organic sales contributed 3 percent to unit growth and acquisitions added 7 percent
  • Sales to big box customers increased 15 percent, while sales to independent customers grew 24 percent

Construction

  • $308 million, up 16 percent over the same period of 2017, as unit sales contributed 6 percent and price increases accounted for 10 percent
  • Organic sales contributed 6 percent to unit growth and there was no impact from acquisitions
  • Sales to manufactured housing customers grew 24 percent, while sales to commercial and residential construction customers grew 18 and 7 percent, respectively

Industrial

  • $333 million, up 19 percent over the same period of 2017, as unit sales accounted for 11 percent and price increases accounted for 8 percent
  • Organic sales contributed 7 percent to unit growth and acquisitions added 4 percent
  • The company sees favorable growth opportunities in the Industrial market and plans to continue to expand its presence organically and through acquisitions

 

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, April 19, 2018. 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 866-518-4547, and internationally at 213-660-0879. Use conference pass code 8896458. 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 May 19, 2018, at 855-859-2056, 404-537-3406 or 800-585-5367.