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UFPI reports record first-quarter sales, net earnings and EBITDA

Wednesday, April 24, 2019

UFPI reports record first-quarter sales, net earnings and EBITDA
 - Unit sales up 7 percent, gross profits up 18 percent and EBITDA up 25 percent -
- Semiannual dividend increased 11 percent -

GRAND RAPIDS, Mich., Wednesday, April 24, 2019 – Universal Forest Products, Inc. (Nasdaq: UFPI) today announced record net sales, net earnings and EBITDA for the first quarter of 2019. The company also announced the UFPI Board of Directors voted to increase the semiannual dividend from $0.18 to $0.20 per share at their April 24, 2019, meeting. The dividend is payable on June 15, 2019, to shareholders of record on June 1, 2019.

“I am very proud of the way our teams are executing their businesses by producing record results in a variety of market conditions,” stated CEO Matt Missad. “We grew our margins during the quarter as a result of timely position buying and the contributions of new products and new business. Our investments in automation and efficiency are also beginning to pay dividends, helping us earn more new business and reduce our overall costs of production.” 

While gross sales were impacted by lower lumber pricing, the company’s unit sales increased 7 percent in the first quarter over the same period last year, driven by organic sales growth, acquisitions and increases in value-added sales. The company’s mix of value-added sales relative to commodity sales improved from 62 percent in the first quarter of 2018 to more than 66 percent in the first quarter of 2019. The increase was largely led by unit sales increases in the industrial and construction markets, which grew 16 percent and 5 percent, respectively. Overall, new product sales grew 8 percent. Opportunistic lumber purchases in the fourth quarter of 2018, when prices were low, contributed significantly to the year-over-year increase in gross profits for the first quarter.

“We continue to focus on new products and services and moving up the value chain for our customers. By utilizing our design, engineering, manufacturing and project management capabilities, we are providing both unique and comprehensive solutions to our customers,” added Matt.

The company continues to explore acquisition opportunities that provide a strategic advantage, have scalability within the company and provide a reasonable return on investment.

First Quarter 2019 Highlights (comparisons on a year-over-year basis):

  • Excluding the pre-tax gain of $7 million on the sale of certain real estate in the first quarter of 2018, operating profit of $48.5 million was up 30 percent and net earnings of $35.5 million was up 28 percent
  • EBITDA of $65.9 million, up 25 percent
  • Net sales of $1.02 billion represented a 2 percent increase
  • Unit sales accounted for 7 percent of the company’s gross sales growth; organic sales contributed 4 percent of the growth while acquisitions added 3 percent.  Lower lumber prices reduced gross sales by 5 percent.
  • New product sales were $99.9 million, up 8 percent

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

Retail

  • $357.5 million in gross sales, down 3 percent compared to the first quarter of 2018. A unit sales increase of 3 percent was offset by selling prices that were 6 percent lower. Retail sales in the first quarter were adversely impacted by challenging weather in February that delayed building and renovation projects.

Industrial

  • $329.7 million in gross sales, up 15 percent over the first quarter of 2018. A unit sales increase of 16 percent was offset by lower selling prices of 1 percent.  Organic growth contributed 6 percent of the unit sales increase; acquisitions contributed 10 percent.

    Construction

  • $344.4 million in gross sales, down 3 percent compared to the first quarter of 2018, due to a 5 percent increase in unit sales and an 8 percent decrease in selling prices. Unit sales to commercial construction and residential construction customers rose 15 and 6 percent, respectively, while unit sales to manufactured housing customers fell 6 percent during the quarter. The decrease in manufactured housing sales is primarily attributable to a drop in shipment levels to several Gulf Coast states that experienced higher shipments in 2017 and early 2018 due to hurricane damage.

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 25, 2019. 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 4478205. 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 25, 2019, at 855-859-2056, 404-537-3406 or 800-585-5367.