UFPI posts record second-quarter earnings and sales
- Second quarter marks three years of consecutive quarterly records -
GRAND RAPIDS, Mich., Wednesday, July 18, 2018 – Universal Forest Products, Inc. (Nasdaq: UFPI) today reported record financial results for the second quarter ended June 30, 2018, the twelfth consecutive quarter in which the company has reported records in both net sales and net earnings.
“The employees of Universal continue to work hard to set records, and I am privileged to announce the results,” stated CEO Matt Missad. The company’s second-quarter results benefited from unit sales growth and a rising lumber market but were adversely impacted by rising costs for transportation and labor.
“Our focus remains on growing unit sales organically and through acquisitions, while enhancing our sales mix of new and value-added products,” Matt added. “Our recently completed acquisition of North American Container Corp. (NACC) will enhance our goal of being the packaging solutions provider and adds non-wood packaging alternatives to our product offering. Additionally, our increased resource allocation to new products and services is paying dividends, as new product sales year-to-date have increased to $262 million from $211 million in 2017. We’ll also continue to focus on margin improvement and improving productivity through automation, including the expanded use of specialized material processing equipment and robotics.”
Recent Acquisition Activity
In early June, Universal closed on its acquisition of North American Container Corp. (NACC), an industrial packaging manufacturer based in Georgia with sales of approximately $71 million in 2017.
Second Quarter 2018 Highlights (comparisons on a year-over-year basis):
- Diluted earnings per share were $0.71, up from $0.55
- Net earnings attributable to controlling interest were $44.0 million, up 31 percent
- EBITDA was $77.0 million, up 14 percent
- Gross sales increased 21 percent, with gains of 19 percent in the Retail and Industrial markets and 26 percent in the Construction market
- Unit sales contributed 8 percent of gross sales growth; higher prices due to the lumber market contributed 13 percent
- Organic sales contributed 7 percent to unit growth while acquisitions added 1 percent
- New product sales were $153.1 million, up 25 percent
By market, the company reported the following second-quarter 2018 gross sales results:
- $546 million, up 19 percent over the same period of 2017, as unit sales contributed 6 percent and price increases accounted for 13 percent
- Organic sales accounted for all of the unit sales growth
- Sales to big box customers increased 16 percent, while sales to independent customers grew 25 percent
- $371 million, up 26 percent over the same period of 2017, as unit sales contributed 10 percent and price increases accounted for 16 percent
- Organic sales accounted for 9 percent of the unit sales growth, while acquisitions accounted for 1 percent
- The company saw double-digits sales increases to customers in commercial construction (32 percent), manufactured housing (28 percent) and residential construction (22 percent)
- $404 million, up 19 percent over the same period of 2017, as unit sales accounted for 8 percent and price increases accounted for 11 percent
- Organic sales accounted for 5 percent of the unit sales growth, while acquisitions contributed 3 percent
- The company sees favorable growth opportunities in the non-wood packing market and is adding resources to better serve this market
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, July 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 9596393. 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 August 19, 2018, at 855-859-2056, 404-537-3406 or 800-585-8367.