UFPI reports record net earnings
- Net earnings up 24 percent, unit sales up 5 percent -
GRAND RAPIDS, Mich., Wednesday, July 24, 2019 – Universal Forest Products, Inc. (Nasdaq: UFPI) today announced net sales of $1.24 billion and net earnings attributable to controlling interests of $54.5 million, or 88 cents per diluted share, for the quarter ended June 29, 2019. Net earnings were the highest recorded at any time in the company’s history.
“The employees of Universal continue to do a great job growing unit sales, improving our company’s gross profit per unit, and generating robust cash flow despite pressures from rising labor costs and significant fluctuations in the lumber market,” said CEO Matthew J. Missad. “Our strong results are evidence that we are pursuing the right strategies to make our business more efficient and grow through new, value-added products.”
The company’s mix of value-added sales relative to commodity sales improved from 60 percent in the second quarter of 2018 to 67 percent in the second quarter of 2019, and new product sales grew 18 percent over the same period of 2018. Although significantly lower lumber pricing affected the company’s second-quarter net sales, unit sales increased 5 percent over the same period of last year, driven mostly by organic sales growth.
“I am pleased we experienced such strong growth with new products in our retail and industrial markets,” added Missad. “We will continue to closely manage our SG&A expenses, including those needed to grow our value-added products, so that we can better leverage these expenses as we grow revenue.”
Second Quarter 2019 Highlights (comparisons on a year-over-year basis):
- Operating profit of $74.2 million was up 22 percent and net earnings of $54.5 million was up 24 percent
- EBITDA of $90.8 million was up 18 percent
- Net sales of $1.24 billion represented a 4 percent decrease; lower lumber prices contributed significantly to the gross sales reduction as selling prices were down by 9 percent.
- Unit sales grew 5 percent; organic sales accounted for 4 percent of the growth while acquisitions added 1 percent.
- New product sales were $175.3 million, up 18 percent
- Core SG&A as a percentage of gross profit fell from 54.4 percent in the second quarter of 2018 to 50.7 percent during the same period in 2019.
By market, the Company reported the following second-quarter results.
- $521 million in gross sales, down 4 percent compared to the second quarter of 2018. A unit sales increase of 6 percent was offset by selling prices that were 10 percent lower. Organic growth was responsible for all of the unit sales increase and was largely driven by sales of Deckorators decking and deck accessories.
- $357.3 million in gross sales, up 3 percent over the second quarter of 2018. A unit sales increase of 7 percent was offset by lower selling prices of 4 percent. Acquisitions contributed 6 percent of the unit sales increase; organic growth was responsible for 1 percent.
- $386.2 million in gross sales, down 10 percent compared to the second quarter of 2018, due to a 14 percent decrease in selling prices and a 4 percent increase in overall unit sales. Unit sales growth was entirely organic, with commercial and residential housing customers each growing at 5 percent and manufactured housing customers growing at 1 percent.
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 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. Analysts and institutional investors should use conference pass code 1794208. The conference call will be available simultaneously and in its entirety to all interested investors, news media and Universal employees through a webcast at http://www.ufpi.com. A replay of the call will be available through August 25, 2019, at 855-859-2056, 404-537-3406 or 800-585-5367.