UFPI Posts Record Third-Quarter Earnings and Sales

Tuesday, October 16, 2018

UFPI posts record third-quarter earnings and sales
- Sales up 15 percent, net earnings up 22 percent over previous year -

GRAND RAPIDS, Mich., Tuesday, October 16, 2018 – Universal Forest Products, Inc. (Nasdaq: UFPI) today reported record financial results for the third quarter ended September 29, 2018, the thirteenth consecutive quarter in which the company has reported records in both net sales and net earnings.

“I want to thank the hard-working employees of Universal for once again producing record results, driven by strong unit sales growth of 7 percent and overall sales growth of 15 percent,” stated CEO Matt Missad. “We achieved these results despite the headwinds we experienced from a quickly changing lumber market, rising labor, benefit and transportation costs, and the short-term effects of Hurricane Florence.

“While we are pleased to report a record quarter, we know we can do better. We are improving our mix of value-added new products, investing in automation to address rising costs and improving performance at underperforming operations.”

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

  • Diluted earnings per share were $0.66, up from $0.55
  • Net earnings attributable to controlling interest were $41.2 million, up 22 percent
  • Net sales were $1.2 billion, up 15 percent
  • EBITDA was $72.9 million, up 9 percent
  • Gross sales increased 17 percent in the Construction market, 15 percent in the Industrial market and 13 percent in the Retail market
  • Unit sales contributed 7 percent of gross sales growth; higher prices due to the lumber market contributed 8 percent
  • Organic sales contributed 5 percent to unit growth while acquisitions added 2 percent
  • New product sales were $138 million, up 22 percent; year-to date new product sales are $407 million, up 25 percent

By market, the company reported the following third-quarter 2018 gross sales results:

Retail

  • $443 million, up 13 percent over the same period of 2017, as unit sales contributed 4 percent and price increases accounted for 9 percent
  • Organic sales accounted for all of the unit sales growth
  • Sales to big box customers increased 11 percent, while sales to independent customers grew 17 percent

   Construction

  • $361 million, up 17 percent over the same period of 2017, as unit sales contributed 9 percent and price increases accounted for 8 percent
  • Organic sales accounted for 8 percent of the unit sales growth, while acquisitions accounted for 1 percent
  • The company saw double-digit sales increases to customers in commercial construction (30 percent), residential construction (19 percent) and manufactured housing (10 percent)

    Industrial

  • $429 million, up 15 percent over the same period of 2017, as unit sales accounted for 8 percent and price increases accounted for 7 percent
  • Organic sales accounted for 3 percent of the unit sales growth, while acquisitions contributed 5 percent
  • The company sees favorable growth opportunities in the non-wood packaging market and has been adding resources to better serve this market

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 Wednesday, October 17, 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 1793238. 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 November 17, 2018, at 855-859-2056, 404-537-3406 or 800-585-8367.