– Sales gains led by industrial; strong gains also in retail and commercial construction/concrete forming –
GRAND RAPIDS, Mich., July 15, 2015 – Universal Forest Products, Inc. (Nasdaq: UFPI) today reported net earnings of $26.0 million for the second quarter of 2015, up 19.2 percent over net earnings of $21.8 million for the same period of 2014. Second-quarter 2015 diluted earnings per share were $1.28, compared to diluted earnings per share of $1.08 for the second quarter of 2014. Net sales of $838.2 million in the second quarter of 2015 represent an increase of 8.5 percent over net sales of $772.8 for the same period of 2014.
Overall unit sales were up 10 percent over 2014, led by a 16.9 percent increase in sales to industrial customers. The Company saw strong sales to retail customers, with an increase of 8.3 percent over the same period last year. Average lumber prices declined nine percent since the first quarter of 2015 and, year-over-year for the second quarter of 2015 were down 12.6 percent, adversely impacting the Company’s selling prices.
“We were pleased with our improvement in gross and operating margins as we continue to enhance and diversify our product offering, allowing us to grow our capabilities and our value to our customers,” said CEO Matthew J. Missad. “These factors, and others, helped us overcome a decline in lumber prices, which hurt our profit margins on treated lumber and other similarly priced products. But our people did an excellent job managing through this challenge.”
“These results highlight the strength of our business model, which allows us to withstand adversity in one business market as well as adverse trends in the lumber market and still grow sales and profitability,” Missad added. “They also highlight the strength of our growth strategies, including our focus on sales to the industrial market and on new product development.”
New product sales in the quarter were up more than 22 percent over the second quarter of 2014.
By market, the Company posted the following gross sales results:
$376.2 million, up 8.3 percent over the second quarter of 2014
The Company’s performance in this market benefited from pent-up demand in the busy building season following challenging winter weather, success with new product sales, and growth with independent and big box retailers, the latter of which saw healthy increases in comparable store sales in their most recently reported quarters. The Company anticipates healthy demand through the building season, barring adverse weather conditions and other unforeseen events.
$240.0 million, up 16.9 percent over the second quarter of 2014
This follows a first-quarter year-over-year increase of 23 percent, and is indicative of the ongoing opportunity in this market, in which the company sells packaging, material handling and related products for industrial and agricultural customers. The Company’s growth strategies in this market include both wood and alternative materials solutions as well as packaging solutions for existing and new customers.
$234.6 million, up 1.3 percent over the same period of 2014
The Company saw a 15 percent unit sales increase in its commercial construction and concrete forming business, and unit sales increases of 2 and 3 percent, respectively, in manufactured housing and residential construction. The Company notes that recent mergers and acquisitions in this market are in line with its expectations, and could serve to rationalize capacity.
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 16, 2015. 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 (800) 295-4740 and internationally at (617) 614-3925. Use conference pass code 28727901. 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 16, 2015, domestically at (888) 286-8010 and internationally at (617) 801-6888. Use replay pass code 84538911.