– Sales up 23 percent over previous year –
GRAND RAPIDS, Mich., July 18, 2017 – Universal Forest Products, Inc. (Nasdaq: UFPI) today reported financial results for the second quarter ended July 1, 2017.
The Company’s net sales rose 23 percent over the same quarter of 2016, led by double-digit gains in each of its markets. Net earnings were up slightly over 2016. Both results are records for the company.
“Many companies would be satisfied with our second-quarter performance. Not us,” said CEO Matt Missad. “We are excited about our sales growth, yet disappointed that we only had a modest growth in profits. We won’t make excuses and will aggressively pursue our goal to convert more of our sales revenue to earnings growth. I am confident that the great people of Universal will overcome challenges such as the lumber market volatility that occurred in the second quarter and continue to improve.”
“We are excited about the second half of 2017 and look forward to returning to more normal lumber market conditions as the details of the next Canadian softwood lumber agreement become known,” Matt added. “We expect to see the benefits of our investments in acquisitions, new product development and our international division. We also expect to see the benefits of our efforts to manage costs, as acquisitions such as idX Corp. continue to implement cost-saving synergies ahead of schedule.”
Second Quarter 2017 Highlights (comparisons on a year-over-year basis):
- Net earnings attributable to controlling interest were $33.6 million, up 1 percent
- Diluted earnings per share were $1.64
- Net sales of $1,072.4 million represent a 23 percent increase
- Unit sales accounted for 16 percent of the Company’s gross sales growth; higher lumber prices accounted for 7 percent
- New product sales were $115.9 million, up from $97.8 million. The Company has introduced 23 new products in 2017 to date, including 11 during the second quarter.
By market, the Company posted the following second-quarter 2017 gross sales results:
$459.1 million, up 13 percent over the same period of 2016
Sales to the Retail market grew 13 percent, led by acquisitions, which contributed 8 percent of unit sales growth, while price increases accounted for 5 percent of sales growth.
The Company has benefited from new product sales and growth with independent and big box retailers, the latter of which have reported increases in comparable sales in their most recently reported quarters.
$295.2 million, up 17 percent over the same period of 2016
The 17 percent increase in Construction sales was led by sales to manufactured housing builders, which grew 24 percent, and residential builders, which grew 14 percent. Sales to commercial builders rose 10 percent. Overall, unit sales grew 9 percent, while prices increased 8 percent.
The Company has benefited from the increase in manufactured home production, which is up 18.5 percent for the year through April 2017, and from rising U.S. housing starts. The Company remains focused on growing business selectively in areas where housing markets are the most stable.
$335.9 million, up 47 percent over the same period of 2016
The Company’s growth in this market is primarily due to its September 2016 acquisition of idX Corp. Excluding acquisitions, the Company grew unit sales in this market by 8 percent in the second quarter through market share gains and by adding new customers.
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, July 19, 2017. 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 (888) 685-5759 and internationally at (503) 343-6031. Use conference ID 84420896. 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 18, 2017, at any of the following numbers: (855) 859-2056, (404) 537-3406 or (800) 585-8367.