Universal Forest Products, Inc. (Nasdaq: UFPI) today reported second-quarter 2011 results, including net sales of $544.1 million, a decrease of almost 15% from net sales of $638.6 million for the same period of 2010. Sales were hampered by weak consumer spending on larger-ticket home-improvement items like fencing and decking during what historically is the busiest selling season of the year. Unit sales decreased an estimated 5% for the quarter; selling prices were down an estimated 10%, due to lower lumber prices, compared to the second quarter of 2010. Additionally, last year’s sales were boosted by the federal stimulus program, including the housing tax credit, which expired at the end of April 2010. Decreases in second-quarter 2011 unit sales to the retail building materials, residential construction and manufactured housing markets were offset by increases in unit sales to the commercial construction and concrete forming and industrial markets.
Net earnings for the quarter were $4.3 million, or $0.22 per diluted share, compared to net earnings of $13.7 million, or $0.70 per diluted share, for the same period of 2010. Profits in the quarter were negatively affected by severance and early retirement charges totaling $0.11 per diluted share after deducting income tax expense.
“These are challenging times, but we are positioning the Company for better results. We have cut costs and implemented plans intended to maintain our strengths and capitalize on our opportunities moving forward,” said outgoing CEO Michael B. Glenn. “We’re maintaining a keen focus on costs and on prudent, conservative decision-making that will create opportunities for sustainable growth and success.”
In June 2011, the Company announced measures to align its costs with its business, including cuts that are expected to result in annualized savings of approximately $10 million. The Company also announced organizational changes intended to more strongly position it for improving sales and profitability.