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UFPI Grows Q3 Net Sales By 13.7%; Posts Double-Digit Sales Growth In 4 Of 5 Markets

Retail building materials: $204.4 million, a decrease of 3.1 percent from 2011. The Company focused on growing sales to independent retailers while diversifying the products it offers to big box customers and enhancing other areas of customer relationships, such as service and innovation. Sales to independent retailers increased by more than 16 percent. Universal is aggressively focusing on hitting profitability goals, on providing new products, and on being the low-cost producer.

Industrial packaging/components: $153.9 million, up 20.0 percent over the third quarter of 2011. The Company grew sales at a time when industrial production in the United States fell 1.2 percent in August after having risen 0.5 percent in July, and when shipments of durable goods declined (3 percent in July from the previous month, and 13.2 percent in August, the largest decrease since January 2009). The Company continues to focus on adding customers and products, on expanding its reach into non-wood packaging materials and on providing complete packaging solutions.

Manufactured housing and recreational vehicles: $89.0 million, an increase of 35.5 percent over 2011. According to the most recent statistics available, shipments of HUD-Code homes in July and August 2012 were up 14.6 percent and 7.8 percent, respectively, and have seen year-over-year growth every month of 2012. This growth is attributed, in part, to areas of the U.S. and Canada where shale oil and gas development activities are driving demand for temporary homes. It remains an important market for Universal, which is focused on serving existing customers with unparalleled products and service, and on adding to the products it supplies.

Residential construction: $69.6 million, up 33.8 percent over the same period of 2011. The Company was encouraged by stronger building activity in many areas of the country, although it believes there is a long way to go to get to healthy, sustainable building levels. For June to August 2012, total starts were up 24.4 percent over the same period last year, including gains of 22.9 percent and 28.5 percent in single-family and multifamily starts, respectively.

Commercial construction and concrete forming: $23.9 million, an increase of 11.4 percent over 2011. Universal continues to see opportunity in the concrete forming business, in which it manufactures and/or supplies forms and other materials for concrete construction projects, from roads to stadiums. This is a highly fragmented market that capitalizes on Universal’s engineering and manufacturing capabilities and on its nationwide presence.

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 Thursday, October 18, 2012. 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) 271-6130 and internationally at (617) 213-8894. Use conference pass code 99624776. 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 Friday, November 16, 2012, domestically at (888) 286-8010 and internationally at (617) 801-6888. Use replay pass code 14438073.

UNIVERSAL FOREST PRODUCTS, INC.

Universal Forest Products, Inc. is a holding company that provides capital, management and administrative resources to subsidiaries that design, manufacture and market wood and wood-alternative products for DIY/retail home centers and other retailers, structural lumber products for the manufactured housing industry, engineered wood components for residential and commercial construction, specialty wood packaging and components for various industries, and forming products for concrete construction. The Company's consumer products subsidiary offers a large portfolio of outdoor living products, including wood composite decking, decorative balusters, post caps and plastic lattice. Its lawn and garden group offers an array of products, such as trellises and arches, to retailers nationwide. Universal’s subsidiaries also provide framing services for the site-built construction market. Founded in 1955, Universal Forest Products is headquartered in Grand Rapids, Mich., with operations throughout North America. For more about Universal Forest Products, go to www.ufpi.com.

This press release contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act, as amended, that are based on management’s beliefs, assumptions, current expectations, estimates and projections about the markets we serve, the economy and the Company itself. Words like “anticipates,” “believes,” “confident,” “estimates,” “expects,” “forecasts,” “likely,” “plans,” “projects,” “should,” variations of such words, and similar expressions identify such forward-looking statements. These statements do not guarantee future performance and involve certain risks, uncertainties and assumptions that are difficult to predict with regard to timing, extent, likelihood and degree of occurrence. The Company does not undertake to update forward-looking statements to reflect facts, circumstances, events, or assumptions that occur after the date the forward-looking statements are made. Actual results could differ materially from those included in such forward-looking statements. Investors are cautioned that all forward-looking statements involve risks and uncertainty. Among the factors that could cause actual results to differ materially from forward-looking statements are the following: fluctuations in the price of lumber; adverse or unusual weather conditions; adverse conditions in the markets we serve; government regulations, particularly involving environmental and safety regulations; and our ability to make successful business acquisitions. Certain of these risk factors as well as other risk factors and additional information are included in the Company's reports on Form 10-K and 10-Q on file with the Securities and Exchange Commission.

 
 
CONSOLIDATED STATEMENTS OF EARNINGS AND COMPREHENSIVE INCOME (UNAUDITED)
FOR THE NINE MONTHS ENDED
SEPTEMBER 2012/2011
    Quarter Period   Year to Date
(In thousands, except per share data)   2012       2011       2012       2011    
               
 
 
NET SALES $ 533,366 100 % $ 468,941 100 % $ 1,584,170 100 % $ 1,400,313 100 %
 
COST OF GOODS SOLD   478,139   89.6   414,583   88.4   1,403,530   88.6   1,247,954   89.1
 
GROSS PROFIT 55,227 10.4 54,358 11.6 180,640 11.4 152,359 10.9
 
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES 44,419 8.3 44,013 9.4 139,303 8.8 135,829 9.7
CANADIAN ANTI-DUMPING DUTY
ASSESSMENT 2,000 0.4 - - 2,000 0.1 - -
NET (GAIN) LOSS ON DISPOSITION OF ASSETS,
EARLY RETIREMENT, AND
OTHER IMPAIRMENT AND EXIT CHARGES   498   0.1   207   -   (6,285 ) (0.4 )   3,696   0.3
 
EARNINGS FROM OPERATIONS 8,310 1.6 10,138 2.2 45,622 2.9 12,834 0.9
 
OTHER EXPENSE, NET   651   0.1   840   0.2   2,330   0.1   2,237   0.2
 
EARNINGS BEFORE INCOME TAXES 7,659 9,298 43,292 10,597
 
INCOME TAXES   2,903   0.5   3,293   0.7   16,140   1.0   3,508   0.3
 
NET EARNINGS 4,756 0.9 6,005 1.3 27,152 1.7 7,089 0.5
 
LESS NET EARNINGS ATTRIBUTABLE TO
NONCONTROLLING INTEREST   (558 ) (0.1 )   (389 ) (0.1 )   (1,290 ) (0.1 )   (866 ) (0.1 )
 
NET EARNINGS ATTRIBUTABLE TO
CONTROLLING INTEREST $ 4,198   0.8 $ 5,616   1.2 $ 25,862   1.6 $ 6,223   0.4
 
 
EARNINGS PER SHARE - BASIC $ 0.21 $ 0.29 $ 1.31 $ 0.32
 
EARNINGS PER SHARE - DILUTED $ 0.21 $ 0.29 $ 1.31 $ 0.32
 
                                 
 
COMPREHENSIVE INCOME 6,270 4,491 28,490 6,496
 
LESS COMPREHENSIVE INCOME ATTRIBUTABLE
TO NONCONTROLLING INTEREST   (957 )   130     (1,674 )   (594 )
 
COMPREHENSIVE INCOME
ATTRIBUTABLE TO CONTROLLING INTEREST $ 5,313   $ 4,621   $ 26,816   $ 5,902  
                                 
 

SUPPLEMENTAL SALES DATA

Quarter Period Year to Date

Market Classification

2012 % 2011 % 2012 % 2011 %
Retail Building Materials $ 204,368 39 % $ 210,874 44 % $ 682,016 43 % $ 673,614 48 %
Residential Construction 69,648 13 % 52,066 11 % 181,750 11 % 156,508 11 %
Commercial Construction and Concrete Forming 23,850 4 % 21,415 4 % 68,236 4 % 57,206 4 %
Industrial 153,906 28 % 128,219 27 % 444,499 28 % 363,975 25 %
Manufactured Housing   89,023   16 %   65,717   14 %   232,755   14 %   177,371   12 %
Total Gross Sales 540,795 100 % 478,291 100 % 1,609,256 100 % 1,428,674 100 %
Sales Allowances   (7,429 )   (9,350 )   (25,086 )   (28,361 )
Total Net Sales $ 533,366   $ 468,941   $ 1,584,170   $ 1,400,313  
 
 
 
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
SEPTEMBER 2012/2011
                           
(In thousands)              
ASSETS   2012   2011       LIABILITIES AND EQUITY   2012   2011
 
CURRENT ASSETS CURRENT LIABILITIES
Cash and cash equivalents $ 4,908 $ 18,649 Accounts payable $ 72,080 $ 65,315
Accounts receivable 191,178 170,030 Accrued liabilities 58,659 56,823
Inventories 209,138 180,882 Current portion of long-term
Assets held for sale 5,082 debt and capital leases 40,750 266
Other current assets   26,390   25,429    
 
TOTAL CURRENT ASSETS 431,614 400,072 TOTAL CURRENT LIABILITIES 171,489 122,404
 
OTHER ASSETS 16,178 11,469 LONG-TERM DEBT AND
INTANGIBLE ASSETS, NET 169,108 168,962 CAPITAL LEASE OBLIGATIONS,
PROPERTY, PLANT less current portion 16,684 52,200
AND EQUIPMENT, NET 219,221 217,920 OTHER LIABILITIES 36,231 37,850
    EQUITY   611,717   585,969
 
TOTAL ASSETS $ 836,121 $ 798,423 TOTAL LIABILITIES AND EQUITY $ 836,121 $ 798,423
 
 
 
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
FOR THE NINE MONTHS ENDED
SEPTEMBER 2012/2011
(In thousands)   2012   2011
CASH FLOWS FROM OPERATING ACTIVITIES:    
Net earnings attributable to controlling interest $ 25,862 $ 6,223

Adjustments to reconcile net earnings attributable to controlling interest to net cash from operating activities:

Depreciation 22,154 22,260
Amortization of intangibles 2,218 4,129
Expense associated with share-based compensation arrangements 994 1,281
Excess tax benefits from share-based compensation arrangements (73 ) (138 )
Expense associated with stock grant plans 84 162
Loss reserve for notes receivable 767 -
Deferred income tax credit (1,223 ) (222 )
Net earnings attributable to noncontrolling interest 1,290 866
Equity in earnings of investee (25 ) (52 )
Net gain on sale or impairment of property, plant and equipment (7,228 ) (183 )
Changes in:
Accounts receivable (63,119 ) (47,438 )
Inventories (13,483 ) 9,497
Accounts payable 22,285 5,849
Accrued liabilities and other   13,108     (109 )
NET CASH FROM OPERATING ACTIVITIES 3,611 2,125
 
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property, plant, and equipment (21,728 ) (21,774 )
Proceeds from sale of property, plant and equipment 15,092 1,485

Acquisitions, net of cash received

(2,599 ) -
Purchase of patents (95 ) (116 )

Collections of notes receivable

915 308

Advances of notes receivable

(1,157 ) -
Other, net   (387 )   100  
NET CASH FROM INVESTING ACTIVITIES (9,959 ) (19,997 )
 
CASH FLOWS FROM FINANCING ACTIVITIES:
Net borrowings (repayments) under revolving credit facilities 6,217 (2,109 )
Repayment of long-term debt (3,547 ) (745 )
Debt issuance costs (86 ) -
Proceeds from issuance of common stock 1,826 1,306
Purchase of additional noncontrolling interest - (402 )
Distributions to noncontrolling interest (871 ) (1,213 )
Capital contribution from noncontrolling interest 281 80
Dividends paid to shareholders (3,946 ) (3,905 )
Excess tax benefits from share-based compensation arrangements 73 138
Other, net   4     8  
NET CASH FROM FINANCING ACTIVITIES   (49 )   (6,842 )
 
NET CHANGE IN CASH AND CASH EQUIVALENTS (6,397 ) (24,714 )
 
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD   11,305     43,363  
 
CASH AND CASH EQUIVALENTS (OVERDRAFT), END OF PERIOD $ 4,908   $ 18,649  
 
SUPPLEMENTAL INFORMATION:
Interest paid $ 2,498 $ 2,162
Income taxes paid 15,797 3,483




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