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 [phone] and internationally at [phone]. 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 [phone] and internationally at [phone]. 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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