Loss narrows due to improved efficiencies and inventory management
Sales hurt by depressed lumber market, weak economy
Universal Forest Products, Inc. (Nasdaq: UFPI) today announced a loss of
$1.2 million, or ($0.06) per diluted share, on net sales of $361.7
million for the first quarter of 2009. That favorably compares to a loss
of $4.6 million, or ($0.24) per diluted share, on net sales of $489.5
million for the first quarter of 2008. First quarter 2009 sales results
reflect a lumber market composite price that was 19% lower than the
previous year, which impacted selling prices; weak consumer spending;
and the ongoing challenges of a depressed economy.
“We are pleased with results like these in tough economic times and in a
quarter that historically comprises a slow selling season,” said CEO
Michael B. Glenn. “These numbers reflect production efficiencies
resulting from the improvement efforts of our employees and a strong
business model that promotes sales to multiple industries and markets.”
Glenn noted that a renewed focus on the basics that have created success
over the Company’s 54 years—an unwavering customer focus, optimizing
inventory and collecting receivables, and an entrepreneurial spirit that
encourages innovation, prudent risk-taking and a focus on daily
improvement—is yielding positive results. “We continue to size our
capacity to meet market demand as necessary, but after a year of
difficult decisions and moves, there is a renewed optimism and a bounce
in our step at Universal,” he added.
By market, Universal posted the following gross sales results for the
first quarter of 2009:
Do-It-Yourself/retail: $168.1 million, a decrease of 4.2% from the
same period of 2008. That compares with recent double-digit declines
in same-store sales at big box retailers, which comprise much of
Universal’s DIY business. Universal was able to achieve market share
gains by adding new products and programs, such as Capricorn™ decking
and lawn and garden products, and by gaining additional customer
locations. While experts predict that the overall economic downturn and
low consumer confidence will keep this market weak through 2009, the
long-term forecast is strong.
Industrial packaging/components: $103.7 million, a decrease of 25.8%
from 2008. These results can be attributed primarily to a decline in
demand by U.S. industrial users of wood packaging and other products,
resulting from the depressed economy. However, Universal continues to
see strong opportunity in this still largely-fragmented market as it
expands its product offering and as the economy recovers. The Company
also expects continued strong growth in its concrete forming business,
which it launched in the second quarter of 2007.
Site-built construction: $60.8 million, a decrease of 43.2% from the
same period of 2008. In February 2009, year-to-date single-family
housing and multifamily starts were down approximately 53% and 50%,
respectively, from the same period of 2008. Industry experts forecast a
continued decline in homebuilding before the market begins to stabilize
in the latter part of the year. Universal is focusing on multifamily
housing and commercial construction, where it has identified
opportunities. In addition, the Company is seen as a preferred and
reliable supplier given its strong financial position in an industry
where many suppliers are facing financial difficulties.
Manufactured housing: $36.6 million, a decrease of 52.2% from 2008. According
to the most recent statistics available, shipments of HUD-code homes
were down more than 46% for the year-to-date February 2009 compared to
the same period of 2008. Forecasts call for industry shipments to
continue their downward trend through 2009. The Company believes this
market will remain depressed until the oversupply of site-built homes is
absorbed and credit conditions improve.
OUTLOOK
The Company expects the current challenging conditions to prevail
through 2009; however, its strong financial position, solid business
model and diverse business opportunities position it better than most to
endure challenging times. The Company believes that current economic
conditions and uncertainties limit its ability to provide meaningful
guidance for ranges of likely financial performance and has chosen to
cease the practice of providing guidance for the foreseeable future.
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, April 16, 2009. The call will be hosted by
Executive Chairman William G. Currie, CEO Michael B. Glenn and CFO
Michael Cole, and will be available for analysts and institutional
investors domestically at (800) 901-5217 or internationally at (617)
786-2964. Use conference passcode 89537502. The conference call will be
available simultaneously and in its entirety to all interested investors
and news media through a Web cast at http://www.ufpi.com.
A replay of the call will be available through Friday, May 15, 2009,
domestically at (888) 286-8010 and internationally at (617) 801-6888.
Use replay passcode 32925458.
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
the site-built construction market, and specialty wood packaging and
components for various industries. 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, and its 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 market and
forming products for concrete construction. The 54-year-old company is
headquartered in Grand Rapids, Mich., with facilities throughout North
America. For more about Universal Forest Products, go to www.ufpi.com.
Please be aware that: Any statements included in this press release
that are not historical facts are forward-looking statements within the
meaning of Section 21E of the Securities Exchange Act of 1934, as
amended. Such forward-looking statements are based on the beliefs of the
Company's management as well as on assumptions made by, and information
currently available to, the Company at the time such statements were
made. The Company does not undertake to update forward-looking
statements to reflect facts, circumstances, assumptions or events 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: Adverse lumber market
trends, competitive activity, negative economic trends, government
regulations and weather. Certain of these 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 (UNAUDITED)
|
|
FOR THE THREE MONTHS ENDED
|
|
MARCH 2009/2008
|
|
|
|
Quarter Period
|
|
Year to Date
|
|
(In thousands, except per share data)
|
|
2009
|
|
|
|
2008
|
|
|
|
2009
|
|
|
|
2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET SALES
|
|
$ 361,722
|
|
|
100
|
%
|
|
$ 489,512
|
|
|
100
|
%
|
|
$ 361,722
|
|
|
100
|
%
|
|
$ 489,512
|
|
|
100
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COST OF GOODS SOLD
|
|
314,901
|
|
|
87.1
|
|
|
434,692
|
|
|
88.8
|
|
|
314,901
|
|
|
87.1
|
|
|
434,692
|
|
|
88.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GROSS PROFIT
|
|
46,821
|
|
|
12.9
|
|
|
54,820
|
|
|
11.2
|
|
|
46,821
|
|
|
12.9
|
|
|
54,820
|
|
|
11.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SELLING, GENERAL AND
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ADMINISTRATIVE EXPENSES
|
|
49,092
|
|
|
13.6
|
|
|
58,544
|
|
|
12.0
|
|
|
49,092
|
|
|
13.6
|
|
|
58,544
|
|
|
12.0
|
|
|
NET (GAIN) LOSS ON DISPOSITION OF ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AND OTHER IMPAIRMENT AND EXIT CHARGES
|
(1,136
|
)
|
|
(0.3
|
)
|
|
807
|
|
|
0.2
|
|
|
(1,136
|
)
|
|
(0.3
|
)
|
|
807
|
|
|
0.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LOSS FROM OPERATIONS
|
|
(1,135
|
)
|
|
(0.3
|
)
|
|
(4,531
|
)
|
|
(0.9
|
)
|
|
(1,135
|
)
|
|
(0.3
|
)
|
|
(4,531
|
)
|
|
(0.9
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
1,074
|
|
|
0.3
|
|
|
3,594
|
|
|
0.7
|
|
|
1,074
|
|
|
0.3
|
|
|
3,594
|
|
|
0.7
|
|
|
Interest income
|
|
(83
|
)
|
|
-
|
|
|
(373
|
)
|
|
(0.1
|
)
|
|
(83
|
)
|
|
-
|
|
|
(373
|
)
|
|
(0.1
|
)
|
|
|
|
991
|
|
|
0.3
|
|
|
3,221
|
|
|
0.7
|
|
|
991
|
|
|
0.3
|
|
|
3,221
|
|
|
0.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LOSS BEFORE INCOME TAXES
|
|
(2,126
|
)
|
|
(0.6
|
)
|
|
(7,752
|
)
|
|
(1.6
|
)
|
|
(2,126
|
)
|
|
(0.6
|
)
|
|
(7,752
|
)
|
|
(1.6
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INCOME TAX BENEFIT
|
|
(963
|
)
|
|
(0.3
|
)
|
|
(3,350
|
)
|
|
(0.7
|
)
|
|
(963
|
)
|
|
(0.3
|
)
|
|
(3,350
|
)
|
|
(0.7
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET LOSS
|
|
(1,163
|
)
|
|
(0.3
|
)
|
|
(4,402
|
)
|
|
(0.9
|
)
|
|
(1,163
|
)
|
|
(0.3
|
)
|
|
(4,402
|
)
|
|
(0.9
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LESS NET EARNINGS ATTRIBUTABLE TO
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NONCONTROLLING INTEREST
|
|
(44
|
)
|
|
-
|
|
|
(174
|
)
|
|
-
|
|
|
(44
|
)
|
|
-
|
|
|
(174
|
)
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET LOSS ATTRIBUTABLE TO
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CONTROLLING INTEREST
|
|
$ (1,207
|
)
|
|
(0.3
|
)
|
|
$ (4,576
|
)
|
|
(0.9
|
)
|
|
$ (1,207
|
)
|
|
(0.3
|
)
|
|
$ (4,576
|
)
|
|
(0.9
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LOSS PER SHARE - BASIC
|
|
$ (0.06
|
)
|
|
|
|
$ (0.24
|
)
|
|
|
|
$ (0.06
|
)
|
|
|
|
$ (0.24
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LOSS PER SHARE - DILUTED
|
|
$ (0.06
|
)
|
|
|
|
$ (0.24
|
)
|
|
|
|
$ (0.06
|
)
|
|
|
|
$ (0.24
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
WEIGHTED AVERAGE SHARES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OUTSTANDING FOR BASIC LOSS
|
|
19,184
|
|
|
|
|
18,996
|
|
|
|
|
19,184
|
|
|
|
|
18,996
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
WEIGHTED AVERAGE SHARES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OUTSTANDING FOR DILUTED LOSS
|
|
19,184
|
|
|
|
|
18,996
|
|
|
|
|
19,184
|
|
|
|
|
18,996
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SUPPLEMENTAL SALES DATA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Period
|
|
Year to Date
|
|
|
|
Market Classification
|
|
2009
|
|
%
|
|
2008
|
|
%
|
|
2009
|
|
%
|
|
2008
|
|
%
|
|
Do-It-Yourself/Retail
|
|
$ 168,134
|
|
|
46
|
%
|
|
$ 175,460
|
|
|
35
|
%
|
|
$ 168,134
|
|
|
46
|
%
|
|
$ 175,460
|
|
|
35
|
%
|
|
Site-Built Construction
|
|
60,765
|
|
|
16
|
%
|
|
107,008
|
|
|
21
|
%
|
|
60,765
|
|
|
16
|
%
|
|
107,008
|
|
|
21
|
%
|
|
Industrial
|
|
103,658
|
|
|
28
|
%
|
|
139,608
|
|
|
29
|
%
|
|
103,658
|
|
|
28
|
%
|
|
139,608
|
|
|
29
|
%
|
|
Manufactured Housing
|
|
36,550
|
|
|
10
|
%
|
|
76,441
|
|
|
15
|
%
|
|
36,550
|
|
|
10
|
%
|
|
76,441
|
|
|
15
|
%
|
|
Total Gross Sales
|
|
369,107
|
|
|
100
|
%
|
|
498,517
|
|
|
100
|
%
|
|
369,107
|
|
|
100
|
%
|
|
498,517
|
|
|
100
|
%
|
|
Sales Allowances
|
|
(7,385
|
)
|
|
|
|
(9,005
|
)
|
|
|
|
(7,385
|
)
|
|
|
|
(9,005
|
)
|
|
|
|
Total Net Sales
|
|
$ 361,722
|
|
|
|
|
$ 489,512
|
|
|
|
|
$ 361,722
|
|
|
|
|
$ 489,512
|
|
|
|
|
|
|
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
|
|
MARCH 2009/2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ASSETS
|
|
2009
|
|
2008
|
|
LIABILITIES AND EQUITY
|
|
2009
|
|
2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT ASSETS
|
|
|
|
|
|
CURRENT LIABILITIES
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$ 9,427
|
|
$ 33,584
|
|
|
Accounts payable
|
|
$ 74,345
|
|
$ 103,198
|
|
|
Accounts receivable
|
|
180,021
|
|
161,896
|
|
|
Accrued liabilities
|
|
63,048
|
|
77,276
|
|
|
Inventories
|
|
190,801
|
|
260,292
|
|
|
Current portion of long-term
|
|
|
|
|
|
|
Assets held for sale
|
|
5,490
|
|
10,412
|
|
|
|
debt and capital leases
|
|
16,223
|
|
1,012
|
|
|
Other current assets
|
|
17,879
|
|
38,003
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL CURRENT ASSETS
|
|
403,618
|
|
504,187
|
|
TOTAL CURRENT LIABILITIES
|
|
153,616
|
|
181,486
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OTHER ASSETS
|
|
3,522
|
|
7,747
|
|
LONG-TERM DEBT AND
|
|
|
|
|
|
INTANGIBLE ASSETS, NET
|
|
179,660
|
|
182,460
|
|
|
CAPITAL LEASE OBLIGATIONS,
|
|
|
|
|
PROPERTY, PLANT
|
|
|
|
|
|
|
less current portion
|
|
96,235
|
|
194,277
|
|
|
AND EQUIPMENT, NET
|
|
240,249
|
|
267,048
|
|
OTHER LIABILITIES
|
|
29,861
|
|
41,845
|
|
|
|
|
|
|
|
|
|
EQUITY
|
|
547,337
|
|
543,834
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL ASSETS
|
|
$ 827,049
|
|
$ 961,442
|
|
TOTAL LIABILITIES AND EQUITY
|
$ 827,049
|
|
$ 961,442
|
|
|
|
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
|
|
FOR THE THREE MONTHS ENDED
|
|
MARCH 2009/2008
|
|
(In thousands)
|
|
|
|
2009
|
|
|
|
2008
|
|
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
|
|
|
Net loss attributable to controlling interest
|
|
|
$ (1,207
|
)
|
|
|
|
$ (4,576
|
)
|
|
Adjustments to reconcile net earnings to net cash
|
|
|
|
|
|
|
|
from operating activities:
|
|
|
|
|
|
|
|
|
Depreciation
|
|
|
|
8,417
|
|
|
|
|
9,601
|
|
|
Amortization of intangibles
|
|
|
2,563
|
|
|
|
|
2,280
|
|
|
Expense associated with share-based compensation arrangements
|
637
|
|
|
|
|
250
|
|
|
Expense associated with stock grant plans
|
|
78
|
|
|
|
|
67
|
|
|
Deferred income taxes
|
|
|
214
|
|
|
|
|
(85
|
)
|
|
Net earnings attributable to noncontrolling interest
|
|
44
|
|
|
|
|
174
|
|
|
Net (gain) loss on disposition of assets and other impairment and
exit charges
|
(1,599
|
)
|
|
|
|
262
|
|
|
Changes in:
|
|
|
|
|
|
|
|
|
|
Accounts receivable
|
|
|
(41,760
|
)
|
|
|
|
(17,053
|
)
|
|
Inventories
|
|
|
|
2,353
|
|
|
|
|
(21,954
|
)
|
|
Accounts payable
|
|
|
11,231
|
|
|
|
|
18,600
|
|
|
Accrued liabilities and other
|
|
|
973
|
|
|
|
|
7,077
|
|
|
Excess tax benefits from share-based compensation arrangements
|
-
|
|
|
|
|
(26
|
)
|
|
NET CASH FROM OPERATING ACTIVITIES
|
|
(18,056
|
)
|
|
|
|
(5,383
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
|
|
|
Purchase of property, plant, and equipment
|
|
|
(3,217
|
)
|
|
|
|
(5,612
|
)
|
|
Acquisitions, net of cash received
|
|
|
-
|
|
|
|
|
(14,100
|
)
|
|
Proceeds from sale of property, plant and equipment
|
|
5,575
|
|
|
|
|
26,660
|
|
|
Collection of notes receivable
|
|
|
30
|
|
|
|
|
332
|
|
|
Advances of notes receivable
|
|
|
(14
|
)
|
|
|
|
(815
|
)
|
|
Insurance proceeds
|
|
|
|
242
|
|
|
|
|
-
|
|
|
Other, net
|
|
|
|
|
9
|
|
|
|
|
16
|
|
|
NET CASH FROM INVESTING ACTIVITIES
|
|
2,625
|
|
|
|
|
6,481
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
Net (repayments) borrowings under revolving credit facilities
|
|
10,577
|
|
|
|
|
(11,271
|
)
|
|
Repayment of long-term debt
|
|
|
(93
|
)
|
|
|
|
(104
|
)
|
|
Borrowings of long-term debt
|
|
|
800
|
|
|
|
|
-
|
|
|
Proceeds from issuance of common stock
|
|
|
316
|
|
|
|
|
389
|
|
|
Distributions to noncontrolling interest
|
|
|
(70
|
)
|
|
|
|
(146
|
)
|
|
Excess tax benefits from share-based compensation arrangements
|
|
-
|
|
|
|
|
26
|
|
|
Other, net
|
|
|
|
|
(9
|
)
|
|
|
|
(13
|
)
|
|
NET CASH FROM FINANCING ACTIVITIES
|
|
11,521
|
|
|
|
|
(11,119
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
NET CHANGE IN CASH AND CASH EQUIVALENTS
|
|
(3,910
|
)
|
|
|
|
(10,021
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD
|
|
13,337
|
|
|
|
|
43,605
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH AND CASH EQUIVALENTS, END OF PERIOD
|
|
$ 9,427
|
|
|
|
|
$ 33,584
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SUPPLEMENTAL INFORMATION:
|
|
|
|
|
|
|
|
|
Interest paid
|
|
|
|
444
|
|
|
|
|
1,436
|
|
|
Income taxes paid (refunded)
|
|
|
(7,138
|
)
|
|
|
|
(10,521
|
)
|
Universal Forest Products, Inc.
Lynn Afendoulis
Director,
Corporate Communications
(616) 365-1502
