(Source: Business Wire)
Universal Forest Products, Inc. (Nasdaq: UFPI) today announced net
earnings of $10.1 million for the third quarter of 2009, which compares
to a loss of
$2.0 million in the third quarter of 2008. Diluted earnings per share of
$0.51 in the third quarter of 2009 compare with a loss of $0.10 per
diluted share for the same period of 2008. Net sales for the third
quarter of 2009 were $457.8 million; net sales in the third quarter of
2008 were $610.7 million. The improved earnings reflect the Company's
focus on cost containment and sizing the Company for demand in the
markets it serves. Sales continue to be adversely impacted by a soft
lumber market and a weak economy.
The Company continues to realize the benefits of earlier decisions,
which are yielding improved labor and overhead costs. Additionally, its
efforts to diversify and grow its portfolio of products and services are
creating growth in certain markets and areas, helping to mitigate the
negative impact of weak overall demand.
"Our results underscore the strength of our strategies and efforts,
which are helping us achieve success in challenging times," said Chief
Executive Officer Michael B. Glenn. "We're managing our business in a
fragile environment and focusing on basic business principles managing
inventory and receivables, improving efficiencies, eliminating waste,
and growing our value to our customers that allow us to achieve solid
cash flow, resulting in a strong balance sheet."
"I couldn't be more proud of the determination and innovation of our
team. Their experience and perseverance drove our success," Glenn added.
"The people of Universal will rise to the challenges we believe we'll
continue to face in the coming quarters, and help grow our success on
the solid foundation we have in place."
The composite lumber price, which affects the Company's selling prices,
was 13% lower in the third quarter of 2009 than in the same period of
2008. The Company believes weak demand will keep lumber prices depressed
through the fourth quarter.
By market, Universal posted the following gross sales results for the
third quarter of 2009:
Do-It-Yourself/retail: $214.7 million, a decrease of 15.2% from the
same period of 2008. With high unemployment, a depressed housing
market and a fragile economy, consumer confidence and spending remain
weak. Nonetheless, Universal remains a powerful and reliable vendor to
big-box and independent retailers alike, who rely on the Company to
fulfill multiple product needs. The Company is focused on growing its
product base, to continually increase its value to customers and to
enhance opportunities for new profitability.
Industrial packaging/components: $132.7 million, a decrease of 19.6%
from the third quarter of 2008. U.S. manufacturing continued to
struggle, affecting the Company's industrial business, in which it
engineers and manufactures packaging and components for manufacturing
and agricultural customers. However, Universal remains optimistic about
the opportunities in this highly fragmented market and continues to grow
its customer base and leverage its purchasing, engineering and
production capabilities for its customers. The Company's concrete
forming business is having a positive impact on sales.
Site-built construction: $68.3 million, a decrease of 42.8% from the
same period of 2008. According to the most recent statistics
available, total housing starts from June through August 2009 were 36%
lower than for the same period of 2008. Universal continues to focus on
making sure it remains an enduring, preferred supplier to builders, and
on adding new opportunities for solid, sustainable business moving
forward as the housing sector slowly recovers over the coming years.
Manufactured housing: $53.8 million, a decrease of 36.8% from 2008. According
to the most recent statistics available, the industry saw a decline of
36.8% in actual shipments of HUD-code homes in July 2009 from July 2008.
Universal maintains a dominant share of the HUD-code and modular
markets, and its performance essentially will track with the industry.
Universal continues to seek new opportunities to generate increased
revenue from each unit manufactured by its customers. The Company
believes that the market will improve only when the oversupply of
site-built homes is absorbed, foreclosures subside, 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 Friday, Oct. 16, 2009. The call will be hosted by CEO Michael
B. Glenn and CFO Michael Cole, and will be available for analysts and
institutional investors domestically at (866) 713-8563 or
internationally at (617) 597-5311. Use conference pass code number
30489089. 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 Thursday, Nov. 12, 2009,
domestically at (888) 286-8010 and internationally at (617) 801-6888.
Use replay pass code number 26371358.
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. 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 market and
forming products for concrete construction. Founded in 1955, Universal
Forest Products 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 AND NINE MONTHS ENDED
SEPTEMBER 2009/2008
Quarter Period Year to Date
(In thousands, except per share data) 2009 2008 2009 2008
NET SALES $ 457,768 100 % $ 610,744 100 % $ 1,334,435 100 % $ 1,808,741 100 %
COST OF GOODS SOLD 388,505 84.9 546,094 89.4 1,135,866 85.1 1,604,393 88.7
GROSS PROFIT 69,263 15.1 64,650 10.6 198,569 14.9 204,348 11.3
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 51,198 11.2 58,046 9.5 156,310 11.7 178,302 9.9
NET (GAIN) LOSS ON DISPOSITION OF ASSETS AND OTHER IMPAIRMENT AND EXIT CHARGES 606 0.1 5,339 0.9 (1,246 ) (0.1 ) 6,554 0.4
EARNINGS FROM OPERATIONS 17,459 3.8 1,265 0.2 43,505 3.3 19,492 1.1
Interest expense 900 0.2 2,705 0.4 3,403 0.3 9,589 0.5
Interest income (79 ) - (211 ) - (258 ) - (763 ) -
821 0.2 2,494 0.4 3,145 0.2 8,826 0.5
EARNINGS (LOSS) BEFORE INCOME TAXES 16,638 3.6 (1,229 ) (0.2 ) 40,360 3.0 10,666 0.6
INCOME TAXES 6,378 1.4 535 0.1 14,808 1.1 4,655 0.3
NET EARNINGS (LOSS) 10,260 2.2 (1,764 ) (0.3 ) 25,552 1.9 6,011 0.3
LESS NET EARNINGS ATTRIBUTABLE TO NONCONTROLLING INTEREST (206 ) - (187 ) - (617 ) - (875 ) -
NET EARNINGS (LOSS) ATTRIBUTABLE TO CONTROLLING INTEREST $ 10,054 2.2 $ (1,951 ) (0.3 ) $ 24,935 1.9 $ 5,136 0.3
EARNINGS (LOSS) PER SHARE - BASIC $ 0.52 $ (0.10 ) $ 1.30 $ 0.27
EARNINGS (LOSS) PER SHARE - DILUTED $ 0.51 $ (0.10 ) $ 1.28 $ 0.27
WEIGHTED AVERAGE SHARES OUTSTANDING FOR BASIC EARNINGS (LOSS) 19,307 19,092 19,244 19,045
WEIGHTED AVERAGE SHARES OUTSTANDING FOR DILUTED EARNINGS (LOSS) 19,585 19,092 19,442 19,233
SUPPLEMENTAL SALES DATA
Quarter Period Year to Date
Market Classification 2009 % 2008 % 2009 % 2008 %
Do-It-Yourself/Retail $ 214,719 46 % $ 253,348 41 % $ 674,394 49 % $ 765,868 42 %
Site-Built Construction 68,288 15 % 119,472 19 % 189,882 14 % 358,566 19 %
Industrial 132,718 28 % 164,982 26 % 367,657 27 % 476,875 26 %
Manufactured Housing 53,766 11 % 85,071 14 % 134,985 10 % 245,679 13 %
Total Gross Sales 469,491 100 % 622,873 100 % 1,366,918 100 % 1,846,988 100 %
Sales Allowances (11,723 ) (12,129 ) (32,483 ) (38,247 )
Total Net Sales $ 457,768 $ 610,744 $ 1,334,435 $ 1,808,741
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CONSOLIDATED BALANCE SHEETS (UNAUDITED)
SEPTEMBER 2009/2008
(In thousands)
ASSETS 2009 2008 LIABILITIES AND EQUITY 2009 2008
CURRENT ASSETS CURRENT LIABILITIES
Cash and cash equivalents $ 79,976 $ 31,459 Accounts payable $ 70,817 $ 101,430
Accounts receivable 162,875 230,106 Accrued liabilities 86,633 92,458
Inventories 142,100 197,843 Current portion of long-term
Assets held for sale 3,057 11,950 debt and capital leases 3,064 445
Other current assets 23,242 46,247
TOTAL CURRENT ASSETS 411,250 517,605 TOTAL CURRENT LIABILITIES 160,514 194,333
OTHER ASSETS 3,439 7,587 LONG-TERM DEBT AND
INTANGIBLE ASSETS, NET 175,809 183,512 CAPITAL LEASE OBLIGATIONS,
PROPERTY, PLANT less current portion 53,168 166,713
AND EQUIPMENT, NET 230,557 250,078 OTHER LIABILITIES 31,659 42,471
EQUITY 575,714 555,265
TOTAL ASSETS $ 821,055 $ 958,782 TOTAL LIABILITIES AND EQUITY $ 821,055 $ 958,782
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CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
FOR THE NINE MONTHS ENDED
SEPTEMBER 2009/2008
(In thousands) 2009 2008
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings attributable to controlling interest $ 24,935 $ 5,136
Adjustments to reconcile net earnings to net cash from operating activities:
Depreciation 24,604 28,929
Amortization of intangibles 6,414 7,322
Expense associated with share-based compensation arrangements 1,417 875
Excess tax benefits from share-based compensation arrangements (302 ) (162 )
Expense associated with stock grant plans 103 95
Deferred income taxes (credit) 151 (137 )
Net earnings attributable to noncontrolling interest 617 875
Net (gain) loss on sale or impairment of assets (1,892 ) 5,293
Changes in:
Accounts receivable (24,342 ) (85,884 )
Inventories 51,488 40,985
Accounts payable 7,578 16,395
Accrued liabilities and other 21,160 13,592
NET CASH FROM OPERATING ACTIVITIES 111,931 33,314
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property, plant, and equipment (9,497 ) (13,959 )
Acquisitions, net of cash received - (23,338 )
Proceeds from sale of property, plant and equipment 10,408 30,152
Advances of notes receivable (14 ) (997 )
Collection of notes receivable 134 500
Insurance proceeds 1,023 -
Other, net 16 (52 )
NET CASH FROM INVESTING ACTIVITIES 2,070 (7,694 )
CASH FLOWS FROM FINANCING ACTIVITIES:
Net repayments under revolving credit facilities (30,257 ) (36,657 )
Repayment of long-term debt (16,830 ) (2,332 )
Borrowings of long-term debt 800 -
Proceeds from issuance of common stock 2,109 2,762
Purchase of additional noncontrolling interest (1,770 ) -
Distributions to noncontrolling interest (270 ) (961 )
Investment received from minority shareholder 14 419
Dividends paid to shareholders (1,158 ) (1,139 )
Repurchase of common stock (242 ) -
Excess tax benefits from share-based compensation arrangements 302 162
Other, net (60 ) (20 )
NET CASH FROM FINANCING ACTIVITIES (47,362 ) (37,766 )
NET CHANGE IN CASH AND CASH EQUIVALENTS 66,639 (12,146 )
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 13,337 43,605
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 79,976 $ 31,459
SUPPLEMENTAL INFORMATION:
Interest 3,074 7,572
Income taxes 5,964 805
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