UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934

Universal Forest Products, Inc.

(Exact name of registrant as specified in its charter)

Michigan		0-22684		38-1465835
(State or other jurisdiction of incorporation)		(Commission File Number)		(IRS Employer Identification No.)

2801 East Beltline, NE Grand Rapids, Michigan		49525
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (616) 364-6161

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o		Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o		Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o		Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o		Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

Item 2.02 Results of Operations and Financial Condition

On October 13, 2010, the Registrant issued a press release announcing its financial results for the quarter ended September 25, 2010. A copy of the Registrant’s press release is attached as Exhibit 99(a) to this Current Report.

Item 9.01 Financial Statements, Pro Forma Financial Information, and Exhibits

(c) Exhibits

	99	(a)		Press Release dated October 13, 2010.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

EXHIBIT INDEX

Exhibit Number				Document
	99	(a)		Press Release dated October 13, 2010.

Exhibit 99(a)

News release

—AT THE COMPANY—

Lynn Afendoulis
Director, Corporate Communications
(616) 365-1502

FOR IMMEDIATE RELEASE

WEDNESDAY, October 13, 2010

UFPI increases sales by 5% in 3^rd quarter 2010 despite weak economy
- Balance sheet is strong; expenses are down -
- - Profits affected by earlier spike in lumber market and inventories -

GRAND RAPIDS, Mich., Oct. 13, 2010 – Universal Forest Products, Inc. (Nasdaq: UFPI) today announced third-quarter 2010 net sales of $480.6 million, compared to net sales of $457.8 million for the same period of 2009. Net earnings for the third quarter of 2010 were $2.6 million, or $0.13 per diluted share, compared to net earnings of $10.1 million, or $0.51 per diluted share, for the same period last year.

The Company grew sales in three of its four markets: Sales to industrial and manufactured housing customers increased 19.3 percent and 18.2 percent, respectively, during the quarter, while sales to site-built construction customers rose 1.6 percent. Only Do-It-Yourself/retail saw a sales decrease, of 7.7 percent, due to weak demand that resulted in slow retail sales. Net earnings were impeded by the spike in lumber costs, which occurred in the spring.

While lumber prices stabilized during the third quarter of 2010, inventories were built earlier in the year—when lumber prices were up as much as 52 percent over the previous year—in preparation for a solid selling season, which didn’t materialize. At the end of June, the Company’s inventory consisted primarily of higher-cost lumber, which adversely affected profits in the third quarter. The Company has sold through this product, and by the end of the third quarter its inventories comprised lumber purchased at a much lower cost.

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Universal Forest Products, Inc.
Page 2

“This was the most challenging lumber market I’ve seen in my 36 years with the company, and I’m proud of the way our people managed through it,” said CEO Michael B. Glenn. “Frankly, this type of market has the potential to wipe out an entire year’s profits for most companies that operate in our industries. Fortunately, our agility and diverse business model have allowed us to generate more than $17 million in net earnings for the year so far. With more than $58 million in cash and only $53 million in debt, we have the resources to take advantage of opportunities that arise. We remain in an enviable position in our markets.”

By market, Universal posted the following gross sales results for the third quarter of 2010:

Do-It-Yourself/retail: $197.9 million, a decrease of 7.7 percent from the same period of 2009. Unit sales to this market declined 10 percent due to soft demand. Predictions for 2011 and beyond hinge on the stabilization and eventual improvement of the economy. Most experts forecast a recovery to begin in 2011. The Home Improvement Research Institute believes 2011 will see a gain of just 1.6 percent in home improvement spending, with growth hovering between 6 and 7 percent annually in subsequent years. Universal continues to add to the products it offers to retailers and drive costs out of its processes in its persistent efforts to be the low-cost producer.

Industrial packaging/components: $158.1 million, up 19.3 percent over the third quarter of 2009. Unit sales increased by more than 12 percent during the quarter, due primarily to market share gains that resulted from adding 252 new customers. This continues to be an area of strong growth potential for Universal because the market remains fragmented, offering opportunities for a national player. The Company is focused on adding customers and products, as well as on expanding its reach into concrete forming and non-wood packaging materials.

Site-built construction: $70.1 million, up 1.6 percent over same period of 2009. Unit sales decreased by approximately 4 percent during the quarter, due to an 11 percent decrease from plants the Company has closed since the third quarter of 2009, offset by a 7 percent increase in shipments out of plants that continued to operate. Nationally, housing starts decreased almost 6 percent comparing June through August 2010 with the same period of 2009. (Shipment of the Company’s products to the job site lag housing starts by approximately one month.) The Company continues to evaluate and close plants in order to achieve profitability and cash flow objectives. Universal believes this industry will be challenged for years to come and continues to focus on commercial, government and turnkey projects to diversify its business and add value for the customer.

Manufactured housing: $63.4 million, an increase of 18.2 percent over 2009. Unit sales to this market increased by 12 percent primarily due to operations it recently acquired, which reflect the Company’s strategy to expand its product offering to these customers and expand its distribution business, in which it offers everything from adhesives to plumbing supplies.

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Universal Forest Products, Inc.
Page 3

OUTLOOK

The Company expects the current challenging conditions to prevail through 2010, limiting its ability to provide meaningful guidance for ranges of likely financial performance; therefore, the Company will not provide guidance for the foreseeable future. However, given the significant adverse impact of the lumber market mentioned earlier in this release, the Company does not expect to achieve growth in net earnings in 2010, although it is optimistic about its performance in 2011 and beyond as the economy improves, given its strong financial position, solid business model and diverse business opportunities.

CONFERENCE CALL

Universal Forest Products will conduct a conference call to discuss information included in this news release and related matters at 8 a.m. ET on Thursday, Oct. 14, 2010. The call will be hosted by CEO Michael B. Glenn, and will be available for analysts and institutional investors domestically at (866) 788-0545 or internationally at (857) 350-1683. Use conference pass code 25334951. 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 Monday, Nov. 15, 2010, domestically at (888) 286-8010 and internationally at (617) 801-6888. Use replay pass code 32007502.

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 and other products for the manufactured housing industry, engineered wood components for the site-built construction market, and specialty wood packaging and components and packing materials for various industries. Universal’s subsidiaries also provide framing services for the site-built market, 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. 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, 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: 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.

# # #

UNIVERSAL FOREST PRODUCTS, INC.
PAGE 4

CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED)
FOR THE THREE AND NINE MONTHS ENDED
SEPTEMBER 2010/2009

		Quarter Period																Year to Date
(In thousands, except per share data)		2010								2009								2010								2009
NET SALES		$	480,574				100	%		$	457,768				100	%		$	1,512,166				100	%		$	1,334,435				100	%
COST OF GOODS SOLD			426,159				88.7				388,505				84.9				1,328,232				87.8				1,135,866				85.1
GROSS PROFIT			54,415				11.3				69,263				15.1				183,934				12.2				198,569				14.9
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES			47,286				9.8				51,198				11.2				149,815				9.9				156,310				11.7
NET LOSS (GAIN) ON DISPOSITION OF ASSETS AND OTHER IMPAIRMENT AND EXIT CHARGES			1,137				0.2				606				0.1				1,521				0.1				(1,246	)			(0.1	)
EARNINGS FROM OPERATIONS			5,992				1.2				17,459				3.8				32,598				2.2				43,505				3.3
INTEREST EXPENSE			888				0.2				900				0.2				2,677				0.2				3,403				0.3
INTEREST INCOME			(111	)			—				(79	)			—				(301	)			—				(258	)			—
			777				0.2				821				0.2				2,376				0.2				3,145				0.2
EARNINGS BEFORE INCOME TAXES			5,215				1.1				16,638				3.6				30,222				2.0				40,360				3.0
INCOME TAXES			2,017				0.4				6,378				1.4				10,836				0.7				14,808				1.1
NET EARNINGS			3,198				0.7				10,260				2.2				19,386				1.3				25,552				1.9
LESS NET EARNINGS ATTRIBUTABLE TO NONCONTROLLING INTEREST			(614	)			(0.1	)			(206	)			—				(2,099	)			(0.1	)			(617	)			—
NET EARNINGS ATTRIBUTABLE TO CONTROLLING INTEREST		$	2,584				0.5			$	10,054				2.2			$	17,287				1.1			$	24,935				1.9
EARNINGS PER SHARE — BASIC		$	0.13							$	0.52							$	0.90							$	1.30
EARNINGS PER SHARE — DILUTED		$	0.13							$	0.51							$	0.89							$	1.28
WEIGHTED AVERAGE SHARES OUTSTANDING			19,201								19,307								19,239								19,244
WEIGHTED AVERAGE SHARES OUTSTANDING WITH COMMON STOCK EQUIVALENTS			19,416								19,585								19,488								19,442

SUPPLEMENTAL SALES DATA

		Quarter Period																Year to Date
Market Classification		2010				%				2009				%				2010				%				2009				%
Do-It-Yourself/Retail		$	197,855				41	%		$	214,299				46	%		$	678,096				44	%		$	673,063				49	%
Site-Built Construction			70,115				14	%			68,984				15	%			203,227				13	%			189,947				14	%
Industrial			158,091				32	%			132,532				28	%			463,318				30	%			368,951				27	%
Manufactured Housing			63,429				13	%			53,676				11	%			193,407				13	%			134,957				10	%
Total Gross Sales			489,490				100	%			469,491				100	%			1,538,048				100	%			1,366,918				100	%
Sales Allowances			(8,916	)							(11,723	)							(25,882	)							(32,483	)
Total Net Sales		$	480,574							$	457,768							$	1,512,166							$	1,334,435

UNIVERSAL FOREST PRODUCTS, INC.
PAGE 5

CONSOLIDATED BALANCE SHEETS (UNAUDITED)
SEPTEMBER 2010/2009

(In thousands)		2010				2009
ASSETS
CURRENT ASSETS
Cash and cash equivalents		$	58,072			$	79,976
Accounts receivable			166,369				162,875
Inventories			172,457				142,100
Assets held for sale			—				3,057
Other current assets			18,759				23,242
TOTAL CURRENT ASSETS			415,657				411,250
OTHER ASSETS			6,069				3,439
INTANGIBLE ASSETS, NET			175,051				175,809
PROPERTY, PLANT AND EQUIPMENT, NET			221,839				230,557
TOTAL ASSETS		$	818,616			$	821,055
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Accounts payable		$	78,683			$	70,817
Accrued liabilities			70,301				86,633
Current portion of long-term debt and capital leases			702				3,064
TOTAL CURRENT LIABILITIES			149,686				160,514
LONG-TERM DEBT AND CAPITAL LEASE OBLIGATIONS, less current portion			52,465				53,168
OTHER LIABILITIES			34,376				31,659
EQUITY			582,089				575,714
TOTAL LIABILITIES AND EQUITY		$	818,616			$	821,055

UNIVERSAL FOREST PRODUCTS, INC.
PAGE 6

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
FOR THE NINE MONTHS ENDED
SEPTEMBER 2010/2009

(In thousands)		2010				2009
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings attributable to controlling interest		$	17,287			$	24,935
Adjustments to reconcile net earnings attributable to controlling interest to net cash from operating activities:
Depreciation			22,305				24,604
Amortization of intangibles			5,243				6,414
Expense associated with share-based compensation arrangements			1,495				1,417
Excess tax benefits from share-based compensation arrangements			(265	)			(302	)
Expense associated with stock grant plans			134				103
Deferred income taxes (credit)			(228	)			151
Net earnings attributable to noncontrolling interest			2,099				617
Net loss (gain) on sale or impairment of assets			1,053				(1,892	)
Changes in:
Accounts receivable			(58,151	)			(24,342	)
Inventories			(7,103	)			51,488
Accounts payable			14,127				7,578
Accrued liabilities and other			14,740				21,160
NET CASH FROM OPERATING ACTIVITIES			12,736				111,931
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property, plant, and equipment			(15,679	)			(9,497	)
Acquisitions, net of cash received			(6,529	)			—
Proceeds from sale of property, plant and equipment			540				10,408
Purchase of product technology and non-compete agreement			(4,589	)			—
Advances of notes receivable			(1,000	)			(14	)
Collections of notes receivable			143				134
Insurance proceeds			—				1,023
Other, net			17				16
NET CASH FROM INVESTING ACTIVITIES			(27,097	)			2,070
CASH FLOWS FROM FINANCING ACTIVITIES:
Net borrowings (repayments) under revolving credit facilities			—				(30,257	)
Repayment of long-term debt			(719	)			(16,830	)
Borrowings of long-term debt			—				800
Proceeds from issuance of common stock			1,439				2,109
Purchase of additional noncontrolling interest			(1,227	)			(1,770	)
Distributions to noncontrolling interest			(944	)			(270	)
Capital contribution from noncontrolling interest			250				14
Dividends paid to shareholders			(3,869	)			(1,158	)
Repurchase of common stock			(4,999	)			(242	)
Excess tax benefits from share-based compensation arrangements			265				302
Other, net			18				(60	)
NET CASH FROM FINANCING ACTIVITIES			(9,786	)			(47,362	)
NET CHANGE IN CASH AND CASH EQUIVALENTS			(24,147	)			66,639
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD			82,219				13,337
CASH AND CASH EQUIVALENTS, END OF PERIOD		$	58,072			$	79,976
SUPPLEMENTAL INFORMATION:
Cash paid (refunded) during the period for:
Interest			2,058				3,074
Income taxes			(1,488	)			5,964