Release Details

GRAND RAPIDS, Mich., Jul 14, 2010 (BUSINESS WIRE) --

Universal Forest Products, Inc. (Nasdaq: UFPI) today reported second-quarter 2010 results, including a 24% increase in net sales to $638.6 million over $514.9 million for the same period last year. Net earnings for the quarter were $13.7 million, or $0.70 per diluted share, compared to net earnings of $16.1 million, or $0.83 per diluted share, for the same period of 2009. The results reflect sales increases in all four of the Company's markets as well as a volatile lumber market that dropped precipitously during the quarter, negatively affecting profits, particularly in the month of June.

"While these numbers aren't where we'd like them to be, they aren't a disappointment given the most unstable lumber market I've seen in my 36 years with the Company. Our people helped us turn in solid results in the face of some extreme challenges," said CEO Michael B. Glenn. "It's testimony to the strength of our balanced business model, which allows us to seek opportunity in more than one market."

"These are tough times, but we're in an enviable position in the industry: We're focused on growth and armed with the resources we need to take advantage of opportunities that arise," Glenn added.

Among the Company's goals for the year are to grow top-line sales, manage inventory and receivables in a tenuous economy, and continuously improve operations to reduce costs.

The lumber market was approximately 52% higher, on average, in the second quarter of 2010 compared to the same period of 2009, and was unusually volatile during the quarter. This volatility had a significant adverse impact on gross profits, particularly in the month of June. Lumber prices increased to a peak of $367 at the end of April and then fell quickly--to $247 by late June. Since the end of June, lumber prices have stabilized.

By market, Universal posted the following gross sales results for the second quarter:

Do-It-Yourself/retail: $315.8 million, an increase of 8.4% over the same period of 2009. Unit sales to this market declined an estimated 3% due to soft demand. According to Harvard's Joint Center for Housing Studies, the industry saw a 9.7% annualized decline in demand in the second quarter of 2010. Retailers didn't anticipate the weak demand and many held significant inventories in the quarter, which typically is a busy selling season. Most experts, including Harvard, are calling for an increase in home improvement expenditures by the end of 2010 (the first annual increase since 2006) driven by predicted improvements in the economy and stabilization in employment and home prices. Universal continues to add to the products it offers to retailers, with items such as new lines of decking products and accessories.

Industrial packaging/components: $179.2 million, an increase of 36.0% over the second quarter of 2009. Unit sales increased by more than 20% during the quarter, primarily due to market share gains that resulted from adding approximately 225 new customers. This continues to be an area of opportunity for Universal. 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: $72.2 million, which is 19.1% higher than same period of 2009. Unit sales increased by approximately 11% during the quarter; national single-family and multifamily housing starts increased approximately 31% and decreased approximately 6%, respectively, in April and May of 2010, compared to the same periods of 2009. We have taken several recent plant closure actions in order to achieve profitability and cash flow objectives, which may temporarily result in a loss of market share. Universal sees home building as a challenged industry for years to come and will continue to focus on commercial, government and turnkey projects.

Manufactured housing: $81.6 million, an increase of 82.5% over 2009. Unit sales to this market increased 41%, a result of increased demand in some areas of the country, notably the Southwest. Performance in this market also reflects the growing list of products the Company supplies through new manufacturing opportunities and through its expanded distribution business, in which it offers everything from adhesives to plumbing supplies.

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, the Company remains optimistic about its performance in 2010, given its strong financial position, solid business model and diverse business opportunities that position it better than most to endure challenging times.

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, July 15, 2010. 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) 804-6923 or internationally at (857) 350-1669. Use conference pass code 18827881. 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, Aug. 16, 2010, domestically at (888) 286-8010 and internationally at (617) 801-6888. Use replay pass code 50546407.

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.

SOURCE: Universal Forest Products

Universal Forest Products, Inc.
Lynn Afendoulis
Director, Corporate Communications
(616) 365-1502