Universal Forest Products, Inc. Announces Strong Third Quarter Results; Reports 20% Increase in Earnings
GRAND RAPIDS, Mich., Oct. 16 /PRNewswire/ -- Universal Forest Products, Inc. (Nasdaq: UFPI) today announced third quarter net earnings of $9.8 million or $0.48 per share (diluted), a 20% increase over net earnings of $8.1 million or $0.40 per share (diluted) reported for the third quarter of 2000. Net sales for the quarter were $432.7 million, an increase of 16.6% over net sales of $371.0 million reported for the same quarter last year.
For the first nine months of 2001, net earnings were $29.0 million or $1.43 per share (diluted) compared to $27.1 million or $1.32 per share (diluted) a year ago. Net sales for the first nine months of 2001 were $1.204 billion, an 8.8% increase over net sales of $1.107 billion reported for the first nine months of 2000.
"Universal continues to deliver strong sales and earnings results, despite challenges in this economic environment," said William G. Currie, UFPI's chief executive officer. "Our financial performance this quarter demonstrates the success of our business strategy to diversify in four key business segments and expand geographically across the U.S. We saw double-digit unit sales growth in each of our four key markets and the success is due to Universal's employees who are focused on executing our business strategy and delivering on our financial objectives.
"We continue to strengthen our business through successful acquisitions. These transactions, most recently P&R Truss, will enable UFPI to continue to enhance its existing business," said Currie. The Company closed on its acquisition of P&R Truss on October 15.
Currie noted that Universal's sales to the site-built construction, industrial, manufactured housing, and Do-It-Yourself (D-I-Y) markets were up 32.1%, 14.7%, 14.6%, and 12.1%, respectively, for the quarter. Although overall lumber prices increased temporarily in August, they had little impact on the Company's reported sales for the third quarter.
Currie attributed a portion of the Company's sales increases in two markets -- site-built construction and manufactured housing -- to recent acquisitions of Superior Truss, D&R Framing Contractors, and the Sunbelt Wood Components division of Kevco Manufacturing.
"We remain cautious about the economy. The results we experienced during the quarter supports our fourth quarter guidance as reflected in UFPI's outlook," concluded Currie.
Outlook
The Company expects to continue to grow unit sales to each of its four key markets for the balance of the year. With current economic conditions in mind, management has set the following targets for the fourth quarter of 2001:
-
Sales ranging from $310 million to $325 million
-
Earnings from $0.16 to $0.19 per share (diluted)
Universal Forest Products will conduct a conference call to discuss information in this news release and related matters at 11 a.m. EDT on Tuesday, October 16, 2001. The conference call will be hosted by William G. Currie and will be available for analysts and institutional investors domestically at 800-521-5426 or internationally at 303-224-6999. Use conference call ID #1258822. The conference call will be available simultaneously, and in its entirety, to all interested investors and news media through a webcast at www.ufpi.com . Click on "investor relations" then "live webcast."
Universal Forest Products markets, manufactures, and engineers products for D-I-Y retail home centers, structural lumber products for the manufactured housing industry, engineered wood components for the site-built construction market, and specialty wood packaging for various industries. For information about Universal Forest Products on the Internet, please contact the company's investor relations web site at www.ufpi.com .
Included in this report are certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and 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. 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 are the following: Adverse lumber market trends, competitive activity, negative economic trends, government regulations, and weather. These risk factors and additional information are included in the company's reports on Form 10K and 10Q on file with the Securities and Exchange Commission.
CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED)
FOR THE NINE MONTHS ENDED
SEPTEMBER 2001/2000
Quarter Period
(In thousands, except per share data) 2001 2000
NET SALES $432,689 100% $371,030 100%
COST OF GOODS SOLD 376,507 87.02 322,103 86.81
GROSS PROFIT 56,182 12.98 48,927 13.19
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES 37,525 8.67 31,885 8.59
EARNINGS FROM OPERATIONS 18,657 4.31 17,042 4.60
INTEREST EXPENSE 2,948 0.68 3,648 0.98
INTEREST REVENUE (151) -0.03 (135) -0.04
2,797 0.65 3,513 0.94
EARNINGS BEFORE INCOME TAXES,
MINORITY INTEREST AND EQUITY
IN EARNINGS (LOSS) OF INVESTEE 15,860 3.66 13,529 3.66
INCOME TAXES 5,519 1.28 5,177 1.40
EARNINGS BEFORE MINORITY
INTEREST AND EQUITY IN
EARNINGS OF INVESTEE 10,341 2.38 8,352 2.26
MINORITY INTEREST (618) -0.14 (144) -0.04
EQUITY IN EARNINGS
OF INVESTEE 85 0.03 (60) -0.02
NET EARNINGS $9,808 2.27 $8,148 2.20
EARNINGS PER SHARE - BASIC $0.50 $0.40
EARNINGS PER SHARE - DILUTED $0.48 $0.40
WEIGHTED AVERAGE SHARES
OUTSTANDING 19,803 20,123
WEIGHTED AVERAGE SHARES
OUTSTANDING WITH COMMON
STOCK EQUIVALENTS 20,450 20,481
CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED)
FOR THE NINE MONTHS ENDED
SEPTEMBER 2001/2000
Year to Date
(In thousands, except per share
data) 2001 2000
NET SALES $1,203,675 100% $1,106,680 100%
COST OF GOODS SOLD 1,037,977 86.23 960,044 86.75
GROSS PROFIT 165,698 13.77 146,636 13.25
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES 108,667 9.03 91,248 8.25
EARNINGS FROM OPERATIONS 57,031 4.74 55,388 5.00
INTEREST EXPENSE 9,686 0.80 10,423 0.94
INTEREST REVENUE (468) -0.04 (381) -0.03
9,218 0.76 10,042 0.91
EARNINGS BEFORE INCOME TAXES,
MINORITY INTEREST AND EQUITY
IN EARNINGS (LOSS) OF INVESTEE 47,813 3.98 45,346 4.09
INCOME TAXES 17,554 1.46 17,693 1.60
EARNINGS BEFORE MINORITY
INTEREST AND EQUITY IN
EARNINGS OF INVESTEE 30,259 2.52 27,653 2.49
MINORITY INTEREST (1,479) -0.12 (474) -0.04
EQUITY IN EARNINGS
OF INVESTEE 243 0.01 (33) 0.00
NET EARNINGS $29,023 2.41 $27,146 2.45
EARNINGS PER SHARE - BASIC $1.47 $1.35
EARNINGS PER SHARE - DILUTED $1.43 $1.32
WEIGHTED AVERAGE SHARES
OUTSTANDING 19,769 20,134
WEIGHTED AVERAGE SHARES
OUTSTANDING WITH COMMON
STOCK EQUIVALENTS 20,360 20,502
SUPPLEMENTAL SALES DATA
Quarter Period
Market Classification 2001 % 2000 %
Do-It-Yourself $202,380 46% $180,572 49%
Site-Built Construction 90,478 21% 68,496 18%
Manufactured Housing 84,645 20% 73,843 20%
Industrial and Other 55,186 13% 48,119 13%
Total $432,689 100% $371,030 100%
SUPPLEMENTAL SALES DATA
Year to Date
Market Classification 2001 % 2000 %
Do-It-Yourself $602,850 51% $546,191 50%
Site-Built Construction 234,300 19% 180,401 16%
Manufactured Housing 209,221 17% 234,346 21%
Industrial and Other 157,304 13% 145,742 13%
Total $1,203,675 100% $1,106,680 100%
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
SEPTEMBER 2001/2000
(In thousands)
ASSETS 2001 2000 LIABILITIES AND
SHAREHOLDERS'
EQUITY 2001 2000
CURRENT ASSETS CURRENT LIABILITIES
Cash and cash
equivalents $6,310 $7,780 Notes payable $669 $2,860
Restricted cash
equivalents 411 - Accounts payable and
accrued
Accounts liabilities 108,023 95,524
receivable 125,150 100,430 Inventories 122,228 114,139
Current portion of
long-term debt
Other current and capital
assets 7,410 7,046 leases 20,952 7,291
TOTAL CURRENT TOTAL CURRENT
ASSETS 261,509 229,395 LIABILITIES 129,644 105,675
OTHER ASSETS 11,572 11,446 LONG-TERM DEBT AND CAPITAL
GOODWILL AND NON- LEASES, less
COMPETE 113,652 106,547 current portion 152,807 153,836
OTHER LIABILITIES 18,728 18,149
PROPERTY, PLANT
AND EQUIPMENT, SHAREHOLDERS'
NET 177,944 168,276 EQUITY 263,498 238,004
TOTAL LIABILITIES AND
TOTAL ASSETS $564,677 $515,664 SHAREHOLDERS'
EQUITY $564,677 $515,664
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
FOR THE NINE MONTHS ENDED
SEPTEMBER 2001/2000
(In thousands) 2001 2000
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings $29,023 $27,146
Adjustments to reconcile net earnings
to net cash
from operating activities:
Depreciation 14,586 12,361
Amortization of non-compete
agreements and goodwill 3,348 2,673
Loss on sale of property, plant
and equipment 588 72
Changes in:
Accounts receivable (52,660) (21,470)
Inventories 3,891 22,053
Accounts payable 20,786 6,822
Accrued liabilities and other 15,096 7,901
NET CASH FROM OPERATING
ACTIVITIES 34,658 57,558
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant, and
equipment (22,166) (23,677)
Acquisitions, net of cash received (21,559) (32,561)
Proceeds from sale of property, plant
and equipment 886 642
Other 1,608 (816)
NET CASH FROM INVESTING
ACTIVITIES (41,231) (56,412)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net borrowings under revolving credit
facilities and notes payable 23,106 11,950
Proceeds from issuance of long-term
debt - 2,118
Repayment of long-term debt (9,838) (7,535)
Proceeds from issuance of common
stock 827 431
Distributions to minority shareholder (1,275) -
Dividends paid to shareholders (792) (808)
Repurchase of common stock (1,537) (3,628)
NET CASH FROM FINANCING
ACTIVITIES 10,491 2,528
NET CHANGE IN CASH AND CASH
EQUIVALENTS 3,918 3,674
CASH AND CASH EQUIVALENTS, BEGINNING
OF YEAR 2,392 4,106
CASH AND CASH EQUIVALENTS, END OF
PERIOD $6,310 $7,780
SOURCE Universal Forest Products, Inc.
CONTACT: Michael R. Cole, Chief Financial Officer of Universal Forest Products, Inc., +1-616-364-6161; or James Ankner, Vice President of Fleishman Hillard, +1-212-453-2198, for Universal Forest Products, Inc.