Universal Forest Products, Inc. Reports a 31% Increase in Net Sales for 1st Quarter 2004; Posts a 20% Increase in Diluted Earnings Per Share
GRAND RAPIDS, Mich., April 12 /PRNewswire-FirstCall/ -- Universal Forest Products, Inc. (Nasdaq: UFPI) today announced a strong first quarter for the period ended March 27, 2004. The quarter was marked by net sales of $465.7 million, up 30.9% over net sales of $355.6 million for the first quarter of 2003. The Company also posted diluted earnings per share of $0.30, up 20.0% over diluted earnings per share of $0.25 reported for the same period last year.
"It was a powerful quarter; our core business saw the best February and March in the history of our Company," said William G. Currie, CEO and vice chairman. "Our team of nearly 9,000 employees again demonstrated the dedication and commitment that make this Company so successful. The housing market also remained strong and we picked up market share in each of our markets, which helped to fuel our growth."
In particular, Universal had robust performance in the site-built market, which saw a sales increase of 49.1% over the same period last year, and in the industrial market, which posted a 45.3% increase in sales for the first quarter. Overall, the Company's unit sales increased 13% in the first quarter, which was at the high end of its targeted range. The remaining increase in sales was attributable to higher lumber prices.
By market, Universal posted first quarter sales of:
* $178.9 million D-I-Y/retail, up 14.5% over last year;
* $114.8 million in site-built construction, an increase of 49.1% over last year;
* $77.0 million in manufactured housing, a 35.0% increase over 2003; and
* $95.0 million in industrial/other, up 45.3% over last year.
The Company's earnings reflect disappointing results of a joint venture framing operation in the Southwest.
"We were tremendously pleased with what we were able to accomplish in our core business during the first quarter," Currie said. "Despite the challenges we faced in our joint venture framing operation and the financial impact it had on our first quarter, we were able to grow earnings by more than 20%.
OUTLOOK
The Company anticipates continued growth in its business in 2004 and reaffirms its targets for both unit sales and diluted earnings per share growth of 10% to 14% for the year.
Universal Forest Products will conduct a conference call to discuss information included in this news release and related matters at 11:00 a.m. EDT on Tuesday, April 13, 2004. The conference call will be hosted by William G. Currie and will be available for analysts and institutional investors domestically at (888) 243-0814 or internationally at (703) 925-2401. Use conference call ID #434266. 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 .
Universal Forest Products markets, manufactures, and engineers wood and wood-alternative 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. Among the Company's newest and fastest-growing ventures are framing and installation services for the site-built and retail sectors. In conjunction with its customers, Universal uses its engineering and manufacturing expertise, coupled with highly skilled employees, to design and construct buildings and decks. For information about Universal Forest Products on the Internet, please visit the Company's web site at www.ufpi.com, or call 888-Buy-UFPI.
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.
HIGHLIGHTS TO FOLLOW
CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED)
FOR THE THREE MONTHS ENDED
MARCH 2004/2003
Quarter Period
(In thousands, except per share data) 2004 2003
NET SALES $465,665 100% $355,619 100%
COST OF GOODS SOLD 409,304 87.90 303,815 85.43
GROSS PROFIT 56,361 12.10 51,804 14.57
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES 43,929 9.43 40,188 11.30
EARNINGS FROM OPERATIONS 12,432 2.67 11,616 3.27
INTEREST EXPENSE 3,542 0.76 3,787 1.06
INTEREST REVENUE (83) -0.02 (47) -0.01
GAIN ON SALE OF OPERATIONS (369) -0.08 - 0.00
3,090 0.66 3,740 1.05
EARNINGS BEFORE INCOME TAXES
AND MINORITY INTEREST 9,342 2.01 7,876 2.21
INCOME TAXES (1) 3,644 0.78 2,791 0.78
EARNINGS BEFORE MINORITY INTEREST 5,698 1.22 5,085 1.43
MINORITY INTEREST (131) -0.03 (585) -0.16
NET EARNINGS $5,567 1.20 $4,500 1.27
EARNINGS PER SHARE - BASIC $0.31 $0.25
EARNINGS PER SHARE - DILUTED $0.30 $0.25
WEIGHTED AVERAGE SHARES
OUTSTANDING 17,961 17,729
WEIGHTED AVERAGE SHARES
OUTSTANDING WITH COMMON
STOCK EQUIVALENTS 18,709 18,252
Year to Date
(In thousands, except per share data) 2004 2003
NET SALES $465,665 100% $355,619 100%
COST OF GOODS SOLD 409,304 87.90 303,815 85.43
GROSS PROFIT 56,361 12.10 51,804 14.57
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES 43,929 9.43 40,188 11.30
EARNINGS FROM OPERATIONS 12,432 2.67 11,616 3.27
INTEREST EXPENSE 3,542 0.76 3,787 1.06
INTEREST REVENUE (83) -0.02 (47) -0.01
GAIN ON SALE OF OPERATIONS (369) -0.08 - 0.00
3,090 0.66 3,740 1.05
EARNINGS BEFORE INCOME TAXES
AND MINORITY INTEREST 9,342 2.01 7,876 2.21
INCOME TAXES (1) 3,644 0.78 2,791 0.78
EARNINGS BEFORE MINORITY INTEREST 5,698 1.22 5,085 1.43
MINORITY INTEREST (131) -0.03 (585) -0.16
NET EARNINGS $5,567 1.20 $4,500 1.27
EARNINGS PER SHARE - BASIC $0.31 $0.25
EARNINGS PER SHARE - DILUTED $0.30 $0.25
WEIGHTED AVERAGE SHARES
OUTSTANDING 17,961 17,729
WEIGHTED AVERAGE SHARES
OUTSTANDING WITH COMMON
STOCK EQUIVALENTS 18,709 18,252
SUPPLEMENTAL SALES DATA
Quarter Period
Market Classification 2004 % 2003 %
Do-It-Yourself/Retail $178,884 38% $156,220 44%
Site-Built Construction 114,843 25% 77,016 22%
Manufactured Housing 76,975 17% 57,033 16%
Industrial and Other 94,963 20% 65,350 18%
Total $465,665 100% $355,619 100%
Year to Date
Market Classification 2004 % 2003 %
Do-It-Yourself/Retail $178,884 38% $156,220 44%
Site-Built Construction 114,843 25% 77,016 22%
Manufactured Housing 76,975 17% 57,033 16%
Industrial and Other 94,963 20% 65,350 18%
Total $465,665 100% $355,619 100%
NOTES:
(1) Includes approximately $460 thousand of income taxes related to the sale of the Nascor interest and plant presented separately above.
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
MARCH 2004/2003
(In thousands)
ASSETS 2004 2003 LIABILITIES AND
SHAREHOLDERS'
EQUITY 2004 2003
CURRENT ASSETS CURRENT LIABILITIES
Cash and cash
equivalents $22,052 $11,506 Notes payable $ - $1,701
Restricted cash
equivalents 1,383 Accounts payable and
Accounts accrued
receivable 206,508 149,327 liabilities 165,978 110,730
Inventories 219,204 196,228 Current portion
of long-term
Other current debt and
assets 4,452 7,851 capital leases 6,010 6,611
TOTAL CURRENT TOTAL CURRENT
ASSETS 452,216 366,295 LIABILITIES 171,988 119,042
OTHER ASSETS 8,189 6,608 LONG-TERM DEBT AND CAPITAL
INTANGIBLE ASSETS 128,839 131,742 LEASES, less
current portion 285,682 297,020
OTHER LIABILITIES 31,158 26,752
PROPERTY, PLANT
AND EQUIPMENT, SHAREHOLDERS'
NET 211,533 207,121 EQUITY 311,949 268,952
TOTAL LIABILITIES AND
TOTAL ASSETS $800,777 $711,766 SHAREHOLDERS'
EQUITY $800,777 $711,766
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
FOR THE THREE MONTHS ENDED
MARCH 2004/2003
(In thousands) 2004 2003
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings $5,567 $4,500
Adjustments to reconcile net earnings
to net cash from operating activities:
Depreciation 6,672 5,949
Amortization of intangibles 471 322
Deferred income taxes 20 (405)
Loss on sale of Nascor interest 193 -
(Gain) Loss on sale or
impairment of property, plant
and equipment (603) 86
Changes in:
Accounts receivable (70,883) (44,110)
Proceeds from sale and
servicing of accounts
receivable (2,245) -
Inventories (48,711) (30,222)
Accounts payable 37,850 14,497
Accrued liabilities and other 1,315 (3,504)
NET CASH FROM OPERATING
ACTIVITIES (70,354) (52,887)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant, and
equipment (7,295) (9,809)
Acquisitions, net of cash received (5,360) -
Proceeds from sale of Nascor interest 4,679 -
Proceeds from sale of property, plant
and equipment 551 144
Other 367 44
NET CASH FROM INVESTING
ACTIVITIES (7,058) (9,621)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net borrowings under revolving credit
facilities and notes payable 81,516 61,752
Repayment of long-term debt (58) (22)
Proceeds from issuance of common stock 857 730
Distributions to minority shareholder (125) (273)
Repurchase of common stock (116) (1,627)
Other (40) -
NET CASH FROM FINANCING
ACTIVITIES 82,034 60,560
NET CHANGE IN CASH AND CASH
EQUIVALENTS 4,622 (1,948)
CASH AND CASH EQUIVALENTS, BEGINNING
OF PERIOD 17,430 13,454
CASH AND CASH EQUIVALENTS, END OF
PERIOD $22,052 $11,506
SOURCE Universal Forest Products, Inc.
CONTACT: AT THE COMPANY: Lynn Afendoulis, Director of Public Affairs of Universal Forest Products, Inc., +1-616-364-6161; or FLEISHMAN HILLARD: Jeremy Skule, Vice President, +1-212-453-2245