Universal Forest Products, Inc. Reports a 63% Increase in Diluted Earnings Per Share for 1st Quarter 2005
GRAND RAPIDS, Mich., April 11 /PRNewswire-FirstCall/ -- Universal Forest Products, Inc. (Nasdaq: UFPI) today announced a strong first quarter, marked by an increase in diluted earnings per share to $0.49, up 63.3% over diluted earnings per share of $0.30 reported for the same period last year. The Company posted net sales of $537.2 million, up 15.4% over net sales of $465.7 million in the first quarter of 2004.
"In our 50th year, the story of our success continues to be one of strong, steady growth driven by the hard work of a dedicated workforce," said Universal CEO and Vice Chairman William G. Currie. "These results also reflect the strengths of our business model, which relies on diversification for continued balance and growth."
Overall, the Company posted a sales increase of 15.4%, which includes an estimated 9% increase in unit sales. The remaining increase in sales was attributable to higher prices driven by the lumber market.
By market, Universal posted first quarter sales of:
* $177.6 million D-I-Y/retail, down 0.7% over last year;
* $151.9 million in site-built construction, an increase of 32.3% over
last year;
* $111.3 million in industrial, up 17.2% over last year; and
* $96.3 million in manufactured housing, a 25.2% increase over 2004.
"We have not wavered in our commitment to and belief in the manufactured housing business and it has paid off," Currie said. "We've also emphasized growth in sales to the modular market and our performance there can be attributed to new proprietary products and to strong relationships we've forged over many decades.
"Site-built construction and industrial remain strong growth markets for Universal," Currie added. "As the leading national supplier to both, we're gaining market share and continuing to consolidate these two large, fragmented markets."
Sales to the D-I-Y/retail market experienced a decline in unit sales in the first quarter of 2005 over the same period of 2004, reflecting both the Company's efforts to create greater balance and diversification in its customer base and a late spring in the Northeast and Midwest.
Currie noted that earnings from operations increased almost 39%, to $17.4 million in the first quarter 2005 from $12.5 million for the first quarter last year, which was well in excess of the Company's 9% increase in unit sales. Earnings in 2004 were affected by operating losses from a framing operation in the West. That business entity has since been downsized and is operating more efficiently.
OUTLOOK
The Company anticipates continued growth in its business in 2005 and reaffirms its annual targets of a 7% to 12% increase in unit sales and a 10% to 15% increase in net earnings over results reported for 2004.
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 12, 2005. The conference call will be hosted by William G. Currie and will be available for analysts and institutional investors domestically at (866) 835-8893 or internationally at (703) 639-1409. Use conference call ID #680965. 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 .
Celebrating its 50th anniversary, 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 services for the site-built sector. In conjunction with its customers, Universal uses its engineering and manufacturing expertise, coupled with highly skilled employees, to design and construct buildings and housing. For information about Universal Forest Products on the Internet, please visit the Company's web site at http://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.
CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED)
FOR THE THREE MONTHS ENDED
MARCH 2005/2004
Quarter Period
(In thousands, except per share data) 2005 2004
NET SALES $537,160 100% $465,665 100%
COST OF GOODS SOLD 469,931 87.48 409,304 87.90
GROSS PROFIT 67,229 12.52 56,361 12.10
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES 49,851 9.28 43,840 9.41
EARNINGS FROM OPERATIONS 17,378 3.24 12,521 2.69
OTHER EXPENSE (INCOME)
Interest expense 3,775 0.70 3,631 0.78
Interest income (149) -0.03 (83) -0.02
Net gain on sale of real estate
and interest in subsidiary (1,272) -0.24 (369) -0.08
2,354 0.44 3,179 0.68
EARNINGS BEFORE INCOME TAXES
AND MINORITY INTEREST 15,024 2.80 9,342 2.01
INCOME TAXES 5,759 1.07 3,644 0.78
EARNINGS BEFORE MINORITY INTEREST 9,265 1.72 5,698 1.22
MINORITY INTEREST (36) -0.01 (131) -0.03
NET EARNINGS $9,229 1.72 $5,567 1.20
EARNINGS PER SHARE - BASIC $0.51 $0.31
EARNINGS PER SHARE - DILUTED $0.49 $0.30
WEIGHTED AVERAGE SHARES OUTSTANDING 18,187 17,961
WEIGHTED AVERAGE SHARES
OUTSTANDING WITH COMMON
STOCK EQUIVALENTS 18,972 18,709
Year to Date
(In thousands, except per share data) 2005 2004
NET SALES $537,160 100% $465,665 100%
COST OF GOODS SOLD 469,931 87.48 409,304 87.90
GROSS PROFIT 67,229 12.52 56,361 12.10
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES 49,851 9.28 43,840 9.41
EARNINGS FROM OPERATIONS 17,378 3.24 12,521 2.69
OTHER EXPENSE (INCOME)
Interest expense 3,775 0.70 3,631 0.78
Interest income (149) -0.03 (83) -0.02
Net gain on sale of real estate
and interest in subsidiary (1,272) -0.24 (369) -0.08
2,354 0.44 3,179 0.68
EARNINGS BEFORE INCOME TAXES
AND MINORITY INTEREST 15,024 2.80 9,342 2.01
INCOME TAXES 5,759 1.07 3,644 0.78
EARNINGS BEFORE MINORITY INTEREST 9,265 1.72 5,698 1.22
MINORITY INTEREST (36) -0.01 (131) -0.03
NET EARNINGS $9,229 1.72 $5,567 1.20
EARNINGS PER SHARE - BASIC $0.51 $0.31
EARNINGS PER SHARE - DILUTED $0.49 $0.30
WEIGHTED AVERAGE SHARES OUTSTANDING 18,187 17,961
WEIGHTED AVERAGE SHARES
OUTSTANDING WITH COMMON
STOCK EQUIVALENTS 18,972 18,709
SUPPLEMENTAL SALES DATA
Quarter Period
Market Classification 2005 % 2004 %
Do-It-Yourself/Retail $177,622 33% $178,885 38%
Site-Built Construction 151,901 28% 114,842 25%
Manufactured Housing 96,344 18% 76,975 17%
Industrial 111,293 21% 94,963 20%
Total $537,160 100% $465,665 100%
Year to Date
Market Classification 2005 % 2004 %
Do-It-Yourself/Retail $177,622 33% $178,885 38%
Site-Built Construction 151,901 28% 114,842 25%
Manufactured Housing 96,344 18% 76,975 17%
Industrial 111,293 21% 94,963 20%
Total $537,160 100% $465,665 100%
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
MARCH 2005/2004
(In thousands)
ASSETS 2005 2004 LIABILITIES
AND SHAREHOLDERS'
EQUITY 2005 2004
CURRENT ASSETS CURRENT LIABILITIES
Cash and cash
equivalents $28,396 $22,052 Accounts payable and
accrued
Accounts liabilities $188,786 $167,869
receivable 179,954 206,508
Inventories 286,835 219,204 Current portion
Other current of long-term
assets 15,429 6,009 debt and
capital leases 21,910 6,010
TOTAL CURRENT TOTAL CURRENT
ASSETS 510,614 453,773 LIABILITIES 210,696 173,879
OTHER ASSETS 8,303 8,523 LONG-TERM DEBT AND
CAPITAL
LEASES, less
INTANGIBLE current portion 251,806 285,682
ASSETS, NET 131,108 128,839
OTHER
LIABILITIES 36,515 31,158
PROPERTY,
PLANT AND
EQUIPMENT, SHAREHOLDERS'
NET 218,369 211,533 EQUITY 369,377 311,949
TOTAL LIABILITIES AND
TOTAL ASSETS $868,394 $802,668 SHAREHOLDERS'
EQUITY $868,394 $802,668
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
FOR THE THREE MONTHS ENDED
MARCH 2005/2004
(In thousands) 2005 2004
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings $9,229 $5,567
Adjustments to reconcile net earnings
to net cash from operating activities:
Depreciation 7,345 6,672
Amortization of intangibles 544 471
Deferred income taxes 19 20
Minority interest 36 131
Loss on sale of interest in
subsidiary - 193
Gain on sale of property, plant
and equipment (1,131) (603)
Changes in:
Accounts receivable (28,643) (73,128)
Inventories (73,913) (48,711)
Accounts payable 36,108 37,850
Accrued liabilities and other (6,103) 1,184
NET CASH FROM OPERATING ACTIVITIES (56,509) (70,354)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant, and
equipment (10,604) (7,295)
Acquisitions, net of cash received - (5,360)
Sale of interest in subsidiary - 4,679
Proceeds from sale of property, plant
and equipment 2,295 740
Other, net 366 178
NET CASH FROM INVESTING ACTIVITIES (7,943) (7,058)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net borrowings under revolving credit
facilities 66,713 81,516
Repayment of long-term debt (138) (58)
Proceeds from issuance of common stock 1,462 857
Distributions to minority shareholders (536) (125)
Repurchase of common stock - (116)
Other, net 73 (40)
NET CASH FROM FINANCING ACTIVITIES 67,574 82,034
NET CHANGE IN CASH AND CASH EQUIVALENTS 3,122 4,622
CASH AND CASH EQUIVALENTS, BEGINNING
OF PERIOD 25,274 17,430
CASH AND CASH EQUIVALENTS, END OF PERIOD $28,396 $22,052
SOURCE Universal Forest Products, Inc.
CONTACT: Lynn Afendoulis, Director, Corporate Communications of Universal Forest Products, Inc., +1-616-365-1502