Universal Reports Continued Earnings Growth; Posts a 19% Increase for 1999
GRAND RAPIDS, Mich., Jan. 25 /PRNewswire/ -- Universal Forest Products(R) (Nasdaq: UFPI), today announced results for the fourth quarter and year ending December 25, 1999, including record annual net sales of $1.44 billion, up 15.8 percent compared with 1998 sales of $1.24 billion. Net income for the year increased to $31.4 million or $1.48 per share (diluted) compared with $26.4 million or $1.28 per share (diluted) in 1998, a 19.0 percent improvement.
For the fourth quarter, sales increased 10.6 percent to $299.7 million compared to $271.0 million for the same quarter of 1998. Net earnings for the quarter increased 17.4 percent to $3.8 million from $3.2 million for the comparable 1998 quarter.
FINANCIAL HIGHLIGHTS
Period Ended Three Months % Twelve Months %
Dec. 25/26 1999 1998 Change 1999 1998 Change
(In thousands,
except per
share data)
Net sales $299,722 $270,962 +10.6 $1,435,055 $1,238,907 +15.8
Gross profit 38,374 35,527 +8.0 182,471 149,214 +22.3
Net earnings 3,782 3,221 +17.4 31,448 26,419 +19.0
Earnings per share
- Diluted $0.18 $0.15 +20.0 $1.48 $1.28 +15.6
Weighted Average
shares outstanding
with common stock
equivalents 20,774 21,417 21,186 20,613
"1999 was an exciting year for Universal Forest Products," said William G. Currie, UFPI's chief executive officer. "In this, the second year of our 'Performance 2002' initiative, we continued to drive the company toward our long-term goals. In 1999, we executed a series of actions that both increased our manufacturing capacity and level of value-added product mix in our key markets, positioning Universal as a clear national leader in every segment of our business."
1999 Key Corporate Developments:
Acquisitions
- Acquired Westminster, Maryland facility from Ryland Group to increase
manufacturing capacity of roof trusses, floor trusses and wall panels in
the Mid-Atlantic market.
- Acquired facilities in New Waverly, Silsbee, and Schertz, Texas to
expand the company's pressure treated lumber manufacturing capacity.
- Acquired a new facility in Riverside, Calif., which allows the company
to consolidate existing Southern California operations for increased
efficiency, and expand future production capacity.
Expansion of Current Facilities and New Facility Openings
- Opened a new facility in Grandview, Texas to manufacture and distribute
the company's OPENJOIST 2000(TM) product line, and provide increased
production capacity for engineered wood components.
- Increased manufacturing capacity of roof trusses, floor trusses, and
wall panels, in the Mid-Atlantic market with the opening of new
facilities in Hohenwald, Tenn. and Liberty, N.C.
- Added new roof truss and floor truss manufacturing lines to existing
company manufacturing facilities in Belchertown, Mass. and Woodburn,
Ore.
- Opened a new, larger manufacturing and engineering support facility in
Grand Rapids, Mich.
- Opened a new manufacturing facility in Jackson, Miss., to better service
our existing customers and expand our customer base in Alabama,
Mississippi, and Louisiana.
National Distribution Agreement
- Entered into a national marketing and distribution agreement with Trus
Joist MacMillan enabling the company to offer engineered lumber systems
to customers in the manufactured housing market.
The company continued to show increased sales in three of its four key markets. Year-over-year sales to the do-it-yourself (DIY) market increased 16 percent, while sales to the site-built construction and industrial markets rose 67 percent and 18 percent, respectively. Sales to manufactured housing customers were down less than 1 percent, reflecting an overall slowdown in manufactured housing production as a result of an over supply of finished homes at the retail level.
"In the near term, we expect continued sales increases in the DIY, site-built construction, and industrial markets," explained Currie. Even through continued increases in interest rates will likely dampen housing demand, we firmly believe that increased sales from the growing demand of engineered wood components, will offset a decline in sales caused by the decline in the number of new housing starts. Sales to manufactured housing customers will be significantly impacted as the industry curtails production to correct their oversupply situation at the retail level. However, the diversification of our markets has enabled UFPI to show consistent top and bottom line growth in spite of temporary disruptions in any one particular market segment. Diversification is a key element in our long-term strategy.
"We will continue to grow our company through internal expansion and external acquisitions. To date, our acquisitions not only have been accretive, but also expanded our industry expertise and strengthened our management team. We will to seek new acquisitions that fit our strategic plan, while meeting our stringent criteria," added Currie. To finance future growth, in 1999, UFPI obtained long-term acquisition financing through a private placement of $100 million of unsecured notes and a five-year $175 million revolving credit line.
Universal Forest Products(R) markets, manufactures, and engineers, products for DIY retail home centers, structural lumber products for the manufactured housing industry, complex wood components for the site-built construction market, and specialty wood packaging for various industries. For information about Universal Forest Products(R) on the Internet, please contact the company's investor relations web site at www.ufpi.com, or call 1-888-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. 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
FOR THE TWELVE MONTHS ENDED
DECEMBER 1999/1998
(In thousands, except Quarter Period
per share data) 1999 1998
NET SALES $299,722 100% $270,962 100%
COST OF GOODS SOLD 261,348 87.20 235,435 86.89
GROSS PROFIT 38,374 12.80 35,527 13.11
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES 29,232 9.75 28,149 10.39
EARNINGS FROM OPERATIONS 9,142 3.05 7,378 2.72
OTHER EXPENSE (INCOME):
Interest expense 2,623 0.88 2,205 0.81
Interest revenue (107) -0.04 (143) -0.05
2,516 0.84 2,062 0.76
EARNINGS BEFORE INCOME TAXES,
MINORITY INTEREST AND EQUITY
IN EARNINGS (LOSS) OF INVESTEE 6,626 2.21 5,316 1.96
INCOME TAXES 2,038 0.68 2,095 0.77
EARNINGS BEFORE MINORITY INTEREST
AND EQUITY IN EARNINGS (LOSS) OF
INVESTEE 4,588 1.53 3,221 1.19
MINORITY INTEREST (498) -0.17 -- 0.00
EQUITY IN EARNINGS (LOSS)
OF INVESTEE (308) -0.10 -- 0.00
NET EARNINGS $3,782 1.26 $3,221 1.19
EARNINGS PER SHARE - BASIC $0.19 $0.16
EARNINGS PER SHARE - DILUTED $0.18 $0.15
WEIGHTED AVERAGE SHARES
OUTSTANDING 20,345 20,710
WEIGHTED AVERAGE SHARES OUTSTANDING
WITH COMMON STOCK EQUIVALENTS 20,774 21,417
SUPPLEMENTAL SALES DATA
Quarter Period
Market Classification 1999 % 1998 %
Do-It-Yourself $116,046 38% $99,045 37%
Manufactured Housing 89,005 30% 98,419 36%
Site-Built Construction 53,050 18% 41,613 15%
Industrial and Other 41,621 14% 31,885 12%
Total $299,722 100% $270,962 100%
(In thousands, except Year to Date
per share data) 1999 1998
NET SALES $1,435,055 100% $1,238,907 100%
COST OF GOODS SOLD 1,252,584 87.28 1,089,693 87.96
GROSS PROFIT 182,471 12.72 149,214 12.04
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES 119,673 8.34 97,065 7.83
EARNINGS FROM OPERATIONS 62,798 4.38 52,149 4.21
OTHER EXPENSE (INCOME):
Interest expense 11,853 0.83 9,506 0.77
Interest revenue (592) -0.04 (391) -0.03
11,261 0.78 9,115 0.74
EARNINGS BEFORE INCOME TAXES,
MINORITY INTEREST AND EQUITY
IN EARNINGS (LOSS) OF INVESTEE 51,537 3.59 43,034 3.47
INCOME TAXES 19,955 1.39 16,615 1.34
EARNINGS BEFORE MINORITY INTEREST
AND EQUITY IN EARNINGS (LOSS)
OF INVESTEE 31,582 2.20 26,419 2.13
MINORITY INTEREST (701) -0.05 -- 0.00
EQUITY IN EARNINGS (LOSS)
OF INVESTEE 567 0.04 -- 0.00
NET EARNINGS $31,448 2.19 $26,419 2.13
EARNINGS PER SHARE - BASIC $1.52 $1.33
EARNINGS PER SHARE - DILUTED $1.48 $1.28
WEIGHTED AVERAGE SHARES
OUTSTANDING 20,637 19,917
WEIGHTED AVERAGE SHARES
OUTSTANDING WITH COMMON
STOCK EQUIVALENTS 21,186 20,613
SUPPLEMENTAL SALES DATA
Year to Date
Market Classification 1999 % 1998 %
Do-It-Yourself $650,859 45% $562,625 46%
Manufactured Housing 398,237 28% 401,678 32%
Site-Built Construction 212,479 15% 127,549 10%
Industrial and Other 173,480 12% 147,055 12%
Total $1,435,055 100% $1,238,907 100%
CONSOLIDATED BALANCE SHEETS
DECEMBER 1999/1998
(In thousands)
ASSETS 1999 1998
CURRENT ASSETS
Cash and cash equivalents $4,106 $920
Accounts receivable 70,012 62,711
Inventories 131,535 108,399
Other current assets 11,044 9,547
TOTAL CURRENT ASSETS 216,697 181,577
OTHER ASSETS 10,836 10,922
GOODWILL AND NON-COMPETE 93,183 95,980
PROPERTY, PLANT AND EQUIPMENT, NET 149,113 131,316
TOTAL ASSETS $469,829 $419,795
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Notes payable $1,520 $1,997
Accounts payable and
accrued liabilities 82,260 70,261
Current portion of long-term
debt and capital leases 7,402 9,760
TOTAL CURRENT LIABILITIES 91,182 82,018
LONG-TERM DEBT AND CAPITAL
LEASES, less current portion 135,096 115,740
REVOLVING CREDIT FACILITY 11,800 16,380
OTHER LIABILITIES 17,189 14,074
SHAREHOLDERS' EQUITY 214,562 191,583
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $469,829 $419,795
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE TWELVE MONTHS ENDED
DECEMBER 1999/1998
(In thousands) 1999 1998
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings $31,448 $26,419
Adjustments to reconcile net earnings to
net cash from operating activities:
Depreciation 14,885 12,584
Amortization of non-compete agreements
and goodwill 3,270 2,464
Deferred income taxes (774) 1,292
Loss on sale of property, plant and equipment 489 422
Stock Gift Program and Directors Grant
Program expense 40 27
Changes in:
Accounts receivable (7,300) (5,698)
Inventories (23,136) 20,093
Other 1,607 186
Accounts payable 8,141 (1,504)
Accrued liabilities 4,129 10,294
NET CASH FROM OPERATING ACTIVITIES 32,799 66,579
CASH FLOWS FROM INVESTING ACTIVITIES:
Collection of notes receivable 3,431 377
Advances on notes receivable (139) (3,200)
Purchases of property, plant, and equipment (35,418) (28,433)
Acquisitions, net of cash received -- (98,167)
Proceeds from sale of property, plant
and equipment 2,247 1,688
Other (87) (370)
NET CASH FROM INVESTING ACTIVITIES (29,966) (128,105)
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of long-term debt (10,744) (31,952)
Proceeds from issuance of long-term debt 27,502 80,304
Net borrowings (repayments) under revolving
credit facility and notes payable (5,327) 11,880
Dividends paid to shareholders (1,539) (1,451)
Proceeds from issuance of common stock 942 508
Repurchase of common stock (10,481) --
NET CASH FROM FINANCING ACTIVITIES 353 59,289
NET CHANGE IN CASH AND CASH EQUIVALENTS 3,186 (2,237)
CASH AND CASH EQUIVALENTS, BEGINNING
OF YEAR 920 3,157
CASH AND CASH EQUIVALENTS, END OF YEAR $4,106 $920
SOURCE Universal Forest Products
CONTACT: Charles R. Felix, Sr. V.P. Development and Investor Relations, or Michael R. Cole, V. P. of Finance, both of Universal Forest Products 616-364-6161, or General Info., Tad Gage, 312-640-6745, Analyst Contact, Claire Koeneman, 312-640-6784, both of The Financial Relations Board/