UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Universal Forest Products, Inc.

(Exact name of registrant as specified in its charter)

Michigan		0-22684		38-1465835
(State or other jurisdiction		(Commission		(IRS Employer
of Incorporation)		File Number)		Identification No.)
2801 East Beltline, NE
Grand Rapids, Michigan (Address of principal executive offices)				49525 (Zip Code)

(616) 364-6161
(Registrant’s telephone number, including area code)

None
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligations of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425).

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12).

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)).

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)).

 

 

Item 2.02		Results of Operations and Financial Condition

On July 16, 2007, the Registrant issued a press release announcing its financial results for the quarter ended June 30, 2007. A copy of the Registrant’s press release is attached as Exhibit 99(a) to this Current Report.

Item 9.01		Financial Statements, Pro Forma Financial Information, and Exhibits

(c) Exhibits

99(a) Press Release dated July 16, 2007.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

EXHIBIT INDEX

Exhibit Number		Document
99(a)		Press Release dated July 16, 2007.

news release
—AT THE COMPANY—
Lynn Afendoulis, Director, Corporate Communications
616/365-1502

FOR IMMEDIATE RELEASE
MONDAY, JULY 16, 2007

Universal Forest Products, Inc. reports 2^nd quarter earnings of $16.8 million
Company adjusts annual targets

GRAND RAPIDS, Mich., July 16, 2007 — Universal Forest Products, Inc. (Nasdaq: UFPI) today announced second quarter results that included net sales of $773.1 million and net earnings of $16.8 million, down from $826.8 million and $27.3 million, respectively, for the same period in 2006. Diluted earnings per share for the quarter were $0.86, down from $1.41 in the second quarter of 2006. The numbers reflect the continued impact of the weak housing market and soft lumber prices.

“We’re disappointed with any decrease in performance, but these results also underscore the strength of our balanced business model,” said President and CEO Michael B. Glenn. “Our site-built construction sales are off nearly 30% from the second quarter of last year and lumber prices — which affect our selling prices — are down 15%, but our gross sales for the quarter are down just 5.8%. That gives us confidence in a strategy that’s built on four markets and allows us to weather a decline in any one of them.”

“We saw market share gains in each of our markets and sales increases in three of them,” he added. “The efforts of our people in hard times like these give us optimism for the future and every reason to believe we’ll come out better for the challenges.”

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

	•		$360.9 million in Do-It-Yourself/retail, an increase of 1.7% over 2006;
	•		$162.0 million in site-built construction, a decrease of 30.0% from 2006;
	•		$162.4 million in industrial, an increase of 7.1% over 2006; and
	•		$105.2 million in manufactured/modular housing, an increase of 3.5% over 2006.

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Universal Forest Products, Inc.
Page 2

Declines in the housing market were broader and deeper than anticipated, Glenn said, making projections for recovery difficult. Even as the market returns, price pressure exerted by builders has resulted in lower margins that could impact results until market conditions improve, he noted. “We have reason to believe that recovery will begin in mid- to late 2008,” he said. “We have significant order files, but the current inventory of unsold homes makes it unlikely that those will translate to sales any time soon.”

The housing market’s impact on DIY/retail sales was more significant than anticipated. “In previous housing downturns, our DIY business picked up as people chose to improve their homes instead of building new,” Glenn said. “That hasn’t been the case this time. We believe that homeowners who took significant equity out of their homes, or whose home values declined due to market conditions, are putting off the larger projects — like room additions and new decks — that would positively impact our business.”

“We’ve been able to mitigate the impact of the retail market by growing market share with our big box customers,” he added, noting that sales to those customers increased 10% in the second quarter of 2007 despite a decline in lumber prices.

In manufactured housing, the Company maintains significant market share and its business should grow in relation to the return of the market. Despite a sequential improvement in orders in the latter part of the second quarter, that recovery remains uncertain. Current estimates call for 98,500 HUD-code homes to be shipped in 2007, down 16% from 2006, which was down nearly 20% from 2005 (although 2005 production was inflated by demand created in the wake of Hurricanes Katrina and Rita).

Universal continues to see opportunity for growth in the industrial market, in which the Company supplies specialty crates and packaging, and makes wood and wood-alternative components for a variety of products. The Company continues to add manufacturing and sales capacity to take advantage of the opportunities for growth in this highly fragmented market.

The Company also works persistently to identify new business opportunities and is encouraged by its recent foray into the concrete form business to supply wood forms, or molds, for the construction of structures made of concrete, such as bridges, highways, parking garages, and office buildings. “This business uses our existing equipment, facilities and expertise and is a great fit for Universal,” Glenn said. “There are no other truly national players in this approximately $1 billion market. It’s an exciting opportunity.”

In addition, the Company is focused on continuous improvement and lean manufacturing efforts to ensure customer satisfaction and efficient operations, and continues its practice of evaluating plants and business for possible consolidation and closure.

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Universal Forest Products, Inc.
Page 3

The Company is authorized to repurchase up to 1.4 million shares under its stock repurchase program and balances repurchase opportunities with its intent to remain well-positioned to take advantage of strategic acquisition opportunities that might arise.

OUTLOOK

The Company’s initial targets for 2007 were based, in part, on assumptions that haven’t materialized. Therefore, the Company is revising its targets to annual net sales of $2.375 billion to $2.425 billion and annual net earnings of $40.0 million to $42.0 million in 2007. This implies the following six-month targets for the remainder of 2007: net sales of $1.053 billion to $1.103 billion and net earnings of $19.3 million to $21.3 million. By comparison, net sales and net earnings (excluding certain non-recurring tax adjustments) were $1.172 billion and $23.5 million, respectively, for the last six months of 2006.

The revised targets are based on the following assumptions:

	•		Continued challenging conditions in the DIY, site-built construction, and manufactured housing markets. Housing starts will show little, if any, improvement for the remainder of 2007 and won’t begin a recovery until mid to late 2008; DIY/retail sales will continue to be adversely impacted by the reluctance of homeowners to undertake large home improvement projects.
	•		The Company will continue to achieve market share gains in the DIY/retail, industrial, and site-built markets;
	•		Plant consolidations or closures will be temporary in nature, resulting in no asset impairment charges;
	•		The lumber market will continue to be depressed for the balance of the year; and
	•		The Company will incur incentive compensation expense as a percentage of operating profits consistent with historical experience.

Universal Forest Products will conduct a conference call to discuss information included in this news release and related matters at 11:00 a.m. EST on Tuesday, July 17, 2007. The call will be hosted by Executive Chairman William G. Currie, President and CEO Michael B. Glenn, and CFO Michael Cole and will be available for analysts and institutional investors domestically at (800) 659-2056 or internationally at (617) 614-2714. Use conference pass code # 39337765. 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 Thursday, August 16, 2007 domestically at (888) 286-8010 or internationally at (617) 801-6888. Use replay pass code # 23924933.

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Universal Forest Products, Inc.
Page 4

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. The Company also provides framing services for the site-built sector. The Company reported sales of nearly $2.66 billion in 2006. Universal has approximately 10,000 employees who work out of approximately 100 locations in North America. For information about Universal Forest Products, please visit the Company’s Web site at http://www.ufpi.com, or call 888-Buy-UFPI.

Please be aware that: Any statements included in this call that are not historical are forward-looking statements within the meaning of 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. 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 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

Universal Forest Products, Inc.
Page 5

CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED)
FOR THE SIX MONTHS ENDED
JUNE 2007/2006

		Quarter Period																Year to Date
(In thousands, except per share data)		2007								2006								2007								2006
NET SALES		$	773,105				100	%		$	826,847				100	%		$	1,322,143				100	%		$	1,492,456				100	%
COST OF GOODS SOLD			671,400				86.84				706,429				85.44				1,146,918				86.75				1,277,727				85.61
GROSS PROFIT			101,705				13.16				120,418				14.56				175,225				13.25				214,729				14.39
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES			70,382				9.10				70,773				8.56				133,840				10.12				135,302				9.07
EARNINGS FROM OPERATIONS			31,323				4.05				49,645				6.00				41,385				3.13				79,427				5.32
OTHER EXPENSE (INCOME)
Interest expense			4,766				0.62				3,744				0.45				9,090				0.69				7,543				0.51
Interest income			(558	)			-0.07				(352	)			-0.04				(1,140	)			-0.09				(781	)			-0.05
Net (gain) loss on sale of real estate			(333	)			-0.04				(63	)			-0.01				(333	)			-0.03				(63	)			0.00
			3,875				0.50				3,329				0.40				7,617				0.58				6,699				0.45
EARNINGS BEFORE INCOME TAXES AND MINORITY INTEREST			27,448				3.55				46,316				5.60				33,768				2.55				72,728				4.87
INCOME TAXES			10,182				1.32				17,885				2.16				12,250				0.93				27,641				1.85
EARNINGS BEFORE MINORITY INTEREST			17,266				2.23				28,431				3.44				21,518				1.63				45,087				3.02
MINORITY INTEREST			(466	)			-0.06				(1,117	)			-0.14				(832	)			-0.06				(1,907	)			-0.13
NET EARNINGS		$	16,800				2.17			$	27,314				3.30			$	20,686				1.56			$	43,180				2.89
EARNINGS PER SHARE — BASIC		$	0.88							$	1.45							$	1.09							$	2.31
EARNINGS PER SHARE — DILUTED		$	0.86							$	1.41							$	1.06							$	2.23
WEIGHTED AVERAGE SHARES OUTSTANDING			19,127								18,851								19,056								18,729
WEIGHTED AVERAGE SHARES OUTSTANDING WITH COMMON STOCK EQUIVALENTS			19,487								19,432								19,448								19,355

SUPPLEMENTAL SALES DATA

		Quarter Period																Year to Date
Market Classification		2007				%				2006				%				2007				%				2006				%
Do-It-Yourself/Retail		$	360,881				46	%		$	354,838				42	%		$	557,017				42	%		$	571,304				38	%
Site-Built Construction			161,969				20	%			231,298				28	%			300,811				22	%			444,430				29	%
Industrial			162,442				21	%			151,638				18	%			295,894				22	%			291,592				19	%
Manufactured Housing			105,223				13	%			101,659				12	%			193,501				14	%			208,463				14	%
Total Gross Sales			790,515				100	%			839,433				100	%			1,347,223				100	%			1,515,789				100	%
Sales Allowances			(17,410	)							(12,586	)							(25,080	)							(23,333	)
Total Net Sales		$	773,105							$	826,847							$	1,322,143							$	1,492,456

UNIVERSAL FOREST PRODUCTS, INC.
PAGE 6

CONSOLIDATED BALANCE SHEETS (UNAUDITED)
JUNE 2007/2006

(In thousands)		2007				2006
ASSETS
CURRENT ASSETS
Cash and cash equivalents		$	42,697			$	43,309
Accounts receivable			233,067				242,829
Inventories			274,395				246,810
Other current assets			22,339				22,495
TOTAL CURRENT ASSETS			572,498				555,443
OTHER ASSETS			7,691				8,003
INTANGIBLE ASSETS, NET			189,694				147,901
PROPERTY, PLANT AND EQUIPMENT, NET			303,553				227,995
TOTAL ASSETS		$	1,073,436			$	939,342
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable		$	147,614			$	146,409
Accrued liabilities			82,432				101,115
Current portion of long-term debt and capital leases			3,611				902
TOTAL CURRENT LIABILITIES			233,657				248,426
LONG-TERM DEBT AND CAPITAL LEASES, less current portion			243,833				170,191
OTHER LIABILITIES			54,601				33,051
SHAREHOLDERS’ EQUITY			541,345				487,674
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY		$	1,073,436			$	939,342

UNIVERSAL FOREST PRODUCTS, INC.
PAGE 7

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
FOR THE SIX MONTHS ENDED
JUNE 2007/2006

(In thousands)		2007				2006
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings		$	20,686			$	43,180
Adjustments to reconcile net earnings to net cash from operating activities:
Depreciation			19,013				16,730
Amortization of intangibles			4,633				2,151
Expense associated with share-based compensation arrangements			258				522
Expense associated with stock grant plans			146				177
Deferred income taxes			(89	)			(867	)
Minority interest			832				1,907
Gain on sale of interest in subsidiary			(140	)			—
Loss (gain) on sale or impairment of property, plant and equipment			(131	)			(183	)
Changes in:
Accounts receivable			(72,549	)			(57,246	)
Inventories			(11,354	)			7,768
Accounts payable			54,581				39,426
Accrued liabilities and other			(159	)			8,237
Excess tax benefits from share-based compensation arrangements			(678	)			(3,866	)
NET CASH FROM OPERATING ACTIVITIES			15,049				57,936
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant, and equipment			(18,653	)			(16,234	)
Acquisitions, net of cash received			(56,209	)			(11,298	)
Proceeds from sale of interest in subsidiary			400				—
Proceeds from sale of property, plant and equipment			2,686				565
Advances on notes receivable			—				(2,473	)
Collection of notes receivable			137				1,600
Other, net			(16	)			38
NET CASH FROM INVESTING ACTIVITIES			(71,655	)			(27,802	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net (repayments) borrowings under revolving credit facilities			74,318				(40,000	)
Repayment of long-term debt			(25,417	)			(325	)
Proceeds from issuance of common stock			2,862				5,389
Distributions to minority shareholder			(825	)			(930	)
Dividends paid to shareholders			(1,047	)			(1,035	)
Repurchase of common stock			(2,106	)			—
Excess tax benefits from share-based compensation arrangements			679				3,866
Other, net			(269	)			(5	)
NET CASH FROM FINANCING ACTIVITIES			48,195				(33,040	)
NET CHANGE IN CASH AND CASH EQUIVALENTS			(8,411	)			(2,906	)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD			51,108				46,215
CASH AND CASH EQUIVALENTS, END OF PERIOD		$	42,697			$	43,309