Universal Forest Products® , Inc. Exceeds Targets for Second Quarter
Reports Record Earnings
Universal Forest Products(R), Inc. (Nasdaq: UFPI) today announced second quarter net earnings of $14.2 million, an increase of 10.2% over the same quarter a year ago. Earnings per share (diluted) increased 11.1% to $0.70, compared with $0.63 for the second quarter of 2000, and exceeded the Company's target of $0.63 to $0.67 per share (diluted) for the quarter. Net sales for the quarter of $486.3 million were 12.7% higher than last year's second quarter net sales of $431.6 million, and met the Company's target of $460 million to $490 million.For the first six months of 2001, net earnings were $19.2 million or $0.95 per share (diluted) compared to $19.0 million or $0.93 per share (diluted) last year. Net sales for the first six months of 2001 were $771.0 million, or 4.8% higher than net sales of $735.6 million last year.
"We would be pleased with these results in any economy, but in the context of a slowing economy that saw many businesses report decreased sales, the strength of Universal's strategies and products is evident," said William G. Currie, UFPI's vice-chairman and chief executive officer. "Our success this quarter was due in part to strong unit sales growth to our do-it-yourself (D- I-Y) and site-built markets, benefits from strategic acquisitions, and our employees, whose hard work and dedication helped us realize strong results."
Currie noted that sales to the D-I-Y and site-built markets were up 18.0% and 30.1%, respectively, for the quarter. The Company's strength in manufactured housing was underscored by its performance during a difficult quarter. The manufactured housing industry experienced a decline in shipments of approximately 30%, however, Universal's sales to that market were down only 11%. While lumber prices temporarily increased in May, they had little impact on the Company's reported sales for the second quarter.
Outlook
The Company expects to continue its unit sales growth to the D-I-Y, site- built, and industrial/agricultural markets for the balance of the year. While management doesn't expect the slowdown in the manufactured housing market to improve in the next six months, the Company's leadership position will enable it to increase sales to that market when demand returns. With these factors, and current economic conditions in mind, management has set the following targets for the third quarter of 2001:
* Sales ranging from $420 million to $440 million. * Earnings from $0.45 to $0.48 per share (diluted).The Company continues to target sales and earnings per share growth of 7% to 10% for the year.
Universal Forest Products will conduct a conference call to discuss information in this news release and related matters at 11:00 a.m. EDT on Tuesday, July 24, 2001. The conference call will be hosted by William G. Currie and will be available for analysts and institutional investors domestically at 800-482-2239 or internationally at 303-224-6998. Use conference call ID #1111404. 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(R) 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 go to the Company's 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.
FINANCIAL HIGHLIGHTS TO FOLLOW
CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED)
FOR THE SIX MONTHS ENDED
JUNE 2001/2000
Quarter Period
(In thousands, except per share data) 2001 2000
NET SALES $486,348 100% $431,578 100%
COST OF GOODS SOLD 419,951 86.35 374,280 86.72
GROSS PROFIT 66,397 13.65 57,298 13.28
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES 38,869 7.99 32,045 7.43
EARNINGS FROM OPERATIONS 27,528 5.66 25,253 5.85
INTEREST EXPENSE 3,539 0.73 3,607 0.84
INTEREST REVENUE (245) -0.05 (160) -0.04
3,294 0.68 3,447 0.80
EARNINGS BEFORE INCOME TAXES,
MINORITY INTEREST AND EQUITY
IN EARNINGS (LOSS) OF INVESTEE 24,234 4.98 21,806 5.05
INCOME TAXES 9,179 1.89 8,563 1.98
EARNINGS BEFORE MINORITY
INTEREST AND EQUITY IN
EARNINGS OF INVESTEE 15,055 3.09 13,243 3.07
MINORITY INTEREST (794) -0.16 (307) -0.07
EQUITY IN EARNINGS
OF INVESTEE (23) -0.01 (19) -0.01
NET EARNINGS $14,238 2.92 $12,917 2.99
EARNINGS PER SHARE - BASIC $0.72 $0.64
EARNINGS PER SHARE - DILUTED $0.70 $0.63
WEIGHTED AVERAGE SHARES
OUTSTANDING 19,792 20,144
WEIGHTED AVERAGE SHARES
OUTSTANDING WITH COMMON
STOCK EQUIVALENTS 20,388 20,501
SUPPLEMENTAL SALES DATA
Quarter Period
Market Classification 2001 % 2000 %
Do-It-Yourself $272,407 56% $230,899 53%
Manufactured Housing 74,907 15% 84,413 20%
Site-Built Construction 81,963 17% 62,987 15%
Industrial and Other 57,071 12% 53,279 12%
Total $486,348 100% $431,578 100%
Year to Date
(In thousands, except per share data) 2001 2000
NET SALES $770,986 100% $735,650 100%
COST OF GOODS SOLD 661,470 85.80 637,941 86.72
GROSS PROFIT 109,516 14.20 97,709 13.28
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES 71,142 9.22 59,363 8.07
EARNINGS FROM OPERATIONS 38,374 4.98 38,346 5.21
INTEREST EXPENSE 6,738 0.87 6,775 0.92
INTEREST REVENUE (317) -0.04 (246) -0.03
6,421 0.83 6,529 0.89
EARNINGS BEFORE INCOME TAXES,
MINORITY INTEREST AND EQUITY
IN EARNINGS (LOSS) OF INVESTEE 31,953 4.15 31,817 4.32
INCOME TAXES 12,035 1.56 12,516 1.70
EARNINGS BEFORE MINORITY
INTEREST AND EQUITY IN
EARNINGS OF INVESTEE 19,918 2.59 19,301 2.62
MINORITY INTEREST (861) -0.11 (330) -0.04
EQUITY IN EARNINGS
OF INVESTEE 158 0.01 27 0.00
NET EARNINGS $19,215 2.49 $18,998 2.58
EARNINGS PER SHARE - BASIC $0.97 $0.94
EARNINGS PER SHARE - DILUTED $0.95 $0.93
WEIGHTED AVERAGE SHARES
OUTSTANDING 19,753 20,140
WEIGHTED AVERAGE SHARES
OUTSTANDING WITH COMMON
STOCK EQUIVALENTS 20,315 20,513
SUPPLEMENTAL SALES DATA
Year to Date
Market Classification 2001 % 2000 %
Do-It-Yourself $400,483 52% $365,612 50%
Manufactured Housing 124,568 16% 160,510 22%
Site-Built Construction 143,817 19% 111,890 15%
Industrial and Other 102,118 13% 97,638 13%
Total $770,986 100% $735,650 100%
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
JUNE 2001/2000
(In thousands)
ASSETS 2001 2000 LIABILITIES AND
SHAREHOLDERS'
EQUITY 2001 2000
CURRENT
ASSETS CURRENT LIABILITIES
Cash and cash
equivalents $8,490 $2,748 Notes payable $1,020 $2,278
Restricted cash
equivalents 723 - Accounts payable and
Accounts accrued
receivable 140,698 119,044 liabilities 119,875 107,811
Inventories 148,069 145,768 Current portion
Other current of long-term debt
assets 8,210 7,005 and capital
leases 21,360 7,058
TOTAL CURRENT TOTAL CURRENT
ASSETS 306,190 274,565 LIABILITIES 142,255 117,147
OTHER ASSETS 11,698 11,304 LONG-TERM DEBT AND CAPITAL
LEASES, less
GOODWILL AND current
NON-COMPETE 114,903 107,372 portion 197,197 191,619
OTHER
LIABILITIES 18,862 18,072
PROPERTY,
PLANT AND
EQUIPMENT, SHAREHOLDERS'
NET 179,581 164,990 EQUITY 254,058 231,393
TOTAL LIABILITIES AND
TOTAL ASSETS $612,372 $558,231 SHAREHOLDERS'
EQUITY $612,372 $558,231
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
FOR THE SIX MONTHS ENDED
JUNE 2001/2000
(In thousands) 2001 2000
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings $19,215 $18,998
Adjustments to reconcile net earnings
to net cash
from operating activities:
Depreciation 9,498 7,862
Amortization of non-compete
agreements and goodwill 2,180 1,639
Loss on sale of property, plant
and equipment 38 5
Changes in:
Accounts receivable (68,218) (40,083)
Inventories (21,951) (9,577)
Accounts payable 36,701 23,647
Accrued liabilities and other 9,909 3,209
NET CASH FROM OPERATING
ACTIVITIES (12,628) 5,700
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant, and
equipment (17,924) (15,623)
Acquisitions, net of cash received (21,559) (32,386)
Proceeds from sale of property, plant
and equipment 399 440
Other 512 (520)
NET CASH FROM INVESTING
ACTIVITIES (38,572) (48,089)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net borrowings under
revolving credit facilities and
notes payable 67,600 48,774
Proceeds from issuance of long-term
debt - 1,937
Repayment of long-term debt (9,038) (7,181)
Proceeds from issuance of common
stock 783 379
Dividends paid to shareholders (792) (808)
Repurchase of common stock (1,255) (2,070)
NET CASH FROM FINANCING
ACTIVITIES 57,298 41,031
NET CHANGE IN CASH AND CASH
EQUIVALENTS 6,098 (1,358)
CASH AND CASH EQUIVALENTS, BEGINNING
OF YEAR 2,392 4,106
CASH AND CASH EQUIVALENTS, END OF
PERIOD $8,490 $2,748
SOURCE Universal Forest Products(R), Inc.
CONTACT:
Michael R. Cole, Chief Financial Officer of Universal Forest
Products(R), Inc., +1-616-364-6161; or James Ankner, Vice
President of Fleishman Hillard, +1-212-453-2198