Universal Forest Products Announces Record Third Quarter 2003 Results
- Third quarter sales rose 18.4 percent; EPS increased 13.8 percent to $0.66 per diluted share
- Company increases annual sales target and reaffirms year-end EPS target
GRAND RAPIDS, Mich., Oct. 13 /PRNewswire-FirstCall/-- Citing the strengths of the markets it serves, Universal Forest Products, Inc. (Nasdaq: UFPI) today announced record results for the third quarter and the first nine months of the year. The company also reaffirmed its EPS target and increased its sales target for the year.
Net sales for the quarter were $536.3 million, an increase of 18.4% over net sales of $453.0 million in the third quarter of 2002. Net sales for the first nine months of 2003 were $1.44 billion, an 11.1% increase over net sales of $1.30 billion for the same period of 2002.
Diluted earnings per share for the quarter totaled $0.66; representing a 13.8% increase over reported results for the third quarter of 2002. Year-to- date diluted earnings per share were $1.85, an 8.2% increase over reported results for the same period of 2002.
"It was a strong quarter with solid performance from our whole team," said Universal CEO and Vice Chairman William G. Currie. "We are growing our share in all of our four markets, strengthening our balance sheet, meeting customer expectations, and adding shareholder value."
Following are Universal's third-quarter 2003 sales by market:
* $262.0 million in D-I-Y/retail, up 21.9% from the same period last year;
* $111.5 million in site-built construction, an increase of 25.7% over last year;
* $79.3 million in manufactured housing, a 0.4% decrease compared to last year - despite a 21% drop in industry shipments for the quarter; and
* $83.4 million in industrial/other, a 19.7% increase over the same period last year.
The company reaffirmed its diluted earnings per share growth target of 7% to 10% for the year. However, due primarily to upward momentum in the lumber market in the third quarter, the company increased its target for annual sales growth to 10% to 12% (up from the previous target of 7% to 10%).
Universal Forest Products will conduct a conference call to discuss information included in this news release and additional matters at 11:00 a.m. EDT on Tuesday, October 14, 2002. The conference call will be hosted by William G. Currie and will be available for analysts and institutional investors domestically at (877) 679-9049, internationally at (952) 556-2803. Use conference call ID #286962. The conference call will be available simultaneously, and in its entirety, to all interested investors and news media through a web cast at www.ufpi.com . Click on Investor Relations.
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 NINE MONTHS ENDED
SEPTEMBER 2003/2002
Quarter Period
(In thousands, except per share data) 2003 2002
NET SALES $536,278 100% $452,959 100%
COST OF GOODS SOLD 463,715 86.47 391,294 86.39
GROSS PROFIT 72,563 13.53 61,665 13.61
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES 48,424 9.03 41,148 9.08
EARNINGS FROM OPERATIONS 24,139 4.50 20,517 4.53
INTEREST EXPENSE 3,526 0.66 2,542 0.56
INTEREST REVENUE (2) 0.00 (31) -0.01
GAIN ON SALE OF ASSETS - 0.00 - 0.00
3,524 0.66 2,511 0.55
EARNINGS BEFORE INCOME TAXES
AND MINORITY INTEREST 20,615 3.84 18,006 3.98
INCOME TAXES 7,715 1.44 6,678 1.47
EARNINGS BEFORE MINORITY INTEREST 12,900 2.41 11,328 2.50
MINORITY INTEREST (695) -0.13 (684) -0.15
NET EARNINGS $12,205 2.28 $10,644 2.35
EARNINGS PER SHARE - BASIC $0.69 $0.60
EARNINGS PER SHARE - DILUTED $0.66 $0.58
WEIGHTED AVERAGE SHARES
OUTSTANDING 17,765 17,845
WEIGHTED AVERAGE SHARES
OUTSTANDING WITH COMMON
STOCK EQUIVALENTS 18,425 18,427
CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED)
FOR THE NINE MONTHS ENDED
SEPTEMBER 2003/2002
Year to Date
(In thousands, except per share
data) 2003 2002
NET SALES $1,444,360 100% $1,299,559 100%
COST OF GOODS SOLD 1,241,251 85.94 1,117,994 86.03
GROSS PROFIT 203,109 14.06 181,565 13.97
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES 135,309 9.37 120,291 9.26
EARNINGS FROM OPERATIONS 67,800 4.69 61,274 4.71
INTEREST EXPENSE 11,271 0.78 8,497 0.65
INTEREST REVENUE (133) -0.01 (196) -0.02
GAIN ON SALE OF ASSETS - 0.00 (1,082) -0.08
11,138 0.77 7,219 0.56
EARNINGS BEFORE INCOME TAXES
AND MINORITY INTEREST 56,662 3.92 54,055 4.16
INCOME TAXES 20,964 1.45 20,051 1.54
EARNINGS BEFORE MINORITY INTEREST 35,698 2.47 34,004 2.62
MINORITY INTEREST (1,831) -0.13 (1,924) -0.15
NET EARNINGS $33,867 2.34 $32,080 2.47
EARNINGS PER SHARE - BASIC $1.91 $1.78
EARNINGS PER SHARE - DILUTED $1.85 $1.71
WEIGHTED AVERAGE SHARES
OUTSTANDING 17,745 17,980
WEIGHTED AVERAGE SHARES
OUTSTANDING WITH COMMON
STOCK EQUIVALENTS 18,290 18,719
SUPPLEMENTAL SALES DATA
Quarter Period
Market Classification 2003 % 2002 %
Do-It-Yourself/Retail $262,025 48% $214,975 47%
Site-Built Construction 111,541 21% 88,731 20%
Manufactured Housing 79,306 15% 79,588 18%
Industrial and Other 83,406 16% 69,665 15%
Total $536,278 100% $452,959 100%
SUPPLEMENTAL SALES DATA
Year to Date
Market Classification 2003 % 2002 %
Do-It-Yourself/Retail $721,659 50% $626,394 48%
Site-Built Construction 289,686 20% 245,717 19%
Manufactured Housing 206,880 14% 227,990 18%
Industrial and Other 226,135 16% 199,458 15%
Total $1,444,360 100% $1,299,559 100%
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
SEPTEMBER 2003/2002
(In thousands)
ASSETS 2003 2002 LIABILITIES AND
SHAREHOLDERS'
EQUITY 2003 2002
CURRENT ASSETS CURRENT LIABILITIES
Cash and cash Notes
equivalents $10,747 $12,800 payable $645 $1,494
Accounts
receivable 157,768 149,962 Accounts payable
Inventories 160,955 128,841 and accrued
liabilities 154,140 126,902
Other
current assets 5,847 3,279 Current portion of
long-term debt and
capital
leases 6,263 18,645
TOTAL CURRENT
ASSETS 335,317 294,882
TOTAL CURRENT
LIABILITIES 161,048 147,041
OTHER ASSETS 5,679 6,311
INTANGIBLE
ASSETS 131,545 125,097 LONG-TERM DEBT AND CAPITAL
LEASES, less current
portion 195,833 185,091
PROPERTY, OTHER
PLANT AND LIABILITIES 31,123 24,092
EQUIPMENT, NET 214,337 191,349
SHAREHOLDERS'
EQUITY 298,874 261,415
TOTAL LIABILITIES AND
TOTAL ASSETS $686,878 617,639 SHAREHOLDERS'
EQUITY $686,878 $617,639
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
FOR THE NINE MONTHS ENDED
SEPTEMBER 2003/2002
(In thousands) 2003 2002
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings $33,867 $32,080
Adjustments to reconcile net earnings
to net cash from operating activities:
Depreciation 18,702 17,235
Amortization of intangibles 1,519 851
Deferred income taxes (1,301) (246)
(Gain) Loss on sale or
impairment of property, plant
and equipment 918 (152)
Changes in:
Accounts receivable (78,688) (61,235)
Inventories 5,051 (6,020)
Accounts payable 37,717 28,076
Accrued liabilities and other 24,463 11,353
NET CASH FROM OPERATING
ACTIVITIES 42,248 21,942
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant, and
equipment (33,349) (21,136)
Purchases of licensing agreements (150) (2,000)
Acquisitions, net of cash received (787) (2,519)
Proceeds from sale of property, plant
and equipment 6,104 3,310
Other 3,059 430
NET CASH FROM INVESTING
ACTIVITIES (25,123) (21,915)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net (repayments) borrowings under
revolving credit facilities and
notes payable (36,884) 37,004
Repayment of long-term debt (6,150) (8,205)
Proceeds from issuance of common
stock 1,719 769
Proceeds from sale and servicing of
accounts receivable 25,143 -
Distributions to minority shareholder (833) (660)
Dividends paid to shareholders (798) (806)
Repurchase of common stock (2,029) (38,216)
NET CASH FROM FINANCING
ACTIVITIES (19,832) (10,114)
NET CHANGE IN CASH AND CASH
EQUIVALENTS (2,707) (10,087)
CASH AND CASH EQUIVALENTS, BEGINNING
OF PERIOD 13,454 22,887
CASH AND CASH EQUIVALENTS, END OF
PERIOD $10,747 $12,800
SOURCE Universal Forest Products, Inc.
CONTACT: Lynn Afendoulis, Director, Public Affairs of Universal Forest Products, Inc., +1-616-364-6161