Universal Forest Products® Inc. Meets Earnings Target Reporting $0.25 Per Share
GRAND RAPIDS, Mich., April 24 /PRNewswire/ -- Universal Forest Products® (Nasdaq: UFPI) today announced results for the first quarter of 2001, including net earnings of $5.0 million or $0.25 per share (diluted). Earnings were in line with company targets for the quarter of $0.23 to $0.25 per share (diluted). Net sales for the quarter of $284.6 million, were below the company's target of $300 million to $315 million.
"Although our earnings were in line with our target for the quarter, they could have been better," said William G. Currie, UFPI's chief executive officer. "Extremely difficult weather over much of the country negatively impacted sales and overall earnings for the quarter. Weakness in both lumber prices and the manufactured housing market continued to affect our performance, but were anticipated in our forecast."
Given normal weather conditions, the company believes they would have exceeded both earnings and sales targets for the quarter. While there has been a dramatic up-trend in the lumber market over the last several weeks, lumber prices for the first quarter averaged 25% behind the first quarter of 2000. Significant unit sales increases in three of the markets Universal serves were not enough to offset the effect of lower lumber prices during the quarter.
"The manufactured housing industry continues to be adversely effected by excess inventories, increased repossessions, and tight credit conditions. Industry statistics show shipments of manufactured homes were down over 40% for January and February 2001. We have been redirecting our sales efforts and manufacturing capacity to our other three markets since early last year. The results of these efforts is demonstrated by an increase in unit sales," concluded Currie.
ACQUISITIONS
The company closed on three previously announced acquisitions:
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D&R Framing Contactors - The company acquired 50% of the assets of D&R Framing Contractors of Englewood, Colorado on February 28, 2001.
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Thorndale Roof Systems Inc. and Edcor Floor Systems Inc. - On March 2, 2001, the company acquired the remaining 50% of the stock of ECJW Holdings, Inc. and its two subsidiaries, Thorndale Roof Systems Inc. and Edcor Floor Systems Inc. The company acquired the initial 50% in April 2000.
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Sunbelt Wood Components - On April 3, 2001, the company acquired certain assets of KEVCO's Sunbelt Wood Components Division. The assets include manufacturing facilities in North Carolina, Alabama, Georgia, and Arizona, which serve the manufactured housing market.
All acquisitions are expected to be immediately accretive, and are in line with management's growth objectives.
OUTLOOK
The company noted evidence of a dramatic turnaround in lumber prices. After reaching 8-year lows, the market began an up-trend in the first quarter of 2001. If this trend continues, prices will soon reach levels equal to the second quarter of 2000, positively impacting sales. A significant improvement in the manufactured housing industry is not expected until the end of 2001. The company does expect to continue its growth in the Do-It-Yourself (D-I-Y), site-built construction, and industrial/agricultural markets through the end of the year. With these factors, and current economic conditions in mind, management has set targets for the second quarter of 2001, including sales ranging from $460 million to $490 million, and earnings between $0.63 to $0.67 per share (diluted). The company continues to target sales and earnings per share growth from 7% to 10% on an annual basis. Possible new business acquisitions are not included in the company's forecast.
Universal Forest Products will conduct a conference call to discuss information included in this news release and related matters at 11 a.m. EDT on Tuesday, April 24, 2001. The conference call will be hosted by William G. Currie and will be available for analysts and institutional investors domestically at 800-553-2239 or internationally at 303-224-6998, use conference call ID #1006390. 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 .
Universal Forest Products® 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 contact the company's investor relations 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.
CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED)
FOR THE THREE MONTHS ENDED
MARCH 2001/2000
Quarter Period
(In thousands, except per share data) 2001 2000
NET SALES $284,638 100% $304,072 100%
COST OF GOODS SOLD 241,519 84.85 263,661 86.71
GROSS PROFIT 43,119 15.15 40,411 13.29
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES 32,273 11.34 27,318 8.98
EARNINGS FROM OPERATIONS 10,846 3.81 13,093 4.31
INTEREST EXPENSE 3,199 1.12 3,168 1.04
INTEREST REVENUE (72) -0.03 (86) -0.03
3,127 1.09 3,082 1.01
EARNINGS BEFORE INCOME TAXES,
MINORITY INTEREST AND EQUITY
IN EARNINGS (LOSS) OF INVESTEE 7,719 2.72 10,011 3.30
INCOME TAXES 2,856 1.00 3,953 1.30
EARNINGS BEFORE MINORITY
INTEREST AND EQUITY IN
EARNINGS OF INVESTEE 4,863 1.72 6,058 2.00
MINORITY INTEREST (67) -0.02 (23) -0.01
EQUITY IN EARNINGS
OF INVESTEE 181 0.05 46 0.01
NET EARNINGS $4,977 1.75 $6,081 2.00
EARNINGS PER SHARE - BASIC $0.25 $0.30
EARNINGS PER SHARE - DILUTED $0.25 $0.30
WEIGHTED AVERAGE SHARES
OUTSTANDING 19,714 20,135
WEIGHTED AVERAGE SHARES
OUTSTANDING WITH COMMON
STOCK EQUIVALENTS 20,243 20,524
SUPPLEMENTAL SALES DATA
Quarter Period
Market Classification 2001 % 2000 %
Do-It-Yourself $127,704 45% $134,280 44%
Manufactured Housing 50,835 18% 78,182 26%
Site-Built Construction 62,198 22% 48,615 16%
Industrial and Other 43,901 15% 42,995 14%
Total $284,638 100% $304,072 100%
Year to Date
(In thousands, except per share data) 2001 2000
NET SALES $284,638 100% $304,072 100%
COST OF GOODS SOLD 241,519 84.85 263,661 86.71
GROSS PROFIT 43,119 15.15 40,411 13.29
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES 32,273 11.34 27,318 8.98
EARNINGS FROM OPERATIONS 10,846 3.81 13,093 4.31
INTEREST EXPENSE 3,199 1.12 3,168 1.04
INTEREST REVENUE (72) -0.03 (86) -0.03
3,127 1.09 3,082 1.01
EARNINGS BEFORE INCOME TAXES,
MINORITY INTEREST AND EQUITY
IN EARNINGS (LOSS) OF INVESTEE 7,719 2.72 10,011 3.30
INCOME TAXES 2,856 1.00 3,953 1.30
EARNINGS BEFORE MINORITY
INTEREST AND EQUITY IN
EARNINGS OF INVESTEE 4,863 1.72 6,058 2.00
MINORITY INTEREST (67) -0.02 (23) -0.01
EQUITY IN EARNINGS
OF INVESTEE 181 0.05 46 0.01
NET EARNINGS $4,977 1.75 $6,081 2.00
EARNINGS PER SHARE - BASIC $0.25 $0.30
EARNINGS PER SHARE - DILUTED $0.25 $0.30
WEIGHTED AVERAGE SHARES
OUTSTANDING 19,714 20,135
WEIGHTED AVERAGE SHARES
OUTSTANDING WITH COMMON
STOCK EQUIVALENTS 20,243 20,524
SUPPLEMENTAL SALES DATA
Year to Date
Market Classification 2001 % 2000 %
Do-It-Yourself $127,704 45% $134,280 44%
Manufactured Housing 50,835 18% 78,182 26%
Site-Built Construction 62,198 22% 48,615 16%
Industrial and Other 43,901 15% 42,995 14%
Total $284,638 100% $304,072 100%
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
MARCH 2001/2000
(In thousands)
LIABILITIES
AND
SHAREHOLDERS'
ASSETS 2001 2000 EQUITY 2001 2000
CURRENT ASSETS CURRENT LIABILITIES
Cash and cash Notes
equivalents $5,273 $2,405 payable $795 $1,428
Restricted
cash
equivalents 1,281 - Accounts payable and
Accounts accrued
receivable 105,338 107,051 liabilities 89,798 96,127
Inventories 148,187 159,629 Current portion
Other debt and of long-term
current capital
assets 8,852 7,231 leases 18,260 7,277
TOTAL CURRENT TOTAL CURRENT
ASSETS 268,931 276,316 LIABILITIES 108,853 104,832
OTHER ASSETS 11,758 10,988 LONG-TERM DEBT AND CAPITAL
LEASES, less
GOODWILL AND current
NON-COMPETE 113,671 92,424 portion 197,336 191,702
OTHER
LIABILITIES 18,458 16,662
PROPERTY,
PLANT AND
EQUIPMENT, SHAREHOLDERS'
NET 170,752 152,432 EQUITY 240,465 218,964
TOTAL LIABILITIES AND
SHAREHOLDERS'
TOTAL ASSETS $565,112 $532,160 EQUITY $565,112 $532,160
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
FOR THE THREE MONTHS ENDED
MARCH 2001/2000
(In thousands) 2001 2000
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings $4,977 $6,081
Adjustments to reconcile net earnings
to net cash
from operating activities:
Depreciation 4,577 3,830
Amortization of non-compete
agreements and goodwill 1,045 791
(Gain) loss on sale of
property, plant and equipment - (88)
Changes in:
Accounts receivable (37,032) (37,040)
Inventories (23,587) (28,095)
Accounts payable 22,600 22,737
Accrued liabilities and other (7,198) (5,089)
NET CASH FROM OPERATING
ACTIVITIES (34,618) (36,873)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant, and
equipment (7,781) (7,271)
Acquisitions, net of cash received (10,498) -
Proceeds from sale of property, plant
and equipment 481 209
Other (391) (261)
NET CASH FROM INVESTING
ACTIVITIES (18,189) (7,323)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net borrowings (repayments) under
revolving credit facility and
notes payable 58,759 42,908
Proceeds from issuance of long-term
debt - 1,949
Repayment of long-term debt (2,864) (379)
Proceeds from issuance of common
stock 48 65
Repurchase of common stock (255) (2,048)
NET CASH FROM FINANCING
ACTIVITIES 55,688 42,495
NET CHANGE IN CASH AND CASH
EQUIVALENTS 2,881 (1,701)
CASH AND CASH EQUIVALENTS, BEGINNING
OF YEAR 2,392 4,106
CASH AND CASH EQUIVALENTS, END OF
PERIOD $5,273 $2,405
SOURCE Universal Forest Products® , Inc.
CONTACT: Charles R. Felix, Sr. V.P. Development and Investor Relations, 616-364-6161, or Michael R. Cole, Chief Financial Officer, 616-364-6161, both of Universal Forest Products® , Inc.; Matthew Della Croce, Vice President, 212-453-2316, or Pat McCoy, Managing Supervisor, 212-453-2272, both of Fleishman Hillard