UFPI First Quarter Net Earnings Up More Than 38%
—Sales flat as lumber market decline offsets 3% unit sales increase—
—Framing operations improved over 2013—
“We focused successfully on improving the performance of our framing
operations, and that was the primary driver of our increased
profitability in the first quarter,” said CEO
Missad noted that a “historically brutal winter” had a negative impact
on operations and businesses throughout
With home improvement and building projects delayed by weather, sales in the Company’s retail and construction businesses declined slightly year-over-year in the first quarter of 2014 while sales in its industrial business increased. The Company’s selling prices were affected by a five percent drop in the lumber market relative to the first quarter of 2013. Unit sales overall increased three percent. By market, the Company posted the following first-quarter 2014 gross sales results:
Retail:
The Company continues to experience positive results from its efforts to enhance its service, to enhance its product mix by adding new products and new product lines, and through other targeted strategies for growing its business with big box and independent retailers. The Company’s optimism in this market is fueled by healthy comparable sales guidance by big box retailers and for forecasts of continued growth in home improvement activities.
Industrial:
Industrial production in
Construction:
As noted earlier, framing operations that were underperforming in 2013
saw improvements in the first quarter of 2014, the result of a focused
effort on enhancing profitability in that market. This was the primary
reason for enhanced overall profitability in the first quarter of 2014.
Housing-related business markets—site-built (including multifamily and
single-family) and factory built—saw modest growth in the first quarter
of 2014 over the previous year and are expected to see continued growth
in 2014, according to industry forecasts. There was a healthy increase
in spending on nonresidential construction projects in
CONFERENCE CALL
This press release contains forward-looking statements within the
meaning of Section 21E of the Securities Exchange Act, as amended, that
are based on management’s beliefs, assumptions, current expectations,
estimates and projections about the markets we serve, the economy and
the Company itself. Words like “anticipates,” “believes,” “confident,”
“estimates,” “expects,” “forecasts,” “likely,” “plans,” “projects,”
“should,” variations of such words, and similar expressions identify
such forward-looking statements. These statements do not guarantee
future performance and involve certain risks, uncertainties and
assumptions that are difficult to predict with regard to timing, extent,
likelihood and degree of occurrence. The Company does not undertake to
update forward-looking statements to reflect facts, circumstances,
events, or assumptions 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 from
forward-looking statements are the following: fluctuations in the price
of lumber; adverse or unusual weather conditions; adverse economic
conditions in the markets we serve; government regulations, particularly
involving environmental and safety regulations; and our ability to make
successful business acquisitions. Certain of these risk factors as well
as other risk factors and additional information are included in the
Company's reports on Form 10-K and 10-Q on file with the
CONSOLIDATED STATEMENTS OF EARNINGS AND COMPREHENSIVE INCOME (UNAUDITED) | ||||||||||||||||||||||||||||||||
FOR THE THREE MONTHS ENDED | ||||||||||||||||||||||||||||||||
MARCH 2014/2013 | ||||||||||||||||||||||||||||||||
Quarter Period | Year to Date | |||||||||||||||||||||||||||||||
(In thousands, except per share data) | 2014 | 2013 | 2014 | 2013 | ||||||||||||||||||||||||||||
NET SALES | $ | 553,998 | 100 | % | $ | 554,494 | 100 | % | $ | 553,998 | 100 | % | $ | 554,494 | 100.0 | % | ||||||||||||||||
COST OF GOODS SOLD | 487,986 | 88.1 | 496,676 | 89.6 | 487,986 | 88.1 | 496,676 | 89.6 | ||||||||||||||||||||||||
GROSS PROFIT | 66,012 | 11.9 | 57,818 | 10.4 | 66,012 | 11.9 | 57,818 | 10.4 | ||||||||||||||||||||||||
SELLING, GENERAL AND | ||||||||||||||||||||||||||||||||
ADMINISTRATIVE EXPENSES | 53,908 | 9.7 | 48,228 | 8.7 | 53,908 | 9.7 | 48,228 | 8.7 | ||||||||||||||||||||||||
ANTI-DUMPING DUTY ASSESSMENTS | - | - | 639 | 0.1 | - | - | 639 | 0.1 | ||||||||||||||||||||||||
NET GAIN ON DISPOSITION OF ASSETS | (524 | ) | (0.1 | ) | (106 | ) | - | (524 | ) | (0.1 | ) | (106 | ) | - | ||||||||||||||||||
EARNINGS FROM OPERATIONS | 12,628 | 2.3 | 9,057 | 1.6 | 12,628 | 2.3 | 9,057 | 1.6 | ||||||||||||||||||||||||
OTHER EXPENSE, NET | 725 | 0.1 | 1,056 | 0.2 | 725 | 0.1 | 1,056 | 0.2 | ||||||||||||||||||||||||
EARNINGS BEFORE INCOME TAXES | 11,903 | 2.1 | 8,001 | 1.4 | 11,903 | 2.1 | 8,001 | 1.4 | ||||||||||||||||||||||||
INCOME TAXES | 4,235 | 0.8 | 2,245 | 0.4 | 4,235 | 0.8 | 2,245 | 0.4 | ||||||||||||||||||||||||
NET EARNINGS | 7,668 | 1.4 | 5,756 | 1.0 | 7,668 | 1.4 | 5,756 | 1.0 | ||||||||||||||||||||||||
LESS NET EARNINGS ATTRIBUTABLE TO | ||||||||||||||||||||||||||||||||
NONCONTROLLING INTEREST | (452 | ) | (0.1 | ) | (532 | ) | (0.1 | ) | (452 | ) | (0.1 | ) | (532 | ) | (0.1 | ) | ||||||||||||||||
NET EARNINGS ATTRIBUTABLE TO | ||||||||||||||||||||||||||||||||
CONTROLLING INTEREST | $ | 7,216 | 1.3 | $ | 5,224 | 0.9 | $ | 7,216 | 1.3 | $ | 5,224 | 0.9 | ||||||||||||||||||||
EARNINGS PER SHARE - BASIC | $ | 0.36 | $ | 0.26 | $ | 0.36 | $ | 0.26 | ||||||||||||||||||||||||
EARNINGS PER SHARE - DILUTED | $ | 0.36 | $ | 0.26 | $ | 0.36 | $ | 0.26 | ||||||||||||||||||||||||
COMPREHENSIVE INCOME | 6,968 | 6,171 | 6,968 | 6,171 | ||||||||||||||||||||||||||||
LESS COMPREHENSIVE INCOME ATTRIBUTABLE | ||||||||||||||||||||||||||||||||
TO NONCONTROLLING INTEREST | (354 | ) | (828 | ) | (354 | ) | (828 | ) | ||||||||||||||||||||||||
COMPREHENSIVE INCOME | ||||||||||||||||||||||||||||||||
ATTRIBUTABLE TO CONTROLLING INTEREST | $ | 6,614 | $ | 5,343 | $ | 6,614 | $ | 5,343 | ||||||||||||||||||||||||
SUPPLEMENTAL SALES DATA |
||||||||||||||||||||||||||||||||
Quarter Period | Year to Date | |||||||||||||||||||||||||||||||
Market Classification |
2014 | 2013 | % | 2014 | 2013 | % | ||||||||||||||||||||||||||
Retail | $ | 202,259 | $ | 206,062 | -2 | % | $ | 202,259 | $ | 206,062 | -2 | % | ||||||||||||||||||||
Industrial | 170,402 | 159,676 | 7 | % | 170,402 | 159,676 | 7 | % | ||||||||||||||||||||||||
Construction | 189,536 | 194,964 | -3 | % | 189,536 | 194,964 | -3 | % | ||||||||||||||||||||||||
Total Gross Sales | 562,197 | 560,702 | 0 | % | 562,197 | 560,702 | 0 | % | ||||||||||||||||||||||||
Sales Allowances | (8,199 | ) | (6,208 | ) | (8,199 | ) | (6,208 | ) | ||||||||||||||||||||||||
Total Net Sales | $ | 553,998 | $ | 554,494 | $ | 553,998 | $ | 554,494 |
CONSOLIDATED BALANCE SHEETS (UNAUDITED) | |||||||||||||||||||||
MARCH 2014/2013 | |||||||||||||||||||||
(In thousands) | |||||||||||||||||||||
ASSETS | 2014 | 2013 | LIABILITIES AND EQUITY | 2014 | 2013 | ||||||||||||||||
CURRENT ASSETS | CURRENT LIABILITIES | ||||||||||||||||||||
Cash and cash equivalents | $ | - | $ | - | Cash overdraft | $ | 12,151 | $ | 7,665 | ||||||||||||
Restricted cash | 720 | 653 | Accounts payable | 91,015 | 93,597 | ||||||||||||||||
Accounts receivable | 242,433 | 232,954 | Accrued liabilities | 57,054 | 52,566 | ||||||||||||||||
Inventories | 312,010 | 290,752 | |||||||||||||||||||
Other current assets | 27,189 | 25,716 | |||||||||||||||||||
TOTAL CURRENT ASSETS | 582,352 | 550,075 | TOTAL CURRENT LIABILITIES | 160,220 | 153,828 | ||||||||||||||||
OTHER ASSETS | 13,064 | 17,589 | LONG-TERM DEBT AND | ||||||||||||||||||
INTANGIBLE ASSETS, NET | 169,949 | 171,203 | CAPITAL LEASE OBLIGATIONS, | ||||||||||||||||||
PROPERTY, PLANT | less current portion | 143,471 | 155,181 | ||||||||||||||||||
AND EQUIPMENT, NET | 241,419 | 228,083 | OTHER LIABILITIES | 42,671 | 42,284 | ||||||||||||||||
EQUITY | 660,422 | 615,657 | |||||||||||||||||||
TOTAL ASSETS | $ | 1,006,784 | $ | 966,950 | TOTAL LIABILITIES AND EQUITY | $ | 1,006,784 | $ | 966,950 |
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) | |||||||||||
FOR THE THREE MONTHS ENDED | |||||||||||
MARCH 2014/2013 | |||||||||||
(In thousands) | 2014 | 2013 | |||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||||||
Net earnings | $ | 7,668 | $ | 5,756 | |||||||
Adjustments to reconcile net earnings attributable to controlling interest | |||||||||||
to net cash from operating activities: | |||||||||||
Depreciation | 7,691 | 7,140 | |||||||||
Amortization of intangibles | 586 | 604 | |||||||||
Expense associated with share-based compensation arrangements | 495 | 642 | |||||||||
Expense associated with stock grant plans | 29 | 19 | |||||||||
Deferred income taxes (credit) | (150 | ) | 36 | ||||||||
Equity in earnings of investee | (51 | ) | (42 | ) | |||||||
Net gain on sale of property, plant and equipment | (602 | ) | (127 | ) | |||||||
Changes in: | |||||||||||
Accounts receivable | (61,825 | ) | (70,715 | ) | |||||||
Inventories | (23,980 | ) | (47,305 | ) | |||||||
Accounts payable | 18,150 | 27,417 | |||||||||
Accrued liabilities and other | (2,743 | ) | 12,001 | ||||||||
NET CASH FROM OPERATING ACTIVITIES | (54,732 | ) | (64,574 | ) | |||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||||||
Purchases of property, plant, and equipment | (8,994 | ) | (8,085 | ) | |||||||
Proceeds from sale of property, plant and equipment | 785 | 251 | |||||||||
Acquisitions, net of cash received | (4,191 | ) | (8,600 | ) | |||||||
Advances of notes receivable | (2,462 | ) | (383 | ) | |||||||
Collections of notes receivable and related interest | 473 | 543 | |||||||||
Cash restricted as to use | - | 6,178 | |||||||||
Other, net | (36 | ) | 6 | ||||||||
NET CASH FROM INVESTING ACTIVITIES | (14,425 | ) | (10,090 | ) | |||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||||||
Net borrowings under revolving credit facilities | 58,771 | 59,391 | |||||||||
Debt issuance costs | (8 | ) | (6 | ) | |||||||
Proceeds from issuance of common stock | 99 | 80 | |||||||||
Distributions to noncontrolling interest | (701 | ) | (330 | ) | |||||||
NET CASH FROM FINANCING ACTIVITIES | 58,161 | 59,135 | |||||||||
Effect of exchange rate changes on cash | (76 | ) | 217 | ||||||||
NET CHANGE IN CASH AND CASH EQUIVALENTS | (11,072 | ) | (15,312 | ) | |||||||
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | (1,079 | ) | 7,647 | ||||||||
CASH (CASH OVERDRAFT), END OF PERIOD | $ | (12,151 | ) | $ | (7,665 | ) | |||||
SUPPLEMENTAL INFORMATION: | |||||||||||
Interest paid | $ | 281 | $ | 417 | |||||||
Income taxes paid (refunded) | 1,681 | (6,199 | ) |
Source:
Universal Forest Products, Inc.
Lynn Afendoulis
Director,
Corporate Communications
(616) 365-1502