×

UFPI posts record third quarter results

GRAND RAPIDS, Mich., Oct. 17, 2017 (GLOBE NEWSWIRE) -- Universal Forest Products, Inc. (Nasdaq:UFPI) today reported record financial results for the third quarter ended September 30, 2017.

The Company’s net sales rose 28 percent over the same quarter of 2016, led by double-digit gains in each of its markets. Net earnings rose 21 percent over 2016. Both results beat the records set in the third quarter of 2016.

“These results underscore the strength of our balanced business model, which allows us to withstand adversity in one market or region and still grow sales and profitability,” said CEO Matt Missad. “Hurricanes Harvey, Irma and Maria created difficult conditions for some of our employees and operations in Texas, Florida and Puerto Rico and contributed to more lumber market volatility in September, impacting margins. Despite these challenges, our business performed exceptionally well, and I want to thank the hard working employees of the companies of Universal for their efforts. We feel confident in our ability to continue to execute our strategic initiatives and deliver strong results.”

Third Quarter 2017 Highlights (comparisons on a year-over-year basis):

  • Net earnings attributable to controlling interest were $33.7 million, up 21 percent
  • Diluted earnings per share were $1.64, an increase of 21 percent
  • Net sales of $1,056.6 million represent a 28 percent increase
  • Unit sales accounted for 22 percent of the Company’s gross sales growth (this includes 15 percent from acquired businesses); price increases, primarily due to the commodity lumber market, accounted for 6 percent
  • New product sales of $107.7 million increased by 21.7 percent and represented 10.2 percent of total Company net sales. The Company has introduced 35 new products in 2017 to date, including 12 during the third quarter.

By market, the Company reported the following third-quarter 2017 gross sales results:

Retail

$391.9 million, up 16 percent over the same period of 2016

The 16 percent increase in sales to the Retail market is the result of a 7 percent increase from acquisitions, a 5 percent increase from organic growth and a 4 percent increase in prices.

The Company benefited from a sales increase of 20 percent and 13 percent to independent and big box retailers, respectively, in the third quarter when compared to the same period of 2016.

Construction

$310.0 million, up 16 percent over the same period of 2016

The 16 percent increase in Construction sales was due to an 8 percent increase in unit sales and an 8 percent increase in prices. The increase in unit sales was led by a 12 percent increase to manufactured housing builders and an 8 percent increase to residential builders.

Industrial

$369.5 million, up 59 percent over the same period of 2016

The Company’s growth in this market is primarily due to its September 2016 acquisition of idX Corp. Excluding acquisitions, the Company grew sales in this market by 16 percent in the third quarter: 11 percent through organic growth and 5 percent through price increases. The organic growth was primarily the result of new customer acquisitions and share gains with existing customers.

CONFERENCE CALL

Universal Forest Products will conduct a conference call to discuss information included in this news release and related matters at 8:30 a.m. ET on Wednesday, October 18, 2017. The call will be hosted by CEO Matthew J. Missad and CFO Michael Cole, and will be available for analysts and institutional investors domestically at (866) 518-4547 and internationally at (213) 660-0879. Use conference ID 81854743. 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 November 17, 2017, at the following numbers: (855) 859-2056 or (404) 537-3406.

UNIVERSAL FOREST PRODUCTS, INC.

Universal Forest Products, Inc. is a holding company whose subsidiaries supply wood, wood composite and other products to three robust markets: retail, construction and industrial. Founded in 1955, the Company is headquartered in Grand Rapids, Mich., with affiliates throughout North America, Europe, Asia and Australia. For more about Universal Forest Products, go to www.ufpi.com.

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 Securities and Exchange Commission.


CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS AND COMPREHENSIVE INCOME (UNAUDITED)
FOR THE NINE MONTHS ENDED
SEPTEMBER 2017/2016
Quarter Period Year to Date
(In thousands, except per share data) 2017 2016 2017 2016
NET SALES $ 1,056,586 100% $ 826,665 100% $ 2,975,091 100% $ 2,380,909 100.0%
COST OF GOODS SOLD 911,899 86.3 708,611 85.7 2,561,424 86.1 2,028,629 85.2
GROSS PROFIT 144,687 13.7 118,054 14.3 413,667 13.9 352,280 14.8
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES 92,416 8.7 74,502 9.0 273,676 9.2 223,153 9.4
EARNINGS FROM OPERATIONS 52,271 4.9 43,552 5.3 139,991 4.7 129,127 5.4
OTHER EXPENSE, NET 1,352 0.1 927 0.1 4,259 0.1 2,602 0.1
EARNINGS BEFORE INCOME TAXES 50,919 4.8 42,625 5.2 135,732 4.6 126,525 5.3
INCOME TAXES 16,250 1.5 13,861 1.7 44,855 1.5 43,268 1.8
NET EARNINGS 34,669 3.3 28,764 3.5 90,877 3.1 83,257 3.5
LESS NET EARNINGS ATTRIBUTABLE TO
NONCONTROLLING INTEREST (976) (0.1) (945) (0.1) (2,480) (0.1) (2,828) (0.1)
NET EARNINGS ATTRIBUTABLE TO
CONTROLLING INTEREST $ 33,693 3.2 $ 27,819 3.4 $ 88,397 3.0 $ 80,429 3.4
EARNINGS PER SHARE - BASIC $ 1.65 $ 1.36 $ 4.32 $ 3.95
EARNINGS PER SHARE - DILUTED $ 1.64 $ 1.36 $ 4.31 $ 3.94
COMPREHENSIVE INCOME 36,388 27,608 97,018 81,736
LESS COMPREHENSIVE INCOME ATTRIBUTABLE
TO NONCONTROLLING INTEREST (975) (495) (3,862) (1,576)
COMPREHENSIVE INCOME
ATTRIBUTABLE TO CONTROLLING INTEREST $ 35,413 $ 27,113 $ 93,156 $ 80,160
SUPPLEMENTAL SALES DATA
Quarter Period Year to Date
Market Classification 2017 2016 % 2017 2016 %
Retail $ 391,895 $ 339,275 16% $ 1,162,785 $ 1,018,203 14%
Industrial 369,506 232,017 59% 982,675 661,718 49%
Construction 310,026 267,772 16% 872,997 740,393 18%
Total Gross Sales 1,071,427 839,064 28% 3,018,457 2,420,314 25%
Sales Allowances (14,841) (12,399) -20% (43,366) (39,405) -10%
Total Net Sales $ 1,056,586 $ 826,665 28% $ 2,975,091 $ 2,380,909 25%

CONSOLIDATED CONDENSED BALANCE SHEETS (UNAUDITED)
SEPTEMBER 2017/2016
(In thousands)
ASSETS 2017 2016 LIABILITIES AND EQUITY 2017 2016
CURRENT ASSETS CURRENT LIABILITIES
Cash and cash equivalents $ 22,044 $ 36,683 Cash overdraft $ 26,617 $ 13,940
Restricted cash 905 909 Accounts payable 171,774 137,979
Investments 10,781 10,453 Accrued liabilities 138,364 156,653
Accounts receivable 419,183 343,771 Current portion of debt 2,197 1,584
Inventories 412,486 369,928
Other current assets 23,201 29,043
TOTAL CURRENT ASSETS 888,600 790,787 TOTAL CURRENT LIABILITIES 338,952 310,156
OTHER ASSETS 17,515 11,173 LONG-TERM DEBT AND
INTANGIBLE ASSETS, NET 255,330 224,186 CAPITAL LEASE OBLIGATIONS 145,884 110,362
PROPERTY, PLANT OTHER LIABILITIES 51,638 43,029
AND EQUIPMENT, NET 325,109 284,491 EQUITY 950,080 847,090
TOTAL ASSETS $ 1,486,554 $ 1,310,637 TOTAL LIABILITIES AND EQUITY $ 1,486,554 $ 1,310,637

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)
FOR THE NINE MONTHS ENDED
SEPTEMBER 2017/2016
(In thousands) 2017 2016
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings $ 90,877 $ 83,257
Adjustments to reconcile net earnings to net cash from operating activities:
Depreciation 36,010 29,014
Amortization of intangibles 3,549 1,868
Expense associated with share-based compensation arrangements 1,978 1,568
Expense associated with stock grant plans 144 105
Deferred income taxes (credit) 117 (53)
Equity in earnings of investee (25) (241)
Net gain on disposition and impairment of assets (437) 94
Changes in:
Accounts receivable (121,688) (69,357)
Inventories (820) 21,683
Accounts payable and cash overdraft 53,424 35,026
Accrued liabilities and other 34,221 33,413
NET CASH FROM OPERATING ACTIVITIES 97,350 136,377
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant, and equipment (57,189) (35,723)
Proceeds from sale of property, plant and equipment 2,121 516
Acquisitions and purchase of noncontrolling interest, net of cash received (59,859) (66,615)
Repayments of debt of acquiree - (92,830)
Purchase of remaining noncontrolling interest of subsidiary - (1,100)
Cash contributed from noncontrolling interest 464 -
Advances of notes receivable (234) (5,400)
Collections of notes receivable and related interest 1,334 5,819
Purchases of investments (15,928) (4,468)
Proceeds from sale of investments 8,000 1,395
Other (84) (1,733)
NET CASH USED IN INVESTING ACTIVITIES (121,375) (200,139)
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings under revolving credit facilities 610,038 52,479
Repayments under revolving credit facilities (573,829) (27,177)
Proceeds from issuance of common stock 476 396
Distributions to noncontrolling interest (3,272) (3,160)
Dividends paid to shareholders (9,207) (8,529)
Repurchase of common stock (12,976) -
Other - (28)
NET CASH FROM (USED IN) FINANCING ACTIVITIES 11,230 13,981
Effect of exchange rate changes on cash 1,255 (969)
NET CHANGE IN CASH AND CASH EQUIVALENTS (11,540) (50,750)
ALL CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 34,489 88,342
ALL CASH AND CASH EQUIVALENTS, END OF PERIOD $ 22,949 $ 37,592
Reconciliation of cash and cash equivalents and restricted cash:
Cash and cash equivalents, beginning of period $ 34,091 $ 87,756
Restricted cash, beginning of period 398 586
All cash and cash equivalents, beginning of period $ 34,489 $ 88,342
Cash and cash equivalents, end of period $ 22,044 $ 36,683
Restricted cash, end of period 905 909
All cash and cash equivalents, end of period $ 22,949 $ 37,592

Lynn Afendoulis
Director, Corporate Communications
(616) 365-1502

Source:Universal Forest Products, Inc.