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UFPI Reports Q3 Record Results: Net Earnings of $27.8 Million; Net Sales of $826.7 Million

Year-to-date profits up 30 percent over 2015

/EIN News/ -- GRAND RAPIDS, Mich., Oct. 18, 2016 (GLOBE NEWSWIRE) -- Universal Forest Products, Inc. (Nasdaq:UFPI) today announced recording-breaking 2016 third-quarter results, including net earnings attributable to controlling interests of $27.8 million, an increase of 8.9 percent over the same period of 2015. Year-to-date net earnings attributable to controlling interests were $80.4 million, up 30 percent over 2015. Earnings per diluted share were $1.36 in the third quarter of 2016, up from $1.26 in the third quarter of 2015. Net sales of $826.7 million – also a record for the third quarter – were up 8.4 percent over the same period of 2015.

“The employees of Universal are working hard to top the records they achieved during the last half of 2015, and we are pleased once again to report record results and growth,” said CEO Matthew J. Missad. “We grew sales significantly in two key markets and continue to increase our sales of new products.” Year-to-date new product sales were $247.9 million, a 16 percent increase over the $213.3 million reported for the same period of last year.

“We are continuing to make investments in our business and people to promote and enhance our continued success,” Missad noted. “We have added staff and are investing in their training to support our growth. We also are investing in several significant initiatives, including new international and e-commerce groups, and a research and design center, all of which we believe will contribute to our success in 2017 and beyond.”

Missad added that the Company continues to look for strategic acquisitions. Its purchase of idX Corp. closed near the end of the third quarter. idX is an international provider of highly customized merchandising solutions. Based in St. Louis, Mo., it has a network of more than 20 facilities across North America, Europe and Asia. Its sales in 2015 were approximately $303 million.

By market, the Company posted the following net sales results:

Retail: $339.7 million, up 15 percent over the third quarter of 2015

The Company benefited from a 9 percent increase in unit sales as well as rising lumber prices. Year-to-date retail unit sales are up 10 percent.  During the third quarter, sales to big-box retailers increased 20 percent and sales to other retailers increased 8 percent, in part because of market-share gains and increasing sales of new products. Our retail customers have benefited from improving U.S. consumer demand, as evidenced by the healthy gains in same-store sales they reported in their most recent quarters. 

Construction: $265.6 million, up 10 percent over the same period of 2015

Overall, unit sales in the construction market were up 6 percent over the same period of 2015, led by strong unit sales gains of 9 percent in residential construction. According to the U.S. Census Bureau, housing starts increased approximately 2.4 percent from June through August 2016 compared to the same period of 2015. The Company continues to focus its residential construction efforts in geographic areas of anticipated stable growth and recently added capacity in these markets.

Industrial: $233.8 million, down 1 percent from the third quarter of 2015

The Company has maintained its share of the industrial market but experienced a modest decrease in sales because of the softening U.S. economy, a decrease in U.S. exports, and its efforts to be more selective by focusing on higher-margin, value-added business.

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 19, 2016. 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 (888) 685-5759 and internationally at (503) 343-6031. Use conference ID 68009457. 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 19, 2016, at any of the following numbers: (855) 859-2056 or (404) 537-3406 or (800) 585-8367.

UNIVERSAL FOREST PRODUCTS, INC.

Universal Forest Products, Inc. is a holding company that provides capital, management and administrative resources to subsidiaries in 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 2016/2015  
    Quarter Period       Year to Date      
(In thousands, except per share data)   2016       2015       2016       2015      
                                   
                                   
                                   
NET SALES   $ 826,665       100 %   $ 762,275       100 %   $ 2,380,909       100 %   $ 2,233,470       100.0 %  
                                   
COST OF GOODS SOLD      708,611       85.7       651,569       85.5       2,028,629       85.2       1,930,739       86.4    
                                   
GROSS PROFIT     118,054       14.3       110,706       14.5       352,280       14.8       302,731       13.6    
                                   
SELLING,  GENERAL  AND                                   
  ADMINISTRATIVE  EXPENSES     74,457       9.0       67,951       8.9       223,059       9.4       198,087       8.9    
NET (GAIN) LOSS ON DISPOSITION AND                                  
  IMPAIRMENT OF ASSETS     45       -       230       -       94       -       68       -    
                                   
EARNINGS FROM OPERATIONS     43,552       5.3       42,525       5.6       129,127       5.4       104,576       4.7    
                                   
OTHER EXPENSE, NET     927       0.1       924       0.1       2,602       0.1       3,118       0.1    
                                   
EARNINGS BEFORE INCOME TAXES     42,625       5.2       41,601       5.5       126,525       5.3       101,458       4.5    
                                   
INCOME TAXES     13,861       1.7       14,718       1.9       43,268       1.8       36,887       1.7    
                                   
NET EARNINGS     28,764       3.5       26,883       3.5       83,257       3.5       64,571       2.9    
                                   
LESS NET EARNINGS ATTRIBUTABLE TO                                  
  NONCONTROLLING INTEREST      (945 )     (0.1 )     (1,327 )     (0.2 )     (2,828 )     (0.1 )     (2,876 )     (0.1 )  
                                   
NET EARNINGS ATTRIBUTABLE TO                                  
  CONTROLLING INTEREST   $ 27,819       3.4     $ 25,556       3.4     $ 80,429       3.4     $ 61,695       2.8    
                                   
                                   
EARNINGS PER SHARE - BASIC    $ 1.36         $ 1.26         $ 3.95         $ 3.06        
                                   
EARNINGS PER SHARE - DILUTED   $ 1.36         $ 1.26         $ 3.94         $ 3.06        
                                   
COMPREHENSIVE INCOME     27,608           24,305           81,736           60,365        
                                   
LESS COMPREHENSIVE INCOME ATTRIBUTABLE                                  
  TO NONCONTROLLING INTEREST     (495 )         (445 )         (1,576 )         (1,578 )      
                                   
COMPREHENSIVE INCOME                                  
  ATTRIBUTABLE TO CONTROLLING INTEREST   $ 27,113         $ 23,860         $ 80,160         $ 58,787        
                                   
SUPPLEMENTAL SALES DATA                                  
    Quarter Period   Year to Date  
Market Classification   2016
      2015
  %   2016
      2015
  %  
Retail   $ 339,744         $ 296,022       15 %   $ 1,017,225         $ 905,826       12 %  
Industrial     233,757           235,376       -1 %     669,389           683,763       -2 %  
Construction     265,563           241,810       10 %     733,700           676,228       8 %  
Total Gross Sales     839,064           773,208       9 %     2,420,314           2,265,817       7 %  
Sales Allowances     (12,399 )         (10,933 )         (39,405 )         (32,347 )      
Total Net Sales   $ 826,665         $ 762,275         $ 2,380,909         $ 2,233,470        
                                   
                                   

 

CONSOLIDATED CONDENSED BALANCE SHEETS (UNAUDITED)  
SEPTEMBER 2016/2015  
                               
(In thousands)                          
ASSETS  
2016
 
2015
  LIABILITIES AND EQUITY  
2016
 
2015
 
                               
CURRENT ASSETS           CURRENT LIABILITIES          
  Cash and cash equivalents   $ 36,683     $ 55,373       Cash overdraft   $ 13,940     $ -    
  Restricted cash     909       1,139       Accounts payable     137,979       101,117    
  Investments     10,453       5,955       Accrued liabilities     156,653       112,350    
  Accounts receivable     343,771       273,737       Current portion of debt     1,584       834    
  Inventories     369,928       288,209                    
  Other current assets     29,043       23,112                    
                               
TOTAL CURRENT ASSETS     790,787       647,525     TOTAL CURRENT LIABILITIES     310,156       214,301    
                               
OTHER ASSETS     11,173       8,934     LONG-TERM DEBT AND          
INTANGIBLE ASSETS, NET     224,186       200,929       CAPITAL LEASE OBLIGATIONS     110,362       84,722    
PROPERTY, PLANT           OTHER LIABILITIES     43,029       56,757    
  AND EQUIPMENT,  NET     284,491       254,530     EQUITY     847,090       756,138    
                               
                               
TOTAL ASSETS   $ 1,310,637     $ 1,111,918     TOTAL LIABILITIES AND EQUITY   $ 1,310,637     $ 1,111,918    
                               
                               

 

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)  
FOR THE NINE MONTHS ENDED  
SEPTEMBER 2016/2015  
(In thousands)  
2016
 
2015
 
CASH FLOWS FROM OPERATING ACTIVITIES:          
Net earnings   $ 83,257     $ 64,571    
Adjustments to reconcile net earnings to net cash from operating activities:          
           
Depreciation     29,014       28,013    
Amortization of intangibles     1,868       2,730    
Expense associated with share-based compensation arrangements     1,568       1,351    
Excess tax benefits from share-based compensation arrangements     -       (33 )  
Expense associated with stock grant plans     105       85    
Deferred income tax     (53 )     (269 )  
Equity in earnings of investee     (241 )     (283 )  
Net loss on disposition and impairment of assets     94       68    
Changes in:          
Accounts receivable     (69,357 )     (76,723 )  
Inventories     21,683       51,068    
Accounts payable and cash overdraft     35,026       10,864    
Accrued liabilities and other     33,413       39,967    
  NET CASH FROM OPERATING ACTIVITIES     136,377       121,409    
           
CASH FLOWS FROM INVESTING ACTIVITIES:          
Purchases of property, plant, and equipment     (35,723 )     (36,520 )  
Proceeds from sale of property, plant and equipment     516       2,382    
Acquisitions, net of cash received     (66,615 )     (2,584 )  
Repayments of debt of acquiree     (92,830 )     -    
Purchases of noncontrolling interest     (1,100 )     (1,256 )  
Advances of notes receivable     (5,400 )     (4,403 )  
Collections of notes receivable and related interest     5,819       8,784    
Purchases of investments     (4,468 )     (5,955 )  
Proceeds from sale of investments     1,395       -    
Cash restricted as to use     (323 )     (734 )  
Other, net     (1,733 )     180    
  NET CASH USED IN INVESTING ACTIVITIES     (200,462 )     (40,106 )  
           
CASH FLOWS FROM FINANCING ACTIVITIES:          
Borrowings under revolving credit facilities     52,479       297,354    
Repayments under revolving credit facilities     (27,177 )     (311,253 )  
Proceeds from issuance of common stock     396       960    
Distributions to noncontrolling interest     (3,160 )     (3,159 )  
Dividends paid to shareholders     (8,529 )     (8,050 )  
Repurchase of common stock     -       (800 )  
Other, net     (28 )     22    
NET CASH FROM (USED IN) FINANCING ACTIVITIES     13,981       (24,926 )  
           
Effect of exchange rate changes on cash     (969 )     (1,004 )  
NET CHANGE IN CASH AND CASH EQUIVALENTS     (51,073 )     55,373    
           
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD     87,756       -    
           
CASH AND CASH EQUIVALENTS, END OF PERIOD   $ 36,683     $ 55,373    
           
           
AT THE COMPANY
Lynn Afendoulis
Director, Corporate Communications
(616) 365-1502

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