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UFPI posts record first-quarter earnings and sales

/EIN News/ -- GRAND RAPIDS, Mich., April 18, 2017 (GLOBE NEWSWIRE) -- Universal Forest Products, Inc. (Nasdaq:UFPI) today reported financial results for the first quarter ended April 1, 2017.

“The employees of Universal delivered record first-quarter sales and profits, underscoring the success of our balanced business model and targeted approach to growing our business,” said CEO Matthew J. Missad. “Those records are even more impressive if you consider we did not have the same purchasing and weather advantages we enjoyed during the first quarter of 2016.”

The Company’s retail and construction markets had net sales increases of 15 and 21 percent, respectively. The industrial market grew 37 percent, largely because of the September 2016 acquisition of idX Corp.

“While we are pleased with these results, we see opportunities to do much more. We’re focused on a number of opportunities to grow sales and create efficiencies among our recent acquisitions that we expect will benefit us in 2017 and beyond.”

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

  • Net earnings attributable to controlling interest were $21.1 million, up 10 percent
  • Diluted earnings per share were $1.03, up from $0.95
  • Net sales of $846.1 million represent a 24 percent increase over net sales of $682.2 million
  • Unit sales contributed to 17 percent of gross sales growth; higher lumber prices contributed 6 percent
  • New product sales were $74.6 million, up from $64.7 million 

The Company’s earnings growth fell short of its unit sales growth in the first quarter of 2017 due to a number of common business factors that impacted several operations. They include the loss in 2017 of inventory cost advantages that the Company realized the previous year in the industrial market, inclement weather in many areas of the country and the cost of start-up operations.

By market, the Company posted the following first quarter 2017 gross sales results:

Retail

$311.8 million, up 15 percent over the same period of 2016

Sales to the retail market grew 15 percent due to a 6 percent increase in selling prices and a 9 percent increase in unit sales, led by a 19 percent increase in sales to big box customers. Net of acquisitions, unit sales grew 2 percent.

Construction

$267.8 million, up 21 percent over the same period of 2016

Unit sales to the construction market rose 13 percent in the first quarter, led by gains of 16 percent to residential construction customers and 14 percent to manufactured housing customers.  The Company remains focused on growing business selectively in areas where housing markets are the most stable.

Industrial

$277.2 million, up 37 percent over the same period of 2016

The Company’s growth in this market is primarily due to its acquisition of idX Corp., which closed in September of 2016. Excluding acquisitions, the Company grew unit sales in this market by 4 percent in the first quarter over the first quarter of 2016. The growth was generated both by adding new customers and by increasing the number of affiliates that serve large 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, April 19, 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 (888) 685-5759 and internationally at (503) 343-6031. Use conference ID 83487335. 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 May 19, 2017, at any of the following numbers: (855) 859-2056, (404) 537-3406 or (800) 585-5367.

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 THREE MONTHS ENDED
MARCH 2017/2016
    Quarter Period       Year to Date    
(In thousands, except per share data)     2017           2016           2017           2016      
                                 
                                 
                                 
NET SALES   $ 846,130     100 %   $ 682,151     100 %   $ 846,130     100 %   $ 682,151     100.0 %
                                 
COST OF GOODS SOLD      725,390     85.7       579,412     84.9       725,390     85.7       579,412     84.9  
                                 
GROSS PROFIT     120,740     14.3       102,739     15.1       120,740     14.3       102,739     15.1  
                                 
SELLING,  GENERAL  AND                                 
  ADMINISTRATIVE  EXPENSES     86,919     10.3       70,828     10.4       86,919     10.3       70,828     10.4  
                                 
EARNINGS FROM OPERATIONS     33,821     4.0       31,911     4.7       33,821     4.0       31,911     4.7  
                                 
OTHER EXPENSE, NET     1,417     0.2       891     0.1       1,417     0.2       891     0.1  
                                 
EARNINGS BEFORE INCOME TAXES     32,404     3.8       31,020     4.5       32,404     3.8       31,020     4.5  
                                 
INCOME TAXES     10,770     1.3       10,765     1.6       10,770     1.3       10,765     1.6  
                                 
NET EARNINGS     21,634     2.6       20,255     3.0       21,634     2.6       20,255     3.0  
                                 
LESS NET EARNINGS ATTRIBUTABLE TO                                
  NONCONTROLLING INTEREST      (572 )   (0.1 )     (1,043 )   (0.2 )     (572 )   (0.1 )     (1,043 )   (0.2 )
                                 
NET EARNINGS ATTRIBUTABLE TO                                
  CONTROLLING INTEREST   $ 21,062     2.5     $ 19,212     2.8     $ 21,062     2.5     $ 19,212     2.8  
                                 
                                 
EARNINGS PER SHARE - BASIC    $ 1.03         $ 0.95         $ 1.03         $ 0.95      
                                 
EARNINGS PER SHARE - DILUTED   $ 1.03         $ 0.95         $ 1.03         $ 0.95      
                                 
COMPREHENSIVE INCOME     24,669           20,697           24,669           20,697      
                                 
LESS COMPREHENSIVE INCOME ATTRIBUTABLE                                
  TO NONCONTROLLING INTEREST     (1,427 )         (846 )         (1,427 )         (846 )    
                                 
COMPREHENSIVE INCOME                                
  ATTRIBUTABLE TO CONTROLLING INTEREST   $ 23,242         $ 19,851         $ 23,242         $ 19,851      
                                 
SUPPLEMENTAL SALES DATA                                
    Quarter Period   Year to Date
Market Classification     2017           2016     %     2017           2016     %
Retail   $ 311,750         $ 271,258     15 %   $ 311,750         $ 271,258     15 %
Industrial     277,242           201,649     37 %     277,242           201,649     37 %
Construction     267,817           220,957     21 %     267,817           220,957     21 %
Total Gross Sales     856,809           693,864     23 %     856,809           693,864     23 %
Sales Allowances     (10,679 )         (11,713 )   9 %     (10,679 )         (11,713 )   9 %
Total Net Sales   $ 846,130         $ 682,151     24 %   $ 846,130         $ 682,151     24 %
                                 
                                 

 

CONSOLIDATED CONDENSED BALANCE SHEETS (UNAUDITED)
MARCH 2017/2016
                           
(In thousands)                        
ASSETS     2017     2016   LIABILITIES AND EQUITY     2017     2016
                           
CURRENT ASSETS           CURRENT LIABILITIES        
  Cash and cash equivalents   $ 31,020   $ 43,065     Cash overdraft   $ 21,566   $ -
  Restricted cash & cash equivalents     4,709     1,139     Accounts payable     156,030     116,525
  Investments     5,928     6,737     Accrued liabilities     97,965     97,910
  Accounts receivable     365,620     287,374     Current portion of debt     2,280     886
  Inventories     472,016     327,177                
  Other current assets     23,820     16,889                
                           
TOTAL CURRENT ASSETS     903,113     682,381   TOTAL CURRENT LIABILITIES     277,841     215,321
                           
OTHER ASSETS     14,533     10,424   LONG-TERM DEBT AND        
INTANGIBLE ASSETS, NET     250,160     198,338     CAPITAL LEASE OBLIGATIONS     252,904     84,525
PROPERTY, PLANT           OTHER LIABILITIES     49,561     51,003
  AND EQUIPMENT,  NET     309,853     254,634   EQUITY     897,353     794,928
                           
                           
TOTAL ASSETS   $ 1,477,659   $ 1,145,777   TOTAL LIABILITIES AND EQUITY   $ 1,477,659   $ 1,145,777
                           
                           
                           

 

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)
FOR THE THREE MONTHS ENDED
MARCH 2017/2016
(In thousands)       2017         2016  
CASH FLOWS FROM OPERATING ACTIVITIES:          
Net earnings     $ 21,634       $ 20,255  
Adjustments to reconcile net earnings to net cash from operating activities:          
             
Depreciation       11,392         9,492  
Amortization of intangibles       1,119         693  
Expense associated with share-based compensation arrangements     571         432  
Expense associated with stock grant plans       46         37  
Deferred income taxes (credit)       224         (156 )
Equity in earnings of investee       (5 )       (81 )
Net gain on disposition and impairment of assets     (64 )       (10 )
Changes in:            
Accounts receivable       (67,766 )       (64,276 )
Inventories       (60,984 )       (22,159 )
Accounts payable and cash overdraft       32,769         21,498  
Accrued liabilities and other       (9,676 )       4,318  
NET CASH FROM OPERATING ACTIVITIES     (70,740 )       (29,957 )
             
CASH FLOWS FROM INVESTING ACTIVITIES:          
Purchases of property, plant, and equipment       (16,531 )       (12,941 )
Proceeds from sale of property, plant and equipment     353         132  
Acquisitions and purchase of noncontrolling interest, net of cash received     (55,441 )       -  
Cash contributed from noncontrolling interest       464         -  
Advances of notes receivable       (228 )       (1,259 )
Collections of notes receivable and related interest     721         1,408  
Purchases of investments       (819 )       -  
Proceeds from sale of investments       1,204         -  
Other       (322 )       (173 )
NET CASH USED IN INVESTING ACTIVITIES     (70,599 )       (12,833 )
             
CASH FLOWS FROM FINANCING ACTIVITIES:          
Borrowings under revolving credit facilities       281,090         1,235  
Repayments under revolving credit facilities       (137,767 )       (1,495 )
Proceeds from issuance of common stock       146         130  
Distributions to noncontrolling interest       (1,673 )       (1,170 )
Repurchase of common stock       (83 )       -  
Other       (16 )       (5 )
NET CASH FROM (USED IN) FINANCING ACTIVITIES     141,697         (1,305 )
             
Effect of exchange rate changes on cash       882         (43 )
NET CHANGE IN CASH AND CASH EQUIVALENTS     1,240         (44,138 )
             
ALL CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD     34,489         88,342  
             
ALL CASH AND CASH EQUIVALENTS, END OF PERIOD   $ 35,729       $ 44,204  
             
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     $ 31,020       $ 43,065  
Restricted cash, end of period       4,709         1,139  
All cash and cash equivalents, end of period     $ 35,729       $ 44,204  
             
             


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

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