Sales gains led by industrial; strong gains
also in retail and commercial construction/concrete forming
Universal Forest Products, Inc. (Nasdaq: UFPI) today reported
net earnings of $26.0 million for the second quarter of 2015, up
19.2 percent over net earnings of $21.8 million for the same period
of 2014. Second-quarter 2015 diluted earnings per share were $1.28,
compared to diluted earnings per share of $1.08 for the second
quarter of 2014. Net sales of $838.2 million in the second quarter
of 2015 represent an increase of 8.5 percent over net sales of
$772.8 for the same period of 2014.
Overall unit sales were up 10 percent over 2014, led by a 16.9
percent increase in sales to industrial customers. The Company saw
strong sales to retail customers, with an increase of 8.3 percent
over the same period last year. Average lumber prices declined nine
percent since the first quarter of 2015 and, year-over-year for the
second quarter of 2015 were down 12.6 percent, adversely impacting
the Company’s selling prices.
“We were pleased with our improvement in gross and operating
margins as we continue to enhance and diversify our product
offering, allowing us to grow our capabilities and our value to our
customers,” said CEO Matthew J. Missad. “These factors, and others,
helped us overcome a decline in lumber prices, which hurt our
profit margins on treated lumber and other similarly priced
products. But our people did an excellent job managing through this
challenge.”
“These results highlight the strength of our business model,
which allows us to withstand adversity in one business market as
well as adverse trends in the lumber market and still grow sales
and profitability,” Missad added. “They also highlight the strength
of our growth strategies, including our focus on sales to the
industrial market and on new product development.”
New product sales in the quarter were up more than 22 percent
over the second quarter of 2014. By market, the Company posted the
following gross sales results:
Retail: $376.2 million, up 8.3 percent over the second
quarter of 2014The Company’s performance in this market
benefited from pent-up demand in the busy building season following
challenging winter weather, success with new product sales, and
growth with independent and big box retailers, the latter of which
saw healthy increases in comparable store sales in their most
recently reported quarters. The Company anticipates healthy demand
through the building season, barring adverse weather conditions and
other unforeseen events.
Industrial: $240.0 million, up 16.9 percent over the second
quarter of 2014This follows a first-quarter year-over-year
increase of 23 percent, and is indicative of the ongoing
opportunity in this market, in which the company sells packaging,
material handling and related products for industrial and
agricultural customers. The Company’s growth strategies in this
market include both wood and alternative materials solutions as
well as packaging solutions for existing and new customers.
Construction: $234.6 million, up 1.3 percent over the same
period of 2014The Company saw a 15 percent unit sales increase
in its commercial construction and concrete forming business, and
unit sales increases of 2 and 3 percent, respectively, in
manufactured housing and residential construction. The Company
notes that recent mergers and acquisitions in this market are in
line with its expectations, and could serve to rationalize
capacity.
CONFERENCE CALLUniversal 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 Thursday, July 16,
2015. 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 (800) 295-4740 and internationally at
(617) 614-3925. Use conference pass code 28727901. 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
August 16, 2015, domestically at (888) 286-8010 and internationally
at (617) 801-6888. Use replay pass code 84538911.
UNIVERSAL FOREST PRODUCTS, INC.Universal Forest Products,
Inc. is a holding company with subsidiaries throughout North
America and in Australia that supply wood, wood composite and other
products to three robust markets: retail,
construction and industrial. The Company is
headquartered in Grand Rapids, Mich., and is celebrating its 60th
year in business. For more information about Universal Forest
Products, Inc., or its affiliated operations, 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 SIX MONTHS
ENDED JUNE 2015/2014 Quarter Period
Year to Date (In thousands, except per
share data) 2015 2014
2015
2014
NET SALES $ 838,171 100 % $ 772,752 100
% $ 1,471,195 100 % $ 1,326,751 100.0 %
COST OF GOODS
SOLD 725,728 86.6 675,764 87.4
1,279,170 86.9 1,163,750 87.7
GROSS PROFIT 112,443 13.4 96,988 12.6 192,025 13.1 163,001
12.3
SELLING, GENERAL AND ADMINISTRATIVE
EXPENSES 68,431 8.2 58,989 7.6 130,136 8.8 112,899 8.5
ANTI-DUMPING DUTY ASSESSMENTS - - 1,600 0.2 - - 1,600 0.1
NET (GAIN) LOSS ON DISPOSITION AND IMPAIRMENT OF
ASSETS (176 ) - (324 ) - (162 ) -
(848 ) (0.1 )
EARNINGS FROM OPERATIONS 44,188 5.3
36,723 4.8 62,051 4.2 49,350 3.7
OTHER EXPENSE, NET
1,238 0.1 686 0.1 2,193
0.1 1,411 0.1
EARNINGS BEFORE INCOME
TAXES 42,950 5.1 36,037 4.7 59,858 4.1 47,939 3.6
INCOME TAXES 16,066 1.9 13,588
1.8 22,170 1.5 17,824 1.3
NET
EARNINGS 26,884 3.2 22,449 2.9 37,688 2.6 30,115 2.3
LESS NET EARNINGS ATTRIBUTABLE TO NONCONTROLLING
INTEREST (908 ) (0.1 ) (660 ) (0.1 )
(1,550 ) (0.1 ) (1,111 ) (0.1 )
NET EARNINGS
ATTRIBUTABLE TO CONTROLLING INTEREST $ 25,976 3.1
$ 21,789 2.8 $ 36,138 2.5 $ 29,004 2.2
EARNINGS PER SHARE - BASIC $ 1.29 $ 1.08 $ 1.79 $
1.44
EARNINGS PER SHARE - DILUTED $ 1.28 $ 1.08 $
1.79 $ 1.44
COMPREHENSIVE INCOME 26,358 22,960 36,159
29,932
LESS COMPREHENSIVE INCOME ATTRIBUTABLE TO
NONCONTROLLING INTEREST (636 ) (719 )
(1,133 ) (1,077 )
COMPREHENSIVE INCOME
ATTRIBUTABLE TO CONTROLLING INTEREST $ 25,722 $
22,241 $ 35,026 $ 28,855
SUPPLEMENTAL
SALES DATA
Quarter Period Year to Date
Market
Classification
2015 2014 % 2015
2014 % Retail $ 376,219 $ 347,371
8 % $ 606,104 $ 548,355 11 %
Industrial 240,067 205,334 17 %
451,228 376,985 20 %
Construction 234,555
231,507 1 % 435,278 421,069
3 %
Total Gross Sales 850,841 784,212 8 % 1,492,610
1,346,409 11 %
Sales Allowances (12,670 )
(11,460 ) (21,415 ) (19,658 )
Total Net Sales
$ 838,171 $ 772,752 $ 1,471,195 $ 1,326,751
CONSOLIDATED CONDENSED BALANCE SHEETS (UNAUDITED)
JUNE 2015/2014
(In thousands)
ASSETS 2015 2014
LIABILITIES AND EQUITY 2015 2014
CURRENT ASSETS CURRENT LIABILITIES Cash and
cash equivalents $ 24,756 $ - Cash Overdraft $ 21,933 $ 13,659
Restricted cash 710 720 Accounts payable 114,354 107,653 Accounts
receivable 302,538 286,422 Accrued liabilities 97,962
83,086 Inventories 330,235 277,789 Other current assets
21,205 26,469
TOTAL CURRENT ASSETS 679,444
591,400
TOTAL CURRENT LIABILITIES 234,249 204,398
OTHER ASSETS 9,986 13,669
LONG-TERM DEBT AND
INTANGIBLE ASSETS, NET 192,505 169,357
CAPITAL LEASE
OBLIGATIONS 122,303 95,094
PROPERTY, PLANT OTHER
LIABILITIES 50,302 42,652
AND EQUIPMENT, NET
257,731 247,453
EQUITY 732,812 679,735
TOTAL ASSETS $ 1,139,666 $ 1,021,879
TOTAL
LIABILITIES AND EQUITY $ 1,139,666 $ 1,021,879
CONSOLIDATED CONDENSED
STATEMENTS OF CASH FLOWS (UNAUDITED) FOR THE SIX MONTHS
ENDED JUNE 2015/2014 (In thousands)
2015 2014 CASH FLOWS FROM
OPERATING ACTIVITIES: Net earnings $ 37,688 $
30,115 Adjustments to reconcile net earnings attributable to
controlling interest to net cash from operating activities:
Depreciation 18,406 15,644 Amortization of intangibles 1,888 1,194
Expense associated with share-based compensation arrangements 874
932 Excess tax benefits from share-based compensation arrangements
(33 ) - Expense associated with stock grant plans 53 58 Deferred
income taxes (credit) 3 46 Equity in earnings of investee (195 )
(129 ) Net (gain) or loss on sale of property, plant and equipment
(162 ) (931 ) Changes in: Accounts receivable (104,929 ) (105,695 )
Inventories 9,806 10,776 Accounts payable and cash overdraft 45,798
47,343 Accrued liabilities and other 27,625
23,451
NET CASH FROM OPERATING ACTIVITIES 36,822
22,804
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant, and equipment (27,756 ) (20,100 )
Proceeds from sale of property, plant and equipment 1,085 1,754
Acquisitions, net of cash received (2,584 ) (7,135 ) Purchases of
noncontrolling interest (1,256 ) - Advances of notes receivable
(3,083 ) (3,287 ) Collections of notes receivable and related
interest 7,059 888 Cash restricted as to use (305 ) - Other, net
(58 ) (135 )
NET CASH FROM INVESTING
ACTIVITIES (26,898 ) (28,015 )
CASH FLOWS FROM
FINANCING ACTIVITIES: Borrowings under revolving credit
facilities 259,734 190,301 Repayments under revolving credit
facilities (235,993 ) (179,907 ) Debt issuance costs (9 ) (9 )
Proceeds from issuance of common stock 725 201 Dividends paid to
shareholders (8,050 ) (4,214 ) Distributions to noncontrolling
interest (1,250 ) (1,101 ) Repurchase of common stock (78 ) -
Excess tax benefits from share-based compensation arrangements
33 -
Effect of exchange rate changes
on cash 15,112 5,271 Effect of exchange rate changes on
cash (280 ) (60 )
NET CHANGE IN CASH AND CASH
EQUIVALENTS 24,756 -
CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD - -
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 24,756 $ -
SUPPLEMENTAL INFORMATION: Interest paid $
2,430 $ 2,155 Income taxes paid 1,375
6,532
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version on businesswire.com: http://www.businesswire.com/news/home/20150715006170/en/
Universal Forest Products, Inc.Lynn AfendoulisDirector,
Corporate Communications(616) 365-1502
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