Universal Forest Products reports Q1 earnings of US$4.2M, compared with loss of US$3.7M a year earlier, on sales up 18% to US$457.1M; industrial packaging/components business up 20.9%, retail building materials up 12.3%
GRAND RAPIDS, Michigan
April 18, 2012
--Cost-cutting moves, increased demand, favorable weather contribute to quarter gains--
--Company more optimistic about building season--
Universal Forest Products, Inc. (Nasdaq: UFPI) today announced first-quarter 2012 net sales of $457.1 million, up 18 percent over net sales in the same period of 2011. The Company reported net earnings of $4.2 million, or $0.21 per diluted share for the first quarter of 2012, compared with a loss of $3.7 million, or a loss of $0.19 per diluted share, for the first quarter of 2011. Net sales increased in each of the Company's five markets, with double-digit increases in four.
"The Company benefited from the improved execution of our growth strategies and continued emphasis on managing costs though production efficiencies and optimization of certain administrative functions. Of course, we were aided by exceptionally good weather and improved demand in our markets," said CEO Matthew J. Missad, adding that the Company is optimistic that the stronger demand will continue to drive sales in the second quarter.
"The Company was able to maintain costs as sales grew, creating significant operating leverage that drove profitability," Missad added. "We are focused on growing our business and increasing market share through opportunistic sales efforts as well as synergistic acquisitions."
"I'm proud of the way our people are focusing on improving profitability. We're diversifying, we're expanding into new areas and with new products, and we're coming to work every day determined to be better than we were the day before," Missad said.
The lumber market was comparable to the same period last year and didn't have a significant impact on sales. By market, Universal posted the following gross sales results for the first quarter of 2012:
Retail building materials: $196.9 million, an increase of 12.3 percent over the same period of 2011. Universal continues to focus on growing its independent retail customer base, on providing a broader mix of products to big box and independent retailers alike, and on entering into profitable business opportunities.
Industrial packaging/components: $132.3 million, up 20.9 percent over the first quarter of 2011. Universal saw this double-digit sales increase at a time when total industrial production in the United States was up 4.1 percent February 2012 over February 2011 and up 3.8 percent January 2012 over January 2011, the most recent statistics available. Universal continues to focus on adding customers and products in this fragmented market, on expanding its reach into non-wood packaging materials and on providing complete packaging solutions.
Manufactured housing: $63.0 million, an increase of 34.0 percent over the same period of 2011. Demand for temporary housing related to shale oil and gas development in some areas of the United States and Canada contributed to an increase in sales to this market. Industry shipments of HUD-code homes in January and February 2012 were up 42.1 and 43.5 percent, respectively, compared to the same months of 2011. Additionally, approximately one-third of the Company's sales to this market are for modular homes, for which shipments were up 8 percent year-over-year in the fourth quarter of 2011 over 2010, the most recent statistics available.
Residential construction: $51.9 million, up 8.6 percent over the same period of 2011. Total housing starts December 2011 to February 2012 were up 25.5 percent over the same period a year earlier, which included increases in single-family and multifamily starts of 19.7 and 41.2 percent, respectively. Universal continues to focus on profitable business opportunities in this market, where excess capacity continues to have an impact on sales and margins. Our decline in market share was anticipated and was a result of selective practices and taking business that meets profitability objectives.
Commercial construction and concrete forming: $20.2 million, an increase of 37.9 percent over the same period of 2011. In this highly fragmented market, Universal manufactures and supplies forms and other materials for concrete construction projects. The Company continues to expand its sales reach and market penetration and to leverage its design and manufacturing capabilities and its nationwide presence to offer designed components to customers, large and small.
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 Thurs., April 19, 2012. 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 (877) 299-4454 and internationally at (617) 597-5447. Use conference pass code 12037812. 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 18, 2012, domestically at (888) 286-8010 and internationally at (617) 801-6888. Use replay pass code 29968020.
UNIVERSAL FOREST PRODUCTS, INC.
Universal Forest Products, Inc. is a holding company that provides capital, management and administrative resources to subsidiaries that design, manufacture and market wood and wood-alternative products for DIY/retail home centers and other retailers, structural lumber products for the manufactured housing industry, engineered wood components for residential and commercial construction, specialty wood packaging and components for various industries, and forming products for concrete construction. The Company's consumer products subsidiary offers a large portfolio of outdoor living products, including wood composite decking, decorative balusters, post caps and plastic lattice. Its lawn and garden group offers an array of products, such as trellises and arches, to retailers nationwide. Universal's subsidiaries also provide framing services for the site-built construction market. Founded in 1955, Universal Forest Products is headquartered in Grand Rapids, Mich., with operations throughout North America. For more about Universal Forest Products, go to www.ufpi.com.
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