UFPI posts record third quarter results
October 17 2017 - 3:05PM
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
UFP Industries (NASDAQ:UFPI)
Historical Stock Chart
From Mar 2024 to Apr 2024
UFP Industries (NASDAQ:UFPI)
Historical Stock Chart
From Apr 2023 to Apr 2024