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CST: 23/05/2019 00:13:00   

UFPI reports record first-quarter sales, net earnings and EBITDA

28 Days ago

 - Unit sales up 7 percent, gross profits up 18 percent and EBITDA up 25 percent -
- Semiannual dividend increased 11 percent -

GRAND RAPIDS, Mich., April 24, 2019 (GLOBE NEWSWIRE) -- Universal Forest Products, Inc. (Nasdaq: UFPI) today announced record net sales, net earnings and EBITDA for the first quarter of 2019. The company also announced the UFPI Board of Directors voted to increase the semiannual dividend from $0.18 to $0.20 per share at their April 24, 2019, meeting. The dividend is payable on June 15, 2019, to shareholders of record on June 1, 2019.

“I am very proud of the way our teams are executing their businesses by producing record results in a variety of market conditions,” stated CEO Matt Missad. “We grew our margins during the quarter as a result of timely position buying and the contributions of new products and new business. Our investments in automation and efficiency are also beginning to pay dividends, helping us earn more new business and reduce our overall costs of production.” 

While gross sales were impacted by lower lumber pricing, the company’s unit sales increased 7 percent in the first quarter over the same period last year, driven by organic sales growth, acquisitions and increases in value-added sales. The company’s mix of value-added sales relative to commodity sales improved from 62 percent in the first quarter of 2018 to more than 66 percent in the first quarter of 2019. The increase was largely led by unit sales increases in the industrial and construction markets, which grew 16 percent and 5 percent, respectively. Overall, new product sales grew 8 percent. Opportunistic lumber purchases in the fourth quarter of 2018, when prices were low, contributed significantly to the year-over-year increase in gross profits for the first quarter.

“We continue to focus on new products and services and moving up the value chain for our customers. By utilizing our design, engineering, manufacturing and project management capabilities, we are providing both unique and comprehensive solutions to our customers,” added Matt.

The company continues to explore acquisition opportunities that provide a strategic advantage, have scalability within the company and provide a reasonable return on investment.

First Quarter 2019 Highlights (comparisons on a year-over-year basis):

  • Excluding the pre-tax gain of $7 million on the sale of certain real estate in the first quarter of 2018, operating profit of $48.5 million was up 30 percent and net earnings of $35.5 million was up 28 percent
  • EBITDA of $65.9 million, up 25 percent
  • Net sales of $1.02 billion represented a 2 percent increase
  • Unit sales accounted for 7 percent of the company’s gross sales growth; organic sales contributed 4 percent of the growth while acquisitions added 3 percent.  Lower lumber prices reduced gross sales by 5 percent.
  • New product sales were $99.9 million, up 8 percent

By market, the Company reported the following first-quarter results.

Retail

  • $357.5 million in gross sales, down 3 percent compared to the first quarter of 2018. A unit sales increase of 3 percent was offset by selling prices that were 6 percent lower. Retail sales in the first quarter were adversely impacted by challenging weather in February that delayed building and renovation projects.

Industrial

  • $329.7 million in gross sales, up 15 percent over the first quarter of 2018. A unit sales increase of 16 percent was offset by lower selling prices of 1 percent.  Organic growth contributed 6 percent of the unit sales increase; acquisitions contributed 10 percent.

Construction

  • $344.4 million in gross sales, down 3 percent compared to the first quarter of 2018, due to a 5 percent increase in unit sales and an 8 percent decrease in selling prices. Unit sales to commercial construction and residential construction customers rose 15 and 6 percent, respectively, while unit sales to manufactured housing customers fell 6 percent during the quarter. The decrease in manufactured housing sales is primarily attributable to a drop in shipment levels to several Gulf Coast states that experienced higher shipments in 2017 and early 2018 due to hurricane damage.

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 Thursday, April 25, 2019. 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 pass code 4478205. 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 25, 2019, at 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.

Non-GAAP Financial Information

This release includes certain financial information not prepared in accordance with U.S. GAAP. Because not all companies calculate non-GAAP financial information identically (or at all), the presentations herein may not be comparable to other similarly titled measures used by other companies.  Management considers EBITDA, a non-GAAP measure, an alternative performance measure which may provide useful information to investors.

Brandon Froysland
Director of Finance
(616) 365-1589


CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS AND COMPREHENSIVE INCOME (UNAUDITED)  
FOR THE THREE MONTHS ENDED  
MARCH 2019/2018  
  Quarter Period Year to Date  
(In thousands, except per share data)     2019           2018           2019           2018        
                                   
                                   
                                   
NET SALES   $   1,015,125     100 %   $   993,857     100 %   $   1,015,125     100 %   $   993,857     100.0 %  
                                   
COST OF GOODS SOLD         860,858       84.8         862,968       86.8         860,858       84.8         862,968       86.8    
                                   
GROSS PROFIT       154,267       15.2         130,889       13.2         154,267       15.2         130,889       13.2    
                                   
SELLING,   GENERAL   AND                                    
  ADMINISTRATIVE   EXPENSES       105,317       10.4         93,335       9.4         105,317       10.4         93,335       9.4    
FOREIGN CURRENCY EXCHANGE LOSS         626       0.1         (129 )     -          626       0.1         (129 )     -     
NET GAIN ON DISPOSITION OF ASSETS       (122 )     -          (6,534 )     (0.7 )       (122 )     -          (6,534 )     (0.7 )  
                                   
EARNINGS FROM OPERATIONS       48,446       4.8         44,217       4.4         48,446       4.8         44,217       4.4    
                                   
OTHER EXPENSE, NET       867       0.1         1,061       0.1         867       0.1         1,061       0.1    
                                   
EARNINGS BEFORE INCOME TAXES       47,579       4.7         43,156       4.3         47,579       4.7         43,156       4.3    
                                   
INCOME TAXES       11,577       1.1         9,574       1.0         11,577       1.1         9,574       1.0    
                                   
NET EARNINGS       36,002       3.5         33,582       3.4         36,002       3.5         33,582       3.4    
                                   
LESS NET EARNINGS ATTRIBUTABLE TO                                  
  NONCONTROLLING INTEREST         (462 )     -          (749 )     (0.1 )       (462 )     -          (749 )     (0.1 )  
                                   
NET EARNINGS ATTRIBUTABLE TO                                  
  CONTROLLING INTEREST   $   35,540       3.5     $   32,833       3.3     $   35,540       3.5     $   32,833       3.3    
                                   
                                   
EARNINGS PER SHARE - BASIC     $   0.58         $   0.53         $   0.58         $   0.53        
                                   
EARNINGS PER SHARE - DILUTED   $   0.58         $   0.53         $   0.58         $   0.53        
                                   
                                   
SUPPLEMENTAL DATA                                  
    Quarter Period   Year to Date  
Sales by Market Classification     2019           2018     %     2019           2018     %  
Retail   $   357,487         $   370,402     -3 %   $   357,487         $   370,402     -3 %  
Industrial       329,698             285,484     15 %       329,698             285,484     15 %  
Construction       344,420             355,781     -3 %       344,420             355,781     -3 %  
Total Gross Sales       1,031,605             1,011,667     2 %       1,031,605             1,011,667     2 %  
Sales Allowances       (16,480 )           (17,810 )   7 %       (16,480 )           (17,810 )   7 %  
Total Net Sales   $   1,015,125         $   993,857     2 %   $   1,015,125         $   993,857     2 %  
                                   
      2019     % of
Sales
    2018     % of
Sales
    2019     % of
Sales
    2018     % of
Sales
 
SG&A, Excluding Bonus Expense   $   92,935       9.2     $   84,269       8.5     $   92,935       9.2     $   84,269       8.5    
Bonus Expense       12,382       1.2         9,066       0.9         12,382       1.2         9,066       0.9    
Total SG&A   $   105,317       10.4     $   93,335       9.4     $   105,317       10.4     $   93,335       9.4    
                                   
SG&A, Excluding Bonus Expense, as a Percentage of Gross Profit     60.2 %         64.4 %         60.2 %         64.4 %      
                                   

 

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)  
MARCH 2019/2018  
                             
(In thousands)                        
ASSETS     2019     2018   LIABILITIES AND EQUITY     2019     2018  
                             
CURRENT ASSETS           CURRENT LIABILITIES          
  Cash and cash equivalents   $   17,111   $   25,326     Cash overdraft   $   18,732   $   30,026  
  Restricted cash       1,024       32,425     Accounts payable       170,667       176,469  
  Investments       16,197       10,701     Accrued liabilities       130,985       106,209  
  Accounts receivable       444,111       430,251     Current portion of debt       185       425  
  Inventories       580,163       521,706                
  Other current assets       44,866       23,304                
                             
TOTAL CURRENT ASSETS       1,103,472       1,043,713   TOTAL CURRENT LIABILITIES       320,569       313,129  
                             
OTHER ASSETS       90,463       19,634   LONG-TERM DEBT AND          
INTANGIBLE ASSETS, NET       271,297       254,546     CAPITAL LEASE OBLIGATIONS       266,428       261,327  
PROPERTY, PLANT           OTHER LIABILITIES       96,035       40,086  
  AND EQUIPMENT,   NET       356,166       313,571   EQUITY       1,138,366       1,016,922  
                             
                             
TOTAL ASSETS   $   1,821,398   $   1,631,464   TOTAL LIABILITIES AND EQUITY   $   1,821,398   $   1,631,464  
                             
                             

 

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)  
FOR THE THREE MONTHS ENDED  
MARCH 2019/2018  
(In thousands)         2019       2018    
CASH FLOWS FROM OPERATING ACTIVITIES:          
Net earnings       $   36,002     $   33,582    
Adjustments to reconcile net earnings to net cash from operating activities:          
                 
  Depreciation           14,475         12,712    
  Amortization of intangibles         1,852         1,228    
  Expense associated with share-based and grant compensation arrangements       1,287         1,094    
  Deferred income taxes credit         (742 )       (519 )  
  Unrealized gain on investments         (1,348 )       -    
  Net gain on disposition of assets         (122 )       (6,534 )  
  Changes in:              
     Accounts receivable         (100,716 )       (99,765 )  
     Inventories           (23,649 )       (57,403 )  
     Accounts payable and cash overdraft         25,056         39,935    
     Accrued liabilities and other         (7,924 )       (8,502 )  
        NET CASH USED IN OPERATING ACTIVITIES       (55,829 )       (84,172 )  
                 
CASH FLOWS FROM INVESTING ACTIVITIES:          
Purchases of property, plant, and equipment         (15,883 )       (24,362 )  
Proceeds from sale of property, plant and equipment       241         36,250    
Acquisitions and purchase of noncontrolling interest, net of cash received       -         (8,787 )  
Purchases of investments         (449 )       (6,718 )  
Proceeds from sale of investments         340         5,045    
Other             200         (124 )  
        NET CASH (USED IN) PROVIDED BY INVESTING ACTIVITIES       (15,551 )       1,304    
                 
CASH FLOWS FROM FINANCING ACTIVITIES:          
Borrowings under revolving credit facilities         237,560         296,342    
Repayments under revolving credit facilities         (173,232 )       (179,429 )  
Borrowings of debt           -         1,376    
Repayments of debt           (3,029 )       (5,232 )  
Proceeds from issuance of common stock         261         206    
Distributions to noncontrolling interest         (500 )       (775 )  
Repurchase of common stock         -         (848 )  
Other             9         (70 )  
        NET CASH FROM PROVIDED BY FINANCING ACTIVITIES       61,069         111,570    
                 
Effect of exchange rate changes on cash         248         233    
NET CHANGE IN CASH AND CASH EQUIVALENTS       (10,063 )       28,935    
                 
ALL CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD       28,198         28,816    
                 
ALL CASH AND CASH EQUIVALENTS, END OF PERIOD   $   18,135     $   57,751    
                 
Reconciliation of cash and cash equivalents and restricted cash:          
Cash and cash equivalents, beginning of period     $   27,316     $   28,339    
Restricted cash, beginning of period         882         477    
All cash and cash equivalents, beginning of period   $   28,198     $   28,816    
                 
Cash and cash equivalents, end of period     $   17,111     $   25,326    
Restricted cash, end of period         1,024         32,425    
All cash and cash equivalents, end of period     $   18,135     $   57,751    
                 
                 

 

EBITDA RECONCILIATION (UNAUDITED)  
FOR THE THREE MONTHS ENDED  
MARCH 2019/2018  
    Quarter Period Year to Date  
(In thousands)   2019 2018 2019 2018  
Net earnings     36,002       33,582       36,002       33,582      
Interest  expense     2,460       1,778       2,460       1,778      
Interest and investment income     (1,593 )     (717 )     (1,593 )     (717 )    
Net gain on disposition of assets     (122 )     (6,534 )     (122 )     (6,534 )    
Income taxes     11,577       9,574       11,577       9,574      
Expense associated with share-based compensation arrangements     1,287       1,094       1,287       1,094      
Depreciation expense     14,475       12,712       14,475       12,712      
Amortization of intangibles     1,852       1,228       1,852       1,228      
EBITDA     65,938       52,717       65,938       52,717      
                     

 

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS AS A PERCENTAGE OF SALES    
CURRENT YEAR'S SALES STATED AT LAST YEAR'S SELLING PRICES (UNAUDITED)  
FOR THE THREE MONTHS ENDED - MARCH 2019/2018  
  Quarter Period  
  Actual Sales Adjusted to
Last Year's
Selling Price
Actual  
    2019       2019       2018      
                         
NET SALES     100.0    %      100.0    %      100.0   %  
COST OF GOODS SOLD       84.8         85.5         86.8      
GROSS PROFIT     15.2         14.5         13.2      
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES     10.4         10.0         9.4      
NET GAIN ON DISPOSITION OF ASSETS     -          -          (0.7 )    
EARNINGS FROM OPERATIONS     4.8         4.6         4.4      
OTHER EXPENSE, NET     0.1         0.1         0.1      
EARNINGS BEFORE INCOME TAXES     4.7         4.5         4.3      
INCOME TAXES     1.1         1.1         1.0      
NET EARNINGS     3.5         3.4         3.4      
LESS NET EARNINGS ATTRIBUTABLE TO                        
  NONCONTROLLING INTEREST       -          -          (0.1 )    
NET EARNINGS ATTRIBUTABLE TO                        
  CONTROLLING INTEREST     3.5    %      3.3    %      3.3    %   
                         
Note: Actual percentages are calculated and may not sum to total due to rounding.                        
                         
                         
2018 NET SALES  $    993,857                    
INCREASE BY 2019 UNIT SALES GROWTH     7.00    %                 
ADJUSTED 2019 NET SALES  $    1,063,427                    
LESS ACTUAL 2019 NET SALES     1,015,125                    
DIFFERENCE IN NET SALES    $    48,302                    
                         
ACTUAL 2019 COST OF GOODS SOLD  $    860,858                    
PLUS DIFFERENCE IN NET SALES (ABOVE)     48,302                    
ADJUSTED 2019 COST OF GOODS SOLD  $    909,160                    
                         

 

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