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CST: 17/07/2019 00:03:51   

UFPI Reports Record Fourth Quarter Sales and Operating Profits

146 Days ago

- annual sales and profits also a record -

GRAND RAPIDS, Mich., Feb. 20, 2019 (GLOBE NEWSWIRE) -- Universal Forest Products, Inc. (Nasdaq: UFPI) today announced record net sales for the fourth quarter of 2018, and record net sales and net earnings for fiscal 2018.  EBITDA for the fourth quarter and full year were also records, up more than 11 percent and 12 percent, respectively, over the previous year.

“I’m pleased that the people of Universal were able to manage through significant fluctuations in the lumber market in 2018 and still post these outstanding results,” stated CEO Matt Missad. “The results attest to the strength of the diverse markets we serve, which mitigates our lumber market risk. Our improved operating margins, while partly helped by declining lumber prices during the fourth quarter, reflect our improved product mix and operational efficiencies.”

“We’ll continue to work to increase shareholder value by reinvesting capital in acquisitions, automation and new product development,” added Matt. “We’ll also buy back shares when market conditions warrant it, as they did during the fourth quarter.”

The company purchased 804,185 shares during the fourth quarter at an average price of $28.30.

The company’s comparison of year-over-year, fourth-quarter net earnings were impacted by two atypical factors. A $1.9 million pre-tax unrealized loss ($0.02 per share after tax) was recorded in the fourth quarter of 2018 on the company’s investments in equity securities. This represents a change in accounting from previous years when unrealized gains and losses of this nature were recorded directly to equity. In addition, a $6.4 million tax benefit was recorded in the fourth quarter of 2017 to reduce the company’s net deferred tax liability due to the change in tax law. The benefit improved fourth-quarter 2017 earnings by $0.10 a share.

Fourth Quarter 2018 Highlights (comparisons on a year-over-year basis):

  • Operating profit was $45.4 million, up 9.5 percent
  • EBITDA of $63.6 million, up more than 11 percent
  • Net sales of $988.2 million represent a 2 percent increase
  • Unit sales accounted for 4 percent of the Company’s gross sales growth; acquisitions contributed 3 percent to unit growth while organic sales added 1 percent.  Falling lumber prices reduced gross sales by 3 percent
  • New product sales were $103 million, up 13 percent

Fiscal 2018 Highlights (comparisons on a year-over-year basis):

  • Operating profit was $207.3 million, up 14.2 percent
  • EBITDA of $267 million, up 12 percent
  • Net sales of $4.49 billion, up 14 percent
  • Unit sales accounted for 7 percent of the Company’s gross sales growth (this includes 3 percent from acquired businesses); price increases accounted for 7 percent
  • Year-to-date new product sales were $513 million, up 21 percent

By market, the Company reported the following 2018 results.

Retail

  • Fourth Quarter: $303.4 million in gross sales, down 8 percent over the fourth quarter of 2017. Lower unit sales and lower selling prices each accounted for 4 percent of the decrease. Retail sales during this quarter did not have the same benefit from post-hurricane sales that the Company experienced in 2017 when total gross sales increased 20 percent.

  • Full Year: $1.66 billion in gross sales, up 11 percent over 2017, led by a 7 percent increase in selling prices and a 4 percent increase in unit sales. Acquisitions and organic growth each contributed 2 percent of the sales growth.

Industrial

  • Fourth Quarter: $390.5 million in gross sales, up 11 percent over the fourth quarter of 2017; unit sales growth accounted for 12 percent of gross sales, while falling prices reduced gross sales by 1 percent.

  • Full Year: $1.56 billion in gross sales, up 16 percent over the previous year. Unit sales increased 10 percent, of which 5 percent came from acquisitions and 5 percent from organic growth.

Construction

  • Fourth Quarter: $306.1 million in gross sales, up 1 percent over the fourth quarter of 2017, due to a 5 percent increase in unit sales and a 4 percent decrease in selling prices. Unit sales to commercial customers and residential customers rose 18 and 7 percent, respectively, while unit sales to manufactured housing customers fell 3 percent during the quarter. The decrease in manufactured housing sales is attributable to the high number of manufactured housing shipments recorded in 2017 due to hurricane damage in several Gulf Coast states.

  • Full Year: $1.35 billion in gross sales, up 15 percent over the previous year, driven by a 7 percent increase in unit sales and an 8 percent increase in prices. Residential unit sales grew 7 percent, commercial unit sales grew 14 percent and manufactured housing unit sales grew 4 percent. Acquisitions contributed 1 percent to overall growth.

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, February 21, 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 8194375. 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 March 21, 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.

 

CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS AND COMPREHENSIVE INCOME (UNAUDITED)  
FOR THE THREE AND TWELVE MONTHS ENDED  
DECEMBER 2018/2017  
    Quarter Period       Year to Date      
(In thousands, except per share data)   2018       2017       2018       2017      
                                   
                                   
                                   
NET SALES  $    988,179   100%    966,091   100%    4,489,180   100%    3,941,182   100.0%  
                                   
COST OF GOODS SOLD       850,536     86.1     836,932     86.6     3,896,286     86.8     3,398,356     86.2  
                                   
GROSS PROFIT     137,643     13.9     129,159     13.4     592,894     13.2     542,826     13.8  
                                   
SELLING,   GENERAL   AND                                    
  ADMINISTRATIVE   EXPENSES     92,386     9.3     87,565     9.1     392,679     8.7     361,213     9.2  
FOREIGN CURRENCY EXCHANGE LOSS       (657)     (0.1)     (150)     -      (444)     -      1,007     -   
NET LOSS (GAIN) ON DISPOSITION AND IMPAIRMENT OF ASSETS     475     -      266     -      (6,604)     (0.1)     (863)     -   
                                   
EARNINGS FROM OPERATIONS     45,439     4.6     41,478     4.3     207,263     4.6     181,469     4.6  
                                   
OTHER EXPENSE, NET     4,548     0.5     1,203     0.1     9,410     0.2     5,462     0.1  
                                   
EARNINGS BEFORE INCOME TAXES     40,891     4.1     40,275     4.2     197,853     4.4     176,007     4.5  
                                   
INCOME TAXES     9,258     0.9     7,113     0.7     45,441     1.0     51,967     1.3  
                                   
NET EARNINGS     31,633     3.2     33,162     3.4     152,412     3.4     124,040     3.1  
                                   
LESS NET EARNINGS ATTRIBUTABLE TO                                  
  NONCONTROLLING INTEREST       (1,131)     (0.1)     (2,047)     (0.2)     (3,814)     (0.1)     (4,528)     (0.1)  
                                   
NET EARNINGS ATTRIBUTABLE TO                                  
  CONTROLLING INTEREST  $    30,502     3.1    31,115     3.2    148,598     3.3    119,512     3.0  
                                   
                                   
EARNINGS PER SHARE - BASIC    $    0.50        0.51        2.41        1.95      
                                   
EARNINGS PER SHARE - DILUTED  $    0.50        0.51        2.40        1.94      
                                   
COMPREHENSIVE INCOME     29,726         33,152         147,336         130,170      
                                   
LESS COMPREHENSIVE INCOME ATTRIBUTABLE                                  
  TO NONCONTROLLING INTEREST     (577)         (1,022)         (3,873)         (4,884)      
                                   
COMPREHENSIVE INCOME                                  
  ATTRIBUTABLE TO CONTROLLING INTEREST  $    29,149        32,130        143,463        125,286      
                                   
SUPPLEMENTAL SALES DATA                                  
    Quarter Period   Year to Date  
Market Classification   2018       2017   %   2018       2017   %  
Retail  $    303,398        330,857   -8%    1,662,895        1,492,552   11%  
Industrial     390,488         352,489   11%     1,557,011         1,341,319   16%  
Construction     306,137         304,400   1%     1,345,843         1,172,332   15%  
Total Gross Sales     1,000,023         987,746   1%     4,565,749         4,006,203   14%  
Sales Allowances     (11,844)         (21,655)   45%     (76,569)         (65,021)   -18%  
Total Net Sales  $    988,179        966,091   2%    4,489,180        3,941,182   14%  
                                   
                                   

 

CONSOLIDATED CONDENSED BALANCE SHEETS (UNAUDITED)  
DECEMBER 2018/2017  
                               
(In thousands)                          
ASSETS   2018   2017   LIABILITIES AND EQUITY   2018   2017  
                               
CURRENT ASSETS           CURRENT LIABILITIES          
  Cash and cash equivalents  $    27,316  $    28,339     Cash overdraft  $    27,367  $    25,851  
  Restricted cash     882     477     Accounts payable     136,901     140,106  
  Investments     14,755     11,269     Accrued liabilities     145,754     135,960  
  Accounts receivable     343,450     327,751     Current portion of debt     148     1,329  
  Inventories     556,220     460,308                  
  Other current assets     52,655     35,343                  
                               
TOTAL CURRENT ASSETS     995,278     863,487   TOTAL CURRENT LIABILITIES     310,170     303,246  
                               
OTHER ASSETS     24,597     17,592   LONG-TERM DEBT AND          
INTANGIBLE ASSETS, NET     272,963     254,969     CAPITAL LEASE OBLIGATIONS     202,130     144,674  
PROPERTY, PLANT           OTHER LIABILITIES     46,564     42,734  
  AND EQUIPMENT,   NET     354,710     328,629   EQUITY     1,088,684     974,023  
                               
                               
TOTAL ASSETS  $    1,647,548  $    1,464,677   TOTAL LIABILITIES AND EQUITY  $    1,647,548  $    1,464,677  
                               
                               

 

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)  
FOR THE TWELVE MONTHS ENDED  
DECEMBER 2018/2017  
(In thousands)       2018   2017  
CASH FLOWS FROM OPERATING ACTIVITIES:            
Net earnings      $    152,412  $    124,040  
Adjustments to reconcile net earnings to net cash from operating activities:          
                 
   Depreciation         54,949     48,536  
   Amortization of intangibles       6,393     4,860  
   Expense associated with share-based and grant compensation arrangements     3,574     3,805  
   Deferred income taxes (credit)       857     (8,629)  
   Unrealized loss on investments and other       1,888     (25)  
   Net (gain) on disposition and impairment of assets       (6,604)     (863)  
   Changes in:              
     Accounts receivable       (8,512)     (30,787)  
     Inventories         (84,304)     (49,262)  
     Accounts payable and cash overdraft       (5,213)     21,159  
     Accrued liabilities and other       1,245     23,749  
        NET CASH FROM OPERATING ACTIVITIES       116,685     136,583  
                 
CASH FLOWS FROM INVESTING ACTIVITIES:            
Purchases of property, plant, and equipment       (95,862)     (71,116)  
Proceeds from sale of property, plant and equipment       38,373     2,919  
Acquisitions and purchase of noncontrolling interest, net of cash received     (54,017)     (60,587)  
Purchases of investments       (13,338)     (13,518)  
Proceeds from sale of investments       3,678     5,103  
Other           (66)     (460)  
        NET CASH USED IN INVESTING ACTIVITIES       (121,232)     (137,659)  
                 
CASH FLOWS FROM FINANCING ACTIVITIES:            
Borrowings under revolving credit facilities       732,370     758,287  
Repayments under revolving credit facilities       (748,496)     (722,725)  
Borrowings of debt         927     8,525  
Repayments of debt         (5,540)     (13,347)  
Issuance of long-term debt       75,000     -  
Proceeds from issuance of common stock       1,026     660  
Distributions to noncontrolling interest       (3,139)     (4,032)  
Dividends paid to shareholders       (22,072)     (19,607)  
Repurchase of common stock       (24,629)     (12,977)  
Other           (1,054)     (31)  
        NET CASH FROM (USED IN) FINANCING ACTIVITIES     4,393     (5,247)  
                 
Effect of exchange rate changes on cash       (464)     650  
NET CHANGE IN CASH AND CASH EQUIVALENTS       (618)     (5,673)  
                 
ALL CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD     28,816     34,489  
                 
ALL CASH AND CASH EQUIVALENTS, END OF PERIOD  $    28,198  $    28,816  
                 
Reconciliation of cash and cash equivalents and restricted cash:          
Cash and cash equivalents, beginning of period    $    28,339  $    34,091  
Restricted cash, beginning of period       477     398  
All cash and cash equivalents, beginning of period    $    28,816  $    34,489  
                 
Cash and cash equivalents, end of period    $    27,316  $    28,339  
Restricted cash, end of period       882     477  
All cash and cash equivalents, end of period    $    28,198  $    28,816  
                 
                 

 

EBITDA RECONCILIATION (UNAUDITED)  
FOR THE THREE AND TWELVE MONTHS ENDED  
DECEMBER 2018/2017  
    Quarter Period Year to Date  
(In thousands)   2018 2017 2018 2017  
Net earnings     31,633     33,162     152,412     124,040    
Interest  expense     2,921     1,393     8,893     6,218    
Taxes     9,258     7,113     45,441     51,967    
Expense associated with share-based compensation arrangements     813     1,497     3,574     3,618    
Net loss (gain) on disposition and impairment of assets     475     (70)     (6,604)     (863)    
Unrealized loss on investments     1,888     -     1,888     -    
Depreciation expense     14,459     12,881     54,949     48,536    
Amortization of intangibles     2,119     1,311     6,393     4,860    
EBITDA     63,566     57,287     266,946     238,376    
                     

 

---------------AT THE COMPANY---------------

Brandon Froysland
Director of Finance
(616) 365-1589

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