UFPI UFP Industries Inc

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.

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 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.

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 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 STATEMENTS OF EARNINGS AND COMPREHENSIVE INCOME (UNAUDITED) FOR THE THREE MONTHS ENDED MARCH 2012/2011     Quarter Period   Year to Date (In thousands, except per share data)   2012       2011       2012       2011                         NET SALES $ 457,111 100 % $ 387,233 100 % $ 457,111 100 % $ 387,233 100 %   COST OF GOODS SOLD   403,445   88.3   345,819   89.3   403,445   88.3   345,819   89.3   GROSS PROFIT 53,666 11.7 41,414 10.7 53,666 11.7 41,414 10.7  

SELLING, GENERAL AND

ADMINISTRATIVE EXPENSES 45,778 10.0 46,488 12.0 45,778 10.0 46,488 12.0 NET LOSS ON DISPOSITION OF ASSETS, EARLY RETIREMENT, AND OTHER IMPAIRMENT AND EXIT CHARGES   95   -   7   -   95   -   7   -   EARNINGS (LOSS) FROM OPERATIONS 7,793 1.7 (5,081 ) (1.3 ) 7,793 1.7 (5,081 ) (1.3 )   OTHER EXPENSE (REVENUE)   708   0.2   618   0.2   708   0.2   618   0.2   EARNINGS (LOSS) BEFORE INCOME TAXES 7,085 1.5 (5,699 ) (1.5 ) 7,085 1.5 (5,699 ) (1.5 )   INCOME TAXES (BENEFIT)   2,699   0.6   (2,287 ) (0.6 )   2,699   0.6   (2,287 ) (0.6 )   NET EARNINGS (LOSS) 4,386 1.0 (3,412 ) (0.9 ) 4,386 1.0 (3,412 ) (0.9 )   LESS NET EARNINGS ATTRIBUTABLE TO NONCONTROLLING INTEREST   (231 ) (0.1 )   (258 ) (0.1 )   (231 ) (0.1 )   (258 ) (0.1 )   NET EARNINGS (LOSS) ATTRIBUTABLE TO CONTROLLING INTEREST $ 4,155   0.9 $ (3,670 ) (0.9 ) $ 4,155   0.9 $ (3,670 ) (0.9 )     EARNINGS (LOSS) PER SHARE - BASIC $ 0.21 $ (0.19 ) $ 0.21 $ (0.19 )   EARNINGS (LOSS) PER SHARE - DILUTED $ 0.21 $ (0.19 ) $ 0.21 $ (0.19 )   WEIGHTED AVERAGE SHARES OUTSTANDING FOR BASIC EARNINGS (LOSS) 19,569 19,306 19,569 19,306   WEIGHTED AVERAGE SHARES OUTSTANDING FOR DILUTED EARNINGS (LOSS) 19,700 19,306 19,700 19,306                                     COMPREHENSIVE INCOME (LOSS) 5,444 (2,702 ) 5,444 (2,702 )   LESS COMPREHENSIVE INCOME ATTRIBUTABLE TO NONCONTROLLING INTEREST   (655 )   (429 )   (655 )   (429 )   COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO CONTROLLING INTEREST $ 4,789   $ (3,131 ) $ 4,789   $ (3,131 )                                    

SUPPLEMENTAL SALES DATA

Quarter Period Year to Date

Market Classification

2012 % 2011 % 2012 % 2011 % Retail Building Materials $ 196,871 43 % $ 175,265 44 % $ 196,871 43 % $ 175,265 44 % Residential Construction 51,926 11 % 47,831 12 % 51,926 11 % 47,831 12 % Commercial Construction and Concrete Forming 20,206 4 % 14,652 4 % 20,206 4 % 14,652 4 % Industrial 132,307 28 % 109,427 28 % 132,307 28 % 109,427 28 % Manufactured Housing   63,039   14 %   47,046   12 %   63,039   14 %   47,046   12 % Total Gross Sales 464,349 100 % 394,221 100 % 464,349 100 % 394,221 100 % Sales Allowances   (7,238 )   (6,988 )   (7,238 )   (6,988 )   Total Net Sales $ 457,111   $ 387,233   $ 457,111   $ 387,233       CONSOLIDATED BALANCE SHEETS (UNAUDITED) MARCH 2012/2011   (In thousands)           ASSETS   2012   2011   LIABILITIES AND EQUITY   2012   2011   CURRENT ASSETS CURRENT LIABILITIES Accounts receivable $ 192,427 $ 176,970 Cash overdraft $ 4,282 $ 41 Inventories 218,553 243,639 Accounts payable 75,347 66,571 Assets held for sale - 7,528 Accrued liabilities 47,741 49,427 Other current assets 23,752 27,905 Current portion of long-term     debt and capital leases   42,774   74,647   TOTAL CURRENT ASSETS 434,732 456,042 TOTAL CURRENT LIABILITIES 170,144 190,686   OTHER ASSETS 15,712 11,698 LONG-TERM DEBT AND INTANGIBLE ASSETS, NET 167,242 171,534 CAPITAL LEASE OBLIGATIONS, PROPERTY, PLANT less current portion 43,668 52,474 AND EQUIPMENT, NET 221,704 216,802 OTHER LIABILITIES 35,112 33,018     EQUITY   590,466   579,898   TOTAL ASSETS $ 839,390 $ 856,076 TOTAL LIABILITIES AND EQUITY $ 839,390 $ 856,076    

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

FOR THE THREE MONTHS ENDED

MARCH 2012/2011

(In thousands)

 

2012

 

2011

CASH FLOWS FROM OPERATING ACTIVITIES:     Net earnings (loss) attributable to controlling interest $ 4,155 $ (3,670 ) Adjustments to reconcile net earnings attributable to controlling interest to net cash from operating activities: Depreciation 7,178 6,902 Amortization of intangibles 745 1,441 Expense associated with share-based compensation arrangements 504 875 Excess tax benefits from share-based compensation arrangements (12 ) (121 ) Deferred income tax (credit) (50 ) (69 ) Net earnings attributable to noncontrolling interest 231 258 Equity in earnings of investee (62 ) (17 ) Net gain on sale or impairment of assets (25 ) (142 ) Changes in: Accounts receivable (64,829 ) (55,869 ) Inventories (23,392 ) (53,007 ) Accounts payable 25,585 7,035 Accrued liabilities and other   5,327     (13,095 ) NET CASH FROM OPERATING ACTIVITIES (44,645 ) (109,479 )   CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of property, plant, and equipment (7,860 ) (6,309 ) Proceeds from sale of property, plant and equipment 2,035 177 Purchase of patents (21 ) - Collections of notes receivable 647 243 Other, net   (302 )   25   NET CASH FROM INVESTING ACTIVITIES (5,501 ) (5,864 )   CASH FLOWS FROM FINANCING ACTIVITIES: Net borrowings under revolving credit facilities 33,968 71,817 Debt issuance costs (81 ) - Proceeds from issuance of common stock 1,036 456 Purchase of additional noncontrolling interest - (100 ) Distributions to noncontrolling interest (379 ) (395 ) Capital contribution from noncontrolling interest - 40 Excess tax benefits from share-based compensation arrangements 12 121 Other, net   3     -   NET CASH FROM FINANCING ACTIVITIES   34,559     71,939     NET CHANGE IN CASH AND CASH EQUIVALENTS (15,587 ) (43,404 )   CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD   11,305     43,363     CASH AND CASH EQUIVALENTS, END OF PERIOD $ (4,282 ) $ (41 )   SUPPLEMENTAL INFORMATION: Cash paid during the period for: Interest 261 250 Income taxes 3,400 1,690