Document and Entity Information
Document and Entity Information | 9 Months Ended |
Sep. 30, 2017shares | |
Document and Entity Information [Abstract] | |
Entity Registrant Name | UNIVERSAL FOREST PRODUCTS INC |
Entity Central Index Key | 912,767 |
Current Fiscal Year End Date | --12-30 |
Entity Filer Category | Large Accelerated Filer |
Entity Common Stock, Shares Outstanding (in shares) | 20,391,399 |
Entity Current Reporting Status | Yes |
Document Fiscal Year Focus | 2,017 |
Document Fiscal Period Focus | Q3 |
Document Type | 10-Q |
Amendment Flag | false |
Document Period End Date | Sep. 30, 2017 |
CONSOLIDATED CONDENSED BALANCE
CONSOLIDATED CONDENSED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 | Sep. 24, 2016 |
CURRENT ASSETS: | |||
Cash and cash equivalents | $ 22,044 | $ 34,091 | $ 36,683 |
Restricted cash | 905 | 398 | 909 |
Investments | 10,781 | 10,348 | 10,453 |
Accounts receivable, net | 419,183 | 282,253 | 343,771 |
Inventories: | |||
Raw materials | 203,930 | 198,954 | 180,740 |
Finished goods | 208,556 | 198,273 | 189,188 |
Total inventories | 412,486 | 397,227 | 369,928 |
Refundable income taxes | 763 | 11,459 | 7,407 |
Other current assets | 22,438 | 20,662 | 21,636 |
TOTAL CURRENT ASSETS | 888,600 | 756,438 | 790,787 |
RESTRICTED INVESTMENTS | 7,982 | ||
DEFERRED INCOME TAXES | 1,899 | 1,546 | 2,416 |
OTHER ASSETS | 7,634 | 8,617 | 8,757 |
GOODWILL | 212,029 | 198,535 | 207,832 |
INDEFINITE-LIVED INTANGIBLE ASSETS | 7,580 | 2,340 | 2,340 |
OTHER INTANGIBLE ASSETS, NET | 36,093 | 26,731 | 14,014 |
PROPERTY, PLANT AND EQUIPMENT: | |||
Property, plant and equipment | 754,175 | 699,462 | 717,287 |
Less accumulated depreciation and amortization | (429,066) | (401,611) | (432,796) |
PROPERTY, PLANT AND EQUIPMENT, NET | 325,109 | 297,851 | 284,491 |
TOTAL ASSETS | 1,486,926 | 1,292,058 | 1,310,637 |
CURRENT LIABILITIES: | |||
Cash overdraft | 26,617 | 19,761 | 13,940 |
Accounts payable | 171,774 | 124,660 | 137,979 |
Accrued liabilities: | |||
Compensation and benefits | 88,185 | 92,441 | 99,549 |
Other | 50,179 | 32,281 | 57,104 |
Current portion of long-term debt | 2,197 | 2,634 | 1,584 |
TOTAL CURRENT LIABILITIES | 338,952 | 271,777 | 310,156 |
LONG-TERM DEBT | 145,884 | 109,059 | 110,362 |
DEFERRED INCOME TAXES | 22,806 | 20,817 | 14,066 |
OTHER LIABILITIES | 29,204 | 29,939 | 28,963 |
TOTAL LIABILITIES | 536,846 | 431,592 | 463,547 |
Controlling interest shareholders' equity: | |||
Preferred stock, no par value; shares authorized 1,000,000; issued and outstanding, none | |||
Common stock, $1 par value; shares authorized 80,000,000; issued and outstanding, 20,391,399, 20,342,069 and 20,330,939 | 20,391 | 20,342 | 20,331 |
Additional paid-in capital | 200,778 | 185,333 | 183,962 |
Retained earnings | 715,497 | 649,135 | 637,536 |
Accumulated other comprehensive income | (871) | (5,630) | (4,854) |
Total controlling interest shareholders' equity | 935,795 | 849,180 | 836,975 |
Noncontrolling interest | 14,285 | 11,286 | 10,115 |
TOTAL SHAREHOLDERS' EQUITY | 950,080 | 860,466 | 847,090 |
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ 1,486,926 | $ 1,292,058 | $ 1,310,637 |
CONSOLIDATED CONDENSED BALANCE3
CONSOLIDATED CONDENSED BALANCE SHEETS (Parenthetical) - $ / shares | Sep. 30, 2017 | Dec. 31, 2016 | Sep. 24, 2016 |
SHAREHOLDERS' EQUITY: | |||
Preferred stock, no par value (in dollars per share) | $ 0 | $ 0 | $ 0 |
Preferred stock, shares authorized (in shares) | 1,000,000 | 1,000,000 | 1,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 | 0 |
Common Stock, Par or Stated Value Per Share | $ 1 | $ 1 | $ 1 |
Common stock, shares authorized (in shares) | 80,000,000 | 80,000,000 | 80,000,000 |
Common stock, shares issued (in shares) | 20,391,399 | 20,342,069 | 20,330,939 |
Common stock, shares outstanding (in shares) | 20,391,399 | 20,342,069 | 20,330,939 |
CONSOLIDATED CONDENSED STATEMEN
CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS AND COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 24, 2016 | Sep. 30, 2017 | Sep. 24, 2016 | |
Income Statement [Abstract] | ||||
NET SALES | $ 1,056,586 | $ 826,665 | $ 2,975,091 | $ 2,380,909 |
COST OF GOODS SOLD | 911,899 | 708,611 | 2,561,424 | 2,028,629 |
GROSS PROFIT | 144,687 | 118,054 | 413,667 | 352,280 |
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES | 92,416 | 74,502 | 273,676 | 223,153 |
EARNINGS FROM OPERATIONS | 52,271 | 43,552 | 139,991 | 129,127 |
INTEREST EXPENSE | 1,481 | 1,096 | 4,825 | 3,274 |
INTEREST INCOME | (130) | (119) | (541) | (431) |
EQUITY IN EARNINGS OF INVESTEE | 1 | (50) | (25) | (241) |
NON-OPERATING (INCOME)/EXPENSE | 1,352 | 927 | 4,259 | 2,602 |
EARNINGS BEFORE INCOME TAXES | 50,919 | 42,625 | 135,732 | 126,525 |
INCOME TAXES | 16,250 | 13,861 | 44,855 | 43,268 |
NET EARNINGS | 34,669 | 28,764 | 90,877 | 83,257 |
LESS NET EARNINGS ATTRIBUTABLE TO NONCONTROLLING INTEREST | (976) | (945) | (2,480) | (2,828) |
NET EARNINGS ATTRIBUTABLE TO CONTROLLING INTEREST | $ 33,693 | $ 27,819 | $ 88,397 | $ 80,429 |
EARNINGS PER SHARE - BASIC (USD per share) | $ 1.65 | $ 1.36 | $ 4.32 | $ 3.95 |
EARNINGS PER SHARE - DILUTED (USD per share) | $ 1.64 | $ 1.36 | $ 4.31 | $ 3.94 |
OTHER COMPREHENSIVE INCOME | ||||
Net earnings | $ 34,669 | $ 28,764 | $ 90,877 | $ 83,257 |
OTHER COMPREHENSIVE GAIN (LOSS) | 1,719 | (1,156) | 6,141 | (1,521) |
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 |
CONSOLIDATED STATEMENTS OF SHAR
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) $ in Thousands | Common Stock | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Earnings | Noncontrolling Interest | Total |
Beginning balance at Dec. 26, 2015 | $ 20,142 | $ 171,562 | $ 565,636 | $ (4,585) | $ 13,654 | $ 766,409 |
Increase (Decrease) in Stockholders' Equity | ||||||
Net earnings | 80,429 | 2,828 | 83,257 | |||
Foreign currency translation adjustment | (620) | (1,252) | (1,872) | |||
Unrealized gain (loss) on investment & foreign currency | 351 | 351 | ||||
Distributions to noncontrolling interest | (3,160) | (3,160) | ||||
Additional purchases of noncontrolling interest | 855 | (1,955) | (1,100) | |||
Cash dividends $0.450 and $0.420 per share (periods ending September 30, 2017 and September 24, 2016, respectively) | (8,529) | (8,529) | ||||
Issuance of 5,975 and 5,195 shares under employee stock plans (periods ending September 30, 2017 and September 24, 2016, respectively) | 5 | 390 | 395 | |||
Issuance of 142,775 and 133,293 shares under stock grant programs (periods ending September 30, 2017 and September 24, 2016, respectively) | 133 | 5,143 | 5,276 | |||
Issuance of 49,160 and 50,742 shares under deferred compensation plans (periods ending September 30, 2017 and September 24, 2016, respectively) | 51 | (51) | ||||
Expense associated with share-based compensation arrangements | 1,568 | 1,568 | ||||
Accrued expense under deferred compensation plans | 4,495 | 4,495 | ||||
Ending balance at Sep. 24, 2016 | 20,331 | 183,962 | 637,536 | (4,854) | 10,115 | 847,090 |
Beginning balance at Dec. 31, 2016 | 20,342 | 185,333 | 649,135 | (5,630) | 11,286 | 860,466 |
Increase (Decrease) in Stockholders' Equity | ||||||
Net earnings | 88,397 | 2,480 | 90,877 | |||
Foreign currency translation adjustment | 4,325 | 1,382 | 5,707 | |||
Unrealized gain (loss) on investment & foreign currency | 434 | 434 | ||||
Distributions to noncontrolling interest | (3,272) | (3,272) | ||||
Additional purchases of noncontrolling interest | 2,409 | 2,409 | ||||
Cash dividends $0.450 and $0.420 per share (periods ending September 30, 2017 and September 24, 2016, respectively) | (9,208) | (9,208) | ||||
Issuance of 5,975 and 5,195 shares under employee stock plans (periods ending September 30, 2017 and September 24, 2016, respectively) | 6 | 470 | 476 | |||
Issuance of 142,775 and 133,293 shares under stock grant programs (periods ending September 30, 2017 and September 24, 2016, respectively) | 143 | 7,037 | 7,180 | |||
Issuance of 49,160 and 50,742 shares under deferred compensation plans (periods ending September 30, 2017 and September 24, 2016, respectively) | 49 | (49) | ||||
Repurchase of 148,580 shares | (149) | (12,827) | (12,976) | |||
Expense associated with share-based compensation arrangements | 1,978 | 1,978 | ||||
Accrued expense under deferred compensation plans | 6,009 | 6,009 | ||||
Ending balance at Sep. 30, 2017 | $ 20,391 | $ 200,778 | $ 715,497 | $ (871) | $ 14,285 | $ 950,080 |
CONSOLIDATED STATEMENTS OF SHA6
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Parenthetical) - $ / shares | 9 Months Ended | |
Sep. 30, 2017 | Sep. 24, 2016 | |
Increase (Decrease) in Stockholders' Equity | ||
Cash dividends per share (USD per share) | $ 0.450 | $ 0.420 |
Issuance of shares under employee stock plans (in shares) | 5,975 | 5,195 |
Issuance of shares under stock grant programs (in shares) | 142,775 | 133,293 |
Issuance of shares under deferred compensation plans (in shares) | 49,160 | 50,742 |
Repurchase of shares (in shares) | 148,580 |
CONSOLIDATED CONDENSED STATEME7
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2017 | Sep. 24, 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 (credits) | 117 | (53) |
Equity in earnings of investee | (25) | (241) |
Net (gain) loss 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, net of cash received | (59,859) | (66,615) |
Repayments of debt of acquiree | (92,830) | |
Purchase of remaining noncontrolling interest, net of cash received | (1,100) | |
Cash contributed from noncontrolling interest | 464 | |
Advances of notes receivable | (234) | (5,400) |
Collections on notes receivable | 1,334 | 5,819 |
Purchases of investments | (12,155) | (4,468) |
Proceeds from sale of investments | 4,227 | 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 |
Dividends paid to shareholders | (9,207) | (8,529) |
Distributions to noncontrolling interest | (3,272) | (3,160) |
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) |
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, BEGINNING OF YEAR | 34,489 | 88,342 |
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, END OF PERIOD | $ 22,949 | $ 37,592 |
CONSOLIDATED CONDENSED STATEME8
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS - SUPPLEMENTAL - USD ($) $ in Thousands | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 24, 2016 | Dec. 31, 2016 | Dec. 26, 2015 | |
RECONCILIATION OF CASH AND CASH EQUIVALENTS AND RESTRICTED CASH: | ||||
Cash and cash equivalents | $ 22,044 | $ 36,683 | $ 34,091 | $ 87,756 |
Restricted cash | 905 | 909 | 398 | 586 |
Cash, cash equivalents, and restricted cash | 22,949 | 37,592 | $ 34,489 | $ 88,342 |
SUPPLEMENTAL INFORMATION: | ||||
Interest paid | 3,910 | 2,587 | ||
Income taxes paid | 34,108 | 43,384 | ||
NON-CASH FINANCING ACTIVITIES: | ||||
Common stock issued under deferred compensation plans | $ 4,673 | $ 3,657 |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 9 Months Ended |
Sep. 30, 2017 | |
BASIS OF PRESENTATION | |
BASIS OF PRESENTATION | A. BASIS OF PRESENTATION The accompanying unaudited interim consolidated condensed financial statements (the “Financial Statements”) include our accounts and those of our wholly-owned and majority-owned subsidiaries and partnerships, and have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Accordingly, the Financial Statements do not include all of the information and footnotes normally included in the annual consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States. All intercompany transactions and balances have been eliminated. In our opinion, the Financial Statements contain all material adjustments necessary to present fairly our consolidated financial position, results of operations and cash flows for the interim periods presented. All such adjustments are of a normal recurring nature. These Financial Statements should be read in conjunction with the annual consolidated financial statements, and footnotes thereto, included in our Annual Report to Shareholders on Form 10‑K for the fiscal year ended December 31, 2016. Seasonality has a significant impact on our working capital from March to August which historically results in negative or modest cash flows from operations in our first and second quarters. Conversely, we experience a substantial decrease in working capital from September to February which typically results in significant cash flow from operations in our third and fourth quarters. For comparative purposes, we have included the September 24, 2016 balances in the accompanying unaudited consolidated condensed balance sheets. |
FAIR VALUE
FAIR VALUE | 9 Months Ended |
Sep. 30, 2017 | |
FAIR VALUE | |
FAIR VALUE | B. FAIR VALUE We apply the provisions of ASC 820, Fair Value Measurements and Disclosures , to assets and liabilities measured at fair value. Assets measured at fair value are as follows: September 30, 2017 September 24, 2016 Quoted Prices with Quoted Prices with Prices in Other Prices in Other Active Observable Active Observable Markets Inputs Markets Inputs (in thousands) (Level 1) (Level 2) Total (Level 1) (Level 2) Total Money market funds $ 64 $ 413 $ 477 $ 64 $ 132 $ 196 Fixed income funds 1,299 6,905 8,204 2,049 2,335 4,384 Equity securities 10,194 — 10,194 5,592 — 5,592 Mutual funds: Domestic stock funds 335 — 335 760 — 760 International stock funds 87 — 87 70 — 70 Target funds 260 — 260 234 — 234 Bond funds 208 — 208 203 — 203 Total mutual funds 890 — 890 1,267 — 1,267 Total $ 12,447 $ 7,318 $ 19,765 $ 8,972 $ 2,467 $ 11,439 Assets at fair value $ 12,447 $ 7,318 $ 19,765 $ 8,972 $ 2,467 $ 11,439 We maintain money market, mutual funds, bonds, and/or stocks in our non-qualified deferred compensation plan and our wholly owned licensed captive insurance company. These funds are valued at prices quoted in an active exchange market and are included in “Cash and Cash Equivalents”, “Investments”, “Restricted Cash”, and “Restricted Investments”. We have elected not to apply the fair value option under ASC 825, Financial Instruments, to any of our financial instruments except for those expressly required by U.S. GAAP. We did not maintain any Level 3 assets or liabilities at September 30, 2017 or September 24, 2016. In November 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standard Update (ASU) No. 2016-18, “Statement of Cash Flows (Topic 230)” (ASU 2016-18). Under ASU 2016-18, an entity will be required to explain changes in the statement of cash flows during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The amendments in this update should be applied using retrospective transition method to each period presented. Companies are required to adopt the new standard for fiscal years beginning after December 15, 2017. Early adoption of ASU 2016-18 is permitted, including adoption in an interim period. The Company has early adopted this standard during the first quarter of 2017. In the first nine months of 2017, our wholly-owned captive, Ardellis Insurance Ltd. (“Ardellis”) transferred $4.1 million in fixed income securities from its Investment Account and purchased an additional $3.8 million in fixed income securities which are held in a newly formed collateral trust account in line with regulatory requirements in the State of Michigan to allow Ardellis to act as an admitted carrier in the State. These funds are intended to safeguard the insureds of the Michigan Branch of Ardellis. The funds are classified as “Restricted Investments”. In accordance with our investment policy, our wholly-owned captive, Ardellis Insurance Ltd. (“Ardellis”), maintains an investment portfolio, totaling $18.4 million as of September 30, 2017, consisting of domestic and international stocks, and fixed income bonds. Ardellis’ available for sale investment portfolio, including funds held with the State of Michigan, consists of the following: Unrealized Cost Gain/(Loss) Fair Value Fixed Income $ 8,170 $ 34 $ 8,204 Equity 9,123 1,071 10,194 Total $ 17,293 $ 1,105 $ 18,398 Our Fixed Income investments consist of short, intermediate, and long term bonds, as well as fixed blend bonds. Within the fixed income investments, we maintain a specific mixture of US treasury notes, US agency mortgage backed securities, private label mortgage backed securities, and various corporate securities. Our equity investments consist of small, mid, and large cap growth and value funds, as well as international equity. The net pre-tax effected unrealized gain was $1.1 million. Carrying amounts above are recorded in the investments and restricted investments line items within the balance sheet as of September 30, 2017. During the first nine months of 2017, Ardellis investments reported a net realized gain of $185 thousand, which was recorded in interest income on the statement of earnings. |
REVENUE RECOGNITION
REVENUE RECOGNITION | 9 Months Ended |
Sep. 30, 2017 | |
REVENUE RECOGNITION | |
REVENUE RECOGNITION | C. REVENUE RECOGNITION Revenue is recognized at the time the product is shipped to the customer. Generally, title passes at the time of shipment. In certain circumstances, the customer takes title when the shipment arrives at the destination. However, our shipping process is typically completed the same day. On May 28, 2014, the FASB issued ASU No. 2014-09 (Accounting Standard Codification 606), Revenue from Contracts with Customers, which will replace most existing revenue recognition guidance in U.S. GAAP. The core principle of the ASU is that an entity should recognize revenue for the transfer of goods or services equal to the amount that it expects to be entitled to receive for those goods or services. The ASU requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments. The Company plans to adopt the guidance in the first quarter of fiscal 2018 and apply the modified retrospective method. The Company is in the process of finalizing contract reviews and the completion of the new standard’s impact on its Consolidated Financial Statements. Earnings on construction contracts are reflected in operations using percentage-of-completion accounting, under either cost to cost or units of delivery methods, depending on the nature of the business at individual operations. Under percentage-of-completion using the cost to cost method, revenues and related earnings on construction contracts are measured by the relationships of actual costs incurred related to the total estimated costs. Under percentage-of-completion using the units of delivery method, revenues and related earnings on construction contracts are measured by the relationships of actual units produced related to the total number of units. Revisions in earnings estimates on the construction contracts are recorded in the accounting period in which the basis for such revisions becomes known. Projected losses on individual contracts are charged to operations in their entirety when such losses become apparent. Construction contract revenue increased to approximately $36.6 million, during the third quarter of 2017, from $31.9 million during the same period of 2016. Construction contract revenue was approximately $99.6 million and $95.2 million through the first nine months of 2017 and 2016, respectively. Our construction contracts are generally entered into with a fixed price and completion of the projects can range from 6 to 18 months in duration. Therefore, our operating results are impacted by, among many other things, labor rates and commodity costs. During the year, we update our estimated costs to complete our projects using current labor and commodity costs and recognize losses to the extent that they exist. The following table presents the balances of percentage-of-completion accounts which are included in “Other current assets” and “Accrued liabilities: Other”, respectively (in thousands): September 30, December 31, September 24, 2017 2016 2016 Cost and Earnings in Excess of Billings $ 2,594 $ 2,573 $ 2,788 Billings in Excess of Cost and Earnings 4,802 4,748 6,222 |
EARNINGS PER SHARE
EARNINGS PER SHARE | 9 Months Ended |
Sep. 30, 2017 | |
EARNINGS PER SHARE | |
EARNINGS PER SHARE | D. EARNINGS PER SHARE The computation of earnings per share (“EPS”) is as follows (in thousands): Three Months Ended Nine Months Ended September 30, September 24, September 30, September 24, 2017 2016 2017 2016 Numerator: Net earnings attributable to controlling interest $ 33,693 $ 27,819 $ 88,397 $ 80,429 Adjustment for earnings allocated to non-vested restricted common stock (656) (463) (1,633) (1,281) Net earnings for calculating EPS $ 33,037 $ 27,356 $ 86,764 $ 79,148 Denominator: Weighted average shares outstanding 20,474 20,402 20,481 20,360 Adjustment for non-vested restricted common stock (399) (340) (378) (324) Shares for calculating basic EPS 20,075 20,062 20,103 20,036 Effect of dilutive stock options 41 33 37 32 Shares for calculating diluted EPS 20,116 20,095 20,140 20,068 Net earnings per share: Basic $ 1.65 $ 1.36 $ 4.32 $ 3.95 Diluted $ 1.64 $ 1.36 $ 4.31 $ 3.94 No options were excluded from the computation of diluted EPS for the quarters ended September 30, 2017 or September 24, 2016. On October 17, 2017, our Board of Directors declared a three-for-one stock split effected in the form of a stock dividend. The record date of the stock split will be October 31, 2017, and the eventual stock distribution to shareholders will occur November 14, 2017. All references made to share or earnings per share amounts in the accompanying unaudited consolidated financial statements and applicable disclosures are presented on a pre-split basis. As a result of the stock split, all historical per share data and number of shares outstanding presented in future financial statements will be retroactively adjusted. The following table provides pro forma earnings per share, giving retroactive effect to the stock split: Three Months Ended Nine Months Ended September 30, September 24, September 30, September 24, 2017 2016 2017 2016 Shares for calculating basic EPS - Post stock split basis 60,225 60,186 60,309 60,108 Shares for calculating diluted EPS - Post stock split basis 60,348 60,285 60,420 60,204 Net earnings per share (post stock split): Basic $ 0.55 $ 0.45 $ 1.44 $ 1.32 Diluted $ 0.55 $ 0.45 $ 1.44 $ 1.31 |
COMMITMENTS, CONTINGENCIES, AND
COMMITMENTS, CONTINGENCIES, AND GUARANTEES | 9 Months Ended |
Sep. 30, 2017 | |
COMMITMENTS, CONTINGENCIES, AND GUARANTEES | |
COMMITMENTS, CONTINGENCIES, AND GUARANTEES | E. COMMITMENTS, CONTINGENCIES, AND GUARANTEES We are self-insured for environmental impairment liability, including certain liabilities which are insured through a wholly owned subsidiary, Ardellis Insurance Ltd., a licensed captive insurance company. We own and operate a number of facilities throughout the United States that chemically treat lumber products. In connection with the ownership and operation of these and other real properties, and the disposal or treatment of hazardous or toxic substances, we may, under various federal, state, and local environmental laws, ordinances, and regulations, be potentially liable for removal and remediation costs, as well as other potential costs, damages, and expenses. Environmental reserves, calculated with no discount rate, have been established to cover remediation activities at wood preservation facilities in Stockertown, PA; Elizabeth City, NC; Auburndale, FL; and Medley, FL. In addition, a reserve was established for our facility in Thornton, CA to remove certain lead containing materials which existed on the property at the time of purchase. On a consolidated basis, we have reserved approximately $3.6 million and $3.4 million on September 30, 2017, and September 24, 2016, respectively, representing the estimated costs to complete future remediation efforts. These amounts have not been reduced by an insurance receivable. Many of our wood treating operations utilize “Subpart W” drip pads, defined as hazardous waste management units by the Environmental Protection Agency. The rules regulating drip pads require that a pad be “closed” at the point that it is no longer intended to be used for wood treating operations or to manage hazardous waste. Closure involves identification and disposal of contaminants which are required to be removed from the facility. The cost of closure is dependent upon a number of factors including, but not limited to, identification and removal of contaminants, cleanup standards that vary from state to state, and the time period over which the cleanup would be completed. Based on our present knowledge of existing circumstances, it is considered probable that these costs will approximate $0.2 million. As a result, this amount is recorded in other long-term liabilities on September 30, 2017. In February 2014, one of our operations was served with a federal grand jury subpoena from the Southern District of New York. The subpoena was issued in connection with an investigation being conducted by the US Attorney’s Office for the Southern District of New York. The subpoena requested documents relating to a developer and construction projects for which our operation had provided materials and labor. Following receipt of the subpoena, the Audit Committee of the Company’s Board of Directors retained outside counsel to conduct an internal investigation and respond to the subpoena. The Company cooperated in all respects with the US Attorney’s Office, complied with this subpoena and voluntarily provided additional information. As a result of the internal investigation, in 2014, two Company employees were terminated for violating the Company’s Code of Business Conduct and Ethics. In May 2015, those ex-employees were indicted by the grand jury. In April 2016, one of the two former employees pled guilty to four of the charges included in the indictment. In May 2016, the other former employee was found guilty by a jury on four of the charges included in the indictment. The Company has not been named as a target and continues to cooperate with the US Attorney’s Office in this matter. Based upon prior communications with the US Attorney’s Office, we do not believe that the resolution of this matter will have a material adverse impact on our financial condition or the results of our operations. In addition, on September 30, 2017, we were parties either as plaintiff or defendant to a number of lawsuits and claims arising through the normal course of our business. In the opinion of management, our consolidated financial statements will not be materially affected by the outcome of these contingencies and claims. On September 30, 2017, we had outstanding purchase commitments on commenced capital projects of approximately $26.1 million. We provide a variety of warranties for products we manufacture. Historically, warranty claims have not been material. We distribute products manufactured by other companies, some of which are no longer in business. While we do not warrant these products, we have received claims as a distributor of these products when the manufacturer no longer exists or has the ability to pay. Historically, these costs have not had a material effect on our consolidated financial statements. As part of our operations, we supply building materials and labor to site-built construction projects or we jointly bid on contracts with framing companies for such projects. In some instances, we are required to post payment and performance bonds to insure the project owner that the products and installation services are completed in accordance with our contractual obligations. We have agreed to indemnify the surety for claims made against the bonds. As of September 30, 2017 we had approximately $8.8 million outstanding payment and performance bonds for open projects. We had approximately $1.7 million in payment and performance bonds outstanding for completed projects which are still under warranty. On September 30, 2017, we had outstanding letters of credit totaling $26.5 million, primarily related to certain insurance contracts and industrial development revenue bonds described further below. In lieu of cash deposits, we provide irrevocable letters of credit in favor of our insurers to guarantee our performance under certain insurance contracts. We currently have irrevocable letters of credit outstanding totaling approximately $16.7 million for these types of insurance arrangements. We have reserves recorded on our balance sheet, in accrued liabilities, that reflect our expected future liabilities under these insurance arrangements. We are required to provide irrevocable letters of credit in favor of the bond trustees for all industrial development revenue bonds that have been issued. These letters of credit guarantee principal and interest payments to the bondholders. We currently have irrevocable letters of credit outstanding totaling approximately $9.8 million related to our outstanding industrial development revenue bonds. These letters of credit have varying terms but may be renewed at the option of the issuing banks. Certain wholly owned domestic subsidiaries have guaranteed the indebtedness of Universal Forest Products, Inc. in certain debt agreements, including the Series 2012 Senior Notes and our revolving credit facility. The maximum exposure of these guarantees is limited to the indebtedness outstanding under these debt arrangements and this exposure will expire concurrent with the expiration of the debt agreements. We did not enter into any new guarantee arrangements during the third quarter of 2017 which would require us to recognize a liability on our balance sheet. |
BUSINESS COMBINATIONS
BUSINESS COMBINATIONS | 9 Months Ended |
Sep. 30, 2017 | |
BUSINESS COMBINATIONS | |
BUSINESS COMBINATIONS | F. BUSINESS COMBINATIONS We completed the following acquisitions in nine months ended 2017 and 2016 which were accounted for using the purchase method in thousands unless otherwise noted: Net Company Acquisition Intangible Tangible Operating Name Date Purchase Price Assets Assets Segment May 26, 2017 $5,042 $ 4,880 $ 162 South Go Boy Pallets, LLC ("Go Boy") A manufacturer and distributor of industrial pallets and packaging in Georgia and North Carolina. Go Boy has annual sales of approximately $8 million. The acquisition of Go Boy enabled us to expand our industrial packaging product offering and lumber sourcing in this region. March 6, 2017 $31,818 $ 7,533 $ 24,285 South Robbins Manufacturing Co. ("Robbins") A manufacturer of treated wood products with facilities in Florida, Georgia, and North Carolina. Robbins has annual sales of approximately $86 million. The acquisition of Robbins allowed us to expand our presence in this region and serve customers more cost effectively. March 6, 2017 $22,789 $ 14,266 $ 8,523 North Quality Hardwood Sales, LLC ("Quality") A manufacturer and supplier of hardwood products, including components of cabinets used in homes and recreational vehicles. Quality has annual sales of approximately $30 million. The acquisition of Quality enabled us to expand our product offering to include hardwood-based products. November 29, 2016 $9,455 $ 7,314 $ 2,141 All Other The UBEECO Group Pty. Ltd. ("Ubeeco") A manufacturer and distributor of a variety of wood packaging and alternative material products, including boxes, crates, pallets, skids, protective packaging, packaging accessories and loose lumber. Ubeeco has annual sales of approximately $20 million. The acquisition of Ubeeco allows us to make progress on our goal of becoming a global provider of packaging solutions. September 16, 2016 $66,691 $ 17,455 $ 49,236 All Other idX Holdings, Inc. ("idX") A designer, producer, and installer of customized interior fixtures and related products used in a variety of commercial structures. idX has annual sales of $300 million. The acquisition of idX enables us to enhance our design, product and service offering to become a tier 1 supplier of interior fixtures to retail customers, and continue to use idX's capabilities to continue to develop new markets for growth. Our goal is to achieve long-term synergies, including: a. Eliminating redundant administrative support costs. b. Using the scale advantage of the Company to reduce material costs of common raw materials. c. Utilizing manufacturing capacity of certain existing locations to supply idX. d. Utilizing idX’s international footprint to identify sourcing opportunities for certain products. e. Cross selling one another’s products and services with our respective customers. f. Collaborating on new product development. July 29, 2016 $1,246 $ 405 $ 841 North Seven D Truss, L.P. A manufacturer and distributor of roof and floor trusses. 7D had annual sales of approximately $4.0 million. The acquisition of 7D gave us the opportunity to consolidate operations with our Gordon, Pennsylvania location. The intangible assets for each acquisition were finalized and allocated to their respective identifiable intangible asset and goodwill accounts during 2017, excluding Go Boy. In aggregate, acquisitions completed since September of 2016 contributed approximately $292.1 million in revenue and $5.3 million in operating profit during 2017. |
SEGMENT REPORTING
SEGMENT REPORTING | 9 Months Ended |
Sep. 30, 2017 | |
SEGMENT REPORTING | |
SEGMENT REPORTING | G. SEGMENT REPORTING ASC 280, Segment Reporting (“ASC 280”), defines operating segments as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance. The Company operates manufacturing, treating and distribution facilities throughout North America, but primarily in the United States. The Company manages the operations of its individual locations primarily through a geographic reporting structure under which each location is included in a region and regions are included in our North, South, and West divisions. The exceptions to this geographic reporting and management structure are (a) the Company’s Alternative Materials Division, which offers a portfolio of non-wood products and distributes those products nation-wide (b) the Company’s distribution unit (referred to as UFPD) which distributes a variety of products to the manufactured housing industry nation-wide and is accounted for as a reporting unit within the North segment, and (c) the idX division, which designs, produces, and installs customized in-store environments, for customers world-wide. With respect to the facilities in the north, south, and west segments, these facilities generally supply the three markets the Company serves nationally - Retail, Industrial, and Construction. Also, substantially all of our facilities support customers in the immediate geographical region surrounding the facility. Our Alternative Materials, International and idX division have been included in the “All Other” column of the table below. The “Corporate” column includes unallocated administrative costs and certain incentive compensation expense. Three Months Ended September 30, 2017 North South West All Other Corporate Total Net sales to outside customers $ 310,384 $ 206,050 $ 378,714 $ 161,438 $ — $ 1,056,586 Intersegment net sales 18,897 18,817 21,384 47,539 — 106,637 Segment operating profit 16,697 10,234 22,538 6,882 (4,080) 52,271 Three Months Ended September 24, 2016 North South West All Other Corporate Total Net sales to outside customers $ 267,156 $ 173,715 $ 335,981 $ 49,813 $ — $ 826,665 Intersegment net sales 14,318 9,642 22,054 4,574 — 50,588 Segment operating profit 14,630 9,900 19,962 2,959 (3,899) 43,552 Nine Months Ended September 30, 2017 North South West All Other Corporate Total Net sales to outside customers $ 857,858 $ 616,376 $ 1,088,744 $ 412,113 $ — $ 2,975,091 Intersegment net sales 51,859 55,472 65,466 116,743 — 289,540 Segment operating profit (loss) 42,921 31,152 65,547 13,285 (12,914) 139,991 Nine Months Ended September 24, 2016 North South West All Other Corporate Total Net sales to outside customers $ 758,066 $ 533,239 $ 940,188 $ 149,416 $ — $ 2,380,909 Intersegment net sales 42,071 28,693 65,325 16,559 — 152,648 Segment operating profit 43,054 35,830 58,434 11,542 (19,733) 129,127 |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Sep. 30, 2017 | |
INCOME TAXES | |
INCOME TAXES | H. INCOME TAXES Effective tax rates differ from statutory federal income tax rates, primarily due to provisions for state and local income taxes and permanent tax differences. Our effective tax rate was 31.9 % in the third quarter of 201 7 compared to 32.5 % for same period in 201 6 . Our effective tax rate was 33.0 % in the first nine months of 201 7 compared to 34.2 % in 201 6 , primarily due to recording a tax deduction for certain share-based compensation and fees at fair market value. |
BASIS OF PRESENTATION (Policies
BASIS OF PRESENTATION (Policies) | 9 Months Ended |
Sep. 30, 2017 | |
BASIS OF PRESENTATION | |
Basis of Accounting | The accompanying unaudited interim consolidated condensed financial statements (the “Financial Statements”) include our accounts and those of our wholly-owned and majority-owned subsidiaries and partnerships, and have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Accordingly, the Financial Statements do not include all of the information and footnotes normally included in the annual consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States. All intercompany transactions and balances have been eliminated. In our opinion, the Financial Statements contain all material adjustments necessary to present fairly our consolidated financial position, results of operations and cash flows for the interim periods presented. All such adjustments are of a normal recurring nature. These Financial Statements should be read in conjunction with the annual consolidated financial statements, and footnotes thereto, included in our Annual Report to Shareholders on Form 10‑K for the fiscal year ended December 31, 2016. Seasonality has a significant impact on our working capital from March to August which historically results in negative or modest cash flows from operations in our first and second quarters. Conversely, we experience a substantial decrease in working capital from September to February which typically results in significant cash flow from operations in our third and fourth quarters. For comparative purposes, we have included the September 24, 2016 balances in the accompanying unaudited consolidated condensed balance sheets. |
Revenue Recognition | Revenue is recognized at the time the product is shipped to the customer. Generally, title passes at the time of shipment. In certain circumstances, the customer takes title when the shipment arrives at the destination. However, our shipping process is typically completed the same day. On May 28, 2014, the FASB issued ASU No. 2014-09 (Accounting Standard Codification 606), Revenue from Contracts with Customers, which will replace most existing revenue recognition guidance in U.S. GAAP. The core principle of the ASU is that an entity should recognize revenue for the transfer of goods or services equal to the amount that it expects to be entitled to receive for those goods or services. The ASU requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments. The Company plans to adopt the guidance in the first quarter of fiscal 2018 and apply the modified retrospective method. The Company is in the process of finalizing contract reviews and the completion of the new standard’s impact on its Consolidated Financial Statements. Earnings on construction contracts are reflected in operations using percentage-of-completion accounting, under either cost to cost or units of delivery methods, depending on the nature of the business at individual operations. Under percentage-of-completion using the cost to cost method, revenues and related earnings on construction contracts are measured by the relationships of actual costs incurred related to the total estimated costs. Under percentage-of-completion using the units of delivery method, revenues and related earnings on construction contracts are measured by the relationships of actual units produced related to the total number of units. Revisions in earnings estimates on the construction contracts are recorded in the accounting period in which the basis for such revisions becomes known. Projected losses on individual contracts are charged to operations in their entirety when such losses become apparent. Construction contract revenue increased to approximately $36.6 million, during the third quarter of 2017, from $31.9 million during the same period of 2016. Construction contract revenue was approximately $99.6 million and $95.2 million through the first nine months of 2017 and 2016, respectively. Our construction contracts are generally entered into with a fixed price and completion of the projects can range from 6 to 18 months in duration. Therefore, our operating results are impacted by, among many other things, labor rates and commodity costs. During the year, we update our estimated costs to complete our projects using current labor and commodity costs and recognize losses to the extent that they exist. |
FAIR VALUE (Tables)
FAIR VALUE (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
FAIR VALUE | |
Assets measured at fair value | September 30, 2017 September 24, 2016 Quoted Prices with Quoted Prices with Prices in Other Prices in Other Active Observable Active Observable Markets Inputs Markets Inputs (in thousands) (Level 1) (Level 2) Total (Level 1) (Level 2) Total Money market funds $ 64 $ 413 $ 477 $ 64 $ 132 $ 196 Fixed income funds 1,299 6,905 8,204 2,049 2,335 4,384 Equity securities 10,194 — 10,194 5,592 — 5,592 Mutual funds: Domestic stock funds 335 — 335 760 — 760 International stock funds 87 — 87 70 — 70 Target funds 260 — 260 234 — 234 Bond funds 208 — 208 203 — 203 Total mutual funds 890 — 890 1,267 — 1,267 Total $ 12,447 $ 7,318 $ 19,765 $ 8,972 $ 2,467 $ 11,439 Assets at fair value $ 12,447 $ 7,318 $ 19,765 $ 8,972 $ 2,467 $ 11,439 |
Available for sale investment portfolio | Unrealized Cost Gain/(Loss) Fair Value Fixed Income $ 8,170 $ 34 $ 8,204 Equity 9,123 1,071 10,194 Total $ 17,293 $ 1,105 $ 18,398 |
REVENUE RECOGNITION (Tables)
REVENUE RECOGNITION (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
REVENUE RECOGNITION | |
Schedule of percentage-of-completion balances | The following table presents the balances of percentage-of-completion accounts which are included in “Other current assets” and “Accrued liabilities: Other”, respectively (in thousands): September 30, December 31, September 24, 2017 2016 2016 Cost and Earnings in Excess of Billings $ 2,594 $ 2,573 $ 2,788 Billings in Excess of Cost and Earnings 4,802 4,748 6,222 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
EARNINGS PER SHARE | |
Computation of earnings per share | The computation of earnings per share (“EPS”) is as follows (in thousands): Three Months Ended Nine Months Ended September 30, September 24, September 30, September 24, 2017 2016 2017 2016 Numerator: Net earnings attributable to controlling interest $ 33,693 $ 27,819 $ 88,397 $ 80,429 Adjustment for earnings allocated to non-vested restricted common stock (656) (463) (1,633) (1,281) Net earnings for calculating EPS $ 33,037 $ 27,356 $ 86,764 $ 79,148 Denominator: Weighted average shares outstanding 20,474 20,402 20,481 20,360 Adjustment for non-vested restricted common stock (399) (340) (378) (324) Shares for calculating basic EPS 20,075 20,062 20,103 20,036 Effect of dilutive stock options 41 33 37 32 Shares for calculating diluted EPS 20,116 20,095 20,140 20,068 Net earnings per share: Basic $ 1.65 $ 1.36 $ 4.32 $ 3.95 Diluted $ 1.64 $ 1.36 $ 4.31 $ 3.94 |
Schedule of pro forma earnings per share | Three Months Ended Nine Months Ended September 30, September 24, September 30, September 24, 2017 2016 2017 2016 Shares for calculating basic EPS - Post stock split basis 60,225 60,186 60,309 60,108 Shares for calculating diluted EPS - Post stock split basis 60,348 60,285 60,420 60,204 Net earnings per share (post stock split): Basic $ 0.55 $ 0.45 $ 1.44 $ 1.32 Diluted $ 0.55 $ 0.45 $ 1.44 $ 1.31 |
BUSINESS COMBINATIONS (Tables)
BUSINESS COMBINATIONS (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
BUSINESS COMBINATIONS | |
Business Acquisitions Accounted for Using Purchase Method | Net Company Acquisition Intangible Tangible Operating Name Date Purchase Price Assets Assets Segment May 26, 2017 $5,042 $ 4,880 $ 162 South Go Boy Pallets, LLC ("Go Boy") A manufacturer and distributor of industrial pallets and packaging in Georgia and North Carolina. Go Boy has annual sales of approximately $8 million. The acquisition of Go Boy enabled us to expand our industrial packaging product offering and lumber sourcing in this region. March 6, 2017 $31,818 $ 7,533 $ 24,285 South Robbins Manufacturing Co. ("Robbins") A manufacturer of treated wood products with facilities in Florida, Georgia, and North Carolina. Robbins has annual sales of approximately $86 million. The acquisition of Robbins allowed us to expand our presence in this region and serve customers more cost effectively. March 6, 2017 $22,789 $ 14,266 $ 8,523 North Quality Hardwood Sales, LLC ("Quality") A manufacturer and supplier of hardwood products, including components of cabinets used in homes and recreational vehicles. Quality has annual sales of approximately $30 million. The acquisition of Quality enabled us to expand our product offering to include hardwood-based products. November 29, 2016 $9,455 $ 7,314 $ 2,141 All Other The UBEECO Group Pty. Ltd. ("Ubeeco") A manufacturer and distributor of a variety of wood packaging and alternative material products, including boxes, crates, pallets, skids, protective packaging, packaging accessories and loose lumber. Ubeeco has annual sales of approximately $20 million. The acquisition of Ubeeco allows us to make progress on our goal of becoming a global provider of packaging solutions. September 16, 2016 $66,691 $ 17,455 $ 49,236 All Other idX Holdings, Inc. ("idX") A designer, producer, and installer of customized interior fixtures and related products used in a variety of commercial structures. idX has annual sales of $300 million. The acquisition of idX enables us to enhance our design, product and service offering to become a tier 1 supplier of interior fixtures to retail customers, and continue to use idX's capabilities to continue to develop new markets for growth. Our goal is to achieve long-term synergies, including: a. Eliminating redundant administrative support costs. b. Using the scale advantage of the Company to reduce material costs of common raw materials. c. Utilizing manufacturing capacity of certain existing locations to supply idX. d. Utilizing idX’s international footprint to identify sourcing opportunities for certain products. e. Cross selling one another’s products and services with our respective customers. f. Collaborating on new product development. July 29, 2016 $1,246 $ 405 $ 841 North Seven D Truss, L.P. A manufacturer and distributor of roof and floor trusses. 7D had annual sales of approximately $4.0 million. The acquisition of 7D gave us the opportunity to consolidate operations with our Gordon, Pennsylvania location. |
SEGMENT REPORTING (Tables)
SEGMENT REPORTING (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
SEGMENT REPORTING | |
Segment Reporting | Our Alternative Materials, International and idX division have been included in the “All Other” column of the table below. The “Corporate” column includes unallocated administrative costs and certain incentive compensation expense. Three Months Ended September 30, 2017 North South West All Other Corporate Total Net sales to outside customers $ 310,384 $ 206,050 $ 378,714 $ 161,438 $ — $ 1,056,586 Intersegment net sales 18,897 18,817 21,384 47,539 — 106,637 Segment operating profit 16,697 10,234 22,538 6,882 (4,080) 52,271 Three Months Ended September 24, 2016 North South West All Other Corporate Total Net sales to outside customers $ 267,156 $ 173,715 $ 335,981 $ 49,813 $ — $ 826,665 Intersegment net sales 14,318 9,642 22,054 4,574 — 50,588 Segment operating profit 14,630 9,900 19,962 2,959 (3,899) 43,552 Nine Months Ended September 30, 2017 North South West All Other Corporate Total Net sales to outside customers $ 857,858 $ 616,376 $ 1,088,744 $ 412,113 $ — $ 2,975,091 Intersegment net sales 51,859 55,472 65,466 116,743 — 289,540 Segment operating profit (loss) 42,921 31,152 65,547 13,285 (12,914) 139,991 Nine Months Ended September 24, 2016 North South West All Other Corporate Total Net sales to outside customers $ 758,066 $ 533,239 $ 940,188 $ 149,416 $ — $ 2,380,909 Intersegment net sales 42,071 28,693 65,325 16,559 — 152,648 Segment operating profit 43,054 35,830 58,434 11,542 (19,733) 129,127 |
FAIR VALUE - Asset Measured at
FAIR VALUE - Asset Measured at Fair Value (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2017 | Sep. 24, 2016 | |
Fixed Income | Restricted Investments | ||
Fair Value | ||
Securities transferred to collateral trust account | $ 4,100 | |
Securities purchased and held in the collateral trust account | 3,800 | |
Estimate of Fair Value Measurement | Recurring | ||
Fair Value | ||
Investments at fair value | 19,765 | $ 11,439 |
Assets at fair value | 19,765 | 11,439 |
Estimate of Fair Value Measurement | Recurring | Money market funds | ||
Fair Value | ||
Investments at fair value | 477 | 196 |
Estimate of Fair Value Measurement | Recurring | Fixed Income | ||
Fair Value | ||
Investments at fair value | 8,204 | 4,384 |
Estimate of Fair Value Measurement | Recurring | Equity | ||
Fair Value | ||
Investments at fair value | 10,194 | 5,592 |
Estimate of Fair Value Measurement | Recurring | Mutual Funds | ||
Fair Value | ||
Investments at fair value | 890 | 1,267 |
Estimate of Fair Value Measurement | Recurring | Domestic stock funds | ||
Fair Value | ||
Investments at fair value | 335 | 760 |
Estimate of Fair Value Measurement | Recurring | International stock funds | ||
Fair Value | ||
Investments at fair value | 87 | 70 |
Estimate of Fair Value Measurement | Recurring | Target funds | ||
Fair Value | ||
Investments at fair value | 260 | 234 |
Estimate of Fair Value Measurement | Recurring | Bond funds | ||
Fair Value | ||
Investments at fair value | 208 | 203 |
Estimate of Fair Value Measurement | Recurring | Quoted Prices in Active Markets (Level 1) | ||
Fair Value | ||
Investments at fair value | 12,447 | 8,972 |
Assets at fair value | 12,447 | 8,972 |
Estimate of Fair Value Measurement | Recurring | Quoted Prices in Active Markets (Level 1) | Money market funds | ||
Fair Value | ||
Investments at fair value | 64 | 64 |
Estimate of Fair Value Measurement | Recurring | Quoted Prices in Active Markets (Level 1) | Fixed Income | ||
Fair Value | ||
Investments at fair value | 1,299 | 2,049 |
Estimate of Fair Value Measurement | Recurring | Quoted Prices in Active Markets (Level 1) | Equity | ||
Fair Value | ||
Investments at fair value | 10,194 | 5,592 |
Estimate of Fair Value Measurement | Recurring | Quoted Prices in Active Markets (Level 1) | Mutual Funds | ||
Fair Value | ||
Investments at fair value | 890 | 1,267 |
Estimate of Fair Value Measurement | Recurring | Quoted Prices in Active Markets (Level 1) | Domestic stock funds | ||
Fair Value | ||
Investments at fair value | 335 | 760 |
Estimate of Fair Value Measurement | Recurring | Quoted Prices in Active Markets (Level 1) | International stock funds | ||
Fair Value | ||
Investments at fair value | 87 | 70 |
Estimate of Fair Value Measurement | Recurring | Quoted Prices in Active Markets (Level 1) | Target funds | ||
Fair Value | ||
Investments at fair value | 260 | 234 |
Estimate of Fair Value Measurement | Recurring | Quoted Prices in Active Markets (Level 1) | Bond funds | ||
Fair Value | ||
Investments at fair value | 208 | 203 |
Estimate of Fair Value Measurement | Recurring | Prices with Other Observable Inputs (Level 2) | ||
Fair Value | ||
Investments at fair value | 7,318 | 2,467 |
Assets at fair value | 7,318 | 2,467 |
Estimate of Fair Value Measurement | Recurring | Prices with Other Observable Inputs (Level 2) | Money market funds | ||
Fair Value | ||
Investments at fair value | 413 | 132 |
Estimate of Fair Value Measurement | Recurring | Prices with Other Observable Inputs (Level 2) | Fixed Income | ||
Fair Value | ||
Investments at fair value | $ 6,905 | $ 2,335 |
FAIR VALUE - Available for Sale
FAIR VALUE - Available for Sale Investment Portfolio (Details) - Ardellis Insurance Ltd. $ in Thousands | 9 Months Ended |
Sep. 30, 2017USD ($) | |
Available-for-sale securities | |
Cost | $ 17,293 |
Unrealized Gain (Loss) | 1,105 |
Fair Value | 18,398 |
Interest Income | |
Available-for-sale securities | |
Realized Gain | 185 |
Fixed Income | |
Available-for-sale securities | |
Cost | 8,170 |
Unrealized Gain (Loss) | 34 |
Fair Value | 8,204 |
Equity | |
Available-for-sale securities | |
Cost | 9,123 |
Unrealized Gain (Loss) | 1,071 |
Fair Value | $ 10,194 |
REVENUE RECOGNITION (Details)
REVENUE RECOGNITION (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 24, 2016 | Sep. 30, 2017 | Sep. 24, 2016 | Dec. 31, 2016 | |
REVENUE RECOGNITION | |||||
Contracts Revenue | $ 36,600 | $ 31,900 | $ 99,600 | $ 95,200 | |
Construction contracts completion term, minimum | 6 months | ||||
Construction contracts completion term, maximum | 18 months | ||||
Cost and Earnings in Excess of Billings | 2,594 | 2,788 | $ 2,594 | 2,788 | $ 2,573 |
Billings in Excess of Cost and Earnings | $ 4,802 | $ 6,222 | $ 4,802 | $ 6,222 | $ 4,748 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 24, 2016 | Sep. 30, 2017 | Sep. 24, 2016 | |
Numerator: | ||||
Net earnings attributable to controlling interest | $ 33,693 | $ 27,819 | $ 88,397 | $ 80,429 |
Adjustment for earnings allocated to non-vested restricted common stock | 656 | 463 | 1,633 | 1,281 |
Net earnings for calculating EPS | $ 33,037 | $ 27,356 | $ 86,764 | $ 79,148 |
Denominator: | ||||
Weighted average shares outstanding (in shares) | 20,474 | 20,402 | 20,481 | 20,360 |
Adjustment for non-vested restricted common stock (in shares) | (399) | (340) | (378) | (324) |
Shares for calculating basic EPS (in shares) | 20,075 | 20,062 | 20,103 | 20,036 |
Effect of dilutive stock options (in shares) | 41 | 33 | 37 | 32 |
Shares for calculating diluted EPS (in shares) | 20,116 | 20,095 | 20,140 | 20,068 |
Net earnings per share | ||||
Basic (USD per share) | $ 1.65 | $ 1.36 | $ 4.32 | $ 3.95 |
Diluted (USD per share) | $ 1.64 | $ 1.36 | $ 4.31 | $ 3.94 |
Antidilutive securities | ||||
Options to purchase shares excluded from computation of EPS (in shares) | 0 | 0 |
EARNINGS PER SHARE - Stock Spli
EARNINGS PER SHARE - Stock Split (Details) shares in Thousands | Oct. 31, 2017 | Sep. 30, 2017$ / sharesshares | Sep. 24, 2016$ / sharesshares | Sep. 30, 2017$ / sharesshares | Sep. 24, 2016$ / sharesshares |
Stock split | |||||
Stock split ratio | 3 | ||||
Pro forma earnings per share | |||||
Shares for calculating basic EPS - Post stock split basis | shares | 60,225 | 60,186 | 60,309 | 60,108 | |
Shares for calculating diluted EPS - Post stock split basis | shares | 60,348 | 60,285 | 60,420 | 60,204 | |
Net earnings per share (post stock split): | |||||
Basic | $ / shares | $ 0.550 | $ 0.450 | $ 1.440 | $ 1.320 | |
Diluted | $ / shares | $ 0.550 | $ 0.450 | $ 1.440 | $ 1.310 |
COMMITMENTS, CONTINGENCIES, A28
COMMITMENTS, CONTINGENCIES, AND GUARANTEES (Details) $ in Millions | Feb. 14, 2014item | May 31, 2016item | Apr. 30, 2016employeeitem | Apr. 30, 2014employee | Sep. 30, 2017USD ($) | Sep. 24, 2016USD ($) |
Loss Contingencies | ||||||
Loss contingency, number of operations served with a federal grand jury subpoena | item | 1 | |||||
Loss contingency, number of employees terminated | employee | 2 | 2 | ||||
Loss contingency, number of employees pleading guilty to charges | employee | 1 | |||||
Number of charges former employee pled guilty | item | 4 | |||||
Number of charges former employee found guilty | item | 4 | |||||
Long-term commitment | ||||||
Outstanding purchase commitments on capital projects | $ 26.1 | |||||
Surety Bonds and Letters of Credit | ||||||
Outstanding letters of credit | $ 26.5 | |||||
Remediation reserves | ||||||
Environmental reserves, discount rate (as a percent) | 0.00% | |||||
Estimated costs to complete future remediation efforts | $ 3.6 | $ 3.4 | ||||
Open Projects | ||||||
Surety Bonds and Letters of Credit | ||||||
Payment and performance bonds outstanding | 8.8 | |||||
Completed Projects | ||||||
Surety Bonds and Letters of Credit | ||||||
Payment and performance bonds outstanding | 1.7 | |||||
Insurance Contracts | ||||||
Surety Bonds and Letters of Credit | ||||||
Outstanding letters of credit | 16.7 | |||||
Revenue Bonds | ||||||
Surety Bonds and Letters of Credit | ||||||
Outstanding letters of credit | 9.8 | |||||
Other Long-term Liabilities | ||||||
Remediation reserves | ||||||
Approximate identification and removal of contaminants costs | $ 0.2 |
BUSINESS COMBINATIONS (Details)
BUSINESS COMBINATIONS (Details) - USD ($) $ in Thousands | May 26, 2017 | Mar. 06, 2017 | Nov. 29, 2016 | Sep. 16, 2016 | Jul. 29, 2016 | Sep. 24, 2016 | Sep. 30, 2017 |
Business Acquisition | |||||||
Repayments of debt of acquiree | $ 92,830 | ||||||
Aggregate acquisitions' revenue | $ 292,100 | ||||||
Aggregate acquisitions' operating profit | $ 5,300 | ||||||
Go Boy Pallets LLLC (Go Boy) | South | |||||||
Business Acquisition | |||||||
Purchase Price | $ 5,042 | ||||||
Intangible Assets | 4,880 | ||||||
Net Tangible Assets | 162 | ||||||
Acquired entity, prior year sales | $ 8,000 | ||||||
Percentage of assets purchased (as a percent) | 100.00% | ||||||
Robbins Manufacturing Co. (Robbins) | South | |||||||
Business Acquisition | |||||||
Purchase Price | $ 31,818 | ||||||
Intangible Assets | 7,533 | ||||||
Net Tangible Assets | 24,285 | ||||||
Acquired entity, prior year sales | $ 86,000 | ||||||
Percentage of assets purchased (as a percent) | 100.00% | ||||||
Quality Hardwood Sales, LLC (Quality) | North | |||||||
Business Acquisition | |||||||
Purchase Price | $ 22,789 | ||||||
Intangible Assets | 14,266 | ||||||
Net Tangible Assets | 8,523 | ||||||
Acquired entity, prior year sales | $ 30,000 | ||||||
Percentage of assets purchased (as a percent) | 100.00% | ||||||
The UBEECO Group Pty. Ltd. (Ubeeco) | All Other | |||||||
Business Acquisition | |||||||
Purchase Price | $ 9,455 | ||||||
Intangible Assets | 7,314 | ||||||
Net Tangible Assets | 2,141 | ||||||
Acquired entity, prior year sales | $ 20,000 | ||||||
Percentage of stock purchase (as a percent) | 100.00% | ||||||
idX Holdings, Inc. (idX) | All Other | |||||||
Business Acquisition | |||||||
Purchase Price | $ 66,691 | ||||||
Purchase price, holdback | 11,337 | ||||||
Cash received | 86,294 | ||||||
Consideration transferred for certain other obligations | 6,536 | ||||||
Intangible Assets | 17,455 | ||||||
Net Tangible Assets | 49,236 | ||||||
Acquired entity, prior year sales | $ 300,000 | ||||||
Percentage of stock purchase (as a percent) | 100.00% | ||||||
Seven D Truss, L.P. | North | |||||||
Business Acquisition | |||||||
Purchase Price | $ 1,246 | ||||||
Intangible Assets | 405 | ||||||
Net Tangible Assets | 841 | ||||||
Acquired entity, prior year sales | $ 4,000 |
SEGMENT REPORTING - NARRATIVE (
SEGMENT REPORTING - NARRATIVE (Details) | Sep. 30, 2017item |
SEGMENT REPORTING | |
Number of markets in which the entity Operates (in markets) | 3 |
SEGMENT REPORTING (Details)
SEGMENT REPORTING (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 24, 2016 | Sep. 30, 2017 | Sep. 24, 2016 | |
Segment Reporting | ||||
Net sales | $ 1,056,586 | $ 826,665 | $ 2,975,091 | $ 2,380,909 |
Segment operating profit | 52,271 | 43,552 | 139,991 | 129,127 |
Intersegment net sales | ||||
Segment Reporting | ||||
Net sales | 106,637 | 50,588 | 289,540 | 152,648 |
Corporate | ||||
Segment Reporting | ||||
Segment operating profit | (4,080) | (3,899) | (12,914) | (19,733) |
North | Operating Segments | ||||
Segment Reporting | ||||
Net sales | 310,384 | 267,156 | 857,858 | 758,066 |
Segment operating profit | 16,697 | 14,630 | 42,921 | 43,054 |
North | Intersegment net sales | ||||
Segment Reporting | ||||
Net sales | 18,897 | 14,318 | 51,859 | 42,071 |
South | Operating Segments | ||||
Segment Reporting | ||||
Net sales | 206,050 | 173,715 | 616,376 | 533,239 |
Segment operating profit | 10,234 | 9,900 | 31,152 | 35,830 |
South | Intersegment net sales | ||||
Segment Reporting | ||||
Net sales | 18,817 | 9,642 | 55,472 | 28,693 |
West | Operating Segments | ||||
Segment Reporting | ||||
Net sales | 378,714 | 335,981 | 1,088,744 | 940,188 |
Segment operating profit | 22,538 | 19,962 | 65,547 | 58,434 |
West | Intersegment net sales | ||||
Segment Reporting | ||||
Net sales | 21,384 | 22,054 | 65,466 | 65,325 |
All Other | Operating Segments | ||||
Segment Reporting | ||||
Net sales | 161,438 | 49,813 | 412,113 | 149,416 |
Segment operating profit | 6,882 | 2,959 | 13,285 | 11,542 |
All Other | Intersegment net sales | ||||
Segment Reporting | ||||
Net sales | $ 47,539 | $ 4,574 | $ 116,743 | $ 16,559 |
INCOME TAXES (Details)
INCOME TAXES (Details) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 24, 2016 | Sep. 30, 2017 | Sep. 24, 2016 | |
INCOME TAXES | ||||
Effective income tax rate | 31.90% | 32.50% | 33.00% | 34.20% |