EXHIBIT 99(a)
NEWS RELEASE
- ---------AT THE COMPANY---------- ---------FLEISHMAN HILLARD---------
Lynn Afendoulis Tom Smith
Director of Public Affairs Vice President
616/364-6161 212/453-2240
FOR IMMEDIATE RELEASE
MONDAY, JULY 14, 2003
UNIVERSAL FOREST PRODUCTS, INC. SUPPORTS CONFIDENCE WITH RECORD RESULTS IN
SECOND QUARTER
NET SALES RISE 9.4% TO $552.5 MILLION; DILUTED EARNINGS PER SHARE
JUMP 14.6% TO $0.94
GRAND RAPIDS, MI., July 14, 2003 - Universal Forest Products (Nasdaq: UFPI)
today announced record net sales and record earnings per share for the second
quarter of 2003.
Net sales totaled $552.5 million for the second quarter of 2003, a 9.4% increase
over net sales of $504.9 million reported for the same period last year. Net
sales for the first six months of 2003 were $908.1 million, a 7.3% increase over
sales of $846.6 million for the same period of 2002.
Diluted earnings per share for the quarter were $0.94, a 14.6% increase over
diluted earnings per share of $0.82 for the same period last year. Diluted
earnings per share for the year-to-date were $1.19, a 4.4% increase over 2002
year-to-date diluted earnings per share of $1.14.
"In March, we expressed optimism for the quarters ahead and we delivered," said
CEO William G. Currie. "We demonstrated the strength of our strategies and
systems and the power of having the best, most innovative employees in the
workplace. They are the reason for our success."
Inclement weather continued to be a factor in the site-built and DIY industries
with portions of the Southeast posting their wettest springs ever and record
rainfall elsewhere in the Northeast. However, that was partially mitigated by
the positive effects low interest rates have had on the construction and home
improvement markets.
"Our performance largely is a result of our focus on new five-year goals that
call for us to substantially grow our sales and profitability," Currie said. "We
pride ourselves on doing what we say we're going to do and hitting our goals.
And our people are just getting started on this aggressive new initiative."
MORE...
UNIVERSAL FOREST PRODUCTS, INC.
PAGE 2
By market, Universal posted second quarter sales of:
- $302.6 million D-I-Y/retail, up 14.3% over the same quarter last year;
- $101.4 million in site-built construction, an increase of 14.7% over
last year;
- $78.2 million in industrial/other, up 10.4% over last year; and
- $70.2 million in manufactured housing, a 13.4% decrease over last year
(despite a decrease in industry production of approximately 27%).
OUTLOOK
While the company beat its expectations for the second quarter of 2003 and
remains optimistic about the rest of the year, it is adjusting the top end of
its targets from 12% to 10% for both annual sales growth and diluted earnings
per share to reflect the effects of weather on the first quarter. The company
now estimates it will achieve annual sales growth of 7% to 10% and diluted
earnings per share growth of 7% to 10% for 2003.
Universal Forest Products will conduct a conference call to discuss information
included in this news release and related matters at 11:00 a.m. EDT on Tuesday,
July 15, 2003. The conference call will be hosted by William G. Currie and will
be available for analysts and institutional investors domestically at (800)
960-1012 or internationally at (952) 556-2834. Use conference call ID #186603.
The conference call will be available simultaneously, and in its entirety, to
all interested investors and news media through a web cast at www.ufpi.com.
Universal Forest Products markets, manufactures, and engineers products for
D-I-Y retail home centers, structural lumber products for the manufactured
housing industry, engineered wood components for the site-built construction
market and specialty wood packaging for various industries.
For information about Universal Forest Products on the Internet, please contact
the Company's web site at www.ufpi.com, or call 888-Buy-UFPI.
Included in this report are certain forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended. Such forward-looking
statements are based on the beliefs of the Company's management as well as on
assumptions made by and information currently available to the Company at the
time such statements were 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 are the following: Adverse
lumber market trends, competitive activity, negative economic trends, government
regulations, and weather. These risk factors and additional information are
included in the company's reports on Form 10K and 10Q on file with the
Securities and Exchange Commission.
FINANCIAL HIGHLIGHTS TO FOLLOW
UNIVERSAL FOREST PRODUCTS, INC.
PAGE 3
CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED)
FOR THE SIX MONTHS ENDED
JUNE 2003/2002
QUARTER PERIOD YEAR TO DATE
-------------------------------------------- ---------------------------------------------
(IN THOUSANDS, EXCEPT PER SHARE DATA) 2003 2002 2003 2002
--------------------- --------------------- --------------------- ----------------------
NET SALES $ 552,463 100% $ 504,944 100% $ 908,082 100% $ 846,600 100%
COST OF GOODS SOLD 473,721 85.75 436,321 86.41 777,536 85.62 726,700 85.84
-------------- ------------- ------------- -------------
GROSS PROFIT 78,742 14.25 68,623 13.59 130,546 14.38 119,900 14.16
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES 46,697 8.45 41,345 8.19 86,885 9.57 79,143 9.35
-------------- ------------- ------------- -------------
EARNINGS FROM OPERATIONS 32,045 5.80 27,278 5.40 43,661 4.81 40,757 4.81
INTEREST EXPENSE 3,958 0.72 3,047 0.60 7,745 0.85 5,955 0.70
INTEREST REVENUE (84) -0.02 (52) -0.01 (131) -0.01 (165) -0.02
GAIN ON SALE OF ASSETS - 0.00 (1,082) -0.21 - 0.00 (1,082) -0.13
-------------- ------------- ------------- -------------
3,874 0.70 1,913 0.38 7,614 0.84 4,708 0.56
-------------- ------------- ------------- -------------
EARNINGS BEFORE INCOME TAXES
AND MINORITY INTEREST 28,171 5.10 25,365 5.02 36,047 3.97 36,049 4.26
INCOME TAXES 10,458 1.89 9,400 1.86 13,249 1.46 13,373 1.58
-------------- ------------- ------------- -------------
EARNINGS BEFORE MINORITY INTEREST 17,713 3.21 15,965 3.16 22,798 2.51 22,676 2.68
MINORITY INTEREST (551) -0.10 (611) -0.12 (1,136) -0.13 (1,240) -0.15
-------------- ------------- ------------- -------------
NET EARNINGS $ 17,162 3.11 $15,354 3.04 $ 21,662 2.39 $ 21,436 2.53
============== ============= ============= =============
EARNINGS PER SHARE - BASIC $ 0.97 $ 0.86 $ 1.22 $ 1.19
EARNINGS PER SHARE - DILUTED $ 0.94 $ 0.82 $ 1.19 $ 1.14
WEIGHTED AVERAGE SHARES
OUTSTANDING 17,741 17,884 17,735 18,047
WEIGHTED AVERAGE SHARES
OUTSTANDING WITH COMMON
STOCK EQUIVALENTS 18,193 18,705 18,222 18,865
SUPPLEMENTAL SALES DATA
QUARTER PERIOD YEAR TO DATE
------------------------------------------ ---------------------------------------------
MARKET CLASSIFICATION 2003 % 2002 % 2003 % 2002 %
- --------------------- ----- - ----- - ----- - ----- -
DO-IT-YOURSELF/RETAIL $ 302,613 55% $264,656 52% $ 459,646 50% $ 411,420 48%
SITE-BUILT CONSTRUCTION 101,433 18% 88,398 18% 178,137 20% 156,987 19%
MANUFACTURED HOUSING 70,208 13% 81,040 16% 127,569 14% 148,401 18%
INDUSTRIAL AND OTHER 78,209 14% 70,850 14% 142,730 16% 129,792 15%
----------- ------ ----------- ------- ----------- ------- ------------- -------
TOTAL $ 552,463 100% $504,944 100% $ 908,082 100% $ 846,600 100%
UNIVERSAL FOREST PRODUCTS, INC.
PAGE 4
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
JUNE 2003/2002
(IN THOUSANDS)
LIABILITIES AND
ASSETS 2003 2002 SHAREHOLDERS' EQUITY 2003 2002
- -----------------------------------------------------------------------------------------------------------------------------------
CURRENT ASSETS CURRENT LIABILITIES
Cash and cash equivalents $ 16,139 $ 18,020 Notes payable $ 1,679 $ 2,001
Accounts receivable 200,033 178,017 Accounts payable and
Inventories 166,742 137,999 accrued liabilities 157,801 140,699
Other current assets 4,944 3,425 Current portion of long-term
debt and capital leases 6,271 19,025
----------- --------------
TOTAL CURRENT ASSETS 387,858 337,461
----------- -------------
TOTAL CURRENT LIABILITIES 165,751 161,725
OTHER ASSETS 6,401 6,334
INTANGIBLE ASSETS 131,858 125,583 LONG-TERM DEBT AND CAPITAL
LEASES, LESS CURRENT PORTION 255,975 219,675
PROPERTY, PLANT OTHER LIABILITIES 29,819 23,679
AND EQUIPMENT, NET 211,277 188,677
----------- --------------
SHAREHOLDERS' EQUITY 285,849 252,976
----------- -------------
TOTAL LIABILITIES AND
TOTAL ASSETS $ 737,394 658,055 SHAREHOLDERS' EQUITY $ 737,394 $ 658,055
=========== ============== =========== =============
UNIVERSAL FOREST PRODUCTS, INC.
PAGE 5
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
FOR THE SIX MONTHS ENDED
JUNE 2003/2002
(IN THOUSANDS) 2003 2002
- -----------------------------------------------------------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings $ 21,662 $ 21,436
Adjustments to reconcile net earnings to net cash
from operating activities:
Depreciation 12,202 11,322
Amortization of intangibles 1,033 587
Deferred income taxes (1,438) (251)
Loss on sale or impairment of property, plant and equipment 640 (949)
Changes in:
Accounts receivable (94,237) (89,290)
Inventories (736) (15,194)
Accounts payable 52,039 43,027
Accrued liabilities and other 11,755 9,598
-------- --------
NET CASH FROM OPERATING ACTIVITIES 2,920 (19,714)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant, and equipment (20,689) (13,481)
Purchases of licensing agreements (150) (2,000)
Acquisitions, net of cash received (187) (359)
Proceeds from sale of property, plant and equipment 1,147 2,545
Other 1,961 1,094
-------- --------
NET CASH FROM INVESTING ACTIVITIES (17,918) (12,201)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net borrowings under revolving credit facilities and notes payable 26,437 71,827
Repayment of long-term debt (6,167) (7,557)
Proceeds from issuance of common stock 873 716
Distributions to minority shareholder (633) (585)
Dividends paid to shareholders (798) (806)
Repurchase of common stock (2,029) (36,547)
-------- --------
NET CASH FROM FINANCING ACTIVITIES 17,683 27,048
-------- --------
NET CHANGE IN CASH AND CASH EQUIVALENTS 2,685 (4,867)
CASH AND CASH EQUIVALENTS, BEGINNING
OF PERIOD 13,454 22,887
-------- --------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 16,139 $ 18,020
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