NEWS RELEASE EXHIBIT 99(a)
- -------AT THE COMPANY------- -------FLEISHMAN HILLARD-------
Lynn Afendoulis Jeremy Skule
Director of Public Affairs Vice President
616/364-6161 212/453-2245
FOR IMMEDIATE RELEASE
MONDAY, OCTOBER 11, 2004
UNIVERSAL POSTS ANOTHER STRONG QUARTER; REPORTS 20% INCREASE IN NET EARNINGS
THE COMPANY RAISES ITS TARGETED RANGE FOR DILUTED EARNINGS PER SHARE GROWTH
TO 12% TO 15% FOR THE YEAR
Grand Rapids, MI, October 11, 2004 -- Universal Forest Products, Inc. (NASDAQ:
UFPI) today announced record results for the third quarter, including a 20%
increase in net earnings. Net earnings for the third quarter 2004 were $14.6
million, compared to net earnings of $12.2 million for the same period in 2003.
For the year-to-date 2004, net earnings were $39.9 million, an increase of 18%
over year-to-date net earnings of $33.9 million in 2003.
Universal reported net sales for the quarter of $709.3 million, a 32.3% increase
over net sales of $536.3 million in the third quarter of 2003. Net sales for the
first nine months of 2004 were $1.92 billion, a 32.8% increase over net sales of
$1.44 billion for the same period in 2003. The higher lumber market accounted
for 21% of the net sales increase for the third quarter 2004 and for 22% of the
2004 year-to-date net sales increase.
"We continue to successfully execute our growth strategy, thanks to the
determination of the people of Universal, who are focused on the Company's
goals," said CEO and Vice Chairman William G. Currie.
"These numbers are the result of hard work and determination -- the very
qualities that have spurred Universal's success for nearly 50 years," he added.
The Company produced significant year-over-year sales increases of 74% and 52%
in its site-built construction and industrial markets, respectively. Both are
markets in which Universal sees strong opportunity for continuing growth.
"Although we enjoy leadership positions in these arenas, we believe there's a
tremendous opportunity to expand market share and we'll continue to leverage our
strengths to grow in these fragmented markets," he said.
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UNIVERSAL FOREST PRODUCTS, INC.
PAGE 2
In addition, Currie expressed optimism for the growing modular housing segment
of the manufactured housing market. "We have some exciting new products that are
allowing manufacturers to enhance and customize their homes, and that means
opportunity for Universal," Currie said.
He noted that D-I-Y sales remain soft due to increases in lumber costs, which
may be prompting homeowners to delay improvement projects; the hurricanes that
effectively put a halt to improvement projects during the quarter in Florida and
the Southeastern United States; and the higher cost of treated wood due to
industry changes in the treating compounds, which may be affecting consumers'
purchasing decisions.
Following are Universal's third-quarter 2004 sales by market:
o $280.7 million in D-I-Y/retail, an increase of 7.2% from the same period last
year;
o $194.6 million in site-built construction, an increase of 73.8% over
last year;
o $127.4 million in industrial/other, a 51.5% increase over last
year; and
o $106.5 million in manufactured housing, a 35.9% increase over last
year.
Based on the strength of its year-to-date results, the Company raised its
targeted range for earnings per share growth to between 12% and 15% (previously
it was between 10% and 14%). The Company also reaffirmed its unit sales growth
targeted range of between 10% and 14% for the year.
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,
Oct. 12, 2004. The conference call will be hosted by William G. Currie and will
be available for analysts and institutional investors domestically at (866)
814-1933 or internationally at (703) 639-1365. Use conference call ID #570112.
The conference call will be available simultaneously, and in its entirety, to
all interested investors and news media through a webcast at www.ufpi.com.
Universal Forest Products markets, manufactures, and engineers wood and
wood-alternative 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, wood and
composite components for various industries. Among the Company's newest and
fastest-growing ventures are framing and installation services for the
site-built and retail sectors. In conjunction with its customers, Universal uses
its engineering and manufacturing expertise, coupled with highly skilled
employees, to design and construct buildings and decks. For information about
Universal Forest Products on the Internet, please visit the Company's web site
at www.ufpi.com, or call 888-Buy-UFPI.
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UNIVERSAL FOREST PRODUCTS, INC.
PAGE 3
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.
HIGHLIGHTS TO FOLLOW
UNIVERSAL FOREST PRODUCTS, INC.
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CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED)
FOR THE NINE MONTHS ENDED
SEPTEMBER 2004/2003
QUARTER PERIOD YEAR TO DATE
(IN THOUSANDS, EXCEPT PER SHARE DATA) 2004 2003 2004 2003
-------------- ------------- --------------- -----------
NET SALES $ 709,294 100% $536,278 100% $ 1,917,527 100% $ 1,444,360 100%
COST OF GOODS SOLD 625,502 88.19 463,715 86.47 1,684,553 87.85 1,241,251 85.94
-------------- ------------- --------------- ------------
GROSS PROFIT 83,792 11.81 72,563 13.53 232,974 12.15 203,109 14.06
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES 54,604 7.70 48,424 9.03 154,615 8.06 135,309 9.37
-------------- ------------- --------------- ------------
EARNINGS FROM OPERATIONS 29,188 4.12 24,139 4.50 78,359 4.09 67,800 4.69
OTHER EXPENSE (INCOME)
INTEREST EXPENSE 3,641 0.51 3,526 0.66 11,052 0.58 11,271 0.78
INTEREST INCOME (39) -0.01 (2) 0.00 (224) -0.01 (133) -0.01
NET GAIN ON SALE OF REAL ESTATE AND
INTEREST IN SUBSIDIARY - 0.00 - 0.00 (944) -0.05 - 0.00
-------------- ------------- --------------- -----------
3,602 0.51 3,524 0.66 9,884 0.52 11,138 0.77
-------------- ------------- --------------- ----------
EARNINGS BEFORE INCOME TAXES
AND MINORITY INTEREST 25,586 3.61 20,615 3.84 68,475 3.57 56,662 3.92
INCOME TAXES 9,261 1.31 7,715 1.44 25,550 1.33 20,964 1.45
-------------- ------------- --------------- -----------
EARNINGS BEFORE MINORITY INTEREST 16,325 2.30 12,900 2.41 42,925 2.24 35,698 2.47
MINORITY INTEREST (1,699) -0.24 (695) -0.13 (2,976) -0.16 (1,831) -0.13
-------------- ------------- --------------- -----------
NET EARNINGS $ 14,626 2.06 $ 12,205 2.28 $ 39,949 2.08 $ 33,867 2.34
============== ============= =============== ===========
EARNINGS PER SHARE - BASIC $ 0.81 $ 0.69 $ 2.22 $ 1.91
EARNINGS PER SHARE - DILUTED $ 0.78 $ 0.66 $ 2.13 $ 1.85
WEIGHTED AVERAGE SHARES
OUTSTANDING 18,083 17,765 18,015 17,745
WEIGHTED AVERAGE SHARES
OUTSTANDING WITH COMMON
STOCK EQUIVALENTS 18,784 18,425 18,716 18,290
SUPPLEMENTAL SALES DATA
QUARTER PERIOD YEAR TO DATE
--------------------------------------- ------------------------------------------------
MARKET CLASSIFICATION 2004 % 2003 % 2004 % 2003 %
--------- ---- --------- ---- ------------ ---- ----------- ----
Do-It-Yourself/Retail $ 280,700 40% $261,812 49% $ 804,188 42% $ 720,311 50%
SITE-BUILT CONSTRUCTION 194,643 27% 111,980 21% 479,808 25% 290,225 20%
MANUFACTURED HOUSING 106,555 15% 78,394 14% 286,925 15% 204,863 14%
INDUSTRIAL AND OTHER 127,396 18% 84,092 16% 346,606 18% 228,961 16%
--------- ---- --------- ---- ------------ ---- ----------- ----
TOTAL $ 709,294 100% $536,278 100% $1,917,527 100% $ 1,444,360 100%
UNIVERSAL FOREST PRODUCTS, INC.
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CONSOLIDATED BALANCE SHEETS (UNAUDITED)
SEPTEMBER 2004/2003
(IN THOUSANDS)
LIABILITIES AND
ASSETS 2004 2003 SHAREHOLDERS' EQUITY 2004 2003
--------- --------- ----------------------------- --------- --------
CURRENT ASSETS CURRENT LIABILITIES
Cash and cash equivalents $ 19,285 $ 15,340 Notes payable $ - $ 645
Accounts receivable 251,045 157,768 Accounts payable and
Inventories 206,644 160,955 accrued liabilities 205,221 160,344
Other current assets 10,036 7,795 Current portion of long-term
debt and capital leases 527 6,263
--------- ---------
TOTAL CURRENT ASSETS 487,010 341,858
--------- --------
TOTAL CURRENT LIABILITIES 205,748 167,252
OTHER ASSETS 6,906 5,679
INTANGIBLE ASSETS, NET 132,285 131,545 LONG-TERM DEBT AND CAPITAL
LEASES, LESS CURRENT PORTION 247,978 195,833
PROPERTY, PLANT OTHER LIABILITIES 34,303 31,123
AND EQUIPMENT, NET 209,240 214,337
--------- ---------
SHAREHOLDERS' EQUITY 347,412 299,211
--------- --------
TOTAL LIABILITIES AND
TOTAL ASSETS $ 835,441 $ 693,419 SHAREHOLDERS' EQUITY $ 835,441 $693,419
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UNIVERSAL FOREST PRODUCTS, INC.
PAGE 6
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
FOR THE NINE MONTHS ENDED
SEPTEMBER 2004/2003
(IN THOUSANDS) 2004 2003
- ------------------------------------- --------- ---------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings $ 39,949 $ 33,867
Adjustments to reconcile net earnings to net cash
from operating activities:
Depreciation 20,418 18,702
Amortization of intangibles 1,760 1,519
Deferred income taxes (90) (1,301)
Minority interest 2,976 1,831
Loss on sale of interest in subsidiary 193 --
(Gain) Loss on sale or impairment of property, plant and equipment (432) 918
Changes in:
Accounts receivable (111,925) (53,545)
Inventories (36,152) 5,051
Accounts payable 39,225 37,717
Accrued liabilities and other 30,877 23,145
--------- ---------
NET CASH FROM OPERATING ACTIVITIES (13,201) 67,904
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant, and equipment (25,062) (33,349)
Acquisitions, net of cash received (10,075) (787)
Sale of interest in subsidiary 4,679 --
Proceeds from sale of property, plant and equipment 3,469 6,104
Insurance proceeds 2,000 --
Other, net 1,567 2,909
--------- ---------
NET CASH FROM INVESTING ACTIVITIES (23,422) (25,123)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net (repayments) borrowings under revolving credit facilities and notes payable 43,152 (36,884)
Repayment of long-term debt (6,352) (6,150)
Proceeds from issuance of common stock 2,194 1,719
Distributions to minority shareholder (125) (833)
Dividends paid to shareholders (897) (798)
Repurchase of common stock (129) (2,029)
Other, net 635 --
--------- ---------
NET CASH FROM FINANCING ACTIVITIES 38,478 (44,975)
--------- ---------
NET CHANGE IN CASH AND CASH EQUIVALENTS 1,855 (2,194)
CASH AND CASH EQUIVALENTS, BEGINNING
OF PERIOD 17,430 17,534
--------- ---------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 19,285 $ 15,340
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