NEWS RELEASE
- ----------AT THE COMPANY----------
Lynn Afendoulis
Director, Corporate Communications
616/365-1502
FOR IMMEDIATE RELEASE
MONDAY, APRIL 11, 2005
UNIVERSAL FOREST PRODUCTS, INC. REPORTS A 63% INCREASE
IN DILUTED EARNINGS PER SHARE FOR 1ST QUARTER 2005
GRAND RAPIDS, Mich., April 11, 2005 - Universal Forest Products, Inc. (Nasdaq:
UFPI) today announced a strong first quarter, marked by an increase in diluted
earnings per share to $0.49, up 63.3% over diluted earnings per share of $0.30
reported for the same period last year. The Company posted net sales of $537.2
million, up 15.4% over net sales of $465.7 million in the first quarter of 2004.
"In our 50th year, the story of our success continues to be one of strong,
steady growth driven by the hard work of a dedicated workforce," said Universal
CEO and Vice Chairman William G. Currie. "These results also reflect the
strengths of our business model, which relies on diversification for continued
balance and growth."
Overall, the Company posted a sales increase of 15.4%, which includes an
estimated 9% increase in unit sales. The remaining increase in sales was
attributable to higher prices driven by the lumber market.
By market, Universal posted first quarter sales of:
- $177.6 million D-I-Y/retail, down 0.7% over last year;
- $151.9 million in site-built construction, an increase of 32.3% over
last year;
- $111.3 million in industrial, up 17.2% over last year; and
- $96.3 million in manufactured housing, a 25.2% increase over 2004.
MORE...
UNIVERSAL FOREST PRODUCTS, INC.
PAGE 2
"We have not wavered in our commitment to and belief in the manufactured housing
business and it has paid off," Currie said. "We've also emphasized growth in
sales to the modular market and our performance there can be attributed to new
proprietary products and to strong relationships we've forged over many decades.
"Site-built construction and industrial remain strong growth markets for
Universal," Currie added. "As the leading national supplier to both, we're
gaining market share and continuing to consolidate these two large, fragmented
markets."
Sales to the D-I-Y/retail market experienced a decline in unit sales in the
first quarter of 2005 over the same period of 2004, reflecting both the
Company's efforts to create greater balance and diversification in its customer
base and a late spring in the Northeast and Midwest.
Currie noted that earnings from operations increased almost 39%, to $17.4
million in the first quarter 2005 from $12.5 million for the first quarter last
year, which was well in excess of the Company's 9% increase in unit sales.
Earnings in 2004 were affected by operating losses from a framing operation in
the West. That business entity has since been downsized and is operating more
efficiently.
OUTLOOK
The Company anticipates continued growth in its business in 2005 and reaffirms
its annual targets of a 7% to 12% increase in unit sales and a 10% to 15%
increase in net earnings over results reported for 2004.
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,
April 12, 2005. The conference call will be hosted by William G. Currie and will
be available for analysts and institutional investors domestically at (866)
835-8893 or internationally at (703) 639-1409. Use conference call ID #680965.
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.
MORE...
UNIVERSAL FOREST PRODUCTS, INC.
PAGE 3
Celebrating its 50th anniversary, 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 for various industries. Among the company's newest and
fastest-growing ventures are framing services for the site-built sector. In
conjunction with its customers, Universal uses its engineering and manufacturing
expertise, coupled with highly skilled employees, to design and construct
buildings and housing. 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.
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.
PAGE 3
CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED)
FOR THE THREE MONTHS ENDED
MARCH 2005/2004
QUARTER PERIOD YEAR TO DATE
--------------------------------------- ---------------------------------------
(IN THOUSANDS, EXCEPT PER SHARE DATA) 2005 2004 2005 2004
- ---------------------------------------- ------------------ ------------------ ------------------ -----------------
NET SALES $ 537,160 100% $ 465,665 100% $ 537,160 100% $ 465,665 100%
COST OF GOODS SOLD 469,931 87.48 409,304 87.90 469,931 87.48 409,304 87.90
--------- --------- --------- ---------
GROSS PROFIT 67,229 12.52 56,361 12.10 67,229 12.52 56,361 12.10
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES 49,851 9.28 43,840 9.41 49,851 9.28 43,840 9.41
--------- --------- --------- ---------
EARNINGS FROM OPERATIONS 17,378 3.24 12,521 2.69 17,378 3.24 12,521 2.69
OTHER EXPENSE (INCOME)
INTEREST EXPENSE 3,775 0.70 3,631 0.78 3,775 0.70 3,631 0.78
INTEREST INCOME (149) -0.03 (83) -0.02 (149) -0.03 (83) -0.02
NET GAIN ON SALE OF REAL ESTATE AND
INTEREST IN SUBSIDIARY (1,272) -0.24 (369) -0.08 (1,272) -0.24 (369) -0.08
--------- --------- --------- ---------
2,354 0.44 3,179 0.68 2,354 0.44 3,179 0.68
--------- --------- --------- ---------
EARNINGS BEFORE INCOME TAXES
AND MINORITY INTEREST 15,024 2.80 9,342 2.01 15,024 2.80 9,342 2.01
INCOME TAXES 5,759 1.07 3,644 0.78 5,759 1.07 3,644 0.78
--------- --------- --------- ---------
EARNINGS BEFORE MINORITY INTEREST 9,265 1.72 5,698 1.22 9,265 1.72 5,698 1.22
MINORITY INTEREST (36) -0.01 (131) -0.03 (36) -0.01 (131) -0.03
--------- --------- --------- ---------
NET EARNINGS $ 9,229 1.72 $ 5,567 1.20 $ 9,229 1.72 $ 5,567 1.20
========= ========= ========= =========
EARNINGS PER SHARE - BASIC $ 0.51 $ 0.31 $ 0.51 $ 0.31
EARNINGS PER SHARE - DILUTED $ 0.49 $ 0.30 $ 0.49 $ 0.30
WEIGHTED AVERAGE SHARES
OUTSTANDING 18,187 17,961 18,187 17,961
WEIGHTED AVERAGE SHARES
OUTSTANDING WITH COMMON
STOCK EQUIVALENTS 18,972 18,709 18,972 18,709
SUPPLEMENTAL SALES DATA
QUARTER PERIOD YEAR TO DATE
---------------------------------- ------------------------------ ---
MARKET CLASSIFICATION 2005 % 2004 % 2005 % 2004 %
- --------------------- --------- --- -------- --- --------- --- --------- ---
DO-IT-YOURSELF/RETAIL $ 177,622 33% $178,885 38% $ 177,622 33% $ 178,885 38%
SITE-BUILT CONSTRUCTION 151,901 28% 114,842 25% 151,901 28% 114,842 25%
MANUFACTURED HOUSING 96,344 18% 76,975 17% 96,344 18% 76,975 17%
INDUSTRIAL 111,293 21% 94,963 20% 111,293 21% 94,963 20%
--------- --- -------- --- --------- --- --------- ---
TOTAL $ 537,160 100% $465,665 100% $ 537,160 100% $ 465,665 100%
--------- --- -------- --- --------- --- --------- ---
UNIVERSAL FOREST PRODUCTS, INC.
PAGE 4
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
MARCH 2005/2004
(IN THOUSANDS)
ASSETS 2005 2004
- ------------------------------------------------ ---------- ----------
CURRENT ASSETS
Cash and cash equivalents $ 28,396 $ 22,052
Accounts receivable 179,954 206,508
Inventories 286,835 219,204
Other current assets 15,429 6,009
---------- ----------
TOTAL CURRENT ASSETS 510,614 453,773
OTHER ASSETS 8,303 8,523
INTANGIBLE ASSETS, NET 131,108 128,839
PROPERTY, PLANT
AND EQUIPMENT, NET 218,369 211,533
---------- ----------
TOTAL ASSETS $ 868,394 $ 802,668
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY 2005 2004
- ------------------------------------------------ ---------- ----------
CURRENT LIABILITIES
Accounts payable and
accrued liabilities $ 188,786 $ 167,869
Current portion of long-term
debt and capital leases 21,910 6,010
---------- ----------
TOTAL CURRENT LIABILITIES 210,696 173,879
LONG-TERM DEBT AND CAPITAL
LEASES, LESS CURRENT PORTION 251,806 285,682
OTHER LIABILITIES 36,515 31,158
SHAREHOLDERS' EQUITY 369,377 311,949
---------- ----------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $ 868,394 $ 802,668
========== ==========
UNIVERSAL FOREST PRODUCTS, INC.
PAGE 5
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
FOR THE THREE MONTHS ENDED
MARCH 2005/2004
(IN THOUSANDS) 2005 2004
- --------------------------------------------------------------------- ---------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings $ 9,229 $ 5,567
Adjustments to reconcile net earnings to net cash
from operating activities:
Depreciation 7,345 6,672
Amortization of intangibles 544 471
Deferred income taxes 19 20
Minority interest 36 131
Loss on sale of interest in subsidiary - 193
Gain on sale of property, plant and equipment (1,131) (603)
Changes in:
Accounts receivable (28,643) (73,128)
Inventories (73,913) (48,711)
Accounts payable 36,108 37,850
Accrued liabilities and other (6,103) 1,184
---------- ----------
NET CASH FROM OPERATING ACTIVITIES (56,509) (70,354)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant, and equipment (10,604) (7,295)
Acquisitions, net of cash received - (5,360)
Sale of interest in subsidiary - 4,679
Proceeds from sale of property, plant and equipment 2,295 740
Other, net 366 178
---------- ----------
NET CASH FROM INVESTING ACTIVITIES (7,943) (7,058)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net borrowings under revolving credit facilities 66,713 81,516
Repayment of long-term debt (138) (58)
Proceeds from issuance of common stock 1,462 857
Distributions to minority shareholders (536) (125)
Repurchase of common stock - (116)
Other, net 73 (40)
---------- ----------
NET CASH FROM FINANCING ACTIVITIES 67,574 82,034
---------- ----------
NET CHANGE IN CASH AND CASH EQUIVALENTS 3,122 4,622
CASH AND CASH EQUIVALENTS, BEGINNING
OF PERIOD 25,274 17,430
---------- ----------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 28,396 $ 22,052
========== ==========