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Form 8-K UNIVERSAL FOREST PRODUCT For: Jul 15

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July 15, 2015 4:39 PM EDT


 
 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8‑K

CURRENT REPORT
Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): July 15, 2015

Universal Forest Products, Inc.
(Exact name of registrant as specified in its charter)

Michigan
(State or other Jurisdiction of Incorporation)
0-22684
(Commission File Number)
38-1465835
(IRS Employer Identification No.)

2801 East Beltline, NE
Grand Rapids, Michigan
(Address of Principal Executive Offices)
 
49525
(Zip Code)

Registrant's telephone number, including area code: (616) 364-6161

None
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425).
☐
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12).
☐
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)).
☐
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)).


 
 
 
Item 2.02
Results of Operations and Financial Condition
On July 15, 2015, the Registrant issued a press release announcing its financial results for the quarter ended June 27, 2015. A copy of the Registrant’s press release is attached as Exhibit 99(a) to this Current Report.
Item 9.01
Financial Statements, Pro Forma Financial Information, and Exhibits

(c)
Exhibits
 
99(a)
Press Release dated July 15, 2015.
2




 
 
 

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 
UNIVERSAL FOREST PRODUCTS, INC.
 
(Registrant)
 
 
 
Dated: July 15, 2015
By:
/s/ Michael R. Cole
 
 
Michael R. Cole, Chief Financial Officer
 
 
and Treasurer
3
 
 
 


EXHIBIT INDEX

Exhibit Number
Document

99(a)
Press Release dated July 15, 2015.
 
 
4
 
 
 



 
 
 
 
 

Exhibit 99(a)
 

 
news release

---------------AT THE COMPANY---------------
Lynn Afendoulis
Director, Corporate Communications
(616) 365-1502

FOR IMMEDIATE RELEASE
WEDNESDAY, JULY 15, 2015


UFPI reports gains of 19.2 percent in net earnings and 8.5 percent in sales for Q2
Sales gains led by industrial; strong gains also in retail and commercial construction/concrete forming

GRAND RAPIDS, Mich., July 15, 2015 - Universal Forest Products, Inc. (Nasdaq: UFPI) today reported net earnings of $26.0 million for the second quarter of 2015, up 19.2 percent over net earnings of $21.8 million for the same period of 2014. Second-quarter 2015 diluted earnings per share were $1.28, compared to diluted earnings per share of $1.08 for the second quarter of 2014. Net sales of $838.2 million in the second quarter of 2015 represent an increase of 8.5 percent over net sales of $772.8 for the same period of 2014.

Overall unit sales were up 10 percent over 2014, led by a 16.9 percent increase in sales to industrial customers. The Company saw strong sales to retail customers, with an increase of 8.3 percent over the same period last year. Average lumber prices declined nine percent since the first quarter of 2015 and, year-over-year for the second quarter of 2015 were down 12.6 percent, adversely impacting the Company’s selling prices.

“We were pleased with our improvement in gross and operating margins as we continue to enhance and diversify our product offering, allowing us to grow our capabilities and our value to our customers,” said CEO Matthew J. Missad. “These factors, and others, helped us overcome a decline in lumber prices, which hurt our profit margins on treated lumber and other similarly priced products. But our people did an excellent job managing through this challenge.”



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Universal Forest Products, Inc.
Page 2



“These results highlight the strength of our business model, which allows us to withstand adversity in one business market as well as adverse trends in the lumber market and still grow sales and profitability,” Missad added. “They also highlight the strength of our growth strategies, including our focus on sales to the industrial market and on new product development.”

New product sales in the quarter were up more than 22 percent over the second quarter of 2014. By market, the Company posted the following gross sales results:
Retail: $376.2 million, up 8.3 percent over the second quarter of 2014
The Company’s performance in this market benefited from pent-up demand in the busy building season following challenging winter weather, success with new product sales, and growth with independent and big box retailers, the latter of which saw healthy increases in comparable store sales in their most recently reported quarters. The Company anticipates healthy demand through the building season, barring adverse weather conditions and other unforeseen events.
Industrial: $240.0 million, up 16.9 percent over the second quarter of 2014
This follows a first-quarter year-over-year increase of 23 percent, and is indicative of the ongoing opportunity in this market, in which the company sells packaging, material handling and related products for industrial and agricultural customers. The Company’s growth strategies in this market include both wood and alternative materials solutions as well as packaging solutions for existing and new customers.
Construction: $234.6 million, up 1.3 percent over the same period of 2014
The Company saw a 15 percent unit sales increase in its commercial construction and concrete forming business, and unit sales increases of 2 and 3 percent, respectively, in manufactured housing and residential construction. The Company notes that recent mergers and acquisitions in this market are in line with its expectations, and could serve to rationalize capacity.


CONFERENCE CALL
Universal Forest Products will conduct a conference call to discuss information included in this news release and related matters at 8:30 a.m. ET on Thursday, July 16, 2015. The call will be hosted by CEO Matthew J. Missad and CFO Michael Cole, and will be available for analysts and institutional investors domestically at (800) 295-4740 and internationally at (617) 614-3925. Use conference pass code 28727901. The conference call will be available simultaneously and in its entirety to all interested investors and news media through a webcast at http://www.ufpi.com. A replay of the call will be available through August 16, 2015, domestically at (888) 286-8010 and internationally at (617) 801-6888. Use replay pass code 84538911.


-more-





Universal Forest Products, Inc.
Page 3




UNIVERSAL FOREST PRODUCTS, INC.
Universal Forest Products, Inc. is a holding company with subsidiaries throughout North America and in Australia that supply wood, wood composite and other products to three robust markets: retail, construction and industrial. The Company is headquartered in Grand Rapids, Mich., and is celebrating its 60th year in business. For more information about Universal Forest Products, Inc., or its affiliated operations, go to www.ufpi.com.


This press release contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act, as amended, that are based on management’s beliefs, assumptions, current expectations, estimates and projections about the markets we serve, the economy and the Company itself. Words like “anticipates,” “believes,” “confident,” “estimates,” “expects,” “forecasts,” “likely,” “plans,” “projects,” “should,” variations of such words, and similar expressions identify such forward-looking statements. These statements do not guarantee future performance and involve certain risks, uncertainties and assumptions that are difficult to predict with regard to timing, extent, likelihood and degree of occurrence. The Company does not undertake to update forward-looking statements to reflect facts, circumstances, events, or assumptions that occur after the date the forward-looking statements are made. Actual results could differ materially from those included in such forward-looking statements. Investors are cautioned that all forward-looking statements involve risks and uncertainty. Among the factors that could cause actual results to differ materially from forward-looking statements are the following: fluctuations in the price of lumber; adverse or unusual weather conditions; adverse economic conditions in the markets we serve; government regulations, particularly involving environmental and safety regulations; and our ability to make successful business acquisitions. Certain of these risk factors as well as other risk factors and additional information are included in the Company's reports on Form 10-K and 10-Q on file with the Securities and Exchange Commission.






# # #











Universal Forest Products, Inc.
Page 4


CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS AND COMPREHENSIVE INCOME (UNAUDITED)
FOR THE SIX MONTHS ENDED
JUNE 2015/2014
 
 
Quarter Period
 
Year to Date
 
(In thousands, except per share data)
2015
2014
2015
2014
 
NET SALES
$
838,171

100
%
 
$
772,752

100
%
 
$
1,471,195

100
%
 
$
1,326,751

100
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
COST OF GOODS SOLD
725,728

86.6

 
675,764

87.4

 
1,279,170

86.9

 
1,163,750

87.7

 
 
 
 
 
 
 
 
 
 
 
 
 
 
GROSS PROFIT
112,443

13.4

 
96,988

12.6

 
192,025

13.1

 
163,001

12.3

 
 
 
 
 
 
 
 
 
 
 
 
 
 
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
68,431

8.2

 
58,989

7.6

 
130,136

8.8

 
112,899

8.5

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
ANTI-DUMPING DUTY ASSESSMENTS
—

—

 
1,600

0.2

 
—

—

 
1,600

0.1

 
 
 
 
 
 
 
 
 
 
 
 
 
 
NET (GAIN) LOSS ON DISPOSITION AND IMPAIRMENT OF ASSETS
(176
)
—

 
(324
)
—

 
(162
)
—

 
(848
)
(0.1
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
EARNINGS FROM OPERATIONS
44,188

5.3

 
36,723

4.8

 
62,051

4.2

 
49,350

3.7

 
 
 
 
 
 
 
 
 
 
 
 
 
 
OTHER EXPENSE, NET
1,238

0.1

 
686

0.1

 
2,193

0.1

 
1,411

0.1

 
 
 
 
 
 
 
 
 
 
 
 
 
 
EARNINGS BEFORE INCOME TAXES
42,950

5.1

 
36,037

4.7

 
59,858

4.1

 
47,939

3.6

 
 
 
 
 
 
 
 
 
 
 
 
 
 
INCOME TAXES
16,066

1.9

 
13,588

1.8

 
22,170

1.5

 
17,824

1.3

 
 
 
 
 
 
 
 
 
 
 
 
 
 
NET EARNINGS
26,884

3.2

 
22,449

2.9

 
37,688

2.6

 
30,115

2.3

 
 
 
 
 
 
 
 
 
 
 
 
 
 
LESS NET EARNINGS ATTRIBUTABLE TO NONCONTROLLING INTEREST
(908
)
(0.1
)
 
(660
)
(0.1
)
 
(1,550
)
(0.1
)
 
(1,111
)
(0.1
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NET EARNINGS ATTRIBUTABLE TO CONTROLLING INTEREST
$
25,976

3.1

 
$
21,789

2.8

 
$
36,138

2.5

 
$
29,004

2.2

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
EARNINGS PER SHARE - BASIC
$
1.29

 
 
$
1.08

 
 
$
1.79

 
 
$
1.44

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
EARNINGS PER SHARE - DILUTED
$
1.28

 
 
$
1.08

 
 
$
1.79

 
 
$
1.44

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
COMPREHENSIVE INCOME
26,358

 
 
22,960

 
 
36,159

 
 
29,932

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
LESS COMPREHENSIVE INCOME ATTRIBUTABLE TO NONCONTROLLING INTEREST
(636
)
 
 
(719
)
 
 
(1,133
)
 
 
(1,077
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
COMPREHENSIVE INCOME ATTRIBUTABLE TO CONTROLLING INTEREST
$
25,722

 
 
$
22,241

 
 
$
35,026

 
 
$
28,855

 
 
SUPPLEMENTAL SALES DATA
 
 
 
 
 
 
 
 
Quarter Period
 
Year to Date
Market Classification
2015
2014
%
 
2015
2014
%
Retail
$
376,219

$
347,371

8
%
 
606,104

548,355

11
%
Industrial
240,067

205,334

17
%
 
451,228

376,985

20
%
Construction
234,555

231,507

1
%
 
435,278

421,069

3
%
Total Gross Sales
850,841

784,212

8
%
 
1,492,610

1,346,409

11
%
Sales Allowances
(12,670
)
(11,460
)
 
 
(21,415
)
(19,658
)
 
Total Net Sales
$
838,171

$
772,752

 
 
$
1,471,195

$
1,326,751

 


Universal Forest Products, Inc.
Page 5


CONSOLIDATED CONDENSED BALANCE SHEETS (UNAUDITED)
JUNE 2015/2014
(In thousands)
 
 
 
 
 
ASSETS
2015
2014
LIABILITIES AND EQUITY
2015
2014
 
 
 
 
 
 
CURRENT ASSETS
 
 
CURRENT LIABILITIES
 
 
    Cash and cash equivalents
 $ 24,756

$
—

   Cash Overdraft
 $ 21,933

$
13,659

    Restricted cash
               710

720

   Accounts payable
        114,354

107,653

    Accounts receivable
        302,538

286,422

   Accrued liabilities
          97,962

83,086

    Inventories
        330,235

277,789

 
 
 
    Other current assets
          21,205

26,469

 
 
 
 
 
 
 
 
 
TOTAL CURRENT ASSETS
679,444

591,400

TOTAL CURRENT LIABILITIES
234,249

204,398

 
 
 
 
 
 
OTHER ASSETS
9,986

13,669

LONG-TERM DEBT AND
 
 
INTANGIBLE ASSETS, NET
192,505

169,357

CAPITAL LEASE OBLIGATIONS
        122,303

95,094

PROPERTY, PLANT
 
 
OTHER LIABILITIES
50,302

42,652

    AND EQUIPMENT, NET
        257,731

247,453

EQUITY
732,812

679,735

 
 
 
 
 
 
 
 
 
 
 
 
TOTAL ASSETS
$
1,139,666

$
1,021,879

TOTAL LIABILITIES AND EQUITY
$
1,139,666

$
1,021,879




























Universal Forest Products, Inc.
Page 6


CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)
FOR THE SIX MONTHS ENDED
JUNE 2015/2014
(In thousands)
2015
2014
CASH FLOWS FROM OPERATING ACTIVITIES:
 
 
Net earnings
$
37,688

$
30,115

Adjustments to reconcile net earnings attributable to controlling interest
 
 
  to net cash from operating activities:
 
 
      Depreciation
18,406

15,644

      Amortization of intangibles
1,888

1,194

      Expense associated with share-based compensation arrangements
874

932

      Excess tax benefits from share-based compensation arrangements
(33
)
—

      Expense associated with stock grant plans
53

58

      Deferred income taxes (credit)
3

46

      Equity in earnings of investee
(195
)
(129
)
      Net (gain) or loss on sale of property, plant and equipment
(162
)
(931
)
      Changes in:
 
 
        Accounts receivable
(104,929
)
(105,695
)
        Inventories
9,806

10,776

        Accounts payable and cash overdraft
45,798

47,343

        Accrued liabilities and other
27,625

23,451

          NET CASH FROM OPERATING ACTIVITIES
36,822

22,804

 
 
 
CASH FLOWS FROM INVESTING ACTIVITIES:
 
 
Purchases of property, plant, and equipment
(27,756
)
(20,100
)
Proceeds from sale of property, plant and equipment
1,085

1,754

Acquisitions, net of cash received
(2,584
)
(7,135
)
Purchases of noncontrolling interest
(1,256
)
—

Advances of notes receivable
(3,083
)
(3,287
)
Collections of notes receivable and related interest
7,059

888

Cash restricted as to use
(305
)
—

Other, net
(58
)
(135
)
          NET CASH FROM INVESTING ACTIVITIES
(26,898
)
(28,015
)
 
 
 
CASH FLOWS FROM FINANCING ACTIVITIES:
 
 
Borrowings under revolving credit facilities
259,734

190,301

Repayments under revolving credit facilities
(235,993
)
(179,907
)
Debt issuance costs
(9
)
(9
)
Proceeds from issuance of common stock
725

201

Dividends paid to shareholders
(8,050
)
(4,214
)
Distributions to noncontrolling interest
(1,250
)
(1,101
)
Repurchase of common stock
(78
)
—

Excess tax benefits from share-based compensation arrangements
33

—

Effect of exchange rate changes on cash
15,112

5,271

 
 
 
Effect of exchange rate changes on cash
(280
)
(60
)
NET CHANGE IN CASH AND CASH EQUIVALENTS
24,756

—

 
 
 
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD
—

—

 
 
 
CASH AND CASH EQUIVALENTS, END OF PERIOD
$
24,756

—

 
 
 
SUPPLEMENTAL INFORMATION:
 
 
     Interest paid
$
2,430

$
2,155

     Income taxes paid
1,375

6,532





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