UFPI reports record first-quarter sales, net earnings and EBITDA
- Unit sales up 7 percent, gross profits up 18 percent and EBITDA up 25 percent - - Semiannual dividend increased 11 percent -
GRAND RAPIDS, Mich., April 24, 2019 (GLOBE NEWSWIRE) -- Universal Forest Products, Inc. (Nasdaq: UFPI) today announced record net sales, net earnings and EBITDA for the first quarter of 2019. The company also announced the UFPI Board of Directors voted to increase the semiannual dividend from $0.18 to $0.20 per share at their April 24, 2019, meeting. The dividend is payable on June 15, 2019, to shareholders of record on June 1, 2019.
“I am very proud of the way our teams are executing their businesses by producing record results in a variety of market conditions,” stated CEO Matt Missad. “We grew our margins during the quarter as a result of timely position buying and the contributions of new products and new business. Our investments in automation and efficiency are also beginning to pay dividends, helping us earn more new business and reduce our overall costs of production.”
While gross sales were impacted by lower lumber pricing, the company’s unit sales increased 7 percent in the first quarter over the same period last year, driven by organic sales growth, acquisitions and increases in value-added sales. The company’s mix of value-added sales relative to commodity sales improved from 62 percent in the first quarter of 2018 to more than 66 percent in the first quarter of 2019. The increase was largely led by unit sales increases in the industrial and construction markets, which grew 16 percent and 5 percent, respectively. Overall, new product sales grew 8 percent. Opportunistic lumber purchases in the fourth quarter of 2018, when prices were low, contributed significantly to the year-over-year increase in gross profits for the first quarter.
“We continue to focus on new products and services and moving up the value chain for our customers. By utilizing our design, engineering, manufacturing and project management capabilities, we are providing both unique and comprehensive solutions to our customers,” added Matt.
The company continues to explore acquisition opportunities that provide a strategic advantage, have scalability within the company and provide a reasonable return on investment.
First Quarter 2019 Highlights (comparisons on a year-over-year basis):
- Excluding the pre-tax gain of $7 million on the sale of certain real estate in the first quarter of 2018, operating profit of $48.5 million was up 30 percent and net earnings of $35.5 million was up 28 percent
- EBITDA of $65.9 million, up 25 percent
- Net sales of $1.02 billion represented a 2 percent increase
- Unit sales accounted for 7 percent of the company’s gross sales growth; organic sales contributed 4 percent of the growth while acquisitions added 3 percent. Lower lumber prices reduced gross sales by 5 percent.
- New product sales were $99.9 million, up 8 percent
By market, the Company reported the following first-quarter results.
Retail
- $357.5 million in gross sales, down 3 percent compared to the first quarter of 2018. A unit sales increase of 3 percent was offset by selling prices that were 6 percent lower. Retail sales in the first quarter were adversely impacted by challenging weather in February that delayed building and renovation projects.
Industrial
- $329.7 million in gross sales, up 15 percent over the first quarter of 2018. A unit sales increase of 16 percent was offset by lower selling prices of 1 percent. Organic growth contributed 6 percent of the unit sales increase; acquisitions contributed 10 percent.
Construction
- $344.4 million in gross sales, down 3 percent compared to the first quarter of 2018, due to a 5 percent increase in unit sales and an 8 percent decrease in selling prices. Unit sales to commercial construction and residential construction customers rose 15 and 6 percent, respectively, while unit sales to manufactured housing customers fell 6 percent during the quarter. The decrease in manufactured housing sales is primarily attributable to a drop in shipment levels to several Gulf Coast states that experienced higher shipments in 2017 and early 2018 due to hurricane damage.
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, April 25, 2019. 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 866-518-4547, and internationally at 213-660-0879. Use conference pass code 4478205. 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 May 25, 2019, at 855-859-2056, 404-537-3406 or 800-585-5367.
UNIVERSAL FOREST PRODUCTS, INC.
Universal Forest Products, Inc. is a holding company whose subsidiaries supply wood, wood composite and other products to three robust markets: retail, construction and industrial. Founded in 1955, the Company is headquartered in Grand Rapids, Mich., with affiliates throughout North America, Europe, Asia and Australia. For more about Universal Forest Products, 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.
Non-GAAP Financial Information
This release includes certain financial information not prepared in accordance with U.S. GAAP. Because not all companies calculate non-GAAP financial information identically (or at all), the presentations herein may not be comparable to other similarly titled measures used by other companies. Management considers EBITDA, a non-GAAP measure, an alternative performance measure which may provide useful information to investors.
Brandon FroyslandDirector of Finance(616) 365-1589
| CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS AND COMPREHENSIVE INCOME (UNAUDITED) | |||||||||||||||||||||||||||||
| FOR THE THREE MONTHS ENDED | |||||||||||||||||||||||||||||
| MARCH 2019/2018 | |||||||||||||||||||||||||||||
| Quarter Period | Year to Date | ||||||||||||||||||||||||||||
| (In thousands, except per share data) | 2019 | 2018 | 2019 | 2018 | |||||||||||||||||||||||||
| NET SALES | $ | 1,015,125 | 100 | % | $ | 993,857 | 100 | % | $ | 1,015,125 | 100 | % | $ | 993,857 | 100.0 | % | |||||||||||||
| COST OF GOODS SOLD | 860,858 | 84.8 | 862,968 | 86.8 | 860,858 | 84.8 | 862,968 | 86.8 | |||||||||||||||||||||
| GROSS PROFIT | 154,267 | 15.2 | 130,889 | 13.2 | 154,267 | 15.2 | 130,889 | 13.2 | |||||||||||||||||||||
| SELLING, GENERAL AND | |||||||||||||||||||||||||||||
| ADMINISTRATIVE EXPENSES | 105,317 | 10.4 | 93,335 | 9.4 | 105,317 | 10.4 | 93,335 | 9.4 | |||||||||||||||||||||
| FOREIGN CURRENCY EXCHANGE LOSS | 626 | 0.1 | (129 | ) | - | 626 | 0.1 | (129 | ) | - | |||||||||||||||||||
| NET GAIN ON DISPOSITION OF ASSETS | (122 | ) | - | (6,534 | ) | (0.7 | ) | (122 | ) | - | (6,534 | ) | (0.7 | ) | |||||||||||||||
| EARNINGS FROM OPERATIONS | 48,446 | 4.8 | 44,217 | 4.4 | 48,446 | 4.8 | 44,217 | 4.4 | |||||||||||||||||||||
| OTHER EXPENSE, NET | 867 | 0.1 | 1,061 | 0.1 | 867 | 0.1 | 1,061 | 0.1 | |||||||||||||||||||||
| EARNINGS BEFORE INCOME TAXES | 47,579 | 4.7 | 43,156 | 4.3 | 47,579 | 4.7 | 43,156 | 4.3 | |||||||||||||||||||||
| INCOME TAXES | 11,577 | 1.1 | 9,574 | 1.0 | 11,577 | 1.1 | 9,574 | 1.0 | |||||||||||||||||||||
| NET EARNINGS | 36,002 | 3.5 | 33,582 | 3.4 | 36,002 | 3.5 | 33,582 | 3.4 | |||||||||||||||||||||
| LESS NET EARNINGS ATTRIBUTABLE TO | |||||||||||||||||||||||||||||
| NONCONTROLLING INTEREST | (462 | ) | - | (749 | ) | (0.1 | ) | (462 | ) | - | (749 | ) | (0.1 | ) | |||||||||||||||
| NET EARNINGS ATTRIBUTABLE TO | |||||||||||||||||||||||||||||
| CONTROLLING INTEREST | $ | 35,540 | 3.5 | $ | 32,833 | 3.3 | $ | 35,540 | 3.5 | $ | 32,833 | 3.3 | |||||||||||||||||
| EARNINGS PER SHARE - BASIC | $ | 0.58 | $ | 0.53 | $ | 0.58 | $ | 0.53 | |||||||||||||||||||||
| EARNINGS PER SHARE - DILUTED | $ | 0.58 | $ | 0.53 | $ | 0.58 | $ | 0.53 | |||||||||||||||||||||
| SUPPLEMENTAL DATA | |||||||||||||||||||||||||||||
| Quarter Period | Year to Date | ||||||||||||||||||||||||||||
| Sales by Market Classification | 2019 | 2018 | % | 2019 | 2018 | % | |||||||||||||||||||||||
| Retail | $ | 357,487 | $ | 370,402 | -3 | % | $ | 357,487 | $ | 370,402 | -3 | % | |||||||||||||||||
| Industrial | 329,698 | 285,484 | 15 | % | 329,698 | 285,484 | 15 | % | |||||||||||||||||||||
| Construction | 344,420 | 355,781 | -3 | % | 344,420 | 355,781 | -3 | % | |||||||||||||||||||||
| Total Gross Sales | 1,031,605 | 1,011,667 | 2 | % | 1,031,605 | 1,011,667 | 2 | % | |||||||||||||||||||||
| Sales Allowances | (16,480 | ) | (17,810 | ) | 7 | % | (16,480 | ) | (17,810 | ) | 7 | % | |||||||||||||||||
| Total Net Sales | $ | 1,015,125 | $ | 993,857 | 2 | % | $ | 1,015,125 | $ | 993,857 | 2 | % | |||||||||||||||||
| 2019 | % of Sales | 2018 | % of Sales | 2019 | % of Sales | 2018 | % of Sales | ||||||||||||||||||||||
| SG&A, Excluding Bonus Expense | $ | 92,935 | 9.2 | $ | 84,269 | 8.5 | $ | 92,935 | 9.2 | $ | 84,269 | 8.5 | |||||||||||||||||
| Bonus Expense | 12,382 | 1.2 | 9,066 | 0.9 | 12,382 | 1.2 | 9,066 | 0.9 | |||||||||||||||||||||
| Total SG&A | $ | 105,317 | 10.4 | $ | 93,335 | 9.4 | $ | 105,317 | 10.4 | $ | 93,335 | 9.4 | |||||||||||||||||
| SG&A, Excluding Bonus Expense, as a Percentage of Gross Profit | 60.2 | % | 64.4 | % | 60.2 | % | 64.4 | % | |||||||||||||||||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) | ||||||||||||||||||
| MARCH 2019/2018 | ||||||||||||||||||
| (In thousands) | ||||||||||||||||||
| ASSETS | 2019 | 2018 | LIABILITIES AND EQUITY | 2019 | 2018 | |||||||||||||
| CURRENT ASSETS | CURRENT LIABILITIES | |||||||||||||||||
| Cash and cash equivalents | $ | 17,111 | $ | 25,326 | Cash overdraft | $ | 18,732 | $ | 30,026 | |||||||||
| Restricted cash | 1,024 | 32,425 | Accounts payable | 170,667 | 176,469 | |||||||||||||
| Investments | 16,197 | 10,701 | Accrued liabilities | 130,985 | 106,209 | |||||||||||||
| Accounts receivable | 444,111 | 430,251 | Current portion of debt | 185 | 425 | |||||||||||||
| Inventories | 580,163 | 521,706 | ||||||||||||||||
| Other current assets | 44,866 | 23,304 | ||||||||||||||||
| TOTAL CURRENT ASSETS | 1,103,472 | 1,043,713 | TOTAL CURRENT LIABILITIES | 320,569 | 313,129 | |||||||||||||
| OTHER ASSETS | 90,463 | 19,634 | LONG-TERM DEBT AND | |||||||||||||||
| INTANGIBLE ASSETS, NET | 271,297 | 254,546 | CAPITAL LEASE OBLIGATIONS | 266,428 | 261,327 | |||||||||||||
| PROPERTY, PLANT | OTHER LIABILITIES | 96,035 | 40,086 | |||||||||||||||
| AND EQUIPMENT, NET | 356,166 | 313,571 | EQUITY | 1,138,366 | 1,016,922 | |||||||||||||
| TOTAL ASSETS | $ | 1,821,398 | $ | 1,631,464 | TOTAL LIABILITIES AND EQUITY | $ | 1,821,398 | $ | 1,631,464 | |||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) | ||||||||||||
| FOR THE THREE MONTHS ENDED | ||||||||||||
| MARCH 2019/2018 | ||||||||||||
| (In thousands) | 2019 | 2018 | ||||||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||||||
| Net earnings | $ | 36,002 | $ | 33,582 | ||||||||
| Adjustments to reconcile net earnings to net cash from operating activities: | ||||||||||||
| Depreciation | 14,475 | 12,712 | ||||||||||
| Amortization of intangibles | 1,852 | 1,228 | ||||||||||
| Expense associated with share-based and grant compensation arrangements | 1,287 | 1,094 | ||||||||||
| Deferred income taxes credit | (742 | ) | (519 | ) | ||||||||
| Unrealized gain on investments | (1,348 | ) | - | |||||||||
| Net gain on disposition of assets | (122 | ) | (6,534 | ) | ||||||||
| Changes in: | ||||||||||||
| Accounts receivable | (100,716 | ) | (99,765 | ) | ||||||||
| Inventories | (23,649 | ) | (57,403 | ) | ||||||||
| Accounts payable and cash overdraft | 25,056 | 39,935 | ||||||||||
| Accrued liabilities and other | (7,924 | ) | (8,502 | ) | ||||||||
| NET CASH USED IN OPERATING ACTIVITIES | (55,829 | ) | (84,172 | ) | ||||||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||||||
| Purchases of property, plant, and equipment | (15,883 | ) | (24,362 | ) | ||||||||
| Proceeds from sale of property, plant and equipment | 241 | 36,250 | ||||||||||
| Acquisitions and purchase of noncontrolling interest, net of cash received | - | (8,787 | ) | |||||||||
| Purchases of investments | (449 | ) | (6,718 | ) | ||||||||
| Proceeds from sale of investments | 340 | 5,045 | ||||||||||
| Other | 200 | (124 | ) | |||||||||
| NET CASH (USED IN) PROVIDED BY INVESTING ACTIVITIES | (15,551 | ) | 1,304 | |||||||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||||||
| Borrowings under revolving credit facilities | 237,560 | 296,342 | ||||||||||
| Repayments under revolving credit facilities | (173,232 | ) | (179,429 | ) | ||||||||
| Borrowings of debt | - | 1,376 | ||||||||||
| Repayments of debt | (3,029 | ) | (5,232 | ) | ||||||||
| Proceeds from issuance of common stock | 261 | 206 | ||||||||||
| Distributions to noncontrolling interest | (500 | ) | (775 | ) | ||||||||
| Repurchase of common stock | - | (848 | ) | |||||||||
| Other | 9 | (70 | ) | |||||||||
| NET CASH FROM PROVIDED BY FINANCING ACTIVITIES | 61,069 | 111,570 | ||||||||||
| Effect of exchange rate changes on cash | 248 | 233 | ||||||||||
| NET CHANGE IN CASH AND CASH EQUIVALENTS | (10,063 | ) | 28,935 | |||||||||
| ALL CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | 28,198 | 28,816 | ||||||||||
| ALL CASH AND CASH EQUIVALENTS, END OF PERIOD | $ | 18,135 | $ | 57,751 | ||||||||
| Reconciliation of cash and cash equivalents and restricted cash: | ||||||||||||
| Cash and cash equivalents, beginning of period | $ | 27,316 | $ | 28,339 | ||||||||
| Restricted cash, beginning of period | 882 | 477 | ||||||||||
| All cash and cash equivalents, beginning of period | $ | 28,198 | $ | 28,816 | ||||||||
| Cash and cash equivalents, end of period | $ | 17,111 | $ | 25,326 | ||||||||
| Restricted cash, end of period | 1,024 | 32,425 | ||||||||||
| All cash and cash equivalents, end of period | $ | 18,135 | $ | 57,751 | ||||||||
| EBITDA RECONCILIATION (UNAUDITED) | ||||||||||||||
| FOR THE THREE MONTHS ENDED | ||||||||||||||
| MARCH 2019/2018 | ||||||||||||||
| Quarter Period | Year to Date | |||||||||||||
| (In thousands) | 2019 | 2018 | 2019 | 2018 | ||||||||||
| Net earnings | 36,002 | 33,582 | 36,002 | 33,582 | ||||||||||
| Interest expense | 2,460 | 1,778 | 2,460 | 1,778 | ||||||||||
| Interest and investment income | (1,593 | ) | (717 | ) | (1,593 | ) | (717 | ) | ||||||
| Net gain on disposition of assets | (122 | ) | (6,534 | ) | (122 | ) | (6,534 | ) | ||||||
| Income taxes | 11,577 | 9,574 | 11,577 | 9,574 | ||||||||||
| Expense associated with share-based compensation arrangements | 1,287 | 1,094 | 1,287 | 1,094 | ||||||||||
| Depreciation expense | 14,475 | 12,712 | 14,475 | 12,712 | ||||||||||
| Amortization of intangibles | 1,852 | 1,228 | 1,852 | 1,228 | ||||||||||
| EBITDA | 65,938 | 52,717 | 65,938 | 52,717 | ||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS AS A PERCENTAGE OF SALES | |||||||||||||
| CURRENT YEAR'S SALES STATED AT LAST YEAR'S SELLING PRICES (UNAUDITED) | |||||||||||||
| FOR THE THREE MONTHS ENDED - MARCH 2019/2018 | |||||||||||||
| Quarter Period | |||||||||||||
| Actual | Sales Adjusted to Last Year's Selling Price | Actual | |||||||||||
| 2019 | 2019 | 2018 | |||||||||||
| NET SALES | 100.0 | % | 100.0 | % | 100.0 | % | |||||||
| COST OF GOODS SOLD | 84.8 | 85.5 | 86.8 | ||||||||||
| GROSS PROFIT | 15.2 | 14.5 | 13.2 | ||||||||||
| SELLING, GENERAL AND ADMINISTRATIVE EXPENSES | 10.4 | 10.0 | 9.4 | ||||||||||
| NET GAIN ON DISPOSITION OF ASSETS | - | - | (0.7 | ) | |||||||||
| EARNINGS FROM OPERATIONS | 4.8 | 4.6 | 4.4 | ||||||||||
| OTHER EXPENSE, NET | 0.1 | 0.1 | 0.1 | ||||||||||
| EARNINGS BEFORE INCOME TAXES | 4.7 | 4.5 | 4.3 | ||||||||||
| INCOME TAXES | 1.1 | 1.1 | 1.0 | ||||||||||
| NET EARNINGS | 3.5 | 3.4 | 3.4 | ||||||||||
| LESS NET EARNINGS ATTRIBUTABLE TO | |||||||||||||
| NONCONTROLLING INTEREST | - | - | (0.1 | ) | |||||||||
| NET EARNINGS ATTRIBUTABLE TO | |||||||||||||
| CONTROLLING INTEREST | 3.5 | % | 3.3 | % | 3.3 | % | |||||||
| Note: Actual percentages are calculated and may not sum to total due to rounding. | |||||||||||||
| 2018 NET SALES | $ | 993,857 | |||||||||||
| INCREASE BY 2019 UNIT SALES GROWTH | 7.00 | % | |||||||||||
| ADJUSTED 2019 NET SALES | $ | 1,063,427 | |||||||||||
| LESS ACTUAL 2019 NET SALES | 1,015,125 | ||||||||||||
| DIFFERENCE IN NET SALES | $ | 48,302 | |||||||||||
| ACTUAL 2019 COST OF GOODS SOLD | $ | 860,858 | |||||||||||
| PLUS DIFFERENCE IN NET SALES (ABOVE) | 48,302 | ||||||||||||
| ADJUSTED 2019 COST OF GOODS SOLD | $ | 909,160 | |||||||||||
