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UFPI Posts Record 2001 Results
GRAND RAPIDS — Universal Forest Products Inc. posted record fourth quarter 2001 net earnings of $4 million, or 20 cents per share, a 25 percent increase over net earnings for the fourth quarter of 2000.
Net sales for the quarter were $329 million, an increase of 16 percent over net sales reported for the same quarter the year before.
For the year ended Dec. 29, 2001, net earnings were $33 million, or $1.63 per share, compared to $30 million, or $1.49 per share, a year ago. Net sales of $1.53 billion represented a 10 percent increase over net sales in 2000.
“What’s important about these numbers is that in all four of the markets we serve, we were able to post double-digit gains,” said William Currie, vice chairman and CEO.
Though the lumber market temporarily spiked in August, Michael Cole, chief financial officer, said it was short lived and had little impact on Universal’s prices and reported sales levels.
Do-It-Yourself (D-I-Y) market sales were up nearly 12 percent for the quarter, primarily driven by a 10 percent increase in unit sales to The Home Depot, which comprised 72 percent of Universal’s D-I-Y sales in the third quarter.
Universal recorded annual sales of $739 million for its retail D-I-Y market, which was up nearly 12 percent from 2000.
“There are a lot of questions about Home Depot,” Currie said. “The rumors are out there on 60-day terms and a more difficult relationship with them. We have not participated in anything that doesn’t make good business sense.
“We don’t plan on any 60-day terms. We can’t afford to grow our business and run the business that we want to run with those kinds of expenditures.”
He said Universal will listen to all options, and will be flexible and reasonable but management will continue to run the company the way it sees fit.
Based on recent vendor awards Universal has received from Home Depot, and meetings with the company’s new management group, Currie said Universal feels fairly comfortable that its business relationship with Home Depot is intact.
Sales to the manufactured housing market were up 15 percent for the quarter, despite the fact that the industry is still reporting steep declines in shipments year over year, Cole said. He attributed the increase in market share to the company’s acquisition of Sunbelt Wood Components last April.
Total 2001 sales to the manufactured housing market were $280 million, down nearly 4 percent from the year before.
Universal’s sales to the site-built construction market grew by 32 percent for the quarter due to a combination of acquisitions and organic growth out of existing plants, Cole said. Universal acquired all of the assets of Superior Truss in June and 50 percent of the assets of D&R Framing in February.
Annual sales to the site-built construction market were up more than 26 percent over 2000 to $308 million.
In the industrial/agricultural market, Universal’s sales rose by 15 percent, which Cole said was due entirely to organic growth of several of Universal’s existing plants.
Universal recorded 2001 annual sales of $202 million to the industrial market, an increase of 5.5 percent over the year before.
In January, Universal completed the purchase of two million company shares from Chairman Peter Secchia. The stock buyback is expected to redirect financial resources from acquisitions, which were key to the company’s growth strategy.
The outlook is for “a bit of cautious optimism,” Currie said.
Universal anticipates the commodity lumber market will remain stable during the year and foresees a slight recovery in the manufactured housing market. It expects to see slow to moderate growth in the D-I-Y market and a soft site-built housing market for at least the first six months of this year.
Based on those assumptions, the company is projecting a 6 percent to 10 percent increase in sales for 2002 and an increase in earnings per share of 18 percent to 22 percent this year.
Earlier this year, Universal was named to Forbes magazine’s Platinum 400, a ranking that recognized the company as one of 400 best performing U.S. companies with more than $1 billion in annual revenue.