UFPI Has Record First Quarter

April 22, 2002
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GRAND RAPIDS — Universal Forest Products reported record net sales of $341.7 million for the first quarter, up 20 percent from the same quarter a year ago.

Earnings per share increased 14 percent to 32 cents per share for the quarter.

One of the quarter’s highlights was the manner in which Universal worked through complicated negotiations with Home Depot and its new management team, said William Currie, UFPI’s vice chairman and chief executive officer.

“I think we were fairly successful with that,” he said, adding that the company maintained a lot of its Home Depot business.

Michael Cole, chief financial officer, said the 20 percent increase in overall sales was due to a 15 percent increase in unit sales and a 5 percent increase in selling prices to the lumber market.

By market, Universal posted first quarter sales of:

  • $147.2 million in do-it-yourself (D-I-Y) retail, an increase of 15 percent over last year.

  • $68.5 million in site-built construction, an increase of nearly 11 percent over last year.

  • $67.2 million in manufactured housing, an increase of 36 percent over last year.

  • $58.7 million in industrial/agricultural, an increase of 30 percent over last year.

The 36 percent increase in manufactured housing compares to an 8 percent industry increase in shipments year-over-year, Cole noted.

The relatively mild winter, a favorable lumber market, the buyback of 2 million company shares and acquisitions completed in 2001 helped boost sales as well, Currie noted.

He said Universal is “in solid” in the D-I-Y market.

“If we see consolidation that could happen that would enhance our leverage or position with Home Depot or with Lowe’s, and we feel we can acquire the business along with the facility, then we will take a look at further consolidating that business.”

A couple of acquisitions last year will add to growth of the site-built construction side of Universal’s business, which Currie predicted would be “pretty powerful” this year. He added that the company would probably open a couple of new plants in that market this year.

On April 11, Universal announced it was getting into the wood alternatives market under an exclusive licensing agreement with Inno-Tech Plastics Inc. of Springfield, Ill. Universal plans to eventually expand the new product line to serve all four of its markets.

“We’ve looked at every alternative to wood on the market and none of them are like wood…,” Curry said. “This is the first one we’ve ever seen that looks like wood, acts like wood, feels like wood, and reacts like wood, only better.

“There are a lot of industrial applications for this. Even though it’s a small sales dollar right now, it’s definitely a nice market product — and it’s unique because I think we have the best product on the market.”

Universal is now doing a lot of business with the product on lines running with some large, exterior door companies making specialized parts for them, he added.

The company continues to target annual sales growth of 6 percent to 10 percent and diluted earnings per share growth of 18 percent to 22 percent. 

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