UFPI Posts 31 Percent Sales Hike
Net sales were $465.7 million for the quarter, compared with $355.6 million for the first quarter of 2003.
Diluted earnings per share were 30 cents, up 20 percent over earnings per share of 25 cents posted for the year-ago period.
William Currie, CEO and vice chairman, described it as “a powerful” first quarter.
“February and March were two of the strongest months we’ve ever seen in our history and it looks like more of the same as we see April start out,” he said.
The nearly $466 million in sales, he said, was due to a combination of unit sales increases and price increases.
By market, Universal reported first quarter sales of:
- $178.9 million in do-it-yourself (DIY) retail, up 14.5 percent over 2003’s fist quarter.
- $114.8 million in site-built construction, up 49.1 percent over last year.
- $77 million in manufactured housing, up 35 percent over the year-ago period.
- $95 million in industrial/other, up 45.3 percent over last year.
Currie said earnings were not up to what they should have been because of a couple of problems with a joint venture framing operation in the Southwest.
“First, we had some folks that weren’t long-term Universal employees and their bidding processes and some of the systems they used didn’t give a very accurate bid.
“Besides that, the lumber market is screened, and we did not have our lumber and panels covered for a lot of these jobs. Consequently our costs were more than what we bid on and estimated, and we took some risks.”
Currie estimated that problems with the framing operation cost the company between 5 cents and 8 cents per share in the first quarter. He said Universal has since replaced the operation’s associate management team and has put the company’s own systems in place.
Three days before releasing its first quarter financial results, Universal announced it had purchased a 50 percent stake in Massachusetts-based Shawnlee Construction LLC, to provide customers in the New England market with turnkey construction packages.
Shawnlee completed more than $55 million in projects over the past three years.
Universal said it plans to supply material from its component plants throughout the Northeast and combine it with framing services through Shawnlee.
“We continue to build and evaluate our framing operations,” Currie remarked. “We’re still sure that’s the right process for us to be involved in — producing the components and installing them. We just have to continue to work on our processes for our systems to get very efficient at it.”
Several Universal acquisitions became operational during the quarter and are allowing the company to meet growing demand for its products “in some new, strong regions,” namely Indianapolis, Houston, North Dallas, Texas, and Berlin, N.J., he said.
Lumber prices are at all-time highs, Currie noted, and there have been increases in just about everything, including freight, labor and fuel prices.
Lumber products are a little bit scarce and new regulations on trucking have also become an “arduous process,” he added.
“There are a lot of challenges out there affecting our business right now and we expect these to go on through the second quarter.”
Universal is targeting unit sales and diluted earnings per share growth of 10 percent and 14 percent, respectively, for 2004.