Universal Forest Products reports year-end earnings spike to $23.9M
Universal Forest Products Inc. (Nasdaq: UFPI) has reported net sales of $2.1 billion in 2012, a 12.8-percent increase over 2011, and net earnings of $23.9 million or $1.21 per diluted share in 2012, compared to net earnings of $4.5 million in 2011.
Fourth quarter net sales were $470.8 million, up 11.5 percent over the same quarter in 2011. However, Universal saw a loss of $1.9 million in the fourth quarter, or 10 cents per diluted share, compared to a loss of $1.7 million in the fourth quarter of 2011.
“The first six months gave us a great start, but the back half of the year was more difficult. Our concerns that strong unit sales in the first and second quarters would pull sales and profit from later in the year proved to be valid,” said CEO Matthew J. Missad. “I’m proud of our team and our efforts and believe we have much to be encouraged by, but there’s also much room for improvement in 2013.”
For the fourth quarter, unit sales were down 2 percent but net sales increased due to price increases in the lumber market. In the fourth quarter, the lumber composite price was up 33 percent over the previous year; for the entire year, it was up 19 percent over 2011. Because Universal prices many of its products to achieve a fixed profit per unit and lumber is priced as a pass-through cost, higher lumber prices adversely affect margins as a percentage of sales.
By market, Universal reported the following 2012 gross sales.
- Retail building materials were $159.5 million in the fourth quarter, a decrease of 3.5 percent from the same period in 2011. Sales for the year were $841.5 million, an increase of less than 1 percent over 2011
- Industrial packaging/components were $139.2 million in the fourth quarter, up 8.3 percent over the fourth quarter of 2011. For the year, sales were $583.7 million, up 18.5 percent over 2011
- Manufactured housing’s fourth quarter sales were $81.3 million, up 20.9 percent over the same period in 2011. Sales for the year were $314.1 million, an increase of 28.4 percent over 2011
- Residential construction was $74.6 million in the fourth quarter, up 60.5 percent over the same period of 2011, and sales for the year were $256.4 million, up 26.3 percent. While much of the increase was attributable to lumber prices, Universal said it is seeing stronger home-building activity where it does business in the U.S. Nationwide, actual home starts for October to December 2012 were up 35.5 percent over the same period of 2011
- Commercial construction and concrete forming was $22.1 million in the fourth quarter, up 4.6 percent over the same period of 2011. Sales for the year were $90.4 million, up 15.3 percent