Universal Forest Products Inc.
) reported its financial results for the second quarter 2012 on
July 19. Earnings per share in the quarter were 88 cents, a
remarkable improvement from earnings of 22 cents reported in the
year-ago quarter. Results also surpassed the Zacks Consensus
Estimate of 71 cents per share earnings.
The results were driven by higher sales and increased operating
efficiencies as well as cost control initiatives adopted by
Net sales in the quarter grew 9.1% year over year to $593.7
million. Demands were strong in most of the markets, chiefly
supported by favorable weather conditions. Revenue detail of each
market is discussed below:
Retail Building Materials revenue (46.5% of second quarter total
gross sales) was down 2.3% year over year to $280.8 million.
Residential Construction sales (10%) improved 6.3% to $60.2
million. Commercial Construction and Concrete Forming sales (4%)
were $24.2 million, up 14.4% year over year.
Industrial sales (26%) were $158.3 million, up 25.3% year over
year. Manufactured Housing sales (13%) were up 24.9% year over year
to $80.7 million.
In the second quarter, Universal Forest's cost of goods sold
represented 87.9% of total revenue, down 170 basis points year over
year while gross margin increased by the same magnitude to settle
at 12.1%. Selling, general and administrative expenses were roughly
$49.1 million and represented 8.3% of total revenue.
Exiting the second quarter, Universal Forest's cash and cash
equivalents were roughly $5.3 million as compared with an overdraft
balance of approximately $4.3 million in the previous quarter.
Long-term debt plummeted 25% to reach approximately $3.9 million in
Cash flow from operating activities in the quarter was $24.9
million versus ($44.6) million versus $51.6 million in the second
quarter of 2011. Capital spending hiked slightly to $7.9 million as
compared with $5.9 million in the year-ago quarter.
Although Universal Forest is optimistic about a healthy
financial performance in the quarter ahead; it remains concerned
about the weak economic fundamentals prevailing in the United
Universal Forest Products Inc. manufacturers, treats,
distributes, and installs lumber, composite wood, plastic and other
building products. The company faces stiff competition from its
Bluelinx Holdings Inc.
Builders FirstSource Inc.
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