Universal Forest Products Inc's
) third quarter 2012 financial results suffered a set-back from a
pre-tax contingency loss of $2 million related to Canadian
anti-dumping duty assessment on certain imported Chinese
products. Earnings per share, including this effect, came in at
21 cents, down from 29 cents earned in the year-ago quarter.
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Results were also far below the Zacks Consensus Estimate of 38
cents per share earnings.
Net sales in the quarter jumped 13.7% year over year to $533.4
million as strong demands enabled double-digit increases in four
of five end markets. Revenue detail of each market is discussed
Retail Building Materials revenue (39% of third quarter total
gross sales) was down 3.1% year over year to $204.4 million.
Residential Construction sales (13%) improved 33.8% to $69.6
million. Commercial Construction and Concrete Forming sales (4%)
were $23.9 million, up 11.4% year over year.
Industrial packaging sales (28%) were $153.9 million, up 20.0%
year over year. Manufactured Housing and recreational vehicle
sales (16%) were up 35.5% year over year to $89.0 million.
In the third quarter, Universal Forest's cost of goods sold
represented 89.6% of total revenue, up 120 basis points year over
year while gross margin decreased by the same magnitude to settle
at 10.4%. Selling, general and administrative expenses were
roughly $44.4 million and represented 8.3% of total revenue.
Exiting the third quarter, Universal Forest's cash and cash
equivalents were roughly $4.9 million, down compared with $5.3
million in the previous quarter. Debt repayments during the
quarter lowered long-term debt balance to $16.7 million from
$32.9 million in the sequential quarter.
Cash flow from operating activities in the quarter was $22.8
million compared with $60 million generated in the year-ago
comparable quarter. Capital spending amounted to $6.0 million,
lower than $9.6 million in the year-ago quarter.
Universal Forest Products Inc. manufactures, treats, distributes,
and installs lumber, composite wood, plastic and other building
products. The company competes stiffly with peers including
Bluelinx Holdings Inc.
Builders FirstSource Inc.
We currently have a Neutral recommendation on Universal Forest
while the stock also bears a Zacks #3 (Hold) Rank.