Universal Forest Products Inc's ( UFPI ) fourth quarter
2012 financial results were disappointing as the company reported a
net loss of 10 cents per share compared with a loss of 9 cents
reported in the year-ago quarter. The results were far below the
Zacks Consensus Estimate of 2 cents per share earnings.
For 2012, the company reported net earnings of $1.21 per share, up
from 23 cents in 2011 and the Zacks Consensus Estimate of
Net sales in the fourth quarter were $470.8 million, up 11.5% year
over year due to a healthy growth witnessed in the lumber market,
which helped overcome a 2% decline in unit sales. Revenue results
in end-markets were strong, except for a 3.5% decline experienced
in the Retail Building Materials market. Revenue detail of each
market is discussed below:
Retail Building Materials revenue (33% of fourth quarter total
gross sales) was down 3.5% year over year to $159.5 million.
Residential Construction sales (16%) improved
60.5% to $74.6 million. Commercial Construction and Concrete
Forming sales (5%) were $22.1 million, up 4.6% year over
Industrial packaging/components sales (29%) were $139.2 million,
up 8.3% year over year. Manufactured Housing sales (17%) were up
20.9% year over year to $81.3 million.
For 2012, revenue came in at $2,054.9 million, up 12.8% year over
In the fourth quarter, Universal Forest's cost of goods sold
represented 90.6% of total revenue, up 180 basis points year over
year while gross margin decreased by the same magnitude to settle
at 9.4%. Selling, general and administrative expenses were roughly
$44.8 million and accounted for 9.5% of total revenue.
Universal Forest's cash and cash equivalents roughly tripled
sequentially to $14.5 million exiting the fourth quarter of 2012 as
against $4.9 million in the previous quarter. Long-term debt
balance came in at $95.8 million versus $16.7 million reported in
the sequential quarter as debt borrowings far exceeded repayments
during the quarter.
In 2012, cash flow from operating activities entered a negative
zone and stood at ($5.7) million versus $11.5 million in 2011.
Capital spending also slipped, though by 7.9% year over year, to
Going forward, management anticipates improving its top-line
growth through additions of new customers and products to its
portfolio. Also, operating margin enhancement remains a prime area
of focus for the company.
Universal Forest Products Inc. manufactures, treats,
distributes, and installs lumber, composite wood, plastic and other
building products.BUILDERS FIRSTS (BLDR): Free Stock Analysis
ReportLOWES COS (LOW): Free Stock Analysis ReportLOUISIANA PAC (LPX): Free Stock Analysis ReportUNIVL FST PRODS (UFPI): Free Stock Analysis
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The stock currently has a Zacks Rank #3 (Hold). Other stocks to
watch out for in the industry are Louisiana-Pacific
Corp. ( LPX
) with a Zacks Rank #1 (Strong Buy) while Builders
FirstSource, Inc. ( BLDR ) and
Lowe's Companies Inc. ( LOW ), each has a Zacks
Rank #2 (Buy).