Universal Forest Products Inc.
) reported impressive financial results for the third quarter
2013. The company posted earnings per share of 71 cents, more
than triple the earnings of 21 cents per share reported in the
year-ago quarter. Compared with the Zacks Consensus Estimate of
54 cents, earnings per share in the quarter grew 31.5%.
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The company rode high on the back of double-digit revenue growth
in its five market segments.
Total gross sales of Universal Forest increased 22% year over
year and came in at $660.7 million while sales, net of sales
allowances, grew 22.2% to $651.8 million. Healthy performances at
the company's five market segments were the result of this
Universal Forest's end-market revenue has been briefed below:
Retail Building Materials revenues (37% of third quarter total
gross sales) were up 21.6% year over year to $247.0 million.
Residential Construction sales (14%) improved 29.3% to $89.7
million. Commercial Construction and Concrete Forming sales (6%)
were $36.7 million, up 51.7% year over year. Industrial
packaging/components sales (28%) were $187.3 million, up 20.8%
year over year. Manufactured Housing sales (15%) were up 12.3%
year over year to $100.0 million.
Universal Forest's cost of goods sold represented 88.0% of net
sales in the third quarter 2013, down 160 basis points year over
year while gross margin increased by the same magnitude to settle
at 12.0%. Selling, general and administrative expenses were
roughly $53.0 million and accounted for 8.1% of total revenue.
Cash position of Universal Forest was stronger than the previous
quarter as the company reported cash and cash equivalents balance
of $5.2 million at the end of the third quarter 2013 as compared
with cash overdraft balance of $3.4 million in the previous
As far as the debt position was concerned, Universal Forest's
long-term debt balance decreased 40.6% sequentially to $84.7
Net cash position from operating activities in the third quarter
2013 improved to $76.7 million as compared with $22.2 million in
the year-ago comparable quarter. Universal Forest's capital
spending in the quarter was $10.6 million, up compared with $6.4
million spend in the year-ago quarter.
Going forward, management of Universal Forest anticipates
improving its top-line growth through addition 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. The company currently has a market capitalization of
The stock has a Zacks Rank #3 (Hold). Other stocks to watch out
for in the industry are
Boise Cascade Company
) with a Zacks Rank #1 (Strong Buy), while
Armstrong World Industries, Inc.
) each hold a Zacks Rank #2 (Buy).