Universal Forest Products Inc. ( UFPI ) reported one of
the finest first quarter results on Apr 17, 2013. The company rode
high on the back of strong sales performance in its five market
segments with a net income surging 25.7% over the year-ago
earnings.LOUISIANA PAC (LPX): Free Stock Analysis ReportPOTLATCH CORP (PCH): Free Stock Analysis ReportPLUM CREEK TMBR (PCL): Free Stock Analysis
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On a per share basis, earnings were at 26 cents, reflecting an
increase of 24% over 21 cents reported in the year-ago quarter and
way above the Zacks Consensus Estimate of one cent.
Net sales in the first quarter were $554.5 million, up 21.3% year
over year as Universal Forest benefitted from healthy growth in the
lumber market that went up 42.9% year over year. Revenue results in
all the end-markets were strong. Revenue detail of each market is
Retail Building Materials revenue (37% of first quarter total
gross sales) was up 4.9% year over year to $205.7 million.
Residential Construction sales (13%) improved 43.4% to $74.3
million. Commercial Construction and Concrete Forming sales (5%)
were $30.4 million, up 54.0% year over year. Industrial
packaging/components sales (29%) were $160.5 million, up 2.5% year
over year. Manufactured Housing sales (16%) were up 42.6% year over
year to $89.9 million.
Cost of goods sold for Universal Forest represented 89.7% of total
revenue in the first quarter 2013, up 140 basis points year over
year while gross margin decreased by the same magnitude to settle
at 10.3%. Selling, general and administrative expenses were roughly
$48.2 million and accounted for 8.7% of total revenue.
During the first quarter 2013, cash position of Universal Forest
weakened and after finally exiting the quarter, the company
reported a cash overdraft balance of $7.7 million as against a
positive cash balance of $14.5 million at the end of the previous
As far as the debt position was concerned, there was no respite as
the long-term debt balance grew roughly 62% sequentially to $155.2
Net cash position from operating activities in the first quarter
2013 remained in a negative zone for Universal Forest. Cash outflow
in the quarter amounted to roughly $64.6 million versus $44.8
million in the year-ago quarter.
Capital spending, on the other hand, reflected a slight
year-over-year improvement of 2.9% and came in at $8.1
Going forward, management of Universal Forest 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
The stock currently has a Zacks Rank #3 (Hold). Companies, other
than Universal Forest, that are worth a mention in the industry are
Louisiana-Pacific Corp. ( LPX ), Plum
Creek Timber Co. Inc. ( PCL ) and
Potlatch Corporation ( PCH ), each holding a
Zacks Rank #1 (Strong Buy).