Universal Forest Products Inc
) results for fourth-quarter 2013 were impressive as the company
reported earnings per share of 40 cents, a remarkable improvement
over loss of 10 cents recorded in the year-ago quarter. The
bottom-line result also surpassed the Zacks Consensus Estimate of
18 cents. Results were driven by improvement in the housing and
construction markets, benefits from new product introduction and
strong industrial activities.
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For 2013, Universal Forest Products reported earnings per share
of $2.15, up 77.7% from $1.21 earned in 2012 and also above the
Zacks Consensus Estimate of $1.95.
Universal Forest Products recorded total gross sales of $532.7
million in the fourth quarter of 2013, an increase of 12% over
the year-ago quarter. Excluding sales allowances, net sales in
the quarter were $525.7 million, up 11.7% year-over-year due
primarily to healthy performances at the company's five market
segments. Unit sales increased 5% while selling prices were up by
However, the top-line result was below the Zacks Consensus
Estimate of $532 million.
Starting fourth-quarter 2013, Universal Forest Products has
slightly changed its end-market sales representation. A brief
snapshot of the end-market sales has been provided below.
Retail Building Materials revenues (31.7% of fourth-quarter total
gross sales) were up 7% year over year to $168.8 million.
Industrial sales (30.1%) were $160.6 million, up 14.0% year over
Universal Forest Products now groups its Residential
Construction, Commercial Construction and Concrete Forming and
Manufactured Housing sales under a broader head of Housing and
Construction. Gross sales in the Housing and Construction end
market (38.2%) was $203.3 million, up 14.5% year over year. Sales
details of individual end markets are provided below:
Residential Construction sales (15.4%) improved 10% to $82.0
million. Commercial Construction and Concrete Forming sales
(6.0%) were $32.0 million, up 47.0% year over year. Manufactured
Housing sales (16.8%) were up 10.0% year over year to $89.4
In 2013, net sales were $2,470.4 million, up 20.2% year over year
but below the Zacks Consensus Estimate of $2,477 million. New
product sales in 2013 were $85 million.
Universal Forest's cost of goods sold represented 87.8% of net
sales in fourth-quarter 2013, down 280 basis points year over
year while gross margin increased by the same magnitude to settle
at 12.2%. Selling, general and administrative expenses were
roughly $50.0 million and accounted for 9.5% of revenue.
Exiting fourth-quarter 2013, Universal Forest Products had a cash
overdraft balance of $1.1 million, compared with cash and cash
equivalents balance of $5.2 million at the end of the previous
quarter. Long-term debt position of the company remained stable
sequentially at $84.7 million.
Universal Forest Products generated net cash flow of $53.4
million in 2013 compared with cash used for operating activities
of $5.7 million. Capital spending increased by 31.9% year over
year to $40.0 million.
Going forward, management of Universal Forest Products
anticipates improvement in its top-line growth through addition
of new customers and products to its portfolio. By 2017, the
company targets to achieve $3 billion in sales. Also, operating
margin enhancement remains a prime area of focus.
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
$991.4 million and carries a Zacks Rank #3 (Hold). Some
better-ranked stocks in the industry include
), all of which hold a Zacks Rank #2 (Buy).