UFPI's 3Q Lags Estimate - Analyst Blog
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.
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 below:
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. ( BXC ), Builders FirstSource Inc. ( BLDR ), and Louisiana-Pacific Corp. ( LPX ).
We currently have a Neutral recommendation on Universal Forest while the stock also bears a Zacks #3 (Hold) Rank.
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