Universal Forest Products Inc's
(
UFPI
) 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.
Revenue
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.
Margins
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.
Balance Sheet
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
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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