EX-99.A 2 exhibit99a-8k720161.htm EXHIBIT 99.A Exhibit
Universal Forest Products, Inc.
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Exhibit 99(a)
 

 News release

---------------AT THE COMPANY---------------
Lynn Afendoulis
Director, Corporate Communications
(616) 365-1502

FOR IMMEDIATE RELEASE
Wednesday, July 20, 2016


UFPI posts record net earnings, net sales; retail and construction markets lead sales gains
Profits up 28.6 percent over previous year

GRAND RAPIDS, Mich., July 20, 2016 - Universal Forest Products, Inc. (Nasdaq: UFPI) today reported net earnings attributable to controlling interest of $33.4 million for the second quarter of 2016, up 28.6 percent over net earnings attributable to controlling interest of $26.0 million for the same period of 2015. Second-quarter 2016 diluted earnings per share were $1.64, compared to diluted earnings per share of $1.28 for the second quarter of 2015. Net sales of $872.1 million in the second quarter of 2016 represent an increase of 4.0 percent over net sales of $838.2 for the same period of 2015. The net earnings and net sales numbers are the best of any quarter in the Company’s history.
The Company’s results were driven by strong sales gains in the retail and construction markets, which grew 7.5 and 6.5 percent, respectively, over the same period of last year.
“The employees of the companies of Universal delivered another outstanding quarter,” said CEO Matthew J. Missad. “The results confirm that our growth and improvement strategies, coupled with our balanced business model, are working.  When we break records, we simply are setting the bar for the next record. We look forward to the challenge of trying to stay ahead of 2015’s record performance in the second half of the year. Fortunately, we have talented and hard-working employees who can make that happen.”
Missad noted that new product sales grew 9.2 percent over the second quarter of 2015, and that the Company’s product mix continues to drive improvements in gross margins. Lower industrial production in the U.S. and a strong U.S. dollar adversely affected the Company’s industrial business during the second quarter.
-more-

Universal Forest Products, Inc.
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Recently announced acquisitions - Idaho Western in Nampa, Idaho, and Tampa, Fla.-based Robbins Manufacturing Co. - are expected to add $100 million in annual gross sales.
By market, the Company posted the following gross sales results:
Retail: $406.7 million, up 7.5 percent over the second quarter of 2015
The Company’s performance in this market benefited from growth with independent and big box retailers, the latter of which saw healthy increases in comparable store sales in their most recently reported quarters. The Company also gained market share with certain customers and grew sales of new products to these customers. The Company anticipates healthy demand through the building season, barring adverse weather conditions and other unforeseen events.
Industrial: $231.4 million, down 2.9 percent over the second quarter of 2015
In this market, the Company sells packaging and material handling and related products for industrial and agricultural customers. Sales in this market have been adversely affected by a decrease in U.S. industrial production, which fell 0.7 percent year-over-year in the most recently reported month, and a strong U.S. dollar, which has adversely impacted the export sales of industrial customers. The Company also is being more selective by pursuing greater value-added business, which has contributed to improved gross profit margins in this market. It remains committed to growing industrial sales organically, through acquisitions, and by increasing its share of the market.
Construction: $249.3 million, up 6.5 percent over the same period of 2015
The Company saw unit sales increases of 10 percent in its residential construction business and 4 percent in commercial construction. The Company has benefitted from rising U.S. housing starts in both site-built and factory-built housing, and a strong increase in commercial construction spending.
CONFERENCE CALL
Universal Forest Products will conduct a conference call to discuss information included in this news release and related matters at 8:30 a.m. ET on Thursday, July 21, 2016. The call will be hosted by CEO Matthew J. Missad and CFO Michael Cole, and will be available for analysts and institutional investors domestically at (888) 685-5759 and internationally at (503) 343-6031. Use conference ID 48931902. The conference call will be available simultaneously and in its entirety to all interested investors and news media through a webcast at http://www.ufpi.com. A replay of the call will be available through August 20, 2016, at any of the following numbers: (855) 859-2056 or (404) 537-3406 or (800) 585-8367.






Universal Forest Products, Inc.
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UNIVERSAL FOREST PRODUCTS, INC.
Universal Forest Products, Inc. is a holding company that provides capital, management and administrative resources to subsidiaries in three robust markets: retail, construction and industrial. Founded in 1955, the Company is headquartered in Grand Rapids, Mich., with affiliates throughout North America and Australia. For more about Universal Forest Products, go to www.ufpi.com.


This press release contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act, as amended, that are based on management’s beliefs, assumptions, current expectations, estimates and projections about the markets we serve, the economy and the Company itself. Words like “anticipates,” “believes,” “confident,” “estimates,” “expects,” “forecasts,” “likely,” “plans,” “projects,” “should,” variations of such words, and similar expressions identify such forward-looking statements. These statements do not guarantee future performance and involve certain risks, uncertainties and assumptions that are difficult to predict with regard to timing, extent, likelihood and degree of occurrence. The Company does not undertake to update forward-looking statements to reflect facts, circumstances, events, or assumptions that occur after the date the forward-looking statements are made. Actual results could differ materially from those included in such forward-looking statements. Investors are cautioned that all forward-looking statements involve risks and uncertainty. Among the factors that could cause actual results to differ materially from forward-looking statements are the following: fluctuations in the price of lumber; adverse or unusual weather conditions; adverse economic conditions in the markets we serve; government regulations, particularly involving environmental and safety regulations; and our ability to make successful business acquisitions. Certain of these risk factors as well as other risk factors and additional information are included in the Company's reports on Form 10-K and 10-Q on file with the Securities and Exchange Commission..









# # #











Universal Forest Products, Inc.
Page 4niversal Forest Products, Inc.
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CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS AND COMPREHENSIVE INCOME (UNAUDITED)
FOR THE SIX MONTHS ENDED
JUNE 2016/2015
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Quarter Period
 
Year to Date
 
(In thousands, except per share data)
2016
2015
2016
2015
 
NET SALES
$
872,093

100
%
 
$
838,171

100
%
 
$
1,554,244

100
%
 
$
1,471,195

100
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
COST OF GOODS SOLD
740,606

84.9

 
725,728

86.6

 
1,320,018

84.9

 
1,279,170

86.9

 
 
 
 
 
 
 
 
 
 
 
 
 
 
GROSS PROFIT
131,487

15.1

 
112,443

13.4

 
234,226

15.1

 
192,025

13.1

 
 
 
 
 
 
 
 
 
 
 
 
 
 
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
77,762

8.9

 
68,431

8.2

 
148,601

9.6

 
130,136

8.8

 
 
 
 
 
 
 
 
 
 
 
 
 
 
NET (GAIN) LOSS ON DISPOSITION AND IMPAIRMENT OF ASSETS
60

—

 
(176
)
—

 
50

—

 
(162
)
—

 
 
 
 
 
 
 
 
 
 
 
 
 
 
EARNINGS FROM OPERATIONS
53,665

6.2

 
44,188

5.3

 
85,575

5.5

 
62,051

4.2

 
 
 
 
 
 
 
 
 
 
 
 
 
 
OTHER EXPENSE, NET
785

0.1

 
1,238

0.1

 
1,675

0.1

 
2,193

0.1

 
 
 
 
 
 
 
 
 
 
 
 
 
 
EARNINGS BEFORE INCOME TAXES
52,880

6.1

 
42,950

5.1

 
83,900

5.4

 
59,858

4.1

 
 
 
 
 
 
 
 
 
 
 
 
 
 
INCOME TAXES
18,643

2.1

 
16,066

1.9

 
29,407

1.9

 
22,170

1.5

 
 
 
 
 
 
 
 
 
 
 
 
 
 
NET EARNINGS
34,237

3.9

 
26,884

3.2

 
54,493

3.5

 
37,688

2.6

 
 
 
 
 
 
 
 
 
 
 
 
 
 
LESS NET EARNINGS ATTRIBUTABLE TO NONCONTROLLING INTEREST
(839
)
(0.1
)
 
(908
)
(0.1
)
 
(1,882
)
(0.1
)
 
(1,550
)
(0.1
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NET EARNINGS ATTRIBUTABLE TO CONTROLLING INTEREST
$
33,398

3.8

 
$
25,976

3.1

 
$
52,611

3.4

 
$
36,138

2.5

 
 
 
 
 
 
 
 
 
 
 
 
 
 
EARNINGS PER SHARE - BASIC
$
1.64

 
 
$
1.29

 
 
$
2.59

 
 
$
1.79

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
EARNINGS PER SHARE - DILUTED
$
1.64

 
 
$
1.28

 
 
$
2.58

 
 
$
1.79

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
COMPREHENSIVE INCOME
33,430

 
 
26,358

 
 
54,128

 
 
36,159

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
LESS COMPREHENSIVE INCOME ATTRIBUTABLE TO NONCONTROLLING INTEREST
(235
)
 
 
(636
)
 
 
(1,081
)
 
 
(1,133
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
COMPREHENSIVE INCOME ATTRIBUTABLE TO CONTROLLING INTEREST
$
33,195

 
 
$
25,722

 
 
$
53,047

 
 
$
35,026

 
 
SUPPLEMENTAL SALES DATA
 
 
 
 
 
 
 
 
Quarter Period
 
Year to Date
Market Classification
2016
2015
%
 
2016
2015
%
Retail
$
406,738

$
378,357

8
 %
 
$
677,481

$
609,804

11
 %
Industrial
231,388

238,372

(3
)%
 
435,632

448,388

(3
)%
Construction
249,261

234,112

6
 %
 
468,138

434,418

8
 %
Total Gross Sales
887,387

850,841

4
 %
 
1,581,251

1,492,610

6
 %
Sales Allowances
(15,294
)
(12,670
)
 
 
(27,007
)
(21,415
)
 
Total Net Sales
$
872,093

$
838,171

 
 
$
1,554,244

$
1,471,195

 


Universal Forest Products, Inc.
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CONSOLIDATED CONDENSED BALANCE SHEETS (UNAUDITED)
JUNE 2016/2015
(In thousands)
 
 
 
 
 
ASSETS
2016
2015
LIABILITIES AND EQUITY
2016
2015
 
 
 
 
 
 
CURRENT ASSETS
 
 
CURRENT LIABILITIES
 
 
    Cash and cash equivalents
$
87,517

$
24,756

   Cash Overdraft
$
—

$
21,933

    Restricted cash
909

710

   Accounts payable
126,095

114,354

    Investments
9,740

—

   Accrued liabilities
111,995

97,069

    Accounts receivable
318,505

302,538

   Current portion of debt
1,093

893

    Inventories
297,796

330,235

 
 
 
    Other current assets
15,238

21,205

 
 
 
 
 
 
 
 
 
TOTAL CURRENT ASSETS
729,705

679,444

TOTAL CURRENT LIABILITIES
239,183

234,249

 
 
 
 
 
 
OTHER ASSETS
10,011

9,986

LONG-TERM DEBT AND
 
 
INTANGIBLE ASSETS, NET
197,891

192,505

CAPITAL LEASE OBLIGATIONS
84,530

122,303

PROPERTY, PLANT
 
 
OTHER LIABILITIES
51,158

50,302

    AND EQUIPMENT, NET
256,899

257,731

EQUITY
819,635

732,812

 
 
 
 
 
 
 
 
 
 
 
 
TOTAL ASSETS
$
1,194,506

$
1,139,666

TOTAL LIABILITIES AND EQUITY
$
1,194,506

$
1,139,666



















Universal Forest Products, Inc.
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CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)
FOR THE SIX MONTHS ENDED
JUNE 2016/2015
(In thousands)
2016
2015
CASH FLOWS FROM OPERATING ACTIVITIES:
 
 
Net earnings
$
54,493

$
37,688

Adjustments to reconcile net earnings to net cash from operating activities:
 
 
      Depreciation
19,178

18,406

      Amortization of intangibles
1,285

1,888

      Expense associated with share-based compensation arrangements
977

874

      Expense tax benefits from share-based compensation arrangements
—

(33
)
      Expense associated with stock grant plans
70

53

      Deferred income tax credit
55

3

      Equity in earnings of investee
(192
)
(195
)
      Net loss (gain) on disposition and impairment of assets
50

(162
)
      Changes in:
 
 
        Accounts receivable
(95,198
)
(104,929
)
        Inventories
7,564

9,806

        Accounts payable and cash overdraft
31,320

45,798

        Accrued liabilities and other
20,439

27,625

          NET CASH FROM OPERATING ACTIVITIES
40,041

36,822

 
 
 
CASH FLOWS FROM INVESTING ACTIVITIES:
 
 
Purchases of property, plant, and equipment
(24,269
)
(27,756
)
Proceeds from sale of property, plant and equipment
309

1,085

Acquisitions, net of cash received
(1,682
)
(2,584
)
Purchases of noncontrolling interest
(1,100
)
(1,256
)
Advances of notes receivable
(2,946
)
(3,083
)
Collections of notes receivable and related interest
3,731

7,059

Purchases of investments
(3,571
)
—

Proceeds from sale of investments
901

—

Cash restricted as to use
(323
)
(305
)
Other, net
(736
)
(58
)
          NET CASH FROM INVESTING ACTIVITIES
(29,686
)
(26,898
)
 
 
 
CASH FLOWS FROM FINANCING ACTIVITIES:
 
 
Borrowings under revolving credit facilities
3,162

259,734

Repayments under revolving credit facilities
(3,210
)
(235,993
)
Proceeds from issuance of common stock
290

724

Distributions to noncontrolling interest
(1,731
)
(1,250
)
Dividends paid to shareholders
(8,529
)
(8,050
)
Repurchase of common stock
—

(77
)
Other, net
(15
)
24

          NET CASH FROM FINANCING ACTIVITIES
(10,033
)
15,112

 
 
 
Effect of exchange rate changes on cash
(561
)
(280
)
NET CHANGE IN CASH AND CASH EQUIVALENTS
(239
)
24,756

 
 
 
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD
87,756

—

 
 
 
CASH AND CASH EQUIVALENTS, END OF PERIOD
$
87,517

$
24,756