Universal Forest Products, Inc. (UFPI) announced fourth quarter and full year 2009 results. During the quarter, Universal Forest posted a net loss of $0.66 million or $0.03 per share compared to a net loss of $0.79 million or $0.04 in the fourth quarter of 2008. The reported EPS exactly matched with the Zacks Consensus Estimate of a net loss of $0.03.
Full-year 2009 net earnings were $24.3 million or $1.25 per share versus net earnings of $4.3 million, or $0.23 in 2008. However, EPS was slightly below the Zacks Consensus Estimate of $1.29. The company’s continued focus on eliminating waste and critical basics like inventory and receivables have proven to be the right strategy in fragile times.
During the fourth quarter of 2009, net sales were $338.6 million, down from $423.7 million in the year-ago quarter. Full-year net sales were $1.7 billion versus $2.2 billion in 2008. The decline in net sales was due to a 12% drop in the average composite lumber price compared to 2008.
The Do-It-Yourself (DIY) segment reported net sales of $130.7 million in the quarter, a decrease of 14.8% from the same period of 2008. Annual gross DIY sales were $805.0 million, a decrease of 12.4% from 2008.
During the quarter, sales in the Industrial packaging and components were $111.6 million, down 8.5% from the same period in 2008. For the year, sales were $479.3 million reflecting a decrease of 20.0% from 2008.
Site-built construction reported net sales of $54.2 million in the fourth quarter, down 42.4% from the same period of 2008. During full year 2009, sales were $244.1 million, down 46% from 2008.
Manufactured housing sales in the quarter were $48.9 million, down from 15.2% from the year-ago quarter. Annual sales were $183.9 million, a decline of 39.4% from 2008.
To cope with a difficult housing environment, UFPI has closed a number of facilities in the U.S. and Canada and sold some others. The company expects to improve productivity by 15%. By 2012, UFPI targets to improve its profitability by 300 bps through cost reductions and productivity improvements.
The company is seeing positive results in the transition to a value-added producer from a pure commodity supplier. The former carries higher margins, entails less competition and increases the attractiveness to customers looking for a full product portfolio. In 2004, value-added product sales comprised 50.7% of total sales. Currently, value-added products sales comprise more than 60% of the company’s total sales.
Universal Forest Products is focusing more on expanding its industrial business into markets where it currently doesn’t have a major presence. This will make the company much more diverse regionally. The company aims to achieve sales of $3 billion by the year 2012.
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