x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Michigan | 38-1465835 | |||
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification Number) | |||
2801 East Beltline NE, Grand Rapids, Michigan | 49525 | |||
(Address of principal executive offices) | (Zip Code) |
NONE | ||
(Former name or former address, if changed since last report.) |
Large Accelerated Filer x | Accelerated Filer o | Non-Accelerated Filer o | Smaller reporting company o |
Class | Outstanding as of June 25, 2016 | |||
Common stock, no par value | 20,307,463 |
PART I. | FINANCIAL INFORMATION. | Page No. | |
Item 1. | Financial Statements. | ||
Item 2. | |||
Item 3. | |||
Item 4. | |||
PART II. | OTHER INFORMATION. | ||
Item 1. | Legal Proceedings – NONE. | ||
Item 1A. | Risk Factors – NONE. | ||
Item 2. | |||
Item 3. | Defaults upon Senior Securities – NONE. | ||
Item 4. | Mine Safety Disclosures – NONE. | ||
Item 5. | Other Information – NONE. | ||
Item 6. |
(in thousands, except share data) | |||||||||||
June 25, 2016 | December 26, 2015 | June 27, 2015 | |||||||||
ASSETS | |||||||||||
CURRENT ASSETS: | |||||||||||
Cash and cash equivalents | $ | 87,517 | $ | 87,756 | $ | 24,756 | |||||
Restricted cash | 909 | 586 | 710 | ||||||||
Investments | 9,740 | 6,743 | — | ||||||||
Accounts receivable, net | 318,505 | 222,964 | 302,538 | ||||||||
Inventories: | |||||||||||
Raw materials | 165,857 | 168,548 | 182,286 | ||||||||
Finished goods | 131,939 | 136,370 | 147,949 | ||||||||
Total inventories | 297,796 | 304,918 | 330,235 | ||||||||
Refundable income taxes | — | 7,784 | — | ||||||||
Deferred income taxes | — | — | 6,252 | ||||||||
Other current assets | 15,238 | 17,481 | 14,953 | ||||||||
TOTAL CURRENT ASSETS | 729,705 | 648,232 | 679,444 | ||||||||
DEFERRED INCOME TAXES | 2,541 | 1,312 | 1,171 | ||||||||
OTHER ASSETS | 7,470 | 8,298 | 8,815 | ||||||||
GOODWILL | 181,381 | 180,990 | 173,158 | ||||||||
INDEFINITE-LIVED INTANGIBLE ASSETS | 2,340 | 2,340 | 2,340 | ||||||||
OTHER INTANGIBLE ASSETS, NET | 14,170 | 15,357 | 17,007 | ||||||||
PROPERTY, PLANT AND EQUIPMENT: | |||||||||||
Property, plant and equipment | 649,652 | 628,045 | 628,269 | ||||||||
Less accumulated depreciation and amortization | (392,753 | ) | (376,895 | ) | (370,538 | ) | |||||
PROPERTY, PLANT AND EQUIPMENT, NET | 256,899 | 251,150 | 257,731 | ||||||||
TOTAL ASSETS | $ | 1,194,506 | $ | 1,107,679 | $ | 1,139,666 | |||||
LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||||||
CURRENT LIABILITIES: | |||||||||||
Cash overdraft | $ | — | $ | — | $ | 21,933 | |||||
Accounts payable | 126,095 | 95,041 | 114,354 | ||||||||
Accrued liabilities: | |||||||||||
Compensation and benefits | 74,919 | 78,877 | 60,941 | ||||||||
Income taxes | 1,755 | — | 8,894 | ||||||||
Other | 35,321 | 29,112 | 27,234 | ||||||||
Current portion of long-term debt | 1,093 | 1,145 | 893 | ||||||||
TOTAL CURRENT LIABILITIES | 239,183 | 204,175 | 234,249 | ||||||||
LONG-TERM DEBT | 84,530 | 84,750 | 122,303 | ||||||||
DEFERRED INCOME TAXES | 25,092 | 23,838 | 31,178 | ||||||||
OTHER LIABILITIES | 26,066 | 28,507 | 19,124 | ||||||||
TOTAL LIABILITIES | 374,871 | 341,270 | 406,854 | ||||||||
SHAREHOLDERS' EQUITY: | |||||||||||
Controlling interest shareholders' equity: | |||||||||||
Preferred stock, no par value; shares authorized 1,000,000; issued and outstanding, none | $ | — | $ | — | $ | — | |||||
Common stock, no par value; shares authorized 40,000,000; issued and outstanding, 20,307,463, 20,141,709, and 20,132,819. | 20,307 | 20,142 | 20,133 | ||||||||
Additional paid-in capital | 182,710 | 171,562 | 168,862 | ||||||||
Retained earnings | 609,718 | 565,636 | 530,346 | ||||||||
Accumulated other comprehensive income | (4,149 | ) | (4,585 | ) | 227 | ||||||
Employee stock notes receivable | — | — | (277 | ) | |||||||
Total controlling interest shareholders' equity | 808,586 | 752,755 | 719,291 | ||||||||
Noncontrolling interest | 11,049 | 13,654 | 13,521 | ||||||||
TOTAL SHAREHOLDERS' EQUITY | 819,635 | 766,409 | 732,812 | ||||||||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ | 1,194,506 | $ | 1,107,679 | $ | 1,139,666 |
(in thousands, except per share data) | |||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||
June 25, 2016 | June 27, 2015 | June 25, 2016 | June 27, 2015 | ||||||||||||
NET SALES | $ | 872,093 | $ | 838,171 | $ | 1,554,244 | $ | 1,471,195 | |||||||
COST OF GOODS SOLD | 740,606 | 725,728 | 1,320,018 | 1,279,170 | |||||||||||
GROSS PROFIT | 131,487 | 112,443 | 234,226 | 192,025 | |||||||||||
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES | 77,762 | 68,431 | 148,601 | 130,136 | |||||||||||
NET LOSS (GAIN) ON DISPOSITION AND IMPAIRMENT OF ASSETS | 60 | (176 | ) | 50 | (162 | ) | |||||||||
EARNINGS FROM OPERATIONS | 53,665 | 44,188 | 85,575 | 62,051 | |||||||||||
INTEREST EXPENSE | 1,103 | 1,382 | 2,179 | 2,555 | |||||||||||
INTEREST INCOME | (208 | ) | (32 | ) | (312 | ) | (167 | ) | |||||||
EQUITY IN EARNINGS OF INVESTEE | (110 | ) | (112 | ) | (192 | ) | (195 | ) | |||||||
785 | 1,238 | 1,675 | 2,193 | ||||||||||||
EARNINGS BEFORE INCOME TAXES | 52,880 | 42,950 | 83,900 | 59,858 | |||||||||||
INCOME TAXES | 18,643 | 16,066 | 29,407 | 22,170 | |||||||||||
NET EARNINGS | 34,237 | 26,884 | 54,493 | 37,688 | |||||||||||
LESS NET EARNINGS ATTRIBUTABLE TO NONCONTROLLING INTEREST | (839 | ) | (908 | ) | (1,882 | ) | (1,550 | ) | |||||||
NET EARNINGS ATTRIBUTABLE TO CONTROLLING INTEREST | $ | 33,398 | $ | 25,976 | $ | 52,611 | $ | 36,138 | |||||||
EARNINGS PER SHARE - BASIC | $ | 1.64 | $ | 1.29 | $ | 2.59 | $ | 1.79 | |||||||
EARNINGS PER SHARE - DILUTED | $ | 1.64 | $ | 1.28 | $ | 2.58 | $ | 1.79 | |||||||
NET EARNINGS | 34,237 | 26,884 | 54,493 | 37,688 | |||||||||||
OTHER COMPREHENSIVE LOSS | (807 | ) | (526 | ) | (365 | ) | (1,529 | ) | |||||||
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 |
(in thousands, except share and per share data) | |||||||||||||||||||||||||||
Controlling Interest Shareholders' Equity | |||||||||||||||||||||||||||
Common Stock | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehen- sive Earnings | Employees Stock Notes Receivable | Noncontrolling Interest | Total | |||||||||||||||||||||
Balance at December 27, 2014 | $ | 19,984 | $ | 162,483 | $ | 502,334 | $ | 1,348 | $ | (455 | ) | $ | 13,866 | $ | 699,560 | ||||||||||||
Net earnings | 36,138 | 1,550 | 37,688 | ||||||||||||||||||||||||
Foreign currency translation adjustment | (1,121 | ) | (408 | ) | (1,529 | ) | |||||||||||||||||||||
Noncontrolling interest associated with business acquisitions | 1,019 | 1,019 | |||||||||||||||||||||||||
Distributions to noncontrolling interest | (1,250 | ) | (1,250 | ) | |||||||||||||||||||||||
Purchases of noncontrolling interest | (1,256 | ) | (1,256 | ) | |||||||||||||||||||||||
Dividends $0.400 per share | (8,050 | ) | (8,050 | ) | |||||||||||||||||||||||
Issuance of 21,224 shares under employee stock plans | 21 | 703 | 724 | ||||||||||||||||||||||||
Issuance of 75,149 shares under stock grant programs | 75 | 1,780 | 1,855 | ||||||||||||||||||||||||
Issuance of 53,508 shares under deferred compensation plans | 54 | (54 | ) | — | |||||||||||||||||||||||
Repurchase of 1,513 shares | (1 | ) | (76 | ) | 77 | — | |||||||||||||||||||||
Tax benefits from non-qualified stock options exercised | 121 | 121 | |||||||||||||||||||||||||
Expense associated with share-based compensation arrangements | 874 | 874 | |||||||||||||||||||||||||
Accrued expense under deferred compensation plans | 2,955 | 2,955 | |||||||||||||||||||||||||
Payments received on employee stock notes receivable | 101 | 101 | |||||||||||||||||||||||||
Balance at June 27, 2015 | $ | 20,133 | $ | 168,862 | $ | 530,346 | $ | 227 | $ | (277 | ) | $ | 13,521 | $ | 732,812 | ||||||||||||
Balance at December 26, 2015 | 20,142 | 171,562 | 565,636 | (4,585 | ) | — | 13,654 | 766,409 | |||||||||||||||||||
Net earnings | 52,611 | 1,882 | 54,493 | ||||||||||||||||||||||||
Foreign currency translation adjustment | 250 | (801 | ) | (551 | ) | ||||||||||||||||||||||
Unrealized gain (loss) on investment & foreign currency | 186 | 186 | |||||||||||||||||||||||||
Distributions to noncontrolling interest | (1,731 | ) | (1,731 | ) | |||||||||||||||||||||||
Purchases of noncontrolling interest | 855 | (1,955 | ) | (1,100 | ) | ||||||||||||||||||||||
Dividends $0.420 per share | (8,529 | ) | (8,529 | ) | |||||||||||||||||||||||
Issuance of 3,708 shares under employee stock plans | 3 | 287 | 290 | ||||||||||||||||||||||||
Issuance of 114,132 shares under stock grant programs | 114 | 5,134 | 5,248 | ||||||||||||||||||||||||
Issuance of 47,914 shares under deferred compensation plans | 48 | (48 | ) | — | |||||||||||||||||||||||
Expense associated with share-based compensation arrangements | 977 | 977 | |||||||||||||||||||||||||
Accrued expense under deferred compensation plans | 3,943 | 3,943 | |||||||||||||||||||||||||
Balance at June 25, 2016 | $ | 20,307 | $ | 182,710 | $ | 609,718 | $ | (4,149 | ) | $ | — | $ | 11,049 | $ | 819,635 |
Six Months Ended | |||||||
June 25, 2016 | June 27, 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 | |||||
Excess tax benefits from share-based compensation arrangements | — | (33 | ) | ||||
Expense associated with stock grant plans | 70 | 53 | |||||
Deferred income taxes | 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 | ) | |||
Purchase of remaining noncontrolling interest of subsidiary | (1,100 | ) | (1,256 | ) | |||
Advances of notes receivable | (2,946 | ) | (3,083 | ) | |||
Collections on notes receivable | 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 USED IN 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 (USED IN) 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 YEAR | 87,756 | — | |||||
CASH AND CASH EQUIVALENTS, END OF PERIOD | $ | 87,517 | $ | 24,756 | |||
SUPPLEMENTAL INFORMATION: | |||||||
Interest paid | $ | 2,220 | $ | 2,430 | |||
Income taxes paid | 19,789 | 1,375 | |||||
NON-CASH INVESTING ACTIVITIES | |||||||
Notes receivable exchanged for property | — | 389 | |||||
NON-CASH FINANCING ACTIVITIES: | |||||||
Common stock issued under deferred compensation plans | 3,375 | 2,728 |
A. | BASIS OF PRESENTATION |
B. | FAIR VALUE |
June 25, 2016 | June 27, 2015 | ||||||||||||||||||||||
(in thousands) | Quoted Prices in Active Markets (Level 1) | Prices with Other Observable Inputs (Level 2) | Total | Quoted Prices in Active Markets (Level 1) | Prices with Other Observable Inputs (Level 2) | Total | |||||||||||||||||
Money market funds | $ | 65 | $ | 506 | $ | 571 | $ | 6,162 | $ | — | $ | 6,162 | |||||||||||
Fixed income funds | 1,935 | 2,383 | 4,318 | — | — | — | |||||||||||||||||
Equity securities | 4,944 | — | 4,944 | — | — | — | |||||||||||||||||
Mutual funds: | |||||||||||||||||||||||
Domestic stock funds | 756 | — | 756 | 250 | — | 250 | |||||||||||||||||
International stock funds | 69 | — | 69 | 71 | — | 71 | |||||||||||||||||
Target funds | 231 | — | 231 | 240 | — | 240 | |||||||||||||||||
Bond funds | 199 | — | 199 | 173 | — | 173 | |||||||||||||||||
Total mutual funds | 1,255 | — | 1,255 | 734 | — | 734 | |||||||||||||||||
Assets at fair value | $ | 8,199 | $ | 2,889 | $ | 11,088 | $ | 6,896 | $ | — | $ | 6,896 |
Unrealized | |||||||||||
Cost | Gain/(Loss) | Fair Value | |||||||||
Fixed Income | $ | 4,283 | $ | 32 | $ | 4,315 | |||||
Equity | 4,751 | 193 | 4,944 | ||||||||
Mutual Funds | $ | 481 | $ | — | $ | 481 | |||||
Total | $ | 9,515 | $ | 225 | $ | 9,740 |
C. | REVENUE RECOGNITION |
June 25, 2016 | December 26, 2015 | June 27, 2015 | |||||||||
Cost and Earnings in Excess of Billings | $ | 2,835 | $ | 3,624 | $ | 4,842 | |||||
Billings in Excess of Cost and Earnings | 5,407 | 4,978 | 3,347 |
D. | EARNINGS PER SHARE |
Three Months Ended | Six Months Ended | ||||||||||||||
June 25, 2016 | June 27, 2015 | June 25, 2016 | June 27, 2015 | ||||||||||||
Numerator: | |||||||||||||||
Net earnings attributable to controlling interest | $ | 33,398 | $ | 25,976 | $ | 52,611 | $ | 36,138 | |||||||
Adjustment for earnings allocated to non-vested restricted common stock | (557 | ) | (347 | ) | (816 | ) | (462 | ) | |||||||
Net earnings for calculating EPS | $ | 32,841 | $ | 25,629 | $ | 51,795 | $ | 35,676 | |||||||
Denominator: | |||||||||||||||
Weighted average shares outstanding | 20,387 | 20,198 | 20,335 | 20,147 | |||||||||||
Adjustment for non-vested restricted common stock | (340 | ) | (270 | ) | (315 | ) | (258 | ) | |||||||
Shares for calculating basic EPS | 20,047 | 19,928 | 20,020 | 19,889 | |||||||||||
Effect of dilutive stock options | 31 | 33 | 31 | 33 | |||||||||||
Shares for calculating diluted EPS | 20,078 | 19,961 | 20,051 | 19,922 | |||||||||||
Net earnings per share: | |||||||||||||||
Basic | $ | 1.64 | $ | 1.29 | $ | 2.59 | $ | 1.79 | |||||||
Diluted | $ | 1.64 | $ | 1.28 | $ | 2.58 | $ | 1.79 |
F. | BUSINESS COMBINATIONS |
Company Name | Acquisition Date | Purchase Price | Intangible Assets | Net Tangible Assets | Operating Segment | Business Description |
Packnet Ltd (“Packnet”) | November 24, 2014 (majority interest) April 15, 2016 (minority interest) | $9,383 cash paid for asset purchase | $7,885 | $1,498 | West | A supplier of industrial packaging and services based in Eagan, MN. Packnet had annual sales of $9.6 million. |
Capital Components & Millwork, Inc. ("CCM") | April 15, 2016 | $1,682 cash paid for asset purchase $205 assumed liability | $— | $1,887 | North | A producer of doors and trim for customers in the greater Washington, D.C., metro area and Virginia. CCM had approximately $16.6 million in annual sales. |
Rapid Wood Mfg., LLC (“Rapid Wood”) | February 2, 2015 | $1,638 cash paid for asset purchase | $789 | $849 | West | A supplier of lumber products to the region’s manufactured housing and recreational vehicle industries based in Caldwell, Idaho. Rapid Wood had annual sales of $3.5 million in 2015. |
Integra Packaging Proprietary, Ltd (“Integra Packaging”) | January 16, 2015 | $1,102 cash paid for 51.94% stock purchase | $1,406 (The Company portion of Intangible Assets $730 or 51.94%) | $715 (The Company portion of Net Tangible Assets $372 or 51.94%) | All Other | An Australian-based manufacturer and distributor of industrial wood specialty packaging products. Integra Packaging had annual sales of $7.6 million in 2015. |
G. | SEGMENT REPORTING |
Three Months Ended June 25, 2016 | |||||||||||||||||||||
North | South | West | All Other | Corporate | Total | ||||||||||||||||
Net sales to outside customers | $ | 288,185 | 194,425 | $ | 326,619 | $ | 62,864 | $ | — | $ | 872,093 | ||||||||||
Intersegment net sales | 14,638 | 9,860 | 21,015 | 6,535 | — | 52,048 | |||||||||||||||
Segment operating profit | 19,136 | 13,794 | 21,153 | 6,021 | (6,439 | ) | 53,665 |
Three Months Ended June 27, 2015 | |||||||||||||||||||||
North | South | West | All Other | Corporate | Total | ||||||||||||||||
Net sales to outside customers | $ | 281,333 | 185,497 | $ | 309,511 | $ | 61,830 | $ | — | $ | 838,171 | ||||||||||
Intersegment net sales | 14,510 | 7,604 | 15,476 | 4,566 | — | 42,156 | |||||||||||||||
Segment operating profit | 16,394 | 7,997 | 18,272 | 2,997 | (1,472 | ) | 44,188 |
Six Months Ended June 25, 2016 | |||||||||||||||||||||
North | South | West | All Other | Corporate | Total | ||||||||||||||||
Net sales to outside customers | $ | 490,910 | 359,524 | $ | 604,207 | $ | 99,603 | $ | — | $ | 1,554,244 | ||||||||||
Intersegment net sales | 27,752 | 19,051 | 43,271 | 11,985 | — | 102,059 | |||||||||||||||
Segment operating profit (loss) | 28,425 | 25,930 | 38,472 | 8,582 | (15,834 | ) | 85,575 |
Six Months Ended June 27, 2015 | |||||||||||||||||||||
North | South | West | All Other | Corporate | Total | ||||||||||||||||
Net sales to outside customers | $ | 460,832 | 349,692 | $ | 567,090 | $ | 93,581 | $ | — | $ | 1,471,195 | ||||||||||
Intersegment net sales | 24,319 | 14,803 | 25,102 | 8,463 | — | 72,687 | |||||||||||||||
Segment operating profit | 19,105 | 13,999 | 28,790 | 1,850 | (1,693 | ) | 62,051 |
H. | INCOME TAXES |
I. | SUBSEQUENT EVENTS |
• | Our gross sales increased by 4% compared to the second quarter of 2015, which was comprised of a 3% increase in unit sales and a 1% increase in selling prices due to the commodity lumber market (See Historical Lumber Prices). Our unit sales increased to the retail and construction markets and more than offset a decline in unit sales to the industrial market. |
• | Our operating profits increased by over 21%, and our operating profit as a percentage of net sales increased to 6.2% from 5.3%, comparing the second quarter of 2016 and 2015, respectively. These improvements primarily resulted from a combination of organic unit sales growth and leveraging fixed costs, favorable improvements in product sales mix, and opportunistic buying resulting in lower lumber costs relative to our selling prices in certain product lines. |
Random Lengths Composite Average $/MBF | |||||||
2016 | 2015 | ||||||
January | $ | 316 | $ | 375 | |||
February | 310 | 358 | |||||
March | 321 | 336 | |||||
April | 345 | 334 | |||||
May | 356 | 315 | |||||
June | 353 | 328 | |||||
Second quarter average | $ | 351 | $ | 326 | |||
Year-to-date average | $ | 334 | $ | 341 | |||
Second quarter percentage change | 7.7 | % | |||||
Year-to-date percentage change | (2.1 | )% |
Random Lengths SYP Average $/MBF | |||||||
2016 | 2015 | ||||||
January | $ | 358 | $ | 408 | |||
February | 357 | 399 | |||||
March | 366 | 393 | |||||
April | 389 | 400 | |||||
May | 397 | 368 | |||||
June | 382 | 354 | |||||
Second quarter average | $ | 389 | $ | 374 | |||
Year-to-date average | $ | 375 | $ | 387 | |||
Second quarter percentage change | 4.0 | % | |||||
Year-to-date percentage change | (3.1 | )% |
• | Products with fixed selling prices. These products include value-added products such as deck components and fencing sold to retail customers, as well as trusses, wall panels and other components sold to the construction market, and most industrial packaging products. Prices for these products are generally fixed at the time of the sales quotation for a specified period of time or are based upon a specific quantity. In order to maintain margins and reduce any exposure to adverse trends in the price of component lumber products, we attempt to lock in costs with our suppliers for these sales commitments. Also, the time period and quantity limitations generally allow us to re-price our products for changes in lumber costs from our suppliers. |
• | Products with selling prices indexed to the reported Lumber Market with a fixed dollar "adder" to cover conversion costs and profits. These products primarily include treated lumber, remanufactured lumber, and trusses sold to the manufactured housing industry. For these products, we estimate the customers' needs and we carry anticipated levels of inventory. Because lumber costs are incurred in advance of final sale prices, subsequent increases or decreases in the market price of lumber impact our gross margins. For these products, our margins are exposed to changes in the trend of lumber prices. |
• | Products with significant inventory levels with low turnover rates, whose selling prices are indexed to the Lumber Market. In other words, the longer the period of time these products remain in inventory, the greater the exposure to changes in the price of lumber. This would include treated lumber, which comprises approximately 20% of our total sales. This exposure is less significant with remanufactured lumber, trusses sold to the manufactured housing market, and other similar products, due to the higher rate of inventory turnover. We attempt to mitigate the risk associated with treated lumber through vendor consignment inventory programs. (Please refer to the “Risk Factors” section of our annual report on form 10-K, filed with the United States Securities and Exchange Commission.) |
• | Products with fixed selling prices sold under long-term supply arrangements, particularly those involving multi-family construction projects. We attempt to mitigate this risk through our purchasing practices by locking in costs. |
Period 1 | Period 2 | ||||||
Lumber cost | $ | 300 | $ | 400 | |||
Conversion cost | 50 | 50 | |||||
= Product cost | 350 | 450 | |||||
Adder | 50 | 50 | |||||
= Sell price | $ | 400 | $ | 500 | |||
Gross margin | 12.5 | % | 10.0 | % |
Three Months Ended | Six Months Ended | |||||||
June 25, 2016 | June 27, 2015 | June 25, 2016 | June 27, 2015 | |||||
Net sales | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % |
Cost of goods sold | 84.9 | 86.6 | 84.9 | 87.0 | ||||
Gross profit | 15.1 | 13.4 | 15.1 | 13.0 | ||||
Selling, general, and administrative expenses | 8.9 | 8.2 | 9.6 | 8.8 | ||||
Net gain on disposition and impairment of assets | — | — | — | — | ||||
Earnings from operations | 6.2 | 5.3 | 5.5 | 4.2 | ||||
Other expense (income), net | 0.1 | 0.2 | 0.1 | 0.2 | ||||
Earnings before income taxes | 6.1 | 5.1 | 5.4 | 4.0 | ||||
Income taxes | 2.1 | 2.0 | 1.9 | 1.5 | ||||
Net earnings | 3.9 | 3.2 | 3.5 | 2.6 | ||||
Less net earnings attributable to noncontrolling interest | (0.1 | ) | (0.1 | ) | (0.1 | ) | (0.1 | ) |
Net earnings attributable to controlling interest | 3.8 | % | 3.1 | % | 3.4 | % | 2.5 | % |
• | Diversifying our end market sales mix by increasing sales of specialty wood packaging to industrial users, increasing our penetration of the commercial construction market, increasing our sales of engineered wood components and complimentary products for custom home, multi-family, military and light commercial construction, and increasing our market share with independent retailers. |
• | Expanding geographically in our core businesses, domestically and internationally. |
• | Increasing sales of “value-added” products, which primarily consist of fencing, decking, lattice, and other specialty products sold to the retail market, specialty wood packaging, engineered wood components, and “wood alternative” products. Engineered wood components include roof trusses, wall panels, and floor systems. Wood alternative products consist primarily of composite wood and plastics. Although we consider the treatment of dimensional lumber with certain chemical preservatives a value-added process, treated lumber, which comprises approximately 20% of our total sales, is not presently included in value-added sales. |
• | Developing new products and expanding our product offering for existing customers. New product sales were $91.2 million in the second quarter of 2016 compared to $83.6 million during the second quarter of 2015. New product sales year-to-date for 2016 and 2015 were $160.7 million and $135.6 million, respectively. Certain prior year product reclassifications resulted in an increase in new product sales in 2015. |
• | Maximizing unit sales growth while achieving return on investment goals. |
(in thousands) | Three Months Ended | Six Months Ended | ||||||||||||||
Market Classification | June 25, 2016 | June 27, 2015 | % Change | June 25, 2016 | June 27, 2015 | % Change | ||||||||||
Retail | $ | 406,738 | $ | 378,357 | 7.5 | $ | 677,481 | $ | 609,804 | 11.1 | ||||||
Industrial | 231,388 | 238,372 | (2.9 | ) | 435,632 | 448,388 | (2.8 | ) | ||||||||
Construction | 249,261 | 234,112 | 6.5 | 468,138 | 434,418 | 7.8 | ||||||||||
Total Gross Sales | 887,387 | 850,841 | 4.3 | 1,581,251 | 1,492,610 | 5.9 | ||||||||||
Sales Allowances | (15,294 | ) | (12,670 | ) | 20.7 | (27,007 | ) | (21,415 | ) | 26.1 | ||||||
Total Net Sales | $ | 872,093 | $ | 838,171 | 4.0 | $ | 1,554,244 | $ | 1,471,195 | 5.6 |
• | Non-residential construction activity in April and May increased approximately 1.6%. |
• | National housing starts increased approximately 6.7% in the period from March through May 2016 (our sales trail housing starts by about a month) compared to the same period of 2015. |
• | Production of HUD-code homes in April and May 2016 were up 13.3% compared to 2015. |
• | Modular home production increased by 11.7% in the first quarter of 2016 compared to the same period in 2015. |
Three Months Ended | Six Months Ended | ||||||||||
June 25, 2016 | June 27, 2015 | June 25, 2016 | June 27, 2015 | ||||||||
Value-Added | 60.3 | % | 59.4 | % | 60.6 | % | 58.7 | % | |||
Commodity-Based | 39.7 | % | 40.6 | % | 39.4 | % | 41.3 | % |
• | $2.1 million of our gross profit increase was due to unit sales growth and a slight improvement in margin on sales to our residential construction customers. |
• | $11.4 million of our gross profit increase was attributable to our unit sales growth to the retail market and an improvement in margin on these sales due, in part, to new products. |
• | $2.5 million of our gross profit improvement was due to margin improvements on our sales to the industrial market resulting from improvements in our sales mix of more value-added products and lower lumber costs from opportunistic buying relative to our selling prices. |
Net Sales | Earnings from Operations | |||||||||||||||||||||||
(in thousands) | Three Months Ended | Three Months Ended | ||||||||||||||||||||||
June 25, 2016 | June 27, 2015 | $ Change | % Change | June 25, 2016 | June 27, 2015 | $ Change | % Change | |||||||||||||||||
North | $ | 288,185 | $ | 281,333 | $ | 6,852 | 2.4 | % | $ | 19,136 | $ | 16,394 | $ | 2,742 | 16.7 | % | ||||||||
South | 194,425 | 185,497 | 8,928 | 4.8 | % | 13,794 | 7,997 | 5,797 | 72.5 | % | ||||||||||||||
West | 326,619 | 309,511 | 17,108 | 5.5 | % | 21,153 | 18,272 | 2,881 | 15.8 | % | ||||||||||||||
All Other | 62,864 | 61,830 | 1,034 | 1.7 | % | 6,021 | 2,997 | 3,024 | 100.9 | % | ||||||||||||||
Corporate1 | — | — | — | (6,439 | ) | (1,472 | ) | (4,967 | ) | (337 | )% | |||||||||||||
Total | $ | 872,093 | $ | 838,171 | $ | 33,922 | 4.0 | % | $ | 53,665 | $ | 44,188 | $ | 9,477 | 21.4 | % |
Net Sales | Earnings from Operations | |||||||||||||||||||||||
(in thousands) | Six Months Ended | Six Months Ended | ||||||||||||||||||||||
June 25, 2016 | June 27, 2015 | $ Change | % Change | June 25, 2016 | June 27, 2015 | $ Change | % Change | |||||||||||||||||
North | $ | 490,910 | $ | 460,832 | $ | 30,078 | 6.5 | % | $ | 28,425 | $ | 19,105 | $ | 9,320 | 48.8 | % | ||||||||
South | 359,524 | 349,692 | 9,832 | 2.8 | % | 25,930 | 13,999 | 11,931 | 85.2 | % | ||||||||||||||
West | 604,207 | 567,090 | 37,117 | 6.5 | % | 38,472 | 28,790 | 9,682 | 33.6 | % | ||||||||||||||
All Other | 99,603 | 93,581 | 6,022 | 6.4 | % | 8,582 | 1,850 | 6,732 | 363.9 | % | ||||||||||||||
Corporate1 | — | — | — | (15,834 | ) | (1,693 | ) | (14,141 | ) | (835.3 | )% | |||||||||||||
Total | $ | 1,554,244 | $ | 1,471,195 | $ | 83,049 | 5.6 | % | $ | 85,575 | $ | 62,051 | $ | 23,524 | 37.9 | % |
North Segment by Market | ||||||||||||||||
(in thousands) | Three Months Ended | Six Months Ended | ||||||||||||||
Market Classification | June 25, 2016 | June 27, 2015 | % Change | June 25, 2016 | June 27, 2015 | % Change | ||||||||||
Retail | $ | 152,643 | $ | 147,755 | 3.3 | $ | 237,447 | $ | 214,715 | 10.6 | ||||||
Industrial | 32,003 | 33,523 | (4.5 | ) | 60,986 | 63,003 | (3.2 | ) | ||||||||
Construction | 109,739 | 105,600 | 3.9 | 202,004 | 191,114 | 5.7 | ||||||||||
Total Gross Sales | 294,385 | 286,878 | 2.6 | 500,437 | 468,832 | 6.7 | ||||||||||
Sales Allowances | (6,200 | ) | (5,545 | ) | 11.8 | (9,527 | ) | (8,000 | ) | 19.1 | ||||||
Total Net Sales | $ | 288,185 | $ | 281,333 | 2.4 | $ | 490,910 | $ | 460,832 | 6.5 |
South Segment by Market | ||||||||||||||||
(in thousands) | Three Months Ended | Six Months Ended | ||||||||||||||
Market Classification | June 25, 2016 | June 27, 2015 | % Change | June 25, 2016 | June 27, 2015 | % Change | ||||||||||
Retail | $ | 92,123 | $ | 87,120 | 5.7 | % | $ | 163,982 | $ | 157,934 | 3.8 | % | ||||
Industrial | 65,162 | 66,830 | (2.5 | )% | 125,249 | 131,028 | (4.4 | )% | ||||||||
Construction | 41,180 | 35,038 | 17.5 | % | 77,432 | 66,995 | 15.6 | % | ||||||||
Total Gross Sales | 198,465 | 188,988 | 5.0 | % | 366,663 | 355,957 | 3.0 | % | ||||||||
Sales Allowances | (4,040 | ) | (3,491 | ) | 15.7 | % | (7,139 | ) | (6,265 | ) | 14.0 | % | ||||
Total Net Sales | $ | 194,425 | $ | 185,497 | 4.8 | % | $ | 359,524 | $ | 349,692 | 2.8 | % |
West Segment by Market | ||||||||||||||||
(in thousands) | Three Months Ended | Six Months Ended | ||||||||||||||
Market Classification | June 25, 2016 | June 27, 2015 | % Change | June 25, 2016 | June 27, 2015 | % Change | ||||||||||
Retail | $ | 114,216 | $ | 98,534 | 15.9 | % | $ | 199,495 | $ | 170,081 | 17.3 | % | ||||
Industrial | 118,786 | 121,351 | (2.1 | )% | 224,304 | 227,721 | (1.5 | )% | ||||||||
Construction | 98,339 | 93,472 | 5.2 | % | 188,702 | 176,308 | 7.0 | % | ||||||||
Total Gross Sales | 331,341 | 313,357 | 5.7 | % | 612,501 | 574,110 | 6.7 | % | ||||||||
Sales Allowances | (4,722 | ) | (3,846 | ) | 22.8 | % | (8,294 | ) | (7,020 | ) | 18.1 | % | ||||
Total Net Sales | $ | 326,619 | $ | 309,511 | 5.5 | % | $ | 604,207 | $ | 567,090 | 6.5 | % |
All Other Segment by Market | ||||||||||||||||
(in thousands) | Three Months Ended | Six Months Ended | ||||||||||||||
Market Classification | June 25, 2016 | June 27, 2015 | % Change | June 25, 2016 | June 27, 2015 | % Change | ||||||||||
Retail | $ | 47,756 | $ | 44,949 | 6.2 | % | $ | 76,557 | $ | 67,074 | 14.1 | % | ||||
Industrial | 15,437 | 16,668 | (7.4 | )% | 25,093 | 26,636 | (5.8 | )% | ||||||||
Construction | 3 | 2 | 50.0 | % | — | 1 | (100.0 | )% | ||||||||
Total Gross Sales | 63,196 | 61,619 | 2.6 | % | 101,650 | 93,711 | 8.5 | % | ||||||||
Sales Allowances | (332 | ) | 211 | (257.3 | )% | (2,047 | ) | (130 | ) | 1,474.6 | % | |||||
Total Net Sales | $ | 62,864 | $ | 61,830 | 1.7 | % | $ | 99,603 | $ | 93,581 | 6.4 | % |
Six Months Ended | |||||||
June 25, 2016 | June 27, 2015 | ||||||
Cash from operating activities | $ | 40,041 | $ | 36,822 | |||
Cash used in investing activities | (29,686 | ) | (26,898 | ) | |||
Cash (used in) 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 |
Six Months Ended | |||||||
June 25, 2016 | June 27, 2015 | ||||||
Days of sales outstanding | $ | 31 | $ | 31 | |||
Days supply of inventory | 38 | 46 | |||||
Days payables outstanding | (21 | ) | (21 | ) | |||
Days in cash cycle | 48 | 56 |
(a) | Evaluation of Disclosure Controls and Procedures. With the participation of management, our chief executive officer and chief financial officer, after evaluating the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a – 15e and 15d – 15e) as of the quarter ended June 25, 2016 (the “Evaluation Date”), have concluded that, as of such date, our disclosure controls and procedures were effective. |
(b) | Changes in Internal Controls. During the quarter ended June 25, 2016, there were no changes in our internal control over financial reporting that materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. |
(a) | None. |
(b) | None. |
(c) | Issuer purchases of equity securities. |
Fiscal Month | (a) | (b) | (c) | (d) | ||||
March 27 - April 30, 2016 | 2,869,603 | |||||||
May 1 - May 28, 2016 | 2,869,603 | |||||||
May 29 – June 25, 2016 | 2,869,603 |
(a) | Total number of shares purchased. |
(b) | Average price paid per share. |
(c) | Total number of shares purchased as part of publicly announced plans or programs. |
(d) | Maximum number of shares that may yet be purchased under the plans or programs. |
31 | Certifications. | |
(a) | Certificate of the Chief Executive Officer of Universal Forest Products, Inc., pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350). | |
(b) | Certificate of the Chief Financial Officer of Universal Forest Products, Inc., pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350). | |
32 | Certifications. | |
(a) | Certificate of the Chief Executive Officer of Universal Forest Products, Inc., pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350). | |
(b) | Certificate of the Chief Financial Officer of Universal Forest Products, Inc., pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350). | |
101 | Interactive Data File. | |
(INS) | XBRL Instance Document. | |
(SCH) | XBRL Schema Document. | |
(CAL) | XBRL Taxonomy Extension Calculation Linkbase Document. | |
(LAB) | XBRL Taxonomy Extension Label Linkbase Document. | |
(PRE) | XBRL Taxonomy Extension Presentation Linkbase Document. | |
(DEF) | XBRL Taxonomy Extension Definition Linkbase Document. |
* | Indicates a compensatory arrangement. |
UNIVERSAL FOREST PRODUCTS, INC. | ||
Date: July 27, 2016 | By: | /s/ Matthew J. Missad |
Matthew J. Missad, | ||
Chief Executive Officer and Principal Executive Officer | ||
Date: July 27, 2016 | By: | /s/ Michael R. Cole |
Michael R. Cole, | ||
Chief Financial Officer, | ||
Principal Financial Officer and | ||
Principal Accounting Officer |
Exhibit No. | Description | ||
31 | Certifications. | ||
(a) | Certificate of the Chief Executive Officer of Universal Forest Products, Inc., pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350). | ||
(b) | Certificate of the Chief Financial Officer of Universal Forest Products, Inc., pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350). | ||
32 | Certifications. | ||
(a) | Certificate of the Chief Executive Officer of Universal Forest Products, Inc., pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350). | ||
(b) | Certificate of the Chief Financial Officer of Universal Forest Products, Inc., pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350). | ||
101 | Interactive Data File. | ||
(INS) | XBRL Instance Document. | ||
(SCH) | XBRL Schema Document. | ||
(CAL) | XBRL Taxonomy Extension Calculation Linkbase Document. | ||
(LAB) | XBRL Taxonomy Extension Label Linkbase Document. | ||
(PRE) | XBRL Taxonomy Extension Presentation Linkbase Document. | ||
(DEF) | XBRL Taxonomy Extension Definition Linkbase Document |
* | Indicates a compensatory arrangement. |
1. | I have reviewed this report on Form 10-Q of Universal Forest Products, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report, based on such evaluation; and |
d. | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent function): |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
Date: July 27, 2016 | /s/ Matthew J. Missad | |
Matthew J. Missad, | ||
Chief Executive Officer and Principal Executive Officer |
1. | I have reviewed this report on Form 10-Q of Universal Forest Products, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report, based on such evaluation; and |
d. | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent function): |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
Date: July 27, 2016 | /s/ Michael R. Cole | |
Michael R. Cole | ||
Chief Financial Officer and Principal Accounting Officer |
(1) | The quarterly report on Form 10-Q for the quarterly period ended June 25, 2016, which this statement accompanies, fully complies with requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in this quarterly report on Form 10-Q for the quarterly period ended June 25, 2016 fairly presents, in all material respects, the financial condition and results of operations of Universal Forest Products, Inc. |
UNIVERSAL FOREST PRODUCTS, INC. | ||
Date: July 27, 2016 | By: /s/ Matthew J. Missad | |
Matthew J. Missad, | ||
Chief Executive Officer and Principal Executive Officer |
(1) | The quarterly report on Form 10-Q for the quarterly period ended June 25, 2016, which this statement accompanies, fully complies with requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in this quarterly report on Form 10-Q for the quarterly period ended June 25, 2016 fairly presents, in all material respects, the financial condition and results of operations of Universal Forest Products, Inc. |
UNIVERSAL FOREST PRODUCTS, INC. | ||
Date: July 27, 2016 | By: /s/ Michael R. Cole | |
Michael R. Cole, | ||
Chief Financial Officer and Principal Financial Officer |
Document and Entity Information |
6 Months Ended |
---|---|
Jun. 25, 2016
shares
| |
Document and Entity Information [Abstract] | |
Entity Registrant Name | UNIVERSAL FOREST PRODUCTS INC |
Entity Central Index Key | 0000912767 |
Current Fiscal Year End Date | --12-31 |
Entity Filer Category | Large Accelerated Filer |
Entity Common Stock, Shares Outstanding (in shares) | 20,307,463 |
Document Fiscal Year Focus | 2016 |
Document Fiscal Period Focus | Q2 |
Document Type | 10-Q |
Amendment Flag | false |
Document Period End Date | Jun. 25, 2016 |
CONSOLIDATED CONDENSED BALANCE SHEETS (Unaudited) (Parenthetical) - shares |
Jun. 25, 2016 |
Dec. 26, 2015 |
Jun. 27, 2015 |
---|---|---|---|
SHAREHOLDERS' EQUITY: | |||
Preferred stock, shares authorized (in shares) | 1,000,000 | 1,000,000 | 1,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 | 0 |
Common stock, shares authorized (in shares) | 40,000,000 | 40,000,000 | 40,000,000 |
Common stock, shares issued (in shares) | 20,307,463 | 20,141,709 | 20,132,819 |
Common stock, shares outstanding (in shares) | 20,307,463 | 20,141,709 | 20,132,819 |
CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS AND COMPREHENSIVE INCOME (Unaudited) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 25, 2016 |
Jun. 27, 2015 |
Jun. 25, 2016 |
Jun. 27, 2015 |
|
Income Statement [Abstract] | ||||
NET SALES | $ 872,093 | $ 838,171 | $ 1,554,244 | $ 1,471,195 |
COST OF GOODS SOLD | 740,606 | 725,728 | 1,320,018 | 1,279,170 |
GROSS PROFIT | 131,487 | 112,443 | 234,226 | 192,025 |
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES | 77,762 | 68,431 | 148,601 | 130,136 |
NET LOSS (GAIN) ON DISPOSITION AND IMPAIRMENT OF ASSETS | 60 | (176) | 50 | (162) |
EARNINGS FROM OPERATIONS | 53,665 | 44,188 | 85,575 | 62,051 |
INTEREST EXPENSE | 1,103 | 1,382 | 2,179 | 2,555 |
INTEREST INCOME | (208) | (32) | (312) | (167) |
EQUITY IN EARNINGS OF INVESTEE | (110) | (112) | (192) | (195) |
NON-OPERATING (INCOME)/EXPENSE | 785 | 1,238 | 1,675 | 2,193 |
EARNINGS BEFORE INCOME TAXES | 52,880 | 42,950 | 83,900 | 59,858 |
INCOME TAXES | 18,643 | 16,066 | 29,407 | 22,170 |
NET EARNINGS | 34,237 | 26,884 | 54,493 | 37,688 |
LESS NET EARNINGS ATTRIBUTABLE TO NONCONTROLLING INTEREST | (839) | (908) | (1,882) | (1,550) |
NET EARNINGS ATTRIBUTABLE TO CONTROLLING INTEREST | $ 33,398 | $ 25,976 | $ 52,611 | $ 36,138 |
EARNINGS PER SHARE - BASIC (USD per share) | $ 1.64 | $ 1.29 | $ 2.59 | $ 1.79 |
EARNINGS PER SHARE - DILUTED (USD per share) | $ 1.64 | $ 1.28 | $ 2.58 | $ 1.79 |
Net earnings | $ 34,237 | $ 26,884 | $ 54,493 | $ 37,688 |
OTHER COMPREHENSIVE LOSS | (807) | (526) | (365) | (1,529) |
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 |
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Unaudited) (Parenthetical) - $ / shares |
6 Months Ended | |
---|---|---|
Jun. 25, 2016 |
Jun. 27, 2015 |
|
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Cash dividends per share (USD per share) | $ 0.420 | $ 0.400 |
Issuance of shares under employee stock plans (in shares) | 3,708 | 21,224 |
Issuance of shares under stock grant programs (in shares) | 114,132 | 75,149 |
Issuance of shares under deferred compensation plans (in shares) | 47,914 | 53,508 |
Repurchase of shares (in shares) | 0 | 1,513 |
BASIS OF PRESENTATION |
6 Months Ended |
---|---|
Jun. 25, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BASIS OF PRESENTATION | BASIS OF PRESENTATION The accompanying unaudited interim consolidated condensed financial statements (the "Financial Statements") include our accounts and those of our wholly-owned and majority-owned subsidiaries and partnerships, and have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Accordingly, the Financial Statements do not include all of the information and footnotes normally included in the annual consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States. All intercompany transactions and balances have been eliminated. In our opinion, the Financial Statements contain all material adjustments necessary to present fairly our consolidated financial position, results of operations and cash flows for the interim periods presented. All such adjustments are of a normal recurring nature. These Financial Statements should be read in conjunction with the annual consolidated financial statements, and footnotes thereto, included in our Annual Report to Shareholders on Form 10-K for the fiscal year ended December 26, 2015. Seasonality has a significant impact on our working capital from March to August which historically results in negative or modest cash flows from operations in our first and second quarters. Conversely, we experience a substantial decrease in working capital from September to February which typically results in significant cash flow from operations in our third and fourth quarters. For comparative purposes, we have included the June 27, 2015 balances in the accompanying unaudited consolidated condensed balance sheets. |
FAIR VALUE |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FAIR VALUE | FAIR VALUE We apply the provisions of ASC 820, Fair Value Measurements and Disclosures, to assets and liabilities measured at fair value. Assets measured at fair value are as follows:
We maintain money market, mutual funds, bonds, and/or stocks in our non-qualified deferred compensation plan and our wholly owned licensed captive insurance company. These funds are valued at prices quoted in an active exchange market and are included in "Cash and Cash Equivalents", "Investments", and "Other Assets". We have elected not to apply the fair value option under ASC 825, Financial Instruments, to any of our financial instruments except for those expressly required by U.S. GAAP. We did not maintain any Level 3 assets or liabilities at June 25, 2016 or June 27, 2015. In accordance with our investment policy, our wholly-owned captive, Ardellis Insurance Ltd. ("Ardellis"), maintains an investment portfolio, totaling $9.7 million as of June 25, 2016, consisting of mutual funds, domestic and international stocks, and fixed income bonds. Ardellis' available for sale investment portfolio consists of the following:
Our Fixed Income investments consist of short, intermediate, and long term bonds, as well as fixed blend bonds. Within the fixed income investments, we maintain a specific mixture of US treasury notes, US agency mortgage backed securities, private label mortgage backed securities, and various corporate securities. Our equity investments consist of small, mid, and large cap growth and value funds, as well as international equity. The net pre-tax effect unrealized gain was $225 thousand. Carrying amounts above are recorded in the investments line item within the balance sheet as of June 25, 2016. During 2016, Ardellis investments reported a net realized loss of 26 thousand, which was recorded in interest income on the statement of earnings. |
REVENUE RECOGNITION |
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Revenue Recognition [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
REVENUE RECOGNITION | REVENUE RECOGNITION Revenue is recognized at the time the product is shipped to the customer. Generally, title passes at the time of shipment. In certain circumstances, the customer takes title when the shipment arrives at the destination. However, our shipping process is typically completed the same day. Earnings on construction contracts are reflected in operations using percentage-of-completion accounting, under either cost to cost or units of delivery methods, depending on the nature of the business at individual operations. Under percentage-of-completion using the cost to cost method, revenues and related earnings on construction contracts are measured by the relationships of actual costs incurred related to the total estimated costs. Under percentage-of-completion using the units of delivery method, revenues and related earnings on construction contracts are measured by the relationships of actual units produced related to the total number of units. Revisions in earnings estimates on the construction contracts are recorded in the accounting period in which the basis for such revisions becomes known. Projected losses on individual contracts are charged to operations in their entirety when such losses become apparent. Construction contract revenue decreased to approximately $30.9 million, during the second quarter of 2016, from $33.9 million during the same period of 2015. Construction contract revenue was approximately $61.4 million and $58.7 million through the first six months of 2016 and 2015, respectively. Our construction contracts are generally entered into with a fixed price and completion of the projects can range from 6 to 18 months in duration. Therefore, our operating results are impacted by, among many other things, labor rates and commodity costs. During the year, we update our estimated costs to complete our projects using current labor and commodity costs and recognize losses to the extent that they exist. The following table presents the balances of percentage-of-completion accounts which are included in “Other current assets” and “Accrued liabilities: Other”, respectively (in thousands):
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EARNINGS PER SHARE |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
EARNINGS PER SHARE | EARNINGS PER SHARE The computation of earnings per share (“EPS”) is as follows (in thousands):
No options were excluded from the computation of diluted EPS for the quarters ended June 25, 2016 or June 27, 2015. |
COMMITMENTS, CONTINGENCIES, AND GUARANTEES |
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Jun. 25, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS, CONTINGENCIES, AND GUARANTEES | COMMITMENTS, CONTINGENCIES, AND GUARANTEES We are self-insured for environmental impairment liability, including certain liabilities which are insured through a wholly owned subsidiary, Ardellis Insurance Ltd., a licensed captive insurance company. We own and operate a number of facilities throughout the United States that chemically treat lumber products. In connection with the ownership and operation of these and other real properties, and the disposal or treatment of hazardous or toxic substances, we may, under various federal, state, and local environmental laws, ordinances, and regulations, be potentially liable for removal and remediation costs, as well as other potential costs, damages, and expenses. Environmental reserves, calculated with no discount rate, have been established to cover remediation activities at wood preservation facilities in Stockertown, PA; Elizabeth City, NC; Auburndale, FL; and Medley, FL. In addition, a reserve was established for our facility in Thornton, CA to remove certain lead containing materials which existed on the property at the time of purchase. On a consolidated basis, we have reserved approximately $3.4 million on June 25, 2016 and June 27, 2015, representing the estimated costs to complete future remediation efforts. These amounts have not been reduced by an insurance receivable. Many of our wood treating operations utilize "Subpart W" drip pads, defined as hazardous waste management units by the Environmental Protection Agency. The rules regulating drip pads require that a pad be “closed” at the point that it is no longer intended to be used for wood treating operations or to manage hazardous waste. Closure involves identification and disposal of contaminants which are required to be removed from the facility. The cost of closure is dependent upon a number of factors including, but not limited to, identification and removal of contaminants, cleanup standards that vary from state to state, and the time period over which the cleanup would be completed. Based on our present knowledge of existing circumstances, it is considered probable that these costs will approximate $0.6 million. As a result, this amount is recorded in other long-term liabilities on June 25, 2016. In February 2014, one of our operations was served with a federal grand jury subpoena from the Southern District of New York. The subpoena was issued in connection with an investigation being conducted by the US Attorney's Office for the Southern District of New York. The subpoena requested documents relating to a developer and construction projects for which our operation had provided materials and labor. Following receipt of the subpoena, the Audit Committee of the Company’s Board of Directors retained outside counsel to conduct an internal investigation and respond to the subpoena. The Company cooperated in all respects with the US Attorney's Office, complied with this subpoena and voluntarily provided additional information. As a result of the internal investigation, in April 2014, two Company employees were terminated for violating the Company’s Code of Conduct and Business Ethics. In May 2015, those ex-employees were indicted by the grand jury. In April 2016, one of the two former employees pled guilty to four of the charges included in the indictment. In May 2016, the other former employee was found guilty by a jury on four of the charges included in the indictment. The Company has not been named as a target and continues to cooperate with the US Attorney's Office in this matter; however, because of the duration and unique nature of this proceeding, any potential, adverse financial implications to the Company are uncertain. In addition, on June 25, 2016, we were parties either as plaintiff or defendant to a number of lawsuits and claims arising through the normal course of our business. In the opinion of management, our consolidated financial statements will not be materially affected by the outcome of these contingencies and claims. On June 25, 2016, we had outstanding purchase commitments on commenced capital projects of approximately $19.0 million. We provide a variety of warranties for products we manufacture. Historically, warranty claims have not been material. We distribute products manufactured by other companies, some of which are no longer in business. While we do not warrant these products, we have received claims as a distributor of these products when the manufacturer no longer exists or has the ability to pay. Historically, these costs have not had a material affect on our consolidated financial statements. As part of our operations, we supply building materials and labor to site-built construction projects or we jointly bid on contracts with framing companies for such projects. In some instances we are required to post payment and performance bonds to insure the project owner that the products and installation services are completed in accordance with our contractual obligations. We have agreed to indemnify the surety for claims made against the bonds. As of June 25, 2016 we had no outstanding payment and performance bonds for open projects. We had approximately $1.7 million in payment and performance bonds outstanding for completed projects which are still under warranty. On June 25, 2016, we had outstanding letters of credit totaling $25.5 million, primarily related to certain insurance contracts and industrial development revenue bonds described further below. In lieu of cash deposits, we provide irrevocable letters of credit in favor of our insurers to guarantee our performance under certain insurance contracts. We currently have irrevocable letters of credit outstanding totaling approximately $15.7 million for these types of insurance arrangements. We have reserves recorded on our balance sheet, in accrued liabilities, that reflect our expected future liabilities under these insurance arrangements. We are required to provide irrevocable letters of credit in favor of the bond trustees for all industrial development revenue bonds that have been issued. These letters of credit guarantee principal and interest payments to the bondholders. We currently have irrevocable letters of credit outstanding totaling approximately $9.8 million related to our outstanding industrial development revenue bonds. These letters of credit have varying terms but may be renewed at the option of the issuing banks. Certain wholly owned domestic subsidiaries have guaranteed the indebtedness of Universal Forest Products, Inc. in certain debt agreements, including the Series 2012 Senior Notes and our revolving credit facility. The maximum exposure of these guarantees is limited to the indebtedness outstanding under these debt arrangements and this exposure will expire concurrent with the expiration of the debt agreements. We did not enter into any new guarantee arrangements during the second quarter of 2016 which would require us to recognize a liability on our balance sheet. |
BUSINESS COMBINATIONS |
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BUSINESS COMBINATIONS | BUSINESS COMBINATIONS We completed the following acquisitions in fiscal 2016 and 2015 which were accounted for using the purchase method (in thousands):
The intangible assets for each acquisition were finalized and allocated to their respective identifiable intangible asset and goodwill accounts during 2016. |
SEGMENT REPORTING |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SEGMENT REPORTING | SEGMENT REPORTING ASC 280, Segment Reporting (“ASC 280”), defines operating segments as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance. The Company operates manufacturing, treating and distribution facilities throughout North America, but primarily in the United States. The Company manages the operations of its individual locations primarily through a geographic reporting structure under which each location is included in a region and regions are included in our North, South, and West divisions. The exceptions to this geographic reporting and management structure are (a) the Company's Alternative Materials Division, which offers a portfolio of non-wood products and distributes those products nation-wide and (b) the Company's distribution unit (referred to as UFPD) which distributes a variety of products to the manufactured housing industry and is accounted for as a reporting unit within the North segment. With respect to the facilities in the north, south, and west segments, these facilities generally supply the three markets the Company serves nationally - Retail, Industrial, and Construction. Also, substantially all of our facilities support customers in the immediate geographical region surrounding the facility. Our Alternative Materials and International divisions have been included in the “All Other” column of the table below. The “Corporate” column includes unallocated administrative costs and certain incentive compensation expense.
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INCOME TAXES |
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Jun. 25, 2016 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES Effective tax rates differ from statutory federal income tax rates, primarily due to provisions for state and local income taxes and permanent tax differences. Our effective tax rate was 35.3% in the second quarter of 2016 compared to 37.4% for same period of 2015. Our effective tax rate was 35.0% in the first six months of 2016 compared to 37.0% in 2015, primarily due to the extension of the research & development tax credit along with other credits that Congress did not extend until the end of 2015, which are not reflected in the 2015 second quarter and first six month's tax rates. |
SUBSEQUENT EVENTS |
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Jun. 25, 2016 | |
Subsequent Event [Line Items] | |
Subsequent Events | SUBSEQUENT EVENTS Subsequent to our financial statement close date of June 25, 2016 and prior to our filing date of July 27, 2016, we completed the acquisition of Idaho Western Inc., for approximately $11 million. Idaho Western Inc. had $21 million in 2015 annual sales and supplies customers in the Northwest with products ranging from lumber and plywood to siding and doors. |
BASIS OF PRESENTATION (Policies) |
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Jun. 25, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Accounting | The accompanying unaudited interim consolidated condensed financial statements (the "Financial Statements") include our accounts and those of our wholly-owned and majority-owned subsidiaries and partnerships, and have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Accordingly, the Financial Statements do not include all of the information and footnotes normally included in the annual consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States. All intercompany transactions and balances have been eliminated. In our opinion, the Financial Statements contain all material adjustments necessary to present fairly our consolidated financial position, results of operations and cash flows for the interim periods presented. All such adjustments are of a normal recurring nature. These Financial Statements should be read in conjunction with the annual consolidated financial statements, and footnotes thereto, included in our Annual Report to Shareholders on Form 10-K for the fiscal year ended December 26, 2015. Seasonality has a significant impact on our working capital from March to August which historically results in negative or modest cash flows from operations in our first and second quarters. Conversely, we experience a substantial decrease in working capital from September to February which typically results in significant cash flow from operations in our third and fourth quarters. For comparative purposes, we have included the June 27, 2015 balances in the accompanying unaudited consolidated condensed balance sheets. |
Revenue Recognition | Revenue is recognized at the time the product is shipped to the customer. Generally, title passes at the time of shipment. In certain circumstances, the customer takes title when the shipment arrives at the destination. However, our shipping process is typically completed the same day. Earnings on construction contracts are reflected in operations using percentage-of-completion accounting, under either cost to cost or units of delivery methods, depending on the nature of the business at individual operations. Under percentage-of-completion using the cost to cost method, revenues and related earnings on construction contracts are measured by the relationships of actual costs incurred related to the total estimated costs. Under percentage-of-completion using the units of delivery method, revenues and related earnings on construction contracts are measured by the relationships of actual units produced related to the total number of units. Revisions in earnings estimates on the construction contracts are recorded in the accounting period in which the basis for such revisions becomes known. Projected losses on individual contracts are charged to operations in their entirety when such losses become apparent. Construction contract revenue decreased to approximately $30.9 million, during the second quarter of 2016, from $33.9 million during the same period of 2015. Construction contract revenue was approximately $61.4 million and $58.7 million through the first six months of 2016 and 2015, respectively. Our construction contracts are generally entered into with a fixed price and completion of the projects can range from 6 to 18 months in duration. Therefore, our operating results are impacted by, among many other things, labor rates and commodity costs. During the year, we update our estimated costs to complete our projects using current labor and commodity costs and recognize losses to the extent that they exist. |
FAIR VALUE (Tables) |
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Jun. 25, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Assets and liabilities measured at fair value | We apply the provisions of ASC 820, Fair Value Measurements and Disclosures, to assets and liabilities measured at fair value. Assets measured at fair value are as follows:
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Available for sale investment portfolio | Ardellis' available for sale investment portfolio consists of the following:
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REVENUE RECOGNITION (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 25, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue Recognition [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of percentage-of-completion balances | The following table presents the balances of percentage-of-completion accounts which are included in “Other current assets” and “Accrued liabilities: Other”, respectively (in thousands):
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EARNINGS PER SHARE (Tables) |
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Jun. 25, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Computation of earnings per share | The computation of earnings per share (“EPS”) is as follows (in thousands):
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BUSINESS COMBINATIONS (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 25, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Business Combinations [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||
Business Acquisitions Accounted for Using Purchase Method | We completed the following acquisitions in fiscal 2016 and 2015 which were accounted for using the purchase method (in thousands):
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SEGMENT REPORTING (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 25, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting | Our Alternative Materials and International divisions have been included in the “All Other” column of the table below. The “Corporate” column includes unallocated administrative costs and certain incentive compensation expense.
|
FAIR VALUE FAIR VALUE - Available for Sale Investment Portfolio (Details) - Ardellis Insurance Ltd. $ in Thousands |
6 Months Ended |
---|---|
Jun. 25, 2016
USD ($)
| |
Schedule of Available-for-sale Securities [Line Items] | |
Fair Value | $ 9,740 |
Cost | 9,515 |
Unrealized Gain (Loss) | 225 |
Fixed Income | |
Schedule of Available-for-sale Securities [Line Items] | |
Fair Value | 4,315 |
Cost | 4,283 |
Unrealized Gain (Loss) | 32 |
Equity | |
Schedule of Available-for-sale Securities [Line Items] | |
Fair Value | 4,944 |
Cost | 4,751 |
Unrealized Gain (Loss) | 193 |
Mutual Funds | |
Schedule of Available-for-sale Securities [Line Items] | |
Fair Value | 481 |
Cost | 481 |
Unrealized Gain (Loss) | 0 |
Interest Income | |
Schedule of Available-for-sale Securities [Line Items] | |
Realized Gain (Loss) | $ 26 |
REVENUE RECOGNITION (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 25, 2016 |
Jun. 27, 2015 |
Jun. 25, 2016 |
Jun. 27, 2015 |
Dec. 26, 2015 |
|
Revenue Recognition [Abstract] | |||||
Contracts Revenue | $ 30,900 | $ 33,900 | $ 61,400 | $ 58,700 | |
Construction contracts completion term, minimum | 6 months | ||||
Construction contracts completion term, maximum | 18 months | ||||
Cost and Earnings in Excess of Billings | 2,835 | 4,842 | $ 2,835 | 4,842 | $ 3,624 |
Billings in Excess of Cost and Earnings | $ 5,407 | $ 3,347 | $ 5,407 | $ 3,347 | $ 4,978 |
SEGMENT REPORTING - NARRATIVE (Details) |
Jun. 25, 2016
market
|
---|---|
Segment Reporting [Abstract] | |
Number of markets in which the entity Operates (in markets) | 3 |
INCOME TAXES (Details) |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 25, 2016 |
Jun. 27, 2015 |
Jun. 25, 2016 |
Jun. 27, 2015 |
|
Income Tax Disclosure [Abstract] | ||||
Effective income tax rate (in hundredths) | 35.30% | 37.40% | 35.00% | 37.00% |
SUBSEQUENT EVENTS (Details) - Idaho Western Inc. - Subsequent Event $ in Millions |
1 Months Ended |
---|---|
Jul. 27, 2016
USD ($)
| |
Subsequent Event [Line Items] | |
Purchase Price | $ 11 |
Acquired entity, prior year sales | $ 21 |
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