8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8‑K

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934

Date of Report (Date  of earliest event reported): July 18, 2018

Universal Forest Products, Inc.

(Exact name of registrant as specified in its charter)

Michigan (State or other Jurisdiction of Incorporation) 0-22684 (Commission File Number) 38-1465835 (IRS Employer Identification No.)

2801 East Beltline, NE Grand Rapids, Michigan (Address of Principal Executive Offices) 49525 (Zip Code)

Registrant's telephone number, including area code: (616) 364-6161

None

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐        Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425).

☐        Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12).

☐        Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)).

☐        Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)).

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02Results of Operations and Financial Condition

On July 18, 2018, the Registrant issued a press release announcing its financial results for the quarter-ended June 30, 2018.  A copy of the Registrant’s press release is attached as Exhibit 99(a) to this Current Report.

Item 9.01Financial Statements, Pro Forma Financial Information, and Exhibits

(c) Exhibits

99(a)Press Release dated July 18, 2018.

2

EXHIBIT INDEX

Exhibit Number	Document
99(a)	Press Release dated July 18, 2018.

3

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	UNIVERSAL FOREST PRODUCTS, INC.
	(Registrant)
Dated: July 18, 2018	By:	/s/ Michael R. Cole
		Michael R. Cole
		Principal Financial Officer and Treasurer

4

EX-99

Universal Forest Products, Inc.

Page 1

Exhibit 99(a)

News release

---------------AT THE COMPANY---------------

Lynn Afendoulis

Director, Corporate Communications

(616) 365-1502

FOR IMMEDIATE RELEASE

Wednesday, July 18, 2018

UFPI posts record second-quarter earnings and sales
- Second quarter marks three years of consecutive quarterly records -

GRAND RAPIDS, Mich., Wednesday, July 18, 2018 – Universal Forest Products, Inc. (Nasdaq: UFPI) today reported record financial results for the second quarter ended June 30, 2018, the twelfth consecutive quarter in which the company has reported records in both net sales and net earnings.

“The employees of Universal continue to work hard to set records, and I am privileged to announce the results,” stated CEO Matt Missad. The company’s second-quarter results benefited from unit sales growth and a rising lumber market but were adversely impacted by rising costs for transportation and labor.

“Our focus remains on growing unit sales organically and through acquisitions, while enhancing our sales mix of new and value-added products,” Matt added. “Our recently completed acquisition of North American Container Corp. (NACC) will enhance our goal of being the packaging solutions provider and adds non-wood packaging alternatives to our product offering. Additionally, our increased resource allocation to new products and services is paying dividends, as new product sales year-to-date have increased to $262 million from $211 million in 2017. We’ll also continue to focus on margin improvement and improving productivity through automation, including the expanded use of specialized material processing equipment and robotics.”

Recent Acquisition Activity
In early June, Universal closed on its acquisition of North American Container Corp. (NACC), an industrial packaging manufacturer based in Georgia with sales of approximately $71 million in 2017.

-more-

Universal Forest Products, Inc.

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Second Quarter 2018 Highlights (comparisons on a year-over-year basis):

- Diluted earnings per share were $0.71, up from $0.55

- Net earnings attributable to controlling interest were $44.0 million, up 31 percent

- EBITDA was $77.0 million, up 14 percent

- Gross sales increased 21 percent, with gains of 19 percent in the Retail and Industrial markets and 26 percent in the Construction market

- Unit sales contributed 8 percent of gross sales growth; higher prices due to the lumber market contributed 13 percent

- Organic sales contributed 7 percent to unit growth while acquisitions added 1 percent

- New product sales were $153.1 million, up 25 percent

By market, the company reported the following second-quarter 2018 gross sales results:

Retail

· $546 million, up 19 percent over the same period of 2017, as unit sales contributed 6 percent and price increases accounted for 13 percent

· Organic sales accounted for all of the unit sales growth

· Sales to big box customers increased 16 percent, while sales to independent customers grew 25 percent

Construction

· $371 million, up 26 percent over the same period of 2017, as unit sales contributed 10 percent and  price increases accounted for 16 percent

· Organic sales accounted for 9 percent of the unit sales growth, while acquisitions accounted for 1 percent

· The company saw double-digits sales increases to customers in commercial construction (32 percent), manufactured housing (28 percent) and residential construction (22 percent)

Industrial

· $404 million, up 19 percent over the same period of 2017, as unit sales accounted for 8 percent and price increases accounted for 11 percent

· Organic sales accounted for 5 percent of the unit sales growth, while acquisitions contributed 3 percent

· The company sees favorable growth opportunities in the non-wood packing market and is adding resources to better serve this market

-more-

Universal Forest Products, Inc.

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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 19, 2018. 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 866-518-4547, and internationally at 213-660-0879. Use conference pass code 9596393. 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 19, 2018, at 855-859-2056, 404-537-3406 or 800-585-8367. 

UNIVERSAL FOREST PRODUCTS, INC.

Universal Forest Products, Inc. is a holding company whose subsidiaries supply wood, wood composite and other products to three robust markets: retail, construction and industrial.  Founded in 1955, the Company is headquartered in Grand Rapids, Mich., with affiliates throughout North America, Europe, Asia 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.

Non-GAAP Financial Information

This release includes certain financial information not prepared in accordance with U.S. GAAP. Because not all companies calculate non-GAAP financial information identically (or at all), the presentations herein may not be comparable to other similarly titled measures used by other companies.  Management considers EBITDA, a non-GAAP measure, an alternative performance measure which may provide useful information to investors.

# # #

Universal Forest Products, Inc.

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CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS AND COMPREHENSIVE INCOME (UNAUDITED)

FOR THE THREE AND SIX MONTHS ENDED

JUNE 2018/2017

	Quarter Period								Year to Date
(In thousands, except per share data)	2018				2017				2018				2017
NET SALES	$	1,294,440	100	%	$	1,072,375	100	%	$	2,288,297	100	%	$	1,918,505	100	%
COST OF GOODS SOLD		1,128,751	87.2			924,135	86.2			1,991,719	87.0			1,649,526	86.0
GROSS PROFIT		165,689	12.8			148,240	13.8			296,578	13.0			268,979	14.0
SELLING,   GENERAL  AND ADMINISTRATIVE  EXPENSES		104,595	8.1			94,605	8.8			197,800	8.6			181,587	9.5
NET LOSS (GAIN) ON DISPOSITION AND IMPAIRMENT OF ASSETS		477	—			(264)	—			(6,057)	(0.3)			(328)	—
EARNINGS FROM OPERATIONS		60,617	4.7			53,899	5.0			104,835	4.6			87,720	4.6
OTHER EXPENSE, NET		2,067	0.2			1,490	0.1			3,127	0.1			2,906	0.2
EARNINGS BEFORE INCOME TAXES		58,550	4.5			52,409	4.9			101,708	4.4			84,814	4.4
INCOME TAXES		13,420	1.0			17,835	1.7			22,994	1.0			28,605	1.5
NET EARNINGS		45,130	3.5			34,574	3.2			78,714	3.4			56,209	2.9
LESS NET EARNINGS ATTRIBUTABLE TO NONCONTROLLING INTEREST		(1,086)	(0.1)			(932)	(0.1)			(1,836)	(0.1)			(1,505)	(0.1)
NET EARNINGS ATTRIBUTABLE TO CONTROLLING INTEREST	$	44,044	3.4		$	33,642	3.1		$	76,878	3.4		$	54,704	2.9
EARNINGS PER SHARE - BASIC	$	0.71			$	0.55			$	1.24			$	0.89
EARNINGS PER SHARE - DILUTED	$	0.71			$	0.55			$	1.24			$	0.89
COMPREHENSIVE INCOME		41,225				35,961				74,370				60,631
LESS COMPREHENSIVE INCOME ATTRIBUTABLE TO NONCONTROLLING INTEREST		(119)				(1,460)				(1,713)				(2,887)
COMPREHENSIVE INCOME ATTRIBUTABLE TO CONTROLLING INTEREST	$	41,106			$	34,501			$	72,657			$	57,744

SUPPLEMENTAL SALES DATA
	Quarter Period					Year to Date
Market Classification	2018		2017		%	2018		2017		%
Retail	$	545,492	$	458,267	19%	$	916,453	$	770,619	19%
Industrial		404,090		340,463	19%		737,056		621,062	19%
Construction		370,786		293,465	26%		678,526		559,371	21%
Total Gross Sales		1,320,368		1,092,195	21%		2,332,035		1,951,052	20%
Sales Allowances		(25,928)		(19,820)	-31%		(43,738)		(32,547)	-34%
Total Net Sales	$	1,294,440	$	1,072,375	21%	$	2,288,297	$	1,918,505	19%

Universal Forest Products, Inc.

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CONSOLIDATED CONDENSED BALANCE SHEETS (UNAUDITED)

JUNE 2018/2017

(In thousands)
ASSETS		2018		2017	LIABILITIES AND EQUITY		2018		2017
CURRENT ASSETS					CURRENT LIABILITIES
Cash and cash equivalents	$	27,501	$	24,625	Cash overdraft	$	33,608	$	22,769
Restricted cash		16,758		905	Accounts payable		197,408		160,250
Investments		14,493		10,401	Accrued liabilities		138,809		126,210
Accounts receivable		489,145		398,529	Current portion of debt		542		2,378
Inventories		531,874		438,435
Other current assets		32,860		21,970
TOTAL CURRENT ASSETS		1,112,631		894,865	TOTAL CURRENT LIABILITIES		370,367		311,607
OTHER ASSETS		20,266		17,734
INTANGIBLE ASSETS, NET		263,024		253,484	LONG-TERM DEBT AND CAPITAL LEASE OBLIGATIONS		276,274		204,752
					OTHER LIABILITIES		42,255		49,319
PROPERTY, PLANT AND EQUIPMENT,  NET		340,698		315,956	EQUITY		1,047,723		916,361
TOTAL ASSETS	$	1,736,619	$	1,482,039	TOTAL LIABILITIES AND EQUITY	$	1,736,619	$	1,482,039

Universal Forest Products, Inc.

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CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)

FOR THE SIX MONTHS ENDED

JUNE 2018/2017

(In thousands)		2018		2017
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings	$	78,714	$	56,209
Adjustments to reconcile net earnings to net cash from operating activities:
Depreciation		26,144		23,248
Amortization of intangibles		2,702		2,377
Expense associated with share-based and grant compensation arrangements		1,924		1,381
Deferred income taxes (credit)		(565)		355
Equity in earnings of investee		—		(26)
Net gain on disposition and impairment of assets		(6,057)		(328)
Changes in:
Accounts receivable		(155,666)		(101,239)
Inventories		(61,828)		(26,979)
Accounts payable and cash overdraft		62,665		38,146
Accrued liabilities and other		15,895		22,067
NET CASH FROM OPERATING ACTIVITIES		(36,072)		15,211
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant, and equipment		(54,313)		(34,549)
Proceeds from sale of property, plant and equipment		36,724		1,039
Acquisitions and purchase of noncontrolling interest, net of cash received		(37,960)		(59,658)
Purchases of investments		(9,348)		(15,118)
Proceeds from sale of investments		3,180		7,247
Other		(1,352)		1,152
NET CASH USED IN INVESTING ACTIVITIES		(63,069)		(99,887)
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings under revolving credit facilities		488,853		444,601
Repayments under revolving credit facilities		(431,657)		(349,311)
Borrowings of debt		1,639		—
Repayments of debt		(5,437)		—
Issuance of long-term debt		75,000		—
Proceeds from issuance of common stock		500		331
Distributions to noncontrolling interest		(1,078)		(1,953)
Dividends paid to shareholders		(11,090)		(9,207)
Repurchase of common stock		(1,819)		(9,934)
Other		(71)		(6)
NET CASH FROM (USED IN) FINANCING ACTIVITIES		114,840		74,521
Effect of exchange rate changes on cash		(256)		1,196
NET CHANGE IN CASH AND CASH EQUIVALENTS		15,443		(8,959)
ALL CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD		28,816		34,489
ALL CASH AND CASH EQUIVALENTS, END OF PERIOD	$	44,259	$	25,530
Reconciliation of cash and cash equivalents and restricted cash:
Cash and cash equivalents, beginning of period	$	28,339	$	34,091
Restricted cash, beginning of period		477		398
All cash and cash equivalents, beginning of period	$	28,816	$	34,489
Cash and cash equivalents, end of period	$	27,501	$	24,625
Restricted cash, end of period		16,758		905
All cash and cash equivalents, end of period	$	44,259	$	25,530

Universal Forest Products, Inc.

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EBITDA RECONCILIATION TO NET EARNINGS (UNAUDITED)

FOR THE THREE AND SIX MONTHS ENDED

JUNE 2018/2017

	Quarter Period				Year to Date
(In thousands)	2018		2017		2018		2017
Net Earnings	$	45,130	$	34,574	$	78,714	$	56,209
Interest  Expense		2,247		1,839		4,025		3,343
Taxes		13,420		17,835		22,994		28,605
Expense associated with Share-Based Compensation Arrangements		830		765		1,924		1,382
Net (Loss) Gain on Disposition and Impairment of Assets		477		(264)		(6,057)		(328)
Depreciation Expense		13,432		11,763		26,144		23,155
Amortization of Intangibles		1,474		1,259		2,702		2,378
EBITDA	$	77,010	$	67,771	$	130,446	$	114,744