Behind the swing at UFP
Universal Forest Products, a maker of wood products for the home-building, commercial, DIY and industrial market, was buffeted by the winter storms of the first quarter this year, both literally and figuratively. The Grand Rapids, Mich.-based manufacturer posted a net sales decrease of 1.5% for the quarter, which was consistent with the financial reports of other LBM companies. But UFP’s net loss — $3.7 million — stacked up badly against its earnings of $1.0 million in the first quarter of 2010. CEO Michael Glenn had some explaining to do on the company’s April 14 conference call.
“In an effort to grow our sales, some of our operations simply took bad business, business [priced] at levels that were unacceptable, and that’s on us and it’s been corrected,” Glenn said. In addition to margin erosion, Mother Nature forced UFP to close factories in Texas, Georgia, North Carolina and elsewhere in the South, as well as the Northeast and Midwest, losing 200 production days in 14 factories. But the company has more commercial and multi-family business on its books now than it did last year at this time, Glenn said. And it’s expanding its DIY offerings with a new line of composites.
Despite all this, UFP held back on issuing any guidance. Maybe it was the company outlook, which stated: “The company believes continued challenging economic conditions and uncertainties in the housing market limit its ability to provide meaningful guidance for ranges of likely financial performance; therefore, the company will not resume the practice of providing guidance in the foreseeable future.”