UFP continues cost cutting, posts profit
Grand Rapids, Mich.-based Universal Forest Products posted third-quarter net earnings of $5.6 million, up from net earnings of $2.6 million in the same quarter last year.
Net sales of $468.9 million in the third quarter of 2011 were down 2.4% from net sales of $480.6 million for the same period of last year.
"Our cost-cutting efforts and a more stable lumber market helped us generate a stronger profit in the quarter," said CEO Matthew Missad. "Our sales suffered from a stagnant economy, which is likely to remain weak for the near term. Since we can't rely on an improved economy to grow our business, we are pursuing other avenues of growth."
The company grew sales in three of its five markets: commercial construction and concrete forming, industrial, and manufactured housing. The residential construction and retail building materials markets continue to be soft and saw sales decline in the third quarter of 2011 compared with a year ago.
Residential construction was down 17% from the same quarter last year. The company said it remained focused on multi-family projects and pointed to stats suggesting the wisdom of this strategy. Single-family housing starts were down 1.7% June through August 2011, compared with June through August 2010. On the other hand, multi-family starts increased 28.1% in the same period over 2010.
Missad noted that the company remains financially strong and is well positioned to weather a tough economy, even through the typically weak winter months. "If current forecasts are accurate, we believe significant overcapacity exists in the markets we serve," he said. "We expect that many companies will struggle to make it through the winter, and we remain poised for opportunities to consolidate our markets and improve our value to our customers and our shareholders."