“We focused on profitability and made great strides,” said Universal CEO Matthew J. Missad. “The people of this company did the right things to drive sales and increase profitability to meet our strategic goals: they created a better product mix of value-added sales and enhanced operational efficiencies, driving success in the 2Q.”
The Company’s earnings were reduced by $1.6 million for expected retroactive increases in U.S. duties assessed against a Chinese supplier of nails the Company imported prior to March 2013.
The Company benefited from a more stable lumber market in the 2Q 2014 relative to the 2Q 2013, when the lumber market fell for several weeks, adversely impacting the Company’s profitability on certain products.
“We had strong sales gains to our retail market, as well as gains in sales to our industrial market. Our construction market saw strong sales to commercial construction; however, those gains were offset by declines in our framing operations, due to our decision to accept only business that meets certain profitability criteria, and to a drop in sales to manufactured housing customers,” Missad explained.
The decline in manufactured housing sales was the result of the vertical integration of one of the Company’s key customers and of a 37% drop in the OSB market. That drop in the OSB market caused declines in sales of $9 million and $6 million, respectively, to the Company’s construction and retail markets in the 2Q 2014 compared to the same period of 2013.
Missad said the Company is on track to achieve its goals of $3 billion in sales and operating margins at normal historical levels by 2017.
Universal Forest Products, Inc. is a holding company that provides capital, management and administrative resources to subsidiaries that supply wood, wood composite and other products to three robust markets: retail, construction and industrial.
