LONDON, UK / ACCESSWIRE / July 21, 2017 / Pro-Trader Daily has just published a free post-earnings coverage on Universal Forest Products, Inc. (NASDAQ: UFPI), which can be viewed by registering at http://protraderdaily.com/optin/?symbol=UFPI, following the Company's disclosure of its second quarter fiscal 2017 earnings results on July 18, 2017. The wood and materials provider for the construction industry exceeded revenue expectations and posted a 1% growth in earnings. Our daily stock reports are accessible for free, and with those to look forward today you also will be signing up for a complimentary member's account at:

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Earnings Reviewed

For the second fiscal quarter, Universal Forest reported record sales of $1.07 billion, up 23% compared to sales of $872.09 million for Q2 2016. The growth was attributed to a 16% increase in unit sales and a 7% increase in selling prices due to the lumber market. The Company's 16% unit sales growth comprised of 12% gain from recently completed acquisitions and 4% organic growth. Universal Forest's top-line exceeded analysts' expectations of $1.04 billion.

During Q2 2017, Universal Forest's gross profits increased by 12.7% to $148.24 million, while gross margins declined to 13.8% from 15.1% in the previous year's same quarter. The Company stated that profitability was affected by the rapid increase in the lumber market at the beginning of the reported quarter, which was exacerbated by the concern over the softwood lumber duty with Canada.

Universal Forest's net earnings attributable to controlling interest were $33.64 million, up 1% compared to $33.40 in Q2 2016. On a per share basis, the Company recorded earnings of $1.64 per share, unchanged from $1.64 per share in the prior year's comparable quarter. Universal Forest's earnings fell short of Wall Street's expectations of $1.85 per share.

Segment Details

During Q2 2017, Universal Forest's sales to the retail market increased 13% to $459.1 million, resulting from a unit increase of 8% and an increase in selling prices of 5%. Within this market, the Company's sales to big box customers grew over 13% from acquired operations. Universal Forest's sales in the industrial market surged 47% on a y-o-y basis to $335.9 million, driven by a 40% increase in unit sales. The Company's unit sales growth is comprised of 32% growth from recent acquisitions and an 8% organic growth rate.

Universal Forest's overall sales in the construction market increased 17% to $295.2 million in Q2 2017, due to a 9% increase in units sold and an 8% increase in prices. The growth in Construction sales was led by sales to manufactured housing builders, which grew 24%, and residential builders, which rose 14% on a y-o-y basis. The Company's sales to commercial builders gained 10% on a y-o-y basis.

For Q2 2017, Universal Forest's new product sales were $115.9 million, up from $97.8 million in Q2 2016. The Company has introduced 23 new products in 2017 to date, including 11 during the reported quarter.

Cash Matters

Universal Forest's cash flow from operating activities was $15 million in Q2 2017, comprising of net earnings of $56 million, non-cash expenses of approximately $27 million, and an increase in net working capital since Q4 2016 of $68 million driven by seasonality and higher lumber prices. The Company's cash cycle for Q2 2017, excluding acquisitions, was 45 days. Including acquisitions, cash cycle had increased to 50 days.

Universal Forest's net debt balance was approximately $205 million at the end of Q2 2017. Net debt balance includes seasonal working capital of about $100 million, which the Company expects to decline in H2 2017.

Stock Performance

At the close of trading session on Thursday, July 20, 2017, Universal Forest Products' stock price declined 2.69% to end the day at $86.55. A total volume of 179.67 thousand shares were exchanged during the session, which was above the 3-month average volume of 136.13 thousand shares. The Company's shares are trading at a PE ratio of 17.17 and have a dividend yield of 1.04%. At Thursday's closing price, the stock's net capitalization stands at $1.77 billion.

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