A more stable lumber market boosted the second-quarter performance of Universal Forest Products, even as the company was forced to pay higher duties for Chinese nails.
Universal reported second-quarter net earnings of $21.8 million, up 38.1% over net earnings of $15.8 million for the second quarter of 2013. Net sales were $773 million, up 4.6% from $738 million in the same quarter last year.
“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 second quarter.”
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 said it benefited from a more stable lumber market in the second quarter of 2014 relative to the second quarter of 2013, when the lumber market fell for several weeks, adversely impacting 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.
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.
Sales to retail customers -- big box and independent -- were up 11% to $349.1 million. The company said pent-up demand from a harsh and prolonged winter gave way to better weather in the second quarter.
The company reported a 4% decline in sales to the commercial construction market.