GRAND RAPIDS, MI
- Universal Forest Products, Inc. (Nasdaq: UFPI) says it will layoff employees as it downsizes to align with market demand for its wood specialty, manufactured housing and wood construction component products.
Last week Universal Forest Products CEO Michael B. Glenn resigned, citing health reasons and the toll taken by closing nearly 30 operations and laying off thousands of employees in recent years.
Glenn is a 37-year veteran of the 6,000 employee Grand Rapids, MI-based firm, which designs, manufacture and markets wood and wood-alternative products and structural lumber products for the manufactured housing industry, engineered wood components for the site-built construction market, and specialty wood packaging and components for various industries, as well as wood products for DIY/retail home centers. Universal Forest Products operates 70 facilities and reported $1.9 billion in sales in 2010.
Universal Forest Products' board is completing an evaluation process for a successor and will retain Glenn during that period.
"Closing or consolidating nearly 30 operations and cutting thousands of employees as we implemented strategies to carry us into the future have taken a toll,â Glenn said in announcing his resignation. "For the sake of my family and of my health, I decided it was time to hand over the reins.â
The latest round of downsizing results from lower than expected sales for the first five months of the current fiscal year in key wood products market, says Universal Forest Products, which reports its quarterly results July 13. Year-to-date net sales through May 2011 were down 9.5 percent to $765 million, including a decline of 15.0 percent in net sales to retail customers.
"Contrary to typical seasonal trends, the lumber market declined for 11 consecutive weeks from March 2011 through the end of May 2011," says Universal. "That decline, coupled with significantly higher fuel prices, contributed to a decline in gross margin to 10.5 percent," in part a result of lower lumber prices.
The downsizing is expected to save the company $10 million in operating costs, after charges for employee severance. Universal Forest Products says its operations consume 7 percent of North American softwood lumber output, making it the one of the largest buyers of sawmill output. It's industrial products division is a supplier of wood furnishing components to IKEA and other large retailers. A recent Unversal Forest Products investor presentation describes the firm's operations.
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