SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 [NO FEE REQUIRED].
For the fiscal year ended December 31, 2004
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 [NO FEE REQUIRED].
Commission file number: 0-22684
UNIVERSAL FOREST PRODUCTS, INC. EMPLOYEES' PROFIT SHARING
AND 401(k) RETIREMENT PLAN
(Full title of the plan and the address of the plan, if different from that of
issuer named below)
UNIVERSAL FOREST PRODUCTS, INC.
2801 EAST BELTLINE NE
GRAND RAPIDS, MICHIGAN 49525-9736
(Name of issuer of the securities held pursuant to the plan and the address of
its principal executive office)
Page 1 of 12
Universal Forest Products, Inc. Employees' Profit Sharing and
401(k) Retirement Plan
Financial Statements and Supplemental Schedule
Years Ended December 31, 2004 and 2003
CONTENTS
Report of Independent Registered Public Accounting Firm................... 3
Financial Statements
Statements of Assets Available for Benefits............................... 4
Statements of Changes in Assets Available for Benefits.................... 5
Notes to Financial Statements............................................. 6
Supplemental Schedule
Schedule H, Line 4i -- Schedule of Assets (Held at End of Year)........... 11
2
Report of Independent Registered Public Accounting Firm
Plan Administrator
Universal Forest Products, Inc. Employees' Profit Sharing and
401(k) Retirement Plan
We have audited the accompanying statements of assets available for benefits of
Universal Forest Products, Inc. Employees' Profit Sharing and 401(k) Retirement
Plan as of December 31, 2004 and 2003, and the related statements of changes in
assets available for benefits for the years then ended. These financial
statements are the responsibility of the Plan's management. Our responsibility
is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards of the Public
Company Accounting Oversight Board (United States). Those standards require that
we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. We were not engaged to
perform an audit of the Plan's internal control over financial reporting. Our
audit included consideration of internal control over financial reporting as a
basis for designing audit procedures that are appropriate in the circumstances,
but not for the purpose of expressing an opinion on the effectiveness of the
Plan's internal control over financial reporting. Accordingly, we express no
such opinion. An audit also includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the assets available for benefits of the Plan at December
31, 2004 and 2003, and the changes in its assets available for benefits for the
years then ended, in conformity with U.S. generally accepted accounting
principles.
Our audits were performed for the purpose of forming an opinion on the financial
statements taken as a whole. The accompanying supplemental schedule of assets
(held at end of year) as of December 31, 2004, is presented for purposes of
additional analysis and is not a required part of the financial statements but
is supplementary information required by the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974. This supplemental schedule is the responsibility of the
Plan's management. The supplemental schedule has been subjected to the auditing
procedures applied in our audits of the financial statements and, in our
opinion, is fairly stated in all material respects in relation to the financial
statements taken as a whole.
/s/ Ernst & Young LLP
ERNST & YOUNG LLP
Grand Rapids, MI
June 2, 2005
3
Universal Forest Products, Inc. Employees' Profit Sharing and
401(k) Retirement Plan
Statements of Assets Available for Benefits
DECEMBER 31
2004 2003
------------ ------------
ASSETS
Cash $ 24 $ -
Investments, at fair value 132,452,105 107,330,538
Participant loans receivable 6,412,625 5,177,025
------------ ------------
138,864,730 112,507,563
Participant contribution receivable - 179,001
Employer contribution receivable 878,193 963,070
------------ ------------
Assets available for benefits $139,742,947 $113,649,634
============ ============
See accompanying notes to financial statements.
4
Universal Forest Products, Inc. Employees' Profit Sharing and
401(k) Retirement Plan
Statements of Changes in Assets Available for Benefits
YEARS ENDED DECEMBER 31
2004 2003
------------ ------------
ADDITIONS
Participant contributions $ 9,213,476 $ 7,279,648
Employer contributions 3,471,871 2,916,597
Interest income 339,184 608,704
Dividend income 982,729 309,684
Transfer from another qualified plan - 13,602,777
------------ ------------
14,007,260 24,717,410
DEDUCTIONS
Distributions to participants 6,271,724 9,147,224
Administrative expenses 437,467 136,450
------------ ------------
6,709,191 9,283,674
Net realized and unrealized appreciation in fair value
of investments 18,795,244 20,095,120
------------ ------------
Net additions 26,093,313 35,528,856
Assets available for benefits at beginning of year 113,649,634 78,120,778
------------ ------------
Assets available for benefits at end of year $139,742,947 $113,649,634
============ ============
See accompanying notes to financial statements.
5
Universal Forest Products, Inc. Employees' Profit Sharing and
401(k) Retirement Plan
Notes to Financial Statements
December 31, 2004 and 2003
1. SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING
The financial statements of the Universal Forest Products, Inc. Employees'
Profit Sharing and 401(k) Retirement Plan (the Plan) are presented on the
accrual method of accounting.
USE OF ESTIMATES
The preparation of financial statements in accordance with U.S. generally
accepted accounting principles requires management to make estimates and
assumptions that affect reported amounts. Although actual results could differ
from these estimates, management believes estimated amounts recorded are
reasonable and appropriate.
INVESTMENTS
The Plan's investments are stated at fair value, which are, where information is
available, based on quoted market values as of the end of the year. Investment
transactions are recorded as of the settlement dates. The change in the
difference between the fair value and the cost of investments held is combined
with realized gains and losses on sales of investments and reported in the
statements of changes in assets available for benefits as net realized and
unrealized appreciation or depreciation in the fair value of investments.
Realized gains and losses on sales of investments represent the difference
between the proceeds received and the original cost of investments sold.
The Universal Forest Products Stock Fund (the Fund) is tracked on a unitized
basis. The Fund consists of Universal Forest Products, Inc. common stock and the
funds held in the Gartmore Morley Stable Value Fund sufficient to meet the
Fund's daily cash needs. Unitizing the Fund allows for daily trades. The value
of a unit reflects the combined market value of the Universal Forest Products,
Inc. common stock and the cash investment held by the Fund. At December 31,
2004, 1,137,123 units were outstanding with a value of $42.84 per unit
(1,148,852 units were outstanding with a value of $32.01 per unit at December
31, 2003).
The Plan utilizes various investment instruments. Investment securities, in
general, are exposed to various risks, such as interest rate, credit and overall
market volatility. Due to the level of risk associated with certain investment
securities, it is reasonably possible that changes in the values of investment
securities will occur in the near term and that such changes could materially
affect participants' account balances and the amounts reported in the statements
of assets available for benefits.
6
Universal Forest Products, Inc. Employees' Profit Sharing and
401(k) Retirement Plan
Notes to Financial Statements (continued)
1. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
ADMINISTRATIVE EXPENSES
Administrative expenses incurred in connection with the operations of the Plan
are paid by Universal Forest Products, Inc. (the Company), except for loan and
certain investment fees, which are paid out of participant's accounts.
2. DESCRIPTION OF THE PLAN
The following description of the Plan provides only general information.
Participants should refer to the Plan agreement, as amended, for a more complete
description of the Plan's provisions.
The Plan is a defined-contribution, profit sharing and 401(k) plan that provides
tax-deferred benefits for substantially all eligible employees of the Company,
excluding the employees of separate subsidiaries that maintain a similar
defined-contribution plan and those covered under a collective bargaining
agreement. The Plan is subject to the provisions of the Employee Retirement
Security Act of 1974 (ERISA).
Eligible employees are those who are 18 years or older and have completed 1,000
hours of employment (year of service) during the 12-month period following date
of employment or, where additional periods are necessary, on succeeding Plan
year end dates.
Participants may voluntarily contribute up to 25% of their compensation as a
401(k) contribution subject to certain regulatory limitations. Participant
contributions to the Plan vest immediately.
The Company contributes regular discretionary matching contributions, and may
contribute additional discretionary matching contributions. Regular
discretionary matching contributions are made quarterly and were 50% of
participant deferrals (in the second quarter of 2004, an additional matching
contribution of 17% was made) not to exceed 6% of participant compensation.
Additional discretionary matching contributions are made at the end of each plan
year. These amounts are not guaranteed, and may vary from year to year as the
Company is not obligated to make such contributions.
7
Universal Forest Products, Inc. Employees' Profit Sharing and
401(k) Retirement Plan
Notes to Financial Statements (continued)
2. DESCRIPTION OF THE PLAN (CONTINUED)
The Company may also contribute a discretionary profit sharing amount annually
as determined by management and approved by the Company's Board of Directors.
The Company's annual profit sharing contributions are allocated to each
participant's account in the same ratio that each participant's total
compensation for the plan year bears to the total compensation of all
participants for such year.
Participants may select from various investment options made available by the
Plan. Each participant's account is credited with the participant's
contribution, an allocation of the Company's net contribution, if any, plan
earnings and losses, administrative expenses and forfeitures. Earnings
allocations are based on account balances, as defined.
Employer contributions are subject to a six-year vesting schedule as follows:
YEARS OF SERVICE VESTING PERCENTAGE
---------------- ------------------
Less than 2 0%
2 but less than 3 20
3 but less than 4 40
4 but less than 5 60
5 but less than 6 80
6 or more 100
The vested portion of terminated and retired participants' accounts are normally
distributed immediately following a separation from service.
Participants may borrow from their account a minimum amount of $1,000 up to a
maximum equal to the lesser of $50,000 or 50% of their vested account balance.
Loan terms range from one to five years or up to 25 years for the purchase of a
residence. The loans bear interest at a rate equal to the prime rate (5.25% at
December 31, 2004) plus 2% calculated on a daily basis. A participant may only
have five loans outstanding at any time and one new loan for every 12-month
period.
The plan sponsor intends to continue the Plan indefinitely, but reserves the
right to terminate or amend the Plan at any time. In the event of termination of
the Plan, all participants are automatically 100% vested in the value of their
accounts and will be paid in full.
8
Universal Forest Products, Inc. Employees' Profit Sharing and
401(k) Retirement Plan
Notes to Financial Statements (continued)
3. INVESTMENTS
The Plan's investments (including investments purchased and held during the
year) appreciated in fair value as follows:
YEARS ENDED DECEMBER 31
2004 2003
----------- -----------
Common stock $13,030,345 $15,220,784
Mutual funds 5,764,899 4,874,336
----------- -----------
$18,795,244 $20,095,120
=========== ===========
Individual investments that represent 5% or more of the fair value of the Plan's
assets are as follows:
DECEMBER 31
2004 2003
------------ ------------
Universal Forest Products Stock Fund $ 48,716,978 $ 36,771,990
Gartmore Morley Stable Value Fund 32,815,929 31,184,278
Van Kampen Growth & Income Fund 11,231,989 9,240,048
Wells Fargo Outlook 2020 Fund 7,581,549 6,872,120
4. FEDERAL INCOME TAXES
The Plan has received a determination letter from the Internal Revenue Service
dated April 16, 2004, stating that the Plan is qualified under section 401(a) of
the Internal Revenue Code (IRC), and, therefore, the related trust is exempt
from taxation. Subsequent to this determination by the Internal Revenue Service,
the Plan was awarded. Once qualified, the Plan is required to operate in
conformity with the IRC to maintain its qualification. The plan administrator
believes the Plan is being operated in compliance with the applicable
requirements of the IRC and, therefore, believes that the Plan, as amended, is
qualified and the related trust is tax-exempt.
9
Universal Forest Products, Inc. Employees' Profit Sharing and
401(k) Retirement Plan
Notes to Financial Statements (continued)
5. TRANSFER OF PLAN ASSETS
Effective July 1, 2003, the assets of the Shoffner Industries, LLC 401(k) Plan
were transferred into the Plan. The Shoffner Industries, LLC 401(k) Plan is
sponsored by Universal Forest Products Shoffner LLC, part of the Universal
Forest Products, Inc. controlled group. All participants in the Shoffner
Industries, LLC 401(k) Plan became participants of the Plan as of the effective
date.
6. DIFFERENCES BETWEEN FINANCIAL STATEMENTS AND FORM 5500
The following is a reconciliation of assets available for benefits per the
financial statements compared to the Form 5500:
DECEMBER 31
2004 2003
------------- -------------
Assets available for benefits per the financial statements $ 139,742,947 $ 113,649,634
Less: amounts allocated to withdrawn participants - (2,151)
------------- -------------
Assets available for benefits per the Form 5500 $ 139,742,947 $ 113,647,483
============= =============
The following is a reconciliation of benefits paid to participants per the
financial statements compared to the Form 5500:
DECEMBER 31
2004 2003
------------- -------------
Benefits paid to participants per financial statements $ 6,271,724 $ 9,147,224
Add: amounts allocated to withdrawn participants - 2,151
------------- -------------
Benefits paid to participants per Form 5500 $ 6,271,724 $ 9,149,375
============= =============
Amounts allocated to withdrawn participants are recorded on the Form 5500 for
benefit claims that have been processed and approved for payment prior to year
end but have not yet been paid.
10
Universal Forest Products, Inc. Employees' Profit Sharing and
401(k) Retirement Plan
Schedule H, Line 4i - Schedule of Assets (Held at End of Year)
EIN #38-1465835 Plan #001
December 31, 2004
CURRENT
IDENTITY OF ISSUE, BORROWER, LESSOR, OR SIMILAR PARTY DESCRIPTION OF INVESTMENT VALUE
----------------------------------------------------- --------------------------------------------- -------------
COMMON STOCK:
Universal Forest Products, Inc.* Universal Forest Products Stock Fund $ 48,716,978
MUTUAL FUNDS:
American Funds Growth Fund of America 4,460,696
Dreyfus Midcap Index Fund 5,590,366
Evergreen* International Equity Fund 3,666,074
Sht Int Bond Fund 1,408,093
Gartmore Morley Stable Value Fund 32,815,929
Neuberger & Berman Equity Assets Genesis Assets 5,711,882
Van Kampen Growth & Income Fund 11,231,989
Wachovia Securities* Enhanced Stock Market Fund 6,369,507
Wells Fargo Funds Outlook 2040 Fund 1,419,718
Outlook 2030 Fund 1,787,355
Outlook 2020 Fund 7,581,549
Outlook 2010 Fund 1,190,650
Outlook Today Fund 501,319
-------------
83,735,127
Participant loans receivable* Collateralized by vested account balances,
payable in monthly installments with interest
rates ranging from 5.25% to 11.5% 6,412,625
-------------
$ 138,864,730
=============
*Represents party in interest
There were no assets reportable as acquired and disposed of during the year.
11
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, Universal
Forest Products, Inc., as Plan Administrator, has duly caused this annual report
to be signed on its behalf by the undersigned hereunto duly authorized.
Universal Forest Products, Inc. Employee's Profit
Sharing and 401(k) Retirement Plan
Date: June 28, 2005 /s/ Matthew J. Missad
---------------------------------------------------
Matthew J. Missad, Executive Vice President
Universal Forest Products, Inc., Plan Administrator
Date: June 28, 2005 /s/ Michael R. Cole
---------------------------------------------------
Michael R. Cole, Chief Financial Officer
Universal Forest Products, Inc., Plan Administrator
12
EXHIBIT INDEX
Exhibit No. Description
----------- -----------
23 Consent of Ernst & Young LLP