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, 2003
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 13
TABLE OF CONTENTS
Page No.
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I. Report of Independent Registered Public Accounting Firm 3
II. Financial Statements for the Years Ended December 31, 2003
and December 31, 2002:
(a) Statements of Assets Available for Benefits 4
(b) Statements of Changes in Assets Available for
Benefits 5
(c) Notes to Financial Statements 6-11
III. Supplemental Schedule:
(a) Schedule of Assets (Held at End of Year) 12
IV. Exhibits:
23 Consent of Ernst & Young LLP
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, 2003 and 2002, 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 the 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. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as 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, 2003 and 2002, 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, 2003, 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, Michigan
April 24, 2004
3
Universal Forest Products, Inc. Employees' Profit Sharing
and 401(k) Retirement Plan
Statements of Assets Available for Benefits
DECEMBER 31
2003 2002
----------------------------
ASSETS
Cash $ 375
Investments, at fair value $107,330,538 73,785,285
Participant loans receivable 5,177,025 3,455,158
---------------------------
112,507,563 77,240,443
Employee contribution receivable 179,001
Employer contribution receivable 963,070 879,960
---------------------------
Assets available for benefits $113,649,634 $78,120,778
===========================
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
YEAR ENDED DECEMBER 31
2003 2002
------------------------------
ADDITIONS
Participant contributions $ 7,279,648 $ 5,922,646
Employer contributions 2,916,597 2,451,261
Interest income 608,704 1,238,290
Dividend income 309,684 130,739
Transfer from another qualified plan 13,602,777
------------------------------
24,717,410 9,742,936
DEDUCTIONS
Distributions to participants 9,147,224 4,036,148
Administrative expenses 136,450 24,832
------------------------------
9,283,674 4,060,980
Net realized and unrealized appreciation (depreciation) in
fair value of investments 20,095,120 (4,372,019)
------------------------------
Net additions 35,528,856 1,309,937
Assets available for benefits at beginning of year 78,120,778 76,810,841
------------------------------
Assets available for benefits at end of year $113,649,634 $ 78,120,778
==============================
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, 2003 and 2002
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 accounting principles
generally accepted in the United States 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 generally 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. Net
appreciation or depreciation in the fair value of investments is determined
using the beginning of the year value or purchase price if acquired during the
year.
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 the amount reported in the statements of assets available for benefits.
ADMINISTRATIVE EXPENSES
Administrative expenses incurred in connection with the operations of the Plan
are deducted from the amount of the total annual discretionary contribution
approved by Universal Forest Products, Inc.'s (the Company) Board of Directors,
excluding loan and certain investment fees, which are paid out of participant's
accounts.
6
Universal Forest Products, Inc. Employees' Profit Sharing
and 401(k) Retirement Plan
Notes to Financial Statements (continued)
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
anniversaries of their employment commencement date.
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 may contribute a discretionary amount annually 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.
7
Universal Forest Products, Inc. Employees' Profit Sharing
and 401(k) Retirement Plan
Notes to Financial Statements (continued)
2. DESCRIPTION OF THE PLAN (CONTINUED)
Additionally, the Company made quarterly matching contributions of $.50 for each
$1.00 contributed by participants in the current and prior years. The basis for
matching contributions may not exceed the lessor of 6% of the participant's
annual compensation or the amount permitted by the Internal Revenue Code (IRC).
This amount is not guaranteed, may vary from year to year and the Company is not
obligated to make such contributions.
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 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.
8
Universal Forest Products, Inc. Employees' Profit Sharing
and 401(k) Retirement Plan
Notes to Financial Statements (continued)
2. DESCRIPTION OF THE PLAN (CONTINUED)
Participants may borrow from their account a minimum amount of $1,000 up to a
maximum equal to the lessor of $50,000 or 50% of their vested account balance.
Loan transactions are a general investment of the Plan. Loan terms range from
one to five years or up to twenty-five years for the purchase of a residence.
The loans bear interest at a rate equal to the prime rate (4% at December 31,
2003) plus 2% calculated on a daily basis. A participant may only have five
loans outstanding at any time and one new loan for every twelve-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.
3. INVESTMENTS
The Plan's investments (including investments purchased and held during the
year) appreciated (depreciated) in fair value as follows:
YEAR ENDED DECEMBER 31
2003 2002
------------------------------
Common stock $15,220,784 $ 660,599
Mutual funds 4,874,336 (5,032,618)
------------------------------
$20,095,120 $(4,372,019)
==============================
9
Universal Forest Products, Inc. Employees' Profit Sharing
and 401(k) Retirement Plan
Notes to Financial Statements (continued)
3. INVESTMENTS (CONTINUED)
Individual investments that represent 5% or more of the fair value of the Plan's
assets are as follows:
DECEMBER 31
2003 2002
---------------------------------
Universal Forest Products Stock Fund $ 36,771,990 $31,103,734
Gartmore Morley Stable Value Fd Instl 31,184,278
Van Kampen Growth & Income Fd Cl A 9,240,048
Wells Fargo Fds Tr Outlook 2020 Fd Cl A 6,872,120
Guaranteed Long-Term Fund 22,087,217
Large Cap Value/John A. Levin & Co. Fund 6,146,924
CIGNA Lifetime 40 Fund 5,476,176
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. 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.
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.
10
Universal Forest Products, Inc. Employees' Profit Sharing
and 401(k) Retirement Plan
Notes to Financial Statements (continued)
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
2003 2002
----------------------------------
Assets available for benefits per the financial statements $ 113,649,634 $ 78,120,778
Less: amounts allocated to withdrawn participants (2,151) (221,152)
---------------------------------
Assets available for benefits per the Form 5500 $ 113,647,483 $ 77,899,626
=================================
The following is a reconciliation of benefits paid to participants per the
financial statements compared to the Form 5500:
DECEMBER 31
2003 2002
--------------------------
Benefits paid to participants per financial statements $9,147,224 $4,036,148
Add: amounts allocated to withdrawn participants 2,151 221,152
--------------------------
Benefits paid to participants per Form 5500 $9,149,375 $4,257,300
==========================
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.
11
Universal Forest Products, Inc. Employees' Profit Sharing and 401(k) Retirement
Plan
Schedule H, Line 4i--Schedule of Assets (Held at End of Year)
December 31, 2003
IDENTITY OF ISSUER, BORROWER, FAIR
LESSOR OR SIMILAR PARTY DESCRIPTION OF INVESTMENT VALUE
----------------------------------------------------------------------------------------------------------------------------------
Common stock:
Universal Forest Products, Inc. * Universal Forest Products Stock Fund (1,148,852 shares) $ 36,771,990
Mutual funds:
Wachovia Securities* Gartmore Morley Stable Value Fd Instl (1,724,901 shares) 31,184,278
Van Kampen Growth & Income Fd Cl A (512,198 shares) 9,240,048
Enhanced Stock Market Fund (72,242 shares) 5,316,636
Dreyfus S&P Midcap Index Fd Inc (175,125 shares) 4,090,919
Neuberger & Berman Equity Assets Genesis Assets (183,473 shares) 3,988,693
Growth Fd Amer Inc Com (130,845 shares) 3,210,930
Evergreen International Equity Fd Cl I (331,742 shares) 2,537,825
Evergreen Sht Int Bd Fd Cl I (79,126 shares) 1,012,032
Wells Fargo Fds Tr Outlook 2040 Fd Cl A (56,955 shares) 792,809
Wells Fargo Fds Tr Outlook 2030 Fd Cl A (74,994 shares) 983,919
Wells Fargo Fds Tr Outlook 2020 Fd Cl A (544,111 shares) 6,872,120
Wells Fargo Fds Tr Outlook 2010 Fd Cl A (77,483 shares) 925,917
Wells Fargo Fds Tr Outlook Today Fd Cl A (40,363 shares) 402,422
------------
70,558,548
Participant loans receivable * Collateralized by vested account balances, payable in monthly
installments with interest rates ranging from 6.75% to 11.5% 5,177,025
------------
$112,507,563
============
*Represents parties-in-interest.
There were no assets reportable as acquired and disposed of during the year.
12
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 25, 2004 /s/ Matthew J. Missad
------------- ---------------------------------------------------
Matthew J. Missad, Executive Vice President
Universal Forest Products, Inc., Plan Administrator
Date: June 25, 2004 /s/ Michael R. Cole
------------- ---------------------------------------------------
Michael R. Cole, Chief Financial Officer
Universal Forest Products, Inc., Plan Administrator
13
EXHIBIT INDEX
Exhibit No. Description
----------- -----------
23 Consent of Ernst & Young LLP