SECURITIES AND EXCHANGE COMISSION
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, 2005
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 11
Universal Forest Products, Inc. Employees' Profit Sharing and
401(k) Retirement Plan
Financial Statements and Supplemental Schedule
Years Ended December 31, 2005 and 2004
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) ............. 10
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, 2005 and 2004, 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. We were not engaged to perform an
audit of the Plan's internal control over financial reporting. Our audits
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, 2005 and 2004, 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, 2005, 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, are fairly stated in all material respects in relation to the financial
statements taken as a whole.
/s/ Ernst & Young LLP
Grand Rapids, Michigan
June 2, 2006
3
Universal Forest Products, Inc. Employees' Profit Sharing and
401(k) Retirement Plan
Statements of Assets Available for Benefits
DECEMBER 31
---------------------------
2005 2004
------------ ------------
ASSETS
Cash $ 7,960 $ 24
Investments, at fair value 157,693,815 132,452,105
Participant loans receivable 7,508,889 6,412,625
------------ ------------
165,202,704 138,864,730
Participant contribution receivable 159,457 --
Employer contribution receivable 901,295 878,193
------------ ------------
Assets available for benefits $166,271,416 $139,742,947
============ ============
See accompanying notes.
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
---------------------------
2005 2004
------------ ------------
ADDITIONS
Participant contributions $ 9,913,171 $ 9,213,476
Employer contributions 3,791,022 3,471,871
Interest income 454,040 339,184
Dividend income 2,301,804 982,729
------------ ------------
16,460,037 14,007,260
DEDUCTIONS
Distributions to participants 8,229,385 6,271,724
Administrative expenses 419,827 437,467
------------ ------------
8,649,212 6,709,191
Net realized and unrealized appreciation in fair value
of investments 18,717,644 18,795,244
------------ ------------
Net additions 26,528,469 26,093,313
Assets available for benefits at beginning of year 139,742,947 113,649,634
------------ ------------
Assets available for benefits at end of year $166,271,416 $139,742,947
============ ============
See accompanying notes.
5
Universal Forest Products, Inc. Employees' Profit Sharing and
401(k) Retirement Plan
Notes to Financial Statements
December 31, 2005 and 2004
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 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,
2005, 1,173,186 units were outstanding with a value of $54.32 per unit (at
December 31, 2004, 1,137,123 units were outstanding with a value of $42.84 per
unit).
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, certain 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 (7.25% at
December 31, 2005) 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
-------------------------
2005 2004
----------- -----------
Common stock $14,470,991 $13,030,345
Mutual funds 4,246,653 5,764,899
----------- -----------
$18,717,644 $18,795,244
=========== ===========
Individual investments that represent 5% or more of the fair value of the Plan's
assets are as follows:
DECEMBER 31
-------------------------
2005 2004
----------- -----------
Universal Forest Products Stock Fund $63,723,363 $48,716,978
Gartmore Morley Stable Value Fund 34,505,352 32,815,929
Van Kampen Growth & Income Fund 12,393,201 11,231,989
Wells Fargo Outlook 2020 Fund -- 7,581,549
4. FEDERAL INCOME TAXES
The Plan has received a determination letter from the Internal Revenue Service
dated April 2, 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 amended. 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
Schedule H, Line 4i - Schedule of Assets (Held at End of Year)
EIN #38-1465835 Plan #001
December 31, 2005
IDENTITY OF ISSUE, BORROWER, LESSOR, OR SIMILAR PARTY DESCRIPTION OF INVESTMENT CURRENT VALUE
----------------------------------------------------- ------------------------------------ -------------
COMMON STOCK:
Universal Forest Products, Inc.* Universal Forest Products Stock Fund $ 63,723,363
MUTUAL FUNDS:
American Funds Growth Fund of America 6,465,125
Dreyfus Midcap Index Fund 7,656,794
Evergreen* International Equity Fund 4,094,698
Sht Int Bond Fund 1,365,313
Gartmore Morley Stable Value Fund 34,505,352
Neuberger & Berman Equity Assets Genesis Assets 7,222,153
Van Kampen Growth & Income Fund 12,393,201
Wachovia Securities* Enhanced Stock Market Fund 6,370,330
Wells Fargo Funds Outlook 2040 Fund 1,665,091
Outlook 2030 Fund 2,108,245
Outlook 2020 Fund 7,889,048
Outlook 2010 Fund 1,440,168
Outlook Today Fund 794,934
------------
93,970,452
Participant loans receivable* Collateralized by vested account
balances, payable in monthly
installments with interest rates
ranging from 5.25% to 11.5% 7,508,889
------------
$165,202,704
============
* Represents party in interest.
There were no assets reportable as acquired and disposed of during the year.
10
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 27, 2006 /s/ Matthew J. Missad
--------------------------------------------------
Matthew J. Missad, Executive Vice President
Universal Forest Products, Inc., Plan Administrator
Date: June 27, 2006 /s/ Michael R. Cole
--------------------------------------------------
Michael R. Cole, Chief Financial Officer
Universal Forest Products, Inc., Plan Administrator
11
EXHIBIT INDEX
Exhibit No. Description
----------- -----------
23 Consent of Ernst & Young LLP