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Universal Forest Products Inc. (UFPI) has announced “cost reductions that will result in annualized savings of $10 million” due to weak sales during the first five months of 2011. The Grand Rapids, Mich. company did not specify where or when these cuts will take place; they do not include one-time charges related to reductions, however.
Year-to-date net sales through May 2011 were down 9.5% to $765 million, the wood products supplier reported, including a decline of 15% percent in net sales to retail customers. UPFI also said its results were affected by “significantly higher fuel prices,” which contributed to a decline in gross margin to 10.5%, or a year-to-date decline of 2.2 percent in May 2011 from the same period of 2010. The decline in year-over-year net sales was due, in part, to lower lumber prices in 2011.
The June 24 announcement comes several days after Michael Glenn, the CEO of Universal Forest Products, resigned his position for health reasons. Glenn has agreed to stay on during the board’s search for a replacement, the company said.