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, 2002
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED].
Commission file number: 0-22684
SHOFFNER INDUSTRIES, LLC 401(K) PLAN
5631 SOUTH NC HIGHWAY 62
BURLINGTON, NC 27215
(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, MI 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
TABLE OF CONTENTS
Page No.
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I. Report of Independent Auditors. 3
II. Financial Statements for the Years Ended December 31, 2002
and December 31, 2001:
(a) Statements of Assets Available for Benefits 4
(b) Statements of Changes in Assets Available
for Benefits 5
(c) Notes to Financial Statements 6-10
III. Supplemental Schedule:
(a) Schedule of Assets (Held at End of Year) 11
IV. Exhibits:
99.1 Certificate of the Chief Executive Officer
99.2 Certificate of the Chief Financial Officer
2
Report of Independent Auditors
Plan Administrator
Shoffner Industries, LLC 401(k) Plan
We have audited the accompanying statements of assets available for benefits of
Shoffner Industries, LLC 401(k) Plan as of December 31, 2002 and 2001 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 generally accepted
in the 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, 2002 and 2001, and the changes in its assets available for benefits for the
years then ended, in conformity with accounting principles generally accepted in
the United States.
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, 2002, 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. The 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
April 23, 2003
3
Shoffner Industries, LLC 401(k) Plan
Statements of Assets Available for Benefits
DECEMBER 31
2002 2001
----------- -----------
ASSETS
Investments, at fair value $12,115,789 $12,239,275
Participant loans receivable 691,505 512,798
----------- -----------
12,807,294 12,752,073
Contributions receivable:
Employer 7,540 7,683
Participant 17,887 18,141
----------- -----------
Assets available for benefits $12,832,721 $12,777,897
=========== ===========
See accompanying notes to financial statements.
4
Shoffner Industries, LLC 401(k) Plan
Statements of Changes in Assets Available for Benefits
YEAR ENDED DECEMBER 31
2002 2001
------------ ------------
ADDITIONS
Participant contributions $ 1,420,246 $ 1,404,304
Employer contributions 542,422 538,143
Interest income 44,243 43,955
Dividend income 67,191 94,252
Transfers from another qualified plan 143,575
------------ ------------
2,074,102 2,224,229
DEDUCTIONS
Distributions to participants 880,460 855,771
Administrative expenses 64,074 37,288
------------ ------------
944,534 893,059
Net realized and unrealized depreciation in
fair value of investments (1,074,744) (856,618)
------------ ------------
Net additions 54,824 474,552
Assets available for benefits at beginning of year 12,777,897 12,303,345
------------ ------------
Assets available for benefits at end of year $12,832,721 $12,777,897
=========== ===========
See accompanying notes to financial statements.
5
Shoffner Industries, LLC 401(k) Plan
Notes to Financial Statements
December 31, 2002 and 2001
1. SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING
The financial statements of the Shoffner Industries, LLC 401(k) 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
Investments are stated at fair value. Fair values of the investments are based
on quoted market prices as of the end of the year. Investment income from mutual
funds is recognized as earned.
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 statement
of assets available for benefits.
ADMINISTRATIVE EXPENSES
Administrative expenses incurred in connection with the operations of the Plan
are deducted from individual participant account earnings prior to allocations
to the participant's accounts. Loan fees are paid directly out of participant
accounts.
6
Shoffner Industries, LLC 401(k) Plan
Notes to Financial Statements (continued)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
TRANSFERS FROM ANOTHER QUALIFIED PLAN
Certain participants transferred their account balances in 2001 from the
Universal Forest Products, Inc. Employees' Profit Sharing and 401(k) Retirement
Plan to the Plan. Universal Forest Products Shoffner LLC (the Company) is part
of the Universal Forest Products, Inc. controlled group; therefore, the
transaction was accounted for as a transfer rather than a contribution.
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 plan that provides tax-deferred benefits for
all eligible employees of the Company. The Plan is subject to the provisions of
the Employee Retirement Income Security Act of 1974 (ERISA).
Eligible participants consist of all employees of the Company who are 20 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, during a plan year beginning January 1.
Participants may voluntarily contribute up to 15% of their compensation as a
401(k) contribution subject to certain regulatory limitations. Participant
contributions to the Plan vest immediately.
The Company matches 50% of participant contributions up to the first 6% of the
participant's compensation. Additional employer contributions are determined
solely at the discretion of the Company and are allocated to participants in the
same ratio that each participant's compensation for the plan year bears to the
total compensation of all participants for the plan year. Forfeited non-vested
amounts are used to reduce future contributions of the Company.
7
Shoffner Industries, LLC 401(k) Plan
Notes to Financial Statements (continued)
2. DESCRIPTION OF THE PLAN (CONTINUED)
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 transactions are a general investment of the Plan. Loan terms range from
one to five years or up to ten years for the purchase of a primary residence.
The loans bear interest at a rate equal to the prime rate (4.25% at December 31,
2002) plus 1% calculated on a quarterly basis. A participant may only have one
loan outstanding at any time.
Participants may select from various investment options made available by the
Plan. On a daily basis, the trustee allocates the net investment income or loss
attributable to each investment fund to the individual participant accounts in
proportion to the total participant account balances.
Although it has not expressed any intent to do so, the Company has the right
under the Plan to discontinue its contributions at any time and terminate the
Plan subject to the provisions of ERISA. In the event of the Plan's termination,
participants will become fully vested in their accounts.
8
Shoffner Industries, LLC 401(k) Plan
Notes to Financial Statements (continued)
3. INVESTMENTS
The Plan's investments (including investments purchased, sold and held during
the year) appreciated (depreciated) in fair value as follows:
YEAR ENDED DECEMBER 31
2002 2001
----------- ---------
Mutual funds $(1,094,190) $(899,983)
Common stock 19,446 43,365
----------- ---------
$(1,074,744) $(856,618)
=========== =========
Individual investments that represent 5% or more of the fair value of the Plan's
assets are as follows:
DECEMBER 31
2002 2001
----------- -----------
Enhanced Stock Market Fund $ 957,561 $ 802,926
Evergreen Short Duration Fund 747,440
Evergreen Stock Selector Fund 2,104,612
Federated Stock Fund 1,466,527
Invesco Total Return Fund 1,414,369
Janus Advisor Worldwide Fund 1,118,123
Stable Investment Fund 6,173,855 5,154,095
Wells Fargo Outlook 2020 Fund 1,051,587
4. INCOME TAX STATUS
The Plan has received a determination letter from the Internal Revenue Service
dated October 21, 1994, stating that the Plan is qualified under section 401(a)
of the Internal Revenue Code (the IRC) and, therefore, the related trust is
exempt from taxation. Subsequent to this issuance of the determination letter,
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
Shoffner Industries, LLC 401(k) Plan
Notes to Financial Statements (continued)
5. SUBSEQUENT EVENT
During 2003, the Plan will be merged into the Universal Forest Products, Inc.
Employee Profit Sharing Plan and 401(k) Retirement Plan. All assets of the Plan
will be combined with those of the Universal Forest Products, Inc. Employee
Profit Sharing and 401(k) Retirement Plan and the assets will be transferred to
the existing trust created by the Universal Forest Products, Inc. Employee
Profit Sharing and 401(k) Retirement Plan. All benefits payable under the merged
plans shall be paid from this trust.
10
EIN: 38-2467687
Plan #001
Shoffner Industries, LLC 401(k) Plan
Schedule H, Line 4i--Schedule of Assets (Held at End of Year)
December 31, 2002
IDENTITY OF ISSUE, BORROWER,
LESSOR OR SIMILAR PARTY DESCRIPTION OF INVESTMENT FAIR VALUE
--------------------------------------------------------------------------------------------------------------------------------
Mutual Funds:
Wachovia Bank* Dreyfus S&P Midcap Index Fund (7,876 shares) $ 137,600
Enhanced Stock Market Fund (17,157 shares) 957,561
Evergreen Short Duration Fund (60,794 shares) 747,440
Evergreen Stock Selector Fund (1 share) 9
Federated Stock Fund (53,956 shares) 1,466,527
Franklin Growth Fund (7,141 shares) 169,950
Franklin Templeton Foreign Fund (7,906 shares) 65,701
Janus Advisor Worldwide Fund (27,924 shares) 603,434
Neuberger & Berman Equity Assets Fund (28,744 shares) 475,999
Stable Investment Fund (215,186 shares) 6,173,855
Wells Fargo Outlook 2020 Fund (98,463 shares) 1,051,587
Wells Fargo Outlook 2030 Fund (527 shares) 5,708
Wells Fargo Outlook 2040 Fund (448 shares) 4,955
Common Stock:
Universal Forest Products, Inc.* 29,864 shares 255,463
-------------
12,115,789
Participant Loans Receivable* Collateralized by vested account balances, payable in monthly
installments with interest ranging from 5.25% to 10.5% 691,505
-------------
$ 12,807,294
=============
* 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 Shoffner LLC, as Plan Administrator, has duly caused this annual
report to be signed on its behalf by the undersigned hereunto duly authorized.
Shoffner Industries, LLC 401(k) Plan
Date: June 20, 2003 /s/ Matthew J. Missad
------------------- ------------------------------------
Matthew J. Missad, Secretary
Universal Forest Products Shoffner LLC,
Plan Administrator
12
EXHIBIT INDEX
99.1 Certificate of the Chief Executive Officer of Universal Forest Products
Shoffner LLC, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
(18 U.S.C. 1350).
99.2 Certificate of the Chief Financial Officer of Universal Forest Products
Shoffner LLC, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
(18 U.S.C. 1350).