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
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.
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 6-11
III. Supplemental Schedule:
(a) Schedule of Assets (Held at End of Year) 12
IV. Exhibits:
23 Consent of Ernst & Young LLP
99.1 Certificate of the Chief Executive Officer
99.2 Certificate of the Chief Financial Officer
2
Report of Independent Auditors
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, 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. 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
April 23, 2003
3
Universal Forest Products, Inc. Employees' Profit Sharing
and 401(k) Retirement Plan
Statements of Assets Available for Benefits
DECEMBER 31
2002 2001
-----------------------------
ASSETS
Cash $ 375 $ 44
Investments, at fair value 73,785,285 72,524,841
Participant loans receivable 3,455,158 3,185,525
-----------------------------
77,240,443 75,710,366
Employer contribution receivable 879,960 1,100,431
-----------------------------
Assets available for benefits $ 78,120,778 $76,810,841
=============================
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
2002 2001
-----------------------------
ADDITIONS
Participant contributions $ 5,922,646 $ 5,563,559
Employer contributions 2,451,261 2,492,749
Interest income 1,238,290 1,247,680
Dividend income 130,739 133,031
-----------------------------
9,742,936 9,437,019
DEDUCTIONS
Distributions to participants 4,036,148 6,909,631
Administrative expenses 24,832 22,268
Transfers to another qualified plan 143,575
-----------------------------
4,060,980 7,075,474
Net realized and unrealized appreciation (depreciation) in fair value
of investments (4,372,019) 9,201,138
-----------------------------
Net additions 1,309,937 11,562,683
Assets available for benefits at beginning of year 76,810,841 65,248,158
-----------------------------
Assets available for benefits at end of year $78,120,778 $ 76,810,841
=============================
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, 2002 and 2001
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 the Company's Board of Directors, excluding loan 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)
1. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
TRANSFERS TO ANOTHER QUALIFIED PLAN
Certain participants transferred their account balances in 2001 from the Plan to
the Shoffner Industries, LLC 401(k) Plan. Universal Forest Products Shoffner LLC
is part of the Universal Forest Products, Inc. controlled group; therefore, the
transaction was accounted for as a transfer rather than a distribution.
RECLASSIFICATIONS
Certain amounts reported in 2001 have been reclassified to conform with the
presentation used in 2002.
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 Universal
Forest Products, Inc. (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 21 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 his or her employment commencement date.
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.
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 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 an amount equal to 5.7% of the sum of each participant's total compensation
plus compensation that is in excess of the Social Security Integration Level for
the plan year. If the employer does not contribute such amount for all
participants, an amount shall be allocated to each participant's account equal
to the same proportion that each participant's total compensation plus
compensation in excess of the Social Security Integration Level for the plan
year bears to the total compensation plus compensation in excess of the Social
Security Integration Level of all participants in the Plan. Remaining
contributions, if any, shall be allocated to each participant's account in the
same proportion that the participant's compensation for the plan year bears to
the total compensation of all participants for such year.
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.
8
Universal Forest Products, Inc. Employees' Profit Sharing
and 401(k) Retirement 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. As of December 31,
2002 and 2001, assets available for benefits include liabilities for benefits to
be distributed in the succeeding fiscal year to terminated and retired
participants of approximately $221,000 and $29,000, respectively.
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 (4.25% at December 31,
2002) plus 2% calculated on a quarterly 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.
9
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 (depreciated) in fair value as follows:
YEAR ENDED DECEMBER 31
2002 2001
----------------- -----------------
Common stock $ 660,599 $12,340,898
Mutual funds (5,032,618) (3,139,760)
----------------- -----------------
$(4,372,019) $ 9,201,138
================= =================
Individual investments that represent 5% or more of the fair value of the Plan's
assets are as follows:
DECEMBER 31
2002 2001
-----------------------------
Guaranteed Long-Term Fund $22,087,217 $19,534,019
Universal Forest Products, Inc. Unregistered Common Stock Fund 16,770,087 17,646,611
Universal Forest Products, Inc. Registered Common Stock Fund 14,333,647 13,296,926
Large Cap Value/John A. Levin & Co. Fund 6,146,924 7,621,428
CIGNA Lifetime 40 Fund 5,476,176 5,819,103
4. FEDERAL INCOME TAXES
The Plan has received a determination letter from the Internal Revenue Service
dated April 4, 1996, 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 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.
10
Universal Forest Products, Inc. Employees' Profit Sharing
and 401(k) Retirement Plan
Notes to Financial Statements (continued)
5. SUBSEQUENT EVENT
During 2003, the Shoffner Industries, LLC 401(k) Plan will be merged into the
Plan. All assets of the Plan will be combined with those of the Shoffner
Industries, LLC 401(k) Plan and the assets will be transferred to the existing
trust created by the Plan. All benefits payable under the merged plans shall be
paid from this trust.
11
EIN: 38-2511179
Plan #: 002
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, 2002
IDENTITY OF ISSUER, FAIR
BORROWER, LESSOR OR SIMILAR PARTY DESCRIPTION OF INVESTMENT VALUE
----------------------------------------------------------------------------------------------------------------------------------
Common Stock:
Universal Forest Products, Inc. * Unregistered Common Stock Fund (786,545 shares) $16,770,087
Registered Common Stock Fund (671,335 shares) 14,333,647
-----------
31,103,734
Mutual Funds:
Connecticut General Insurance Company Guaranteed Long-Term Fund (527,957 shares) 22,087,217
Investments * Large Cap Value/John A. Levin & Co. Fund (548,859 shares) 6,146,924
S&P 500 Index (55,390 shares) 2,702,205
Janus Account (41,156 shares) 1,295,546
Small Cap Value/Berger Fund (106,966 shares) 1,576,642
Mid Cap Growth/Artisan Partners Fund (198,639 shares) 1,347,686
Lazard International Equity Account (72,688 shares) 942,004
CIGNA Lifetime 20 Fund (18,302 shares) 187,372
CIGNA Lifetime 30 Fund (44,005 shares) 467,500
CIGNA Lifetime 40 Fund (515,564 shares) 5,476,176
CIGNA Lifetime 50 Fund (27,383 shares) 302,764
CIGNA Lifetime 60 Fund (12,490 shares) 149,515
-----------
42,681,551
Participant Loans Receivable * Collateralized by vested account balances, payable in
monthly installments with interest ranging from 6.75% to 11.5% 3,455,158
-----------
$77,240,443
===========
*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. Employees'
Profit Sharing and 401(k) Retirement Plan
Date: June 20, 2003 /s/ Matthew J. Missad
------------------ ------------------------------------------
Matthew J. Missad, Executive Vice President
Universal Forest Products, Inc.,
Plan Administrator
13
EXHIBIT INDEX
23 Consent of Ernst & Young LLP
99.1 Certificate of the Chief Executive Officer of Universal Forest Products,
Inc., 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,
Inc., pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
(18 U.S.C. 1350).