Universal Forest Products Reports Record Year.

Fourth Quarter Hard Hit by Declining Markets Company Well-Positioned for Growth in 2007 and Beyond

GRAND RAPIDS, Mich. -- Universal Forest Products, Inc. (Nasdaq:UFPI) today reported a record year including 2006 net earnings of $70.1 million, an increase of 4.1% over reported results for 2005. Net earnings for the quarter were $9.2 million, down 42.9% from 2005. In the fourth quarter of 2006, the Company's income taxes were impacted by a federal research and development tax credit totaling $4.5 million (for tax years 2001 to 2006) and an expense of $1.1 million to record a valuation allowance against a deferred tax asset.

Net sales for the year were $2.66 billion, a 1.0% decrease from net sales of $2.69 billion for 2005. For the quarter, net sales were $499.2 million, down 23.6% from the same period in 2005. Net sales for the year and quarter were impacted by lower lumber prices.

"This year's story is the story behind the numbers - the story of a motivated workforce focused on gaining market share, on continuous improvement, and on positioning Universal for the future," said President and CEO Michael B. Glenn.

Glenn noted that the company's performance reflects challenging market conditions including a 41% drop in single family housing starts for the quarter and an estimated 50% decrease in industry shipments of HUD-code manufactured housing for the quarter. He also noted that industry conditions in the fourth quarter of 2005 were extraordinarily strong due, in part, to demand associated with hurricanes Katrina and Rita.

In addition, sales were impacted by the lumber market, which was off 16% for the year and 23% for the quarter. By market, Universal posted the following gross sales results:

* Annual D-I-Y retail sales of $962.2 million a 5.0% decrease from 2005. Fourth quarter sales to this market were down 24.4% from the same period last year;

* Site-built construction sales of $811.9 million for 2006, up 7.7% over annual sales for 2005. Fourth quarter sales decreased 22.0% from 2005;

* Industrial sales for the year of $550.7 million, an increase of 4.3% over 2005. Fourth quarter 2006 sales decreased 12.6% from the same period last year; and

* Manufactured housing sales for 2006 of $382.2 million, down 13.1% for the year. Fourth quarter sales to this market were down 36.5% from 2005.

"Our people have a relentless focus on being the best supplier to our customers and on driving waste out of our operations and processes," Glenn said. "We gained market share this quarter and set the stage for growth and opportunity in 2007 and beyond."

In October 2006, the Company announced a growth plan that calls for attaining $4 billion in sales by 2010, among other goals. Glenn noted that the Company is making great early strides toward those goals. For example, in November the Company closed on the purchase of certain assets of the Banks Lumber division of Banks Corp. Banks Lumber had 2005 sales of $147 million. The Company anticipates a Feb. 12, 2007 close on the purchase of Aljoma Lumber, a manufacturer of pressure-treated wood serving Southern Florida and the Caribbean islands that reported $230 million in revenues for the fiscal year ended July 31, 2006.

OUTLOOK

The Company anticipates growth in its business in 2007. Key assumptions with respect to the Company's 2007 outlook include:

* A difficult housing market for the first half of 2007, which improves later in the year as the excess supply of new single-family homes subsides.

* Stable or modest gains in home improvement expenditures driven by the continued growth of an aging housing stock, all-time home ownership rates, and strong home sales in recent years.

* A continued oversupply of lumber, resulting in low prices.

* Opportunities for market share gains in site-built construction, industrial business, and DIY, including consumer products.

* The complete integration of strategic business acquisitions that occurred in 2006, such as Banks Lumber, and the completion of anticipated acquisitions in 2007, such as Aljoma Lumber.

With these factors in mind, the Company is targeting unit sales growth of 10% to 15% and net earnings growth of 5% to 10% in 2007 over 2006 net earnings, excluding the federal research and development tax credit and the deferred tax valuation allowance previously mentioned.

Universal Forest Products will conduct a conference call to discuss information included in this news release and related matters at 11:00 a.m. EST on Tuesday, February 6, 2007. The conference call will be hosted by Executive Chairman William G. Currie, President and CEO Michael B. Glenn, and CFO Michael Cole, and will be available for analysts and institutional investors domestically at [phone] or internationally at [phone]. Use conference passcode #24434858.

The conference call will be available simultaneously, and in its entirety, to all interested investors and news media through a web cast at http://www.ufpi.com . A replay of the call will be available through Tues., March 6, 2007 domestically at [phone] or internationally at [phone]. Please use replay ID number 45151545.

Universal Forest Products markets, manufactures and engineers wood and wood-alternative products for D-I-Y retail home centers, structural lumber products for the manufactured housing industry, engineered wood components for the site-built construction market and specialty wood packaging for various industries. The company also provides framing services for the site-built sector. The Company has approximately 9,500 employees who work in more than 100 locations. For information about Universal Forest Products on the Internet, please visit the Company's web site at http://www.ufpi.com , or call 888-Buy-UFPI.

Included in this report are certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements are based on the beliefs of the Company's management as well as on assumptions made by and information currently available to the Company at the time such statements were made. Actual results could differ materially from those included in such forward-looking statements. Investors are cautioned that all forward-looking statements involve risks and uncertainty. Among the factors that could cause actual results to differ materially are the following: Adverse lumber market trends, competitive activity, negative economic trends, government regulations, and weather. These risk factors and additional information are included in the company's reports on Form 10K and 10Q on file with the Securities and Exchange Commission.

FINANCIAL HIGHLIGHTS TO FOLLOW
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