PLEASANTON, Calif., May 1 /PRNewswire-FirstCall/ -- Simpson
Manufacturing Co., Inc. (the "Company") announced today that its
first quarter 2008 net sales decreased 13.2% to $167.7 million as
compared to net sales of $193.2 million for the first quarter of
2007. Net income decreased 51.7% to $8.4 million for the first
quarter of 2008 as compared to net income of $17.3 million for the
first quarter of 2007. Diluted net income per common share was
$0.17 for the first quarter of 2008 as compared to $0.35 for the
first quarter of 2007. In the first quarter of 2008, sales declined
throughout the United States, with the exception of the
northeastern region of the country. California and the western
states had the largest decrease in sales. Sales during the quarter
in Canada increased significantly while sales in Europe, as a
whole, were up slightly. Simpson Strong-Tie's first quarter sales
decreased 14.1% from the same quarter last year, while Simpson
Dura-Vent's sales decreased 1.4%. Simpson Strong-Tie's sales to
contractor distributors had the largest percentage rate decrease
and sales to home centers and dealer distributors also decreased.
Sales decreased across all of Simpson Strong-Tie's major product
lines, particularly those used in new home construction. Sales of
the Swan Secure product line, acquired in July 2008, accounted for
approximately 5% of Simpson Strong-Tie's first quarter sales. Sales
of Simpson Dura-Vent's pellet vent, chimney and Direct-Vent
products increased while sales of its gas vent product line
decreased as a result of several factors, including the decline in
new home construction. Income from operations decreased 49.3% from
$26.6 million in the first quarter of 2007 to $13.5 million in the
first quarter of 2008. Gross margins decreased from 37.1% in the
first quarter of 2007 to 33.6% in the first quarter of 2008. The
decrease in gross margins was primarily due to a higher proportion
of fixed overhead costs to total costs, resulting primarily from
the lower sales volume. The steel market continues to be dynamic
with a high degree of uncertainty. Since December 31, 2007, total
inventories have increased 4.4%. In 2008, the Company is
anticipating further increases in steel prices. If steel prices
continue to increase and the Company is not able to increase its
prices sufficiently, the Company's margins could further
deteriorate. Research and development and engineering expenses
decreased 3.0% from $5.3 million in the first quarter of 2007 to
$5.1 million in the first quarter of 2008. This decrease was
primarily due to a decrease in cash profit sharing of $0.4 million
partially offset by an increase in other personnel costs of $0.2
million. Selling expenses increased 9.1% from $18.2 million in the
first quarter of 2007 to $19.8 million in the first quarter of
2008. The increase was driven primarily by a $1.5 million increase
in expenses associated with sales and marketing personnel. General
and administrative expenses decreased 17.4% from $21.6 million in
the first quarter of 2007 to $17.9 million in the first quarter of
2008. The major components of the decrease were decreases in cash
profit sharing of $4.0 million, resulting from decreased operating
profit, adjustments to the bad debt reserves of $1.0 million and
lower professional service fees of $0.6 million. This decrease was
partly offset by increases in personnel costs of $1.1 million and
increased amortization of intangible assets of $0.6 million, both
of which increased primarily as a result of the acquisition of Swan
Secure Products, Inc. in July 2007. The effective tax rate was
42.8% in the first quarter of 2008, up from 38.1% in the first
quarter of 2007. The increase in the effective tax rate was caused
by many factors, including a decrease in tax-exempt interest
income, losses in certain foreign operations where the Company did
not record a tax benefit and the expiration of federal research and
development tax credits in 2008. In April 2008, the Company's newly
formed subsidiary, Simpson Strong-Tie Ireland Limited, purchased
certain assets of Liebig International Ltd., an Irish company,
Heinrich Liebig Stahldubelwerke GmbH, Liebig GmbH & Co. KG and
Liebig International Verwaltungsgesellschaft mbH, all German
companies, Liebig Bolts Limited, an English company, and Liebig
International Inc., a U.S. Company (collectively "Liebig"). Liebig
manufactures mechanical anchor products in Ireland and distributes
them primarily throughout Europe through warehouses located in
Germany and in the United Kingdom. The purchase price (subject to
post-closing adjustments) was $18.3 million in cash. Also in April,
the Company's Board of Directors declared a cash dividend of $0.10
per share. The record date for the cash dividend is July 3, 2008,
and it will be paid on July 24, 2008. Investors, analysts and other
interested parties are invited to join the Company's conference
call on Friday, May 2, 2008, at 6:00 am Pacific Time. To
participate, callers may dial 800-896-8445. The call will be
webcast simultaneously as well as being available for one month
through a link on the Company's website at
http://www.simpsonmfg.com/. This document contains forward-looking
statements, based on numerous assumptions and subject to risks and
uncertainties. Although the Company believes that the
forward-looking statements are reasonable, it does not and cannot
give any assurance that its beliefs and expectations will prove to
be correct. Many factors could significantly affect the Company's
operations and cause the Company's actual results to differ
substantially from the Company's expectations. Those factors
include, but are not limited to: (i) general economic and
construction business conditions; (ii) customer acceptance of the
Company's products; (iii) relationships with key customers; (iv)
materials and manufacturing costs; (v) the financial condition of
customers, competitors and suppliers; (vi) technological
developments; (vii) increased competition; (viii) changes in
capital market conditions; (ix) governmental and business
conditions in countries where the Company's products are
manufactured and sold; (x) changes in trade regulations; (xi) the
effect of acquisition activity; (xii) changes in the Company's
plans, strategies, objectives, expectations or intentions; and
(xiii) other risks and uncertainties indicated from time to time in
the Company's filings with the U.S. Securities and Exchange
Commission. Actual results might differ materially from results
suggested by any forward-looking statements in this report. The
Company does not have an obligation to publicly update any
forward-looking statements, whether as a result of the receipt of
new information, the occurrence of future events or otherwise. The
Company's results of operations for the three months ended March
31, 2008 and 2007 (unaudited), are as follows: Three Months Ended
March 31, (Amounts in thousands, except per share data) 2008 2007
Net sales $167,656 $193,155 Cost of sales 111,398 121,533 Gross
profit 56,258 71,622 Research and development and engineering
expenses 5,103 5,260 Selling expenses 19,807 18,154 General and
administrative expenses 17,874 21,638 Income from operations 13,474
26,570 Income (loss) in equity method investment, before tax - (33)
Interest income, net 1,128 1,374 Income before taxes 14,602 27,911
Provision for income taxes 6,250 10,621 Net income $8,352 $17,290
Net income per share: Basic $0.17 $0.36 Diluted 0.17 0.35 Cash
dividend declared per common share $0.10 $0.10 Weighted average
shares outstanding: Basic 48,574 48,414 Diluted 48,931 48,886 Other
data: Depreciation, amortization $7,420 $7,077 Pre-tax stock
compensation expense 936 1,677 The Company's financial position as
of March 31, 2008 and 2007, and December 31, 2007 (unaudited), is
as follows: March 31, December 31, (Amounts in thousands) 2008 2007
2007 Cash and short-term investments $164,381 $149,310 $186,142
Trade accounts receivable, net 107,634 126,577 88,340 Inventories
227,855 208,797 218,342 Assets held for sale 9,677 - 9,677 Other
current assets 20,061 19,045 20,376 Total current assets 529,608
503,729 522,877 Property, plant and equipment, net 195,319 206,442
198,117 Goodwill 57,845 44,617 57,418 Other noncurrent assets
40,655 21,568 39,267 Total assets $823,427 $776,356 $817,679 Trade
accounts payable $34,745 $35,863 $27,226 Line of credit and current
portion of long-term debt 3,390 2,691 1,029 Other current
liabilities 43,188 62,599 56,084 Total current liabilities 81,323
101,153 84,339 Long-term debt - 337 - Other long-term liabilities
12,144 8,775 9,940 Stockholders' equity 729,960 666,091 723,400
Total liabilities and stockholders' equity $823,427 $776,356
$817,679 Simpson Manufacturing Co., Inc., headquartered in
Pleasanton, California, through its subsidiary, Simpson Strong-Tie
Company Inc., designs, engineers and is a leading manufacturer of
wood-to-wood, wood-to-concrete and wood-to-masonry connectors and
fastening systems, stainless steel fasteners and pre-fabricated
shearwalls. Simpson Strong-Tie also offers a full line of
adhesives, mechanical anchors and powder actuated tools for
concrete, masonry and steel. The Company's other subsidiary,
Simpson Dura-Vent Company, Inc., designs, engineers and
manufactures venting systems for gas and wood burning appliances.
The Company's common stock trades on the New York Stock Exchange
under the symbol "SSD." For further information, contact Barclay
Simpson at (925) 560-9032. DATASOURCE: Simpson Manufacturing Co.,
Inc. CONTACT: Barclay Simpson of Simpson Manufacturing Co., Inc.,
+1-925-560-9032 Web site: http://www.simpsonmfg.com/
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