PLEASANTON, Calif., Oct. 30 /PRNewswire-FirstCall/ -- Simpson
Manufacturing Co., Inc. (the "Company") announced today that its
third quarter 2008 net sales increased 1.2% to $219.8 million as
compared to net sales of $217.3 million for the third quarter of
2007. Net income increased 3.2% to $23.4 million for the third
quarter of 2008 as compared to net income of $22.6 million for the
third quarter of 2007. Diluted net income per common share was
$0.48 for the third quarter of 2008 as compared to $0.46 for the
third quarter of 2007. In the first nine months of 2008, net sales
decreased 5.4% to $606.7 million as compared to net sales of $641.7
million for the first nine months of 2007. Net income decreased
23.7% to $52.1 million for the first nine months of 2008 as
compared to net income of $68.3 million for the first nine months
of 2007. Diluted net income per common share was $1.06 for the
first nine months of 2008 as compared to $1.40 for the first nine
months of 2007. In the third quarter of 2008, sales declined
throughout the United States, with the exception of the
northeastern and midwestern regions of the country. California and
the western states had the largest decrease in sales. Sales during
the quarter in continental Europe increased significantly, partly
as a result of the two acquisitions there in 2008. Sales in Canada
also increased, while sales were down in the United Kingdom.
Simpson Strong-Tie's third quarter sales decreased 2.1% from the
same quarter last year, while Simpson Dura-Vent's sales increased
32.5%. Simpson Strong-Tie's sales to contractor distributors and
dealer distributors had the largest percentage rate decrease, and
sales to home centers increased slightly. Reflecting the
deterioration of construction markets and economic conditions
generally, sales decreased across most 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 2007, increased significantly and Anchor Systems sales
benefited from the acquisition of the Liebig companies in April
2008. Sales of Simpson Dura-Vent's pellet vent, chimney, special
gas vent and relining products increased. The increase in special
gas vent products and a significant component of the increase in
relining products resulted from the acquisition of Protech Systems,
Inc. in June 2008. Sales of its Direct-Vent and gas vent product
lines decreased as a result of several factors, including the
continuing weakness in new home construction. Income from
operations increased 4.7% from $35.5 million in the third quarter
of 2007 to $37.2 million in the third quarter of 2008. Gross
margins increased from 37.4% in the third quarter of 2007 to 40.8%
in the third quarter of 2008. The increase in gross margins was
primarily due to lower manufacturing and fixed overhead costs,
partly offset by higher distribution costs. Depending on future
economic conditions, the Company's margins could deteriorate as a
result of higher manufacturing and fixed overhead costs. The steel
market continues to be dynamic with a high degree of uncertainty.
Steel prices have declined somewhat since July 2008, but the
Company believes that they may increase again in the near future.
Since December 31, 2007, the Company's total inventories have
increased 15.3%, primarily as a result of higher cost of steel. If
steel prices increase above current levels and the Company is not
able to increase its prices sufficiently, the Company's margins
could again deteriorate. Research and development expenses
increased 13.5% from $5.0 million in the third quarter of 2007 to
$5.7 million in the third quarter of 2008. This increase was
primarily due to a $0.8 million increase in expenses related to
additional personnel in the acquisitions during 2008. Selling
expenses increased 16.7% from $18.3 million in the third quarter of
2007 to $21.3 million in the third quarter of 2008. The increase
resulted from a $3.0 million increase in expenses associated with
additional sales and marketing personnel, including those at
businesses acquired since July 2007 and those in Asia. General and
administrative expenses increased 11.2% from $23.0 million in the
third quarter of 2007 to $25.6 million in the third quarter of
2008. The increase was primarily the result of increased
professional service costs of $1.2 million, which included costs
associated with potential acquisitions that were not pursued, an
increase in the provision for bad debt of $0.8 million and higher
amortization expense of $0.2 million, primarily related to
intangible assets acquired since July 2007. The effective tax rate
was 38.1% in the third quarter of 2008, down from 38.5% in the
third quarter of 2007. In the first nine months 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 period
in continental Europe and in Canada increased significantly, while
sales were down in the United Kingdom. Simpson Strong-Tie's first
nine months sales decreased 6.7% from the first nine months of last
year, while Simpson Dura-Vent's sales increased 10.1%. Simpson
Strong-Tie's sales to contractor distributors had the largest
percentage rate decrease and sales to dealer distributors and home
centers also decreased. Reflecting the deterioration of
construction markets and economic conditions generally, 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 accounted for approximately 4.8% of Simpson
Strong-Tie's first nine months' sales in 2008 and Anchor Systems
sales benefited from the acquisition of the Liebig companies. Sales
of Simpson Dura-Vent's pellet vent, chimney, special gas vent and
relining products increased. Sales of its Direct-Vent and gas vent
product lines decreased as a result of several factors, including
the continuing weakness in new home construction. Income from
operations decreased 21.5% from $105.7 million for the first nine
months of 2007 to $83.0 million for the first nine months of 2008.
Gross margins decreased from 38.4% for the first nine months of
2007 to 37.9% for the first nine months of 2008. The decrease in
gross margins was due primarily to higher distribution costs,
partly offset by lower manufacturing costs. Selling expenses
increased 12.0% from $56.5 million in the first nine months of 2007
to $63.3 million in the first nine months of 2008. The increase was
driven primarily by an $8.1 million increase in expenses associated
with sales and marketing personnel, including those at businesses
acquired since July 2007. This increase was partly offset by
decreases in donations of $0.5 million, primarily related to the
gift made in the second quarter of 2007 to Habitat for Humanity
International, Inc., professional services expenses of $0.3 million
and promotional expenses of $0.3 million. General and
administrative expenses decreased 2.5% from $69.0 million in the
first nine months of 2007 to $67.2 million in the first nine months
of 2008. The major components of the decrease were decreases in
cash profit sharing of $11.3 million, resulting primarily from
decreased operating profit, partly offset by increases in
administrative personnel expenses of $6.5 million, including those
at businesses acquired since July 2007, higher amortization expense
of $1.3 million and increased legal and professional service
expenses of $1.8 million. The effective tax rate was 38.9% in the
first nine months of 2008, up from 37.9% in the first nine months
of 2007. The increase in the effective tax rate was caused by many
factors, including a decrease in tax-exempt interest income and the
expiration of the federal research and development tax credit in
2008 which was not renewed until the fourth quarter of 2008.
Investors, analysts and other interested parties are invited to
join the Company's conference call on Friday, October 31, 2008, at
6:00 am Pacific Time. To participate, callers may dial
800-862-9098. 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 and nine months ended
September 30, 2008 and 2007 (unaudited), are as follows: (Amounts
in thousands, Three Months Nine Months except per share Ended
September 30, Ended September 30, data) 2008 2007 2008 2007 Net
sales $219,823 $217,265 $606,742 $641,707 Cost of sales 130,143
136,055 376,939 395,512 Gross profit 89,680 81,210 229,803 246,195
Research and development and engineering expenses 5,662 4,987
16,375 15,710 Selling expenses 21,323 18,271 63,264 56,478 General
and administrative expenses 25,555 22,991 67,213 68,967 Loss (gain)
on sale of assets (41) (561) (58) (654) Income from operations
37,181 35,522 83,009 105,694 Income (loss) in equity method
investment, before tax - (59) - (33) Interest income, net 579 1,370
2,213 4,168 Income before taxes 37,760 36,833 85,222 109,829
Provision for income taxes 14,398 14,186 33,126 41,574 Net income
$23,362 $22,647 $52,096 $68,255 Net income per share: Basic $0.48
$0.47 $1.07 $1.41 Diluted 0.48 0.46 1.06 1.40 Cash dividend
declared per common share $0.10 $0.10 $0.30 $0.30 Weighted average
shares outstanding: Basic 48,612 48,500 48,593 48,449 Diluted
48,946 48,979 48,939 48,923 Other data: Depreciation and
amortization $7,627 $6,783 $22,634 $21,616 Pre-tax stock
compensation expense 859 1,450 2,715 4,614 The Company's financial
position as of September 30, 2008 and 2007, and December 31, 2007
(unaudited), is as follows: (Amounts in thousands) September 30,
December 31, Cash and short-term 2008 2007 2007 investments
$163,857 $156,928 $186,142 Trade accounts receivable, net 125,875
126,588 88,340 Inventories 251,647 221,318 218,342 Assets held for
sale 8,429 9,704 9,677 Other current assets 18,936 19,311 20,376
Total current assets 568,744 533,849 522,877 Property, plant and
equipment, net 195,062 197,096 198,117 Goodwill 75,799 67,576
57,418 Other noncurrent assets 39,096 38,347 39,267 Total assets
$878,701 $836,868 $817,679 Trade accounts payable $46,113 $38,054
$27,226 Line of credit and current portion of long-term debt 629
772 1,029 Other current liabilities 65,460 64,976 56,084 Total
current liabilities 112,202 103,802 84,339 Long-term debt - - -
Other long-term liabilities 10,607 9,552 9,940 Stockholders' equity
755,892 723,514 723,400 Total liabilities and stockholders' equity
$878,701 $836,868 $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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