PLEASANTON, Calif., Feb. 5 /PRNewswire-FirstCall/ -- Simpson
Manufacturing Co., Inc. (the "Company") announced today that its
fourth quarter 2008 net sales decreased 14.6% to $149.8 million
compared to net sales of $175.3 million for the fourth quarter of
2007. Net income was $1.8 million for the fourth quarter of 2008
compared to net income of $0.5 million for the fourth quarter of
2007. Diluted net income per common share was $0.04 for the fourth
quarter of 2008 compared to $0.01 for the fourth quarter of 2007.
In 2008, net sales decreased 7.4% to $756.5 million compared to net
sales of $817.0 million for 2007. Net income decreased 21.5% to
$53.9 million for 2008 compared to net income of $68.7 million for
2007. Diluted net income per common share was $1.10 for 2008
compared to $1.40 for 2007. In the fourth 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
decreased in the United Kingdom, most of continental Europe and
Canada. Sales in Asia, although relatively small, have increased as
Simpson Strong-Tie has opened sales offices in the region and
prepares to open its new manufacturing facility outside of
Shanghai, China. Simpson Strong- Tie's fourth quarter sales
decreased 18.9% from the same quarter last year, while Simpson
Dura-Vent's sales increased 16.0%. Simpson Strong-Tie's sales to
contractor distributors, dealer distributors and home centers
decreased significantly as homebuilding continued to decline and
general economic conditions continued to worsen. Sales decreased
across most of Simpson Strong- Tie's major product lines,
particularly those used in new home construction. Sales of Anchor
Systems products as a group were up slightly as a result of the
acquisition of the Liebig companies in April 2008 and increased
distribution in Asia. 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. ("ProTech") in June 2008. Sales of Simpson
Dura-Vent's 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 12.1% from $5.2
million in the fourth quarter of 2007 to $4.5 million in the fourth
quarter of 2008. Gross margins increased from 33.8% in the fourth
quarter of 2007 to 35.1% in the fourth quarter of 2008. The
increase in gross margins was primarily due to lower manufacturing
and labor costs, partly offset by higher fixed overhead costs, as a
result of lower production volumes, and higher distribution costs.
Steel prices have declined from their peak in July 2008, but
management believes that they may have reached bottom and does not
expect them to decrease further for the balance of the first
quarter of 2009. The steel market continues to be dynamic, however,
with a high degree of uncertainty about future pricing trends.
Research and development expenses increased 12.4% from $4.4 million
in the fourth quarter of 2007 to $5.0 million in the fourth 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, partly offset by an overall reduction in other
departmental overhead expenses. Selling expenses decreased 10.5%
from $19.5 million in the fourth quarter of 2007 to $17.4 million
in the fourth quarter of 2008. The decrease resulted from a $1.4
million decrease in promotional expenditures and a $0.7 million
decrease in expenses associated with sales and marketing personnel,
most of which related to cost cutting measures. General and
administrative expenses increased 15.4% from $19.7 million in the
fourth quarter of 2007 to $22.7 million in the fourth quarter of
2008. The increase was the result of several factors, including:
higher administrative personnel expenses of $2.0 million, including
those at businesses acquired in 2008; higher bad debt expense of
$1.9 million, primarily related to a single customer; increased
legal and professional service expenses of $1.0 million; increased
amortization of intangible assets of $0.6 million; and increases in
other departmental overhead expenses of $0.7 million. These
increases were partly offset by a decrease in cash profit sharing
of $2.9 million, resulting primarily from decreased operating
profit. Impairment of goodwill decreased 72.2% from $10.7 million
in the fourth quarter of 2007 to $3.0 million in the fourth quarter
of 2008. The impairment charge taken in the fourth quarter of 2008
was associated with assets that were acquired in England in 1999.
The effective tax rate was 58.5% in the fourth quarter of 2008,
down from 92.8% in the fourth quarter of 2007. The decrease in the
effective tax rate was caused primarily by the absence of the
impairment of goodwill charge taken in the fourth quarter of 2007,
the majority of which was not deductible for tax purposes. The
effective tax rate exceeded the U.S. statutory tax rate primarily
as a result of valuation allowances taken against tax benefits on
foreign losses. In 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 year in continental Europe, Canada and
Asia increased, while sales were down in the United Kingdom.
Simpson Strong-Tie's 2008 sales decreased 9.2% from 2007, while
Simpson Dura-Vent's sales increased 11.9%. 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,
acquired in July 2007, accounted for slightly more than 4.0% of
Simpson Strong-Tie's 2008 sales. Anchor Systems sales, while down
slightly, benefited from the acquisition of the Liebig companies as
well as Simpson Strong-Tie's increasing presence in Asia. Sales of
Simpson Dura-Vent's pellet vent, chimney, special gas vent and
relining products increased, a significant portion of the increase
having resulted from the ProTech acquisition. 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 21.0% from $110.8
million for 2007 to $87.5 million for 2008. Gross margins decreased
slightly from 37.4% for 2007 to 37.3% for 2008. The decrease in
gross margins was primarily due to higher distribution costs,
partly offset by lower manufacturing costs. Selling expenses
increased 6.3% from $76.0 million in 2007 to $80.7 million in 2008.
The increase was driven primarily by an increase in expenses
associated with sales and marketing personnel of $7.4 million,
including those at businesses acquired since July 2007. This
increase was partly offset by decreases in promotional expenses of
$1.6 million and donations of $0.5 million, primarily related to
the gift made to Habitat for Humanity International, Inc. in 2007.
General and administrative expenses increased 1.4% from $88.6
million in 2007 to $89.9 million in 2008. The major components of
the increase were increases in administrative personnel expenses of
$8.5 million, including those at businesses acquired since July
2007, increased legal and professional service expenses of $2.8
million, higher amortization expense of $1.9 million and higher bad
debt expense of $1.7 million. These increases were mostly offset by
a decrease in cash profit sharing of $14.2 million, resulting
primarily from decreased operating profit. The effective tax rate
was 39.8% in 2008, down from 41.0 % in 2007. The decrease in the
effective tax rate was caused primarily by the absence of the
impairment of goodwill charge taken in the fourth quarter of 2007,
the majority of which was not deductible for tax purposes. In
January 2009, the Company acquired the business of RO Design Corp,
a Florida corporation doing business as DeckTools, that licenses
deck design and estimation software. The software provides
professional deck builders, home centers and lumber yards a simple,
graphics driven, solution for designing decks and estimating
material and labor costs for the project. Investors, analysts and
other interested parties are invited to join the Company's
conference call on Friday, February 6, 2009, 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 twelve months
ended December 31, 2008 and 2007 (unaudited), are as follows: Three
Months Twelve Months (Amounts in thousands, Ended December 31,
Ended December 31, except per share data) 2008 2007 2008 2007 Net
sales $149,756 $175,280 $756,499 $816,988 Cost of sales 97,251
115,986 474,190 511,499 Gross profit 52,505 59,294 282,309 305,489
Research and development and engineering expenses 4,951 4,405
21,327 20,115 Selling expenses 17,439 19,477 80,703 75,954 General
and administrative expenses 22,684 19,651 89,897 88,618 Impairment
of goodwill 2,964 10,666 2,964 10,666 Loss (gain) on sale of assets
(66) (60) (124) (713) Income from operations 4,533 5,155 87,542
110,849 Income (loss) in equity method investment, before tax (486)
- (486) (33) Interest income, net 383 1,592 2,596 5,759 Income
before taxes 4,430 6,747 89,652 116,575 Provision for income taxes
2,591 6,260 35,718 47,833 Net income $1,839 $487 $53,934 $68,742
Net income per share: Basic $0.04 $0.01 $1.11 $1.42 Diluted 0.04
0.01 1.10 1.40 Cash dividend declared per common share $0.10 $0.10
$0.40 $0.40 Weighted average shares outstanding: Basic 48,763
48,539 48,636 48,472 Diluted 49,064 48,944 48,970 48,928 Other
data: Depreciation, amortization and Impairment of goodwill $10,539
$17,034 $33,173 $39,115 Pre-tax stock compensation expense 1,107
1,719 3,823 6,333 The Company's financial position as of December
31, 2008 and 2007 (unaudited), is as follows: December 31, (Amounts
in thousands) 2008 2007 Cash and short-term investments $170,750
$186,142 Trade accounts receivable, net 76,005 88,340 Inventories
251,878 218,342 Assets held for sale 8,387 9,677 Other current
assets 20,577 20,376 Total current assets 527,597 522,877 Property,
plant and equipment, net 193,318 198,117 Goodwill 68,619 57,418
Other noncurrent assets 40,666 39,267 Total assets $830,200
$817,679 Trade accounts payable $21,675 $27,226 Line of credit and
current portion of long-term debt 26 1,029 Other current
liabilities 50,193 56,084 Total current liabilities 71,894 84,339
Long-term debt - - Other long-term liabilities 9,280 9,940
Stockholders' equity 749,026 723,400 Total liabilities and
stockholders' equity $830,200 $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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