PLEASANTON, Calif., April 30 /PRNewswire-FirstCall/ -- Simpson
Manufacturing Co., Inc. (the "Company") announced today that its
first quarter 2009 net sales decreased 28.8% to $119.3 million
compared to net sales of $167.7 million for the first quarter of
2008. The Company had a net loss of $8.4 million for the first
quarter of 2009 compared to net income of $8.4 million for the
first quarter of 2008. Diluted net loss per common share was $0.17
for the first quarter of 2009 compared to diluted net income per
common share of $0.17 for the first quarter of 2008. In the first
quarter of 2009, sales declined throughout the United States.
California and the western states had the largest decrease in
sales. Sales during the quarter also decreased throughout Europe
and the United Kingdom and Canada. Sales in Asia, although
relatively small, have increased as Simpson Strong-Tie has recently
expanded its presence in the region. Simpson Strong-Tie's first
quarter sales decreased 29.2% from the same quarter last year,
while Simpson Dura-Vent's sales decreased 24.5%. Simpson
Strong-Tie's sales to dealer distributors and contractor
distributors decreased significantly as homebuilding continued to
decline and general economic conditions continued to worsen. In
response to changing conditions, the Company recomposed the group
of customers which it classifies as home centers by removing those
customers that serve professional users rather than retail
customers and classifying them as dealer distributors. Under the
new classification, sales to home centers decreased slightly
whereas under the old composition, the decrease would have been
larger. Sales decreased across all of Simpson Strong-Tie's major
product lines, particularly those used in new home construction.
Sales of most of Simpson Dura-Vent's product lines also decreased,
with the exception of special gas vent and relining products, which
increased as a result of the acquisition of ProTech Systems, Inc.
in June 2008. Income from operations decreased 176.7% from $13.5
million in income in the first quarter of 2008 to a loss of $10.3
million in the first quarter of 2009. Gross margins decreased from
33.6% in the first quarter of 2008 to 25.7% in the first quarter of
2009. The decrease in gross margins was primarily due to reduced
absorption of fixed overhead, as a result of lower production
volumes, as well as higher manufacturing costs, including higher
cost of material, labor and distribution. Steel prices continued to
decline from their peak in July 2008, as a result of weak demand.
The Company has focused on reducing its inventories, which have
come down by 10.4% since December 31, 2008, but, with lower sales
volumes, it may take several quarters to sell excess inventory.
Research and development expenses decreased 4.7% from $5.1 million
in the first quarter of 2008 to $4.9 million in the first quarter
of 2009. This decrease was primarily due to a $0.4 million decrease
in professional service fees, partly offset by $0.2 million
increase in expenses related to additional personnel, including
those at businesses acquired in 2008. Selling expenses decreased
19.1% from $19.8 million in the first quarter of 2008 to $16.0
million in the first quarter of 2009. The decrease resulted from a
$2.0 million decrease in expenses associated with sales and
marketing personnel, most of which was related to cost cutting
measures, and a $1.1 million decrease in promotional expenditures.
General and administrative expenses increased 12.8% from $17.9
million in the first quarter of 2008 to $20.2 million in the first
quarter of 2009. The increase was the result of several factors,
including higher bad debt expense of $2.5 million, increased legal
and professional service expenses of $0.8 million and higher
administrative personnel expenses of $0.7 million, including those
at businesses acquired in 2008. This increase was partly offset by
a decrease in cash profit sharing of $1.5 million, primarily due to
the operating loss. Interest income decreased 91.0% from $1.1
million in the first quarter of 2008 to $0.1 million in the first
quarter of 2009, primarily as a result of lower interest rates. The
effective tax rate was a benefit of 19.4% in the first quarter of
2009, down from 42.8% in the first quarter of 2008. The effective
tax rate of 19.4% is lower than the statutory rate primarily due to
the valuation allowances taken on foreign losses and a reduced
benefit from the reduction or loss of enterprise zone tax credits
at two of the Company's facilities in California. As a result of
the loss before taxes in the first quarter of 2009, the lower
effective tax rate resulted in a smaller benefit than if the
Company had a higher effective tax rate. In April 2009, the Company
held the grand opening of its 175,000 square foot facility in
Zhangjiagang, China, and commenced limited production of its Anchor
System products there. Also in April, the Company's French
subsidiary, Simpson Strong-Tie Europe EURL, purchased the equity of
Agence Internationale Commerciale et Industrielle, S.A.S.,
("Aginco"). Aginco manufactures a line of high quality builder
products and distributes them primarily throughout France. The
purchase price (subject to post-closing adjustment) was $21.9
million in cash. At its meeting on April 17, 2009, the Company's
Board of Directors declared a cash dividend of $0.10 per share. The
record date for the dividend will be July 2, 2009, and it will be
paid on July 23, 2009. Investors, analysts and other interested
parties are invited to join the Company's conference call on
Friday, May 1, 2009, at 6:00 am Pacific Time. To participate,
callers may dial 800-894-5910. 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 and credit 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, 2009 and 2008 (unaudited), are as follows: Three Months Ended
March 31, (Amounts in thousands, except per share data) 2009 2008
Net sales $119,323 $167,656 Cost of sales 88,610 111,398 Gross
profit 30,713 56,258 Research and development and engineering
expenses 4,864 5,103 Selling expenses 16,025 19,807 General and
administrative expenses 20,162 17,874 Income (loss) from operations
(10,338) 13,474 Income (loss) in equity method investment, before
tax (193) - Interest income, net 102 1,128 Income (loss) before
taxes (10,429) 14,602 Provision for (benefit from) income taxes
(2,020) 6,250 Net income (loss) $(8,409) $8,352 Net income (loss)
per share: Basic $(0.17) $0.17 Diluted (0.17) 0.17 Cash dividend
declared per common share $0.10 $0.10 Weighted average shares
outstanding: Basic 48,987 48,574 Diluted 48,987 48,931 Other data:
Depreciation and amortization $6,848 $7,420 Pre-tax stock
compensation expense 556 936 The Company's financial position as of
March 31, 2009 and 2008, and December 31, 2008 (unaudited), is as
follows: March 31, December 31, (Amounts in thousands) 2009 2008
2008 Cash and short-term investments $158,208 $164,381 $170,750
Trade accounts receivable, net 79,383 107,634 76,005 Inventories
225,568 227,855 251,878 Assets held for sale 8,387 9,677 8,387
Other current assets 26,908 20,061 20,577 Total current assets
498,454 529,608 527,597 Property, plant and equipment, net 191,412
195,319 193,318 Goodwill 69,160 57,845 68,619 Other noncurrent
assets 40,383 40,655 40,666 Total assets $799,409 $823,427 $830,200
Trade accounts payable $22,232 $34,745 $21,675 Line of credit and
current portion of long-term debt 821 3,390 26 Other current
liabilities 36,498 43,188 50,193 Total current liabilities 59,551
81,323 71,894 Other long-term liabilities 9,289 12,144 9,280
Stockholders' equity 730,569 729,960 749,026 Total liabilities and
stockholders' equity $799,409 $823,427 $830,200 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/
Copyright