PLEASANTON, Calif., July 28 /PRNewswire-FirstCall/ -- Simpson
Manufacturing Co., Inc. (the "Company") announced today that its
second quarter 2009 net sales decreased 24.3% to $165.9 million
compared to net sales of $219.3 million for the second quarter of
2008. The Company had net income of $10.7 million for the second
quarter of 2009 compared to net income of $20.4 million for the
second quarter of 2008. Diluted net income per common share was
$0.22 for the second quarter of 2009 compared to diluted net income
per common share of $0.42 for the second quarter of 2008. In the
first half of 2009, net sales decreased 26.3% to $285.2 million as
compared to net sales of $386.9 million for the first half of 2008.
Net income was $2.3 million for the first half of 2009 as compared
to net income of $28.7 million for the first half of 2008. Diluted
net income per common share was $0.05 for the first half of 2009 as
compared to $0.59 for the first half of 2008. In the second quarter
of 2009, sales declined throughout the United States. California
and the western and southeastern regions had the largest decreases
in sales. Sales during the quarter also decreased throughout
Europe, with the exception of France, and decreased in the United
Kingdom and Canada. Sales in France were flat, primarily due to the
acquisition of Agence Internationale Commerciale et Industrielle,
S.A.S. ("Aginco") in April 2009. Sales in Asia, although relatively
small, have increased as Simpson Strong-Tie has recently expanded
its presence in the region. Simpson Strong-Tie's second quarter
sales decreased 26.0% from the same quarter last year, while
Simpson Dura-Vent's sales increased 1.3%. Simpson Strong-Tie's
sales to dealer distributors and contractor distributors decreased
significantly as homebuilding activity, and general economic
conditions, remain weak. Sales to home centers decreased slightly.
Sales decreased across all of Simpson Strong-Tie's major product
lines, particularly those used in new home construction. Sales of
Simpson Dura-Vent's Direct-Vent and gas vent product lines
decreased, but the decrease was offset by increases in sales of
chimney and pellet vent products, as well as an increase in sales
of special gas vent and relining products resulting from the
acquisition of ProTech Systems, Inc. ("ProTech") in June 2008.
Income from operations decreased 41.6% from $32.4 million in the
second quarter of 2008 to $18.9 million in the second quarter of
2009. Gross margins decreased from 38.2% in the second quarter of
2008 to 36.9% in the second 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 costs of material and labor.
The decline in steel prices slowed in the second quarter of 2009.
The Company expects steel prices to increase as demand returns to
the market. Through the first half of 2009, the Company had focused
on reducing inventories, which came down by 24.5%. Research and
development expense decreased 8.0% from $5.6 million in the second
quarter of 2008 to $5.2 million in the second quarter of 2009. This
decrease was primarily due to a $0.3 million decrease in personnel
related expenses. Selling expense decreased 23.9% from $22.1
million in the second quarter of 2008 to $16.9 million in the
second quarter of 2009. The decrease resulted primarily from a $3.1
million decrease in expenses associated with sales and marketing
personnel, most of which was related to cost cutting measures, and
a $1.8 million decrease in promotional expenditures. General and
administrative expense decreased 14.5% from $23.8 million in the
second quarter of 2008 to $20.3 million in the second quarter of
2009. The decrease was the result of several factors, including a
decrease in cash profit sharing of $3.0 million, lower
administrative personnel expenses of $0.8 million, related in part
to cost cutting measures, and decreased legal and professional
service expenses of $0.7 million. These decreases were partly
offset by higher amortization of intangible assets of $0.9 million,
primarily related to the businesses acquired since June 2008. The
Company had interest expense in excess of interest income,
primarily related to maintenance fees on its line of credit, in the
second quarter of 2009, as compared to interest income in the
second quarter of 2008. Interest income decreased primarily due to
lower interest rates. The effective tax rate was 43.3% in the
second quarter of 2009, up from 38.0% in the second quarter of
2008. The effective tax rate is higher 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. In
the first half of 2009, sales declined throughout the United
States. California and the western and southeastern regions had the
largest decreases in sales. Sales during the period also decreased
throughout Europe and the United Kingdom as well as in Canada.
Simpson Strong-Tie's first half sales decreased 27.4% from the same
period last year, while Simpson Dura-Vent's sales decreased 11.6%.
Simpson Strong-Tie's sales to dealer distributors and contractor
distributors decreased significantly as a result of the weakness in
the U.S. housing market. Sales to home centers decreased slightly.
Sales decreased across all of Simpson Strong-Tie's major product
lines, particularly those used in new home construction. Sales of
Simpson Dura-Vent's Direct-Vent and gas vent product lines
decreased, but the decrease was partly offset by an increase in
sales of pellet vent products, as well as an increase in sales of
special gas vent and relining products resulting from the
acquisition of ProTech in June 2008. Income from operations
decreased 81.3% from $45.8 million in the first half of 2008 to
$8.6 million in the first half of 2009. Gross margins decreased
from 36.2% in the first half of 2008 to 32.2% in the first half 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
costs of material and labor. Research and development expense
decreased 6.4% from $10.7 million in the first half of 2008 to
$10.0 million in the first half of 2009. This decrease was
primarily due to decrease in professional service fees of $0.4
million and a $0.1 million decrease in personnel related expenses.
Selling expense decreased 21.6% from $41.9 million in the first
half of 2008 to $32.9 million in the first half of 2009. The
decrease resulted primarily from a $5.1 million decrease in
expenses associated with sales and marketing personnel, most of
which was related to cost cutting measures, and a $2.8 million
decrease in promotional expenditures. General and administrative
expense decreased 2.8% from $41.6 million in the first half of 2008
to $40.5 million in the first half of 2009. The decrease resulted
from a decrease in cash profit sharing of $4.5 million partly
offset by increased bad debt charges, taken in the first quarter of
2009, of $2.2 million and higher amortization of intangible assets
of $1.0 million, primarily related to the businesses acquired since
June 2008. Interest income decreased 96.1% from $1.6 million in the
first half of 2008 to $0.1 million in the first half of 2009,
primarily due to lower interest rates. The effective tax rate was
73.0% in the first half of 2009, up from 39.5% in the first half of
2008. The effective tax rate is higher 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.
Investors, analysts and other interested parties are invited to
join the Company's conference call on Wednesday, July 29, 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 and six months ended
June 30, 2009 and 2008 (unaudited), are as follows: Three Months
Six Months Ended June 30, Ended June 30, --------------
-------------- (Amounts in thousands, except 2009 2008 2009 2008
per share data) ---- ---- ---- ---- Net sales $165,923 $219,263
$285,246 $386,919 Cost of sales 104,686 135,398 193,295 246,796
------- ------- ------- ------- Gross profit 61,237 83,865 91,951
140,123 ------ ------ ------ ------- Research and development and
engineering expenses 5,161 5,610 10,025 10,713 Selling expenses
16,852 22,134 32,877 41,942 General and administrative expenses
20,315 23,767 40,478 41,641 ------ ------ ------ ------ Income from
operations 18,909 32,354 8,571 45,827 Loss in equity method
investment, before tax (21) - (214) - Interest income (expense),
net (38) 505 64 1,634 ---- --- --- ----- Income before taxes 18,850
32,859 8,421 47,461 Provision for income taxes 8,167 12,478 6,147
18,728 ----- ------ ----- ------ Net income $10,683 $20,381 $2,274
$28,733 ====== ====== ===== ====== Net income per share: Basic
$0.22 $0.42 $0.05 $0.59 Diluted 0.22 0.42 0.05 0.59 Cash dividend
declared per common share $0.10 $0.10 $0.20 $0.20 Weighted average
shares outstanding: Basic 49,016 48,593 49,001 48,584 Diluted
49,114 48,936 49,099 48,933 Other data: Depreciation and
amortization $7,751 $7,587 $14,599 $15,007 Pre-tax stock
compensation expense 486 920 1,043 1,856 The Company's financial
position as of June 30, 2009 and 2008, and December 31, 2008
(unaudited), is as follows: June 30, December 31, --------
------------ (Amounts in thousands) 2009 2008 2008 ---- ---- ----
Cash and short-term investments $169,132 $162,098 $170,750 Trade
accounts receivable, net 118,646 139,162 76,005 Inventories 190,153
232,575 251,878 Assets held for sale 7,887 7,887 8,387 Other
current assets 22,839 17,597 20,577 ------ ------ ------ Total
current assets 508,657 559,319 527,597 Property, plant and
equipment, net 193,958 199,055 193,318 Goodwill 79,858 69,500
68,619 Other noncurrent assets 47,424 42,209 40,666 ------ ------
------ Total assets $829,897 $870,083 $830,200 ======= =======
======= Trade accounts payable $22,574 $46,362 $21,675 Line of
credit and current portion of long-term debt 27 3,177 26 Other
current liabilities 47,658 61,111 50,193 ------ ------ ------ Total
current liabilities 70,259 110,650 71,894 Other long-term
liabilities 9,659 12,076 9,280 Stockholders' equity 749,979 747,357
749,026 ------- ------- ------- Total liabilities and stockholders'
equity $829,897 $870,083 $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/
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