PLEASANTON, Calif.,
July 28, 2011 /PRNewswire/ -- Simpson
Manufacturing Co., Inc. (NYSE: SSD) (the "Company") today announced
its second quarter 2011 results. The following discussion refers
only to continuing operations unless otherwise indicated.
For the second quarter of 2011, net sales increased 7.4% to
$177.8 million compared to net sales
of $165.6 million for the second
quarter of 2010. The Company had income, net of tax, of
$19.5 million for the second quarter
of 2011 compared to income, net of tax, of $21.1 million for the second quarter of 2010.
Diluted income, net of tax, per common share was $0.39 for the second quarter of 2011 compared to
diluted income, net of tax, of $0.42
per common share for the second quarter of 2010.
In the second quarter of 2011, sales increased throughout most
of North America and increased
significantly in Europe. Sales
increased in the United States
with increases in California and
the western, midwestern and southeastern regions, as compared to
the second quarter of 2010. Sales in the northeastern region
decreased slightly. Sales in Canada decreased compared to the second
quarter of 2010. Sales in Asia and
Australia, although relatively
small, increased as compared to the second quarter of 2010. Sales
to contractor distributors, lumber dealers and home centers
increased, although economic conditions remain challenging, and
sales to dealer distributors were flat. The sales increase was
broad-based across most of the Company's major product lines as
compared to the second quarter of 2010. Sales of anchor products
increased over the same period in the prior year while sales of
shearwalls decreased.
Gross margins increased slightly from 46.4% in the second
quarter of 2010 to 47.0% in the second quarter of 2011, primarily
due to slightly lower manufacturing costs, including lower costs of
material and labor, partly offset by increased factory overhead
costs. Steel prices increased from their levels in mid-2010, as
steel mills have been raising prices as demand returns to global
steel markets. The Company expects steel prices to remain at
current levels or to increase for the remainder of 2011. The
Company's inventories increased 9.6% from $152.3 million at December
31, 2010, to $166.9 million at
June 30, 2011.
Research and development and engineering expense increased 21.8%
from $5.7 million in the second
quarter of 2010 to $6.9 million in
the second quarter of 2011, including increases in cash profit
sharing of $0.6 million and personnel
costs of $0.4 million. Selling
expense increased 19.3% from $16.6
million in the second quarter of 2010 to $19.8 million in the second quarter of 2011,
including increases in personnel costs of $1.2 million, cash profit sharing and commissions
of $1.1 million, and promotional
costs of $0.6 million. General and
administrative expense increased 24.0% from $20.5 million in the second quarter of 2010 to
$25.5 million in the second quarter
of 2011, including increases in cash profit sharing of $1.2 million, professional fees of $1.1 million, impairment of available for sale
assets of $1.1 million, personnel
costs of $0.8 million and stock
option expense of $0.3 million. The
Company concluded, in the second quarter of 2011, that its
San Leandro facility is expected
to be sold below carrying value, and therefore recorded an
impairment charge of $1.1 million,
equal to the amount by which carrying value exceeds the estimated
net realizable value. The effective tax rate was 37.6% in the
second quarter of 2011, as compared to 37.8% in the second quarter
of 2010.
For the first half of 2011, net sales increased 7.2% to
$310.3 million compared to net sales
of $289.4 million for the first half
of 2010. The Company had income, net of tax, of $26.6 million for the first half of 2011 compared
to income, net of tax, of $30.9
million for the first half of 2010. Diluted income, net of
tax, per common share was $0.53 for
the first half of 2011 compared to diluted income, net of tax, of
$0.62 per common share for the first
half of 2010.
In the first half of 2011, sales increased throughout most of
North America and increased
significantly in Europe. Sales
increased in California and the
midwestern, southeastern and northeastern regions as compared to
the first half of 2010. Sales in Canada decreased compared to the first half of
2010. Sales in Asia and
Australia, although relatively
small, increased as compared to the first half of 2010. Sales to
contractor distributors, dealer distributors, lumber dealers and
home centers increased. The sales increase was broad-based across
most of the Company's major product lines as compared to the first
half of 2010. Sales of anchor products increased over the same
period in the prior year while sales of shearwalls decreased.
Gross margins increased slightly from 45.2% in the first half of
2010 to 45.3% in the first half of 2011, primarily due to slightly
lower manufacturing costs, including lower costs of material and
labor, partly offset by increased factory overhead costs.
Research and development and engineering expense increased 23.9%
from $10.4 million in the first half
of 2010 to $12.9 million in the first
half of 2011, including increases in personnel costs of
$1.1 million, cash profit sharing of
$0.8 million and professional
services of $0.6 million.
Selling expense increased 17.2% from $31.5 million in the first half of 2010 to
$36.9 million in the first half of
2011, including increases in personnel costs of $2.5 million, cash profit sharing and commissions
of $1.6 million, and promotional
costs of $0.8 million. General and
administrative expense increased 25.7% from $37.5 million in the first half of 2010 to
$47.1 million in the first half of
2011, including increases in cash profit sharing of $2.3 million, professional fees of $1.8 million, personnel costs of $1.6 million, stock option expense of
$1.1 million, impairment of available
for sale assets of $1.1 million and
provision for bad debt of $0.5
million. The effective tax rate was 39.0% in the first half
of 2011, as compared to 39.2% in the first half of 2010.
In the second quarter of 2011, the Company repurchased 1.8
million shares of its common stock, at a total cost of $50.1 million, as part of the Company's
$100.0 million share repurchase
authorization for 2011.
At its meeting on July 19, 2011,
the Company's Board of Directors declared a cash dividend of
$0.125 per share. The record date for
the dividend will be October 6, 2011,
and it will be paid on October 27,
2011.
Investors, analysts and other interested parties are invited to
join the Company's conference call on Friday, July 29, 2011, at 6:00 am Pacific Time. To participate, callers may
dial 800-895-0198. The call will be webcast simultaneously as well
as being available for one month through a link on the Company's
website at 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, 2011 and 2010
(unaudited), are as follows:
|
Three
Months
|
Six
Months
|
|
|
Ended June
30,
|
Ended June
30,
|
|
(Amounts in thousands, except
per share data)
|
|
2011
|
|
2010
|
|
2011
|
|
2010
|
|
Net sales
|
$
|
177,812
|
$
|
165,614
|
$
|
310,348
|
$
|
289,434
|
|
Cost of sales
|
|
94,313
|
|
88,828
|
|
169,900
|
|
158,620
|
|
Gross
profit
|
|
83,499
|
|
76,786
|
|
140,448
|
|
130,814
|
|
|
|
|
|
|
|
|
|
|
|
Research and development
and engineering expenses
|
|
6,945
|
|
5,700
|
|
12,939
|
|
10,441
|
|
Selling
expenses
|
|
19,819
|
|
16,610
|
|
36,895
|
|
31,483
|
|
General and
administrative expenses
|
|
25,454
|
|
20,524
|
|
47,076
|
|
37,456
|
|
Loss on sale of
assets
|
|
73
|
|
15
|
|
48
|
|
404
|
|
|
|
|
|
|
|
|
|
|
|
Income from
operations
|
|
31,208
|
|
33,937
|
|
43,490
|
|
51,030
|
|
|
|
|
|
|
|
|
|
|
|
Loss in equity method
investment, before tax
|
|
(69)
|
|
(131)
|
|
(82)
|
|
(275)
|
|
Interest income,
net
|
|
108
|
|
26
|
|
179
|
|
37
|
|
Income from
continuing operations before taxes
|
|
31,247
|
|
33,832
|
|
43,587
|
|
50,792
|
|
|
|
|
|
|
|
|
|
|
|
Provision for income
taxes from continuing operations
|
|
11,754
|
|
12,773
|
|
17,016
|
|
19,903
|
|
Income from
continuing operations, net of tax
|
|
19,493
|
|
21,059
|
|
26,571
|
|
30,889
|
|
|
|
|
|
|
|
|
|
|
|
Discontinued
operations:
|
|
|
|
|
|
|
|
|
|
Loss from discontinued
operations, net of tax
|
|
–
|
|
(14,356)
|
|
–
|
|
(14,986)
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
$
|
19,493
|
$
|
6,703
|
$
|
26,571
|
$
|
15,903
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per
common share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
|
|
|
|
|
|
Continuing operations
|
$
|
0.39
|
$
|
0.43
|
$
|
0.53
|
$
|
0.63
|
|
Discontinued operations
|
|
–
|
|
(0.29)
|
|
–
|
|
(0.30)
|
|
Net
income
|
|
0.39
|
|
0.14
|
|
0.53
|
|
0.32
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
|
|
|
|
|
|
|
|
|
|
Continuing
operations
|
$
|
0.39
|
$
|
0.42
|
$
|
0.53
|
$
|
0.62
|
|
Discontinued
operations
|
|
–
|
|
(0.29)
|
|
–
|
|
(0.30)
|
|
Net
income
|
|
0.39
|
|
0.14
|
|
0.53
|
|
0.32
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares
outstanding:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
49,404
|
|
49,417
|
|
49,753
|
|
49,403
|
|
Diluted
|
|
49,456
|
|
49,598
|
|
49,809
|
|
49,559
|
|
|
|
|
|
|
|
|
|
|
|
Other data:
|
|
|
|
|
|
|
|
|
|
Continuing
operations
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
$
|
5,084
|
$
|
5,370
|
$
|
10,055
|
$
|
10,791
|
|
Pre-tax impairment of assets
|
|
1,094
|
|
–
|
|
1,094
|
|
–
|
|
Pre-tax stock compensation expense
|
|
855
|
|
286
|
|
2,377
|
|
755
|
|
Discontinued
operations
|
|
|
|
|
|
|
|
|
|
Pre-tax impairment of assets
|
|
–
|
|
21,350
|
|
–
|
|
21,350
|
|
|
|
|
|
|
|
|
|
|
|
Cash dividend declared
per common share
|
$
|
0.125
|
$
|
0.10
|
$
|
0.25
|
$
|
0.20
|
|
|
|
|
|
|
|
|
|
|
The Company's financial position (unaudited) as of June 30, 2011 and 2010, and December 31, 2010, is as follows:
|
|
June
30,
|
|
December
31,
|
|
(Amounts in
thousands)
|
|
2011
|
|
2010
|
|
2010
|
|
Cash and short-term
investments
|
$
|
262,013
|
$
|
219,763
|
$
|
335,049
|
|
Trade accounts
receivable, net
|
|
117,975
|
|
104,284
|
|
68,256
|
|
Inventories
|
|
166,934
|
|
150,786
|
|
152,297
|
|
Assets held for
sale
|
|
6,792
|
|
40,457
|
|
10,787
|
|
Other current
assets
|
|
19,697
|
|
29,481
|
|
24,867
|
|
Total
current assets
|
|
573,411
|
|
544,771
|
|
591,256
|
|
|
|
|
|
|
|
|
|
Property, plant and
equipment, net
|
|
183,698
|
|
184,949
|
|
177,072
|
|
Goodwill
|
|
72,111
|
|
72,163
|
|
70,069
|
|
Other noncurrent
assets
|
|
35,355
|
|
40,634
|
|
36,312
|
|
Total
assets
|
$
|
864,575
|
$
|
842,517
|
$
|
874,709
|
|
|
|
|
|
|
|
|
|
Trade accounts
payable
|
$
|
32,060
|
$
|
27,906
|
$
|
35,164
|
|
Liabilities held for
sale
|
|
–
|
|
2,739
|
|
–
|
|
Other current
liabilities
|
|
60,817
|
|
49,142
|
|
44,452
|
|
Total
current liabilities
|
|
92,877
|
|
79,787
|
|
79,616
|
|
|
|
|
|
|
|
|
|
Other long-term
liabilities
|
|
7,246
|
|
9,263
|
|
7,300
|
|
Stockholders'
equity
|
|
764,452
|
|
753,467
|
|
787,793
|
|
Total
liabilities and stockholders' equity
|
$
|
864,575
|
$
|
842,517
|
$
|
874,709
|
|
|
|
|
|
|
|
|
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
common stock trades on the New York Stock Exchange under the symbol
"SSD."
For further information, contact Barclay
Simpson at (925) 560-9032.
SOURCE Simpson Manufacturing Co., Inc.