PLEASANTON, Calif.,
Oct. 27, 2011 /PRNewswire/ -- Simpson
Manufacturing Co., Inc. (NYSE: SSD) (the "Company") today announced
its third quarter 2011 results. The following discussion refers
only to continuing operations unless otherwise indicated.
For the third quarter of 2011, net sales increased 10.9% to
$162.4 million compared to net sales
of $146.4 million for the third
quarter of 2010. The Company had income, net of tax, of
$19.4 million for the third quarter
of 2011 compared to income, net of tax, of $18.4 million for the third quarter of 2010.
Diluted income, net of tax, per common share was $0.40 for the third quarter of 2011 compared to
diluted income, net of tax, of $0.37
per common share for the third quarter of 2010.
In the third quarter of 2011, sales increased throughout
North America and in Europe. Sales increased in the United States with above-average increases
in the western, excluding California, midwestern and southeastern
regions, as compared to the third quarter of 2010. Sales to
contractor distributors, dealer distributors and lumber dealers
increased, although economic conditions remain challenging, and
sales to home centers decreased. The sales increase was broad-based
across most of the Company's major product lines as compared to the
third quarter of 2010. Sales of anchor products and shearwalls also
increased over the same period in the prior year.
Gross margins increased from 44.9% in the third quarter of 2010
to 46.5% in the third quarter of 2011, primarily due to lower
manufacturing costs, including slightly 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 for the
remainder of 2011. The Company's inventories increased 13.0% from
$152.3 million at December 31, 2010, to $172.1 million at September 30, 2011.
Research and development and engineering expense increased 19.1%
from $5.7 million in the third
quarter of 2010 to $6.8 million in
the third quarter of 2011, including increases in professional fees
of $0.4 million, personnel costs of
$0.4 million and cash profit sharing
of $0.3 million. Selling expense
increased 16.8% from $15.9 million in
the third quarter of 2010 to $18.6
million in the third quarter of 2011, including increases in
personnel costs of $1.9 million and
cash profit sharing and commissions of $1.1
million, partly offset by a decrease in promotional costs of
$0.3 million. General and
administrative expense increased 25.9% from $20.0 million in the third quarter of 2010 to
$25.2 million in the third quarter of
2011, including increases in professional and legal fees of
$3.2 million, personnel costs of
$1.0 million and cash profit sharing
of $0.7 million. During the third
quarter of 2011, the Company purchased the software assets of
Keymark Enterprises, LLC ("Keymark"), valued at $11.5 million, for $6.2
million in net cash payments and its 46.05% equity interest
in Keymark. The transactions resulted in a gain of $4.3 million based on the difference between the
fair value of the Company's investment in Keymark less its carrying
value of $1.0 million. The acquired
software is used by customers of the Company in designing and
engineering residential structures. The effective tax rate was
34.2% in the third quarter of 2011, as compared to 37.0% in the
third quarter of 2010, primarily due to the release of valuation
allowances related to the disposal of the equity interest in
Keymark.
For the first nine months of 2011, net sales increased 8.5% to
$472.7 million compared to net sales
of $435.9 million for the first nine
months of 2010. The Company had income, net of tax, of $46.0 million for the first nine months of 2011
compared to income, net of tax, of $49.3
million for the first nine months of 2010. Diluted income,
net of tax, per common share was $0.93 for the first nine months of 2011 compared
to diluted income, net of tax, of $0.99 per common share for the first nine months
of 2010.
In the first nine months of 2011, sales increased throughout
most of North America and in
Europe. Sales increased in
the United States with
above-average increases in the midwestern and southeastern regions
as compared to the first nine months of 2010. Sales in Canada decreased compared to the first nine
months 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 nine months of 2010. Sales of anchor
products increased over the same period in the prior year while
sales of shearwalls decreased slightly.
Gross margins increased from 45.1% in the first nine months of
2010 to 45.7% in the first nine months 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 22.2%
from $16.2 million in the first nine
months of 2010 to $19.7 million in
the first nine months of 2011, including increases in personnel
costs of $1.6 million, cash profit
sharing of $1.1 million and
professional services of $0.9
million. Selling expense increased 17.1% from $47.4 million in the first nine months of 2010 to
$55.5 million in the first nine
months of 2011, including increases in personnel costs of
$4.4 million, cash profit sharing and
commissions of $2.6 million, and
promotional costs of $0.6 million.
General and administrative expense increased 25.7% from
$57.5 million in the first nine
months of 2010 to $72.3 million in
the first nine months of 2011, including increases in professional
and legal fees of $5.0 million,
personnel costs of $3.6 million, cash
profit sharing of $3.0 million,
impairment of available for sale assets of $1.1 million and various other items. 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 37.1% in the first nine months of 2011,
as compared to 38.4% in the first nine months of 2010.
In 2011, the Company repurchased 1.9 million shares of its
common stock, at a total cost of $53.2
million, including 120 thousand shares bought in the third
quarter, at a total cost of $3.1
million, as part of the Company's $100.0 million share repurchase authorization for
2011.
At its meeting on October 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 January
5, 2012, and it will be paid on January 26, 2012.
Investors, analysts and other interested parties are invited to
join the Company's conference call on Friday, October 28, 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 nine
months ended September 30, 2011 and
2010 (unaudited), are as follows:
|
Three
Months
|
Nine
Months
|
|
|
Ended
September 30,
|
Ended
September 30,
|
|
(Amounts in thousands, except
per share data)
|
2011
|
2010
|
2011
|
2010
|
|
|
Net sales
|
$ 162,366
|
$ 146,447
|
$ 472,713
|
$ 435,881
|
|
|
Cost of sales
|
86,919
|
80,750
|
256,819
|
239,370
|
|
|
|
Gross profit
|
75,447
|
65,697
|
215,894
|
196,511
|
|
|
|
|
Research and development and
engineering expenses
|
6,804
|
5,715
|
19,743
|
16,156
|
|
|
Selling expenses
|
18,633
|
15,946
|
55,527
|
47,429
|
|
|
General and administrative
expenses
|
25,174
|
20,001
|
72,250
|
57,457
|
|
|
Loss (gain) on sale of
assets
|
(46)
|
(5,217)
|
1
|
(4,813)
|
|
|
|
|
|
Income from
operations
|
24,882
|
29,252
|
68,373
|
80,282
|
|
|
|
|
Income (loss) in equity method
investment, before tax
|
4,471
|
(153)
|
4,389
|
(429)
|
|
|
Interest income, net
|
79
|
110
|
258
|
148
|
|
|
|
Income from continuing
operations before taxes
|
29,432
|
29,209
|
73,020
|
80,001
|
|
|
|
|
Provision for income taxes from
continuing operations
|
10,052
|
10,801
|
27,069
|
30,704
|
|
|
|
Income from continuing
operations, net of tax
|
19,380
|
18,408
|
45,951
|
49,297
|
|
|
|
Discontinued
operations:
|
|
|
|
|
|
|
Loss from discontinued
operations, net of tax
|
–
|
(1,226)
|
–
|
(16,212)
|
|
|
|
Net income
|
$
19,380
|
$
17,182
|
$
45,951
|
$
33,085
|
|
|
|
|
Earnings (loss) per common
share:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
|
|
|
|
|
Continuing operations
|
$
0.40
|
$
0.37
|
$
0.93
|
$
1.00
|
|
|
|
|
Discontinued
operations
|
–
|
(0.02)
|
–
|
(0.33)
|
|
|
|
|
Net income
|
0.40
|
0.35
|
0.93
|
0.67
|
|
|
|
|
|
Diluted
|
|
|
|
|
|
|
|
|
Continuing operations
|
$
0.40
|
$
0.37
|
$
0.93
|
$
0.99
|
|
|
|
|
Discontinued
operations
|
–
|
(0.02)
|
–
|
(0.33)
|
|
|
|
|
Net income
|
0.40
|
0.35
|
0.93
|
0.67
|
|
|
|
|
Weighted average shares
outstanding:
|
|
|
|
|
|
|
|
Basic
|
48,253
|
49,427
|
49,247
|
49,411
|
|
|
|
Diluted
|
48,288
|
49,527
|
49,296
|
49,548
|
|
|
|
|
Other data:
|
|
|
|
|
|
|
|
Continuing operations
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
$
4,933
|
$
5,246
|
$ 14,988
|
$ 16,036
|
|
|
|
|
Pre-tax impairment of
assets
|
–
|
–
|
1,094
|
–
|
|
|
|
|
Pre-tax stock compensation
expense
|
1,435
|
500
|
3,812
|
1,255
|
|
|
|
Discontinued
operations
|
|
|
|
|
|
|
|
|
Pre-tax impairment of
assets
|
–
|
–
|
–
|
21,350
|
|
|
|
|
Cash dividend declared per
common share
|
$
0.125
|
$
0.10
|
$
0.375
|
$
0.30
|
|
|
|
|
|
|
|
|
|
The Company's financial position (unaudited) as of September 30, 2011 and 2010, and December 31, 2010, is as follows:
|
|
|
September
30,
|
December
31,
|
|
(Amounts in
thousands)
|
2011
|
2010
|
2010
|
|
|
Cash and short-term
investments
|
$ 265,162
|
$ 291,846
|
$ 335,049
|
|
|
Trade accounts receivable,
net
|
98,032
|
93,635
|
68,256
|
|
|
Inventories
|
172,142
|
150,713
|
152,297
|
|
|
Assets held for sale
|
6,792
|
7,887
|
10,787
|
|
|
Other current assets
|
21,715
|
26,760
|
24,867
|
|
|
|
Total current assets
|
563,843
|
570,841
|
591,256
|
|
|
|
|
|
|
|
|
|
Property, plant and equipment,
net
|
191,016
|
176,464
|
177,072
|
|
|
Goodwill
|
69,688
|
75,585
|
70,069
|
|
|
Other noncurrent
assets
|
30,922
|
38,944
|
36,312
|
|
|
|
Total assets
|
$
855,469
|
$
861,834
|
$
874,709
|
|
|
|
|
|
|
|
|
|
Trade accounts
payable
|
$ 27,739
|
$ 23,663
|
$ 35,164
|
|
|
Other current
liabilities
|
58,447
|
50,339
|
44,452
|
|
|
|
Total current
liabilities
|
86,186
|
74,002
|
79,616
|
|
|
|
|
|
|
|
|
|
Other long-term
liabilities
|
7,001
|
8,705
|
7,300
|
|
|
Stockholders' equity
|
762,282
|
779,127
|
787,793
|
|
|
|
Total liabilities and
stockholders' equity
|
$
855,469
|
$
861,834
|
$
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.