PLEASANTON, Calif.,
Feb. 2, 2012 /PRNewswire/ -- Simpson
Manufacturing Co., Inc. (the "Company") (NYSE: SSD) today announced
its fourth quarter 2011 results. The following discussion refers
only to continuing operations unless otherwise indicated.
For the fourth quarter of 2011, net sales increased 9.3% to
$130.7 million compared to net sales
of $119.6 million for the fourth
quarter of 2010. The Company had income, net of tax, of
$4.9 million for the fourth quarter
of 2011 compared to a loss, net of tax, of $4.5 million for the fourth quarter of 2010.
Diluted income, net of tax, per common share was $0.10 for the fourth quarter of 2011 compared to
diluted loss, net of tax, of $0.09
per common share for the fourth quarter of 2010.
In the fourth quarter of 2011, sales increased throughout
North America and most of
Europe. Sales increased in all
regions of the United States, with
above-average increases in California and the western regions, as
compared to the fourth quarter of 2010. Sales in Asia and Australia, although relatively small,
increased as compared to the fourth quarter 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 fourth
quarter of 2010, although sales of shearwalls decreased.
Gross margins increased from 39.8% in the fourth quarter of 2010
to 42.0% in the fourth quarter of 2011, primarily due to lower
manufacturing costs, including lower factory overhead costs, partly
offset by increased costs of material and labor. Due to
better then expected demand for steel and domestic mill
utilization, producers are pushing through price increases for the
first quarter of 2012. The Company expects steel prices to
remain high at least through the first part of 2012. The Company's
inventories increased 18.3% from $152.3
million at December 31, 2010,
to $180.1 million at December 31, 2011, primarily due to raw material
purchases.
Research and development and engineering expense increased 24.0%
from $5.0 million in the fourth
quarter of 2010 to $6.1 million in
the fourth quarter of 2011, due primarily to an increase in
personnel costs of $0.7 million.
Selling expense increased 13.7% from $15.9
million in the fourth quarter of 2010 to $18.0 million in the fourth quarter of 2011,
including increases in personnel costs of $1.2 million and promotional costs of
$0.9 million, partly offset by a
decrease in professional and legal costs of $0.5 million. General and administrative expense
increased 5.5% from $22.3 million in
the fourth quarter of 2010 to $23.6
million in the fourth quarter of 2011, including increases
in professional and legal fees of $2.8
million and in depreciation of $0.9
million, partly offset by a decrease in phone and computer
costs of $0.9 million.
The effective tax rate was 14.2% in the fourth quarter of 2011.
The effective tax rate in 2010 is not comparable because,
even though the Company reported a loss in the fourth quarter of
2010, a provision for income taxes was charged due to valuation
allowances against foreign losses, including a goodwill impairment.
The low effective tax rate for 2011 was primarily due to the
release of valuation allowances related to tax losses in
China.
In December 2011, the Company
purchased certain assets and liabilities of Fox Industries, Inc.,
for $8.7 million. Fox
Industries is a manufacturer of construction products and systems
to repair, protect and strengthen concrete. The acquisition
will help the Company to expand its product offerings in the
commercial, industrial and infrastructure construction markets.
Also in December 2011, the
Company purchased the assets of Automatic Stamping, LLC for
$42.5 million. Automatic
Stamping is a manufacturer of a line of truss plates. In
January 2012, the Company purchased
100% of the equity of S&P Clever Reinforcement Company AG and
S&P Reinforcement International AG for $56.5 million. S&P Clever manufactures and
sells engineered materials for repair, strengthening and
restoration of concrete, asphalt and masonry construction and has
operations throughout Europe.
For 2011, net sales increased 8.6% to $603.4 million compared to net sales of
$555.5 million for 2010. The Company
had income, net of tax, of $50.9
million for 2011 compared to income, net of tax, of
$44.8 million for 2010. Diluted
income, net of tax, per common share was $1.04 for 2011 compared to $0.90 for 2010.
In 2011, sales increased throughout most of North America and most of Europe. Sales increased in the United States with above-average increases
in the southeastern region as compared to 2010. Sales in
Canada decreased slightly compared
to 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 2010, although sales of shearwalls decreased
slightly.
Gross margins slightly increased from 44.0% in 2010 to 44.9% in
2011, primarily due to slightly lower factory overhead costs.
Research and development and engineering expense increased 22.6%
from $21.1 million in 2010 to
$25.9 million in 2011, including
increases in personnel costs of $1.9
million, cash profit sharing of $0.9
million and professional services of $0.8 million. Selling expense increased 16.2%
from $63.3 million in 2010 to
$73.6 million in 2011, including
increases in personnel costs of $4.9
million, cash profit sharing and commissions of $2.7 million, promotional costs of $1.4 million and equity based compensation of
$1.0 million. General and
administrative expense increased 20.1% from $79.8 million in 2010 to $95.8 million in 2011, including increases in
professional and legal fees of $7.8
million primarily related to acquisitions, cash profit
sharing of $3.2 million, personnel
costs of $2.2 million, equity based
compensation of $1.3 million,
depreciation expense of $0.9 million
and impairment of available for sale assets of $0.7 million. The effective tax rate was 35.4% in
2011, as compared to 42.6% in 2010. The decrease in the effective
tax rate is primarily due to improved operations in 2011 in
countries where valuation allowances are recorded against tax
losses. In addition, the effective tax rate in 2010 was
higher because of a goodwill impairment for which a tax benefit was
not recognized.
At its meeting on January 30,
2012, the Company's Board of Directors declared a cash
dividend of $0.125 per share. The
record date for the dividend will be April
5, 2012, and it will be paid on April
26, 2012.
As part of the Company's $100.0
million share repurchase authorization for 2011, the Company
repurchased 1.9 million shares of its common stock, at a total cost
of $53.2 million. The Company's
Board of Directors authorized the Company to repurchase up to
$50.0 million of the Company's common
stock in 2012. This replaced the 2011 repurchase
authorization.
Investors, analysts and other interested parties are invited to
join the Company's conference call on Friday, February 3, 2012, 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 twelve months ended December 31, 2011
and 2010 (unaudited), are as follows:
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Three
Months
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Twelve
Months
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Ended
December 31,
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Ended
December 31,
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(Amounts in thousands, except
per share data)
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2011
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2010
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2011
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2010
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Net
sales
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$ 130,732
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$ 119,606
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$ 603,446
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$ 555,487
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Cost of
sales
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75,822
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71,979
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332,642
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311,349
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Gross
profit
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54,910
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47,627
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270,804
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244,138
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Research and
development and engineering expenses
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6,143
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4,954
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25,886
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21,110
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Selling
expenses
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18,041
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15,865
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73,568
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63,293
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General and
administrative expenses
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23,570
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22,331
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95,820
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79,788
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Impairment of
goodwill
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1,282
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6,292
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1,282
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6,292
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Loss (gain) on sale
of assets
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190
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43
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191
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(4,769)
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Income
(loss) from operations
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5,684
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(1,858)
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74,057
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78,424
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Income (loss) in
equity method investment, before tax
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–
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(106)
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4,389
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(535)
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Interest income,
net
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82
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–
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340
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148
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Income
(loss) from continuing operations before taxes
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5,766
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(1,964)
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78,786
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78,037
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Provision for
income taxes from continuing operations
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818
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2,535
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27,886
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33,239
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Income
(loss) from continuing operations, net of tax
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4,948
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(4,499)
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50,900
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44,798
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Discontinued
operations:
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Loss from
discontinued operations, net of tax
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–
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–
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–
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(16,212)
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Net income (loss)
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$
4,948
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$
(4,499)
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$
50,900
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$
28,586
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Earnings (loss) per
common share:
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Basic
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Continuing operations
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$ 0.10
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$ (0.09)
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$ 1.04
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$ 0.91
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Discontinued operations
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–
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–
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–
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(0.33)
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Net income (loss)
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0.10
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(0.09)
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1.04
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0.58
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Diluted
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Continuing operations
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$ 0.10
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$ (0.09)
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$ 1.04
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$ 0.90
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Discontinued operations
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–
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–
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–
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(0.33)
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Net income (loss)
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0.10
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(0.09)
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1.04
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0.58
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Weighted average
shares outstanding:
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Basic
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48,161
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49,756
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48,974
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49,498
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Diluted
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48,214
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49,756
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49,023
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49,612
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Other
data:
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Continuing
operations
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Depreciation and amortization
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$ 5,763
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$ 5,114
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$ 20,751
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$ 21,151
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Pre-tax impairment of assets
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1,282
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6,710
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2,376
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6,710
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Pre-tax stock compensation expense
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3,025
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2,434
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6,837
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3,689
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Discontinued
operations
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Pre-tax impairment of assets
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–
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–
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–
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21,350
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Cash dividend declared per
common share
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$ 0.125
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$ 0.10
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$ 0.50
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$ 0.40
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The Company's financial
position (unaudited) as of December 31, 2011 and 2010, is as
follows:
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December
31,
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(Amounts in
thousands)
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2011
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2010
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Cash and short-term
investments
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$ 213,817
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$ 335,049
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Trade accounts
receivable, net
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76,420
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68,256
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Inventories
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180,129
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152,297
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Assets held for
sale
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6,793
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10,787
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Other current
assets
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24,905
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24,867
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Total
current assets
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502,064
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591,256
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Property, plant and
equipment, net
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195,716
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177,072
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Goodwill
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99,849
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70,069
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Other noncurrent
assets
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38,458
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36,312
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Total
assets
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$
836,087
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$
874,709
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Trade accounts
payable
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$ 22,033
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$ 35,164
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Other current
liabilities
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49,554
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44,452
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Total
current liabilities
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71,587
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79,616
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Other long-term
liabilities
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6,137
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7,300
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Stockholders'
equity
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758,363
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787,793
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Total
liabilities and stockholders' equity
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$
836,087
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$
874,709
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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, chemicals, 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 Tom
Fitzmyers at (925) 560-9030.
SOURCE Simpson Manufacturing Co., Inc.