PLEASANTON, Calif.,
July 26, 2012 /PRNewswire/
-- Simpson Manufacturing Co., Inc. (the "Company") (NYSE: SSD)
today announced its second quarter 2012 results.
For the second quarter of 2012, net sales increased 2.2% to
$181.7 million compared to net sales
of $177.8 million for the second
quarter of 2011. The Company had net income of $15.9 million for the second quarter of 2012
compared to net income of $19.5
million for the second quarter of 2011. Diluted net income
per common share was $0.33 for the
second quarter of 2012 compared to diluted net income of
$0.39 per common share for the second
quarter of 2011.
The increase in the Company's second quarter 2012 sales was due
to $9.7 million in sales from
acquisitions. Excluding sales from acquisitions, the
Company's second quarter 2012 sales decreased. In the second
quarter 2012, sales increased in North
America, with an above-average increase in the United States, due in part to recent
acquisitions. Sales in Europe
decreased, primarily due to the European financial crisis which
negatively affected sales volumes, partly offset by sales from the
recent European acquisition. Effects due to foreign currency
translation were not significant. Sales to contractor distributors
and lumber dealers increased in the second quarter of 2012,
compared to the second quarter of 2011, while sales to dealer
distributors were flat and sales to home centers decreased. Wood
construction product sales, including connectors, truss plates,
fastening systems, fasteners and shearwalls, represented 85% of
total Company sales in the second quarter of 2012, down from 90% in
the second quarter of 2011. Concrete construction product sales,
including adhesives, chemicals, mechanical anchors, powder actuated
tools and reinforcing fiber materials, as a percentage of total
sales increased to 15% in the second quarter of 2012, from 10% in
the second quarter of 2011. The majority of sales from recent
acquisitions were attributed to the European acquisition, and
mostly in concrete construction products.
Gross profit decreased slightly from $83.5 million in the second quarter of 2011 to
$83.1 million in the second quarter
of 2012. As a percentage of net sales, gross profit decreased from
47.0% in the second quarter of 2011 to 45.8% in the second quarter
of 2012. The North American gross profit margin decreased
from 51.6% in the second quarter of 2011 to 48.2% in the second
quarter of 2012, as a result of higher material and labor costs,
and increased concrete construction product sales, which have a
lower gross margin than wood construction product sales and
competitive price pressure. The European gross profit margin
increased to 37.3% in the second quarter of 2012 from 32.5% in the
second quarter of 2011, primarily due to lower material and labor
costs and the recent European acquisition. Steel prices increased
slightly in the second quarter. Due to a number of factors
that could affect supply, the Company is uncertain of steel pricing
through the second half of 2012.
Unless otherwise noted, changes in operating expenses were
mostly attributable to the North American segment. Research and
development and engineering expense increased 30.2% from
$6.9 million in the second quarter of
2011 to $9.0 million in the second
quarter of 2012. The increase in research and development
expense included an increase of $1.5
million for truss software development costs and personnel
costs of $0.6 million resulting from
additional employees, partly due to the recent North American
acquisitions, and a pay rate increase. Selling expense increased
0.3% from $19.8 million in the second
quarter of 2011 to $19.9 million in
the second quarter of 2012. The slight increase in selling costs
was primarily due to increases in personnel costs of $0.7 million, due mostly to the recent North
American acquisitions, additional employees and increased pay
rates, and to equity-based compensation charges of $0.4 million. The increases were offset by
a reduction in cash profit sharing of $0.5
million due to lower operating income and a reduction in
promotional costs of $0.5 million.
General and administrative expense increased 6.4% from $25.5 million in the second quarter of 2011 to
$27.1 million in the second quarter
of 2012. Personnel costs increased $1.1
million primarily due to the recent European acquisition,
additional employees and increased pay rates. Depreciation
and amortization expense increased $1.4
million primarily due to recent acquisitions in both
North America and Europe. The remaining increases in general and
administrative expenses included $0.5
million in equity-based compensation charges, $0.6 million reduction in foreign currency gains,
primarily in the European segment, and $0.3
million in bad debt expense. These increases were
partly offset by reductions in cash profit sharing of $1.5 million due to lower operating income and an
impairment charge of $1.1 million
taken in the prior year related to real estate in North America that was sold in the first
quarter of 2012.
The effective tax rate increased from 37.6% in the second
quarter of 2011 to 41.7% in the second quarter of 2012, primarily
due to valuation allowances taken on certain foreign losses.
In the first half of 2012, net sales increased 9.7% to
$340.4 million compared to net sales
of $310.3 million for the first half
of 2011 due in part to recent acquisitions. The Company had net
income of $23.1 million for the first
half of 2012 compared to net income of $26.6
million for the first half of 2011. Diluted net income per
common share was $0.48 for the first
half of 2012 compared to diluted net income of $0.53 per common share for the first half of
2011.
Sales in North America for the
first half of 2012 increased, with an above-average increase in
the United States, primarily due
to increases in volume and partly to recent acquisitions. Sales in
the first half of 2012 in Europe
increased slightly, due to the recent European acquisition. Foreign
currency translation effects were not significant. Sales to
contractor distributors, dealer distributers and lumber dealers
increased in the first half of 2012 as compared to the same period
in 2011, while sales to home centers decreased slightly. Wood
construction product sales represented 86% of total Company sales
in the first half of 2012, down from 89% in the first half of 2011.
Concrete product sales represented 14% of total sales in the first
half of 2012 up from 11% in the first half of 2011, with increases
in all geographic segments. Acquisitions made since December 2011 contributed $14.6 million to sales in the first half of 2012,
with the majority attributed to the European acquisition, and
mostly in concrete construction products.
Gross profit increased to $152.6
million in the first half of 2012 from $140.4 million in the first half of 2011. As a
percentage of net sales, gross profit decreased from 45.3% in the
first half of 2011 to 44.8% in the first half of 2012. The
North American segment gross profit margin decreased from 49.3% in
the first half of 2011 to 47.5% in the first half of 2012,
primarily due to higher material and labor costs, partly offset by
lower factory overhead and increased absorption of fixed overhead,
while the gross profit margin for the European segment increased to
35.3% in in the first half of 2012 from 32.0% in the first half of
2011, primarily due to lower material and labor costs, partly
offset by higher factory overhead costs.
Unless otherwise noted, changes in operating expenses were
mostly attributable to the North American segment. Research and
development and engineering expense increased 41.0% from
$12.9 million in the first half of
2011 to $18.2 million in the first
half of 2012. The increase in research and development
expense included increases in professional fees of $3.8 million, primarily due to truss software
development costs, and personnel costs of $1.2 million resulting from additional employees
and a pay rate increase. Selling expense increased 9.3% from
$36.9 million in the first half of
2011 to $40.3 million in the first
half of 2012. The increase in selling costs was primarily due to
increases in personnel costs of $2.2
million, resulting from the recent North American
acquisitions, additional employees and increased pay rates, and
increased equity-based compensation of $0.8
million. General and administrative expense increased 13.3%
from $47.1 million in the first half
of 2011 to $53.3 million in the first
half of 2012. Personnel costs increased $2.3
million primarily due to the recent European acquisition,
additional employees and an increase in pay rates.
Depreciation and amortization expense increased $3.0 million primarily due to recent acquisitions
in both North America and
Europe. The remaining increases in
general and administrative expenses included $1.0 million in equity-based compensation,
$0.6 million reduction in foreign
currency gains, $0.3 million in
computer hardware and license fees, $0.3
million in professional fees due to the recent European
acquisition and $0.2 million in
insurance premiums. These increases were partly offset by a
reduction in cash profit sharing of $1.0
million due to lower operating income and a decrease in
impairment charges of $0.6 million
related to real estate in North
America that was sold in the first quarter of 2012.
The effective tax rate increased from 39.0% in the first half of
2011 to 43.5% in the first half of 2012, primarily due to
$2.3 million in non-deductible
acquisition costs, as well as valuation allowances taken on certain
foreign losses.
At its meeting on July 18, 2012,
the Company's Board of Directors declared a cash dividend of
$0.125 per share. The record date for
the dividend will be October 4, 2012,
and it will be paid on October 25,
2012.
Investors, analysts and other interested parties are invited to
join the Company's conference call on Friday, July 27, 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 six months
ended June 30, 2012 and 2011
(unaudited), were as follows:
|
Three
Months
|
Six Months
|
|
Ended
June 30,
|
Ended
June 30,
|
(Amounts in thousands, except per share
data)
|
2012
|
2011
|
2012
|
2011
|
Net sales
|
$
|
181,703
|
$
|
177,812
|
$
|
340,437
|
$
|
310,348
|
Cost of sales
|
|
98,557
|
|
94,313
|
|
187,886
|
|
169,900
|
Gross
profit
|
|
83,146
|
|
83,499
|
|
152,551
|
|
140,448
|
|
|
|
|
|
|
|
|
|
Research and development and
engineering
expenses
|
|
9,043
|
|
6,945
|
|
18,240
|
|
12,939
|
Selling
expenses
|
|
19,881
|
|
19,819
|
|
40,314
|
|
36,895
|
General and administrative
expenses
|
|
27,087
|
|
25,454
|
|
53,331
|
|
47,076
|
Loss (gain) on sale of
assets
|
|
(13)
|
|
73
|
|
10
|
|
48
|
|
|
|
|
|
|
|
|
|
Income from operations
|
|
27,148
|
|
31,208
|
|
40,656
|
|
43,490
|
|
|
|
|
|
|
|
|
|
Loss on equity method
investment, before
tax
|
|
–
|
|
(69)
|
|
–
|
|
(82)
|
Interest income,
net
|
|
58
|
|
108
|
|
123
|
|
179
|
Income before taxes
|
|
27,206
|
|
31,247
|
|
40,779
|
|
43,587
|
Provision for income
taxes
|
|
11,347
|
|
11,754
|
|
17,719
|
|
17,016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income
|
$
|
15,859
|
$
|
19,493
|
$
|
23,060
|
$
|
26,571
|
|
|
|
|
|
|
|
|
|
Earnings per common
share:
|
|
|
|
|
|
|
|
|
Basic
|
$
|
0.33
|
$
|
0.39
|
$
|
0.48
|
$
|
0.53
|
Diluted
|
|
0.33
|
|
0.39
|
|
0.48
|
|
0.53
|
|
|
|
|
|
|
|
|
|
Weighted average shares
outstanding:
|
|
|
|
|
|
|
|
|
Basic
|
|
48,340
|
|
49,404
|
|
48,307
|
|
49,753
|
Diluted
|
|
48,419
|
|
49,456
|
|
48,378
|
|
49,809
|
|
|
|
|
|
|
|
|
|
Other data:
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
$
|
7,093
|
$
|
5,084
|
$
|
13,813
|
$
|
10,055
|
Pre-tax impairment of assets
|
|
–
|
|
1,094
|
|
461
|
|
1,094
|
Pre-tax stock compensation expense
|
|
2,116
|
|
855
|
|
5,300
|
|
2,377
|
|
|
|
|
|
|
|
|
|
Cash dividend declared per
common share
|
$
|
0.125
|
$
|
0.125
|
$
|
0.25
|
$
|
0.25
|
The Company's financial position (unaudited) as of June 30, 2012 and 2011 and December 31, 2011, was as follows:
|
June 30,
|
December 31,
|
(Amounts in thousands)
|
2012
|
2011
|
2011
|
Cash and short-term
investments
|
$
|
162,719
|
$
|
262,013
|
$
|
213,817
|
Trade accounts receivable,
net
|
|
120,119
|
|
117,975
|
|
76,420
|
Inventories
|
|
185,217
|
|
166,934
|
|
180,129
|
Assets held for
sale
|
|
–
|
|
6,792
|
|
6,793
|
Other current
assets
|
|
26,640
|
|
19,697
|
|
24,905
|
Total current assets
|
|
494,695
|
|
573,411
|
|
502,064
|
|
Property, plant and
equipment, net
|
|
208,685
|
|
183,698
|
|
195,716
|
Goodwill
|
|
127,983
|
|
72,111
|
|
99,849
|
Other noncurrent
assets
|
|
47,542
|
|
35,355
|
|
38,458
|
Total assets
|
$
|
878,905
|
$
|
864,575
|
$
|
836,087
|
|
Trade accounts
payable
|
$
|
34,740
|
$
|
32,060
|
$
|
22,033
|
Notes payable and lines of
credit
|
|
4,837
|
|
–
|
|
–
|
Other current
liabilities
|
|
60,448
|
|
60,817
|
|
49,554
|
Total current liabilities
|
|
100,025
|
|
92,877
|
|
71,587
|
|
Other long-term
liabilities
|
|
5,936
|
|
7,246
|
|
6,137
|
Stockholders'
equity
|
|
772,944
|
|
764,452
|
|
758,363
|
Total liabilities and stockholders' equity
|
$
|
878,905
|
$
|
864,575
|
$
|
836,087
|
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 construction products, including
connectors, truss plates, fastening systems, fasteners and
shearwalls, and concrete construction products, including
adhesives, specialty chemicals, mechanical anchors, powder actuated
tools and reinforcing fiber materials. 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.