PLEASANTON, Calif.,
April 25, 2013 /PRNewswire/ --
Simpson Manufacturing Co., Inc. (the "Company") (NYSE: SSD) today
announced its first quarter 2013 results.
Results for the Three Months Ended March 31, 2013, Compared with the Three Months
Ended March 31, 2012
Overview
For the first quarter of 2013, net sales decreased 2.6% from
$158.7 million for the first quarter
of 2012 to $154.5 million for the
first quarter of 2013. The Company had net income of $4.8 million for the first quarter of 2013
compared to net income of $7.2
million for the first quarter of 2012. Diluted net income
per common share was $0.10 for the
first quarter of 2013 compared to diluted net income of
$0.15 per common share for the first
quarter of 2012. The Company continues to invest in its strategic
initiatives, such as an expanded offering of concrete and
reinforcing products and systems, particularly specialty chemicals,
and in its truss plate and software offerings.
Net sales
The decrease in the Company's first quarter 2013 net sales was
primarily due to lower sales in Europe, which were affected by difficult
economic conditions in Europe. In
addition, net sales were also affected negatively by reduced home
center sales, lower selling prices and inclement weather in some
regions of the United States,
Canada and Europe, which possibly delayed construction
projects during the quarter.
- Regional net sales:
- North America net sales were
flat in the first quarter of 2013, compared to the first quarter of
2012, with inclement weather delaying construction projects in
regions of the United States and
Canada. The United States had a slight increase in
sales over the same period in 2012, despite the loss of some home
center business and price reductions. Canadian net sales decreased
slightly over the same period in 2012 due to lower sales volumes
and selling prices.
- Europe net sales decreased in
the first quarter of 2013, compared to the first quarter of 2012,
primarily due to the region's economic conditions, inclement
weather delaying construction projects and price decreases. Effects
due to foreign currency translation were not significant.
- Consolidated net sales channels and product groups:
- Sales to contractor distributors increased in the first quarter
of 2013, compared to the first quarter of 2012, while sales to
lumber dealers were flat and sales to home centers decreased partly
as a result of the loss of a significant customer in the second
quarter of 2012.
- Wood construction product sales, including connectors, truss
plates, fastening systems, fasteners and shearwalls, represented
86% of total Company sales in the first quarter of 2013, down from
87% in the first quarter of 2012.
- Concrete construction product sales, including adhesives,
chemicals, mechanical anchors, powder actuated tools and
reinforcing fiber materials, increased as a percentage of total
sales to 14% in the first quarter of 2013, from 13% in the first
quarter of 2012.
Gross profit
Gross profit decreased from $69.4
million in the first quarter of 2012 to $65.0 million in the first quarter of 2013. Gross
profit as a percentage of net sales decreased from 43.7% in the
first quarter of 2012 to 42.0% in the first quarter of 2013.
- North America – Gross profit
margin decreased from 46.8% in the first quarter of 2012 to 44.7%
in the first quarter of 2013, as a result of competitive price
pressure, higher material costs, higher factory overhead due to
lower sales volumes, and higher distribution costs as a percentage
of sales. Concrete construction product sales, which have a lower
gross margin than wood construction product sales, increased to 13%
of North America sales in the
first quarter of 2013 from 12% over the same period in 2012, also
negatively affected the gross profit margin.
- Europe – Gross profit margin
decreased from 32.3% in the first quarter of 2012 to 30.5% in the
first quarter of 2013, as a result of competitive price pressure
and higher material, distribution and factory overhead costs, due
to lower sales volumes, as a percentage of sales, partly offset by
decreased labor costs.
- Product mix - The gross profit margin differential between wood
construction products and concrete construction products decreased
from 18% in the first quarter of 2012 to 15% in the first quarter
of 2013.
- Steel prices - While steel prices decreased slightly in
the United States market in the
first quarter, the Company expects an increase in steel prices
during the second and third quarters of 2013 due to an expected
increase in demand.
Research and development and engineering expenses
Research and development and engineering expenses decreased 9.7%
from $9.2 million in the first
quarter of 2012 to $8.3 million in
the first quarter of 2013, primarily due to a $2.8 million decrease in professional fees,
partly offset by increased personnel costs of $1.9 million.
- North America – Research and
development and engineering expenses decreased $0.5 million, primarily due to decreased
professional fees of $2.4 million,
including $1.5 million in direct
truss software development costs charged in 2012 by Keymark, partly
offset by $1.7 million in 2013 truss
software development costs comprising mostly personnel costs from
the acquisition of Keymark's truss software development team.
- Europe – Research and
development and engineering expenses decreased $0.4 million due to decreased professional
fees.
Selling expenses
Selling expenses increased 4.6% to $21.4
million in the first quarter of 2013 from $20.4 million in the first quarter of 2012,
primarily due to a $0.5 million
increase in personnel costs and a $0.4
million increase in professional and promotional costs,
partly offset by a $0.2 million
decrease in cash profit sharing.
- North America – Selling
expenses increased $1.2 million
primarily due to increased personnel costs of $0.7 million, mostly from additional sales
representatives in support of new business acquired in 2011 and
2012, and increased pay rates, and promotional costs of
$0.5 million, partly offset by
decreased cash profit sharing of $0.2
million.
- Europe – Selling expenses
decreased $0.4 million primarily due
to decreases in personnel costs of $0.3
million and cash profit sharing of $0.1 million.
General and administrative expenses
General and administrative expenses increased slightly to
$26.3 million in the first quarter of
2013 from $26.2 million in the first
quarter of 2012, reflecting reduced gains from foreign currency
transactions of $0.8 million and
increased impairment expenses of $0.6
million, maintenance expense of $0.4
million and intangible amortization expense of $0.2 million. These increases were mostly offset
by decreases in cash profit sharing of $1.1
million and legal and professional fees of $0.7 million.
- North America – General and
administrative expenses decreased $0.8
million primarily due to reductions in cash profit sharing
of $0.5 million, impairment of
$0.5 million and legal and
professional fees of $0.5 million,
partly offset by increased personnel costs of $0.3 million due to pay rate increases instituted
in January 2013, intangible
amortization expense of $0.3 million
due to recent acquisitions, facility maintenance expense of
$0.2 million and communication and
computer expense of $0.2
million.
- Europe – General and
administrative expenses increased $0.8
million primarily due to an impairment of $1.0 million associated with the Company's real
estate in Ireland and reduced
gains from foreign currency translations of $0.7 million, partly offset by decreases in
personnel costs of $0.4 million,
intangible amortization expense of $0.1
million and cash profit sharing of $0.1 million.
- Admin & All Other – General and administrative expenses
decreased $0.3 million primarily due
to a reduction in cash profit sharing of $0.5 million, partly offset by various other
increases.
Income taxes
The effective income tax rate increased slightly to 47.0% in the
first quarter of 2013 from 46.9% in the first quarter of 2012
primarily due to 2013 valuation allowances taken on foreign losses,
primarily in the Europe
segment.
Additional information
In February 2013, the Company
acquired certain assets relating to the TJ® ShearBrace
("ShearBrace") product line of Weyerhaeuser NR Company for
$5.3 million. The ShearBrace is a
line of pre-fabricated shearwalls that will complement the
Company's Strong-Wall shearwall product line, and is sold
throughout North America.
At its meeting on April 23, 2013,
the Company's Board of Directors declared a cash dividend of
$0.125 per share. The record date for
the dividend will be July 3, 2013,
and it will be paid on July 25,
2013.
Investors, analysts and other interested parties are invited to
join the Company's conference call on Friday, April 26, 2013, at 6:00 am Pacific Time. To participate, callers may
dial 866-952-1906. 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
document. 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 (unaudited) for the three
ended March 31, 2013 and 2012, were
as follows:
|
Three
Months
|
|
|
Ended March 31,
|
|
(Amounts in thousands, except per share
data)
|
2013
|
2012
|
Net sales
|
$
154,535
|
$
158,734
|
Cost of
sales
|
89,561
|
89,329
|
Gross
profit
|
64,974
|
69,405
|
|
|
|
Research and
development and engineering expenses
|
8,308
|
9,198
|
Selling
expenses
|
21,371
|
20,432
|
General and
administrative expenses
|
26,290
|
26,244
|
Loss (gain) on sale of
assets
|
(8)
|
23
|
|
|
|
Income
from operations
|
9,013
|
13,508
|
|
|
|
Interest income,
net
|
38
|
65
|
Income
before taxes
|
9,051
|
13,573
|
|
|
|
Provision for income
taxes
|
4,256
|
6,372
|
|
|
|
Net
income
|
$ 4,795
|
$ 7,201
|
|
|
|
Earnings per common
share:
|
|
|
Basic
|
$0.10
|
$0.15
|
Diluted
|
0.10
|
0.15
|
|
|
|
Weighted average shares
outstanding:
|
|
|
Basic
|
48,536
|
48,273
|
Diluted
|
48,626
|
48,337
|
|
|
|
Other data:
|
|
|
Depreciation
and amortization
|
$
7,487
|
$
6,721
|
Pre-tax
impairment of assets
|
1,025
|
461
|
Pre-tax
equity-based compensation expense
|
2,977
|
3,184
|
|
|
|
Cash
dividend declared per common share
|
$
–
|
$
0.125
|
The Company's financial position (unaudited) as of March 31, 2013 and 2012 and December 31, 2012, was as follows:
|
March
31,
|
December 31,
|
(Amounts in thousands)
|
2013
|
2012
|
2012
|
Cash and short-term
investments
|
$
141,965
|
$
160,092
|
$
175,553
|
Trade accounts
receivable, net
|
102,813
|
107,257
|
82,812
|
Inventories
|
202,341
|
184,068
|
204,124
|
Assets held for
sale
|
577
|
–
|
593
|
Other current
assets
|
32,796
|
26,234
|
34,972
|
Total
current assets
|
480,492
|
477,651
|
498,054
|
|
|
|
|
Property, plant and
equipment, net
|
211,010
|
209,460
|
213,452
|
Goodwill
|
122,582
|
130,556
|
121,981
|
Other noncurrent
assets
|
57,463
|
49,344
|
56,835
|
Total
assets
|
$
871,547
|
$
867,011
|
$
890,322
|
|
|
|
|
Trade accounts
payable
|
$
30,958
|
$
35,109
|
$
37,117
|
Notes payable and lines
of credit
|
1,214
|
3,556
|
178
|
Other current
liabilities
|
42,519
|
50,705
|
58,220
|
Total
current liabilities
|
74,691
|
89,370
|
95,515
|
|
|
|
|
Long-term
debt
|
–
|
240
|
–
|
Other long-term
liabilities
|
8,435
|
6,300
|
5,239
|
Stockholders'
equity
|
788,421
|
771,101
|
789,568
|
Total
liabilities and stockholders' equity
|
$
871,547
|
$
867,011
|
$
890,322
|
Additional financial data of the Company (unaudited) for the
three months ended March 31, 2013 and
2012, were as follows:
|
Three
Months Ended
|
|
|
March
31,
|
%
|
(Amounts in thousands)
|
2013
|
2012
|
change
|
Net
Sales by Reporting Segment
|
|
|
|
North
America
|
$
127,737
|
$
127,967
|
0%
|
Europe
|
23,917
|
28,237
|
(15%)
|
Asia/Pacific
|
2,644
|
2,372
|
11%
|
Administrative and all
other
|
237
|
158
|
N/M
|
Total
|
$ 154,535
|
$ 158,734
|
(3%)
|
|
|
|
|
Gross
Profit by Reporting Segment
|
|
|
|
North
America
|
$
57,091
|
$
59,826
|
(5%)
|
Europe
|
7,300
|
9,124
|
(20%)
|
Asia/Pacific
|
446
|
410
|
9%
|
Administrative and all
other
|
137
|
45
|
N/M
|
Total
|
$ 64,974
|
$ 69,405
|
(6%)
|
|
Net
Sales by Product Group*
|
|
|
|
Wood
Construction
|
$
132,798
|
$
137,779
|
(4%)
|
Concrete
Construction
|
21,434
|
20,742
|
3%
|
Other
|
303
|
213
|
N/M
|
Total
|
$ 154,535
|
$ 158,734
|
(3%)
|
|
Income
(Loss) from Operations
|
|
|
|
North
America
|
$
15,260
|
$
17,873
|
(15%)
|
Europe
|
(4,180)
|
(2,372)
|
N/M
|
Asia/Pacific
|
(1,184)
|
(654)
|
N/M
|
Administrative and all
other
|
(883)
|
(1,339)
|
N/M
|
Total
|
$ 9,013
|
$ 13,508
|
(33%)
|
|
|
|
|
*
|
The
Company manages its business by geographic segment but is
presenting sales by product group as additional
information.
|
N/M
|
Statistic
is not meaningful.
|
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.