PLEASANTON, Calif.,
April 21, 2016 /PRNewswire/
-- Simpson Manufacturing Co., Inc. (the "Company") (NYSE: SSD)
today announced its first quarter 2016 results.
Results of Operations for the Three Months Ended
March 31, 2016, Compared with the Three Months Ended
March 31, 2015.
Unless otherwise stated, the results announced below, when
providing comparisons (which are generally indicated by words such
as "increased," "decreased" "remained" or "compared to"), compare
the results of operations for the three months ended March 31, 2016, against the results of operations
for the three months ended March 31,
2015.
Overview
Net sales increased 13% to $199.5
million from $176.5 million.
The Company had net income of $16.3
million compared to $10.1
million. Diluted net income per common share was
$0.34 compared to $0.20.
Net sales
The Company's net sales increased in both the North America and Europe segments.
- Segment net sales:
- North America – Net sales
increased 16% due to increased unit sales volumes in the United States on improved economic
activity, partly offset by a slight decrease in average sales
prices. Canada's net sales were
negatively affected by the Canadian dollar weakening against
the United States dollar.
- Europe – Net sales increased
4%, mostly due to increased unit sales volumes, partly offset by a
decrease in average sales prices. Europe's net sales were negatively affected by
the European currencies weakening against the United States dollar.
- Asia/Pacific -Net sales
decreased 59%, primarily due to the closing of sales offices in
China, Thailand and Dubai late in the first quarter of 2015, which
accounted for approximately a $2.2
million decrease in consolidated net sales.
- Consolidated net sales channels and product groups:
- Net sales to dealer distributors, lumber dealers, contractor
distributors and home centers increased, primarily due to increased
home construction activity.
- Wood construction product net sales, including sales of
connectors, truss plates, fastening systems, fasteners and
shearwalls, represented 86% of total Company net sales in the first
quarters of both 2016 and 2015.
- Concrete construction product net sales, including sales of
adhesives, chemicals, mechanical anchors, powder actuated tools and
reinforcing fiber materials, represented 14% of total Company net
sales in the first quarters of both 2016 and 2015.
Gross profit
Gross profit increased to $92.5
million from $77.5 million.
Gross profit as a percentage of net sales increased to 46% from
44%. Based on current information and subject to future events and
circumstances, the Company estimates that its full-year 2016 gross
profit margin will be between approximately 46% and 47%.
- North America – Gross profit
margin increased to 48% from 46%, primarily as a result of a
decrease in factory overhead (on increased production volumes) and
a small reduction in material costs, both as a percentage of net
sales.
- Europe – Gross profit margin
decreased to 36% from 38%, as a result of increases in material,
labor and shipping costs, all as a percentage of sales, partly
offset by decrease in factory costs (on increased production
volumes), as a percentage of sales.
- Product mix – The gross profit margin differential between wood
construction products and concrete construction products, which
have lower gross profit margins, decreased to 15% from 17%.
- Steel prices – The market prices for steel increased during the
first quarter of 2016. The Company currently anticipates that,
subject to changing economic conditions, it is likely that steel
prices will rise during the second quarter of 2016.
Research and development and engineering expense
Research and development and engineering expense increased
12% to $11.4 million from
$10.2 million, primarily due to
increases of $0.6 million in cash
profit sharing expense on increased profits, $0.2 million in personnel costs and $0.2 million in computer costs, all of which
occurred in the North America
segment.
Selling expense
Selling expense increased 11% to $25.2 million from $22.6
million, primarily due to increases of $1.7 million in personnel costs and $1.1 million in cash profit sharing and sales
commission expenses, partly offset by a decrease of $0.2 million in donation expense.
- North America – Selling
expense increased $2.6 million,
primarily due to increases of $1.9
million in personnel costs, mostly related to the addition
of staff and pay rate increases instituted on January 1, 2016, and $1.2
million in cash profit sharing and sales commission expense,
partly offset by a decrease of $0.2
million in donation expense.
- Europe – Selling expense
increased $0.9 million, primarily due
to increases of $0.4 million in
personnel costs mostly related to the addition of staff.
- Asia/Pacific - Selling expense
decreased $0.9 million, primarily due
to a decrease of $0.7 million in
personnel costs, related to closing three sales offices and
downsizing one sales office in 2015.
General and administrative expense
General and administrative expense increased 3% to
$29.3 million from $28.4 million, primarily due to an increase of
$1.8 million in cash profit sharing
expense, partly offset by a net decrease of $0.6 million in foreign currency losses.
- North America – General and
administrative expense increased $1.1
million, primarily due to an increase of $1.5 million in cash profit sharing expense.
- Europe – General and
administrative expense decreased by $1.0
million, primarily due to a net decrease of $1.2 million in unrealized foreign currency
losses.
- Administrative and Other – General and administrative expense
increased by $1.0 million, primarily
due to an increase of $0.4 million in
cash profit sharing expense, as well as a net increase in foreign
currency losses of $0.3 million.
Income taxes
The Company's effective income tax rate remained 38%. Based on
current information and subject to future events and circumstances,
the Company estimates that its full-year 2016 effective tax rate
will be between 37% and 39%.
Additional information
At its meeting on April 20, 2016,
the Company's Board of Directors declared a cash dividend of
$0.18 per share. This is an increase
of $0.02 per share, or 12.5%, over
the amount of the last dividend declared by the Company in
February 2016. The record date for
the dividend will be on July 7, 2016,
and it will be paid on July 28,
2016.
For the three months ended March 31, 2016, the Company
repurchased 106,347 shares of the Company's shares for $3.5 million, at an average price of $32.93 per share. The repurchases were part of
the $50.0 million that the Company's
Board of Directors authorized for 2016.
Investors, analysts and other interested parties are invited to
join the Company's conference call on Friday, April 22, 2016, at 6:00 am Pacific Time. To participate, callers may
dial 877-876-9177 (international callers may dial
785-424-1666). 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, such
as statements above regarding anticipated or estimated steel
prices, gross profit margin, and effective tax rate. 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 business cycles and construction business conditions; (ii)
customer acceptance of the Company's products; (iii) product
liability claims, contractual liability, engineering and design
liability and similar liabilities or claims, (iv) relationships
with key customers; (v) materials and manufacturing costs; (vi) the
financial condition of customers, competitors and suppliers; (vii)
technological developments including software development; (viii)
increased competition; (ix) changes in industry practices or
regulations; (x) litigation risks, (xi) changes in capital and
credit market conditions; (xii) governmental and business
conditions in countries where the Company's products are
manufactured and sold; (xiii) changes in trade regulations; (xiv)
the effect of acquisition activity; (xv) changes in the Company's
plans, strategies, objectives, expectations or intentions; and
(xvi) other risks and uncertainties indicated from time to time in
the Company's filings with the U.S. Securities and Exchange
Commission including most recently the Company's Annual Report on
Form 10-K under the heading "Item 1A - Risk Factors." 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 financial
information set forth herein is presented on a preliminary
unreviewed basis; reviewed data will be included in the Company's
Quarterly Report on Form 10-Q for the period ended March 31,
2016, when filed.
The Company's results of operations (unaudited) for the three
months ended March 31, 2016 and 2015, were as follows:
|
Three Months
Ended
March 31,
|
(Amounts in
thousands, except per share data)
|
2016
|
|
2015
|
Net sales
|
$
|
199,523
|
|
|
$
|
176,491
|
|
Cost of
sales
|
107,000
|
|
|
98,993
|
|
Gross
profit
|
92,523
|
|
|
77,498
|
|
Research and
development and engineering expenses
|
11,423
|
|
|
10,197
|
|
Selling
expenses
|
25,187
|
|
|
22,607
|
|
General and
administrative expenses
|
29,298
|
|
|
28,433
|
|
Gain on disposal of
assets
|
(26)
|
|
|
(16)
|
|
Income from
operations
|
26,641
|
|
|
16,277
|
|
Interest expense,
net
|
(235)
|
|
|
(35)
|
|
Income before
taxes
|
26,406
|
|
|
16,242
|
|
Provision for income
taxes
|
10,063
|
|
|
6,191
|
|
Net income
|
$
|
16,343
|
|
|
$
|
10,051
|
|
Earnings per common
share:
|
|
|
|
Basic
|
$
|
0.34
|
|
|
$
|
0.20
|
|
Diluted
|
$
|
0.34
|
|
|
$
|
0.20
|
|
Weighted average
shares outstanding:
|
|
|
|
Basic
|
48,297
|
|
|
49,208
|
|
Diluted
|
48,450
|
|
|
49,408
|
|
Other
data:
|
|
|
|
Depreciation and
amortization
|
$
|
7,437
|
|
|
$
|
7,418
|
|
Pre-tax equity-based
compensation expense
|
2,750
|
|
|
3,295
|
|
|
|
|
|
Cash dividend
declared per common share
|
$
|
0.16
|
|
|
$
|
0.14
|
|
The Company's financial position (unaudited) as of
March 31, 2016 and 2015, and December 31, 2015 were as
follows:
|
|
March
31,
|
|
December
31,
|
(Amounts in
thousands)
|
|
2016
|
|
2015
|
|
2015
|
Cash and cash
equivalents
|
|
$
|
232,028
|
|
|
$
|
233,587
|
|
|
$
|
258,825
|
|
Trade accounts
receivable, net
|
|
135,123
|
|
|
117,316
|
|
|
106,011
|
|
Inventories
|
|
210,787
|
|
|
205,312
|
|
|
195,757
|
|
Other current
assets
|
|
13,284
|
|
|
32,231
|
|
|
28,679
|
|
Total current
assets
|
|
591,222
|
|
|
588,446
|
|
|
589,272
|
|
Property, plant and
equipment, net
|
|
216,660
|
|
|
205,009
|
|
|
213,716
|
|
Goodwill
|
|
125,614
|
|
|
122,923
|
|
|
123,950
|
|
Other noncurrent
assets
|
|
35,465
|
|
|
36,281
|
|
|
34,371
|
|
Total
assets
|
|
$
|
968,961
|
|
|
$
|
952,659
|
|
|
$
|
961,309
|
|
Trade accounts
payable
|
|
$
|
29,023
|
|
|
$
|
21,456
|
|
|
$
|
21,309
|
|
Other current
liabilities
|
|
70,523
|
|
|
59,831
|
|
|
73,655
|
|
Total current
liabilities
|
|
99,546
|
|
|
81,287
|
|
|
94,964
|
|
Other long-term
liabilities
|
|
5,159
|
|
|
16,082
|
|
|
16,521
|
|
Stockholders'
equity
|
|
864,256
|
|
|
855,290
|
|
|
849,824
|
|
Total liabilities and
stockholders' equity
|
|
$
|
968,961
|
|
|
$
|
952,659
|
|
|
$
|
961,309
|
|
Additional financial data of the Company (unaudited) for the
three months ended March 31, 2016 and 2015, were as
follows:
|
Three Months
Ended
|
|
|
|
March
31,
|
|
%
|
(Amounts in
thousands)
|
2016
|
|
2015
|
|
change*
|
Net Sales by
Reporting Segment
|
|
|
|
|
|
|
North
America
|
$
|
174,454
|
|
|
$
|
150,324
|
|
|
16%
|
|
Europe
|
23,698
|
|
|
22,788
|
|
|
4%
|
|
Asia/Pacific
|
1,371
|
|
|
3,379
|
|
|
(59)%
|
|
Total
|
$
|
199,523
|
|
|
$
|
176,491
|
|
|
13%
|
Net Sales by
Product Group**
|
|
|
|
|
|
|
Wood
Construction
|
$
|
171,777
|
|
|
$
|
151,379
|
|
|
13%
|
|
Concrete
Construction
|
27,745
|
|
|
25,010
|
|
|
11%
|
|
Other
|
1
|
|
|
102
|
|
|
N/M
|
|
|
Total
|
$
|
199,523
|
|
|
$
|
176,491
|
|
|
13%
|
Gross Profit
(Loss) by Reporting Segment
|
|
|
|
|
|
|
North
America
|
$
|
83,713
|
|
|
68,707
|
|
|
22%
|
|
Europe
|
8,562
|
|
|
8,697
|
|
|
(2)%
|
|
Asia/Pacific
|
306
|
|
|
510
|
|
|
(40)%
|
|
Administrative and
all other
|
(58)
|
|
|
(416)
|
|
|
N/M
|
|
|
Total
|
$
|
92,523
|
|
|
$
|
77,498
|
|
|
19%
|
Income (Loss) from
Operations
|
|
|
|
|
|
|
North
America
|
$
|
30,452
|
|
|
$
|
20,466
|
|
|
49%
|
|
Europe
|
(1,618)
|
|
|
(1,632)
|
|
|
1%
|
|
Asia/Pacific
|
155
|
|
|
(803)
|
|
|
119%
|
|
Administrative and
all other
|
(2,348)
|
|
|
(1,754)
|
|
|
(34)%
|
|
|
Total
|
$
|
26,641
|
|
|
$
|
16,277
|
|
|
64%
|
|
|
|
|
*
|
Unfavorable
percentage changes are presented in parenthesis.
|
|
**
|
The Company manages
its business by geographic segment but is presenting sales by
product group as additional information.
|
|
N/M
|
Statistic is not
material or 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.
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/simpson-manufacturing-co-inc-announces-first-quarter-results-300255598.html
SOURCE Simpson Manufacturing Co., Inc.