PLEASANTON, Calif.,
July 27, 2017 /PRNewswire/ --
Second quarter highlights
- Consolidated net sales of $263.0
million increased 14% year-over-year
- Diluted earnings per share of $0.59 per share increased 9%
year-over-year
- Declared quarterly cash dividend of $0.21 per share
Simpson Manufacturing Co., Inc. (the "Company") (NYSE: SSD), an
industry leader in engineered structural connectors and building
solutions, today announced its financial results for the second
quarter 2017. Unless otherwise stated, the Company's results below,
when referencing "recently acquired businesses" or "acquired net
sales" refer to Multi Services Dêcoupe S.A. (acquired August 2016), Gbo Fastening Systems AB (acquired
January 2017), and CG Visions, Inc.
(acquired January 2017), or net sales
of such acquired businesses, respectively. Refer to the "Segment
Reporting" table below for additional segment information
(including information about the Company's Asia/Pacific segment and Administrative and
All Other segment).
Second Quarter 2017 Financial Highlights
All
comparisons below (which are generally indicated by words such as
"increased," "decreased," "remained," or "compared to"), unless
otherwise noted, are comparing the second quarter of 2017 with the
second quarter of 2016.
- Consolidated net sales of $263.0
million increased 14% compared to $230.0 million. Recently acquired businesses as a
whole accounted for $15.0 million
(45%) of the increased net sales.
-
- North America net sales of
$215.7 million increased 9% compared
to $197.3 million, primarily due to
increases in sales volumes as well as in average net sales unit
prices. Canada's net sales were
flat for the quarter, primarily due to the negative effect of
foreign currency translations from the weakening Canadian dollar
against the United States dollar.
In local currency, Canada net
sales increased, primarily due to increases in sales volumes.
- Europe net sales of
$45.2 million increased 47% compared
to $30.8 million, primarily due to
acquired net sales of $13.5 million,
which accounted for 94% of the increased net sales in Europe. Net sales were negatively affected by
approximately $1.1 million in foreign
currency translations primarily related to the weakening of the
British pound against the United
States dollar. In local currency, Europe net sales increased due to increases in
sales volumes as well as in average net sales unit prices.
- Consolidated gross profit of $123.5
million increased 11% compared to $111.5 million. Gross profit as a percentage of
net sales decreased to 47% from 48%. Recently acquired businesses
had an average gross profit margin of 32% in the second quarter of
2017.
-
- North America gross profit as
a percentage of net sales decreased to 49% from 50%.
- Europe gross profit as a
percentage of net sales decreased to 37% from 41%, primarily due to
the recently acquired businesses.
- Consolidated income from operations of $45.1 million increased 10% compared to
$40.9 million. As a percentage of net
sales, consolidated income from operations decreased to 17% from
18%. Recently acquired businesses as a whole recorded $0.1 million in operating losses in the second
quarter of 2017, primarily due to purchase accounting adjustments
such as intangible amortization expense.
-
- North America income from
operations of $42.0 million increased
5% compared to $40.1 million.
- Europe income from operations
of $4.1 million increased 118%
compared to $1.9 million.
- Consolidated net income was $28.2
million, or $0.59 per diluted
share of the Company's common stock, compared to net income of
$26.2 million, or $0.54 per diluted share of the Company's common
stock. Recently acquired businesses as a whole recorded a net loss
of $0.3 million in the second quarter
of 2017.
Year-to-Date (6-month) 2017 Financial Highlights
All
comparisons below (which are generally indicated by words such as
"increased," "decreased," "remained," or "compared to"), unless
otherwise noted, are comparing the six months ended June 30, 2017 with the six months ended
June 30, 2016.
- Consolidated net sales of $482.9
million increased 12% compared to $429.5 million. Recently acquired businesses as a
whole accounted for $27.6 million
(52%) of the increased net sales.
-
- North America net sales of
$399.5 million increased 7% compared
to $371.7 million, primarily due to
increases in sales volumes, as well as average net sales unit
prices. Canada's net sales
increased, primarily due to increased volumes.
- Europe net sales of
$79.6 million increased 46% compared
to $54.5 million, primarily due to
acquired net sales of $24.6 million,
which accounted for 98% of the increased net sales. Net sales were
negatively affected by approximately $2.3
million in foreign currency translations, primarily related
to the weakening of the British pound against the United States dollar. In local currency,
Europe net sales increased due to
increases in sales volumes as well as in average net sales unit
prices.
- Consolidated gross profit of $223.7
million increased 10% compared to $204.0 million. Gross profit as a percentage of
net sales decreased to 46% from 47%. Recently acquired businesses
had an average gross profit margin of 31% in the six months ended
June 30, 2017.
-
- North America gross profit as
a percentage of net sales remained 49%.
- Europe gross profit as a
percentage of net sales decreased to 35% from 39%, primarily due to
the recently acquired businesses.
- Consolidated income from operations of $67.8 million increased slightly compared to
$67.6 million. As a percentage of net
sales, consolidated income from operations decreased to 14% from
16%. Recently acquired businesses as a whole recorded $0.2 million in operating losses in the six
months ended June 30, 2017, primarily
due to purchase accounting adjustments such as intangible
amortization expense.
-
- North America income from
operations of $68.8 million decreased
3% compared to $70.6 million.
- Europe income from operations
of $2.3 million increased 720%
compared to $0.3 million.
- Consolidated net income was $51.3
million, or $1.07 per diluted
share of the Company's common stock, compared to net income of
$42.5 million, or $0.88 per diluted share of the Company's common
stock. Recently acquired businesses as a whole contributed net
income of $7.8 million in the six
months ended June 30, 2017, as a
result of an $8.4 million gain on a
bargain purchase recorded in the first quarter of 2017.
Management Commentary
"Our second quarter financial results, while fundamentally
strong, reflect the various investments we have been making in our
business, including the development of our truss software offering,
growing our market share in Europe
with the associated recent acquisitions and working to deepen our
foothold in the concrete repair and protection space," commented
Karen Colonias, President and Chief
Executive Officer of Simpson Manufacturing Co., Inc. "Beyond these
initiatives, with an industry-leading position in the U.S.
connector market, the wood construction products are core to our
operations and we remain dedicated to continuing to grow our
offering in the single and multi-family residential and commercial
space. Further, we are intently focused on reducing our total
selling, general and administrative expenses as a percentage of net
sales which were under 30% for the quarter and down 118 basis
points from the prior year quarter. While we do not expect SG&A
as a percentage of net sales to be reduced to the 22% level we
achieved in 2006, we are focusing on ways to be able to better
leverage our expenses as we begin to monetize our various strategic
initiatives."
Mrs. Colonias concluded, "We continue to have a strong financial
position which affords us the flexibility and capability to
continue investing in our long-term strategy to increase
shareholder value and to return capital to our valued shareholders.
Despite maintaining an industry-leading gross profit margin and
operating income margin, the investments we have been making in our
strategic initiatives have yet to fully materialize and reflect the
operating leverage and earnings power that Simpson Manufacturing
strives to achieve. Over the coming quarters, we plan to provide
additional metrics and targets to help our investors to better
measure our success and progress on these initiatives."
Corporate Developments
- On July 13, 2017, the Company's
Board of Directors (the "Board") declared a cash dividend of
$0.21 per share. The dividend will be
payable on October 26, 2017 to
shareholders of record as of October 5,
2017.
- During the second quarter of 2017, the Company repurchased
425,000 shares of the Company's common stock pursuant to an
accelerated stock repurchase program, at an average price of
$41.28 per share, for a total of
$17.5 million. At June 30, 2017, approximately $54.0 million remained available for repurchase
under the August 2016 Board
authorization for repurchasing shares of the Company's common stock
having an aggregate value of up to $125.0
million through December 31,
2017.
- At the Company's annual meeting on May
16, 2017, Mr. Michael Bless
was elected as an independent director to the Board. On the same
day, Mr. Bless was appointed by the Board to both the Audit and
Acquisitions and Strategy Committees. Mr. Bless has extensive board
and operational experience and currently serves as President and
Chief Executive Officer of Century Aluminum Co., a company in a
related industry which complements Simpson's existing Board
membership. The Board believes he will provide valuable
perspectives and insights to enhance the execution of the Company's
growth strategies.
Business Outlook
The Company is currently uncertain whether the market price for
steel will remain stable during the third quarter of 2017.
Subject to changing economic conditions, future events and
circumstances, the Company is reiterating its outlook for gross
profit margin to be in the range of 45% to 46% for the full year
ending December 31, 2017.
Conference Call Details
Investors, analysts and other interested parties are invited to
join the Company's second quarter 2017 financial results conference
call on Friday, July 28, 2017 at
9:00 am Eastern Time (6:00 am Pacific Time). To participate, callers
may dial (877) 407-0792 (U.S. and Canada) or (201) 689-8263 (International)
approximately 10 minutes prior to the start time. The call
will be webcast simultaneously and can be accessed through a link
on the Company's website at www.simpsonmfg.com. The webcast will
remain posted on the Company's website for 90 days.
About Simpson Manufacturing Co., Inc.
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."
Forward-Looking Statements
This document contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995,
Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934, based on numerous assumptions and
subject to risks and uncertainties (some of which are beyond our
control), such as statements above regarding steel prices and the
Company's gross profit margin outlook. Forward-looking statements
are necessarily speculative in nature, and it can be expected that
some or all of the assumptions of the forward-looking statements we
furnish will not materialize or will vary significantly from actual
results. Although the Company believes that these forward-looking
statements are reasonable, it does not and cannot give any
assurance that its beliefs and expectations will prove to be
correct, and our actual results might differ materially from
results suggested by any forward-looking statement in this
document. 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 and actions by activist shareholders, (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 in the Company's most recent 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. Except as required by
law, the Company undertakes no obligation to publicly release any
update or revision to these forward-looking statements, whether as
a result of the receipt of new information, the occurrence of
future events or otherwise. The information in this document speaks
as of the date hereof and is subject to change. Any distribution of
this document after the date hereof is not intended and should not
be construed as updating or confirming such information. In light
of the foregoing, investors are urged not to rely on our
forward-looking statements in making an investment decision about
our securities. We further do not accept any responsibility for any
projections or reports published by analysts, investors or other
third parties. The financial information set forth herein is
presented on a preliminary unreviewed and unaudited basis; reviewed
and unaudited data will be included in the Company's Quarterly
Report on Form 10-Q for the period ended June 30, 2017, when
filed.
Simpson
Manufacturing Co., Inc. and Subsidiaries
UNAUDITED Consolidated Statements of Operations (In
thousands, except per share data)
|
|
|
|
|
|
Three Months
Ended
June 30,
|
|
Six Months
Ended
June 30,
|
(Amounts in
thousands, except per share data)
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Net sales
|
$
|
263,002
|
|
$
|
229,973
|
|
$
|
482,869
|
|
$
|
429,496
|
Cost of
sales
|
139,477
|
|
118,486
|
|
259,188
|
|
225,486
|
Gross
profit
|
123,525
|
|
111,487
|
|
223,681
|
|
204,010
|
Research and
development and engineering expense
|
13,264
|
|
11,452
|
|
26,371
|
|
22,875
|
Selling
expense
|
28,511
|
|
24,822
|
|
57,994
|
|
50,009
|
General and
administrative expense
|
36,563
|
|
34,945
|
|
71,549
|
|
64,243
|
Loss (gain) on
disposal of assets
|
50
|
|
(656)
|
|
(1)
|
|
(682)
|
Income from
operations
|
45,137
|
|
40,924
|
|
67,768
|
|
67,565
|
Loss in equity method
investment, before tax
|
(12)
|
|
—
|
|
(41)
|
|
—
|
Interest expense,
net
|
(199)
|
|
(83)
|
|
(388)
|
|
(318)
|
Gain on bargain
purchase of a business
|
—
|
|
—
|
|
8,388
|
|
—
|
Income before
taxes
|
44,926
|
|
40,841
|
|
75,727
|
|
67,247
|
Provision for income
taxes
|
16,712
|
|
14,640
|
|
24,392
|
|
24,703
|
Net income
|
$
|
28,214
|
|
$
|
26,201
|
|
$
|
51,335
|
|
$
|
42,544
|
Earnings per common
share:
|
|
|
|
|
|
|
|
Basic
|
$
|
0.59
|
|
$
|
0.54
|
|
$
|
1.08
|
|
$
|
0.88
|
Diluted
|
$
|
0.59
|
|
$
|
0.54
|
|
$
|
1.07
|
|
$
|
0.88
|
Weighted average
shares outstanding:
|
|
|
|
|
|
|
|
Basic
|
47,634
|
|
48,399
|
|
47,634
|
|
48,353
|
Diluted
|
47,920
|
|
48,605
|
|
47,922
|
|
48,533
|
Cash dividend
declared per common share
|
$
|
0.21
|
|
$
|
0.18
|
|
$
|
0.39
|
|
$
|
0.34
|
Other
data:
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
$
|
8,572
|
|
$
|
7,442
|
|
$
|
16,935
|
|
$
|
14,878
|
Pre-tax equity-based
compensation expense
|
$
|
3,209
|
|
$
|
3,573
|
|
$
|
11,185
|
|
$
|
6,323
|
|
|
|
|
|
|
|
|
Simpson
Manufacturing Co., Inc. and Subsidiaries
UNAUDITED Consolidated Condensed Balance Sheets (In
thousands)
|
|
|
|
June
30,
|
|
December
31,
|
(Amounts in
thousands)
|
|
2017
|
|
2016
|
|
2016
|
Cash and cash
equivalents
|
|
$
|
140,950
|
|
$
|
246,337
|
|
$
|
226,537
|
Trade accounts
receivable, net
|
|
172,331
|
|
144,916
|
|
112,423
|
Inventories
|
|
265,293
|
|
218,164
|
|
232,274
|
Assets held for
sale
|
|
308
|
|
—
|
|
—
|
Other current
assets
|
|
17,457
|
|
11,482
|
|
14,013
|
Total current
assets
|
|
596,339
|
|
620,899
|
|
585,247
|
Property, plant and
equipment, net
|
|
261,362
|
|
219,391
|
|
232,810
|
Goodwill
|
|
137,160
|
|
124,993
|
|
124,479
|
Other noncurrent
assets
|
|
46,616
|
|
34,256
|
|
37,438
|
Total
assets
|
|
$
|
1,041,477
|
|
$
|
999,539
|
|
$
|
979,974
|
Trade accounts
payable
|
|
$
|
37,742
|
|
$
|
27,069
|
|
$
|
27,674
|
Capital lease
obligation - current portion
|
|
525
|
|
—
|
|
—
|
Other current
liabilities
|
|
95,989
|
|
85,274
|
|
81,122
|
Total current
liabilities
|
|
134,256
|
|
112,343
|
|
108,796
|
Other long-term
liabilities - net of current portion
|
|
7,810
|
|
4,920
|
|
5,336
|
Stockholders'
equity
|
|
899,411
|
|
882,276
|
|
865,842
|
Total liabilities and
stockholders' equity
|
|
$
|
1,041,477
|
|
$
|
999,539
|
|
$
|
979,974
|
Simpson
Manufacturing Co., Inc. and Subsidiaries
UNAUDITED Segment and Product Group Sales Information (In
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
Six Months
Ended
|
|
|
|
|
|
June
30,
|
|
%
|
|
June
30,
|
|
%
|
(Amounts in
thousands)
|
2017
|
|
2016
|
|
change
*
|
|
2017
|
|
2016
|
|
change
*
|
Net Sales by
Reporting Segment
|
|
|
|
|
|
|
|
|
|
|
|
|
North
America
|
$
|
215,739
|
|
$
|
197,284
|
|
9%
|
|
$
|
399,510
|
|
$
|
371,738
|
|
7%
|
|
Europe
|
45,234
|
|
30,820
|
|
47%
|
|
79,615
|
|
54,518
|
|
46%
|
|
Asia/Pacific
|
2,029
|
|
1,869
|
|
9%
|
|
3,744
|
|
3,240
|
|
16%
|
|
|
Total
|
$
|
263,002
|
|
$
|
229,973
|
|
14%
|
|
$
|
482,869
|
|
$
|
429,496
|
|
12%
|
Net Sales by
Product Group**
|
|
|
|
|
|
|
|
|
|
|
|
|
Wood
Construction
|
$
|
224,013
|
|
$
|
196,734
|
|
14%
|
|
$
|
414,890
|
|
$
|
368,512
|
|
13%
|
|
Concrete
Construction
|
38,917
|
|
33,239
|
|
17%
|
|
67,734
|
|
60,983
|
|
11%
|
|
Other
|
72
|
|
—
|
|
N/M
|
|
245
|
|
1
|
|
N/M
|
|
|
Total
|
$
|
263,002
|
|
$
|
229,973
|
|
14%
|
|
$
|
482,869
|
|
$
|
429,496
|
|
12%
|
Gross Profit
(Loss) by Reporting Segment
|
|
|
|
|
|
|
|
|
|
|
|
|
North
America
|
$
|
106,484
|
|
$
|
97,703
|
|
9%
|
|
$
|
195,474
|
|
$
|
181,416
|
|
8%
|
|
Europe
|
16,809
|
|
12,684
|
|
33%
|
|
27,865
|
|
21,246
|
|
31%
|
|
Asia/Pacific
|
326
|
|
1,050
|
|
(69)%
|
|
455
|
|
1,356
|
|
(66)%
|
|
Administrative and
all other
|
(94)
|
|
50
|
|
N/M
|
|
(113)
|
|
(8)
|
|
N/M
|
|
|
Total
|
$
|
123,525
|
|
$
|
111,487
|
|
11%
|
|
$
|
223,681
|
|
$
|
204,010
|
|
10%
|
Income (Loss) from
Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
North
America
|
$
|
42,011
|
|
$
|
40,116
|
|
5%
|
|
$
|
68,778
|
|
$
|
70,568
|
|
(3)%
|
|
Europe
|
4,138
|
|
1,899
|
|
118%
|
|
2,304
|
|
281
|
|
720%
|
|
Asia/Pacific
|
71
|
|
852
|
|
(92)%
|
|
(124)
|
|
1,007
|
|
(112)%
|
|
Administrative and
all other
|
(1,083)
|
|
(1,943)
|
|
N/M
|
|
(3,190)
|
|
(4,291)
|
|
N/M
|
|
|
Total
|
$
|
45,137
|
|
$
|
40,924
|
|
10%
|
|
$
|
67,768
|
|
$
|
67,565
|
|
—%
|
|
|
|
|
*
|
Unfavorable
percentage changes are presented in parentheses.
|
|
**
|
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.
|
CONTACT:
Addo Investor Relations
investor.relations@strongtie.com
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content:http://www.prnewswire.com/news-releases/simpson-manufacturing-co-inc-announces-second-quarter-2017-financial-results-300495669.html
SOURCE Simpson Manufacturing Co., Inc.