PLEASANTON, Calif., Oct. 29 /PRNewswire-FirstCall/ -- Simpson
Manufacturing Co., Inc. (the "Company") announced today that its
third quarter 2009 net sales decreased 23.9% to $167.2 million
compared to net sales of $219.8 million for the third quarter of
2008. The Company had net income of $12.8 million for the third
quarter of 2009 compared to net income of $23.4 million for the
third quarter of 2008. Diluted net income per common share was
$0.26 for the third quarter of 2009 compared to diluted net income
per common share of $0.48 for the third quarter of 2008. In the
first nine months of 2009, net sales decreased 25.4% to $452.4
million as compared to net sales of $606.7 million for the first
nine months of 2008. Net income was $15.0 million for the first
nine months of 2009 as compared to net income of $52.1 million for
the first nine months of 2008. Diluted net income per common share
was $0.31 for the first nine months of 2009 as compared to $1.06
for the first nine months of 2008. In the third quarter of 2009,
sales declined throughout the United States. Sales during the
quarter also decreased throughout Europe, with the exception of
France, and decreased in the United Kingdom and Canada. Sales in
France were up primarily due to the acquisition of Agence
Internationale Commerciale et Industrielle, S.A.S. ("Aginco") in
April 2009. Simpson Strong-Tie's third quarter sales decreased
22.0% from the same quarter last year, while Simpson Dura-Vent's
sales decreased 37.5%. Simpson Strong-Tie's sales to contractor
distributors and dealer distributors decreased significantly as
home-building activity, and general economic conditions, remained
weak. Sales to home centers also decreased. Sales decreased across
all of Simpson Strong-Tie's major product lines, particularly those
used in new home construction. Simpson Dura-Vent's sales decreased
across most of its product lines, with the exception of special gas
vent products which were up slightly. Income from operations
decreased 43.5% from $37.2 million in the third quarter of 2008 to
$21.0 million in the third quarter of 2009. Gross margins decreased
from 40.8% in the third quarter of 2008 to 36.4% in the third
quarter of 2009. The decrease in gross margins was primarily due to
reduced absorption of fixed overhead, as a result of lower
production volumes, as well as higher manufacturing costs,
including higher costs of material and labor. The decline in steel
prices slowed in the second quarter of 2009 and prices again
started to rise in the third quarter of 2009. The Company expects
steel prices to continue to increase as demand returns to the
market. Through the first nine months of 2009, inventories
decreased 29.2% from $251.9 million at December 31, 2008, to $178.2
million at September 30, 2009. Research and development expense
decreased 12.2% from $5.7 million in the third quarter of 2008 to
$5.0 million in the third quarter of 2009, primarily due to a $0.4
million decrease in personnel expenses. Selling expense decreased
27.0% from $21.3 million in the third quarter of 2008 to $15.6
million in the third quarter of 2009, which resulted primarily from
a $3.6 million decrease in expenses associated with sales and
marketing personnel, most of which was related to cost-cutting
measures, a $1.1 million decrease in promotional expenditures and a
$0.6 million decrease in commissions paid to selling agents.
General and administrative expense decreased 24.2% from $25.5
million in the third quarter of 2008 to $19.4 million in the third
quarter of 2009. This decrease resulted from several factors,
including a $1.8 million decrease in administrative personnel
expenses, related in part to cost-cutting measures, a $1.7 million
decrease in cash profit sharing, a $1.6 million decrease in legal
and professional service expenses and a $0.9 million decrease in
the provision for bad debt, partly offset by a $0.5 million
increase in amortization of intangible assets, primarily related to
the acquisition of Aginco. Interest income decreased primarily due
to lower interest rates. The effective tax rate was 39.3% in the
third quarter of 2009, up from 38.1% in the third quarter of 2008.
In the first nine months of 2009, sales declined throughout the
United States. California and the western and southeastern regions
had the largest decreases in sales. Sales during the period also
decreased in Europe, the United Kingdom and Canada. Simpson
Strong-Tie's sales for the first nine months of the year decreased
25.5% from the same period last year, while Simpson Dura-Vent's
sales decreased 24.6%. Simpson Strong-Tie's sales to contractor
distributors and dealer distributors decreased as a result of the
weakness in the U.S. housing market. Sales to home centers also
decreased. Sales decreased across all of Simpson Strong-Tie's major
product lines, particularly those used in new home construction.
Sales of Simpson Dura-Vent's Direct-Vent and gas vent, hearth and
pellet vent product lines decreased, while sales of special gas
vent and relining products increased, primarily as a result of the
acquisition of ProTech in June 2008. Income from operations
decreased 64.4% from $83.0 million in the first nine months of 2008
to $29.6 million in the first nine months of 2009. Gross margins
decreased from 37.9% in the first nine months of 2008 to 33.8% in
the first nine months of 2009. The decrease in gross margins was
primarily due to reduced absorption of fixed overhead, as a result
of lower production volumes, as well as higher manufacturing costs,
including higher costs of material and labor. Research and
development expense decreased 8.4% from $16.4 million in the first
nine months of 2008 to $15.0 million in the first nine months of
2009, primarily due to a $0.7 million decrease in professional
service fees and a $0.6 million decrease in personnel expenses.
Selling expense decreased 23.4% from $63.3 million in the first
nine months of 2008 to $48.4 million in the first nine months of
2009. This decrease resulted primarily from an $8.6 million
decrease in expenses associated with sales and marketing personnel,
most of which was related to cost-cutting measures, a $4.0 million
decrease in promotional expenditures and a $1.0 million decrease in
commissions paid to selling agents. General and administrative
expense decreased 10.9% from $67.2 million in the first nine months
of 2008 to $59.8 million in the first nine months of 2009. This
decrease resulted primarily from a $6.1 million decrease in cash
profit sharing, a $1.7 million decrease in administrative personnel
expenses, related in part to cost-cutting measures, and a $1.5
million decrease in legal and professional service expenses, partly
offset by a $1.3 million increase in bad debt charges, most of
which was recorded in the first quarter of 2009, and a $1.5 million
increase in amortization of intangible assets, primarily related to
the businesses acquired since June 2008. Interest income decreased
from $2.2 million in the first nine months of 2008 to $64 thousand
in the first nine months of 2009, primarily due to lower interest
rates. The effective tax rate was 48.9% in the first nine months of
2009, up from 38.9% in the first nine months of 2008. The effective
tax rate is higher than the statutory rate primarily due to the
valuation allowances taken on foreign losses and a reduced benefit
from the reduction or loss of enterprise zone tax credits at two of
the Company's facilities in California. At its meeting on October
21, 2009, the Company's Board of Directors declared a cash dividend
of $0.10 per share. The record date for the dividend will be
January 7, 2010, and it will be paid on January 28, 2010.
Investors, analysts and other interested parties are invited to
join the Company's conference call on Friday, October 30, 2009, at
6:00 am Pacific Time. To participate, callers may dial
800-894-5910. The call will be webcast simultaneously and will be
available for one month through a link on the Company's website at
http://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 nine months ended
September 30, 2009 and 2008 (unaudited), are as follows: Three
Months Nine Months Ended September 30, Ended September 30,
------------------- ------------------- (Amounts in thousands,
except per share data) 2009 2008 2009 2008 ---- ---- ---- ---- Net
sales $167,200 $219,823 $452,446 $606,742 Cost of sales 106,299
130,143 299,594 376,939 ------- ------- ------- ------- Gross
profit 60,901 89,680 152,852 229,803 ------ ------ ------- -------
Research and development and engineering expenses 4,971 5,662
14,997 16,375 Selling expenses 15,563 21,323 48,440 63,264 General
and administrative expenses 19,351 25,514 59,828 67,155 ------
------ ------ ------ Income from operations 21,016 37,181 29,587
83,009 Loss in equity method investment, before tax - - (214) -
Interest income, net - 579 64 2,213 --- --- -- ----- Income before
taxes 21,016 37,760 29,437 85,222 Provision for income taxes 8,258
14,398 14,405 33,126 ----- ------ ------ ------ Net income $12,758
$23,362 $15,032 $52,096 ====== ====== ====== ====== Net income per
share: Basic $0.26 $0.48 $0.31 $1.07 Diluted 0.26 0.48 0.31 1.06
Cash dividend declared per common share $0.10 $0.10 $0.30 $0.30
Weighted average shares outstanding: Basic 49,195 48,612 49,066
48,593 Diluted 49,355 48,946 49,185 48,939 Other data: Depreciation
and amortization $7,493 $7,627 $22,093 $22,634 Pre-tax stock
compensation expense 511 859 1,554 2,715 The Company's financial
position as of September 30, 2009 and 2008, and December 31, 2008
(unaudited), is as follows: September 30, December 31,
------------- ------------ (Amounts in thousands) 2009 2008 2008
---- ---- ---- Cash and short-term investments $220,139 $163,857
$170,750 Trade accounts receivable, net 108,005 125,875 76,005
Inventories 178,237 251,647 251,878 Assets held for sale 7,887
8,429 8,387 Other current assets 24,787 18,936 20,577 ------ ------
------ Total current assets 539,055 568,744 527,597 Property, plant
and equipment, net 191,326 195,062 193,318 Goodwill 81,289 75,799
68,619 Other noncurrent assets 45,499 39,096 40,666 ------ ------
------ Total assets $857,169 $878,701 $830,200 ======= =======
======= Trade accounts payable $29,638 $46,113 $21,675 Line of
credit and current portion of long-term debt 29 629 26 Other
current liabilities 48,175 65,460 50,193 ------ ------ ------ Total
current liabilities 77,842 112,202 71,894 Long-term liabilities
9,019 10,607 9,280 Stockholders' equity 770,308 755,892 749,026
------- ------- ------- Total liabilities and stockholders' equity
$857,169 $878,701 $830,200 ======= ======= ======= 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, mechanical
anchors and powder actuated tools for concrete, masonry and steel.
The Company's other subsidiary, Simpson Dura-Vent Company, Inc.,
designs, engineers and manufactures venting systems for gas and
wood burning appliances. The Company's common stock trades on the
New York Stock Exchange under the symbol "SSD." For further
information, contact Barclay Simpson at (925) 560-9032. DATASOURCE:
Simpson Manufacturing Co., Inc. CONTACT: Barclay Simpson of Simpson
Manufacturing Co., Inc., +1-925-560-9032 Web Site:
http://www.simpsonmfg.com/
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