Simpson Manufacturing Co., Inc. Announces Fourth Quarter Earnings
Co., Inc. (the “Company”) announced today that its fourth quarter 2008 net
sales decreased 14.6% to
million
fourth quarter of 2008 compared to net income of
quarter of 2007. Diluted net income per common share was
quarter of 2008 compared to
sales decreased 7.4% to
for 2007. Net income decreased 21.5% to
income of
In the fourth quarter of 2008, sales declined throughout
States
during the quarter decreased in the
and
Simpson Strong-Tie has opened sales offices in the region and prepares to open
its new manufacturing facility outside of
Tie’s fourth quarter sales decreased 18.9% from the same quarter last year,
while Simpson Dura-Vent’s sales increased 16.0%. Simpson Strong-Tie’s sales to
contractor distributors, dealer distributors and home centers decreased
significantly as homebuilding continued to decline and general economic
conditions continued to worsen. Sales decreased across most of Simpson Strong-
Tie’s major product lines, particularly those used in new home construction.
Sales of Anchor Systems products as a group were up slightly as a result of
the acquisition of the Liebig companies in
distribution in
special gas vent and relining products increased. The increase in special gas
vent products and a significant component of the increase in relining products
resulted from the acquisition of ProTech Systems, Inc. (“ProTech”) in
2008
decreased as a result of several factors, including the continuing weakness in
new home construction.
Income from operations decreased 12.1% from
quarter of 2007 to
increased from 33.8% in the fourth quarter of 2007 to 35.1% in the fourth
quarter of 2008. The increase in gross margins was primarily due to lower
manufacturing and labor costs, partly offset by higher fixed overhead costs,
as a result of lower production volumes, and higher distribution costs. Steel
prices have declined from their peak in
that they may have reached bottom and does not expect them to decrease further
for the balance of the first quarter of 2009. The steel market continues to be
dynamic, however, with a high degree of uncertainty about future pricing
trends.
Research and development expenses increased 12.4% from
fourth quarter of 2007 to
increase was primarily due to a
additional personnel in the acquisitions during 2008, partly offset by an
overall reduction in other departmental overhead expenses. Selling expenses
decreased 10.5% from
million
million
expenses associated with sales and marketing personnel, most of which related
to cost cutting measures. General and administrative expenses increased 15.4%
from
fourth quarter of 2008. The increase was the result of several factors,
including: higher administrative personnel expenses of
including those at businesses acquired in 2008; higher bad debt expense of
professional service expenses of
intangible assets of
overhead expenses of
decrease in cash profit sharing of
decreased operating profit. Impairment of goodwill decreased 72.2% from
million
2008. The impairment charge taken in the fourth quarter of 2008 was associated
with assets that were acquired in
58.5% in the fourth quarter of 2008, down from 92.8% in the fourth quarter of
2007. The decrease in the effective tax rate was caused primarily by the
absence of the impairment of goodwill charge taken in the fourth quarter of
2007, the majority of which was not deductible for tax purposes. The effective
tax rate exceeded the U.S. statutory tax rate primarily as a result of
valuation allowances taken against tax benefits on foreign losses.
In 2008, sales declined throughout
of the northeastern region of the country.
had the largest decrease in sales. Sales during the year in continental
Kingdom
Simpson Dura-Vent’s sales increased 11.9%. Simpson Strong-Tie’s sales to
contractor distributors had the largest percentage rate decrease and sales to
dealer distributors and home centers also decreased. Reflecting the
deterioration of construction markets and economic conditions generally, sales
decreased across all of Simpson Strong-Tie’s major product lines, particularly
those used in new home construction. Sales of the Swan Secure product line,
acquired in
Strong-Tie’s 2008 sales. Anchor Systems sales, while down slightly, benefited
from the acquisition of the Liebig companies as well as Simpson Strong-Tie’s
increasing presence in
chimney, special gas vent and relining products increased, a significant
portion of the increase having resulted from the ProTech acquisition. Sales of
its Direct-Vent and gas vent product lines decreased as a result of several
factors, including the continuing weakness in new home construction.
Income from operations decreased 21.0% from
to 37.3% for 2008. The decrease in gross margins was primarily due to higher
distribution costs, partly offset by lower manufacturing costs.
Selling expenses increased 6.3% from
million
associated with sales and marketing personnel of
at businesses acquired since
decreases in promotional expenses of
million
International, Inc. in 2007. General and administrative expenses increased
1.4% from
of the increase were increases in administrative personnel expenses of
million
legal and professional service expenses of
expense of
increases were mostly offset by a decrease in cash profit sharing of
million
tax rate was 39.8% in 2008, down from 41.0 % in 2007. The decrease in the
effective tax rate was caused primarily by the absence of the impairment of
goodwill charge taken in the fourth quarter of 2007, the majority of which was
not deductible for tax purposes.
In
estimation software. The software provides professional deck builders, home
centers and lumber yards a simple, graphics driven, solution for designing
decks and estimating material and labor costs for the project.
Investors, analysts and other interested parties are invited to join the
Company’s conference call on
Time
simultaneously as well as being 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 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 twelve months ended
Three Months Twelve Months
(Amounts in thousands, Ended December 31, Ended December 31,
except per share data) 2008 2007 2008 2007
Net sales $149,756 $175,280 $756,499 $816,988
Cost of sales 97,251 115,986 474,190 511,499
Gross profit 52,505 59,294 282,309 305,489
Research and
development and
engineering expenses 4,951 4,405 21,327 20,115
Selling expenses 17,439 19,477 80,703 75,954
General and
administrative
expenses 22,684 19,651 89,897 88,618
Impairment of goodwill 2,964 10,666 2,964 10,666
Loss (gain) on sale
of assets (66) (60) (124) (713)
Income from
operations 4,533 5,155 87,542 110,849
Income (loss) in
equity method
investment, before
tax (486) - (486) (33)
Interest income, net 383 1,592 2,596 5,759
Income before taxes 4,430 6,747 89,652 116,575
Provision for income
taxes 2,591 6,260 35,718 47,833
Net income $1,839 $487 $53,934 $68,742
Net income per share:
Basic $0.04 $0.01 $1.11 $1.42
Diluted 0.04 0.01 1.10 1.40
Cash dividend declared
per common share $0.10 $0.10 $0.40 $0.40
Weighted average
shares outstanding:
Basic 48,763 48,539 48,636 48,472
Diluted 49,064 48,944 48,970 48,928
Other data:
Depreciation,
amortization and
Impairment of
goodwill $10,539 $17,034 $33,173 $39,115
Pre-tax stock
compensation
expense 1,107 1,719 3,823 6,333
The Company's financial position as of December 31, 2008 and 2007
(unaudited), is as follows:
December 31,
(Amounts in thousands) 2008 2007
Cash and short-term
investments $170,750 $186,142
Trade accounts receivable,
net 76,005 88,340
Inventories 251,878 218,342
Assets held for sale 8,387 9,677
Other current assets 20,577 20,376
Total current assets 527,597 522,877
Property, plant and
equipment, net 193,318 198,117
Goodwill 68,619 57,418
Other noncurrent
assets 40,666 39,267
Total assets $830,200 $817,679
Trade accounts
payable $21,675 $27,226
Line of credit and
current portion of
long-term debt 26 1,029
Other current
liabilities 50,193 56,084
Total current
liabilities 71,894 84,339
Long-term debt - -
Other long-term
liabilities 9,280 9,940
Stockholders' equity 749,026 723,400
Total liabilities and
stockholders' equity $830,200 $817,679
Simpson Manufacturing Co., Inc., headquartered in
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
SOURCE Simpson Manufacturing Co., Inc.