SIMPSON MANUFACTURING CO., INC.
ANNOUNCES FIRST QUARTER EARNINGS
DUBLIN, Calif. -- Simpson Manufacturing Co., Inc. (the "Company") announced today that its 2001 first quarter net sales increased 12.1% to $94,823,953 as compared to net sales of $84,615,539 for the first quarter of 2000. Net income decreased 3.3% to $8,980,155 for the first quarter of 2001 as compared to net income of $9,288,448 for the first quarter of 2000. Diluted net income per common share was $0.73 for the first quarter of 2001 as compared to $0.76 for the first quarter of 2000.
Most of the sales growth occurred in California and as a result of the acquisition of BMF Bygningsbeslag A/S ("BMF") in Denmark in January 2001. Simpson Strong-Tie's first quarter sales increased 14.1% over the same quarter last year, while Simpson Dura-Vent's sales increased 2.5%. Contractor distributors were the fastest growing Strong-Tie connector sales channel. The sales increase was broad based across most of Simpson Strong-Tie's major product lines. Strong-Wall and Anchor Systems product lines had the highest growth rates in sales. Sales of Simpson Dura-Vent's Direct-Vent products decreased compared to the first quarter of 2000, while sales of its chimney and pellet vent product lines increased.
Income from operations decreased 1.2% from $14,634,929 in the first quarter of 2000 to $14,463,359 in the first quarter of 2001 and gross margins decreased from 40.0% in the first quarter of 2000 to 39.2% in the first quarter of 2001. The decrease in gross margin was primarily due to the lower margins associated with BMF as well as higher fixed overhead costs. Selling expenses increased 26.0% from $8,553,122 in the first quarter of 2000 to $10,779,049 in the first quarter of 2001. The increase was primarily due to higher personnel costs related to the increase in the number of sales and merchandising personnel, particularly the additional sales personnel at BMF and those associated with the Anchoring Systems product line, as well as increased promotional expenses. General and administrative expenses increased 11.7% from $10,648,327 in the first quarter of 2000 to $11,893,980 in the first quarter of 2001. This increase was primarily due to the addition of administrative personnel and higher administrative costs related to the acquisition of BMF, Anchor Tiedown Systems in the third quarter of 2000, Masterset Fastening Systems, Inc. in the fourth quarter of 2000, and the operations of Keybuilder.com, LLC. Partially offsetting this increase was a decrease in cash profit sharing. The tax rate was 41.8% in the first quarter of 2001, an increase from 40.5% in the first quarter of 2000.
Effective January 1, 2001, the Company changed its method of valuing inventories form the last-in, first-out (LIFO) method to the first-in, first-out (FIFO) method. All inventories are now costed using the FIFO method. The Company believes that the new method is preferable because the FIFO method of valuing inventory more closely matches current costs and revenues. The Company has applied this change retroactively by restating its financial statements as required by Accounting Principles Board No. 20, "Accounting Changes," which has resulted in a one time decrease in previously reported retained earnings of $900,119 as of March 31, 2000, and a one time increase in previously reported retained earnings of $89,837 as of December 31, 2000. The effect of the change in accounting principle for the three months ended March 31, 2001, was immaterial.
Investors, analysts and other interested parties are invited to join the Company's conference call on April 20, 2001, at 6:00 a.m., Pacific Time. To participate, callers may dial 800-680-1386. The call will be webcast simultaneously as well as being available for one month at www.themeetingson.com (reservation #18391251) or through a link on the Company's website at www.simpsonmfg.com.
The Company's results of operations
for the three months ended March 31, 2001 and 2000, are as follows:
Three Months Ended March 31, (Unaudited) 2001 2000 Net sales $94,823,953 $84,615,539 Cost of sales 57,687,565 50,779,161 Gross profit 37,136,388 33,836,378 Selling expenses 10,779,049 8,553,122 General and administrative expenses 11,893,980 10,648,327 Income from operations 14,463,359 14,634,929 Interest income, net 460,277 643,875 Income before taxes 14,923,636 15,278,804 Provision for income taxes 6,240,886 6,186,316 Minority Interest (297,405) (195,960) Net income $8,980,155 $9,288,448 Net income per share: Basic $0.75 $0.77 Diluted $0.73 $0.76 Weighted average shares outstanding: Basic 12,037,073 12,020,446 Diluted 12,277,485 12,277,453 Other data: Depreciation and amortization $4,061,496 $3,248,640
The Company's financial position as of March 31, 2001 and 2000, and December 31, 2000, is as follows:
March 31, (Unaudited) December 31, 2001 2000 2000 Cash and short-term investments $41,784,481 $45,551,211 $59,417,658 Trade accounts receivable, net 58,975,024 52,893,480 45,584,186 Inventories 93,635,319 76,898,347 85,269,695 Other current assets 9,768,410 7,840,496 10,460,108 Total current assets 204,163,234 183,183,534 200,731,647 Property, plant and equipment, net 69,648,429 60,662,207 63,822,513 Other noncurrent assets 23,756,754 12,619,316 15,015,393 Total assets $297,568,417 $256,465,057 $279,569,553 Trade accounts payable 13,207,540 10,192,763 $14,630,941 Notes payable and current portion of long-term debt 2,866,842 487,549 335,754 Other current liabilities 22,072,399 22,309,034 17,756,874 Total current liabilities 38,146,781 32,989,346 32,723,569 Long-term debt 4,565,881 2,398,651 2,069,028 Other liabilities 206,372 423,932 341,600 Minority interest 456,874 1,804,040 754,278 Stockholders' equity 254,192,509 218,849,088 243,681,078 Total liabilities and stockholders' equity $297,568,417 $256,465,057 $279,569,553
Simpson Manufacturing Co., Inc., headquartered in Dublin, 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 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."
CONTACT: Barclay Simpson of Simpson Manufacturing Co., Inc., 925-560-9032.
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