DUBLIN, Calif., July 19 /PRNewswire/ -- Simpson Manufacturing Co., Inc. (the "Company") announced today that its 2001 second quarter net sales increased 18.4% to $115,842,506 as compared to net sales of $97,825,539 for the second quarter of 2000. Net income increased 10.2% to $12,618,652 for the second quarter of 2001 as compared to net income of $11,447,278 for the second quarter of 2000. Diluted net income per common share was $1.03 for the second quarter of 2001 as compared to $0.93 for the second quarter of 2000. For the six months ended June 30, 2001, net sales increased 15.5% to $210,666,459 as compared to net sales of $182,441,078 for the six months ended June 30, 2000. Net income increased 4.2% to $21,598,806 for the first six months of 2001 as compared to net income of $20,735,726 for the first six months of 2000. Diluted net income per common share was $1.76 for the first six months of 2001 as compared to $1.69 for the first six months of 2000.

The sales growth occurred throughout the United States, particularly in California and in the southeastern region of the country, as well as in Europe as a result of the acquisition of BMF Bygningsbeslag A/S ("BMF") in Denmark in January 2001. Simpson Strong-Tie's second quarter sales increased 20.6% over the same quarter last year, while Simpson Dura-Vent's sales increased 6.0%. Contractor distributors and homecenters were the fastest growing Simpson Strong-Tie connector sales channels. 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 chimney and pellet vent product lines increased compared to the second quarter of 2000 while sales of its Direct-Vent products decreased.

Income from operations increased 16.3% from $17,983,997 in the second quarter of 2000 to $20,913,401 in the second quarter of 2001 and gross margins decreased from 40.2% in the second quarter of 2000 to 39.2% in the second quarter of 2001. The decrease in gross margin was primarily due to the lower margins associated with the acquisition of BMF. The acquisition of BMF also contributed to the increase in operating expenses. Selling expenses increased 4.6% from $9,728,488 in the second quarter of 2000 to $10,172,994 in the second quarter of 2001. The increase was primarily due to higher personnel costs related to the increase in the number of sales and merchandising personnel. General and administrative expenses increased 23.4% from $11,647,056 in the second quarter of 2000 to $14,374,917 in the second quarter of 2001. This increase was due in part to a non-cash charge to write off the remaining Keybuilder.com software license, additional administrative personnel and higher administrative costs, including those associated with the acquisitions of Anchor Tiedown Systems ("ATS") and Masterset Fastening Systems, Inc. ("Masterset"). The tax rate was 42.4% in the second quarter of 2001, an increase from 41.1% in the second quarter of 2000.

For the first half of 2001, most of the sales growth occurred in California and in Europe as a result of the acquisition of BMF. Simpson Strong-Tie's first half sales increased 17.6% over the same period last year, while Simpson Dura-Vent's sales increased 4.2%. Contractor distributors were the fastest growing Simpson 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 chimney and pellet vent product lines increased compared to the first half of 2000 while sales of its Direct-Vent products decreased.

Income from operations increased 8.5% from $32,618,926 in the first half of 2000 to $35,376,760 in the first half of 2001 and gross margins decreased from 40.1% in the first half of 2000 to 39.2% in the first half of 2001. The decrease in gross margin was primarily due to the lower margins associated with BMF. The acquisition of BMF also contributed to the increases in operating expenses. Selling expenses increased 14.6% from $18,281,610 in the first half of 2000 to $20,952,043 in the first half of 2001. The increase was primarily due to higher personnel costs related to the increase in the number of sales and merchandising personnel, including those associated with the Anchoring Systems product line, as well as increased promotional expenses. General and administrative expenses increased 17.8% from $22,295,382 in the first half of 2000 to $26,268,897 in the first half of 2001. This increase was due in part to a non-cash charge to write-off the remaining Keybuilder.com software license, additional administrative personnel and higher administrative costs, including those associated with the acquisitions of ATS and Masterset. Partially offsetting this increase was a decrease in cash profit sharing. The tax rate was 42.2% in the first half of 2001, an increase from 40.8% in the first half of 2000.

Effective January 1, 2001, the Company changed its method of valuing inventories from 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 $795,023 as of June 30, 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 and six months ended June 30, 2001, was immaterial.

Investors, analysts and other interested parties are invited to join the Company's conference call on July 20, 2001, at 6:00 am, Pacific Time. To participate, callers may dial +1-800-492-7568. The call will be webcast simultaneously as well as being available for one month at www.themeetingson.com (reservation #19171402) or through a link on the Company's website at www.simpsonmfg.com.

This document may contain forward-looking statements, based on numerous assumptions and subject to risks and uncertainties. Although the Company feels 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 be substantially different 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) manufacturing costs; (iv) the financial condition of customers, competitors and suppliers; (v) technological developments; (vi) increased competition; (vii) changes in capital market conditions; (viii) governmental and business conditions in countries where the Company's products are manufactured and sold; (ix) changes in trade regulations; (x) the effect of acquisition activity; (xi) changes in the Company's plans, strategies, objectives, expectations or intentions, which may happen at any time in the discretion of the Company; and (xii) other risks and uncertainties indicated from time to time in the Company's filings with the Securities and Exchange Commission. 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 six months ended June 30, 2001 and 2000, are as follows:

                              Three Months                Six Months
                             Ended June 30,             Ended June 30,
                               (Unaudited)               (Unaudited)
                            2001         2000         2001          2000

    Net sales         $115,842,506   $97,825,539 $210,666,459  $182,441,078
    Cost of sales       70,381,194    58,465,998  128,068,759   109,245,160
     Gross profit       45,461,312    39,359,541   82,597,700    73,195,918

    Selling expenses    10,172,994     9,728,488   20,952,043    18,281,610
    General and
     administrative
     expenses           14,374,917    11,647,056   26,268,897    22,295,382

     Income from
      operations        20,913,401    17,983,997   35,376,760    32,618,926

    Interest income,
     net                   294,236       623,308      754,513     1,267,183
     Income before
      taxes             21,207,637    18,607,305   36,131,273    33,886,109

    Provision for
     income taxes        9,000,507     7,654,904   15,241,393    13,841,220
    Minority Interest    (411,522)     (494,877)    (708,926)     (690,837)
     Net income        $12,618,652   $11,447,278  $21,598,806   $20,735,726

    Net income per share:
     Basic                   $1.04         $0.95        $1.79         $1.72
     Diluted                 $1.03         $0.93        $1.76         $1.69

    Weighted average
     shares outstanding:
     Basic              12,098,309    12,042,289   12,068,607    12,031,367
     Diluted            12,299,867    12,318,850   12,290,647    12,300,179

    Other data:
     Depreciation and
      amortization      $4,634,371    $3,292,087   $8,695,868    $6,540,727

The Company's financial position as of June 30, 2001 and 2000, and December 31, 2000, is as follows:

                                          June 30,
                                         (Unaudited)          December 31,
                                   2001             2000          2000

    Cash and short-term
     investments                $47,002,814     $52,719,098   $59,417,658
    Trade accounts receivable,
     net                         69,795,769      57,796,725    45,584,186
    Inventories                  88,655,208      77,688,134    85,269,695
    Other current assets          8,106,442       8,210,643    10,460,108
      Total current assets      213,560,233     196,414,600   200,731,647

    Property, plant and
     equipment, net              79,206,288      60,525,647    63,822,513
    Other noncurrent assets      20,764,289      11,990,678    15,015,393
      Total assets             $313,530,810    $268,930,925  $279,569,553

    Trade accounts payable       16,091,706      14,167,384   $14,630,941
    Notes payable and current
     portion of long-term debt    1,874,288         479,854       335,754
    Other current liabilities    22,951,655      20,081,330    17,756,874
      Total current
       liabilities               40,917,649      34,728,568    32,723,569

    Long-term debt                4,596,592       2,238,300     2,069,028
    Other liabilities               177,355         388,465       341,600
    Minority interest                45,352       1,309,163       754,278
    Stockholders' equity        267,793,862     230,266,429   243,681,078
     Total liabilities and
      stockholders' equity     $313,530,810    $268,930,925  $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."

For further information, contact Barclay Simpson at +1-925-560-9032.