Simpson Manufacturing
Co., Inc.
Announces Third Quarter
Earnings
PLEASANTON, Calif., Oct. 19 /PRNewswire/
-- Simpson Manufacturing Co.,
Inc. (the
``Company'') (NYSE: SSD
- news) announced today that
its 2000
third quarter net
income increased 3.1% to $11,465,164 on net sales of
$101,048,081 as
compared to net income of $11,116,527 on net sales of
$88,807,636 for the
third quarter of 1999. Diluted net income per common
share was $0.93 for
the third quarter of 2000 as compared to $0.90 for
the third quarter of
1999. For the nine months ended September 30, 2000,
net income increased
11.2% to $32,065,110 on sales of $283,489,158, while
for the same period
in the prior year the Company had net income of
$28,837,686 on sales
of $247,221,970. Diluted net income per common
share was $2.60 for
the first nine months of 2000 as compared to $2.36
for the first nine
months of 1999.
Net sales increased 13.8% in the third
quarter of 2000 as compared
to the third quarter
of 1999. Most of the sales growth occurred
domestically,
particularly in California. Simpson Strong-Tie's third
quarter sales
increased 18.2% over the same quarter last year, while
Simpson Dura-Vent's
sales decreased 4.4%. Contractor distributors and
homecenters were the
fastest growing 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
and gas vent product
lines decreased compared to the third quarter of
1999, while sales of
its other product lines, chimney and pellet vent
product lines
increased. Based on a report by the Energy Information
Administration in
October 2000, this shift, particularly in the
Northeastern region
of the United States, may be partially attributable
to the effects of
increased natural gas and heating oil prices on demand
for wood burning
appliances.
Income from operations increased 1.0%
from $18,047,829 in the
third quarter of
1999 to $18,216,291 in the third quarter of 2000
primarily as a
result of the increased sales offset by lower gross
margins. Gross
margins decreased from 41.0% in the third quarter of
1999 to 40.3% in the
third quarter of 2000 primarily due to a LIFO
charge in the third
quarter of 2000 compared to a credit in the third
quarter of 1999. The
charge was offset slightly by better absorption
of fixed overhead
costs as a result of increased production. Selling
expenses increased
20.7% from $8,123,050 in the third quarter of 1999
to $9,806,039 in the
third quarter of 2000. The increase was primarily
due to higher
personnel costs related to the increase in the number
of sales and
merchandising personnel, particularly those associated
with selling the
Anchoring Systems product line, and increased
promotional
expenses. General and administrative expenses increased
23.1% from $10,278,192
in the third quarter of 1999 to $12,655,445 in
the third quarter of
2000 primarily due to increased cash profit sharing
expenses resulting
from higher operating income, and higher personnel
and other
administrative overhead costs, including costs associated with
the operation of
Keybuilder.com LLC (``Keybuilder.com''), the Company's
joint venture with
Keymark Enterprises, Inc., (``Keymark'') and those
associated with the
acquisition of Anchor Tiedown Systems (``ATS'').
The stated tax rate
was 41.2%, yielding an effective tax rate of 40.7%
after considering
the effect of Keymark's minority interest in
Keybuilder.com, in
the third quarter of 2000, an increase from 40.0%
in the third quarter
of 1999.
Net sales increased 14.7% in the first
nine months of 2000 as
compared to the
first nine months of 1999. Most of the sales growth
occurred
domestically, particularly in California. International sales
contributed to the
increase, due in part to the acquisition of Furfix
in the third quarter
of 1999. Simpson Strong-Tie's first nine months
sales increased
18.7% over the same period last year, while Simpson
Dura-Vent's sales
decreased 2.4%. Contractor distributors and homecenters
were the fastest
growing 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.
Simpson Dura-Vent's year-to-date sales of gas vent
products declined as
compared to the first nine months of 1999, while
sales of its
Direct-Vent product line increased slightly, despite the
decline in the third
quarter of 2000.
Income from operations increased 7.5%
from $47,099,443 in the
first nine months of
1999 to $50,622,216 in the first nine months of
2000 primarily as a
result of higher sales. Gross margins decreased
slightly from 40.3%
in the first nine months of 1999 to 40.1% in the
first nine months of
2000 primarily due to a LIFO charge in 2000
compared to a credit
in 1999 and increased production costs. These
charges were offset
by better absorption of fixed overhead costs as
a result of
increased production. Selling expenses increased 16.7%
from $24,062,580 in
the first nine months of 1999 to $28,087,648 in
the first nine
months of 2000. The increase was primarily due to higher
personnel costs
related to the increase in the number of sales and
merchandising
personnel, particularly those associated with selling
the Anchoring
Systems product line, as well as increased promotional
expenses. General
and administrative expenses increased 23.1% from
$28,399,663 in the
first nine months of 1999 to $34,950,828 in the
first nine months of
2000 primarily due to increased cash profit
sharing expenses
resulting from higher operating income, and higher
personnel and other
administrative overhead costs, including costs
associated with the
operation of Keybuilder.com and the acquisitions
of Furfix and ATS.
The stated tax rate was 41.0%, yielding an
effective tax rate
of 40.3% after considering the effect of Keymark's
minority interest in
Keybuilder.com, in the first nine months of
2000, an increase
from 40.1% in the first nine months of 1999.
In October 2000, the Board of Directors
authorized the Company,
for a period of one
year, to buy back up to $35,000,000 of the
Company's common
stock. This replaces the authorization from late
last year when the
Board of Directors authorized a buy back of up
to $10,000,000.
Investors, analysts and other interested
parties are invited to
join the Company's
conference call on October 20, 2000, at 6:00 am,
Pacific Time. To
participate, callers may dial 888-343-2180. The call
will be webcast
simultaneously as well as being available for one month
at www.themeetingson.com (reservation
#16436565) or through a link on
the Company's
website at www.simpsonmfg.com.
The Company's results of operations for
the three and nine months
ended September 30,
2000 and 1999, are as follows:
Three
Months Nine Months
Ended September
30, Ended September 30,
(Unaudited)
(Unaudited)
2000 1999 2000
1999
------------ ------------ ------------
------------
Net sales $101,048,081 $ 88,807,636 $283,489,158 $247,221,970
Cost of sales 60,370,306 52,358,565 169,828,466 147,660,284
------------ ------------ ------------
------------
Gross profit 40,677,775 36,449,071 113,660,692 99,561,686
Selling expenses 9,806,039 8,123,050
28,087,648 24,062,580
General and
administrative
expenses 12,655,445 10,278,192 34,950,828 28,399,663
------------ ------------ ------------
------------
Income from
operations 18,216,291 18,047,829
50,622,216 47,099,443
Interest income,
net 826,865
476,698 2,094,049
1,080,243
------------ ------------ ------------
------------
Income before
taxes 19,043,156 18,524,527 52,716,265
48,179,686
Provision for
income taxes 7,852,000 7,408,000 21,616,000 19,342,000
Minority Interest (274,008) --
(964,845) --
------------
------------ ------------ ------------
Net income $ 11,465,164 $ 11,116,527 $ 32,065,110 $ 28,837,686
============ ============ ============
============
Net income per share:
Basic
$0.95 $0.93 $2.66 $2.45
Diluted $0.93
$0.90 $2.60 $2.36
Weighted average shares
outstanding:
Basic 12,048,205 11,968,123 12,037,015
11,777,481
Diluted 12,335,196 12,311,909 12,311,193 12,218,050
Other data:
Depreciation and
amortization $ 3,490,202 $ 2,985,135
$ 10,030,929 $ 8,148,734
The
Company's financial position as of September 30, 2000 and 1999,
and
December 31, 1999, is as follows:
September 30,
(Unaudited)
December 31,
2000 1999 1999
------------ ------------ ------------
Cash and short-term
investments $ 62,849,064
$ 44,174,362 $ 54,509,610
Trade accounts
receivable, net 52,136,543 50,461,040 42,420,223
Inventories 80,284,287 68,867,778 72,751,245
Other current assets 7,831,956 5,905,694 6,068,749
------------ ------------ ------------
Total current assets 203,101,850 169,408,874 175,749,827
------------ ------------ ------------
Property, plant
and equipment, net 59,905,593 60,024,345 61,143,524
Other noncurrent assets 14,671,477
10,837,821 10,360,642
------------ ------------ ------------
Total assets $277,678,920 $240,271,040 $247,253,993
============
============ ============
Trade accounts payable $ 14,167,506 $14,637,458 $ 12,780,621
Notes payable and
current portion of
long-term debt 332,563 300,000 349,541
Other current liabilities 20,057,024 20,907,357 20,563,320
------------ ------------ ------------
Total current liabilities 34,557,093 35,844,815 33,693,482
------------ ------------ ------------
Long-term debt 2,219,512 2,584,345 2,414,562
Other liabilities 357,630 621,840 556,783
Minority Interest 1,035,155 -- --
Stockholders' equity 239,509,530 201,220,040 210,589,166
------------ ------------ ------------
Total liabilities and
stockholders' equity $277,678,920 $240,271,040 $247,253,993
============
============ ============
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 through its 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 925-738-9032 through
Friday, October 27,
2000, and after October 31, 2000, at 925-560-9032.