DUBLIN, Calif., Oct. 18 /PRNewswire/ -- Simpson Manufacturing Co., Inc. (the "Company") announced today that its 2001 third quarter net sales increased 10.5% to $111,660,531 as compared to net sales of $101,048,081 for the third quarter of 2000. Net income increased 3.8% to $12,116,915 for the third quarter of 2001 as compared to net income of $11,671,732 for the third quarter of 2000. Diluted net income per common share was $0.98 for the third quarter of 2001 as compared to $0.95 for the third quarter of 2000. For the nine months ended September 30, 2001, net sales increased 13.7% to $322,326,991 as compared to net sales of $283,489,158 for the nine months ended September 30, 2000. Net income increased 4.0% to $33,715,721 for the first nine months of 2001 as compared to net income of $32,407,458 for the first nine months of 2000. Diluted net income per common share was $2.74 for the first nine months of 2001 as compared to $2.63 for the first nine months of 2000.

In the third quarter of 2001, sales growth occurred throughout the United States, with the exception of California where sales were flat. The increases were strongest in the midwestern and southeastern region of the United States, and in Europe as a result of the acquisition of BMF Bygningsbeslag A/S ("BMF") in Denmark in January 2001. Simpson Strong-Tie's third quarter sales increased 11.4% over the same quarter last year, while Simpson Dura-Vent's sales increased 5.6%. Homecenters 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. The Anchor Systems product line had the highest percentage growth rates in sales with the addition of powder actuated tools contributing significantly. Strong-Wall sales declined during the third quarter of 2001 as compared to the third quarter of 2000. Sales of Simpson Dura-Vent's chimney and pellet vent product lines increased compared to the third quarter of 2000 while sales of its Direct-Vent products decreased.

Income from operations increased 6.9% from $18,558,291 in the third quarter of 2000 to $19,839,692 in the third quarter of 2001 and gross margins decreased from 40.6% in the third quarter of 2000 to 38.3% in the third quarter of 2001. The decrease in gross margin was primarily due to the lower margins at BMF. The acquisition of BMF also contributed to the increase in operating expenses. Selling expenses increased 6.3% from $9,806,039 in the third quarter of 2000 to $10,423,311 in the third quarter of 2001, 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. General and administrative expenses decreased 1.4% from $12,655,445 in the third quarter of 2000 to $12,477,597 in the third quarter of 2001. This decrease was primarily due to a decrease in cash profit sharing, partially offset by increased administrative costs, including those associated with the acquisition of BMF. The tax rate was 40.4% in the third quarter of 2001, a decrease from 41.2% in the third quarter of 2000.

For the first nine months of 2001, most of the overall sales growth occurred in California and in Europe as a result of the acquisition of BMF. Simpson Strong-Tie's first nine months' sales increased 15.4% over the same period last year, while Simpson Dura-Vent's sales increased 4.7%. Homecenters and contractor distributors 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. The Anchor Systems product line had the highest percentage growth rate in sales with the addition of powder actuated tools contributing significantly. The Strong-Wall product line had strong year to date growth over the first nine months of 2000 as a result of the increased sales during the first half of 2001. Sales of Simpson Dura-Vent's chimney and pellet vent product lines increased compared to the first nine months of 2000 while sales of its Direct-Vent products decreased.

Income from operations increased 7.9% from $51,177,217 in the first nine months of 2000 to $55,216,453 in the first nine months of 2001 and gross margins decreased from 40.3% in the first nine months of 2000 to 38.9% in the first nine months of 2001. The decrease in gross margin was primarily due to the lower margins at BMF. The acquisition of BMF also contributed to the increases in operating expenses. Selling expenses increased 11.7% from $28,087,648 in the first nine months of 2000 to $31,375,353 in the first nine months 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 10.9% from $34,950,828 in the first nine months of 2000 to $38,746,495 in the first nine months of 2001. This increase was due in part to a non-cash charge to write-off the remaining Keybuilder.com software license in the second quarter of 2001, additional administrative personnel and higher costs associated with the acquisitions of BMF, Anchor Tiedown Systems and Masterset Fastening Systems, Inc. Partially offsetting this increase was a decrease in cash profit sharing. The tax rate was 41.5% in the first nine months of 2001, an increase from 41.0% in the first nine months of 2000.

In August 2001, the German subsidiary of BMF purchased the remaining 51% stake in Bulldog-Simpson GmbH for approximately $600,000 in cash.

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 $588,455 as of September 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 nine months ended September 30, 2001, was immaterial.

Investors, analysts and other interested parties are invited to join the Company's conference call on October 19, 2001, at 6:00 am, Pacific Time. To participate, callers may dial 888-214-7575. The call will be webcast simultaneously as well as being available for approximately one month at www.streetfusion.com (reservation #19744888) 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 nine months ended September 30, 2001 and 2000, are as follows:

                              Three Months               Nine Months
                          Ended September 30,        Ended September 30,
                              (Unaudited)               (Unaudited)
                          2001          2000          2001         2000

    Net sales         $111,660,531  $101,048,081 $322,326,991  $283,489,158
    Cost of sales       68,919,931    60,028,306  196,988,690   169,273,465
     Gross profit       42,740,600    41,019,775  125,338,301   114,215,693

    Selling expenses    10,423,311     9,806,039   31,375,353    28,087,648
    General and
     administrative
     expenses           12,477,597    12,655,445   38,746,495    34,950,828

    Income from
     operations         19,839,692    18,558,291   55,216,453    51,177,217

    Interest income,
     net                   447,919       826,865    1,202,431     2,094,048
    Income before
     taxes              20,287,611    19,385,156   56,418,884    53,271,265

    Provision for
     income taxes        8,190,621     7,987,432   23,432,014    21,828,652
    Minority Interest     (19,925)     (274,008)    (728,851)     (964,845)
     Net income        $12,116,915   $11,671,732  $33,715,721   $32,407,458

    Net income
     per share:
     Basic                   $1.00         $0.97        $2.79         $2.69
     Diluted                 $0.98         $0.95        $2.74         $2.63

    Weighted average
     shares
     outstanding:
     Basic              12,133,872    12,048,205   12,090,601    12,037,015
     Diluted            12,349,727    12,335,196   12,309,147    12,311,193

    Other data:
     Depreciation
      and
      amortization      $3,481,412    $3,490,202  $12,177,279   $10,030,929

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

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

    Cash and short-term
     investments                $82,386,649     $62,849,064   $59,417,658
    Trade accounts
     receivable, net             60,413,680      52,136,543    45,584,186
    Inventories                  85,952,350      79,318,287    85,269,695
    Other current assets          7,847,256       8,209,501    10,460,108
      Total current assets      236,599,935     202,513,395   200,731,647

    Property, plant and
     equipment, net              79,694,693      59,905,593    63,822,513
    Other noncurrent assets      19,535,182      14,671,477    15,015,393
      Total assets             $335,829,810    $277,090,465  $279,569,553

    Trade accounts payable      $14,983,984     $14,167,506   $14,630,941
    Notes payable and
     current portion of
     long-term debt               1,177,881         332,563       335,754
    Other current
     liabilities                 31,556,042      20,057,024    17,756,874
      Total current
       liabilities               47,717,907      34,557,093    32,723,569

    Long-term debt                6,004,330       2,219,512     2,069,028
    Other liabilities               100,000         357,630       341,600
    Minority interest                25,427       1,035,155       754,278
    Stockholders' equity        281,982,146     238,921,075   243,681,078
      Total liabilities
       and stockholders'
       equity                  $335,829,810    $277,090,465  $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 925-560-9032.