DUBLIN, Calif., Oct. 17 /PRNewswire-FirstCall/ -- Simpson Manufacturing Co., Inc. (NYSE: SSD) (the "Company") announced today that its 2002 third quarter net sales increased 16.7% to $130,292,752 as compared to net sales of $111,660,531 for the third quarter of 2001. Net income increased 37.9% to $16,715,142 for the third quarter of 2002 as compared to net income of $12,116,915 for the third quarter of 2001. Diluted net income per common share was $0.67 for the third quarter of 2002 as compared to $0.49 for the third quarter of 2001. For the nine months ended September 30, 2002, net sales increased 10.7% to $356,814,317 as compared to net sales of $322,326,991 for the nine months ended September 30, 2001. Net income increased 22.6% to $41,336,683 for the first nine months of 2002 as compared to net income of $33,715,721 for the first nine months of 2001. Diluted net income per common share was $1.67 for the first nine months of 2002 as compared to $1.37 for the first nine months of 2001.

In the third quarter of 2002, sales growth occurred throughout North America and Europe. The growth in the United States was strongest in the Southern and Eastern portion of the country, as well as California. Simpson Strong-Tie's third quarter sales increased 19.5% over the same quarter last year, while Simpson Dura-Vent's sales increased 1.6%. Lumber dealers and both dealer 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. Simpson Strong-Tie's Strong-Wall, seismic and high wind related products had the highest percentage growth rates in sales. Sales of Simpson Dura-Vent's Direct-Vent products increased compared to the third quarter of 2001 while sales of its pellet vent and chimney product lines decreased. Simpson Dura-Vent has been informed by a significant customer that the customer plans to supply certain venting products from internal sources beginning in mid 2003. Sales of the affected products to this customer were approximately $6.0 million in 2001.

Income from operations increased 38.4% from $19,839,692 in the third quarter of 2001 to $27,467,814 in the third quarter of 2002 and gross margins increased from 38.3% in the third quarter of 2001 to 42.7% in the third quarter of 2002. The increase in gross margins was primarily due to lower manufacturing costs. In addition, the European operations as a whole made a positive contribution to the Company's operating income for the second straight quarter. Selling expenses increased less than one percent from $10,423,311 in the third quarter of 2001 to $10,510,011 in the third quarter of 2002, primarily due to increased sales commissions as a result of sales in excess of goals, partially offset by decreased spending on advertising and promotions. General and administrative expenses increased 42.0% from $12,477,597 in the third quarter of 2001 to $17,718,054 in the third quarter of 2002. This increase was primarily due to higher cash profit sharing, as a result of higher operating income, and other administrative overhead costs, partially offset by a reduction in goodwill amortization charges as a result of the change in accounting related to the adoption of FASB No. 142 at the start of 2002. The tax rate was 39.6% in the third quarter of 2002, a decrease from 40.4% in the third quarter of 2001.

In the first nine months of 2002, sales growth occurred throughout North America and Europe. The growth in the United States was strongest in the Southern and Eastern portion of the country, as well as California. Simpson Strong-Tie's first nine months' sales increased 12.3% over the same period last year, while Simpson Dura-Vent's first nine months' sales increased 1.4%. Lumber dealers and both dealer 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. Simpson Strong-Tie's Strong-Wall, seismic and high wind related products had the highest percentage growth rates in sales. Sales of Simpson Dura-Vent's Direct-Vent products increased compared to the first nine months of the prior year, while sales of its pellet vent, chimney and gas vent product lines decreased.

Income from operations increased 23.9% from $55,216,453 in the first nine months of 2001 to $68,432,655 in the first nine months of 2002 and gross margins increased from 38.9% in the first nine months of 2001 to 41.1% in the first nine months of 2002. The increase in gross margins was primarily due to lower manufacturing costs. In addition, the European operations as a whole made a positive contribution to the Company's operating income. Selling expenses increased 2.5% from $31,375,353 in the first nine months of 2001 to $32,173,275 in the first nine months of 2002, primarily due to increased sales commissions as a result of sales in excess of goals and other personnel costs, partially offset by decreased spending on advertising and promotion. General and administrative expenses increased 18.5% from $38,746,495 in the first nine months of 2001 to $45,924,023 in the first nine months of 2002. This increase was primarily due to higher cash profit sharing, as a result of higher operating income, and other administrative overhead costs, partially offset by a reduction in goodwill amortization charges. The reduced amortization charge was affected by both the write-off of the Keybuilder.com software license in the second quarter of 2001 and the change in accounting related to the adoption of FASB No. 142 at the start of 2002. In addition, there was a reduction in the bad debt reserve related to a significant customer, as substantially all of the overdue receivables were recovered. The tax rate was 40.2% in the first nine months of 2002, a decrease from 41.5% in the first nine months of 2001.

In August 2002, the Company's Board of Directors approved the adoption of FASB No. 123, "Accounting for Stock-Based Compensation" beginning in 2003. This will change how the Company accounts for stock options by incurring an expense when a stock option is granted. Also in August 2002, the Company completed a 2-for-1 split of its common stock. All of the per share numbers have been adjusted to reflect the stock split.

Investors, analysts and other interested parties are invited to join the Company's conference call on October 18, 2002, at 6:00 am, Pacific Time. To participate, callers may dial 800-451-7724. The call will be webcast simultaneously as well as being available for approximately 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 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) materials and 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; and (xii) other risks and uncertainties indicated from time to time in the Company's filings with the 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 nine months ended September 30, 2002 and 2001, are as follows:

                                Three Months               Nine Months
                            Ended September 30,        Ended September 30,
                                 (Unaudited)               (Unaudited)
                             2002          2001         2002         2001

    Net sales            $130,292,752 $111,660,531  $356,814,317  $322,326,991
    Cost of sales          74,596,873   68,919,931   210,284,364  196,988,690
      Gross profit         55,695,879   42,740,600   146,529,953  125,338,301

    Selling expenses       10,510,011   10,423,311    32,173,275   31,375,353
    General and
     administrative
     expenses              17,718,054   12,477,597    45,924,023   38,746,495

      Income from
       operations          27,467,814   19,839,692    68,432,655   55,216,453

    Interest income, net      218,579      447,919       693,310    1,202,431
      Income before
       taxes               27,686,393   20,287,611    69,125,965   56,418,884

    Provision for
     income taxes          10,971,251    8,190,621    27,789,282   23,432,014
    Minority interest              --     (19,925)            --    (728,851)
      Net income          $16,715,142  $12,116,915   $41,336,683  $33,715,721

    Net income per share:
      Basic                     $0.68        $0.50         $1.69        $1.39
      Diluted                   $0.67        $0.49         $1.67        $1.37

    Weighted average
     shares outstanding:
      Basic                24,500,445   24,267,744    24,445,550   24,181,202
      Diluted              24,811,435   24,699,454    24,782,151   24,618,294

    Other data:
      Depreciation
       and amortization    $3,878,187   $3,481,412   $11,232,051  $12,177,279

The Company's financial position as of September 30, 2002 and 2001, and December 31, 2001, is as follows:

                                            September 30,        December 31,
                                             (Unaudited)
                                           2002         2001         2001

    Cash and short-term investments   $115,069,989   $82,386,649  $95,871,950
    Trade accounts receivable, net      71,797,232    60,413,680   42,614,410
    Inventories                         88,959,586    85,952,350   82,476,299
    Other current assets                 9,242,078     7,847,256    9,006,102
      Total current assets             285,068,885   236,599,935  229,968,761

    Property, plant and
     equipment, net                     89,914,143    79,694,693   81,410,301
    Other noncurrent assets             19,342,440    19,535,182   18,232,988
      Total assets                    $394,325,468  $335,829,810  $329,612,050

    Trade accounts payable             $19,973,306   $14,983,984  $15,738,659
    Notes payable and current
     portion of long-term debt           1,469,176     1,177,881      986,448
    Other current liabilities           31,834,304    31,556,042   18,982,843
      Total current liabilities         53,276,786    47,717,907   35,707,950

    Long-term debt                       5,360,514     6,004,330    5,686,995
    Other liabilities                           --       100,000      100,000
    Minority interest                           --        25,427           --
    Stockholders' equity               335,688,168   281,982,146  288,117,105
      Total liabilities and
       stockholders' equity           $394,325,468  $335,829,810  $329,612,050

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.