Simpson Manufacturing
Co., Inc.
Announces Fourth Quarter Earnings
DUBLIN, Calif., Jan. 25 /PRNewswire/ -- Simpson Manufacturing Co., Inc.
(NYSE: SSD)(the "Company") announced today that its 2000 fourth quarter net
income decreased 34.7% to $6,288,993 on net sales of $85,598,655 as compared to net income of $9,629,707 on net sales of $81,217,927 for the fourth quarter of 1999. Diluted net income per common share was $0.51 for the fourth quarter of 2000 as compared to $0.78 for the fourth quarter of 1999. For the year ended December 31, 2000, net income decreased 0.3% to $38,354,103 on sales of $369,087,813, while the Company had net income of $38,467,392 on sales of $328,439,897 in 1999. Diluted net income per common share was $3.12 in 2000 as compared to $3.14 in 1999. Net sales increased 5.4% in the fourth quarter of 2000 as compared to the fourth quarter of 1999. Most of the sales growth occurred domestically, particularly in California. Simpson Strong-Tie's fourth quarter sales increased 8.9% over the same quarter last year, while Simpson Dura-Vent's sales decreased 5.1%. Contractor distributors and homecenters were the fastest growing 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 Direct-Vent, gas vent and chimney product lines decreased compared to the fourth quarter of 1999, while sales of pellet vent products increased. Income from operations decreased 41.0% from $15,451,707 in the fourth quarter of 1999 to $9,115,190 in the fourth quarter of 2000 and gross margins decreased from 40.7% in the fourth quarter of 1999 to 32.9% in the fourth quarter of 2000. The decrease in gross margin was primarily due to a LIFO charge of approximately $1.1 million in the fourth quarter of 2000 compared to a LIFO gain of approximately $0.9 million in the fourth quarter of 1999. In addition, Simpson Strong-Tie increased its reserve for slow moving inventory by approximately $1.8 million related to its Anchoring Systems and Color Systems products. Also contributing were startup costs at Simpson Strong-Tie's Northern California Strongwall production facility in Manteca, California. Selling expenses increased 14.5% from $8,141,429 in the fourth quarter of 1999 to $9,322,309 in the fourth 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 2.5% from $9,445,815 in the fourth quarter of 1999 to $9,683,137 in the fourth quarter of 2000. General and administrative expenses decreased as a percentage of sales primarily due to lower cash profit sharing expenses resulting from decreased operating income. Offsetting this decrease in cash profit sharing were increases in 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") and Masterset Fastening Systems, Inc. ("Masterset"). The tax rate was 40.1% in the fourth quarter of 2000, a slight increase from 40.0% in the fourth quarter of 1999. Net sales increased 12.4% in 2000 as compared to the prior year. Most of the sales growth occurred domestically, particularly in California. International sales contributed to the annual increase, due in part to the acquisition of Furfix in the third quarter of 1999. Simpson Strong-Tie's 2000 sales increased 16.4% over the same period last year, while Simpson Dura-Vent's sales decreased 3.2%. 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. With the exception of pellet vent products, sales in 2000 of all of Simpson Dura-Vent's major product lines declined compared to 1999. Income from operations decreased 4.5% from $62,551,149 in 1999 to $59,737,407 in 2000 and gross margins decreased from 40.4% in 1999 to 38.4% in 2000 primarily due to a LIFO charge of approximately $1.7 million in 2000, compared to a LIFO gain of approximately $1.8 million in 1999, as well as increased costs related to the slow moving inventory reserves. These charges were offset slightly by better absorption of fixed overhead costs as a result of increased production. Selling expenses increased 16.2% from $32,204,008 in 1999 to $37,409,957 in 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 17.9% from $37,845,480 in 1999 to $44,633,965 in 2000 primarily due to higher personnel and other administrative overhead costs, including costs associated with the operation of Keybuilder.com and the acquisitions of Furfix, ATS and Masterset. Cash profit sharing expenses increased relative to 1999 as a result of higher operating income through the third quarter of 2000. The tax rate was 40.9% in 2000, an increase from 40.1% in 1999. In December 2000, the Company purchased the assets of Masterset Fastening Systems, Inc. for approximately $2.3 million in cash plus an earnout of up to $0.3 million. Masterset sells a quality system of specially designed powder actuated fasteners and installation tools. In January 2001, the Company acquired 100% of the shares of BMF Bygningsbeslag A/S ("BMF") of Denmark for $12.8 million in cash with an additional amount of approximately $2.6 million possible based on operating performance. BMF is a leading connector manufacturer in northern and central Europe. Investors, analysts and other interested parties are invited to join the Company's conference call on January 26, 2001, at 6:00 am, Pacific Time. To participate, callers may dial 800-670-3537. The call will be webcast simultaneously as well as being available for one month at
http://www.themeetingson.com (reservation #17509936) or through a link on the
Company's website at http://www.simpsonmfg.com.
The Company's results of operations for the three and twelve months ended December 31, 2000 and 1999, are as follows: Three Months Twelve months Ended December 31, Ended December 31, --------------------------- --------------------------- (Unaudited) (Unaudited) 2000 1999 2000 1999 ------------ ------------ ------------ ------------ Net sales $ 85,598,655 $ 81,217,927 $369,087,813 $328,439,897 Cost of sales 57,478,019 48,178,976 227,306,484 195,839,260 ------------ ------------ ------------ ------------ Gross profit 28,120,636 33,038,951 141,781,329 132,600,637 ------------ ------------ ------------ ------------ Selling expenses 9,322,309 8,141,429 37,409,957 32,204,008 General and administrative expenses 9,683,137 9,445,815 44,633,965 37,845,480 ------------ ------------ ------------ ------------ Income from operations 9,115,190 15,451,707 59,737,407 62,551,149 Interest income, net 915,926 589,000 3,009,974 1,669,243 ------------ ------------ ------------ ------------ Income before taxes 10,031,116 16,040,707 62,747,381 64,220,392 Provision for income taxes 4,023,000 6,411,000 25,639,000 25,753,000 Minority Interest (280,877) -- (1,245,722) -- ------------ ------------ ------------ ------------ Net income $ 6,288,993 $ 9,629,707 $ 38,354,103 $ 38,467,392 ============ ============ ============ ============ Net income per share: Basic $ 0.52 $ 0.80 $ 3.19 $ 3.25 Diluted $ 0.51 $ 0.78 $ 3.12 $ 3.14 Weighted average shares outstanding: Basic 11,980,634 12,014,803 12,022,704 11,837,315 Diluted 12,249,283 12,289,586 12,294,922 12,233,865 Other data: Depreciation and amortization $ 3,105,052 $ 2,713,190 $ 13,135,982 $ 10,861,925 ============ ============ ============ ============ The Company's financial position as of December 31, 2000 and 1999, is as follows: December 31, --------------------------- (Unaudited) 2000 1999 ------------ ------------ Cash and short-term investments $ 59,417,658 $54,509,610 Trade accounts receivable, net 45,584,186 42,420,223 Inventories 85,112,695 72,751,245 Other current assets 10,943,590 6,068,749 ------------ ------------ Total current assets 201,058,129 175,749,827 Property, plant and equipment, net 63,822,513 61,143,524 Other noncurrent assets 14,599,074 10,360,642 ------------ ------------ Total assets $279,479,716 $247,253,993 ============ ============ Trade accounts payable $ 14,630,941 $12,780,621 Notes payable and current portion of long-term debt 335,754 349,541 Other current liabilities 17,756,874 20,563,320 ------------ ------------ Total current liabilities 32,723,569 33,693,482 Long-term debt 2,069,028 2,414,562 Other liabilities 341,601 556,783 Minority Interest 754,278 -- Stockholders' equity 243,591,240 210,589,166 ------------ ------------ Total liabilities and stockholders' equity $279,479,716 $247,253,993 ============ ============ 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."