PRESS RELEASE — January 24, 2002
Simpson Manufacturing Co.,
Announces Fourth Quarter Earnings
DUBLIN, Calif., Jan. 24 /PRNewswire-FirstCall/ -- Simpson Manufacturing Co., Inc. (the "Company") announced today that its 2001 fourth quarter net sales increased 9.3% to $93,535,611 as compared to net sales of $85,598,655 for the fourth quarter of 2000. Net income decreased 2.4% to $6,802,404 for the fourth quarter of 2001 as compared to net income of $6,967,285 for the fourth quarter of 2000. Diluted net income per common share was $0.55 for the fourth quarter of 2001 as compared to $0.57 for the fourth quarter of 2000. For the year, net sales increased 12.7% to $415,862,601 in 2001 as compared to net sales of $369,087,813 in 2000. Net income increased 2.9% to $40,518,126 in 2001 as compared to net income of $39,374,743 in 2000. Diluted net income per common share was $3.29 in 2001 as compared to $3.20 in 2000.
In the fourth quarter of 2001, sales growth occurred throughout the United States, with the exception of California. The overall increase in sales was strongest in the midwestern region of the United States, and in Europe as result of the acquisition of BMF Bygningsbeslag A/S ("BMF") in Denmark in January 2001. Simpson Strong-Tie's fourth quarter sales increased 8.1% over the same quarter last year, while Simpson Dura-Vent's sales increased 13.4%. Homecenters was the fastest growing Simpson Strong-Tie connector sales channel while contractor distributors declined for the quarter. 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 fourth quarter of 2001 as compared to the fourth quarter of 2000 which the Company believes was caused partially by its distributors reducing their inventories due to economic uncertainty in California. Sales of Simpson Dura-Vent's chimney and pellet vent product lines increased compared to the fourth quarter of 2000 while sales of its Direct-Vent products decreased.
Income from operations increased 3.5% from $10,238,190 in the fourth quarter of 2000 to $10,599,688 in the fourth quarter of 2001 and gross margins increased from 34.2% in the fourth quarter of 2000 to 35.0% in the fourth quarter of 2001. The increase in gross margin was primarily due to lower costs related to slow moving inventory reserves as compared to the fourth quarter of 2000 partially offset by lower absorption resulting from inventory reduction and lower margins at BMF. Selling expenses increased 16.4% from $9,322,309 in the fourth quarter of 2000 to $10,854,858 in the fourth quarter of 2001, primarily due to higher personnel costs related to the increase in the number of sales and merchandising personnel as well as increased commissions to sales agents. General and administrative expenses increased 16.5% from $9,683,137 in the fourth quarter of 2000 to $11,285,172 in the fourth quarter of 2001. This increase was primarily due to an increase in the bad debt reserve related to a significant customer as well as increased administrative costs associated with the acquisition of BMF. The increase was partially offset by a decrease in cash profit sharing. The tax rate was 38.1% in the fourth quarter of 2001, a decrease from 40.1% in the fourth quarter of 2000.
In 2001, the sales growth occurred throughout the United States as well as in Europe as a result of the acquisition of BMF. Simpson Strong-Tie's sales increased 13.8% over last year, while Simpson Dura-Vent's sales increased 7.3% over last year. Homecenters was 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 rate in sales with the addition of powder actuated tools contributing significantly. The Strong-Wall product line had positive sales growth in 2001, despite the decline in sales in the fourth quarter. Sales of Simpson Dura-Vent's chimney and pellet vent product lines increased in 2001 as compared to 2000 while sales of its Direct-Vent products decreased.
Income from operations increased 7.2% from $61,415,407 in 2000 to $65,816,141 in 2001 and gross margins decreased from 38.9% in 2000 to 38.0% in 2001. The decrease in gross margin was largely due to the lower margins at BMF. The acquisition of BMF also contributed to the increases in operating expenses. Selling expenses increased 12.9% from $37,409,957 in 2000 to $42,230,211 in 2001. The increase was primarily due to higher personnel costs related to the increase in the number of sales and merchandising personnel as well as increased commissions to sales agents and higher promotional expenses. General and administrative expenses increased 12.1% from $44,633,965 in 2000 to $50,031,666 in 2001. This increase was primarily due to an increase in the bad debt reserve related to a significant customer, to higher costs related to additional administrative personnel, including those at BMF, and to non-cash charges related to the amortization of intangible assets including the Keybuilder.com software license and the goodwill of acquired businesses. Partially offsetting this increase was a decrease in cash profit sharing. The tax rate was 41.0% in 2001, an increase from 40.8% in 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 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 twelve months ended December 31, 2001, was immaterial.
Investors, analysts and other interested parties are invited to join the Company's conference call on January 25, 2002, at 6:00 am, Pacific Time. To participate, callers may dial 800-633-8410. The call will be webcast simultaneously as well as being available for approximately one month through a link on the Company's website at www.simpsonmfg.com (reservation #20188373).
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 twelve months ended
December 31, 2001 and 2000, are as follows:
Three Months Twelve Months Ended December 31, Ended December 31, (Unaudited) (Unaudited) 2001 2000 2001 2000 Net sales $93,535,611 $85,598,655 $415,862,601 $369,087,813 Cost of sales 60,795,893 56,355,019 257,784,583 225,628,484 Gross profit 32,739,718 29,243,636 158,078,018 143,459,329 Selling expenses 10,854,858 9,322,309 42,230,211 37,409,957 General and administrative expenses 11,285,172 9,683,137 50,031,666 44,633,965 Income from operations 10,599,688 10,238,190 65,816,141 61,415,407 Interest income, net 384,802 915,926 1,587,234 3,009,974 Income before taxes 10,984,490 11,154,116 67,403,375 64,425,381 Provision for income taxes 4,187,561 4,467,708 27,619,575 26,296,360 Minority Interest (5,475) (280,877) (734,326) (1,245,722) Net income $6,802,404 $6,967,285 $40,518,126 $39,374,743 Net income per share: Basic $0.56 $0.58 $3.35 $3.28 Diluted $0.55 $0.57 $3.29 $3.20 Weighted average shares outstanding: Basic 12,160,444 11,980,634 12,108,247 12,022,704 Diluted 12,335,172 12,249,283 12,315,850 12,294,922 Other data: Depreciation and amortization $3,472,378 $3,105,052 $15,649,657 $13,135,982
The Company's financial position as of December 31, 2001 and 2000, is as follows:
December 31, December 31, 2001 2000 Cash and short-term investments $95,871,950 $59,417,658 Trade accounts receivable, net 42,614,410 45,584,186 Inventories 82,476,299 85,269,695 Other current assets 9,006,102 10,460,108 Total current assets 229,968,761 200,731,647 Property, plant and equipment, net 81,410,301 63,822,513 Other noncurrent assets 18,232,988 15,015,393 Total assets $329,612,050 $279,569,553 Trade accounts payable $15,738,659 $14,630,941 Notes payable and current portion of long-term debt 986,448 335,754 Other current liabilities 18,982,843 17,756,874 Total current liabilities 35,707,950 32,723,569 Long-term debt 5,686,995 2,069,028 Other liabilities 100,000 341,600 Minority interest -- 754,278 Stockholders' equity 288,117,105 243,681,078 Total liabilities and stockholders' equity $329,612,050 $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.
For further information, contact Barclay Simpson at (925) 560-9032.