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PRESS RELEASE – February 5,
2009
SIMPSON MANUFACTURING CO.,
INC.
ANNOUNCES FOURTH QUARTER
EARNINGS
Pleasanton, CA – Simpson Manufacturing
Co., Inc. (the “Company”) announced today that its fourth quarter 2008 net sales
decreased 14.6% to $149.8 million compared to net sales of $175.3 million for
the fourth quarter of 2007. Net income was $1.8 million for the fourth quarter of 2008
compared to net income of $0.5 million for the fourth quarter of 2007. Diluted
net income per common share was $0.04 for the fourth quarter of 2008 compared
to $0.01 for the fourth quarter of 2007. In 2008, net sales decreased 7.4% to
$756.5 million compared to
net sales of $817.0 million for 2007. Net income decreased 21.5% to $53.9
million for 2008 compared to net income of $68.7 million for 2007. Diluted net
income per common share was $1.10 for 2008 compared to $1.40 for
2007.
In the fourth quarter of 2008, sales
declined throughout the United States, with the exception of the northeastern
region of the country. California and the western states had the largest
decrease in sales. Sales during the quarter decreased in the United Kingdom, most of continental Europe and
Canada. Sales in Asia, although relatively
small, have increased as Simpson Strong-Tie has opened sales offices in the
region and prepares to open its new manufacturing facility outside of
Shanghai, China. Simpson Strong-Tie’s fourth quarter
sales decreased 18.9% from the same quarter last year, while Simpson Dura-Vent’s
sales increased 16.0%. Simpson Strong-Tie’s sales to contractor
distributors, dealer distributors and home centers decreased significantly as
homebuilding continued to
decline and general
economic conditions continued to worsen. Sales decreased across most of Simpson
Strong-Tie’s major product lines, particularly those used in new home
construction. Sales of Anchor Systems products as a group were up slightly as a
result of the acquisition of the Liebig companies in April 2008 and increased
distribution in Asia. Sales of Simpson Dura-Vent’s pellet
vent, chimney, special gas vent and relining products increased. The increase in
special gas vent products and a significant component of the increase in
relining products resulted from the acquisition of ProTech Systems, Inc. (“ProTech”) in June 2008. Sales of
Simpson Dura-Vent’s Direct-Vent and gas vent product lines decreased as a result
of several factors, including the continuing weakness in new home
construction.
Income from operations decreased 12.1%
from $5.2 million in the fourth quarter of 2007 to $4.5 million in the fourth
quarter of 2008. Gross margins increased from 33.8% in the fourth quarter of
2007 to 35.1% in the fourth quarter of 2008. The increase in gross margins was
primarily due to lower manufacturing and labor costs, partly offset by higher
fixed overhead costs, as a result of lower production volumes, and higher
distribution costs. Steel prices have declined from their peak in July 2008, but
management believes that they may have reached bottom and does not expect
them to decrease further for the balance of the first quarter of 2009.
The steel market continues to be
dynamic, however, with a high degree of uncertainty about
future pricing trends.
Research and development expenses
increased 12.4% from $4.4 million in the fourth quarter of 2007 to $5.0 million
in the fourth quarter of 2008. This increase was primarily due to a $0.8 million
increase in expenses related to additional personnel in the acquisitions during
2008, partly offset by an overall reduction in other
departmental overhead expenses. Selling expenses decreased 10.5% from $19.5
million in the fourth quarter of 2007 to $17.4 million in the fourth quarter of
2008. The decrease resulted from a $1.4 million decrease in promotional
expenditures and a $0.7 million decrease in expenses associated with sales and
marketing personnel, most of which related to cost cutting measures. General and
administrative expenses increased 15.4% from $19.7 million in the fourth quarter
of 2007 to $22.7 million in the fourth quarter of 2008. The increase was the
result of several factors, including: higher
administrative personnel expenses of $2.0 million, including those at businesses
acquired in 2008; higher bad debt expense of $1.9
million, primarily related to a single customer; increased legal and professional
service expenses of $1.0 million; increased amortization of intangible
assets of $0.6 million; and increases in other departmental overhead expenses of
$0.7 million. These increases were partly offset by a decrease in cash profit
sharing of $2.9 million, resulting primarily from decreased operating profit.
Impairment of goodwill decreased 72.2% from $10.7 million in the fourth quarter
of 2007 to $3.0 million in the fourth quarter of 2008. The impairment charge
taken in the fourth quarter of 2008 was associated with assets that were
acquired in England in 1999. The effective tax rate was
58.5% in the fourth quarter of 2008, down
from 92.8% in the fourth quarter of 2007. The decrease in the effective tax rate
was caused primarily by the
absence of the impairment
of goodwill charge taken in the fourth quarter of 2007, the majority of which
was not deductible for tax purposes. The effective tax rate exceeded the
U.S. statutory tax rate primarily as a
result of valuation allowances taken against tax benefits on foreign
losses.
4
The following information was filed by Simpson Manufacturing Co Inc (SSD) on Friday, February 6, 2009 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.
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Simpson Manufacturing Co Inc provided additional information to their SEC Filing as exhibits
SEC Filing Exhibit
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Ticker: SSD
CIK: 920371
Form Type: 10-K Annual Report
Accession Number: 0001104659-09-013190
Submitted to the SEC: Fri Feb 27 2009 6:02:41 PM EST
Accepted by the SEC: Mon Mar 02 2009
Period: Wednesday, December 31, 2008
Industry: Cutlery Handtools And General Hardware
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