Delaware | 1-13429 | 94-3196943 | ||
(State or other jurisdiction of incorporation) | (Commission file number) | (I.R.S. Employer Identification No.) |
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-2) | |
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240. 13e-4(c)) |
Proposal 1: | To elect eight directors, each to hold office until the Company's 2020 annual meeting of shareholders or until their successors are duly qualified and elected. |
Proposal 2: | To ratify the selection of Grant Thornton LLP as the Company’s independent registered public accounting firm for the 2019 fiscal year. |
Proposal 3: | To approve, on an advisory, non-binding basis of the compensation of the Company’s named executive officers. |
Broker | ||||||||||||
For | Against | Abstain | Non-Votes | |||||||||
Karen Colonias | 37,138,947 | 172,733 | 12,677 | 5,752,275 | ||||||||
James S. Andrasick | 37,220,173 | 94,244 | 9,940 | 5,752,275 | ||||||||
Michael A. Bless | 21,129,079 | 16,187,521 | 7,757 | 5,752,275 | ||||||||
Jennifer A. Chatman | 36,936,510 | 380,479 | 7,368 | 5,752,275 | ||||||||
Gary M. Cusumano | 37,076,638 | 239,252 | 8,467 | 5,752,275 | ||||||||
Philip E. Donaldson | 37,255,143 | 61,457 | 7,757 | 5,752,275 | ||||||||
Celeste Volz Ford | 37,220,034 | 95,482 | 8,841 | 5,752,275 | ||||||||
Robin G. MacGillivray | 36,916,993 | 398,513 | 8,851 | 5,752,275 |
FOR | AGAINST | ABSTAIN | ||
43,042,698 | 24,307 | 9,627 |
FOR | AGAINST | ABSTAIN | BROKER NON-VOTES | |||
36,874,751 | 430,703 | 18,903 | 5,752,275 |
Exhibit No. | Description | |
99.1 | ||
Simpson Manufacturing Co., Inc. | ||||
(Registrant) | ||||
DATE: | April 29, 2019 | By | /s/ Brian J. Magstadt | |
Brian J. Magstadt | ||||
Chief Financial Officer |
2019 first quarter net sales increased 5.9% year-over-year to $259.2 million | |
l Repurchased $30.0 million of the Company's common stock during the first quarter | |
l Declared a $0.23 cash dividend, a 4.5% increase from the 2019 first quarter dividend |
• | Consolidated net sales of $259.2 million increased 5.9% from $244.8 million. |
◦ | North America net sales of $221.4 million increased 7.4% from $206.2 million, primarily due to increases in average product prices and sales volume. Canada's net sales were negatively affected by foreign currency translation. |
◦ | Europe net sales of $35.8 million decreased 1.4% from $36.3 million, primarily due to approximately $2.9 million of negative foreign currency translations resulting from Europe currencies weakening against the United States dollar. In local currency, Europe net sales increased primarily due to increases in sales volume and average product prices. |
• | Consolidated gross profit of $110.3 million increased 2.4% from $107.6 million. Gross profit margin decreased to 42.5% from 44.0%. |
◦ | North America gross profit margin decreased to 44.4% from 46.9%, primarily due to an increase in material costs as a percentage of net sales. |
◦ | Europe gross profit margin increased slightly to 32.3% from 31.9%. |
• | Consolidated income from operations of $30.0 million decreased 8.1% from $32.7 million. Income from operations for the first quarter of 2018 included a $1.0 million gain on the exercise of an eminent domain claim. Consolidated operating profit margin decreased to 11.6% from 13.4%. |
◦ | North America income from operations of $32.8 million decreased 10.0% from $36.5 million, primarily due to the reduction in gross profit margin. |
◦ | Europe loss from operations improved to $0.4 million from a loss of $1.6 million, primarily due to lower operating expenses such as personnel and advertising costs. |
• | The Company's effective income tax rate increased to 22.5% from 22.2%. |
• | Consolidated net income was $22.7 million, or $0.50 per diluted share of the Company's common stock, compared to net income of $25.4 million, or $0.54 per diluted share of the Company's common stock. |
• | Cash flow provided by operating activities decreased approximately $7.2 million to $9.9 million from $17.1 million. |
• | Cash flow used in investing activities increased approximately $1.1 million to $10.8 million from $9.7 million. Capital expenditures were approximately $7.4 million compared to $10.9 million. |
• | On April 26, 2019, the Company’s Board of Directors (the "Board") declared a quarterly cash dividend of $0.23 per share, which represents an increase of 4.5% from the 2019 first quarter dividend. The dividend will be payable on July 25, 2019 to the Company's stockholders of record as of July 3, 2019. |
• | During the first quarter of 2019, the Company repurchased 505,448 shares of the Company's common stock in the open market at an average price of $59.35 per share, for a total of $30.0 million. As of March 31, 2019, approximately $70.0 million remained available for repurchase under the previously announced $100.0 million share repurchase authorization (which expires at the end of 2019). |
• | The market price for steel dropped from its highs in 2018. The Company currently believes the market price for steel could be flat or decrease slightly during the second quarter of 2019. |
• | The Company estimates that its 2019 full-year gross profit margin will be between approximately 44.5% to 45.5%. |
• | The Company estimates that its 2019 full-year operating expenses, as a percentage of net sales, will be between approximately 27.5% and 28.5%. |
• | The Company estimates that its 2019 full-year effective tax rate will be between approximately 25% to 27%, including both federal and state income tax rates. The ultimate impact of the Tax Cuts and Jobs Act signed into law in 2017 and the Company's 2019 effective tax rate may differ materially from the Company’s estimates due to changes in the interpretations and assumptions made by the Company as well as additional regulatory guidance that may be issued and actions the Company may take as a result of the Tax Cuts and Jobs Act, such as cash repatriation to the United States. The Company will continue to assess the expected impact of the new tax law and provide additional disclosures at appropriate times. |
Three Months Ended March 31, | |||||||
(Amounts in thousands, except per share data) | 2019 | 2018 | |||||
Net sales | $ | 259,244 | $ | 244,779 | |||
Cost of sales | 148,990 | 137,157 | |||||
Gross profit | 110,254 | 107,622 | |||||
Research and development and engineering expense | 12,260 | 11,150 | |||||
Selling expense | 28,112 | 27,573 | |||||
General and administrative expense | 39,549 | 37,399 | |||||
Total operating expenses | 79,921 | 76,122 | |||||
Loss (gain) on disposal of assets | 310 | (1,184 | ) | ||||
Income from operations | 30,023 | 32,684 | |||||
Gain (loss) in equity method investment, before tax | 24 | (24 | ) | ||||
Interest expense, net | (196 | ) | (90 | ) | |||
Other & foreign exchange gain (loss), net | (591 | ) | 112 | ||||
Income before taxes | 29,260 | 32,682 | |||||
Provision for income taxes | 6,598 | 7,253 | |||||
Net income | $ | 22,662 | $ | 25,429 | |||
Earnings per common share: | |||||||
Basic | $ | 0.51 | $ | 0.55 | |||
Diluted | $ | 0.50 | $ | 0.54 | |||
Weighted average shares outstanding: | |||||||
Basic | 44,874 | 46,615 | |||||
Diluted | 45,213 | 47,009 | |||||
Cash dividend declared per common share | $ | 0.22 | $ | 0.21 | |||
Other data: | |||||||
Depreciation and amortization | $ | 9,758 | $ | 9,688 | |||
Pre-tax equity-based compensation expense | $ | 4,105 | $ | 3,116 | |||
March 31, | December 31, | |||||||||||
(Amounts in thousands) | 2019 | 2018 | 2018 | |||||||||
Cash and cash equivalents | $ | 113,407 | $ | 137,413 | $ | 160,180 | ||||||
Trade accounts receivable, net | 173,140 | 167,146 | 146,052 | |||||||||
Inventories | 272,459 | 256,552 | 276,088 | |||||||||
Assets held for sale | 2,546 | — | 627 | |||||||||
Other current assets | 14,186 | 22,423 | 16,582 | |||||||||
Total current assets | 575,738 | 583,534 | 599,529 | |||||||||
Property, plant and equipment, net | 251,398 | 276,114 | 254,597 | |||||||||
Operating lease right-of-use assets | 34,324 | — | — | |||||||||
Goodwill | 131,712 | 138,026 | 130,250 | |||||||||
Other noncurrent assets | 37,180 | 42,668 | 37,287 | |||||||||
Total assets | $ | 1,030,352 | $ | 1,040,342 | $ | 1,021,663 | ||||||
Trade accounts payable | $ | 35,549 | $ | 42,098 | $ | 34,361 | ||||||
Other current liabilities | 115,029 | 101,130 | 117,219 | |||||||||
Total current liabilities | 150,578 | 143,228 | 151,580 | |||||||||
Operating lease liabilities | 28,878 | — | — | |||||||||
Deferred income tax and other long-term liabilities | 15,422 | 18,052 | 14,569 | |||||||||
Stockholders' equity | 835,474 | 879,062 | 855,514 | |||||||||
Total liabilities and stockholders' equity | $ | 1,030,352 | $ | 1,040,342 | $ | 1,021,663 |
Three Months Ended | ||||||||||||
March 31, | % | |||||||||||
(Amounts in thousands) | 2019 | 2018 | change* | |||||||||
Net Sales by Reporting Segment | ||||||||||||
North America | $ | 221,431 | $ | 206,212 | 7.4% | |||||||
Percentage of total net sales | 85.4 | % | 84.2 | % | ||||||||
Europe | 35,780 | 36,293 | (1.4)% | |||||||||
Percentage of total net sales | 13.8 | % | 14.8 | % | ||||||||
Asia/Pacific | 2,033 | 2,274 | (10.6)% | |||||||||
Total | $ | 259,244 | $ | 244,779 | 5.9% | |||||||
Net Sales by Product Group** | ||||||||||||
Wood Construction | $ | 217,613 | $ | 212,547 | 2.4% | |||||||
Percentage of total net sales | 84 | % | 87 | % | ||||||||
Concrete Construction | 41,577 | 32,156 | 29.3% | |||||||||
Percentage of total net sales | 16 | % | 13 | % | ||||||||
Other | 54 | 76 | N/M | |||||||||
Total | $ | 259,244 | $ | 244,779 | 5.9% | |||||||
Gross Profit (Loss) by Reporting Segment | ||||||||||||
North America | $ | 98,397 | $ | 96,738 | 1.7% | |||||||
North America gross profit margin | 44.4 | % | 46.9 | % | ||||||||
Europe | 11,555 | 11,568 | (0.1)% | |||||||||
Europe gross profit margin | 32.3 | % | 31.9 | % | ||||||||
Asia/Pacific | 319 | 187 | 70.6% | |||||||||
Administrative and all other | (17 | ) | (871 | ) | —% | |||||||
Total | $ | 110,254 | $ | 107,622 | 2.4% | |||||||
Income (Loss) from Operations*** | ||||||||||||
North America | $ | 32,814 | $ | 36,455 | (10.0)% | |||||||
North America operating profit margin | 14.8 | % | 17.7 | % | ||||||||
Europe | (384 | ) | (1,589 | ) | 75.8% | |||||||
Europe operating profit margin | (1.1 | )% | (4.4 | )% | ||||||||
Asia/Pacific | (542 | ) | (991 | ) | N/M | |||||||
Administrative and all other | (1,865 | ) | (1,191 | ) | N/M | |||||||
Total | $ | 30,023 | $ | 32,684 | (8.1)% |
* | Unfavorable percentage changes are presented in parentheses, if any. | |
** | The Company manages its business by geographic segment but is presenting sales by product group as additional information. | |
*** | Beginning in the first quarter of 2019, income from inter-segment sales, previously included in income from operations for segment reporting, is now presented below income from operations. Income from inter-segment sales eliminates in consolidation but was an expense in the North America and Europe segment and income in the Asia/Pacific segment. | |
N/M | Statistic is not material or not meaningful. |