(State or other jurisdiction of incorporation) | (Commission file number) | (I.R.S. Employer Identification No.) |
Securities registered pursuant to Section 12(b) of the Act: | ||
Title of Each Class | Trading Symbol | Name of Each Exchange on Which Registered |
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)) |
Exhibit No. | Description | |
99.1 | ||
Simpson Manufacturing Co., Inc. | ||||
(Registrant) | ||||
DATE: | July 27, 2020 | By | /s/ Brian J. Magstadt | |
Brian J. Magstadt | ||||
Chief Financial Officer |
l | Net sales of $326.1 million increased 7.0% year-over-year |
l | Strong gross margin of 45.9% improved 1.9% year-over-year |
l | Income from operations of $72.2 million increased 34.6% year-over-year, operating margin of 22.1% increased 4.5% year-over-year |
l | Diluted earnings per share of $1.22 increased 38.6% year-over-year |
l | Providing full year 2020 financial guidance on improved demand outlook |
l | Declared a $0.23 per share cash dividend |
• | Consolidated net sales of $326.1 million increased 7.0% from $304.9 million. |
◦ | North America net sales of $286.8 million increased 10.7% from $259.1 million, primarily due to higher sales volumes from the return of a home center customer. Canada's net sales were adversely impacted by negative foreign currency translation. In local currency, Canada sales increased primarily due to higher sales volumes. |
◦ | Europe net sales of $37.4 million decreased 14.4% from $43.6 million, primarily due to lower sales volumes related to COVID-19 plant closures. Europe sales were impacted by approximately $1.2 million of negative foreign currency translations resulting from some Europe currencies weakening against the United States dollar. In local currency, Europe net sales decreased primarily due to lower sales volume. |
• | Consolidated gross profit of $149.8 million increased 11.6% from $134.2 million. Gross margin increased to 45.9% from 44.0%. |
◦ | North America gross margin increased to 47.4% from 45.1%, primarily due to decreases in material cost, partly offset by higher labor, warehouse and shipping costs, each as a percentage of net sales. |
◦ | Europe gross margin decreased to 35.1% from 37.0%, primarily due to increased costs as a percentage of sales, which resulted from lower production volume. |
• | Consolidated income from operations of $72.2 million increased 34.6% from $53.7 million. The increase was primarily due to the increase in gross profit and lower operating expenses. Consolidated operating margin increased to 22.1% from 17.6%. |
◦ | North America income from operations of $72.2 million increased from $49.8 million, primarily due to the increase in gross profit and lower operating expenses. |
◦ | Europe income from operations of $2.7 million decreased from $4.6 million, primarily due to lower net sales and slightly higher operating expenses. |
• | The Company's effective income tax rate decreased to 25.8% from 26.4%. |
• | Net income was $53.5 million, or $1.22 per diluted share of the Company's common stock, compared to net income of $39.6 million, or $0.88 per diluted share. |
• | Cash flow provided by operating activities decreased approximately $10.8 million to $42.8 million from $53.6 million. |
• | Cash flow used in investing activities decreased approximately $2.8 million to $13.4 million from $16.3 million. Capital expenditures were approximately $14.1 million compared to $15.3 million. Given current circumstances, the Company is maintaining its focus on tightly managing all expenses and planned capital expenditures. |
• | On July 14, 2020, the Company’s Board of Directors declared a quarterly cash dividend of $0.23 per share. The dividend will be payable on October 22, 2020 to the Company's stockholders of record as of October 1, 2020. |
• | Net sales are estimated to increase in the range of 1.5% to 4.0% compared to the full year ended December 31, 2019. |
• | Gross margin is estimated to be in the range of 43.0% to 45.0%. |
• | Operating expenses, as a percentage of net sales, are estimated to be in the range of 27.0% to 29.0%. |
• | The effective tax rate is estimated to be in the range of 24.0% to 26.0%, including both federal and state income tax rates. |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
(Amounts in thousands, except per share data) | 2020 | 2019 | 2020 | 2019 | |||||||||||
Net sales | $ | 326,076 | $ | 304,853 | $ | 609,744 | $ | 564,097 | |||||||
Cost of sales | 176,276 | 170,674 | 330,278 | 319,664 | |||||||||||
Gross profit | 149,800 | 134,179 | 279,466 | 244,433 | |||||||||||
Research and development and engineering expense | 12,191 | 11,055 | 25,573 | 23,316 | |||||||||||
Selling expense | 26,834 | 28,687 | 55,361 | 56,799 | |||||||||||
General and administrative expense | 38,636 | 41,345 | 77,107 | 80,893 | |||||||||||
Total operating expenses | 77,661 | 81,087 | 158,041 | 161,008 | |||||||||||
Gain on disposal of assets | (73 | ) | (561 | ) | (137 | ) | (251 | ) | |||||||
Income from operations | 72,212 | 53,653 | 121,562 | 83,676 | |||||||||||
Interest expense, net and other | (151 | ) | 147 | (2,684 | ) | (616 | ) | ||||||||
Income before taxes | 72,061 | 53,800 | 118,878 | 83,060 | |||||||||||
Provision for income taxes | 18,582 | 14,223 | 28,573 | 20,821 | |||||||||||
Net income | $ | 53,479 | $ | 39,577 | $ | 90,305 | $ | 62,239 | |||||||
Earnings per common share: | |||||||||||||||
Basic | $ | 1.23 | $ | 0.89 | $ | 2.06 | $ | 1.39 | |||||||
Diluted | $ | 1.22 | $ | 0.88 | $ | 2.05 | $ | 1.38 | |||||||
Weighted average shares outstanding: | |||||||||||||||
Basic | 43,471 | 44,671 | 43,787 | 44,772 | |||||||||||
Diluted | 43,663 | 44,972 | 43,980 | 45,089 | |||||||||||
Cash dividend declared per common share | $ | 0.23 | $ | 0.23 | $ | 0.46 | $ | 0.45 | |||||||
Other data: | |||||||||||||||
Depreciation and amortization | $ | 10,006 | $ | 9,757 | $ | 19,739 | $ | 19,515 | |||||||
Pre-tax equity-based compensation expense | $ | 5,151 | $ | 2,494 | $ | 5,428 | $ | 6,600 | |||||||
June 30, | December 31, | |||||||||||
(Amounts in thousands) | 2020 | 2019 | 2019 | |||||||||
Cash and cash equivalents | $ | 315,448 | $ | 141,731 | $ | 230,210 | ||||||
Trade accounts receivable, net | 233,867 | 191,282 | 139,364 | |||||||||
Inventories | 265,365 | 266,142 | 251,907 | |||||||||
Other current assets | 20,222 | 14,795 | 19,426 | |||||||||
Total current assets | 834,902 | 613,950 | 640,907 | |||||||||
Property, plant and equipment, net | 247,119 | 252,710 | 249,012 | |||||||||
Operating lease right-of-use assets | 36,930 | 35,111 | 35,436 | |||||||||
Goodwill | 132,335 | 132,312 | 131,879 | |||||||||
Other noncurrent assets | 33,217 | 35,835 | 38,132 | |||||||||
Total assets | $ | 1,284,503 | $ | 1,069,918 | $ | 1,095,366 | ||||||
Trade accounts payable | $ | 49,149 | $ | 39,241 | $ | 33,351 | ||||||
Accrued liabilities and other current liabilities | 144,265 | 118,000 | 125,556 | |||||||||
Total current liabilities | 193,414 | 157,241 | 158,907 | |||||||||
Operating lease liabilities, net of current portion | 28,893 | 28,164 | 27,930 | |||||||||
Long-term debt, net of current portion | 150,000 | — | — | |||||||||
Deferred income tax and other long-term liabilities | 17,984 | 16,092 | 16,572 | |||||||||
Stockholders' equity | 894,212 | 868,421 | 891,957 | |||||||||
Total liabilities and stockholders' equity | $ | 1,284,503 | $ | 1,069,918 | $ | 1,095,366 |
Three Months Ended | Six Months Ended | |||||||||||||||||||
June 30, | % | June 30, | % | |||||||||||||||||
(Amounts in thousands) | 2020 | 2019 | change* | 2020 | 2019 | change* | ||||||||||||||
Net Sales by Reporting Segment | ||||||||||||||||||||
North America | $ | 286,807 | $ | 259,073 | 10.7% | $ | 535,857 | $ | 480,504 | 11.5% | ||||||||||
Percentage of total net sales | 88.0 | % | 85.0 | % | 87.9 | % | 85.2 | % | ||||||||||||
Europe | 37,379 | 43,648 | (14.4)% | 70,111 | 79,428 | (11.7)% | ||||||||||||||
Percentage of total net sales | 11.5 | % | 14.3 | % | 11.5 | % | 14.1 | % | ||||||||||||
Asia/Pacific | 1,890 | 2,132 | (11.4)% | 3,776 | 4,165 | (9.3)% | ||||||||||||||
$ | 326,076 | $ | 304,853 | 7.0% | $ | 609,744 | $ | 564,097 | 8.1% | |||||||||||
Net Sales by Product Group** | ||||||||||||||||||||
Wood Construction | $ | 280,724 | $ | 258,416 | 8.6% | $ | 523,244 | $ | 476,029 | 9.9% | ||||||||||
Percentage of total net sales | 86 | % | 84 | % | 86 | % | 84 | % | ||||||||||||
Concrete Construction | 45,304 | 46,360 | (2.3)% | 86,316 | 87,936 | (1.8)% | ||||||||||||||
Percentage of total net sales | 14 | % | 16 | % | 14 | % | 16 | % | ||||||||||||
Other | 48 | 77 | N/M | 184 | 132 | N/M | ||||||||||||||
$ | 326,076 | $ | 304,853 | 7.0% | $ | 609,744 | $ | 564,097 | 8.1% | |||||||||||
Gross Profit (Loss) by Reporting Segment | ||||||||||||||||||||
North America | $ | 136,024 | $ | 116,880 | 16.4% | $ | 254,819 | $ | 215,277 | 18.4% | ||||||||||
North America gross margin | 47.4 | % | 45.1 | % | 47.6 | % | 44.8 | % | ||||||||||||
Europe | 13,106 | 16,132 | (18.8)% | 23,807 | 27,686 | (14.0)% | ||||||||||||||
Europe gross margin | 35.1 | % | 37.0 | % | 34.0 | % | 34.9 | % | ||||||||||||
Asia/Pacific | 484 | 1,149 | (57.9)% | 651 | 1,469 | (55.7)% | ||||||||||||||
Administrative and all other | 186 | 18 | N/M | 189 | 1 | N/M | ||||||||||||||
$ | 149,800 | $ | 134,179 | 11.6% | $ | 279,466 | $ | 244,433 | 14.3% | |||||||||||
Income (Loss) from Operations | ||||||||||||||||||||
North America | $ | 72,196 | $ | 49,838 | 44.9% | $ | 125,757 | $ | 82,652 | 52.2% | ||||||||||
North America operating margin | 25.2 | % | 19.2 | % | 23.5 | % | 17.2 | % | ||||||||||||
Europe | 2,696 | 4,643 | (41.9)% | 1,026 | 4,259 | (75.9)% | ||||||||||||||
Europe operating margin | 7.2 | % | 10.6 | % | 1.5 | % | 5.4 | % | ||||||||||||
Asia/Pacific | (75 | ) | 186 | N/M | (679 | ) | (355 | ) | N/M | |||||||||||
Administrative and all other | (2,605 | ) | (1,014 | ) | N/M | (4,542 | ) | (2,880 | ) | N/M | ||||||||||
$ | 72,212 | $ | 53,653 | 34.6% | $ | 121,562 | $ | 83,676 | 45.3% |
* | 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. | |
N/M | Statistic is not material or not meaningful. |
COVER PAGE |
Jul. 27, 2020 |
---|---|
Cover [Abstract] | |
Entity Registrant Name | SIMPSON MANUFACTURING CO INC /CA/ |
Written Communications | false |
Title of 12(b) Security | Common Stock, par value $0.01 per share |
Entity Incorporation, State or Country Code | DE |
Document Type | 8-K |
Document Period End Date | Jul. 27, 2020 |
Entity File Number | 1-13429 |
Entity Tax Identification Number | 94-3196943 |
Entity Address, Address Line One | 5956 W. Las Positas Boulevard |
Entity Address, City or Town | Pleasanton |
Entity Address, State or Province | CA |
Entity Address, Postal Zip Code | 94588 |
City Area Code | 925 |
Local Phone Number | 560-9000 |
Trading Symbol | SSD |
Security Exchange Name | NYSE |
Entity Emerging Growth Company | false |
Soliciting Material | false |
Pre-commencement Tender Offer | false |
Pre-commencement Issuer Tender Offer | false |
Entity Central Index Key | 0000920371 |
Amendment Flag | false |
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