UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): July 25, 2013
Simpson Manufacturing Co., Inc.
(Exact name of registrant as specified in its charter)
Delaware | 1-13429 | 94-3196943 |
(State or other jurisdiction | (Commission | (I.R.S. Employer |
of incorporation) | file number) | Identification No.) |
5956 W. Las Positas Boulevard, Pleasanton, CA 94588
(Address of principal executive offices)
(Registrant’s telephone number, including area code): (925) 560-9000
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
¨ 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))
Item 2.02 Results of Operations and Financial Condition.
On July 25, 2013, Simpson Manufacturing Co., Inc. announced its second quarter 2013 results in a press release, a copy of which is attached hereto as Exhibit 99.1 and incorporated herein by this reference.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Simpson Manufacturing Co., Inc. | ||
(Registrant) | ||
DATE: July 25, 2013 | By: | /s/ BRIAN J. MAGSTADT |
Brian
J. Magstadt Chief Financial Officer |
Simpson Manufacturing Co., Inc. Announces Second Quarter Results
PLEASANTON, Calif., July 25, 2013 /PRNewswire/ -- Simpson Manufacturing Co., Inc. (the "Company") (NYSE: SSD) today announced its second quarter 2013 results.
Results for the Three Months Ended June 30, 2013, Compared with the Three Months Ended June 30, 2012
Overview
Net sales increased 7.6% to $195.6 million for the second quarter of 2013 from $181.7 million for the second quarter of 2012. The Company had net income of $18.5 million for the second quarter of 2013 compared to net income of $15.9 million for the second quarter of 2012. Diluted net income per common share was $0.38 for the second quarter of 2013 compared to diluted net income of $0.33 per common share for the second quarter of 2012. The Company continues to invest in its strategic initiatives, such as an expanded offering of concrete construction products, particularly specialty chemicals, and wood construction products, particularly truss plate and software offerings.
Net sales
The increase in the Company's second quarter 2013 net sales was primarily due to increased sales in North America, which were affected by improved economic conditions, including a greater number of housing starts compared to the second quarter of 2012. Net sales were affected negatively by economic conditions in Europe, reduced home center sales and lower selling prices in regions of the United States, Canada and Europe.
Gross profit
Gross profit increased to $89.4 million in the second quarter of 2013 from $83.1 million in the second quarter of 2012. Gross profit as a percentage of net sales decreased slightly from 45.8% in the second quarter of 2012 to 45.7% in the second quarter of 2013.
Research and development and engineering expenses
Research and development and engineering expenses increased 4.9% to $9.5 million in the second quarter of 2013 from $9.0 million in the second quarter of 2012, primarily due to the Company replacing Keymark, an outside software development firm contracted by the Company during 2012, with an in-house software development team at the beginning of 2013.
Selling expenses
Selling expenses increased 8.9% to $21.7 million in the second quarter of 2013 from $19.9 million in the second quarter of 2012, primarily due to increases of $0.7 million in personnel costs, $0.4 million in cash profit sharing, and $0.2 million in each of stock-based compensation, professional and legal fees and promotional expenses.
General and administrative expenses
General and administrative expenses increased 5.6% to $28.6 million in the second quarter of 2013 from $27.1 million in the second quarter of 2012, primarily due to increases of $0.9 million in personnel costs, $0.8 million in cash profit sharing and $0.6 million in stock-based compensation, partly offset by decreases of $0.5 million in professional and legal fees and $0.2 million in communication and computer expense and a reduction of $0.2 million in losses from foreign currency translations.
Income taxes
The effective income tax rate decreased from 41.7% in the second quarter of 2012 to 37.7% in the second quarter of 2013, due to reduced operating losses in the second quarter 2013 in the Europe and Asia/Pacific segments for which a valuation allowance was recorded.
Results for the Six Months Ended June 30, 2013, Compared with the Six Months Ended June 30, 2012
Overview
Net sales increased 2.8% to $350.1 million in the first half of 2013 from $340.4 million in the first half of 2012. The Company had net income of $23.3 million in the first half of 2013 compared to net income of $23.1 million in the first half of 2012. Diluted net income per common share was $0.48 in the first half of each of 2013 and 2012.
Net sales
The increase in net sales was primarily due to increased sales in North America, which were positively affected by improved economic conditions, including a greater number of housing starts compared to the first half of 2012, despite reduced home center sales and lower selling prices.
Gross profit
Gross profit increased to $154.4 million in the first half of 2013 from $152.6 million in the first half of 2012. Gross profit as a percentage of net sales decreased from 44.8% in the first half of 2012 to 44.1% in the first half of 2013. Based on current information, the Company estimates that its 2013 full-year gross profit margin will be 42% to 43%.
Research and development and engineering expenses
Research and development and engineering expenses decreased 2.5% from $18.2 million in the first half of 2012 to $17.8 million in the first half of 2013, primarily due to the Company replacing Keymark, an outside software development firm contracted by the Company during 2012, with an in-house software development team at the beginning of 2013, partly offset by increased personnel costs.
Selling expenses
Selling expenses increased 6.7% to $43.0 million in the first half of 2013 from $40.3 million in the first half of 2012, primarily due to increases of $1.2 million in personnel costs, $0.6 million in promotional costs, $0.4 million in stock-based compensation, $0.2 million in professional fees and $0.2 million in cash profit sharing.
General and administrative expenses
General and administrative expenses increased 2.9% to $54.9 million in the first half of 2013 from $53.3 million in the first half of 2012, primarily due to increases of $0.8 million in personnel cost, $0.6 million in impairment expenses and $0.5 million in facility expenses, as well as a $0.5 million increase in net losses from foreign currency translations and a $0.4 million reduction in intangible amortization expense. These changes were partly offset by a $1.2 million decrease in legal and professional fees.
Income taxes
The effective income tax rate decreased from 43.5% in the first half of 2012 to 39.8% in the first half of 2013 primarily due to $2.3 million in non-deductible acquisition costs recorded in 2012. Based on current information and subject to future events and circumstances, the Company estimates that its 2013 effective tax rate will be 40% to 42%.
Additional information
At its meeting on July 17, 2013, the Company's Board of Directors declared a cash dividend of $0.125 per share. The record date for the dividend will be October 3, 2013, and it will be paid on October 24, 2013.
At the same July 17, 2013 meeting, the Company's Board of Directors elected Karen Colonias to the Board for an initial term expiring at the annual meeting of stockholders in 2014. Ms. Colonias has been the Company's Chief Executive Officer since January 2012. From May 2009 to January 2012, she was our Chief Financial Officer, Secretary and Treasurer. Prior to that, she held the position of Vice President of our subsidiary, Simpson Strong-Tie Company Inc., and in that capacity since 2004 served as the Branch Manager of Simpson Strong-Tie's manufacturing facility in Stockton, California. She joined Simpson Strong-Tie in 1984 as an engineer in the research and development department, where she was responsible for the design and testing of new products and code development. In 1998, Simpson Strong-Tie promoted Ms. Colonias to Vice President of Engineering, responsible for Simpson Strong-Tie's research and development efforts. Before joining Simpson Strong-Tie, she worked as a civil engineer for the Bechtel Corporation. Ms. Colonias has a BS in Engineering and an MBA and is also a licensed professional engineer. Ms. Colonias has not yet been appointed to any committees of the Board.
Investors, analysts and other interested parties are invited to join the Company's conference call on Friday, July 26, 2013, at 6:00 am Pacific Time. To participate, callers may dial 866-952-1906. The call will be webcast simultaneously as well as being available for one month through a link on the Company's website at www.simpsonmfg.com.
This document contains forward-looking statements, based on numerous assumptions and subject to risks and uncertainties. Although the Company believes 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 differ substantially 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) relationships with key customers; (iv) materials and manufacturing costs; (v) the financial condition of customers, competitors and suppliers; (vi) technological developments; (vii) increased competition; (viii) changes in capital and credit market conditions; (ix) governmental and business conditions in countries where the Company's products are manufactured and sold; (x) changes in trade regulations; (xi) the effect of acquisition activity; (xii) changes in the Company's plans, strategies, objectives, expectations or intentions; and (xiii) other risks and uncertainties indicated from time to time in the Company's filings with the U.S. Securities and Exchange Commission. Actual results might differ materially from results suggested by any forward-looking statements in this document. 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 (unaudited) for the three and six months ended June 30, 2013 and 2012, were as follows:
|
|
| Three Months |
| Six Months | ||||
|
|
| Ended June 30, |
| Ended June 30, | ||||
(Amounts in thousands, except per share data) | 2013 |
| 2012 |
| 2013 |
| 2012 | ||
| Net sales | $195,596 |
| $181,703 |
| $350,130 |
| $340,437 | |
| Cost of sales | 106,176 |
| 98,557 |
| 195,736 |
| 187,886 | |
|
| Gross profit | 89,420 |
| 83,146 |
| 154,394 |
| 152,551 |
|
|
|
|
|
|
|
|
|
|
| Research and development and engineering expenses | 9,484 |
| 9,043 |
| 17,792 |
| 18,240 | |
| Selling expenses | 21,652 |
| 19,881 |
| 43,024 |
| 40,314 | |
| General and administrative expenses | 28,595 |
| 27,087 |
| 54,884 |
| 53,331 | |
| Loss (gain) on sale of assets | 11 |
| (13) |
| 3 |
| 10 | |
|
|
|
|
|
|
|
|
|
|
|
| Income from operations | 29,678 |
| 27,148 |
| 38,691 |
| 40,656 |
|
|
|
|
|
|
|
|
|
|
| Interest income, net | 1 |
| 58 |
| 40 |
| 123 | |
|
| Income before taxes | 29,679 |
| 27,206 |
| 38,731 |
| 40,779 |
|
|
|
|
|
|
|
|
|
|
| Provision for income taxes | 11,177 |
| 11,347 |
| 15,434 |
| 17,719 | |
|
|
|
|
|
|
|
|
|
|
| Net income | $ 18,502 |
| $ 15,859 |
| $ 23,297 |
| $ 23,060 | |
|
|
|
|
|
|
|
|
| |
| Earnings per common share: |
|
|
|
|
|
|
| |
|
| Basic | $ 0.38 |
| $ 0.33 |
| $ 0.48 |
| $ 0.48 |
|
| Diluted | 0.38 |
| 0.33 |
| 0.48 |
| 0.48 |
|
|
|
|
|
|
|
|
|
|
| Weighted average shares outstanding: |
|
|
|
|
|
|
| |
|
| Basic | 48,529 |
| 48,340 |
| 48,532 |
| 48,307 |
|
| Diluted | 48,628 |
| 48,419 |
| 48,627 |
| 48,378 |
|
|
|
|
|
|
|
|
|
|
| Other data: |
|
|
|
|
|
|
| |
|
| Depreciation and amortization | $ 7,290 |
| $ 7,093 |
| $ 14,777 |
| $ 13,813 |
|
| Pre-tax impairment of assets | – |
| – |
| 1,025 |
| 461 |
|
| Pre-tax equity-based compensation expense | 3,023 |
| 2,116 |
| 6,001 |
| 5,300 |
|
|
|
|
|
|
|
|
|
|
| Cash dividend declared per common share | $ 0.125 |
| $ 0.125 |
| $ 0.125 |
| $ 0.25 |
The Company's financial position (unaudited) as of June 30, 2013 and 2012, and December 31, 2012, was as follows:
|
|
| June 30, |
| December 31, | ||
(Amounts in thousands) | 2013 |
| 2012 |
| 2012 | ||
| Cash and short-term investments | $165,275 |
| $162,719 |
| $ 175,553 | |
| Trade accounts receivable, net | 126,888 |
| 120,119 |
| 82,812 | |
| Inventories | 196,247 |
| 185,217 |
| 204,124 | |
| Assets held for sale | 586 |
| – |
| 593 | |
| Other current assets | 21,339 |
| 26,640 |
| 34,972 | |
|
| Total current assets | 510,335 |
| 494,695 |
| 498,054 |
|
|
|
|
|
|
|
|
| Property, plant and equipment, net | 209,544 |
| 208,685 |
| 213,452 | |
| Goodwill | 122,678 |
| 127,983 |
| 121,981 | |
| Other noncurrent assets | 54,428 |
| 47,542 |
| 56,835 | |
|
| Total assets | $896,985 |
| $878,905 |
| $ 890,322 |
|
|
|
|
|
|
|
|
| Trade accounts payable | $ 29,579 |
| $ 34,740 |
| $ 37,117 | |
| Notes payable and lines of credit | 1,201 |
| 4,837 |
| 178 | |
| Other current liabilities | 64,953 |
| 60,448 |
| 58,220 | |
|
| Total current liabilities | 95,733 |
| 100,025 |
| 95,515 |
|
|
|
|
|
|
|
|
| Other long-term liabilities | 8,221 |
| 5,936 |
| 5,239 | |
| Stockholders' equity | 793,031 |
| 772,944 |
| 789,568 | |
|
| Total liabilities and stockholders' equity | $896,985 |
| $878,905 |
| $ 890,322 |
Additional financial data of the Company (unaudited) for the three months and six months ended June 30, 2013 and 2012, were as follows:
|
|
| Three Months Ended |
| Six Months Ended |
| ||||
|
|
| June 30, | % | June 30, | % | ||||
(Amounts in thousands) | 2013 |
| 2012 | change | 2013 |
| 2012 | change | ||
Net Sales by Reporting Segment |
|
|
|
|
|
|
|
| ||
| North America | $159,757 |
| $144,532 | 11% | $287,493 |
| $272,500 | 6% | |
| Europe | 32,099 |
| 34,120 | (6%) | 56,016 |
| 62,356 | (10%) | |
| Asia/Pacific | 3,502 |
| 2,735 | 28% | 6,147 |
| 5,107 | 20% | |
| Administrative and all other | 238 |
| 316 | N/M | 474 |
| 474 | N/M | |
|
| Total | $195,596 |
| $181,703 | 8% | $350,130 |
| $340,437 | 3% |
|
|
|
|
|
|
|
|
|
|
|
Net Sales by Product Group* |
|
|
|
|
|
|
|
| ||
| Wood Construction | $165,869 |
| $154,810 | 7% | $298,666 |
| $292,589 | 2% | |
| Concrete Construction | 29,421 |
| 26,488 | 11% | 50,856 |
| 47,230 | 8% | |
| Other | 306 |
| 405 | N/M | 608 |
| 618 | N/M | |
|
| Total | $195,596 |
| $181,703 | 8% | $350,130 |
| $340,437 | 3% |
Gross Profit (Loss) by Reporting Segment |
|
|
|
|
|
|
|
| ||
| North America | $ 76,036 |
| $ 69,707 | 9% | $133,128 |
| $129,533 | 3% | |
| Europe | 12,585 |
| 12,729 | (1%) | 19,886 |
| 21,854 | (9%) | |
| Asia/Pacific | 881 |
| 339 | 160% | 1,327 |
| 749 | 77% | |
| Administrative and all other | (82) |
| 371 | N/M | 53 |
| 415 | N/M | |
|
| Total | $ 89,420 |
| $ 83,146 | 8% | $154,394 |
| $152,551 | 1% |
Income (Loss) from Operations |
|
|
|
|
|
|
|
| ||
| North America | $ 29,665 |
| $ 26,583 | 12% | $ 44,924 |
| $ 44,456 | 1% | |
| Europe | 2,241 |
| 2,088 | 7% | (1,939) |
| (284) | N/M | |
| Asia/Pacific | (46) |
| (163) | N/M | (1,229) |
| (817) | N/M | |
| Administrative and all other | (2,182) |
| (1,360) | N/M | (3,065) |
| (2,699) | N/M | |
|
| Total | $ 29,678 |
| $ 27,148 | 9% | $ 38,691 |
| $ 40,656 | (5%) |
|
|
* | The Company manages its business by geographic segment but is presenting sales by product group as additional information. |
N/M | Statistic is not meaningful. |
Simpson Manufacturing Co., Inc., headquartered in Pleasanton, California, through its subsidiary, Simpson Strong-Tie Company Inc., designs, engineers and is a leading manufacturer of wood construction products, including connectors, truss plates, fastening systems, fasteners and shearwalls, and concrete construction products, including adhesives, specialty chemicals, mechanical anchors, powder actuated tools and reinforcing fiber materials. The Company's common stock trades on the New York Stock Exchange under the symbol "SSD."
For further information, contact Tom Fitzmyers at (925) 560-9030.