UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
ý QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended: March 31, 2005
OR
o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number: 0-23804
Simpson Manufacturing Co., Inc.
(Exact name of registrant as specified in its charter)
Delaware |
|
94-3196943 |
(State or other
jurisdiction of incorporation |
|
(I.R.S. Employer |
4120 Dublin Boulevard, Suite 400, Dublin, CA 94568
(Address of principal executive offices)
(Registrants telephone number, including area code): (925) 560-9000
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes ý No o
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).
Yes ý No o
The number of shares of the Registrants Common Stock outstanding as of March 31, 2005: 47,994,172
In November 2004, the Company completed a 2-for-1 stock split effected in the form of a stock dividend of its common stock. All of the share and per share numbers have been adjusted to reflect this stock split.
PART I FINANCIAL INFORMATION
Item 1. Financial Statements.
Simpson Manufacturing Co., Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(Unaudited)
|
|
March 31, |
|
December 31, |
|
|||||
|
|
2005 |
|
2004 |
|
2004 |
|
|||
ASSETS |
|
|
|
|
|
|
|
|||
Current assets |
|
|
|
|
|
|
|
|||
Cash and cash equivalents |
|
$ |
33,909,839 |
|
$ |
70,446,242 |
|
$ |
30,916,357 |
|
Short-term investments |
|
13,838,703 |
|
45,456,581 |
|
17,032,159 |
|
|||
Trade accounts receivable |
|
110,607,502 |
|
106,004,468 |
|
89,806,749 |
|
|||
Inventories |
|
190,048,738 |
|
115,290,897 |
|
192,879,318 |
|
|||
Deferred income taxes |
|
9,641,296 |
|
7,624,878 |
|
8,809,071 |
|
|||
Other current assets |
|
4,816,388 |
|
4,248,835 |
|
7,667,288 |
|
|||
Total current assets |
|
362,862,466 |
|
349,071,901 |
|
347,110,942 |
|
|||
|
|
|
|
|
|
|
|
|||
Property, plant and equipment, net |
|
137,949,180 |
|
108,477,981 |
|
137,608,800 |
|
|||
Goodwill |
|
43,241,861 |
|
23,444,265 |
|
44,378,861 |
|
|||
Equity method investment |
|
73,123 |
|
|
|
|
|
|||
Other noncurrent assets |
|
16,611,381 |
|
7,030,061 |
|
16,038,357 |
|
|||
Total assets |
|
$ |
560,738,011 |
|
$ |
488,024,208 |
|
$ |
545,136,960 |
|
|
|
|
|
|
|
|
|
|||
LIABILITIES AND STOCKHOLDERS EQUITY |
|
|
|
|
|
|
|
|||
Current liabilities |
|
|
|
|
|
|
|
|||
Line of credit and current |
|
|
|
|
|
|
|
|||
portion of long-term debt |
|
$ |
1,715,170 |
|
$ |
2,666,161 |
|
$ |
579,198 |
|
Trade accounts payable |
|
35,138,620 |
|
20,392,693 |
|
32,030,936 |
|
|||
Accrued liabilities |
|
23,190,304 |
|
17,902,826 |
|
27,780,583 |
|
|||
Income taxes payable |
|
5,648,676 |
|
8,412,050 |
|
|
|
|||
Accrued profit sharing trust contributions |
|
2,705,024 |
|
2,082,057 |
|
7,038,952 |
|
|||
Accrued cash profit sharing and commissions |
|
8,580,031 |
|
10,583,238 |
|
8,209,753 |
|
|||
Accrued workers compensation |
|
2,594,350 |
|
2,473,764 |
|
2,760,613 |
|
|||
Total current liabilities |
|
79,572,175 |
|
64,512,789 |
|
78,400,035 |
|
|||
|
|
|
|
|
|
|
|
|||
Long-term debt, net of current portion |
|
2,245,353 |
|
5,199,434 |
|
2,396,886 |
|
|||
Other long-term liabilities |
|
1,416,347 |
|
1,112,856 |
|
1,414,831 |
|
|||
Total liabilities |
|
83,233,875 |
|
70,825,079 |
|
82,211,752 |
|
|||
|
|
|
|
|
|
|
|
|||
Commitments and contingencies (Notes 6 and 7) |
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|||
Stockholders equity |
|
|
|
|
|
|
|
|||
Common stock, at par value |
|
479,942 |
|
498,214 |
|
479,290 |
|
|||
Additional paid-in capital |
|
83,037,685 |
|
65,502,295 |
|
79,876,789 |
|
|||
Retained earnings |
|
383,140,301 |
|
373,437,866 |
|
369,154,260 |
|
|||
Accumulated other comprehensive income |
|
10,846,208 |
|
7,187,752 |
|
13,414,869 |
|
|||
Treasury stock |
|
|
|
(29,426,998 |
) |
|
|
|||
Total stockholders equity |
|
477,504,136 |
|
417,199,129 |
|
462,925,208 |
|
|||
Total liabilities and stockholders equity |
|
$ |
560,738,011 |
|
$ |
488,024,208 |
|
$ |
545,136,960 |
|
The accompanying notes are an integral part of these condensed consolidated financial statements.
2
Simpson Manufacturing Co., Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(Unaudited)
|
|
Three
Months Ended |
|
||||
|
|
2005 |
|
2004 |
|
||
Net sales |
|
$ |
184,215,855 |
|
$ |
159,915,734 |
|
Cost of sales |
|
119,699,504 |
|
95,337,098 |
|
||
Gross profit |
|
64,516,351 |
|
64,578,636 |
|
||
|
|
|
|
|
|
||
Operating expenses: |
|
|
|
|
|
||
Selling |
|
15,877,818 |
|
13,045,528 |
|
||
General and administrative |
|
22,204,680 |
|
22,225,820 |
|
||
|
|
38,082,498 |
|
35,271,348 |
|
||
|
|
|
|
|
|
||
Income from operations |
|
26,433,853 |
|
29,307,288 |
|
||
|
|
|
|
|
|
||
Income in equity method investment |
|
73,123 |
|
|
|
||
Interest income, net |
|
91,416 |
|
272,847 |
|
||
|
|
|
|
|
|
||
Income before income taxes |
|
26,598,392 |
|
29,580,135 |
|
||
|
|
|
|
|
|
||
Provision for income taxes |
|
10,214,351 |
|
11,630,665 |
|
||
|
|
|
|
|
|
||
Net income |
|
$ |
16,384,041 |
|
$ |
17,949,470 |
|
|
|
|
|
|
|
||
Net income per common share |
|
|
|
|
|
||
Basic |
|
$ |
0.34 |
|
$ |
0.37 |
|
Diluted |
|
$ |
0.33 |
|
$ |
0.36 |
|
|
|
|
|
|
|
||
Cash dividends declared per common share |
|
$ |
0.05 |
|
$ |
0.05 |
|
|
|
|
|
|
|
||
Number of shares outstanding |
|
|
|
|
|
||
Basic |
|
47,974,289 |
|
48,544,544 |
|
||
Diluted |
|
48,934,352 |
|
49,328,540 |
|
The accompanying notes are an integral part of these condensed consolidated financial statements.
3
Simpson Manufacturing Co., Inc. and Subsidiaries
Condensed Consolidated Statements of Stockholders Equity
for the three months ended March 31, 2005 and 2004 and the nine months ended December 31, 2004
(Unaudited)
|
|
|
|
|
|
|
|
|
|
Accumulated |
|
|
|
|
|
||||||||||||
|
|
|
|
|
|
Additional |
|
|
|
Other |
|
|
|
|
|
||||||||||||
|
|
Common Stock |
|
Paid-in |
|
Retained |
|
Comprehensive |
|
Treasury |
|
|
|
||||||||||||||
|
|
Shares |
|
Par Value |
|
Capital |
|
Earnings |
|
Income |
|
Stock |
|
Total |
|
||||||||||||
Balance, January 1, 2004 |
|
48,510,588 |
|
$ |
497,792 |
|
$ |
63,334,758 |
|
$ |
357,916,036 |
|
$ |
7,982,663 |
|
$ |
(29,426,998 |
) |
$ |
400,304,251 |
|
||||||
Comprehensive income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net income |
|
|
|
|
|
|
|
17,949,470 |
|
|
|
|
|
17,949,470 |
|
||||||||||||
Other comprehensive income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Change in net unrealized gains or losses on available-for-sale investments |
|
|
|
|
|
|
|
|
|
1,367 |
|
|
|
1,367 |
|
||||||||||||
Translation adjustment |
|
|
|
|
|
|
|
|
|
(796,278 |
) |
|
|
(796,278 |
) |
||||||||||||
Comprehensive income |
|
|
|
|
|
|
|
|
|
|
|
|
|
17,154,559 |
|
||||||||||||
Options exercised |
|
25,000 |
|
250 |
|
246,809 |
|
|
|
|
|
|
|
247,059 |
|
||||||||||||
Stock compensation expense |
|
|
|
|
|
1,339,246 |
|
|
|
|
|
|
|
1,339,246 |
|
||||||||||||
Tax benefit of options exercised |
|
|
|
|
|
144,258 |
|
|
|
|
|
|
|
144,258 |
|
||||||||||||
Cash dividends declared on Common stock ($0.05 per share) |
|
|
|
|
|
|
|
(2,427,640 |
) |
|
|
|
|
(2,427,640 |
) |
||||||||||||
Common stock issued at $25.43 per share |
|
17,200 |
|
172 |
|
437,224 |
|
|
|
|
|
|
|
437,396 |
|
||||||||||||
Balance, March 31, 2004 |
|
48,552,788 |
|
498,214 |
|
65,502,295 |
|
373,437,866 |
|
7,187,752 |
|
(29,426,998 |
) |
417,199,129 |
|
||||||||||||
Comprehensive income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net income |
|
|
|
|
|
|
|
63,558,873 |
|
|
|
|
|
63,558,873 |
|
||||||||||||
Other comprehensive income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Change in net unrealized gains or losses on available-for-sale investments |
|
|
|
|
|
|
|
|
|
(63,260 |
) |
|
|
(63,260 |
) |
||||||||||||
Translation adjustment |
|
|
|
|
|
|
|
|
|
6,290,377 |
|
|
|
6,290,377 |
|
||||||||||||
Comprehensive income |
|
|
|
|
|
|
|
|
|
|
|
|
|
69,785,990 |
|
||||||||||||
Options exercised |
|
367,834 |
|
3,678 |
|
3,523,809 |
|
|
|
|
|
|
|
3,527,487 |
|
||||||||||||
Stock compensation expense |
|
|
|
|
|
3,110,173 |
|
|
|
|
|
|
|
3,110,173 |
|
||||||||||||
Tax benefit of options exercised |
|
|
|
|
|
2,742,104 |
|
|
|
|
|
|
|
2,742,104 |
|
||||||||||||
Repurchase of common stock |
|
(1,150,854 |
) |
|
|
|
|
|
|
|
|
(31,273,933 |
) |
(31,273,933 |
) |
||||||||||||
Retirement of treasury stock |
|
|
|
(24,194 |
) |
|
|
(60,676,737 |
) |
|
|
60,700,931 |
|
|
|
||||||||||||
Cash dividends declared on Common stock ($0.15 per share) |
|
|
|
|
|
|
|
(7,165,742 |
) |
|
|
|
|
(7,165,742 |
) |
||||||||||||
2-for-1 stock split effected in the form of a stock dividend |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Common stock issued $31.40 per share for acquisition |
|
159,234 |
|
1,592 |
|
4,998,408 |
|
|
|
|
|
|
|
5,000,000 |
|
||||||||||||
Balance, December 31, 2004 |
|
47,929,002 |
|
479,290 |
|
79,876,789 |
|
369,154,260 |
|
13,414,869 |
|
|
|
462,925,208 |
|
||||||||||||
Comprehensive income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net income |
|
|
|
|
|
|
|
16,384,041 |
|
|
|
|
|
16,384,041 |
|
||||||||||||
Other comprehensive income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Change in net unrealized gains or losses on available-for-sale investments |
|
|
|
|
|
|
|
|
|
659 |
|
|
|
659 |
|
||||||||||||
Translation adjustment |
|
|
|
|
|
|
|
|
|
(2,569,320 |
) |
|
|
(2,569,320 |
) |
||||||||||||
Comprehensive income |
|
|
|
|
|
|
|
|
|
|
|
|
|
13,815,380 |
|
||||||||||||
Options exercised |
|
46,170 |
|
462 |
|
601,766 |
|
|
|
|
|
|
|
602,228 |
|
||||||||||||
Stock compensation expense |
|
|
|
|
|
1,579,625 |
|
|
|
|
|
|
|
1,579,625 |
|
||||||||||||
Tax benefit of options exercised |
|
|
|
|
|
316,395 |
|
|
|
|
|
|
|
316,395 |
|
||||||||||||
Cash dividends declared on Common stock ($0.05 per share) |
|
|
|
|
|
|
|
(2,398,000 |
) |
|
|
|
|
(2,398,000 |
) |
||||||||||||
Common stock issued at $34.91 per share |
|
19,000 |
|
190 |
|
663,110 |
|
|
|
|
|
|
|
663,300 |
|
||||||||||||
Balance, March 31, 2005 |
|
47,994,172 |
|
$ |
479,942 |
|
$ |
83,037,685 |
|
$ |
383,140,301 |
|
$ |
10,846,208 |
|
$ |
|
|
$ |
477,504,136 |
|
||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
4
Simpson Manufacturing Co., Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(Unaudited)
|
|
Three
Months |
|
||||
|
|
2005 |
|
2004 |
|
||
Cash flows from operating activities |
|
|
|
|
|
||
Net income |
|
$ |
16,384,041 |
|
$ |
17,949,470 |
|
Adjustments to reconcile net income to net cash used in operating activities: |
|
|
|
|
|
||
Gain on sale of capital equipment |
|
(73,695 |
) |
(40,997 |
) |
||
Depreciation and amortization |
|
6,488,890 |
|
4,717,031 |
|
||
Deferred income taxes |
|
(1,693,248 |
) |
(528,818 |
) |
||
Noncash compensation related to stock plans |
|
1,679,625 |
|
1,506,133 |
|
||
Income in equity method investment |
|
(73,123 |
) |
|
|
||
Tax benefit of options exercised |
|
316,395 |
|
144,258 |
|
||
Provision for obsolete inventory |
|
521,533 |
|
682,801 |
|
||
Provision for doubtful accounts |
|
19,300 |
|
(276,528 |
) |
||
Changes in operating assets and liabilities, net of effects of acquisitions: |
|
|
|
|
|
||
Trade accounts receivable |
|
(21,435,007 |
) |
(39,731,096 |
) |
||
Inventories |
|
1,307,566 |
|
(10,008,066 |
) |
||
Trade accounts payable |
|
2,925,952 |
|
(2,305,357 |
) |
||
Income taxes payable |
|
10,765,516 |
|
10,001,229 |
|
||
Accrued profit sharing trust contributions |
|
(4,311,450 |
) |
(3,931,734 |
) |
||
Accrued cash profit sharing and commissions |
|
374,003 |
|
3,125,651 |
|
||
Other current assets |
|
(1,910,056 |
) |
(2,457,741 |
) |
||
Accrued liabilities |
|
(3,837,533 |
) |
753,470 |
|
||
Other long-term liabilities |
|
(5,191 |
) |
587,916 |
|
||
Accrued workers compensation |
|
(166,263 |
) |
50,000 |
|
||
Other noncurrent assets |
|
(95,195 |
) |
26,543 |
|
||
Net cash provided by (used in) operating activities |
|
7,182,060 |
|
(19,735,835 |
) |
||
|
|
|
|
|
|
||
Cash flows from investing activities |
|
|
|
|
|
||
Capital expenditures |
|
(6,409,825 |
) |
(6,113,235 |
) |
||
Proceeds from sale of capital equipment |
|
94,211 |
|
40,541 |
|
||
Purchases of available-for-sale investments |
|
|
|
(26,217,348 |
) |
||
Sales of available-for-sale investments |
|
3,000,000 |
|
25,500,000 |
|
||
Net cash used in investing activities |
|
(3,315,614 |
) |
(6,790,042 |
) |
||
|
|
|
|
|
|
||
Cash flows from financing activities |
|
|
|
|
|
||
Line of credit borrowings |
|
1,140,245 |
|
1,874,190 |
|
||
Repayment of debt and line of credit borrowings |
|
(20,110 |
) |
(125,498 |
) |
||
Issuance of Companys common stock |
|
602,228 |
|
247,059 |
|
||
Dividends paid |
|
(2,397,409 |
) |
|
|
||
Net cash (used in) provided by financing activities |
|
(675,046 |
) |
1,995,751 |
|
||
|
|
|
|
|
|
||
Effect of exchange rate changes on cash |
|
(197,918 |
) |
(159,517 |
) |
||
|
|
|
|
|
|
||
Net increase (decrease) in cash and cash equivalents |
|
2,993,482 |
|
(24,689,643 |
) |
||
Cash and cash equivalents at beginning of period |
|
30,916,357 |
|
95,135,885 |
|
||
Cash and cash equivalents at end of period |
|
$ |
33,909,839 |
|
$ |
70,446,242 |
|
|
|
|
|
|
|
||
Noncash capital expenditures |
|
$ |
448,910 |
|
$ |
38,076 |
|
Dividends declared but not paid |
|
$ |
2,398,000 |
|
$ |
2,427,640 |
|
Issuance of Companys common stock for compensation |
|
$ |
663,300 |
|
$ |
437,396 |
|
The accompanying notes are an integral part of these condensed consolidated financial statements.
5
Simpson Manufacturing Co., Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
(Unaudited)
1. Basis of Presentation
Principles of Consolidation
The consolidated financial statements include the accounts of Simpson Manufacturing Co., Inc. and its subsidiaries. Investments in less than 50% owned affiliates are generally accounted for using either cost or the equity method. All significant intercompany transactions have been eliminated.
Interim Period Reporting
The accompanying unaudited interim condensed consolidated financial statements have been prepared pursuant to the rules and regulations for reporting on Form 10-Q. Accordingly, certain information and footnotes required by accounting principles generally accepted in the United States of America have been condensed or omitted. These interim statements should be read in conjunction with the consolidated financial statements and the notes thereto included in Simpson Manufacturing Co., Inc.s (the Companys) 2004 Annual Report on Form 10-K (the 2004 Annual Report).
The unaudited quarterly condensed consolidated financial statements have been prepared on the same basis as the audited annual consolidated financial statements and, in the opinion of management, contain all adjustments (consisting of only normal recurring adjustments) necessary to state fairly the financial information set forth therein, in accordance with accounting principles generally accepted in the United States of America. The year-end condensed consolidated balance sheet data were derived from audited financial statements, but do not include all disclosures required by accounting principles generally accepted in the United States of America. The Companys quarterly results may be subject to fluctuations. As a result, the Company believes the results of operations for the interim periods are not necessarily indicative of the results to be expected for any future period.
Revenue Recognition
The Company recognizes revenue when the earnings process is complete, net of applicable provision for discounts, returns and allowances, whether actual or estimated based on the Companys experience. This generally occurs when products are shipped to the customer in accordance with the sales agreement or purchase order, ownership and risk of loss pass to the customer, collectibility is reasonably assured and pricing is fixed or determinable. The Companys general shipping terms are F.O.B. shipping point, where title is transferred and revenue is recognized when the products are shipped to customers. When the Company sells F.O.B. destination point, title is transferred and the Company recognizes revenue on delivery. If the actual costs of sales returns, allowances, and discounts were to exceed the recorded estimated allowance, the Companys sales would be adversely affected. Accrued sales returns have not been material and have been within managements expectations. Service sales, representing aftermarket repair and maintenance and engineering activities, though significantly less than 1% of net sales and not material to the financial statements, are recognized as the services are completed.
Treasury Stock
The Company records treasury stock purchases under the cost method whereby the entire cost of the acquired stock is recorded as treasury stock. Upon retirement, the resulting gains or losses are credited or charged to retained earnings.
Net Income Per Common Share
Basic net income per common share is computed based upon the weighted average number of common shares outstanding. Potentially dilutive securities, using the treasury stock method, are included in the diluted per-share calculations for all periods when the effect of their inclusion is dilutive.
6
The following is a reconciliation of basic earnings per share (EPS) to diluted EPS:
|
|
Three
Months Ended |
|
Three
Months Ended |
|
||||||||||||
|
|
Income |
|
Shares |
|
Per |
|
Income |
|
Shares |
|
Per |
|
||||
Basic EPS |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Income available to common stockholders |
|
$ |
16,384,041 |
|
47,974,289 |
|
$ |
0.34 |
|
$ |
17,949,470 |
|
48,544,544 |
|
$ |
0.37 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Effect of Dilutive Securities |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Stock options |
|
|
|
960,063 |
|
(0.01 |
) |
|
|
783,996 |
|
(0.01 |
) |
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Diluted EPS |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Income available to common stockholders |
|
$ |
16,384,041 |
|
48,934,352 |
|
$ |
0.33 |
|
$ |
17,949,470 |
|
49,328,540 |
|
$ |
0.36 |
|
For the quarter ended March 31, 2005, 94,677 shares attributable to outstanding stock options were excluded from the calculation of diluted earnings per share because their inclusion would have been anti-dilutive.
Accounting for Stock-Based Compensation
The Company maintains two stock option plans under which the Company may grant incentive stock options and non-qualified stock options to employees, consultants and non-employee directors. Stock options have been granted with exercise prices at or above the fair market value on the date of grant. Options vest and expire according to terms established at the grant date.
As of January 1, 2003, the Company adopted Statement of Financial Accounting Standards (SFAS) No. 148 and SFAS No. 123 and used the prospective method of applying SFAS No. 123 for the transition. For stock options that have been granted prior to January 1, 2003, the Company will continue to account for stock-based compensation using the intrinsic value method prescribed in Accounting Principles Board (APB) Opinion No. 25, Accounting for Stock Issued to Employees, and related interpretations. Accordingly, because the grant price equaled or exceeded the market price on the date of grant for options issued by the Company, no compensation expense has been recognized for stock options granted prior to January 1, 2003. For the three months ended March 31, 2005 and 2004, the Company has recognized after-tax stock option expense of approximately $973,049 and $812,922, respectively.
7
Had compensation cost for the Companys stock options for all grants been recognized based upon the estimated fair value on the grant date under the fair value methodology prescribed by SFAS No. 123, as amended by SFAS No. 148, the Companys net income and earnings per share would have been as follows:
|
|
Three Months Ended |
|
||||
|
|
2005 |
|
2004 |
|
||
Net income, as reported |
|
$ |
16,384,041 |
|
$ |
17,949,470 |
|
Add: Stock-based employee compensation expense included in reported net income, net of related tax effects |
|
973,049 |
|
812,922 |
|
||
Deduct: Total stock-based employee compensation expense determined under the fair value method for all awards granted prior to January 1, 2003, net of related tax effects |
|
980,275 |
|
825,374 |
|
||
Net income, pro forma |
|
$ |
16,376,815 |
|
$ |
17,937,018 |
|
|
|
|
|
|
|
||
Earnings per share |
|
|
|
|
|
||
Basic, as reported |
|
$ |
0.34 |
|
$ |
0.37 |
|
Basic, pro forma |
|
0.34 |
|
0.37 |
|
||
|
|
|
|
|
|
||
Diluted, as reported |
|
0.33 |
|
0.36 |
|
||
Diluted, pro forma |
|
0.33 |
|
0.36 |
|
The assumptions used to calculate the fair value of options granted are evaluated and revised, as necessary, to reflect market conditions and the Companys experience.
In December 2004, the Financial Accounting Standards Board issued SFAS No. 123R, Accounting for Stock-Based Compensation, which revised SFAS No. 123 to require companies to record compensation cost for stock-based employee compensation plans based on the fair value of options granted. While the Company currently accounts for stock options on a fair value basis, additional changes will be required such as those affecting cash flow presentation. SFAS No. 123R is effective as of the beginning of the first annual reporting period that begins after June 15, 2005, and management has not determined all of the effects on the Companys financial statements once effective.
Reclassifications
Certain prior period amounts have been reclassified to conform to the 2005 presentation with no effect on net income or retained earnings as previously reported. These reclassifications were primarily in relation to stockholders equity and between deferred tax assets and liabilities.
2. Trade Accounts Receivable
Trade accounts receivable consist of the following:
|
|
At March 31, |
|
At December 31, |
|
|||||
|
|
2005 |
|
2004 |
|
2004 |
|
|||
Trade accounts receivable |
|
$ |
114,835,195 |
|
$ |
108,936,659 |
|
$ |
93,515,436 |
|
Allowance for doubtful accounts |
|
(2,399,876 |
) |
(1,573,209 |
) |
(2,397,302 |
) |
|||
Allowance for sales discounts and returns |
|
(1,827,817 |
) |
(1,358,982 |
) |
(1,311,385 |
) |
|||
|
|
$ |
110,607,502 |
|
$ |
106,004,468 |
|
$ |
89,806,749 |
|
8
3. Inventories
The components of inventories consist of the following:
|
|
At March 31, |
|
At December 31, |
|
|||||
|
|
2005 |
|
2004 |
|
2004 |
|
|||
Raw materials |
|
$ |
77,752,620 |
|
$ |
47,085,114 |
|
$ |
91,910,430 |
|
In-process products |
|
23,212,185 |
|
15,109,278 |
|
22,234,940 |
|
|||
Finished products |
|
89,083,933 |
|
53,096,505 |
|
78,733,948 |
|
|||
|
|
$ |
190,048,738 |
|
$ |
115,290,897 |
|
$ |
192,879,318 |
|
4. Property, Plant and Equipment, net
Property, plant and equipment, net consists of the following:
|
|
At March 31, |
|
At December 31, |
|
|||||
|
|
2005 |
|
2004 |
|
2004 |
|
|||
Land |
|
$ |
13,863,789 |
|
$ |
13,130,093 |
|
$ |
13,870,992 |
|
Buildings and site improvements |
|
66,626,613 |
|
63,761,809 |
|
67,215,428 |
|
|||
Leasehold improvements |
|
6,816,523 |
|
5,861,256 |
|
6,837,774 |
|
|||
Machinery and equipment |
|
148,264,612 |
|
128,187,553 |
|
147,442,008 |
|
|||
|
|
235,571,537 |
|
210,940,711 |
|
235,366,202 |
|
|||
Less accumulated depreciation and amortization |
|
(126,289,028 |
) |
(109,787,233 |
) |
(121,610,695 |
) |
|||
|
|
109,282,509 |
|
101,153,478 |
|
113,755,507 |
|
|||
Capital projects in progress |
|
28,666,671 |
|
7,324,503 |
|
23,853,293 |
|
|||
|
|
$ |
137,949,180 |
|
$ |
108,477,981 |
|
$ |
137,608,800 |
|
Gains or losses on disposal of capital equipment are reported in the general and administrative expenses in the consolidated statements of operations.
5. Investments
Equity Method Investment
The Company has a 35% investment in Keymark Enterprises, LLC (Keymark), for which it accounts using the equity method. Keymark develops software that assists in the design and engineering of residential structures. The Companys relationship with Keymark includes the specification of its products in the Keymark software. The Company has no obligation to make any additional future capital contributions, nor does it intend to provide additional funding to Keymark. In 2001, after several quarters of losses, the Company concluded that the carrying value of its investment in Keymark exceeded its fair value and therefore wrote down the value of its investment to zero. However, after three consecutive quarters of profitability in 2004, the Company began recording its share of Keymarks 2005 profits and as of March 31, 2005, the carrying value of this investment was $73,123.
9
Available-for-Sale Investments
The Companys investments in debt securities are classified as either cash and cash equivalents or available-for-sale investments. As of March 31, 2005 and 2004, and December 31, 2004, the Companys investments were as follows:
|
|
Amortized |
|
Gross |
|
Gross |
|
Estimated |
|
||||
At March 31, 2005 |
|
|
|
|
|
|
|
|
|
||||
Debt investments |
|
|
|
|
|
|
|
|
|
||||
Municipal bonds |
|
$ |
13,895,960 |
|
$ |
|
|
$ |
57,257 |
|
$ |
13,838,703 |
|
|
|
|
|
|
|
|
|
|
|
||||
At March 31, 2004 |
|
|
|
|
|
|
|
|
|
||||
Debt investments |
|
|
|
|
|
|
|
|
|
||||
Municipal bonds |
|
$ |
45,451,236 |
|
$ |
34,630 |
|
$ |
29,285 |
|
$ |
45,456,581 |
|
Commercial paper |
|
5,106,910 |
|
|
|
|
|
5,106,910 |
|
||||
Total debt investments |
|
50,558,146 |
|
34,630 |
|
29,285 |
|
50,563,491 |
|
||||
Money market instruments and funds |
|
19,997 |
|
|
|
|
|
19,997 |
|
||||
|
|
$ |
50,578,143 |
|
$ |
34,630 |
|
$ |
29,285 |
|
$ |
50,583,488 |
|
|
|
|
|
|
|
|
|
|
|
||||
At December 31, 2004 |
|
|
|
|
|
|
|
|
|
||||
Debt investments |
|
|
|
|
|
|
|
|
|
||||
Municipal bonds |
|
$ |
17,090,075 |
|
$ |
|
|
$ |
57,916 |
|
$ |
17,032,159 |
|
Total debt investments |
|
17,090,075 |
|
|
|
57,916 |
|
17,032,159 |
|
||||
Money market instruments and funds |
|
85,514 |
|
|
|
|
|
85,514 |
|
||||
|
|
$ |
17,175,589 |
|
$ |
|
|
$ |
57,916 |
|
$ |
17,117,673 |
|
Of the total estimated fair value of debt securities, $5,126,907 and $85,514 were classified as cash and cash equivalents as of March 31, 2004 and December 31, 2004, respectively, and $13,838,703, $45,456,581, and $17,032,159 were classified as short-term investments as of March 31, 2005 and 2004, and December 31, 2004, respectively.
As of March 31, 2005, contractual maturities of the Companys available-for-sale investments were as follows:
|
|
Amortized |
|
Estimated |
|
||
Amounts maturing in less than 1 year |
|
$ |
13,395,960 |
|
$ |
13,338,703 |
|
Amounts maturing in 1 - 5 years |
|
|
|
|
|
||
Amounts maturing in 5 - 10 years |
|
|
|
|
|
||
Amounts maturing after 10 years |
|
500,000 |
|
500,000 |
|
||
|
|
$ |
13,895,960 |
|
$ |
13,838,703 |
|
10
6. Debt
Outstanding debt at March 31, 2005 and 2004, and December 31, 2004, and the available credit at March 31, 2005, consisted of the following:
|
|
Available |
|
Debt Outstanding |
|
||||||||
|
|
Credit at |
|
at |
|
at |
|
||||||
|
|
March 31, |
|
March 31, |
|
December 31, |
|
||||||
|
|
2005 |
|
2005 |
|
2004 |
|
2004 |
|
||||
Revolving line of credit, interest at banks reference rate less 0.50% (at March 31, 2005, the banks reference rate less 0.50% was 5.25%), expires November 2006 |
|
$ |
13,800,000 |
|
$ |
|
|
$ |
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Revolving term commitment, interest at banks prime rate less 0.50% (at March 31, 2005, the banks prime rate less 0.50% was 5.25%), expires June 2006 |
|
9,200,000 |
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
||||
Revolving line of credit, interest at the banks base rate plus 2% (at March 31, 2005, the banks base rate plus 2% was 6.75%), expires September 2005 |
|
1,300,068 |
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
||||
Revolving line of credit, interest at 4.50%, expires August 2005 |
|
3,669,288 |
|
1,149,314 |
|
1,846,227 |
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
||||
Term loan, interest at LIBOR plus 1.375% (at March 31, 2005, LIBOR plus 1.375% was 4.065%), matures June 2008 |
|
|
|
1,050,000 |
|
1,350,000 |
|
1,050,000 |
|
||||
|
|
|
|
|
|
|
|
|
|
||||
Term loans, interest rates between 2.94% and 5.60%, expirations between 2005 and 2018 |
|
|
|
1,761,209 |
|
4,669,368 |
|
1,926,084 |
|
||||
|
|
27,969,356 |
|
3,960,523 |
|
7,865,595 |
|
2,976,084 |
|
||||
|
|
|
|
|
|
|
|
|
|
||||
Less line of credit and current portion of long-term debt |
|
|
|
(1,715,170 |
) |
(2,666,161 |
) |
(579,198 |
) |
||||
Long-term debt, net of current portion |
|
|
|
$ |
2,245,353 |
|
$ |
5,199,434 |
|
$ |
2,396,886 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Available credit |
|
$ |
27,969,356 |
|
|
|
|
|
|
|
7. Commitments and Contingencies
Note 9 to the consolidated financial statements in the Companys 2004 Annual Report provides information concerning commitments and contingencies. From time to time, the Company is involved in various legal proceedings and other matters arising in the normal course of business. However the resolution of outstanding claims and litigation is subject to inherent uncertainty and it is at least reasonably possible that such resolution could have an adverse effect on the Company.
The Companys policy with regard to environmental liabilities is to accrue for future environmental assessments and remediation costs when information becomes available that indicates that it is probable that the Company is liable for any related claims and assessments and the amount of the liability is reasonably estimable. The Company does not believe that these matters will have a material adverse effect on the Companys financial condition, cash flows or results of operations.
Corrosion, hydrogen enbrittlement, stress corrosion cracking, hardness, wood pressure-treating chemicals (such as copper), misinstallations, environmental conditions or other factors can contribute to failure of fasteners and connectors. On occasion, some of the fasteners that the Company sells have failed, although the Company has not incurred any material liability resulting from those failures. The Company attempts to avoid such failures by establishing and monitoring appropriate product specifications, manufacturing quality control procedures, inspection procedures and information on appropriate installation methods and conditions.
11
The Company subjects its products to extensive testing, with results and conclusions published in Company catalogues and on its website (see www.strongtie.com/info). Based on test results to date, the Company believes that if its products are appropriately selected and installed in accordance with the Companys guidance, they may be reliably used in appropriate applications.
8. Segment Information
The Company is organized into two primary segments. The segments are defined by types of products manufactured, marketed and distributed to the Companys customers. The two product segments are connector products and venting products. These segments are differentiated in several ways, including the types of materials used, the production process, the distribution channels used and the applications in which the products are used. Transactions between the two segments were immaterial for each of the periods presented.
The following table illustrates certain measurements used by management to assess the performance of the segments described above as of or for the following periods:
|
|
Three
Months Ended |
|
|
|
|||||
|
|
2005 |
|
2004 |
|
|
|
|||
Net Sales |
|
|
|
|
|
|
|
|||
Connector products |
|
$ |
166,993,000 |
|
$ |
142,510,000 |
|
|
|
|
Venting products |
|
17,223,000 |
|
17,406,000 |
|
|
|
|||
Total |
|
$ |
184,216,000 |
|
$ |
159,916,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|||
Income from Operations |
|
|
|
|
|
|
|
|||
Connector products |
|
$ |
26,782,000 |
|
$ |
28,537,000 |
|
|
|
|
Venting products |
|
65,000 |
|
1,639,000 |
|
|
|
|||
Administrative and all other |
|
(413,000 |
) |
(869,000 |
) |
|
|
|||
Total |
|
$ |
26,434,000 |
|
$ |
29,307,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
At |
|
|||
|
|
At March 31, |
|
December 31, |
|
|||||
|
|
2005 |
|
2004 |
|
2004 |
|
|||
Total Assets |
|
|
|
|
|
|
|
|||
Connector products |
|
$ |
442,471,000 |
|
$ |
317,907,000 |
|
$ |
427,418,000 |
|
Venting products |
|
59,225,000 |
|
42,671,000 |
|
56,188,000 |
|
|||
Administrative and all other |
|
59,042,000 |
|
127,446,000 |
|
61,531,000 |
|
|||
Total |
|
$ |
560,738,000 |
|
$ |
488,024,000 |
|
$ |
545,137,000 |
|
Cash collected by the Companys subsidiaries is routinely transferred into the Companys cash management accounts and, therefore, has been included in the total assets of the segment entitled Administrative and all other. Cash and cash equivalent and short-term investment balances in the Administrative and all other segment were approximately $47,019,000, $115,685,000 and $47,023,000 as of March 31, 2005 and 2004, and December 31, 2004, respectively.
9. Subsequent Events
In May 2005, the Companys Board of Directors declared a cash dividend of $0.05 per share, totaling approximately $2.4 million. The record date for the cash dividend is July 7, 2005, and it will be paid on July 27, 2005.
In May 2005, the Company completed the purchase, for approximately $4.1 million, of the facility that it previously rented from a related party in Columbus, Ohio.
12
Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations.
Certain matters discussed below are forward-looking statements that involve risks and uncertainties, certain of which are discussed in this report and in other reports filed by the Company with the Securities and Exchange Commission. Actual results might differ materially from results suggested by any forward-looking statements in this report.
The following is a discussion and analysis of the consolidated financial condition and results of operations for the Company for the three months ended March 31, 2005 and 2004. The following should be read in conjunction with the interim Condensed Consolidated Financial Statements and related Notes appearing elsewhere herein.
In November 2004, the Company completed a 2-for-1 stock split effected in the form of a stock dividend of its common stock. All of the share and per share numbers have been adjusted to reflect this stock split.
Results of Operations for the Three Months Ended March 31, 2005, Compared
with the Three Months Ended March 31, 2004
Net sales increased 15.2% to $184,215,855 as compared to net sales of $159,915,734 for the first quarter of 2004. Net income decreased 8.7% to $16,384,041 for the first quarter of 2005 as compared to net income of $17,949,470 for the first quarter of 2004. Diluted net income per common share was $0.33 for the first quarter of 2005 as compared to $0.36 for the first quarter of 2004.
In the first quarter of 2005, sales growth occurred throughout Europe and North America, with the exception of California. The growth in the United States was strongest in the western region, excluding California, and the southern region. While sales increased overall, the increase was primarily due to higher sales prices and to the sales related to the acquisition of the Quik Drive product line in the fourth quarter of 2004. Simpson Strong-Ties first quarter sales increased 17.2% over the same quarter last year, while Simpson Dura-Vents sales decreased 1.1%. Lumber dealers were the fastest growing Simpson Strong-Tie sales channel. The sales increase was broad based across most of Simpson Strong-Ties major product lines. Anchor systems, engineered wood products and seismic and high wind products had the highest percentage growth rates in sales, while sales of core products, which include joist hangers and column bases, were flat. Sales of Simpson Strong-Ties Strong-Wall product line, with a substantial share of its sales in California, were down significantly from the first quarter of 2004. Sales of Simpson Dura-Vents Direct-Vent product line was up somewhat while sales of its chimney and pellet vent products decreased compared to the first quarter of 2004.
Income from operations decreased 9.8% from $29,307,288 in the first quarter of 2004 to $26,433,853 in the first quarter of 2005 and gross margins decreased from 40.4% in the first quarter of 2004 to 35.0% in the first quarter of 2005. This decrease was primarily due to increased material costs, mainly steel, which increased at a faster rate than the sales price increases that the Company put in place during 2004 and early 2005. The Companys raw material inventory as of March 31, 2005, decreased 15.4% from December 31, 2004, while its in-process and finished goods inventory increased by 11.2% over the same period.
Selling expenses increased 21.7% from $13,045,528 in the first quarter of 2004 to $15,877,818 in the first quarter of 2005, primarily due to increased costs associated with the addition of sales and marketing personnel, including those associated with the acquisition of the assets of Quik Drive, U.S.A., Inc. and Quik Drive Canada, Inc. and 100% of the equity of Quik Drive Australia Pty. Limited (collectively Quik Drive), of approximately $1,500,000. In addition, advertising and promotional expenses increased by approximately $650,000 as a result of increased consumer advertising efforts. General and administrative expenses decreased 0.1% from $22,225,820 in the first quarter of 2004 to $22,204,680 in the first quarter of 2005. The decrease was primarily due to a decrease in cash profit sharing of approximately $2,200,000, as a result of decreased operating profit, and a decrease in donations relative to the first quarter of 2004 when the Company donated $500,000 to a university in central California to help fund the research and development of innovative construction practices. Offsetting these decreases in general and administrative expenses were several factors including increased amortization of intangible assets, primarily those associated with the Quik Drive acquisition, of approximately $500,000, increased costs associated with the addition of administrative personnel, including those associated with the Quik Drive acquisition, of approximately $500,000, higher fees associated with compliance with the Sarbanes-Oxley Act of 2002 of approximately $400,000, higher bad debt expense of approximately $300,000 relative to the same quarter last year, primarily due to favorable collections experience in the first quarter of 2004, and higher stock compensation costs of approximately $200,000. The tax rate was 38.4% in the first quarter of 2005, down from 39.3% in the first quarter of 2004. The decrease was primarily due
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to lower taxable income as a result of the new manufacturing deduction for qualified production activity income under the American Jobs Creation Act of 2004.
Liquidity and Sources of Capital
As of March 31, 2005, working capital was $283.3 million as compared to $284.6 million at March 31, 2004, and $268.7 million at December 31, 2004. The increase in working capital from December 31, 2004, was primarily due to an increase in the Companys trade accounts receivable of approximately $20.8 million. Net accounts receivable increased 23.2% from December 31, 2004, primarily due to the increase in sales. In addition, accrued liabilities decreased by approximately $4.6 million, primarily as a result of lower accrued sales incentives and allowances. Offsetting this increase in working capital was a shift from prepaid income taxes to income taxes payable totaling approximately $10.8 million, a decrease in total inventories of approximately $2.8 million, and an increase in net trade accounts payable of approximately $3.1 million. The balance of the change in working capital was due to the fluctuation of various other asset and liability accounts. The working capital change and changes in noncurrent assets and liabilities, combined with net income and noncash expenses, including depreciation, amortization, stock-based compensation charges and provisions for obsolete inventory and doubtful accounts, totaling approximately $25.1 million, resulted in net cash provided by operating activities of approximately $7.2 million. As of March 31, 2005, the Company had unused credit facilities available of approximately $28.0 million.
The Company used approximately $3.3 million in its investing activities. Approximately $6.4 million was used for capital expenditures, primarily for machinery and equipment for its facilities in McKinney, Texas, San Leandro and Vacaville, California, and Vicksburg, Mississippi. This was offset by the redemptions of available-for-sale securities of approximately $3.0 million. The Company expects its total capital spending to be approximately $60.0 million to $65.0 million for 2005.
In May 2005, the Company completed the purchase, for approximately $4.1 million, of the facility that it previously rented from a related party in Columbus, Ohio. In March 2005, the Company began construction on an expansion facility in Columbus on land adjacent to the current facility and is planning to spend approximately $14.6 million. In February 2005, the Company signed a letter of intent to purchase two buildings in Pleasanton, California, for approximately $9.6 million. The buildings comprise approximately 89,000 square feet and will be used for the Companys home office, replacing the facility that the Company currently leases in Dublin, California. The Company is currently in the process of due diligence and, if that is satisfactorily completed, the transaction is expected to close in August 2005. If this transaction is completed, the Company expects to move in to the new building and vacate its leased property in Dublin, California, in mid-2006. The Company has not finalized its plans at this time, but anticipates a one-time charge to income in 2005 for the remaining lease payments at the Dublin facility and a noncash charge in 2005 for the unamortized leasehold improvements related to the Dublin facility, which it estimates will total approximately $1.6 million. The Company vacated and has listed its original McKinney, Texas, facility for sale but cannot reasonably estimate when it will be sold or the proceeds of such a sale.
The Companys financing activities used net cash of approximately $0.7 million. Cash provided by financing activities were primarily from borrowings on the Companys credit lines of its European subsidiaries of approximately $1.1 million and the issuance of the Companys stock through its stock option plan of approximately $0.6 million. Uses of cash for financing activities were primarily from the payment of cash dividends of approximately $2.4 million in January 2005 which were declared in September 2004. In May 2005, the Companys Board of Directors declared a cash dividend of $0.05 per share, totaling approximately $2.4 million. The record date for the cash dividend is July 7, 2005, and it will be paid on July 27, 2005.
The Company believes that cash generated by operations and borrowings available under its existing credit agreements will be sufficient for the Companys working capital needs and planned capital expenditures over the next twelve months. Depending on the Companys future growth and possible acquisitions, it may become necessary to secure additional sources of financing.
The Company believes that the effect of inflation on the Company has not been material in recent years, as inflation rates have remained relatively low. However, recent increases in the price of steel, the Companys main raw material, and the possibility of further increases may continue to adversely affect the Companys margins if it cannot recover the higher costs through price increases.
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Item 3. Quantitative and Qualitative Disclosures About Market Risk.
The Companys short-term investments consisted of debt securities of approximately $13.8 million as of March 31, 2005. These securities, like all fixed income instruments, are subject to interest rate risk and will vary in value as market interest rates fluctuate. If market interest rates were to increase immediately and uniformly by 10% from levels as of March 31, 2005, the decline in the fair value of the investments would not have a material effect on the Companys financial position as of March 31, 2005, or results of operations for the three months then ended.
The Company has foreign exchange rate risk in its international operations, primarily Europe and Canada, and through purchases from foreign vendors. The Company does not currently hedge this risk. If the exchange rate were to change by 10% in any one country where the Company has operations, the change in net income would not be material to its operations taken as a whole. The translation adjustment resulted in a reduction in accumulated other comprehensive income of approximately $2.6 million in the three months ended March 31, 2005, primarily due to the effect of the strengthening of the U.S. dollar in relation to European and Canadian currencies.
Item 4. Controls and Procedures.
Disclosure Controls and Procedures. As of March 31, 2005, an evaluation of the effectiveness of the design and operation of the Companys disclosure controls and procedures was performed under the supervision and with the participation of the Companys management, including the chief executive officer (CEO) and the chief financial officer (CFO). Based on that evaluation, the CEO and the CFO concluded that the Companys disclosure controls and procedures were effective as of that date.
Changes in Internal Control over Financial Reporting. During the three months ended March 31, 2005, the Company made no changes to its internal controls over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) that have materially affected, or are reasonably likely to materially affect, its internal controls over financial reporting.
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PART II OTHER INFORMATION
Item 1. Legal Proceedings.
From time to time, the Company is involved in various legal proceedings and other matters arising in the normal course of business. The Company does not believe that the outcomes of these matters will have a material adverse effect on the Companys financial condition, cash flows or results of operations.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
In December 2004, the Board of Directors authorized the Company to repurchase up to $50.0 million of the Companys common stock. This replaces the $50.0 million repurchase authorization from December 2003. The authorization will remain in effect through the end of 2005. There were no purchases by the Company during the first quarter of 2005.
Dividends are determined by the Companys Board of Directors, based on the Companys earnings, cash flow, financial condition and other factors deemed relevant by the Board of Directors. In addition, existing loan agreements require the Company to maintain tangible net worth of $250.0 million plus 50% of net profit after taxes for each fiscal year. This requirement may limit the amount that the Company may pay out as dividends on the common stock. As of March 31, 2005, the Company had approximately $161.9 million available for the payment of dividends under these loan agreements.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Submission of Matters to a Vote of Security Holders.
None.
Item 5. Other Information.
None.
Item 6. Exhibits.
31. Rule 13a-14(a)/15d-14(a) Certifications.
32. Section 1350 Certifications.
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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 thereunto duly authorized.
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Simpson Manufacturing Co., Inc. |
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(Registrant) |
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DATE: |
May 9, 2005 |
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By |
/s/ Michael J. Herbert |
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Michael J. Herbert |
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Chief Financial Officer |
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