PR Newswire
PLEASANTON, Calif., Feb. 2, 2017
PLEASANTON, Calif., Feb. 2, 2017 /PRNewswire/ -- Simpson Manufacturing Co., Inc. (the "Company") (NYSE: SSD) today announced its fourth quarter 2016 results.
Results of Operations for the Three Months Ended December 31, 2016, Compared with the Three Months Ended December 31, 2015
Unless otherwise stated, the results announced below, when providing comparisons (which are generally indicated by words such as "increased," "decreased," "remained" or "compared to"), compare the results of operations for the three months ended December 31, 2016, against the results of operations for the three months ended December 31, 2015.
To avoid fractional percentages, all percentages presented below were rounded to the nearest whole number except for the estimate for the full-year 2017 gross profit margin below.
Overview
Net sales increased 8% to $200.2 million from $184.8 million. The Company had net income of $17.4 million compared to $14.7 million. Diluted net income per common share was $0.36 compared to $0.30.
Net sales
The Company's net sales increased in all segments.
Gross profit
Gross profit increased to $95.0 million from $82.8 million. Gross profit as a percentage of net sales increased to 47% from 45%.
Based on current information and subject to future events and circumstances, the Company estimates that its full-year 2017 gross profit margin will be between approximately 46.5% and 47.5%.
Research and development and engineering expense
Research and development and engineering expense increased 8% to $12.4 million from $11.5 million, primarily due to increases of $0.4 million in cash profit sharing expense, on increased profits and $0.2 million in personnel costs, mostly related to the addition of staff and pay rate increases instituted on January 1, 2016. The remainder of the increase was primarily due to the write-off of software development costs of $2.0 million in 2016 versus $1.8 million in 2015 all of which occurred in the North America segment.
Selling expense
Selling expense increased to $24.0 million from $22.5 million, primarily due to increases of $0.9 million in personnel costs, $0.6 million in advertising costs, $0.2 million in cash profit sharing and sales commission expenses, mostly due to increased profits, $0.2 million in depreciation expense, and $0.1 million in charitable donations, partly offset by a decrease of $0.6 million in professional fees.
General and administrative expense
General and administrative expense increased 22% to $32.4 million from $26.6 million primarily due to increases of $1.6 million in legal and professional fees, primarily related to acquisition activities, shareholder engagement and board initiatives, such as changes to executive compensation and corporate governance, $1.5 million in stock-based compensation, $0.8 million in cash profit sharing expense on increased profits, $0.6 million in software licensing and maintenance fees, and $0.4 million in contingent compensation, related to prior acquisitions made in Europe, as well as a $1.1 million increase in net foreign currency losses, partly offset by decreases of $0.3 million in bad debt reserve and $0.2 million in facility rent and maintenance expense.
Income taxes
The Company's effective income tax rate decreased to 33% from 34% primarily due to reduced operating losses in the Asia/Pacific segment, for which no income tax benefit was recorded. Based on current information and subject to future events and circumstances, the Company estimates that its full-year 2017 effective tax rate will be between 36% and 37%.
Results of Operations for the Year Ended December 31, 2016, Compared with the Year Ended December 31, 2015
Unless otherwise stated, the results announced below, when providing comparisons (which are generally indicated by words such as "increased," "decreased," "remained" or "compared to"), compare the results of operations for the twelve months ended December 31, 2016, against the results of operations for the twelve months ended December 31, 2015.
To avoid fractional percentages, all percentages presented below were rounded to the nearest whole number.
Overview
Net sales increased 8% to $860.7 million in 2016 from $794.1 million in 2015. The Company had net income of $89.7 million compared to $67.9 million. Diluted net income per common share was $1.86 compared to $1.38.
Net sales
The Company's net sales increased in both North America and Europe segments.
Gross profit
Gross profit increased to $412.5 million from $358.9 million. Gross profit as a percentage of net sales increased to 48% from 45%.
Research and development and engineering expense
Research and development and engineering expense was $46.2 million in both 2016 and 2015, where increases of $2.3 million in cash profit sharing expense on increased profits, $0.7 million in personnel costs, $0.5 million in supply costs, $0.4 million in computer costs and $0.1 in stock-based compensation, were offset by decreases of $4.2 million in non-reoccurring write-offs of software development projects, most of which occurred in the North America segment.
Selling expense
Selling expense increased 8% to $98.3 million from $90.7 million, primarily due to increases of $5.0 million in personnel costs, $2.6 million in cash profit sharing expense on increased profits, and $0.5 million in advertising expense, partly offset by a decrease of $0.8 million in professional fees.
General and administrative expense
General and administrative expense increased 14% to $129.2 million from $113.4 million, primarily due to increases of $5.4 million in cash profit sharing expense on increased profits, $4.0 million in legal and professional fees, primarily related to acquisition activities, shareholder engagement and board initiatives, such as changes to executive compensation and corporate governance, $2.2 million in stock-based compensation, $1.8 million in computer and information technology expense, $1.1 million in personnel costs, and $0.4 million in contingent compensation related to prior acquisitions made in Europe, as well as a $0.9 million increase in net foreign currency losses, partly offset by decreases of $0.6 million in bad debt reserve and $0.1 million in facility rent and maintenance expense.
Income taxes
The Company's effective income tax rate decreased to 35% from 38%, primarily due to reduced operating losses in the Asia/Pacific segment, for which no tax benefit was recorded.
Recent Acquisitions
CG Visions, Inc. ("CG Visions") was acquired in January 2017 for up to approximately $21.5 million, including an earn-out of $2.15 million subject to meeting sales targets, and subject to specified holdback provisions and post-closing adjustment. CG Visions was founded in 2000 to bring new ideas and experience in the digital media and construction fields. The CG Visions team developed its building information modeling ("BIM") technology, estimation tools and software solutions to assist builders to be more efficient and cost-effective. CG Visions also provides BIM consulting services. CG Visions provides its scalable technologies and services to a number of the top 100 mid-sized to large builders in the United States of America.
Based on preliminary unaudited information received from CG Visions' management team, the Company currently believes that for the fiscal year ended December 31, 2016, CG Visions had approximately $5.9 million in net sales and $1.2 million in income from operations before interest and income taxes. Based on such information, and subject to future events and circumstances, the Company believes that it is reasonable to expect that the annual return on investment with respect to the Company's investment in CG Visions will exceed its cost of capital within 4 to 5 years.
Gbo Fastening Systems AB ("Gbo Fastening Systems") was acquired for approximately $10.2 million in January 2017. Gbo Fastening Systems is headquartered in Gunnebo, Sweden, with fastener production and surface treatment capabilities in Sweden and Poland. Gbo Fastening Systems has over 200 employees located in Sweden, Poland, Norway and Romania. The Company expects that the acquisition will (1) give the Company a complete line of CE-marked structural fasteners, unique fastener dimensioning software for wood applications, and access to Gbo Fastening Systems' expertise in product development and testing, and proficiency in fastener manufacturing, surface treatment and painting, (2) enable the Company to develop and expand distribution in other countries, and (3) allow the Company to strengthen Gbo Fastening Systems' global presence and contribute engineering expertise in automatic fastening systems and fastener collation to help Gbo Fastening Systems to broaden both its fastener and structural connectors lines.
Based on preliminary unaudited information received from Gbo Fastening Systems' management, the Company currently believes that for the fiscal year ended December 31, 2016, Gbo Fastening Systems had approximately $42.6 million in net sales and $0.8 million in income from operations before interest, non-reoccurring expenses and income taxes. Based on such information, and subject to future events and circumstances, the Company believes it is reasonable to expect that the annual return on investment with respect Gbo Fastening Systems will exceed its cost of capital within 4 to 5 years, although the Company will incur integration expenses that are expected to result in operating losses during the next 2 years.
While we believe that the unaudited third-party information in connection with our recent acquisitions provide investors with useful information about the financial performance of our acquisition targets and allow for greater transparency with respect to information relied on by our management in evaluating and executing such acquisitions, investors are cautioned that there are material limitations associated with the use of such unaudited information as an analytical tool. For example, these measures may be different from financial measures used by the Company and/or other companies, limiting their usefulness for comparison purposes.
Additional information
At its meeting on January 30, 2017, the Company's Board of Directors declared a cash dividend of $0.18 per share. The record date for the dividend will be April 6, 2017, and it will be paid on April 27, 2017.
Investors, analysts and other interested parties are invited to join the Company's conference call on Friday, February 3, 2017, at 6:00 am Pacific Time. To participate, callers may dial 877-876-9177 (international callers may dial 785-424-1666). 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 within the meaning of the Private Securities Litigation Reform Act of 1995. All statements above relating to events or results that may occur in the future are forward-looking statements, including but not limited to, statements regarding anticipated or estimated steel prices, gross profit margin, and effective tax rate. Forward-looking statements are necessarily speculative in nature, are based on numerous assumptions, and involve known and unknown risks, uncertainties and other factors (some of which are beyond the Company's control) that could significantly affect the Company's operations and may cause the Company's actual actions, results, financial condition, performance or achievements to be substantially different from any future actions, results, financial condition, performance or achievements expressed or implied by any such forward-looking statements. Those factors include, but are not limited to: (i) general economic cycles and construction business conditions; (ii) customer acceptance of the Company's products; (iii) product liability claims, contractual liability, engineering and design liability and similar liabilities or claims, (iv) relationships with key customers; (v) materials and manufacturing costs; (vi) financial conditions of customers, competitors and suppliers; (vii) technological developments including software development; (viii) increased competition; (ix) changes in regulations or industry practices; (x) litigation risks, (xi) changes in market conditions; (xii) governmental and business conditions in countries where the Company's products are manufactured and sold; (xiii) changes in trade regulations; (xiv) effects of merger or acquisition activities; (xv) actual or potential takeover or other change-of-control threats; (xvi) changes in the Company's plans, strategies, objectives, expectations or intentions; and (xvii) other risks and uncertainties indicated from time to time in the Company's filings with the U.S. Securities and Exchange Commission including in the Company's most recent Annual Report on Form 10-K under the heading "Item 1A - Risk Factors." Each forward-looking statement contained in this document is specifically qualified in its entirety by the aforementioned factors. In light of the foregoing, investors are advised to carefully read this document in connection with the important disclaimers set forth above and are urged not to rely on any forward-looking statements in reaching any conclusions or making any investment decisions about the Company or its securities. Except as required by law, the Company does not intend and undertakes no obligation to update, revise or publicly release any updates or revisions to any forward-looking statements hereunder, whether as a result of the receipt of new information, the occurrence of future events, a change in circumstances or otherwise. We further do not accept any responsibility for any projections or reports published by analysts, investors or other third parties. The financial information set forth herein is presented on a preliminary unaudited basis; audited financial statements will be included in the Company's Annual Report on Form 10-K for the period ended December 31, 2016, when filed.
The Company's results of operations (unaudited) for the three and twelve months ended December 31, 2016 and 2015, were as follows:
| Three Months Ended | | Twelve Months Ended | ||||||||||||
(Amounts in thousands, except per share data) | 2016 | | 2015 | | 2016 | | 2015 | ||||||||
Net sales | $ | 200,192 | | | $ | 184,764 | | | $ | 860,661 | | | $ | 794,059 | |
Cost of sales | 105,226 | | | 102,002 | | | 448,211 | | | 435,140 | | ||||
Gross profit | 94,966 | | | 82,762 | | | 412,450 | | | 358,919 | | ||||
Research and development and engineering expense | 12,441 | | | 11,548 | | | 46,248 | | | 46,196 | | ||||
Selling expense | 24,030 | | | 22,508 | | | 98,343 | | | 90,663 | | ||||
General and administrative expense | 32,376 | | | 26,553 | | | 129,162 | | | 113,428 | | ||||
Gain on disposal of assets | (17) | | | (332) | | | (780) | | | (389) | | ||||
Income from operations | 26,136 | | | 22,485 | | | 139,477 | | | 109,021 Werbung Mehr Nachrichten zur Simpson Manufacturing Company Aktie kostenlos abonnieren
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