Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended |
Mar. 31, 2015 | |
Document and Entity Information | |
Entity Registrant Name | SIMPSON MANUFACTURING CO INC /CA/ |
Entity Central Index Key | 920371 |
Document Type | 10-Q |
Document Period End Date | 31-Mar-15 |
Amendment Flag | FALSE |
Current Fiscal Year End Date | -19 |
Entity Current Reporting Status | Yes |
Entity Filer Category | Large Accelerated Filer |
Entity Common Stock, Shares Outstanding | 49,359,823 |
Document Fiscal Year Focus | 2015 |
Document Fiscal Period Focus | Q1 |
Condensed_Consolidated_Balance
Condensed Consolidated Balance Sheets (USD $) | Mar. 31, 2015 | Dec. 31, 2014 | Mar. 31, 2014 |
In Thousands, unless otherwise specified | |||
Current assets | |||
Cash and cash equivalents | $233,587 | $260,307 | $211,988 |
Trade accounts receivable, net | 117,316 | 92,015 | 114,159 |
Inventories | 205,312 | 216,545 | 216,529 |
Deferred income taxes | 12,666 | 14,662 | 12,998 |
Other current assets | 19,565 | 20,789 | 16,073 |
Total current assets | 588,446 | 604,318 | 571,747 |
Property, plant and equipment, net | 205,009 | 207,027 | 207,457 |
Goodwill | 122,923 | 123,881 | 129,433 |
Intangible assets, net | 31,484 | 32,587 | 39,728 |
Other noncurrent assets | 4,797 | 5,252 | 4,804 |
Total assets | 952,659 | 973,065 | 953,169 |
Current liabilities | |||
Line of credit and notes payable | 0 | 18 | 83 |
Trade accounts payable | 21,456 | 22,860 | 31,291 |
Accrued liabilities | 46,261 | 56,078 | 48,946 |
Accrued profit sharing trust contributions | 1,960 | 5,384 | 2,005 |
Accrued cash profit sharing and commissions | 7,131 | 6,039 | 8,105 |
Accrued workers’ compensation | 4,479 | 4,101 | 5,119 |
Total current liabilities | 81,287 | 94,480 | 95,549 |
Deferred income tax and other long-term liabilities | 16,082 | 15,120 | 10,111 |
Total liabilities | 97,369 | 109,600 | 105,660 |
Commitments and contingencies (Note 7) | |||
Stockholders’ equity | |||
Common stock, at par value | 493 | 489 | 489 |
Additional paid-in capital | 226,007 | 220,982 | 208,870 |
Retained earnings | 652,298 | 649,174 | 621,260 |
Accumulated other comprehensive income (loss) | -23,508 | -7,180 | 16,890 |
Total stockholders’ equity | 855,290 | 863,465 | 847,509 |
Total liabilities and stockholders’ equity | $952,659 | $973,065 | $953,169 |
Condensed_Consolidated_Stateme
Condensed Consolidated Statements of Operations (USD $) | 3 Months Ended | |
In Thousands, except Per Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Income Statement [Abstract] | ||
Net sales | $176,491 | $168,288 |
Cost of sales | 98,993 | 90,526 |
Gross profit | 77,498 | 77,762 |
Operating expenses: | ||
Research and development and other engineering | 10,197 | 9,700 |
Selling | 22,607 | 21,819 |
General and administrative | 28,433 | 26,922 |
Gain on sale of assets | -16 | -285 |
Total operating expenses | 61,221 | 58,156 |
Income from operations | 16,277 | 19,606 |
Interest (expense) income, net | -35 | 85 |
Income before taxes | 16,242 | 19,691 |
Provision for income taxes | 6,191 | 7,604 |
Net income | $10,051 | $12,087 |
Earnings per common share: | ||
Basic (in dollars per share) | $0.20 | $0.25 |
Diluted (in dollars per share) | $0.20 | $0.25 |
Number of shares outstanding | ||
Basic (in shares) | 49,208 | 48,899 |
Diluted (in shares) | 49,408 | 49,065 |
Cash dividends declared per common share (in dollars per share) | $0.14 | $0.13 |
Condensed_Consolidated_Stateme1
Condensed Consolidated Statements of Comprehensive Income (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Statement of Comprehensive Income [Abstract] | ||
Net income | $10,051 | $12,087 |
Other comprehensive loss | ||
Translation adjustment, net of tax benefit (expense) of ($72) and $11, respectively | -16,328 | -1,196 |
Comprehensive income (loss) | ($6,277) | $10,891 |
Condensed_Consolidated_Stateme2
Condensed Consolidated Statements of Comprehensive Income (Parenthetical) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Statement of Comprehensive Income [Abstract] | ||
Translation adjustment, tax (expense) benefit | ($72) | $11 |
Condensed_Consolidated_Stateme3
Condensed Consolidated Statements of Stockholders' Equity (USD $) | Total | Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Treasury Stock |
In Thousands, unless otherwise specified | ||||||
Balance at Dec. 31, 2013 | $841,279 | $486 | $207,418 | $615,289 | $18,086 | |
Balance (in shares) at Dec. 31, 2013 | 48,712 | |||||
Increase (Decrease) in Stockholders' Equity | ||||||
Net income | 12,087 | 12,087 | ||||
Translation adjustment, net of tax | -1,196 | -1,196 | ||||
Stock options exercised | 1,769 | 1 | 1,768 | |||
Stock options exercised (in shares) | 62 | |||||
Stock-based compensation | 2,379 | 2,379 | ||||
Tax effect of options exercised | -135 | -135 | ||||
Shares issued from release of Restricted Stock Units | -2,960 | 2 | -2,962 | |||
Shares issued from release of Restricted Stock Units (in shares) | 153 | |||||
Cash dividends declared on common stock, $0.140, $0.420, and $0.125 per share for the period ended March 31, 2015, December 31, 2014, and March 31, 2014 respectively | -6,116 | -6,116 | ||||
Common stock issued at $34.32, $0, and $35.87 per share for stock bonus for the period ended March 31, 2015, December 31, 2014, and March 31, 2014, respectively | 402 | 402 | ||||
Common stock issued (in shares) | 11 | |||||
Balance at Mar. 31, 2014 | 847,509 | 489 | 208,870 | 621,260 | 16,890 | 0 |
Balance (in shares) at Mar. 31, 2014 | 48,938 | |||||
Increase (Decrease) in Stockholders' Equity | ||||||
Net income | 51,444 | 51,444 | ||||
Translation adjustment, net of tax | -23,700 | -23,700 | ||||
Pension adjustment, net of tax | -370 | -370 | ||||
Stock options exercised | 2,813 | 1 | 2,812 | |||
Stock options exercised (in shares) | 99 | |||||
Stock-based compensation | 9,975 | 9,975 | ||||
Tax effect of options exercised | -133 | -133 | ||||
Shares issued from release of Restricted Stock Units | -542 | 0 | -542 | |||
Shares issued from release of Restricted Stock Units (in shares) | 24 | |||||
Repurchase of common stock (in shares) | -95 | |||||
Repurchase of common stock | -2,981 | -2,981 | ||||
Retirement of common stock | -1 | -2,980 | 2,981 | |||
Cash dividends declared on common stock, $0.140, $0.420, and $0.125 per share for the period ended March 31, 2015, December 31, 2014, and March 31, 2014 respectively | -20,550 | -20,550 | ||||
Balance at Dec. 31, 2014 | 863,465 | 489 | 220,982 | 649,174 | -7,180 | |
Balance (in shares) at Dec. 31, 2014 | 48,966 | |||||
Increase (Decrease) in Stockholders' Equity | ||||||
Net income | 10,051 | 10,051 | ||||
Translation adjustment, net of tax | -16,328 | -16,328 | ||||
Stock options exercised | 5,484 | 2 | 5,482 | |||
Stock options exercised (in shares) | 187 | |||||
Stock-based compensation | 2,784 | 2,784 | ||||
Tax effect of options exercised | -184 | -184 | ||||
Shares issued from release of Restricted Stock Units | -3,607 | 2 | -3,609 | |||
Shares issued from release of Restricted Stock Units (in shares) | 191 | |||||
Cash dividends declared on common stock, $0.140, $0.420, and $0.125 per share for the period ended March 31, 2015, December 31, 2014, and March 31, 2014 respectively | -6,927 | -6,927 | ||||
Common stock issued at $34.32, $0, and $35.87 per share for stock bonus for the period ended March 31, 2015, December 31, 2014, and March 31, 2014, respectively | 552 | 552 | ||||
Common stock issued (in shares) | 16 | |||||
Balance at Mar. 31, 2015 | $855,290 | $493 | $226,007 | $652,298 | ($23,508) | $0 |
Balance (in shares) at Mar. 31, 2015 | 49,360 |
Condensed_Consolidated_Stateme4
Condensed Consolidated Statements of Stockholders' Equity (Parenthetical) (USD $) | 3 Months Ended | 9 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 | |
Statement of Stockholders' Equity [Abstract] | |||
Cash dividends declared per common share (in dollars per share) | $0.14 | $0.13 | $0.42 |
Common stock issued per share for stock bonus (in dollars per share) | $34.32 | $35.87 | $0 |
Condensed_Consolidated_Stateme5
Condensed Consolidated Statements of Cash Flows (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Cash flows from operating activities | ||
Net income | $10,051 | $12,087 |
Adjustments to reconcile net income to net cash used by operating activities: | ||
Gain on sale of assets | -15 | -285 |
Depreciation and amortization | 7,418 | 7,684 |
Gain on contingent consideration adjustment | -245 | 0 |
Deferred income taxes | 2,593 | 1,651 |
Noncash compensation related to stock plans | 3,295 | 2,657 |
Excess tax benefit of options exercised and restricted stock units vested | -58 | -8 |
Provision for doubtful accounts | -50 | -53 |
Changes in operating assets and liabilities, net of acquisitions: | ||
Trade accounts receivable | -27,615 | -24,220 |
Inventories | 7,515 | -19,128 |
Trade accounts payable | -1,590 | -3,403 |
Income taxes payable | 1,740 | 4,140 |
Accrued profit sharing trust contributions | -3,421 | -3,770 |
Accrued cash profit sharing and commissions | 1,179 | 2,057 |
Other current assets | -1,101 | -2,977 |
Accrued liabilities | -11,295 | -5,022 |
Long-term liabilities | 93 | -950 |
Accrued workers’ compensation | 377 | 528 |
Other noncurrent assets | 871 | 54 |
Net cash used in operating activities | -10,258 | -28,958 |
Cash flows from investing activities | ||
Capital expenditures | -6,369 | -4,193 |
Asset acquisitions, net of cash acquired | -779 | 0 |
Proceeds from sale of property and equipment | 25 | 451 |
Loan repayment by customer | 243 | 0 |
Net cash used in investing activities | -6,880 | -3,742 |
Cash flows from financing activities | ||
Deferred and contingent consideration paid for asset acquisition | -1,177 | -1,294 |
Repayment of debt and line of credit borrowings | -17 | -20 |
Issuance of common stock | 5,484 | 1,769 |
Excess tax benefit of options exercised and restricted stock units vested | 58 | 8 |
Dividends paid | -6,858 | -6,089 |
Net cash used in financing activities | -2,510 | -5,626 |
Effect of exchange rate changes on cash and cash equivalents | -7,072 | -894 |
Net decrease in cash and cash equivalents | -26,720 | -39,220 |
Cash and cash equivalents at beginning of period | 260,307 | 251,208 |
Cash and cash equivalents at end of period | 233,587 | 211,988 |
Noncash activity during the period | ||
Noncash capital expenditures | 830 | 406 |
Dividends declared but not paid | 6,927 | 6,116 |
Issuance of Company’s common stock for compensation | $552 | $402 |
Basis_of_Presentation
Basis of Presentation | 3 Months Ended | |||||||||||
Mar. 31, 2015 | ||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||||||||||
Basis of Presentation | Basis of Presentation | |||||||||||
Principles of Consolidation | ||||||||||||
The condensed consolidated financial statements include the accounts of Simpson Manufacturing Co., Inc. and its subsidiaries (the “Company”). Investments in 50% or less owned affiliates are accounted for using either the 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 (“GAAP”) have been condensed or omitted. These interim statements should be read in conjunction with the audited consolidated financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2014. | ||||||||||||
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 GAAP. The year-end condensed consolidated balance sheet data were derived from audited financial statements, but do not include all disclosures required by GAAP. The Company’s quarterly results fluctuate. As a result, the Company believes the results of operations for the interim period presented are not necessarily indicative of the results to be expected for any future period. | ||||||||||||
Out-of-Period Adjustment | ||||||||||||
In the first quarter of 2014, the Company recorded an out-of-period adjustment, which increased gross profit, income from operations and net income by $2.3 million, $2.0 million and $1.3 million, respectively. The adjustment resulted from an over-statement of prior periods' workers compensation expense, net of cash profit sharing expense, and was not material to the first quarter of 2014 or any prior period's financial statements. | ||||||||||||
Revenue Recognition | ||||||||||||
The Company recognizes revenue when the earnings process is complete, net of applicable provision for discounts, returns and incentives, whether actual or estimated, based on the Company’s 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, collectability is reasonably assured and pricing is fixed or determinable. The Company’s general shipping terms are F.O.B. shipping point, and 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 or customer acceptance, depending on terms of the sales agreement. Service sales, representing after-market repair and maintenance, engineering activities, software license sales and services and lease income, though significantly less than 1% of net sales and not material to the condensed consolidated financial statements, are recognized as the services are completed or the software products and services are delivered. If actual costs of sales returns, incentives and discounts were to significantly exceed the recorded estimated allowance, the Company’s sales would be adversely affected. | ||||||||||||
Net Earnings Per Common Share | ||||||||||||
Basic earnings per common share are computed based on 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. | ||||||||||||
The following is a reconciliation of basic earnings per common share to diluted earnings per share: | ||||||||||||
Three Months Ended March 31, | ||||||||||||
(in thousands, except per share amounts) | 2015 | 2014 | ||||||||||
Net income available to common stockholders | $ | 10,051 | $ | 12,087 | ||||||||
Basic weighted-average shares outstanding | 49,208 | 48,899 | ||||||||||
Dilutive effect of potential common stock equivalents — stock options and restricted stock units | 200 | 166 | ||||||||||
Diluted weighted-average shares outstanding | 49,408 | 49,065 | ||||||||||
Earnings per common share: | ||||||||||||
Basic | $ | 0.2 | $ | 0.25 | ||||||||
Diluted | $ | 0.2 | $ | 0.25 | ||||||||
Potentially dilutive securities excluded from earnings per diluted share because their effect is anti-dilutive | — | — | ||||||||||
Accounting for Stock-Based Compensation | ||||||||||||
With the approval of the Company’s stockholders on April 26, 2011, the Company adopted the Simpson Manufacturing Co., Inc. 2011 Incentive Plan (the “Original 2011 Plan”). The Company's stockholders approved on April 21, 2015, and the Company adopted, the amended and restated Simpson Manufacturing Co., Inc. 2011 Incentive Plan (the "2011 Plan"), which amended and restated in its entirety, and incorporated and superseded, the Original 2011 Plan. The Original 2011 Plan amended and restated in their entirety, and incorporated and superseded, both the Simpson Manufacturing Co., Inc. 1994 Stock Option Plan (the “1994 Plan”), which was principally for the Company’s employees, and the Simpson Manufacturing Co., Inc. 1995 Independent Director Stock Option Plan (the “1995 Plan”), which was for the Company's directors who are not employees. Options previously granted under the 1994 Plan or the 1995 Plan were not affected by the adoption of the Original 2011 Plan or the 2011 Plan and continue to be governed by the 1994 Plan or the 1995 Plan, respectively. | ||||||||||||
Under the 1994 Plan, the Company could grant incentive stock options and non-qualified stock options. The Company, however, granted only non-qualified stock options under both the 1994 Plan and the 1995 Plan. The Company generally granted options under each of the 1994 Plan and the 1995 Plan once each year. The exercise price per share of each option granted under the 1994 Plan equaled the closing market price per share of the Company’s common stock as reported by the New York Stock Exchange on the day preceding the day that the Compensation and Leadership Development Committee of the Company’s Board of Directors met to approve the grant of the options. The exercise price per share under each option granted under the 1995 Plan was at the fair market value on the date specified in the 1995 Plan. Options vest and expire according to terms established at the grant date. Options granted under the 1994 Plan typically vest evenly over the requisite service period of four years and have a term of seven years. The vesting of options granted under the 1994 Plan will be accelerated if the grantee ceases to be employed by the Company after reaching age 60 or if there is a change in control of the Company. Options granted under the 1995 Plan were fully vested on the date of grant. Shares of common stock issued on exercise of stock options under the 1994 Plan and the 1995 Plan are registered under the Securities Act of 1933. | ||||||||||||
Under the 2011 Plan, the Company may grant incentive stock options, non-qualified stock options, restricted stock and restricted stock units, although the Company currently intends to award primarily restricted stock units and to a lesser extent, if at all, non-qualified stock options. The Company has not awarded, and does not currently intend to award, incentive stock options or restricted stock. Under the 2011 Plan, no more than 16.3 million shares of the Company’s common stock may be issued (including shares already issued) pursuant to all awards under the 2011 Plan, including on exercise of options previously granted under the 1994 Plan and the 1995 Plan. Shares of common stock to be issued pursuant to the 2011 Plan are registered under the Securities Act of 1933. | ||||||||||||
The following table represents the Company’s stock option and restricted stock unit activity for the three months ended March 31, 2015 and 2014: | ||||||||||||
Three Months Ended March 31, | ||||||||||||
(in thousands) | 2015 | 2014 | ||||||||||
Stock-based compensation expense recognized in operating expenses | $ | 3,084 | $ | 2,476 | ||||||||
Less: Tax benefit of stock-based compensation expense in provision for income taxes | 1,052 | 910 | ||||||||||
Stock-based compensation expense, net of tax | $ | 2,032 | $ | 1,566 | ||||||||
Fair value of shares vested | $ | 2,784 | $ | 2,379 | ||||||||
Proceeds to the Company from the exercise of stock-based compensation | $ | 5,484 | $ | 1,769 | ||||||||
Tax effect from the exercise of stock-based compensation, including shortfall tax benefits | $ | (184 | ) | $ | (135 | ) | ||||||
At March 31, | ||||||||||||
(in thousands) | 2015 | 2014 | ||||||||||
Stock-based compensation cost capitalized in inventory | $ | 276 | $ | 459 | ||||||||
The amounts included in cost of sales, research and development and other engineering, selling, or general and administrative expense depend on the job functions performed by the employees to whom the stock options and restricted stock units were awarded. | ||||||||||||
The assumptions used to calculate the fair value of stock options granted or restricted stock units awarded are evaluated and revised, as necessary, to reflect market conditions and the Company’s experience. | ||||||||||||
Fair Value of Financial Instruments | ||||||||||||
The “Fair Value Measurements and Disclosures” topic of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) establishes a valuation hierarchy for disclosure of the inputs used to measure fair value. This hierarchy prioritizes the inputs into three broad levels as follows: Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities; Level 2 inputs are quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument; and Level 3 inputs are unobservable inputs based on the Company’s assumptions used to measure assets and liabilities at fair value. A financial asset’s or liability’s classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement. | ||||||||||||
The Company’s investments consisted of only United States Treasury securities and money market funds, which are the Company’s primary financial instruments, maintained in cash equivalents and carried at cost, approximating fair value, based on Level 1 inputs. The balances of the Company’s primary financial instruments were as follows: | ||||||||||||
At March 31, | At December 31, | |||||||||||
(in thousands) | 2015 | 2014 | 2014 | |||||||||
Financial instruments | $ | 91,569 | $ | 99,235 | $ | 99,024 | ||||||
The carrying amounts of trade accounts receivable, accounts payable and accrued liabilities approximate fair value due to the short-term nature of these instruments. | ||||||||||||
Income Taxes | ||||||||||||
The Company uses an estimated annual effective tax rate to measure the tax benefit or tax expense recognized in each interim period. The effective tax rate was slightly lower in the first quarter of 2015 than in the first quarter of 2014. The following table presents the Company’s effective tax rates and income tax expense for the three months ended March 31, 2015 and 2014: | ||||||||||||
Three Months Ended March 31, | ||||||||||||
(in thousands, except percentages) | 2015 | 2014 | ||||||||||
Effective tax rate | 38.1 | % | 38.6 | % | ||||||||
Provision for income taxes | $ | 6,191 | $ | 7,604 | ||||||||
Acquisitions | ||||||||||||
In the first quarter of 2015, the Company paid $0.7 million in deferred consideration and $0.3 million in contingent consideration related to the Company's 2012 acquisition of S&P Clever Reinforcement Company AG and S&P Clever International AG (collectively, “S&P Clever”) and paid $0.2 million in contingent consideration related to the Company's 2013 acquisition of Bierbach GmbH & Co. KG. | ||||||||||||
Under the business combinations topic of the FASB ASC, the Company accounts for acquisitions as business combinations and ascribes acquisition-date fair values to the acquired assets and assumed liabilities. Provisional fair value measurements are made at the time of the acquisitions. Adjustments to those measurements may be made in subsequent periods, up to one year from the acquisition date, as information necessary to complete the analysis is obtained. Fair value of intangible assets are based on Level 3 inputs. | ||||||||||||
Sales Office Closing | ||||||||||||
In March 2015, the Company committed to a plan to close its sales offices located in China, Thailand and Dubai, as well as to reduce its selling activities in Hong Kong due to continued losses in the region. The closures may be substantially completed as early as December 2015. As a result, the Company recorded employee severance obligation expenses of $0.8 million in March 2015, with nearly all of the amount paid by the Company in April 2015. Most of the severance obligation expense was charged to operating expenses, with less than $0.1 million recorded to cost of sales. Until the closings are finalized, estimated additional severance expense, retention bonuses and professional fees of $1.9 million will be recorded as commitment requirements are met or services are received. All of the physical locations are leased, with remaining future minimum lease obligations of $1.3 million, and will continue to be occupied while the Company considers options for early termination of the leases. If the Company terminates a lease early with no sub-lease or concessions received from the landlord and the location is no longer in use, the remaining obligation will be determined and expensed at that time. Long-lived assets of $0.2 million, consisting mostly of office equipment and vehicles, will either be sold or depreciated on an accelerated basis to their salvage value and are expected to be disposed of by December 31, 2015. Accelerated depreciation expense of $0.1 million was recorded in the first quarter of 2015, nearly all as operating expenses. | ||||||||||||
Recently Issued Accounting Standards | ||||||||||||
There have been no developments to recently issued accounting standards, including the expected dates of adoption and estimated effects on the Company’s consolidated financial statements, from those disclosed in the Company’s 2014 Annual Report on Form 10-K, except for the following: | ||||||||||||
In April 2015, the FASB issued Accounting Standards Update No. 2015-05 (Subtopic 340-40), Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement (“ASU 2015-05"). The guidance in this Subtopic applies only to internal-use software that a customer obtains access to in a hosting arrangement. The amendments provide guidance to customers about whether a cloud computing arrangement includes a software license. If a cloud computing arrangement includes a software license, then the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, the customer should account for the arrangement as a service contract. With an election to adopt prospectively or retrospectively, this ASU will be effective for annual periods beginning after December 15, 2015. The Company is currently assessing the impact that adopting this new accounting guidance will have on its consolidated financial statements and footnote disclosures. | ||||||||||||
Other recent authoritative guidance issued by the FASB (including technical corrections to the ASC), the American Institute of Certified Public Accountants and the Securities and Exchange Commission did not or is not expected to have a material effect on the Company’s consolidated financial statements. |
Trade_Accounts_Receivable_Net
Trade Accounts Receivable, Net | 3 Months Ended | |||||||||||
Mar. 31, 2015 | ||||||||||||
Receivables [Abstract] | ||||||||||||
Trade Accounts Receivable, Net | Trade Accounts Receivable, Net | |||||||||||
Trade accounts receivable consisted of the following: | ||||||||||||
At March 31, | At December 31, | |||||||||||
(in thousands) | 2015 | 2014 | 2014 | |||||||||
Trade accounts receivable | $ | 120,701 | $ | 117,728 | $ | 95,033 | ||||||
Allowance for doubtful accounts | (765 | ) | (870 | ) | (929 | ) | ||||||
Allowance for sales discounts and returns | (2,620 | ) | (2,699 | ) | (2,089 | ) | ||||||
$ | 117,316 | $ | 114,159 | $ | 92,015 | |||||||
Inventories
Inventories | 3 Months Ended | |||||||||||
Mar. 31, 2015 | ||||||||||||
Inventory Disclosure [Abstract] | ||||||||||||
Inventories | Inventories | |||||||||||
Inventories consisted of the following: | ||||||||||||
At March 31, | At December 31, | |||||||||||
(in thousands) | 2015 | 2014 | 2014 | |||||||||
Raw materials | $ | 84,040 | $ | 92,671 | $ | 97,732 | ||||||
In-process products | 20,262 | 19,822 | 19,496 | |||||||||
Finished products | 101,010 | 104,036 | 99,317 | |||||||||
$ | 205,312 | $ | 216,529 | $ | 216,545 | |||||||
Property_Plant_and_Equipment_N
Property, Plant and Equipment, Net | 3 Months Ended | |||||||||||
Mar. 31, 2015 | ||||||||||||
Property, Plant and Equipment [Abstract] | ||||||||||||
Property, Plant and Equipment, Net | Property, Plant and Equipment, Net | |||||||||||
Property, plant and equipment, net, consisted of the following: | ||||||||||||
At March 31, | At December 31, | |||||||||||
(in thousands) | 2015 | 2014 | 2014 | |||||||||
Land | $ | 28,795 | $ | 29,960 | $ | 29,390 | ||||||
Buildings and site improvements | 171,541 | 178,135 | 175,058 | |||||||||
Leasehold improvements | 5,428 | 5,492 | 5,602 | |||||||||
Machinery, equipment, and software | 225,820 | 229,112 | 228,440 | |||||||||
431,584 | 442,699 | 438,490 | ||||||||||
Less accumulated depreciation and amortization | (246,055 | ) | (240,289 | ) | (245,383 | ) | ||||||
185,529 | 202,410 | 193,107 | ||||||||||
Capital projects in progress | 19,480 | 5,047 | 13,920 | |||||||||
$ | 205,009 | $ | 207,457 | $ | 207,027 | |||||||
Goodwill_and_Intangible_Assets
Goodwill and Intangible Assets, Net | 3 Months Ended | |||||||||||
Mar. 31, 2015 | ||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||
Goodwill and Intangible Assets, Net | Goodwill and Intangible Assets, Net | |||||||||||
Goodwill was as follows: | ||||||||||||
At March 31, | At December 31, | |||||||||||
(in thousands) | 2015 | 2014 | 2014 | |||||||||
North America | $ | 84,216 | $ | 84,690 | $ | 84,526 | ||||||
Europe | 37,256 | 42,982 | 37,788 | |||||||||
Asia/Pacific | 1,451 | 1,761 | 1,567 | |||||||||
Total | $ | 122,923 | $ | 129,433 | $ | 123,881 | ||||||
Amortizable and indefinite-lived intangible assets, net, were as follows: | ||||||||||||
At March 31, 2015 | ||||||||||||
Gross | Net | |||||||||||
Carrying | Accumulated | Carrying | ||||||||||
(in thousands) | Amount | Amortization | Amount | |||||||||
North America | $ | 29,415 | $ | (15,545 | ) | $ | 13,870 | |||||
Europe | 29,914 | (12,300 | ) | 17,614 | ||||||||
Total | $ | 59,329 | $ | (27,845 | ) | $ | 31,484 | |||||
At March 31, 2014 | ||||||||||||
Gross | Net | |||||||||||
(in thousands) | Carrying | Accumulated | Carrying | |||||||||
Amount | Amortization | Amount | ||||||||||
North America | $ | 34,495 | $ | (17,278 | ) | $ | 17,217 | |||||
Europe | 33,367 | (10,856 | ) | 22,511 | ||||||||
Total | $ | 67,862 | $ | (28,134 | ) | $ | 39,728 | |||||
At December 31, 2014 | ||||||||||||
Gross | Net | |||||||||||
(in thousands) | Carrying | Accumulated | Carrying | |||||||||
Amount | Amortization | Amount | ||||||||||
North America | $ | 29,455 | $ | (14,719 | ) | $ | 14,736 | |||||
Europe | 29,419 | (11,568 | ) | 17,851 | ||||||||
Total | $ | 58,874 | $ | (26,287 | ) | $ | 32,587 | |||||
Intangible assets consist of definite-lived and indefinite-lived assets. Definite-lived intangible assets include customer relationships, patents, unpatented technology and non-compete agreements. Amortization expense for definite-lived intangible assets during the three months ended March 31, 2015 and 2014, totaled $1.6 million and $2.2 million, respectively. | ||||||||||||
Indefinite-lived intangible assets include in-process research and development assets and a trade name totaling $2.2 million, $5.7 million and $2.1 million at March 31, 2015, March 31, 2014 and December 31, 2014, respectively. | ||||||||||||
At March 31, 2015, estimated future amortization of definite-lived intangible assets was as follows: | ||||||||||||
(in thousands) | ||||||||||||
Remaining nine months of 2015 | $ | 4,522 | ||||||||||
2016 | 5,827 | |||||||||||
2017 | 4,165 | |||||||||||
2018 | 3,227 | |||||||||||
2019 | 3,198 | |||||||||||
2020 | 3,168 | |||||||||||
Thereafter | 5,218 | |||||||||||
$ | 29,325 | |||||||||||
The changes in the carrying amount of goodwill and intangible assets for the three months ended March 31, 2015, were as follows: | ||||||||||||
Intangible | ||||||||||||
(in thousands) | Goodwill | Assets | ||||||||||
Balance at December 31, 2014 | $ | 123,881 | $ | 32,587 | ||||||||
Acquisitions | 556 | 653 | ||||||||||
Amortization | — | (1,557 | ) | |||||||||
Foreign exchange | (1,514 | ) | (199 | ) | ||||||||
Balance at March 31, 2015 | $ | 122,923 | $ | 31,484 | ||||||||
Debt
Debt | 3 Months Ended |
Mar. 31, 2015 | |
Debt Disclosure [Abstract] | |
Debt | Debt |
The Company has revolving lines of credit with various banks in the United States and Europe. Total available credit at March 31, 2015, was $304.3 million, including revolving credit lines and an irrevocable standby letter of credit in support of various insurance deductibles. | |
The Company’s primary credit facility is a revolving line of credit with $300.0 million in available credit. This credit facility will expire in July 2017. Amounts borrowed under this credit facility will bear interest at an annual rate equal to either, at the Company’s option, (a) the rate for Eurocurrency deposits for the corresponding deposits of U.S. dollars appearing on Reuters LIBOR1screen page (the “LIBOR Rate”), adjusted for any reserve requirement in effect, plus a spread of 0.60% to 1.45%, determined quarterly based on the Company’s leverage ratio (at March 31, 2015, the LIBOR Rate was 0.18%), or (b) a base rate, plus a spread of 0.00% to 0.45%, determined quarterly based on the Company’s leverage ratio. The base rate is defined in a manner such that it will not be less than the LIBOR Rate. The Company will pay fees for standby letters of credit at an annual rate equal to the LIBOR Rate plus the applicable spread described above, and will pay market-based fees for commercial letters of credit. The Company is required to pay an annual facility fee of 0.15% to 0.30% of the available commitments under the credit agreement, regardless of usage, with the applicable fee determined on a quarterly basis based on the Company’s leverage ratio. | |
The Company’s unused borrowing capacity under other revolving credit lines and a term note totaled $4.3 million at March 31, 2015. The other revolving credit lines and term note charge interest ranging from 0.82% to 7.25%, have maturity dates from December 2015 to July 2017, and had no outstanding balances at March 31, 2015, and outstanding balances of $83 thousand and $18 thousand at March 31, 2014, and December 31, 2014, respectively. The Company was in compliance with its financial covenants at March 31, 2015. |
Commitments_and_Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 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. The resolution of claims and litigation is subject to inherent uncertainty and could have a material adverse effect on the Company’s financial condition, cash flows and results of operations. | |
Pending Claims | |
Four lawsuits (the “Cases”) have been filed against the Company in the Hawaii First Circuit Court: Alvarez v. Haseko Homes, Inc. and Simpson Manufacturing, Inc., Civil No. 09-1-2697-11 (“Case 1”); Ke Noho Kai Development, LLC v. Simpson Strong-Tie Company, Inc., and Honolulu Wood Treating Co., LTD., Case No. 09-1-1491-06 SSM (“Case 2”); North American Specialty Ins. Co. v. Simpson Strong-Tie Company, Inc. and K.C. Metal Products, Inc., Case No. 09-1-1490-06 VSM (“Case 3”); and Charles et al. v. Haseko Homes, Inc. et al. and Third Party Plaintiffs Haseko Homes, Inc. et al. v. Simpson Strong-Tie Company, Inc., et al., Civil No. 09-1-1932-08 (“Case 4”). Case 1 was filed on November 18, 2009. Cases 2 and 3 were originally filed on June 30, 2009. Case 4 was filed on August 19, 2009. The Cases all relate to alleged premature corrosion of the Company’s strap tie holdown products installed in buildings in a housing development known as Ocean Pointe in Honolulu, Hawaii, allegedly causing property damage. Case 1 is a putative class action brought by the owners of allegedly affected Ocean Pointe houses. Case 1 was originally filed as Kai et al. v. Haseko Homes, Inc., Haseko Construction, Inc. and Simpson Manufacturing, Inc., Case No. 09-1-1476, but was voluntarily dismissed and then re-filed with a new representative plaintiff. Case 2 is an action by the builders and developers of Ocean Pointe against the Company, claiming that either the Company’s strap tie holdowns are defective in design or manufacture or the Company failed to provide adequate warnings regarding the products’ susceptibility to corrosion in certain environments. Case 3 is a subrogation action brought by the insurance company for the builders and developers against the Company claiming the insurance company expended funds to correct problems allegedly caused by the Company’s products. Case 4 is a putative class action brought, like Case 1, by owners of allegedly affected Ocean Pointe homes. In Case 4, Haseko Homes, Inc. (“Haseko”), the developer of the Ocean Pointe development, brought a third party complaint against the Company alleging that any damages for which Haseko may be liable are actually the fault of the Company. Similarly, Haseko’s sub-contractors on the Ocean Pointe development brought cross-claims against the Company seeking indemnity and contribution for any amounts for which they may ultimately be found liable. None of the Cases alleges a specific amount of damages sought, although each of the Cases seeks compensatory damages, and Case 1 seeks punitive damages. Cases 1 and 4 have been consolidated. In December 2012, the Court granted the Company summary judgment on the claims asserted by the plaintiff homeowners in Cases 1 and 4, and on the third party complaint and cross-claims asserted by Haseko and the sub-contractors, respectively, in Case 4. In April 2013, the Court granted Haseko and the sub-contractors’ motion for leave to amend their cross-claims to allege a claim for negligent misrepresentation. The Company continues to investigate the facts underlying the claims asserted in the Cases, including, among other things, the cause of the alleged corrosion; the severity of any problems shown to exist; the buildings affected; the responsibility of the general contractor, various subcontractors and other construction professionals for the alleged damages; the amount, if any, of damages suffered; and the costs of repair, if needed. At this time, it appears more likely than not that a written agreement reached to settle Cases 1-4 and other related insurance coverage proceedings (the “Settlement,” discussed below) will become final in accordance with its terms. Should that occur, the Company will incur no liability under any legal theory in connection with Cases 1 - 4 or the related insurance coverage cases. | |
Based on facts currently known to the Company, the Company believes that all or part of the claims alleged in the Cases may be covered by its insurance policies. On April 19, 2011, an action was filed in the United States District Court for the District of Hawaii, National Union Fire Insurance Company of Pittsburgh, PA v. Simpson Manufacturing Company, Inc., et al., Civil No. 11-00254 ACK (the "National Union Action"). In this National Union Action, Plaintiff National Union Fire Insurance Company of Pittsburgh, Pennsylvania (“National Union”), which issued certain Commercial General Liability insurance policies to the Company, seeks declaratory relief in the Cases with respect to its obligations to defend or indemnify the Company, Simpson Strong-Tie Company Inc., and a vendor of the Company’s strap tie holdown products. By Order dated November 7, 2011, all proceedings in the National Union action have been stayed. If the stay is lifted, in the absence of final approval of the Settlement and accompanying resolution of the National Union action, the Company intends vigorously to defend all claims advanced by National Union. | |
On April 12, 2011, Fireman’s Fund Insurance Company (“Fireman’s Fund”), another of the Company’s general liability insurers, sued Hartford Fire Insurance Company (“Hartford”), a third insurance company from whom the Company purchased general liability insurance, in the United States District Court for the Northern District of California, Fireman’s Fund Insurance Company v. Hartford Fire Insurance Company, Civil No. 11 1789 SBA (the “Fireman’s Fund Action”). The Company has intervened in the Fireman’s Fund Action. By Order dated September 29, 2014, the Court formally stayed proceedings in the Fireman’s Fund Action, and ordered the action administratively closed. The Fireman’s Fund Action is subject to motion to reopen in the absence of final approval of the Settlement and accompanying resolution of the Fireman’s Fund Action. | |
On November 21, 2011, the Company commenced a lawsuit against National Union, Fireman’s Fund, Hartford and others in the Superior Court of the State of California in and for the City and County of San Francisco (the “San Francisco coverage action”). In the San Francisco coverage action, the Company alleges generally that the separate pendency of the National Union action and the Fireman’s Fund Action presents a risk of inconsistent adjudications; that the San Francisco Superior Court has jurisdiction over all of the parties and should exercise jurisdiction at the appropriate time to resolve any and all disputes that have arisen or may in the future arise among the Company and its liability insurers; and that the San Francisco coverage action should also be stayed pending resolution of the underlying Ocean Pointe Cases. The San Francisco coverage action has been ordered stayed pending resolution of the Cases. | |
Through mediation, the parties entered into the Settlement to resolve all of these legal proceedings, including Cases 1, 2, 3 and 4; the National Union action; the Fireman’s Fund Action; and the San Francisco coverage action. All parties to the Cases have executed the Settlement and the Court has given its preliminary approval. If the Court gives final approval to the Settlement, and if the conditions are satisfied such that the Settlement becomes Effective as defined therein, the Company will incur no uninsured liability in any of these legal proceedings. The Company cannot assure that the Settlement will be approved and its conditions satisfied such that it becomes Effective, and an unfavorable outcome could result in liability that substantially exceeds the amount of the Settlement. It is not possible to reasonably estimate the amount or range of any such possible excess. | |
Nishimura v. Gentry Homes, Ltd; Simpson Manufacturing Co., Inc.; and Simpson Strong-Tie Company, Inc., Civil no. 11-1-1522-7, was filed in the Circuit Court of the First Circuit of Hawaii on July 20, 2011. The Nishimura case alleges premature corrosion of the Company’s strap tie holdown products in a housing development at Ewa Beach in Honolulu, Hawaii. In February 2012, the Court dismissed three of the five claims the plaintiffs had asserted against the Company. In December 2013, the Court granted the Company's motion for summary judgment on the remaining claims. Currently, the case is closed, though it remains subject to appeal. | |
The Company is not engaged in any other legal proceedings as of the date hereof, which the Company expects individually or in the aggregate to have a material adverse effect on the Company’s financial condition, cash flows or results of operations. The resolution of claims and litigation is subject to inherent uncertainty and could have a material adverse effect on the Company’s financial condition, cash flows or results of operations. | |
Other | |
Corrosion, hydrogen enbrittlement, cracking, material hardness, wood pressure-treating chemicals, misinstallations, misuse, design and assembly flaws, manufacturing defects, environmental conditions, or other factors can contribute to failure of fasteners, connectors, anchors, adhesives and tool products. On occasion, some of the products 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. The Company subjects its products to extensive testing, with results and conclusions published in Company catalogues and on its websites. Based on test results to date, the Company believes that, generally, if its products are appropriately selected, installed and used in accordance with the Company’s guidance, they may be reliably used in appropriate applications. |
StockBased_Incentive_Plans
Stock-Based Incentive Plans | 3 Months Ended | |||||||||||||
Mar. 31, 2015 | ||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||||
Stock-Based Incentive Plans | Stock-Based Incentive Plans | |||||||||||||
The Company currently has one stock-based incentive plan, which incorporates and supersedes its two previous plans (see Note 1 “Basis of Presentation — Accounting for Stock-Based Compensation”). Participants are granted stock-based awards only if the applicable Company-wide or profit-center operating goals, or both, established by the Compensation and Leadership Development Committee of the Board of Directors at the beginning of the year, are met. Certain participants may have additional goals based on strategic initiatives of the Company. | ||||||||||||||
The fair value of each restricted stock unit award is estimated on the date of the award based on the closing market price of the underlying stock on the day preceding the date of the award. On February 2, 2015, 339,047 restricted stock units were awarded, including 8,550 awarded to the Company’s directors who are not employees, at an estimated value of $32.64 per share, based on the closing price on January 30, 2015. The restrictions on these awards generally lapse one quarter on the date of the award and one quarter on each of the first, second and third anniversaries of the date of the award. | ||||||||||||||
The following table summarizes the Company’s unvested restricted stock unit activity for the three months ended March 31, 2015: | ||||||||||||||
Shares | Weighted- | Aggregate | ||||||||||||
Average Price | Intrinsic | |||||||||||||
Value * | ||||||||||||||
Unvested Restricted Stock Units (RSUs) | (in thousands) | (in thousands) | ||||||||||||
Outstanding at January 1, 2015 | 504 | $ | 31.67 | |||||||||||
Awarded | 339 | |||||||||||||
Vested | (302 | ) | ||||||||||||
Forfeited | (2 | ) | ||||||||||||
Outstanding at March 31, 2015 | 539 | $ | 31.56 | $ | 20,140 | |||||||||
Outstanding and expected to vest at March 31, 2015 | 527 | $ | 31.56 | $ | 19,681 | |||||||||
* | The intrinsic value is calculated using the closing price per share of $37.37 as reported by the New York Stock Exchange on March 31, 2015. | |||||||||||||
Based on the market value on the award date, the total intrinsic value of vested restricted stock units during the three-month periods ended March 31, 2015 and 2014, was $9.7 million and $7.9 million, respectively. | ||||||||||||||
No stock options were granted in 2014 or the first three months of 2015. The following table summarizes the Company’s stock option activity for the three months ended March 31, 2015: | ||||||||||||||
Shares | Weighted- | Weighted- | Aggregate | |||||||||||
Average | Average | Intrinsic | ||||||||||||
Exercise Price | Remaining | Value * | ||||||||||||
Contractual Life | ||||||||||||||
Non-Qualified Stock Options | (in thousands) | (in years) | (in thousands) | |||||||||||
Outstanding at January 1, 2015 | 855 | $ | 29.48 | |||||||||||
Exercised | (186 | ) | ||||||||||||
Forfeited | (2 | ) | ||||||||||||
Outstanding at March 31, 2015 | 667 | $ | 29.5 | $ | 5,248 | |||||||||
Outstanding and expected to vest at March 31, 2015 | 661 | $ | 29.5 | 2.8 | $ | 5,200 | ||||||||
Exercisable at March 31, 2015 | 667 | $ | 29.5 | 2.8 | $ | 5,248 | ||||||||
* | The intrinsic value represents the amount, if any, by which the fair market value of the underlying common stock exceeds the exercise price of the stock option, using the closing price per share of $37.37 as reported by the New York Stock Exchange on March 31, 2015. | |||||||||||||
The total intrinsic value of stock options exercised during the three-month periods ended March 31, 2015 and 2014, was $1.2 million and $0.3 million, respectively. | ||||||||||||||
A summary of the status of unvested stock options as of March 31, 2015, and changes during the three months ended March 31, 2015, are presented below: | ||||||||||||||
Shares | Weighted- | |||||||||||||
Average | ||||||||||||||
Grant-Date Fair Value | ||||||||||||||
Unvested Stock Options | (in thousands) | |||||||||||||
Unvested at January 1, 2015 | 99 | $ | 10.33 | |||||||||||
Vested | 99 | 10.33 | ||||||||||||
Unvested at March 31, 2015 | — | $ | — | |||||||||||
As of March 31, 2015, $12.0 million of total unrecognized compensation cost was related to unvested stock-based compensation arrangements under the 2011 Incentive Plan and is expected to be recognized over a weighted-average period of 2.3 years. |
Segment_Information
Segment Information | 3 Months Ended | |||||||||||
Mar. 31, 2015 | ||||||||||||
Segment Reporting [Abstract] | ||||||||||||
Segment Information | Segment Information | |||||||||||
The Company is organized into three reportable segments. The segments are defined by the regions where the Company’s products are manufactured, marketed and distributed to the Company’s customers. The three regional segments are the North America segment, comprising primarily the United States and Canada, the Europe segment, comprising continental Europe and the United Kingdom, and the Asia/Pacific segment, comprising the Company’s operations in China, Hong Kong, the South Pacific and the Middle East. These segments are similar in several ways, including the types of materials, the production processes, the distribution channels and the product applications. | ||||||||||||
The Company’s measure of profit or loss for its reportable segments is income (loss) from operations. The reconciling amount between consolidated income before tax and consolidated income from operations is interest income, which is primarily attributed to Administrative and All Other. | ||||||||||||
The following tables illustrate certain measurements used by management to assess the performance as of or for the following periods: | ||||||||||||
Three Months Ended March 31, | ||||||||||||
(in thousands) | 2015 | 2014 | ||||||||||
Net Sales | ||||||||||||
North America | $ | 150,324 | $ | 136,882 | ||||||||
Europe | 22,788 | 27,647 | ||||||||||
Asia/Pacific | 3,379 | 3,759 | ||||||||||
Total | $ | 176,491 | $ | 168,288 | ||||||||
Sales to Other Segments* | ||||||||||||
North America | $ | 884 | $ | 1,130 | ||||||||
Europe | 299 | 466 | ||||||||||
Asia/Pacific | 4,844 | 3,072 | ||||||||||
Total | $ | 6,027 | $ | 4,668 | ||||||||
Income (Loss) from Operations | ||||||||||||
North America | $ | 20,466 | $ | 22,561 | ||||||||
Europe | (1,632 | ) | (919 | ) | ||||||||
Asia/Pacific | (803 | ) | (1,151 | ) | ||||||||
Administrative and all other | (1,754 | ) | (885 | ) | ||||||||
Total | $ | 16,277 | $ | 19,606 | ||||||||
* The sales to other segments are eliminated in consolidation. | ||||||||||||
At | ||||||||||||
At March 31, | December 31, | |||||||||||
(in thousands) | 2015 | 2014 | 2014 | |||||||||
Total Assets | ||||||||||||
North America | $ | 674,914 | $ | 630,323 | $ | 679,844 | ||||||
Europe | 165,795 | 203,606 | 180,005 | |||||||||
Asia/Pacific | 29,626 | 29,932 | 29,552 | |||||||||
Administrative and all other | 82,324 | 89,308 | 83,664 | |||||||||
Total | $ | 952,659 | $ | 953,169 | $ | 973,065 | ||||||
Cash collected by the Company’s United States subsidiaries is routinely transferred into the Company’s cash management accounts and, therefore, has been included in the total assets of “Administrative and all other.” Cash and cash equivalent balances in the “Administrative and all other” segment were $151.2 million, $116.1 million, and $167.4 million, as of March 31, 2015 and 2014, and December 31, 2014, respectively. | ||||||||||||
The following table illustrates the distribution of the Company’s net sales by product group for the following periods: | ||||||||||||
Three Months Ended March 31, | ||||||||||||
(in thousands) | 2015 | 2014 | ||||||||||
Wood Construction Products | $ | 151,379 | $ | 144,676 | ||||||||
Concrete Construction Products | 25,010 | 23,524 | ||||||||||
Other | 102 | 88 | ||||||||||
Total | $ | 176,491 | $ | 168,288 | ||||||||
Wood construction products include connectors, truss plates, fastening systems, fasteners and pre-fabricated shearwalls and are used for connecting and strengthening wood-based construction primarily in the residential construction market. Concrete construction products include adhesives, chemicals, mechanical anchors, carbide drill bits, powder actuated tools and fiber reinforcing materials and are used for restoration, protection or strengthening concrete, masonry and steel construction in residential, industrial, commercial and infrastructure construction. |
Subsequent_Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2015 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events |
In April 2015, the Company’s Board of Directors declared a cash dividend of $0.16 per share, estimated to total $7.9 million, to be paid on July 23, 2015, to stockholders of record on July 2, 2015. This is an increase of $0.02 per share, or 14.3%, over the amount of the dividend declared in February 2015 and paid in April 2015. | |
On April 21, 2015, 1,950 restricted stock units were awarded to each of the Company’s directors, who are not employees, at an estimated value of $36.33 per share based on the closing price on April 20, 2015. Restrictions on 100% of the restricted stock units lapsed on the award date. |
Basis_of_Presentation_Policies
Basis of Presentation (Policies) | 3 Months Ended |
Mar. 31, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Principles of Consolidation | Principles of Consolidation |
The condensed consolidated financial statements include the accounts of Simpson Manufacturing Co., Inc. and its subsidiaries (the “Company”). Investments in 50% or less owned affiliates are accounted for using either the cost or the equity method. All significant intercompany transactions have been eliminated. | |
Interim Period Reporting | 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 (“GAAP”) have been condensed or omitted. These interim statements should be read in conjunction with the audited consolidated financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2014. | |
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 GAAP. The year-end condensed consolidated balance sheet data were derived from audited financial statements, but do not include all disclosures required by GAAP. The Company’s quarterly results fluctuate. As a result, the Company believes the results of operations for the interim period presented are not necessarily indicative of the results to be expected for any future period. | |
Out-of-Period Adjustment | Out-of-Period Adjustment |
In the first quarter of 2014, the Company recorded an out-of-period adjustment, which increased gross profit, income from operations and net income by $2.3 million, $2.0 million and $1.3 million, respectively. The adjustment resulted from an over-statement of prior periods' workers compensation expense, net of cash profit sharing expense, and was not material to the first quarter of 2014 or any prior period's financial statements. | |
Revenue Recognition | Revenue Recognition |
The Company recognizes revenue when the earnings process is complete, net of applicable provision for discounts, returns and incentives, whether actual or estimated, based on the Company’s 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, collectability is reasonably assured and pricing is fixed or determinable. The Company’s general shipping terms are F.O.B. shipping point, and 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 or customer acceptance, depending on terms of the sales agreement. Service sales, representing after-market repair and maintenance, engineering activities, software license sales and services and lease income, though significantly less than 1% of net sales and not material to the condensed consolidated financial statements, are recognized as the services are completed or the software products and services are delivered. If actual costs of sales returns, incentives and discounts were to significantly exceed the recorded estimated allowance, the Company’s sales would be adversely | |
Net Earnings Per Common Share | Net Earnings Per Common Share |
Basic earnings per common share are computed based on 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 d | |
Accounting for Stock-Based Compensation | Accounting for Stock-Based Compensation |
With the approval of the Company’s stockholders on April 26, 2011, the Company adopted the Simpson Manufacturing Co., Inc. 2011 Incentive Plan (the “Original 2011 Plan”). The Company's stockholders approved on April 21, 2015, and the Company adopted, the amended and restated Simpson Manufacturing Co., Inc. 2011 Incentive Plan (the "2011 Plan"), which amended and restated in its entirety, and incorporated and superseded, the Original 2011 Plan. The Original 2011 Plan amended and restated in their entirety, and incorporated and superseded, both the Simpson Manufacturing Co., Inc. 1994 Stock Option Plan (the “1994 Plan”), which was principally for the Company’s employees, and the Simpson Manufacturing Co., Inc. 1995 Independent Director Stock Option Plan (the “1995 Plan”), which was for the Company's directors who are not employees. Options previously granted under the 1994 Plan or the 1995 Plan were not affected by the adoption of the Original 2011 Plan or the 2011 Plan and continue to be governed by the 1994 Plan or the 1995 Plan, respectively. | |
Under the 1994 Plan, the Company could grant incentive stock options and non-qualified stock options. The Company, however, granted only non-qualified stock options under both the 1994 Plan and the 1995 Plan. The Company generally granted options under each of the 1994 Plan and the 1995 Plan once each year. The exercise price per share of each option granted under the 1994 Plan equaled the closing market price per share of the Company’s common stock as reported by the New York Stock Exchange on the day preceding the day that the Compensation and Leadership Development Committee of the Company’s Board of Directors met to approve the grant of the options. The exercise price per share under each option granted under the 1995 Plan was at the fair market value on the date specified in the 1995 Plan. Options vest and expire according to terms established at the grant date. Options granted under the 1994 Plan typically vest evenly over the requisite service period of four years and have a term of seven years. The vesting of options granted under the 1994 Plan will be accelerated if the grantee ceases to be employed by the Company after reaching age 60 or if there is a change in control of the Company. Options granted under the 1995 Plan were fully vested on the date of grant. Shares of common stock issued on exercise of stock options under the 1994 Plan and the 1995 Plan are registered under the Securities Act of 1933. | |
Under the 2011 Plan, the Company may grant incentive stock options, non-qualified stock options, restricted stock and restricted stock units, although the Company currently intends to award primarily restricted stock units and to a lesser extent, if at all, non-qualified stock options. The Company has not awarded, and does not currently intend to award, incentive stock options or restricted stock. Under the 2011 Plan, no more than 16.3 million shares of the Company’s common stock may be issued (including shares already issued) pursuant to all awards under the 2011 Plan, including on exercise of options previously granted under the 1994 Plan and the 1995 Plan. Shares of common stock to be issued pursuant to the 2011 Plan are registered under the Securities Act of 1933. | |
Fair Value of Financial Instruments | Fair Value of Financial Instruments |
The “Fair Value Measurements and Disclosures” topic of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) establishes a valuation hierarchy for disclosure of the inputs used to measure fair value. This hierarchy prioritizes the inputs into three broad levels as follows: Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities; Level 2 inputs are quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument; and Level 3 inputs are unobservable inputs based on the Company’s assumptions used to measure assets and liabilities at fair value. A financial asset’s or liability’s classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement. | |
The Company’s investments consisted of only United States Treasury securities and money market funds, which are the Company’s primary financial instruments, maintained in cash equivalents and carried at cost, approximating fair value, based on Level 1 inputs. | |
Income Taxes | Income Taxes |
The Company uses an estimated annual effective tax rate to measure the tax benefit or tax expense recognized in each interim period. | |
Acquisitions | Acquisitions |
In the first quarter of 2015, the Company paid $0.7 million in deferred consideration and $0.3 million in contingent consideration related to the Company's 2012 acquisition of S&P Clever Reinforcement Company AG and S&P Clever International AG (collectively, “S&P Clever”) and paid $0.2 million in contingent consideration related to the Company's 2013 acquisition of Bierbach GmbH & Co. KG. | |
Under the business combinations topic of the FASB ASC, the Company accounts for acquisitions as business combinations and ascribes acquisition-date fair values to the acquired assets and assumed liabilities. Provisional fair value measurements are made at the time of the acquisitions. Adjustments to those measurements may be made in subsequent periods, up to one year from the acquisition date, as information necessary to complete the analysis is obtained. Fair value of intangible assets are based on Level 3 inputs. | |
Sales Office Closing | Sales Office Closing |
In March 2015, the Company committed to a plan to close its sales offices located in China, Thailand and Dubai, as well as to reduce its selling activities in Hong Kong due to continued losses in the region. The closures may be substantially completed as early as December 2015. As a result, the Company recorded employee severance obligation expenses of $0.8 million in March 2015, with nearly all of the amount paid by the Company in April 2015. Most of the severance obligation expense was charged to operating expenses, with less than $0.1 million recorded to cost of sales. Until the closings are finalized, estimated additional severance expense, retention bonuses and professional fees of $1.9 million will be recorded as commitment requirements are met or services are received. All of the physical locations are leased, with remaining future minimum lease obligations of $1.3 million, and will continue to be occupied while the Company considers options for early termination of the leases. If the Company terminates a lease early with no sub-lease or concessions received from the landlord and the location is no longer in use, the remaining obligation will be determined and expensed at that time. Long-lived assets of $0.2 million, consisting mostly of office equipment and vehicles, will either be sold or depreciated on an accelerated basis to their salvage value and are expected to be disposed of by December 31, 2015. Accelerated depreciation expense of $0.1 million was recorded in the first quarter of 2015, nearly all as operating expenses. | |
Recently Issued Accounting Standards | Recently Issued Accounting Standards |
There have been no developments to recently issued accounting standards, including the expected dates of adoption and estimated effects on the Company’s consolidated financial statements, from those disclosed in the Company’s 2014 Annual Report on Form 10-K, except for the following: | |
In April 2015, the FASB issued Accounting Standards Update No. 2015-05 (Subtopic 340-40), Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement (“ASU 2015-05"). The guidance in this Subtopic applies only to internal-use software that a customer obtains access to in a hosting arrangement. The amendments provide guidance to customers about whether a cloud computing arrangement includes a software license. If a cloud computing arrangement includes a software license, then the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, the customer should account for the arrangement as a service contract. With an election to adopt prospectively or retrospectively, this ASU will be effective for annual periods beginning after December 15, 2015. The Company is currently assessing the impact that adopting this new accounting guidance will have on its consolidated financial statements and footnote disclosures. | |
Other recent authoritative guidance issued by the FASB (including technical corrections to the ASC), the American Institute of Certified Public Accountants and the Securities and Exchange Commission did not or is not expected to have a material effect on the Company’s consolidated financial statements. |
Basis_of_Presentation_Tables
Basis of Presentation (Tables) | 3 Months Ended | |||||||||||
Mar. 31, 2015 | ||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||||||||||
Reconciliation of basic earnings per share ("EPS") to diluted EPS | The following is a reconciliation of basic earnings per common share to diluted earnings per share: | |||||||||||
Three Months Ended March 31, | ||||||||||||
(in thousands, except per share amounts) | 2015 | 2014 | ||||||||||
Net income available to common stockholders | $ | 10,051 | $ | 12,087 | ||||||||
Basic weighted-average shares outstanding | 49,208 | 48,899 | ||||||||||
Dilutive effect of potential common stock equivalents — stock options and restricted stock units | 200 | 166 | ||||||||||
Diluted weighted-average shares outstanding | 49,408 | 49,065 | ||||||||||
Earnings per common share: | ||||||||||||
Basic | $ | 0.2 | $ | 0.25 | ||||||||
Diluted | $ | 0.2 | $ | 0.25 | ||||||||
Potentially dilutive securities excluded from earnings per diluted share because their effect is anti-dilutive | — | — | ||||||||||
Stock option and restricted stock unit activity of the entity | The following table represents the Company’s stock option and restricted stock unit activity for the three months ended March 31, 2015 and 2014: | |||||||||||
Three Months Ended March 31, | ||||||||||||
(in thousands) | 2015 | 2014 | ||||||||||
Stock-based compensation expense recognized in operating expenses | $ | 3,084 | $ | 2,476 | ||||||||
Less: Tax benefit of stock-based compensation expense in provision for income taxes | 1,052 | 910 | ||||||||||
Stock-based compensation expense, net of tax | $ | 2,032 | $ | 1,566 | ||||||||
Fair value of shares vested | $ | 2,784 | $ | 2,379 | ||||||||
Proceeds to the Company from the exercise of stock-based compensation | $ | 5,484 | $ | 1,769 | ||||||||
Tax effect from the exercise of stock-based compensation, including shortfall tax benefits | $ | (184 | ) | $ | (135 | ) | ||||||
At March 31, | ||||||||||||
(in thousands) | 2015 | 2014 | ||||||||||
Stock-based compensation cost capitalized in inventory | $ | 276 | $ | 459 | ||||||||
Summary of financial instruments | The balances of the Company’s primary financial instruments were as follows: | |||||||||||
At March 31, | At December 31, | |||||||||||
(in thousands) | 2015 | 2014 | 2014 | |||||||||
Financial instruments | $ | 91,569 | $ | 99,235 | $ | 99,024 | ||||||
Schedule of effective tax rates and income tax expense | The following table presents the Company’s effective tax rates and income tax expense for the three months ended March 31, 2015 and 2014: | |||||||||||
Three Months Ended March 31, | ||||||||||||
(in thousands, except percentages) | 2015 | 2014 | ||||||||||
Effective tax rate | 38.1 | % | 38.6 | % | ||||||||
Provision for income taxes | $ | 6,191 | $ | 7,604 | ||||||||
Trade_Accounts_Receivable_Net_
Trade Accounts Receivable, Net (Tables) | 3 Months Ended | |||||||||||
Mar. 31, 2015 | ||||||||||||
Receivables [Abstract] | ||||||||||||
Schedule of trade accounts receivable, net | Trade accounts receivable consisted of the following: | |||||||||||
At March 31, | At December 31, | |||||||||||
(in thousands) | 2015 | 2014 | 2014 | |||||||||
Trade accounts receivable | $ | 120,701 | $ | 117,728 | $ | 95,033 | ||||||
Allowance for doubtful accounts | (765 | ) | (870 | ) | (929 | ) | ||||||
Allowance for sales discounts and returns | (2,620 | ) | (2,699 | ) | (2,089 | ) | ||||||
$ | 117,316 | $ | 114,159 | $ | 92,015 | |||||||
Inventories_Tables
Inventories (Tables) | 3 Months Ended | |||||||||||
Mar. 31, 2015 | ||||||||||||
Inventory Disclosure [Abstract] | ||||||||||||
Schedule of carrying values of inventories | Inventories consisted of the following: | |||||||||||
At March 31, | At December 31, | |||||||||||
(in thousands) | 2015 | 2014 | 2014 | |||||||||
Raw materials | $ | 84,040 | $ | 92,671 | $ | 97,732 | ||||||
In-process products | 20,262 | 19,822 | 19,496 | |||||||||
Finished products | 101,010 | 104,036 | 99,317 | |||||||||
$ | 205,312 | $ | 216,529 | $ | 216,545 | |||||||
Property_Plant_and_Equipment_N1
Property, Plant and Equipment, Net (Tables) | 3 Months Ended | |||||||||||
Mar. 31, 2015 | ||||||||||||
Property, Plant and Equipment [Abstract] | ||||||||||||
Schedule of property, plant and equipment | Property, plant and equipment, net, consisted of the following: | |||||||||||
At March 31, | At December 31, | |||||||||||
(in thousands) | 2015 | 2014 | 2014 | |||||||||
Land | $ | 28,795 | $ | 29,960 | $ | 29,390 | ||||||
Buildings and site improvements | 171,541 | 178,135 | 175,058 | |||||||||
Leasehold improvements | 5,428 | 5,492 | 5,602 | |||||||||
Machinery, equipment, and software | 225,820 | 229,112 | 228,440 | |||||||||
431,584 | 442,699 | 438,490 | ||||||||||
Less accumulated depreciation and amortization | (246,055 | ) | (240,289 | ) | (245,383 | ) | ||||||
185,529 | 202,410 | 193,107 | ||||||||||
Capital projects in progress | 19,480 | 5,047 | 13,920 | |||||||||
$ | 205,009 | $ | 207,457 | $ | 207,027 | |||||||
Goodwill_and_Intangible_Assets1
Goodwill and Intangible Assets, Net (Tables) | 3 Months Ended | |||||||||||
Mar. 31, 2015 | ||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||
Schedule of goodwill, by segment | Goodwill was as follows: | |||||||||||
At March 31, | At December 31, | |||||||||||
(in thousands) | 2015 | 2014 | 2014 | |||||||||
North America | $ | 84,216 | $ | 84,690 | $ | 84,526 | ||||||
Europe | 37,256 | 42,982 | 37,788 | |||||||||
Asia/Pacific | 1,451 | 1,761 | 1,567 | |||||||||
Total | $ | 122,923 | $ | 129,433 | $ | 123,881 | ||||||
Schedule of net intangible assets, by segment | Amortizable and indefinite-lived intangible assets, net, were as follows: | |||||||||||
At March 31, 2015 | ||||||||||||
Gross | Net | |||||||||||
Carrying | Accumulated | Carrying | ||||||||||
(in thousands) | Amount | Amortization | Amount | |||||||||
North America | $ | 29,415 | $ | (15,545 | ) | $ | 13,870 | |||||
Europe | 29,914 | (12,300 | ) | 17,614 | ||||||||
Total | $ | 59,329 | $ | (27,845 | ) | $ | 31,484 | |||||
At March 31, 2014 | ||||||||||||
Gross | Net | |||||||||||
(in thousands) | Carrying | Accumulated | Carrying | |||||||||
Amount | Amortization | Amount | ||||||||||
North America | $ | 34,495 | $ | (17,278 | ) | $ | 17,217 | |||||
Europe | 33,367 | (10,856 | ) | 22,511 | ||||||||
Total | $ | 67,862 | $ | (28,134 | ) | $ | 39,728 | |||||
At December 31, 2014 | ||||||||||||
Gross | Net | |||||||||||
(in thousands) | Carrying | Accumulated | Carrying | |||||||||
Amount | Amortization | Amount | ||||||||||
North America | $ | 29,455 | $ | (14,719 | ) | $ | 14,736 | |||||
Europe | 29,419 | (11,568 | ) | 17,851 | ||||||||
Total | $ | 58,874 | $ | (26,287 | ) | $ | 32,587 | |||||
Schedule of estimated future amortization of intangible assets | At March 31, 2015, estimated future amortization of definite-lived intangible assets was as follows: | |||||||||||
(in thousands) | ||||||||||||
Remaining nine months of 2015 | $ | 4,522 | ||||||||||
2016 | 5,827 | |||||||||||
2017 | 4,165 | |||||||||||
2018 | 3,227 | |||||||||||
2019 | 3,198 | |||||||||||
2020 | 3,168 | |||||||||||
Thereafter | 5,218 | |||||||||||
$ | 29,325 | |||||||||||
Changes in the carrying amount of goodwill and intangible assets | The changes in the carrying amount of goodwill and intangible assets for the three months ended March 31, 2015, were as follows: | |||||||||||
Intangible | ||||||||||||
(in thousands) | Goodwill | Assets | ||||||||||
Balance at December 31, 2014 | $ | 123,881 | $ | 32,587 | ||||||||
Acquisitions | 556 | 653 | ||||||||||
Amortization | — | (1,557 | ) | |||||||||
Foreign exchange | (1,514 | ) | (199 | ) | ||||||||
Balance at March 31, 2015 | $ | 122,923 | $ | 31,484 | ||||||||
StockBased_Incentive_Plans_Tab
Stock-Based Incentive Plans (Tables) | 3 Months Ended | |||||||||||||
Mar. 31, 2015 | ||||||||||||||
Restricted Stock | ||||||||||||||
Stock-Based Compensation | ||||||||||||||
Schedule of unvested restricted stock unit activity | The following table summarizes the Company’s unvested restricted stock unit activity for the three months ended March 31, 2015: | |||||||||||||
Shares | Weighted- | Aggregate | ||||||||||||
Average Price | Intrinsic | |||||||||||||
Value * | ||||||||||||||
Unvested Restricted Stock Units (RSUs) | (in thousands) | (in thousands) | ||||||||||||
Outstanding at January 1, 2015 | 504 | $ | 31.67 | |||||||||||
Awarded | 339 | |||||||||||||
Vested | (302 | ) | ||||||||||||
Forfeited | (2 | ) | ||||||||||||
Outstanding at March 31, 2015 | 539 | $ | 31.56 | $ | 20,140 | |||||||||
Outstanding and expected to vest at March 31, 2015 | 527 | $ | 31.56 | $ | 19,681 | |||||||||
* | The intrinsic value is calculated using the closing price per share of $37.37 as reported by the New York Stock Exchange on March 31, 2015. | |||||||||||||
Non-Qualified Stock Options | ||||||||||||||
Stock-Based Compensation | ||||||||||||||
Summary of stock option activity | The following table summarizes the Company’s stock option activity for the three months ended March 31, 2015: | |||||||||||||
Shares | Weighted- | Weighted- | Aggregate | |||||||||||
Average | Average | Intrinsic | ||||||||||||
Exercise Price | Remaining | Value * | ||||||||||||
Contractual Life | ||||||||||||||
Non-Qualified Stock Options | (in thousands) | (in years) | (in thousands) | |||||||||||
Outstanding at January 1, 2015 | 855 | $ | 29.48 | |||||||||||
Exercised | (186 | ) | ||||||||||||
Forfeited | (2 | ) | ||||||||||||
Outstanding at March 31, 2015 | 667 | $ | 29.5 | $ | 5,248 | |||||||||
Outstanding and expected to vest at March 31, 2015 | 661 | $ | 29.5 | 2.8 | $ | 5,200 | ||||||||
Exercisable at March 31, 2015 | 667 | $ | 29.5 | 2.8 | $ | 5,248 | ||||||||
* | The intrinsic value represents the amount, if any, by which the fair market value of the underlying common stock exceeds the exercise price of the stock option, using the closing price per share of $37.37 as reported by the New York Stock Exchange on March 31, 2015. | |||||||||||||
Unvested Stock Options | ||||||||||||||
Stock-Based Compensation | ||||||||||||||
Summary of stock option activity | A summary of the status of unvested stock options as of March 31, 2015, and changes during the three months ended March 31, 2015, are presented below: | |||||||||||||
Shares | Weighted- | |||||||||||||
Average | ||||||||||||||
Grant-Date Fair Value | ||||||||||||||
Unvested Stock Options | (in thousands) | |||||||||||||
Unvested at January 1, 2015 | 99 | $ | 10.33 | |||||||||||
Vested | 99 | 10.33 | ||||||||||||
Unvested at March 31, 2015 | — | $ | — | |||||||||||
Segment_Information_Tables
Segment Information (Tables) | 3 Months Ended | |||||||||||
Mar. 31, 2015 | ||||||||||||
Segment Reporting [Abstract] | ||||||||||||
Schedule of performance of reportable segments | The following tables illustrate certain measurements used by management to assess the performance as of or for the following periods: | |||||||||||
Three Months Ended March 31, | ||||||||||||
(in thousands) | 2015 | 2014 | ||||||||||
Net Sales | ||||||||||||
North America | $ | 150,324 | $ | 136,882 | ||||||||
Europe | 22,788 | 27,647 | ||||||||||
Asia/Pacific | 3,379 | 3,759 | ||||||||||
Total | $ | 176,491 | $ | 168,288 | ||||||||
Sales to Other Segments* | ||||||||||||
North America | $ | 884 | $ | 1,130 | ||||||||
Europe | 299 | 466 | ||||||||||
Asia/Pacific | 4,844 | 3,072 | ||||||||||
Total | $ | 6,027 | $ | 4,668 | ||||||||
Income (Loss) from Operations | ||||||||||||
North America | $ | 20,466 | $ | 22,561 | ||||||||
Europe | (1,632 | ) | (919 | ) | ||||||||
Asia/Pacific | (803 | ) | (1,151 | ) | ||||||||
Administrative and all other | (1,754 | ) | (885 | ) | ||||||||
Total | $ | 16,277 | $ | 19,606 | ||||||||
* The sales to other segments are eliminated in consolidation. | ||||||||||||
At | ||||||||||||
At March 31, | December 31, | |||||||||||
(in thousands) | 2015 | 2014 | 2014 | |||||||||
Total Assets | ||||||||||||
North America | $ | 674,914 | $ | 630,323 | $ | 679,844 | ||||||
Europe | 165,795 | 203,606 | 180,005 | |||||||||
Asia/Pacific | 29,626 | 29,932 | 29,552 | |||||||||
Administrative and all other | 82,324 | 89,308 | 83,664 | |||||||||
Total | $ | 952,659 | $ | 953,169 | $ | 973,065 | ||||||
Schedule of net sales distributed by product group | The following table illustrates the distribution of the Company’s net sales by product group for the following periods: | |||||||||||
Three Months Ended March 31, | ||||||||||||
(in thousands) | 2015 | 2014 | ||||||||||
Wood Construction Products | $ | 151,379 | $ | 144,676 | ||||||||
Concrete Construction Products | 25,010 | 23,524 | ||||||||||
Other | 102 | 88 | ||||||||||
Total | $ | 176,491 | $ | 168,288 | ||||||||
Basis_of_Presentation_Details
Basis of Presentation (Details) | 3 Months Ended |
Mar. 31, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
High end of the range of the required percentage voting interest held to account for investments with the equity method of accounting | 50.00% |
Basis_of_Presentation_Basis_of
Basis of Presentation Basis of Presentation (Details 1) (USD $) | 3 Months Ended | 9 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 |
Gross profit | $77,498 | $77,762 | |
Income from operations | 16,277 | 19,606 | |
Net income | 10,051 | 12,087 | 51,444 |
Restatement Adjustment | |||
Gross profit | 0 | ||
Income from operations | 0 | ||
Net income | $0 |
Basis_of_Presentation_Basis_of1
Basis of Presentation Basis of Presentation (Details 2) (Maximum) | 3 Months Ended |
Mar. 31, 2015 | |
Maximum | |
Revenue from External Customer [Line Items] | |
Service Sales Percentage of Net Sales | 1.00% |
Basis_of_Presentation_Details_
Basis of Presentation (Details 3) (USD $) | 3 Months Ended | 9 Months Ended | |
In Thousands, except Per Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 |
Reconciliation of basic earnings per share ("EPS") to diluted EPS | |||
Net income available to common stockholders | $10,051 | $12,087 | $51,444 |
Basic weighted-average shares outstanding | 49,208 | 48,899 | |
Dilutive effect of potential common stock equivalents — stock options and restricted stock units | 200 | 166 | |
Diluted weighted-average shares outstanding | 49,408 | 49,065 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 0 | 0 | |
Earnings per common share: | |||
Basic (in dollars per share) | $0.20 | $0.25 | |
Diluted (in dollars per share) | $0.20 | $0.25 |
Basis_of_Presentation_Details_1
Basis of Presentation (Details 4) (USD $) | 3 Months Ended | ||
In Thousands, except Share data in Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 |
Stock-based compensation activity, including both continuing and discontinued operations | |||
Stock-based compensation expense recognized in operating expenses | $3,084 | $2,476 | |
Less: Tax benefit of stock-based compensation expense in provision for income taxes | 1,052 | 910 | |
Stock-based compensation expense, net of tax | 2,032 | 1,566 | |
Fair value of shares vested | 2,784 | 2,379 | |
Proceeds to the Company from the exercise of stock-based compensation | 5,484 | 1,769 | |
Tax effect from the exercise of stock-based compensation, including shortfall tax benefits | -184 | -135 | |
Fair value of financial instruments | |||
United States Treasury securities and money market funds included in cash equivalents | 91,569 | 99,235 | 99,024 |
Income Taxes | |||
Effective tax rate (as a percent) | 38.10% | 38.60% | |
Provision for income taxes | 6,191 | 7,604 | |
Stock Compensation Plan | |||
Stock-based compensation activity, including both continuing and discontinued operations | |||
Stock-based compensation cost capitalized in inventory | $276 | $459 | |
1994 Plan | |||
Stock-Based Compensation | |||
Requisite service period for options to vest | 4 years | ||
Expiration period for options granted | 7 years | ||
Age after which vesting of options granted accelerates if the grantee ceases to be employed by the entity | 60 years | ||
2011 Plan | |||
Stock-Based Compensation | |||
Maximum common stock shares that may be issued under plan | 16.3 |
Basis_of_Presentation_Details_2
Basis of Presentation (Details 5) (USD $) | 3 Months Ended |
In Millions, unless otherwise specified | Mar. 31, 2015 |
Acquisitions | |
Maximum period for payment for adjustments to provisional fair value measurements | 1 year |
S&P Clever | |
Acquisitions | |
Deferred consideration payment | 0.7 |
Contingent consideration payment | 0.3 |
Bierbach GmbH & Co. KG. | |
Acquisitions | |
Contingent consideration payment | 0.2 |
Basis_of_Presentation_Sales_Of
Basis of Presentation Sales Office Closing (Details) (USD $) | 3 Months Ended |
In Millions, unless otherwise specified | Mar. 31, 2015 |
Restructuring Cost and Reserve [Line Items] | |
Severance costs | $0.80 |
Retention bonuses and professional fees | 1.9 |
Future minimum lease obligations | 1.3 |
Long-lived asset to be disposed | 0.2 |
Accelerated depreciation expense | 0.1 |
Cost of Sales | |
Restructuring Cost and Reserve [Line Items] | |
Severance costs | $0.10 |
Trade_Accounts_Receivable_Net_1
Trade Accounts Receivable, Net (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 | Mar. 31, 2014 |
In Thousands, unless otherwise specified | |||
Receivables [Abstract] | |||
Trade accounts receivable | $120,701 | $95,033 | $117,728 |
Allowance for doubtful accounts | -765 | -929 | -870 |
Allowance for sales discounts and returns | -2,620 | -2,089 | -2,699 |
Trade accounts receivable, net | $117,316 | $92,015 | $114,159 |
Inventories_Details
Inventories (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 | Mar. 31, 2014 |
In Thousands, unless otherwise specified | |||
Inventory Disclosure [Abstract] | |||
Raw materials | $84,040 | $97,732 | $92,671 |
In-process products | 20,262 | 19,496 | 19,822 |
Finished products | 101,010 | 99,317 | 104,036 |
Total inventories | $205,312 | $216,545 | $216,529 |
Property_Plant_and_Equipment_N2
Property, Plant and Equipment, Net (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 | Mar. 31, 2014 |
In Thousands, unless otherwise specified | |||
Property, Plant and Equipment | |||
Property, plant and equipment, gross | $431,584 | $438,490 | $442,699 |
Less accumulated depreciation and amortization | -246,055 | -245,383 | -240,289 |
Property, plant and equipment excluding capital projects in progress, net | 185,529 | 193,107 | 202,410 |
Capital projects in progress | 19,480 | 13,920 | 5,047 |
Property, plant and equipment, net | 205,009 | 207,027 | 207,457 |
Land | |||
Property, Plant and Equipment | |||
Property, plant and equipment, gross | 28,795 | 29,390 | 29,960 |
Buildings and site improvements | |||
Property, Plant and Equipment | |||
Property, plant and equipment, gross | 171,541 | 175,058 | 178,135 |
Leasehold improvements | |||
Property, Plant and Equipment | |||
Property, plant and equipment, gross | 5,428 | 5,602 | 5,492 |
Machinery, equipment, and software | |||
Property, Plant and Equipment | |||
Property, plant and equipment, gross | $225,820 | $228,440 | $229,112 |
Goodwill_and_Intangible_Assets2
Goodwill and Intangible Assets, Net (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 | Mar. 31, 2014 |
In Thousands, unless otherwise specified | |||
Carrying amount of goodwill by reportable segment | |||
Goodwill | $122,923 | $123,881 | $129,433 |
North America | |||
Carrying amount of goodwill by reportable segment | |||
Goodwill | 84,216 | 84,526 | 84,690 |
Europe | |||
Carrying amount of goodwill by reportable segment | |||
Goodwill | 37,256 | 37,788 | 42,982 |
Asia/Pacific | |||
Carrying amount of goodwill by reportable segment | |||
Goodwill | $1,451 | $1,567 | $1,761 |
Goodwill_and_Intangible_Assets3
Goodwill and Intangible Assets, Net (Details 2) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 | Mar. 31, 2014 |
In Thousands, unless otherwise specified | |||
Changes in gross carrying amount of finite-lived intangible assets | |||
Finite-Lived Intangible Assets, Gross | $59,329 | $58,874 | $67,862 |
Accumulated Amortization | -27,845 | -26,287 | -28,134 |
Net Carrying Amount | 31,484 | 32,587 | 39,728 |
Estimated future amortization of intangible assets | |||
Remaining nine months of 2015 | 4,522 | ||
2016 | 5,827 | ||
2017 | 4,165 | ||
2018 | 3,227 | ||
2019 | 3,198 | ||
2020 | 3,168 | ||
Thereafter | 5,218 | ||
Total | 29,325 | ||
North America | |||
Changes in gross carrying amount of finite-lived intangible assets | |||
Finite-Lived Intangible Assets, Gross | 29,415 | 29,455 | 34,495 |
Accumulated Amortization | -15,545 | -14,719 | -17,278 |
Net Carrying Amount | 13,870 | 14,736 | 17,217 |
Europe | |||
Changes in gross carrying amount of finite-lived intangible assets | |||
Finite-Lived Intangible Assets, Gross | 29,914 | 29,419 | 33,367 |
Accumulated Amortization | -12,300 | -11,568 | -10,856 |
Net Carrying Amount | $17,614 | $17,851 | $22,511 |
Goodwill_and_Intangible_Assets4
Goodwill and Intangible Assets, Net Goodwill and Intangible Assets, Net (Details 3) (USD $) | 3 Months Ended | ||
Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 | |
Indefinite-lived Intangible Assets [Line Items] | |||
Amortization of intangibles | $1,557,000 | $2,200,000 | |
In-Process Research and Development and Trade Name | |||
Indefinite-lived Intangible Assets [Line Items] | |||
Indefinite-lived intangible assets | $2,200,000 | $5,700,000 | $2,100,000 |
Goodwill_and_Intangible_Assets5
Goodwill and Intangible Assets, Net (Details 4) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Changes in the carrying amount of goodwill | ||
Balance at the beginning of the period | $123,881 | |
Acquisitions | 556 | |
Foreign exchange | -1,514 | |
Balance at the end of the period | 122,923 | 129,433 |
Changes in the carrying amount of intangible assets | ||
Balance at the beginning of the period | 32,587 | |
Acquisitions | 653 | |
Amortization | -1,557 | -2,200 |
Foreign exchange | -199 | |
Balance at the end of the period | $31,484 | $39,728 |
Debt_Details
Debt (Details) (USD $) | 3 Months Ended | ||
Mar. 31, 2015 | Dec. 31, 2014 | Mar. 31, 2014 | |
Debt | |||
Credit facility, maximum borrowing capacity | $304,300,000 | ||
Primary revolving line of credit | |||
Debt | |||
Credit facility, maximum borrowing capacity | 300,000,000 | ||
Primary revolving line of credit | Minimum | |||
Debt | |||
Facility fees on the available commitment of the facility (as a percent) | 0.15% | ||
Primary revolving line of credit | Maximum | |||
Debt | |||
Facility fees on the available commitment of the facility (as a percent) | 0.30% | ||
Primary revolving line of credit | LIBOR | |||
Debt | |||
LIBOR Rate at end of period (as a percent) | 0.18% | ||
Credit facility, interest rate basis | LIBOR | ||
Primary revolving line of credit | LIBOR | Minimum | |||
Debt | |||
Credit facility, interest rate spread (as a percent) | 0.60% | ||
Primary revolving line of credit | LIBOR | Maximum | |||
Debt | |||
Credit facility, interest rate spread (as a percent) | 1.45% | ||
Primary revolving line of credit | Base rate | |||
Debt | |||
Credit facility, interest rate basis | base rate | ||
Primary revolving line of credit | Base rate | Minimum | |||
Debt | |||
Credit facility, interest rate spread (as a percent) | 0.00% | ||
Primary revolving line of credit | Base rate | Maximum | |||
Debt | |||
Credit facility, interest rate spread (as a percent) | 0.45% | ||
Other revolving credit lines and long term debt | |||
Debt | |||
Total borrowing capacity | 4,300,000 | ||
Credit facility, interest rate low end of range (as a percent) | 0.82% | ||
Credit facility, interest rate high end of range (as a percent) | 7.25% | ||
Total outstanding balances | $0 | $18,000 | $83,000 |
Commitments_and_Contingencies_
Commitments and Contingencies (Details) | 3 Months Ended | 1 Months Ended |
Mar. 31, 2015 | Feb. 29, 2012 | |
lawsuit | lawsuit | |
Litigation | ||
Number of lawsuits filed against the entity | 4 | |
Number of cases that alleges damages | 0 | |
Nishimura case | ||
Litigation | ||
Number of lawsuits filed against the entity | 5 | |
Number of lawsuits dismissed | 3 |
StockBased_Incentive_Plans_Det
Stock-Based Incentive Plans (Details) (USD $) | 0 Months Ended | 3 Months Ended | |
Feb. 02, 2015 | Mar. 31, 2015 | Mar. 31, 2014 | |
Stock-Based Compensation | |||
Number of stock-based incentive plans | 1 | ||
Number of stock option plans superseded | 2 | ||
Aggregate Intrinsic Value | |||
Granted (in shares) | 0 | ||
Total intrinsic value of options exercised (in dollars) | $1,200,000 | $300,000 | |
Unrecognized compensation cost and vesting period | |||
Unrecognized compensation costs related to unvested share-based compensation arrangements | 12,000,000 | ||
Weighted-average period for recognition of unrecognized stock-based compensation expense | 2 years 3 months 18 days | ||
Restricted Stock Units | |||
Stock-Based Compensation | |||
Weighted average granted date fair value (in dollars per share) | $32.64 | ||
Restricted stock unit activity | |||
Outstanding at the beginning of the period (in shares) | 504,000 | ||
Awarded (in shares) | 339,047 | 339,000 | |
Vested (in shares) | -302,000 | ||
Forfeited (in shares) | -2,000 | ||
Outstanding at the end of the period (in shares) | 539,000 | ||
Outstanding and expected to vest at the end of the period (in shares) | 527,000 | ||
Weighted-Average Exercise Price | |||
Outstanding at the beginning of the period (in dollars per share) | $31.67 | ||
Outstanding at the end of the period (in dollars per share) | $31.56 | ||
Outstanding and expected to vest at the end of the period (in dollars per share) | $31.56 | ||
Aggregate Intrinsic Value | |||
Outstanding at the end of the period (in dollars) | 20,140,000 | ||
Outstanding and expected to vest at end of the period (in dollars) | 19,681,000 | ||
Aggregate Intrinsic Value | |||
Closing price per share (in dollars per share) | $37.37 | ||
Total intrinsic value of awards vested (in dollars) | 9,700,000 | 7,900,000 | |
Non-Qualified Stock Options | |||
Non-Qualified Stock Options activity | |||
Outstanding at the beginning of the period (in shares) | 855,000 | ||
Exercised (in shares) | -186,000 | ||
Forfeited (in shares) | -2,000 | ||
Outstanding at the end of the period (in shares) | 667,000 | ||
Outstanding and expected to vest at the end of the period (in shares) | 661,000 | ||
Exercisable at the end of the period (in shares) | 667,000 | ||
Weighted-Average Exercise Price | |||
Outstanding at the beginning of the period (in dollars per share) | $29.48 | ||
Outstanding at the end of the period (in dollars per share) | $29.50 | ||
Outstanding and expected to vest at end of the period (in dollars per share) | $29.50 | ||
Exercisable at end of the period (in dollars per share) | $29.50 | ||
Weighted-Average Remaining Contractual Life | |||
Outstanding and expected to vest | 2 years 9 months 18 days | ||
Exercisable at end of the period | 2 years 9 months 18 days | ||
Aggregate Intrinsic Value | |||
Outstanding at the end of the period (in dollars) | 5,248,000 | ||
Outstanding and expected to vest at end of the period (in dollars) | 5,200,000 | ||
Exercisable at end of the period (in dollars) | $5,248,000 | ||
Unvested Stock Options | |||
Number of Shares, Unvested Stock Options | |||
Unvested at the beginning of the period (in shares) | 99,000 | ||
Vested (in shares) | -99,000 | ||
Unvested at the end of the period (in shares) | 0 | ||
Weighted-Average Grant-Date Fair Value, Unvested Stock Options | |||
Unvested at the beginning of the period (in dollars per share) | $10.33 | ||
Vested (in dollars per share) | $10.33 | ||
Unvested at the end of the period (in dollars per share) | $0 | ||
Non Employee Directors | Restricted Stock Units | |||
Restricted stock unit activity | |||
Awarded (in shares) | 8,550 |
Segment_Information_Details
Segment Information (Details) (USD $) | 3 Months Ended | |||
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2013 |
segment | ||||
Segment Reporting [Abstract] | ||||
Number of reportable segments | 3 | |||
Segment Information | ||||
Net sales | $176,491 | $168,288 | ||
Income (Loss) from Operations | 16,277 | 19,606 | ||
Total Assets | 952,659 | 953,169 | 973,065 | |
Cash and cash equivalent | 233,587 | 211,988 | 260,307 | 251,208 |
Intersegment elimination | ||||
Segment Information | ||||
Net sales | 6,027 | 4,668 | ||
Administrative and all other | ||||
Segment Information | ||||
Income (Loss) from Operations | -1,754 | -885 | ||
Total Assets | 82,324 | 89,308 | 83,664 | |
Cash and cash equivalent | 151,200 | 116,100 | 167,400 | |
North America | ||||
Segment Information | ||||
Net sales | 150,324 | 136,882 | ||
Income (Loss) from Operations | 20,466 | 22,561 | ||
Total Assets | 674,914 | 630,323 | 679,844 | |
North America | Intersegment elimination | ||||
Segment Information | ||||
Net sales | 884 | 1,130 | ||
Europe | ||||
Segment Information | ||||
Net sales | 22,788 | 27,647 | ||
Income (Loss) from Operations | -1,632 | -919 | ||
Total Assets | 165,795 | 203,606 | 180,005 | |
Europe | Intersegment elimination | ||||
Segment Information | ||||
Net sales | 299 | 466 | ||
Asia/Pacific | ||||
Segment Information | ||||
Net sales | 3,379 | 3,759 | ||
Income (Loss) from Operations | -803 | -1,151 | ||
Total Assets | 29,626 | 29,932 | 29,552 | |
Asia/Pacific | Intersegment elimination | ||||
Segment Information | ||||
Net sales | $4,844 | $3,072 |
Segment_Information_Details_2
Segment Information (Details 2) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
segment | ||
Net sales and long-lived assets by geographical area | ||
Number of Reportable Segments | 3 | |
Net sales | $176,491 | $168,288 |
Wood Construction Products | ||
Net sales and long-lived assets by geographical area | ||
Net sales | 151,379 | 144,676 |
Concrete Construction Products | ||
Net sales and long-lived assets by geographical area | ||
Net sales | 25,010 | 23,524 |
Other | ||
Net sales and long-lived assets by geographical area | ||
Net sales | $102 | $88 |
Subsequent_Events_Details
Subsequent Events (Details) (USD $) | 3 Months Ended | 9 Months Ended | 0 Months Ended | 1 Months Ended | |
In Thousands, except Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 | Apr. 21, 2015 | Apr. 30, 2015 |
Subsequent Event [Line Items] | |||||
Cash dividends declared per common share (in dollars per share) | $0.14 | $0.13 | $0.42 | ||
Estimated total cash dividend | $6,927 | $6,116 | $20,550 | ||
Subsequent Event | |||||
Subsequent Event [Line Items] | |||||
Cash dividends declared per common share (in dollars per share) | $0.16 | ||||
Estimated total cash dividend | $7,900 | ||||
Dividends payable, date to be paid | 23-Jul-15 | ||||
Dividends payable, date of record | 2-Jul-15 | ||||
Per share increase on dividend declared (in dollars per share) | $0.02 | ||||
Percentage increase on dividend declared | 14.30% | ||||
Restricted stock units awarded to directors | 1,950 | ||||
Estimated value per share of restricted stock units awarded (in dollars per share) | $36.33 | ||||
Restriction percentage on RSUs | 100.00% |