UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the Quarterly period ended: September 30, 2000
------------------
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
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Commission file number: 0-23804
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Simpson Manufacturing Co., Inc.
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(Exact name of registrant as specified in its charter)
Delaware 94-3196943
------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
4120 Dublin Boulevard, Suite 400, Dublin, CA 94568
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(Address of principal executive offices)
(Registrant's telephone number, including area code): (925)560-9000
------------
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter
period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Yes X No
--- ---
The number of shares of the Registrant's Common Stock outstanding as of
September 30, 2000: 12,017,860
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PART I -- FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
SIMPSON MANUFACTURING CO., INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
September 30,
----------------------------
(Unaudited) December 31,
2000 1999 1999
------------ ------------ ------------
ASSETS
Current assets
Cash and cash equivalents $ 62,849,064 $ 44,174,362 $ 54,509,610
Trade accounts receivable, net 52,136,543 50,461,040 42,420,223
Inventories 80,284,287 68,867,778 72,751,245
Deferred income taxes 5,104,209 4,400,358 4,745,534
Other current assets 2,727,747 1,505,336 1,323,215
------------ ------------ ------------
Total current assets 203,101,850 169,408,874 175,749,827
Property, plant and equipment, net 59,905,593 60,024,345 61,143,524
Investments 365,223 385,264 374,455
Other noncurrent assets 14,306,254 10,452,557 9,986,187
------------ ------------ ------------
Total assets $277,678,920 $240,271,040 $247,253,993
============ ============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Notes payable and current
portion of long-term debt $ 332,563 $ 300,000 $ 349,541
Trade accounts payable 14,167,506 14,637,458 12,780,621
Accrued liabilities 8,129,591 7,622,273 7,819,155
Income taxes payable 947,010 3,469,005 3,362,254
Accrued profit sharing trust
contributions 3,065,667 2,696,669 3,504,286
Accrued cash profit sharing
and commissions 6,518,992 5,973,646 4,531,861
Accrued workers' compensation 1,395,764 1,145,764 1,345,764
------------ ------------ ------------
Total current liabilities 34,557,093 35,844,815 33,693,482
Long-term debt, net of current portion 2,219,512 2,584,345 2,414,562
Deferred income taxes and long-term
liabilities 357,630 621,840 556,783
------------ ------------ ------------
Total liabilities 37,134,235 39,051,000 36,664,827
------------ ------------ ------------
Minority interest in consolidated
subsidiaries 1,035,155 - -
------------ ------------ ------------
Commitments and contingencies (Notes 5 and 6)
Stockholders' equity
Common stock 43,724,580 44,655,797 44,716,488
Retained earnings 198,522,710 156,827,894 166,457,600
Accumulated other comprehensive income (2,737,760) (263,651) (584,922)
------------ ------------ ------------
Total stockholders' equity 239,509,530 201,220,040 210,589,166
------------ ------------ ------------
Total liabilities and
stockholders' equity $277,678,920 $240,271,040 $247,253,993
============ ============ ============
The accompanying notes are an integral part of these
condensed consolidated financial statements.
Simpson Manufacturing Co., Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
---------------------------- ----------------------------
2000 1999 2000 1999
------------ ------------ ------------ ------------
Net sales $101,048,081 $ 88,807,636 $283,489,158 $247,221,970
Cost of sales 60,370,306 52,358,565 169,828,466 147,660,284
------------ ------------ ------------ ------------
Gross profit 40,677,775 36,449,071 113,660,692 99,561,686
------------ ------------ ------------ ------------
Operating expenses:
Selling 9,806,039 8,123,050 28,087,648 24,062,580
General and administrative 12,655,445 10,278,192 34,950,828 28,399,663
------------ ------------ ------------ ------------
22,461,484 18,401,242 63,038,476 52,462,243
------------ ------------ ------------ ------------
Income from operations 18,216,291 18,047,829 50,622,216 47,099,443
Interest income, net 826,865 476,698 2,094,049 1,080,243
------------ ------------ ------------ ------------
Income before income taxes 19,043,156 18,524,527 52,716,265 48,179,686
Provision for income taxes 7,852,00 7,408,000 21,616,000 19,342,000
Minority interest (274,008) - (964,845) -
------------ ------------ ------------ ------------
Net income $ 11,465,164 $ 11,116,527 $ 32,065,110 $ 28,837,686
============ ============ ============ ============
Net income per common share
Basic $ 0.95 $ 0.93 $ 2.66 $ 2.45
Diluted $ 0.93 $ 0.90 $ 2.60 $ 2.36
Number of shares outstanding
Basic 12,048,205 11,968,123 12,037,015 11,777,481
Diluted 12,335,196 12,311,909 12,311,193 12,218,050
Simpson Manufacturing Co., Inc. and Subsidiaries
Condensed Consolidated Statements of Comprehensive Income
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
---------------------------- ----------------------------
2000 1999 2000 1999
------------ ------------ ------------ ------------
Net income $ 11,465,164 $ 11,116,527 $ 32,065,110 $ 28,837,686
Other comprehensive income, net of tax:
Foreign currency translation
adjustments (940,509) 559,600 (2,152,838) 168,039
------------ ------------ ------------ ------------
Comprehensive income $ 10,524,655 $ 11,676,127 $ 29,912,272 $ 29,005,725
============ ============ ============ ============
The accompanying notes are an integral part of these
condensed consolidated financial statements.
Simpson Manufacturing Co., Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(Unaudited)
Nine Months Ended
September 30,
----------------------------
2000 1999
------------ ------------
Cash flows from operating activities
Net income $ 32,065,110 $ 28,837,686
------------ ------------
Adjustments to reconcile net income to net cash
provided by operating activities:
Gain on sale of capital equipment (86,032) (43,308)
Depreciation and amortization 10,030,929 8,148,734
Minority interest (964,845) -
Deferred income taxes and long-term liabilities (535,368) (560,068)
Equity in income of affiliates (23,195) 107,273
Noncash compensation related to stock plans 196,875 119,800
Changes in operating assets and liabilities, net of
effects of acquisitions:
Trade accounts receivable (9,591,936) (16,371,918)
Inventories (8,031,023) (11,708,181)
Trade accounts payable 1,665,392 2,876,221
Income taxes payable (1,856,952) 8,275,688
Accrued profit sharing trust contributions (429,062) (476,693)
Accrued cash profit sharing and commissions 1,987,432 1,953,840
Other current assets (1,460,413) (222,522)
Accrued liabilities 445,164 2,030,982
Accrued workers' compensation 50,000 266,492
Other noncurrent assets (261,386) (1,619,970)
------------ ------------
Total adjustments (8,864,420) (7,223,630)
------------ ------------
Net cash provided by operating activities 23,200,690 21,614,056
------------ ------------
Cash flows from investing activities
Capital expenditures (8,120,242) (11,903,467)
Asset acquisitions, net of cash acquired (4,620,151) (7,833,090)
Proceeds from sale of equipment 183,368 260,476
------------ ------------
Net cash used in investing activities (12,557,025) (19,476,081)
------------ ------------
Cash flows from financing activities
Issuance of debt 143,545 202,040
Repayment of debt (331,441) (213,581)
Buyback of common stock (2,314,305) -
Issuance of common stock 580,137 4,540,085
------------ ------------
Net cash provided by (used in) financing
activities (1,922,064) 4,528,544
------------ ------------
Effect of exchange rate changes on cash (382,147) 105,393
------------ ------------
Net increase in cash and cash equivalents 8,339,454 6,771,912
Cash and cash equivalents at beginning of period 54,509,610 37,402,450
------------ ------------
Cash and cash equivalents at end of period $ 62,849,064 $ 44,174,362
============ ============
The accompanying notes are an integral part of these
condensed consolidated financial statements.
Simpson Manufacturing Co., Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
1. Basis of Presentation
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 generally accepted accounting principles have been condensed
or omitted. These interim statements should be read in conjunction with
the consolidated financial statements and the notes thereto included in
Simpson Manufacturing Co., Inc.'s (the "Company's") 1999 Annual Report on
Form 10-K (the "1999 Annual Report").
The unaudited quarterly condensed consolidated financial statements have
been prepared on the same basis as the audited annual consolidated
financial statements, and in the opinion of management, contain all
adjustments (consisting of only normal recurring adjustments) necessary
to present fairly the financial information set forth therein, in
accordance with generally accepted accounting principles. The year-end
condensed consolidated balance sheet data was derived from audited
financial statements, but does not include all disclosures required by
generally accepted accounting principles. The Company's quarterly results
may be subject to fluctuations. As a result, the Company believes the
results of operations for the interim periods are not necessarily
indicative of the results to be expected for any future period.
Net Income Per Common Share
Basic net income per common share is computed based upon the weighted
average number of common shares outstanding. Common equivalent shares,
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 share ("EPS") to
diluted EPS:
Three Months Ended Three Months Ended
September 30, 2000 September 30, 1999
---------------------------------- ----------------------------------
Per Per
Income Shares Share Income Shares Share
------------ ------------ ------ ------------ ------------ ------
Basic EPS
Income available to
common stockholders $ 11,465,164 12,048,205 $ 0.95 $ 11,116,527 11,968,123 $ 0.93
Effect of Dilutive Securities
Stock options - 286,991 (0.02) - 343,786 (0.03)
------------ ------------ ------ ------------ ------------ ------
Diluted EPS
Income available to
common stockholders $ 11,465,164 12,335,196 $ 0.93 $ 11,116,527 12,311,909 $ 0.90
============ ============ ====== ============ ============ ======
Nine Months Ended Nine Months Ended
September 30, 2000 September 30, 1999
---------------------------------- ----------------------------------
Per Per
Income Shares Share Income Shares Share
------------ ------------ ------ ------------ ------------ ------
Basic EPS
Income available to
common stockholders $ 32,065,110 12,037,015 $ 2.66 $ 28,837,686 11,777,481 $ 2.45
Effect of Dilutive Securities
Stock options - 274,178 (0.06) - 440,569 (0.09)
------------ ------------ ------ ------------ ------------ ------
Diluted EPS
Income available to
common stockholders $ 32,065,110 12,311,193 $ 2.60 $ 28,837,686 12,218,050 $ 2.36
============ ============ ====== ============ ============ ======
Reclassifications
Certain prior period amounts have been reclassified to conform to the
2000 presentation with no effect on net income or retained earnings as
previously reported.
2. Trade Accounts Receivable
Trade accounts receivable consist of the following:
At September 30,
----------------------------
(Unaudited) December 31,
2000 1999 1999
------------ ------------ ------------
Trade accounts receivable $ 53,831,941 $ 52,066,509 $ 43,952,137
Allowance for doubtful accounts (1,212,388) (1,205,142) (1,203,147)
Allowance for sales discounts (483,010) (400,327) (328,767)
------------ ------------ ------------
$ 52,136,543 $ 50,461,040 $ 42,420,223
============ ============ ============
3. Inventories
The components of inventories consist of the following:
At September 30,
----------------------------
(Unaudited) December 31,
2000 1999 1999
------------ ------------ ------------
Raw materials $ 24,552,076 $ 20,807,497 $ 22,816,584
In-process products 8,607,644 7,368,534 7,593,038
Finished products 47,124,567 40,691,747 42,341,623
------------ ------------ ------------
$ 80,284,287 $ 68,867,778 $ 72,751,245
============ ============ ============
Approximately 89% of the Company's inventories are valued using the LIFO
(last-in, first-out) method. Because inventory determination under the
LIFO method is only made at the end of each year based on the inventory
levels and costs at that time, interim LIFO determinations must
necessarily be based on management's estimates of expected year-end
inventory levels and costs. Since future estimates of inventory levels
and costs are subject to change, interim financial results reflect the
Company's most recent estimate of the effect of LIFO and are subject to
adjustment based upon final year-end inventory amounts. At September 30,
2000 and 1999, and December 31, 1999, LIFO cost exceeded the replacement
value of LIFO inventories by approximately $966,000, $620,000 and
$1,503,000, respectively.
4. Net Property, Plant and Equipment
Net property, plant and equipment consists of the following:
At September 30,
----------------------------
(Unaudited) December 31,
2000 1999 1999
------------ ------------ ------------
Land $ 4,448,131 $ 4,321,061 $ 4,316,015
Buildings and site improvements 27,572,682 26,762,081 26,724,935
Leasehold improvements 3,949,068 3,887,913 3,942,613
Machinery and equipment 84,300,900 74,568,615 81,147,265
------------ ------------ ------------
120,270,781 109,539,670 116,130,828
Less accumulated depreciation
and amortization (66,775,904) (56,420,453) (58,949,908)
------------ ------------ ------------
53,494,877 53,119,217 57,180,920
Capital projects in progress 6,410,716 6,905,128 3,962,604
------------ ------------ ------------
$ 59,905,593 $ 60,024,345 $ 61,143,524
============ ============ ============
5. Debt
Outstanding debt at September 30, 2000 and 1999, and December 31, 1999,
and the available credit at September 30, 2000, consisted of the
following:
Debt Outstanding
Available --------------------------------------------
Credit at at September 30, at
September 30, ---------------------------- December 31,
2000 2000 1999 1999
------------ ------------ ------------ ------------
Revolving line of credit, interest
at bank's reference rate (at
September 30, 2000, the bank's
reference rate was 9.50%),
expires November 2001 $ 12,257,301 $ - $ - $ -
Revolving term commitment, interest
at bank's prime rate (at September
30, 2000, the bank's prime rate less
0.50% was 9.00%), expires September
2002 8,344,838 - - -
Revolving line of credit, interest rate
at the bank's base rate of interest
plus 2%, expires July 2001 365,711 - - -
Term loan, fixed interest rate
of 5.3%, expires September 2006 - 119,512 154,819 164,562
Standby letter of credit facilities 2,397,861 - - -
Term loan, interest at LIBOR plus
1.375% (at September 30, 2000, LIBOR
plus 1.375% was 7.9956%), expires
May 2008 - 2,400,000 2,700,000 2,550,000
Other notes payable and long-term debt - 32,563 29,526 49,541
------------ ------------ ------------ ------------
23,365,711 2,552,075 2,884,345 2,764,103
Less current portion - (332,563) (300,000) (349,541)
------------ ------------ ------------ ------------
23,365,711 $ 2,219,512 $ 2,584,345 $ 2,414,562
Standby letters of credit issued ============ ============ ============
and outstanding (2,397,861)
------------
$ 20,967,850
============
As of September 30, 2000, the Company had three outstanding standby
letters of credit. Two of these letters of credit, in the aggregate
amount of $1,710,324, are used to support the Company's self-insured
workers' compensation insurance requirements. The third, in the amount
of $687,537, is used to guarantee performance on the Company's leased
facility in the United Kingdom. Other notes payable represent debt
associated with foreign businesses.
6. Commitments and Contingencies
Note 9 to the consolidated financial statements in the Company's 1999
Annual Report provides information concerning commitments and
contingencies. From time to time, the Company is involved in various
legal proceedings and other matters arising in the normal course of
business.
7. Segment Information
The Company is organized into two primary segments. The segments are
defined by types of products manufactured, marketed and distributed to
the Company's customers. The two product segments are connector products
and venting products. These segments are differentiated in several ways,
including the types of materials used, the production process, the
distribution channels used and the applications in which the products are
used. Transactions between the two segments were immaterial for each of
the periods presented.
The following table illustrates certain measurements used by management
to assess the performance of the segments described above as of or for
the three and nine months ended:
Three Months Ended Nine Months Ended
September 30, September 30,
---------------------------- ----------------------------
2000 1999 2000 1999
------------ ------------ ------------ ------------
Net Sales
Connector products $ 84,604,000 $ 71,607,000 $237,402,000 $199,989,000
Venting products 16,444,000 17,201,000 46,087,000 47,233,000
------------ ------------ ------------ ------------
Total $101,048,000 $ 88,808,000 $283,489,000 $247,222,000
============ ============ ============ ============
Income from Operations
Connector products $ 16,203,000 $ 15,360,000 $ 44,836,000 $ 40,100,000
Venting products 2,010,000 2,575,000 5,749,000 7,010,000
All other 3,000 113,000 37,000 (11,000)
------------ ------------ ------------ ------------
Total $ 18,216,000 $ 18,048,000 $ 50,622,000 $ 47,099,000
============ ============ ============ ============
At September 30,
---------------------------- At
(Unaudited) December 31,
2000 1999 1999
------------ ------------ ------------
Total Assets
Connector products $164,708,000 $149,661,000 $148,328,000
Venting products 48,322,000 43,020,000 38,828,000
All other 64,649,000 47,590,000 60,098,000
------------ ------------ ------------
Total $277,679,000 $240,271,000 $247,254,000
============ ============ ============
Cash collected by the Company's subsidiaries is routinely transferred
into the Company's cash management accounts and, therefore, has been
included in the total assets of the segment entitled "All other." Cash
and cash equivalent balances in this segment were approximately
$57,163,000, $41,607,000 and $53,682,000 as of September 30, 2000 and
1999, and December 31, 1999, respectively.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
Certain matters discussed below are forward-looking statements that
involve risks and uncertainties, certain of which are discussed in this
report and in other reports filed by the Company with the Securities and
Exchange Commission. Actual results might differ materially from results
suggested by any forward-looking statements in this report.
The following is a discussion and analysis of the consolidated financial
condition and results of operations for the Company for the three and
nine months ended September 30, 2000 and 1999. The following should be
read in conjunction with the interim Condensed Consolidated Financial
Statements and related Notes appearing elsewhere herein.
Results of Operations for the Three Months Ended September 30, 2000,
Compared with the Three Months Ended September 30, 1999
Net sales increased 13.8% in the third quarter of 2000 as compared to the
third quarter of 1999. Most of the sales growth occurred domestically,
particularly in California. Simpson Strong-Tie's third quarter sales
increased 18.2% over the same quarter last year, while Simpson Dura-
Vent's sales decreased 4.4%. Contractor distributors and homecenters were
the fastest growing connector sales channel. The sales increase was broad
based across most of Simpson Strong-Tie's major product lines. Strong-
Wall and Anchor Systems product lines had the highest growth rates in
sales. Sales of Simpson Dura-Vent's Direct-Vent and gas vent product
lines decreased compared to the third quarter of 1999, while sales of its
chimney and pellet vent product lines increased. Based on a report by the
Energy Information Administration in October 2000, this shift,
particularly in the Northeastern region of the United States, may be
partially attributable to the effects of increased natural gas and
heating oil prices on demand for wood burning appliances.
Income from operations increased 1.0% from $18,047,829 in the third
quarter of 1999 to $18,216,291 in the third quarter of 2000 primarily as
a result of the increased sales offset by lower gross margins. Gross
margins decreased from 41.0% in the third quarter of 1999 to 40.3% in the
third quarter of 2000 primarily due to a LIFO charge in the third quarter
of 2000 compared to a credit in the third quarter of 1999. The charge was
offset slightly by better absorption of fixed overhead costs as a result
of increased production. Selling expenses increased 20.7% from $8,123,050
in the third quarter of 1999 to $9,806,039 in the third quarter of 2000.
The increase was primarily due to higher personnel costs related to the
increase in the number of sales and merchandising personnel, particularly
those associated with selling the Anchoring Systems product line, and
increased promotional expenses. General and administrative expenses
increased 23.1% from $10,278,192 in the third quarter of 1999 to
$12,655,445 in the third quarter of 2000 primarily due to increased cash
profit sharing expenses resulting from higher operating income, and
higher personnel and other administrative overhead costs, including costs
associated with the operation of Keybuilder.com LLC ("Keybuilder.com"),
the Company's joint venture with Keymark Enterprises, Inc., ("Keymark")
and those associated with the acquisition of Anchor Tiedown Systems
("ATS"). The stated tax rate was 41.2%, yielding an effective tax rate of
40.7% after considering the effect of Keymark's minority interest in
Keybuilder.com, in the third quarter of 2000, an increase from 40.0% in
the third quarter of 1999.
Results of Operations for the Nine Months Ended September 30, 2000,
Compared with the Nine Months Ended September 30, 1999
Net sales increased 14.7% in the first nine months of 2000 as compared to
the first nine months of 1999. Most of the sales growth occurred
domestically, particularly in California. International sales contributed
to the increase, due in part to the acquisition of Furfix in the third
quarter of 1999. Simpson Strong-Tie's first nine month's sales increased
18.7% over the same period last year, while Simpson Dura-Vent's sales
decreased 2.4%. Contractor distributors and homecenters were the fastest
growing connector sales channel. The sales increase was broad based
across most of Simpson Strong-Tie's major product lines. Strong-Wall and
Anchor Systems product lines had the highest growth rates in sales.
Simpson Dura-Vent's year-to-date sales of gas vent products declined as
compared to the first nine months of 1999, while sales of its Direct-Vent
product line increased slightly, despite the decline in the third quarter
of 2000.
Income from operations increased 7.5% from $47,099,443 in the first nine
months of 1999 to $50,622,216 in the first nine months of 2000 primarily
as a result of higher sales. Gross margins decreased slightly from 40.3%
in the first nine months of 1999 to 40.1% in the first nine months of
2000 primarily due to a LIFO charge in 2000 compared to a credit in 1999
and increased production costs. These charges were offset by better
absorption of fixed overhead costs as a result of increased production.
Selling expenses increased 16.7% from $24,062,580 in the first nine
months of 1999 to $28,087,648 in the first nine months of 2000. The
increase was primarily due to higher personnel costs related to the
increase in the number of sales and merchandising personnel, particularly
those associated with selling the Anchoring Systems product line, as well
as increased promotional expenses. General and administrative expenses
increased 23.1% from $28,399,663 in the first nine months of 1999 to
$34,950,828 in the first nine months of 2000 primarily due to increased
cash profit sharing expenses resulting from higher operating income, and
higher personnel and other administrative overhead costs, including costs
associated with the operation of Keybuilder.com and the acquisitions of
Furfix and ATS. The stated tax rate was 41.0%, yielding an effective tax
rate of 40.3% after considering the effect of Keymark's minority interest
in Keybuilder.com, in the first nine months of 2000, an increase from
40.1% in the first nine months of 1999.
In July 2000, the Company acquired of the assets of ("ATS") for
approximately $4.6 million in cash. ATS manufactures and distributes the
MBR product line used to anchor multi-story buildings utilizing a
threaded rod hold down system.
In October 2000, the Board of Directors authorized the Company, for a
period of one year, to buy back up to $35 million of the Company's common
stock. This replaces the authorization from late last year when the Board
of Directors authorized a buy back of up to $10 million. In September,
the Company changed the two profit sharing trust plans for its U.S. based
employees to self-directed investment management by the plan
participants. As a result of the rebalancing of the plan assets, the
Company purchased a net amount of 48,980 shares of its common stock
directly from the plans for approximately $2.3 million.
Liquidity and Sources of Capital
As of September 30, 2000, working capital was $168.5 million as compared
to $133.6 million at September 30, 1999, and $142.1 million at December
31, 1999. Other than the change in cash and cash equivalents, the
principal components of the increase in working capital from December 31,
1999, were increases in the Company's trade accounts receivable and
inventories totaling approximately $17.3 million, primarily due to higher
sales levels, and a decrease in income taxes payable of approximately
$2.4 million. Offsetting these increases were increases, aggregating
approximately $3.4 million, in accrued cash profit sharing and trade
accounts payable. The balance of the change in working capital was due to
the fluctuation of various other asset and liability accounts. The
working capital change and changes in noncurrent assets and liabilities
combined with net income and noncash expenses, primarily depreciation and
amortization, totaling approximately $42.1 million, resulted in net cash
provided by operating activities of approximately $23.2 million. As of
September 30, 2000, the Company had unused credit facilities available of
approximately $21.0 million.
The Company used approximately $12.6 million in its investing activities,
primarily to purchase the capital equipment and property needed to expand
its capacity and in the acquisition of ATS. The Company plans to continue
this expansion throughout the remainder of the year and into 2001.
The Company believes that cash generated by operations and borrowings
available under its existing credit agreements, will be sufficient for
the Company's working capital needs and planned capital expenditures
through the remainder of 2000 and into 2001. Depending on the Company's
future growth and possible acquisitions, it may become necessary to
secure additional sources of financing.
The Company believes that the effect of inflation on the Company has not
been material in recent years, as inflation rates have remained
relatively low.
PART II -- OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
From time to time, the Company is involved in various legal proceedings
and other matters arising in the normal course of business.
ITEM 2. CHANGES IN SECURITIES.
None.
Item 3. Defaults Upon Senior Securities.
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
None.
ITEM 5. OTHER INFORMATION.
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
a. Exhibits.
EXHIBIT
NO DESCRIPTION
------- ------------------------------------------------------
10.1 Amendment to Credit Agreement, dated November 10,
2000, between Simpson Manufacturing Co., Inc. and
Union Bank of California.
11 Statements re computation of earnings per share
27 Financial Data Schedule, which is submitted
electronically to the Securities and Exchange
Commission for information only and not filed.
b. Reports on Form 8-K
No reports on Form 8-K were filed during the quarter for which this
report is filed.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Simpson Manufacturing Co., Inc.
-------------------------------
(Registrant)
DATE: NOVEMBER 10, 2000 By: /s/MICHAEL J. HERBERT
------------------ -------------------------------
Michael J. Herbert
Chief Financial Officer