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: MARCH 31, 1998
--------------
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
---------- ----------
Commission file number: 0-23804
-------
SIMPSON MANUFACTURING CO., Inc.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
CALIFORNIA 94-3196943
------------------------------- -------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
4637 CHABOT DRIVE, SUITE 200, PLEASANTON, CA 94588
------------------------------------------------------
(Address of principal executive offices)
(Registrant's telephone number, including area code): (925)460-9912
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 March 31, 1998: 11,551,823
----------
<PAGE>
PART I -- FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
<TABLE>
<CAPTION>
SIMPSON MANUFACTURING CO., INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
March 31, December 31,
----------------------------
(Unaudited)
1998 1997 1997
------------ ------------ ------------
<S> <C> <C> <C>
ASSETS
Current assets
Cash and cash equivalents $ 16,248,992 $ 3,812,205 $ 19,418,689
Trade accounts receivable, net 34,420,498 31,334,018 24,625,568
Inventories 56,766,526 53,716,313 54,982,945
Deferred income taxes 3,559,493 3,192,455 3,536,750
Other current assets 1,654,769 1,528,651 1,723,586
------------ ------------ ------------
Total current assets 112,650,278 93,583,642 104,287,538
Net property, plant and equipment 46,391,960 35,335,825 42,925,088
Investments 548,391 507,127 559,200
Other noncurrent assets 2,955,917 3,141,989 2,993,114
------------ ------------ ------------
Total assets $162,546,546 $132,568,583 $150,764,940
============ ============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Notes Payable $ 29,147 $ 280,895 $ 29,605
Trade accounts payable 12,793,780 10,919,997 8,813,196
Accrued liabilities 4,352,965 3,525,075 5,506,903
Income taxes payable 2,293,672 3,381,161 -
Accrued profit sharing trust contributions 3,812,841 3,142,402 2,886,875
Accrued cash profit sharing and commissions 2,434,539 2,346,768 3,094,834
Accrued workers' compensation 659,272 809,272 659,272
------------ ------------ ------------
Total current liabilities 26,376,216 24,405,570 20,990,685
Deferred income taxes and
long-term liabilities 741,918 1,152,981 823,732
------------ ------------ ------------
Total liabilities 27,118,134 25,558,551 21,814,417
------------ ------------ ------------
Commitments and contingencies (Notes 5 and 6)
Shareholders' equity
Common stock 33,110,912 31,298,619 32,377,563
Retained earnings 102,509,459 75,620,180 96,848,685
Accumulated other comprehensive income (191,959) 91,233 (275,725)
------------ ------------ ------------
Total shareholders' equity 135,428,412 107,010,032 128,950,523
------------ ------------ ------------
Total liabilities and
shareholders' equity $162,546,546 $132,568,583 $150,764,940
============ ============ ============
</TABLE>
The accompanying notes are an integral part of these
condensed consolidated financial statements.
<PAGE>
<TABLE>
<CAPTION>
SIMPSON MANUFACTURING CO., INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended
March 31,
----------------------------
1998 1997
------------ ------------
<S> <C> <C>
Net sales $ 59,254,549 $ 51,927,222
Cost of sales 37,381,156 32,608,564
------------ ------------
Gross profit 21,873,393 19,318,658
------------ ------------
Operating expenses:
Selling 5,624,774 5,208,264
General and administrative 6,864,496 6,226,376
Compensation related to stock plans 57,000 -
------------ ------------
12,546,270 11,434,640
------------ ------------
Income from operations 9,327,123 7,884,018
Interest income, net 206,652 160,256
------------ ------------
Income before income taxes 9,533,775 8,044,274
Provision for income taxes 3,873,000 3,287,000
------------ ------------
Net income $ 5,660,775 $ 4,757,274
============ ============
Net income per common share
Basic $ 0.49 $ 0.42
============ ============
Diluted $ 0.47 $ 0.40
============ ============
Number of shares outstanding
Basic 11,531,115 11,454,126
============ ============
Diluted 12,044,490 11,881,875
============ ============
</TABLE>
<TABLE>
<CAPTION>
SIMPSON MANUFACTURING CO., INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
Three Months Ended
March 31,
----------------------------
1998 1997
------------ ------------
<S> <C> <C>
Net income $ 5,660,775 $ 4,757,274
Other comprehensive income, net of tax:
Foreign currency translation adjustments (83,766) 109,221
------------ ------------
Comprehensive income $ 5,577,009 $ 4,866,495
============ ============
</TABLE>
The accompanying notes are an integral part of these
condensed consolidated financial statements.
<PAGE>
<TABLE>
<CAPTION>
SIMPSON MANUFACTURING CO., INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Three Months Ended
March 31,
----------------------------
1998 1997
------------ ------------
<S> <C> <C>
Cash flows from operating activities
Net income $ 5,660,775 $ 4,757,274
------------ ------------
Adjustments to reconcile net income
to net cash provided by operating activities:
Gain on sale of capital equipment (2,000) (5,000)
Depreciation and amortization 2,250,933 1,875,006
Deferred income taxes and long-term liabilities (104,560) (273,000)
Equity in income of affiliates - (58,000)
Changes in operating assets and liabilities,
net of effects of acquisitions:
Trade accounts receivable (9,687,467) (9,086,908)
Trade accounts payable 3,980,584 (264,230)
Income taxes payable 2,683,549 3,081,975
Inventories (1,764,013) (5,397,833)
Accrued liabilities (1,153,938) (1,477,517)
Accrued profit sharing trust contributions 925,966 696,401
Accrued cash profit sharing and commissions (660,295) 54,711
Other current assets 68,817 (525,526)
Other noncurrent assets (21,199) 257,531
------------ ------------
Total adjustments (3,483,623) (11,122,390)
------------ ------------
Net cash provided by (used in)
operating activities 2,177,152 (6,365,116)
------------ ------------
Cash flows from investing activities
Capital expenditures (5,692,243) (4,758,625)
Proceeds from sale of equipment 2,380 5,000
Proceeds from sale of short-term investments - 3,995,333
Acquisitions, net of cash and equity
interest already owned - (9,183,110)
------------ ------------
Net cash used in investing activities (5,689,863) (9,941,402)
------------ ------------
Cash flows from financing activities
Issuance of Company's common stock 343,472 22,531
Issuance (repayment) of debt (458) 280,895
------------ ------------
Net cash provided by financing activities 343,014 303,426
------------ ------------
Net decrease in cash and cash equivalents (3,169,697) (16,003,092)
Cash and cash equivalents at beginning of period 19,418,689 19,815,297
------------ ------------
Cash and cash equivalents at end of period $ 16,248,992 $ 3,812,205
============ ============
</TABLE>
The accompanying notes are an integral part of these
condensed consolidated financial statements.
<PAGE>
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") 1997 Annual Report on Form 10-K
(the "1997 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:
<TABLE>
<CAPTION>
Three Months Ended March 31, 1998 Three Months Ended March 31, 1997
Per Per
Income Shares Share Income Shares Share
------------ ------------ --------- ------------ ------------ ---------
<S> <C> <C> <C> <C> <C> <C>
BASIC EPS
Income available to
common shareholders $ 5,660,775 11,531,115 $ 0.49 $ 4,757,274 11,454,126 $ 0.42
EFFECT OF DILUTIVE SECURITIES
Stock options - 513,375 (0.02) - 427,749 (0.02)
------------ ------------ --------- ------------ ------------ ---------
DILUTED EPS
Income available to
common shareholders $ 5,660,775 12,044,490 $ 0.47 $ 4,757,274 11,881,875 $ 0.40
============ ============ ========= ============ ============ =========
</TABLE>
Newly Issued Accounting Standards
In June 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards ("SFAS") No. 131, "Disclosures About
Segments of an Enterprise and Related Information." SFAS No. 131 specifies
revised guidelines for determining an entity's operating segments and the
type and level of financial information to be disclosed. SFAS No. 131 is
effective for annual financial statements issued for periods beginning
after December 15, 1997, and accordingly, management has not determined the
effect, if any, on the Company's financial statements for the three months
ended March 31, 1998.
<PAGE>
As of January 1, 1998, the Company adopted SFAS No. 130, "Reporting
Comprehensive Income" and has presented Condensed Consolidated Statements
of Comprehensive Income for the three month periods ended March 31, 1998
and 1997. The accompanying balance sheets include accumulated other
comprehensive income amounts which consist entirely of foreign currency
translation adjustments.
2. Trade Accounts Receivable
Trade accounts receivable consist of the following:
<TABLE>
<CAPTION>
At March 31, At
---------------------------- December 31,
1998 1997 1997
------------ ------------ ------------
<S> <C> <C> <C>
Trade accounts receivable $ 35,927,002 $ 33,020,437 $ 26,398,046
Allowance for doubtful accounts (1,202,182) (1,386,684) (1,539,691)
Allowance for sales discounts (304,322) (299,735) (232,787)
------------ ------------ ------------
$ 34,420,498 $ 31,334,018 $ 24,625,568
============ ============ ============
</TABLE>
3. Inventories
The components of inventories consist of the following:
<TABLE>
<CAPTION>
At March 31, At
---------------------------- December 31,
1998 1997 1997
------------ ------------ ------------
<S> <C> <C> <C>
Raw materials $ 18,619,797 $ 17,577,343 $ 17,882,930
In-process products 6,091,933 4,431,115 5,384,709
Finished products 32,054,796 31,707,855 31,715,306
------------ ------------ ------------
$ 56,766,526 $ 53,716,313 $ 54,982,945
============ ============ ============
</TABLE>
Approximately 91% 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 March 31, 1998 and 1997, and December
31, 1997, the replacement value of LIFO inventories exceeded LIFO cost by
approximately $777,000, $1,186,000 and $852,000, respectively.
<PAGE>
4. Net Property, Plant and Equipment
Net property, plant and equipment consists of the following:
<TABLE>
<CAPTION>
At March 31, At
---------------------------- December 31,
1998 1997 1997
------------ ------------ ------------
<S> <C> <C> <C>
Land $ 3,366,519 $ 2,440,682 $ 3,366,519
Buildings and site improvements 17,141,278 12,584,599 17,165,509
Leasehold improvements 3,334,358 2,953,492 3,474,278
Machinery and equipment 56,169,362 49,633,900 55,400,034
------------ ------------ ------------
80,011,517 67,612,673 79,406,340
Less accumulated depreciation
and amortization (44,210,391) (37,646,354) (41,986,005)
------------ ------------ ------------
35,801,126 29,966,319 37,420,335
Capital projects in progress 10,590,834 5,369,506 5,504,753
------------ ------------ ------------
$ 46,391,960 $ 35,335,825 $ 42,925,088
============ ============ ============
</TABLE>
5. Debt
Outstanding debt at March 31, 1998 and 1997, and the available credit at
March 31, 1998, consisted of the following:
<TABLE>
<CAPTION>
Available Debt Outstanding
Credit at at March 31,
March 31, ----------------------------
1998 1998 1997
------------ ------------ ------------
<S> <C> <C> <C>
Revolving line of credit,
interest at bank's reference
rate (at March 31, 1998, the
bank's reference rate was 8.50%),
expires June 1998 $ 12,750,066 $ - $ -
Revolving line of credit, interest
at bank's prime rate (at March 31,
1998, the bank's prime rate was
8.50%), expires June 1998 4,937,129 - -
Revolving term commitment, interest
at bank's prime rate (at March 31,
1998, the bank's prime rate was
8.50%), expires June 1998 4,000,000 - -
Revolving line of credit, interest
rate at the bank's base rate of
interest plus 2%, expires June 1998 411,100 - -
Standby letter of credit facilities 1,312,806 - -
Other notes payable - 29,147 280,895
------------ ------------ ------------
Total credit facilities $ 23,411,101 $ 29,147 $ 280,895
============ ============
Standby letters of credit issued
and outstanding (1,312,806)
------------
Total credit available $ 22,098,295
============
</TABLE>
The Company has three outstanding standby letters of credit. Two of these
letters of credit, in the aggregate amount of $525,744, are used to support
the Company's self-insured workers' compensation insurance requirements.
The third, in the amount of $787,062, is used to guarantee performance on
the Company's leased facility in the UK. Other notes payable represent debt
associated with foreign businesses acquired in March 1997.
<PAGE>
6. Commitments and Contingencies
Note 9 to the consolidated financial statements in the Company's 1997
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.
<PAGE>
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 months
ended March 31, 1998 and 1997. 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 March 31, 1998,
Compared with the Three Months Ended March 31, 1997
Sales increased 14.1% in the first quarter of 1998 as compared to the first
quarter of 1997. The increase reflected sales growth throughout the United
States, particularly in the Southeastern region of the country.
International sales increased at a substantial rate, a significant portion
of which was related to the businesses purchased in March 1997. Simpson
Strong-Tie's first quarter sales increased 16.3% over the same quarter last
year, while Simpson Dura-Vent's sales increased 6.0%. Homecenters were the
fastest growing connector sales channel. The growth rate of Simpson Strong-
Tie's engineered wood product sales remained strong and the Company's
Anchoring Systems products also contributed significantly to the increase
in sales, primarily as a result of the 1997 purchase of the Isometric
Group. Direct-Vent products led Simpson Dura-Vent's sales with an above
average growth rate.
Income from operations increased 18.3% from $7.9 million in the first
quarter of 1997 to $9.3 million in the first quarter of 1998, primarily due
to higher sales. Gross margins decreased slightly from 37.2% in the first
quarter of 1997 to 36.9% in the first quarter of 1998. Selling, general and
administrative expenses increased in the first quarter of 1998, but were
lower as a percentage of sales. Selling expenses increased 8.0% from $5.2
million in the first quarter of 1997 to $5.6 million in the first quarter
of 1998. The increase was primarily due to higher personnel costs related
to the increase in the number of salespeople, including those in the
acquired businesses, offset somewhat by lower expenses related to
advertising and promotions. General and administrative expenses increased
10.2% from $6.2 million in the first quarter of 1997 to $6.9 million in the
first quarter of 1998. The increase was primarily due to higher
administrative overhead and personnel costs, including those associated
with last year's acquisitions. The effective tax rate was 40.6% in the
first quarter of 1998, a slight decrease from the first quarter of 1997.
Liquidity and Sources of Capital
As of March 31, 1998, working capital was $86.3 million as compared to
$69.2 million at March 31, 1997, and $83.3 million at December 31, 1997.
The principal components of the increase in working capital from December
31, 1997, were increases in the Company's trade accounts receivable and
inventory balances totaling approximately $11.6 million, primarily due to
higher sales levels and seasonal buying programs, and a decrease in accrued
liabilities of approximately $1.2 million as a result of the payment of
sales incentives. Partially offsetting these increases was a decrease in
cash and cash equivalents of nearly $3.2 million. Cash and cash equivalent
balances were higher as compared to March 31, 1997. This increase was
primarily due to lower cash balances after the purchases of the Isometric
Group and Patrick Bellion, S.A. in March 1997. Further offsetting the
increase in trade accounts receivable and inventory were increases in trade
accounts payable and income taxes payable of approximately $4.0 million and
$2.3 million, respectively. The balance of the change in working capital
was due to the fluctuation of various other asset and liability accounts.
The working capital change combined with net income and noncash expenses,
such as depreciation and amortization, totaling approximately $7.9 million,
resulted in net cash provided by operating activities of approximately $2.2
million. As of March 31, 1998, the Company had unused credit facilities
available of approximately $22.1 million.
<PAGE>
The Company used nearly $5.7 million in its investing activities, primarily
to purchase the capital equipment needed to expand its capacity. The
Company plans to continue this expansion throughout the remainder of the
year and into 1999.
The Company believes that cash generated by operations and borrowings
available under its existing credit agreements, that are expected to be
renewed with similar terms, will be sufficient for the Company's working
capital needs and planned capital expenditures through the remainder of
1998. Depending on the Company's future growth, it may become necessary to
secure additional sources of financing.
<PAGE>
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.
<TABLE>
<CAPTION>
a. Exhibits.
EXHIBIT
NO DESCRIPTION
------- ------------------------------------------------------
<S> <C>
10.1 Amendment to Loan Agreement dated January 14, 1997,
dated January 21, 1998, between Simpson Manufacturing
Co., Inc. and Union Bank of California, N.A.
10.2 Amendment to Loan Agreement dated January 14, 1997,
dated April 10, 1998, between Simpson Manufacturing
Co., Inc. and Union Bank of California, N.A.
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.
</TABLE>
b. Reports on Form 8-K
No reports on Form 8-K were filed during the quarter for which
this report is filed.
<PAGE>
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: MAY 14, 1998 By: /s/Stephen B. Lamson
------------ -------------------------------
Stephen B. Lamson
Chief Financial Officer
EXHIBIT 10.1
------------
January 21, 1998
Mr. Steve Lamson, CFO
Simpson Manufacturing Co., Inc.
4637 Chabot Drive, Ste 200
Pleasanton, CA 94588
Dear Steve:
In reference to the Agreement between Union Bank of California, N.A.
("Bank") and Simpson Manufacturing Co., Inc. ("Borrower") dated January
14, 1997, the Bank and Borrower desire to amend the Agreement. This
amendment shall be called the First Amendment to the Agreement. Initially
capitalized terms used herein which are not otherwise defined shall have
the meaning assigned thereto in the Agreement.
Amendment to the Agreement:
(a) "Section 1.1.2 Standby L/C Sublimit. The date on line ten,
June 1, 1998 is deleted and the date June 1, 1999 is substituted
therefore."
This Loan Amendment shall become effective when the Bank shall have
received the acknowledgment copy of this Loan Amendment executed by the
Borrower and the following executed documents, all of which the Bank must
receive before February 9, 1998.
Except as specifically amended hereby, the Agreement shall remain in full
force and effect and is hereby ratified and confirmed. This Loan Amendment
shall not be a waiver of any existing default or breach of a condition to
covenant unless specified herein.
Very truly yours.
UNION BANK OF CALIFORNIA, N.A.
/s/Joellen Ademski /s/Lebbeus S. Case, Jr.
- ------------------------------- -------------------------------
Joellen Ademski, Vice President Lebbeus S. Case, Jr. VP
Agreed and Accepted to this 21 day of January, 1998.
Simpson Manufacturing Co., Inc.
/s/Thomas Fitzmyers /s/Steve Lamson
- ------------------------------- -------------------------------
Thomas Fitzmyers, President Steve Lamson, Chief Financial
Officer
EXHIBIT 10.2
------------
UNION BANK OF CALIFORNIA, N.A.
SOUTHERN CALIFORNIA INTERNATIONAL OPERATIONS CENTER
STANDY LETTERS OF CREDIT, V01-519
1980 SATURN STREET
MONTEREY PARK, CA 91755-7417
April 10, 1998
********************* OUR REFERNCE NO. : 315S701259
* LETTER OF CREDIT * AMENDMENT SEQ. NO. : 010
* AMENDMENT * ORIGINAL ISSUE DATE: MAY 19, 1993
*********************
TO BENEFICIARY:
STATE OF CALIFORNIA, DEPT. OF
INDUSTRIAL RELEATIONS-SELF INSURANCE PLANS
2265 WATT AVE., STE. 1
SACREMENTO, CA 95825
ATTN: MARK ASHCRAFT, MANAGER
APPLICANT:
SIMPSON HOLDINGS, INC.
4637 CHABOT DR., STE. 200
PLEASANTON, CA 94588-0789
ATTN: STEVE LAMSON
WE HAVE AMENDED THE ABOVE REFERENCED IRREVOCABLE LETTER OF CREDIT AS
FOLLOWS:
INCREASE THIS LETTER OF CREDIT BY THE AMOUNT OF USD71,126.00 TO AN
AMENDED TOTAL BALANCE OF USD333,998.5.
THIS AMENDMENT IS TO BE CONSIDERED AS PART OF THE ABOVE LETTER OF CREDIT
AND ATTACHED HERETO.
THIS AMENDMENT IS SUBJECT TO THE UNIFORM CUSTOMS AND PRACTICE FOR
DOCUMENTARY CREDITS (1993 REVISION) INTERNATIONAL CHAMBER OF COMMERCE,
PUBLICATION NUMBER 500 (UCP 500).
ALL OTHER TERMS AND CONDITIONS OF THE CREDIT REMAIN UNCHANGED.
FOR INQUIRIES, CALL US AT 1-800-858-9120, EXT. 7953. PLEASE ALWAYS QUOTE
OUR ADVICE AND AMENDMENT NUMBERS.
UNION BANK OF CALIFORNIA, N.A.
INTERNATIONAL OPERATIONS CENTER
/s/signature not legible
- -----------------------------------
AUTHORIZED SIGNATURE
<TABLE>
<CAPTION>
SIMPSON MANUFACTURING CO., INC. AND SUBSIDIARIES
COMPUTATION OF EARNINGS PER COMMON SHARE
(UNAUDITED)
EXHIBIT 11
--------------
BASIC EARNINGS PER SHARE
Three Months Ended
March 31,
----------------------------
1998 1997
------------ ------------
<S> <C> <C>
Weighted average number of common
shares outstanding 11,531,115 11,454,126
============ ============
Net income $ 5,660,775 $ 4,757,274
============ ============
Basic net income per share $ 0.49 $ 0.42
============ ============
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SIMPSON MANUFACTURING CO., INC. AND SUBSIDIARIES
COMPUTATION OF EARNINGS PER COMMON SHARE
(UNAUDITED)
EXHIBIT 11
--------------
DILUTED EARNINGS PER SHARE
Three Months Ended
March 31,
----------------------------
1998 1997
------------ ------------
<S> <C> <C>
Weighted average number of common
shares outstanding 11,531,115 11,454,126
Shares issuable pursuant to employee
stock option plans, less shares
assumed repurchased at the average
fair value during the period 508,522 422,998
Shares issuable pursuant to the
independent director stock option
plan, less shares assumed repurchased
at the average fair value during
the period 4,853 4,751
------------ ------------
Number of shares for computation of
diluted net income per share 12,044,490 11,881,875
============ ============
Net income $ 5,660,775 $ 4,757,274
============ ============
Diluted net income per share $ 0.47 $ 0.40
============ ============
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Condensed Consolidated Balance Sheet at March 31, 1998, (Unaudited)
and the Condensed Consolidated Statement of Operations for the three
months ended March 31, 1998, (Unaudited) and is qualified in its
entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-31-1998
<CASH> 16,248,992
<SECURITIES> 0
<RECEIVABLES> 35,927,002
<ALLOWANCES> 1,506,504
<INVENTORY> 56,766,526
<CURRENT-ASSETS> 112,650,278
<PP&E> 90,602,351
<DEPRECIATION> 44,210,391
<TOTAL-ASSETS> 162,546,546
<CURRENT-LIABILITIES> 26,376,216
<BONDS> 0
0
0
<COMMON> 33,110,912
<OTHER-SE> 102,317,500
<TOTAL-LIABILITY-AND-EQUITY> 162,546,546
<SALES> 59,254,549
<TOTAL-REVENUES> 59,254,549
<CGS> 37,381,156
<TOTAL-COSTS> 37,381,156
<OTHER-EXPENSES> 12,546,270
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0<F1>
<INCOME-PRETAX> 9,533,775
<INCOME-TAX> 3,873,000
<INCOME-CONTINUING> 5,660,775
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 5,660,775
<EPS-PRIMARY> 0.49
<EPS-DILUTED> 0.47
<FN>
<F1>Interest income for the three months ended March 31, 1998,
was $206,652.
</FN>
</TABLE>
