PLEASANTON, CA - Simpson Manufacturing Co. reported second quarter net sales increased 4.2% to $216.7 million from $201.9 million in the second quarter of 2014. Net income rose to $21.5 million in the 2015's second quarter compared to $20.5 million last year. The parent company of Simpson Strong-Tie Co. said diluted net income per common share was $0.43 for the quarter in 2015 vs. $0.42 for the second quarter of 2014.
Sales Up in North America, Down in Europe
North American net sales for the wood construction products manufacturer increased 8.8% in the second quarter of 2015 to just over $183 million, due to an increase in housing starts and construction activity in the region. The company says about 55% to 65% of its total wood products business is related to housing starts.
Net sales would have been even higher as the company said the weak Canadian dollar contributed a drag of approximately $1.5 million on Canadian net sales. Net Sales decreased in Europe 12.6% for the period, mostly due to the effects of foreign currency translations, according to the company. In local currencies, Europe's overall net sales increased in the second quarter of 2015 compared to the second quarter of 2014.
Overall, gross profits rose slightly to $98.3 million in the second quarter of 2015 from $95.9 million in the second quarter of 2014. Gross profits in North America, however decreased slightly to 47.3% from 47.9% in last year's second quarter, primarily as a result of increases in material, labor and warehousing costs. Meanwhile in Europe, gross profit margin decreased to 39.1% in the second quarter from 40.5% last year, due to increases in material costs and labor.
The gross profit margin differential between wood construction products and concrete construction products, which have lower gross profit margins, was 15% and 13% in the second quarters of 2015 and 2014, respectively.
The company declared a quarterly dividend of $0.16 per share and continues its stock buyback program. The company bought back 250,000 shares in June for a total investment of $8.5 million.
Truss Software in Beta
Simpson has released its Truss software to a select group of customers in a sort of beta testing. A general released of the software is scheduled for the 4th quarter. The software links customers with Simpson and is intended to help customers create truss and panel designs and optimize them for production efficiency.
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