PLEASANTON, Calif., July 29 /EMWNews/ -- Simpson

Manufacturing Co., Inc. (the "Company") (NYSE: SSD) announced today that

its second quarter 2008 net sales decreased 5.2% to $219.3 million as

compared to net sales of $231.3 million for the second quarter of 2007. Net

income decreased 28.0% to $20.4 million for the second quarter of 2008 as

compared to net income of $28.3 million for the second quarter of 2007.

Diluted net income per common share was $0.42 for the second quarter of

2008 as compared to $0.58 for the second quarter of 2007. In the first half

of 2008, net sales decreased 8.8% to $386.9 million as compared to net

sales of $424.4 million for the first half of 2007. Net income decreased

37.0% to $28.7 million for the first half of 2008 as compared to net income

of $45.6 million for the first half of 2007. Diluted net income per common

share was $0.59 for the first half of 2008 as compared to $0.93 for the

first half of 2007.



    In the second quarter of 2008, sales declined throughout the United

States, with the exception of the northeastern and midwestern regions of

the country. California and the western states had the largest decrease in

sales. Sales during the quarter in Canada and in continental Europe

increased significantly, while sales were down in the United Kingdom.

Simpson Strong-Tie's second quarter sales decreased 4.9% from the same

quarter last year, while Simpson Dura-Vent's sales decreased 10.2%. Simpson

Strong-Tie's sales to contractor distributors had the largest percentage

rate decrease and sales to dealer distributors and home centers also

decreased. Sales decreased across all of Simpson Strong-Tie's major product

lines, particularly those used in new home construction. Sales of the Swan

Secure product line, acquired in July 2007, accounted for approximately

4.5% of Simpson Strong-Tie's second quarter sales. Sales of Simpson

Dura-Vent's pellet vent and chimney products increased while sales of its

gas vent and Direct-Vent product lines decreased as a result of several

factors, including the decline in new home construction.



    Income from operations decreased 25.8% from $43.6 million in the second

quarter of 2007 to $32.4 million in the second quarter of 2008. Gross

margins decreased from 40.4% in the second quarter of 2007 to 38.2% in the

second quarter of 2008. The decrease in gross margins was primarily due to

higher manufacturing and distribution costs and a higher proportion of

fixed overhead costs to total costs, resulting primarily from the lower

sales volume. The steel market continues to be dynamic with a high degree

of uncertainty. Since December 31, 2007, the Company's total inventories

have increased 6.5%. In the second half of 2008, the Company is

anticipating further increases in steel prices. If steel prices continue to

increase and the Company is not able to increase its prices sufficiently,

the Company's margins could further deteriorate.



    Selling expenses increased 10.4% from $20.1 million in the second

quarter of 2007 to $22.1 million in the second quarter of 2008. The

increase was driven primarily by a $3.5 million increase in expenses

associated with sales and marketing personnel, including those at

businesses acquired since July 2007. This increase was offset by decreases

in donations of $0.7 million, primarily related to the gift made in the

second quarter of 2007 to Habitat for Humanity International, Inc.,

professional services expenses of $0.3 million and promotional expenses of

$0.2 million. General and administrative expenses decreased 2.0% from $24.2

million in the second quarter of 2007 to $23.8 million in the second

quarter of 2008. The decrease mainly comprised a $5.2 million decrease in

cash profit sharing, the result of both lower operating profit and a shift

begun in the second quarter of 2008 of some of the compensation of U.S.

based salaried employees from cash profit sharing to salary. This decrease

was mostly offset by increases in personnel expenses of $3.0 million,

including the shift in compensation as well as the expenses associated with

personnel at businesses acquired since July 2007, legal and professional

service expenses of $1.3 million and higher amortization expense of $0.5

million, primarily related to intangible assets acquired from Swan Secure

Products, Inc. in July 2007. The effective tax rate was 38.0% in the second

quarter of 2008, up from 37.2% in the second quarter of 2007. The increase

in the effective tax rate was caused by many factors, including a decrease

in tax-exempt interest income and the expiration of the federal research

and development tax credit in 2008.



    In the first half of 2008, sales declined throughout the United States,

with the exception of the northeastern region of the country. California

and the western states had the largest decrease in sales. Sales during the

period in Canada and in continental Europe increased significantly, while

sales were down in the United Kingdom. Simpson Strong-Tie's first half

sales decreased 9.0% from the first half of last year, while Simpson

Dura-Vent's sales decreased 6.0%. Simpson Strong-Tie's sales to contractor

distributors had the largest percentage rate decrease and sales to dealer

distributors and home centers also decreased. Sales decreased across all of

Simpson Strong-Tie's major product lines, particularly those used in new

home construction. Sales of the Swan Secure product line, acquired in July

2007, accounted for approximately 4.8% of Simpson Strong-Tie's first half

sales. Sales of Simpson Dura-Vent's pellet vent and chimney products

increased while sales of its gas vent and Direct-Vent product lines

decreased.



    Income from operations decreased 34.7% from $70.2 million in the first

half of 2007 to $45.8 million in the first half of 2008. Gross margins

decreased from 38.9% in the first half of 2007 to 36.2% in the first half

of 2008. The decrease in gross margins was due primarily to higher

manufacturing and distribution costs and a higher proportion of fixed

overhead costs to total costs, resulting primarily from the lower sales

volume.



    Selling expenses increased 9.8% from $38.2 million in the first half of

2007 to $41.9 million in the first half of 2008. The increase was driven

primarily by a $5.1 million increase in expenses associated with sales and

marketing personnel, including those at businesses acquired since July

2007. This increase was partly offset by decreases in donations of $0.5

million and promotional expenses of $0.3 million. General and

administrative expenses decreased 9.2% from $45.9 million in the first half

of 2007 to $41.6 million in the first half of 2008. The major components of

the decrease were decreases in cash profit sharing of $9.1 million,

resulting primarily from decreased operating profit, and adjustments to the

bad debt reserves of $0.9 million. These decreases were partly offset by

increases in personnel expenses of $4.1 million, including those at

businesses acquired since July 2007, higher amortization expense of $1.1

million and increased legal and professional service expenses of $0.6

million. The effective tax rate was 39.5% in the first half of 2008, up

from 37.5% in the first half of 2007. The increase in the effective tax

rate resulted from many of the same factors that affected the effective tax

rate in the second quarter.



    In June 2008, the Company's subsidiary, Simpson Dura-Vent Company,

Inc., purchased 100% of the equity of ProTech Systems, Inc. ("ProTech").

ProTech manufactures venting products in New York and distributes them

throughout North America. The purchase price (subject to post-closing

adjustment) was $7.5 million in cash, plus an additional earn-out of up to

$2.25 million if certain future performance targets are met. In July 2008,

Simpson Dura-Vent also purchased certain assets to produce the Ventinox

stainless steel chimney liner product line from American BOA Inc. ProTech

had been the distributor of Ventinox products. In July 2008, Simpson

Strong-Tie purchased 100% of the equity of Ahorn-Gerate & Werkzeuge

Vertriebs GmbH ("Ahorn"), a German company, and its subsidiaries in the

Czech Republic and China. The acquisition will broaden Simpson Strong-Tie's

collated fastener product line and add production capacity in both Europe

and China. The purchase price (subject to post-closing adjustment) was $8.5

million in cash.



    Investors, analysts and other interested parties are invited to join

the Company's conference call on Wednesday, July 30, 2008, at 6:00 am

Pacific Time. To participate, callers may dial 800-862-9098. The call will

be webcast simultaneously as well as being available for one month through

a link on the Company's website at http://www.simpsonmfg.com.



    This document contains forward-looking statements, based on numerous

assumptions and subject to risks and uncertainties. Although the Company

believes that the forward-looking statements are reasonable, it does not

and cannot give any assurance that its beliefs and expectations will prove

to be correct. Many factors could significantly affect the Company's

operations and cause the Company's actual results to differ substantially

from the Company's expectations. Those factors include, but are not limited

to: (i) general economic and construction business conditions; (ii)

customer acceptance of the Company's products; (iii) relationships with key

customers; (iv) materials and manufacturing costs; (v) the financial

condition of customers, competitors and suppliers; (vi) technological

developments; (vii) increased competition; (viii) changes in capital market

conditions; (ix) governmental and business conditions in countries where

the Company's products are manufactured and sold; (x) changes in trade

regulations; (xi) the effect of acquisition activity; (xii) changes in the

Company's plans, strategies, objectives, expectations or intentions; and

(xiii) other risks and uncertainties indicated from time to time in the

Company's filings with the U.S. Securities and Exchange Commission. Actual

results might differ materially from results suggested by any

forward-looking statements in this report. The Company does not have an

obligation to publicly update any forward-looking statements, whether as a

result of the receipt of new information, the occurrence of future events

or otherwise.



    The Company's results of operations for the three and six months ended

June 30, 2008 and 2007 (unaudited), are as follows:






                                   Three Months              Six Months

    (Amounts in thousands,        Ended June 30,            Ended June 30,

     except per share data)     2008         2007         2008         2007

    Net sales                 $219,263     $231,288     $386,919     $424,442

    Cost of sales              135,398      137,925      246,796      259,457

      Gross profit              83,865       93,363      140,123      164,985



    Research and development

     and engineering expenses    5,610        5,463       10,713       10,723

    Selling expenses            22,134       20,053       41,942       38,207

    General and administrative

     expenses                   23,767       24,246       41,641       45,883



      Income from operations    32,354       43,601       45,827       70,172



    Income (loss) in equity

     method investment,

     before tax                     --           59           -

-           26

    Interest income, net           505        1,424        1,634        2,797

      Income before taxes       32,859       45,084       47,461       72,995



    Provision for income taxes  12,478       16,767       18,728       27,387

      Net income               $20,381      $28,317      $28,733      $45,608



    Net income per share:

      Basic                      $0.42        $0.58        $0.59        $0.94

      Diluted                     0.42         0.58         0.59         0.93



    Cash dividend declared per

     common share

               $0.10        $0.10        $0.20        $0.20



    Weighted average shares

     outstanding:

      Basic                     48,593       48,432       48,584       48,424

      Diluted                   48,936       48,902       48,933       48,894



    Other data:

      Depreciation and

       amortization             $7,587       $7,756      $15,007      $14,833

      Pre-tax stock

       compensation expense        920        1,486        1,856        3,164





    The Company's financial position as of June 30, 2008 and 2007, and

December 31, 2007 (unaudited), is as follows:






                                               June 30,           December 31,

     (Amounts in thousands)              2008            2007         2007



    Cash and short-term investments    $162,098        $177,166      $186,142

    Trade accounts receivable, net      139,162         145,388        88,340

    Inventories                         232,575         210,253       218,342

    Assets held for sale                  7,887           9,671         9,677

    Other current assets                 17,597          18,822        20,376

      Total current assets              559,319         561,300       522,877



    Property, plant and equipment, net  199,055         199,249       198,117

    Goodwill                             69,500          45,917        57,418

    Other noncurrent assets              42,209          22,392        39,267

      Total assets                     $870,083        $828,858      $817,679



    Trade accounts payable              $46,362         $47,791       $27,226

    Line of credit and current

     portion of long-term debt            3,177           5,942         1,029

    Other current liabilities            61,111          69,286        56,084

      Total current liabilities         110,650         123,019        84,339



    Long-term debt                           --              --            --

    Other long-term liabilities          12,076           9,483         9,940

    Stockholders' equity                747,357         696,356       723,400

      Total liabilities and

       stockholders' equity            $870,083        $828,858      $817,679





    Simpson Manufacturing Co., Inc., headquartered in Pleasanton,

California, through its subsidiary, Simpson Strong-Tie Company Inc.,

designs, engineers and is a leading manufacturer of wood-to-wood,

wood-to-concrete and wood-to-masonry connectors and fastening systems,

stainless steel fasteners and pre-fabricated shearwalls. Simpson Strong-Tie

also offers a full line of adhesives, mechanical anchors and powder

actuated tools for concrete, masonry and steel. The Company's other

subsidiary, Simpson Dura-Vent Company, Inc., designs, engineers and

manufactures venting systems for gas and wood burning appliances. The

Company's common stock trades on the New York Stock Exchange under the

symbol "SSD."



    For further information, contact Barclay Simpson at (925) 560-9032.