PLEASANTON, Calif., Oct. 23,
2023 /PRNewswire/ --
- Net sales of $580.1 million
increased 4.8% year-over-year
- Income from operations of $140.2
million increased 14.2% year-over-year
- Diluted earnings per share of $2.43 increased 18.0% year-over-year
- Declared $0.27 per share
quarterly cash dividend
Simpson Manufacturing Co., Inc. (the "Company") (NYSE: SSD), an
industry leader in engineered structural connectors and building
solutions, today announced its financial results for the third
quarter of 2023. Refer to the "Segment and Product Group
Information" table below for additional segment information
(including information about the Company's Asia/Pacific segment and Administrative and
All Other segment).
All comparisons below (which are generally indicated by words
such as "increased," "decreased," "remained," or "compared to"),
unless otherwise noted, are comparing the quarter ended
September 30, 2023, with the quarter ended September 30,
2022.
2023 Third Quarter Financial Highlights
- Consolidated net sales of $580.1
million increased 4.8% from $553.7
million.
- North America net sales of
$456.8 million increased 4.4% from
$437.8 million, mostly due to higher
volumes partially offset by price decreases in effect earlier in
2023.
- Europe net sales of
$119.0 million increased 6.4% from
$111.9 million, primarily due to the
positive effect of approximately $7.9
million in foreign currency translation, partly offset by
lower volumes.
- Consolidated gross profit of $282.9
million increased 15.7% from $244.5
million. Gross margin increased to 48.8% from 44.2%.
- North America gross margin
increased to 51.8% from 47.5%, primarily due to lower raw material
costs, offset by higher warehouse and freight costs, as a
percentage of net sales.
- Europe gross margin increased
to 37.9% from 31.5%, primarily due to a decrease in raw material
costs as a percentage of net sales. Cost of sales in the prior year
period included a $2.9 million
inventory fair-value adjustment as a result of purchase accounting
with respect to the acquisition of FIXCO Invest S.A.S
("ETANCO").
- Consolidated income from operations of $140.2 million increased 14.2% from $122.8 million. The increase was primarily due to
increased consolidated gross profit, which was partly offset by
higher operating expenses, including increased variable
compensation and personnel costs as a result of the increase in the
number of employees supporting production, engineering and sales
activities. Operating expenses were partly offset by lower
acquisition and integration costs including lower professional
fees. Consolidated operating margin increased to 24.2% from 22.2%.
- North America income from
operations of $135.6 million
increased 6.5% from $127.3 million.
The increase was primarily due to higher gross profit, which was
partly offset by increased personnel costs from the increase in the
number of employees supporting production, engineering and sales
activities and variable compensation.
- Europe income from operations
of $15.5 million increased 151.3%
from $6.1 million, primarily due to
higher gross profit (partly due to the prior year $2.9 million raw material fair-value adjustment
as noted above) and lower acquisition and integration costs, which
were partly offset by increases in personnel costs and variable
compensation.
- Net income was $104.0 million, or
$2.43 per diluted share of the
Company's common stock, compared to net income of $88.2 million, or $2.06 per diluted share.
- Cash flow provided by operating activities increased
approximately $79.7 million from
$124.9 million to $204.6 million, mostly from increases in net
income and decreases in working capital.
- Cash flow used in investing activities increased approximately
$9.8 million from $12.0 million to $21.8
million. Capital expenditures were approximately
$22.5 million compared to
$9.7 million.
Management Commentary
"We delivered solid financial performance in a challenging
operating environment with third quarter net sales of $580.1 million increasing 4.8% over the prior
year quarter led by improved volumes in our North America segment," commented Mike Olosky, President and Chief Executive
Officer of Simpson Manufacturing Co., Inc. "We achieved
double-digit volume growth year-over-year in our commercial,
national retail and building technology markets as we have
continued to execute on our strategies, enabling us to win new
applications and customers. While Europe net sales were relatively flat
year-over-year on a local currency basis, our gross margin has
continued to improve versus historical levels and ETANCO continues
to perform well."
Mr. Olosky concluded, "While 2023 U.S. housing starts will
likely finish below 2022 levels, we continue to believe in the
sustainable strength of the housing market in the mid to long-term
given the shortage of new housing. However, based on the current
interest rate environment and the resultant impact on the housing
market, we anticipate that our fourth quarter 2023 results will
start reflecting some downward pressure, in addition to typical
seasonality, compared to the third quarter of 2023. Further, while
our operations throughout the Company were mostly down for
approximately three days in mid-October due to a cybersecurity
incident, the swift actions of our dedicated team and commitment to
our customers led us to resume shipments to clear our backlog
within just one week. Looking ahead, we continue to believe that we
have ample opportunities to pursue our growth initiatives and
enhance stockholder value over time."
Corporate Developments
- On October 19, 2023, the
Company's Board of Directors (the "Board") declared a quarterly
cash dividend of $0.27 per share,
estimated to be $11.5 million in
total. The dividend will be payable on January 25, 2024, to the Company's stockholders
of record as of January 4, 2024.
Business Outlook
The Company has updated its 2023 financial outlook based on
three quarters of financial information to reflect its latest
expectations regarding demand trends, raw material costs and
operating expenses. Based on business trends and conditions as of
today, October 23, 2023, the
Company's outlook for the full fiscal year ending December 31, 2023 is as follows:
- Operating margin is now estimated to be in the range of 22.0%
to 22.5%.
- The effective tax rate is estimated to be in the range of 25%
to 26%, including both federal and state income tax rates and
assuming no tax law changes are enacted.
- Capital expenditures are estimated to be approximately
$100.0 million depending on a number
of various external factors.
- The Company continues to make progress on its efforts to
integrate ETANCO into its operations and to realize previously
identified offensive and defensive synergies in the years ahead.
However, the Company expects these efforts will result in ongoing
integration costs through 2023 and beyond.
Conference Call Details
Investors, analysts and other interested parties are invited to
join the Company's third quarter 2023 financial results conference
call on Monday, October 23, 2023, at
5:00 pm Eastern Time (2:00 pm Pacific Time). To participate, callers
may dial (877) 407-0792 (U.S. and Canada) or (201) 689-8263 (International)
approximately 10 minutes prior to the start time. The call will be
webcast simultaneously and can be accessed through
https://viavid.webcasts.com/starthere.jsp?ei=1634882&tp_key=4c1fcebd79 or
a link on the Company's website at ir.simpsonmfg.com. For
those unable to participate during the live broadcast, a replay of
the call will also be available beginning that same day at
8:00 p.m. Eastern Time until 11:59 p.m.
Eastern Time on Monday, November 6, 2023, by dialing (844)
512–2921 (U.S. and Canada) or
(412) 317–6671 (International) and entering the conference ID:
13741278. The webcast will remain posted on the Investor Relations
section of Simpson's website at ir.simpsonmfg.com for 90 days.
A copy of this earnings release will be available prior to the
call, accessible through the Investor Relations section of the
Company's website at ir.simpsonmfg.com.
About Simpson Manufacturing Co., Inc.
Simpson Manufacturing Co., Inc., headquartered in Pleasanton, California, through its
subsidiaries, including Simpson Strong-Tie Company Inc., designs,
engineers and is a leading manufacturer of wood construction
products, including connectors, truss plates, fastening systems,
fasteners and shear walls, and concrete construction products,
including adhesives, specialty chemicals, mechanical anchors,
powder actuated tools and reinforcing fiber materials. The Company
primarily supplies its building product solutions to both the
residential and commercial markets in North America and Europe. The Company's common stock trades on
the New York Stock Exchange under the symbol "SSD."
Copies of Simpson Manufacturing's Annual Report to Stockholders
and its proxy statements and other SEC filings, including Annual
Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current
Reports on Form 8-K, are made available free of charge on the
company's web site on the same day they are filed with the SEC. To
view these filings, visit the Investor Relations section of the
Company's web site at ir.simpsonmfg.com.
Cautionary Note Regarding Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995, Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended.
Forward-looking statements generally can be identified by words
such as "anticipate," "believe," "estimate," "expect," "intend,"
"plan," "outlook," "target," "continue," "predict," "project,"
"change," "result," "future," "will," "could," "can," "may,"
"likely," "potentially," or similar expressions. Forward-looking
statements are all statements other than those of historical fact
and include, but are not limited to, statements about future
financial and operating results, our plans, objectives, business
outlook, priorities, expectations and intentions, expectations for
sales and market growth, comparable sales, earnings and
performance, stockholder value, capital expenditures, cash flows,
the housing market, the home improvement industry, demand for
services, share repurchases, our ongoing integration of
ETANCO, our strategic initiatives, including the impact of these
initiatives on our strategic and operational plans and financial
results, and any statement of an assumption underlying any of the
foregoing.
Forward-looking statements are subject to inherent
uncertainties, risks and other factors that are difficult to
predict and could cause our actual results to vary in material
respects from what we have expressed or implied by these
forward-looking statements. Important factors that could cause our
actual results and financial condition to differ materially from
those expressed in or implied by our forward-looking statements
include the effect of global pandemics such as the COVID-19
pandemic and other widespread public health crisis and their
effects on the global economy, the effects of inflation and labor
and supply shortages, on our operations, the operations of our
customers, suppliers and business partners, and our ongoing
integration of ETANCO, as well as those discussed in the "Risk
Factors" and " Management's Discussion and Analysis of Financial
Condition and Results of Operations" sections of our most recent
Annual Report on Form 10-K, subsequent Quarterly Reports on Form
10-Q and other reports we file with the SEC.
We caution that you should not place undue reliance on these
forward-looking statements, which speak only as of the date of this
press release. We undertake no obligation to publicly update any
forward-looking statement, whether as a result of new information,
future developments or otherwise, except as may be required by law.
Readers are urged to carefully review and consider the various
disclosures made in our reports filed with the SEC that advise of
the risks and factors that may affect our business, results of
operations and financial condition.
Simpson
Manufacturing Co., Inc. and Subsidiaries
UNAUDITED Consolidated Condensed Statements of Operations
(In thousands, except per share data)
|
|
|
Three Months Ended
September 30,
|
|
Nine Months
Ended
September 30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Net sales
|
$
580,084
|
|
$
553,662
|
|
$
1,712,093
|
|
$ 1,640,464
|
Cost of
sales
|
297,167
|
|
309,139
|
|
888,835
|
|
899,828
|
Gross
profit
|
282,917
|
|
244,523
|
|
823,258
|
|
740,636
|
Research and
development and engineering expense
|
24,751
|
|
17,084
|
|
67,035
|
|
49,892
|
Selling
expense
|
52,391
|
|
42,539
|
|
151,497
|
|
124,449
|
General and
administrative expense
|
64,793
|
|
60,319
|
|
197,267
|
|
172,511
|
Total operating
expenses
|
141,935
|
|
119,942
|
|
415,799
|
|
346,852
|
Acquisition and
integration related costs
|
785
|
|
1,866
|
|
4,086
|
|
14,681
|
Gain on disposal of
assets
|
(16)
|
|
(100)
|
|
(223)
|
|
(1,227)
|
Income from
operations
|
140,213
|
|
122,815
|
|
403,596
|
|
380,330
|
Interest income
(expense), net and other
|
1,292
|
|
(2,983)
|
|
18
|
|
(6,568)
|
Other & foreign
exchange loss, net
|
(1,429)
|
|
(1,707)
|
|
(1,471)
|
|
(3,814)
|
Income before
taxes
|
140,076
|
|
118,125
|
|
402,143
|
|
369,948
|
Provision for income
taxes
|
36,055
|
|
29,882
|
|
102,958
|
|
93,559
|
Net income
|
$
104,021
|
|
$
88,243
|
|
$
299,185
|
|
$
276,389
|
Earnings per common
share:
|
|
|
|
|
|
|
|
Basic
|
$
2.44
|
|
$
2.06
|
|
$
7.01
|
|
$
6.42
|
Diluted
|
$
2.43
|
|
$
2.06
|
|
$
6.98
|
|
$
6.40
|
Weighted average shares
outstanding:
|
|
|
|
|
|
|
|
Basic
|
42,673
|
|
42,813
|
|
42,651
|
|
43,044
|
Diluted
|
42,882
|
|
42,916
|
|
42,893
|
|
43,173
|
Cash dividend declared
per common share
|
$
0.27
|
|
$
0.26
|
|
$
0.80
|
|
$
0.77
|
Other data:
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
$
18,180
|
|
$
16,197
|
|
$
54,224
|
|
$
44,521
|
Pre-tax equity-based
compensation expense
|
$
6,625
|
|
$
3,546
|
|
$
17,789
|
|
$
12,986
|
Simpson
Manufacturing Co., Inc. and Subsidiaries
UNAUDITED Consolidated Condensed Balance Sheets
(In thousands)
|
|
|
|
September
30,
|
|
December
31,
|
|
|
2023
|
|
2022
|
|
2022
|
Cash and cash
equivalents
|
|
$
571,006
|
|
$
309,262
|
|
$
300,742
|
Trade accounts
receivable, net
|
|
351,164
|
|
334,449
|
|
269,124
|
Inventories
|
|
504,446
|
|
540,020
|
|
556,801
|
Other current
assets
|
|
45,052
|
|
48,416
|
|
52,583
|
Total current
assets
|
|
1,471,668
|
|
1,232,147
|
|
1,179,250
|
Property, plant and
equipment, net
|
|
382,508
|
|
341,233
|
|
361,555
|
Operating lease
right-of-use assets
|
|
66,144
|
|
48,196
|
|
57,652
|
Goodwill
|
|
483,413
|
|
467,990
|
|
495,672
|
Intangible assets,
net
|
|
356,450
|
|
330,533
|
|
362,917
|
Other noncurrent
assets
|
|
48,773
|
|
84,159
|
|
46,925
|
Total assets
|
|
$
2,808,956
|
|
$
2,504,258
|
|
$
2,503,971
|
Trade accounts
payable
|
|
$
95,267
|
|
$
98,646
|
|
$
97,841
|
Long-term debt, current
portion
|
|
22,500
|
|
22,500
|
|
22,500
|
Accrued liabilities and
other current liabilities
|
|
309,802
|
|
225,020
|
|
228,222
|
Total current
liabilities
|
|
427,569
|
|
346,166
|
|
348,563
|
Operating lease
liabilities, net of current portion
|
|
53,808
|
|
38,650
|
|
46,882
|
Long-term debt, net of
current portion and issuance costs
|
|
539,072
|
|
660,164
|
|
554,539
|
Deferred income tax and
other long-term liabilities
|
|
119,015
|
|
121,723
|
|
140,608
|
Stockholders'
equity
|
|
1,669,492
|
|
1,337,555
|
|
1,413,379
|
Total liabilities and
stockholders' equity
|
|
$
2,808,956
|
|
$
2,504,258
|
|
$
2,503,971
|
|
Simpson
Manufacturing Co., Inc. and Subsidiaries
UNAUDITED Segment and Product Group Information
(In thousands)
|
|
|
|
|
Three Months
Ended
|
|
|
|
Nine Months
Ended
|
|
|
|
|
September
30,
|
|
%
|
|
September
30,
|
|
%
|
|
2023
|
|
2022
|
|
change*
|
|
2023
|
|
2022
|
|
change*
|
Net Sales by
Reporting Segment
|
|
|
|
|
|
|
|
|
|
|
|
|
North
America
|
$
456,820
|
|
$
437,770
|
|
4.4 %
|
|
$ 1,328,617
|
|
$
1,332,911
|
|
(0.3) %
|
|
Percentage of total
net sales
|
78.8 %
|
|
79.1 %
|
|
|
|
77.6 %
|
|
81.3 %
|
|
|
|
Europe
|
119,043
|
|
111,903
|
|
6.4 %
|
|
371,074
|
|
296,592
|
|
25.1 %
|
|
Percentage of total
net sales
|
20.5 %
|
|
20.2 %
|
|
|
|
21.7 %
|
|
18.1 %
|
|
|
|
Asia/Pacific
|
4,221
|
|
3,989
|
|
5.8 %
|
|
12,402
|
|
10,961
|
|
13.1 %
|
|
|
$
580,084
|
|
$
553,662
|
|
4.8 %
|
|
$ 1,712,093
|
|
$
1,640,464
|
|
4.4 %
|
Net Sales by Product
Group**
|
|
|
|
|
|
|
|
|
|
|
|
|
Wood
Construction
|
$
495,623
|
|
$
478,554
|
|
3.6 %
|
|
$ 1,468,585
|
|
$
1,428,745
|
|
2.8 %
|
|
Percentage of total
net sales
|
85.4 %
|
|
86.4 %
|
|
|
|
85.8 %
|
|
87.1 %
|
|
|
|
Concrete
Construction
|
84,141
|
|
74,933
|
|
12.3 %
|
|
242,131
|
|
211,119
|
|
14.7 %
|
|
Percentage of total
net sales
|
14.5 %
|
|
13.5 %
|
|
|
|
14.1 %
|
|
12.9 %
|
|
|
|
Other
|
320
|
|
175
|
|
82.9 %
|
|
1,377
|
|
600
|
|
129.3
|
|
|
$
580,084
|
|
$
553,662
|
|
4.8 %
|
|
$ 1,712,093
|
|
$
1,640,464
|
|
4.4 %
|
Gross Profit (Loss)
by Reporting Segment
|
|
|
|
|
|
|
|
|
|
|
|
|
North
America
|
$
236,451
|
|
$
207,948
|
|
13.7 %
|
|
$
680,218
|
|
$
645,166
|
|
5.4 %
|
|
North America
gross margin
|
51.8 %
|
|
47.5 %
|
|
|
|
51.2 %
|
|
48.4 %
|
|
|
|
Europe
|
45,115
|
|
35,215
|
|
28.1 %
|
|
139,538
|
|
91,691
|
|
52.2 %
|
|
Europe gross
margin
|
37.9 %
|
|
31.5 %
|
|
|
|
37.6 %
|
|
30.9 %
|
|
|
|
Asia/Pacific
|
1,771
|
|
1,402
|
|
N/M
|
|
4,515
|
|
3,948
|
|
N/M
|
|
Administrative and all
other
|
(420)
|
|
(42)
|
|
N/M
|
|
(1,013)
|
|
(169)
|
|
N/M
|
|
|
$
282,917
|
|
$
244,523
|
|
15.7 %
|
|
$
823,258
|
|
$
740,636
|
|
11.2 %
|
Income (Loss) from
Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
North
America
|
$
135,633
|
|
$
127,318
|
|
6.5 %
|
|
$
393,456
|
|
$
400,336
|
|
(1.7) %
|
|
North America
operating margin
|
29.7 %
|
|
29.1 %
|
|
|
|
29.6 %
|
|
30.0 %
|
|
|
|
Europe
|
15,450
|
|
6,149
|
|
151.3 %
|
|
42,894
|
|
10,339
|
|
314.9 %
|
|
Europe operating
margin
|
13.0 %
|
|
5.5 %
|
|
|
|
11.6 %
|
|
3.5 %
|
|
|
|
Asia/Pacific
|
477
|
|
234
|
|
N/M
|
|
718
|
|
898
|
|
N/M
|
|
Administrative and all
other
|
(11,347)
|
|
(10,886)
|
|
N/M
|
|
(33,472)
|
|
(31,243)
|
|
N/M
|
|
|
$
140,213
|
|
$
122,815
|
|
14.2 %
|
|
$
403,596
|
|
$
380,330
|
|
6.1 %
|
|
|
|
*
|
Unfavorable percentage
changes are presented in parentheses, if any.
|
|
**
|
The Company manages its
business by geographic segment but presents sales by product group
as additional information.
|
|
N/M
|
Statistic is not
material or not meaningful.
|
CONTACT:
Addo Investor Relations
investor.relations@strongtie.com
(310) 829-5400
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multimedia:https://www.prnewswire.com/news-releases/simpson-manufacturing-co-inc-announces-2023-third-quarter-financial-results-301964647.html
SOURCE Simpson Manufacturing Co., Inc.