PLEASANTON, Calif., July 24,
2023 /PRNewswire/ --
- Net sales of $597.6 million
increased 0.7% year-over-year
- Income from operations of $145.0
million increased 9.0% year-over-year
- Diluted earnings per share of $2.50 increased 15.7% year-over-year
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 second
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
June 30, 2023, with the quarter ended
June 30, 2022.
2023 Second Quarter Financial Highlights
- Consolidated net sales of $597.6
million increased 0.7% from $593.2
million.
-
- North America net sales of
$465.5 million increased 2.0% from
$456.4 million, mostly due to higher
volumes.
- Europe net sales of
$127.8 million decreased 4.1% from
$133.2 million, primarily due to
lower volumes.
- Consolidated gross profit of $287.5
million increased 10.8% from $259.3
million. Gross margin increased to 48.1% from 43.7%.
-
- North America gross margin
increased to 51.2% from 48.0%, primarily from lower raw material
costs, offset by higher factory and tooling costs as a percentage
of net sales.
- Europe gross margin increased
to 37.4% from 29.3%, 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 $9.2 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 $145.0 million increased 9.0% from $133.1 million. The increase was primarily due to
increased gross profit, which was partly offset by higher operating
expenses, including increased personnel costs from the increase in
the number of employees supporting production, engineering and
sales activities as well as increased variable compensation.
Operating expenses were partly offset by lower acquisition and
integration costs. Consolidated operating margin increased to 24.3%
from 22.4%.
-
- North America income from
operations of $143.4 million
increased $6.1 million from
$137.3 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 $14.0 million increased
$8.4 million from $5.6 million, primarily due to higher gross
profit (mostly due to the prior year $9.2
million raw material fair-value adjustment as noted above)
and lower acquisition and integration costs, which were partly
offset by increases in variable compensation.
- Net income was $107.2 million, or
$2.50 per diluted share of the
Company's common stock, compared to net income of $93.6 million, or $2.16 per diluted share.
- Cash flow provided by operating activities increased
approximately $100.0 million from
$93.8 million to $194.0 million, mostly from decreases in working
capital.
- Cash flow used in investing activities decreased from prior
year mostly due to last year's $805.9
million acquisition of ETANCO, while capital
expenditures increased to approximately $21.0 million compared to $17.9 million.
Management Commentary
"We delivered solid performance in a difficult operating
environment with our second quarter net sales of $597.6 million increasing 0.7% year-over-year led
by improved volumes in our North
America segment, most notably in the building technology and
national retail end use markets," commented Mike Olosky, President and Chief Executive
Officer of Simpson Manufacturing Co., Inc. "While 2023 housing
starts will finish below 2022 levels, the market continues to
improve relative to our earlier outlook, in part due to the high
share of new single-family homes as a percentage of all
single-family sales. We continue to believe in the sustainable
strength of the housing market in the mid to long-term given the
shortage of new housing. We are confident key attributes of our
business model will help stem some of the short-term downward
pressure including our diverse portfolio of solutions,
long-standing relationships, perpetual innovation, immersive
service, unparalleled availability and delivery, and impactful
industry outreach efforts. Europe
net sales were down 4.1% year-over-year on lower volumes; however,
ETANCO continued to perform well in a challenging market by
maintaining consistent sales year-over-year."
Mr. Olosky continued, "We remain focused on our Company
ambitions which prioritize above-market profitable growth while
strengthening our Company values. Our focus on being the partner of
choice and on innovation has helped us make meaningful progress
during the quarter on our growth initiatives as we seek to extend
our mission to help people design and build safer, stronger
structures into new end uses. To further promote organic growth, we
are making investments to strengthen our business model and expand
our operations. To that end, we have identified a greenfield
opportunity to replace our facility in Gallatin, Tennessee to expand our
manufacturing capacity and supply chain efficiencies to enhance our
customer service."
Business Outlook
The Company has updated its 2023 financial outlook based on two
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, July 24, 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 20.5%
to 21.5%.
- 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 in the range of
$105.0 million to $115.0 million.
- 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, these efforts will continue to result in additional costs
in 2023 that have been planned since the Company announced the
transaction. Management continues to believe the Company remains
well positioned to capture meaningful benefits from these
synergies, subject to macroeconomic changes, which are expected to
delay realization of some of the offensive synergy
opportunities.
Conference Call Details
Investors, analysts and other interested parties are invited to
join the Company's second quarter 2023 financial results conference
call on Monday, July 24, 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=1622422&tp_key=706cd44e54 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, August 7, 2023 by dialing (844) 512–2921 (U.S. and
Canada) or (412) 317–6671
(International) and entering the conference ID: 13739615. 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 high quality wood and
concrete construction products designed to make structures safer
and more secure. Our products are designed to perform at high
levels and be easy to use and cost-effective for customers. Our
wood construction products are used in light-frame construction and
include connectors, truss plates, fastening systems, fasteners and
pre-fabricated lateral resistive systems. Our concrete construction
products are used in concrete, masonry and steel construction and
include adhesives, chemicals, mechanical anchors, carbide drill
bits, powder actuated tools, fiber reinforced materials and other
repair products used for protection and strengthening. We market
our products to the residential construction, light industrial and
commercial construction, remodeling and do-it-yourself markets
domestically in North America,
primarily in the United States,
and internationally, primarily in Europe. We also provide engineering services
in support of some of our products and increasingly offer design
and other software that facilitates the specification, selection
and use of our products. 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 2IE 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 that concern our
strategy, plans, expectations or intentions. 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, the integration of the acquisition
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. Although we believe that the expectations,
opinions, projections and comments reflected in these
forward-looking statements are reasonable, such statements involve
risks and uncertainties and we can give no assurance that such
statements will prove to be correct. Actual results may differ
materially from those expressed or implied in such
statements.
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 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 global
economy, including inflation and labor and supply shortages, our
operations, the operations of our customers, suppliers and business
partners, and the successful 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
June 30,
|
|
Six Months Ended
June 30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Net sales
|
$
597,580
|
|
$
593,232
|
|
$
1,132,010
|
|
$ 1,086,802
|
Cost of
sales
|
310,114
|
|
333,899
|
|
591,669
|
|
590,688
|
Gross
profit
|
287,466
|
|
259,333
|
|
540,341
|
|
496,114
|
Research and
development and engineering expense
|
21,538
|
|
16,943
|
|
42,284
|
|
32,809
|
Selling
expense
|
50,438
|
|
45,074
|
|
99,106
|
|
81,910
|
General and
administrative expense
|
68,767
|
|
58,419
|
|
132,474
|
|
112,192
|
Total operating
expenses
|
140,743
|
|
120,436
|
|
273,864
|
|
226,911
|
Acquisition and
integration related costs
|
1,859
|
|
5,864
|
|
3,301
|
|
12,815
|
Gain on disposal of
assets
|
(157)
|
|
(43)
|
|
(207)
|
|
(1,126)
|
Income from
operations
|
145,021
|
|
133,076
|
|
263,383
|
|
257,514
|
Interest expense, net
and other
|
(705)
|
|
(3,372)
|
|
(1,274)
|
|
(3,585)
|
Other & foreign
exchange loss, net
|
357
|
|
(1,890)
|
|
(42)
|
|
(2,107)
|
Income before
taxes
|
144,673
|
|
127,814
|
|
262,067
|
|
251,822
|
Provision for income
taxes
|
37,462
|
|
34,244
|
|
66,903
|
|
63,677
|
Net income
|
$
107,211
|
|
$
93,570
|
|
$
195,164
|
|
$
188,145
|
Earnings per common
share:
|
|
|
|
|
|
|
|
Basic
|
$
2.51
|
|
$
2.17
|
|
$
4.58
|
|
$
4.36
|
Diluted
|
$
2.50
|
|
$
2.16
|
|
$
4.55
|
|
$
4.34
|
Weighted average shares
outstanding:
|
|
|
|
|
|
|
|
Basic
|
42,669
|
|
43,145
|
|
42,640
|
|
43,162
|
Diluted
|
42,813
|
|
43,240
|
|
42,857
|
|
43,306
|
Cash dividend declared
per common share
|
$
0.27
|
|
$
0.26
|
|
$
0.53
|
|
$
0.51
|
Other data:
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
$
18,680
|
|
$
17,530
|
|
$
36,045
|
|
$
28,324
|
Pre-tax equity-based
compensation expense
|
$
6,535
|
|
$
4,657
|
|
$
11,164
|
|
$
9,528
|
Simpson
Manufacturing Co., Inc. and Subsidiaries
UNAUDITED
Consolidated Condensed Balance Sheets
(In
thousands)
|
|
|
|
June
30,
|
|
December
31,
|
|
|
2023
|
|
2022
|
|
2022
|
Cash and cash
equivalents
|
|
$
407,982
|
|
$
246,134
|
|
$
300,742
|
Trade accounts
receivable, net
|
|
387,917
|
|
375,130
|
|
269,124
|
Inventories
|
|
522,169
|
|
539,844
|
|
556,801
|
Other current
assets
|
|
53,344
|
|
43,501
|
|
52,583
|
Total current
assets
|
|
1,371,412
|
|
1,204,609
|
|
1,179,250
|
Property, plant and
equipment, net
|
|
375,240
|
|
346,184
|
|
361,555
|
Operating lease
right-of-use assets
|
|
63,358
|
|
48,984
|
|
57,652
|
Goodwill
|
|
492,158
|
|
492,338
|
|
495,672
|
Intangible assets,
net
|
|
369,649
|
|
357,698
|
|
362,917
|
Other noncurrent
assets
|
|
43,233
|
|
35,655
|
|
46,925
|
Total assets
|
|
$
2,715,050
|
|
$
2,485,468
|
|
$
2,503,971
|
Trade accounts
payable
|
|
$
97,847
|
|
$
112,968
|
|
$
97,841
|
Long-term debt, current
portion
|
|
22,500
|
|
22,500
|
|
22,500
|
Accrued liabilities and
other current liabilities
|
|
276,601
|
|
225,928
|
|
228,222
|
Total current
liabilities
|
|
396,948
|
|
361,396
|
|
348,563
|
Operating lease
liabilities, net of current portion
|
|
51,560
|
|
39,654
|
|
46,882
|
Long-term debt, net of
current portion
|
|
544,309
|
|
665,449
|
|
554,539
|
Deferred income tax and
other long-term liabilities
|
|
142,921
|
|
134,331
|
|
140,608
|
Stockholders'
equity
|
|
1,579,312
|
|
1,284,638
|
|
1,413,379
|
Total liabilities and
stockholders' equity
|
|
$
2,715,050
|
|
$
2,485,468
|
|
$
2,503,971
|
Simpson
Manufacturing Co., Inc. and Subsidiaries
UNAUDITED Segment
and Product Group Information
(In
thousands)
|
|
|
|
Three Months
Ended
|
|
|
|
Six Months
Ended
|
|
|
|
|
June
30,
|
|
%
|
|
June
30,
|
|
%
|
|
2023
|
|
2022
|
|
change*
|
|
2023
|
|
2022
|
|
change*
|
Net Sales by
Reporting Segment
|
|
|
|
|
|
|
|
|
|
|
|
|
North
America
|
$
465,467
|
|
$
456,410
|
|
2.0 %
|
|
$
871,797
|
|
$
895,140
|
|
(2.6) %
|
|
Percentage of total
net sales
|
77.9 %
|
|
76.9 %
|
|
|
|
77.0 %
|
|
82.4 %
|
|
|
|
Europe
|
127,817
|
|
133,238
|
|
(4.1) %
|
|
252,031
|
|
184,689
|
|
36.5 %
|
|
Percentage of total
net sales
|
21.4 %
|
|
22.5 %
|
|
|
|
22.3 %
|
|
17.0 %
|
|
|
|
Asia/Pacific
|
4,296
|
|
3,584
|
|
19.9 %
|
|
8,182
|
|
6,973
|
|
17.3 %
|
|
|
$
597,580
|
|
$
593,232
|
|
0.7 %
|
|
$ 1,132,010
|
|
$
1,086,802
|
|
4.2 %
|
Net Sales by Product
Group**
|
|
|
|
|
|
|
|
|
|
|
|
|
Wood
Construction
|
$
515,378
|
|
$
514,832
|
|
0.1 %
|
|
$
970,137
|
|
$
950,191
|
|
2.1 %
|
|
Percentage of total
net sales
|
86.2 %
|
|
86.7 %
|
|
|
|
85.7 %
|
|
87.4 %
|
|
|
|
Concrete
Construction
|
81,319
|
|
78,209
|
|
4.0 %
|
|
157,990
|
|
136,185
|
|
16.0 %
|
|
Percentage of total
net sales
|
13.6 %
|
|
13.2 %
|
|
|
|
14.0 %
|
|
12.5 %
|
|
|
|
Other
|
883
|
|
191
|
|
362.3 %
|
|
3,883
|
|
426
|
|
811.5 %
|
|
|
$
597,580
|
|
$
593,232
|
|
0.7 %
|
|
$ 1,132,010
|
|
$
1,086,802
|
|
4.2 %
|
Gross Profit (Loss)
by Reporting Segment
|
|
|
|
|
|
|
|
|
|
|
|
|
North
America
|
$
238,245
|
|
$
219,299
|
|
8.6 %
|
|
$
443,767
|
|
$
437,175
|
|
1.5 %
|
|
North America
gross margin
|
51.2 %
|
|
48.0 %
|
|
|
|
50.9 %
|
|
48.8 %
|
|
|
|
Europe
|
47,819
|
|
39,023
|
|
22.5 %
|
|
94,423
|
|
56,476
|
|
67.2 %
|
|
Europe gross
margin
|
37.4 %
|
|
29.3 %
|
|
|
|
37.5 %
|
|
30.6 %
|
|
|
|
Asia/Pacific
|
1,820
|
|
1,098
|
|
N/M
|
|
2,744
|
|
2,546
|
|
N/M
|
|
Administrative and all
other
|
(418)
|
|
(87)
|
|
N/M
|
|
(593)
|
|
(83)
|
|
N/M
|
|
|
$
287,466
|
|
$
259,333
|
|
10.8 %
|
|
$
540,341
|
|
$
496,114
|
|
8.9 %
|
Income (Loss) from
Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
North
America
|
$
143,430
|
|
$
137,291
|
|
4.5 %
|
|
$
257,823
|
|
$
273,064
|
|
(5.6) %
|
|
North America
operating margin
|
30.8 %
|
|
30.1 %
|
|
|
|
29.6 %
|
|
30.5 %
|
|
|
|
Europe
|
13,974
|
|
5,560
|
|
151.3 %
|
|
27,444
|
|
4,189
|
|
555.1 %
|
|
Europe operating
margin
|
10.9 %
|
|
4.2 %
|
|
|
|
10.9 %
|
|
2.3 %
|
|
|
|
Asia/Pacific
|
379
|
|
100
|
|
N/M
|
|
241
|
|
664
|
|
N/M
|
|
Administrative and all
other
|
(12,762)
|
|
(9,875)
|
|
N/M
|
|
(22,125)
|
|
(20,403)
|
|
N/M
|
|
|
$
145,021
|
|
$
133,076
|
|
9.0 %
|
|
$
263,383
|
|
$
257,514
|
|
2.3 %
|
|
*
|
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
View original
content:https://www.prnewswire.com/news-releases/simpson-manufacturing-co-inc-announces-2023-second-quarter-financial-results-301884320.html
SOURCE Simpson Manufacturing Co., Inc.