PLEASANTON, Calif.,
July 26, 2021 /PRNewswire/ --
- Quarterly net sales of $410.3
million, an increase of 25.8% year-over-year
- Gross margin of 47.9% increased from 45.9% in the prior year
period
- Quarterly income from operations of $101.7 million, an increase of 40.9%
year-over-year; operating margin of 24.8% increased from 22.1% in
the prior year period
- Quarterly diluted earnings per share of $1.66, an increase of 36.1%
year-over-year
- Declared $0.25 per share
quarterly cash dividend
- Updating full year 2021 financial guidance
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 2021. 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, 2021 with the quarter ended June 30, 2020.
2021 Second Quarter Financial Highlights
- Consolidated net sales of $410.3 million increased 25.8% from
$326.1 million.
-
- North America net sales of
$350.6 million increased 22.2% from
$286.8 million due primarily to
product price increases that took effect in April and June of 2021,
in an effort to offset rising material costs, along with marginally
higher sales volumes. In addition, the majority of the Company's
distribution channels continued to benefit from increased U.S.
housing starts and repair and remodel activity. Canada's net sales also increased primarily
due to higher sales volumes and were positively impacted by
approximately $2.6 million in foreign
currency translation.
- Europe net sales of
$56.4 million increased 51.0% from
$37.4 million, primarily due to
higher sales volumes and were positively affected by approximately
$5.3 million in foreign currency
translation related to Europe's
currencies strengthening against the
United States dollar.
- Consolidated gross profit of $196.4
million increased 31.1% from $149.8
million. Gross margin increased to 47.9% from 45.9%.
-
- North America gross margin
increased to 49.9% from 47.4%, primarily due to the aforementioned
product price increases.
- Europe gross margin increased
to 36.0% from 35.1%, primarily due to lower labor, factory,
warehouse and shipping costs, partly offset by higher material
costs, each as a percentage of net sales.
- Consolidated income from operations of $101.7 million increased 40.9% from $72.2 million. The increase was primarily due to
the increase in consolidated gross profit, partly offset by higher
operating expenses, as the Company transitions to a more normalized
operating environment following 2020. Consolidated operating margin
increased to 24.8% from 22.1%.
-
- North America income from
operations of $95.1 million increased
from $72.2 million, primarily due to
the increase in gross profit, partly offset by higher operating
expenses due to higher personnel costs and professional fees.
- Europe income from operations
of $5.9 million increased from
$2.7 million, primarily due to the
increase in sales volumes and gross profit, partly offset by higher
operating expenses due to higher personnel costs.
- The Company's effective income tax rate increased to 26.9% from
25.8%.
- Net income was $72.5 million, or
$1.66 per diluted share of the
Company's common stock, compared to net income of $53.5 million, or $1.22 per diluted share.
- Cash flow provided by operating activities increased
approximately $38.9 million to
$81.6 million from $42.8 million.
- Cash flow used in investing activities increased approximately
$12.8 million to $26.2 million from $13.4
million. Capital expenditures were approximately
$19.3 million compared to
$14.1 million and the Company
invested $6.8 million in a venture
capital fund.
Management Commentary
"We are pleased with our second quarter performance," commented
Karen Colonias, President and Chief
Executive Officer of Simpson Manufacturing Co., Inc. "We
experienced strong business momentum, generating net sales of
$410.3 million, which grew 18.0% over
the prior quarter and 25.8% over the prior year comparable period.
Sales growth was primarily driven by the implementation of two
product price increases during the quarter to offset rising
material costs along with marginal increases in sales volume. The
recent price increases we implemented drove significantly higher
gross margins for the second quarter which increased to 47.9% from
46.7% in the prior quarter and 45.9% in the prior year period. As a
result, our income from operations improved to $101.7 million and led to strong earnings per
diluted share of $1.66."
Ms. Colonias continued, "Throughout the quarter, we were very
pleased to be able to continue meeting the needs of our customers
by providing them with our trusted product solutions, typically
within 48 hours or less. This is despite the current environment
marked by the increasing prevalence of global supply chain
constraints, limited steel availability and a tight labor market.
We also remained focused on executing our key growth initiatives
which include: expansion into the OEM, repair & remodel /
do-it-yourself ("R&R/DIY"), mass timber, concrete and
structural steel markets."
Ms. Colonias concluded, "Importantly, we continue to believe in
our ability to achieve our Five-year Company Ambitions despite
margin compression we are expecting in 2022, which we expect will
be directly correlated with rising raw material costs. Looking
ahead to the second half of this year, we will continue to manage
the key areas of our business we can control and look forward to
continuing to provide our customers with Simpson's industry-leading
solutions, supported by our long-standing relationships, technical
and field support, strong inventory position and consistent product
availability. I would like to sincerely thank our employees for
their commitment to Simpson. We commend you for your dedication to
safety, and for working hard every day to help achieve our mission
of providing solutions to help people design and build safer,
stronger structures."
Corporate Developments
- On July 12, 2021, the Company
entered into a fourth amendment to the Credit Agreement dated as of
July 27, 2012, which, amongst other
things, extended the term of the credit agreement from July 23, 2022 to July 12,
2026 and modified certain covenants to provide the Company
additional flexibility.
- On July 14, 2021, the Company's
Board of Directors declared a quarterly cash dividend of
$0.25 per share. The dividend will be
payable on October 28, 2021 to the
stockholders of record as of October 7,
2021.
Business Outlook
On April 26, 2021, the Company
provided a full-year outlook. The Company is updating its full year
outlook, primarily reflecting actual results of the second quarter,
as well as improved visibility on the pandemic-related restrictions
and the impact of those restrictions on the Company's operations.
Based on business trends and conditions as of today, July 26, 2021, the Company's outlook for the full
fiscal year ending December 31, 2021
is as follows:
- Operating margin is estimated to be in the range of 19.5% to
21.0%.
- The effective tax rate is estimated to be in the range of 25.0%
to 26.0%, including both federal and state income tax rates.
- Capital expenditures are estimated to be in the range of
$55 million to $60 million.
Conference Call Details
Investors, analysts and other interested parties are invited to
join the Company's second quarter of 2021 financial results
conference call on Monday, July 26, 2021, 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
http://public.viavid.com/index.php?id=145400 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 9, 2021, by dialing (844) 512–2921 (U.S. and
Canada) or (412) 317–6671
(International) and entering the conference ID: 13720842. The
webcast will remain posted on the Investor Relations section of the
Company's website 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
subsidiary, Simpson Strong-Tie Company Inc., designs, engineers and
is a leading manufacturer of wood construction products, including
connectors, truss plates, fastening systems, fasteners and
shearwalls, and concrete construction products, including
adhesives, specialty chemicals, mechanical anchors, powder actuated
tools and reinforcing fiber materials. 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 2 IE 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," "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
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
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 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 and other statements that are not historical facts.
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, risk 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 impact of the
COVID-19 pandemic on our operations and supply chain, and the
operations of our customers, suppliers and business partners and
those discussed under Part I – Item 1A. Risk Factors and Item 7
Management's Discussion and Analysis of Financial Condition and
Results of Operations in our most recent Annual Report on Form
10-K, Part II – Other Information – Item 1.A and subsequent filings
with the SEC. To the extent that the COVID-19 pandemic adversely
affects our business and financial results, it may also have the
effect of heightening many of such risk and other factors.
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. 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 Statements of Operations
|
(In thousands,
except per share data)
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
(Amounts in
thousands, except per share data)
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Net sales
|
$
|
410,281
|
|
|
$
|
326,076
|
|
|
$
|
757,922
|
|
|
$
|
609,744
|
|
Cost of
sales
|
213,835
|
|
|
176,276
|
|
|
399,195
|
|
|
330,278
|
|
Gross
profit
|
196,446
|
|
|
149,800
|
|
|
358,727
|
|
|
279,466
|
|
Research and
development and engineering expense
|
14,169
|
|
|
12,191
|
|
|
28,758
|
|
|
25,573
|
|
Selling
expense
|
33,167
|
|
|
26,834
|
|
|
63,990
|
|
|
55,361
|
|
General and
administrative expense
|
47,410
|
|
|
38,636
|
|
|
95,975
|
|
|
77,107
|
|
Total operating
expenses
|
94,746
|
|
|
77,661
|
|
|
188,723
|
|
|
158,041
|
|
Gain on disposal of
assets
|
(28)
|
|
|
(73)
|
|
|
(108)
|
|
|
(137)
|
|
Income from
operations
|
101,728
|
|
|
72,212
|
|
|
170,112
|
|
|
121,562
|
|
Interest expense, net
and other
|
(2,636)
|
|
|
(151)
|
|
|
(4,413)
|
|
|
(2,684)
|
|
Income before
taxes
|
99,092
|
|
|
72,061
|
|
|
165,699
|
|
|
118,878
|
|
Provision for income
taxes
|
26,609
|
|
|
18,582
|
|
|
42,827
|
|
|
28,573
|
|
Net income
|
$
|
72,483
|
|
|
$
|
53,479
|
|
|
$
|
122,872
|
|
|
$
|
90,305
|
|
Earnings per common
share:
|
|
|
|
|
|
|
|
Basic
|
$
|
1.67
|
|
|
$
|
1.23
|
|
|
$
|
2.83
|
|
|
$
|
2.06
|
|
Diluted
|
$
|
1.66
|
|
|
$
|
1.22
|
|
|
$
|
2.82
|
|
|
$
|
2.05
|
|
Weighted average
shares outstanding:
|
|
|
|
|
|
|
|
Basic
|
43,434
|
|
|
43,471
|
|
|
43,406
|
|
|
43,787
|
|
Diluted
|
43,641
|
|
|
43,663
|
|
|
43,620
|
|
|
43,980
|
|
Cash dividend
declared per common share
|
$
|
0.25
|
|
|
$
|
0.23
|
|
|
$
|
0.50
|
|
|
$
|
0.46
|
|
Other
data:
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
$
|
11,527
|
|
|
$
|
10,006
|
|
|
$
|
22,753
|
|
|
$
|
19,739
|
|
Pre-tax equity-based
compensation expense
|
$
|
3,702
|
|
|
$
|
5,151
|
|
|
$
|
10,245
|
|
|
$
|
5,428
|
|
Simpson
Manufacturing Co., Inc. and Subsidiaries
|
UNAUDITED
Consolidated Condensed Balance Sheets
|
(In
thousands)
|
|
|
|
June
30,
|
|
December
31,
|
(Amounts in
thousands)
|
|
2021
|
|
2020
|
|
2020
|
Cash and cash
equivalents
|
|
$
|
305,796
|
|
|
$
|
315,448
|
|
|
$
|
274,639
|
|
Trade accounts
receivable, net
|
|
249,931
|
|
|
233,867
|
|
|
165,128
|
|
Inventories
|
|
310,254
|
|
|
265,365
|
|
|
283,742
|
|
Other current
assets
|
|
35,722
|
|
|
20,222
|
|
|
29,630
|
|
Total current
assets
|
|
901,703
|
|
|
834,902
|
|
|
753,139
|
|
Property, plant and
equipment, net
|
|
255,353
|
|
|
247,119
|
|
|
255,184
|
|
Operating lease
right-of-use assets
|
|
43,374
|
|
|
36,930
|
|
|
45,792
|
|
Goodwill
|
|
134,121
|
|
|
132,335
|
|
|
135,844
|
|
Other noncurrent
assets
|
|
39,423
|
|
|
33,217
|
|
|
42,610
|
|
Total
assets
|
|
$
|
1,373,974
|
|
|
$
|
1,284,503
|
|
|
$
|
1,232,569
|
|
Trade accounts
payable
|
|
$
|
60,268
|
|
|
$
|
49,149
|
|
|
$
|
48,271
|
|
Accrued liabilities
and other current liabilities
|
|
172,186
|
|
|
144,265
|
|
|
145,790
|
|
Total current
liabilities
|
|
232,454
|
|
|
193,414
|
|
|
194,061
|
|
Operating lease
liabilities, net of current portion
|
|
34,087
|
|
|
28,893
|
|
|
37,199
|
|
Long-term debt, net
of current portion
|
|
—
|
|
|
150,000
|
|
|
—
|
|
Deferred income tax
and other long-term liabilities
|
|
20,528
|
|
|
17,984
|
|
|
20,366
|
|
Stockholders'
equity
|
|
1,086,905
|
|
|
894,212
|
|
|
980,943
|
|
Total liabilities and
stockholders' equity
|
|
$
|
1,373,974
|
|
|
$
|
1,284,503
|
|
|
$
|
1,232,569
|
|
Simpson
Manufacturing Co., Inc. and Subsidiaries
|
UNAUDITED Segment
and Product Group Information
|
(In
thousands)
|
|
|
Three Months
Ended
|
|
|
|
Six Months
Ended
|
|
|
|
|
June
30,
|
|
%
|
|
June
30,
|
|
%
|
(Amounts in
thousands)
|
2021
|
|
2020
|
|
change*
|
|
2021
|
|
2020
|
|
change*
|
Net Sales by
Reporting Segment
|
|
|
|
|
|
|
|
|
|
|
|
|
North
America
|
$
|
350,557
|
|
$
|
286,807
|
|
22.2%
|
|
$
|
651,120
|
|
$
|
535,857
|
|
21.5%
|
|
Percentage of total
net sales
|
85.4%
|
|
88.0%
|
|
|
|
85.9%
|
|
87.9%
|
|
|
|
Europe
|
56,438
|
|
37,379
|
|
51.0%
|
|
100,734
|
|
70,111
|
|
43.7%
|
|
Percentage of total
net sales
|
13.8%
|
|
11.4%
|
|
|
|
13.3%
|
|
11.4%
|
|
|
|
Asia/Pacific
|
3,286
|
|
1,890
|
|
73.9%
|
|
6,068
|
|
3,776
|
|
60.7%
|
|
|
$
|
410,281
|
|
$
|
326,076
|
|
25.8%
|
|
$
|
757,922
|
|
$
|
609,744
|
|
24.3%
|
Net Sales by
Product Group**
|
|
|
|
|
|
|
|
|
|
|
|
|
Wood
Construction
|
$
|
355,787
|
|
$
|
280,724
|
|
26.7%
|
|
$
|
657,365
|
|
$
|
523,244
|
|
25.6%
|
|
Percentage of total
net sales
|
86.7%
|
|
86.1%
|
|
|
|
86.7%
|
|
85.5%
|
|
|
|
Concrete
Construction
|
54,305
|
|
45,304
|
|
19.9%
|
|
99,828
|
|
86,316
|
|
15.7%
|
|
Percentage of total
net sales
|
13.2%
|
|
13.9%
|
|
|
|
13.2%
|
|
14.5%
|
|
|
|
Other
|
189
|
|
48
|
|
N/M
|
|
729
|
|
184
|
|
N/M
|
|
|
$
|
410,281
|
|
$
|
326,076
|
|
25.8%
|
|
$
|
757,922
|
|
$
|
609,744
|
|
24.3%
|
Gross Profit
(Loss) by Reporting Segment
|
|
|
|
|
|
|
|
|
|
|
|
|
North
America
|
$
|
174,984
|
|
$
|
136,024
|
|
28.6%
|
|
$
|
317,369
|
|
$
|
254,819
|
|
24.5%
|
|
North America
gross margin
|
49.9%
|
|
47.4%
|
|
|
|
48.7%
|
|
47.6%
|
|
|
|
Europe
|
20,298
|
|
13,106
|
|
54.9%
|
|
35,548
|
|
23,807
|
|
49.3%
|
|
Europe gross
margin
|
36.0%
|
|
35.1%
|
|
|
|
35.3%
|
|
34.0%
|
|
|
|
Asia/Pacific
|
1,207
|
|
484
|
|
N/M
|
|
2,451
|
|
651
|
|
N/M
|
|
Administrative and
all other
|
(43)
|
|
186
|
|
N/M
|
|
3,359
|
|
189
|
|
N/M
|
|
|
$
|
196,446
|
|
$
|
149,800
|
|
31.1%
|
|
$
|
358,727
|
|
$
|
279,466
|
|
28.4%
|
Income (Loss) from
Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
North
America
|
$
|
95,123
|
|
$
|
72,196
|
|
31.8%
|
|
$
|
164,533
|
|
$
|
125,757
|
|
30.8%
|
|
North America
operating margin
|
27.1%
|
|
25.2%
|
|
|
|
25.3%
|
|
23.5%
|
|
|
|
Europe
|
5,873
|
|
2,696
|
|
117.8%
|
|
8,164
|
|
1,026
|
|
695.7%
|
|
Europe operating
margin
|
10.4%
|
|
7.2%
|
|
|
|
8.1%
|
|
1.5%
|
|
|
|
Asia/Pacific
|
203
|
|
(75)
|
|
N/M
|
|
628
|
|
(679)
|
|
N/M
|
|
Administrative and
all other
|
529
|
|
(2,605)
|
|
N/M
|
|
(3,213)
|
|
(4,542)
|
|
N/M
|
|
|
$
|
101,728
|
|
$
|
72,212
|
|
40.9%
|
|
$
|
170,112
|
|
$
|
121,562
|
|
39.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*
|
Unfavorable
percentage changes are presented in parentheses, if any.
|
|
**
|
The Company manages
its business by geographic segment but is presenting 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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SOURCE Simpson Manufacturing Co., Inc.