PLEASANTON, Calif.,
Oct. 25, 2021 /PRNewswire/ --
- Quarterly net sales of $396.7
million, an increase of 8.9% year-over-year
- Gross margin of 49.9% increased from 47.6% in the prior year
period
- Quarterly income from operations of $100.6 million, an increase of 10.2%
year-over-year; operating margin of 25.4% increased from 25.1% in
the prior year period
- Quarterly diluted earnings per share of $1.70, an increase of 10.4%
year-over-year
- Repurchased $24.1 million of
the Company's common stock during the quarter
- Declared $0.25 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 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
September 30, 2021 with the quarter ended September 30,
2020.
2021 Third Quarter Financial Highlights
- Consolidated net sales of $396.7
million increased 8.9% from $364.3
million.
-
- North America net sales of
$338.6 million increased 6.8% from
$316.9 million due primarily to
product price increases that took effect in April, June and August
of 2021 in an effort to offset rising material costs, and were
partially offset by lower sales volumes, primarily in the home
center channel. Canada's net sales
were positively impacted by approximately $1.0 million in foreign currency
translation.
- Europe net sales of
$54.8 million increased 22.5% from
$44.8 million, primarily due to
higher sales volumes and were positively affected by approximately
$0.9 million in foreign currency
translation related to Europe's
currencies strengthening against the
United States dollar.
- Consolidated gross profit of $198.0
million increased 14.3% from $173.2
million. Gross margin increased to 49.9% from 47.6%.
-
- North America gross margin
increased to 52.1% from 48.9%, primarily due to product price
increases in the second and third quarters of 2021.
- Europe gross margin decreased
to 37.7% from 37.9%, primarily due to higher material costs, labor,
factory, warehouse and shipping costs, each as a percentage of net
sales.
- Consolidated income from operations of $100.6 million increased 10.2% from $91.3 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 cash preservation actions taken in
2020 in response to uncertainty of the impact of the COVID-19
pandemic on the Company. Consolidated operating margin increased to
25.4% from 25.1%.
-
- North America income from
operations of $97.0 million increased
from $87.4 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 $7.5 million increased from
$6.1 million, primarily due to the
increase in sales volumes and gross profit, partly offset by higher
operating expenses due to higher professional fees and personnel
costs.
- The Company's effective income tax rate decreased to 26.1% from
26.2%.
- Net income was $73.8 million, or
$1.70 per diluted share of the
Company's common stock, compared to net income of $67.1 million, or $1.54 per diluted share.
- Cash flow provided by operating activities decreased
approximately $46.3 million to
$40.5 million from $86.8 million.
- Cash flow used in investing activities increased approximately
$6.9 million to $15.0 million from $8.1
million. Capital expenditures were approximately
$12.0 million compared to
$6.8 million.
Management Commentary
"We are very pleased with our continued solid financial and
operational performance in the third quarter, with our income from
operations increasing to $100.6
million, resulting in strong earnings per diluted share of
$1.70," commented Karen Colonias, President and Chief Executive
Officer of Simpson Manufacturing Co., Inc. "During the third
quarter, we experienced lighter sales volumes in North America in the distribution channels we
serve. We believe our customers are adopting a more cautious stance
in regard to their inventory levels given tightening labor and
supply chain conditions and the potential impact on the building
industry. Sales volumes also reflected an as expected decline
year-over-year in our home center channel related to the load-in of
our products at Lowe's during the third quarter of 2020 following
their return as a home center customer. We expect volume levels in
the home center channel to begin normalizing in the fourth quarter
as demand increases and we lap the elevated volumes from our Lowe's
product load-ins."
Ms. Colonias concluded, "We continue to remain focused on
executing our key growth initiatives as well as providing capital
returns to our stockholders. Our strong cash generation enabled us
to invest $12.0 million for capital
expenditures during the quarter as well as to pay $10.9 million in dividends and repurchase
$24.1 million of Simpson common
stock. While the macroeconomic landscape remains challenging for
Simpson and its customers due to ongoing global supply chain
constraints, limited steel availability and a tight labor market,
we continue to deliver on the key elements of our business model to
ensure we meet our customers' needs. I'd like to sincerely thank
all of our employees for their commitment to Simpson and their
dedication to health, safety and outstanding customer service."
Corporate Developments
- On October 19, 2021, the
Company's Board of Directors declared a quarterly cash dividend of
$0.25 per share. The dividend will be
payable on January 27, 2022 to the
stockholders of record as of January 6,
2022.
- During the third quarter of 2021, the Company repurchased
222,060 shares of the Company's common stock in the open market at
an average price of $108.64 per
share, for a total of $24.1 million.
As of September 30, 2021,
approximately $75.9 million remained
available for repurchase under the Company's previously announced
$100.0 million share repurchase
authorization (which expires at the end of 2021).
Business Outlook
On July 26, 2021, the Company
provided a full-year outlook. The Company is updating certain
elements of its outlook, primarily reflecting actual results of the
third quarter as well as the Company's latest views on demand
trends, raw material input costs and operating expenses. 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 20.0% to
22.0%.
- 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 third quarter of 2021 financial results
conference call on Monday, October 25, 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=146757 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 8, 2021, by dialing (844) 512–2921 (U.S.
and Canada) or (412) 317–6671
(International) and entering the conference ID: 13723661. 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
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, costs of raw materials 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 duration and 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, 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
September 30,
|
|
Nine Months
Ended
September 30,
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Net sales
|
$
|
396,738
|
|
|
$
|
364,304
|
|
|
$
|
1,154,661
|
|
|
$
|
974,048
|
|
Cost of
sales
|
198,706
|
|
|
191,061
|
|
|
597,901
|
|
|
521,339
|
|
Gross
profit
|
198,032
|
|
|
173,243
|
|
|
556,760
|
|
|
452,709
|
|
Research and
development and engineering expense
|
14,562
|
|
|
12,287
|
|
|
43,321
|
|
|
37,860
|
|
Selling
expense
|
35,063
|
|
|
29,396
|
|
|
99,053
|
|
|
84,757
|
|
General and
administrative expense
|
47,792
|
|
|
40,289
|
|
|
143,767
|
|
|
117,396
|
|
Total operating
expenses
|
97,417
|
|
|
81,972
|
|
|
286,141
|
|
|
240,013
|
|
Gain on disposal of
assets
|
(4)
|
|
|
(72)
|
|
|
(112)
|
|
|
(209)
|
|
Income from
operations
|
100,619
|
|
|
91,343
|
|
|
270,731
|
|
|
212,905
|
|
Interest expense, net
and other
|
(846)
|
|
|
(518)
|
|
|
(5,259)
|
|
|
(3,202)
|
|
Income before
taxes
|
99,773
|
|
|
90,825
|
|
|
265,472
|
|
|
209,703
|
|
Provision for income
taxes
|
25,995
|
|
|
23,768
|
|
|
68,822
|
|
|
52,341
|
|
Net income
|
$
|
73,778
|
|
|
$
|
67,057
|
|
|
$
|
196,650
|
|
|
$
|
157,362
|
|
Earnings per common
share:
|
|
|
|
|
|
|
|
Basic
|
$
|
1.70
|
|
|
$
|
1.54
|
|
|
$
|
4.54
|
|
|
$
|
3.60
|
|
Diluted
|
$
|
1.70
|
|
|
$
|
1.54
|
|
|
$
|
4.52
|
|
|
$
|
3.59
|
|
Weighted average
shares outstanding:
|
|
|
|
|
|
|
|
Basic
|
43,276
|
|
|
43,474
|
|
|
43,287
|
|
|
43,683
|
|
Diluted
|
43,485
|
|
|
43,683
|
|
|
43,500
|
|
|
43,873
|
|
Cash dividend
declared per common share
|
$
|
0.25
|
|
|
$
|
0.23
|
|
|
$
|
0.73
|
|
|
$
|
0.69
|
|
Other
data:
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
$
|
10,439
|
|
|
$
|
10,349
|
|
|
$
|
33,192
|
|
|
$
|
30,088
|
|
Pre-tax equity-based
compensation expense
|
$
|
3,146
|
|
|
$
|
4,031
|
|
|
$
|
13,391
|
|
|
$
|
9,459
|
|
Simpson
Manufacturing Co., Inc. and Subsidiaries
|
UNAUDITED
Consolidated Condensed Balance Sheets
|
(In
thousands)
|
|
|
|
September
30,
|
|
December
31,
|
|
|
2021
|
|
2020
|
|
2020
|
Cash and cash
equivalents
|
|
$
|
294,180
|
|
|
$
|
311,465
|
|
|
$
|
274,639
|
|
Trade accounts
receivable, net
|
|
236,535
|
|
|
226,447
|
|
|
165,128
|
|
Inventories
|
|
385,512
|
|
|
260,054
|
|
|
283,742
|
|
Other current
assets
|
|
34,760
|
|
|
22,439
|
|
|
29,630
|
|
Total current
assets
|
|
950,987
|
|
|
820,405
|
|
|
753,139
|
|
Property, plant and
equipment, net
|
|
255,547
|
|
|
246,472
|
|
|
255,184
|
|
Operating lease
right-of-use assets
|
|
41,513
|
|
|
41,453
|
|
|
45,792
|
|
Goodwill
|
|
133,495
|
|
|
133,734
|
|
|
135,844
|
|
Other noncurrent
assets
|
|
40,527
|
|
|
35,801
|
|
|
42,610
|
|
Total
assets
|
|
$
|
1,422,069
|
|
|
$
|
1,277,865
|
|
|
$
|
1,232,569
|
|
Trade accounts
payable
|
|
$
|
62,405
|
|
|
$
|
42,271
|
|
|
$
|
48,271
|
|
Accrued liabilities
and other current liabilities
|
|
183,072
|
|
|
148,890
|
|
|
145,790
|
|
Total current
liabilities
|
|
245,477
|
|
|
191,161
|
|
|
194,061
|
|
Operating lease
liabilities, net of current portion
|
|
33,063
|
|
|
33,354
|
|
|
37,199
|
|
Long-term debt, net
of current portion
|
|
—
|
|
|
75,000
|
|
|
—
|
|
Deferred income tax
and other long-term liabilities
|
|
20,526
|
|
|
17,550
|
|
|
20,366
|
|
Stockholders'
equity
|
|
1,123,003
|
|
|
960,800
|
|
|
980,943
|
|
Total liabilities and
stockholders' equity
|
|
$
|
1,422,069
|
|
|
$
|
1,277,865
|
|
|
$
|
1,232,569
|
|
Simpson
Manufacturing Co., Inc. and Subsidiaries
|
UNAUDITED Segment
and Product Group Information
|
(In
thousands)
|
|
|
Three Months
Ended
|
|
|
|
Nine Months
Ended
|
|
|
|
|
September
30,
|
|
%
|
|
September
30,
|
|
%
|
|
2021
|
|
2020
|
|
change*
|
|
2021
|
|
2020
|
|
change*
|
Net Sales by
Reporting Segment
|
|
|
|
|
|
|
|
|
|
|
|
|
North
America
|
$
|
338,591
|
|
$
|
316,902
|
|
6.8%
|
|
$
|
989,711
|
|
$
|
852,759
|
|
16.1%
|
|
Percentage of total
net sales
|
85.3%
|
|
87.0%
|
|
|
|
85.7%
|
|
87.5%
|
|
|
|
Europe
|
54,832
|
|
44,766
|
|
22.5%
|
|
155,567
|
|
114,877
|
|
35.4%
|
|
Percentage of total
net sales
|
13.8%
|
|
12.3%
|
|
|
|
13.5%
|
|
11.8%
|
|
|
|
Asia/Pacific
|
3,315
|
|
2,636
|
|
25.8%
|
|
9,383
|
|
6,412
|
|
46.3%
|
|
|
$
|
396,738
|
|
$
|
364,304
|
|
8.9%
|
|
$
|
1,154,661
|
|
$
|
974,048
|
|
18.5%
|
Net Sales by
Product Group**
|
|
|
|
|
|
|
|
|
|
|
|
|
Wood
Construction
|
$
|
338,896
|
|
$
|
311,167
|
|
8.9%
|
|
$
|
996,261
|
|
$
|
834,411
|
|
19.4%
|
|
Percentage of total
net sales
|
85.4%
|
|
85.4%
|
|
|
|
86.3%
|
|
85.7%
|
|
|
|
Concrete
Construction
|
57,589
|
|
52,983
|
|
8.7%
|
|
157,417
|
|
139,299
|
|
13.0%
|
|
Percentage of total
net sales
|
14.5%
|
|
14.5%
|
|
|
|
13.6%
|
|
14.3%
|
|
|
|
Other
|
253
|
|
154
|
|
N/M
|
|
983
|
|
338
|
|
N/M
|
|
|
$
|
396,738
|
|
$
|
364,304
|
|
8.9%
|
|
$
|
1,154,661
|
|
$
|
974,048
|
|
18.5%
|
Gross Profit
(Loss) by Reporting Segment
|
|
|
|
|
|
|
|
|
|
|
|
|
North
America
|
$
|
176,256
|
|
$
|
155,061
|
|
13.7%
|
|
$
|
497,070
|
|
$
|
409,863
|
|
21.3%
|
|
North America
gross margin
|
52.1%
|
|
48.9%
|
|
|
|
50.2%
|
|
48.1%
|
|
|
|
Europe
|
20,680
|
|
16,980
|
|
21.8%
|
|
56,228
|
|
40,787
|
|
37.9%
|
|
Europe gross
margin
|
37.7%
|
|
37.9%
|
|
|
|
36.1%
|
|
35.5%
|
|
|
|
Asia/Pacific
|
1,139
|
|
1,376
|
|
N/M
|
|
3,590
|
|
2,026
|
|
N/M
|
|
Administrative and
all other
|
(43)
|
|
(174)
|
|
N/M
|
|
(128)
|
|
33
|
|
N/M
|
|
|
$
|
198,032
|
|
$
|
173,243
|
|
14.3%
|
|
$
|
556,760
|
|
$
|
452,709
|
|
23.0%
|
Income (Loss) from
Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
North
America
|
$
|
96,954
|
|
$
|
87,378
|
|
11.0%
|
|
$
|
261,487
|
|
$
|
213,135
|
|
22.7%
|
|
North America
operating margin
|
28.6%
|
|
27.6%
|
|
|
|
26.4%
|
|
25.0%
|
|
|
|
Europe
|
7,517
|
|
6,074
|
|
23.8%
|
|
15,681
|
|
7,100
|
|
120.9%
|
|
Europe operating
margin
|
13.7%
|
|
13.6%
|
|
|
|
10.1%
|
|
6.2%
|
|
|
|
Asia/Pacific
|
313
|
|
519
|
|
N/M
|
|
941
|
|
(160)
|
|
N/M
|
|
Administrative and
all other
|
(4,165)
|
|
(2,628)
|
|
N/M
|
|
(7,378)
|
|
(7,170)
|
|
N/M
|
|
|
$
|
100,619
|
|
$
|
91,343
|
|
10.2%
|
|
$
|
270,731
|
|
$
|
212,905
|
|
27.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*
|
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.