PLEASANTON, Calif., Feb. 5, 2024
/PRNewswire/ --
- Fourth quarter net sales of $501.7
million increased 5.5% year-over-year
- 2023 net sales of $2.2 billion
increased 4.6% year-over-year
- 2023 net income per diluted share of $8.26 increased 6.5% year-over-year
- Declared a $0.27 per share
dividend
- Repurchased $50.0 million in
common stock in 2023
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 fourth
quarter and full-year 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
December 31, 2023 with the quarter ended December 31,
2022 or the fiscal year ended December 31,
2023 with the fiscal year ended December 31, 2022 and include the results of the
acquisition of FIXCO Invest S.A.S ("ETANCO") on April 1, 2022. 2023 full year comparisons include
twelve months of ETANCO operating results for the fiscal year
ending December 31, 2023, compared to
nine months for the fiscal year ending December 31, 2022.
2023 Fourth Quarter Financial Highlights
- Consolidated net sales of $501.7
million increased 5.5% from $475.6
million.
- North America net sales of
$387.8 million increased 5.3% from
$368.1 million, primarily due to
higher sales volumes, partly offset by price decreases implemented
during the first quarter of 2023.
- Europe net sales of
$109.7 million increased 5.8% from
$103.7 million, primarily due to the
positive effect of approximately $5.1
million in foreign currency translation.
- Consolidated gross profit of $220.5
million increased 9.9% compared to $200.7 million. Consolidated gross margin
increased to 43.9% from 42.2%.
- North America gross margin
increased to 47.0% from 45.0%, primarily due to lower raw material
and labor costs, as a percentage of net sales.
- Europe gross margin increased
to 34.2% from 32.7%, primarily due to lower raw material costs as a
percentage of net sales. Cost of sales in the prior year period
included a $1.4 million inventory
fair-value adjustment as a result of purchase accounting with
respect to the acquisition of ETANCO.
- Consolidated income from operations of $71.6 million decreased 9.1% compared to
$78.7 million. The decrease was
primarily due to higher operating expenses, including increased
personnel costs resulting from more employees supporting
production, engineering and sales activities; elevated professional
fees; and variable compensation, which was partly offset by higher
gross profits. Consolidated operating margin decreased to 14.3%
from 16.6%.
- North America income from
operations of $79.8 million decreased
6.8% compared to $85.6 million. The
decrease was primarily due to higher operating expenses including
personnel costs, professional fees and variable compensation,
partly offset by higher gross profit.
- Europe income from operations
increased from $0.8 million to
$3.1 million, primarily due to higher
gross profit (partly due to the prior year $1.4 million inventory fair-value adjustment as
noted above) and lower acquisition and integration costs.
- The Company's effective income tax rate was 26.3%, consistent
with the prior period quarter.
- Net income was $54.8 million, or
$1.28 per diluted share, compared to
net income of $57.6 million, or
$1.35 per diluted share.
- Cash provided by operating activities was approximately
$31.7 million, a decrease of
$104.7 million from $136.4 million primarily from increases in
working capital.
- Cash used in investing activities was approximately
$39.1 million, an increase of
$14.4 million from $24.7 million primarily due to increased capital
expenditures of $31.3 million
compared to $20.8 million.
2023 Full-Year Financial Highlights
- Consolidated net sales of $2.2
billion increased 4.6% from $2.1
billion, primarily due to the acquisition of ETANCO as well
as the positive effect of $12.7
million in foreign currency translation related mostly to
Europe's currencies strengthening
against the United States
dollar.
- Consolidated gross profit of $1.0
billion increased 10.9% compared to $941.3 million, primarily due to the acquisition
of ETANCO. Consolidated gross margin increased to 47.1% from 44.5%,
primarily due to lower raw material costs. Cost of sales in the
prior year period included a $13.6
million inventory fair-value adjustment as a result of
purchase accounting with respect to the acquisition of ETANCO.
- Consolidated income from operations of $475.1 million increased 3.5% compared to
$459.1 million, primarily due to the
acquisition of ETANCO. Consolidated operating margin decreased to
21.5% from 21.7%.
- The Company's effective income tax rate increased to 25.7% from
25.5%.
- Net income was $354.0 million, or
$8.26 per diluted share, compared to
net income of $334.0 million, or
$7.76 per diluted share.
- Cash provided by operating activities was approximately
$429.9 million, an increase of
$30.1 million from $399.8 million primarily from increases in net
income plus non-cash expense, partly offset by increases in working
capital.
- Cash used in investing activities was approximately
$105.7 million, a decrease of
$764.5 million from $870.2 million. The decrease was primarily due to
the Company's purchase of ETANCO for $805.4
million in 2022. Capital expenditures increased to
$88.8 million from $62.4 million.
- Cash used in financing activities was approximately
$199.4 million, compared to cash
provided of $465.5 million. The
decrease in cash provided by financing activities was mainly from
$700.0 million in loan proceeds to
fund the acquisition of ETANCO in 2022 partly offset by principal
repayments on the Company's Revolving and Term Credit Facility and
repurchases of the Company's common stock during 2023.
Management Commentary
"We achieved above market growth and strong profitability in
2023 with $2.2 billion in annual net
sales, a 21.5% operating income margin and $8.26 of earnings per diluted share," commented
Mike Olosky, President and Chief
Executive Officer of Simpson Manufacturing Co., Inc. "Our topline
performance was driven by continued share gains across all of our
end markets and product lines. While our operating income margin
came in below our October guidance primarily due to additional
costs incurred in pursuit of our strategic growth opportunities, we
believe our recent and future strategic investments will help us
accelerate a compounded annual growth rate of sales volumes above
market over the mid- to long-term. Our ambitions for this
accelerated growth include us exceeding our historical average
volume performance in North
America of approximately 250 basis points above the housing
starts market while also achieving top quartile profitability of
our peer group."
Mr. Olosky continued, "In North America, both our 2023 net sales
and volume were up approximately 1% year-over-year compared to
annual U.S. housing starts which declined by approximately 9%. In
Europe, our 2023 net sales
increased 15.8% year-over-year on a local currency basis due to
having an additional quarter of ETANCO sales in 2023. For the full
year, ETANCO sales were in line with 2022 while the remainder
of the Europe business was down
due to tougher economic headwinds and lower construction
activity."
Mr. Olosky concluded, "While 2023 U.S. housing starts finished
below 2022 levels, we still believe this is an attractive market
given the estimated shortage of approximately 2 million homes in
the U.S. coupled with the modestly improved outlook for 2024. We
continue to see a lot of variability on a month-to-month basis and
continue to believe the market for the first half of the year will
be more challenging than the market for the second half of the
year."
Corporate Developments
- During the fourth quarter of 2023, the Company repurchased
360,746 shares of common stock in the open market at an average
price of $138.60 per share, for a
total of $50.0 million under its
$100 million share repurchase
authorization which expired at the end of 2023.
- On October 19, 2023, the
Company's Board of Directors (the "Board") authorized the Company
to repurchase up to $100.0 million of
the Company's common stock, effective January 1, 2024 through December 31, 2024.
- On January 19, 2024, the Board
declared a quarterly cash dividend of $0.27 per share, estimated to be $11.5 million. The dividend will be payable on
April 25, 2024, to the Company's
stockholders of record on April 4,
2024.
Business Outlook
Based on business trends and conditions as of today,
February 5, 2024, the Company's
outlook for the full fiscal year ending December 31, 2024 is as follows:
- Operating margin is estimated to be in the range of 20.0% to
21.5%.
- Interest expense on the outstanding Revolving Credit Facility
and Term Loans, which had borrowings of $75.0 million and $410.6
million as of December 31,
2023, respectively, is expected to be approximately
$7.9 million, including the benefit
from interest rate and cross currency swaps mitigating
substantially all of the volatility from changes in interest
rates.
- 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 as well
as international income tax rates, and assuming no tax law changes
are enacted.
- Capital expenditures are estimated to be approximately
$200.0 million, which includes
$120.0 million for the Columbus
facility expansion and the new Gallatin fastener facility
construction.
Conference Call Details
Investors, analysts and other interested parties are invited to
join the Company's fourth quarter and full-year 2023 financial
results conference call on Monday, February 5, 2024, at
5:00 p.m. Eastern Time (2:00 p.m. 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=1650316&tp_key=ae8a59eacc or
a link on the Investor Relations section of the Company's website
at https://ir.simpsonmfg.com/events-and-presentations. 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, February 19, 2024, by dialing (844) 512–2921 (U.S.
and Canada) or (412) 317–6671
(International) and entering the conference ID: 13743431. 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 www.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 carbon & glass 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 website on the same day they are filed with the SEC. To
view these filings, visit the Investor Relations section of the
Company's website.
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
Statements of Operations
(In thousands, except
per share data)
|
|
|
Three Months
Ended
December 31,
|
|
Twelve Months
Ended
December 31,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Net sales
|
$ 501,710
|
|
$ 475,622
|
|
$
2,213,803
|
|
$
2,116,087
|
Cost of
sales
|
281,212
|
|
274,967
|
|
1,170,048
|
|
1,174,794
|
Gross
profit
|
220,498
|
|
200,655
|
|
1,043,755
|
|
941,293
|
Operating
expenses:
|
|
|
|
|
|
|
|
Research and
development and engineering expense
|
25,131
|
|
18,461
|
|
92,167
|
|
68,354
|
Selling
expense
|
52,483
|
|
44,929
|
|
203,980
|
|
169,378
|
General and
administrative expense
|
70,836
|
|
55,956
|
|
268,103
|
|
228,468
|
Total operating
expenses
|
148,450
|
|
119,346
|
|
564,250
|
|
466,200
|
Acquisition and
integration related costs
|
546
|
|
2,662
|
|
4,632
|
|
17,343
|
Gain on disposal of
assets
|
(53)
|
|
(90)
|
|
(276)
|
|
(1,317)
|
Income from
operations
|
71,555
|
|
78,737
|
|
475,149
|
|
459,067
|
Interest income
(expense), net and other financing costs
|
3,373
|
|
(1,027)
|
|
3,391
|
|
(7,594)
|
Other & foreign
exchange gain (loss), net
|
(523)
|
|
406
|
|
(1,993)
|
|
(3,408)
|
Income before
taxes
|
74,405
|
|
78,116
|
|
476,547
|
|
448,065
|
Provision for income
taxes
|
19,602
|
|
20,511
|
|
122,560
|
|
114,070
|
Net income
|
$
54,803
|
|
$
57,605
|
|
$ 353,987
|
|
$ 333,995
|
Earnings per common
share:
|
|
|
|
|
|
|
|
Basic
|
$
1.29
|
|
$
1.35
|
|
$
8.31
|
|
$
7.78
|
Diluted
|
$
1.28
|
|
$
1.35
|
|
$
8.26
|
|
$
7.76
|
Weighted average shares
outstanding:
|
|
|
|
|
|
|
|
Basic
|
42,440
|
|
42,572
|
|
42,598
|
|
42,925
|
Diluted
|
42,668
|
|
42,680
|
|
42,837
|
|
43,047
|
Other data:
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
$
20,483
|
|
$
16,369
|
|
$
74,707
|
|
$
60,890
|
Pre-tax equity-based
compensation expense
|
6,070
|
|
1,994
|
|
23,859
|
|
14,980
|
Simpson Manufacturing
Co., Inc. and Subsidiaries
UNAUDITED Consolidated
Condensed Balance Sheets
(In
thousands)
|
|
|
|
|
|
December
31,
|
|
|
|
2023
|
|
2022
|
|
Cash and cash
equivalents
|
|
$
429,822
|
|
$
300,742
|
|
Trade accounts
receivable, net
|
|
283,975
|
|
269,124
|
|
Inventories
|
|
551,575
|
|
556,801
|
|
Other current
assets
|
|
47,069
|
|
52,583
|
|
Total current
assets
|
|
1,312,441
|
|
1,179,250
|
|
Property, plant and
equipment, net
|
|
418,612
|
|
361,555
|
|
Operating lease
right-of-use assets
|
|
68,792
|
|
57,652
|
|
Goodwill
|
|
502,550
|
|
495,672
|
|
Intangible assets,
net
|
|
365,339
|
|
362,917
|
|
Other noncurrent
assets
|
|
36,990
|
|
46,925
|
|
Total assets
|
|
$
2,704,724
|
|
$
2,503,971
|
|
Trade accounts
payable
|
|
$
107,524
|
|
$
97,841
|
|
Long-term debt, current
portion
|
|
22,500
|
|
22,500
|
|
Accrued liabilities and
other current liabilities
|
|
231,233
|
|
228,222
|
|
Total current
liabilities
|
|
361,257
|
|
348,563
|
|
Operating lease
liabilities, net of current portion
|
|
55,324
|
|
46,882
|
|
Long-term debt, net of
current portion and issuance costs
|
|
458,791
|
|
554,539
|
|
Deferred income tax and
other long-term liabilities
|
|
149,606
|
|
140,608
|
|
Stockholders'
equity
|
|
1,679,746
|
|
1,413,379
|
|
Total liabilities and
stockholders' equity
|
|
$
2,704,724
|
|
$
2,503,971
|
|
Simpson Manufacturing
Co., Inc. and Subsidiaries
UNAUDITED Segment and
Product Group Information
(In
thousands)
|
|
|
|
|
Three Months
Ended
|
|
|
|
Twelve Months
Ended
|
|
|
|
|
|
December
31,
|
|
%
|
|
December
31,
|
|
%
|
|
2023
|
|
2022
|
|
change
*
|
|
2023
|
|
2022
|
|
change
*
|
Net Sales by
Reporting Segment
|
|
|
|
|
|
|
|
|
|
|
|
|
North
America
|
$
387,805
|
|
$
368,129
|
|
5.3 %
|
|
$ 1,716,422
|
|
$ 1,701,041
|
|
0.9 %
|
|
Percentage of total
net sales
|
77.3 %
|
|
77.4 %
|
|
|
|
77.5 %
|
|
80.4 %
|
|
|
|
Europe
|
109,682
|
|
103,712
|
|
5.8 %
|
|
480,756
|
|
400,303
|
|
20.1 %
|
|
Percentage of total
net sales
|
21.9 %
|
|
21.8 %
|
|
|
|
21.7 %
|
|
18.9 %
|
|
|
|
Asia/Pacific
|
4,223
|
|
3,781
|
|
11.7 %
|
|
16,625
|
|
14,743
|
|
12.8 %
|
|
Percentage of total
net sales
|
0.8 %
|
|
0.8 %
|
|
|
|
0.8 %
|
|
0.7 %
|
|
|
|
|
Total
|
$
501,710
|
|
$
475,622
|
|
5.5 %
|
|
$ 2,213,803
|
|
$ 2,116,087
|
|
4.6 %
|
Net Sales by Product
Group**
|
|
|
|
|
|
|
|
|
|
|
|
|
Wood
Construction
|
$
420,228
|
|
$
403,527
|
|
4.1 %
|
|
$ 1,881,700
|
|
$ 1,831,580
|
|
2.7 %
|
|
Percentage of total
net sales
|
83.8 %
|
|
84.8 %
|
|
|
|
85.0 %
|
|
86.6 %
|
|
|
|
Concrete
Construction
|
78,369
|
|
71,087
|
|
10.2 %
|
|
320,500
|
|
282,205
|
|
13.6 %
|
|
Percentage of total
net sales
|
15.6 %
|
|
14.9 %
|
|
|
|
14.5 %
|
|
13.3 %
|
|
|
|
Other
|
3,113
|
|
1,008
|
|
N/M
|
|
11,603
|
|
2,302
|
|
N/M
|
|
|
Total
|
$
501,710
|
|
$
475,622
|
|
5.5 %
|
|
$ 2,213,803
|
|
$ 2,116,087
|
|
4.6 %
|
Gross Profit (Loss)
by Reporting Segment
|
|
|
|
|
|
|
|
|
|
|
|
|
North
America
|
$
182,339
|
|
$
165,564
|
|
10.1 %
|
|
$
862,557
|
|
$
810,730
|
|
6.4 %
|
|
North America gross
profit margin
|
47.0 %
|
|
45.0 %
|
|
|
|
50.3 %
|
|
47.7 %
|
|
|
|
Europe
|
37,511
|
|
33,925
|
|
10.6 %
|
|
177,048
|
|
125,616
|
|
40.9 %
|
|
Europe gross profit
margin
|
34.2 %
|
|
32.7 %
|
|
|
|
36.8 %
|
|
31.4 %
|
|
|
|
Asia/Pacific
|
1,164
|
|
961
|
|
N/M
|
|
5,679
|
|
4,910
|
|
N/M
|
|
Administrative and all
other
|
(516)
|
|
205
|
|
N/M
|
|
(1,529)
|
|
37
|
|
N/M
|
|
|
Total
|
$
220,498
|
|
$
200,655
|
|
9.9 %
|
|
$ 1,043,755
|
|
$
941,293
|
|
10.9 %
|
Income (Loss) from
Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
North
America
|
$ 79,773
|
|
$ 85,564
|
|
(6.8) %
|
|
$
473,229
|
|
$
485,899
|
|
(2.6) %
|
|
North America
operating profit margin
|
20.6 %
|
|
23.2 %
|
|
|
|
27.6 %
|
|
28.6 %
|
|
|
|
Europe
|
3,103
|
|
783
|
|
N/M
|
|
45,998
|
|
11,121
|
|
N/M
|
|
Europe operating
profit margin
|
2.8 %
|
|
0.8 %
|
|
|
|
9.6 %
|
|
2.8 %
|
|
|
|
Asia/Pacific
|
(183)
|
|
(175)
|
|
N/M
|
|
535
|
|
723
|
|
N/M
|
|
Administrative and all
other
|
(11,138)
|
|
(7,435)
|
|
N/M
|
|
(44,613)
|
|
(38,676)
|
|
N/M
|
|
|
Total
|
$ 71,555
|
|
$ 78,737
|
|
(9.1) %
|
|
$
475,149
|
|
$
459,067
|
|
3.5 %
|
|
|
|
|
*
|
Unfavorable percentage
changes are presented in parentheses.
|
|
**
|
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.