PLEASANTON, Calif.,
Feb. 8, 2021 /PRNewswire/ --
- Fourth quarter net sales of $293.9
million increased 12.0% year-over-year
- Fourth quarter net income per diluted common share of
$0.68 increased 7.9%
year-over-year
- Declared a $0.23 per share
cash dividend
- 2020 net sales of $1.27
billion increased 11.6% year-over-year
- 2020 net income per diluted common share of $4.27 increased 43.3% year-over-year
- Returned $116.2 million to
stockholders in 2020 through repurchases of the Company's common
stock and dividends
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 2020. 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, 2020 with the quarter ended December 31,
2019 or the fiscal year ended December 31,
2020 with the fiscal year ended December 31, 2019.
2020 Fourth Quarter Financial Highlights
- Consolidated net sales of $293.9
million increased 12.0% from $262.5
million.
-
- North America net sales of
$249.1 million increased 9.8% from
$226.8 million due to higher sales
volumes to the home center channel, primarily due to the return of
a home center customer and increased demand from new housing starts
and repair and remodel activity. Canada's net sales increased primarily due to
higher sales volumes in local currency and were slightly impacted
by positive foreign currency translation.
- Europe net sales of
$41.8 million increased 24.9% from
$33.5 million due to higher sales
volumes in local currency and were positively affected by
approximately $2.5 million in foreign
currency translation related to Europe's currencies strengthening against
the United States dollar.
- Consolidated gross profit of $123.7
million increased 12.4% compared to $110.1 million. Consolidated gross profit as a
percentage of consolidated net sales increased to 42.1% from
41.9%.
-
- North America gross profit
margin decreased to 43.2% from 43.9%, primarily due to higher
factory and overhead, warehouse and shipping costs, each as a
percentage of net sales, which were partly offset by a decrease in
material costs as a percentage of net sales.
- Europe gross profit margin
increased to 35.3% from 29.9%, primarily due to lower material and
warehouse costs, partly offset by higher labor costs, each as a
percentage of net sales.
- Consolidated income from operations of $39.5 million increased 7.8% compared to
$36.6 million. The increase was
primarily due to the increase in consolidated gross profit, partly
offset by higher operating expenses including cash profit sharing
and stock-based compensation expense resulting from favorable
operating performance in the fourth quarter. Additionally,
consolidated income from operations for 2019 included a
$5.6 million gain on the sale of a
selling and distribution facility, which contributed to the
consolidated operating margins decreasing to 13.4% from 13.9%.
-
- North America income from
operations of $36.1 million decreased
1.8% compared to $36.8 million.
Income from operations for 2019 included the $5.6 million gain on the sale of a selling and
distribution facility noted above.
- Europe income from operations
of $1.3 million increased 145.8%
compared to a loss of $2.8 million,
primarily due to the increase in gross profit, partly offset by
increased cash profit sharing expense.
- The Company's effective income tax rate increased to 25.6% from
22.3% due to the release of foreign valuation allowances in
2019.
- Net income was $29.6 million, or
$0.68 per diluted share of the
Company's common stock, compared to net income of $28.1 million, or $0.63 per diluted share.
- Cash flow provided by operating activities increased
approximately $21.1 million to
$77.5 million from $56.4 million.
- Cash flow used in investing activities increased approximately
$15.8 million to $18.3 million from $2.5
million primarily due to higher proceeds on sale of property
and equipment in 2019 including sale of a selling and distribution
facility. Capital expenditures were $17.0
million compared to $8.2
million.
2020 Full-Year Financial Highlights
- Consolidated net sales of $1.27
billion increased 11.6% from $1.14
billion, primarily due to higher sales volumes and were
positively affected by approximately $1.5
million in foreign currency translation related mostly to
Europe's currencies strengthening
against the United States
dollar.
- Consolidated gross profit of $576.4
million increased 17.1% compared to $492.1 million. Consolidated gross profit as a
percentage of consolidated net sales increased to 45.5% from 43.3%,
primarily due to lower material costs.
- Consolidated income from operations of $252.4 million increased 39.2% compared to
$181.3 million. The increase was
primarily due to higher gross profit, partly offset by higher
operating expenses including cash profit sharing and stock-based
compensation, primarily for favorable operating performance.
- The Company's effective income tax rate increased to 25.1% from
24.9%.
- Net income was $187.0 million, or
$4.27 per diluted share of the
Company's common stock, compared to net income of $134.0 million, or $2.98 per diluted share.
- Cash flow provided by operating activities increased almost
$1.5 million to $207.1 million from $205.7
million.
- Cash flow used in investing activities increased approximately
$11.9 million to $39.9 million from $28.0
million. Capital expenditures decreased slightly to
$32.6 million from $32.7 million.
Management Commentary
"I'm extremely pleased with our strong financial and operational
performance in 2020, which we delivered in a highly challenging
operating environment amidst the COVID-19 pandemic," commented
Karen Colonias, President and Chief
Executive Officer of Simpson Manufacturing Co., Inc. "Our net sales
improved 11.6% over 2019 to $1.27
billion, the highest in our Company's history, driven by
strong sales volume. As a result, we generated record earnings of
$4.27 per diluted share, up 43.3%
over 2019. These results would not have been possible without the
hard work and dedication of our employees. Their diligence,
including strict adherence to protocols to help minimize the spread
of COVID-19, has enabled us to continue operating our business with
minimal disruptions from the pandemic."
Mrs. Colonias continued, "Our record 2020 results were further
supported by our commitment to position Simpson for long-term
sustainable and increasingly profitable growth. In October of 2017,
we unveiled a three year 2020 Plan with aggressive targets to
maximize our operating efficiencies and drive long term stockholder
value. While we elected to withdraw these financial targets in
April 2020 due to the significant
level of uncertainty surrounding the impact of COVID-19, we
continued to execute based on the same underlying principles,
focusing on operating efficiencies and cost savings to guide us
through the COVID-19 pandemic. At the same time, we also
experienced certain tailwinds in our business as a result of
COVID-19 related macro-economic conditions; namely, favorable steel
prices, temporary reductions in travel and related operating
expenses and an increase in repair and remodel activity. Due
to the culmination of these factors we were able to meet or exceed
nearly all of our ambitious 2020 Plan objectives. We are very proud
of this achievement."
Mrs. Colonias concluded, "Our success in executing the 2020 Plan
has created a strong foundation for Simpson. We have achieved solid
organic growth, rationalized our cost structure to improve
company-wide profitability and improved our working capital
management and balance sheet position, in turn, creating value for
all key Simpson stakeholders."
Corporate Developments
- During the quarter, the Company repaid the remaining
$75 million borrowed from its
$300 million revolving credit
facility.
- On January 22, 2021, the
Company's Board of Directors declared a quarterly cash dividend of
$0.23 per share. The dividend will be
payable on April 22, 2021 to the
stockholders of record as of April 1,
2021.
- On December 16, 2020, the
Company's Board of Directors authorized the Company to repurchase
up to $100.0 million of the Company's
common stock effective January 1,
2021 through December 31,
2021.
- During the quarter, the Company repurchased 150,974 shares of
the Company's common stock in the open market at an average price
of $89.49 per share, for a total of
$13.5 million. For the fiscal year
ended December 31, 2020, an aggregate
of 1,053,314 shares of the Company's common stock were repurchased
on the open market at an average price of $72.33 per share, for a total of $76.2 million of the 2020 share repurchase
authorization of $100 million.
Business Outlook
Based on business trends and conditions as of today,
February 8, 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 16.5% to
18.5%.
- 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
$50 million to $55 million.
While the magnitude and duration of the COVID-19 pandemic and
its impact on general economic conditions remains uncertain, the
Company is continuing to monitor the impact of the outbreak on its
operations and financial condition, which was not significantly
adversely impacted in fiscal 2020. Please note that ongoing
uncertainties surrounding the impact of COVID-19 on the Company's
business, which may include the economic impact on its operations,
raw material costs, consumers, suppliers, vendors, and other
factors outside of its control, may have a material adverse impact
on the Company's financial outlook.
Conference Call Details
Investors, analysts and other interested parties are invited to
join the Company's fourth quarter 2020 financial results conference
call on Monday, February 8, 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/player/index.php?id=143082 or a link on
the Company's website at www.simpsonmfg.com/financials/events.html.
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 22, 2021, by dialing (844)
512–2921 (U.S. and Canada) or
(412) 317–6671 (International) and entering the conference ID:
13715193. 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 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.
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 COVID-19 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. Risk Factors in our Form 10-Qs for
the quarters ended March 31, 2020,
June 30, 2020, and September 30, 2020, and subsequent filings with
the SEC. To the extent that COVID-19 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
December 31,
|
|
Twelve Months
Ended
December 31,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Net sales
|
$
|
293,897
|
|
|
$
|
262,510
|
|
|
$
|
1,267,945
|
|
|
$
|
1,136,539
|
|
Cost of
sales
|
170,222
|
|
|
152,457
|
|
|
691,561
|
|
|
644,409
|
|
Gross
profit
|
123,675
|
|
|
110,053
|
|
|
576,384
|
|
|
492,130
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
Research and
development and engineering expense
|
12,947
|
|
|
11,771
|
|
|
50,807
|
|
|
47,058
|
|
Selling
expense
|
27,760
|
|
|
28,097
|
|
|
112,517
|
|
|
112,568
|
|
General and
administrative expense
|
43,633
|
|
|
39,333
|
|
|
161,029
|
|
|
157,274
|
|
Total operating
expenses
|
84,340
|
|
|
79,201
|
|
|
324,353
|
|
|
316,900
|
|
Gain on disposal of
assets
|
(123)
|
|
|
(5,759)
|
|
|
(332)
|
|
|
(6,024)
|
|
Income from
operations
|
39,458
|
|
|
36,611
|
|
|
252,363
|
|
|
181,254
|
|
Interest income
(expense), net and other
|
403
|
|
|
(503)
|
|
|
(2,799)
|
|
|
(2,897)
|
|
Income before
taxes
|
39,861
|
|
|
36,108
|
|
|
249,564
|
|
|
178,357
|
|
Provision for income
taxes
|
10,223
|
|
|
8,051
|
|
|
62,564
|
|
|
44,375
|
|
Net income
|
$
|
29,638
|
|
|
$
|
28,057
|
|
|
$
|
187,000
|
|
|
$
|
133,982
|
|
Earnings per common
share:
|
|
|
|
|
|
|
|
Basic
|
$
|
0.68
|
|
|
$
|
0.63
|
|
|
$
|
4.28
|
|
|
$
|
3.00
|
|
Diluted
|
$
|
0.68
|
|
|
$
|
0.63
|
|
|
$
|
4.27
|
|
|
$
|
2.98
|
|
Weighted average
shares outstanding:
|
|
|
|
|
|
|
|
Basic
|
43,501
|
|
|
44,466
|
|
|
43,709
|
|
|
44,735
|
|
Diluted
|
43,647
|
|
|
44,684
|
|
|
43,841
|
|
|
44,921
|
|
Other
data:
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
$
|
8,679
|
|
|
$
|
9,358
|
|
|
$
|
38,767
|
|
|
$
|
38,402
|
|
Pre-tax equity-based
compensation expense
|
4,047
|
|
|
1,735
|
|
|
13,506
|
|
|
10,434
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Simpson Manufacturing
Co., Inc. and Subsidiaries
UNAUDITED Consolidated Condensed Balance Sheets
(In thousands)
|
|
|
|
December
31,
|
|
|
|
2020
|
|
2019
|
|
Cash and short-term
investments
|
|
$
|
274,639
|
|
|
$
|
230,210
|
|
|
Trade accounts
receivable, net
|
|
165,128
|
|
|
139,364
|
|
|
Inventories
|
|
283,742
|
|
|
251,907
|
|
|
Other current
assets
|
|
29,630
|
|
|
19,426
|
|
|
Total current
assets
|
|
753,139
|
|
|
640,907
|
|
|
Property, plant and
equipment, net
|
|
255,184
|
|
|
249,012
|
|
|
Operating lease
right-of-use assets
|
|
45,792
|
|
|
35,436
|
|
|
Goodwill
|
|
135,844
|
|
|
131,879
|
|
|
Other noncurrent
assets
|
|
42,610
|
|
|
38,132
|
|
|
Total
assets
|
|
$
|
1,232,569
|
|
|
$
|
1,095,366
|
|
|
Trade accounts
payable
|
|
$
|
48,271
|
|
|
$
|
33,351
|
|
|
Other current
liabilities
|
|
145,790
|
|
|
125,556
|
|
|
Total current
liabilities
|
|
194,061
|
|
|
158,907
|
|
|
Operating lease
liabilities, net of current portion
|
|
37,199
|
|
|
27,930
|
|
|
Deferred income tax
and other long-term liabilities
|
|
20,366
|
|
|
16,572
|
|
|
Stockholders'
equity
|
|
980,943
|
|
|
891,957
|
|
|
Total liabilities and
stockholders' equity
|
|
$
|
1,232,569
|
|
|
$
|
1,095,366
|
|
|
Simpson Manufacturing
Co., Inc. and Subsidiaries
UNAUDITED Segment and Product Group Information
(In thousands)
|
|
|
|
|
Three Months
Ended
|
|
|
|
Twelve Months
Ended
|
|
|
|
|
|
December
31,
|
|
%
|
|
December
31,
|
|
%
|
|
2020
|
|
2019
|
|
change
*
|
|
2020
|
|
2019
|
|
change
*
|
Net Sales by
Reporting Segment
|
|
|
|
|
|
|
|
|
|
|
|
|
North
America
|
$
|
249,131
|
|
|
$
|
226,840
|
|
|
9.8%
|
|
$
|
1,101,891
|
|
|
$
|
972,849
|
|
|
13.3%
|
|
Percentage of total
net sales
|
84.8
|
%
|
|
86.4
|
%
|
|
|
|
86.9
|
%
|
|
85.6
|
%
|
|
|
|
Europe
|
41,836
|
|
|
33,497
|
|
|
24.9%
|
|
156,713
|
|
|
155,144
|
|
|
1.0%
|
|
Percentage of total
net sales
|
14.2
|
%
|
|
12.8
|
%
|
|
|
|
12.4
|
%
|
|
13.7
|
%
|
|
|
|
Asia/Pacific
|
2,930
|
|
|
2,173
|
|
|
34.8%
|
|
9,341
|
|
|
8,546
|
|
|
9.3%
|
|
Percentage of total
net sales
|
1.0
|
%
|
|
0.8
|
%
|
|
|
|
0.7
|
%
|
|
0.8
|
%
|
|
|
|
|
Total
|
$
|
293,897
|
|
|
$
|
262,510
|
|
|
12.0%
|
|
$
|
1,267,945
|
|
|
$
|
1,136,539
|
|
|
11.6%
|
Net Sales by
Product Group**
|
|
|
|
|
|
|
|
|
|
|
|
|
Wood
Construction
|
$
|
248,365
|
|
|
$
|
216,870
|
|
|
15%
|
|
$
|
1,082,577
|
|
|
$
|
948,768
|
|
|
14%
|
|
Percentage of total
net sales
|
85
|
%
|
|
83
|
%
|
|
|
|
85
|
%
|
|
84
|
%
|
|
|
|
Concrete
Construction
|
45,332
|
|
|
45,578
|
|
|
(1)%
|
|
184,631
|
|
|
187,462
|
|
|
(2)%
|
|
Percentage of total
net sales
|
15
|
%
|
|
17
|
%
|
|
|
|
15
|
%
|
|
16
|
%
|
|
|
|
Other
|
199
|
|
|
62
|
|
|
N/M
|
|
437
|
|
|
309
|
|
|
N/M
|
|
|
Total
|
$
|
293,897
|
|
|
$
|
262,510
|
|
|
12%
|
|
$
|
1,267,945
|
|
|
$
|
1,136,539
|
|
|
12%
|
Gross Profit by
Reporting Segment
|
|
|
|
|
|
|
|
|
|
|
|
|
North
America
|
$
|
107,517
|
|
|
$
|
99,487
|
|
|
8.1%
|
|
$
|
517,380
|
|
|
$
|
435,738
|
|
|
18.7%
|
|
North America gross
profit margin
|
43.2
|
%
|
|
43.9
|
%
|
|
|
|
47.0
|
%
|
|
44.8
|
%
|
|
|
|
Europe
|
14,754
|
|
|
10,006
|
|
|
47.5%
|
|
55,541
|
|
|
53,906
|
|
|
3.0%
|
|
Europe gross profit
margin
|
35.3
|
%
|
|
29.9
|
%
|
|
|
|
35.4
|
%
|
|
35.3
|
%
|
|
|
|
Asia/Pacific
|
1,450
|
|
|
768
|
|
|
N/M
|
|
3,477
|
|
|
2,692
|
|
|
N/M
|
|
Administrative and
all other
|
(46)
|
|
|
(208)
|
|
|
N/M
|
|
(14)
|
|
|
(206)
|
|
|
N/M
|
|
|
Total
|
$
|
123,675
|
|
|
$
|
110,053
|
|
|
12.4%
|
|
$
|
576,384
|
|
|
$
|
492,130
|
|
|
17.1%
|
Income (Loss) from
Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
North
America
|
$
|
36,117
|
|
|
$
|
36,783
|
|
|
(1.8)%
|
|
$
|
249,252
|
|
|
$
|
176,329
|
|
|
41.4%
|
|
North America
operating profit margin
|
14.5
|
%
|
|
16.2
|
%
|
|
|
|
22.6
|
%
|
|
18.1
|
%
|
|
|
|
Europe
|
1,296
|
|
|
(2,827)
|
|
|
145.8%
|
|
8,396
|
|
|
6,817
|
|
|
23.2%
|
|
Europe operating
profit (loss) margin
|
3.1
|
%
|
|
(8.4)
|
%
|
|
|
|
5.4
|
%
|
|
4.4
|
%
|
|
|
|
Asia/Pacific
|
468
|
|
|
105
|
|
|
N/M
|
|
308
|
|
|
(731)
|
|
|
N/M
|
|
Administrative and
all other
|
1,577
|
|
|
2,550
|
|
|
N/M
|
|
(5,593)
|
|
|
(1,161)
|
|
|
N/M
|
|
|
Total
|
$
|
39,458
|
|
|
$
|
36,611
|
|
|
7.8%
|
|
$
|
252,363
|
|
|
$
|
181,254
|
|
|
39.2%
|
|
|
|
|
*
|
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.