PLEASANTON, Calif.,
Feb. 7, 2022 /PRNewswire/ --
- Fourth quarter net sales of $418.6
million increased 42.4% year-over-year
- Fourth quarter net income per diluted share of $1.61 increased 136.8% year-over-year
- Declared a $0.25 per share
cash dividend
- 2021 net sales of $1.57
billion increased 24.1% year-over-year
- 2021 net income per diluted share of $6.12 increased 43.3% year-over-year
- Announced agreement to acquire European building products
supplier solutions company Etanco Group for $818 million(1) (€725
million).
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 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
December 31, 2021 with the quarter ended December 31,
2020 or the fiscal year ended December 31,
2021 with the fiscal year ended December 31, 2020.
2021 Fourth Quarter Financial Highlights
- Consolidated net sales of $418.6
million increased 42.4% from $293.9
million.
-
- North America net sales of
$373.2 million increased 49.8% from
$249.1 million, primarily due to
product price increases throughout 2021 in an effort to offset
rising material costs as well as higher sales volumes. Canada's net sales increased primarily due to
higher sales volumes and were positively impacted by foreign
currency translation.
- Europe net sales of
$41.4 million decreased 1.0% from
$41.8 million due to the negative
effect of approximately $1.0 million
in foreign currency translation, while in local currencies,
Europe net sales increased
slightly.
- Consolidated gross profit of $198.3
million increased 60.3% compared to $123.7 million. Consolidated gross margin
increased to 47.4% from 42.1%.
-
- North America gross margin
increased to 49.3% from 43.2%, primarily due to the aforementioned
product price increases, partly offset by an increase in material
costs as a percentage of net sales.
- Europe gross margin decreased
to 31.2% from 35.3%, primarily due to higher material, labor and
factory & tooling costs as a percentage of net sales.
- Consolidated income from operations of $97.1 million increased 146.0% compared to
$39.5 million. The increase was
primarily due to the increase in consolidated gross profit, partly
offset by higher operating expenses including cash profit sharing,
sales commissions and stock-based compensation expense resulting
from favorable operating performance in the fourth
quarter. Consolidated operating margin increased to 23.2%
from 13.4%.
-
- North America income from
operations of $97.7 million increased
170.4% compared to $36.1 million. The
increase was primarily due to higher gross profit, partly offset by
higher operating expenses including cash profit sharing, sales
commissions and stock-based compensation, primarily for favorable
operating performance.
- Europe reported a loss from
operations of $1.5 million compared
to income from operations of $1.3
million, primarily due to lower gross profit.
- The Company's effective income tax rate decreased to 25.0% from
25.6% primarily due to the release of foreign valuation allowances
in 2021.
- Interest income (expense), net and other, includes professional
fees of $2.3 million associated with
the Etanco transaction.
- Net income was $69.8 million, or
$1.61 per diluted share, compared to
net income of $29.6 million, or
$0.68 per diluted share.
- Cash flow provided by operating activities decreased
approximately $48.8 million from
$78.0 million to $29.2 million primarily from increases in working
capital offset by the increase in net income.
- Cash flow used in investing activities decreased approximately
$0.7 million to $17.6 million from $18.3 million primarily due to higher
acquisitions of intangible assets offset by lower capital
expenditures. Capital expenditures were $12.5 million compared to $17.0 million.
2021 Full-Year Financial Highlights
- Consolidated net sales of $1.57
billion increased 24.1% from $1.27
billion, primarily due to product price increases that took
effect throughout 2021 in an effort to offset rising material costs
as well as higher sales volumes. Consolidated net sales were
positively affected by approximately $14.2
million in foreign currency translation related mostly to
Europe's and Canada's currencies strengthening against
the United States dollar.
- Consolidated gross profit of $755.0
million increased 31.0% compared to $576.4 million. Consolidated gross margin
increased to 48.0% from 45.5%, primarily due to the aforementioned
product price increases partially offset by an increase in material
costs.
- Consolidated income from operations of $367.8 million increased 45.7% compared to
$252.4 million. The increase was
primarily due to higher gross profit, partly offset by higher
operating expenses including cash profit sharing, sales commissions
and stock-based compensation as a result of favorable operating
performance. Consolidated operating margin increased to 23.4% from
19.9%.
- The Company's effective income tax rate increased to 25.7% from
25.1% primarily due to a decrease in tax benefits associated with
stock-based compensation.
- Net income was $266.4 million, or
$6.12 per diluted share, compared to
net income of $187.0 million, or
$4.27 per diluted share.
- Cash flow provided by operating activities decreased
$56.3 million from $207.6 million to $151.3
million primarily from increases in working capital offset
by the increase in net income.
- Cash flow used in investing activities increased approximately
$19.0 million to $58.8 million from $39.9
million. Capital expenditures increased to $43.7 million from $37.9
million.
Management Commentary
"I'm extremely pleased with our financial and operational
performance in 2021," commented Karen
Colonias, Chief Executive Officer of Simpson Manufacturing
Co., Inc. "Despite the challenging macroeconomic landscape
resulting from ongoing global supply chain constraints, increasing
steel costs and availability as well as a tight labor market, we
continued to deliver on the key elements of our business model to
meet our customers' needs. As a result, we generated strong
full-year net sales of $1.57 billion
and earnings of $6.12 per diluted
share with sales growth supported by the implementation of four
price increases throughout the year in an effort to offset rising
steel costs. Our sales were further supported by mild winter
weather conditions and higher sales volumes throughout our various
distribution channels, including increased sales in Europe due in part to foreign exchange, price
and volume increases."
Ms. Colonias continued, "We remain on track to achieve our
Company ambitions and strategic growth initiatives by 2025 after
making solid traction throughout the year on expansion into five
key markets – OEM, R&R/DIY, mass timber, concrete and
structural steel. In late December, we announced another growth
driver for Simpson, the acquisition of Etanco Group, a leading
designer, manufacturer and distributor of fixing and fastening
solutions for the building construction market throughout
Europe. Etanco's business model
and core product offering align perfectly with Simpson and will
support growth in our European business, including expansion into
new geographies, sales channels and commercial building
offerings."
Corporate Developments
- On November 18, 2021, 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,
2022 through December 31,
2022.
- On January 20, 2022, the
Company's Board of Directors declared a quarterly cash dividend of
$0.25 per share. The dividend will be
payable on April 28, 2022 to the
stockholders of record as of April 7,
2022.
- Effective January 20, 2022,
Mike Olosky, the Company's Chief
Operating Officer ("COO") was promoted to President and COO.
Karen Colonias, who previously
served as the Company's President and Chief Executive Officer
("CEO") will continue to serve as CEO.
- On January 26, 2022, the Company signed a securities
purchase agreement to acquire Etanco Group for a purchase price of
$818 million(1) (€725
million). The acquisition is expected to close on April 1, 2022.
Business Outlook
Based on business trends and conditions as of today,
February 7, 2022, the Company's
outlook (excluding Etanco) for the full fiscal year ending
December 31, 2022 is as follows:
- Operating margin is estimated to be in the range of 17.5% to
19.0%.
- The effective tax rate is estimated to be in the range of 25.5%
to 26.5%, 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
$65 million to $70 million.
While the magnitude and duration of the COVID-19 pandemic and
its impact on general economic conditions remain uncertain, the
Company continues to monitor the impact of the pandemic on its
operations and financial condition, which was not significantly
adversely impacted in fiscal 2021. Please note that ongoing
uncertainties surrounding the impact of the COVID-19 pandemic 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 and full-year 2021 financial
results conference call on Monday, February 7, 2022, 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=1523870&tp_key=8aafef848d
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 21, 2022, by dialing (844)
512–2921 (U.S. and Canada) or
(412) 317–6671 (International) and entering the conference ID:
13726283. 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'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 SE. 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 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 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 consummation of the acquisition of Etanco Group
and the timing thereof, 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, 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, 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. 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 risks 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., 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.
Footnotes
(1) Reflects EUR to USD exchange rate based on
binding offer agreed upon as of December 22,
2021.
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,
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Net sales
|
$
418,556
|
|
$
293,897
|
|
$
1,573,217
|
|
$
1,267,945
|
Cost of
sales
|
220,286
|
|
170,222
|
|
818,187
|
|
691,561
|
Gross
profit
|
198,270
|
|
123,675
|
|
755,030
|
|
576,384
|
Operating
expenses:
|
|
|
|
|
|
|
|
Research and
development and engineering expense
|
16,060
|
|
12,947
|
|
59,381
|
|
50,807
|
Selling
expense
|
35,951
|
|
27,760
|
|
135,004
|
|
112,517
|
General and
administrative expense
|
49,409
|
|
43,633
|
|
193,176
|
|
161,029
|
Total operating
expenses
|
101,420
|
|
84,340
|
|
387,561
|
|
324,353
|
Gain on disposal of
assets
|
(212)
|
|
(123)
|
|
(324)
|
|
(332)
|
Income from
operations
|
97,062
|
|
39,458
|
|
367,793
|
|
252,363
|
Interest income
(expense), net and other
|
(3,984)
|
|
403
|
|
(9,244)
|
|
(2,799)
|
Income before
taxes
|
93,078
|
|
39,861
|
|
358,549
|
|
249,564
|
Provision for income
taxes
|
23,280
|
|
10,223
|
|
92,102
|
|
62,564
|
Net income
|
$
69,798
|
|
$
29,638
|
|
$
266,447
|
|
$
187,000
|
Earnings per common
share:
|
|
|
|
|
|
|
|
Basic
|
$
1.62
|
|
$
0.68
|
|
$
6.15
|
|
$
4.28
|
Diluted
|
$
1.61
|
|
$
0.68
|
|
$
6.12
|
|
$
4.27
|
Weighted average
shares outstanding:
|
|
|
|
|
|
|
|
Basic
|
43,218
|
|
43,501
|
|
43,325
|
|
43,709
|
Diluted
|
43,437
|
|
43,647
|
|
43,532
|
|
43,841
|
Other
data:
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
$
9,285
|
|
$
8,679
|
|
$
42,477
|
|
$
38,767
|
Pre-tax equity-based
compensation expense
|
4,324
|
|
4,047
|
|
17,715
|
|
13,506
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Simpson Manufacturing
Co., Inc. and Subsidiaries
|
UNAUDITED
Consolidated Condensed Balance Sheets
|
(In
thousands)
|
|
|
|
December
31,
|
|
|
|
2021
|
|
2020
|
|
Cash and short-term
investments
|
|
$
301,155
|
|
$
274,639
|
|
Trade accounts
receivable, net
|
|
231,021
|
|
165,128
|
|
Inventories
|
|
443,756
|
|
283,742
|
|
Other current
assets
|
|
22,903
|
|
29,630
|
|
Total current
assets
|
|
998,835
|
|
753,139
|
|
Property, plant and
equipment, net
|
|
259,869
|
|
255,184
|
|
Operating lease
right-of-use assets
|
|
45,438
|
|
45,792
|
|
Goodwill
|
|
134,022
|
|
135,844
|
|
Other noncurrent
assets
|
|
45,961
|
|
42,610
|
|
Total
assets
|
|
$
1,484,125
|
|
$
1,232,569
|
|
Trade accounts
payable
|
|
$
57,215
|
|
$
48,271
|
|
Other current
liabilities
|
|
187,387
|
|
145,790
|
|
Total current
liabilities
|
|
244,602
|
|
194,061
|
|
Operating lease
liabilities, net of current portion
|
|
37,091
|
|
37,199
|
|
Deferred income tax
and other long-term liabilities
|
|
18,434
|
|
20,366
|
|
Stockholders'
equity
|
|
1,183,998
|
|
980,943
|
|
Total liabilities and
stockholders' equity
|
|
$
1,484,125
|
|
$
1,232,569
|
|
|
|
|
Three Months
Ended
|
|
|
|
Twelve Months
Ended
|
|
|
|
|
|
December
31,
|
|
%
|
|
December
31,
|
|
%
|
|
2021
|
|
2020
|
|
change
*
|
|
2021
|
|
2020
|
|
change
*
|
Net Sales by
Reporting Segment
|
|
|
|
|
|
|
|
|
|
|
|
|
North
America
|
$
|
373,230
|
|
$
|
249,131
|
|
49.8%
|
|
$
|
1,362,941
|
|
$
|
1,101,891
|
|
23.7%
|
|
Percentage of total
net sales
|
89.2%
|
|
84.8%
|
|
|
|
86.6%
|
|
86.9%
|
|
|
|
Europe
|
41,429
|
|
41,836
|
|
(1.0)%
|
|
196,996
|
|
156,713
|
|
25.7%
|
|
Percentage of total
net sales
|
9.9%
|
|
14.2%
|
|
|
|
12.5%
|
|
12.4%
|
|
|
|
Asia/Pacific
|
3,897
|
|
2,930
|
|
33.0%
|
|
13,280
|
|
9,341
|
|
42.2%
|
|
Percentage of total
net sales
|
0.9%
|
|
1.0%
|
|
|
|
0.8%
|
|
0.7%
|
|
|
|
|
Total
|
$
|
418,556
|
|
$
|
293,897
|
|
42.4%
|
|
$
|
1,573,217
|
|
$
|
1,267,945
|
|
24.1%
|
Net Sales by
Product Group**
|
|
|
|
|
|
|
|
|
|
|
|
|
Wood
Construction
|
$
|
364,852
|
|
$
|
248,366
|
|
46.9%
|
|
$
|
1,361,113
|
|
$
|
1,082,877
|
|
25.7%
|
|
Percentage of total
net sales
|
87.2%
|
|
84.5%
|
|
|
|
86.5%
|
|
85.4%
|
|
|
|
Concrete
Construction
|
53,363
|
|
45,332
|
|
17.7%
|
|
210,780
|
|
184,631
|
|
14.2%
|
|
Percentage of total
net sales
|
12.7%
|
|
15.4%
|
|
|
|
13.4%
|
|
14.6%
|
|
|
|
Other
|
342
|
|
199
|
|
N/M
|
|
1,324
|
|
437
|
|
N/M
|
|
|
Total
|
$
|
418,556
|
|
$
|
293,897
|
|
42.4%
|
|
$
|
1,573,217
|
|
$
|
1,267,945
|
|
24.1%
|
Gross Profit by
Reporting Segment
|
|
|
|
|
|
|
|
|
|
|
|
|
North
America
|
$
|
184,067
|
|
$
|
107,517
|
|
71.2%
|
|
$
|
681,137
|
|
$
|
517,380
|
|
31.7%
|
|
North America gross
profit margin
|
49.3%
|
|
43.2%
|
|
|
|
50.0%
|
|
47.0%
|
|
|
|
Europe
|
12,935
|
|
14,754
|
|
(12.3)%
|
|
69,164
|
|
55,541
|
|
24.5%
|
|
Europe gross profit
margin
|
31.2%
|
|
35.3%
|
|
|
|
35.1%
|
|
35.3%
|
|
|
|
Asia/Pacific
|
1,312
|
|
1,450
|
|
N/M
|
|
4,902
|
|
3,477
|
|
N/M
|
|
Administrative and
all other
|
(44)
|
|
(46)
|
|
N/M
|
|
(172)
|
|
(14)
|
|
N/M
|
|
|
Total
|
$
|
198,270
|
|
$
|
123,675
|
|
60.3%
|
|
$
|
755,030
|
|
$
|
576,384
|
|
31.0%
|
Income (Loss) from
Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
North
America
|
$
|
97,653
|
|
$
|
36,117
|
|
170.4%
|
|
$
|
359,140
|
|
$
|
249,252
|
|
44.1%
|
|
North America
operating profit margin
|
26.2%
|
|
14.5%
|
|
|
|
26.4%
|
|
22.6%
|
|
|
|
Europe
|
(1,522)
|
|
1,296
|
|
217.4%
|
|
14,160
|
|
8,396
|
|
68.7%
|
|
Europe operating
profit (loss) margin
|
(3.7)%
|
|
3.1%
|
|
|
|
7.2%
|
|
5.4%
|
|
|
|
Asia/Pacific
|
252
|
|
468
|
|
N/M
|
|
1,193
|
|
308
|
|
N/M
|
|
Administrative and
all other
|
679
|
|
1,577
|
|
N/M
|
|
(6,699)
|
|
(5,593)
|
|
N/M
|
|
|
Total
|
$
|
97,062
|
|
$
|
39,458
|
|
146.0%
|
|
$
|
367,793
|
|
$
|
252,363
|
|
45.7%
|
|
|
|
|
*
|
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.