PLEASANTON, Calif., April 25,
2022 /PRNewswire/ --
- Net sales of $493.6 million
increased 42.0% year-over-year
- Gross margin of 48.0% increased from 46.7% in the prior year
period
- Income from operations of $124.4
million increased 82.0% year-over-year; operating margin of
25.2% increased from 19.7% in the prior year period
- Diluted earnings per share of $2.18 increased 87.9% year-over-year
- Repurchased $21.3 million of
the Company's common stock during the quarter
- Closed the acquisition of the ETANCO Group on April 1, 2022
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 first
quarter of 2022. 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).
The Company changed its presentation of its North America and Administrative and all other
segment statement of operations to display allocated expenses and
management fees as a separate item below income from operations.
Allocated expenses and management fees between the two segments
were previously included in operating expenses and in income from
operations. Income from operations for the North America and Administrative and all other
segments for the quarter ended March 31,
2022 presented below was not affected by the change in
presentation. Consolidated income from operations, income before
tax and net income for the quarters ended March 31, 2022 and March
31, 2021 presented below were not affected by the change in
presentation.
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
March 31, 2022 with the quarter ended March 31, 2021 and
do not include the results of the acquisition of the ETANCO Group
("ETANCO").
2022 First Quarter Financial Highlights
- Consolidated net sales of $493.6
million increased 42.0% from $347.6
million.
-
- North America net sales of
$438.7 million increased 46.0% from
$300.6 million primarily due to
product price increases throughout 2021 in an effort to offset
rising raw material costs. Canada's net sales increased primarily due to
product price increases offset by lower sales volumes.
- Europe net sales of
$51.5 million increased 16.2% from
$44.3 million, primarily due to
product price increases throughout 2021 in an effort to offset
rising raw material costs, partly offset by the negative effect of
approximately $3.7 million in foreign
currency translation.
- Consolidated gross profit of $236.8
million increased 45.9% from $162.3
million. Gross margin increased to 48.0% from 46.7%.
-
- North America gross margin
increased to 49.7% from 48.5%, primarily due to product price
increases throughout 2021, contributing to lower costs, each as a
percentage of sales, in warehouse/freight, factory & tooling,
and labor costs, which were negatively offset by higher material
costs.
- Europe gross margin decreased
to 33.9% from 34.4%, primarily due to higher factory & tooling
costs, as a percentage of net sales.
- Consolidated income from operations of $124.4 million increased 82.0% from $68.4 million. The increase was primarily due to
the increase in consolidated gross profit, partly offset by higher
operating expenses including acquisition related costs, personnel
costs, travel related expenses, and cash profit sharing expense
resulting from favorable operating performance in the first quarter
of 2022. Consolidated operating margin increased to 25.2% from
19.7%.
-
- North America income from
operations of $135.7 million
increased $62.7 million from
$73.0 million. The increase was
primarily due to higher gross profit, partly offset by higher
operating expenses including personnel costs, travel and trade
related events, and cash profit sharing primarily for favorable
operating performance.
- Europe loss from operations of
$1.4 million compared to income of
$2.3 million, primarily due to
professional fees of $7.0 million
associated with the ETANCO acquisition, offset by a $1.1 million gain on the sale of a property and
increased gross profits.
- The Company's effective income tax rate decreased to 23.7% from
24.3%, primarily due to a higher windfall tax benefit on the
vesting of restricted stock units during the first quarter of 2022
compared to 2021.
- Net income was $94.6 million, or
$2.18 per diluted share of the
Company's common stock, compared to net income of $50.4 million, or $1.16 per diluted share.
- Cash flow provided by operating activities increased
approximately $26.8 million from
$17.8 million to $44.7 million, primarily from increases in net
income offset by the increase in working capital.
- Cash flow used in investing activities increased approximately
$1.4 million from $15.7 million to $17.1
million. Capital expenditures were approximately
$17.8 million compared to
$10.5 million.
Management Commentary
"We delivered strong financial and operational performance in
the first quarter with consolidated net sales of $493.6 million increasing 42.0% over the prior
year period," commented Karen
Colonias, Chief Executive Officer of Simpson Manufacturing
Co., Inc. "Sales growth was primarily driven by product price
increases we implemented throughout 2021 in North America and Europe to offset rising raw material costs.
Our strong top-line performance led to our gross margin expanding
130 basis points to 48.0% compared to the prior year period. As a
result, we grew our first quarter consolidated income from
operations to $124.4 million and
generated strong earnings per diluted share of $2.18."
Mrs. Colonias concluded, "Over the past year, we made
significant progress on our growth initiatives to support different
end users and distribution channels. Included in these efforts was
a realignment of our sales teams to more specifically focus on five
end use markets - residential, commercial, OEM, national retail and
building technology, which has led to new customer and project wins
within each of our five key growth initiatives. Our future growth
and diversification efforts were further supported by our
April 1st acquisition of
ETANCO. We believe ETANCO's extensive and complementary product
offering will strengthen our overall portfolio in Europe, enabling us to deliver even more value
to our customers. While we are primarily focused on the integration
of ETANCO, our capital allocation priorities for 2022 remain
centered on organic growth and returning value to our stockholders
through dividends and selectively repurchasing shares of our common
stock, while focusing on repaying the debt we incurred to finance
the acquisition of ETANCO."
Corporate Developments
- On March 30, 2022, the Company
entered into an Amended and Restated Credit Agreement. The Amended
and Restated Credit Agreement amends and restates the Company's
previous Credit Agreement, dated as of July
27, 2012. The Amended and Restated Credit Agreement provides
for a 5-year Revolving Credit Facility of $450.0 million, which includes a letter of credit
sub-facility of up to $50.0 million,
and for a 5-year Term Loan Facility of $450.0 million. The Company borrowed $250.0 million under the Revolving Credit
Facility and $450.0 million under the
Term Loan Facility to finance a portion of the purchase price of
the Company's acquisition of ETANCO.
- On April 1, 2022, the Company
successfully completed the acquisition of ETANCO, a manufacturer of
fastener products headquartered in France, for $800.0
million (725 million
euros(1)) net of cash. For the 12 months ending
September 30, 2021, ETANCO's net
sales and operating income margin were approximately $291.0 million (approximately €258
million(2)) and 19.7%(2), respectively.
- During the first quarter of 2022, the Company repurchased
194,745 shares of common stock in the open market at an average
price of $109.28 per share, for a
total of $21.3 million. As of
March 31, 2022, approximately
$78.7 million remained available for
repurchase under the Company's previously announced $100.0 million share repurchase authorization
(which expires at the end of 2022).
Business Outlook
The Company is updating its 2022 financial outlook to include
the acquisition of ETANCO, which closed on April 1, 2022, one quarter of actual results, and
its latest expectations regarding demand trends, raw material costs
and operating expenses. Based on business trends and conditions as
of today, April 25, 2022, the
Company's outlook for the full fiscal year ending December 31, 2022 is as follows:
- Operating margin is expected to be in the range of 19.0% to
20.0%, mostly attributable to an improved outlook for the overall
market and Simpson. In addition, the revised outlook includes
projected results for ETANCO, including $15.0 to $17.0
million in integration and transaction costs.
- Interest expense on the outstanding $250.0 million Revolving Credit Facility and
$450.0 million Term Loans is expected
to be approximately $11.0 million,
including the effect of interest hedges and bank fee
amortizations.
- The effective tax rate is expected to be in the range of 25.5%
to 26.5%.
- Capital expenditures are expected to be in the range of
$65.0 million to $70.0 million. As part of the integration process
for ETANCO, Simpson management is in the process of assessing
additional capital expenditures in support of ETANCO's
operations.
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 during the first quarter of 2022. 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 first quarter of 2022 financial results
conference call on Monday, April 25, 2022, 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
https://viavid.webcasts.com/starthere.jsp?ei=1539516&tp_key=9123a06bdf
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, May 9, 2022, by dialing (844) 512–2921 (U.S. and
Canada) or (412) 317–6671
(International) and entering the conference ID: 13728308. 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 shear
walls, 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 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 integration of the acquisition 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.
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, the
operations of our customers, suppliers and business partners, and
the successful 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. 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 as of
March 21, 2022.
(2) For the last 12 months ending September 30, 2021, in accordance with French
GAAP. Subject to change following conversion to IFRS or U.S. GAAP
accounting standards and reflects EUR to USD exchange rate 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 March 31,
|
|
|
|
|
2022
|
|
2021
|
Net sales
|
|
|
|
$
493,570
|
|
$
347,642
|
Cost of
sales
|
|
|
|
256,789
|
|
185,360
|
Gross profit
|
|
|
|
236,781
|
|
162,282
|
Research and
development and engineering expense
|
|
|
|
15,866
|
|
14,591
|
Selling
expense
|
|
|
|
36,836
|
|
30,823
|
General and
administrative expense
|
|
|
|
53,774
|
|
48,565
|
Total operating expenses
|
|
|
|
106,476
|
|
93,979
|
Acquisition related
costs
|
|
|
|
6,951
|
|
—
|
Gain on disposal of
assets
|
|
|
|
(1,083)
|
|
(80)
|
Income from operations
|
|
|
|
124,437
|
|
68,383
|
Interest expense, net
and other
|
|
|
|
(428)
|
|
(1,778)
|
Income before taxes
|
|
|
|
124,009
|
|
66,605
|
Provision for income
taxes
|
|
|
|
29,433
|
|
16,218
|
Net income
|
|
|
|
$
94,576
|
|
$
50,387
|
Earnings per common
share:
|
|
|
|
|
|
|
Basic
|
|
|
|
$
2.19
|
|
$
1.16
|
Diluted
|
|
|
|
$
2.18
|
|
$
1.16
|
Weighted average shares
outstanding:
|
|
|
|
|
|
|
Basic
|
|
|
|
43,179
|
|
43,379
|
Diluted
|
|
|
|
43,376
|
|
43,612
|
Cash dividend declared
per common share
|
|
|
|
$
0.25
|
|
$
0.23
|
Other data:
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
|
$
10,795
|
|
$
11,225
|
Pre-tax equity-based compensation expense
|
|
|
|
$
4,872
|
|
$
6,542
|
Simpson
Manufacturing Co., Inc. and Subsidiaries
|
UNAUDITED
Consolidated Condensed Balance Sheets
|
(In
thousands)
|
|
|
|
|
|
|
March 31,
|
|
December 31,
|
|
|
|
|
|
2022
|
|
2021
|
|
2021
|
Cash and cash
equivalents
|
|
|
|
|
$
984,372
|
|
$
257,428
|
|
$
301,155
|
Trade accounts
receivable, net
|
|
|
|
|
320,428
|
|
227,201
|
|
231,021
|
Inventories
|
|
|
|
|
443,448
|
|
296,640
|
|
443,756
|
Other current
assets
|
|
|
|
|
39,632
|
|
37,732
|
|
22,903
|
Total current
assets
|
|
|
|
|
1,787,880
|
|
819,001
|
|
998,835
|
Property, plant and
equipment, net
|
|
|
|
|
265,675
|
|
255,684
|
|
259,869
|
Operating lease
right-of-use assets
|
|
|
|
|
44,651
|
|
44,236
|
|
45,438
|
Goodwill
|
|
|
|
|
133,651
|
|
133,477
|
|
134,022
|
Other noncurrent
assets
|
|
|
|
|
55,297
|
|
42,329
|
|
45,961
|
Total
assets
|
|
|
|
|
$
2,287,154
|
|
$
1,294,727
|
|
$
1,484,125
|
Trade accounts
payable
|
|
|
|
|
$
76,390
|
|
$
66,236
|
|
$
57,215
|
Long-term debt,
current portion
|
|
|
|
|
22,500
|
|
—
|
|
—
|
Accrued liabilities
and other current liabilities
|
|
|
|
|
206,985
|
|
158,578
|
|
187,387
|
Total current
liabilities
|
|
|
|
|
305,875
|
|
224,814
|
|
244,602
|
Operating lease
liabilities, net of current portion
|
|
|
|
|
36,336
|
|
35,810
|
|
37,091
|
Long-term debt, net
of current portion
|
|
|
|
|
677,538
|
|
—
|
|
—
|
Deferred income tax
and other long-term liabilities
|
|
|
|
|
35,595
|
|
19,594
|
|
18,434
|
Stockholders'
equity
|
|
|
|
|
1,231,810
|
|
1,014,509
|
|
1,183,998
|
Total liabilities and
stockholders' equity
|
|
|
|
|
$
2,287,154
|
|
$
1,294,727
|
|
$
1,484,125
|
Simpson
Manufacturing Co., Inc. and Subsidiaries
|
UNAUDITED Segment
and Product Group Information
|
(In
thousands)
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
|
|
|
March 31,
|
|
%
|
|
|
|
|
2022
|
|
2021
|
|
change*
|
Net Sales by Reporting Segment
|
|
|
|
|
|
|
|
|
|
North
America
|
|
|
|
$
438,731
|
|
$
300,564
|
|
46.0%
|
|
Percentage of total net
sales
|
|
|
|
88.9
%
|
|
86.5
%
|
|
|
|
Europe
|
|
|
|
51,451
|
|
44,296
|
|
16.2%
|
|
Percentage of total net
sales
|
|
|
|
10.4
%
|
|
12.7
%
|
|
|
|
Asia/Pacific
|
|
|
|
3,388
|
|
2,782
|
|
21.8%
|
|
|
|
|
|
$
493,570
|
|
$
347,642
|
|
42.0%
|
Net Sales by Product Group**
|
|
|
|
|
|
|
|
|
|
Wood
Construction
|
|
|
|
$
435,438
|
|
$
301,578
|
|
44.4%
|
|
Percentage of total net
sales
|
|
|
|
88.2
%
|
|
86.7
%
|
|
|
|
Concrete
Construction
|
|
|
|
57,976
|
|
45,523
|
|
27.4%
|
|
Percentage of total net
sales
|
|
|
|
11.7
%
|
|
13.1
%
|
|
|
|
Other
|
|
|
|
156
|
|
541
|
|
N/M
|
|
|
|
|
|
$
493,570
|
|
$
347,642
|
|
42.0%
|
Gross Profit (Loss) by Reporting
Segment
|
|
|
|
|
|
|
|
|
|
North
America
|
|
|
|
$
217,919
|
|
$
145,830
|
|
49.4%
|
|
North America
gross margin
|
|
|
|
49.7
%
|
|
48.5
%
|
|
|
|
Europe
|
|
|
|
17,453
|
|
15,250
|
|
14.4%
|
|
Europe gross
margin
|
|
|
|
33.9
%
|
|
34.4
%
|
|
|
|
Asia/Pacific
|
|
|
|
1,448
|
|
1,244
|
|
N/M
|
|
Administrative and all
other
|
|
|
|
(39)
|
|
(42)
|
|
N/M
|
|
|
|
|
|
$
236,781
|
|
$
162,282
|
|
45.9%
|
Income (Loss) from Operations
|
|
|
|
|
|
|
|
|
|
North
America
|
|
|
|
$
135,727
|
|
$
73,025
|
|
85.9%
|
|
North America operating
margin
|
|
|
|
30.9
%
|
|
24.3
%
|
|
|
|
Europe
|
|
|
|
(1,370)
|
|
2,291
|
|
(159.8)%
|
|
Europe operating
margin
|
|
|
|
(2.7)
%
|
|
5.2
%
|
|
|
|
Asia/Pacific
|
|
|
|
564
|
|
425
|
|
N/M
|
|
Administrative and all
other
|
|
|
|
(10,484)
|
|
(7,358)
|
|
N/M
|
|
|
|
|
|
$
124,437
|
|
$
68,383
|
|
82.0%
|
|
|
|
|
*
|
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.