PLEASANTON, Calif., July 25,
2022 /PRNewswire/ --
- Net sales of $593.2 million
increased 44.6% year-over-year
- Income from operations of $133.1
million increased 30.8% year-over-year
- Diluted earnings per share of $2.16 increased 30.1% year-over-year
- Repurchased $25.0 million of
the Company's common stock during the quarter
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 second
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).
Beginning in 2022, the Company changed its presentation for both
the North America and the
Administrative and all other segment's statement of operations to
display allocated expenses and management fees as a separate item
below income from operations. During 2021, allocated expenses and
management fees between the two segments were previously included
in operating expenses and in income from operations and have been
adjusted herein to conform to the 2022 presentation. Consolidated
income from operations, income before tax and net income for all
periods presented below are 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
June 30, 2022 with the quarter ended June 30, 2021 and
include the results of the acquisition of FIXCO Invest S.A.S
("ETANCO") on April 1, 2022. All
purchase accounting adjustments related to the ETANCO acquisition
are preliminary and subject to change.
2022 Second Quarter Financial Highlights
- Consolidated net sales of $593.2
million increased 44.6% from $410.3
million.
-
- North America net sales of
$456.4 million increased 30.2% from
$350.6 million on relatively flat
volumes primarily due to product price increases throughout 2021 in
an effort to offset rising raw material costs.
- Europe net sales of
$133.2 million increased 136.1% from
$56.4 million, primarily due to the
acquisition of ETANCO, which contributed $80.3 million in net sales, along with product
price increases, mostly offset by lower volumes and the negative
effect of approximately $6.9 million
in foreign currency translation.
- Consolidated gross profit of $259.3
million increased 32.0% from $196.4
million. Gross margin decreased to 43.7% from 47.9%.
-
- North America gross margin
decreased to 48.0% from 49.9%, primarily from higher material
costs, as a percentage of net sales, partly offset by product price
increases throughout 2021.
- Europe gross margin decreased
to 29.3% from 36.0%. Europe gross
profit of $39.0 million included
$19.2 million from the acquisition of
ETANCO, which is net of $9.2 million
in fair-value adjustments for inventory costs as a result of
purchase accounting, most of which is a non-recurring charge. The
Company expects there will be an additional nominal amount
recognized in the third quarter of 2022 for a fiscal year total of
$10.5 million in fair value
adjustments.
- Consolidated income from operations of $133.1 million increased 30.8% from $101.7 million. The increase was primarily due to
the increase in consolidated gross profit, partly offset by higher
operating expenses, including $14.9
million attributable to ETANCO, and $5.9 million for integration costs also related
to ETANCO. Consolidated operating margin decreased to 22.4% from
24.8%.
-
- North America income from
operations of $137.4 million
increased $36.2 million from
$101.2 million. The increase was
primarily due to higher gross profit, partly offset by higher
operating expenses including travel, entertainment and personnel
costs.
- Europe income from operations
of $5.6 million decreased
$0.3 million from $5.9 million. This includes ETANCO's operating
loss of $1.6 million which is net of
$9.2 million in inventory adjustments
as noted above, $4.2 million of
amortization expense on acquired intangible assets and $5.9 million for integration costs for a total of
$19.3 million. The Company expects to
incur additional costs in 2022 as it continues to integrate ETANCO
into its European operations. The Company has not realized any
synergies from the combination to date.
- The Company's effective income tax rate slightly decreased to
26.8% from 26.9%.
- Net income was $93.6 million, or
$2.16 per diluted share of the
Company's common stock, compared to net income of $72.5 million, or $1.66 per diluted share. Net income for the
quarter ended June 30, 2022 includes
$3.4 million of net interest expense
primarily on the Company's borrowings for its acquisition of
ETANCO.
Management Commentary
"We delivered strong financial and operational performance in
the second quarter," commented Karen
Colonias, Chief Executive Officer of Simpson Manufacturing
Co., Inc. "Since we announced the acquisition of ETANCO in late
December, planning for and initiating the integration has been a
primary focus. Our integration efforts, supported by the strong
culture of our combined teams, have been progressing according to
plan. After several months of hard work, we were very pleased to
have found no material adjustments to our previously identified
synergy opportunities, although the realization of the full amount
is subject to change based on the current environment in
Europe. We still believe we are
well positioned to capture meaningful benefits from those synergies
in the coming years."
Mrs. Colonias concluded, "We made progress on our key growth
initiatives during the second quarter within each of our five end
use markets including Residential, Commercial, OEM, National Retail
and Building Technology, which gives us confidence we can continue
our above market growth relative to U.S. housing starts in fiscal
2022 and beyond. In conjunction with the integration of ETANCO, we
identified facility expansions in the U.S. that will improve our
overall service, production efficiencies and safety in the
workplace, as well as reduce our reliance on certain outsourced
finished goods and component products, and ensure we have ample
capacity to meet our customers' needs. Investments in these
expansions have already started this year and will continue into
2024. While the rapidly changing macroeconomic environment
including rising interest rates, inflation and other factors
continue to impact the industry at large, we believe Simpson is
uniquely positioned to perform given our diversification strategy
and strong brand reputation that we've cultivated over the past 66
years."
Corporate Developments
- During the second quarter of 2022, the Company repurchased
260,285 shares of common stock in the open market at an average
price of $96.05 per share, for a
total of $25.0 million. As of
June 30, 2022, approximately
$53.7 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 has updated its 2022 financial outlook to include
the acquisition of ETANCO, two quarters 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, July 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
21.0%, in-line with its more recent historical average as the
Company has better visibility on material costs and expected
results from its acquisition of ETANCO. The revised outlook
includes $20.0 to $25.0 million in expected integration and
transaction costs for the acquisition.
- Interest expense on the outstanding $250.0 million Revolving Credit Facility and Term
Loans, which had initial borrowings of $450.0 million, is expected to be approximately
$10.4 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 expected to be in the range of 25.5%
to 26.5%.
- Capital expenditures are expected to be in the range of
$80.0 million to $90.0 million including amounts attributable to
ETANCO.
Conference Call Details
Investors, analysts and other interested parties are invited to
join the Company's second quarter of 2022 financial results
conference call on Monday, July 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=1556555&tp_key=30be70b1e5
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, August 8, 2022, by dialing (844) 512–2921 (U.S. and
Canada) or (412) 317–6671
(International) and entering the conference ID: 13730869. 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
subsidiaries, including 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
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 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 April 1, 2022.
Simpson
Manufacturing Co., Inc. and Subsidiaries
|
UNAUDITED
Consolidated Statements of Operations
|
(In thousands,
except per share data)
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Net sales
|
$
593,232
|
|
$
410,281
|
|
$
1,086,802
|
|
$
757,922
|
Cost of
sales
|
333,899
|
|
213,835
|
|
590,688
|
|
399,195
|
Gross
profit
|
259,333
|
|
196,446
|
|
496,114
|
|
358,727
|
Research and
development and engineering expense
|
16,943
|
|
14,169
|
|
32,809
|
|
28,758
|
Selling
expense
|
45,074
|
|
33,167
|
|
81,910
|
|
63,990
|
General and
administrative expense
|
58,419
|
|
47,410
|
|
112,192
|
|
95,975
|
Total operating
expenses
|
120,436
|
|
94,746
|
|
226,911
|
|
188,723
|
Acquisition and
integration related costs
|
5,864
|
|
—
|
|
12,815
|
|
—
|
Gain on disposal of
assets
|
(43)
|
|
(28)
|
|
(1,126)
|
|
(108)
|
Income from
operations
|
133,076
|
|
101,728
|
|
257,514
|
|
170,112
|
Interest expense, net
and other
|
(3,372)
|
|
(420)
|
|
(3,585)
|
|
(765)
|
Other & foreign
exchange loss, net
|
(1,890)
|
|
(2,216)
|
|
(2,107)
|
|
(3,648)
|
Income before
taxes
|
127,814
|
|
99,092
|
|
251,822
|
|
165,699
|
Provision for income
taxes
|
34,244
|
|
26,609
|
|
63,677
|
|
42,827
|
Net income
|
$
93,570
|
|
$
72,483
|
|
$
188,145
|
|
$
122,872
|
Earnings per common
share:
|
|
|
|
|
|
|
|
Basic
|
$
2.17
|
|
$
1.67
|
|
$
4.36
|
|
$
2.83
|
Diluted
|
$
2.16
|
|
$
1.66
|
|
$
4.34
|
|
$
2.82
|
Weighted average shares
outstanding:
|
|
|
|
|
|
|
|
Basic
|
43,145
|
|
43,434
|
|
43,162
|
|
43,406
|
Diluted
|
43,240
|
|
43,641
|
|
43,306
|
|
43,620
|
Cash dividend declared
per common share
|
$
0.26
|
|
$
0.25
|
|
$
0.52
|
|
$
0.48
|
Other data:
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
$
17,530
|
|
$
11,527
|
|
$
28,324
|
|
$
22,753
|
Pre-tax
equity-based compensation expense
|
$
4,657
|
|
$
3,702
|
|
$
9,528
|
|
$
10,245
|
Simpson
Manufacturing Co., Inc. and Subsidiaries
|
UNAUDITED
Consolidated Condensed Balance Sheets
|
(In
thousands)
|
|
|
|
June
30,
|
|
December
31,
|
|
|
2022
|
|
2021
|
|
2021
|
Cash and cash
equivalents
|
|
$
246,134
|
|
$
305,796
|
|
$
301,155
|
Trade accounts
receivable, net
|
|
375,130
|
|
249,931
|
|
231,021
|
Inventories
|
|
539,844
|
|
310,254
|
|
443,756
|
Other current
assets
|
|
43,501
|
|
35,722
|
|
22,903
|
Total current
assets
|
|
1,204,609
|
|
901,703
|
|
998,835
|
Property, plant and
equipment, net
|
|
346,184
|
|
255,353
|
|
259,869
|
Operating lease
right-of-use assets
|
|
48,984
|
|
43,374
|
|
45,438
|
Goodwill
|
|
492,338
|
|
134,121
|
|
134,022
|
Intangible assets,
net
|
|
357,698
|
|
23,749
|
|
26,269
|
Other noncurrent
assets
|
|
35,655
|
|
15,674
|
|
19,692
|
Total
assets
|
|
$
2,485,468
|
|
$
1,373,974
|
|
$
1,484,125
|
Trade accounts
payable
|
|
$
112,968
|
|
$
60,268
|
|
$
57,215
|
Long-term debt,
current portion
|
|
22,500
|
|
—
|
|
—
|
Accrued liabilities
and other current liabilities
|
|
225,928
|
|
172,186
|
|
187,387
|
Total current
liabilities
|
|
369,335
|
|
232,454
|
|
244,602
|
Operating lease
liabilities, net of current portion
|
|
39,654
|
|
34,087
|
|
37,091
|
Long-term debt, net
of current portion
|
|
664,956
|
|
—
|
|
—
|
Deferred income tax
and other long-term liabilities
|
|
134,824
|
|
20,528
|
|
18,434
|
Stockholders'
equity
|
|
1,284,638
|
|
1,086,905
|
|
1,183,998
|
Total liabilities and
stockholders' equity
|
|
$
2,485,468
|
|
$
1,373,974
|
|
$
1,484,125
|
Simpson
Manufacturing Co., Inc. and Subsidiaries
|
UNAUDITED Segment
and Product Group Information
|
(In
thousands)
|
|
|
|
Three Months
Ended
|
|
|
|
Six Months
Ended
|
|
|
|
|
June
30,
|
|
%
|
|
June
30,
|
|
%
|
|
2022
|
|
2021
|
|
change*
|
|
2022
|
|
2021
|
|
change*
|
Net Sales by
Reporting Segment
|
|
|
|
|
|
|
|
|
|
|
|
|
North
America
|
$
456,410
|
|
$ 350,557
|
|
30.2 %
|
|
$
895,140
|
|
$ 651,120
|
|
37.5 %
|
|
Percentage of total
net sales
|
76.9 %
|
|
85.4 %
|
|
|
|
82.4 %
|
|
85.9 %
|
|
|
|
Europe
|
133,238
|
|
56,438
|
|
136.1 %
|
|
184,689
|
|
100,734
|
|
83.3 %
|
|
Percentage of total
net sales
|
22.5 %
|
|
13.8 %
|
|
|
|
17.0 %
|
|
13.3 %
|
|
|
|
Asia/Pacific
|
3,584
|
|
3,286
|
|
9.1 %
|
|
6,973
|
|
6,068
|
|
14.9 %
|
|
|
$
593,232
|
|
$
410,281
|
|
44.6 %
|
|
$ 1,086,802
|
|
$ 757,922
|
|
43.4 %
|
Net Sales by Product
Group**
|
|
|
|
|
|
|
|
|
|
|
|
|
Wood
Construction
|
$
514,543
|
|
$ 355,787
|
|
44.6 %
|
|
$
950,191
|
|
$ 657,365
|
|
44.5 %
|
|
Percentage of total
net sales
|
86.7 %
|
|
86.7 %
|
|
|
|
87.4 %
|
|
86.7 %
|
|
|
|
Concrete
Construction
|
78,209
|
|
54,305
|
|
44.0 %
|
|
136,185
|
|
99,828
|
|
36.4 %
|
|
Percentage of total
net sales
|
13.2 %
|
|
13.2 %
|
|
|
|
12.5 %
|
|
13.2 %
|
|
|
|
Other
|
480
|
|
189
|
|
N/M
|
|
426
|
|
729
|
|
N/M
|
|
|
$
593,232
|
|
$ 410,281
|
|
44.6 %
|
|
$ 1,086,802
|
|
$ 757,922
|
|
43.4 %
|
Gross Profit (Loss)
by Reporting Segment
|
|
|
|
|
|
|
|
|
|
|
|
|
North
America
|
$
219,299
|
|
$ 174,984
|
|
25.3 %
|
|
$
437,175
|
|
$ 317,369
|
|
37.7 %
|
|
North America
gross margin
|
48.0 %
|
|
49.9 %
|
|
|
|
48.8 %
|
|
48.7 %
|
|
|
|
Europe
|
39,023
|
|
20,298
|
|
92.3 %
|
|
56,476
|
|
35,548
|
|
58.9 %
|
|
Europe gross
margin
|
29.3 %
|
|
36.0 %
|
|
|
|
30.6 %
|
|
35.3 %
|
|
|
|
Asia/Pacific
|
1,098
|
|
1,207
|
|
N/M
|
|
2,546
|
|
2,451
|
|
N/M
|
|
Administrative and all
other
|
(87)
|
|
(43)
|
|
N/M
|
|
(83)
|
|
3,359
|
|
N/M
|
|
|
$
259,333
|
|
$ 196,446
|
|
32.0 %
|
|
$
496,114
|
|
$ 358,727
|
|
38.3 %
|
Income (Loss) from
Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
North
America
|
$
137,368
|
|
$ 101,190
|
|
35.8 %
|
|
$
273,064
|
|
$ 174,215
|
|
56.7 %
|
|
North America
operating margin
|
30.1 %
|
|
28.9 %
|
|
|
|
30.5 %
|
|
26.8 %
|
|
|
|
Europe
|
5,559
|
|
5,873
|
|
(5.3) %
|
|
4,189
|
|
8,164
|
|
(48.7) %
|
|
Europe operating
margin
|
4.2 %
|
|
10.4 %
|
|
|
|
2.3 %
|
|
8.1 %
|
|
|
|
Asia/Pacific
|
100
|
|
203
|
|
N/M
|
|
664
|
|
628
|
|
N/M
|
|
Administrative and all
other
|
(9,951)
|
|
(5,538)
|
|
N/M
|
|
(20,403)
|
|
(12,895)
|
|
N/M
|
|
|
$
133,076
|
|
$ 101,728
|
|
30.8 %
|
|
$
257,514
|
|
$ 170,112
|
|
51.4 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*
|
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
View original
content:https://www.prnewswire.com/news-releases/simpson-manufacturing-co-inc-announces-2022-second-quarter-financial-results-301592733.html
SOURCE Simpson Manufacturing Co., Inc.