Simpson Manufacturing Co Inc
For the period ended Jun 30, 2024. Filed Aug 7, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2024 · Filed Aug 7, 2024
SSD$196.89-1.0%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-05-07.
0000920371-24-000120
Item 2. - Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-06-30; filed 2024-08-07.
0000920371-24-000163
Item 2. - Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 98 previous paragraphs and 132 current paragraphs.
50 unchanged; 39 reworded; 35 added; 9 removed; 0 previous and 8 current paragraphs rearranged.
Tables are not compared: 8 previous and 13 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (35)
Current report
•Acquisitions of a software company and a manufacturer of equipment used by component manufacturers to expand our offering of solutions to our component manufacturer customers and potentially accelerate growth in the market;
Current report
Operating income decreased $26.9 million on lower gross profitsas well as increased personnel costs, professional fees, and travel expenses. Fiscal 2024 operating margins have and will include anticipated acquisition and integration related costs. We currently anticipate North America 2024 results to be impacted by economic headwinds but also believe in the long term potential given the on-going housing shortage.
Current report
Research and development and engineering expense increased 5.4% to $22.7 million from $21.5 million, primarily due to an increase of $2.1 million and $1.0 million in professional fees and personnel costs, respectively, partially offset by a decrease of $1.5 million in software licensing and IT costs, net of amount capitalized and $0.7 million of variable compensation.
Current report
Selling expense increased 10.9% to $55.9 million from $50.4 million, primarily due to increases of $4.2 million in personnel costs, $0.9 million in advertising costs, $0.7 million in travel related costs and $0.5 million in software licensing and IT costs net of amount capitalized, offset by a decrease of $1.5 million of variable compensation.
Current report
General and administrative expense decreased 3.5% to $66.4 million from $68.8 million, primarily due to a decrease of $3.4 million of variable compensation, partially offset by an increase of $1.7 million in personnel costs.
Current report
•Net sales decreased 0.5%, primarily due to decreased sales volumes.
Current report
•Research, development and engineering expense increased 3.8%, primarily due to an increase of $2.1 million in professional fees, partially offset by a decrease of $1.6 million in software licensing and IT costs, net of amount capitalized.
Current report
•Selling expense increased 12.2%, primarily due to increases of $4.2 million in personnel costs, $0.6 million in advertising and trade shows, and $0.6 million in travel expense, partially offset by the decrease of $1.7 million in variable compensation.
Current report
•General and administrative expense decreased 1.1%, primarily due to decreases in $1.1 million of variable compensation, $0.6 million in professional fees, partially offset by increases of $1.0 million in personnel costs and $0.5 million of travel related expenses.
Current report
•Net sales increased 1.6%, primarily due to higher sales volumes, partially offset by price decreases in some regions as well as the negative effect of $0.7 million in foreign currency translation.
Current report
•Gross margin decreased to 35.4% from 37.4%, primarily due to increased labor and factory & tooling costs as well as warehouse and freight costs, partially offset by lower material costs, as a percentage of net sales.
Current report
Results of Operations for the Six Months Ended June 30, 2024, Compared with the Six Months Ended June 30, 2023
Current report
Year-to-Date (6-month) 2024 Consolidated Financial Highlights
Current report
The following table illustrates the differences in our operating results for the six months ended June 30, 2024, from the six months ended June 30, 2023, and the increases or decreases for each category by segment:
Current report
Net sales decreased 0.4% to $1,127.6 million from $1,132.0 million driven by lower sales volumes in North America. Wood construction product sales represented 84.8% and 85.7% of the Company's total sales in the first six months of 2024 and 2023. Concrete construction product sales represented 14.6% and 14.0%of the Company's total sales in the first six months of 2024 and 2023.
Current report
Gross profit decreased 3.2% to $523.1 million from $540.3 million. Gross margins decreased to 46.4% from 47.7%. The decrease is due to higher warehouse and freight costs for the Company overall. Gross margins decreased to 46.3% from 47.8% for wood construction products and increased to 47.1% from 46.5% for concrete construction products.
Current report
Research and development and engineering expense increased 5.5% to $44.6 million from $42.3 million primarily due to an increase of $2.3 million in personnel costs, $2.3 million in professional fees, $0.7 million in depreciation and amortization expense, partially offset by a decrease of $2.0 million in computer and software, net of amount capitalized and $1.1 million of variable compensation.
Current report
Selling expense increased to $110.4 million from $99.1 million, primarily due to increases of $8.7 million in personnel costs, $2.2 million in advertising costs, $1.6 million in travel related costs, and $1.1 million in computer and software cost net of amount capitalized, partially offset by a decrease of $2.6 million of variable compensation and $0.9 million of professional fees.
Current report
General and administrative expense increased to $136.6 million from $132.5 million, primarily due to increases of $5.3 million in personnel costs, $1.6 million in professional costs, and $0.7 million in travel related costs, partially offset by a decrease of $4.8 million of variable compensation.
Current report
Consolidated net incomewas $173.3 million compared to $195.2 million. Diluted earnings per share was $4.07 compared to $4.55.
Current report
Net sales
Current report
The following table represents net sales by segment for the six-month periods ended June 30, 2023 and 2024:
Current report
Gross profit
Current report
The following table represents gross profit (loss) by segment for the six-month periods ended June 30, 2023 and 2024:
Current report
The following table represents gross margin by segment for the six-month periods ended June 30, 2023 and 2024:
Current report
North America
Current report
•Net sales decreased 0.2%, primarily due to decreased sales volumes and slightly higher incentives, including an increase in estimated rebates to home builders.
Current report
•Gross margin decreased to 49.7% from 50.9%, due to higher factory and tooling as well as warehouse and freight costs as a percentage of net sales, offset by lower raw material costs as a percentage of net sales.
Current report
•Research and development and engineering expense increased 4.1%, primarily due to an increase of $2.2 million in professional costs, partially offset by a decrease of $1.1 million of variable compensation.
Current report
•Income from operations decreased $26.9 million, due to higher operating expenses.
Current report
Europe
Current report
•Gross margin decreased to 35.9% from 37.5% while gross profit decreased $4.7 million.
Current report
•Income from operations decreased $7.0 million, primarily due to lower gross profit.
Current report
Asia/Pacific
Current report
On August 1, 2024, the Company completed its acquisition of all of the operating assets and assumed liabilities of Monet DeSauw Inc. and certain properties of Callaway Properties, LLC for a total purchase consideration of approximately $59.0 million before normal working capital adjustments.
Removed paragraphs (9)
Previous report
In the past two years, we have reorganized our sales teams to customer market focused teams dedicated to serving the following markets:
Previous report
Research and development and engineering expense increased 5.6% to $21.9 million from $20.7 million, primarily due to increased personnel costs of $1.3 million, $0.4 million in depreciation and amortization offset by a decrease of $0.5 million of variable compensation.
Previous report
Selling expense increased 12.0% to $54.5 million from $48.7 million, primarily due to increased personnel costs of $4.5 million, $1.2 million in advertising and trade shows costs, and $0.9 million in travel related costs offset by a decrease of $1.1 million of variable compensation.
Previous report
General and administrative expense increased 10.2% to $70.2 million from $63.7 million, primarily due to increased personnel costs of $3.5 million, $2.6 million in software licensing & Information Technology ("IT") costs, and $1.9 million in professional service fees offset by a decrease of $1.4 million of variable compensation.
Previous report
1 Adjusted EBITDA is a non-GAAP financial measure. For a reconciliation of Adjusted EBITDA to U.S. generally accepted accounting principles ("GAAP") net income see the schedule titled "Reconciliation of Net Income to Adjusted EBITDA."
Previous report
•Net sales increased 0.1%, primarily due to increased sales volumes offset by price decreases implemented during 2023 and increased volume discounts on increased sales volumes, including an increase in estimated rebates to home builders.
Previous report
•Research, development and engineering expense increased 4.5%, primarily due to increased personnel costs of $0.3 million and $0.3 million in depreciation and amortization.
Previous report
•Gross margin decreased to 36.5% from 37.5%. Europe gross profit of $43.8 million decreased 6.0% from $46.6 million, primarily due to increased warehouse and freight costs, as a percentage of net sales.
Previous report
From April 1, 2024 to May 2, 2024, the Company purchased 283,273 shares of the Company's common stock at an average price of $176.51 per share, for a total of $50.0 million.
Reworded paragraphs (39)
Previous wording
We design, manufacture and sell building construction products that are of high quality and performance, easy to use and cost-effective for customers. We operate in three business segments determined by geographic region: North America, Europe and Asia/Pacific.
Current wording
We design, manufacture and sell building construction products that are of high quality and performance, easy to use and cost-effective for customers. We operate in three business segments determined by geographic region: North America, Europe and Asia/Pacific. Within the North America segment, our sales efforts are aligned to customer market teams dedicated to serving the following markets:
Previous wording
Our organic opportunities focused on expanding our product line with our current customers while also identifying new opportunities within our core competencies of wood and concrete products. These new growth opportunities focused on gaining share with our primary customer markets.
Current wording
Our organic growth opportunities are focused on expanding our product lines with our current customers while also identifying new market share gain opportunities within our core product and market competencies.
Previous wording
In order to grow in these markets, we aspire to be among the leaders in engineered load-rated construction building products and systems and digital product offerings while leveraging our engineering expertise, deep-rooted relationships with top builders, engineers, contractors, code officials and distributors, along with our ongoing commitment to testing, research and innovation. Importantly, we currently have existing products, testing results, distribution and manufacturing capabilities to support our Company ambitions and key growth initiatives. This will ultimately be a function of expanding our sales and/or marketing functions to promote our products to different end users and distribution channels, expanding our customer base, and potentially introducing new products in the future.
Current wording
In order to grow in these markets, we aspire to be among the leaders in engineered load-rated construction building products and systems and digital product offerings. We also aspire to leverage our engineering expertise, deep-rooted relationships with top builders, engineers, contractors, code officials and distributors, along with our ongoing commitment to testing, research and innovation. Importantly, we currently have existing products, testing results, distribution and manufacturing capabilities to support our Company ambitions. This will ultimately be a function of expanding our sales and/or marketing functions to promote our products to different end users and distribution channels, expanding our customer base, and introducing new products in the future.
Previous wording
•Above market growth relative to the United States housing starts;
Current wording
•Above market growth relative to the United States housing starts (exceeding our historical average volume performance in North America of approximately 250 basis points above the housing starts market);
Previous wording
•Integrate ETANCO and restoring our return on invested capital to be within the top quartile of our proxy peers.
Current wording
•Long-term, return to the top quartile of our proxy peers for return on invested capital.
Previous wording
•Continued growing United States sales volumes above United States housing starts growth;
Current wording
•Continued growing North America sales volumes above United States housing starts growth;
Previous wording
•Formed a new partnership agreement with a large independent co-op serving more than 12,000 retail hardware stores, home centers, and pro lumber dealers, which led to significant conversions of our connectors, fasteners and anchor products;
Current wording
•Formed a new relationship agreement with a large independent co-op serving more than 12,000 retail hardware stores, home centers, and pro lumber dealers, which led to significant conversions of our connectors, fasteners and anchor products;
Previous wording
•Rolled out 14 new products, globally, during the first quarter of 2024;
Current wording
•Rolled out 33 new products, globally, during the first two quarters of 2024;
Previous wording
•Converted component manufacturers to using our truss software and purchasing our truss plate and connectors solution sets, including a major component manufacture; and
Current wording
•Converted component manufacturers to using our truss software and purchasing our truss plate and connector solution sets, including a major component manufacture; and
Previous wording
We believe this progress is the result of our high service levels, increasingly diverse portfolio of products and software as well as our commitment to innovation and developing complete solutions for the markets we serve. As we continue to make progress on our key growth initiatives, we believe we can continue to achieve above market growth in the United States relative to United States housing starts for fiscal 2024 and beyond. These examples further emulate our Founder, Barclay Simpson’s, nine principles of doing business, and more specifically the focus and obsession on customers and users.
Current wording
We believe this progress is the result of our high service levels, increasingly diverse portfolio of products and software as well as our commitment to innovation and developing complete solutions for the markets we serve. As we continue to make progress on our key growth initiatives, we believe we can continue to achieve above market growth in the North America relative to
Previous wording
Beginning this quarter, we now include consolidated Adjusted EBITDA, a non-GAAP measure. We use Adjusted EBITDA to provide additional insight into the Company’s operating performance in light of the significant levels of growth investment we are continuing to make in the business and the effect accelerated depreciation and acquisition and integration costs will have on our operating results. This will also provide a better approximation of our cash flows compared to operating income.
Current wording
We now include consolidated Adjusted EBITDA, a non-GAAP measure. The Company defines adjusted EBITDA as net income (loss) before income taxes, adjusted to exclude depreciation and amortization, integration, acquisition and restructuring costs, goodwill impairment, gain on bargain purchase, net loss or gain on disposal of assets, interest income or expense, and foreign exchange and other expense (income). We use Adjusted EBITDA to provide additional insight into the Company’s operating performance in light of the significant levels of growth investment we are continuing to make in our operations and the effect accelerated depreciation and acquisition and integration costs will have on our operating results. This will also provide a better approximation of our cash flows compared to operating income.
Previous wording
The Company’s business, financial condition and results of operations depends in large part on the level of United States housing starts and residential construction activity. Overall housing starts increased slightly during the first quarter of 2024 compared to the first quarter of 2023, with single family starts increasing significantly during the first quarter of 2024. The increase in single family starts was mostly offset by lower multi-family housing starts, which are more sensitive to interest rate increases and inflation. Lower housing starts in the United States could result in lower demand, which would affect the Company's sales and possibly operating profit.
Current wording
The Company’s business, financial condition and results of operations depends in large part on the level of United States housing starts and residential construction activity. Overall housing starts decreased during the second quarter of 2024 compared to the second quarter of 2023, with a significant decrease in multi-family housing starts, which are more sensitive to interest rate increases and inflation. Housing starts have decreased from the current quarter to the prior year quarter six out of the last eight quarters. Lower housing starts in the United States could result in lower demand, which would affect the Company's sales and possibly operating profit.
Previous wording
In prior years, our sales were heavily seasonal with operating results varying from quarter to quarter depending on weather conditions that could delay construction starts. Our sales and income have historically been lower in the first and fourth quarters than in the second and third quarters of a fiscal year. Due to efforts in diversifying our global footprint with the acquisition of ETANCO and changing our path to market in the United States, sales from our product line, customer base and customer purchases are becoming less seasonal. Political and economic events such as rising energy costs, volatility in the steel market, stressed product transportation systems and increasing interest rates can also have an effect on our gross and operating profits as well. Changes in raw material cost could impact the amount of inventory on-hand, and negatively affect our gross profit and operating margins depending on the timing of raw material purchases or how much sales prices can be increased to offset any increases in raw material costs.
Current wording
In prior years, our sales were heavily seasonal with operating results varying from quarter to quarter depending on weather conditions that could delay construction starts. Our sales and income have historically been lower in the first and fourth quarters than in the second and third quarters of a fiscal year. Increasing interest rates, rising energy costs, volatility in the steel market and stressed product transportation systems, as well as political events like elections, can also have an effect on our gross and operating profits as well. Due to efforts in diversifying our global footprint with the acquisition of ETANCO and changing our path to market in the United States, sales from our product line, customer base and customer purchases are becoming less seasonal. Changes in raw material cost could impact the amount of inventory on-hand, and negatively affect our gross profit and operating margins depending on the timing of raw material purchases or how much sales prices can be increased to offset any increases in raw material costs.
Previous wording
Historically, our North America segment has generated more revenues from wood construction products compared to concrete construction products. North America net sales increased slightly for the quarter ended March 31, 2024 compared to March 31, 2023, due to higher sales volumes of 8%, measured by pounds shipped, which were offset by price decreases implemented during 2023 and increased rebates due to increased volume sales, as well as an increase in estimated rebates to home builders. Our wood construction product net sales decreased 0.6% for the quarter ended March 31, 2024 compared to March 31, 2023 as described above. Our concrete construction product sales increased 6.0% over the same periods, due to higher volumes. Over the last several years, our historical average volume growth in North America has exceeded the housing starts market growth by approximately 250 basis points. We believe the United States 2024 housing starts market will grow in the low single digits relative to fiscal year 2023 housing starts and one of our ambitions is to continue to grow above market. With the investments we have made and continue to make, we believe we are well positioned to achieve that ambition.
Current wording
Historically, our North America segment has generated more revenues from wood construction products compared to concrete construction products. North America net sales decreased slightly for the six months ended June 30, 2024 compared to the six months ended June 30, 2023. Our wood construction product net sales decreased 1.3% for the six months ended June 30, 2024 compared to June 30, 2023. Our concrete construction product sales increased 5.6% over the same periods. We believe the United States 2024 housing starts market will be flat to down relative to fiscal year 2023 housing starts. For the year-to-date period, housing starts have decreased in 2024 compared to the same period in 2023, while the Company's North America sales volumes have increased by approximately 4% over that same period. With the investments we have made and continue to make, we believe we will be able to continue to grow above the US housing starts market, one of our company ambitions.
Previous wording
During 2024, work continued on our Columbus facility expansion as well as the building of the replacement of our Gallatin facility. We expect the expansion and replacement of these facilities 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 continue to ensure we have ample capacity to meet our customer needs. These investments reinforce our core business model differentiators to remain the partner of choice as we continue to produce products locally and ensure superior levels of customer service.
Current wording
During 2024, work continued on our Columbus, Ohio facility expansion as well as the building of the replacement of our Gallatin, Tennessee facility. We expect the expansion and replacement of these facilities 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 continue to ensure we have ample capacity to meet our customer needs. These investments reinforce our core business model differentiators to remain the partner of choice as we continue to produce products locally and ensure superior levels of customer service.
Previous wording
Europe sales decreased 3.4% for the quarter ended March 31, 2024 compared to March 31, 2023, primarily due to lower sales volumes, primarily in the residential market, which was partly offset by the positive effect of approximately $2.2 million in foreign currency translation. Wood construction product sales decreased 3.2% for the quarter ended March 31, 2024 compared to March 31, 2023 and concrete construction product sales, which are mostly project based, decreased 4.6% for the quarter ended March 31, 2024 compared to March 31, 2023. Gross profit decreased $2.8 million primarily due to lower net sales as well as a lower gross profit margin, mostly on higher warehouse and freight costs. Operating income decreased $5.2 million on higher operating and integration expenses, offset partly from a release of contingent tax liability associated with an acquisition and an increase in foreign currency gains. Fiscal 2024 operating margins will include anticipated integration costs estimated to range between $4.0 million to $5.0 million. We currently anticipate Europe 2024 results to be impacted by economic headwinds but also believe in the long term potential given Europe's on-going housing shortage (with an increasing use of wood construction) and new environmental regulations for which we have products and solutions.
Current wording
Europe net sales decreased 0.9% for the six months ended June 30, 2024 compared to the six months ended June 30, 2023, Wood construction product sales decreased 1.6% for the six months ended June 30, 2024 compared to June 30, 2023 and concrete construction product sales, which are mostly project based, increased 2.1% over the same periods. Gross profit decreased $4.7 million primarily due to increased factory overhead, warehouse and freight costs, as a percentage of net sales. Operating income decreased $7.0 million on lower gross profits and higher operating expenses, partly offset by lower integration expenses. Fiscal 2024 operating margins will include anticipated acquisition and integration related costs estimated to range between$4.0 million to $5.0 million. We currently anticipate Europe 2024 results to be impacted by economic headwinds but also believe in the long term potential given Europe's on-going housing shortage (with an increasing use of wood construction) and new environmental regulations for which we have products and solutions.
Previous wording
The Company updated its financial outlook for the full fiscal year ending December 31, 2024 based on one quarter of actual results, and its latest expectations regarding demand trends, raw material costs and operating expenses as of follow:
Current wording
The Company updated its financial outlook for the full fiscal year ending December 31, 2024 based on two quarters of actual results, and its latest expectations regarding demand trends, raw material costs and operating expenses as of follow:
Previous wording
◦Operating margin is estimated to be in the range of 20.0% to 21.5%, including approximately $85.5 million in depreciation and amortization expense.
Current wording
◦Operating margin is estimated to be in the range of 20.0% to 21.0%, including approximately $85.0 million in depreciation and amortization expense.
Previous wording
◦Capital expenditures are estimated to be approximately $185 million, which includes $105 million for the Columbus, Ohio facility expansion and the new Gallatin, Tennessee fastener facility construction.
Current wording
◦Capital expenditures are estimated to range between $180.0 and $190.0 million, which includes $90.0 to $100.0 million for the Columbus, Ohio facility expansion and the new Gallatin, Tennessee fastener facility construction with the remaining spend carrying over into 2025.
Previous wording
First Quarter 2024 Consolidated Financial Highlights
Current wording
Second Quarter 2024 Consolidated Financial Highlights
Previous wording
Net sales decreased 0.7% to $530.6 million from $534.4 million. As noted above, North America sales volume increased 8%, measured in pounds, and were offset by price decreases implemented during 2023, increased volume rebates as a result of increased volume sales, and an increase in estimated rebates to home builders, as well as a decrease in Europe sales volumes. Wood construction product sales, including sales of connectors, truss plates, fastening systems, fasteners and shearwalls, represented 85% of the Company's total sales in the first quarters of 2024 and 2023, respectively. Concrete construction product sales, including sales of adhesives, chemicals, mechanical anchors, powder actuated tools and reinforcing fiber materials, represented 15% and 14% of the Company's total sales in the first quarters of 2024 and 2023, respectively.
Current wording
Net sales decreased 0.1% to $597.0 million from $597.6 million. Wood construction product sales, including sales of connectors, truss plates, fastening systems, fasteners and shearwalls, represented 84.9% and 86.2% of the Company's total sales in the second quarters of 2024 and 2023, respectively. Concrete construction product sales, including sales of adhesives, chemicals, mechanical anchors, powder actuated tools and reinforcing fiber materials, represented 14.5% and 13.6% of the Company's total sales in the second quarters of 2024 and 2023, respectively.
Previous wording
Gross profit decreased 3.3% to $244.6 million from $252.9 million primarily due to higher overhead costs partially offset by lower raw material costs. As a result, consolidated gross margins were 46.1% compared to 47.3% last year. From a product perspective, gross margin decreased to 46.1% from 47.1% for wood construction products and decreased to 46.5% from 47.1% for concrete construction products, respectively.
Current wording
Gross profit decreased 3.1% to $278.5 million from $287.5 million primarily due to higher factory overhead, warehouse and freight costs partially offset by lower raw material costs. As a result, consolidated gross margins were 46.7% compared to 48.1% last year. From a product perspective, gross margin decreased to 46.5% from 48.4% for wood construction products and increased to 47.5% from 45.9% for concrete construction products, respectively.
Previous wording
Our effective income tax rate decreased to 23.4% from 25.1%.
Current wording
Our effective income tax rate increased to 26.3% from 25.9%.
Previous wording
Consolidated net incomewas $75.4 million compared to $88.0 million. Diluted earnings per share was $1.77 compared to $2.05.
Current wording
Consolidated net incomewas $97.8 million compared to $107.2 million. Diluted earnings per share was $2.31 compared to $2.50.
Previous wording
Adjusted EBITDA 1 of $117.3 million decreased 14.4% compared to $137.0 million, primarily due to lower gross profits on lower net sales as well as increased personnel costs, IT costs and professional service fees, which were partly offset by decreases in variable compensation costs.
Current wording
Adjusted EBITDA 1 of $152.6 million decreased 7.8% compared to $165.6 million, primarily due to lower gross profits on lower net sales.
Previous wording
•Gross margin decreased to 49.3% from 50.6%, primarily due to higher warehouse and freight costs, partially offset by lower material costs, as a percentage of net sales.
Current wording
•Gross margin decreased to 50.0% from 51.2%, primarily due to higher labor, factory overhead, warehouse and freight costs, partially offset by lower material costs, as a percentage of net sales.
Previous wording
•Income from operations decreased by $15.5 million due to the factors discussed above.
Current wording
•Income from operations decreased by $11.4 million due to the factors discussed above.
Previous wording
•Income from operations decreased by $5.2 million from $13.5 million to $8.3 million due to lower gross margins and high personnel costs.
Current wording
•Income from operations decreased by $1.9 million from $14.0 million to $12.1 million due to lower gross margins and high personnel costs, partially offset by lower integration related expenses.
Previous wording
•Selling expense increased 17.3%, primarily due to increased personnel costs of $4.9 million, $0.9 million in advertising and trade shows cost, $0.8 million in travel related costs, and $0.7 million in software licensing and IT costs, net of amounts capitalized, offset by a decrease of $1.0 million of variable compensation.
Current wording
•Selling expense increased 14.7%, primarily due to increases of $9.1 million in personnel costs, $1.6 million in advertising and trade shows expenses, $1.4 million in travel related expenses, $1.1 million in computer and software expense net of amounts capitalized, partially offset by a decrease of $2.7 million in variable compensation.
Previous wording
•General and administrative expense increased 9.9%, primarily due to increased personnel costs of $2.1 million, $1.9 million in software licensing and IT costs, net of amounts capitalized, offset by a decrease of $0.7 million in variable compensation.
Current wording
•General and administrative expense increased 4.4%, primarily due to increases of $3.1 million in personnel costs, $1.5 million in computer and software expenses, net of amounts capitalized, and $0.6 million in travel related expenses, partially offset by a decrease of $1.8 million in variable compensation.
Previous wording
•Net sales decreased 3.4%, primarily due to lower sales volumes, partially offset by the positive effect of $2.2 million in foreign currency translation.
Current wording
•Net sales decreased 0.9%, primarily due tolower sales volumes and some regional price decreases, partially offset by the positive effect of $1.6 million in foreign currency translation.
Previous wording
On March 30, 2022, the Company entered into an Amended and Restated Credit Agreement. 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 up to $50 million and for a 5-year term loan facility of $450.0 million. As of March 31, 2024, the Company had borrowings of $75.0 million under the revolving credit facility and $405.0 million under the term loan facility, and has $375.0 million available to borrow under the revolving credit facility.
Current wording
On March 30, 2022, the Company entered into an Amended and Restated Credit Agreement. 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 up to $50.0 million and for a 5-year term loan facility of $450.0 million. As of June 30, 2024, the Company had borrowings of $75.0 million under the revolving credit facility and $399.4 million under the term loan facility, and has $375.0 million available to borrow under the revolving credit facility.
Previous wording
As of March 31, 2024, our cash and cash equivalents consisted of deposits and money market funds held with established national financial institutions includes $91.7 million are held in the local currencies of our foreign operations and could be subject to additional taxation if repatriated to the U.S. The Company is maintaining a permanent reinvestment assertion on its foreign earnings relative to remaining cash held outside the United States.
Current wording
As of June 30, 2024, our cash and cash equivalents consisted of deposits and money market funds held with established national financial institutions including $101.6 million that are held in the local currencies of our foreign operations and could be subject to additional taxation if repatriated to the U.S. The Company is maintaining a permanent reinvestment assertion on its foreign earnings relative to remaining cash held outside the United States.
Previous wording
The following table presents the significant categories of cash flows was used or provided during the three-month periods ended March 31, 2024 and 2023, respectively:
Current wording
The following table presents the significant categories of cash flows was used or provided during the six-month periods ended June 30, 2024 and 2023, respectively:
Previous wording
During the three months ended March 31, 2024, operating activities provided $7.9 million in cash, as a result of $75.4 million from net income plus $24.8 million non-cash expenses such as depreciation and amortization and stock-based compensation. This amount was partly offset by $92.3 million used for the net change in operating assets and liabilities. The net change in operating assets and liabilities included an increases of $61.3 million in trade accounts receivable, $12.8 million in other current assets, and $9.1 million in inventory.
Current wording
During the six months ended June 30, 2024, operating activities provided $119.1 million in cash, as a result of $173.3 million from net income plus $47.2 million non-cash expenses such as depreciation and amortization and stock-based compensation. This amount was partly offset by $101.3 million used for the net change in operating assets and liabilities. The net change in operating assets and liabilities included increases of $95.7 million in trade accounts receivable, $19.3 million in other current assets, partly offset by a decrease of $11.7 million in inventory.
Previous wording
Cash used in investing activities of $39.4 million during the three months ended March 31, 2024, which was primarily used for facility expansion projects and machinery and equipment purchases. Due to updated forecasts on the timing of the spend and subject to future events and circumstances, capital expenditures are estimated to be approximately $185.0 million for 2024 (down from the previously forecasted $200.0 million) including the expected spend of $105.0 million on our previously announced Columbus, Ohio facility expansion and replacement of Gallatin, Tennessee facility, with some spend potentially carrying over to 2025. The remaining $80.0 million in capital expenditures will be primarily focused on purchases of new equipment to support increased productivity and efficiencies, enhancements to our existing facilities to expand our manufacturing footprint in-line with increasing customer needs, as well as investments for adjacencies and key growth initiatives.
Current wording
Cash used in investing activities of $95.7 million during the six months ended June 30, 2024 was primarily used for facility expansion projects, the acquisition of Calculated Structured Designs, Inc. (CSD), and machinery and equipment purchases. Due to updated forecasts on the timing of the spend and subject to future events and circumstances, capital expenditures are estimated to range between $180.0 million and $190.0 million for 2024 including the expected spend of $100.0 million on our previously announced Columbus, Ohio facility expansion and the construction of a new Gallatin, Tennessee facility, with the remaining spend estimated to range between $55.0 million and $60.0 million carrying over to 2025. The remaining capital expenditures will be primarily focused on purchases of new equipment to support increased productivity and efficiencies, enhancements to our existing facilities to expand our manufacturing footprint in-line with increasing customer needs, as well as investments for adjacencies and key growth initiatives.
Previous wording
Cash used in financing activities of $24.8 million during the three months ended March 31, 2024 consisted primarily of $11.4 million used to pay dividends to our stockholders, $7.5 million used to pay income taxes on behalf of employees for shares withheld with respect to their vested restricted stock units and $7.1 million used for debt repayment.
Current wording
Cash used in financing activities of $93.1 million during the six months ended June 30, 2024 consisted primarily of $50.0 million is stock repurchases, $22.9 million used to pay dividends to our stockholders and $13.9 million used for debt repayment.
Previous wording
On May 1, 2024, the Company's Board of Directors (the "Board") declared a quarterly cash dividend of $0.28 per share payable on July 25, 2024, to the Company's stockholders of record on July 4, 2024(due to July 4 being a U.S. holiday, the effective record date is July 3, 2024).
Current wording
On July 26, 2024, the Company's Board of Directors (the "Board") declared a quarterly cash dividend of $0.28 per share payable on October 24, 2024, to the Company's stockholders of record on October 3, 2024.
Previous wording
Since the beginning of 2021 through May 2, 2024, we have returned$344.9 million to stockholders, and includes repurchasing over 1.7 million shares of the Company's common stock, which represents approximately 3.9% of the outstanding shares of the Company's common stock at the start of 2021.
Current wording
Since the beginning of 2021 through June 30, 2024, we have returned $356.4 million to stockholders, which represents 43.3% of our free cash flow from operations during the same period, and over the same period the Company has repurchased over 1.6 million shares of the Company's common stock, which represents approximately 3.9% of the outstanding shares of the Company's common stock at the start of 2021.
Rearranged current paragraphs (8)
Current report — wording carried from elsewhere
United States housing starts for fiscal 2024 and beyond. These examples further emulate our Founder, Barclay Simpson’s, nine principles of doing business, and more specifically the focus and obsession on customers and users.
Current report — wording carried from elsewhere
Unless otherwise stated, the results announced below, when providing comparisons (which are generally indicated by words such as “increased,” “decreased,” “unchanged” or “compared to”), compare the results of operations for the six months ended June 30, 2024, against the results of operations for the six months ended June 30, 2023. Unless otherwise stated, the results announced below, when referencing “both periods,” refer to the six months ended June 30, 2023 and the six months ended June 30, 2024
Current report — wording carried from elsewhere
Oureffective income tax rate decreased to 25.0% from 25.5%.
Current report — wording carried from elsewhere
Adjusted EBITDA 1 of $269.9 million decreased 10.8% compared to $302.6 million primarily due to lower gross profits on lower net sales.
Current report — wording carried from elsewhere
The following table represents segment sales as percentages of total net sales for the six-month periods ended June 30, 2023 and 2024, respectively:
Current report — wording carried from elsewhere
*The statistic is not meaningful or material
Current report — wording carried from elsewhere
*The statistic is not meaningful or material.
Current report — wording carried from elsewhere
•For information about the Company's Asia/Pacific segment, please refer to the tables above setting forth changes in our operating results for the six months ended June 30, 2024 and 2023.