Simpson Manufacturing Co., Inc.
For the period ended Mar 31, 2025. Filed May 9, 2025.
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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.
Mar 31, 2025 · Filed May 9, 2025
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 2024-09-30; filed 2024-11-12.
0000920371-24-000182
Item 2. - Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-03-31; filed 2025-05-09.
0000920371-25-000091
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 133 previous paragraphs and 99 current paragraphs.
40 unchanged; 31 reworded; 28 added; 56 removed; 6 previous and 0 current paragraphs rearranged.
Tables are not compared: 13 previous and 8 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 (28)
Current report
•An operating income margin at or above 20%; and
Current report
•Earnings per share growth exceeding net revenue growth
Current report
•Added approximately $1.0 billion in revenue and $200.0 million in operating profit.
Current report
•Realigned our sales team by end market, making our distribution process more efficient, and made significant investments in our field sales and engineering teams.
Current report
•Made significant footprint investments in both production and warehouses. Our investment in our new Gallatin, Tennessee facility enables us to onshore additional fastener and anchor production, and the operation will in-source key manufacturing processes such as heat treating and coating of fasteners. Additional warehouse capabilities will also enhance next day delivery for our North American customers.
Current report
•Invested significantly in digital solutions, combined with the other initiatives strengthened our business model, which drove hardware sales, created value for our customers and made us a partner of choice.
Current report
•Strengthened our senior leadership team through a combination of internal development and external experts.
Current report
During the three months ended March 31, 2025, the recent tariff and trade policy actions have not had a significant impact on our results of operations; however, we have experienced increased foreign currency exchange rate volatility, which we attribute, in part, to the rapidly changing global trade environment.
Current report
As previously announced, we will increase prices as of June 2, 2025 on certain wood connectors, fasteners and mechanical anchors in the U.S. We believe North America net sales could increase in future periods even if demand does not increase. However, increased selling prices are expected to be offset by increased non-material costs including labor, energy, transportation, and equipment. In addition, the announced price increases will partly offset the increased costs related to recently announced tariffs that effect a portion of our fastener and anchors sales.
Current report
We are closely monitoring the recent tariff and trade policy actions taken by the U.S. and foreign governments. As the situation continues to remain fluid due to the rapidly changing global trade environment, we are still evaluating the potential implications of these actions on our business. While we are largely domestically sourced, we continue to monitor macroeconomic trends such as the impact of inflation, the effects of recently implemented tariffs, and the potential imposition of modified or additional tariffs in markets where we and our supplier operate. As a result of the tariff’s announced by the U.S. presidential administration on April 2, 2025, and potential tariff modifications or the imposition of tariffs or export controls by other countries there is significant economic uncertainty. The extent and duration of tariffs and the resulting impact on macroeconomic conditions and on our business are uncertain and may depend on various factors beyond our control. We are closely monitoring the potential for the imposition of new or additional U.S. tariffs on imports, as well as potential retaliatory tariffs or other measures other countries may impose on U.S. imports, that may adversely affect the global economy. We are currently uncertain as to the ultimate impact these measure may have given the rapidly changing environment surrounding tariffs and other related political topics; however, if enacted as currently proposed, we expect that the proposed tariffs would primarily impact our North America segment as we procure fasteners and a small number of other products from countries that will be subjected to the these tariffs. Additionally, economic pressures on our customers, including the potential of higher inflation, fluctuations in consumer confidence, driven by economic concerns or price increases, such as those we recently announced, could reduce demand for our products and services negatively affecting our net sales and profitability in the future.
Current report
Operating income increased 5.4% to $104.2 million from $98.9 million. The increase was primarily due to higher gross profits, partially offset by higher operating expenses. The operating expense increases were driven by higher personnel costs and variable incentive compensation costs. For 2025, incremental investments in the current business will be limited until the U.S. housing market shows long-term improvement.
Current report
Based on business trends and conditions, the Company's outlook for the full fiscal year ending December 31, 2025, is as follows:
Current report
◦Given the uncertainty regarding 2025 U.S. housing starts compared to prior year housing starts, consolidated operating margin is estimated to be in the range of 18.5% to 20.5% with the low end of the range based on flat to declining 2025 housing starts compared to prior year and price increases implemented in 2025. The operating margin range includes a projected benefit of between $10.0 million and $12.0 million from the sale of the existing Gallatin, Tennessee facility based on a contracted sales price of $19.1 million.
Current report
Research and development and engineering expense decreased 9.5% to $19.8 million from $21.9 million. Due to the reorganization of the Company’s digital solution efforts, related expenses previously classified as research and development and engineering during 2024 were classified as general administrative for the current year. For 2024, engineering costs related to the Company's digital efforts amounted to $2.5 million and were primarily comprised of personnel costs.
Current report
Selling expense decreased 0.6% to $54.2 million from $54.5 million. Due to the reorganization of the Company’s digital solution efforts, related expenses previously classified as selling expense during 2024 were classified as general administrative for the current year. For 2024, engineering costs related to the Company's digital efforts amounted to $1.5 million and were primarily comprised of personnel costs.
Current report
General and administrative expense increased 7.8% to $75.7 million from $70.2 million. Due to the reorganization of the Company’s digital solution efforts, related expenses previously classified as research and development and engineering as well as selling expense during 2024 were classified as general administrative for the current year. For 2024, engineering costs related to the Company's digital efforts amounted to $4.0 million and were primarily comprised of personnel costs.
Current report
Consolidated net incomewas $77.9 million compared to $75.4 million. Diluted earnings per share was $1.85 compared to $1.77.
Current report
The following table shows gross margins by segment for the three months ended March 31, 2025 and 2024, respectively:
Current 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.”
Current report
•Net sales increased 3.4%, primarily due to incremental sales from the Company's 2024 acquisitions and timing of volume discount estimates that negatively impacted 2024 net sales. The increases were partly offset by the negative effect of approximately $1.5 million in foreign currency translation.
Current report
•Gross margin increased to 50.0% from 49.3%, timing of 2024 volume discount estimates, as noted earlier.
Current report
•Research, development and engineering expense decreased 11.5% due to the reorganization of the Company’s digital solution efforts related expenses, which were previously classified as research and development and engineering during 2024 and are classified as general administrative for the current year. For 2024, engineering costs related to the Company's digital efforts amounted to $2.5 million and were primarily comprised of personnel costs.
Current report
•Selling expense increased 0.7% due to the reorganization of the Company’s digital solution efforts related expenses, which were previously classified as selling expense during 2024 and are classified as general administrative for the current year. For 2024, engineering costs related to the Company's digital efforts amounted to $1.5 million and were primarily comprised of personnel costs.
Current report
•General and administrative expense increased 15.4% due to the reorganization of the Company’s digital solution efforts related expenses which were previously classified as research and development and engineering and selling expense during 2024 and are classified as general administrative for the current year. For 2024, engineering costs related to the Company's digital efforts amounted to $4.0 million and were primarily comprised of personnel costs.
Current report
•Income from operations increased by $5.3 million due to the factors discussed above.
Current report
•Net sales decreased 5.1%, primarily due to the negative effect of approximately $4.0 million in foreign currency translation.
Current report
•Income from operations increased by $1.0 million to $9.3 million from $8.3 million mainly due to a 8.6% decrease in operating expenses including variable compensation costs.
Current report
We believe the Company's balances of cash and cash equivalents, cash flows from operating activities, and access to borrowings under our credit facilities are sufficient to satisfy its liquidity requirements and capital needs over the next 12 months and beyond.
Removed paragraphs (56)
Previous report
•An operating income margin within the top quartile of our proxy peers; and
Previous report
•Long-term, return to the top quartile of our proxy peers for return on invested capital.
Previous report
•The continued integration of ETANCO which has resulted in additional scale for our legacy European operations, as well as the opportunity to realize synergies in those operations;
Previous report
•North America sales volume grew by 500 basis points ahead of U.S. housing starts over the trailing twelve months ending September 30, 2024;
Previous report
•Acquisitions of a software company and a manufacturer of equipment used by component manufacturers as well as a manufacturer of pre-engineered structural support systems to expand our offering of solutions and potentially accelerate growth in the market;
Previous report
•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 report
•Recaptured a number of lumber dealers and a large Northwest pro-dealer in North America with the opportunity to expand the products lines;
Previous report
•Developed a national relationship with a leading building products manufacturer in North America to provide connectors and fasteners for their offsite construction solutions;
Previous report
•Rolled out 47 new products, globally, during the first three quarters of 2024; and
Previous report
•Converted component manufacturers to using our truss software and purchasing our truss plate and connector solution sets, including a major component manufacture.
Previous report
Operating income decreased $39.2 million on lower gross profitsas well as increased personnel costs (including engineering services), professional fees, and advertising and trade shows costs. Fiscal 2024 operating margins have and will include anticipated acquisition and integration related costs. North America 2024 results were impacted by economic headwinds but we believe in the long term potential given the on-going housing shortage.
Previous report
The Company updated its financial outlook for the full fiscal year ending December 31, 2024 based on three quarters of actual results, and its latest expectations regarding demand trends, raw material costs and operating expenses as follows:
Previous report
◦Operating margin is estimated to be in the range of 19.0% to 19.5%, including approximately $85.0 million in depreciation and amortization expense.
Previous report
Research and development and engineering expense decreased 4.3% to $23.7 million from $24.8 million, primarily due to decreases of $1.5 million in professional fees and $1.3 million in variable incentive compensation costs, partially offset by an increase of $1.1 million in personnel costs.
Previous report
Selling expense increased 4.2% to $54.6 million from $52.4 million, primarily due to increases of $3.8 million in personnel costs and $1.3 million in advertising and tradeshow costs, offset by decreases of $2.9 million of variable incentive compensation costs and $0.5 million in travel related costs.
Previous report
General and administrative expense increased 9.3% to $70.6 million from $64.8 million, primarily due to increases of $4.7 million in personnel costs, $4.6 million in professional fees, and $2.6 million in computer software and hardware costs, partially offset by decreases of $4.6 million of variable incentive compensation costs.
Previous report
Consolidated net incomewas $93.5 million compared to $104.0 million, primarily due to lower gross profits and higher operating expenses, as noted above. Diluted earnings per share was $2.21 compared to $2.43.
Previous report
The following table shows gross margin by segment for the three months ended September 30, 2024 and 2023, respectively:
Previous report
•Net sales increased 1.0%, primarily due to increase in sales prices resulting from a favorable sales mix on relatively flat sales volumes and incremental sales from the Company's 2024 acquisitions.
Previous report
•Gross margin decreased to 49.5% from 51.8%, primarily due to higher labor, factory overhead, warehouse and freight costs as percentages of net sales, partially offset by efficiency gains.
Previous report
•Research, development and engineering expense decreased 7.1%, primarily due to decreases of $1.5 million in professional fees and $1.3 million of variable incentive compensation costs.
Previous report
•Selling expense increased 4.3%, primarily due to increases of $3.4 million in personnel costs and $1.1 million in advertising and trade shows, partially offset by a decrease of $2.9 million in variable incentive compensation costs.
Previous report
•General and administrative expense increased 10.6%, primarily due to increases of $3.7 million in professional fees, $2.4 million in personnel costs, partially offset by decreases of $2.3 million in variable incentive compensation costs and personnel costs as well as an increase of $1.2 million in computer and software costs, net of amounts capitalized.
Previous report
•Income from operations decreased by $12.4 million due to lower gross profit and higher operating expenses as noted above.
Previous report
•Net sales increased 1.8%, primarily due to increased sales volumes, partly offset by price decreases in some regions as well as the positive effect of $1.5 million in foreign currency translations.
Previous report
•Income from operations decreased by $2.8 million to $12.6 million from $15.5 million due to lower gross margins and higher personnel costs, partially offset by lower variable incentive compensation costs.
Previous report
Results of Operations for the Nine Months Ended September 30, 2024, Compared with the Nine Months Ended September 30, 2023
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Year-to-Date (9-month) 2024 Consolidated Financial Highlights
Previous report
The following table illustrates the differences in our operating results for the nine months ended September 30, 2024, from the nine months ended September 30, 2023, and the increases or decreases for each category by segment:
Previous report
Net sales increased 0.2% to $1,714.7 million from $1,712.1 million due to higher sales volumes and a favorable average pricing mix of product sold. Wood construction product sales represented 84.6% and 85.4% of the Company's total sales in the first nine months of 2024 and 2023. Concrete construction product sales represented 14.7% and 14.1% of the Company's total sales in the first nine months of 2024 and 2023.
Previous report
Gross profit decreased 3.0% to $798.2 million from $823.3 million. Gross margins decreased to 46.5% from 48.1%. The decrease is due to higher factory and tooling and warehouse costs for the Company overall. Gross margins decreased to 46.3% from 48.1% for wood construction products and increased to 48.0% from 47.0% for concrete construction products.
Previous report
Research and development and engineering expense increased 1.9% to $68.3 million from $67.0 million primarily due to increases of $3.4 million in personnel costs, $1.3 million in depreciation and amortization expense, and $0.9 million in professional fees, partially offset by a decrease of $2.5 million in variable incentive compensation costs.
Previous report
Selling expense increased to $165.0 million from $151.5 million, primarily due to increases of $12.5 million in personnel costs, $3.5 million in advertising costs, and $1.6 million in computer and software costs, net of amount capitalized, partially offset by a decrease of $5.5 million of variable incentive compensation costs.
Previous report
General and administrative expense increased to $207.2 million from $197.3 million, primarily due to increases of $10.0 million in personnel costs, $6.2 million in professional fees, $1.3 million in computer and software costs net of amount capitalized, partially offset by a decrease of $9.3 million of variable incentive compensation costs.
Previous report
Oureffective income tax rate decreased to 25.4% from 25.6%.
Previous report
Consolidated net incomewas $266.8 million compared to $299.2 million primarily due to lower gross profits and higher operating expenses, as noted above. Diluted earnings per share was $6.28 compared to $6.98.
Previous report
Adjusted EBITDA 1 of $418.1 million decreased 9.4% compared to $461.4 million primarily due to lower gross profits and higher operating expenses.
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Net sales
Previous report
The following table represents net sales by segment for the nine-month periods ended September 30, 2023 and 2024:
Showing the first 40 of 56 passages. Open the source sections for the rest.
Reworded paragraphs (31)
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. 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.
Current wording
To grow in these markets, we aspire to be among the leaders in engineered, load-rated construction building products and systems as well as 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 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
Our commitment to continuous improvement has fostered our core Company ambitions, which we continue to pursue including:
Current wording
Our commitment to continuous improvement has fostered our core Company ambitions, which we will pursue including:
Previous 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);
Current wording
•Above market growth relative to U.S. housing starts (exceeding our historical average volume performance in North America of approximately 250 basis points above the housing starts market);
Previous wording
We have made progress towards our key growth initiatives since they were first announced in 2021. A number of recent examples include:
Current wording
Since announced in 2021, we have made great progress on our key growth initiatives. Examples include:
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 North America relative to
Current wording
As a result, we believe we are now in an even stronger market position in connectors with significant gains in both fasteners and anchors. In addition, due to 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, we believe we can continue to achieve above market growth in the North America relative to U.S. housing starts for fiscal 2025 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.
Previous wording
In addition to financial information prepared in accordance with GAAP, we use Adjusted EBITDA as a non-GAAP financial measure in evaluating the ongoing operating performance of our business. The Company defines adjusted EBITDA as net income (loss) before income taxes, adjusted to exclude depreciation and amortization, integration, acquisition and restructuring costs, non-qualified deferred compensation adjustments, 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. We believe this will also provide a better approximation of our cash flows compared to operating income. This Quarterly Report on Form 10-Q 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 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act").
Current wording
In addition to financial information prepared in accordance with GAAP, we use adjusted EBITDA as a non-GAAP financial measure in evaluating the ongoing operating performance of our business. We define adjusted EBITDA as net income (loss) before income taxes, adjusted to exclude depreciation and amortization, integration, acquisition and restructuring costs, non-qualified deferred compensation adjustments, 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). This provides additional insight into the Company’s operating performance in light of the significant levels of growth investment we have made in our operations, the effect depreciation as well as acquisition and integration costs will have on our operating results. We believe 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 depend in large part on the level of United States housing starts and residential construction activity. Overall housing starts decreased 1.6% over the trailing twelve months ending September, 30, 2024 compared to the trailing twelve months ending September 30, 2023. 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
Our business, financial condition, and results of operations depend in large part on the level of U.S. housing starts and residential construction activity. Overall housing starts decreased slightly under the trailing twelve months ending March 31, 2025, compared to the trailing twelve months ending March 31, 2024. Lower housing starts in the U.S. could result in lower demand, which would affect our sales and possibly operating profit.
Previous wording
Unlike lumber or other products that have a more direct correlation to United States housing starts, our products are used to a greater extent in areas that are subject to natural forces, such as seismic or wind events. Our products are generally used in a sequential progression that follows the construction process. Residential and commercial construction begins with the foundation, followed by the wall and the roof systems, and then the installation of our products, which flow into a project or a house according to these schedules.
Current wording
Unlike lumber or other products that have a more direct correlation to U.S. housing starts, our products are used to a greater extent in areas that are subject to natural forces, such as seismic or wind events. Our products are generally used in a sequential progression that follows the construction process. Residential and commercial construction begins with the foundation, followed by the wall and the roof systems, and then the installation of our products, which flow into a project or a house according to these schedules.
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. 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.
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. Increased tariffs (as noted above), political uncertainty, and rising costs, can also have an effect on our gross and operating profits as well. Due to efforts in diversifying our geographic footprint, product offerings, and changing our path to market in the U.S., sales from our product lines, 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. Changes in labor, freight and warehousing costs, could also negatively impact gross profit depending on timing and amount of sales price can be increased to offset the higher 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 decreased slightly for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023. Our wood construction product net sales decreased 0.9% for the nine months ended September 30, 2024 compared to September 30, 2023. Our concrete construction product sales increased 5.9% over the same periods. We believe the United States 2024 housing starts market will be down relative to fiscal year 2023 housing starts. For the trailing twelve month period, housing starts have decreased compared to the prior twelve month period, while the Company's North America sales volumes increased 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.
Current wording
Historically, our North America segment has generated more revenues from wood construction products compared to concrete construction products. North America net sales increased for the quarter ended March 31, 2025 compared to March 31, 2024, due to incremental sales from the Company's 2024 acquisitions and timing of volume discount estimates that negatively impacted 2024 net sales. The increases were partly offset by the negative effect of approximately $1.5 million in foreign currency translation. Our wood construction product net sales increased 3.5% for the quarter ended March 31, 2025 compared to March 31, 2024. Our concrete construction product sales increased 0.7% over the same periods. For 2025, U.S. housing starts could stay flat or increase in the low-single digit range from 2024 levels, with growth weighted towards the second half of the year. With the investments we have made, we believe we will be able to continue to grow net sales above the U.S. housing starts market, one of our ambitions.
Previous 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.
Current wording
During 2025, work continued on our Columbus, Ohio facility expansion as well as the construction our new Gallatin, Tennessee facility. We expect the expansion and operation of these facilities to be completed and commence in 2025. The expanded and new facilities are expected to 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 net sales decreased slightly for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023, due tolower sales volumes and some regional price decreases, offset by the positive effect of $3.1 million in foreign currency translation, Wood construction product sales were flatfor the nine months ended September 30, 2024 compared to September 30, 2023 and concrete construction product sales, which are mostly project based, decreased slightly over the same periods. Gross profit decreased $5.4 million primarily due to increased factory overhead, warehouse and freight costs, as a percentage of net sales. Operating income decreased $9.9 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$3.5 million to $4.0 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 5.1% for the quarter ended March 31, 2025 compared to March 31, 2024, primarily due the negative effect of approximately $4.0 million in foreign currency translation. Wood construction product sales decreased 4.6% for the quarter ended March 31, 2025 compared to March 31, 2024 and concrete construction product sales, which are mostly project based, decreased 7.3% for the quarter ended March 31, 2025 compared to March 31, 2024. Gross profit decreased $3.8 million primarily due to higher factory and overhead, labor, as well as warehouse costs, partly offset by lower material costs. Operating income increased $1.1 million primarily due to a decrease in operating expenses including variable compensation costs.We currently anticipate Europe 2025 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 effective tax rate is estimated to be in the range of 25.3% to 25.8%, including both federal and state income tax rates as well as international income tax rates, and assuming no tax law changes are enacted.
Current wording
◦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 as well as international income tax rates, and assuming no tax law changes are enacted.
Previous wording
◦Capital expenditures are estimated to range between $175.0 and $185.0 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.
Current wording
◦Capital expenditures are estimated to be approximately $150.0 million to $170.0 million, which includes $75.0 million for the Columbus, Ohio facility expansion and construction of the new Gallatin, Tennessee facility.
Previous wording
Third Quarter 2024 Consolidated Financial Highlights
Current wording
First Quarter 2025 Consolidated Financial Highlights
Previous wording
The following table shows the changes in the Company's results of operations from the three months ended September 30, 2023 to the three months ended September 30, 2024, and the increases or decreases for each category by segment:
Current wording
The following table shows the change in the Company's results of operations from the three months ended March 31, 2024 to the three months ended March 31, 2025, and the increases or decreases for each category by segment:
Previous wording
Net sales increased 1.2% to $587.2 million from $580.1 million due to a favorable sales mix and incremental sales from the Company's 2024 acquisitions. Wood construction product sales, including sales of connectors, truss plates, fastening systems, fasteners and shearwalls, represented 84.2% and 84.7% of the Company's total sales in the third 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 14.8% and 14.5% of the Company's total sales in the third quarters of 2024 and 2023, respectively.
Current wording
Netsales increased 1.6% to $538.9 million from $530.6 million. As noted above, North America sales increased primarily due to incremental sales from the Company's 2024 acquisitions and timing of volume discount estimates that negatively impacted 2024 net sales. The increases were partly offset by the negative effect of foreign currency translation of approximately $1.5 million from North America and approximately $4.0 million from Europe. Wood construction product sales, including sales of connectors, truss plates, fastening systems, fasteners and shearwalls, represented approximately 85.3% and 85.1%of the Company's total sales in the first quarters of 2025 and 2024, respectively. Concrete construction product sales, including sales of adhesives, chemicals, mechanical anchors, powder actuated tools and reinforcing fiber materials, represented 14.4% and 14.8% of the Company's total sales in the first quarters of 2025 and 2024, respectively.
Previous wording
Gross profit decreased 2.8% to $275.1 million from $282.9 million primarily due to changes in product mix and higher factory overhead and labor costs. As a result, consolidated gross margins were 46.8% compared to 48.8% last year. From a product perspective, gross margin decreased to 46.3% from 48.6% for wood construction products and increased to 49.8% from 47.9% for concrete construction products, respectively.
Current wording
Gross profit increased 3.1% to $252.0 million from $244.6 million primarily due to timing of 2024 volume discount estimates, as noted above, partially offset by increase in higher factory and overhead, labor, as well as warehouse costs. As a result, consolidated gross margins were 46.8% compared to 46.1% last year. From a product perspective, gross margin remained relatively flat at approximately 46.0% for wood construction products and increased to 49.5% from 46.5% for concrete construction products, respectively.
Previous wording
Our effective income tax rate increased to 26.1% from 25.7%.
Current wording
Our effective income tax rate increased to 25.5% from 23.4%.
Previous wording
Adjusted EBITDA 1 of $148.2 million decreased 6.7% compared to $158.8 million, primarily due to lower gross profits and higher operating expenses, as noted above.
Current wording
Adjusted EBITDA 1 of $121.8 million increased 3.8% compared to $117.3 million, primarily due to higher gross profits, as noted above.
Previous wording
The following table shows gross profit (loss) by segment for the three months ended September 30, 2024 and 2023, respectively:
Current wording
The following table shows gross profit by segment for the three months ended March 31, 2025 and 2024, respectively:
Previous wording
•Gross margin decreased to 36.6% from 37.9%, primarily due to higher labor, factory and overhead, and warehouse and freight costs, partly offset by lower material costs, as a percentages of net sales.
Current wording
•Gross margin decreased to 35.2% from 36.5%primarily due to higher factory and overhead, labor, as well as warehouse costs, partly offset by lower material costs, as a percentage of net sales.
Previous wording
*Other: Includes acquisition, integration, restructuring related expenses, non-qualified deferred compensation plan adjustments, other & foreign exchange loss net, and net loss or gain on disposal of assets.
Current wording
*Other: Includes acquisition integration and restructuring related expenses, non-qualified deferred compensation plan adjustments, other & foreign exchange loss net, and net loss or gain on disposal of assets.
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 $50.0 million and for a 5-year term loan facility of $450.0 million. As of September 30, 2024, the Company had borrowings of $75.0 million under the revolving credit facility and $393.8 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 a Credit Agreement. The 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, 2025, the Company had no borrowings under the revolving credit facility and had $382.5 million under the term loan facility and has $450.0 million available to borrow under the revolving credit facility.
Previous wording
As of September 30, 2024, our cash and cash equivalents consisted of deposits and money market funds held with established national financial institutions including $118.3 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.
Current wording
As of March 31, 2025, our cash and cash equivalents consisted of deposits and money market funds held with established national financial institutions, including $89.5 million that is 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 nine-month periods ended September 30, 2024 and 2023, respectively:
Current wording
The following table presents the significant categories of cash flows used or provided during the three-month periods ended March 31, 2025 and 2024, respectively:
Previous wording
During the nine months ended September 30, 2024, operating activities provided $222.4 million in cash, as a result of $266.8 million from net income plus $75.6 million non-cash expenses such as depreciation and amortization and stock-based compensation. This amount was partly offset by $120.0 million used for the net change in operating assets and liabilities. The net change in operating assets and liabilities included increases of $73.5 million in trade accounts receivable and $28.1 million in inventory.
Current wording
During the three months ended March 31, 2025, operating activities provided $7.6 million in cash, as a result of $77.9 million from net income plus $28.2 million non-cash expenses such as depreciation and amortization, stock-based compensation, and leases. This amount was partly offset by $98.5 million used for the net change in operating assets and liabilities. The net change in operating assets and liabilities included increases of $85.4 million in trade accounts receivable and $18.5 million in inventory.
Previous wording
Cash used in investing activities of $202.1 million during the nine months ended September 30, 2024 was primarily used for facility expansion projects, and machinery and equipment purchases as well as the acquisitions of Calculated Structured Designs, Inc., Monet DeSauw Inc. and certain properties of Callaway Properties, LLC and QuickFrames USA, LLC. Due to updated forecasts on the timing of the spend and subject to future events and circumstances, capital expenditures are estimated to range between $175.0 million and $185.0 million for 2024 including the expected spend of $90.0 million to $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 $65.0 million and $75.0 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.
Current wording
Cash used in investing activities of $50.1 million during the three months ended March 31, 2025, 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 in the range of $150.0 million to $170.0 million, which includes approximately $75.0 million remaining for both the Columbus, Ohio facility expansion and the new Gallatin, Tennessee facility. 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 $111.0 million during the nine months ended September 30, 2024 consisted primarily of $50.0 million in stock repurchases, $34.7 million used to pay dividends to our stockholders and $20.1 million used for debt repayment.
Current wording
Cash used in financing activities of $42.8 million during the three months ended March 31, 2025 consisted primarily of$25.0 million in share repurchases,$11.7 million used to pay dividends to our stockholders, and $6.8 million used for debt repayment.
Previous wording
On October 23, 2024, the Company's Board of Directors (the "Board") declared a quarterly cash dividend of $0.28 per share payable on January 23, 2025, to the Company's stockholders of record on January 2, 2025, and authorized the Company to repurchase up to $100.0 million of the Company's common stock, effective January 1, 2025 through December 31, 2025.
Current wording
On May 6, 2025, the Company's Board of Directors (the “Board”) declared a quarterly cash dividend of $0.29 per share payable on July 24, 2025, to the Company's stockholders of record on July 3, 2025.
Previous wording
Since the beginning of 2021 through November 5, 2024, we have returned $418.4 million to stockholders, which represents 47.5% of our free cash flow from operations during the same period, and over the same period the Company has repurchased over 1.9 million shares of the Company's common stock, which represents approximately 4.5% of the outstanding shares of the Company's common stock at the start of 2021.
Current wording
Since the beginning of 2022 through May 7, 2025, we have returned$401.0 million to stockholders, which includes the repurchase of over 1.9 million shares of the Company's common stock, representing approximately 4.3% of the outstanding shares of the Company's common stock at the start of 2022.
Rearranged previous paragraphs (6)
Previous report — wording carried 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.
Previous report — wording carried 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 nine months ended September 30, 2024, against the results of operations for the nine months ended September 30, 2023. Unless otherwise stated, the results announced below, when referencing “both periods,” refer to the nine months ended September 30, 2023 and the nine months ended September 30, 2024.
Previous report — wording carried elsewhere
The following table represents segment sales as percentages of total net sales for the nine-month periods ended September 30, 2023 and 2024, respectively:
Previous report — wording carried elsewhere
*The statistic is not meaningful or material
Previous report — wording carried elsewhere
*The statistic is not meaningful or material.
Previous report — wording carried 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 nine months ended September 30, 2024 and 2023.