SIMPSON MANUFACTURING CO., INC. ANNOUNCES 2023 FOURTH QUARTER AND FULL-YEAR FINANCIAL RESULTS
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Insights
The reported increase in net sales by 5.5% for the fourth quarter and 4.6% for the full year suggests a steady growth trajectory for Simpson Manufacturing Co. This performance is particularly noteworthy given the cyclical nature of the construction industry, which can be affected by economic downturns and fluctuations in raw material costs. The rise in net income per diluted share by 6.5% year-over-year indicates an improvement in profitability, potentially reflecting effective cost management and operational efficiency.
Furthermore, the declaration of a $0.27 per share dividend demonstrates the company's commitment to returning value to shareholders and confidence in its financial stability. The repurchase of $50.0 million in common stock could be seen as a strategic move to consolidate ownership and potentially increase earnings per share, thereby making the stock more attractive to investors. However, it's essential to analyze this in the context of the company's capital allocation strategy and overall balance sheet health.
From a market perspective, the growth reported by Simpson Manufacturing Co. is significant when considering the broader industry trends. The construction sector has been facing various challenges, including supply chain disruptions and labor shortages. Despite these headwinds, the company's ability to grow sales and income suggests strong market positioning and possibly a robust product portfolio that resonates with customer needs.
Investors should also consider the competitive landscape and the company's market share. An increase in sales and net income could imply that the company is outperforming its peers or successfully capturing new market segments. This could have positive implications for the company's long-term growth prospects and its ability to innovate and adapt to market changes.
Analyzing the financial results from an economic standpoint, the reported figures by Simpson Manufacturing Co. may signal confidence in the construction and building solutions sector. This is particularly relevant given that the construction industry is often seen as an indicator of economic health. A company performing strongly in this sector could suggest underlying economic stability or growth, which in turn could influence investor sentiment and stock market performance.
However, it's crucial to consider the macroeconomic context, including interest rates, housing market trends and infrastructure spending, which can directly impact companies like Simpson Manufacturing. While the current data is positive, long-term forecasts and economic indicators should be monitored to anticipate potential shifts in the industry's performance.
- Fourth quarter net sales of
$501.7 million 5.5% year-over-year - 2023 net sales of
$2.2 billion 4.6% year-over-year - 2023 net income per diluted share of
$8.26 6.5% year-over-year - Declared a
$0.27 - Repurchased
$50.0 million
Simpson Manufacturing Co., Inc. (the "Company") (NYSE: SSD), an industry leader in engineered structural connectors and building solutions, today announced its financial results for the fourth quarter and full-year of 2023. Refer to the "Segment and Product Group Information" table below for additional segment information (including information about the Company's
All comparisons below (which are generally indicated by words such as "increased," "decreased," "remained," or "compared to"), unless otherwise noted, are comparing the quarter ended December 31, 2023 with the quarter ended December 31, 2022 or the fiscal year ended December 31, 2023 with the fiscal year ended December 31, 2022 and include the results of the acquisition of FIXCO Invest S.A.S ("ETANCO") on April 1, 2022. 2023 full year comparisons include twelve months of ETANCO operating results for the fiscal year ending December 31, 2023, compared to nine months for the fiscal year ending December 31, 2022.
2023 Fourth Quarter Financial Highlights
- Consolidated net sales of
$501.7 million 5.5% from$475.6 million North America net sales of$387.8 million 5.3% from$368.1 million Europe net sales of$109.7 million 5.8% from$103.7 million $5.1 million
- Consolidated gross profit of
$220.5 million 9.9% compared to$200.7 million 43.9% from42.2% .North America gross margin increased to47.0% from45.0% , primarily due to lower raw material and labor costs, as a percentage of net sales.Europe gross margin increased to34.2% from32.7% , primarily due to lower raw material costs as a percentage of net sales. Cost of sales in the prior year period included a$1.4 million
- Consolidated income from operations of
$71.6 million 9.1% compared to$78.7 million 14.3% from16.6% .North America income from operations of$79.8 million 6.8% compared to$85.6 million Europe income from operations increased from$0.8 million $3.1 million $1.4 million
- The Company's effective income tax rate was
26.3% , consistent with the prior period quarter. - Net income was
$54.8 million $1.28 $57.6 million $1.35 - Cash provided by operating activities was approximately
$31.7 million $104.7 million $136.4 million - Cash used in investing activities was approximately
$39.1 million $14.4 million $24.7 million $31.3 million $20.8 million
2023 Full-Year Financial Highlights
- Consolidated net sales of
$2.2 billion 4.6% from$2.1 billion $12.7 million Europe's currencies strengthening againstthe United States dollar. - Consolidated gross profit of
$1.0 billion 10.9% compared to$941.3 million 47.1% from44.5% , primarily due to lower raw material costs. Cost of sales in the prior year period included a$13.6 million - Consolidated income from operations of
$475.1 million 3.5% compared to$459.1 million 21.5% from21.7% . - The Company's effective income tax rate increased to
25.7% from25.5% . - Net income was
$354.0 million $8.26 $334.0 million $7.76 - Cash provided by operating activities was approximately
$429.9 million $30.1 million $399.8 million - Cash used in investing activities was approximately
$105.7 million $764.5 million $870.2 million $805.4 million $88.8 million $62.4 million - Cash used in financing activities was approximately
$199.4 million $465.5 million $700.0 million
Management Commentary
"We achieved above market growth and strong profitability in 2023 with
Mr. Olosky continued, "In North America, both our 2023 net sales and volume were up approximately
Mr. Olosky concluded, "While 2023 U.S. housing starts finished below 2022 levels, we still believe this is an attractive market given the estimated shortage of approximately 2 million homes in the
Corporate Developments
- During the fourth quarter of 2023, the Company repurchased 360,746 shares of common stock in the open market at an average price of
$138.60 $50.0 million $100 million - On October 19, 2023, the Company's Board of Directors (the "Board") authorized the Company to repurchase up to
$100.0 million - On January 19, 2024, the Board declared a quarterly cash dividend of
$0.27 $11.5 million
Business Outlook
Based on business trends and conditions as of today, February 5, 2024, the Company's outlook for the full fiscal year ending December 31, 2024 is as follows:
- Operating margin is estimated to be in the range of
20.0% to21.5% . - Interest expense on the outstanding Revolving Credit Facility and Term Loans, which had borrowings of
$75.0 million $410.6 million $7.9 million - The effective tax rate is estimated to be in the range of
25.0% to26.0% , including both federal and state income tax rates as well as international income tax rates, and assuming no tax law changes are enacted. - Capital expenditures are estimated to be approximately
$200.0 million $120.0 million
Conference Call Details
Investors, analysts and other interested parties are invited to join the Company's fourth quarter and full-year 2023 financial results conference call on Monday, February 5, 2024, at 5:00 p.m. Eastern Time (2:00 p.m. Pacific Time). To participate, callers may dial (877) 407-0792 (
A copy of this earnings release will be available prior to the call, accessible through the Investor Relations section of the Company's website at www.simpsonmfg.com.
About Simpson Manufacturing Co., Inc.
Simpson Manufacturing Co., Inc., headquartered in
Copies of Simpson Manufacturing's Annual Report to Stockholders and its proxy statements and other SEC filings, including Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, are made available free of charge on the company's website on the same day they are filed with the SEC. To view these filings, visit the Investor Relations section of the Company's website.
Cautionary Note Regarding Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements generally can be identified by words such as "anticipate," "believe," "estimate," "expect," "intend," "plan," "outlook," "target," "continue," "predict," "project," "change," "result," "future," "will," "could," "can," "may," "likely," "potentially," or similar expressions. Forward-looking statements are all statements other than those of historical fact and include, but are not limited to, statements about future financial and operating results, our plans, objectives, business outlook, priorities, expectations and intentions, expectations for sales and market growth, comparable sales, earnings and performance, stockholder value, capital expenditures, cash flows, the housing market, the home improvement industry, demand for services, share repurchases, our ongoing integration of ETANCO, our strategic initiatives, including the impact of these initiatives on our strategic and operational plans and financial results, and any statement of an assumption underlying any of the foregoing.
Forward-looking statements are subject to inherent uncertainties, risks and other factors that are difficult to predict and could cause our actual results to vary in material respects from what we have expressed or implied by these forward-looking statements. Important factors that could cause our actual results and financial condition to differ materially from those expressed in or implied by our forward-looking statements include the effect of global pandemics such as the COVID-19 pandemic and other widespread public health crisis and their effects on the global economy, the effects of inflation and labor and supply shortages, on our operations, the operations of our customers, suppliers and business partners, and our ongoing integration of ETANCO, as well as those discussed in the "Risk Factors" and " Management's Discussion and Analysis of Financial Condition and Results of Operations" sections of our most recent Annual Report on Form 10-K, subsequent Quarterly Reports on Form 10-Q and other reports we file with the SEC.
We caution that you should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law. Readers are urged to carefully review and consider the various disclosures made in our reports filed with the SEC that advise of the risks and factors that may affect our business, results of operations and financial condition.
Simpson Manufacturing Co., Inc. and Subsidiaries UNAUDITED Consolidated Statements of Operations (In thousands, except per share data) | |||||||
Three Months Ended | Twelve Months Ended | ||||||
2023 | 2022 | 2023 | 2022 | ||||
Net sales | $ 501,710 | $ 475,622 | $ 2,213,803 | $ 2,116,087 | |||
Cost of sales | 281,212 | 274,967 | 1,170,048 | 1,174,794 | |||
Gross profit | 220,498 | 200,655 | 1,043,755 | 941,293 | |||
Operating expenses: | |||||||
Research and development and engineering expense | 25,131 | 18,461 | 92,167 | 68,354 | |||
Selling expense | 52,483 | 44,929 | 203,980 | 169,378 | |||
General and administrative expense | 70,836 | 55,956 | 268,103 | 228,468 | |||
Total operating expenses | 148,450 | 119,346 | 564,250 | 466,200 | |||
Acquisition and integration related costs | 546 | 2,662 | 4,632 | 17,343 | |||
Gain on disposal of assets | (53) | (90) | (276) | (1,317) | |||
Income from operations | 71,555 | 78,737 | 475,149 | 459,067 | |||
Interest income (expense), net and other financing costs | 3,373 | (1,027) | 3,391 | (7,594) | |||
Other & foreign exchange gain (loss), net | (523) | 406 | (1,993) | (3,408) | |||
Income before taxes | 74,405 | 78,116 | 476,547 | 448,065 | |||
Provision for income taxes | 19,602 | 20,511 | 122,560 | 114,070 | |||
Net income | $ 54,803 | $ 57,605 | $ 353,987 | $ 333,995 | |||
Earnings per common share: | |||||||
Basic | $ 1.29 | $ 1.35 | $ 8.31 | $ 7.78 | |||
Diluted | $ 1.28 | $ 1.35 | $ 8.26 | $ 7.76 | |||
Weighted average shares outstanding: | |||||||
Basic | 42,440 | 42,572 | 42,598 | 42,925 | |||
Diluted | 42,668 | 42,680 | 42,837 | 43,047 | |||
Other data: | |||||||
Depreciation and amortization | $ 20,483 | $ 16,369 | $ 74,707 | $ 60,890 | |||
Pre-tax equity-based compensation expense | 6,070 | 1,994 | 23,859 | 14,980 | |||
Simpson Manufacturing Co., Inc. and Subsidiaries UNAUDITED Consolidated Condensed Balance Sheets (In thousands) | |||||
December 31, | |||||
2023 | 2022 | ||||
Cash and cash equivalents | $ 429,822 | $ 300,742 | |||
Trade accounts receivable, net | 283,975 | 269,124 | |||
Inventories | 551,575 | 556,801 | |||
Other current assets | 47,069 | 52,583 | |||
Total current assets | 1,312,441 | 1,179,250 | |||
Property, plant and equipment, net | 418,612 | 361,555 | |||
Operating lease right-of-use assets | 68,792 | 57,652 | |||
Goodwill | 502,550 | 495,672 | |||
Intangible assets, net | 365,339 | 362,917 | |||
Other noncurrent assets | 36,990 | 46,925 | |||
Total assets | $ 2,704,724 | $ 2,503,971 | |||
Trade accounts payable | $ 107,524 | $ 97,841 | |||
Long-term debt, current portion | 22,500 | 22,500 | |||
Accrued liabilities and other current liabilities | 231,233 | 228,222 | |||
Total current liabilities | 361,257 | 348,563 | |||
Operating lease liabilities, net of current portion | 55,324 | 46,882 | |||
Long-term debt, net of current portion and issuance costs | 458,791 | 554,539 | |||
Deferred income tax and other long-term liabilities | 149,606 | 140,608 | |||
Stockholders' equity | 1,679,746 | 1,413,379 | |||
Total liabilities and stockholders' equity | $ 2,704,724 | $ 2,503,971 | |||
Simpson Manufacturing Co., Inc. and Subsidiaries UNAUDITED Segment and Product Group Information (In thousands) | |||||||||||||
Three Months Ended | Twelve Months Ended | ||||||||||||
December 31, | % | December 31, | % | ||||||||||
2023 | 2022 | change | 2023 | 2022 | change | ||||||||
Net Sales by Reporting Segment | |||||||||||||
$ 387,805 | $ 368,129 | 5.3 % | 0.9 % | ||||||||||
Percentage of total net sales | 77.3 % | 77.4 % | 77.5 % | 80.4 % | |||||||||
109,682 | 103,712 | 5.8 % | 480,756 | 400,303 | 20.1 % | ||||||||
Percentage of total net sales | 21.9 % | 21.8 % | 21.7 % | 18.9 % | |||||||||
4,223 | 3,781 | 11.7 % | 16,625 | 14,743 | 12.8 % | ||||||||
Percentage of total net sales | 0.8 % | 0.8 % | 0.8 % | 0.7 % | |||||||||
Total | $ 501,710 | $ 475,622 | 5.5 % | 4.6 % | |||||||||
Net Sales by Product Group** | |||||||||||||
Wood Construction | $ 420,228 | $ 403,527 | 4.1 % | 2.7 % | |||||||||
Percentage of total net sales | 83.8 % | 84.8 % | 85.0 % | 86.6 % | |||||||||
Concrete Construction | 78,369 | 71,087 | 10.2 % | 320,500 | 282,205 | 13.6 % | |||||||
Percentage of total net sales | 15.6 % | 14.9 % | 14.5 % | 13.3 % | |||||||||
Other | 3,113 | 1,008 | N/M | 11,603 | 2,302 | N/M | |||||||
Total | $ 501,710 | $ 475,622 | 5.5 % | 4.6 % | |||||||||
Gross Profit (Loss) by Reporting Segment | |||||||||||||
$ 182,339 | $ 165,564 | 10.1 % | $ 862,557 | $ 810,730 | 6.4 % | ||||||||
47.0 % | 45.0 % | 50.3 % | 47.7 % | ||||||||||
37,511 | 33,925 | 10.6 % | 177,048 | 125,616 | 40.9 % | ||||||||
34.2 % | 32.7 % | 36.8 % | 31.4 % | ||||||||||
1,164 | 961 | N/M | 5,679 | 4,910 | N/M | ||||||||
Administrative and all other | (516) | 205 | N/M | (1,529) | 37 | N/M | |||||||
Total | $ 220,498 | $ 200,655 | 9.9 % | $ 941,293 | 10.9 % | ||||||||
Income (Loss) from Operations | |||||||||||||
$ 79,773 | $ 85,564 | (6.8) % | $ 473,229 | $ 485,899 | (2.6) % | ||||||||
20.6 % | 23.2 % | 27.6 % | 28.6 % | ||||||||||
3,103 | 783 | N/M | 45,998 | 11,121 | N/M | ||||||||
2.8 % | 0.8 % | 9.6 % | 2.8 % | ||||||||||
(183) | (175) | N/M | 535 | 723 | N/M | ||||||||
Administrative and all other | (11,138) | (7,435) | N/M | (44,613) | (38,676) | N/M | |||||||
Total | $ 71,555 | $ 78,737 | (9.1) % | $ 475,149 | $ 459,067 | 3.5 % | |||||||
* | Unfavorable percentage changes are presented in parentheses. | |
** | The Company manages its business by geographic segment but is presenting sales by product group as additional information. | |
N/M | Statistic is not material or not meaningful. |
CONTACT:
Addo Investor Relations
investor.relations@strongtie.com
(310) 829-5400
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SOURCE Simpson Manufacturing Co., Inc.
FAQ
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