Simpson Manufacturing Co., Inc. Announces 2025 First Quarter Financial Results and Reaffirms 2025 Guidance
-- Net sales of $538.9 million increased 1.6% year-over-year
-- Income from operations of $102.3 million, resulting in operating income
margin of 19.0%
-- Net income per diluted share of $1.85
-- Repurchased $25.0 million in common stock
PLEASANTON, Calif., April 28, 2025 /PRNewswire/ -- Simpson Manufacturing Co., Inc. (the "Company") (NYSE: SSD), an industry leader in engineered structural connectors and building solutions, today announced its financial results for the first quarter of 2025. All comparisons below (which are generally indicated by words such as "increased," "decreased," "remained," or "compared to"), unless otherwise noted, are comparing the quarter ended March 31, 2025 with the quarter ended March 31, 2024.
Consolidated 2025 First Quarter Highlights
Three Months Ended Year-Over-
March 31, Year
2025 2024 Change
(In thousands, except per share data and
percentages)
Net sales $538,895 $530,579 1.6 %
Gross profit 252,040 244,556 3.1 %
Gross profit margin 46.8 % 46.1 %
Total operating expenses 149,669 146,610 2.1 %
Income from operations 102,319 96,098 6.5 %
Operating income margin 19.0 % 18.1 %
Net income $77,884 $75,430 3.3 %
Net income per diluted common share $1.85 $1.77 4.5 %
Adjusted EBITDA(1) $121,769 $117,282 3.8 %
Trailing Twelve Months Ended Year-Over-
March 31, Year
2025 2024 Change
(In thousands, except percentages)
Total U.S. Housing starts(2) 1,362 1,426 (4.5) %
_____________________
(1) Adjusted EBITDA is a non-GAAP financial measure and is defined in the Non-GAAP Financial Measures section of this press release. For a reconciliation of Adjusted EBITDA to U.S. GAAP ("GAAP") net income, see the schedule titled "Reconciliation of Non-GAAP Financial Measures."
(2) Source: United States Census Bureau.
Management Commentary
"Our first quarter net sales reflected modest growth over the prior year in a highly uncertain macroeconomic environment in both the U.S. and Europe," commented Mike Olosky, President and Chief Executive Officer of Simpson Manufacturing Co., Inc. "I'm pleased to report that our volume performance in North America once again exceeded U.S. housing starts by approximately 420 basis points over the trailing twelve months. Our sales included a $9.0 million benefit from our 2024 acquisitions and a favorable comparison to the prior year which was adversely affected by the timing of volume discount estimates, collectively more than offsetting a modest decline in volume. Absent these factors, North America net sales were relatively flat year-over-year. In Europe, though our sales moderately declined, we believe our volumes have outperformed the broader market."
Mr. Olosky continued, "As previously announced, we implemented price increases across our product lines in the U.S., effective June 2(nd). Since our last pricing change, which was a decrease a few years ago, we have experienced significant increases in our costs. Additionally, while we are largely domestically sourced, we procure fasteners and a limited number of other products from countries that are subject to the recently announced tariffs. Accordingly, the price increases were an effort to offset rising costs across both non-material and material categories as well as a portion related to current trade policy actions. These increases, combined with cost discipline and productivity improvements, will help us maintain our current gross margin and make selective investments to provide even better customer service. We believe our focus on managing costs while improving our position in diversified end markets has strengthened our business through the cycle, particularly in a soft housing market. We remain confident in our mid to long-term housing outlook and believe Simpson is well positioned to capitalize on future growth."
North America Segment 2025 First Quarter Financial Highlights
-- Net sales of $420.7 million increased 3.4% from $406.7 million 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.
-- Gross margin increased to 50.0% from 49.3% primarily due to timing of
2024 volume discount estimates, as noted above.
-- Income from operations of $104.2 million increased 5.4% from $98.9
million. The increase was primarily due to higher gross profits, partly
offset by higher operating expenses. The operating expense increases
were driven by higher personnel costs and variable incentive
compensation.
Europe Segment 2025 First Quarter Financial Highlights
-- Net sales of $113.9 million decreased 5.1% from $119.9 million,
primarily due to the negative effect of approximately $4.0 million in
foreign currency translation.
-- 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.
-- Income from operations of $9.3 million increased 12.7% from $8.3 million
primarily due to a decrease in operating expenses including variable
compensation costs.
Refer to the "Segment and Product Group Information" table below for additional segment information (including information about the Company's Asia/Pacific and Administrative and All Other segments).
Corporate Developments
-- The Company repurchased 146,640 shares of the Company's common stock in
the open market at an average price of $170.48 per share, for a total of
$25.0 million. As of March 31, 2025, approximately $75.0 million
remained available for share repurchases through December 31, 2025 under
the Company's previously announced $100.0 million share repurchase
authorization.
-- In 2025, some of the engineering costs related to the Company's digital
efforts that were part of research and development and engineering
expense as well as selling expense are now being included in general and
administrative expense. Accordingly, the financial results for the
current period may not be directly comparable to those of previous
periods.
Balance Sheet & 2025 First Quarter Cash Flow Highlights
-- As of March 31, 2025, cash and cash equivalents totaled $150.3 million
with total debt outstanding of $382.5 million under the Company's $450.0
million credit facility.
-- Cash provided by operating activities of $7.6 million decreased from
$7.9 million.
-- Cash used in investing activities of $50.5 million increased from $39.4
million due to increased capital expenditures.
Business Outlook
The Company is reaffirming its prior 2025 financial outlook after a reevaluation of business conditions, given the uncertainties noted below. As of today, April 28, 2025, the Company's outlook for the full fiscal year ending December 31, 2025 is as follows:
-- 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 to $12.0 million from the
sale of the Gallatin property based on a contracted sales price of $19.1
million.
-- 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.
-- 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 fastener facility construction.
Conference Call Details
Investors, analysts and other interested parties are invited to join the Company's first quarter 2025 financial results conference call on Monday, April 28, 2025, at 5:00 p.m. Eastern Time (2:00 p.m. Pacific Time). To participate, callers may dial (877) 407-0792 (U.S. and Canada) or (201) 689-8263 (International) approximately 10 minutes prior to the start time. The call will be webcast simultaneously and can be accessed through https://viavid.webcasts.com/starthere.jsp?ei=1713626&tp_key=c49b3a5601 or a link on the Investor Relations section of the Company's website at https://ir.simpsonmfg.com/events-and-presentations. For those unable to participate during the live broadcast, a replay of the call will also be available beginning that same day at 8:00 p.m. Eastern Time until 11:59 p.m. Eastern Time on Monday, May 12, 2025, by dialing (844) 512-2921 (U.S. and Canada) or (412) 317-6671 (International) and entering the conference ID: 13752753. The webcast will remain posted on the Investor Relations section of the Company's website for 90 days.
A copy of this earnings release will be available prior to the call, accessible through the Investor Relations section of the Company's website at www.simpsonmfg.com.
About Simpson Manufacturing Co., Inc.
Simpson Manufacturing Co., Inc., headquartered in Pleasanton, California, through its subsidiary, Simpson Strong-Tie Company Inc., designs, engineers and is a leading manufacturer of wood construction products, including connectors, truss plates, fastening systems, fasteners and shearwalls, and concrete construction products, including adhesives, specialty chemicals, mechanical anchors, powder actuated tools and reinforcing carbon and glass fiber materials. The Company primarily supplies its building product solutions to both the residential and commercial markets in North America and Europe. The Company's common stock trades on the New York Stock Exchange under the symbol "SSD."
Copies of Simpson Manufacturing's Annual Report to Stockholders and its proxy statements and other SEC filings, including Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, are made available free of charge on the company's 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 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 tariffs and international trade policies on our business operations, the effects of inflation and labor and supply shortages on our operations and the operations of our customers, suppliers and business partners, the effect of a global pandemic such as the COVID-19 pandemic or other widespread public health crisis and their effects on the global economy 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.
Non-GAAP Financial Measures
This press release includes certain financial information, not prepared in accordance with Generally Accepted Accounting Principles in the United States ("GAAP"). Since not all companies calculate non-GAAP financial information identically (or at all), the presentations herein may not be comparable to other similarly titled measures used by other companies. Further, these measures should not be considered substitutes for the performance measures derived in accordance with GAAP. The Company uses Adjusted EBITDA as an additional financial measure in evaluating the ongoing operating performance of its business. The Company believes Adjusted EBITDA allows it to readily view operating trends, perform analytical comparisons, and identify strategies to improve operating performance. Adjusted EBITDA should not be considered in isolation or as a substitute for GAAP financial measures such as net income or any other performance measures derived in accordance with GAAP. See the Reconciliation of Non-GAAP Financial Measures below.
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 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).
Simpson Manufacturing Co., Inc. and Subsidiaries
UNAUDITED Condensed Consolidated Statements of Operations
(In thousands, except per share data)
Three Months Ended March 31,
2025 2024
Net sales $538,895 $530,579
Cost of sales 286,855 286,023
Gross profit 252,040 244,556
Research and development and engineering expense 19,839 21,918
Selling expense 54,164 54,499
General and administrative expense 75,666 70,193
Total operating expenses 149,669 146,610
Acquisition and integration related costs 127 2,046
Net gain on disposal of assets (75) (198)
Income from operations 102,319 96,098
Interest income, net and other finance costs 1,103 351
Other & foreign exchange gain, net 1,058 1,969
Income before taxes 104,480 98,418
Provision for income taxes 26,596 22,988
Net income $77,884 $75,430
Earnings per common share:
Basic $1.86 $1.78
Diluted $1.85 $1.77
Weighted average shares outstanding
Basic 41,846 42,386
Diluted 42,010 42,630
Cash dividends declared per common share $0.28 $0.27
Other Data:
Depreciation and amortization $19,522 $19,189
Pre-tax equity-based compensation expense $6,538 $5,346
Simpson Manufacturing Co., Inc. and Subsidiaries
UNAUDITED Condensed Consolidated Balance Sheets
(In thousands)
March 31, December 31,
2025 2024 2024
Cash and cash equivalents $150,290 $369,122 $239,371
Trade accounts receivable, net 373,198 343,414 284,392
Inventories 618,784 555,745 593,175
Other current assets 64,760 60,473 59,383
Total current assets 1,207,032 1,328,754 1,176,321
Property, plant and equipment, net 568,855 437,429 531,655
Operating lease right-of-use assets 101,701 65,933 93,933
Goodwill 526,441 492,767 512,383
Intangible assets, net 382,079 352,527 375,051
Other noncurrent assets 39,637 44,536 46,825
Total assets $2,825,745 $2,721,946 $2,736,168
Trade accounts payable $118,019 $102,997 $100,972
Long-term debt, current portion 22,500 22,500 22,500
Accrued liabilities and other current liabilities 242,917 226,944 242,876
Total current liabilities 383,436 352,441 366,348
Operating lease liabilities, net of current portion 82,913 52,051 76,184
Long-term debt, net of current portion and issuance costs 357,278 453,454 362,563
Deferred income tax 90,346 96,937 90,303
Other long-term liabilities 41,871 41,400 27,636
Non-qualified deferred compensation plan share awards 8,804 7,786
Stockholders' equity 1,861,097 1,725,663 1,805,348
Total liabilities, mezzanine equity, and stockholders' equity $2,825,745 $2,721,946 $2,736,168
Simpson Manufacturing Co., Inc. and Subsidiaries
UNAUDITED Segment and Product Group Informatio
n
(In thousands)
Three Months Ended
March 31, %
2025 2024 change*
Net Sales by Reporting Segment
North America $420,699 $406,749 3.4 %
Percentage of total net sales 78.1 % 76.7 %
Europe 113,860 119,938 (5.1) %
Percentage of total net sales 21.1 % 22.6 %
Asia/Pacific 4,336 3,892 11.4 %
Percentage of total net sales 0.8 % 0.7 %
Total $538,895 $530,579 1.6 %
Net Sales by Product Group**
Wood Construction $459,442 $451,572 1.7 %
Percentage of total net sales 85.3 % 85.1 %
Concrete Construction 77,683 78,730 (1.3) %
Percentage of total net sales 14.4 % 14.8 %
Other 1,770 277 N/M
Total $538,895 $530,579 1.6 %
Gross Profit (Loss) by Reporting Segment
North America $210,292 $200,537 4.9 %
North America gross margin 50.0 % 49.3 %
Europe 40,022 43,812 (8.7) %
Europe gross margin 35.2 % 36.5 %
Asia/Pacific 1,725 676 N/M
Administrative & all other 1 (469) N/M
Total $252,040 $244,556 3.1 %
Income (Loss) from Operations
North America $104,238 $98,904 5.4 %
North America operating margin 24.8 % 24.3 %
Europe 9,309 8,258 12.7 %
Europe operating margin 8.2 % 6.9 %
Asia/Pacific 359 (575) N/M
Administrative & all other (11,587) (10,489) N/M
Total $102,319 $96,098 6.5 %
*
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.
Reconciliation of Non-GAAP Financial Measures
(In thousands) (Unaudited)
A reconciliation of Adjusted EBITDA to net income, the most directly comparable GAAP measure, is set forth below.
Three Months Ended March 31,
2025 2024
Net Income $77,884 $75,430
Provision for income taxes 26,596 22,988
Interest income, net and other financing costs (1,103) (351)
Depreciation and amortization 19,522 19,189
Other* (1,130) 26
Adjusted EBITDA $121,769 $117,282
*Other: Includes acquisition, integration, and restructuring related expenses, non-qualified deferred compensation adjustments, other & foreign exchange loss net, and net loss or gain on disposal of assets.
CONTACT:
Addo Investor Relations
investor.relations@strongtie.com
(310) 829-5400
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