Simpson Manufacturing Co., Inc. Announces 2024 Fourth Quarter and Full-Year Financial Results

Full year 2024 net sales of $2.2 billion increased 0.8% year-over-year

Full year 2024 income from operations of $430.0 million, resulting in an operating income margin of 19.3%

Full year 2024 net income per diluted share of $7.60

Declared a $0.28 per share dividend

Providing full year 2025 outlook

Simpson Manufacturing Co., Inc. (the “Company”), an industry leader in engineered structural connectors and building solutions, announced its financial results for the fourth quarter and full-year of 2024. 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, 2024 with the quarter ended December 31, 2023 or the fiscal year ended December 31, 2024 with the fiscal year ended December 31, 2023.

Management Commentary

“During 2024, we grew revenues modestly in a challenging year where housing starts in both the U.S. and Europe declined,” commented Mike Olosky, President and Chief Executive Officer of Simpson Manufacturing Co., Inc. “In North America, I am very pleased that volume growth in pounds shipped exceeded U.S. housing starts by approximately 600 basis points. In Europe, sales were flat despite a difficult demand environment.”

Mr. Olosky continued, “In 2025 we believe a low single-digit recovery in U.S. housing starts is possible and European housing starts to be consistent with 2024 levels. As part of our commitment to maximizing shareholder returns, we have revised our financial ambitions to continue above market growth relative to U.S. housing starts on a trailing twelve-month basis, maintain an operating income margin at or above 20%, and drive EPS growth ahead of net revenue growth. While the midpoint of our 2025 guidance range for operating income margin is below our ambition, we are working to offset significant input cost increases over the past three years and will carefully evaluate avenues to preserve our profitability. We believe our business is capable of achieving a 20% operating income margin or higher with modest market growth and continued above market volume growth. We continue to believe in the mid-to-long term prospects of the housing market and are well positioned to take advantage of future growth.”

North America Segment Financial Highlights

2024 Fourth Quarter

• Net sales of $404.8 million increased 4.4% from $387.8 million due to incremental sales from the Company’s 2024 acquisitions and a modest increase in sales volumes.
• Gross margin remained 47.0% as lower material costs were offset by higher factory and overhead as well as warehouse costs, as a percentage of net sales.
• Income from operations of $85.4 million increased 7.0% from $79.8 million. The increase was primarily due to higher gross profit, partly offset by higher operating expenses. The operating expense increases were driven by higher personnel costs, which were partly offset by decreased variable incentive compensation.

2024 Full-Year

• Net sales of $1.7 billion increased approximately 1.1% from 2023 due to higher sales volumes.
• Gross margin decreased to 49.0% from 50.3%, primarily due to higher factory and overhead as well as warehouse costs, partly offset by lower material costs, as a percentage of net sales.
• Income from operations of $439.6 million decreased 7.1% from $473.2 million. The decrease was primarily due to lower gross profit as well as increases in operating expenses. The operating expense increases were driven by higher personnel costs, computer software and hardware costs, and professional fees, which were partly offset by decreased variable incentive compensation.

Europe Segment Financial Highlights

2024 Fourth Quarter

• Net sales of $108.1 million decreased 1.5% from $109.7 million, due to lower sales volumes.
• Gross margin decreased to 32.3% from 34.2%, primarily due to higher factory and overhead as well as warehouse and freight costs, partly offset by lower material costs, as a percentage of net sales.
• Income from operations of $0.8 million decreased 75.2% from $3.1 million primarily due to lower gross profit.

2024 Full-Year

• Net sales of $479.1 million decreased 0.4% from $480.8 million, due to lower sales volumes. Net sales benefited from the positive effect of approximately $3.7 million in foreign currency translation.
• Gross margin decreased to 35.3% from 36.8%, primarily due to higher factory and overhead as well as warehouse and freight costs, partly offset by lower material costs, as a percentage of net sales.
• Income from operations of $33.8 million decreased 26.5% from $46.0 million primarily due to lower gross profit as well as $5.0 million in higher operating expenses including personnel 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’s Board of Directors (the “Board”) declared a quarterly cash dividend of $0.28 per share for $11.7 million. The dividend was paid on January 23, 2025, to the Company’s stockholders of record on January 2, 2025.
• During the fourth quarter, the Company repurchased 275,906 shares of the Company’s common stock in the open market at an average price of $181.22 per share, for a total of $50.0 million, completing the repurchase of $100.0 million of the Company’s common stock that was previously authorized. On October 23, 2024, the Board authorized the Company to repurchase up to $100.0 million of the Company’s common stock beginning January 1, 2025 through December 31, 2025.
• On October 28, 2024, the Company announced the appointment of Matt Dunn to Chief Financial Officer and Treasurer, effective January 1, 2025. Mr. Dunn served as Simpson’s Senior Vice President of Finance since June 2024 and succeeded Brian Magstadt who will remain employed as an Executive Advisor to assist with an orderly transition until his retirement on June 30, 2025.
• The Board, upon recommendation of the Nominating and CSR Committee, announced the appointment of Angela Drake as an independent, non-employee director of the Company, effective January 1, 2025.

 Balance Sheet & Cash Flow Highlights

• As of December 31, 2024, cash and cash equivalents totaled $239.4 million with total debt outstanding of $388.1 million under the Company’s $450.0 million credit facility.
• For the 2024 fourth quarter, cash provided by operating activities of $117.7 million increased from $28.8 million, primarily due to decreases in working capital. For the 2024 full year, cash provided by operating activities of $339.8 million decreased from $427.0 million, primarily due to increases in working capital and lower net income.
• For the 2024 fourth quarter, cash used in investing activities of $59.6 million increased from $36.7 million mostly due to increased capital expenditures of $26.8 million. For the 2024 full year, cash used in investing activities of $261.8 million increased from $103.3 million mostly due to increased capital expenditures of $94.2 million and acquisitions of $55.6 million.
• For the 2024 fourth quarter, cash used in financing activities of $142.7 million increased from $140.9 million. For the 2024 full year, cash used in financing activities of $253.8 million increased from $199.0 million, primarily due to repurchases of $50.0 million of the Company’s common stock.

Business Outlook

The Company is initiating its 2025 financial outlook to reflect its expectations regarding demand trends, cost of sales, and operating expenses. Based on business trends and conditions as of today, February 10, 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. The operating margin range includes a projected benefit on 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.

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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 & 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.

Contact:

Addo Investor Relations – investor.relations@strongtie.com – (310) 829-5400

Source: Simpson Manufacturing Co., Inc.