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Mar 31, 2020
Simpson Q1 2020 Earnings Report
Simpson's Q1 2020 earnings were released, showcasing year-over-year growth in net sales, gross margin, and operating profit, but the company withdrew its 2020 financial outlook due to COVID-19 uncertainties.
Key Takeaways
Simpson Manufacturing reported a strong first quarter with a 9.4% increase in net sales to $283.7 million and a significant improvement in gross margin to 45.7%. Operating profit rose by 64.4% to $49.4 million, and diluted earnings per share increased by 66.0% to $0.83. However, due to the uncertainty surrounding COVID-19, the company withdrew its previously issued annual 2020 outlook and financial targets.
Net sales increased by 9.4% year-over-year to $283.7 million, driven by stronger sales volumes.
Gross margin improved to 45.7%, a 320 basis point increase year-over-year, due to sales mix and lower material costs.
Operating profit rose by 64.4% year-over-year to $49.4 million.
Diluted earnings per share increased by 66.0% year-over-year to $0.83.
Simpson
Simpson
Simpson Revenue by Segment
Simpson Revenue by Geographic Location
Revenue by Segment
North America Revenue
CapyFin.comEurope Revenue
CapyFin.comAsia Pacific Revenue
CapyFin.comRevenue by Geographic Location
North America Revenue
CapyFin.comEurope Revenue
CapyFin.comAsia Pacific Revenue
CapyFin.com Forward Guidance
Due to the significant level of uncertainty regarding future market conditions surrounding COVID-19, the company has chosen to withdraw its previously issued annual 2020 outlook as well as the financial targets associated with its “2020 Plan.”
Positive Outlook
- Strong balance sheet
- Investments in adjacent products and markets to diversify the business
- Recent cost rationalization efforts
- Nearly $306 million in cash on hand
- Proactive measures to ensure a strong financial position
Challenges Ahead
- Significant level of uncertainty regarding future market conditions surrounding COVID-19
- Withdrawal of previously issued annual 2020 outlook
- Withdrawal of financial targets associated with the “2020 Plan”
- Dependence on housing starts
- Sales declined in April compared to March levels
Revenue & Expenses
Visualization of income flow from segment revenue to net income