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Simpson
🇺🇸 NYSE:SSD
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•
Mar 31, 2023

Simpson Q1 2023 Earnings Report

Simpson's financial performance decreased slightly due to higher operating expenses, despite an increase in net sales.

Key Takeaways

Simpson Manufacturing Co., Inc. reported an 8.3% increase in net sales, reaching $534.4 million, driven by the acquisition of ETANCO. However, income from operations decreased by 4.9% to $118.4 million, and diluted earnings per share decreased by 6.0% to $2.05.

Consolidated net sales increased by 8.3% year-over-year, reaching $534.4 million.

North America net sales decreased by 7.4% due to lower volumes, while Europe net sales increased significantly due to the ETANCO acquisition.

Consolidated income from operations decreased by 4.9% to $118.4 million due to higher operating expenses.

Net income decreased to $88.0 million, or $2.05 per diluted share, compared to $94.6 million, or $2.18 per diluted share, in the previous year.

Total Revenue
$534M
Previous year: $494M
+8.3%
EPS
$2.05
Previous year: $2.18
-6.0%
Gross Profit Margin
47.3%
Previous year: 48%
-1.5%
Total Operating Expenses
$133M
Operating Income Margin
22.1%
Previous year: 25.2%
-12.3%
Gross Profit
$253M
Previous year: $237M
+6.8%
Cash and Equivalents
$253M
Previous year: $984M
-74.3%
Free Cash Flow
-$15.8M
Previous year: $26.9M
-158.8%
Total Assets
$2.56B
Previous year: $2.29B
+11.7%

Simpson

Simpson

Simpson Revenue by Geographic Location

Forward Guidance

The Company has updated its 2023 financial outlook based on one quarter of financial information to reflect its latest expectations regarding demand trends, raw material costs and operating expenses.

Positive Outlook

  • Operating margin is now estimated to be in the range of 19% to 21%.
  • Annual interest expense on the outstanding Revolving Credit Facility and Term Loans is expected to be approximately $9.7 million.
  • The effective tax rate is estimated to be in the range of 25% to 26%.
  • Capital expenditures are estimated to be in the range of $90.0 million to $95.0 million.
  • The Company has made solid progress on its efforts to integrate ETANCO into its operations and to realize previously identified offensive and defensive synergies in the years ahead.

Challenges Ahead

  • North America net sales will be pressured by a softer housing market in 2023.
  • The Company efforts to integrate ETANCO into its operations will continue to result in additional costs in 2023.
  • The realization of other synergies subject to changing macroeconomic circumstances, which will delay some offensive synergies.
  • Cash flow provided by operating activities decreased approximately $41.6 million from $44.7 million to $3.1 million, primarily from increases in working capital and decreases in net income.
  • Cash flow used in investing activities increased approximately $10.0 million from $17.1 million to $27.1 million.

Revenue & Expenses

Visualization of income flow from segment revenue to net income

Company Overview

Full financial data and analysis

View Simpson