On October 23, 2023, Simpson Manufacturing Co Inc (SSD, Financial) announced its financial results for the third quarter of 2023. The company reported a steady increase in net sales, income from operations, and diluted earnings per share.
Financial Highlights
SSD's consolidated net sales of $580.1 million increased by 4.8% from $553.7 million. The North America net sales of $456.8 million increased by 4.4% from $437.8 million, mainly due to higher volumes partially offset by price decreases in effect earlier in 2023. Europe net sales of $119.0 million increased by 6.4% from $111.9 million, primarily due to the positive effect of approximately $7.9 million in foreign currency translation, partly offset by lower volumes.
The company's consolidated gross profit of $282.9 million increased by 15.7% from $244.5 million. Gross margin increased to 48.8% from 44.2%. The consolidated income from operations of $140.2 million increased by 14.2% from $122.8 million. The increase was primarily due to increased consolidated gross profit, which was partly offset by higher operating expenses.
Management Commentary
“We delivered solid financial performance in a challenging operating environment with third quarter net sales of $580.1 million increasing 4.8% over the prior year quarter led by improved volumes in our North America segment,” commented Mike Olosky, President and Chief Executive Officer of Simpson Manufacturing Co., Inc. "We achieved double-digit volume growth year-over-year in our commercial, national retail and building technology markets as we have continued to execute on our strategies, enabling us to win new applications and customers."
Business Outlook
The company has updated its 2023 financial outlook based on three quarters of financial information to reflect its latest expectations regarding demand trends, raw material costs and operating expenses. Operating margin is now estimated to be in the range of 22.0% to 22.5%. The effective tax rate is estimated to be in the range of 25% to 26%, including both federal and state income tax rates and assuming no tax law changes are enacted. Capital expenditures are estimated to be approximately $100.0 million depending on a number of various external factors.
Despite the challenges in the operating environment, Simpson Manufacturing Co Inc (SSD, Financial) has shown resilience and continues to deliver solid financial performance. The company's focus on executing its strategies has resulted in improved volumes and new customer acquisitions, contributing to the overall growth in net sales and earnings per share.
