Simpson Manufacturing sales sizzle in Q3
Simpson Manufacturing, the parent company of Simpson Strong-Tie, reported third quarter sales increased nearly 40% to $553.7 million from third quarter 2021 sales of $396.7 million.
Sales in North America jumped 29.3% to $437.8 million from $338.6 million, mostly due to product price increases throughout 2021 in an effort to offset rising raw material costs, as well as higher sales volume, the Pleasanton, Calif.-based company reported.
Europe net sales of $111.9 million increased 104.1% from $54.8 million, primarily due to the acquisition of ETANCO, which contributed $67.5 million in net sales, along with product price increases, mostly offset by lower volumes and the negative effect of approximately $7.9 million in foreign currency translation.’
Consolidated income from operations of $122.8 million increased 22.1% from $100.6 million. North America income from operations of $127.3 million increased $27.1 million from $100.2 million. The increase was primarily due to higher gross profit with operating expenses nearly flat.
The company also posted a net income of $88.2 million for the period, marking nearly a 20% gain from a net income of $73.8 million for the third quarter last year.
During the quarter, the company announced that CEO Karen Colonias will step down from her position as CEO as part of Simpson's planned leadership succession, effective Dec. 31.
Simpson's Board of Directors unanimously elected Michael Olosky, current president and chief operating officer, to succeed Colonias as CEO, effective Jan. 1, 2023.
In connection with his promotion, Olosky will also join the board of directors on Jan. Colonias will remain employed as an executive advisor to assist with a smooth and orderly transition until her retirement on June 30, 2023.
Colonias will continue to serve as a member of Simpson's board of directors until the 2023 annual meeting of stockholders, the company said.
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The Bottom Line: Profits at Simpson climb 19.5% as total sales see nearly a 40% spike.
What the CEO said: “Solid operational execution against our strategic plan during the third quarter led to continued strong financial results despite the challenging macroeconomic backdrop," said Karen Colonias, CEO of Simpson Manufacturing. "Positive trends for both volume and pricing led to increased net sales in North America over the prior year quarter, which had lower volume. In Europe, sales benefitted primarily from the contribution from ETANCO, which we have continued to successfully integrate on-track with our internal plan. In addition, we made solid traction during the quarter by advancing our key growth initiatives forward and continuing to educate building industry professionals on the benefits of Simpson's solutions which resulted in key wins for mass timber and building technology."
Colonias added, “To drive longer-term growth, we are focused on facility upgrades and expansions to ensure we have ample capacity to meet our customers' needs locally as well as to improve our service, production efficiencies and safety in the workplace. I am confident we can continue our above-market growth relative to U.S. housing starts in fiscal 2022 and that we can achieve our 2025 Company Ambitions, even when considering softer housing market forecasts."
Company info: Click here to read the full third quarter 2022 financial report from Simpson Manufacturing.