Simpson Manufacturing (SSD) investor relations material

Executive summary

• Net sales grew 9.1% year-over-year to $588 million, driven by 2025 pricing actions and favorable foreign exchange, partially offset by a 1% volume decline due to softer housing starts.

• North America net sales rose 9.8% to $461.9 million, with strong performance in component manufacturing and OEM segments, while residential volumes increased modestly and commercial volumes declined slightly.

• Europe net sales increased 6.3% to $121 million, mainly from currency translation and price increases, though local currency sales declined 5.4% due to lower volumes and adverse weather.

• Gross margin declined 130 basis points to 45.2% due to higher material, labor, and startup costs, partially offset by pricing and productivity initiatives.

• Adjusted EBITDA rose 14.1% to $139.4 million, with operating margin up 50 basis points to 19.5%.

Financial highlights

• Consolidated gross profit increased 6.1% to $265.9 million.

• North America gross margin was 47.8%, down from 49.8% last year, impacted by tariffs and higher costs.

• Europe gross margin improved to 36.3% from 35.2% due to higher pricing and lower material costs.

• Net income was $88.2 million ($2.13 per diluted share), up from $77.9 million ($1.85 per share) year-over-year.

• Cash flow from operations was $35.9 million; capital expenditures were $17.7 million; $12 million returned in dividends and $50 million in share repurchases.

Outlook and guidance

• 2026 consolidated operating margin expected between 19.5%-20.5%, including a projected $10–12 million gain on sale of vacant land.

• U.S. housing starts forecasted to be down low single digits; Europe expected flat to modest growth.

• Gross margin anticipated to be lower due to tariffs and higher depreciation.

• $3-$5 million in footprint optimization costs in Europe and $10-$12 million gain expected from land sale in H2 2026.

• Capital expenditures projected at $75-$85 million; effective tax rate estimated at 25%-26%.