Simpson Manufacturing Co., Inc. — Third Quarter 2026 Earnings Summary

Financial Performance:

• Net sales for the three months ended September 30, 2026, were $638.1 million, a 2.3% increase year-over-year; for the nine months ended September 30, 2026, net sales were $1,897.2 million, a 5.8% increase year-over-year.
• Income from operations for the quarter was $141.0 million, up 0.2% year-over-year; for the nine-month period, it was $424.8 million, up 10.8% year-over-year.
• Net income per diluted share was $2.68 for the quarter, a 3.9% increase year-over-year; for the nine months, it was $7.90, a 14.7% increase year-over-year.
• Gross profit margin was 45.7% for the quarter compared to 46.1% in the prior year period; for the nine months, the margin was 46.2% compared to 46.3%.
• Operating income margin was 22.1% for the quarter and 22.4% for the nine months.
• Adjusted EBITDA was $167.2 million for the quarter, a 7.4% increase year-over-year; for the nine months, it was $502.7 million, a 14.8% increase year-over-year.
• Cash and cash equivalents totaled $491.3 million as of September 30, 2026, with total debt outstanding of $308.0 million under a $900 million credit facility.
• Cash flow provided by operating activities was $173.3 million for the quarter, an increase of $3.1 million from the prior year period.
• Cash flow used in investing activities was $13.2 million for the quarter, a decrease of $2.8 million from the prior year period.
• Total U.S. Housing starts for the trailing twelve months ended September 30, 2026, were 1,344, a 1.9% decrease from 1,370 in the prior year period.

Guidance and Future Outlook:

• The Company updated its full-year 2026 outlook to reflect actual third-quarter results and current expectations.
• Consolidated operating margin for 2026 is estimated to be in the range of 20.0% to 20.5%, which includes a projected $11.0 million gain on the sale of vacant land.
• The effective tax rate for 2026 is estimated to be in the range of 25.0% to 26.0%.
• Capital expenditures for 2026 are estimated to be in the range of $80.0 million to $90.0 million.
• Management expects to take additional pricing actions in 2027 to address the evolving cost environment.
• Near-term challenges include housing affordability pressures, higher steel costs, and tighter steel availability.

Business Segments and Product Lines:

• North America segment net sales were $502.0 million, a 3.8% increase year-over-year, driven by price increases and higher unit sales volumes.
• North America gross margin decreased to 48.4% from 48.7% due to higher material, labor, and freight costs.
• North America income from operations increased 9.5% to $137.0 million, driven by higher sales and lower operating expenses.
• Europe segment net sales were $129.9 million, a 3.4% decrease year-over-year, negatively affected by approximately $1.6 million in foreign currency translation.
• Europe gross margin decreased to 36.1% from 37.9% due to higher factory, tooling, labor, warehouse, and freight costs.
• Europe income from operations decreased 5.0% to $15.3 million, negatively affected by approximately $0.3 million in foreign currency translation.
• Asia/Pacific segment net sales were $6.3 million, a 14.9% increase year-over-year for the quarter.
• Wood Construction product group net sales increased 1.8% to $534.1 million for the quarter and 5.2% to $1,600.1 million for the nine months.
• Concrete Construction product group net sales increased 4.8% to $102.5 million for the quarter and 8.6% to $293.0 million for the nine months.

Market and Competitive Landscape:

• The Company stated it continued to outperform the majority of its relevant end markets, including residential, commercial, OEM, and component manufacturers.
• Demand for value-added solutions remains encouraging despite a challenging near-term operating environment.
• The Company maintains a differentiated market position and continues to strengthen customer relationships through product solutions, software, and service.

Risks and Challenges:

• The business faces challenges from housing affordability pressures, higher steel costs, and tighter steel availability.
• Gross margins were negatively impacted by higher material, labor, and freight costs as a percentage of net sales in both North America and Europe.
• Foreign currency translation negatively affected Europe net sales by $1.6 million and income from operations by $0.3 million.
• The sale of unimproved land in Stockton, California, closed in the fourth quarter of 2026 rather than the third, delaying the recognition of an estimated $11.0 million net gain on disposal.

Management Commentary and Tone:

• President and CEO Mike Olosky described third-quarter performance as reflecting business resilience and progress against key growth initiatives despite a challenging market.
• Management highlighted disciplined cost management and execution that maintained a strong operating margin of 22.1% despite higher steel costs.
• The tone regarding 2027 is forward-looking, with expectations to take additional pricing actions to address the cost environment.

Other Key Points:

• The Board approved a new $1.0 billion share repurchase authorization with no expiration date on October 22, 2026, superseding the prior $200.0 million authorization.
• The Company repurchased 352,346 shares of common stock in the open market during the third quarter for a total of $66.3 million.
• The Board declared a quarterly cash dividend of $0.30 per share, estimated to be $12.1 million in aggregate, payable on January 28, 2027.
• The Company reclassified certain software amortization costs related to component manufacturing from general and administrative expense to cost of sales in the first quarter of 2026.
• The Company reclassified certain quality assurance costs from general and administrative expense to cost of sales for the year ended December 31, 2025.