What changed in this filing

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

2022-02-28 compared with 2021-02-26 · 170 added, 188 removed, 922 unchanged (28% of the section changed)

1 unchanged sentence

We have operations both within the U.S.

and internationally, and we are exposed to market risks in the ordinary course of our business, including changes to foreign currency exchange rates and interest rates.

and internationally, and we are exposed to market risks in the ordinary course of our business, including changes to foreign currency exchange rates and interest rates and fluctuations in commodity prices.

Foreign Exchange Risk

We transact business in various foreign countries and may therefore be exposed to foreign currency exchange rate risk.

We have manufacturing facilities in China, the United Kingdom, Denmark, France, Germany, Poland, Portugal, Sweden and Switzerland.

We sell and distribute products throughout the world and also purchase raw materials from suppliers in foreign countries.

As a result, our financial results are affected by changes in foreign currency exchange rates and economic conditions in the foreign markets in which we do business.

In fiscal 2020, our consolidated financial results are impacted by the translation of revenue and expenses in foreign currencies into U.S.

These translation impacts are primarily affected by changes in exchange rates between the U.S.

dollar and with European and Chinese Yuan currencies.

We have foreign exchange rate risk in our international operations, and through purchases from foreign vendors.

Changes in the values of currencies of foreign countries affect our financial position, income statement and cash flows when translated into U.S.

We estimate that if the exchange rate were to change by 10% in any one country where we have our operations, the change in net income would not be material to our operations taken as a whole.

We may manage our exposure to transactional exposures by entering into foreign currency forward contracts for forecasted transactions and projected cash flows for foreign currencies in future periods.

In 2020, we entered into financial contracts to hedge the risk of fluctuations associated with the Chinese Yuan.

The translation adjustment on the Company’s underlying assets and liabilities resulted in an increase in accumulated other comprehensive income of $14.2 million for the year ended December 31, 2020.

In 2020 and 2021, we entered into financial contracts to hedge the risk of fluctuations associated with the Chinese Yuan.

Foreign currency translation adjustments on our underlying assets and liabilities resulted in an accumulated other comprehensive loss of $7.3 million for the year ended December 31, 2021, due to the effects of the strengthening United States Dollar in relation to almost all other countries.

Interest Rate Risk

The Company has no variable interest-rate debt outstanding.

The Company estimates that a hypothetical 100 basis point change in U.S.

interest rates would not be material to the Company’s operations taken as a whole.

Our primary exposure to interest rate risk results from outstanding borrowings under our $300 million revolving line of credit facility (the "Credit Facility") with Wells Fargo Bank, which bears interest at variable rates.

The variable interest rates on the Credit Facility fluctuate and expose us to short-term changes in market interest rates as our interest obligation on this instrument is based on prevailing market interest rates.

Interest rates fluctuate as a result of many factors, including governmental monetary and tax policies, domestic and international economic and political considerations and other factors that are beyond our control.

As of December 31, 2021, the total outstanding debt subject to interest rate fluctuations was zero.

Commodity Price Risk

In the normal course of business, we are exposed to market risk related to our purchase of steel, a significant raw material upon which our manufacturing depends.

Steel cost increased in 2021 when compared to 2020 and historical levels due to the worldwide raw material shortage stemming from the COVID-19 pandemic .

While steel is typically available from numerous suppliers, the price of steel is a commodity subject to fluctuations that apply across broad spectrums of the steel market.

We do not use any derivative or hedging instruments to manage steel price risk.

If the price of steel increases, our variable costs would also increase.

While historically we have successfully mitigated these increased costs through the implementation of price increases, in the future we may not be able to successfully mitigate these costs, which could cause our operating margins to decline.

As noted above, higher steel prices not mitigated by price increases will likely result in a 500 basis point decline in operating margins for the full year of 2022 compared to operating margins for the full year of 2021.

Consolidated Financial Statements and Supplementary Data.

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Consolidated financial statements

Reports of Independent Registered Public Accounting Firm

Reports of Independent Registered Public Accounting Firm (PCAOB ID Number 248 )

Consolidated Balance Sheets at December 31, 2021 and 2020

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Critical audit matter

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that:

(1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Inventory valuation

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• We recalculated and assessed the appropriateness of the formulaic calculation and management adjustments by making inquiries of management and various individuals outside of the accounting team to obtain support for selected adjustments and obtain supporting documentation when applicable.

We have served as the Company’s auditor since 2015.

S&P Clever reporting unit goodwill impairment assessment

As described further in Note 10 to the consolidated financial statements, the company’s goodwill balance as of December 31, 2021 was $134.0 million, of which $23.1 million related to the S&P Clever reporting unit.

The company performs goodwill impairment testing at the reporting unit level on an annual basis.

The company uses a combination of the income approach (discounted cash flow method) and the market approach, equally weighted in its annual goodwill impairment assessment.

We identified the assessment of the carrying value of goodwill for the S&P Clever reporting unit as a critical audit matter.

The principal considerations for our determination that the assessment of the carrying value of goodwill for the S&P Clever reporting unit is a critical audit matter are that significant auditor judgement, including the need to involve our valuation specialists, was required to evaluate the Company’s estimate of fair value of the S&P Clever reporting unit, which was developed, in part, using a discounted cash flow model.

Specifically, auditing the key assumptions used in the reporting unit’s discounted cash flow model which are forecasted financial information, the discount rate, and multiple rates.

Changes to those assumption could have a significant effect on the Company’s assessment of the impairment of the goodwill.

Our audit procedures related to the assessment of the carrying value of goodwill for the S&P Clever reporting unit included the following, among others.

• We tested the effectiveness of controls within the goodwill impairment analysis, including those over forecasted financial information, the discount rate and multiple rates.

• We evaluated management’s historical ability to accurately forecast by comparing actual results to management’s previously forecasted financial information for the same period.

• We evaluated the reasonableness of management’s forecasted financial information by comparing the forecasted financial information to historical results, including considering any circumstances affecting the current macroeconomic environment.

• With the assistance of our valuation specialists, we evaluated the discount rate, including testing the underlying source information and the mathematical accuracy of the calculations, and developing an independent estimate of the discount rate and comparing that to the discount rate selected by management.

• With the assistance of our valuation specialists, we evaluated the industry-comparable multiples, including testing the underlying source information and mathematical accuracy of the calculations, the acceptability of the selected companies within the Company’s peer group, and comparing the multiples selected by management to companies in the same industry.

/s/ Grant Thornton LLP

We have served as the Company’s auditor since 2015.

San Francisco, California

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Opinion on internal control over financial reporting

We have audited the internal control over financial reporting of Simpson Manufacturing Co, Inc., (a Delaware corporation) and subsidiaries (the “Company”) as of December 31, 2020, based on criteria established in the 2013 Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”).

We have audited the internal control over financial reporting of Simpson Manufacturing Co., Inc.

(a Delaware corporation) and subsidiaries (the “Company”) as of December 31, 2021, based on criteria established in the 2013 Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”).

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2021, based on criteria established in the 2013 Internal Control—Integrated Framework issued by COSO.

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Goodwill 134,022 135,844

Equity investment (see Note 1) 2,466 2,480

Intangible assets, net 26,269 26,800

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( 324 ) ( 332 ) ( 6,024 )

Impairment of goodwill

Income from operations $ 367,793 $ 252,363 $ 181,254

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Translation adjustment ( 7,313 ) 14,172 885

Unamortized pension adjustments, net of taxes ( 161 ) ( 1,064 ) 376

Unrealized gains on derivative instruments

Unamortized pension adjustments, net of tax 404 ( 161 ) ( 1,064 )

Cash flow hedge adjustment, net of tax

( 268 ) 390 —

Comprehensive income $ 259,270 $ 201,401 $ 133,803

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Pension adjustment, net of tax — — — — ( 1,064 ) — ( 1,064 )

Adoption of new accounting standards — — — 410 381 — 791

Options exercised 23 — 695 — — — 695

Stock-based compensation expense — — 9,325 — — — 9,325

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Pension adjustment, net of tax — — — — ( 161 ) — ( 161 )

Cash flow hedge adjustment, net of tax — — — — 390 — 390

Stock-based compensation expense — — 11,410 — — — 11,410

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Pension adjustment, net of tax — — — — 404 — 404

Unrealized gains on derivative

instruments — — — — 390 — 390

Cash flow hedge adjustment, net of tax — — — — ( 268 ) — ( 268 )

Stock-based compensation expense — — 15,029 — — — 15,029

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Adjustments to reconcile net income to net cash provided by operating activities:

Gain on sale of assets and other ( 318 ) ( 6,023 ) ( 12,357 )

Loss (gain) on sale of assets and other 2,116 ( 318 ) ( 6,023 )

Depreciation and amortization 42,477 38,767 38,402

Noncash lease expense 9,562 6,984 7,136

Impairment of goodwill — — 6,686

Deferred income taxes ( 915 ) 3,179 2,557

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Acquisitions, net of cash acquired ( 218 ) ( 2,797 ) ( 2,650 )

Purchases of intangible assets ( 5,856 ) ( 5,330 ) ( 4,827 )

Purchases of Equity investments ( 9,829 ) — —

Proceeds from sale of property and equipment 836 853 12,155

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Debt issuance costs ( 819 ) ( 712 ) —

Deferred and contingent consideration paid for acquisitions — — ( 364 )

Repurchase of common stock ( 24,125 ) ( 76,189 ) ( 60,816 )

Issuance of Company’s common stock — — 695

Dividends paid ( 41,619 ) ( 40,400 ) ( 40,197 )

2 unchanged sentences

Effect of exchange rate changes on cash 5,642 3,487 543

Net increase (decrease) in cash and cash equivalents 44,429 70,030 ( 8,334 )

Net increase in cash and cash equivalents 26,516 44,429 70,030

Cash and cash equivalents at beginning of year 274,639 230,210 160,180

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A significant portion of the Company’s business is dependent on economic activity within the North America segment.

The Company is dependent on the availability of steel, its primary raw material.

The Company's business is also dependent on the availability of steel, its primary raw material.

Principles of Consolidation

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Management believes that these consolidated financial statements include all normal and recurring adjustments necessary for a fair presentation under GAAP.

Uncertainty created by the COVID-19 pandemic will likely impact our operations, customers, and various areas of risk.

We assessed certain accounting matters that require the use of estimates and assumptions in context with the known and projected future impacts of COVID-19.

The Company assessed certain accounting matters that require the use of estimates and assumptions in context with the known and projected future impacts of COVID-19.

The Company's actual results could differ materially from those estimates.

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The changes in the allowance for doubtful accounts receivable for the year ended December 31, 2021 are outlined in the table below:

at Amounts Balance

(in thousands) December 31, 2019 Charged to Expense Write-Offs 1

(in thousands) December 31, 2020 Expense (Deductions), net

December 31, 2021

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Warranties and recalls

The Company provides product warranties for specific product lines and records estimated recall expenses in the period in which the recall occurs, none of which has been material to the consolidated financial statements.

The Company provides product warranties for specific product lines and records estimated expenses in the period in which the recall occurs, none of which has been material to the consolidated financial statements.

In a limited number of circumstances, the Company may also agree to indemnify customers against legal claims made against those customers by the end users of the Company’s products.

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The investment is reviewed for impairment whenever factors indicate that its carrying amount might not be recoverable and the decrease in value, if any, is recognized in the period the impairment occurs in the consolidated statement of operations.

In December 2016, the Company acquired a 25 % equity interest in Ruby Sketch Pty Ltd.

(“Ruby Sketch”), an Australian proprietary limited company, for $ 2.5 million.

The Company recognized this investment as an asset at cost, and has accounted for its ownership interest using the equity accounting method.

The Company has no obligation to make any additional capital

contributions to Ruby Sketch.

The carrying amount of the investment as of December 31, 2020 and December 31, 2019 was approximately $ 2.5 million.

Fair Value of Financial Instruments

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Software, including amounts capitalized for internally developed software is amortized on a straight-line basis over an estimated useful life of three to five years .

Machinery and equipment is depreciated using accelerated methods over an estimated useful life of three to ten years.

Machinery and equipment is depreciated using accelerated methods over an

estimated useful life of three to ten years .

Buildings and site improvements are depreciated using the straight-line method over their estimated useful lives, which range from 15 to 45 years.

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Foreign Currency Translation

The local currency is the functional currency for most of the Company’s operations in Europe, Canada, Asia, Australia and New Zealand.

The local currency is the functional currency for all of the Company’s operations in Europe, Canada, Asia, Australia and New Zealand.

Assets and liabilities denominated in foreign currencies are translated using the exchange rate on the balance sheet date.

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Revenue Recognition

Generally, the Company’s revenue contract with a customer exists when goods are shipped, and services (if any) are rendered;

and its related invoice is generated.

The duration of the contract does not extend beyond the promised goods or services already transferred.

The transaction price of each distinct promised product or service specified in the invoice is based on its relative stated standalone selling price.

Generally, the Company's revenue contract with a customer exists when (1) the goods are shipped, services are rendered, and the related invoice is generated, (2) the duration of the contract does not extend beyond the promised goods or services already transferred and (3) the transaction price of each distinct promised product or service specified in the invoice is based on its relative stated standalone selling price.

The Company recognizes revenue when it satisfies a performance obligation by transferring control over a product to a customer at a point in time.

The Company’s shipping terms provide the primary indicator of the transfer of control.

The Company’s general shipping term are F.O.B.

shipping point, where title and risk and rewards of ownership transfer at the point when the products leave the Company’s warehouse.

Our shipping terms provide the primary indicator of the transfer of control.

The Company's general shipping terms are Incoterm C.P.T.

shipping point), where the title, and risk and rewards of ownership transfer at the point when the products are no longer on the Company's premises.

Other Incoterms are allowed as exceptions depending on the product or service being sold and the nature of the sale.

The Company recognizes revenue based on the consideration specified in the invoice with a customer, excluding any sales incentives, discounts, and amounts collected on behalf of third parties (i.e., governmental tax authorities).

Based on historical experience with the customer, the customer's purchasing pattern and its significant experience selling products, the Company concluded that a significant reversal in the cumulative amount of revenue recognized will not occur when the uncertainty (if any) is resolved (that is, when the total amount of purchases is known).

Based on historical experience with the customer, the customer's purchasing pattern, and its significant experience selling products, the Company concluded that a significant reversal in the cumulative amount of revenue recognized would not occur when the uncertainty (if any) is resolved (that is, when the total amount of purchases is known).

Refer to Note 2 for additional information.

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Product research and development expenses include all related personnel costs including salary, benefits, retirement, stock-based compensation costs, as well as computer and software costs, professional fees, supplies, tools and maintenance costs.

In 2020, 2019 and 2018, the Company incurred software development expenses related to its continued expansion into the plated truss market and some of the software development costs were capitalized.

In 2021, 2020 and 2019, the Company incurred software development expenses related to its ongoing expansion into the plated truss market and some of the software development costs were capitalized.

See "Note 8 — Property, Plant and Equipment." The Company amortizes acquired patents over their remaining lives and performs periodic reviews for impairment.

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Accounting for Stock-Based Compensation

The Company recognizes stock-based expense related to the estimated fair value of restricted stock awards on a straight-line basis, net of estimated forfeitures, over the requisite service period of the awards, which is generally the vesting term of four years.

The Company recognizes stock-based compensation expense related to the estimated fair value of restricted stock awards on a straight-line basis, net of estimated forfeitures, over the requisite service period of the awards, which is generally the vesting term of four years .

Stock-based expense related to performance share grants are measured based on grant date fair value and expensed on a graded basis over the service period of the awards, which is generally a performance period of three years .

The performance conditions are based on the Company's achievement of revenue growth and return on invested capital over the performance

period, and are evaluated for the probability of vesting at each reporting period end with changes in expected results recognized as an adjustment to expense.

The performance conditions are based on the Company's achievement of revenue growth and return on invested capital over the performance period, and are evaluated for the probability of vesting at the end of each reporting period with changes in

expected results recognized as an adjustment to expense.

The assumptions used to calculate the fair value of restricted stock grants are evaluated and revised, as necessary, to reflect market conditions and the Company’s experience.

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Potentially dilutive shares are included in the diluted per-share calculations using the treasury stock method for all periods when the effect of their inclusion is dilutive.

Recently Adopted Accounting Pronouncements

In June 2016, the FASB issued ASU No.

2016-13, “Financial Instruments - Credit Losses (Topic 326):

Measurement of Credit Losses on Financial Instruments.” ASU 2016-13 amendments provide guidance on accounting for current expected credit losses on financial instruments that are not accounted for at fair value through net income, including loans held for investment, held-to-maturity debt securities, trade and other receivables, net investment in leases and other commitments to extend credit held by a reporting entity at each reporting date.

The required measurement methodology is based on an expected loss model that includes historical experience, current conditions, and reasonable and supportable forecasts.

ASU 2016-13 eliminates the probable incurred loss recognition in current GAAP.

The Company adopted ASU 2016-13 prospectively on January 1, 2020.

Historically, the Company's actual credit losses have not been material.

The Company's financial assets in the scope of ASU 2016-13 mainly consist of short-term trade receivables.

In estimating expected credit loss, management uses the aging method, such as pooling receivables based on the levels of delinquency and applying historical loss rates, adjusted for current conditions and reasonable and supportable forecasts, to each pool.

The Company will regularly reassess the customer groups by using its best judgment when considering changes in customers' credit ratings, customers' historical payments and loss experience, current market and economic conditions, and expectations of future market and economic conditions.

Adoption of ASU 2016-13 had no material effect on the Company's consolidated financial statements and footnote disclosures.

Accounting Standards Not Yet Adopted

In March 2020, the Financial Accounting Standards Board issued Accounting Standards Update ("ASU") 2020-04, Reference Rate Reform (Topic 848).

ASU 2020-04 provides optional guidance to ease the potential burden in accounting for reference rate reform on financial reporting in response to the risk of cessation of the London Interbank Offered Rate (“LIBOR”) on December 31, 2021.

This ASU allows the option to account for and present a modification that meets the scope of the standard as an event that does not require contract remeasurement at the modification date or reassessment of a previous accounting determination required under the relevant topic or subtopic.

Entities are permitted to apply the amendments to all contracts, cash flow and net investment hedge relationships that exist as of March 12, 2020.

The relief provided in this ASU is only available for a limited time, generally through December 31, 2022.

The Company's primary credit facility is the $ 300 million revolving line of credit (the "Credit Facility") with Wells Fargo Bank, which matures on July 12, 2026.

Borrowings under the Credit Facility bear interest using LIBOR plus an applicable margin.

The Credit Facility currently includes a provision for the determination of a successor LIBOR rate or an alternative rate of interest.

On March 5, 2021, ICE Benchmark Administration, the administrator of the LIBOR and the Financial Conduct Authority, announced that some United States Dollar LIBOR tenors (overnight, 1 month, 3 month, and 12 month) will continue to be published until June 30, 2023.

The Company does not expect a material impact to its consolidated operating results, financial position or cash flow from the transition from LIBOR to alternative reference interest rates, but the Company will continue to monitor the impact of the transition until it is completed.

All other newly issued and effective accounting standards during 2021 were determined to be not relevant or material to the Company.

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Wood Construction Products Revenue .

Wood construction products represented almost 85 % and 84 % of total net sales in the year ended December 31, 2020 and 2019, respectively.

Wood construction products represented approximately 87 %, 85 %, 84 % and of total net sales in the year ended December 31, 2021, 2020, and 2019 respectively.

Concrete Construction Products Revenue.

Concrete construction products represented 15 % and 16 % of total net sales in the year ended December 31, 2020 and 2019, respectively.

Concrete construction products represented approximately 13 %, 15 %, 16 % of total net sales in the year ended December 31, 2021, 2020 and 2019, respectively.

Customer acceptance criteria.

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Other revenue .

Service sales, representing after-market repair and maintenance, engineering activities and software license sales and services were less than 1.0 % of net sales and recognized as the services are completed or by transferring control over a product to a customer at a point in time.

Service sales, representing after-market repair and maintenance, engineering activities and software license sales and services were less than 0.1 % of net sales for 2021,2020 and 2019 and recognized as the services are completed or by transferring control over a product to a customer at a point in time.

Services may be sold separately or in bundled packages.

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Contract liabilities are recorded for any services billed to customers and not yet recognizable if the contract period has commenced or for the amount collected from customers in advance of the contract period commencing.

As of December 31, 2020, the Company had no contract assets or contract liabilities from contracts with customers .

As of December 31, 2021 and 2020, the Company had no contract assets or contract liabilities from contracts with customers .

Other accounting considerations

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As of December 31, 2021, approximately $ 75.9 million was not used for repurchase under the previously announced $ 100.0 million share repurchase authorization (which expired at the end of 2021).

On December 16, 2020, the Company’s Board of Directors authorized the Company to repurchase up to $ 100.0 million of the Company’s common stock from January 1, 2021 through December 31, 2021.

As of December 31, 2020, the Company held 150,974 shares of its common stock as treasury shares and in 2020, retired a total of 1,028,328 of its common stock.

On November 18, 2021, the Company’s Board of Directors authorized the Company to repurchase up to $ 100.0 million of the Company’s common stock from January 1, 2022 through December 31, 2022.

As of December 31, 2021, the Company held zero shares of its common stock as treasury shares and in 2021, retired a total

of 373,034 of its common stock.

Comprehensive Income or Loss

The following shows the components of accumulated other comprehensive income or loss as of December 31, 2021, 2020, and 2019 respectively:

Foreign Currency Translation Pension Benefit Derivative Instruments Total

Foreign Currency Translation Pension Benefit Cash Flow Hedge Total

(in thousands)

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Fair value of shares vested $ 15,701 $ 21,921 $ 16,760

Proceeds to the Company from the exercise of stock options $ — $ — $ 695

The Company allocates stock-based compensation expense amongst cost of sales, research and development and other engineering expense, selling expense, or general and administrative expense based on the job functions performed by the employees to whom the stock-based compensation is awarded.

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The Company’s seven non-employee directors are entitled to receive approximately $ 690 thousand in equity compensation annually.

The number of shares ultimately granted are based on the average closing share price for the Company over the 60 day period prior to approval of the award in April of each year.

In April 2020, the Company granted 9,239 shares of common stock to the Company's non-employee directors, based on the average closing price of $ 74.66 per share.

The Company recognized expense on these shares at an estimated fair value of $58.72 per share based on the closing price of the Company's common stock on the grant date, for a total expense of $ 543 thousand.

The number of shares ultimately granted are based on the average closing share price for the Company over the 60 day period prior to approval of the award in the second quarter of each year.

In May and June 2021, the Company granted 6,601 shares of the Company's common stock to the non-employee directors, based on the average closing price of $ 100.33 per share and recognized total expense of $ 756 thousand.

The total intrinsic value of RSUs vested during the years ended December 31, 2021, 2020 and 2019 was $ 15.7 million, $ 21.9 million and $ 16.7 million, respectively, based on the market value on the vest date.

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Shares have generally been awarded under the Stock Bonus Plan following the year in which the respective employee reached his or her tenth, twentieth, thirtieth, fortieth or fiftieth anniversary of employment with the Company or any direct or indirect subsidiary thereof.

The Company awarded 12,600 shares for service through 2020, ( 7,400 shares to be issued and 5,200 shares of which were settled in cash for the Company’s foreign employees) and awarded 7,000 shares for service through 2019, ( 4,000 shares to be issued and 3,000 shares of which were settled in cash for the Company’s foreign employees).

As a result, we recorded pre-tax compensation charges of $ 1.2 million in 2020, and $ 0.8 million for both of the years ended December 31, 2019 and 2018, respectively.

The charges also include cash bonuses to compensate employees for income taxes payable as a result of the stock bonuses.

The Company awarded shares for service through 2021, 2020, and 2019 as shown below:

2021 2020 2019

Shares issued 6,900 7,400 4,000

Shares settled with cash (foreign employees) 6,500 5,200 3,000

Total award 13,400 12,600 7,000

As a result, we recorded pre-tax compensation charges of $ 1.7 million, $ 1.2 million, and $ 0.8 million for years ended December 31, 2021, 2020, and 2019, respectively.

These charges include cash bonuses to compensate employees for income taxes payable as a result of the stock bonuses.

Trade Accounts Receivable, net

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$ 231,021 $ 165,128

The components of inventories consisted of the following:

The components of inventories are as follows:

(in thousands)

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The Company hedges committed exposures and does not engage in speculative transactions.

The credit risk of these derivative contracts is minimized since the contracts are with a large financial institution and accordingly, fair value adjustments related to the credit risk of the counterparty financial institution are not material.

The credit risk of these

derivative contracts is minimized since the contracts are with a large financial institution, and accordingly, fair value adjustments related to the credit risk of the counterparty financial institution are not material.

The Company sources certain materials for its concrete products from a wholly owned subsidiary in China, and as a result is exposed to variability in cash outflows associated with changes in the foreign exchange rate between the U.S.

Dollar and the Chinese Yuan (CNY).

As of December 31, 2020, the aggregate notional amount of the Company's outstanding foreign currency derivative contracts was to buy CNY 70.7 million by selling $ 10.2 million throughout fiscal 2021.

These forward contracts are accounted for as cash flow hedges under the accounting standards, and fair value is included in other current assets or other current liabilities, as applicable, in the consolidated balance sheet as follows (in thousands):

Consolidated Balance Sheet Location At December 31, 2020 At December 31, 2019

Foreign currency contracts Other current assets $ 390 $ —

Net deferred gains and losses on these contracts relating to changes in fair value are included in accumulated other comprehensive loss ("OCI"), a component of shareholders' equity in the consolidated balance sheets, and are reclassified into the line item in the consolidated statement of income in the which the hedged items are recorded in the same period the hedged item affects earnings.

There were no amounts recognized for gains or losses on these contracts during the year ended December 31, 2020.

As of December 31, 2021, the Company had no outstanding foreign currency derivative contracts.

Net deferred gains and losses on these contracts relating to changes in fair value are included in accumulated other comprehensive income or loss ("OCI"), a component of shareholders' equity in the consolidated balance sheets, and are reclassified into the line item in the consolidated statement of income in which the hedged items are recorded in the same period the hedged item affects earnings.

For the year ended December 31, 2021, the Company recognized gains of $ 0.6 million, as a reduction of cost of sales.

Changes in fair value of any forward contracts that are determined to be ineffective are immediately reclassified from OCI into earnings.

The amounts deferred in OCI are expected to be recognized as a component of cost of sales in the consolidated statement of operations from 2021 to 2022.

The amounts deferred in OCI are expected to be recognized as a component of cost of sales in the consolidated statement of operations during 2022.

There were no amounts recognized due to ineffectiveness during the year ended December 31, 2021.

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$ 259,869 $ 255,184

Property, plant and equipment as of December 31, 2020 and 2019, includes fully depreciated assets with an original cost of $ 200.5 million and $ 211.2 million, respectively.

These fully depreciated assets are still in use in the Company’s operations.

Property, plant and equipment as of December 31, 2021 and 2020, includes fully depreciated assets with an original cost of $ 234.0 million and $ 200.5 million, respectively, which are still in use in the Company’s operations.

The Company capitalizes certain development costs associated with internal use software, including the direct costs of services provided by third-party consultants and payroll for internal employees, both of which are performing development and implementation activities on a software project.

As of December 31, 2021 and 2020, the Company had capitalized software development costs net of accumulated amortization of $ 30.2 million and $ 29.4 million, respectively, included in Machinery and equipment and as of December 31, 2021 and 2020, $ 4.8 million and $ 5.5 million, respectively, was included in capital projects in progress.

In November 2019, the Company sold its selling and distribution facility in British Columbia, Canada for approximately $ 9.5 million in net proceeds after closing costs and sale price adjustments, which resulted in an estimated gain on disposal of fixed assets of $ 5.6 million.

Depreciation expense, including depreciation of equipment and amortization of internally developed software and software acquired through capital lease arrangements, was $ 36.1 million, $ 32.1 million and $ 32.6 million for the years ended December 31, 2021, 2020 and 2019, respectively.

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Reclassifications — ( 8 ) — ( 8 )

( 320 ) — — ( 320 )

Balance as of December 31, 2020 96,311 38,059 1,474 135,844

Goodwill acquired — 106 — 106

Foreign exchange ( 4 ) ( 1,622 ) ( 90 ) ( 1,716 )

1 unchanged sentence

Balance as of December 31, 2021 $ 96,307 $ 36,331 $ 1,384 $ 134,022

(1) Reclassifications during 2019 for an acquisition included the recognition of $ 481 thousand in non-compete agreements, trademarks and other, with a corresponding reductions of $ 320 thousand in goodwill and $ 161 thousand in other assets.

Goodwill Impairment Testing

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Australia and New Zealand.

The S&P Clever reporting unit includes ten components:

S&P Switzerland, S&P Poland, S&P The Netherlands, S&P Portugal, S&P Germany, S&P France, Socom, S&P Nordic and S&P Spain.

The S&P Clever reporting unit includes multiple European countries that are evaluated as one reporting unit.

For each of these reporting units, the Company aggregated the components because management concluded that they are economically similar and that the goodwill is recoverable from these components working in concert.

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If the Company judges that it is more likely than not that the fair value of the reporting unit is greater than the carrying amount, including goodwill, no further testing is required.

This assessment method was utilized in our 2020 and 2019 annual goodwill impairment test.

This assessment method was utilized in our 2020 annual goodwill impairment test.

In 2021, the Company applied the ("Step 1") approach where the Company compares the fair value of the reporting unit to its carrying value.

The fair value calculation uses both the income approach (discounted cash flow method) and the market approach, equally weighted.

If the Company determines that the carrying value of the net assets assigned to the reporting unit, including goodwill, exceeds the fair value of the reporting unit, no further action taken.

If the Company determines that the carrying value of a reporting unit’s goodwill exceeds its implied fair value, the Company would record an impairment charge equal to the difference between the implied fair value of the goodwill and the carrying value.

The 2021 and 2020 annual testing of goodwill for impairment did not result in impairment charges.

"See Item 7 - Critical Accounting Policies and Estimates - Goodwill and Other Intangible Assets ".

Amortizable Intangible Assets

Intangible assets from acquired businesses are recognized at their estimated fair values on the date of acquisition and consist of patents, unpatented technology, non-compete agreements, trademarks, customer relationships and other intangible assets.

Finite-lived intangibles are amortized to expense over the applicable useful lives, ranging from three to 21 years, based on the nature of the asset and the underlying pattern of economic benefit as reflected by future net cash inflows.

Intangible assets from acquired businesses or asset purchases are recognized at their estimated fair values on the date of acquisition and consist of patents, unpatented technology, non-compete agreements, trademarks, customer relationships and other intangible assets.

Finite-lived intangibles are amortized to expense over the applicable useful lives, ranging from three to twenty-one years , based on the nature of the asset and the underlying pattern of economic benefit as reflected by future net cash inflows.

The Company performs an impairment test of finite-lived intangibles whenever events or changes in circumstances indicate their carrying value may be impaired.

The total gross carrying amount and accumulated amortization of definite-lived intangible assets at December 31, 2020 were $ 67.1 million and $ 59.3 million, respectively.

The aggregate amount of amortization expense of intangible assets for the years

ended December 31, 2020, 2019 and 2018 was $ 6.1 million, $ 5.5 million and $ 6.0 million, respectively.

The total gross carrying amount and accumulated amortization of definite-lived intangible assets at December 31, 2021 was $ 73.0 million and $ 46.7 million, respectively.

The aggregate amount of amortization expense of intangible assets for the years ended December 31, 2021, 2020 and 2019 was $ 6.4 million $ 6.1 million and $ 5.5 million, respectively.

The weighted-average remaining amortization period for all amortizable intangibles on a combined basis is 8.0 years.

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Balance at January 1, 2020 $ 4,659 $ ( 561 ) $ 4,098

Purchases of intangibles 2,550 — 2,550

Purchases 40 — 40

Amortization — ( 373 ) ( 373 )

Balance at December 31, 2020 4,699 ( 934 ) 3,765

Purchases of intangible assets 40 — 40

Purchases 6,074 — 6,074

Amortization — ( 428 ) ( 428 )

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Amortization — ( 2,131 ) ( 2,131 )

Assets acquisitions, net of cash acquired 788 — 788

Foreign exchange 488 — 488

1 unchanged sentence

Amortization — ( 2,174 ) ( 2,174 )

Reclassifications 348 — 348

Foreign exchange ( 49 ) — ( 49 )

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Balance at January 1, 2020 $ 14,703 $ ( 5,529 ) $ 9,174

Purchases of intangibles assets - other 2,081 — 2,081

Assets acquisitions, net of cash acquired 6 — 6

Purchases 6,700 6,700

Amortization — ( 2,195 ) ( 2,195 )

Foreign exchange 179 — 179

Reclassifications (1)

Removal of fully amortized assets ( 100 ) 100 —

Balance at December 31, 2020 21,582 ( 7,724 ) 13,858

Purchases of intangible assets - licenses 6,700 6,700

Amortization — ( 2,631 ) ( 2,631 )

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Balance at December 31, 2021 $ 21,434 $ ( 10,355 ) $ 11,079

(1) Reclassifications during 2019 for an acquisition included $ 481 thousand recognized for non-compete agreements, trademarks and other, with a corresponding reductions of $ 320 thousand in goodwill and $ 161 thousand in other assets.

(in thousands) Gross

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Balance at December 31, 2020 18,123 ( 15,175 ) 2,948

Purchases of intangible assets 290 — 290

Disposal ( 217 ) — ( 217 )

Amortization — ( 1,186 ) ( 1,186 )

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Balance at December 31, 2021 $ 17,789 $ ( 16,361 ) $ 1,428

At December 31, 2020, estimated future amortization of intangible assets was as follows:

As of December 31, 2021, estimated future amortization of intangible assets was as follows:

(in thousands)

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Total $ 73,014 $ ( 46,745 ) $ 26,269

On January 1, 2019, the Company adopted ASU 2016-02 using the optional transition method.

The Company has operating leases for certain facilities, equipment and autos.

The existing operating leases expire at various dates through 2025, some of which include options to extend for up to five years .

The Company measures its lease liability as the present value of the lease payments to be made over the lease term discounted using the Company’s incremental borrowing rate.

The Company measures

its ROU assets at the amount at which the lease liability is recognized plus initial direct costs incurred or prepayment amounts.

The Company has operating leases for certain facilities, equipment and automobiles.

The existing operating leases expire at various dates through 2026, some of which include options to extend the leases for up to five years.

The Company measured the lease liability at the present value of the lease payments to be made over the lease term.

The lease payments are discounted using the Company's incremental borrowing rate.

The Company measured the right-of-use ("ROU") assets at the amount at which the lease liability is recognized plus initial direct costs incurred or prepayment amounts.

The ROU assets are amortized on a straight-line basis over the lease term.

Finance Lease Obligations

During 2017, the Company entered into two to four -year lease agreements for certain office equipment with Cisco Systems Capital Corporation for a total of approximately $ 4.4 million, which was recorded in fixed assets as capital lease obligations.

These capital lease obligations are included in current liabilities and other long-term liabilities in the accompanying consolidated balance sheets.

The interest rates for these two capital leases are 2.89 % and 3.50 %, respectively, and the two leases will mature in May 2021 and July 2021, respectively.

The following table provides a summary of leases included on the consolidated balance sheets, consolidated statements of earnings, and consolidated statements of cash flows as of December 31, 2020:

The following table provides a summary of leases included on the consolidated balance sheets as of December 31, 2021 and 2020, and consolidated statements of earnings and comprehensive income, and consolidated statements of cash flows for the year ended December 31, 2021 and 2020:

Consolidated Balance Sheets Line Item At December 31,

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Other current liabilities Accrued expenses and other current liabilities 0 $ 384

Other long-term liabilities Deferred income tax and other long-term liabilities — 386

Total finance lease liabilities $ 0 $ 384

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Operating leases $ 11,530 $ 20,308

following is a schedule, by years, of maturities for lease liabilities as of December 31, 2020:

(in thousands) Operating Leases Finance Leases

The following is a schedule, by years, of maturities for lease liabilities as of December 31, 2021:

(in thousands) Operating Leases

2022 $ 10,887

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Finance leases — % 3.3 %

Accrued Liabilities

Accrued liabilities consisted of the following:

Accrued Liabilities and Other Current Liabilities

Accrued liabilities and other current liabilities consisted of the following:

(in thousands) 2021 2020

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$ 187,387 $ 145,790

In May 2020, the Company entered into a third amendment to the unsecured credit agreement dated July 27, 2012 with Wells Fargo Bank, National Association, and certain other institutional lenders that provides for a $ 300.0 million unsecured revolving credit facility (“Credit Facility”).

In July 2021, the Company entered into a fourth amendment to the unsecured credit agreement dated July 27, 2012 with Wells Fargo Bank, National Association, and certain other institutional lenders that provides for a $ 300.0 million unsecured revolving credit facility (“Credit Facility”).

The Amendment extends the term of the Credit Agreement from July 23, 2022, to July 12, 2026.

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Amounts borrowed under the Credit Agreement bear interest at an annual rate equal to either, at the Company’s option, (a) the rate for Eurocurrency deposits for the corresponding deposits of U.S.

dollars as published by the ICE Benchmark Administration Limited, a United Kingdom company, or a comparable or successor quoting service approved by the Agent (the “LIBOR Rate”), adjusted for any reserve requirement in effect, plus a spread of from 0.80 to 1.65 percent, as determined on a quarterly basis based on the Company’s leverage ratio, or (b) a base rate, plus a spread of 0.20 to 0.65 percent, as determined on a quarterly basis based on the Company’s leverage ratio.

dollars as published by the ICE Benchmark

Administration Limited, a United Kingdom company, or a comparable or successor quoting service approved by the Administrative Agent (the “LIBOR Rate”), adjusted for any reserve requirement in effect, plus a spread of from 0.65 to 1.50 percent, as determined on a quarterly basis based on the Company’s leverage ratio, or (b) a base rate, plus a spread of 0.00 to 0.50 percent, as determined on a quarterly basis based on the Company’s leverage ratio.

In no event shall the LIBOR Rate be less than 0.50 percent.

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Loans outstanding under the Credit Agreement may be prepaid at any time without penalty except for LIBOR Rate breakage costs and expenses.

In March 2020, the Company borrowed $ 150.0 million from the Credit Facility to increase its cash position and preserve financial flexibility in light of uncertainty resulting from the COVID-19 outbreak;

and subsequently paid down the balance in full by December 2020.

As of December 31, 2020, no amounts are outstanding under the Credit Facility.

As of December 31, 2021, in addition to the Credit Facility, certain of the Company’s domestic subsidiaries are guarantors for a credit agreement between certain of its foreign subsidiaries and institutional lenders.

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In Stockton, California, two union contracts will expire in September 2023 and June 2023, respectively.

Also, the Company has two contracts in San Bernardino County, California that will expire in June 2022 and by the end of March 2021, respectively.

Also, the Company has two contracts in San Bernardino County, California that will expire in February 2025 and in June 2022, respectively.

Based on current information and subject to future events and circumstances, the Company believes that, even if new agreements are not reached before the existing labor union contracts expire, it is not expected to have a material adverse effect on the Company’s ability to provide products to customers or on the Company’s profitability.

Environmental

The Company’s policy with regard to environmental liabilities is to accrue for future environmental assessments and remediation costs when information becomes available that indicates that it is probable that the Company is liable for any related claims and assessments and the amount of the liability is reasonably estimable.

related claims and assessments and the amount of the liability is reasonably estimable.

The Company does not believe that any such matters will have a material adverse effect on the Company’s financial condition, cash flows or results of operations.

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11-1-1522-07, which is now closed.

The Nishimura case concerned alleged corrosion of the Company’s galvanized “hurricane straps” and mudsill anchor products used in a residential project in Ewa by Gentry, Honolulu, Hawaii.

In the Nishimura case, the plaintiff homeowners and the developer, Gentry Homes, Ltd.

(“Gentry”), arbitrated their dispute and agreed on a settlement in the amount of approximately $90 million.

In the subsequent Gentry case, Gentry alleges breach of warranty and negligent misrepresentation by the Company related to its “hurricane strap” and mudsill anchor products, and demands general, special, and consequential damages from the Company in an amount to be proven at trial.

Gentry also seeks pre-judgment and post-judgment interest, attorneys’ fees and costs, and other relief.

The Company admits no liability and will vigorously defend the claims brought against it.

At this time, the Company cannot reasonably ascertain the likelihood that it will be found responsible for substantial damages to Gentry.

Based on the facts currently known, and subject to future events and circumstances, the Company believes that all or part of the claims brought against it in the Gentry case may be covered by its insurance policies.

Given the nature and the complexities involved in the Gentry proceeding, the Company is unable to estimate reasonably the likelihood of possible loss or a range of possible loss until the Company knows, among other factors, (i) the specific claims brought against the Company and the legal theories on which they are based;

(ii) what claims, if any, might be dismissed without trial;

(iii) how the discovery process will affect the litigation;

(iv) the settlement posture of the other parties to the litigation;

(v) the damages to be proven at trial, particularly if the damages are not specified or are indeterminate;

(vi) the extent to which the Company’s insurance policies will cover the claims or any part thereof, if at all;

and (vii) any other factors that may have a material effect on the proceeding.

The Nishimura case concerned alleged corrosion of the Company’s galvanized “hurricane straps” and mudsill anchor products used in a residential project in the Ewa District of Honolulu, Hawaii by Gentry Homes, Ltd.

In the Gentry Case , Gentry alleges breach of warranty and negligent misrepresentation by the Company related to its “hurricane strap” and mudsill anchor products.

The Gentry Case was resolved pursuant to a written settlement agreement ("Settlement") without adjudication or any admission of liability by the Company.

The Settlement may not be used as evidence of liability against the party.

The case was dismissed with prejudice on January 4, 2022.

The Company incurred no uninsured liability to the plaintiff in connection with the Gentry Case , or the Settlement.

The provision for income taxes from operations consisted of the following:

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$ 358,549 $ 249,564 $ 178,357

At December 31, 2020, the Company had $ 40.4 million of pre-tax loss carryforwards in various foreign taxing jurisdictions, of which $ 0.1 million will begin to expire between 2021 and 2022.

The remaining tax losses can be carried forward indefinitely.

At December 31, 2020, and 2019, the Company had deferred tax valuation allowances of $ 11.3 million and $ 11.6 million, respectively.

The valuation allowance decreased $ 0.3 million and $ 1.6 million for the years ended December 31, 2020, and December 31, 2019, respectively.

The decrease in 2020 valuation allowances was primarily a result of the release of valuation allowance of foreign losses in Simpson Strong-Tie A/S, a subsidiary in Denmark.

The decrease in 2019 valuation allowances was primarily a result of the releases of valuation allowance of foreign losses in Simpson Strong-Tie GmbH, a subsidiary of Germany.

The Company has not historically recorded federal income taxes on the undistributed earnings of its foreign subsidiaries because such earnings are reinvested.

As a result of the implications of the 2017 Tax Reform Act and in satisfying Management’s 2020 Plan, the Company announced one-time distributions from select foreign jurisdictions to the U.S.

The Company repatriated approximately $ 63.0 million between the third and fourth quarter and recorded taxes of approximately $ 1.0 million which is primarily comprised of withholding taxes and state income taxes.

As of December 31, 2020, the Company asserts that its accumulated undistributed earnings generated by our foreign subsidiaries are permanently reinvested and as such, has not recognized a deferred tax liability on its investment in foreign subsidiaries.

At December 31, 2021, the Company had $ 41.4 million of pre-tax loss carryforwards in various foreign taxing jurisdictions.

All of the tax losses can be carried forward indefinitely.

At December 31, 2021, and 2020, the Company has valuation allowances of $ 12.0 million and $ 11.3 million, respectively.

The valuation allowance increased $ 0.7 million and decreased $ 0.3 million for the years ended December 31, 2021, and December 31, 2020, respectively.

The increase in the 2021 valuation allowances was primarily the result of an impairment on a foreign equity investment.

The decrease in the 2020 valuation allowances was primarily a result of the release of valuation allowance for foreign losses in Simpson Strong-Tie A/S, a subsidiary in Denmark.

As of December 31, 2021, the Company asserts that its accumulated undistributed earnings generated by our foreign subsidiaries are permanently reinvested and as such, has not recognized a US deferred tax liability on its investment in foreign subsidiaries.

The Company will continue to assess its permanent reinvestment assertion on a quarterly basis.

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Uncertain tax positions’ unrecognized tax benefits 72 77

Foreign tax loss carry forward 7,717 7,763

Other — 1,026

Non-United States tax loss carry forward 7,824 7,717

$ 42,098 $ 37,779

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Total Deferred tax asset/(liability) $ ( 13,532 ) $ ( 14,416 )

A reconciliation of the beginning and ending amounts of unrecognized tax benefits in 2020, 2019 and 2018, respectively, was as follows, including foreign translation amounts:

A reconciliation of the beginning and ending amounts of unrecognized tax benefits in 2021, 2020 and 2019, respectively, were as follows, including foreign translation amounts:

Reconciliation of Unrecognized Tax Benefits 2021 2020 2019

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The Company accrues interest and penalties related to unrecognized tax benefits in income tax expense in accordance with the Company’s historical accounting policy.

During the year ended December 31, 2020, and 2019, accrued interest decreased by $ 108 thousand and $ 20 thousand, respectively.

During the year ended December 31, 2018, accrued interest increased by $ 5 thousand.

The Company had accrued $ 0.3 million for fiscal year ended 2020, and $ 0.4 million for each of the fiscal years ended 2019 and 2018, for the potential payment of interest, before income tax benefits.

The Company does not expect any material changes in the unrecognized tax benefits within the next 12 months.

During the year ended December 31, 2021, 2020 and 2019, accrued interest decreased by $ 39 thousand and $ 108 thousand and $ 20 thousand, respectively.

The Company had accrued $ 0.2 million for fiscal year ended 2021, $ 0.3 million for fiscal year ended 2020 and $ 0.4 million for fiscal year ended 2019, for the potential payment of interest before income tax benefits.

The Company does not expect any material changes in unrecognized tax benefits within the next 12 months.

At December 31, 2021, the Company remained subject to federal income tax examinations in the U.S.

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Our total contribution to various industry-wide, union-sponsored pension funds and a statutorily required pension fund for employees in the U.S.

and Europe were $ 5.1 million for the year ended December 31, 2020 and $ 4.5 million for the years ended 2019 and 2018, respectively .

and Europe were $ 5.0 million for the year ended December 31, 2021 and $ 5.1 million, $ 4.5 million for the years ended 2020 and 2019, respectively.

Related Party Transactions

During 2020, the Company identified certain purchases of goods and services from companies where the Chief Executive Officer of the Company serves as a director on the respective company providing the goods or services.

During 2021, the Company identified certain purchases of goods and services from companies where the Chief Executive Officer of the Company serves as a director on the respective company's board providing the goods or services.

The amount of goods and services purchased by the Company pursuant to these arrangements was not material to the Company’s consolidated statement of income and cash flows for the year ended December 31, 2021.

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These segments are similar in several ways, including the types of materials used, the production processes, the distribution channels and the product applications.

The Administrative & All Other column primarily includes expenses such as self-insured workers compensation claims for employees of the Company’s venting business, which was sold in 2010, stock-based compensation for certain members of management, interest expense, foreign exchange gains or losses and income tax expense, as well as revenues and expenses related to real estate activities, such as gain on sale of property, rental income and depreciation expense on the Company’s property in Vacaville, California.

In November 2018, the Vacaville property was sold for $ 17.5 million, net of closing costs and sales price adjustments and resulted in a pre-tax gain of $ 8.8 million.

The Administrative & All Other column primarily includes expenses such as self-insured workers compensation claims for employees, stock-based compensation for certain members of management, interest expense, foreign exchange gains or losses and income tax expense, as well as revenues and expenses related to real estate activities.

The following table shows certain measurements used by management to assess the performance of the segments described above as of December 31, 2021, 2020 and 2019, respectively:

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Provision for income taxes 87,962 3,826 241 73 92,102

Capital expenditures, including purchases of

intangible assets, and business acquisitions, net of

cash acquired 29,937 4,248 705 5,816 40,706

Capital expenditures, asset acquisition, and equity

investments, net of cash acquired 45,817 2,403 603 988 49,811

Total assets 1,352,988 202,631 31,832 ( 103,326 ) 1,484,125

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Provision for income taxes 58,201 3,817 613 ( 67 ) 62,564

Capital expenditures and business acquisitions, net of

Capital expenditures, including purchases of

intangible assets, and business combination, net of

cash acquired 29,937 4,248 705 5,816 40,706

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Depreciation and amortization 30,652 5,457 1,698 595 38,402

Impairment of goodwill — 6,686 — — 6,686

Significant non-cash charges 5,273 1,141 211 4,157 10,782

Provision for (benefit from) income taxes 39,638 2,947 113 2,797 45,495

Provision for income taxes 40,452 1,934 577 1,412 44,375

Capital expenditures and business acquisitions, net of

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Cash collected by the Company’s U.S.

subsidiaries is routinely transferred into the Company’s cash management accounts, and therefore has been in the total assets of "Administrative & All Other." Cash and cash equivalent balances in "Administrative & All Other" were $ 199.8 million, $ 161.4 million and $ 114.8 million as of December 31, 2020, 2019 and 2018, respectively.

subsidiaries is routinely transferred into the Company’s cash management accounts, and therefore is in the total assets of "Administrative & All Other." Cash and cash equivalent balances in "Administrative & All Other" were $ 223.5 million, $ 199.8 million and $ 161.4 million as of December 31, 2021, 2020 and 2019, respectively.

As of December 31, 2021, the Company had $ 75.8 million, or 25.2 %, of its cash and cash equivalents held outside the U.S.

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The Company’s measure of profit or loss for its reportable segments is income (loss) from operations.

The reconciling amounts between consolidated income before tax and consolidated income from operations are net interest income (expense), net and other, foreign exchange gain (loss), net gain on bargain purchase of a business, and loss on disposal of a business.

The reconciling amounts between consolidated income before tax and consolidated income from operations are net interest income (expense), net and other, foreign exchange gain (loss), certain legal and professional fees associated with the acquisition of the Etanco Group, refer to Note 19 " Subsequent Events," and loss on disposal of a business.

Interest income (expense) is primarily attributed to “Administrative & All Other.”

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Its concrete construction products include adhesives, specialty chemicals, mechanical anchors, carbide drill bits, powder actuated tools and reinforcing fiber materials and are used for restoration, protection or strengthening concrete, masonry and steel construction in residential, industrial, commercial and infrastructure construction.

The following table show the distribution of the Company’s net sales by product for the years ended December 31, 2020, 2019 and 2018, respectively:

The following table shows the distribution of the Company’s net sales by product for the years ended December 31, 2021, 2020 and 2019, respectively:

(in thousands)

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Total $ 1,573,217 $ 1,267,945 $ 1,136,539

No customers accounted for as much as 10% of net sales for the years ended 2020, 2019 and 2018.

No customers accounted for at least 10% of net sales for the years ended 2021, 2020 and 2019.

Subsequent Events

On January 22, 2021, the Board of Directors declared a cash dividend of $ 0.23 per share of our common stock, estimated to be $ 10.0 million in total.

On January 20, 2022, the Company's Board of Directors declared a cash dividend of $ 0.25 per share of our common stock, estimated to be $ 10.8 million in total.

The record date for the dividend will be April 7, 2022, and will be paid on April 28, 2022 .

Effective January 20, 2022, Mike Olosky, the Company’s Chief Operating Officer ("COO") was promoted to President and COO.

Karen Colonias, who previously served as the Company’s President and Chief Executive Officer ("CEO") will continue to serve as CEO.

On January 26, 2022, the Company signed a securities purchase agreement to acquire Etanco Group for a purchase price of $ 818 million (1) (€ 725 million).

The acquisition is expected to close on April 1, 2022.

(1) Reflects EUR to USD exchange rate based on binding offer agreed upon as of December 22, 2021.

Simpson Manufacturing Co., Inc.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7A. Quantitative and Qualitative Disclosures About Market Risk