What changed in this filing

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Item 1. Financial Statements

2024-05-07 compared with 2023-11-07 · 188 added, 292 removed, 368 unchanged (57% of the section changed)

4 unchanged sentences

(In thousands, unaudited)

September 30, December 31,

March 31, December 31,

2024 2023 2023

14 unchanged sentences

Trade accounts payable $ 102,997 $ 95,302 $ 107,524

Income tax payable 87,569 15,804 7,897

Accrued liabilities and other current liabilities 226,944 212,864 231,233

3 unchanged sentences

Long-term debt, net of issuance costs 453,454 549,594 458,791

Deferred income tax and other long-term liabilities 125,546 121,723 140,608

Deferred income tax 96,937 111,221 98,170

Other long-term liabilities 41,400 31,376 51,436

Total liabilities 996,283 1,068,225 1,024,978

13 unchanged sentences

(In thousands except per-share amounts, unaudited)

Three Months Ended Nine Months Ended

September 30, September 30,

2023 2022 2023 2022

Three Months Ended

Net sales $ 530,579 $ 534,430

6 unchanged sentences

Total operating expenses 146,610 133,121

Acquisition and integration related costs 785 1,866 4,086 14,681

Integration costs 2,046 1,442

Net gain on disposal of assets ( 198 ) ( 50 )

1 unchanged sentence

Interest income (expense), net and other finance costs 351 ( 570 )

Other & foreign exchange loss, net ( 1,429 ) ( 1,707 ) ( 1,471 ) ( 3,814 )

Other & foreign exchange gain (loss), net 1,969 ( 398 )

Income before taxes 98,418 117,395

18 unchanged sentences

(In thousands except per-share data, unaudited)

Three Months Ended September 30, 2023 and 2022

Common Stock Additional Paid-in Retained Accumulated Other Comprehensive Treasury

Shares Par Value Capital Earnings Loss Stock Total

Balance at June 30, 2023 42,673 $ 426 $ 301,612 $ 1,290,686 $ ( 9,113 ) $ — $ 1,583,611

Net income — — — 104,021 — — 104,021

Translation adjustment, net of tax — — — — ( 13,238 ) — ( 13,238 )

Pension adjustment and other,

net of tax — — — — ( 4 ) — ( 4 )

Cash flow hedges, net of tax — — — — 1,087 — 1,087

Stock-based compensation — — 5,537 — — — 5,537

Cash dividends declared on common stock, $0.27 per share — — — ( 11,523 ) — — ( 11,523 )

Balance at September 30, 2023 42,673 $ 426 $ 307,149 $ 1,383,184 $ ( 21,268 ) $ — $ 1,669,491

Balance at June 30, 2022 42,906 $ 433 $ 293,720 $ 1,072,959 $ ( 36,193 ) $ ( 46,281 ) $ 1,284,638

Net income — — — 88,243 — — 88,243

Translation adjustment and other,

net of tax — — — — ( 26,476 ) — ( 26,476 )

Derivative instrument adjustments, net of tax — — — — 26,823 — 26,823

Pension adjustment and other,

net of tax — — — — 459 — 459

Stock-based compensation — — 3,236 — — — 3,236

Shares issued from release of Restricted Stock Units 1 — — — — — —

Repurchase of common stock ( 309 ) — — — — ( 28,281 ) ( 28,281 )

Cash dividends declared on common stock, $0.26 per share — — — ( 11,087 ) — — ( 11,087 )

Balance at September 30, 2022 42,598 $ 433 $ 296,956 $ 1,150,115 $ ( 35,387 ) $ ( 74,562 ) $ 1,337,555

The accompanying notes are an integral part of these condensed consolidated financial statements

Simpson Manufacturing Co., Inc.

and Subsidiaries

Condensed Consolidated Statements of Stockholders’ Equity

(In thousands except per-share data, unaudited)

Nine Months Ended September 30, 2023 and 2022

Three Months Ended March 31, 2024 and 2023

Common Stock Additional Paid-in Retained Accumulated Other Comprehensive Treasury

2 unchanged sentences

Net income — — — 75,430 — — 75,430

Translation adjustment, net of tax — — — — ( 8,729 ) — ( 8,729 )

Pension adjustment and other,

Translation adjustment and other, net of tax — — — — ( 19,642 ) — ( 19,642 )

Pension adjustment,

net of tax — — — — ( 73 ) — ( 73 )

Cash flow hedges, net of tax — — — — 5,118 — 5,118

Stock-based compensation 15,564 — — — 15,564

Stock-based compensation expense — — 4,085 — — — 4,085

Shares issued from release of Restricted Stock Units 119 1 ( 7,543 ) — — — ( 7,542 )

Retirement of common stock — ( 3 ) — ( 50,360 ) — 50,363 —

Cash dividends declared on common stock, $0.27 per share — — — ( 11,459 ) — — ( 11,459 )

Balance at September 30, 2023 42,673 $ 426 $ 307,149 $ 1,383,184 $ ( 21,268 ) $ — $ 1,669,491

Balance at December 31, 2021 43,217 $ 432 $ 294,330 $ 906,841 $ ( 17,605 ) $ — $ 1,183,998

Balance at March 31, 2024 42,442 $ 424 $ 309,661 $ 1,440,165 $ ( 24,587 ) $ — $ 1,725,663

Balance December 31, 2022 42,560 $ 425 $ 298,983 $ 1,118,030 $ ( 4,059 ) $ — $ 1,413,379

Net income — — — 87,954 — — 87,954

Translation adjustment, net of tax — — — — ( 54,345 ) — ( 54,345 )

Pension adjustment and other,

Translation adjustment and other,

net of tax — — — — 4,560 — 4,560

Pension adjustment, net of tax — — — — 218 — 218

Cash flow hedges, net of tax — — — — ( 4,705 ) — ( 4,705 )

Stock-based compensation — — 11,190 — — — 11,190

Stock-based compensation expense — — 4,390 — — — 4,390

Shares issued from release of Restricted Stock Units 103 1 ( 7,397 ) — — — ( 7,396 )

Repurchase of common stock ( 764 ) — — — — ( 74,562 ) ( 74,562 )

Cash dividends declared on common stock, $ 0.26 per share

Common stock issued at $139.07 per share for stock bonus 7 — 960 — — — 960

Balance at September 30, 2022 42,598 $ 433 $ 296,956 $ 1,150,115 $ ( 35,387 ) $ ( 74,562 ) $ 1,337,555

— — — ( 10,991 ) — — ( 10,991 )

Balance at March 31, 2023 42,663 $ 426 $ 295,976 $ 1,194,993 $ ( 3,986 ) $ — $ 1,487,409

The accompanying notes are an integral part of these condensed consolidated financial statements

3 unchanged sentences

(In thousands, unaudited)

Nine Months Ended

September 30,

Three Months Ended

Cash flows from operating activities

4 unchanged sentences

Noncash lease expense 3,865 2,946

Inventory step-up expense — 12,151

(Gain) loss in equity method investment, before tax 531 ( 229 )

Release of acquisition related tax contingency

Loss in equity method investment, before tax

Deferred income taxes ( 881 ) —

Noncash compensation related to stock plans 5,346 4,629

Provision for doubtful accounts 879 1,146

Provision (recovery) for doubtful accounts ( 416 ) 635

Deferred hedge gain ( 752 ) ( 896 )

3 unchanged sentences

Trade accounts payable 399 ( 3,418 )

Income taxes payable 79,542 12,930

Other current assets ( 12,758 ) ( 3,137 )

5 unchanged sentences

Acquisitions, net of cash acquired — ( 8,329 )

( 17,525 ) ( 806,544 )

Equity method investments ( 712 ) ( 2,768 )

Purchases of equity investments ( 101 ) —

Proceeds from sale of property and equipment 142 44

Proceeds from sale of business 8,544 —

Terminated forward contract — 3,535

Net cash used in investing activities ( 39,371 ) ( 27,043 )

Cash flows from financing activities

Termination of cash flow hedge — 21,252

Repurchase of common stock — ( 74,562 )

Proceeds from borrowing under lines of credit and term loan 264 716,721

Repayments of lines of credit and term loan ( 17,362 ) ( 27,816 )

Debt issuance costs — ( 6,804 )

Proceeds from line of credit 1,262 271

Repayments of lines of credit ( 7,088 ) ( 5,625 )

Dividends paid ( 11,430 ) ( 11,065 )

Cash paid on behalf of employees for shares withheld ( 7,544 ) ( 7,398 )

Net cash provided by (used in) financing activities ( 58,175 ) 586,449

Net cash used in financing activities

( 24,800 ) ( 23,817 )

Effect of exchange rate changes on cash and cash equivalents ( 4,467 ) ( 299 )

Net increase in cash and cash equivalents

Net decrease in cash and cash equivalents

( 60,700 ) ( 48,201 )

4 unchanged sentences

Dividends declared but not paid 11,459 10,991

Issuance of Company’s common stock for compensation — 960

The accompanying notes are an integral part of these condensed consolidated financial statements

6 unchanged sentences

All significant intercompany transactions have been eliminated.

Certain amounts in the Condensed Consolidated Financial Statements of prior year have been reclassified to conform to the fiscal 2024 presentation.

These reclassifications had no impact on the Company's Total Assets, Total Stockholders' Equity, Net sales or Net income in its Condensed Consolidated Financial Statements.

Use of Estimates

The preparation of the Condensed Consolidated Financial Statements in conformity with accounting principles generally accepted in the United States of America ("GAAP") requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the Condensed Consolidated Financial Statements and the reported amounts of revenues and expenses during the reporting period.

The preparation of the Condensed Consolidated Financial Statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the Condensed Consolidated Financial Statements and the reported amounts of revenues and expenses during the reporting period.

Management believes that these Condensed Consolidated Financial Statements include all normal and recurring adjustments necessary for a fair presentation under GAAP.

7 unchanged sentences

As a result, the Company believes the results of operations for the interim periods presented are not necessarily indicative of the results to be expected for any future periods.

Revenue Recognition

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 of a product to a customer at a point in time.

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 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.

Net Income Per Common Share

The Company calculates net income per common share based on the weighted-average number of shares of the Company's common stock outstanding during the period.

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

Accounting for Leases

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

As an accounting policy for short-term leases, the Company elected to not recognize a right-of-use ("ROU") asset and liability if, at the commencement date, the lease (1) has a term of 12 months or less and (2) does not include renewal and purchase options that the Company is reasonably certain to exercise.

Monthly payments on short-term leases are recognized on a straight-line basis over the full lease term.

Accounting for Stock-Based Compensation

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 three or 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 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.

Cash and Cash Equivalents

The Company classifies investments that are highly liquid and have maturities of three months or less at the date of purchase as cash equivalents.

Current Estimated Credit Loss - Allowance for doubtful accounts

The Company maintains an allowance for doubtful accounts receivable for estimated future expected credit losses resulting from customers' failure to make payments on its accounts receivable.

The Company determines the estimate of the allowance for doubtful accounts receivable by considering several factors, including (1) specific information on the financial condition and the current creditworthiness of customers, (2) credit rating, (3) payment history and historical experience, (4) aging of the accounts receivable, and (5) reasonable and supportable forecasts about collectability.

The Company also reserves 100 % of the amounts deemed uncollectible due to a customer's deteriorating financial condition or bankruptcy.

Every quarter, the Company evaluates the customer group using the accounts receivable aging report and its best judgment when considering changes in customers' credit ratings, level of delinquency, customers' historical payments and loss experience, current market and economic conditions, and expectations of future market and economic conditions.

The changes in the allowance for doubtful accounts receivable for the three months ended March 31, 2024 are outlined in the table below:

December 31, 2023 Expense (Deductions), net

March 31, 2024

Allowance for doubtful accounts

$ 3,882 ( 416 ) ( 539 ) $ 2,927

1 Amount is net of recoveries and the effect of foreign currency fluctuations.

Fair Value of Financial Instruments

7 unchanged sentences

The carrying amounts of trade accounts receivable, accounts payable, accrued liabilities and other current liabilities approximate fair value due to the short-term nature of these instruments.

The fair values of the Company's interest rate and foreign currency contracts are classified as Level 2 within the fair value hierarchy.

The fair values of the Company’s contingent consideration related to acquisitions and equity investments are classified as Level 3 within the fair value hierarchy, as these amounts are based on unobservable inputs developed using management's estimates and entity-specific assumptions, which reflect those that market participants would use, and are evaluated on an ongoing basis.

The following tables summarize financial assets and liabilities measured at fair value as of September 30, 2023 and 2022:

(in millions)

The fair values of interest rate and foreign currency contracts are classified as Level 2 within the fair value hierarchy.

The fair values of the Company’s contingent consideration related to acquisitions is classified as Level 3 within the fair value hierarchy, as these amounts are based on unobservable inputs such as management estimates and entity-specific assumptions and are evaluated on an ongoing basis.

The following tables summarize the financial assets and financial liabilities measured at fair value for the Company as of March 31, 2024 and 2023:

(in thousands)

Level 1 Level 2 Level 3 Level 1 Level 2 Level 3

1 unchanged sentence

$ 113,716 $ — $ — $ 120,485 $ — $ —

Term loan due 2027 (2)

— 405,000 — 427,500 —

Revolver due 2027 (2)

— 75,038 — — 150,038 —

Derivative instruments - assets (3)

3 unchanged sentences

Contingent considerations — — 6,508 — — 6,500

1) The carrying amounts of cash equivalents, representing United States Treasury securities and money market funds traded in an active market with relatively short maturities, are reported on the consolidated balance sheet as of September 30, 2023 and 2022 as a component of "Cash and cash equivalents".

(1) The carrying amounts of cash equivalents, representing money market funds traded in an active market with relatively short maturities, are reported on the consolidated balance sheet as of March 31, 2024 and 2023 as a component of "Cash and cash equivalents".

(2) The carrying amounts of our term loan and revolver approximate fair value as of March 31, 2024 based upon their terms and conditions in comparison to debt instruments with similar terms and conditions available on the same date.

(3) Derivatives for interest rate, foreign exchange and forward swap contracts are discussed in Note 7.

The carrying amounts of the term loan and revolver approximate fair value as of September 30, 2023 based upon its terms and conditions in comparison to debt instruments with similar terms and conditions available on the same date.

Derivative Instruments

1 unchanged sentence

Foreign currency and interest rate risk are the primary market risks the Company manages through the use of derivative instruments, which are accounted for as cash flow hedges or net investment hedges under the accounting standards and carried at fair value as other current or noncurrent assets or as other current or other long-term liabilities.

Assets and liabilities with the legal right of offset have been netted.

Assets and liabilities with the legal right of offset are not offset in the consolidated balance sheets.

Net deferred gains and losses related to changes in fair value of cash flow hedges are included in accumulated other comprehensive income/loss (“OCI”), a component of stockholders' equity, and are reclassified into the line item in the Condensed Consolidated Statement of Earnings and Comprehensive Income in which the hedged items are recorded in the same period the hedged item affects earnings.

2 unchanged sentences

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

Cash and Cash Equivalents

The Company classifies investments that are highly liquid and have maturities of three months or less at the date of purchase as cash equivalents.

Current Estimated Credit Loss - Allowance for Doubtful Accounts

The Company maintains an allowance for doubtful accounts receivable for estimated future expected credit losses resulting from customers' failure to make payments on its accounts receivable.

The Company determines the estimate of the allowance for doubtful accounts receivable by considering several factors, including (1) specific information on the financial condition and the current creditworthiness of customers, (2) credit rating, (3) payment history and historical experience, (4) aging of the accounts receivable, (5) reasonable and supportable forecasts about collectability, and (6) current market and economic conditions, and expectations of the future market and economic conditions.

The Company also reserves 100 % of the amounts deemed uncollectible due to a customer's deteriorating financial condition or bankruptcy.

Every quarter, the Company evaluates the collectability based on customer group using the accounts receivable aging report and its best judgment when considering changes in customers' credit ratings, level of delinquency, customers' historical payments and loss experience, current market and economic conditions, and expectations of future market and economic conditions.

The changes in the allowance for doubtful accounts receivable for the nine months ended September 30, 2023 are outlined in the table below:

(in thousands)

December 31, 2022 Expense (Deductions), net

September 30, 2023

Allowance for doubtful accounts

$ 3,240 858 ( 197 ) $ 3,901

1 Amount is net of recoveries and the effect of foreign currency fluctuations.

Business Combinations and Asset Acquisitions

Business combinations are accounted for under the acquisition method in accordance with ASC 805, Business Combinations.

The acquisition method requires identifiable assets acquired and liabilities assumed and any noncontrolling interest in the business acquired be recognized and measured at fair value on the acquisition date, which is the date that the acquirer obtains control of the acquired business.

The amount by which the fair value of consideration transferred as the purchase price exceeds the net fair value of assets acquired and liabilities assumed is recorded as goodwill.

Acquisitions that do not meet the definition of a business under the ASC 805 are accounted for as an acquisition of assets, whereby all of the cost of the individual assets acquired and liabilities assumed, including certain transactions costs, are allocated on a relative fair value basis.

Accordingly, goodwill is not recognized in an asset acquisition.

Revenue Recognition

Generally, the Company recognizes revenue under Accounting Standards Codification (ASC 606) Revenue From Contracts With Customers.

Revenue from a contract with a customer exists when the goods are shipped, services are rendered, and the related invoice is generated.

The Company has identified each product or service specified in the invoice to be distinct and the duration of the contract to not extend beyond the promised goods or services already transferred.

The transaction price of each performance obligation is specified in the invoice that is based on its relative stated standalone selling price.

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

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.

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.

The Company presents taxes collected and remitted to governmental authorities on a net basis in the consolidated statements of operations.

Additionally, all taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction and collected from a customer (e.g., sales, use, value added, and some excise taxes) are excluded from revenue.

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

As an accounting policy for short-term leases, the Company elected to not recognize a right-of-use (“ROU”) asset and liability if, at the commencement date, the lease (1) has a term of 12 months or less and (2) does not include renewal and purchase options that the Company is reasonably certain to exercise.

Monthly payments on short-term leases are recognized on a straight-line basis over the full lease term.

Stock-Based Compensation

Stock-based compensation 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 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.

Income taxes are calculated using an asset and liability approach.

The provision for income taxes includes federal, state and foreign taxes currently payable, and deferred taxes arising from temporary differences between the financial statement and tax bases of assets and liabilities.

The provision for income taxes includes federal, state and foreign taxes currently payable, and deferred taxes due to temporary differences between the financial statement and tax bases

of assets and liabilities.

In addition, future tax benefits are recognized to the extent that realization of such benefits is more likely than not.

1 unchanged sentence

The Company uses an estimated annual tax rate to measure the tax benefit or tax expense recognized in each interim period.

Prior years' income tax payable was separated in "Condensed Consolidated Balance Sheets" and "Condensed Consolidated Statements of Cash Flows" to conform to the 2023 presentation basis.

The change had no effect on net income or stockholders' equity as previously reported.

Net Income Per Share

Basic net income per common share is computed based on the weighted average number of common shares outstanding.

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.

Accounting Standards Not Yet Adopted

We believe that all recently issued accounting pronouncements from the Financial Accounting Standards Board ("FASB") do not apply to us or will not have a material impact to the Condensed Consolidated Financial Statements.

In November 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update (“ASU”) 2023-07 requiring enhanced segment disclosures.

ASU 2023-07 requires disclosure of significant segment expenses regularly provided to the chief operating decision maker (“CODM”) included within segment operating profit or loss.

Additionally, ASU 2023-07 requires a description of how the CODM utilizes segment operating profit or loss to assess segment performance.

The requirements of ASU 2023-07 are effective for annual periods beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024.

The Company's annual reporting requirements will be effective for fiscal 2024 and interim reporting requirements will be effective beginning with the first quarter of fiscal 2025.

Early adoption is permitted and retrospective application is required for all periods presented.

The Company is in the process of analyzing the impact of ASU 2023-07 on its related Condensed Consolidated Financial Statements.

In December 2023, the FASB issued ASU 2023-09 requiring enhanced income tax disclosures.

ASU 2023-09 requires disclosure of specific categories and disaggregation of information in the rate reconciliation table.

ASU 2023-09 also requires disclosure of disaggregated information related to income taxes paid, income or loss from continuing operations before income tax expense or benefit, and income tax expense or benefit from continuing operations.

The requirements of ASU 2023-09 are effective for annual periods beginning after December 15, 2024.

Early adoption is permitted and the amendments should be applied on a prospective basis.

Retrospective application is permitted.

The Company is in the process of analyzing the impact of ASU 2023-09 on its Condensed Consolidated Financial Statements.

The Company does not believe any other new accounting pronouncements issued by the FASB that have not become effective will have a material impact on its Condensed Consolidated Financial Statements.

Revenue from Contracts with Customers

2 unchanged sentences

Wood Construction Products Revenue .

Wood construction products represented approximately 85 % and 87 % of total net sales for the nine months ended September 30, 2023 and 2022, respectively.

Wood construction products represented approximately 84.7 % and 85.1 % of total net sales for the three months ended March 31, 2024 and 2023, respectively.

Concrete Construction Products Revenue.

Concrete construction products represented approximately 14 % and 13 % of total net sales for the nine months ended September 30, 2023 and 2022 respectively.

Concrete construction products represented approximately 14.8 % and 14.3 % of total net sales for the three months ended March 31, 2024 and 2023 respectively.

Customer acceptance criteria.

3 unchanged sentences

Other revenue .

Service sales, representing after-market repair and maintenance, engineering activities and software license sales and services were less than 0.5 % of total 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 0.5 % 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.

Services may be sold separately or in bundled packages.

The typical contract length for a service is generally less than one year.

The typical contract length for services is generally less than one year.

For bundled packages, the Company accounts for individual services separately when they are distinct within the context of the contract.

3 unchanged sentences

Reconciliation of contract balances

Contract assets are the rights to consideration in exchange for goods or services that the Company has transferred to a customer when that right is conditional on something other than the passage of time.

Contract assets are the right to receive consideration in exchange for goods or services that the Company has transferred to a customer when that right is conditional on something other than the passage of time.

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 September 30, 2023, the Company had no contract assets or contract liabilities from contracts with customers .

On April 1, 2022, the Company completed its acquisition (the "Acquisition") of 100 % of the outstanding equity interest of FIXCO Invest S.A.S.

(together with its subsidiaries, "ETANCO") for total purchase consideration of $ 805.4 million, net of cash acquired.

The Acquisition was completed pursuant to the securities purchase agreement dated January 26, 2022, as amended, by and among the Company, Fastco Investment, Fastco Financing, LRLUX and certain other security holders.

The purchase price for the Acquisition was paid using cash on hand and borrowings in the amount of $ 250.0 million under the revolving credit facility and $ 450.0 million under the term loan facility.

ETANCO is a manufacturer and distributor of fastener and fixing products headquartered in France and its primary product applications directly align with the addressable markets in which the Company operates.

The Acquisition allows the Company to enter into new commercial building markets such as façades, waterproofing, safety and solar, as well as grow its share of direct business sales in Europe.

ETANCO’s results of operations were included in the Company's Condensed Consolidated Financial Statements from April 1, 2022, the acquisition date.

ETANCO had net sales of $ 67.5 million and net loss of $1.8 million, and net sales of $ 147.8 million and net loss of $ 3.7 million, for the three and nine months ended September 30, 2022, respectively, which includes costs related to the amortization of acquired intangible assets, and expenses incurred for integration.

Purchase price allocation

The Acquisition was accounted for using the acquisition method of accounting in accordance with Accounting Standards Codification 805, Business Combinations ("ASC 805") which requires, among other things, that assets acquired and liabilities assumed in a business combination be recorded at fair value as of the acquisition date with limited exceptions.

The allocation of the $ 824.4 million purchase price, including cash, to the fair values of the tangible and intangible assets acquired and liabilities assumed is as follows:

(in thousands) Amount

Cash and cash equivalents $ 19,010

Trade accounts receivable, net 63,607

Inventory 107,185

Other current assets 4,491

Property and equipment, net 89,695

Operating lease right-of-use assets 5,361

Goodwill 365,591

Intangible assets, net 357,327

Other noncurrent assets 2,881

Total assets 1,015,148

Trade accounts payable 46,457

Accrued liabilities and other current liabilities 22,079

Operating lease liabilities 5,176

Deferred income tax and other long-term liabilities 117,031

Total purchase price $ 824,405

Trade accounts receivable, net

The gross amount of trade receivables acquired was approximately $ 67.4 million, of which $ 63.6 million was estimated to be recoverable based on ETANCO's historical trend for collections.

Acquired inventory primarily consists of raw materials and finished goods consisting of building and construction materials products.

The Company adjusted acquired finished goods higher by $ 12.8 million to estimated fair value based on expected selling prices less a reasonable amount for selling efforts.

The fair value adjustment is recognized as a component of cost of sales over the inventory’s expected turnover period, and as a result, $ 2.9 million and $ 12.8 million of the adjustment was recognized during the three and nine months ended September 30, 2022, respectively.

There were no such adjustments during the three and nine months ended September 30, 2023.

Property and equipment, net

Acquired property and equipment includes land of $ 22.3 million, buildings and site improvements of $ 29.4 million, and machinery, equipment, and software of $ 35.5 million.

The estimated fair value of property and equipment was determined primarily using market and/or or cost approach methodologies.

The acquired fair value for buildings and site improvements depreciate on a straight-line basis over the estimated useful lives of the assets for a period of up to sixteen years , machinery, equipment and software will depreciate on an accelerated basis over an estimated useful life of three to ten years .

The excess of the purchase price over the net assets acquired was recognized as goodwill and relates to the value that is expected from the acquired assembled workforce as well as the increased scale and synergies resulting from the integration of both businesses.

The goodwill recognized from the Acquisition is not deductible for local income tax purposes and has been allocated to components within the ETANCO reporting unit.

Intangible assets, net

The estimated fair value of intangible assets acquired was determined primarily using income approach methodologies.

The values allocated to intangible assets and the useful lives were as follows:

(in thousands, except useful lives) Weighted-average useful life (in years) Amount

Customer relationships 15 $ 248,398

Trade names Indefinite 93,811

Developed technology 10 11,256

Patents 8 3,862

The acquired definite-lived intangible assets are being amortized on a straight-line basis over estimated useful lives, which approximates the pattern in which these assets are utilized.

Deferred taxes

As a result of the increase in fair value of inventory, property and equipment, and intangible assets, deferred tax liabilities of $ 105.4 million were recognized, primarily due to intangible assets.

Acquisition and integration related costs

During the three and nine months ended September 30, 2022, the Company incurred acquisition and integration related expenses of $ 1.9 million and $ 14.7 million, respectively, for investment banking, legal, accounting, advisory, and consulting fees.

These costs were included in the Company’s income from operations.

Unaudited pro forma results

The following unaudited pro forma combined financial information presents estimated results as if the Company acquired ETANCO on January 1, 2021.

The unaudited pro forma financial information as presented below is for informational purposes only and does not purport to actually represent what the Company’s combined results of operations would have been had the Acquisition occurred on January 1, 2021, or what those results will be for any future periods.

The following unaudited pro forma consolidated financial information has been prepared using the acquisition method of accounting in accordance with U.S.

Three Months Ended

September 30, Nine Months Ended

September 30,

(in thousands, except per share amounts) 2022 2022

Net sales $ 553,662 $ 1,719,648

Net income $ 92,327 $ 302,579

Pro forma earnings per common share:

Basic $ 2.16 $ 7.03

Diluted $ 2.15 $ 7.01

Weighted average shares outstanding:

Basic 42,813 43,044

Diluted 42,916 43,173

The unaudited pro forma results above includes the following adjustments to net income:

1) Acquisition and integration related costs of $ 1.9 million and $ 14.7 million and which were incurred during the three and nine months ended September 30, 2022, respectively, were adjusted as if such costs were incurred during the twelve months ended December 31, 2021.

2) The $ 2.9 million and $ 12.8 million of amortization related to the fair value adjustment for inventory and recognized during the three and nine months ended September 30, 2022, respectively, were adjusted as if incurred during the nine months ended September 30, 2021.

3) Net income for ETANCO includes adjustments of $ 0.6 million and $ 2.7 million to conform ETANCO’s historical financial results prepared under French GAAP to U.S.

GAAP for the three and nine months ended September 30, 2021, respectively.

GAAP adjustments are primarily related to share-based payments expense on awards that were settled prior to the Acquisition, and costs incurred and capitalized by ETANCO on its historical acquisitions.

As of March 31, 2024 and 2023, the Company had no material contract assets or contract liabilities from contracts with customers .

Net Income per Share

1 unchanged sentence

Three Months Ended

September 30, Nine Months Ended

September 30,

(in thousands, except per share amounts) 2024 2023

1 unchanged sentence

Basic weighted-average shares outstanding 42,386 42,610

Dilutive effect of potential common stock equivalents — restricted stock units 209 103 242 129

Dilutive effect of potential common stock equivalents 244 217

Diluted weighted-average shares outstanding 42,630 42,827

3 unchanged sentences

Stock-Based Compensation

The Company currently maintains the Simpson Manufacturing Co., Inc.

Amended and Restated 2011 Incentive Plan (the “2011 Plan”) as its only equity incentive plan.

Under the 2011 Plan, no more than 16.3 million shares of the Company’s common stock in aggregate may be issued, including shares already issued pursuant to prior awards granted under the 2011 Plan.

Shares of the Company's common stock underlying awards to be issued pursuant to the 2011 Plan are registered under the Securities Act.

Under the 2011 Plan, the Company may grant restricted stock and restricted stock units.

The Company currently intends to award only performance-based stock units ("PSUs") and/or time-based restricted stock units ("RSUs").

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.

Stock-based compensation capitalized in inventory was immaterial for all periods presented.

The Company recognized stock-based compensation expense related to its equity plans for employees of $ 6.6 million and $ 3.5 million for the three months ended September 30, 2023 and 2022, respectively, and $ 17.8 million and $ 13.0 million for the nine months ended September 30, 2023 and 2022, respectively.

During the nine months ended September 30, 2023, the Company granted an aggregate of 277,793 restricted stock units (RSUs) and performance stock units (PSUs) to the Company's employees, including officers at an estimated weighted average fair value of $ 99.66 per share based on the closing price (adjusted for the present value of dividends) of the Company's common stock on the grant date.

The RSUs and PSUs granted to the Company's employees may be time-based or time and performance-based.

Certain of the PSUs are granted to officers and key employees, where the number of performance-based awards to be issued is based on the achievement of certain Company performance criteria established in the award agreement over a cumulative three year period, after which time these awards cliff vest.

The Company recognized stock-based compensation expense related to its equity plans for employees of $ 5.3 million and $ 4.6 million for the three months ended March 31, 2024 and 2023, respectively.

During the three months ended March 31, 2024 , the Company granted an aggregate of 146 thousand RSUs and PSUs to the Company's employees, including officers at an estimated weighted average fair value of $ 178.35 per share based on the closing price (adjusted for certain market factors primarily the present value of dividends) of the Company's common stock on the grant

The RSUs and PSUs granted to the Company's employees may be time-based, performance-based, or time and performance-based.

These awards cliff vest after three years .

In addition, these same officers and key employees also receive time-based RSUs, which vest pursuant to a three-year graded vesting schedule.

Time-based RSUs that are granted to the Company's employees excluding officers and certain key employees, vest ratably over the four year vesting-term of the award.

The Company’s nine non-employee directors are entitled to receive an aggregate of approximately $ 1.1 million 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 the second quarter of each year.

In April 2023 and June 2023, the Company granted 9,776 shares of the Company's common stock to the non-employee directors, based on the average closing price of $ 122.50 per share and recognized $ 1.2 million of expense.

As of September 30, 2023, the Company's aggregate unamortized stock compensation expense was approximately $ 27.2 million which is expected to be recognized in expense over a weighted-average period of 2.3 years.

Time based RSUs are granted to the Company's employees excluding officers and certain key employees, vest ratably over the four year vesting-term of the award.

As of March 31, 2024, the Company's aggregate unamortized stock compensation expense was approximately $ 38.1 million which is expected to be recognized in expense over a weighted-average period of 2.7 years.

Trade Accounts Receivable, net

Trade accounts receivable consisted of the following:

As of September 30, As of December 31,

As of March 31, As of December 31,

(in thousands)

8 unchanged sentences

The components of inventories are as follows:

As of September 30, As of December 31,

As of March 31, As of December 31,

(in thousands)

11 unchanged sentences

The Company only enters into derivative instrument agreements with counterparties who have highly rated credit.

As of September 30, 2023, the aggregate notional amount of the Company's outstanding interest rate contracts, cross currency swap contracts, EUR forward contract and CNY forward contracts were $ 566.3 million, $ 436.4 million, $ 321.7 million and $ 4.6 million (CNY 31.7 million), respectively.

As of March 31, 2024 , the aggregate notional amount of the Company's outstanding interest rate contracts, cross currency swap contracts and EUR forward contract were $ 405.0 million, $ 424.6 million and $ 321.7 million, respectively.

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

There were no amounts recognized due to ineffectiveness during the three and nine months ended September 30, 2023 and September 30, 2022.

The effects of fair value and cash flow hedge accounting on the Condensed Consolidated Statement of Earnings and Comprehensive Income for the nine months ended September 30, were as follows:

(in thousands) Cost of sales Interest income (expense), net and other finance costs

Other & foreign exchange loss, net Cost of sales Interest income (expense), net and other finance costs

Other & foreign exchange loss, net

There were no amounts recognized due to ineffectiveness during the three and three months ended March 31, 2024 and March 31, 2023.

The effects of fair value and cash flow hedge accounting on the Condensed Consolidated Statement of Earnings and Comprehensive Income for the three months ended March 31, were as follows:

(in thousands) Cost of sales Interest income (expense), net and other finance costs Other & foreign exchange loss, net Cost of sales Interest income (expense), net and other finance costs Other & foreign exchange loss, net

Total amounts of income and expense line items presented in the Condensed Consolidated Statement of Earnings in which the effects of fair value or cash flow hedges are recorded $ 286,023 $ 351 $ 1,969 $ 281,554 $ ( 570 ) $ ( 398 )

7 unchanged sentences

Amount of gain reclassified from OCI to earnings ( 188 ) — — — — —

The effects of derivative instruments on the Condensed Consolidated Statement of Earnings and Comprehensive Income for the three months ended September 30, 2023 and 2022 were as follows:

Cash Flow Hedging Relationships Gain (Loss) Recognized in OCI Location of Gain (Loss) Reclassified from OCI into Earnings Gain (Loss) Reclassified from OCI into Earnings

(in thousands) 2023 2022 2023 2022

Interest rate contracts $ 4,959 $ 18,696 Interest expense $ 4,302 $ ( 337 )

Cross currency contracts 12,156 23,977 Interest expense 1,483 ( 5,979 )

Forward contracts ( 122 ) — FX gain (loss) 11,753 28,437

Cost of goods sold ( 20 ) —

Total $ 16,993 $ 42,673 $ 17,518 $ 22,121

The effects of derivative instruments on the Condensed Consolidated Statement of Earnings and Comprehensive Income for the nine months ended September 30, 2023 and 2022 were as follows:

The effects of derivative instruments on the Condensed Consolidated Statement of Earnings and Comprehensive Income for the three months ended March 31, 2024 and 2023 were as follows:

Cash Flow Hedging Relationships Gain (Loss) Recognized in OCI Location of Gain (Loss) Reclassified from OCI into Earnings Gain (Loss) Reclassified from OCI into Earnings

5 unchanged sentences

Total $ 17,781 $ ( 6,357 ) $ 14,339 $ 2,719

For the three months ending September 30, 2023 and September 30, 2022 gains on the net investment hedge of $ 3.2 million and $ 16.9 million were included in OCI, respectively.

For the three months ending September 30, 2023 and September 30, 2022, excluded gains of $ 1.3 million and $ 1.3 million were reclassified from OCI to interest expense, respectively.

For the nine months ending September 30, 2023 losses on the net investment hedge, and September 30, 2022 gains on the net investment hedge of $ 1.1 million and $ 28.2 million were included in OCI, respectively.

For the nine months ending September 30, 2023 and September 30, 2022, excluded gains of $ 3.8 million and $ 2.4 million were reclassified from OCI to interest expense, respectively.

As of September 30, 2023, the aggregate fair values of the Company’s derivative instruments on the Condensed Consolidated Balance Sheet were comprised of an asset of $ 42.8 million, of which $ 19.5 million is included in other current assets, and the balance of $ 23.3 million as other non-current assets, and of a non-current liability of $ 9.5 million included as deferred income tax and other long-term liabilities.

For the three months ending March 31, 2024 and March 31, 2023 gains on the net investment hedge of $ 4.7 million and $ 0.2 million were included in OCI, respectively.

For the three months ending March 31, 2024 and March 31, 2023, excluded gains of $ 1.3 million and $ 1.2 million were reclassified from OCI to interest expense, respectively.

As of March 31, 2024 , the aggregate fair values of the Company’s derivative instruments on the Condensed Consolidated Balance Sheet were comprised of an asset of $ 28.9 million, of which $ 16.0 million is included in other current assets, and the balance of $ 12.9 million as other non-current assets, and of a non-current liability of $ 19.5 million included as deferred income tax and other long-term liabilities.

Property, Plant and Equipment, net

Property, plant and equipment consisted of the following:

As of September 30, As of December 31,

As of March 31, As of December 31,

(in thousands) 2024 2023 2023

4 unchanged sentences

10,085 6,621 7,782

Machinery, equipment, and software

496,999 449,121 472,907

789,378 723,530 762,422

Less accumulated depreciation and amortization

Machinery and equipment 530,283 481,993 516,017

847,644 773,298 832,407

accumulated depreciation and amortization ( 486,564 ) ( 443,762 ) ( 474,974 )

361,080 329,536 357,433

4 unchanged sentences

Goodwill consisted of the following:

As of September 30, As of December 31,

As of March 31, As of December 31,

(in thousands) 2024 2023 2023

3 unchanged sentences

Total $ 492,767 $ 500,749 $ 502,550

I ntangible assets, net, consisted of the following:

As of September 30, 2023

Intangible assets, net, consisted of the following:

As of March 31, 2024

Carrying Accumulated Carrying

6 unchanged sentences

$ 445,674 $ ( 93,147 ) $ 352,527

As of September 30, 2022

As of March 31, 2023

(in thousands)

4 unchanged sentences

378,158 ( 38,824 ) 339,334

Asia/Pacific 4,179 — 4,179

Total $ 435,690 $ ( 69,568 ) $ 366,122

6 unchanged sentences

384,432 ( 53,493 ) 330,939

$ 427,036 $ ( 64,119 ) $ 362,917

Asia/Pacific 4,240 ( 290 ) 3,950

Total $ 452,862 $ ( 87,523 ) $ 365,339

Intangible assets consist of definite-lived and indefinite-lived assets.

Definite-lived intangible assets include customer relationships, patents, unpatented technology, and non-compete agreements.

Amortization of definite-lived intangible assets was $ 5.9 million and $ 5.4 million for the three months ended September 30, 2023 and 2022, respectively, and was $ 17.5 million and $ 11.8 million for the nine months ended September 30, 2023 and 2022, respectively.

Amortization of definite-lived intangible assets was $ 5.6 million and $ 5.7 million for the three months ended March 31, 2024 and 2023, respectively.

The weighted-average amortization period for all amortizable intangibles on a combined basis is 10.6 years.

Indefinite-lived intangible assets totaled $ 90.4 million, $ 83.4 million, and $ 91.7 million as of September 30, 2023, and 2022 and December 31, 2022, respectively.

At September 30, 2023, the estimated future amortization of definite-lived intangible assets was as follows:

Indefinite-lived intangible assets totaled $ 92.4 million, $ 93.0 million, and $ 91.7 million as of March 31, 2024 , and 2023 and December 31, 2023, respectively.

At March 31, 2024 , the estimated future amortization of definite-lived intangible assets was as follows:

(in thousands)

Remaining three months of 2023 $ 5,699

Remaining nine months of 2024 $ 21,568

Thereafter 131,721

The changes in the carrying amount of goodwill and intangible assets for the nine months ended September 30, 2023, were as follows:

The changes in the carrying amount of goodwill and intangible assets for the three months ended March 31, 2024 , were as follows:

(in thousands) Goodwill Assets

Balance at December 31, 2023 $ 502,550 $ 365,339

Acquisition 1 ( 2,077 ) 14,916

Disposal ( 5,678 ) —

Amortization — ( 5,624 )

Foreign exchange ( 9,783 ) ( 7,188 )

Balance at September 30, 2023 $ 483,413 $ 356,450

1 During the quarter ended September 30, 2023, the Company finalized a business acquisition that resulted in $ 2.1 million decrease in goodwill with $ 0.9 million reclassified to intangible asset, and a corresponding decrease of $ 1.2 million in a contingent consideration liability.

Balance at March 31, 2024 $ 492,767 $ 352,527

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

4 unchanged sentences

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

The following table provides a summary of leases included on the Condensed Consolidated Balance Sheets as of September 30, 2023 and 2022 and December 31, 2022, Condensed Consolidated Statements of Earnings and Comprehensive Income, and Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2023 and 2022:

Condensed Consolidated Balance Sheets Line Item September 30, December 31,

The following table provides a summary of leases included on the Condensed Consolidated Balance Sheets as of March 31, 2024 and 2023 and December 31, 2023, Condensed Consolidated Statements of Earnings and Comprehensive Income, and Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2024 and 2023:

Condensed Consolidated Balance Sheets Line Item March 31, December 31,

(in thousands) 2024 2023 2023

4 unchanged sentences

Total operating lease liabilities $ 67,429 $ 56,980 $ 70,278

Finance leases

Property and equipment, gross Property, plant and equipment, net $ — $ 3,569 $ 3,569

Accumulated amortization Property, plant and equipment, net — ( 3,569 ) ( 3,569 )

Property and equipment, net Property, plant and equipment, net $ — $ — $ —

The components of lease expense were as follows:

Condensed Consolidated Statements of Earnings and Comprehensive Income Line Item Three Months Ended September 30,

Condensed Consolidated Statements of Earnings and Comprehensive Income Line Item Three Months Ended March 31,

(in thousands) 2024 2023

3 unchanged sentences

Supplemental cash flow information related to leases is as follows:

Three Months Ended September 30,

Three Months Ended March 31,

(in thousands) 2024 2023

1 unchanged sentence

Operating cash flows for operating leases $ 4,587 $ 3,653

Operating right-of-use assets obtained in exchange for lease

obligations during the current period 6,437 3,159

The following is a schedule, by years, of maturities of lease liabilities as of September 30, 2023:

Operating right-of-use assets obtained in exchange for new lease

The following is a schedule, by years, of maturities of lease liabilities as of March 31, 2024 :

(in thousands) Operating Leases

Remaining three months of 2023 $ 4,279

Remaining nine months of 2024 $ 13,562

Thereafter 6,469

2 unchanged sentences

Total lease liabilities $ 67,429

The following table summarizes the Company's lease terms and discount rates as of September 30, 2023 and 2022:

The following table summarizes the Company's lease terms and discount rates as of March 31, 2024 and 2023:

Weighted-average remaining lease terms (in years):

2 unchanged sentences

Operating leases 4.9 % 4.7 %

As of September 30, 2023, the Company had $ 566.3 million, excluding deferred financing costs, outstanding under its Amended and Restated Credit Facility.

The Company had outstanding balances of $ 688.8 million and $ 583.2 million under the Amended and Restated Credit Facility as of September 30, 2022, and December 31, 2022, respectively.

The following is a schedule, by years, of maturities for the remaining term loan facility as of September 30, 2023:

As of March 31, 2024 , the Company had $ 480.0 million, excluding deferred financing costs, outstanding under its Amended and Restated Credit Facility.

The Company had outstanding balances of $ 577.5 million and $ 485.7 million under the Amended and Restated Credit Facility as of March 31, 2023, and December 31, 2023, respectively.

The following is a schedule, by years, of maturities for the remaining term loan facility as of March 31, 2024 :

(in thousands) 5-Year Term Loan

Remaining three months of 2023 $ 5,625

Remaining nine months of 2024 $ 16,875

Total loan outstanding $ 405,000

The $ 75.0 million outstanding under the revolving credit facility is due on March 31, 2027.

The Company was in compliance with its financial covenants under the Amended and Restated Credit Facility as of September 30, 2023.

The Company was in compliance with its financial covenants under the Amended and Restated Credit Facility as of March 31, 2024 .

Certain of the Company's domestic subsidiaries are guarantors for a credit agreement between certain of its foreign subsidiaries and institutional lenders that is in addition to the Amended and Restated Credit Facility.

As of September 30, 2023, all of the Company's credit facilities provide a total of $ 306.5 million in available borrowing capacity and an irrevocable standby letter of credit in support of various insurance deductibles.

As of March 31, 2024 , all of the Company's credit facilities provide a total of $ 380.7 million in available borrowing capacity and an irrevocable standby letter of credit in support of various insurance deductibles.

Commitments and Contingencies

3 unchanged sentences

Litigation and Potential Claims

The Company is subject to various legal and regulatory proceedings relating to contract disputes, personal injury, property damage, employment, product liability, environmental, intellectual property and other matters from time to time in the ordinary course of business (“Proceedings”).

The Company accrues a liability for Proceedings when payments associated with the claims become probable and the costs can be reasonably estimated.

The Company also considers whether an insurance recovery receivable is applicable and appropriate based on the specific Proceeding.

Because Proceedings are inherently uncertain, we are unable to predict the ultimate outcome of Proceedings, or amount of liability, if any, and the actual costs of resolving Proceedings may be substantially higher or lower than the amounts accrued for those activities.

However, management believes that the outcome of any Proceedings that are pending or threatened, either individually or in the aggregate, or on a combined basis, will not have a material adverse impact on the Company’s results of operations, financial position or liquidity.

From time to time, the Company is involved in various legal proceedings and other matters arising in the normal course of business.

Corrosion, hydrogen embrittlement, cracking, material hardness, wood pressure-treating chemicals, misinstallations, misuse, design and assembly flaws, manufacturing defects, labeling defects, product formula defects, inaccurate chemical mixes, adulteration, environmental conditions, or other factors can contribute to failure of fasteners, connectors, anchors, adhesives, specialty chemicals, such as fiber reinforced polymers, and tool products.

In addition, inaccuracies may occur in product information, descriptions and instructions found in catalogs, packaging, data sheets, and the Company’s website.

The resolution of any claim or litigation is subject to inherent uncertainty and could have a material adverse effect on the Company’s financial condition, cash flows or results of operations.

Segment Information

The Company is organized into three reporting segments defined by the regions where the Company’s products are manufactured, marketed and distributed to its customers.

The three reporting segments are the North America segment (comprised primarily of the Company’s operations in the U.S.

and Canada), the Europe segment, which includes ETANCO, and the Asia/Pacific segment (comprised of the Company’s operations in Asia and the South Pacific).

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

The Company is organized into three reporting segments defined by the regions where the Company’s products are manufactured, marketed and distributed to the Company's customers.

The three regional segments are the North America segment (comprised primarily of the Company’s operations in the U.S.

and Canada), the Europe segment, and the Asia/Pacific segment (comprised of the Company’s operations in Asia, the South Pacific, and the Middle East).

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 line item 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 tables illustrate certain measurements used by management to assess the performance of its reportable segments as of or the following periods:

Three Months Ended September 30, Nine Months Ended September 30,

The following table illustrates certain measurements used by management to assess the performance of the segments described above as of or the following periods:

Three Months Ended March 31,

(in thousands) 2024 2023

14 unchanged sentences

Total $ 96,098 $ 118,363

* Sales to other segments are eliminated in consolidation.

As of September 30, December 31,

* Sales to other segments are eliminated upon consolidation.

As of March 31, December 31,

(in thousands) 2024 2023 2023

5 unchanged sentences

Cash collected by the Company’s U.S.

subsidiaries is routinely transferred into the Company’s cash management accounts and, therefore is in the total assets of “Administrative and all other.” Cash and cash equivalent balances in the “Administrative and all other” segment were $ 465.3 million, $ 236.3 million, and $ 222.5 million, as of September 30, 2023 and 2022, and December 31, 2022, respectively.

subsidiaries is routinely transferred into the Company’s cash management accounts and, therefore is in the total assets of “Administrative and all other.” Cash and cash equivalent balances in the “Administrative and all other” segment were $ 276.6 million, $ 189.8 million and $ 368.6 million, as of March 31, 2024 and 2023, and December 31, 2023, respectively.

Also included in the total assets of "Administrative and all other" are intercompany borrowings due from the Europe segment.

Included in the total assets of each segment are net intercompany borrowings due to and from the other segments.

The Company’s wood construction products include connectors, truss plates, fastening systems, fasteners and pre-fabricated shearwalls that are used for connecting and strengthening wood-based construction primarily in residential and commercial construction.

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

The table below illustrates the distribution of the Company’s sales by product group as additional information for the following periods:

Three Months Ended September 30, Nine Months Ended September 30,

The Company’s wood construction products include connectors, truss plates, fastening systems, fasteners and pre-fabricated shearwalls and are used for connecting and strengthening wood-based construction primarily in the residential and commercial construction market.

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 illustrates the distribution of the Company’s net sales by product group as additional information for the three months ended March 31, 2024 and 2023:

Three Months Ended March 31,

(in thousands) 2024 2023

5 unchanged sentences

Share Repurchases

From October 1, 2023 to November 6, 2023, the Company repurchased an additional 333,469 shares of the Company’s common stock in the open market at an average price of $ 138.09 per share, for a total of $ 46.1 million.

As a res ult, as of November 6, 2023, approximately $ 53.9 million remained available for share repurchase through December 31, 2023 under the Company’s previously announced $ 100.0 million share repurchase authorization.

From April 1, 2024 to May 2, 2024, the Company repurchased an additional 283,273 shares of the Company’s common stock in the open market at an average price of $ 176.51 per share, for a total of $ 50.0 million.

As a res ult, as of May 2, 2024, approximately $ 50.0 million remained available for share repurchase through December 31, 2024 under the Company’s previously announced $ 100.0 million share repurchase authorization.

Dividend Declared

On October 19, 2023, the Company’s Board of Directors (the "Board") declared a quarterly cash dividend of $ 0.27 per share, estimated to be $ 11.4 million in total.

The dividend will be payable on January 25, 2024, to the Company's stockholders of record on January 4, 2024.

Share Repurchase Authorization

On October 19, 2023, the Board authorized the Company to repurchase up to $ 100.0 million of the Company's common stock, effective January 1, 2024 through December 31, 2024.

On May 1, 2024, the Company’s Board of Directors (the "Board") declared a quarterly cash dividend of $ 0.28 per share, estimated to be $ 11.8 million in total.

The dividend will be payable on July 25, 2024, to the Company's stockholders of record on July 4, 2024 (due to July 4 being a U.S.

holiday, the effective record date is July 3, 2024).

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-Q

Item 1. Financial Statements