What changed in this filing

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

2025-03-03 compared with 2024-02-28 · 264 added, 185 removed, 1065 unchanged (30% of the section changed)

7 unchanged sentences

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 2022 and 2023, we entered into financial

contracts at various times to hedge the risk of fluctuations associated with the Euro and the Chinese Yuan.

In 2022 and 2023, we entered into financial contracts at various times to hedge the risk of fluctuations associated with the Euro and the Chinese Yuan.

Refer to “Note 9 — Derivative Instruments” to the Company’s consolidated financial statements.

Foreign currency translation adjustments on our underlying assets and liabilities resulted in an accumulated other comprehensive gain of $19.7 million for the year ended December 31, 2023, due to the effects of the strengthening United States Dollar in relation to almost all o ther countries.

The gain was partially offset by $25.7 million in accumulated other comprehensive losses from foreign currency forward contracts.

Foreign currency translation adjustments on our underlying assets and liabilities resulted in an accumulated other comprehensive loss of $37.3 million for the year ended December 31, 2024, due to the effects of the strengthening United States Dollar in relation to almost all other countries.

The loss was partially offset by $2.5 million in accumulated other comprehensive losses from foreign currency forward contracts.

Refer to “Note 5 — Stockholders' Equity” to the Company’s consolidated financial statements.

10 unchanged sentences

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 started decreasing at the end of 2022 with prices stabilizing by the end of 2023 .

Steel cost started decreasing at the end of 2022 with prices stabilizing by the end of 2023 and during 2024 .

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.

19 unchanged sentences

We have audited the accompanying consolidated balance sheets of Simpson Manufacturing Co., Inc.

(a Delaware corporation) and subsidiaries (the “Company”) as of December 31, 2023 and 2022, the related consolidated statements of operations, stockholders’ equity, and cash flows for each of the three years in the period ended December 31, 2023, and the related notes and financial statement schedule included under Item 15 (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America.

(a Delaware corporation) and subsidiaries (the “Company”) as of December 31, 2024 and 2023, the related consolidated statements of operations, stockholders’ equity, and cash flows for each of the three years in the period ended December 31, 2024, and the related notes and financial statement schedule included under Item 15a (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Company’s internal control over financial reporting as of December 31, 2024, based on criteria established in the 2013 Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”), and our report dated February 28, 2025 expressed an unqualified opinion.

Basis for opinio n

These financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s financial statements based on our audits.

These consolidated financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.

57 unchanged sentences

Total assets $ 2,736,168 $ 2,704,724

LIABILITIES AND STOCKHOLDERS’ EQUITY

LIABILITIES, MEZZANINE EQUITY, AND STOCKHOLDERS’ EQUITY

Current liabilities

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Operating lease liabilities, net of current portion 76,184 55,324

55,324 46,882

Deferred income tax 90,303 98,170

98,170 112,901

Other long-term liabilities 27,636 51,436

51,436 27,707

Total liabilities 923,034 1,024,978

Commitments and contingencies (see Note 15 )

Non-qualified deferred compensation plan share awards 7,786 —

Stockholders’ equity

4 unchanged sentences

Retained earnings 1,646,568 1,426,554

Common stock held in non-qualified deferred compensation plan ("DCP") ( 1,297 ) —

Treasury stock ( 100,771 ) ( 50,363 )

1 unchanged sentence

Total stockholders’ equity 1,805,348 1,679,746

Total liabilities and stockholders’ equity $ 2,704,724 $ 2,503,971

Total liabilities, mezzanine equity, and stockholders’ equity

$ 2,736,168 $ 2,704,724

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

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Net gain on disposal of assets ( 447 ) ( 276 ) ( 1,317 )

( 276 ) ( 1,317 ) ( 324 )

Income from operations $ 429,975 $ 475,149 $ 459,067

Interest income (expense), net and other financing costs 5,277 3,391 ( 7,594 )

3,391 ( 7,594 ) ( 1,386 )

Other & foreign exchange loss, net ( 1,209 ) ( 1,993 ) ( 3,408 )

6 unchanged sentences

Cash flow hedge adjustment, net of tax 2,486 ( 25,694 ) 32,214

( 25,694 ) 32,214 ( 268 )

Comprehensive income $ 285,441 $ 348,056 $ 347,541

3 unchanged sentences

Weighted average number of shares of common stock outstanding

Basic 42,598 42,925 43,325

42,182 42,598 42,925

Diluted 42,383 42,837 43,047

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(In thousands, except per share data)

Capital Accumulated

Comprehensive

Common Stock Retained

Earnings Treasury

Shares Par Value Total

Common Stock Additional

Capital Retained

Earnings Accumulated

Comprehensive loss

DCP Vested Treasury

Shares Par Value Stock Total

Balance as of January 1, 2022 43,217 $ 432 $ 294,330 $ 906,841 $ ( 17,605 ) — $ — $ 1,183,998

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Stock-based compensation expense — — 19,627 — — — — 19,627

Repurchase of common stock ( 811 ) — — — — ( 78,622 ) ( 78,622 )

Retirement of common stock — ( 8 ) — ( 78,614 ) — 78,622 —

Repurchase of common stock including excise tax ( 361 ) — — — — — ( 50,363 ) ( 50,363 )

Cash dividends declared on common stock, $1.07 per share — — — ( 45,463 ) — — — ( 45,463 )

7 unchanged sentences

— — — — 2,486 — — 2,486

Stock-based compensation expense — — 19,627 — — — 19,627

Stock-based compensation and deferred compensation plan ("DCP") expense

( 12 ) — 6,696 — — — — 6,696

Common stock held in DCP — — 1,297 — — ( 1,297 ) — —

Change in redemption value of share awards in DCP — — — ( 2,311 ) — — — ( 2,311 )

Acquisition of redeemable noncontrolling interests — — ( 6,171 ) ( 2,742 ) — — — ( 8,913 )

Repurchase of common stock, including excise tax ( 559 ) — — — — — ( 100,771 ) ( 100,771 )

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

Cash dividends declared on common stock, $1.11 per share — — — ( 46,797 ) — — — ( 46,797 )

Shares issued from release of Restricted Stock Units 126 1 ( 7,744 ) — — — — ( 7,743 )

Common stock issued at $197.98 per share 10 — 1,940 — — — 1,940

Balance at December 31, 2024 41,878 $ 424 $ 307,197 $ 1,646,568 $ ( 46,773 ) ( 1,297 ) $ ( 100,771 ) $ 1,805,348

10 unchanged sentences

Gain on sale of assets and other ( 447 ) ( 558 ) ( 1,317 )

Write-off of software development project

Depreciation and amortization 85,399 74,707 60,890

Noncash lease expense 17,380 14,205 11,327

Release of acquisition related tax and legal contingency ( 1,797 ) — —

Inventory step-up expense — — 13,572

1 unchanged sentence

Deferred income taxes ( 4,239 ) ( 7,541 ) ( 13,156 )

Noncash compensation related to stock plans 23,859 14,980 17,715

Provision for doubtful accounts

Noncash compensation related to stock plans and changes in the fair value of DCP

19,022 23,859 14,980

Provision for credit losses

115 730 1,146

Deferred hedge gain ( 3,472 ) ( 3,860 ) ( 2,690 )

Changes in operating assets and liabilities, (net of amounts acquired from ETANCO see Note 3)

Changes in operating assets and liabilities, net of amounts acquired (see Note 3 )

Trade accounts receivable ( 3,650 ) ( 13,051 ) 19,763

7 unchanged sentences

Capital expenditures ( 180,357 ) ( 88,824 ) ( 62,362 )

Acquisitions, net of cash acquired

Acquisitions, net of cash acquired (see Note 3 )

( 79,172 ) ( 23,353 ) ( 810,765 )

Purchases of intangible assets — ( 4,861 ) ( 5,856 )

Purchases of equity investments ( 1,615 ) ( 1,361 ) ( 3,178 )

( 1,361 ) ( 3,178 ) ( 9,829 )

Termination forward contracts — — 3,535

5 unchanged sentences

Repayments of line of credit ( 100,752 ) ( 98,679 ) ( 134,120 )

( 98,679 ) ( 134,120 ) ( 16,408 )

Termination of cash flow hedge — — 21,252

3 unchanged sentences

Cash paid on behalf of employees for shares withheld ( 7,744 ) ( 7,430 ) ( 9,553 )

Acquisition of redeemable noncontrolling interests

( 8,913 ) — —

Net cash provided by (used in) financing activities ( 261,464 ) ( 199,034 ) 465,526

3 unchanged sentences

Cash and cash equivalents at end of year $ 239,371 $ 429,822 $ 300,742

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

Supplemental Disclosure of Cash Flow Information

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Noncash Capital expenditures

Contingent consideration for acquisitions

$ 12,481 $ 11,139 $ 1,671

Contingent consideration for acquisitions — 1,189 6,500

Issuance of Company’s common stock for compensation — 1,940 960

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and its subsidiaries.

Investments in 50 % or less owned entities are accounted for using either cost or the equity method.

Investments in 50.0 % or less owned entities are accounted for using either cost or equity method.

All significant intercompany transactions have been eliminated.

Certain amounts in the Consolidated Balance Sheets of prior year's have been reclassified to conform to the fiscal 2023 presentation.

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

Certain prior years' amounts have been reclassified to conform to the fiscal 2024 presentation.

These reclassifications had no impact on the Company's Consolidated Balance Sheets, Consolidated Statements of Operations, Consolidated Statements of Stockholders’ Equity or Consolidated Statements of Cash Flow.

Use of Estimates

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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 year ended December 31, 2023 are outlined in the table below:

The changes in the allowance for credit losses for the year ended December 31, 2024 are outlined in the table below:

as of Balance

(in thousands) December 31, 2022 Expense (Deductions), net Write-Offs 1

(in thousands)

December 31, 2023 Expense (Deductions), net Write-Offs 1

December 31, 2024

Allowance for Doubtful Accounts $ 3,240 $ 730 $ 88 $ 3,882

Allowance for credit losses

$ 3,881 $ 115 $ 998 $ 2,998

1 Amount is net of recoveries and the effect of foreign currency fluctuations for the year ended December 31, 2024

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The Company impairs slow-moving products by comparing inventories on hand to projected demand.

If the on-hand supply of a product exceeds projected demand or if the Company believes the product is no longer marketable, the product is considered obsolete inventory.

If on-hand supply of a product exceeds projected demand or if the Company believes the product is no longer marketable, the product is considered obsolete inventory.

The Company revalues obsolete inventory to its net realizable value and has consistently applied this methodology.

When impairments are established, a new cost basis for the inventory is created.

When impairments are established, a new cost basis of the inventory is created .

An unexpected change in market demand, building codes or buyer preferences could reduce the rate of inventory turnover and require the recognition of more obsolete inventory.

Other Current Assets

Other current assets, which are less than 5% of current assets, consist primarily of prepaid expenses, derivative assets-current, and other miscellaneous assets.

Other current assets consist primarily of prepaid expenses, derivative assets-current, and other miscellaneous assets.

Refer to Note 9 for more information for derivative assets-current.

The remaining assets are less than 5% of the other current assets.

Warranties and Recalls

3 unchanged sentences

Equity Investments

The Company accounts for investments and ownership interests under the equity method accounting when it has the ability to exercise significant influence but does not have a controlling financial interest.

The Company accounts for investments and ownership interests under either cost or the equity method accounting when it has the ability to exercise significant influence but does not have a controlling financial interest.

The Company records its interest in the net earnings of its equity method investees, along with adjustments for unrealized profits or losses within earnings or loss from equity interests in the consolidated statement of operations.

1 unchanged sentence

Fair Value of Financial Instruments

Fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants.

As such, fair value is a market-based measurement that is determined based on assumptions that market participants would use in pricing an asset or a liability.

Fair value is an exit price representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between unrelated market participants.

As such, fair value is a market-based measurement that is determined based on assumptions that unrelated market participants would use in pricing an asset or a liability.

Assets and liabilities recorded at fair value are measured and classified under a three-tier fair valuation hierarchy based on the observability of the inputs available in the market:

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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 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 unobserved inputs such as management estimates and entity-specific assumptions and are evaluated on an

ongoing basis.

The fair values of the Company's investments and liabilities in the deferred compensation plan are classified as Level 1 within the fair value hierarchy, and are subject to investment risks.

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 December 31, 2024 and 2023:

11 unchanged sentences

— 7,198 — — 30,111 —

Investment in deferred compensation plan (4)

944 — — — — —

Deferred compensation plan liabilities (4)

1,974 — — — — —

Contingent considerations — — 5,400 — — 6,600

(1) The carrying amounts of cash equivalents, representing government and other money market funds traded in an active market with relatively short maturities, are reported on the consolidated balance sheet as of December 31, 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 December 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 December 31, 2024 and 2023 based upon their terms and conditions as disclosed in Note 14 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 9 .

(4) Non-qualified deferred compensation plan.

Derivative Instruments

4 unchanged sentences

and are reclassified into the line item in the consolidated statement of operations in which the hedged items are recorded in the same period the hedged item affects earnings.

The effective portion of gains and losses attributable to net investment hedges is recorded net of tax to OCI to offset

the change in the carrying value of the net investment being hedged.

The effective portion of gains and losses attributable to net investment hedges is recorded net of tax to OCI to offset the change in the carrying value of the net investment being hedged.

Recognition in earnings of amounts previously recorded to OCI are limited to circumstances such as complete or substantially complete liquidation of the net investment in the hedged foreign operation.

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

Deferred Compensation Plan

The Company established a non-qualified deferred compensation plan ("DCP" or “the Plan”) in April 2023 for eligible employees and members of the Board of Directors.

The Plan provides eligible participants the opportunity to defer and invest a specified percentage of their compensation, including the Company stock awards upon vesting.

The Plan is a non-qualified plan that is informally funded by assets in a rabbi trust, which restricts the Company's use and access to the assets held but is subject to the claims of the Company's creditors in the event that the Company becomes insolvent.

The amount of compensation to be deferred by participants are based on their own elections and are adjusted for any investment changes that the participants direct.

This plan does not provide for employer contributions.

The Plan permits diversification of vested shares (common stock) into other equity securities subject to a six-month holding period subsequent to vesting.

Accounting for deferred common stock will be under either plan C or plan D.

Accounting will depend on whether or not the employee has diversified the common stock.

Under plan C, diversification is permitted but the employee has not diversified.

Under plan D, diversification is permitted and the employee has diversified.

For common stock that have not been diversified, the employer stock held in the deferred compensation plan is classified in a manner similar to treasury stock and presented separately on the consolidated balance sheets as the Company's common stock held by the non-qualified deferred compensation plan.

Common stock will be recorded at fair value of the stock at the time it vested, subsequent changes in the value of the common stock is not recognized.

The deferred compensation obligations are measured independently at fair value of the common stock with a corresponding charge or credit to compensation cost.

Fair value is determined as the product of the common stock and the closing price of the stock each reporting period.

Under plan D, assets held by the rabbi trust are subject to applicable GAAP.

The deferred compensation obligation is measured independently at fair value of the underlying assets.

The Company previously presented certain DCP transactions within existing financial statement line items of the consolidated balance sheets and consolidated statement of stockholders’ equity for periods ended December 31, 2023 .

For the year ended December 31, 2024, the Company presented t he equity balances related to "Non-qualified deferred compensation plan share awards" as mezzanine equity for $ 7.8 million and they were combined with stock-based compensation expense in the consolidated statement of stockholders’ equity for the year ended December 31, 2024 .

The Company has evaluated the errors both qualitatively and quantitatively and has concluded that they have immaterial impact on the periods presented.

Business Combinations and Asset Acquisitions

4 unchanged sentences

Accordingly, goodwill is never recognized in an asset acquisition.

During the year ended December 31, 2023, the Company completed the purchase of certain intangible assets and completed a business acquisition that were not material to the Company's consolidated financial statements, individually and in aggregate.

Accordingly, pro forma historical results of operations related to these business acquisitions during the year ended December 31, 2023 have not been presented.

The Company has included the financial results of these business acquisitions in its consolidated financial statements from their respective dates of acquisition.

Refer to Note 3 for more information.

Property, Plant and Equipment

2 unchanged sentences

When assets are sold or retired, their costs and accumulated depreciation are removed from the accounts, and the resulting gains or losses are reflected in the consolidated statements of operations.

The “Intangibles—Goodwill and Other” topic of the FASB ASC provides guidance on capitalization of the costs incurred for computer software developed or obtained for internal use.

The ASC 350 Intangibles—Goodwill and Other provides guidance on capitalization of the costs incurred for computer software developed or obtained for internal use.

The Company capitalizes qualified external costs and internal costs related to the purchase and implementation of software projects used for business operations and engineering design activities.

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Preferred Stock

The Company’s Board of Directors has the authority to issue authorized and unissued preferred stock in one or more s eries with such designations, rights and preferences as may be determined from time to time by the Board of Directors.

The Company’s Board of Directors has the authority to issue authorized and unissued preferred stock in one o r more series with such designations, rights and preferences as may be determined from time to time by the Board of Directors.

Accordingly, the Board of Directors is empowered, without stockholder approval, to issue preferred stock with dividend, redemption, liquidation, conversion, voting or other rights that could adversely affect the voting power or other rights of the holders of the Company’s common stock.

2 unchanged sentences

Subject to the rights of any preferred stock that may be issued in the future, the holders of common stock are entitled to one vote per share on any matter submitted to a vote of the stockholders.

A director in an uncontested election is elected if the votes cast “for” such director’s election exceed the votes cast

“against” such director’s election, except that, if a stockholder properly nominates a candidate for election to the Board of Directors, the candidates with the highest number of affirmative votes (up to the number of directors to be elected) are elected.

A director in an uncontested election is elected if the votes cast “for” such director’s election exceed the votes cast “against” such director’s election, except that, if a stockholder properly nominates a candidate for election to the Board of Directors, the candidates with the highest number of affirmative votes (up to the number of directors to be elected) are elected.

There are no redemption or sinking fund provisions applicable to common stock.

17 unchanged sentences

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.

Contract liability is recorded when consideration is received from a customer and the Company has remaining unsatisfied performance obligations.

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.

Refer to Note 2 for more information.

Cost of Sales

7 unchanged sentences

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 2023, 2022 and 2021, the Company incurred software development expenses related to its ongoing expansion into the plated truss and Cold Form Steel markets as

well as ongoing development of Building Information Modeling ("BIM") applications that serve multiple end markets, and some of the software development costs were capitalized.

S ee "Note 10 — Property, Plant and Equipment." Th e Company amortizes acquired patents over their remaining lives and performs periodic reviews for impairment.

In 2024 , 2023 and 2022, the Company incurred software development expenses related to its ongoing expansion into the component manufacturing and residential markets as well as ongoing development of construction-related applications that serve multiple end markets, and some of the software development costs were capitalized that were amortized over the estimated useful lives and reviewed for impairment.

The Company amortizes acquired patents over their remaining lives and performs periodic reviews for impairment.

The cost of internally developed patents is expensed as incurred.

Refer to Note 1 0 for more information.

Selling Costs

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

Accounting for Stock-Based Compensation

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 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 .

S tock-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 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 cumulatively recognized as an adjustment to expense.

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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.

Accounting Standard Adopted

In November 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standard 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 the ASU are effective for the annual period ending December 31,2024, and requires companies to apply them retrospectively.

The Company adopted the ASU using retrospective transition method, and it had no impact on the Company’s consolidated financial statements.

Refer to Note 19 for more information.

Accounting Standards Not Yet Adopted

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

The ASU requires disclosure of significant segment expenses regularly provided to the chief operating decision maker ("CODM") included within segment operating profit or loss.

Additionally, the

ASU requires a description of how the CODM utilizes segment operating profit or loss to assess segment performance.

The requirements of the ASU 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 the ASU on related disclosures.

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

4 unchanged sentences

Retrospective application is permitted.

The Company is in the process of analyzing the impact of the ASU on related disclosures.

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 consolidated financial statements.

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

In November 2024, the FASB issued ASU 2024-03 requiring public companies to disclose, in interim and reporting periods, additional information about certain expenses in the financial statements.

The ASU is effective for annual periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027.

Early adoption is permitted and is effective on either a prospective basis or retrospective basis.

The Company is currently assessing the potential impacts of adoption on the consolidated financial statements.

The Company does not believe other new accounting pronouncements issued by the FASB will have a material impact on its consolidated financial statements.

Revenue from Contracts with Customers

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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, 2023 and 2022, the Company had no material contract assets or contract liabilities from contracts with customers .

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

Other accounting considerations

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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, assets acquired and liabilities assumed in a business combination be recorded at fair value as of the acquisition date with limited exceptions.

The Acquisition was accounted for using the acquisition method of accounting in accordance with A SC 805, Business Combinations (“ASC 805”) which requires, among other things, 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 estimated fair values of the tangible and intangible assets acquired and liabilities assumed is as follows:

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The fair value adjustment was fully recognized as a component of cost of sales over the inventory’s estimated turnover period during the nine months ended December 31, 2022.

There were no such adjustments during the twelve months ended December 31, 2023.

There were no such adjustments during the twelve months ended December 31, 2024 and 2023.

Property and equipment, net

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

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

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

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

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

Customer relationships 15 $ 248,398

10 unchanged sentences

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 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.

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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.

During the year ended December 31, 2024, the Company also completed three other acquisitions that were not material to the Company's consolidated financial statements, individually and in aggregate.

Accordingly, pro-forma historical results of operations related to these business acquisitions during the year ended December 31, 2024 have not been presented, but summarized below.

On June 1, 2024, the Company completed the acquisition of all of the operating assets and assumed liabilities of Calculated Structured Designs, Inc.

("CSD"), a software development company providing solutions for the engineered wood, engineering, design and building industries in North America, Australia and the UK.

On August 1, 2024, the Company completed the acquisition of all of the operating assets and assumed liabilities of Monet DeSauw Inc.

and certain properties of Callaway Properties, LLC (together with its subsidiaries, “Monet”) for a total purchase consideration of approximately $ 48.7 million net of cash received and liabilities assumed.

Monet specializes in the production of large-scale saws and material handling equipment for the truss industry in the United States.

On September 1, 2024, the Company completed the acquisition of all of the operating assets and assumed liabilities of QuickFrames USA, LLC (QuickFrames), a manufacturer of pre-engineered structural support systems for commercial construction with sales in North America.

The following table summarizes the Company's preliminary purchase price allocations of assets acquired and liabilities assumed as of the acquisition dates for the twelve months ended December 31, 2024, including the related estimated useful lives, where applicable:

(in thousands)

Estimated Useful Life (in years)

Net working capital $ 3,165

Machinery and Equipment 396 1 - 5

Building Improvements 500 28

Intangible assets 8

Tradename and other (definite)

Tradename (indefinite)

Customer relationships 10,761 7

Developed technology 13,008 5 - 10

Goodwill 32,821

Liabilities assumed ( 10,482 )

Total net assets acquired and liabilities assumed $ 79,267

The valuations of assets acquired and liabilities assumed for CSD and QuickFrames have not yet been finalized as of December 31, 2024, and finalization of these valuations during the measurement period could result in a change in the amounts recorded.

The completion of the valuations for CSD and QuickFrames will occur no later than one year from the acquisition dates as required by U.S.

The amount of goodwill generated from these acquisitions is deductible for tax purposes.

Net Income per Share

The following shows a reconciliation of basic earnings per share (“EPS”) to diluted EPS:

For the Year Ended December 31,

For the Years Ended December 31,

(in thousands, except per-share amounts)

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On August 16, 2022, the Inflation Reduction Act of 2022 ("IRA") was signed into law.

This legislation introduces a 1% excise tax on stock repurchases, net of shares issued under compensation programs, among its key tax provisions.

The IRA is effective for years beginning after December 31, 2022.

For the fiscal year ended December 31, 2023, the Company repurchased approximately 361 thousand shares of the Company’s common stock in the open market at an average price of $ 138.60 per share, for a total of $ 50.0 million under the previously announced $ 100.0 million share repurchase authorization (which expired at the end of 2023).

As of December 31, 2023, the Company accrued $ 0.4 M for the excise tax, which is included as a cost of treasury stock;

The provisions included a new Corporate Alternative Minimum Tax "CAMT", an excise tax of 1.0% on stock buybacks, and significant tax incentives for energy and climate initiatives, all effective for tax year 2023 and onwards.

The Company is not subject to the provisions of CAMT and does not expect the impact of the remaining provisions to be material.

For the fiscal year ended December 31, 2024, the Company repurchased approximately 0.6 million shares of the Company’s common stock in the open market at an average price of $ 178.83 per share, for a total of $ 100.0 million under the previously announced $ 100.0 million share repurchase authorization (which expired at the end of 2024).

As of December 31, 2024, the

Company accr ued approximately $ 0.8 million for the excise tax, which is included as a cost of treasury stock;

however, this is not reflected in the share repurchase amounts above.

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Other comprehensive gain/(loss) net of tax benefit (expense) of $0, ($133), ($10,264) and ($951), respectively.

( 20,942 ) 2,065 42,740 11,898 35,761

Amounts reclassified from accumulative other comprehensive income, net of $0 tax 209 — ( 18,987 ) ( 3,437 ) ( 22,215 )

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The following table summarizes the Company’s unvested restricted stock unit activity for the year ended December 31, 2024 :

(in thousands) Weighted-

(in thousands)

Exercise Price Aggregate

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Time and performance-based RSUs granted to the Company’s employees excluding officers and certain key employees, vest ratably over the four-year life of the award and through 2020, required the underlying shares of the Company's common stock to be subject to a performance-based adjustment during the first year and starting in 2021, were time-based awards which vest ratable over the four-year life of the award.

The Company’s nine non-employee directors are entitled to receive approximately $ 1.1 million in equity compensation annually.

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

In April and June 2023, the Company granted 10 thousand 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 total expense of $ 1.2 million.

The Company’s seven non-employee directors serving during 2024 are entitled to receive approximately $ 0.9 million in equity compensation annually.

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

In May 2024 , the Company granted 4,692 shares of the Company's common stock to the non-employee directors, based on the average closing price of $ 173.89 per share and recognized total expense of $ 0.8 million.

The total intrinsic value of RSUs and PSUs vested during the years ended December 31, 2024, 2023 and 2022 was $ 31.8 million, $ 20.3 million and $ 25.6 million, respectively, based on the market value on the vest date.

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2024 2023 2022

Shares issued 9,800 9,300 6,900

Shares to be issued

21,266 9,800 9,300

Shares settled with cash (foreign employees) 763 4,900 7,400

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Trade accounts receivable $ 291,480 $ 292,360

Allowance for doubtful accounts ( 3,881 ) ( 3,240 )

Allowance for credit losses

( 2,998 ) ( 3,881 )

Allowance for sales discounts ( 4,090 ) ( 4,504 )

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Net deferred gains and losses on these contracts relating to changes in fair value are included in accumulated other OCI and are reclassified into cost of sales in the consolidated statements of operations 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, 2022 and $ 0.2 million in losses recorded on these contracts during the year ending December 31, 2023.

The amounts deferred in OCI are expected to be recognized as a component of cost of sales in the consolidated statements of operations during 2024.

There were $ 0.2 million in losses recorded on these contracts during the year ended December 31, 2023 and $ 0.2 million in losses recorded on these contracts during the year ending December 31, 2024.

Beginning in March 2022, the Company entered into a forward foreign currency contract expiring in March 2029 to hedge its exposure to adverse foreign currency exchange rate movements for its operations in Europe and elected the spot method for designating this contract as a net investment hedge with the net interest income from forward points excluded and amortized to interest expense.

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There were no amounts recognized due to ineffectiveness during the twelve months ended December 31, 2024.

Th e effects of fair value and cash flow hedge accounting on the consolidated statements of operations for the periods ended December 31, were as follows:

The effects of fair value and cash flow hedge accounting on the consolidated statements of operations for the periods ended December 31, were as follows:

(in thousands) Cost of sales Interest expense, net Other & foreign exchange loss, net Cost of sales Interest expense, net Other & foreign exchange loss, net

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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

2023 2022 2023 2022

(in thousands) 2024 2023 2024 2023

Interest rate contracts $ 8,589 $ 4,668 Interest expense $ 11,712 $ 15,722

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Total $ 37,563 $ ( 10,193 ) $ 43,040 $ 8,033

For the twelve months ended December 31, 2023 and December 31, 2022, gains on the net investment hedge of $ 11.4 million and $ 13.0 million, respectively, were included in OCI.

For the twelve months ended December 31, 2023 and December 31, 2022, deferred gains from the forward points of $ 5.1 million and $ 3.3 million, were reclassified from OCI to interest expense.

For the twelve months ended December 31, 2024 and 2023, a gain of $ 13.9 million and a loss of $ 11.4 million, respectively, on the net investment hedge were included in OCI.

For the twelve months ended December 31, 2024 and 2023, deferred gains from the forward points of $ 5.1 million for both years were reclassified from OCI to interest expense.

As of December 31, 2024, the aggregate fair values of the Company’s derivative instruments on the Consolidated Balance Sheet were comprised of an asset of $ 32.4 million, of which $ 13.6 million is included in other current assets , and the balance of $ 18.8 million as other non-current assets , and of a noncurrent liability of $ 7.2 million included as deferred income tax and other long-term liabilities .

As of December 31, 2022, the aggregate fair values of the Company’s derivative instruments on the Consolidated Balance Sheet were comprised of an asset of $ 43.9 million, of which $ 20.4 million is included in other current assets , and the balance of

$ 23.5 million as other non-current assets , and of a noncurrent liability of $ 8.0 million included as deferred income tax and other long-term liabilities .

As of December 31, 2023, the Company expects it will reclassify net gains of approximately $ 15.7 million, currently recorded in Accumulated Other Comprehensive Income (AOCI), into interest expense in earnings within the next twelve months.

As of December 31, 2023, the aggregate fair values of the Company’s derivative instruments on the Consolidated Balance Sheet were comprised of an asset of $ 21.9 million, of which $ 14.5 million is included in other current assets , and the balance of $ 7.4 million as other non-current assets , and of a noncurrent liability of $ 30.1 million included as deferred income tax and other long-term liabilities .

As of December 31, 2024, the Company expects it will reclassify net gains of approxi mately $ 15.0 million, cu rrently recorded in Accumulated Other Comprehensive Income (AOCI), into interest expense in earnings within the next twelve months.

However, the actual amount reclassified could vary due to future changes in the fair value of these derivatives.

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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, 2023, and 2022, the Company had capitalized software development costs net of accumulated amortization of $ 33.8 million and $ 33.3 million, respectively, included in machinery and equipment and as of December 31, 2023, and 2022, $ 9.7 million and $ 7.0 million, respectively, was included in capital projects in progress.

As of December 31, 2024, and 2023, the Company had capitalized software development costs net of accumulated amortization of $ 35.9 million and $ 33.8 million, respectively, included in machinery and equipment and as of December 31, 2024, and 2023, and $ 16.1 million and $ 9.7 million, respectively, was included in capital projects in progress.

Depreciation expense, including depreciation of equipment and amortization of internally developed and acquired software, was $ 59.7 million, $ 51.2 million, and $ 43.4 million for the years ended December 31, 2024 , 2023 and 2022, respectively.

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Goodwill acquired ( 2,077 ) 1 1,497 — ( 580 )

Goodwill disposed — ( 5,678 ) 2 — ( 5,678 )

Foreign exchange 63 13,075 ( 2 ) 13,136

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Goodwill acquired 32,820 — — 32,820

Goodwill disposed — ( 5,678 ) 4 — ( 5,678 )

Foreign exchange ( 230 ) ( 22,644 ) ( 113 ) ( 22,987 )

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The Company tests goodwill for impairment at the reporting unit level on an annual basis (in the fourth quarter).

Our goodwill balance is not amortized to expense, and we may assess qualitative factors and quantitative factors to determine whether it is more likely than not that the fair value of each reporting unit is less than its carrying amount as a basis for determining whether it is necessary to complete quantitative impairment assessments.

The goodwill balance is not amortized to expense, and the Company may assess qualitative or quantitative factors to determine whether it is more likely than not that the fair value of each reporting unit is less than its carrying amount as a basis for determining whether it is necessary to complete quantitative impairment assessments.

During fiscal year 2023, we re-evaluated our European reporting units after a full year of operations from our acquisition of ETANCO as it has become further integrated into our other European operations resulting in changes to the management, product distribution, and operations structure of our European operations.

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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.

In 2024 , the Company applied the ("Step 0") approach to assess qualitative factors related to the goodwill of the reporting units to determine whether it is necessary to perform an impairment test.

For this qualitative assessment, the Company assessed various assumptions, events and circumstances that would have affected the estimated fair value of the reporting units.

Based on the qualitative assessment performed, the Company concluded that there was no evidence of events or circumstances that would indicate a material change from the Company’s prior year quantitative assessment by reporting unit and therefore, it was more likely than not that the estimated fair value of reporting units exceeded their respective carrying values.

In 2023, the Company applied the ("Step 1") approach where the Company compares the fair value of the reporting unit to its carrying value.

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

In 2022, we completed our annual impairment assessment by performing a qualitative assessment.

For this qualitative assessment, we assessed various assumptions, events and circumstances that would have affected the estimated fair value of the reporting units.

The 2024 and 2023 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

1 During the year ended December 31, 2023, the Company finalized an acquisition of a business 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.

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2 During the year ended December 31, 2023, the Company finalized a sale of a business that did not result in material gain or loss.

Amortizable Intangible Assets

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.

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The aggregate amount of amortization expense of intangible assets for the years ended December 31, 2024, 2023 and 2022 was $ 24.8 million, $ 23.5 million and $ 17.4 million, respectively.

The weighted-average remaining amortization period for all amortizable intangibles on a combined basis is 11.0 y ears as of December 31, 2023.

The weighted-average remaining amortization period for all amortizable intangibles on a combined basis is 9.6 years as of December 31, 2024.

The annual changes in the carrying amounts of patents, unpatented technologies, customer relationships and non-compete agreements and other intangible assets subject to amortization for the years ended December 31, 2024 and 2023 were as follows:

(in thousands) Gross

(in thousands)

Amount Accumulated

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Balance as of December 31, 2024 $ 53,472 $ ( 8,322 ) $ 45,150

(in thousands) Gross

(in thousands)

Amount Accumulated

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Amortization — ( 820 ) ( 820 )

Reclassifications

( 49 ) — ( 49 )

Foreign exchange 98 — 98

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Balance as of December 31, 2024 $ 22,459 $ ( 21,270 ) $ 1,189

(in thousands) Gross

(in thousands)

Amount Accumulated

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Balance as of January 1, 2023 $ 28,301 $ ( 12,932 ) $ 15,369

Purchases 6,880 ( 5 ) 6,875

Assets acquisitions, net of cash acquired ( 380 ) 3 — ( 380 )

Amortization — ( 2,813 ) ( 2,813 )

Foreign exchange 226 — 226

Reclassifications 149 — 149

Balance as of December 31, 2023 28,147 ( 15,745 ) 12,402

Assets acquisitions, net of cash acquired ( 380 ) 5 — ( 380 )

Purchases of intangible assets 14,100 — 14,100

Amortization — ( 2,972 ) ( 2,972 )

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Balance as of December 31, 2024 $ 42,240 $ ( 18,717 ) $ 23,523

(in thousands) Gross

(in thousands)

Amount Accumulated

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Amortization — ( 17,429 ) ( 17,429 )

Reclassifications ( 151 ) — ( 151 )

Foreign exchange 7,407 — 7,407

Removal of fully amortized assets — — —

Balance as of December 31, 2023 269,166 ( 46,399 ) 222,767

Purchases 10,560 — 10,560

Disposal 331 — 331

Amortization — ( 17,362 ) ( 17,362 )

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Indefinite-Lived Intangible Assets

Indefinite-lived intangible assets totaled $ 94.2 million a s of December 31, 2023, including $ 96.3 million, net of an unfavorable foreign exchange impact of $ 2.5 million, attributable to trade names acquired in the ETANCO acquisition.

Indefinite-lived intangible assets totaled $ 105.7 million as of December 31, 2024, including $ 93.2 million, net of an unfavorable foreign exchange impact of $ 0.7 million, attributable to trade names acquired in the ETANCO acquisition.

3 During the year ended December 31, 2023, the Company finalized an acquisition of a business that resulted in a $0.4 million decrease in the intangible with an offset of $1.3 million to customer relationships.

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As of December 31, 2023

Amount Accumulated

Amortization Net

Gross Carrying Amount Accumulated Amortization Net Carrying Amount

(in thousands)

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Europe 384,432 ( 53,493 ) 330,939

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

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

As of December 31, 2024

Amount Accumulated

Amortization Net

Gross Carrying Amount Accumulated Amortization Net Carrying Amount

(in thousands)

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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 consolidated balance sheets as of December 31, 2023, and 2022, and consolidated statements of operations, and consolidated statements of cash flows for the years ended December 31, 2023 and 2022:

The following table provides a summary of operating leases included on the consolidated balance sheets as of December 31, 2024, and 2023, and consolidated statements of operations, and consolidated statements of cash flows for the years ended December 31, 2024 and 2023:

Consolidated Balance Sheets Line Item As of December 31,

(in thousands) 2024 2023

Operating leases

Operating leases Operating lease right-of-use assets $ 68,792 $ 57,652

Operating-current Accrued expenses and other current liabilities $ 14,954 $ 11,544

Operating-noncurrent Operating lease liabilities 55,324 46,882

Operating lease right-of-use assets $ 93,933 $ 68,792

Accrued expenses and other current liabilities $ 19,415 $ 14,954

Operating lease liabilities 76,184 55,324

Total operating lease liabilities $ 95,599 $ 70,278

The components of lease expense were as follows:

The components of operating lease expense were as follows:

Consolidated Statements of Operations Line Item Years Ended

(in thousands) 2024 2023

Operating lease cost General administrative expenses and

General administrative expenses and

cost of sales $ 19,938 $ 16,936

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Total lease payments 111,943

Present value discount ( 10,274 )

Present value discount and other

Total lease liabilities $ 95,599

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The Amended and Restated Credit Facility provides for a 5-year $ 450.0 million revolving line of credit, which includes a letter of credit-sub-facility up to $ 50.0 million, and a 5-year term loan facility of $ 450.0 million.

The Company borrowed $ 250.0 million, under the revolving credit facility and $ 450.0 million under the term loan facility to finance a portion of the purchase price for the acquisition of ETANCO.

In addition, the Company incurred $ 6.8 million of debt issuance costs, which are classified in long-term debt on the consolidated balance sheet, that have been deferred and will amortize over the 5-year terms of the Amended and Restated Credit Facility.

During 2023 and 2022, the Company made principal payments of $ 97.5 million and $ 116.9 million on the Company's outstanding Revolving and Term Credit Facility, respectively.

The Company borrowed $ 450.0 million under the term loan facility to finance a portion of the purchase price for the acquisition of ETANCO.

In addition, the Company incurred $ 6.8 million of debt issuance costs, which are classified in long-term debt on the consolidated balance sheet, that have been deferred and are being amortized over the 5-year terms of the Amended and Restated Credit Facility.

During 2024 and 2023, the Company made principal payments of $ 97.5 million on the Company's outstanding term loan facility.

The Company is required to pay an annual revolving credit facility fee of 0.1 % to 0.3 % per annum on the available commitments under the terms of the Amended and Restated Revolving Credit Facility, regardless of usage, with the applicable fee determined on a quarterly basis based on the Company’s net leverage ratio.

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Total loan outstanding $ 388,125

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

The Company complied with its financial covenants under the Amended and Related Credit Facility as of December 31, 2024.

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Purchase Obligations

In addition to the debt and lease obligations described elsewhere in the footnotes, the Company has certain purchase obligations in the ordinary course of business.

In addition to the debt and lease obligations described in the footnotes, the Company has certain purchase obligations in the ordinary course of business.

These purchase obligations are primarily related to the acquisition, and construction or expansion of facilities and equipment.

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As of December 31, 2024, the Company has steel purchase obligations that are expected to be settled during the year.

The Company also has long term purchase obligations of $104.2 million for the construction of a new facility in Gallatin, Tennessee and the expansion of our Columbus, Ohio facility that are expected to completed in 2025.

Debt interest obligations include annual facility fees on the Company’s primary line-of-credit facility in the amount of $ 29.0 million at December 31, 2023.

The Company also has debt interest obligations that includes annual facility fees on the Company’s primary line-of-credit facility in the amount of $ 20.2 million at December 31, 2024.

Employee Relations

As of December 31, 2023, approximatel y 9 % o f our employees are represented by labor unions and are covered by collective bargaining agreements in the U.S.

As of December 31, 2024, approximately 18.4 % of our employees are represented by labor unions and are covered by collective bargaining agreements in the U.S.

The Company has two-facility locations with collective bargaining agreements covering tool and die craftsmen, maintenance workers, and sheet-metal workers.

In Stockton, California, two union contracts will expire in June 2027 and September 2028, respectively.

Also, the Company has two contracts in San Bernardino County, California that will expire in February 2025 and in June 2026, respectively.

In Riverside, California, two union contracts will expire on February, 28 2025, which is in the process of being renegotiated, and in June 2026, respectively.

France also has two collectively bargained agreements, one under the Convention collective nationale de la métallurgie and the other under Plasturgie.

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.

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(in thousands) 2024 2023 2022

2023 2022 2021

Federal $ 75,783 $ 89,954 $ 90,703

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As of December 31, 2024, and 2023, the Company has valuation allowances of $ 12.7 million and $ 10.4 million , respectively.

The valuation allowance decreased by $ 0.8 million for the years ended December 31, 2023, and December 31, 2022, respectively.

The decrease in the 2023 valuation allowances was primarily due to expiration of certain U.S.

The valuation allowance increased by $ 2.3 million for the year ended December 31, 2024 and decreased by $ 0.8 million for the year ended December 31, 2023.

The increase in the 2024 valuation allowances was primarily due to the increase in net operating losses in Europe.

The decrease in the 2023 valuation allowances was primarily due to expiration of certain U.

foreign tax credit.

The decrease in the 2022 valuation allowances was primarily the result of exchange rate fluctuation.

As of December 31, 2024, 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.

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Years Ended December 31,

(in thousands)

2024 2023 2022

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tax rate applied to deferred taxes 0.1 % 0.6 % — %

Change in valuation allowance 0.5 % — % — %

True-up of prior year tax returns to tax provision — % ( 0.1 ) % — %

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Total deferred tax liabilities ( 148,930 ) ( 148,428 )

Total Deferred tax asset/(liability) $ ( 97,601 ) $ ( 112,332 )

Total deferred tax liability

$ ( 88,980 ) $ ( 97,601 )

A reconciliation of the beginning and ending amounts of unrecognized tax benefits in 2024 , 2023 and 2022, respectively, were as follows, including foreign translation amounts:

Reconciliation of Unrecognized Tax Benefits 2023 2022 2021

Reconciliation of Unrecognized Tax Benefits ( in thousands )

2024 2023 2022

Balance as of January 1 $ 4,641 $ 7,232 $ 944

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Balance as of December 31 $ 4,667 $ 4,641 $ 7,232

During 2023, the Company’s uncertain tax positions decreased by $ 3.0 million, primarily due to positions for open years of which were assumed in the Company’s acquisition of ETANCO.

During 2024 , the Company’s uncertain tax positions decreased b y $ 1.2 million, primarily due to positions for open years of which were assumed in the Company’s acquisition of ETANCO.

Tax positions of $ 1.5 million , $ 2.0 million, and $ 0.2 million are included in the balance of unrecognized tax benefits as of December 31, 2024, 2023, and 2022, respectively, which if recognized, would reduce the effective tax rate.

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 years ended December 31, 2023, 2022 and 2021, accrued interest decreased by $ 0.2 million, and increased by $ 0.7 million and an insignificant amount, respectively.

The Company had accrued $ 0.7 million, $ 0.9 million and $ 0.2 million as of December 31, 2023, 2022 and 2021, respectively for the potential payment of interest and penalties before income tax benefits.

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

The Company accr ued $ 1.4 million, $ 0.7 million and $ 0.9 million as of December 31, 2024, 2023 and 2022, respectively for the potential payment of interest and penalties before income tax benefits.

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

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for the tax years 2021 through 2024 .

In addition, tax years 2018 through 2023 remain open to examination in states, local and foreign jurisdictions.

On August 16, 2022, President Biden signed into law the Inflation Reduction Act “IRA”.

The provisions include the new Corporate Alternative Minimum Tax "CAMT", an excise tax on stock buybacks, and significant tax incentives for energy and climate initiatives, all effective for tax year 2023.

In addition, tax years 2019 through 2024 remain open in various states, local and foreign jurisdictions.

On August 16, 2022, the Inflation Reduction Act “IRA” was signed into the law.

The provisions included a new Corporate Alternative Minimum Tax "CAMT", an excise tax on stock buybacks, and significant tax incentives for energy and climate initiatives, all effective for tax year 2023 and onwards.

The Company is not subject to the provisions of CAMT and does not expect the impact of the remaining provisions to be material.

Retirement Plans

The Company has six defined contribution retirement plans covering substantially all salaried employees and nonunion hourly employees.

The Company has seven defined contribution retirement plans covering substantially all salaried employees and nonunion hourly employees.

The Simpson Manufacturing Co., Inc.

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The discretionary amounts for 2024 , 2023 and 2022 were equal to 7.0 % of qualifying salaries or wages of the covered employees.

The Company also has the Simpson Manufacturing Co., Inc.

SMW Supplemental 401(k) Plan where it makes periodic contributions to this plan in accordance with the collective bargaining agreement.

For 2024, the Company contributed 1.0% of the covered employees' qualifying salaries and wages.

The other five defined contribution plans, covering the Company’s European and Canadian employees, require the Company to make contributions ranging from 3.0 % to 15.0 % of the employees’ compensation.

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Related Party Transactions

During 2023 and 2022, the Company identified certain purchases of goods and services from companies where the former Chief Executive Officer of the Company served 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 statements of operations and cash flows for the year ended December 31, 2023 and 2022.

The Company identified certain services provided by a firm where an immediate family member of a current board member serves as a principal.

The total expenses were not material to the Company, and the expenses were recorded within general and administrative expenses on our Consolidated Statement of Operations during the years ended December 31, 2023 and 2022.

In 2023, the Company identified certain purchases of goods and services from companies where the former Chief Executive Officer of the Company served as a director on the respective company's board providing the goods or services.

The Company identified certain related party transactions for the years ended December 31, 2024 and 2023.

The total expenses were not material to the Company, and the majority of the expenses were recorded within general and administrative expenses on our Consolidated Statement of Operations during the years ended December 31, 2024 and 2023.

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 the Company’s customers.

The financial information of these segments is available and utilized by the Chief Executive Officer, the Company’s CODM, to assess the segments’ performance.

The primary measurements used to measure the financial performance of the segments are revenue, gross margins, and operating margins to decide whether to reinvest the profits, make acquisitions, pay down debt or borrow, or to return capital to shareholders via dividends and share repurchases.

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

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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, 2023, 2022 and 2021, respectively:

(in thousands)

The following table presents financial information of each segment that is used by the CODM to assess the performance of segments for periods ended December 31, 2024, 2023 and 2022, respectively:

(in thousands) North

America Europe Asia/

3 unchanged sentences

Wood Products 1,499,889 384,494 15,141 — 1,899,524

1,482,099 385,134 14,467 — 1,881,700

Concrete Products 233,936 94,561 2,060 — 330,557

222,720 95,621 2,159 — 320,500

Cost of sales 885,375 310,073 11,407 ( 567 ) 1,206,288

Gross profit 850,504 168,982 5,798 567 1,025,851

Research and development, and other engineering expenses 84,246 8,514 816 — 93,576

Selling expenses 164,947 51,005 3,450 — 219,402

General and administrative expenses 161,958 72,181 1,851 41,542 277,532

Sales to other segments * 3,263 4,764 33,407 — 41,434

6 unchanged sentences

asset acquisitions;

investments 92,725 21,975 6,402 ( 7,605 ) 113,497

and equity investments

243,728 13,863 3,280 273 261,144

Total assets 2,062,552 687,955 48,769 ( 63,108 ) 2,736,168

(in thousands) North

(in thousands)

America Europe Asia/

3 unchanged sentences

Wood Products 1,491,848 385,134 14,467 — 1,891,449

1,496,062 323,065 12,453 — 1,831,580

Concrete Products 222,720 95,621 2,159 — 320,500

Cost of sales 853,864 303,708 10,946 1,530 1,170,048

Gross profit 862,558 177,048 5,679 ( 1,530 ) 1,043,755

Research and development, and other engineering expenses

84,539 7,523 105 — 92,167

Selling expenses

150,616 50,553 2,811 — 203,980

General and administrative expenses

154,241 68,578 2,229 43,055 268,103

Sales to other segments * 4,718 5,900 29,040 — 39,658

8 unchanged sentences

Total assets 1,745,341 716,396 38,719 204,268 2,704,724

(in thousands) North

(in thousands)

America Europe Asia/

3 unchanged sentences

Wood Products 1,496,062 323,065 12,453 — 1,831,580

1,189,264 160,657 11,192 — 1,361,113

Concrete Products 202,687 77,228 2,290 — 282,205

Cost of sales 890,384 274,687 9,834 ( 111 ) 1,174,794

Gross profit 810,657 125,616 4,909 111 941,293

Research and development, and other engineering expenses

62,676 5,467 254 ( 43 ) 68,354

Selling expenses

126,990 39,872 2,509 7 169,378

General and administrative expenses

135,163 52,958 1,462 38,885 228,468

Sales to other segments * 4,862 5,732 32,979 — 43,573

3 unchanged sentences

Provision for income taxes 112,537 1,193 1,091 ( 751 ) 114,070

Capital expenditures, including purchases of

intangible assets 45,817 2,403 603 988 49,811

Business acquisitions, net of cash acquired;

capital expenditures;

asset acquisitions;

and equity investments 54,594 817,163 1,173 2,871 875,801

Total assets 1,393,968 675,634 34,599 399,770 2,503,971

* Sales to other segments are eliminated upon consolidation.

** Beginning in 2022, the Company changed its presentation of its North America and Administrative and all other segment's statement of operations to display allocated expenses and management fees as a separate item below income from operations.

During 2021, allocated expenses and management fees between the two segments were previously included in gross profit, operating expenses and in income from operations and been adjusted herein to conform to 2022 presentation.

Consolidated statements of operations, income before tax and net income for all periods presented below are not affected by the change of operations.

Cash collected by the Company’s U.S.

3 unchanged sentences

The majority of this balance is held in foreign currencies and could be subject to additional taxation if repatriated to the U.S.

The significant non-cash charges comprise compensation related to equity awards under the Company’s stock-based incentive plans and the Company’s employee stock bonus plan.

The significant non-cash charges comprise compensation related to equity awards under the Company’s stock-based incentive plans, the Company’s employee stock bonus plan, and the Company's non-qualified deferred compensation plan.

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

10 unchanged sentences

Canada 90,220 2,799 81,404 2,722 81,036 2,571

United Kingdom 32,058 2,352 37,349 1,898 37,408 1,851

Germany 45,319 12,077 42,954 11,507 29,970 9,999

Italy 56,042 24,869 62,428 25,245 47,294 4,342

Germany 48,134 12,273 45,319 12,077 42,954 11,507

Poland 45,528 11,452 39,978 10,836 27,803 2,721

United Kingdom 29,310 2,286 32,058 2,352 37,349 1,898

Belgium 17,549 1,723 18,802 2,297 15,032 2,182

Sweden 13,946 2,192 15,342 2,579 16,156 2,369

Denmark 12,746 4,614 12,318 3,734 12,610 1,015

Norway 9,635 852 12,241 — 12,736 —

Australia 12,196 1,181 11,351 800 9,468 245

Belgium 18,802 2,297 15,032 2,182 6,818 2,349

Norway 8,391 — 9,635 852 12,241 —

Other countries 32,072 17,461 31,247 19,487 27,512 11,496

1 unchanged sentence

Net sales and long-lived assets, excluding intangible assets and goodwill, are attributable to the country where the sales or manufacturing operations are located.

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 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 Company's wood construction products are used in light-frame building applications and include connectors, truss plates, screw fastening systems, fasteners and pre-fabricated lateral-force resisting systems.

Its concrete construction products are used in concrete, masonry and steel building applications and include adhesives, chemicals, mechanical anchors, carbide drill bits, powder actuated tools, fiber reinforced materials, and other repair products used for protecting and strengthening structures.

The following table shows the distribution of the Company’s net sales by product for the years ended December 31, 2024, 2023 and 2022, respectively:

(in thousands) 2024 2023 2022

2023 2022 2021

Wood Construction $ 1,899,524 $ 1,891,449 $ 1,831,580

9 unchanged sentences

On January 31, 2025, the Board adopted a resolution to retire 559,179 shares held as treasury account in Stockholders' Equity.

Sale of Asset

On January 24, 2025, the Company has executed an agreement to sell its Gallatin, Tennessee facility for $ 19.1 million.

As of December 31, 2024, the assets did not meet the held-for-sale criteria.

Share Repurchases

In February 2025, the Company repurchased 146,640 shares of the Company’s common stock in the open market at an average price of 170.48 per share for a total of approximately $ 25.0 million.

As a result, as of February 28, 2025, approximately $ 75.0 million remained available for share repurchase through December 31, 2025 under the Company’s previously announced $ 100.0 million share repurchase authorization.

Simpson Manufacturing Co., Inc.

4 unchanged sentences

Balance at to Costs to Other Balance

(in thousands) Beginning and Accounts — at End

(in thousands)

Beginning and Accounts — at End

Classification of Year Expenses Write-offs Deductions of Year

13 unchanged sentences

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