What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2025-08-08 compared with 2025-05-09 · 184 added, 120 removed, 160 unchanged (66% of the section changed)

15 unchanged sentences

Risk Factors and Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the fiscal year ended Dece mber 31, 2024.

Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024.

Additional risks include:

23 unchanged sentences

• Be an innovative leader in the markets we operate;

• Above market growth relative to U.S.

housing starts (exceeding our historical average volume performance in North America of approximate ly 250 basis points above the housing starts market);

• Above market growth relative to the U.S.

housing starts (exceeding our historical average volume performance in North America of approximately 250 basis points above the housing starts market);

• An operating income margin at or above 20%;

13 unchanged sentences

These examples further emulate our Founder, Barclay Simpson’s, nine principles of doing business, and more specifically the focus and obsession on customers and users.

During the three months ended March 31, 2025, the recent tariff and trade policy actions have not had a significant impact on our results of operations;

however, we have experienced increased foreign currency exchange rate volatility, which we attribute, in part, to the rapidly changing global trade environment.

As previously announced, we will increase prices as of June 2, 2025 on certain wood connectors, fasteners and mechanical anchors in the U.S.

During the six months ended June 30, 2025, the recent tariff and trade policy actions have had some impact and will continue to impact our results of operations.

We also experienced increased foreign currency exchange rate volatility, which we attribute, in part, to the rapidly changing global trade environment.

As previously announced, we increased prices as of June 2, 2025 on certain wood connectors, fasteners and mechanical anchors in the U.S.

We believe North America net sales could increase in future periods even if demand does not increase.

However, increased selling prices are expected to be offset by increased non-material costs including labor, energy, transportation, and equipment.

In addition, the announced price increases will partly offset the increased costs related to recently announced tariffs that effect a portion of our fastener and anchors sales.

increased selling prices are expected to be offset by increased non-material costs including labor, energy, transportation, and equipment incurred over the prior three years.

In addition, the announced price increases will partly offset the increased costs related to the initial tariffs that effected a portion of our fastener and anchors sales, while it does not offset tariffs announced after June 2, 2025.

Non-GAAP Financial Measures

In addition to financial information prepared in accordance with GAAP, w e use adjusted EBITDA as a non-GAAP financial measure in evaluating the ongoing operating performance of our business.

In addition to financial information prepared in accordance with GAAP, we use adjusted EBITDA as a non-GAAP financial measure in evaluating the ongoing operating performance of our business.

We define adjusted EBITDA as net income (loss) before income taxes, adjusted to exclude depreciation and amortization, integration, acquisition and restructuring costs, non-qualified deferred compensation adjustments, goodwill impairment, gain on bargain purchase, net loss or gain on disposal of assets, interest income or expense, and foreign exchange and other expense (income).

This provides additional insight into the Company’s operating performance in light of the significant levels of growth investment we have made in our operations, the effect depreciation as well as acquisition and integration costs will have on our operating results.

This provides additional insight into the Company’s operating performance in light of the significant levels of growth investment we have made in our operations, the effect depreciation and acquisition as well as integration costs will have on our operating results.

We believe this will also provide a better approximation of our cash flows compared to operating income.

2 unchanged sentences

housing starts and residential construction activity.

Overall housing starts decreased slightly under the trailing twelve months ending March 31, 2025, compared to the trailing twelve months ending March 31, 2024.

housing starts decreased under the trailing twelve months ending June 30, 2025, compared to the trailing twelve months ending June 30, 2024.

Lower housing starts in the U.S.

9 unchanged sentences

As a result of the tariff’s announced by the U.S.

presidential administration on April 2, 2025, and potential tariff modifications or the imposition of tariffs or export controls by other countries there is significant economic uncertainty.

presidential administration on April 2, 2025 and June 15, 2025, and potential tariff modifications or the imposition of tariffs or export controls by other countries there is significant economic uncertainty.

The extent and duration of tariffs and the resulting impact on macroeconomic conditions and on our business are uncertain and may depend on various factors beyond our control.

8 unchanged sentences

Increased tariffs (as noted above), political uncertainty, and rising costs can also have an effect on our gross and operating profits as well.

D ue to efforts in diversifying our geographic footprint, product offerings, and changing our path to market in the U.S., sales from our product lines, customer base, and customer purchases are becoming less seasonal.

Due to efforts in diversifying our geographic footprint, product offerings, and changing our path to market in the U.S., sales from our product lines, customer base, and customer purchases are becoming less seasonal.

Changes in raw material cost could impact the amount of inventory on-hand, and negatively affect our gross profit and operating margins depending on the timing of raw material purchases or how much sales prices can be increased to offset any increases in raw material costs.

3 unchanged sentences

Historically, our North America segment has generated more revenues from wood construction products compared to concrete construction products.

North America net sales increased for the quarter ended March 31, 2025 compared to March 31, 2024, due to incremental sales from the Company's 2024 acquisitions and timing of volume discount estimates that negatively impacted 2024 net sales.

The increases were partly offset by the negative effect of approximately $1.5 million in foreign currency translation.

Our wood construction product net sales increase d 3.5% for the quarter ended March 31, 2025 compared to March 31, 2024 .

Our concrete construction product sales increased 0.7% over the same periods.

North America net sales increased for the six months ended June 30, 2025 compared to the six months ended June 30, 2024 due to incremental sales from the Company's 2024 acquisitions and price increase that took effect in June 2025.

The increases were partly offset by decreased sales volumes and the negative effect of approximately $1.9 million in foreign currency translation.

Our wood construction product net sales increased 4.6% for the six months ended June 30, 2025 compared to June 30, 2024.

Our concrete construction product net sales increased 6.2% over the same periods.

For 2025, U.S.

housing starts could stay flat or increase in the low-single digit range from 2024 levels, with growth weighted towards the second half of the year.

With the investments we have made, we believe we will be able to continue to grow net sales above the U.S.

housing starts could decline in the low-single digit range from 2024 levels.

With the investments we have made, we believe we will be able to continue to grow volumes above the U.S.

housing starts market, one of our ambitions .

Operating income increased 5.4% to $104.2 million from $98.9 million.

For the year-to-date period, housing starts have decreased in 2025 compared to the same period in 2024.

Operating income increased 4.5% to $241.3 million.

The increase was primarily due to higher gross profits, partially offset by higher operating expenses.

The operating expense increases were driven by higher personnel costs and variable incentive compensation costs.

For 2025, incremental investments in the current business will be limited until the U.S.

The operating expense increases were driven primarily by higher personnel costs and variable compensation .

Additional incremental investments in the business will be limited until the U.S.

housing market shows long-term improvement.

During 2025, work continued on our Columbus, Ohio facility expansion as well as the construction our new Gallatin, Tennessee facility.

We expect the expansion and operation of these facilities to be completed and commence in 2025.

The expanded and new facilities are expected to improve our overall service, production efficiencies and safety in the workplace, as well as reduce our reliance on certain outsourced finished goods and component products and continue to ensure we have ample capacity to meet our customer needs.

In May 2025, we held the grand opening on our Columbus, Ohio facility.

We expect the construction of our new Gallatin, Tennessee facility to be completed and operations to commence in the fourth quarter of 2025.

These facilities are expected to improve our overall service, production efficiencies and safety in the workplace, as well as reduce our reliance on certain outsourced finished goods and component products.

These facilities will help ensure we have ample capacity to meet our customer needs.

These investments reinforce our core business model differentiators to remain the partner of choice as we continue to produce products locally and ensure superior levels of customer service.

Europe net sales decreased 5.1% for the quarter ended March 31, 2025 compared to March 31, 2024, primarily due the negative effect of approximately $4.0 million in foreign currency translation.

Wood construction product sales decreased 4.6% for the quarter ended March 31, 2025 compared to March 31, 2024 and concrete construction product sales, which are mostly project based, decreased 7.3% for the quarter ended March 31, 2025 compared to March 31, 2024 .

Gross profit decreased $3.8 million primarily due to higher factory and overhead, labor, as well as warehouse costs, partly offset by lower material costs.

Operating income increased $1.1 million primarily due to a decrease in operating expenses including variable compensation costs.We currently anticipate Europe 2025 results to be impacted by economic headwinds but also believe in the long term potential given Europe's on-going housing shortage (with an increasing use of wood construction) and new environmental regulations for which we have products and solutions.

Europe net sales decrease d 1.0% for the six months ended June 30, 2025 compared to the six months ended June 30, 2024, Wood construction product net sales decrease d 0.9% f or the six months ended June 30, 2025 compared to June 30, 2024 and concrete construction product net sales, which are mostly project based, decreased 1.6% over the same periods.

Gross profit decrea sed $1.5 million primarily due to lower net sales as well as gross margins decreasing to 35.7% from 35.9% due to increased factory overhead, warehouse and labor costs, partially offset by lower material costs, as a percentage of net sales .

Operating income increased $4.6 million and operating margin increased to 10.1% from 8.2% due to lower operating and integration expenses.

We currently anticipate Europe 2025 results to be impacted by economic headwinds but also believe in the long term potential given Europe's on-going housing shortage (with an increasing use of wood construction) and new environmental regulations for which we have products and solutions.

Our Asia/Pacific segment has generated revenues from both wood and concrete construction products.

2 unchanged sentences

Based on business trends and conditions, the Company's outlook for the full fiscal year ending December 31, 2025 is as follows:

◦ Given the uncertainty regarding 2025 U.S.

housing starts compared to prior year housing starts, consolidated operating margin is estimated to be in the range of 18.5% to 20.5% with the low end of the range based on flat to declining 2025 housing starts compared to prior year and price increases implemented in 2025.

The operating margin range includes a projected benefit of between $10.0 million and $12.0 million from the sale of the existing Gallatin, Tennessee facility based on a contracted sales price of $19.1 million.

• Consolidated operating margin is estimated to be in the range of 18.5% to 20.5% given the declining trends and projections for 2025 U.S.

housing starts compared to the prior year and the current trade environment.

The outlook reflects the previously announced price increases that went into effect on June 2, 2025.

The operating margin range does not include any additional pricing actions in 2025 and includes a projected benefit of $12.0 million to $13.0 million from the sale of the original Gallatin, Tennessee facility based on a contracted sales price of $19.1 million.

• The effective tax rate is estimated to be in the range of 25.5% to 26.5%, including both federal and state income tax rates as well as international income tax rates, and assuming no tax law changes are enacted.

◦ Capital expenditures are estimated to be approximately $150.0 million to $170.0 million, which includes $75.0 million for the Columbus, Ohio facility expansion and construction of the new Gallatin, Tennessee facility.

Results of Operations for the Three Months Ended, 2025, Compared with the Three Months Ended March 31, 2024

Unless otherwise stated, the below results, when providing comparisons (which are generally indicated by words such as “increased,” “decreased,” “unchanged” or “compared to”), compare the results of operations for the three months ended March 31, 2025 against the results of operations for the three months ended March 31, 2024.

Unless otherwise stated, the

results announced below, when referencing “both quarters,” refer to the three months ended March 31, 2024 and the three months ended March 31, 2025.

First Quarter 2025 Consolidated Financial Highlights

The following table shows the change in the Company's results of operations from the three months ended March 31, 2024 to the three months ended March 31, 2025, and the increases or decreases for each category by segment:

• Capital expenditures are estimated to range between $140.0 and $160.0 million, which includes approximately $70.0 million to $75.0 million remaining for both the Columbus, Ohio facility expansion and the new Gallatin, Tennessee facility construction.

Results of Operations for the Three Months Ended June 30, 2025, Compared with the Three Months Ended June 30, 2024

Unless otherwise stated, the below results, when providing comparisons (which are generally indicated by words such as “increased,” “decreased,” “unchanged” or “compared to”), compare the results of operations for the three months ended June 30, 2025, against the results of operations for the three months ended June 30, 2024.

Unless otherwise stated, the results announced below, when referencing “both quarters,” refer to the three months ended June 30, 2024 and the three months ended June 30, 2025.

In the first quarter of 2025, the Company reclassified certain engineering costs related to the Company's digital efforts from research and development and engineering expense as well as selling expense to general and administrative expense.

The financial results of prior three months ended June 30, 2024 were revised to reflect these changes with $2.8 million of costs being reclassified from research and development expenses and $1.4 million from selling expense to general and administrative expense.

The reclassification did not have any impact on the total operating expenses.

Second Quarter 2025 Consolidated Financial Highlights

The following table shows the change in the Company's results of operations from the three months ended June 30, 2024 to the three months ended June 30, 2025, and the increases or decreases for each category by segment:

Three Months Ended Three Months Ended

Increase (Decrease) in Operating Segment

March 31, North Asia/ Admin & March 31,

(in thousands) 2024 America Europe Pacific All Other 2025

(in thousands) June 30, 2024 North

June 30, 2025

Net sales $ 596,978 $ 29,665 $ 3,521 $ 891 $ — $ 631,055

9 unchanged sentences

Interest income (expense), net and other 2,092 (333) 64 (6) (922) 895

Other & foreign exchange gain, net 1,969 (9,022) (1,605) 181 9,535 1,058

Other & foreign exchange gain (loss), net (1,588) (9,777) 1,123 (326) 8,884 (1,684)

Income before income taxes 132,690 (5,676) 4,713 (117) 7,845 139,455

2 unchanged sentences

Net sales increased 5.7% to $631.1 million from $597.0 million.

As noted above, North America sales increased primarily due to incremental sales from the Company's 2024 acquisitions and timing of volume discount estimates that negatively impacted 2024 net sales.

The increases were partly offset by the negative effect of foreign currency translation of approximately $1.5 million from North America and approximately $4.0 million from Europe.

Wood construction product sales, including sales of connectors, truss plates, fastening systems, fasteners and shearwalls, represented approximately 85.3% and 85.1% of the Company's total sales in the first quarters of 2025 and 2024, respectively.

Concrete construction product sales, including sales of adhesives, chemicals, mechanical anchors, powder actuated tools and reinforcing fiber materials, represented 14.4% and 14.8% of the Company's total sales in the first quarters of 2025 and 2024, respectively.

Gross profi t increased 3.1% to $252.0 million from $244.6 million primarily due to timing of 2024 volume discount estimates, as noted above, partially offset by increase in higher factory and overhead, labor, as well as warehouse costs.

As a result, consolidated gross margins were 46.8% compared to 46.1% last year.

From a product perspective, gross margin remained relatively flat at approximately 46.0% for wood construction products and increased to 49.5% from 46.5% for concrete construction products, respectively.

Research and development and engineering expense decreased 9.5% to $19.8 million from $21.9 million.

Due to the reorganization of the Company’s digital solution efforts, related expenses previously classified as research and development and engineering during 2024 were classified as general administrative for the current year.

For 2024, engineering costs related to the Company's digital efforts amounted to $2.5 million and were primarily comprised of personnel costs.

Selling expense decreased 0.6% to $54.2 million from $54.5 million.

Due to the reorganization of the Company’s digital solution efforts, related expenses previously classified as selling expense during 2024 were classified as general administrative for the current ye ar.

For 2024, engineering costs related to the Company's digital efforts amounted to $1.5 million and were primarily comprised of personnel costs.

General and administrative expense increased 7.8% to $75.7 million from $70.2 million.

Due to the reorganization of the Company’s digital solution efforts, related expenses previously classified as research and development and engineering as well as selling expense during 2024 were classified as general administrative for the current y ear.

For 2024, engineering costs related to the Company's digital efforts amounted to $4.0 million and were primarily comprised of personnel costs.

Our effective income tax rat e increased to 25.5% from 23.4% .

Wood construction product sales, including sales of connectors, truss plates, fastening systems, fasteners and shearwalls, represented 84.9% and 85.5% of the Company's total sales in the second quarters of 2025 and 2024, respectively.

Concrete construction product sales, including sales of adhesives, chemicals, mechanical anchors, powder actuated tools and reinforcing fiber materials, represented 15.0% and 14.5% of the Company's total sales in the second quarters of 2025 and 2024, respectively.

Gross profit increased 5.7% to $294.5 million from $278.5 million primarily due to higher net sales on flat gross margins of 46.7%.

From a product perspective, gross margin decreased to 47.1% from 47.2% for wood construction products and decreased to 45.0% from 47.5% for concrete construction products, respectively.

Selling expense increased 3.6% to $56.4 million from $54.5 million, primarily due to an increase of $1.9 million in personnel costs.

General and administrative expense increased 9.4% to $77.2 million from $70.6 million, primarily due to increases of $2.9 million in variable compensation, $1.8 million in personnel costs, and $1.0 million in computer and software, net of amount capitalized.

Our effective income tax rat e decreased to 25.8%from 26.3%.

Consolidated net income was $103.5 million compared to $97.8 million.

Diluted earnings per share was $2.47 compared to $2.31.

Adjusted E BITDA 1 of $121.8 million increased 3.8% compared to $117.3 million, primarily due to higher gross profits, as noted above.

The following table shows net sales by segment for the three months ended March 31, 2025 and 2024, respectively:

(in thousands) America Europe Pacific Total

Adjusted EBITDA 1 of $159.9 million increased 4.8% compared to $152.6 million, primarily due to higher gross profits.

The following table shows net sales by segment for the three months ended June 30, 2025 and 2024, respectively:

(in thousands) North

Three months ended

March 31, 2024 $ 406,749 $ 119,938 $ 3,892 $ 530,579

March 31, 2025 420,699 113,860 4,336 538,895

Increase (decrease) $ 13,950 $ (6,078) $ 444 $ 8,316

Percentage increase (decrease) 3.4 % (5.1) % 11.4 % 1.6 %

The following table shows segment net sales as percentages of total net sales for the three months ended March 31, 2025 and 2024, respectively:

June 30, 2024 $ 463,022 $ 129,877 $ 4,079 $ 596,978

June 30, 2025 492,687 133,398 4,970 631,055

$ 29,665 $ 3,521 $ 891 $ 34,077

Percentage increase

6.4 % 2.7 % 21.8 % 5.7 %

The following table shows segment net sales as percentages of total net sales for the three months ended June 30, 2025 and 2024, respectively:

America Europe Asia/

2 unchanged sentences

Percentage of total 2025 net sales 78 % 21 % 1 % 100 %

The following table shows gross profit by segment for the three months ended March 31, 2025 and 2024, respectively:

North Asia/ Admin &

(in thousands) America Europe Pacific All Other Total

The following table shows gross profit (loss) by segment for the three months ended June 30, 2025 and 2024, respectively:

(in thousands) North

Three months ended

March 31, 2024 $200,537 $43,812 $676 $(469) $244,556

March 31, 2025 210,292 40,022 1,725 1 252,040

June 30, 2024 $231,581 $45,949 $1,486 $(469) $278,547

June 30, 2025 245,445 48,275 1,536 (806) 294,450

Increase (decrease)

$13,864 $2,326 $50 $(337) $15,903

Percentage (decrease) 4.9 % (8.7) % * * 3.1 %

Percentage Increase 6.0 % 5.1 % * * 5.7 %

* The statistic is not meaningful or material.

The following table shows gross margins by segment for the three months ended March 31, 2025 and 2024, respectively:

The following table shows gross margin by segment for the three months ended June 30, 2025 and 2024, respectively:

All Other Total

2024 gross margin percentage 50.0 % 35.4 % 36.4 % * 46.7 %

2025 gross margin percentage 49.8 % 36.2 % 30.9 % * 46.7 %

* The statistic is not meaningful or material.

North America

• Net sales increased 6.4%, primarily due to price increases that took effect in June 2025 and incremental sales from the Company's 2024 acquisitions.

• Gross margin decreased to 49.8% from 50.0%, primarily due to higher warehouse costs, as a percentage of net sales.

• Selling expense increased 6.5% , primarily due to increases of $1.8 million in personnel costs and $0.8 million in variable compensation.

• General and administrative expense increased 15.0%, primarily due to increases of $1.8 million in depreciation and amortization, $1.7 million in professional fees, $1.6 million in variable compensation and $1.1 million in personnel costs.

• Income from operations increased by $4.4 million due to the factors discussed above.

• Net sales increased 2.7%, primarily due to the positive effect of approximately $7.0 million in foreign currency translation, partly offset by lower sales volumes.

• Gross margin increased to 36.2% from 35.4% , primarily due to lower material costs, partly offset by an increase in factory overhead, as a percentage of net sales.

• Income from operations increased by $3.5 million to $15.7 million from $12.1 million primarily due to an increase in gross profit and a decrease in operating expenses including variable compensation and travel related costs.

• For information about the Company's Asia/Pacific segment, please refer to the tables above setting forth changes in our operating results for the three months ended June 30, 2025 and 2024.

Results of Operations for the Six Months Ended June 30, 2025, Compared with the Six Months Ended June 30, 2024

Unless otherwise stated, the results announced below, when providing comparisons (which are generally indicated by words such as “increased,” “decreased,” “unchanged” or “compared to”), compare the results of operations for the six months ended June 30, 2025, against the results of operations for the six months ended June 30, 2024.

Unless otherwise stated, the results announced below, when referencing “both periods,” refer to the six months ended June 30, 2024 and the six months ended June 30, 2025.

The financial results of prior six months ended June 30, 2024, were revised to reflect these changes with $5.4 million of costs being reclassified from research and development expenses and $2.7 million from selling expense to general and administrative expense.

The reclassification did not have any impact on the total operating expenses.

Year-to-Date (6-month) 2025 Consolidated Financial Highlights

The following table illustrates the differences in our operating results for the six months ended June 30, 2025, from the six months ended June 30, 2024, and the increases or decreases for each category by segment:

Six Months Ended Increase (Decrease) in Operating Segment Six Months Ended

(in thousands) June 30, 2024 North

June 30, 2025

Net sales $ 1,127,557 $ 43,615 $ (2,556) $ 1,334 $ — $ 1,169,950

Cost of sales 604,456 19,386 (1,092) 236 474 623,460

Gross profit 523,101 24,229 (1,464) 1,098 (474) 546,490

Research and development and other engineering expense

39,213 912 194 287 — 40,606

Selling expense 107,758 4,122 (1,418) 146 (1) 110,607

General and administrative expense 144,649 8,729 (2,344) (432) 2,252 152,854

Total operating expenses 291,620 13,763 (3,568) 1 2,251 304,067

Acquisition and integration related costs 3,636 — (2,590) — (906) 140

Net gain on disposal of assets (436) 89 118 (51) — (280)

Income from operations 228,281 10,377 4,576 1,148 (1,819) 242,563

Interest income (expense), net and other 2,443 (457) 296 315 (599) 1,998

Other & foreign exchange gain (loss), net 381 (18,800) (483) (145) 18,421 (626)

Income (Loss) before income taxes 231,105 (8,880) 4,389 1,318 16,003 243,935

Provision for income taxes 57,847 463 185 312 3,703 62,510

Net income $ 173,258 $ (9,343) $ 4,204 $ 1,006 $ 12,300 $ 181,425

Net sales increased 3.8% to $1,170.0 million from $1,127.6 million driven by incremental sales from the Company's 2024 acquisitions and price increases that took effect in June 2025, partly offset by an overall decrease in sales volumes.

Wood construction product sales represented 85.1% and 85.3% of the Company's total sales in the first six months of 2025 and 2024.

Concrete construction product sales represented 14.7% and 14.6% of the Company's total sales in the first six months of 2025 and 2024.

Gross profit increased 4.5% to $546.5 million from $523.1 million.

Gross margins increased to 46.7% from 46.4%.

The increase is due to lower material costs for the Company overall.

Gross margins increased to 46.9% from 46.2% for wood construction products and decreased to 47.0% from 47.1% for concrete construction products.

Research and development and engineering expense increased 3.6% to $40.6 million from $39.2 million primarily due to increases of $4.8 million in in computer and software cost, net of amount capitalized and $0.6 million in personnel costs, partially offset by a decrease of $3.8 million in professional fees.

Selling expense increased to $110.6 million from $107.8 million, primarily due to increases of $4.8 million in personnel costs, $1.3 million in variable compensation, partially offset by decreases of $1.2 million in advertising and trade shows costs and $1.0 million in travel related costs.

General and administrative expense increased to $152.9 million from $144.6 million, primarily due to increases of $5.2 million in personnel costs and $5.0 million in variable compensation, partially offset by a decrease of $1.1 million in travel related costs.

Our effective income tax rate increased to 25.6% from 25.0%.

Consolidated net income was $181.4 million compared to $173.3 million.

Diluted earnings per share was $4.33 compared to $4.07.

Adjusted EBITDA 1 of $281.7 million increased 4.4% compared to $269.9 million primarily due to higher gross profits.

The following table represents net sales by segment for the six-month periods ended June 30, 2024 and 2025:

(in thousands) North

Six Months Ended

June 30, 2024 $ 869,771 $ 249,814 $ 7,972 $ 1,127,557

June 30, 2025 913,386 247,258 9,306 1,169,950

Increase (decrease) $ 43,615 $ (2,556) $ 1,334 $ 42,393

Percentage increase (decrease) 5.0 % (1.0) % 16.7 % 3.8 %

The following table represents segment sales as percentages of total net sales for the six-month periods ended June 30, 2024 and 2025, respectively:

America Europe Asia/

Pacific Total

Percentage of total 2024 net sales 77 % 22 % 1 % 100 %

Percentage of total 2025 net sales 78 % 21 % 1 % 100 %

The following table represents gross profit (loss) by segment for the six-month periods ended June 30, 2024 and 2025:

(in thousands) North America

Admin & All Other

Six Months Ended

June 30, 2024 $ 432,117 $ 89,761 $ 2,162 $ (939) $ 523,101

June 30, 2025 456,346 88,297 3,260 (1,413) 546,490

Increase (decrease) $ 24,229 $ (1,464) $ 1,098 $ (474) $ 23,389

Percentage increase (decrease) 5.6 % (1.6) % * * 4.5 %

* The statistic is not meaningful or material

The following table represents gross margins by segment for the six-month periods ended June 30, 2024 and 2025:

America Europe Asia/

Pacific Admin &

7 unchanged sentences

North America

• Net sales increased 3.4%, primarily due to incremental sales from the Company's 2024 acquisitions and timing of volume discount estimates that negatively impacted 2024 net sales.

The increases were partly offset by the negative effect of approximately $1.5 million in foreign currency translation.

• Gro ss margin increased to 50.0% from 49.3%, timing of 2024 volume discount estimates, as noted earlier.

• Research, development and engineering expense decreased 11.5% d ue to the reorganization of the Company’s digital solution efforts related expenses, which were previously classified as research and development and engineering during 2024 and are classified as general administrative for the c urrent year.

For 2024, engineering costs related to the Company's digital efforts amounted to $2.5 million and were primarily comprised of personnel costs.

• Selling expense increased 0.7% d ue to the reorganization of the Company’s digital solution efforts related expenses, which were previously classified as selling expense during 2024 and are classified as general administrative for the current yea r.

For 2024, engineering costs related to the Company's digital efforts amounted to $1.5 million and were primarily comprised of personnel costs.

• General and administrative expense increased 15.4% d ue to the reorganization of the Company’s digital solution efforts related expenses which were previously classified as research and development and engineering and selling expense during 2024 and are classified as general administrative for the current yea r.

For 2024, engineering costs related to the Company's digital efforts amounted to $4.0 million and were primarily comprised of personnel costs.

• Income from operations increased by $5.3 million due to the factors discussed above.

• Net sales decreased 5.1%, primarily due to the negative effect of approximately $4.0 million in foreign currency translation.

• Gross margin decreased to 35.2% from 36.5% primarily due to higher factory and overhead, labor, as well as warehouse costs, partly offset by lower material costs, as a percentage of net sales.

• Income from operations increased by $1.0 million to $9.3 million from $8.3 million mainly due to a 8.6% decrease in operating expenses including variable compensation costs.

• For information about the Company's Asia/Pacific segment, please refer to the tables above setting forth changes in our operating results for the three months ended March 31, 2025 and 2024.

Reconciliation of Non-GAAP Financial Measures

(In thousands) (Unaudited)

A reconciliation of Adjusted EBITDA to net income, the most directly comparable GAAP measure, is set forth below.

Three Months Ended March 31,

Net Income $ 77,884 $ 75,430

Provision for income taxes 26,596 22,988

Interest (income) expense, net and other financing costs (1,103) (351)

Depreciation and amortization 19,522 19,189

Other* (1,130) 26

Adjusted EBITDA $ 121,769 $ 117,282

Includes acquisition integration and restructuring related expenses, non-qualified deferred compensation plan adjustments, other & foreign exchange loss net, and net loss or gain on disposal of assets.

• Net sales increased 5.0%, primarily due to incremental sales from the Company's 2024 acquisitions and price increases that took effect in June 2025 .

• Research and development and engineering expense increased 2.6%, primarily due to an increase of $4.7 million in computer and software expenses, net of amounts capitalized, partially offset by a decrease of $3.7 million in professional fees.

• Selling expense increased 5.2%, primarily due to increases of $4.7 million in personnel costs and $1.5 million in variable compensation, partially offset by decreases of $0.9 million in advertising and trade shows expenses and $0.8 million in travel related expenses.

• General and administrative expense increased 10.0%, primarily due to increases of $3.7 million in personnel costs, $3.5 million in variable compensation, and $2.6 million in professional fees, partially offset by a decrease of $2.3 million in computer and software expenses, net of amounts capitalized.

• Income from operations increas ed $10.4 million , du e to higher net sales, partially offset by increases in operating expenses.

• Net sales decreased 1.0%, primarily due to lower sales volumes, partially offset by the positive effect of $3.0 million in foreign currency translation.

• Income from operations increased $4.6 million, primarily due to lower operating expenses.

• For information about the Company's Asia/Pacific segment, please refer to the tables above setting forth changes in our operating results for the six months ended June 30, 2025 and 2024.

Effect of New Accounting Standards

See “Note 1 Basis of Presentation — Accounting Standards Not Yet Adopted ” to the accompanying unaudited interim Condensed Consolidated Financial Statements.

See “Note 1 Basis of Presentation — Accounting Standard Adopted ” and “Note 1 Basis of Presentation — Accounting Standards Not Yet Adopted ” to the accompanying unaudited interim Condensed Consolidated Financial Statements.

Liquidity and Capital Resources

3 unchanged sentences

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

As of March 31, 2025, the Company had no borrowings under the revolving credit facility and had $382.5 million under the term loan facility and has $450.0 million available to borrow under the revolving credit facility.

As of March 31, 2025, our cash and cash equivalents consisted of deposits and money market funds held with established national financial institutions, including $89.5 million that is held in the local currencies of our foreign operations and could be subject to additional taxation if repatriated to the U.S.

As of June 30, 2025, the Company had no borrowings under the revolving credit facility and $376.9 million under the term loan facility, and has $450.0 million available to borrow under the revolving credit facility.

As of June 30, 2025, our cash and cash equivalents consisted of deposits and money market funds held with established national financial institutions, including $82.0 million that is held in the local currencies of our foreign operations and could be subject to additional taxation if repatriated to the U.S.

The Company is maintaining a permanent reinvestment assertion on its foreign earnings relative to remaining cash held outside the United States.

We believe the Company's balances of cash and cash equivalents, cash flows from operating activities, and access to borrowings under our credit facilities are sufficient to satisfy its liquidity requirements and capital needs over the next 12 months and beyond.

The following table shows selected financial information as of March 31, 2025, December 31, 2024 and March 31, 2024, respectively:

As of March 31, As of December 31, As of March 31,

The following table shows selected financial information as of June 30, 2025, December 31, 2024 and June 30, 2024, respectively:

As of June 30, As of December 31, As of June 30,

(in thousands) 2025 2024 2024

1 unchanged sentence

Property, plant and equipment, net 597,536 531,655 459,297

Equity investment, goodwill, and intangible assets

924,809 903,498 860,555

Equity & other investments, goodwill and intangible assets 977,877 903,498 866,238

Non-cash net working capital

The following table presents the significant categories of cash flows used or provided during the three-month periods ended March 31, 2025 and 2024, respectively:

Three Months Ended March 31,

694,858 570,602 615,900

The following table presents the significant categories of cash flows used or provided during the six-month periods ended June 30, 2025 and 2024, respectively:

Six Months Ended June 30,

(in thousands) 2025 2024

1 unchanged sentence

Operating activities $ 132,778 $ 119,086

$ 7,563 $ 7,938

Investing activities (90,568) (95,686)

(50,102) (39,371)

Financing activities (95,617) (93,113)

(42,832) (24,800)

Cash flows from operating activities result primarily from our earnings before non-cash items such as depreciation, amortization, and stock-based compensation, and are also affected by changes in operating assets and liabilities which consist primarily of working capital balances.

Cash flow from operating activities result primarily from our earnings before non-cash items such as depreciation, amortization, and stock-based compensation, and are also affected by changes in operating assets and liabilities which consist primarily of working capital balances.

Our revenues are derived from manufacturing and sales of building construction materials.

1 unchanged sentence

For example, as a result of seasonality our trade accounts receivable are generally lowest at the end of the fourth quarter and increases during the first, second, and third quarters as construction activity ramps in markets we serve.

During the three months ended March 31, 2025, operating activities provided $7.6 million in cash, as a result of $77.9 million from net income plus $28.2 million non-cash expenses such as depreciation and amortization, stock-based compensation, and leases.

During the six months ended June 30, 2025, operating activities provided $132.8 million in cash, as a result of $181.4 million from net income plus $60.1 million non-cash expenses such as depreciation and amortization, deferred compensation, stock-based compensation, and leases.

This amount was partly offset by $108.7 million used for the net change in operating assets and liabilities.

The net change in operating assets and liabilities included increases of $85.4 million in trade accounts receivable and $18.5 million in inventory.

Cash used in investing activities of $50.1 million during the three months ended March 31, 2025, which was primarily used for facility expansion projects and machinery and equipment purchases.

Due to updated forecasts on the timing of the spend and subject to future events and circumstances, capital expenditures are estimated to be in the range of $150.0 million to $170.0 million, which includes approximately $75.0 million remaining for both the Columbus, Ohio facility expansion and the new Gallatin, Tennessee facility.

The net change in operating assets and liabilities included increases of $120.8 million in trade accounts receivable, partly offset by a decrease of $26.1 million in inventory.

Cash flow used in investing activities of $90.6 million during the six months ended June 30, 2025 was primarily used for facility expansion projects as well as machinery and equipment purchases.

Due to updated forecasts on the timing of the spend and subject to future events and circumstances, capital expenditures are estimated to be in the range of $140.0 million and $160.0, which includes approximately $70.0 million to $75.0 million remaining for both the Columbus, Ohio facility expansion and the new Gallatin, Tennessee facility.

The remaining capital expenditures will be primarily focused on purchases of new equipment to support increased productivity and efficiencies, enhancements to our existing facilities to expand our manufacturing footprint in-line with increasing customer needs, as well as investments for adjacencies and key growth initiatives .

Cash used in financing activities of $42.8 million during the three months ended March 31, 2025 consisted primarily of $25.0 million in share repurchases, $11.7 million used to pay dividends to our stockholders, and $6.8 million used for debt repayment.

On May 6, 2025, the Company's Board of Directors (the “Board”) declared a quarterly cash dividend of $0.29 per share payable on July 24, 2025, to the Company's stockholders of record on July 3, 2025.

Since the beginning of 2022 through May 7, 2025, we have returned $401.0 million to stockholders, which includes the repurchase of over 1.9 million shares of the Company's common stock, representing approximately 4.3% of the outstanding shares of the Company's common stock at the start of 2022.

Cash flow used in financing activities of $95.6 million during the six months ended June 30, 2025 consisted primarily of $60.0 million in stock repurchases and $23.5 million used to pay dividends to our stockholders.

On July 24, 2025, the Company's Board of Directors (the “Board”) declared a quarterly cash dividend of $0.29 per share payable on October 23, 2025, to the Company's stockholders of record on October 2, 2025.

Since the beginning of 2022 through the period ended June 30, 2025 , we have returned $447.7 million to stockholders, which represents 51.0% of our free cash flow from operations during the same period, and over the same period the Company has repurchased over two million shares of the Company's common stock, which represents approximately 4.8% of the outstanding shares of the Company's common stock at the start of 2022.

Reconciliation of Non-GAAP Financial Measures

(In thousands) (Unaudited)

A reconciliation of Adjusted EBITDA to net income, the most directly comparable GAAP measure, is set forth below.

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

Net Income $ 103,541 $ 97,831 $ 181,425 $ 173,258

Provision for income taxes 35,914 34,859 62,510 57,847

Interest (income) expense, net and other financing costs (895) (2,092) (1,998) (2,443)

Depreciation and amortization 20,995 19,370 40,517 38,559

Other* 333 2,603 (804) 2,629

Adjusted EBITDA $ 159,888 $ 152,571 $ 281,650 $ 269,850

Off-Balance Sheet Arrangements

We did not have any off-balance sheet arrangements as of March 31, 2025.

We did not have any off-balance sheet arrangements as of June 30, 2025.

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 2. Management’s Discussion and Analysis