Simpson Manufacturing Co., Inc. Q1 FY2026 earnings call

• Focused on being partner of choice, innovation leader, and strengthening values-based culture despite market challenges. • Celebrating 70th year, highlighting employees with long-term dedication. • North America net sales growth driven by pricing actions and foreign exchange, partially offset by volume decline. • Component manufacturer business strong with double-digit volume growth from new customer wins. • OEM business strong with double-digit volume growth supported by prefabrication trends. • Residential business had modest volume growth with renewed agreements and new products. • Commercial business had mixed activity but differentiated capabilities. • National retail business pressured but progress made through bay optimization and product innovation. • Europe net sales up with foreign currency help, but local currency down with volume decline offset by price increases. • Gross margin impacted by material, factory, etc. costs, but 2025 price increases helped offset. • Operating expenses improved with lower personnel costs and strategic cost savings initiatives.

Net sales were $588 million, up 9.1% from prior year. North America net sales $461.9 million, up 9.8%. Europe net sales $121 million, up 6.3%. Consolidated gross margin declined 130 basis points to 45.2%. Operating margin 19.5%, up 50 basis points. Adjusted EBITDA $139.4 million, up 14.1%. Component manufacturer business had double-digit volume growth. OEM business had double-digit volume growth. Residential business volume increased modestly. Commercial business volumes down slightly. National retail business had low single-digit decline in shipments. Europe net sales up due to foreign currency translation, but local currency down with volume decline offset by price increases. Gross margin in North America impacted by tariffs, factory overhead, etc. Europe gross margin increased due to higher pricing but offset by factory and tooling costs.

• Full year 2026 consolidated operating margin expected in range of 19.5% to 20.5%. • U.S. housing starts expected to be down in low single-digit range. • Lower overall gross margin due to tariffs and increased depreciation. • Higher realization of 2025 price increases annualized to $130 million. • Expected $3 to $5 million of footprint optimization costs in Europe. • Projected $10 to $12 million benefit on sale of vacant land in back half of 2026. • Effective tax rate estimated in range of 25 to 26%. • Capital expenditures outlook in range of $75 to $85 million. • Do not anticipate sustaining same level of revenue growth through remainder of 2026.

Q: Daniel Moore with CJS Securities asked about impact of Iran war and oil prices on North America demand cadence and pricing cadence.

A: Market feedback from firms and customers shows low single-digit market growth expected, and in North America no additional price increases beyond two announced last year with focus on maintaining gross margins.

Q: Trey Grooms with Stevens asked about end markets and geographic performance.

A: National retail business flat to up 1%, commercial and OEM business low single-digit, and Florida and California have variability in housing starts with some projects in California but not yet reflected in sales.

Q: Kurt Yinger with DA Davidson asked about pricing difference between $100 million and $130 million, impact of tariffs and freight, and national retail performance.

A: Annualized pricing increased to $130 million from $100 million due to Europe surcharges and North America product mix. 232 tariffs have little impact, freight costs monitored. National retail has seen inventory shifts but working on merchandising and product line growth.

Q: Tim Boyes with Baird asked about SG&A cost savings realization and component manufacturing business.

A: SG&A headcount down 9%, first quarter SG&A up with FX and one-time costs, but projected to reach $30 million annualized savings. Component manufacturing business has double-digit growth from new customers.

Q: Andrew Carter with CFO asked about residential volume performance and Europe market.

A: Residential volume up slightly with market guidance down to low single digits, front half comps tough. Europe market expected flat to low single digits with focus on picking up new applications and shelf space