Simpson Manufacturing third-quarter net income rises to $109.1 million, updates 2026 outlook

Simpson Manufacturing Co., Inc. (SSD) reported third-quarter net income of $109.1 million, or $2.68 per diluted share, on Monday, as net sales rose 2.3% to $638.1 million. The results and an updated 2026 outlook were disclosed in a press release attached to a regulatory filing.

Here's how the company did:

• Net sales: $638.1 million vs. $623.5 million a year earlier
• Income from operations: $141.0 million vs. $140.7 million a year earlier
• Net income: $109.1 million vs. $107.4 million a year earlier
• Net income per diluted share: $2.68 vs. $2.58 a year earlier
• Adjusted EBITDA: $167.2 million vs. $155.7 million a year earlier

For the first nine months of 2026, net sales rose 5.8% to $1.90 billion from $1.79 billion a year earlier. Diluted earnings per share were $7.90, up 14.7% from $6.89.

Gross margin was 45.7%, down from 46.1% a year earlier. Operating margin was 22.1%, compared with 22.6%.

“Our third quarter performance reflects the resilience of our business and continued progress against our key growth initiatives despite a challenging market environment,” President and Chief Executive Officer Mike Olosky said.

Olosky said the company is “navigating a more challenging near-term operating environment characterized by housing affordability pressures, higher steel costs and tighter steel availability.” He said the company expects to take additional pricing actions in 2027 to address the evolving cost environment.

Olosky said net sales growth was supported by pricing actions, while global volumes were relatively flat.

North America net sales rose 3.8% to $502.0 million from $483.6 million, primarily on price increases and higher unit sales volumes. Segment operating income rose 9.5% to $137.0 million from $125.2 million, and the segment's operating margin was 27.3%.

Europe net sales fell 3.4% to $129.9 million from $134.4 million, due to lower unit sales volumes partly offset by unit price increases. Currency translation reduced sales by about $1.6 million.

Europe operating income fell 5.0% to $15.3 million from $16.1 million. Gross margin in the segment fell to 36.1% from 37.9%.

Total operating expenses fell 6.3% to $150.5 million from $160.7 million. The company reclassified certain software amortization costs and quality assurance costs from general and administrative expense to cost of sales, and recast prior-period results. The reclassification moved $1.6 million for the quarter and $4.6 million for the nine months, and it did not affect total income from operations.

The sale of unimproved land in Stockton, California, was originally scheduled to close in the third quarter. It closed in the fourth quarter instead, so the $11.0 million net gain on disposal will be recognized in the fourth quarter rather than the third.

Cash and cash equivalents totaled $491.3 million as of Sept. 30. Total debt outstanding was $308.0 million under the company's $900 million credit facility.

Cash flow from operating activities was $173.3 million, up $3.1 million from $170.2 million, mainly on higher net income and changes in working capital.

During the quarter, the company repurchased 352,346 shares of common stock in the open market at an average price of $188.25 per share, for a total of $66.3 million.

The board approved a new $1.0 billion stock repurchase authorization effective Oct. 22, with no expiration date. It supersedes the prior $200.0 million authorization, under which the company had repurchased about $165 million year to date through Sept. 30.

“The significant increase in our share repurchase authorization reflects the Board’s continued confidence in Simpson’s long-term strategy, strong financial position and cash flow generation,” Olosky said in a separate press release.

The board also declared a quarterly cash dividend of $0.30 per share on Oct. 22, up from $0.29 a year earlier. The dividend totals about $12.1 million and is payable Jan. 28, 2027, to holders of record on Jan. 7, 2027.

The company updated its 2026 outlook to reflect third-quarter results and its views on demand trends, cost of sales and operating expenses. For the full fiscal year ending Dec. 31, 2026, consolidated operating margin is projected at 20.0% to 20.5%. That range includes a projected $11.0 million gain on the sale of vacant land.

The effective tax rate is projected at 25.0% to 26.0%, assuming no tax law changes. Capital expenditures are projected at $80.0 million to $90.0 million.

The filing does not restate the prior 2026 outlook figures, so the size of the change in guidance cannot be measured from the filing.

Adjusted EBITDA, or earnings before interest, taxes, depreciation and amortization adjusted for certain items, rose 7.4% to $167.2 million. The company excludes items such as acquisition, integration and restructuring costs, severance costs, and gains or losses on disposal of assets.

Depreciation and amortization was $26.0 million, up from $23.0 million a year earlier.