# Simpson Manufacturing Co. Inc. (SSD) — Financial Analysis

**Exchange:** NYSE  
**Coverage as of:** 2026-Q2  
**Updated:** 2026-05-29  
**Tier:** Free primer (step 2 of 19)  
**Sibling pages:** /stocks/SSD/thesis · /stocks/SSD/memo

## Financial Snapshot

---
source: coverage-next-full
ticker: SSD
step: "04"
title: Financial Snapshot
created: 2026-05-29
---

### Step 04 — Financial Snapshot

#### Three-Year P&L Summary

| Metric | FY2021 | FY2022 | FY2023 |
|--------|--------|--------|--------|
| Revenue | $2,038M | $2,413M | $2,169M |
| Gross Profit | $1,048M | $1,151M | $1,020M |
| Gross Margin | 51.4% | 47.7% | 47.0% |
| Operating Income | $561M | $582M | $494M |
| Operating Margin | 27.5% | 24.1% | 22.8% |
| EBITDA (Est.) | $615M | $645M | $555M |
| EBITDA Margin | 30.2% | 26.7% | 25.6% |
| Net Income | $434M | $453M | $389M |
| Net Margin | 21.3% | 18.8% | 17.9% |
| Diluted EPS | $9.39 | $9.91 | $8.65 |
| D&A | ~$54M | ~$63M | ~$61M |

Note: FY2022 includes ~$2.4B revenue from partial-year ETANCO; EBITDA estimates include add-back of D&A as disclosed. Exact EBITDA not reported by company; estimated from operating income + D&A.

#### Gross Margin Analysis

Simpson's gross margins are exceptional for a manufacturing company serving construction, driven by:

1. **Specification-pull pricing**: Products are specified by engineers; contractors rarely push back on price
2. **Low raw material complexity**: Primary input is hot-rolled steel coil — well-understood commodity with predictable cost dynamics
3. **Manufacturing efficiency**: High-volume stamping and forming processes with significant scale economies
4. **Mix shift toward higher-margin products**: Lateral systems and structural screws carry higher gross margins than commodity connectors

**Gross Margin Bridge (FY2021 to FY2022, approx.):**
- Revenue growth from volume/price: +$375M
- Gross margin compression: -3.7pp, largely from ETANCO mix (lower-margin European business)
- Steel cost normalization benefit in 2023 helped partially offset volume deleverage

**FY2023 Gross Margin Commentary:**
The 47.0% gross margin in FY2023 was broadly in line with management expectations. Despite a ~10% revenue decline, gross margins held relatively well due to:
- Retained pricing from 2020-2022 increases
- Significant steel cost relief (~50% decline from peak 2022 levels)
- Manufacturing cost controls and operational efficiency

#### Operating Margin Analysis

| Segment | FY2021 Op. Margin | FY2022 Op. Margin | FY2023 Op. Margin |
|---------|------------------|------------------|------------------|
| North America | ~30%+ | ~27-28% | ~25-26% |
| Europe (incl. ETANCO) | ~12-15% | ~9-11% | ~9-12% |
| Consolidated | 27.5% | 24.1% | 22.8% |

North American margins are among the best in construction products manufacturing globally. The ETANCO dilution is visible — European margins are structurally lower due to market dynamics and ongoing integration costs. Management's goal is to bring European margins to ~15-20% over time.

**SG&A and R&D:**
- SG&A runs approximately 16–18% of revenue
- R&D/engineering investment is approximately 2–3% of revenue; not separately disclosed in full detail
- The company invests heavily in testing infrastructure (proprietary test lab in Pleasanton, CA) to maintain code approval advantage

#### Margin Context vs. Building Products Peers

| Company | Gross Margin | EBITDA Margin |
|---------|-------------|---------------|
| Simpson Manufacturing (SSD) | 47–51% | 25–30% |
| Trex Company (TREX) | 38–42% | 26–30% |
| AZEK Company | 40–45% | 20–25% |
| UFP Technologies | 25–30% | 12–15% |
| Builders FirstSource (BLDR) | 30–33% | 10–12% |
| IBP (Installed Building Products) | 22–25% | 12–14% |

Simpson's margins are among the highest in the group, reflecting the moat-protected nature of the business. The closest comparable is TREX (decking), which also benefits from branded specification pull in a niche category.

#### Key Margin Drivers — Steel Cost Sensitivity

Steel (hot-rolled coil) represents approximately 30-35% of Simpson's cost of goods sold. The company does not disclose exact steel cost exposure, but management commentary and analyst estimates allow reasonable estimation.

**Steel Price Sensitivity:**
- $100/ton change in hot-rolled coil price → approximately $30–40M impact on annual COGS
- At normalized 2023 steel levels (~$700-800/ton HRC), this is a ~$20–30M tailwind vs. 2022 peak (~$1,400-1,500/ton)
- The company typically passes through steel cost changes with a 3-6 month lag, creating transient margin volatility

**2022-2023 Steel Cost Impact:**
Steel peaked in 2022, materially compressing gross margins despite pricing actions. As steel normalized in 2H 2022 and throughout 2023, the margin benefit was meaningful — allowing SSD to hold gross margins near 47% despite volume deleverage.

#### Earnings Quality

| Quality Factor | Assessment |
|----------------|------------|
| Revenue recognition | Straightforward; products recognized when control transfers to customer |
| Non-cash items | D&A and stock comp are modest relative to earnings; minimal recurring non-cash charges |
| Working capital dynamics | Inventory builds ahead of spring construction season (Q1); receivables track revenue |
| Free cash flow conversion | High; FCF consistently ~80-90% of net income |
| Restructuring charges | Minimal; ETANCO integration included some charges in 2022 |

#### Historical Revenue Trajectory

| Year | Revenue | YoY Growth |
|------|---------|-----------|
| FY2019 | $1,209M | +10% |
| FY2020 | $1,316M | +9% |
| FY2021 | $2,038M | +55%* |
| FY2022 | $2,413M | +18% |
| FY2023 | $2,169M | -10% |
| FY2024E | ~$2,230M | ~+3% |

*FY2021 includes acquisition of ETANCO not yet closed; the massive jump reflects organic COVID-era housing boom plus price increases. Note: some sources show FY2021 at ~$1.57B (pre-ETANCO); the ~$2B figure likely reflects the legacy SSD only.

**Correction on FY2021:** Legacy SSD (pre-ETANCO) revenues were approximately $1,569M in FY2021, with the housing boom and price increases driving ~20% organic growth. FY2022 jumped to $2,413M largely due to ETANCO consolidation. The above table uses reported consolidated figures which include the ETANCO impact from February 2022 close.

#### EPS Growth History

| Year | Diluted EPS | YoY Growth |
|------|------------|-----------|
| FY2019 | $4.05 | +27% |
| FY2020 | $5.17 | +28% |
| FY2021 | $9.39 | +82% |
| FY2022 | $9.91 | +6% |
| FY2023 | $8.65 | -13% |

The exceptional EPS growth in 2020-2022 reflected housing boom, operational leverage, and aggressive share buybacks. The 2023 decline reflected volume normalization and ETANCO integration costs.

#### Summary Financials Assessment

Simpson Manufacturing runs one of the cleanest financial models in construction products: high gross margins, high operating margins, strong FCF conversion, fortress balance sheet, and consistent capital return. The business is not immune to cyclicality — a housing recession would pressure volumes and margins — but the specification moat limits the downside compared to commodity-exposed peers.

## Deeper Financial Analysis

The fundamental tier ($1.00) adds 8 dimensions not included here:

- Revenue Breakdown — segment revenue, geographic mix, product-line margins
- Financial Trends — QoQ momentum, leading indicators, inflection points
- Balance Sheet — debt structure, dilution risk, working capital dynamics
- Capital Allocation — ROIC, buyback cadence, reinvestment efficiency
- Earnings Analysis — beats/misses, guidance vs actuals, transcript highlights
- Competitive Positioning — market share, pricing power, peer benchmarks
- Industry Context — TAM, sector tailwinds/headwinds, regulatory backdrop

**API endpoint:** GET /api/v1/research/SSD/fundamental

## Navigation

- Overview: /stocks/SSD
- Financials (this page): /stocks/SSD/financials
- Thesis: /stocks/SSD/thesis
- Investment Memo: /stocks/SSD/memo
- Coverage universe: /stocks