Growth
Founded on Service
SIMPSON MANUFACTURING CO., INC. | 2021 ANNUAL REPORT
To our stockholders, customers and employees
Growth Founded on Service
Increasing Stockholder Value
2021 marked Simpson’s 65th year of operations. We are
extremely pleased with our financial and operational performance
over the past year, despite a challenging macroeconomic
landscape for Simpson and our customers. Challenges included
ongoing global supply chain constraints, limited steel availability
and a tight labor market. Nevertheless, we continued to deliver on
the key elements of our business model by providing customers
with our trusted product solutions, typically within 48 hours or less.
We are proud to continue to operate our business based on
the same principles and values set by our founder, Barclay
Simpson, 65 years ago. Accordingly, we remain dedicated to
customer service and our no-equal employees — both are core
to our business and have greatly supported Simpson’s growth
throughout our history.
Financial and Operational Execution
We had a very strong 2021, with net sales of approximately $1.57
billion, up 24.1% from $1.27 billion in 2020. We experienced
solid business momentum, with sales growth supported by the
implementation of multiple product price increases to offset rising
material costs. These factors, coupled with continued operating
efficiencies, resulted in strong earnings of $6.12 per diluted share,
an increase of 43.3% year-over-year.
In March of 2021 we unveiled new, five-year Company Ambitions
for Simpson:
1. Strengthen our values-based culture;
2. Be the partner of choice;
3. Be an innovative leader in the markets in which we operate;
4. Continue above-market growth relative to US housing starts;
5. Expand our operating income margin to remain within the top
quartile of proxy peers; and
6. Expand return on invested capital within the top quartile of
proxy peers.
In addition, we announced five key growth markets, which
we believe will support the achievement of our new Company
Ambitions. Our growth areas focus on expansion into the
OEM, repair and remodel/do-it-yourself (R&R/DIY), mass timber,
concrete, and structural steel markets. We also aspire to be the
leader in engineered load-rated construction fastening solutions
and believe there is a broad product opportunity within the
OEM, R&R/DIY and mass timber markets. Furthermore, we are
working to be a stronger leader in building technology solutions
to help our customers run their businesses more efficiently. At
present, we have existing products, testing results, distribution,
and manufacturing capabilities for all of our growth initiatives.
In December, we were very pleased to announce Simpson’s
binding offer to acquire the ETANCO Group, a leading designer,
manufacturer and distributor of fixing and fastening solutions for
the building construction market throughout Europe. ETANCO’s
engineered technical solutions and customer-centric approach
align with Simpson’s values and business model, as well as our
key growth initiatives focused on expanding into commercial
markets and building a leadership position in fastener solutions.
We expect the acquisition to close on April 1, 2022.
Our strong cash flows from operations generated $151.3 million
in 2021 to support the payment of $42.4 million in quarterly
cash dividends and the repurchase of $24.1 million of our
common stock, reflecting our Board and management’s ongoing
confidence in our business and strategy. Cash flows from
operations decreased $56.3 million, or 27.1% year-over-year,
due primarily to the change in the working capital component
of inventory, reflecting our commitment to stocking material and
products to support our customers, net of the other components
of cash flows from operations. Over the past three years, we’ve
paid $122.2 million in dividends and repurchased $161.1 million
of our common stock, resulting in approximately 62% of our free
cash flow returned to our stockholders, exceeding our capital
return goal of 50%. Through our solid operational execution
and this return of cash to stockholders, we achieved a return
on invested capital(1) of 24.6% for the 2021 fiscal year.
Servicing a Sustainable Future
Our strong performance in 2021 was made possible by the
unwavering commitment of all our employees. The health, safety
and well-being of our employees is a top priority, and we strive
to ensure our business culture and practices promote diversity
and inclusion and foster a rewarding work environment. We also
remain committed to operating in a safe and environmentally
responsible manner to protect our employees and help our
customers build a better world. As part of our commitment to
better communicate our sustainability, environmental and social
responsibility efforts, we are very pleased to announce the recent
publication of enhanced environmental, social and governance
metrics for Simpson, showcasing additional transparency and
progress against our goal of continuous improvement.
As we embark on a new year, we remain focused on executing
against our five-year Company Ambitions and key growth
initiatives. We’d like to acknowledge the dedication of our
employees, who are working hard every day to achieve
these goals.
On behalf of everyone at Simpson Manufacturing Co., Inc.,
we thank all our loyal customers, employees, suppliers and
stockholders for your ongoing support.
Sincerely,
Karen Colonias
Chief Executive Officer
James Andrasick
Non-Executive Chairman of the Board of Directors
(1) When referred to above, the company’s return on invested capital (“ROIC”) for a fiscal year is calculated based on (i) the net income of that year, as presented in the company’s
consolidated statements of operations prepared pursuant to generally accepted accounting principles in the US (“GAAP”), as divided by (ii) the average of the sum of total
stockholders’ equity and total long-term interest-bearing liabilities (which for the company are long-term capital lease obligations) at the beginning of and at the end of such
year, as presented in the company’s consolidated balance sheets prepared pursuant to GAAP for that applicable year. That is to say, the company’s ROIC, a ratio or statistical
measure, is calculated using exclusively financial measures presented in accordance with GAAP.
2 |3 |3 |3 | Financial Highlights
2021 Capital Allocation — $126,181
2021
2020
% Change
Net Sales
$1,573,217
$1,267,945
24.1%
Dividends
$42,415
33%
35%
Capital
Expenditure
$43,738
Income from Operations
$367,793
$252,363
Net Income
$266,447
$187,000
Diluted Earnings per Share
$6.12
$4.27
45.7%
42.5%
43.3%
Total Assets
$1,484,125
$1,232,569
20.4%
Stockholders’ Equity
$1,183,998
$980,943
Common Shares Outstanding
43,217
43,326
Number of Employees
3,971
3,562
20.7%
(0.3%)
11.5%
Dollars in thousands except per-share amounts.
19%
13%
Mergers and
Acqusitions
$15,903
Share
Repurchases
$24,125
Dollars in thousands.
Earnings per Share
Dividends per Share
Net Sales
Stockholders’ Equity
7.00
6.00
5.00
4.00
3.00
2.00
1.00
0.00
$6.12
$4.27
$2.72
$2.98
$1.94
2017
2018
2019
2020
2021
1.20
1.00
0.80
0.60
0.40
0.20
0.00
2017
2018
2019
2020
2021
1,800,000
1,600,000
1,400,000
1,200,000
1,000,000
800,000
600,000
400,000
200,000
0
2017
2018
2019
2020
2021
4 |5 | 65 Years of Service,
Innovation and Growth
In 2021, our company celebrated 65 years
in business, since the day our founder
Barclay Simpson created his first joist hanger
in response to a neighbor’s request. In the
ensuing decades, Simpson Strong-Tie has
been defined by the same spirit of service,
ingenuity and entrepreneurship.
The fundamental values Barc set forth in
his Nine Principles of Business — values
of long-term thinking, risk-taking innovation,
meticulous attention to quality, a people-first
company culture and uncompromising
customer service — have continued to inspire
how we approach every business decision,
every product solution we design, and every
personal interaction.
Our passion for service has been critical to
our success from the very start. By listening
to our customers and industry associates,
we’re able to identify consumer needs, create
new building solutions, stay ahead of our
competition, and strengthen our business and
industry relationships.
Guided by these values of service and discovery,
we’re always building the business along three
main avenues of growth:
• Solidifying our legacy leadership in the wood
construction and residential building markets;
• Expanding our reach into related areas of the
industry, such as structural steel, mass timber,
OEM and modular building; and
• Fortifying our market position by means of
strategic acquisitions and industry alliances.
It’s a recipe that keeps the business vital and
dynamic by always adding new ingredients to
how we serve the customer’s needs.
6 |7 | Growing from a single joist hanger to the vast
network of resources, training, expertise and
products we now provide, service remains a
core tenet of our brand promise. In a year
marked by severe supply chain shortages,
Simpson was one of a handful of suppliers to
keep up with customer demand and maintain
product availability.
“Relentless Customer Focus” is the first of our
nine company values, and we’re continually
looking for ways to help our customers become
more knowledgeable, efficient and successful. As
Barc explained, “No matter what your position in
the company, it’s vital that you keep the customers
and users in mind whether you have direct
contact or not. What do they need from you?
How can you improve their lives?” In other words,
show that you care: Customers won’t stay with
you unless you pay attention to their needs and
they can see that you have their best interests
always in mind.
Despite global material and labor shortages,
strong supply-side relationships enabled us
to continue manufacturing Simpson products
reliably. In turn, our strategically placed facilities
and network of distributors kept regional and
national retailers fully stocked with inventory.
This helped create a competitive advantage for
our customers and their end users.
Simpson continues to provide industry-leading
design, installation, training and technical
support online, over the phone and in person.
We’re also enhancing our ecommerce and
direct-sales experience, making it even easier
for customers to do business with us.
Our Service Advantage
8 |9 | Strengthening Our
Legacy Business
As an engineering and manufacturing
company dedicated to service, we know that
the most reliable business growth is also the
most organic — the kind that arises naturally
from leveraging and building on existing
strengths and industry relationships.
Every year, we concentrate much of our effort
on finding better ways to serve customer needs
in the markets where we’ve already established
our value as a solutions leader, namely single-
and multifamily residential and light-frame
commercial construction.
For that reason, we continually rely on
the ingenuity of our engineers, product
managers and sales teams to devise innovative
additions or improvements to our primary
product offerings — connectors, fasteners
and anchors — in the interests of enhancing
structural strength, builder efficiency, ease
of installation and overall cost savings.
Along the same lines, we continue to expand
our offerings in the area of home improvement
products and technology.
Our suite of outdoor design software and
ongoing extensions to our line of decorative
structural hardware help builders, contractors
and homeowners enhance living spaces with
structures that are equally strong and beautiful.
Similarly, we’re broadening our fastener line with
versatile, high-performance solutions that make
repair and home improvement jobs quicker and
easier for both contractors and do-it-yourselfers.
We’re also taking a market segment approach to
sales, so our customers receive total, integrated
product and software solutions that enhance and
streamline their business.
10 |11 | Because nothing stands still in business,
we at Simpson Strong-Tie know it’s not enough
to excel in just one or two market areas.
To widen our blueprint, we’re well positioned
to seize new opportunities for diversifying
our business.
Using our engineering expertise to create the
broadest possible solutions for our customers
and market segments has naturally led us to
grow into areas of the industry beyond traditional
light-frame wood or residential construction.
In commercial construction, we’ve developed
moment connections for structural steel framing,
along with software integration or plugins for
use with other popular design tools in the steel
construction space.
We’re growing our presence in the
infrastructure construction market with flexible,
high-performance anchoring adhesives and a
diversified line of screw anchors, along with
carbon-fiber systems for concrete repair,
protection and strengthening.
To serve the original equipment manufacturer
(OEM) and offsite construction markets, we offer
an expanding variety of structural connectors
and fasteners for modular building, mass timber
construction and other OEM segments such
as crating, fixed seating, trailer flooring and
warehouse racking.
In the repair and remodeling segment, we’re
working with national retailers to expand our
product offering, including hardware specifically
targeted for do-it-yourselfers.
Finally, we’re increasing our offering of building
technology, with software for the production
builder, the engineer, the truss designer and the
lumber and building materials (LBM) dealer, as
well as design software for outdoor living projects.
By broadening our product solutions and expertise
into adjacent markets, we continue to boost our
value proposition, capture additional market share
and deliver greater shareholder value.
Beyond the Blueprint
12 |13 | Expanding Our Boundaries
Success requires teamwork. At Simpson,
collaboration extends outside company walls.
Working with trusted organizations allows
us to strengthen industry partnerships,
expand strategic relationships and reach
more customers.
New business acquisitions and alliances are
powering Simpson in key market sectors.
In 2021, we invested in a truss equipment
manufacturer and struck an alliance with
a concrete and masonry installation firm.
These developments broadened our product
and service offering while deepening
market penetration.
To help ensure a steady supply of available
inventory, we’re expanding our sales and
distribution network with national retail
chains and lumberyards. We’re also opening
doors to seamless collaboration across
the industry with our open-platform
software solutions that help simplify
and streamline operations.
Simpson continues to explore acquisitions
and pursue growth opportunities, such
as investing in venture capital and software
licensing, so we can enter new markets,
maintain or gain a competitive edge, and
fill remaining gaps in residential and
light-frame commercial construction.
We also are greatly expanding our product
portfolio and market presence in Europe to
support our long-term growth strategy.
14 |15 | Products with Purpose
Our mission at Simpson Strong-Tie is to
provide solutions that help people build safer,
stronger structures. Always keen to improve
our products and service, we encourage
thoughtful innovation across the company.
Barc said it best. “Great companies are built
on creative ideas from talented people.”
Simpson employees are always free to explore
new approaches that can benefit our
customers, strengthen our market leadership
and further the construction industry
as a whole.
Throughout 2021, we continued to develop,
test and deliver product and technology
innovations for use in every area of the
construction industry — from wood
framing, modular building and mass timber
to concrete, infrastructure, steel framing
and beyond.
17 |16 |
Investing in Our People
At Simpson, we don’t take our company
success for granted. We know that sustained
innovation and business growth aren’t just
accidents and don’t happen all on their own.
They take concerted human effort — having
the right people working together on the
right projects.
Knowing the value of each individual’s
contribution is why we’re so careful in fostering
a culture of purpose and belonging. It’s our
diverse blend of professional skills, experiences
and unique personal perspectives that drives
our continued progress.
Barc saw this from the beginning. Central to
his Nine Principles of Business is number five,
Everybody Matters. As he insisted, “There are
no big shots, no [assigned] parking places. It’s
always been first names. Nobody’s Mr. or Ms.
You’re Joe or Carol or Pete or Barc.”
Values of diversity, equity and inclusion have
been key to our company culture and critical
to our success. We’re always looking for new
ways to attract the best, most diverse talent for
roles and positions throughout the company.
And we do everything we can to maintain an
environment of open collaboration where all
employees feel encouraged to consider, share
and discuss solutions and alternatives.
To help our employees grow along with the
company, we also believe in hiring from
within whenever the fit seems right. So we’re
always refining our employee and leadership
development resources to invite our people to
explore and expand their professional aptitudes
and personal strengths.
As a company, we know our strength is
indivisible from the success and satisfaction
of our people.
18 |19 | “We’re all connected in some way and
are all part of a greater community.”
Barc’s words set the tone for one of our
most cherished company values — Give Back.
Community involvement is a natural
outgrowth of our commitment to service.
In that spirit, we’re proud to donate
time, money and technical expertise to
nonprofit organizations.
In support of Habitat for Humanity, Simpson
works with Habitat Strong affiliates in 16
geographic areas, guiding them on how to
build safer, stronger homes. We also support
Habitat’s Jimmy and Rosalynn Carter Work
Project to repair and build homes affected by
natural disasters.
Simpson makes monetary donations to the
American Red Cross Disaster Relief Fund to help
communities rebuild after natural disasters.
In addition, our engineers often donate time
to assess structural damage and help improve
building safety.
In September 2021, Simpson Strong-Tie and the
Building Talent Foundation (BTF) announced a
strategic alliance to promote the growth of the
residential construction workforce in the United
States. Simpson is donating $600,000 to BTF
over the next three years, connecting young and
underserved people to skilled trades training and
career opportunities.
In addition, our annual Do What You Can Day
encourages and supports all company facilities
and employees to participate in a voluntary
charitable activity. Carrying forward Barc’s legacy
of philanthropy, we Give Back to the communities
where Simpson employees live and work, around
the world.
Building Community
20 |21 | Office
Street Address | 5956 W. Las Positas Boulevard, Pleasanton, CA 94588, USA | (800) 925-5099
Mailing Address | P.O. Box 10789, Pleasanton, CA 94588
Current Officers
Karen Colonias
Chief Executive Officer
Brian J. Magstadt
Chief Financial Officer and Treasurer
Michael L. Olosky
President and Chief Operating Officer
Roger Dankel
President, North American Sales
Simpson Strong-Tie Company Inc.
Kevin Swartzendruber
Senior Vice President, Finance
Current Board of Directors
James S. Andrasick(1)(2)(3)(4)
Chairman (retired)
Matson Navigation
Jennifer A. Chatman(2)(4)
Paul J. Cortese
Distinguished Professor of Management
Haas School of Business,
University of California, Berkeley
Karen Colonias(3)
Chief Executive Officer
Gary M. Cusumano(2)(3)
Chairman (retired)
The Newhall Land and Farming Company
Philip E. Donaldson(1) (3)
Executive Vice President and Chief Financial Officer
Andersen Corporation
Celeste Volz Ford(1)(3)
Board Chair
Stellar Solutions, Inc.
Kenneth D. Knight (1)(4)
Chief Operating Officer
Invitae Corporation
(Appointed to the company’s
Board of Directors June 2021)
Robin Greenway MacGillivray (2)(4)
Senior Vice President (retired)
One AT&T Integration – AT&T
Annual Meeting
The annual meeting of stockholders will take place at 2:00 p.m., Pacific
Daylight Time, on Wednesday, May 4, 2022, virtually via live webcast at
www.virtualshareholdermeeting.com/SSD2022.
Stock Listing
Simpson Manufacturing Co., Inc.’s (the “Company’s”) common stock is
traded on the New York Stock Exchange under the ticker “SSD.”
Quarterly Stock Data
The table below shows the per-share closing price range of the
Company’s common stock for the last two years as quoted on the
New York Stock Exchange.
2021
2020
High
Low
Close
High
Low
Close
Q4 $138.59 $105.04 $137.90
$97.37
$87.38
$93.45
Q3 $114.97 $104.83 $106.97 $103.35
$79.11
$97.16
Q2 $118.46 $104.52 $110.44
$93.54
$56.58
$84.36
Q1 $109.27
$92.00
$103.73
$86.99
$49.13
$61.98
Form 10-K
The Company’s annual report on Form 10-K (which is available in a
separate report) and its quarterly and current reports on Forms 10-Q
and 8-K are filed with the Securities and Exchange Commission and
are available upon request. These reports can also be accessed on the
Company’s website at ir.simpsonmfg.com.
Investor Relations
ADDO Investor Relations
Investor.relations@strongtie.com
(310) 829-5400
For an investor information package, please call (925) 560-9097.
Transfer Agent & Registrar
Computershare Trust Company N.A.
P.O. Box 30170, College Station, Texas 77842
For stockholder inquiries, please call (877) 282-1168.
computershare.com
Independent Registered Public Accountants
Grant Thornton LLP
101 California Street, Suite 2700, San Francisco, CA 94111
(1) Member of Audit and Finance Committee
(2) Member of Compensation and Leadership Development Committee
(3) Member of Corporate Strategy and Acquisitions Committee
(4) Member of Nominating and Governance Committee
22 | Simpson Manufacturing Co., Inc.
5956 W. Las Positas Boulevard
Pleasanton, CA 94588
Tel: (800) 925-5099 Fax: (925) 847-1608
ir.simpsonmfg.com
© 2022 Simpson Manufacturing Co., Inc. P65139_AR21
24 |24 |