การแถลงผลประกอบการไตรมาส 3 ปี 2026 ของ Simpson Manufacturing (SSD): ต้นทุนเหล็กกดดันอัตรากำไร

ไฮไลท์สำคัญ

• ยอดขายสุทธิประจำไตรมาส 3/2026 เพิ่มขึ้น 2.3% เมื่อเทียบรายปี สู่ระดับ 638.1 ล้านดอลลาร์ โดยปัจจัยด้านราคาช่วยหนุน 2.5 จุดเปอร์เซ็นต์ ขณะที่ปริมาณการขายทั่วโลกค่อนข้างทรงตัว
• EBITDA ปรับปรุงแล้วเพิ่มขึ้น 7.4% สู่ระดับ 167.2 ล้านดอลลาร์ โดยมีอัตรากำไรอยู่ที่ 26.2% ส่วนกำไรต่อหุ้นปรับลด (Diluted EPS) เพิ่มขึ้นสู่ระดับ 2.68 ดอลลาร์ จาก 2.58 ดอลลาร์
• อัตรากำไรขั้นต้นลดลง 40 basis points สู่ระดับ 45.7% เนื่องจากต้นทุนวัตถุดิบ ค่าเสื่อมราคา และค่าขนส่งที่สูงขึ้นหักล้างผลบวกจากการปรับราคา ทั้งนี้ ฝ่ายบริหารระบุว่าราคาเหล็กสูงกว่าปีก่อนหน้ามากกว่า 50% และแตะระดับสูงสุดในรอบกว่า 4 ปี
• ยอดขายในอเมริกาเหนือเติบโต 3.8% สู่ระดับ 502.0 ล้านดอลลาร์ ขณะที่ยอดขายในยุโรปลดลง 3.4% สู่ระดับ 129.9 ล้านดอลลาร์ ท่ามกลางปริมาณการขายที่ลดลงและผลกระทบเชิงลบจากการแปลงค่าเงิน
• ซิมป์สัน แมนูแฟคเจอริ่ง (Simpson Manufacturing) ปรับลดคาดการณ์อัตรากำไรจากการดำเนินงานตลอดปีลงสู่ระดับ 20.0%-20.5% โดยฝ่ายบริหารคาดว่าปริมาณการขายในช่วงที่เหลือของปี 2026 จะลดลงเล็กน้อย และวางแผนที่จะปรับราคาเพิ่มเติม
• คณะกรรมการอนุมัติโครงการซื้อหุ้นคืนใหม่วงเงิน 1 พันล้านดอลลาร์โดยไม่มีกำหนดหมดอายุ เพื่อแทนที่โครงการเดิมวงเงิน 200 ล้านดอลลาร์

ผลประกอบการทางการเงินที่สำคัญ

กำไรจากการดำเนินงานในอเมริกาเหนือเพิ่มขึ้น 9.5% สู่ระดับ 137.0 ล้านดอลลาร์ และอัตรากำไรของส่วนงานปรับตัวดีขึ้นสู่ระดับ 27.3% จาก 25.9% ขณะที่กำไรจากการดำเนินงานในยุโรปลดลง 5% สู่ระดับ 15.3 ล้านดอลลาร์ โดยอัตรากำไรอ่อนตัวลงสู่ระดับ 11.8% จาก 12.0%

ค่าใช้จ่ายในการดำเนินงานได้รับประโยชน์จากค่าใช้จ่ายด้านบุคลากรและค่าธรรมเนียมวิชาชีพที่ลดลง โดยจำนวนพนักงานฝ่ายขาย บริหาร และทั่วไป (SG&A) ลดลงประมาณ 6% เมื่อเทียบรายปี ค่าใช้จ่ายด้านการวิจัย การพัฒนา และวิศวกรรมลดลง 9.1% ค่าใช้จ่ายในการขายลดลง 2.1% และค่าใช้จ่ายในการบริหารและทั่วไปลดลง 8.5%

ผลการดำเนินงานทางธุรกิจและการปฏิบัติการ

ปริมาณการขายกลุ่มที่อยู่อาศัยเติบโตในอัตราร้อยละหลักเดียวระดับต่ำ แม้ว่าตลาดที่อยู่อาศัยในวงกว้างจะซบเซา โดยฝ่ายบริหารระบุว่าเป็นผลมาจากการเปลี่ยนมาใช้ผลิตภัณฑ์ของลูกค้า การเปิดรับผลิตภัณฑ์ใหม่ และการขยายความร่วมมือกับผู้สร้างบ้านและตัวแทนจำหน่ายมืออาชีพ ทั้งนี้ ปริมาณการขายในอเมริกาเหนือสูงกว่าการเริ่มต้นสร้างบ้านเดี่ยวที่ลดลง 5% อยู่ประมาณ 400 basis points เมื่อพิจารณาในรอบ 12 เดือนที่ผ่านมา

ปริมาณการขายกลุ่มพาณิชย์เพิ่มขึ้นในอัตราร้อยละหลักเดียวระดับสูง โดยได้รับการสนับสนุนจากเหล็กขึ้นรูปเย็นและโซลูชันระบบยึดเกาะ ทั้งนี้ ซิมป์สัน แมนูแฟคเจอริ่ง ยังคงมองหาโอกาสในศูนย์ข้อมูล (Data Center) และโครงการขนาดใหญ่อื่น ๆ โดยได้รับการสนับสนุนจากความพร้อมของสินค้าคงคลัง ความเชี่ยวชาญด้านวิศวกรรม และความสัมพันธ์กับผู้รับเหมา

ปริมาณการขายกลุ่ม OEM เติบโตเป็นตัวเลขสองหลัก โดยมีโมเมนตัมในกลุ่มไม้แปรรูปขนาดใหญ่ (Mass Timber) และความสัมพันธ์ที่กว้างขึ้นกับลูกค้า OEM และผู้จัดจำหน่าย ด้านปริมาณการผลิตชิ้นส่วนเพิ่มขึ้นในอัตราร้อยละหลักเดียวระดับกลาง ซึ่งขับเคลื่อนโดยลูกค้ารายใหม่และการขยายธุรกิจกับลูกค้ารายเดิม

บริษัทได้เปิดตัวแพลตฟอร์มซอฟต์แวร์การผลิตชิ้นส่วนรุ่นใหม่ ได้แก่ Producer, Cloud Director และ Cornerstone โดยฝ่ายบริหารรายงานว่าได้รับการตอบรับอย่างแข็งแกร่งจากลูกค้า แต่คาดว่าการเติบโตในระยะสั้นจะชะลอตัวลงเล็กน้อยเนื่องจากลูกค้ายังอยู่ระหว่างการประเมินแพลตฟอร์มก่อนที่จะเริ่มใช้งานอย่างแพร่หลาย

ปริมาณการขายปลีกระดับประเทศลดลงในอัตราร้อยละหลักเดียวระดับกลาง เนื่องจากอุปสงค์โครงการปรับปรุงบ้านขนาดใหญ่ชะลอตัวลง อย่างไรก็ตาม รายได้ ณ จุดขายในไตรมาสที่สามเพิ่มขึ้นในอัตราร้อยละหลักเดียวระดับต่ำ ซึ่งส่วนหนึ่งสะท้อนถึงผลจากการปรับราคา

ปริมาณการขายในยุโรปลดลง 5% เนื่องจากอัตราดอกเบี้ยที่สูงขึ้นและแรงกดดันทางเศรษฐกิจในวงกว้างส่งผลกระทบต่อกิจกรรมการก่อสร้าง โดยเฉพาะในฝรั่งเศส การดูดซับต้นทุนคงที่ที่ลดลงส่งผลให้อัตรากำไรขั้นต้นของยุโรปลดลงสู่ระดับ 36.1% จาก 37.9%

แนวทางคาดการณ์จากฝ่ายบริหาร

สำหรับตลอดปี 2026 ซิมป์สัน แมนูแฟคเจอริ่ง คาดการณ์ดังนี้:

• อัตรากำไรจากการดำเนินงานรวมอยู่ที่ 20.0%-20.5%
• การเริ่มต้นสร้างบ้านในสหรัฐฯ จะลดลงในอัตราร้อยละหลักเดียวระดับต่ำเมื่อเทียบกับปี 2025
• ตลาดในยุโรปจะทรงตัวหรือลดลงเล็กน้อย
• อัตราภาษีที่แท้จริงอยู่ที่ 25%-26%
• รายจ่ายลงทุนอยู่ที่ 80 ล้านถึง 90 ล้านดอลลาร์
• ค่าใช้จ่ายในการปรับปรุงโครงสร้างการดำเนินงานในยุโรปประมาณ 4 ล้านดอลลาร์
• กำไรจากการขายที่ดินว่างเปล่าในไตรมาสที่สี่ประมาณ 11 ล้านดอลลาร์

ฝ่ายบริหารคาดว่าปริมาณการขายทั่วโลกจะลดลงเล็กน้อยในช่วงที่เหลือของปี 2026 โดยคาดว่าราคาที่มีอยู่ในปัจจุบันจะให้ผลประโยชน์น้อยกว่า 1% ในไตรมาสที่สี่ ก่อนที่การดำเนินการปรับราคาใหม่จะมีผลบังคับใช้

บริษัทคาดว่าอัตรากำไรจากการดำเนินงานในไตรมาสที่สี่จะอยู่ที่ประมาณ 13% ตอนปลาย ถึงประมาณ 14% ซึ่งรวมกำไรจากการขายที่ดินแล้ว ทั้งนี้ ฝ่ายบริหารระบุว่าการลดลงเมื่อเทียบกับไตรมาสก่อนหน้ามีสาเหตุหลักมาจากปัจจัยทางฤดูกาลตามปกติ ปริมาณการผลิตที่ลดลง และต้นทุนเหล็กที่สูงขึ้น

สำหรับการวางแผนปี 2027 ฝ่ายบริหารระบุว่าการคาดการณ์ตลาดในเบื้องต้นค่อนข้างทรงตัว แต่ได้ตั้งสมมติฐานว่าไม่มีปัจจัยหนุนจากตลาดและอาจมีแรงกดดันเพิ่มเติม ทั้งนี้ บริษัทยังคงมุ่งมั่นที่จะรักษาอัตรากำไรจากการดำเนินงานไว้อย่างน้อย 20% และตั้งเป้าที่จะควบคุมการเติบโตของค่าใช้จ่ายในการดำเนินงานให้อยู่ที่ไม่เกินประมาณครึ่งหนึ่งของอัตราการเติบโตของรายได้ในระยะกลางถึงระยะยาว

ความเสี่ยงและประเด็นมุ่งเน้น

ราคาเหล็กสูงกว่าปีก่อนหน้ามากกว่า 50% และแตะระดับสูงสุดในรอบกว่า 4 ปี บริษัทจึงจัดซื้อเหล็กในปริมาณที่น้อยลงเรื่อย ๆ แทนที่จะทำข้อตกลงซื้อสินค้าคงคลังจำนวนมากในขณะที่ราคายังคงอยู่ในระดับสูง

ต้นทุนวัตถุดิบ ค่าขนส่ง และค่าเสื่อมราคาที่สูงขึ้น รวมถึงภาษีศุลกากร กำลังสร้างแรงกดดันต่ออัตรากำไรขั้นต้น ฝ่ายบริหารวางแผนที่จะปรับราคาเพิ่มเติม แต่เน้นย้ำถึงความจำเป็นในการรักษาสมดุลระหว่างการชดเชยต้นทุน กับความสามารถในการซื้อที่อยู่อาศัยและความสัมพันธ์ระยะยาวกับลูกค้า

การเริ่มต้นสร้างบ้านกำลังชะลอตัวลง และฝ่ายบริหารยอมรับว่าการลดลงของตลาดสหรัฐฯ ตลอดทั้งปีอาจขยับจากหลักเดียวระดับต่ำไปสู่หลักเดียวระดับกลาง หากสภาวะเศรษฐกิจแย่ลงอีก

ยุโรปยังคงเผชิญความเสี่ยงจากอัตราดอกเบี้ยที่สูงขึ้น ความอ่อนแอทางเศรษฐกิจ ตลอดจนความไม่แน่นอนทางการเมืองและการคลังในฝรั่งเศส ปริมาณการขายที่ลดลงยังส่งผลให้การดูดซับต้นทุนคงที่ลดลงด้วย

ไฮไลท์ช่วงถาม-ตอบกับนักวิเคราะห์

• การปรับราคาและต้นทุนเหล็ก: ฝ่ายบริหารคาดว่าจะประกาศการปรับราคาเพิ่มเติมในไม่กี่สัปดาห์ข้างหน้า โดยทั่วไปบริษัทพยายามรักษาเปอร์เซ็นต์อัตรากำไรขั้นต้นไว้ในระยะกลางถึงระยะยาว แม้ว่าความต่างด้านช่วงเวลาอาจสร้างแรงกดดันในระยะสั้นก็ตาม
• กลยุทธ์สินค้าคงคลัง: ปริมาณสินค้าคงคลังในอเมริกาเหนือ (คิดเป็นปอนด์) ลดลง 31.5% จากสิ้นปี 2025 คาดว่าสินค้าคงคลังเหล็กดิบและต้นทุนต่อปอนด์จะเพิ่มขึ้น แต่ฝ่ายบริหารกำลังใช้แนวทางการจัดซื้อแบบทยอยซื้อในปริมาณที่น้อยลง
• โครงสร้างต้นทุน: บริษัทได้ใช้วิธีลดจำนวนพนักงานตามธรรมชาติเพื่อควบคุมค่าใช้จ่าย และคาดว่าการเติบโตของค่าใช้จ่ายในการดำเนินงานจะยังคงต่ำกว่าการเติบโตของรายได้เมื่ออุปสงค์ฟื้นตัว
• การดำเนินงานที่ Gallatin: มีค่าใช้จ่ายในการเริ่มต้นดำเนินงานประมาณ 5 ล้านดอลลาร์เกิดขึ้นในไตรมาสแรก ทั้งนี้ ฝ่ายบริหารระบุว่าการดำเนินงานไม่ได้เป็นตัวถ่วงอีกต่อไปเมื่อถึง Q3 แม้ว่าการผลิตสารเคลือบและความพร้อมของวัสดุยึดตรึงยังคงอยู่ระหว่างการปรับปรุง โดยคาดว่าความพร้อมของสินค้าคงคลังจะกลับสู่ภาวะปกติราวต้นปี 2027
• การจัดสรรเงินทุน: ซิมป์สัน แมนูแฟคเจอริ่ง ซื้อหุ้นคืนมูลค่า 66.3 ล้านดอลลาร์ และจ่ายเงินปันผล 12.3 ล้านดอลลาร์ในระหว่างไตรมาส โดยฝ่ายบริหารกล่าวว่าวงเงินอนุมัติใหม่ 1 พันล้านดอลลาร์ช่วยให้เกิดความยืดหยุ่นในการซื้อหุ้นคืนตามโอกาสที่เหมาะสม ขณะเดียวกันก็ยังคงรักษาขีดความสามารถสำหรับโอกาสการควบรวมและซื้อกิจการในอนาคต
• การเพิ่มส่วนแบ่งการตลาดกลุ่มที่อยู่อาศัย: ฝ่ายบริหารระบุว่าการเปลี่ยนมาใช้ผลิตภัณฑ์ของบริษัทโดยตัวแทนจำหน่ายเป็นผลมาจากความพร้อมของสินค้า ข้อกำหนดทางเทคนิค การบริการลูกค้า และการขยายการขายเกี่ยวเนื่อง (cross-selling) ของวัสดุยึดตรึงและพุก โดยบริษัทระบุว่าสามารถจัดส่งสินค้าถึงสถานที่ปลายทางได้ถึง 95% ภายในวันเดียว

บทถอดคำพูดจากการรายงานผลประกอบการฉบับเต็ม

บทถอดเสียงฉบับเต็มของการประชุมทางโทรศัพท์ผลประกอบการ

คำชี้แจงจากฝ่ายบริหาร

Operator

Greetings, and welcome to the Simpson Manufacturing Company Third Quarter 2026 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded.

It is now my pleasure to introduce Kim Orlando with Investor Relations. Please go ahead.

Kimberly Orlando

Good afternoon, ladies and gentlemen, and welcome to Simpson Manufacturing Company's Third Quarter 2026 Earnings Conference Call. Any statements made on this call that are not statements of historical fact are forward-looking statements. Such statements are based on certain estimates and expectations and are subject to a number of risks and uncertainties. Actual future results may vary materially from those expressed or implied by the forward-looking statements. We encourage you to read the risks described in the company's public filings and reports, which are available on the SEC's or the company's corporate website. Except to the extent required by applicable securities laws, we undertake no obligation to update or publicly revise any of the forward-looking statements that we make here today, whether as a result of new information, future events or otherwise. .

On this call, we will also refer to non-GAAP measures, such as adjusted EBITDA, which is reconciled to the most comparable GAAP measure of net income in the company's earnings press release. Please note that the earnings press release was issued today at approximately 4:15 p.m. Eastern Time. The earnings press release is available on the Investor Relations page of the company's website at ir.simpsonmfg.com. Today's call is being webcast, and a replay will also be available on the Investor Relations page of the company's website.

Now I would like to turn the conference over to Michael Olosky, Simpson's President and Chief Executive Officer.

Michael Olosky

Thanks, Kim. Good afternoon, everyone, and welcome to today's call. With me is Matt Dunn, our Chief Financial Officer. Our performance this quarter reflects the resilience of our business and the progress we continue to make despite a challenging market environment. We remain focused on what we can control, strengthening our customer relationships, bringing new innovations to market, investing in our people and culture and executing with discipline. .

One of the many things that make Simpson special is the commitment of our people, many of whom have dedicated decades of their career to our company and our customers. Their experience, relationships and commitment to our culture have played an important role in our success. As we continue recognizing these long-tenured employees throughout the year, I'd like to take a moment today to highlight a few of them.

First is Mike Woodall, who has been with Simpson for 35 years supporting our Southeast operations and was recently promoted to our multifamily project operations manager. Mike has built an incredibly diverse career at Simpson with experience on the production floor and retail sales and technical support and most recently, supporting our multifamily business in estimating and project management. His journey is a great example of the opportunities to grow over a long career of Simpson. And Simpson is truly a family connection for Mike, with his father pet will also spending more than 30 years with the company making lasting contributions to our quality and operations team.

I'd also like to recognize Bob Boucher, a product engineer celebrating 37 years with Simpson. Bob began his career in quality control at our San Leandro facility and has worked in engineering, product design and customer support throughout his career. Early on, Bob managed a spreadsheet of hanger load values that ultimately evolved into our Hanger Selector software, which he continues to manage today. It's a great example of deep product expertise and commitment to customers that Bob has demonstrated throughout his nearly 4 decades of SIMs.

Finally, I'd like to recognize Cheryl Paylor, a material handler in our automatics department at our Stockton, California facility, celebrating 39 years with Simpson. Cheryl began her career when our Northwest operations were still located in San Leandro and has been part of the Simpson team for nearly 4 decades. In fact, Sheryl appears in a company video with our founder, Mark Simpson, as he walks the factory floor and talks about 1 of our company values, everybody matters. It's a small but fitting connection to the values and culture that continue to define Simpson today.

As we celebrate our 70th year, stories like these are a reminder that our culture is ultimately built and carried forward by our people, and we're grateful for everything that continue to contribute to Simpson.

Now turning to our financial results. Net sales of $638.1 million were up 2.3% from the prior year quarter. As outlined in our investor presentation, net sales growth was primarily driven by pricing, which contributed to 2.5% of the increase. Our global sales volumes for the quarter were relatively flat. Over the last 12 months, our global volumes declined by 1.3%, comparing favorably versus the 1.9% decline in U.S. housing starts. We believe on a volume and revenue basis, we are outperforming the majority of our relevant end markets.

As a reminder, we exited some business in 2025, which negatively impacted our global year-over-year volume comparisons by 30 basis points on a trailing 12-month basis and by 30 basis points in Q3 2026. In North America, net sales were $502 million, up 3.8% from the prior year quarter, including an approximately $10 million benefit from pricing actions. For additional context, North American volumes were approximately 400 basis points above the 5% decline in single-family housing starts on a trailing 12-month basis.

Despite continued pressure across the market, we delivered solid progress in several key growth areas, demonstrating our ability to strengthen our position with customers through differentiated products, solutions and service. Supplier awards from 2 channel partners and a top 10 builder further reflects the strength of our customer relationships and the value our teams deliver every day. Our residential business delivered low single-digit volume growth year-over-year despite continued softness in the broader housing market.

Our multifamily business remained a relative bright spot, while our teams continue to capture opportunities through customer conversions new product adoption and expanded engagement with builders and pro dealers, several meaningful dealer conversions during the quarter and continued to generate strong adoption of new products. While affordability pressures and cautious builder sentiment continue to weigh on housing activity, our teams remain focused on gaining share, expanding our product offering and providing excellent customer service.

Our commercial business delivered a strong quarter with volumes up high single digits year-over-year. Growth was supported by continued momentum in our cold form steel and anchoring solutions. We continue to see attractive opportunities in data centers and other large projects where our inventory position, engineering expertise and relationships with contractors and distribution partners are helping us win new business. We continue to focus on field engagement, technical support and converting specifications to symptom products.

The OEM business delivered another strong quarter with volumes up double digits year-over-year. Growth was broad-based with continued momentum in mass timber and further expansion of our relationships with key OEM customers and distributors. We remain encouraged by our growing Macomber project pipeline and customer engagement. Our combination of innovative products, engineering expertise, testing capabilities and field support continues to position us well across these growing applications. The component manufacturer business delivered a solid quarter with volumes up mid-single digits year-over-year. Growth was driven by new customer wins and continued expansion with existing customers.

We also reached an important milestone in the Building Component Manufacturing Conference, where we introduced our next-generation software platform to strong customer interest and engagement, while our equipment solutions generated new sales opportunities. The positive response reinforced our view that there is meaningful demand for an alternative supplier partner in this market. As customers evaluate the new platform, we expect growth to moderate in the near term before accelerating as adoption builds.

During the quarter, we also launched our new software academy, bringing training for our component manufacturing and residential software customers together on a single platform and strengthening the support we provide across our growing portfolio of digital solutions. Finally, our national retail business saw volumes declined mid-single digits year-over-year, reflecting softer demand for larger projects across the broader home center channel. Even in a softer environment, we made progress expanding product placement, adding locations and securing new merchandising opportunities.

We remain focused on strong retail execution, close collaboration with our customers and translating these expanded placements into sustained sell-through as demand improves. In Europe, third quarter net sales totaled $129.9 million, down 3.4% year-over-year, driven by a 5% year-over-year volume decline as market conditions turned less favorable amid higher interest rates and broader economic headwinds, particularly in France, where heightened political and fiscal uncertainty has pressured construction activity. Net sales also reflected the negative effect of foreign currency translation. On a local currency basis, net sales were down 2.1%.

Throughout the quarter, we maintained strong customer engagement and achieved several notable wins among them, a number of mass timber projects despite the challenging market. Our consolidated gross margin declined modestly by 40 basis points year-over-year to 45.7% driven by higher material costs, depreciation and freight expenses. Following more than a year of rising steel prices, steel is now up over 50% versus a year ago and at its highest level in over 4 years. As a result, we expect to take additional pricing actions driven by rising steel costs and anticipate communicating further details in the coming weeks.

Our operating margin was 22.1% and down 50 basis points year-over-year as the benefit of approximately $10 million in lower operating expenses were more than offset by $12.9 million gain from the sale of our Galaton Tennessee facility recognized in the third quarter of 2025. The gain contributed approximately 210 basis points to our prior year margin. Adjusted EBITDA totaled $167.2 million, a 7.4% increase year-over-year. In summary, we remain focused on the areas within our control, executing with discipline managing costs and supporting our customers as we position the business for continued success.

Our financial ambitions remain one, driving above-market growth compared to our relevant end markets, including outperforming United States housing starts; two, maintaining an operating income margin at or above 20%; and three, consistently driving EPS growth ahead of net sales growth. As for our market outlook, we continue to expect U.S. housing starts to decline in the low single-digit range in 2026 compared to 2025. In Europe, we now anticipate a flat to slightly declining market.

Looking ahead, demand for our value-added solutions remains encouraging, and we continue to see attractive long-term opportunities across our key growth areas. In the near term, however, we are navigating a more challenging operating environment including decelerating housing starts, and we anticipate these factors to result in volume being down slightly for the remainder of the year. Against this backdrop, we remain disciplined in how we execute pricing and manage costs.

We are focused on maintaining reliable supply and service while taking a thoughtful market-specific approach to pricing that balances input costs, product value mix and margins with the importance of our long-term customer relationships. We believe this disciplined approach, together with the strength of our customer relationships in a differentiated market position positions us well to navigate the current environment and continue advancing our long-term growth priorities.

With that, I'd like to turn the call over to Matt, who will discuss our financial results and outlook in greater detail.

Matt Dunn

Good afternoon, everyone. Thank you for joining us on our earnings call today. As we continue celebrating Simpson's 70th anniversary, I'd like to echo Mike's comments and recognize the many employees whose dedication and commitment are a meaningful part of what has made Simpson the company it is today.

Before getting into the numbers, I'd like to mention that unless otherwise stated, all financial measures discussed in my prepared remarks refer to the third quarter of 2026 and all comparisons will be year-over-year comparisons versus the third quarter of 2025.

Now turning to our results. Consolidated net sales grew 2.3% to $638.1 million, in the North America segment, net sales rose 3.8% to $502 million, driven by pricing and higher volumes. Europe's net sales decreased 3.4% to $129.9 million driven by lower volumes and a negative effect of approximately $1.6 million in foreign currency translation, partially offset by pricing. Globally, Wood construction products sales were up 1.8%, and concrete construction products sales were up 4.8%. Consolidated gross profit increased 1.4% to $291.6 million resulting in a gross margin of 45.7%, down 40 basis points from last year.

In North America, gross margin was 48.4%, down from 48.7% reported in the prior year primarily reflecting elevated material, depreciation and freight costs. In Europe, gross margin decreased to 36.1% from 37.9%, primarily reflecting lower fixed cost absorption on reduced volumes. From a product perspective, our gross margin for Wood Products was 44.9% compared to 46.2% a year ago as material, freight and labor costs more than offset higher pricing. For concrete products, gross margin was 49.7% compared to 48% a year ago, reflecting higher pricing and favorable mix, partially offset by higher factory and tooling, material and freight expenses.

Now turning to expenses. As a percentage of net sales, third quarter operating expenses were 23.6%, a decline from 25.8% last year. SG&A head count was down approximately 6% year-over-year. In total, operating expenses decreased 6.3% to $150.5 million primarily driven by reductions across personnel-related costs and professional fees. To further detail our SG&A, our research and development and engineering expenses decreased by 9.1% or $1.9 million to $18.9 million. The decrease was driven by benefits from the strategic cost savings initiatives completed in the prior year, primarily lower personnel-related expenses and reduced professional fees.

Selling expenses decreased 2.1% to $54.9 million as a result of lower personnel-related expenses, partially offset by higher advertising expenses. On a segment basis, selling expenses in North America were down 3.4% and in Europe, they are up 1.2%. General and administrative expenses decreased by 8.5% to $76.7 million primarily driven by decreases in personnel-related expenses and professional fees. As a result, our consolidated income from operations totaled $141 million, a modest increase of 0.2% from $140.7 million which included the $12.9 million gain from the sale of our Gallatin, Tennessee facility.

Our consolidated operating income margin was 22.1%, down from 22.6% last year including a 210 basis point impact from the sale of Gallatin in the prior year quarter. In North America, income from operations increased 9.5% to $137 million due to higher net sales on reduced operating expenses, primarily from reduced personnel costs. Our operating income margin in North America improved to 27.3% compared to 25.9% last year. In Europe, income from operations decreased 5% to $15.3 million, primarily due to lower sales and gross profit, mostly offset by continued cost controls.

Our operating income margin in Europe was 11.8% compared to 12.0% last year. Improving our operating margin and optimizing our footprint remains a priority in Europe. Our effective tax rate was 25.4%. Accordingly, net income totaled $109.1 million or $2.68 per fully diluted share compared to $107.4 million or $2.58 per fully diluted share. Adjusted EBITDA was $167.2 million, an increase of 7.4%, resulting in a margin of 26.2%.

Now turning to our balance sheet and liquidity. As of September 30, 2026, our debt balance was $308 million, down $66.3 million from December 31, 2025, and with $580.8 million remaining available on our revolver. Cash and cash equivalents totaled $491.3 million, resulting in a net cash position of $183.3 million. Our inventory position as of September 30, 2026, was $511.9 million, which was down $82.3 million compared to December 31, 2025, and driven by approximately $45.4 million in lower raw material inventory levels on hand and $34.7 million reduction in finished goods.

North America inventory pounds on hand are down 31.5% since December 31, 2025. We anticipate raw steel inventory levels to increase as well as our cost per pound. We generated strong cash flow from operations of $173.3 million in the third quarter, providing us with continued flexibility to invest in the business while returning capital to stockholders. During the quarter, we invested $11.9 million in capital expenditures, returned $12.3 million in dividends to our stockholders and repurchased $66.3 million of our common stock. We also repaid $25 million on our revolver.

Additionally, on October 22, 2026, our Board declared a quarterly dividend of $0.30 per share payable on January 28, 2027, and stockholders of record on January 7, 2027. Further, on October 22, 2026, our Board approved a new share repurchase authorization of $1 billion with no expiration date superseding our prior $200 million authorization. The approval of this new authorization reflects the board's confidence in the company's long-term strategy and commitment to returning capital to shareholders.

Next, I'll turn to our 2026 financial outlook. Based on business trends and conditions as of today, October 26, 2026, our updated guidance for the full year ending December 31, 2026, is as follows: we now expect the range for consolidated operating margin to be 20.0% to 20.5%. Additional key assumptions include: our outlook for U.S. housing starts to be down in the low single-digit range. a lower overall gross margin based on rising raw material and freight costs, imposed tariffs and increased depreciation costs, approximately $4 million of footprint optimization costs in Europe, and approximately an $11 million gain on the sale of vacant land in the fourth quarter of 2026.

Our effective tax rate is estimated to be in the range of 25% to 26% and including both federal and state income tax rates based on current tax laws. And finally, our capital expenditures outlook is expected to be in the range of $80 million to $90 million, which includes efforts to optimize our footprint to improve operational efficiency. In summary, we remain confident in the strength of our business and focus on executing against our long-term priorities. While the market environment remains challenging, we are continuing to invest for growth, manage the business with discipline and generate strong cash flow to support both our strategic priorities and stockholder returns.

We remain committed to a balanced approach to capital allocation, including returning free cash flow to stockholders.

With that, I will now turn the call over to the operator to begin the Q&A session.

Operator

[Operator Instructions] Our first question is from Trey Grooms with Stephens Inc.

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Trey Grooms

Good afternoon, everyone. So I guess if we could maybe just touch on, first, the inventory pounds on hand down continues to be down significantly. I know you've mentioned maybe looking at a fourth quarter kind of load in or low end before year-end. Is that still the intention? And then maybe as a follow-on with that, with the pricing actions that you'd mentioned. I guess what's the timing there? Do you expect to fully kind of recoup steel cost inflation fairly quickly? Or is there a timing component we need to kind of be watching out for as we kind of look into next year. .

Matt Dunn

Trey, this is Matt. On the inventory question, we've been in a couple of quarter pattern here of raw material inventory coming down in pounds, even in dollars as well. If you recall, we bought quite a bit of steel a little over 12 months ago. We've been working through that and now we're kind of back in the market, acquiring steel, a little bit more on a just-in-time basis given the pricing of steel that's in the market, where historically, we've made pretty big chunky buys. And so we're in the market now buying some steel -- so I'd expect that, that balance is going to go up some. I don't expect it to go way up immediately. We're taking a little bit more of a bite-sized approach to steel until we see where it settles. And then in terms of the price increase, I'll let Mike talk on that.

Michael Olosky

Yes. So Trey, let me back up and just talk a little bit about bracing bigger picture first. So we certainly recognize the affordability pressures on our customers in the broader industry and how the issues that the whole market is facing. So we are making sure we're being very thoughtful on all things pricing. A 50% increase in steel and steel at a 4-year high, certainly creating some big headwinds. We have some other inflationary efforts that we're seeing, and we're just not able to offset all that with productivity efforts. So what we're trying to do is really balance effectively, the relationships we have between price and cost and just making sure that we can continue to invest in service, availability and all the innovation efforts that our customers would expect from Simpson.

So we do expect to announce additional pricing actions. It's going to be in the next coming weeks where we really share more details on that, Trey.

Trey Grooms

Okay. Got it. And then just last 1 for me. You guys continue to do a really good job on the operating expense level. came in below where we were looking for. And you talked about some of the drivers there, personnel costs play in a role here. So I guess I assume this continues in the near term but I guess if we're thinking about a little bit longer term, are these things that -- or these cost out? Is there a way for us to kind of think about what might need to come back with improving demand? Or is there some -- maybe some incremental leverage that you can see out of these actions a little longer term?

Unknown Executive

Yes. So Trey, let me start with that. So I want to appreciate the feedback. We've got a team of people that's working really hard to do everything we can to manage the cost line. We are committed to that 20% operating income margin. And at the end of the day, we think we've got a great team, a great business model and that needs to translate into strong financial results. And that 20%, I think is a 20% operating income margin is a target that we've been committed to hitting.

Michael Olosky

Yes, Trey, in terms of what needs to come back in terms of investment, if the market picks up, I mean, certainly, there will be -- there are investments that we'd like to make, but given kind of where the market is and where we are against our financial ambitions, we're sliding those out a little bit. But when we do see the market recover some, we're going to be in a position where we're investing OpEx at a slower rate than we're growing revenue. So we're somewhere targeting in the don't grow OpEx any more than half the rate of revenue. So if you think about it from a kind of a mid and longer term, that's kind of what we're targeting. And Trey, we've been able to leverage attrition over the last 6 months to really help us keep a lid on costs as well..

Operator

Our next question is from Daniel Moore with CJS Securities.

Dan Moore

Matt. Thanks obviously, solid results. You talked about in the prepared remarks, you mentioned volumes likely down slightly for the remainder of the year, given the dynamic environment we're in here. Just remind us where we are in terms of kind of prior pricing actions will you see much of a benefit from pricing left over in Q4? Or would you -- should we expect revenue to be down sort of closer to the declines in volumes that we might experience at least for the next quarter until the next round of pricing kicks in? .

Michael Olosky

Yes, Dan, let me start from a market perspective. So again, going into this year, we were assuming the market was going to be flat. It's down roughly 2% year-to-date. So I think it's 1.9% -- the census data is 1.9% below prior year. Our assumption is going to be down low single digits for the full year. Certainly, there's a lot of news coming out from a lot of our customers in the industry that things are getting a little bit tighter. So there's a chance maybe that moves from low single digits to mid-single digits. But right now, we're -- the market forecast -- the latest market forecast that we have are down low single digits with maybe a little pressure on the downside.

Matt Dunn

Yes. And Dan, in terms of your question on pricing, Recall, in 2025, we took our first price increase in June with the larger 1 and then there was a smaller price increase mid-October last year, so we're going to still get a little bit of help from pricing in Q4 this year, but kind of less than 1% range when you think about it before, any of the new pricing kicks in. We're also getting some pricing benefit in Europe from price increases we took earlier this year, again, a little bit smaller scale.

So I'd say kind of less than 1% help from price in Q4. And then we'll talk more about '27 later once some of that stuff starts to be announced.

Dan Moore

Super helpful. That's great. And you touched on this again. Can you give a little bit more color on kind of the rollout of new software at the building show. How is that being received relative to your expectations? And and maybe delineate kind of the opportunity set between kind of small regional players and some of the larger folks.

Michael Olosky

Yes. So Dan, we're making a lot of good progress in this space. So we're very pleased with what the team has been working on, and we're getting a lot of good feedback from our customers. Q3 volume for the component manufacturing business was up mid-single digits. Housing starts with a direct comparison there, so we're doing a lot better than the market. At the industry trade show, which is called BCMC, which was September, we debuted our next-generation software platform, and there's 3 components to it, the producer piece. Cloud Director in Cornerstone.

And remember, Dan, this is really a system that's designed to be cloud native. And so there's a bunch of advantages with that, including making it easier for a distributed workforce to work together, and that cloud-based system will help us really drive faster upgrades to our team and provide to our customers and provide really a high level of service and a high level of feedback on some of the ideas where they think we can add an additional features of functionality. And at the show, we had demo stations. We were showing people of cornerstone Leland walls. We are showing the cloud director version that we have and then the latest version of producer.

And it was standing room only. Dan usually, those shows at the very end, kind of empty out and even at the last minute of the show, we still have a lot of people lined up doing demos. So we're getting a lot of positive feedback. We're pretty excited about it. And then to your point about small, large, medium players, as you know, the larger customers where they've got very significant footprint in terms of the number of sites. Those we think we are eventually going to be a good fit for. We do have a couple of larger customers that are using our solution today. The cloud-based version of that is going to make that even easier. We also think there's a lot of opportunities of small to midsized customers in this space, and we continue to add new customers today, even though we are introducing new software as we speak.

Dan Moore

Really helpful. One more, I'll jump out. But just an update on capital allocation priorities. Just talk to the decision to shift from kind of shorter-term buyback authorization to now the $1 billion authorization with no expiration. And with net cash growing would you consider going beyond the target of 50% return of free cash return to shareholders if M&A doesn't -- opportunities don't present themselves? Just how are we thinking about that in the context of the announcement today?

Michael Olosky

Yes, Dan, on the new authorization buyback of $1 billion, it's a little bit of a strategic shift in how we've managed it in the past, just providing more clarity of kind of midterm intentions and it ultimately gives us flexibility to be opportunistic in terms of when we repurchase those shares across fiscal years. still want to maintain optionality and flexibility for the right M&A opportunities, which there are some that we'd be of interest but none that are active. So I think in the meantime, we'll be focused on returning cash to shareholders through the buyback. And then we have a publicly stated threshold of 35% of free cash flow. I mean you mentioned we've been kind of north of 50% here in the last few years.

So I think there's flexibility there, but I would say not looking to take foot off the gas any on that. If anything, maybe step it up a little bit again, if we're not seeing the M&A opportunities out there.

Operator

Next question is from Andrew Carter with Stifel.

Unknown Analyst

First question I wanted to ask about the National Retail business, taking a step back on shipments. Could you share what the POS trends were in the quarter, what they were to year-to-date? And last quarter, I think you referred to some competitive activity, is that the channel where you've kind of seen the fasteners not kind of go to plan, therefore, the weakness? I'll stop there.

Michael Olosky

Yes. Andrew, good question. So in the national retail space, really for the -- that whole area, 1 of the biggest headwinds are these large projects. And we see that pretty much across the board. So that's people doing additions larger decks, perils, those type of larger projects tend to be a little bit slower than the overall average numbers. So we think that's part of it. When we do comparison against the national retail numbers, one thing that makes that a little bit apples and oranges, Andrew, is the data that we get for national retail is in dollars. And there's been a lot of pricing activity in that space, and we're comparing it against pounds.

When you look at it on a dollar-for-dollar basis, we believe we're pretty much in alignment with how that market's developed over the last 3 months and over the course of the last year.

Matt Dunn

Yes. And Andrew, this is Matt. In the third quarter, our POS that kind of total national retail is up in the low single-digit range. So it's up on dollars, as Mike said, there's been some pricing. So the volume is down slightly, but there's a little bit of apples and oranges there when we try to compare volumes, but it is up on dollars.

Michael Olosky

And Andrew, we continue to believe we're in good shape with our national retail customers. I like the new product development ideas we're working on the merchandising efforts, some packaging ideas we're working on. We've got a lot of good things going in that space. And so we think that will get back on the path of being a good growth driver for us going forward.

Unknown Analyst

Second question, kind of actually in to just go to Gallatin, not necessarily related to that. This has kind of been the first year fits of starts. Can you kind of speak to kind of the margin headwind that you had this year or maybe it wasn't as much of a benefit? And kind of what you expect from this and maybe in kind of progress on that and if it's going to hit all cylinders in '27?

Michael Olosky

Yes. We started this year in Gallatin with some challenges on the cost side, particularly on the 2 new processes that we in-sourced to kind of be more ritually integrated, which is heat treating and coding of fasteners. First quarter, I think we talked about it, I think it was about a $5 million start-up costs. It was less in the second quarter. And then here in the third quarter, we're kind of back where we should be from an absorption standpoint. We've got -- I would say we've got the heat treating part of that equation pretty well dialed in. The coatings piece is still kind of the last piece where we're getting over the hump and getting production volumes up to where it needs to be.

But ultimately, I think it's not a drag anymore, and we'll kind of work our way out of that from an inventory situation. We've had a little bit of supply challenges on some fasteners. And so we're kind of catching up on that, expect to be in a good spot, in stock-wise, inventory-wise, kind of right around if we turn the calendar year to 2027. And then into '27, it's really about the decisions we're going to make on which products that we make in Gallatin, virus which products we source from Taiwan. So it kind of happens at a SKU level looking at which ones make sense based on current steel prices and tariffs and lots of factors, but kind of constantly managing that mix to make the optimal mix in Gallatin and buy the rest in Taiwan.

Matt Dunn

Andrew, these are short-term issues from our perspective. We still very much believe in the long-term story around the investment we made in Galton, and we think that's going to help us provide great service to our customers once we get through the short-term challenges.

Operator

Our next question is from Tim Weiss with Baird.

Timothy Wojs

Maybe just first question. if I kind of take the full year guidance and try to back into what it implies for Q4, I think it implies a pretty big step down sequentially in margins. despite you guys having that land sale gain in there. So I know there's seasonality and that can kind of skew it. But is there anything else? I guess, Amy math right and -- is there anything you kind of call out in terms of maybe kind of slower production or price cost or anything like that, just to kind of think about it? .

Matt Dunn

Yes. Tim, this is Matt. You're right. You're doing the math, right? I think historically, our Q4 operating incomes are in the low teens somewhere, anyway just from a seasonality standpoint, we do a lot less volume in the fourth quarter compared to the second, third quarter for sure, but even more -- or even less than the first quarter typically from a seasonality standpoint. We are seeing steel costs increase, right? We talked about price increase likely to be announced here in the next few weeks. And if that sort of follows our normal trend, that will kick in early January. So seeing a little bit of hurt there.

But again, as Mike said, trying to be cognizant of affordability and pressures and all those things and working through the inventory that we had from last year. We're kind of at the end of that road. So we do have the gain in the fourth quarter that we talked about on the vacant land that closed early October, so that will be a gain. But even with that gain, we're probably in the somewhere in the 14-ish range on an operating income. If you kind of do the math, maybe even a little bit less than that, kind of upper 13%.

So there's definitely cost pressure on gross margin, expecting to kind of stay the course on SG&A and then we are making some -- we're choosing to make some investments in our employees in the fourth quarter kind of in recognition of a tough year and our 70th anniversary. So there's a little bit of cost there that we've chosen to invest, but not going to move the needle a whole lot. But yes, that range is kind of where we expect to be for the year 20% to 20.5%, and it does imply a drop in the fourth quarter, not that different than what we see from a normal seasonal standpoint.

Timothy Wojs

Okay.. That's helpful. And then on pricing, can you just remind us kind of what your -- what you attempt to do in terms of covering inflation. I just can't remember if you want to cover dollars if you're trying to cover gross margin?

Michael Olosky

In general, Tim, we've got a lot of different efforts across the board. We're looking to try to manage inflation. We've stepped up our approach on purchasing of everything outside of the steel range. We've got a lot of good things going on in that space, just general cost reduction, efficiency efforts across the board, we're making good progress running our manufacturing facilities more efficient from a labor perspective. We look at pounds per labor arrow, that's trending the right way. So it's lots of small things across the board. I wouldn't say there's any silver bullet that's [indiscernible]

Matt Dunn

I would say typically, Tim, we try to price to maintain our gross margin percentage not always perfect and there's movement here or year in, year out. But the intention is to maintain our gross margin percentage over the mid and long term with Blizz here and there.

Operator

Our next question is from Kurt Yinger with D.A. Davidson.

Kurt Yinger

But thanks, and good afternoon, everyone. I know it's a little bit early, but can you just talk through maybe some of the moving pieces of how you're planning for 2027 at this stage? I mean, it seems like at least we'll start off with probably a pretty tepid demand backdrop. And I'm just curious, like how are you thinking about some of the different levers you can pull in the context of the commitment to kind of maintaining that 20% operating margin. .

Michael Olosky

Yes. Kurt, good question. So when we look at the market forecast for 2027, the early indication is flattish. And as you probably remember, for the last 5 years, we've started with market forecast it has probably dropped anywhere from 300 to 500 basis points. So our assumption is that we're not going to get any help from the market next year and maybe have a little bit of headwind. So we're going to continue to do all the cost saving things that we just talked about with them. We're going to continue to leverage attrition to keep our costs in line. And we're going to focus on the things we can control, and that's driving innovation that's taking great care of our customers and trying to get more content on a house and get more shelf space and just continue to do the things that we've done over the last 7 years to drive good growth.

Kurt Yinger

Got it. Okay. And then just on the residential performance, is kind of notable that it was positive despite the demand backdrop. Just curious whether there's anything from kind of a regional or mix perspective that stood out and then maybe more specifically, like you spoke to a couple of good-sized dealer converts. I guess, is there a common thread there in terms of what's getting those customers over the hump or anything you're doing specifically that's driving those today? .

Michael Olosky

Yes. So let's talk through the mix piece first. So housing starts again down in the West Coast and South, Southeast, so the whole seismic hurricane area. So that's providing a bit of a headwind. As you saw housing starts in the Northeast are up, but we tend only have less content there. The good news is we do think Florida and in California tours. We do have a lot of content in the house. We think that's roughly stabilized. So that is good news. It's not a headwind, which is it's been positive compared to a while ago. So we're feeling pretty good about that. when we look at the lumber yard conversions, curve, we've got a big sales team out there.

We've added warehouses to be able to focus on our customers and get closer to them. we can hit 95% of our ship to locations within 1 day. Product availability is a big thing for our customers. We're very, very good at that. We continue to drive specs at through engineers and architects, and we continue to work with the builders to pull things through. So that business model that we've been driving, again, for the last 70 years, just has us picking up more and more business with our customers because they see a lot of value when our team does.

Kurt Yinger

Got it. And maybe just a follow-up on it. I mean given the existing share in the core connector business. Like when we talk about conversions, should we picture that as being attaching more fastener business to those dealers? Or is it actually new locations that previously maybe for stocking, strong tighten?

Michael Olosky

It's both. There are some dealers out there. So when we look at the top 150 pro dealers when that list comes out of the dealers that carry products relevant to our product lines, we have 98% of them are buying our Simpson customers. So there are a couple where we are converting them over to our connector product line. And then there are other dealers where we're tracking basically the sale of fasteners and anchors relative to the revenue from connectors and trying to make sure we have the proper amount of cross-selling activity. So we think there's some opportunity to expand in that area with some of our customers, and that's certainly been helping the residential business grow. .

Operator

Thank you. This concludes today's conference call. We thank you again for your participation. You may now disconnect your lines.