~~NOTE ABOUT FORWARD-LOOKING STATEMENTS~~

This document contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements relating to events or results that may occur in the future are forward-looking statements, including but not limited to, statements regarding our plans, sales, sales trends, sales growth rates, revenues, profits, costs, working capital, balance sheet, inventories, products, market strategies, market share, expenses (including operating expenses and research, development and engineering investments), unrecognized costs (including those with respect to unvested stock-based compensation), cost savings or reduction measures, repatriation of funds, factory utilization rates, results of operations, tax liabilities, losses, capital spending, housing starts, price changes (including product prices and raw material, such as steel prices), profitability, profit margins, effective tax rates, depreciation or amortization expenses, amortization periods, capital return, stock repurchases, dividends, compensation arrangements, record dates, prospective adoption of new accounting standards, effects of changes in accounting standards, effects and expenses of (including eventual gains or losses related to) mergers and acquisitions and related integrations, effects and expenses of equity investments, effects and expenses of relocating manufacturing facilities, effects of changes in foreign exchange rates or interest rates, effects and costs of facility consolidations and expansions (including related savings), effects and costs of software program implementations (including related capital expenditures and savings), needs for additional facilities, materials and personnel, effects and costs of credit facilities and capital lease obligations, headcount, engagement of consultants, the Company's 2020 Plan (discussed under "Management's Discussion and Analysis of Financial Condition and Results of Operations" below), the Company's efforts and costs to implement the 2020 Plan, the effects of the 2020 Plan and the projected impact of any of the foregoing on our business, financial condition and results of operations. Forward-looking statements generally can be identified by words such as “anticipate,” “believe,” “estimate,” “expect,” “intend,” “plan,” “target,” “continue,” “predict,” “project,” “change,” “result,” “future,” “will,” “could,” “may,” “likely,” “potentially,” or similar expressions. Forward-looking statements are necessarily speculative in nature, are based on numerous assumptions, and involve known and unknown risks, uncertainties and other factors (some of which are beyond our control) that could significantly affect our operations and may cause our actual actions, results, financial condition, performance or achievements to be substantially different from any future actions, results, financial condition, performance or achievements expressed or implied by any such forward-looking statements. Those factors include, but are not limited to: (i) general economic cycles and construction business conditions; (ii) customer acceptance of our products; (iii) product liability claims, contractual liability, engineering and design liability and similar liabilities or claims, (iv) relationships with key customers; (v) materials and manufacturing costs; (vi) financial conditions of customers, competitors and suppliers; (vii) technological developments, including software development; (viii) increased competition; (ix) changes in regulations (including changes in trade regulations) or industry practices; (x) litigation risks, and actions by activist shareholders; (xi) changes in market conditions; (xii) governmental and business conditions in countries where our products are manufactured and sold; (xiii) effects of merger or acquisition activities; (xiv) actual or potential takeover or other change-of-control threats; (xv) changes in our plans, strategies, objectives, expectations or intentions; and (xvi) other risks and uncertainties indicated from time to time in our filings with the U.S. Securities and Exchange Commission, including the Company's most recent Annual Report on Form 10-K under the heading “Item 1A - Risk Factors.” See below “Part I, Item 1A - Risk Factors.” Each forward-looking statement contained in this Quarterly Report on Form 10-Q is specifically qualified in its entirety by the aforementioned factors. In light of the foregoing, investors are advised to carefully read this Quarterly Report on Form 10-Q in connection with the important disclaimers set forth above and are urged not to rely on any forward-looking statements in reaching any conclusions or making any investment decisions about us or our securities. All forward-looking statements hereunder are made as of the date of this Quarterly Report on Form 10-Q and are subject to change. Except as required by law, we do not intend and undertake no obligation to update, revise or publicly release any updates or revisions to any forward-looking statements hereunder, whether as a result of the receipt of new information, the occurrence of future events, the change of circumstances or otherwise. We further do not accept any responsibility for any projections or reports published by analysts, investors or other third parties.

~~Each of the terms the “Company,” “we,” “our,” “us” and similar terms used herein refer collectively to~~ Simpson Manufacturing Co., Inc.~~, a Delaware corporation~~ and ~~its wholly-owned subsidiaries, including Simpson Strong-Tie Company Inc., unless otherwise stated.~~Subsidiaries

“Strong-Tie” and our other trademarks appearing in this report are our property. This report contains additional trade names and trademarks of other companies. We do not intend our use or display of other companies’ trade names or trademarks to imply an endorsement or sponsorship of us by such companies, or any relationship with any of these companies.TABLE OF CONTENTS

Part I - Financial Information



Item 1 - Financial Statements
		Page No.
	Condensed Consolidated Balance Sheets (unaudited) as of June 30, 2019 and December 31, 2018	4
	Condensed Consolidated Statements of Earnings and Comprehensive Income (unaudited) for the Three and Six Months Ended June 30, 2019 and 2018	5
	Condensed Consolidated Statements of Stockholders' Equity (unaudited) at June 30, 2018, 2019 and December 31, 2018	6
	Condensed Consolidated Statements of Cash Flows (unaudited) for the Six Months Ended June 30, 2019 and 2018	7
	Notes to Financial Statements	8
Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations		20
Item 3 - Quantitative and Qualitative Disclosures about Market Risk		32
Item 4 - Controls and Procedures		32
Part II - Other Information
Item 1 - Legal Proceedings		33
Item 1A - Risk Factors		33
Item 2 - Unregistered Sales of Equity Securities and Use of Proceeds		33
Item 6 - Exhibits		33

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements.

Simpson Manufacturing Co., Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(In thousands, unaudited)


	September 30,						December 31,			June 30,						December 31,
	2017			2016			2016			2019			2018			2018
ASSETS
Current assets
Cash and cash equivalents	$	204,171		$	218,720		$	226,537		$	141,731		$	155,035		$	160,180
Trade accounts receivable, net	159,571			141,716			112,423			191,282			211,179			146,052
Inventories	244,476			220,207			232,274			266,142			258,180			276,088
Other current assets	13,276			12,321			14,013			14,795			15,772			17,209
Total current assets	621,494			592,964			585,247			613,950			640,166			599,529

Property, plant and equipment, net	265,178			229,670			232,810			252,710			269,127			254,597
Operating lease right-of-use assets										35,111			—			—
Goodwill	137,313			126,845			124,479			132,312			136,398			130,250
Equity investment (see Note 6)	2,582			—			2,500
Equity investment										2,498			2,528			2,487
Intangible assets, net	30,050			24,629			22,864			22,991			26,761			24,402
Other noncurrent assets	11,766			10,195			12,074			10,346			10,907			10,398
Total assets	$	1,068,383		$	984,303		$	979,974		$	1,069,918		$	1,085,887		$	1,021,663
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Capital lease obligations - current portion	$	1,047		$	—		$	—
Trade accounts payable	30,857			24,777			27,674			$	39,241		$	47,985		$	34,361
Accrued liabilities	87,946			62,714			60,477
Income taxes payable	360			3,420			—
Accrued profit sharing trust contributions	5,652			5,157			6,549
Accrued cash profit sharing and commissions	13,123			17,153			10,527
Accrued workers’ compensation	3,548			4,161			3,569
Accrued liabilities and other current liabilities										118,000			120,007			117,219
Total current liabilities	142,533			117,382			108,796			157,241			167,992			151,580

Capital lease obligations - net of current portion	2,875			—			—
Operating lease liabilities										28,164			—			—
Deferred income tax and other long-term liabilities	6,933			5,817			5,336			16,092			14,093			14,569
Total liabilities	152,341			123,199			114,132			201,497			182,085			166,149
Commitments and contingencies (see Note 8)
Commitments and contingencies (see Note 12)
Stockholders’ equity
Common stock, at par value	476			486			473			446			462			453
Additional paid-in capital	265,490			243,900			255,917			277,024			271,735			276,504
Retained Earnings	683,554			687,052			642,422			615,529			652,124			628,207
Treasury stock	(20,000		)	(47,002		)	—			—			(440		)	(25,000		)
Accumulated other comprehensive loss	(13,478		)	(23,332		)	(32,970		)	(24,578		)	(20,079		)	(24,650		)
Total stockholders’ equity	916,042			861,104			865,842			868,421			903,802			855,514
Total liabilities and stockholders’ equity	$	1,068,383		$	984,303		$	979,974		$	1,069,918		$	1,085,887		$	1,021,663

First, a continued focus on organic growth with a goal to achieve ~~organically~~ a net sales ~~compound~~compounded annual growth rate of approximately8% ~~from~~(from $860.7 million reported in fiscal ~~2016~~2016) through fiscal 2020.

Second, rationalizing our cost structure to improve company-wide profitability by reducing total operating expenses as a ~~percent~~percentage of net sales from 31.8% in fiscal 2016 to a range of 26.0% to 27.0% by fiscal 2020. We expect to achieve this initiative, aside from top-line growth, through cost reduction measures in Europe and our concrete product line, zero-based budgeting for certain expense categories, a SKU reduction program to right-size our product offering and a commitment to remaining headcount neutral (except in the production and sales departments to meet demands from sales growth). Offsetting these reductions will be the Company’s ongoing investment in its software initiatives as well as the expenses associated with our ongoing SAP ~~implementation.~~implementation, which includes increasing headcount when necessary.

Third, improving our working capital management and overall balance sheet discipline primarily through the reduction of inventory levels ~~by aggressively eliminating 25 to 30%~~in connection with the implementation of ~~the Company’s product SKUs and implementing~~ Lean principles in many of our factories. ~~We believe~~This included improving our inventory turn rate from two-times a year for fiscal 2016 to four-times by the end of 2020. With these efforts, we ~~can~~believed we could achieve an ~~overall~~additional 25% to 30% reduction of our raw ~~material~~materials and finished ~~good~~goods inventory ~~over the next three years~~through 2020 without impacting day-to-day production and shipping procedures.

~~We believe our efforts~~Since 2016, organic net sales has grown at a compound annual growth rate of 10%. Based on current trends and conditions, we expect to achieve the 8% net sales goal.

We are continuing to work towards reducing our operating expenses to a range of 26% to 27% of net sales by the end of 2020. Operating expenses as a percentage of net sales were 26.6% and 25.7% for the quarters June 30, 2019 and June 30, 2018, respectively, and 28.5% and 28.1% for the six months ended June 30, 2019 and June 30, 2018, respectively. In dollars, operating expenses increased $1.8 million from the quarter ending June 30, 2018 to the quarter ended June 30, 2019, which was mostly due to increased consultant and professional fees, and increased $5.6 million from the six months ended June 30, 2018 to the six months ended June 30, 2019, which was mostly due to increased stock-based compensation and personnel costs for acceleration of vesting when the participant meets age and service requirements. In late 2017 and throughout 2018, we engaged a leading management consultant to perform an independent in-depth analysis of our operations, which contributed towards a reduction of expenses in 2018 and could potentially result in initiatives that reduce expenses beyond the 2020 Plan as well as improvements to net working capital. We incurred additional success-based consulting expenses in 2018 and 2019 due to these initiatives. These fees will ~~contribute~~conclude in 2019. We expect these related consulting fees we incurred in 2018 and will incur in 2019 will have a one-year or less pay back.

When we initiated our 2020 Plan in October 2017, it did not factor in macro events out of our control such as a volatile steel market in connection with steel tariffs and other trade events. Given increases in raw material cost and resulting degradation on our gross profit margins from 48% in 2016, we are recasting our 2020 target for improving our operating income margin to ~~improved business performance~~a range of 16% to 17% by the end of 2020. This is revised down from our prior 2020 target range of 21% to 22%, and in-line to slightly up compared to our operating ~~results, improve returns~~margin of 16.4% in 2016. While the gross margin pressures have caused us to revise this goal, it’s important to note that rationalizing our cost structure has helped mitigate further downward pressure on our operating profit margins. We are also recasting operating margins for Europe from a target of 10% by the end of 2020, which includes approximately 2% of net sales in costs associated with the SAP implementation, to a range of 6% to 7%, including the same 2% of SAP implementation costs. Higher material costs have also contributed to this revision yet it still reflects a 700-800 basis point improvement from 2016 and substantial progress in the segment.

Since 2016, we have reduced our inventory in North America, which is a bulk of our total inventory, by over 12% in pounds on hand, including an approximate 10% reduction in raw materials.

We accomplished this even as three particular factors have transpired since October of 2017 when we released the 2020 Plan that have required us to build more inventory than expected:

we pro-actively increased our anchor inventory in anticipation of potential tariffs on our mechanical anchor finished goods from China, as well as in anticipation of additional demand related to The Home Depot, Inc. ("Home Depot") rollout;

we bought an additional allotment of steel in order to mitigate the potential impact of availability; and

we have inventory levels to ensure we can meet our customer needs as we continue our SAP roll-out.

Also since 2016, our weighted average cost per pound of total inventory on hand and raw materials on hand in North America, which we cannot control, increased approximately 25% and 37%, respectively. As a result, there has not been a marked improvement in our inventory turns based on dollars and we no longer believe we can achieve an inventory turn rate of four-times per year by the end of 2020. We continue to strive to effectively manage our inventory by what we can control as a way of improving our use of working capital.

Through execution on the 2020 Plan, we expected by the end of fiscal year 2020 to achieve a return on invested capital⁽¹⁾ ~~and allow us~~target within the range of 17% to 18% from 10.5% in 2016. Given the pressure on gross margins, we are updating our expectation for return on invested capital to be ~~more aggressive~~ in ~~repurchasing shares~~a range of 15% to 16% by 2020. The Company's return on invested capital was 13.3% for the last four quarters ending June 30, 2019. Also, we remain committed to returning 50% of our ~~stock~~cash flows from operations in the ~~near-term.~~form of dividends and share repurchases to our stockholders through fiscal 2020.

We believe our ability to achieve industry-leading ~~margins from a~~ gross profit margins and operating income ~~standpoint~~margins is due to the high level of value-added services that we provide to our customers. Aside from our strong brand recognition and trusted reputation, Simpson is unique due to our extensive product testing capabilities and our state-of-the-art test lab; strong customer support and education for engineers, builders and contractors; a deep 40-plus year relationships with engineers that get our products specified on the blueprint and pulled through to the job site; product availability with delivery, typically, in ~~typically~~ 24 hours ~~or less;~~to 48 hours; and an active involvement with code officials to improve building codes and construction practices. Based on current information, we expect the competitive environment to be relatively ~~stable. We also expect~~stable with U.S. single-family housing starts to ~~continue~~be flat or growing in the low single digits for the remainder of 2019. For the purposes of re-defining our 2020 Plan objectives, during years 2017 to ~~grow~~2020 we assume U.S. single-family housing starts growing, as a percentage, in the ~~mid~~low-single digits on average.

Prior to ~~high single digits over~~ the ~~next few years, which should support a sustainable organic revenue growth outlook in North America for many of our products.~~

~~We have invested in strategic initiatives to help us perform throughout all industry cycles, such~~as scaling up our wood construction products operations in Europe and ongoing development of our software solutions, including truss software, as our market strategy is to sell engineered product solutions. In support of this effort, we acquired Gbo Fastening Systems AB (“Gbo Fastening Systems”)

~~and CG Visions, Inc. (“CG Visions”) in January 2017, as we believe these two acquisitions fit into our current business model and growth strategy.~~

~~While~~2020 Plan, acquisitions were part of a dual-fold approach to ~~growth in the past, our go-forward~~growth. Our strategy ~~will focus~~since has primarily focused on organic growth, supported by strategic capital investments in the business. As such, we have and will ~~de-emphasize~~continue to focus less on acquisitions activities, ~~going forward,~~ especially ~~as it relates to~~in the concrete repair space. ~~An exception may occur~~However, we will from time to time evaluate acquisition opportunities and if the right opportunity ~~were~~arise we are open to ~~arise~~acquisitions in other areas of our business, such as in our core fastener space, which is ~~the particular~~an area where we believe it would be beneficial to gain additional production capacity to support our wood ~~business.~~business or to enhance our wood and concrete product portfolio with additional value–added products, we may pursue the opportunities.

Factors Affecting Our Results of Operations

Unlike lumber or other products that have a more direct correlation to housing starts, our products are used to a greater extent in areas that are subject to natural forces, such as seismic or wind events. Our products are generally used in a sequential process that follows the construction process. Residential and commercial construction begins with the foundation, followed by the wall and the roof systems, and then the installation of our products, which flow into a project or a house according to these schedules. ~~Foundation product sales could be considered a leading indicator for our product sales. Sales of foundation products in the third quarter of 2017 increased compared to the same period in 2016.~~

Our sales also tend to be seasonal, with operating results varying from quarter to quarter. With some exceptions, our sales and income have historically been lower in the first and fourth quarters than in the second and third quarters of a fiscal year, as our customers tend to purchase construction materials in the late spring and summer months for the construction season. ~~In addition, weather~~Weather conditions, such as extended cold or wet weather, which affect and sometimes delay installation of some of our products, could negatively affect our results of operations. Political and economic events such as tariffs and the possibility of additional tariffs on imported raw materials or finished goods can also ~~affect~~have an effect on our ~~sales~~gross and ~~profitability.~~

~~Operating expenses as a percentage of net sales were under 28% for the third quarter of 2017 and down 104 basis points from the prior year quarter~~operating profits as well as ~~down 185 basis points compared to~~ the ~~second quarter~~amount of ~~2017, primarily due to lower stock-based compensation expense and cash profit sharing expense on lower operating income and reduced payouts under our executive officer cash profit sharing plan.~~inventory on-hand.

~~Acquisitions~~

~~North America~~

In January 2017, we acquired CG Visions for approximately $20.8 million subject to specified holdback provisions and post-closing adjustments. This acquisition is expected to enable us to build closer partnerships with builders by offering software and services to help them control costs and increase efficiency at all stages of the home building process. We expect to look for opportunities to incorporate our products into CG Visions' building information modeling ("BIM") packages and apply CG Visions’ expertise to our existing and future software initiatives.

~~Europe~~

In January 2017, we acquired Gbo Fastening Systems for approximately $10.2 million. Gbo Fastening Systems manufactures and sells a complete line of European approved CE-marked structural fasteners, mostly in northern and eastern Europe, which we expect to eventually distribute and sell in western Europe. We have begun distributing into the Nordic countries wood connector products that were manufactured in the Company's manufacturing facilities in western Europe. Further, we expect to access Gbo Fastening Systems' expertise in product development and testing, and proficiency in fastener manufacturing and surface treatment, to strengthen Gbo Fastening Systems' global presence and contribute engineering expertise in automatic fastening systems and fastener collation to help broaden its fastener and structural connectors lines.

In July 2017, the Company entered into an agreement to sell all of the outstanding shares in Gbo Fastening Systems' Poland and Romania subsidiaries ("Gbo Poland" and "Gbo Romania", respectively). The sale of Gbo Poland closed on September 29, 2017, and the sale of Gbo Romania closed on October 31, 2017. The Company will retain Gbo Fastening Systems' operations in Sweden and Norway.

ERP Integration

In July 2016, our Board of Directors (the "Board") approved a plan to replace our current in-house enterprise resource planning ("ERP") and externally sourced accounting platforms with a fully integrated ERP platform from SAP America, Inc. ("SAP") in multiple phases by location ~~over a period of three to four years~~ at all facilities plus our headquarters, with a focus on configuring,

instead of customizing, the standard SAP modules.

We ~~anticipate~~went live with our first wave of the ~~ERP~~SAP implementation project in February of 2018, and we implemented SAP at a second location in April 2019. We are tracking toward rolling out SAP technology in our remaining U.S. branches by early 2020, and company-wide completion of the SAP roll-out during 2021. While we believe the SAP implementation will ~~cost approximately $30 million~~be beneficial to ~~$34 million through 2019, including capital expenditures. Annual~~the Company over time, annual operating expenses ~~will~~have and are expected to continue to increase ~~from 2017 to~~through 2024 as a result of the ERP project, ~~partly~~primarily due to increases in training costs and the ~~amortization~~depreciation of ~~related~~previously capitalized costs.

~~We believe that the ERP project has progressed well in the first nine months of 2017 and is currently on track and on budget.~~ As of ~~September~~June 30, ~~2017,~~2019, we have capitalized ~~$8.3~~$18.8 million and expensed $18.8 million of the costs, including depreciation of capitalized costs associated with the ERP project. We expect to go live with our first locations in the first quarter of 2018. We anticipate that, as the project progresses further into 2018, we will spend more time and resources in training our staff for the new platform, as opposed to configuring the SAP modules, and we expect to record the cost associated with such training as expense.

Business Segment Information

Our North America segment has generated more revenues primarily from wood construction products compared to concrete construction products. ~~Due to improved~~Over the last twelve months, economic conditions ~~including an increase~~and wet weather resulted in lower than projected single-family housing starts, which decreased wood construction product sales volumes over the same time period. Sales volume decreased compared to the second quarter of 2018 and the first six months of 2018 with wood construction product net sales ~~in regions of the segment have trended up, primarily~~down both

quarter–over–quarter and year-over-year, partly due to ~~increases~~lower U.S. housing starts as a result, in ~~unit sales volumes and an approximately 4% price increase for our connector products in~~part due to unusually wet conditions across the ~~United Stated effective~~U.S with the first 6 months of 2019 being the wettest on ~~December 1, 2016, as well as added revenues from CG Visions. See “North America” below.~~record over the past 125 years according to the National Weather Service. Looking ahead to the third quarter, we are cautiously optimistic that demand will improve. Our ~~truss~~wood construction product net sales decreased slightly infor the ~~third~~ quarter ~~of 2017. Our truss specialists continue~~ended June 30, 2019 compared to ~~convert small~~the quarter ended June 30, 2018 due to ~~medium size truss customers to our design and management software in 2017.~~

~~During the third quarter of 2016, we initiated a multi-year plan to increase our North America factory production efficiency, aiming to achieve a 75% factory utilization rate~~lower sales volumes offset by price increases on two full shifts by moving high-volume connector production from both our Riverside and Western Canada facilities to our other three manufacturing locations in North America. As of September 30, 2017, we had relocated 100%certain number of our ~~planned high-volume connector production.~~products implemented mid-year 2018. Our ~~factory utilization was approximately 45% when this project began and we are currently operating at approximately 60% factory utilization. Based on current information and subject~~concrete construction product net sales increased slightly for the quarter ended June 30, 2019 compared to ~~future events and circumstances, we estimate this transition will save approximately $3.0 million per year, mostly in production costs. Both~~ the Riverside and Western Canada locations will continue as sales and distribution locations, and maintain the capability to manufacture custom orders to continue to meet the Company's service and product availability commitments to customers in the Southwestern region of the United States and Western region of Canada.quarter ended June 30, 2018.

In late 2016, we collaborated with ~~The~~ Home Depot ~~Inc. (“The Home Depot”)~~ to ~~roll out~~make our mechanical anchor line of products ~~that are~~ available ~~at The~~in Home ~~Depot.~~Depot stores. This collaboration ~~increased~~caused us to increase a portion of our finished goods inventory in preparation for the roll-out and we expect to continue to introduce our mechanical anchor line of products ~~through approximately 1,900~~in at least 1,050 of ~~The~~ Home Depot ~~store~~stores by the end of 2019. As of July 27, 2019, the product line had rolled out to over 1,025 Home Depot stores. We continue to seek additional products and footage in current locations ~~throughout 2017~~as well as an additional 800 Home Depot stores, and ~~beyond. Once the rollout is completed,~~ we do not anticipate that this ~~opportunity~~lower than expected roll-out to date will ~~meaningfully contribute to~~affect our ~~concrete business lines going forward and estimate that on an annualized basis it could potentially increase our net~~2020 Plan target for compound annual sales by approximately $30 million. In addition, we are presenting the BIM platform acquired from CG Visions to various builders to showcase the software and for us to determine which modules and services that builders might be interested in using to support their business.growth. See “North America” below.

Our Europe segment also generates more revenues from wood construction products than concrete construction products. Wood construction product sales ~~increased 67% in~~decreased slightly for the ~~third~~ quarter ~~of 2017~~ended June 30, 2019 compared to the ~~third~~ quarter ~~of 2016, primarily due to the acquisition of Gbo Fastening Systems.~~ended June 30, 2018. Concrete construction product sales are mostly ~~project based~~project-based, and net sales ~~increased 11% in~~decreased 12% for the ~~third~~ quarter ~~of 2017~~ended June 30, 2019 compared to the ~~third~~ quarter ~~of 2016,~~ended 2018, primarily due to timing of projects. For the ~~completion~~first six months of ~~large projects during the third quarter of 2017. We are uncertain whether~~2019, concrete construction product net sales ~~will continue~~increased compared to ~~grow at this pace~~the first 6 months of 2018. Europe net sales were also negatively affected by foreign currency translations resulting from most Europe currencies weakening against the United States dollar. In local currency, Europe net sales increased primarily due to increases in average product prices. Operating expenses decreased $2.6 million for the ~~remainder of 2017. In connection with~~quarter ended June 30, 2019 compared to the ~~Gbo Fastening Systems acquisition, we estimated demand for wood connector products for the Nordic region and have placed inventory~~quarter ended 2018, partly due to a $1.6 million reduction in ~~Sweden. Our Western European locations are working on sales and marketing plans for a complete line of fastener products and expect to introduce them to our customers by the end of 2017.~~severance expense. See ~~“Europe”~~“Europe” below.

Our Asia/Pacific segment has generated revenues from both wood and concrete construction products. We ~~have closed our sales offices located in China, Thailand and Dubai; and discontinued our selling activities in Hong Kong, due to continued losses in the regions. We~~ believe that the Asia/Pacific segment is not significant to our overall performance.



(1	)	When referred to above, the Company’s return on invested capital (“ROIC”) for a fiscal ~~year~~period is calculated based on (i) the net income of ~~that year~~the last four quarters as presented in the Company’s condensed consolidated statements of operations prepared pursuant to generally accepted accounting principles in the U.S. (“GAAP”), as divided by (ii) the average of the sum of the total stockholders’ equity and the total long-term liabilities at the beginning of and at the end of such ~~year,~~period, as presented in the Company’s consolidated balance sheets prepared pursuant to GAAP for that applicable year. For the purposes of comparability in this calculation, total long-term liabilities excludes long-term operating lease liabilities, which were recognized as of June 30, 2019 as a result of the January 1, 2019 adoption of ASU 2016-02. As such, the Company’s ROIC, a ratio or statistical measure, is calculated using exclusively financial measures presented in accordance with GAAP.

Business Outlook

Based on current business trends and conditions, our outlook for fiscal 2019 is as follows:

2019 full-year gross margin is estimated to be in the range of approximately 43.5% to 44.0%.

2019 full-year operating expenses, as a percentage of net sales, is estimated to be between approximately 27.5% and 28.5%.

2019 full-year effective tax rate will be between approximately 25% to 27% including both federal and state income tax rates.

Results of Operations for the Three Months Ended ~~September~~June 30, ~~2017,~~2019, Compared with the Three Months Ended ~~September~~June 30, ~~2016~~2018

Unless otherwise stated, the below results, when providing comparisons (which are generally indicated by words such as “increased,” “decreased,” “unchanged” or “compared to”), compare the results of operations for the three months ended June 30, 2019, against the results of operations for the three months ended June 30, 2018. Unless otherwise stated, the results announced below, when referencing “both quarters,” refer to the three months ended June 30, 2018 and the three months ended June 30, 2019.

The Company changed its presentation of its consolidated statement of operations to display non–operating activities, including foreign exchange gain (loss), and certain other income or expenses as a separate item below income from operations. Foreign exchange gain (loss), and other income or expenses were previously included in general and administrative expenses, and in income from operations, respectively. Income before tax and net income for the three months and six ended June 30, 2018 presented below were not affected by the change in presentation.

Second Quarter 2019 Consolidated Financial Highlights

The following table illustrates the differences in our operating results for the three months ended June 30, 2019, from the three months ended June 30, 2018, and the increases or decreases for each category by segment:



	Three Months Ended															Three Months Ended
	Three Months Ended			Increase (Decrease) in Operating Segment												Three Months Ended
	June 30,			North						Asia/			Admin &			June 30,
(in thousands)	2018			America			Europe			Pacific			All Other			2019
Net sales	$	308,007		$	(749	)	$	(2,136	)	$	(269	)	$	—		$	304,853
Cost of sales	167,442			5,984			(798		)	(1,080		)	(874		)	170,674
Gross profit	140,565			(6,733		)	(1,338		)	811			874			134,179
Research and development and other engineering expense	11,249			(22		)	(92		)	(92		)	12			11,055
Selling expense	29,201			110			(614		)	(42		)	32			28,687
General and administrative expense	38,807			3,748			(1,894		)	7			677			41,345
	79,257			3,836			(2,600		)	(127		)	721			81,087
Gain on sale of assets	(125		)	(678		)	225			17			—			(561		)
Income from operations	61,433			(9,891		)	1,037			921			153			53,653
Interest expense, net and other	(871		)	472			687			(345		)	204			147
Income before income taxes	60,562			(9,419		)	1,724			576			357			53,800
Provision for income taxes	16,476			(2,968		)	(570		)	623			662			14,223
Net income	$	44,086		$	(6,451	)	$	2,294		$	(47	)	$	(305	)	$	39,577

Net sales decreased 1.0% to $304.9 million from $308.0 million. Net sales to dealer distributors, home centers and lumber dealers increased primarily due to increases in average product prices and concrete construction product sales volumes, which was partially offset by a decrease in net sales to contractor distributors. Wood construction product net sales, including sales of connectors, truss plates, fastening systems, fasteners and shearwalls, represented 85% and 84% of the Company's total net sales in the second quarters of 2019 and 2018, respectively. Concrete construction product net sales, including sales of adhesives, chemicals, mechanical anchors, powder actuated tools and reinforcing fiber materials, represented 15% and 16% of the Company's total net sales in the second quarters of 2019 and 2018, respectively.

Gross profit decreased 4.5% to $134.2 million from $140.6 million. Gross profit margins decreased to 44.0% from 45.6%, primarily due to increases in material, factory overhead and tooling expense (on lower production) and labor costs as a percentage of net sales, all as a percentage of net sales. Gross profit margins, including some inter-segment expenses, which were eliminated in consolidation, and excluding other expenses that are allocated according to product group, decreased to 43.4% from 46.7% for wood construction products and increased to 44.0% from 37.2% for concrete construction products, respectively.

Research and development and engineering expense decreased 1.7% to $11.1 million from $11.2 million.

Selling expense decreased 1.8% to $28.7 million from $29.2 million, primarily due to decreases of $1.5 million in cash profit sharing and sales commissions, $0.4 million in advertising and promotional expenses and $0.3 million in donation expense, partly offset by increases of $0.9 million in personnel costs and $0.8 million in professional fees.

General and administrative expense increased 6.5% to $41.3 million from $38.8 million, primarily due to increases of $5.3 million mostly in consulting and professional fees, $0.8 million in personnel expense and $0.7 million in software licensing, subscription and maintenance fees, partly offset by decreases of $1.9 million in cash profit sharing expense and $1.7 million in severance

expense. Included in general and administrative expense are SAP implementation and support costs of $3.4 million, which increased $1.1 million from the prior quarter.

Our effective income tax rate increased to 26.4% from 27.2%.

Consolidated net income was $39.6 million compared to $44.1 million. Diluted net income per common share was $0.88 compared to $0.94.

Net sales

The following table represents net sales by segment for the three-month periods ended June 30, 2019 and 2018, respectively:



	North						Asia/
(in thousands)	America			Europe			Pacific			Total
Three months ended
June 30, 2018	$	259,822		$	45,784		$	2,401		$	308,007
June 30, 2019	259,073			43,648			2,132			304,853
Decrease	$	(749	)	$	(2,136	)	$	(269	)	$	(3,154	)
Percentage decrease	(0.3		)%	(4.7		)%	(11.2		)%	(1.0		)%

The following table represents segment net sales as percentages of total net sales for the three-month periods ended June 30, 2019 and 2018, respectively:



	North America		Europe		Asia/ Pacific		Total
Percentage of total 2018 net sales	84	%	15	%	1	%	100	%
Percentage of total 2019 net sales	85	%	14	%	1	%	100	%

Gross profit

The following table represents gross profit by segment for the three-month periods ended June 30, 2019 and 2018, respectively:



	North						Asia/		Admin &
(in thousands)	America			Europe			Pacific		All Other			Total
Three months ended
June 30, 2018	$	123,639		$	17,480		$	343	$	(897	)	$	140,565
June 30, 2019	116,906			16,142			1,154		(23		)	134,179
Increase (decrease)	$	(6,733	)	$	(1,338	)	$	811	$	874		$	(6,386	)
Percentage decrease	(5.4		)%	(7.7		)%	*		*			(4.5		)%

* The statistic is not meaningful or material.

The following table represents gross profit as a percentage of sales by segment for the three months ended June 30, 2019 and 2018, respectively:



	North America		Europe		Asia/ Pacific		Admin & All Other	Total
2018 gross profit percentage	47.6	%	38.2	%	14.3	%	*	45.6	%
2019 gross profit percentage	45.1	%	37.0	%	54.1	%	*	44.0	%

* The statistic is not meaningful or material.

North America

Net sales decreased 0.3%, primarily due to decreases in sales volumes, partly offset by increases in average net sales prices. Canada's net sales were negatively affected by foreign currency translation.

Gross profit as a percentage of net sales decreased to 45.1% from 47.6% primarily due to increases in material, factory overhead and tooling costs (on lower production) and labor costs as a percentage of net sales, partly offset by lower shipping expense and factory overhead and tooling costs, all as a percentage of net sales.

Selling expense increased slightly, primarily due to increases of $1.0 million in personnel costs and $0.9 million in professional fees, partly offset by decreases of $1.3 million in cash profit sharing and sales commissions, $0.2 million in advertising and promotional expenses and $0.3 million in donation expense

General and administrative expense increased $3.7 million, primarily due to increases of $4.8 million in consulting and professional fees, $1.0 million in personnel costs, $0.7 million in software licensing, subscription and maintenance fees, partly offset by decreases of $1.1 million in cash profit sharing expense, $1.0 million in depreciation expense $0.4 million in stock-based compensation. Included in general and administrative expense are SAP related costs of $2.5 million. This is an increase of $0.6 million from the prior quarter.

Income from operations decreased $9.9 million, primarily due to decreased gross profit and increased general and administrative expenses.

Europe

Net sales decreased 4.7%, primarily due to approximately $2.8 million of negative foreign currency translations resulting from European currencies weakening against the United States dollar. In local currency, Europe net sales increased primarily due to increases in average product prices.

Gross profit as a percentage of net sales decreased to 37.0% from 38.2%, primarily due to increases in factory overhead and tooling costs (on lower production), material and labor costs, all as a percentage of net sales

Selling expense decreased $0.6 million, primarily due to decreases of $0.3 million in advertising and promotional expenses and $0.2 million in cash profit sharing and sales commissions.

General and administrative expense decreased $1.9 million, primarily due decreases of $1.6 million in severance expense, $0.4 million in personnel costs and $0.2 million in cash profit sharing expense, partly by an increase of $0.4 million in consulting fees. Included in general and administrative expense are SAP related costs of $0.9 million, which increased $0.4 million from the prior quarter.

Income from operations increased $1.0 million, primarily due to lower operating expenses.

Asia/Pacific

For information about the Company's Asia/Pacific segment, please refer to the tables above setting forth changes in our operating results for the three months ended June 30, 2019 and 2018, respectively.

Administrative and All Other


•	General and administrative expense increased $0.6 million, primarily due to increases of $0.9 million in depreciation expense and $0.3 million in personnel cost, partly offset by a decrease of $0.6 million in cash profit sharing expense.

Results of Operations for the Six Months Ended June 30, 2019, Compared with the Six Months Ended June 30, 2018

Unless otherwise stated, the results announced below, when providing comparisons (which are generally indicated by words such as “increased,” “decreased,” “unchanged” or “compared to”), compare the results of operations for the ~~three~~six months ended ~~September~~June 30, ~~2017,~~2019, against the results of operations for the ~~three~~six months ended ~~September~~June 30, ~~2016.~~2018. Unless otherwise stated, the results announced below ~~when referencing “both quarters,”~~ refer to the ~~three~~six months ended ~~September~~June 30, ~~2016~~2018 and the ~~three~~six months ended ~~September~~June 30, ~~2017. To avoid fractional percentages, all percentages presented below were rounded to the nearest whole number.~~2019.

Unless otherwise stated, the Company’s results below, when referencing “recent acquisitions,” refer to the August 2016 acquisition of Multi Services Dêcoupe S.A. ("MS Decoupe") and the January 2017 acquisitions of Gbo Fastening Systems and CG Visions; when referencing “recently acquired businesses,” refer to MS Decoupe, Gbo Fastening Systems and/or CG Visions, as applicable; and when referencing “acquired net sales,” refer to net sales of such acquired businesses, as applicable. When referencing the “recent North America acquisition,” the Company’s results below refer to the CG Vision acquisition; and when referencing “recent Europe acquisitions,” refer to the MS Decoupe and Gbo Fastening Systems acquisitions.

~~Third Quarter 2017~~Year-to-Date (6-month) 2019 Consolidated Financial Highlights

The following table illustrates the differences in ~~the~~ our operating results for the ~~three~~six months ended ~~September~~June 30, ~~2017,~~2019, from the ~~three~~six months ended ~~September~~June 30, ~~2016,~~2018, and the increases or decreases for each category by segment:


	Three Months Ended															Three Months Ended
				Increase (Decrease) in Operating Segment															Six Months Ended			Increase (Decrease) in Operating Segment												Six Months Ended
	September 30,			North						Asia/			Admin &			September 30,			June 30,			North						Asia/			Admin &			June 30,
(in thousands)	2016			America			Europe			Pacific			All Other			2017			2018			America			Europe			Pacific			All Other			2019
Net sales	$	230,974		$	15,795		$	15,652		$	55		$	—		$	262,476		552,786			$	14,470		$	(2,649	)	$	(510	)	$	—		$	564,097
Cost of sales	117,499			13,691			11,084			357			(40		)	142,591			304,599			19,544			(1,298		)	(1,453		)	(1,728		)	319,664
Gross profit	113,475			2,104			4,568			(302		)	40			119,885			248,187			(5,074		)	(1,351		)	943			1,728			244,433
Research and development and other engineering expense	10,932			(2,331		)	116			(38		)	—			8,679			22,399			1,267			(113		)	(259		)	22			23,316
Selling expense	24,304			2,007			1,839			6			—			28,156			56,774			1,231			(1,147		)	(116		)	57			56,799
General and administrative expense	32,543			2,892			1,384			173			(491		)	36,501			76,206			5,206			(2,570		)	(69		)	2,120			80,893
Loss (gain) on sale of assets	(81		)	(80		)	(11		)	25			—			(147		)
																			155,379			7,704			(3,830		)	(444		)	2,199			161,008
Gain on sale of assets																			(1,309		)	803			237			18			—			(251		)
Income from operations	45,777			(384		)	1,240			(468		)	531			46,696			94,117			(13,581		)	2,242			1,369			(471		)	83,676
Loss in equity method investment, before tax	—			(13		)	—			—			—			(13		)
Interest expense, net	(82		)	23			(249		)	30			(18		)	(296		)
Gain (adjustment) on bargain purchase of a business	—			—			(2,052		)	—			—			(2,052		)
Gain on disposal of a business	—						443						—			443
Interest expense, net and other																			(873		)	197			569			(979		)	470			(616		)
Income before income taxes	45,695			(374		)	(618		)	(438		)	513			44,778			93,244			(13,384		)	2,811			390			(1		)	83,060
Provision for income taxes	15,898			(657		)	433			(123		)	1,030			16,581			23,729			(4,160		)	(87		)	493			846			20,821
Net income	$	29,797		$	283		$	(1,051	)	$	(315	)	$	(517	)	$	28,197		$	69,515		$	(9,224	)	$	2,898		$	(103	)	$	(847	)	$	62,239



Delaware		94-3196943
(State or other jurisdiction of incorporation		(I.R.S. Employer
or organization)		Identification No.)



Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class	Trading Symbol	Name of Each Exchange on Which Registered
Common Stock, par value $0.01 per share	SSD	New York Stock Exchange



	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2017		2016		2017		2016
Net income	$	28,197	$	29,797	$	79,532	$	72,341
Other comprehensive income (loss):
Translation adjustment, net of tax expense (benefit)	5,543		232		19,492		5,244
Comprehensive income	$	33,740	$	30,029	$	99,024	$	77,585


	Nine Months Ended						Six Months Ended
	September 30,						June 30,
	2017			2016			2019			2018
Cash flows from operating activities
Net income	$	79,532		$	72,341		$	62,239		$	69,515
Adjustments to reconcile net income to net cash provided by operating activities:
Gain on sale of assets	(147		)	(763		)
Gain on sale of assets and other							(262		)	(1,287		)
Depreciation and amortization	26,881			21,485			19,515			19,633
Write-off of software development project	—			153
Loss in equity method investment, before tax	53			—
Gain (adjustment) on bargain purchase of a business	(6,336		)	—
Gain on disposal of a business	(443		)	—
Deferred income taxes	2,552			1,481
Noncash lease expense							3,243			—
Deferred income taxes and other long-term liabilities							1,911			1,546
Noncash compensation related to stock plans	11,816			9,707			6,600			6,020
Excess tax benefit of options exercised and restricted stock units vested	—			(162		)
Recovery (provision) of doubtful accounts	79			(131		)
Provision of doubtful accounts							98			290
Changes in operating assets and liabilities, net of acquisitions:
Trade accounts receivable	(40,607		)	(35,463		)	(45,078		)	(76,838		)
Inventories	1,813			(22,992		)	9,708			(7,739		)
Trade accounts payable	698			2,806			4,318			19,193
Income taxes payable	1,686			6,745
Accrued profit sharing trust contributions	(902		)	(637		)
Accrued cash profit sharing and commissions	2,468			8,636
Other current assets	132			(2,751		)	(1,269		)	3,794
Accrued liabilities	5,291			6,611
Long-term liabilities	(234		)	(1,222		)
Accrued workers’ compensation	(21		)	(432		)
Other noncurrent assets	280			1,471
Accrued liabilities and other current liabilities							(3,852		)	20,254
Other noncurrent assets and liabilities							(3,590		)	983
Net cash provided by operating activities	84,591			66,883			53,581			55,364
Cash flows from investing activities
Capital expenditures	(45,106		)	(29,934		)	(15,259		)	(19,040		)
Asset acquisitions, net of cash acquired	(27,921		)	(5,361		)	(3,492		)	—
Proceeds from sale of property and equipment	617			1,278			2,493			2,017
Proceeds from sale of a business	9,613			—
Net cash used in investing activities	(62,797		)	(34,017		)	(16,258		)	(17,023		)
Cash flows from financing activities
Deferred and contingent consideration paid for asset acquisitions	(205		)	(27		)
Repurchase of common stock	(20,000		)	(53,502		)	(30,000		)	(25,439		)
Repayment of long-term borrowings and capital leases	(360		)	—
Repayment of debt and line of credit borrowings	(133		)	—
Debt issuance costs	—			(1,125		)
Issuance of common stock	3,566			6,695
Excess tax benefit of options exercised and restricted stock units vested	—			162
Proceeds from line of credit							10,742			—
Repayments of line of credit and capital leases							(10,726		)	(437		)
Issuance of common stock for exercise of options							—			695
Dividends paid	(27,044		)	(24,152		)	(19,726		)	(19,546		)
Cash paid on behalf of employees for shares withheld	(5,166		)	(3,996		)	(5,899		)	(5,111		)
Net cash used in financing activities	(49,342		)	(75,945		)	(55,609		)	(49,838		)
Effect of exchange rate changes on cash and cash equivalents	5,182			2,974			(163		)	(1,982		)
Net decrease in cash and cash equivalents	(22,366		)	(40,105		)	(18,449		)	(13,479		)
Cash and cash equivalents at beginning of period	226,537			258,825			160,180			168,514
Cash and cash equivalents at end of period	$	204,171		$	218,720		$	141,731		$	155,035
Noncash activity during the period
Noncash capital expenditures	$	892		$	726		$	1,636		$	290
Capital lease obligations	4,362			—
Dividends declared but not paid	19,891			8,559			10,284			10,190
Contingent consideration for acquisition	1,314			—
Issuance of Company’s common stock for compensation	412			315			292			465



ý☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



o☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


						Additional						Accumulated Other														Additional						Accumulated Other
	Common Stock					Paid-in			Retained			Comprehensive			Treasury						Common Stock					Paid-in			Retained			Comprehensive			Treasury
	Shares		Par Value			Capital			Earnings			Income (Loss)			Stock			Total			Shares		Par Value			Capital			Earnings			Income (Loss)			Stock			Total
Balance at January 1, 2016	48,184		$	481		$	238,212		$	639,707		$	(28,576	)	$	—		$	849,824
Balance at January 1, 2018																					46,745		$	473		$	260,157		$	676,644		$	(12,496	)	$	(40,000	)	$	884,778
Net income	—		—			—			72,341			—			—			72,341			—		—			—			69,515			—			—			69,515
Translation adjustment, net of tax	—		—			—			—			5,244			—			5,244			—		—			—			—			(7,583		)	—			(7,583		)
Options exercised	227		3			6,692			—			—			—			6,695			23		—			695			—			—			—			695
Stock-based compensation	—		—			9,039			—			—			—			9,039			—		—			5,531			—			—			—			5,531
Tax benefit of options exercised	—		—			140			—			—			—			140
Adoption of ASC 606, net of tax																					—		—						791			—			—			791
Shares issued from release of Restricted Stock Units	216		2			(3,998		)	—			—			—			(3,996		)	176		2			(5,113		)	—			—			—			(5,111		)
Repurchase of common stock	(1,090	)	—			(6,500		)	—			—			(47,002		)	(53,502		)	(627	)	—			10,000			—			—			(35,439		)	(25,439		)
Cash dividends declared on common stock, $0.52 per share	—		—			—			(24,996		)	—			—			(24,996		)
Common stock issued at $32.45 per share for stock bonus	10		—			315			—			—			—			315
Balance at September 30, 2016	47,547		486			243,900			687,052			(23,332		)	(47,002		)	861,104
Retirement of treasury stock																					—		(13		)				(74,986		)	—			74,999			—
Cash dividends declared on common stock, $0.43 per share																					—		��						(19,840		)	—			—			(19,840		)
Common stock issued at $57.41 per share for stock bonus																					8		—			465			—			—			—			465
Balance, at June 30, 2018																					46,325		462			271,735			652,124			(20,079		)	(440		)	903,802
Net income	—		—			—			17,393			—						17,393			—		—			—			57,118			—						57,118
Translation adjustment, net of tax	—		—			—			—			(9,164		)	—			(9,164		)	—		—			—			—			(5,328		)	—			(5,328		)
Pension adjustment, net of tax	—		—			—			—			(474		)	—			(474		)	—		—			—			—			376			—			376
Options exercised	43		—			1,281			—			—			—			1,281
Stock-based compensation	—		—			4,147			—			—			—			4,147			—		—			4,803			—			—			—			4,803
Tax benefit of options exercised	—		—			111			—			—			—			111
Adoption of new accounting standards																					—		—			—			(381		)	381			—			—
Shares issued from release of Restricted Stock Units	1		—			(22		)	—			—			—			(22		)	1		—			(34		)	—			—			—			(34		)
Repurchase of common stock	(154	)	—			6,500			—			—			(6,500		)	—			(1,328	)	—			—			—			—			(85,101		)	(85,101		)
Retirement of common stock	—		(13		)	—			(53,489		)	—			53,502			—			—		(9		)	—			(60,532		)	—			60,541			—
Cash dividends declared on common stock, $0.18 per share	—		—			—			(8,534		)	—			—			(8,534		)
Balance at December 31, 2016	47,437		473			255,917			642,422			(32,970		)	—			865,842
Cash dividends declared on common stock, $0.44 per share																					—		—			—			(20,122		)	—			—			(20,122		)
Balance, at December 31, 2018																					44,998		453			276,504			628,207			(24,650		)	(25,000		)	855,514
Net income	—		—			—			79,532			—			—			79,532			—		—			—			62,239			—			—			62,239
Translation adjustment, net of tax	—		—			—			—			19,492			—			19,492			—		—			—			—			(28		)	—			(28		)
Options exercised	120		1			3,565			—			—			—			3,566
Pension adjustment, net of tax																					—		—			—			—			100			—			100
Stock-based compensation	—		—			10,764			—			—			—			10,764			—		—			6,127			—			—			—			6,127
Shares issued from release of Restricted Stock Units	210		2			(5,168		)	—			—			—			(5,166		)	177		2			(5,899		)	—			—			—			(5,897		)
Repurchase of common stock	(461	)	—			—			—			—			(20,000		)	(20,000		)	(505	)	—			—			—			—			(30,000		)	(30,000		)
Cash dividends declared on common stock, $0.81 per share	—		—			—			(38,400		)	—			—			(38,400		)
Common stock issued at $44.26 per share for stock bonus	9		—			412			—			—			—			412
Balance at September 30, 2017	47,315		$	476		$	265,490		$	683,554		$	(13,478	)	$	(20,000	)	$	916,042
Retirement of treasury stock																					—		(9		)	—			(54,991		)	—			55,000			—
Cash dividends declared on common stock, $0.45 per share																					—		—			—			(19,926		)	—			—			(19,926		)
Common stock issued at $54.31 per share for stock bonus																					5		—			292			—			—			—			292
Balance at June 30, 2019																					44,675		$	446		$	277,024		$	615,529		$	(24,578	)	$	—		$	868,421



	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands, except per share amounts)	2017		2016		2017		2016
Net income available to common stockholders	$	28,197	$	29,797	$	79,532	$	72,341
Basic weighted-average shares outstanding	47,367		48,119		47,544		48,231
Dilutive effect of potential common stock equivalents — stock options and restricted stock units	319		233		299		198
Diluted weighted-average shares outstanding	47,686		48,352		47,843		48,429
Earnings per common share:
Basic	$	0.60	$	0.62	$	1.67	$	1.50
Diluted	$	0.59	$	0.62	$	1.66	$	1.49
Potentially dilutive securities excluded from earnings per diluted share because their effect is anti-dilutive	—		—		—		—



	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2017		2016		2017		2016
Stock-based compensation expense recognized in operating expenses	$	370	$	3,141	$	10,942	$	8,995
Less: Tax benefit of stock-based compensation expense in provision for income taxes	58		1,112		3,962		3,262
Stock-based compensation expense, net of tax	$	312	$	2,029	$	6,980	$	5,733
Fair value of shares vested	$	428	$	3,088	$	10,764	$	9,039
Proceeds to the Company from the exercise of stock-based compensation	$	2,268	$	4,166	$	3,566	$	6,695
Tax effect from the exercise of stock-based compensation, including shortfall tax benefits ⁽¹⁾	$	—	$	121	$	—	$	140



	At September 30,				At December 31,
(in thousands)	2017		2016		2016
Money market funds	$	5,409	$	13,334	$	2,832



	Three Months Ended September 30,						Nine Months Ended September 30,
(in thousands, except percentages)	2017			2016			2017			2016
Effective tax rate	37.0		%	34.8		%	34.0		%	35.9		%
Provision for income taxes	$	16,581		$	15,898		$	40,972		$	40,601



(In thousands)
Assets *
	Cash and cash equivalents	$	3,956
	Accounts receivable	4,914
	Inventory	13,591
	Other current assets	760
	Property, plant, equipment and noncurrent assets	3,929
		27,150
Liabilities
	Accounts payable	4,500
	Other current liabilities	6,146
		10,646

Total net assets		16,504
	Gain (adjustment) on bargain purchase of a business	(6,336		)
	Total purchase price	$	10,168
*	Intangible assets acquired were determined to have little to no value, thus were not recognized.



	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands, except per share amounts)	2019		2018		2019		2018
Net income available to common stockholders	$	39,577	$	44,086	$	62,239	$	69,515
Basic weighted-average shares outstanding	44,671		46,323		44,772		46,468
Dilutive effect of potential common stock equivalents — restricted stock units	301		354		317		374
Diluted weighted-average shares outstanding	44,972		46,677		45,089		46,842
Net income per common share:
Basic	$	0.89	$	0.95	$	1.39	$	1.50
Diluted	$	0.88	$	0.94	$	1.38	$	1.48



	At June 30,						At December 31,
(in thousands)	2019			2018			2018
Trade accounts receivable	$	195,767		$	215,174		$	149,886
Allowance for doubtful accounts	(1,279		)	(1,223		)	(1,364		)
Allowance for sales discounts and returns	(3,206		)	(2,772		)	(2,470		)
	$	191,282		$	211,179		$	146,052


	At September 30,						At December 31,			At June 30,						At December 31,
(in thousands)	2017			2016			2016			2019			2018			2018
Land	$	33,030		$	30,217		$	32,127		$	29,343		$	32,121		$	30,034
Buildings and site improvements	201,877			176,430			183,882			198,129			209,888			198,809
Leasehold improvements	5,911			5,682			5,550			5,016			4,709			4,826
Machinery, equipment, and software	289,970			249,227			248,861			339,885			320,131			330,076
	530,788			461,556			470,420			572,373			566,849			563,745
Less accumulated depreciation and amortization	(297,321		)	(275,096		)	(273,302		)	(334,293		)	(313,088		)	(318,388		)
	233,467			186,460			197,118			238,080			253,761			245,357
Capital projects in progress	31,711			43,210			35,692			14,630			15,366			9,240
	$	265,178		$	229,670		$	232,810		$	252,710		$	269,127		$	254,597


	At September 30, 2017							At June 30, 2019
	Gross					Net		Gross					Net
	Carrying		Accumulated			Carrying		Carrying		Accumulated			Carrying
(in thousands)	Amount		Amortization			Amount		Amount		Amortization			Amount
North America	$	33,923	$	(16,728	)	$	17,195	$	30,824	$	(17,586	)	$	13,238
Europe	29,430		(16,575		)	12,855		23,599		(13,846		)	9,753
Total	$	63,353	$	(33,303	)	$	30,050	$	54,423	$	(31,432	)	$	22,991


	At September 30, 2016							At June 30, 2018
	Gross					Net		Gross					Net
(in thousands)	Carrying Amount		Accumulated Amortization			Carrying Amount		Carrying Amount		Accumulated Amortization			Carrying Amount
North America	$	27,488	$	(17,347	)	$	10,141	$	30,715	$	(15,232	)	$	15,483
Europe	31,090		(16,602		)	14,488		23,884		(12,606		)	11,278
Total	$	58,578	$	(33,949	)	$	24,629	$	54,599	$	(27,838	)	$	26,761



	At December 31, 2018
	Gross					Net
(in thousands)	Carrying Amount		Accumulated Amortization			Carrying Amount
North America	$	30,825	$	(16,002	)	$	14,823
Europe	22,353		(12,774		)	9,579
Total	$	53,178	$	(28,776	)	$	24,402



	At December 31, 2016
	Gross					Net
(in thousands)	Carrying Amount		Accumulated Amortization			Carrying Amount
North America	$	23,562	$	(13,811	)	$	9,751
Europe	27,880		(14,767		)	13,113
Total	$	51,442	$	(28,578	)	$	22,864



(in thousands)

Remaining six months of 2019	$	2,725
2020	5,421
2021	4,942
2022	3,052
2023	2,248
2024	1,285
Thereafter	2,702
	$	22,375



(in thousands)

Remaining three months of 2017	$	1,635
2018	5,505
2019	5,185
2020	5,155
2021	4,675
2022	2,774
Thereafter	4,505
	$	29,434



			Intangible
(in thousands)	Goodwill		Assets
Balance at December 31, 2018	$	130,250	$	24,402
Acquisitions	1,815		1,213
Amortization	—		(2,657		)
Foreign exchange	247		33
Balance at June 30, 2019	$	132,312	$	22,991



	Condensed Consolidated Balance Sheets Line Item	Six Months Ended June 30,
(in thousands)		2019
Operating leases
Assets
Operating leases	Operating lease right-of-use assets	$	35,111
Liabilities
Operating - current	Accrued expenses and other current liabilities	$	6,647
Operating - noncurrent	Operating lease liabilities	28,164
Total operating lease liabilities		$	34,811

Finance leases
Assets
Property and equipment, gross	Property, plant and equipment, net	$	3,569
Accumulated amortization	Property, plant and equipment, net	(2,417		)
Property and equipment, net	Property, plant and equipment, net	$	1,152
Liabilities
Other current liabilities	Accrued expenses and other current liabilities	$	1,107
Other long-term liabilities	Deferred income tax and other long-term liabilities	1,047
Total finance lease liabilities		$	2,154



	Condensed Consolidated Statements of Operations Line Item	Three Months Ended June 30,		Six Months Ended June 30,
(in thousands)		2019		2019
Operating lease cost	General administrative expenses and cost of sales	$	2,272	$	4,426

Finance lease cost:
Amortization of right-of-use assets	General administrative expenses	$	218	436
Interest on lease liabilities	Interest expense, net	18		38
Total finance lease		$	236	$	474



Weighted-average remaining lease terms (in years):
Operating leases	6.92
Finance leases	1.93
Weighted-average discount rate:
Operating leases	5.37	%
Finance leases	3.22	%



	Shares		Weighted- Average Price		Aggregate Intrinsic Value *
Unvested Restricted Stock Units (RSUs)	(in thousands)		Weighted- Average Price		(in thousands)
Outstanding at January 1, 2017	615		$	31.81	26,915
Awarded	616
Vested	(327	)
Forfeited	(38	)
Outstanding at September 30, 2017	866		$	36.14	$	42,469
Outstanding and expected to vest at September 30, 2017	844		$	36.11	$	41,366


*	~~The intrinsic value is calculated using the closing price per share of $49.04 of the underlying Company's common stock as reported by the New York Stock Exchange on September 30, 2017.~~



	Shares		Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Life	Aggregate Intrinsic Value *
Non-Qualified Stock Options	(in thousands)				(in years)	(in thousands)
Outstanding at January 1, 2017	251		$	29.66	1.1	3,558
Exercised	(120	)
Forfeited	—
Outstanding and exercisable at September 30, 2017	131		$	29.66	0.3	$	2,534


*	The intrinsic value represents the amount, if any, by which the fair market value of the underlying Company's common stock exceeds the exercise price of the stock option, using the closing price per share of $49.04 such stock as reported by the New York Stock Exchange on September 30, 2017.



(in thousand)	North America		Europe		Asia/ Pacific		Admin & All Other	Total
2016 gross profit percentage	50	%	43	%	25	%	*	49	%
2017 gross profit percentage	48	%	38	%	10	%	*	46	%


•	Gain on sale of assets - In 2016, an eminent domain claim was exercised on land owned by the Company with an offer for the taking of the land. The Company challenged the offer, which resulted in the Company receiving an additional $1.0 million in the first quarter of 2018 for the taking of the land.


(in thousands)	Dividends Paid		Open Market Share Repurchases		Accelerated Share Repurchases		Total		Number of Shares Repurchased	Cash Paid for Share Repurchases		Cash paid for Dividends		Total
January 1 - September 30, 2017	$	27,044	$	—	$	20,000	$	47,044
January 1 - June 30, 2019									505	$	30,000	$	19,726	$	49,726
January 1 - December 31, 2018									1,955	110,540		39,891		150,431
January 1 - December 31, 2017									1,138	70,000		36,981		106,981
January 1 - December 31, 2016	32,711		3,502		50,000		86,213		1,244	53,502		32,711		86,213
January 1 - December 31, 2015	29,352		22,144		25,000		76,496		1,339	47,144		29,352		76,496
Total	$	89,107	$	25,646	$	95,000	$	209,753	6,181	$	311,186	$	158,661	$	469,847



	(a)	(b)	(c)	(d)
Period	Total Number of Shares Purchased	Average Price Paid per Share	Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs^[1]	Approximate Dollar Value of Shares that May Yet Be Purchased under the Plans or Programs
July 1 - July 31, 2017	—	N/A		$54.0 million^[1]
August 1 - August 31, 2017	35,887	43.39	35,887	$201.5 million^[2]
September 1 - September 30, 2017	—	N/A	—	$201.5 million^[2]
Total	35,887


3.1	Certificate of Incorporation of Simpson Manufacturing Co., Inc. is, as amended, are incorporated by reference to Exhibit 3.1 of its Quarterly Report on Form 10-Q ~~for the quarter ended September 30, 2007.~~filed on May 9, 2018.


3.2	~~Certificate of Incorporation of Simpson Manufacturing Co., Inc., as amended, is incorporated by reference to Exhibit 3.1 of its Current Report on Form 8-K dated March 28, 2017~~.


~~3.3~~	Amended and Restated Bylaws of Simpson Manufacturing Co., Inc., as amended, are incorporated by reference to Exhibit 3.2 of its Current Report on Form 8-K dated March 28, 2017.


~~4.1~~	Certificate of Designation, Preferences and Rights of Series A Participating Preferred Stock of Simpson Manufacturing Co., Inc., dated July 30, 1999, is incorporated by reference to Exhibit 4.2 of its Registration Statement on Form 8-A dated August 4, 1999.


31.1	Chief Executive Officer's Rule 13a-14(a)/15d-14(a) Certifications is filed herewith.

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