SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



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

For the quarterly period ended: ~~September 30, 2017~~March 31, 2021



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

For the transition period from to

Commission file number: 1-13429

Simpson Manufacturing Co., Inc.

(Exact name of registrant as specified in its charter)



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

5956 W. Las Positas Blvd., Pleasanton, CA 94588

(Address of principal executive ~~offices)~~offices, including zip code)

(925) 560-9000

(Registrant’s telephone number, including area code): ~~(925) 560-9000~~


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

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý No o

Indicate by check mark whether the registrant has submitted electronically ~~and posted on its corporate Web site, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit ~~and post~~ such files).

Yes ý No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer

o☐

Non-accelerated filer

o☐

~~(Do not check if a smaller reporting company)~~

Smaller reporting company

o☐

Emerging growth company

o☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o☐ No ý

Securities registered pursuant to Section 12(b) of the Act:

The number of shares of the registrant’s common stock outstanding as of ~~September 30, 2017: 47,313,707.~~May 3, 2021:43,430,766

~~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 March 31, 2021, 2020 and December 31, 2020	4
	Condensed Consolidated Statements of Earnings and Comprehensive Income (unaudited) for the Three Months Ended March 31, 2021 and 2020	5
	Condensed Consolidated Statements of Stockholders' Equity (unaudited) for the Three Months ended March 31, 2021 and 2020	6
	Condensed Consolidated Statements of Cash Flows (unaudited) for the Three Months Ended March 31, 2021 and 2020	7
	Notes to Condensed Consolidated Financial Statements	8
Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations		21
Item 3 - Quantitative and Qualitative Disclosures about Market Risk		29
Item 4 - Controls and Procedures		30
Part II - Other Information
Item 1 - Legal Proceedings		30
Item 1A - Risk Factors		31
Item 2 - Unregistered Sales of Equity Securities and Use of Proceeds		31
Item 3 - Defaults Upon Senior Securities		32
Item 4 - Mine Safety Disclosures		32
Item 5 - Other Information		32
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)


	March 31,				December 31,
	2021		2020		2020
ASSETS
Current assets
Cash and cash equivalents	$	257,428	$	301,741	$	274,639
Trade accounts receivable, net	227,201		168,736		165,128
Inventories	296,640		255,720		283,742

Other current assets	37,732		25,786		29,630
Total current assets	819,001		751,983		753,139

Property, plant and equipment, net	255,684		246,941		255,184
Operating lease right-of-use assets	44,236		33,725		45,792
Goodwill	133,477		131,599		135,844

Intangible assets, net	25,059		23,454		26,800
Other noncurrent assets	17,270		10,546		15,810
Total assets	$	1,294,727	$	1,198,248	$	1,232,569
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Trade accounts payable	$	66,236	$	44,505	$	48,271
Accrued liabilities and other current liabilities	158,578		118,346		145,790



Total current liabilities	224,814		162,851		194,061
Operating lease liabilities	35,810		26,084		37,199
Long term debt, net of current portion	0		150,000		0
Deferred income tax and other long-term liabilities	19,594		17,719		20,366
Total liabilities	280,218		356,654		251,626
Commitments and contingencies (see Note 13)	0		0		0
Stockholders’ equity
Common stock, at par value	435		444		433
Additional paid-in capital	285,896		272,872		284,007
Retained earnings	760,862		672,485		720,441
Treasury stock	(13,510)		(72,058)		(13,510)
Accumulated other comprehensive loss	(19,174)		(32,149)		(10,428)
Total stockholders’ equity	1,014,509		841,594		980,943
Total liabilities and stockholders’ equity	$	1,294,727	$	1,198,248	$	1,232,569

The accompanying notes are an integral part of these condensed consolidated financial statements

September 30, December 31,
2017 2016 2016
ASSETS

Current assets

Cash and cash equivalents $ 204,171
$ 218,720
$ 226,537
Trade accounts receivable, net 159,571
141,716
112,423
Inventories 244,476
220,207
232,274
Other current assets 13,276
12,321
14,013
Total current assets 621,494
592,964
585,247

Property, plant and equipment, net 265,178
229,670
232,810
Goodwill 137,313
126,845
124,479
Equity investment (see Note 6) 2,582
—
2,500
Intangible assets, net 30,050
24,629
22,864
Other noncurrent assets 11,766
10,195
12,074
Total assets $ 1,068,383
$ 984,303
$ 979,974
LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities

Capital lease obligations - current portion $ 1,047
$ —
$ —
Trade accounts payable 30,857
24,777
27,674
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
Total current liabilities 142,533
117,382
108,796

Capital lease obligations - net of current portion 2,875
—
—
Deferred income tax and other long-term liabilities 6,933
5,817
5,336
Total liabilities 152,341
123,199
114,132
Commitments and contingencies (see Note 8)

Stockholders’ equity

Common stock, at par value 476
486
473
Additional paid-in capital 265,490
243,900
255,917
Retained Earnings 683,554
687,052
642,422
Treasury stock (20,000 ) (47,002 ) —
Accumulated other comprehensive loss (13,478 ) (23,332 ) (32,970 )
Total stockholders’ equity 916,042
861,104
865,842
Total liabilities and stockholders’ equity $ 1,068,383
$ 984,303
$ 979,974

Simpson Manufacturing Co., Inc. and Subsidiaries

Condensed Consolidated Statements of ~~Operations~~Earnings and Comprehensive Income

(In thousands except per-share amounts, unaudited)

Three Months Ended Nine Months Ended
September 30, September 30,
2017 2016 2017 2016
Net sales $ 262,476
$ 230,974
$ 745,345
$ 660,470
Cost of sales 142,591
117,499
401,779
342,985
Gross profit 119,885
113,475
343,566
317,485
Operating expenses:
Research and development and other engineering 8,679
10,932
35,051
33,807
Selling 28,156
24,304
86,150
74,313
General and administrative 36,501
32,543
108,049
96,786
Net gain on disposal of assets (147 ) (81 ) (147 ) (763 )
73,189
67,698
229,103
204,143
Income from operations 46,696
45,777
114,463
113,342
Loss in equity method investment, before tax (13 ) —
(53 ) —
Interest expense, net (296 ) (82 ) (685 ) (400 )
Gain (adjustment) on bargain purchase of a business (2,052 ) —
6,336
—
Gain on disposal of a business 443
—
443
—
Income before taxes 44,778
45,695
120,504
112,942
Provision for income taxes 16,581
15,898
40,972
40,601
Net income $ 28,197
$ 29,797
$ 79,532
$ 72,341

Earnings per common share:

Basic $ 0.60
$ 0.62
$ 1.67
$ 1.50
Diluted $ 0.59
$ 0.62
$ 1.66
$ 1.49

Number of shares outstanding

Basic 47,367
48,119
47,544
48,231
Diluted 47,686
48,352
47,843
48,429

Cash dividends declared per common share $ 0.42
$ 0.18
$ 0.81
$ 0.52

~~Simpson Manufacturing Co., Inc. and Subsidiaries~~

~~Condensed Consolidated Statements of Comprehensive Income~~

~~(In thousands, unaudited)~~


	Three Months Ended
	March 31,
		2021		2020
Net sales		$	347,642	$	283,668
Cost of sales		185,360		154,002
Gross profit		162,282		129,666
Operating expenses:
Research and development and other engineering		14,591		13,382
Selling		30,823		28,527
General and administrative		48,565		38,471
Total operating expenses		93,979		80,380
Net gain on disposal of assets		(80)		(64)
Income from operations		68,383		49,350
Interest expense, net and other		(1,778)		(2,533)
Income before taxes		66,605		46,817
Provision for income taxes		16,218		9,991
Net income		$	50,387	$	36,826
Other comprehensive income
Translation adjustment		(9,264)		(7,593)
Unamortized pension adjustments		492		273
Unrealized gains on derivative instruments		26		0
Comprehensive net income		$	41,641	$	29,506

Net income per common share:
Basic		$	1.16	$	0.84
Diluted		$	1.16	$	0.83

Number of shares outstanding
Basic		43,379		44,099
Diluted		43,612		44,286

Cash dividends declared per common share		$	0.23	$	0.23

The accompanying notes are an integral part of these condensed consolidated financial statements

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

Simpson Manufacturing Co., Inc. and Subsidiaries

Condensed Consolidated Statements of Stockholders’ Equity

~~At September 30, 2016 and 2017, and December 31, 2016~~

(In thousands except per-share ~~amounts, unaudited)~~data)

Three Months Ended March 31, 2021 and 2020 (unaudited)


	Common Stock			Additional Paid-in		Retained		Accumulated Other Comprehensive		Treasury
	Shares	Par Value		Capital		Earnings		Income (Loss)		Stock		Total
Balance at December 31, 2020	43,326	$	433	$	284,007	$	720,441	$	(10,428)	$	(13,510)	$	980,943
Net income	—	—		—		50,387		—		—		50,387
Translation adjustment, net of tax	—	—		—		—		(9,264)		—		(9,264)
Pension adjustment and other, net of tax	—	—		—		—		492		—		492
Unrealized gains on derivative instruments								26				26
Stock-based compensation	—	—		6,462		—		—		—		6,462
Shares issued from release of Restricted Stock Units	97	1		(5,264)		—		—		—		(5,263)

Cash dividends declared on common stock, $0.23 per share	—	—		—		(9,966)		—		—		(9,966)
Common stock issued at $93.45 per share for stock bonus	7	1		691		—		—		—		692
Balance at March 31, 2021	43,430	$	435	$	285,896	$	760,862	$	(19,174)	$	(13,510)	$	1,014,509

Balance at December 31, 2019	44,209	$	442	$	280,216	$	645,507	$	(24,829)	$	(9,379)	$	891,957
Net income	—	—		—		36,826		—		—		36,826
Translation adjustment and other, net of tax	—	—		—		—		(7,593)		—		(7,593)
Pension adjustment, net of tax	—	—		—		—		273		—		273
Stock-based compensation	—	—		33		—		—		—		33
Shares issued from release of Restricted Stock Units	153	2		(7,699)		—		—		—		(7,697)
Repurchase of common stock	(902)	—		—		—		—		(62,679)		(62,679)

Cash dividends declared on common stock, $0.23 per share	—	—		—		(9,848)		—		—		(9,848)
Common stock issued at $80.38 per share for stock bonus	4	—		322		—		—		—		322
Balance, at March 31, 2020	43,464	$	444	$	272,872	$	672,485	$	(32,149)	$	(72,058)	$	841,594

The accompanying notes are an integral part of these condensed consolidated financial statements

Additional
Accumulated
Other

Common Stock Paid-in Retained Comprehensive Treasury
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
Net income —
—
—
72,341
—
—
72,341
Translation adjustment, net of tax —
—
—
—
5,244
—
5,244
Options exercised 227
3
6,692
—
—
—
6,695
Stock-based compensation —
—
9,039
—
—
—
9,039
Tax benefit of options exercised —
—
140
—
—
—
140
Shares issued from release of Restricted Stock Units 216
2
(3,998 ) —
—
—
(3,996 )
Repurchase of common stock (1,090 ) —
(6,500 ) —
—
(47,002 ) (53,502 )
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
Net income —
—
—
17,393
—

17,393
Translation adjustment, net of tax —
—
—
—
(9,164 ) —
(9,164 )
Pension adjustment, net of tax —
—
—
—
(474 ) —
(474 )
Options exercised 43
—
1,281
—
—
—
1,281
Stock-based compensation —
—
4,147
—
—
—
4,147
Tax benefit of options exercised —
—
111
—
—
—
111
Shares issued from release of Restricted Stock Units 1
—
(22 ) —
—
—
(22 )
Repurchase of common stock (154 ) —
6,500
—
—
(6,500 ) —
Retirement of common stock —
(13 ) —
(53,489 ) —
53,502
—
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
Net income —
—
—
79,532
—
—
79,532
Translation adjustment, net of tax —
—
—
—
19,492
—
19,492
Options exercised 120
1
3,565
—
—
—
3,566
Stock-based compensation —
—
10,764
—
—
—
10,764
Shares issued from release of Restricted Stock Units 210
2
(5,168 ) —
—
—
(5,166 )
Repurchase of common stock (461 ) —
—
—
—
(20,000 ) (20,000 )
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

Simpson Manufacturing Co., Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(In thousands, unaudited)


	Three Months Ended
	March 31,
	2021		2020
Cash flows from operating activities
Net income	$	50,387	$	36,826
Adjustments to reconcile net income to net cash provided by operating activities:
Loss/(gain) on sale of assets and other	333		(58)
Depreciation and amortization	11,225		9,734
Noncash lease expense	2,393		1,997

Deferred income taxes	314		1,430
Noncash compensation related to stock plans	6,542		277
Provision of doubtful accounts	(215)		721
Changes in operating assets and liabilities:
Trade accounts receivable	(62,660)		(32,161)
Inventories	(14,750)		(5,962)
Trade accounts payable	17,301		11,018
Other current assets	(14,109)		(6,821)
Accrued liabilities and other current liabilities	22,126		(4,927)
Other noncurrent assets and liabilities	(1,054)		651
Net cash provided by operating activities	17,833		12,725
Cash flows from investing activities
Capital expenditures	(10,505)		(6,795)

Invest in equity investments	(5,329)		0
Proceeds from sale of property and equipment	105		561
Net cash used in investing activities	(15,729)		(6,234)
Cash flows from financing activities

Repurchase of common stock	0		(62,679)
Proceeds from lines of credit	0		154,529
Repayments of lines of credit and capital leases	(192)		(5,415)

Dividends paid	(9,967)		(10,169)
Cash paid on behalf of employees for shares withheld	(5,263)		(7,699)
Net cash used by in financing activities	(15,422)		68,567
Effect of exchange rate changes on cash and cash equivalents	(3,893)		(3,527)
Net (decrease) increase in cash and cash equivalents	(17,211)		71,531
Cash and cash equivalents at beginning of period	274,639		230,210
Cash and cash equivalents at end of period	$	257,428	$	301,741
Noncash activity during the period
Noncash capital expenditures	$	1,526	$	289

Dividends declared but not paid	9,967		10,204

Issuance of Company’s common stock for compensation	692		322

The accompanying notes are an integral part of these condensed consolidated financial statements

Nine Months Ended
September 30,
2017 2016
Cash flows from operating activities

Net income $ 79,532
$ 72,341
Adjustments to reconcile net income to net cash provided by operating activities:

Gain on sale of assets (147 ) (763 )
Depreciation and amortization 26,881
21,485
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 compensation related to stock plans 11,816
9,707
Excess tax benefit of options exercised and restricted stock units vested —
(162 )
Recovery (provision) of doubtful accounts 79
(131 )
Changes in operating assets and liabilities, net of acquisitions:

Trade accounts receivable (40,607 ) (35,463 )
Inventories 1,813
(22,992 )
Trade accounts payable 698
2,806
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 )
Accrued liabilities 5,291
6,611
Long-term liabilities (234 ) (1,222 )
Accrued workers’ compensation (21 ) (432 )
Other noncurrent assets 280
1,471
Net cash provided by operating activities 84,591
66,883
Cash flows from investing activities

Capital expenditures (45,106 ) (29,934 )
Asset acquisitions, net of cash acquired (27,921 ) (5,361 )
Proceeds from sale of property and equipment 617
1,278
Proceeds from sale of a business 9,613
—
Net cash used in investing activities (62,797 )
(34,017 )
Cash flows from financing activities

Deferred and contingent consideration paid for asset acquisitions (205 ) (27 )
Repurchase of common stock (20,000 ) (53,502 )
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
Dividends paid (27,044 ) (24,152 )
Cash paid on behalf of employees for shares withheld (5,166 ) (3,996 )
Net cash used in financing activities (49,342 ) (75,945 )
Effect of exchange rate changes on cash and cash equivalents 5,182
2,974
Net decrease in cash and cash equivalents (22,366 ) (40,105 )
Cash and cash equivalents at beginning of period 226,537
258,825
Cash and cash equivalents at end of period $ 204,171
$ 218,720
Noncash activity during the period

Noncash capital expenditures $ 892
$ 726
Capital lease obligations 4,362
—
Dividends declared but not paid 19,891
8,559
Contingent consideration for acquisition 1,314
—
Issuance of Company’s common stock for compensation 412
315

~~Simpson Manufacturing Co., Inc. and Subsidiaries~~

Notes to Condensed Consolidated Financial Statements

(Unaudited)

1. Basis of Presentation

Principles of Consolidation

The accompanying condensed consolidated financial statements include the accounts of Simpson Manufacturing Co., Inc. and its subsidiaries (collectively, the “Company”). ~~There were no investments~~Investments in ~~affiliates that would render such affiliates to be considered variable interest entities.~~50% or less owned entities are accounted for using either cost or the equity method. All significant intercompany transactions have been eliminated.

Use of Estimates

The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States of America ("GAAP") requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Management believes that these consolidated financial statements include all normal and recurring adjustments necessary for a fair presentation under GAAP. We assessed certain accounting matters that require the use of estimates and assumptions in context with the known and projected future impacts of COVID-19. The Company's actual results could differ materially from those estimates.

Interim Reporting Period ~~Reporting~~

The accompanying unaudited ~~interim~~quarterly condensed consolidated financial statements have been prepared pursuant to the rules and regulations for reporting on Form 10-Q. Accordingly, certain information and footnotes required by ~~accounting principles generally accepted in the United States of America (“GAAP”)~~GAAP have been condensed or omitted. These interim statements should be read in conjunction with the audited consolidated financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, ~~2016.~~2020 (the “2020 Form 10-K”).

The unaudited quarterly condensed consolidated financial statements have been prepared on the same basis as the audited annual consolidated financial statements and, in the opinion of management, contain all adjustments (consisting of only normal recurring adjustments) necessary to state fairly the financial information set forth therein in accordance with GAAP. Certain prior period amounts in the condensed consolidated financial statements and the accompanying notes have been reclassified to conform to the current period’s presentation. The year-end condensed consolidated balance sheet data provided herein were derived from audited financial statements included in the 2020 Form 10-K, but do not include all disclosures required by GAAP. The Company’s quarterly results fluctuate. As a result, the Company believes the results of operations for this interim period presented are not indicative of the results to be expected for any future periods.

Revenue Recognition

Generally, the Company’s revenue contract with a customer exists when goods are shipped, and services (if any) are rendered; and its related invoice is generated. The duration of the contract does not extend beyond the promised goods or services already transferred. The transaction price of each distinct promised product or service specified in the invoice is based on its relative stated standalone selling price. The Company recognizes revenue when it satisfies a performance obligation by transferring control over a product to a customer at a point in time. The Company’s shipping terms provide the ~~earnings process is complete, net~~primary indicator of ~~applicable provision for discounts, returns and incentives, whether actual or estimated, based on~~ the ~~Company’s experience. This generally occurs when products are shipped to the customer in accordance with the sales agreement or purchase order, ownership and risk~~transfer of ~~loss pass to the customer, collectability is reasonably assured and pricing is fixed or determinable.~~control. The Company’s general shipping terms are F.O.B. shipping point, where title and ~~title is transferred~~risk and ~~revenue is recognized~~rewards of ownership transfer at the point when the products ~~are shipped to customers. When~~leave the ~~Company sells F.O.B. destination point, title is transferred and the~~Company’s warehouse. The Company recognizes revenue based on ~~delivery or~~the consideration specified in the invoice with a customer, ~~acceptance, depending~~excluding any sales incentives, discounts, and amounts collected on ~~terms~~behalf of third parties (i.e., governmental tax authorities). Based on historical experience with the ~~sales agreement. Service sales, representing after-market repair~~customer, the customer's purchasing pattern and ~~maintenance, engineering activities and software license sales and services, although less than 1.0%~~its significant experience selling products, the Company concluded that a significant reversal in the cumulative amount of ~~net sales and~~revenue recognized will not ~~material~~occur when the uncertainty (if any) is resolved (that is, when the total amount of purchases is known). Refer to the condensed consolidated financial statements, are recognized as the services are completed or the software products and services are delivered. If actual costs of sales returns, incentives and discounts were to significantly exceed the recorded estimated allowance, the Company’s sales would be adversely affected.Note 2 for additional information.

Net ~~Earnings~~Income Per Common Share

~~Basic earnings~~The Company calculates net income per common share ~~are computed~~ based on the weighted-average number of shares of the Company's common ~~shares outstanding.~~stock outstanding during the period. Potentially dilutive securities ~~using the treasury stock method,~~ are included in the diluted per-share calculations using the treasury stock method for all periods when the effect ~~of their inclusion~~ is dilutive.

Accounting for Leases

The ~~following is a reconciliation of basic earnings per common share to diluted earnings per share~~Company has operating and finance leases for ~~the three months~~certain facilities, equipment, autos and ~~nine months ended September 30, 2017 and 2016, respectively:~~

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 —
—
—
—

~~Dividend Declaration and Notice of Annual Meeting~~

~~On September 28, 2017, the Board of Directors of~~data centers. As an accounting policy for short-term leases, the Company ~~(the "Board") declared~~elected to not recognize the right-of-use asset and liability, if, at the commencement date, the lease (1) has a ~~cash dividend~~term of ~~$0.21per share, payable on January 25, 2018 to shareholders of record as of January 4, 2018~~12 months or less and ~~scheduled the Company’s 2018 annual meeting of stockholders for Monday, April 24, 2018.~~

~~Share Repurchases~~

~~During the third quarter of 2017,~~(2) does not include renewal and purchase options that the Company ~~received 35,887 shares of~~is reasonably certain to exercise. Monthly payments on short-term leases are recognized on the ~~Company's common stock pursuant to~~straight-line basis over the Company’s $20.0 million accelerated share repurchase program (the “ASR Program”) with Wells Fargo Bank, National Association, which constituted the final delivery under the ASR Program initiated in June 2017. In August 2017, the Board increased its previous $125 million share repurchase authorization by $150 million to $275 million and extended such authorization to December 31, 2018.full lease term.

Accounting for Stock-Based Compensation

The Company ~~currently maintains an equity incentive plan,~~recognizes stock-based compensation expense related to the ~~Simpson Manufacturing Co., Inc. Amended and Restated 2011 Incentive Plan (the “2011 Plan”), which was originally adopted~~estimated fair value of restricted stock awards on April 26, 2011, and was subsequently amended and restated on April 21, 2015. The 2011 Plan amended and restated in their entirety, and incorporated and superseded, both the Simpson Manufacturing Co., Inc. 1994 Stock Option Plan (the “1994 Plan”), which was principally for the Company’s employees, and the Simpson Manufacturing Co., Inc. 1995 Independent Director Stock Option Plan (the “1995 Plan”), which was for its independent directors. Awards previously granted under the 1994 Plan or the 1995 Plan were not affected by the adoptiona straight-line basis, net of ~~the 2011 Plan and continued to be governed by the 1994 Plan or the 1995 Plan, respectively.~~

Under the 1994 Plan and the 1995 Plan, the Company could grant incentive stock options and non-qualified stock options, although the Company granted only non-qualified stock options thereunder. The Company generally granted stock options under each of the 1994 Plan and the 1995 Plan once every year. Stock options vest and expire according to terms established at the grant date. Stock options granted under the 1994 Plan typically vested evenlyestimated forfeitures, over the requisite service period of ~~four years and have a~~the awards, which is generally the vesting term of ~~seven~~four years. ~~Stock options granted under~~Stock-based expense related to performance share grants are measured based on grant date fair value and expensed on a graded basis over the 1995 Plan typically fully vest on the date of grant. Shares of common stock issued on exercise of stock options under the 1994 Plan and the 1995 Plan are registered under the Securities Act of 1933, as amended (the "Securities Act").

Under the 2011 Plan, the Company may grant incentive stock options, non-qualified stock options, restricted stock and restricted stock units ("RSUs"), although the Company currently intends to award primarily performance-based and/or time-based RSUs and to a lesser extent, if at all, non-qualified stock options (see "Note 9 Stock-Based Incentive Plans") to its employees. The Company currently intends to grant RSUs that vest on the date of grant to its independent directors. The Company does not currently intend to award incentive stock options or restricted stock. Under the 2011 Plan, no more than 16.3 million sharesservice period of the ~~Company’s~~

~~common stock in aggregate may be issued under the 2011 Plan, including shares already issued pursuant to prior~~ awards, ~~and shares reserved for issuance on exercise~~which is generally a performance period of ~~options previously granted under the 1994 Plan and the 1995 Plan. Shares of common stock to be issued pursuant to the 2011 Plan~~three years. The performance conditions are ~~registered under the Securities Act.~~

Subject to certain adjustments, the following limits shall apply with respect to any awards under the 2011 Plan that are intended to qualify for the performance-based exception from the tax deductibility limitations of section 162(m) of the U.S. Internal Revenue Code of 1986, as amended from time to time: (i) the maximum aggregate number of shares of the Company’s common stock that may be subject to stock options granted in any calendar year to any one participant shall be 150,000 shares; and (ii) the maximum aggregate number of shares of the Company’s common stock issuable or deliverable under RSUs granted in any calendar year to any one participant shall be 100,000 shares.

~~The following table represents the Company’s stock-based compensation activity for the three months and nine months ended September 30, 2017 and 2016, respectively:~~

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

⁽¹⁾~~Zero balances in the three and nine months ended September 30, 2017 is the result of the Company's adoption of FASB issued~~

~~Accounting Standards Update No. 2016-09, Compensation - Stock Compensation (Topic 718)~~ ~~Improvements to Employee Share-~~

~~Based Payment Accounting~~ ~~("ASU 2016-09") on January 1, 2017, refer to~~ ~~Recently Adopted Accounting Standards~~ ~~below.~~

With respect to certain performance-based RSUs awarded to the Company's employees in February 2017, the achievement of their performance-based metrics was initially estimated as being probable , and therefore, their expense was recognized in the first two quarters of fiscal 2017. Based on updated information, the Company subsequently determined that the likelihood of achievement of the performance-based metrics is no longer probable for certain awards. As a result, the Company ceased recognition of expense in the three-month period ended September 30, 2017 and also reversed $1.6 million of expense during the three-month period ended September 30, 2017 recognized for such RSUs during the six months ended June 30, 2017.

~~The Company allocates stock-based compensation expenses among cost of sales, research and development and other engineering expense, selling expense, or general and administrative expense~~ based on the ~~job functions performed by~~Company's achievement of revenue growth and return on invested capital over the ~~employees~~performance period, and are evaluated for the probability of vesting at each reporting period end with changes in expected results recognized as an adjustment to ~~whom the stock-based compensation is awarded.~~expense. The assumptions used to calculate the fair value of ~~stock-based compensation~~restricted stock grants are evaluated and revised, as necessary, to reflect market conditions and the Company’s experience. ~~Stock-based compensation capitalized in inventory was $0.3 million and $0.5 million as of September 30, 2017 and 2016, respectively.~~

~~Fair~~0Fair Value of Financial Instruments

~~The “Fair Value Measurements~~Fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that is determined based on assumptions that market participants would use in pricing an asset or a liability. Assets and ~~Disclosures” topic of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) establishes~~liabilities recorded at fair value are measured and classified under a three-tier fair valuation hierarchy ~~for disclosure~~based on the observability of the inputs ~~used to measure fair value. This hierarchy prioritizes~~available in the ~~inputs into three broad levels as follows:~~market: Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities; Level 2 inputs are quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument; and Level 3 inputs are unobservable inputs based on the Company’s assumptions used to measure assets

and liabilities at fair value. ~~A financial asset’s or liability’s classification within the hierarchy is determined based on the lowest level input that is significant to the~~The fair value ~~measurement.~~

Ashierarchy requires an entity to maximize the use of ~~September 30, 2017~~observable inputs and ~~2016 and December 31, 2016,~~minimize the ~~Company’s investments consisted~~use of ~~only money market funds, which are the Company’s primary financial instruments, maintained in cash equivalents and carried at cost, approximating~~unobservable inputs when measuring fair ~~value, based on Level 1 inputs. The balances of the Company's primary financial instruments at the dates indicated were as follows:~~

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

value. The carrying amounts of trade accounts receivable, accounts payable, accrued liabilities and ~~accrued~~other current liabilities approximate fair value due to the short-term nature of these instruments. The fair value of the Company’s contingent consideration related to acquisitions isand equity investment are classified as Level 3 within the fair value hierarchy as it is based on unobserved inputs such as management estimates and entity-specific assumptions and is evaluated on an ongoing basis. ~~As of September 30, 2017, the estimated~~The fair value of foreign currency forward contracts, calculated based on Level 1 inputs, was not material as of March 31, 2021.

Derivative Instruments - Foreign Currency Contracts

The Company uses derivative instruments as a risk management tool to mitigate the potential impact of certain market risks. Foreign currency exchange rate risk is the primary market risk the Company manages through the use of derivative instruments, which are accounted for as cash flow hedges under the accounting standards and carried at fair value as other current assets or other current liabilities in the consolidated balance sheets. Net deferred gains and losses related to changes in fair value are included in accumulated other comprehensive loss, a component of shareholders' equity in the consolidated balance sheets, and are reclassified into the line item in the consolidated statement of income in which the hedged items are recorded in the same period the hedged item affects earnings. Changes in fair value of any derivatives that are determined to be ineffective are immediately reclassified from other comprehensive income into earnings. The cash flow impact of the Company's ~~contingent consideration was approximately~~derivative instruments is primarily included in the consolidated statement of cash flows in net cash provided by operating activities. Refer to Note 8.

Cash and Cash Equivalents

The Company classifies investments that are highly liquid and have maturities of three months or less at the date of purchase as cash equivalents. As of March 31, 2021 and 2020, the value of these investments were $28.2 million and $0.1 million, respectively, consisting of U.S. Treasury securities and money market funds. The value of the investments is based on cost, which approximates fair value based on Level 1 inputs.

Current Estimated Credit Loss - Allowance for doubtful accounts

The Company maintains an allowance for doubtful accounts receivable for estimated future expected credit losses resulting from customers' failure to make payments on its accounts receivable. The Company determines the estimate of the allowance for doubtful accounts receivable by considering several factors, including (1) specific information on the financial condition and the current creditworthiness of customers, (2) credit rating, (3) payment history and historical experience, (4) aging of the accounts receivable, and (5) reasonable and supportable forecasts about collectability. The Company also reserves 100% of the amounts deemed uncollectible due to a ~~total~~customer's deteriorating financial condition or bankruptcy.

Every quarter, the Company evaluates the customer group using the accounts receivable aging report and its best judgment when considering changes in customers' credit ratings, level of ~~$1.3 million.~~delinquency, customers' historical payments and loss experience, current market and economic conditions, and expectations of future market and economic conditions.

The changes in the allowance for doubtful accounts receivable for the year ended March 31, 2021 are outlined in the table below:


	Balance at		Amounts		Balance at
(in thousands)	December 31, 2020		Charged to Expense	Write-Offs1	March 31, 2021

Allowance for Doubtful Accounts	$	2,110	(215)	119	$	1,776

1Amount is net of recoveries and the effect of foreign currency fluctuations for the year ended March 31, 2021.

Income Taxes

The Company uses an estimated annual ~~effective~~ tax rate to measure the tax benefit or tax expense recognized in each interim period. ~~The following table presents the Company’s effective tax rates and income tax expense for the three months and nine months ended September 30, 2017 and 2016, respectively:~~

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

For the three months ended September 30, 2017, the Company's effective income tax rate increased to 37% from 35%, primarily due to a reduction of the nonrecurring bargain purchase gain related to the Gbo Fastening Systems acquisition (see "Gain (adjustment) on bargain purchase of a business" below ), which was not taxable.

For the nine months ended September 30, 2017, the Company's effective income tax rate decreased to 34.0% from 35.9%. The decrease was primarily due to an adjusted nonrecurring bargain purchase gain related to the Gbo Fastening Systems acquisition (see "Gain (adjustment) on bargain purchase of a business" below), which was not taxable, and the adoption of FASB Accounting Standards ~~Update No. 2016-09 on January 1, 2017 (see "Recently~~Not Yet Adopted Accounting Standards" below), which recognizes the excess tax benefits of stock-based awards as a reduction to income tax expense instead of the previous methodology which recorded the benefits on the balance sheets as a component of stockholders' equity.

~~Acquisitions~~

Under the business combinations topic of the FASB ASC 805, the Company accounts for acquisitions as business combinations and ascribes acquisition-date fair values to the acquired assets and assumed liabilities. Provisional fair value measurements are made at the time of the acquisitions. Adjustments to those measurements may be made in subsequent periods, up to one year from the acquisition date, as information necessary to complete the analysis is obtained. Fair value of intangible assets are generally based on Level 3 inputs.

~~Multi Services Dêcoupe S.A~~.

In August 2016, the Company purchased all of the outstanding shares of Multi Services Dêcoupe S.A. ("MS Decoupe"), a Belgium public limited company, for $6.9 million. MS Decoupe primarily manufactures and distributes wood construction, plastic, and

metal labeling products in Belgium and the Netherlands, including distributing the Company's products manufactured at the Company's production facility in France. With this acquisition, the Company could potentially offer the Belgium market a wider-range of its products, shorten delivery lead times, and expand the Company's sales presence into the Netherlands market. During the third quarter of 2017, the Company finalized its fair value measurement of assets acquired and liabilities assumed in this acquisition. MD Decoupe assets and liabilities included cash and cash equivalents of $1.4 million, other current assets of $1.6 million, noncurrent assets of $5.0 million, current liabilities of $0.6 million and noncurrent deferred income tax liabilities of $1.0 million. Included in noncurrent assets was goodwill of $1.4 million, which was assigned to the Europe segment, and intangible assets of $1.7 million, both of which are not subject to tax-deductible amortization. The estimated weighted-average amortization period for the intangible assets is 10 years.

~~CG Visions, Inc.~~

In January 2017, the Company acquired CG Visions, Inc. ("CG Visions") for up to approximately $20.8 million. CG Visions provides scalable technologies and services in building information modeling ("BIM") technologies, estimation tools and software solutions to a number of the top 100 mid-sized to large builders in the United States, which are expected to complement and support the Company's sales in North America. During the third quarter of 2017, the Company finalized its fair value measurement of assets acquired and liabilities assumed in this acquisition. CG Visions assets and liabilities included other current assets of $0.5 million, noncurrent assets of $20.4 million, current liabilities and contingent consideration of $1.1 million. Included in noncurrent assets was goodwill of $10.1 million, which was assigned to the North America segment, and intangible assets of $10.3 million, both of which are not subject to tax-deductible amortization. The estimated weighted-average amortization period for the intangible assets is 7 years.

~~Gbo Fastening Systems AB~~

In January 2017, the Company acquired Gbo Fastening Systems AB ("Gbo Fastening Systems"), a Sweden limited company, for approximately $10.2 million. Gbo Fastening Systems manufactures and sells a complete line of CE-marked structural fasteners as well as fastener dimensioning software for wood construction applications, currently sold mostly in northern and eastern Europe, which are expected to complement the Company's line of wood construction products in Europe.

~~Gain (Adjustment) on Bargain Purchase of a Business~~

In the first quarter of 2017, the Company recorded a preliminary nontaxable bargain purchase gain of $8.4 million, which was included in the condensed consolidated statements of operations. During the third quarter of 2017, the Company reevaluated the fair value of the assets acquired and liabilities assumed in Gbo Fastening Systems acquisition and recorded that the estimated fair value of the assets acquired and liabilities assumed was approximately $16.5 million. Consequently, a bargain purchase adjustment of $2.1 million was recorded resulting in a total of $6.3 million adjusted gain on bargain purchase of a business, which was included in the condensed consolidated statements of operation.

~~The following table represents the final allocation of the purchase price to the estimated fair value of the assets acquired and liabilities assumed in the Gbo Fastening Systems acquisition:~~

(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.

The results of operations of businesses acquired in 2016 through 2017 were included in the Company’s condensed consolidated results of operations since the date of the applicable acquisition. Such businesses are not material to the Company on an individual or aggregate basis, and accordingly, pro forma results of operations are not presented.

~~Sales of Gbo Poland and Gbo Romania~~

As a result of incompatibility with Simpson's market strategy, the Company completed the sale of all of its equity in Gbo Fastening Systems' Poland and Gbo Romania subsidiaries on September 29, 2017 and October 31, 2017, respectively, for approximately $10.2 million, resulting in a gain of $0.4 million which was presented in the accompanying condensed statements of operations.

~~Recently Adopted Accounting Standards~~

In March ~~2016,~~2020, the FASB issued Accounting Standards Update ~~No. 2016-09, Compensation - Stock Compensation~~("ASU") 2020-04, Reference Rate Reform (Topic ~~718),~~

~~Improvements~~848). ASU 2020-04 provides optional guidance to ~~Employee Share-Based Payment Accounting~~ ~~("ASU 2016-09")~~, ~~which amends existing guidance related to~~ease the potential burden in accounting for ~~employee share-based payments affecting~~reference rate reform on financial reporting in response to the ~~income tax consequences~~risk of ~~awards, classification~~cessation of ~~awards as equity or liabilities, and classification~~the London Interbank Offered Rate (“LIBOR”) on December 31, 2021. The ASU allows the statement of cash flows. ASU 2016-09 is effective for fiscal years, and interim periods within those fiscal years beginning after December 15, 2016, with early adoption permitted. On January 1, 2017, the Company adopted ASU 2016-09.

This new guidance requires all excess tax benefits and tax deficiencies be recognized as income tax expense or benefit in the income statement and classified as an operating activity in the statement of cash flows. The Company prospectively adopted this guidance with the tax impact of a $1.1 million tax benefit recognized in the consolidated income statements and classified it as an operating activity in the consolidated statement of cash flows. The guidance also requires a policy election either to estimate the number of awards that are expected to vest oroption to account for ~~forfeitures whenever they occur. The Company did not change its policy for calculating accrual compensation costs by estimating~~and present a modification that meets the ~~number~~scope of ~~awards that are expected to vest. Therefore, when~~ the Company adopted this guidance, there was no recognized cumulative effect adjustment to retained earnings. In addition, this guidance requires cash paid by an employer, when directly withholding shares for tax withholding purposes, to be classified in the statement of cash flows as a financing activity, which differs from the Company's previous method of classification of such cash paymentsstandard as an ~~operating activity. Accordingly,~~event that does not require contract remeasurement at the ~~Company applied this provision retrospectively and for~~modification date or reassessment of a previous accounting determination required under the ~~nine months~~

~~ended September 30, 2017 and 2016 and reclassified $5.2 million and $4.0 million, respectively, from operating activities~~relevant topic or subtopic. Generally, the ASU allows hedge accounting to ~~financing activities in~~continue if the ~~condensed consolidated statements of cash flows.~~

~~In March 2016, the FASB issued Accounting Standards Update No. 2016-07,~~ ~~Simplifying the Transition~~hedge was highly effective or met other standards prior to ~~the Equity Method of Accounting ("ASU 2016-07"), which eliminates the requirement~~reference rate reform. Entities are permitted to apply the ~~equity method~~amendments to all contracts, cash flow and net investment hedge relationships that exist as of ~~accounting retrospectively when~~March 12, 2020. The relief provided in this ASU is only available for a ~~reporting entity obtains significant influence over~~limited time, generally through December 31, 2022. The Company's Credit Facility maturing on July 23, 2022 bears interest using LIBOR plus an applicable margin. We do not expect a previously held investment. The amendments in ASU 2016-07 are effective for public companies for fiscal years beginning after December 15, 2016, including interim periods therein, with early adoption permitted. The new standard should be applied prospectively for investments that qualify formaterial impact to our consolidated operating results, financial position or cash flows from the ~~equity method~~transition from LIBOR to alternative reference interest rates, but we will continue to monitor the impact of accounting after the effective date. On January 1, 2017, the Company prospectively adopted ASU 2016-07. Adoption of ASU 2016-07 has had no material effect on the Company's consolidated financial statements and footnote disclosures.this transition until it is completed.

~~In January 2017, the FASB issued Accounting Standards Updated No. 2017-01, Business Combinations (Topic 805):~~ ~~Clarifying the Definition of a Business~~ ("ASU 2017-01"), which changes the definition of a business to assist entities with evaluating when a set of transferred assets and activities is a business. The new guidance clarifies that a business must also include at least one substantive process and narrows the definition of outputs by more closely aligning it with how outputs are described in ASC 606, Revenue from Contracts with Customers. ASU 2017-01 is effective for fiscal years, and interim periods within those fiscal years beginning after December 15, 2017, with early adoption permitted. On January 1, 2017, the Company prospectively adopted ASU 2017-01. Adoption of ASU 2017-01 has had no material effect on the Company's consolidated financial statements and footnote disclosures.

All ~~other~~ issued and effective accounting standards during ~~2017~~the first quarter of 2021 were determined to be not relevant or material to the Company.

~~Recently Issued Accounting Standards Not Yet Adopted~~

~~Other than the following, there have been no new developments to those recently issued accounting standards disclosed in the Company’s 2016 Annual Report on Form 10-K.~~

~~In May 2014, the FASB issued Accounting Standards Update No. 2014-09 (later codified as ASC 606),~~2. Revenue from Contracts with Customers ~~which supersedes nearly all existing~~

Disaggregated revenue ~~recognition guidance~~

The Company disaggregates net sales into the following major product groups as described in the footnote for segment information included in these interim financial statements under ~~GAAP. ASC 606 provides a five-step model for revenue recognition~~Note 14.

Wood Construction Products Revenue. Wood construction products represented 87% and 86% of total net sales in the three months ended March 31, 2021 and 2020, respectively.

Concrete Construction Products Revenue. Concrete construction products represented 13% and 14% of total net sales in the three months ended March 31, 2021 and 2020, respectively.

Customer acceptance criteria. Generally, there are no customer acceptance criteria included in the Company's standard sales agreement with customers. When an arrangement with the customer does not meet the criteria to be ~~applied to all~~accounted for as a revenue ~~contracts with customers. The five-step model includes: (1) determination of whether a~~ contract ~~an agreement between two or more parties that creates legally enforceable rights and obligations, exists; (2) identification of~~under the ~~performance obligations~~standard, the Company recognizes revenue in the ~~contract; (3) determination~~amount of nonrefundable consideration received when the ~~transaction price; (4) allocation~~Company has transferred control of the transaction price to the performance obligations in the contract; and (5) recognition of revenue when (or as) the performance obligation is satisfied. The core principle of ASC 606 is that an entity should recognize revenue for the transfer of goods or services ~~equal~~and has stopped transferring (and has no obligation to ~~the amount that it expects to be entitled to receive for those~~transfer) additional goods or services. ASC 606 also requires additional disclosures about the nature, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments. ASC 606 is effective for annual and interim periods beginning after December 15, 2017. The Company ~~will adopt~~offers certain customers discounts for paying invoices ahead of the ~~new standard~~due date, which are generally between 30 to 60 days after the issue date.

Other revenue. Service sales, representing after-market repair and maintenance, engineering activities and software license sales and services were less than 1.0% of net sales and recognized as the services are completed or by transferring control over a product to a customer at a point in time. Services may be sold separately or in bundled packages. The typical contract length for a service is generally less than one year. For bundled packages, the Company accounts for individual services separately when they are distinct within the context of the contract. A distinct service is separately identifiable from other items in the bundled package if a customer can benefit from the service on ~~January 1, 2018.~~

~~Company management has completed~~its own or with other resources that are readily available to the customer. The consideration (including any discounts) is allocated between separate services in a ~~review of our significant customer contracts and~~bundle based on their relative stand-alone selling prices. The stand-alone selling prices are determined based on the prices at which the Company separately sells the services.

Reconciliation of contract balances

Contract assets are the rights to consideration in exchange for goods or services that ~~preliminary review, we expect~~ the ~~adoption~~Company has transferred to a customer when that right is conditional on something other than the passage of ~~ASC 606 will~~time. Contract liabilities are recorded for any services billed to customers and not ~~result in material differences from our accounting for revenues under~~yet recognizable if the ~~current revenue recognition guidance effective~~contract period has commenced or for the amount collected from customers in advance of the contract period commencing. As of March 31, 2021, the Company ~~today.~~ had no contract assets or contract liabilities from contracts with customers.

3. Net Income Per Share

The following table reconciles basic net income per share of the Company's common stock to diluted net income per share for the three months ended March 31, 2021 and 2020, respectively:


	Three Months Ended March 31,
(in thousands, except per share amounts)		2021		2020
Net income available to common stockholders		$	50,387	$	36,826
Basic weighted-average shares outstanding		43,379		44,099
Dilutive effect of potential common stock equivalents — restricted stock units		233		187
Diluted weighted-average shares outstanding		43,612		44,286
Net income per common share:
Basic		$	1.16	$	0.84
Diluted		$	1.16	$	0.83

4. Stockholders' Equity

Treasury Shares

As of March 31, 2021, the Company held 150,974 shares of its common stock as treasury shares.

5. Stock-Based Compensation

The Company ~~has not yet completed~~allocates stock-based compensation expense related to equity plans for employees and non-employee directors among the ~~process~~cost of ~~quantifying~~sales, research and development and other engineering expense, selling expense, or general and administrative expense based on the ~~effects (if any) of changes that will result from adoption.~~

~~ASC 606 permits two methods of adoption: retrospectively~~job functions performed by the employees to ~~each prior reporting period presented (full retrospective method), or retrospectively with~~whom the ~~cumulative effect of initially applying the guidance recognized at the date of initial application(modified retrospective method).~~stock-based compensation is awarded. The Company ~~will adopt~~recognized stock-based compensation expense related to its equity plans for employees of $6.5 million and $0.3 million for the ~~new standard using~~three months ended March 31, 2021 and 2020, respectively. The $6.2 million increase in stock-based compensation expense was due to the ~~modified retrospective approach through a cumulative-effect adjustment (if any) to retained earnings as~~reevaluation of the ~~effective date. The Company is also identifying~~expected performance conditions and ~~preparing~~updated expected vesting during the first quarter of 2021 compared to ~~implement changes to our accounting policies and practices, business processes, systems and controls to support~~ the ~~enhanced disclosure requirements from ASC 606.~~first quarter of 2020.

~~In October 2016,~~During the ~~FASB issued Accounting Standards Update No. 2016-16, Income Taxes (Topic 740),~~ ~~Intra-Entity Transfers of Assets Other Than Inventory~~ ("ASU 2016-16"), which requires companies to account for the income tax effects of intercompany sales and transfers of assets other than inventory when the transfer occurs. Current guidance requires companies to defer the income tax effects of intercompany transfers of assets until the asset has been sold to an outside party or otherwise recognized. The amendment is to be applied using a modified retrospective approach. ASU 2016-16 is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years, with early adoption permitted. Based on current information

~~and subject to future events and circumstances,~~three months ended March 31, 2021, the Company ~~does not know whether ASU 2016-16 will have a material impact on its financial statements upon adoption.~~

~~In January 2017,~~granted 133,424 restricted stock units ("RSUs") to the ~~FASB issued Accounting Standards Update No. 2017-04, Intangibles - Goodwill and Other (Topic 350):~~ ~~Simplifying the Test for Goodwill Impairment~~ ~~("ASU 2017-04"), which eliminates the requirement to calculate the implied~~Company's employees, including officers at an estimated weighted average fair value of ~~goodwill to measure a goodwill impairment charge or Step 2 of the goodwill impairment analysis. Instead, an impairment charge will be recorded~~$100.26 per share based on the ~~excess~~closing price (adjusted for the present value of ~~a reporting unit's carrying amount over its fair value using Step 1~~dividends) of the ~~goodwill impairment analysis.~~Company's common stock on the grant date. The ~~standard is required~~RSUs granted to the Company's employees may be performance-based and/or time-based. Certain performance-based RSUs are granted to officers and key employees, where the number of performance-based awards to be ~~adopted for annual~~issued is based on the achievement of certain Company performance criteria established in the RSU agreement over a cumulative three-year period. These awards cliff vest after three years. In addition, these same officers and ~~interim impairment tests performed after December 15, 2019. The amendment~~key employees also receive time-based RSUs, which vest pursuant to a three-year graded vesting schedule. Time-based RSUs that are granted to the Company's employees excluding officers and certain key employees, vest ratably over the four year vesting-term of the award.

As of March 31, 2021, the Company's aggregate unamortized stock compensation expense was approximately $24.0 million, is expected to be applied prospectively. Early adoption is permitted for annual and interim goodwill impairment testing dates after January 1, 2017. Based on current information and subject to future events and circumstances, the Company does not know whether ASU 2017-04 will haverecognized in expense over a ~~material impact on its financial statements upon adoption.~~weighted-average period of 2.6 years.

6. Trade Accounts Receivable, Net

Trade accounts receivable at the dates indicated consisted of the following:


	At September 30,						At December 31,				At March 31,				At December 31,
(in thousands)	2017			2016			2016			(in thousands)	2021		2020		2020
Trade accounts receivable	$	165,101		$	145,966		$	116,368		Trade accounts receivable	$	232,646	$	174,853	$	170,001
Allowance for doubtful accounts	(1,166		)	(945		)	(895		)	Allowance for doubtful accounts	(1,776)		(2,761)		(2,110)
Allowance for sales discounts and returns	(4,364		)	(3,305		)	(3,050		)	Allowance for sales discounts and returns	(3,669)		(3,356)		(2,763)
	$	159,571		$	141,716		$	112,423			$	227,201	$	168,736	$	165,128

3.7. Inventories

Inventories at the dates indicated consisted of the following:


	At March 31,				At December 31,
(in thousands)	2021		2020		2020
Raw materials	$	94,340	$	89,903	$	95,777
In-process products	22,678		19,464		21,803
Finished products	179,622		146,353		166,162
	$	296,640	$	255,720	$	283,742

8. Derivative Instruments

The Company transacts business in various foreign countries and may therefore be exposed to foreign currency exchange rate risk. The Company has established risk management programs to protect against volatility in the value of non-functional future cash flows caused by changes in foreign currency exchange rates and tries to maintain a partial or fully hedged position for certain transaction exposures when management considers appropriate. The Company enters into short-term foreign currency derivatives contracts, namely forward contracts, to hedge only those currency exposures associated with cash flows denominated in non-functional currencies. Gains and losses on the Company's derivative contracts are designed to offset losses and gains on the transactions hedged, and accordingly, generally do not subject the Company to risk of significant accounting losses. The Company hedges committed exposures and does not engage in speculative transactions. The credit risk of these derivative contracts is minimized since the contracts are with a large financial institution and accordingly, fair value adjustments related to the credit risk of the counterparty financial institution are not material.

The Company sources certain materials for its concrete products from a wholly owned subsidiary in China, and as a result is exposed to variability in cash outflows associated with changes in the foreign exchange rate between the U.S. Dollar and the Chinese Yuan (CNY). As of March 31, 2021, the aggregate notional amount of the Company's outstanding foreign currency derivative contracts was to buy CNY62.2 million by selling $9.1 million throughout fiscal 2021. These forward contracts are accounted for as cash flow hedges under the accounting standards, and fair value is included in other current assets or other current liabilities, as applicable, in the consolidated balance sheet was $0.4 million.

Net deferred gains and losses on these contracts relating to changes in fair value are included in accumulated other comprehensive loss ("OCI"), a component of shareholders' equity in the consolidated balance sheets, and are reclassified into the line item in the consolidated statement of income in which the hedged items are recorded in the same period the hedged item affects earnings. There were no amounts recognized for gains or losses on these contracts during the quarter ended March 31, 2021.Changes in fair value of any forward contracts that are determined to be ineffective are immediately reclassified from OCI into earnings. The amounts deferred in OCI are expected to be recognized as a component of cost of sales in the consolidated statement of operations from 2021 to 2022. There were no amounts recognized due to ineffectiveness during the quarter ended March 31, 2021.

At September 30, At December 31,
(in thousands) 2017 2016 2016
Raw materials $ 87,100
$ 83,613
$ 86,524
In-process products 26,248
20,313
20,902
Finished products 131,128
116,281
124,848
$ 244,476
$ 220,207
$ 232,274

4.9. Property, Plant and Equipment, Net

Property, plant and equipment, net, at the dates indicated consisted of the following:


	At March 31,				At December 31,
(in thousands)	2021		2020		2020
Land	$	28,280	$	27,964	$	28,553
Buildings and site improvements	201,283		193,971		203,421
Leasehold improvements	7,023		4,832		7,091
Machinery, equipment, and software	385,195		354,931		372,923
	621,781		581,698		611,988
Less accumulated depreciation and amortization	(382,907)		(351,776)		(377,460)
	238,874		229,922		234,528
Capital projects in progress	16,810		17,019		20,656
	$	255,684	$	246,941	$	255,184

At September 30, At December 31,
(in thousands) 2017 2016 2016
Land $ 33,030
$ 30,217
$ 32,127
Buildings and site improvements 201,877
176,430
183,882
Leasehold improvements 5,911
5,682
5,550
Machinery, equipment, and software 289,970
249,227
248,861
530,788
461,556
470,420
Less accumulated depreciation and amortization (297,321 ) (275,096 ) (273,302 )
233,467
186,460
197,118
Capital projects in progress 31,711
43,210
35,692
$ 265,178
$ 229,670
$ 232,810

5.10. Goodwill and Intangible Assets, Net

Goodwill at the dates indicated was as follows:


	At September 30,				At December 31,			At March 31,				At December 31,
(in thousands)	2017		2016		2016		(in thousands)	2021		2020		2020
North America	$	95,781	$	85,988	$	85,488	North America	$	96,340	$	95,988	$	96,311
Europe	40,038		39,402		37,616		Europe	35,684		34,445		38,059
Asia/Pacific	1,494		1,455		1,375		Asia/Pacific	1,453		1,166		1,474
Total	$	137,313	$	126,845	$	124,479	Total	$	133,477	$	131,599	$	135,844

Intangible assets, net, at the dates indicated were as follows:


	At March 31, 2021
	Gross				Net
	Carrying		Accumulated		Carrying
(in thousands)	Amount		Amortization		Amount
North America	$	40,785	$	(23,724)	$	17,061
Europe	26,347		(18,349)		7,998
Total	$	67,132	$	(42,073)	$	25,059


	At September 30, 2017
	Gross					Net			At March 31, 2020
	Carrying		Accumulated			Carrying			Gross				Net
(in thousands)	Amount		Amortization			Amount		(in thousands)	Carrying Amount		Accumulated Amortization		Carrying Amount
North America	$	33,923	$	(16,728	)	$	17,195	North America	$	33,755	$	(20,039)	$	13,716
Europe	29,430		(16,575		)	12,855		Europe	25,410		(15,672)		9,738
Total	$	63,353	$	(33,303	)	$	30,050	Total	$	59,165	$	(35,711)	$	23,454

At September 30, 2016
Gross Net
(in thousands)
Carrying
Amount

Accumulated
Amortization

Carrying
Amount
North America $ 27,488
$ (17,347 ) $ 10,141
Europe 31,090
(16,602 ) 14,488
Total $ 58,578
$ (33,949 ) $ 24,629


	At December 31, 2016								At December 31, 2020
	Gross					Net			Gross				Net
(in thousands)	Carrying Amount		Accumulated Amortization			Carrying Amount		(in thousands)	Carrying Amount		Accumulated Amortization		Carrying Amount
North America	$	23,562	$	(13,811	)	$	9,751	North America	$	40,786	$	(22,697)	$	18,089
Europe	27,880		(14,767		)	13,113		Europe	26,341		(17,630)		8,711
Total	$	51,442	$	(28,578	)	$	22,864	Total	$	67,127	$	(40,327)	$	26,800

Intangible assets consist of definite-lived and indefinite-lived assets. Definite-lived intangible assets include customer relationships, patents, unpatented technology, and non-compete agreements. Amortization expense ~~for~~of definite-lived intangible assets ~~during~~was $1.7 million and $1.5 million for the three months ended ~~September 30, 2017~~March 31, 2021 and ~~2016, totaled $1.5 million and $1.5 million, respectively; and during the nine months ended September 30, 2017 and 2016, totaled $4.7 million and $4.6 million,~~2020, respectively. The weighted-average amortization period for all amortizable intangibles on a combined basis is 6.3 years.

The only indefinite-lived intangible asset, consisting of a trade name, totaled $0.6 million at ~~September 30, 2017.~~March 31, 2021.

At ~~September 30, 2017,~~March 31, 2021, the estimated future amortization of definite-lived intangible assets was as follows:

(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


(in thousands)

Remaining nine months of 2021	$	4,619
2022	4,223
2023	3,390
2024	2,343
2025	2,086
2026	1,483
Thereafter	6,300
	$	24,444

The changes in the carrying amount of goodwill and intangible assets for the ~~nine~~three months ended ~~September 30, 2017,~~March 31, 2021, were as follows:


			Intangible
(in thousands)	Goodwill		Assets
Balance at December 31, 2020	$	135,844	$	26,800

Reclassifications	(106)		348
Amortization	—		(1,746)
Foreign exchange	(2,261)		(343)
Balance at March 31, 2021	$	133,477	$	25,059

Intangible
(in thousands) Goodwill Assets
Balance at December 31, 2016 $ 124,479
$ 22,864
Acquisitions 10,066
10,351
Reclassifications (189 ) 626
Amortization —
(4,725 )
Foreign exchange 2,957
934
Balance at September 30, 2017 $ 137,313
$ 30,050

~~6. Investments~~Operating Lease and Finance Obligations

On December 23, 2016, the Company acquired a 25.0% equity interest in Ruby Sketch Pty Ltd. (“Ruby Sketch”), an Australian proprietary limited company, for $2.5 million, for which the Company accounts for its ownership interest using the equity accounting method. Ruby Sketch develops software that assists in designing residential structures, primarily used in Australia, and potentially for the North America market. The Company has no obligation to make any additional capital contributions to Ruby Sketch.

For the three and nine months ended September 30, 2017, the Company recorded an equity loss of $13 thousand and $53 thousand, respectively, with respect to its Ruby Sketch investment. However, the investment increased $82 thousand due to the foreign currency translation, primarily related to the strengthening Australian dollar against United States dollar, resulting in a $2.6 million balance as of September 30, 2017.

~~Credit Facilities~~

The Company has ~~revolving lines~~operating leases for certain facilities, equipment and autos. The existing operating leases expire at various dates through 2025, some of ~~credit with various banks in~~which include options to extend the ~~United States and Europe. Total available credit~~leases for up to 5 years. The Company measured the lease liability at ~~September 30, 2017, was $304.0 million including revolving credit lines and an irrevocable standby letter~~the present value of ~~credit in support of various insurance deductibles.~~

the lease payments to be made over the lease term. The Company’s primary credit facility is a revolving line of credit with $300 million in available credit. On July 25, 2016, the Company entered into a second amendment (the "Amendment") to the credit facility. For additional information about the Amendment, seelease payments are discounted using the Company's Current Report on Form 8-K dated July 28, 2016. As amended, this credit facility will expire on July 23, 2021. Amounts borrowed under this credit facility bear interest at an annual rate equal to either,incremental borrowing rate. The Company measured the right-of-use assets ("ROU") assets at the ~~Company’s option, (a)~~amount at which the ~~rate for Eurocurrency deposits for the corresponding deposits of U.S. dollars appearing on Reuters LIBOR1screen page (the “LIBOR Rate”), adjusted for any reserve requirement in effect,~~lease liability is recognized plus ~~a spread of 0.60% to 1.45%, determined quarterly based on the Company’s leverage ratio (at September 30, 2017, the LIBOR Rate was 1.23%),~~initial direct costs incurred or ~~(b) a base rate, plus a spread of 0.00% to 0.45%, determined quarterly based on the Company’s leverage ratio.~~prepayment amounts. The ~~base rate is defined in a manner such that it will not be~~

less than the LIBOR Rate. The Company will pay fees for standby letters of credit at an annual rate equal to the applicable spread described above, and will pay market-based fees for commercial letters of credit. The Company is required to pay an annual facility fee of 0.15% to 0.30% of the available commitments under the credit facility, regardless of usage, with the applicable fee determinedROU assets are amortized on a ~~quarterly~~straight-line basis ~~based on~~over the Company’s leverage ratio. The Company was also required to pay customary fees as specified in a separate fee agreement to the agent under the credit facility. The Company’s unused borrowing capacity under other revolving credit lines and a term note totaled $4.0 million at September 30, 2017. The other revolving credit lines and the term note charge interest ranging from 0.47% to 8.25%, currently have maturity dates from July 2017 to December 2017. The Company had no outstanding debt balance as of September 30, 2017 and 2016, and December 31, 2016, respectively. The Company was in compliance with its financial covenants at September 30, 2017.lease term.

~~Capital~~Finance Lease Obligations

The Company ~~entered into two four-year lease agreements~~has finance leases for data centers and certain office equipment, ~~with Cisco Systems Capital Corporation for a total of approximately $4.4 million,~~ which was recorded in fixed assets as capital lease obligations. These ~~capital~~finance lease obligations are included in current liabilities and other long-term liabilities in the accompanying ~~condensed~~ consolidated balance sheets. The interest rates for these two capital leases are 2.89% and 3.50%, respectively, and the two leases will mature in May 2021 and July 2021, respectively.

AsThe following table provides a summary of ~~September 30, 2017,~~leases included on the ~~current portion~~condensed consolidated balance sheets March 31, 2021, 2020 and December 31, 2020, condensed consolidated statements of earnings, and condensed consolidated statements of cash flows as of the three months and three months ended March 31, 2021 and 2020:

The components of lease expense were as follows:

Supplemental cash flow information related to leases as follows:

The following is a schedule, by years, of maturities of lease liabilities as of March 31, 2021:

The following table summarizes the Company's lease terms and discount rates as of March 31, 2021 and 2020:

As previously disclosed, the Company's primary credit facility is the $300.0 million revolving line of credit (the "Credit Facility") with Wells Fargo Bank. In addition to the Credit Facility, certain of the Company’s domestic subsidiaries are guarantors for a credit agreement between certain of its foreign subsidiaries and institutional lenders. Together, these credit facilities provide the Company with a total of $304.0 million in revolving credit lines and an irrevocable standby letter of credit in support of various insurance deductibles. There were 0 outstanding ~~liability for~~balances as of March 31, 2021 and December 31, 2020. There was $150.2 million outstanding balance as of March 31, 2020.

The Company was in compliance with its financial covenants under the ~~leased equipment was approximately $1.0 million and the long-term portion was approximately $2.9 million.~~loan agreement as of March 31, 2021.

8.13. Commitments and Contingencies

The Company’s policy with regard to environmental liabilities is to accrue for future environmental assessments and remediation costs when information becomes available that indicates that it is probable that the Company is liable for any related claims and assessments and the amount of the liability is reasonably estimable. The Company does not believe that any such matters will have a material adverse effect on the Company’s financial condition, cash flows or results of operations.

Litigation and Potential Claims

From time to time, the Company is involved in various legal proceedings and other matters arising in the normal course of business. Corrosion, hydrogen ~~enbrittlement,~~embrittlement, cracking, material hardness, wood pressure-treating chemicals, misinstallations, misuse, design and assembly flaws, manufacturing defects, labeling defects, product formula defects, inaccurate chemical mixes, adulteration, environmental conditions, or other factors can contribute to failure of fasteners, connectors, anchors, adhesives, specialty chemicals, such as fiber reinforced polymers, and tool products. In addition, inaccuracies may occur in product information, descriptions and instructions found in catalogs, packaging, data sheets, and the Company’s website.

As of the date of this Quarterly Report on Form 10-Q, the Company is not a party to any legal proceedings, which the Company expects individually or in the aggregate to have a material adverse effect on the Company’s financial condition, cash flows or results of operations. Nonetheless, theThe resolution of any claim or litigation is subject to inherent uncertainty and could have a material adverse effect on the Company’s financial condition, cash flows or results of operations.

~~Potential Third-Party Claims~~

Gentry Homes, Ltd. v. Simpson Strong-Tie Company Inc., et al., Case No. 17-cv-00566, was filed in a federal district court in Hawaii against Simpson Strong-Tie Company Inc. and the Company on November 20, 2017. The Gentry case is a product of a previous state court class action, Nishimura v. Gentry Homes, Ltd., et al., Civil No. 11-1-1522-07, ~~was filed~~which is now closed. The Nishimura case concerned alleged corrosion of the Company’s galvanized “hurricane straps” and mudsill anchor products used in ~~the Hawaii First Circuit court on July 20, 2011. The~~ ~~Nishimura~~ ~~case involves claims by homeowners at~~a residential project in Ewa by Gentry, a Honolulu, ~~development of approximately 2,400 homes. The claims arise out of alleged corrosion of strap-tie holdowns and mud-sill anchor products supplied by~~Hawaii. In the ~~Company. The~~Nishimura case, the plaintiff homeowners ~~originally sued~~and the developer, Gentry Homes, Ltd. (“Gentry”), ~~as well as the Company. In 2012~~arbitrated their dispute and ~~2013, the Hawaii First Circuit granted the Company’s motions to dismiss and for summary judgment, resulting~~agreed on a settlement in the ~~dismissal~~amount of all of the homeowners’ claims against the Company, and the Company has not since then been a party to the proceedings. The dismissed claims against the Company remain subject to potential appeal by the plaintiffs.

~~Gentry and the plaintiff homeowners thereafter moved their dispute to arbitration, and the Hawaii state court stayed the lawsuit pending arbitration. The Company was not a party to the arbitration.~~

Gentry initially reported no significant damage claims related to the Ewa development. In August 2016, Gentry advised the Company for the first time that a substantial number of plaintiff homeowners claimed serious corrosion of mudsill anchors and strap-tie holdowns. The plaintiff homeowners and Gentry proceeded to arbitration in April 2017. During the pendency of the arbitration, Gentry and the plaintiff homeowners reached a settlement of their dispute, pursuant to which Gentry agreed to pay approximately $90 ~~million to~~million. In the ~~plaintiff homeowners.~~

~~In October 2017,~~subsequent Gentry case, Gentry ~~demanded that the Company pay Gentry the amount it paid the plaintiff homeowners to settle their claims, asserting the Company was responsible for~~alleges breach of warranty and negligent misrepresentation by the Company related to its “hurricane strap” and ~~fraud in connection with the supply of strap-tie holdowns and mud-sill~~mudsill anchor ~~products to Gentry. As of the date of this Quarterly Report on Form 10-Q, Gentry had not yet initiated legal proceedings against the Company.~~

~~The Company admits no liability in connection with the~~ ~~Nishimura~~ ~~case.~~products. At this time, the Company ~~cannot reasonably ascertain~~and the ~~likelihood~~plaintiffs have reached a settlement in principle and are currently negotiating a definitive written agreement memorializing the settlement. Should the parties be unable to reach an accord on terms of the written agreement, further negotiations may take place that ~~it will be found responsible for substantial damages to Gentry or to the homeowners should they appeal; whether any legal theory against the Company might be viable,~~could result in a different settlement, or the ~~extent of the liability the Company might face if Gentry were~~case may continue on to ~~proceed against it.~~

~~The Company will vigorously defend any claims against it, whether appeal by the plaintiff homeowners, or third party claims by Gentry.~~trial. Based on the facts currently known, ~~to the Company~~ and subject to future events and

circumstances, the Company believes that all or part of ~~any~~the damages for the claims ~~that any party might seek to allege~~brought against it ~~related to~~in the ~~Nishimura~~Gentry case may be covered by its insurance policies.

~~Charles Vitale, et al. v. D.R. Horton, Inc. and D.R. Horton-Schuler Homes, LLC~~, Civil No. 15-1-1347-07, a putative class action lawsuit, was filed in the Hawaii First Circuit on July 13, 2015, in which homeowner plaintiffs allege that all homes built by D.R Horton/D.R. Horton-Schuler Homes (collectively "Horton Homes") in the State of Hawaii have strap-tie holdowns that are suffering premature corrosion. The complaint alleges that various manufacturers make strap-tie holdowns that suffer from such corrosion, but does not identify the Company’s products specifically. The Company is not currently a party to the ~~Vitale~~ ~~lawsuit, but the lawsuit in the future could potentially involve the Company’s strap-tie holdowns.~~

~~If claims are asserted against the Company in the~~ ~~Vitale~~ case, it will vigorously defend any such claims, whether brought by the plaintiff homeowners, or third party claims by Horton Homes. Based on facts currently known to the Company and subject to future events and circumstances, the Company believes that all or part of any claims that any party might seek to allege against it related to the ~~Vitale~~ ~~case may be covered by its insurance policies.~~

~~Given the nature and the complexities involved in the~~ ~~Nishimura~~ ~~and~~ ~~Vitale~~ proceedings, the Company is unable to estimate reasonably a likelihood of possible loss or range of possible loss until the Company knows, among other factors, (i) whether it will be named in either lawsuit by any party; (ii) the specific claims and the legal theories on which they are based (iii) what claims, if any, might be dismissed without trial, (iv) the extent of the claims, including the size of any potential class, particularly as damages are not specified or are indeterminate, (v) how the discovery process will affect the litigation, (vi) the settlement posture of the other parties to the litigation, (vii) the extent to which the Company’s insurance policies will cover the claims or any part thereof, if at all, (viii) whether class treatment is appropriate; and (ix) any other factors that may have a material effect on the litigation.

While it is not feasible to predict the outcome of proceedings to which the Company is not currently a party, or reasonably estimate a possible loss or range of possible loss for the Company related to such matters, in the opinion of the Company, either the likelihood of loss from such proceedings is remote or any reasonably possible loss associated with the resolution of such proceedings is not expected to be material to the Company’s financial position, results of operations or cash flows either individually or in the aggregate. Nonetheless, the resolution of any claim or litigation is subject to inherent uncertainty and could have a material adverse effect on the Company’s financial condition, cash flows or results of operations.

~~9. Stock-Based Incentive Plans~~

The Company currently has one stock-based incentive plan, the 2011 Plan, which incorporates and supersedes its two previous plans except for awards previously granted under the two plans (see "Note 1 Basis of Presentation — ~~Accounting for Stock-Based~~

~~Compensation”~~). Generally, participants of the 2011 Plan have been granted stock-based awards, only if the applicable Company-wide and/or profit-center operating goals, or strategic goals, established by the Compensation and Leadership Development Committee (the "Committee") of the Board at the beginning of the year, were met. In 2017, some of the grants made will vest only if Company-wide and/or profit-center operating goals established by the Committee at the beginning of the year are met.

The Company granted restricted stock units (“RSUs”) under the 2011 Plan in 2015, 2016 and 2017. The fair value of each restricted stock unit award is estimated on the measurement date as determined in accordance with GAAP and is based on the closing market price of the underlying Company's common stock on the day of the grant or the immediately preceding the trading date. The fair value excludes the present value of the dividends that the RSUs do not participate in. The RSUs may be time-based, performance-based or time- and performance-based. The restrictions on the time-based RSUs granted to our named executive officers and certain members of our senior management in 2017 and prior generally lapse on the date of the award and each of the first, second and third anniversaries of the date of the award. The restrictions on the time-based RSUs granted in 2017 generally lapse on the first, second, third and fourth anniversaries of the date of the award. The restrictions on the performance-based RSUs granted to our named executive officers and certain members of the Company’s senior management in 2017 and prior, in addition to their time-based RSUs, generally lapse following a performance period set for the RSUs on the date of the award, and shares of our common stock underlying such awards are subject to performance-based adjustment before becoming vested. In addition, the restrictions on the time- and performance-based RSUs granted to our employees in 2017 generally lapse on the first, second, third and fourth anniversaries of the date of the award, provided that the applicable performance goals are achieved within the year of grant. Generally, performance-based awards (including time- and performance-based awards) granted under the 2011 Plan may vest following the end of the performance periods only if the applicable performance goals are achieved within such periods.

Under the 2011 Plan, or the applicable grant agreement, the vesting of RSUs granted thereunder may accelerate in four situations: (1) retirement after meeting certain age and/or service tenure conditions, (2) death, (3) disability, and (4) certain situations linked to a change in our control or our sale of assets. In case of early vesting of performance-based awards in any one of the four situations, shares of the underlying stock that could eventually vest in favor of the officer will be prorated based on the early-vesting date and the date when the applicable vesting period is scheduled to expire.

On February 4, 2017, 606,299 RSUs were awarded to the Company's employees, including officers, at an estimated fair value of $43.42 per share, based on the closing price on February 3, 2017. On May 16, 2017, 10,066 RSUs were awarded to each of the Company's seven independent directors at an estimated value of $41.52 per share based on the closing price of shares of the Company's common stock on May 15, 2017, which RSUs vested fully on the date of the grant.

~~The following table summarizes changes to the Company’s unvested RSUs for the nine months ended September 30, 2017:~~

Shares
Weighted-
Average Price

Aggregate
Intrinsic
Value *
Unvested Restricted Stock Units (RSUs) (in thousands) (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 total intrinsic value of RSUs vested during the nine-month periods ended September 30, 2017 and 2016, was $11.0 million and $10.8 million, respectively, based on the market value on the award date.

~~No stock options were granted in 2016 or in the first nine months of 2017.~~

~~The following table summarizes the changes to the Company’s outstanding non-qualified stock options for the nine months ended 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 total intrinsic value of stock options exercised was $1.7 million and $2.4 million during nine-month periods ended September 30, 2017 and 2016, respectively.~~

As of September 30, 2017, there was $17.3 million, unrecognized cost related to unvested stock-based compensation arrangements under the 2011 Plan for awards made through February 2017. The portion of this cost related to RSUs awarded through May 2017 (as discussed above) is expected to be recognized over a weighted-average period of 2.3 years.

~~10.~~14. Segment Information

The Company is organized into ~~three reportable segments. The~~3 reporting segments ~~are~~ defined by the regions where the Company’s products are manufactured, marketed and distributed to the Company’s customers. The three regional segments are the North America segment ~~comprising~~(comprised primarily of the ~~United States~~Company’s operations in the U.S. and ~~Canada;~~Canada), the Europe segment ~~comprising continental Europe and the United Kingdom;~~ and the Asia/Pacific segment ~~which the Company believes is not significant to its overall performance, comprising~~(comprised of the Company’s operations in ~~China, Hong Kong,~~Asia, the South Pacific, and the Middle ~~East. China and Hong Kong operations are manufacturing and administrative support locations, respectively.~~East). These ~~three reportable~~ segments are similar in several ways, including the types of materials used, the production processes, the distribution channels and the product applications. ~~The Company’s measure of profit or loss for its reportable segments is income (loss) from operations.~~

The following tables illustrate certain measurements used by management to assess the performance of its reportable segments as of or for the following periods:

* ~~The sales~~Sales to other segments are eliminated in consolidation.

Cash collected by the Company’s United States subsidiaries is routinely transferred into the Company’s cash management accounts and, therefore, has been included in the total assets of “Administrative and all other.” Cash and cash equivalent balances in the “Administrative and all other” segment were ~~$116.0~~$183.2 million, ~~$128.6~~$248.7 million, and ~~$137.4~~$199.8 million, as of ~~September 30, 2017~~March 31, 2021 and ~~2016,~~2020, and December 31, ~~2016,~~2020, respectively. Total "Administrative and all other" assets are net of inter-segment due to and from accounts eliminated in consolidation.

While the Company manages its business by geographic segment, ~~presented as additional information,~~ the following table illustrates the distribution of the Company’s net sales by product group as additional information for the following periods:


	Three Months Ended March 31,
(in thousands)		2021		2020

Wood construction products		$	301,578	$	242,520
Concrete construction products		45,523		41,012
Other		541		136
Total		$	347,642	$	283,668

Three Months Ended September 30, Nine Months Ended September 30,
(in thousands) 2017 2016 2017 2016

Wood construction products $ 224,317
$ 193,513
$ 639,207
$ 562,025
Concrete construction products 38,051
37,461
105,785
98,445
Other 108
—
353
—
Total $ 262,476
$ 230,974
$ 745,345
$ 660,470

Wood construction products include connectors, truss plates, fastening systems, fasteners and pre-fabricated shearwalls, and are used for connecting and strengthening wood-based construction primarily in the residential construction market. Concrete construction products include adhesives, chemicals, mechanical anchors, carbide drill bits, powder actuated tools and fiber reinforcing materials, and are used for restoration, protection or strengthening concrete, masonry and steel construction in residential, industrial, commercial and infrastructure construction.

~~11.~~15. Subsequent Events

InOn May 4, 2021, the ~~fourth quarter~~Company’s Board of ~~2017, the Company announced employee reductions in the North America and Europe segments and related~~Directors declared a quarterly cash dividend of $0.25 per share, estimated ~~severance expenses of approximately $3.0 million to $3.5 million, most of which~~ to be ~~recorded~~$10.9 million in total. The dividend will be payable on July 22, 2021, to the ~~fourth quarter~~Company's stockholders of ~~2017.~~record on July 1, 2021.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

~~The following is a discussion and analysis~~Each of the ~~consolidated financial condition~~terms the “Company,” “we,” “our,” “us” and ~~results~~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. The Company regularly uses its website to post information regarding its business and governance. The Company encourages investors to use http://www.simpsonmfg.com as a source of ~~operations for~~information about the ~~Company for the three months~~Company.

“Strong-Tie” and ~~nine months ended September 30, 2017. The following discussion~~our other trademarks appearing in this report are our property. This report contains additional trade names and ~~analysis should be read in conjunction~~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 ~~the interim Condensed Consolidated Financial Statements and related Notes included in Part I, Item 1, "Financial Statements”~~any of this Quarterly Report on Form 10-Q. The following discussion and analysis contain forward-looking statements that reflect our plans, estimates, and beliefs as discussed in the “Note About Forward-Looking Statements” at the beginning of this Quarterly Report on Form 10-Q. Our actual results could differ materially from those plans, estimates, and beliefs. Factors that could cause or contribute to these ~~differences include those discussed below and elsewhere in this~~companies.

CAUTIONARY NOTE ABOUT FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q 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 ~~well~~amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). 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,” “can,” “may,” “likely,” “potentially,” or similar expressions that concern our strategy, plans, expectations or intentions. Forward-looking statements include, but are not limited to, statements about future financial and operating results, our plans, objectives, business outlook, priorities, expectations and intentions, expectations for sales growth, comparable sales, earnings and performance, stockholder value, capital expenditures, cash flows, the housing market, the home improvement industry, demand for services, share repurchases, our strategic initiatives, including the impact of these initiatives on our strategic and operational plans and financial results, and any statement of an assumption underlying any of the foregoing and other statements that are not historical facts. Although we believe that the expectations, opinions, projections and comments reflected in these forward-looking statements are reasonable, such statements involve risks and uncertainties and we can give no assurance that such statements will prove to be correct. Actual results may differ materially from those expressed or implied in such statements.

Forward-looking statements are subject to inherent uncertainties, risk and other factors that are difficult to predict and could cause our actual results to vary in material respects from what we have expressed or implied by these forward-looking statements. Important factors that could cause our actual results and financial condition to differ materially from those expressed in our forward looking statements include, among others, those discussed under the Item 1A. Risk Factors and Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations in the 2020 Form 10-K. Additional risks include: the cyclicality and impact of general economic conditions; changing conditions in global markets including the impact of sanctions and tariffs, quotas and other trade actions and import restrictions; the impact of pandemics, epidemics or other public health emergencies, such as the ~~factors discussed~~recent outbreak of coronavirus disease 2019 (COVID-19); volatile supply and demand conditions affecting prices and volumes in ~~Part I, Item 1A, “Risk Factors”~~the markets for both our products and raw materials we purchase; the impact of foreign currency fluctuations; potential limitations on our ability to access capital resources and existing credit facilities; restrictions on our business and financial covenants under our bank credit agreement; and reliance on employees subject to collective bargaining agreements.

We caution that you should not place undue reliance on these forward-looking statements, which speak only as of the date of this report. We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise. Readers are urged to carefully review and consider the various disclosures made by us in this report and in our ~~Annual Report on Form 10-K for~~other reports filed with the ~~year ended December 31, 2016.~~SEC that advise of the risks and factors that may affect our business.

~~Business~~ Overview

We design, manufacture and sell building construction products that are of high quality and performance, easy touse and cost-effective for customers. We operate in three business segments determined by geographic region: North America,Europe and Asia/Pacific.

At our March 23, 2021 virtual analyst and investor day, we unveiled several key growth initiatives that we believe will help us continue our track record of above market growth through a combination of organic and inorganic opportunities. Our ~~primary business strategy is~~organic opportunities are focused on expansion into new markets within our core competencies of wood and concrete products. These growth initiatives will focus on the original equipment manufacturers, repair and remodel or do-it-yourself, mass timber, concrete and structural steel markets.

In order to grow ~~through increasing our market share~~in these markets, we aspire to be among the leaders in engineered load-rated construction building products and ~~profitability in Europe; growing our share in the concrete space;~~systems and ~~continuing to develop our software to support our core wood products offering~~customer-facing technology while leveraging our ~~strengths~~engineering expertise, deep-rooted relationships with top builders, engineers, contractors, code officials and distributors, along with our ongoing commitment to testing, research and innovation. Importantly, we currently have existing products, testing results, distribution and manufacturing capabilities for all five of our growth initiatives. It is also important to note that these initiatives are all currently in ~~engineering,~~different stages of development. Our successful growth in these areas will ultimately be a function of expanding our sales and/or marketing functions to promote our products to different end users and distribution channels, expanding our customer base, and potentially introducing new products in the future.

Also during the virtual analyst and investor day, we highlighted our ~~strong brand name. We believe these initiatives and objectives~~Five-year Ambitions, which are ~~crucial~~as follows:

1.strengthen our values-based culture;

2.be the business partner of choice;

3.strive to ~~not only offer a more complete solution~~be an innovative leader in our product categories;

4.continue above market growth relative to ~~our customers and bolster our sales of core wood connector products, but also to mitigate the cyclicality of~~ the U.S. housing ~~market.~~starts;

5.remain within the top quartile of our proxy peers for operating income margins; and

~~On October~~6.remain in the top quartile of our proxy peers for return on invested capital.

As with our growth initiatives, further updates will be forthcoming related to material developments with our Five-year Ambitions.

A novel strain of coronavirus (“COVID-19”) surfaced in late 2019 and has spread around the world, including to the United States. In March 2020, the World Health Organization declared COVID-19 a worldwide pandemic and the President of the United States declared the COVID-19 outbreak a national emergency. As of April 30, ~~2017,~~2021, the virus continues to spread and has had a significant impact on worldwide economic activity and on macroeconomic conditions. Vaccines are available in various countries and distribution of the vaccine also varies by country and in the U.S. by state. The duration and severity of its effects are still unknown.

Government authorities in the countries and states where we ~~announced the 2020 Plan to provide additional transparency into our strategic plan~~operate have issued various and ~~financial objectives. Subject to future events~~differing shelter in place, stay at home, social distancing guidelines and ~~circumstances, our 2020 Plan is centered on three key operational objectives as further described below.~~

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

The Company’s management team continues to monitor and manage its ability to operate effectively and, to date, the Company has not experienced any significant disruptions within its supply chain. Our supply chain partners have been very supportive and continue to do their part to ensure that service levels to our customers remain strong and, to date, we have not experienced any supply-chain disruptions related to COVID-19 and have been able to meet our customers’ needs. We will continue to communicate with our ~~ongoing SAP implementation.~~supply chain partners to identify and mitigate risk and to manage inventory levels.

~~Third, improving working capital~~

In response to the COVID-19 pandemic the Company proactively took measures to maintain and preserve its strong financial position and flexibility. Based on updated expectations, the Company resumed hiring to meet increased demand levels that it has experienced. The Crisis Management Team, which includes members of senior management, ~~primarily through~~meets regularly to review and assess the ~~reduction of inventory levels by aggressively eliminating 25 to 30%~~status of the ~~Company’s product SKUs~~Company's operations and ~~implementing Lean principles in many factories. We believe~~the health and safety of its employees. Notwithstanding the Company's continued efforts, as the COVID-19 pandemic continues, health concern risks remain, and we ~~can achieve an overall 30% reduction~~cannot predict whether we or any of our ~~raw material~~suppliers will experience disruptions, or how long such disruptions would last. It also remains unclear how various national, state, and ~~finished good inventory over~~local governments will react if the ~~next three years without impacting day-to-day production~~distribution of vaccines is slower than expected or new variants of the virus become more dominant.

A significant portion of the Company's total product sales is dependent on U.S. housing starts and ~~shipping procedures.~~

~~We believe our efforts to achieve~~its business, financial condition, and results of operations depends significantly on the ~~2020 Plan will contribute to improved business performance and operating results, improve returns on invested capital~~⁽¹⁾ ~~and allow us to be more aggressive in repurchasing shares of our stock in the near-term.~~

~~We believe our ability to achieve industry-leading margins from a gross profit and operating income standpoint is due to the high~~ level of ~~value-added services~~housing and residential construction activity. We anticipated previously that ~~we provide~~housing starts would continue 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; 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 deliverygrow at slow pace as in typically 24 hours or less; 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 U.S.prior years. However, single-family housing starts increased significantly from prior-year's level of starts. The return of Lowe's and a strong home repair and

remodel market also contributed to ~~continue~~increased demand and a significant increase in sales during the first quarter of 2021 compared to ~~grow~~the 2020. While we believe demand will remain strong in the short-term, and factoring in recently announced sales price increases, will result in higher net sales in future periods. However, our sales in the first quarter 2021 and a significant portion of 2020 were positively impacted by the return of Lowe's. The remaining quarters of this fiscal year and the comparable periods of 2020 will include the return of Lowes and, as a ~~percentage in~~result, we don't think sales volumes for the ~~mid to high single digits over~~remainder of 2021 will grow at the ~~next few years, which should support a sustainable organic revenue growth outlook in North America for many~~same year-over-year rate as the first quarter 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 acquisitions were part of a dual-fold approach to growth in the past, our go-forward strategy will focus on organic growth, supported by strategic capital investments in the business. As such, we will de-emphasize acquisitions activities going forward, especially as it relates2021 compared to the ~~concrete space. An exception may occur if~~first quarter of 2020. In the ~~right opportunity were~~short-term, operating profits are expected to ~~arise~~improve on increased selling prices and lower average material costs as higher costs of raw material purchases are absorbed into current product costs. However, increased steel costs, product sourcing logistic complications and potential increases in ~~our core fastener space, which is~~US income tax rates could result in lower operating and net income margins by the ~~particular area where we believe it would be beneficial~~end of 2021.

Management continues to ~~gain additional production capacity to support our wood business.~~monitor the impact of the global situation on its financial condition, liquidity, operations, suppliers, industry, and workforce.

Factors Affecting Our Results of Operations

Unlike lumber or other products that have a more direct correlation to U.S. 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 or such as labor disputes 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~~the amount of inventory on-hand. Our operations can also be affected by a volatile steel market. Changes in raw material cost could negatively affect our gross profit margins depending on the timing of raw material purchases or how much sales prices can be increased to the second quarter 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.offset higher raw material costs.

~~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~~Our operations expose us to ~~build closer partnerships~~risks associated with ~~builders by offering software and services~~pandemics, epidemics or other public health emergencies, such as the COVID-19 pandemic which spread from China to ~~help them control costs and increase efficiency at all stages of~~many other countries including 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.U.S.

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.

In July 2016, our Board of Directors ~~(the "Board")~~ approved a plan to replace our current in-house enterprise resource planning ~~("ERP"~~(“ERP”) and externally sourced accounting platforms with a fully integrated ERP platform from SAP America, Inc. ~~("SAP"~~(“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 completed implementation at our North America operations in 2021. We expect to complete the company-wide SAP implementation during 2022. Meeting the goal is highly dependent on the lifting of current travel restrictions, which are the result of the COVID-19 pandemic. 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~~SAP implementation, 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 30, 2017, we have capitalized $8.3 million of the 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~~Historically our North America segment has generated more revenues ~~primarily~~ from wood construction products compared to concrete construction products. ~~Due to improved economic conditions, including an increase in~~During the first three months of 2021, the return of Lowe's, favorable weather, increased home improvement activity and increased housing starts resulted in higher sales volumes over the same time period of 2020. Our wood construction product net sales ~~in regions of~~increased 22.4% for the ~~segment have trended up,~~quarter ended March 31, 2021 compared to March 31, 2020, primarily due to ~~increases in unit~~increased sales volumes in connection with the return of Lowe's and ~~an approximately 4%~~increased housing starts and repair and remodel activity, which resulted in increased sales to some of our other distribution channels. Our concrete construction product

net sales increased 9.6% for the quarter ended March 31, 2021 compared to March 31, 2020, primarily due to higher sales volumes. Operating profits increased due to higher sales, lower cost of goods sold, mostly due to lower labor and factory costs, partly offset by higher operating expenses including primarily stock-based compensation expense. If current economic conditions continue and factoring in recently announced sales price increase for our connector products in the United Stated effective on December 1, 2016, as well as added revenues from CG Visions. See “North America” below. Our truss sales decreased slightly in the third quarter of 2017. Our truss specialists continue to convert small to medium size truss customers to our design and management software in 2017.

~~During the third quarter of 2016,~~increases, we ~~initiated a multi-year plan to increase our~~believe North America ~~factory production efficiency, aiming~~operating margins could be higher in 2021 compared to achieve a 75% factory utilization rate 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% of our planned high-volume connector production. 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 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 service2020. However, increased steel costs and product ~~availability commitments to customers~~sourcing complications could result in lower operating margins towards the ~~Southwestern region~~end of ~~the United States and Western region of Canada.~~2021 or early 2022.

In late 2016, we collaborated with The Home Depot, Inc. (“The Home Depot”) to roll out our mechanical anchor line of products that are available at The Home Depot. This collaboration increased a portion of our finished goods inventory and we expect to continue to introduce our mechanical anchor line of products through approximately 1,900 of The Home Depot store locations throughout 2017 and beyond. Once the rollout is completed, we anticipate this opportunity will meaningfully contribute to our concrete business lines going forward and estimate that on an annualized basis it could potentially increase our net 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.

Our Europe segment also generates more revenues from wood construction products than concrete construction products. Europe net sales increased for the quarter ended March 31, 2021 compared to March 31, 2020, primarily due to higher sales volumes in local currency and were positively affected by approximately $3.6 million in foreign currency translation related to Europe's currencies strengthening against the United States dollar. Wood construction product sales increased ~~67% in~~37.8% for the ~~third~~ quarter ~~of 2017~~ended March 31, 2021 compared to ~~the third quarter of 2016, primarily due to the acquisition of Gbo Fastening Systems.~~March 31, 2020. Concrete construction product sales are mostly project based, and net sales increased ~~11% in~~20.6% for the ~~third~~ quarter ~~of 2017~~ended March 31, 2021 compared to ~~the third quarter of 2016,~~March 31, 2020. Gross margins increased, mostly due to lower factory, warehouse and shipping costs, partly offset by higher material costs. Operating expenses increased, primarily due to ~~the completion of large projects during the third quarter of 2017. We are uncertain whether concrete construction~~higher cash profit sharing and stock-based compensation expense. If current economic conditions continue and factoring in recently announced sales price increases, we believe Europe operating margins could be higher in 2021 compared to 2020. However, increased steel costs and product ~~net~~sourcing complications could offset sales will continue to grow at this pace for the remainder of 2017. In connection with the Gbo Fastening Systems acquisition, we estimated demand for wood connector products for the Nordic region and have placed inventory 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 byprice increases, negatively affecting operating margins towards the end of ~~2017. See “Europe” below.~~2021 or early 2022.

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.

On February 8, 2021, the Company provided a full-year outlook. The Company is updating its full year outlook, primarily reflecting one quarter of actual results, as well as improved visibility on the progression of pandemic-related restrictions and the impact of those restrictions on the Company’s operations. Based on business trends and conditions as of today, April 26, the Company's outlook for the full fiscal year ending December 31, 2021 is as follows:

•Operating margin is estimated to be in the range of 19.5% to 22.0%.

•The effective tax rate is estimated to be in the range of 25.0% to 26.0%, including both federal and state income tax rates.

•Capital expenditures are estimated to be in the range of $50 million to $55 million.



(1	)	When referred to above, the Company’s return on invested capital (“ROIC”) for a fiscal year is calculated based on (i) the net income of that year as presented in the Company’s consolidated statements of operations prepared pursuant to generally accepted accounting principles in the 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, as presented in the Company’s consolidated balance sheets prepared pursuant to GAAP for that applicable year. As such, the Company’s ROIC, a ratio or statistical measure, is calculated using exclusively financial measures presented in accordance with GAAP.

Results of Operations for the Three Months Ended ~~September 30, 2017,~~March 31, 2021, Compared with the Three Months Ended ~~September 30, 2016~~March 31, 2020

Unless otherwise stated, the below 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 months ended ~~September 30, 2017,~~March 31, 2021, against the results of operations for the three months ended ~~September 30, 2016.~~March 31, 2020. Unless otherwise stated, the results announced below, when referencing “both quarters,” refer to the three months ended ~~September 30, 2016~~March 31, 2020 and the three months ended ~~September 30, 2017. To avoid fractional percentages, all percentages presented below were rounded to the nearest whole number.~~March 31, 2021.

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~~First Quarter ~~2017~~2021 Consolidated Financial Highlights

The following table illustrates the differences in ~~the~~ our operating results for the three months ended ~~September 30, 2017,~~March 31, 2021, from the three months ended ~~September 30, 2016,~~March 31, 2020, and the increases or decreases for each category by segment:

Net sales increased ~~14%~~22.6% to ~~$262.5~~$347.6 million from ~~$231.0 million. Recently acquired businesses accounted for $15.8~~$283.7 million ~~(50%) of the increase in net sales. Net sales to contractor distributors, dealer distributors, home centers and lumber dealers increased~~ primarily due to ~~increased home construction activity and average net~~increases in sales ~~unit prices.~~volumes. Wood construction product net sales, including sales of connectors, truss plates, fastening systems, fasteners and shearwalls, represented ~~86%~~86.7% and ~~84%~~85.5% of the Company's total net sales in the ~~third~~first quarters of ~~2017~~2021 and ~~2016,~~2020, respectively. Concrete construction product net sales, including sales of adhesives, chemicals, mechanical anchors, powder actuated tools and reinforcing fiber materials, represented ~~14%~~13.1% and ~~16%~~14.5% of the Company's total net sales in the ~~third~~first quarters of ~~2017~~2021 and ~~2016,~~2020, respectively.

Gross profit increased 25.2% to $162.3 million from $129.7 million. Gross margins increased to ~~$119.9 million~~46.7% from ~~$113.5 million.~~45.7%, primarily due to lower factory and labor, partly offset by higher material costs each as a percentage of net sales. Gross ~~profit margins decreased to 46% from 49%. Recently acquired businesses had an average gross profit margin of 31% in the third quarter of 2017. The 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~~increased to ~~46%~~46.6% from ~~50%~~45.3% for wood construction products and ~~increased~~decreased to ~~35%~~42.5% from ~~32%~~44.2% for concrete construction ~~products.~~products, respectively.

Research and development and engineering expense ~~decreased 21%~~ increased 9.0% to ~~$8.7~~$14.6 million from $10.9 million, mostly due to a reclassification of $2.5 million year-to-date expenses associated with recent the North America acquisition from engineering expense to selling expense and general and administrative expense as well decreases of $0.4 million in cash profit sharing expense and $0.3 million in stock-based compensation expense.

~~Selling expense~~ ~~increased 16% to $28.2 million from $24.3~~$13.4 million, primarily due to increases of ~~$3.2~~$0.6 million in personnel costs, ~~$0.8~~$0.3 million in ~~advertising costs~~professional fees and ~~$0.6~~$0.2 million in ~~amortization~~patent expense, ~~which was~~ partly offset by ~~decreases of $0.7~~$0.2 million reduction in ~~stock-based compensation~~travel-associated costs.

Selling expense ~~and $0.5 million in cash profit sharing expense. Recent acquisitions~~ increased ~~selling expense by $2.0 million, including the reclassification of $0.3 million year-to-date expenses associated with the North America acquisition from engineering expense~~8.0% to ~~selling.~~

~~General and administrative expense~~ ~~increased 12% to $36.5~~$30.8 million from ~~$32.5~~$28.5 million, primarily due to increases of ~~$4.0~~$1.5 million in stock-based compensation, $0.9 million in personnel costs, ~~$1.6 million in depreciation expense, $1.0~~and $0.8 million in professional fees, ~~and $0.7 million in software licensing and maintenance and hosting expense, which was~~ partly offset by decreases of $0.8 million in travel–associated expenses.

General and administrative expense increased 26.2% to $48.6 million from $38.5 million, primarily due to increases of $5.0 million in stock-based compensation expense, $2.4 million in ~~cash profit sharing expense on lower income from operations (or "operating income") and reduced payouts under our executive officer cash profit sharing plan and $1.0~~professional fees, $2.1 million in ~~stock-based compensation. Recent acquisitions increased~~personnel costs, and $0.9 million in amortization and depreciation expense, partly offset by a decrease of $0.7 million in travel–associated expenses. Included in general and administrative ~~expenses by $5.2 million, including the reclassification~~expense are SAP implementation and support costs of ~~$2.2 million year-to-date expenses, associated with the North America acquisition from engineering expense to selling expense.~~

~~Gain (adjustment) on bargain purchase of a business~~ - On January 3, 2017, we acquired Gbo Fastening Systems for approximately $10.2 million. This transaction was recorded as a business combination and resulted in a preliminary bargain purchase gain estimate of $8.4$3.3 million, which ~~represented an estimate of~~increased $0.7 million from the excess fair value of the net assets acquired and liabilities assumed over the consideration exchanged as of the acquisition date. In the third quarter of 2017, we completed our estimate of the fair value for the assets acquired and liabilities assumed and concluded that the fair value of the assets acquired and liabilities assumed was $16.5 million, which resulted in an adjusted bargain purchase gain of $6.3 million and a decrease of the bargain purchase gain of $2.1 million. This nonrecurring, non-operating income gain adjustment is included in the line item “Gain (adjustment) on bargain purchase of a business” in our results of operations for the three months ended September 30, 2017.prior quarter.

~~Gain on a disposal of a business -~~ ~~On September 29, 2017, we sold all of the outstanding shares of Gbo Poland for approximately $10.2 million, resulting in a gain of $0.4 million (both amounts are subject to post-closing adjustments).~~

Our effective income tax rate increased to ~~37%~~24.3% from ~~35%~~21.3%, primarily due to ~~a reduction~~lower windfall tax benefits on the vesting of restricted stock units during the ~~nonrecurring gain on a bargain purchase related~~first quarter of 2021 compared to ~~the Gbo Fastening Systems acquisition (see "Gain (adjustment) on bargain purchase of a business" above), which~~ 2020.

Consolidated net income was ~~not taxable.~~

~~Net income~~ ~~was $28.2~~$50.4 million compared to ~~$29.8~~$36.8 million. Diluted net income per common share was ~~$0.59~~$1.16 compared to $0.62. The decrease in net income was primarily due to the $2.1 million reduction on the nonrecurring bargain purchase gain (see "Gain (adjustment) on bargain purchase of a business" above), which decreased diluted net income by $0.04 per common share.$0.83.

The following table represents net sales by segment for the three-month periods ended ~~September 30, 2016~~March 31, 2021 and ~~2017,~~2020, respectively:


	North						Asia/
(in thousands)	America			Europe			Pacific			Total
Three months ended
March 31, 2020	$	249,050		$	32,732		$	1,886		$	283,668
March 31, 2021	300,564			44,296			2,782			347,642
Increase	$	51,514		$	11,564		$	896		$	63,974
Percentage increase	20.7		%	35.3		%	47.5		%	22.6		%

North Asia/
(in thousands) America Europe Pacific Total
Three months ended

September 30, 2016 197,459
31,485
2,030
$ 230,974
September 30, 2017 213,254
47,137
2,085
262,476
Increase $ 15,795
$ 15,652
$ 55
$ 31,502
Percentage increase 8 % 50 % 3 % 14 %

The following table represents segment net sales as percentages of total net sales for the three-month periods ended ~~September 30, 2016~~March 31, 2021 and ~~2017,~~2020, respectively:

North
America
Europe
Asia/
Pacific
Total
Percentage of total 2016 net sales 85 % 14 % 1 % 100 %
Percentage of total 2017 net sales 81 % 18 % 1 % 100 %


	North America		Europe		Asia/ Pacific		Total
Percentage of total 2020 net sales	88	%	12	%	—	%	100	%
Percentage of total 2021 net sales	87	%	13	%	—	%	100	%

The following table represents gross profit by segment for the three-month periods ended ~~September 30, 2016~~March 31, 2021 and ~~2017,~~2020, respectively:


	North		Asia/	Admin &
(in thousands)	America	Europe	Pacific	All Other	Total
Three months ended
March 31, 2020	$118,795	$10,701	$167	$3	$129,666
March 31, 2021	145,830	15,250	1,244	(42)	162,282
Increase	$27,035	$4,549	$1,077	$(45)	$32,616
Percentage Increase	22.8%	42.5%	*	*	25.2%

North Asia/ Admin &
(in thousands) America Europe Pacific All Other Total
Three months ended

September 30, 2016 $ 99,524
$ 13,500
$ 511
$ (60 ) $ 113,475
September 30, 2017 101,628
18,068
209
(20 ) 119,885
Increase (decrease) $ 2,104
$ 4,568
$ (302 ) $ 40
$ 6,410
Percentage increase 2 % 34 % *
*
6 %

* 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 ~~September 30, 2016~~March 31, 2021 and ~~2017,~~2020, respectively:


	North America		Europe		Asia/ Pacific		Admin & All Other	Total
2020 gross profit percentage	47.7	%	32.7	%	8.9	%	*	45.7	%
2021 gross profit percentage	48.5	%	34.4	%	44.7	%	*	46.7	%

(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 %

* The statistic is not meaningful or material.

•Net sales increased 8%20.7%, primarily due to higher sales volumes from the return of Lowe's and increased repair and remodel activity, as well as from other distribution channels, which also benefited from increases in new housing starts and repair and remodel activity. Canada's net sales also increased primarily due to higher sales volumes and were positively impacted by approximately $0.8 million in foreign currency translation.

•Gross profit as a percentage of net sales increased to 48.5% from 47.7%, primarily due to lower labor, factory, warehouse and freight costs, each as a percentage of net sales, partly offset by higher material costs as a percentage of net sales.

•Research, development and engineering expenses increased 9.0%, primarily due to increases of $0.5 million in ~~average net sales unit prices as well as~~personnel costs and $0.3 million in ~~sales volumes. Canada's net sales~~professional fees, and $0.2 million in patent costs.

•Selling expense increased 9.1%, primarily due to increases of $1.8 million in personnel costs, $1.5 million in stock-based compensation, and $0.7 million in professional fees, offset by decreases of $2.0 million in travel–associated expenses.

•General and administrative expense increased 26.6%, primarily due to increases of $3.5 million in stock-based compensation expense, $2.8 million for ~~the quarter~~professional\legal fees, $1.4 million in personnel costs, $0.9 million in depreciation and amortization, partly offset by a decrease of $0.5 million in travel-related expenses.

•Income from operations increased by $15.8 million, primarily due to increased gross profit, partly offset by higher operating expenses.

•Net sales ~~volumes. Canada's net~~increased 35.3%, primarily due to higher sales volumes and were ~~not significantly~~positively affected by approximately $3.6 million in foreign currency ~~translation.~~translation related to Europe's currencies strengthening against the United States dollar.

•Gross profit as a percentage of net sales decreased to ~~48%~~34.4% from ~~50%~~32.7%, primarily due to lower factory, warehouse and shipping costs, partly offset by higher material costs, each as a percentage of net sales.

•Income from operations increased ~~material, factory and overhead and labor expenses.~~

•For information about the Company's Asia/Pacific segment, please refer to the ~~table~~tables above setting forth changes in our operating results for the three months ended ~~September 30, 2017~~March 31, 2021 and ~~2016.~~2020, respectively.

~~Administrative and~~Admin & All Other

•General and administrative ~~expenses decreased primarily due to a decrease of $0.9 million in cash profit sharing expense.~~

~~Business Outlook~~

~~Based on current information and subject to future events and circumstances, the Company currently estimates that:~~

~~Results of Operations for the Nine Months Ended September 30, 2017, Compared with the Nine Months Ended September 30, 2016~~

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 nine months ended September 30, 2017, against the results of operations for the nine months ended September 30, 2016. Unless otherwise stated, the results announced below refer to the nine months ended September 30, 2016 and the nine months ended September 30, 2017. To avoid fractional percentages, all percentages presented below were rounded to the nearest whole number.

Unless otherwise stated, the Company’s results below, when referencing “recent acquisitions,” refer to the August 2016 acquisition of 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.

~~Year-to-Date (9-month) 2017 Consolidated Financial Highlights~~

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

Nine Months Ended Increase (Decrease) in Operating Segment Nine Months Ended
September 30, North Asia/ Admin & September 30,
(in thousands) 2016 America Europe Pacific All Other 2017
Net sales 660,470
$ 43,567
$ 40,749
$ 559
$ —
$ 745,345
Cost of sales 342,985
27,405
29,562
1,762
65
401,779
Gross profit 317,485
16,162
11,187
(1,203 ) (65 ) 343,566
Research and development and other engineering expense 33,807
876
349
19
—
35,051
Selling expense 74,313
6,750
4,921
166
—
86,150
General and administrative expense 96,786
10,039
2,668
253
(1,697 ) 108,049
Gain on sale of assets (763 ) 673
(14 ) (43 ) —
(147 )
Income from operations 113,342

(2,176 )
3,263

(1,598 )
1,632
114,463
Loss in equity method investment, before tax —
(53 ) —
—
—
(53 )
Interest expense, net (400 ) 109
(257 ) 248
(385 ) (685 )
Gain (adjustment) on bargain purchase of a business —
—
6,336
—
—
6,336
Gain on disposal of a business —
—
443
—
—
443
Income before income taxes 112,942
(2,120 ) 9,785
(1,350 ) 1,247
120,504
Provision for income taxes 40,601
86
885
(489 ) (111 ) 40,972
Net income $ 72,341
$ (2,206 ) $ 8,900
$ (861 ) $ 1,358
$ 79,532

~~Net sales~~increased 13% to 745.3 million from $660.5 million. Recent acquisitions accounted for $43.4 million (51%) of the increase in net sales. Net sales to dealer distributors, lumber dealers, contractor distributors and home centers increased, primarily due to increased home construction activity and average net unit price. Wood construction product net sales, including sales of connectors, truss plates, fastening systems, fasteners and shearwalls, represented 86% and 85% of the Company's total net sales in the first nine months of 2017 and 2016, respectively. Concrete construction product net sales, including sales of adhesives, chemicals, mechanical anchors, powder actuated tools and reinforcing fiber materials, represented 14% and 15% of the Company's total net sales in the first nine months of 2017 and 2016, respectively.

~~Gross profit~~ increased to $343.6 million from $317.5 million. Gross profit margins decreased to 46% from 48%. Recently acquired businesses had an average gross profit margin of 31% in the first nine months of 2017. The 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 47% from 49% for wood construction products and decreased to 34% from 36% for concrete construction products.

~~Research and development and engineering expense~~ ~~increased 4% to $35.1 million from $33.8~~$1.8 million, primarily due to increases of $1.1 million in personnel costs mainly attributable to the addition of staff and pay rate increases instituted on January 1, 2017, and $0.5 million in product development and support, partly offset by a decrease of $0.6 million in cash profit sharing on lower operating income.

~~Selling and marketing expense~~ increased 16% to $86.2 million from $74.3 million primarily due to recent acquisitions, which increased selling expense by $5.5 million, as well as increases of $3.8 million in personnel costs, $2.7 million in point of purchase, trade show and sale promotion costs and $0.7 million in amortization expense, partly offset by a decrease of $0.9 million in cash profit sharing costs on lower operating income.

~~General and administrative expense~~ increased 12% to $108.0 million from $96.8 million primarily due to increases of $6.8 million in personnel costs mostly related to recent acquisitions and the addition of staff and pay rate increases instituted on January 1, 2017, $5.3 million in legal and professional fees mostly related to strategic initiatives such as software and systems integration and compensation and governance changes, $3.4 million in software licensing, maintenance and hosting fees, $1.5 million in stock-based compensation and $0.9 million in depreciation expense, which was partly offset by a decrease of $5.1 million in cash profit sharing expense on lower operating income and reduced payouts under our executive officer cash profit sharing plan as well as an increase of $1.9 million from favorable net foreign currency translations. Recently acquired businesses were responsible for $8.3 million of the total increase in general and administrative expenses.

~~Gain (adjustment) on bargain purchase of a business~~ - On January 3, 2017, we acquired Gbo Fastening Systems for approximately $10.2 million. This transaction was recorded as a business combination in accordance with the business acquisition method. We recorded a bargain purchase gain of $6.3 million, which represents an estimate of the excess fair value of the net assets acquired and liabilities assumed over the consideration exchanged as of the acquisition date. This nonrecurring, non-operating income gain is included in the line item “Gain (adjustment) on bargain purchase of a business” in our results of operations for the nine months ended September 30, 2017.

~~Our~~ ~~effective income tax rate~~ decreased to 34% from 36%. The decrease was primarily due to a nonrecurring gain on a bargain purchase related to the Gbo Fastening Systems acquisition, which was not taxable, and the adoption of ASU 2016-09 in 2017 as highlighted above.

~~Net income~~ was $79.5 million compared to $72.3 million. Diluted net income per common share was $1.66 compared to $1.49. The increase in net income was primarily due to the nonrecurring $6.3 million gain on a bargain purchase, which increased diluted net income by $0.13 per common share.

~~The following table represents net sales by segment for the nine-month periods ended September 30, 2016 and 2017, respectively:~~

North Asia/
(in thousands) America Europe Pacific Total
Nine Months Ended

September 30, 2016 569,198
86,003
5,269
$ 660,470
September 30, 2017 612,765
126,752
5,828
745,345
Increase $ 43,567
$ 40,749
$ 559
$ 84,875
Percentage increase 8 % 47 % 11 % 13 %

~~The following table represents segment net sales as percentages of total net sales for the nine-month periods ended September 30, 2016 and 2017, respectively:~~

North
America
Europe
Asia/
Pacific
Total
Percentage of total 2016 net sales 86 % 13 % 1 % 100 %
Percentage of total 2017 net sales 82 % 17 % 1 % 100 %

~~The following table represents gross profit by segment for the nine-month periods ended September 30, 2016 and 2017, respectively:~~

North Asia/ Admin &
(in thousands) America Europe Pacific All Other Total
Nine Months Ended

September 30, 2016 280,940
34,746
1,867
(68 ) $ 317,485
September 30, 2017 297,102
45,933
664
(133 ) 343,566
Increase (decrease) $ 16,162
$ 11,187
$ (1,203 ) $ (65 ) $ 26,081
Percentage increase 6 % 32 % *
*
8 %

* The statistic is not meaningful or material.

~~The following table represents gross profit as a percentage of sales by segment for the nine-month periods ended September 30, 2016 and 2017, respectively:~~

(in thousand)
North
America
Europe
Asia/
Pacific

Admin &
All Other
Total
2016 gross profit percentage 49 % 40 % 35 % * 48 %
2017 gross profit percentage 49 % 36 % 11 % * 46 %

* The statistic is not meaningful or material.

~~Income from operations increased $3.3 million, mostly due to increased gross profits, which were partially offset by higher operating expenses.~~

~~Administrative and All Other~~

Effect of New Accounting Standards

See "Note 1 Basis of Presentation - ~~Recently~~— Not Yet Adopted Accounting Standards~~” and “Recently Issued Accounting Standards Not Yet Adopted~~” to the accompanying unaudited interim condensed consolidated financial statements.

Liquidity and Sources of Capital

~~Our primary sources of liquidity~~The Company is a borrower, and certain domestic subsidiaries are ~~cash~~guarantors, under a revolving credit agreement with Wells Fargo Bank, N.A. as administrative agent, and ~~cash equivalents, our cash flow from operations and our~~certain other lenders, which provides the Company with a $300.0 million revolving line of credit ~~facility~~(the “Credit Facility”) that expires on July 23, ~~2021. As~~2022, and an irrevocable standby letter of ~~September 30, 2017, there were no amounts outstanding under this facility. We also received proceeds through the exercise~~credit in support of stock options by our employees. Our outstanding stock options, all of which are currently in-the-money, will expire by February 2018 if not exercised by then. As a result, we anticipate that we will receive up to $3.9 million from stock option exercises through that time.various insurance deductibles.

Our principal uses of liquidity include the costs and expenses associated with our operations, including financing working capital requirements and continuing our capital allocation strategy, which includes ~~growing our business by internal improvements,~~supporting capital expenditures, repurchasing ~~our~~the Company's common stock, paying cash dividends, and ~~meeting~~financing other ~~liquidity requirements for~~investment opportunities over the next twelve months.


	Three Months Ended March 31,
(in thousands)		2021		2020
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases		$	2,805	$	2,418
Finance cash flows for finance leases		290		290

Operating right-of-use assets obtained in exchange for lease obligations during the current period		786		2,068


(in thousands)	Finance Leases		Operating Leases
Remaining nine months of 2021	$	193	$	8,089
2022	0		9,102
2023	0		6,994
2024	0		5,449
2025	0		5,046
Thereafter	0		19,066
Total lease payments	193		53,746
Less: Present value discount	0		(8,995)
Total lease liabilities	$	193	$	44,751


Weighted-average remaining lease terms (in years):	2021		2020
Operating leases	7.13		6.38
Finance leases	0.25		1.19
Weighted-average discount rate:
Operating leases	5.28	%	5.36	%
Finance leases	3.50	%	3.24	%



	September 30,						December 31,
	2017			2016			2016
ASSETS
Current assets
Cash and cash equivalents	$	204,171		$	218,720		$	226,537
Trade accounts receivable, net	159,571			141,716			112,423
Inventories	244,476			220,207			232,274
Other current assets	13,276			12,321			14,013
Total current assets	621,494			592,964			585,247

Property, plant and equipment, net	265,178			229,670			232,810
Goodwill	137,313			126,845			124,479
Equity investment (see Note 6)	2,582			—			2,500
Intangible assets, net	30,050			24,629			22,864
Other noncurrent assets	11,766			10,195			12,074
Total assets	$	1,068,383		$	984,303		$	979,974
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Capital lease obligations - current portion	$	1,047		$	—		$	—
Trade accounts payable	30,857			24,777			27,674
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
Total current liabilities	142,533			117,382			108,796

Capital lease obligations - net of current portion	2,875			—			—
Deferred income tax and other long-term liabilities	6,933			5,817			5,336
Total liabilities	152,341			123,199			114,132
Commitments and contingencies (see Note 8)
Stockholders’ equity
Common stock, at par value	476			486			473
Additional paid-in capital	265,490			243,900			255,917
Retained Earnings	683,554			687,052			642,422
Treasury stock	(20,000		)	(47,002		)	—
Accumulated other comprehensive loss	(13,478		)	(23,332		)	(32,970		)
Total stockholders’ equity	916,042			861,104			865,842
Total liabilities and stockholders’ equity	$	1,068,383		$	984,303		$	979,974



	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2017			2016			2017			2016
Net sales	$	262,476		$	230,974		$	745,345		$	660,470
Cost of sales	142,591			117,499			401,779			342,985
Gross profit	119,885			113,475			343,566			317,485
Operating expenses:
Research and development and other engineering	8,679			10,932			35,051			33,807
Selling	28,156			24,304			86,150			74,313
General and administrative	36,501			32,543			108,049			96,786
Net gain on disposal of assets	(147		)	(81		)	(147		)	(763		)
	73,189			67,698			229,103			204,143
Income from operations	46,696			45,777			114,463			113,342
Loss in equity method investment, before tax	(13		)	—			(53		)	—
Interest expense, net	(296		)	(82		)	(685		)	(400		)
Gain (adjustment) on bargain purchase of a business	(2,052		)	—			6,336			—
Gain on disposal of a business	443			—			443			—
Income before taxes	44,778			45,695			120,504			112,942
Provision for income taxes	16,581			15,898			40,972			40,601
Net income	$	28,197		$	29,797		$	79,532		$	72,341

Earnings per common share:
Basic	$	0.60		$	0.62		$	1.67		$	1.50
Diluted	$	0.59		$	0.62		$	1.66		$	1.49

Number of shares outstanding
Basic	47,367			48,119			47,544			48,231
Diluted	47,686			48,352			47,843			48,429

Cash dividends declared per common share	$	0.42		$	0.18		$	0.81		$	0.52



						Additional						Accumulated Other
	Common Stock					Paid-in			Retained			Comprehensive			Treasury
	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
Net income	—		—			—			72,341			—			—			72,341
Translation adjustment, net of tax	—		—			—			—			5,244			—			5,244
Options exercised	227		3			6,692			—			—			—			6,695
Stock-based compensation	—		—			9,039			—			—			—			9,039
Tax benefit of options exercised	—		—			140			—			—			—			140
Shares issued from release of Restricted Stock Units	216		2			(3,998		)	—			—			—			(3,996		)
Repurchase of common stock	(1,090	)	—			(6,500		)	—			—			(47,002		)	(53,502		)
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
Net income	—		—			—			17,393			—						17,393
Translation adjustment, net of tax	—		—			—			—			(9,164		)	—			(9,164		)
Pension adjustment, net of tax	—		—			—			—			(474		)	—			(474		)
Options exercised	43		—			1,281			—			—			—			1,281
Stock-based compensation	—		—			4,147			—			—			—			4,147
Tax benefit of options exercised	—		—			111			—			—			—			111
Shares issued from release of Restricted Stock Units	1		—			(22		)	—			—			—			(22		)
Repurchase of common stock	(154	)	—			6,500			—			—			(6,500		)	—
Retirement of common stock	—		(13		)	—			(53,489		)	—			53,502			—
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
Net income	—		—			—			79,532			—			—			79,532
Translation adjustment, net of tax	—		—			—			—			19,492			—			19,492
Options exercised	120		1			3,565			—			—			—			3,566
Stock-based compensation	—		—			10,764			—			—			—			10,764
Shares issued from release of Restricted Stock Units	210		2			(5,168		)	—			—			—			(5,166		)
Repurchase of common stock	(461	)	—			—			—			—			(20,000		)	(20,000		)
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



	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



	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.



	At September 30, 2016
	Gross					Net
(in thousands)	Carrying Amount		Accumulated Amortization			Carrying Amount
North America	$	27,488	$	(17,347	)	$	10,141
Europe	31,090		(16,602		)	14,488
Total	$	58,578	$	(33,949	)	$	24,629



(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


	Condensed Consolidated Balance Sheets Line Item	March 31,				December 31,
(in thousands)		2021		2020		2020
Operating leases
Assets
Operating leases	Operating lease right-of-use assets	$	44,236	$	33,725	$	45,792
Liabilities
Operating - current	Accrued expenses and other current liabilities	$	8,941	$	7,603	$	9,143
Operating - noncurrent	Operating lease liabilities	35,810		26,084		37,199
Total operating lease liabilities		$	44,751	$	33,687	$	46,342

Finance leases
Assets
Property and equipment, gross	Property, plant and equipment, net	$	3,569	$	3,566	$	3,569
Accumulated amortization	Property, plant and equipment, net	(3,188)		(2,903)		(3,112)
Property and equipment, net	Property, plant and equipment, net	$	381	$	663	$	457
Liabilities
Other current liabilities	Accrued expenses and other current liabilities	$	193	$	1,125	$	384
Other long-term liabilities	Deferred income tax and other long-term liabilities	0		6		0
Total finance lease liabilities		$	193	$	1,131	$	384


	Condensed Consolidated Statements of Operations Line Item	Three Months Ended March 31,
(in thousands)			2021		2020
Operating lease cost	General administrative expenses and cost of sales		$	2,859	$	2,492

Finance lease cost:
Amortization of right-of-use assets	General administrative expenses		$	216	$	218
Interest on lease liabilities	Interest expense, net		2		11
Total finance lease			$	218	$	229



	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	%



	Nine Months Ended			Increase (Decrease) in Operating Segment												Nine Months Ended
	September 30,			North						Asia/			Admin &			September 30,
(in thousands)	2016			America			Europe			Pacific			All Other			2017
Net sales	660,470			$	43,567		$	40,749		$	559		$	—		$	745,345
Cost of sales	342,985			27,405			29,562			1,762			65			401,779
Gross profit	317,485			16,162			11,187			(1,203		)	(65		)	343,566
Research and development and other engineering expense	33,807			876			349			19			—			35,051
Selling expense	74,313			6,750			4,921			166			—			86,150
General and administrative expense	96,786			10,039			2,668			253			(1,697		)	108,049
Gain on sale of assets	(763		)	673			(14		)	(43		)	—			(147		)
Income from operations	113,342			(2,176		)	3,263			(1,598		)	1,632			114,463
Loss in equity method investment, before tax	—			(53		)	—			—			—			(53		)
Interest expense, net	(400		)	109			(257		)	248			(385		)	(685		)
Gain (adjustment) on bargain purchase of a business	—			—			6,336			—			—			6,336
Gain on disposal of a business	—			—			443			—			—			443
Income before income taxes	112,942			(2,120		)	9,785			(1,350		)	1,247			120,504
Provision for income taxes	40,601			86			885			(489		)	(111		)	40,972
Net income	$	72,341		$	(2,206	)	$	8,900		$	(861	)	$	1,358		$	79,532


(in thousands)	Number of Shares Repurchased	Cash Paid for Share Repurchases		Cash paid for Dividends		Total
January 1 - March 31, 2021	—	$	—	$	9,967	$	9,967
January 1 - December 31, 2020	1,053	$	76,189	$	40,400	$	116,589
January 1 - December 31, 2019	972	60,816		40,258		101,074
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	1,244	53,502		32,711		86,213
January 1 - December 31, 2015	1,339	47,144		29,352		76,496
Total	7,701	$	418,191	$	229,560	$	647,751



(in thousands)	Dividends Paid		Open Market Share Repurchases		Accelerated Share Repurchases		Total
January 1 - September 30, 2017	$	27,044	$	—	$	20,000	$	47,044
January 1 - December 31, 2016	32,711		3,502		50,000		86,213
January 1 - December 31, 2015	29,352		22,144		25,000		76,496
Total	$	89,107	$	25,646	$	95,000	$	209,753


	(a)	(b)		(c)	(d)
Period	Total Number of Shares Purchased [1][2]	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs [2]	Approximate Dollar Value of Shares that May Yet Be Purchased under the Plans or Programs [2]
January 1 - January 31, 2021	—	$	—	—	—
February 1 - February 28, 2021	55,157	$	95.53	—	—
March 1 - March 31, 2021	298	$	90.82	—	—
Total	55,455



	(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


						EXHIBIT INDEX
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~~31.1						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.


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


32						Section 1350 Certifications are furnished herewith.
101.INS						XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH						Inline XBRL Taxonomy Schema Linkbase Document
101.CAL						Inline XBRL Taxonomy Calculation Linkbase Document
101.DEF						Inline XBRL Taxonomy Definition Linkbase Document
101.LAB						Inline XBRL Taxonomy Labels Linkbase Document
101.PRE						Inline XBRL Taxonomy Presentation Linkbase Document
104						Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)