Simpson Manufacturing Company, Inc.

Greetings and welcome to the Simpson Manufacturing Company third quarter 2025 earnings conference call. At this time, all participants are in a listen-only mode. A question and answer session will follow the phone presentation. If anyone should require operating assistance, please press star zero on your telephone keypad. It is now my pleasure to introduce your host, Kim Orlando of Investor Relations. Thank you. You may begin.

Good afternoon, ladies and gentlemen, and welcome to Simpson Manufacturing Company's third quarter 2025 earnings conference call. Any statements made on this call that are not statements of historical fact are forward-looking statements. Such statements are based on certain estimates and expectations and are subject to a number of risks and uncertainties. Actual future results may vary materially from those expressed or implied by the forward-looking statements. We encourage you to read the risks described in the company's public filings and reports, which are available on the SEC's or the company's corporate website. Except to the extent required by applicable securities laws, we undertake no obligation to update or publicly revise any of the forward-looking statements that we make here today, whether as a result of new information, future events, or otherwise. On this call, we will also refer to non-GAAP measures such as adjusted EBITDA, which is reconciled to the most comparable GAAP measure of net income in the company's earnings press release. Please note that the earnings press release was issued today at approximately 4.15 p.m. Eastern Time. The earnings press release is available on the Investor Relations page of the company's website at ir.simpsonmfg.com. Today's call is being webcast, and a replay will also be available on the investor relations page of the company's website. Now, I would like to turn the conference over to Mike Oloski, Simpson's President and Chief Executive Officer.

Thanks, Kim. Good afternoon, everyone, and thank you for joining today's call. I'm joined by Matt Dunn, our Chief Financial Officer. Today, I'll share highlights from our third quarter performance, key developments across our end markets, and progress on our strategic initiatives. Matt will then walk through the financials and our updated fiscal 2025 outlook. We are pleased to report net sales of $623.5 million, a 6.2% increase year over year, primarily driven by our June 2nd price increase and a positive impact from foreign exchange. This growth reflects the ability of our business model to navigate a challenging macroeconomic environment even as residential housing markets in the U.S. and Europe remain soft. In North America, net sales rose to $483.6 million, up 4.8% from the prior year. This includes an estimated $30 million contribution from our June price increase. North American volumes were modestly lower. This reflects broader market conditions, including significantly lower housing starts, both in the southern and western regions of the United States, where we have more content per unit as a result of stronger building codes. As a reminder, our volume calculations exclude contributions from software, services, and equipment. While comparative data versus U.S. housing starts was unavailable for Q3 due to the government shutdown, we remain confident in our ability to outperform the market over the long term. Our focus on innovation, customer service, and operational excellence continues to drive solid results. Highlighting some developments from our key end markets, our volume performance was mixed, though we're seeing positive momentum across several key areas. The OEM business delivered high single-digit volume growth, led by mass timber solutions and new product introductions. Direct sales to manufacturers of material handling and data center equipment also posted solid gains. In a component manufacturer business, we achieve low single-digit volume growth supported by our new customer wins and expanded product offerings. We recently launched CS Producer. It's our first cloud-based trust production management software. CS Producer gives floor and roof trust manufacturers powerful ways to schedule and manage daily operations. It's also a major milestone in our software roadmap and received enthusiastic feedback at the Building Component Manufacturers Conference. In our national retail business, volume was slightly down, while point-of-sale performance improved mid-single digits. We saw continued strength in outdoor accents, fastener solutions, e-commerce, and pro initiatives with our two largest retail partners. Expanded shelf space and new products introduced last year are contributing positively. In the residential business, volumes declined slightly. However, we secured new business through dealer conversions, and growth in outdoor living solutions. Multifamily demand remains a bright spot, especially in the Northwest, Northeast, and Canada. In the commercial business, volumes declined mid-single digits, reflecting an overall weak commercial market, but we saw growth in cold-formed steel connectors and adhesive anchor lines, driven by strong field engagement and specification efforts. I'm also proud to highlight that our commitment to customer service was recognized with two supplier awards from Do It Best and Southern Carlson during the third quarter. In Europe, net sales reached $134.4 million, up 10.9% year over year, or a solid 4.3% on a local currency basis. Growth was driven by increased volumes resulting in performance that outpaced the market. As we look ahead, we are undertaking proactive strategic cost savings initiatives to align our operations with evolving market demand and position the company for long-term success. This is in response to a downturn in the housing market that started in 2022. While these decisions are not easy, we are committed to supporting our team and ensuring we do not compromise on what we're known for, which is delivering best-in-class service to our customers. These actions are designed to drive efficiencies, preserve profitability, and unlock future growth opportunities in what's expected to be a continued soft market. As a result of these actions, we expect to generate annualized cost savings of at least $30 million, with one-time charges of approximately $9 million to $12 million that will be realized in fiscal 2025. We remain committed to supporting our team in delivering exceptional customer service. Matt will provide further detail on the financial impact shortly. turning to consolidated gross margin, which was 46.4%, and slightly below last year. This reflects higher input costs, including tariffs and labor costs. Our June price increase helped partially offset rising costs, and we've taken further pricing actions effective October 15th to address additional tariffs announced subsequent to our prior price increase. These increases are expected to contribute approximately $100 million in annualized sales. We expect continued deceleration in our gross margins as the impact of tariffs flow through our inventory. Third quarter operating margin was 22.6%, up 130 basis points year over year, including a $12.9 million gain from the sale of our Gallatin, Tennessee facility and approximately $3 million in restructuring costs. Adjusted EBITDA totaled $155.3 million, a 4.5% increase year-over-year. Next, I'd like to highlight progress on our financial ambitions. First, continuing above-market volume growth relative to U.S. housing starts. We're updating our 2025 outlook for U.S. housing starts. We now expect them to decline mid-single digits compared to 2024. In Europe, housing starts in 2025 are expected to remain relatively consistent with 2024. We remain focused on growing above the market. Second, maintaining an operating income margin at or above 20%. Considering the cost savings initiatives we are taking, in a growing market, we remain confident in our ability to deliver 20 plus percent operating margins. And third, As a growth-focused company with industry-leading margins, we believe we can consistently drive EPS growth ahead of net sales growth. Year-to-date EPS has increased approximately 510 basis points above revenue growth, demonstrating our ability to deliver shareholder value. In summary, we delivered solid results in a challenging housing environment. Our pricing actions, cost-savings initiatives, and market share gains are positioning us for continued success. We're optimistic about the future and believe in our ability to drive growth, improve profitability, and capitalize on a market recovery. Thank you to our incredible team for their dedication, resilience, and relentless customer focus. With that, I'd like to turn the call over to Matt, who will discuss our financial results and outlook in greater detail.