UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


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

For the quarterly period ended: ~~September~~June 30, ~~2020~~2021


☐			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, including zip code)

(925) 560-9000

(Registrant’s telephone number, including area code)


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 every Interactive Data File required to be submitted 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 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

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

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 ☐ 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 ~~November 2, 2020: 43,421,469.~~August 3, 2021: 43,439,655

Simpson Manufacturing Co., Inc. and Subsidiaries

TABLE OF CONTENTS

Part I - Financial Information


Item 1 - Financial Statements
		Page No.
	Condensed Consolidated Balance Sheets (unaudited) as of June 30, 2021 ~~September 30,~~ , 2020 ~~2019~~ and December 31, ~~2019~~2020	4
	Condensed Consolidated Statements of Earnings and Comprehensive Income (unaudited) for the Three and ~~Nine~~ Six Months Ended ~~September~~June 30, ~~2020~~2021 and ~~2019~~2020	5
	Condensed Consolidated Statements of Stockholders' Equity (unaudited)~~for the Three and Nine Months ended September 30, 2020 and~~ for Th ~~2019~~ree and Six Months Ended at June 30, 2021 and 2020	6
	Condensed Consolidated Statements of Cash Flows (unaudited) for the ~~Nine~~Six Months Ended ~~September~~June 30, ~~2020~~2021 and ~~2019~~2020	8
	Notes to Condensed Consolidated Financial Statements	9
Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations		22
Item 3 - Quantitative and Qualitative Disclosures about Market Risk		33
Item 4 - Controls and Procedures		34
Part II - Other Information
Item 1 - Legal Proceedings		35
Item 1A - Risk Factors		35
Item 2 - Unregistered Sales of Equity Securities and Use of Proceeds		35
Item 3 - Defaults Upon Senior Securities		35
Item 4 - Mine Safety Disclosures		35
Item 5 - Other Information		35
Item 6 - Exhibits		3635

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements.

Simpson Manufacturing Co., Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(In thousands, unaudited)


		September 30,				December 31,			June 30,				December 31,
		2020		2019		2019			2021		2020		2020
ASSETS	ASSETS							ASSETS
Current assets	Current assets							Current assets
Cash and cash equivalents	Cash and cash equivalents	$	311,465	$	194,061	$	230,210	Cash and cash equivalents	$	305,796	$	315,448	$	274,639
Trade accounts receivable, net	Trade accounts receivable, net	226,447		180,898		139,364		Trade accounts receivable, net	249,931		233,867		165,128
Inventories	Inventories	260,054		242,730		251,907		Inventories	310,254		265,365		283,742

Other current assets	Other current assets	22,439		17,565		19,426		Other current assets	35,722		20,222		29,630
Total current assets	Total current assets	820,405		635,254		640,907		Total current assets	901,703		834,902		753,139

Property, plant and equipment, net	Property, plant and equipment, net	246,472		250,950		249,012		Property, plant and equipment, net	255,353		247,119		255,184
Operating lease right-of-use assets	Operating lease right-of-use assets	41,453		34,463		35,436		Operating lease right-of-use assets	43,374		36,930		45,792
Goodwill	Goodwill	133,734		131,191		131,879		Goodwill	134,121		132,335		135,844
Equity investment		2,475		2,485		2,480

Intangible assets, net	Intangible assets, net	20,964		21,816		25,071		Intangible assets, net	23,749		22,139		26,800
Other noncurrent assets	Other noncurrent assets	12,362		10,149		10,581		Other noncurrent assets	15,674		11,078		15,810
Total assets	Total assets	$	1,277,865	$	1,086,308	$	1,095,366	Total assets	$	1,373,974	$	1,284,503	$	1,232,569
LIABILITIES AND STOCKHOLDERS’ EQUITY	LIABILITIES AND STOCKHOLDERS’ EQUITY							LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities	Current liabilities							Current liabilities
Trade accounts payable	Trade accounts payable	$	42,271	$	40,861	$	33,351	Trade accounts payable	$	60,268	$	49,149	$	48,271
Accrued liabilities and other current liabilities	Accrued liabilities and other current liabilities	148,890		125,006		125,556		Accrued liabilities and other current liabilities	172,186		144,265		145,790

Total current liabilities	Total current liabilities	191,161		165,867		158,907		Total current liabilities	232,454		193,414		194,061
Operating lease liabilities	Operating lease liabilities	33,354		27,256		27,930		Operating lease liabilities	34,087		28,893		37,199
Long term debt, net of current portion	Long term debt, net of current portion	75,000		0		0		Long term debt, net of current portion	0		150,000		0
Deferred income tax and other long-term liabilities	Deferred income tax and other long-term liabilities	17,550		16,238		16,572		Deferred income tax and other long-term liabilities	20,528		17,984		20,366
Total liabilities	Total liabilities	317,065		209,361		203,409		Total liabilities	287,069		390,291		251,626
Commitments and contingencies (see Note 12)
Commitments and contingencies (see Note 13)								Commitments and contingencies (see Note 13)	0		0		0
Stockholders’ equity	Stockholders’ equity							Stockholders’ equity
Common stock, at par value	Common stock, at par value	444		446		442		Common stock, at par value	435		444		433
Additional paid-in capital	Additional paid-in capital	281,134		278,898		280,216		Additional paid-in capital	289,261		277,625		284,007
Retained earnings	Retained earnings	772,851		649,053		645,507		Retained earnings	822,497		716,038		720,441
Treasury stock	Treasury stock	(72,058)		(21,437)		(9,379)		Treasury stock	(13,510)		(72,058)		(13,510)
Accumulated other comprehensive loss	Accumulated other comprehensive loss	(21,571)		(30,013)		(24,829)		Accumulated other comprehensive loss	(11,778)		(27,837)		(10,428)
Total stockholders’ equity	Total stockholders’ equity	960,800		876,947		891,957		Total stockholders’ equity	1,086,905		894,212		980,943
Total liabilities and stockholders’ equity	Total liabilities and stockholders’ equity	$	1,277,865	$	1,086,308	$	1,095,366	Total liabilities and stockholders’ equity	$	1,373,974	$	1,284,503	$	1,232,569

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

Simpson Manufacturing Co., Inc. and Subsidiaries

Condensed Consolidated Statements of Earnings and Comprehensive Income

(In thousands except per-share amounts, unaudited)


		Three Months Ended				Nine Months Ended					Three Months Ended				Six Months Ended
		September 30,				September 30,					June 30,				June 30,
		2020		2019		2020		2019			2021		2020		2021		2020
Net sales	Net sales	$	364,304	$	309,932	$	974,048	$	874,029	Net sales	$	410,281	$	326,076	$	757,922	$	609,744
Cost of sales	Cost of sales	191,061		172,288		521,339		491,952		Cost of sales	213,835		176,276		399,195		330,278
Gross profit	Gross profit	173,243		137,644		452,709		382,077		Gross profit	196,446		149,800		358,727		279,466
Operating expenses:	Operating expenses:									Operating expenses:
Research and development and other engineering	Research and development and other engineering	12,287		11,972		37,860		35,287		Research and development and other engineering	14,169		12,191		28,758		25,573
Selling	Selling	29,396		27,672		84,757		84,471		Selling	33,167		26,834		63,990		55,361
General and administrative	General and administrative	40,289		37,047		117,396		117,941		General and administrative	47,410		38,636		95,975		77,107
Total operating expenses	Total operating expenses	81,972		76,691		240,013		237,699		Total operating expenses	94,746		77,661		188,723		158,041
Net gain on disposal of assets	Net gain on disposal of assets	(72)		(14)		(209)		(265)		Net gain on disposal of assets	(28)		(73)		(108)		(137)
Income from operations	Income from operations	91,343		60,967		212,905		144,643		Income from operations	101,728		72,212		170,112		121,562
Interest expense, net and other	Interest expense, net and other	(518)		(1,778)		(3,202)		(2,394)		Interest expense, net and other	(2,636)		(151)		(4,413)		(2,684)
Income before taxes	Income before taxes	90,825		59,189		209,703		142,249		Income before taxes	99,092		72,061		165,699		118,878
Provision for income taxes	Provision for income taxes	23,768		15,503		52,341		36,324		Provision for income taxes	26,609		18,582		42,827		28,573
Net income	Net income	$	67,057	$	43,686	$	157,362	$	105,925	Net income	$	72,483	$	53,479	$	122,872	$	90,305
Other comprehensive income	Other comprehensive income									Other comprehensive income
Translation adjustment	Translation adjustment	6,238		5,797		3,170		5,825		Translation adjustment	7,505		4,525		(1,759)		(3,069)
Unamortized pension adjustments	Unamortized pension adjustments	28		(362)		88		(462)		Unamortized pension adjustments	(102)		(213)		390		61
Unrealized gains (losses) on derivative instruments										Unrealized gains (losses) on derivative instruments	(7)		0		19		0

Comprehensive net income	Comprehensive net income	$	73,323	$	49,121	$	160,620	$	111,288	Comprehensive net income	$	79,879	$	57,791	$	121,522	$	87,297

Net income per common share:	Net income per common share:									Net income per common share:
Basic	Basic	$	1.54	$	0.98	$	3.60	$	2.37	Basic	$	1.67	$	1.23	$	2.83	$	2.06
Diluted	Diluted	$	1.54	$	0.97	$	3.59	$	2.35	Diluted	$	1.66	$	1.22	$	2.82	$	2.05

Number of shares outstanding	Number of shares outstanding									Number of shares outstanding
Basic	Basic	43,474		44,477		43,683		44,673		Basic	43,434		43,471		43,406		43,787
Diluted	Diluted	43,683		44,814		43,873		44,995		Diluted	43,641		43,663		43,620		43,980

Cash dividends declared per common share	Cash dividends declared per common share	$	0.23	$	0.23	$	0.69	$	0.68	Cash dividends declared per common share	$	0.25	$	0.23	$	0.48	$	0.46

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

Simpson Manufacturing Co., Inc. and Subsidiaries

Condensed Consolidated Statements of Stockholders’ Equity

(In thousands except per-share data)

Three Months Ended ~~September~~June 30, ~~2020~~2021 and ~~2019~~2020 (unaudited)


		Common Stock			Additional Paid-in		Retained		Accumulated Other Comprehensive		Treasury					Common Stock			Additional Paid-in		Retained		Accumulated Other Comprehensive		Treasury
		Shares	Par Value		Capital		Earnings		Income (Loss)		Stock		Total			Shares	Par Value		Capital		Earnings		Income (Loss)		Stock		Total
Balance at June 30, 2020		43,473	$	444	$	277,625	$	716,038	$	(27,837)	$	(72,058)	$	894,212
Balance at March 31, 2021															Balance at March 31, 2021	43,430	$	435	$	285,896	$	760,862	$	(19,174)	$	(13,510)	$	1,014,509
Net income	Net income	—	—		—		67,057		—		—		67,057		Net income	—	—		—		72,483		—		—		72,483
Translation adjustment, net of tax	Translation adjustment, net of tax	—	—		—		—		6,238		—		6,238		Translation adjustment, net of tax	—	—		—		—		7,505��		—		7,505
Pension adjustment and other, net of tax															Pension adjustment and other, net of tax	—	—		—		—		(109)		—		(109)

Stock-based compensation															Stock-based compensation	—	—		3,365		—		—		—		3,365
Shares issued from release of Restricted Stock Units															Shares issued from release of Restricted Stock Units	7	0		0		—		—		—		0

Cash dividends declared on common stock, $0.25 per share															Cash dividends declared on common stock, $0.25 per share	—	—		—		(10,848)		—		—		(10,848)

Balance at June 30, 2021															Balance at June 30, 2021	43,437	$	435	$	289,261	$	822,497	$	(11,778)	$	(13,510)	$	1,086,905

Balance at March 31, 2020															Balance at March 31, 2020	43,464	$	444	$	272,872	$	672,485	$	(32,149)	$	(72,058)	$	841,594
Net income															Net income	—	—		—		53,479		—		—		53,479
Translation adjustment and other, net of tax															Translation adjustment and other, net of tax	—	—		—		—		4,525		—		4,525
Pension adjustment and other, net of tax	Pension adjustment and other, net of tax	—	—		—		—		28		—		28		Pension adjustment and other, net of tax	—	—		—		—		(213)		—		(213)
Stock-based compensation	Stock-based compensation	—	—		3,651		—		—		—		3,651		Stock-based compensation	—	—		4,797		—		—		—		4,797
Shares issued from release of Restricted Stock Units	Shares issued from release of Restricted Stock Units	3	—		(162)		—		—		—		(162)		Shares issued from release of Restricted Stock Units	9	0		(44)		—		—		—		(44)

Cash dividends declared on common stock, $0.23 per share		—	—		—		(10,244)		—		—		(10,244)
Common stock issued at $99.63 per share for stock bonus		—	$	—	20		—		—		—		20
Balance at September 30, 2020		43,476	$	444	$	281,134	$	772,851	$	(21,571)	$	(72,058)	$	960,800

Balance at June 30, 2019		44,675	$	446	$	277,024	$	615,529	$	(24,578)	$	0	$	868,421
Net income		—	—		—		43,686		—		—		43,686
Translation adjustment and other, net of tax		—	—		—		—		(5,797)		—		(5,797)
Pension adjustment, net of tax		—	—		—		—		362		—		362
Stock-based compensation		—	—		1,880		—		—		—		1,880
Shares issued from release of Restricted Stock Units		1	—		(6)		—		—		—		(6)
Repurchase of common stock		(349)			—		—		—		(21,437)		(21,437)

Cash dividends declared on common stock, $0.23 per share	Cash dividends declared on common stock, $0.23 per share	—	—		—		(10,162)		—		—		(10,162)		Cash dividends declared on common stock, $0.23 per share	—	—		—		(9,926)		—		—		(9,926)

Balance, at September 30, 2019		44,327	$	446	$	278,898	$	649,053	$	(30,013)	$	(21,437)	$	876,947
Balance, at June 30, 2020															Balance, at June 30, 2020	43,473	$	444	$	277,625	$	716,038	$	(27,837)	$	(72,058)	$	894,212

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

Simpson Manufacturing Co., Inc. and Subsidiaries

Condensed Consolidated Statements of Stockholders’ Equity

(In thousands except per-share data)

~~Nine~~Six Months Ended ~~September~~June 30, ~~2020~~2021 and ~~2019~~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, 2019 44,209 $ 442 $ 280,216 $ 645,507 $ (24,829) $ (9,379) $ 891,957
Net income — — — 157,362 — — 157,362
Translation adjustment, net of tax — — — — 3,170 — 3,170
Pension adjustment and other,
net of tax — — — — 88 — 88
Stock-based compensation — — 8,481 — — — 8,481
Shares issued from release of Restricted Stock Units 165 2 (7,905) — — — (7,903)
Repurchase of common stock (902) — — — — (62,679) (62,679)
Cash dividends declared on common stock, $0.69 per share — — — (30,018) — — (30,018)
Common stock issued at $81.30 per share for stock bonus 4 — 342 — — — 342
Balance at September 30, 2020 43,476 $ 444 $ 281,134 $ 772,851 $ (21,571) $ (72,058) $ 960,800
Balance at December 31, 2018 44,998 $ 453 $ 276,504 $ 628,207 $ (24,650) $ (25,000) $ 855,514
Net income — — — 105,925 — — 105,925
Translation adjustment, net of tax — — — — (5,825) — (5,825)
Pension adjustment and other,
net of tax — — — — 462 — 462
Stock-based compensation — — 8,007 — — — 8,007
Shares issued from release of Restricted Stock Units 178 2 (5,905) — — — (5,903)
Repurchase of common stock (854) — — — — (51,437) (51,437)
Retirement of treasury stock — (9) — (54,991) — 55,000 0
Cash dividends declared on common stock, $0.68 per share — — (30,088) — — (30,088)
Common stock issued at $54.31 per share for stock bonus 5 — 292 — — — 292
Balance, at September 30, 2019 44,327 $ 446 $ 278,898 $ 649,053 $ (30,013) $ (21,437) $ 876,947


	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	—	—		—		122,872		—		—		122,872
Translation adjustment, net of tax	—	—		—		—		(1,759)		—		(1,759)
Pension adjustment and other, net of tax	—	—		—		—		409		—		409

Stock-based compensation	—	—		9,826		—		—		—		9,826
Shares issued from release of Restricted Stock Units	104	1		(5,263)		—		—		—		(5,262)

Cash dividends declared on common stock, $0.48 per share	—	—		—		(20,816)		—		—		(20,816)
Common stock issued at $93.45 per share for stock bonus	7	1		691		—		—		—		692
Balance at June 30, 2021	43,437	$	435	$	289,261	$	822,497	$	(11,778)	$	(13,510)	$	1,086,905

Balance at December 31, 2019	44,209	$	442	$	280,216	$	645,507	$	(24,829)	$	(9,379)	$	891,957
Net income	—	—		—		90,305		—		—		90,305
Translation adjustment, net of tax	—	—		—		—		(3,069)		—		(3,069)
Pension adjustment and other, net of tax	—	—		—		—		61		—		61
Stock-based compensation	—	—		4,830		—		—		—		4,830
Shares issued from release of Restricted Stock Units	162	2		(7,743)		—		—		—		(7,741)
Repurchase of common stock	(902)	—		—		—		—		(62,679)		(62,679)

Cash dividends declared on common stock, $0.46 per share	—	—		—		(19,774)		—		—		(19,774)
Common stock issued at $80.38 per share for stock bonus	4	—		322		—		—		—		322
Balance, at June 30, 2020	43,473	$	444	$	277,625	$	716,038	$	(27,837)	$	(72,058)	$	894,212

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

Simpson Manufacturing Co., Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(In thousands, unaudited)


		Nine Months Ended					Six Months Ended
		September 30,					June 30,
		2020		2019			2021		2020
Cash flows from operating activities	Cash flows from operating activities					Cash flows from operating activities
Net income	Net income	$	157,362	$	105,925	Net income	$	122,872	$	90,305
Adjustments to reconcile net income to net cash provided by operating activities:	Adjustments to reconcile net income to net cash provided by operating activities:					Adjustments to reconcile net income to net cash provided by operating activities:
Gain on sale of assets and other		(204)		(263)
Loss/(gain) on sale of assets and other						Loss/(gain) on sale of assets and other	118		(147)
Depreciation and amortization	Depreciation and amortization	30,088		29,044		Depreciation and amortization	22,753		19,739
Noncash lease expense	Noncash lease expense	6,246		5,278		Noncash lease expense	4,914		4,025

Deferred income taxes and other long-term liabilities		1,852		2,262
Loss in equity method investment, before tax						Loss in equity method investment, before tax	2,653		0
Deferred income taxes						Deferred income taxes	1,144		1,973
Noncash compensation related to stock plans	Noncash compensation related to stock plans	9,459		8,699		Noncash compensation related to stock plans	10,245		5,428
Provision of doubtful accounts	Provision of doubtful accounts	23		435		Provision of doubtful accounts	(377)		(35)

Changes in operating assets and liabilities:	Changes in operating assets and liabilities:					Changes in operating assets and liabilities:
Trade accounts receivable	Trade accounts receivable	(87,170)		(36,385)		Trade accounts receivable	(84,702)		(95,875)
Inventories	Inventories	(7,199)		31,163		Inventories	(27,270)		(14,377)
Trade accounts payable	Trade accounts payable	7,825		8,130		Trade accounts payable	10,774		15,268

Other current assets	Other current assets	(618)		(3,197)		Other current assets	(14,802)		(4,529)
Accrued liabilities and other current liabilities	Accrued liabilities and other current liabilities	21,762		3,452		Accrued liabilities and other current liabilities	35,879		22,923

Other noncurrent assets and liabilities	Other noncurrent assets and liabilities	(9,808)		(5,308)		Other noncurrent assets and liabilities	(2,569)		(1,932)
Net cash provided by operating activities	Net cash provided by operating activities	129,618		149,235		Net cash provided by operating activities	81,632		42,766
Cash flows from investing activities	Cash flows from investing activities					Cash flows from investing activities
Capital expenditures	Capital expenditures	(20,879)		(24,495)		Capital expenditures	(19,296)		(14,083)
Asset acquisitions, net of cash acquired	Asset acquisitions, net of cash acquired	(1,425)		(3,529)		Asset acquisitions, net of cash acquired	(218)		0

Equity method investments						Equity method investments	(6,829)		0
Proceeds from sale of property and equipment	Proceeds from sale of property and equipment	750		2,498		Proceeds from sale of property and equipment	129		639
Net cash used in investing activities	Net cash used in investing activities	(21,554)		(25,526)		Net cash used in investing activities	(26,214)		(13,444)
Cash flows from financing activities	Cash flows from financing activities					Cash flows from financing activities

Repurchase of common stock	Repurchase of common stock	(62,679)		(51,437)		Repurchase of common stock	0		(62,679)
Proceeds from lines of credit	Proceeds from lines of credit	164,330		13,308		Proceeds from lines of credit	0		159,412
Repayments of lines of credit and capital leases	Repayments of lines of credit and capital leases	(89,347)		(14,335)		Repayments of lines of credit and capital leases	(384)		(10,387)
Debt issuance costs	Debt issuance costs	(712)		0		Debt issuance costs	0		(712)
Dividends paid	Dividends paid	(30,164)		(30,002)		Dividends paid	(19,956)		(20,158)
Cash paid on behalf of employees for shares withheld	Cash paid on behalf of employees for shares withheld	(7,581)		(5,905)		Cash paid on behalf of employees for shares withheld	(5,263)		(7,743)
Net cash used by in financing activities		(26,153)		(88,371)
Net cash provided by (used in) financing activities						Net cash provided by (used in) financing activities	(25,603)		57,733
Effect of exchange rate changes on cash and cash equivalents	Effect of exchange rate changes on cash and cash equivalents	(656)		(1,457)		Effect of exchange rate changes on cash and cash equivalents	1,342		(1,817)
Net increase in cash and cash equivalents	Net increase in cash and cash equivalents	81,255		33,881		Net increase in cash and cash equivalents	31,157		85,238
Cash and cash equivalents at beginning of period	Cash and cash equivalents at beginning of period	230,210		160,180		Cash and cash equivalents at beginning of period	274,639		230,210
Cash and cash equivalents at end of period	Cash and cash equivalents at end of period	$	311,465	$	194,061	Cash and cash equivalents at end of period	$	305,796	$	315,448
Noncash activity during the period	Noncash activity during the period					Noncash activity during the period
Noncash capital expenditures	Noncash capital expenditures	$	778	$	194	Noncash capital expenditures	$	1,462	$	1,308

Dividends declared but not paid	Dividends declared but not paid	10,000		10,162		Dividends declared but not paid	10,847		9,989

Issuance of Company’s common stock for compensation	Issuance of Company’s common stock for compensation	342		292		Issuance of Company’s common stock for compensation	692		322

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

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”). Investments in 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. ~~Uncertainty created by the COVID-19 pandemic will likely impact our operations, customers, and various areas of risk.~~ 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

The accompanying unaudited 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 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, ~~2019~~2020 (the ~~“2019~~“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 ~~2019~~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 or as the services are completed.~~time. The Company’s shipping terms provide the primary indicator of the transfer of control. The Company’s general shipping terms are F.O.B. shipping point, where title and risk and rewards of ownership transfer at the point when the products leave the Company’s warehouse. The Company recognizes revenue based on the consideration specified in the invoice with a customer, ~~less~~excluding any sales incentives, discounts, and amounts collected on behalf of third parties (i.e., governmental tax authorities). Based on historical experience with the customer, the customer's purchasing pattern and its significant experience selling products, the Company concluded that a significant reversal in the cumulative amount of revenue recognized will not occur when the uncertainty (if any) is resolved (that is, when the total amount of purchases is known). Refer to Note 2 for additional information.

Net Income Per Common Share

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

Accounting for Leases

The Company has operating ~~and finance~~ leases for certain facilities, equipment, ~~autos~~ and ~~data centers.~~autos. As an accounting policy for short-term leases, the Company elected to not recognize the right-of-use asset and liability, if, at the commencement date, the lease (1) has a term of 12 months or less and (2) does not include renewal and purchase options that the Company is reasonably certain to exercise. Monthly payments on short-term leases are recognized on the straight-line basis over the full lease term.

Accounting for Stock-Based Compensation

The Company recognizes stock-based compensation expense related to the estimated fair value of restricted stock ~~unit~~ awards on a straight-line basis, net of estimated forfeitures, over the requisite service period of the awards, which is generally athe vesting term of four years. Stock-based expense related to performance share grants are measured based on ~~the~~ grant date fair value and expensed on a graded basis over the service ~~periods~~period of the awards, which is generally a performance period of three years. The performance conditions are based on the Company's achievement of revenue growth and return on invested capital over the 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 expense. The assumptions used to calculate the fair value of ~~options or~~ restricted stock ~~units~~grants are evaluated and revised, as necessary, to reflect market conditions and the ~~Company's expectations.~~Company’s experience.

~~Fair~~0Fair Value of Financial Instruments

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 liabilities recorded at fair value are measured and classified under a three-tier fair valuation hierarchy based on the observability of the inputs available in the 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. The fair value hierarchy requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The carrying amounts of trade accounts receivable, accounts payable, accrued liabilities and 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 and 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. The ~~Company does not carry its long-term debt at~~ fair value ~~in its condensed consolidated balance sheets.~~of foreign currency forward contracts, calculated based on Level 1 inputs, was not material as of June 30, 2021.

Derivative Instruments - Foreign Currency Contracts

The Company ~~transacts business in various foreign countries and may therefore be exposed~~uses derivative instruments as a risk management tool to ~~foreign~~mitigate the potential impact of certain market risks. Foreign currency exchange rate ~~risk. The Company has established~~ risk ~~management programs to protect against volatility in~~is 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 subjectprimary market risk the Company ~~to risk~~manages through the use 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.

and the Chinese Yuan (CNY). As of September 30, 2020, the aggregate notional amount of the Company's outstanding foreign currency derivative contracts was to buy CNY 70.3 million by selling $10.1 million throughout fiscal 2021.~~These forward contracts~~instruments, which are accounted for as cash flow hedges under the accounting standards and carried at fair value ~~is included in~~as other current assets or other current liabilities ~~as applicable,~~ in the ~~condensed~~ consolidated balance sheets. Net deferred gains and losses ~~on these contracts relating~~related to changes in fair value are included in accumulated other comprehensive loss, a component of shareholders' equity in the ~~condensed~~ consolidated balance sheets, and are reclassified into the line item in the ~~condensed~~ consolidated statement of income in ~~the~~ which the hedged items are recorded in the same period the hedged item affects earnings. Changes in fair value of any ~~forward contracts~~derivatives that are determined to be ineffective are immediately reclassified from other comprehensive income ~~("OCI")~~ into earnings.

The ~~fair value~~cash flow impact of these foreign currency forward contracts, calculated based on Level 1 inputs, was not material as of September 30, 2020, and amounts deferred in OCI are expected to be recognized as a component of cost of salesthe Company's derivative instruments is primarily included in the consolidated statement of ~~operations primarily during 2021. There were no amounts recognized due~~cash flows in net cash provided by operating activities. Refer to ~~ineffectiveness during the three and nine-months ended September 30, 2020~~Note 8.

Cash and Cash Equivalents

The Company classifies ~~other~~ investments that are highly liquid and have maturities of three months or less at the date of purchase as cash equivalents. As of ~~September~~June 30, 2021 and 2020, the value of these investments were $57.1 million and ~~2019, the Company’s investments consisted mainly~~$76.9 million, respectively, consisting of ~~United States~~U.S. Treasury securities and money market ~~funds, included in cash equivalents~~funds. The value of the investments is based on cost, which ~~are the Company’s primary financial instruments and carried at cost, approximating~~approximates fair value based on Level 1 inputs.

Current Estimated Credit Loss - Allowance for doubtful accounts

The ~~balance~~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 ~~Company’s primary~~allowance for doubtful accounts receivable by considering several factors, including (1) specific information on the financial ~~instruments as~~condition and the current creditworthiness of ~~September~~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 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 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 June 30, ~~2020~~2021 are outlined in the table below:


	Balance at				Balance at
(in thousands)	December 31, 2020		Expense (Deductions), net	Write-Offs1	June 30, 2021

Allowance for Doubtful Accounts	$	2,110	(377)	287	$	1,446

1Amount is net of recoveries and ~~2019 was $46.4 million and $0.1 million, respectively.~~the effect of foreign currency fluctuations for the year ended June 30, 2021.

Income Taxes

The Company uses an estimated annual tax rate to measure the tax benefit or tax expense recognized in each interim period.

Accounting Standards ~~- Recently~~Not Yet Adopted

In ~~June 2016,~~March 2020, the ~~FASB~~Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2020-04, Reference Rate Reform (Topic 848). ASU ~~No. 2016-13,~~ ~~“Financial Instruments - Credit Losses (Topic 326~~): ~~Measurement of Credit Losses on Financial Instruments.” ASU 2016-13 amendments provide~~2020-04 provides optional guidance onto ease the potential burden in accounting for ~~current expected credit losses~~reference rate reform on financial ~~instruments~~reporting in response to the risk of cessation of the London Interbank Offered Rate (“LIBOR”) on December 31, 2021. The ASU allows the option to account for and present a modification that are not accounted for at fair value through net income, including loans held for investment, held-to-maturity debt securities, trade and other receivables, net investment in leases and other commitments to extend credit held by a reporting entity at each reporting date. The required measurement methodology is based on an expected loss model that includes historical experience, current conditions, and reasonable and supportable forecasts. ASU 2016-13 eliminates the probable incurredloss recognition in current GAAP. The Company adopted ASU 2016-13 prospectively on January 1, 2020. Historically, the Company's actual credit losses have not been material. The Company's financial assets inmeets the scope of the standard as an event that does not require contract remeasurement at the modification date or reassessment of a previous accounting determination required under the relevant topic or subtopic. Entities are permitted to apply the amendments to all contracts, cash flow and net investment hedge relationships that exist as of March 12, 2020. The relief provided in this ASU ~~2016-13 mainly consist~~is only available for a limited time, generally through December 31, 2022. The Company's primary credit facility is the $300 million revolving line of ~~short-term trade receivables. In estimating expected~~ credit ~~loss, we are~~(the "Credit Facility") with Wells Fargo Bank, which matures on July 12, 2026. Borrowings under the Credit Facility bear interest using LIBOR plus an applicable margin. The Credit Facility currently includes a provision for the ~~aging method, such as pooling receivables based on the levels~~determination of delinquency and applying historical loss rates, adjusted for current conditions and reasonable and supportable forecasts, to each pool. The Company will regularly reassess the customer groups by using its best judgment when considering changes in customers' credit ratings, customers' historical payments and loss experience, current market and economic conditions, and the Company's expectationsa successor LIBOR rate or an alternative rate of ~~future market and economic conditions. Adoption of ASU 2016-13 had no material effect on the Company's consolidated financial statements and footnote disclosures.~~interest.

On March 5, 2021, ICE Benchmark Administration, the administrator of the LIBOR and the Financial Conduct Authority, announced some USD LIBOR tenors (overnight, 1 month, 3 month, and 12 month) will continue to be published until June 30, 2023. We do not expect a material impact to our consolidated operating results, financial position or cash flow from the transition from LIBOR to alternative reference interest rates, but we will continue to monitor the impact of the transition until it is completed.

All ~~other~~ issued and effective accounting standards during the ~~third~~second quarter of ~~2020~~2021 were determined to be not relevant or material to the Company.

2. Revenue from Contracts with Customers

Disaggregated revenue

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 Note ~~13.~~14.

Wood Construction Products Revenue. Wood construction products represented ~~86%~~87% and ~~84%~~86% of total net sales in the ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 and ~~2019,~~2020, respectively.

Concrete Construction Products Revenue. Concrete construction products represented ~~14%~~13% and ~~16%~~14% of total net sales in the ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 and ~~2019,~~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 accounted for as a revenue contract under the standard, the Company recognizes revenue in the amount of nonrefundable consideration received when the Company has transferred control of the goods or services and has stopped transferring (and has no obligation to transfer) additional goods or services. The Company offers certain customers discounts for paying invoices ahead of the 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 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 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 the Company has transferred to a customer when that right is conditional on something other than the passage of time. Contract liabilities are recorded for any services billed to customers and not yet recognizable if the contract period has commenced or for the amount collected from customers in advance of the contract period commencing. As of ~~September~~June 30, ~~2020,~~2021, the Company 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 and ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 and ~~2019,~~2020, respectively:


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended June 30,				Six Months Ended June 30,
(in thousands, except per share amounts)	(in thousands, except per share amounts)	2020		2019		2020		2019		(in thousands, except per share amounts)	2021		2020		2021		2020
Net income available to common stockholders	Net income available to common stockholders	$	67,057	$	43,686	$	157,362	$	105,925	Net income available to common stockholders	$	72,483	$	53,479	$	122,872	$	90,305
Basic weighted-average shares outstanding	Basic weighted-average shares outstanding	43,474		44,477		43,683		44,673		Basic weighted-average shares outstanding	43,434		43,471		43,406		43,787
Dilutive effect of potential common stock equivalents — restricted stock units	Dilutive effect of potential common stock equivalents — restricted stock units	209		337		190		322		Dilutive effect of potential common stock equivalents — restricted stock units	207		192		214		193
Diluted weighted-average shares outstanding	Diluted weighted-average shares outstanding	43,683		44,814		43,873		44,995		Diluted weighted-average shares outstanding	43,641		43,663		43,620		43,980
Net income per common share:	Net income per common share:									Net income per common share:
Basic	Basic	$	1.54	$	0.98	$	3.60	$	2.37	Basic	$	1.67	$	1.23	$	2.83	$	2.06
Diluted	Diluted	$	1.54	$	0.97	$	3.59	$	2.35	Diluted	$	1.66	$	1.22	$	2.82	$	2.05

4. Stockholders' Equity

~~Share Repurchases~~

During the nine months ended September 30, 2020, the Company repurchased 902,340 shares of the Company's common stock in the open market at an average price of $69.46 per share, for a total of $62.7 million. As of September 30, 2020,

~~approximately $37.3 million remains available for repurchase under the previously announced $100.0 million share repurchase authorization (which expires at the end of 2020).~~Treasury Shares

As of ~~September~~June 30, ~~2020,~~2021, the Company held ~~1,020,328~~150,974 shares of its common stock as treasury shares.

5. Stock-Based Compensation

The Company allocates stock-based compensation expense related to equity plans for employees and non-employee directors among the cost of sales, research and development and other engineering expense, selling expense, or general and administrative expense based on the job functions performed by the employees or non-employee directors to whom the stock-based compensation is awarded. The Company recognized stock-based compensation expense related to its equity plans for employees of ~~$4.0~~$3.3 million and ~~$2.1~~$5.2 million for the three months ~~ended September~~June 30, ~~2020~~2021 and ~~2019,~~2020, respectively, and ~~$9.5~~$9.8 million and ~~$8.7~~$5.4 million for the ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 and ~~2019, respectively.~~2020.

During the ~~nine~~six months ended ~~September~~June 30, ~~2020,~~2021, the Company granted ~~166,951~~133,717 restricted stock units ("RSUs") to the Company's employees, including officers at an estimated weighted average fair value of ~~$74.91~~$100.93 per share based on the closing price (adjusted for the present value of dividends) of the Company's common stock on the grant date. The 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 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 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.

The Company’s 7seven non-employee directors are entitled to receive approximately $690 thousand in equity compensation annually. The number of shares ultimately granted are based on the average closing share price for the Company over the 60 day period prior to approval of the award in ~~April~~the second quarter of each year. In ~~April 2020,~~May and June 2021, the Companygranted ~~9,239~~6,601 shares of the Company's common stock to the ~~Company's~~ non-employee directors, based on the average closing price of ~~$74.66 per share. The Company recognized expense on these shares at an estimated fair value of $58.72~~$114.60 per share ~~based on the closing price of the Company's common stock on the grant date, for~~and recognized a total expense of ~~$543~~$756 thousand.

As of ~~September~~June 30, ~~2020,~~2021, the Company's aggregate unamortized stock compensation expense was approximately ~~$14.4~~$21.3 million, which is expected to be recognized in expense over a weighted-average period of ~~2.3~~2.5 years.

6. Trade Accounts Receivable, Net

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


		At September 30,				At December 31,			At June 30,				At December 31,
(in thousands)	(in thousands)	2020		2019		2019		(in thousands)	2021		2020		2020
Trade accounts receivable	Trade accounts receivable	$	231,559	$	186,219	$	144,729	Trade accounts receivable	$	255,077	$	239,220	$	170,001
Allowance for doubtful accounts	Allowance for doubtful accounts	(2,032)		(1,434)		(1,935)		Allowance for doubtful accounts	(1,446)		(2,007)		(2,110)
Allowance for sales discounts and returns	Allowance for sales discounts and returns	(3,080)		(3,887)		(3,430)		Allowance for sales discounts and returns	(3,700)		(3,346)		(2,763)
		$	226,447	$	180,898	$	139,364		$	249,931	$	233,867	$	165,128

7. Inventories

Inventories at the dates indicated consisted of the following:


		At September 30,				At December 31,			At June 30,				At December 31,
(in thousands)	(in thousands)	2020		2019		2019		(in thousands)	2021		2020		2020
Raw materials	Raw materials	$	100,198	$	91,088	$	95,575	Raw materials	$	101,163	$	110,883	$	95,777
In-process products	In-process products	21,533		24,554		23,672		In-process products	24,117		18,661		21,803
Finished products	Finished products	138,323		127,088		132,660		Finished products	184,974		135,821		166,162
		$	260,054	$	242,730	$	251,907		$	310,254	$	265,365	$	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 June 30, 2021, the aggregate notional amount of the Company's outstanding foreign currency derivative contracts was to buy CNY36.9 million by selling $5.4 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 $0.2 million.

Net deferred gains and losses on these contracts relating to changes in fair value are included in accumulated other comprehensive income or 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. For the six months ended June 30, 2021, gains on these contracts of $0.2 million was recognized, as a reduction of cost of sales.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 six months ended June 30, 2021.

9. Property, Plant and Equipment, Net

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


		At September 30,				At December 31,			At June 30,				At December 31,
(in thousands)	(in thousands)	2020		2019		2019		(in thousands)	2021		2020		2020
Land	Land	$	28,287	$	29,132	$	28,092	Land	$	28,373	$	28,068	$	28,553
Buildings and site improvements	Buildings and site improvements	201,020		197,075		195,210		Buildings and site improvements	202,573		200,205		203,421
Leasehold improvements	Leasehold improvements	5,699		4,909		4,911		Leasehold improvements	5,961		5,817		7,091
Machinery, equipment, and software	Machinery, equipment, and software	363,187		345,861		351,379		Machinery, equipment, and software	392,860		359,997		372,923
		598,193		576,977		579,592			629,767		594,087		611,988
Less accumulated depreciation and amortization	Less accumulated depreciation and amortization	(369,655)		(339,920)		(346,594)		Less accumulated depreciation and amortization	(393,653)		(360,719)		(377,460)
		228,538		237,057		232,998			236,114		233,368		234,528
Capital projects in progress	Capital projects in progress	17,934		13,893		16,014		Capital projects in progress	19,239		13,751		20,656
		$	246,472	$	250,950	$	249,012
Total								Total	$	255,353	$	247,119	$	255,184

9.10. Goodwill and Intangible Assets, Net

Goodwill at the dates indicated was as follows:


		At September 30,				At December 31,			At June 30,				At December 31,
(in thousands)	(in thousands)	2020		2019		2019		(in thousands)	2021		2020		2020
North America	North America	$	96,161	$	96,192	$	96,244	North America	$	96,393	$	96,099	$	96,311
Europe	Europe	36,215		33,710		34,300		Europe	36,296		34,929		38,059
Asia/Pacific	Asia/Pacific	1,358		1,289		1,335		Asia/Pacific	1,432		1,307		1,474
Total	Total	$	133,734	$	131,191	$	131,879	Total	$	134,121	$	132,335	$	135,844

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


		At September 30, 2020							At June 30, 2021
		Gross				Net			Gross				Net
		Carrying		Accumulated		Carrying			Carrying		Accumulated		Carrying
(in thousands)	(in thousands)	Amount		Amortization		Amount		(in thousands)	Amount		Amortization		Amount
North America	North America	$	33,755	$	(21,761)	$	11,994	North America	$	41,003	$	(24,715)	$	16,288
Europe	Europe	25,930		(16,960)		8,970		Europe	26,499		(19,038)		7,461
Total	Total	$	59,685	$	(38,721)	$	20,964	Total	$	67,502	$	(43,753)	$	23,749


	At June 30, 2020
	Gross				Net
(in thousands)	Carrying Amount		Accumulated Amortization		Carrying Amount
North America	$	33,755	$	(20,898)	$	12,857
Europe	25,582		(16,300)		9,282
Total	$	59,337	$	(37,198)	$	22,139

1415

At September 30, 2019
Gross Net
(in thousands) Carrying
Amount Accumulated
Amortization Carrying
Amount
North America $ 31,305 $ (18,461) $ 12,844
Europe 23,351 (14,379) 8,972
Total $ 54,656 $ (32,840) $ 21,816


		At December 31, 2019							At December 31, 2020
		Gross				Net			Gross				Net
(in thousands)	(in thousands)	Carrying Amount		Accumulated Amortization		Carrying Amount		(in thousands)	Carrying Amount		Accumulated Amortization		Carrying Amount
North America	North America	$	33,756	$	(19,173)	$	14,583	North America	$	40,786	$	(22,697)	$	18,089
Europe	Europe	25,500		(15,012)		10,488		Europe	26,341		(17,630)		8,711
Total	Total	$	59,256	$	(34,185)	$	25,071	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 of definite-lived intangible assets was $1.7 million and ~~$1.4~~$1.6 million for the three months ended ~~September~~June 30, ~~2020~~2021 and ~~2019,~~2020, respectively, and was ~~$4.5~~$3.4 million and ~~$4.1~~$3.0 million for the ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 and ~~2019,~~2020, respectively. The weighted-average amortization period for all amortizable intangibles on a combined basis is ~~5.5~~6.4 years.

The only indefinite-lived intangible asset, consisting of a trade name, totaled $0.6 million at ~~September~~June 30, ~~2020.~~2021.

At ~~September~~June 30, ~~2020,~~2021, the estimated future amortization of definite-lived intangible assets was as follows:


(in thousands)	(in thousands)			(in thousands)

Remaining three months of 2020		$	1,508
2021		5,542
Remaining six months of 2021				Remaining six months of 2021	$	3,157
2022	2022	3,483		2022	4,339
2023	2023	2,662		2023	3,514
2024	2024	1,710		2024	2,462
2025	2025	1,462		2025	2,233
2026				2026	1,492
Thereafter	Thereafter	3,981		Thereafter	5,936
		$	20,348		$	23,133

The changes in the carrying amount of goodwill and intangible assets for the ~~nine~~six months ended ~~September~~June 30, ~~2020,~~2021, were as follows:

Intangible
(in thousands) Goodwill Assets
Balance at December 31, 2019 $ 131,879 $ 25,071
Amortization — (4,538)
Foreign exchange 1,855 431
Balance at September 30, 2020 $ 133,734 $ 20,964


			Intangible
(in thousands)	Goodwill		Assets
Balance at December 31, 2020	$	135,844	$	26,800
Acquisitions	—		218
Reclassifications	(106)		348
Amortization	—		(3,426)
Foreign exchange	(1,617)		(191)
Balance at June 30, 2021	$	134,121	$	23,749

1516

~~10.~~11. Leases

Operating Lease ~~and Finance~~ Obligations

The Company has operating leases for certain facilities, equipment and autos. The existing operating leases expire at various dates through ~~2024,~~2025, some of which include options to extend the leases for up to 5 years. The Company measured the lease liability at the present value of the lease payments to be made over the lease term. The lease payments are discounted using the Company's incremental borrowing rate. The Company measured the right-of-use ~~assets~~ ("ROU") assets at the amount at which the lease liability is recognized plus initial direct costs incurred or prepayment amounts. The ROU assets are amortized on a straight-line basis over the lease term.

~~Finance Lease Obligations~~

The Company has finance leases for data centers and certain office equipment, which was recorded in fixed assets as capital lease obligations. These finance lease obligations are included in current liabilities and other long-term liabilities in the accompanying 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.

The following table provides a summary of leases included on the condensed consolidated balance sheets ~~September~~as of June 30, 2021 and 2020 ~~2019~~ and December 31, ~~2019,~~2020, condensed consolidated statements of earnings and comprehensive income, and condensed consolidated statements of cash flows as of ~~the~~ three ~~months~~ and ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 and ~~2019:~~2020:

Condensed Consolidated Balance Sheets Line Item September 30, December 31,
(in thousands) 2020 2019 2019
Operating leases
Assets
Operating leases Operating lease right-of-use assets $ 41,453 $ 34,463 $ 35,436
Liabilities
Operating - current Accrued expenses and other current liabilities $ 8,443 $ 7,037 $ 7,392
Operating - noncurrent Operating lease liabilities 33,354 27,256 27,930
Total operating lease liabilities $ 41,797 $ 34,293 $ 35,322
Finance leases
Assets
Property and equipment, gross Property, plant and equipment, net $ 3,569 $ 3,569 $ 3,569
Accumulated amortization Property, plant and equipment, net (3,036) (2,578) (2,739)
Property and equipment, net Property, plant and equipment, net $ 533 $ 991 $ 830
Liabilities
Other current liabilities Accrued expenses and other current liabilities $ 771 $ 1,116 $ 1,125
Other long-term liabilities Deferred income tax and other long-term liabilities 0 764 386
Total finance lease liabilities $ 771 $ 1,880 $ 1,511


	Condensed Consolidated Balance Sheets Line Item	June 30,				December 31,
(in thousands)		2021		2020		2020
Operating leases
Assets
Operating leases	Operating lease right-of-use assets	$	43,374	$	36,930	$	45,792
Liabilities
Operating - current	Accrued expenses and other current liabilities	$	9,777	$	8,099	$	9,143
Operating - noncurrent	Operating lease liabilities	34,087		28,893		37,199
Total operating lease liabilities		$	43,864	$	36,992	$	46,342

Finance leases
Assets
Property and equipment, gross	Property, plant and equipment, net	$	3,569	$	3,569	$	3,569
Accumulated amortization	Property, plant and equipment, net	(3,264)		(2,953)		(3,112)
Property and equipment, net	Property, plant and equipment, net	$	305	$	616	$	457
Liabilities
Other current liabilities	Accrued expenses and other current liabilities	$	48	$	998	$	384

Total finance lease liabilities		$	48	$	998	$	384

1617

The components of lease expense were as follows:


		Condensed Consolidated Statements of Operations Line Item	Three Months Ended September 30,				Nine Months Ended September 30,					Condensed Consolidated Statements of Earnings and Comprehensive Income Line Item	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	(in thousands)		2020		2019		2020		2019		(in thousands)		2021		2020		2021		2020
Operating lease cost	Operating lease cost	General administrative expenses and cost of sales	$	2,736	$	2,379	$	7,708	$	6,784	Operating lease cost	General administrative expenses and cost of sales	$	3,055	$	2,625	$	6,017	$	5,051

Finance lease cost:	Finance lease cost:										Finance lease cost:
Amortization of right-of-use assets	Amortization of right-of-use assets	General administrative expenses	$	218	$	218	$	654	$	654	Amortization of right-of-use assets	General administrative expenses	$	107	$	218	$	214	$	436
Interest on lease liabilities	Interest on lease liabilities	Interest expense, net	7		16		28		54		Interest on lease liabilities	Interest expense, net	1		9		2		21
Total finance lease	Total finance lease		$	225	$	234	$	682	$	708	Total finance lease		$	108	$	227	$	216	$	457

Other information

Supplemental cash flow information related to leases as follows:


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	(in thousands)	2020		2019		2020		2019		(in thousands)	2021		2020		2021		2020
Cash paid for amounts included in the measurement of lease liabilities:	Cash paid for amounts included in the measurement of lease liabilities:									Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases	Operating cash flows for operating leases	$	2,611	$	2,324	$	7,395	$	6,604	Operating cash flows for operating leases	$	2,994	$	2,506	$	5,905	$	4,857
Finance cash flows for finance leases	Finance cash flows for finance leases	290		290		870		870		Finance cash flows for finance leases	146		290		292		580

Operating right-of-use assets obtained in exchange for lease obligations during the current period	Operating right-of-use assets obtained in exchange for lease obligations during the current period	7,155		1,616		14,312		3,704		Operating right-of-use assets obtained in exchange for lease obligations during the current period	3,307		4,510		4,093		7,112

The following is a schedule, by years, of maturities of lease liabilities as of ~~September~~June 30, ~~2020:~~2021:

(in thousands) Finance Leases Operating Leases
Remaining three months of 2020 $ 290 $ 2,632
2021 489 10,147
2022 0 7,933
2023 0 5,867
2024 0 4,834
Thereafter 0 18,926
Total lease payments 779 50,339
Less: Present value discount (8) (8,542)
Total lease liabilities $ 771 $ 41,797


(in thousands)	Finance Leases		Operating Leases
Remaining six months of 2021	$	48	$	5,807
2022	0		10,019
2023	0		7,640
2024	0		5,917
2025	0		5,364
Thereafter	0		18,004
Total lease payments	48		52,751
Less: Present value discount	0		(8,887)
Total lease liabilities	$	48	$	43,864

1718

The following table summarizes the Company's lease terms and discount rates as of ~~September~~June 30, ~~2020~~2021 and ~~2019:~~2020:


Weighted-average remaining lease terms (in years):	Weighted-average remaining lease terms (in years):	2020		2019		Weighted-average remaining lease terms (in years):	2021		2020
Operating leases	Operating leases	7.03		6.72		Operating leases	6.91		6.59
Finance leases	Finance leases	0.71		1.68		Finance leases	0		0.95
Weighted-average discount rate:	Weighted-average discount rate:					Weighted-average discount rate:
Operating leases	Operating leases	5.30	%	5.37	%	Operating leases	5.28	%	5.36	%
Finance leases	Finance leases	3.27	%	3.23	%	Finance leases	3.50	%	3.25	%

~~11.~~12. Debt

~~In May 2020,~~As previously disclosed, the ~~Company entered into a third amendment to~~Credit Facility is the ~~unsecured~~$300.0 million revolving line of credit ~~agreement dated July 27, 2012~~ with Wells Fargo Bank ~~National Association,~~ and certain other institutional lenders that provides for a $300.0 million unsecured revolving credit facility (“Credit Facility”). The Amendment extends the term of the Credit Agreement from July 23, 2021, to July 23, 2022. The Company is required to pay an annual facility fee of 0.20 to 0.35 percent on the available commitments under the Credit Agreement, regardless of usage, with the applicable fee determined on a quarterly basis based on the Company’s leverage ratio. The fee is included within other expense in the Company's ~~condensed consolidated statement of operations.~~

Amounts borrowed under the Credit Agreement will bear interest at an annual rate equal to either, at the Company’s option, (a) the rate for Eurocurrency deposits for the corresponding deposits of U.S. dollars as published by the ICE Benchmark Administration Limited, a United Kingdom company, or a comparable or successor quoting service approved by the Agent (the “LIBOR Rate”), adjusted for any reserve requirement in effect, plus a spread of from 0.80 to 1.65 percent, as determined on a quarterly basis based on the Company’s leverage ratio, or (b) a base rate, plus a spread of 0.20 to 0.65 percent, as determined on a quarterly basis based on the Company’s leverage ratio. In no event shall the LIBOR Rate be less than 0.25 percent. 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 ofprimary credit at an annual rate equal to the LIBOR Rate plus the applicable spread described in the preceding clause (a), and will pay market-based fees for commercial letters of credit. The spread applicable to a particular LIBOR Rate loan or base rate loan depends on the consolidated leverage ratio of the Company and its subsidiaries at the time the loan is made. Loans outstanding under the Credit Agreement may be prepaid at any time without penalty except for LIBOR Rate breakage costs and expenses.

facility.

In March 2020, the Company elected to draw down $150.0 million from the Credit Facility to increase its cash position and preserve financial flexibility in light of current uncertainty resulting from the COVID-19 outbreak; and subsequently paid down $75.0 million during the third quarter of 2020. "Refer to Note 14 Subsequent Event." As of September 30, 2020, the Company's total available credit was $227.5 million under this Credit Facility and other revolving credit lines.

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 ~~$303.9~~$304.0 million in revolving credit lines and an irrevocable standby letter of credit in support of various insurance deductibles. There were 0 outstanding balances as of June 30, 2021 and December 31, 2020, respectively.

The Company was in compliance with its financial covenants ~~at September~~under the Credit Facility as of June 30, ~~2020.~~2021.

~~12.~~13. Commitments and Contingencies

Environmental

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

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.

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.

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, which is now closed. The Nishimura case concerned alleged corrosion of the Company’s galvanized “hurricane straps” and mudsill anchor products used in a residential project in Ewa by Gentry, Honolulu, Hawaii. In the Nishimura case, the plaintiff homeowners and the developer, Gentry Homes, Ltd. (“Gentry”), arbitrated their dispute and agreed on a settlement in the amount of approximately $90 million. In the subsequent Gentry case, Gentry alleges breach of warranty and negligent misrepresentation by the Company related to its “hurricane strap” and mudsill anchor products, and demands general, special, and consequential damages from the Company in an amount to be proven at trial. Gentry also seeks pre-judgment and post-judgment interest, attorneys’ fees and costs, and other relief. The Company admits no liability and will vigorously defend the claims brought against it.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~~could result in a different settlement, or the case may continue on to ~~Gentry.~~trial. Based on the facts currently known, and subject to future events and

circumstances, the Company believes that all or part of the damages for the claims brought against it in the Gentry case may be covered by its insurance policies.

~~Given the nature and the complexities involved in the~~ ~~Gentry~~ proceeding, the Company is unable to estimate reasonably the likelihood of possible loss or a range of possible loss until the Company knows, among other factors, (i) the specific claims brought against the Company and the legal theories on which they are based; (ii) what claims, if any, might be dismissed without trial; (iii) how the discovery process will affect the litigation; (iv) the settlement posture of the other parties to the litigation; (v) the damages to be proven at trial, particularly if the damages are not specified or are indeterminate; (vi) the extent to which the Company’s insurance policies will cover the claims or any part thereof, if at all; and (vii) any other factors that may have a material effect on the proceeding.

~~13.~~14. Segment Information

The Company is organized into 3 ~~reportable~~reporting segments ~~which 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 ~~comprising~~(comprised of the Company’s operations in ~~China, Hong Kong,~~Asia, the South Pacific, and the Middle ~~East. The Company's 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, inthe production ~~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:


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	(in thousands)	2020		2019		2020		2019		(in thousands)	2021		2020		2021		2020
Net Sales	Net Sales									Net Sales
North America	North America	$	316,902	$	265,505	$	852,759	$	746,009	North America	$	350,557	$	286,807	$	651,120	$	535,857
Europe	Europe	44,766		42,219		114,877		121,647		Europe	56,438		37,379		100,734		70,111
Asia/Pacific	Asia/Pacific	2,636		2,208		6,412		6,373		Asia/Pacific	3,286		1,890		6,068		3,776
Total	Total	$	364,304	$	309,932	$	974,048	$	874,029	Total	$	410,281	$	326,076	$	757,922	$	609,744
Sales to Other Segments*	Sales to Other Segments*									Sales to Other Segments*
North America	North America	$	629	$	520	$	1,940	$	1,327	North America	$	221	$	671	$	917	$	1,311
Europe	Europe	1,193		479		3,755		1,568		Europe	1,551		1,308		3,160		2,562
Asia/Pacific	Asia/Pacific	7,240		7,600		17,717		21,272		Asia/Pacific	5,465		5,664		13,993		10,477
Total	Total	$	9,062	$	8,599	$	23,412	$	24,167	Total	$	7,237	$	7,643	$	18,070	$	14,350
Income (Loss) from Operations	Income (Loss) from Operations									Income (Loss) from Operations
North America	North America	$	87,378	$	56,844	$	213,135	$	139,489	North America	$	95,123	$	72,196	$	164,533	$	125,757
Europe	Europe	6,074		5,386		7,100		9,645		Europe	5,873		2,696		8,164		1,026
Asia/Pacific	Asia/Pacific	519		(481)		(160)		(837)		Asia/Pacific	203		(75)		628		(679)
Administrative and all other	Administrative and all other	(2,628)		(782)		(7,170)		(3,654)		Administrative and all other	529		(2,605)		(3,213)		(4,542)
Total	Total	$	91,343	$	60,967	$	212,905	$	144,643	Total	$	101,728	$	72,212	$	170,112	$	121,562

* Sales to other segments are eliminated in consolidation.


						At							At
		At September 30,				December 31,			At June 30,				December 31,
(in thousands)	(in thousands)	2020		2019		2019		(in thousands)	2021		2020		2020
Total Assets	Total Assets							Total Assets
North America	North America	$	1,524,482	$	1,246,617	$	1,269,545	North America	$	1,189,835	$	1,382,051	$	1,059,967
Europe	Europe	186,051		169,183		169,785		Europe	205,065		169,757		198,647
Asia/Pacific	Asia/Pacific	31,109		28,009		30,055		Asia/Pacific	31,774		27,957		32,754
Administrative and all other	Administrative and all other	(463,777)		(357,501)		(374,019)		Administrative and all other	(52,700)		(295,262)		(58,799)
Total	Total	$	1,277,865	$	1,086,308	$	1,095,366	Total	$	1,373,974	$	1,284,503	$	1,232,569

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 ~~$244.5~~$238.3 million, ~~$135.9~~$261.8 million, and ~~$161.4~~$199.8 million, as of ~~September~~June 30, ~~2020~~2021 and ~~2019,~~2020, and December 31, ~~2019,~~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, 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 September 30,				Nine Months Ended September 30,					Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	(in thousands)	2020		2019		2020		2019		(in thousands)	2021		2020		2021		2020

Wood construction products	Wood construction products	$	311,167	$	255,869	$	834,411	$	731,898	Wood construction products	$	355,787	$	280,724	$	657,365	$	523,244
Concrete construction products	Concrete construction products	52,983		53,947		139,299		141,883		Concrete construction products	54,305		45,304		99,828		86,316
Other	Other	154		116		338		248		Other	189		48		729		184
Total	Total	$	364,304	$	309,932	$	974,048	$	874,029	Total	$	410,281	$	326,076	$	757,922	$	609,744

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.

~~14.~~15. Subsequent Events

Dividend declared

On ~~October 23, 2020,~~July 14, 2021, the Company’s Board of Directors declared a quarterly cash dividend of ~~$0.23~~$0.25 per share, estimated to be ~~$10.0~~$10.8 million in total. The dividend will be payable on ~~January~~October 28, 2021, to the Company's stockholders of record on ~~January~~October 7, 2021.

~~On October 30, 2020, the Company paid down $25.0 million of the $75.0 million outstanding under its~~ Credit ~~Facility as of September 30, 2020.~~Agreement

In July 2021, the Company entered into a fourth amendment to the Credit Facility that extended the term of the Credit Facility from July 23, 2022, to July 12, 2026.

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

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. 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 information about the Company. The information on our website is not incorporated to reference or other material we file with or furnish to the Securities and Exchange Commission, except in explicitly noted or as required by law.

The following discussion and analysis provides information which management believes is relevant to an assessment and understanding of the Company’s consolidated financial condition and results of operations. This discussion should be read in conjunction with the accompanying condensed consolidated financial statements and notes thereto included in this report.

“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.

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 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~~risks 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 ~~2019~~2020 Form 10-K and Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations and Part II Item 1A Risk Factors in the Quarterly Report on Form 10-Q for the quarters ended March 31, 2020 and June 30, 2020.10-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 recent outbreak of coronavirus disease 2019 (COVID-19); volatile supply and demand conditions affecting prices and volumes in 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 other reports filed with the SEC that advise of the risks and factors that may affect our business.

Overview

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

Our strategic plan for growth includes increasing our market share and profitability in Europe; growing our market share in the concrete space; and continuing to develop our software to support our core wood products offering while leveraging our strengths in engineering, sales and distribution, and our strong brand name. We believe these initiatives and objectives are crucial to not only offer a more complete solution to our customers and bolster our sales of core wood connector products, but also to mitigate the effect of the cyclicality of the U.S. housing market.

~~On October 30, 2017,~~At our March 23, 2021 analyst and investor day, we ~~announced~~unveiled several key growth initiatives that we believe will help us continue our track record of above market revenue growth through a combination of organic and inorganic opportunities. Our 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 ~~2020 Plan to provide additional transparency into the execution of our strategic plan~~original equipment manufacturers, repair and ~~financial objectives. During the first quarter of 2020, the execution of our 2020 Plan continued to deliver financial~~remodel or do-it-yourself, mass timber, concrete and operational efficiencies. However, given the uncertainties surrounding the impact of COVID-19 on our business, on April 27, 2020, we withdrew our prior full year 2020 guidance originally issued on February 3, 2020, as well as the financial targets associated with the 2020 Plan.structural steel markets.

In ~~December~~order to grow in these markets, we aspire to be among the leaders in engineered load-rated construction building products and systems and customer-facing technology while leveraging our 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 five targeted areas for growth. Although these initiatives are all currently in 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 March analyst and investor day, we highlighted our Five-year Ambitions, which are as follows:

1.Strengthen our values-based culture;

2.Be the business partner of choice;

3.Strive to be an innovative leader in our product categories;

4.Continue above market growth relative to the U.S. housing starts;

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

6.Remain in the top quartile of our proxy peers for return on invested capital.

As with our growth initiatives, we expect to make periodic updates related to material developments with our Five-year Ambitions.

A novel strain of coronavirus (“COVID-19”) surfaced in late 2019 ~~COVID-19 was first identified in Wuhan, China. Over~~and has spread around the ~~next several months, COVID-19 quickly spread across~~world, including to the ~~world.~~United States. In March 2020, the ~~WHO~~World Health Organization declared COVID-19 a worldwide pandemic ~~based on the rapid increase in exposure globally,~~ and the President of the United States declared the COVID-19 outbreak a national emergency. As of ~~October 31, 2020,~~June 30, 2021, the ~~virus continues~~effects of and responses to ~~spread infecting over 46 million people worldwide. No~~the pandemic continue to have a significant impact on worldwide economic activity and on macroeconomic conditions. Vaccines are available in various countries and distribution of the vaccine ~~is currently available for COVID-19~~also varies by country and in the U.S. by state. The duration and severity of ~~its~~the effects of the pandemic are still ~~unknown.~~unknown and cannot be predicted with any certainty. Notwithstanding the Company's continued efforts to promote the health and safety of our employees, suppliers and customers, as the COVID-19 pandemic continues, health concern risks remain. It also remains unclear how various national, state, and local governments will react if the distribution of vaccines is slower than expected or new variants of the virus become more prevalent.

~~Government~~In response to the pandemic, government authorities in the countries and states where we operate have issued various and differing shelter in place and stay at home orders, social distancing guidelines, mask mandates and other measures in response to the COVID-19 pandemic. In many of those locations our operations are classified as an ~~essential business~~"essential business" and ~~all of our manufacturing and distribution facilities~~we continue to operate our business in ~~accordance~~compliance with ~~those orders. In late March, two~~applicable state and local laws and are observing recommended CDC guidelines to minimize the risk of spreading the COVID-19 virus. We have undertaken numerous steps and instituted additional precautions to protect our employees, suppliers and customers, as their safety and well-being is one of our ~~larger European manufacturing facilities in~~top priorities, and to comply with health and safety guidelines. These steps and precautions include enhanced deep cleaning, staggered shifts, temperature checking, use of face masks, practicing social distancing and limiting non-employees at our locations, amongst other safety related policies and procedures. Although vaccines are available where we operate, health concern risks remain and it is possible the ~~United Kingdom~~COVID-19 pandemic could further impact our operations and ~~France were ordered to cease nearly all operations. Those two facilities have since re-opened. To date, there have been no orders to close any~~the operations of our ~~manufacturing or distribution facilities.~~ suppliers and vendors particularly in light of variant strains of COVID-19 that may cause a resumption of high levels of infection and hospitalization.

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~~continued to meet our customers’ ~~needs.~~needs despite the challenges presented by the pandemic. We will continue to communicate with our supply chain partners to identify and mitigate risk and to manage inventory levels.

In response to the COVID-19 pandemic the Company proactively took measures to maintain and preserve its strong financial position and flexibility, including drawing down on the Credit Facility, implementing a hiring freeze and adjusting employee hours to meet production requirements, although during the year the Company has resumed hiring to meet increased demand levels that it has experienced.flexibility. The ~~Company will continue to be conservative in its capital allocation approach but does project to repay the draw down on its Credit Facility by the end~~Company's Crisis Management Team, which includes members of the 2020 fiscal year and has resumed the stock repurchase program in the fourth quarter 2020. As a result of COVID-19 and in support of continuing its manufacturing efforts, the Company has undertaken a number of steps to protect its employees, suppliers and customers, as their safety and well-being is one of our top priorities. We have instituted additional precautions in our manufacturing and distribution facilities to comply with health and safety guidelines and to protect our employees, including enhanced deep cleaning, staggered shifts, temperature checking, use of face masks, practicing social distancing and limiting non-employees at our locations, amongst other safety related policies and procedures. Many of our office workers in our manufacturing and distribution facilities, as well as the corporate headquarters, continue to work remotely, where possible. The senior management, ~~team~~ meets regularly to review and assess the status of the Company's operations and the health and safety of its employees.

~~A significant portion of the Company's total product sales is dependent on US housing starts and its~~The Company’s business, financial condition and results of operations depends significantly on the level of U.S. housing starts and residential construction activity. ~~We anticipated previously that the effects of responses to the pandemic would have a negative effect on our North America operations. However,~~Though single-family housing starts increased ~~from April's and May's lower levels and increased~~significantly from prior-year's level, of starts. Due to the return of a nationwide home center customer, increased housing starts and a strong home repair and remodel market, October 2020 sales were up compared to October 2019 and on pace for a 3%we believe there is uncertainty that demand will increase in the ~~fourth quarter~~short-term due to a number of ~~2020 compared~~supply-chain factors affecting new home completion. With recent sales price increases, we believe net sales will likely increase in future periods even if demand does not decrease. However, increased selling prices are expected to ~~the fourth quarter of 2019. Whether this trend continues at the same pace or decline~~be offset by increasing material costs, sourcing logistics complications and a tight labor market, which could negatively affect operating margins for the remainder of ~~the~~

year is not known. Declines in housing and residential construction, such as housing starts and home improvement projects, which generally occur during economic downturns, have in the past significantly reduced, and in the future may reduce, the demand for, and net sales, of the Company's products.2021.

The magnitude and duration of the pandemic including its impact on our operations, supply chain partners and general economic conditions, is uncertain and we continue to monitor the impact of the pandemic on our operations and financial condition, which was not significantly adversely impactedSince June 2020, inventory pounds in ~~the first nine months of 2020. We are uncertain of the long-term effects on the~~ North America, ~~segment and Europe segment at this time.~~which is the bulk of our inventory, decreased 23% while the weighted average cost per pound of total on hand increased approximately 49%. Over the next 12 to 18 months, steel cost increases are expected to result in lowering operating margins by 300 to 400 basis points from 2021.

Management continues to monitor the impact of the global situation on ~~its~~the Company's 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.

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. 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, 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 have an effect on our gross and operating profits as well as 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 and operating margins depending on the timing of raw material purchases or how much sales prices can be increased to offset higher raw material costs.

Our operations also expose us to risks associated with pandemics, epidemics or other public health emergencies, such as the COVID-19 pandemic which spread from China to many other countries including the United States. The pandemic resulted in governments around the world implementing stringent measures to help control the spread of the virus, including quarantines, social distancing guidelines, “shelter in place” and “stay at home” orders, travel restrictions, business curtailments, school closures, and other measures. In addition, governments and central banks in several parts of the world had enacted fiscal and monetary stimulus measures to counteract the impacts of the pandemic.

Notwithstanding our continued operations and third quarter performance, the COVID-19 pandemic may have negative impacts on our operations, supply chain, transportation networks and customers, which may compress our margins, including as a result of preventative and precautionary measures that we, other businesses and governments are taking. Any resulting economic downturn could adversely affect demand for our products and contribute to volatile supply and demand conditions affecting prices and volumes in the markets for our products, services and raw materials. The progression of this matter could also negatively impact our business or results of operations through the temporary closure of our operating locations or those of our customers or suppliers, among others.

In addition, the ability of our employees and our suppliers’ and customers’ employees to work may be significantly impacted by individuals contracting or being exposed to COVID-19, or as a result of the control measures noted above, which may significantly hamper our production throughout the supply chain and constrict sales channels. The extent to which COVID-19 pandemic may adversely impact our business depends on future developments, which are highly uncertain and unpredictable, including new information concerning the severity of the pandemic and the effectiveness of actions globally to contain or mitigate its effects. Our consolidated financial statements and discussion and analysis of financial condition and results of operations reflect estimates and assumptions made by management as of September 30, 2020. Events and changes in circumstances arising after September 30, 2020, including those resulting from the impacts of COVID-19 pandemic, will be reflected in management’s estimates for future periods.

ERP Integration

In July 2016, our Board of Directors ~~(the “Board”)~~ approved a plan to replace our current in-house enterprise resource planning (“ERP”) and externally sourced accounting platforms with a fully integrated ERP platform from SAP America, Inc. (“SAP”) in

multiple phases by location at all facilities plus our headquarters, with a focus on configuring, instead of customizing, the standard SAP modules.

We went live with our first wave of the SAP implementation project in February of 2018, and ~~we implemented SAP~~completed implementation at ~~five additional locations in 2019 and 2020. We are tracking toward rolling out SAP technology in~~ our ~~remaining~~ North America ~~branches by 2021, and~~operations in 2021. We expect to complete the company-wide ~~completion of the~~ SAP ~~roll-out is currently targeted for~~implementation during 2022. ~~Meeting the 2022 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 be beneficial to the Company over time, annual operating expenses have and are expected to continue to increase through 2024 as a result of the SAP implementation, primarily due to increases in training costs and the depreciation of previously capitalized costs. ~~As of September 30, 2020, we have capitalized $19.4 million and expensed $34.9 million of the costs, including $5.3 million in depreciation expense of capitalized costs.~~

Business Segment Information

Historically our North America segment has generated more revenues from wood construction products compared to concrete construction products. During the first nine months of 2020, the return of a nationwide home center customer, favorable weather, increased home improvement activity and increased housing starts resulted in higher sales volumes over the same time period of 2019, which had extremely wet weather in the first half of the year. Our wood construction product net sales increased ~~22.6%~~23.2% for the quarter ended ~~September~~June 30, ~~2020~~2021 compared to ~~September~~June 30, ~~2019,~~2020, primarily due to increased sales volumes in connection with the return of a nationwide home center customer and increased housing starts and repair and remodel activity, which resulted in increased sales to some of our other sales distributor channels.higher product prices. Our concrete construction product net sales increased ~~1.9%~~15.2% for the quarter ended ~~September~~June 30, ~~2020~~2021 compared to ~~September~~June 30, ~~2019,~~2020, primarily due to higher ~~sales volumes.~~product prices. Operating profits increased due

to higher sales ~~lower cost of goods sold, mostly due~~and gross margins, partly offset by higher operating expenses primarily for personnel costs and professional fees. If current economic conditions continue and factoring in recently announced sales price increases, we believe North America operating margins could be higher in 2021 compared to ~~lower material,~~2020. However, increased steel costs, product sourcing complications and a tight labor market will likely result in lower operating ~~expenses. In operating expenses, increases~~margins in ~~cash profit sharing and stock-based compensation expense were partially offset by reductions in consulting fees and travel related expense.~~the second half of 2021.

Our Europe segment also generates more revenues from wood construction products than concrete construction products. Europe net sales increased for the quarter ended ~~September~~June 30, ~~2020~~2021 compared to ~~September~~June 30, ~~2019,~~2020, primarily due to ~~benefiting from~~higher sales volumes in local currency and were positively affected by approximately ~~$2.1~~$5.3 million ofin foreign currency ~~translations for some Europe~~translation related to Europe's currencies strengthening against the United States dollar. ~~In local currency, Europe net sales increased due to higher volumes.~~ Wood construction product sales increased ~~14.2%~~53.7% for the quarter ended ~~September~~June 30, ~~2020~~2021 compared to ~~September~~June 30, ~~2019.~~2020. Concrete construction product sales are mostly project based, and net sales ~~decreased 15.2%~~increased 40.6% for the quarter ended ~~September~~June 30, ~~2020~~2021 compared to ~~September~~June 30, ~~2019.~~2020. Gross margins ~~decreased,~~increased, mostly due to ~~higher~~lower labor, factory, warehouse and shipping costs, partly offset by ~~lower~~higher material ~~and factory and overhead~~ costs. Operating expenses increased, primarily due to increased personnel costs. If current economic conditions continue and factoring in recently announced sales price increases, we believe Europe operating margins could be higher ~~cash profit sharing~~in 2021 compared to 2020. However, increased steel costs and ~~stock-based compensation expense.~~product sourcing complications could offset increased sales, negatively affecting operating margins towards the end of 2021 through 2022.

Our Asia/Pacific segment has generated revenues from both wood and concrete construction products. We believe that the Asia/Pacific segment is not significant to our overall performance.

Business Outlook

~~At the time~~On July 26, 2021, the Company ~~withdrew its outlook it was unable to forecast its~~provided a full-year ~~outlook with reasonable accuracy given the uncertainty surrounding the COVID-19 pandemic and the related impact on the Company's business. On July 27, 2020, the~~outlook. The Company ~~reinstated its 2020 full-year outlook originally provided on February 3, 2020 and is again updating~~updated its full year outlook, primarily reflecting ~~three quarters~~actual results of ~~actual results,~~the second quarter, 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 current business trends and conditions, ~~as of the day we announced our third quarter earnings,~~ the Company's outlook for the full fiscal year ending December 31, ~~2020~~2021 is as follows:

•~~Net sales are estimated to increase in the range of 9.0% to 10.0% compared to the full year ended December 31, 2019.~~

•~~Gross~~Operating margin is estimated to be in the range of ~~approximately 45.0%~~19.5% to ~~46.0%.~~

•~~Operating expenses, as a percentage of net sales, are estimated to be in the range of approximately 25.0% to 26.5%~~21.0%.

•The effective tax rate is estimated to be in the range of ~~24.5%~~25.0% to 26.0%, including both federal and state income tax rates.

•

Additionally, we believe the Company’s gross margins and operating margins for the 2021 fiscal year will pull back from our expectations for the full year 2020 as we anticipate costs directly relatedCapital expenditures are estimated to ~~materials, production headcount, customer engagement and investments in business growth will increase in 2021.~~

While the magnitude and duration of the COVID-19 pandemic and its impact on general economic conditions remains uncertain, the Company is continuing to monitor the impact of the pandemic on its operations and financial condition, which was not significantly adversely impactedbe in the ~~third quarter~~range of ~~2020, primarily due~~$55 million to the return of a nationwide home center customer, and increased housing starts and home improvement activity. Please note that ongoing uncertainties surrounding the impact of the pandemic on Simpson’s business, which may include the economic impact on its operations, raw material costs, consumers, suppliers, vendors, and other factors outside of its control, may have a material adverse impact on the Company’s financial outlook.$60 million.

Results of Operations for the Three Months Ended ~~September~~June 30, ~~2020,~~2021, Compared with the Three Months Ended ~~September~~June 30, ~~2019~~2020

Unless otherwise stated, the below results, when providing comparisons (which are generally indicated by words such as “increased,” “decreased,” “unchanged” or “compared to”), compare the results of operations for the three months ended ~~September~~June 30, ~~2020,~~2021, against the results of operations for the three months ended ~~September~~June 30, ~~2019.~~2020. Unless otherwise stated, the results announced below, when referencing “both quarters,” refer to the three months ended ~~September~~June 30, ~~2019~~2020 and the three months ended ~~September~~June 30, ~~2020.~~2021.

~~Third~~Second Quarter ~~2020~~2021 Consolidated Financial Highlights

The following table illustrates the differences in our operating results for the three months ended ~~September~~June 30, ~~2020,~~2021, from the three months ended ~~September~~June 30, ~~2019,~~2020, and the increases or decreases for each category by segment:

Three Months Ended Three Months Ended
Increase (Decrease) in Operating Segment
September 30, North Asia/ Admin & September 30,
(in thousands) 2019 America Europe Pacific All Other 2020
Net sales $ 309,932 $ 51,397 $ 2,547 $ 428 $ — $ 364,304
Cost of sales 172,288 17,310 1,781 (493) 175 191,061
Gross profit 137,644 34,087 766 921 (175) 173,243
Research and development and other engineering expense 11,972 181 72 62 — 12,287
Selling expense 27,672 1,649 45 30 — 29,396
General and administrative expense 37,047 1,725 (16) (138) 1,671 40,289
Total operating expenses 76,691 3,555 101 (46) 1,671 81,972
Net loss (gain) on disposal of assets (14) (1) (23) (34) — (72)
Income from operations 60,967 30,533 688 1,001 (1,846) 91,343
Interest income (expense), net and other (1,778) 894 956 (137) (453) (518)
Income before income taxes 59,189 31,427 1,644 864 (2,299) 90,825
Provision for income taxes 15,503 7,970 545 266 (516) 23,768
Net income $ 43,686 $ 23,457 $ 1,099 $ 598 $ (1,783) $ 67,057


	Three Months Ended										Three Months Ended
			Increase (Decrease) in Operating Segment
	June 30,		North				Asia/		Admin &		June 30,
(in thousands)	2020		America		Europe		Pacific		All Other		2021
Net sales	$	326,076	$	63,750	$	19,059	$	1,396	$	—	$	410,281
Cost of sales	176,276		24,790		11,867		673		229		213,835
Gross profit	149,800		$	38,960	$	7,192	$	723	(229)		196,446
Research and development and other engineering expense	12,191		1,619		324		34		1		14,169
Selling expense	26,834		4,547		1,487		299		—		33,167
General and administrative expense	38,636		9,842		2,196		101		(3,365)		47,410
Total operating expenses	77,661		16,008		4,007		434		(3,364)		94,746

Net loss (gain) on disposal of assets	(73)		25		7		12		1		(28)
Income from operations	72,212		22,927		3,178		277		3,134		101,728

Interest income (expense), net and other	(151)		(2,450)		(673)		(139)		777		(2,636)



Income before income taxes	72,061		20,477		2,505		138		3,911		99,092
Provision for income taxes	18,582		8,393		474		6		(846)		26,609
Net income	$	53,479	$	12,084	$	2,031	$	132	$	4,757	$	72,483

Net sales increased ~~17.5%~~25.8% to ~~$364.3~~$410.3 million from ~~$309.9 million. Net sales to home centers, dealer distributors and lumber dealers increased~~$326.1 million primarily ~~due to~~by the implementation of two product price increases during the quarter along with marginal increase in sales ~~volumes from the return of a nationwide home center customer. Net sales to contractor distributors decreased.~~volume. Wood construction product net sales, including sales of connectors, truss plates, fastening systems, fasteners and shearwalls, represented ~~85%~~87% and ~~84%~~86% of the Company's total net sales in the ~~third~~second quarters of ~~2020~~2021 and ~~2019,~~2020, respectively. Concrete construction product net sales, including sales of adhesives, chemicals, mechanical anchors,

powder actuated tools and reinforcing fiber materials, represented ~~15%~~13% and ~~16%~~14% of the Company's total net sales in the ~~third~~second quarters of 2021 and 2020, ~~and 2019,~~ respectively.

Gross profit increased ~~25.9%~~31.1% to ~~$173.2~~$196.4 million from ~~$137.6~~$149.8 million. Gross margins increased to ~~47.6%~~47.9% from ~~44.0%~~45.9%, primarily due to ~~lower material costs and factory and overhead expense (on higher production), partly offset by higher warehouse, shipping and labor expense each as a percentage of net sales.~~product price increases. Gross margins, including some inter-segment expenses, which were eliminated in consolidation, and excluding other expenses that are allocated according to product group, increased to ~~48.0%~~47.4% from ~~44.4%~~46.2% for wood construction products and increased to ~~42.1%~~47.5% from ~~41.6%~~40.7% for concrete construction products, respectively.

Research and development and engineering expense increased ~~2.6%~~16.2% to ~~$12.3~~$14.2 million from ~~$12.0~~$12.2 million, primarily due to increases of ~~$0.6~~$0.8 million in ~~cash profit sharing expense~~personnel costs, $0.7 million in professional fees and $0.2 million in ~~stock-based compensation~~patent expense, ~~on our performance based awards, partly offset by decreased software development costs.~~

Selling expense increased ~~6.2%~~23.6% to ~~$29.4~~$33.2 million from ~~$27.7~~$26.8 million, primarily due to increases of ~~$1.7 million in cash profit sharing and sales commissions, $0.8~~$3.2 million in personnel costs, ~~$0.4~~$2.4 million in ~~stock-based compensation~~commissions, and ~~$0.4~~$1.5 million in professional fees, partly offset by decreases of ~~$1.3~~$0.5 million in ~~travel–associated expenses, and $0.4 million in promotional and advertising~~stock-based compensation expense.

General and administrative expense increased ~~8.8%~~22.7% to ~~$40.3~~$47.4 million from ~~$37.0~~$38.6 million, primarily due to increases of ~~$2.0~~$4.9 million in ~~cash profit sharing expense, $1.1~~professional fees, $4.3 million in ~~stock-based compensation expense on our performance based awards, $0.9 million in depreciation and amortization expense~~personnel costs, and $0.6 million in ~~insurance~~amortization and depreciation expense, partly offset by a decrease of ~~$1.1~~$1.0 million in ~~travel–associated expenses.~~stock-based compensation expense. Included in general and administrative expense are SAP implementation and support costs of ~~$3.2~~$4.7 million, which ~~decreased $0.4~~increased $2.2 million from the prior year quarter.

Our effective income tax rate ~~was~~ ~~26.2% for both periods.~~increased to 26.9% from 25.8%.

Consolidated net income was ~~$67.1~~$72.5 million compared to ~~$43.7~~$53.5 million. Diluted net income per common share was ~~$1.54~~$1.66 compared to ~~$0.97.~~$1.22.

Net sales

The following table represents net sales by segment for the three-month periods ended ~~September~~June 30, ~~2020~~2021 and ~~2019,~~2020, respectively:


		North						Asia/							North						Asia/
(in thousands)	(in thousands)	America			Europe			Pacific			Total			(in thousands)	America			Europe			Pacific			Total
Three months ended	Three months ended													Three months ended
September 30, 2019		$	265,505		$	42,219		$	2,208		$	309,932
September 30, 2020		316,902			44,766			2,636			364,304
June 30, 2020														June 30, 2020	$	286,807		$	37,379		$	1,890		$	326,076
June 30, 2021														June 30, 2021	350,557			56,438			3,286			410,281
Increase	Increase	$	51,397		$	2,547		$	428		$	54,372		Increase	$	63,750		$	19,059		$	1,396		$	84,205
Percentage increase	Percentage increase	19.4		%	6.0		%	19.4		%	17.5		%	Percentage increase	22.2		%	51.0		%	73.9		%	25.8		%

The following table represents segment net sales as percentages of total net sales for the three-month periods ended ~~September~~June 30, ~~2020~~2021 and ~~2019,~~2020, respectively:


		North America		Europe		Asia/ Pacific		Total			North America		Europe		Asia/ Pacific		Total
Percentage of total 2019 net sales		86	%	14	%	1	%	100	%
Percentage of total 2020 net sales	Percentage of total 2020 net sales	87	%	12	%	1	%	100	%	Percentage of total 2020 net sales	88	%	12	%	—	%	100	%
Percentage of total 2021 net sales										Percentage of total 2021 net sales	85	%	14	%	1	%	100	%

Gross profit

The following table represents gross profit by segment for the three-month periods ended ~~September~~June 30, ~~2020~~2021 and ~~2019,~~2020, respectively:

North Asia/ Admin &
(in thousands) America Europe Pacific All Other Total
Three months ended
September 30, 2019 $ 120,974 $ 16,214 $ 455 $ 1 $ 137,644
September 30, 2020 155,061 16,980 1,376 (174) 173,243
Increase (decrease) $ 34,087 $ 766 $ 921 $ (175) $ 35,599
Percentage Increase (decrease) 28.2 % 4.7 % * * 25.9 %


	North				Asia/	Admin &
(in thousands)	America		Europe		Pacific	All Other	Total
Three months ended
June 30, 2020	$136,024		$13,106		$484	$186	$149,800
June 30, 2021	174,984		20,298		1,207	(43)	196,446
Increase	$38,960		$7,192		$723	$(229)	$46,646
Percentage Increase	28.6	%	54.9	%	*	*	31.1	%

* 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~~June 30, ~~2020~~2021 and ~~2019,~~2020, respectively:


		North America		Europe		Asia/ Pacific		Admin & All Other	Total			North America		Europe		Asia/ Pacific		Admin & All Other	Total
2019 gross profit percentage		45.6	%	38.4	%	20.6	%	*	44.4	%
2020 gross profit percentage	2020 gross profit percentage	48.9	%	37.9	%	52.2	%	*	47.6	%	2020 gross profit percentage	47.4	%	35.1	%	25.6	%	*	45.9	%
2021 gross profit percentage											2021 gross profit percentage	49.9	%	36.0	%	36.7	%	*	47.9	%

* The statistic is not meaningful or material.

North America

•Net sales increased ~~19.4%~~22.2%, due primarily to product price increases that took effect in second quarter, in an effort to offset rising material costs, along with marginally higher sales volumes. Most of the Company's distribution channels continued to benefit from increased U.S. housing starts and repair and remodel activity, while sales to home centers decreased. Canada's net sales also increased primarily due to higher sales volumes ~~from the return of a nationwide home center customer~~ and increased repair and remodel activity, as well as from other sales distributor channels, which experienced increased new housing starts and repair and remodel activity. Canada's net sales increased but were ~~negatively affected~~positively impacted by approximately $2.6 million in foreign currency translation.

•Gross profit as a percentage of net sales increased to ~~48.9%~~49.9% from ~~45.6%~~47.4%, primarily due to ~~decreases in material and labor costs, partly offset by higher warehouse and shipping costs, each as a percentage of net sales.~~the aforementioned product price increases.

•Research, ~~and~~ development and engineering ~~expense~~expenses increased ~~$0.2 million,~~14.4%, primarily due to increases of ~~$0.6~~$0.5 million in ~~cash profit sharing expense~~personnel costs and $0.3 million in professional fees, $0.2 million in lower capitalized costs and $0.2 million in ~~stock-based compensation, partly offset by decreased software development~~patent costs.

•Selling expense increased ~~$1.6 million,~~20.3%, primarily due to increases of ~~$1.5~~$2.1 million in ~~cash profit sharing and sales commissions, $0.6~~travel–associated expenses, $1.8 million in personnel ~~expense, $0.5~~costs, $1.3 million in commissions, and $0.5million in professional fees, ~~and $0.3 million in stock-based compensation for our performance based awards, partly~~ offset by decreases of ~~$1.1~~$0.6 million in ~~travel–associated expenses~~advertising costs and ~~$0.2~~$0.5 million in ~~promotional and advertising expense.~~stock-based compensation.

•General and administrative expense increased ~~$1.7 million,~~32.6%, primarily due to increases of ~~$1.1~~8.4 million for professional\legal fees, $0.9 million in ~~stock-based compensation expense for our performance based awards, $0.6 million in depreciation and amortization, $0.3~~personnel costs, $0.8 million in rent, ~~expense,~~depreciation and ~~$0.2 million in cash profit sharing expense,~~amortization, partly offset by a decrease of ~~$0.8~~$0.3 million in ~~travel-related expenses. Included in general and administrative expense are SAP implementation and support costs of $2.5 million, which decreased $0.4 million from the prior quarter.~~stock-based compensation.

•Income from operations increased by ~~$30.5~~$22.9 million, primarily due to increased gross profit, partly offset by higher operating expenses.

Europe

•Net sales increased ~~6.0%~~51.0%, primarily due to higher sales volumes ~~along with the positive impact of~~and were positively affected by approximately $5.3 million in foreign currency translation ~~of approximately $2.1 million from some Europe~~related to Europe's currencies strengthening against the United States dollar. ~~In local currency, Europe net sales increased due to higher sales volumes.~~

•Gross profit as a percentage of net sales ~~decreased~~increased to ~~37.9%~~36.0% from ~~38.4%~~35.1%, primarily due to ~~increased~~lower labor, factory, warehouse and shipping costs, partly offset by ~~lower~~higher material ~~and factory and overhead cost.~~costs, each as a percentage of net sales.

•Income from operations increased by ~~$0.7~~$3.2 million, primarily due to the increase in sales volumes and gross profit, partly offset by higher ~~gross profits.~~operating expenses due to higher personnel costs.

Asia/Pacific

•For information about the Company's Asia/Pacific segment, please refer to the tables above setting forth changes in our operating results for the three months ended ~~September~~June 30, ~~2020~~2021 and ~~2019,~~2020, respectively.

~~Admin & All Other~~

•~~General and administrative expense increased $1.7 million, primarily due to increases of $1.3 million in cash profit sharing expense.~~

Results of Operations for the ~~Nine~~Six Months Ended ~~September~~June 30, ~~2020,~~2021, Compared with the ~~Nine~~Six Months Ended ~~September~~June 30, ~~2019~~2020

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~~six months ended ~~September~~June 30, ~~2020,~~2021, against the results of operations for the ~~nine~~six months ended ~~September~~June 30, ~~2019.~~2020. Unless otherwise stated, the results announced below, when referencing “both periods,” refer to the ~~nine~~six months ended ~~September~~June 30, ~~2019~~2020 and the ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021

Year-to-Date ~~(9-month) 2020~~(6-month) 2021 Consolidated Financial Highlights

The following table illustrates the differences in our operating results for the ~~nine~~six months ended ~~September~~June 30, ~~2020,~~2021, from the ~~nine~~six months ended ~~September~~June 30, ~~2019,~~2020, and the increases or decreases for each category by segment:


		Nine Months Ended		Increase (Decrease) in Operating Segment								Nine Months Ended			Six Months Ended		Increase (Decrease) in Operating Segment									Six Months Ended
		September 30,		North				Asia/		Admin &		September 30,			June 30,		North					Asia/		Admin &		June 30,
(in thousands)	(in thousands)	2019		America		Europe		Pacific		All Other		2020		(in thousands)	2020		America		Europe			Pacific		All Other		2021
Net sales	Net sales	874,029		$	106,750	$	(6,770)	$	39	$	—	$	974,048	Net sales	609,744		$	115,263	$	30,623		$	2,292	$	—	$	757,922
Cost of sales	Cost of sales	491,952		33,138		(3,657)		(63)		(31)		521,339		Cost of sales	330,278		52,714		18,882			492		(3,171)		399,195
Gross profit	Gross profit	382,077		73,612		(3,113)		102		31		452,709		Gross profit	279,466		62,549		11,741			1,800		3,171		358,727
Research and development and other engineering expense	Research and development and other engineering expense	35,287		2,503		50		20		—		37,860		Research and development and other engineering expense	25,573		2,723		377			85		—		28,758
Selling expense	Selling expense	84,471		1,108		(495)		(327)		—		84,757		Selling expense	55,361		6,637		1,626			364		2		63,990
General and administrative expense	General and administrative expense	117,941		(3,341)		(523)		(227)		3,546		117,396		General and administrative expense	77,107		17,793		2,574			107		(1,606)		95,975
		237,699		270		(968)		(534)		3,546		240,013			158,041		27,153		4,577			556		(1,604)		188,723
Net gain on disposal of assets	Net gain on disposal of assets	(265)		(304)		399		(39)		—		(209)		Net gain on disposal of assets	(137)		66		25		-0.84	(63)		1		(108)
Income from operations	Income from operations	144,643		73,646		(2,544)		675		(3,515)		212,905		Income from operations	121,562		35,330		7,139			1,307		4,774		170,112
Interest expense, net and other	Interest expense, net and other	(2,394)		1,108		66		(282)		(1,700)		(3,202)		Interest expense, net and other	(2,684)		(2,833)		1,062			(56)		98		(4,413)
Income before income taxes	Income before income taxes	142,249		74,754		(2,478)		393		(5,215)		209,703		Income before income taxes	118,878		32,497		8,201			1,251		4,872		165,699
Provision for income taxes	Provision for income taxes	36,324		17,169		(136)		46		(1,062)		52,341		Provision for income taxes	28,573		14,033		1,365			209		(1,353)		42,827
Net income	Net income	$	105,925	$	57,585	$	(2,342)	$	347	$	(4,153)	$	157,362	Net income	$	90,305	$	18,464	$	6,836		$	1,042	$	6,225	$	122,872

Net sales increased ~~11.4%~~24.3% to ~~$974.0~~$757.9 million from ~~$874.0~~$609.7 million. Net sales ~~to home centers, lumber dealers and dealer distributors~~ increased ~~primarily~~ due to increases in ~~product~~ sales volumes ~~from~~as well as the ~~return~~implementation of ~~a nationwide home center customer. Net sales to contractor distributors decreased.~~product price increases during the second quarter of 2021. Wood construction product net sales, including sales of connectors, truss plates, fastening systems, fasteners and shearwalls, represented ~~86%~~87% and ~~84%~~86% of the Company's total net sales in the first ~~nine~~six months of ~~2020~~2021 and ~~2019,~~2020, respectively. Concrete construction product net sales, including sales of adhesives, chemicals, mechanical anchors, powder actuated tools and reinforcing fiber materials, represented ~~14%~~13% and ~~16%~~14% of the Company's total net sales in the first ~~nine~~six months of ~~2020~~2021 and ~~2019,~~2020, respectively.

Gross profit increased ~~18.5%~~28.4% to ~~$452.7~~$358.7 million from ~~$382.1~~$279.5 million. Gross profit margins increased to ~~46.5%~~47.3% from ~~43.3%~~45.8%, primarily due to lower ~~material~~labor costs and factory ~~and overhead~~ expense ~~(on higher production),~~as well as product price increases implemented during the second quarter, partly offset by higher material costs, warehouse, ~~labor~~ and shipping expense each as a percentage of net sales. 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, increased to ~~46.6%~~47.0% from ~~43.4%~~45.8% for wood construction products and increased to ~~42.3%~~45.2% from ~~41.6%~~42.4% for concrete construction products.

Research and development and engineering expense increased ~~7.3%~~12.5% to ~~$37.9~~$28.8 million from ~~$35.3~~$25.6 million primarily due to increases of ~~$1.9~~$1.5 million in ~~cash profit sharing expense and $0.3~~in personnel costs, $0.8 million in ~~personnel~~professional fees and $0.4 million in patent costs.

Selling expense increased ~~slightly~~ to ~~$84.8~~$64.0 million from ~~$84.5~~$55.4 million, primarily due to increases of ~~$4.0~~$6.8 million in personnel costs and sales commissions, $3.0 million in professional fees, $1.0 million in stock-based compensation, and $0.4 million cash profit sharing ~~and sales commissions and $2.4 million in personnel costs,~~expense, partly offset by decreases of ~~$3.2 million in travel–associated expenses, $1.1~~$1.0 million in advertising and promotional expense, ~~$0.8~~$0.6 million ~~in professional fees~~travel-related expenses and ~~$0.5~~$0.4 million ~~in royalty expense.~~software development costs being capitalized.

General and administrative expense ~~decreased slightly~~increased to ~~$117.4~~$96.0 million from ~~$117.9~~$77.1 million, primarily due to ~~decreases~~increases of ~~$7.1~~$6.0 million in professional fees, including consulting fees, ~~$2.1~~$4.9 million in ~~travel–associated expenses and $0.3~~personnel costs, $3.6 million in ~~lower bad debt expenses, partly offset by increases of $4.6~~stock-based compensation, $2.5 million in cash profit sharing ~~expense, $1.7 million in personnel related expense, $1.7~~expenses and $1.6 million in depreciation and amortization ~~expense, $0.7 million in insurance expense, and $0.6 million in computer software and hardware costs.~~expenses. Included in general and administrative expense are costs associated with the SAP implementation and support of ~~$9.1~~$9.3 million, ~~a decrease~~an increase of ~~$0.3~~$3.4 million over the first ~~nine-months~~six-months of ~~2019.~~2020.

Our effective income tax rate ~~decreased~~increased to ~~25.0%~~25.8% from ~~25.1%~~24.0%.

Consolidated net income was ~~$157.4~~$122.9 million compared to ~~$105.9~~$90.3 million. Diluted net income per common share was ~~$3.59~~$2.82 compared to ~~$2.35.~~$2.05.

Net sales

The following table represents net sales by segment for the ~~nine-month~~six-month periods ended ~~September~~June 30, ~~2019~~2020 and ~~2020,~~2021, respectively:

North Asia/
(in thousands) America Europe Pacific Total
Nine Months Ended
September 30, 2019 $ 746,009 $ 121,647 $ 6,373 $ 874,029
September 30, 2020 852,759 114,877 6,412 974,048
Increase (decrease) $ 106,750 $ (6,770) $ 39 $ 100,019
Percentage increase (decrease) 14.3 % (5.6) % 0.6 % 11.4 %


	North						Asia/
(in thousands)	America			Europe			Pacific			Total
Six Months Ended
June 30, 2020	$	535,857		$	70,111		$	3,776		$	609,744
June 30, 2021	651,120			100,734			6,068			757,922
Increase	$	115,263		$	30,623		$	2,292		$	148,178
Percentage increase	21.5		%	43.7		%	60.7		%	24.3		%

The following table represents segment net sales as percentages of total net sales for the ~~nine-month~~six-month periods ended ~~September~~June 30, ~~2019~~2020 and ~~2020,~~2021, respectively:


		North America		Europe		Asia/ Pacific		Total			North America		Europe		Asia/ Pacific		Total
Percentage of total 2019 net sales		85	%	14	%	1	%	100	%
Percentage of total 2020 net sales	Percentage of total 2020 net sales	88	%	12	%	—	%	100	%	Percentage of total 2020 net sales	88	%	12	%	—	%	100	%
Percentage of total 2021 net sales										Percentage of total 2021 net sales	86	%	13	%	1	%	100	%

Gross profit

The following table represents gross profit by segment for the ~~nine-month~~six-month periods ended ~~September~~June 30, ~~2019~~2020 and ~~2020,~~2021, respectively:

North Asia/ Admin &
(in thousands) America Europe Pacific All Other Total
Nine Months Ended
September 30, 2019 $ 336,251 $ 43,900 $ 1,924 $ 2 $ 382,077
September 30, 2020 409,863 40,787 2,026 33 452,709
Increase (decrease) $ 73,612 $ (3,113) $ 102 $ 31 $ 70,632
Percentage increase (decrease) 21.9 % (7.1) % * * 18.5 %


	North						Asia/		Admin &
(in thousands)	America			Europe			Pacific		All Other		Total
Six Months Ended
June 30, 2020	$	254,819		$	23,807		$	651	$	189	$	279,466
June 30, 2021	317,369			35,548			2,451		3,359		358,727
Increase	$	62,550		$	11,741		$	1,800	$	3,170	$	79,261
Percentage increase	24.5		%	49.3		%	*		*		28.4		%

* The statistic is not meaningful or material

The following table represents gross profit as a percentage of sales by segment for the ~~nine-month~~six-month periods ended ~~September~~June 30, ~~2019~~2020 and ~~2020,~~2021, respectively:


(in thousand)	(in thousand)	North America		Europe		Asia/ Pacific		Admin & All Other	Total		(in thousand)	North America		Europe		Asia/ Pacific		Admin & All Other	Total
2019 gross profit percentage		45.1	%	36.1	%	30.2	%	*	43.7	%
2020 gross profit percentage	2020 gross profit percentage	48.1	%	35.5	%	31.6	%	*	46.5	%	2020 gross profit percentage	47.6	%	34.0	%	17.2	%	*	45.8	%
2021 gross profit percentage											2021 gross profit percentage	48.7	%	35.3	%	40.4	%	*	47.3	%

* The statistic is not meaningful or material.

North America

•Net sales increased ~~14.3%~~21.5%, primarily due to higher sales volumes from all of our distribution channels, including the return of ~~a nationwide home center customer. Canada's net sales were negatively affected by foreign currency translation. In local currency,~~Lowe's, and product price increases implemented during the second quarter. Canada net sales increased primarily due to increases in sales ~~volume.~~volume and were positively affected by $3.3 million foreign currency translation in local currency.

•Gross profit margin increased to 48.7% from 47.6%, primarily due to decreases in labor, warehouse and factory and overhead costs as well as product price increases implemented during the second quarter, partly offset by higher material costs, each as a percentage of net sales.

•Gross profit margin increased to 48.1% from 45.1%, primarily due to decreases in material costs and factory and overhead costs (on higher production), partly offset by higher warehouse, labor and shipping costs, each as a percentage of net sales.

•Research and development and engineering expense increased ~~$2.5~~$2.7 million, primarily due to increases of ~~$1.9~~$1.0 million in ~~cash profit sharing expense.~~personnel costs, $0.6 million in professional fees, $0.3 million in patent costs, and $0.2 million in computer related costs.

•Selling expense increased ~~$1.1~~$6.6 million, primarily due to increases of ~~$4.1~~$4.6 million in personnel costs and sales commissions, $1.5 million in professional fees, $0.8 million in stock-based compensation, and $0.8 million in cash profit sharing ~~and sales commissions and $2.2 million in personnel costs,~~expense, partly offset by decreases of ~~$2.6 million in travel–associated expenses, $1.0~~$0.9 million in advertising and promotional expense, ~~$0.7~~and $0.4 million in ~~professional fees and $0.6 million in royalty expense.~~travel–associated expenses.

•General and administrative expense ~~decreased $3.3~~increased $17.8 million, primarily due to ~~decreases~~increases of ~~$6.9~~$11.6 million in professional fees, including consulting fees, ~~$1.5~~$2.6 million in ~~travel–associated expenses~~personnel costs, $1.3 million in depreciation and ~~$0.2~~amortization expense, $0.8 million in computer software and hardware costs and $0.6 million in stock-based compensation, partly offset by ~~increases~~decreases of ~~$3.4~~$0.3 million in ~~cash profit sharing expense, $1.2~~travel related expenses, and $0.3 million in ~~depreciation and amortization expense, $1.0 million in personnel related expense and $0.6 million in computer software and hardware costs.~~cost profit sharing. Included in general and administrative expense are costs associated with the SAP implementation and support of $7.2 million, ~~a decrease~~an increase of ~~$0.3~~$1.3 million over the first ~~nine-months~~six months of ~~2019.~~2020.

•Income from operations increased ~~$73.6~~$35.3 million, mostly due to increased sales, gross profit margins, partly offset by higher operating expenses.

Europe

•Net sales ~~decreased 5.6%~~increased 43.7%, primarily due to ~~lower~~higher sales volumes ~~that resulted from lower production~~compared to last year’s COVID-19 related ~~to COVID-19 plant closures.~~slow-down. Europe sales were ~~impacted~~also benefited by ~~negative~~positive $8.8 million foreign currency translations resulting from some Europe currencies ~~weakening~~strengthening against the United States dollar. ~~In local currency, Europe net sales decreased primarily due to lower sales volumes.~~

•Gross profit margins ~~decreased~~increased to ~~35.5%~~35.3% from ~~36.1%~~34.0%, primarily due to ~~increases in~~lower labor, factory, shipping and warehouse costs, ~~partly~~ offset by ~~lower~~higher material ~~and factory overhead,~~costs each ~~cost~~ as a percentage of net sales.

•Selling expense ~~decreased $0.5~~increased $1.6 million, primarily due to ~~a decrease~~increases of $1.4 million in personnel costs, $0.6 million in ~~travel–associated~~professional fees, offset by decrease of $0.3 million in travel-related and advertising expenses.

•General and administrative expense ~~decreased $0.5~~increased $2.6 million, primarily due to ~~decreases~~increases of ~~$0.4~~$1.1 million in ~~travel and entertainment expense~~professional fees, $0.9 million in personnel costs, and $0.3 million in cash profit sharing. Included in general and administrative expense are costs associated with the SAP implementation and support of ~~$1.8~~$2.0 million, ~~a decrease~~an increase of ~~$0.1~~$0.8 million over the first ~~nine-months~~six months of ~~2019.~~2020.

•Income from operations ~~decreased $2.5~~increased $7.1 million, primarily due to ~~lower~~higher sales and gross profit margins, partly offset by ~~lower~~higher operating expenses.

Asia/Pacific

•For information about the Company's Asia/Pacific segment, please refer to the tables above setting forth changes in our operating results for the ~~nine~~six months ended ~~September~~June 30, 2021 and 2020, ~~and 2019,~~ respectively.

~~Admin & All Other~~

•General and administrative expense increased $3.5 million, primarily due to increases of $1.5 million in cash profit sharing expense, $0.7 million in stock-based compensation, and $0.6 million in insurance expense.

Effect of New Accounting Standards

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

Liquidity and Sources of Capital

The Company is a borrower, and certain domestic subsidiaries are guarantors, under a revolving credit agreement with Wells Fargo Bank, N.A. as administrative agent, and certain other lenders, which provides the Company with a $300.0 million revolving line of credit (the “Credit Facility”), and an irrevocable standby letter of credit in support of various insurance deductibles.

In ~~May 2020,~~July 2021, the Company entered into a ~~third~~fourth amendment to the unsecured credit agreement dated July 27, 2012 ~~which~~with Wells Fargo Bank, National Association, and certain other institutional lenders that provides for a $300.0 million unsecured revolving credit facility (“Credit Facility”). The amendment extends the term of the Credit ~~Agreement~~Facility from July 23, ~~2021,~~2022, to July ~~23, 2022~~12, 2026

and modified certain covenants to provide us with additional flexibility. As of June 30, 2021, the full $300 million on the Credit Facility was available for borrowing and we remain debt free.

~~As previously disclosed, as a proactive measure,~~Our principal uses of liquidity include the ~~Company elected to draw down $150.0 million from the Credit Facility to increase its cash position~~costs and ~~preserve financial flexibility in light of the uncertainty resulting from the COVID-19 pandemic. The proceeds from the borrowings are available to be used for~~expenses associated with our operations, including financing working capital ~~general corporate or~~requirements and continuing our capital allocation strategy, which includes supporting capital expenditures, repurchasing the Company's common stock, paying cash dividends, and financing other ~~purposes permitted by~~investment opportunities over the Credit Facility. As of September 30, 2020, the Company repaid $75.0 million of the borrowed funds and repaid an additional $25.0 million on October 30, 2020. Total available credit as of September 30, 2020, was $227.5 million, including the Credit Facility and other revolving credit lines.next twelve months.

As of ~~September~~June 30, ~~2020,~~2021, our cash and cash equivalents consisted of deposits and money market funds held with established national financial institutions. Cash and cash equivalents of ~~$67.0~~$67.7 million are held in the local currencies of our foreign operations and could be subject to additional taxation if repatriated to the United States. The Company is maintaining a permanent reinvestment assertion on its foreign earnings relative to remaining cash held outside the United States.

The following table presents selected financial information as of ~~September~~June 30, 2021, December 31, 2020 and June 30, 2020, ~~December 31, 2019 and September 30, 2019,~~ respectively:


		At September 30,		At December 31,		At September 30,			At June 30,		At December 31,		At June 30,
(in thousands)	(in thousands)	2020		2019		2019		(in thousands)	2021		2020		2020

Cash and cash equivalents	Cash and cash equivalents	$	311,465	$	230,210	$	194,061	Cash and cash equivalents	$	305,796	$	274,639	$	315,448
Property, plant and equipment, net	Property, plant and equipment, net	246,472		249,012		250,950		Property, plant and equipment, net	255,353		255,184		247,119
Goodwill, intangible assets and equity investment		157,173		159,430		155,492
Working capital		629,244		482,000		469,387
Goodwill, intangible assets and other								Goodwill, intangible assets and other	164,511		165,110		156,957
Working capital less cash and cash equivalents								Working capital less cash and cash equivalents	363,453		284,439		326,040

The following table provides cash flow indicators for the ~~nine-month~~six-month periods ended ~~September~~June 30, ~~2020~~2021 and ~~2019,~~2020, respectively:


		Nine Months Ended September 30,					Six Months Ended June 30,
(in thousands)	(in thousands)	2020		2019		(in thousands)	2021		2020
Net cash provided by (used in):	Net cash provided by (used in):					Net cash provided by (used in):
Operating activities	Operating activities	$	129,618	$	149,235	Operating activities	$	81,632	$	42,766
Investing activities	Investing activities	(21,554)		(25,526)		Investing activities	(26,214)		(13,444)
Financing activities	Financing activities	(26,153)		(88,371)		Financing activities	(25,603)		57,733

Cash flows from operating activities result primarily from our earnings, and are also affected by changes in operating assets and liabilities which consist primarily of working capital balances. ~~As a significant portion of our~~Our revenues are derived from manufacturing and sales of building construction materials. Our operating cash flows are subject to seasonality and are cyclically associated with the volume and timing of construction project starts. For example, trade accounts receivable is generally at its lowest at the end of the fourth quarter and increases during the first, second and third quarters.

During the ~~nine~~six months ended ~~September~~June 30, ~~2020,~~2021, operating activities provided ~~$129.6~~$81.6 million in cash and cash equivalents, as a result of ~~$157.4~~$122.9 million from net income and ~~$47.5~~$41.2 million from reversing non-cash ~~adjustments to~~expenses from net income, which included

depreciation and amortization expense and stock-based compensation expense. Cash provided from net income was partly offset by a decrease of ~~$75.2~~$82.7 million in the net change in operating assets and liabilities, including increases of ~~$87.2~~$84.7 million in trade accounts receivable, ~~and $7.2~~$27.3 million in inventory and $14.8 million in other current assets, partly offset by increases of ~~$21.8~~$35.9 million in other current liabilities and ~~$7.8~~$10.8 million in trade accounts payable.

Cash used in investing activities of ~~$21.6~~$26.2 million during the ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 was mainly for capital ~~expenditures.~~expenditures and a $6.8 million investment in a venture capital fund. Our capital spending in ~~2018,~~ 2019, 2020 and the ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 was ~~$29.3~~$37.5 million, ~~$32.7~~$37.9 million and ~~$20.9~~$19.3 million, respectively, which was primarily used for machinery and equipment purchases and software in development. Based on current information and subject to future events and circumstances, we expect new capital spending for fiscal year 2021 will be in the $55 million to $60 million range which includes carryover projects from 2020 that were paused due to COVID-19 concerns. Capital spending will be primarily for safety ~~and~~needs, equipment replacement ~~but may be for other~~and productivity improvements. At this time only a small amount of capital ~~projects, including those that provide cost savings or enable future growth.~~spending is related to our growth initiatives.

Cash used in financing activities of ~~$26.2~~$25.6 million during the ~~nine~~six months ended ~~September~~June 30, ~~2020 was~~2021 consisted primarily ~~due to the Company borrowing $150.0~~of $20.0 million on its credit facility, of which $75.0 million was repaid in the third quarter of 2020, $62.7 million to purchase 902,340 shares of the Company's common stock on the open market at an average price of $69.46 per share and $30.2 millionused to pay dividends to our ~~stockholders.~~stockholders and $5.3 million used to pay income taxes on behalf of the employees for shares withheld with respect to their vested restricted stock units.

On ~~October 23, 2020,~~July 14, 2021, the Board declared a quarterly cash dividend of ~~$0.23~~$0.25 per share ~~estimated to be $10.0 million in total. The dividend will be~~ payable on ~~January~~October 28, 2021, to the Company's stockholders of record on ~~January~~October 7, 2021. The Board also approved changing our capital return threshold from 50% of our cash flow from operations to 50% of our free cash flow, which is calculated by subtracting capital expenditures from cash flow from operations. For the six months ended June 30, 2021, we have returned $20 million of our free cash flow to stockholders.

As illustrated in the table below, ~~since~~from 2015 to 2020, the Company has repurchased over seven-and-a-half million shares of the Company's common stock, which represents approximately 15.4% of our shares of common stock outstanding at the beginning of 2015. Including dividends, we have returned cash of ~~$614.3~~$637.7 million in stock repurchases and dividends, which ~~represents 73.9%~~represented 70.2% of our total cash flow from operations during the same period. The Company has repurchased over 7.7 million shares of the Company's common stock since the beginning of 2015, which represents approximately 15.7% of the outstanding shares of the Company's common stock.


(in thousands)	(in thousands)	Number of Shares Repurchased	Cash Paid for Share Repurchases		Cash paid for Dividends		Total		(in thousands)	Number of Shares Repurchased	Cash Paid for Share Repurchases		Cash paid for Dividends		Total
January 1 - September 30, 2020		902	$	62,679	$	30,399	$	93,078

January 1 - December 31, 2020									January 1 - December 31, 2020	1,053	76,189		40,400		116,589
January 1 - December 31, 2019	January 1 - December 31, 2019	972	60,816		40,258		101,074		January 1 - December 31, 2019	972	60,816		40,258		101,074
January 1 - December 31, 2018	January 1 - December 31, 2018	1,955	110,540		39,891		150,431		January 1 - December 31, 2018	1,955	110,540		39,891		150,431
January 1 - December 31, 2017	January 1 - December 31, 2017	1,138	70,000		36,981		106,981		January 1 - December 31, 2017	1,138	70,000		36,981		106,981
January 1 - December 31, 2016	January 1 - December 31, 2016	1,244	53,502		32,711		86,213		January 1 - December 31, 2016	1,244	53,502		32,711		86,213
January 1 - December 31, 2015	January 1 - December 31, 2015	1,339	47,144		29,352		76,496		January 1 - December 31, 2015	1,339	47,144		29,352		76,496
Total	Total	7,550	$	404,681	$	209,592	$	614,273	Total	7,701	$	418,191	$	219,593	$	637,784

~~The~~During the month of July, 2021, the Company ~~intends to resume its~~repurchased 182,752 shares of the Company's common stock ~~repurchase program~~ in the ~~fourth quarter~~open market at an average price of ~~2020. As~~$109.44 per share, for a total of ~~September��30, 2020, approximately $37.3~~$20.0 million. For the seven months ending July 31, 2021, the Company returned $40.0 million ~~remained available under the $100.0 million repurchase authorization, which expires December 31, 2020.~~of our free cash flow to our stockholders.

Off-Balance Sheet Arrangements

We did not have any off-balance sheet arrangements as of ~~September~~June 30, ~~2020.~~2021.

Inflation and Raw Materials

We believe that the effect of inflation has not been material in recent years, as general inflation rates have remained relatively low. However, the cost of steel, lumber and petroleum products have increased in the last few quarters as had housing prices on strong demand, especially for new housing compared to a limited supply. This could have an effect on the general inflation rates in future quarters. Our main raw material is steel. As such, ~~increases in~~increased steel prices may adversely affect our gross profit margin if we cannot recover the higher costs through price ~~increases.~~increases in a timely manner, which is reflected in the Business Outlook section above.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

We have operations both within the United States and internationally, and are exposed to market risks in the ordinary course of our business.

Foreign Exchange Risk

We have foreign exchange rate risk in our international operations, and through purchases from foreign vendors. Changes in the values of currencies of foreign countries affect our financial position, income statement and cash flows when translated into U.S. dollars. We estimate that if the exchange rate were to change by 10% in any one country where we have our operations, the change in net income would not be material to our operations taken as a whole.

We may manage our exposure to transactional exposures by entering into foreign currency forward contracts for forecasted transactions and projected cash flows for foreign currencies in future periods. In 2020 and 2021, we entered into financial contracts to hedge the risk of fluctuations associated with the Chinese Yuan.

Foreign currency translation adjustments on our underlying assets and liabilities resulted in an accumulated other comprehensive ~~profit~~loss of ~~$6.2~~$1.8 million for the ~~three~~six months ended ~~September~~June 30, ~~2020,~~2021, due to the effects of the weakening United States dollar in relation to almost all other currencies. Foreign currency translation adjustments on our underlying assets and liabilities resulted in an accumulated other comprehensive profit of $3.1 million for the nine months ended September 30, 2020, due to the strengthening of the United States dollar in relation to almost all currencies.

Interest Rate Risk

Our primary exposure to interest rate risk results from outstanding borrowings under the Credit Facility, which bears interest at variable rates. The variable interest rates on the Credit Facility fluctuate and exposes us to short-term changes in market interest rates as our interest obligation on this instrument is based on prevailing market interest rates. Interest rates fluctuate as a result of many factors, including governmental monetary and tax policies, domestic and international economic and political considerations and other factors that are beyond our control. ~~As of September 30, 2020, we have $75.0 million outstanding under the Credit Facility at an average annualized interest rate of approximately 1.30%.~~Currently, we do not engage in any interest rate hedging activity and a 10% change in interest rates would affect our interest expense by approximately $0.1 million per year, assuming no changes in the amount outstanding or other variables under the Credit Facility.

Item 4. Controls and Procedures.

Disclosure Controls and Procedures. As of ~~September~~June 30, ~~2020,~~2021, the Company carried out an evaluation, under the supervision and with the participation of the Company’s management, including the chief executive officer (“CEO”) and the chief financial officer (“CFO”), of the effectiveness of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act. Based on this evaluation, the Company’s CEO and CFO have concluded that the Company’s disclosure controls and procedures were effective at the reasonable assurance level. Disclosure controls and procedures are controls and other procedures designed reasonably to assure that information required to be disclosed in the Company’s reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures are also designed reasonably to assure that this information is accumulated and communicated to the Company’s management, including the CEO and the CFO, as appropriate to allow timely decisions regarding required disclosure.

The Company’s management, including the CEO and the CFO, does not, however, expect that the Company’s disclosure controls and procedures or the Company’s internal control over financial reporting will prevent all fraud and material errors. Internal control over financial reporting, no matter how well conceived and operated, can provide only reasonable, not absolute assurance that the objectives of the control system are met. In addition, the design of a control system must reflect the facts that there are resource constraints and that the benefits of controls must be considered relative to their costs. The inherent limitations in internal control over financial reporting include the realities that judgments can be faulty and that breakdowns can occur because of simple error or mistake. Controls also can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of controls. The design of any system of internal control is also based in part on assumptions about the likelihood of future events, and there can be only reasonable, not absolute assurance that any design will succeed in achieving its stated goals under all potential events and conditions. Over time, controls may become inadequate because of changes in circumstances, or the degree of compliance with the policies and procedures may deteriorate.

Changes in Internal Control over Financial Reporting. In 2016, we began the process of implementing a fully integrated ERP platform from SAP America, Inc. (“SAP”), as part of a multi-year plan to integrate and upgrade our systems and processes. ~~The first phase~~As of ~~this implementation became~~July 31, 2021, SAP was operational, ~~at most~~in all of ~~our~~ North America ~~sales, production, warehousing~~ and ~~administrative locations between February 2018 and October 2020.~~parts of Europe. We believe the necessary steps have been taken to monitor and maintain appropriate internal control over financial reporting during this period of change and will continue to evaluate the operating effectiveness of related key controls during subsequent periods.

As the phased implementation of this system continues, we are experiencing certain changes to our processes and procedures which, in turn, result in changes to our internal control over financial reporting. While we expect SAP to strengthen our internal financial controls by automating certain manual processes and standardizing business processes and reporting across our organization, management will continue to evaluate and monitor our internal controls as each of the affected areas evolves. For a discussion of risks related to the implementation of new systems, see Item 1A - "Risk Factors - ~~Other~~ Risks - Related to Our Intellectual Property and Information Technology - We rely on complex software systems and hosted applications to operate our business, and our business may be disrupted if we are unable to successfully/efficiently update these systems or convert to new systems." in the ~~2019~~2020 Form 10-K.

There were no changes in our internal control over financial reporting ~~identified in management's evaluation pursuant to Rules 13a-15(d) or 15d-15(d) of the Exchange Act~~ during the three months ended ~~September~~June 30, ~~2020~~2021 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II — OTHER INFORMATION

Item 1. Legal Proceedings.

From time to time, the Company is involved in various legal proceedings and other matters arising in the normal course of business. Corrosion, hydrogen 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.

The Company currently 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, the resolution of any claim or litigation is subject to inherent uncertainty and we could in the future, incur judgments, enter into settlements of claims or revise our expectations regarding the outcome of the various legal proceedings and other matters we are currently involved in, which could materially impact our financial condition, cash flows or results of operations. See “Note 1213 — Commitments and Contingencies” to the accompanying unaudited interim condensed consolidated financial statements for certain potential third-party claims.

Item 1A. Risk Factors

There have been no material changes to our risk factors reported or new risk factors identified since the filing of our Annual Report on ~~From~~Form 10-K for the year ended December 31, ~~2019, and our Quarterly Report on Form 10-Q for the quarter ended March 31, 2020 and June 30,~~ 2020.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

~~The table below presents the monthly repurchases of shares of our common stock in the third quarter of 2020.~~

(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]
July 1 - July 31, 2020 94 $ 81.50 — $37.3 million
August 1 - August 31, 2020 1,497 $ 102.98 — $37.3 million
September 1 - September 30, 2020 — $ — — $37.3 million
Total 1,591

~~[1]~~ Total number of shares purchased includes shares withheld for settlement of payroll taxes from stock-based compensation awards vested for retirement eligible employees who retired during the third quarter of 2020.

~~[2]~~ ~~Pursuant to the Board’s $100.0 million repurchase authorization that was publicly~~Our Board has authorized, as announced on December ~~9, 2019, which~~16, 2020, the repurchase of up to $100.0 million of the Company’s common stock. For the six months ended June 30, 2021, there were no repurchases of the Company’s common stock under this authorization. As of June 30, 2021, the approximate dollar value of shares that may still be repurchased under this authorization was $100.0 million. The timing, manner, price and amount of any share repurchases will be determined by us, in our discretion, based upon the evaluation of economic and market conditions, stock price, applicable legal and regulatory requirements and other factors. This authorization is scheduled to expire on December 31, ~~2020.~~2021. The program does not require us to repurchase any specific number of shares.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosure.

Not applicable.

Item 5. Other Information.

None.

Item 6. Exhibits.


						EXHIBIT INDEX
3.1						Certificate of Incorporation of Simpson Manufacturing Co., Inc., as amended, are incorporated by reference to Exhibit 3.1 of its Quarterly Report on Form 10-Q filed on May 9, 2018
3.2						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.
~~10.1~~						Third Amendment to Credit Agreement, dated as of May 21, 2020, among the Company, as Borrower, Simpson Strong-Tie Company Inc. and Simpson Strong-Tie International, Inc., as Guarantors, the several financial institutions party to the Agreement, as Lenders, and Well Fargo Bank, National Association, in its separate capacities as Swing Line Lender and L/C Issuer and as Administrative Agent is incorporated by reference to Exhibit 10.1 to Simpson Manufacturing Co., Inc.’s Current Report on Form 8-K dated May 27, 2020.
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)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Simpson Manufacturing Co., Inc.

(Registrant)

DATE:

~~November~~August 5, ~~2020~~2021

By /s/Brian J. Magstadt

Brian J. Magstadt

Chief Financial Officer

(principal accounting and financial officer)


	At September 30, 2019
	Gross				Net
(in thousands)	Carrying Amount		Accumulated Amortization		Carrying Amount
North America	$	31,305	$	(18,461)	$	12,844
Europe	23,351		(14,379)		8,972
Total	$	54,656	$	(32,840)	$	21,816


	(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]
July 1 - July 31, 2020	94	$	81.50	—	$37.3 million
August 1 - August 31, 2020	1,497	$	102.98	—	$37.3 million
September 1 - September 30, 2020	—	$	—	—	$37.3 million
Total	1,591