Simpson Manufacturing Announces 2020 Plan - Quick Facts

(RTTNews) - Simpson Manufacturing Co., Inc. (SSD) announced the company plans to achieve organically a net sales compound annual growth rate of approximately 8% from $860.7 million reported in fiscal 2016 through fiscal 2020. During the period, the company will focus on organic growth and will deemphasize acquisition activity. The company said it seeks to reduce total operating expenses as a percent of net sales from 31.8% in fiscal 2016 to a range of 26.0% to 27.0% by fiscal 2020 and improve its consolidated income from operations as a percentage of net sales from 16.2% in fiscal 2016 to reach approximately 21% to 22% by fiscal 2020.

Karen Colonias, CEO of Simpson Manufacturing Co., Inc., stated: "To improve our operating leverage, we plan to rationalize our cost structure by actively managing our 2018 operating expenses to be below 2017 levels. We will implement this through a combination of zero-based budgeting and maintaining our headcount at a net neutral. Further, we plan to reduce operating expenses in Europe by $2 million as well as to reduce operating expenses in our concrete product line by $3 million."

The company said it remains committed to continue returning 50% of its cash flow from operations in the form of both dividends and share repurchases to its shareholders through fiscal 2020.

The company currently believes the market price for steel will remain stable for the remainder of 2017. The company reiterated its outlook for gross profit margin to be in the range of 45% to 46% for the full fiscal year ending December 31, 2017.