SIMPSON MANUFACTURING CO., INC. Each of the terms the "Company," "we," "our," "us" and similar terms used herein refer collectively toSimpson Manufacturing Co., Inc. , aDelaware corporation, and its wholly-owned subsidiaries, includingSimpson 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 by reference into this report or other material we file with or furnish to theSecurities and Exchange Commission (the "SEC"), except as 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. 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, such as the acquisition of ETANCO, 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, 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, the successful integration of
ETANCO and those discussed under Item 1A. Risk Factors and Item 7. Management's
Discussion and Analysis of Financial Condition and Results of Operations in our
Annual Report on Form 10-K for the fiscal year ended December 31, 2021 .
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 a novel strain of coronavirus (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 borrowings under our existing credit agreement; restrictions on our business
and financial covenants under our credit agreement? reliance on employees
subject to collective bargaining agreements; and or ability to repurchase shares
of our common stock and the amounts and timing of repurchases, if any.
We caution that you should not place undue reliance on these forward-looking
statements, which speak only as of the date of this report. Except as required
under the federal securities laws or the rules and regulations of the SEC , 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.
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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:
At ourMarch 23, 2021 analyst and investor day, we 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 key growth initiatives will focus on the original equipment manufacturers, repair and remodel or do-it-yourself, mass timber, concrete and structural steel markets. In order to grow in these markets, we aspire to be among the leaders in engineered load-rated construction building products and systems and building 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 our key growth initiatives. 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:
•Strengthen our values-based culture; •Be the business partner of choice; •Strive to be an innovative leader in the markets we operate; •Continue above market growth relative tothe United States housing starts; •Remain within the top quartile of our proxy peers for operating income margin; and •Remain in the top quartile of our proxy peers for return on invested capital.
We will make periodic updates related to material developments to our key growth initiatives and with our five-year ambitions.
Acquisitions and Investments
OnApril 1, 2022 , the Company successfully completed the acquisition of ETANCO, a manufacturer of fastener products headquartered inFrance , for$800.0 million (725 million euros (1)) net of cash. For the 12 months endingSeptember 30, 2021 , ETANCO's net sales and operating income margin were approximately$291.0 million (approximately €258 million(2)) and 19.7%(2), respectively. ETANCO's primary product applications directly align with the addressable markets in which the Company operates. Leveraging ETANCO's leading market position inEurope , following the proposed acquisition, the Company would expand its portfolio of solutions, including mechanical anchors, fasteners and commercial building envelope solutions, as well as significantly increase its market presence acrossEurope . The transaction would allow the Company to enter into new commercial building markets such as façades, waterproofing, safety and solar, as well as grow its share of direct business sales inEurope . The Company expects to realize operating income synergies of approximately$30 million , on an annual run rate basis, within 36 months following the proposed acquisition. These synergies would be achieved through expanding the Company's market share by selling its products into new markets and channels, incorporating ETANCO's products into the Company's existing channels, as well as procurement optimization, manufacturing and operating expense efficiencies. The Company expects to scale its European net sales and operating income margin performance, which is anticipated to result in an approximate 500 basis point increase inEurope operating income margins by 2025. Additionally, the Company also expects that its interest expense will increase as a result of the incurrence of debt to finance the acquisition of ETANCO.
Other accomplishments over the past year included the following:
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•Realigned our sales teams to more specifically focus on five end use markets -
Residential, Commercial, OEM, National Retail and Building Technology , which has
led to new customer and project wins within five of our key growth initiatives.
•Invested in a venture capital fund focused on the home building industry and
related new technologies.
•Entered into a joint indirect investment in the North America Hundegger
equipment sales and service representative partner, Hundegger USA , LC to
increase each parties' sales in the mass timber and component manufacturing
markets by offering North America customers end-to-end solutions, including
integrated software from a single source.
•Formed an strategic alliance with Structural Technologies that will allow both
parties jointly deliver complete end-to-end strengthening solutions to
engineering professionals, contractors and owners across multiple construction
and repair markets,
•Within the National Retail market, we focused on growth in the repair and
remodel and do-it-yourself markets by completing a reset of some of our fastener
sets with one of our key customers, and
•Within the Commercial market, we expanded our offerings, including the
expansion of our structural steel product line.
The COVID-19 pandemic has severely impacted global economic conditions,
resulting in substantial volatility in the financial markets, increased
unemployment, and operational challenges resulting from measures that
governments have imposed to control its spread. We continue to monitor the
COVID-19 pandemic for potential impact on our business. We have undertaken
numerous steps and instituted additional precautions to comply with health and
safety guidelines and to protect our employees, suppliers and customers, as
their safety and well-being is one of our 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.
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 and continued to meet our customers' needs despite the
challenges presented by the COVID-19 pandemic. We will continue to communicate
with our supply chain partners to identify and mitigate risk and to manage
inventory levels. The Company's Crisis Management Team, which includes members
of senior management, meets periodically to review and assess the status of the
Company's operations and the health and safety of its employees.
The Company's business, financial condition and results of operations depends in
part on the level of United States , housing starts and residential construction
activity. Though single-family housing starts increased significantly in the
last year, we believe there is uncertainty current demand will remain at the
current level due to supply-chain factors, inflation and interest rate increases
affecting new home starts and completions. With recent sales price increases, we
believe sales will likely increase in future periods even if demand does not
decrease. However, increased selling prices are expected to be offset by
increasing material costs, sourcing logistics complications and a tight labor
market, which could negatively affect operating margins for 2022.
Management continues to monitor the impact of rising material input and product
logistics costs on 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 toUnited States 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 and economic events such as tariffs and the possibility of additional tariffs on imported raw materials or finished goods or such as labor disputes can also 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 and stressed product 23 -------------------------------------------------------------------------------- transportation systems. 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. Delays in receiving products or shipping sales orders, as well as increased transportation costs, could negatively impact sales and operating profits.
Our operations also expose us to risks associated with pandemics, epidemics or other public health emergencies, such as the COVID-19 pandemic.
Business Segment Information
Historically ourNorth America segment has generated more revenues from wood construction products compared to concrete construction products. Our wood construction product sales increased 49.0% for the quarter endedMarch 31, 2022 compared toMarch 31, 2021 , and our concrete construction product sales increased 27.5% for the quarter endedMarch 31, 2022 compared toMarch 31, 2021 , due to product price increases throughout 2021 in an effort to offset rising raw material costs. These price increases were also the primary contributor to gross profits and operating profits increasing over the same comparable periods. As a result of the product price increases phased in during 2021, full phased in product price increases for 2022 could result in$300 million in additional net sales compared to 2021. We currently anticipate gross margin and operating margin compression beginning in the latter half of 2022 as higher priced raw materials and rising average cost of steel on hand offset the price increases. OurEurope segment also generates more revenues from wood construction products than concrete construction products.Europe sales increased 16.2% for the quarter endedMarch 31, 2022 compared toMarch 31, 2021 , primarily due to product price increases throughout 2021 in an effort to offset rising raw material costs, partly offset by the negative effect of approximately$3.7 million in foreign currency translation due a strengtheningUnited States dollar. Wood construction product sales increased 14.7% for the quarter endedMarch 31, 2022 compared toMarch 31, 2021 . Concrete construction product sales are mostly project based, and sales increased 26.2% for the quarter endedMarch 31, 2022 compared toMarch 31, 2021 . The Company, including ETANCO, have suspended all sales and distribution activity toRussia andBelarus . We estimate annual sales to these countries are less$5.0 million . Gross margins decreased, primarily due to higher factory & tooling costs, as a percentage of net sales.Europe reported an operating loss of$1.4 million , primarily due to professional fees of$7.0 million associated with the ETANCO acquisition, offset by a$1.1 million gain on the sale of a property and increased gross profits. We anticipate incurring approximately$15 million to$17 million in integration and transaction costs related to the ETANCO acquisition, of which$8 million to$10 million are incremental. Including increased steel costs, product sourcing complications with theUkraine conflict,Europe's net sales and operating margins for the full year 2022 will likely be negatively impacted.
Our
SinceMarch 2021 , inventory pounds inNorth America , which is the bulk of our inventory, remained flat while the weighted average cost per pound of total on hand increased approximately 56%. Based on our current expectations, we are anticipating continued raw material cost pressure for fiscal 2022. As we work through our on hand inventory and continue to buy raw material at these much higher prices, our anticipated costs of goods sold are expected to increase during fiscal 2022, even if prices for raw material decline, as the impact from averaging raw material costs typically lags our price increases. We began to see this sequential accelerating increase in material costs occur beginning in the third quarter 2021. Business Outlook The Company updated its 2022 financial outlook to include the acquisition of ETANCO, which closed onApril 1, 2022 , one quarter of actual results, and its latest expectations regarding demand trends, raw material costs and operating expenses. Based on business trends and conditions as ofApril 25, 2022 , the Company's outlook for the full fiscal year endingDecember 31, 2022 is as follows: •Operating margin is expected to be in the range of 19.0% to 20.0%, mostly attributable to an improved outlook for the overall market and Simpson. In addition, the revised outlook includes projected results for ETANCO, including$15.0 to$17.0 million in integration and transaction costs.
•Interest expense on the outstanding borrowings of
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•The effective tax rate is expected to be in the range of 25.5% to 26.5%.
•Capital expenditures are expected to be in the range of$65.0 million to$70.0 million . As part of the integration process for ETANCO, Simpson management is in the process of assessing additional capital expenditures in support of ETANCO's operations.
Footnotes
(1) Reflects EUR to USD exchange rate as ofMarch 21, 2022 . (2) For the last 12 months endingSeptember 30, 2021 , in accordance with French GAAP. Subject to change following conversion to IFRS orU.S. GAAP accounting standards and reflects EUR to USD exchange rate as ofDecember 22, 2021 .
Results of Operations for the Three Months Ended
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 endedMarch 31, 2022 , against the results of operations for the three months endedMarch 31, 2021 . Unless otherwise stated, the results announced below, when referencing "both quarters," refer to the three months endedMarch 31, 2021 and the three months endedMarch 31, 2022 . The Company changed its presentation of itsNorth America and Administrative and all other segment statement of operations to account for allocated expenses and management fees as a separate item below income from operations. Allocated expenses and management fees between the two segments were previously included in operating expenses and in income from operations. Income from operations for theNorth America and Administrative and all other segments for the quarter endedMarch 31, 2022 presented below was not affected by the change in presentation. Consolidated income from operations, income before tax and net income for the quarters endedMarch 31, 2022 andMarch 31, 2021 presented below were not affected by the change in presentation. First Quarter 2022 Consolidated Financial Highlights The following table shows the change in the Company's operations from the three months endedMarch 31, 2021 to the three months endedMarch 31, 2022 , and the increases or decreases for each category by segment: Three Months Three Months Ended Increase (Decrease) in Operating Segment Ended March 31, North Asia/ Admin & March 31, (in thousands) 2021 America Europe Pacific All Other 2022 Net sales$ 347,642 $ 138,167 $ 7,155 $ 606 $ -$ 493,570 Cost of sales 185,360 66,078 4,952 402 (3) 256,789 Gross profit 162,282 72,089 2,203 204 3 236,781 Research and development and other engineering expense 14,591 1,389 (109) (5) - 15,866 Selling expense 30,823 5,654 264 82 13 36,836 General and administrative expense 48,565 2,333 (158) (81) 3,115 53,774 Total operating expenses 93,979 9,376 (3) (4) 3,128 106,476 Acquisition related costs - 6,951 - 6,951 Net loss (gain) on disposal of assets (80) 11 (1,084) 69 1 (1,083) Income from operations 68,383 62,702 (3,661) 139 (3,126) 124,437 Interest income (expense), net and other (1,778) (4,016) (943) 155 6,154 (428) Income before income taxes 66,605 58,686 (4,604) 294 3,028 124,009 Provision for income taxes 16,218 14,490 (1,670) 148 247 29,433 Net income$ 50,387 $ 44,196 $ (2,934) $ 146 $ 2,781 $ 94,576 25
-------------------------------------------------------------------------------- Net sales increased 42.0% to$493.6 million from$347.6 million primarily driven by the four product price increases we implemented in 2021 to offset rising raw material costs. Wood construction product sales, including sales of connectors, truss plates, fastening systems, fasteners and shearwalls, represented 88% and 87% of the Company's total sales in both the first quarters of 2022 and 2021, respectively. Concrete construction product sales, including sales of adhesives, chemicals, mechanical anchors, powder actuated tools and reinforcing fiber materials, represented 12% and 13% of the Company's total sales in both the first quarters of 2022 and 2021, respectively. Gross profit increased 45.9% to$236.8 million from$162.3 million . Gross margins increased to 48.0% from 46.7%, primarily due to product price increases contributing to lower costs, each as a percentage of sales, in warehouse/freight, factory & tooling, and labor costs, which were negatively offset by higher raw material costs. Gross margins increased to 48.1% from 46.6% for wood construction products and increased to 46.9% from 42.5% for concrete construction products, respectively.
Research and development and engineering expense increased 8.7% to
Selling expense increased 19.5% to$36.8 million from$30.8 million , primarily due to increases of$2.4 million in travel related costs,$1.6 million in personnel costs,$0.9 million in advertising & trade shows, and$0.6 million in cash profit sharing expense. General and administrative expense increased 10.7% to$53.8 million from$48.6 million , primarily due to increases of$3.5 million in professional fees,$2.6 million in personnel costs,$0.4 in travel related costs, and$0.3 million in cash profit sharing expense, offset by a decrease of$1.9 million in stock-based compensation expense.
Our effective income tax rate decreased to 23.7% from 24.3%.
Consolidated net income was
Net sales
The following table shows net sales by segment for the three months ended
North Asia/
(in thousands) America Europe Pacific Total
Three months ended
March 31, 2021 $ 300,564 $ 44,296 $ 2,782 $ 347,642
March 31, 2022 438,731 51,451 3,388 493,570
Increase $ 138,167 $ 7,155 $ 606 $ 145,928
Percentage increase 46.0 % 16.2 % 21.8 % 42.0 %
The following table shows segment net sales as percentages of total net sales
for the three months ended
North Asia/
America Europe Pacific Total
Percentage of total 2021 net sales 87 % 13 % - %
100 %
Percentage of total 2022 net sales 89 % 10 % 1 % 100 %
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Gross profit
The following table shows gross profit by segment for the three months ended
North Asia/ Admin &
(in thousands) America Europe Pacific All Other Total
Three months ended
March 31, 2021 $145,830 $15,250 $1,244 $(42) $162,282
March 31, 2022 217,919 17,453 1,448 (39) 236,781
Increase $72,089 $2,203 $204 $3 $74,499
Percentage Increase 49.4 % 14.4 % * * 45.9 %
* The statistic is not meaningful or material.
The following table shows gross margin by segment for the three months ended
North Asia/ Admin &
America Europe Pacific All Other Total
2021 gross margin percentage 48.5 % 34.4 % 44.7 % * 46.7 %
2022 gross margin percentage 49.7 % 33.9 % 42.7 % * 48.0 %
* The statistic is not meaningful or material.
•Net sales increased 46.0%,primarily due to product price increases throughout
2021 in an effort to offset rising raw material costs.
•Gross margin increased to 49.7% from 48.5%, primarily due to product price increases throughout 2021, contributing to lower costs, each as a percentage of sales, in warehouse/freight, factory & tooling, and labor costs, which were negatively offset by higher raw material costs. •Research, development and engineering expenses increased 10.3%, primarily due to increases of$1.3 million in personnel costs and$0.9 million in professional fees, offset by$0.9 higher software development expenses capitalized. •Selling expense increased 22.5%, primarily due to increases of$2.2 million in travel-associated expenses,$1.8 million in personnel costs,$0.9 million in advertising & trade show costs,$0.6 million in cash profit sharing expense, offset by a decrease$0.3 million in stock-based compensation expense.
•General and administrative expense increased 6.8%, primarily due to increases
of
•Income from operations increased by
•Net sales increased 16.2%, primarily due to product price increases throughout
2021 in an effort to offset rising raw material costs, partly offset by the
negative effect of approximately
•Gross margin decreased slightly to 33.9% from 34.4%, primarily due to higher factory & tooling costs, as a percentage of net sales.
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•Income from operations decreased by $3.7 million , primarily due to professional
fees of $7.0 million associated with the ETANCO acquisition, offset by a $1.1
million gain on the sale of a property and increased gross profits.
•For information about the Company'sAsia/Pacific segment, please refer to the tables above setting forth changes in our operating results for the three months endedMarch 31, 2022 and 2021.
Effect of New Accounting Standards
See "Note 1 Basis of Presentation - Accounting Standards Not Yet Adopted " to the accompanying unaudited interim condensed consolidated financial statements.
Liquidity and Sources of Capital
OnMarch 30, 2022 , the Company entered into an Amended and Restated Credit Agreement. The Amended and Restated Credit Agreement provides for a 5-year revolving credit facility of$450.0 million , which includes a letter of credit-sub-facility up to$50.0 million , and for a 5-year term loan facility of$450.0 million . The Company borrowed$250.0 million , under the revolving credit facility and$450.0 million under the term loan facility to finance a portion of the purchase price of the Company's acquisition of ETANCO. Our principal uses of capital include the costs and expenses associated with our operations, including financing working capital requirements and continuing our capital allocation strategy, which includes supporting capital expenditures, paying cash dividends, repurchasing the Company's common stock, and financing other investment opportunities over the next twelve months. As ofMarch 31, 2022 , our cash and cash equivalents consisted of deposits and money market funds held with established national financial institutions. Cash and cash equivalents of$889.2 million are held in the local currencies of our foreign operations and could be subject to additional taxation if repatriated tothe United States . OnApril 1, 2022 , the Company used approximately$800 million of the funds held in our foreign operations to acquire ETANCO. The Company is maintaining a permanent reinvestment assertion on its foreign earnings relative to remaining cash held outsidethe United States .
The following table shows selected financial information as of
At March 31, At December 31, At March 31,
(in thousands) 2022 2021 2021
Cash and cash equivalents $ 984,372 $ 301,155 $ 257,428
Property, plant and equipment, net 265,675 259,869 255,684
Goodwill, intangible assets and other 169,474 170,309 165,918
Working capital less cash and cash
equivalents 496,659 453,078 336,759
The following table provides cash flow indicators for the three-month periods
ended
Three Months Ended
(in thousands) 2022 2021
Net cash provided by (used in):
Operating activities $ 44,679 $ 17,833
Investing activities (17,081) (15,729)
Financing activities $ 650,600 (15,422)
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. Our revenues are derived from manufacturing and sales of
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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 three months ended March 31, 2022 , operating activities provided
$44.7 million in cash and cash equivalents, as a result of $94.6 million from
net income and $14.9 million from non-cash 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 $64.8
million in the net change in operating assets and liabilities, including
increases of $89.8 million in trade accounts receivable, partly offset by
increases of $21.7 million in other current liabilities and $17.9 million in
trade accounts payable.
Cash used in investing activities of $17.1 million during the three months ended
March 31, 2022 was mainly for capital expenditures, offset by proceeds from the
sale of a property. Our capital spending for the three months ended March 31,
2021 and the three months ended March 31, 2022 was $10.5 million and $17.8
million , respectively, which was primarily used for a land purchase, machinery
and equipment purchases and software in development. Based on current
information and subject to future events and circumstances, total approved
capital spending for 2022, will be in the $65.0 million to $70.0 million range.
Capital spending will be dedicated to maintenance with the remainder focused on
growth to maximize efficiencies, expand our manufacturing footprint and invest
in our key growth initiatives. As part of the integration process for ETANCO,
Simpson management is in the process of assessing additional capital
expenditures in support of ETANCO's operations.
Cash provided by financing activities of $650.6 million during the three months
ended March 31, 2022 consisted primarily of $700.0 million loan proceeds used
for the acquisition of ETANCO, offset by $21.3 million used to repurchase
194,745 shares of common stock at an average price of $109.28 per share, $10.8
million used to pay dividends to our stockholders, $9.5 million used to pay
income taxes on behalf of the employees for shares withheld with respect to
their vested restricted stock units, and $6.8 million in bank fees paid in
connection with the Amended and Restated Credit Agreement.
On
During 2022, the Board also approved changing our capital return target to 35% of our free cash flow from 50%.
Since the beginning of 2019 to the quarter endedMarch 31, 2022 , we have returned$315.5 million to stockholders, which represents 67.7% of our free cash flow and over the same period the Company has repurchased over 2,442,456 shares of the Company's common stock, which represents approximately 5.4% of the outstanding shares of the Company's common stock at the start of 2019.
Off-Balance Sheet Arrangements
We did not have any off-balance sheet arrangements as of
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