To our stockholders, customers and employees:

For more than 67 years, Simpson Strong-Tie has dedicated itself to our company mission of helping people design and build safer, stronger structures.

This mission aligns with our strong business model, which is anchored in values of innovation, quality, service and community. The model comprises several enduring commitments: to a diverse and growing portfolio of product and software solutions; to strong, longstanding relationships with our customers and partners; to rigorous research, innovation and testing; to best-in-class field support, expertise and customer training; to industry- leading product availability and delivery; and to supporting and developing the construction industry and our communities. This approach drives our business growth and continues to cement our market leadership position.

Commitments must inspire action to be effective, and none of our achievements would have been possible without the passion, creativity and initiative of our world-class employees. Our people are truly the “secret sauce” of our success.

Financial and Operational Execution

Despite a lower number of housing starts across the US, our industry position and growth strategies continued to deliver above-market growth and strong profitability in 2023, with $2.2 billion in annual net sales, a 21.5% operating income margin and $8.26 of earnings per diluted share.

These sales achievements were reflected in share gains across all our product lines and end markets. The ongoing integration of ETANCO — along with their consistently high performance — has strengthened our European operations and improved our competitive position there.

We continue to actively pursue the Company Ambitions we unveiled in 2021:

1. Strengthening our values-based culture

2. Being the partner of choice

3. Being an innovative leader in the markets where we operate

4. Above-market growth relative to US housing starts

5. Operating income margin within the top quartile of our proxy peers

6. Integrating ETANCO and returning our return on invested capital (ROIC)1 to be within the top quartile of our proxy peers

In addition to advancing our financial ambitions as reflected in our strong performance, we launched more products in 2023 than ever before. This demonstrates our commitment to innovation and our dedication to meeting customer needs as they evolve across our five end-use markets. To achieve our ambition to be the partner of choice, for which we were rewarded with multiple supplier-of-the-year awards, we opened several new warehouse, training and distribution hubs in the US, greatly expanding the range of products available for next-day delivery. Most vitally, we’ve continued to strengthen our values-based company culture by expanding employee development and recognition efforts, further engaging the next level of leadership and finding more ways to have consistent, transparent communication with all employees.

Capital Investments, Stockholder Value

We generated cash flow from operations of $429.6 million in 2023, enabling significant investments to boost efficiencies, drive productivity, expand our salesforce and enhance our service levels in support of continued growth. Additionally, we are expanding our branch in Columbus, Ohio, and are in the early construction phases with a new fastener manufacturing facility in Gallatin, Tennessee. We’ve also utilized cash flow to continue repaying debt incurred for the ETANCO acquisition. Our robust cash flow further enables us to continue returning capital to stockholders via $45.5 million in quarterly cash dividends and the repurchase of $50 million of common stock in 2023. Over the past three years, we've paid $130.7 million in dividends and repurchased $152.7 million of our common stock, resulting in approximately 36.2% of free cash flow returned to our stockholders.
Further, our solid operational execution and returns to stockholders helped us achieve a strong ROIC(1) of 17.2% for the 2023 fiscal year.

Board of Directors Transition

There will be a transition on our Board of Directors during 2024, as two members, Jennifer Chatman and Robin MacGillivray, will retire after 20 years of service. We thank them for their insight and commitment, and wish them the best in their ensuing chapters. In anticipation of their retirement, we welcomed Chau Banks and Felica Coney to our board in 2023.

Building a Healthy, Equitable and Sustainable Future

Three of the core Company Values we inherited from our founder, Barclay Simpson, are Everybody Matters, Enable Growth and Give Back. We take these principles seriously. We strive to ensure our business culture and practices promote health and safety; diversity, equity, and inclusion (DEi); and a rewarding work environment for our employees across the globe. The chief public measure of these commitments is our Environmental, Social, and Governance (ESG) Report, published annually since 2021 with new goals and metrics accompanied by a new microsite in 2023. Beyond the report, we've adopted an explicit and comprehensive company Environmental, Health, and Safety policy. We've also developed a competency program to provide resources for employees interested in advancing their careers with the company. Additionally, we work to strengthen the social and economic future by supporting efforts to train and develop new generations of workers in the construction trades, through our partnership with Building Talent Foundation, Habitat for Humanity and other organizations.

On behalf of everyone at Simpson Manufacturing, we thank all our loyal customers, employees, suppliers and stockholders for your enduring support.

Sincerely,

Michael L. Olosky

President and Chief Executive Officer

James Andrasick

Non-Executive Chairman of the Board of Directors

1When referred to above, the Company’s return on invested capital (ROIC) for a fiscal year is calculated based on (i) the net income of that year, as presented in the Company’s consolidated statements of operations prepared pursuant to generally accepted accounting principles (GAAP) in the US, as divided by (ii) the average of the sum of total stockholders’ equity and total long-term debt at the beginning of and at the end of such year, as presented in the Company’s consolidated balance sheets prepared pursuant to GAAP for that applicable year. As such, the Company’s ROIC, a ratio or statistical measure, is calculated using exclusively GAAP financial measures.