Simpson Manufacturing Co., Inc. (NYSE:SSD) Q1 2022 Earnings Conference Call April 25, 2022 5:00 PM ET

Company Participants

Kim Orlando - ADDO Investor Relations

Karen Colonias - Chief Executive Officer

Brian Magstadt - Chief Financial Officer and Treasurer

Conference Call Participants

Daniel Moore - CJS Securities

Timothy Wojs - Robert W. Baird & Co

Kurt Yinger - D.A. Davidson

Julio Romero - Sidoti and Company

Operator

Greetings. And Welcome to Simpson Manufacturing Company Inc. First Quarter 2022 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation.

[Operator instructions] Please note, this conference is being recorded. I will now turn the conference over to your host, Kim Orlando with ADDO investor relations. Please go ahead.

Kim Orlando

Good afternoon, ladies and gentlemen, and welcome to Simpson Manufacturing Company's first quarter 2022 earnings conference call. Any statements made on this call that are not statements of historical fact are forward-looking statements. Such statements are based on certain estimates and expectations and are subject to a number of risks and uncertainties. Actual future results may vary materially from those expressed or implied by the forward-looking statements.

We encourage you to read the risks described in the company's public filings and reports which are available on the SEC's or the company's corporate website. Except to the extent required by applicable securities laws, we undertake no obligation to update or publicly revise any of the forward-looking statements that we may make here today whether as a result of new information, future events, or otherwise. Please note that the company's earnings press release was issued today at approximately 4:15 p.m. Eastern Time.

The earnings press release is available on the investor relations page of the company's website at ir.simpsonmfg.com. Today's call is being webcast, and a replay will also be available on the investor relations page of the company's website. Now I would like to turn the conference over to Karen Colonias, Simpson's Chief Executive Officer.

Karen Colonias

Thanks Kim and good afternoon, everyone. And thank you for joining us today. I'll begin with an overview of our first quarter financial results and performance drivers before turning to an update on our key growth initiatives, and capital allocation priorities. Brian will walk you through our financials and updated fiscal 2022 business outlook in greater detail. We delivered strong financial and operational performance in the first quarter. Net sales of $493.6 million increased 42% over the prior year period. Sales growth was primarily driven by the four product price increases we implemented in April, June, August and October of 2021 to offset rising raw material costs. The price increases ranged from mid-single digits to mid-teens, depending on the product mix of our wood connectors, fasteners and concrete products in the United States. While our sales benefited from higher volumes in our home center channel, which includes both our home center and co-op customers, and is where we see much of our repair and remodel and DIY business. This was offset by software volumes through our other distribution channels. As such volume was flat year-over-year. Our consolidated net sales in Europe for the first quarter grew 16.2% year-over-year also due primarily to product price increases in response to rising material costs through 2021. Our consolidated gross margin supported by our product price increases grew 130 basis points to 48% compared to 46.7% in the year ago period.