Simpson Manufacturing Co., Inc. (NYSE:SSD) Q2 2023 Earnings Call Transcript

Michael Olosky: Yes. So they are fasteners business, Tim, has been a big growth driver for us. We continue to expand the top line and the margins in an area. We think we’ve got a differentiated product offering. And right now we make some of our products in our Gallatin facility today and we import from our products for that area as well. So the focus here is we want to localize more of our fastener production. We also want to vertically integrate more of our fastener production. We think that will better help us serve and support our customers. And then if you go back to some of our growth initiatives like mass timber, those tend to be projects you either get it or you don’t. And if you get it, you need to be able to respond quickly. So having production in the US, we believe will help us better respond to our customers in those areas as well.

Brian Magstadt: So, yes, and the total project cost or fine-tuning numbers and depends on land development, how far along a piece of property may be versus how quickly it can be developed on. About $100 million net of selling our existing facility. We’re a bit landlocked in our current site there. And to Mike’s point, being able to in-source more of the activities around getting raw wire into finished good. We’re going to be able to have on-site there. So $100 million and the outlay would be mostly ’24 and forward, ’24, ’25, a little bit this year. We would presume that we’re finding land, maybe starting to get that ready to build on. But the bulk of the spend would be in the next couple of years.

Timothy Wojs: Okay. Got you. And where is Columbus at?

Brian Magstadt: Columbus is still pretty early from an improvement perspective. We acquired adjacent land there that needed to be graded and we’re continuing to work that. So we’ve not spent a lot of money on that one yet. Still has been going through a lot of the permitting process, approval process. The land is getting ready to be able to get foundations in and get walls up and the like. So still pretty early in that process as well although we would expect through the balance of this year to be able to see some pretty good improvement in the project phases for that facility.

Timothy Wojs: Okay, good. Thanks for the time guys. Good luck on the rest of year.

Michael Olosky: Thanks, Tim.

Brian Magstadt: Thanks Tim.

Operator: Thank you. Our next question is from Kurt Yinger with D.A. Davidson. Please proceed with your question.

Kurt Yinger: Great. Thanks and good afternoon, Mike and Brian.

Michael Olosky: Hey, Kurt.

Kurt Yinger: Just two quick ones for me. I guess, first, I would just love to hear kind of your latest thinking on pricing environment and pricing risk. Are there any areas where you’re getting more pushback from customers or the competitive environment is getting to a point where you’re having to make any concessions or not so much?

Michael Olosky: So Kurt, we are actively managing and monitoring our pricing on a regular basis. But really, the emphasis on us is more in our business model, and that’s making sure that we’re investing in products that deliver value for our customers, driving innovation, providing exceptional service. Doing the training and all the things associated with that business model. We believe that, that business model helps us have a modest premium, key word here, again, modest, and we’re actively monitoring that pricing as we speak.

Kurt Yinger: Got it. Okay. Thanks for that. And then second, can you just talk a little bit more about the component manufacturer wins? I mean, presumably, that’s a tailwind to the trust plate business. And I’d just love to hear what’s kind of changed from a software perspective that’s maybe helped catalyze that?