Simpson Manufacturing Co., Inc.SSD

Simpson Manufacturing Co., Inc. Leases Disclosure

10-KFiled Feb 27, 20262 min read
Leases
The Company has operating leases for certain facilities, equipment and automobiles. The existing operating leases expire at various dates through 2039, some of which include options to extend the leases for up to five years. The Company measured the lease liability at the present value of the lease payments to be made over the lease term. The lease payments are discounted using the Company’s incremental borrowing rate. The Company measured the right-of-use (“ROU”) assets at the amount at which the lease liability is recognized plus initial direct costs incurred or prepayment amounts. The ROU assets are amortized on a straight-line basis over the lease term.

The following table provides a summary of operating leases included on the Consolidated Balance Sheets as of December 31, 2025, and 2024, and the Consolidated Statements of Operations, and the Consolidated Statements of Cash Flows for the years ended December 31, 2025 and 2024:
Consolidated Balance Sheets Line ItemAs of December 31,
(in thousands)20252024
Assets
Operating lease right-of-use assets$115,060 $93,933 
Liabilities
Accrued expenses and other current liabilities$20,253 $19,415 
Operating lease liabilities96,819 76,184 
Total operating lease liabilities$117,072 $95,599 

The components of operating lease expense were as follows:
Consolidated Statements of Operations Line Item
Years Ended December 31,
(in thousands)20252024
Lease cost
General administrative expenses and cost of sales
$25,869 $19,938 

Other information

Supplemental cash flow information related to leases is as follows:
Years Ended December 31,
(in thousands)20252024
Cash paid for amounts included in the measurement of lease liabilities:
   Operating cash flows for operating leases$24,830 $19,243 
Operating right-of-use assets obtained in exchange for new lease liabilities
   Operating leases$53,807 $46,482 

The following is a schedule, by years, of maturities for lease liabilities as of December 31, 2025:
(in thousands)Operating Leases
2026$25,321 
202724,197 
202821,320 
202917,567 
203014,087 
Thereafter36,629 
Total lease payments139,121 
Less: Present value discount and other(22,049)
     Total lease liabilities$117,072 
The following table summarizes the Company’s lease terms and discount rates as of December 31, 2025:
Years Ended December 31,
20252024
Weighted-average remaining lease terms (in years):
Operating leases6.86.4
Weighted-average discount rate:
Operating leases5.1%5.3%

In July 2025, the Company sold its existing facility in Gallatin, Tennessee for approximately $19.0 million in net proceeds after closing costs and sale price adjustments, which resulted in an estimated gain on disposal of fixed assets of $12.9 million. To provide a temporary transition until the Company relocates to the new facility, the Company is leasing back the sold facility from the buyer for approximately five months. The Company treated the leaseback transaction as a short-term lease and will recognize the rent expense on the straight-line basis over the lease term.

Historical Timeline

Fiscal YearFiled
2025Feb 27, 2026Showing above
2024Mar 3, 2025
2023Feb 28, 2024

About Leases Disclosures

Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.

Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.

Other Available Disclosures

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