Call Start: 08:00 January 1, 0000 8:45 AM ET Atkore Inc. (NYSE:ATKR) Q3 2024 Earnings Conference Call August 6, 2024 08:00 ET Company Participants Matthew Kline - Vice President of Treasury & Investor Relations Bill Waltz - President & Chief Executive Officer David Johnson - Chief Financial Officer Conference Call Participants Andrew Kaplowitz - Citigroup Alex Rygiel - B. Riley Deane Dray - RBC Chris Moore - CJS Securities Chris Dankert - Loop Capital Operator Good morning. My name is Mark and I will be you ...

Atkore Inc. (ATKR) came out with quarterly earnings of $3.80 per share, missing the Zacks Consensus Estimate of $4.03 per share. This compares to earnings of $5.72 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of -5.71%. A quarter ago, it was expected that this company would post earnings of $3.70 per share when it actually produced earnings of $4.08, delivering a surprise of 10.27%.Over the last four quarters, the company has ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ________________________________________ _____________________ FORM 10-Q _________________________________________ ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 28, 2024 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 001-37793 _____________________________ ...

Part I [Financial Highlights](index=1&type=section&id=Financial%20Highlights) Atkore's Q3 2024 financial results show a 10.5% net sales decrease to $822.4 million, a 38.7% net income drop to $123.4 million, and a 23.7% Adjusted EBITDA decline to $206.1 million, leading to a revised full-year outlook Financial Highlights Summary | Metric | Q3 2024 (in millions) | Q3 2023 (in millions) | % Change | | :--- | :--- | :--- | :--- | | Net Sales | $822.4 | $919.1 | (10.5)% | | Net Income | $123.4 | $201.3 | (38.7)% | | Diluted EPS | $3.33 | $5.13 | (35.1)% | | Adjusted Diluted EPS | $3.80 | $5.72 | (33.6)% | | Adjusted EBITDA | $206.1 | $270.3 | (23.7)% | - The company's performance was impacted by a limited increase in demand from the summer construction season and a soft pricing environment in the Electrical business[2](index=2&type=chunk) - Capital allocation activities included repurchasing **$125 million** in shares and the Board of Directors declaring a quarterly cash dividend of **$0.32 per share**[1](index=1&type=chunk)[2](index=2&type=chunk) Full-Year 2024 Outlook | Full-Year 2024 Outlook | Adjusted Range (in millions) | | :--- | :--- | | Adjusted EBITDA | $772 - $782 | | Adjusted net income per diluted share | $14.30 - $14.52 | [Third Quarter 2024 Performance Analysis](index=1&type=section&id=Third%20Quarter%202024%20Performance%20Analysis) Q3 performance was marked by a significant decline in the Electrical segment due to lower prices and volume, offsetting growth in Safety & Infrastructure, resulting in a 20.3% gross profit decrease and margin contraction [Consolidated Results](index=2&type=section&id=Consolidated%20Results) Consolidated net sales decreased 10.5% to $822.4 million, primarily due to lower selling prices, leading to a 20.3% decline in gross profit and a 38.7% drop in net income - The decrease in net sales was primarily attributed to decreased average selling prices (**$87.5 million**), the increased economic value of solar tax credits transferred to customers (**$7.2 million**), and a slight decrease in sales volume (**$1.2 million**)[4](index=4&type=chunk) - Gross profit decreased mainly due to declines in average selling prices and increased freight costs, which were partially offset by the net benefit of solar credits and lower input costs[5](index=5&type=chunk) Earnings Per Share (Diluted) | Earnings Per Share (Diluted) | Q3 2024 | Q3 2023 | | :--- | :--- | :--- | | GAAP EPS | $3.33 | $5.13 | | Adjusted EPS | $3.80 | $5.72 | [Segment Results](index=2&type=section&id=Segment%20Results) The Electrical segment experienced a 14.1% net sales decline and a 31.5% Adjusted EBITDA drop, while the Safety & Infrastructure segment grew 1.6% in sales and 39.8% in Adjusted EBITDA due to higher volumes and solar tax credits - **Electrical Segment:** Net sales decreased by **$99.7 million** (14.1%) due to lower average selling prices (**$80.8 million**) and decreased sales volume (**$18.2 million**). Adjusted EBITDA margin contracted from **37.8%** to **30.1%**[6](index=6&type=chunk)[7](index=7&type=chunk) - **Safety & Infrastructure Segment:** Net sales increased by **$3.4 million** (1.6%) primarily due to higher volumes (**$17.0 million**). Adjusted EBITDA increased by **$8.5 million** (39.8%), with the margin expanding from **10.1%** to **13.8%**, largely due to higher sales volume and the increased net benefit of solar tax credits[8](index=8&type=chunk) [Capital Allocation and Outlook](index=4&type=section&id=Capital%20Allocation%20and%20Outlook) Atkore declared a $0.32 per share quarterly dividend and revised its full-year fiscal 2024 outlook, projecting Adjusted EBITDA between $772 million and $782 million and Adjusted EPS between $14.30 and $14.52 - On July 31, 2024, the Board of Directors declared a quarterly cash dividend of **$0.32 per share** of common stock, payable on August 30, 2024[1](index=1&type=chunk)[9](index=9&type=chunk) Full-Year 2024 Adjusted Outlook | Full-Year 2024 Adjusted Outlook | New Range (in millions) | | :--- | :--- | | Adjusted EBITDA | $772 - $782 | | Adjusted net income per diluted share | $14.30 - $14.52 | [Financial Statements](index=9&type=section&id=Financial%20Statements) This section presents unaudited condensed consolidated financial statements, highlighting year-over-year declines in net income and operating cash flow, a stable balance sheet with increased equity, and significant cash usage for share repurchases [Condensed Consolidated Statements of Operations](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) For Q3 2024, Atkore's Net Sales decreased to $822.4 million, Operating Income fell to $168.5 million, Net Income dropped to $123.4 million, and Diluted EPS declined to $3.33 Condensed Consolidated Statements of Operations (in thousands) | Metric | Three Months Ended June 28, 2024 | Three Months Ended June 30, 2023 | | :--- | :--- | :--- | | Net sales | $822,364 | $919,117 | | Gross profit | $279,655 | $350,801 | | Operating income | $168,452 | $232,590 | | Net income | $123,417 | $201,288 | | Diluted EPS | $3.33 | $5.13 | [Condensed Consolidated Balance Sheets](index=10&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 28, 2024, Atkore's total assets increased slightly to $2.96 billion, total liabilities decreased to $1.40 billion, and total equity rose to $1.56 billion, primarily driven by retained earnings Condensed Consolidated Balance Sheets (in thousands) | Metric | June 28, 2024 | September 30, 2023 | | :--- | :--- | :--- | | Total current assets | $1,520,254 | $1,538,490 | | Total Assets | $2,964,044 | $2,935,009 | | Total current liabilities | $465,836 | $564,604 | | Total Liabilities | $1,402,516 | $1,466,890 | | Total Equity | $1,561,528 | $1,468,119 | [Condensed Consolidated Statements of Cash Flows](index=11&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the nine months ended June 28, 2024, net cash from operations decreased to $350.0 million, with $281.0 million used for share repurchases and $23.2 million for dividends, resulting in free cash flow of $244.9 million Condensed Consolidated Statements of Cash Flows (in thousands) | Metric | Nine Months Ended June 28, 2024 | Nine Months Ended June 30, 2023 | | :--- | :--- | :--- | | Net cash provided by operating activities | $349,957 | $563,748 | | Net cash used in investing activities | ($110,677) | ($205,890) | | Net cash used for financing activities | ($324,595) | ($431,603) | | Decrease in cash and cash equivalents | ($84,457) | ($70,942) | - Significant cash uses in financing activities for the nine months ended June 28, 2024 included **$281.0 million** for common stock repurchases and **$23.2 million** for dividend payments[31](index=31&type=chunk) Free Cash Flow (in thousands) | Metric | Nine Months Ended June 28, 2024 | Nine Months Ended June 30, 2023 | | :--- | :--- | :--- | | Net cash provided by operating activities | $349,957 | $563,748 | | Capital expenditures | ($105,098) | ($122,535) | | **Free Cash Flow** | **$244,859** | **$441,213** | [Non-GAAP Financial Measures and Reconciliations](index=13&type=section&id=Non-GAAP%20Financial%20Measures%20and%20Reconciliations) This section reconciles non-GAAP measures, showing Q3 2024 Adjusted EBITDA of $206.1 million, Adjusted Net Income of $139.0 million, Adjusted Net Income per diluted share of $3.80, and net debt of $460.6 million [Adjusted EBITDA Reconciliation](index=13&type=section&id=Adjusted%20EBITDA%20Reconciliation) Q3 2024 Net Income of $123.4 million is reconciled to Adjusted EBITDA of $206.1 million, reflecting adjustments for interest, taxes, depreciation, amortization, and stock-based compensation Adjusted EBITDA Reconciliation (in thousands) | Metric | Three Months Ended June 28, 2024 | Three Months Ended June 30, 2023 | | :--- | :--- | :--- | | Net income | $123,417 | $201,288 | | Interest expense, net | $9,944 | $8,682 | | Income tax expense | $34,531 | $18,931 | | Depreciation and amortization | $29,932 | $30,105 | | Stock-based compensation | $4,488 | $5,966 | | Other | $3,813 | $5,289 | | **Adjusted EBITDA** | **$206,124** | **$270,262** | [Segment Information and Adjusted EBITDA Margin](index=14&type=section&id=Segment%20Information%20and%20Adjusted%20EBITDA%20Margin) In Q3 2024, the Electrical segment's Adjusted EBITDA was $182.6 million with a 30.1% margin, while Safety & Infrastructure's Adjusted EBITDA grew to $30.0 million with a 13.8% margin Q3 2024 Segment Performance (in thousands) | Segment | Net sales | Adjusted EBITDA | Adjusted EBITDA Margin | | :--- | :--- | :--- | :--- | | Electrical | $605,962 | $182,568 | 30.1% | | Safety & Infrastructure | $217,024 | $30,042 | 13.8% | [Adjusted Net Income Per Diluted Share Reconciliation](index=15&type=section&id=Adjusted%20Net%20Income%20Per%20Diluted%20Share%20Reconciliation) Atkore's Q3 2024 GAAP Net Income of $123.4 million is reconciled to an Adjusted Net Income of $139.0 million, resulting in an Adjusted Net Income per diluted share of $3.80 Adjusted Net Income Reconciliation (in thousands) | Metric | Three Months Ended June 28, 2024 | | :--- | :--- | | Net income | $123,417 | | Pre-tax adjustments | $20,838 | | Tax effect | ($5,210) | | **Adjusted net income** | **$139,046** | Adjusted Net Income Per Diluted Share | Per Diluted Share | Q3 2024 | Q3 2023 | | :--- | :--- | :--- | | Net income per diluted share | $3.33 | $5.13 | | Adjusted net income per diluted share | $3.80 | $5.72 | [Net Debt and Trailing Twelve Months (TTM) Adjusted EBITDA](index=16&type=section&id=Net%20Debt%20and%20Trailing%20Twelve%20Months%20%28TTM%29%20Adjusted%20EBITDA) As of June 28, 2024, Atkore's net debt stood at $460.6 million, derived from $764.3 million in total debt and $303.7 million in cash, with TTM Adjusted EBITDA at $863.5 million Net Debt Calculation (in thousands) | Metric | June 28, 2024 | | :--- | :--- | | Total debt | $764,300 | | Less cash and cash equivalents | $303,657 | | **Net debt** | **$460,643** | - The Trailing Twelve Months (TTM) Adjusted EBITDA as of June 28, 2024 was **$863.5 million**[48](index=48&type=chunk) [Forward-Looking Statements](index=6&type=section&id=Forward-Looking%20Statements) This section includes standard legal disclaimers for forward-looking statements, cautioning that actual results may differ from projections due to various risks including economic conditions, industry performance, raw material prices, and competition - The report contains forward-looking statements concerning financial outlook which are not guarantees of future performance and are subject to known and unknown risks[12](index=12&type=chunk) - Key risk factors that could cause actual results to differ include: declines in general business and economic conditions, weakness in the U.S. non-residential construction industry, changes in raw material prices, and intense competition[13](index=13&type=chunk)

Investors in Atkore Inc. (ATKR) need to pay close attention to the stock based on moves in the options market lately. That is because the Oct 18, 2024 $100.00 Call had some of the highest implied volatility of all equity options today.What is Implied Volatility?Implied volatility shows how much movement the market is expecting in the future. Options with high levels of implied volatility suggest that investors in the underlying stocks are expecting a big move in one direction or the other. It could also mea ...

The market expects Atkore Inc. (ATKR) to deliver a year-over-year decline in earnings on lower revenues when it reports results for the quarter ended June 2024. This widely-known consensus outlook is important in assessing the company's earnings picture, but a powerful factor that might influence its near-term stock price is how the actual results compare to these estimates.The stock might move higher if these key numbers top expectations in the upcoming earnings report, which is expected to be released on ...

Looking for a stock that has been consistently beating earnings estimates and might be well positioned to keep the streak alive in its next quarterly report? Atkore Inc. (ATKR) , which belongs to the Zacks Wire and Cable Products industry, could be a great candidate to consider.This company has an established record of topping earnings estimates, especially when looking at the previous two reports. The company boasts an average surprise for the past two quarters of 13.33%.For the most recent quarter, Atkore ...

Company Overview - Atkore is a global manufacturer of electrical, safety, and infrastructural solutions, with approximately 75% of sales derived from electrical products, and over 90% when including support functions [3] - The company has experienced significant sales growth, from $1.7 billion a decade ago to $3.9 billion in 2022, with operating margins increasing from low single digits to 30% during the same period [4] Recent Performance - In fiscal 2023, Atkore reported revenues of $3.52 billion, a 10% decline from 2022, with operating profits down 28% to $893 million, resulting in earnings of approximately $17 per share [6] - The company has maintained a manageable net debt of $374 million, with EBITDA exceeding $1 billion, and operating margins still at 25% despite the decline in results [6] Market Trends - The company has faced a normalization in results, with first quarter sales down 4% to $799 million and EBITDA at $213 million, while operating profit margins were reported near 22% [7] - In the second quarter, revenues fell over 11% year-over-year to $793 million, with adjusted EBITDA remaining stable at $212 million, indicating ongoing pricing pressure [7] Future Outlook - Atkore has guided for flat results in 2024, projecting sales between $3.50 billion and $3.65 billion, with EBITDA expected between $900 million and $950 million, and earnings per share between $16 and $17 [6][7] - The company is trading at around 8 times earnings, with a potential revenue run rate of $3.0 billion to $3.5 billion, and management's focus on share buybacks supports a favorable risk/reward scenario [8]

The sales volumes of this electrical products company declined in its fiscal second quarter, but the stock still looks like a good value.Shares in electrical products company Atkore (ATKR -0.83%) declined by 8% in the week to 11 a.m. ET Friday. The decrease occurred in a week when the company reported disappointing second-quarter earnings.It's no secret that Atkore's sales will be challenged this year due to the price correction of commodities such as steel and PVC, which will lower prices. Just as Atkore b ...

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