Atkore Inc. (NYSE:ATKR) Q2 2024 Earnings Conference Call May 7, 2024 8:00 AM ET Company Participants Matthew Kline - VP, Treasury and IR Bill Waltz - President and CEO David Johnson - CFO Conference Call Participants Chris Moore - CJS Securities Andrew Kaplowitz - Citigroup Deane Dray - RBC Chris Dankert - Loop Capital Alex Rygiel - B. Riley Operator Good morning. My name is Pauly and I will be your conference operator today. At this time, I would like to welcome everyone to Atkore's Second Quarter Fiscal Y ...

Core Insights - Atkore Inc. reported quarterly earnings of $4.08 per share, exceeding the Zacks Consensus Estimate of $3.70 per share, but down from $4.87 per share a year ago, indicating a 16.1% year-over-year decline [1] - The company achieved an earnings surprise of 10.27% for the quarter, having surpassed consensus EPS estimates in all four of the last quarters [1] - Revenue for the quarter was $792.91 million, missing the Zacks Consensus Estimate by 1.55% and down from $895.93 million year-over-year, marking an 11.5% decline [1] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $4.74, with expected revenues of $983.2 million, and for the current fiscal year, the EPS estimate is $16.92 on revenues of $3.52 billion [4] - The stock's immediate price movement will largely depend on management's commentary during the earnings call [2] Industry Context - The Wire and Cable Products industry, to which Atkore belongs, is currently ranked in the top 1% of over 250 Zacks industries, suggesting strong performance potential [4] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked using tools like the Zacks Rank [3]

[Q2 2024 Performance Highlights](index=1&type=section&id=Atkore%20Inc.%20Announces%20Second%20Quarter%202024%20Results) Atkore Inc. reported a decline in Q2 2024 net sales, net income, and Adjusted EBITDA compared to the prior year Q2 2024 Key Financial Metrics (vs. Prior Year, in millions) | Metric | Q2 2024 | Change vs. Q2 2023 | % Change | | :--- | :--- | :--- | :--- | | Net Sales | $792.9 million | -$103.0 million | -11.5% | | Net Income | $138.0 million | -$36.2 million | -20.8% | | Adjusted EBITDA | $211.9 million | -$64.1 million | -23.2% | | Net Income per Diluted Share (GAAP) | $3.67 | -$0.64 | -14.8% | | Adjusted Net Income per Diluted Share | $4.08 | -$0.79 | -16.2% | - The Board of Directors declared a quarterly cash dividend of **$0.32 per share**, payable on May 31, 2024[1](index=1&type=chunk) [Management Commentary](index=1&type=section&id=Management%20Commentary) Management highlighted meeting sales and exceeding profit targets, with continued capital deployment despite a revised full-year outlook - CEO Bill Waltz noted that Q2 results met **Net Sales projections** and exceeded projections for **Adjusted EBITDA** and **Adjusted Diluted EPS**[2](index=2&type=chunk) - Organic volume was down **1%** for the second quarter but grew **6%** for the first half of the fiscal year[2](index=2&type=chunk) - The company continued its capital deployment by repurchasing **$59 million** in stock during Q2, totaling over **$150 million** year-to-date[2](index=2&type=chunk) - The full-year outlook was adjusted due to factors impacting HDPE and solar-related initiatives[2](index=2&type=chunk) [Financial Results Analysis](index=1&type=section&id=Financial%20Results%20Analysis) This section analyzes Atkore's consolidated and segment financial performance, highlighting revenue and profitability trends [Consolidated Results](index=1&type=section&id=Consolidated%20Results) Atkore's Q2 2024 consolidated net sales, net income, and Adjusted EBITDA declined year-over-year due to lower average selling prices - The decrease in net sales was primarily driven by a **$85.5 million** reduction from lower average selling prices, a **$10.8 million** impact from the economic value of solar tax credits, and a **$7.5 million** decrease from lower sales volume[3](index=3&type=chunk) - Gross profit decreased by **17.4%** to **$291.6 million**, with gross margin contracting to **36.8%** from **39.4%** in the prior-year period, as declines in selling prices outpaced the reduction in input costs[4](index=4&type=chunk) Q2 2024 Consolidated Financial Performance (vs. Q2 2023, in millions) | Metric | Q2 2024 | Q2 2023 | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Net Sales | $792.9M | $895.9M | -$103.0M | -11.5% | | Gross Profit | $291.6M | $352.9M | -$61.3M | -17.4% | | Net Income | $138.0M | $174.2M | -$36.2M | -20.8% | | Adjusted EBITDA | $211.9M | $276.0M | -$64.1M | -23.2% | | Diluted EPS (GAAP) | $3.67 | $4.31 | -$0.64 | -14.8% | | Adjusted Diluted EPS | $4.08 | $4.87 | -$0.79 | -16.2% | [Segment Performance](index=2&type=section&id=Segment%20Results) Both operating segments experienced year-over-year declines in Q2 2024, driven by price normalization and lower volumes [Electrical Segment](index=2&type=section&id=Electrical) The Electrical segment's net sales and Adjusted EBITDA decreased due to lower average selling prices outpacing input cost reductions Electrical Segment Q2 Performance (vs. Q2 2023, in millions) | Metric | Q2 2024 | Q2 2023 | % Change | | :--- | :--- | :--- | :--- | | Net Sales | $590.8M | $681.0M | -13.2% | | Adjusted EBITDA | $195.8M | $256.9M | -23.8% | | Adjusted EBITDA Margin | 33.1% | 37.7% | -4.6 p.p. | - The decrease in net sales was attributed to decreased average selling prices of **$87.1 million** and decreased sales volume of **$3.8 million**[5](index=5&type=chunk) [Safety & Infrastructure Segment](index=2&type=section&id=Safety%20%26%20Infrastructure) The Safety & Infrastructure segment's net sales and Adjusted EBITDA declined due to lower volumes and solar tax credit transfers Safety & Infrastructure Segment Q2 Performance (vs. Q2 2023, in millions) | Metric | Q2 2024 | Q2 2023 | % Change | | :--- | :--- | :--- | :--- | | Net Sales | $202.4M | $215.1M | -5.9% | | Adjusted EBITDA | $25.5M | $33.2M | -23.1% | | Adjusted EBITDA Margin | 12.6% | 15.4% | -2.8 p.p. | - The decrease in net sales was primarily due to lower volumes (**$3.7 million**) and the economic value of solar tax credits transferred to customers (**$10.8 million**), partially offset by increased average selling prices (**$1.6 million**)[7](index=7&type=chunk) [Liquidity & Capital Resources](index=2&type=section&id=Liquidity%20%26%20Capital%20Resources) Atkore continued capital returns through share repurchases and quarterly cash dividends to shareholders - The company repurchased **$59 million** in stock during Q2, bringing the fiscal year-to-date total to over **$150 million**[2](index=2&type=chunk) - The Board of Directors declared a quarterly cash dividend of **$0.32 per share** on January 30, 2024, and again on May 2, 2024[8](index=8&type=chunk)[9](index=9&type=chunk) [Full-Year 2024 Outlook](index=3&type=section&id=Full-Year%20Outlook) The company provides its adjusted fiscal year 2024 outlook, including projections for Adjusted EBITDA and Diluted EPS Adjusted Fiscal Year 2024 Outlook (in millions, except EPS) | Metric | Adjusted Outlook Range | | :--- | :--- | | Adjusted EBITDA | $850 million - $900 million | | Adjusted Net Income per Diluted Share | $16.00 - $17.00 | [Financial Statements](index=7&type=section&id=Financial%20Statements) This section presents the company's condensed consolidated financial statements: operations, balance sheets, and cash flows [Consolidated Statements of Operations](index=7&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS) The statement of operations for the three and six months ended March 29, 2024, shows a year-over-year decline in key metrics Six Months Ended Performance (vs. Prior Year, in thousands) | Metric (in thousands) | March 29, 2024 | March 31, 2023 | | :--- | :--- | :--- | | Net Sales | $1,591,392 | $1,729,755 | | Gross Profit | $582,115 | $687,235 | | Operating Income | $354,267 | $471,471 | | Net Income | $276,335 | $347,686 | | Diluted EPS | $7.28 | $8.52 | [Consolidated Balance Sheets](index=8&type=section&id=CONDENSED%20CONSOLIDATED%20BALANCE%20SHEETS) Atkore's total assets slightly increased, while total liabilities decreased, leading to a rise in total equity as of March 29, 2024 Key Balance Sheet Items (in thousands) | Account | March 29, 2024 | September 30, 2023 | | :--- | :--- | :--- | | Total Current Assets | $1,575,293 | $1,538,490 | | Total Assets | $3,014,728 | $2,935,009 | | Total Current Liabilities | $510,403 | $564,604 | | Long-term Debt | $763,762 | $762,687 | | Total Liabilities | $1,442,832 | $1,466,890 | | Total Equity | $1,571,896 | $1,468,119 | [Consolidated Statements of Cash Flows](index=9&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) Net cash from operating activities decreased, with significant cash used in investing and financing activities, primarily for stock repurchases Six Months Ended Cash Flow Summary (in thousands) | Activity | March 29, 2024 | March 31, 2023 | | :--- | :--- | :--- | | Net cash provided by operating activities | $245,323 | $403,396 | | Net cash used in investing activities | ($78,971) | ($156,074) | | Net cash used for financing activities | ($187,529) | ($284,262) | | **Free Cash Flow** | **$171,777** | **$330,706** | [Non-GAAP Reconciliations](index=11&type=section&id=Non-GAAP%20Reconciliations) This section provides detailed reconciliations of non-GAAP financial measures to their GAAP counterparts [Adjusted EBITDA Reconciliation](index=11&type=section&id=ADJUSTED%20EBITDA) This section reconciles GAAP Net Income to Adjusted EBITDA, showing the adjustments made for non-operating items Q2 Net Income to Adjusted EBITDA Reconciliation (in thousands) | Line Item | Q2 2024 | Q2 2023 | | :--- | :--- | :--- | | Net Income | $137,955 | $174,194 | | Interest expense, net | $8,321 | $8,475 | | Income tax expense | $31,804 | $53,364 | | Depreciation and amortization | $29,455 | $28,598 | | Stock-based compensation | $5,028 | $6,863 | | Other | ($649) | $4,547 | | **Adjusted EBITDA** | **$211,914** | **$276,041** | [Segment Information and Adjusted EBITDA Margin](index=12&type=section&id=SEGMENT%20INFORMATION) This table provides a detailed breakdown of Net Sales, Adjusted EBITDA, and Adjusted EBITDA Margin for each operating segment Q2 2024 Segment Performance (in thousands) | Segment | Net Sales | Adjusted EBITDA | Adjusted EBITDA Margin | | :--- | :--- | :--- | :--- | | Electrical | $590,820 | $195,752 | 33.1% | | Safety & Infrastructure | $202,419 | $25,529 | 12.6% | [Adjusted Net Income per Diluted Share Reconciliation](index=13&type=section&id=ADJUSTED%20NET%20INCOME%20PER%20DILUTED%20SHARE) This section reconciles GAAP Net Income to Adjusted Net Income and calculates the corresponding per-share figures Q2 Net Income to Adjusted Net Income Reconciliation (in thousands) | Line Item | Q2 2024 | Q2 2023 | | :--- | :--- | :--- | | Net Income | $137,955 | $174,194 | | Pre-tax adjustments | $18,310 | $25,929 | | Tax effect | ($4,578) | ($6,482) | | **Adjusted Net Income** | **$151,687** | **$193,641** | | **Net Income per Diluted Share** | **$3.67** | **$4.31** | | **Adjusted Net Income per Diluted Share** | **$4.08** | **$4.87** | [Net Debt Reconciliation](index=14&type=section&id=NET%20DEBT) The company calculates Net Debt by subtracting cash and cash equivalents from total long-term debt Net Debt Calculation as of March 29, 2024 (in thousands) | Line Item | Amount | | :--- | :--- | | Long-term debt | $763,762 | | Less: Cash and cash equivalents | $368,050 | | **Net debt** | **$395,712** | [Trailing Twelve Months (TTM) Adjusted EBITDA](index=14&type=section&id=TRAILING%20TWELVE%20MONTHS%20ADJUSTED%20EBITDA) This table details the calculation of Trailing Twelve Months (TTM) Adjusted EBITDA by summing the results of the last four quarters TTM Adjusted EBITDA Calculation (in thousands) | Period | Adjusted EBITDA | | :--- | :--- | | Q2 FY24 (ended Mar 29, 2024) | $211,914 | | Q1 FY24 (ended Dec 29, 2023) | $213,523 | | Q4 FY23 (ended Sep 30, 2023) | $231,978 | | Q3 FY23 (ended Jun 30, 2023) | $270,262 | | **TTM Total** | **$927,676** | [Other Information](index=3&type=section&id=Other%20Information) This section includes conference call details, forward-looking statements, and non-GAAP financial measure definitions [Conference Call Information](index=3&type=section&id=Conference%20Call%20Information) Atkore management scheduled a conference call to discuss financial results, with webcast and replay options available - A conference call to discuss financial results was scheduled for **May 7, 2024**, at **8 a.m. Eastern time**[9](index=9&type=chunk) - A webcast of the call and an online replay are available on the Investor Relations section of the Company's website[10](index=10&type=chunk) [Forward-Looking Statements & Risk Factors](index=4&type=section&id=Forward-Looking%20Statements) This section provides a standard safe harbor statement, outlining potential risk factors that could impact future performance - The press release contains forward-looking statements regarding financial outlook and future performance, which are subject to risks and uncertainties[11](index=11&type=chunk) - Key risk factors include general economic conditions, non-residential construction industry weakness, raw material price changes, intense competition, and changes in governmental regulations[12](index=12&type=chunk) [Non-GAAP Financial Measures Definitions](index=5&type=section&id=Non-GAAP%20Financial%20Information) The company explains its use of non-GAAP financial measures and provides specific definitions for key metrics - **Adjusted EBITDA** is defined as net income adjusted for items like taxes, interest, D&A, stock-based compensation, and other specific adjustments[17](index=17&type=chunk) - **Adjusted Net Income** is defined as net income excluding items such as stock-based compensation, intangible asset amortization, and their related tax effects[18](index=18&type=chunk) - **Free Cash Flow** is defined as net cash provided by operating activities less capital expenditures[21](index=21&type=chunk)

[PART I. FINANCIAL INFORMATION](index=4&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements) This section presents Atkore Inc.'s unaudited condensed consolidated financial statements for the quarter ended March 29, 2024, detailing financial performance, position, and cash flows [Condensed Consolidated Statements of Operations](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Atkore reported decreased net sales and net income for both the three and six months ended March 29, 2024, with diluted earnings per share also declining Consolidated Statements of Operations Highlights (in thousands, except per share data) | Metric | Three Months Ended March 29, 2024 | Three Months Ended March 31, 2023 | Six Months Ended March 29, 2024 | Six Months Ended March 31, 2023 | | :--- | :--- | :--- | :--- | :--- | | **Net sales** | $792,911 | $895,934 | $1,591,392 | $1,729,755 | | **Gross profit** | $291,575 | $352,882 | $582,115 | $687,235 | | **Operating income** | $178,810 | $239,891 | $354,267 | $471,471 | | **Net income** | $137,955 | $174,194 | $276,335 | $347,686 | | **Diluted EPS** | $3.67 | $4.31 | $7.28 | $8.52 | [Condensed Consolidated Statements of Comprehensive Income](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income) Comprehensive income decreased for both the three and six months ended March 29, 2024, primarily due to lower net income and negative foreign currency translation adjustments Consolidated Statements of Comprehensive Income (in thousands) | Metric | Three Months Ended March 29, 2024 | Three Months Ended March 31, 2023 | Six Months Ended March 29, 2024 | Six Months Ended March 31, 2023 | | :--- | :--- | :--- | :--- | :--- | | **Net income** | $137,955 | $174,194 | $276,335 | $347,686 | | **Other comprehensive income (loss)** | $(4,872) | $2,663 | $4,908 | $13,987 | | **Comprehensive income** | $133,083 | $176,857 | $281,243 | $361,673 | [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of March 29, 2024, Atkore's total assets slightly increased, while total liabilities decreased, leading to an increase in total equity primarily driven by retained earnings Balance Sheet Highlights (in thousands) | Metric | March 29, 2024 | September 30, 2023 | | :--- | :--- | :--- | | **Total current assets** | $1,575,293 | $1,538,490 | | **Total Assets** | $3,014,728 | $2,935,009 | | **Total current liabilities** | $510,403 | $564,604 | | **Total Liabilities** | $1,442,832 | $1,466,890 | | **Total Equity** | $1,571,896 | $1,468,119 | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash provided by operating activities decreased for the six months ended March 29, 2024, while cash used in investing and financing activities also saw changes, resulting in a net decrease in cash and cash equivalents Cash Flow Summary (in thousands) | Activity | Six Months Ended March 29, 2024 | Six Months Ended March 31, 2023 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | $245,323 | $403,396 | | **Net cash used in investing activities** | $(78,971) | $(156,074) | | **Net cash used for financing activities** | $(187,529) | $(284,262) | | **Decrease in cash and cash equivalents** | $(20,064) | $(34,409) | | **Cash and cash equivalents at end of period** | $368,050 | $354,342 | [Condensed Consolidated Statement of Changes in Shareholders' Equity](index=8&type=section&id=Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Shareholders%27%20Equity) Shareholders' equity increased as of March 29, 2024, primarily due to net income, partially offset by common stock repurchases and dividends paid - Key activities impacting equity in the first six months of fiscal 2024 include net income of **$276.3 million**, stock repurchases totaling **$156.6 million** (**$97.4M** in Q1, **$59.2M** in Q2), and the declaration of **$11.7 million** in dividends[23](index=23&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) The notes detail accounting policies, business segments, the impact of the Inflation Reduction Act on solar energy tax credits, and subsequent events including share repurchases and dividends - Atkore operates through two main segments: Electrical, which manufactures products for electrical power systems, and Safety & Infrastructure, which provides solutions like metal framing and perimeter security[29](index=29&type=chunk)[95](index=95&type=chunk) - Under the Inflation Reduction Act (IRA), the company began recognizing transferable solar energy tax credits in fiscal 2024. For the six months ended March 29, 2024, this resulted in a **$37.9 million** benefit to cost of sales and a **$30.0 million** reduction in revenue due to sharing the economic value with customers. All related activity is within the Safety & Infrastructure segment[40](index=40&type=chunk)[41](index=41&type=chunk)[44](index=44&type=chunk) - The company's debt as of March 29, 2024, totaled **$763.8 million**, consisting primarily of a Senior Secured Term Loan due 2028 and Senior Notes due 2031[77](index=77&type=chunk) - Subsequent to the quarter's end, the company repurchased an additional **204.8 thousand shares** for **$36.1 million**. On May 2, 2024, the board declared a quarterly cash dividend of **$0.32 per share**[105](index=105&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=24&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's financial performance, highlighting decreased net sales due to pricing normalization and solar energy tax credits, lower segment Adjusted EBITDA, and strong liquidity [Results of Operations](index=24&type=section&id=Results%20of%20Operations) Net sales and gross profit decreased for both the three and six months ended March 29, 2024, primarily driven by lower average selling prices and the impact of solar energy tax credits Q2 2024 vs Q2 2023 Operations (in thousands) | Metric | Q2 2024 | Q2 2023 | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | **Net sales** | $792,911 | $895,934 | $(103,023) | (11.5)% | | **Gross profit** | $291,575 | $352,882 | $(61,307) | (17.4)% | | **Operating income** | $178,810 | $239,891 | $(61,081) | (25.5)% | | **Net income** | $137,955 | $174,194 | $(36,239) | (20.8)% | Drivers of Net Sales Change (Q2 2024 vs Q2 2023) | Driver | % Change | | :--- | :--- | | Volume | (0.8)% | | Average selling prices | (9.5)% | | Solar energy tax credits | (1.2)% | | **Total Net Sales** | **(11.5)%** | Six-Month 2024 vs 2023 Operations (in thousands) | Metric | 6M 2024 | 6M 2023 | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | **Net sales** | $1,591,392 | $1,729,755 | $(138,363) | (8.0)% | | **Gross profit** | $582,115 | $687,235 | $(105,120) | (15.3)% | | **Operating income** | $354,267 | $471,471 | $(117,204) | (24.9)% | | **Net income** | $276,335 | $347,686 | $(71,351) | (20.5)% | [Segment Results](index=26&type=section&id=Segment%20Results) Both the Electrical and Safety & Infrastructure segments experienced declines in net sales and Adjusted EBITDA for Q2 2024 and the six-month period, driven by lower pricing, solar tax credits, and reduced volumes Electrical Segment Performance (Q2 2024 vs Q2 2023) | Metric | Q2 2024 | Q2 2023 | % Change | | :--- | :--- | :--- | :--- | | **Net sales** | $590.8M | $681.0M | (13.2)% | | **Adjusted EBITDA** | $195.8M | $256.9M | (23.8)% | | **Adjusted EBITDA margin** | 33.1% | 37.7% | -4.6 p.p. | Safety & Infrastructure Segment Performance (Q2 2024 vs Q2 2023) | Metric | Q2 2024 | Q2 2023 | % Change | | :--- | :--- | :--- | :--- | | **Net sales** | $202.4M | $215.1M | (5.9)% | | **Adjusted EBITDA** | $25.5M | $33.2M | (23.1)% | | **Adjusted EBITDA margin** | 12.6% | 15.4% | -2.8 p.p. | [Liquidity and Capital Resources](index=30&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains strong liquidity with substantial cash and available credit, despite a decrease in cash provided by operating activities primarily due to lower operating income and increased working capital usage - The company believes it has sufficient liquidity, with **$368.1 million** in cash and cash equivalents as of March 29, 2024[138](index=138&type=chunk) - Atkore has an asset-based credit facility (ABL) with **$325.0 million** capacity. As of March 29, 2024, there were no outstanding borrowings, and approximately **$322.4 million** was available[139](index=139&type=chunk) Cash Flow Summary (Six Months Ended) | Activity (in thousands) | March 29, 2024 | March 31, 2023 | | :--- | :--- | :--- | | **Operating activities** | $245,323 | $403,396 | | **Investing activities** | $(78,971) | $(156,074) | | **Financing activities** | $(187,529) | $(284,262) | - The decrease in cash from operations was primarily due to lower operating income and a **$58.0 million** increase in cash used for working capital[145](index=145&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=34&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) There have been no material changes to the company's quantitative and qualitative disclosures regarding market risks since its last Annual Report on Form 10-K - There have been no material changes to market risk disclosures from the most recent Form 10-K[157](index=157&type=chunk) [Controls and Procedures](index=34&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of March 29, 2024, with no material changes to internal control over financial reporting during the quarter - The CEO and CFO concluded that disclosure controls and procedures were effective as of the end of the reporting period[159](index=159&type=chunk) - No changes in internal control over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, internal controls[159](index=159&type=chunk) [PART II. OTHER INFORMATION](index=35&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Legal Proceedings](index=35&type=section&id=Item%201.%20Legal%20Proceedings) The company is subject to various legal claims in the ordinary course of business, with historical 'Special Products Claims' resolved by indemnification from Johnson Controls, Inc., and no expected material adverse effects from current proceedings - The company is indemnified by Johnson Controls, Inc. (JCI) for "Special Products Claims" related to its previously manufactured anti-microbial coated steel sprinkler pipe[88](index=88&type=chunk) - As of the filing date, no Special Product Claims are pending against the company, as JCI has resolved all claims at its own expense[89](index=89&type=chunk) - Management does not believe that any existing legal proceedings will have a material adverse effect on the company's business, financial condition, or results of operations[91](index=91&type=chunk) [Risk Factors](index=35&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K - There have been no material changes to the risk factors from the most recent Form 10-K[161](index=161&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=35&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company continued its share repurchase program, utilizing a portion of its authorized funds during the second quarter of fiscal 2024, with a significant amount remaining available for future repurchases - The board of directors has authorized a total of **$1.3 billion** for the share repurchase program. As of March 29, 2024, **$153.1 million** remained available under this authorization[161](index=161&type=chunk) Issuer Purchases of Equity Securities (Q2 2024) | Period | Total Shares Purchased (thousands) | Avg Price Paid Per Share | | :--- | :--- | :--- | | Dec 30, 2023 to Jan 26, 2024 | 137 | $153.43 | | Jan 27, 2024 to Mar 1, 2024 | 185 | $147.98 | | Mar 2, 2024 to Mar 29, 2024 | 67 | $166.85 | | **Total** | **389** | **N/A** | [Defaults Upon Senior Securities](index=35&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This section is not applicable for the current reporting period - Not applicable[163](index=163&type=chunk) [Mine Safety Disclosures](index=35&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section is not applicable for the current reporting period - Not applicable[164](index=164&type=chunk) [Other Information](index=35&type=section&id=Item%205.%20Other%20Information) The company disclosed a new Rule 10b5-1 trading arrangement initiated by a segment President for the potential sale of company shares - Mark Lamps, President, Safety & Infrastructure, initiated a new 10b5-1 trading arrangement on February 13, 2024, for the potential sale of **2,000 shares**[165](index=165&type=chunk) [Exhibits](index=37&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including CEO and CFO certifications and XBRL data files - Exhibits filed include CEO and CFO certifications pursuant to Sarbanes-Oxley Act Sections 302 and 906, and XBRL interactive data files[167](index=167&type=chunk)

Core Viewpoint - Increased volatility on Wall Street presents potential investment opportunities in small-cap stocks, particularly those in the Russell 2000 index, which are often undervalued and under-researched [1][2]. Group 1: Atkore (ATKR) - Atkore provides electrical, safety, and infrastructure solutions, with a strong market presence in electrical and cable management [3]. - The company reported a 4.2% year-over-year decline in net revenue for Q1 2024, totaling $798.5 million, but still exceeded market expectations [3][4]. - Adjusted net earnings per share (EPS) decreased by 10.6% to $4.12, while management raised the fiscal 2024 adjusted EPS outlook to between $16.50 and $17.50 [4]. - ATKR stock has gained 15% year-to-date and is currently priced at 10.6 times forward earnings, with a 12-month price target of $200, indicating a potential upside of nearly 10% [4]. Group 2: Matador Resources (MTDR) - Matador Resources specializes in shale oil, focusing on the liquids-rich portions of the Wolfcamp and Bone Spring formations in the Delaware Basin [6]. - The company reported total revenue of $787.7 million for Q1 2024, a 40.5% year-over-year increase, with adjusted net income rising 14.6% to $206.2 million [6][7]. - Matador's production averaged over 149,700 barrels of oil equivalent (BOE) per day, with a bullish production outlook for 2024 projecting an average of 153,000 to 159,000 BOE [7]. - Despite a 15% year-to-date increase in MTDR stock, it remains undervalued at 8.1 times forward earnings compared to the energy sector average of over 10 times, with a median 12-month price target of $77, suggesting a potential 16% upside [7]. Group 3: iShares Russell 2000 ETF (IWM) - The iShares Russell 2000 ETF tracks the Russell 2000 Index, providing exposure to U.S. small-cap stocks and holds approximately $59 billion in assets [8][9]. - The leading sectors in the fund include Industrials (17.6%), Financials (16%), Information Technology (14.8%), Health Care (14.8%), and Consumer Discretionary (10.5%) [8]. - IWM has traded flat since the beginning of the year, with trailing price-to-earnings (P/E) and price-to-book (P/B) ratios of 15.54x and 1.9x, respectively, and a current dividend yield of 1.3% [9].

Group 1: Market Overview - Investors are encouraged to focus on Russell 2000 stocks with strong buy ratings, as they typically have lower valuations compared to large-cap stocks like FAANG and the Nasdaq composite [1] - Small-cap stocks in the Russell 2000 index are often overlooked but present attractive opportunities for those seeking undervalued companies with growth potential [1] - Small-cap companies generally have more room for growth due to being earlier in their life cycle compared to large, mature corporations, leading to higher revenue and earnings growth rates [1] Group 2: Company Analysis - Lantheus Holdings (LNTH) - Lantheus Holdings reported total revenues of $1.3 billion for 2023, marking a 39% year-over-year growth, driven by products PYLARIFY and DEFINITY, which saw increases of 61% and 14% respectively [2] - The company has positive Phase 3 results for PNT2002 in treating metastatic castration-resistant prostate cancer and has filed for PNT2003 to treat neuroendocrine tumors [2] - Analysts have a moderate buy consensus for LNTH with a price target range of $82 to $127, suggesting a potential upside of approximately 74.3% from its current price [2] Group 3: Company Analysis - Chart Industries (GTLS) - Chart Industries anticipates significant growth for 2024, forecasting sales to rise by 28% to 37% and adjusted EBITDA to grow by 52% to 68% [4] - The company ended 2023 with $130 million generated from operations in Q4 and improved its net leverage ratio from 4.08 in Q1 to 3.35 by year-end [4] - GTLS aims for a mid-2024 net leverage ratio target of 2.5 to 2.9, with a long-term goal of achieving a range of 2 to 2.5 [4] Group 4: Company Analysis - Atkore (ATKR) - Atkore experienced a 4.2% decrease in net sales in Q1 2024 compared to the previous year, totaling $798.5 million, attributed to lower average selling prices and the economic value of solar tax credits [5] - The company projects an average revenue growth of 3.7% per annum over the next three years, which is lower than the 7.8% growth forecast for the US electrical industry [5] - Atkore's P/E ratio of around nine times earnings is significantly lower than its peers, indicating potential undervaluation [6]

Group 1: Infrastructure Spending Trends - The combination of the $1 trillion U.S. infrastructure bill and global infrastructure needs will lead to ongoing spending, benefiting companies involved in this sector [1] - The electrification trend globally will increase demand for copper, which is essential for infrastructure projects like electric vehicles and renewable energy [4][5] Group 2: Company Insights - Trimble - Trimble is transforming infrastructure management through positioning and workflow technology, enhancing decision-making and reducing waste [2] - The shift towards software and services is improving Trimble's profit margins and cash flow potential, with a projected mid-teens growth in annualized recurring revenue (ARR) [3] Group 3: Company Insights - Freeport-McMoRan - Freeport-McMoRan is well-positioned to meet the increasing demand for copper due to its expansion projects and low-cost production capabilities [5] - The company is expected to benefit from rising copper prices driven by infrastructure spending and electrification trends [5] Group 4: Company Insights - Atkore - Atkore's revenue is influenced by raw material prices, with significant fluctuations observed in recent years [6] - Despite a decline in EBITDA due to falling prices, improvements in sales volumes and cost management indicate potential for future earnings growth [6][7] - Rising infrastructure spending is expected to positively impact Atkore's sales volumes, suggesting a favorable outlook for the company's earnings [7]

CLEVELAND--(BUSINESS WIRE)--Ohio-based Ancora Holdings Group, LLC, its affiliates and the other participants in its solicitation (collectively, the “Investor Group” or “we”), who collectively own a large equity stake in Norfolk Southern Corporation (NYSE: NSC) (“Norfolk Southern” or the “Company”), today announced the nomination of eight highly qualified, independent candidates (the “Investor Slate”) for election to the Company’s Board of Directors (the “Board”) at the 2024 Annual Meeting of Shareholders (t ...

HARVEY, Ill.--(BUSINESS WIRE)--Atkore Inc. (the “Company”) (NYSE: ATKR), a leading manufacturer of electrical products for commercial, industrial, data center, telecommunications, and solar applications, today announced that it will participate in the following upcoming conferences: Citi’s Global Industrial Tech and Mobility Conference, February 20, 2024, Miami – Bill Waltz, President and Chief Executive Officer, and David Johnson, Chief Financial Officer, are scheduled to participate in a fireside chat a ...

HARVEY, Ill.--(BUSINESS WIRE)--Atkore Inc. (the “Company” or “Atkore”) (NYSE: ATKR) today announced that John Deitzer has moved into the role of Vice President of Finance - Electrical and Matthew (Matt) Kline has moved into the role of Vice President of Treasury and Investor Relations. Mr. Deitzer and Mr. Kline are transferring roles within Atkore, and each will continue to report directly to David Johnson, Atkore’s Chief Financial Officer and Chief Accounting Officer. “In John and Matt, we are fortunate ...