Atkore Inc. (NYSE:ATKR) Q1 2024 Earnings Conference Call February 1, 2024 8:00 AM ET Company Participants John Deitzer - VP, Treasury and IR Bill Waltz - President and CEO David Johnson - CFO Conference Call Participants Andy Kaplowitz - Citigroup Deane Dray - RBC Chris Moore - CJS Securities Alex Rygiel - B. Riley Chris Dankert - Loop Capital Operator Good morning. My name is Rob, and I will be your conference operator today. At this time, I would like to welcome everyone to Atkore's First Quarter Fiscal Y ...

Group 1: Earnings Performance - Atkore Inc. reported quarterly earnings of $4.12 per share, exceeding the Zacks Consensus Estimate of $3.54 per share, but down from $4.61 per share a year ago, representing an earnings surprise of 16.38% [1] - The company posted revenues of $798.48 million for the quarter, surpassing the Zacks Consensus Estimate by 3.62%, but down from $833.82 million year-over-year [1] Group 2: Market Performance and Outlook - Atkore Inc. shares have declined approximately 4.7% since the beginning of the year, while the S&P 500 has gained 1.6% [2] - The current consensus EPS estimate for the upcoming quarter is $4.16 on revenues of $893.5 million, and for the current fiscal year, it is $16.54 on revenues of $3.54 billion [4] Group 3: Industry Context - The Wire and Cable Products industry, to which Atkore belongs, is currently ranked in the bottom 22% of over 250 Zacks industries, indicating potential challenges ahead [4] - Another company in the same industry, Belden, is expected to report quarterly earnings on February 8, with a projected EPS of $1.12, reflecting a year-over-year decline of 36% [5]

PART I. FINANCIAL INFORMATION [Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements%20%28Unaudited%29) The unaudited financial statements for Q1 FY2024 show decreased net sales and net income, with stable assets and strong but lower operating cash flow [Condensed Consolidated Statements of Operations](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Net sales decreased 4.2% to $798.5 million, leading to a 24.2% drop in operating income and a 20.2% decline in net income Consolidated Statements of Operations Highlights (in thousands, except per share data) | Metric | Three months ended Dec 29, 2023 | Three months ended Dec 30, 2022 | YoY Change | | :--- | :--- | :--- | :--- | | **Net sales** | $798,481 | $833,821 | -4.2% | | **Gross profit** | $290,540 | $334,353 | -13.1% | | **Operating income** | $175,458 | $231,580 | -24.2% | | **Net income** | $138,381 | $173,492 | -20.2% | | **Diluted EPS** | $3.61 | $4.20 | -14.0% | [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets remained stable at $2.935 billion, with a slight decrease in liabilities and an increase in total equity Balance Sheet Summary (in thousands) | Account | Dec 29, 2023 | Sep 30, 2023 | | :--- | :--- | :--- | | **Cash and cash equivalents** | $380,922 | $388,114 | | **Total current assets** | $1,498,144 | $1,538,490 | | **Total Assets** | $2,935,392 | $2,935,009 | | **Total current liabilities** | $505,357 | $564,604 | | **Long-term debt** | $763,225 | $762,687 | | **Total Liabilities** | $1,433,047 | $1,466,890 | | **Total Equity** | $1,502,345 | $1,468,119 | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Operating cash flow decreased to $158.1 million, while investing activities used less cash due to lower acquisition spending Cash Flow Summary (in thousands) | Activity | Three months ended Dec 29, 2023 | Three months ended Dec 30, 2022 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | $158,106 | $198,851 | | **Net cash used in investing activities** | ($50,304) | ($117,187) | | **Net cash used for financing activities** | ($118,154) | ($164,831) | | **Decrease in cash and cash equivalents** | ($7,192) | ($80,924) | [Notes to Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Detailed notes cover accounting policies, segment performance, and the impact of solar tax credits, with no new acquisitions this quarter - The company operates through two main segments: - **Electrical:** Manufactures products for electrical power systems like conduit and cable, serving contractors via the wholesale channel - **Safety & Infrastructure:** Designs and manufactures solutions like metal framing, mechanical pipe, and perimeter security for critical infrastructure[27](index=27&type=chunk) - Under the Inflation Reduction Act (IRA), the company recognizes transferable solar tax credits, resulting in a **$14.9 million reduction to revenue** and a **$19.1 million benefit (reduction) to cost of sales** within the Safety & Infrastructure segment[35](index=35&type=chunk)[36](index=36&type=chunk)[37](index=37&type=chunk) - No acquisition activity occurred during the three months ended December 29, 2023, though the company paid out **$6.0 million** related to a prior-year acquisition[41](index=41&type=chunk) - Subsequent to the quarter's end, the company repurchased **148.4 thousand shares** for **$22.8 million** and declared a quarterly cash dividend of **$0.32 per share**[95](index=95&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=22&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses a 4.2% net sales decrease driven by lower prices despite higher volume, impacting net income and segment profitability [Results of Operations](index=22&type=section&id=RESULTS%20OF%20OPERATIONS) Net sales declined 4.2% due to lower prices, despite volume gains, resulting in reduced gross profit, operating income, and net income Drivers of Net Sales Change (YoY) | Driver | % Change | | :--- | :--- | | Volume | 12.6% | | Average selling prices | (15.5)% | | Solar tax credits | (1.8)% | | Foreign exchange | 0.2% | | Acquisitions | 0.3% | | **Total Net Sales** | **(4.2)%** | - The increase in Cost of Sales was primarily due to higher sales volume (**$72.7 million**) and freight costs (**$11.1 million**), partially offset by lower input costs for steel, copper, and PVC resin (**$62.3 million**) and the benefit of solar tax credits (**$19.1 million**)[104](index=104&type=chunk) - The effective income tax rate decreased to **17.5%** from **21.9%** in the prior year, mainly due to a larger excess tax benefit associated with stock compensation[106](index=106&type=chunk) [Segment Results](index=24&type=section&id=SEGMENT%20RESULTS) Electrical segment sales declined due to price drops, while Safety & Infrastructure sales grew on volume, but both saw EBITDA margins decrease Electrical Segment Performance (in thousands) | Metric | Q1 FY2024 | Q1 FY2023 | % Change | | :--- | :--- | :--- | :--- | | **Net sales** | $593,661 | $638,705 | (7.1)% | | **Adjusted EBITDA** | $204,360 | $243,836 | (16.2)% | | **Adjusted EBITDA margin** | 34.4% | 38.2% | -3.8 p.p. | Safety & Infrastructure Segment Performance (in thousands) | Metric | Q1 FY2024 | Q1 FY2023 | % Change | | :--- | :--- | :--- | :--- | | **Net sales** | $205,127 | $195,259 | 5.1% | | **Adjusted EBITDA** | $19,512 | $33,404 | (41.6)% | | **Adjusted EBITDA margin** | 9.5% | 17.1% | -7.6 p.p. | [Liquidity and Capital Resources](index=25&type=section&id=LIQUIDITY%20AND%20CAPITAL%20RESOURCES) The company maintains strong liquidity with **$380.9 million** in cash and full availability on its **$325 million** ABL credit facility - Cash and cash equivalents totaled **$380.9 million** as of December 29, 2023[115](index=115&type=chunk) - The company has access to an ABL Credit Facility with aggregate commitments of **$325.0 million**, with approximately **$322.4 million** available and no outstanding borrowings as of quarter-end[116](index=116&type=chunk) Summary of Cash Flows (in thousands) | Activity | Three months ended Dec 29, 2023 | Three months ended Dec 30, 2022 | | :--- | :--- | :--- | | **Operating activities** | $158,106 | $198,851 | | **Investing activities** | ($50,304) | ($117,187) | | **Financing activities** | ($118,154) | ($164,831) | [Quantitative and Qualitative Disclosures about Market Risk](index=29&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) No material changes to quantitative and qualitative market risk disclosures have occurred since the latest Annual Report on Form 10-K - There have been no material changes to the quantitative and qualitative disclosures about market risks previously disclosed in the Annual Report on Form 10-K[133](index=133&type=chunk) [Controls and Procedures](index=29&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls and procedures were effective, with no material changes to internal control over financial reporting - Based on an evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective as of the end of the period covered by the report[135](index=135&type=chunk) - There were no changes to the company's internal control over financial reporting during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, internal controls[135](index=135&type=chunk) PART II. OTHER INFORMATION [Legal Proceedings](index=30&type=section&id=Item%201.%20Legal%20Proceedings) The company refers to Note 14 for legal proceedings, noting no pending 'Special Products Claims' due to indemnification - The company refers to Note 14 of the financial statements for discussion of legal proceedings[137](index=137&type=chunk) - Historically, the company faced lawsuits related to anti-microbial coated steel sprinkler pipe ('Special Products Claims'), for which Johnson Controls, Inc. (formerly Tyco) indemnifies the company, with no such claims currently pending[77](index=77&type=chunk)[78](index=78&type=chunk) [Risk Factors](index=30&type=section&id=Item%201A.%20Risk%20Factors) No material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K have occurred - There have been no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K[137](index=137&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=30&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company repurchased **721,000 shares** under its **$1.3 billion** program, with **$212.7 million** remaining available - The board of directors has authorized a share repurchase program for up to **$1.3 billion** of its common stock, with **$212.7 million** remaining available as of December 29, 2023[137](index=137&type=chunk) Issuer Purchases of Equity Securities (Q1 FY2024) | Period | Total Shares Purchased (thousands) | Avg. Price Paid Per Share | | :--- | :--- | :--- | | Oct 28 - Dec 1, 2023 | 494 | $129.41 | | Dec 2 - Dec 29, 2023 | 227 | $143.12 | | **Total** | **721** | **N/A** | [Other Information](index=30&type=section&id=Item%205.%20Other%20Information) No directors or officers adopted or terminated Rule 10b5-1 trading arrangements during the quarter - During the quarter ended December 29, 2023, no trading arrangements were adopted or terminated by directors or officers of the Company[141](index=141&type=chunk) [Exhibits](index=32&type=section&id=Item%206.%20Exhibits) This section lists exhibits, including CEO and CFO certifications required by Sarbanes-Oxley Act and XBRL data files - The report includes required certifications from the CEO and CFO pursuant to Sarbanes-Oxley Act Sections 302 and 906[143](index=143&type=chunk) - Interactive Data Files (XBRL documents) are included as part of the filing[143](index=143&type=chunk)

HARVEY, Ill.--(BUSINESS WIRE)--Atkore Inc. (the “Company” or “Atkore”) (NYSE: ATKR) released its 2023 Sustainability Report today, detailing key highlights in the Company’s environment, social and governance (ESG) practices and performance. Additionally, the Company expanded the ESG content available on its website. Stakeholders can now browse foundational information on each of its material ESG topics, including climate, carbon, and Greenhouse Gas (GHG) emissions, health and safety, corporate governance, a ...

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 the Company will release its First Quarter Fiscal Year 2024 results before the market opens on Thursday, February 1, 2024. The Company will hold a conference call to discuss the results at 8:00 a.m. (ET) that same day. Interested investors and other parties can listen to a webcast of t ...

Core Insights - Atkore Inc. has committed to a three-year Premier Partner sponsorship with the National Electrical Contractors Association (NECA), starting January 1, 2024, to connect with leading companies in the electrical construction industry [1][2] - The partnership will focus on delivering educational programs, training resources, and industry insights to empower electrical contractors [2] - Atkore is recognized as a leading manufacturer of electrical products, with 5,600 employees and $3.5 billion in sales for fiscal year 2023, addressing the demands of electrification and digital transformation [3] Company Overview - Atkore Inc. specializes in manufacturing electrical products for various applications, including commercial, industrial, data center, telecommunications, and solar [3] - The company aims to provide sustainable solutions to meet the growing demands of the electrical industry [3] Industry Context - NECA represents thousands of electrical contractors, promoting high standards, safety, and quality workmanship within the electrical construction industry [4] - The partnership with Atkore is expected to enhance NECA's support for electrical contractors and contribute to the industry's growth [2]

Atkore Inc. (NYSE:ATKR) Q4 2023 Earnings Conference Call November 17, 2023 8:00 AM ET Company Participants John Deitzer - Vice President of Treasury and Investor Relations Bill Waltz - President and Chief Executive Officer David Johnson - Chief Financial Officer Conference Call Participants Alex Rygiel - B. Riley Deane Dray - RBC Andy Kaplowitz - Citigroup Chris Dankert - Loop Capital Chris Moore - CJS Securities Operator Good morning. My name is Krista, and I'll be your conference operator today. At this t ...

Fourth Quarter and Full Year 2023 Earnings Presentation and Business Update November 17, 2023 ...

Financial Performance - Net sales for fiscal 2023 decreased by $395.2 million to $3,518.8 million, a decline of 10.1% compared to $3,913.9 million in fiscal 2022[224] - The decrease in net sales was primarily due to lower average selling prices, which accounted for a reduction of $646.6 million, and the economic value of solar tax credits impacting sales by $30.4 million[224] - Net sales decreased by $338.7 million, or 11.2%, to $2,675.1 million for fiscal 2023 compared to $3,013.8 million for fiscal 2022, primarily due to lower average selling prices[231] - Adjusted EBITDA decreased by $268.6 million, or 21.1%, to $1,004.9 million for fiscal 2023 compared to $1,273.4 million for fiscal 2022[232] - Gross profit for fiscal 2023 was $1,339.5 million, a decrease of $300.5 million, or 18.3%, compared to $1,640.0 million for fiscal 2022[221] - Operating income fell by $340.3 million, or 27.6%, to $893.5 million for fiscal 2023, compared to $1,233.8 million for fiscal 2022[221] - Net income for fiscal 2023 was $689.9 million, a decrease of $223.5 million, or 24.5%, compared to $913.4 million for fiscal 2022[221] Expenses and Costs - Cost of sales decreased by $94.7 million, or 4.2%, to $2,179.3 million for fiscal 2023, primarily due to lower input costs of steel, copper, and PVC resin[225] - Selling, general and administrative expenses increased by $18.2 million, or 4.9%, to $388.2 million for fiscal 2023, driven by increased headcount and digital initiatives[225] - Intangible asset amortization expense rose by $21.6 million, or 59.8%, to $57.8 million for fiscal 2023, primarily due to acquisitions of definite-lived intangible assets[226] - Interest expense, net increased by $4.6 million, or 14.9%, to $35.2 million for fiscal 2023 compared to $30.7 million for fiscal 2022[227] Cash Flow and Investments - Cash and cash equivalents were $388.1 million as of September 30, 2023, a decrease of $0.6 million from the previous year, mainly due to acquisitions, capital expenditures, and share repurchases[253] - Operating activities provided $807.6 million of cash in fiscal 2023, an increase of $20.8 million or 2.6% compared to $786.8 million in fiscal 2022[263] - Cash used for investing activities decreased by $140.7 million to $302.2 million in fiscal 2023, primarily due to a reduction in cash used for acquisitions[264] - Cash used for financing activities was $506.8 million in fiscal 2023, a decrease of $17.4 million compared to $524.2 million in fiscal 2022, mainly due to lower share repurchases[265] Market and Economic Conditions - Approximately 90% of net sales in fiscal 2023 were generated from customers located in the United States, indicating a strong dependence on the U.S. economy[203] - Economic conditions, including interest rate increases and inflation, are creating uncertainty in the global economy, which may impact the company's operations[205] - The company anticipates increased demand for its products due to emerging industry trends, including the shift towards renewable energy and digital infrastructure[212] Acquisitions and Growth Strategy - The company has invested $468.5 million in acquisitions since 2021 to expand market share and product offerings[209] - In fiscal 2023, the company experienced a 4.3% increase in net sales attributed to acquisitions[222] - The company expects to continue pursuing synergistic acquisitions as part of its growth strategy[209] Segment Performance - Net sales in the Safety & Infrastructure segment decreased by $56.4 million, or 6.3%, to $844.2 million for fiscal 2023 compared to $900.6 million for fiscal 2022[235] - Adjusted EBITDA for the Safety & Infrastructure segment decreased by $35.2 million, or 25.4%, to $103.2 million for fiscal 2023 compared to $138.4 million for fiscal 2022[236] Tax and Regulatory Matters - Income tax expense decreased by $129.8 million to $160.4 million for fiscal 2023, with the income tax rate decreasing to 18.9% from 24.1% in fiscal 2022[229] - Future changes in tax legislation could impact the company's financial performance[294] Risks and Challenges - The company faces risks related to changes in financial obligations for pension plans in the United States[294] - There is a potential loss of production or distribution capacity due to interruptions at facilities or key suppliers[294] - The company may experience a significant loss of third-party agents or distributors affecting sales generation[294] - Security threats and disruptions to information systems pose risks to compliance with legal obligations and data protection[294] - Future impairment of goodwill or long-lived assets may occur due to declines in cash flow projections or customer demand[294] - The company faces challenges in effectively introducing new products and implementing innovation strategies[294] - There are risks associated with managing acquisitions, including identifying and integrating targets successfully[294] - The company may incur additional expenses and complexity in the supply chain due to regulations related to "conflict minerals"[294] - The company must generate sufficient cash flow from operations to meet existing obligations and support business development[294]

Atkore Inc. (NYSE:ATKR) Q3 2023 Earnings Conference Call August 8, 2023 8:00 AM ET Company Participants William Waltz - President & CEO David Johnson - CFO John Deitzer - VP, Treasury & IR Conference Call Participants Chris Dankert - Loop Capital Markets Deane Dray - RBC Capital Markets Andy Kaplowitz - Citigroup Chris Moore - CJS Securities Operator Good morning. My name is Jean Louis, and I will be your conference operator today. At this time, I would like to welcome everyone to the Atkore Third Quarter F ...