Atkore (ATKR) - 2025 Q3 - Quarterly Report

PART I. FINANCIAL INFORMATION Item 1. Financial Statements (Unaudited) This section presents Atkore Inc.'s unaudited condensed consolidated financial statements, including statements of operations, comprehensive income, balance sheets, cash flows, and changes in shareholders' equity, with detailed notes on accounting policies and financial items Condensed Consolidated Statements of Operations Net income significantly declined for both three and nine months ended June 27, 2025, driven by decreased net sales, gross profit, and substantial asset impairment charges | Metric (in thousands) | Three months ended June 27, 2025 | Three months ended June 28, 2024 | Nine months ended June 27, 2025 | Nine months ended June 28, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :------------------------------ | :------------------------------ | | Net sales | $735,045 | $822,364 | $2,098,367 | $2,413,756 | | Gross profit | $172,060 | $279,655 | $528,265 | $861,770 | | Operating income | $63,813 | $168,452 | $79,930 | $522,719 | | Net income | $42,962 | $123,417 | $39,243 | $399,753 | | Basic EPS | $1.26 | $3.36 | $1.15 | $10.74 | | Diluted EPS | $1.25 | $3.33 | $1.14 | $10.61 | - Asset impairment charges of $127,733 thousand were recognized for the nine months ended June 27, 2025, with no comparable charge in the prior year period[10] Condensed Consolidated Statements of Comprehensive Income Comprehensive income decreased for both three and nine months ended June 27, 2025, despite positive foreign currency translation adjustments in the current period | Metric (in thousands) | Three months ended June 27, 2025 | Three months ended June 28, 2024 | Nine months ended June 27, 2025 | Nine months ended June 28, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :------------------------------ | :------------------------------ | | Net income | $42,962 | $123,417 | $39,243 | $399,753 | | Change in foreign currency translation adjustment | $16,221 | $(518) | $5,355 | $4,284 | | Total other comprehensive income (loss) | $16,262 | $(466) | $5,479 | $4,442 | | Comprehensive income | $59,224 | $122,951 | $44,722 | $404,195 | Condensed Consolidated Balance Sheets Total assets and equity decreased as of June 27, 2025, primarily due to reductions in intangible assets, property, plant and equipment, and retained earnings | Metric (in thousands) | June 27, 2025 | September 30, 2024 | | :-------------------- | :------------ | :----------------- | | Total Assets | $2,917,152 | $3,021,403 | | Total Liabilities | $1,451,432 | $1,481,503 | | Total Equity | $1,465,720 | $1,539,900 | | Cash and cash equivalents | $331,017 | $351,385 | | Intangible assets, net | $208,566 | $340,431 | | Property, plant and equipment, net | $627,602 | $652,093 | Condensed Consolidated Statements of Cash Flows Cash provided by operating activities significantly decreased, while cash used in investing and financing also declined, resulting in an overall decrease in cash and cash equivalents | Metric (in thousands) | Nine months ended June 27, 2025 | Nine months ended June 28, 2024 | | :-------------------- | :------------------------------ | :------------------------------ | | Net cash provided by operating activities | $192,359 | $349,957 | | Net cash used in investing activities | $(69,302) | $(110,677) | | Net cash used in financing activities | $(143,149) | $(324,595) | | Decrease in cash and cash equivalents | $(20,368) | $(84,457) | | Cash and cash equivalents at end of period | $331,017 | $303,657 | Condensed Consolidated Statement of Changes in Shareholders' Equity Total equity decreased from September 30, 2024, to June 27, 2025, due to net losses, share repurchases, and dividends, partially offset by stock-based compensation and other comprehensive income | Metric (in thousands) | As of September 30, 2024 | As of June 27, 2025 | | :-------------------- | :----------------------- | :------------------ | | Total Equity | $1,539,900 | $1,465,720 | | Retained Earnings | $1,049,390 | $954,589 | | Accumulated Other Comprehensive Loss | $(19,094) | $(13,615) | | Shares Outstanding | 34,858 | 33,655 | - The company repurchased common stock totaling $100,026 thousand for the nine months ended June 27, 2025, and paid dividends of $33,095 thousand[17][19] Notes to Condensed Consolidated Financial Statements These notes provide detailed disclosures on accounting policies, revenue, acquisitions, assets, debt, and other financial statement items, including segment information and subsequent events Note 1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES This note outlines Atkore Inc.'s organizational structure, primary business segments, basis for financial statement preparation, and details recently adopted and future accounting pronouncements - Atkore Inc. is a leading manufacturer of Electrical products for non-residential construction and renovation markets, and Safety & Infrastructure solutions for construction and industrial markets[22] - The Electrical segment focuses on conduit, cable, and installation accessories, serving contractors through the electrical wholesale channel[23] - The Safety & Infrastructure segment provides metal framing, mechanical pipe, perimeter security, and cable management, marketed to contractors, OEMs, and end users[24] Recent Accounting Pronouncements | ASU | Description | Impact to Atkore | Adoption Date | | :---- | :---------- | :--------------- | :------------ | | 2023-07 Segment Reporting | Requires additional segment disclosures including CODM title/position, significant segment expenses, and interim disclosures for profit/loss and assets | Adopted in fiscal 2025; disclosures in annual/quarterly reports beginning fiscal 2026 | 2025 | | 2023-09 Income Taxes | Requires additional tax disclosures including specific categories in rate reconciliations and quantitative thresholds for reconciling items | Adopted in fiscal 2026; disclosures in annual report | 2026 | | 2024-03 Income Statement - Expense Disaggregation | Requires disaggregation of certain expense captions into specified categories in financial statement notes | Adopted in fiscal 2028; disclosures in annual/quarterly reports beginning fiscal 2029 | 2028 | Note 2. REVENUE FROM CONTRACTS WITH CUSTOMERS This note details revenue recognition policies, primarily for goods transferred at a point in time, and accounting for solar energy tax credits under the Inflation Reduction Act of 2022 - Revenue is primarily recognized when control of promised goods transfers to the customer, typically upon shipment[32] - Under the Inflation Reduction Act of 2022, transferable solar energy tax credits are recognized as a reduction of cost of sales. If contractually transferred to customers, they result in a reduction to revenue[33][34] Solar Energy Tax Credit Impact (Nine months ended June 27, 2025) | Item | Amount (in thousands) | | :------------------------------------ | :-------------------- | | Reduction of revenue for transferred credits | $40,723 | | Benefit to cost of sales | $44,866 | | Liability for credits to be transferred | $20,283 | - All solar energy tax credit activity for the nine months ended June 27, 2025, was within the Safety & Infrastructure segment[36] Note 3. ACQUISITIONS No acquisition activity occurred in the nine months ended June 27, 2025, though prior year payments related to fiscal 2022 acquisitions - No acquisition activity occurred during the nine months ended June 27, 2025[41] - During the nine months ended June 28, 2024, the Company paid $6,036 thousand for accrued purchase price related to the fiscal 2022 acquisition of Cascade Poly Pipe & Conduit and Northwest Polymers[40] Note 4. DIVESTITURES The Company divested Northwest Polymers on February 10, 2025, via a stock sale, resulting in a $6,101 thousand loss and additional tax expense - On February 10, 2025, the Company sold Northwest Polymers via a stock sale[42] Northwest Polymers Divestiture (in thousands) | Item | Amount | | :-------------------- | :----- | | Cash consideration | $6,711 | | Net assets divested | $12,812 | | Loss on sale of business | $(6,101) | | Additional tax expense | $3,996 | Note 5. POSTRETIREMENT BENEFITS This note details frozen defined benefit retirement plans, with net periodic benefit cost decreasing for both three and nine months ended June 27, 2025 - All defined pension benefit plans were frozen as of September 30, 2017, meaning participants no longer accrue credited service[44] Net Periodic Benefit Cost (in thousands) | Metric | Three months ended June 27, 2025 | Three months ended June 28, 2024 | Nine months ended June 27, 2025 | Nine months ended June 28, 2024 | | :----------------------- | :------------------------------- | :------------------------------- | :------------------------------ | :------------------------------ | | Interest cost | $1,139 | $1,316 | $3,417 | $3,948 | | Expected return on plan assets | $(1,081) | $(841) | $(3,242) | $(2,523) | | Amortization of actuarial loss | $52 | $67 | $156 | $200 | | Net periodic benefit cost | $110 | $542 | $331 | $1,625 | Note 6. OTHER (INCOME) EXPENSE, NET Other (income) expense, net, shifted to income for the three-month period but significantly increased as an expense for the nine-month period, primarily due to the Northwest Polymers sale loss Other (Income) Expense, Net (in thousands) | Item | Three months ended June 27, 2025 | Three months ended June 28, 2024 | Nine months ended June 27, 2025 | Nine months ended June 28, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | :------------------------------ | :------------------------------ | | (Gain) Loss on assets held for sale | $(195) | $121 | $154 | $142 | | Foreign exchange loss on intercompany loans | — | $165 | $1,021 | $337 | | Pension-related benefits | $45 | $274 | $133 | $823 | | Loss on sale of business | — | — | $6,101 | — | | Other (income) expense, net | $(150) | $560 | $7,409 | $1,302 | - The loss on sale of Northwest Polymers ($6,101 thousand) was a primary driver for the increase in other expense, net, for the nine months ended June 27, 2025[45] Note 7. INCOME TAXES This note discusses effective tax rates, consistent for three months but decreased for nine months due to solar energy tax credits, and the potential impact of the One Big Beautiful Bill Act (OBBBA) Effective Tax Rate and Income Tax Expense (in thousands) | Metric | Three months ended June 27, 2025 | Three months ended June 28, 2024 | Nine months ended June 27, 2025 | Nine months ended June 28, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :------------------------------ | :------------------------------ | | Effective tax rate | 22.0% | 21.9% | 16.8% | 19.3% | | Income tax expense | $12,128 thousand | $34,531 thousand | $7,935 thousand | $95,606 thousand | - The decrease in the nine-month effective tax rate was driven by the benefit related to solar energy tax credits[49] - The One Big Beautiful Bill Act (OBBBA) was enacted on July 4, 2025, and the Company is evaluating its potential impact on financial statements, including changes to bonus depreciation, R&E expensing, interest limitations, and energy credits[47] Note 8. EARNINGS PER SHARE This note details basic and diluted EPS calculation using the two-class method, showing a significant decrease for both three and nine months ended June 27, 2025 - Basic and diluted earnings per common share are calculated using the two-class method, allocating net earnings to common stock and participating securities[51][52] Earnings Per Share (in thousands, except per share data) | Metric | Three months ended June 27, 2025 | Three months ended June 28, 2024 | Nine months ended June 27, 2025 | Nine months ended June 28, 2024 | | :------------------------------------ | :------------------------------- | :------------------------------- | :------------------------------ | :------------------------------ | | Net income available to common shareholders | $42,337 | $121,884 | $39,143 | $394,445 | | Basic weighted average common shares outstanding | 33,653 | 36,252 | 34,167 | 36,739 | | Diluted weighted average common shares outstanding | 33,853 | 36,616 | 34,391 | 37,174 | | Basic earnings per share | $1.26 | $3.36 | $1.15 | $10.74 | | Diluted earnings per share | $1.25 | $3.33 | $1.14 | $10.61 | Note 9. ACCUMULATED OTHER COMPREHENSIVE LOSS Accumulated other comprehensive loss improved from $(19,094) thousand to $(13,615) thousand due to positive foreign currency translation adjustments Changes in Accumulated Other Comprehensive Loss (in thousands) | Component | Balance as of September 30, 2024 | Net current period other comprehensive income (nine months ended June 27, 2025) | Balance as of June 27, 2025 | | :----------------------- | :------------------------------- | :---------------------------------------------------------------- | :-------------------------- | | Defined Benefit Pension Items | $(10,408) | $124 | $(10,284) | | Currency Translation Adjustments | $(8,686) | $5,355 | $(3,331) | | Total | $(19,094) | $5,479 | $(13,615) | - For the three months ended June 27, 2025, net current period other comprehensive income was $16,262 thousand, driven by $16,221 thousand in currency translation adjustments[55] Note 10. INVENTORIES, NET Inventories, net, slightly decreased, with most valued at LIFO cost or market, and the excess and obsolete inventory reserve increased - Approximately 81% of the Company's inventories were valued at the lower of LIFO cost or market as of June 27, 2025, and September 30, 2024[58] Inventories, Net (in thousands) | Category | June 27, 2025 | September 30, 2024 | | :------------------------------------ | :------------ | :----------------- | | Purchased materials and manufactured parts, net | $160,980 | $153,290 | | Work in process, net | $69,215 | $74,158 | | Finished goods, net | $283,558 | $297,247 | | Inventories, net | $513,753 | $524,695 | | Excess and obsolete inventory reserve | $40,437 | $29,176 | Note 11. PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment, net, decreased, with significant non-cash impairment charges recorded for HDPE pipe and conduit products in fiscal 2025 Property, Plant and Equipment, Net (in thousands) | Category | June 27, 2025 | September 30, 2024 | | :-------------------------- | :------------ | :----------------- | | Property, plant and equipment, at cost | $1,158,643 | $1,147,023 | | Accumulated depreciation | $(531,041) | $(494,930) | | Property, plant and equipment, net | $627,602 | $652,093 | - During the second quarter of fiscal 2025, the Company recorded non-cash impairment charges totaling $31,766 thousand related to long-lived assets of its HDPE pipe and conduit products[61] Depreciation Expense (in thousands) | Period | Depreciation Expense | | :------------------------------- | :------------------- | | Three months ended June 27, 2025 | $18,925 | | Three months ended June 28, 2024 | $16,716 | | Nine months ended June 27, 2025 | $55,631 | | Nine months ended June 28, 2024 | $46,503 | Note 12. GOODWILL AND INTANGIBLE ASSETS Goodwill remained stable, while amortizable intangible assets, especially customer relationships, significantly decreased due to impairment charges and amortization Goodwill by Segment (in thousands) | Segment | Balance as of September 30, 2024 | Divestiture | Exchange rate effects | Balance as of June 27, 2025 | | :-------------------- | :------------------------------- | :---------- | :-------------------- | :-------------------------- | | Electrical | $261,284 | $(756) | $1,018 | $261,546 | | Safety & Infrastructure | $52,716 | — | $(71) | $52,645 | | Total | $314,000 | $(756) | $947 | $314,191 | Intangible Assets, Net (in thousands) | Category | Net Carrying Value (June 27, 2025) | Net Carrying Value (September 30, 2024) | | :-------------------------- | :--------------------------------- | :------------------------------------ | | Customer relationships | $108,957 | $228,717 | | Other amortizable | $6,809 | $18,901 | | Trade names (indefinite-lived) | $92,800 | $92,813 | | Total | $208,566 | $340,431 | - Non-cash impairment charges of $92,397 thousand were recorded primarily against customer relationships during the second quarter of fiscal 2025[65] Amortization Expense (in thousands) | Period | Amortization Expense | | :------------------------------- | :------------------- | | Three months ended June 27, 2025 | $10,108 | | Three months ended June 28, 2024 | $13,216 | Note 13. DEBT This note outlines the Company's debt structure, including the ABL Credit Facility, Senior Secured Term Loan, and Senior Notes, with the ABL maturity extended and full availability Long-term Debt (in thousands) | Debt Instrument | June 27, 2025 | September 30, 2024 | | :------------------------------------ | :------------ | :----------------- | | Senior Secured Term Loan Facility due May 26, 2028 | $372,167 | $371,952 | | Senior Notes due June 2031 | $400,000 | $400,000 | | Deferred financing costs | $(7,780) | $(7,114) | | Long-term debt | $764,387 | $764,838 | - The ABL Credit Facility has aggregate commitments of $325,000 thousand, with $325,000 thousand available as of June 27, 2025[68] - On April 30, 2025, the ABL Credit Facility's maturity was extended to April 30, 2030[70] Note 14. FAIR VALUE MEASUREMENTS This note discusses fair value measurements, primarily cash equivalents, and a $127,733 thousand non-cash impairment charge against HDPE business assets in the Electrical segment Assets Measured at Fair Value (in thousands) | Asset | June 27, 2025 (Level 1) | September 30, 2024 (Level 1) | | :------------ | :---------------------- | :--------------------------- | | Cash equivalents | $257,101 | $265,077 | - The Company recorded a non-cash impairment charge of $127,733 thousand against the long-lived assets of the HDPE business during the second quarter of fiscal 2025[77] - The impairment was triggered by competing technology for federal stimulus funding, accelerated constraints on public spending, and adverse market conditions, including delays in broadband infrastructure investments[77] - Of the impairment value, $92,397 thousand was recorded in definite-lived intangible assets, $31,766 thousand in fixed assets, and $3,570 thousand in right-of-use assets, all within the Electrical segment[79] Note 15. COMMITMENTS AND CONTINGENCIES This note outlines purchase obligations and legal contingencies, including Special Products Claims, PVC Pipe Antitrust Litigation, and securities class action lawsuits, which the Company plans to vigorously defend Purchase Obligations (in thousands) | Period | Amount | | :------------- | :------- | | Remaining 2025 | $334,206 | | 2026 and beyond | $16,927 | - The Company is a defendant in several putative class action lawsuits (In re: PVC Pipe Antitrust Litigation) alleging anticompetitive conduct related to PVC pipe pricing, with a grand jury subpoena from the U.S. Department of Justice Antitrust Division also received[84][86] - Securities class action and shareholder derivative lawsuits have been filed against the Company and its officers, based on allegations in the antitrust matters[87][88] - The Company does not expect these legal proceedings to have a material adverse effect on its financial condition, but litigation is unpredictable[89] Note 16. GUARANTEES The Company had no outstanding letters of credit but $44,170 thousand in surety bonds, with management believing disposition indemnities will not have a material adverse effect - As of June 27, 2025, the Company had no outstanding letters of credit[91] - Surety bonds primarily related to performance guarantees and payment of duties/taxes totaled $44,170 thousand as of June 27, 2025[91] - Management believes that obligations related to product performance, contract completion, and indemnities from dispositions will not have a material adverse effect on the Company's business, financial condition, results of operations, or cash flows[92][93] Note 17. SEGMENT INFORMATION This note provides detailed financial information for the Electrical and Safety & Infrastructure segments, showing declining sales and Adjusted EBITDA for Electrical, but stable sales and increased Adjusted EBITDA for Safety & Infrastructure - The Electrical segment manufactures products for electrical power systems, serving non-residential construction and renovation markets[94] - The Safety & Infrastructure segment designs and manufactures solutions for critical infrastructure protection, marketed to contractors, OEMs, and end users[95] - Both segments use Adjusted EBITDA as the primary measure of profit and loss[96] Segment Net Sales and Adjusted EBITDA (Three months ended) | Segment | External Net Sales (June 27, 2025) | Adjusted EBITDA (June 27, 2025) | External Net Sales (June 28, 2024) | Adjusted EBITDA (June 28, 2024) | | :-------------------- | :------------------------------- | :------------------------------ | :------------------------------- | :------------------------------ | | Electrical | $521,306 | $81,235 | $605,955 | $182,568 | | Safety & Infrastructure | $213,739 | $30,731 | $216,409 | $30,042 | | Consolidated operations | $735,045 | $111,966 | $822,364 | $212,610 | Segment Net Sales and Adjusted EBITDA (Nine months ended) | Segment | External Net Sales (June 27, 2025) | Adjusted EBITDA (June 27, 2025) | External Net Sales (June 28, 2024) | Adjusted EBITDA (June 28, 2024) | | :-------------------- | :------------------------------- | :------------------------------ | :------------------------------- | :------------------------------ | | Electrical | $1,479,331 | $264,564 | $1,790,426 | $582,679 | | Safety & Infrastructure | $619,036 | $82,374 | $623,330 | $75,084 | | Consolidated operations | $2,098,367 | $346,938 | $2,413,756 | $657,763 | Net Sales by Geography (Nine months ended, in thousands) | Geography | June 27, 2025 | June 28, 2024 | | :---------- | :------------ | :------------ | | United States | $1,835,544 | $2,128,274 | | Other Americas | $62,753 | $69,947 | | Europe | $167,240 | $181,376 | | Asia-Pacific | $32,830 | $34,159 | | Total | $2,098,367 | $2,413,756 | Net Sales by Product Category (Nine months ended, in thousands) | Product Category | June 27, 2025 | June 28, 2024 | | :-------------------------------- | :------------ | :------------ | | Metal Electrical Conduit and Fittings | $335,189 | $423,993 | | Electrical Cable & Flexible Conduit | $366,889 | $358,576 | | Plastic Pipe and Conduit | $499,123 | $716,354 | | Other Electrical products | $278,130 | $291,503 | | Mechanical Pipe | $219,619 | $265,416 | | Other Safety & Infrastructure products | $399,417 | $357,914 | | Total Net Sales | $2,098,367 | $2,413,756 | Note 18. SUBSEQUENT EVENTS This note discloses two subsequent events: a quarterly dividend payment approval and the CEO's notification of retirement intention - On July 30, 2025, the Board of Directors approved a quarterly dividend payment of $0.33 per share, payable on August 29, 2025, to stockholders of record on August 19, 2025[102] - On August 4, 2025, William E. Waltz, Jr., President and CEO, notified the Board of his intention to retire, and will continue to serve until a successor is appointed[102] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's perspective on financial performance, condition, and liquidity, analyzing consolidated and segment results, critical accounting policies, and forward-looking statements amidst market uncertainties Incremental Market Uncertainties Increased global economic uncertainty from tariffs, interest rates, inflation, and international conflicts is impacting global supply chains and the Company's markets - Global economic uncertainty is increasing due to tariffs, interest rate adjustments, inflation, and conflicts in Ukraine and the Middle East[104] - These factors are adversely affecting global supply chains and the Company's business, alongside potential impacts from adverse weather on domestic supply chains[104] RESULTS OF OPERATIONS (Three months ended June 27, 2025 vs. June 28, 2024) Consolidated results for the three months ended June 27, 2025, show significant declines in net sales, gross profit, operating income, and net income, primarily due to decreased average selling prices | Metric (in thousands) | June 27, 2025 | June 28, 2024 | Change ($) | Change (%) | | :-------------------- | :------------ | :------------ | :--------- | :--------- | | Net sales | $735,045 | $822,364 | $(87,319) | (10.6)% | | Cost of sales | $562,985 | $542,709 | $20,276 | 3.7% | | Gross profit | $172,060 | $279,655 | $(107,595) | (38.5)% | | Operating income | $63,813 | $168,452 | $(104,639) | (62.1)% | | Net income | $42,962 | $123,417 | $(80,455) | (65.2)% | - The decrease in net sales was primarily due to a 12.2% decrease in average selling prices, partially offset by a 1.9% increase in volume[106][107] - Cost of sales increased due to higher sales volume, freight costs, and input costs, partially offset by divestitures[108] - Interest expense, net, decreased by 10.8% due to lower interest rates on the Senior Secured Term Loan Facility[111] SEGMENT RESULTS (Three months ended June 27, 2025 vs. June 28, 2024) Electrical segment net sales and Adjusted EBITDA significantly declined due to lower selling prices, while Safety & Infrastructure saw slight sales decrease but increased Adjusted EBITDA Electrical (Three months) The Electrical segment experienced substantial decreases in net sales and Adjusted EBITDA for the three months ended June 27, 2025, primarily due to lower average selling prices | Metric (in thousands) | June 27, 2025 | June 28, 2024 | Change ($) | Change (%) | | :-------------------- | :------------ | :------------ | :--------- | :--------- | | Net sales | $521,308 | $605,962 | $(84,654) | (14.0)% | | Adjusted EBITDA | $81,235 | $182,568 | $(101,333) | (55.5)% | | Adjusted EBITDA margin | 15.6% | 30.1% | | | - The decrease in net sales was primarily due to a 15.2% decrease in average selling prices, partially offset by a 1.6% increase in volume[118] Safety & Infrastructure (Three months) Safety & Infrastructure saw slight net sales decrease but increased Adjusted EBITDA and margin, driven by improved profitability in construction, cable management, and metal framing products | Metric (in thousands) | June 27, 2025 | June 28, 2024 | Change ($) | Change (%) | | :-------------------- | :------------ | :------------ | :--------- | :--------- | | Net sales | $213,963 | $217,024 | $(3,061) | (1.4)% | | Adjusted EBITDA | $30,731 | $30,042 | $689 | 2.3% | | Adjusted EBITDA margin | 14.4% | 13.8% | | | - The increase in Adjusted EBITDA and margin was largely related to increases associated with the construction business and cable management and metal framing products in North America[122] RESULTS OF OPERATIONS (Nine months ended June 27, 2025 vs. June 28, 2024) Consolidated results for the nine months ended June 27, 2025, show substantial decreases in net sales, gross profit, operating income, and net income, primarily due to decreased average selling prices and significant asset impairment charges | Metric (in thousands) | June 27, 2025 | June 28, 2024 | Change ($) | Change (%) | | :-------------------- | :------------ | :------------ | :--------- | :--------- | | Net sales | $2,098,367 | $2,413,756 | $(315,389) | (13.1)% | | Cost of sales | $1,570,102 | $1,551,986 | $18,116 | 1.2% | | Gross profit | $528,265 | $861,770 | $(333,505) | (38.7)% | | Operating income | $79,930 | $522,719 | $(442,789) | (84.7)% | | Net income | $39,243 | $399,753 | $(360,510) | (90.2)% | - Net sales decreased primarily due to a 13.6% decrease in average selling prices, partially offset by a 0.5% increase in volume[124] - Cost of sales increased due to higher freight costs, sales volume, and decreased benefit from solar energy tax credits, partially offset by lower input costs and divestitures[125] - Asset impairment charges of $127.7 million were recorded for the nine months ended June 27, 2025, related to HDPE assets[128] - Other expense, net, increased significantly due to the $6.1 million loss on the sale of Northwest Polymers[130] - The income tax rate decreased to 16.8% due to the benefit from solar energy tax credits[131] SEGMENT RESULTS (Nine months ended June 27, 2025 vs. June 28, 2024) Electrical segment net sales and Adjusted EBITDA substantially declined due to lower selling prices, while Safety & Infrastructure maintained stable sales and increased Adjusted EBITDA from cost management and higher volume Electrical (Nine months) The Electrical segment experienced significant decreases in net sales and Adjusted EBITDA for the nine months ended June 27, 2025, primarily due to lower average selling prices | Metric (in thousands) | June 27, 2025 | June 28, 2024 | Change ($) | Change (%) | | :-------------------- | :------------ | :------------ | :--------- | :--------- | | Net sales | $1,479,340 | $1,790,443 | $(311,103) | (17.4)% | | Adjusted EBITDA | $264,564 | $582,679 | $(318,115) | (54.6)% | | Adjusted EBITDA margin | 17.9% | 32.5% | | | - The decrease in net sales was primarily attributed to a 17.0% decrease in average selling prices, divestitures, and decreased sales volume[133] Safety & Infrastructure (Nine months) Safety & Infrastructure saw slight net sales decrease but notable increases in Adjusted EBITDA and margin, as cost reductions outpaced lower selling prices and higher volume | Metric (in thousands) | June 27, 2025 | June 28, 2024 | Change ($) | Change (%) | | :-------------------- | :------------ | :------------ | :--------- | :--------- | | Net sales | $619,960 | $624,569 | $(4,609) | (0.7)% | | Adjusted EBITDA | $82,374 | $75,084 | $7,290 | 9.7% | | Adjusted EBITDA margin | 13.3% | 12.0% | | | - The increase in Adjusted EBITDA and margin was largely due to decreases in costs outpacing decreases in average selling price and higher volume[138] LIQUIDITY AND CAPITAL RESOURCES The Company maintains sufficient liquidity with $331.0 million in cash and full ABL Credit Facility availability, despite significant decreases in cash flows from operating, investing, and financing activities - Cash and cash equivalents were $331.0 million as of June 27, 2025, with $93.7 million held at non-U.S. subsidiaries[139] - The Company had $325.0 million available under its ABL Credit Facility as of June 27, 2025, with no outstanding borrowings[140] - The Company expects ongoing liquidity needs to be funded by cash on hand, operating activities, and the ABL Credit Facility for at least the next twelve months[144] Cash Flow Information (Nine months ended, in thousands) | Activity | June 27, 2025 | June 28, 2024 | | :-------------------- | :------------ | :------------ | | Operating activities | $192,359 | $349,957 | | Investing activities | $(69,302) | $(110,677) | | Financing activities | $(143,149) | $(324,595) | - The decrease in cash from operating activities was primarily due to decreased operating income, partially offset by less working capital used, asset impairment charges, and tax impacts[150] - The decrease in cash used in investing activities was due to lower capital expenditures and proceeds from asset sales[151] - The decrease in cash used in financing activities was primarily due to less cash used for common stock repurchases and issuance, partially offset by increased dividends[152] CHANGES IN CRITICAL ACCOUNTING POLICIES AND ESTIMATES This section highlights a change in accounting estimates for the HDPE business asset impairment, reducing the estimated useful life for customer relationship intangibles from 7 years to 3 years - An asset impairment charge of $127,733 thousand, including $92,397 thousand against intangible assets (predominantly customer relationships), was recorded[153] - As a result of the impairment, the estimated remaining weighted average useful life for customer relationships intangibles was reduced from 7 years to 3 years as of March 28, 2025[153] RECENT ACCOUNTING STANDARDS This section refers to Note 1 for details on recent accounting pronouncements and their impact on the Company - Refer to Note 1, 'Basis of Presentation and Summary of Significant Accounting Policies,' for information on recent accounting standards[154] FORWARD-LOOKING STATEMENTS This section provides a cautionary statement regarding forward-looking statements, emphasizing that actual results may differ materially due to various known and unknown risks and uncertainties - The report contains forward-looking statements based on management's beliefs and assumptions, which are subject to known and unknown risks and uncertainties[155][156] - Key risk factors include declines in economic conditions, weakness in the non-residential construction industry, pricing pressure, raw material costs, regulatory changes, and various legal and operational risks[156][157] - The Company cautions that actual performance and outcomes may differ materially from expectations and does not undertake to update or revise any forward-looking statements[156][158] Item 3. Quantitative and Qualitative Disclosures about Market Risk No material changes to quantitative and qualitative disclosures about market risks have occurred since the Company's most recent Annual Report on Form 10-K filing - No material changes to quantitative and qualitative disclosures about market risks have occurred since the Annual Report on Form 10-K filing[160] Item 4. Controls and Procedures Management, including the CEO and CFO, concluded disclosure controls and procedures were effective as of June 27, 2025, with no material changes in internal control over financial reporting Evaluation of Disclosure Controls and Procedures Management, including the CEO and CFO, concluded disclosure controls and procedures were effective as of June 27, 2025, ensuring timely and accurate information reporting - Management, with CEO and CFO participation, evaluated disclosure controls and procedures as of June 27, 2025[161] - They concluded that disclosure controls and procedures were effective to provide reasonable assurance for timely and accurate information reporting[162] Changes in Internal Control over Financial Reporting No material changes to the Company's internal control over financial reporting occurred during the most recent fiscal quarter - No material changes to internal control over financial reporting occurred during the most recent fiscal quarter[163] PART II. OTHER INFORMATION Item 1. Legal Proceedings This section refers to Note 15, 'Commitments and Contingencies,' for a discussion of certain litigation involving the Company - For a discussion of legal proceedings, refer to Note 15, 'Commitments and Contingencies,' in the unaudited condensed consolidated financial statements[165] Item 1A. Risk Factors This section updates certain risk factors from the Form 10-K, re-prioritizing 'widespread outbreak of diseases' and restating headings for regulatory and foreign law changes - The risk of 'widespread outbreak of diseases' has been lowered in priority from the third highest risk in the Form 10-K[166] - Risk headings for 'changes in federal, state, local and international government regulations and trade policies' and 'changes in foreign laws and legal systems' have been restated, with no change to their content[166][167] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds This section details the $500.0 million 2024 share repurchase plan, with $328.1 million remaining as of June 27, 2025, and no purchases made in the second quarter of fiscal 2025 - The Board of Directors approved the 2024 Plan on May 2, 2024, authorizing up to $500.0 million in common stock repurchases[168] - As of June 27, 2025, $328.1 million of purchases remained under the 2024 Plan[168] - No share purchases were made under the 2024 Plan during the second quarter of fiscal 2025 (March 29, 2025, to June 27, 2025)[169] Item 3. Defaults Upon Senior Securities This item is not applicable to the Company - This item is not applicable[170] Item 4. Mine Safety Disclosures This item is not applicable to the Company - This item is not applicable[171] Item 5. Other Information No activity occurred during the quarter ended June 27, 2025, requiring disclosure under Item 408(a) of Regulation S-K - No activity occurred during the quarter ended June 27, 2025, requiring disclosure under Item 408(a) of Regulation S-K[173] Item 6. Exhibits This section lists all exhibits filed with the Quarterly Report on Form 10-Q, including agreements, certifications, and XBRL documents - Exhibits include a Letter Agreement, Amendment Number Four to Credit Agreement, CEO and CFO certifications (pursuant to Exchange Act Rule 13a-14 and 18 U.S.C. Section 1350), and XBRL Instance, Taxonomy Schema, Calculation, Definition, Labels, and Presentation Linkbase Documents[175] SIGNATURES This section contains the required signatures, certifying the due authorization and filing of the report on behalf of Atkore Inc - The report is signed by John M. Deitzer, Vice President and Chief Financial Officer, on behalf of Atkore Inc. on August 4, 2025[178]