Atkore (US:ATKR)2025-11-25 22:39Financial Performance - Net sales for fiscal 2025 decreased by $351.7 million, or 11.0%, to $2,850.4 million compared to $3,202.1 million in fiscal 2024, primarily due to decreased average selling prices[236] - Gross profit for fiscal 2025 was $676.1 million, a decrease of $401.7 million, or 37.3%, from $1,077.8 million in fiscal 2024[236] - Operating income plummeted by $601.6 million, or 96.3%, to $23.2 million in fiscal 2025 compared to $624.8 million in fiscal 2024[236] - Net income for fiscal 2025 was a loss of $15.2 million, a decrease of $488.0 million, or 103.2%, from a net income of $472.9 million in fiscal 2024[236] - Adjusted EBITDA decreased by $397.8 million, or 54.6%, to $330.5 million for fiscal 2025, compared to $728.3 million for fiscal 2024[247] Cost and Expenses - Cost of sales increased by $50.1 million, or 2.4%, to $2,174.3 million for fiscal 2025, driven by increased freight costs and higher sales volume[238] - Selling, general and administrative expenses decreased by $0.9 million, or 0.2%, to $396.6 million in fiscal 2025, attributed to lower costs across various categories[239] - Intangible asset amortization expense decreased by $13.6 million, or 24.5%, to $41.9 million in fiscal 2025 due to certain intangibles becoming fully amortized[240] - Other expense, net increased by $5.7 million to $7.7 million for fiscal 2025, compared to $2.0 million for fiscal 2024[243] Impairment Charges - The company recognized a $66.7 million impairment charge related to the potential sale of the HDPE business in fiscal 2025[224] - Asset impairment charges increased to $214.4 million for fiscal 2025, compared to no charges in fiscal 2024[241] - In fiscal 2025, the Company recorded a goodwill impairment of $18.9 million for the Mechanical reporting unit[301] - The Company identified non-cash impairment charges of $194,450 related to the long-lived assets of the HDPE business in fiscal 2025[306] Tax and Income - Income tax expense decreased by $117.8 million to a benefit of $3.4 million for fiscal 2025, compared to an expense of $114.4 million for fiscal 2024[244] - The effective tax rate decreased to 18.4%[244] Cash Flow and Capital Expenditures - Cash and cash equivalents increased by $155.3 million to $506.7 million as of September 30, 2025, compared to the previous year[268] - The company reported cash flows from operating activities of $402.8 million in fiscal 2025, a decrease of 26.6% compared to $549.0 million in fiscal 2024[280] - Cash used in investing activities decreased to $85.6 million in fiscal 2025 from $154.3 million in fiscal 2024, primarily due to reduced capital expenditures[282] - Financing activities resulted in cash outflows of $160.5 million in fiscal 2025, down from $435.3 million in fiscal 2024, mainly due to decreased share repurchases[283] - In fiscal 2025, capital expenditures totaled $107.1 million, focusing on equipment and growth initiatives to support Global Megaprojects[271] Market Dependence and Sales - Approximately 88% of net sales in fiscal 2025 were to customers located in the United States, indicating a strong dependence on the U.S. economy[217] - Approximately 12% of net sales in fiscal 2025 came from international customers, primarily in foreign currencies[225] - Safety & Infrastructure segment net sales increased by $4.3 million, or 0.5%, to $853.4 million for fiscal 2025, compared to $849.1 million for fiscal 2024[249] Future Outlook and Commitments - The company expects to incur additional restructuring costs in fiscal 2026 following a $1.3 million accrual for restructuring activities announced on September 29, 2025[224] - The company has purchase commitments of $110.9 million and $4.1 million for raw materials in 2026 and 2027, respectively[272] - The projected pension contribution for fiscal 2026 is estimated at $0.4 million[273] - Total estimated cash outflows for servicing existing debt instruments amount to $972.4 million, with significant payments due in the next five years[274] Industry Trends - Emerging industry trends indicate a shift towards renewable power generation and increased demand for digital infrastructure products[226][227] Accounting Policies - The Company utilizes the last-in, first-out (LIFO) method for inventory valuation, reflecting current costs and revenues[307] - The Company assesses the recoverability of goodwill and indefinite-lived intangible assets annually, with the measurement date set for the first day of the fourth fiscal quarter[298] - The Company accounts for business combinations using the acquisition method, recording all acquired assets and assumed liabilities at fair value at the date of acquisition[297]