Atkore: Getting Electrified Here

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