Financial Performance - The company reported net sales of $735 million for the third quarter, achieving adjusted EBITDA of $100 million and adjusted EPS of $1.63, with a 2% organic volume growth compared to the previous year [9][13][18] - Average selling prices declined by 12% year over year, primarily driven by PVC and steel conduit products, although there was sequential pricing improvement in steel conduit products [13][14][18] Business Segment Performance - The Electrical segment experienced compressed adjusted EBITDA margins year over year due to pricing declines in PVC and steel conduit products, while the S and I segment saw improved margins driven by volume growth and better productivity [16][18] - Year-to-date volume growth was observed in metal framing, cable management, and construction services, with low single-digit growth attributed to ongoing focus in these areas [15][16] Market Dynamics - The company noted a decline in imported steel conduit and PVC conduit volumes year over year, indicating a shift in market dynamics influenced by tariffs [10][20] - The Dodge Momentum Index indicated a slowdown in planning activity across several non-residential categories, with mixed construction sentiment observed [10][11] Strategic Direction - The company remains committed to maintaining a strong balance sheet and financial profile, focusing on operational excellence through the Atkore business system [24][25] - The management emphasized the importance of onshoring manufacturing and the potential to recapture market share from imports, particularly in steel conduit products [20][21] Management Commentary - Management expressed confidence in the company's strategy and the capabilities of its teams, despite the challenges posed by tariffs and pricing dynamics [7][11] - The outlook for FY 2026 anticipates headwinds from lower selling prices and broader tariff effects, with management actively evaluating measures to mitigate these impacts [11][23] Other Important Information - The company is maintaining its full-year adjusted EBITDA midpoint of $400 million and raising the midpoint of adjusted EPS to $6.5, reflecting improved visibility and stronger earnings leverage [11][18] - The company generated $192 million in cash flow from operations year to date and remains committed to returning cash to shareholders [17][18] Q&A Session Summary Question: Volume growth visibility for FY 2026 - Management acknowledged challenges in forecasting volumes but expressed optimism for growth in data centers and solar markets, indicating reasonable growth expectations for the upcoming year [33][34][36] Question: Demand trends in the water end market - Management noted mixed demand trends in the water end market but highlighted growth in municipal projects, indicating a focus on this vertical moving forward [38][39] Question: Impact of tariffs on steel conduit imports - Management confirmed that tariffs have significantly reduced the flow of steel conduit imports from Mexico, with both steel and PVC imports down significantly in the last fiscal quarter [50][52] Question: Earnings visibility and backlog - Management indicated that the backlog is approximately two weeks, with average inventory levels among distributors, suggesting a cautious approach to inventory management [55][57] Question: Pricing dynamics in the quarter - Management reported that pricing for PVC and steel was slightly better than expected, with two consecutive quarters of improved steel pricing [61][62] Question: Headwinds for FY 2026 - Management outlined that the anticipated $50 million headwinds for FY 2026 are primarily due to pricing declines experienced in FY 2025, with additional pressures from aluminum costs [70][72] Question: Capital allocation strategy - Management reiterated a commitment to a balanced capital allocation model, emphasizing share buybacks, dividends, and strategic investments [80][82]

Financial Data and Key Metrics Changes - The company reported net sales of $735 million, with a 2% organic volume growth and adjusted EBITDA of $100 million, while adjusted EPS was $1.63 [8][12][10] - Average selling prices declined by 12% year over year, primarily driven by PVC and steel conduit products, although there was sequential pricing improvement in steel conduit products [12][13][10] Business Line Data and Key Metrics Changes - The Electrical segment experienced compressed adjusted EBITDA margins year over year due to pricing declines in PVC and steel conduit products, while the S and I segment saw improved margins driven by volume growth and better productivity [15][12] - Year-to-date volume growth was observed in metal framing, cable management, and construction services, with low single-digit growth in electrical cable and flexible conduit categories [14][15] Market Data and Key Metrics Changes - The Dodge Momentum Index indicated a slowdown in planning activity across several non-residential categories, with mixed construction sentiment observed [9][10] - Imported steel conduit and PVC conduit volumes declined year over year, indicating a shift in market dynamics influenced by tariffs [9][10] Company Strategy and Development Direction - The company is focused on maintaining a strong balance sheet and financial profile while pursuing strategic actions to enhance its portfolio of domestically manufactured electrical products [23][20] - The ongoing tariff environment is expected to influence market pricing dynamics and broader demand patterns, with a focus on onshoring manufacturing [19][20] Management's Comments on Operating Environment and Future Outlook - Management acknowledged several headwinds for FY 2026, including lower selling prices and broader tariff effects, estimating approximately $50 million of unmitigated headwinds [22][10] - The company remains optimistic about growth in key electrical end markets, despite near-term challenges [23][24] Other Important Information - The CEO announced plans to retire, emphasizing a commitment to a seamless transition and continued focus on the company's strategy and employees [5][6] - The company generated $192 million in cash flow from operations year-to-date and remains committed to returning cash to shareholders [16][10] Q&A Session Summary Question: Volume growth visibility for FY 2026 - Management noted that end markets like data centers are experiencing growth, but overall volume forecasting remains challenging due to macroeconomic dynamics [31][32] Question: Demand trends in the water end market - The company is focusing on municipal markets, which are showing growth, while residential-related markets are down [36][37] Question: Impact of tariffs on steel conduit imports - Tariffs have significantly reduced the flow of Mexican steel conduit, with both steel and PVC imports down significantly in the last quarter [48][50] Question: Demand visibility and backlog - The current backlog is approximately two weeks, with distributors holding lower inventories due to recent pricing dynamics [52][55] Question: Pricing surprises in the quarter - Pricing for PVC and steel was slightly better than expected, with two quarters of sequential improvement in steel pricing [59][60] Question: Headwinds for FY 2026 - The majority of the anticipated $50 million headwinds are due to pricing declines experienced in FY 2025, with additional factors like aluminum tariffs also contributing [67][68] Question: Capital allocation and share buyback strategy - The company plans to maintain a capital allocation framework focused on dividends, share repurchases, and M&A, with a commitment to spend $150 million this year [78][80]

Financial Performance - The company achieved net sales of $702 million with a 5% organic volume growth driven by construction services, steel conduit, metal framing, and cable management products [6][12] - Adjusted EBITDA was $116 million, with adjusted EBITDA margins expanding sequentially to 16.6% from 15% in the previous quarter [12] - Adjusted EPS was reported at $2.04, reflecting a strong performance despite a 17% year-over-year decline in average selling prices [12][13] Business Line Performance - Organic volumes increased by 5% compared to a 1% decline in the same quarter of the previous fiscal year, with significant growth in metal framing, cable management, and construction services [12][14] - The electrical cable and flexible conduit category saw low single-digit growth year-to-date, while PVC conduit products experienced a decline in volume [15][16] - The S and I segment improved adjusted EBITDA margins due to strong volume performance and better productivity, contributing approximately $11 million to segment EBITDA [16] Market Dynamics - The company noted a slowdown in planning activity across several non-residential categories, as indicated by the Dodge Momentum Index [11] - Despite recent increases in construction starts, there is a possibility of slower activity moving forward due to economic uncertainties and potential project delays [20][21] - The impact of tariffs on imported steel and aluminum products is expected to benefit the company, as most of its products are sourced domestically [10][22] Strategic Direction - The company remains committed to a balanced capital deployment model, focusing on returning cash to shareholders through share repurchases and dividends while investing in growth initiatives [18][25] - The management emphasized the importance of maintaining a strong financial profile and leveraging domestic manufacturing capabilities to serve the electrical infrastructure market [23][24] Management Commentary - Management expressed cautious optimism regarding future demand for US-made steel conduit, despite uncertainties surrounding tariffs and macroeconomic conditions [10][20] - The company is maintaining its full-year fiscal 2025 adjusted EBITDA guidance in the range of $375 million to $425 million, with adjusted EPS expected between $5.75 and $6.85 [21][25] - Management acknowledged the challenges posed by competing technologies, particularly in the fiber optic space, which contributed to an impairment charge for certain long-lived assets [9][65] Other Important Information - The company ratified a new five-year labor agreement with the United Steel Workers at its Harvey, Illinois facility, which is expected to enhance productivity [7][8] - The company repurchased approximately $50 million in shares during the second quarter and increased its dividend to $0.33 per share [8] Q&A Session Summary Question: Expectations for PVC conduits for the remainder of the year - Management indicated that pricing for PVC conduits has continued to decline, but they are maintaining their previous guidance regarding future pricing expectations [30] Question: Market share for PVC conduit - Management believes the company remains a leader in the PVC conduit market, although imports have been increasing [31][32] Question: Recent import levels and potential pricing upside - Management noted that PVC imports have increased significantly year-over-year, but the future trajectory remains uncertain due to tariffs [40][41] Question: Impact of tariffs on steel pricing - Management stated that the 25% tariff on imported steel is expected to benefit the company, although predicting exact impacts remains challenging [44][46] Question: Impairment of HD PVC and competitive changes - Management clarified that the impairment was influenced by competing technologies, particularly fiber optics, and not by the company's own product performance [64][67] Question: Direction from the administration regarding tariffs - Management confirmed that there has been no specific direction from the administration regarding tariffs, leading to a prudent decision to take the impairment charge [73][76] Question: Demand cadence for products - Management reported that demand has been improving month-over-month, with cautious optimism for the remainder of the fiscal year [92][94] Question: Construction services opportunity - Management indicated that data centers are expected to become a significant portion of the construction services business moving forward [95][96]

Financial Data and Key Metrics Changes - The company achieved net sales of $702 million, reflecting a 5% organic volume growth driven by construction services, steel conduit, metal framing, and cable management products [6][11] - Adjusted EBITDA was $116 million, with adjusted EBITDA margins expanding sequentially to 16.6% from 15% in the previous quarter [11] - Adjusted EPS was reported at $2.04, showing a positive trend compared to the previous year [11] Business Line Data and Key Metrics Changes - Organic volumes increased by 5% compared to a 1% decline in the same quarter of the previous fiscal year [11] - Average selling prices declined by 17% year-over-year, primarily due to decreases in PVC and steel conduit products, although there was sequential pricing improvement for steel conduit [12][16] - The Electrical Cable and Flexible Conduit category grew year-to-date by low single digits, while metal framing, cable management, and construction services saw high single-digit growth [13][16] Market Data and Key Metrics Changes - The Dodge Momentum Index indicated a slowdown in planning activity across several non-residential categories [10] - Despite year-to-date increases in construction starts and planning activities, there are indications of potential slower activity moving forward [19][20] Company Strategy and Development Direction - The company remains committed to a balanced capital deployment model, focusing on returning cash to shareholders through share repurchases and dividends while investing in growth initiatives [18][25] - The management highlighted the importance of domestic manufacturing and the ability to serve customers effectively in the evolving electrical industry [23][24] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about demand for U.S.-made steel conduit in 2025, despite uncertainties related to tariffs and macroeconomic conditions [9][20] - The company is maintaining its full-year fiscal 2025 adjusted EBITDA guidance in the range of $375 million to $425 million and adjusted EPS between $5.75 and $6.85 [21][10] Other Important Information - An impairment charge of $50 million was announced for certain long-lived assets related to HDP pipe and conduit products due to competition from emerging technologies [8][67] - A new five-year labor agreement was ratified with the United Steel Workers at the Harvey, Illinois facility, which is expected to enhance productivity [7] Q&A Session Summary Question: Expectations for PVC conduits for the remainder of the year - Management indicated that pricing has continued to decline, but they are still on track with previous guidance regarding PVC conduit pricing [30] Question: Market share for PVC conduit - Management believes they remain a leader in the PVC conduit market, although imports have been increasing [31][32] Question: Recent import levels and potential pricing upside - Management noted that PVC imports have increased significantly year-over-year, but the future trajectory is uncertain due to tariffs [40][41] Question: Net tariff benefit in updated fiscal guidance - Management suggested that a 2% to 3% reduction in volume could be offset by tariff increases, indicating a net positive for shareholders [61] Question: Update on steel conduit imports from Mexico - Management confirmed that while there has been a reduction in imports, they do not expect a complete halt due to the 25% tariff [64][65] Question: Impairment of HD PVC and competitive changes - The impairment was influenced by competition from fiber optic technologies and the administration's plans to increase funding for satellite internet [66][69] Question: Direction from the administration on tariffs - Management stated they have not received specific guidance from the administration regarding tariffs or the BEAD program [73] Question: Cadence of demand for products - Management reported that demand has improved month-over-month, with customers remaining cautiously optimistic [94] Question: Construction services opportunity - Management indicated that data centers are expected to be a significant portion of construction services moving forward [96][98] Question: Pricing assumptions for FY 2025 - Management has not changed pricing assumptions despite tariff impacts, indicating that overall price versus cost dynamics remain within expected ranges [99][102]

Financial Data and Key Metrics Changes - The company achieved net sales of $702 million, reflecting a 5% organic volume growth driven by construction services, steel conduit, metal framing, and cable management products [6][11] - Adjusted EBITDA was $116 million, with adjusted EBITDA margins expanding sequentially to 16.6% from 15% in the previous quarter [11] - Adjusted EPS was reported at $2.04, down from $2.4 year-over-year [6][11] Business Line Data and Key Metrics Changes - Organic volumes increased by 5% compared to a 1% decline in the same quarter of the previous fiscal year [11] - Average selling prices declined by 17% year-over-year, primarily due to decreases in PVC and steel conduit products, although there was sequential pricing improvement for steel conduit [11][12] - The Electrical Cable and Flexible Conduit category grew year-to-date by low single digits, while metal framing, cable management, and construction services saw high single-digit growth [13][15] Market Data and Key Metrics Changes - The Dodge Momentum Index indicated a slowdown in planning activity across several non-residential categories [10] - Despite year-to-date increases in construction starts and planning activities, there are indications of potential slower activity moving forward [19] - The company remains optimistic about demand for U.S.-made steel conduit in 2025, despite uncertainties regarding tariffs and their economic impact [9][19] Company Strategy and Development Direction - The company is focused on maximizing shareholder value through strategic asset management, including a recent divestiture of its Northwest Polymers recycling business [6][7] - A new five-year labor agreement was ratified with the United Steel Workers, enhancing productivity and customer service capabilities [7] - The company is committed to a balanced capital deployment model, emphasizing cash returns to shareholders through share repurchases and dividends [16][22] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding future demand, noting that while the second quarter exceeded expectations, growth in the Construction Services business is expected to moderate in the second half of the year [18][20] - The company maintains its full-year fiscal 2025 adjusted EBITDA guidance in the range of $375 million to $425 million and adjusted EPS between $5.75 and $6.85 [20] - Management highlighted the challenges posed by tariffs and the unpredictability of the macroeconomic environment, which could impact volume expectations [19][20] Other Important Information - An impairment charge of $50 million was recorded for certain long-lived assets related to HDP pipe and conduit products due to competitive technologies and delays in government funding [8][66] - The company has repurchased approximately $50 million in shares during the second quarter and increased its dividend to $0.33 per share [7][8] Q&A Session Summary Question: Expectations for PVC conduits for the balance of the year - Management indicated that pricing has continued to decline but remains aligned with previous guidance, making it difficult to predict future pricing accurately [29] Question: Market share for PVC conduit - Management believes Atkore remains a leader in the PVC conduit market, despite increasing imports [30][31] Question: Import levels and potential pricing upside - Management noted that PVC imports are up solid double digits year-over-year, but future trends are uncertain due to tariffs and market dynamics [38][39] Question: Net tariff benefit in updated fiscal guidance - Management suggested that a 2% to 3% reduction in volume could be offset by tariff increases, indicating a net positive for shareholders [59] Question: Update on steel conduit imports from Mexico - Management confirmed that while there has been a reduction in imports, they have not completely stopped, and the 25% tariff will impact pricing strategies [61][63] Question: Impairment of HD PVC and competitive changes - The impairment was influenced by emerging technologies in fiber optics and the administration's plans to increase funding for satellite internet [66][67] Question: Direction from the administration on tariffs - Management stated there has been no concrete direction from the administration regarding tariffs, leading to a prudent decision to take the impairment charge [72][75] Question: Profitability of the torque tube business without IRA support - Management confirmed that the torque tube business remains profitable even without IRA support, although the IRA has driven additional demand [83][86] Question: Cadence of demand for products - Management reported that demand has improved month-over-month, with cautious optimism from customers regarding future volumes [93][94] Question: Construction services opportunity and data centers - Management indicated that data centers are expected to become the largest portion of construction services moving forward, alongside chip manufacturing [95][96]