Atkore Announces Third Quarter 2020 Results 

HARVEY, Ill. — Atkore International Group Inc. announced earnings for its fiscal 2020 third quarter ended June 26, 2020.

“I’m pleased to announce Atkore delivered solid results despite challenging economic conditions caused by the COVID-19 pandemic,” commented Bill Waltz, Atkore President and Chief Executive Officer. “Our team’s strong operational focus and disciplined cost control measures enabled the business to meet our responsibilities to customers and increase our cash balance by $100 million this quarter.”

Waltz continued, “Despite these recent market disruptions, our team remains focused on executing our strategy and business priorities to support the long-term sustainability and growth of the business, while ensuring the health and safety of all of our employees.

Our adherence to the Atkore Business System combined with strong financial management will continue to enable us to effectively manage through this challenging period of global uncertainty to meet customers’ needs and to drive shareholder value.”

2020 Third Quarter Results

Net sales decreased by $108.6 million, or 22.0%, to $384.9 million for the three months ended June 26, 2020, compared to $493.5 million for the three months ended June 28, 2019. The decrease in net sales is primarily attributed to $102.3 million of lower volume attributed predominantly to the impacts of COVID-19. The Company saw volume declines primarily in the armored cable and fittings and the metal electrical conduit and fittings product categories within the Electrical Raceway segment and the construction services and barbed tape product categories within the MP&S segment. Additionally, net sales decreased $9.1 million due to lower average selling prices resulting from lower input costs of steel and resin. The decrease in net sales was partially offset by increased sales of $5.1 million from the acquisition of the assets of United Structural Products, LLC. (“US Tray”) and Rocky Mountain Pipe (“Cor-Tek”) and the acquisition of Flytec Systems Ltd. and its parent holding company, Modern Associates Ltd., in fiscal 2019 (together, the “2019 acquisitions”).

Gross profit decreased by $30.3 million, or 24.0%, to $95.8 million for the three months ended June 26, 2020, as compared to $126.1 million for the prior-year period. Gross margin decreased to 24.9% for the three months ended June 26, 2020, as compared to 25.6% for the prior-year period. Gross profit declined primarily due to lower v olume as a result of the impacts of COVID-19.

Net income decreased by $12.5 million, or 34.1%, to $24.1 million for the three months ended June 26, 2020 compared to $36.6 million for the prior-year period primarily due to lower gross profit, partially offset by lower selling, general and administrative expenses and lower interest expense.

Adjusted EBITDA decreased by $24.8 million, or 28.0%, to $63.7 million for the three months ended June 26, 2020 compared to $88.5 million for the three months ended June 28, 2019. The decrease was primarily due to lower gross profit.

Diluted earnings per share prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) was $0.49 for the three months ended June 26, 2020, as compared to $0.75 in the prior-year period. Adjusted net income per diluted share decreased by $0.37 to $0.67 for the three months ended June 26, 2020, as compared to $1.04 in the prior year period. The de crease in diluted earnings per share and adjusted net income per share is primarily attributed to lower gross profit, partially offset by lower selling, general and administrative expenses and lower interest expense.

Segment Results

Electrical Raceway

Net sales decreased by $87.2 million, or 23.4%, to $286.0 million for the three months ended June 26, 2020 compared to $373.2 million for the three months ended June 28, 2019. The decrease in net sales is primarily driven by $87.6 million in lower volume attributed primarily to impacts of COVID-19. The Electrical Raceway segment saw volume declines in the armored cable and fittings and the metal electrical conduit and fittings product categories. Additionally net sales decreased $3.6 million due to lower average selling prices resulting from lower input costs of steel and resin. The decrease in net sales was partially offset by the 2019 acquisitions, which contributed $5.1 million in sales for the three months ended June 26, 2020.

Adjusted EBITDA for the three months ended June 26, 2020 decreased by $19.3 million, or 25.1%, to $57.5 million from $76.7 million for the three months ended June 28, 2019. Adjusted EBITDA margins decreased to 20.1% for the three months ended June 26, 2020 compared to 20.6% for the three months ended June 28, 2019. The decrease in Adjusted EBITDA was largely due to lower volume, partially offset by the benefit of lower material costs in excess of declines in average selling prices, operational efficiencies and cost reductions in response to COVID-19, and the contributions from the 2019 acquisitions

Mechanical Products & Solutions (“MP&S”)

Net sales decreased by $21.1 million, or 17.5%, for the three months ended June 26, 2020 to $99.5 million compared to $120.6 million for the three months ended June 28, 2019. The decrease is primarily attributed to lower volume of $14.7 million primarily attributed to the impacts of COVID-19 and certain one-time projects in the prior year period within the construction services and barbed tape product categories. Additionally, net sales decreased due to lower average selling prices resulting from the lower input cost of steel of $5.5 million.

Adjusted EBITDA decreased by $8.4 million, or 40.6%, to $12.2 million for the three months ended June 26, 2020 compared to $20.6 million for the three months ended June 28, 2019. Adjusted EBITDA margins decreased to 12.3% for the three months ended June 26, 2020 compared to 17.1% for the three months ended June 28, 2019. The Adjusted EBITDA decrease is primarily due to the lower volume and the mix of products sold in the prior year period, partially offset by cost reductions in response to COVID-19.

Full-Year 2020 Outlook

The Company is currently estimating fiscal year 2020 Net Sales, Adjusted EBITDA and Adjusted net income per diluted share to be down approximately 10% compared to fiscal year 2019.

Reconciliations of the forward-looking full-year 2020 outlook for Adjusted EBITDA and Adjusted net income per diluted share are not being provided as the Company does not currently have sufficient data to accurately estimate the variables and individual adjustments for such reconciliations.