HARVEY, Ill.— Atkore Inc. (the “Company” or “Atkore”) announced earnings for its fiscal 2024 full year and fourth quarter ended September 30, 2024 (“fourth quarter”).
“Atkore achieved annual volume growth of 3.5% with contributions from each of our key product categories in fiscal 2024,” said Bill Waltz, Atkore President and Chief Executive Officer. “Given the expected decline in net sales and profitability this year, we remained focused on executing our strategic initiatives which we believe will further strengthen our Company for the long-term. Our cash flow generation and disciplined approach to capital allocation are two of Atkore’s greatest strengths. I am proud to say that since declaring our first quarterly dividend earlier in the year, Atkore returned approximately 75% of cash generated from operating activities to shareholders in the form of dividends and share repurchases.”
Waltz continued, “As we end our year and look forward, we are encouraged by the prospects of secular trends for which we have an opportunity to participate. We are mindful of the challenges we face in certain markets, and the competitive landscape in which we operate as we find opportunities to be the customer’s first choice.”
Net sales for the fourth quarter of 2024 decreased to $788.3 million, a decrease of 9.4% compared to $869.9 million for the prior-year period. The decrease was primarily due to lower average selling prices of $104.1 million as the result of expected pricing normalization and the economic value of solar tax credits to be transferred to certain customers of $5.4 million. These decreases were partially offset by higher sales volume of $26.9 million.
Gross profit decreased by $85.4 million to $216.1 million for the fourth quarter of 2024, as compared to $301.5 million for the prior-year period. Gross margins decreased from 34.7% in the prior year period to 27.4%. Gross profit and gross profit margin decreased primarily due to declines in average selling prices of $104.1 million, partially offset by slower declines in raw material costs of $2.2 million.
Net income decreased $67.8 million to $73.1 million for the fourth quarter of 2024, as compared to $140.9 million for the prior-year period, due to lower operating income of $87.4 million, partially offset by decreased income taxes of $20.8 million. Adjusted net income decreased $74.4 million to $86.6 million compared to $161.0 million for the prior-year period.
Adjusted EBITDA decreased $91.8 million, or 39.6%, to $140.2 million for the fourth quarter of 2024, as compared to $232.0 million for the prior-year period. Net income margin decreased from 16.2% in the prior-year period to 9.3% and Adjusted EBITDA Margin decreased 890 basis points from 26.7% to 17.8%.
Net income per diluted share was $2.02 for the fourth quarter of 2024, a decrease of $1.61 from the prior-year period. Adjusted net income per diluted share was $2.43 per share for the fourth quarter of 2024 compared to $4.21 for the prior-year period.
Segment Results
Electrical
Electrical net sales decreased $85.3 million, or 13.1%, to $564.5 million for the fourth quarter of 2024, as compared to $649.8 million for the prior-year period. The decrease in net sales is primarily attributed to decreased average selling prices of $97.3 million as a result of expected pricing normalization partially offset by increased volume of $10.9 million.
Adjusted EBITDA decreased $91.9 million, or 38.7%, to $145.7 million for the fourth quarter of 2024, as compared to $237.6 million for the prior-year period, and Adjusted EBITDA Margin decreased from 36.6% to 25.8%. The decrease in Adjusted EBITDA was largely due to lower average selling prices over input costs.
Safety & Infrastructure
Safety & Infrastructure net sales increased $4.3 million, or 1.9%, to $224.5 million for the fourth quarter of 2024, as compared to $220.2 million for the prior-year period. The increase is attributed to higher volumes of $16.0 million partially offset by lower average selling prices of $6.8 million and the economic value of solar tax credits to be transferred to certain customers of $5.4 million.
Adjusted EBITDA decreased $0.2 million, or 1.6%, to $14.9 million for the fourth quarter of 2024, as compared to $15.1 million for the prior-year period. Adjusted EBITDA Margin decreased from 6.9% to 6.6%. The Adjusted EBITDA and Adjusted EBITDA Margin were marginally consistent with the prior year quarter.
Fiscal 2024 Full-Year Results
Net sales for fiscal 2024 decreased $316.7 million to $3,202.1 million, a decrease of 9.0%, compared to $3,518.8 million for fiscal 2023. The decrease in net sales is primarily attributed to decreased average selling prices of $406.1 million, the economic value of solar tax credits to be transferred to certain customers of $38.3 million. These decreases are partially offset by increased sales volume of $122.6 million across varying product categories within both the Electrical and the Safety & Infrastructure segments.
Gross profit for fiscal 2024 decreased $261.7 million to $1,077.8 million, a decrease of 19.5%, compared to $1,339.5 million for fiscal 2023. Gross margin decreased to 33.7% in fiscal 2024 compared to 38.1% in fiscal 2023 due to declines in average selling prices of $406.1 million, partially offset by slower declines in the input costs of steel, copper and PVC resin of $103.1 million and the net benefit of solar tax credits of $45.7 million.
Net income decreased $217.0 million to $472.9 million for fiscal 2024, as compared to $689.9 million for fiscal 2023. Adjusted net income decreased $230.1 million to $532.9 million for fiscal 2024 compared to $763.0 million for fiscal 2023. The decrease in both net income and adjusted net income was primarily driven by lower operating income of $268.7 million partially offset by lower income tax of $46.0 million.
Adjusted EBITDA decreased $270.4 million or 25.9%, to $771.7 million for fiscal 2024, as compared to $1,042.1 million for fiscal 2023. The decrease was primarily due to lower operating income.
Net income per diluted share on a GAAP basis was $12.69 for fiscal 2024, a decrease of $4.58 from fiscal 2023. Adjusted net income per diluted share was $14.48 for fiscal 2024 compared to $19.40 for fiscal 2023.
Liquidity & Capital Resources
During fiscal 2024, operating activities provided $549.0 million of cash, compared to $807.6 million during fiscal year 2023. Free cash flow decreased to $399.2 million for fiscal 2024 from $588.7 million in fiscal year 2023. The decrease in cash provided by operating activities was primarily driven by lower operating income of $268.7 million and tax impacts of $6.5 million, partially offset by less cash used in working capital of $5.2 million and higher depreciation and amortization of $15.4 million. The decrease in free cash flow was primarily due to the factors above partially offset by less capital expenditures during fiscal 2024 of $69.0 million when compared to the prior fiscal year.
During fiscal 2024, the Board of Directors approved a new quarterly dividend program to be added to the Company’s capital deployment model. Dividends were declared and paid during the year totaling $34.5 million. Additionally, the Board of Directors approved a new share repurchase plan that authorized the Company to repurchase up to $500.0 million of its outstanding stock. During fiscal 2024, the Company repurchased $381.0 million of its outstanding stock, which exhausted the authorization of previously approved plans and leaving a $428.1 million of authorization remaining on the current plan.
Outlook and Targets
Fiscal 2025 First Quarter – The Company expects the first quarter of fiscal 2025 Adjusted EBITDA to be in the range of $95 – $105 million and Adjusted net income per diluted share to be in the range of $1.45 – $1.65.
Fiscal 2025 Full Year – The Company expects fiscal year 2025 Adjusted EBITDA to be in the range of $475 – $525 million and Adjusted net income per diluted share to be in the range of $7.80 – $8.90.
The Company notes that the outlook and target information provided may vary due to changes in assumptions or market conditions and other factors described under “Forward-Looking Statements”.
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