HARVEY, Ill. — Atkore Inc. announced earnings for its fiscal 2024 second quarter ended March 29, 2024.
“Atkore achieved solid results in the second quarter having met our projections for Net Sales and exceeding our projections for Adjusted EBITDA and Adjusted Diluted EPS we presented in February,” said Bill Waltz, Atkore President and Chief Executive Officer. “Organic volume grew 6% for the first half of the year while down 1% for the second quarter. We continue to execute our capital deployment model by investing in our business and returning capital to shareholders. We repurchased $59 million in stock during Q2 for a total of over $150 million repurchased year to date in fiscal 2024.”
Waltz continued, “As we reflect on the first half of our fiscal 2024, I am pleased with the results we’ve been able to achieve. Looking forward to the second half of fiscal 2024, we are adjusting our projections for both Adjusted EBITDA and Adjusted Diluted EPS due to several factors impacting our HDPE and solar-related initiatives. With a great team, market leading product portfolio and strategy supported by secular tailwinds, we are excited about what’s yet to come at Atkore.”
Net sales decreased by $103.0 million or 11.5% to $792.9 million for the three months ended March 29, 2024, compared to $895.9 million for the three months ended March 31, 2023. The decrease in net sales is primarily attributed to decreased average selling prices across the Company’s products of $85.5 million as a result of expected pricing normalization, the economic value of solar tax credits to be transferred to certain customers of $10.8 million, and decreased sales volume of $7.5 million.
Gross profit decreased by $61.3 million, or 17.4%, to $291.6 million for the three months ended March 29, 2024, as compared to $352.9 million for the prior-year period. Gross margin decreased to 36.8% for the three months ended March 29, 2024, as compared to 39.4% for the prior-year period. Gross profit decreased primarily due to declines in average selling prices of $85.5 million partially offset by declines in input costs of $34.0 million.
Net income decreased by $36.2 million, or 20.8%, to $138.0 million for the three months ended March 29, 2024 compared to $174.2 million for the prior-year period primarily due to lower gross profit partially offset by lower income tax expense.
Adjusted EBITDA decreased by $64.1 million, or 23.2%, to $211.9 million for the three months ended March 29, 2024 compared to $276.0 million for the three months ended March 31, 2023. The decrease was primarily due to lower gross profit.
Net income per diluted share prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) was $3.67 for the three months ended March 29, 2024, as compared to $4.31 in the prior-year period. Adjusted net income per diluted share decreased by $0.79 to $4.08 for the three months ended March 29, 2024, as compared to $4.87 in the prior year period. The decrease in diluted earnings per share is primarily attributed to lower net income.
Segment Results
Electrical
Net sales decreased by $90.1 million, or 13.2%, to $590.8 million for the three months ended March 29, 2024 compared to $681.0 million for the three months ended March 31, 2023. The decrease in net sales is primarily attributed to decreased average selling prices of $87.1 million as a result of expected pricing normalization and decreased sales volume of $3.8 million.
Adjusted EBITDA for the three months ended March 29, 2024 decreased by $61.1 million, or 23.8%, to $195.8 million from $256.9 million for the three months ended March 31, 2023. Adjusted EBITDA margin decreased to 33.1% for the three months ended March 29, 2024 compared to 37.7% for the three months ended March 31, 2023. The decrease in Adjusted EBITDA and Adjusted EBITDA margin was largely due to the decrease in average selling prices outpacing decreases in input costs.
Safety & Infrastructure
Net sales decreased by $12.6 million, or 5.9%, for the three months ended March 29, 2024 to $202.4 million compared to $215.1 million for the three months ended March 31, 2023. The decrease is primarily attributed to lower volumes of $3.7 million, and the economic value of solar tax credits to be transferred to certain customers of $10.8 million, partially offset by increased average selling prices of $1.6 million.
Adjusted EBITDA decreased by $7.7 million, or 23.1%, to $25.5 million for the three months ended March 29, 2024 compared to $33.2 million for the three months ended March 31, 2023. Adjusted EBITDA margin decreased to 12.6% for the three months ended March 29, 2024 compared to 15.4% for the three months ended March 31, 2023. The decrease in Adjusted EBITDA and Adjusted EBITDA margin was largely due to higher average input costs over increased average selling prices.
Liquidity & Capital Resources
On January 30, 2024, the Board of Directors of Atkore Inc. declared a quarterly cash dividend of $0.32 per share of common stock to stockholders of record on February 27, 2024, which was paid on March 15, 2024.
On May 2, 2024, the board of directors declared a quarterly cash dividend of $0.32 per share of common stock payable on May 31, 2024, to stockholders of record on May 21, 2024.
Full-Year Outlook1
The Company is adjusting its estimate for fiscal year 2024 Adjusted EBITDA to be approximately $850 million to $900 million, and adjusting its estimate for Adjusted net income per diluted share to $16.00 – $17.00.
The Company notes that this perspective may vary due to changes in assumptions or market conditions and other factors described under “Forward-Looking Statements.”