Manufacturers

Atkore Announces Third Quarter 2022 Results

Atkore Inc. (the “Company” or “Atkore”) announced earnings for its fiscal 2022 third quarter ended June 24, 2022.

“Atkore delivered year-over-year earnings growth and margin expansion in both Electrical and Safety & Infrastructure,” said Bill Waltz, Atkore President and Chief Executive Officer. “Our performance demonstrates the strength of the Atkore Business System and our industry-leading solutions, as well as our team’s continued dedication to supporting our customers. We also continued our strong track record of strategically expanding our business in projected high-growth markets by acquiring United Poly Systems to build on our HDPE (high-density polyethylene) conduit portfolio. We are confident that we are well positioned to capitalize on future growth opportunities and deliver excellent service to our customers.”

Waltz continued, “Our strong balance sheet provides us with the flexibility to continue to pursue organic and inorganic growth opportunities while returning capital to shareholders. In addition to United Poly Systems, we acquired a facility in Dallas, Texas that we expect to use to increase our capacity for HDPE conduit and other products, and to build a new regional distribution center that is expected to begin operating in 2024 or 2025. In addition, we have already repurchased $500 million in shares in fiscal 2022 inclusive of repurchases completed so far in the fourth quarter of fiscal year 2022. We are ahead of schedule on our plan announced last November to deploy more than $1 billion over the next two to three years in order to continue to build our leading portfolio, expand in adjacent markets and deliver significant value to shareholders.”

2022 Third Quarter Results

Three months ended

(in thousands)

June 24, 2022

June 25, 2021

Change

% Change

Net sales

Electrical

$

821,566

$

661,163

$

160,403

24.3

%

Safety & Infrastructure

241,909

193,492

48,417

25.0

%

Eliminations

(1,885)

(997)

(888)

89.1

%

Consolidated operations

$

1,061,590

$

853,658

$

207,932

24.4

%

Net income

$

254,313

$

175,297

$

79,016

45.1

%

Adjusted EBITDA

Electrical

$

351,466

$

267,824

$

83,642

31.2

%

Safety & Infrastructure

45,669

22,365

23,304

104.2

%

Unallocated

(19,605)

(15,925)

(3,680)

23.1

%

Consolidated operations

$

377,530

$

274,264

$

103,266

37.7

%

Net sales increased by $207.9 million, or 24.4%, to $1,061.6 million for the three months ended June 24, 2022, compared to $853.7 million for the three months ended June 25, 2021. The increase in net sales is primarily attributed to increased average selling prices across the Company’s products of $244.0 million which were mostly driven by the PVC pipe and conduit product category within the Electrical segment and increased net sales of $13.8 million from companies acquired during fiscal 2021 and fiscal 2022. These increases are offset by decreased sales volume of $43.9 million across varying product categories within both the Electrical and the Safety & Infrastructure segments. Pricing for PVC products, as well as other parts of the business, is expected to return to more normal historical levels over time, but that time is uncertain.

Gross profit increased by $115.1 million, or 33.9%, to $454.3 million for the three months ended June 24, 2022, as compared to $339.3 million for the prior-year period. Gross margin increased to 42.8% for the three months ended June 24, 2022, as compared to 39.7% for the prior-year period. Gross profit increased primarily due to higher average selling prices of $244.0 million, partially offset by higher input costs of steel, copper and PVC resin of $98.0 million.

Net income increased by $79.0 million, or 45.1%, to $254.3 million for the three months ended June 24, 2022 compared to $175.3 million for the prior-year period primarily due to higher gross profit and lower interest expense, partially offset by higher selling, general and administrative costs, and income tax expense.

Adjusted EBITDA increased by $103.3 million, or 37.7%, to $377.5 million for the three months ended June 24, 2022 compared to $274.3 million for the three months ended June 25, 2021. The increase was primarily due to higher gross profit.

Net income per diluted share prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) was $5.74 for the three months ended June 24, 2022, as compared to $3.64 in the prior-year period. Adjusted net income per diluted share increased by $2.11 to $6.07 for the three months ended June 24, 2022, as compared to $3.96 in the prior year period. The increase in diluted earnings per share and adjusted net income per share is primarily attributed to higher net income.

Segment Results

Electrical

Net sales increased by $160.4 million, or 24.3%, to $821.6 million for the three months ended June 24, 2022 compared to $661.2 million for the three months ended June 25, 2021. The increase in net sales is primarily attributed to increased average selling prices of $200.1 million which were mostly driven by the plastic pipe and conduit product category and increased net sales of $6.9 million from companies acquired during fiscal 2021 and fiscal 2022. These increases are offset by decreased sales volume of $41.2 million across varying product categories. Pricing for PVC products, as well as other parts of the business, is expected to return to more normal historical levels over time, but that time is uncertain.

Adjusted EBITDA for the three months ended June 24, 2022 increased by $83.6 million, or 31.2%, to $351.5 million from $267.8 million for the three months ended June 25, 2021. Adjusted EBITDA margins increased to 42.8% for the three months ended June 24, 2022 compared to 40.5% for the three months ended June 25, 2021. The increase in Adjusted EBITDA and Adjusted EBITDA margins was largely due to higher average selling prices over input costs.

Safety & Infrastructure

Net sales increased by $48.4 million, or 25.0%, for the three months ended June 24, 2022 to $241.9 million compared to $193.5 million for the three months ended June 25, 2021. The increase is primarily attributed to increased average selling prices of $43.9 million driven by higher input costs of steel and increased net sales of $6.9 million from companies acquired during fiscal 2022 partially offset by lower volumes of $2.8 million primarily across various steel product categories.

Adjusted EBITDA increased by $23.3 million, or 104.2%, to $45.7 million for the three months ended June 24, 2022 compared to $22.4 million for the three months ended June 25, 2021. Adjusted EBITDA margins increased to 18.9% for the three months ended June 24, 2022 compared to 11.6% for the three months ended June 25, 2021. The Adjusted EBITDA increase is primarily due to the price increases, partially offset by lower volume, discussed above.

Full-Year Outlook

The Company is updating its outlook for Adjusted EBITDA and Adjusted net income per diluted share for fiscal year 2022. The Company expects Net Sales to be up approximately 32 percent versus fiscal year 2021. The Company expects Adjusted EBITDA to be in the range of $1,322 million to $1,342 million, and Adjusted net income per diluted share to be in the range of $20.89 – $21.24.

The Company also continues to support its perspective on fiscal year 2023 provided previously in May 2022. The Company estimates fiscal year 2023 Adjusted EBITDA to be approximately $800 million to $900 million. The Company notes that this perspective may vary due to changes in assumptions or market conditions and other factors described under “Forward-Looking Statements.”

Reconciliations of the forward-looking full-year 2022 outlook for Adjusted EBITDA and Adjusted net income per diluted share, and perspective for full-year 2023 Adjusted EBITDA are not being provided as the Company does not currently have sufficient data to accurately estimate the variables and individual adjustments for such reconciliations.

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