HARVEY, Ill. — Atkore Inc. announced earnings for its fiscal 2022 first quarter ended December 24, 2021.
“Atkore delivered record results this quarter despite a challenging operating environment,” said Bill Waltz, Atkore President and Chief Executive Officer. “The commitment of our team and our focus on executing the Atkore Business System drove margin expansion in each of our segments. We were particularly pleased with the positive volume growth in our international markets led by solid demand and growth from data center projects. During the quarter, we completed the acquisitions of Sasco Tubes & Roll Forming Inc. and Four Star Industries, adding further metal framing and High Density Polyethylene (HDPE) conduit manufacturing capabilities to our portfolio. We also repurchased $105 million of Atkore common stock, in keeping with our commitment to return capital to shareholders. We look forward to continuing to build on our momentum and creating value for our shareholders and other stakeholders.”
Waltz continued, “Given our strong start to the year and current market dynamics, we are raising our fiscal 2022 outlook for Adjusted EBITDA to $875 – $925 million. Looking ahead, we will continue to invest in new products, marketing and business development to help improve Atkore’s position for the future.”
2022 First Quarter Results
Net sales increased by $329.7 million, or 64.5%, to $840.8 million for the three months ended December 24, 2021, compared to $511.1 million for the three months ended December 25, 2020. The increase in Net sales is primarily attributed to increased average selling prices across the Company’s products of $368.0 million and increased Net sales of $10.7 million due to the acquisitions of Queen City Plastics and FRE Composites Group in the prior year. These increases are offset by decreased sales volume of $50.7 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 $165.6 million, or 87.5%, to $354.8 million for the three months ended December 24, 2021, as compared to $189.2 million for the prior-year period. Gross margin increased to 42.2% for the three months ended December 24, 2021, as compared to 37.0% for the prior-year period. Gross profit increased primarily due to higher average selling prices of $368.0 million, partially offset by higher input costs of steel, copper and PVC resin of $172.2 million.
Net income increased by $119.8 million, or 140.8%, to $204.8 million for the three months ended December 24, 2021 compared to $85.1 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 $156.0 million, or 113.9%, to $293.0 million for the three months ended December 24, 2021 compared to $137.0 million for the three months ended December 25, 2020. 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 $4.32 for the three months ended December 24, 2021, as compared to $1.75 in the prior-year period. Adjusted net income per diluted share increased by $2.70 to $4.58 for the three months ended December 24, 2021, as compared to $1.88 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 $254.5 million, or 65.7%, to $641.7 million for the three months ended December 24, 2021 compared to $387.1 million for the three months ended December 25, 2020. The increase in Net sales is primarily attributed to increased average selling prices of $265.8 million across the Electrical product lines and increased Net sales of $10.6 million from the prior period acquisitions of Queen City Plastics and FRE Composites Group. These increases were offset by decreased sales volume of $23.4 million. 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 December 24, 2021 increased by $146.3 million, or 109.8%, to $279.5 million from $133.3 million for the three months ended December 25, 2020. Adjusted EBITDA margins increased to 43.6% for the three months ended December 24, 2021 compared to 34.4% for the three months ended December 25, 2020. 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 $75.7 million, or 60.7%, for the three months ended December 24, 2021 to $200.5 million compared to $124.8 million for the three months ended December 25, 2020. The increase is primarily attributed to increased average selling prices of $102.2 million driven by higher input costs of steel offset by lower volumes of $27.4 million primarily driven by decreases in the mechanical pipe product line.
Adjusted EBITDA increased by $13.2 million, or 92.5%, to $27.4 million for the three months ended December 24, 2021 compared to $14.3 million for the three months ended December 25, 2020. Adjusted EBITDA margins increased to 13.7% for the three months ended December 24, 2021 compared to 11.4% for the three months ended December 25, 2020. The Adjusted EBITDA increase is primarily due to the price increases, partially offset by lower volume, discussed above.
Full-Year Outlook
Based on market trends and Atkore’s continued execution, the Company is increasing its outlook for Adjusted EBITDA and Adjusted net income per diluted share for fiscal year 2022. The Company continues to expect Net Sales to be up approximately mid-single digit percentages versus fiscal year 2021. The Company expects Adjusted EBITDA to be in the range of $875 million to $925 million, and Adjusted net income per diluted share to be in the range of $12.80 – $13.60. 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 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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