Atkore Inc. Announces First Quarter 2024 Results

“Atkore is off to a great start for fiscal 2024, with double digit organic volume growth in the first quarter driven by contributions across all key product areas,” said Bill Waltz, Atkore President and Chief Executive Officer. “We continue to expect low double digit volume growth for the full year as we continue to realize the benefits from the investments we’ve made in the business, including the ongoing start up and ramp up of our new facility in Hobart, Indiana. Given our performance in the first quarter, we are raising our fiscal 2024 outlook for Adjusted EPS.”

Waltz continued, “As we remain focused on our strategic initiatives and investing in the future of our company, we continued to execute our balanced capital allocation strategy by deploying $44 million in capital expenditures and repurchasing $96 million in shares in the first quarter. In addition, I am proud to highlight the declaration our first quarterly dividend earlier this week. This is a significant milestone for our company made possible by the transformation and structural improvements we’ve achieved over the past several years. With our broad portfolio of electrical infrastructure products and strong secular trends driving future growth, we remain confident in our future.”

2024 First Quarter Results

Net sales decreased by $35.3 million or 4.2% to $798.5 million for the three months ended December 29, 2023, compared to $833.8 million for the three months ended December 30, 2022. The decrease in net sales is primarily attributed to decreased average selling prices across the Company’s products of $130.4 million as a result of expected pricing normalization and the economic value of solar tax credits to be transferred to certain customers of $14.9 million. This decrease was partially offset by increased sales volume of $106.2 million.

Gross profit decreased by $43.8 million, or 13.1%, to $290.5 million for the three months ended December 29, 2023, as compared to $334.4 million for the prior-year period. Gross margin decreased to 36.4% for the three months ended December 29, 2023, as compared to 40.1% for the prior-year period. Gross profit decreased primarily due to declines in average selling prices of $130.4 million partially offset by slower declines in the costs of steel, copper and PVC resin of $62.3 million.

Net income decreased by $35.1 million, or 20.2%, to $138.4 million for the three months ended December 29, 2023 compared to $173.5 million for the prior-year period primarily due to lower gross profit and higher selling, general and administrative costs and intangible amortization, partially offset by lower income tax expense.

Adjusted EBITDA decreased by $50.3 million, or 19.1%, to $213.5 million for the three months ended December 29, 2023 compared to $263.8 million for the three months ended December 30, 2022. 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 $3.61 for the three months ended December 29, 2023, as compared to $4.20 in the prior-year period. Adjusted net income per diluted share decreased by $0.49 to $4.12 for the three months ended December 29, 2023, as compared to $4.61 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 $45.0 million, or 7.1%, to $593.7 million for the three months ended December 29, 2023 compared to $638.7 million for the three months ended December 30, 2022. The decrease in net sales is primarily attributed to decreased average selling prices of $114.3 million as a result of expected pricing normalization and partially offset by increased sales volume of $65.5 million.

Adjusted EBITDA for the three months ended December 29, 2023 decreased by $39.5 million, or 16.2%, to $204.4 million from $243.8 million for the three months ended December 30, 2022. Adjusted EBITDA margins decreased to 34.4% for the three months ended December 29, 2023 compared to 38.2% for the three months ended December 30, 2022. The decrease in Adjusted EBITDA and Adjusted EBITDA margins was largely due to lower average selling prices over input costs.

Safety & Infrastructure

Net sales increased by $9.9 million, or 5.1%, for the three months ended December 29, 2023 to $205.1 million compared to $195.3 million for the three months ended December 30, 2022. The increase is primarily attributed to higher volumes of $40.8 million, partially offset by decreased average selling prices of $16.1 million driven by lower input costs of steel and the economic value of solar tax credits to be transferred to certain customers of $14.9 million.

Adjusted EBITDA decreased by $13.9 million, or 41.6%, to $19.5 million for the three months ended December 29, 2023 compared to $33.4 million for the three months ended December 30, 2022. Adjusted EBITDA margins decreased to 9.5% for the three months ended December 29, 2023 compared to 17.1% for the three months ended December 30, 2022. The decrease in Adjusted EBITDA and Adjusted EBITDA margin was largely due to lower average selling prices over input costs.

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 payable on March 15, 2024, to stockholders of record on February 27, 2024. This is the first quarterly dividend to be paid by the Company as part of its new dividend program that was previously announced in November 2023.

Full-Year Outlook¹

The Company is maintaining its estimate for fiscal year 2024 Adjusted EBITDA to be approximately $900 million to $950 million, and increasing its estimate for Adjusted net income per diluted share to be in the range of $16.50 – $17.50.

The Company notes that this perspective may vary due to changes in assumptions or market conditions and other factors described under “Forward-Looking Statements.”

¹ Reconciliations of the forward-looking full-year 2024 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. Accordingly, we are relying on the exception provided by Item 10(e)(1)(i)(B) of Regulation S-K to exclude these reconciliations.