Atkore Inc Reports Fiscal Q3 2024 Financial Results

authorIntellectia.AI2024-08-06
11
ATKR.N
Illustration by Intellectia.AI

Atkore Inc. Reports Fiscal Q3 2024 Financial Results

Atkore Inc. (NYSE: ATKR) announced its financial results for the fiscal third quarter ended June 28, 2024.

Key Financial Metrics

Metric Q3 2024 Q3 2023 Year-over-Year Change
Net Sales $822.4 million $919.1 million -10.5%
Net Income $123.4 million $201.3 million -38.7%
Adjusted EBITDA $206.1 million $270.3 million -23.7%
Net Income per Diluted Share $3.33 $5.13 -35.1%
Adjusted Net Income per Diluted Share $3.80 $5.72 -33.6%

Interpretation: Atkore faced a challenging quarter with significant declines in both revenue and profitability year-over-year. Net sales decreased by 10.5%, primarily due to lower average selling prices and slight reductions in sales volume. Net income per diluted share also took a substantial hit, dropping by 35.1% compared to the same period last year. Adjusted EBITDA margin remains over 25% but showed a 23.7% decline, signaling decreased profitability.

Segment Performance

Segment Q3 2024 Revenue Q3 2023 Revenue Year-over-Year Change Q3 2024 Adjusted EBITDA Q3 2023 Adjusted EBITDA Year-over-Year Change
Electrical $606.0 million $705.6 million -14.1% $182.6 million $266.6 million -31.5%
Safety & Infrastructure $217.0 million $213.6 million 1.6% $30.0 million $21.5 million 39.8%

Interpretation: The Electrical segment experienced a notable downturn, with a 14.1% decrease in net sales and a 31.5% decrease in Adjusted EBITDA. This was primarily driven by a decline in average selling prices. On the other hand, the Safety & Infrastructure segment showed healthy growth, with a 1.6% increase in net sales and a 39.8% increase in Adjusted EBITDA, largely due to higher sales volumes and beneficial solar tax credits.

Comments from Company's Officers

"Atkore delivered Adjusted EBITDA margins over 25% on essentially flat volume compared to the prior year," said Bill Waltz, Atkore President and CEO. He noted that despite the challenges in the Electrical segment, the Safety & Infrastructure segment has shown significant operational improvements. Waltz also acknowledged the subdued demand from the construction sector and a soft pricing environment, which impacted third-quarter results. However, he expressed confidence in Atkore's strategic direction and resilience.

Dividends and Share Repurchase Program

On July 31, 2024, Atkore's Board of Directors declared a quarterly cash dividend of $0.32 per share, payable on August 30, 2024, to stockholders of record on August 20, 2024. The company also repurchased $125 million in shares as part of its capital deployment strategy during the third quarter.

Forward Guidance

The full-year Adjusted EBITDA outlook has been revised to $772 - $782 million, and Adjusted net income per diluted share is expected to range between $14.30 and $14.52.

Stock Price Movement

Post-earnings release, Atkore's stock saw a decrease of 4.21%, indicating market concerns over the company's near-term outlook and financial performance.

Atkore continues to focus on its strategic initiatives, despite difficult market conditions and lower-than-expected performance in its Electrical segment. The company remains committed to its long-term growth and operational efficiency, underpinning its strategy with robust capital deployment and dividend initiatives.

Share