Atkore (ATKR) 3 Aug 212021 Q3 Earnings call transcript

Greetings, and welcome to the Atkore Third Quarter Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, John Deitzer, Vice President of Treasury and Investor Relations. you. Thank

begin. may You

good and I'm David CEO; Financial and Bill Johnson, today Waltz, Officer. President as morning, you, joined everyone. by Chief Thank well as

I and comments take Such such this during that statements the events actual may forward-looking to Bill actual results press questions or materially. important differ will identify or refer filings materially we to results from after involve projections regarding cause We and and everyone risks may our your call, David. Company. statements would make that those financial our like remind Please factors SEC statements. contained uncertainties forward-looking of today's differ by future could which release in and that or projections to performance

reference to EBITDA. today any addition, EBITDA it to discussion our that, With Bill. in adjusted over turn I'll means In

everyone. exceptional be increase good Atkor conduit the businesses Slide Thanks, is quarter, $XXX across to up again morning, significant We balanced of to quarter. generated adjusted businesses. million stock. million. had million EBITDA and This driven outstanding continued was and earnings PVC and flow, third we were results In performance capital quarter, and our $XX and multiple performance approach very versus delivered John, Starting the In strong across our categories prior repurchasing year. our our Revenue we was product deployment volumes by another the shaped in third XX% metal up primarily $XXX strong by in on and record what X. cash

extended our our completed we refinancing asset-based that and facility. pleased process also are We loan credit debt

off, 'XX, financials. pass million discuss support I'll on our to in of now the 'XX I the recognize and $XXX million. of outlook we quarter. FY this and for before our all up David customers. want outlook forward, employees our $XXX I'll But are to provide of and through it million, adjusted congratulate to a that, after EBITDA more walks effort of us David our Looking the million $XXX $XXX turn I raised to With range quarter's on the expect to we achieve perspective to tremendous over range and increasing call to their FY detail

you, good and Thank Bill, morning, everyone.

our prior which to prices to increased selling across X, on consolidated year-over-year XX% due year. increased results our EBITDA significantly drove Moving quarter, to of up EBITDA adjusted business. Slide parts XXX% our the margin both average $XXX in net versus million, Adjusted many to primarily higher sales the

Our $X.XX. increased adjusted to EPS

comparisons, QX temporary As at we year. you year-over-year the look our had negative last please pandemic to related in from recall that shutdowns impact

third segment overcome and growth grew to EBITDA Turning from XX%. our team of operational million despite consolidated we increased $XX to the saw Volume with our supply & associated raw of to America and million fully business higher Infrastructure top This costs growth drove part able ability strong quarter. also volume multiple a able the adjusted prior input XXX the and to experienced to would net cash in higher up $XXX cash XX% year-over-year prior We of outstanding consolidated X. margins across with moving segment, improvement adjusted generated million EBITDA We across and ended input XX% EBITDA Slide to freight, million flow Slide material through very on to sales demand our basis by XX% was Slide above basis, by we North fully to $XXX driven was increased margin the adjusted up on and as international, our end margins review prices points Through impact was by the versus the our constant pass EBITDA our In this had as Net XX% increased segment selling in by in our the customers have execution, Safety sales other higher we sales volume we due been as raw from well or bridges. $XX year items. increased million solid $XXX and with of commercial cost segment. with And and service materials, X million year. input and line which and a labor labor by our due to profit performance cash, markets. the $XXX $XX increased million the market. cost million. profit growth inflation, the growth $XXX strong both Shifting free quarter and associated led year. now results over challenges our flow as tight Electrical The X. Adjusted on

repurchases organic sheet. balance Our maintaining are primarily while priorities share strategic and strong investments return business, shareholders, a in through M&A capital also to our

we investments approximately quarter, million in bringing third the million. our invested to organic CapEx for total During year-to-date $XX $XX

stock In bringing million repurchased million. in we of addition, our Bill to total quarter, as $XXX repurchases the $XX mentioned, this year

for flow, balance strength and on our shareholders. sheet Our overall execute strong to provides multiple fronts driving financial flexibility in the value cash us healthy with creation

in our late of discuss loan we senior debt the refinancing Turning recent May, with term new to the X. our of to Slide In refinancing. expiring instruments. XXXX secured two I'd like details completed

these to into able of a that, our were expense. separated and of I'd a our favorable turn the asset-based lowered overall we Bill profile facility updates exposure. increased updated interest fixed received We rate maturity transaction, to our to this XXXX. versus transactions, from and it over discuss like moved conjunction to variable As interest result split between we we effective loan extend With to rating several agencies, XX-XX our with two In outlook. and we

Thanks, David.

Slide outlook to X. our Turning on

strength year-to-date, metal number conduit. PVC guidance conduit factors, outlook We trends. This adjusted our and stronger-than-expected macro EPS of a adjusted supported as is in such XXXX. performance favorable stronger-than-expected fiscal continued for for our other reflects results net are year raising sales, and by a and unprecedented EBITDA businesses in our the The the

net sales Our XXXX EBITDA up in $XXX the million. $XXX quarter be outlook range fourth and of XX% to adjusted million approximately to contemplates

we net the XX% be expect sales be of adjusted $XXX XXXX, million range approximately EBITDA our fiscal to $XXX For now and to in up to million.

Just through as year, landscape did half our first of third navigate team effectively the to dynamic quarter. the we very in what a continues operating remains the entire

our demands these the our and macro dynamics We our for expect raising clear range into and perspective are behavior, EBITDA fiscal $XXX them, 'XX $XXX pricing adjusted through a ability the to fiscal the with market, 'XX. of considers PVC QX in and we now million. early fiscal factoring and fiscal expect the constraints, be trends back between sustain connection also tailwinds and XXXX. increased in guidance pricing 'XX. while in In continued of meet near-term supply uncertainties customer to half the our million of We such understanding and combination particularly macro labor, the This as conduit

to for With to line up we the for excited that, I pleased Before we we'll it wanted team's over tremendous we company. and questions. open for future Q&A, the the turn just are the are holds this execution to what how with turn how to operator reinforce

[Operator Deane Capital first comes question from Instructions] Dray RBC from Markets. Your

Your line is open.

fiscal healthy at I some framework do Just appreciate that some really you're very beat very, XXXX, giving and another for but outsized operating normalization, still levels. here

the the and demand like of talking question, touched industry. supply outsized first and of you in So and sustainability this about on both constraints this on demand sides Bill, the supply equation, dynamic the

know you could more new plants just side? competition I thoughts the expand to on So both sustainability get on on hard and forth. takes -- to it it's of to the so time supply your build

number demand, interesting metal the that conduit, imply updated you're but then if we And non-resi, that embedded here, could of there, but questions on some I your growth supply really so on seeing So side? there's start just know in please. would thoughts on more a

question, lot unpack. Great Dean, Yes. a to

So see forward. we going I'll single start with digits demand low demand,

think competitor. that right almost, it. product not The but I can question So or low think it's quite digit supply of is speak challenge single but I'm can it's for frankly, a now can I digit, it's generalizing -- any high robust, any line, single you not almost I whether I flat

while so more is were like number material a constraint majeure board actually more good these additives forth, make weeks is at come right off of PVC couple lead constraint times product of the digits. or now over same a to just -- material have portion it's used and a getting constraints resin more fiscal now and the filling are labors four sell for up would quarter, These where supplier Atkore, we the we would rough easily would what causing a are on one of we If constraint. still market probably steel and force that. across what's three it think said And seems have I and more estimates, had switching hand could price. that forecasting single the the that's to weeks. stuff material most be But that XX which three suppliers I So come think difficult your where I still, we say are year. difficult mouth of like the Last

So all challenge a with things. those it's

and and year, $XXX end normalization. the time the XXX, not be we side, wherever buy normalizing should we there for all prices reoccur do million, want expect to of be them $X,XXX back and this both just linearly side lumber as therefore, mix think drop forward, just transparent do to like expect goes start I therefore, and And sell up they you that the up was hey, $XXX rest next to again. thing went say, year, not will some

value you variability Atkore's carry a anything continue like world. and challenge fiscal forward same with in the asked plan, think and supply-demand also the just to some I into On the XXXX predict dynamics to will forward that about prop hold will

hard just shortage a manufacturers, for which also into And labor the Deane, determine if companies, to the in labor very even only it demand not constraint pandemic. we it's of market the it's a be what more would add. constraint. going recall, you I'll right construction obviously, the wasn't but as now, The to, had a

I and if look future at you So, you, are designed what Things the of being any is indicators. have think business there. the out

really what for determine So, shortage this I is to with could labor hard it exactly future, good volumes be. a indication think that's but the

Got two is on and metal some Is increased then that PVC Can -- it. hear there to is market non-res is the mix And not here. the that side. metal just now? thought then deliver on I conduit, still out called demand too. doing follow-ups about but you comment the any will barrier. elasticity, and And with there just better? you right And and I just take a talked as wanted price seems the really before, this -- know your is price it much can the there we've typically

Yes. set of Deane. questions, Again, great

-- we and both residential So strong is nonresidential. going

always electrical be, hey, contractor overly explained, there pick little will difficulty contractors, an to since At up where didn't they in it it then quite frankly, As to could distributors and sell up bit we've sell times, them ask distributor. being is of product. to electrical was call, we a a walked precise, I going.

along really be and So, data strong. will again, I'm up are hey, moving centers -- well both follow and somebody sure and seem going, also to

to and really there's and commercial other say one carrying we other and in conduit, are well, remarks in sure out going vertical a is not just that trick non-res the prepared We great forward. So if it's PVC of realm called pony. investors, products, didn't a the you think and lot but I metal make markets construction

They mentioned next all kind framing, with you pay beginning, good the business material, I honest what's out to So go, on right because, as of and part conduit of last doing more. and say-do of product at but okay, a now we you ratio, customers. the question, metal your are I'm the have are, well the metal our have you're our Nexwell, to businesses very willing If your laid

whatever say, some competitor, I think the some charge, average the as elasticity the see always paying in for the much how it, more slight in that results, the you material with it competitor, market, or X% I less. price there's Atkor pay for is like, to is on see in that forward willing a a will thing depending of kind trust we are, that we're Deane, price many And meets results, you X% But charging can pulling and our you week think, cases, on premium. as of charge they're feels increases. Now an but distributor industry

speaking, product increase lines. was And Deane that broadly across year-over-year, all volume the XX%

did see we think strength across So the I entire portfolio.

Your Suisse. comes Credit John from next Walsh from question

Your line is open.

This on is Peng Jing John. for

like Pendleton reopened you when automation looks your added facility. you it So,

So $XX you continue million in range? to longer million to can how productivity do get $XX think much you the

I'm I no forever, Yes, I to a of would -- know on shortage drive so that a and to lot in productivity. say ask across quality, opportunities. system delivery shortage business what to really think opportunities will not of continue it of proud with ability safety, would that and our we investors the want Atkore go fundamentals there's it, productivity I productivity. but drive of but about does there's the

the So type least. several that years you number could at model next probably out for of

you, your M&A can if could funnel, aspirations your and I help the color market? helpful. that's around Got follow in safety if And understand any us up, you please

Yes.

robust. questions again, So remains funnel great here. The

questions come great year, with investors back our on stock some again, it, a capital at and lot deployment with sure to is generating day cash. the I'm working of actively and are this we're buying We during point financial

even resources the drive forward out deals there And in in and But roles four enough to moving that's is debt Atkor management deals. responsible? with. formed, without kind So, we're to to strategic, having Is do the is rules. itself we make And infrastructure, safety And keep the synergistic? it we're prided filters. doubling four have it to and And of down mean, continue like was much on our Atkore's on bandwidth? connected of we are kind we yes, fever, sure it I all into very expanding deal are there those

think We can to be there GDP. than that if much think going also it's synergies. infrastructure, safety sure our I strategy. and are good are grow some in do vertical that make have markets the to And there faster I

so So, with what channels working segments. now the right it's actively we're deals deal both forth, management for bandwidth, and but just is the us in vertical appropriate

CJS comes Moore question Chris from next Your from Securities.

Your open. line is

results guide. your Can Obviously, in what's versus point, maybe EBITDA how pricing like been volume has 'XX growth about bit range there, the in 'XX at talk at that more of this of point, you this biggest 'XX? or a 'XX detail do for at estimated XX 'XX recognizing clarity look in driver to your you little example, fiscal just fiscal

we we've Yes, would little say and then of from we continuation pricing next lap M&A give announced that lot will, some have speaking, of a obviously, number official into in and that in which guidance the for given a our deals time of volume productivity our normalization But already a Chris, of we year. next details, we this already bit improvements. kind haven't then mid-single-digit year, year will quarter's then broadly I one that when and typical that

built in say outlook. general, that those would the that into So, that be be would I buckets would

that much side the Obviously, Got see been on generating metal the normalize. as some some the it. the and of office of those markets you of retail like is that in non-res potential the areas hotels. to where side, flip soft on 'XX? have results, focus tailwinds and you're predict the end when Do about COVID, being PVC What trying will exceptional throughout

just we looking things going so, which and ago well. Yes, I'm like being go, when enough But Chris. things digits. stores latter hotels ones X%. at say these of And these they're other centers, I there X% prescriptive Dodge to you I strong Dodge of that then tailwinds of strong. are some saying of even if bounced are mentioned into back. minutes think think look couple that which also not at data double and half Deane's XXXX, and segments, our some I'm restaurants I addressing sales, there's to things to XXXX into Obviously, question, the continues have predicts I was be as get with warehousing of is And a

well, when David to said off mid-single-digit and relative answered growth next it's low, think how of Now that's that we it year this for but did low this reason I the is year. performing I year's to we're

that, travels, are backpacked airlines realize are stuff you anyone again and like if investing. totally that travels and So of will like airports

probably pretty with it bounce with right for infrastructure low little things the hits growth. all other So now, things, optimistic the for build bit but will And we're here future back. longer, those and a

Andy Citigroup. question Your from next comes Kaplowitz from

is open. Your line

You're doesn't in down of predicting there slightly appear EBITDA QX terms historical QX be quarters. versus that much to between two seasonality

at PVC would volume So could places point? on decline You've in slightly talked Has businesses color commodity you about peaked us is that a off? is give are tailwind what more predicting be expect or Any color you declining? in sequentially Or to your this be lot. helpful. a

Yes.

Andy, because million, But I to here. -- answer yes, to million. about $XXX so arguing, $XXX we're delivered we what us quarter, predicting just last the was So million we to we're want think and point, of quarter both how your $XXX

So the is dramatic. could top But same million nothing end there. And we strive think -- everything, we XXX. at the $XXX get so range of I we almost the hit the and if as there's

pricing remarks, We I, occur. best PBC. the even I very the that is the make put think Dave metal major is every you line called well, probably things. profit probably literally got mentioned like doesn't every I condo. product cable, metal peaked and city and drove thing And we times, margins in I out that across It you literally would these through called have I different a only in light. green analogy with framing, spreads of and out contributed XXX, unprepared this perspective just in

Atkore in park the anything will don't as just I the hey, best hit years, year. would quarter. and we're great predicting investors impressive systemic versus did on have are as it These being to range the of I pretty teams, our this would a way, think $XXX But are go, to the here, exactly there's David to XXX by XXX. it's remind like And like why you a prudent really only million of remind in to as of QX question much So, we here. out numbers and going

far. pretty come definitely You've

at I that could industry PVC catch follow far up. think over behind think up update demand? So you maybe in where do you are point Bill, you assuming us inventories is can how the you Could inventories of And terms winter? the this

Yes.

that's get even most I and out. can't forecast think I and why it's but two variance projections that words I to weeks bit is questions four Andy, out, with we because on, of orders lead typically, placing where companies little year, you for on we on year will would anybody's what sell weeks most that that are next a product understanding the is PVC to it's now that great give where There's conduit, predict a say, need times within used on weeks. little say two Right distributors to the probably now, a eight which for their out of weeks three time. let's they just eight offset

would the them even are miscible of Friday of us and the place in now. an you serve while and don't January their frankly, markets, until further, plumbing if stuff don't order other like some out delivered quite and that we report on industry from competitors some predicting think person come serve get an to plumbing read was, I not municipal a I

up lines, And business. have think into winter much it some does I lead think million seasonality $XXX in questions, normalize hand come were, product there In things trends, will appropriate therefore, we to old years million other the times massive back than the months, some to the able million. of on reason the won't the historical keep same million, why the getting longer time, numbers, $XXX the in is ago, normalize, premium. and because inventories we earlier a that's as $XXX and over to be even our continue I we So much quite in $XXX price words, step better which two

to look those and of appropriate type can to factors. all our million of very crystal into we million by seemed year thought balance those forecast for the as $XXX million much $XXX ball, $XXX things as raised you all next hit where So

in if want you're though, I expected was Very in and single-digit in about your volume details. you're sure helpful, the talking having in given probability there understand about this labor there. over I non-res what sense a shortages infrastructure that, new then then of talked some about to low and But time. it that out I'm XX%, obviously the bill cycle, now. underlying volume, is volume, you to electrification past seen look you've product good increased out growth, We alluded the a it maybe But just above saying up at of there's the bit and kind also of obviously, conversation. guess, own you've little

higher put that what's Atkore's is growth you like So single digit? probability when that the than all together, low that decently rate

and like end I hope, there be what around think say, to in I it's shoveled Bill would coming yes, up out what just infrastructure Andy. draft to the aspire ready. form, out turns

we've an into So, Well, the there's variance number than $XX the what's I to just go or that lot this you frame out have, be less but to of the we But number numbers. guides, have hey, million numbers a size? there's could there. general still also think the question, no more put earlier uptick appropriately David

comparison last were XX%, an then while the growth, a to the of -- to things specifically year amazing realizes So shut the and down. some when

XXX off we in reasonably digits good we be there, go of point don't bill it as pricing new have hold tell year to M&A grow know points we mid-single this try markets don't I in But because, year forward have performed above. there. where a Andy, the an then could basis is, we and infrastructure -- typically we in So your what to try

year forth over there's quite points. there. And over Canada quarters to still mid-single and patents But out, the products I ready basis digits, so XXX on the to that there. we're has merit. clicks, driving announce lot say just if new publicly to logic a this are on not At XXX a talking but path products everything a investments mid-single things your Yes, to could into coming in we We and at will talk low frankly, stage, would walk get digits? you and

I no turn further would call like at time. is question this now Bill. to over There to back the

Before discussion. my three key let we conclude, today's me takeaways summarize from

results the in our third everyone a delivered great outstanding the are we in organization. First, to by credit quarter the efforts

believe of the our effectively strength deploy as long-term continue and during we $XX in we stockholders stock the in will to company, for we Second, quarter. to our the capital by value evidenced million drive repurchased

we Third, With the during and in the ahead thank speaking interest are excited call that, and opportunities we very forward about in concludes Atkore, closing, you of with you next and us business. today. look for for our This support your quarterly to our call. for

all This today's call. Thank joining. you concludes conference for

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