Atkore (ATKR) 1 Feb 232023 Q1 Earnings call transcript

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

We will take your questions after comments by Bill and David. I would like to remind everyone that during this call, we may make projections or forward-looking statements regarding future events or financial performance of the company.

Such statements involve risks and uncertainties such that actual results may differ materially. our SEC that today's to could from contained our identify release, differ to statements. those factors forward-looking important cause in refer filings press in which materially Please or projections actual results

In addition, today means EBITDA. adjusted our to EBITDA reference any in discussion

a Reconciliations to appendix Adjusted of measures presentation of today's and the EBITDA is most available comparable in non-GAAP a the GAAP non-GAAP measure. measures are presentation.

over to Bill. I'll that, turn it With

to a Thanks, over X, off John, increased and Atkore for the Volumes Starting morning, X%, in quarter. EPS up start Slide on solid the good everyone. adjusted X% were XXXX. year-over-year for is quarter and

continue We and deployment capital playbook execute to for strategic growth. our

HDPE and so far. product the with our As previously integration of expanded I'm progress discussed, growth and the operating we opportunity for a pleased represents significant in with us, Elite HDPE November. acquisition Polymer Solutions

this year we've for our second this full on ES&G announce our During outlook to we the over $XXX section we in the sustainability first the solid our quarter, Collectively, the our $XXX million and of million. already year, With adjusted repurchased was adjusted above EPS. shares, EBITDA our posted $XXX brings It of year-to-date to is release increasing are XXXX which website. report, also morning and and my quarter, published start repurchase pleasure million. for repurchases total of the

and efforts all the of demonstrates of like I to covers would a able to do it they all because company. our articulates truly successes that topics, report our Atkore tireless range we thank results that great and Atkore is stakeholders, achieve have. is believe special everything of and customers to to is their for place employees and our This of support work a broad why and a I

With the for outlook from I'll year. quarter the full to through David talk results the to and turn call that, the our

good and everyone. morning, you, Thank Bill,

In X. sales results and to was $XXX on million EBITDA Moving the Slide adjusted were net first consolidated our quarter, million. $XXX

we times, our our of the in That quarter past as As margin XXXX compared with with being margins years expect said, pleased adjusted normalize with to business the in EBITDA performance. performance we several XX%. have to we're nonetheless our mentioned several

very down year-over-year, decline level. the in and but healthy $X.XX. was pleased This EBITDA, still to in increased a see adjusted with our we strong sales the that Even the are adjusted and EPS up quarter to net

the growth. contributed bridges. quarter, were to X% additional Slide in of our consolidated an X% over Turning X These up prices. our recent our were Volumes gains offset in acquisitions the average and by selling in decline

normalization Our as we pricing average to see for selling continued of our have declined downward key a input of continue trend costs. prices and several

several data and During large we related pockets fabrication strong saw globally. the quarter, to of centers performance chip projects very

are In execution very performance the acquisitions. addition, pleased with and we integration recent from our

Slide our on normalization to Those compressed strong segments volume pricing, with had of positive X. the however, saw Margins margin Moving mentioned previously electrical very we growth side. segment S&I the growth. in

had in the business adjusted growth S&I Our EBITDA. XX%

year fiscal for on Page outlook our XXXX to X. Turning

digits ‘XX. to continue FY up We to expect mid-single volumes be for

expect down be XXXX. XX% We net sales approximately X% to to in

key we our in normalize of declines categories. prices input cost see As several and

EPS. the the for outlook resiliency Atkore model, in EBITDA our However, quarter adjusted strong the with system we increasing and performance adjusted are of business our and

our prior at of midpoint plus the outlook. For of a ‘XX, million is versus of an we range million. minus $XX expect $X adjusted increase $XXX billion with FY EBITDA or This

our increasing adjusted are EPS we of range a up addition, expectations for to $XX.XX $XX.XX. In to

the tax these Inflation expected majority as any flow customers. credits to credits with mentioned does As outlook this benefits of through associated will we quarter, our we the last Act, include Reduction not from expect

to stockholders, also cash cash our of share increasing in strength fiscal expectations for our the With we and repurchases year. to are returning flow commitment the our

it turn Bill. I'll back that, With to

Thanks, David.

and opportunities this this are we've in accomplished outlook our about what for the ahead. all with fiscal very even year, pleased We quarter more but excited we're

Slide sustainability This said and the to that it. is our customers, before, X, the and I believe This employees, seeing strength, would sustainability our our we safety, accomplished we've to encourage everyone as to and details initiatives inspires has truly central Atkore. products, morning, our that third report we longevity Moving work great involving released all of me. team and report read

and sustainability the four is against external here the our report progress we've highlighted Inside targets. made

goals we sustainable As efforts and value set you guide that these help and will year may recall, focus we four creation. targets believe very our enable last introduced smart to

are strides are XXXX. of confident good meet in of even and these our these making by we for potentially to ability each exceed goals, for items our some We or targets

and make X. truly to we've organizations. continue a best recognition a to independent employees that place able are and come our several leading these company. for Turning We in team, demonstrate Slide trajectory, received We from in to the culture Atkore we've is appreciate we have external to great strategy compelling yet place opportunity. I'm sincerely who that strong put and investment Atkore to recently processes acknowledgements a company firmly I believe confident and the work believe that

to it the With operator line over open questions. to the turn that, for we'll

first comes Citigroup. Our with from Kaplowitz question Instructions] Andy [Operator

on strong been good what the markets? about non-restarts volume end would, you slowdown sector. seen center of resilience recorded in But last of the a the data a you year. growth, demand, highlighted. as we you you based talk we've Obviously, very you over know those fabrication said have tech chip could bit Bill, is But So,

for and give you much helping? what backlogs extended Atkore? in volume duration of is the confidence customer is visibility how do that And they So

night. year call with last X When late optimistic still back customers distributor the backlog convention flew the the with the we're out in months, Yes, X talking our forward partners. going consistent months, on our a -- rest or I digits a mid-single of for year. volume I'm -- it, from just here let's of

see continue to would I others. So

As someone But yes. to going capabilities a I fair market there's there's of equipment drive there. or that single beyond mid enough here would estimate of be volume there, Atkore things, delayed because job either the reconsidering to you in There's digits. our share enough somebody getting mentioned, growth or

is really nothing kind nice. Andy, changed, has So which of

then, just but recorded without by just as end million And 'XX guidance at for guidance the you over raised the million about. think high EBITDA, I your volume $XXX of adjusting we talked quarter, in your $XXX you

gave change the And about in pretty does quarter? that $XXX Are in potentially the pretty of cost price significantly? million to us changed the you that chart allow So so that adjust retaining price waterfall that more giveback us to so in what is than it you guidance early year, waterfall? equation the versus price your has you last that gave trajectory far or you

there's in long sit million. comfortable the to price on comfort 'XX. on giving and $XX Yes. we we're for things seeing be faster, Andy, term. not think to, whole costs commodity the for But forecast and/or we're equations, you we still mentioned, that I year are as the year, raise, would around -- To like further, $XXX the different I raise holding year million. as of enough able for we year, just drop and the this say project more that can are that to We're our for guidance comments plus this on them here $XXX value our out EBITDA by

And Andy, usually as little stronger season as full know, force. a second you is starts Yes. the bit half in construction

we quarter half actuals So first guide, second when and year our full that quarter you first look felt guide. after at in raising the comfortable

And then, just me. one for more question

in rebound just as question weakness? more Pricing a been PVC And non-resin seeing. Or how issue conduit metal little define the like electrical because demand maybe constraint now demand being that's there you that you're same is of but on then Is that in mentioned stabilizing, You was volumes the improving? relieved? markets. demand that outweighing resi asking looks do dropping a but still it's PVC supply

Yes.

do I'll reverse order So in there.

grid up. -- well, all of so And telling networks, enough home. that enough those XG But strong. [Car I be really we're weakness. Multifamily and trends, opportunity is going markets, the a lines G], -- there's products. That our for surprise in other should single-family all residential the let then that's is electrification me varying right. homes, back There there already, think not

to your forward. short going we're Atkore question, still then was there, for a And I period. one time for and for industry Almost the cautiously a steel first market Andy, for conduit, optimistic but good with won't growth, think any from it both overplay quarter, I yes,

conduits the to mean, be feel Andy, there, for I -- very and destocking is fact over. that things may me, Yes. X strongly only we steel the

the in And market. the starting And costs demand you're so, rise seeing steel now and the what is to real we're then also, expectations rise. see right in future

in last X, maybe and the folks getting months. little So typical bit in and ahead probably orders more a than way are a getting they their were X

Our Dray next question with comes from RBC. Deane

I appreciate read? worry we questions EBITDA. that's XX% but and And versus a here. of a what clear investors early think and start drill decline. And It strike year. obviously, through does happening. And maybe at would looking certainly, bit be at all the we kind -- your this of because really fiscal there can what been it, in here's still year, color the is storyline looking because first I 'XX that seen the we a And just that it the a off have in January. on I not we've at for normalization whether guide it's like the cliff was have Andy's way prior falling on And was down know

that's talked You've in and that $X using boosted. decline important I billion, interesting terms It's how an I mid-point. milestone. think now it's you which about, mid-point a of But XX% also the is

So from basis? look, that EBITDA for an does in trend it's go -- here Where in the normalization fiscal line 'XX year. on still early

want up, guide. the Deane, it's mid-point of with to you if we're the like, comfortable follow

But driving will value new volume that we're comfortable that customers development I FY continuing on products go pricing. things some also be even some the our -- in for raising think pressure i.e., we're well, the margin, of some year, I but we and on or that 'XX our the margin, comfortable there's very are that still getting guide places guide. more think as enough higher forward, equation -- have doing for new growth, other product typically we're there our

Now, to forth? started, almost could some you know months continue what, lines in so we're have tell better. would to Yes. drop margin is quarter-over-quarter X comfortable I holding in you But enough some overall, say, product where you and pricing

from Your and the we there. EPS $XX that XX% and how XX% $X forward good the like you we how about was of to that we'll it mentioned, then me drop drop, in to sounds good whole and beginning offer -- billion drive would continue it talk

answered, I it's hopefully, product with ball. much that product to say So being crystal but hard by

for input David, of came the up what than though decline that in in the as seen costs And and bigger decline it pricing. we've looks couple a times about is it

just take how costs, and So through kind dynamic, your how of into that pricing? that the they've factors down gone key us input much

Deane. Sure,

at look year-over-year our you at you the the if cost of you'll that Slide for million. EBITDA QX in bridge, were So changes X and bottom see deck look $XX down

down a like were pricing Now we in year year and from was that that than things now you were been than talking we've obviously, ago. normalization a to a with tremendously has especially have more they do lot seen lower about, ago, the steel, that, where

come earlier, bit. Now, steel, mentioned you're I to sequentially, up a little starting see like

say in dynamics $XX our But -- price we million as in what have different you the long significant price and pretty other down a some there's reduction commodities so, to on versus And that, of general, of the in how hold pipelines coming S&I would that changes I is when year-over-year.

out I was -- your whole don't especially price. the dynamic cost know know questions the there, part buy-side I Deane. versus it if our question, but of of on on Sorry, there's

a as reminder, that price understand I drive Deane, are Just -- competition. things this that our know but you to supply-demand the ability

things. bar-none is the or your demand in is competitors then doing to one one industry, best co-load what compared industry one much the prop, and how which value I are Atkore's our the in ability those service, think electronics, customer of in delivery, our with to order, types So invoice

sometimes lower major contributor well, can my my there is as looks price we side just that's I a commodity But product down, thinking, competitors went we and price factor, at one for maybe our So yes, a any margin, and costs, of if have out buy cost that's react. cost. of a how to our the market make not still to in because

a, gave the exact this discussion I and I tutorial what on how question, had just you first to dynamics and well last have beyond you input costs. Bill, quarter, look the thought Yes. you comprehensive a and

sending thank to you referring transcript And reminder. for it, and so, I’ve the that people been and

last question are investors obviously, their you other to anyone you in? of is attractive for some And to coming me. Talk in? and seen the just pipeline And M&A? else Because, about a trying say, any way haven’t the niche for surprise come how this really elbow seeing competition

Yes.

question, in that and wouldn’t is that of electrical put haven’t place as have put privately owned niches this to different set Deane, most equity these by, position private large family Raceway again, up to the than enough have unique that we’ve those we great companies But products, to passed to the questions. companies increased peers of, it, them, Atkore are no, is companies I that no on yes. are that to management think structure market. let’s do come as But uniquely think we whoever large buy acquire that in thinking enterprises, call way. So, they a also we with in -- we’ve it other seen a are for this radar firm of There trend people bought small most we I

market say never to they but and course, no been trend something somebody So is of never the hasn’t or increased active. still sold else,

States in aggressively M&A last in more look to We’ve more Europe. We’re things. actively to into Canada, whether month, increased expand, size into pursuing aggressively team actually just of the our different the continue products here the look

are we capital and well buyback. our between internal M&A, obviously, investments, deploying So stock

to good with So be it’s that time a corp.

question Loop Dankert with Chris next Our from comes Capital.

I on that the S&I? side volume fueling guess, of But in obviously, safety particular, in first demand comp a in bit out and the in call off, and infrastructure, up easier. was particular was anything nice, volume kind you'd

Yes.

basket a and in reference little even part a our bit this quarter. was of metal strong plants, different a security we that, of fab products centers the when framing, data start whenever wire about So you about lot thinking business, their -- pretty

they've pretty So their this broadly product across had speaking, lines quarter. all solid growth

there's up. on now. of going governmental And then, different follow to maybe right a actions lot Obviously,

hard is cetera. infrastructure majority got single et impact from hard that first way, to -- IRA, You've of I at? it's it you can RDOF, that the volume jobs, guess, know digit break but mid off, into guide baked kind of kind those what of of I that if give sense any assume, I of comments the it, on a is in sense on any guide? for, based is of XXXX but any that environment. kind dynamic, that the for And just more some showing up? What's

Yes.

Chris, think, what we said. back paraphrase I'll just I

kicked to these impactful are say a coming it with in company invest but act major, lot where nothing we is just these But but ourselves, January. again grow will things with things think I that's as like and go that I so there, little there's definitely in a more in along, a forward. Reduction we probably Atkore forth, are knowing positioning XXXX, Inflation because of and literally in credits be just bit in, the and

all And is -- soon these like the they that investments fiber dynamics, and deadline the pretty I sign see what need can money and and think their for is. up how the

So action. we're that before still to a gets little ways actually

this our to majority this of bit, not growth year. point, but So volume a little the

at confidence that XXXX certainly on guess you if $XX. gives else, nothing it number I target

CJS Our next Securities. question Moore from Chris with comes

hoping it Most updated HDPE on could of opportunity. just some was market maybe the give is thoughts covered. I you

and a updated of any there? that you about talked on obviously, acquisitions lots little bit, lot's Maybe front. have thoughts a You but it going there just

Chris excited almost -- facet had first, that asked really of just it, question. for market. Yes, other the Every the Chris,

best the for optimistic 'XX, even they're that come great largest the kick ready a Atkore, nation and optimistic that for have to specific for complement think with the for a in work we therefore, we a you companies some teams. comfort national a to fiber questions, run the previous me with ass yet customers, other where electrical optic of And because to reminds a decade mentioning we things getting without as here footprint, why, the take back of They and PBC is stage much with I the And almost have so together and while compare high we this are practices, have very they're And this general funding at XXXX, well manufacturing, and more national just talking lot team they're plus can't, distributors customers positioned, was of is yesterday. get and to a forth. manager of have we that management people to EPS. XXXX, just $XX analyst our X those regional. now how best best you can, division ago how we bring X,

direction, direction, is So getting the going going trends in secular and the is positioned. economy right in Atkore right well

and answer HDPE. say long-winded So we're excited for

kind me, for related. just one cash Last of flow

operations, cash are was little $XXX your of $XX.X I So terms the think flow million the levels year? of for quarter. the million. of for What a but kind just down from bit, balance inventory thoughts in under Inventory

our I -- the expect I see think year, but about will of little from days new we half standpoint, in coming the here to more we a talked solar be, back a of we you we're volume mean, facilities. lot kind want as a bit up where with

So we will there. a an little build bit of have inventory

now I'd say, does for it's when little two. next, or of increase that fairly between the and a look end be you but a level, year, going at So quarter to a on, mean say, of day's it dollar the level bit

last Alex B. Rygiel from comes with question Our Riley.

sort on long-term very conduit term demand outlook? near of question, on as well near To the solar can in appreciating trend in demand that the positive telecom term, the the comment follow in as you up last

that optimistic. about to talked long really short term are is, Yes. prepared our seeing. Reduction other there. remarks, with we of questions some just the term, out Act. almost ties started in and It some Both They background Again, what of with Inflation back the are credits solar David

arrays, the we're it is I'll aware well and and -- on something think positioned. are people make But here January is well, buy for solar the great that on stimulus, a them of, X. I Atkore that that farms So solar for that kick the the people

had the done talked we've beginning here that's think -- where some facility frankly, of for conference and solar tubes, torque dedicated I some making whole quite coming we calls online the to in actually up previous we but a lot, intelligence, in kind started of us QX.

another but out, the are both organic And both manufacturing. growth, demand be is lot made just probably that So that will with with help these there, to on credits business absolutely quarter EPS, our shipped to to out used offshore people be of wanting help and tax a green. U.S.

for So the for U.S., good Atkore. for economy, good green the for good and good

Yes.

Alex, be torque anymore import think flat is, compared stay one like it make way to to torque substantially up volume could for financial to So, year-over-year. to it because tubes itself industry still the tubes is any just The sense going about solar doesn't someone domestic domestically. buying

then, it or XXXX -- comment time it? you for And achieving towards to target update your is confidence

all-day management process drive when go what as executive get where having spinning the board we and to forward. and I the you on XX I have it's faster. on media XXXX all and And with just at talk the for quarter about fly this great I'll we amazing -- David, literally faster wheel myself teams look the an across keep will you say. optimism, -- S&I, do like, we don't continue multiple say, That's what thought that, about how and an because that David say if we the just focus, we're to know to on Thursday, about we'll staff, XXXX. then the -- you spoke for

of who we our a but knows. -- and think while, grow the how we're I Alex, to take definitely re-up So a level. to continue don't it's next going it to for thing do numbers

update will formally it at pretty again We -- the Yes.

November.

'XX. a put we that front I would. But than we did remind like would signed you greater November in normally of just the

thinking were that we were putting that together. as we So about

no the to now There I'll are over Bill time. at further back questions this Waltz. turn call

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

start with First, over year, QX volumes the a solid X%. was to up

earnings are and increasing the Second, year for share our we repurchases. expectations full

we're this made Third, we're excited regards we've and for in employees. ahead about to and excited our in what very products, about the progress and lies area sustainability customers ESG,

speaking thank that, and for call next With we with you to interest concludes the This for in company, our our during and today. quarterly call. your support look you forward