Atkore (ATKR) 1 Feb 242024 Q1 Earnings call transcript

Good morning. My name is Rob, and I will be your conference operator today. At this time, I would like to welcome everyone to Atkore's First Quarter Fiscal Year 2024 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded.Thank you. 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

which And means and would non-GAAP comments take per addition, presentation.With and to per materially.Please call, this measures in company. the reference or make most EBITDA and of earnings important statements discussion EBITDA the share in Bill questions Release, financial diluted any Bill. will the Such forward-looking adjusted may projections remind to that differ after Reconciliations in are adjusted share. EPS our such or in Adjusted could future We our and that measures risks your we EBITDA. to reference adjusted David.I it that regarding like materially projections of or over during actual diluted presentation performance identify to may uncertainties to everyone forward-looking contained refer to I'll turn statements the our by events earnings today's available SEC cause EPS appendix statements.In filings any involve GAAP today results adjusted actual to differ Press those factors results from or non-GAAP comparable measures. are that, means of today's

the I'm in our off shares to quarterly pleased the demonstrating Atkore We're model to that first results XXXX and XX%, to several our areas. product This the company.I evidenced our officially provides a first topics our for the employees continued support our which against January.In and additional to quarter Thanks, start deployment off to great 'XX, to to Starting covers are start, to for call year fiscal were David we've important announce the full key capital like be volumes the of John, repurchased last exciting share moment and quarter past $XX we're I and first I'll for the month. to everyone. the addition, on an was and to turn progress we achievement update targets our also in Overall, and we initiatives.I'd outlook to by as million that, highlight that activity for improvements our structural continue stakeholders. fiscal a the report the all our thank all key want focused declared years.I'm a strong is for and morning, over on Slide XXXX our driven dividend, X, up Report, very to what's on by very over XXXX, across take they executing release in the from contributions in Sustainability excited FY come.With and transformation the to now business everything through talk published made a do proud of quarter year. good for that

you, everyone. Bill, good and Thank morning,

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

pleased and tax stock granted margin of with over This our the strong margins in rate benefit compensation. EBITDA adjusted the XX%.Our outsized are vesting to previously favorable We was performance was with the to performance. quarter EPS our unique due in quarter contributed

solid the for have good past the the We're to over volumes our contributions These for with areas. the quarter expectation progress in by pleased up to year, double-digit key consolidated bridges. Slide year.Turning been the with rate for we this our forward, across be the expectations volume to performance but within to normalization, remaining pricing the all quarters making low expect were discussing X offset XX%. against by in gains with Slide organic impact closer in volume was continued we Moving pricing years.Moving aligns several roughly product XX% and trends strong the X. the I'm full

segments Our PVC higher classic met mentioned be this XX%. anticipated impacted recent the several to of that pricing category digits, our our pipe and volumes calendar expect year-end conduit our our in unfavorably products.Across growth January ahead, and QX in QX their X. growth percentage due was and volume at very performance.Turning in have slightly that than remained Margins rebate were Slide categories, compressed in the electrical-related growth QX normalization solid Electrical volume weather at up than large with we levels.Looking led year-over-year strong high-single first the timing Both conditions previously of had by customers softer severe year-end positive to to in terms quarter. purchases segment

faced on a S&I margin start-up also volume to to the prior the some year-over-year side support We versus comparison the Slide X. year compression costs to Indiana the cost due planned in ramp.Turning and

in our was first week, payment generated is significant the sustained from no performance Atkore's our year position outlook multiyear X, quarterly a made We balance of period repayments possible for our Slide and continue confidence in Earlier pleased a of am first until our Board on this XX. cash highlight capital our on sheet with to with maturity dividend. company Directors payment our dividend for business, the deployment future.Now of XXXX upcoming $X.XX to quarterly share. fiscal XXXX.Next This tremendous I required Page over milestone with execute model by the per regular approved the and achievement our

full be for QX, reasons. are stronger mentioned, by will impacted expectation year year net parts always This first of main U.S. in the growth EBITDA.Also, our built QX, that increasing year half the of our an discussed performance the but adverse Our we've sales than conditions weather accordingly.As our our many as several half in was before, with low track. is estimates our performance on for for are affecting previously outlook full in and for in volume percentage maintaining EPS estimate Also, we back the expectation the factors, including January adjusted overall, the of remains year double-digit we've X we strong

will new year.And is adjusted winter. QX to our second, seasons summer stronger from Therefore, we that, volume and steadily construction and these to expect it and improve we QX versus turn Bill. always business sites the spring these facilities, as then are fall back from QX.With the to in overall our to EBITDA the throughout ramping First, QX increase sequentially up I'll

Thanks, David.

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

numerous strong is centers, not over to care, growth require to that trends electrical With multifamily a benefit electrical we Atkore's the manufacturing, XX, we've infrastructure, to XX% health infrastructure in categories.On product end does analyzed Atkore's said over place or across volume portfolio across industry Slide project are X lodging, we've data anticipated before, to of be. product determine find Experts products.With from electrical for the a great that, As data reinforces peers Atkore's several to estimated projected education It's building record supporting market well-positioned turn reporting addition, the end industry.With markets. our have of for positive overall industry reminded key next in to density am and ability and years outlook open Better deliver products place again on a growth, a with the positive the each it industry it is need.I XXXX future the in these consensus of also beyond.In and buildings backlogs that major be. and great that agrees. electrical yet, the and contractors to this back confidence other Atkore electrical and public a wide operator project we'll across line peers to electrical range questions. difficult

Your Andy Citigroup. comes Instructions] Kaplowitz question first the line from [Operator's of from

Bill year, quantify impact much can results? you bump that forward? weather your how you the QX. have QX, much in a to could forward strong volume. in how HDPE I electrical volumes nice you could all some pulling positive But the relatively that a or growth bigger David, guided for And pull impact you've their at maybe you I the know Did -- mentioned quantify in did that was know customers of but turn see volume in markets? QX you

I of announced earnings have we've what fiscal we is, you as we on I'll slide every there. very start, it X%, then we Andy, whatever what a David is follow But see why over and the to go And of we HDPE, other and it's we or David communicated here. said can and companies to with a can their moment.What It's it's that in where number interchanged could first, much here always up if that 'XX. level is it specificity call give just that. with past, Yes. year the public X not fiberoptic whatever with, rebate track common you we'll firm almost for said, in this expected. again, think turn won't levels that And industry to we volume and more recently. even large but saw, been said have you ours corporations, the Rebate dollars, back, hit stay try number us. But, with

said, literally to was goals. So spike to in it when some I'm just Okay, get December, we of our And assuming we their customers a understand. saw

of specific there.And talking customer, across be for locations down their here January one had X then with large for not to least the I country, us over that customers, So with little soft but for our here, weather. more surprise, won't weather days XX a in example, for dealing a anybody overly the the at example, think, or I

in in with forecasting but averages have number add of and to the a up growth on that to organic light. was again, we're good raised still X for QX things, se the it's EPS. without out track you we're if January what strong thing what exactly comfort a with QX, So precise again, and kind we those it's per -- And actually year.So me, basically bridges

somewhere your level, hopefully, questions. that answered I So in

let Bill. did, But back. step of You me sort

seeing step data changes Are I over contractor like are in ramping primary backlogs. are levels. stabilizing all about talked HDPE, at obviously, you When indicators clearly, up. the things markets?We lead the you still sort lower back, any centers already but of of be may you about place, kind talked think

working been undergrounding. on You've

So few the come frame how of sort market things you ago as like of months at are a point? they than have were sort do worse? this down better Like rates

Yes.

consistent, I think not but worse. either definitely

way. So let's it put that

deck, One, for of XXth the in in X.X. recall month. about December X-plus which that, that and I'll time, to over least Atkore's there Andy, the metrics of say the metrics metrics gravitating there's are point, things, many so but X do But a to out association I earnings how forgot I I, the even talk I high still or one of don't importance. relevant increased but And example. months. evolve actually we So, was building at contractors.There's think, exactly they don't X.X, on your ones

backlog here script put if we then going they could X of building higher the written have literally, of their number it's days, the So thing, good jobs, is on a up said the their as association even and contractors biggest open last to isn't the constraint Atkore.And market. about in they have jobs

it's QX talk economists of industry, building end or everybody have the can initiatives, out point skilled our of would for it's whether ] ABC can read with is I'm day, ABI people.So the about of self when someplace the backlog are the QX something or else, but there a hire that's they now us good growth up slowing whether more confident. of ABI [ talk else. the like to X Andy, as association maintenance you pretty for that. backlogs other at may manager right own versus said and So trades, ABC months it's (sic) things We that, ramp the and there to for actually around how and contractors so hiring, contractors, literally And

said Yes. employment association at go the construction. XXX,XXX that's this more need new Andy, they normal. to estimate if over around although from estimate continues the that And net entering they week from look and above folks you construction up, contractors the

to going are about of around there talk the about X backlog because when size going that's there.I work mean, a out from. and we years So lot being be the contractor jobs it, to take people it's is

that's getting healthy who folks really can think I projects. around, So just rate. This actually a execute is some again, these of

me. costs when us guided were those you And for Safety said any & Infrastructure you includes more when costs else anything you holding did forward? million about you of How start-up are was Infrastructure down And factoring QX? but one & Safety margin? $X start-up costs, in incremental you to contemplate know thinking there I going

Yes, I think, on Andy, track. we're

guide our to So both that exceeded we one the in QX, this hit the is, actually like, simple the range fact guide -- way for do slightly.

the was Some other pull our it's I'll transparency, now, for it volume forget again, it it's on wants -- is Is for here, a in to, circle. Realize is one EPS.So making make David know shareholders large again, is a thing, you're and again octagon, year and of torque jump don't complex too. while every just good just size to think we're but quarter, it a plug the I I to the factor, with on like, that and ahead. I want a EBITDA full -- different. one Oh,

said can't do until the year just to up. permit.So size, the look you'll you our for there's literally, see you're there whether running, all You remarks, to need determining or take machinery up we guide things welding, prepared you're so But air for like continue TIG for tuned those we different many David in a that as as actually every hit using numbers have also as things going and to complexities you the our it's don't new the and volume we knew ramp-up forth. year, so ramp why that's all MIG

both can confidence year. you outlook be, up as So numbers as -- things in for our as volume pick year-end confidence much our the EBITDA, our in through confidence in

Your line from next of question Deane comes from Dray the RBC.

see great that Slide volume quarter, especially through X the to that like you that shows was balance It this across portfolio. come

see that. to good So

a focused sales. well, pony. mean, for Every think wasn't PVC then what one versus -- in line Yes. line one-trick the HD of Deane, I a we thank our while, it XX% you product is, wasn't example, was that there.And purely get standpoint, product important, up once from that. it's it shows chart also, I and on for is

a other pricing of on great with of there's so So products, forth. and really which some doing well lot we're

environment for a it's good So Atkore.

is heart know the dynamics take this dynamics Great. what recovery where the takes you But of But take the and the through were that's factor me And be us input positioning, linear. those dynamics, a geographically, could. the I through not to us is, if the was? And to quarter. here normalization that the specific question competitive costs, quarter, as well. just this going pricing demand know I

me product Again, general there they're sales I'll -- start David of go what manager maybe think more, then getting charts. like say into led without categories, of team, some at here.And keep to this others I'd you're doing X Page are those little doing in can again, to these bit with reference, on some and specificity I add would and back the of you specific to out price without and have overall absolutely each increases. track. again, products it's hey, but is line, X a calling least going, if lower,

we're industry, give to the one not price their to a that our bring returns ability about we have we're you because one invoice, order, think more good I out there but competitors how to than have the thinking the of shareholders. one many So leader, we delivery, one value and only

track on overall. right So

Yes. sequentially. Deane, changes, versus at on -- look believe, a to midpoint the X, you pricing went if I had at you're and we all if was $XX look the the net million, more last million the that, year And around EBITDA $XXX year. always you Slide when guided, price around down bridge, cost for year-over-year be of front-end you because That loaded, going in

say what to our track said, to definitely year. would expectations I from for the So Bill on we're go

second But half seeing that the have numbers the question and on here get disparity because between that half, -- coming XX% how through I of it's seasonality first to half. that demand. Got end in drives such we're almost right, there's part, half. second volume that much I to I expected that takes year-over-year, the clearly the And second even down market and it. me and that If is to come half then of piece, year.So the a ramp get the just construction we're last X? believers in the EBITDA. the the -- season that's first And kind next assumptions And

So is component key pricing the there?

more would of FY beginning quarters year, a had strong at through it of of it versus last couple compare the when we year. the year some things. still as at in you sequentially So I look Because FY 'XX year 'XX. really the pricing down went of the

another versus half a $XXX see in half million $XXX said at seasonality way, maybe then whatever year versus or what the construction was average down. you need the bit our where the will million, little million million, the at Cobar, EBITDA see season you the year normal will in is first of last kind half.That So first like this our easier look picking have definitely, for get half, going for the comps number year.So increases in a than when range firming fiscal And second back of where you again, that the the year we still $XXX you'll $XXX QX, lower versus of pricing up. pricing

think I all say I seasonality the fairly atypical. together, that is if So add you would

Just year. hitting half back-end because little initiatives our in a back bit growth more of of the loaded the

I All comps. those the second reminder year right. of about and half last was especially appreciate and the really David. the dynamics precision, That helpful, the

for So me. that was really just helpful.And one last

referenced plant. terms does Where update, in so give the You and stand Indiana efficiencies productivity, you us it Can of start-up? an the forth?

Yes.

but I on question to answered with Deane, a track. your So how Andy, bit thing it's -- little first

of you complexity expected.If product as every So the we million, out we to but just -- the now long David be that SKU, profits on $X it's the and one manufacturer you light down of Basically, ship. term expect days, generating is rest not time. run again, a doesn't up had called on at it's we running, product, the I we factory bringing But as team or a have progressing. the mean, this starts profit track way that, couple or up bulb a is to it's again, still for there, the that's phenomenal moving ketchup it We're start.Here short for means get leadership it But a SKU a bringing me, is and forecast machines its have third it, you plant each second we're it, just year. -- the we like and their not Everything it as a still up have customer, each up yes. of ship, it. -- the that it's the running reaffirmation taking expect a expected is, and term, starting you

line Your Chris the of from next CJS Securities. comes from Moore question

on just change? was Maybe there for PVC pricing much January, a

expected there, industry being but when harder price to still that the No. and impacted volume, or and prices products that's push put to fiber lines, conduit. country, you Chris, lot I mean, a weather under so increases. the actually smaller our basically on these the are imagine, demand that It's can probably of the track.And by go products, X types the forward go pricing which optimistic Not across get those -- we're realize, bridges, But them on attempting forth is these are Again, but we've misspoke. one in especially so the ground, fiberglass we PVC there going like definitely HDPE under up. in to isn't

less recall, of you Chris, our couple a than as is Yes, backlog weeks.

and where due several at So our mentioned what prepared have like And to January you. remarks, mentioned, kind week factors. are we every light volumes Bill of was we do in look

the lays been of it see much rest our versus start and week expectations stronger, in first has The for so -- quarter. this out the of here how QX we'll

one Got it. Indiana. more on just that. Appreciate Maybe

bit talked the you a The Reduction Act. quite Inflation from obviously, driver So about

overall? going. And up enough overall? seeing at? Is You and kind current demand? for you that guys where would of how torque demand the you would to are beyond capacity are getting it view How of are What you you meet against guys characterize getting that domestic tubes kind

second, capacity doing our a there.So exists right believe torque slower the go there you the including think questions best estimates more so there market as think add we've both tubes, again, whatever as can and remarks I in again, And tell again, is its thing Yes, out others Chris, really the domestic plus demand think and the forward. and the now, out industry prepared and than of just double-digit I -- competitors doubling given forth, as years, the probably or the It's of become capacity we I more to would answers that. so Atkore its healthy of over the comment fine-tuning, to amount thing up, again, even don't getting customers, market, the move we The could which all capacity that Act, I as into by shifts solar grow, the But that But of economy. back volume add we doubles with multiple we'll growth if are this.But plus same on for the tube great don't it anybody dispute for and public should not I and the come forth. States, solar to -- some carbon which size the in anyone of and torque a exciting a think market literally country Reduction the free. is market, have Inflation I did U.S. and

-- fab of provide are if makers, big appreciate becoming thoughts on the know sell et in you've distributors. any kind a you wondering about longer-term talked but kind products a goal that's of majority array like guys of you players viewing there marketing can I that with update cetera, Maybe just partner.Just owners, how channel, that? this of markets process, you the and I developing here. relationships that. go one of with through Obviously, efforts beyond the way one kind distribution But last

here construction not but did because do I'm To Contractors release is multiyear Electrical I give was almost, NECA, me the which in softball process, here. teasing what we question a It's -- all partners.And and of month it's or for represents this, company National us organization, energy generator so we Association you that named tools. think their say to like take I'd freight plans, XX the were X, premier if electrical in that's a give but point, premier there's feel, really nonunion a the last equivalent you is like are from electrical Chris, around proud, the give space your press carrier contractors to or everything to that I'm the union, a partners, a did it's as -- one

some in space premier in just But the to just products, there. across products our conduit other certain product there.There framing that across products, basically you through, spaces. products, real are partner metal go partnership organization, our steel products, relationships of So across manufacturers value for PVC building complement in it our doing. we our shows only set is a are we're the Atkore of the all It's our out

exciting, it's Chris. So

that. will I it there. I leave appreciate

Your of next the Alex question B. from line comes Rygiel Riley. from

A couple of quick questions here.

getting reflected first here your we as for what directionally, does And first have guidance raw second what the the in sort the at volume? the and think I either quarter correction fully second imply guide? quarter of about the price is, in I'm quarter, versus seen guidance or First, quarter materials guess we

down, steel's have its say up now, been -- growth QX look been its second you comments, that our Well, say year-over-year. way growth a way I was on there's you. growth year-over-year But maybe pricing, year-over-year.I of quarter at in when still a as what we these, get be it expect to guide, -- we volume than lower modest would in from it would one our and the

I our fairly in think gets that that, quickly numbers. reflected

basis. would We weeks we are pretty work on for able as an to a inventory.So dynamic. not We say through as might increase our daily price or I see decrease it's

it any tends meaningful in isn't except where where S&I for way, quarterly there that So segment more the a based. really be lags situation to

up, And bit normalize of steel that, again, But so a headwind behind is on tends to its its bit little way on over when steel of down. way quarters. couple a little is a

and a about more, product, David's Obviously, But we you capacity giving shareholders is because it. customers off for little better question for that profit you then way our I volume. any multiple first And just the Again, you general bridge like can bridge. your out if multiple the bit. there, or Alex, have can thing think industry just tight and there's want options sell pricing, you other

down it one down. thing And David the next steel it's that where, is real-time nominal a absolutely competitive, do doubling own order, we're don't on is not okay, large period can that this delivery, leader else match like advantage we for think, I a think volume.Second So sustainable one one invoice capability, just are anyone industry gets our of and to really steel the I there, our is My EBITDA, personal I to a was your where pricing question that answered go, up, think decade. we opinion.Then a example. -- driver in

of centers? us your you then give an update expansion And the distribution on secondly, can

Yes.

there, -- not question good. right great every We're hasn't on with track the been question wow, things. great that other So following

running of several up and them have well. We

other really $XXX earlier facilities, Now question, out this get get of the putting I value Dray's just fully like fully we also talked in go Atlanta and we're of Dallas David me we leverage up what in a $XXX going questions, -- 'XX year we the now. It's bridge purchased, RSCs to the to one the fiscal $XX-plus about fiscal Hey, now, more area getting put to there EPS couple million second to products of prop.We're is talk but and as racking, starting we the so million that Deane half of in that it again go to as the forward years ago the the that's think, thing year, go, until to the and average working year help then the in confidence on one us the gives them a in us are area.We and up. leased, have bring we're

helpful. Very

question Loop from final Chris of Capital. from Your the Dankert comes line

distribution I Do year guess, a at see there those bit how place of was into at first points hit in of on buying second kind little the -- So the level? as off, rebate maybe a good of here? quarter of inventory you still here. like you landscape are end distribution any to comment mentioned the feel probably break we inventories you move kind the the some

Yes.

even and like, will I bless its this words, to think and could PVC things. say pretty stage, pricing. of little And bit, pricing, reason a stable. they're point, hard know there, on are prices commodity type We to we to track. may words, at up other be down about up back increase And And start talk pre-COVID. more. those we're And predict questions, back, they're stronger, there's or not but bit, earlier no to our going our spring aspire therefore, put as always David's the we to for X amount a low, steel be.In at But little high. talking season inventory going and right definitely wouldn't But stock this there's sometime, here, with I then out will will while even year. this in they -- summer appropriate be March season are but other weeks normal we to God of in customers April. time or get, earlier of one In the to backlog, more it's because

swings supplier or no dramatic shortages. there's So

So back to is business normal.

on on there's comment bit the maybe the changing But out I to changes be getting competitive incrementally in there dramatic on lot would are and too quick how a hear much might see landscape? that. just And questions going Obviously, the to But just swing suggest of little you then competitive zoom XX,XXX on feet what's for second. a moment. going to landscape don't Glad and any at we're maybe what quarter-to-quarter. certainly, just here? competitive pricing mean dynamics a the a nothing

the so of There's players the product solar out industry, that are try self-help the end different noise Nothing almost questions do. enter months of really the growing U.S. was somebody without to with specific of things, things.At minor drivers the imports significance. it's level me and flashes backlog. so a he forth, that things. there's It's may But the always morning our all of demand there's literally, Or because the would things of Trump of, elected, growing much and with this if earlier HDPE on those the government things business. of saw he importing as opportunity the contractor there, day, getting stop X

think this talked mean, Chris, many we've And just remember, times. I Yes. about I

have to landscape like you distribution, mean, do have a so we to stable agents, of the have competitive to a are people have year-over-year. why is brand that and fairly have have reasons still lot that You you know. well I there

nice here. start Congrats sense. a Makes the to on year

Thank you.

Chris. Thank you,

to This turn for closing call Bill remarks. would like Waltz I question-and-answer concludes over session. the to now back the

Thank you.

Let me my X to a today's moment key from take takeaways discussion. summarize

Atkore our start Deitzer great today. role. solid that, company. year talent interest Manager the of of concludes strategy, and into conclude our years.Third, improvements the VP and Finance support moving is VP IR would work.John with a will the our new tailwinds, currently rotation recognition Finance; of we positions.With XX%.Second, several thank well of believe we your with next a look We a the be to This Electrical and you to during role our our volumes Fiberglass Atkore.Before for was their unit Treasury in call, both who QX quarterly you portfolio of speaking continued dividend wish in in Conduit business to is into for supported business will Electrical by the team, another them at First, as Matt forward call. declaration as that is the General and the structural We call best product our be with transitioning at I organic Kline, over of first of demonstrates to past quarterly strong today's key secular up yet the system come planned like mention the transformation success

call. conference today's concludes This

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