Atkore Inc
For the period ended Jun 28, 2024. Filed Aug 6, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 28, 2024 · Filed Aug 6, 2024
ATKR$94.96+0.0%Stored close · as of Oct 16, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-29; filed 2024-05-07.
0001666138-24-000043
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-06-28; filed 2024-08-06.
0001666138-24-000069
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 113 previous paragraphs and 113 current paragraphs.
85 unchanged; 23 reworded; 5 added; 5 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 15 previous and 15 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (5)
Current report
Net sales decreased by $99.7 million, or 14.1%, to $606.0 million for the three months ended June 28, 2024 compared to $705.6 million for the three months ended June 30, 2023. The decrease in net sales is primarily attributed to decreased average selling prices of $80.8 million and decreased sales volume of $18.2 million.
Current report
Net sales increased by $3.4 million, or 1.6%, for the three months ended June 28, 2024 to $217.0 million compared to $213.6 million for the three months ended June 30, 2023. The increase is primarily attributed to higher volumes of $17.0 million, partially offset by the increased economic value of solar energy tax credits to be transferred of $7.2 million and decreased average selling prices of $6.8 million.
Current report
Adjusted EBITDA increased by $8.5 million, or 39.8%, to $30.0 million for the three months ended June 28, 2024 compared to $21.5 million for the three months ended June 30, 2023. Adjusted EBITDA margin increased to 13.8% for the three months ended June 28, 2024 compared to 10.1% for the three months ended June 30, 2023. The increase in Adjusted EBITDA and Adjusted EBITDA margin was largely due to higher sales volume and the increased net benefit of solar energy tax credits.
Current report
Net sales decreased by $235.1 million, or 8.9%, to $2,413.8 million for the nine months ended June 28, 2024, compared to $2,648.9 million for the nine months ended June 30, 2023. The decrease in net sales is primarily attributed to decreased average selling prices of $302.0 million and the increased economic value of solar energy tax credits to be transferred to certain customers of $32.9 million, partially offset by increased sales volume of $95.7 million.
Current report
Net sales increased by $0.7 million, or 0.1%, to $624.6 million for the nine months ended June 28, 2024, compared to $623.9 million for the nine months ended June 30, 2023. The increase is primarily due tohigher volumes of $52.3 million, partially offset by decreased average selling prices of $19.8 million and the increased economic value of solar energy tax credits to be transferred to certain customers of $32.9 million.
Removed paragraphs (5)
Previous report
Net sales decreased by $90.1 million, or 13.2%, to $590.8 million for the three months ended March 29, 2024 compared to $681.0 million for the three months ended March 31, 2023. The decrease in net sales is primarily attributed to decreased average selling prices of $87.1 million as a result of expected pricing normalization and decreased sales volume of $3.8 million.
Previous report
Net sales decreased by $12.6 million, or 5.9%, for the three months ended March 29, 2024 to $202.4 million compared to $215.1 million for the three months ended March 31, 2023. The decrease is primarily attributed to lower volumes of $3.7 million, and the economic value of solar energy tax credits to be transferred to certain customers of $10.8 million, partially offset by increased average selling prices of $1.6 million.
Previous report
Adjusted EBITDA decreased by $7.7 million, or 23.1%, to $25.5 million for the three months ended March 29, 2024 compared to $33.2 million for the three months ended March 31, 2023. Adjusted EBITDA margin decreased to 12.6% for the three months ended March 29, 2024 compared to 15.4% for the three months ended March 31, 2023. The decrease in Adjusted EBITDA and Adjusted EBITDA margin was largely due to higher average input costs over increased average selling prices.
Previous report
Net sales decreased by $138.4 million, or 8.0%, to $1,591.4 million for the six months ended March 29, 2024, compared to $1,729.8 million for the six months ended March 31, 2023. The decrease in net sales is primarily attributed to decreased average selling prices of $215.9 million and the economic value of solar energy tax credits to be transferred to certain customers of $25.7 million. These decreases are partially offset by increased sales volume of $98.3 million across varying product categories within both the Electrical and the Safety & Infrastructure segments.
Previous report
Net sales decreased by $2.8 million, or 0.7%, to $407.5 million for the six months ended March 29, 2024, compared to $410.3 million for the six months ended March 31, 2023. The decrease is primarily attributed to decreased average selling prices of $14.5 million and the economic value of solar energy tax credits to be transferred to certain customers of $25.7 million. This was partially offset by higher volumes of $36.7 million.
Reworded paragraphs (23)
Previous wording
Net sales decreased by $103.0 million or 11.5% to $792.9 million for the three months ended March 29, 2024, compared to $895.9 million for the three months ended March 31, 2023. The decrease in net sales is primarily attributed to decreased average selling prices across the Company’s products of $85.5 million as a result of expected pricing normalization, the economic value of solar energy tax credits to be transferred to certain customers of $10.8 million, and decreased sales volume of $7.5 million.
Current wording
Net sales decreased by $96.8 million or 10.5% to $822.4 million for the three months ended June 28, 2024, compared to $919.1 million for the three months ended June 30, 2023. The decrease in net sales is primarily attributed to decreased average selling prices across the Company’s products of $87.5 million, the increased economic value of solar energy tax credits to be transferred to certain customers of $7.2 million, and decreased sales volume of $1.2 million.
Previous wording
Cost of sales decreased by $41.7 million, or 7.7%, to $501.3 million for the three months ended March 29, 2024 compared to $543.1 million for the three months ended March 31, 2023. The decrease was primarily due to lower input costs of $34.0 million, the benefit of solar energy tax credits of $12.8 million, and lower sales volume of $3.5 million, partially offset by higher freight costs of $9.4 million.
Current wording
Cost of sales decreased by $25.6 million, or 4.5%, to $542.7 million for the three months ended June 28, 2024 compared to $568.3 million for the three months ended June 30, 2023. The decrease was primarily due to the increased benefit of solar energy tax credits of $29.0 million and lower input costs of $2.9 million, partially offset by higher sales volume of $0.6 million and higher freight costs of $4.8 million.
Previous wording
Selling, general and administrative expenses increased by $0.3 million, or 0.3%, to $98.5 million for the three months ended March 29, 2024 compared to $98.2 million for the three months ended March 31, 2023. The increase was primarily due to increased general spending on business improvement initiatives of $6.8 million partially offset by decreased spending across a variety of other spend categories of $6.5 million.
Current wording
Selling, general and administrative expenses decreased by $5.0 million, or 4.9%, to $98.0 million for the three months ended June 28, 2024 compared to $103.0 million for the three months ended June 30, 2023. The decrease was primarily due to decreased commissions of $1.2 million, decreased variable compensation of $1.8 million, decreased stock compensation of $1.6 million and decreased spending across a variety of other spend categories of $0.4 million.
Previous wording
Intangible asset amortization expense decreased to $14.2 million for the three months ended March 29, 2024 compared to $14.8 million for the three months ended March 31, 2023. The decrease in amortization expense resulted from older intangibles becoming fully amortized.
Current wording
Intangible asset amortization expense decreased to $13.2 million for the three months ended June 28, 2024 compared to $15.2 million for the three months ended June 30, 2023. The decrease in amortization expense resulted from certain intangibles becoming fully amortized.
Previous wording
Interest expense, net, decreased by $1.8 million, or 10.3% to $16.1 million for the six months ended March 29, 2024, compared to $18.0 million for the six months ended March 31, 2023. The decrease is primarily due to decreased interest rates on the Company’s Senior Secured Term Loan Facility.
Current wording
Interest expense, net increased by $1.3 million, or 14.5% to $9.9 million for the three months ended June 28, 2024 compared to $8.7 million for the three months ended June 30, 2023. The increase is primarily due to increased interest rates on the Company’s Senior Secured Term Loan Facility.
Previous wording
Other expense, net decreased to $0.7 million for the three months ended March 29, 2024 compared to $3.9 million other expense for the three months ended March 31, 2023. This decrease is due to impairments recognized in the three months ended March 31, 2023 in connection with the Company’s plans to exit from operations in Russia of $3.7 million.
Current wording
Other expense, net decreased to $0.6 million for the three months ended June 28, 2024 compared to $3.7 million other expense for the three months ended June 30, 2023. This decrease is due to impairments recognized in the three months ended June 30, 2023 in connection with the Company’s plans to exit from operations in Russia of $3.9 million.
Previous wording
The Company’s income tax rate decreased to 18.7% for the three months ended March 29, 2024 compared to 23.5% for the three months ended March 31, 2023. The decrease in the current period effective tax rate was driven by an increase in the excess tax benefit associated with stock compensation and the benefit related to solar energy tax credits enacted as part of the IRA.
Current wording
The Company’s income tax rate increased to 21.9% for the three months ended June 28, 2024 compared to 8.6% for the three months ended June 30, 2023. The increase in the current period effective tax rate was driven by a decrease in the benefit related to solar energy tax credits. In the third quarter of fiscal 2023, the Company recognized a one time $39,799 benefit in its income tax expense related to the credits available as part of the IRA.
Previous wording
Adjusted EBITDA for the three months ended March 29, 2024 decreased by $61.1 million, or 23.8%, to $195.8 million from $256.9 million for the three months ended March 31, 2023. Adjusted EBITDA margin decreased to 33.1% for the three months ended March 29, 2024 compared to 37.7% for the three months ended March 31, 2023. The decrease in Adjusted EBITDA and Adjusted EBITDA margin was largely due to the decrease in average selling prices outpacing decreases in input costs.
Current wording
Adjusted EBITDA for the three months ended June 28, 2024 decreased by $84.0 million, or 31.5%, to $182.6 million from $266.6 million for the three months ended June 30, 2023. Adjusted EBITDA margin decreased to 30.1% for the three months ended June 28, 2024 compared to 37.8% for the three months ended June 30, 2023. The decrease in Adjusted EBITDA and Adjusted EBITDA margin was largely due to the decrease in average selling prices outpacing decreases in input costs.
Previous wording
The consolidated results of operations for the six months ended March 29, 2024 and March 31, 2023 were as follows:
Current wording
The consolidated results of operations for the nine months ended June 28, 2024 and June 30, 2023 were as follows:
Previous wording
Cost of sales decreased by $33.2 million, or 3.2% to $1,009.3 million for the six months ended March 29, 2024 compared to $1,042.5 million for the six months ended March 31, 2023. The decrease in cost of sales was primarily due to lower input costs of $97.2 million and the benefit of solar energy tax credits of $31.9 million. This was partially offset by higher sales volume of $65.5 million across varying product categories within both the Electrical and the Safety & Infrastructure segments and higher freight costs of $20.5 million.
Current wording
Cost of sales decreased by $58.9 million, or 3.7% to $1,552.0 million for the nine months ended June 28, 2024 compared to $1,610.8 million for the nine months ended June 30, 2023. The decrease in cost of sales was primarily due to lower input costs of $102.1 million and the increased benefit of solar energy tax credits of $61.0 million, partially offset by higher sales volume of $67.0 million and higher freight costs of $25.4 million.
Previous wording
Selling, general and administrative expenses increased by $11.0 million, or 5.8% to $199.2 million for the six months ended March 29, 2024, compared to $188.2 million for the six months ended March 31, 2023. The increase was primarily due to increased general spending on business improvement initiatives of $19.4 million, higher commissions and variable compensation of $1.6 million, partially offset by lower costs of $10.0 million spread across a variety of other spend categories.
Current wording
Selling, general and administrative expenses increased by $5.9 million, or 2.0% to $297.1 million for the nine months ended June 28, 2024, compared to $291.2 million for the nine months ended June 30, 2023. The increase was primarily due to increased general spending on business improvement initiatives of $24.0 million and higher variable compensation of $2.6 million, partially offset by lower costs of commissions of $4.1 million, lower stock compensation of $3.3 million and lower costs of $13.3 million spread across a variety of other spend categories.
Previous wording
Intangible asset amortization expense increased to $28.7 million for the six months ended March 29, 2024, compared to $27.6 million for the six months ended March 31, 2023. Increased amortization expense resulted from additional intangible assets acquired in business combinations in fiscal 2023.
Current wording
Intangible asset amortization expense decreased to $41.9 million for the nine months ended June 28, 2024, compared to $42.8 million for the nine months ended June 30, 2023. The decrease in amortization expense resulted from certain intangibles becoming fully amortized.
Previous wording
Interest expense, net decreased by $0.2 million, or 1.8% to $8.3 million for the three months ended March 29, 2024 compared to $8.5 million for the three months ended March 31, 2023. The decrease is primarily due to decreased interest rates on the Company’s Senior Secured Term Loan Facility.
Current wording
Interest expense, net, decreased by $0.6 million, or 2.2% to $26.1 million for the nine months ended June 28, 2024, compared to $26.6 million for the nine months ended June 30, 2023. The decrease is primarily due to decreased interest rates on the Company’s Senior Secured Term Loan Facility.
Previous wording
Other expense, net decreased to $0.7 million of other expense for the six months ended March 29, 2024, compared to $3.9 million of other income for the six months ended March 31, 2023. This decrease is due to impairments recognized in the three months ended March 31, 2023 in connection with the Company’s plans to exit from operations in Russia of $3.7 million.
Current wording
Other expense, net decreased to $1.3 million of other expense for the nine months ended June 28, 2024, compared to $7.6 million of other expense for the nine months ended June 30, 2023. This decrease is due to impairments recognized in the nine months ended June 30, 2023 in connection with the Company’s plans to exit from operations in Russia of $7.6 million.
Previous wording
The Company’s income tax rate decreased to 18.1% for the six months ended March 29, 2024, compared to 22.7% for the six months ended March 31, 2023. The decrease in the current period effective tax rate was driven by an increase in the excess tax benefit associated with stock compensation and the benefit related to solar energy tax credits enacted as part of the IRA.
Current wording
The Company’s income tax rate increased to 19.3% for the nine months ended June 28, 2024, compared to 18.0% for the nine months ended June 30, 2023. The increase in the current period effective tax rate was driven by a decrease in the benefit related to solar energy tax credits. In the third quarter of fiscal 2023, the Company recognized a one time $39,799 benefit in its income tax expense related to the credits available as part of the IRA.
Previous wording
Net sales decreased by $135.2 million, or 10.2%, to $1,184.5 million for the six months ended March 29, 2024, compared to $1,319.7 million for the six months ended March 31, 2023. The decrease in net sales is primarily attributed to decreased average selling prices of $201.4 million partially offset increased sales volume of $61.6 million.
Current wording
Net sales decreased by $234.8 million, or 11.6%, to $1,790.4 million for the nine months ended June 28, 2024, compared to $2,025.3 million for the nine months ended June 30, 2023. The decrease in net sales is primarily attributed to decreased average selling prices of $282.2 million partially offset increased sales volume of $43.4 million.
Previous wording
Adjusted EBITDA for the six months ended March 29, 2024 decreased by $100.6 million, or 20.1%, to $400.1 million from $500.7 million for the six months ended March 31, 2023. Adjusted EBITDA margin decreased to 33.8% for the six months ended March 29, 2024, compared to 37.9% for the six months ended March 31, 2023. The decrease in Adjusted EBITDA and Adjusted EBITDA margin was largely due to the decrease in average selling prices outpacing decreases in input costs.
Current wording
Adjusted EBITDA for the nine months ended June 28, 2024 decreased by $184.6 million, or 24.1%, to $582.7 million from $767.3 million for the nine months ended June 30, 2023. Adjusted EBITDA margin decreased to 32.5% for the nine months ended June 28, 2024, compared to 37.9% for the nine months ended June 30, 2023. The decrease in Adjusted EBITDA and Adjusted EBITDA margin was largely due to the decrease in average selling prices outpacing decreases in input costs.
Previous wording
Adjusted EBITDA decreased $21.6 million, or 32.4%, to $45.0 million for the six months ended March 29, 2024, compared to $66.6 million for the six months ended March 31, 2023. Adjusted EBITDA margin decreased to 11.1% for the six months ended March 29, 2024, compared to 16.2% for the six months ended March 31, 2023. The decrease in Adjusted EBITDA and Adjusted EBITDA margin was largely due to lower average selling prices over increased input costs.
Current wording
Adjusted EBITDA decreased $13.0 million, or 14.8%, to $75.1 million for the nine months ended June 28, 2024, compared to $88.1 million for the nine months ended June 30, 2023. Adjusted EBITDA margin decreased to 12.0% for the nine months ended June 28, 2024, compared to 14.1% for the nine months ended June 30, 2023. The decrease in Adjusted EBITDA and Adjusted EBITDA margin was largely due to lower average selling prices and increased input costs.
Previous wording
We believe we have sufficient liquidity to support our ongoing operations and to invest in future growth and create value for stockholders. Our cash and cash equivalents were $368.1 million as of March 29, 2024, of which $94.6 million was held at non-U.S. subsidiaries. Those cash balances at foreign subsidiaries may be subject to withholding or local country taxes if the Company’s intention to permanently reinvest such income were to change and cash was repatriated to the United States.
Current wording
We believe we have sufficient liquidity to support our ongoing operations and to invest in future growth and create value for stockholders. Our cash and cash equivalents were $303.7 million as of June 28, 2024, of which $99.7 million was held at non-U.S. subsidiaries. Those cash balances at foreign subsidiaries may be subject to withholding or local country taxes if the Company’s intention to permanently reinvest such income were to change and cash was repatriated to the United States.
Previous wording
In general, we require cash to fund working capital investments, acquisitions, capital expenditures, debt repayment, interest payments, taxes, share repurchases and dividend payments. We have access to the ABL Credit Facility to fund operational needs. As of March 29, 2024, there were no outstanding borrowings under the ABL Credit Facility and $2.6 million of letters of credit issued under the ABL Credit Facility. The borrowing base was estimated to be $325.0 million and approximately $322.4 million was available under the ABL Credit Facility as of March 29, 2024. Outstanding letters of credit count as utilization of the commitments under the ABL Credit Facility and reduce the amount available for borrowings.
Current wording
In general, we require cash to fund working capital investments, acquisitions, capital expenditures, debt repayment, interest payments, taxes, share repurchases and dividend payments. We have access to the ABL Credit Facility to fund operational needs. As of June 28, 2024, there were no outstanding borrowings under the ABL Credit Facility and no letters of credit issued under the ABL Credit Facility. The borrowing base was estimated to be $325.0 million and approximately $325.0 million was available under the ABL Credit Facility as of June 28, 2024. Outstanding letters of credit count as utilization of the commitments under the ABL Credit Facility and reduce the amount available for borrowings.
Previous wording
During the six months ended March 29, 2024, the Company was provided $245.3 million by operating activities compared to $403.4 million during the six months ended March 31, 2023. The $158.1 million decrease in cash provided was primarily due to decreased operating income, and an increase of $58.0 million cash used in working capital.
Current wording
During the nine months ended June 28, 2024, the Company was provided $350.0 million by operating activities compared to $563.7 million during the nine months ended June 30, 2023. The $213.7 million decrease in cash provided was primarily due to decreased operating income, and an increase of $94.2 million cash used in working capital.
Previous wording
During the six months ended March 29, 2024, the Company used $79.0 million in investing activities compared to $156.1 million during the six months ended March 31, 2023. Cash used in acquisitions decreased in the first quarter of fiscal 2024 by $77.4 million primarily as a result of the acquisition of Elite Polymer Solutions in the first quarter of fiscal 2023 and no acquisitions in fiscal 2024.
Current wording
During the nine months ended June 28, 2024, the Company used $110.7 million in investing activities compared to $205.9 million during the nine months ended June 30, 2023. The $95.2 million decrease in cash used in investing activities was primarily due to a decrease of $77.3 million cash used in acquisitions as a result of the acquisition of Elite Polymer solutions in the first quarter of fiscal 2023 and no acquisitions in fiscal 2024 and a decrease of $17.4 million in capital expenditures. During the nine months ended June 28, 2024, the Company paid out $6,036 of accrued purchase price primarily related to the fiscal 2022 acquisition of Cascade Poly Pipe & Conduit and Northwest Polymers.
Previous wording
During the six months ended March 29, 2024, the Company used $187.5 million in financing activities compared to $284.3 million used during the six months ended March 31, 2023. The decrease in cash used in financing activities is primarily due to $113.2 million less cash used to repurchase common stock during the six months ended March 29, 2024 compared to the same period in the prior year partially offset by fiscal 2024 dividends paid of $11.7 million and $4.5 million more in issuance of common stock, net of shares withheld for tax.
Current wording
During the nine months ended June 28, 2024, the Company used $324.6 million in financing activities compared to $431.6 million used during the nine months ended June 30, 2023. The decrease in cash used in financing activities is primarily due to $135.0 million less cash used to repurchase common stock during the nine months ended June 28, 2024 compared to the same period in the prior year partially offset by fiscal 2024 dividends paid of $23.2 million and $4.3 million more in issuance of common stock, net of shares withheld for tax.