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Atkore Inc. Announces Fourth Quarter 2021 Results

Fourth-Quarter Highlights

  • Record quarterly net income in the fourth quarter 2021
  • Net income per diluted share increased to $4.26 from $1.11; Adjusted net income per diluted share increased to $4.39 from $1.18
  • Net income increased by $148.3 million to $202.6 million; Adjusted EBITDA increased by $194.7 million to $292.9 million

Fiscal 2021 Highlights

  • Record full year net income
  • Net income per diluted share increased to $12.19 from $3.10; Adjusted net income per diluted share increased to $12.98 from $3.78
  • Net income increased by $435.6 million to $587.9 million; Adjusted EBITDA increased to $897.5 million from $326.6 million
  • Ending cash balance of $576.3 million; net cash provided by operating activities of $572.9 million; Free Cash Flow of $508.4 million

Additional Highlights

  • Awarded U.S. Patent #11,101,056 for new MC GlideTM armored cable product
  • The Board of Directors approved a new share repurchase authorization of $400 million over the next two years

Atkore Inc. (the “Company” or “Atkore”) (NYSE: ATKR) announced earnings for its fiscal 2021 full year and fourth quarter ended September 30, 2021 (“fourth quarter”).

“Atkore delivered outstanding earnings in the fourth quarter and for the full Fiscal Year 2021, driven by our leading position in PVC electrical conduit and solid volume recovery,” remarked Bill Waltz, Atkore President and Chief Executive Officer. “Our MC GlideTM product, which received a U.S. patent in the fourth quarter, continues to be well-received by customers due to its ability to speed up construction times and reduce overall costs – two clear advantages in today’s environment. We remained focused in our execution of the Atkore Business System, which enabled us to generate approximately $573 million in cash from operations this year, strengthen our balance sheet, return $135 million in cash to stockholders via share repurchases and acquire three companies that will enhance and improve our position in the market for years to come.”

Waltz continued, “As we enter fiscal 2022, we continue to invest in our business to drive value with a focus across our three key conduits of growth: advancing new product innovations, such as MC Glide, improving cross-selling opportunities in our focused product categories and strategically engaging our M&A pipeline to strengthen our portfolio. Through these efforts and supported by the megatrends of electrification and digitization, we expect to generate solid cash flow from operating activities, and deploy over $1 billion in cash to drive value creation over the next couple of years. We are increasing our projections for capital expenditures in fiscal 2022 up to approximately $80 to $90 million, and we are pleased to announce a new share repurchase program of $400 million over the next two years. Across Atkore, we are working to create an even stronger business for the future for the benefit of our employees, customers, shareholders and communities.”

The Company reported triple digit percentage year-over-year improvements in net income, adjusted EBITDA, diluted EPS and adjusted EPS for its fourth quarter and full year fiscal 2021.

2021 Fourth Quarter Results

 

Three Months Ended

 

 

 

 

(in thousands)

September 30,

2021

 

September 30,

2020

 

Change

 

Change %

Net sales

 

 

 

 

 

 

 

Electrical

$

697,492

 

 

$

350,631

 

 

$

346,861

 

 

98.9

%

Safety & Infrastructure

227,361

 

 

127,505

 

 

99,856

 

 

78.3

%

Eliminations

(1,122)

 

 

(716)

 

 

(406)

 

 

56.7

%

Consolidated operations

$

923,731

 

 

$

477,420

 

 

$

446,311

 

 

93.5

%

 

 

 

 

 

 

 

 

Net income

$

202,561

 

 

$

54,241

 

 

$

148,320

 

 

273.4

%

 

 

 

 

 

 

 

 

Adjusted EBITDA

 

 

 

 

 

 

 

Electrical

$

283,945

 

 

$

91,907

 

 

$

192,038

 

 

208.9

%

Safety & Infrastructure

29,015

 

 

17,056

 

 

11,959

 

 

70.1

%

Unallocated

(20,029)

 

 

(10,767)

 

 

(9,262)

 

 

86.0

%

Consolidated operations

$

292,931

 

 

$

98,196

 

 

$

194,735

 

 

198.3

%

Net sales for the fourth quarter of 2021 increased to $923.7 million, an increase of 93.5% compared to $477.4 million for the prior-year period, primarily due to higher average selling prices of $391.3 million and higher sales volume of $24.8 million within both the Electrical and Safety & Infrastructure segments. Additionally, entities acquired during fiscal 2021, to include Queen City Plastics and FRE Composites Group, contributed to the increase in net sales by $27.8 million.

Gross profit increased by $210.2 million to $357.3 million for the fourth quarter of 2021, as compared to $147.1 million for the prior-year period. Gross margins increased from 30.8% in the prior year period to 38.7% in the fourth quarter fiscal 2021 due to higher average selling prices of $391.3 million, partially offset by higher input costs of steel, copper and PVC resin of $183.5 million.

Selling, general and administrative expenses increased $28.0 million or 51.1%, to $82.8 million for the fourth quarter of 2021, as compared to $54.8 million for the prior-year period. The increase was primarily driven by commissions of $9.7 million, variable compensation of $8.4 million, increased general spending on business improvement initiatives of $8.7 million, and the acquisition of Queen City Plastics and FRE Composites Group of $2.4 million partially offset by a gain on sale of assets of $3.8 million.

Net income increased $148.3 million to $202.6 million for the fourth quarter of 2021, as compared to $54.2 million for the prior-year period, due to higher operating income of $181.7 million. Adjusted net income increased $148.5 million to $205.1 million compared to $56.5 million for the prior-year period.

Adjusted EBITDA increased $194.7 million, or 198.3%, to $292.9 million for the fourth quarter of 2021, as compared to $98.2 million for the prior-year period. Net income margin increased from 11.4% in the prior-year period to 21.9% and Adjusted EBITDA Margin increased 1,110 basis points from 20.6% to 31.7%.

Net income per diluted share was $4.26 for the fourth quarter of 2021, an increase of $3.15 from the prior-year period. Adjusted net income per diluted share was $4.39 per share for the fourth quarter of 2021 compared to $1.18 for the prior-year period.

Segment Results

Electrical

Electrical net sales increased $346.9 million, or 98.9%, to $697.5 million for the fourth quarter of 2021, as compared to $350.6 million for the prior-year period. The increase in net sales is primarily attributed to increased average selling prices of $304.1 million which were mostly driven by the plastic pipe and conduit category, the metal electrical conduit and fittings product categories and increased net sales of $27.6 million from the acquisitions of Queen City Plastics and FRE Composites Group. Pricing for PVC products, as well as other parts of the business, are expected to return to more normal historical levels over time, but that time is uncertain. Additionally, sales volume increased $11.3 million driven by increased volumes across all product categories.

Adjusted EBITDA increased $192.0 million, or 208.9%, to $283.9 million for the fourth quarter of 2021, as compared to $91.9 million for the prior-year period, and Adjusted EBITDA Margin increased from 26.2% to 40.7%. The increase in Adjusted EBITDA and Adjusted EBITDA margins was largely due to higher average selling prices in relation to changes in input costs, operational efficiencies and contributions from the acquisitions of Queen City Plastics and FRE Composites Group.

Safety & Infrastructure

Safety & Infrastructure net sales increased $99.9 million, or 78.3%, to $227.4 million for the fourth quarter of 2021, as compared to $127.5 million for the prior-year period. The increase is attributed to increased average selling prices of $87.1 million driven by higher input costs of steel, and by higher volumes of $13.5 million primarily driven by increases across all product categories.

Adjusted EBITDA increased $12.0 million, or 70.1%, to $29.0 million for the fourth quarter 2021, as compared to $17.1 million for the prior-year period. Adjusted EBITDA Margin decreased to 12.8% from 13.4%. The Adjusted EBITDA increase was primarily driven by the increase in average selling prices, while lag in pricing created downward pressure on EBITDA margins.

Fiscal 2021 Full-Year Results

Net sales for fiscal 2021 increased $1,162.6 million to $2,928.0 million, an increase of 65.9%, compared to $1,765.4 million for fiscal 2020. The increase in net sales is primarily attributed to increased average selling prices of $977.9 million which were mostly driven by the plastic pipe and conduit category within the Electrical segment and increased net sales of $79.1 million due to the acquisitions of Queen City Plastics and FRE Composites Group. Pricing for PVC products, as well as other parts of the business, are expected to return to more normal historical levels over time, but that time is uncertain. The increase in net sales was also driven by an increase in sales volume of $88.4 million across the majority of product categories within both the Electrical and the Safety & Infrastructure segments.

Gross profit for fiscal 2021 increased $634.3 million to $1,125.6 million, an increase of 129.1%, compared to $491.3 million for fiscal 2020. Gross margin increased to 38.4% in fiscal 2021 compared to 27.8% in fiscal 2020 due to higher average selling prices of $977.9 million, partially offset by higher input costs of steel, copper and PVC resin of $386.5 million.

Selling, general and administrative expenses increased $73.5 million, or 33.5%, to $293.0 million for fiscal 2021 compared to $219.5 million for fiscal 2020. The increase was primarily due to higher variable compensation of $24.1 million, higher sales commission expense of $22.4 million, increased general spending on business improvement initiatives of $10.8 million, the acquisitions of Queen City Plastics and the FRE Composites Group of $5.4 million, and higher stock compensation expense of $3.5 million partially offset by productivity efficiencies of $4.1 million.

Net income increased $435.6 million to $587.9 million for fiscal 2021, as compared to $152.3 million for fiscal 2020. Adjusted net income increased $432.6 million to $614.0 million for fiscal 2021 compared to $181.5 million for fiscal 2020. The increase in both net income and adjusted net income was primarily driven by higher operating income of $559.4 million.

Adjusted EBITDA increased $570.9 million or 174.8%, to $897.5 million for fiscal 2021, as compared to $326.6 million for fiscal 2020. The increase was primarily due higher operating income.

Net income per diluted share on a GAAP basis was $12.19 for fiscal 2021, an increase of $9.09 from fiscal 2020. Adjusted net income per diluted share was $12.98 for fiscal 2021 compared to $3.78 for fiscal 2020.

Liquidity & Capital Resources

During fiscal 2021, operating activities provided $572.9 million of cash, compared to $248.8 million during fiscal year 2020. Free cash flow increased to $508.4 million for fiscal 2021 from $215.0 million in fiscal year 2020. The increase in cash provided by operating activities and free cash flow was primarily due to operating income.

During the year ended September 30, 2021, the Company refinanced its previous debt under the First Lien Term Loan Facility with new debt under the $400 million Senior Notes and $400 million New Senior Secured Term Loan Facility. In the fourth quarter of fiscal 2021, the Company made a voluntary prepayment of $26 million on the New Senior Secured Term Loan Facility. The principal repayment in the fourth quarter, combined with the lower balances after the refinancing transactions and the increases in cash on hand and Adjusted EBITDA resulted in a reduction in the net debt leverage ratio to 0.2 as of September 30, 2021 from 1.6 as of September 30, 2020.

Fiscal 2022 First Quarter Outlook1

The Company expects the first quarter of fiscal 2022 Adjusted EBITDA to be in the range of $230 - $250 million and Adjusted net income per diluted share to be in the range of $3.30 - $3.60.

Full Year 2022 Outlook1

The Company expects fiscal year 2022 Adjusted EBITDA to be in the range of $650-$700 million and Adjusted net income per diluted share to be in the range of $9.20 - $10.00.

The Company notes that the outlook provided may vary due to changes in assumptions or market conditions and other factors described under “Forward-Looking Statements.”

Conference Call Information

Atkore management will host a conference call today, November 18, 2021, at 8 a.m. Eastern time, to discuss the Company’s financial results. The conference call may be accessed by dialing (833) 968-2233 (domestic) or (825) 312-2056 (international). The call will be available for replay until December 9, 2021. The replay can be accessed by dialing (800) 585-8367, or for international callers, (416) 621-4642. The passcode for the live call and the replay is 6898317.

Interested investors and other parties can also listen to a webcast of the live conference call by logging onto the Investor Relations section of the Company's website at http://investors.atkore.com. The online replay will be available on the same website immediately following the call.

To learn more about the Company please visit the company's website at http://investors.atkore.com.

About Atkore Inc.

Atkore is forging a future where our employees, customers, suppliers, shareholders and communities are building better together – a future focused on serving the customer and powering and protecting the world. With a network of manufacturing and distribution facilities worldwide, Atkore is a leading provider of electrical, safety and infrastructure solutions. To learn more, please visit www.atkore.com.

Forward-Looking Statements

This press release contains “forward-looking statements” within the meaning of the Federal Private Securities Litigation Reform Act of 1995. Forward-looking statements include, but are not limited to, statements relating to financial outlook. Some of the forward-looking statements can be identified by the use of forward-looking terms such as “believes,” “expects,” “may,” “will,” “shall,” “should,” “would,” “could,” “seeks,” “aims,” “projects,” “is optimistic,” “intends,” “plans,” “estimates,” “anticipates” or other comparable terms. Forward-looking statements include, without limitation, all matters that are not historical facts. Forward-looking statements are subject to known and unknown risks and uncertainties, many of which may be beyond our control. We caution you that forward-looking statements are not guarantees of future performance or outcomes and that actual performance and outcomes, including, without limitation, our actual results of operations, financial condition and liquidity, and the development of the market in which we operate, may differ materially from those made in or suggested by the forward-looking statements contained in this press release. In addition, even if our results of operations, financial condition and cash flows, and the development of the market in which we operate, are consistent with the forward-looking statements contained in this press release, those results or developments may not be indicative of results or developments in subsequent periods.

A number of important factors, including, without limitation, the risks and uncertainties discussed or referenced under the caption “Risk Factors” in our Annual Report on Form 10-K, filed with the U.S. Securities and Exchange Commission (“SEC”) on November 18, 2021 could cause actual results and outcomes to differ materially from those reflected in the forward-looking statements. Additional factors that could cause actual results and outcomes to differ from those reflected in forward-looking statements include, without limitation: declines in, and uncertainty regarding, the general business and economic conditions in the United States and international markets in which we operate; weakness or another downturn in the United States non-residential construction industry; widespread outbreak of diseases, such as the novel coronavirus (COVID-19) pandemic; changes in prices of raw materials; pricing pressure, reduced profitability, or loss of market share due to intense competition; availability and cost of third-party freight carriers and energy; high levels of imports of products similar to those manufactured by us; changes in federal, state, local and international governmental regulations and trade policies; adverse weather conditions; increased costs relating to future capital and operating expenditures to maintain compliance with environmental, health and safety laws; reduced spending by, deterioration in the financial condition of, or other adverse developments, including inability or unwillingness to pay our invoices on time, with respect to one or more of our top customers; increases in our working capital needs, which are substantial and fluctuate based on economic activity and the market prices for our main raw materials, including as a result of failure to collect, or delays in the collection of, cash from the sale of manufactured products; work stoppage or other interruptions of production at our facilities as a result of disputes under existing collective bargaining agreements with labor unions or in connection with negotiations of new collective bargaining agreements, as a result of supplier financial distress, or for other reasons; changes in our financial obligations relating to pension plans that we maintain in the United States; reduced production or distribution capacity due to interruptions in the operations of our facilities or those of our key suppliers; loss of a substantial number of our third-party agents or distributors or a dramatic deviation from the amount of sales they generate; security threats, attacks, or other disruptions to our information systems, or failure to comply with complex network security, data privacy and other legal obligations or the failure to protect sensitive information; possible impairment of goodwill or other long-lived assets as a result of future triggering events, such as declines in our cash flow projections or customer demand and changes in our business and valuation assumptions; safety and labor risks associated with the manufacture and in the testing of our products; product liability, construction defect and warranty claims and litigation relating to our various products, as well as government inquiries and investigations, and consumer, employment, tort and other legal proceedings; our ability to protect our intellectual property and other material proprietary rights; risks inherent in doing business internationally; changes in foreign laws and legal systems, including as a result of Brexit; our inability to introduce new products effectively or implement our innovation strategies; our inability to continue importing raw materials, component parts and/or finished goods; the incurrence of liabilities and the issuance of additional debt or equity in connection with acquisitions, joint ventures or divestitures and the failure of indemnification provisions in our acquisition agreements to fully protect us from unexpected liabilities; failure to manage acquisitions successfully, including identifying, evaluating, and valuing acquisition targets and integrating acquired companies, businesses or assets; the incurrence of additional expenses, increase in complexity of our supply chain and potential damage to our reputation with customers resulting from regulations related to "conflict minerals"; disruptions or impediments to the receipt of sufficient raw materials resulting from various anti-terrorism security measures; restrictions contained in our debt agreements; failure to generate cash sufficient to pay the principal of, interest on, or other amounts due on our debt; challenges attracting and retaining key personnel or high-quality employees; future changes to tax legislation; failure to generate sufficient cash flow from operations or to raise sufficient funds in the capital markets to satisfy existing obligations and support the development of our business; and other factors described from time to time in documents that we file with the SEC. The Company assumes no obligation to update the information contained herein, which speaks only as of the date hereof.

Non-GAAP Financial Information

This press release includes certain financial information, not prepared in accordance with GAAP. Because not all companies calculate non-GAAP financial information identically (or at all), the presentations herein may not be comparable to other similarly titled measures used by other companies. Further, these measures should not be considered substitutes for the performance measures derived in accordance with GAAP. See non-GAAP reconciliations below in this press release for a reconciliation of these measures to the most directly comparable GAAP financial measures.

Adjusted EBITDA and Adjusted EBITDA Margin

We use Adjusted EBITDA and Adjusted EBITDA Margin in evaluating the performance of our business, in the preparation of our annual operating budgets and as indicators of business performance and profitability. We believe Adjusted EBITDA and Adjusted EBITDA Margin allow us to readily view operating trends, perform analytical comparisons and identify strategies to improve operating performance.

We define Adjusted EBITDA as net income (loss), adjusted to exclude income tax expense, depreciation and amortization, interest expense, net, loss on extinguishment of debt, restructuring charges, stock-based compensation, certain legal matters, transaction costs, gain on purchase of a business, gain on sale of a business and other items, such as inventory reserves and adjustments, loss on disposal of property, plant and equipment, insurance recovery related to damages of property, plant and equipment, release of indemnified uncertain tax positions, and realized or unrealized gain (loss) on foreign currency impacts of intercompany loans and related forward currency derivatives. We define Adjusted EBITDA Margin as Adjusted EBITDA as a percentage of Net sales.

We believe Adjusted EBITDA and Adjusted EBITDA Margin, when presented in conjunction with comparable GAAP measures, are useful for investors because management uses Adjusted EBITDA and Adjusted EBITDA Margin in evaluating the performance of our business.

Adjusted Net Income and Adjusted Net Income per Share

We use Adjusted net income and Adjusted net income per share in evaluating the performance of our business and profitability. Management believes that these measures provide useful information to investors by offering additional ways of viewing the Company's results that, when reconciled to the corresponding GAAP measure provide an indication of performance and profitability excluding the impact of unusual and or non-cash items. We define Adjusted net income as net income before loss on extinguishment of debt, stock-based compensation, intangible asset amortization, gain on purchase of a business, certain legal matters and other items, and the income tax expense or benefit on the foregoing adjustments that are subject to income tax. We define Adjusted net income per share as basic and diluted net income per share excluding the per share impact of gain (loss) on extinguishment of debt, stock-based compensation, intangible asset amortization, gain on sale of a business, certain legal matters and other items, and the income tax expense or benefit on the foregoing adjustments that are subject to income tax.

Leverage Ratio - Net debt/Adjusted EBITDA

We define leverage ratio as the ratio of net debt (total debt less cash and cash equivalents) to Adjusted EBITDA on a trailing twelve-month basis. We believe the leverage ratio is useful to investors as an alternative liquidity measure.

Free Cash Flow

We define Free Cash Flow as net cash provided by operating activities less capital expenditures. We believe that Free Cash Flow provides meaningful information regarding the Company’s liquidity.

ATKORE INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

 

Three Months Ended

 

Fiscal Year Ended

(in thousands, except per share data)

September 30,

2021

 

September 30,

2020

 

September 30,

2021

 

September 30,

2020

Net sales

$

923,731

 

 

$

477,420

 

 

$

2,928,014

 

 

$

1,765,421

 

Cost of sales

566,431

 

 

330,366

 

 

1,802,401

 

 

1,274,107

 

Gross profit

357,300

 

 

147,054

 

 

1,125,613

 

 

491,314

 

Gross Margin

38.7

%

 

30.8

%

 

38.4

%

 

27.8

%

Selling, general and administrative

82,769

 

 

54,762

 

 

293,019

 

 

219,496

 

Intangible asset amortization

8,581

 

 

8,052

 

 

33,644

 

 

32,262

 

Operating income

265,950

 

 

84,240

 

 

798,950

 

 

239,556

 

Interest expense, net

8,139

 

 

9,457

 

 

32,899

 

 

40,062

 

Loss on extinguishment of debt

 

 

273

 

 

4,202

 

 

273

 

Other income, net

(9,972)

 

 

(315)

 

 

(18,152)

 

 

(2,777)

 

Income before income taxes

267,783

 

 

74,825

 

 

780,001

 

 

201,998

 

Income tax expense

65,222

 

 

20,584

 

 

192,144

 

 

49,696

 

Net income

$

202,561

 

 

$

54,241

 

 

$

587,857

 

 

$

152,302

 

 

 

 

 

 

 

 

 

Net income per share

 

 

 

 

 

 

 

Basic

$

4.32

 

 

$

1.12

 

 

$

12.38

 

 

$

3.15

 

Diluted

$

4.26

 

 

$

1.11

 

 

$

12.19

 

 

$

3.10

 

 

ATKORE INC.

CONSOLIDATED BALANCE SHEETS

 

(in thousands, except share and per share data)

September 30,

2021

 

September 30,

2020

Assets

 

 

 

Current Assets:

 

 

 

Cash and cash equivalents

$

576,289

 

 

$

284,471

 

Accounts receivable, less allowance for current and expected credit losses of $2,510 and

$3,168, respectively

524,926

 

 

298,242

 

Inventories, net

285,989

 

 

199,095

 

Prepaid expenses and other current assets

34,248

 

 

46,868

 

Total current assets

1,421,452

 

 

828,676

 

Property, plant and equipment, net

275,622

 

 

243,891

 

Intangible assets, net

241,204

 

 

255,349

 

Goodwill

199,048

 

 

188,239

 

Right-of-use assets, net

41,113

 

 

38,692

 

Deferred income taxes

29,693

 

 

687

 

Other long-term assets

1,967

 

 

2,991

 

Total Assets

$

2,210,099

 

 

$

1,558,525

 

Liabilities and Equity

 

 

 

Current Liabilities:

 

 

 

Accounts payable

$

243,164

 

 

$

142,601

 

Income tax payable

72,953

 

 

1,360

 

Accrued compensation and employee benefits

57,437

 

 

32,836

 

Customer liabilities

80,324

 

 

35,802

 

Lease obligations

11,785

 

 

15,786

 

Other current liabilities

59,273

 

 

47,785

 

Total current liabilities

524,936

 

 

276,170

 

Long-term debt

758,386

 

 

803,736

 

Long-term lease obligations

30,236

 

 

24,143

 

Deferred income taxes

16,746

 

 

22,525

 

Other long-term tax liabilities

735

 

 

1,619

 

Pension liabilities

3,819

 

 

40,023

 

Other long-term liabilities

10,505

 

 

11,899

 

Total Liabilities

1,345,363

 

 

1,180,115

 

Equity:

 

 

 

Common stock, $0.01 par value, 1,000,000,000 shares authorized, 45,997,159 and 47,407,023 shares issued and outstanding, respectively

461

 

 

475

 

Treasury stock, held at cost, 260,900 and 260,900 shares, respectively

(2,580)

 

 

(2,580)

 

Additional paid-in capital

506,921

 

 

487,223

 

Retained earnings

388,660

 

 

(64,154)

 

Accumulated other comprehensive loss

(28,726)

 

 

(42,554)

 

Total Equity

864,736

 

 

378,410

 

Total Liabilities and Equity

$

2,210,099

 

 

$

1,558,525

 

 

ATKORE INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

 

(in thousands)

September 30, 2021

 

September 30, 2020

Operating activities

 

 

 

Net income

$

587,857

 

 

$

152,302

 

Adjustments to reconcile net income to net cash provided by operating activities

 

 

 

Depreciation and amortization

78,557

 

 

74,470

 

Amortization of debt issuance costs and original issue discount

2,497

 

 

1,876

 

Deferred income taxes

(43,306)

 

 

4,483

 

Loss on extinguishment of debt

4,202

 

 

273

 

Provision for losses on accounts receivable and inventory

645

 

 

5,014

 

Stock-based compensation expense

17,047

 

 

13,064

 

Amortization of right of use asset

14,515

 

 

14,803

 

Loss on disposal of property, plant, & equipment

141

 

 

3,001

 

Gain on purchase of business

(731)

 

 

 

Other adjustments to net income

382

 

 

(844)

 

Changes in operating assets and liabilities, net of effects from acquisitions

 

 

 

Accounts receivable

(219,659)

 

 

16,920

 

Inventories

(81,544)

 

 

24,642

 

Prepaid expenses and other current assets

(6,462)

 

 

(11,164)

 

Accounts payable

98,444

 

 

(5,835)

 

Income taxes

80,291

 

 

(6,261)

 

Accrued and other liabilities

63,459

 

 

(32,942)

 

Other, net

(23,433)

 

 

(5,040)

 

Net cash provided by operating activities

572,902

 

 

248,762

 

Investing activities

 

 

 

Capital expenditures

(64,474)

 

 

(33,770)

 

Insurance proceeds from sale of properties, plant and equipment

9,627

 

 

2,337

 

Proceeds from sale of properties, plant and equipment

81

 

 

3,920

 

Acquisitions of businesses, net of cash acquired

(43,195)

 

 

 

Net cash used for investing activities

(97,961)

 

 

(27,513)

 

Financing activities

 

 

 

Repayments of short-term debt

(4,000)

 

 

 

Issuance of long-term debt

798,000

 

 

 

Repayments of long-term debt

(835,120)

 

 

(40,000)

 

Issuance of common stock, net of taxes withheld

2,660

 

 

(2,972)

 

Repurchase of common stock

(135,066)

 

 

(15,011)

 

Payments for debt financing costs and fees

(10,930)

 

 

(3,204)

 

Other, net

 

 

8

 

Net cash used for financing activities

(184,456)

 

 

(61,179)

 

Effects of foreign exchange rate changes on cash and cash equivalents

1,333

 

 

986

 

Increase (decrease) in cash and cash equivalents

291,818

 

 

161,056

 

Cash and cash equivalents at beginning of period

284,471

 

 

123,415

 

Cash and cash equivalents at end of period

$

576,289

 

 

$

284,471

 

(in thousands)

September 30, 2021

 

September 30, 2020

Supplementary Cash Flow information

 

 

 

Interest paid

$

23,726

 

 

$

38,791

 

Income taxes paid, net of refunds

155,114

 

 

50,993

 

Capital expenditures, not yet paid

1,094

 

 

1,278

 

Operating cash flows from cash paid on operating lease liabilities

13,035

 

 

12,939

 

Operating lease right-of-use assets obtained in exchange for lease liabilities

13,538

 

 

15,278

 

 

 

 

 

Free Cash Flow:

 

 

 

Net cash provided by operating activities

572,902

 

 

248,762

 

Capital expenditures

(64,474)

 

 

(33,770)

 

Free Cash Flow:

508,428

 

 

214,992

 

The following table presents reconciliations of Adjusted EBITDA to net income for the periods presented:

 

 

Three Months Ended

 

Fiscal Year Ended

(in thousands)

 

September 30,

2021

 

September 30,

2020

 

September 30,

2021

 

September 30,

2020

Net income

 

$

202,561

 

 

$

54,241

 

 

$

587,857

 

 

$

152,302

 

Income tax expense

 

65,222

 

 

20,584

 

 

192,144

 

 

49,696

 

Depreciation and amortization

 

20,082

 

 

18,946

 

 

78,557

 

 

74,470

 

Interest expense, net

 

8,139

 

 

9,457

 

 

32,899

 

 

40,062

 

Stock-based compensation

 

2,889

 

 

3,762

 

 

17,047

 

 

13,064

 

Loss on extinguishment of debt

 

 

 

273

 

 

4,202

 

 

273

 

Gain on purchase of a business

 

 

 

 

 

(731)

 

 

 

Other (a)

 

(5,962)

 

 

(9,067)

 

 

(14,428)

 

 

(3,232)

 

Adjusted EBITDA

 

$

292,931

 

 

$

98,196

 

 

$

897,547

 

 

$

326,635

 

 

 

 

 

 

 

 

 

 

(a) Represents other items, such as inventory reserves and adjustments, loss on disposal of property, plant and equipment, insurance recovery related to damages of property, plant and equipment, release of indemnified uncertain tax positions and realized or unrealized gain (loss) on foreign currency impacts of intercompany loans, restructuring charges, transaction costs and related forward currency derivatives.

The following tables represent calculations of Adjusted EBITDA Margin by segment for the periods presented:

 

Fiscal year ended

 

September 30, 2021

 

September 30, 2020

(in thousands)

Net sales

 

Adjusted

EBITDA

 

Adjusted

EBITDA

Margin

 

Net sales

 

Adjusted

EBITDA

 

Adjusted

EBITDA

Margin

Electrical

$

2,233,299

 

 

$

873,868

 

 

39.1

%

 

$

1,270,547

 

 

$

292,809

 

 

23.0

%

Safety & Infrastructure

698,320

 

 

$

81,827

 

 

11.7

%

 

497,523

 

 

$

67,821

 

 

13.6

%

Eliminations

(3,605)

 

 

 

 

 

 

(2,649)

 

 

 

 

 

Consolidated operations

$

2,928,014

 

 

 

 

 

 

$

1,765,421

 

 

 

 

 

 

Three Months Ended

 

September 30, 2021

 

September 30, 2020

(in thousands)

Net sales

 

Adjusted

EBITDA

 

Adjusted

EBITDA

Margin

 

Net sales

 

Adjusted

EBITDA

 

Adjusted

EBITDA

Margin

Electrical

$

697,492

 

 

$

283,945

 

 

40.7

%

 

$

350,631

 

 

$

91,907

 

 

26.2

%

Safety & Infrastructure

227,361

 

 

$

29,015

 

 

12.8

%

 

127,505

 

 

$

17,056

 

 

13.4

%

Eliminations

(1,122)

 

 

 

 

 

 

(716)

 

 

 

 

 

Consolidated operations

$

923,731

 

 

 

 

 

 

$

477,420

 

 

 

 

 

The following table presents calculations of Adjusted EBITDA Margin for Atkore Inc. for the periods presented:

 

Three Months Ended

 

Fiscal Year Ended

(in thousands)

September 30, 2021

 

September 30, 2020

 

Change

 

% Change

 

September 30, 2021

 

September 30, 2020

 

Change

 

% Change

Net sales

$

923,731

 

 

$

477,420

 

 

$

446,311

 

 

93.5

%

 

$

2,928,014

 

 

$

1,765,421

 

 

$

1,162,593

 

 

65.9

%

Adjusted EBITDA

$

292,931

 

 

$

98,196

 

 

$

194,735

 

 

198.3

%

 

$

897,547

 

 

$

326,635

 

 

$

570,912

 

 

174.8

%

Adjusted EBITDA Margin

31.7

%

 

20.6

%

 

 

 

 

 

30.7

%

 

18.5

%

 

 

 

 

The following table presents reconciliations of Adjusted net income to net income for the periods presented:

 

Three Months Ended

 

Fiscal Year Ended

(in thousands, except per share data)

September 30,

2021

 

September 30,

2020

 

September 30,

2021

 

September 30,

2020

Net income

$

202,561

 

 

$

54,241

 

 

$

587,857

 

 

$

152,302

 

Stock-based compensation

2,889

 

 

3,762

 

 

17,047

 

 

13,064

 

Intangible asset amortization

8,581

 

 

8,052

 

 

33,644

 

 

32,262

 

Gain on purchase of business

 

 

 

 

(731)

 

 

 

Loss on extinguishment of debt

 

 

273

 

 

4,202

 

 

273

 

Other (a)

(8,149)

 

 

(9,029)

 

 

(19,281)

 

 

(6,712)

 

Pre-tax adjustments to net income

3,321

 

 

3,058

 

 

34,881

 

 

38,887

 

Tax effect

(830)

 

 

(765)

 

 

(8,720)

 

 

(9,722)

 

Adjusted net income

$

205,052

 

 

$

56,534

 

 

$

614,018

 

 

$

181,467

 

 

 

 

 

 

 

 

 

Weighted-Average Diluted Common Shares Outstanding

46,682

 

 

47,925

 

 

47,306

 

 

48,044

 

Net income per diluted share (b)

$

4.26

 

 

$

1.11

 

 

$

12.19

 

 

$

3.10

 

Adjusted net income per diluted share (c)

$

4.39

 

 

$

1.18

 

 

$

12.98

 

 

$

3.78

 

(a) Represents other items, such as inventory reserves and adjustments, loss on disposal of property, plant and equipment, insurance recovery related to damages of property, plant and equipment, release of indemnified uncertain tax positions and realized or unrealized gain (loss) on foreign currency impacts of intercompany loans and related forward currency derivatives.

(b) The Company calculates basic and diluted net income per common share using the two-class method. Under the two-class method, net earnings are allocated to each class of common stock and participating securities as if all the net earnings for the period had been distributed. The Company's participating securities consist of share-based payment awards that contain a non-forfeitable right to receive dividends and therefore are considered to participate in undistributed earnings with common stockholders. Included within the calculation of net income per diluted share is 11,380 and 3,356 of undistributed earnings allocated to participating securities for fiscal years ended 2021 and 2020. Included within the calculation of net income per diluted share is See Note 8, “Earnings Per Share” in our Annual Report on Form 10-K.

 

(c) Adjusted net income per diluted share is calculated by taking adjusted net income and divided by the weighted-average diluted common shares outstanding.

The following table presents reconciliations of Net Debt to Total Debt for the periods presented:

(in thousands)

 

September 30,

2021

 

 

September 30,

2020

 

 

September 30,

2019

 

Short-term debt and current maturities of long-term debt

 

$

 

 

 

$

 

 

 

$

 

 

Long-term debt

 

758,386

 

 

 

803,736

 

 

 

845,317

 

 

Total Debt

 

758,386

 

 

 

803,736

 

 

 

845,317

 

 

Less cash and cash equivalents

 

576,289

 

 

 

284,471

 

 

 

123,415

 

 

Net Debt

 

$

182,097

 

 

 

$

519,265

 

 

 

$

721,902

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA

 

$

897,547

 

 

 

$

326,635

 

 

 

$

324,408

 

 

 

 

 

 

 

 

 

 

 

 

Total debt/Adjusted EBITDA

 

0.8

 

x

 

2.5

 

x

 

2.6

 

x

Net debt/Adjusted EBITDA

 

0.2

 

x

 

1.6

 

x

 

2.2

 

x

ATKORE INC.

HISTORICAL SEGMENT INFORMATION

The tables below present Net sales for fiscal years ended 2020, 2019 and 2018 and the quarterly periods of fiscal 2020:

 

Net sales

 

Fiscal year ended

(in thousands)

September 30, 2020

 

September 30, 2019

 

September 30, 2018

Electrical

$

1,270,547

 

 

$

1,390,327

 

 

$

1,327,437

 

Safety & Infrastructure

497,523

 

 

527,511

 

 

509,401

 

Eliminations

(2,649)

 

 

(1,300)

 

 

(1,699)

 

Consolidated operations

$

1,765,421

 

 

$

1,916,538

 

 

$

1,835,139

 

 

 

Net sales

 

Three months ended

(in thousands)

September 30, 2020

 

June 26, 2020

 

March 27, 2020

 

December 27, 2019

Electrical

$

350,631

 

 

$

272,151

 

 

$

323,218

 

 

$

324,547

 

Safety & Infrastructure

127,505

 

 

113,380

 

 

133,130

 

 

123,508

 

Eliminations

(716)

 

 

(632)

 

 

(694)

 

 

(607)

 

Consolidated operations

$

477,420

 

 

$

384,899

 

 

$

455,654

 

 

$

447,448

 

The tables below present Adjusted EBITDA for fiscal years ended 2020, 2019 and 2018 and the quarterly periods of fiscal 2020:

 

Adjusted EBITDA

 

Fiscal year ended

(in thousands)

September 30, 2020

 

September 30, 2019

 

September 30, 2018

Electrical

$

292,809

 

 

$

285,217

 

 

$

250,853

 

Safety & Infrastructure

$

67,821

 

 

$

77,407

 

 

$

55,755

 

 

Adjusted EBITDA

 

Three months ended

(in thousands)

September 30, 2020

 

June 26, 2020

 

March 27, 2020

 

December 27, 2019

Electrical

$

91,908

 

 

$

55,549

 

 

$

77,233

 

 

$

68,119

 

Safety & Infrastructure

$

17,056

 

 

$

14,150

 

 

$

17,888

 

 

$

18,727

 


1 Reconciliations of the forward-looking full-year and fiscal first quarter 2022 outlook for Adjusted EBITDA and Adjusted net income per diluted share are not being provided as the Company does not currently have sufficient data to accurately estimate the variables and individual adjustments for such reconciliations.

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