Atkore Q1 2026 Atkore Inc Earnings Call | AllMind AI Earnings | AllMind AI
Q1 2026 Atkore Inc Earnings Call
Speaker #2: My name is Carly, and I will be your conference operator today. At this time, I would like to welcome everyone to Atkore's first quarter fiscal year 2026 earnings conference call.
Speaker #2: All lines have been placed in a listen-only mode. After the speaker's remarks, there will be a question-and-answer session. If you would like to ask a question during this time, simply press star, followed by the number one on your telephone keypad.
Speaker #2: If you would like to withdraw your question, press star one again. As a reminder, this conference is being recorded. Thank you. I would now like to turn the conference over to your host, Matt Kline.
Speaker #2: Vice President of Treasury and Investor Relations. You may begin.
Speaker #3: Thank you, and good morning, everyone. I'm joined today by Bill Waltz, President and CEO; John Deitzer, Chief Financial Officer; and John Pregenzer, Chief Operating Officer and President of Electrical.
Matthew Kline: Thank you, and good morning, everyone. I'm joined today by Bill Waltz, President and CEO, John Deitzer, Chief Financial Officer, and John Pregenzer, Chief Operating Officer and President of Electrical. We will take questions at the conclusion of the call. I would like to remind everyone that during this call, we may make projections or forward-looking statements regarding future events or financial performance of the company. Such statements involve risks and uncertainties such that actual results may differ materially. Please refer to our SEC filings and today's press release, which identify important factors that could cause actual results to differ materially from those contained in our projections or forward-looking statements. In addition, any reference in our discussion today to EBITDA means adjusted EBITDA, and any reference to EPS or adjusted EPS means adjusted diluted earnings per share. Adjusted EBITDA and adjusted diluted earnings per share are non-GAAP measures.
Matthew Kline: Thank you, and good morning, everyone. I'm joined today by Bill Waltz, President and CEO, John Deitzer, Chief Financial Officer, and John Pregenzer, Chief Operating Officer and President of Electrical. We will take questions at the conclusion of the call. I would like to remind everyone that during this call, we may make projections or forward-looking statements regarding future events or financial performance of the company. Such statements involve risks and uncertainties such that actual results may differ materially. Please refer to our SEC filings and today's press release, which identify important factors that could cause actual results to differ materially from those contained in our projections or forward-looking statements. In addition, any reference in our discussion today to EBITDA means adjusted EBITDA, and any reference to EPS or adjusted EPS means adjusted diluted earnings per share. Adjusted EBITDA and adjusted diluted earnings per share are non-GAAP measures.
Speaker #3: We will take questions at the conclusion of the call. I would like to remind everyone that during this call, we may make projections or forward-looking statements regarding future events or financial performance of the company.
Speaker #3: Such statements involve risks and uncertainties such that actual results may differ materially. Please refer to our SEC filings and today's press release which identify important factors that could cause actual results to differ materially from those contained in our projections or forward-looking statements.
Speaker #3: In addition, any reference in our discussion today to EBITDA A means Adjusted EBITDA. And any reference to EPS or Adjusted EPS means Adjusted Diluted Earnings Per Share.
Speaker #3: Adjusted EBITDA and adjusted diluted earnings per share are non-GAAP measures. Reconciliations of non-GAAP measures and a presentation of the most comparable GAAP measures are available in the appendix to today's presentation.
Matthew Kline: Reconciliations of non-GAAP measures and a presentation of the most comparable GAAP measures are available in the appendix to today's presentation. With that, I'll turn it over to Bill.
Matthew Kline: Reconciliations of non-GAAP measures and a presentation of the most comparable GAAP measures are available in the appendix to today's presentation. With that, I'll turn it over to Bill.
Speaker #3: With that, I'll turn it over to
Speaker #3: Bill. Thanks, Matt.
William Waltz: Thanks, Matt, and good morning, everyone. Starting on slide 3, we are pleased with our Q1 performance. We achieved net sales of $656 million and Adjusted EBITDA of $69 million. Both were above our outlook range. Our $0.83 of Adjusted EPS was also above the top end of our outlook range. Organic volume increased 2% in Q1, driven by strong performance in our electrical segment. Our teams have been focused on improving manufacturing efficiency and controlling costs, which has helped generate over $30 million of productivity savings year-over-year. We also continue to advance our strategic alternative process to evaluate opportunities to strengthen our business and maximize value for our shareholders. During the quarter, we completed the divestiture of our Tectron mechanical tube product line and manufacturing facility.
William Waltz: Thanks, Matt, and good morning, everyone. Starting on slide 3, we are pleased with our Q1 performance. We achieved net sales of $656 million and Adjusted EBITDA of $69 million. Both were above our outlook range. Our $0.83 of Adjusted EPS was also above the top end of our outlook range. Organic volume increased 2% in Q1, driven by strong performance in our electrical segment. Our teams have been focused on improving manufacturing efficiency and controlling costs, which has helped generate over $30 million of productivity savings year-over-year. We also continue to advance our strategic alternative process to evaluate opportunities to strengthen our business and maximize value for our shareholders. During the quarter, we completed the divestiture of our Tectron mechanical tube product line and manufacturing facility.
Speaker #4: And good morning, everyone. Starting on slide three, we are pleased with our first quarter performance. We achieved net sales of $656 million and adjusted EBITDA of $69 million.
Speaker #4: Both were above our outlook range. Our 83 cents of adjusted EPS was also above the top end of our outlook range. Organic volume increased 2% in the first quarter, driven by strong performance in our electrical segment.
Speaker #4: Our teams have been focused on improving manufacturing efficiency and controlling costs, which has helped generate over $30 million of productivity savings year over year.
Speaker #4: We also continue to advance our strategic alternative process to evaluate opportunities to strengthen our business and maximize value for our shareholders. During the quarter, we completed the divestiture of our Tectron mechanical tube product line and manufacturing facility.
William Waltz: The sale further enhances our focus on the electrical infrastructure portfolio and is aligned with our broader 80/20 Initiative aimed at directing our manufacturing capacity to the electrical end markets. In the second fiscal quarter, we expect to complete the previously announced exit of three manufacturing facilities. We will continue to provide updates on our ongoing strategic alternative process as appropriate, as we move forward. I'd also like to highlight the release of our fiscal year 2025 sustainability report, which we recently published. This report details our ongoing initiatives and accomplishments on our 2025 goals. Looking ahead to the remainder of 2026, we are on track to deliver our FY 2026 outlook that we presented in November. We expect our net sales to be in a range of $2.95 to 3.05 billion.
William Waltz: The sale further enhances our focus on the electrical infrastructure portfolio and is aligned with our broader 80/20 Initiative aimed at directing our manufacturing capacity to the electrical end markets. In the second fiscal quarter, we expect to complete the previously announced exit of three manufacturing facilities. We will continue to provide updates on our ongoing strategic alternative process as appropriate, as we move forward. I'd also like to highlight the release of our fiscal year 2025 sustainability report, which we recently published. This report details our ongoing initiatives and accomplishments on our 2025 goals. Looking ahead to the remainder of 2026, we are on track to deliver our FY 2026 outlook that we presented in November. We expect our net sales to be in a range of $2.95 to 3.05 billion.
Speaker #4: The sale further enhances our focus on the electrical infrastructure portfolio and is in line with our broader 80/20 initiative aimed at directing our manufacturing capacity to the electrical end markets.
Speaker #4: And in the second fiscal quarter, we expect to complete the previously announced exit of three manufacturing facilities. We will continue to provide updates on our ongoing strategic alternative process as appropriate as we move forward.
Speaker #4: I'd also please to highlight the release of our fiscal year 2025 sustainability report, which we recently published. This report details our ongoing initiatives and accomplishments of our 2025 goals.
Speaker #4: Looking ahead to the remainder of 2026, we are on track to deliver our FY26 outlook that we presented in November. We expect our net sales to be in a range of $2.95 billion and $3.05 billion.
William Waltz: Our net sales outlook adjusts for approximately $40 million of annual sales related to our Tectron mechanical tube product line, resulting from the divestiture. Our Adjusted EBITDA, between $340 and $360 million, remains unchanged. Adjusted EPS is expected to be in the range of $5.05 to $5.55. We remain focused on our core electrical infrastructure portfolio, which is supported by broader mega trends and where we see the most opportunity to grow. Our team is focused on continuous improvement initiatives in our plants and providing unmatched service and quality for our customers. By doing so, we are confident in our ability to drive sales volume and profitability. I'd like to take a moment to thank all of our employees for everything they do to support our key stakeholders.
William Waltz: Our net sales outlook adjusts for approximately $40 million of annual sales related to our Tectron mechanical tube product line, resulting from the divestiture. Our Adjusted EBITDA, between $340 and $360 million, remains unchanged. Adjusted EPS is expected to be in the range of $5.05 to $5.55. We remain focused on our core electrical infrastructure portfolio, which is supported by broader mega trends and where we see the most opportunity to grow. Our team is focused on continuous improvement initiatives in our plants and providing unmatched service and quality for our customers. By doing so, we are confident in our ability to drive sales volume and profitability. I'd like to take a moment to thank all of our employees for everything they do to support our key stakeholders.
Speaker #4: Our net sales outlook adjusts for approximately $40 million of annual sales related to our Tectron mechanical tube product line resulting from the divestiture.
Speaker #4: Our adjusted EBITDA between 340 and 360 million dollars remains unchanged. Adjusted EPS is expected to be in the range of 5 dollars and 5 cents, and 5 dollars and 55 cents.
Speaker #4: We remain focused on our core electrical infrastructure portfolio, which is supported by broader megatrends and where we see the most opportunity to grow. Our team is focused on continuous improvement initiatives in our plants and providing unmatched service and quality for our customers.
Speaker #4: By doing so, we are confident in our ability to drive sales volume and profitability. I'd like to take a moment to thank all of our employees for everything they do to support our key stakeholders.
Speaker #4: With that, I'll now turn the call over to John Deitzer to talk through the results from the quarter and provide more details on our...
William Waltz: With that, I'll now turn the call over to John Deitzer to talk through the results from the quarter and provide more details on our outlook.
William Waltz: With that, I'll now turn the call over to John Deitzer to talk through the results from the quarter and provide more details on our outlook.
Speaker #4: outlook. Thank you, Bill,
John Deitzer: Thank you, Bill, and good morning, everyone. Moving to our consolidated results on slide four. In Q1, we achieved net sales of $656 million and adjusted EBITDA of $69 million. Adjusted EPS was $0.83 per share, compared to $1.63 in the prior year. Our tax rate in Q1 was 3%, a decrease from 21% in the prior year. The Q1 tax rate reflects a one-time discrete benefit associated with tax planning related to a foreign operation. Turning to slide five and our consolidated bridges. Organic volumes were up 2% compared to Q1 of fiscal 2025. Our average selling prices declined 3% during the quarter, most of which came from our PVC conduit products, which were partially offset by increased average selling prices for our steel conduit products.
John Deitzer: Thank you, Bill, and good morning, everyone. Moving to our consolidated results on slide four. In Q1, we achieved net sales of $656 million and adjusted EBITDA of $69 million. Adjusted EPS was $0.83 per share, compared to $1.63 in the prior year. Our tax rate in Q1 was 3%, a decrease from 21% in the prior year. The Q1 tax rate reflects a one-time discrete benefit associated with tax planning related to a foreign operation. Turning to slide five and our consolidated bridges. Organic volumes were up 2% compared to Q1 of fiscal 2025. Our average selling prices declined 3% during the quarter, most of which came from our PVC conduit products, which were partially offset by increased average selling prices for our steel conduit products.
Speaker #3: And good morning, everyone. Moving to our consolidated results on slide four: In the first quarter, we achieved net sales of $656 million and adjusted EBITDA of $69 million.
Speaker #3: Adjusted EPS was 83 cents per share, compared to 1 dollar and 63 cents in the prior year. Our tax rate in the first quarter was 3%, a decrease from 21% in the prior year.
Speaker #3: The first quarter tax rate reflects a one-time discrete benefit associated with tax planning related to a foreign operation. Turning to slide five, in our consolidated bridges, organic volumes were up 2% compared to the first quarter of fiscal '25.
Speaker #3: Our average selling prices declined 3% during the quarter, most of which came from our PVC conduit products, which were partially offset by increased average selling prices for our steel conduit products.
Speaker #3: Moving to slide six, our 2% volume increase during the first quarter was driven primarily by our metal electrical conduit and our plastic pipe conduit product categories.
John Deitzer: Moving to slide 6. Our 2% volume increase during Q1 was driven primarily from our metal electrical conduit and our plastic pipe conduit product categories. Both product categories benefited from healthy non-residential end market demand. Our metal framing, cable management, and construction service businesses saw lower volume compared to the prior year, primarily due to the timing of certain project-based work. We expect growth from these businesses throughout the duration of the year. Our mechanical tube business, which includes our solar-related products, is also expected to grow throughout the year due to the expected timing of large utility scale solar projects. As we previously communicated, we are shifting certain available capacity from our existing non-solar mechanical products to our electrical conduit products as part of our 80/20 Initiative. We would expect that to continue throughout the year and help support electrical end market demand.
John Deitzer: Moving to slide 6. Our 2% volume increase during Q1 was driven primarily from our metal electrical conduit and our plastic pipe conduit product categories. Both product categories benefited from healthy non-residential end market demand. Our metal framing, cable management, and construction service businesses saw lower volume compared to the prior year, primarily due to the timing of certain project-based work. We expect growth from these businesses throughout the duration of the year. Our mechanical tube business, which includes our solar-related products, is also expected to grow throughout the year due to the expected timing of large utility scale solar projects. As we previously communicated, we are shifting certain available capacity from our existing non-solar mechanical products to our electrical conduit products as part of our 80/20 Initiative. We would expect that to continue throughout the year and help support electrical end market demand.
Speaker #3: Both product categories benefited from healthy non-residential end market demand. Our metal framing, cable management, and construction service businesses saw lower volume compared to the prior year, primarily due to the timing of certain project-based work.
Speaker #3: We expect growth from these businesses throughout the duration of the year. Our mechanical tube business, which includes our solar-related products, is also expected to grow throughout the year, due to the expected timing of large utility-scale solar projects.
Speaker #3: As we previously communicated, we are shifting certain available capacity from our existing non-solar mechanical products to our electrical conduit products as part of our 80/20 initiative.
Speaker #3: We would expect that to continue throughout the year, to help support electrical end market demand. Overall, we continue to expect mid-single-digit volume growth for the full year.
John Deitzer: Overall, we continue to expect mid-single-digit volume growth for the full year. Turning to slide 7. Net sales increased year-over-year in our electrical segment, driven by higher volume growth, offset by lower selling prices. Adjusted EBITDA margins compressed in our electrical segment due to higher material costs and lower average selling prices. Net sales in our S&I segment were lower compared to the previous year, primarily due to lower volume. Adjusted EBITDA and adjusted EBITDA margins both increased year-over-year due to increased productivity. As Bill mentioned earlier, Atkore recognized over $30 million of year-over-year productivity, most of which was generated from our S&I segment. Turning to slide 8. We ended the quarter in a favorable cash position, despite a year-over-year decline in our operating cash flow.
John Deitzer: Overall, we continue to expect mid-single-digit volume growth for the full year. Turning to slide 7. Net sales increased year-over-year in our electrical segment, driven by higher volume growth, offset by lower selling prices. Adjusted EBITDA margins compressed in our electrical segment due to higher material costs and lower average selling prices. Net sales in our S&I segment were lower compared to the previous year, primarily due to lower volume. Adjusted EBITDA and adjusted EBITDA margins both increased year-over-year due to increased productivity. As Bill mentioned earlier, Atkore recognized over $30 million of year-over-year productivity, most of which was generated from our S&I segment. Turning to slide 8. We ended the quarter in a favorable cash position, despite a year-over-year decline in our operating cash flow.
Speaker #3: Turning to slide seven, net sales increased year over year in our Electrical segment, driven by higher volume growth, offset by lower selling prices. Adjusted EBITDA margins compressed in our Electrical segment due to higher material costs and lower average selling prices.
Speaker #3: Net sales in our S&I segment were lower compared to the previous year, primarily due to lower volume. Adjusted EBITDA and adjusted EBITDA margins both increased year over year due to increased productivity.
Speaker #3: As Bill mentioned earlier, Akkore recognized over 30 million dollars of year-over-year productivity most of which was generated from our S&I segment. Turning to slide eight, we ended the quarter in a favorable cash position despite a year-over-year decline in our operating cash flow.
Speaker #3: Keep in mind that our Q4 FY25 operating cash flow was our strongest quarter, generating approximately $200 million. Our first quarter in FY26 ended before we typically receive large collections from our accounts receivable.
John Deitzer: Keep in mind that our Q4 FY 2025 operating cash flow was our strongest quarter, generating approximately $200 million. Our first quarter in FY 2026 ended before we typically receive large collections from our accounts receivables. Those cash collections fell into the first part of our fiscal Q2. Our results included approximately $18 million in cash proceeds recognized from our Tectron tube divestiture. These proceeds represent a portion of the divestiture proceeds. We anticipate receiving an additional $7 million in the second quarter from the sale of our real estate, where the products were manufactured. Our balance sheet remains in a strong position with no debt maturity repayments required until 2030. Moving to slide 9. We continue to expect volume growth to be mid-single digits for the full year.
John Deitzer: Keep in mind that our Q4 FY 2025 operating cash flow was our strongest quarter, generating approximately $200 million. Our first quarter in FY 2026 ended before we typically receive large collections from our accounts receivables. Those cash collections fell into the first part of our fiscal Q2. Our results included approximately $18 million in cash proceeds recognized from our Tectron tube divestiture. These proceeds represent a portion of the divestiture proceeds. We anticipate receiving an additional $7 million in the second quarter from the sale of our real estate, where the products were manufactured. Our balance sheet remains in a strong position with no debt maturity repayments required until 2030. Moving to slide 9. We continue to expect volume growth to be mid-single digits for the full year.
Speaker #3: Those cash collections fell into the first part of our fiscal Q2. Our results included approximately $18 million in cash proceeds recognized from our Tectron tube divestiture.
Speaker #3: These proceeds represent a portion of the divestiture proceeds. We anticipate receiving an additional $7 million in the second quarter from the sale of our real estate, where the products were manufactured.
Speaker #3: Our balance sheet remains in a strong position, with no debt maturity repayments required until 2030. Moving to slide nine, we continue to expect volume growth to be mid-single digits for the full year.
Speaker #3: Our volume growth expectations are a combination of core construction growth, as well as contributions from certain growth initiatives such as solar and global construction services.
John Deitzer: Our volume growth expectations are a combination of core construction growth as well as contributions from certain growth initiatives, such as solar and global construction services. The recent Dodge Momentum Index forecast continue to support growth in the core non-residential end markets. As a reminder, we are no longer providing quarterly guidance. Rather, we will continue to update our full year expectations. In November, we communicated that our full year expectations are weighted more toward the back half of the year. We still believe this to be true. With that said, we expect our Q2 to be similar to, but slightly better than our Q1 results from an Adjusted EBITDA perspective.
John Deitzer: Our volume growth expectations are a combination of core construction growth as well as contributions from certain growth initiatives, such as solar and global construction services. The recent Dodge Momentum Index forecast continue to support growth in the core non-residential end markets. As a reminder, we are no longer providing quarterly guidance. Rather, we will continue to update our full year expectations. In November, we communicated that our full year expectations are weighted more toward the back half of the year. We still believe this to be true. With that said, we expect our Q2 to be similar to, but slightly better than our Q1 results from an Adjusted EBITDA perspective.
Speaker #3: The recent Dodge momentum index forecast continues to support growth in the core non-residential end markets. As a reminder, we are no longer providing quarterly guidance.
Speaker #3: Rather, we will continue to update our full-year expectations. In November, we communicated that our full-year expectations are weighted more toward the back half of the year.
Speaker #3: We still believe this to be true and expect our second quarter to be similar to, but slightly better than, our first quarter results from an adjusted EBITDA perspective.
Speaker #3: For the full year, we expect net sales to be in the range of $2.95 to $3.05 billion, and adjusted EBITDA in the range of $340 million to $360 million.
John Deitzer: For the full year, we expect net sales to be in the range of $2.95 to 3.05 billion, an Adjusted EBITDA in the range of $340 million to $360 million, an Adjusted EPS in the range of $5.05 to $5.55. With that, I'll turn it to John Pregenzer to give an update on our end markets and our long-term strategic focus.
John Deitzer: For the full year, we expect net sales to be in the range of $2.95 to 3.05 billion, an Adjusted EBITDA in the range of $340 million to $360 million, an Adjusted EPS in the range of $5.05 to $5.55. With that, I'll turn it to John Pregenzer to give an update on our end markets and our long-term strategic focus.
Speaker #3: And adjusted EPS in the range of 5 dollars and 5 cents, and 5 dollars and 55 cents. With that, I'll turn it to John Pregenzer to give an update on our end markets and our long-term strategic focus.
Speaker #3: Thanks, John. Turning to slide ten, last year we announced our intention to consolidate three manufacturing facilities. This decision helps us to prioritize our portfolio for domestically manufactured electrical infrastructure products.
John Pregenzer: Thanks, John. Turning to slide 10. Last year, we announced our intention to consolidate 3 manufacturing facilities. This decision helps us to prioritize our portfolio for domestically manufactured electrical infrastructure products. These actions are part of our broader 80/20 initiative to serve our customers efficiently, while also creating a more streamlined cost structure. We are on track to exit these facilities in our Q2 fiscal quarter. As John mentioned, our expected volume growth in fiscal 2026 is a combination of base market growth and contributions from certain key strategic investments. The Dodge Momentum Index continues to suggest favorable forward-looking indicators of growth. A recent Moody's ratings analysis suggests that $3 trillion of investment will flow into the data center market in the next 5 years to support the need for servers, computing equipment, and new power capacity.
John Pregenzer: Thanks, John. Turning to slide 10. Last year, we announced our intention to consolidate 3 manufacturing facilities. This decision helps us to prioritize our portfolio for domestically manufactured electrical infrastructure products. These actions are part of our broader 80/20 initiative to serve our customers efficiently, while also creating a more streamlined cost structure. We are on track to exit these facilities in our Q2 fiscal quarter. As John mentioned, our expected volume growth in fiscal 2026 is a combination of base market growth and contributions from certain key strategic investments. The Dodge Momentum Index continues to suggest favorable forward-looking indicators of growth. A recent Moody's ratings analysis suggests that $3 trillion of investment will flow into the data center market in the next 5 years to support the need for servers, computing equipment, and new power capacity.
Speaker #3: These actions are part of our broader 80/20 initiative to serve our customers efficiently while also creating a more streamlined cost structure. We are on track to exit these facilities in our second fiscal quarter.
Speaker #3: As John mentioned, our expected volume growth in fiscal '26 is a combination of base market growth and contributions from certain key strategic investments. The Dodge Momentum Index continues to suggest favorable forward-looking indicators of growth.
Speaker #3: A recent Moody's ratings analysis suggests that $3 trillion of investment will flow into the data center market in the next five years to support the need for servers, computing equipment, and new power capacity.
Speaker #3: Our portfolio of metal framing, cable management, and the entirety of our conduit product line are well-positioned to benefit from this growth. As the electrical industry plans to support these growth figures, available labor continues to be top of mind.
John Pregenzer: Our portfolio of metal framing, cable management, and the entirety of our conduit product line are well positioned to benefit from this growth. As the electrical industry plans to support these growth figures, available labor continues to be top of mind. The Associated Builders and Contractors estimates that approximately 350,000 additional workers are needed to meet the demand for construction services in 2026, and that number grows to 450,000 in 2027. Atkore has a history of prioritizing labor-saving opportunities for installers through new product development. Our PVC junction boxes, 20-foot conduit, and patented MC Glide armored cable are just a few examples of how Atkore has made construction installation more efficient.
John Pregenzer: Our portfolio of metal framing, cable management, and the entirety of our conduit product line are well positioned to benefit from this growth. As the electrical industry plans to support these growth figures, available labor continues to be top of mind. The Associated Builders and Contractors estimates that approximately 350,000 additional workers are needed to meet the demand for construction services in 2026, and that number grows to 450,000 in 2027. Atkore has a history of prioritizing labor-saving opportunities for installers through new product development. Our PVC junction boxes, 20-foot conduit, and patented MC Glide armored cable are just a few examples of how Atkore has made construction installation more efficient.
Speaker #3: The Associated Builders and Contractors estimate that approximately 350,000 additional workers are needed to meet the demand for construction services in 2026. And that number grows to 450,000 in 2027.
Speaker #3: Akkore has a history of prioritizing labor-saving opportunities for installers through new product development. Our PVC junction boxes, 20-foot conduit, and patented MC Glide armored cable are just a few examples of how Akkore has made construction installation more efficient.
Speaker #3: The electrical industry is a great place to be, and we are working to meet the market demand by executing our Atkore Business System centered on strategy, people, and process.
John Pregenzer: The electrical industry is a great place to be, and we are working to meet the market demand by executing our Atkore Business System centered on strategy, people, and process. With that, we'll turn it over to the operator to open the line for questions.
John Pregenzer: The electrical industry is a great place to be, and we are working to meet the market demand by executing our Atkore Business System centered on strategy, people, and process. With that, we'll turn it over to the operator to open the line for questions.
Speaker #3: With that, we'll turn it over to the operator to open the line for questions.
Speaker #4: At this time, I would like to remind everyone that in order to ask a question, please press star, then the number one on your telephone keypad.
Operator: At this time, I would like to remind everyone, in order to ask a question, press Star, then the number one on your telephone keypad. We'll pause for just a moment to compile the Q&A roster. Your first question comes from Andy Kaplowitz with Citigroup.
Operator: At this time, I would like to remind everyone, in order to ask a question, press Star, then the number one on your telephone keypad. We'll pause for just a moment to compile the Q&A roster. Your first question comes from Andy Kaplowitz with Citigroup.
Speaker #4: We'll pause for just a moment to compile the Q&A roster. Your first question comes from Andy Kaplowitz with Citi Group.
Andy Kaplowitz: Good morning, everyone.
Andrew Kaplowitz: Good morning, everyone.
Speaker #6: Good morning. Hey, good morning, everyone. Andy. Good.
John Deitzer: Morning, Andy.
John Deitzer: Morning, Andy.
John Pregenzer: Good morning, Andy.
John Pregenzer: Good morning, Andy.
Speaker #5: Good morning, Andy.
Andy Kaplowitz: Morning. Can you give us a little more color on the core markets that you're seeing? I, I know you just talked about it, but it looks like core PVC and metal conduit markets, in terms of volume, accelerated a bit in Q1 versus what you saw in FY 25. So maybe you can talk about that. And then conversely, I know you've talked about construction services ramping up at some point. I mean, there are a lot of mega projects out there, particularly in data centers, as you kinda cited, so when can we see that start to move?
Andrew Kaplowitz: Morning. Can you give us a little more color on the core markets that you're seeing? I, I know you just talked about it, but it looks like core PVC and metal conduit markets, in terms of volume, accelerated a bit in Q1 versus what you saw in FY 25. So maybe you can talk about that. And then conversely, I know you've talked about construction services ramping up at some point. I mean, there are a lot of mega projects out there, particularly in data centers, as you kinda cited, so when can we see that start to move?
Speaker #6: Morning. Can you give us a little more color on the core markets that you're seeing? I know you just talked about it, but it looks like core PVC and metal condo markets, in terms of volume, accelerated a bit in Q1 versus what you saw in FY '25.
Speaker #6: So maybe you can talk about that, and then conversely, I know you've talked about construction services ramping up at some point. I mean, there are a lot of mega projects out there, particularly in data centers, as you kind of cited.
Speaker #6: So, when can we see that start to—
Speaker #6: move? Yeah, Andy, I'll
John Pregenzer: Yeah, Andy, I'll start here and then turn it over to either of the Johns. Yeah, you are correct, and again, John Deitzer, if we wanna get to precise numbers. But PVC, we're seeing good growth with steel conduit, we're seeing good growth with, you know, good markets overall. And then regarding data centers, it truly is just the timing of year-over-year in those projects. We are seeing, again, without a lot, giving you precise numbers, we are seeing strong backlogs and commitments for orders and expansion opportunities. So, you know, we're bullish on this fiscal year and then, you know, even more so as we get into fiscal year 2027 and so forth.
John Pregenzer: Yeah, Andy, I'll start here and then turn it over to either of the Johns. Yeah, you are correct, and again, John Deitzer, if we wanna get to precise numbers. But PVC, we're seeing good growth with steel conduit, we're seeing good growth with, you know, good markets overall. And then regarding data centers, it truly is just the timing of year-over-year in those projects. We are seeing, again, without a lot, giving you precise numbers, we are seeing strong backlogs and commitments for orders and expansion opportunities. So, you know, we're bullish on this fiscal year and then, you know, even more so as we get into fiscal year 2027 and so forth.
Speaker #5: Start here, and then turn it over to you, to John's. Yeah, you are correct. And again, John Deitzer or something—if we want to get to precise numbers.
Speaker #5: But PVC, we're seeing good growth with steel conduit. We're seeing good growth with solar in good markets overall. And then regarding data centers, it truly is just the timing of year-over-year in those projects.
Speaker #5: We are seeing again with our giving a precise numbers, we are seeing strong backlogs and commitments for orders and expansion opportunities. So we're bullish on this fiscal year.
Speaker #5: And then even more so as we get into fiscal year '27, and so—
Speaker #5: forth. And Bill, it begs
Andy Kaplowitz: And Bill, it begs the, sorry. Did you wanna say something else?
Andrew Kaplowitz: And Bill, it begs the, sorry. Did you wanna say something else?
Speaker #6: the sorry, did you want to say something
Speaker #6: else? No, Andy, just a
John Pregenzer: No, Andy, just a few more information on that is strong Dodge Momentum Index in the quarter. We could really see obviously being driven by data centers. Warehousing is strong, and education, healthcare, and some other end markets, we're seeing some growth. Specifically to PVC, we have seen some increases from the border wall, so that's been one of the areas that's been driving some of the stronger PVC conduit demand.
John Pregenzer: No, Andy, just a few more information on that is strong Dodge Momentum Index in the quarter. We could really see obviously being driven by data centers. Warehousing is strong, and education, healthcare, and some other end markets, we're seeing some growth. Specifically to PVC, we have seen some increases from the border wall, so that's been one of the areas that's been driving some of the stronger PVC conduit demand.
Speaker #3: few more information on that is strong Dodge momentum index in the quarter. We could really see, obviously, being driven by data centers. Warehousing is strong.
Speaker #3: And education, healthcare, some other end markets—we're seeing some growth, specifically in PVC. We have seen some increases from the border wall, so that's been one of the areas that's been driving some of the stronger PVC conduit.
Speaker #6: It's very helpful color.
Speaker #6: It's very helpful color. And it begs the question, demand. Obviously, it's early in the year, but you didn't raise your EBITDA and EPS despite pretty good Q1, especially given the good productivity.
Andy Kaplowitz: Very helpful color, and it begs the question, obviously, it's early in the year, but you didn't raise your EBITDA and EPS despite, you know, pretty good Q1, especially given the good productivity. So is there anything incrementally you're concerned about, or is it just really early in the year?
Andrew Kaplowitz: Very helpful color, and it begs the question, obviously, it's early in the year, but you didn't raise your EBITDA and EPS despite, you know, pretty good Q1, especially given the good productivity. So is there anything incrementally you're concerned about, or is it just really early in the year?
Speaker #6: So is there anything incrementally you're concerned about, or is it just really early in the
Speaker #5: Yeah, Andy, I think it's just yes. We're first quarter; we're pleased with the results here. I think as we look forward, we still have a lot to do.
Matthew Kline: ... Yeah, Andy, I think it's just we're, first quarter, we're pleased with the results here. I think as we look forward, we still have a lot to do. So, I can walk through some of the other dynamics here, as we're seeing. But just, I think, good first quarter and wanna maintain where we're at. Bill, anything, if you wanted to add?
Matthew Kline: ... Yeah, Andy, I think it's just we're, first quarter, we're pleased with the results here. I think as we look forward, we still have a lot to do. So, I can walk through some of the other dynamics here, as we're seeing. But just, I think, good first quarter and wanna maintain where we're at. Bill, anything, if you wanted to add?
Speaker #5: So I can walk through some of the other dynamics here. As we're seeing, but just I think the good first quarter and want to maintain where we're at.
Speaker #5: Bill, anything if you wanted to
Speaker #5: Add? No, I was going to do very—
William Waltz: No, I was going to do very much the same. It's like to sit here, let's hit our numbers, grow. We had great productivity that we called out. So I mean, things are moving along at this stage, but before we get too far out ahead of ourselves, Andy, let's get another quarter before we even start talking about the second half of the year. 'Cause there still is, you know, a reasonable pickup in Q3 and Q4, so, it just seems like the wise thing to do at this stage.
William Waltz: No, I was going to do very much the same. It's like to sit here, let's hit our numbers, grow. We had great productivity that we called out. So I mean, things are moving along at this stage, but before we get too far out ahead of ourselves, Andy, let's get another quarter before we even start talking about the second half of the year. 'Cause there still is, you know, a reasonable pickup in Q3 and Q4, so, it just seems like the wise thing to do at this stage.
Speaker #6: much the same. It's like to sit here to let's hit our numbers, grow, we had great productivity that we called out. So I mean, things are moving along at this stage, but before we get too far out ahead of ourselves, Andy, let's get another quarter before we even start talking about the second half of the year.
Speaker #6: Because there still is, it's reasonable pickup in Q3 and Q4. So it just seems like the wisest thing to do at this stage. Agreed.
Andy Kaplowitz: Agreed. And then just one more quick one. An update, I think you talked about the competitive environment a little bit. You mentioned PVC conduit pricing is still down, but steel conduit up. I think you said, import competition in PVC conduit remains, but sort of what are you seeing in the two major markets there, particularly from the foreign competition?
Andrew Kaplowitz: Agreed. And then just one more quick one. An update, I think you talked about the competitive environment a little bit. You mentioned PVC conduit pricing is still down, but steel conduit up. I think you said, import competition in PVC conduit remains, but sort of what are you seeing in the two major markets there, particularly from the foreign competition?
Speaker #6: And then just one more quick one. An update, I think you talked about the competitive environment a little bit. You mentioned PVC. Condo pricing is still down, but steel conduit up.
Speaker #6: I think you said import competition in PVC conduit remains, but what are you seeing in the two major markets there, particularly from the foreign competition?
Speaker #5: Yeah, so specifically with the foreign competition, I'll start with PVC and go to steel. PVC—imports continue to come in. So, maybe not surprised, because again, there are very few tariffs.
William Waltz: Yeah, so specifically for foreign competition, I'll start with PVC and go to steel. PVC continues. Imports continue to come in, so maybe not surprised, 'cause again, there's very few tariffs. It's the 10%, and as we've walked through, you know, it all depends. This is not new news on what somebody claims is the value. So, I don't think anything's dramatically changed there, but it's not like it's necessarily improved. But it's still probably, again, we don't have precise numbers on the market size, but it's still probably less than 10%, you know, of the whole market. So but it's growing like our PVC business is also growing.
William Waltz: Yeah, so specifically for foreign competition, I'll start with PVC and go to steel. PVC continues. Imports continue to come in, so maybe not surprised, 'cause again, there's very few tariffs. It's the 10%, and as we've walked through, you know, it all depends. This is not new news on what somebody claims is the value. So, I don't think anything's dramatically changed there, but it's not like it's necessarily improved. But it's still probably, again, we don't have precise numbers on the market size, but it's still probably less than 10%, you know, of the whole market. So but it's growing like our PVC business is also growing.
Speaker #5: It's a 10%. And as we've walked through, it all depends. This is not new news on what somebody claims is the value. So I don't think anything's dramatically changed there, but it's not like it's necessarily improved.
Speaker #5: But it's still probably—again, we don't have precise numbers on the market size—but it's still probably less than 10% of the whole market.
Speaker #5: But it's growing, like our PVC business is also growing. Steel, I think, is moving more in our favor where, again, we had strong growth—give or take—for the last three months.
William Waltz: Steel, I think, there is moving more in our favor, where, you know, again, we had strong growth and, you know, give or take for the last three months, I wanna say from a year-over-year perspective, it was down low to mid-single digits for imports. So while they're stepping back slightly, you know, we're continuing to grow. And then, I think in the prepared remarks, but if not, you know, both our quarter-over-quarter, like, excuse me, sequential quarters are up in price and also sequentially, you know, up in margins and so forth. So moving, you know, definitely in the right direction with metallic conduit.
William Waltz: Steel, I think, there is moving more in our favor, where, you know, again, we had strong growth and, you know, give or take for the last three months, I wanna say from a year-over-year perspective, it was down low to mid-single digits for imports. So while they're stepping back slightly, you know, we're continuing to grow. And then, I think in the prepared remarks, but if not, you know, both our quarter-over-quarter, like, excuse me, sequential quarters are up in price and also sequentially, you know, up in margins and so forth. So moving, you know, definitely in the right direction with metallic conduit.
Speaker #5: From a year-over-year perspective, it was down low to mid-single digits for imports. So while they're stepping back slightly, we're continuing to grow.
Speaker #5: And then I think in the prepared remarks, but if not, both our quarter-over-quarter—excuse me, sequential quarters—are up in price and also sequentially up in margins and so forth.
Speaker #5: Definitely in the right direction with metal. So, moving
Speaker #6: Appreciate all the
Andy Kaplowitz: Appreciate all the color.
Andrew Kaplowitz: Appreciate all the color.
Speaker #6: color. Thanks,
William Waltz: Thanks, Andy.
William Waltz: Thanks, Andy.
Speaker #5: Andy. Your next
Operator: Your next question comes from David Tarantino with KeyBanc Capital Markets.
Operator: Your next question comes from David Tarantino with KeyBanc Capital Markets.
Speaker #4: question comes from David Tarantino with KeyBank Capital
Speaker #4: The question comes from David Tarantino with KeyBanc Capital Markets. Hey, good morning, everyone.
David Tarantino: Hey, good morning, everyone.
David Tarantino: Hey, good morning, everyone.
Speaker #5: Good morning.
William Waltz: Good morning.
William Waltz: Good morning.
David Tarantino: I appreciate there's an update specifically on the strategic review, but maybe could you give us some more color and an update on the cost-saving effort, what you expect productivity to contribute following the nice start to this quarter, and particularly around the exit of those three facilities that it's expected to be completed here soon?
David Tarantino: I appreciate there's an update specifically on the strategic review, but maybe could you give us some more color and an update on the cost-saving effort, what you expect productivity to contribute following the nice start to this quarter, and particularly around the exit of those three facilities that it's expected to be completed here soon?
Speaker #7: I appreciate there's an update specifically on the strategic review, but maybe could you give us some more color and an update on the cost-saving effort—what you expect productivity to contribute following the nice start to this quarter, and particularly around the exit of those three facilities?
Speaker #7: It's expected to be completed here.
Speaker #7: Soon. Yeah, so I'll walk through it.
William Waltz: Yeah. So I'll, I'll walk through it again, color from the team here. But, so strategic alternatives, we're still being worked. So but again, as we've already said, you know, the board doesn't have a timeframe, so I don't wanna sit here and give, you know, any more handicap on things or timeframe or so forth. But, you know, we're continuing to progress through different things. Obviously, we mentioned small things like the divestiture, Tectron. We're still moving forward with HTPE, probably at a faster pace than you could, you know, you imagine in the overall, you know, examination if we do consider, you know, Atkore as a whole corporation and so forth. So from that standpoint, moving forward, phenomenal quarter with productivity. I expect this to be our best year, probably for productivity.
William Waltz: Yeah. So I'll, I'll walk through it again, color from the team here. But, so strategic alternatives, we're still being worked. So but again, as we've already said, you know, the board doesn't have a timeframe, so I don't wanna sit here and give, you know, any more handicap on things or timeframe or so forth. But, you know, we're continuing to progress through different things. Obviously, we mentioned small things like the divestiture, Tectron. We're still moving forward with HTPE, probably at a faster pace than you could, you know, you imagine in the overall, you know, examination if we do consider, you know, Atkore as a whole corporation and so forth. So from that standpoint, moving forward, phenomenal quarter with productivity. I expect this to be our best year, probably for productivity.
Speaker #5: And again, color from the team here. So, for strategic alternatives, we're still being worked. But again, as we've already said, the board doesn't have a timeframe.
Speaker #5: So, I don't want to sit here and give any more handicap on things or timeframes, or so forth. But we're continuing to progress through different things.
Speaker #5: Obviously, we mentioned small things like the divestiture, Tektron. We're still moving forward with HDP, probably at a faster pace than you could imagine in the overall examination if we do consider Atkore as a whole corporation and so forth.
Speaker #5: So, from that standpoint, moving forward, phenomenal quarter with productivity—I expect this to be our best year, probably, for productivity. On the same hand, realistically, we're not going to have $30 million every quarter.
William Waltz: On the other hand, you know, realistically, we're not gonna have $30 million every quarter. But, you know, we started a good January, and, you know, it should be last year was a strong productivity, and this should be a good year of productivity. And then finally, to the three plant closures, I'll let John Pregenzer or John Deitzer add a little bit more color. But I think to what John Deitzer has mentioned in the past, you know, it's $10 to $12 million, and we think potentially more, you know, as we get things running. And I would say they're running, you know, the closures at a smooth and ready to go on schedule. I'll defer to John Pregenzer, or if he wants to add anything to that.
William Waltz: On the other hand, you know, realistically, we're not gonna have $30 million every quarter. But, you know, we started a good January, and, you know, it should be last year was a strong productivity, and this should be a good year of productivity. And then finally, to the three plant closures, I'll let John Pregenzer or John Deitzer add a little bit more color. But I think to what John Deitzer has mentioned in the past, you know, it's $10 to $12 million, and we think potentially more, you know, as we get things running. And I would say they're running, you know, the closures at a smooth and ready to go on schedule. I'll defer to John Pregenzer, or if he wants to add anything to that.
Speaker #5: But we started a good January, and it should be noted that last year was a strong productivity year, and this should be a good year of productivity.
Speaker #5: And then finally, to the three plant closures, I'll let John Perkins or John Deitzer add a little bit more color. But I think, to what John Deitzer has mentioned in the past, it's $10 million, $12 million, and we think potentially more as we get things running.
Speaker #5: And I would say they're running the closures at a smooth rate, on schedule—compliment to John Perkins, or if he wants to add anything to that.
Speaker #3: No, Dave, I think everything's going as planned. We're seeing favorable transfer of the manufacturing equipment and startup. Hiring of the people in the plants that are getting the additional capacity is going well.
Matthew Kline: No, Dave, I think everything's going as planned. Seeing favorable transfer of the manufacturing equipment and startup, hiring of the people in the plants that are getting the additional capacity is going well. The training is going well, so we don't see any issues with executing all three of those actually on plan and on schedule. Great. And then just to add, David, just a little bit of color on the productivity dynamic throughout the year. We are very pleased, as Bill mentioned, around the Q1's performance, and as John mentioned, we're really pleased with where we're going. We have a little bit of dynamics quarter to quarter this year, just meaning the Q2, in particular.
Matthew Kline: No, Dave, I think everything's going as planned. Seeing favorable transfer of the manufacturing equipment and startup, hiring of the people in the plants that are getting the additional capacity is going well. The training is going well, so we don't see any issues with executing all three of those actually on plan and on schedule. Great. And then just to add, David, just a little bit of color on the productivity dynamic throughout the year. We are very pleased, as Bill mentioned, around the Q1's performance, and as John mentioned, we're really pleased with where we're going. We have a little bit of dynamics quarter to quarter this year, just meaning the Q2, in particular.
Speaker #3: The training is going well, so we don't see any issues with executing all three of those actually on plan and on schedule.
Speaker #5: Great. And then, just to add, David, just a little bit of color on the productivity dynamic throughout the year. We are very pleased, as Bill mentioned, around the first quarter's performance, and as John mentioned, we're really pleased with where we're going.
Speaker #5: We have a little bit of dynamics quarter to quarter this year. Just meaning the second quarter in particular – last year, in Q2, was pretty strong; it was the high watermark for us from an EBITDA perspective, and so the comp will have a little bit of a dynamic this year.
Matthew Kline: Last year in Q2 was a pretty strong, was the high-water mark for us, from an EBITDA perspective, and so the comp, we'll have a little bit of a dynamic this year, Q2 year-over-year. That being said, though, we're really pleased with the overall plan for annual productivity this year, and then think some of these initiatives will continue to benefit us as we move into 2027. But in the second quarter, we're not likely to see the strength here that we saw in the first quarter, largely due to the year-over-year comparison item. Hopefully, that helps him frame it a little bit, the dynamics.
Matthew Kline: Last year in Q2 was a pretty strong, was the high-water mark for us, from an EBITDA perspective, and so the comp, we'll have a little bit of a dynamic this year, Q2 year-over-year. That being said, though, we're really pleased with the overall plan for annual productivity this year, and then think some of these initiatives will continue to benefit us as we move into 2027. But in the second quarter, we're not likely to see the strength here that we saw in the first quarter, largely due to the year-over-year comparison item. Hopefully, that helps him frame it a little bit, the dynamics.
Speaker #5: Q2 year over year. That being said, though, we're really pleased with the overall plan for annual productivity this year, and we think some of these initiatives will continue to benefit us as we move into '27.
Speaker #5: But in the second quarter, we're not likely to see the strength here that we saw in the first quarter, largely due to the year-over-year comparison.
Speaker #5: Hopefully that helps frame it a little bit.
Speaker #5: dynamics. Yes, thanks.
David Tarantino: ... Yes, thanks. That's helpful. And then nice to see the price declines on the top line narrow, but maybe to put a finer point on price cost, could you give us an update on what you have here embedded in the guide? It, it looks like much of the year-over-year headwind that was previously expected has kind of already occurred. So how should we be thinking about that previous unmitigated $50 million headwind now and the offsets to it?
David Tarantino: ... Yes, thanks. That's helpful. And then nice to see the price declines on the top line narrow, but maybe to put a finer point on price cost, could you give us an update on what you have here embedded in the guide? It, it looks like much of the year-over-year headwind that was previously expected has kind of already occurred. So how should we be thinking about that previous unmitigated $50 million headwind now and the offsets to it?
Speaker #7: That's helpful. And then, nice to see the price declines in the top line narrow, but maybe to put a finer point on price/cost, could you give us an update on what you have here embedded in the guide?
Speaker #7: It looks like much of the year-over-year headwind that was previously expected has kind of already occurred. So, how should we be thinking about that previous unmitigated $50 million headwind now, and the offsets to it?
Matthew Kline: Got it, David. Yeah, it's a good question. In the price versus cost headwind that we have this year is largely loaded here in the first half. You see the impact in Q1. We again, I think Q2, year-over-year, we're gonna have a price versus cost unfavorable. I don't wanna start guiding price versus cost, you know, quarter to quarter, but we do anticipate the totality of the back half, to be price versus cost positive here. Might be very slightly, but, but, you know, that's, you know, potentially here as we're ramping. So it is very much loaded here in the first half. So, you know, we'll see how the, the dynamics play out throughout the year. But, but right now, to your point, very much a first half issue here that we're working through.
Matthew Kline: Got it, David. Yeah, it's a good question. In the price versus cost headwind that we have this year is largely loaded here in the first half. You see the impact in Q1. We again, I think Q2, year-over-year, we're gonna have a price versus cost unfavorable. I don't wanna start guiding price versus cost, you know, quarter to quarter, but we do anticipate the totality of the back half, to be price versus cost positive here. Might be very slightly, but, but, you know, that's, you know, potentially here as we're ramping. So it is very much loaded here in the first half. So, you know, we'll see how the, the dynamics play out throughout the year. But, but right now, to your point, very much a first half issue here that we're working through.
Speaker #5: Got it, David. Yeah. It's a good question in the price versus cost headwind that we have this year is largely loaded here in the first half.
Speaker #5: You see the impact in the first quarter. Again, I think in the second quarter, year-over-year, we're going to have a price versus cost unfavorable.
Speaker #5: I don't want to start guiding price versus cost quarter to quarter, but we do anticipate the totality of the back half to be price versus cost positive here.
Speaker #5: Might be very slightly, but that's potentially here as we're ramping. So it is very much loaded here in the first half. So we'll see how the dynamics play out throughout the year.
Speaker #5: But right now, to your point, very much a first-half issue here that we're working through.
Speaker #7: Okay, great. Thanks for the color.
David Tarantino: Okay, great. Thanks for the color, guys.
David Tarantino: Okay, great. Thanks for the color, guys.
Speaker #7: guys. Thank you,
William Waltz: Thank you, David.
William Waltz: Thank you, David.
Operator: Your next question comes from Chris Moore with CJS Securities.
Operator: Your next question comes from Chris Moore with CJS Securities.
Speaker #4: Your next question comes from David, from Chris Moore with CJS.
Speaker #4: Securities. Hey, good morning,
Chris Moore: Hey, good morning, guys. Yeah, so terrific margins on S&I. Is that 16.2%, is that sustainable moving forward, or just, kind of any thoughts there?
Chris Moore: Hey, good morning, guys. Yeah, so terrific margins on S&I. Is that 16.2%, is that sustainable moving forward, or just, kind of any thoughts there?
Speaker #8: Guys, yeah, so terrific margins on S&I. Is that 16.2%? Is that sustainable moving forward, or just—kind of, any thoughts?
Speaker #8: there? Thanks, Chris.
Matthew Kline: Thanks, Chris. I mean, I feel like a little bit of a broken record. I've said this a few times. We anticipate that business to be more in the, let's call it, 12% to 14% adjusted EBIT, the margin level. It does have some mixed dynamics when we think about the growth in solar, et cetera, you know, that might have a little bit of margin dynamic with it. But that team has done a very nice job of performing from a productivity perspective and has driven those margins higher. So I do anticipate, you know, some of the mix dynamics probably will level out a little bit, and I don't know if we're gonna be able to continue exactly at the positive productivity level we had.
Matthew Kline: Thanks, Chris. I mean, I feel like a little bit of a broken record. I've said this a few times. We anticipate that business to be more in the, let's call it, 12% to 14% adjusted EBIT, the margin level. It does have some mixed dynamics when we think about the growth in solar, et cetera, you know, that might have a little bit of margin dynamic with it. But that team has done a very nice job of performing from a productivity perspective and has driven those margins higher. So I do anticipate, you know, some of the mix dynamics probably will level out a little bit, and I don't know if we're gonna be able to continue exactly at the positive productivity level we had.
Speaker #5: I mean, I feel like a little bit of a broken record—I've said this a few times. We anticipate that business to be more in the—let's call it—12 to 14 percent adjusted EBITDA margin level.
Speaker #5: It does have some mixed dynamics when we think about the growth in solar, etc. That might have a little bit of margin dynamic with it.
Speaker #5: But that team has done a very nice job of performing from a productivity perspective and has driven those margins higher. So I do anticipate some of the mix dynamics probably will level out a little bit.
Speaker #5: And I don't know if we're going to be able to continue exactly at the positive productivity level we had. We did have some items that were more discrete benefits here in the first quarter that helped push that, elevated a little bit.
Matthew Kline: We did have, you know, some items that were more discrete benefits here in the first quarter that helped push that elevated a little bit. So we'll probably see margin regression in the S&I segment here as we move throughout the year.
Matthew Kline: We did have, you know, some items that were more discrete benefits here in the first quarter that helped push that elevated a little bit. So we'll probably see margin regression in the S&I segment here as we move throughout the year.
Speaker #5: So we'll probably see margin regression in the S&I segment here as we move throughout the—
Speaker #5: year. Got
Chris Moore: Got it. And from a cash flow perspective, you talked about, you know, Q1 timing, some of the issues there. Just maybe from a fiscal 2026 perspective, can you talk a little bit further in terms of, you know, kind of overall thoughts and how we should be thinking about it?
Chris Moore: Got it. And from a cash flow perspective, you talked about, you know, Q1 timing, some of the issues there. Just maybe from a fiscal 2026 perspective, can you talk a little bit further in terms of, you know, kind of overall thoughts and how we should be thinking about it?
Speaker #8: And from a cash flow perspective, you talked about Q1 timing, some of the issues there. Just maybe from a fiscal '26 perspective, can you talk a little bit further in terms of overall thoughts and how we should be thinking about it?
Speaker #5: Yeah, it's a great question. So, as we move through the year, we do anticipate cash from ops to improve. The first quarter was a bit of a headwind, as we mentioned, but you have to go back and remember how strong of a cash flow quarter we had in the fourth quarter of fiscal '25.
Matthew Kline: Yeah, it's a great question. So as we move through the year, we do anticipate cash from ops to improve. The Q1 was a bit of a headwind, as we mentioned, but you have to go back and remember how strong of a cash flow quarter we had in the Q4 of fiscal 2025. And so, you know, we had received multiple AR payments, both back in July and then in September. And the way this quarter ended on 26 December, you know, several large receivables we have fell into our fiscal January, but really occurred, you know, 28 December or 30 December type of dynamic.
Matthew Kline: Yeah, it's a great question. So as we move through the year, we do anticipate cash from ops to improve. The Q1 was a bit of a headwind, as we mentioned, but you have to go back and remember how strong of a cash flow quarter we had in the Q4 of fiscal 2025. And so, you know, we had received multiple AR payments, both back in July and then in September. And the way this quarter ended on 26 December, you know, several large receivables we have fell into our fiscal January, but really occurred, you know, 28 December or 30 December type of dynamic.
Speaker #5: And so we had received multiple AR payments, both back in July and then in September. And the way this quarter ended on December 26th, we had several large receivables that fell into our fiscal January, but really occurred December 28th or 30th type of dynamic.
Speaker #5: As we look forward, we expect to be modestly cash from ops positive in the second quarter, and then continue to ramp in the third and fourth quarter from a cash flow perspective.
Matthew Kline: As we look forward, we expect to be modestly cash from ops positive in Q2, and then continue to ramp in Q3 and Q4 from a cash flow perspective. You have seen we have modestly reduced our expectation on capital expenditures this year. We're just really, you know, ensuring we're investing in the right projects and, you know, really dialing that in as well as we move through the year.
Matthew Kline: As we look forward, we expect to be modestly cash from ops positive in Q2, and then continue to ramp in Q3 and Q4 from a cash flow perspective. You have seen we have modestly reduced our expectation on capital expenditures this year. We're just really, you know, ensuring we're investing in the right projects and, you know, really dialing that in as well as we move through the year.
Speaker #5: You have seen we have modestly reduced our expectation on capital expenditures here this year. We're just really ensuring we're investing in the right projects and really dialing that in as well as we move through the year.
Speaker #5: year. Got it.
Chris Moore: Got it. And maybe just last one from me. Obviously, backlog is not historically important metric for you guys, but, with some of the change, you know, focus here on data center, et cetera, is it potentially becoming a little bit more important, and is that something that that's building a little bit at this point in time?
Chris Moore: Got it. And maybe just last one from me. Obviously, backlog is not historically important metric for you guys, but, with some of the change, you know, focus here on data center, et cetera, is it potentially becoming a little bit more important, and is that something that that's building a little bit at this point in time?
Speaker #8: And maybe just last one for me. Obviously, backlog is not historically an important metric for you guys, but with some of the change, focus here, data center, etc., is it potentially becoming a little bit more important?
Speaker #8: And is that's building a little bit at this point in that something time?
Speaker #5: Yeah, I think, Chris, there are a couple of thoughts there. For the core business, it's shipping five days, ten days, and a little backlog.
William Waltz: Yeah, I think, Chris, there are a couple thoughts there. For the core business, you know, it's shipping 5 days, 10 days, and little backlog. For the data center business itself or, you know, global construction business, the question I answered for Andy. We are seeing backlogs grow in a couple facets. One, the amount of orders we have in, and then also things, if it's not in order, kind of like an LOI and so forth. So I don't know at this stage or for this year, if we'd want to dimensionalize that publicly, but, you know, there is the potential as it continues to grow. It is a business that I think we're all very optimistic at the pace that that business has in front of us.
William Waltz: Yeah, I think, Chris, there are a couple thoughts there. For the core business, you know, it's shipping 5 days, 10 days, and little backlog. For the data center business itself or, you know, global construction business, the question I answered for Andy. We are seeing backlogs grow in a couple facets. One, the amount of orders we have in, and then also things, if it's not in order, kind of like an LOI and so forth. So I don't know at this stage or for this year, if we'd want to dimensionalize that publicly, but, you know, there is the potential as it continues to grow. It is a business that I think we're all very optimistic at the pace that that business has in front of us.
Speaker #5: For the data center business itself, and the global construction business—to the question I answered for Andy—we are seeing backlogs grow, in a couple of facets.
Speaker #5: One, the amount of orders we have in. And then also things, if it's not in order, kind of like an LOI, and so forth.
Speaker #5: So, I don't know at this stage, or for this year, if we want to dimensionalize that publicly. But there is the potential as it continues to grow.
Speaker #5: It is a business that I think we're all very optimistic. At the pace that that business has in front of
Speaker #5: us. Got it.
Chris Moore: Got it. Appreciate it. I'll leave it there. Thanks, guys.
Chris Moore: Got it. Appreciate it. I'll leave it there. Thanks, guys.
Speaker #8: Appreciate it. I'll leave it there. Thanks, guys.
Speaker #5: Thanks,
William Waltz: Thanks, Chris.
William Waltz: Thanks, Chris.
Speaker #5: Chris. Your next
Operator: Your next question comes from Deane with RBC.
Operator: Your next question comes from Deane with RBC.
Speaker #4: question comes from Deandre with
Speaker #4: RBC. Thank you.
David Tarantino: Thank you. Good morning, everyone.
David Tarantino: Thank you. Good morning, everyone.
Speaker #9: Good morning,
Speaker #9: Good morning, everyone. Good Hey,
William Waltz: Good morning.
William Waltz: Good morning.
Speaker #10: morning, Dean.
Matthew Kline: Good morning.
Matthew Kline: Good morning.
Chris Moore: I'd like to circle back on some of the competitive dynamics and how it impacted price in the quarter. Just, you know, with steel being up year-over-year, that's really encouraging. Is that more a reflection of stronger volume? Any competitive changes there? And for PVC down, I know there's new capacity coming on. How much of that weighed on, you know, the ongoing PVC pressure? And, you know, this all kind of frames the question of when do you think you get a normalized year-over-year price?
Speaker #9: I'd like to circle back on some of the competitive dynamics and how it impacted price in the quarter. With steel being up year over year, that's really encouraging.
Chris Moore: I'd like to circle back on some of the competitive dynamics and how it impacted price in the quarter. Just, you know, with steel being up year-over-year, that's really encouraging. Is that more a reflection of stronger volume? Any competitive changes there? And for PVC down, I know there's new capacity coming on. How much of that weighed on, you know, the ongoing PVC pressure? And, you know, this all kind of frames the question of when do you think you get a normalized year-over-year price?
Speaker #9: Is that more a reflection of stronger volume? Any competitive changes there? And for PVC down, I know there's new capacity coming on. How much of that weighed on the ongoing PVC pressure?
Speaker #9: And this all kind of frames the question of when do you think you get a normalized year-over-year price? I know it's going to be kind of hard to pinpoint which quarter, but is it still your expectation that it'll happen this—
Deane Dray: ... Does that, you know, it's gonna be kind of hard to pinpoint which quarter, but is it still your expectation that it'll happen this year?
Deane Dray: ... Does that, you know, it's gonna be kind of hard to pinpoint which quarter, but is it still your expectation that it'll happen this year?
Speaker #9: year? Yeah,
William Waltz: Yeah, Deane, I'll start, and then for John or Jonathan, if they wanna jump, jump in there. So, and with the multifaceted question, I think starting with steel, I think overall demands were strong. So I don't know, but I assume my competitors are also, you know, up there. And also with with imports going back, you know, you did have a, you know, a good market for us to grow and for us to get price and us to get margin. So market demand's strong, and so forth. For imports, and so forth there, I don't know, again, I can't say specifically. I don't think it's necessarily, more supply coming into the market as much as I would say in general, you know, back to us hitting our numbers and so forth there.
William Waltz: Yeah, Deane, I'll start, and then for John or Jonathan, if they wanna jump, jump in there. So, and with the multifaceted question, I think starting with steel, I think overall demands were strong. So I don't know, but I assume my competitors are also, you know, up there. And also with with imports going back, you know, you did have a, you know, a good market for us to grow and for us to get price and us to get margin. So market demand's strong, and so forth. For imports, and so forth there, I don't know, again, I can't say specifically. I don't think it's necessarily, more supply coming into the market as much as I would say in general, you know, back to us hitting our numbers and so forth there.
Speaker #5: Dean, I'll start, and then for John or John, if they want to jump in there. So with the multifaceted question, I think starting with steel, I think overall, demands were strong.
Speaker #5: So I don't know, but I assume my competitors are also up there. And also, with imports going back, you did have a good market for us to grow.
Speaker #5: And for us to get price and for us to get margins. So, market demand strong and so forth. For imports and so forth there, I don't know.
Speaker #5: Again, I can't say specifically. I don't think it's necessarily more supply coming into the market as much as I would say in general back to us hitting our numbers and so forth there.
Speaker #5: It's probably what we perceived with price dynamics—both top line and spread, and so forth. So, in my mind, I'm pretty pleased that we're back and committed to the future, but we're back, paying pretty well how we think the markets are going to react.
William Waltz: It's probably what we perceived with, you know, price dynamics, both top line and spread and so forth. So in my mind, I'm pretty pleased that, you know, we're back. Can't commit to the future, but we're back paying pretty well how we think the markets are going to react. And I think to earlier comments from John Deitzer, you know, we're still expecting spread compression within PVC. As to looking out and go, "When does that stop?" I may turn over to my peers, but at least for me, to, you know, try to peg what quarter with any precision is a little tougher there.
William Waltz: It's probably what we perceived with, you know, price dynamics, both top line and spread and so forth. So in my mind, I'm pretty pleased that, you know, we're back. Can't commit to the future, but we're back paying pretty well how we think the markets are going to react. And I think to earlier comments from John Deitzer, you know, we're still expecting spread compression within PVC. As to looking out and go, "When does that stop?" I may turn over to my peers, but at least for me, to, you know, try to peg what quarter with any precision is a little tougher there.
Speaker #5: And I think to earlier comments from John Deitzer, we're still expecting spread compression within PVC. As to looking out and when does that stop, I may turn over to my peers, but at least for me, just trying to peg one quarter with any precision is a little tougher.
Speaker #5: there. That's really
Deane Dray: That's really helpful. And then just as you talk about shifting some of the manufacturing resources to your core electrical, have you been able to size what you think your PVC capacity increase is going to be, let's say, on a percent basis in conduit, or will it be in, you know, other non-conduit electrical, like cable?
Deane Dray: That's really helpful. And then just as you talk about shifting some of the manufacturing resources to your core electrical, have you been able to size what you think your PVC capacity increase is going to be, let's say, on a percent basis in conduit, or will it be in, you know, other non-conduit electrical, like cable?
Speaker #9: helpful. And then just as you talk about shifting some of the manufacturing resources to your core electrical, have you been able to size what you think your capacity increase is going to be?
Speaker #9: Let's say, on a percent basis, is it in conduit, or will it be in other non-conduit electrical, like...
Speaker #9: cable? So I
William Waltz: So I think especially, Deane, it's to think of more conduit, and here's why to go to. If you think of what mechanical makes, it's, you know, S&I. It is metal products. So, therefore, Harvey, for example, you know, one of our largest facilities, it is using the 80/20 rule effectively, which has actually, I think, helped the S&I margins to earlier questions of, you know, let's get with our key customers, with key products, and we don't have to have 1,000 C items. So it's actually helping, and our intention in future to actually help the margins there. And then it is freeing up capacity for our electrical products, said to earlier conduits, metal conduits specifically, and to, you know, questions there that we just answered, you know, is where we are seeing volume growth.
William Waltz: So I think especially, Deane, it's to think of more conduit, and here's why to go to. If you think of what mechanical makes, it's, you know, S&I. It is metal products. So, therefore, Harvey, for example, you know, one of our largest facilities, it is using the 80/20 rule effectively, which has actually, I think, helped the S&I margins to earlier questions of, you know, let's get with our key customers, with key products, and we don't have to have 1,000 C items. So it's actually helping, and our intention in future to actually help the margins there. And then it is freeing up capacity for our electrical products, said to earlier conduits, metal conduits specifically, and to, you know, questions there that we just answered, you know, is where we are seeing volume growth.
Speaker #5: think especially, Dean, is think it more conduit. And here's why to go. If you think of what mechanical makes, it's ERS and I. It is metal products.
Speaker #5: So therefore, Harvey, for example, one of our largest facilities, it is using the 80/20 rule, effectively, which is actually, I think, helped the S&I margins that earlier questions of let's get with our key customers, with key products, and we don't have to have 1,000 C items.
Speaker #5: So it's actually helping in our intended future to actually help the margins there. And then it is freeing up capacity for our Electrical products to earlier conduits, metal conduits specifically, and to questions there that we just answered, it's where we are seeing volume growth.
William Waltz: You know, with data centers and overall markets, it's a place that we would expect long-term growth. So it's working well to say what percents, but I think it's enough that we can keep up with the markets as we go forward. So it's kind of a win-win-win there, and compliment John Pregenzer and the rest of the team, you know, for really driving that effectively here.
Speaker #5: And with data centers and overall markets, it's a place that we would expect long-term growth. So it's working well to say what percents, but I think it's enough that we can keep up with the markets as we go forward.
William Waltz: You know, with data centers and overall markets, it's a place that we would expect long-term growth. So it's working well to say what percents, but I think it's enough that we can keep up with the markets as we go forward. So it's kind of a win-win-win there, and compliment John Pregenzer and the rest of the team, you know, for really driving that effectively here.
Speaker #5: So it's kind of a win-win-win there and complement. John Prigenzer and the rest of the team, for really driving that effectively
Speaker #5: here. That's helpful,
Deane Dray: That's helpful.
Deane Dray: That's helpful.
Matthew Kline: Yeah, Deane, just one thing-
Matthew Kline: Yeah, Deane, just one thing-
Speaker #9: Thank you. Dean.
Speaker #10: Just one thing to circle back on—your earlier question and David's earlier question as well. It is a little bit difficult to predict the dynamics associated with price versus cost because there are so many different factors.
William Waltz: Right.
William Waltz: Right.
Matthew Kline: To circle back on your earlier question and David's earlier question as well. It is a little bit difficult to predict the dynamics associated with price versus cost because there's so many different factors. One item that I think we're watching here in the near term a little bit is the volatility and fluctuation that we've seen in copper. You know, if we just rewind, you know, like, six months ago, it's up roughly, you know, 40%, give or take, from where we gave our outlook, you know, back in November. We're probably up around 25%, and there's just been a lot of volatility there, and that would be one variable. And also trying to make, you know, some of these assessments as we move forward.
Matthew Kline: To circle back on your earlier question and David's earlier question as well. It is a little bit difficult to predict the dynamics associated with price versus cost because there's so many different factors. One item that I think we're watching here in the near term a little bit is the volatility and fluctuation that we've seen in copper. You know, if we just rewind, you know, like, six months ago, it's up roughly, you know, 40%, give or take, from where we gave our outlook, you know, back in November. We're probably up around 25%, and there's just been a lot of volatility there, and that would be one variable. And also trying to make, you know, some of these assessments as we move forward.
Speaker #10: One item that I think we're watching here in the near term a little bit is the volatility and fluctuation that we've seen in copper. If we just rewind, like, six months ago, it's up roughly 40%, give or take, from where we gave our outlook back in November.
Speaker #10: We're probably up around 25%. And there's just been a lot of volatility there. And that would be one variable. And also trying to make some of these assessments as we move forward.
Speaker #10: I mean, these markets move quickly. And so that's one of the dynamics here that we're trying to watch and understand as we move throughout the year is that volatility a little bit.
Matthew Kline: I mean, these markets move quickly, and so, you know, that's one of the dynamics here that we're trying to watch and understand as we move throughout the year, is that volatility a little bit. But I think the team's done a nice job because one of the facility closures is in the area where we use copper, and I think it's, you know, the team's working to improve the cost structure and try to be reactive to some of that volatility as well. So, you know, there's just a lot of moving parts and dynamics versus trying to pinpoint a singular, "Hey, this is, you know, when things change in one way or another.
Matthew Kline: I mean, these markets move quickly, and so, you know, that's one of the dynamics here that we're trying to watch and understand as we move throughout the year, is that volatility a little bit. But I think the team's done a nice job because one of the facility closures is in the area where we use copper, and I think it's, you know, the team's working to improve the cost structure and try to be reactive to some of that volatility as well. So, you know, there's just a lot of moving parts and dynamics versus trying to pinpoint a singular, "Hey, this is, you know, when things change in one way or another.
Speaker #10: But I think the team's done a nice job because one of the facility closures is in the area where we use copper. And I think the team's working to improve the cost structure and try to be reactive to some of that volatility as well.
Speaker #10: So there's just a lot of moving parts and dynamics versus trying to pinpoint a singular, 'Hey, this is when things change in one way or another.'
Speaker #11: Of course. I appreciate that. Thank
Deane Dray: Of course. I appreciate that. Thank you.
Deane Dray: Of course. I appreciate that. Thank you.
Speaker #11: you. Thanks,
William Waltz: Thanks, Dean.
William Waltz: Thanks, Dean.
Speaker #10: Dean.
Speaker #1: Your next question comes from Justin Claire with Roth Capital Partners.
Operator: Your next question comes from Justin Clare with Roth Capital Partners. Good morning, Justin.
Operator: Your next question comes from Justin Clare with Roth Capital Partners. Good morning, Justin.
Speaker #12: Good morning, John.
Speaker #5: Good morning.
Justin Clare: Good morning. Good morning. So just wanted to follow up on steel conduit pricing here. So I think it's the fourth quarter in a row that pricing has improved. So wondering if you could just speak a little bit to the trend you expect ahead. Do you anticipate continued price improvement in fiscal Q2? And then does the guidance for the year embed a continued upward trend in steel pricing? How are you thinking about that? And then just lastly, is the higher pricing supporting margin improvement for steel conduit? If you could speak to potential magnitude or how that's being affected.
Justin Clare: Good morning. Good morning. So just wanted to follow up on steel conduit pricing here. So I think it's the fourth quarter in a row that pricing has improved. So wondering if you could just speak a little bit to the trend you expect ahead. Do you anticipate continued price improvement in fiscal Q2? And then does the guidance for the year embed a continued upward trend in steel pricing? How are you thinking about that? And then just lastly, is the higher pricing supporting margin improvement for steel conduit? If you could speak to potential magnitude or how that's being affected.
Speaker #13: Good morning. So just wanted to follow up on steel conduit pricing here. So I think it's the fourth quarter in a row that pricing is improved.
Speaker #13: So, wondering if you could just speak a little bit to the trend you expect ahead. Do you anticipate continued price improvement in fiscal Q2?
Speaker #13: And then does the guidance for the year embed a continued upward trend in steel pricing? How are you thinking about that? And then just lastly, is the higher pricing supporting margin improvement for steel conduit?
Speaker #13: If you could speak to potential magnitude or how that’s being—
Speaker #13: affected.
Speaker #5: Yeah.
William Waltz: Yeah. So Justin, I'll start here, and the team can add as always. So, you are correct that, you know, steel conduit prices, it's been four quarters, so continue to go up with price. And also, in most those quarters, it's been up, you know, sequentially, and for example, our last quarter, probably our best quarter for, you know, spreads in a, you know, a long time. So those things are moving up. At this stage in our forecasts, I don't think we're expecting meaningful spread increases, so.
William Waltz: Yeah. So Justin, I'll start here, and the team can add as always. So, you are correct that, you know, steel conduit prices, it's been four quarters, so continue to go up with price. And also, in most those quarters, it's been up, you know, sequentially, and for example, our last quarter, probably our best quarter for, you know, spreads in a, you know, a long time. So those things are moving up. At this stage in our forecasts, I don't think we're expecting meaningful spread increases, so.
Speaker #5: So Justin, I'll start here, and the team can add as always. You are correct that steel conduit prices have been four quarters of continuing to go up with price.
Speaker #5: And also, in most of those quarters, it's been up sequentially, and, for example, our last quarter was probably our best quarter for spreads in a long time.
Speaker #5: So, those things are moving up. At this stage in our forecast, I don't think we're expecting meaningful spread increases. But I also want to take anything in to go for what we're guiding.
William Waltz: But I also wouldn't bake anything in to go for what we're guiding for usual and say, "Oh, there's gonna be so much more." Steel prices are expected, and now I'm just going from different, you know, people's professional forecasts that we use, to continue to go up slightly, over the next, you know, six to nine months here. So I think we can keep up with pricing, but I wouldn't expect a lot of extra spread, or at least that's not baked into our numbers here.
William Waltz: But I also wouldn't bake anything in to go for what we're guiding for usual and say, "Oh, there's gonna be so much more." Steel prices are expected, and now I'm just going from different, you know, people's professional forecasts that we use, to continue to go up slightly, over the next, you know, six to nine months here. So I think we can keep up with pricing, but I wouldn't expect a lot of extra spread, or at least that's not baked into our numbers here.
Speaker #5: For using and say, "Oh, there's going to be so much more." Steel prices are expected and I'm just going from different people's professional forecasts that we use, to continue to go up slightly over the next six, nine months here.
Speaker #5: So I think we can keep up with pricing. But I wouldn't expect a lot of extra spread, or at least that's not baked into our numbers
Speaker #5: here. Got it.
Justin Clare: Got it. Okay. And then just one on the tariffs. I believe aluminum tariffs were potentially expected to have an impact on the cost structure. Wondering how that's evolving, if you've secured domestic sources of supply and what the potential impact on the margins could be?
Justin Clare: Got it. Okay. And then just one on the tariffs. I believe aluminum tariffs were potentially expected to have an impact on the cost structure. Wondering how that's evolving, if you've secured domestic sources of supply and what the potential impact on the margins could be?
Speaker #13: Okay. And then just one on the tariffs. I believe aluminum tariffs were potentially expected to have an impact on the cost structure. Wondering how that's evolving if you've secured domestic sources of supply and what the potential impact on the margins could be.
Speaker #13: Okay. And then just one on the tariffs. I believe aluminum tariffs were potentially expected to have an impact on the cost structure. Wondering how that's evolving, if you've secured domestic sources of supply, and what the potential impact on the margins could be.
Speaker #5: Yeah. Again, without getting too specific on future steps, but you are correct, Justin, that for us, the tariffs—because where we did get our products, our aluminum, from offshore, at least offshore Canada, I'll be specific.
William Waltz: Yeah, again, without getting too specific on future steps, but you are correct, Justin, that for us, the tariffs, 'cause where we did get our products, our aluminum, from offshore, or at least offshore Canada, I'll be specific, so they are being impacted by the tariffs. We are looking at domestic sources, but, you know, I don't wanna give out, even if nothing else, for our competitors. You know, the probability of that, you know, 'cause even simple things like that, getting to it through specs. And then also, you know, I do think the domestic manufacturers, back to, they know that people like us and so forth are looking for domestic supply, you know, they're raising their price.
William Waltz: Yeah, again, without getting too specific on future steps, but you are correct, Justin, that for us, the tariffs, 'cause where we did get our products, our aluminum, from offshore, or at least offshore Canada, I'll be specific, so they are being impacted by the tariffs. We are looking at domestic sources, but, you know, I don't wanna give out, even if nothing else, for our competitors. You know, the probability of that, you know, 'cause even simple things like that, getting to it through specs. And then also, you know, I do think the domestic manufacturers, back to, they know that people like us and so forth are looking for domestic supply, you know, they're raising their price.
Speaker #5: So they are being impacted by the tariffs. We are looking at domestic sources, but I don't want to give out a unit of nothing else for our competitors.
Speaker #5: The probability of that, because even simple things like that—getting to it through specs—and then also, I do think that domestic manufacturers, back to—they know that people like us and so forth are looking for domestic supply.
Speaker #5: They're raising the price, so how much of an arbitrage we have compared to our competitors, or how much we can save compared to the tariffs, is hard to quantify.
William Waltz: So how much of an arbitrage we have compared to our competitors or how much we can save compared to the tariffs is hard to quantify. But I will tell you, it, it has been an impact that I don't think we've passed along the impact of the 50% aluminum tariffs. That kind of ties back to John Deitzer's question or answer, excuse me, even on things like copper, it's so volatile right now that us predicting that our cable business is a little bit more challenged in the short term here.
William Waltz: So how much of an arbitrage we have compared to our competitors or how much we can save compared to the tariffs is hard to quantify. But I will tell you, it, it has been an impact that I don't think we've passed along the impact of the 50% aluminum tariffs. That kind of ties back to John Deitzer's question or answer, excuse me, even on things like copper, it's so volatile right now that us predicting that our cable business is a little bit more challenged in the short term here.
Speaker #5: But I will tell you, it has been an impact that I don't think we've passed along the impact of the 50% aluminum tariffs. That kind of ties back to John Deitzer's question or answer, excuse me, even though things like copper, it's so volatile right now that us predicting that our cable business is a little bit more challenging in the short term
Speaker #5: But I will tell you, it has been an impact that I don't think we've passed along—the impact of the 50% aluminum tariffs. That kind of ties back to John Deitzer's question or answer, excuse me. Even though things like copper are so volatile right now, predicting our cable business is a little bit more challenging in the short term here.
Speaker #13: Got it. Okay. I appreciate it. Thank you.
Justin Clare: Got it. Okay, I appreciate it. Thank you.
Justin Clare: Got it. Okay, I appreciate it. Thank you.
Speaker #5: Yeah. Thanks, Justin.
William Waltz: Yeah. Thanks, Justin.
William Waltz: Yeah. Thanks, Justin.
Speaker #1: Your next question comes from Chris Dankert with Luke.
Operator: Your next question comes from Chris Dankert with Loop Capital.
Operator: Your next question comes from Chris Dankert with Loop Capital.
Speaker #1: Capital. Hey, morning, guys. Good morning.
Chris Dankert: Good morning, guys.
Christopher Dankert: Good morning, guys.
William Waltz: Morning, Chris.
William Waltz: Morning, Chris.
Chris Dankert: Thanks. Morning, thanks for taking the questions. I guess just to kind of circle back on solar, and I missed it. Can you just kind of give us a sense for what the solar activity is now, kind of how we're shifting capacity in that market, and then just kind of an update there?
Christopher Dankert: Thanks. Morning, thanks for taking the questions. I guess just to kind of circle back on solar, and I missed it. Can you just kind of give us a sense for what the solar activity is now, kind of how we're shifting capacity in that market, and then just kind of an update there?
Speaker #15: Thanks. Morning. Thanks for taking the questions. I guess just to kind of circle back on solar, and I think you touched on it in your prepared remarks, but I missed it.
Speaker #15: Can you just kind of give us a sense for what the solar activity is now, kind of how we're shifting capacity in that market?
Speaker #15: And then just kind of an update there.
Speaker #5: Yeah. So what we said, and then it's a great I'm going to joke and say a setup question for us, is solar from the quarter, just with timing of projects, was down from a year-over-year perspective.
William Waltz: Yeah. So what we said, and then it's a great, I'm going to joke and say, a setup question for us, is, solar from the quarter, just with timing of projects, was down from a year-over-year perspective. That said, you know, we do have a good backlog there, almost to other people's questions on global mega projects. You know, borders coming in, commitments from OEMs. And then the other thing that's helping us, that we mentioned last year, but our facility, Hobart, that we make a lot of the solar torque tubes in, is performing really well. So that does a couple things. It helps drive some of the productivity we talked about for the first quarter. It helps, you know, with our, you know, overall estimates for productivity for the year, and the increase in throughput is helping as this demand does come up here.
William Waltz: Yeah. So what we said, and then it's a great, I'm going to joke and say, a setup question for us, is, solar from the quarter, just with timing of projects, was down from a year-over-year perspective. That said, you know, we do have a good backlog there, almost to other people's questions on global mega projects. You know, borders coming in, commitments from OEMs. And then the other thing that's helping us, that we mentioned last year, but our facility, Hobart, that we make a lot of the solar torque tubes in, is performing really well. So that does a couple things. It helps drive some of the productivity we talked about for the first quarter. It helps, you know, with our, you know, overall estimates for productivity for the year, and the increase in throughput is helping as this demand does come up here.
Speaker #5: That said, we do have a good backlog there, almost to other people's questions on global mega projects. Borders coming in, commitments from OEMs. And then the other thing that's helping us that we mentioned last year, but our facility Hobart that we make a lot of the solar torque tubes in is performing really well.
Speaker #5: So that does a couple of things. It helps drive some of the productivity we talked about for the first quarter. It helps with our overall estimates for productivity for the year.
Speaker #5: And the increase in throughput is helping as this demand does come up here. So I think solar-like global mega projects should be a good thing for this quarter and, quite frankly, the second half of the year.
William Waltz: So I think solar, like global mega projects, should be a good thing for, you know, this quarter and, quite frankly, the second half of the year. To earlier questions, you look at the step-up, you know, between what we're estimating for profits in Q1 and Q2 compared to what we need to deliver in Q3 and Q4 to hit the, you know, the average of our numbers of $350 million EBITDA.
William Waltz: So I think solar, like global mega projects, should be a good thing for, you know, this quarter and, quite frankly, the second half of the year. To earlier questions, you look at the step-up, you know, between what we're estimating for profits in Q1 and Q2 compared to what we need to deliver in Q3 and Q4 to hit the, you know, the average of our numbers of $350 million EBITDA.
Speaker #5: To earlier questions, do you look at the step up between what we're estimating for profits in Q1 and Q2 compared to what we need to deliver in Q3 and Q4 to hit the average of our numbers of 350 million dollars
Speaker #5: EBITDA? As a
Chris Dankert: As a point of clarification, I just assume that the solar torque tubes were generally for domestic projects. Is any of that for export outside of North America right now?
Christopher Dankert: As a point of clarification, I just assume that the solar torque tubes were generally for domestic projects. Is any of that for export outside of North America right now?
Speaker #15: point of clarification, I assume that the solar torque tubes were generally for domestic projects. Is any of that for export outside of North America right
Speaker #15: now? Some.
William Waltz: So I, I don't know long-term how much will be, but it does, one of our customers has ordered, you know, a meaningful amount here for projects overseas. But I don't know if that's a long-term trend or not, versus a short-term. So I think I would leave it at majority of our focus and our customers are North America-based, with coincidentally, short-term, some projects going overseas.
William Waltz: So I, I don't know long-term how much will be, but it does, one of our customers has ordered, you know, a meaningful amount here for projects overseas. But I don't know if that's a long-term trend or not, versus a short-term. So I think I would leave it at majority of our focus and our customers are North America-based, with coincidentally, short-term, some projects going overseas.
Speaker #5: So I don't know long-term how much we'll be, but it does—one of our customers has ordered a meaningful amount here for projects overseas.
Speaker #5: But I don't know if that's a long-term trend or not versus a short-term. So I think I would leave it at the majority of our focus and our customers are North America-based, with coincidentally short-term, some projects going.
Speaker #5: overseas. Got
Chris Dankert: Got it. Got it. That's helpful. And then I guess just finally on Hobart, any update as far as factory loading there, operational metrics, anything worth calling out, either in terms of just being on track or any kind of wins or headaches there?
Christopher Dankert: Got it. Got it. That's helpful. And then I guess just finally on Hobart, any update as far as factory loading there, operational metrics, anything worth calling out, either in terms of just being on track or any kind of wins or headaches there?
Speaker #15: it. Got it. That's helpful. And then I guess just finally on Hobart, any updates as far as factory loading there, operational metrics, anything worth calling out either in terms of just being on track or any kind of wins or headaches
Speaker #15: there? Yeah.
William Waltz: Yeah, John?
William Waltz: Yeah, John?
Speaker #5: John? Yeah.
John Pregenzer: Yeah, no, Hobart's going well. You know, obviously bringing in the additional solar volume, but their operational rates are continuing to improve. A lot of the productivity that we delivered was contributed by Hobart, so I think everything's progressing as we need it to be.
John Pregenzer: Yeah, no, Hobart's going well. You know, obviously bringing in the additional solar volume, but their operational rates are continuing to improve. A lot of the productivity that we delivered was contributed by Hobart, so I think everything's progressing as we need it to be.
Speaker #16: No. Hobart's going well. Obviously, bringing in the additional solar volume, but their operational rates are continuing to improve. A lot of the productivity that we delivered was contributed by Hobart.
Speaker #16: So I think everything's progressing as we need it to
Speaker #16: be. Sounds good.
Chris Dankert: Sounds good. Thanks, guys.
Christopher Dankert: Sounds good. Thanks, guys.
Speaker #15: Thanks, guys.
Speaker #2: Thank you,
William Waltz: Thank you, Chris.
William Waltz: Thank you, Chris.
Speaker #2: Chris. This concludes the question and
Operator: This concludes the question and answer session. I would now like to turn the call back over to Bill Waltz for closing remarks.
Operator: This concludes the question and answer session. I would now like to turn the call back over to Bill Waltz for closing remarks.
Speaker #1: Thank you. That concludes the Q&A session. I would now like to turn the call back over to Bill Waltz for closing remarks.
William Waltz: Thank you. Let me take a moment to summarize my 3 key takeaways from today's discussion. First, Atkore's fiscal 2026 is off to a good start. Our results reflect a combination of healthy end markets and self-help productivity gains. We will continue to operate with a proactive mindset as we progress throughout the year. Second, we anticipate favorable market demand for the balance of the year, and we reaffirm our full year outlook. Finally, as we execute previously announced strategic actions and evaluate additional opportunities, we are laser focused on creating long-term value for our shareholders. With that, thank you for your support and interest in our company. We look forward to speaking with you during our next quarterly call. This concludes the call for today.
William Waltz: Thank you. Let me take a moment to summarize my 3 key takeaways from today's discussion. First, Atkore's fiscal 2026 is off to a good start. Our results reflect a combination of healthy end markets and self-help productivity gains. We will continue to operate with a proactive mindset as we progress throughout the year. Second, we anticipate favorable market demand for the balance of the year, and we reaffirm our full year outlook. Finally, as we execute previously announced strategic actions and evaluate additional opportunities, we are laser focused on creating long-term value for our shareholders. With that, thank you for your support and interest in our company. We look forward to speaking with you during our next quarterly call. This concludes the call for today.
Speaker #17: Thank you. Let me take a moment to summarize my three key takeaways from today's discussion. First, fiscal 2026 is off to a good start.
Speaker #17: Our results reflect a combination of healthy end markets and self-help productivity gains. We will continue to operate with a proactive mindset as we progress throughout the year.
Speaker #17: Second, we anticipate favorable market demand for the balance of the year as we reaffirm our full-year outlook. Finally, as we execute previously announced strategic actions and evaluate additional opportunities, we are laser-focused on creating long-term value for our shareholders.
Speaker #17: With that, thank you for your support and interest in our company. We look forward to speaking with you during our next quarterly call. This concludes the call for Q1 2026.
Speaker #17: today. This concludes today's conference.
Operator: This concludes today's conference. You may now disconnect.
Operator: This concludes today's conference. You may now disconnect.
Speaker #1: You may now
Speaker #1: disconnect. Please wait.
Operator: Please wait. The conference will begin shortly.
Operator: Please wait. The conference will begin shortly.
