Q3 2026 Atkore Inc Earnings Call

Operator: Good morning. My name is Jeannie, and I will be your conference operator today. At this time, I would like to welcome everyone to Atkore's Q3 Fiscal Year 2026 Earnings Conference Call. All lines are in a listen-only mode. I would now like to turn the conference over to your host, Matt Kline, Vice President of Treasury and Investor Relations. You may begin.

Operator: Good morning. My name is Jeannie, and I will be your conference operator today. At this time, I would like to welcome everyone to Atkore's Q3 fiscal year 2026 earnings conference call. All lines are in a listen-only mode. I would now like to turn the conference over to your host, Matt Kline, Vice President of Treasury and Investor Relations. You may begin.

Matt Kline: Thank you. Good morning, everyone. Welcome to our Q3 2026 earnings conference call. I am joined today by John Deitzer, our Chief Financial Officer. Given our announcement earlier this week regarding the acquisition of the company, we will not be taking questions today. This call is being held in accordance with the terms of the indenture governing our senior notes due 2031. Please refer to our recent SEC filings, including our Form 10-Q filed earlier this week and our quarterly press release, which we will use as reference for this discussion today. 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.

Matt Kline: Thank you. Good morning, everyone. Welcome to our Q3 2026 earnings conference call. I am joined today by John Deitzer, our Chief Financial Officer. Given our announcement earlier this week regarding the acquisition of the company, we will not be taking questions today. This call is being held in accordance with the terms of the indenture governing our senior notes due 2031. Please refer to our recent SEC filings, including our Form 10-Q filed earlier this week and our quarterly press release, which we will use as reference for this discussion today.

Speaker #2: Please refer to our recent SEC filings including our Form 10-Q filed earlier this week and our quarterly press release, which we will use as reference for this discussion today.

Speaker #2: 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.

Matt Kline: 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. Reconciliations of non-GAAP measures and a presentation of the most comparable GAAP measures are available in the appendix to the previously mentioned earnings press release. With that, I'll turn it over to John.

Speaker #2: 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 the previously mentioned earnings press release.

Matt Kline: Reconciliations of non-GAAP measures and a presentation of the most comparable GAAP measures are available in the appendix to the previously mentioned earnings press release. With that, I'll turn it over to John.

Speaker #2: With that, I'll turn it over to John.

Speaker #3: Thanks, Matt. And good morning, everyone. Today I'd like to provide an overview of Atkore's Q3 fiscal 2026 results for the quarter ended June 26, 2026, and highlight the key drivers behind our performance.

John Deitzer: Thanks, Matt. Good morning, everyone. Today, I'd like to provide an overview of Atkore's Q3 fiscal 2026 results for the quarter ended 26 June 2026, and highlight the key drivers behind our performance. Before discussing the quarter, I want to acknowledge the announcement made earlier this week in which Atkore has entered into a definitive agreement to be acquired by Prysmian in an all-cash transaction valued at $95 per share, representing an enterprise value of approximately $3.8 billion. As Bill Waltz mentioned in the announcement press release, we are pleased to have entered into an agreement with Prysmian that delivers value to Atkore shareholders. We believe our solid quarterly results in this transaction are a testament to our team's focus and dedication. Before I review the Q3 operating results, I'd also like to mention the following.

John Deitzer: Thanks, Matt. Good morning, everyone. Today, I'd like to provide an overview of Atkore's Q3 fiscal 2026 results for the quarter ended 26 June 2026, and highlight the key drivers behind our performance. Before discussing the quarter, I want to acknowledge the announcement made earlier this week in which Atkore has entered into a definitive agreement to be acquired by Prysmian in an all-cash transaction valued at $95 per share, representing an enterprise value of approximately $3.8 billion.

Speaker #3: Before discussing the quarter, I want to acknowledge the announcement made earlier this week, in which Atkore has entered into a definitive agreement to be acquired by Prismion in an all-cash transaction valued at $95 per share, representing an enterprise value of approximately $3.8 billion.

Speaker #3: As Bill Waltz mentioned in the announcement press release, we are pleased to have entered into an agreement with Prismion that delivers value to Atkore shareholders, and we believe our solid quarterly results and this transaction are a testament to our team's focus and dedication.

John Deitzer: As Bill Waltz mentioned in the announcement press release, we are pleased to have entered into an agreement with Prysmian that delivers value to Atkore shareholders. We believe our solid quarterly results in this transaction are a testament to our team's focus and dedication. Before I review the Q3 operating results, I'd also like to mention the following.

Speaker #3: Before I review the Q3 operating results, I'd also like to mention the following: During Q3, we completed the divestiture of our high-density polyethylene, or HDPE, business and the sale of our surface protection and powder coating business in Belgium.

John Deitzer: During the Q3, we completed the divestitures of our high-density polyethylene, or HDPE business, and the sale of our surface protection and powder coating business in Belgium, both of which were announced last May. As you may recall, we also completed the divestiture of our Tectron mechanical tube business earlier this year. In addition, the company entered into a settlement agreement with the last of three putative classes in an ongoing litigation matter for $50 million. The combined settlements for all three classes were $186.5 million.

John Deitzer: During the Q3, we completed the divestitures of our high-density polyethylene, or HDPE business, and the sale of our surface protection and powder coating business in Belgium, both of which were announced last May. As you may recall, we also completed the divestiture of our Tectron mechanical tube business earlier this year. In addition, the company entered into a settlement agreement with the last of three putative classes in an ongoing litigation matter for $50 million. The combined settlements for all three classes were $186.5 million. Please note the payment for the third class of $50 million was made in the beginning of our Q4. Turning to our Q3 performance. We were pleased with our Q3 operational results. To summarize, we achieved net sales of $795 million and adjusted EBITDA of $105 million. Adjusted EPS came in at $1.92.

Speaker #3: Both of which were announced last May. As you may recall, we also completed the divestiture of our Tektron mechanical tube business earlier this year.

Speaker #3: In addition, the company entered into a settlement agreement with the last of three putative classes in an ongoing litigation matter for $50 million. The combined settlements for all three classes were $186.5 million.

Speaker #3: Please note the payment for the third class of $50 million was made at the beginning of our Q4. Now, turning to our Q3 performance.

John Deitzer: Please note the payment for the third class of $50 million was made in the beginning of our Q4. Turning to our Q3 performance. We were pleased with our Q3 operational results. To summarize, we achieved net sales of $795 million and adjusted EBITDA of $105 million. Adjusted EPS came in at $1.92. All three metrics were sequentially better than our Q2 performance and an increase versus the prior year. Organic volume increased 9% year-over-year in Q3, with contributions from both our electrical and S&I segments.

Speaker #3: We were pleased with our Q3 operational results. To summarize, we achieved net sales of $795 million and adjusted EBITDA of $105 million. Adjusted EPS came in at $1.92.

Speaker #3: All three metrics were sequentially better than our Q2 performance and increased versus the prior year. Organic volume increased 9% year-over-year in Q3, with contributions from both our Electrical and S&I segments.

John Deitzer: All three metrics were sequentially better than our Q2 performance and an increase versus the prior year. Organic volume increased 9% year over year in the Q3, with contributions from both our Electrical and S&I segment. Let me provide a bit more detail. Overall net sales increased 8.1% to $795 million, compared with $735 million in the same quarter last year. The increase was driven primarily by higher sales volume, which contributed $65.7 million, along with $22.4 million from higher average selling prices and $8 million of favorable foreign exchange impacts. These gains were partially offset by $39 million related to divestitures. Adjusted EBITDA increased 4.7% to $105 million compared to $100 million last year, reflecting the improvement in gross profit and continued operational execution.

Speaker #3: Turning now to the income statement, let me provide a bit more detail. Overall net sales increased 8.1% to $795 million compared with $735 million in the same quarter last year.

John Deitzer: Let me provide a bit more detail. Overall net sales increased 8.1% to $795 million, compared with $735 million in the same quarter last year. The increase was driven primarily by higher sales volume, which contributed $65.7 million, along with $22.4 million from higher average selling prices and $8 million of favorable foreign exchange impacts. These gains were partially offset by $39 million related to divestitures. Adjusted EBITDA increased 4.7% to $105 million compared to $100 million last year, reflecting the improvement in gross profit and continued operational execution.

Speaker #3: The increase was driven primarily by higher sales volume which contributed $65.7 million. Along with $22.4 million from higher average selling prices, and $8 million of favorable foreign exchange impacts.

Speaker #3: These gains were partially offset by $39 million related to divestitures. Adjusted EBITDA increased 4.7% to $105 million, compared to $100 million last year, reflecting the improvement in gross profit and continued operational execution.

Speaker #3: GAAP net income for the quarter was $0.7 million, or $0.02 per diluted share, compared with net income of $43 million, or $1.25 per diluted share in the prior year period.

John Deitzer: GAAP net income for the quarter was $0.7 million, or $0.02 per diluted share, compared with net income of $43 million, or $1.25 per diluted share in the prior year period. The decline was primarily driven by the previously mentioned $50 million litigation settlement expense. Looking at our segment results, the Electrical segment continued to deliver strong growth. Net sales increased 10.9% to $578.3 million, compared with $521.3 million last year.

John Deitzer: GAAP net income for the quarter was $0.7 million, or $0.02 per diluted share, compared with net income of $43 million, or $1.25 per diluted share in the prior year period. The decline was primarily driven by the previously mentioned $50 million litigation settlement expense. Looking at our segment results, the Electrical segment continued to deliver strong growth. Net sales increased 10.9% to $578.3 million, compared with $521.3 million last year. The increase was driven by higher sales volume, favorable foreign exchange effects, and increased average selling prices, partially offset by the impact of divestitures. Adjusted EBITDA for the segment increased 10% to $89.3 million. Adjusted EBITDA margin was 15.4%, compared with 15.6% in the prior year. While volume growth supported earnings expansion, margin was modestly affected as higher input costs outpaced pricing improvements. In the Safety & Infrastructure segment, net sales increased 1.3% to $216.8 million.

Speaker #3: The decline was primarily driven by the previously mentioned $50 million litigation settlement expense. Looking at our segment results, the Electrical segment continued to deliver strong growth.

Speaker #3: Net sales increased 10.9% to $578.3 million, compared with $521.3 million last year. The increase was driven by higher sales volume, favorable foreign exchange effects, and increased average selling prices.

John Deitzer: The increase was driven by higher sales volume, favorable foreign exchange effects, and increased average selling prices, partially offset by the impact of divestitures. Adjusted EBITDA for the segment increased 10% to $89.3 million. Adjusted EBITDA margin was 15.4%, compared with 15.6% in the prior year. While volume growth supported earnings expansion, margin was modestly affected as higher input costs outpaced pricing improvements. In the Safety & Infrastructure segment, net sales increased 1.3% to $216.8 million.

Speaker #3: Partially offset by the impact of divestitures. Adjusted EBITDA for the segment increased 10% to $89.3 million. Adjusted EBITDA margin was 15.4%, compared with 15.6% in the prior year.

Speaker #3: While volume growth supported earnings expansion, margin was modestly affected as higher input costs outpaced pricing improvements. In the Safety and Infrastructure segment, net sales increased 1.3% to $216.8 million.

Speaker #3: Growth was supported by higher average selling prices increased volume and lower solar credit rebates. Partially offset by the impact of recent divestitures. Adjusted EBITDA was 28.1 million, down from $30.7 million in the prior year quarter.

John Deitzer: Growth was supported by higher average selling prices, increased volume, and lower solar credit rebates, partially offset by the impact of recent divestitures. Adjusted EBITDA was $28.1 million, down from $30.7 million in the prior year quarter. Adjusted EBITDA margin decreased to 13% from 14.4%. Regarding cash and liquidity, the company ended the Q3 with $346.2 million in cash and cash equivalents. In addition, please note that on 30 July 2026, the board of directors of Atkore approved a quarterly dividend of $0.33 per share. The dividend will be paid on 28 August 2026 to shareholders of record as of 18 August 2026. With that, thank you for your support and interest in our company. This concludes the call for today.

John Deitzer: Growth was supported by higher average selling prices, increased volume, and lower solar credit rebates, partially offset by the impact of recent divestitures. Adjusted EBITDA was $28.1 million, down from $30.7 million in the prior year quarter. Adjusted EBITDA margin decreased to 13% from 14.4%. Regarding cash and liquidity, the company ended the Q3 with $346.2 million in cash and cash equivalents. In addition, please note that on 30 July 2026, the board of directors of Atkore approved a quarterly dividend of $0.33 per share.

Speaker #3: Adjusted EBITDA margin decreased to 13% from 14.4%. Regarding cash and liquidity, the company ended the Q3 with $346.2 million in cash and cash equivalents.

Speaker #3: In addition, please note that on July 30, 2026, the Board of Directors of Atkore approved a quarterly dividend of $33 per share. The dividend will be paid on August 28, 2026, to shareholders of record as of August 18, 2026.

John Deitzer: The dividend will be paid on 28 August 2026 to shareholders of record as of 18 August 2026. With that, thank you for your support and interest in our company. This concludes the call for today.

Speaker #3: With that, thank you for your support and interest in our company. This concludes the call for today.

Operator: This concludes today's conference call. You may now disconnect.

Operator: This concludes today's conference call. You may now disconnect.