On August 6, 2024, Atkore Inc (ATKR, Financial) released its 8-K filing for the fiscal third quarter ended June 28, 2024. Atkore Inc is a diversified industrials company and a manufacturer of electrical, mechanical, and safety infrastructure solutions. The company operates through two business segments: Electrical and Safety & Infrastructure.
Performance Overview
Atkore Inc reported net sales of $822.4 million for Q3 2024, a 10.5% decrease compared to $919.1 million in the same period last year. The decline in net sales was primarily driven by decreased average selling prices and lower sales volumes.
Net income per diluted share decreased by $1.80 to $3.33, while adjusted net income per diluted share fell by $1.92 to $3.80. The company's net income dropped by $77.9 million to $123.4 million, and adjusted EBITDA decreased by $64.1 million to $206.1 million.
Segment Performance
In the Electrical segment, net sales decreased by $99.7 million, or 14.1%, to $606.0 million. This decline was mainly due to reduced average selling prices and lower sales volumes. Adjusted EBITDA for the segment fell by $84.0 million to $182.6 million, with the adjusted EBITDA margin decreasing to 30.1% from 37.8% in the prior year.
Conversely, the Safety & Infrastructure segment saw a slight increase in net sales by $3.4 million, or 1.6%, to $217.0 million. The segment's adjusted EBITDA rose by $8.5 million to $30.0 million, with the adjusted EBITDA margin improving to 13.8% from 10.1% in the previous year.
Financial Metrics and Analysis
Gross profit for Q3 2024 decreased by $71.1 million to $279.7 million, with the gross margin declining to 34.0% from 38.2% in the prior year. The reduction in gross profit was primarily due to lower average selling prices and increased freight costs, partially offset by the net benefit of solar credits and reduced input costs.
Net income for the quarter was $123.4 million, down from $201.3 million in the same period last year. Adjusted EBITDA decreased by 23.7% to $206.1 million, primarily due to lower gross profit.
| Metric | Q3 2024 | Q3 2023 | Change | % Change |
|---|---|---|---|---|
| Net Sales | $822.4 million | $919.1 million | -$96.8 million | -10.5% |
| Net Income | $123.4 million | $201.3 million | -$77.9 million | -38.7% |
| Adjusted EBITDA | $206.1 million | $270.3 million | -$64.1 million | -23.7% |
| Net Income per Diluted Share | $3.33 | $5.13 | -$1.80 | -35.1% |
| Adjusted Net Income per Diluted Share | $3.80 | $5.72 | -$1.92 | -33.6% |
Challenges and Outlook
Atkore Inc faced several challenges during the quarter, including a limited increase in demand from the summer construction season and a soft pricing environment across most of its Electrical business. These factors contributed to the overall decline in financial performance.
“The third quarter proved to be more challenging than we initially anticipated due to a limited increase in demand from the summer construction season and an overall soft pricing environment across most of our Electrical business,” said Bill Waltz, Atkore President and Chief Executive Officer.
Despite these challenges, the company remains optimistic about its long-term strategy and operational efficiency improvements, particularly in the Safety & Infrastructure segment. Atkore also repurchased $125 million in shares as part of its capital deployment strategy while continuing to invest in organic growth initiatives.
Dividend and Full-Year Outlook
On July 31, 2024, Atkore’s Board of Directors declared a quarterly cash dividend of $0.32 per share of common stock, payable on August 30, 2024, to stockholders of record on August 20, 2024.
For the full year, Atkore has adjusted its outlook for adjusted EBITDA to be between $772 million and $782 million, and adjusted net income per diluted share to be between $14.30 and $14.52.
For more detailed information, please refer to the full 8-K filing.
Explore the complete 8-K earnings release (here) from Atkore Inc for further details.
