Atkore (NYSE:ATKR) Q3 2026 Earnings Call

0:00 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 Third Quarter Fiscal Year twenty twenty six Earnings Conference Call. All lines are in a listen only mode. I would now like to turn the conference over to your host, Matt Klein, Vice President of Treasury and Investor Relations. You may begin.

0:23 Thank you, and good morning, everyone. Welcome to our third quarter twenty twenty six earnings conference call. I'm 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.

1:21 Adjusted EBITDA and adjusted diluted earnings per share are non GAAP measures.

1:28 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. Thanks, Matt, and good morning, everyone. Today, I'd like to provide an overview of Atkore's third quarter fiscal twenty twenty six results for the quarter ended 06/26/2026, 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 Prismian in an all cash transaction valued at $95 per share, representing an enterprise value of approximately $3,800,000,000 As Bill Waltz mentioned in the announcement press release, we are pleased to have entered into an agreement with Prismian that delivers value to Atkore's shareholders, and we believe our solid quarterly results in this transaction are a testament to our team's focus and dedication.

2:40 Before I review the third quarter operating results, I'd also like to mention the following. During the third quarter, we completed the divestitures of our High Density Polyethylene, 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 Tektron 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 $50,000,000 The combined settlements for all three classes were $186,500,000 Please note the payment for the third class of $50,000,000 was made in the beginning of our fourth quarter.

3:34 Now turning to our third quarter performance. We were pleased with our third quarter operational results. To summarize, we achieved net sales of $795,000,000 and adjusted EBITDA of $105,000,000 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 the third quarter, with contributions from both our Electrical and S and I segments. Turning now to the income statement, let me provide a bit more detail. Overall net sales increased 8.1% to $795,000,000 compared with $735,000,000 in the same quarter last year.

4:26 The increase was driven primarily by higher sales volume, which contributed 65,700,000 along with $22,400,000 from higher average selling prices and $8,000,000 of favorable foreign exchange impacts. These gains were partially offset by $39,000,000 related to divestitures. Adjusted EBITDA increased 4.7% to 105,000,000 compared to $100,000,000 last year, reflecting the improvement in gross profit and continued operational execution. GAAP net income for the quarter was $700,000 or $02 per diluted share, compared with net income of $43,000,000 or $1.25 per diluted share in the prior year period.

5:16 The decline was primarily driven by the previously mentioned $50,000,000 litigation settlement expense. Looking at our segment results. The Electrical segment continued to deliver strong growth. Net sales increased 10.9% to 578,300,000 compared with $521,300,000 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 89,300,000 Adjusted EBITDA margin was 15.4% compared with 15.6% in the prior year.

6:04 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 $216,800,000 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 $28,100,000 down from $30,700,000 in the prior year quarter. Adjusted EBITDA margin decreased to 13% from 14.4%. Regarding cash and liquidity, the company ended the third quarter with $346,200,000 in cash and cash equivalents.

6:54 In addition, please note that on 07/30/2026, the Board of Directors of Atkore approved a quarterly dividend of $0.33 per share. The dividend will be paid on 08/28/2026 to shareholders of record as of 08/18/2026. With that, thank you for your support and interest in our company. This concludes the call for today. This concludes today's conference call. You may now disconnect.