Atkore Inc 10-Q for FY2022 Q2

Atkore Inc. (ATKR)

10-Q 2022-05-03 For: 2022-03-25

Added on April 08, 2026

About this 10-Q

Atkore Inc filed this 10-Q on May 3, 2022, covering the quarter ended March 25, 2022 (FY2022 Q2).

Headline figures

Quarter ended March 25, 2022, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $982.57M; up 53.6% from $639.54M a year earlier
Net income: $233.48M; up 86.9% from net income of $124.93M a year earlier
Diluted EPS: $5.08; up 96.9% from $2.58 a year earlier

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Delaware						90-0631463
(State or other jurisdiction of incorporation or organization)						(IRS Employer Identification No.)


Title of each class	Trading symbol	Name of each exchange on which registered
Common Stock, $.01 par value per share	ATKR	New York Stock Exchange


			Page No.

PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)			2
Condensed Consolidated Statements of Operations			2
Condensed Consolidated Statements of Comprehensive Income			3
Condensed Consolidated Balance Sheets			4
Condensed Consolidated Statements of Cash Flows			5
Condensed Consolidated Statement of Changes in Shareholders’ Equity			6
Notes to Condensed Consolidated Financial Statements			8
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			23
Item 3. Quantitative and Qualitative Disclosures about Market Risk			33
Item 4. Controls and Procedures			33

PART II. OTHER INFORMATION
Item 1. Legal Proceedings			35
Item 1A. Risk Factors			35
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			35
Item 3. Defaults Upon Senior Securities			35
Item 4. Mine Safety Disclosures			35
Item 5. Other Information			35
Item 6. Exhibits			36
Signatures			37


		Three months ended				Six months ended
(in thousands, except per share data)	Note	March 25, 2022		March 26, 2021		March 25, 2022		March 26, 2021
Net sales		$	982,573	$	639,543	$	1,823,374	$	1,150,625
Cost of sales		566,157		399,694		1,052,150		721,585
Gross profit		416,416		239,849		771,224		429,040
Selling, general and administrative		88,918		67,340		167,069		128,418
Intangible asset amortization	11	8,701		8,096		16,930		16,356
Operating income		318,797		164,413		587,225		284,266
Interest expense, net		7,514		8,416		14,432		16,670

Other income, net	5	(807)		(7,240)		(1,115)		(7,671)
Income before income taxes		312,090		163,237		573,908		275,267
Income tax expense	6	78,613		38,304		135,588		65,268
Net income		$	233,477	$	124,933	$	438,320	$	209,999

Net income per share
Basic	7	$	5.14	$	2.62	$	9.51	$	4.39
Diluted	7	$	5.08	$	2.58	$	9.39	$	4.33


		Three months ended				Six months ended
(in thousands)	Note	March 25, 2022		March 26, 2021		March 25, 2022		March 26, 2021
Net income		$	233,477	$	124,933	$	438,320	$	209,999
Other comprehensive (loss) income, net of tax:
Change in foreign currency translation adjustment		(2,554)		(818)		(4,012)		6,233
Change in unrecognized loss related to pension benefit plans	4	125		262		250		524
Total other comprehensive (loss) income	8	(2,429)		(556)		(3,762)		6,757
Comprehensive income		$	231,048	$	124,377	$	434,558	$	216,756


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


(in thousands, except share and per share data)	Note	March 25, 2022		September 30, 2021
Assets
Current Assets:
Cash and cash equivalents		$	390,399	$	576,289
Accounts receivable, less allowance for current and expected credit losses of $3,503 and $2,510, respectively		623,361		524,926
Inventories, net	9	411,356		285,989
Prepaid expenses and other current assets		64,924		34,248
Total current assets		1,490,040		1,421,452
Property, plant and equipment, net	10	285,936		275,622
Intangible assets, net	11	242,229		241,204
Goodwill	11	212,167		199,048
Right-of-use assets, net		37,757		41,113
Deferred tax assets	6	33,970		29,693
Other long-term assets		2,021		1,967
Total Assets		$	2,304,120	$	2,210,099
Liabilities and Equity
Current Liabilities:

Accounts payable		269,830		243,164
Income tax payable		10,741		72,953
Accrued compensation and employee benefits		37,061		57,437
Customer liabilities		66,138		80,324
Lease obligations		11,327		11,785
Other current liabilities		63,179		59,273
Total current liabilities		458,276		524,936
Long-term debt	12	759,461		758,386
Long-term lease obligations		27,392		30,236
Deferred tax liabilities	6	18,566		16,746

Pension liabilities		2,515		3,819
Other long-term liabilities		14,636		11,240
Total Liabilities		1,280,846		1,345,363
Equity:
Common stock, $0.01 par value, 1,000,000,000 shares authorized, 43,879,446 and 45,997,159 shares issued and outstanding, respectively		440		461
Treasury stock, held at cost, 290,600 and 290,600 shares, respectively		(2,580)		(2,580)
Additional paid-in capital		492,070		506,921
Retained earnings		565,832		388,660
Accumulated other comprehensive loss	8	(32,488)		(28,726)
Total Equity		1,023,274		864,736
Total Liabilities and Equity		$	2,304,120	$	2,210,099


	Common Stock			Treasury Stock		Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Total Equity
(in thousands)	Shares	Amount		Amount
Balance as of September 30, 2021	45,997	$	461	$	(2,580)	$	506,921	$	388,660	$	(28,726)	$	864,736
Net income	—	—		—		—		204,843		—		204,843
Other comprehensive loss	—	—		—		—		—		(1,333)		(1,333)

Stock-based compensation	—	—		—		3,427		—		—		3,427
Issuance of common stock, net of shares withheld for tax	355	4		—		(24,509)		—		—		(24,505)
Repurchase of common stock	(958)	(10)		—				(104,537)		—		(104,547)
Balance as of December 24, 2021	45,394	$	455	$	(2,580)	$	485,839	$	488,966	$	(30,059)	$	942,621

Net income	—	—		—		—		233,477		—		233,477
Other comprehensive (loss)	—	—		—		—		—		(2,429)		(2,429)
Stock-based compensation	—	—		—		6,128		—		—		6,128
Issuance of common stock, net of shares withheld for tax	24	—		—		103		—		—		103
Repurchase of common stock	(1,539)	(15)		—		—		(156,611)		—		(156,626)
Balance as of March 25, 2022	43,879	$	440	$	(2,580)	$	492,070	$	565,832	$	(32,488)	$	1,023,274


(in thousands)	FRE Composites
Fair value of consideration transferred:
Cash consideration	$	36,993




Fair value of assets acquired and liabilities assumed:
Cash	437
Accounts receivable	2,163
Inventories	3,355
Intangible assets	18,300
Fixed assets	8,509
Accounts payable	(1,186)

Income taxes	(4,293)
Other	(240)
Net assets acquired	27,045
Excess purchase price attributed to goodwill acquired	$	9,948


	FRE Composites
(in thousands)	Fair Value		Weighted Average Useful Life (Years)
Customer relationships	$	14,700	12
Other	3,600		6
Total intangible assets	$	18,300


(in thousands)	Defined Benefit Pension Items		Currency Translation Adjustments		Total
Balance as of December 24, 2021	$	(19,193)	$	(10,866)	$	(30,059)
Other comprehensive loss before reclassifications	—		(2,554)		(2,554)
Amounts reclassified from accumulated other comprehensive income, net of tax	125		—		125
Net current period other comprehensive income (loss)	125		(2,554)		(2,429)

Balance as of March 25, 2022	$	(19,068)	$	(13,420)	$	(32,488)


(in thousands)	Electrical		Safety & Infrastructure		Total
Balance as of September 30, 2021	$	155,471	$	43,577	$	199,048
Goodwill acquired during year	7,348		6,398		13,746
Exchange rate effects	(822)		195		(627)
Balance as of March 25, 2022	$	161,997	$	50,170	$	212,167


(in thousands)
Remaining 2022	$	18,923
2023	34,656
2024	29,319
2025	17,310
2026	15,740
2027	14,813
Thereafter	18,588


	% Change
Volume	(1.3)	%
Average selling prices	52.9	%
Foreign exchange	(0.4)	%
Acquisitions	2.3	%
Other	0.1	%
Net sales	53.6	%


(in thousands)	March 25, 2022		September 30, 2021
Land	$	22,768	$	23,043
Buildings and related improvements	137,401		136,680
Machinery and equipment	386,350		372,503
Leasehold improvements	10,168		9,720
Software	27,988		28,288
Construction in progress	60,259		43,055
Property, plant and equipment, at cost	644,934		613,289
Accumulated depreciation	(358,998)		(337,667)
Property, plant and equipment, net	$	285,936	$	275,622


		March 25, 2022						September 30, 2021
(in thousands)	Weighted Average Useful Life (Years)	Gross Carrying Value		Accumulated Amortization		Net Carrying Value		Gross Carrying Value		Accumulated Amortization		Net Carrying Value
Amortizable intangible assets:
Customer relationships	11	$	387,626	$	(251,093)	$	136,533	$	371,048	$	(234,946)	$	136,102
Other	7	24,443		(11,627)		12,816		23,633		(11,411)		12,222
Total		412,069		(262,720)		149,349		394,681		(246,357)		148,324
Indefinite-lived intangible assets:
Trade names		92,880		—		92,880		92,880		—		92,880
Total		$	504,949	$	(262,720)	$	242,229	$	487,561	$	(246,357)	$	241,204


	March 25, 2022				September 30, 2021
(in thousands)	Carrying Value		Fair Value		Carrying Value		Fair Value

Senior Secured Term Loan Facility due May 26, 2028	$	373,000	$	370,553	$	373,000	$	371,486
Senior Notes due June 2031	400,000		372,600		400,000		415,828
Total Debt	$	773,000	$	743,153	$	773,000	$	787,314


	Three months ended				Six months ended
(in thousands)	March 25, 2022		March 26, 2021		March 25, 2022		March 26, 2021
Operating segment Adjusted EBITDA
Electrical	$	330,970	$	188,826	$	610,517	$	322,099
Safety & Infrastructure	28,917		16,193		56,349		30,445
Total	$	359,887	$	205,019	$	666,866	$	352,544
Unallocated expenses (a)	(13,721)		(11,654)		(27,690)		(22,189)
Depreciation and amortization	(19,994)		(19,265)		(40,040)		(38,309)
Interest expense, net	(7,514)		(8,416)		(14,432)		(16,670)



Stock-based compensation	(6,128)		(4,868)		(9,555)		(10,390)
Other (b)	(440)		2,421		(1,241)		10,281
Income before income taxes	$	312,090	$	163,237	$	573,908	$	275,267

(a) Represents unallocated selling, general and administrative activities and associated expenses including, in part, executive, legal, finance, human resources, information technology, business development and communications, as well as certain costs and earnings of employee-related benefits plans, such as stock-based compensation and a portion of self-insured medical costs.
(b) Represents other items, such as inventory reserves and adjustments, loss on disposal of property, plant and equipment, insurance recovery related to damages of property, plant and equipment, release of indemnified uncertain tax positions, realized or unrealized gain (loss) on foreign currency impacts of intercompany loans and related forward currency derivatives, gain on purchase of business, restructuring costs and transaction costs.


	% Change
Volume	(1.9)	%
Average input costs	37.9	%
Foreign exchange	(0.8)	%
Acquisitions	2.5	%
Other	3.9	%
Cost of sales	41.6	%


	% Change
Volume	(5.9)	%
Average selling prices	49.3	%
Acquisitions	3.5	%
Other	—	%
Net sales	46.9	%


	% Change
Volume	(5.1)	%
Average selling prices	61.5	%
Foreign exchange	(0.1)	%
Acquisitions	2.2	%

Net sales	58.5	%


	% Change
Volume	(5.6)	%
Average input costs	44.6	%
Foreign exchange	(0.2)	%
Acquisitions	2.2	%
Other	4.8	%
Cost of sales	45.8	%


	% Change
Volume	(2.6)	%
Average selling prices	60.5	%
Foreign exchange	(0.2)	%
Acquisitions	2.3	%
Other	0.2	%
Net sales	60.2	%


	Change (%)
Volume	(13.1)	%
Average selling prices	64.3	%
Acquisitions	2.0	%
Other	(0.1)	%
Net sales	53.1	%


Period (4-5-4 calendar)	Total Number Of Shares Purchased	Avg Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Program	Maximum Value of Shares that May Yet Be Purchased Under the Program
December 25, 2021 to January 21, 2022	271	$	107.27	271	$	266,418
January 22, 2022 to February 25, 2022	729	$	100.57	729	$	193,103
February 26, 2022 to March 25, 2022	539	$	100.49	539	$	138,917
Total	1,539			1,539


			31.1#			Certification of Chief Executive Officer Pursuant to Exchange Act Rule 13a - 14, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
			31.2#			Certification of Chief Financial Officer Pursuant to Exchange Act Rule 13a - 14, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
			32.1#			Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
			32.2#			Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
			101.INS#			XBRL Instance Document (formatted as inline XBRL)
			101.SCH#			XBRL Taxonomy Schema Linkbase Document (formatted as inline XBRL)
			101.CAL#			XBRL Taxonomy Calculation Linkbase Document
			101.DEF#			XBRL Taxonomy Definition Linkbase Document
			101.LAB#			XBRL Taxonomy Labels Linkbase Document
			101.PRE#			XBRL Taxonomy Presentation Linkbase Document
			104			Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)
			#			Filed herewith


			ATKORE INC.
			(Registrant)
Date:	May 3, 2022	By:	/s/ David P. Johnson
			Vice President and Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)


Dated:	May 3, 2022	/s/ William E. Waltz
		William E. Waltz
		President and Chief Executive Officer (Principal Executive Officer)