Atkore Inc 10-K for FY2023

Atkore Inc. (ATKR)

10-K 2023-11-17 For: 2023-09-30

Added on April 08, 2026

About this 10-K

Atkore Inc filed this 10-K on November 17, 2023, covering the fiscal year ended September 30, 2023 (FY2023).

Headline figures

Fiscal year ended September 30, 2023, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $3.52B; down 10.1% from $3.91B a year earlier
Net income: $689.9M; down 24.5% from net income of $913.43M a year earlier
Diluted EPS: $17.27; down 14.9% from $20.30 a year earlier

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


Securities registered pursuant to Section 12(b) of the Act:
(Title of Each Class)	Trading symbol	(Name of Each Exchange on which Registered)
Common stock, par value $0.01 per share	ATKR	New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act:
	None


		Page No.

PART I
Item 1.	Business	4
Item 1A.	Risk Factors	12
Item 1B.	Unresolved Staff Comments	32
Item 2.	Properties	32
Item 3.	Legal Proceedings	32
Item 4.	Mine Safety Disclosures	32
PART II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities	33
Item 6.	[Reserved]	35
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	36
Item 7A.	Quantitative and Qualitative Disclosures about Market Risk	53
Item 8.	Report of Independent Registered Public Accounting Firm (PCAOB ID No. 34)	55
Item 8.	Financial Statements and Supplementary Data	55
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	99
Item 9A.	Controls and Procedures	99
Item 9B.	Other Information	102
Item 9C.	Disclosure Regarding Foreign Jurisdictions that Prevent Inspections	102
PART III
Item 10.	Directors, Executive Officers and Corporate Governance	104
Item 11.	Executive Compensation	104
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	104
Item 13.	Certain Relationships and Related Transactions, and Director Independence	104
Item 14.	Principal Accounting Fees and Services	104
PART IV
Item 15.	Exhibits and Financial Statement Schedules	105
Item 16.	Form 10-K Summary	105
	Exhibit Index	106
	Signatures	109


	Fiscal Year Ended
(in millions)	September 30, 2023		September 30, 2022		September 30, 2021
United States	$	3,150	$	3,553	$	2,637
International	369		361		291
Total	$	3,519	$	3,914	$	2,928


Reportable Segment	Owned Facilities	Leased Facilities
Electrical	16	39
Safety & Infrastructure	7	17


☒			ANNUAL 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


Period	Total Number of Shares Purchased	Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Program(1)	Maximum Value of Shares that May Yet Be Purchased Under the Program(1)
July 1, 2023 to July 28, 2023	—	$	—	—	$	384,095
July 29, 2023 to September 1, 2023	90	$	153.64	90	$	370,238
September 2, 2023 - September 30, 2023	406	$	150.68	406	$	309,095
Total	496			496


	Equity Compensation Plan Information
(share amounts in thousands)	Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights (1)	Weighted Average Exercise Price of Outstanding Options		Remaining Available for Future Issuance Under Equity Compensation Plans (excluding securities reflected in (1))




Equity compensation plans approved by shareholders	1,209	$	32.93	1,805
Equity compensation plans not approved by shareholders	—	—		—
Total	1,209	$	32.93	1,805


	Fiscal year ended
($ in thousands)	September 30, 2023		September 30, 2022		Change ($)		Change (%)
Net sales	$	3,518,761	$	3,913,949	$	(395,188)	(10.1)	%
Cost of sales	2,179,260		2,273,924		(94,664)		(4.2)	%
Gross profit	1,339,501		1,640,025		(300,524)		(18.3)	%
Selling, general and administrative	388,206		370,044		18,162		4.9	%
Intangible asset amortization	57,804		36,176		21,628		59.8	%
Operating income	893,491		1,233,805		(340,314)		(27.6)	%
Interest expense, net	35,232		30,676		4,556		14.9	%

Other (income) and expense, net	7,969		(490)		8,459		(1,726.3)	%
Income before income taxes	850,290		1,203,620		(353,330)		(29.4)	%
Income tax expense	160,391		290,186		(129,795)		(44.7)	%
Net income	$	689,899	$	913,434	$	(223,535)	(24.5)	%


	Change (%)
Volume	3.2	%
Average selling prices	(16.5)	%

Acquisitions	4.3	%
Other	(1.1)	%
Net sales	(10.1)	%


	Change (%)
Volume	4.8	%
Average input costs	(15.0)	%

Acquisitions	5.8	%
Other	0.2	%
Cost of sales	(4.2)	%


	Change (%)
Volume	(0.3)	%
Average selling prices	(15.7)	%

Acquisitions	5.3	%
Other	(0.5)	%
Net sales	(11.2)	%


	Change (%)
Volume	15.0	%
Average selling prices	(19.1)	%


Other	(2.2)	%
Net sales	(6.3)	%


	Change (%)
Volume	(3.2)	%
Average selling prices	34.0	%
Acquisitions	3.3	%
Other	(0.4)	%
Net sales	33.7	%


($ in thousands)	Less than 1 Year		1-3 Years		3-5 Years		More than 5 Years		Total
Senior Notes due June 2031	$	—	$	—	$	—	$	400,000	$	400,000
New Senior Secured Term Loan Facility Due May 2028	—		—		—		$	371,667	$	371,667
Interest payments (a)	47,173		83,958		77,290		51,708		260,129
Total	$	47,173	$	83,958	$	77,290	$	823,375	$	1,031,796


(a) Interest expense is estimated based on outstanding loan balances assuming principal payments are made according to the payment schedule and interest rates as of September 30, 2023 (4.25% for the Senior Notes, between 5.6% and 7.7% for the New Senior Secured Term Loan Facility).


	Fiscal year ended
(in thousands)	September 30, 2023		September 30, 2022		Change ($)		Change (%)
Cash flows provided by (used in):
Operating activities	$	807,634	$	786,835	$	20,799	2.6	%
Investing activities	(302,150)		(442,802)		140,652		(31.8)	%
Financing activities	(506,781)		(524,206)		17,425		(3.3)	%


	Fiscal year ended
(in thousands)	September 30, 2022		September 30, 2021		Change ($)		Change (%)
Cash flows provided by (used in):
Operating activities	$	786,835	$	572,902	$	213,933	37.3	%
Investing activities	(442,802)		(97,961)		(344,841)		352.0	%
Financing activities	(524,206)		(184,456)		(339,750)		184.2	%


		Fiscal Year Ended
(in thousands)	Note	September 30, 2023		September 30, 2022		September 30, 2021
Net income		$	689,899	$	913,434	$	587,857
Other comprehensive (loss) income, net of tax:
Change in foreign currency translation adjustment		10,212		(23,943)		2,385
Change in unrecognized (loss) income related to pension benefit plans		5,994		2,523		11,443
Total other comprehensive (loss) income	9	16,206		(21,420)		13,828
Comprehensive income		$	706,105	$	892,014	$	601,685


	Change (%)
Volume	(2.9)	%
Average input costs	22.5	%

Acquisitions	3.9	%
Other	2.7	%
Cost of sales	26.2	%


	Change (%)
Volume	(3.1)	%
Average selling prices	35.2	%

Acquisitions	3.5	%
Other	(0.7)	%
Net sales	34.9	%


	Change (%)
Volume	(4.1)	%
Average selling prices	29.9	%



Other	3.2	%
Net sales	29.0	%


		Fiscal Year Ended
(in thousands, except per share data)	Note	September 30, 2023		September 30, 2022		September 30, 2021
Net sales		$	3,518,761	$	3,913,949	$	2,928,014
Cost of sales		2,179,260		2,273,924		1,802,401
Gross profit		1,339,501		1,640,025		1,125,613
Selling, general and administrative		388,206		370,044		293,019
Intangible asset amortization	12	57,804		36,176		33,644

Operating income		893,491		1,233,805		798,950
Interest expense, net		35,232		30,676		32,899
Loss on extinguishment of debt	13	—		—		4,202
Other (income) and expense, net	6	7,969		(490)		(18,152)
Income before income taxes		850,290		1,203,620		780,001
Income tax expense	7	160,391		290,186		192,144
Net income		$	689,899	$	913,434	$	587,857

Net income per share
Basic	8	$	17.51	$	20.56	$	12.38
Diluted	8	$	17.27	$	20.30	$	12.19


(in thousands, except share and per share data)	Note	September 30, 2023		September 30, 2022
Assets
Current Assets:
Cash and cash equivalents		$	388,114	$	388,751
Accounts receivable, less allowance for current and expected credit losses of $5,179 and $2,544, respectively		559,854		528,904
Inventories, net	10	493,852		454,511
Prepaid expenses and other current assets		96,670		80,654
Total current assets		1,538,490		1,452,820
Property, plant and equipment, net	11	559,041		390,220
Intangible assets, net	12	394,372		382,706
Goodwill	12	311,106		289,330
Right-of-use assets, net	2	120,747		71,035
Deferred income taxes	7	546		9,409
Other long-term assets		10,707		3,476
Total Assets		$	2,935,009	$	2,598,996
Liabilities and Equity
Current Liabilities:

Accounts payable		$	292,734	$	244,100
Income tax payable		6,322		5,521
Accrued compensation and employee benefits		45,576		61,273
Customer liabilities	1	121,576		99,447
Lease obligations	2	16,230		13,789
Other current liabilities		82,166		77,781
Total current liabilities		564,604		501,911
Long-term debt	13	762,687		760,537
Long-term lease obligations	2	105,517		57,975
Deferred income taxes	7	22,346		15,640


Other long-term liabilities		11,736		13,146
Total Liabilities		1,466,890		1,349,209
Equity:
Common stock, $0.01 par value, 1,000,000,000 shares authorized, 37,317,893 and 41,351,350 shares issued and outstanding, respectively		374		415
Treasury stock, held at cost, 0 and 260,900 shares, respectively		—		(2,580)
Additional paid-in capital		506,783		500,117
Retained earnings		994,902		801,981
Accumulated other comprehensive loss	9	(33,940)		(50,146)
Total Equity		1,468,119		1,249,787
Total Liabilities and Equity		$	2,935,009	$	2,598,996


	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, 2020	47,407	$	475	$	(2,580)	$	487,223	$	(64,154)	$	(42,554)	$	378,410
Net income	—	—		—		—		587,857		—		587,857
Other comprehensive income (loss)	—	—		—		—		—		$	13,828	13,828

Stock-based compensation	—	—		—		17,047		—		—		17,047
Issuance of common stock, net of shares withheld for tax	918	9		—		2,651		—		—		2,660
Repurchase of common stock	(2,328)	(23)		—		—		(135,043)		—		(135,066)
Balance as of September 30, 2021	45,997	461		(2,580)		506,921		388,660		(28,726)		864,736
Net income	—	—		—		—		913,434		—		913,434
Other comprehensive income (loss)	—	—		—		—		—		(21,420)		(21,420)
Stock-based compensation	—	—		—		17,245		—		—		17,245
Issuance of common stock, net of shares withheld for tax	434	4		—		(24,049)		—		—		(24,045)
Repurchase of common stock	(5,080)	(51)		—		—		(500,113)		—		(500,161)
Balance as of September 30, 2022	41,351	415		(2,580)		500,117		801,981		(50,146)		1,249,787
Net income	—	—		—		—		689,899		—		689,899
Other comprehensive income (loss)	—	—		—		—		—		16,206		16,206
Stock-based compensation	—	—		—		21,101		—		—		21,101
Issuance of common stock, net of shares withheld for tax	288	3		—		(14,435)		—		—		(14,432)
Repurchase of common stock	(4,322)	(43)		—		—		(494,399)		—		(494,442)
Retirement of Treasury Stock				2,580				(2,580)				—
Balance as of September 30, 2023	37,317	375		—		506,783		994,901		(33,940)		$	1,468,119


Buildings						4 to 40 years
Building improvements						3 to 20 years
Machinery and equipment						1 to 20 years

Leasehold improvements						Lesser of remaining term of the lease or useful life
Software						2 to 10 years


(in thousands)	Financing Leases		Operating Leases
2024	$	1,369	$	21,471
2025	1,003		19,557
2026	578		17,913
2027	131		16,026
2028	4		12,811
2029 and after	—		54,418
Total lease payments	$	3,085	$	142,195
Less: Interest	(415)		(23,118)
Present value of lease liabilities	$	2,670	$	119,077


(in thousands)	United Poly		Other		Total
Fair value of consideration transferred:
Cash consideration	$	227,420	$	93,044	$	320,464
Purchase price payable	—		12,628		12,628
Working Capital Adjustment	—		668		668
Total consideration transferred	$	227,420	$	106,340	$	333,760
Fair value of assets acquired and liabilities assumed:
Cash	11,514		126		11,640
Accounts receivable	23,679		9,291		32,970
Inventories	13,455		8,111		21,566
Intangible assets	128,840		54,330		183,170
Fixed assets	13,648		8,533		22,181
Accounts payable	(11,940)		(5,086)		(17,026)
Income taxes	(15,542)		(2,075)		(17,617)
Other	(2,751)		245		(2,506)
Net assets acquired	160,903		73,475		234,378
Excess purchase price attributed to goodwill acquired	$	66,517	$	32,865	$	99,382


(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	12.0
Other	3,600		6.0
Total intangible assets	$	18,300


Change in benefit obligations:
Balance as of September 30, 2021	$	140,745
Interest cost	2,958
Actuarial loss	(36,411)
Benefits and administrative expenses paid	(6,090)
Balance as of September 30, 2022	101,202
Interest cost	5,175
Actuarial gain	(4,882)
Benefits and administrative expenses paid	(6,165)
Balance as of September 30, 2023	$	95,330

Change in plan assets:
Balance as of September 30, 2021	$	138,056
Actual return on plan assets	(28,230)
Employer contributions	188
Benefits and administrative expenses paid	(6,090)
Balance as of September 30, 2022	103,925
Actual return on plan assets	7,463
Employer contributions	220
Benefits and administrative expenses paid	(6,165)
Balance as of September 30, 2023	$	105,443

Funded status:
Funded status as of September 30, 2022	$	2,723
Funded status as of September 30, 2023	$	10,113


Asset Category:	September 30, 2023	September 30, 2022
Equity securities	—%	50%
Debt securities	54%	46%
Cash and cash equivalents	46%	4%
Total	100%	100%


(in thousands)
2024	$	6,912
2025	7,103
2026	7,263
2027	7,321
2028	7,349
2028 to 2032	36,909


	Shares (in thousands)	Weighted-Average Exercise Price		Weighted-Average Grant Date Fair Value		Aggregate Intrinsic Value (in thousands)		Weighted-Average Remaining Contractual Term (in years)
Outstanding as of September 30, 2020	1,375	$	15.66			$	11,443
Granted	72	$	29.80
Exercised	(678)	$	12.30			$	33,075
Forfeited	—	—
Outstanding as of September 30, 2021	769	$	19.95	$	10.89	$	51,441
Granted	42	$	105.94	$	49.39
Exercised	(98)	$	12.58	$	9.84	$	8,703
Forfeited	—	—
Outstanding as of September 30, 2022	713	$	26.00	$	13.29	$	38,062	5.22
Granted	51	$	101.66	$	54.06
Exercised	(74)	$	13.26	$	9.56	$	9,201
Forfeited	—	—
Outstanding as of September 30, 2023	690	$	32.93	$	16.69	$	80,152	9.75
Exercisable as of September 30, 2023	539	$	23.45			$	67,835	4.13


	Shares (in thousands)	Weighted-average grant-date fair value
Nonvested as of September 30, 2020	405	$	26.44
Granted	218	32.01
Vested	(229)	23.78
Forfeited	(10)	28.48
Nonvested as of September 30, 2021	384	30.30
Granted	100	103.94
Vested	(208)	27.40
Forfeited	(14)	49.23
Nonvested as of September 30, 2022	262	58.72
Granted	138	102.71
Vested	(144)	47.43
Forfeited	(10)	84.89
Nonvested as of September 30, 2023	246	$	86.16


(in thousands)	For the period from September 30, 2020 to September 30, 2023
Balance as of September 30, 2020	$	1,614
Additions based on tax positions related to prior years	291
Additions based on tax positions related to current year	1,658
Settlements	(230)
Balance as of September 30, 2021	3,333
Additions based on tax positions related to prior years	322
Additions based on tax positions related to current year	342
Settlements	(3,012)
Balance as of September 30, 2022	985
Reductions based on tax positions related to prior years	(75)
Additions based on tax positions related to current year	1,792
Expiration of statute of limitations	(121)
Balance as of September 30, 2023	$	2,581


Jurisdiction						Years Open to Audit
United States						2020, 2021 and 2022


(in thousands)	Defined benefit pension items		Currency translation adjustments		Total
Balance as of September 30, 2021	$	(19,318)	$	(9,408)	$	(28,726)
Other comprehensive (loss) income before reclassifications	2,051		(23,943)		(21,892)
Amounts reclassified from accumulated other comprehensive loss	472		—		472
Net current period other comprehensive (loss) income	2,523		(23,943)		(21,420)
Balance as of September 30, 2022	$	(16,795)	$	(33,351)	$	(50,146)
Other comprehensive income (loss) before reclassifications	5,493		10,212		15,705
Amounts reclassified from accumulated other comprehensive loss	501		—		501
Net current period other comprehensive income (loss)	5,994		10,212		16,206
Balance as of September 30, 2023	$	(10,801)	$	(23,139)	$	(33,940)


	Segment
(in thousands)	Electrical		Safety & Infrastructure		Total
Balance as of September 30, 2021	$	155,471	$	43,577	$	199,048

Goodwill acquired during year	87,964		9,431		97,395

Exchange rate effects	(6,727)		(386)		(7,113)
Balance as of September 30, 2022	$	236,708	$	52,622	$	289,330
Goodwill acquired during year	18,669		14		18,683
Impairment	(1,721)		—		(1,721)
Other purchase accounting adjustments	1,989		—		1,989
Exchange rate effects	2,782		43		2,825
Balance as of September 30, 2023	$	258,427	$	52,679	$	311,106