Atkore Inc 10-Q for FY2022 Q1

Atkore Inc. (ATKR)

10-Q 2022-01-31 For: 2021-12-24

Added on April 08, 2026

About this 10-Q

Atkore Inc filed this 10-Q on January 31, 2022, covering the quarter ended December 24, 2021 (FY2022 Q1).

Headline figures

Quarter ended December 24, 2021, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $840.8M; up 64.5% from $511.08M a year earlier
Net income: $204.84M; up 140.8% from net income of $85.07M a year earlier
Diluted EPS: $4.32; up 146.9% from $1.75 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			7
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			19
Item 3. Quantitative and Qualitative Disclosures about Market Risk			25
Item 4. Controls and Procedures			25

PART II. OTHER INFORMATION
Item 1. Legal Proceedings			27
Item 1A. Risk Factors			27
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			27
Item 3. Defaults Upon Senior Securities			27
Item 4. Mine Safety Disclosures			27
Item 5. Other Information			27
Item 6. Exhibits			28
Signatures			29


		Three months ended
(in thousands, except per share data)	Note	December 24, 2021		December 25, 2020
Net sales		$	840,801	$	511,082
Cost of sales		485,993		321,891
Gross profit		354,808		189,191
Selling, general and administrative		78,151		61,078
Intangible asset amortization	11	8,229		8,260
Operating income		268,428		119,853
Interest expense, net		6,918		8,254

Other income, net	5	(308)		(431)
Income before income taxes		261,818		112,030
Income tax expense	6	56,975		26,964
Net income		$	204,843	$	85,066

Net income per share
Basic	7	$	4.38	$	1.78
Diluted	7	$	4.32	$	1.75


		Three months ended
(in thousands)	Note	December 24, 2021		December 25, 2020
Net income		$	204,843	$	85,066
Other comprehensive (loss) income, net of tax:
Change in foreign currency translation adjustment		(1,458)		7,051
Change in unrecognized loss related to pension benefit plans	4	125		262
Total other comprehensive (loss) income	8	(1,333)		7,313
Comprehensive income		$	203,510	$	92,379


☒			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	December 24, 2021		September 30, 2021
Assets
Current Assets:
Cash and cash equivalents		$	498,959	$	576,289
Accounts receivable, less allowance for current and expected credit losses of $2,847 and $2,510, respectively		541,685		524,926
Inventories, net	9	362,099		285,989
Prepaid expenses and other current assets		45,906		34,248
Total current assets		1,448,649		1,421,452
Property, plant and equipment, net	10	276,858		275,622
Intangible assets, net	11	251,375		241,204
Goodwill	11	211,928		199,048
Right-of-use assets, net		40,884		41,113
Deferred tax assets	6	35,045		29,693
Other long-term assets		2,554		1,967
Total Assets		$	2,267,293	$	2,210,099
Liabilities and Equity
Current Liabilities:

Accounts payable		233,921		243,164
Income tax payable		74,508		72,953
Accrued compensation and employee benefits		29,805		57,437
Customer liabilities		98,563		80,324
Lease obligations		11,652		11,785
Other current liabilities		51,570		59,273
Total current liabilities		500,019		524,936
Long-term debt	12	758,924		758,386
Long-term lease obligations		30,076		30,236
Deferred tax liabilities	6	18,141		16,746

Pension liabilities		3,168		3,819
Other long-term liabilities		14,344		11,240
Total Liabilities		1,324,672		1,345,363
Equity:
Common stock, $0.01 par value, 1,000,000,000 shares authorized, 45,394,463 and 45,997,159 shares issued and outstanding, respectively		455		461
Treasury stock, held at cost, 290,600 and 290,600 shares, respectively		(2,580)		(2,580)
Additional paid-in capital		485,839		506,921
Retained earnings		488,966		388,660
Accumulated other comprehensive loss	8	(30,059)		(28,726)
Total Equity		942,621		864,736
Total Liabilities and Equity		$	2,267,293	$	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


(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 September 30, 2021	$	(19,318)	$	(9,408)	$	(28,726)
Other comprehensive loss before reclassifications	—		(1,458)		(1,458)
Amounts reclassified from accumulated other comprehensive income, net of tax	125		—		125
Net current period other comprehensive (loss) income	125		(1,458)		(1,333)

Balance as of December 24, 2021	$	(19,193)	$	(10,866)	$	(30,059)


(in thousands)	Electrical		Safety & Infrastructure		Total
Balance as of September 30, 2021	$	155,471	$	43,577	$	199,048
Goodwill acquired during year	7,138		6,033		13,171
Exchange rate effects	(325)		34		(291)
Balance as of December 24, 2021	$	162,284	$	49,644	$	211,928


(in thousands)
Remaining 2022	$	30,399
2023	37,191
2024	31,548
2025	17,575
2026	15,810
2027	13,261
Thereafter	12,711


	% Change
Volume	(9.9)	%
Average selling prices	72.0	%
Foreign exchange	0.2	%
Acquisitions	2.1	%
Other	0.1	%
Net sales	64.5	%


(in thousands)	December 24, 2021		September 30, 2021
Land	$	22,965	$	23,043
Buildings and related improvements	136,860		136,680
Machinery and equipment	379,146		372,503
Leasehold improvements	9,835		9,720
Software	28,317		28,288
Construction in progress	48,447		43,055
Property, plant and equipment, at cost	625,570		613,289
Accumulated depreciation	(348,712)		(337,667)
Property, plant and equipment, net	$	276,858	$	275,622


		December 24, 2021						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	$	(243,020)	$	144,606	$	371,048	$	(234,946)	$	136,102
Other	7	25,339		(11,450)		13,889		23,633		(11,411)		12,222
Total		412,965		(254,470)		158,495		394,681		(246,357)		148,324
Indefinite-lived intangible assets:
Trade names		92,880		—		92,880		92,880		—		92,880
Total		$	505,845	$	(254,470)	$	251,375	$	487,561	$	(246,357)	$	241,204


	December 24, 2021				September 30, 2021
(in thousands)	Carrying Value		Fair Value		Carrying Value		Fair Value

Senior Secured Term Loan Facility due May 26, 2028	$	373,000	$	371,601	$	373,000	$	371,486
Senior Notes due June 2031	$	400,000	$	410,864	$	400,000	$	415,828
Total Debt	$	773,000	$	782,465	$	773,000	$	787,314


	Three months ended
(in thousands)	December 24, 2021		December 25, 2020
Operating segment Adjusted EBITDA
Electrical	$	279,547	$	133,273
Safety & Infrastructure	27,432		14,252
Total	$	306,979	$	147,525
Unallocated expenses (a)	(13,969)		(10,535)
Depreciation and amortization	(20,046)		(19,044)
Interest expense, net	(6,918)		(8,254)



Stock-based compensation	(3,427)		(5,522)
Other (b)	(801)		7,860
Income before income taxes	$	261,818	$	112,030

(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	(10.5)	%
Average input costs	53.5	%
Foreign exchange	0.2	%
Acquisitions	1.8	%
Other	6.0	%
Cost of sales	51.0	%


	% Change
Volume	(6.0)	%
Average selling prices	68.6	%
Foreign exchange	0.3	%
Acquisitions	2.8	%

Net sales	65.7	%


	% Change
Volume	(22.0)	%
Average selling prices	81.9	%
Acquisitions	0.1	%
Other	0.7	%
Net sales	60.7	%


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
October 1, 2021 to October 22, 2021	—	$	—	—	$	—
October 23, 2021 to November 26, 2021	—	$	—	—	$	—
November 27, 2021 to December 24, 2021	958	$	109.14	958	$	295,489
Total	958			958


			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:	January 31, 2022	By:	/s/ David P. Johnson
			Vice President and Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)


Dated:	January 31, 2022	/s/ William E. Waltz
		William E. Waltz
		President and Chief Executive Officer (Principal Executive Officer)