• Net Sales: $662 million.
• Adjusted EBITDA: $99 million.
• Adjusted EPS: $1.63.
• Organic Volume Decline: 5% in the first quarter.
• Average Selling Prices Decline: 12% during the quarter.
• Tax Rate: 21%, up from 17.5% in the prior year.
• Share Repurchase: $50 million in the first quarter.
• Full Year 2025 Adjusted EBITDA Outlook: Approximately $400 million at the midpoint.
• Q2 Net Sales Outlook: $685 million to $715 million.
• Q2 Adjusted EBITDA Outlook: $85 million to $95 million.
• Q2 Adjusted EPS Outlook: $1.30 to $1.50.
• Full Year 2025 Adjusted EPS Outlook: $5.75 to $6.85.

• Warning! GuruFocus has detected 6 Warning Signs with RAIFY.

Release Date: February 04, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Atkore Inc (NYSE:ATKR) achieved net sales of $662 million and adjusted EBITDA of $99 million, both within their expected outlook range.
• The company repurchased $50 million in shares during the first quarter, demonstrating a commitment to returning cash to shareholders.
• Atkore Inc (NYSE:ATKR) released its fiscal year 2024 sustainability report, highlighting progress towards 2025 goals and additional environmental product declarations.
• The company is on track with growth initiatives in water and global construction services, planning for these to support product lines later in the year.
• Operational improvements were noted in key facilities, such as the Hobart, Indiana facility, contributing to better performance in the S&I segment.

Negative Points

• Organic volume declined by 5% in the first quarter, attributed to strong performance in the prior year and increased competition.
• The company faces challenges from increased foreign and domestic competition, particularly impacting the PVC Conduit and Steel Conduit businesses.
• Imports of PVC Conduit and Steel Conduit have increased, affecting market dynamics and pricing pressures.
• Adjusted EBITDA margins compressed in the electrical segment due to pricing and volume declines.
• The company revised its full-year 2025 adjusted EBITDA outlook to $375 million to $425 million, reflecting a more challenging market environment than anticipated.

Q & A Highlights

Q: Can you elaborate on the commentary that import competition is gaining momentum in PVC? What has changed with PVC imports versus the past? Also, why did Metal Conduit volume decline in Q1? A: Imports have grown over 20% year over year, although they still represent single-digit market share. This increase is primarily due to new entrants gaining customers. The decline in Metal Conduit volume is mainly due to tough year-over-year comparisons rather than new capacity or project delays.

Q: How do you view the dynamics for the rest of the year, particularly regarding PVC and Steel Conduit? A: The guidance cut is primarily due to changes in expectations for PVC and Steel Conduit. Approximately $75 million of the $100 million delta in price versus cost is attributed to PVC, with the remainder due to Steel Conduit. The market is experiencing significant pressure from new entrants and imports, particularly in PVC.

Q: Is the revision in PVC outlook entirely due to imports, or is there additional domestic capacity? A: The revision is largely due to imports, which have increased over 20% year over year. There is also some expansion from domestic producers diversifying into the electrical space, but imports are the primary factor.

Q: Can you provide more color on your cost structure and strategic asset evaluation? A: We are actively reviewing our cost structure and strategic assets. This includes closing facilities, selling production lines, and implementing headcount freezes. We are also focusing on productivity improvements and evaluating the economic return of different product lines.

Q: Why do you believe fiscal '25 will be the bottom for revenue and adjusted EBITDA? A: We expect pricing to stabilize at pre-COVID levels, which should naturally limit further declines. Additionally, our productivity initiatives and growth in global mega projects should provide upside. However, there may be some decline in early fiscal '26 due to tough comps if pricing levels out by the end of fiscal '25.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.