Atkore (ATKR) Q3 2024 earnings summary

Executive summary

• Q3 2024 net sales declined 10.5% year-over-year to $822.4 million, with net income down 38.7% to $123.4 million and Adjusted EBITDA down 23.7% to $206.1 million, mainly due to lower average selling prices and a soft pricing environment.

• Organic volume was flat year-over-year but up 8% sequentially and 4% YTD; pricing softness and increased steel conduit imports pressured margins.

• Share repurchases totaled $125 million in Q3 and over $280 million year-to-date; a new $500 million buyback program was authorized.

• Updated FY 2024 outlook reflects ongoing macroeconomic challenges, softer pricing, and continued import pressure, especially in steel conduit.

• The Electrical segment saw a 14.1% decline in net sales and a 31.5% drop in Adjusted EBITDA, while Safety & Infrastructure net sales rose 1.6% and Adjusted EBITDA increased 39.8%.

Financial highlights

• Net sales fell from $919.1 million in Q3 2023 to $822.4 million in Q3 2024, primarily due to a 9.5% price decline.

• Adjusted EBITDA margin decreased by 430 bps to 25.1%.

• Diluted EPS was $3.33, down 35.1% year-over-year; Adjusted Diluted EPS was $3.80, down 33.6%.

• Free cash flow for the nine months ended June 28, 2024, was $244.9 million, down from $441.2 million in the prior year period.

• Operating income dropped 27.6% year-over-year to $168.5 million.

Outlook and guidance

• Full-year 2024 adjusted EBITDA guidance lowered to $772–$782 million; adjusted net income per diluted share outlook set at $14.30–$14.52.

• Q4 2024 net sales projected at $725–$775 million; Adjusted EBITDA at $140–$150 million.

• FY 2025 initial EBITDA estimate is around $650 million, with potential upside if construction activity improves.

• Management expects continued soft demand and pricing pressure into Q4 and 2025.

• Capital expenditures for FY 2024 lowered by $25 million to $150–$175 million; stock repurchases to exceed $325 million.