Atkore Inc. Q4 FY2024 earnings call

• Achieved 3.5% overall volume growth and volume growth in key product categories. - Returned approximately 75% of operating cash flow to shareholders via share repurchase and quarterly dividend. - Released environmental product declarations and recognized as an employer of choice. - Product portfolio breadth helps manage exposure to end market headwinds and adds value for customers. - Expanded regional service centers in Texas and Georgia. - Focused on capital deployment, repurchasing over $380M in FY 2024. - Identified growth opportunities in water-related PVC/HDPE products and global megaprojects via construction services.

In the fourth quarter, the electrical segment had net sales of $565 million. The S&I segment's net sales increased just under 2% compared to the prior year. The electrical segment's adjusted EBITDA margins compressed due to pricing normalization in PVC products and import competition in steel conduit. The S&I segment's EBITDA dollars and margin were largely in line with the prior year but down sequentially from the third quarter.

• Anticipates low to mid-single-digit volume growth in FY 2025. - FY 2025 net sales expected in range of $2.9 billion to $3.2 billion. - Adjusted EBITDA expected between $475 million and $525 million. - Adjusted EPS expected in range of $7.80 and $8.90. - Pricing versus cost expected to be unfavorable year-over-year, with PVC conduit facing challenges from new domestic competition and steel conduit from import competition. - Potential for pricing to stabilize and improve later in the year with clarity on import allowances.

• Unanticipated material conversion and overconsumption in SNI manufacturing operations. - Pricing pressure from new domestic competitors in PVC and import competition in steel conduit. - Impact of interest rate environment on certain end markets like core electrical products.

Q: Could you frame the drivers of pricing change and input cost impacts?

A: John Deitzer mentioned extrapolation of potential degradation in PVC electrical conduit due to new entrants and softness beyond prior expectations, and steel conduit facing declines. Bill Waltz added info on new factories in the US and imports.

Q: How much of volume growth is from end markets vs internal initiatives?

A: Bill Waltz split it 50-50, expecting low to mid-single-digit market growth and internal initiatives like solar torque tubes contributing.

Q: Expectations on new PVC capacity from competition?

A: Bill Waltz said it's a high-level estimate, with potential new capacity from competitors and imports, but not a massive amount.

Q: S&I EBITDA margin and unanticipated material conversion?

A: Bill Waltz said it was a one-time event due to unanticipated zinc consumption in manufacturing, now resolved.

Q: Interest rate assumption in guidance?

A: John Deitzer said no single built-in Fed funds, but activity picking up in some markets less sensitive to rates.

Q: Hobart facility and IRA rollback?

A: Bill Waltz said Hobart was started before IRA, and solar companies are still expecting double-digit growth.

Q: Productivity opportunities?

A: Bill Waltz said expecting tens of millions in net productivity, with investments in lean productivity and preventive maintenance.

Q: Q1 guidance and seasonality/other factors?

A: Bill Waltz said Q3/Q4 are typically stronger due to construction efficiency, and John Deitzer noted Q1 2024 was a high comp, expecting ramp in back half.