ATKR - Earnings call transcript Q1 2021

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Thank you for standing by, and welcome to the Atkore International First Quarter Fiscal 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. [Operator Instructions] Please be advised this conference is being recorded. Thank you. I would now like to hand the conference over to John Deitzer, Vice President of Treasury and Investor Relations. Mr. ahead. go please Deitzer,

John Deitzer

good and I'm David CEO; Financial and Bill Johnson, today Waltz, Officer. President as morning, you, joined everyone. by Chief Thank well as

I today's comments take Such this during statements that the events may forward-looking Bill questions or actual results will our or results may release, Please factors materially. important to we to and from to after those involve actual such differ SEC projections regarding contained projections We and everyone refer risks that your call, David. filings in company. statements would uncertainties make statements. press that materially cause identify financial which our like and could forward-looking remind of or by future performance differ

discussion any EBITDA I'll in to that, With addition, means it EBITDA. reference over Bill. turn our today to adjusted In

Bill Waltz

morning, our Slide focus to John, Starting across performance and Thanks, in of thanks operational deliver teamwork, culture everybody. good Atkore continue another record businesses, to financial our quarter. and on resulting strong X,

EBITDA and our It the increased PVC our for in us volume in decade achieve or that that supply to pricing demand inorganic Rather, a conduit to very expanded past residential, the a markets. combination example, has the in saw metal national year. one support quarter, prior and position potential well markets the XX% and This becoming this margins just we performance growth market. to up favorable our the utility story quarter, of PVC is a This important to out one in and this line execution recognized results in quarter. is million enabler conduit we we the began data was the our had solid key and in the center business, adjusted we last remember on and to $XXX business product due the from constraints. over conduit to strong investments not across year. category dynamics In the from build by seeing. major the organic particular, footprint through recovery international be We As market driven better-than-expected early in of was adjusted even past leader industry strong supply is are XX% that EBITDA

addition continue to deploy capital In the we the results in quarter. exceptional to delivering business, across prudently

Specifically, we and in million repaid $XX stock. back debt $XX in bought million

City recall that in announced our also Queen October. of acquisition You'll we previously Plastics completed

Turning and year. to Slide this other X, we key events have a business recent updates few

see will each Electrical our this Infrastructure. earnings are we decision made to segments and segments our & approach. proposition rename value better reporting reflect material, two go-to-market You reorganize in now two and and as to our We segments Safety

Board and Atkore $XXX that confidence earnings ability in recently to the grow as demonstrates flows, our also stock strength generate ultimately authorization authorization. franchise. strong We new This announce million our a and long-term to cash to and pleased X-year sustainability new are repurchase very approved a underscores of our continue

our area of through doing to be health and this glad first our management. report. we're company the diversity, to of our energy which share This very initiatives an across safety, terms in inaugural can and activities on I you sustainability important and report. find the inclusion, is is to launch us showcasing that sustainability are we we want this addition, all the that In In highlight report, website,

System customer on more With that, by the David, through delivered Finally, walk EBITDA as detail. $XXX fiscal and who to million. results year Atkore ability I for said, quarter call over adjusted and our of Based Business mentality. the the the outstanding strength first QX, a our in deliver team by underpinned in the business will estimate our increasing are we turn us to I'll results, XXXX

David Johnson

Thank Bill, morning, everyone. and you, good

with As very results the first Bill quarter. in pleased the we mentioned, are

sales due X. margin consolidated EBITDA Moving of Slide XX%, increased the year. drove increased our to adjusted million, basis parts in primarily points on quarter, business. which to our to higher prices results from $XXX approximately our EBITDA to the up Adjusted Net XX% across average many prior XXX selling

Our a increased tax adjusted growth as lower XXX%, the EPS higher in rate interest than more $X.XX quarter. profit and to up our strong expense offset

customers. in overcome in sales metal and commercial costs. Turning by the metal products. and Slide growth. margins increased above Through and due conduit adjusted international conduit X. $XX grew EBIT decline outstanding XX% and service our selling our from higher on million by EBITDA profitability and products on profit Electrical largely our driven and segment improvement Net execution, volume $XX impact X. team Shifting with volume able EBITDA $XX sales segment and our the ability to to led Slide adjusted results from to to million input fully margin We to strong adjusted our to up prices, performance PVC our the operational PVC The by million due was higher

to & our input segment. costs. $X absorb year, contracted million. the and EBITDA the increased a Margins in Safety higher quickly sales Infrastructure by versus to and Net very difficult prior declined Turning adjusted pass-through X%, is business comparable but working

and no or prior new liquidity first moving ended cash in X. period were presentation. from been to restated segment our segment income. to to Slide in million million quarter the the generated $XX in cash on free cash flow We and results operating the a consolidated our $XXX quarter. with now reporting our addition, And consolidated In changes also There standpoint, have sales

at turn value continue to million by ended strengthen And that Queen the sheet balance repurchasing back as over leverage in Plastics. million our quarter X.Xx. over of to to of let take We’ve past $XX and drive journey the part on progress me allocation creation. repaying tremendous years, multi-prong the our completing end, net to acquisition commitment Bill. X To City We in million our and quarter deployed of the capital debt, we now stock to $XX made our approach ratio it a $XX

Bill Waltz

Thanks, David.

into deeper PVC to dive Turning X, a take business. our to Slide I conduit little wanted

or mentioned in I acquisition decade. the today recent our building this the network We most chain the a of throughout capacity Today, for we largest production Heritage we've usual than City quarter manufacturing with for saw United proved the we Plastics, fall. sites remarks, at our been with as with product started business this our this past Queen Plastics, original range industry. across States miles location. from As past was continue XXX we This approximately higher in acquisition the beneficial opening of the has especially optimized in and the business, of over had less XXXX supply completed demand outpace which my distribution

residential by stronger-than-expected the the in rise the demand Specifically saw for we in accelerated COVID-XX drove the majority conduit pandemic that quarter. the construction of PVC

result residential we for as conduit PVC increased a of these tailwinds, centers. to increased data demand saw addition In construction

is So in what winter far, typically for PVC the season. the see and conduit demand higher is than QX, in we this continuing

constrained We're As with know, across many supply work industries, is increased best today. we with the a meet may hard produce can struggle to as is you supply facing this chain for demand industry. products everyone manufacturers to tight challenges continuing as to

higher with production focusing did and the this very imbalance at products lead a price. needed we most. selling times And customers our of competitive the on by QX, address so During we

been despite will our conduit providing in reflection a in the Our and the System ability Atkore challenge times at is will a to growth and has This meet value supply forward, us. PVC recent customer tight to lead rising demand and differentiator Atkore for competitive of the direct remain Business constricted work. continue industry prioritizing supply going service.

Turning we adjusted approximately now We sales tremendous are million $XXX range be net from Based these EBITDA $XXX up to market sales, increasing XX%. to our to estimate. entire to EBITDA $XXX adjusted team, our in of for outlook Page on prior our net to and up outlook XX XX% and our adjusted the million and versus dynamics the EPS. execution our XXXX. for be expect our million, And

$X.XX. benefits quarter updated our grow conduit move half up reflects the the In price we've as back of addition, year. expectation added this adjusted $X.XX business portion that a EPS outlook in we our that to these PVC and into value This normalize our expect will service significant experienced we to to

updating for fiscal our expectations XXXX on guidance, XXXX. addition year fiscal to year are In we our perspective initial also some providing

million. exceptional As be you on XXXX believe provide we know, practice to are performance typical what fiscal additional fiscal that given and today, is expect we the to not Based it needed out. years and our approximately year. we seeing adjusted the $XXX current that EBITDA trends guidance demand But year is unusual know we supply color in X

in to is is update great in we While recurring anticipate This to context the vary they this come fiscal earnings this models a we coming line make fiscal historic perspective compared when hope in line growth our while a update, XXXX. plan we year changes or it is rates double-digit And from to the in achieving with what conditions. this we future don't to due market year back to operator to Atkore. insight as and today's may is XXXX, turn best for of investment had call. assumptions their questions. believe it financial for the that, yet community the analysis helpful up open for but truly out first We With we'll quarter, the down

Operator

Instructions] Credit with [Operator Walsh John Suisse.

line open. Your is

John Walsh

Hi. Good everyone. morning,

Bill Waltz

John. morning, Good

David Johnson

John. morning, Good

John Walsh

the Wanted to understand little in bit constraints industry quarter. a performance the Great better. Hi. supply

the being to the picked to little have just But there where I inventory because half on So on like kind and think part what guess, talk a about of of Did you just any are a know PV with levers have better of the of maybe than competitor incremental kind just normalizes to your it expected. something seem production might want higher trying share? side? I issues going seems prepared you that remarks, was in that channel demand I'm normalization? bit up back understand

John Deitzer

event David we've Yes. XX% in John, of there. is specific address. Bill conduit add things. questions Couple PVC residential. set and I'll the No one as can to tied of past phenomenal obviously explained plus that color.

as So even within maybe and depends everybody single high product growth up digits, forecasting. knows Atkore on that what who's XX% market

what's a exceptionally called COVID of midst the to to digits of impacts XX% inventory just and forth. produce Two, just then I ties it's it any -- strong to and ability markets. So COVID. perception in the growth don't and single competitors high our from of think And just so had

some think our -- unemployment shifts, quite in, contract the struggled, I'm was only to there's when But I industry but workers went tracing get have are the focus, advertised products, we've like that without of about reasonable. hit productivity. you ran on, we had where industry down year-ago, when full overcome our facility by speaking even When not trying ran facility went So the have benefits workers we honestly demand Atkore high frankly, run a a Pendleton X/XX flood facility was down you staffed the facility. increased going to three we COVID, absenteeism, with a

As focus game items. I mentioned, we plan, had prepared a our in on that A we only remarks,

So we item, We lead over to reduce times the another with appreciated just industry candid from the to our coast coast switch that. other and change to times, that. were one

John Walsh

Can just product emphasis right. on maybe mean, you're talk lot conduit? parts products but follow-up. the metal side, All a PVC on the about different the of well? how portfolio? Thank some of the as pricing about little across of other maybe a seeing And bit you. the And maybe then, I a you

Bill Waltz

even I conduit in for beginning call good. think -- mean, out, you I metal my all referenced. of example, we just that's Yes, did my remarks, why prepared very

bit -- lag to of results, slip, has, good rest excuse have without the would as a this well, Safety have PVC, even me a you the a Freudian continue for & So time that index. perform a we always little where explained place PVC isn't This extraordinary. well. our story, in Mechanical, quarter still or we've contract businesses was because Infrastructure, more

basically year expect could But to than or So had to better strength, the I is everything a from comps running planned. there, ago. regain say, plan strong we and we

John Walsh

for again Thanks the Great. We'll pass baton. color. all the

Bill Waltz

thank Yes, John. you,

Operator

Capital Markets. RBC with Dray Deane

Your line is open.

Deane Dray

congrats Thanks. I'll on morning, a quarter. strong add Good my everyone.

Bill Waltz

Thank you.

David Johnson

Thanks, Deane.

Deane Dray

-- Just in unmet of to of questions quarter? supply? on terms Was some any you demand demand have on did broaden that that pass here. spike Did business the out just the you the couldn't supply you there anything in

Bill Waltz

Atkore, is passed I what would candid our did our we we say, lead was a know on if it don't conversations, week. supply, with kept do to let's I frank but values differently. we times

So if hit and we're in other wants take order, words, to not somebody the an then commitment. going a not order,

may through our switch want want the we getting and others this ratio, accurate. to orders. high they're sure because and weeks say/do precious and Deane backlog, get maybe cancelling the to customers sure X did been would If commodity take That's than all go? even that you the went orders anybody. quantity, we or competitors. order frustrations. what to going a leverage to or those customers us did continue implicit whereas -- or to price So later, you it you I'm why in it better have That's in delivering want of we've week, not if here's not we're take competitors our go, But deliver to in went to week price, here's this

David Johnson

more on customers X much for construction in X conduit timing most can of sites. is they're or you PVC out important being construction to a on and count X the building as imagine, as timing delivery to delay week project Again, week is obviously waiting general a able their

Deane Dray

Was anything the cost That's Let's on raw resin material say, … there helpful. real side?

Bill Waltz

No.

Deane Dray

… you so. in didn't the mention it quarter,

Bill Waltz

force went Yes. and force two think rest through whereas even we we way in because resin two ones the to Coast, hurricanes majeure. previous the in No, industry probably forget the work managed that four suppliers primary that personally well past the are continue and brought on perform didn't or up hit have quarters we ourselves much but suppliers calls, how detail We honestly, headwind. our majeure. of we through the Golf I I like like back the I'm it through August to when -- forget when going and

So long no. winded answer to

growing at we the continue Just to look digits, the when single and from lead digits, saying, high maybe this question start to John are Deane hey, I'll markets you double any earlier, pricing. industry pricing, order, take

your our do. weeks A a good should to continue knew as actually We backlog items. stepped always times competitor, our and that's And products without team the X reengineered industry or of I and and not up like having the serve on we lead well. of could The for just X candor they and focused

Deane Dray

then if in get that see Can expecting demand. what for And -- half, you tougher, to normalized you're a been look frame a looks Good. you've clear down and we comps like? normalized level us the ramp to second

Bill Waltz

mean, Yes, first quarter, numbers. million how David I'll in to on companies just wants making $XXX add where start many target and then per Again, million. color thought raise the a I $XXX

next to framework, question, because or I $XXX use, whatever Deane, in compounded plus from year a we putting a growth $XXX some still your So wrapping well we're have it's yours, performing phenomenal year well. I’m to where still get and we're just of think wanted going great level above estimate XX% that's should word million, million, exceptionally guidance. into it's anybody's I

to of behind where we're this there's into we the quarter I go how and to to Now and million. those of we're $XXX know therefore things David, any slam QX, the To and quarter all $XXX and some second numbers don't it's for much going think the like and into what million balance half, if estimate normalize demand will the grand a color. balance, giving supply get

David Johnson

if EBITDA Really, guide, and second look you of XX% and look up full minus half Deane, at our we're kind the back first year. our you the even of for almost QX year quarter at our actual the still half

forecasting time, sure us, we're we of as have this again, directly But what we'll in the front see performance. unfolds. solid a I'm information still it's So point year more in and

Bill Waltz

quarter everybody Deane, where point it QX, And park brought hit we the even to of as in you recalls, last the then, then. up out in again

ago, year ago. comment on these comps your are good a a of minute to So

just be customers X,XXX around employees, the they're So choice. it's first a of in to unison working team

Deane Dray

free then take some light please. first pressures. working but for for I up And inventory that, the demand last we and versus it. of conversion question through typically capital what David, Got me just just on was there flow quarter imagine in the kind build, given But cash came and would us is, see

David Johnson

Exactly.

capital steel up, flow are you commodities a had look two we have pretty to Deane. like our Obviously, things if elements at you. that cash increase. significant So what statement, and There's working

obviously, you but flat, pricing inventory. our in in see But dollars, the So bit days quite balance flowing through receivable a that our will your up again, because are they're sheet. of

QX cash really at guidance that little are strong soft when of we you. total, year net we a our in the income, look a late flow with feel tax So what give. bit slightly that full and always for this above we is typical have us payments payments our But because that quarter. and around or XXX% elements quarter certain rebate you

Deane Dray

really Thank you. That's helpful.

Bill Waltz

Thanks, Deane.

Operator

Andy Kaplowitz with Citigroup.

is line open. Your

Andy Kaplowitz

guys. morning good Hey,

Bill Waltz

Good morning, Andy.

David Johnson

Good morning.

Andy Kaplowitz

So obviously the in quarter. pricing strong

did I about. declines, despite Your know volume we've which business have pricing the Electrical strong talked

regarding have you what markets point? seeing of that you've How the if decisions? talking of maybe color you're non-res selling selective your been volume been much core the more give decline with what this So can in your just at you're in about might kind quarter

Bill Waltz

think probably, I markets. around Andy, it's

be So for up are expecting low single fiscal digits to year. we the

quarter for the we're of is itself, pickup these it's in just the -- some So and growth. lag, some also I it numbers, both expecting think volume

mean, a orders. We selective in being charge are premium. I we

focus single products. markets. of expected categories on above So the like our growth digit, for in focus low with some name that They we says, so the -- up taking were place these, we've we're to those mid share products our our as

[indiscernible] The into the there weeds I'm other in the getting days but here, two less thing were calendar.

typical or remaining over out work days quarter you a So days in our something. that of XX

single nuances, a there's but digits. down markets low couple So

strong. like that to centers I the in are the residential single-digit markets continued data will things themselves half. second low be to growth think and improve And

Andy Kaplowitz

think you business forward? Safety mentioned Helpful. steel pricing. and give reflecting of to margins about higher color & some a And you point moving within you can more the Obviously, would a us lag normalized to second your to that to more you catch how EBITDA of then, costs in teens? the could expect half let's see the steel, in And mid But up say, say, at year? Infrastructure let's margin,

David Johnson

type said you think range. the kick probably the of pick I you. QX, of year to to the be in expect that Yes, And have a XX% indexes would we typical expect the going when is what all pricing around we half, half well, QX up Andy. that more back somewhere XX%, in second flat, be the

Andy Kaplowitz

guide. you a And the guys it. as to it. answering and Got fiscal 'XX talk about unusual, out you about little know did previous It's talk some questions, in come now

assumptions other markets, any point? So that that, anything give on at that thinking acquisitions, whether it's you're about this us like perspective

Bill Waltz

the out growth we million, compounded $XXX to had in do on million XX% then whether anybody million around applying didn't to my running want again, not great forward, really vanilla of Andy. sell have companies gave EBITDA going any into side, And that nothing cured, $XXX there, side, hold many any for And that. of a is to shareholder COVID again, diving statements was go. Yes, this of there question, grabbing top. in But, performed continue our beyond just The as $XXX here plus some number COVID moment. reiterate -- think have we pandemic kind in out of from straight cured, no, that a there's Atkore earlier not I'll go to this What how business, I is trend. middle well, buy so we've and reason we details acquisitions.

there's transparency, there guiding giving you the values, this in just is out And you a But the of unusual everybody ground even for an specific here literally out are to year pretty assumptions other risk we're a some something our companies quarter. there. market mentioned literally There's thought aren't just for than we situation. there's what with. nothing that Andy estimate our So knowing and, in lots

Andy Kaplowitz

Appreciate it, guys.

Bill Waltz

Thank you, Andy.

David Johnson

Thank you.

Operator

call turn I'll the closing Waltz for to back Bill now over comments.

Bill Waltz

me Thank takeaways conclude, from you. today's summarize discussion. Hey, let key before we three

they as were and our get everybody the most. need by operational a result globe, prioritize First, products our our of the across strong the focus them customers this ability outstanding in quarter on results team this to delivered and

being As our customers in first I mission all our statement, choice. described about it's

capital and of balance thing most we our grow deploy Second, effectively important we're to business, our expectations about to excited our strengthen to the closing, in continue Atkore, probably future our return the for and cash third stockholders. it's growth. sheet And

for call our forward quarterly we So look you with you to for support in concludes thank during speaking and that, the everyone. your call. interest with This and next today. Thanks, Atkore

Operator

for This concludes thank call. today's your We you participation.

You may now disconnect.

Atkore (ATKR) 2 Feb 212021 Q1 Earnings call transcript