Atkore Inc (ATKR) Faces Headwinds: Net Sales Dip and Net Income Declines in Q1 2024
Net Sales: Decreased by 4.2% year-over-year to $798.5 million.
Net Income: Dropped by 20.2% to $138.4 million compared to the previous year.
Adjusted EBITDA: Fell by 19.1% to $213.5 million.
Adjusted Net Income Per Diluted Share: Decreased by $0.49 to $4.12.
Dividend: Atkore declares a quarterly cash dividend of $0.32 per share.
Full-Year Outlook: Adjusted net income per diluted share outlook increased to $16.50 to $17.50.
On February 1, 2024, Atkore Inc (NYSE:ATKR) released its 8-K filing, detailing the financial results for the first quarter of fiscal year 2024. The diversified industrials company, known for its electrical, mechanical, and safety infrastructure solutions, reported a decrease in net sales and net income compared to the prior year. Atkore's electrical segment, which includes key product categories such as PVC conduit, steel conduit, and PVC-coated conduit, saw a decline in sales, while the safety and infrastructure segment reported an increase.
Atkore's President and CEO, Bill Waltz, acknowledged the double-digit organic volume growth across key product areas and the company's strategic initiatives, including the start-up of a new facility in Hobart, Indiana. Despite the challenges, Atkore is raising its fiscal 2024 outlook for Adjusted EPS and has declared its first quarterly dividend, marking a significant milestone for the company.
Financial Performance Overview
The company's net sales decreased by $35.3 million or 4.2% to $798.5 million for the three months ended December 29, 2023, compared to $833.8 million for the same period in the previous year. This decline was primarily due to decreased average selling prices and the economic value of solar tax credits transferred to certain customers. Gross profit also saw a decrease, dropping by 13.1% to $290.5 million, with gross margin falling to 36.4% from 40.1% in the prior-year period.
Net income saw a significant decrease of 20.2% to $138.4 million, mainly due to lower gross profit and higher selling, general, and administrative costs, partially offset by lower income tax expense. Adjusted EBITDA followed suit with a decrease of 19.1% to $213.5 million.
Adjusted net income per diluted share decreased by $0.49 to $4.12, reflecting the lower net income. The electrical segment's net sales decreased by 7.1% due to decreased average selling prices, while the safety & infrastructure segment's net sales increased by 5.1% due to higher volumes.
Capital Allocation and Dividend Declaration
Atkore's balanced capital allocation strategy included $44 million in capital expenditures and $96 million in share repurchases during the first quarter. On January 30, 2024, the Board of Directors declared a quarterly cash dividend of $0.32 per share, payable on March 15, 2024, to stockholders of record on February 27, 2024.
Looking Forward
The company maintains its estimate for fiscal year 2024 Adjusted EBITDA to be approximately $900 million to $950 million and has increased its estimate for Adjusted net income per diluted share to be in the range of $16.50 - $17.50. Atkore's management will host a conference call to discuss the financial results and provide further insights into the company's performance and outlook.
Atkore Inc, with $3.5 billion in sales in fiscal year 2023 and a workforce of 5,600 employees, continues to focus on delivering sustainable solutions to meet the demands of electrification and digital transformation. For more detailed information about Atkore's financial performance, please visit the Investor Relations section of the company's website at https://investors.atkore.com.
Value investors and potential GuruFocus.com members interested in Atkore Inc's financial trajectory can find comprehensive analysis and data on GuruFocus.com.
Explore the complete 8-K earnings release (here) from Atkore Inc for further details.
This article first appeared on GuruFocus.
