Atkore Inc. ("Company" or "Atkore") (NYSE: ATKR) announced earnings for the full year and the fourth quarter ("Q4") of fiscal year 2021 ending September 30, 2021.
Atkore President and CEO Bill Waltz said: “Due to our leading position in the field of PVC wire and tubing and stable sales recovery, Atkore achieved outstanding earnings in the fourth quarter and throughout the 2021 fiscal year. "Our MC GlideTM product received a US patent in the fourth quarter. Because of its ability to speed up construction time and reduce overall costs-these are two obvious advantages in today's environment, it continues to be welcomed by customers. We remain focused on Our execution of the Atkore business system has allowed us to generate approximately US$573 million in cash from operations this year, strengthen our balance sheet, return US$135 million in cash to shareholders through share repurchases, and acquire three companies, which will Strengthen and improve our position in this field in the next few years of the market."
Waltz continued, “As we enter the 2022 fiscal year, we will continue to invest in our business to drive value, focusing on our three key growth channels: advancing new product innovation, such as MC Glide, and improving the intersection of our focused products. Sales opportunities and strategic participation in our M&A pipeline to strengthen our investment portfolio. Through these efforts, and supported by the megatrends of electrification and digitalization, we hope to generate considerable cash flow from operating activities and deploy more than 1 billion U.S. dollar cash will drive value creation in the next few years. We have increased our capital expenditure forecast for fiscal year 2022 to approximately US$80 to US$90 million. We are pleased to announce the implementation of a new stock repurchase program of US$400 million in the next two years. At Atkore, we are working hard to create a stronger business for the future for the benefit of our employees, customers, shareholders and communities."
The company reported that its net income, adjusted EBITDA, diluted earnings per share and adjusted earnings per share for the fourth quarter and full year of fiscal 2021 achieved triple-digit year-on-year growth.
Net sales in the fourth quarter of 2021 increased to US$923.7 million, an increase of 93.5% from US$477.4 million in the same period last year. This was mainly due to an average selling price of US$391.3 million and an increase in sales of US$24.8 million. And security and infrastructure. In addition, entities acquired in fiscal 2021, including Queen City Plastics and FRE Composites Group, added $27.8 million to net sales.
In the fourth quarter of 2021, gross profit increased by 210.2 million U.S. dollars to 357.3 million U.S. dollars, compared with 147.1 million U.S. dollars in the same period last year. Due to an increase in average selling prices of US$391.3 million, gross profit margin increased from 30.8% in the same period last year to 38.7% in the fourth quarter of fiscal 2021, partially offset by higher input costs of US$183.5 million in steel, copper and PVC resin.
Sales, general and administrative expenses in the fourth quarter of 2021 increased by 28 million U.S. dollars, or 51.1%, to 82.8 million U.S. dollars, compared with 54.8 million U.S. dollars in the same period last year. The main reasons for the increase were $9.7 million in commissions, $8.4 million in variable compensation, an increase of $8.7 million in general expenses for business improvement plans, and $2.4 million in the acquisition of Queen City Plastics and FRE Composites Group, partially offset by the proceeds of the sale of assets of 3.8 million Dollar.
Net income in the fourth quarter of 2021 increased by US$148.3 million to US$202.6 million, compared with US$54.2 million in the same period last year, due to an increase of US$181.7 million in operating income. Adjusted net income increased by 148.5 million U.S. dollars to 205.1 million U.S. dollars, compared with 56.5 million U.S. dollars in the same period last year.
In the fourth quarter of 2021, adjusted EBITDA increased by US$194.7 million, or 198.3%, to US$292.9 million, compared with US$98.2 million in the same period last year. The net profit margin increased from 11.4% in the same period last year to 21.9%, and the adjusted EBITDA margin increased from 20.6% to 31.7%, an increase of 1,110 basis points.
In the fourth quarter of 2021, diluted net income per share was US$4.26, an increase of US$3.15 over the same period last year. Adjusted diluted net income per share for the fourth quarter of 2021 was US$4.39 per share, compared to US$1.18 in the same period last year.
In the fourth quarter of 2021, net electrical sales increased by US$346.9 million, or 98.9%, to US$697.5 million, compared with US$350.6 million in the same period last year. The increase in net sales was mainly due to an increase in average selling price of US$304.1 million, which was mainly driven by the plastic pipe and conduit category, metal electrical conduit and fittings product category, and the increase in net sales by US$27.6 million and FRE from the acquisition of Queen City Plastics Composite Materials Group. Over time, the pricing of PVC products and other businesses is expected to return to more normal historical levels, but time is uncertain. In addition, due to increased sales in all product categories, sales increased by $11.3 million.
In the fourth quarter of 2021, adjusted EBITDA increased by US$192.0 million, or 208.9%, to US$283.9 million, compared with US$91.9 million in the same period last year. The adjusted EBITDA margin increased from 26.2% to 40.7%. The increase in adjusted EBITDA and adjusted EBITDA margins was mainly due to the increase in average selling prices related to input costs, operating efficiency, and contributions from the acquisition of Queen City Plastics and FRE Composites Group.
Security and infrastructure net sales increased by US$99.9 million, or 78.3%, to US$227.4 million in the fourth quarter of 2021, compared with US$127.5 million in the same period last year. The increase was due to an increase in average selling price of US$87.1 million, which was due to the increase in steel input costs and the increase in sales of US$13.5 million, mainly driven by the increase in all product categories.
Adjusted EBITDA for the fourth quarter of 2021 increased by US$12 million, or 70.1%, to US$29 million, compared with US$17.1 million in the same period last year. The adjusted EBITDA margin dropped from 13.4% to 12.8%. The adjusted EBITDA growth was mainly due to the increase in average selling prices, and the lagging pricing put downward pressure on EBITDA margins.
Net sales in fiscal 2021 increased by US$1.1626 billion to US$2.928 billion, an increase of 65.9%, while net sales in fiscal 2020 were US$1.7654 billion. The increase in net sales was mainly attributable to an increase in average selling price of US$977.9 million, which was mainly driven by plastic pipes. Due to the acquisition of Queen City Plastics and FRE Composites Group, the electrical division and the catheter category increased net sales of US$79.1 million. Forehead. Over time, the pricing of PVC products and other businesses is expected to return to more normal historical levels, but time is uncertain. The increase in net sales was also driven by an increase in sales of US$88.4 million in most product categories in the electrical and safety and infrastructure sectors.
The gross profit for the 2021 fiscal year increased by US$634.3 million to US$1,125.6 million, an increase of 129.1% from the US$491.3 million in the 2020 fiscal year. Due to the higher average selling price of 979, the gross profit margin in fiscal year 2021 increased to 38.4%, while the gross profit margin in fiscal year 2020 was 27.8%. Millions of dollars, partly offset by the higher input cost of steel, copper and PVC resin of 386.5 million dollars.
Compared with the $219.5 million in fiscal year 2020, sales, general and administrative expenses in fiscal year 2021 increased by $73.5 million, or 33.5%, to $293 million. The main reason for the increase was that variable compensation increased by USD 24.1 million and sales commission expenses increased by USD 22.4 million. The general expenses of the US$10.8 million business improvement program, the US$5.4 million acquisition of Queenstown Plastics and FRE Composites Group, and the US$3.5 million higher stock compensation expense were partially offset by the US$4.1 million productivity efficiency.
Net income for fiscal year 2021 increased by USD 435.6 million to USD 587.9 million, while net income for fiscal year 2020 was USD 152.3 million. Adjusted net income for the 2021 fiscal year increased by US$432.6 million to US$614.0 million, while the net income for the 2020 fiscal year was US$181.5 million. The increase in both net income and adjusted net income was mainly due to an increase in operating income of US$559.4 million.
Adjusted EBITDA increased by US$570.9 million, or 174.8%, to US$897.5 million in fiscal year 2021, and US$326.6 million in fiscal year 2020. This increase was mainly due to the increase in operating income.
The GAAP-calculated net income per diluted share for the 2021 fiscal year was US$12.19, an increase of US$9.09 over the 2020 fiscal year. Adjusted net income per diluted share for the 2021 fiscal year was US$12.98, compared to US$3.78 for the 2020 fiscal year.
In fiscal 2021, operating activities provided $572.9 million in cash, compared to $248.8 million in fiscal 2020. Free cash flow increased from US$215 million in fiscal year 2020 to US$508.4 million in fiscal year 2021. The increased cash flow provided by operating activities and free cash mainly comes from operating income.
During the year ended September 30, 2021, the company used $400 million in senior notes and $400 million in new debt under the new senior secured term loan facility to refinance its previous debt under the first lien term loan facility . In the fourth quarter of fiscal 2021, the company voluntarily repaid a new senior secured term loan facility of US$26 million in advance. The repayment of the principal in the fourth quarter, coupled with the decrease in the balance after the refinancing transaction and the increase in cash on hand and adjusted EBITDA resulted in a reduction in the net debt leverage ratio from 1.6 as of September to 0.2 as of September 30, 2021 2020 Year 30.
The company expects adjusted EBITDA in the first quarter of fiscal year 2022 to be between 23 and 250 million U.S. dollars, and adjusted net income per diluted share will be between 3.30 and 3.60 U.S. dollars.
The company expects that the adjusted EBITDA for fiscal year 2022 will be in the range of US$65-700 million, and the adjusted net income per diluted share will be in the range of US$9.20-10.00.
The company points out that the prospects provided may vary due to changes in assumptions or market conditions and other factors described in "forward-looking statements."
Atkore management will hold a conference call today (November 18, 2021) at 8 am Eastern Time to discuss the company's financial performance. The conference call can be accessed by dialing (833) 968-2233 (domestic) or (825) 312-2056 (international). The call will be replayed before December 9, 2021. You can dial (800) 585-8367 or international call (416) 621-4642 to access the replay. The password for real-time call and replay is 6898317.
Interested investors and other parties can also log on to the investor relations section of the company's website http://investors.atkore.com to listen to the webcast of the conference call. After the call is over, the online replay will be immediately available on the same website.
To learn more about the company, please visit the company's website http://investors.atkore.com.
Atkore is building a better future for our employees, customers, suppliers, shareholders, and communities—a future focused on serving customers, powering and protecting the world. With a global network of manufacturing and distribution facilities, Atkore is a leading supplier of electrical, safety and infrastructure solutions. For more information, please visit www.atkore.com.
This press release contains "forward-looking statements" within the meaning of the Federal Private Securities Litigation Reform Act of 1995. Forward-looking statements include, but are not limited to, statements related to financial prospects. Certain forward-looking statements can be identified through the use of forward-looking terms such as "believes", "expects", "may", "will", "should", "should", "will", and "may". , "Seek", "Goal", "Project", "Optimistic", "Intention", "Plan", "Estimate", "Expect" or other similar terms. Forward-looking statements include, but are not limited to, all matters that are not historical facts. Forward-looking statements are subject to known and unknown risks and uncertainties, many of which may be beyond our control. We remind you that forward-looking statements cannot guarantee future performance or results. Actual performance and results, including but not limited to our actual operating performance, financial condition and liquidity, and the development of the market in which we operate, may differ from those in this press release. There are material differences in the content of the forward-looking statements that are made or suggested. In addition, even if our operating results, financial condition and cash flow, and developments in the markets in which we operate are consistent with the forward-looking statements contained in this press release, these results or developments may not represent the results or developments in subsequent periods.
Many important factors, including but not limited to the risks and uncertainties discussed or cited under the heading "Risk Factors" in our Annual Report on Form 10-K that we filed with the Securities and Exchange Commission ("SEC") in November January 2021 The 18th may cause actual results and results to differ materially from those reflected in forward-looking statements. Other factors that may cause actual results and results to differ from those reflected in the forward-looking statements include, but are not limited to: decline and uncertainty in general business and economic conditions in the United States and the international markets in which we operate; weakness or uncertainty in the U.S. non-residential construction industry Downturn again; widespread disease outbreaks, such as the novel coronavirus (COVID-19) pandemic; changes in raw material prices; pricing pressure, reduced profitability or loss of market share due to fierce competition; third-party freight companies and energy availability Cost; a large number of imports of products similar to those we manufacture; changes in federal, state, local, and international government regulations and trade policies; adverse weather conditions; increased costs related to future capital and operating expenditures to maintain compliance with the environment and health And security laws; reduced expenditures, deterioration in financial conditions or other unfavorable developments related to one or more of our top customers, including the inability or unwillingness to pay our invoices on time; our working capital requirements increase, which will be based on economic activity The market price of our main raw materials fluctuates sharply, includingdue to the failure to collect or delay in collecting cash for the sale of manufactured products; due to disputes under existing collective bargaining agreements with labor unions or negotiations with new collective bargaining agreements, supplier finance Difficulties or other reasons cause the shutdown of our factory or other production interruptions; changes in financial obligations related to the pension plan that we maintain in the United States; production or distribution capabilities due to the interruption of the operation of our facilities or the facilities of our major suppliers Decline; the loss of a large number of third-party agents or distributors, or a huge deviation from the sales they generate; our information system is subject to security threats, attacks or other interruptions, or failure to comply with complex network security, data privacy and other Legal obligations or failure to protect sensitive information; due to future trigger events (such as our cash flow forecast or customer demand decline and changes in our business and valuation assumptions) may lead to impairment of goodwill or other long-term assets; and our products Safety and labor risks related to manufacturing and testing; product liability, structural defects and warranty claims and litigation related to our various products, as well as government inquiries and investigations, as well as consumer, employment, tort and other legal actions; we protect us The intellectual property rights and other important ownership capabilities; the risks inherent in conducting international business; changes in foreign laws and legal systems, including the consequences of Brexit; we cannot effectively launch new products or implement our innovation strategy; we cannot continue Imported raw materials, components and/or finished products; liabilities related to acquisitions, joint ventures or divestitures and the issuance of additional debt or equity, and the compensation clauses in our acquisition agreements did not adequately protect us from unexpected liabilities; unsuccessful Manage acquisitions, including identifying, evaluating and evaluating acquisition targets and integrating acquired companies, businesses or assets; regulations related to "conflict minerals" lead to additional costs, the increase in complexity of our supply chain, and our reputation among customers Possible damage; interruption or obstacle to receiving sufficient raw materials due to various anti-terrorism safety measures; we Restrictions contained in the debt agreement; failure to generate enough cash to pay the principal, interest or other dues of our debt; the challenge of attracting and retaining key personnel or high-quality employees; future changes in tax legislation; failure Generate sufficient cash flow from operating activities or fail to raise sufficient funds in the capital market to fulfill existing obligations and support our business development; and other factors described from time to time in the documents we submit to the SEC. The company does not undertake the obligation to update the information contained herein, which is only effective from the date of publication of this agreement.
This press release contains certain financial information and is not prepared in accordance with GAAP. Because not all companies calculate non-GAAP financial information in the same way (or exactly the same), the description here may not be comparable to other similarly titled measures used by other companies. In addition, these measures should not be considered as a substitute for performance measures based on GAAP. Please refer to the non-GAAP reconciliations below in this press release for the reconciliation of these measures to the most directly comparable GAAP financial measures.
Adjusted EBITDA and adjusted EBITDA margin
We use adjusted EBITDA and adjusted EBITDA margin to evaluate our business performance, prepare our annual operating budget, and serve as an indicator of business performance and profitability. We believe that adjusted EBITDA and adjusted EBITDA margins allow us to easily view operating trends, analyze and compare, and determine strategies to improve operating performance.
We define adjusted EBITDA as net income (loss). After adjustment, it does not include income tax expense, depreciation and amortization, interest expense, net amount, debt settlement losses, restructuring expenses, stock-based compensation, certain legal affairs, transaction costs , Proceeds from the purchase and sale of enterprises and other items, such as inventory reserves and adjustments, real property, plant and equipment disposal losses, insurance compensation related to damage to real property, plant and equipment, exemption of uncertain tax status for compensation , And the real or unrealized gains (losses) of the foreign currency impact of inter-company loans and related forward currency derivatives. We define adjusted EBITDA margin as the percentage of adjusted EBITDA to net sales.
We believe that adjusted EBITDA and adjusted EBITDA margins are useful to investors when presented together with comparable GAAP measures, because management uses adjusted EBITDA and adjusted EBITDA margins to evaluate our business performance.
Adjusted net income and adjusted net income per share
We use adjusted net income and adjusted net income per share to evaluate our business performance and profitability. Management believes that these indicators provide investors with useful information by providing other ways to view the company’s performance. When checked against the corresponding GAAP indicators, these indicators provide indicators of performance and profitability, excluding abnormal and/or non-cash The impact of the project. We define adjusted net income as the net income before debt settlement losses, stock compensation, amortization of intangible assets, income from the acquisition of business, certain legal affairs and other items, and before income tax expenses or income arising from the above adjustments Net income. Subject to income tax. We define adjusted net income per share as basic and diluted net income per share, excluding debt settlement, stock compensation, amortization of intangible assets, sales of business income, certain legal affairs and other items, and due to the above Adjust the income tax expense or income that is subject to income tax.
Leverage Ratio-Net Debt/Adjusted EBITDA
We define leverage as the ratio of net debt (total debt minus cash and cash equivalents) to adjusted EBITDA in the past 12 months. We believe that the leverage ratio is useful to investors as an alternative liquidity measure.
We define free cash flow as net cash provided by operating activities minus capital expenditures. We believe that free cash flow provides meaningful information about the company’s liquidity.
(In thousands, except per share data)
Debt settlement losses
(In thousands, except stock and per share data)
Accounts receivable minus current and expected credit loss reserves of $2,510 and
Prepaid expenses and other liquid assets
Real estate, plant and equipment, net
Accrued compensation and employee benefits
Ordinary shares with a par value of US$0.01, 1,000,000,000 authorized shares, 45,997,159 and 47,407,023 issued and outstanding shares respectively
Treasury stocks, held at cost, are 260,900 and 260,900 shares respectively
Consolidated cash flow statement
Adjust net income and net cash provided by operating activities
Amortization of debt issuance cost and original issuance discount
Debt settlement losses
Provision for Accounts Receivable and Inventory Loss
Amortization of right-of-use assets
Disposal of loss of real property, plant and equipment
Proceeds from buying a business
Other adjustments to net income
Changes in operating assets and liabilities, net of the impact of acquisitions
Prepaid expenses and other liquid assets
Net cash provided by operating activities
Insurance proceeds from the sale of property, plant and equipment
Proceeds from the sale of property, plant and equipment
Acquisition of business, net of cash acquired
Net cash used for investment activities
Issuance of ordinary shares, deducting withholding taxes
Pay debt financing costs and expenses
Net cash used for financing activities
The impact of foreign exchange rate changes on cash and cash equivalents
Increase (decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the period
Cash and cash equivalents at the end of the period
Income tax paid, deduction of refund
Capital expenditure, unpaid
Operating cash flow from cash paid for operating lease liabilities
Exchange lease liabilities for operating lease use right assets
Net cash provided by operating activities
The following table lists the reconciliation of adjusted EBITDA and net income for the periods indicated:
Debt settlement losses
Gains from acquired companies
(a) Representing other items, such as inventory reserves and adjustments, disposal of real property, loss of plant and equipment, insurance compensation related to damage to real property, plant and equipment, relief from uncertain tax status that has been compensated, and realized or Unrealized gains (losses) inter-company loans, restructuring expenses, transaction costs and the foreign currency impact of related forward currency derivatives.
The following table shows the calculation of adjusted EBITDA margin by sector during the presented period:
The following table shows the calculation of Atkore Inc.'s adjusted EBITDA margin for the period indicated:
The following table lists the reconciliation of adjusted net income and net income during the listed periods:
(In thousands, except per share data)
Proceeds from buying a business
Debt settlement losses
Pre-tax adjustment of net income
Weighted average diluted common shares outstanding
Diluted earnings per share (b)
Adjusted diluted net income per share (c)
(a) Representing other items, such as inventory reserves and adjustments, disposal of real property, loss of plant and equipment, insurance compensation related to damage to real property, plant and equipment, relief from uncertain tax status that has been compensated, and realized or Unrealized gains (losses) the foreign exchange impact of intercompany loans and related forward currency derivatives.
(b) The company uses the binary classification method to calculate the basic and diluted net income per common share. Under the binary classification method, net income is allocated to each type of common stock and participating securities, as if all net income in the current period has been allocated. The company’s participating securities include share-based payment incentives, which include an inalienable right to receive dividends, and are therefore deemed to participate in undistributed income together with ordinary shareholders. Calculating the diluted net income per share includes the undistributed income of 11,380 and 3,356 allocated to the 2021 and 2020 fiscal years. Our annual report on Form 10-K.
(c) Adjusted diluted net income per share is calculated by dividing the adjusted net income by the weighted average diluted ordinary shares issued.
The following table lists the reconciliation of net debt and total debt for the period presented:
Current maturity of short-term debt and long-term debt
Minus cash and cash equivalents
The following table lists net sales for the fiscal years ended 2020, 2019, and 2018, and the quarters for fiscal 2020:
The following table shows adjusted EBITDA as of fiscal year 2020, 2019 and 2018, and fiscal year 2020 quarter:
1 The forward-looking full-year reconciliation of adjusted EBITDA and adjusted diluted net income per share and the first quarter of fiscal year 2022 is not provided because the company currently does not have enough data to accurately estimate the variables and individual adjustments of such reconciliations .
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