Atkore Inc. Reports 17.1% Revenue Decline and 66.5% Drop in Net Income for December Quarter

Atkore Inc. reported a significant decline in financial performance for the three months ended December 27, 2024, with net sales of $661.6 million, down 17.1% from $798.5 million in the same period last year. The decrease in revenue was primarily driven by a reduction in average selling prices, which accounted for a $96.2 million drop, alongside a $43.8 million decrease in sales volume. Gross profit also fell sharply, decreasing by 41.1% to $171.1 million, while operating income plummeted 61.3% to $67.9 million. Net income for the quarter was $46.3 million, a 66.5% decline compared to $138.4 million in the prior year, resulting in diluted earnings per share of $1.31, down from $3.61.

The company's cost of sales decreased by 3.4% to $490.5 million, reflecting a reduction in sales volume, which was partially offset by increased input and freight costs. Selling, general, and administrative expenses also saw a decline of 9.1% to $91.5 million, attributed to lower medical and insurance expenses, as well as reduced commissions. However, interest expense increased by 5.3% to $8.2 million, primarily due to rising interest rates on the company's Senior Secured Term Loan Facility. Other expenses surged to $1.1 million, largely due to foreign exchange losses.

In terms of operational developments, Atkore did not engage in any acquisitions during the reported quarter, following a previous acquisition in fiscal 2022. The company continues to focus on its core segments: Electrical and Safety & Infrastructure, which reported net sales of $465.4 million and $196.7 million, respectively. The Electrical segment experienced a 21.6% decline in sales, while the Safety & Infrastructure segment saw a smaller decrease of 4.1%. The company’s total assets as of December 27, 2024, were $2.96 billion, with total liabilities of $1.45 billion, resulting in total equity of $1.51 billion.

Looking ahead, Atkore's management acknowledged ongoing market uncertainties, including inflation and geopolitical conflicts, which may impact supply chains and overall business conditions. The company has sufficient liquidity, with cash and cash equivalents totaling $310.4 million, and plans to utilize its available ABL Credit Facility for operational needs. The company remains committed to its growth strategies, including potential future acquisitions and investments in production capacity, while navigating the challenges posed by the current economic environment.