Atkore Inc.

02/03/2026 | Press release | Distributed by Public on 02/03/2026 05:01

Quarterly Report for Quarter Ending December 26, 2025 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations
The following information should be read in conjunction with the unaudited condensed consolidated financial statements and related notes included in this report. The following discussion may contain forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in these forward-looking statements. Factors that could cause or contribute to these differences include those factors discussed below and included or referenced elsewhere in this report, particularly in the sections entitled "Forward-Looking Statements" and "Risk Factors."
Incremental Market Uncertainties
Recent events, including the imposition of tariffs and other changes in international trade policy, central bank interest rate adjustments, inflation, and conflicts in Ukraine and the Middle East are creating additional uncertainty in the global economy, generally, and in the markets we operate in. The aforementioned conflicts and other factors have had and will continue to have adverse effects on global supply chains, which may impact some aspects of our business. Furthermore, we are mindful of the effects that adverse weather can have on our domestic supply chain.
Restructuring and Strategic Review
In fiscal 2025, the Company announced a series of plant closures and a broader strategic review of the Company's portfolio, which could result in the divestiture of certain businesses. Restructuring costs and activities related to the strategic review could result in increased selling, general and administrative costs in the form of restructuring and transaction costs, as well increased costs of sales as the result of increased depreciation related to a decrease in useful lives of assets at impacted sites. Furthermore, these activities could result in the Company recognizing impairment charges on property, plant and equipment, intangible assets or goodwill.
RESULTS OF OPERATIONS
The consolidated results of operations for the three months ended December 26, 2025 and December 27, 2024 were as follows:
Three months ended
(in thousands) December 26, 2025 December 27, 2024 Change % Change
Net sales $ 655,548 $ 661,597 $ (6,049) (0.9) %
Cost of sales 529,615 490,509 39,106 8.0 %
Gross profit 125,933 171,088 (45,155) (26.4) %
Selling, general and administrative 99,552 91,451 8,101 8.9 %
Intangible asset amortization 6,310 11,699 (5,389) (46.1) %
Operating income 20,071 67,938 (47,867) (70.5) %
Interest expense, net 6,899 8,209 (1,310) (16.0) %
Other (income) expense, net (2,327) 1,133 (3,460) (305.4) %
Income before income taxes 15,499 58,596 (43,097) (73.5) %
Income tax expense 465 12,260 (11,795) (96.2) %
Net income $ 15,034 $ 46,336 $ (31,302) (67.6) %
Net sales
% Change
Volume 2.3 %
Average selling prices (2.7) %
Other (0.5) %
Net sales (0.9) %
Net sales decreased by $6.0 million, or 0.9%, to $655.5 million for the three months ended December 26, 2025, compared to $661.6 million for the three months ended December 27, 2024. The decrease in net sales is primarily attributed to decreased average selling prices across the Company's products of $18.1 million and the impact of divestitures in fiscal 2025 of $5.2 million, partially offset by increased sales volume of $15.3 million.
Cost of sales
% Change
Volume 3.1 %
Average input costs 5.2 %
Other (0.3) %
Cost of sales 8.0 %
Cost of sales increased by $39.1 million, or 8.0%, to $529.6 million for the three months ended December 26, 2025 compared to $490.5 million for the three months ended December 27, 2024. The increase was primarily due to increased sales volume of $15.2 million, increased inputs costs of $25.3 million, and increased depreciation of $11.8 million partially offset by lower freight and warehousing costs of $15.1 million and the impact of divestitures in fiscal 2025 of $5.7 million. The increase in depreciation primarily relates to additional depreciation of $8.2 million related to site closures as described in Note 5, "Restructuring Charges."
Selling, general and administrative
Selling, general and administrative expenses increased by $8.1 million, or 8.9%, to $99.6 million for the three months ended December 26, 2025 compared to $91.5 million for the three months ended December 27, 2024. The increase was primarily due to increased transaction costs of $6.3 million and restructuring costs of $1.2 million.
Intangible asset amortization
Intangible asset amortization expense decreased to $6.3 million for the three months ended December 26, 2025 compared to $11.7 million for the three months ended December 27, 2024. The decrease in amortization expense resulted from certain intangibles becoming fully amortized or the amortizable base decreasing as a result of impairment charges recorded in fiscal 2025.
Interest expense, net
Interest expense, net decreased by $1.3 million, or 16.0% to $6.9 million for the three months ended December 26, 2025 compared to $8.2 million for the three months ended December 27, 2024. The decrease is primarily due to decreased interest rates on the Company's Senior Secured Term Loan Facility.
Other (income) expense, net
The Company recognized $2.3 million of other income for the three months ended December 26, 2025 compared to $1.1 million other expense for the three months ended December 27, 2024. This change is primarily due to a gain on the sale of Tectron Tube of $2.3 million in the first quarter of fiscal 2026.
Income tax expense
The Company's income tax rate decreased to 3.0% for the three months ended December 26, 2025 compared to 20.9% for the three months ended December 27, 2024. The decrease in the current period effective tax rate was driven by a one-time discrete tax benefit related to tax planning strategies which resulted in deductible tax attributes.
SEGMENT RESULTS
The Electrical segment manufactures high quality products used in the construction of electrical power systems including conduit, cable and installation accessories. This segment serves contractors in partnership with the electrical wholesale channel.
The Safety & Infrastructure segment designs and manufactures solutions including metal framing, mechanical pipe, perimeter security and cable management for the protection and reliability of critical infrastructure. These solutions are marketed to contractors, original equipment manufacturers and end users.
Both segments use Adjusted EBITDA as the primary measure of profit and loss. Segment Adjusted EBITDA is income (loss) before income taxes, adjusted to exclude unallocated expenses, depreciation and amortization, interest expense, net, stock-based compensation, loss on extinguishment of debt, gains and losses on the divestiture of a business, asset impairment charges, certain legal matters, and other items, such as inventory reserves and adjustments, (gain) loss on disposal of property, plant and equipment, insurance recovery related to damages of property, plant and equipment, release of indemnified uncertain tax positions, realized or unrealized gain (loss) on foreign currency impacts of intercompany loans and related forward currency derivatives, gain on purchase of business, loss on assets held for sale, restructuring costs and transaction costs. We define segment Adjusted EBITDA margin as segment Adjusted EBITDA as a percentage of segment Net sales.
Electrical
Three months ended
(in thousands) December 26, 2025 December 27, 2024 Change % Change
Net sales $ 469,554 $ 465,355 $ 4,199 0.9 %
Adjusted EBITDA $ 55,102 $ 92,387 $ (37,285) (40.4) %
Adjusted EBITDA margin 11.7 % 19.9 %
Net sales
% Change
Volume 5.0 %
Average selling prices (3.9) %
Other (0.2) %
Net sales 0.9 %
Net sales increased by $4.2 million, or 0.9%, to $469.6 million for the three months ended December 26, 2025 compared to $465.4 million for the three months ended December 27, 2024. The increase in net sales is primarily attributed to increased sales volume of $23.4 million partially offset by decreased average selling prices of $18.1 million.
Adjusted EBITDA
Adjusted EBITDA for the three months ended December 26, 2025 decreased by $37.3 million, or 40.4%, to $55.1 million from $92.4 million for the three months ended December 27, 2024. Adjusted EBITDA
margin decreased to 11.7% for the three months ended December 26, 2025 compared to 19.9% for the three months ended December 27, 2024. The decrease in Adjusted EBITDA and Adjusted EBITDA margin was largely due to lower average selling prices and higher input costs.
Safety & Infrastructure
Three months ended
(in thousands) December 26, 2025 December 27, 2024 Change % Change
Net sales $ 186,252 $ 196,724 $ (10,472) (5.3) %
Adjusted EBITDA $ 30,187 $ 15,579 $ 14,608 93.8 %
Adjusted EBITDA margin 16.2 % 7.9 %
Net sales
% Change
Volume (4.1) %
Solar energy tax credits (0.1) %
Acquisitions (1.0) %
Other (0.1) %
Net sales (5.3) %
Net sales decreased by $10.5 million, or 5.3%, for the three months ended December 26, 2025 to $186.3 million compared to $196.7 million for the three months ended December 27, 2024. The decrease is primarily attributed to lower sales volume of $8.1 million.
Adjusted EBITDA
Adjusted EBITDA increased by $14.6 million, or 93.8%, to $30.2 million for the three months ended December 26, 2025 compared to $15.6 million for the three months ended December 27, 2024. Adjusted EBITDA margin increased to 16.2% for the three months ended December 26, 2025 compared to 7.9% for the three months ended December 27, 2024. The increase in Adjusted EBITDA and Adjusted EBITDA margin was largely due to increases associated with improved operational performance and cost control in our mechanical and construction business.
LIQUIDITY AND CAPITAL RESOURCES
We believe we have sufficient liquidity to support our ongoing operations and to invest in future growth and create value for stockholders. Our cash and cash equivalents were $443.8 million as of December 26, 2025, of which $98.2 million was held at non-U.S. subsidiaries. Those cash balances at foreign subsidiaries may be subject to withholding or local country taxes if the Company's intention to permanently reinvest such income were to change and cash was repatriated to the United States.
In general, we require cash to fund working capital investments, acquisitions, capital expenditures, debt repayment, interest payments, taxes, share repurchases and dividend payments. We have access to the ABL Credit Facility to fund operational needs. As of December 26, 2025, there were no outstanding borrowings under the ABL Credit Facility and no letters of credit issued under the ABL Credit Facility. The borrowing base was estimated to be $325.0 million and approximately $325.0 million was available under the ABL Credit Facility as of December 26, 2025. Outstanding letters of credit count as utilization of the commitments under the ABL Credit Facility and reduce the amount available for borrowings.
The agreements governing the Senior Secured Term Loan Facility and the ABL Credit Facility (collectively, the "Credit Facilities") contain covenants that limit or restrict AII's ability to incur additional indebtedness, repurchase debt, incur liens, sell assets, make certain payments (including dividends), and enter into transactions with affiliates. AII has been in compliance with the covenants under the agreements for all periods presented.
We may from time to time repurchase our debt or take other steps to reduce our debt. These actions may include open market repurchases, negotiated repurchases or opportunistic refinancing of debt. The amount of debt, if any, that may be repurchased or refinanced will depend on market conditions, trading levels of our debt, our cash position, compliance with debt covenants and other considerations.
Our use of cash may fluctuate during the year and from year to year due to differences in demand and changes in economic conditions primarily related to the prices of the commodities we purchase.
Capital expenditures have historically been necessary to expand and update the production capacity and improve the productivity of our manufacturing operations.
Our ongoing liquidity needs are expected to be funded by cash on hand, net cash provided by operating activities and, as required, borrowings under the ABL Credit Facility. We expect that cash provided from operations and available capacity under the ABL Credit Facility will provide sufficient funds to operate our business, make expected capital expenditures and meet our liquidity requirements for at least the next twelve months, including payments of interest and principal on our debt.
There have been no material changes in our contractual obligations and commitments since the filing of our Annual Report on Form 10-K.
Limitations on distributions and dividends by subsidiaries
AI and AII are each holding companies, and as such have no independent operations or material assets other than ownership of equity interests in their respective subsidiaries. Each company depends on its respective subsidiaries to distribute funds to it so that it may pay obligations and expenses, including satisfying obligations with respect to indebtedness. The ability of our subsidiaries to make distributions and dividends to us depends on their operating results, cash requirements and financial and general business conditions, as well as restrictions under the laws of our subsidiaries' jurisdictions.
The agreements governing the Credit Facilities significantly restrict the ability of our subsidiaries, including AII, to pay dividends, make loans or otherwise transfer assets from AII and, in turn, to us. Further, AII's subsidiaries are permitted under the terms of the Credit Facilities to incur additional indebtedness that may restrict or prohibit the making of distributions, the payment of dividends or the making of loans by such subsidiaries to AII and, in turn, to us. The Senior Secured Term Loan Facility requires AII to meet a certain consolidated coverage ratio on an incurrence basis in connection with additional indebtedness. The ABL Credit Facility contains limits on additional indebtedness based on various conditions for incurring the additional debt. AII has been in compliance with the covenants under the agreements for all periods presented.
The table below summarizes cash flow information derived from our statements of cash flows for the periods indicated:
Three months ended
(in thousands) December 26, 2025 December 27, 2024
Cash flows provided by (used in):
Operating activities $ (55,497) $ 74,374
Investing activities 6,637 (41,137)
Financing activities (15,325) (67,668)
Operating activities
During the three months ended December 26, 2025, the Company used $55.5 million cash flow in operating activities compared to $74.4 million provided during the three months ended December 27, 2024. The $129.9 million decrease in cash provided was primarily due to decreased operating income of $47.9 million, partially offset by less working capital used of $100.3 million and the impact of taxes of $1.9 million.
Investing activities
During the three months ended December 26, 2025, the Company used $6.6 million in investing activities compared to $41.1 million during the three months ended December 27, 2024. The $47.8 million decrease in cash used in investing activities was primarily due to a decrease of $29.5 million in capital expenditures and proceeds from the sale of Tectron Tube of $18.4 million.
Financing Activities
During the three months ended December 26, 2025, the Company was provided $15.3 million in financing activities compared to $67.7 million used during the three months ended December 27, 2024. The decrease in cash used in financing activities is primarily due to $50.0 million less cash used to repurchase common stock during the three months ended December 26, 2025.
CHANGES IN CRITICAL ACCOUNTING POLICIES AND ESTIMATES
There have been no material changes in our critical accounting policies and estimates since the filing of our Annual Report on Form 10-K.
RECENT ACCOUNTING STANDARDS
See Note 1, "Basis of Presentation and Summary of Significant Accounting Policies" to our unaudited condensed consolidated financial statements.
FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains forward-looking statements and cautionary statements within the meaning of the Private Securities Litigation Reform Act of 1995 that are based on management's beliefs and assumptions and information currently available to management. Some of the forward-looking statements can be identified by the use of forward-looking terms such as "believes," "expects," "may," "will," "shall," "should," "would," "could," "seeks," "aims," "projects," "is optimistic," "intends," "plans," "estimates," "anticipates" or other comparable terms. Forward-looking statements include, without limitation, all matters that are not historical facts. They appear in a number of places throughout this Quarterly Report on Form 10-Q and include, without limitation, statements regarding our intentions, beliefs, assumptions or current expectations concerning, among other things, financial position; results of operations; cash flows; prospects; growth strategies or expectations; customer retention; the outcome (by judgment or settlement) and costs of legal, administrative or regulatory proceedings, investigations or inspections, including, without limitation, collective, representative or class action litigation; and the impact of prevailing economic conditions.
Forward-looking statements are subject to known and unknown risks and uncertainties, many of which may be beyond our control. We caution you that forward-looking statements are not guarantees of future performance or outcomes and that actual performance and outcomes, including, without limitation, our actual results of operations, financial condition and liquidity, and the development of the market in which we operate, may differ materially from those made in or suggested by the forward-looking statements contained in this Quarterly Report. In addition, even if our results of operations, financial condition and cash flows, and the development of the market in which we operate, are consistent with the forward-looking statements contained in this Quarterly Report, those results or developments may not be indicative of results or developments in subsequent periods. A number of important factors, including, without limitation, the risks and uncertainties disclosed in the Company's filings with the SEC, including but not limited to the Company's most recent Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, could cause actual results and outcomes to differ materially from those reflected in the forward-looking statements. Additional factors that could cause actual results and outcomes to differ from those reflected in forward-looking statements include, without limitation:
•the timing and effects of our review of strategic alternatives;
•declines in, and uncertainty regarding, the general business and economic conditions in the United States and international markets in which we operate;
•weakness or another downturn in the United States non-residential construction industry;
•changes in prices of raw materials;
•pricing pressure, reduced profitability, or loss of market share due to intense competition;
•availability and cost of third-party freight carriers and energy;
•security threats, attacks, or other disruptions to our information systems, or failure to comply with complex network security, data privacy and other legal obligations or the failure to protect sensitive information;
•high levels of imports of products similar to those manufactured by us;
•changes in federal, state, local and international governmental regulations and trade policies;
•adverse weather conditions;
•work stoppage or other interruptions of production at our facilities as a result of disputes under existing collective bargaining agreements with labor unions or in connection with negotiations of new collective bargaining agreements, as a result of supplier financial distress, or for other reasons;
•increased costs relating to future capital and operating expenditures to maintain compliance with environmental, health and safety laws;
•reduced spending by, deterioration in the financial condition of, or other adverse developments, including inability or unwillingness to pay our invoices on time, with respect to one or more of our top customers;
•increases in our working capital needs, which are substantial and fluctuate based on economic activity and the market prices for our main raw materials, including as a result of failure to collect, or delays in the collection of, cash from the sale of manufactured products;
•possible impairment of goodwill or other long-lived assets as a result of future triggering events, such as declines in our cash flow projections or customer demand and changes in our business and valuation assumptions;
•product liability, construction defect and warranty claims and litigation relating to our various products, as well as government inquiries and investigations, and consumer, employment, tort and other legal proceedings;
•widespread outbreak of diseases;
•changes in our financial obligations relating to pension plans that we maintain in the United States;
•reduced production or distribution capacity due to interruptions in the operations of our facilities or those of our key suppliers;
•loss of a substantial number of our third-party agents or distributors or a dramatic deviation from the amount of sales they generate;
•our inability to introduce new products effectively or implement our innovation strategies;
•safety and labor risks associated with the manufacture and in the testing of our products;
•our ability to protect our intellectual property and other material proprietary rights;
•risks inherent in doing business internationally;
•changes in foreign laws and legal systems, including as a result of Brexit;
•our inability to continue importing raw materials, component parts and/or finished goods;
•disruptions or impediments to the receipt of sufficient raw materials resulting from various anti-terrorism security measures;
•the incurrence of liabilities and the issuance of additional debt or equity in connection with acquisitions, joint ventures or divestitures and the failure of indemnification provisions in our acquisition agreements to fully protect us from unexpected liabilities;
•failure to manage acquisitions successfully, including identifying, evaluating, and valuing acquisition targets and integrating acquired companies, businesses, or assets;
•the incurrence of additional expenses, increases in the complexity of our supply chain and potential damage to our reputation with customers resulting from regulations related to "conflict minerals";
•restrictions contained in our debt agreements;
•failure to generate cash sufficient to pay the principal of, interest on, or other amounts due on our debt;
•challenges attracting and retaining key personnel or high-quality employees;
•future changes to tax legislation;
•failure to generate sufficient cash flow from operations or to raise sufficient funds in the capital markets to satisfy existing obligations and support the development of our business; and
•other risks and factors described in this Quarterly Report and from time to time in documents that we file with the SEC.
You should read this Quarterly Report completely and with the understanding that actual future results may be materially different from expectations. All forward-looking statements attributable to us or persons acting on our behalf that are made in this Quarterly Report are qualified in their entirety by these cautionary statements. These forward-looking statements are made only as of the date of this Quarterly Report, and we do not undertake any obligation, other than as may be required by law, to update or revise any forward-looking or cautionary statements to reflect changes in assumptions, the occurrence of events, unanticipated or otherwise, and changes in future operating results over time or otherwise.
Comparisons of results for current and any prior periods are not intended to express any future trends, or indications of future performance, unless expressed as such, and should only be viewed as historical data.
Atkore Inc. published this content on February 03, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on February 03, 2026 at 11:02 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]