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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
________________________________________
FORM 10-Q
_________________________________________
☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 28, 2024
OR
☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                      to
Commission file number 001-37793
 _________________________________________
atk24194brandlogohorizontalc.jpg
Atkore Inc.

(Exact name of registrant as specified in its charter)
 _________________________________________
Delaware90-0631463
(State or other jurisdiction of
incorporation or organization)		(IRS Employer
Identification No.)
16100 South Lathrop Avenue, Harvey, Illinois 60426
(Address of principal executive offices) (Zip Code)
708-339-1610
(Registrant’s telephone number, including area code)
________________________________________
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading symbolName of each exchange on which registered
Common Stock, $.01 par value per shareATKRNew York Stock Exchange
_____________________
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒     No  ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ☒    No  ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer☒Accelerated filer☐
Non-accelerated filer☐Smaller reporting company☐
Emerging growth company☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Securities Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).    Yes  ☐    No  ☒
_____________________
As of July 31, 2024, there were 35,864,729 shares of the registrant’s common stock, $0.01 par value per share, outstanding.


TABLE OF CONTENTS
 
 Page No.
1

PART I. FINANCIAL INFORMATION
    Item 1. Financial Statements
ATKORE INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
 
Three months endedNine months ended
(in thousands, except per share data)NoteJune 28, 2024June 30, 2023June 28, 2024June 30, 2023
Net sales$822,364 $919,117 $2,413,756 $2,648,872 
Cost of sales542,709 568,316 1,551,986 1,610,836 
Gross profit279,655 350,801 861,770 1,038,036 
Selling, general and administrative97,987 103,019 297,147 291,198 
Intangible asset amortization1113,216 15,192 41,904 42,778 
Operating income168,452 232,590 522,719 704,061 
Interest expense, net9,944 8,682 26,058 26,645 
Other expense, net 5560 3,689 1,302 7,588 
Income before income taxes157,948 220,219 495,359 669,828 
Income tax expense634,531 18,931 95,606 120,854 
Net income$123,417 $201,288 $399,753 $548,974 
Net income per share
Basic7$3.36 $5.20 $10.74 $13.81 
Diluted7$3.33 $5.13 $10.61 $13.62 
 
See Notes to unaudited condensed consolidated financial statements.


2

ATKORE INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)

Three months endedNine months ended
(in thousands)NoteJune 28, 2024June 30, 2023June 28, 2024June 30, 2023
Net income$123,417 $201,288 $399,753 $548,974 
Other comprehensive income, net of tax:
Change in foreign currency translation adjustment(518)4,404 4,284 18,128 
Change in unrecognized loss related to pension benefit plans452 132 158 395 
Total other comprehensive income8(466)4,536 4,442 18,523 
Comprehensive income $122,951 $205,824 $404,195 $567,497 
See Notes to unaudited condensed consolidated financial statements.


3

ATKORE INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(in thousands, except share and per share data)NoteJune 28, 2024September 30, 2023
Assets
Current Assets:
Cash and cash equivalents$303,657 $388,114 
Accounts receivable, less allowance for current and expected credit losses of $4,702 and $5,179, respectively
503,367 559,854 
Inventories, net9573,317 493,852 
Prepaid expenses and other current assets139,913 96,670 
Total current assets1,520,254 1,538,490 
Property, plant and equipment, net10615,413 559,041 
Intangible assets, net11352,986 394,372 
Goodwill11311,998 311,106 
Right-of-use assets, net152,198 120,747 
Deferred tax assets6548 546 
Other long-term assets10,647 10,707 
Total Assets$2,964,044 $2,935,009 
Liabilities and Equity
Current Liabilities:
Accounts payable237,184 292,734 
Income tax payable4,914 6,322 
Accrued compensation and employee benefits38,413 45,576 
Customer liabilities99,298 121,576 
Lease obligations20,700 16,230 
Other current liabilities65,327 82,166 
Total current liabilities465,836 564,604 
Long-term debt12764,300 762,687 
Long-term lease obligations136,031 105,517 
Deferred tax liabilities621,555 22,346 
Other long-term liabilities14,794 11,736 
Total Liabilities1,402,516 1,466,890 
Equity:
Common stock, $0.01 par value, 1,000,000,000 shares authorized, 35,864,442 and 37,317,893 shares issued and outstanding, respectively
359 374 
Additional paid-in capital502,125 506,783 
Retained earnings1,088,542 994,902 
Accumulated other comprehensive loss8(29,498)(33,940)
Total Equity1,561,528 1,468,119 
Total Liabilities and Equity$2,964,044 $2,935,009 
See Notes to unaudited condensed consolidated financial statements.
4

ATKORE INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
 
Nine months ended
(in thousands)NoteJune 28, 2024June 30, 2023
Operating activities:
Net income$399,753 $548,974 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization88,407 84,671 
Deferred income taxes6(1,065)(1,171)
Stock-based compensation14,273 18,100 
Amortization of right-of-use assets21,200 14,713 
(Gain) Loss on disposal of property, plant and equipment(621)159 
Other non-cash adjustments to net income4,563 6,525 
Changes in operating assets and liabilities, net of effects from acquisitions
Accounts receivable57,721 (33,501)
Inventories(80,674)(13,611)
Prepaid expenses and other current assets(11,636)(6,986)
Accounts payable(52,093)16,051 
Accrued and other liabilities(60,136)(11,580)
Income taxes(32,193)(58,059)
Other, net2,458 (536)
Net cash provided by operating activities349,957 563,748 
Investing activities:
Capital expenditures(105,098)(122,535)
Proceeds from sale of properties and equipment457 31 
Acquisition of businesses, net of cash acquired3(6,036)(83,385)
Net cash used in investing activities(110,677)(205,890)
Financing activities:
Issuance of common stock, net of shares withheld for tax(18,926)(14,589)
Repurchase of common stock(281,019)(416,023)
Finance lease payments(1,402)(990)
Dividends paid to shareholders(23,248)— 
Net cash used for financing activities(324,595)(431,603)
Effects of foreign exchange rate changes on cash and cash equivalents858 2,803 
Decrease in cash and cash equivalents(84,457)(70,942)
Cash and cash equivalents at beginning of period388,114 388,751 
Cash and cash equivalents at end of period$303,657 $317,809 
Supplementary Cash Flow information
Capital expenditures, not yet paid$4,660 $10,593 
Operating lease right-of-use assets obtained in exchange for lease liabilities$45,453 $33,677 
Acquisitions of businesses, not yet paid$— $14,125 
See Notes to unaudited condensed consolidated financial statements.
5

ATKORE INC.
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY
(Unaudited)

Common StockTreasury StockAdditional Paid-in CapitalRetained EarningsAccumulated Other Comprehensive LossTotal Equity
(in thousands)SharesAmountAmount
Balance as of September 30, 202337,317 $375 $— $506,783 $994,901 $(33,940)$1,468,119 
Net income— — — — 138,381 — 138,381 
Other comprehensive Income— — — — — 9,780 9,780 
Stock-based compensation— — — 4,757 — — 4,757 
Issuance of common stock, net of shares withheld for tax309 3 — (21,302)— — (21,299)
Repurchase of common stock(721)(7)— — (97,385)— (97,392)
Balance as of December 29, 202336,905 $370 $— $490,238 $1,035,897 $(24,160)$1,502,345 
Net income— — — — 137,955 — 137,955 
Other comprehensive loss— — — — — (4,872)(4,872)
Stock-based compensation— — — 5,028 — — 5,028 
Issuance of common stock, net of shares withheld for tax118 1 — 2,385 — — 2,386 
Repurchase of common stock(389)(4)— — (59,223)— (59,227)
Dividends declared— — — — (11,719)— (11,719)
Balance as of March 29, 202436,634 $367 $— $497,651 $1,102,910 $(29,032)$1,571,896 
Net income— — — — 123,417 — 123,417 
Other comprehensive loss— — — — — (466)(466)
Stock-based compensation— — — 4,488 — — 4,488 
Issuance of common stock, net of shares withheld for tax18 — — (14)— — (14)
Repurchase of common stock(787)(8)— — (126,257)— (126,265)
Dividends declared— — — — (11,528)— (11,528)
Balance as of June 28, 202435,865 $359 $— $502,125 $1,088,542 $(29,498)$1,561,528 
6

Common StockTreasury StockAdditional Paid-in CapitalRetained EarningsAccumulated Other Comprehensive LossTotal Equity
(in thousands)SharesAmountAmount
Balance as of September 30, 202241,351 $415 $(2,580)$500,117 $801,981 $(50,146)$1,249,787 
Net income— — — — 173,492 — 173,492 
Other comprehensive income— — — — — 11,324 11,324 
Stock-based compensation— — — 5,270 — — 5,270 
Issuance of common stock, net of shares withheld for tax200 1 — (14,776)— — (14,775)
Repurchase of common stock(1,683)(16)— — (150,040)— (150,056)
Balance as of December 30, 202239,868 $400 $(2,580)$490,611 $825,433 $(38,822)$1,275,042 
Net income— — — — 174,194 — 174,194 
Other comprehensive (loss)— — — — — 2,663 2,663 
Stock-based compensation— — — 6,863 — — 6,863 
Issuance of common stock, net of shares withheld for tax44 — — 336 — — 336 
Repurchase of common stock(974)(10)— — (120,293)— (120,303)
Balance as of March 31, 202338,938 $390 $(2,580)$497,810 $879,334 $(36,159)$1,338,795 
Net income— — — — 201,288 — 201,288 
Other comprehensive income— — — — — 4,536 4,536 
Stock-based compensation— — — 5,966 — — 5,966 
Issuance of common stock, net of shares withheld for tax3 — — (155)— — (155)
Repurchase of common stock(1,169)(11)— — (148,312)— (148,323)
Balance as of June 30, 202337,772 $379 $(2,580)$503,621 $932,310 $(31,623)$1,402,107 



See Notes to unaudited condensed consolidated financial statements.
7

ATKORE INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
(dollars and shares in thousands, except per share data)

1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
    
Basis of Presentation

Organization and Ownership Structure — Atkore Inc. (the “Company”, “Atkore” or “AI”) is a leading manufacturer of Electrical products primarily for the non-residential construction and renovation markets and Safety & Infrastructure solutions for the construction and industrial markets. Atkore was incorporated in the State of Delaware on November 4, 2010 under the name Atkore International Group, Inc. As of December 20, 2022, Atkore was the sole stockholder of Atkore International Holdings Inc. (“AIH”), which in turn was the sole stockholder of Atkore International Inc. ("AII"). On December 28, 2022, AIH merged into AII, with AII being the surviving entity. Accordingly, Atkore is now the sole stockholder of AII.

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.

Basis of Presentation — The accompanying unaudited condensed consolidated financial statements of the Company included herein have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). These unaudited condensed consolidated financial statements have been prepared in accordance with the Company’s accounting policies and on the same basis as those financial statements included in the Company’s latest Annual Report on Form 10-K for the year ended September 30, 2023, filed with the U.S. Securities and Exchange Commission (the “SEC”) on November 17, 2023, and should be read in conjunction with those consolidated financial statements and the notes thereto. Certain information and disclosures normally included in the Company’s annual financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to the rules and regulations of the SEC.
    
The unaudited condensed consolidated financial statements include the assets and liabilities used in operating the Company’s business. All intercompany balances and transactions have been eliminated in consolidation. The results of companies acquired or disposed of are included in the unaudited condensed consolidated financial statements from the effective date of acquisition or up to the date of disposal.
    
These statements include all adjustments (consisting of normal recurring adjustments) that the Company considered necessary to present a fair statement of its results of operations, financial position and cash flows. The results reported in these unaudited condensed consolidated financial statements should not be regarded as necessarily indicative of results that may be expected for the entire year.

Fiscal Periods — The Company has a fiscal year that ends on September 30. The Company’s fiscal quarters typically end on the last Friday in December, March and June as it follows a 4-5-4 calendar.
    
Use of Estimates — The preparation of the condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclose contingent assets and liabilities at the date of the condensed consolidated financial statements and report the associated amounts of revenues and expenses. Actual results could differ materially from these estimates.



8

Recent Accounting Pronouncements

A summary of recently adopted accounting guidance is as follows. Adoption dates are on the first day of the fiscal year indicated below, unless otherwise specified.
ASUDescription of ASUImpact to AtkoreAdoption Date
2023-07 Segment Reporting (Topic 280); Improvements to Reportable Segment DisclosuresThe ASU requires companies to provide additional segment disclosures including disclosing title and position of the chief operating decision maker (“CODM”), disclosure of significant segment expenses provided to and reviewed by the CODM, and that public entities provide all annual disclosures about a reportable segment’s profit or loss and assets required by Topic 280 in interim periods.The Company will adopt the standard in fiscal 2025 and include the disclosures required by the ASU within the Segment Footnote of the annual report and quarterly reports beginning in fiscal 2026.2025
2023-09 Income Taxes (Topic 740); Improvements to Income Tax DisclosuresThe ASU requires companies to provide additional tax disclosures including specific categories in the rate reconciliations and reconciling items that meet a quantitative threshold. Additional disclosures are also required for income tax paid and the disaggregation of domestic and foreign income tax expense.The Company will adopt the standard in fiscal 2026 and include the disclosures required by the ASU within the Income Tax Footnote of the annual report.2026


2. REVENUE FROM CONTRACTS WITH CUSTOMERS

The Company’s revenue arrangements primarily consist of a single performance obligation to transfer promised goods which is satisfied at a point in time when title, risks and rewards of ownership, and subsequently control have transferred to the customer. This generally occurs when the product is shipped to the customer, with an immaterial amount of transactions in which control transfers upon delivery. The Company primarily offers assurance-type standard warranties that do not represent separate performance obligations.

Under the Inflation Reduction Act of 2022 (“IRA”), the Company is eligible for tax credits related to the manufacturing and selling of components used in the solar energy industry. These tax credits are transferable under the IRA when they meet certain criteria. When credits do not meet the transferability criteria, the benefit is recognized within income tax expense in accordance with ASC 740, “Income Taxes.” Beginning in fiscal 2024, the Company has concluded that the credits generated are transferable. As such, the benefit of the solar energy tax credits is recognized as a reduction of cost of sales.

The Company has contractual arrangements with certain customers to transfer a portion of the tax credits or to otherwise provide a rebate based on an agreed-upon value of the tax credits generated. Pursuant to such contractual arrangements, if the tax credits will be transferred to the customer, the Company identifies two separate performance obligations: (1) transfer the promised goods; and (2) transfer of the defined portion of the tax credits earned. The Company allocates the total value of these transactions between the two performance obligations. As a result of this allocation, the Company recognizes a reduction to revenue, similar to a rebate. For arrangements with no transfer of tax credits there is only a single performance obligation to transfer the promised goods and a rebate, which is recognized as a reduction of revenue, is granted based on the agreed-upon value of the tax credits generated.

9

The solar energy tax credit receivable is recorded in Prepaid Expenses and Other Current Assets and the liability to transfer the defined portion of the tax credits or the economic value is recorded in Customer Liabilities.

For the nine months ended June 28, 2024, the Company has recognized a reduction of revenue of $48,783 for the economic value of tax credits to be transferred and a benefit to cost of sales of $60,952. As of June 28, 2024, the Company has a liability of $16,887 for credits to be transferred or the value thereof. As of June 28, 2024, all activity related to the solar energy tax credits is within the Safety & Infrastructure segment.

The Company has certain arrangements that require it to estimate at the time of sale the amounts of variable consideration that should not be recorded as revenue as certain amounts are not expected to be collected from customers, as well as an estimate of the value of products to be returned. The Company principally relies on historical experience, specific customer agreements, and anticipated future trends to estimate these amounts at the time of sale and to reduce the transaction price. These arrangements include sales discounts and allowances, volume rebates, and returned goods. The Company records its obligations related to these items within the Customer Liabilities line on the balance sheet.
    
The Company records amounts billed to customers for reimbursement of shipping and handling costs within revenue. Shipping and handling costs associated with outbound freight after control over a product has transferred to a customer are accounted for as fulfillment costs and are included in cost of goods sold. Sales taxes and other usage-based taxes are excluded from revenue. The Company does not evaluate whether the selling price includes a financing interest component for contracts that are less than a year. The Company also expenses costs incurred to obtain a contract, primarily sales commissions, as all obligations will be settled in less than one year.

The Company typically receives payment 30 to 60 days from the point it has satisfied the related performance obligation. See Note 16, “Segment Information” for revenue disaggregated by geography and product categories.


3. ACQUISITIONS

From time to time, the Company enters into strategic acquisitions in an effort to better service existing customers and to obtain new customers. During the nine months ended June 28, 2024, the Company paid out $6,036 of accrued purchase price primarily related to the fiscal 2022 acquisition of Cascade Poly Pipe & Conduit and Northwest Polymers. No other acquisition activity occurred during the nine months ended June 28, 2024.

Fiscal 2023

On November 7, 2022, Atkore HDPE, LLC, a wholly-owned subsidiary of the Company, acquired the assets of Elite Polymer Solutions (“Elite”), for a purchase price of $90,230, of which $75,981 was paid at closing and an additional purchase price payable of $14,000 was accrued, of which $500 was paid in fiscal 2023 subsequent to the acquisition date. Elite is a manufacturer of high density polyethylene (HDPE) conduit, primarily serving the telecommunications, utility, and transportation markets. As a result of the acquisition, the Company preliminarily recognized $18,669 of tax deductible goodwill, $68,480 of identifiable intangible assets, of which $68,200 relates to customer relationships with an estimated useful life of 8 years, and $3,082 of working capital and other net tangible assets. The Company finalized the purchase price allocation of Elite in the fourth quarter of fiscal 2023.

The Elite acquisition in fiscal 2023 was funded using cash-on-hand. The Company incurred approximately $968 in acquisition-related expenses for fiscal 2023, which was recorded as a component of selling, general and administrative expenses.

Net sales and net income of the above acquisition are included in the condensed consolidated financial statement of operations for the post-acquisition period. Due to the immaterial nature of this
10

acquisition, the Company did not include the pro forma results of operations for this acquisition or the previous interim period.


4. POSTRETIREMENT BENEFITS

The Company provides pension benefits through a number of noncontributory and contributory defined benefit retirement plans covering eligible U.S. employees. As of September 30, 2017, all defined pension benefit plans were frozen, whereby participants no longer accrue credited service. The net periodic benefit credit was as follows: 
Three months endedNine months ended
(in thousands)NoteJune 28, 2024June 30, 2023June 28, 2024June 30, 2023
Interest cost$1,316 $1,294 $3,948 $3,882 
Expected return on plan assets(841)(1,257)(2,523)(3,771)
Amortization of actuarial loss67 167 200 501 
Net periodic benefit cost5$542 $204 $1,625 $612 


5. OTHER EXPENSE, NET

Other expense, net consisted of the following:
Three months endedNine months ended
(in thousands)June 28, 2024June 30, 2023June 28, 2024June 30, 2023
Loss on assets held for sale$121 $3,919 $142 $7,577 
Foreign exchange loss on intercompany loans165 (316)337 (482)
Pension-related benefits274 86 823 493 
Other expense, net $560 $3,689 $1,302 $7,588 

In fiscal 2023, the Company initiated plans to exit operations in Russia and expects to sell the related business at a loss. Accordingly, the Company recognized an impairment of the related assets in fiscal 2023 and continues to recognize any incremental losses on those assets.


6. INCOME TAXES    

For the three months ended June 28, 2024 and June 30, 2023, the Company’s effective tax rate attributable to income before income taxes was 21.9% and 8.6%, respectively. For the three months ended June 28, 2024 and June 30, 2023, the Company’s income tax expense was $34,531 and $18,931 respectively. The increase in the current period effective tax rate and expense was driven by a decrease in the benefit related to solar energy tax credits. In the third quarter of fiscal 2023, the Company recognized a one time $39,799 benefit in its income tax expense related to the credits available as part of the IRA.

For the nine months ended June 28, 2024 and June 30, 2023, the Company’s effective tax rate attributable to income before income taxes was 19.3% and 18.0%, respectively. For the nine months ended June 28, 2024 and June 30, 2023, the Company’s income tax expense was $95,606 and $120,854
11

respectively. The increase in the current period effective tax rate was driven by a decrease in the benefit related to solar energy tax credits.

A valuation allowance has been recorded against certain net operating losses in certain foreign jurisdictions. A valuation allowance is recorded when it is determined to be more likely than not that these assets will not be fully realized in the foreseeable future. The realization of deferred tax assets is dependent upon whether the Company can generate future taxable income in the appropriate character and jurisdiction to utilize the assets. The amount of the deferred tax assets considered realizable is subject to adjustment in future periods.


7. EARNINGS PER SHARE

The Company calculates basic and diluted earnings per common share using the two-class method. Under the two-class method, net earnings are allocated to each class of common stock and participating securities as if all of the net earnings for the period had been distributed. The Company’s participating securities consist of share-based payment awards that contain a non-forfeitable right to receive dividends and therefore are considered to participate in undistributed earnings with common stockholders.

 
Basic earnings per common share excludes dilution and is calculated by dividing the net earnings allocated to common stock by the weighted-average number of common stock outstanding for the period. Diluted earnings per common share is calculated by dividing net earnings allocated to common stock by the weighted-average number of shares outstanding for the period, as adjusted for the potential dilutive effect of non-participating share-based awards.


The following table sets forth the computation of basic and diluted earnings per share:
Three months endedNine months ended
(in thousands, except per share data)June 28, 2024June 30, 2023June 28, 2024June 30, 2023
Numerator:
Net income$123,417 $201,288 $399,753 $548,974 
Less: Undistributed earnings allocated to participating securities1,533 3,086 5,308 8,457 
Net income available to common shareholders$121,884 $198,202 $394,445 $540,517 
Denominator:
Basic weighted average common shares outstanding36,252 38,132 36,739 39,143 
Effect of dilutive securities: Non-participating employee stock options (1)
364 525 435 529 
Diluted weighted average common shares outstanding36,616 38,657 37,174 39,672 
Basic earnings per share$3.36 $5.20 $10.74 $13.81 
Diluted earnings per share$3.33 $5.13 $10.61 $13.62 
(1) Stock options to purchase shares of common stock that would have been anti-dilutive are not included in the calculation. There were no anti-dilutive options outstanding during the three months ended June 28, 2024 and June 30, 2023. Additionally, there were no anti-dilutive options outstanding during the nine months ended June 28, 2024 and June 30, 2023.
12

8. ACCUMULATED OTHER COMPREHENSIVE LOSS

The following tables present the changes in accumulated other comprehensive loss by component for the three months ended June 28, 2024 and June 30, 2023.

(in thousands)Defined Benefit
Pension Items		Currency
Translation
Adjustments 		Total
Balance as of March 29, 2024$(10,695)$(18,337)$(29,032)
Other comprehensive loss before reclassifications— (518)(518)
Amounts reclassified from accumulated other
comprehensive income, net of tax		52 — 52 
Net current period other comprehensive income (loss)52 (518)(466)
Balance as of June 28, 2024$(10,643)$(18,855)$(29,498)

(in thousands)Defined Benefit
Pension Items		Currency
Translation
Adjustments		Total
Balance as of March 31, 2023$(16,532)$(19,627)$(36,159)
Other comprehensive income before reclassifications— 4,404 4,404 
Amounts reclassified from accumulated other
comprehensive income, net of tax		132 — 132 
Net current period other comprehensive income132 4,404 4,536 
Balance as of June 30, 2023$(16,400)$(15,223)$(31,623)

The following tables present the changes in accumulated other comprehensive loss by component for the nine months ended June 28, 2024 and June 30, 2023.


(in thousands)Defined Benefit
Pension Items		Currency
Translation
Adjustments 		Total
Balance as of September 30, 2023$(10,801)$(23,139)$(33,940)
Other comprehensive loss before reclassifications— 4,284 4,284 
Amounts reclassified from accumulated other
comprehensive income, net of tax		158 — 158 
Net current period other comprehensive income (loss)158 4,284 4,442 
Balance as of June 28, 2024$(10,643)$(18,855)$(29,498)

13

(in thousands)Defined Benefit
Pension Items		Currency
Translation
Adjustments		Total
Balance as of September 30, 2022$(16,795)$(33,351)$(50,146)
Other comprehensive income before reclassifications— 18,128 18,128 
Amounts reclassified from accumulated other
comprehensive income, net of tax		395 — 395 
Net current period other comprehensive income395 18,128 18,523 
Balance as of June 30, 2023$(16,400)$(15,223)$(31,623)


9. INVENTORIES, NET

A majority of the Company’s inventories are recorded at the lower of cost (primarily last in, first out, or “LIFO”) or market or net realizable value, as applicable. Approximately 88% and 82% of the Company’s inventories were valued at the lower of LIFO cost or market at June 28, 2024 and September 30, 2023, respectively. Interim LIFO determinations, including those at June 28, 2024, are based on management’s estimates of future inventory levels and costs for the remainder of the current fiscal year.

(in thousands)June 28, 2024September 30, 2023
Purchased materials and manufactured parts, net$194,807 $231,518 
Work in process, net65,464 60,524 
Finished goods, net313,046 201,810 
Inventories, net$573,317 $493,852 

Total inventories would be $7,193 higher and $29,826 higher than reported as of June 28, 2024 and September 30, 2023, respectively, if the first-in, first-out method was used for all inventories. As of June 28, 2024, and September 30, 2023, the excess and obsolete inventory reserve was $27,386 and $25,585, respectively.






















14

10. PROPERTY, PLANT AND EQUIPMENT

As of June 28, 2024, and September 30, 2023, property, plant and equipment and accumulated depreciation were as follows:

(in thousands)June 28, 2024September 30, 2023
Land$29,154 $29,082 
Buildings and related improvements190,892 182,760 
Machinery and equipment568,508 513,563 
Leasehold improvements21,314 15,910 
Software51,547 47,072 
Construction in progress230,626 206,311 
Property, plant and equipment, at cost1,092,041 994,698 
Accumulated depreciation(476,628)(435,657)
Property, plant and equipment, net$615,413 $559,041 

Depreciation expense for the three months ended June 28, 2024 and June 30, 2023 totaled $16,716 and $14,913, respectively. Depreciation expense for the nine months ended June 28, 2024 and June 30, 2023 totaled $46,503 and $41,893, respectively.


11. GOODWILL AND INTANGIBLE ASSETS

Changes in the carrying amount of goodwill are as follows:    
(in thousands)ElectricalSafety & InfrastructureTotal
Balance as of September 30, 2023$258,427 $52,679 $311,106 
Exchange rate effects939 (47)892 
Balance as of June 28, 2024$259,366 $52,632 $311,998 
    
Goodwill balances as of June 28, 2024 included $5,645 and $43,000 of accumulated impairment losses within the Electrical and Safety & Infrastructure segments, respectively.

The Company assesses the recoverability of goodwill and indefinite-lived trade names on an annual basis in accordance with ASC 350, “Intangibles - Goodwill and Other.” The measurement date is the first day of the fourth fiscal quarter, or more frequently, if events or circumstances indicate that it is more likely than not that the fair value of a reporting unit or the respective indefinite-lived trade name is less than the carrying value.
15

The following table provides the gross carrying value, accumulated amortization and net carrying value for each major class of intangible asset:

  June 28, 2024September 30, 2023
(in thousands)Weighted Average Useful Life (Years)Gross Carrying ValueAccumulated AmortizationNet Carrying ValueGross Carrying ValueAccumulated AmortizationNet Carrying Value
Amortizable intangible assets:
Customer relationships11$597,717 $(356,530)$241,187 $596,396 $(318,058)$278,338 
Other843,733 (24,732)19,001 43,633 (20,406)23,227 
Total641,450 (381,262)260,188 640,029 (338,464)301,565 
Indefinite-lived intangible assets:
Trade names92,798 — 92,798 92,806 — 92,806 
Total$734,248 $(381,262)$352,986 $732,835 $(338,464)$394,372 

Other intangible assets consist of definite-lived trade names, technology, non-compete agreements and backlogs. Included in the table above are the effects of changes in exchange rates which were not material for the nine months ended June 28, 2024. Amortization expense for the three months ended June 28, 2024 and June 30, 2023 was $13,216 and $15,192, respectively. Amortization expense for the nine months ended June 28, 2024 and June 30, 2023 was $41,904 and $42,778, respectively. Expected amortization expense for intangible assets for the remainder of fiscal 2024 and over the next five years and thereafter is as follows:

(in thousands)
Remaining 2024$12,701 
202543,471 
202640,872 
202739,732 
202829,429 
202928,277 
Thereafter65,706 
Actual amounts of amortization may differ from estimated amounts due to additional intangible asset acquisitions, impairment of intangible assets and other events.
   














16

12. DEBT

Debt as of June 28, 2024 and September 30, 2023 was as follows:

(in thousands)June 28, 2024September 30, 2023
ABL Credit Facility$— $— 
Senior Secured Term Loan Facility due May 26, 2028371,881 371,667 
Senior Notes due June 2031400,000 400,000 
Deferred financing costs(7,581)(8,980)
Long-term debt$764,300 $762,687 

The asset-based credit facility (the “ABL Credit Facility”) has aggregate commitments of $325,000. AII is the borrower under the ABL Credit Facility which is guaranteed by the Company and all other subsidiaries of the Company (other than AII) that are guarantors of the Senior Notes (as defined below). AII’s availability under the ABL Credit Facility was $325,000 as of June 28, 2024 and $322,406 as of September 30, 2023.

The ABL Credit Facility will mature on the earlier of five years from May 26, 2021 or 91 days prior to the maturity date of the New Senior Secured Term Loan Facility if at least $100 million of obligations remain outstanding under the New Senior Secured Term Loan Facility on such date. The ABL Credit Facility uses a forward-looking interest rate based on the Secured Overnight Financing Rate (“SOFR”) consisting of an applicable margin ranging from 1.25% to 1.75% and a credit spread adjustment of 0.10%.

The New Senior Secured Term Loan Facility will mature on May 26, 2028 and borrowings thereunder bearing interest at the rate of forward-looking interest rate based on the “SOFR”, consisting of an applicable margin of 2.00% and a credit spread adjustment of (i) 0.11448% for a one-month interest period, (ii) 0.26161% for a three-month interest period and (iii) 0.42826% for a six-month interest period.

Senior Notes - On May 26, 2021, the Company completed the issuance and sale of the $400.0 million aggregate principal amount of 4.25% Senior Notes due 2031 (the “Senior Notes”) in a private offering. The Senior Notes were sold only to qualified institutional buyers in compliance with Rule 144A of the Securities Act of 1933, as amended (the “Securities Act”), and to non-U.S. persons outside of the United States in compliance with Regulation S of the Securities Act.


13. FAIR VALUE MEASUREMENTS

Certain assets and liabilities are required to be recorded at fair value on a recurring basis.

The Company periodically uses forward currency contracts to hedge the effects of foreign exchange relating to intercompany balances denominated in a foreign currency. These derivative instruments are not formally designated as a hedge by the Company. Short-term forward currency contracts are recorded in either other current assets or other current liabilities and long-term forward currency contracts are recorded in either other long-term assets or other long-term liabilities in the condensed consolidated balance sheet. The fair value gains and losses are included in other expense, net within the condensed consolidated statements of operations. See Note 5, “Other Expense, net” for further detail.

Cash flows associated with derivative financial instruments are recognized in the operating section of the condensed consolidated statements of cash flows. The fair value of forward currency contracts is calculated by reference to current forward exchange rates for contracts with similar maturity profiles.

The Company had no active forward currency contracts or other derivative instruments as of June 28, 2024 or September 30, 2023.



17

The following table presents the Company’s assets and liabilities measured at fair value:

June 28, 2024September 30, 2023
(in thousands)Level 1Level 2Level 1Level 2
Assets
Cash equivalents$214,826 $— $321,282 $— 

The Company’s remaining financial instruments consist primarily of cash, accounts receivable and accounts payable whose carrying value approximate their fair value due to their short-term nature.


The estimated fair value of financial instruments not carried at fair value in the condensed consolidated balance sheets were as follows:

June 28, 2024September 30, 2023
(in thousands)Carrying ValueFair ValueCarrying ValueFair Value
Senior Secured Term Loan Facility due May 26, 2028$373,000 $374,048 $373,000 $372,068 
Senior Notes due June 2031400,000 350,476 400,000 334,368 
Total Debt$773,000 $724,524 $773,000 $706,436 

In determining the approximate fair value of its long-term debt, the Company used the trading values among financial institutions, and these values fall within Level 2 of the fair value hierarchy. The carrying value of the ABL Credit Facility approximates fair value due to it being a market-linked variable rate debt.


14. COMMITMENTS AND CONTINGENCIES

The Company has obligations related to commitments to purchase certain goods. As of June 28, 2024, such obligations were $162,223 for the rest of fiscal year 2024 and $11,483 for fiscal year 2025 and beyond. These amounts represent open purchase orders for materials used in production.

Insurable Liabilities — The Company maintains policies with various insurance companies for its workers’ compensation, product, property, general, auto, and executive liability risks. The insurance policies that the Company maintains have various retention levels and excess coverage limits. The establishment and update of liabilities for unpaid claims, including claims incurred but not reported, is based on management's estimate as a result of the assessment by the Company's claim administrator of each claim and an independent actuarial valuation of the nature and severity of total claims. The Company utilizes a third-party claims administrator to pay claims, track and evaluate actual claims experience, and ensure consistency in the data used in the actuarial valuation.

Legal Contingencies — Historically, a number of lawsuits have been filed against the Company and the Company has also received other claim demand letters alleging that the Company's anti-microbial coated steel sprinkler pipe, which the Company has not manufactured or sold for several years, is incompatible with chlorinated polyvinyl chloride and caused stress cracking in such pipe manufactured by third parties when installed together in the same sprinkler system, which the Company refers to collectively as the “Special Products Claims.” Tyco International Ltd. (“Tyco”), now Johnson Controls, Inc. (“JCI”), has a contractual obligation to indemnify the Company in respect of all remaining and future claims of incompatibility between the Company's antimicrobial coated steel sprinkler pipe and CPVC pipe used in the same sprinkler system. When Special Products Claims arise, JCI has defended and indemnified the Company as required.

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As of the date of this filing, no Special Product Claims are currently pending against the Company as JCI has resolved all claims at their sole cost and expense. Accordingly, at this time, the Company does not expect the outcome of the Special Products Claims proceedings, either individually or in the aggregate, to have a material adverse effect on its business, financial condition, results of operations or cash flows, and the Company believes that its reserves are adequate for all remaining contingencies for Special Products Claims and other product liabilities.

In addition to the matters discussed above, from time to time, the Company is subject to a number of disputes, administrative proceedings and other claims arising out of the ordinary conduct of the Company’s business. These matters generally relate to disputes arising out of the use or installation of the Company’s products, product liability litigation, contract disputes, patent infringement accusations, employment matters, personal injury claims and similar matters. On the basis of information currently available to the Company, it does not believe that existing proceedings and claims will have a material adverse effect on its business, financial condition, results of operations or cash flows. However, litigation is unpredictable, and the Company could incur judgments or enter into settlements for current or future claims that could adversely affect its business, financial condition, results of operations or cash flows.


15. GUARANTEES

The Company had no outstanding letters of credit as of June 28, 2024. The Company also had surety bonds primarily related to performance guarantees on supply agreements and construction contracts, and payment of duties and taxes totaling $38,711 as of June 28, 2024.

In disposing of assets or businesses, the Company often provides representations, warranties and indemnities to cover various risks including unknown damage to the assets, environmental risks involved in the sale of real estate, liability to investigate and remediate environmental contamination at waste disposal sites and manufacturing facilities, and unidentified tax liabilities and legal fees related to periods prior to disposition. The Company does not have the ability to estimate the potential liability from such indemnities because they relate to unknown conditions. However, the Company has no reason to believe that these uncertainties would have a material adverse effect on the Company’s business, financial condition, results of operations or cash flows.

In the normal course of business, the Company is liable for product performance and contract completion. In the opinion of management, such obligations will not have a material adverse effect on the Company’s business, financial condition, results of operations or cash flows.


16. SEGMENT INFORMATION

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.
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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, 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.

Intersegment transactions primarily consist of product sales at designated transfer prices on an arm’s-length basis. Gross profit earned and reported within the segment is eliminated in the Company’s consolidated results. Certain manufacturing and distribution expenses are allocated between the segments on a pro rata basis due to the shared nature of activities. Recorded amounts represent a proportional amount of the quantity of product produced for each segment. Certain assets, such as machinery and equipment and facilities, are not allocated to each segment despite serving both segments. These shared assets are reported within the Safety & Infrastructure segment. The Company allocates certain corporate operating expenses that directly benefit our operating segments, such as insurance and information technology, on a basis that reasonably approximates an estimate of the use of these services.

Three months ended
 June 28, 2024June 30, 2023
(in thousands)External Net SalesIntersegment SalesAdjusted EBITDAExternal Net SalesIntersegment SalesAdjusted EBITDA
Electrical$605,955 $7 $182,568 $705,603 $14 $266,556 
Safety & Infrastructure216,409 615 30,042 213,514 92 21,493 
Eliminations— (622)— (106)
Consolidated operations$822,364 $— $919,117 $— 

Nine months ended
 June 28, 2024June 30, 2023
(in thousands)External Net SalesIntersegment SalesAdjusted EBITDAExternal Net SalesIntersegment SalesAdjusted EBITDA
Electrical$1,790,426 $17 $582,679 $2,025,263 $24 $767,276 
Safety & Infrastructure623,330 1,239 75,084 623,609 310 88,091 
Eliminations— (1,256)— (334)
Consolidated operations$2,413,756 $— $2,648,872 $— 

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Presented below is a reconciliation of operating Segment Adjusted EBITDA to Income before income taxes:
Three months endedNine months ended
(in thousands)June 28, 2024June 30, 2023June 28, 2024June 30, 2023
Operating segment Adjusted EBITDA
Electrical$182,568 $266,556 $582,679 $767,276 
Safety & Infrastructure30,042 21,493 75,084 88,091 
Total$212,610 $288,049 $657,763 $855,367 
Unallocated expenses (a)
(6,485)(17,787)(26,201)(45,218)
Depreciation and amortization(29,932)(30,105)(88,407)(84,671)
Interest expense, net(9,944)(8,682)(26,058)(26,645)
Stock-based compensation(4,488)(5,966)(14,273)(18,100)
Other (b)
(3,813)(5,289)(7,465)(10,906)
Income before income taxes$157,948 $220,219 $495,359 $669,828 
(a) Represents unallocated selling, general and administrative activities and associated expenses including, in part, executive, legal, finance, human resources, information technology, business development and communications, as well as certain costs and earnings of employee-related benefits plans, such as stock-based compensation and a portion of self-insured medical costs.
(b) Represents other items, such as inventory reserves and adjustments, loss on disposal of property, plant and equipment, release of indemnified uncertain tax positions, gain on purchase of business. loss on assets held for sale (includes loss on assets held for sale in Russia. See Note 11, “Goodwill and Intangible Assets” in the form 10-Q filed August 3, 2023 for additional information), realized or unrealized gain (loss) on foreign currency impacts of intercompany loans and related forward currency derivatives, transaction and restructuring costs.


The Company’s net sales by geography were as follows for the three months ended and the nine months ended June 28, 2024 and June 30, 2023:

Three months endedNine months ended
(in thousands)June 28, 2024June 30, 2023June 28, 2024June 30, 2023
United States$719,573 $824,356 $2,128,274 $2,374,005 
Other Americas25,036 27,026 69,947 70,643 
Europe65,632 56,568 181,376 170,387 
Asia-Pacific12,123 11,167 34,159 33,837 
Total$822,364 $919,117 $2,413,756 $2,648,872 

The table below shows the amount of net sales from external customers for each of the Company’s product categories which accounted for 10% or more of consolidated net sales in either period for the three months ended and the nine months ended June 28, 2024 and June 30, 2023:

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Three months endedNine months ended
(in thousands)June 28, 2024June 30, 2023June 28, 2024June 30, 2023
Metal Electrical Conduit and Fittings$137,057 $148,439 $423,993 $387,919 
Electrical Cable & Flexible Conduit128,249 133,414 358,576 386,925 
Plastic Pipe and Conduit238,800 322,966 716,354 962,270 
Other Electrical products (a)
101,849 100,784 291,503 288,149 
Electrical605,955 705,603 1,790,426 2,025,263 
Mechanical Pipe92,052 98,841 265,416 276,342 
Other Safety & Infrastructure products (b)
124,357 114,672 357,914 347,267 
Safety & Infrastructure216,409 213,514 623,330 623,609 
Net sales$822,364 $919,117 $2,413,756 $2,648,872 
(a) Other Electrical products includes International Cable Management, Fiberglass Conduit and Corrosion Resistant Conduit
(b) Other S&I products includes Metal Framing and Fittings, Construction Services, Perimeter Security and Cable Management


17. SUBSEQUENT EVENTS

On July 31, 2024, the Board of Directors declared a quarterly cash dividend of $0.32 per share of common stock payable on August 30, 2024, to stockholders of record on August 20, 2024.
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Item 2. 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 central bank interest rate increases, 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.


RESULTS OF OPERATIONS
    
The consolidated results of operations for the three months ended June 28, 2024 and June 30, 2023 were as follows:

Three months ended
(in thousands)June 28, 2024June 30, 2023Change% Change
Net sales$822,364 $919,117 $(96,753)(10.5)%
Cost of sales542,709 568,316 (25,607)(4.5)%
Gross profit279,655 350,801 (71,146)(20.3)%
Selling, general and administrative97,987 103,019 (5,032)(4.9)%
Intangible asset amortization13,216 15,192 (1,976)(13.0)%
Operating income168,452 232,590 (64,138)(27.6)%
Interest expense, net9,944 8,682 1,262 14.5 %
Other expense, net 560 3,689 (3,129)(84.8)%
Income before income taxes157,948 220,219 (62,271)(28.3)%
Income tax expense34,531 18,931 15,600 82.4 %
Net income$123,417 $201,288 $(77,871)(38.7)%


Net sales
% Change
Volume(0.1)%
Average selling prices(9.5)%
Solar energy tax credits(0.8)%
Foreign exchange(0.1)%
Net sales(10.5)%

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Net sales decreased by $96.8 million or 10.5% to $822.4 million for the three months ended June 28, 2024, compared to $919.1 million for the three months ended June 30, 2023. The decrease in net sales is primarily attributed to decreased average selling prices across the Company’s products of $87.5 million, the increased economic value of solar energy tax credits to be transferred to certain customers of $7.2 million, and decreased sales volume of $1.2 million.

Cost of sales
% Change
Volume0.1 %
Average input costs(0.5)%
Solar energy tax credits(5.1)%
Freight0.9