Atkore Inc. · NYSE:ATKR
Atkore — Atkore International Group — Investor Presentation (February 2020)
26 slides from Atkore's investor presentation, Feb 6, 2020
Slide 1: Investor Presentation & Company Overview February 2020
Investor Presentation & Company Overview February 2020
Slide 2: Cautionary Statements
Cautionary Statements This presentation contains forward-looking statements that are subject to known and unknown risks and uncertainties, many of which are beyond our control. All statements other than statements of historical fact included in this presentation are forward-looking statements. Forwa
Slide 3: Electrical industry leader with strong financial performance
Electrical industry leader with strong financial performance ■ #1 or #2 market positions in most of our product categories Net sales breakdown By reportable segment By end market ■ Offer must-stock products to distribution and OEM customers Mechanical via single integrated platform Products & U.S. S
Slide 4: Performance driven by the Atkore Business System
Performance driven by the Atkore Business System Strategy Fundamental: ■ Market Insights ■ Portfolio Management ■ Innovation/New Product Development ■ Value Propositions ■ Strategic Pricing ■ Active Account and Channel Management People Fundamental: Processes Fundamental: ■ Engagement and Alignment
Slide 5: We manufacture products that are all around you every day
We manufacture products that are all around you every day Wire Basket Cable Tray Armored Cable Cable Electrical Raceway Tray and Fittings: Conduit & Ladder Cable Electrical Metal Electrical Prefabrication Conduit Metal Specialty Electrical Framing & Conduit: Stainless Fittings Steel, PVC-Coated & Al
Slide 6: Broad and growing portfolio provides value to customers
Broad and growing portfolio provides value to customers Value proposition Blue chip customer base Global Electrical Distributors Independent Electrical Distributors ■ Brands and reputation Industrial Distributors ■ Product breadth & Big Box Retail ■ Bundling, co-loading and value-add advantages ■ Qu
Slide 7: Brand reputations built over decades of service to customers
Brand reputations built over decades of service to customers Key brands # of Years in Use Market Categories & Brand Detail Pre-wired armored and metal clad cables, flexible wiring systems, >90 years flexible metal, non-metallic, and flexible metallic liquid tight conduits and fittings. Electrical me
Slide 8: Strong brands and leading market positions anchor portfolio
Strong brands and leading market positions anchor portfolio Leading market positions in each of our major lines of business Rank Market share1 Steel Conduit #2 ~35% PVC Conduit #1 ~35% Raceway Electrical Electrical Armored ~33% Cable #2 In-line Galvanized ~80% Mechanical #1 Tube Metal Mechanical Mec
Slide 9: Driving growth through innovation and portfolio expansion
Driving growth through innovation and portfolio expansion Product innovation and organic growth examples Super Kwik-Couple (SKC) Raintight Conduit BriteRail Product of the Year Category Winner: Product of the Year Category Winner: Conduit, Raceways & Wireways Fasteners, Hangers & Accessories ■ Indus
Slide 10: M&A strategy supporting and enhancing organic growth
M&A strategy supporting and enhancing organic growth Portfolio changes – 2012 to 2019 Added over $400 million in profitable proforma revenue + Built PVC business – acquired Heritage Plastics, Ridgeline Pipe Manufacturing and American Pipe & Plastics + Enhanced size and scale in PVC and Metal Conduit
Slide 11: Disciplined capital approach drives value for stockholders
Disciplined capital approach drives value for stockholders Disciplined approach to capital deployment Manage Reinvest in the Mergers & Return Cash to Leverage Business Acquisitions Stockholders ▪ Target ~2x times for ▪ Maintain and grow ▪ Structured ▪ $50M in stock buyback Net Debt to the business w
Slide 12: Strong business foundation supports future investment
Strong business foundation supports future investment Investment highlights ▪ The Atkore Business System is the foundation of our operating performance ▪ Strong brands and leading market positions in key product categories that are all around you every day ▪ Track record of solid financial and opera
Slide 13: First Quarter 2020
First Quarter 2020 Earnings Presentation As presented on February 4, 2020
Slide 14: Q1 2020 Highlights and Financial Summary
Q1 2020 Highlights and Financial Summary Delivered Net Income of $35M Q1 Q1 Y/Y Change ($’s in millions) 2020 2019 Increased Adjusted EBITDA by 11%, or $7.7M in year over year improvement Net Sales $447.4 $452.0 (1.0%) Operating Income $52.5 $45.7 15.0% Reduced Net Debt/TTM Adjusted EBITDA to 2.1x N
Slide 15: Consolidated Atkore Q1 2020 Bridges
Consolidated Atkore Q1 2020 Bridges Q1 Net Sales Bridge Net Sales Growth Volume/Mix +3.1% $14 $452M $12 $447M Price (6.6%) $1 $30 Acquisitions/Divestitures +2.7% FX/Other (0.2%) Total (1.0%) 2019 Volume/Mix Price M&A FX/Other 2020 Q1 Adjusted EBITDA Bridge Highlights $2 $0 $78M ▪ 3% volume growth wi
Slide 16: Electrical Raceway Q1 Highlights
Electrical Raceway Q1 Highlights Volume growth of 2% led by PVC products Q1 Q1 Y/Y 2020 2019 Change ($’s in millions) Launched three new product lines of diecast Net Sales $341.4 $343.4 (0.6%) fittings Adjusted EBITDA $70.2 $68.5 2.5% Adjusted EBITDA Continue to see above market growth from our 20.6
Slide 17: Mechanical Products & Solutions Q1 Highlights
Mechanical Products & Solutions Q1 Highlights Strong volume growth of ~7% led by continued Q1 Q1 Y/Y ramp of large renewable projects and solid 2020 2019 Change execution across the portfolio ($’s in millions) Net Sales $106.7 $108.8 (2.0%) Adjusted EBITDA margins increased 560 bps Adjusted EBITDA $
Slide 18: Key Balance Sheet and Cash Flow Metrics
Key Balance Sheet and Cash Flow Metrics Metrics Leverage Ratio(2) ($’s in millions) 12/27/2019 Cash and cash equivalents $164.1 Reduced by 0.8x 2.9 2.9 Total Debt $845.2 2.8 Net Debt $681.1 2.6 YTD Net cash from operating activities $52.2 YTD Capital expenditures $9.8 YTD Free cash flow(1) $42.4 2.2
Slide 19: Financial Outlook Summary
Financial Outlook Summary Changes to Q2 2020 FY 2020 FY 2020 Electrical Raceway Volume +1 to 2% - Segment Adjusted EBITDA* $72 - $77M $308 - $318M +$5M / +$5M Volume +1 to 3% - Mechanical Products & Solutions Segment Adjusted EBITDA* $15 - $19M $70 - $75M - Adjusted EBITDA* $80 - $85M $340 - $350M +
Slide 20: Appendix
atkore Appendix a INTERNATIONAL Se
Slide 21: Segment Information
Segment Information Three months ended December 27, 2019 December 28, 2018 Adjusted Adjusted Adjusted EBITDA Adjusted EBITDA (in thousands) Net sales EBITDA Margin Net sales EBITDA Margin Electrical Raceway $ 341,376 $ 70,193 20.6 % $ 343,406 $ 68,489 19.9 % Mechanical Products & Solutions 106,660 1
Slide 22: Adjusted Earnings Per Share Reconciliation
Adjusted Earnings Per Share Reconciliation Consolidated Atkore International Group Inc. Three months ended December 27, December 28, (in thousands, except per share data) 2019 2018 Net income $ 34,790 $ 26,949 Stock-based compensation 3,123 2,982 Intangible asset amortization 8,113 8,214 Other (a) 2
Slide 23: Net Income to Adjusted EBITDA Reconciliation
Net Income to Adjusted EBITDA Reconciliation Consolidated Atkore International Group Inc. Three Months Ended Fiscal Year Ended December December September September September September September (in thousands) 27, 2019 28, 2018 30, 2019 30, 2018 30, 2017 30, 2016 30, 2015 Net income $ 34,790 $ 26,94
Slide 24: Trailing Twelve Month Adjusted EBITDA Reconciliation
Trailing Twelve Month Adjusted EBITDA Reconciliation Consolidated Atkore International Group Inc. TTM Three months ended December 27, December 27, September 30, (in thousands) 2019 2019 2019 June 28, 2019 March 29, 2019 Net income $ 146,892 $ 34,790 $ 45,997 $ 36,550 $ 29,555 Interest expense, net 4
Slide 25: Net Debt to Total Debt and Leverage Ratio
Net Debt to Total Debt and Leverage Ratio Consolidated Atkore International Group Inc. December September March 29, December 28, September ($ in thousands) 27, 2019 30, 2019 June 28, 2019 2019 2018 30, 2018 Short-term debt and current maturities of long-term debt $ — $ — $ — $ — $ 26,561 $ 26,561 Lo
Slide 26: Free Cash Flow Reconciliation
Free Cash Flow Reconciliation Consolidated Atkore International Group Inc. Three months ended (in thousands) December 27, 2019 December 28, 2018 Net cash provided by operating activities $ 52,173 $ 40,277 Capital Expenditures (9,809) (6,875) Free Cash Flow $ 42,364 $ 33,402 26
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