Atkore Inc. · NYSE:ATKR
Atkore — Atkore International Group — Q1 2019 Earnings Presentation
29 slides from Atkore's earnings presentation, Feb 20, 2019
Slide 1: First Quarter 2019 Overview
Astor First Quarter 2019 Overview
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: Consolidated Atkore Q1 2019 Highlights
Consolidated Atkore Q1 2019 Highlights Q1 Net Sales Bridge Execution continued to deliver strong $8 $452M year over year earnings growth $40 $0 $415M $11 Distributor Organic net sales growth of 7% with volume / Rebate Push / Mix mix strength in key product categories 2018 Volume / Mix Price M&A FX 2
Slide 4: Consolidated Atkore Q1 2019 Financial Summary
Consolidated Atkore Q1 2019 Financial Summary Q1 Q1 Y/Y Net Sales Growth Change Organic Growth +7.0% ($’s in millions) 2019 2018 Acquisitions/Divestitures +2.0% Net Sales $452.0 $414.6 +9.0% FX +0.0% Net Income $26.9 $27.2 (0.9%) Total +9.0% Adjusted EBITDA(1) $70.0 $58.5 +19.7% Net Income Margin 6.
Slide 5: Electrical Raceway Q1 Highlights
Electrical Raceway Q1 Highlights Strong volume / mix performance in key Q1 Q1 Y/Y 2019 2018 Change product categories, but calendar yearend ($’s in millions) distributor rebate buy-in lighter than last year Net Sales $343.4 $316.5 8.5% Adjusted EBITDA $68.5 $56.2 22.0% Market activity continues to s
Slide 6: Mechanical Products & Solutions Q1 Highlights
Mechanical Products & Solutions Q1 Highlights Q1 Q1 Y/Y 2019 2018 Change Strong pricing execution in the quarter ($’s in millions) Net Sales $108.8 $98.6 10.4% Macro indicators continue to support Industrial vertical growth Adjusted EBITDA $10.9 $10.8 +0.7% Adjusted EBITDA 10.0% 11.0% (100 bps) Adju
Slide 7: Key Balance Sheet and Cash Flow Metrics
Key Balance Sheet and Cash Flow Metrics Metrics Leverage Ratio(1) ($mm) 12/28/2018 Cash and cash equivalents $75.9 Total Debt $904.7 3.4 Net Debt $828.7 Vergokan Acquisition and Share Repurchases 3.1 YTD Net cash from operating $40.3 activities 2.9 2.9 TTM Adjusted EBITDA(1) $283.1 Leverage Ratio(1)
Slide 8: 2019 Financial Outlook Summary
2019 Financial Outlook Summary Updated Changes to Q2 2019 FY19 FY19 Electrical Raceway Volume +2 to 4% n/a Segment Adjusted EBITDA* $65 - $70M $270 - $290M +$5M / +$5M Mechanical Products & Volume +2 to 4% -2% / -1% Solutions Segment Adjusted EBITDA* $13 - $15M $55 - $60M n/a / +$2M Adjusted EBITDA*
Slide 9: Appendix
atkore Appendix a= INTERNATIONAL —EE
Slide 10: Segment Information
Segment Information Three months ended December 28, 2018 December 29, 2017 Adjusted Adjusted Adjusted EBITDA Adjusted EBITDA (in thousands) Net sales EBITDA Margin Net sales EBITDA Margin Electrical Raceway $ 343,406 $ 68,489 19.9 % $ 316,523 $ 56,160 17.7 % Mechanical Products & Solutions 108,813 $
Slide 11: Adjusted earnings per share reconciliation
Adjusted earnings per share reconciliation Consolidated Atkore International Group Inc. Three months ended (in thousands, except per share data) December 28, 2018 December 29, 2017 Net income $ 26,949 $ 27,189 Stock-based compensation 2,982 3,564 Intangible asset amortization 8,214 8,687 Other (a) 2
Slide 12: Net Income to Adjusted EBITDA reconciliation
Net Income to Adjusted EBITDA reconciliation Consolidated Atkore International Group Inc. Three months ended (in thousands) December 28, 2018 December 29, 2017 Net income $ 26,949 $ 27,189 Interest expense, net 12,160 6,594 Income tax expense 8,154 2,516 Depreciation and amortization 18,021 17,210 R
Slide 13: Net Income to Adjusted EBITDA reconciliation (TTM)
Net Income to Adjusted EBITDA reconciliation Consolidated Atkore International Group Inc. TTM Three months ended December 28, December 28, September 30, March 30, (in thousands) 2018 2018 2018 June 29, 2018 2018 Net income $ 136,405 $ 26,949 $ 32,699 $ 34,199 $ 42,558 Interest expense, net 46,260 12
Slide 14: Net Debt to Total Debt and Leverage Ratio
Net Debt to Total Debt and Leverage Ratio Consolidated Atkore International Group Inc. December 28, September 30, September 30, September 30, September 25, ($ in thousands) 2018 2018 2017 2016 2015 Short-term debt and current maturities of long-term debt $ 26,561 $ 26,561 $ 4,215 $ 1,267 $ 2,864 Lon
Slide 15: Overview
atkore Overiew a= INTERNATIONAL —EE
Slide 16: Atkore Overview
Atkore Overview ■ #1 or #2 market positions in most of our products Net Sales Breakdown By reportable segment By end market ■ Offer must-stock products to distribution and OEM customers Mechanical Other via single integrated platform Products & Int'l 6% Solutions 9% 26% ■ Established reputation as a
Slide 17: Atkore Overview: Atkore Business System Strategy
Atkore Overview: Atkore Business System Strategy ■ Market Intelligence, Benchmarking and VOC Analysis How we continuously improve ■ Market-based Evergreen Strategy ■ Dynamic Portfolio Management the business we have, and ■ Dynamic Product Management create breakthrough to be the ■ Active Account and
Slide 18: Atkore All Around You
Atkore All Around you 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 & Aluminum Flexible Electrical Conduit P
Slide 19: Atkore's Electrical Raceway segment
Atkore’ Electrical Raceway segment Products that deploy, isolate and protect a structure’s electrical circuitry from the original power source to the final outlet ■ Must-stock products for over 13,000 U.S. electrical distributor 2018 net sales by product category branches PVC Electrical Metal Electr
Slide 20: Atkore's Mechanical Products & Solutions segment
Atkore’s Mechanical Products & Solutions segment Products and services that frame, support and secure component parts in a broad range of structures, equipment and systems in electrical, industrial and construction applications ■ Comprehensive offering of metal framing and in-line galvanized FY 2018
Slide 21: Investment highlights
Investment highlights 1 Leading market positions and strong brands 2 Superior customer value proposition with a compelling portfolio Strong company 3 Significant scale providing barriers to entry 4 Focused growth strategy to attack substantial market opportunity a.a Capitalize on attractive end-mark
Slide 22: Leading market positions and strong brands
1 Leading market positions and strong brands Leading market positions in each of our core businesses Rank Market share1 Steel Conduit #2 35% PVC Conduit #1 35% Armored 32% Cable #2 In-line Galvanized 80% Mechanical #1 Tube Metal Framing and #2 21% Related Fittings 1 Management estimates based on mar
Slide 23: Superior customer value proposition with a compelling portfolio
2 Superior customer value proposition with a compelling portfolio 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 advan
Slide 24: Significant scale providing barriers to entry
3 Significant scale providing barriers to entry Industry-leading scale that allows us to provide: Manufacturing and distribution footprint well-positioned in ✓ the largest electrical products markets across the U.S. Broad portfolio of products, enabling us to deliver integrated source-to-outlet elec
Slide 25: Capitalize on attractive end-market growth dynamics
4a Capitalize on attractive end-market growth dynamics Atkore is geared to U.S. non-residential construction FY 2018 net sales U.S. construction by end market Infrastructure 5% New residential construction U.S. construction 16% Other 69% New non- 6% residential construction 56% International 9% MR&R
Slide 26: Grow market share with new and existing customers
4b Grow market share with new and existing customers Strategy ✓ Segment by 15 SBUs ✓ Incentivize each SBU General Manager to serve and grow with top All customers customers ✓ Provide each SBU with necessary resources All All strategic enabled by ABS by enabled business units business Constant improv
Slide 27: Expand product offering through innovation
Expand product offering through innovation Robust new product pipeline catalyzing incremental growth ✓ 80+ total new products in the pipeline (all stages) ✓ 14 new products launched in 2018 ✓ KoreFit Prefab Device Assemblies Focused on products delivering labor efficiencies and products in high-grow
Slide 28: Pursue M&A to deliver incremental growth
4e Pursue M&A to deliver incremental growth Robust M&A capability... ...developed through a history of successful acquisitions ■ 12 acquisitions and 8 divestitures / closures completed 2011 2013 2014 2017 2019 since 2011 ■ Proven ability to integrate acquisitions Year 1 - Strong track record of iden
Slide 29: Strong profitability with clear runway for further improvement
5 Strong profitability with clear runway for further improvement Illustrative Atkore Adjusted EBITDA margin opportunity Potential upside from key initiatives Strategic pricing and mix Continued roll-out of strategic pricing to 20%+ both Electrical Raceway and MP&S Purchasing standard work Produc
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