Atkore Inc. · NYSE:ATKR

Atkore — Atkore International Group — Investor Presentation (June 2020)

36 slides from Atkore's investor presentation, Jun 3, 2020

  1. Slide 1: Investor Presentation & Company Overview June 2020

    Investor Presentation & Company Overview June 2020 6/2/2020 © Atkore International, Inc. 1

  2. 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

  3. Slide 3: Atkore: A Compelling Investment

    Atkore: A Compelling Investment A values-based organization with a focus on continuous improvement driven by the Atkore Business System Strong track record of earnings growth, increasing free cash flow and excellent return on capital With a commitment to quality, service and safety, we produce infra

  4. Slide 4: Foundation: Our Values & the Atkore Business System

    Foundation: Our Values & the Atkore Business System ACCOUNTABILITY • TEAMWORK • INTEGRITY • RESPECT • EXCELLENCE ENABLERS Strategy Elements Lean Daily Management • Market Insights How we run the business we have today. • Portfolio Management Strategy Deployment Process • Innovation/New Product Devel

  5. Slide 5: Atkore at a Glance

    Atkore at a Glance Leading Manufacturer of Electrical and Mechanical Products 1959 2016 Harvey, IL ~3,900 65 Founded IPO (NYSE: ATKR) Headquarters Employees Global Facilities FY2019 Financial Highlights FY2019 Net Sales Breakdown, $1.9B Change $ Millions By Segment By Geography By End Market (except

  6. Slide 6: Strong Earnings Growth, Free Cash Flow and ROC%

    Strong Earnings Growth, Free Cash Flow and ROC% Adjusted EBITDA, $M Free Cash Flow, $M Return on Capital (ROC), % +18% CAGR +10% CAGR +1,440 bps 342 175 179 17.0 17.1 324 15.4 272 140 235 12.2 228 114 107 10.7 97 164 2.7 FY2015 FY2016 FY2017 FY2018 FY2019 TTM FY2015 FY2016 FY2017 FY2018 FY2019 TTM F

  7. Slide 7: Our Products Are All Around You Everyday

    Our Products Are All Around You Everyday Wire Basket Cable Related Segment Armored Cable Tray & Fittings Electrical Raceway Mechanical Products & Solutions Flexible Electrical Conduit Electrical & Liquidtight Conduit Prefabrication Cable Tray, Industrial Flexible Ladder & Fittings Electrical Conduit

  8. Slide 8: U.S. Construction Market Review

    U.S. Construction Market Review % of Atkore FY19 Net Sales U.S. Construction End-Market Review By End Market 68% Commercial & . Key sub-categories: Industrial • Offices & Data Centers • Warehouses & Regional Serve a diversified Distribution Facilities • Hotels mix of end-markets Other Intl. 35% • Re

  9. Slide 9: Electrical Raceway Segment

    Electrical Raceway Segment FY 2019 Q2 FY2020 Quick Facts: Net Sales, $M $1,443.5 $339.7 Key Brands: Adjusted EBITDA, $M $292.6 $79.0 Adjusted EBITDA Margin, % 20.3% 23.2% MARKET AND MARKET POSITION • Electrical products that deploy, isolate and protect a structure’s electrical circuitry from the ori

  10. Slide 10: Mechanical Products & Solutions Segment

    Mechanical Products & Solutions Segment FY 2019 Q2 FY2020 Quick Facts: Net Sales, $M $474.3 $116.6 Key Brands: Adjusted EBITDA, $M $70.0 $16.1 Adjusted EBITDA Margin, % 14.8% 13.8% MARKET AND MARKET POSITION • Mechanical products and services that frame, support and secure In-line component parts in

  11. Slide 11: Levers to Drive Organic Growth

    Levers to Drive Organic Growth Organic Growth Drivers Recent Examples & Highlights • Commercialized over 30 new products in the past two Global years Category • Drove high single digit revenue growth in Electrical Raceway “Focused Product Categories” in FY2019 Focused Expansion Digital Product Capab

  12. Slide 12: M&A Strategy Focused on Profitable Growth

    M&A Strategy Focused on Profitable Growth Bolt-On Acquisition Playbook Target Profile Strategy Value Creation QUICK FACTS: . Privately held small to . Strategic fit from a . Leverage global spend for . Spent $285 million of cash on medium sized businesses product or category key raw material input a

  13. Slide 13: Strong Financial Profile Ready for the Future

    Strong Financial Profile Ready for the Future Net Debt to TTM Adjusted EBITDA Debt Structure Down 1.3x Debt Structure As of 3.4x 3/27/20 3.1x 2.9x 2.9x 2.8x Cash and Cash Equivalents $137.2 2.6x 2.2x 2.1x 2.1x Asset Based Loan ($325M) Matures 2021 - Senior Secured 1st Term Loan Matures 2023 $845.7 T

  14. Slide 14: Focused on Environment, Social & Governance

    Focused on Environment, Social & Governance We seek to utilize sustainable business principles and processes that achieve a balance between profitability and protection of all stakeholders, while reducing our impact on the environment and climate. 32% 14% Reduction in recordable Less total water Our

  15. Slide 15: Second Quarter 2020 Earnings Information

    Second Quarter 2020 Earnings Information As Presented on May 5, 2020 6/2/2020 © Atkore International, Inc. 15

  16. Slide 16: Q2 2020 Financial Highlights and Business Update

    Q2 2020 Financial Highlights and Business Update . Delivered Net Income of $39.2M; up 32.6% versus prior year . Increased Adjusted EBITDA(1) by 12.9%, or $9.9M in year over year improvement Q2 2020 Financial . Grew Adjusted EPS(1) by 19.3% up to $0.99 Highlights . Completed $15.0M in stock repurchas

  17. Slide 17: Example Actions & Updates Related to COVID-19

    Example Actions & Updates Related to COVID-19 Employee Health & Safety Business & Operations Management • Stopped all non-essential business travel • Established an Executive Committee task force to manage all aspects of the company’s response to the situation • Required executive level approval for

  18. Slide 18: Q2 Income Statement Summary

    Q2 Income Statement Summary Q2 2020 Q2 2019 Y/Y Change Y/Y % Change ($’s in millions) Net Sales $455.7 $469.3 ($13.7) (2.9%) Operating Income $61.2 $52.5 $8.6 16.4% Net Income $39.2 $29.6 $9.6 32.6% Adjusted EBITDA(1) $87.0 $77.1 $9.9 12.9% Adjusted EBITDA Margin(2) 19.1% 16.4% +270 bps - Net Income

  19. Slide 19: Consolidated Atkore Q2 2020 Bridges

    Consolidated Atkore Q2 2020 Bridges Q2 Net Sales Bridge Net Sales Growth Volume/Mix (0.8%) $469M $11 $456M $4 Price (4.0%) $1 $19 Acquisitions/Divestitures +2.3% FX/Other (0.4%) Total (2.9%) 2019 Volume/Mix Price M&A FX/Other 2020 Q2 Adjusted EBITDA Bridge Highlights $3 $87M $10 $1 . Drove $9.9M of

  20. Slide 20: Electrical Raceway Q2 Highlights

    Electrical Raceway Q2 Highlights . Adjusted EBITDA increased $11.6M, and Q2 2020 Q2 2019 Y/Y Change adjusted EBITDA margins increased 410 bps to ($’s in millions) 23.2% Net Sales $339.7 $353.5 (3.9%) . Volume declines in armored cable and Adjusted EBITDA $79.0 $67.4 17.2% International projects Adju

  21. Slide 21: Mechanical Products & Solutions Q2 Highlights

    Mechanical Products & Solutions Q2 Highlights . Strong volume growth of 8.5% led by continued Q2 2020 Q2 2019 Y/Y Change large renewable energy projects and solid ($’s in millions) execution across the portfolio Net Sales $116.6 $116.2 0.4% . Adjusted EBITDA margins in Q2 were 13.8% and Adjusted EBI

  22. Slide 22: Key Metrics & Liquidity Review

    Key Metrics & Liquidity Review Metrics Liquidity Review ($’s in millions) 3/27/2020 . Senior secured term loan of $845.7M (net of deferred financing Cash and cash equivalents $137.2 costs) due in December 2023 Total Debt $845.7 o No scheduled principal payments prior to maturity Net Debt $708.5 . As

  23. Slide 23: Cash and Leverage Ratio Trends

    Cash and Leverage Ratio Trends +$85.7M vs. Prior Year Cash Review 164.1 . Annually, Q2 cash balance is 137.2 Cash & Cash 123.4 impacted by dual interest payments and dual tax payments Equivalents, 100.7 75.9 that occur during the period $M 51.5 . Other annual items occur during Q2 from a cash outflo

  24. Slide 24: Value Chain & Operating Structure

    Value Chain & Operating Structure Value Chain Review IN BOUND ATKORE ATKORE DISTRIBUTION CUSTOMER OR CHANNEL END-USER SUPPLY CHAIN MANUFACTURING NETWORK DISTRIBUTION OVERVIEW & . Key input categories are . 37 manufacturing sites . 28 Atkore operated . Atkore products are a . Electrical, industrial o

  25. Slide 25: Financial Outlook Summary

    Financial Outlook Summary Information is as presented on May 5, 2020 Primary Operating Assumption . Net Sales decline of ~30% in Q3 and ~15% in Q4 compared to prior year Outlook Items for Changes to Prior 1H FY2020 FY2020 FY2020 Outlook Consolidated Atkore Note / Comment Actual Results Outlook Favor

  26. Slide 26: Thank you for your efforts during this difficult time

    Thank you for your efforts during this difficult time Members of the Construction Community Atkore Employees & Sales Agents • Electrical distribution employees; NAED • Multiple emergency and rush production shipments for #electricalhero metal framing and electrical products in order to support • Ele

  27. Slide 27: Questions? Thank You

    Questions? Thank You 6/2/2020 © Atkore International, Inc. 27

  28. Slide 28: Appendix

    Appendix 6/2/2020 © Atkore International, Inc. 28

  29. Slide 29: Segment Information

    Segment Information Three months ended March 27, 2020 March 29, 2019 Adjusted Adjusted Adjusted EBITDA Adjusted EBITDA (in thousands) Net sales EBITDA Margin Net sales EBITDA Margin Electrical Raceway $ 339,705 $ 78,954 23.2 % $ 353,514 $ 67,375 19.1 % Mechanical Products & Solutions 116,649 16,144

  30. Slide 30: Adjusted Earnings Per Share Reconciliation

    Adjusted Earnings Per Share Reconciliation Three Months Ended Fiscal Year Ended September 30, September 30, (in thousands, except per share data) March 27, 2020 March 29, 2019 2019 2018 Net income $ 39,193 $ 29,555 $ 139,051 $ 136,645 Stock-based compensation 4,523 1,834 11,798 14,664 Intangible ass

  31. Slide 31: Net Income to Adjusted EBITDA Reconciliation

    Net Income to Adjusted EBITDA Reconciliation Three Months Ended Fiscal Year Ended March 27, March 29, September September September September September (in thousands) 2020 2019 30, 2019 30, 2018 30, 2017 30, 2016 30, 2015 Net income $ 39,193 $ 29,555 $ 139,051 $ 136,645 $ 84,639 $ 58,796 $ (4,955) I

  32. Slide 32: TTM Adjusted EBITDA Reconciliation

    TTM Adjusted EBITDA Reconciliation TTM Three months ended March 27, March 27, December September June 28, (in thousands) 2020 2020 27, 2019 30, 2019 2019 Net income $ 156,530 $ 39,193 $ 34,790 $ 45,997 $ 36,550 Interest expense, net 46,169 10,564 10,620 12,196 12,789 Income tax expense 47,651 13,100

  33. Slide 33: Net Debt to Total Debt and Leverage Ratio

    Net Debt to Total Debt and Leverage Ratio March 27, December 27, September 30, June 28, March 29, December 28, September 30, June 29, March 30, ($ in thousands) 2020 2019 2019 2019 2019 2018 2018 2018 2018 Short-term debt and current maturities of long-term debt $ — $ — $ — $ — $ — $ 26,561 $ 26,561

  34. Slide 34: Free Cash Flow Reconciliation

    Free Cash Flow Reconciliation Six months ended March 27, March 29, (in thousands) 2020 2019 Net cash provided by operating activities $ 49,284 $ 42,789 Capital Expenditures (17,139) (14,712) Free Cash Flow $ 32,145 $ 28,077 Trailing Twelve Months Fiscal Year Ended March 27, September September Septe

  35. Slide 35: Return on Capital Calculation

    Return on Capital Calculation Trailing Fiscal Year Ended Twelve Months March 27, September 30, September 30, September 30, September 30, September 30, (in thousands) 2020 2019 2018 2017 2016 2015 Income (Loss) Before Taxes $ 204,181 $ 184,669 $ 166,352 $ 126,125 $ 86,781 $ (7,871) Income Tax Expense

  36. Slide 36: 6/2/2020 © Atkore International, Inc. 36

    6/2/2020 © Atkore International, Inc. 36

Atkore International Group — Investor Presentation (June 2020) on 6ix