Atkore Inc. · NYSE:ATKR
Atkore — Atkore International Group — Investor Presentation (September 2019)
23 slides from Atkore's investor presentation, Sep 10, 2019
Slide 1: Investor Presentation & Company Overview September 2019
Investor Presentation & Company Overview September 2019
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 ■ Market Intelligence, Benchmarking and VOC Analysis ■ Market-based Evergreen Strategy ■ Dynamic Portfolio Management ■ Dynamic Product Management ■ Active Account and Channel Strategy ■ Culture of Customer Centric Innovation People Process ■
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: Strong brands and leading market positions
Strong brands and leading market positions 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 Mechanical Framing a
Slide 7: Excellent value proposition with a compelling portfolio
Excellent 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 advantages ■ Qu
Slide 8: Balanced and disciplined capital deployment approach
Balanced and disciplined capital deployment approach 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 with ap
Slide 9: Solid track record of M&A success
Solid track record of M&A success 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 – acquired Mergers
Slide 10: 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 ▪ Solid financial and operating results acr
Slide 11: Third Quarter 2019
Third Quarter 2019 Earnings Presentation As presented on August 7, 2019
Slide 12: Consolidated Atkore Q3 2019 Highlights
Consolidated Atkore Q3 2019 Highlights Delivered Adjusted EBITDA above prior Q3 Net Sales Bridge guidance range $498M $3 $13 $493M Volume $2 Solid volume growth in key electrical focus growth in electrical $18 categories offset by project delays in mechanical business Increasing full year Adjusted E
Slide 13: Consolidated Atkore Q3 2019 Financial Summary
Consolidated Atkore Q3 2019 Financial Summary Q3 Q3 Y/Y Net Sales Growth Change Organic Growth (3.1%) ($’s in millions) 2019 2018 Acquisitions/Divestitures +2.5% Net Sales $493.5 $498.0 (0.9%) FX (0.3%) Operating Income $59.2 $55.2 +7.4% Total (0.9%) Net Income $36.6 $34.2 +6.9% Adjusted EBITDA(1) $
Slide 14: Electrical Raceway Q3 Highlights
Electrical Raceway Q3 Highlights Earnings growth driven by productivity Q3 Q3 Y/Y 2019 2018 Change improvements and operational efficiency gains ($’s in millions) Net Sales $373.2 $370.3 +0.8% Two new product introductions in the quarter; Adjusted EBITDA $76.7 $74.5 +3.0% solid volume growth from fo
Slide 15: Mechanical Products & Solutions Q3 Highlights
Mechanical Products & Solutions Q3 Highlights Adjusted EBITDA margin up 770 basis points Q3 Q3 Y/Y 2019 2018 Change from third quarter 2018 ($’s in millions) Net Sales $120.6 $128.2 (6.0%) Focus on margin management Adjusted EBITDA $20.6 $12.0 +71.4% Adjusted EBITDA 17.1% 9.4% +770 bps Operational i
Slide 16: Key Balance Sheet and Cash Flow Metrics
Key Balance Sheet and Cash Flow Metrics Metrics Leverage Ratio(1) ($’s in millions) 6/28/2019 Cash and cash equivalents $100.7 Total Debt $884.5 3.1 Net Debt $783.8 2.9 2.9 2.8 YTD Net cash from operating $120.2 activities 2.6 TTM Adjusted EBITDA(1) $306.7 Leverage Ratio(1) Total debt / TTM Adjusted
Slide 17: 2019 Financial Outlook Summary
2019 Financial Outlook Summary Updated Changes to Q4 2019 FY19 FY19 Electrical Raceway Volume +2% - / (2%) Segment Adjusted EBITDA* $74 - $79M $287 - $292M +$7M / +$2M Volume (1%) - flat (1%) / (2%) Mechanical Products & Solutions Segment Adjusted EBITDA* $13 - $17M $62 - $66M +$5M / +$4M Adjusted E
Slide 18: Appendix
atkore Appendix a INTERNATIONAL Se
Slide 19: Segment Information
Segment Information Three months ended June 28, 2019 June 29, 2018 Adjusted Adjusted EBITDA EBITDA (in thousands) Net sales Adjusted EBITDA Margin Net sales Adjusted EBITDA Margin Electrical Raceway $ 373,229 $ 76,721 20.6 % $ 370,333 $ 74,461 20.1 % Mechanical Products & Solutions 120,596 20,595 17
Slide 20: Adjusted Earnings Per Share Reconciliation
Adjusted Earnings Per Share Reconciliation Consolidated Atkore International Group Inc. Three months ended Nine months ended (in thousands, except per share data) June 28, 2019 June 29, 2018 June 28, 2019 June 29, 2018 Net income $ 36,550 $ 34,199 $ 93,054 $ 103,946 Stock-based compensation 4,120 3,
Slide 21: Net Income to Adjusted EBITDA Reconciliation
Net Income to Adjusted EBITDA Reconciliation Consolidated Atkore International Group Inc. Three months ended Nine months ended (in thousands) June 28, 2019 June 29, 2018 June 28, 2019 June 29, 2018 Net income $ 36,550 $ 34,199 $ 93,054 $ 103,946 Interest expense, net 12,789 12,442 38,277 28,322 Inco
Slide 22: Net Income to Adjusted EBITDA Reconciliation (TTM)
Net Income to Adjusted EBITDA Reconciliation Consolidated Atkore International Group Inc. TTM Three months ended December 28, September 30, (in thousands) June 28, 2019 June 28, 2019 March 29, 2019 2018 2018 Net income $ 125,753 $ 36,550 $ 29,555 $ 26,949 $ 32,699 Interest expense, net 50,649 12,789
Slide 23: Net Debt to Total Debt and Leverage Ratio
Net Debt to Total Debt and Leverage Ratio Consolidated Atkore International Group Inc. June 28, March 29, December 28, September 30, June 29, ($ in thousands) 2019 2019 2018 2018 2018 Short-term debt and current maturities of long- term debt $ — $ — $ 26,561 $ 26,561 $ 7,630 Long-term debt 884,503 8
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