Form 8-K Atkore International For: Aug 02
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E-mailUNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 2, 2016
Atkore International Group Inc.
(Exact name of registrant as specified in its charter)
(Exact name of registrant as specified in its charter)
Delaware | 001-37793 | 90-0631463 | ||
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) | ||
16100 South Lathrop Avenue Harvey, Illinois | 60426 |
(Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code:
(708) 339-1610
Not Applicable
(Former name or former address, if changed since last report)
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 2.02 Results of Operations and Financial Condition.*
On August 2, 2016, Atkore International Group Inc. (the “Company” or “Atkore”) issued a press release, filed as Exhibit 99.1 and incorporated herein by reference, announcing the Company’s financial results for the third fiscal quarter ended June 24, 2016.
The information contained in Item 7.01 concerning the presentation to the Atkore investors is hereby incorporated into this Item 2.02 by reference.
Item 7.01. Regulation FD Disclosure.*
The slide presentation attached hereto as Exhibit 99.2, and incorporated herein by reference, will be presented to certain Atkore investors on August 2, 2016 and may be used by Atkore in various other presentations to investors.
Item 9.01 Financial Statements Exhibits.*
Exhibit No. | Description of Exhibit | ||
99.1 | Press Release, dated August 2, 2016. | ||
99.2 | Presentation to investors, dated August 2, 2016. | ||
* | In accordance with General Instruction B.2 of Form 8-K, the information in Items 2.02 and 7.01 of this Current Report on Form 8-K, including Exhibits 99.1 and 99.2 attached hereto, shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except as shall be expressly set forth by specific reference in such a filing. | ||
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
ATKORE INTERNATIONAL GROUP INC.
By: /s/ Daniel S. Kelly
Daniel S. Kelly
Vice President, General Counsel and Secretary
Vice President, General Counsel and Secretary
Date: August 2, 2016
EXHIBIT INDEX
Exhibit No. | Description of Exhibit | |
99.1 | Press Release, dated August 2, 2016. | |
99.2 | Presentation to investors, dated August 2, 2016. | |
 | Exhibit 99.1 | |
Atkore International Announces Gross Profit Expansion with its Fiscal 2016 Third Quarter Financial Results
• | Net sales of $396 million; Adjusted net sales increased 2.2% on volume growth of 5.3% |
• | Gross profit increased by 41.6% to $111 million |
• | Gross margin expanded by 1,000 basis points to 28.2% |
• | Net income increased 8.3% to $21 million, Adjusted net income increased 34.0% to $26 million |
• | Cash flows from operations increased $55 million to $85 million year-to-date fiscal 2016 |
• | Adjusted EBITDA increased by 44.0% to $67 million |
Adjusted EBITDA margin increased by 490 basis points to 17.0%
• | Basic and diluted Earnings per Share of $0.33; Adjusted Earnings per share increased 35.5% to $0.42 |
• | Leverage ratio improves to 2.2x, down from 3.5x |
HARVEY, IL. - August 2, 2016 (BUSINESS WIRE) - Atkore International Group Inc. (the “Company”) (NYSE: ATKR), a leading manufacturer of Electrical Raceway products primarily for the non-residential construction and renovation markets and Mechanical Products & Solutions for the construction and industrial markets, announced earnings for its fiscal third quarter-ended June 24, 2016 (“third quarter”) of the fiscal year ending September 30, 2016 (“fiscal 2016”).
“We are very pleased with our third quarter results, which generated volume growth and expanded earnings and margins compared to the third quarter of 2015. We were also able to demonstrate our ability to manage and grow margins during a period in which our raw material costs were sequentially increasing, as our gross and Adjusted EBITDA margins expanded sequentially despite incurring higher raw material input prices than in the second quarter of 2016,” said John Williamson, Atkore’s President and CEO. “We are excited to be reporting our results for the first time as a public company following our IPO in June. As we look forward, we remain focused on serving our customers while executing on our strategic priorities to drive growth, expand our margins, and deliver cash flows through our earnings. We are focused on these objectives given our leading market positions, superior customer value proposition, opportunities for product innovation, acquisitions, and importantly, our strong team that is built to outperform,” Williamson added.
2016 Third Quarter Results
Net sales for the third quarter of 2016 decreased to $395.7 million, a decline of 8.5% compared to $432.4 million for the prior-year period.
Adjusted net sales, which exclude the Fence and Sprinkler product lines which the Company exited in the first quarter of fiscal 2016, increased 2.2%, as compared to the third quarter of 2015, driven primarily by 5.3% volume growth.
Gross profit increased by $32.8 million to $111.5 million for the third quarter of 2016, as compared to $78.7 million for the prior-year period. Gross margin expanded from 18.2% in the prior-year period to 28.2% in the third quarter.
SG&A expenses increased $18.5 million, or 40.3%, to $64.4 million for the third quarter, as compared to $45.9 million for the prior-year period. The increase was largely driven by approximately $15 million of costs associated with the Company’s IPO which occurred during the quarter.
Net income increased by $1.6 million, or 8.3%, to $20.6 million for the third quarter, as compared to $19.1 million for the prior-year period. Adjusted net income increased $6.6 million or 34%, as compared to $19.5 million for prior-year period.
Adjusted EBITDA increased by $20.5 million, or 44.0%, to $67.2 million for the third quarter, as compared to $46.7 million for the prior-year period, and Adjusted EBITDA margin increased from 12.1% to 17.0%.
Earnings per share (basic and diluted) on a GAAP basis were $0.33 for the quarter, but were negatively impacted by the aforementioned unusual costs associated with the IPO. Adjusted earnings per share, which exclude certain unusual and non-cash items, such as the IPO-related costs, increased by $0.11, or 35.5% to $0.42 per share for the third quarter as compared to $0.31 per share for the prior-year period.
The Company’s leverage ratio, defined as the ratio of net debt to Adjusted EBITDA on a trailing twelve month basis, improved to 2.2x at June 24, 2016, from 3.5x at September 25, 2015.
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Segment Results
Electrical Raceway
Electrical Raceway net sales increased $8.0 million, or 3.2%, to $259.8 for the third quarter, as compared to $251.9 million for the prior-year period and included volume growth of 5.3%.
Adjusted EBITDA increased $21.3 million, or 68.6%, to $52.4 million for the third quarter, as compared to $31.1 million for the prior-year period and Adjusted EBITDA margin increased from 12.3% to 20.2%.
Mechanical Products & Solutions
MP&S net sales declined $44.4 million, or 24.5%, to $136.5 million for the third quarter, as compared to $180.9 million for the prior-year period. Adjusted net sales, which exclude the Fence and Sprinkler businesses, increased $0.9 million, or 0.7%. Overall, volume grew 5.2% during the quarter.
Adjusted EBITDA increased $0.7 million, or 3.2%, to $23.0 million for the quarter as compared to the prior year. Adjusted EBITDA margin increased to 16.9% from 16.5% in the third quarter of 2015.
2016 Financial Outlook
Mr. Williamson added, “We have confidence in the continued momentum that our business has experienced over the first nine months of the year. For the full year, we now expect 2016 Adjusted EBITDA to be in the range of $226 million to $236 million. The Electrical Raceway segment is expected to contribute between $170 million and $180 million of Adjusted EBITDA while the Mechanical Products & Solutions segment is expected to contribute between $76 million and $86 million.”
Reconciliation of the forward-looking full-year 2016 Adjusted EBITDA outlook is not being provided as the Company does not currently have sufficient data to accurately estimate the variables and individual adjustments for such reconciliation.
Conference Call Information
Atkore management will host a conference call today, August 2, 2016, at 8 a.m. Eastern Time, to discuss the Company’s financial results. The conference call may be accessed by dialing (877) 407-0789 (domestic) or (201) 689-8562 (international). The call will be available for replay until August 16, 2016. The replay can be accessed by dialing (877) 870-5176, or for international callers, (858) 384-5517. The passcode for the live call and the replay is 13641141.
Interested investors and other parties can also listen to a webcast of the live conference call by logging onto the Investor Relations section of the Company's website at http://investors.atkore.com/. The online replay will be available on the same website immediately following the call.
To learn more about the Company please visit the company's website at http://investors.atkore.com/
About Atkore International Group Inc.
Atkore International Group Inc. is a leading manufacturer of Electrical Raceway products primarily for the non-residential construction and renovation markets and Mechanical Products & Solutions for the construction and industrial markets. The Company manufactures a broad range of end-to-end integrated products and solutions that are critical to its customers’ businesses and employs approximately 3,100 people at 51 manufacturing and distribution facilities worldwide. The Company is headquartered in Harvey, Illinois.
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Contact:
Atkore International Group Inc.
Lisa Winter
Director - Corporate Communications
708-225-2453
Solebury Communications Group
Kevin Doherty
Managing Director
203-428-3233
Forward-Looking Statements
This press release contains “forward-looking statements” within the meaning of the Federal Private Securities Litigation Reform Act of 1995. Forward-looking statements include, but are not limited to, statements relating to financial outlook. Some of the forward-looking statements can be identified by the use of forward-looking terms such as “believes,” “expects,” “may,” “will,” “shall,” “should,” “would,” “could,” “seeks,” “aims,” “projects,” “is optimistic,” “intends,” “plans,” “estimates,” “anticipates” or other comparable terms. Forward-looking statements include, without limitation, all matters that are not historical facts. Forward-looking statements are subject to known and unknown risks and uncertainties, many of which may be beyond our control. We caution you that forward-looking statements are not guarantees of future performance or outcomes and that actual performance and outcomes, including, without limitation, our actual results of operations, financial condition and liquidity, and the development of the market in which we operate, may differ materially from those made in or suggested by the forward-looking statements contained in this press release. In addition, even if our results of operations, financial condition and cash flows, and the development of the market in which we operate, are consistent with the forward-looking statements contained in this press release, those results or developments may not be indicative of results or developments in subsequent periods.
A number of important factors, including, without limitation, the risks and uncertainties discussed under the caption “Risk Factors” in our final prospectus filed pursuant to Rule 424(b)(4) under the Securities Act of 1933, as amended, filed with the U.S. Securities and Exchange Commission on June 10, 2016 (Registration No. 333-209940) could cause actual results and outcomes to differ materially from those reflected in the forward-looking statements. Additional factors that could cause actual results and outcomes to differ from those reflected in forward-looking statements include, without limitation: declines in, and uncertainty regarding, the general business and economic conditions in the U.S. and international markets in which we operate; weakness or another downturn in the U.S. non-residential construction industry; changes in prices of raw materials; pricing pressure, reduced profitability, or loss of market share due to intense competition; availability and cost of third-party freight carriers and energy; high levels of imports of products similar to those manufactured by us; changes in federal, state, local and international governmental regulations and trade policies; adverse weather conditions; failure to generate sufficient cash flow from operations or to raise sufficient funds in the capital markets to satisfy existing obligations and support the development of our business; increased costs relating to future capital and operating expenditures to maintain compliance with environmental, health and safety laws; reduced spending by, deterioration in the financial condition of, or other adverse developments with respect to, one or more of our top customers; increases in our working capital needs, which are substantial and fluctuate based on economic activity and the market prices for our main raw materials, including as a result of failure to collect, or delays in the collection of, cash from the sale of manufactured products; work stoppage or other interruptions of production at our facilities as a result of disputes under existing collective bargaining agreements with labor unions or in connection with negotiations of new collective bargaining agreements, as a result of supplier financial distress, or for other reasons; challenges attracting and retaining key personnel or high-quality employees; changes in our financial obligations relating to pension plans that we maintain in the United States; reduced production or distribution capacity due to interruptions in the operations of our facilities or those of our key suppliers; loss of a substantial number of our third-party agents or distributors or a dramatic deviation from the amount of sales they generate; security threats, attacks, or other disruptions to our information systems, or failure to comply with complex network security, data privacy and other legal obligations or the failure to protect sensitive information; possible
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impairment of goodwill or other long-lived assets as a result of future triggering events, such as declines in our cash flow projections or customer demand; safety and labor risks associated with the manufacture and in the testing of our products; product liability, construction defect and warranty claims and litigation relating to our various products, as well as government inquiries and investigations, and consumer, employment, tort and other legal proceedings; our ability to protect our intellectual property and other material proprietary rights; risks inherent in doing business internationally; our inability to introduce new products effectively or implement our innovation strategies; the inability of our customers to pay off the credit lines extended to them by us in a timely manner and the negative impact on customer relations resulting from our collections efforts with respect to non-paying or slow-paying customers; the incurrence of liabilities and the issuance of additional debt or equity in connection with acquisitions, joint ventures or divestitures; failure to manage acquisitions successfully, including identifying, evaluating, and valuing acquisition targets and integrating acquired companies, businesses or assets; the incurrence of liabilities in connection with violations of the FCPA and similar foreign anti-corruption laws; the incurrence of additional expenses, increase in complexity of our supply chain and potential damage to our reputation with customers resulting from regulations related to “conflict minerals”; disruptions or impediments to the receipt of sufficient raw materials resulting from various anti-terrorism security measures; restrictions contained in our debt agreements; failure to generate cash sufficient to pay the principal of, interest on, or other amounts due on our debt; the significant influence our majority stockholder will have over corporate decisions; and other factors described in this report and from time to time in documents that we file with the U.S. Securities and Exchange Commission.
Non-GAAP Financial Information
This press release includes certain financial information, not prepared in accordance with Generally Accepted Accounting Principles (“GAAP”) in the United States. Because not all companies calculate non-GAAP financial information identically (or at all), the presentations herein may not be comparable to other similarly titled measures used by other companies. Further, these measures should not be considered substitutes for the performance measures derived in accordance with GAAP. See non-GAAP reconciliations below in this press release for a reconciliation of these measures to the most directly comparable GAAP financial measures.
Adjusted Net Sales
We present Adjusted net sales to facilitate comparisons of reported net sales from period to period within our MP&S segment. In August 2015, we announced plans to exit Fence and Sprinkler in order to re-align our long-term strategic focus. Management uses Adjusted net sales to evaluate our ongoing business operations, which no longer include Fence and Sprinkler. We define Adjusted net sales as reported net sales excluding net sales directly attributable to Fence and Sprinkler.
Adjusted EBITDA and Adjusted EBITDA Margin
We use Adjusted EBITDA and Adjusted EBITDA Margin in evaluating the performance of our business. We use Adjusted EBITDA and Adjusted EBITDA Margin in the preparation of our annual operating budgets and as indicators of business performance. We believe Adjusted EBITDA and Adjusted EBITDA Margin allow us to readily view operating trends, perform analytical comparisons and identify strategies to improve operating performance. We define Adjusted EBITDA as net income before: depreciation and amortization, loss or (gain) on extinguishment of debt, interest expense (net), income tax expense (benefit), restructuring and impairments, net periodic pension benefit cost, stock-based compensation, impact from anti-microbial coated sprinkler pipe, or “ABF,” product liability, consulting fees, legal settlements, transaction costs, other items, and the impact from our Fence and Sprinkler exit. We believe Adjusted EBITDA, when presented in conjunction with comparable GAAP measures, is useful for investors because management uses Adjusted EBITDA in evaluating the performance of our business. We define Adjusted EBITDA Margin as Adjusted EBITDA as a percentage of Adjusted net sales.
Adjusted Net Income and Adjusted Earnings per Share
We use Adjusted net income and Adjusted earnings per share in evaluating the performance of our business. Management believes that these measures provide useful information to investors by offering additional ways of viewing the Company’s results that, when reconciled to the corresponding GAAP measure provide an indication of performance excluding the impact of unusual and or non-cash items. We define Adjusted net income as net income (loss) before consulting fees, transaction costs and other items. We define Adjusted earnings per share as basic and diluted earnings per share excluding the per share impact of consulting fees, transaction costs, other items, and the impact from our Fence and Sprinkler exit.
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Leverage Ratio - Net debt/Last Twelve Months Adjusted EBITDA
We define leverage ratio as the ratio of net debt (total debt less cash and cash equivalents) over Adjusted EBITDA on a trailing twelve month basis. We believe the leverage ratio is useful to investors as an alternative liquidity measure.
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ATKORE INTERNATIONAL GROUP INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except per share data) | Three Months Ended | Nine Months Ended | |||||||||||||
June 24, 2016 | June 26, 2015 | June 24, 2016 | June 26, 2015 | ||||||||||||
Net sales | $ | 395,724 | $ | 432,367 | $ | 1,107,145 | $ | 1,291,354 | |||||||
Cost of sales | 284,203 | 353,619 | 831,805 | 1,089,395 | |||||||||||
Gross profit | 111,521 | 78,748 | 275,340 | 201,959 | |||||||||||
Selling, general and administrative | 64,392 | 45,912 | 162,412 | 130,691 | |||||||||||
Intangible asset amortization | 5,566 | 5,249 | 16,655 | 15,775 | |||||||||||
Operating income | 41,563 | 27,587 | 96,273 | 55,493 | |||||||||||
Interest expense, net | 10,169 | 11,212 | 30,617 | 33,624 | |||||||||||
Gain on extinguishment of debt | — | — | (1,661 | ) | — | ||||||||||
Income from operations before income taxes | 31,394 | 16,375 | 67,317 | 21,869 | |||||||||||
Income tax expense (benefit) | 10,749 | (2,683 | ) | 24,093 | (227 | ) | |||||||||
Net income | $ | 20,645 | $ | 19,058 | $ | 43,224 | $ | 22,096 | |||||||
Weighted Average Common Shares Outstanding | |||||||||||||||
Basic and Diluted | 62,492 | 62,513 | 62,491 | 62,528 | |||||||||||
Net income per share | |||||||||||||||
Basic and Diluted | $ | 0.33 | $ | 0.30 | $ | 0.69 | $ | 0.35 | |||||||
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ATKORE INTERNATIONAL GROUP INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(in thousands, except share and per share data) | June 24, 2016 | September 25, 2015 | |||||
Assets | |||||||
Current Assets: | |||||||
Cash and cash equivalents | $ | 131,109 | $ | 80,598 | |||
Accounts receivable, less allowance for doubtful accounts of $1,301 and $1,173, respectively | 235,812 | 216,992 | |||||
Inventories, net | 164,302 | 161,924 | |||||
Assets held for sale | 8,474 | 3,313 | |||||
Prepaid expenses and other current assets | 18,098 | 18,665 | |||||
Total current assets | 557,795 | 481,492 | |||||
Property, plant and equipment, net | 209,248 | 224,284 | |||||
Intangible assets, net | 260,520 | 277,175 | |||||
Goodwill | 115,829 | 115,829 | |||||
Deferred income taxes | 2,307 | 1,087 | |||||
Non-trade receivables | 14,517 | 13,932 | |||||
Total Assets | $ | 1,160,216 | $ | 1,113,799 | |||
Liabilities and Equity | |||||||
Current Liabilities: | |||||||
Short-term debt and current maturities of long-term debt | $ | 1,267 | $ | 2,864 | |||
Accounts payable | 112,095 | 109,847 | |||||
Income tax payable | 5,390 | 515 | |||||
Accrued and other current liabilities | 92,317 | 97,272 | |||||
Total current liabilities | 211,069 | 210,498 | |||||
Long-term debt | 630,204 | 649,344 | |||||
Deferred income taxes | 18,749 | 14,557 | |||||
Other long-term tax liabilities | 13,235 | 13,319 | |||||
Pension liabilities | 27,592 | 28,126 | |||||
Other long-term liabilities | 59,489 | 41,678 | |||||
Total Liabilities | 960,338 | 957,522 | |||||
Equity: | |||||||
Common stock, $0.01 par value, 1,000,000,000 shares authorized, 62,458,367 and 62,453,437 shares issued and outstanding, respectively | 626 | 626 | |||||
Treasury stock, held at cost, 260,900 and 260,900 shares, respectively | (2,580 | ) | (2,580 | ) | |||
Additional paid-in capital | 352,557 | 352,505 | |||||
Accumulated deficit | (130,017 | ) | (173,241 | ) | |||
Accumulated other comprehensive loss | (20,708 | ) | (21,033 | ) | |||
Total Equity | 199,878 | 156,277 | |||||
Total Liabilities and Equity | $ | 1,160,216 | $ | 1,113,799 | |||
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ATKORE INTERNATIONAL GROUP INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Nine months ended | |||||||
(in thousands) | June 24, 2016 | June 26, 2015 | |||||
Operating activities: | |||||||
Net income | $ | 43,224 | $ | 22,096 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Loss on sale of fixed assets | 12 | 1,054 | |||||
Depreciation and amortization | 40,064 | 43,373 | |||||
Amortization of debt issuance costs and original issue discount | 2,644 | 2,722 | |||||
Deferred income taxes | 2,951 | (481 | ) | ||||
Gain on extinguishment of debt | (1,661 | ) | — | ||||
Provision for losses on accounts receivable and inventory | 2,718 | 574 | |||||
Stock based compensation expense | 16,897 | 2,462 | |||||
Other adjustments to net income | (648 | ) | — | ||||
Changes in operating assets and liabilities, net of effects from acquisitions | (21,183 | ) | (41,577 | ) | |||
Net cash provided by operating activities | 85,018 | 30,223 | |||||
Investing activities: | |||||||
Capital expenditures | (13,496 | ) | (20,555 | ) | |||
Proceeds from sale of properties and equipment | 62 | 23 | |||||
Acquisitions of businesses, net of cash acquired | — | (31,290 | ) | ||||
Proceeds from sale of other assets | 458 | 2,300 | |||||
Proceeds from sale of a discontinued operation | — | 4,540 | |||||
Other, net | — | (192 | ) | ||||
Net cash used for investing activities | (12,976 | ) | (45,174 | ) | |||
Financing activities: | |||||||
Borrowings under credit facility | — | 589,000 | |||||
Repayments under credit facility | — | (570,000 | ) | ||||
Proceeds from short-term debt | — | 1,692 | |||||
Repayments of short-term debt | (1,619 | ) | (1,619 | ) | |||
Repayments of long-term debt | (20,075 | ) | (3,150 | ) | |||
Issuance of common shares | 52 | — | |||||
Payment for debt financing costs and fees | — | (102 | ) | ||||
Proceeds from foreign exchange forward option | — | 999 | |||||
Other, net | (25 | ) | (544 | ) | |||
Net cash (used for) provided by financing activities | (21,667 | ) | 16,276 | ||||
Effects of foreign exchange rate changes on cash and cash equivalents | 136 | (1,846 | ) | ||||
Increase (decrease) in cash and cash equivalents | 50,511 | (521 | ) | ||||
Cash and cash equivalents at beginning of period | 80,598 | 33,360 | |||||
Cash and cash equivalents at end of period | $ | 131,109 | $ | 32,839 | |||
Supplementary Cash Flow information | |||||||
Interest paid | $ | 30,232 | $ | 31,003 | |||
Income taxes paid, net of refunds | 16,036 | 3,718 | |||||
Capital expenditures, not yet paid | 406 | 738 | |||||
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ATKORE INTERNATIONAL GROUP INC.
ADJUSTED EBITDA
(Unaudited)
Three Months Ended | Nine months ended | |||||||||||||||
(in thousands) | June 24, 2016 | June 26, 2015 | June 24, 2016 | June 26, 2015 | ||||||||||||
Net income | $ | 20,645 | $ | 19,058 | $ | 43,224 | $ | 22,096 | ||||||||
Depreciation and amortization | 13,322 | 14,349 | 40,064 | 43,373 | ||||||||||||
Gain on extinguishment of debt | — | — | (1,661 | ) | — | |||||||||||
Interest expense, net | 10,169 | 11,212 | 30,617 | 33,624 | ||||||||||||
Income tax expense (benefit) | 10,749 | (2,683 | ) | 24,093 | (227 | ) | ||||||||||
Restructuring & impairments | 326 | 475 | 2,395 | 642 | ||||||||||||
Net periodic pension benefit cost | 110 | 144 | 330 | 434 | ||||||||||||
Stock-based compensation | 4,854 | 661 | 16,897 | 2,462 | ||||||||||||
ABF product liability impact | 212 | 561 | 637 | 1,683 | ||||||||||||
Consulting fee | 13,675 | 875 | 15,425 | 2,625 | ||||||||||||
Legal settlements | 1,300 | — | 1,300 | — | ||||||||||||
Transaction costs (a) | 1,917 | 2,876 | 5,348 | 4,030 | ||||||||||||
Other (b) | (10,055 | ) | 2,560 | (5,842 | ) | 4,330 | ||||||||||
Impact of Fence and Sprinkler exit | — | (3,401 | ) | 811 | (5,121 | ) | ||||||||||
Adjusted EBITDA | $ | 67,224 | $ | 46,687 | $ | 173,638 | $ | 109,951 | ||||||||
(a) Represents costs associated with the Company's initial public offering and acquisition and divestiture-related activities. | ||||||||||||||||
(b) Represents other items, such as lower-of-cost-or-market inventory adjustments and the impact of foreign exchange gains or losses related to our divestiture in Brazil. | ||||||||||||||||
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ATKORE INTERNATIONAL GROUP INC.
GAAP TO NON-GAAP RECONCILIATIONS
(Unaudited)
ATKORE INTERNATIONAL GROUP INC. - ADJUSTED NET SALES RECONCILIATION | ||||||||||||||
Three Months Ended | ||||||||||||||
($ in thousands) | June 24, 2016 | June 26, 2015 | Change | % Change | ||||||||||
Net sales | $ | 395,724 | $ | 432,367 | $ | (36,643 | ) | (8.5 | )% | |||||
Impact of Fence and Sprinkler exit | — | (45,298 | ) | 45,298 | * | |||||||||
Adjusted net sales | $ | 395,724 | $ | 387,069 | $ | 8,655 | 2.2 | % | ||||||
* Not meaningful | ||||||||||||||
MECHANICAL PRODUCTS & SOLUTIONS - ADJUSTED NET SALES RECONCILIATION | ||||||||||||||
Three Months Ended | ||||||||||||||
($ in thousands) | June 24, 2016 | June 26, 2015 | Change | % Change | ||||||||||
Net sales | $ | 136,482 | $ | 180,863 | $ | (44,381 | ) | (24.5 | )% | |||||
Impact of Fence and Sprinkler exit | (45,298 | ) | 45,298 | * | ||||||||||
Adjusted net sales | $ | 136,482 | $ | 135,565 | $ | 917 | 0.7 | % | ||||||
* Not meaningful | ||||||||||||||
ATKORE INTERNATIONAL GROUP INC. | |||||||||||||||
ADJUSTED NET INCOME AND ADJUSTED EARNINGS PER SHARE RECONCILIATION | |||||||||||||||
Three Months Ended | Nine months ended | ||||||||||||||
(in thousands, except per share data) | June 24, 2016 | June 26, 2015 | June 24, 2016 | June 26, 2015 | |||||||||||
Net income | $ | 20,645 | $ | 19,058 | $ | 43,224 | $ | 22,096 | |||||||
Weighted average shares outstanding (Basic and Diluted) | 62,492 | 62,513 | 62,491 | 62,528 | |||||||||||
Basic and Diluted net income per share - as reported | $ | 0.33 | $ | 0.30 | $ | 0.69 | $ | 0.35 | |||||||
Net income | $ | 20,645 | $ | 19,058 | $ | 43,224 | $ | 22,096 | |||||||
Stock-based compensation | 4,854 | 661 | 16,897 | 2,462 | |||||||||||
Consulting fee | 13,675 | 875 | 15,425 | 2,625 | |||||||||||
Other (a) | (10,055 | ) | 2,560 | (5,842 | ) | 4,330 | |||||||||
Impact of Fence and Sprinkler exit | — | (3,401 | ) | 811 | (5,121 | ) | |||||||||
Pre-tax adjustments to net income | 8,474 | 695 | 27,291 | 4,296 | |||||||||||
Tax effect @ 35% | (2,966 | ) | (243 | ) | (9,552 | ) | (1,504 | ) | |||||||
Adjusted net income | $ | 26,153 | $ | 19,510 | $ | 60,963 | $ | 24,888 | |||||||
Basic and Diluted net income per share - as adjusted | $ | 0.42 | $ | 0.31 | $ | 0.98 | $ | 0.40 | |||||||
(a) Represents other items, such as lower-of-cost-or-market inventory adjustments and the impact of foreign exchange gains or losses related to our divestiture in Brazil. | |||||||||||||||
10
ATKORE INTERNATIONAL GROUP INC.
NET DEBT/LTM ADJUSTED EBITDA RECONCILIATIONS
(Unaudited)
($ in thousands) | June 24, 2016 | March 25, 2016 | December 25, 2015 | September 25, 2015 | |||||||||||
Short-term debt and current maturities of long-term debt | $ | 1,267 | $ | 1,881 | $ | 2,531 | $ | 2,864 | |||||||
Long-term debt | 630,204 | 630,369 | 649,203 | 649,344 | |||||||||||
Total Debt | 631,471 | 632,250 | 651,734 | 652,208 | |||||||||||
Less cash and cash equivalents | 131,109 | 134,477 | 127,210 | 80,598 | |||||||||||
Net Debt | $ | 500,362 | $ | 497,773 | $ | 524,524 | $ | 571,610 | |||||||
LTM Adjusted EBITDA | $ | 227,637 | $ | 207,100 | $ | 184,852 | $ | 163,949 | |||||||
Net debt/LTM Adjusted EBITDA | 2.2 | 2.4 | 2.8 | 3.5 | |||||||||||
11
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Third Quarter Fiscal 2016 Earnings Presentation
August 2016
1
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. Forward-looking statements appearing throughout this presentation include, without limitation, statements regarding our intentions, beliefs,
assumptions or current expectations concerning, among other things, financial position; results of operations; cash flows; prospects; growth strategies or expectations; customer retention; the outcome (by
judgment or settlement) and costs of legal, administrative or regulatory proceedings, investigations or inspections, including, without limitation, collective, representative or class action litigation; and the impact
of prevailing economic conditions. You can identify forward-looking statements by the fact that they do not relate strictly to historical or current facts. These statements may include words such as “believes,”
“expects,” “may,” “will,” “shall,” “should,” “would,” “could,” “seeks,” “aims,” “projects,” “is optimistic,” “intends,” “plans,” “estimates,” “anticipates” and other comparable terms. We caution you that forward-looking
statements are not guarantees of future performance or outcomes and that actual performance and outcomes, including, without limitation, our actual results of operations, financial condition and liquidity, and
the development of the market in which we operate, may differ materially from those made in or suggested by the forward-looking statements contained in this presentation. In addition, even if our results of
operations, financial condition and cash flows, and the development of the market in which we operate, are consistent with the forward-looking statements contained in this presentation, those results or
developments may not be indicative of results or developments in subsequent periods. A number of important factors, including, without limitation, the risks and uncertainties discussed under the captions “Risk
Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the final prospectus filed pursuant to Rule 424(b)(4) of the Securities Act of 1933, as amended, filed
with the U.S. Securities and Exchange Commission on June 10, 2016 (File No. 333-209940), could cause actual results and outcomes to differ materially from those reflected in the forward-looking statements.
Because of these risks, we caution that you should not place undue reliance on any of our forward-looking statements. New risks and uncertainties arise from time to time, and it is impossible for us to predict
those events or how they may affect us. Further, any forward-looking statement speaks only as of the date on which it is made. We undertake no obligation to revise the forward-looking statements in this
presentation after the date of this presentation.
Market data and industry information used throughout this presentation are based on management’s knowledge of the industry and the good faith estimates of management. We also relied, to the extent
available, upon management’s review of independent industry surveys, forecasts and publications and other publicly available information prepared by a number of third party sources. All of the market data
and industry information used in this presentation involves a number of assumptions and limitations which we believe to be reasonable, and you are cautioned not to give undue weight to such estimates.
Although we believe that these sources are reliable, we cannot guarantee the accuracy or completeness of this information, and we have not independently verified this information. While we believe the
estimated market position, market opportunity and market size information included in this presentation are generally reliable, such information, which is derived in part from management’s estimates and
beliefs, is inherently uncertain and imprecise. Projections, assumptions and estimates of our future performance and the future performance of the industry in which we operate are subject to a high degree of
uncertainty and risk due to a variety of factors, including those described above. These and other factors could cause results to differ materially from those expressed in our estimates and beliefs and in the
estimates prepared by independent parties.
We present Adjusted net sales, Adjusted EBITDA. Adjusted EBITDA margin, Adjusted net income, Adjusted earnings per share, and Leverage ratio (net debt over Adjusted EBITDA on a trailing twelve month
basis) to help us describe our operating and financial performance. Adjusted net sales, Adjusted EBITDA, Adjusted EBITDA margin, Adjusted net income, Adjusted earnings per share, and Leverage ratio are
non-GAAP financial measures commonly used in our industry and have certain limitations and should not be construed as alternatives to net income, net sales and other income data measures (as determined
in accordance with generally accepted accounting principles in the United States, or GAAP), or as better indicators of operating performance. Adjusted net sales, Adjusted EBITDA, Adjusted EBITDA margin,
Adjusted net income , Adjusted earnings per share and Leverage ratio, as defined by us may not be comparable to similar non-GAAP measures presented by other issuers. Our presentation of such measures
should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items. See the appendix to this presentation for a reconciliation of Adjusted net sales to net sales,
Adjusted EBITDA to net income, Adjusted net income to net income, Adjusted earnings per share to earnings per share, and net debt over Adjusted EBITDA on a trailing twelve month basis.
We have a 52- or 53-week fiscal year that ends on the last Friday in September. Fiscal 2015, 2014 and 2013 were 52-week fiscal years which ended on September 25, 2015, September 26, 2014 and
September 27, 2013, respectively. Our next fiscal year will end on September 30, 2016, and will be a 53-week year. Our fiscal quarters end on the last Friday in December, March and June.
.
Company introduction &
strategic overview
3
OEM
18%
Int'l
7%
Other
5%
U.S.
Construction
70%
Leading Electrical Raceway and Mechanical Products & Solutions provider
■ #1 or #2 market positions in most of our products1
■ Offer must-stock products to distribution and OEM
customers via single integrated platform
■ Established reputation as an industry leader in
quality, availability, delivery, value and innovation
■ Organized into two complementary segments:
Electrical Raceway and Mechanical Products &
Solutions (“MP&S”)
■ U.S.-centric player with large addressable market
and close adjacent opportunities
FY 2015 net sales
By reportable segment2 By end market
Addressable market opportunity3
$1B4
$13
Bil
li
o
n
Electrical
raceway
market
$78
Billio
n
U.S. electrical
products
market
$500M4
$3.8
Billio
n
U.S. mechanical
products &
solutions market
Electrical Raceway Mechanical Products & Solutions
1 Based on U.S. Adjusted net sales. Excludes impact of the exit of our Fence and Sprinkler product lines.
2 Split based on FY 2015 Adjusted net sales.
3 Management estimates based on market data and industry knowledge.
4 Atkore management estimates based on U.S. Adjusted net sales relative to the estimated U.S. addressable market size.
Mechanical
Products &
Solutions
35%
Electrical
Raceway
65%
4
$67
$86
$107
9.0% 8.9%
10.6%
0.06
0.08
0.1
0.12
0.14
0.16
0.18
FY 2013 FY 2014 FY 2015
Adjusted EBITDA Adjusted EBITDA Margin
PVC Electrical
Conduit & Fittings
27%
Armored Cable &
Fittings
33%
Other
8%
Metal Electrical
Conduit & Fittings
32%
Atkore’s Electrical Raceway segment
FY2015 net sales by product category
Adjusted EBITDA evolution ($mm)
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 12,000 U.S. electrical distributor
branches
■ Range of solutions offers customers convenient and efficient
purchasing
■ Unique ability to co-load and bundle Electrical Raceway
products provides substantial competitive advantage
■ Industry leading quality, availability, delivery and innovation
Core products and market positions
Principal brands:
Armored Cable
PVC Conduit
Steel Conduit
#1 #1 #1
Flexible and
Liquidtight Conduit
Cable Tray, Cable
Ladder & Fittings
#3 #3
1
1 Other represents total Electrical Raceway net sales for FY2015 ($1,005mm) less Armored Cables & Fittings ($332mm), Metal Electrical Conduit & Fittings ($320mm) and PVC
Electrical Conduit & Fittings ($270mm).
FY2015 Net Sales: $1,005.6 mm
5
Metal Framing
and Fittings
32%
Mechanical
Pipe
53%
Other
15%
■ Comprehensive offering of metal framing and in-line galvanized
mechanical tube
■ Offer critical combination of metal framing, value-added fittings
and construction services to industrial and electrical distributors
■ ~60% of framing used to mount Electrical Raceway products
■ One of only two companies in the U.S. that manufacture and
market in-line galvanized mechanical tube on a national basis
■ 90% of in-line galvanized tubular products are sold directly or
indirectly to OEMs
Atkore’s Mechanical Products & Solutions segment
FY2015 Adjusted net sales by product category
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
Core products and market positions
Principal brands:
Metal Framing &
Related Fittings
In-Line Galvanized
Mechanical Tube
#1 #2
Historical financial performance
$63
$60
$80
11.8%
11.0%
14.6%
0.08
0.1
0.12
0.14
0.16
0.18
0.2
FY 2013 FY 2014 FY 2015
Adjusted EBITDA ($mm) Adjusted EBITDA Margin
1
1 Other represents total MP&S Adjusted net sales for FY2015 ($546mm) less Mechanical Pipe ($287mm) and Metal Framing and Fittings ($175mm).
FY2015 Net sales $724.8 mm
FY2015 Adjusted net sales $546.2 mm
6
Atkore’s significant transformation and current strategy
■ Limited strategic vision
■ Little customer coordination
■ Underperforming leadership
■ No growth or M&A strategy
2011 2011 - 2015 Atkore strategy
■ Leading market positions/brands
■ Upgraded over 90% of leadership
■ Developed clear strategy
■ Implemented Atkore Business System
(“ABS”)
■ Transformed portfolio (6 acquisitions,
4 divestitures and 4 closures)
■ Invested in new product development
■ Improved quality, delivery & service
■ Reduced fixed overhead
■ Drive growth
− Market position expansion
− New product innovation
− M&A growth execution
■ Expand margin
− Strategic and tactical pricing
− Mix driven by innovation and pricing
− Raw material and material usage savings
− Manufacturing productivity savings
− Volume leverage
■ Deliver cash flow
− Strong cash flow from earnings
− Disciplined CapEx deployment
− Efficient Working Capital Management
7
Built on a Foundation to Perform
Strategic Deployment Process (“SDP”) – Core
management process with long term focus and short
term objectives to identify top strategic initiatives and
targets in order to create the business we aspire to
become
Lean Daily Management (“LDM”) – Delivers customer
value through support and leadership to those who are
closest to the process to manage and sustain the
business we have today
“To be the customer’s first choice for electrical raceway and mechanical products & solutions, by providing
unmatched quality, delivery, and value based on sustainable excellence in strategy, people and processes.”
Strategy
Process
People
■ Talent assessment
and acquisition
■ Talent engagement
and development
■ Aligned incentives
and compensation
■ Resource
deployment and
allocation analysis
■ Market Intelligence and
analysis
■ Portfolio analysis
■ Business development
■ “Evergreen” strategy
■ Product management
■ Culture of innovation
■ Lean production
system
■ Lean transactional
process excellence
■ Commercial
excellence
■ Supply chain
excellence
Third quarter fiscal 2016
review
9
Atkore – Third quarter fiscal 2016 highlights
■ Net sales of $396 million down 8.5%, Adjusted net
sales $396 million up 2.2%*
■ Volume increase of $20 million or 5.3%
■ Net income of $21 million, up 8.3%; Adjusted net
income of $26 million up 34%
■ Gross margin up 1,000 basis points, Adjusted
EBITDA margin up 490 basis points year over year*
■ Gross profit up 41.6% to $112 million
■ Operating income up 50.7% to $42 million
■ Basic and Diluted EPS up 10% to $0.33
■ Adjusted EPS up 35.5% to $0.42
■ On a sequential basis, Q3 2016 vs. Q2 2016:
■ Volume growth of 9.1%
■ Gross profit up 22.0%
■ Gross margin up 230 basis points
* Compared to the third quarter of 2015 and adjusted to exclude the impact of the Fence and Sprinkler product lines
1. Net sales were $432mm and $396mm for the fiscal third quarter 2015 and 2016, respectively. Net sales were $1,291.4mm and $1,107.1mm for the nine
months year-to-date 2015 and 2016, respectively.
2. Net income was $19.1mm and $20.6mm for the fiscal third quarter 2015 and 2016, respectively. Net income was $22.1mm and $43.2mm for the nine
months year-to-date 2015 and 2016, respectively.
-
200
400
600
800
1,000
1,200
1,400
Q3'15 Q3'16 YTD 15 YTD 16
Adjusted Net Sales 1
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
Q3'15 Q3'16 YTD 15 YTD 16
Adjusted EBITDA Margin 2
10
Electrical Raceway segment – Third quarter fiscal 2016 highlights
Electrical Raceway
■Net sales of $260 million, up 3.2%
■Adjusted EBITDA of $52 million, up 68.6%
■Adjusted EBITDA margin of 20.2%, up 790
basis points
■ Customer service driving ability to support
pricing benefit and margin expansion
■ Volume growth of 5.3%
■Sequential quarter increases in average
selling prices
Steel Conduit
PVC Conduit
Armored Cable
Flexible and
Liquidtight Conduit
Cable Tray, Cable
Ladder & Fittings
-
100
200
300
400
500
600
700
800
Q3'15 Q3'16 YTD 15 YTD 16
Net Sales
0%
5%
10%
15%
20%
25%
Q3'15 Q3'16 YTD 15 YTD 16
Adjusted EBITDA Margin
11
Mechanical Products & Solutions segment – Third quarter fiscal 2016 highlights
■ Net sales of $136 million, down 24.5%, while Adjusted
net sales of $136 million, up 0.7%*
■ Volume growth of 5.2% from international sales and
construction services
■ Exited Fence and Sprinkler product lines in 1Q16
■ Adjusted EBITDA of $23 million, up 3.2%
■ Decline in raw material costs outpaced lowered
average selling prices
■ Process improvement gains from lower freight and
warehouse costs
■ Adjusted EBITDA margin of 16.9%, up 40 basis points*
■ Process improvement gains from lower freight &
warehouse costs
* Compared to the third quarter of fiscal 2015 and adjusted to exclude the impact of the Fence and Sprinkler product lines
1. Net sales were $180.9mm and $136.5mm for the fiscal quarter 2015 and 2016, respectively. Net sales were $541.2mm
and $393.9mm for the nine months year-to-date 2015 and 2016, respectively.
Metal Framing &
Related Fittings
In-Line Galvanized
Mechanical Tube
-
50
100
150
200
250
300
350
400
450
Q3'15 Q3'16 YTD 15 YTD 16
Adjusted Net Sales 1
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
Q3'15 Q3'16 YTD 15 YTD 16
Adjusted EBITDA Margin
12
Key Balance Sheet and Cash Flow Metrics
($mm)
6/24/2016
Cash and cash equivalents $131.1
Long term debt $630.2
CapEx* $13.5
Net cash from operating activities* $85.0
LTM Adjusted EBITDA $227.6
LTM Adjusted EBITDA less Capital Expenditures $204.3
Leverage Ratio
Total debt / LTM Adjusted EBITDA 2.8x
Net debt / LTM Adjusted EBITDA 2.2x
Interest Coverage 6.7x
Metrics Net debt / Adjusted EBITDA
• As of nine months ended June 24, 2016
1. Leverage ratio is defined as net debt (total debt less cash and cash equivalents) divided by the trailing twelve month Adjusted EBITDA. Total
debt was $652.2mm, $651.7mm, $632.3mm and $631.5mm, as of September 25, 2015, December 25, 2015, March 25, 2016 and June 24,
2016, respectively. Cash and cash equivalents were $80.6mm, $127.2mm, $134.5mm and $131.1mm as of September 25, 2015, December
25, 2015, March 25, 2016 and June 24, 2016, respectively.
3.5x
2.8x
2.4x
2.2x
LTM 9/25/2015 LTM 12/25/2015 LTM 3/25/2016 LTM 6/24/2016
Net Debt / Adjusted EBITDA 1
Outlook and Summary
14
2016 Financial Outlook
■ Adjusted EBITDA – $226 million to $236 million*
■ Volume growth between 4% - 8% in the fourth quarter
■ Segment Details
■ Electrical Raceway – Adjusted EBITDA $170 million to $180 million
■ MP&S – Adjusted EBITDA $76 million to $86 million
■ Capital expenditures – $22.0 million
■ Interest Expense – $41 million
■ Tax Rate – 36%
* Reconciliation of the forward-looking full-year 2016 Adjusted EBITDA outlook is not being provided as the Company does not currently have sufficient data to
accurately estimate the variables and individual adjustments for such reconciliation.
15
Atkore’s key attributes – Strong company with growth upside
Leading market positions and strong brands
Superior customer value proposition with a compelling portfolio
Significant scale providing barriers to entry
Attractive growth strategy
Strong platform for growth across attractive end-markets
Incremental product innovation and M&A growth drivers
Strong profitability and cash flow profile with future runway
Team built to outperform
Appendix
17
Adjusted net sales reconciliation
A
B
C
D
E
F
G
H
Consolidated Atkore International Group Inc.
Mechanical Products & Solutions
ATKORE INTERNATIONAL GROUP INC. - ADJUSTED NET SALES RECONCILIATION
Three Months Ended
($ in thousands) June 24, 2016 June 26, 2015 Change % Change
Net sales $ 395,724 $ 432,367 $ (36,643 ) (8.5 )%
Impact of Fence and Sprinkler exit — (45,298 ) 45,298 *
Adjusted net sales $ 395,724 $ 387,069 $ 8,655 2.2 %
* Not meaningful
MECHANICAL PRODUCTS & SOLUTIONS - ADJUSTED NET SALES RECONCILIATION
Three Months Ended
($ in thousands) June 24, 2016 June 26, 2015 Change % Change
Net sales $ 136,482 $ 180,863 $ (44,381 ) (24.5 )%
Impact of Fence and Sprinkler exit (45,298 ) 45,298 *
Adjusted net sales $ 136,482 $ 135,565 $ 917 0.7 %
* Not meaningful
18
Adjusted earnings per share reconciliation
A
B
C
D
E
F
G
H
Consolidated Atkore International Group Inc.
ADJUSTED NET INCOME AND ADJUSTED EARNINGS PER SHARE RECONCILIATION
Three Months Ended Nine months ended
(in thousands, except per share data) June 24, 2016 June 26, 2015 June 24, 2016 June 26, 2015
Net income $ 20,645 $ 19,058 $ 43,224 $ 22,096
Weighted average shares outstanding (Basic and
Diluted) 62,492
62,513
62,491
62,528
Basic and Diluted net income per share - as reported $ 0.33
$ 0.30
$ 0.69
$ 0.35
Net income $ 20,645 $ 19,058 $ 43,224 $ 22,096
Stock-based compensation 4,854 661 16,897 2,462
Consulting fee 13,675 875 15,425 2,625
Other (a) (10,055 ) 2,560 (5,842 ) 4,330
Impact of Fence and Sprinkler exit — (3,401 ) 811 (5,121 )
Pre-tax adjustments to net income 8,474 695 27,291 4,296
Tax effect @ 35% (2,966 ) (243 ) (9,552 ) (1,504 )
Adjusted net income $ 26,153 $ 19,510 $ 60,963 $ 24,888
Basic and Diluted net income per share - as adjusted $ 0.42
$ 0.31
$ 0.98
$ 0.40
a) Represents other items, such as lower-of-cost-or-market adjustments
19
Net Income to Adjusted EBITDA reconciliation
A
B
C
D
E
F
G
H
Presented below is a reconciliation of net income to Adjusted EBITDA
Three Months Ended Nine months ended
(in thousands) June 24, 2016 June 26, 2015 June 24, 2016 June 26, 2015
Net income $ 20,645 $ 19,058 $ 43,224 $ 22,096
Depreciation and amortization 13,322 14,349 40,064 43,373
Gain on extinguishment of debt — — (1,661 ) —
Interest expense, net 10,169 11,212 30,617 33,624
Income tax expense (benefit) 10,749 (2,683 ) 24,093 (227 )
Restructuring & impairments 326 475 2,395 642
Net periodic pension benefit cost 110 144 330 434
Stock-based compensation 4,854 661 16,897 2,462
ABF product liability impact 212 561 637 1,683
Consulting fee 13,675 875 15,425 2,625
Legal settlements 1,300 — 1,300 —
Transaction costs (a) 1,917 2,876 5,348 4,030
Other (b) (10,055 ) 2,560 (5,842 ) 4,330
Impact of Fence and Sprinkler exit — (3,401 ) 811 (5,121 )
Adjusted EBITDA $ 67,224 $ 46,687 $ 173,638 $ 109,951
(a) Represents costs associated with our initial public offering, acquisition and divestiture-related activities.
(
(b) Represents other items, such as lower-of-cost-or-market adjustments.
20
Net debt / LTM Adjusted EBITDA reconciliation
A
B
C
D
E
F
G
H
ATKORE INTERNATIONAL GROUP INC.
NET DEBT/LTM ADJUSTED EBITDA RECONCILIATIONS
(Unaudited)
($ in thousands) June 24, 2016 March 25, 2016
December 25,
2015
September 25,
2015
Short-term debt and current maturities of long-
term debt $ 1,267
$ 1,881
$ 2,531
$ 2,864
Long-term debt 630,204 630,369 649,203 649,344
Total Debt 631,471 632,250 651,734 652,208
Less cash and cash equivalents 131,109 134,477 127,210 80,598
Net Debt $ 500,362 $ 497,773 $ 524,524 $ 571,610
LTM Adjusted EBITDA $ 227,637 $ 207,100 $ 184,852 $ 163,949
Net debt/LTM Adjusted EBITDA 2.2 2.4 2.8 3.5
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