Atkore International Holdings Inc. Announces First Quarter Fiscal Year 2013 Financial Results
Atkore International Holdings Inc. Announces First Quarter Fiscal Year 2013
Financial Results
PR Newswire
HARVEY, Ill., Feb. 8, 2013
HARVEY, Ill., Feb. 8, 2013 /PRNewswire/ -- Atkore International Holdings Inc.
("Atkore International" or the "Company"), a global manufacturer of galvanized
steel tubes and pipes, electrical conduit, armored wire and cable, metal
framing systems and building components, today reported financial results for
their first quarter of fiscal year 2013.
(Logo: http://photos.prnewswire.com/prnh/20111004/CG80459LOGO)
Fiscal Year 2013 First Quarter Financial Highlights
FINANCIAL RESULTS
For the Three Months For the Three
Ended Months Ended Change
December 28, 2012 December 30, 2011
($ in millions)
Net sales $ $ $
385 371 14
Operating income 7 2 5
Adjusted EBITDA 27 19 8
Adjusted Economic 35 34 1
EBITDA
Net Sales
Net sales increased $14 million for the three months ended December 28, 2012
to $385 million from $371 million for the three months ended December 30,
2011. The increase was due primarily to higher volume from our Global Pipe,
Tube and Conduit ("GPTC") products of $24 million, and $5 million of freight
recovery classified as revenue in the current period. This increase was
partially offset by a reduction of $10 million due to lower pricing from GPTC
and an unfavorable foreign currency exchange impact of $4 million primarily as
a result of the appreciation of the U.S. Dollar versus the Brazilian Real.
Operating Income
Operating income increased by $5 million to $7 million for the three months
ended December 28, 2012 compared to $2 million for the three months ended
December 30, 2011. The increase was due primarily to higher gross margins of
$7 million for GPTC products as a result of higher volume and lower average
raw material costs, offset by higher lower selling, general, and
administrative expense of $2 million.
Adjusted EBITDA (Non-GAAP): Adjusted EBITDA was $27 million and $19 million
for the three months ended December 28, 2012 and December 30, 2011,
respectively.
Adjusted Economic EBITDA (Non-GAAP): In the fourth quarter of fiscal year
2012, the Company began including results in terms of Adjusted Economic EBITDA
to evaluate the performance of the Company. Adjusted Economic EBITDA is a
metric used internally by management and differs from Adjusted EBITDA results
by substituting an estimate of the current period, current market steel
materials cost in the Pipe, Tube and Conduit business for the accounting cost,
which is done on a FIFO basis. The Company believes Adjusted Economic EBITDA
provides a more accurate view of the economic performance of the business by
aligning the relationship between pricing and steel cost in the same period.
Use of the FIFO costing method, as we do in our GAAP accounting records,
results in higher spreads when steel costs are rising and lower spreads when
steel costs are falling. The difference may be significant and may result in
distorted performance comparisons. The use of Adjusted Economic EBITDA
eliminates a significant portion of this volatility. Adjusted Economic EBITDA
was $35 million and $34 million for the three months ended December 28, 2012
and December 30, 2011, respectively.
SEGMENT RESULTS
Results of Operations by Segment
Global Pipe, Tube & Conduit
For the Three Months For the Three Months
Ended Ended Change
December 28, 2012 December 30, 2011
($ in millions)
Net sales $ $ $
249 236 13
Operating income 8 1 7
Adjusted EBITDA 17 11 6
Net Sales
Net sales for the three months ended December 28, 2012 increased $13 million
to $249 million from $236 million for the three months ended December 30,
2011. The increase was attributable primarily to higher volume partly offset
by lower average selling prices. The gradually improving non-residential
construction market in North America contributed to higher volumes, up 12%
from the three months ended December 30, 2011. The increase was also
attributable to $5 million of freight recovery, which was classified as
revenue in the current period. Changes in foreign currency exchange rates had
an unfavorable impact of $4 million, primarily as a result of the appreciation
of the U.S. Dollar versus the Brazilian Real.
Operating Income
Operating income for the three months ended December 28, 2012 increased $7
million to $8 million compared to $1 million in the three months ended
December 30, 2011. The increase in operating income was due primarily to
higher volume and lower average raw material steel costs for GPTC products
partly offset by lower average selling prices. Average selling prices were 6%
lower and average raw material steel costs were 11% lower during three months
ended December 28, 2012, compared to the three months ended December 30, 2011.
Global Cable & Cable Management
For the Three For the Three Months
Months Ended Ended Change
December 28, 2012 December, 2011
($ in millions)
$ $ $
Net sales 145 142
3
Operating income 8 12 (4)
Adjusted EBITDA 16 16 —
Net Sales
Net sales increased $3 million to $145 million for the three months ended
December 28, 2012 compared to $142 million for the three months ended December
30, 2011. The increase was attributable to higher volume and selling prices
for Global Cable & Cable Management ("GCCM") products due to gradually
improving non-residential construction markets in North America and
Asia-Pacific.
Operating Income
Operating Income for the three months ended December 28, 2012, decreased $4
million to $8 million compared to $12 million in the three months ended
December 30, 2011. The decrease was due primarily to a $2 million adjustment
to restructuring reserves, a $1 million impairment charge associated with an
asset held for sale and higher average raw material copper prices, offset by a
favorable impact of higher average selling prices for GCCM products.
Conference Call
Atkore International will host a conference call on February 8, 2013 at 10:00
a.m. Eastern Time. The call may be accessed over the telephone at
1-866-803-2143 using the passcode of "Atkore." An audio replay will be
available shortly after the call.
About Atkore International
Atkore International is a global manufacturer of galvanized steel tubes and
pipes, electrical conduit, armored wire and cable, metal framing systems and
building components, serving a wide range of construction, electrical, fire
and security, mechanical and automotive applications. With 3,000 employees and
20 manufacturing and 17 distribution facilities worldwide, Atkore supplies
global customers with innovative solutions and quality products. To learn
more, please visit www.atkore.com.
Cautionary Notice Regarding Forward-Looking Statements
This news release contains statements about future events and expectations
that constitute forward-looking statements within the meaning of Section 27A
of the Securities Exchange Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended, and are subject to the safe
harbor provisions created by statute. Words such as "anticipate," "believe,"
"estimate," "expect," "intend," "plan," "project," "target," "can," "could,"
"may," "should," "will," "would," or similar expressions are intended to
identify such forward-looking statements.
Forward-looking statements are based on our beliefs, assumptions and
expectations of our future financial and operating performance and growth
plans, taking into account the information currently available to us. These
statements are not statements of historical fact. Forward-looking statements
involve risks and uncertainties that may cause our actual results to differ
materially from the expectations of future results we express or imply in any
forward-looking statements, and readers are cautioned not to place undue
reliance on such statements. Factors that could cause actual events or results
to differ materially from the events or results described in any
forward-looking statements include, but are not limited to: the sustained
downturn in the non-residential construction industry; fluctuations in the
price of raw materials; new regulations related to "conflict minerals"; our
reliance on the availability and cost of freight and energy; changes in
governmental regulation, including the National Electrical Code or other
legislation and regulation; risks relating to doing business internationally;
claims for damages for defective products; our ability to generate or raise
capital in the future; risk of material environmental, health and safety
liabilities and obligations; changes in the source and intensity of
competition in business; the level of similar product imports into North
America; our reliance on a small number of customers; work stoppages, employee
strikes and other production disputes; our significant financial obligations
relating to pension plans; unplanned outages at our facilities and other
unforeseen disruptions; our ability to protect and enforce our intellectual
property rights; our ability to attract and retain qualified employees; the
reliability of our information systems; cyber security risks and cyber
incidents; risks inherent in acquisitions and the financing thereof; our
substantial indebtedness and our ability to incur further indebtedness;
limitations on our business under the instruments governing our indebtedness;
risks relating to us operating as a stand-alone company; and the risk that the
benefits from the sale by Tyco International Ltd. of a majority interest in us
to Clayton Dubilier & Rice, LLC and the related transactions may not be fully
realized or may take longer to realize than expected.
You should read carefully the factors described under the section titled "Risk
Factors" in the Company's Form 10-K for the fiscal year ended September 28,
2012, and those described in our other filings with the SEC. These and other
risks, uncertainties and factors could cause our actual results to differ
materially from those projected in any forward-looking statements we make.
These factors may not constitute all factors that could cause actual results
to differ materially. We operate in a continually changing business
environment. New factors emerge from time to time, and it is not possible to
predict all risks that may affect us. We assume no obligation to update or
revise any forward-looking statements for any reason, or to update the reasons
actual results could differ materially from those anticipated in
forward-looking statements, even if new information becomes available in the
future. Comparisons of results for current and any prior periods are not
intended to express any future trends or indications of future performance,
unless expressed as such, and should be viewed as historical data.
Note Concerning Non-GAAP Measurement Tools
We have provided detailed explanations of our non-GAAP financial measures in
our Form 8-K filed this morning, which is available on our website.
Supplemental Schedules
Condensed Consolidated Statements of Operations A
Condensed Consolidated Balance Sheets B
Condensed Consolidated Statements of Cash Flows C
Segment & Geographic Information D
Non-GAAP Financial Measure Reconciliation E & F
Supplemental Schedule A
ATKORE INTERNATIONAL HOLDINGS INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
For the Three For the Three
Months Months
($ in millions)
Ended December 28, Ended December 30,
2012 2011
Net sales $ $
385 371
Costs and expenses
Cost of sales 331 324
Selling, general and administrative 47 45
Operating income 7 2
Interest expense, net 12 12
Loss before income taxes (5) (10)
Income tax benefit 1 3
Loss from continuing operations (4) (7)
Loss from discontinued operations and
disposal, net of income tax benefit of — (1)
$0 and $1, respectively
Net loss $ $
(4) (8)
Supplemental Schedule B
ATKORE INTERNATIONAL HOLDINGS INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
($ in millions, except per share data) December 28, 2012 September 28, 2012
Assets
Current Assets:
Cash and cash equivalents $ $
55 52
Accounts receivable, less allowance
for doubtful accounts of $3 and $3, 196 235
respectively
Receivables due from Tyco 4 9
International Ltd. and its affiliates
Inventories, net 254 237
Assets held for sale 10 11
Prepaid expenses and other current 35 35
assets
Deferred income taxes 22 22
Total current assets 576 601
Property, plant and equipment, net 276 283
Intangible assets, net 262 266
Goodwill 132 132
Deferred income taxes 2 3
Receivables due from Tyco 13 13
International Ltd. and its affiliates
Other assets 30 31
Total Assets $ $ 1,329
1,291
Liabilities and Equity
Current Liabilities:
Short-term debt and current maturities $ $
of long-term debt 6 7
Accounts payable 102 130
Income tax payable 4 4
Accrued and other current liabilities 74 79
Total current liabilities 186 220
Long-term debt 410 410
Deferred income taxes 82 83
Income tax payable 12 13
Pension liabilities 39 40
Other long-term liabilities 14 11
Total Liabilities 743 777
Shareholder's Equity:
Common shares, $.01 par value, 1,000
shares authorized, 100 shares issued — —
and outstanding
Additional paid in capital 605 605
Accumulated deficit (29) (25)
Accumulated other comprehensive loss (28) (28)
Total Shareholder's Equity 548 552
Total Liabilities and Shareholder's $ $ 1,329
Equity 1,291
Supplemental Schedule C
ATKORE INTERNATIONAL HOLDINGS INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
For the Three Months For the Three
Months
($ in millions) Ended
Ended
December 28, 2012
December 30, 2011
Operating activities
Net loss $ $
(4) (8)
Adjustments to reconcile net loss to
net cash provided by (used for)
operating activities:
Loss from discontinued operations and — 1
disposal
Depreciation and amortization 13 13
Amortization of debt issuance costs 2 2
Deferred income taxes (1) (4)
Provision for losses on accounts 1 1
receivable and inventory
Asset impairment charges 1 —
Other items — 1
Changes in operating assets and
liabilities, net of effects from (5) (9)
acquisitions
Net cash provided by (used for) 7 (3)
continuing operating activities
Net cash provided by discontinued — 2
operating activities
Net cash provided by (used for) 7 (1)
operating activities
Investing activities
Capital expenditures (3) (6)
Acquisitions of businesses, net of — (2)
cash acquired
Net cash used for continuing (3) (8)
investing activities
Net cash provided by discontinued — —
investing activities
Net cash used for investing (3) (8)
activities
Financing activities
Borrowings under Credit Facility 38 106
Repayments under Credit Facility (38) (104)
Proceeds from short-term debt 2 1
Repayments of short-term debt (3) —
Net cash (used for) provided by (1) 3
continuing financing activities
Net cash provided by discontinued — —
financing activities
Net cash (used for) provided by (1) 3
provided by financing activities
Effects of foreign exchange rate — —
changes on cash and cash equivalents
Increase (decrease) in cash and cash 3 (6)
equivalents
Cash and cash equivalents at 52 48
beginning of period
Cash and cash equivalents at end of $ $
period 55 42
Supplementary Cash Flow information
Interest paid $ $
— 1
Income taxes paid, net of refunds 1 1
Supplemental Schedule D
ATKORE INTERNTATIONAL HOLDINGS INC.
SEGMENT & GEOGRAPHIC INFORMATION
($ in millions)
(unaudited)
For the Three For the Three
Months Ended Months Ended
December 28, 2012 December 30, 2011
Net sales:
Global Pipe, Tube & Conduit $ $
249 236
Global Cable & Cable Management 145 142
Elimination of intersegment (9) (7)
revenues
$ $
385 371
Operating income (loss):
Global Pipe, Tube & Conduit $ $
8 1
Global Cable & Cable Management 8 12
Corporate and Other (9) (11)
$ $
7 2
For the Three Months Ended For the Three Months Ended
December 28, 2012 December 30, 2011
Net sales:
U.S. $ $
322 306
Other Americas 40 45
Europe 9 10
Asia-Pacific 14 10
$ $
385 371
Supplemental Schedule E
ATKORE INTERNTIONAL HOLDINGS INC.
NON-GAAP FINANCIAL MEASURE RECONCILIATION
(unaudited)
For the Three Months For the Three Months
($ in millions) Ended Ended
December 28, 2012 December 30, 2011
Net (loss) income $ (4) $ (8)
Loss (gain) from discontinued — 2
operations
Tax impact on discontinued — (1)
operations
Net income (loss) from continuing (4) (7)
operations
Add:
Depreciation and amortization 13 13
Interest expense 12 12
(Benefit) expense for income tax (1) (3)
EBITDA 20 15
Add:
Restructuring (1) 2 —
Non-cash share based compensation — —
(2)
Unusual product liability (3) — 1
Non-cash pension expense (4) 1 1
Management fee 2 2
Asset impairment (5) 1 —
Other non-cash items (6) 1 —
Adjusted EBITDA* $ 27 $ 19
Economic EBITDA Adjustment (7) 8 15
Adjusted Economic EBITDA $ 35 $ 34
Global Pipe, Global Cable &
Tube & Cable Corporate Consolidated
Conduit Management
For the For the Three For the Three For the Three
Three Months Months Ended Months Ended Months Ended
($ in millions) Ended December 28, December 28, December 28,
December 28, 2012 2012 2012
2012
Operating income $ $ $ $
(loss) 8 8 (9) 7
Add:
Depreciation and 8 5 — 13
amortization
EBITDA 16 13 (9) 20
Add:
Restructuring (1) — 2 — 2
Non-cash share based — — — —
compensation (2)
Unusual product — — — —
liability (3)
Non-cash pension 1 — — 1
expense (4)
Management fee — — 2 2
Asset impairment (5) — 1 — 1
Other non-cash items — — 1 1
(6)
Adjusted EBITDA* $ $ $ $
17 16 (6) 27
Global Pipe, Global Cable &
Tube & Cable Corporate Consolidated
Conduit Management
For the For the Three For the Three For the Three
Three Months Months Ended Months Ended Months Ended
($ in millions) Ended December 30, December 30, December 30,
December 30, 2011 2011 2011
2011
Operating income $ $ $ $
(loss) 1 12 (11) 2
Add:
Depreciation and 9 4 — 13
amortization
EBITDA 10 16 (11) 15
Add:
Restructuring (1) — — — —
Non-cash share based — — — —
compensation (2)
Unusual product — — 1 1
liability (3)
Non-cash pension 1 — — 1
expense (4)
Management fee — — 2 2
Asset impairment (5) — — — —
Other non-cash items — — — —
(6)
Adjusted EBITDA* $ $ $ $
11 16 (8) 19
Global Pipe, Global Cable &
Tube & Cable Corporate Consolidated
Conduit Management
For the For the For the For the Trailing
Trailing Trailing Trailing Twelve Months
Twelve Months Twelve Months Twelve Months Ended
($ in millions) Ended Ended Ended
December 28,
December 28, December 28, December 28, 2012
2012 2012 2012
Operating income $ 32 $ 59 $ (50) $ 41
(loss)
Add:
Depreciation and 33 17 — 50
amortization
EBITDA 65 76 (50) 91
Add:
Restructuring (1) 1 3 (2) 2
Non-cash share
based compensation — — 1 1
(2)
Unusual product — — 3 3
liability (3)
Non-cash pension 2 1 — 3
expense (4)
Management fee — — 6 6
Asset impairment 6 1 6 13
(5)
Other non-cash 3 1 4 8
items (6)
Adjusted EBITDA* $ 77 $ 82 $ (32) $ 127
For the For the For the
For the Three Three Trailing
Three Months For the Three Months Twelve
(in millions) Months Ended Months Ended Ended Months
Ended March September 28, Ended
30, 2011 June 29, 2012 December
2011 28, 2012 December
28, 2012
$ $ $ $ $
Net income (loss) 4 (1) (4) (4)
(3)
Loss from
discontinued 3 1 — — 4
operations
Tax impact on
discontinued (1) 2 — — 1
operations
Net income (loss)
from continuing 6 — (1) (4) 1
operations
Add:
Depreciation and 12 13 12 13 50
amortization
Interest expense 12 13 11 12 48
Expense (benefit) 3 (6) (4) (1) (8)
for income tax
EBITDA 33 20 18 20 91
Add:
Restructuring (1) — (2) 2 2 2
Non-cash share
based compensation — — 1 — 1
(2)
Unusual product — — 3 — 3
liability (3)
Non-cash pension — 1 1 1 3
expense (4)
Management fee 1 2 1 2 6
Asset impairment — 9 3 1 13
(5)
Other non-cash 3 2 2 1 8
items (6)
$ $ $ $ $
Adjusted EBITDA* 37 31 27 127
32
Economic EBITDA (1) 11 14 8 32
Adjustment (7)
Adjusted Economic $ $ $ $ $
EBITDA 36 45 35 159
43
* Prior period amounts are restated for discontinued operations.
(1) Represents facility exit costs and employee severance and benefit
costs.
(2) Represents the add-back of non-cash compensation expense for restricted
share awards and share options.
(3) Represents the add-back of product liability expense associated with a
discontinued type of sprinkler pipe.
(4) Represents the add-back of pension expense.
Represents asset impairment charges related to an Enterprise Resource
(5) Planning system, intangible assets and goodwill associated with a
manufacturing facility classified as held for sale, and buildings held
for sale.
Other represents the net impact of other non-cash items, including
(6) non-recurring consulting fees, one-time executive severance expense,
and a gain on the sale of fixed assets.
Represents an adjustment to cost of sales in the Pipe, Tube and Conduit
business to substitute an estimate of the current period, current
market steel materials cost for the accounting cost, which is done on a
FIFO basis. The Company believes this adjustment represents a more
accurate view of the economic performance by aligning the relationship
(7) between pricing and steel cost in the same period. Use of the FIFO
costing method, as we do in our GAAP accounting records, results in
higher spreads when steel costs are rising and lower spreads when steel
costs are falling. The difference may be significant and may result in
distorted performance comparisons. The use of Adjusted Economic EBITDA
eliminates a significant portion of this volatility.
Supplemental Schedule F
ATKORE INTERNTIONAL HOLDINGS INC.
NON-GAAP FINANCIAL MEASURE RECONCILIATION
(unaudited)
Consolidated Total Leverage Ratio as of December 28, 2012 is as follows:
($ in millions) December 28, 2012
Senior secured notes due January 1, 2018 $ 410
Asset-based credit facility —
Other 6
Total debt 416
Less cash on-hand (limited to $35 million) (1) (35)
Total Indebtedness (A) $ 381
Total Consolidated EBITDA (B) (2) 127
Total Leverage Ratio (A)/(B) 3.0
(1) As of December 28, 2012, cash and cash equivalents was $55 million.
(2) Total consolidated Adjusted EBITDA for the last 12 months.
SOURCE Atkore International
Website: http://www.atkore.com
Contact: Lisa Winter, Director of Communications, +1-708-225-2453,
lwinter@atkore.com
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