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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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