Atkore International Group Inc. Announces Second Quarter 2019 Results

• Diluted earnings per share decreased by $0.18 to $0.61; Adjusted net
  income per diluted share increased by $0.20 to $0.83
• Net income decreased by $13.0 million, or 30.6%, to $29.6 million;
  Adjusted EBITDA increased by $11.8 million, or 18.0%, to $77.1 million
• Full-year Adjusted EBITDA guidance increased to $300.0 million –
  $310.0 million
• Full-year Adjusted net income per diluted share guidance increased to
  $3.25 – $3.40

HARVEY, Ill.–(BUSINESS WIRE)–Atkore International Group Inc. (the “Company” or “Atkore”) (NYSE: ATKR)
announced earnings for its fiscal 2019 second quarter ended March 29,
2019.

“Atkore again produced strong quarterly results with net sales and
Adjusted EBITDA growth of 5% and 18% year over year, respectively,”
commented Bill Waltz, President and Chief Executive Officer of Atkore.
“Our primary focus on serving customers with the right products and
solutions is a catalyst that has enabled us to raise our full year
guidance for a second time this year and deliver upon our commitments to
our shareholders.”

2019 Second Quarter Results

Net sales increased by $24.3 million, or 5.5%, to $469.3 million for the
three months ended March 29, 2019 compared to $445.0 million for the
three months ended March 30, 2018. Net sales increased by $28.0 million
primarily due to increased average market prices for all product
categories and the pass-through impact of higher average input costs of
steel, copper, and freight. Additionally, net sales increased by $10.8
million due to the acquisition of Vergokan International NV (“Vergokan”)
over the past twelve months, partly offset by a decrease in net sales of
$4.5 million from the sale of the assets of FlexHead Industries, Inc.
and SprinkFLEX, LLC (together “FlexHead”) in the second quarter of
fiscal 2018. The increase in net sales was partially offset by lower
volume of $6.5 million primarily in the metal conduit and fittings
product category sold within the Electrical Raceway segment and in the
mechanical pipe product category sold within the Mechanical Products &
Solutions segment.

Gross profit increased by $7.9 million, or 7.3%, to $117.1 million for
the three months ended March 29, 2019, as compared to $109.2 million for
the prior-year period. Gross margin increased to 24.9% for the three
months ended March 29, 2019, as compared to 24.5% for the prior-year
period. Gross margin increased primarily due to implemented pricing
strategies and favorable product mix.

Net income decreased by $13.0 million, or 30.6%, to $29.6 million for
the three months ended March 29, 2019 compared to $42.6 million for the
prior-year period primarily due to the fiscal 2018 pre-tax gain of 26.7
million on the sale of the assets FlexHead, partially offset by higher
operating income of $11.3 million.

Adjusted EBITDA increased by $11.8 million, or 18.0%, to $77.1 million
for the three months ended March 29, 2019 compared to $65.3 million for
the three months ended March 30, 2018. The increase was primarily due to
higher gross profit.

Diluted earnings per share on a GAAP basis was $0.61 for the three
months ended March 29, 2019, as compared to $0.79 in the prior-year
period primarily due to the prior year gain on the sale of FlexHead.
Adjusted net income per diluted share increased by $0.20 to $0.83 for
the three months ended March 29, 2019, as compared to $0.63 for the
prior-year period primarily due to higher gross profit.

Segment Results

Electrical Raceway

Net sales increased by $28.7 million, or 8.8%, to $353.5 million for the
three months ended March 29, 2019 compared to $324.8 million for the
three months ended March 30, 2018. The increase was primarily due to
increased average market prices for the metal electrical conduit and
fittings product category of $15.1 million. Additionally, sales
increased $10.8 million as a result of the acquisition of Vergokan
during fiscal 2019. Lastly, sales increased $5.9 million due to higher
volume, primarily in the cable wire product category. The increase in
net sales was partially offset by foreign exchange losses of $3.4
million and by lower volume in the metal conduit and fittings product
category.

Adjusted EBITDA for the three months ended March 29, 2019 increased by
$11.0 million, or 19.5%, to $67.4 million from $56.4 million for the
three months ended March 30, 2018. Adjusted EBITDA margins increased to
19.1% for the three months ended March 29, 2019 compared to 17.4% for
the three months ended March 30, 2018. The increase in Adjusted EBITDA
was largely due to pricing strategies and favorable product mix.

Mechanical Products & Solutions (“MP&S”)

Net sales decreased by $4.1 million, or 3.4%, to $116.2 million for the
three months ended March 29, 2019 compared to $120.3 million for the
three months ended March 30, 2018. The decrease was due to lower volume
of $12.4 million primarily in the mechanical pipe product category and a
decrease in net sales of $4.5 million from the sale of the assets of
FlexHead in the second quarter of fiscal 2018. The sales decrease was
partially offset by $12.8 million of higher average selling prices.

Adjusted EBITDA increased $0.7 million, or 4.2%, to $17.4 million for
the three months ended March 29, 2019 compared to $16.7 million for the
three months ended March 30, 2018. Adjusted EBITDA margins increased to
15.0% for the three months ended March 29, 2019 compared to 13.9% for
the three months ended March 30, 2018. Adjusted EBITDA increased
primarily due to pricing strategies and favorable product mix, partially
offset by lower volume in the mechanical pipe product category as well
as from the sale of the assets of FlexHead in the second quarter of
fiscal 2018.

Full-Year 2019 Guidance

The Company is increasing its expectation of fiscal year 2019 Adjusted
EBITDA to be in the range of $300.0 million – $310.0 million and its
expectation of fiscal year 2019 Adjusted net income per diluted share to
be in the range of $3.25 – $3.40.

Reconciliations of the forward-looking full-year 2019 outlook for
Adjusted EBITDA and Adjusted net income per diluted share are not being
provided as the Company does not currently have sufficient data to
accurately estimate the variables and individual adjustments for such
reconciliations.

Conference Call Information

Atkore management will host a conference call today, May 7, 2019, 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 May 21, 2019. The replay can be accessed by dialing (844)
512-2921, or for international callers, (412) 317-6671. The passcode for
the live call and the replay is 13689898.

The conference call can also be accessed by dialing 877-407-0789
(domestic) or 201-689-8562 (international). A telephonic replay will be
available approximately three hours after the call by dialing
844-512-2921 (domestic) or 412-317-6671 (international). The passcode
for the replay is 13689898. The replay will be available until 11:59
p.m. (ET) on May 21, 2019.

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 3,500 people at
58 manufacturing and distribution facilities worldwide. The Company is
headquartered in Harvey, Illinois.

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
Annual Report on Form 10-K, filed with the U.S. Securities and Exchange
Commission (“SEC”) on November 28, 2018 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 United
States and international markets in which we operate; weakness or
another downturn in the United States 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 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; our inability to continue importing raw
materials, component parts and/or finished goods; changes as a result of
comprehensive tax reform; 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 U.S. Foreign Corrupt
Practices Act 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; and other factors
described from time to time in documents that we file with the SEC. The
Company assumes no obligation to update the information contained
herein, which speaks only as of the date hereof.

Non-GAAP Financial Information

This press release includes certain financial information, not prepared
in accordance with Generally Accepted Accounting Principles in the
United States (“GAAP”). 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 EBITDA and Adjusted EBITDA Margin

We use Adjusted EBITDA and Adjusted EBITDA Margin in evaluating the
performance of our business and in the preparation of our annual
operating budgets and as indicators of business performance and
profitability. 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 (loss) before: depreciation and
amortization, interest expense, net, loss (gain) on extinguishment of
debt, income tax expense (benefit), restructuring and impairments,
stock-based compensation, certain legal matters, transaction costs, gain
on sale of a business, gain on sale of joint venture and other items,
such as inventory reserves and adjustments and realized or unrealized
gain (loss) on foreign currency transactions. We believe Adjusted
EBITDA, when presented in conjunction with comparable accounting
principles generally accepted in the United States of America (“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 Net sales.

We believe Adjusted EBITDA, when presented in conjunction with
comparable accounting principles generally accepted in the United States
of America (“GAAP”) measures, is useful for investors because management
uses Adjusted EBITDA in evaluating the performance of our business.

Adjusted Net Income and Adjusted Net Income per Share

We use Adjusted net income and Adjusted net income per share in
evaluating the performance of our business and profitability. 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 and profitability excluding the impact of unusual and or
non-cash items. We define Adjusted net income as net income before
consulting fees, loss on extinguishment of debt, stock-based
compensation, intangible asset amortization, gain on sale of joint
venture, certain legal matters and other items. We define Adjusted net
income per share as basic and diluted earnings per share excluding the
per share impact of consulting fees, loss on extinguishment of debt,
stock-based compensation, intangible asset amortization, gain on sale of
joint venture, certain legal matters and other items. Beginning in March
2018, the Company has excluded the impact of intangible asset
amortization from the calculation of Adjusted net income. Adjusted net
income prepared for periods prior to March 2018 have also been adjusted
to reflect this change.

Leverage Ratio – Net debt/Adjusted EBITDA

We define leverage ratio as the ratio of net debt (total debt less cash
and cash equivalents) to Adjusted EBITDA on a trailing twelve-month
(“TTM”) basis. We believe the leverage ratio is useful to investors as
an alternative liquidity measure.

Contacts

Contact:
Keith Whisenand
Vice President – Investor
Relations
708-225-2124
[email protected]

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