Atkore International Holdings Inc. Announces Fourth Quarter Fiscal Year 2013 Financial Results

HARVEY, Ill., Dec. 11, 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, building components and polyvinyl chloride ("PVC") conduit, today reported financial results for the fourth quarter of fiscal year 2013.

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Fiscal Year 2013 Fourth Quarter Financial Highlights

FINANCIAL RESULTS



Three months ended
September 27, 2013


Three months ended
September 28, 2012


Change


For the Year Ended
September 27, 2013


For the Year Ended
September 28, 2012
 


Change

($ in millions)












Net sales

$

381


$

425


$

(44)


$

1,476


$

1,549


$

(73)

Operating (loss) income

(1)


6


(7)


22


39


(17)

Adjusted EBITDA

30


31


(1)


108


121


(13)

Net Sales

Net sales were $381 million for the three months ended September 27, 2013, which decreased $44 million, from $425 million for the three months ended September 28, 2012. The decrease was due primarily to the impact of lower average selling prices from our Global Pipe, Tube & Conduit ("GPTC") and Global Cable & Cable Management ("GCCM") products of $10 million, lower volume of $19 million, and $17 million of full year freight recovery classified as revenue in the fourth quarter of fiscal year 2012, which was partially offset by sales of a business acquired late in the fourth quarter of fiscal year 2013.

Operating Income

Operating loss was $1 million for the three months ended September 27, 2013, which decreased $7 million from the operating income of $6 million for the three months ended September 28, 2012. The decrease was due in part to higher selling, general and administrative expenses primarily related to a one-time expense of $7 million for the withdrawal of a multi-employer pension plan and higher expenses of $7 million primarily related to the closure of our facility in France, partially offset by improved gross margins principally due to the favorable impact of lower raw material prices.

Adjusted EBITDA (Non-GAAP): Adjusted EBITDA was $30 million and $31 million for the three months ended September 27, 2013 and September 28, 2012, respectively, and $108 million and $121 million for the twelve months ended September 27, 2013 and September 28, 2012, respectively.

Total Net Debt (Non-GAAP): The total net debt was $437 million and $382 million as of September 27, 2013 and September 28, 2012, respectively. The total net debt is defined as total debt net of cash and cash equivalents limited to $35 million. The reconciliation between total debt and total net debt was shown in supplemental schedule F.

SEGMENT RESULTS

Results of Operations by Segment

Global Pipe, Tube & Conduit



Three months ended
September 27, 2013


Three months ended
September 28, 2012


Change

Net sales

$

237


$

265


$

(28)

Operating income

11


1


10

Adjusted EBITDA

22


16


6

Net Sales

Net sales were $237 million for the three months ended September 27, 2013, which decreased $28 million from $265 million for the three months ended September 28, 2012. The decrease was attributable primarily to lower average selling prices, lower volume, and full year freight recovery classified as revenue in the fourth quarter of fiscal year 2012. The decrease was partly offset by sales of a business acquired late in the quarter.

Operating Income

Operating income was $11 million for the three months ended September 27, 2013, which increased $10 million from operating income of $1 million in the three months ended September 28, 2012. The increase in operating income was due primarily to lower average raw material steel costs and lower selling, general, and administrative costs due to lower impairment and restructuring expenses compared to the prior year's quarter. Average raw material steel costs were 10% lower during the three months ended September 27, 2013, compared to the three months ended September 28, 2012.

Global Cable & Cable Management



Three months ended
September 27, 2013


Three months ended
September 28, 2012


Change

Net sales

$

153


$

171


$

(18)

Operating (loss) income

(2)


16


(18)

Adjusted EBITDA

14


22


(8)

Net Sales

Net sales were $153 million for the three months ended September 27, 2013, which decreased $18 million from $171 million for the three months ended September 28, 2012. The decrease was due primarily to lower average selling prices, lower volume of cable and cable management products, and unfavorable foreign exchange of $1 million. Cable products average selling prices and volume were down 5% and 9% respectively during the quarter as compared to the prior year's quarter.

Operating Income

Operating loss was $2 million for the three months ended September 27, 2013 compared to an operating income of $16 million for the three months ended September 28, 2012. The decrease was due primarily to lower average selling prices and lower volume of cable products along with higher selling, general and administrative expenses primarily related to a one time expense of $7 million for the withdrawal of a multi-employer pension plan and higher expenses of $7 million related to the closure of our facility in France, partially offset by lower copper costs.

Conference Call

Atkore International will host a conference call on December 11, 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 3,300 employees and 24 manufacturing and 15 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 or further downturn in the non-residential construction industry; fluctuations in the price of steel and other raw materials; fluctuations in steel prices; 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; ability to identify, acquire, close or integrate acquisition targets successfully, 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 Transactions (as defined herein) 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 27, 2013, 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



Three Months Ended


Twelve Months Ended

($ in millions)

September 27, 2013


September 28, 2012


September 27, 2013


September 28, 2012

Net sales

$

381


 

$

425


 

$

1,476


 

$

1,549

Costs and expenses








         Cost of sales

326


 

372


 

1,269


 

1,320

         Asset impairment charges

4


 

3


 

9


 

12

         Selling, general and administrative

52


 

44


 

176


 

178

Operating (loss) income

(1)


 

6


 

22


 

39

Interest expense, net

12


 

12


 

48


 

50

Loss before income taxes

(13)


 

(6)


 

(26)


 

(11)

Income tax benefit

(3)


 

(4)


 

(5)


 

(9)

Loss from continuing operations

(10)


 

(2)


 

(21)


 

(2)

Loss from discontinued operations and disposal net of income tax (benefit) expense of $0, 0, $3, $1, respectively

(18)


 

1


 

(43)


 

(6)

Net loss

$

(28)


 

$

(1)


 

$

(64)


 

$

(8)

 

 


Supplemental Schedule B


ATKORE INTERNATIONAL HOLDINGS INC.

CONDENSED CONSOLIDATED BALANCE SHEETS


($ in millions, except per share data)

September 27, 2013


September 28, 2012

Assets




Current Assets:




         Cash and cash equivalents

$

55


$

52

         Accounts receivable, less allowance for doubtful accounts of $3 and $3, respectively

205


205

         Receivables due from Tyco International Ltd. and its affiliates


3

         Inventories, net

245


220

         Assets held for sale

10


11

         Prepaid expenses and other current assets

42


33

         Deferred income taxes

21


21

               Total current assets

578


545

Property, plant and equipment, net

260


261

Intangible assets, net

295


266

Goodwill

152


132

Deferred income taxes


1

Receivables due from Tyco International Ltd. and its affiliates

16


13

Other assets

23


24

               Total assets of continuing operations

$

1,324


$

1,242

               Total assets of discontinued operations

$


$

87

               Total Assets

$

1,324


$

1,329

Liabilities and Equity




Current Liabilities:




         Short-term debt

$

62


$

7

         Accounts payable

127


122

         Income tax payable

1


4

         Accrued and other current liabilities

73


69

               Total current liabilities

263


202

Long-term debt

410


410

Deferred income taxes

82


83

Income tax payable

16


13

Pension liabilities

16


40

Other long-term liabilities

19


11

               Total liabilities of continuing operations

806


759

               Total liabilities of discontinued operations

2


18

               Total Liabilities

808


777

Shareholder's Equity:




         Common shares, $.01 par value, 1,000 shares authorized, 100 shares issued and outstanding


         Additional paid in capital

607


605

         Accumulated deficit

(89)


(25)

         Accumulated other comprehensive loss

(2)


(28)

               Total Shareholder's Equity

516


552

               Total Liabilities and Shareholder's Equity

$

1,324


$

1,329


            



Supplemental Schedule C


ATKORE INTERNATIONAL HOLDINGS INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS



Consolidated Successor Company



Combined Predecessor Company

($ in millions)

For the Year Ended September 27, 2013


For the Year Ended September 28, 2012


For the Period from December 23, 2010 to September 30,

2011



 

 

 

For the Period from September 25, 2010 to December 22, 2010

Operating activities









Net loss

$

(64)


$

(8)


$

(17)



$

(3)

Adjustments to reconcile net loss to net cash provided by (used for) operating activities:









         Loss from discontinued operations and disposal, net of income tax benefit

43


6




 

3

         Depreciation and amortization

48


49


34



6

         Amortization of debt issuance costs

6


6


5



 

         Deferred income taxes

(8)


(14)


2



(6)

         Provision for losses on accounts receivable and inventory

5


5


4



 

2

         Impairment of assets and loss from sale of a business asset

9


12




         Other items

3


2


2



2

         Changes in operating assets and liabilities, net of effects from acquisitions:









               Accounts receivable

20


(17)


(8)



(22)

               Receivables due from Tyco International Ltd. and its affiliates


2




 

               Inventories

(17)


19


(1)



 

(14)

               Prepaid expenses and other current assets

(5)


(6)


(8)



 

1

               Accounts payable

(8)


9


5



(25)

               Income taxes payable


(1)


(6)



3

               Accrued and other liabilities

3


(7)


22



(6)

               Other

3


(1)


4



Net cash provided by (used for) continuing operating activities

38


56


38



(59)

Net cash (used for) provided by discontinued operating activities

(3)


2


30



(8)

Net cash provided by (used for) operating activities

35


58


68



(67)

Investing activities:









         Capital expenditures

(15)


(19)


(34)



(11)

         Change in due to Tyco International Ltd. and its affiliates





357

         Purchase price adjustments



(12)



         Acquisitions of businesses, net of cash acquired

(102)


(40)




         Other

3


9


1



Net cash (used for) provided by continuing investing activities

(114)


(50)


(45)



 

346

Net cash provided by (used for) discontinued investing activities

27


37


(5)



 

(1)

Net cash (used for) provided by investing activities

(87)


(13)


(50)



 

345

Financing activities:









         Repayments of long-term debt due to Tyco International Ltd. and its affiliates



(400)



 

(283)

         Proceeds from issuance of senior secured notes



410



         Borrowings under Credit Facility

298


495


471



         Repayments under Credit Facility

(239)


(541)


(425)



         Payment of debt issuance costs



(38)



         Repayments of other long-term debt


(1)




         Proceeds from short-term debt

9


7


2



         Repayments of short-term debt

(12)


(1)




         Change in parent company investment



3



(1)

Net cash provided by (used for) continuing financing activities

56


(41)


23



(284)

Net cash used for discontinued financing activities



(4)



 

(13)

Net cash provided by (used for) financing activities

56


(41)


19



 

(297)

Effects of foreign exchange rate changes on cash and cash equivalents

(1)



(3)



 

Increase (decrease) in cash and cash equivalents

3


4


34



 

(19)

Cash and cash equivalents at beginning of period

52


48


14



 

33

Cash and cash equivalents at end of period

$

55


$

52


$

48



$

14

Supplementary Cash Flow information









Interest paid

$

42


$

44


$

23



$

11

Income taxes paid, net of refunds

3


4


9



1

Capital expenditures, not yet paid

1


1


3



 



Supplemental Schedule D


ATKORE INTERNATIONAL HOLDINGS INC.

SEGMENT & GEOGRAPHIC INFORMATION

(unaudited)


($ in millions)

Three months ended September 27, 2013


Three months ended September 28, 2012


For the Year Ended September 27, 2013


For the Year Ended September 28, 2012

Net sales:








         Global Pipe, Tube & Conduit

$

237


$

265


$

910


$

954

         Global Cable & Cable Management

153


171


606


634

         Elimination of intersegment revenues

(9)


(11)


(40)


(39)


$

381


$

425


$

1,476


$

1,549

Operating income (loss):








         Global Pipe, Tube & Conduit

$

11


$

1


$

30


$

27

         Global Cable & Cable Management

(2)


16


28


63

         Corporate and Other

(10)


(11)


(36)


(51)


$

(1)


$

6


$

22


$

39




Three months ended September 27, 2013


Three months ended September 28, 2012


For the Year Ended September 27, 2013


For the Year Ended September 28, 2012

Net sales:








         U.S.

$

348


$

389


$

1,338


$

1,406

         Other Americas

10


11


43


46

         Europe

10


10


39


44

         Asia-Pacific

13


15


56


53


$

381


$

425


$

1,476


$

1,549

 

Supplemental Schedule E


ATKORE INTERNATIONAL HOLDINGS INC.

NON-GAAP FINANCIAL MEASURE RECONCILIATION

(unaudited)


($ in millions)


Three months ended September 27, 2013


Three months ended September 28, 2012


Twelve months ended September 27, 2013


Twelve months ended September 28, 2012

Net loss


$

(28)


$

(1)


$

(64)


$

(8)

Loss (gain) from discontinued operations


18


(1)


40


5

Tax impact on discontinued operations




3


1

Net loss from continuing operations


(10)


(2)


(21)


(2)

Add:









         Depreciation and amortization


13


12


48


49

         Interest expense


12


12


48


50

         Benefit for income tax


(3)


(4)


(5)


(9)

EBITDA


12


18


70


88

Add:









         Restructuring (1)


1


2


2


         Non-cash share based compensation (2)



1


2


1

         Unusual product liability (3)



3


2


4

         Non-cash pension expense (4)


1


1


3


3

         Management fee


1


1


6


6

         Asset impairment (5)


4


3


9


12

         Multi-employer pension withdrawal liability (6)


7



7


         Other non-cash items (7)


4


2


7


7

Adjusted EBITDA


$

30


$

31


$

108


$

121




Global Pipe,

Tube &

Conduit


Global Cable

& Cable

Management


Corporate


Consolidated

($ in millions)


Three months ended September 27, 2013


Three months ended September 27, 2013


Three months ended September 27, 2013


Three months ended September 27, 2013

      Operating income (loss)


$

11


$

(2)


$

(10)


$

(1)

Add:









         Depreciation and amortization


9


4



13

EBITDA


22


2


(10)


14

Add:









         Restructuring (1)



1



1

         Non-cash share based compensation (2)





         Unusual product liability (3)





         Non-cash pension expense (4)


1




1

         Management fee




1


1

         Asset impairment (5)


1


3



4

         Multi-employer pension withdrawal liability (6)



7



7

         Other non-cash items (7)



1


3


4

Adjusted EBITDA


$

22


$

14


$

(6)


$

30




Global Pipe,

Tube &

Conduit


Global Cable

& Cable

Management


Corporate


Consolidated

($ in millions)


Three months ended September 28, 2012


Three months ended September 28, 2012


Three months ended September 28, 2012


Three months ended September 28, 2012

      Operating income (loss)


$

1


$

16


$

(11)


$

6

Add:









         Depreciation and amortization


8


4



12

EBITDA


9


20


(11)


18

Add:









         Restructuring (1)


1


1



2

         Non-cash share based compensation (2)




1


1

         Unusual product liability (3)




3


3

         Non-cash pension expense (4)


1




1

         Management fee




1


1

         Asset impairment (5)


3




3

         Other non-cash items (7)


2


1


(1)


2

Adjusted EBITDA


$

16


$

22


$

(7)


$

31




Global Pipe,

Tube &

Conduit


Global Cable

& Cable

Management


Corporate


Consolidated

($ in millions)


For the Year Ended September 27, 2013


For the Year Ended September 27, 2013


For the Year Ended September 27, 2013


For the Year Ended September 27, 2013

      Operating income (loss)


$

30


$

28


$

(36)


$

22

Add:









         Depreciation and amortization


31


16


1


48

EBITDA


61


44


(35)


70

Add:









         Restructuring (1)



2



2

         Non-cash share based compensation (2)




2


2

         Unusual product liability (3)




2


2

         Non-cash pension expense (4)


3




3

         Management fee




6


6

         Asset impairment (5)


6


3



9

         Multi-employer pension withdrawal liability (6)



7



7

         Other non-cash items (7)


2


1


4


7

Adjusted EBITDA


$

72


$

57


$

(21)


$

108




Global Pipe,

Tube &

Conduit


Global Cable

& Cable

Management


Corporate


Consolidated

($ in millions)


For the Year Ended September 28, 2012


For the Year Ended September 28, 2012


For the Year Ended September 28, 2012


For the Year Ended September 28, 2012

      Operating income (loss)


$

27


$

63


$

(51)


$

39

Add:









         Depreciation and amortization


32


16


1


49

EBITDA


59


79


(50)


88

Add:









         Restructuring (1)





         Non-cash share based compensation (2)




1


1

         Unusual product liability (3)




4


4

         Non-cash pension expense (4)


3




3

         Management fee




6


6

         Asset impairment (5)


7



5


12

         Other non-cash items (6)


4


1


2


7

Adjusted EBITDA


$

73


$

80


$

(32)


$

121

 

 

 

(in millions)

For the Three Months
Ended December 28, 2012


For the Three Months Ended March 29, 2013


For the Three Months Ended June 28, 2013


For the Three Months Ended September 27, 2013


For the Trailing Twelve Months Ended September 27, 2013

Net loss

$

(4)


$

(2)


$

(30)


$

(28)


$

(64)

(Gain) loss from discontinued operations

(1)


1


20


18


38

Tax impact on discontinued operations


1


4



5

Net loss from continuing operations

(5)



(6)


(10)


(21)

Add:










         Depreciation and amortization

13


11


11


13


48

         Interest expense

12


12


12


12


48

         (Benefit) expense for income tax

(1)


2


(3)


(3)


(5)

EBITDA

19


25


14


12


70

Add:










         Restructuring (1)

2


(1)



1


2

         Non-cash share based compensation (2)


1


1



2

         Unusual product liability (3)


1


1



2

         Non-cash pension expense (4)

1


1



1


3

         Management fee

2


1


2


1


6

         Asset impairment (5)

1


1


3


4


9

         Multi-employer pension withdrawal liability (6)




7


7

         Other non-cash items (7)

1


2



4


7

Adjusted EBITDA

26


31


21


30


108

 

 

*

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 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.

(5)

Represents asset impairment charges related to our facility located in France, an Enterprise Resource Planning system, intangible assets and goodwill associated with a manufacturing facility classified as held for sale, and buildings held for sale.

(6)

Represents a multi-employer plan withdrawal liability.

(7)

Represents the net impact of other non-cash items, including non-recurring consulting fees, a one-time executive severance expense, and a loss on the sale of fixed assets.

 

 

Supplemental Schedule F


ATKORE INTERNATIONAL HOLDINGS INC.

NON-GAAP FINANCIAL MEASURE RECONCILIATION

(unaudited)


          Consolidated Total Leverage Ratio as of September 27, 2013 and September 28, 2012 is as follows:





($ in millions)

September 27, 2013


September 28, 2012

Senior secured notes due January 1, 2018

$

410


$

410

Asset-based credit facility

59


Other

3


7





Total debt

472


417

Less cash on-hand (limited to $35 million) (1)

(35)


(35)





Total net debt (A)

$

437


$

382





Total Consolidated EBITDA (2)

108


121





Pro forma Adjustment (3)

11


Pro forma Adjusted EBITDA (B)

119


121

Total Leverage Ratio (A)/(B)

3.7


3.2





 

(1)

As of September 27, 2013 and September 28, 2012, cash and cash equivalents were $55 million and $52 million, respectively.

(2)

Total consolidated Adjusted EBITDA for the last 12 months.

(3)

Pro forma adjustment for Heritage Plastics and Liberty Plastics gives effect to the acquisition as if it had occurred on September 29, 2012.

 

SOURCE Atkore International



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