Market Overview

Atkore International Group Inc. Announces Third Quarter 2018 Results

Share:
  • Diluted earnings per share increased by $0.29 to $0.70; Adjusted net
    income per diluted share increased by $0.37 to $0.86
  • Net income increased by $6.7 million to $34.2 million; Adjusted EBITDA
    increased by $14.6 million to $76.7 million
  • Full-year Adjusted EBITDA guidance updated to $265.0 million - $272.0
    million
  • Full-year Adjusted net income per diluted share guidance updated to
    $2.65 - $2.70

Atkore International Group Inc. (the "Company" or "Atkore") (NYSE:ATKR)
announced earnings for its fiscal 2018 third quarter ended June 29, 2018.

"I'm pleased to report that Atkore continues to deliver strong
performance with double digit growth in Net sales, Adjusted EBITDA and
Earnings per share on a year over year basis," commented John
Williamson, Atkore President and Chief Executive Officer.

"Atkore's recent performance has enabled us to increase our full year
guidance, with discipline that enables successful pass-through of
increased raw material costs, delivery of quality products to the
market, and focus on driving greater value for our customers, employees
and shareholders."

 

2018 Third Quarter Results

 
Three months ended

(in thousands)

June 29, 2018   June 30, 2017   Change   % Change
Net sales
Electrical Raceway $ 370,333 $ 288,277 $ 82,056 28.5 %
Mechanical Products & Solutions 128,239 109,664 18,575 16.9 %
Eliminations (558 ) (196 ) (362 ) 184.7 %
Consolidated operations $ 498,014   $ 397,745   $ 100,269   25.2 %
 
Adjusted EBITDA
Electrical Raceway $ 74,461 $ 49,661 $ 24,800 49.9 %
Mechanical Products & Solutions 12,013 17,363 (5,350 ) (30.8 )%
Unallocated (9,810 ) (4,991 ) (4,819 ) 96.6 %
Consolidated operations $ 76,664   $ 62,033   $ 14,631   23.6 %
 

Net sales increased by $100.3 million, or 25.2% to $498.0 million for
the three months ended June 29, 2018 compared to $397.7 million for the
prior-year period. Net sales increased by $31.9 million due to the
acquisitions of Marco Cable Management, Flexicon Limited, Calpipe
Industries, LLC and Cii during fiscal 2017 and fiscal 2018, partially
offset by a decrease in net sales of $5.6 million resulting from the
divestiture of Flexhead Industries, Inc. and SprinkFLEX, LLC (together
"Flexhead"). Additionally, net sales increased by $56.0 million due to
higher net average selling prices resulting from the pass-through impact
of higher average input costs of copper, steel and freight, and
increased average market prices for Metal and PVC electrical conduit and
fittings product categories. Lastly, net sales increased by $15.2
million due to higher volume of products from the mechanical pipe and
metal framing and fittings product categories sold within the Mechanical
Products & Solutions segment, partially offset by lower volume of
products from the armored cable and fittings and flexible electrical
conduit and fittings product categories sold within the Electrical
Raceway segment.

Gross profit increased by $27.8 million, or 30.1% to $120.3 million for
the three months ended June 29, 2018, as compared to $92.5 million for
the prior-year period. Gross margins increased to 24.2% for the three
months ended June 29, 2018, as compared to 23.3% for the prior-year
period. Gross margins increased primarily due to increased average
market prices for the Metal and PVC electrical conduit and fittings
product categories, partially offset by the pass-through impact of
higher average input costs of copper, steel and freight costs.

Net income increased by $6.7 million, or 24.5% to $34.2 million for the
three months ended June 29, 2018 compared to $27.5 million for the
prior-year period primarily due to higher operating income of $10.7
million and lower income tax expense of $1.1 million, partially offset
by higher interest expense of $6.6 million.

Adjusted EBITDA increased by $14.6 million, or 23.6% to $76.7 million
for the three months ended June 29, 2018 compared to $62.0 million for
the three months ended June 30, 2017. The increase was primarily due to
incremental Adjusted EBITDA from acquisitions during fiscal 2017 and
fiscal 2018, increased average market prices for the Metal and PVC
electrical conduit and fittings product categories and increased volume
of products sold across most product categories, partially offset by
higher average input costs of copper, steel and freight, higher
incentive-based compensation expense and the Flexhead divestiture.

Diluted earnings per share were $0.70 for the three months ended June
29, 2018, as compared to $0.41 in the prior-year period. Adjusted net
income per diluted share increased by $0.37 to $0.86 for the three
months ended June 29, 2018, as compared to $0.49 for the prior-year
period.

Segment Results

Electrical Raceway

Electrical Raceway Net sales increased by $82.1 million, or 28.5%, to
$370.3 million for the three months ended June 29, 2018 compared to
$288.3 million for the three months ended June 30, 2017. The increase
was primarily due to the pass-through impact of higher average input
costs of copper, steel and freight and increased average market prices
for the Metal and PVC electrical conduit and fittings product categories
of $50.3 million. Additionally, Net sales increased by $31.9 million
resulting from acquisitions during fiscal 2017 and fiscal 2018. The
increase in Net sales was partially offset by lower volume of products
sold of $2.9 million primarily from the armored cable and fittings and
flexible electrical conduit and fittings product categories.

Electrical Raceway Adjusted EBITDA for the three months ended June 29,
2018 increased by $24.8 million, or 49.9%, to $74.5 million from $49.7
million for the three months ended June 30, 2017. Adjusted EBITDA
margins increased to 20.1% for the three months ended June 29, 2018
compared to 17.2% for the three months ended June 30, 2017. The increase
in Adjusted EBITDA was largely due to the pass-through impact of higher
average input costs of copper and steel, increased average market prices
for the Metal and PVC electrical conduit and fittings product categories
and incremental Adjusted EBITDA resulting from acquisitions. The
increase in EBITDA was partially offset by an increase in freight costs
and lower volume of products from the armored cable and fittings and
flexible electrical conduit and fittings product categories sold.

Mechanical Products & Solutions ("MP&S")

MP&S Net sales increased by $18.6 million, or 16.9%, for the three
months ended June 29, 2018 to $128.2 million compared to $109.7 million
for the three months ended June 30, 2017. The increase was primarily due
to $18.3 million of higher volume of products sold within the mechanical
pipe and metal framing and fittings product categories as well as higher
average selling prices, partly offset by a decrease in Net sales of $5.6
million resulting from the Flexhead divestiture.

MP&S Adjusted EBITDA decreased by $5.4 million, or 30.8%, to $12.0
million for the three months ended June 29, 2018 compared to $17.4
million for the three months ended June 30, 2017. Adjusted EBITDA
margins decreased to 9.4% for the three months ended June 29, 2018
compared to 15.8% for the three months ended June 30, 2017. Adjusted
EBITDA decreased due to an increase in average input costs, which
exceeded the increase in average selling prices, and as a result of the
Flexhead divestiture, partially offset by higher volume of product
categories sold.

Full-Year 2018 Guidance

The Company is updating its expectation of fiscal year 2018 Adjusted
EBITDA to be in the range of $265.0 - $272.0 million and its expectation
of fiscal year 2018 Adjusted net income per diluted share to be in the
range of $2.65 - $2.70.

Reconciliations of the forward-looking full-year 2018 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, August 7, 2018, at
8 a.m. Eastern time, to discuss the Company's financial results. The
conference call may be accessed by dialing (877) 407-0789 (domestic) or
(201) 689-8562 (international). The call will be available for replay
until August 21, 2018. 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 13681780.

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 3,600 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 29, 2017, in our Quarterly Report on Form
10-Q filed with the SEC on February 6, 2018 and our Quarterly Report on
Form 10-Q filed with the SEC on August 7, 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 we use each 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, consulting fees, multi-employer pension
withdrawal, 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.

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.

     

ATKORE INTERNATIONAL GROUP INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

 
 
Three months ended Nine months ended

(in thousands, except per share data)

June 29, 2018   June 30, 2017 As Adjusted* June 29, 2018   June 30, 2017 As Adjusted*
Net sales $ 498,014 $ 397,745 $ 1,357,572 $ 1,108,127
Cost of sales 377,685   305,260   1,031,219   836,369  
Gross profit 120,329 92,485 326,353 271,758
Selling, general and administrative 57,482 42,491 169,195 138,143
Intangible asset amortization 7,694   5,546   24,146   16,628  
Operating income 55,153 44,448 133,012 116,987
Interest expense, net 12,442 5,811 28,322 20,872
Loss on extinguishment of debt 9,805
Other income, net (1,840 ) (259 ) (27,516 ) (6,785 )
Income before income taxes 44,551 38,896 132,206 93,095
Income tax expense 10,352   11,431   28,260   29,313  
Net income $ 34,199   $ 27,465   $ 103,946   $ 63,782  
 
Net income per share
Basic $ 0.73 $ 0.43 $ 1.92 $ 1.01
Diluted $ 0.70 $ 0.41 $ 1.84 $ 0.96

_________________________

* Adjusted due to the adoption of Accounting Standards Update 2017-07
Compensation - Retirement Benefits (Topic 715): Improving the
Presentation of Net Periodic Pension Cost and Net Periodic
Postretirement Benefit Cost.

     
 

ATKORE INTERNATIONAL GROUP INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

 
 

(in thousands, except share and per share
data)

June 29, 2018 September 30, 2017
Assets
Current Assets:
Cash and cash equivalents $ 109,519 $ 45,718
Accounts receivable, less allowance for doubtful accounts of $1,547
and $1,239, respectively
260,564 224,427
Inventories, net 207,535 200,003
Prepaid expenses and other current assets 26,854   35,611  
Total current assets 604,472 505,759
Property, plant and equipment, net 212,585 208,619
Intangible assets, net 300,406 344,289
Goodwill 170,340 147,716
Deferred tax assets 1,657
Non-trade receivables 6,452   7,052  
Total Assets $ 1,294,255   $ 1,215,092  
Liabilities and Equity
Current Liabilities:
Short-term debt and current maturities of long-term debt $ 7,630 $ 4,215
Accounts payable 154,331 125,618
Income tax payable 1,808 2,581
Accrued compensation and employee benefits 29,997 26,387
Other current liabilities 59,111   53,036  
Total current liabilities 252,877 211,837
Long-term debt 898,509 571,863
Deferred tax liabilities 19,100 17,464
Other long-term tax liabilities 6,544 6,771
Pension liabilities 23,200 25,239
Other long-term liabilities 20,262   21,047  
Total Liabilities 1,220,492   854,221  
Equity:
Common stock, $0.01 par value, 1,000,000,000 shares authorized,
45,972,141 and 63,305,434 shares issued and outstanding, respectively
461 634
Treasury stock, held at cost, 260,900 and 260,900 shares,
respectively
(2,580 ) (2,580 )
Additional paid-in capital 443,918 423,232
Accumulated deficit (348,455 ) (42,433 )
Accumulated other comprehensive loss (19,581 ) (17,982 )
Total Equity 73,763   360,871  
Total Liabilities and Equity $ 1,294,255   $ 1,215,092  
   
 

ATKORE INTERNATIONAL GROUP INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

 
 
Nine months ended

(in thousands)

June 29, 2018   June 30, 2017
Operating activities:
Net income $ 103,946 $ 63,782
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization 49,255 40,242
Deferred income taxes (4,354 ) (1,748 )
Gain on sale of a business (27,575 )
Loss on extinguishment of debt 9,805
Stock-based compensation 9,828 9,368
Other adjustments to net income 4,642 (2,457 )
Changes in operating assets and liabilities, net of effects from
acquisitions
Accounts receivable (40,160 ) (16,481 )
Inventories (18,038 ) (17,486 )
Accounts payable 29,420 2,918
Other, net 13,614   (22,160 )
Net cash provided by operating activities 120,578 65,783
Investing activities:
Capital expenditures (26,314 ) (15,284 )
Divestiture of business 42,631
Acquisition of businesses, net of cash acquired (3,350 ) (19,606 )
Proceeds from sale of assets held for sale 3,024
Other, net 1,475   74  
Net cash provided by (used in) investing activities 14,442 (31,792 )
Financing activities:
Borrowings under credit facility 309,000
Repayments under credit facility (394,000 )
Repayments of short-term debt (5,850 ) (4,200 )
Repayments of long-term debt (1,217 ) (639,850 )
Issuance of long-term debt 426,217 498,750
Payment for debt financing costs and fees (5,801 ) (4,375 )
Issuance of common stock 10,874 12,069
Repurchase of common stock (410,157 )
Other, net (114 ) (15 )
Net cash used for financing activities (71,048 ) (137,621 )
Effects of foreign exchange rate changes on cash and cash equivalents (171 ) (449 )
Increase (decrease) in cash and cash equivalents 63,801 (104,079 )
Cash and cash equivalents at beginning of period 45,718   200,279  
Cash and cash equivalents at end of period $ 109,519   $ 96,200  
Supplementary Cash Flow information
Capital expenditures, not yet paid $ 363 $ 90
     
 

ATKORE INTERNATIONAL GROUP INC.

ADJUSTED EBITDA

 

The following table presents reconciliations of Adjusted EBITDA to
net income for the periods presented:

 
Three months ended Nine months ended

(in thousands)

June 29, 2018   June 30, 2017 June 29, 2018   June 30, 2017
Net income $ 34,199 $ 27,465 $ 103,946 $ 63,782
Interest expense, net 12,442 5,811 28,322 20,872
Income tax expense 10,352 11,431 28,260 29,313
Depreciation and amortization 16,192 13,341 49,255 40,242
Loss on extinguishment of debt 9,805
Restructuring and impairments 407 (101 ) 1,245 700
Stock-based compensation 3,494 3,064 9,828 9,368
Certain legal matters 2,286 7,501
Transaction costs 768 845 2,676 2,543
Gain on sale of a business (838 ) (27,575 )
Gain on sale of joint venture (5,774 )
Other (a) (352 ) 177   2,249   (10,306 )
Adjusted EBITDA $ 76,664   $ 62,033   $ 200,492   $ 168,046  
   
 
(a) Represents other items, such as inventory reserves and adjustments,
realized or unrealized gain (loss) on foreign currency transactions
and release of certain indemnified uncertain tax positions.
 
 

ATKORE INTERNATIONAL GROUP INC.

SEGMENT INFORMATION

   

The following tables represent reconciliations of Net sales and
calculations of Adjusted EBITDA Margin by segment for the periods
presented:

 
Three months ended
June 29, 2018   June 30, 2017

(in thousands)

Net sales   Adjusted EBITDA   Adjusted EBITDA Margin Net sales   Adjusted EBITDA   Adjusted EBITDA Margin
Electrical Raceway $ 370,333 $ 74,461 20.1 % $ 288,277 $ 49,661 17.2 %
Mechanical Products & Solutions 128,239 $ 12,013 9.4 % 109,664 $ 17,363 15.8 %
Eliminations (558 ) (196 )
Consolidated operations $ 498,014   $ 397,745  
       
Nine months ended
June 29, 2018   June 30, 2017

(in thousands)

Net sales   Adjusted EBITDA   Adjusted EBITDA Margin Net sales   Adjusted EBITDA   Adjusted EBITDA Margin
Electrical Raceway $ 1,011,643 $ 187,025 18.5 % $ 801,657 $ 138,465 17.3 %
Mechanical Products & Solutions 347,123 $ 39,544 11.4 % 307,525 $ 48,601 15.8 %
Eliminations (1,194 ) (1,055 )
Consolidated operations $ 1,357,572   $ 1,108,127  
       
 

ATKORE INTERNATIONAL GROUP INC.

ADJUSTED NET INCOME PER SHARE

 

The following table presents reconciliations of Adjusted net
income to net income for the periods presented:

 
Three months ended Nine months ended

(in thousands, except per share data)

June 29, 2018   June 30, 2017 As Adjusted* June 29, 2018   June 30, 2017 As Adjusted*
Net income $ 34,199 $ 27,465 $ 103,946 $ 63,782
Stock-based compensation 3,494 3,064 9,828 9,368
Intangible asset amortization 7,694 5,546 24,146 16,628
Gain on sale of a business (838 ) (27,575 )
Loss on extinguishment of debt 9,805
Gain on sale of joint venture (5,774 )
Certain legal matters 2,286 7,501
Other (a) (352 ) 177   2,249   (10,306 )
Pre-tax adjustments to net income 9,998 8,787 10,934 27,222
Tax effect (2,599 ) (3,147 ) (2,844 ) (9,142 )
Adjusted net income $ 41,598   $ 33,105   $ 112,036   $ 81,862  
 
Weighted-Average Diluted Common Shares Outstanding 48,412 66,890 56,015 66,585
Net income per diluted share $ 0.70 $ 0.41 $ 1.84 $ 0.96
Adjusted net income per diluted share(b) $ 0.86 $ 0.49 $ 2.00 $ 1.23
 
* Adjusted due to the adoption of Accounting Standards Update 2017-07
Compensation - Retirement Benefits (Topic 715): Improving the
Presentation of Net Periodic Pension Cost and Net Periodic
Postretirement Benefit Cost.
(a) Represents other items, such as inventory reserves and adjustments,
realized or unrealized gain (loss) on foreign currency transactions
and release of certain indemnified uncertain tax positions.
(b) 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.
   

ATKORE INTERNATIONAL GROUP INC.

LEVERAGE RATIO

 

The following table presents reconciliations of Net debt to Total
debt for the periods presented:

 

($ in thousands)

June 29, 2018 September 30, 2017 September 30, 2016 September 25, 2015 September 26, 2014
Short-term debt and current maturities of long-term debt $ 7,630 $ 4,215 $ 1,267 $ 2,864 $ 42,887
Long-term debt 898,509   571,863   629,046   649,344   649,980  
Total debt 906,139 576,078 630,313 652,208 692,867
Less cash and cash equivalents 109,519   45,718   200,279   80,598   33,360  
Net debt $ 796,620 $ 530,360 $ 430,034 $ 571,610 $ 659,507
 
TTM Adjusted EBITDA $ 260,054 $ 227,608 $ 235,002 $ 163,949 $ 126,597
 
Total debt/TTM Adjusted EBITDA 3.5 x 2.5 x 2.7 x 4.0 x 5.5 x
Net debt/TTM Adjusted EBITDA 3.1 x 2.3 x 1.8 x 3.5 x 5.2 x
     
 

ATKORE INTERNATIONAL GROUP INC.

TRAILING TWELVE MONTHS ADJUSTED EBITDA

 

The following table presents a reconciliation of Adjusted EBITDA
for the trailing twelve months ended June 29, 2018:

 
TTM Three months ended

(in thousands)

June 29, 2018 June 29, 2018   March 30, 2018   December 29, 2017   September 30, 2017
Net income $ 124,803 $ 34,199 $ 42,558 $ 27,189 $ 20,857
Interest expense, net 34,048 12,442 9,286 6,594 5,726
Income tax expense 40,433 10,352 15,392 2,516 12,173
Depreciation and amortization 63,740 16,192 15,853 17,210 14,485
Restructuring and impairments 1,801 407 576 262 556
Stock-based compensation 13,248 3,494 2,770 3,564 3,420
Certain legal matters 2,336 2,286 50
Transaction costs 4,911 768 1,263 645 2,235
Gain on sale of a business (27,575 ) (838 ) (26,737 )
Other 2,309   (352 ) 2,094   507   60
Adjusted EBITDA $ 260,054   $ 76,664   $ 65,341   $ 58,487   $ 59,562

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