10-K: Atkore Reports FY25 Net Loss Amid Impairments, Strategic Review

Atkore Inc. reported a net loss of $15.2 million for fiscal year 2025, driven by decreased average selling prices and significant asset impairment charges, while announcing an expanded strategic review including a potential company sale.

Summary

• Net sales for fiscal year 2025 decreased by 11.0% to $2,850.4 million, down from $3,202.1 million in fiscal 2024, primarily due to a $381.8 million decrease in average selling prices and $9.3 million from divestitures.
• The company reported a net loss of $15.2 million in fiscal 2025, a significant decline from a net income of $472.9 million in fiscal 2024.
• Gross profit decreased by 37.3% to $676.1 million, and operating income plummeted by 96.3% to $23.2 million in fiscal 2025.
• Asset impairment charges totaled $214.4 million in fiscal 2025, including $194.5 million for HDPE assets and $18.9 million for goodwill in the Mechanical reporting unit.
• The Electrical segment's net sales decreased by 15.1% to $1,998.2 million, and its Adjusted EBITDA fell by 54.6% to $330.5 million, largely due to lower average selling prices and higher input costs.
• The Safety & Infrastructure segment's net sales increased by 0.5% to $853.4 million, and its Adjusted EBITDA grew by 21.3% to $109.2 million, as decreases in input costs outpaced decreases in selling prices.
• Cash and cash equivalents increased by $155.3 million to $506.7 million as of September 30, 2025.
• Share repurchases decreased to $100.0 million in fiscal 2025 from $381.0 million in fiscal 2024, while dividends paid increased to $44.2 million from $34.5 million.
• The company announced an expanded review of strategic alternatives, including a potential sale or merger of the entire company, and entered into a cooperation agreement with Irenic Capital Management LP.
• William E. Waltz, Jr., President and CEO, announced his intention to retire, with the board engaged in a succession plan.

Sentiment

Score: 3

Explanation: The company reported a net loss for the fiscal year, a substantial decrease in profitability, and significant asset impairment charges. While some segments showed volume growth, overall sales declined due to pricing pressures. The announcement of a strategic review, including a potential sale of the entire company, and ongoing antitrust and securities litigation, indicate significant challenges and uncertainty.

Positives

• Sales volume increased by $21.6 million across varying product categories within both the Electrical and Safety & Infrastructure segments in fiscal 2025.
• The Safety & Infrastructure segment demonstrated resilience with a 0.5% increase in net sales and a 21.3% increase in Adjusted EBITDA in fiscal 2025, driven by input cost decreases outpacing selling price declines.
• Cash and cash equivalents significantly increased by $155.3 million, reaching $506.7 million as of September 30, 2025, indicating strong liquidity.
• The company maintains a robust liquidity position with $325.0 million of available borrowing capacity under its ABL Credit Facility and no outstanding borrowings as of September 30, 2025.
• A new 5-year labor contract for the largest facility in Harvey, Illinois, was ratified with the United Steelworkers Union, retroactive to April 2024, ensuring labor stability.
• Atkore was recognized as a Great Place to Work-Certified™ company for the fifth consecutive year in 2025, reflecting a positive workplace culture.
• Significant investments have been made in technology to improve business operations and customer solutions, including the implementation of a standardized ERP system.
• The company has strengthened its cybersecurity posture through substantial investments, monthly employee training, and regular table-top exercises.
• Pension plans are overfunded by approximately $8.6 million as of September 30, 2025, and are frozen, reducing future accrual risks.

Negatives

• Reported a net loss of $15.2 million for fiscal 2025, a substantial decrease from the $472.9 million net income in fiscal 2024.
• Net sales decreased by 11.0% to $2,850.4 million in fiscal 2025, primarily due to a $381.8 million impact from decreased average selling prices.
• Gross profit declined by 37.3% to $676.1 million, and operating income decreased by 96.3% to $23.2 million in fiscal 2025.
• Incurred significant asset impairment charges of $214.4 million in fiscal 2025, including $194.5 million related to HDPE assets and $18.9 million for Mechanical reporting unit goodwill.
• The Electrical segment experienced a 15.1% decrease in net sales and a 54.6% drop in Adjusted EBITDA in fiscal 2025, largely due to lower average selling prices and higher input costs.
• Recorded a $6.2 million loss on the sale of Northwest Polymers in fiscal 2025.
• Other expense, net, increased by $5.7 million to $7.7 million in fiscal 2025.
• Litigation costs increased by $3.9 million in fiscal 2025.
• The company announced an intention to reduce costs through headcount reductions, site closures (three facilities in fiscal 2026), and strategic divestitures, indicating operational challenges.
• Facing multiple putative class action lawsuits, a grand jury subpoena from the DOJ regarding PVC pipe pricing, and securities/shareholder derivative lawsuits related to these antitrust allegations.

Risks

• Performance may be impacted by general business and economic conditions, including recessions, interest rate fluctuations, inflation, and supply chain disruptions.
• A downturn in the non-residential construction industry, which accounts for a significant portion of the business, could materially and adversely affect financial performance.
• Raw material price increases or decreases, particularly for steel, copper, and resin, may not be passed through to customers, impacting gross profit.
• Increased competition from national, regional, and international manufacturers could lead to pricing pressure, reduced profitability, or loss of market share.
• Operating results are sensitive to the availability and cost of freight and energy.
• Interruptions in IT systems, including from cybersecurity threats, could disrupt operations and cause unanticipated increases in costs or decreases in revenues.
• The importation of similar products into the United States, as well as U.S. trade policy and practices, could materially and adversely affect business.
• Contracts for global mega projects are complex and often include risk profiles greater than usual product sales, potentially leading to significant warranty or indemnity obligations.
• Direct and indirect exposure to legislative and regulatory changes (e.g., CHIPS and Science Act, Inflation Reduction Act, Buy America, National Electrical Code) that may affect demand for products or increase costs.
• Results of operations could be adversely affected by adverse weather conditions, particularly in the first and second fiscal quarters.
• Labor disputes, increased labor costs, or work stoppages could adversely affect operations and impair financial performance.
• Inability to attract and retain qualified skilled labor.
• Significant costs to comply with current and future environmental and health and safety laws and regulations, and exposure to material environmental and health and safety liability.
• Reliance on several key customers for a significant portion of net sales (top ten customers accounted for approximately 40% in fiscal 2025), with the risk of losing them or their inability to pay on time.
• Working capital requirements could result in lower cash available for capital expenditures and acquisition financing.
• May be required to recognize goodwill, intangible assets, or other long-lived asset impairment charges.
• Exposure to product liability, construction defect, and warranty claims and litigation, as well as other legal proceedings.
• Widespread public health conditions, including pandemics, could have a material adverse impact on business.
• Climate change and related regulatory and legislative developments may have a material adverse impact on business and results of operations.
• Financial obligations relating to pension plans, with potential for additional cash contributions if assumptions are inaccurate.
• Unplanned outages at facilities or those of suppliers, and other unforeseen disruptions, could materially and adversely affect business.
• Reliance on the efforts of agents and distributors to generate sales of products, with the risk of losing them or their increased sales of competitors' products.
• Inability to introduce new products effectively or implement innovation strategies could adversely affect ability to compete.
• Safety and labor risks associated with the manufacturing and testing of products.
• Inability to adequately protect intellectual property rights, and potential involvement in intellectual property disputes.
• Risks associated with international operations, including economic volatility, currency exchange rate fluctuations, and changes in trade regulations.
• Changes in foreign laws and legal systems, including those resulting from Brexit, could materially impact business.
• Inability to acquire or import raw materials, component parts, or finished goods from existing suppliers, and significant increases in government regulation or restrictions relating to such imports.
• May become subject to liabilities and required to issue additional debt or equity in connection with acquisitions, joint ventures, or divestitures.
• Inability to identify, acquire, close, or integrate acquisition targets, or to execute divestitures, successfully.
• Regulations related to conflict minerals may force the company to incur additional expenses, create complexities in the supply chain, and damage reputation.
• Indebtedness levels (approximately $770.6 million total long-term consolidated indebtedness as of September 30, 2025) may adversely affect financial health.
• Ability to incur substantially more indebtedness, increasing risks.
• Increases in interest rates would increase the cost of servicing indebtedness and could reduce profitability.
• A lowering or withdrawal of credit ratings may increase future borrowing costs and reduce access to capital.
• Agreements and instruments governing indebtedness contain restrictions and limitations that could significantly impact the ability to operate the business.
• Ability to generate sufficient cash to pay interest and principal on indebtedness and refinance debt depends on many factors beyond control.
• Ability to generate sufficient cash to pay dividends depends on many factors beyond control.
• Atkore Inc. is a holding company dependent on its subsidiaries for cash to fund operations and expenses.
• The timing and amount of the company's share repurchases are subject to a number of uncertainties.
• Anti-takeover provisions in corporate documents could discourage, delay, or prevent a change of control.
• Provisions limiting the personal liability of directors and certain officers for breaches of fiduciary duty.
• Designation of the Court of Chancery of the State of Delaware as the sole and exclusive forum for certain litigation.
• The market price of common stock may be volatile and could decline.
• If securities or industry analysts do not publish research or publish misleading or unfavorable research, stock price and trading volume could decline.
• Inability to hire, engage, and retain key personnel, including the ongoing CEO succession process.
• Future tax legislation could materially impact business.
• Future offerings of debt or equity securities which would rank senior to common stock may adversely affect its market price.
• May need to raise additional capital, and there is no assurance that additional financing will be available.

Future Outlook

The company expects to incur additional restructuring costs and close three facilities in fiscal 2026. It anticipates contributing at least $350 thousand to its pension plans in fiscal 2026 and believes cash from operations and available ABL Credit Facility capacity will provide sufficient funds for at least the next twelve months. Most provisions of the One Big Beautiful Bill Act (OBBBA) are scheduled to take effect during fiscal year 2027, and the company is evaluating the impact of new accounting standards (ASU 2025-06 and ASU 2024-03) for adoption in fiscal years 2029 and 2028, respectively. The board is actively engaged in a succession plan for the retiring CEO, and an expanded strategic review, including a potential sale or merger of the entire company, is underway.

Management Comments

• Our mission is to be the customers first choice by providing unmatched quality, delivery, and value based on sustainable excellence in strategy, people, and processes.
• Atkore believes that a culture of engagement and alignment drives continuous improvement, enhances our customers experience, and delivers strong performance.
• At Atkore, nothing is more important than the safety and well-being of our people.
• At Atkore, we believe that all employees contribute to our success and that our differences make us better.
• We believe we have sufficient liquidity to support our ongoing operations and to invest in future growth and create value for stockholders.
• We expect that cash provided from operations and available capacity under the ABL Credit Facility will provide sufficient funds to operate our business, make expected capital expenditures and meet our liquidity requirements for at least the next twelve months, including payment of interest and principal on our debt.

Industry Context

Atkore Inc. operates as a leading manufacturer of Electrical and Safety & Infrastructure products, primarily serving the cyclical non-residential construction and renovation markets. The industry is influenced by factors such as credit availability, interest rates, and broader economic conditions. Current trends include a shift towards digital design tools, labor-saving solutions, and increased demand for renewable power generation, building electrification, and digital infrastructure like data centers. The company faces intense competition from both national and regional manufacturers, as well as international players, with competition centered on product offering, innovation, quality, service, and price. The increasing adoption of data analytics, machine learning, and artificial intelligence software by competitors is also a notable industry development.

Comparison to Industry Standards

• The company believes it holds #1 or #2 positions in the United States by net sales in a significant number of its products, indicating a strong market presence relative to competitors.
• Key competitors in the Electrical segment include Zekelman Industries, Inc., Mitsubishi Corporation, Nucor Corporation, Southwire Company, LLC, Dura-Line Corporation, and Prysmian.
• Key competitors in the Safety & Infrastructure segment include Zekelman Industries, Inc., Eaton Corporation plc, ABB Ltd., Hubbell Incorporated, nVent Electric plc., and Haydon Corporation.
• No specific comparable company, project, or result data is provided within the filing for a detailed quantitative assessment against industry benchmarks.

Management Changes

Corporate Governance

Legal Proceedings

• **Special Products Claims**: Historically, lawsuits alleging incompatibility of anti-microbial coated steel sprinkler pipe with CPVC pipe. Tyco (now JCI) contractually indemnifies the company for these claims, and JCI has resolved all claims at its sole cost and expense. No claims are currently pending against the company.
• **In re: PVC Pipe Antitrust Litigation (N.D. Ill. 24-cv-07639)**: Several putative class action lawsuits filed in the fourth quarter of fiscal 2024, consolidated in federal court, alleging anticompetitive conduct related to PVC pipe pricing in the U.S. between approximately 2021 and the present. The suits claim improper sharing of confidential information and conspiracy in violation of the Sherman Antitrust Act. A settlement between OPIS (a defendant) and plaintiffs was preliminarily approved in July 2025, with OPIS agreeing to pay monies and cooperate. Amended complaints were filed in August 2025, and defendants' motions to dismiss will be briefed early in 2026. The company plans to vigorously defend itself.
• **British Columbia, Canada Lawsuit**: In September 2025, the company was named a defendant in a lawsuit in British Columbia, Canada, with allegations similar to those in the U.S. antitrust lawsuits.
• **U.S. Department of Justice Antitrust Division Subpoena**: On February 13, 2025, the company received a grand jury subpoena from the U.S. District Court for the Northern District of California, requesting documents related to the pricing of its PVC pipe and conduit products. The company is complying.
• **Securities Class Action Lawsuits (Westchester Putnam Counties Heavy & Highway Laborers Local 60 Benefits Fund v. Atkore Inc. et al; Coles v. Atkore Inc. et al)**: Two putative securities class action lawsuits filed in the second quarter of fiscal 2025, asserting claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10(b)(5). These claims are based on allegedly false or misleading disclosures related to the antitrust matters. An amended complaint was filed in August 2025, with a further amended complaint expected in December 2025, after which the company anticipates filing a motion to dismiss.
• **Shareholder Derivative Lawsuits (Blatzer v. Waltz et al; LR Trust v. Waltz et al)**: Two putative shareholder derivative lawsuits filed in the second quarter of fiscal 2025, naming the company as nominal defendant and its directors/certain officers as defendants. These complaints assert claims for breach of fiduciary duties, aiding and abetting, unjust enrichment, waste, federal securities laws violations, and insider trading (in LR Trust), primarily based on the same alleged conduct underlying the securities class action lawsuits.

Related Party Transactions

• The filing indicates that 'Certain Relationships and Related Transactions, and Director Independence' will be set forth in the company's Proxy Statement for the 2025 Annual Meeting of Stockholders, and is omitted from this 10-K. Therefore, no specific related party dealings are disclosed within this filing beyond the historical context of Tyco and CD&R, and the ongoing indemnification agreement with JCI (formerly Tyco) for Special Products Claims.

Stakeholder Impact

• **Shareholders**: Face potential negative impact on stock price due to the net loss, significant impairment charges, ongoing antitrust and securities litigation, and the uncertainty introduced by the CEO transition and expanded strategic review (including a potential company sale). Quarterly dividends are being paid, but future payments are at the board's discretion. The share repurchase program is active, but its timing and amount are subject to uncertainties.
• **Employees**: Will be affected by announced headcount reductions and the closure of three facilities in fiscal 2026 as part of restructuring efforts. The new 5-year labor contract for the Harvey, Illinois facility provides stability for unionized workers. The company emphasizes its commitment to safety, health, well-being, and talent development, but the CEO transition introduces leadership uncertainty.
• **Customers**: Experienced decreased average selling prices in fiscal 2025, which could be beneficial, but also face potential impacts from supply chain disruptions. The company's reliance on a few key customers (top ten accounted for 40% of net sales) means their financial health or changes in business relationships could significantly affect Atkore. Ongoing antitrust litigation related to PVC pipe pricing could also impact customer relationships or future pricing structures.
• **Suppliers**: May be affected by raw material price fluctuations and potential supply chain disruptions. The company expects suppliers to adhere to its integrity and sustainability standards. The potential divestiture of the HDPE business could alter supplier relationships for that segment.
• **Creditors**: The company's indebtedness levels (approximately $770.6 million) and associated covenants are a key consideration. The refinancing of the New Senior Secured Term Loan Facility impacts debt maturity and interest rates. The company's ability to generate sufficient cash flow to service its debt is crucial.

Next Steps

• Incur additional restructuring costs in fiscal 2026.
• Close three facilities in fiscal 2026 as part of cost reduction and strategic divestiture plans.
• Continue to monitor and model the potential impact of the One Big Beautiful Bill Act (OBBBA) and Pillar Two legislation.
• The board of directors is engaged in a succession plan process to identify the next President and Chief Executive Officer.
• The Strategic Review Committee will oversee, evaluate, and provide advice to the Board regarding its review of strategic alternatives, including a potential sale or merger of the whole company.
• Nominate Franklin S. Edmonds, Jr. for election to the Board at the 2026 Annual Meeting.
• Potentially increase the size of the Board by one director and appoint another new director by May 20, 2026, under certain conditions related to Irenic Capital Management LP's beneficial ownership.
• Briefing on motions to dismiss in the PVC Pipe Antitrust Litigation will be complete early in 2026.
• A further amended Complaint is expected to be filed in December 2025 in the securities class action lawsuits, after which the company anticipates filing a motion to dismiss.
• Complete additional remedial investigation and remediation activities for the Harvey, Illinois manufacturing facility's storm sewer system by December 2025.

Key Dates

Recommendation

Atkore Inc. is navigating a challenging period marked by a net loss, substantial asset impairment charges, and a significant decline in profitability for fiscal year 2025. The ongoing antitrust and securities litigation introduces considerable legal and financial uncertainty. However, the company maintains a strong liquidity position with increased cash and available credit. The announcement of an expanded strategic review, including a potential sale or merger of the entire company, presents both significant risks and potential upside, but the outcome is highly uncertain. Given the current headwinds and the strategic uncertainty, a 'hold' recommendation is appropriate. Investors should closely monitor the progress of the strategic review, the resolution of legal proceedings, and the company's ability to stabilize its core business segments before making further investment decisions.

Keywords

Electrical products, non-residential construction, Safety & Infrastructure, manufacturing, conduit, cable, metal framing, mechanical pipe, perimeter security, industrial markets, SEC filing, 10-K, financial results, impairment, debt, corporate governance, risk factors, Atkore, HDPE, antitrust litigation, strategic review