Atkore Inc. (ATKR) Earnings Call Transcript & Summary

We've Atkore with us today. We've got Bill Waltz, who is the President and CEO of Atkore and John Deitzer, who is the CFO.

Bill, as I walk over to you, just starting off. There's a lot going on in Atkore. As you know, you're undergoing a strategic review, which includes a lot of potential alternatives, potential sale of the company, maybe some divestitures. So any sort of update on to what's going on? And why did the Board, you think, decide to go this route?

Yes. So I'll try to do it, Andy, great kickoff question. Chronologically, I assume like all companies, but at least I speak for Atkore, the Board is always looking at what best strategically, whether it's over a 2- to 5-year plan or long term. So as we went through the process last year and had a -- the final review in July to go, it makes sense to do the following: one, focus more on the electrical industry itself. And that started to generate some of the things you see like the selling of an operation, Tectron in Wisconsin to the announcement of exploring alternatives with HDPE. And then we did decide as we got into, I forgot exactly, the October time frame to at least explore even a broader set of alternatives with potentially selling the whole company or any other derivation of that. And I think it's just a good process. I assume your follow-up questions, I'm very -- I have strong expectations of what we can do in running the company as a holdco publicly like we are now. But if it's best for the shareholders in the long term to consider potentially selling the company, the Board is open-minded to that on both sides. We're not rushing to sell by any means, but we're also not putting up some defense against it. And for specifics, there is no time frame. So I can't really get in and say, oh, wait here 2 months, but you're not expecting that either.

Got it. No, that's helpful. And maybe just to back up and also talk about the markets for a second. You highlighted leading indicators such as DMI suggesting favorable growth trends for Atkore. So I know data centers are a big contributor to that. We'll get more into that in a little bit. But maybe talk about the health of non-res markets. So like are you more constructive on the verticals? Like how are you feeling about that?

Yes. So a couple of things. One, I do think overall, most of the verticals are doing well. I'll try to bifurcate here in a second. But as you look for us, we've mentioned in the quarter, give or take, around a mid-single-digit growth. Half of that is going to come organically from some of the verticals that have been strong and this shouldn't come surprise. I just mentioned data centers. Obviously, they're up double digits for anybody. But health care is still strong. Manufacturing is still strong, multifamily housing is strong. And then on the flip side of that, again, shouldn't come as a surprise. But single-family home residential. I don't think it's any worse than it was, but I would just say it's anemic compared to pre-COVID or whatever else there.

Yes. Yes. And then just to get it out of the way, you're kind of halfway through Q2. Obviously, you just reported. Anything different or same trends? Has it been pretty cold in the East? I don't know if that means anything.

Not really with the following thoughts. One, when it is super cold like that, it does have an impact. Just to go any construction crew that's not on the site for 2 weeks is it's hard to make up that mythical man month and do something. The flip side of that is since we had our earnings call, I forget the exact date, but at the very end of January, some of that is that cold and the snowstorms that had hit and are projected. So I think we had worked those into our informal guide for the quarter already.

Got it. That's helpful. And then, following -- did you want to say that? So following that, digging more into data centers, I think you said you're seeing strong backlogs and commitments for orders. There's a significant amount of investment that needs to be built. So can you comment your positioning? It seems in certain cases, you are bypassing distributors working directly with hyperscalers. So like maybe talk about how Atkore approaches the data center market.

Okay. Yes. So -- and then let me, if you don't mind, with data centers, I'm also going to put chip manufacturer.

Sure. Great.

So -- but I'll bifurcate in 2 ways. To your question, you have selling through distribution, which I think, again, we've discussed on earnings, maybe future questions of our ability to have a broad breadth of products, to co-load products, our regional service centers, that as we're selling to a very large market, let's talk in the United States sold through distribution, we're growing with or hopefully, as we take market share faster than the market in that channel. Then on top of that, totally, as I say, separate from that is an initiative we kicked off a couple of years ago that I think finally, this year, we're seeing the ramp-up that we've talked about is selling direct, as you just referenced, to data centers and also the chip manufacturers in the U.S. and across the globe, where, as you can imagine, using the U.S., but it's the same, whether we're talking to PacRim, Europe and other parts of the world is the labor shortage and large data center chip manufacturers looking to be able to economize by having the same design, same supplier. And what we do is set up an off-site manufacturing location, take our products, our BIM designs and so forth and preassemble their racks for them and literally ship the rack that just needs a final assembly on their location. That has worked in the U.S. well. Obviously -- I say obviously, but I'm not going to mention names of you imagine the top 2 or 3 data center companies that have worked with us in the Pacific in one company -- or country, excuse me, have moved to a second country, have now taken us into starting up jobs where you have commitments to your point on backlog into Europe and talking about the states and literally talking about places like India. Now stuff like that could be 2 or 3 years from now. But finally, I really do think our data center initiatives as we get into Q3 and Q4, you're going to start seeing those results.

That's good to hear. And John, this one might be for you. You reported low single-digit volume growth in Q1, but you maintain your full year volume growth outlook of mid-single digits. And that does require some improvement in volume in the second half. So maybe you can bridge how you get there.

Yes. Great. And Andy, some of it is going to build on what Bill just articulated as well in a lot of ways. So we had 2.5%, 3% volume growth in the first quarter. And so there is an expectation of that low single-digit type market growth environment for the base business overall. And then how we get to the mid-single digits for our enterprise here, some of these initiatives like Bill had talked about, whether it is outgrowing on the data center chip manufacturers with our construction services. So combining the product sale as well as the assembly and the off-site installation, et cetera, that's a key part of it. And then certain other end markets, which I think we'll probably dig into a little bit more here in the conversation, but the solar business, we are anticipating in calendar 2026 to be stronger and to see the ramp, and we have the capacity and capability with the Indiana facility that's running very well. So we're excited about certain markets there. And then the more we can do with certain of these larger projects in the U.S., even absent the construction services element, but these are good markets in the U.S. from a volume perspective. So pretty pleased there.

That's helpful. And I think 2 big businesses for you guys, PVC and metal conduits did have a strong start to the year, high single digits. Do you expect that momentum to continue? Is there anything going on there versus the previous years?

Yes. I was going to say, I think where we've answered is, yes, we expect it to continue being pulled by things like data center, then I'd say our own self-help of where we have the co-load, the regional service center, the one order, one delivery invoice is helping us grow in good markets, I think, slightly faster than the markets.

Yes. And then I had this question about metal framing, cable management and construction services getting better through the year, but that's really data centers and some of the...

That was timing. They should be, as we look back at the end of this year, up mid-single digits versus -- we think an anomaly of year-over-year.

Yes. Yes. And Bill, you've said to me, I mean, I know you check in with your distribution base like all the time. So maybe talk about what they're saying to you from a channel perspective. I know it's hard to get a read into particular products, but how do you consider channel inventories right now, healthy? How would you think about that?

Yes, I would say normal, which is a good thing. So in other words, both to your point, with checking in formally and informally all the time with customers, I'll be with some next week, is that they see the markets like we do. You get all the indicators, the Dodge and the ABI and whatever else. But just checking with them, they see a reasonable growth. And then from a markets and their inventory, I would say normal. So there's not a destocking going on, but there's not an overstock going on. There's some about this time to kick off, call it, spring buy, even though we're in February of stocking up for summer where there's a seasonal pickup. So I would say we're -- in some ways, I'm going to say, knock on wood, back to normal life in many ways.

Yes. No, that's good. And maybe speaking of what normal is, let's talk about the current competitive landscape. So the big pricing improvement in several your markets, obviously, it spiked pricing, as you know, it's been coming down. So I think the debate has always centered around are your products -- are they commoditized? This whole sort of one order, one delivery, one invoice, like how differentiated is it? So maybe you can talk about why that relationship with distributors has been. I think it's still been good, but it hasn't helped you as much as maybe I would have thought around price versus cost.

Yes. So I'm going to spend a couple of minutes here because I do feel this is something either way over the last half dozen years I've explained this is -- so I'm going to go into tangent, if you don't mind, Andrew, to go...

We don't learn, though...

So not that -- Lisa, I'm not looking to buy a diamond ring or something. But if you think about to go a diamond, I would assume is somewhat commoditized like on the 4Cs, the kind of clarity and so forth that a diamond should be a diamond. But if I was to go buy a diamond, and I'm going to tie this quickly back to Atkore to go, hey, am I willing to pay a premium for a diamond store that I can trust that's a certified diamond that has a large variety that's going to be there if the diamond breaks or the ring breaks or a selection of settings, I personally would pay a premium for that. But if diamond prices cut in half, I'm still going to pay a premium, but it's relative to the market. That's how I think and that's what I want to always convey with Atkore is given to your point, the one order, one delivery, one invoice, the group rebates that we have, the bundling of projects from pricing, I can tell you with the majority of our customers, if they would have like 2 suppliers that are a preferred supplier, almost [ Carte Blanche ], we're one of those 2. And we do get a price premium, not every order, but in general, and we do get last look. But again, I'm making up fictitious numbers. If the price of our product was $950 by somebody in the past and could we get $1,000, perhaps a $50 premium? Yes. Now if pricing dropped in half and they're getting $450, can I get $480, $490, Yes. So we are getting last look premium. That premise hasn't stopped, but it's a premium kind of off the industry pricing. And I think that's how -- if it's got misconstrued that as pricing went from $1,000 to $500, I can still charge $1,000. That's not there. But the ability for us to co-load and bundle, we're seeing that business expand. So we should get a price premium across more products as we do it, but it's still a premium to the market.

Totally fair. So maybe then current thoughts on imports across your various products, right? I mean it seems like in your last earnings call, you're more comfortable in the import dynamics in steel versus PVC. So maybe talk about that.

Yes, I do think, again, it's asking us to look forward, but to go at least at past indications is with the tariffs and so forth that we're -- to your earlier questions in our earnings, steel conduits going up and steel imports are actually going down. Now we're talking percent up and percent down, but at least 5% down in imports here over the last 3, 6 months. So a reasonable amount, but it's not shut off, but it's moving in the right direction. That's helping our pricing power that we've communicated. PVC is still growing. Now whether that's the fact that like steel has a 50% tariff on it, if not more from China and PVC has a 10%. But I think overall, even there, it's at least normalizing more than if you go back over the last 3 years. So I'm comfortable with where it is at this current stage.

Got it. And Bill, like any comment on copper, aluminum price versus cost, given the recent volatility.

Yes, that's a challenge. Again, I don't -- we have it in our earnings guide. But the thing with copper that at least in my decade plus of leadership here is it's just moving so frequently, so dramatically within a day, like the ideal situation, I'm not even picking a commodity, but pick PVC, a resin supplier announces a price increase 30 days out. We get out in front of it and announce our price increase. We actually get priced before the COGS hit us. Here, we're, all of a sudden copper is dropping, going from $480 to $560 in 2 days. By the time you announce a price increase, it's sitting on the same hand by the time your price increase goes out, copper has dropped again. It's like a sign wave is good for us and change, but not a sign wave that's so dramatic and within 24 hours like there. So that's a little bit of a challenge here just trying to price the market. And obviously, distributors are aware of that. They're holding back on buying to see how things settle out. And then for aluminum, prices are up with the tariffs and so forth. And the only anomaly we've called out in our earnings is the fact that we do buy our share of the country from Canada. So we're facing a tariff that somebody is purely vertically integrated in the U.S., we're facing slightly more tariff. Again, we have cost actions designed to mitigate that, but that's a 6-month year-long process to work through that.

And to be clear, Bill or John, you put copper kind of in your guidance that volatility, right, more or less?

Yes. I mean, I think it's tough to predict copper, though, I mean, what could happen, the dynamics there to Bill's point. So I mean, where we're at so far this year, but if there's future changes, obviously, I mean, the market, when it sees those spikes within 24, 48 hours, people start kind of being cautious. And so we'll just monitor and continue to watch that as we move forward.

That's helpful. And I've asked you this before, Bill, but we are pretty close to a Supreme Court decision, I think the common belief is that the administration would just move more towards Section 232 like probably not too much change for you guys, but like...

Yes. So very little. So great question. It's nothing else to clarify for any shareholder out there is most -- like all the steel tariffs, I don't want to say all because you get the IEPA on top. But what I've talked about today is what you just referenced is 232 tariffs or what's called 301 tariffs against China. That's not part of any Supreme Court decision. It's just what's called IEPA. And so really where that's impacting is I referenced like the 10% tariff on PVC products. So I would say I like the tariff in general, but compared to 50% and 80% and 90% tariffs, it's -- that's not going to change the world for us.

Got it. That's helpful. And then sort of backing up, maybe just talking about margin, in general, right? Like if I just look at margins below pre-pandemic levels, right? So maybe elaborate on the self-help capabilities that you have when it comes to getting your margin profile back up. I know you're working on initiatives. You actually had good productivity last quarter. So optimizing manufacturing. Can you quantify the impact from these actions and how soon we can see them benefit...

John, do you want to?

I'll take that. I mean I think you've mentioned it, there's a couple of different areas to touch on here that I think will impact margins, whether it's this year, but also moving forward. You did talk about -- we've announced 3 facilities where we're stopping our manufacturing and closing those from a manufacturing standpoint. The benefits associated with those would be roughly in the $10 million to $12 million from those facility closures. We would start to see that potentially come through at the back end of this year, but really more in our fiscal 2027 as we're really winding those down here, mid-calendar 2026 kind of time frame. But those are on track and going well. Those are not easy projects, but the teams are working on those diligently. Another area that we see some of the divestitures as well. So we've targeted certain businesses that weren't necessarily meeting our targets, whether it was from a margin perspective or return on invested capital. And we've been able to divest 2 businesses here, whether it's our recycling business out in the Pacific Northwest or the Tectron 2 business that Bill mentioned, and those were dilutive from a margin perspective. So those are opportunities for us to continue to grow. And then we have been pretty strong from a productivity standpoint as we saw here in the first quarter. And I think that continue -- we anticipate a lot of the projects and initiatives will continue to have benefits. And as we get the volume growth, we're going to get a lot of leverage off the cost footprint that we do have and have stronger incrementals as we look forward. So with the good market conditions that we're thinking for the Electrical business, I think that's positive for us as we think about margins moving forward.

That's helpful, John. And then this one is probably for you, too. You were asked a question on your last earnings call regarding the $50 million of incremental headwind in '26 versus '25 on price versus cost. And I think in your answer, you said price versus cost could go positive in the second half. So maybe give more color and confidence of that.

Yes. And as I take a step back, when I look at the first quarter, in particular, our prices were down 2.7% roughly, so 2.5% to 3% here in the first quarter of 2026. I look back, pricing was down 12% in the first quarter of 2025, right? And so when you look throughout the quarters in fiscal '25, I think our second quarter, our prices were down 17%, right? And so we're just seeing a significant moderation here. I think on the last call, we talked about we've had 4 sequential quarters of price increases on our steel-related products. Now the underlying raw material, hot-rolled or cold-rolled steel has also increased over that period, but we've been able to maintain and increase our prices as well. So taking another step back, I think one of the items about Atkore is the breadth of the portfolio, right? I mean we've talked at length about the normalization in our PVC prices for several years now. But we have other product categories that do have a strong demand and that we have a really good footprint or we have maybe a more specialized product, and we have the opportunity to be positive on a price versus cost standpoint there. So I think there's a lot of puts and takes. And then just to talk about another initiative that we've been working on very much internally. But I think Bill mentioned in the last earnings call, we've really somewhat embraced 80/20 and focusing on a SKU rationalization initiative. I think that's going to be positive for us as we start to look forward.

Any questions from the audience? Anybody want to ask a question? While we wait for questions, let me ask you about that 80/20, John, just in the -- like where are you in the stage of development there? And because it could be pretty impactful to your margins, to your point.

Yes. I would say very early there. But I think the mechanical business is an area where an opportunity for us to see what is the right set of customers versus the assets? And then how is that complementary with the Electrical business? I think there's a very good opportunity. But really early days for us here. But I think the opportunity moving forward over the next several years because it isn't just a onetime initiative, right? And I think it's ongoing and the folks in the industrial space who've done it well have really embraced it over a multiyear period. So I think that's where we'll start to see it. But I think that will be a contributor to us as we start to look forward.

You guys think that you have a lot of SKUs, let's just say, like...

If I can add 2 things there. So I'll answer your question and give some background. Literally, we just had a deep dive for an hour plus yesterday, 80/20 with the teams, and I forgot the exact number of thousands or tens of thousands of SKUs. But again, I don't want to over just micromanage SKUs, but a specific thing of dropping 10% of what I'll call active SKUs. Like that was one of the questions like, okay, you cancel a part number, no one bought like symbolism versus no, these are parts that therefore, mean less change over time and stuff like that. And one of the neat things that was driven -- we benchmark obviously well-run companies driven from my staff down and so forth. But in the review, for example, with our Safety and Infrastructure group, they're seeing the results already. So like literally, when you're talking to the product manager, the general manager, you can feel the excitement that they bought into, hey, I'm actually making more profit, my factory productivity is better. So this, I think, will expand rapidly. But to John's point, we're in the -- the good news, we're in the first inning of a 9 inning game. So there's lots of opportunities.

That seems interesting. And then maybe it's for John or Bill. Like I think you mentioned that you think you can return to year-over-year growth in adjusted EBITDA in '27. I understand it's early self-help and strategic divestitures are progressing. But can you talk about your confidence in that sort of comment and EBITDA inflecting in '27?

Yes. It is still early, and I don't want to get too ahead of ourselves, but we have indicated that we believe we'll be up year-over-year in earnings and adjusted EBITDA in '27 versus '26. I think as we look at the back half of this year, obviously, embedded within our outlook is a very positive second half with a lot of ramp, whether it's certain initiatives like we've talked about on the construction services side with data centers or on some of the solar business. And so some of that should hopefully continue on into '27. We also continue to expect solid markets in '27, especially here in North America. And if there's any type of potential change, whether it's in other end markets that have been weak like residential, those could be positive contributors. So I mean, there's a lot that we're watching and monitoring, but still early. So as we progress through the year, though, hopefully, we can give some updates.

Yes, John, and to that point, like with you understand the markets of the markets, like how much is that going to control the profitability, though? There does feel like a lot of self-help going on as we go this time next year versus today?

Yes. I would just say that the team is very focused on cost control, especially from an operational perspective. We've had a lot of initiatives. I think we're starting to see some of those really progress in some of the areas where we have had some challenges. I think we've worked through them now. I mean we've talked about the production capability and how we're running from an efficiency standpoint in some of the newer facilities. And we expect that just to continue to get better. And that's because they're running so well, that's enabled some of the facility closures that we talked about earlier that they can absorb and take on that capacity and still have room to meet the market growth. And I mean, I think that's the opportunity as we look at the leverage moving forward. And these investments that we have made, some of them will continue to help us drive efficiencies in other areas of the business as well.

Got it. And you guys alluded to solar briefly. I think you expect an uptick in the second half of '26. But more broadly, how are you thinking about the torque tube business given the administration, like I can't tell how supportive they are, maybe they're not that supportive. And then your facility, as you mentioned, is up and running. So should it continue to get more efficient as you go on?

Yes. I'll take the lead on that one, John. Yes, Andy, I think I'll try to hit a couple of your points or questions there. One, solar is going really well, even to your point, the second half of '26. I would even expect like starting now. We're seeing it in a good way. It's not like a date, but to go customer orders are there, the factory is coming. And I think things like that build on each other. In other words, to John's point, the more efficient the factory runs, the more orders we have capacity for, the more our productivity goes up, and it's moving along, and we do have orders for the year. Obviously, a customer can move and order out and stuff like that. But as we -- your earlier questions on, hey, what makes the second half of the year, and John Deitzer answered, one of those is solar, it's really doing a great job right now. As for the administration trying to forecast right now, incentives are in place. And even if they don't, I think one of the things if you go back a couple of years where there were no incentives and there was no tariffs. So at least there to go for the amount of solar growth if you're just focused on USA manufacturers, I think we're in a good spot. I had dinner on Monday night with the leader of that division, and he was talking like literally to the point that I'm seeing questions on my ops team, when can we increase capacity more as he's lining up customers for the second half of the year and FY '27. So I think we're in a good spot.

Yes, that's good. So maybe moving over to water. You've been making investments in your water portfolio. I think you've got some maybe growing pains in the business. You transitioned from, I think, plumbing to more of a focus on municipal spending. So can you update us where you are with your product offering and expand on the demand expectations for this vertical?

Yes. So a couple of things. To your point, we have -- I don't want to call it 80/20, but the pruning, it falls under there. But pruning, plumbing that doesn't make us, at least for us, but I think in the industry as a whole, I don't know. More margin and municipal large project checks, I can get into specifics, then off the plumbing. And it is moving ahead. The factories have the products made now. It's a kind of multistep. First, you have to make the products and you need to get them certified, NSF certification that can take a while and it's by location. And then from there, you need to go out to the municipalities and get like that local on making this up. But Dallas, Tampa, Miami, approval from that municipality to sell and get spec-ed in. So those things have taken longer than I probably would have thought 3, 4 years ago. But we're through most of that now. Obviously, there's 1,000 cities, every city, but it's ramping up. And again, I want to stress like the way to look at municipal for us. It's never been a start a new plan up or whatever as much as maybe an extra extrusion line, some of it is using extra capacity. And from there, it's one of those things, it depends on how you look, we are a very small single-digit player. But we buy resin effectively. We have 9 facilities. We are already in the market, and we just expanded our product portfolio. And this is one where you look and say, hey, if we have 1% or 2% market share, can we double our business from 2% to 4%, literally 100% growth for us, and that's framing as 20% of our PVC. So it can be a good growth driver for us, but not a major impact that the big players in this market are going to -- somehow, they shouldn't be reacting to us.

Right. And that leads me to my next question. Is it different competitive landscape, you're the small guy, which is different?

Yes. Again, everybody can think differently on this, but we are the small guy in this. Therefore, I think we can opportunistically grow quickly, pick jobs off and not be as concerned on if you're the guy with a larger market share, trying to double market share, what's the impact here and so forth. So we can just think more nimbly and so forth and grow with customers. So I think we're in a good position.

Got it. And then you mentioned residential in the beginning of the conversation. It's been weak for a while, as you know. But maybe residential stocks have done better. So talk about like what you're looking for, for any sort of stabilization or recovery. I assume you haven't seen it yet. And what do your distributors tell you about that side of the business?

Yes. So a couple of things going on there. So again, trying to be objective versus how do I sell to shareholders. To your point, their stocks may be going up. One of the things we look at is almost an indicator, I'm not saying the right thing, but without naming the major public companies, but obviously, they're out there is when they do their earnings on how much money they're spending on land development because that's the big mover for us. It's like you put a single home in a new development, it's nice, but you just think about the PVC. It's a new subdevelopment coming in where you're running all the lines to that subdevelopment down every street, larger-sized conduits. That's the needle mover. Up until now, like, I'm saying in January when I reviewed and prep for earnings, we haven't really seen that yet. But again, now I'm conjecturing here. Fed drops their interest rates another 50 basis points. And to your point, stocks are -- prices are already going up, maybe that's going to start swinging. And the good news, we do not have that baked into any forecast. So if that turns around, that would be a great tailwind to help drive our business.

Yes. Helpful. And then maybe just an update on HDPE. I know you're planning to sell the asset. But maybe comment on the traction you're seeing from potential buyers. I assume you're not going to tell me time line, but it seems like -- what's hard about HDPE from my point of view, right, is I know it's a big telecom exposure. I do cover companies who do fiber infrastructure work and pretty solid demand. So like why isn't that sort of flowing through to you guys?

Yes. Well, I think in some ways, let me bifurcate a couple of things. You're right. First off, I'm not going to get specific, but we are working through the process, and there's no rush or there's nothing to say if we don't get what we think is a fair deal that's best for our long-term shareholders and so forth. But we are looking to go, is it fit in the exact electrical infrastructure or strategy? No. And therefore, let's do a strategic review, and that's progressing as expected. To your point, fiber is growing. HDPE is growing quicker than the Atkore portfolio as a whole. The challenge becomes a little bit is also, as you know, Andy, is both demand, which is growing. I didn't even say double-digit demand growth, but is supply still there, and there's a lot of inventory. So the pricing pressure just because demand is growing, does it turn into good margin business and so forth. So I think we saw the right. It still makes prudent sense to consider strategic alternatives, and you will be the first to know like everybody else...

So then maybe let me ask you about -- you always have a good amount of cash. You bought back a lot of stock over time. It seems like you've kind of paused M&A. So maybe provide some clarity on what you do now. I think you slowed down repurchases this quarter after being active for a while. So is it fair to assume that you might accumulate a little cash, pay out dividend? What are you going to do?

Well, we just announced our quarterly dividend, which we've had in place here for just about 2 years now. So pleased with that. And so I think as we're working through some of these items here in the near term, we are a little bit sensitive and focused the dividend and CapEx. But long term, share repurchases have always been a key part of our capital allocation strategy. And so I think that's always going to be a key anchor point for us. Near term, we're a little bit limited here as we're working through a few of these items and evaluating. But fundamentally, though, there was a time previously, especially as part of the Atkore Business System, where M&A was an effective tool for us. That is a key part of our ability to do more through the regional service centers, et cetera, has -- can expand our value proposition and things like that. But near term, I think we're focused on some of the more internal items right now.

Got it.

The only thing I'd add to that also, but again, let's go through a strategic review is I had purposely held up some M&A with the thought of all the investments we made in growth initiatives. But if you reflect back and going, solar is hitting, global construction into data centers is hitting. So the management and productivity, 80/20 is working. So the management bandwidth is opening up. Now we got to get through the strategic review. But I think Atkore, if we stayed as a public stand-alone company, I think that we're ready to turn that lever back on.

Yes. Bill, could I just go back to imports for one second. Like in terms of the metal side, pretty stable now with the competition in the Mexican company?

Yes. Actually, it's working in our favor slightly. So again, to go -- if you quoted or referenced to go we're up -- we had in our earnings charts, we're up in our -- metal framing is down, but that was the timing. But metal conduit, and that's where the imports were, is growing at a good rate, both for us, and I assume the competition. And the imports are actually down. I'll just use a round number, but around 5% a quarter, 6 months, wherever there, it depends on what time frame. So it's working for us.

Okay. Question? Hold on to the mic.

I think you've talked about factory closures. Like when you think about your footprint, do you have like more optionality for optimization? And then does that impact your one delivery, one invoice moat that you have?

Yes. So yes, there's -- if I go back and go pre-COVID, post-COVID, we can go back and even in future earnings or for investors to go, we've always probably closed a rooftop plus a year. I mean I go back to being here 13 years and being in Florida, go, here's a Fort Largo over near Tampa and just walk through Carrollton, Ohio and things. So it's happening this year, probably more aggressive than ever, especially 1 of those 3 facilities is depends on how you measure it, but I'd say probably our second largest facility. So these are, in this case, at least one is a massive facility. But no, there is obviously future opportunities. On the same hand, I don't think it will impact our one order, one delivery, one invoice because we're taking products and efficiently sending full truckloads to our 6 RSCs, regional service centers, and then shipping out from there like a hub-and-spoke type of system. So we'll still be able to maximize that. I had a great review with our team yesterday on how we're picking that up. We're simultaneously improving our delivery performance, and we're reducing costs of our RSCs, which is what we expect to do, but it's moving along well right now.

Last question, Bill. So what are the top 2 or 3 innovations and structural changes affecting your company over the next 5 years? Are there any emerging industry trends that are perhaps being overlooked in the current fiscal year?

Yes, I'll try -- a great question. So nothing is going to come as a surprise, but I think going for us as a whole over the next 2 to 5 years is the strategic review of just saying let's focus more on our core electrical. Let's continue without naming things, but I do think there could be potentially in addition to HVAs, other small things like our Tectron business across the globe that we'll continue to look at are we the rightful owner as John Deitzer brought up, whether it's margin, strategy, ROIC. So we're going to keep doing those type of things as we move forward. And then also the good news for Atkore, if I look more holistically, call it a megatrend, is purely the thought of anybody in the electrical space, it's a good space to be in data centers. It's going to keep growing. But especially in the U.S., I think worldwide, we have a shortage of skilled trade. So as Atkore continues to do things we talked about, but a new product vitality of over 10% to drive labor savings products, even just for distribution to have the RSCs and be able to co-load products into one order. I think all those things will help. And the other thing that we're just starting, so I don't know if we'll be talking about in the next year, but it's how we add artificial intelligence on top to make it a simpler process for our customers. So I'm excited both for this year, but really for the future of Atkore.

Bill, John, thank you very much. Appreciate it.

Great questions. Thanks, Andy.