Atkore - Q1 2026
February 3, 2026
Transcript
Operator (participant)
Good morning. My name is Carly, and I will be your conference operator today. At this time, I would like to welcome everyone to Atkore's Q1 Fiscal Year 2026 Earnings Conference Call. All lines have been placed in a listen-only mode. After the speaker's remarks, there will be a question-and-answer session. If you would like to ask a question during this time, simply press star, followed by the number 1 on your telephone keypad. If you would like to withdraw your question, press star 1 again. As a reminder, this conference is being recorded. Thank you. I would now like to turn the conference over to your host, Matt Klein, Vice President of Treasury and Investor Relations. You may begin.
Matthew Kline (VP of Treasury and Head of Investor Relations)
Thank you, and good morning, everyone. I'm joined today by Bill Waltz, President and CEO, John Deitzer, Chief Financial Officer, and John Pregenzer, Chief Operating Officer and President of Electrical. We will take questions at the conclusion of the call. I would like to remind everyone that during this call, we may make projections or forward-looking statements regarding future events or financial performance of the company. Such statements involve risks and uncertainties such that actual results may differ materially. Please refer to our SEC filing and today's press release, which identify important factors that could cause actual results to differ materially from those contained in our projections or forward-looking statements. In addition, any reference in our discussion today to EBITDA means adjusted EBITDA, and any reference to EPS or adjusted EPS means adjusted diluted earnings per share. Adjusted EBITDA and adjusted diluted earnings per share are non-GAAP measures.
Reconciliations of non-GAAP measures and a presentation of the most comparable GAAP measures are available in the appendix to today's presentation. With that, I'll turn it over to Bill.
Bill Waltz (President and CEO)
Thanks, Matt, and good morning, everyone. Starting on slide 3, we are pleased with our Q1 performance. We achieved net sales of $656 million and Adjusted EBITDA of $69 million. Both were above our outlook range. Our $0.83 of Adjusted EPS was also above the top end of our outlook range. Organic volume increased 2% in the Q1, driven by strong performance in our electrical segment. Our teams have been focused on improving manufacturing efficiency and controlling costs, which has helped generate over $30 million of productivity savings year-over-year. We also continue to advance our strategic alternative process to evaluate opportunities to strengthen our business and maximize value for our shareholders. During the quarter, we completed the divestiture of our TekTube mechanical tube product line and manufacturing facility.
The sale further enhances our focus on the electrical infrastructure portfolio and is aligned with our broader 80/20 Initiative, aimed at directing our manufacturing capacity to the electrical end markets. In the second fiscal quarter, we expect to complete the previously announced exit of three manufacturing facilities. We will continue to provide updates on our ongoing strategic alternative process as appropriate as we move forward. I am also pleased to highlight the release of our fiscal year 2025 sustainability report, which we recently published. This report details our ongoing initiatives and accomplishments on our 2025 goals. Looking ahead to the remainder of 2026, we are on track to deliver our FY 2026 outlook that we presented in November. We expect our net sales to be in a range of $2.95-$3.05 billion.
Our net sales outlook adjusts for approximately $40 million of annual sales related to our TekTube mechanical tube product line, resulting from the divestiture. Our adjusted EBITDA between $340 million and $360 million remains unchanged. Adjusted EPS is expected to be in the range of $5.05 and $5.55. We remain focused on our core electrical infrastructure portfolio, which is supported by broader mega trends and where we see the most opportunity to grow. Our team is focused on continuous improvement initiatives in our plants and providing unmatched service and quality for our customers. By doing so, we are confident in our ability to drive sales, volume, and profitability. I'd like to take a moment to thank all of our employees for everything they do to support our key stakeholders.
With that, I'll now turn the call over to John Deitzer to talk through the results from the quarter and provide more details on our outlook.
John Deitzer (CFO)
Thank you, Bill, and good morning, everyone. Moving to our consolidated results on slide four. In the Q1, we achieved net sales of $656 million and Adjusted EBITDA of $69 million. Adjusted EPS was $0.83 per share, compared to $1.63 in the prior year. Our tax rate in the Q1 was 3%, a decrease from 21% in the prior year. The Q1 tax rate reflects a one-time discrete benefit associated with tax planning related to a foreign operation. Turning to slide 5 in our consolidated bridges. Organic volumes were up 2% compared to the Q1 of fiscal 2025. Our average selling prices declined 3% during the quarter, most of which came from our PVC conduit products, which were partially offset by increased average selling prices for our steel conduit products. Moving to slide 6.
Our 2% volume increase during the Q1 was driven primarily from our metal electrical conduit and our plastic pipe conduit product categories.
Both product categories benefited from healthy non-residential end market demand. Our metal framing, cable management, and construction service businesses saw lower volume compared to the prior year, primarily due to the timing of certain project-based work. We expect growth from these businesses throughout the duration of the year. Our mechanical tube business, which includes our solar-related products, is also expected to grow throughout the year due to the expected timing of large utility-scale solar projects. As we previously communicated, we are shifting certain available capacity from our existing non-solar mechanical products to our electrical conduit products as part of our 80/20 Initiative. We would expect that to continue throughout the year to help support electrical end market demand. Overall, we continue to expect mid-single-digit volume growth for the full year.
Turning to slide 7, net sales increased year-over-year in our electrical segment, driven by higher volume growth, offset by lower selling prices. Adjusted EBITDA margins compressed in our electrical segment due to higher material costs and lower average selling prices. Net sales in our S&I segment were lower compared to the previous year, primarily due to lower volume. Adjusted EBITDA and adjusted EBITDA margins both increased year-over-year due to increased productivity. As Bill mentioned earlier, Atkore recognized over $30 million of year-over-year productivity, most of which was generated from our S&I segment. Turning to slide 8, we ended the quarter in a favorable cash position, despite a year-over-year decline in our operating cash flow. Keep in mind that our Q4 FY 2025 operating cash flow was our strongest quarter, generating approximately $200 million.
Our Q1 in FY 2026 ended before we typically receive large collections from our accounts receivables. Those cash collections fell into the first part of our fiscal Q2. Our results included approximately $18 million in cash proceeds recognized from our TekTube divestiture. These proceeds represent a portion of the divestiture proceeds. We anticipate receiving an additional $7 million in the Q2 from the sale of our real estate, where the products were manufactured. Our balance sheet remains in a strong position with no debt maturity repayments required until 2030. Moving to slide 9. We continue to expect volume growth to be mid-single digits for the full year. Our volume growth expectations are a combination of core construction growth, as well as contributions from certain growth initiatives, such as solar and global construction services.
The recent Dodge Momentum Index forecast continue to support growth in the core non-residential end markets. As a reminder, we are no longer providing quarterly guidance. Rather, we will continue to update our full-year expectations. In November, we communicated that our full-year expectations are weighted more toward the back half of the year. We still believe this to be true. With that said, we expect our Q2 to be similar to, but slightly better than our Q1 results from an Adjusted EBITDA perspective. For the full year, we expect net sales to be in the range of $2.95-$3.05 billion, and Adjusted EBITDA in the range of $340-$360 million, and Adjusted EPS in the range of $5.05-$5.55.
With that, I'll turn it to John Pregenzer to give an update on our end markets and our long-term strategic focus.
John Pregenzer (COO and President of Electrical)
Thanks, John. Turning to slide 10. Last year, we announced our intention to consolidate three manufacturing facilities. This decision helps us to prioritize our portfolio for domestically manufactured electrical infrastructure products. These actions are part of our broader 80/20 Initiative to serve our customers efficiently while also creating a more streamlined cost structure. We are on track to exit these facilities in our second fiscal quarter. As John mentioned, our expected volume growth in fiscal 2026 is a combination of base market growth and contributions from certain key strategic investments. The Dodge Momentum Index continues to suggest favorable forward-looking indicators of growth.
A recent Moody's Ratings analysis suggests that $3 trillion of investment will flow into the data center market in the next 5 years to support the need for servers, computing equipment, and new power capacity. Our portfolio of metal framing, cable management, and the entirety of our conduit product line are well positioned to benefit from this growth. As the electrical industry plans to support these growth figures, available labor continues to be top of mind. The Associated Builders and Contractors estimates that approximately 350,000 additional workers are needed to meet the demand for construction services in 2026, and that number grows to 450,000 in 2027. Atkore has a history of prioritizing labor-saving opportunities for installers through new product development.
Our PVC junction boxes, 20-foot conduit, and patented MC Glide armored cable are just a few examples of how Atkore has made construction installation more efficient. The electrical industry is a great place to be, and we are working to meet the market demand by executing our Atkore Business System centered on strategy, people, and process. With that, we'll turn it over to the operator to open the line for questions.
Operator (participant)
At this time, I would like to remind everyone, in order to ask a question, press Star, then the number one on your telephone keypad. We'll pause for just a moment to compile the Q&A roster. Your first question comes from Andy Kaplowitz with Citigroup.
Andy Kaplowitz (Analyst)
Good morning, everyone.
Bill Waltz (President and CEO)
Morning, Andy.
John Pregenzer (COO and President of Electrical)
Good morning, Andy.
Andy Kaplowitz (Analyst)
Morning. Can you give us a little more color on the core markets that you're seeing? I know you just talked about it, but it looks like core PVC and metal conduit markets, in terms of volume, accelerated a bit in Q1 versus what you saw in FY 2025. So maybe you can talk about that. And then conversely, I know you've talked about construction services ramping up at some point. I mean, there are a lot of mega projects out there, particularly in data centers, as you kind of cited. So when can we see that start to move?
Bill Waltz (President and CEO)
Yeah, Andy, I'll start here and then turn it over to either of the Johns. Yeah, you are correct. Again, John, I'll defer to you if we want to get to precise numbers. But PVC, we're seeing good growth with steel conduit. We're seeing good growth with, you know, good markets overall. And then, regarding data centers, it truly is just the timing of year-over-year in those projects. We are seeing, again, without giving you precise numbers, we are seeing strong backlogs and commitments for orders and expansion opportunities. So, you know, we're bullish on this fiscal year, and then, you know, even more so as we get into fiscal year 2027 and so forth.
Andy Kaplowitz (Analyst)
Bill, sorry, did you want to say something else?
John Pregenzer (COO and President of Electrical)
No, Andy, just a few more information on that is strong Dodge Momentum Index in the quarter. We could really see obviously being driven by data centers. Warehousing is strong, and education, healthcare, some other end markets, we're seeing some growth. Specifically to PVC, we have seen some increases from the border wall, so that's been one of the areas that's been driving some of the stronger PVC conduit demand.
Andy Kaplowitz (Analyst)
Very helpful color, and it begs the question, obviously, it's early in the year, but you didn't raise your EBITDA and EPS despite, you know, pretty good Q1, especially given the good productivity. So is there anything incrementally you're concerned about, or is it just really early in the year?
Bill Waltz (President and CEO)
Andy, I'll jump in here. I mean-
John Pregenzer (COO and President of Electrical)
Yeah, go ahead, Bill.
Bill Waltz (President and CEO)
Oh, go, John.
John Pregenzer (COO and President of Electrical)
I'll start here, Andy.
Bill Waltz (President and CEO)
Start, Andy. Yeah.
John Pregenzer (COO and President of Electrical)
Yeah, Andy, I think it's just we're Q1, we're pleased with the results here. I think as we look forward, we still have a lot to do, so, I can walk through some of the other dynamics here, as we're seeing. But just, I think, the good Q1 and want to maintain where we're at. Bill, anything you wanted to add?
Bill Waltz (President and CEO)
No, I was going to do very much the same. It's like to sit here, let's hit our numbers, grow. We had great productivity that we called out. So, I mean, things are moving along at this stage, but before we get too far out ahead of ourselves, Andy, let's get in another quarter before we even start talking about the second half of the year. Because there still is, you know, a reasonable pickup in Q3 and Q4, so, it just seems like the wise thing to do at this stage.
Andy Kaplowitz (Analyst)
Agreed. And then just one more quick one. An update, I think you talked about the competitive environment a little bit. You mentioned PVC conduit pricing still down, but steel conduit up. I think you said, import competition in PVC conduit remains, but sort of what are you seeing in the two major markets there, particularly from the foreign competition?
Bill Waltz (President and CEO)
Yeah, so specifically for foreign competition, I'll start with PVC and go to steel. PVC continues, the imports continue to come in, so, maybe not surprised, because again, there's very few tariffs. It's a 10%, and as we walk through, you know, it all depends. This is not new news on the, what somebody claims is the value. So, I don't think anything's dramatically changed there, but it's not like it's necessarily improved. But it's still probably, again, we don't have precise numbers on the market size, but it's still probably less than 10%, you know, of the whole market. So, but it's growing like our PVC business is also growing.
Steel, I think there is moving more in our favor where, you know, again, we had strong growth and, you know, give or take for the last three months, I want to say from a year-over-year perspective, it was down low to mid-single digits for imports. So while they're stepping back slightly, you know, we're continuing to grow. And then I think in the prepared remarks, but if not, you know, both our quarter-over-quarter, like, excuse me, sequential quarters are up in price and also sequentially, you know, up in margins and so forth. So moving, you know, definitely in the right direction with metal conduit.
Andy Kaplowitz (Analyst)
Appreciate all the color.
Bill Waltz (President and CEO)
Thanks, Andy.
Operator (participant)
Your next question comes from David Tarantino with KeyBank Capital Markets.
David Tarantino (Senior Research Analyst)
Hey, good morning, everyone.
Bill Waltz (President and CEO)
Good morning.
David Tarantino (Senior Research Analyst)
I appreciate there's an update specific on the strategic review, but maybe could you give us some more color and an update on the cost-saving effort, what you expect productivity to contribute following the nice start to this quarter, and particularly around the exit of those three facilities that's expected to be completed here soon?
Bill Waltz (President and CEO)
Yeah, so I'll walk through it again, color from the team here. But, so strategic alternatives, we're still being worked. So but again, as we've already said, you know, the board doesn't have a timeframe, so I don't want to sit here and give, you know, any more handicap on things or timeframe or so forth. But, you know, we're continuing to progress through different things. Obviously, we mentioned small things like the divestiture, TekTube. We're still moving forward with HDPE, probably at a faster pace than you could, you know, we imagined in the overall, you know, examination, if we do consider, you know, Atkore as a whole corporation and so forth. So from that standpoint, moving forward, a phenomenal quarter with productivity. I expect this to be our best year, probably for productivity.
On the same hand, you know, realistically, we're not going to have $30 million every quarter. But, you know, we started a good January, and, you know, it should be last year was a strong productivity, and this should be a good year of productivity. And then finally, to the three key plant closures, I'll let John Pregenzer or John Deitzer add a little bit more color. But I think to what John Deitzer has mentioned in the past, that, you know, it's $10-$12 million, and we think potentially more, you know, as we get things running. And I would say they're running, you know, the closures at a, you know, smooth and ready to go on schedule, compliment to John Pregenzer, if he wants to add anything to that.
John Pregenzer (COO and President of Electrical)
No, Dave, I think everything's going as planned. Seeing favorable transfer of the manufacturing equipment and startup, hiring of the people in the plants that are getting the additional capacity is going well. The training is going well, so we don't see any issues with executing all three of those actually on plan and on schedule.
John Deitzer (CFO)
Great. Then just to add, David, just a little bit of color on the productivity dynamic throughout the year. We are very pleased, as Bill mentioned, around the first quarter's performance, and as John mentioned, we're really pleased with where we're going. We have a little bit of dynamics quarter-to-quarter this year, just meaning the Q2, in particular, last year in Q2 was the high watermark for us from an EBITDA perspective, and so the comp will have a little bit of a dynamic this year, Q2 year-over-year. That being said, though, we're really pleased with the overall plan for annual productivity this year, and then think some of these initiatives will continue to benefit us as we move into 2027.
But in the Q2, we're not likely to see the strength here that we saw in the Q1, largely due to the year-over-year comparison item. Hopefully, that helps him frame it a little bit, the dynamics.
David Tarantino (Senior Research Analyst)
Yes, thanks. That's helpful. And then nice to see the price declines on the top line narrow, but maybe to put a finer point on price cost, could you give us an update on what you have here embedded in the guide? It looks like much of the year-over-year headwind that was previously expected has kind of already occurred. So how should we be thinking about that previous unmitigated $50 million headwind now and the offsets to it?
John Deitzer (CFO)
Got it, David. Yeah, it's a good question. The price versus cost headwind that we have this year is largely loaded here in the first half. You see the impact in the Q1. We, again, I think the Q2, year-over-year, we're going to have a price versus cost unfavorable. I don't want to start guiding price versus cost, you know, quarter-to-quarter, but we do anticipate the totality of the back half to be price versus cost positive here. Might be very slightly, but you know, that's you know, potentially here as we're ramping. It is very much loaded here in the first half. So, you know, we'll see how the dynamics play out throughout the year. But right now, to your point, very much a first-half issue here that we're working through.
David Tarantino (Senior Research Analyst)
Okay, great. Thanks for the color, guys.
Bill Waltz (President and CEO)
Thank you, David.
Operator (participant)
Your next question comes from Chris Moore with CJS Securities.
Chris Moore (Analyst)
Hey, good morning, guys. Yeah, so-
Bill Waltz (President and CEO)
Hey
Chris Moore (Analyst)
Terrific margins on S&I. Is, is that 16.2%, is that sustainable moving forward or just, you know, kind of any thoughts there?
John Deitzer (CFO)
Thanks, Chris. I mean, I feel like a little bit of a broken record. I've said this a few times. We anticipate that business to be more in the, let's call it, 12%-14% adjusted, even at the margin level. It does have some mixed dynamics when we think about the growth in solar, et cetera, you know, that might have a little bit of margin dynamic with it. But that team has done a very nice job of performing from a productivity perspective and has driven those margins higher. So I do anticipate, you know, some of the mixed dynamics probably will level out a little bit, and I don't know if we're going to be able to continue exactly at the positive productivity level we had.
We did have, you know, some items that were more discrete benefits here in the Q1 that helped push that elevated a little bit. We'll probably see margin regression in the S&I segment here as we move throughout the year.
Chris Moore (Analyst)
Got it. And from a cash flow perspective, you, you talked about, you know, Q1 timing, some of the issues there. Just maybe from a fiscal 2026 perspective, can you talk a little bit further in terms of, you know, kinda overall thoughts and, and how we should be thinking about it?
John Deitzer (CFO)
Yeah, it's a great question. So as we move through the year, we do anticipate cash, cash from ops to improve. The Q1 was a bit of a headwind, as we mentioned, but you have to go back and remember how strong of a cash flow quarter we had in the Q4 of fiscal 2025. And so, you know, we had received multiple AR payments, both back in July and then in September. And the way this quarter ended on December 26th, you know, several large receivables we have fell into our fiscal January, but really occurred, you know, December 28th or 30th type of dynamic.
As we look forward, we expect to be modestly year-to-date cash from ops positive in the Q2, and then continue to ramp here in the third and Q4 from a cash flow perspective. You have seen. We have modestly reduced our expectation on capital expenditures here this year. We're just really, you know, ensuring we're investing in the right projects and, you know, really dialing that in as well as we move through the year.
Chris Moore (Analyst)
Got it. And maybe just last one from me. Obviously, backlog is not historically important metric for you guys, but with some of the change, you know, focus here on data center, et cetera, is it potentially becoming a little bit more important? And is that something that's building a little bit at this point in time?
Bill Waltz (President and CEO)
Yeah, I think, Chris, there are a couple thoughts there. For the core business, you know, it's shipping 5 days, 10 days, and little backlog. For the data center business itself, or, you know, global construction business, the question I answered for Andy, we are seeing backlogs grow in a couple of facets. One, the amount of orders we have in, and then also things, if it's not in order, kinda like an LOI and so forth. So I don't know at this stage or for this year, if we wanna dimensionalize that publicly, but, you know, there is the potential as it continues to grow. It is a business that I think we're all very optimistic at the pace that that business has in front of us.
Chris Moore (Analyst)
Got it. Appreciate it. I'll, I'll leave it there. Thanks, guys.
Bill Waltz (President and CEO)
Thanks, Chris.
Operator (participant)
Your next question comes from Deane Dray with RBC.
Deane Dray (Analyst)
Thank you. Good morning, everyone.
Bill Waltz (President and CEO)
Good morning, Deane.
Deane Dray (Analyst)
I'd like to circle back on some of the competitive dynamics and how it impacted price in the quarter. Just, you know, when steel being up year-over-year, that's really encouraging. Is that more a reflection of stronger volume? Any competitive changes there? And for PVC down, I know there's new capacity coming on. How much of that weighed on, you know, the ongoing PVC pressure? And, you know, this all kind of frames the question of: When do you think you get a normalized year-over-year price? Does that, you know, it's gonna be kinda hard to pinpoint which quarter, but is it still your expectation that it'll happen this year?
Bill Waltz (President and CEO)
Yeah, Dean, I'll start, and then for John or Jonathan, if they wanna jump in there. So, and with the multifaceted question, I think starting with steel, I think overall demands were strong. So I don't know, but I assume my competitors are also, you know, up there. And also with imports going back, you know, you did have a, you know, a good market for us to grow and for us to get price and us to get margin. So market demand is strong and so forth. For imports, and so forth there, I don't know, again, I can't say specifically. I don't think it's necessarily, more supply coming into the market as much as I would say, in general, you know, back to us hitting our numbers and so forth there.
It's probably what we perceived with, you know, price dynamics, both top line and spread and so forth. So in my mind, I'm pretty pleased that, you know, we're back, can't commit to the future, but we're back paying pretty well how we think the, the markets are going to react. And I think to earlier comments from John Deitzer, you know, we're still expecting spread compression within PVC. As to looking out and go, "When does that stop?" I may turn over to my peers, but at least for me, to, you know, try to pave one quarter with any precision is a little tougher there.
Deane Dray (Analyst)
That's really helpful. And then just as you talk about shifting some of the manufacturing resources to your core electrical, have you been able to size what you think your capacity increase is going to be, let's say, on a percent basis in conduit, or will it be in, you know, other non-conduit electro, like cable?
Bill Waltz (President and CEO)
So I think, especially, Deane, is think of more conduit, and here's why. To go to. If you think of what mechanical makes, it's the S&I, it is metal products. So, therefore, Harvey, for example, you know, one of our largest facilities, it is using the 80/20 rule effectively, which has actually, I think, helped the S&I margins to earlier questions of, you know, list with our key customers, with key products, and we don't have to have 1,000 C items. So it's actually helping, and our intention in future to actually help the margins there.
And then it is freeing up capacity for our electrical products, as said earlier, conduits, metal conduits specifically, and to, you know, questions that we just answered, you know, is where we are seeing volume growth and, you know, with data centers and overall markets, it's a place that we would expect long-term growth. So it's working well to say what percents, but I think it's enough that we can keep up with the markets as we go forward. So it's kind of a win-win-win there, and compliment John Pregenzer and the rest of the team, you know, for really driving that effectively here.
Deane Dray (Analyst)
That's helpful. Thank you.
John Deitzer (CFO)
Just one thing to circle back on your earlier question and David's earlier question as well. It is a little bit difficult to predict the dynamics associated with price versus cost because there's so many different factors. One item that I think we're watching here in the near term, a little bit, is the volatility and fluctuation that we've seen in copper. You know, if we just rewind, you know, like, six months ago, it's up roughly, you know, 40%, give or take, from where we gave our outlook, you know, back in November, we're probably up around 25%. And there's just been a lot of volatility there, and that would be one variable. And also trying to make, you know, some of these assessments as we move forward.
I mean, these markets move quickly, and so, you know, that's one of the dynamics here that we're trying to watch and understand as we move throughout the year, is that volatility a little bit. But I think the team's done a nice job because one of the facility closures is in the area where we use copper, and I think it's, you know, the team's working to improve the cost structure and try to be reactive to some of that volatility as well. So, you know, there's just a lot of moving parts and dynamics versus trying to pinpoint a singular, hey, this is, you know, when things change in one way or another.
Deane Dray (Analyst)
Of course. I appreciate that. Thank you.
John Deitzer (CFO)
Thanks, Dean.
Operator (participant)
Your next question comes from Justin Clare with Roth MKM.
Justin Clare (Analyst)
Good morning, Justin.
Bill Waltz (President and CEO)
Good morning.
Justin Clare (Analyst)
Good morning. So just wanted to follow up on steel conduit pricing here. So I think it's the Q4 in a row that pricing has improved. So I'm wondering if you could just speak a little bit to the trend you expect ahead. Do you anticipate continued price improvement in fiscal Q2? And then does the guidance for the year embed a continued upward trend in steel pricing? How are you thinking about that? And then just lastly, is the higher pricing supporting margin improvement for steel conduit? If you could speak to potential magnitude or how that's being affected.
Bill Waltz (President and CEO)
Yeah. So, Justin, I'll start here, and the team can add, as always. So, you are correct that, you know, steel conduit prices, it's been four quarters, so continue to go up with price. And also in most those quarters, it's been up, you know, sequentially, and for example, our last quarter, probably our best quarter for, you know, spreads, you know, you know, a long time. So those things are moving up.
At this stage in our forecast, I don't think we're expecting meaningful spread increases, so, but I also won't bake anything in to go for what we're guiding for you to then say, "Oh, there's gonna be so much more." Steel prices are expected, and I'm just going from different, you know, people's professional forecasts that we use, to continue to go up slightly, over the next, you know, 6, 9 months here. So I think we can keep up with pricing, but I wouldn't expect a lot of extra spread, or at least that's not baked into our numbers here.
Justin Clare (Analyst)
Got it. Okay. And then just one on the tariffs. I believe aluminum tariffs were potentially expected to have an impact on the cost structure. Wondering how that's evolving, if you've secured domestic sources of supply, and what the potential impact on the margins could be.
Bill Waltz (President and CEO)
Yeah. Again, without getting too specific on future steps, but you are correct, Justin, that for us, the tariffs, 'cause where we did get our products, our aluminum, from offshore, or at least offshore Canada, I'll be specific. So they are being impacted by the tariffs. We are looking at domestic sources, but, you know, I, I don't want to give out a year, if nothing else, for our competitors. You know, the probability of that, you know, 'cause even simple things like that, getting to it through specs. And then also, you know, I do think the domestic manufacturers, back to they know that people like us and so forth, are looking for domestic supply, you know, they're raising their price.
So how much of an arbitrage we have compared to our competitors or how much we can save compared to the tariffs is hard to quantify. But I will tell you, it, it has been an impact that we—I don't think we've passed along the impact of the 50% aluminum tariffs. That kind of ties back to John Deitzer's question or answer, excuse me. Even on things like copper, it's so volatile right now that us predicting that our cable business is a little bit more challenged in the short term here.
Justin Clare (Analyst)
Got it. Okay, I appreciate it. Thank you.
Bill Waltz (President and CEO)
Yeah, thanks, Justin.
Operator (participant)
Your next question comes from Chris Dankert with Loop Capital.
Chris Dankert (Analyst)
Hey, good morning, guys. Thanks. Morning, thanks for taking the questions. I guess just to kind of circle back on solar, and I think you touched on it in your prepared remarks, but I'm missing. Can you just kind of give us a sense for what the solar activity is now, kind of how we're shifting capacity in that market, and then just kind of an update there?
Bill Waltz (President and CEO)
Yeah. So what we said, and then it's a great, I'm going to joke and say a setup question for us, is, solar from the quarter, just with timely projects, was down from a year-over-year perspective. That said, you know, we do have a good backlog there, answer to other people's questions on global mega projects. You know, orders coming in, commitments from OEMs. And then the other thing that's helping us, that we mentioned last year, but our facility, Hobart, that we make a lot of the solar torque tubes in, is performing really well. So that does a couple of things. It helps drive some of the productivity we talked about for the Q1.
It helps, you know, with our, you know, overall estimates for productivity for the year, and the increase in throughput is helping as this demand does come up here. So I think solar, like global mega projects, should be a good thing for, you know, this quarter, and quite frankly, the second half of the year. To earlier questions, you look at the step-up, you know, between what we're estimating for profits in Q1 and Q2, compared to what we need to deliver in Q3 and Q4 to hit the, you know, the average of our numbers of $350 million EBITDA.
Chris Dankert (Analyst)
As a point of clarification, I just assume that the solar torque tubes were generally for domestic projects. Is any of that for export outside of North America right now?
Bill Waltz (President and CEO)
So I don't know long-term how much will be, but it does. One of our customers has ordered, you know, a meaningful amount here for projects overseas. But I don't know if that's a long-term trend or not versus a short-term. So I think I would leave it at majority of our focus on our customers, our North America base with coincidentally short-term, some projects going overseas.
Chris Dankert (Analyst)
Got it. Got it. That, that's helpful. And then I guess just finally on, on Hobart, any update as far as factory loading their, operational metrics? Anything worth, worth calling out, either in terms of just being on track or, any, any kind of wins or headaches there?
Bill Waltz (President and CEO)
Yeah, John?
John Deitzer (CFO)
Yeah, no, Hobart's, Hobart's, going well. You know, obviously bringing in the additional solar volume, but their operational rates are continuing to improve. A lot of the productivity that we delivered was, was contributed by Hobart, so I think everything's progressing as we need it to be.
Chris Dankert (Analyst)
Sounds good. Thanks, guys.
Bill Waltz (President and CEO)
Thank you, Chris.
Operator (participant)
This concludes the question and answer session. I would now like to turn the call back over to Bill Waltz for closing remarks.
Bill Waltz (President and CEO)
Thank you. Let me take a moment to summarize my three key takeaways from today's discussion. First, Atkore's fiscal 2026 is off to a good start. Our results reflect a combination of healthy end markets and self-help productivity gains. We will continue to operate with a proactive mindset as we progress throughout the year. Second, we anticipate favorable market demand for the balance of the year as we reaffirm our full year outlook. Finally, as we execute previously announced strategic actions and evaluate additional opportunities, we are laser focused on creating long-term value for our shareholders. With that, thank you for your support and interest in our company. We look forward to speaking with you during our next quarterly call. This concludes the call for today.
Operator (participant)
This concludes today's conference. You may now disconnect.