Grant & Eisenhofer Files Class Action Lawsuit Against Atkore, Inc., Extending Class Period of Previously Filed Action

Rhea-AI Summary

Atkore Inc faces a class action lawsuit filed by Grant & Eisenhofer P.A. on behalf of King P. Coles, II, alleging securities fraud during the period from August 2, 2022, to February 3, 2024. The lawsuit claims that Atkore and its executives engaged in a price-fixing scheme for PVC pipes, artificially inflating prices and misleading investors about the company's business operations.

The legal action, filed in the Northern District of Illinois, alleges violations of Securities Exchange Act Sections 10(b) and 20(a). On February 4, 2025, Atkore reported disappointing Q1 FY2025 results, with net sales decreasing by $95.7 million due to lower average selling prices and $33.3 million from reduced sales volume. Following this announcement, Atkore's stock price dropped by $15.59 (19.5%) to close at $64.13 per share.

Positive

• None.

Negative

• Class action lawsuit filed for alleged price-fixing scheme in PVC pipes
• Q1 FY2025 financial results missed expectations with significant sales decline
• Stock price dropped 19.5% ($15.59) following earnings announcement
• Company lowered full year fiscal 2025 guidance
• Net sales decreased by $129 million combined from lower prices and volumes

Insights

Legal Expert

This class action lawsuit against Atkore represents a significant legal risk with potential material financial consequences. The complaint alleges securities fraud through a price-fixing scheme for PVC pipes, violating Sections 10(b) and 20(a) of the Securities Exchange Act - serious charges that could result in substantial damages and penalties if proven. The extended class period (August 2022-February 2024) broadens the potential plaintiff pool and increases liability exposure. The 19.5% stock drop ($15.59 per share) following disappointing earnings suggests the market views these allegations as credible and impactful. Securities fraud class actions typically take 2-3 years to resolve and frequently settle for $10-100 million depending on market cap and damages period. The naming of individual executives as defendants adds personal liability concerns that could affect management stability. Beyond immediate financial impacts, these allegations could trigger parallel investigations by the DOJ or FTC into the alleged price-fixing scheme, potentially resulting in additional fines and injunctive relief that could permanently alter Atkore's business practices and profit margins in its PVC pipe segment.

Financial Analyst

The lawsuit's price-fixing allegations strike at the core of Atkore's recent financial performance, suggesting artificial revenue inflation rather than operational excellence. The February earnings miss and guidance reduction specifically attributed to PVC pricing challenges ($95.7 million decrease in average selling prices) aligns precisely with the lawsuit's claim that the company could no longer maintain artificially inflated prices. This represents a structural profit margin challenge rather than a temporary setback. With PVC products comprising a significant portion of Atkore's electrical raceway portfolio, the normalization of pricing could continue pressuring results beyond current forecasts. The 19.5% stock decline indicates investors are recalibrating expectations for sustainable profitability. The lawsuit creates additional uncertainty through potential financial penalties, legal costs, and management distraction. Most concerning is the potential for permanent margin compression if the alleged pricing practices must be abandoned, forcing Atkore to compete solely on legitimate factors like production efficiency and service quality. Companies facing similar allegations typically experience multiple quarters of financial recalibration as pricing mechanisms adjust, suggesting Atkore's current guidance reduction may not fully capture the potential long-term impact on its business model.

03/14/2025 - 11:53 AM

NEW YORK--(BUSINESS WIRE)-- Today, Grant & Eisenhofer P.A. filed a class action lawsuit on behalf of King P. Coles, II against Atkore, Inc. (“Atkore” or the “Company”), Atkore’s CEO William E. Waltz, Atkore’s former CFO David P. Johnson, and Atkore’s CFO John M. Deitzer (collectively, the “Defendants”). The action alleges that Defendants defrauded investors by making materially false and/or misleading statements and failing to disclose materially adverse facts about the Company’s business, operations and prospects. Specifically, the complaint alleges that Atkore’s reported financial results were distorted by a price fixing scheme that artificially inflated the prices of Atkore’s polyvinyl chloride (“PVC”) pipes.

The action, brought in the United States District Court for the Northern District of Illinois, is captioned King P. Coles, II v. Atkore, Inc., et al., No. 1:25-cv-02686 (N.D. Ill.). It is related to the action captioned Westchester Putnam Counties Heavy & Highway Laborers Local 60 Benefits Fund v. Atkore Inc.., et al., No. 1:25-cv-01851 (N.D. Ill.). The action expands the class period asserted in the Westchester action so that it now includes all persons or entities who purchased or acquired Atkore common stock from August 2, 2022 through February 3, 2024, inclusive (the “Class Period”).

Atkore is a leading manufacturer of electrical raceway products and tubes that are used in a variety of construction applications. The Company’s products include, among other things, steel and PVC conduit.

The complaint alleges violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934. Specifically, the lawsuit alleges that throughout the Class Period, Defendants failed to disclose that (i) Atkore engaged in a price fixing scheme that artificially inflated the price of PVC pipes; (ii) Atkore benefited from its price fixing conduct; and (iii) Atkore and its competitors were no longer able to artificially inflate the price of PVC pipes as their scheme became exposed, resulting in a decrease in the price of PVC pipes and a negative impact on Atkore’s financial performance.

After falling short of earnings expectations and cutting guidance on several occasions beginning in May 2024, on February 4, 2025, Atkore reported disappointing first quarter fiscal 2025 financial results and also lowered its full year fiscal 2025 outlook reporting that “[t]he decrease in net sales is primarily attributed to decreased average selling prices of $95.7 million and decreased sales volume of $33.3 million.” Defendant Deitzer attributed the guidance reduction to the forthcoming poor performance of Atkore’s PVC business. On this news, the price of the Company’s common stock declined $15.59 per share, or 19.5%, to close at $64.13 per share.

Investors who purchased or acquired Atkore common stock during the Class Period are members of this proposed Class and may be able to seek appointment as lead plaintiff, which is a court-appointed representative of the Class, by complying with the relevant provisions of the Private Securities Litigation Reform Act of 1995 (the “PSLRA”). See 15 U.S.C. Section 78u-4(a)(2)(A)(i)-(iv).

If you wish to serve as lead plaintiff, you must move the Court by no later than April 23, 2025. You do not need to seek to become a lead plaintiff in order to share in any possible recovery. You may also retain counsel of your choice to represent you in this action.

If you wish to discuss this action or have any questions concerning this notice or your rights, please contact Caitlin M. Moyna at Grant & Eisenhofer at 646-722-8513, or via email at cmoyna@gelaw.com. You can also find more information at gelaw.com.

View source version on businesswire.com: https://www.businesswire.com/news/home/20250314797948/en/

Grant & Eisenhofer

Caitlin M. Moyna

646-722-8513

cmoyna@gelaw.com

Source: Grant & Eisenhofer P.A.

FAQ

What are the specific allegations in the class action lawsuit against Atkore (ATKR)?

The lawsuit alleges that Atkore engaged in a price-fixing scheme for PVC pipes, made false/misleading statements, and failed to disclose material facts about their business operations during August 2022 to February 2024.

How much did ATKR stock drop after the February 2025 earnings announcement?

Atkore's stock dropped $15.59 per share (19.5%) to close at $64.13 following the disappointing Q1 FY2025 results announcement on February 4, 2025.

What is the deadline for ATKR shareholders to join the class action lawsuit?

Shareholders must move the Court by April 23, 2025, to seek appointment as lead plaintiff in the class action lawsuit.

What was the impact on Atkore's net sales in Q1 FY2025?

Net sales decreased due to reduced average selling prices ($95.7 million decline) and lower sales volume ($33.3 million decline).