Exhibit 99.1

ADVANCED DRAINAGE SYSTEMS ANNOUNCES SECOND QUARTER FISCAL 2018 RESULTS

HILLIARD, Ohio – (November 2, 2017) – Advanced Drainage Systems, Inc. (NYSE: WMS) (“ADS” or the “Company”), a leading global manufacturer of water management products and solutions for non-residential, residential, infrastructure and agricultural applications, today announced financial results for the fiscal second quarter ended September 30, 2017.

 

Second Quarter Fiscal 2018 Highlights

Net sales increased 11.2% to $401.0 million

Net income of $18.0 million compared to $24.3 million in prior year

Adjusted EBITDA (Non-GAAP) increased 2.0% to $66.9 million

 

Fiscal Year-to-Date Highlights

Net sales increased 5.7% to $759.4 million

Net income of $36.4 million compared to $43.7 million in prior year

Adjusted EBITDA (Non-GAAP) of $127.2 million compared to $137.4 million in prior year

Cash flow from operating activities of $28.4 million compared to $45.6 million in prior year

Free cash flow (Non-GAAP) of $1.4 million compared to $21.8 million in prior year

Scott Barbour, President and Chief Executive Officer of ADS commented, “We are pleased to report above-market growth for the second fiscal quarter, with net sales increasing over 11% compared to the prior year. We generated strong performance in our core domestic construction markets driven by continued execution of our conversion strategy and strong growth from our HP pipe product line and Allied Products. We were also pleased to see growth return in our agriculture market this quarter.”

Barbour continued, “While we are disappointed with the continued pressure on our margins, we are pursuing a number of actions to address this through operational improvements as well as our broader set of strategic initiatives. Although I am still early in my assessment of the business, I am confident we have the opportunity, capability and resources to drive sustainable improvements in our profitability. It is my belief that we need to focus on the fundamentals and drive better execution across all aspects of our operations as we progress through the remainder of fiscal year 2018.”

 

Second Quarter Fiscal 2018 Results


Net sales increased 11.2% to $401.0 million, as compared to $360.8 million in the prior year quarter. Domestic net sales increased 12.9% to $351.9 million as compared to $311.8 million in the prior year quarter, driven by growth in both construction and agriculture markets. International net sales increased 0.3% to $49.2 million as compared to $49.0 million in the prior year quarter.

 

Gross profit decreased 0.8% to $89.8 million, as compared to $90.5 million the prior year quarter. As a percentage of net sales, gross profit decreased 270 basis points to 22.4% compared to 25.1% in the prior year, primarily due to increases in raw material and operational costs.

 

Adjusted EBITDA (Non-GAAP) increased 2.0% to $66.9 million, as compared to $65.6 million in the prior year. As a percentage of net sales, Adjusted EBITDA decreased 150 basis points to 16.7% as compared to 18.2% in the prior year. The decrease in Adjusted EBITDA margin was largely attributed to the factors mentioned above.

 

Adjusted Earnings Per Fully Converted Share (Non-GAAP) was $0.28 based on weighted average fully converted shares of 73.8 million, as compared to $0.36 for the prior year on weighted average fully converted shares of 73.4 million.

 

A reconciliation of GAAP to Non-GAAP financial measures for Adjusted EBITDA, Free Cash Flow and Adjusted Earnings Per Fully Converted Share has been provided in the financial statement tables included in this press release. An explanation of these measures is also included below under the heading “Non-GAAP Financial Measures.”

 

Fiscal Year-to-Date 2018 Results


Net sales increased 5.7% to $759.4 million, as compared to $718.4 million in the prior year. Domestic net sales increased 7.5% to $671.4 million as compared to $624.5 million in the prior year, driven by growth in core construction markets. International net sales decreased 6.2% to $88.0 million as compared to $93.8 million in the prior year.

 

1

 


The following information was filed by Advanced Drainage Systems, Inc. (WMS) on Thursday, November 2, 2017 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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