Advanced Drainage Systems, Inc. (WMS) SEC Filing 10-Q Quarterly report for the period ending Sunday, December 31, 2017

Exhibit 99.1

ADVANCED DRAINAGE SYSTEMS ANNOUNCES THIRD QUARTER FISCAL 2018 RESULTS

HILLIARD, Ohio – (February 8, 2018) – 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 third quarter ended December 31, 2017.

Third Quarter Fiscal 2018 Highlights

Fiscal 2018 Year-to-Date Highlights

Scott Barbour, President and Chief Executive Officer of ADS commented, “We executed the fundamentals of our business well this quarter, which resulted in strong revenue growth and margin performance during the period. We once again generated above-market growth in our domestic construction markets, driven by our conversion strategy and double-digit growth of our Allied Products. Favorable pricing, product mix and solid execution drove 280 basis points of margin expansion in the quarter. Looking forward, we will continue to focus on the fundamentals and better execution across all aspects of our operations to drive sustainable improvements in our profitability over time.”

Third Quarter Fiscal 2018 Results

Net sales increased 8.9% to $320.8 million, as compared to $294.7 million in the prior year quarter. Domestic net sales increased 8.9% to $276.9 million as compared to $254.3 million in the prior year quarter, driven by price increases and growth in the construction markets. International net sales increased 8.8% to $44.0 million as compared to $40.4 million in the prior year quarter.

Gross profit increased 12.1% to $77.8 million, as compared to $69.4 million the prior year quarter. As a percentage of net sales, gross profit increased 70 basis points to 24.3% compared to 23.6% in the prior year, primarily due to price increases and product mix.

Adjusted EBITDA (Non-GAAP) increased 29.0% to $56.0 million, as compared to $43.4 million in the prior year quarter. As a percentage of net sales, Adjusted EBITDA increased 280 basis points to 17.5% as compared to 14.7% in the prior year. The increase in Adjusted EBITDA margin was largely attributed to the factors mentioned above.

The Company’s third quarter income tax expense was a $7.4 million benefit and reflected the estimated impact of the Tax Cuts & Jobs Act (“Tax Act”), including a $14.7 million benefit to income tax expense related to the revaluation of deferred tax attributes and $0.9 million income tax expense on the Company’s deemed repatriation of foreign earnings. The income tax benefit also included a $3.0 million benefit from the year-to-date impact of the change in federal statutory rate.

Adjusted Earnings Per Fully Converted Share (Non-GAAP) was $0.47 based on weighted average fully converted shares of 74.4 million, as compared to $0.16 for the prior year on weighted average fully converted shares of 73.4 million. The $13.8 million net benefit from the revaluation of deferred tax attributes and deemed repatriation of foreign earnings increased Adjusted Earnings Per Fully Converted Share by $0.19 on weighted average fully converted shares of 74.4 million. Excluding the impact of the one-time benefit from the Tax Act, Adjusted Earnings Per Fully Converted Share increased to $0.28.

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 6.6% to $1,080.2 million, as compared to $1,013.1 million in the prior year. Domestic net sales increased 7.9% to

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