Advanced Drainage Systems, Inc. (WMS) SEC Filing 10-Q Quarterly report for the period ending Saturday, June 30, 2018

Exhibit 99.1

ADVANCED DRAINAGE SYSTEMS ANNOUNCES FIRST QUARTER FISCAL 2019 RESULTS

HILLIARD, Ohio – (August 9, 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 first fiscal quarter ended June 30, 2018.

First Quarter Fiscal 2019 Highlights

Scott Barbour, President and Chief Executive Officer of ADS commented, “We are very pleased with our strong start to the year, including solid top line growth driven by above-market growth in both non-residential and residential construction markets as well as strong performance from our International businesses. We also benefited from disciplined execution and growing demand for our allied products, which drove our third consecutive quarter of year over year margin expansion. With the backdrop of healthy expected growth in our core domestic construction markets for the remainder of fiscal 2019, we remain focused on executing our key growth strategies while continuing to take actions to mitigate inflationary pressure, increase profitability and drive shareholder value.”

First Quarter Fiscal 2018 Results

Net sales increased 8.2% to $387.8 million, as compared to $358.4 million in the prior year. Domestic net sales increased 7.2% to $342.5 million as compared to $319.5 million in the prior year, driven by strong demand and market conversion in the construction markets. International net sales increased 16.7% to $45.3 million as compared to $38.9 million in the prior year, driven by growth in Mexico and Canada.

Gross profit increased 14.9% to $99.7 million, as compared to $86.7 million the prior year quarter. As a percentage of net sales, gross profit increased 150 basis points to 25.7% compared to 24.2% in the prior year, primarily due to favorable pricing as well as lower manufacturing costs.

Adjusted EBITDA (Non-GAAP) increased 24.5% to $75.1 million, as compared to $60.3 million in the prior year quarter. As a percentage of net sales, Adjusted EBITDA increased 260 basis points to 19.4% as compared to 16.8% in the prior year. The increase in Adjusted EBITDA margin was largely attributed to the factors mentioned above as well as a decrease in selling, general and administrative expenses.

Net cash provided by operating activities increased $26.4 million to $9.8 million, as compared to a use of $16.5 million in the prior year. Free cash flow (Non-GAAP) increased $37.4 million to $3.0 million, as compared to a use of $34.5 million in the prior year. Net debt (total debt and capital lease obligations net of cash) was $366.0 million as of June 30, 2018, an increase of $3.8 million from March 31, 2018.

Reconciliations of GAAP to Non-GAAP financial measures for Adjusted EBITDA and Free Cash Flow have 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 2019 Outlook

Based on current visibility, backlog of existing orders and business trends, the Company has provided its net sales and Adjusted EBITDA targets for fiscal 2019. Net sales are expected to be in the range of $1.375 billion to $1.425 billion, which is consistent with the Company’s previously issued guidance. The Company also is raising the bottom-end of its Adjusted EBITDA range by $5 million to an updated range of $225 to $240 million. Capital expenditures are expected to be approximately $60 to $70 million.

1