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Advanced Drainage Systems, Inc. (WMS) SEC Filing 10-Q Quarterly report for the period ending Sunday, June 30, 2019

Advanced Drainage Systems, Inc.

CIK: 1604028 Ticker: WMS

Exhibit 99.1

 

ADVANCED DRAINAGE SYSTEMS ANNOUNCES FIRST QUARTER FISCAL 2020 RESULTS

HILLIARD, Ohio – (August 1, 2019) – 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 quarter ended June 30, 2019.

 

First Quarter Fiscal 2020 Results

Net sales increased 6.7% to $413.7 million

Net loss of $227.5 million as compared to net income of $33.7 million in the prior year

 

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Includes $246.8 million of additional one-time ESOP stock-based compensation expense

Adjusted EBITDA (Non-GAAP) increased 6.9% to $80.3 million

Cash provided by operating activities increased $53.0 million to $62.8 million

Free cash flow (Non-GAAP) increased $50.2 million to $53.1 million

Scott Barbour, President and Chief Executive Officer of ADS commented, “We are off to a good start in fiscal 2020, with continued strong sales growth in our core domestic construction markets. Additionally, agriculture market sales increased 15% compared to the prior year, despite poor weather and uncertain agriculture economic conditions. We experienced solid growth across our domestic geographies, with particular strength in the Southeast, Atlantic Coast and Western regions of the United States, and our sales and operations teams did an excellent job executing to our plan and meeting our commitments this quarter. Overall, our top line performance demonstrates the success of our material conversion strategies, best-in-class solutions strategies and focus on key growth regions of the United States. This gives us confidence we will continue delivering above market growth in fiscal 2020 and beyond.”

Barbour continued, “We also generated very good profitability in the quarter. Through strong growth in both pipe and Allied products, favorable material cost and disciplined execution, we were able to offset the inventory absorption headwind from retention of key manufacturing employees in the fourth quarter despite a reduction in production pounds. Additionally, execution on our working capital initiatives resulted in significant free cash flow generation in the period. We remain on track to deliver on our margin expansion goals imbedded in our fiscal 2020 guidance and will continue to focus on maintaining favorable pricing, mitigating inflationary pressures and delivering continuous improvement in manufacturing and logistics activities.”

“Finally, in line with our capital deployment strategy as discussed at our Investor Day, we returned $82 million of capital to shareholders in June dividends, including $75 million in special dividends. In addition, today we announced the strategic acquisition of Infiltrator Water Technologies, a leader in on-site septic wastewater treatment, in a separate press release. We are very excited to build on our existing platform, expand our addressable market opportunity and enhance our sales growth, margin profile and cash flow generation through this exciting acquisition.”

 

First Quarter Fiscal 2020 Results


Net sales increased 6.7% to $413.7 million, as compared to $387.8 million in the prior year. Domestic net sales increased 9.3% to $374.4 million as compared to $342.5 million in the prior year, driven by strong performance in both the construction and agriculture end markets. International net sales decreased 13.3% to $39.3 million as compared to $45.3 million in the prior year, driven primarily by a decrease in Mexico sales.

 

As part of the Company’s capital allocation strategy, the Company paid a dividend of $1.09 per share in the first quarter of fiscal 2020, including a $1.00 special dividend to all shareholders of record. The Employee Stock Ownership Plan (“ESOP”) used a portion of its proceeds to payback a portion of its loan from the Company, resulting in an allocation of approximately 11.6 million shares to participants and $246.8 million of non-cash, stock-based compensation expense. The Company recorded $168.6 million of this expense in Cost of goods sold – ESOP special dividend compensation and $78.1 million of this expense in Selling, general and administrative – ESOP special dividend compensation.

 

Gross profit decreased $161.8 million to ($62.2) million due to the $168.6 million ESOP compensation expense described above. Excluding the one-time ESOP compensation, gross profit increased $6.8 million primarily due to an increase in both pipe and allied

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The following information was filed by Advanced Drainage Systems, Inc. (WMS) on Thursday, August 1, 2019 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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Inside Advanced Drainage Systems, Inc.'s 10-Q Quarterly Report:

Financial Statements, Disclosures and Schedules

Inside this 10-Q Quarterly Report

Document And Entity Information
Condensed Consolidated Balance Sheets
Condensed Consolidated Balance Sheets (Parenthetical)
Condensed Consolidated Statements Of Cash Flows
Condensed Consolidated Statements Of Comprehensive Income
Condensed Consolidated Statements Of Mezzanine Equity
Condensed Consolidated Statements Of Operations
Condensed Consolidated Statements Of Stockholders' Equity (Deficit)
Condensed Consolidated Statements Of Stockholders' Equity (Deficit) (Parenthetical)
Background And Summary Of Significant Accounting Policies
Background And Summary Of Significant Accounting Policies (Policies)
Background And Summary Of Significant Accounting Policies - Additional Information (Detail)
Business Segments Information
Business Segments Information (Tables)
Business Segments Information - Additional Information (Detail)
Business Segments Information - Schedule Of Additional Financial Information Attributable To Reportable Segments (Detail)
Business Segments Information - Schedule Of Reconciliation Of Segment Adjusted Ebitda To Net Income (Detail)
Business Segments Information - Schedule Of Reconciliation Of Segment Adjusted Ebitda To Net Income (Parenthetical) (Detail)
Business Segments Information - Schedule Of Revenue From Reportable Segments By Product Type (Detail)
Commitments And Contingencies
Commitments And Contingencies (Purchase Commitments) - Additional Information (Detail)
Debt
Debt (Secured Bank Term Loans) - Additional Information (Detail)
Debt (Tables)
Debt - Long-Term Debt (Detail)
Derivative Transactions
Derivative Transactions (Tables)
Derivative Transactions - Schedule Of Cash Settlements And Net Losses And Net (Gains) On Mark-To-Market Adjustments For Changes In Fair Value Of Derivative Contracts (Detail)
Fair Value Measurement
Fair Value Measurement (Tables)
Fair Value Measurement - Additional Information (Detail)
Fair Value Measurement - Summary Of Assets And Liabilities Carried At Fair Value (Detail)
Fair Value Measurement - Summary Of Changes In Fair Value Of Recurring Fair Value Measurements Using Unobservable Inputs (Detail)
Income Taxes
Income Taxes - Additional Information (Detail)
Inventories
Inventories (Tables)
Inventories - Additional Information (Detail)
Inventories - Schedule Of Inventories (Detail)
Leases
Leases (Tables)
Leases - Additional Information (Detail)
Leases - Schedule Of Components Of Lease Expense (Detail)
Leases - Schedule Of Contractual Obligations For Capital And Operating Leases (Detail)
Leases - Schedule Of Future Minimum Lease Payments On Rolling Twelve-Month Basis Under Operating And Finance Leases (Detail)
Leases - Schedule Of Supplemental Balance Sheet Information Related To Leases (Detail)
Leases - Schedule Of Supplemental Cash Flow Information Related To Leases (Detail)
Loss On Disposal Of Assets And Costs From Exit And Disposal Activities
Loss On Disposal Of Assets And Costs From Exit And Disposal Activities (Tables)
Loss On Disposal Of Assets And Costs From Exit And Disposal Activities - Additional Information (Detail)
Loss On Disposal Of Assets And Costs From Exit And Disposal Activities - Schedule Of Reconciliation Of Restructuring Liability (Detail)
Loss On Disposal Of Assets And Costs From Exit And Disposal Activities - Summary Of Loss On Disposal Of Assets And Costs From Exit And Disposal Activities (Detail)
Net Income Per Share And Stockholders' Equity
Net Income Per Share And Stockholders' Equity (Tables)
Net Income Per Share And Stockholders' Equity - Additional Information (Detail)
Net Income Per Share And Stockholders' Equity - Summary Of Net Income Per Share (Detail)
Related Party Transactions
Related Party Transactions - Additional Information (Detail)
Revenue Recognition
Revenue Recognition (Tables)
Schedule Of Contract Asset And Liability (Detail)
Stock-Based Compensation
Stock-Based Compensation (2017 Omnibus Plan) - Additional Information (Detail)
Stock-Based Compensation (Tables)
Stock-Based Compensation - Summary Of Assumption Used In Estimate Fair Value Of Stock Options (Detail)
Stock-Based Compensation - Summary Of Stock-Based Compensation Expense (Detail)
Subsequent Events
Subsequent Events (Tables)
Subsequent Events - Additional Information (Detail)
Subsequent Events - Summary Of Consideration Paid And Preliminary Purchase Price Allocation Of Assets Acquired And Liabilities Assumed (Detail)
Subsequent Events - Summary Of Preliminary Consideration Paid, Net Of Cash Acquired (Detail)
Subsequent Events - Summary Of Unaudited Pro Forma Information (Detail)
Ticker: WMS
CIK: 1604028
Form Type: 10-Q Quarterly Report
Accession Number: 0001564590-19-028019
Submitted to the SEC: Thu Aug 01 2019 12:57:09 PM EST
Accepted by the SEC: Thu Aug 01 2019
Period: Sunday, June 30, 2019
Industry: Plastics Foam Products

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