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HILLIARD, Ohio--(BUSINESS WIRE)--Advanced Drainage Systems, Inc. (NYSE: WMS) ("ADS†or the "Company†), a leading provider of innovative water management solutions in the stormwater and onsite wastewater industries, today announced that the Company intends, subject to market and other conditions, to commence an offering (the "Offering†) of up to $500 million aggregate principal amount of senior unsecured notes due 2034 (the "Notes†) in a private transaction exempt from the registration requireme. ...

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Core Viewpoint - Momentum investing focuses on following a stock's recent price trends, aiming to buy high and sell higher, with the expectation that established trends will continue [1] Company Overview: Advanced Drainage Systems (WMS) - WMS currently holds a Momentum Style Score of A, indicating strong momentum characteristics [2] - The company has a Zacks Rank of 2 (Buy), suggesting it is positioned for potential outperformance in the market [3] Performance Metrics - Over the past week, WMS shares have increased by 15.35%, outperforming the Zacks Building Products - Miscellaneous industry, which rose by 5.98% [5] - In a longer timeframe, WMS shares have gained 23.27% over the past quarter and 37.86% over the last year, while the S&P 500 has only moved 1.86% and 15.7%, respectively [6] Trading Volume - The average 20-day trading volume for WMS is 758,640 shares, which serves as a bullish indicator when combined with rising stock prices [7] Earnings Outlook - In the past two months, two earnings estimates for WMS have been revised upwards, increasing the consensus estimate from $5.98 to $6.10 [9] - For the next fiscal year, two estimates have also moved higher, with no downward revisions noted [9] Conclusion - Given the strong performance metrics and positive earnings outlook, WMS is identified as a solid momentum pick with a Momentum Score of A and a Zacks Rank of 2 (Buy) [11]

Advanced Drainage Systems (WMS) could be a solid choice for investors given its recent upgrade to a Zacks Rank #2 (Buy). This upgrade is essentially a reflection of an upward trend in earnings estimates -- one of the most powerful forces impacting stock prices.The sole determinant of the Zacks rating is a company's changing earnings picture. The Zacks Consensus Estimate -- the consensus of EPS estimates from the sell-side analysts covering the stock -- for the current and following years is tracked by the s ...

Core Viewpoint - Investors are evaluating Jacobs Solutions (J) and Advanced Drainage Systems (WMS) to determine which stock offers better value for investment at the current time [1] Group 1: Zacks Rank and Earnings Outlook - Both Jacobs Solutions and Advanced Drainage Systems currently hold a Zacks Rank of 2 (Buy), indicating a positive earnings outlook due to favorable analyst estimate revisions [3] - The Zacks Rank is a reliable indicator for value investors as it emphasizes companies with improving earnings forecasts [2] Group 2: Valuation Metrics - Jacobs Solutions has a forward P/E ratio of 20.88, while Advanced Drainage Systems has a higher forward P/E of 29.09 [5] - The PEG ratio for Jacobs Solutions is 1.54, compared to Advanced Drainage Systems' PEG ratio of 2.26, indicating Jacobs Solutions may be undervalued relative to its expected earnings growth [5] - Jacobs Solutions has a P/B ratio of 5.07, while Advanced Drainage Systems has a P/B ratio of 7, further suggesting that Jacobs Solutions is a more attractive value option [6] Group 3: Value Grades - Based on the valuation metrics, Jacobs Solutions has earned a Value grade of B, whereas Advanced Drainage Systems has received a Value grade of D, indicating a stronger value proposition for Jacobs Solutions [6]

Financial Performance - Net sales for the three months ended December 31, 2025, were $693.354 million, a slight increase from $690.538 million in the same period of 2024, while net sales for the nine months ended December 31, 2025, reached $2.374 billion, up from $2.288 billion in 2024, representing a year-over-year growth of 3.74%[13] - Gross profit for the three months ended December 31, 2025, was $259.152 million, compared to $241.594 million in 2024, indicating a gross margin improvement from 34.96% to 37.34%[13] - Operating income for the three months ended December 31, 2025, was $136.823 million, an increase from $126.864 million in 2024, reflecting a growth of 7.73%[13] - Net income attributable to ADS for the three months ended December 31, 2025, was $93.626 million, compared to $81.231 million in 2024, marking an increase of 15.5%[13] - The company reported a comprehensive income of $97.525 million for the three months ended December 31, 2025, compared to $74.068 million in 2024, representing a year-over-year increase of 31.7%[15] - Net income for the nine months ended December 31, 2025, was $394,628, an increase of 5% compared to $375,785 in 2024[18] - The Company reported a net income available to common stockholders of $93.6 million for the three months ended December 31, 2025, compared to $81.2 million for the same period in 2024, reflecting a year-over-year increase of 15.5%[51] - Basic net income per share for the nine months ended December 31, 2025, was $5.06, up from $4.81 in the same period of 2024, indicating a growth of 5.2%[51] Assets and Liabilities - Total assets as of December 31, 2025, were $4.144 billion, up from $3.690 billion as of March 31, 2025, indicating a growth of 12.3%[11] - Total liabilities increased to $2.115 billion as of December 31, 2025, from $2.055 billion as of March 31, 2025, reflecting a rise of 2.93%[11] - The company’s long-term debt obligations stood at $1.276 billion as of December 31, 2025, slightly up from $1.252 billion as of March 31, 2025[11] - Long-term debt obligations as of December 31, 2025, totaled $1.2757 billion, compared to $1.2516 billion as of March 31, 2025, reflecting an increase of 1.9%[55] Cash Flow and Management - The company’s cash position improved significantly, with cash increasing to $1.008 billion as of December 31, 2025, compared to $463.319 million as of March 31, 2025[11] - Net cash provided by operating activities increased to $779,133, up 44% from $540,264 in the previous year[18] - Net cash used in investing activities decreased significantly to $186,572 from $402,889, indicating improved cash management[18] - Cash and restricted cash at the end of the period totaled $1,010,903, a substantial increase from $494,753 in the previous year[18] - The company reported a net change in cash of $541,632, a significant improvement from a decrease of $1,095 in the previous year[18] - Cash paid for income taxes for the nine months ended December 31, 2025, was $83.411 million, a decrease from $111.420 million in the same period of 2024[76] Capital Expenditures and Investments - Capital expenditures for the period were $196,737, compared to $166,410 in the prior year, reflecting an 18% increase[18] - Capital expenditures for the three months ended December 31, 2025, totaled $85.719 million, significantly higher than $54.228 million in the same period of 2024, reflecting an increase of 58.1%[74] - The company incurred $17.7 million in restructuring expenses related to the closure of a recycling facility and other optimization efforts during the nine months ended December 31, 2025[35] - The acquisition of Orenco Systems, Inc. was completed for a total consideration of approximately $236.3 million, which includes a purchase price of $255 million net of cash acquired[39] - The company completed the acquisition of River Valley Pipe LLC for a preliminary fair value of consideration transferred of approximately $18.8 million[41] - The company completed the acquisition of National Diversified Sales (NDS) for approximately $1.0 billion on February 2, 2026, enhancing its water management business[78] Stockholder Information - Common stock dividends paid were $42,099, compared to $37,324 in the previous year, reflecting a 13% increase[18] - The Company’s common stock dividends declared were $42.1 million, equating to $0.54 per share[36] - A quarterly cash dividend of $0.18 per share was declared, payable on March 16, 2026, to stockholders of record as of March 2, 2026[77] Segment Performance - Net sales from the Pipe segment for the three months ended December 31, 2025, were $326.713 million, a decrease of 7.2% from $339.629 million in 2024[72] - The Infiltrator segment reported net sales of $152.881 million for the three months ended December 31, 2025, compared to $150.013 million in 2024, marking a growth of 1.9%[72] - Total consolidated net sales for the nine months ended December 31, 2025, reached $2.373615 billion, an increase of 3.7% from $2.288484 billion in 2024[72] - Segment Adjusted Gross Profit for the three months ended December 31, 2025, was $296.107 million, up from $275.943 million in 2024, indicating a growth of 7.3%[72] - Adjusted gross profit for the three months ended December 31, 2025, was $296.107 million, up from $275.943 million in the same period of 2024, representing an increase of 7.3%[73] Stock-Based Compensation - Stock-based compensation expense rose to $25,816, up 19% from $21,758 in the prior year[19] - The company’s stock-based compensation expense was recorded at $25.8 million for the three months ended December 31, 2025[36] - Total stock-based compensation expense for the three months ended December 31, 2025, was $8.835 million, an increase from $7.798 million in 2024, representing a growth of 13.3%[65] - For the nine months ended December 31, 2025, stock-based compensation expense totaled $25.816 million, up from $21.758 million in 2024, reflecting a year-over-year increase of 18.5%[66] Other Financial Metrics - The effective tax rate for the three months ended December 31, 2025, was 24.9%, compared to 25.0% for the same period in 2024[64] - The Company has a maximum potential obligation of $5.5 million under a guarantee for the South American Joint Venture as of December 31, 2025[54] - The Company has no outstanding purchase commitments with fixed price and quantity as of December 31, 2025[62] - The Company’s Senior Notes due 2027 and 2030 have fair values of $350.1 million and $511.8 million, respectively, as of December 31, 2025[61] - A 1.0% increase in interest rates on variable-rate debt would raise the annual forecasted interest expense by approximately $4.0 million based on borrowings as of December 31, 2025[134]

Advanced Drainage Systems (NYSE:WMS) Q3 2026 Earnings call February 05, 2026 10:00 AM ET Company ParticipantsBryan Blair - Managing DirectorCollin Verron - DirectorCraig Taylor - President of InfiltratorDavid Tarantino - Assistant VPGarik Shmois - Managing DirectorJeff Reive - Research AssociateMike Higgins - VP of Corporate Strategy and Investor RelationsScott Barbour - President and CEOScott Cottrill - CFOConference Call ParticipantsJohn Lovallo - Managing Director and Senior Equity AnalystMatthew Bouley ...

Advanced Drainage Systems (NYSE:WMS) Q3 2026 Earnings call February 05, 2026 10:00 AM ET Company ParticipantsBryan Blair - Managing DirectorCollin Verron - DirectorCraig Taylor - President of InfiltratorDavid Tarantino - Assistant VPGarik Shmois - Managing DirectorJeff Reive - Research AssociateMike Higgins - VP of Corporate Strategy and Investor RelationsScott Barbour - President and CEOScott Cottrill - CFOConference Call ParticipantsJohn Lovallo - Managing Director and Senior Equity AnalystMatthew Bouley ...

Financial Data and Key Metrics Changes - The company reported a 30.2% adjusted EBITDA margin, marking one of the most profitable third quarters in its history [5] - Adjusted EBITDA increased by 9% despite flat revenue, resulting in a 250 basis points increase in the adjusted EBITDA margin [8] - Year-to-date cash flow from operations reached $779 million, a 44% increase year-over-year, converting more than 100% of adjusted EBITDA into cash [13][15] Business Line Data and Key Metrics Changes - Allied product sales increased by 8%, driven by key products such as StormTech storage chambers and water quality products [5] - Infiltrator revenue grew by 2%, with strong activity in the Southeast and South [5] - Pipe revenue saw a slight decline, with HP Pipe growth offset by weaker sales in residential and infrastructure markets [6] Market Data and Key Metrics Changes - Sales in the core non-residential market increased by 5%, particularly in the Southeast, Midwest, and Northeast [6] - Residential market sales were down slightly, but the Infiltrator core residential business outperformed the market due to new products [7] - The company updated its in-market demand forecast for the non-residential market to a decline in low to mid-single digits [6] Company Strategy and Development Direction - The company continues to prioritize higher growth, higher margin allied and Infiltrator products to strengthen profitability [4] - The recent acquisition of NDS is expected to enhance the company's stormwater capture portfolio and improve offerings in distribution and retail channels [9] - The company plans to focus on organic growth and innovation while maintaining a disciplined approach to capital allocation [15][66] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term outlook for the business, supported by strong secular tailwinds driving demand for water management solutions [12] - The company acknowledged the challenges posed by a mixed demand environment but highlighted strong execution and operational initiatives as key to current performance [11] - Management remains committed to investing in capabilities that will position the company for future success [12] Other Important Information - The company announced a new $1 billion stock repurchase authorization, bringing the total authorization to $1.148 billion [16] - The fourth quarter is expected to be variable due to weather impacts on construction, with management incorporating anticipated storm effects into updated guidance [17] Q&A Session Summary Question: Clarification on non-residential market guidance reduction - Management indicated that the guidance adjustment reflects a mark-to-market update based on performance in the first nine months, not a deterioration in the market [19][20] Question: Future product pipeline and contributions - Management noted that new products are contributing tens of millions of dollars in revenue and expect this to accelerate as commercialization improves [23][25] Question: NDS integration and cost synergies - NDS will be included in the Allied and other segments, with expected annual cost synergies of $25 million by year three [29] Question: Capital expenditures outlook - The increase in CapEx outlook is related to timing of asset service rather than specific projects [34][35] Question: Free cash flow generation and working capital - Strong working capital performance was driven by effective management across receivables, inventory, and accounts payable [75] Question: Demand trends within pipe segment - The HP Pipe segment is performing well, while the agriculture segment is facing challenges, impacting overall pipe sales [95]