(Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (614) 658-0050 (Registrant's Telephone Number, Including Area Code) Securities registered pursuant to Section 12(b) of the Act: For the quarterly period ended June 30, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission file number: 001-36557 ADVANCED DRAINAGE SYSTEMS, I ...

Washington, D.C. 20549 Form 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended March 31, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to COMMISSION FILE NO.: 001-36557 ADVANCED DRAINAGE SYSTEMS, INC. UNITED STATES SECURITIES AND EXCHANGE COMMISSION Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securit ...

Advanced Drainage Systems, Inc. (NYSE:WMS) Q4 2023 Earnings Conference Call May 18, 2023 10:00 AM ET Company Participants Michael Higgins - Vice President of Corporate Strategy and Investor Relations Scott Barbour - President and CEO Scott Cottrill - CFO Conference Call Participants Michael Halloran - Baird Matthew Bouley - Barclays Spencer Kaufman - UBS Joseph Ahlersmeyer - Deutsche Bank Jeffrey Stevenson - Loop Capital Bryan Blair - Oppenheimer Operator Hello, everyone and welcome to ADS's Fourth Quarter ...

//ADS Q4 Fiscal 2023 Financial Results May 18, 2023 Management Presenters Scott Barbour President and Chief Executive Officer Scott Cottrill Executive Vice President, Chief Financial Officer Mike Higgins Vice President, Corporate Strategy & Investor Relations //ADS Forward Looking Statements and Non-GAAP Financial Metrics Forward Looking Statements Cartain statements in this press release may be deemed to be forward-looking statements. These statements are not historical fasts but rather are bossed on the C ...

Financial Data and Key Metrics Changes - Consolidated net sales declined by 8% in Q3 2023, with the ADS business down 3% primarily due to weakness in the non-residential market and shipments to retail partners [15][23] - Infiltrator sales experienced a significant decline of 30%, attributed to reduced housing starts and completions, as well as the completion of inventory destocking [15][23] - Adjusted EBITDA margins expanded by 130 basis points year-over-year despite lower demand, driven by favorable pricing and material input costs [27] Business Line Data and Key Metrics Changes - The ADS business faced a decline in both residential and non-residential end markets, with single-family housing starts impacting Infiltrator products and beginning to affect the ADS residential business [23][24] - The company continues to execute its material conversion strategy, which is expected to help offset lower demand volumes [17][24] Market Data and Key Metrics Changes - Demand for construction products slowed significantly in December, with weakness emerging in various geographies including the Midwest and West [13][16] - The Architectural Billing Index has shown signs of decline, indicating a weak outlook for construction activity in 2023 [14] Company Strategy and Development Direction - The company remains committed to its long-term growth strategy in stormwater and on-site septic wastewater markets, focusing on converting projects from traditional materials to environmentally friendly solutions [7][11] - Continued investment in growth regions and products, as well as productivity initiatives including automation and safety, are key pillars of the company's strategy [11][20] - The company is also focused on optimizing its manufacturing footprint by closing three facilities and reducing headcount by approximately 15% [26][18] Management's Comments on Operating Environment and Future Outlook - Management expressed that the current demand environment is challenging due to rising interest rates and inflation, which are creating uncertainty in the market [5][16] - The company expects the challenging demand environment to persist through most of 2023, but remains confident in its ability to maintain adjusted EBITDA margins in the 28% to 29% range [18][32] - Management highlighted the importance of the Infrastructure Investment and Jobs Act and other growth opportunities in the infrastructure and agriculture markets [24][21] Other Important Information - The company generated $534 million of free cash flow year-to-date, compared to $93 million in the prior year, and had over $1 billion of liquidity at the end of the quarter [28][29] - The company repurchased 3.8 million shares for $375 million, with $625 million remaining under the current share repurchase authorization [30] Q&A Session Summary Question: Context on December's Demand Decline and Backlog Visibility - Management noted that demand slowed significantly in December, with shipping halting across most market segments, and characterized the backlog as normalizing to pre-pandemic levels [36][40] Question: Pricing and Cost Dynamics - Management confirmed that pricing remains resilient, with year-over-year increases, and highlighted that the price/cost dynamic is favorable [41][43] Question: Cost Saving Initiatives and Capacity Growth - Management discussed cost-saving measures including plant closures and headcount reductions, indicating that two-thirds of targeted cost-outs would be in variable costs [46][47] Question: Margin Sustainability Amid Lower Demand - Management indicated that the commitment to maintaining margins in the 28% to 29% range is based on cost containment actions and favorable pricing dynamics [52] Question: Competitive Environment and Pricing Power - Management expressed confidence in maintaining pricing power against competitors, particularly in markets where they compete against traditional materials [70][72] Question: Outlook for Residential Land Development - Management noted continued strength in the Southeast and Texas markets, while acknowledging softness in the Northeast and Midwest [75][76] Question: Contribution of Price and Volume to Sales Decline - Management clarified that the sales decline was primarily driven by volume, with pricing remaining stable year-over-year [78][79]

[PART I. FINANCIAL INFORMATION](index=3&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Item 1. Condensed Consolidated Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements%20(Unaudited)) This section presents the unaudited financial statements for the three and nine months ended December 31, 2022, compared to the prior year, including balance sheets, statements of operations, comprehensive income, cash flows, and stockholders' equity, along with detailed notes [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Consolidated Balance Sheet Highlights (in thousands) | Account | Dec 31, 2022 | Mar 31, 2022 | | :--- | :--- | :--- | | **Assets** | | | | Cash | $426,690 | $20,125 | | Total current assets | $1,157,366 | $871,898 | | Total assets | $3,005,658 | $2,649,758 | | **Liabilities & Equity** | | | | Total current liabilities | $370,280 | $391,241 | | Long-term debt obligations | $1,272,040 | $908,705 | | Total liabilities | $1,889,917 | $1,544,713 | | Total stockholders' equity | $958,613 | $909,661 | [Condensed Consolidated Statements of Operations](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Statements of Operations Highlights (in thousands, except per share data) | Metric | Three Months Ended Dec 31, 2022 | Three Months Ended Dec 31, 2021 | Nine Months Ended Dec 31, 2022 | Nine Months Ended Dec 31, 2021 | | :--- | :--- | :--- | :--- | :--- | | Net sales | $655,167 | $715,357 | $2,453,562 | $2,091,128 | | Gross profit | $223,917 | $208,977 | $895,987 | $610,155 | | Income from operations | $124,487 | $110,314 | $593,679 | $331,141 | | Net income | $83,182 | $74,462 | $425,041 | $227,897 | | Diluted EPS | $0.99 | $0.86 | $5.02 | $2.61 | [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Cash Flow Summary for Nine Months Ended Dec 31 (in thousands) | Cash Flow Category | 2022 | 2021 | | :--- | :--- | :--- | | Net cash provided by operating activities | $660,438 | $193,847 | | Net cash used in investing activities | ($174,822) | ($150,040) | | Net cash used in financing activities | ($78,590) | ($216,574) | | Net change in cash | $406,565 | ($172,836) | - Significant financing activities in the nine months ended Dec 31, 2022 included proceeds from Senior Notes of **$500.0 million** and common stock repurchases of **$375.0 million**[14](index=14&type=chunk) [Notes to the Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations for the line items in the financial statements, covering business segments, the acquisition of Cultec, revenue recognition, debt structure, stock-based compensation, and segment performance data - The company operates in three reportable segments: Pipe, Infiltrator Water Technologies, and International, along with an 'Allied Products and Other' category[21](index=21&type=chunk) - On April 29, 2022, the company acquired Cultec, Inc. for a total consideration of **$48.0 million**, expanding its portfolio in stormwater and onsite septic wastewater solutions[26](index=26&type=chunk) - In June 2022, the company issued **$500.0 million** in 6.375% Senior Notes due 2030[47](index=47&type=chunk) - During the nine months ended December 31, 2022, the company repurchased **3.8 million shares** of common stock for **$375.0 million**[40](index=40&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=19&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management analyzes Q3 and nine-month fiscal 2023 financial performance, detailing sales, gross profit, liquidity, and capital resources [Results of Operations](index=20&type=section&id=Results%20of%20Operations) Operating results for Q3 and nine months ended December 31, 2022, detail sales and gross profit trends, highlighting Q3 sales decrease and nine-month growth Q3 FY2023 vs Q3 FY2022 Performance (in thousands) | Metric | Q3 FY2023 | Q3 FY2022 | % Change | | :--- | :--- | :--- | :--- | | Net Sales | $655,167 | $715,357 | (8.4)% | | Gross Profit | $223,917 | $208,977 | 7.1% | | Adjusted EBITDA | $169,737 | $176,155 | (3.6)% | Nine Months FY2023 vs Nine Months FY2022 Performance (in thousands) | Metric | 9M FY2023 | 9M FY2022 | % Change | | :--- | :--- | :--- | :--- | | Net Sales | $2,453,562 | $2,091,128 | 17.3% | | Gross Profit | $895,987 | $610,155 | 46.8% | | Adjusted EBITDA | $731,982 | $507,541 | 44.2% | - The increase in gross profit for both the three and nine-month periods was primarily driven by favorable pricing on products and favorable material costs, which offset decreased sales volume and other inflationary pressures[77](index=77&type=chunk)[82](index=82&type=chunk) [Liquidity and Capital Resources](index=24&type=section&id=Liquidity%20and%20Capital%20Resources) The company details its strong liquidity, increased operating cash flow, and significant financing activities including debt issuance and share repurchases - As of December 31, 2022, the company had total liquidity of **$1,017.1 million**, comprising **$426.7 million** in cash and **$590.4 million** available under its Revolving Credit Agreement[121](index=121&type=chunk) - Free Cash Flow for the nine months ended Dec 31, 2022, was **$533.6 million**, a significant increase from **$93.5 million** in the prior-year period, driven by higher operating income and favorable working capital changes[118](index=118&type=chunk)[124](index=124&type=chunk) - Key financing activities included issuing **$500.0 million** of 2030 Senior Notes and using cash for a **$375.0 million** common stock repurchase[127](index=127&type=chunk)[135](index=135&type=chunk) - The company anticipates capital expenditures of approximately **$175 million** for the full fiscal year 2023[126](index=126&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=29&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risks are interest rates, raw material prices, and foreign currency, with interest rate risk on variable-rate debt as the main exposure - The company is subject to interest rate risk on its variable-rate debt, including the Revolving Credit Facility and Term Loan Facility[150](index=150&type=chunk) - A hypothetical **1.0%** increase in interest rates on variable-rate debt would increase the company's annual interest expense by approximately **$4.2 million**, based on borrowings as of December 31, 2022[150](index=150&type=chunk) [Item 4. Controls and Procedures](index=29&type=section&id=Item%204.%20Controls%20and%20Procedures) The CEO and CFO concluded the company's disclosure controls and procedures were effective as of December 31, 2022, with no material changes to internal control - Based on their evaluation, the CEO and CFO concluded that the company's disclosure controls and procedures were effective as of December 31, 2022[152](index=152&type=chunk) - No changes occurred during the quarter that materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[153](index=153&type=chunk) [PART II. OTHER INFORMATION](index=30&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=30&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various legal proceedings arising in the ordinary course of business but does not believe they will have a material adverse impact on its financial position or results of operations - The company is involved in various legal proceedings that arise in the ordinary course of business[155](index=155&type=chunk) - Management does not believe that current litigation, claims, and administrative proceedings will have a material adverse impact on the company's financial position or results of operations[155](index=155&type=chunk) [Item 1A. Risk Factors](index=30&type=section&id=Item%201A.%20Risk%20Factors) This section refers to risk factors previously disclosed in the company's Fiscal 2022 Form 10-K, with no new significant risks detailed here - The report refers to the risk factors described in "Part I, Item 1A — Risk Factors" of the company's Fiscal 2022 Form 10-K for important risk disclosures[157](index=157&type=chunk) [Item 2. Unregistered Sale of Equity Securities and Use of Proceeds](index=30&type=section&id=Item%202.%20Unregistered%20Sale%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company discusses its common stock repurchase program, detailing recent repurchases and the remaining authorization under the program - In February 2022, the Board of Directors authorized a **$1.0 billion** common stock repurchase program[158](index=158&type=chunk) Share Repurchases for Three Months Ended Dec 31, 2022 | Metric | Value | | :--- | :--- | | Total Shares Repurchased | 1.9 million | | Total Cost | $179.9 million | | Remaining Authorization | ~$625.0 million | [Other Items (Items 3, 4, 5, 6)](index=30&type=section&id=Other%20Items%20(Items%203,%204,%205,%206)) This section confirms no defaults on senior securities, no applicable mine safety disclosures, no other material information, and lists filed exhibits - Item 3: There were no defaults upon senior securities[160](index=160&type=chunk) - Item 4: Mine safety disclosures are not applicable[160](index=160&type=chunk) - Item 5: There was no other information to disclose[161](index=161&type=chunk)

Financial Performance - Q3 Fiscal Year 2023 revenue decreased by 8% to $655.2 million compared to $715.4 million in Q3 Fiscal Year 2022[11, 33] - Adjusted EBITDA decreased by 4% to $169.7 million in Q3 Fiscal Year 2023, compared to $176.2 million in Q3 Fiscal Year 2022, but Adjusted EBITDA Margin increased by 130 basis points[6, 12, 39] - Year-to-date Fiscal Year 2023 revenue increased by 17% to $2453.6 million compared to $2091.1 million in the same period of Fiscal Year 2022[31, 34] - Year-to-date Adjusted EBITDA increased by 26% to 32% with a margin of 28.6% - 29.2%, an increase of +420 to +480 basis points[15, 32] Business Segment Performance - ADS Legacy revenue decreased by 3%, while Infiltrator revenue decreased significantly by 30% in Q3 Fiscal Year 2023 compared to Q3 Fiscal Year 2022[7] - Year-to-date, ADS Legacy revenue increased by 22%, while Infiltrator revenue remained flat (0% change) compared to the same period last year[31] Market Dynamics - Construction market decreased by 11%, with Non-Residential down 8% and Residential down 17%, while Infrastructure and Agriculture increased by 1% and 7% respectively in Q3 Fiscal Year 2023[11] - For the nine months ended December 31, 2022, the construction market increased 19%, with non-residential up 24%, residential up 14%, infrastructure up 14%, and agriculture up 7%[31] Financial Position - The company maintained liquidity over $1 billion and a favorable leverage position, and repurchased 3.8 million shares year-to-date through December 31, 2022[9] - Free Cash Flow for Fiscal Year 2022 was $534 million, compared to $93 million in Fiscal Year 2023[13, 14] Outlook - The company expects net sales of $2975 million to $3050 million, up 7% to 10%, and Adjusted EBITDA of $850 million to $890 million, up 26% to 32% for Fiscal Year 2023[15]

Advanced Drainage Systems, Inc. (NYSE:WMS) Q2 2023 Earnings Conference Call November 3, 2022 10:00 AM ET Company Participants Mike Higgins - VP, Corporate Strategy & IR Scott Barbour - President & CEO Scott Cottrill - CFO Conference Call Participants Michael Halloran - Baird Matthew Bouley - Barclays Josh Pokrzywinski - Morgan Stanley Garik Shmois - Loop Capital Spencer Kaufman - UBS Operator Good morning, ladies and gentlemen, and welcome to Advanced Drainage Systems Second Quarter of Fiscal Year 2023 Resu ...

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 For the quarterly period ended September 30, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FORM 10-Q (Mark One) Commission file number: 001-36557 ADVANCED DRAINAGE SYSTEMS, INC. (Exact name of registrant as specified in its charter) (State or Other Jurisdiction of Incorporation or Organization) D ...

//ADS Q1 Fiscal 2023 Financial Results August 4, 2022 Management Presenters Scott Barbour President and Chief Executive Officer Scott Cottrill Executive Vice President, Chief Financial Officer Mike Higgins Vice President, Corporate Strategy & Investor Relations //ADS Forward Looking Statements and Non-GAAP Financial Metrics Forward Looking Statements certain statements in this press release may be deemed to be forward-looking statements. These statements are not historical facts but rather are based on the ...