Advanced Drainage Systems(WMS) - 2026 Q2 - Quarterly Results

Financial Performance - Net sales increased by $67.8 million, or 8.7%, to $850.4 million compared to $782.6 million in the prior year quarter[3] - Adjusted EBITDA increased by $42.0 million, or 17.1%, to $287.5 million, representing 33.8% of net sales compared to 31.4% in the prior year[8] - Net income increased by $25.3 million, or 19.3%, to $156.5 million, with net income per diluted share rising by $0.32, or 19.2%, to $1.99[6] - Total consolidated net sales for the three months ended September 30, 2025, were $850,381,000, an increase from $782,610,000 in the same period of 2024, representing a growth of 8.7%[31] - Adjusted EBITDA for the three months ended September 30, 2025, was $287,532,000, compared to $245,550,000 for the same period in 2024, reflecting an increase of 17.1%[41] - The company reported a net income of $156,500,000 for the three months ended September 30, 2025, compared to $131,174,000 for the same period in 2024, which is an increase of 19.2%[41] - Diluted earnings per share for the three months ended September 30, 2025, were $1.99, up from $1.67 in the same period of 2024, marking an increase of 19.2%[44] Sales and Revenue Growth - Infiltrator sales increased by $36.1 million, or 25.2%, to $179.7 million, driven by the acquisition of Orenco and growth in tanks and advanced treatment products[3] - Domestic allied products & other sales increased by $22.9 million, or 13.0%, to $199.0 million[3] - International net sales totaled $58,657,000 for the three months ended September 30, 2025, slightly down from $60,058,000 in the same period of 2024, a decrease of 2.3%[31] Guidance and Future Outlook - The company updated its fiscal 2026 guidance, expecting net sales in the range of $2.900 billion to $2.990 billion and Adjusted EBITDA between $900 million and $940 million[18] Cash Flow and Liquidity - Free cash flow increased to $398.8 million compared to $238.1 million in the prior year[13] - Net cash provided by operating activities for the six months ended September 30, 2025, was $509,843,000, compared to $350,326,000 in 2024, reflecting a 45.5% increase[29] - Free cash flow for the six months ended September 30, 2025, was $398,825,000, significantly higher than $238,144,000 for the same period in 2024, indicating a growth of 67.5%[42] - Total liquidity stood at $1,402.7 million, including cash of $812.9 million and $589.9 million available under credit facilities[14] Expenses and Costs - Selling, general and administrative expenses rose by $25.1 million, or 26.7%, to $119.2 million, primarily due to the acquisition of Orenco and transaction costs related to NDS[5] - Operating expenses for the three months ended September 30, 2025, were $119,224,000, an increase of 26.7% from $94,132,000 in 2024[25] - The company incurred restructuring and realignment expenses of $7,171,000 for the three months ended September 30, 2025, which were not present in the same period of 2024[41] Assets and Capital Expenditures - Total assets as of September 30, 2025, reached $4,079,289,000, up from $3,690,360,000 as of March 31, 2025[27] - Capital expenditures for the six months ended September 30, 2025, were $111,018,000, compared to $112,182,000 in the same period of 2024, showing a slight decrease of 1.0%[42] Debt and Shareholder Returns - Long-term debt obligations as of September 30, 2025, were $1,248,506,000, slightly down from $1,251,589,000 as of March 31, 2025[27] - The company declared cash dividends of $0.18 per share for the three months ended September 30, 2025, up from $0.16 per share in 2024[25] Share Information - The company reported a weighted average diluted shares outstanding of 78,310,000 for the three months ended September 30, 2025, compared to 78,110,000 in 2024[25] - Segment adjusted gross profit for the Pipe segment was $135,305,000 for the three months ended September 30, 2025, compared to $113,605,000 in 2024, reflecting a growth of 19.1%[40] - The company’s total segment adjusted gross profit for the three months ended September 30, 2025, was $380,065,000, an increase from $325,932,000 in the same period of 2024, representing a growth of 16.6%[40]