Advanced Drainage Systems(US:WMS)2026-02-05 11:46Financial Performance - Net sales for Q3 Fiscal 2026 increased by $2.8 million, or 0.4%, to $693.4 million compared to $690.5 million in the prior year quarter[3] - Adjusted EBITDA margin for the quarter was 30.2%, an increase from 27.7% in the prior year, with Adjusted EBITDA rising by $17.7 million, or 9.3%, to $209.2 million[7] - Gross profit for Q3 increased by $17.6 million, or 7.3%, to $259.2 million, driven by volume growth and favorable price/cost dynamics[4] - Net income for Q3 increased by $11.7 million, or 14.3%, to $94.0 million, with net income per diluted share rising to $1.19[5] - Year-to-date net sales increased by $85.1 million, or 3.7%, to $2.3736 billion, with domestic allied products sales up by 7.9%[8] - Operating income for the three months ended December 31, 2025, was $136,823,000, up from $126,864,000 in 2024, reflecting a 7.4% increase, and for the nine months, it rose to $565,864,000 from $540,455,000, a 4.7% increase[24] - Net income attributable to ADS for the three months ended December 31, 2025, was $93,626,000, compared to $81,231,000 in 2024, marking a significant increase of 15.5%, while for the nine months, it increased to $393,565,000 from $373,015,000, a growth of 5.5%[24] Cash Flow and Dividends - Free cash flow for the year was $582.4 million, compared to $373.9 million in the prior year, reflecting strong cash generation[15] - Cash dividends declared per share increased to $0.18 for the three months ended December 31, 2025, from $0.16 in 2024, and for the nine months, it rose to $0.54 from $0.48, reflecting a growth of 12.5%[24] - The company reported a net change in cash of $541,632,000 for the nine months ended December 31, 2025, compared to a decrease of $1,095,000 in 2024[28] - Free cash flow for the nine months ended December 31, 2025, was $582.396 million, significantly higher than $373.854 million for the same period in 2024, indicating a strong cash generation capability[42] Acquisitions and Guidance - The company completed the acquisition of NDS, enhancing its stormwater capture portfolio, primarily funded by cash on hand[2] - Fiscal 2026 guidance was updated, projecting net sales between $2.990 billion and $3.040 billion and Adjusted EBITDA between $930 million and $960 million[17] Assets and Expenditures - Cash and cash equivalents as of December 31, 2025, were $1,008,190,000, a substantial increase from $463,319,000 as of March 31, 2025[26] - Total assets increased to $4,144,311,000 as of December 31, 2025, compared to $3,690,360,000 as of March 31, 2025, reflecting a growth of 12.3%[26] - Capital expenditures for the nine months ended December 31, 2025, were $196,737,000, compared to $166,410,000 in 2024, indicating an increase of 18.2%[28] Segment Performance - The Pipe segment reported net sales of $339.175 million for the three months ended December 31, 2025, down from $352.236 million in the same period of 2024, a decrease of about 3.1%[31] - The Infiltrator segment achieved net sales of $167.666 million for the three months ended December 31, 2025, compared to $160.076 million in the same period of 2024, marking an increase of approximately 4.0%[31] - Total international net sales for the three months ended December 31, 2025, were $50.483 million, down from $53.281 million in the same period of 2024, a decline of about 5.3%[31] - The Allied Products & Other segment reported net sales of $168.050 million for the three months ended December 31, 2025, up from $154.295 million in the same period of 2024, reflecting an increase of approximately 8.9%[31] Restructuring and Realignment - The company incurred restructuring and realignment expenses of $1.706 million for the three months ended December 31, 2025, which were not present in the same period of 2024[41]