Advanced Drainage Systems Announces Fourth Quarter and Fiscal 2021 Results
Advanced Drainage Systems reported strong financial results for Q4 and fiscal year 2021. Q4 net sales rose 19.7% to $443.8 million, with net income up 488.1% to $20.8 million. For the fiscal year, net sales increased 18.5% to $2.0 billion, and net income surged to $226.1 million from a loss of $191.8 million in the previous year. Adjusted EBITDA grew 56.7% to $567.0 million. The company’s strong performance is attributed to material conversion strategies and robust demand across various end markets.
- Net sales increased 18.5% to $2.0 billion for fiscal 2021.
- Net income surged to $226.1 million from a loss of $191.8 million in the prior year.
- Adjusted EBITDA rose 56.7% to $567.0 million.
- Cash provided by operating activities increased 47.7% to $452.2 million.
- Strong demand noted in residential, agriculture, and non-residential construction markets.
- None.
Advanced Drainage Systems, Inc. (NYSE: WMS) (“ADS” or the “Company”), a leading provider of innovative water management solutions in the stormwater and on-site septic waste water industries today announced financial results for the fourth quarter and fiscal year ended March 31, 2021.
Fourth Quarter Fiscal 2021 Results
-
Net sales increased
19.7% to$443.8 million -
Net income increased
488.1% to$20.8 million -
Adjusted EBITDA (Non-GAAP) increased
31.1% to$94.5 million
Fiscal 2021 Results
-
Net sales increased
18.5% to$2.0 billion -
Net income increased to
$226.1 million , compared to a net loss of$191.8 million in the prior year -
Adjusted EBITDA (Non-GAAP) increased
56.7% to$567.0 million -
Cash provided by operating activities increased
47.7% to$452.2 million -
Free cash flow (Non-GAAP) increased
56.6% to$373.5 million
Scott Barbour, President and Chief Executive Officer of ADS commented, “Advanced Drainage Systems achieved another year of record financial performance in fiscal 2021. When confronted with a challenging operating environment, our employees adapted well to the new health and safety measures we implemented and remained focused on executing our plan and delivering exceptional results. Their hard work and perseverance enabled us to not only exceed our guidance for the year, but also surpass our financial targets set at our 2018 Investor Day. Our accomplishments during the past year, combined with our proven growth strategies, give me confidence in our ability to execute as we move into fiscal 2022.”
“Sales grew
“We also achieved record profitability in fiscal 2021, with 700-basis points of Adjusted EBITDA margin expansion year-over-year. In addition to capturing the benefits of leverage from our strong sales growth, both ADS and Infiltrator successfully offset inflationary costs through favorable pricing, operational productivity initiatives and our synergy programs.”
Barbour concluded, “Looking towards fiscal 2022, we are confident in our business outlook as our order book, project tracking, book-to-bill ratio and backlog continue to be favorable on a year-over-year basis. We are optimistic about improving forward looking market indicators, and well positioned to capitalize on growing residential development and horizontal construction. We will continue to generate above-market growth through the execution of our material conversion and water management solutions strategies. In order to offset building inflationary cost pressure on materials, labor and transportation, we are focused on disciplined execution, achieving favorable pricing and operational improvements, as well as disciplined capital spending to support our growing businesses at both ADS and Infiltrator.”
Fourth Quarter Fiscal 2021 Results
Net sales increased
Gross profit increased
Adjusted EBITDA (Non-GAAP) increased
Reconciliations of GAAP to Non-GAAP financial measures for Adjusted EBITDA and Free Cash Flow have been provided in the financial statement tables included in this press release. An explanation of these measures is also included below under the heading “Non-GAAP Financial Measures.”
Fiscal 2021 Results
Net sales increased
Gross profit increased
Adjusted EBITDA (Non-GAAP) increased
Balance Sheet and Liquidity
Net cash provided by operating activities increased
ADS had total liquidity of
Fiscal 2022 Outlook
Based on current visibility, backlog of existing orders and business trends, the Company has provided its net sales and Adjusted EBITDA targets for fiscal 2022. Net sales are expected to be in the range of
Webcast Information
Participants may Register Here for this conference call or copy and paste the following text into your browser: http://www.directeventreg.com/registration/event/3072617. After registering, participants will receive a confirmation through email, including dial in details and unique conference call codes for entry. Registration is open through the live call. To ensure participants are connected for the full call, please register at least 10 minutes before the start of the call. The live webcast will also be accessible via the "Events Calendar” section of the Company’s Investor Relations website, www.investors.ads-pipe.com. An archived version of the webcast will be available following the call.
About the Company
Advanced Drainage Systems is a leading provider of innovative water management solutions in the stormwater and on-site septic wastewater industries, providing superior drainage solutions for use in the construction and agriculture marketplace. For over 50 years, the Company has been manufacturing a variety of innovative and environmentally friendly alternatives to traditional materials. Its innovative products are used across a broad range of end markets and applications, including non-residential, residential, infrastructure and agriculture applications. The Company has established a leading position in many of these end markets by leveraging its national sales and distribution platform, overall product breadth and scale and manufacturing excellence. Founded in 1966, the Company operates a global network of approximately 60 manufacturing plants and 30 distribution centers. To learn more about ADS, please visit the Company’s website at www.adspipe.com.
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 Company’s current expectations, estimates and projections regarding the Company’s business, operations and other factors relating thereto. Words such as “may,” “will,” “could,” “would,” “should,” “anticipate,” “predict,” “potential,” “continue,” “expects,” “intends,” “plans,” “projects,” “believes,” “estimates,” “confident” and similar expressions are used to identify these forward-looking statements. Factors that could cause actual results to differ from those reflected in forward-looking statements relating to our operations and business include: fluctuations in the price and availability of resins and other raw materials and our ability to pass any increased costs of raw materials on to our customers in a timely manner; volatility in general business and economic conditions in the markets in which we operate, including the adverse impact on the U.S. and global economy of the COVID-19 global pandemic, and the impact of COVID-19 in the near, medium and long-term on our business, results of operations, financial position, liquidity or cash flows, and other factors relating to availability of credit, interest rates, fluctuations in capital and business and consumer confidence; cyclicality and seasonality of the non-residential and residential construction markets and infrastructure spending; the risks of increasing competition in our existing and future markets, including competition from both manufacturers of high performance thermoplastic corrugated pipe and manufacturers of products using alternative materials; uncertainties surrounding the integration of acquisitions and similar transactions, including the acquisition of Infiltrator Water Technologies and the integration of Infiltrator Water Technologies; our ability to realize the anticipated benefits from the acquisition of Infiltrator Water Technologies; risks that the acquisition of Infiltrator Water Technologies and related transactions may involve unexpected costs, liabilities or delays; our ability to continue to convert current demand for concrete, steel and polyvinyl chloride (“PVC”) pipe products into demand for our high performance thermoplastic corrugated pipe and Allied Products; the effect of any claims, litigation, investigations or proceedings; the effect of weather or seasonality; the loss of any of our significant customers; the risks of doing business internationally; our ability to remediate the material weakness in our internal control over financial reporting, including remediation of the control environment for our joint venture affiliate ADS Mexicana, S.A. de C.V.; the risks of conducting a portion of our operations through joint ventures; our ability to expand into new geographic or product markets, including risks associated with new markets and products associated with our recent acquisition of Infiltrator Water Technologies; our ability to achieve the acquisition component of our growth strategy; the risk associated with manufacturing processes; our ability to manage our assets; the risks associated with our product warranties; our ability to manage our supply purchasing and customer credit policies; the risks associated with our self-insured programs; our ability to control labor costs and to attract, train and retain highly-qualified employees and key personnel; our ability to protect our intellectual property rights; changes in laws and regulations, including environmental laws and regulations; our ability to project product mix; the risks associated with our current levels of indebtedness, including borrowings under our existing credit agreement and outstanding indebtedness under our existing senior notes; fluctuations in our effective tax rate; our ability to meet future capital requirements and fund our liquidity needs; the risk that additional information may arise that would require the Company to make additional adjustments or revisions or to restate the financial statements and other financial data for certain prior periods and any future periods; any delay in the filing of any filings with the Securities and Exchange Commission (“SEC”); the review of potential weaknesses or deficiencies in the Company’s disclosure controls and procedures, and discovering weaknesses of which we are not currently aware or which have not been detected; additional uncertainties related to accounting issues generally; and the other risks and uncertainties described in the Company’s filings with the SEC. New risks and uncertainties emerge from time to time and it is not possible for the Company to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this press release. In light of the significant uncertainties inherent in the forward-looking information included herein, the inclusion of such information should not be regarded as a representation by the Company or any other person that the Company’s expectations, objectives or plans will be achieved in the timeframe anticipated or at all. Investors are cautioned not to place undue reliance on the Company’s forward-looking statements and the Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
Financial Statements
ADVANCED DRAINAGE SYSTEMS, INC. AND SUBSIDIARIES |
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CONSOLIDATED STATEMENTS OF INCOME |
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(unaudited) |
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Three Months Ended |
|
|
Fiscal Year Ended |
|
||||||||||
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March 31, |
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|
March 31, |
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(Amounts in thousands, except per share data) |
2021 |
|
|
2020 |
|
|
2021 |
|
|
2020 |
|
||||
Net sales |
$ |
443,809 |
|
|
$ |
370,768 |
|
|
$ |
1,982,780 |
|
|
$ |
1,673,805 |
|
Cost of goods sold |
|
316,592 |
|
|
|
262,013 |
|
|
|
1,292,698 |
|
|
|
1,188,716 |
|
Cost of goods sold - ESOP special dividend compensation |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
168,610 |
|
Gross profit |
|
127,217 |
|
|
|
108,755 |
|
|
|
690,082 |
|
|
|
316,479 |
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