HILLIARD, Ohio--(BUSINESS WIRE)--
Advanced Drainage Systems, Inc. (NYSE: WMS) (“ADS” or the “Company”), a
leading global manufacturer of water management products and solutions
for commercial, residential, infrastructure and agricultural
applications, today announced financial results for the fiscal third
quarter ended December 31, 2016.
Third Fiscal Quarter 2017 Highlights
- Net sales decreased 6% to $295 million
- Net income decreased 21% to $10 million
- Adjusted EBITDA (Non-GAAP) decreased 12% to $43 million
Year-to-Date 2017 Highlights
- Net sales decreased 3% to $1,013 million
- Net income increased 30% to $54 million
- Adjusted EBITDA (Non-GAAP) increased 9% to $181 million
- Cash flow from operating activities decreased 10% to $117 million
- Free cash flow (Non-GAAP) decreased 18% to $80 million
Joe Chlapaty, Chairman and Chief Executive Officer of ADS commented,
“Our results for the third quarter came in as expected, with continued
softness in the domestic Ag market, lower sales in the Canadian Ag
market and a relatively flat domestic construction market. In spite of
these market headwinds, we are pleased with our overall performance
during the quarter as we continued to outpace the overall construction
market while generating strong profits and cash flow. On a year-to-date
basis, we have generated solid growth of 5% in our non-residential end
market, and continue to see double digit growth of our HP Pipe as well
as strong growth in our Allied products.”
Chlapaty continued, “Overall, we continue to feel confident in our
ability to drive above-market growth and healthy profitability for
fiscal year 2017 and beyond. Importantly, we are taking steps to drive
additional shareholder value, including our newly authorized share
repurchase program, the PTI acquisition as well as our continued
investments in product innovation as shown through our new HPXR product.
We are also continuing to review our manufacturing footprint to identify
investments and other actions we can take to lower our overhead costs
and improve our efficiency while maintaining our commitment to excellent
customer service.”
Third Fiscal Quarter 2017 Results
Net sales decreased $18.1 million, or 5.8%, to $294.7 million for the
fiscal third quarter 2017, compared to $312.8 million in the prior
fiscal third quarter. The decrease in net sales was primarily due to
continued softness in domestic and the Canadian agriculture markets.
Gross profit decreased $5.4 million, or 7.2%, to $69.4 million for the
fiscal third quarter 2017, compared to $74.8 million in the prior fiscal
third quarter. As a percentage of net sales, gross profit decreased
slightly to 23.6%, compared to 23.9%, in the prior fiscal third quarter.
The decrease in gross profit was due primarily to the decrease in net
sales volume.
The Company reported Adjusted EBITDA (Non-GAAP) of $43.4 million in the
fiscal third quarter 2017 compared to Adjusted EBITDA of $49.5 million
in the prior fiscal third quarter, a decrease of 12.4%. As a percentage
of net sales, Adjusted EBITDA decreased to 14.7% for the fiscal third
quarter 2017 compared to 15.8% in the prior fiscal third quarter. The
decrease in Adjusted EBITDA was largely attributed to the same factors
mentioned above in addition to an increase in selling, general and
administrative costs.
Adjusted Earnings Per Fully Converted Share (Non-GAAP) for the fiscal
third quarter 2017 was $0.16 per share based on weighted average fully
converted shares of 73.4 million, decreased from an Adjusted Earnings
Per Fully Converted Share of $0.22 per share for the prior fiscal third
quarter.
A reconciliation of GAAP to Non-GAAP financial measures for Adjusted
EBITDA, Free Cash Flow and Adjusted Earnings Per Fully Converted Share
has 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.”
For the nine months ended December 31, 2016, the Company recorded net
cash provided by operating activities of $116.6 million compared to
$129.4 million for the same period last year. Net debt (total debt and
capital lease obligations net of cash) was $370.0 million as of December
31, 2016, a decrease of $32.3 million from December 31, 2015.
Fiscal Year 2017 Outlook
Based on current visibility, backlog of existing orders and business
trends, the Company has confirmed its net sales and Adjusted EBITDA
targets for fiscal 2017. Net sales are expected to be in the range of
$1.225 billion to $1.250 billion with Adjusted EBITDA between $190 and
$210 million for fiscal year 2017.
Webcast Information
The Company will host an investor conference call and webcast on
Thursday, February 9, 2017 at 10:00 a.m. Eastern Time. The live call can
be accessed by dialing 1-866-450-8367 (US toll-free) or 1-412-317-5465
(international) and asking to be connected to the Advanced Drainage
Systems, Inc. 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 for 90 days
following the call.
About ADS
ADS is the leading manufacturer of high performance thermoplastic
corrugated pipe, providing a comprehensive suite of water management
products and superior drainage solutions for use in the construction and
infrastructure marketplace. Its innovative products are used across a
broad range of end markets and applications, including non-residential,
residential, agriculture and infrastructure applications. The Company
has established a leading position in many of these end markets by
leveraging its national sales and distribution platform, its overall
product breadth and scale and its manufacturing excellence. Founded in
1966, the Company operates a global network of 63 manufacturing plants
and 31 distribution centers. To learn more about the ADS, please visit
the Company’s website at www.ads-pipe.com.
Forward Looking Statements
Certain statements in this press release may be deemed to be
forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended. 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, without limitation, 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; our ability to
continue to convert current demand for concrete, steel and PVC pipe
products into demand for our high performance thermoplastic corrugated
pipe and Allied Products; the effect of weather or seasonality; the loss
of any of our significant customers; the risks of doing business
internationally; the risks of conducting a portion of our operations
through joint ventures; our ability to expand into new geographic or
product markets; 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; 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 further delay in the filing of any
filings with the SEC; the review of potential weaknesses or deficiencies
in the Company’s disclosure controls and procedures, and discovering
further weaknesses of which we are not currently aware or which have not
been detected and the other risks and uncertainties described in the
Company’s filings with the Securities and Exchange Commission. 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 CONSOLIDATED
STATEMENTS OF INCOME (unaudited) |
|
| |
| |
| | Three Months Ended | | Nine Months Ended |
| | December 31, | | December 31, |
(Amounts in thousands, except per share data) | | 2016 |
| 2015 | | 2016 |
| 2015 |
Net sales
| |
$
|
294,716
| | |
$
|
312,827
| | |
$
|
1,013,077
| | |
$
|
1,045,280
| |
Cost of goods sold
| |
|
225,275
|
| |
|
237,985
|
| |
|
756,518
|
| |
|
809,432
|
|
Gross profit
| | |
69,441
| | | |
74,842
| | | |
256,559
| | | |
235,848
| |
Operating expenses:
| | | | | | | | |
Selling
| | |
21,292
| | | |
21,580
| | | |
68,732
| | | |
65,401
| |
General and administrative
| | |
22,719
| | | |
20,450
| | | |
78,429
| | | |
64,808
| |
Loss (gain) on disposal of assets and costs from exit and disposal
activities
| | |
2,138
| | | |
(603
|
)
| | |
3,077
| | | |
558
| |
Intangible amortization
| |
|
2,116
|
| |
|
2,182
|
| |
|
6,431
|
| |
|
7,049
|
|
Income from operations
| | |
21,176
| | | |
31,233
| | | |
99,890
| | | |
98,032
| |
Other expense:
| | | | | | | | |
Interest expense
| | |
4,221
| | | |
4,723
| | | |
13,551
| | | |
13,956
| |
Derivative (gains) losses and other (income) expense, net
| |
|
(772
|
)
| |
|
2,561
|
| |
|
(5,543
|
)
| |
|
18,333
|
|
Income before income taxes
| | |
17,727
| | | |
23,949
| | | |
91,882
| | | |
65,743
| |
Income tax expense
| | |
5,986
| | | |
10,090
| | | |
35,528
| | | |
23,156
| |
Equity in net loss of unconsolidated affiliates
| |
|
1,483
|
| |
|
917
|
| |
|
2,394
|
| |
|
935
|
|
Net income
| | |
10,258
| | | |
12,942
| | | |
53,960
| | | |
41,652
| |
Less net income (loss) attributable to noncontrolling interest
| |
|
1,205
|
| |
|
(189
|
)
| |
|
2,900
|
| |
|
4,481
|
|
Net income attributable to ADS
| |
|
9,053
|
| |
|
13,131
|
| |
|
51,060
|
| |
|
37,171
|
|
Accretion of Redeemable noncontrolling interest
| | |
(399
|
)
| | |
(329
|
)
| | |
(1,141
|
)
| | |
(586
|
)
|
Dividends to Redeemable convertible preferred stockholders
| | |
(407
|
)
| | |
(349
|
)
| | |
(1,247
|
)
| | |
(1,082
|
)
|
Dividends paid to unvested restricted stockholders
| |
|
(32
|
)
| |
|
(6
|
)
| |
|
(86
|
)
| |
|
(18
|
)
|
Net income available to common stockholders and participating
securities
| | |
8,215
| | | |
12,447
| | | |
48,586
| | | |
35,485
| |
Undistributed income allocated to participating securities
| |
|
(503
|
)
| |
|
(1,016
|
)
| |
|
(4,066
|
)
| |
|
(2,965
|
)
|
Net income available to common stockholders | | $ | 7,712 |
| | $ | 11,431 |
| | $ | 44,520 |
| | $ | 32,520 |
|
| | | | | | | |
|
Weighted average common shares outstanding: | | | | | | | | |
Basic
| | |
54,557
| | | |
54,133
| | | |
54,354
| | | |
53,880
| |
Diluted
| | |
55,167
| | | |
55,402
| | | |
55,156
| | | |
55,191
| |
Net income per share: | | | | | | | | |
Basic
| |
$
|
0.14
| | |
$
|
0.21
| | |
$
|
0.82
| | |
$
|
0.60
| |
Diluted
| |
$
|
0.14
| | |
$
|
0.21
| | |
$
|
0.81
| | |
$
|
0.59
| |
Cash dividends declared per share | |
$
|
0.06
| | |
$
|
0.05
| | |
$
|
0.18
| | |
$
|
0.15
| |
| | | | | | | | | | | | | | | |
|
ADVANCED DRAINAGE SYSTEMS, INC. AND SUBSIDIARIES CONSOLIDATED
BALANCE SHEETS (unaudited) |
|
| |
| | As of: |
(Amounts in thousands) | | December 31, 2016 |
| March 31, 2016 |
ASSETS | | | | |
Current assets: | | | | |
Cash
| |
$
|
12,097
| | |
$
|
6,555
| |
Receivables
| | |
154,576
| | | |
186,883
| |
Inventories
| | |
222,631
| | | |
230,466
| |
Deferred income taxes and other current assets
| |
|
5,482
|
| |
|
15,658
|
|
Total current assets
| | |
394,786
| | | |
439,562
| |
Property, plant and equipment, net
| | |
393,480
| | | |
391,744
| |
Other assets: | | | | |
Goodwill
| | |
100,441
| | | |
100,885
| |
Intangible assets, net
| | |
53,457
| | | |
59,869
| |
Other assets
| |
|
45,002
|
| |
|
45,256
|
|
Total assets | | $ | 987,166 |
| | $ | 1,037,316 |
|
| | | |
|
LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS’ EQUITY | | | | |
Current liabilities: | | | | |
Current maturities of debt obligations
| |
$
|
36,717
| | |
$
|
35,870
| |
Current maturities of capital lease obligations
| | |
20,367
| | | |
19,231
| |
Accounts payable
| | |
71,362
| | | |
119,606
| |
Current portion of liability-classified stock-based awards
| | |
11,104
| | | |
10,118
| |
Other accrued liabilities
| | |
56,720
| | | |
65,099
| |
Accrued income taxes
| |
|
20,406
|
| |
|
2,260
|
|
Total current liabilities
| | |
216,676
| | | |
252,184
| |
Long-term debt obligation
| | |
269,388
| | | |
312,214
| |
Long-term capital lease obligations
| | |
55,601
| | | |
56,809
| |
Deferred tax liabilities
| | |
52,159
| | | |
63,952
| |
Other liabilities
| |
|
31,070
|
| |
|
37,921
|
|
Total liabilities
| | |
624,894
| | | |
723,080
| |
Mezzanine equity: | | | | |
Redeemable convertible preferred stock
| | |
303,849
| | | |
310,240
| |
Deferred compensation — unearned ESOP shares
| | |
(200,180
|
)
| | |
(205,664
|
)
|
Redeemable noncontrolling interest in subsidiaries
| |
|
8,968
|
| |
|
7,171
|
|
Total mezzanine equity
| | |
112,637
| | | |
111,747
| |
Stockholders’ equity: | | | | |
Common stock
| | |
12,393
| | | |
12,393
| |
Paid-in capital
| | |
749,684
| | | |
739,097
| |
Common stock in treasury, at cost
| | |
(437,990
|
)
| | |
(440,995
|
)
|
Accumulated other comprehensive loss
| | |
(27,039
|
)
| | |
(21,261
|
)
|
Retained deficit
| |
|
(61,729
|
)
| |
|
(101,778
|
)
|
Total ADS stockholders’ equity
| | |
235,319
| | | |
187,456
| |
Noncontrolling interest in subsidiaries
| |
|
14,316
|
| |
|
15,033
|
|
Total stockholders’ equity
| |
|
249,635
|
| |
|
202,489
|
|
Total liabilities, mezzanine equity and stockholders’ equity | | $ | 987,166 |
| | $ | 1,037,316 |
|
| | | | | | | |
|
ADVANCED DRAINAGE SYSTEMS, INC. AND SUBSIDIARIES CONSOLIDATED
STATEMENTS OF CASH FLOWS (unaudited) |
|
| |
| | Nine Months Ended December 31, |
(Amounts in thousands) | | 2016 |
| 2015 |
Cash Flow from Operating Activities | |
$
|
116,631
| | |
$
|
129,441
| |
| | | | | |
|
Cash Flows from Investing Activities | | | | | | |
Capital expenditures
| | |
(36,504
|
)
| | |
(31,474
|
)
|
Purchases of property, plant and equipment through financing
| | |
(4,116
|
)
| | |
-
| |
Cash paid for acquisitions, net of cash acquired
| | |
-
| | | |
(3,188
|
)
|
Proceeds from note receivable to related party
| | |
-
| | | |
3,854
| |
Issuance of note receivable to related party
| | |
-
| | | |
(3,854
|
)
|
Other investing activities
| |
|
(801
|
)
| |
|
(741
|
)
|
Net cash used in investing activities
| | |
(41,421
|
)
| | |
(35,403
|
)
|
| | | | | |
|
Cash Flows from Financing Activities | | | | | | |
Proceeds from Revolving Credit Facility
| | |
315,400
| | | |
322,700
| |
Payments on Revolving Credit Facility
| | |
(329,400
|
)
| | |
(378,300
|
)
|
Payments on Term Loan
| | |
(7,500
|
)
| | |
(6,250
|
)
|
Payments on Senior Notes
| | |
(25,000
|
)
| | |
-
| |
Equipment financing
| | |
4,116
| | | |
-
| |
Proceeds from notes, mortgages, and other debt
| | |
-
| | | |
6,563
| |
Payments on notes, mortgages, and other debt
| | |
(650
|
)
| | |
(7,183
|
)
|
Payments on capital lease obligation
| | |
(16,373
|
)
| | |
(14,906
|
)
|
Cash dividends paid
| | |
(11,011
|
)
| | |
(12,671
|
)
|
Proceeds from exercise of stock options
| | |
2,687
| | | |
848
| |
Other financing activities
| |
|
(1,339
|
)
| |
|
(617
|
)
|
Net cash used in financing activities
| | |
(69,070
|
)
| | |
(89,816
|
)
|
| | | | | |
|
Effect of exchange rate changes on cash
| |
|
(598
|
)
| |
|
(1,433
|
)
|
Net change in cash
| | |
5,542
| | | |
2,789
| |
Cash at beginning of period
| |
|
6,555
|
| |
|
3,623
|
|
Cash at end of period | | $ | 12,097 |
| | $ | 6,412 |
|
| | | | | | | |
|
Selected Financial Data
The following tables set forth net sales by reportable segment for the
three and nine months ended December 31, 2016 and 2015, respectively.
|
| Three Months Ended |
| |
| Nine Months Ended |
| |
(Amounts in thousands, | | December 31, | | % | | December 31, | | % |
except percentages) | | 2016 |
| 2015 | | Variance | | 2016 |
| 2015 | | Variance |
Net sales | | | | | | | | | | | | |
Domestic | | | | | | | | | | | | |
Pipe
| |
$
|
182,061
| |
$
|
196,162
| |
-7.2
|
%
| |
$
|
627,397
| |
$
|
654,987
| |
-4.2
|
%
|
Allied Products
| |
|
72,251
| |
|
70,588
| |
2.4
|
%
| |
|
251,451
| |
|
237,228
| |
6.0
|
%
|
Total domestic
| | |
254,312
| | |
266,750
| |
-4.7
|
%
| | |
878,848
| | |
892,215
| |
-1.5
|
%
|
International | | | | | | | | | | | | |
Pipe
| | |
32,550
| | |
34,451
| |
-5.5
|
%
| | |
105,832
| | |
121,368
| |
-12.8
|
%
|
Allied Products
| |
|
7,854
| |
|
11,626
| |
-32.4
|
%
| |
|
28,397
| |
|
31,697
| |
-10.4
|
%
|
Total international
| | |
40,404
| | |
46,077
| |
-12.3
|
%
| | |
134,229
| | |
153,065
| |
-12.3
|
%
|
Consolidated | | | | | | | | | | | | |
Pipe
| | |
214,611
| | |
230,613
| |
-6.9
|
%
| | |
733,229
| | |
776,355
| |
-5.6
|
%
|
Allied Products
| |
|
80,105
| |
|
82,214
| |
-2.6
|
%
| |
|
279,848
| |
|
268,925
| |
4.1
|
%
|
Total net sales
| |
$
|
294,716
| |
$
|
312,827
| |
-5.8
|
%
| |
$
|
1,013,077
| |
$
|
1,045,280
| |
-3.1
|
%
|
| | | | | | | | | | | | | | | | | |
|
Non-GAAP Financial Measures
This press release contains financial information determined by methods
other than in accordance with accounting principles generally accepted
in the United States of America (“GAAP”). ADS management uses non-GAAP
measures in its analysis of the Company’s performance. Investors are
encouraged to review the reconciliation of non-GAAP financial measures
to the comparable GAAP results available in the accompanying tables.
Reconciliation of Non-GAAP Financial Measures
This press release includes references to Adjusted EBITDA, Free Cash
Flow and Adjusted Earnings Per Fully Converted Share, all non-GAAP
financial measures. These non-GAAP financial measures are used in
addition to and in conjunction with results presented in accordance with
GAAP. These measures are not intended to be substitutes for those
reported in accordance with GAAP. Adjusted EBITDA, Free Cash Flow, and
Adjusted Earnings per Fully Converted Share may be different from
non-GAAP financial measures used by other companies, even when similar
terms are used to identify such measures.
Adjusted EBITDA is a non-GAAP financial measure that comprises net
income before interest, income taxes, depreciation and amortization,
stock-based compensation, non-cash charges and certain other expenses.
The Company’s definition of Adjusted EBITDA may differ from similar
measures used by other companies, even when similar terms are used to
identify such measures. Adjusted EBITDA is a key metric used by
management and the Company’s board of directors to assess financial
performance and evaluate the effectiveness of the Company’s business
strategies. Accordingly, management believes that Adjusted EBITDA
provides useful information to investors and others in understanding and
evaluating our operating results in the same manner as the Company’s
management and board of directors. In order to provide investors with a
meaningful reconciliation, the Company has provided below
reconciliations of Adjusted EBITDA to net income.
Free Cash Flow is a non-GAAP financial measure that comprises cash flow
from operating activities less capital expenditures. Free Cash Flow is a
measure used by management and the Company’s board of directors to
assess the Company’s ability to generate cash. Accordingly, management
believes that Free Cash Flow provides useful information to investors
and others in understanding and evaluating our ability to generate cash
flow from operations after capital expenditures. In order to provide
investors with a meaningful reconciliation, the Company has provided
below a reconciliation of cash flow from operating activities to Free
Cash Flow.
Adjusted Earnings Per Fully Converted Share is a non-GAAP measure that
is calculated by adjusting our Net income per share – Basic, the most
comparable GAAP measure. To effect this adjustment with respect to Net
income available to common stockholders, we have (1) removed the
accretion of Redeemable noncontrolling interest in subsidiaries, (2)
added back the dividends to Redeemable convertible preferred
stockholders and dividends paid to unvested restricted stockholders, (3)
made corresponding adjustments to the amount allocated to participating
securities under the two class earnings per share computation method,
and (4) added back ESOP deferred compensation attributable to the shares
of Redeemable convertible preferred stock allocated to employee ESOP
accounts during the applicable period, which is a non-cash charge to our
earnings. We have also made adjustments to the weighted average common
shares outstanding – Basic to assume (1) share conversion of the
Redeemable convertible preferred stock outstanding shares to common
stock and (2) add shares of outstanding unvested restricted stock.
Adjusted Earnings Per Fully Converted Share (non-GAAP) is a key metric
used by management and our board of directors to assess our financial
performance. This information is useful to investors as the preferred
shares held by the ESOP are required to be distributed to our employees
over time, which is done in the form of common stock after the
conversion of the preferred shares. As such, this measure is included
because it provides investors with information to understand the impact
on the financial statements once all preferred shares are converted and
distributed.
The following tables present a reconciliation of Adjusted EBITDA to Net
Income, Free Cash Flow to Cash Flow from Operating Activities, and
Adjusted Earnings Per Fully Converted Share to Net income per share –
Basic, the most comparable GAAP measures, for each of the periods
indicated:
Reconciliation of Adjusted EBITDA to Net Income |
|
| |
| |
| | Three Months Ended | | Nine Months Ended |
| | December 31, | | December 31, |
(Amounts in thousands) | | 2016 |
| 2015 | | 2016 |
| 2015 |
Net income | |
$
|
10,258
| | |
$
|
12,942
| | |
$
|
53,960
| | |
$
|
41,652
| |
Depreciation and amortization
| | |
18,029
| | | |
17,302
| | | |
54,065
| | | |
52,053
| |
Interest expense
| | |
4,221
| | | |
4,723
| | | |
13,551
| | | |
13,956
| |
Income tax expense
| |
|
5,986
|
| |
|
10,090
|
| |
|
35,528
|
| |
|
23,156
|
|
EBITDA
| | |
38,494
| | | |
45,057
| | | |
157,104
| | | |
130,817
| |
Derivative fair value adjustments
| | |
(2,237
|
)
| | |
(1,784
|
)
| | |
(11,297
|
)
| | |
7,750
| |
Foreign currency translation (gains) losses
| | |
(601
|
)
| | |
569
| | | |
(1,678
|
)
| | |
735
| |
Loss (gain) on disposal of assets and costs from exit and disposal
activities
| | |
2,138
| | | |
(603
|
)
| | |
3,077
| | | |
558
| |
Unconsolidated affiliates interest, tax, depreciation and
amortization
| | |
469
| | | |
632
| | | |
2,049
| | | |
2,270
| |
Contingent consideration remeasurement
| | |
(15
|
)
| | |
14
| | | |
42
| | | |
114
| |
Stock-based compensation (benefit) expense
| | |
(3,413
|
)
| | |
(5,206
|
)
| | |
2,699
| | | |
(2,994
|
)
|
ESOP deferred stock-based compensation
| | |
2,323
| | | |
3,125
| | | |
7,428
| | | |
9,375
| |
(Benefit) expense related to executive termination payments
| | |
(170
|
)
| | |
94
| | | |
(12
|
)
| | |
258
| |
Restatement-related costs
| | |
6,406
| | | |
7,618
| | | |
21,391
| | | |
16,328
| |
Loss related to BaySaver acquisition
| |
|
-
|
| |
|
-
|
| |
|
-
|
| |
|
490
|
|
Adjusted EBITDA | |
$
|
43,394
|
| |
$
|
49,516
|
| |
$
|
180,803
|
| |
$
|
165,701
|
|
| | | | | | | | | | | | | | | |
|
Reconciliation of Segment Adjusted EBITDA to Net Income |
|
| |
| | Three Months Ended December 31, |
| | 2016 |
| 2015 |
(Amounts in thousands) | | Domestic |
| International | | Domestic |
| International |
Net income (loss) | |
$
|
7,233
| | |
$
|
3,025
| | |
$
|
13,846
| | |
$
|
(904
|
)
|
Depreciation and amortization
| | |
15,911
| | | |
2,118
| | | |
15,221
| | | |
2,081
| |
Interest expense
| | |
4,127
| | | |
94
| | | |
4,606
| | | |
117
| |
Income tax expense
| |
|
5,342
|
| |
|
644
|
| |
|
7,196
|
| |
|
2,894
|
|
EBITDA
| | |
32,613
| | | |
5,881
| | | |
40,869
| | | |
4,188
| |
Derivative fair value adjustments
| | |
(2,237
|
)
| | |
-
| | | |
(1,733
|
)
| | |
(51
|
)
|
Foreign currency translation (gains) losses
| | |
-
| | | |
(601
|
)
| | |
-
| | | |
569
| |
Loss (gain) on disposal of assets and costs from exit and disposal
activities
| | |
1,258
| | | |
880
| | | |
(546
|
)
| | |
(57
|
)
|
Unconsolidated affiliates interest, tax, depreciation and
amortization
| | |
275
| | | |
194
| | | |
223
| | | |
409
| |
Contingent consideration remeasurement
| | |
(15
|
)
| | |
-
| | | |
14
| | | |
-
| |
Stock-based compensation benefit
| | |
(3,413
|
)
| | |
-
| | | |
(5,206
|
)
| | |
-
| |
ESOP deferred stock-based compensation
| | |
2,323
| | | |
-
| | | |
3,125
| | | |
-
| |
(Benefit) expense related to executive termination payments
| | |
(170
|
)
| | |
-
| | | |
94
| | | |
-
| |
Restatement-related costs
| |
|
6,406
|
| |
|
-
|
| |
|
7,618
|
| |
|
-
|
|
Adjusted EBITDA | |
$
|
37,040
|
| |
$
|
6,354
|
| |
$
|
44,458
|
| |
$
|
5,058
|
|
| | | | | | | | | | | | | | | |
|
|
| Nine Months Ended December 31, |
| | 2016 |
| 2015 |
(Amounts in thousands) | | Domestic |
| International | | Domestic |
| International |
Net income | |
$
|
43,704
| | |
$
|
10,256
| | |
$
|
28,067
| | |
$
|
13,585
| |
Depreciation and amortization
| | |
47,418
| | | |
6,647
| | | |
45,626
| | | |
6,427
| |
Interest expense
| | |
13,236
| | | |
315
| | | |
13,544
| | | |
412
| |
Income tax expense
| |
|
31,319
|
| |
|
4,209
|
| |
|
20,725
|
| |
|
2,431
|
|
EBITDA
| | |
135,677
| | | |
21,427
| | | |
107,962
| | | |
22,855
| |
Derivative fair value adjustments
| | |
(11,297
|
)
| | |
-
| | | |
7,768
| | | |
(18
|
)
|
Foreign currency translation (gains) losses
| | |
-
| | | |
(1,678
|
)
| | |
-
| | | |
735
| |
Loss (gain) on disposal of assets and costs from exit and disposal
activities
| | |
2,040
| | | |
1,037
| | | |
795
| | | |
(237
|
)
|
Unconsolidated affiliates interest, tax, depreciation and
amortization
| | |
826
| | | |
1,223
| | | |
769
| | | |
1,501
| |
Contingent consideration remeasurement
| | |
42
| | | |
-
| | | |
114
| | | |
-
| |
Stock-based compensation expense (benefit)
| | |
2,699
| | | |
-
| | | |
(2,994
|
)
| | |
-
| |
ESOP deferred stock-based compensation
| | |
7,428
| | | |
-
| | | |
9,375
| | | |
-
| |
(Benefit) expense related to executive termination payments
| | |
(12
|
)
| | |
-
| | | |
258
| | | |
-
| |
Restatement-related costs
| | |
21,391
| | | |
-
| | | |
16,328
| | | |
-
| |
Loss related to BaySaver acquisition
| |
|
-
|
| |
|
-
|
| |
|
490
|
| |
|
-
|
|
Adjusted EBITDA | |
$
|
158,794
|
| |
$
|
22,009
|
| |
$
|
140,865
|
| |
$
|
24,836
|
|
| | | | | | | | | | | | | | | |
|
Reconciliation of Free Cash Flow to Cash flow from Operating
Activities |
|
| |
| | Nine Months Ended |
| | December 31, |
(Amounts in thousands) | | 2016 |
| 2015 |
Cash flow from operating activities | |
$
|
116,631
| | |
$
|
129,441
| |
Capital expenditures
| |
|
(36,504
|
)
| |
|
(31,474
|
)
|
Free cash flow | |
$
|
80,127
|
| |
$
|
97,967
|
|
| | | | | | | |
|
Reconciliation of Adjusted Earnings Per Fully Converted Share
(non-GAAP) to Net Income per Share - Basic |
|
| |
| |
| | Three Months Ended | | Nine Months Ended |
| | December 31, | | December 31, |
(Amounts in thousands, except per share data) | | 2016 |
| 2015 | | 2016 |
| 2015 |
Net income available to common stockholders | | $ | 7,712 | | $ | 11,431 | | $ | 44,520 | | $ | 32,520 |
Weighted average common shares outstanding - Basic | | | 54,557 | | | 54,133 | | | 54,354 | | | 53,880 |
Net income per share – Basic | | | 0.14 | | | 0.21 | | | 0.82 | | | 0.60 |
Adjustments to net income available to common stockholders:
| | | | | | | | |
Accretion of Redeemable non-controlling interest in subsidiaries
| | |
399
| | |
329
| | |
1,141
| | |
586
|
Dividends to Redeemable convertible preferred stockholders
| | |
407
| | |
349
| | |
1,247
| | |
1,082
|
Dividends paid to unvested restricted stockholders
| | |
32
| | |
6
| | |
86
| | |
18
|
Undistributed income allocated to participating securities
| |
|
503
| |
|
1,016
| |
|
4,066
| |
|
2,965
|
Total adjustments to net income available to common stockholders
| |
|
1,341
| |
|
1,700
| |
|
6,540
| |
|
4,651
|
Net income attributable to ADS
| |
$
|
9,053
| |
$
|
13,131
| |
$
|
51,060
| |
$
|
37,171
|
Adjustments to net income attributable to ADS:
| | | | | | | | |
Fair value of ESOP compensation related to Redeemable convertible
preferred stock
| |
|
2,325
| |
|
3,125
| |
|
7,428
| |
|
9,375
|
Adjusted net income — (Non-GAAP) | | $ | 11,378 | | $ | 16,256 | | $ | 58,488 | | $ | 46,546 |
Weighted Average Common Shares Outstanding — Basic
| | |
54,557
| | |
54,133
| | |
54,354
| | |
53,880
|
Adjustments to weighted average common shares outstanding — Basic
| | | | | | | | |
Unvested restricted shares
| | |
55
| | |
114
| | |
63
| | |
126
|
Redeemable convertible preferred shares
| |
|
18,774
| |
|
19,257
| |
|
18,913
| |
|
19,484
|
Weighted Average Fully Converted Common Shares (Non-GAAP) | |
| 73,386 | |
| 73,504 | |
| 73,330 | |
| 73,490 |
Adjusted Earnings per Fully Converted Share (Non-GAAP) | | $ | 0.16 | | $ | 0.22 | | $ | 0.80 | | $ | 0.63 |
View source version on businesswire.com: http://www.businesswire.com/news/home/20170209005244/en/
Advanced Drainage Systems, Inc.
Michael Higgins, 614-658-0050
Mike.higgins@ads-pipe.com
Source: Advanced Drainage Systems, Inc.