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Advanced Drainage Systems Announces Second Quarter Fiscal 2023 Results

11/03/2022

HILLIARD, Ohio--(BUSINESS WIRE)-- Advanced Drainage Systems, Inc. (NYSE: WMS) (“ADS” or the “Company”), a leading provider of innovative water management solutions in the stormwater and onsite septic wastewater industries today announced financial results for the fiscal second quarter ended September 30, 2022.

Second Quarter Fiscal 2023 Results

  • Net sales increased 25.2% to $884.2 million
  • Net income increased 101.0% to $153.4 million
  • Adjusted EBITDA (Non-GAAP) increased 59.7% to $263.2 million

Year-to-Date Fiscal 2023 Results

  • Net sales increased 30.7% to $1,798.4 million
  • Net income increased 122.8% to $341.9 million
  • Adjusted EBITDA (Non-GAAP) increased 69.7% to $562.2 million
  • Cash provided by operating activities increased 360.6% to $437.0 million
  • Free cash flow (Non-GAAP) increased $330.4 million to $361.5 million

Scott Barbour, President and Chief Executive Officer of ADS commented, "We achieved record second quarter revenue and Adjusted EBITDA this quarter. Sales growth of 25% was driven by favorable pricing at both ADS and Infiltrator, strong volume growth in Allied Products, and growth in the residential and agriculture end markets. In addition, we continued to make progress bringing down elevated levels of backlog, and lead times have improved in most geographies and product lines. The favorable top line growth we achieved in the second quarter was broad based across our construction and agriculture end markets, with notable strength in our priority states."

Barbour continued, "As we entered September and into October, we began to see the impact of the uncertain macroeconomic environment in isolated pockets across certain geographies and product lines. In particular, our Infiltrator and retail businesses began to feel the impact of channel destocking as well as some project slowdowns within our non-residential business in certain geographies. However, demand remains strong for residential land development and horizontal construction, particularly for warehouses and distribution centers. And while inflationary pressures have been persistent throughout the year, we are beginning to see some abatement, which when combined with our productivity initiatives position us well moving into the second half of Fiscal 2023.”

Barbour concluded, "Taking this into account, we are lowering our fiscal year guidance for revenue to our original Fiscal 2023 guidance of $3.100 billion to $3.200 billion. While uncertainty remains around general economic conditions, our leading indicators including project identification, quoting, book-to-bill and order trends give us confidence we can achieve the updated revenue guidance issued today. Importantly, our Adjusted EBITDA guidance remains unchanged as we execute on actions to improve cost and efficiency within the business."

Second Quarter Fiscal 2023 Results

Net sales increased $177.7 million, or 25.2%, to $884.2 million, as compared to $706.5 million in the prior year quarter. Domestic pipe sales increased $116.5 million, or 30.3%, to $501.0 million. Domestic allied products & other sales increased $56.5 million, or 38.8%, to $202.2 million. Infiltrator sales increased $4.8 million, or 3.3%, to $150.7 million. These increases were driven by double-digit sales growth in the U.S. construction and agriculture end markets. International sales increased $9.9 million, or 15.6%, to $73.5 million, driven by growth in the Canadian, Mexican and Exports businesses.

Gross profit increased $119.9 million, or 59.9%, to $320.0 million as compared to $200.1 million in the prior year. The increase in gross profit is primarily due to the increase in sales volume and favorable pricing on pipe, onsite septic and allied products. This increase was partially offset by inflationary pressures on manufacturing and transportation costs.

Adjusted EBITDA (Non-GAAP) increased $98.4 million, or 59.7%, to $263.2 million, as compared to $164.8 million in the prior year. The increase is primarily due to the factors mentioned above. As a percentage of net sales, Adjusted EBITDA was 29.8% as compared to 23.3% in the prior year.

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.”

Year-to-Date Fiscal 2023 Results

Net sales increased $422.6 million, or 30.7%, to $1,798.4 million, as compared to $1,375.8 million in the prior year quarter. Domestic pipe sales increased $267.3 million, or 35.2%, to $1,025.8 million. Domestic allied products & other sales increased $128.4 million, or 47.1%, to $401.1 million. Infiltrator sales increased $44.4 million, or 16.3%, to $317.0 million. These increases were driven by double-digit sales growth in the U.S. construction end markets. International sales increased $16.0 million, or 12.4%, to $145.0 million, driven by strong sales growth in the Mexican and Exports businesses.

Gross profit increased $270.9 million, or 67.5%, to $672.1 million as compared to $401.2 million in the prior year. The increase in gross profit is primarily due to the favorable pricing on pipe, onsite septic and allied products. This was partially offset by inflationary pressures of higher material and transportation costs along with higher manufacturing costs.

Adjusted EBITDA (Non-GAAP) increased $230.9 million, or 69.7%, to $562.2 million, as compared to $331.4 million in the prior year. The increase is primarily due to the factors mentioned above. As a percentage of net sales, Adjusted EBITDA was 31.3% as compared to 24.1% in the prior year.

Balance Sheet and Liquidity

Net cash provided by operating activities was $437.0 million, as compared to $94.9 million in the prior year. Free cash flow (Non-GAAP) was $361.5 million, as compared to $31.1 million in the prior year. Net debt (total debt and finance lease obligations net of cash) was $853.9 million as of September 30, 2022, a decrease of $70.6 million from March 31, 2022.

On June 9, 2022 the Company issued $500.0 million aggregate principal amount of 6.375% Senior Notes due 2030. Some of the proceeds of this issuance were used to repay the outstanding borrowings under its senior secured revolving credit facility.

ADS had total liquidity of $1,045.7 million, comprised of cash of $457.4 million as of September 30, 2022 and $588.4 million of availability under committed credit facilities. As of September 30, 2022, the Company’s trailing-twelve-month leverage ratio was 1.0 times Adjusted EBITDA.

In the six months ended September 30, 2022, the Company repurchased 1.9 million shares of its common stock for a total cost of $195.2 million. As of September 30, 2022, approximately $804.8 million of common stock may be repurchased under the authorization.

Fiscal 2023 Outlook

Based on current visibility, backlog of existing orders and business trends, the Company updated its financial targets for fiscal 2023. Net sales are now expected to be in the range of $3.100 billion to $3.200 billion. Adjusted EBITDA is unchanged and expected to be in the range of $900 to $940 million. Capital expenditures are expected to be approximately $175 million.

Conference Call Information

Webcast: Interested investors and other parties can listen to a webcast of the live conference call by logging in through the Investor Relations section of the Company's website at https://investors.ads-pipe.com/events-and-presentations. An online replay will be available on the same website following the call.

Teleconference: To participate in the live teleconference, participants may register at https://www.netroadshow.com/events/login?show=22275fee&confId=43001. 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.

About the Company

Advanced Drainage Systems is a leading manufacturer of innovative stormwater and onsite septic wastewater solutions that manages the world’s most precious resource: water. ADS provides superior drainage solutions for use in a wide variety of markets and applications including commercial, residential, infrastructure and agriculture. ADS delivers tremendous service to its customers with the industry’s largest company-owned fleet, an expansive sales team, and a vast manufacturing network of approximately 70 manufacturing plants and 37 distribution centers. ADS is the largest plastic recycling company in North America, ensuring over half a billion pounds of plastic is kept out of landfills every year. Founded in 1966, ADS’ water management solutions are designed to last for decades. To learn more, 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; the risks related to the COVID-19 pandemic or other pandemics in the future; disruption or volatility in general business and economic conditions in the markets in which we operate; 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; uncertainties surrounding the integration and realization of anticipated benefits of; 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; the risk associated with manufacturing processes; the effect of global climate change; cybersecurity risks; our ability to manage our supply purchasing and customer credit policies; 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; the risks associated with our current levels of indebtedness, including borrowings under our existing credit agreement and outstanding indebtedness under our existing senior notes; and 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

CONSOLIDATED STATEMENTS OF INCOME

(unaudited)

 

 

Three Months Ended
September 30,

 

Six Months Ended
September 30,

(In thousands, except per share data)

2022

 

2021

 

2022

 

2021

Net sales

$

884,209

 

 

$

706,471

 

 

$

1,798,395

 

 

$

1,375,771

 

Cost of goods sold

 

564,246

 

 

 

506,414

 

 

 

1,126,325

 

 

 

974,593

 

Gross profit

 

319,963

 

 

 

200,057

 

 

 

672,070

 

 

 

401,178

 

Operating expenses:

 

 

 

 

 

 

 

Selling, general and administrative

 

88,639

 

 

 

73,951

 

 

 

175,159

 

 

 

150,172

 

(Gain) loss on disposal of assets and costs from exit and disposal activities

 

(102

)

 

 

(901

)

 

 

201

 

 

 

(912

)

Intangible amortization

 

13,841

 

 

 

15,446

 

 

 

27,518

 

 

 

31,091

 

Income from operations

 

217,585

 

 

 

111,561

 

 

 

469,192

 

 

 

220,827

 

Other expense:

 

 

 

 

 

 

 

Interest expense

 

18,261

 

 

 

8,437

 

 

 

29,333

 

 

 

16,344

 

Derivative losses (gains) and other expense (income), net

 

395

 

 

 

202

 

 

 

(1,507

)

 

 

(1,812

)

Income before income taxes

 

198,929

 

 

 

102,922

 

 

 

441,366

 

 

 

206,295

 

Income tax expense

 

47,508

 

 

 

26,816

 

 

 

102,573

 

 

 

53,271

 

Equity in net income of unconsolidated affiliates

 

(1,956

)

 

 

(206

)

 

 

(3,066

)

 

 

(411

)

Net income

 

153,377

 

 

 

76,312

 

 

 

341,859

 

 

 

153,435

 

Less: net income attributable to noncontrolling interest

 

1,370

 

 

 

953

 

 

 

2,706

 

 

 

2,089

 

Net income attributable to ADS

 

152,007

 

 

 

75,359

 

 

 

339,153

 

 

 

151,346

 

Dividends to participating securities

 

 

 

 

(1,636

)

 

 

 

 

 

(3,276

)

Net income available to common stockholders and participating securities

 

152,007

 

 

 

73,723

 

 

 

339,153

 

 

 

148,070

 

Undistributed income allocated to participating securities

 

 

 

 

(10,494

)

 

 

 

 

 

(21,430

)

Net income available to common stockholders

$

152,007

 

 

$

63,229

 

 

$

339,153

 

 

$

126,640

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding:

 

 

 

 

 

 

 

Basic

 

83,466

 

 

 

70,464

 

 

 

83,306

 

 

 

70,993

 

Diluted

 

84,498

 

 

 

71,924

 

 

 

84,485

 

 

 

72,614

 

Net income per share:

 

 

 

 

 

 

 

Basic

$

1.82

 

 

$

0.90

 

 

$

4.07

 

 

$

1.78

 

Diluted

$

1.80

 

 

$

0.88

 

 

$

4.01

 

 

$

1.74

 

Cash dividends declared per share

$

0.12

 

 

$

0.11

 

 

$

0.24

 

 

$

0.22

 

ADVANCED DRAINAGE SYSTEMS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(unaudited)

 

 

As of

(Amounts in thousands)

September 30, 2022

 

March 31, 2022

ASSETS

 

 

 

Current assets:

 

 

 

Cash

$

457,357

 

 

$

20,125

 

Receivables, net

 

387,952

 

 

 

341,753

 

Inventories

 

479,171

 

 

 

494,324

 

Other current assets

 

23,400

 

 

 

15,696

 

Total current assets

 

1,347,880

 

 

 

871,898

 

Property, plant and equipment, net

 

653,432

 

 

 

619,383

 

Other assets:

 

 

 

Goodwill

 

619,487

 

 

 

610,293

 

Intangible assets, net

 

435,281

 

 

 

431,385

 

Other assets

 

121,519

 

 

 

116,799

 

Total assets

$

3,177,599

 

 

$

2,649,758

 

LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS’ EQUITY

 

 

 

Current liabilities:

 

 

 

Current maturities of debt obligations

$

16,765

 

 

$

19,451

 

Current maturities of finance lease obligations

 

5,358

 

 

 

5,089

 

Accounts payable

 

236,603

 

 

 

224,986

 

Other accrued liabilities

 

169,774

 

 

 

134,877

 

Accrued income taxes

 

10,800

 

 

 

6,838

 

Total current liabilities

 

439,300

 

 

 

391,241

 

Long-term debt obligations, net

 

1,275,211

 

 

 

908,705

 

Long-term finance lease obligations

 

13,893

 

 

 

11,393

 

Deferred tax liabilities

 

164,945

 

 

 

168,435

 

Other liabilities

 

68,580

 

 

 

64,939

 

Total liabilities

 

1,961,929

 

 

 

1,544,713

 

Mezzanine equity:

 

 

 

Redeemable common stock

 

159,928

 

 

 

 

Redeemable convertible preferred stock

 

 

 

 

195,384

 

Total mezzanine equity

 

159,928

 

 

 

195,384

 

Stockholders’ equity:

 

 

 

Common stock

 

11,642

 

 

 

11,612

 

Paid-in capital

 

1,119,453

 

 

 

1,065,628

 

Common stock in treasury, at cost

 

(536,697

)

 

 

(318,691

)

Accumulated other comprehensive loss

 

(33,775

)

 

 

(24,386

)

Retained earnings

 

477,790

 

 

 

158,876

 

Total ADS stockholders’ equity

 

1,038,413

 

 

 

893,039

 

Noncontrolling interest in subsidiaries

 

17,329

 

 

 

16,622

 

Total stockholders’ equity

 

1,055,742

 

 

 

909,661

 

Total liabilities, mezzanine equity and stockholders’ equity

$

3,177,599

 

 

$

2,649,758

 

ADVANCED DRAINAGE SYSTEMS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

 

 

Six Months Ended September 30,

(Amounts in thousands)

2022

 

2021

Cash Flow from Operating Activities

 

 

 

Net income

$

341,859

 

 

$

153,435

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

Depreciation and amortization

 

71,500

 

 

 

68,850

 

Deferred income taxes

 

(3,117

)

 

 

15

 

(Gain) loss on disposal of assets and costs from exit and disposal activities

 

201

 

 

 

(912

)

ESOP and stock-based compensation

 

13,733

 

 

 

38,437

 

Amortization of deferred financing charges

 

398

 

 

 

191

 

Fair market value adjustments to derivatives

 

2,183

 

 

 

(446

)

Equity in net income of unconsolidated affiliates

 

(3,066

)

 

 

(411

)

Other operating activities

 

(713

)

 

 

441

 

Changes in working capital:

 

 

 

Receivables

 

(43,680

)

 

 

(138,063

)

Inventories

 

15,799

 

 

 

(124,429

)

Prepaid expenses and other current assets

 

(7,776

)

 

 

(6,738

)

Accounts payable, accrued expenses, and other liabilities

 

49,703

 

 

 

104,508

 

Net cash provided by operating activities

 

437,024

 

 

 

94,878

 

Cash Flows from Investing Activities

 

 

 

Capital expenditures

 

(75,545

)

 

 

(63,764

)

Acquisition, net of cash acquired

 

(48,010

)

 

 

 

Other investing activities

 

46

 

 

 

1,556

 

Net cash used in investing activities

 

(123,509

)

 

 

(62,208

)

Cash Flows from Financing Activities

 

 

 

Payments on syndicated Term Loan Facility

 

(3,500

)

 

 

(3,500

)

Proceeds from Revolving Credit Agreement

 

26,200

 

 

 

146,800

 

Payments on Revolving Credit Agreement

 

(140,500

)

 

 

(24,200

)

Proceeds from Amended Revolving Credit Agreement

 

97,000

 

 

 

 

Payments on Amended Revolving Credit Agreement

 

(97,000

)

 

 

 

Proceeds from Senior Notes due 2030

 

500,000

 

 

 

 

Debt issuance costs

 

(11,575

)

 

 

 

Payments on Equipment Financing

 

(7,104

)

 

 

 

Payments on finance lease obligations

 

(3,153

)

 

 

(10,437

)

Repurchase of common stock

 

(192,602

)

 

 

(292,000

)

Cash dividends paid

 

(20,367

)

 

 

(18,758

)

Dividends paid to noncontrolling interest holder

 

(1,727

)

 

 

(1,471

)

Proceeds from exercise of stock options

 

4,660

 

 

 

3,179

 

Payment of withholding taxes on vesting of restricted stock units

 

(25,512

)

 

 

(12,976

)

Other financing activities

 

 

 

 

(230

)

Net cash provided by (used in) financing activities

 

124,820

 

 

 

(213,593

)

Effect of exchange rate changes on cash

 

(1,103

)

 

 

(81

)

Net change in cash

 

437,232

 

 

 

(181,004

)

Cash at beginning of period

 

20,125

 

 

 

195,009

 

Cash at end of period

$

457,357

 

 

$

14,005

 

Selected Financial Data

The following tables set forth net sales by reportable segment for each of the periods indicated.

 

Three Months Ended

 

September 30, 2022

 

September 30, 2021

(In thousands)

Net Sales

 

Intersegment
Net Sales

 

Net Sales
from External
Customers

 

Net Sales

 

Intersegment
Net Sales

 

Net Sales
from External
Customers

Pipe

$

500,978

 

 

$

(10,770

)

 

$

490,208

 

$

384,521

 

 

$

(2,668

)

 

$

381,853

Infiltrator

 

150,735

 

 

 

(22,450

)

 

 

128,285

 

 

145,911

 

 

 

(22,412

)

 

 

123,499

International

 

 

 

 

 

 

 

 

 

 

 

International - Pipe

 

56,461

 

 

 

(7,339

)

 

 

49,122

 

 

50,141

 

 

 

(5,170

)

 

 

44,971

International - Allied Products & Other

 

17,002

 

 

 

 

 

 

17,002

 

 

13,433

 

 

 

 

 

 

13,433

Total International

 

73,463

 

 

 

(7,339

)

 

 

66,124

 

 

63,574

 

 

 

(5,170

)

 

 

58,404

Allied Products & Other

 

202,200

 

 

 

(2,608

)

 

 

199,592

 

 

145,719

 

 

 

(3,004

)

 

 

142,715

Intersegment Eliminations

 

(43,167

)

 

 

43,167

 

 

 

 

 

(33,254

)

 

 

33,254

 

 

 

Total Consolidated

$

884,209

 

 

$

 

 

$

884,209

 

$

706,471

 

 

$

 

 

$

706,471

 

 

 

 

 

 

 

 

 

 

 

 

 

Six Months Ended

 

September 30, 2022

 

September 30, 2021

 

Net Sales

 

Intersegment
Net Sales

 

Net Sales
from External
Customers

 

Net Sales

 

Intersegment
Net Sales

 

Net Sales
from External
Customers

Pipe

$

1,025,835

 

 

$

(20,644

)

 

$

1,005,191

 

$

758,531

 

 

$

(4,571

)

 

$

753,960

Infiltrator

 

317,025

 

 

 

(51,356

)

 

 

265,669

 

 

272,653

 

 

 

(41,449

)

 

 

231,204

International

 

 

 

 

 

 

 

 

 

 

 

International - Pipe

 

109,880

 

 

 

(13,198

)

 

 

96,682

 

 

100,979

 

 

 

(8,084

)

 

 

92,895

International - Allied Products & Other

 

35,097

 

 

 

 

 

 

35,097

 

 

27,961

 

 

 

 

 

 

27,961

Total International

 

144,977

 

 

 

(13,198

)

 

 

131,779

 

 

128,940

 

 

 

(8,084

)

 

 

120,856

Allied Products & Other

 

401,109

 

 

 

(5,353

)

 

 

395,756

 

 

272,755

 

 

 

(3,004

)

 

 

269,751

Intersegment Eliminations

 

(90,551

)

 

 

90,551

 

 

 

 

 

(57,108

)

 

 

57,108

 

 

 

Total Consolidated

$

1,798,395

 

 

$

 

 

$

1,798,395

 

$

1,375,771

 

 

$

 

 

$

1,375,771

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 organic results, Adjusted EBITDA and Free Cash Flow, 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 and Free Cash Flow may be different from non-GAAP financial measures used by other companies, even when similar terms are used to identify such measures.

EBITDA and Adjusted EBITDA are non-GAAP financial measures that comprise 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.

The following tables present a reconciliation of EBITDA and Adjusted EBITDA to Net Income and Free Cash Flow to Cash Flow from Operating Activities, the most comparable GAAP measures, for each of the periods indicated.

Reconciliation of Adjusted EBITDA to Net Income

 

Three Months Ended
September 30,

 

Six Months Ended
September 30,

(Amounts in thousands)

2022

 

2021

 

2022

 

2021

Net income

$

153,377

 

 

$

76,312

 

 

$

341,859

 

$

153,435

 

Depreciation and amortization

 

35,922

 

 

 

34,194

 

 

 

71,500

 

 

68,850

 

Interest expense

 

18,261

 

 

 

8,437

 

 

 

29,333

 

 

16,344

 

Income tax expense

 

47,508

 

 

 

26,816

 

 

 

102,573

 

 

53,271

 

EBITDA

 

255,068

 

 

 

145,759

 

 

 

545,265

 

 

291,900

 

(Gain) loss on disposal of assets and costs from exit and disposal activities

 

(102

)

 

 

(901

)

 

 

201

 

 

(912

)

Stock-based compensation expense

 

7,460

 

 

 

5,618

 

 

 

13,733

 

 

12,269

 

ESOP compensation expense

 

 

 

 

12,013

 

 

 

 

 

26,168

 

Transaction costs

 

368

 

 

 

834

 

 

 

2,083

 

 

877

 

Other adjustments(a)

 

408

 

 

 

1,481

 

 

 

963

 

 

1,084

 

Adjusted EBITDA

$

263,202

 

 

$

164,804

 

 

$

562,245

 

$

331,386

 

(a)

Includes derivative fair value adjustments, foreign currency transaction (gains) losses, interest income, the proportionate share of interest, income taxes, depreciation and amortization related to the South American Joint Venture, which is accounted for under the equity method of accounting and executive retirement expense.

Reconciliation of Free Cash Flow to Cash flow from Operating Activities

 

Six Months Ended
September 30,

(Amounts in thousands)

2022

 

2021

Net cash flow from operating activities

$

437,024

 

 

$

94,878

 

Capital expenditures

 

(75,545

)

 

 

(63,764

)

Free cash flow

$

361,479

 

 

$

31,114

 

 

Michael Higgins
VP, Corporate Strategy & Investor Relations
(614) 658-0050
Michael.Higgins@adspipe.com

Source: Advanced Drainage Systems, Inc.

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