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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
 
FORM 8-K
 
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 8, 2024
 
ADVANCED DRAINAGE SYSTEMS, INC.
(Exact name of Registrant as Specified in Its Charter)
 
Delaware001-3655751-0105665
(State or Other Jurisdiction
of Incorporation)
(Commission File Number)
(IRS Employer
Identification No.)
   
4640 Trueman Boulevard, 43026
Hilliard,Ohio
(Address of Principal Executive Offices) (Zip Code)
Registrant’s Telephone Number, Including Area Code: (614) 658-0050
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instructions A.2. below):
 
☐Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
 
Title of each class 
Trading
Symbol(s)
 Name of each exchange on which registered
Common Stock, $0.01 par value per share WMS New York Stock Exchange
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐


Item 2.02    Results of Operations and Financial Condition 
On November 8, 2024, Advanced Drainage Systems, Inc. (the "Company") issued a press release setting forth the Company’s unaudited results for the fiscal second quarter ended September 30, 2024. A copy of the Company’s press release with the results is being furnished as Exhibit 99.1 and hereby incorporated by reference.
The information furnished pursuant to this Item 2.02, including Exhibit 99.1, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the "Exchange Act") or otherwise subject to the liabilities under Section 18 of the Exchange Act and shall not be deemed to be incorporated by reference into any filing of the Company under the Securities Act of 1933 or the Exchange Act.
Item 7.01    Regulation FD Disclosure 
As previously announced, at 10:00 a.m. (Eastern time) on November 8, 2024, the Company’s President and Chief Executive Officer, Scott Barbour, and Chief Financial Officer, Scott Cottrill, will host a conference call and webcast to discuss the Company’s unaudited results for the second quarter ended September 30, 2024. A copy of the Company’s slides forming the basis of the presentation is being furnished as Exhibit 99.2 and hereby incorporated by reference.  
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.
Item 8.01    Other Events
On November 8, 2024, the Company issued a press release announcing the approval by the Board of Directors (the "Board") of the Company of the declaration of a cash dividend of $0.16 per share, payable on December 16, 2024, to stockholders of record at the close of business on December 2, 2024. A copy of the Company’s press release is attached hereto as Exhibit 99.3 and hereby incorporated by reference.
Item 9.01    Financial Statements and Exhibits.
(d)Exhibits
The following exhibits are being furnished as part of this report:
 
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
ADVANCED DRAINAGE SYSTEMS, INC.
Date: November 8, 2024By:/s/ Scott A. Cottrill
Name:Scott A. Cottrill
Title:EVP, CFO & Secretary
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Exhibit 99.1
adslogo.jpg 
ADVANCED DRAINAGE SYSTEMS ANNOUNCES SECOND QUARTER
FISCAL 2025 RESULTS
HILLIARD, Ohio – (November 8, 2024) – 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, 2024.
Second Quarter Fiscal 2025 Results
•Net sales of $782.6 million, flat to prior year
•Net income decreased 4.3% to $131.2 million
•Net income per diluted share decreased 2.3% to $1.67
•Adjusted EBITDA (Non-GAAP) of $245.6 million, flat to prior year
•Adjusted Earnings per share (Non-GAAP) of $1.70, flat to prior year
Year-to-Date Fiscal 2025 Results
•Net sales increased 2.5% to $1.6 billion
•Net income decreased 5.6% to $293.5 million
•Net income per diluted share decreased 4.1% to $3.73
•Adjusted EBITDA (Non-GAAP) decreased 1.2% to $521.0 million
•Adjusted Earnings per share (Non-GAAP) decreased 0.5% to $3.76

Scott Barbour, President and Chief Executive Officer of ADS commented, "The second quarter results reflect strong demand at Infiltrator as well as the ADS residential and infrastructure end markets. Continued choppiness in the non-residential end market impacted revenue from both pipe and allied products which, combined with significant storm events, resulted in revenue flat to the prior year. Importantly, we were able to manage through demand fluctuations and unfavorable price/cost to maintain a robust Adjusted EBITDA margin of 31.4%, underscoring the resiliency of the ADS business model."

"Despite the near-term headwinds, demand for localized water management solutions remains strong. During the 2024 hurricane season, the United States experienced multiple significant storm events, including five hurricanes that affected several states in the Southern crescent, such as Florida, North Carolina, South Carolina and Texas. Although the disruption in business activity had a negative short-term impact in these states, these events highlight the longer-term need to address the insufficient water infrastructure investments in the United States. The Environmental Protection Agency estimates $630 billion is needed over the next 20 years to achieve the goals of the Clean Water Act, highlighting the continued opportunity for ADS and Infiltrator to support the development of more resilient water infrastructure."

"Thoughtful capital allocation continues to be a key focus for the management team and the Board, given the strong cash generation of the business. We remain focused on organic capital investments, up 36% in the first half of Fiscal 2025, as well as strategic M&A. In turn, we announced the acquisition of Orenco Systems, Inc in August. This acquisition closed in the fiscal third quarter and will accelerate the Company’s growth in the highly attractive advanced wastewater treatment space, opening new opportunities in a highly fragmented and fast-growing segment of onsite septic wastewater. We will continue to focus on both organic and inorganic capital deployment, returning excess capital to shareholders through dividends and share repurchases."

"Overall, we remain confident that we are well positioned in attractive end markets with secular tailwinds from the increasing need to manage and protect water, the world's most precious resource, safeguarding our environment and communities. As we move into the second half of the year, we updated our Fiscal 2025 guidance to reflect performance year-to-date, the impact from weather, as well as recent and forward-looking trends in our underlying core markets."

Second Quarter Fiscal 2025 Results
Net sales increased $2.4 million, or 0.3%, to $782.6 million, as compared to $780.2 million in the prior year quarter. Domestic pipe sales decreased $5.2 million, or 1.3%, to $410.5 million. Domestic allied products & other sales increased $4.9 million, or 2.7%, to $187.1 million. Infiltrator sales increased $12.3 million, or 10.6%, to $128.5 million. The overall increase in domestic net sales was primarily driven by demand in the residential and infrastructure end markets. International sales decreased $9.6 million, or 14.5%, to $56.6 million.
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Gross profit decreased $8.7 million, or 2.9%, to $293.9 million as compared to $302.7 million in the prior year. The decrease in gross profit is primarily driven by unfavorable pricing and material cost, partially offset by favorable manufacturing costs.

Selling, general and administrative expenses increased $2.4 million, or 2.6% to $94.1 million, as compared to $91.7 million. As a percentage of sales, selling, general and administrative expense was largely flat at 12.0% as compared to 11.8% in the prior year.

Net income per diluted share decreased $0.04, or 2.3%, to $1.67, as compared to $1.71 per share in the prior year quarter, primarily due to the factors mentioned above.
Adjusted EBITDA (Non-GAAP) decreased $0.7 million, or 0.3%, to $245.6 million, as compared to $246.3 million in the prior year, primarily due to the factors mentioned above. As a percentage of net sales, Adjusted EBITDA was 31.4% as compared to 31.6% in the prior year.
Segment sales results are based on Net sales to external customers. Reconciliations of GAAP to Non-GAAP financial measures for Adjusted EBITDA, Free Cash Flow and Adjusted Earnings per Share 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 2025 Results
Net sales increased $39.7 million, or 2.5%, to $1,597.9 million, as compared to $1,558.3 million in the prior year. Domestic pipe sales increased $5.4 million, or 0.6%, to $841.9 million. Domestic allied products & other sales increased $18.8 million, or 5.2%, to $383.1 million. Infiltrator sales increased $19.6 million, or 8.2%, to $258.7 million. The overall increase in domestic net sales was primarily driven by demand in the residential and infrastructure end markets. International sales decreased $4.1 million, or 3.5%, to $114.3 million.
Gross profit decreased $7.7 million, or 1.2%, to $626.4 million as compared to $634.1 million in the prior year. The decrease in gross profit is primarily driven by unfavorable pricing and material cost, partially offset by favorable manufacturing costs.

Selling, general and administrative expenses increased $9.9 million, or 5.6% to $188.2 million, as compared to $178.2 million. As a percentage of sales, selling, general and administrative expense was largely flat at 11.8% as compared to 11.4% in the prior year.
Net income per diluted share decreased $0.16, or 4.1%, to $3.73, as compared to $3.89 per share in the prior year. Results for fiscal 2024 include a $14.9 million gain on the sale of assets, which after considering the income tax impact of this gain impacted net income per diluted share by $0.14.
Adjusted EBITDA (Non-GAAP) decreased $6.5 million, or 1.2%, to $521.0 million, as compared to $527.6 million in the prior year, primarily due to the factors mentioned above. As a percentage of net sales, Adjusted EBITDA was 32.6% as compared to 33.9% in the prior year.
Balance Sheet and Liquidity
Net cash provided by operating activities was $350.3 million, as compared to $458.9 million in the prior year. Free cash flow (Non-GAAP) was $238.1 million, as compared to $376.2 million in the prior year. Net debt (total debt and finance lease obligations net of cash) was $769.7 million as of September 30, 2024, a decrease of $91.2 million from March 31, 2024.
ADS had total liquidity of $1,202.6 million, comprised of cash of $613.0 million as of September 30, 2024 and $589.6 million of availability under committed credit facilities. As of September 30, 2024, the Company’s trailing-twelve-month leverage ratio was 0.8 times Adjusted EBITDA.
In the six months ended September 30, 2024, the Company repurchased 0.4 million shares of its common stock for a total cost of $69.9 million. As of September 30, 2024, approximately $147.7 million of common stock may be repurchased under the Company's existing share repurchase authorization.
Fiscal 2025 Outlook
Based on current visibility, backlog of existing orders and business trends, the Company updated its financial targets for fiscal 2025. Net sales are now expected to be in the range of $2.900 billion to $2.975 billion. Adjusted EBITDA is expected to be in the range of $880 million to $920 million. Capital expenditures are expected to be approximately $250 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.

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Teleconference: To participate in the live teleconference, participants may register at https://registrations.events/direct/Q4I4578677. 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 and its subsidiary, Infiltrator Water Technologies, provide superior stormwater drainage and onsite septic wastewater products used in a wide variety of markets and applications including commercial, residential, infrastructure and agriculture, while delivering unparalleled customer service. ADS manages the industry’s largest company-owned fleet, an expansive sales team, and a vast manufacturing network of approximately 70 manufacturing plants and 40 distribution centers. The company is one of the largest plastic recycling companies 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; 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 acquisitions; 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; our ability to protect against cybersecurity incidents and disruptions or failures of our IT systems; our ability to assess and monitor the effects of artificial intelligence, machine learning, and robotics on our business and operations; 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; our ability to appropriately address any environmental, social or governance concerns that may arise from our activities; 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.
For more information, please contact:
Michael Higgins
VP, Corporate Strategy & Investor Relations
(614) 658-0050
Michael.Higgins@adspipe.com
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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)2024202320242023
Net sales$782,610 $780,220 $1,597,946 $1,558,266 
Cost of goods sold488,669 477,543 971,551 924,129 
Gross profit293,941 302,677 626,395 634,137 
Operating expenses:
Selling, general and administrative94,132 91,725 188,184 178,236 
Loss (gain) on disposal of assets and costs from exit and disposal activities
617 123 909 (13,181)
Intangible amortization11,816 12,792 23,711 25,594 
Income from operations187,376 198,037 413,591 443,488 
Other expense:
Interest expense23,156 21,941 45,980 43,653 
Interest income and other, net(6,956)(7,506)(14,072)(11,055)
Income before income taxes171,176 183,602 381,683 410,890 
Income tax expense40,920 47,476 90,806 102,534 
Equity in net income of unconsolidated affiliates(918)(901)(2,619)(2,576)
Net income131,174 137,027 293,496 310,932 
Less: net income attributable to noncontrolling interest792 1,225 1,712 1,478 
Net income attributable to ADS$130,382 $135,802 $291,784 $309,454 
   
Weighted average common shares outstanding:  
Basic77,542 78,606 77,541 78,756 
Diluted78,110 79,307 78,194 79,475 
Net income per share:  
Basic$1.68 $1.73 $3.76 $3.93 
Diluted$1.67 $1.71 $3.73 $3.89 
Cash dividends declared per share$0.16 $0.14 $0.32 $0.28 
 
 

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ADVANCED DRAINAGE SYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(unaudited)

 As of
(Amounts in thousands)September 30, 2024March 31, 2024
ASSETS  
Current assets:  
Cash$613,020 $490,163 
Receivables, net357,636 323,576 
Inventories487,232 464,200 
Other current assets34,032 22,028 
Total current assets1,491,920 1,299,967 
Property, plant and equipment, net955,434 876,351 
Other assets:
Goodwill617,147 617,183 
Intangible assets, net328,924 352,652 
Other assets142,325 122,760 
Total assets$3,535,750 $3,268,913 
LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS’ EQUITY  
Current liabilities:  
Current maturities of debt obligations$11,130 $11,870 
Current maturities of finance lease obligations26,233 18,015 
Accounts payable273,293 254,401 
Other accrued liabilities152,091 154,260 
Accrued income taxes4,590 1,076 
Total current liabilities467,337 439,622 
Long-term debt obligations, net1,255,118 1,259,522 
Long-term finance lease obligations90,272 61,661 
Deferred tax liabilities154,574 156,705 
Other liabilities76,183 70,704 
Total liabilities2,043,484 1,988,214 
Mezzanine equity:  
Redeemable common stock98,231 108,584 
Total mezzanine equity98,231 108,584 
Stockholders’ equity:
Common stock11,690 11,679 
Paid-in capital1,255,794 1,219,834 
Common stock in treasury, at cost(1,219,438)(1,140,578)
Accumulated other comprehensive loss(30,689)(29,830)
Retained earnings1,359,100 1,092,208 
Total ADS stockholders’ equity1,376,457 1,153,313 
Noncontrolling interest in subsidiaries17,578 18,802 
Total stockholders’ equity1,394,035 1,172,115 
Total liabilities, mezzanine equity and stockholders’ equity$3,535,750 $3,268,913 
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ADVANCED DRAINAGE SYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
 Six Months Ended September 30,
(Amounts in thousands)20242023
Cash Flow from Operating Activities  
Net income$293,496 $310,932 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization85,905 73,961 
Deferred income taxes(2,270)519 
Loss (gain) on disposal of assets and costs from exit and disposal activities909 (13,181)
Stock-based compensation13,960 16,234 
Amortization of deferred financing charges1,022 1,022 
Fair market value adjustments to derivatives1,024 (1,889)
Equity in net income of unconsolidated affiliates(2,619)(2,576)
Other operating activities(6,124)756 
Changes in working capital:
Receivables(35,565)(43,530)
Inventories(24,750)79,215 
Prepaid expenses and other current assets(4,804)(2,228)
Accounts payable, accrued expenses, and other liabilities30,142 39,629 
Net cash provided by operating activities350,326 458,864 
Cash Flows from Investing Activities  
Capital expenditures(112,182)(82,625)
Proceeds from disposition of assets— 19,979 
Other investing activities640 446 
Net cash used in investing activities(111,542)(62,200)
Cash Flows from Financing Activities  
Payments on syndicated Term Loan Facility(3,500)(3,500)
Payments on Equipment Financing(2,665)(4,458)
Payments on finance lease obligations(11,756)(5,452)
Repurchase of common stock(69,922)(101,564)
Cash dividends paid(24,917)(22,224)
Proceeds from exercise of stock options8,694 2,623 
Payment of withholding taxes on vesting of restricted stock units(10,576)(8,811)
Other financing activities2 — 
Net cash used in financing activities(114,640)(143,386)
Effect of exchange rate changes on cash(1,142)3 
Net change in cash123,002 253,281 
Cash and restricted cash at beginning of period495,848 217,128 
Cash and restricted cash at end of period$618,850 $470,409 
RECONCILIATION TO BALANCE SHEET
Cash$613,020 
Restricted cash5,830
Total cash and restricted cash$618,850 
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Selected Financial Data
The following tables set forth net sales by reportable segment for each of the periods indicated.

 Three Months Ended
 September 30, 2024September 30, 2023
(In thousands)Net Sales Intersegment Net Sales Net Sales from External CustomersNet Sales Intersegment Net Sales Net Sales from External Customers
Pipe$425,099 $(14,611)$410,488 $427,997 $(12,284)$415,713 
Infiltrator148,690 (20,198)128,492 133,731 (17,553)116,178 
International
International - Pipe44,445 (3,437)41,008 52,407 (3,284)49,123 
International - Allied Products & Other15,613 (68)15,545 17,025 (14)17,011 
Total International60,058 (3,505)56,553 69,432 (3,298)66,134 
Allied Products & Other191,114 (4,037)187,077 185,696 (3,501)182,195 
Intersegment Eliminations(42,351)42,351 — (36,636)36,636 — 
Total Consolidated$782,610 $— $782,610 $780,220 $— $780,220 
Six Months Ended
September 30, 2024September 30, 2023
(In thousands)Net SalesIntersegment Net SalesNet Sales from External CustomersNet SalesIntersegment Net SalesNet Sales from External Customers
Pipe$871,278 $(29,365)$841,913 $856,569 $(20,043)$836,526 
Infiltrator303,720 (45,010)258,710 275,217 (36,131)239,086 
International
International - Pipe88,372 (7,290)81,082 89,585 (3,799)85,786 
International - Allied Products & Other33,292 (116)33,176 32,623 (26)32,597 
Total International121,664 (7,406)114,258 122,208 (3,825)118,383 
Allied Products & Other391,687 (8,622)383,065 369,141 (4,870)364,271 
Intersegment Eliminations(90,403)90,403 — (64,869)64,869 — 
Total Consolidated$1,597,946 $— $1,597,946 $1,558,266 $— $1,558,266 
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 Share, 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 a reconciliation of Adjusted EBITDA to net income.
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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 a reconciliation of cash flow from operating activities to Free Cash Flow.
Adjusted Earnings per Share excludes (gains) losses on disposals of assets or business, restructuring expenses, impairment charges and transaction costs. Adjusted Earnings per Share is a measure used by management and may be useful for investors to evaluate the Company's operational performance.
The following tables present a reconciliation of EBITDA and Adjusted EBITDA to Net Income, Free Cash Flow to Cash Flow from Operating Activities, and Adjusted Earnings per Share to Diluted Earnings per Share, the most comparable GAAP measures, for each of the periods indicated.
Reconciliation of Adjusted Gross Profit to Gross Profit
 Three Months Ended
September 30,		Six Months Ended
September 30,
(Amounts in thousands)2024202320242023
Segment Adjusted Gross Profit
Pipe$115,422 $125,856 $257,659 $286,505 
Infiltrator86,135 73,663 172,550 147,927 
International17,445 21,339 37,108 37,368 
Allied Products & Other107,324 106,239 221,191 212,424 
Intersegment Elimination(394)(454)(1,569)(2,509)
Total Segment Adjusted Gross Profit325,932 326,643 686,939 681,715 
Depreciation and amortization30,536 22,622 57,748 45,421 
Stock-based compensation expense1,455 1,344 2,796 2,157 
Total Gross Profit$293,941 $302,677 $626,395 $634,137 
Reconciliation of Adjusted EBITDA to Net Income
 Three Months Ended
September 30,		Six Months Ended
September 30,
(Amounts in thousands)2024202320242023
Net income$131,174 $137,027 $293,496 $310,932 
Depreciation and amortization44,807 36,721 85,905 73,961 
Interest expense23,156 21,941 45,980 43,653 
Income tax expense40,920 47,476 90,806 102,534 
EBITDA240,057 243,165 516,187 531,080 
Loss (gain) on disposal of assets and costs from exit and disposal activities
617 123 909 (13,181)
Stock-based compensation expense6,983 9,331 13,960 16,234 
Transaction costs2,685 52 2,695 2,024 
Interest income(7,368)(5,137)(13,933)(8,626)
Other adjustments(a)
2,576 (1,284)1,230 32 
Adjusted EBITDA$245,550 $246,250 $521,048 $527,563 
(a)Includes derivative fair value adjustments, foreign currency transaction (gains) losses, legal settlements, 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.
8

Reconciliation of Free Cash Flow to Cash flow from Operating Activities
 Six Months Ended
September 30,
(Amounts in thousands)20242023
Net cash flow from operating activities$350,326 $458,864 
Capital expenditures(112,182)(82,625)
Free cash flow$238,144 $376,239 
Reconciliation of Diluted Earnings per Share to Adjusted Earnings per Share

The following table presents diluted earnings per share on an adjusted basis to supplement the Company's discussion of its results of operations herein.

 Three Months Ended
September 30,		Six Months Ended
September 30,
2024202320242023
Diluted Earnings Per Share$1.67 $1.71 $3.73 $3.89 
Loss (gain) on disposal of assets and costs from exit and disposal activities
0.01 — 0.01 (0.17)
Transaction costs0.03 — 0.03 0.03 
Income tax impact of adjustments (a)
(0.01)— (0.01)0.03 
Adjusted Earnings per Share$1.70 $1.71 $3.76 $3.78 

(a) The income tax impact of adjustments to each period is based on the statutory tax rate.
9

 
2

 
3

 
4 • • • • • • • • • •

 
5 Estimated $630 billion needed over

 
6 • • • • •

 
7

 
8

 
9

 
10

 

 
12

 
13

 
Reconciliations 14 (In thousands) Net Sales Intersegment Net Sales Net Sales from External Customers Net Sales Intersegment Net Sales Net Sales from External Customers Pipe $ 425,099 $ (14,611) $ 410,488 $ 427,997 $ (12,284) $ 415,713 Infiltrator Water Technologies 148,690 (20,198) 128,492 133,731 (17,553) 116,178 International International - Pipe 44,445 (3,437) 41,008 52,407 (3,284) 49,123 International - Allied Products & Other 15,613 (68) 15,545 17,025 (14) 17,011 Total International 60,058 (3,505) 56,553 69,432 (3,298) 66,134 Allied Products & Other 191,114 (4,037) 187,077 185,696 (3,501) 182,195 Intersegment Eliminations (42,351) 42,351 - (36,636) 36,636 - Total Consolidated $ 782,610 $ - $ 782,610 $ 780,220 $ - $ 780,220 (In thousands) Net Sales Intersegment Net Sales Net Sales from External Customers Net Sales Intersegment Net Sales Net Sales from External Customers Pipe $ 871,278 $ (29,365) $ 841,913 $ 856,569 $ (20,043) $ 836,526 Infiltrator Water Technologies 303,720 (45,010) 258,710 275,217 (36,131) 239,086 International International - Pipe 88,372 (7,290) 81,082 89,585 (3,799) 85,786 International - Allied Products & Other 33,292 (116) 33,176 32,623 (26) 32,597 Total International 121,664 (7,406) 114,258 122,208 (3,825) 118,383 Allied Products & Other 391,687 (8,622) 383,065 369,141 (4,870) 364,271 Intersegment Eliminations (90,403) 90,403 - (64,869) 64,869 - Total Consolidated $ 1,597,946 $ - $ 1,597,946 $ 1,558,266 $ - $ 1,558,266 Three Months Ended September 30, 2024 September 30, 2023 Six Months Ended September 30, 2024 September 30, 2023

 
Reconciliations 15 Notes: a) Represents expenses recorded related to legal, accounting and other professional fees incurred in connection with business or asset acquisitions and dispositions. b) Includes derivative fair value adjustments, foreign currency transaction (gains) losses, 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 (benefit). (Amounts in thousands) 2024 2023 2024 2023 Segment adjusted gross profit Pipe $ 115,422 $ 125,856 $ 257,659 $ 286,505 Infiltrator 86,135 73,663 172,550 147,927 International 17,445 21,339 37,108 37,368 Allied Products & Other 107,324 106,239 221,191 212,424 Intersegment Eliminations (394) (454) (1,569) (2,509) Total Segment Adjusted Gross Profit 325,932 326,643 686,939 681,715 Depreciation and amortization 30,536 22,622 57,748 45,421 Stock-based compensation expense 1,455 1,344 2,796 2,157 Total Gross Profit $ 293,941 $ 302,677 $ 626,395 $ 634,137 (Amounts in thousands) 2024 2023 2024 2023 Net income $ 131,174 $ 137,027 $ 293,496 $ 310,932 Depreciation and amortization 44,807 36,721 85,905 73,961 Interest expense 23,156 21,941 45,980 43,653 Income tax expense 40,920 47,476 90,806 102,534 EBITDA 240,057 243,165 516,187 531,080 Loss (gain) on disposal of assets and costs from exit and disposal activities 617 123 909 (13,181) Stock-based compensation expense 6,983 9,331 13,960 16,234 Transaction costs (a) 2,685 52 2,695 2,024 Interest income (7,368) (5,137) (13,933) (8,626) Other adjustments (b) 2,576 (1,284) 1,230 32 Adjusted EBITDA $ 245,550 $ 246,250 $ 521,048 $ 527,563 Three Months Ended September 30, Six Months Ended September 30, Three Months Ended September 30, Six Months Ended September 30,

 
Exhibit 99.3
adslogo.jpg
ADVANCED DRAINAGE SYSTEMS ANNOUNCES QUARTERLY CASH DIVIDEND

HILLIARD, Ohio – (November 8, 2024) – 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 that its Board of Directors (the “Board”) has approved a quarterly cash dividend to its shareholders in the amount of $0.16 per share, a 14% increase over the prior year dividend amount.

Scott Barbour, President and Chief Executive Officer of Advanced Drainage Systems commented, “Today’s dividend announcement is predicated on the strength of our balance sheet, formidable cash generation, and ongoing commitment to returning capital to shareholders. Our strong financial performance and operational excellence initiatives provide us with the confidence and financial flexibility to return excess cash to our shareholders while simultaneously continuing to strategically invest in our business.”

The quarterly cash dividend of $0.16 per share will be paid on December 16, 2024, to shareholders of record at the close of business on December 2, 2024.

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 and its subsidiary, Infiltrator Water Technologies, provide superior stormwater drainage and onsite septic wastewater products used in a wide variety of markets and applications including commercial, residential, infrastructure and agriculture, while delivering unparalleled customer service. ADS manages the industry’s largest company-owned fleet, an expansive sales team, and a vast manufacturing network of approximately 70 manufacturing plants and 40 distribution centers. The company is one of the largest plastic recycling companies 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 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; 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 acquisitions; 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; our ability to protect against cybersecurity incidents and disruptions or failures of our IT systems; our ability to assess and monitor the effects of artificial intelligence, machine learning, and robotics on our business and operations; 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; our ability to appropriately address any environmental, social or governance concerns that may arise from our activities; 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.

For more information, please contact:
Michael Higgins
VP, Corporate Strategy & Investor Relations
(614) 658-0050
Michael.Higgins@adspipe.com

v3.24.3
Cover
Nov. 08, 2024
Cover [Abstract]  
Document Type 8-K
Document Period End Date Nov. 08, 2024
Entity Registrant Name ADVANCED DRAINAGE SYSTEMS, INC.
Entity Incorporation, State or Country Code DE
Entity File Number 001-36557
Entity Tax Identification Number 51-0105665
Entity Address, Address Line One 4640 Trueman Boulevard,
Entity Address, City or Town Hilliard,
Entity Address, State or Province OH
Entity Address, Postal Zip Code 43026
City Area Code 614
Local Phone Number 658-0050
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Title of 12(b) Security Common Stock, $0.01 par value per share
Trading Symbol WMS
Security Exchange Name NYSE
Entity Emerging Growth Company false
Entity Central Index Key 0001604028
Amendment Flag false
Advanced Drainage Systems (NYSE:WMS)
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