Advanced Drainage Systems, Inc. (NYSE: WMS) (“ADS” or the
“Company”), a leading provider of innovative water management
solutions in the stormwater and on-site septic waste water
industries today announced financial results for the fiscal third
quarter ended December 31, 2021.
Third Quarter Fiscal 2022
Results
- Net sales increased 47.1% to $715.4 million
- Net income increased 37.8% to $74.5 million
- Adjusted EBITDA (Non-GAAP) increased 26.9% to $176.2
million
Year-to-Date Fiscal 2022
Results
- Net sales increased 35.9% to $2,091.1 million
- Net income increased 11.0% to $227.9 million
- Adjusted EBITDA (Non-GAAP) increased 7.4% to $507.5
million
- Cash provided by operating activities of $193.8
million
- Free cash flow (Non-GAAP) of $93.5 million
Scott Barbour, President and Chief Executive Officer of ADS
commented, "We achieved another quarter of record revenue and
Adjusted EBITDA results in the third quarter of fiscal 2022, with
results coming in slightly ahead of plan. Sales growth of 47% was
driven by favorable pricing at both ADS and Infiltrator, as well as
double-digit volume growth in the domestic construction markets. We
capitalized on strong demand across our product portfolio and
geographic footprint, particularly in priority states such as
Florida, Texas and Virginia. Leading indicators support continued
strength in demand for the foreseeable future as we work through
record-high levels of backlog."
Barbour continued, "The favorable top line growth we achieved in
the third quarter offset inflationary cost pressure on materials,
transportation and labor. However, the pressure from labor
shortages and absenteeism related to the COVID variant continued to
impact our manufacturing and transportation operations. The actions
we previously took to simplify production processes and increase
production rates are going well, improving service levels to
customers overall."
"In the fourth quarter, we will ramp up new production equipment
at both ADS and Infiltrator. The new equipment coming online will
modestly benefit fourth quarter production, with a larger impact in
the next fiscal year. These investments will allow us to bring down
high backlog levels and service the strong demand we see in our end
markets, particularly in key growth regions like the southeast
United States."
Barbour concluded, "Finally, our demand environment, strong
backlog, favorable pricing and progress on the continuous
improvement initiatives give us confidence in today's increased
sales targets and reaffirmed Adjusted EBITDA guidance. We will stay
focused on executing the fiscal year 2022 plan and continue to work
through the labor availability and supply chain issues we face in
the market today."
Third Quarter Fiscal 2022
Results
Net sales increased $229.2 million, or 47.1%, to $715.4 million,
as compared to $486.1 million in the prior year quarter. Domestic
pipe sales increased $145.8 million, or 57.4%, to $400.0 million.
Domestic allied products & other sales increased $37.9 million,
or 34.5%, to $147.5 million. Infiltrator sales increased $50.3
million, or 51.1%, to $148.7 million. These increases were driven
by double-digit sales growth in the U.S. construction end markets.
International sales increased $10.5 million, or 23.1%, to $55.8
million, driven by strong sales growth in the Canadian, Mexican and
Exports businesses.
Gross profit increased $40.5 million, or 24.0%, to $209.0
million as compared to $168.5 million in the prior year. The
increase in gross profit is primarily due to the increase in sales
volume and favorable pricing on pipe, on-site septic and allied
products. These increases were partially offset by inflationary
cost pressure on materials, transportation and labor, as well as an
increase in the use of third-party logistics services. Labor
shortages and absenteeism related to COVID-19 remain a challenge in
both manufacturing and transportation operations.
Adjusted EBITDA (Non-GAAP) increased $37.3 million, or 26.9%, to
$176.2 million, as compared to $138.9 million in the prior year.
The increase is primarily due to the factors mentioned above. As a
percentage of net sales, Adjusted EBITDA was 24.6% as compared to
28.6% 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.”
Employee Stock Ownership Plan
(ESOP)
On February 2, 2022, the ADS Board of Directors passed a
resolution authorizing a $0.3 million Company cash contribution to
the ESOP for the ESOP to repay the remaining balance of its ESOP
loan on March 31, 2022, one year ahead of the ESOP loan’s March 31,
2023 maturity date. Effective March 31, 2022, the remaining balance
on the Company's ESOP loan will be repaid in full, and the
remaining shares of unallocated preferred stock will be allocated
to participants of the ESOP. Within thirty days following this ESOP
loan repayment, the 16.1 million shares of preferred stock
outstanding as of January 27, 2022 will convert to 12.4 million
shares of common stock, resulting in additional stock-based
compensation expense of $30 million to $35 million. Starting in the
fiscal year ending March 31, 2023, ADS will make matching 401(k)
contributions for eligible employees, resulting in estimated
incremental compensation expense of approximately $8 million to $10
million annually.
For additional information on the Company's ESOP, please refer
to the Company's Annual Report on Form 10-K for the fiscal year
ended March 31, 2021, and other reports filed by the Company with
the SEC. Additional information related to this transaction will be
included in a Current Report on Form 8-K, which the Company intends
to file with the SEC after market-close today.
Year-to-Date Fiscal 2022
Results
Net sales increased $552.2 million, or 35.9%, to $2,091.1
million, as compared to $1,539.0 million in the prior year.
Domestic pipe sales increased $338.6 million, or 41.3%, to $1,158.6
million. Domestic allied products & other sales increased $75.7
million, or 22.0%, to $420.2 million. Infiltrator sales increased
$114.8 million, or 37.4%, to $421.3 million. These increases were
driven by double-digit sales growth in both the U.S. construction
and agriculture end markets. International sales increased $54.3
million, or 41.6%, to $184.8 million, driven by double-digit sales
growth in the Canadian, Mexican and Exports businesses.
Gross profit increased $47.3 million, or 8.4%, to $610.2 million
as compared to $562.9 million in the prior year. The increase is
primarily due an increase in sales volume and favorable pricing on
pipe, on-site septic and allied products. These increases were
partially offset by inflationary cost pressure on materials,
transportation and labor, as well as an increase in the use of
third-party logistics services. Labor shortages and absenteeism
related to COVID-19 remain a challenge in both manufacturing and
transportation operations.
Adjusted EBITDA (Non-GAAP) increased $35.1 million, or 7.4%, to
$507.5 million, as compared to $472.4 million in the prior year.
The increase is primarily due to the factors mentioned above. As a
percentage of net sales, Adjusted EBITDA was 24.3% as compared to
30.7% in the prior year.
Balance Sheet and
Liquidity
Net cash provided by operating activities was $193.8 million, as
compared to $448.8 million in the prior year. Free cash flow
(Non-GAAP) was $93.5 million, as compared to $391.1 million in the
prior year. Net debt (total debt and finance lease obligations net
of cash) was $948.9 million as of December 31, 2021, an increase of
$302.4 million from March 31, 2021.
ADS had total liquidity of $226 million, comprised of cash of
$22 million as of December 31, 2021 and $204 million of
availability under committed credit facilities. As of December 31,
2021, the Company’s leverage ratio was 1.6 times.
In the nine months ended December 31, 2021, the Company
repurchased 2.6 million shares of its common stock for a total cost
of $292.0 million. As of December 31, 2021, the Company had
utilized all of the common stock repurchase authorization. In a
separate press release issued today, the Company announced a new $1
billion share repurchase authorization for open market share
repurchases.
Fiscal 2022 Outlook
Based on current visibility, backlog of existing orders and
business trends, the Company raised its net sales targets for
fiscal 2022. Net sales are now expected to be in the range of
$2.675 billion to $2.725 billion. Adjusted EBITDA is unchanged and
expected to be in the range of $635 to $665 million. Capital
expenditures are expected to be in the range of $130 million to
$150 million.
Webcast Information
The live webcast will be accessible via the "Events Calendar”
section of the Company’s Investor Relations website,
www.investors.ads-pipe.com. Participants may also register for this
conference call by copy and pasting the following text into your
browser: http://www.directeventreg.com/registration/event/9136768.
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. An archived version
of the webcast will be available following the call.
About the Company
Advanced Drainage Systems is a leading provider of innovative
water management solutions in the stormwater and on-site septic
wastewater industries, providing superior drainage solutions for
use in the construction and agriculture marketplace. For over 50
years, the Company has been manufacturing a variety of innovative
and environmentally friendly alternatives to traditional materials.
Its innovative products are used across a broad range of end
markets and applications, including non-residential, residential,
infrastructure and agriculture applications. The Company has
established a leading position in many of these end markets by
leveraging its national sales and distribution platform, overall
product breadth and scale and manufacturing excellence. Founded in
1966, the Company operates a global network of approximately 60
manufacturing plants and 30 distribution centers. To learn more
about ADS, please visit the Company’s website at
www.adspipe.com.
Forward-Looking
Statements
Certain statements in this press release may be deemed to be
forward-looking statements. These statements are not historical
facts but rather are based on the Company’s current expectations,
estimates and projections regarding the Company’s business,
operations and other factors relating thereto. Words such as “may,”
“will,” “could,” “would,” “should,” “anticipate,” “predict,”
“potential,” “continue,” “expects,” “intends,” “plans,” “projects,”
“believes,” “estimates,” “confident” and similar expressions are
used to identify these forward-looking statements. Factors that
could cause actual results to differ from those reflected in
forward-looking statements relating to our operations and business
include: fluctuations in the price and availability of resins and
other raw materials and our ability to pass any increased costs of
raw materials on to our customers in a timely manner; volatility in
general business and economic conditions in the markets in which we
operate, including the adverse impact on the U.S. and global
economy of the COVID-19 global pandemic, and the impact of COVID-19
in the near, medium and long-term on our business, results of
operations, financial position, liquidity or cash flows, and other
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, and 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; uncertainties surrounding the integration and
realization of anticipated benefits of acquisitions and similar
transactions, including Infiltrator Water Technologies; 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,
including risks associated with new markets and products associated
with our recent acquisition of Infiltrator Water Technologies; our
ability to achieve the acquisition component of our growth
strategy; the risk associated with manufacturing processes; our
ability to manage our assets; the risks associated with our product
warranties; our ability to manage our supply purchasing and
customer credit policies; 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; fluctuations in our effective tax rate, including from the
Tax Cuts and Jobs Act of 2017; our ability to meet future capital
requirements and fund our liquidity needs; 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
December 31,
Nine Months Ended
December 31,
(In thousands, except per share data)
2021
2020
2021
2020
Net sales
$
715,357
$
486,145
$
2,091,128
$
1,538,971
Cost of goods sold
506,380
317,640
1,480,973
976,106
Gross profit
208,977
168,505
610,155
562,865
Operating expenses:
Selling, general and administrative
80,059
66,606
230,231
194,083
Loss on disposal of assets and costs from
exit and disposal activities
3,466
980
2,554
3,254
Intangible amortization
15,138
17,956
46,229
53,893
Income from operations
110,314
82,963
331,141
311,635
Other expense:
Interest expense
8,756
8,433
25,100
27,763
Derivative gains and other income, net
(979
)
(165
)
(2,791
)
(883
)
Income before income taxes
102,537
74,695
308,832
284,755
Income tax expense
28,792
20,264
82,063
79,291
Equity in net (income) loss of
unconsolidated affiliates
(717
)
390
(1,128
)
150
Net income
74,462
54,041
227,897
205,314
Less: net income attributable to
noncontrolling interest
784
267
2,873
838
Net income attributable to ADS
73,678
53,774
225,024
204,476
Dividends to participating securities
(1,357
)
(1,288
)
(4,633
)
(3,985
)
Net income available to common
stockholders and participating securities
72,321
52,486
220,391
200,491
Undistributed income allocated to
participating securities
(9,457
)
(7,798
)
(30,870
)
(31,699
)
Net income available to common
stockholders
$
62,864
$
44,688
$
189,521
$
168,792
Weighted average common shares
outstanding:
Basic
71,267
70,450
71,087
69,893
Diluted
72,789
71,586
72,752
70,853
Net income per share:
Basic
$
0.88
$
0.63
$
2.67
$
2.42
Diluted
$
0.86
$
0.62
$
2.61
$
2.38
Cash dividends declared per
share
$
0.11
$
0.09
$
0.33
$
0.27
ADVANCED DRAINAGE SYSTEMS,
INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE
SHEETS
(unaudited)
As of
(Amounts in thousands)
December 31,
2021
March 31,
2021
ASSETS
Current assets:
Cash
$
22,173
$
195,009
Receivables, net
303,140
236,191
Inventories
465,518
300,961
Other current assets
16,188
10,817
Total current assets
807,019
742,978
Property, plant and equipment, net
590,949
504,275
Other assets:
Goodwill
611,578
599,072
Intangible assets, net
447,411
482,016
Other assets
98,802
85,491
Total assets
$
2,555,759
$
2,413,832
LIABILITIES, MEZZANINE EQUITY AND
STOCKHOLDERS’ EQUITY
Current liabilities:
Current maturities of debt obligations
$
20,764
$
7,000
Current maturities of finance lease
obligations
5,167
19,318
Accounts payable
195,471
171,098
Other accrued liabilities
140,578
116,151
Accrued income taxes
2,104
4,703
Total current liabilities
364,084
318,270
Long-term debt obligations, net
931,765
782,220
Long-term finance lease obligations
13,354
32,964
Deferred tax liabilities
172,143
162,185
Other liabilities
53,903
54,767
Total liabilities
1,535,249
1,350,406
Mezzanine equity:
Redeemable convertible preferred stock
210,888
240,944
Deferred compensation — unearned ESOP
shares
(5,146
)
(11,033
)
Total mezzanine equity
205,742
229,911
Stockholders’ equity:
Common stock
11,601
11,578
Paid-in capital
1,008,610
918,587
Common stock in treasury, at cost
(316,049
)
(10,959
)
Accumulated other comprehensive loss
(26,681
)
(24,220
)
Retained deficit
121,918
(75,202
)
Total ADS stockholders’ equity
799,399
819,784
Noncontrolling interest in
subsidiaries
15,369
13,731
Total stockholders’ equity
814,768
833,515
Total liabilities, mezzanine equity and
stockholders’ equity
$
2,555,759
$
2,413,832
ADVANCED DRAINAGE SYSTEMS,
INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
CASH FLOWS
(unaudited)
Nine Months Ended December
31,
(Amounts in thousands)
2021
2020
Cash Flow from Operating
Activities
Net income
$
227,897
$
205,314
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization
103,687
107,321
Deferred income taxes
6,243
(8,032
)
Gain on disposal of assets and costs from
exit and disposal activities
2,554
3,254
ESOP and stock-based compensation
61,900
45,413
Amortization of deferred financing
charges
286
293
Fair market value adjustments to
derivatives
118
(2,537
)
Equity in net income of unconsolidated
affiliates
(1,128
)
150
Other operating activities
(9,898
)
6,162
Changes in working capital:
Receivables
(59,821
)
12,502
Inventories
(161,878
)
46,809
Prepaid expenses and other current
assets
(5,199
)
(2,288
)
Accounts payable, accrued expenses, and
other liabilities
29,086
34,415
Net cash provided by operating
activities
193,847
448,776
Cash Flows from Investing
Activities
Capital expenditures
(100,367
)
(57,675
)
Acquisition, net of cash acquired
(49,210
)
—
Other investing activities
(463
)
516
Net cash used in investing activities
(150,040
)
(57,159
)
Cash Flows from Financing
Activities
Payments on syndicated Term Loan
Facility
(5,250
)
(205,250
)
Proceeds from Revolving Credit
Agreement
258,100
—
Payments on Revolving Credit Agreement
(124,600
)
(100,000
)
Proceeds from Equipment Financing
35,963
—
Payments on Equipment Financing
(1,177
)
—
Payments on finance lease obligations
(49,365
)
(15,859
)
Repurchase of common stock
(292,000
)
—
Cash dividends paid
(27,826
)
(24,507
)
Dividends paid to noncontrolling interest
holder
(1,471
)
—
Proceeds from exercise of stock
options
4,274
3,989
Payment of withholding taxes on vesting of
restricted stock units
(13,055
)
—
Other financing activities
(167
)
(1,489
)
Net cash used in financing activities
(216,574
)
(343,116
)
Effect of exchange rate changes on
cash
(69
)
1,262
Net change in cash
(172,836
)
49,763
Cash at beginning of period
195,009
174,233
Cash at end of period
$
22,173
$
223,996
Selected Financial Data
The following tables set forth net sales by reportable segment
for each of the periods indicated.
Three Months Ended
December 31, 2021
December 31, 2020
(In thousands)
Net Sales
Intersegment
Net Sales
Net Sales
from External
Customers
Net Sales
Intersegment
Net Sales
Net Sales
from External
Customers
Pipe
$
400,027
$
(3,332
)
$
396,695
$
254,209
$
(1,311
)
$
252,898
Infiltrator Water Technologies
148,677
(26,314
)
122,363
98,409
(17,188
)
81,221
International
International - Pipe
41,156
(5,700
)
35,456
33,729
(2,970
)
30,759
International - Allied Products &
Other
14,687
—
14,687
11,648
—
11,648
Total International
55,843
(5,700
)
50,143
45,377
(2,970
)
42,407
Allied Products & Other
147,476
(1,320
)
146,156
109,619
—
109,619
Intersegment Eliminations
(36,666
)
36,666
—
(21,469
)
21,469
—
Total Consolidated
$
715,357
$
—
$
715,357
$
486,145
$
—
$
486,145
Nine Months Ended
December 31, 2021
December 31, 2020
(In thousands)
Net Sales
Intersegment
Net Sales
Net Sales
from External
Customers
Net Sales
Intersegment
Net Sales
Net Sales
from External
Customers
Pipe
$
1,158,558
$
(7,903
)
$
1,150,655
$
819,994
$
(4,793
)
$
815,201
Infiltrator Water Technologies
421,330
(67,763
)
353,567
306,548
(53,948
)
252,600
International
International - Pipe
142,135
(13,784
)
128,351
96,271
(3,866
)
92,405
International - Allied Products &
Other
42,648
—
42,648
34,233
—
34,233
Total International
184,783
(13,784
)
170,999
130,504
(3,866
)
126,638
Allied Products & Other
420,231
(4,324
)
415,907
344,532
—
344,532
Intersegment Eliminations
(93,774
)
93,774
—
(62,607
)
62,607
—
Total Consolidated
$
2,091,128
$
—
$
2,091,128
$
1,538,971
$
—
$
1,538,971
Employee Stock Ownership Plan ("ESOP")
The Company established an ESOP to enable employees to acquire
stock ownership in ADS in the form of redeemable convertible
preferred shares ("preferred shares"). All preferred shares will be
converted to common shares within thirty days following the March
31, 2022 ESOP loan repayment; and the remaining shares of
unallocated preferred stock will be allocated to the participants
of the ESOP. The ESOP’s conversion of preferred shares into common
shares will have a meaningful impact on net income, net income per
share and common shares outstanding. The common shares outstanding
will be greater after conversion.
For additional information on the Company's ESOP, please refer
to the Company's Annual Report on Form 10-K for the fiscal year
ended March 31, 2021, and other reports filed by the Company with
the SEC. Additional information related to this transaction will be
included in a Current Report on Form 8-K, which the Company intends
to file with the SEC after market-close today.
Net Income (Loss)
The impact of the ESOP on net (loss) income includes the ESOP
deferred compensation attributable to the preferred shares
allocated to employee accounts during the period, which is a
non-cash charge to our earnings and not deductible for income tax
purposes.
Three Months Ended
December 31,
Nine Months Ended
December 31,
2021
2020
2021
2020
(In thousands)
Net income attributable to ADS
$
73,678
$
53,774
$
225,024
$
204,476
ESOP deferred stock-based compensation
17,221
13,513
43,389
29,506
Common shares outstanding
The conversion of the preferred shares will increase the number
of common shares outstanding. Preferred shares will convert to
common shares at plan maturity, or upon retirement, disability,
death or vested terminations over the life of the plan.
Three Months Ended
December 31,
Nine Months Ended
December 31,
2021
2020
2021
2020
(Shares in millions)
Weighted average common shares
outstanding
71,267
70,450
71,087
69,893
Conversion of redeemable convertible
shares
12,988
15,760
13,952
16,213
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 Segment Adjusted
Gross Profit to Gross profit
Three Months Ended
December 31,
Nine Months Ended
December 31,
(Amounts in thousands)
2021
2020
2021
2020
Segment adjusted gross profit
Pipe
$
92,066
$
78,651
$
258,681
$
269,746
Infiltrator Water Technologies
60,546
48,518
178,795
149,551
International
13,240
12,986
49,695
38,976
Allied Products & Other
72,785
55,158
204,063
176,006
Intersegment Eliminations
(44
)
(932
)
1,421
(918
)
Total Segment Adjusted Gross Profit
238,593
194,381
692,655
633,361
Depreciation and amortization
18,042
16,432
52,824
49,318
ESOP and stock-based compensation
expense
11,574
9,444
29,676
20,981
COVID-19 related expenses
—
—
—
197
Total Gross Profit
$
208,977
$
168,505
$
610,155
$
562,865
Reconciliation of Adjusted EBITDA to
Net Income
Three Months Ended
December 31,
Nine Months Ended
December 31,
(Amounts in thousands)
2021
2020
2021
2020
Net income
$
74,462
$
54,041
$
227,897
$
205,314
Depreciation and amortization
34,837
35,762
103,687
107,321
Interest expense
8,756
8,433
25,100
27,763
Income tax expense
28,792
20,264
82,063
79,291
EBITDA
146,847
118,500
438,747
419,689
Loss on disposal of assets and costs from
exit and disposal activities
3,466
980
2,554
3,254
ESOP and stock-based compensation
expense
23,463
18,325
61,900
45,413
Transaction costs
2,145
54
3,022
1,428
Strategic growth and operational
improvement initiatives
—
573
—
2,689
COVID-19 related expenses (a)
—
—
—
806
Other adjustments(b)
234
431
1,318
(872
)
Adjusted EBITDA
$
176,155
$
138,863
$
507,541
$
472,407
(a) Includes expenses directly related to our
response to the COVID-19 pandemic, including adjustments to our
pandemic pay program and expenses associated with our 3rd party
crisis management vendor.
(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.
Reconciliation of Free Cash Flow to
Cash flow from Operating Activities
Nine Months Ended December
31,
(Amounts in thousands)
2021
2020
Net cash flow from operating
activities
$
193,847
$
448,776
Capital expenditures
(100,367
)
(57,675
)
Free cash flow
$
93,480
$
391,101
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220203005177/en/
Michael Higgins VP, Corporate Strategy & Investor Relations
(614) 658-0050 Mike.Higgins@ads-pipe.com
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