Advanced Drainage Systems (WMS) Reports In-Line Q4 EPS, Revenues Beat

Advanced Drainage Systems (NYSE: WMS) reported Q4 EPS of $0.01, in-line with the analyst estimate of $0.01. Revenue for the quarter came in at $370.8 million versus the consensus estimate of $356.4 million.

Fourth Quarter Fiscal 2020 Results

• Net sales increased 36.2% to $370.8 million
• Net income increased 86.6% to of $3.5 million
• Adjusted EBITDA (Non-GAAP) increased 95.6% to $72.1 million

Scott Barbour, President and Chief Executive Officer of ADS commented, “As the COVID-19 pandemic unfolds across the world, the health and safety of our employees remains our highest priority. During the fourth quarter, we implemented appropriate health protocols across our facilities, closely following guidelines from the Centers for Disease Control and Prevention (CDC) as well as federal, state and local governments. Deemed an ‘essential business’ in most states, our operations remained up and running as we worked to meet steady customer demand throughout the quarter. I want to thank our employees whose perseverance drove a strong finish to the year while allowing us to continue providing essential water management solutions to our customers and the communities they serve during these difficult times.”

Barbour continued, “We successfully executed on our growth plans this year, outpacing core domestic construction end markets by 600 basis points in our legacy ADS business, driven by our conversion strategy and focus on growth in key states. We also saw sales in our domestic agriculture market increase by 35% as we capitalized on favorable industry dynamics by successfully implementing organizational changes, introducing new products, and executing with greater focus. Our outstanding financial results of the past year allowed us to exceed our long-term Adjusted EBITDA and cash conversion targets one year ahead of plan while also keeping us on track to achieve our long-term revenue target.”

Barbour added, “As we move into fiscal year 2021, we face heightened market uncertainty resulting from the coronavirus pandemic. The new fiscal year began similar to how the prior year ended, with strength in April across the majority of our businesses and end markets. Demand and business activity remained fairly stable into the first quarter, but market conditions may weaken in the second half of the year. Accordingly, we implemented a comprehensive cost reduction and efficiency program to get ahead of the anticipated demand environment and will continue to monitor the situation closely and adjust our plans as necessary.”

Barbour concluded, “While we continue to adapt to the new operating environment, we do so from a position of strength. In addition to achieving record financial performance last year, we also successfully executed on our commitments and growth strategies; returned over $100 million to shareholders; completed a large, highly strategic acquisition; implemented a new capital structure; and built a strong foundation for our Environmental, Social and Governance (ESG) program. These accomplishments and our continued execution position us well to successfully navigate the current environment while maintaining our focus on delivering sustainable, long-term growth.”

Fiscal 2021 Outlook

ADS continues to carefully monitor the pandemic and the impact on its business. However, given the market uncertainty, the Company is currently unable to predict the extent to which the pandemic will impact future operations and financial results and therefore is not issuing financial guidance at this time. In fiscal 2021, capital expenditures are expected to be in the range of $60 million to $65 million.

For earnings history and earnings-related data on Advanced Drainage Systems (WMS) click here.

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