Advanced Drainage Systems (WMS) Trims FY16 Outlook; Financial Restatement Completed

Advanced Drainage Systems, Inc. (NYSE: WMS) (“ADS” or the “Company”), a leading global manufacturer of water management products and solutions for commercial, residential, infrastructure and agricultural applications, today announced its outlook for certain financial and operating performance measures for the fiscal year ending March 31, 2016.

Fiscal Year 2016 Expectations

• Net sales of $1.280 to $1.287 billion
• Adjusted EBITDA of $180 to $190 million

Joe Chlapaty, Chairman and Chief Executive Officer of ADS commented, “We experienced strong momentum in our sales trends throughout fiscal year 2016, driven primarily by healthy conversion and favorable weather conditions in the majority of our end markets. Overall, we expect to generate net sales growth between 8.5% - 9.1% in fiscal year 2016, including strong double-digit growth that occurred during the second half of the year. Importantly, we anticipate our growth of 8% - 9% in our core construction markets will significantly outpace the market growth by 300 to 400 basis points. This momentum is expected to continue into fiscal year 2017, supported by double digit order activity and complemented by lower raw material and energy costs, which remain favorable compared to the prior year.”

Chlapaty continued, “We believe the fundamentals of our business remain strong, underscored by our above-market growth, expanding margins and strong balance sheet. While the past several months have been quite challenging for the Company, I am confident that today we are a stronger and better company than we were a year ago. We remain committed to executing our growth strategy of conversion from alternative materials with our broad portfolio of pipe and allied products and believe that there remains significant opportunity for continued above-market growth and operating leverage going forward.”

The Company’s outlook for fiscal year 2016 reflects adjustments related to the restatement of our historical financial statements as well as changes based on the ordinary course of business, including the underlying performance of the Company’s key end markets.

The table below sets forth the Company’s current outlook and anticipated range of certain financial targets for fiscal year 2016, based on current visibility, existing orders and business trends, along with a comparison to the fiscal year 2016 outlook originally provided on May 12, 2015, which was subsequently withdrawn on August 17, 2015.

Scott Cottrill, Executive Vice President and Chief Financial Officer of ADS, commented, “Our fiscal year 2016 outlook primarily reflects lower than previously expected market growth in the non-residential construction market; the impact of foreign exchange rates, particularly from a weaker Canadian dollar; and lower sales growth in Mexico. In addition, our current forecast for Adjusted EBITDA reflects the impact of our lowered revenue guidance and losses related to our raw material and diesel fuel hedges, partially offset by more favorable conversion and transportation costs.”

Financial Restatement

As detailed in the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2015, filed on March 29, 2016, the Company has completed the restatement of its previously issued financial statements for fiscal years 2013 and 2014. The table below summarizes the impact of the errors identified in connection with the restatement and otherwise reflected in the fiscal year 2015 Form 10-K.

*As originally reported in the Company’s earnings release issued on May 12, 2015.

Webcast Information

As previously announced, the Company will host an investor conference call and webcast on Wednesday, March 30, 2016 at 10:00 a.m. Eastern Time. The live call can be accessed by dialing 1-866-450-8367 (US toll-free) or 1-412-317-5465 (international) and asking to be connected to the Advanced Drainage Systems, Inc. call. The live webcast will also be accessible via the "Events Calendar” section of the Company’s Investor Relations website, www.investors.ads-pipe.com. An archived version of the webcast will be available for 90 days following the call.

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