Advanced Drainage Systems (NYSE: WMS) reported Q2 EPS of $0.35, $0.07 better than the analyst estimate of $0.28. Revenue for the quarter came in at $361 million versus the consensus estimate of $359.72 million.

GUIDANCE:

Advanced Drainage Systems sees FY2017 revenue of $1.225-1.25 billion.

Joe Chlapaty, Chairman and Chief Executive Officer of ADS commented, “We are pleased with our success in managing our costs and operations amidst soft market conditions. Second quarter net sales declined as expected due to relatively flat core domestic construction growth and continued weakness in Mexico and the agriculture market. Despite the market conditions, we were still able to improve our gross margins, Adjusted EBITDA and cash flow. Free cash flow generation should remain strong in the second half of fiscal 2017, which will provide us additional avenues to create shareholder value including investing in our business, making selective acquisitions and returning cash to our shareholders.”

Chlapaty continued, “We anticipate that market headwinds will persist for the remainder of fiscal year 2017. However, the long-term underlying fundamentals of our business are strong and we remain confident that we will capitalize on our conversion opportunities that will enable us to continue outpacing market growth.”

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