Advanced Drainage Systems (NYSE: WMS) reported Q1 EPS of $0.83, $0.15 better than the analyst estimate of $0.68. Revenue for the quarter came in at $508.6 million versus the consensus estimate of $494.94 million.

First Quarter Fiscal 2021 Results

• Net sales increased 22.9% to $508.6 million
• Net income increased to $70.7 million, compared to a net loss of $227.5 million in the prior year
• Adjusted EBITDA (Non-GAAP) increased 98.6% to $159.5 million
• Cash provided by operating activities increased 112.8% to $133.7 million
• Free cash flow (Non-GAAP) increased 132.4% to $123.4 million

Scott Barbour, President and Chief Executive Officer of ADS commented, “We had a strong start to fiscal 2021 as demand and business activity remained stable overall in the first quarter, with underlying variability by geography and end market. Strong performance in key growth states like the Carolinas, Florida, the Southeast and Utah was partially offset early in the quarter by states that reduced construction activity due to the COVID pandemic. Additionally, we experienced a strong selling season in the domestic Agriculture market with 36% growth in the first quarter. As a whole, ADS benefitted from our national presence as well as our geographic and end market exposure, including the increased exposure to the Residential end market that Infiltrator provides.”

Barbour continued, “We also achieved record profitability in the first quarter. Organic* Adjusted EBITDA margin increased 830 basis points driven by favorable material cost, lower manufacturing and transportation costs driven by our operational initiatives, contributions from the proactive cost mitigation steps announced in March, and leverage from the sales growth in both pipe and Allied products. Consolidated Adjusted EBITDA margin increased 1200 basis points including the impact of the Infiltrator acquisition announced August 1, 2019. Infiltrator achieved record profitability in the quarter due to favorable material costs, the impact from our synergy programs and continued execution of their proven business model.”

Barbour concluded, “The second quarter continues similarly to the first quarter at both ADS and Infiltrator. Our order book, project tracking, book to bill ratio and backlog all remain positive year-over-year. We expect the normal seasonal patterns to apply as the year progresses. However, uncertainties exist regarding the future market environment. Disciplined execution and focusing on the basics are particularly important in the current market environment and we will be focused on these as we build on our strong start to fiscal 2021.”

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