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 financial results
for the fourth quarter and fiscal year ended March 31, 2017.
Fiscal Fourth Quarter 2017
Highlights
- Net sales of $244.2 million compared
to $245.4 million in prior year quarter
- Net loss of $18.1 million compared
to $11.1 million in prior year quarter
- Adjusted EBITDA (Non-GAAP) of $12.6
million compared to $21.6 million in prior year quarter
Fiscal Year 2017
Highlights
- Net sales of $1,257.3 million
compared to $1,290.7 million in prior year
- Net income of $35.9 million compared
to $30.6 million in prior year
- Adjusted EBITDA (Non-GAAP) of $193.4
million compared to $187.3 million in prior year
- Cash flow from operating activities
of $104.2 million compared to $135.3 million in prior year
- Free cash flow (Non-GAAP) of $57.6
million compared to $90.4 million in prior year
Joe Chlapaty, Chairman and Chief Executive Officer of ADS
commented, “In light of the challenging market environment, we were
pleased with our overall performance during fiscal 2017. We
continued our long track record of market conversion in our core
construction markets, with sales in both non-residential and new
residential construction growing 300 basis points above their
respective markets. We also generated Adjusted EBITDA of over $193
million, within our updated guidance range, and had another strong
year of favorable cash flow generation.”
Chlapaty continued, “As we enter fiscal 2018, we expect our
strong performance in our core construction markets to continue,
aided by improving sales in international coupled with a slower
decline in Ag compared to the prior year. In addition, we will look
to accelerate our growth through innovation, such as our recently
launched HPXR 75 product line, as well as bolt-on acquisitions that
complement our product suite and geographic footprint. Lastly, we
are committed to improving our longer-term margin profile through
performance improvement initiatives focused on operational and
customer excellence. Overall, we feel very good about our position
in the markets we serve and our ability to continue driving
above-market growth and operating leverage over time.”
Fiscal Fourth Quarter 2017 Results
compared to Fiscal Fourth Quarter 2016 Results
Net sales decreased 0.5% to $244.2 million, as compared to
$245.4 million in the prior period. Domestic net sales increased
0.8% to $223.4 million as compared to $221.6 million in the prior
period, driven by construction market demand and the impact of
favorable weather conditions in certain geographies. International
net sales decreased 12.7% to $20.8 million as compared to $23.8
million in the prior period.
Gross profit decreased 20.7% to $39.3 million, as compared to
$49.5 million the prior period. As a percentage of net sales, gross
profit decreased 410 basis points to 16.1% compared to 20.2% in the
prior period, primarily due to the timing of absorption costs
related to production and an increase in transportation costs.
General and administrative expenses increased 17.4% to $32.5
million, as compared to $27.7 million in the prior period. The
increase in general and administrative expenses is primarily due to
increases of $7.9 million in stock-based compensation, $2.3 million
in professional fees and $1.7 million in executive termination
payments compared to the prior period. These increases were
partially offset by a $9.0 million decrease in restatement related
costs compared to the prior period.
Adjusted EBITDA (Non-GAAP) decreased 41.9% to $12.6 million, as
compared to $21.6 million in the prior period. As a percentage of
net sales, Adjusted EBITDA decreased to 5.1% as compared to 8.8% in
the prior period. The decrease in Adjusted EBITDA was largely
attributed to the factors mentioned above.
Adjusted Loss Per Fully Converted Share (Non-GAAP) was $0.22
based on weighted average fully converted shares of 73.9 million,
increased from $0.15 for the prior period on weighted average fully
converted shares of 73.5 million.
A reconciliation of GAAP to Non-GAAP financial measures for
Adjusted EBITDA, Free Cash Flow, Adjusted Earnings Per Diluted
Share and Adjusted Loss Per Fully Converted has 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.”
Fiscal Year 2017 Results compared to
Fiscal Year 2016 Results
Net sales decreased 2.6% to $1,257.3 million, as compared to
$1,290.7 million in fiscal 2016. The decrease in net sales was
primarily due to continued softness in the agriculture market and
Mexico, which offset 3% growth in domestic construction markets
compared to fiscal 2016.
Gross profit increased 3.7% to $295.8 million, as compared to
$285.4 million in fiscal 2016. As a percentage of net sales, gross
profit increased 140 basis points to 23.5%, compared to 22.1% in
fiscal 2016. The increase in gross margin is primarily due to
disciplined pricing and a favorable cost environment.
General and administrative expenses increased 19.9% to $111.0
million, as compared to $92.5 million in fiscal 2016. The increase
in general and administrative expenses is primarily due to
increases of $13.1 million in stock-based compensation, $5.1
million in professional fees and $4.3 million in salaries and
benefits compared to fiscal 2016. These increases were partially
offset by a $4.0 million decrease in restatement related costs
compared to fiscal 2016.
Adjusted EBITDA (Non-GAAP) increased 3.2% to $193.4 million, as
compared to $187.3 million in fiscal 2016. As a percentage of net
sales, Adjusted EBITDA increased to 15.4%, as compared to 14.5% in
fiscal 2016. The increase in Adjusted EBITDA was largely attributed
to the same factors mentioned above.
Adjusted Earnings Per Fully Converted Share (Non-GAAP) was $0.58
based on weighted average fully converted shares of 73.9 million,
increased from $0.48 for fiscal 2016 on weighted average fully
converted shares of 73.5 million.
The Company recorded net cash provided by operating activities
of $104.2 million, as compared to $135.3 million for fiscal 2016.
Net debt (total debt and capital lease obligations net of cash) was
$422.3 million as of March 31, 2017, an increase of $4.8 million
from March 31, 2016.
Fiscal Year 2018 Outlook
Based on current visibility, backlog of existing orders and
business trends, the Company provided its financial targets for
fiscal 2018. Net sales for fiscal year 2018 are expected to be in
the range of $1.275 billion to $1.325 billion, while the outlook
for Adjusted EBITDA (Non-GAAP) is expected to be in the range of
$200 and $220 million for fiscal year 2018. Capital expenditures
are expected to be approximately $55 to $60 million.
Scott Cottrill, Executive Vice President and Chief Financial
Officer of ADS, commented, “Our guidance for fiscal 2018 reflects
anticipated domestic construction end market growth in the low to
mid-single digits and a low to mid-single digit decline in the
agriculture market. In addition, international markets are expected
to generate low-single digit growth.”
Webcast Information
The Company will host an investor conference call and webcast on
Thursday, May 25, 2017 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.
About the Company
Advanced Drainage Systems is the leading manufacturer of high
performance thermoplastic corrugated pipe, providing a
comprehensive suite of water management products and superior
drainage solutions for use in the construction and infrastructure
marketplace. Its innovative products are used across a broad range
of end markets and applications, including non-residential,
residential, agriculture and infrastructure applications. The
Company has established a leading position in many of these end
markets by leveraging its national sales and distribution platform,
its overall product breadth and scale and its manufacturing
excellence. Founded in 1966, the Company operates a global network
of approximately 60 manufacturing plants and over 30 distribution
centers. To learn more about the ADS, please visit the Company’s
website at www.ads-pipe.com.
Forward Looking
Statements
Certain statements in this press release may be deemed to be
forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. 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, without 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; 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; 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; 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; the risks
associated with our self-insured programs; 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; our ability to
project product mix; the risks associated with our current levels
of indebtedness; our ability to meet future capital requirements
and fund our liquidity needs; the risk that additional information
may arise that would require the Company to make additional
adjustments or revisions or to restate the financial statements and
other financial data for certain prior periods and any future
periods, any further delay in the filing of any filings with the
SEC; the review of potential weaknesses or deficiencies in the
Company’s disclosure controls and procedures, and discovering
further weaknesses of which we are not currently aware or which
have not been detected and the other risks and uncertainties
described in the Company’s filings with the Securities and Exchange
Commission. 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 Fiscal Year Ended March
31, March 31, (Amounts in thousands, except per share
data)
2017 2016 2017 2016
Net sales $ 244,184 $ 245,398 $ 1,257,261 $ 1,290,678 Cost of goods
sold 204,933 195,894 961,451 1,005,326
Gross profit 39,251 49,504 295,810 285,352 Operating expenses:
Selling 22,743 23,077 91,475 88,478 General and administrative
32,521 27,696 110,950 92,504 Loss on disposal of assets and costs
from exit and disposal activities 5,432 254 8,509 812 Intangible
amortization 2,117 2,175 8,548 9,224
Income from operations (23,562 ) (3,698 ) 76,328 94,334 Other
expense: Interest expense 3,916 4,504 17,467 18,460 Derivative
(gains) losses and other (income) expense, net (427 )
(1,758 ) (5,970 ) 16,575 Income before income taxes
(27,051 ) (6,444 ) 64,831 59,299 Income tax expense (10,913 ) 342
24,615 23,498 Equity in net loss of unconsolidated affiliates
1,914 4,299 4,308 5,234 Net (loss)
income (18,052 ) (11,085 ) 35,908 30,567 Less net income
attributable to noncontrolling interest 58 1,034
2,958 5,515 Net (loss) income attributable to ADS
(18,110 ) (12,119 ) 32,950 25,052 Accretion of Redeemable
noncontrolling interest (419 ) (346 ) (1,560 ) (932 ) Dividends to
Redeemable convertible preferred stockholders (399 ) (343 ) (1,646
) (1,425 ) Dividends paid to unvested restricted stockholders
(69 ) (6 ) (73 ) (24 ) Net (loss)
income available to common stockholders and participating
securities (18,997 ) (12,814 ) 29,671 22,671 Undistributed income
(loss) allocated to participating securities - -
(1,700 ) (1,270 )
Net (loss) income available to
common stockholders $ (18,997 ) $
(12,814 ) $ 27,971 $
21,401 Weighted average common shares
outstanding: Basic 55,186 54,274 54,919 53,978 Diluted 55,186
54,274 55,624 55,176
Net income per share: Basic $ (0.34 ) $
(0.24 ) $ 0.51 $ 0.40 Diluted $ (0.34 ) $ (0.24 ) $ 0.50 $ 0.39
Cash dividends declared per share $ 0.06 $ 0.05 $ 0.24 $
0.20
ADVANCED DRAINAGE SYSTEMS, INC. AND
SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(unaudited)
As of March 31, (Amounts in thousands)
2017
2016 ASSETS Current assets: Cash $
6,450 $ 6,555 Receivables 168,943 186,883 Inventories 258,430
230,466 Deferred income taxes and other current assets 6,743
15,658 Total current assets 440,566 439,562 Property, plant
and equipment, net 406,858 391,744
Other assets: Goodwill
100,566 100,885 Intangible assets, net 51,758 59,869 Other assets
46,537 45,256
Total assets $ 1,046,285 $
1,037,316
LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS’
EQUITY Current liabilities: Current maturities of debt
obligations $ 37,789 $ 35,870 Current maturities of capital lease
obligations 21,450 19,231 Accounts payable 121,922 119,606 Current
portion of liability-classified stock-based awards 11,926 10,118
Other accrued liabilities 54,460 65,099 Accrued income taxes
8,207 2,260 Total current liabilities 255,754 252,184
Long-term debt obligation 310,849 312,214 Long-term capital lease
obligations 58,710 56,809 Deferred tax liabilities 44,007 63,952
Other liabilities 26,530 37,921 Total liabilities
695,850 723,080
Mezzanine equity: Redeemable convertible
preferred stock 302,814 310,240 Deferred compensation — unearned
ESOP shares (198,216 ) (205,664 ) Redeemable noncontrolling
interest in subsidiaries 8,227 7,171 Total mezzanine
equity 112,825 111,747
Stockholders’ equity: Common stock
12,393 12,393 Paid-in capital 755,787 739,097 Common stock in
treasury, at cost (436,984 ) (440,995 ) Accumulated other
comprehensive loss (24,815 ) (21,261 ) Retained deficit
(83,678 ) (101,778 ) Total ADS stockholders’ equity 222,703
187,456 Noncontrolling interest in subsidiaries 14,907
15,033 Total stockholders’ equity 237,610
202,489
Total liabilities, mezzanine equity and stockholders’
equity $ 1,046,285 $ 1,037,316
ADVANCED DRAINAGE SYSTEMS, INC. AND
SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH
FLOWS
(unaudited)
Fiscal Year Ended March 31, (Amounts in thousands)
2017 2016 Cash Flow from Operating
Activities $ 104,239 $ 135,342
Cash Flows from Investing
Activities Capital expenditures (46,676 ) (44,942 ) Purchases
of property, plant and equipment through financing (4,620 ) - Cash
paid for acquisitions, net of cash acquired (8,573 ) (3,188 )
Proceeds from note receivable to related party - 3,854 Issuance of
note receivable to related party - (3,854 ) Other investing
activities (1,390 ) (888 ) Net cash used in investing
activities (61,259 ) (49,018 )
Cash Flows from Financing
Activities Proceeds from Revolving Credit Facility 412,400
409,100 Payments on Revolving Credit Facility (382,600 ) (448,200 )
Payments on Term Loan (10,000 ) (8,750 ) Payments on Senior Notes
(25,000 ) - Proceeds from notes, mortgages, and other debt 1,000
6,378 Payments on notes, mortgages, and other debt (870 ) (7,208 )
Payments on loans against CSV life insurance policies (6,823 ) -
Equipment financing loans 4,620 - Payments on capital lease
obligation (21,760 ) (19,780 ) Cash dividends paid (16,820 )
(16,240 ) Proceeds from options exercises 4,011 1,765 Other
financing activities (983 ) (29 ) Net cash used in
financing activities (42,825 ) (82,964 ) Effect of exchange rate
changes on cash (260 ) (428 ) Net change in cash (105
) 2,932 Cash at beginning of period 6,555 3,623
Cash at end of period $ 6,450 $
6,555
Selected Financial Data
The following tables set forth net sales by reportable segment
for the three and nine months ended December 31, 2016 and 2015,
respectively.
Three
Months Ended Fiscal Year Ended (Amounts in thousands
March 31, % March 31, % except
percentages)
2017 2016 Variance
2017 2016 Variance Net
sales Domestic Pipe $ 159,149 $ 157,084 1.3% $ 786,546 $
812,071 (3.1% ) Allied Products 64,239 64,497 (0.4% )
315,690 301,725 4.6% Total domestic 223,388 221,581
0.8% 1,102,236 1,113,796 (1.0% )
International Pipe 16,552
18,363 (9.9% ) 122,384 139,731 (12.4% ) Allied Products
4,244 5,454 (22.2% ) 32,641 37,151 (12.1% )
Total international 20,796 23,817 (12.7% ) 155,025 176,882 (12.4% )
Consolidated Pipe 175,701 175,447 0.1% 908,930 951,802 (4.5%
) Allied Products 68,483 69,951 (2.1% )
348,331 338,876 2.8% Total net sales $ 244,184 $ 245,398
(0.5% ) $ 1,257,261 $ 1,290,678 (2.6% )
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 Adjusted EBITDA, Free
Cash Flow and Adjusted Earnings Per Fully Converted Share, all
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, Free Cash Flow, and Adjusted Earnings per Fully Converted
Share may be different from non-GAAP financial measures used by
other companies, even when similar terms are used to identify such
measures.
Adjusted EBITDA is a non-GAAP financial measure that comprises
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.
Adjusted Earnings Per Fully Converted Share is a non-GAAP
measure that is calculated by adjusting our Net income per share –
Basic, the most comparable GAAP measure. To effect this adjustment
with respect to Net income available to common stockholders, we
have (1) removed the accretion of Redeemable noncontrolling
interest in subsidiaries, (2) added back the dividends to
Redeemable convertible preferred stockholders and dividends paid to
unvested restricted stockholders, (3) made corresponding
adjustments to the amount allocated to participating securities
under the two class earnings per share computation method, and (4)
added back ESOP deferred compensation attributable to the shares of
Redeemable convertible preferred stock allocated to employee ESOP
accounts during the applicable period, which is a non-cash charge
to our earnings. We have also made adjustments to the weighted
average common shares outstanding – Basic to assume (1) share
conversion of the Redeemable convertible preferred stock
outstanding shares to common stock and (2) add shares of
outstanding unvested restricted stock. Adjusted Earnings Per Fully
Converted Share (non-GAAP) is a key metric used by management and
our board of directors to assess our financial performance. This
information is useful to investors as the preferred shares held by
the ESOP are required to be distributed to our employees over time,
which is done in the form of common stock after the conversion of
the preferred shares. As such, this measure is included because it
provides investors with information to understand the impact on the
financial statements once all preferred shares are converted and
distributed.
The following tables present a reconciliation of Adjusted EBITDA
to Net Income, Free Cash Flow to Cash Flow from Operating
Activities, and Adjusted Earnings Per Fully Converted Share to Net
income per share – Basic, the most comparable GAAP measures, for
each of the periods indicated:
Reconciliation of Adjusted EBITDA to Net Income
Three Months Ended Fiscal Year Ended
March 31, March 31, (Amounts in thousands)
2017 2016 2017 2016
Net income $ (18,052 ) $ (11,085 ) $ 35,908 $ 30,567
Depreciation and amortization 18,290 18,955 72,355 71,009 Interest
expense 3,916 4,504 17,467 18,460 Income tax expense (10,913
) 342 24,615 23,498 EBITDA (6,759 ) 12,716
150,345 143,534 Derivative fair value adjustments 377 (5,587 )
(10,921 ) 2,163 Foreign currency translation (gains) losses 49 (38
) (1,629 ) 697 Loss (gain) on disposal of assets and costs from
exit and disposal activities 5,432 254 8,509 812 Unconsolidated
affiliates interest, tax, depreciation and amortization 702 944
2,751 3,215 Contingent consideration remeasurement (307 ) 257 (265
) 371 Stock-based compensation (benefit) expense 5,608 (2,873 )
8,307 (5,868 ) ESOP deferred stock-based compensation 2,140 875
9,568 10,250 (Benefit) expense related to executive termination
payments 1,104 (552 ) 1,092 (294 ) Restatement-related costs 2,635
11,642 24,026 27,970 Inventory step up related to PTI acquisition
525 - 525 - Bargain purchase gain on PTI acquisition (609 ) - (609
) - Loss related to BaySaver acquisition - - - 490 Transaction
costs 372 - 372 - Impairment of investment in unconsolidated
affiliate 1,300 4,000 1,300 4,000
Adjusted EBITDA $ 12,569 $ 21,638 $ 193,371 $ 187,340
Reconciliation of Segment Adjusted EBITDA to Net
Income
Three Months Ended March 31, 2017
2016 (Amounts in thousands)
Domestic
International Domestic International
Net income $ (8,586 ) $ (9,466 ) $ (3,192 ) $ (7,893 )
Depreciation and amortization 16,329 1,961 16,998 1,957 Interest
expense 3,813 103 4,364 140 Income tax expense (9,533 )
(1,380 ) (259 ) 601 EBITDA 2,023 (8,782 )
17,911 (5,195 ) Derivative fair value adjustments 377 - (5,633 ) 46
Foreign currency translation (gains) losses - 49 - (38 ) Loss
(gain) on disposal of assets and costs from exit and disposal
activities 2,753 2,679 97 157 Unconsolidated affiliates interest,
tax, depreciation and amortization 262 440 283 661 Contingent
consideration remeasurement (307 ) - 257 - Stock-based compensation
(benefit) expense 5,608 - (2,873 ) - ESOP deferred stock-based
compensation 2,140 - 875 - (Benefit) expense related to executive
termination payments 1,104 - (552 ) - Restatement-related costs
2,635 - 11,642 - Inventory step up related to PTI acquisition 525 -
- - Bargain purchase gain on PTI acquisition (609 ) - - - Loss
related to BaySaver acquisition - - - - Transaction costs 372 - - -
Impairment of investment in unconsolidated affiliate -
1,300 - 4,000
Adjusted EBITDA(a)
$ 16,883 $ (4,314 ) $ 22,007 $ (369 ) (a) A portion of the
reduction in International EBITDA is related to transfer pricing.
The reduction is fully offset by an increase in Domestic EBITDA.
Fiscal Year Ended March 31, 2017
2016 (Amounts in thousands)
Domestic
International Domestic International
Net income $ 35,118 $ 790 $ 24,875 $ 5,692 Depreciation and
amortization 63,747 8,608 62,625 8,384 Interest expense 17,049 418
17,908 552 Income tax expense 21,786 2,829
20,465 3,033 EBITDA 137,700 12,645 125,873 17,661 Derivative
fair value adjustments (10,921 ) - 2,139 24 Foreign currency
translation (gains) losses - (1,629 ) - 697 Loss (gain) on disposal
of assets and costs from exit and disposal activities 4,793 3,716
892 (80 ) Unconsolidated affiliates interest, tax, depreciation and
amortization 1,088 1,663 1,052 2,163 Contingent consideration
remeasurement (265 ) - 371 - Stock-based compensation (benefit)
expense 8,307 - (5,868 ) - ESOP deferred stock-based compensation
9,568 - 10,250 - (Benefit) expense related to executive termination
payments 1,092 - (294 ) - Restatement-related costs 24,026 - 27,970
- Inventory step up related to PTI acquisition 525 - - - Bargain
purchase gain on PTI acquisition (609 ) - - - Loss related to
BaySaver acquisition - - 490 - Transaction costs 372 - - -
Impairment of investment in unconsolidated affiliate -
1,300 - 4,000
Adjusted EBITDA(a)
$ 175,676 $ 17,695 $ 162,875 $ 24,465 (a) A portion of the
reduction in International EBITDA is related to transfer pricing.
The reduction is fully offset by an increase in Domestic EBITDA.
Reconciliation of Free Cash Flow to Cash flow from Operating
Activities
Fiscal Year Ended March 31, (Amounts in thousands)
2017 2016 Cash Flow from Operating Activities
$ 104,239 $ 135,342 Capital expenditures (46,676 )
(44,942 )
Free cash flow $ 57,563 $
90,400
Reconciliation of Adjusted Earnings Per Fully Converted Share
(non-GAAP) to Net Income per Share – Basic
Three Months Ended Fiscal Year Ended
March 31, March 31, (Amounts in thousands, except per
share data)
2017 2016 2017
2016 Net income available to common
stockholders $ (18,997 ) $ (12,814 ) $ 27,971 $ 21,401
Weighted average common shares outstanding - Basic 55,186
54,274 54,919 53,978
Net income per share – Basic $ (0.34 )
$ (0.24 ) $ 0.51 $ 0.40 Adjustments to net income available to
common stockholders: Accretion of Redeemable non-controlling
interest in subsidiaries 419 346 1,560 932 Dividends to Redeemable
convertible preferred stockholders 399 343 1,646 1,425 Dividends
paid to unvested restricted stockholders 69 6 73 24 Undistributed
income allocated to participating securities - -
1,700 1,270 Total adjustments to net income available
to common stockholders 887 695 4,979
3,651 Net income attributable to ADS (18,110 ) (12,119 ) 32,950
25,052 Adjustments to net income attributable to ADS: Fair value of
ESOP compensation related to Redeemable convertible preferred stock
2,140 875 9,568 10,250
Adjusted net
income — (Non-GAAP) $ (15,970 ) $
(11,244 ) $ 42,518 $
35,302 Weighted Average Common Shares Outstanding — Basic
55,186 54,274 54,919 53,978 Adjustments to weighted average common
shares outstanding — Basic Unvested restricted shares 55 112 90 123
Redeemable convertible preferred shares 18,686 19,141
18,857 19,399
Weighted Average Fully Converted
Common Shares (Non-GAAP) 73,927
73,527 73,866 73,500 Adjusted
Earnings per Fully Converted Share (Non-GAAP) $
(0.22 ) $ (0.15 ) $
0.58 $ 0.48
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version on businesswire.com: http://www.businesswire.com/news/home/20170525005232/en/
Advanced Drainage Systems, Inc.Michael Higgins,
614-658-0050Mike.higgins@ads-pipe.com
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