Advanced Drainage Systems, Inc 8-K, filed Nov 5, 2026
Advanced Drainage Systems, Inc. (WMS)
8-K
2026-11-05
For: 2026-11-05
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Added on
November 05, 2026
About this 8-K
Advanced Drainage Systems, Inc filed this 8-K on November 5, 2026.
Advanced Drainage Systems reported second-quarter net sales of $889.4 million, up 4.6%, proposed the StormTrap acquisition, and set fiscal 2027 net sales guidance of $3.300 billion to $3.400 billion and Adjusted EBITDA guidance of $1.000 billion to $1.030 billion. AI summary
Items reported
- Item 2.02: Financial results
- Item 7.01: Regulation FD disclosure
- Item 8.01: Other events
- Item 9.01: Financial statements and exhibits
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 5, 2026
(Exact name of Registrant as Specified in Its Charter)
(State or Other Jurisdiction of Incorporation) | (Commission File Number) | (IRS Employer Identification No.) | |||||||||
| (Address of Principal Executive Offices) | (Zip Code) | ||||||||||
Registrant’s Telephone Number, Including Area Code: (800 ) 733-7473
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instructions A.2. below):
| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |||||
| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |||||
| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |||||
| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | |||||
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02 Results of Operations and Financial Condition
On November 5, 2026, Advanced Drainage Systems, Inc. (the "Company") issued a press release setting forth the Company’s unaudited results for the fiscal second quarter ended September 30, 2026. A copy of the Company’s press release with the results is being furnished as Exhibit 99.1 and hereby incorporated by reference.
The information furnished pursuant to this Item 2.02, including Exhibit 99.1, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the "Exchange Act") or otherwise subject to the liabilities under Section 18 of the Exchange Act and shall not be deemed to be incorporated by reference into any filing of the Company under the Securities Act of 1933 or the Exchange Act.
Item 7.01 Regulation FD Disclosure
As previously announced, at 10:00 a.m. (Eastern time) on November 5, 2026, the Company’s President and Chief Executive Officer, Scott Barbour, and Chief Financial Officer, Scott Cottrill, will host a conference call and webcast to discuss the Company’s unaudited results for the second quarter ended September 30, 2026. A copy of the Company’s slides forming the basis of the presentation is being furnished as Exhibit 99.2 and hereby incorporated by reference.
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 following the call.
Item 8.01 Other Events
On November 5, 2026, the Company issued a press release announcing the approval by the Board of Directors (the "Board") of the Company of the declaration of a cash dividend of $0.20 per share, payable on December 15, 2026, to stockholders of record at the close of business on December 1, 2026. A copy of the Company’s press release is attached hereto as Exhibit 99.3 and hereby incorporated by reference.
Item 9.01 Financial Statements and Exhibits.
(d)Exhibits
The following exhibits are being furnished as part of this report:
| 99.1 | ||||||||
| 99.2 | ||||||||
| 99.3 | ||||||||
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) | |||||||
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| ADVANCED DRAINAGE SYSTEMS, INC. | |||||||||||
| Date: November 5, 2026 | By: | /s/ Scott A. Cottrill | |||||||||
| Name: | Scott A. Cottrill | ||||||||||
| Title: | EVP, CFO & Secretary | ||||||||||
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Exhibit 99.1
ADVANCED DRAINAGE SYSTEMS ANNOUNCES SECOND QUARTER
FISCAL 2027 RESULTS
•Net sales increased 12.5% year-to-date
•Organic net sales increased 2.3% year-to-date
•Repurchased $375.1 million of common stock
•Generated $458.2 million in cash from operations
•Announced proposed acquisition of StormTrap
HILLIARD, Ohio – (November 5, 2026) – Advanced Drainage Systems, Inc. (NYSE: WMS) (“ADS” or the “Company”), a leading provider of innovative water management solutions in the stormwater and onsite wastewater industries today announced financial results for the fiscal second quarter ended September 30, 2026.
Scott Barbour, President and Chief Executive Officer of ADS commented, "Our second quarter results demonstrate the resilience of our business model and the team's ability to execute in a challenging demand environment. Net sales increased 4.6% to $889.4 million, including the contribution from NDS, and we generated Adjusted EBITDA of $286.8 million, resulting in an Adjusted EBITDA margin of 32.2%. Revenue in the second quarter was impacted by a larger than previously estimated pull forward of revenue into the first quarter. Looking back over the first half of fiscal year 2027, our performance was strong, with net sales up 12.5%, organic net sales up 2.3% and Adjusted EBITDA up 14.0%. The first half Adjusted EBITDA margin of 34.1% represents the highest first half profitability in the Company’s history."
"We continue to see strong performance in areas where innovation and evolving regulations are creating new demand, with advanced wastewater treatment, stormwater capture and water quality products each growing double digits. We also took an important step to expand our addressable market with the proposed acquisition of StormTrap, a leader in large-volume, space-constrained and highly engineered stormwater solutions. StormTrap complements and further diversifies our portfolio, fits ADS’ specification-driven commercial model and creates new cross-selling opportunities to further expand the package in the non-residential and infrastructure markets."
"Favorable price/cost has more than offset unfavorable volume and transportation costs, contributing to robust profitability in the quarter, which we expect to continue into the second half of the year. We are experiencing lower inflationary pressure than initially expected on materials, mitigating the need for corresponding pricing actions that had previously been included in our net sales outlook. The demand environment is softer today than when we initially issued guidance in May, driven by higher interest rates and ongoing geopolitical uncertainty. These changes are reflected in our updated revenue outlook."
"Because of our focus on new product introductions, material conversion, managing price/cost, executing on productivity and deploying capital in a disciplined manner, the Adjusted EBITDA outlook is largely the same despite the change in net sales guidance. This reflects our confidence in the resilient earnings profile of the business and our focus on the factors within our control. We remain confident in the long-term fundamentals of ADS as a pure-play water management company, and we believe the investments we are making today position us to deliver as our end markets recover."
Second Quarter Fiscal 2027 Results
Net sales increased $39.0 million, or 4.6%, to $889.4 million, as compared to $850.4 million in the prior year quarter. Stormwater sales increased $41.4 million, or 6.2%, to $712.1 million, as compared to $670.7 million in the prior year quarter. Stormwater sales include $77.3 million of revenue from the acquisition of National Diversified Sales (“NDS”). On an organic basis, Stormwater sales decreased 5.3%. Wastewater sales decreased $2.4 million, or 1.3%, to $177.3 million as compared to $179.7 million in the prior year quarter.
Gross profit increased $5.7 million, or 1.7%, to $345.9 million as compared to $340.1 million in the prior year quarter. The increase in gross profit is primarily driven by the acquisition of NDS, as well as favorable price/cost more than offsetting unfavorable volume and transportation costs.
Selling, general and administrative expenses increased $10.4 million, or 8.7% to $129.6 million, as compared to $119.2 million. As a percentage of sales, selling, general and administrative expense was 14.6% as compared to 14.0% in the prior year quarter. The increase was primarily driven by the acquisition of NDS and associated transaction costs.
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Net income from continuing operations decreased $22.9 million, or 14.6%, to $133.6 million as compared to $156.5 million in the prior year quarter. Diluted earnings per share (“EPS”) from continuing operations decreased $0.22, or 11.0%, to $1.77 as compared to $1.99 in the prior year quarter.
Adjusted EBITDA (Non-GAAP) decreased $0.7 million, or 0.2%, to $286.8 million, as compared to $287.5 million in the prior year quarter, primarily due to the factors mentioned above. As a percentage of net sales, Adjusted EBITDA was 32.2% as compared to 33.8% in the prior year quarter.
Segment sales results are based on Net sales to external customers. Reconciliations of GAAP to Non-GAAP financial measures for Adjusted EBITDA, Organic Net Sales, Free Cash Flow and Adjusted Earnings per Share have 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.”
Year-to-Date Fiscal 2027 Results
Net sales increased $210.3 million, or 12.5%, to $1,890.5 million, as compared to $1,680.3 million in the prior year period. Stormwater sales increased $199.2 million, or 15.1%, to $1,521.4 million, as compared to $1,322.2 million in the prior year period. Stormwater sales include $172.0 million of revenue from the acquisition of NDS. On an organic basis, Stormwater sales increased 2.1%, driven by growth in the core non-residential construction end market. Wastewater sales increased $11.0 million, or 3.1%, to $369.1 million as compared to $358.1 million in the prior year period.
Gross profit increased $83.3 million, or 12.4%, to $753.9 million as compared to $670.6 million in the prior year period. The increase in gross profit is primarily driven by the acquisition of NDS, as well as favorable volume, price/cost and mix of construction market sales more than offsetting unfavorable transportation costs.
Selling, general and administrative expenses increased $37.3 million, or 16.7%, to $260.4 million, as compared to $223.2 million. As a percentage of sales, selling, general and administrative expense was 13.8% as compared to 13.3% in the prior year. The increase was primarily driven by the acquisition of NDS.
Net income from continuing operations increased $9.6 million, or 3.2%, to $310.2 million as compared to $300.6 million in the prior year period. Diluted EPS from continuing operations increased $0.19, or 5.0%, to $4.02, as compared to $3.83 per share in the prior year, primarily due to the factors mentioned above.
Adjusted EBITDA (Non-GAAP) increased $79.4 million, or 14.0%, to $645.1 million, as compared to $565.7 million in the prior year period, primarily due to the factors mentioned above. As a percentage of net sales, Adjusted EBITDA was 34.1% as compared to 33.7% in the prior year period.
Balance Sheet and Liquidity
Net cash provided by operating activities was $458.2 million, as compared to $509.8 million in the prior year. Free cash flow (Non-GAAP) was $359.5 million, as compared to $398.8 million in the prior year. Net debt (total debt and finance lease obligations net of cash) was $1,619.9 million as of September 30, 2026, an increase of $71.0 million from March 31, 2026.
ADS had total liquidity of $891.8 million, comprised of cash of $153.2 million as of September 30, 2026 and $738.6 million of availability under committed credit facilities. As of September 30, 2026, the Company’s trailing-twelve-month leverage ratio was 1.6 times Adjusted EBITDA.
In the six months ended September 30, 2026, the Company repurchased 2.7 million shares of its common stock for a total cost of $375.1 million. As of September 30, 2026, approximately $677.3 million of common stock may be repurchased under the Company's existing stock repurchase authorization.
Fiscal 2027 Outlook
Based on results to date, current visibility, backlog of existing orders and business trends, the Company updated its financial targets for fiscal 2027. Net sales are now expected to be in the range of $3.300 billion to $3.400 billion and Adjusted EBITDA is now expected to be in the range of $1.000 billion to $1.030 billion. Capital expenditures are expected to be approximately $200 million.
Conference Call Information
Interested investors and other parties can listen to a webcast of the live conference call by logging in through the Investor Relations section of the Company's website at https://investors.ads-pipe.com/events-and-presentations. An online replay will be available on the same website following the call.
About the Company
Advanced Drainage Systems is a leading manufacturer of innovative stormwater and onsite wastewater solutions that manage the world’s most precious resource: water. ADS, along with NDS and Infiltrator Water Technologies, provides superior stormwater
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drainage and onsite wastewater products used across commercial, residential, infrastructure, and agricultural applications, while delivering unparalleled customer service. ADS operates the industry’s largest company-owned fleet, an expansive sales team and a vast manufacturing network. As one of the largest plastic recycling companies in North America, ADS keeps millions of pounds of plastic out of landfills each year. Founded in 1966, ADS’ water management solutions are designed to last for decades. To learn more, visit the Company’s website at www.adspipe.com.
Forward Looking Statements
Certain statements in this press release may be deemed to be forward-looking statements. 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, new tariff and international trade policies, and our ability to pass any increased costs of raw materials and tariffs on to our customers in a timely manner; disruption or volatility in general business, political and economic conditions in the markets in which we operate; 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; uncertainties surrounding the integration and realization of anticipated benefits of acquisitions and the ability to do so within the intended time frame, including our ability to successfully complete the acquisition of StormTrap and to integrate NDS and/or StormTrap into our business; risks that the acquisition of NDS and/or StormTrap may involve unexpected costs, liabilities or delays, risks that the cost savings and synergies from the acquisition of NDS and/or StormTrap may not be fully realized; the effect of any claims, litigation, investigations or proceedings; 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; the risk associated with manufacturing processes; the effects of global climate change and any related regulatory responses; our ability to protect against cybersecurity incidents and disruptions or failures of our IT systems; our ability to assess and monitor the effects of artificial intelligence, machine learning, and robotics and blockchain or other new approaches to data mining on our business and operations; our ability to manage our supply purchasing and customer credit policies; 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 appropriately address any environmental, social or governance concerns that may arise from our activities; the risks associated with our current levels of indebtedness, including borrowings under our existing credit agreement and outstanding indebtedness under our existing senior notes; and other risks and uncertainties described in the Company’s filings with the SEC. 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.
For more information, please contact:
Michael Higgins
SVP, Corporate Strategy & Investor Relations
(614) 658-0050
Michael.Higgins@adspipe.com
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Financial Statements
ADVANCED DRAINAGE SYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
| Three Months Ended September 30, | Six Months Ended September 30, | ||||||||||||||||||||||
| (Amounts in thousands, except per share data) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| Net sales | $ | 889,406 | $ | 850,381 | $ | 1,890,518 | $ | 1,680,261 | |||||||||||||||
| Cost of goods sold | 543,551 | 510,249 | 1,136,616 | 1,009,691 | |||||||||||||||||||
| Gross profit | 345,855 | 340,132 | 753,902 | 670,570 | |||||||||||||||||||
| Operating expenses: | |||||||||||||||||||||||
| Selling, general and administrative | 129,617 | 119,224 | 260,435 | 223,185 | |||||||||||||||||||
Loss (gain) on disposal of assets and costs from exit and disposal activities | 1,302 | (15,926) | 3,923 | (8,902) | |||||||||||||||||||
| Intangible amortization | 20,061 | 13,539 | 40,121 | 27,246 | |||||||||||||||||||
| Income from operations | 194,875 | 223,295 | 449,423 | 429,041 | |||||||||||||||||||
| Other expense: | |||||||||||||||||||||||
| Interest expense | 27,515 | 23,116 | 54,555 | 46,145 | |||||||||||||||||||
| Interest income and other, net | (9,136) | (8,012) | (10,588) | (14,717) | |||||||||||||||||||
| Income before income taxes | 176,496 | 208,191 | 405,456 | 397,613 | |||||||||||||||||||
| Income tax expense | 44,206 | 52,399 | 97,895 | 99,073 | |||||||||||||||||||
| Equity in net income of unconsolidated affiliates | (1,333) | (708) | (2,630) | (2,051) | |||||||||||||||||||
| Net income from continuing operations | 133,623 | 156,500 | 310,191 | 300,591 | |||||||||||||||||||
| Net loss from discontinued operations, net of taxes | (23,522) | — | (29,175) | — | |||||||||||||||||||
| Net income | 110,101 | 156,500 | 281,016 | 300,591 | |||||||||||||||||||
| Less: net (loss) income attributable to noncontrolling interest | (338) | 483 | 2,056 | 652 | |||||||||||||||||||
| Net income attributable to ADS | $ | 110,439 | $ | 156,017 | 278,960 | 299,939 | |||||||||||||||||
| Weighted average common shares outstanding: | |||||||||||||||||||||||
| Basic | 75,367 | 77,752 | 75,943 | 77,697 | |||||||||||||||||||
| Diluted | 75,787 | 78,310 | 76,566 | 78,240 | |||||||||||||||||||
| Net income from continuing operations per share: | |||||||||||||||||||||||
| Basic | $ | 1.78 | $ | 2.01 | $ | 4.06 | $ | 3.86 | |||||||||||||||
| Diluted | $ | 1.77 | $ | 1.99 | $ | 4.02 | $ | 3.83 | |||||||||||||||
| Net loss from discontinued operations per share: | |||||||||||||||||||||||
| Basic | $ | (0.31) | $ | — | $ | (0.38) | $ | — | |||||||||||||||
| Diluted | $ | (0.31) | $ | — | $ | (0.38) | $ | — | |||||||||||||||
| Net income per share: | |||||||||||||||||||||||
| Basic | $ | 1.47 | $ | 2.01 | $ | 3.67 | $ | 3.86 | |||||||||||||||
| Diluted | $ | 1.46 | $ | 1.99 | $ | 3.64 | $ | 3.83 | |||||||||||||||
| Cash dividends declared per share | $ | 0.20 | $ | 0.18 | $ | 0.40 | $ | 0.36 | |||||||||||||||
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ADVANCED DRAINAGE SYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(unaudited)
| As of | |||||||||||
| (Amounts in thousands) | September 30, 2026 | March 31, 2026 | |||||||||
| ASSETS | |||||||||||
| Current assets: | |||||||||||
| Cash | $ | 153,245 | $ | 223,012 | |||||||
| Receivables, net | 429,452 | 390,536 | |||||||||
| Inventories | 563,775 | 543,381 | |||||||||
| Assets held for sale | 11,415 | 43,451 | |||||||||
| Other current assets | 36,689 | 30,449 | |||||||||
| Total current assets | 1,194,576 | 1,230,829 | |||||||||
| Property, plant and equipment, net | 1,248,456 | 1,217,165 | |||||||||
| Other assets: | |||||||||||
| Goodwill | 1,041,156 | 1,042,716 | |||||||||
| Intangible assets, net | 808,408 | 848,527 | |||||||||
| Other assets | 170,887 | 166,386 | |||||||||
| Total assets | $ | 4,463,483 | $ | 4,505,623 | |||||||
| LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS’ EQUITY | |||||||||||
| Current liabilities: | |||||||||||
| Current maturities of debt obligations | $ | 7,955 | $ | 5,865 | |||||||
| Current maturities of finance lease obligations | 40,517 | 38,136 | |||||||||
| Accounts payable | 283,525 | 237,706 | |||||||||
| Liabilities held for sale | 7,277 | 15,139 | |||||||||
| Other accrued liabilities | 210,909 | 212,623 | |||||||||
| Accrued income taxes | 11,853 | — | |||||||||
| Total current liabilities | 562,036 | 509,469 | |||||||||
| Long-term debt obligations, net | 1,603,242 | 1,605,958 | |||||||||
| Long-term finance lease obligations | 121,392 | 121,935 | |||||||||
| Deferred tax liabilities | 230,852 | 220,994 | |||||||||
| Other liabilities | 96,605 | 91,303 | |||||||||
| Total liabilities | 2,614,127 | 2,549,659 | |||||||||
| Mezzanine equity: | |||||||||||
| Redeemable common stock | 69,045 | 73,652 | |||||||||
| Total mezzanine equity | 69,045 | 73,652 | |||||||||
| Stockholders’ equity: | |||||||||||
| Common stock | 11,716 | 11,710 | |||||||||
| Paid-in capital | 1,378,920 | 1,342,091 | |||||||||
| Common stock in treasury, at cost | (1,711,567) | (1,325,713) | |||||||||
| Accumulated other comprehensive loss | (35,139) | (32,290) | |||||||||
| Retained earnings | 2,111,424 | 1,862,936 | |||||||||
| Total ADS stockholders’ equity | 1,755,354 | 1,858,734 | |||||||||
| Noncontrolling interest in subsidiaries | 24,957 | 23,578 | |||||||||
| Total stockholders’ equity | 1,780,311 | 1,882,312 | |||||||||
| Total liabilities, mezzanine equity and stockholders’ equity | $ | 4,463,483 | $ | 4,505,623 | |||||||
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ADVANCED DRAINAGE SYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
| Six Months Ended September 30, | |||||||||||
| (Amounts in thousands) | 2026 | 2025 | |||||||||
| Cash Flows from Operating Activities | |||||||||||
| Net income | $ | 281,016 | $ | 300,591 | |||||||
| Less: Net loss from discontinued operations, net of taxes | (29,175) | — | |||||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
| Depreciation and amortization | 125,842 | 104,921 | |||||||||
| Deferred income taxes | 9,376 | 15,226 | |||||||||
| Loss (gain) on disposal of assets and costs from exit and disposal activities | 3,923 | (8,902) | |||||||||
| Stock-based compensation | 24,531 | 16,981 | |||||||||
| Amortization of deferred financing charges | 1,909 | 1,022 | |||||||||
| Inventory step up related to NDS acquisition | 14,197 | — | |||||||||
| Fair market value adjustments to derivatives | (1,042) | (252) | |||||||||
| Equity in net income of unconsolidated affiliates | (2,630) | (2,051) | |||||||||
| Other operating activities | 2,887 | 778 | |||||||||
| Changes in working capital: | |||||||||||
| Receivables | (35,545) | (62,649) | |||||||||
| Inventories | (35,761) | 69,516 | |||||||||
| Prepaid expenses and other current assets | (7,812) | (3,514) | |||||||||
| Accounts payable, accrued expenses, and other liabilities | 53,667 | 78,176 | |||||||||
| Operating cash flows from discontinued operations | (5,486) | — | |||||||||
| Net cash provided by operating activities | 458,247 | 509,843 | |||||||||
| Cash Flows from Investing Activities | |||||||||||
| Capital expenditures | (98,758) | (111,018) | |||||||||
| Proceeds from disposal of assets | 1,036 | 26,474 | |||||||||
| Acquisition, net of cash acquired | — | (18,558) | |||||||||
| Other investing activities | 489 | (2,241) | |||||||||
| Net cash used in investing activities | (97,233) | (105,343) | |||||||||
| Cash Flows from Financing Activities | |||||||||||
| Payments on syndicated Term Loan Facility | (1,500) | (3,500) | |||||||||
| Payments on Equipment Financing | (603) | (1,885) | |||||||||
| Payments on finance lease obligations | (19,052) | (17,171) | |||||||||
| Repurchase of common stock | (372,916) | — | |||||||||
| Cash dividends paid | (30,512) | (28,085) | |||||||||
| Dividends paid to noncontrolling interest holder | (980) | — | |||||||||
| Proceeds from exercise of stock options | 3,426 | 1,482 | |||||||||
| Payment of withholding taxes on vesting of restricted stock units | (10,736) | (6,694) | |||||||||
| Net cash used in financing activities | (432,873) | (55,853) | |||||||||
| Effect of exchange rate changes on cash | (71) | 1,017 | |||||||||
| Net change in cash | (71,930) | 349,664 | |||||||||
| Cash and restricted cash at beginning of period | 233,967 | 469,271 | |||||||||
| Cash and restricted cash at end of period | 162,037 | 818,935 | |||||||||
| Less: cash held for sale | (8,660) | — | |||||||||
| Cash and restricted cash, excluding held for sale, at end of period | $ | 153,377 | $ | 818,935 | |||||||
| RECONCILIATION TO BALANCE SHEET | |||||||||||
| Cash | $ | 153,245 | $ | 812,862 | |||||||
| Restricted cash | 132 | 6,073 | |||||||||
| Total cash and restricted cash | $ | 153,377 | $ | 818,935 | |||||||
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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.
This press release includes references to Adjusted EBITDA, Free Cash Flow, Organic Net Sales and Adjusted Earnings per Share from Continuing Operations, 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 and may be different from non-GAAP financial measures used by other companies, even when similar terms are used to identify such measures.
The following tables present reconciliations of non-GAAP financial measures to the most comparable GAAP measures for the periods indicated.
Reconciliation of Segment Adjusted EBITDA to Net Income From Continuing Operations
| Three Months Ended September 30, 2026 | |||||||||||||||||||||||
| (Amounts in thousands) | Stormwater | Wastewater | Intersegment Eliminations | Total | |||||||||||||||||||
| Net sales: | |||||||||||||||||||||||
| Net sales from external customers | $ | 712,063 | $ | 177,343 | $ | — | $ | 889,406 | |||||||||||||||
| Intersegment net sales | 11,034 | 20,232 | (31,266) | — | |||||||||||||||||||
| Net sales | 723,097 | 197,575 | (31,266) | 889,406 | |||||||||||||||||||
| Significant segment expenses: | |||||||||||||||||||||||
| Cost of goods sold | 471,745 | 100,644 | (28,838) | 543,551 | |||||||||||||||||||
| Selling, general and administrative expenses | 100,386 | 16,556 | — | 116,942 | |||||||||||||||||||
Other segment items(a) | (62,256) | (8,324) | — | (70,580) | |||||||||||||||||||
Segment Adjusted EBITDA(b) | $ | 213,222 | $ | 88,699 | $ | (2,428) | |||||||||||||||||
Corporate and other costs(c) | 12,675 | ||||||||||||||||||||||
| Total consolidated Adjusted EBITDA | $ | 286,818 | |||||||||||||||||||||
| Reconciliation of total consolidated Adjusted EBITDA to income from continuing operations before income taxes: | |||||||||||||||||||||||
| Interest expense | 27,515 | ||||||||||||||||||||||
| Interest income | (1,407) | ||||||||||||||||||||||
| Depreciation and amortization | 63,685 | ||||||||||||||||||||||
| Stock-based compensation expense | 11,257 | ||||||||||||||||||||||
| Loss on disposal of assets and costs from exit and disposal activities | 1,302 | ||||||||||||||||||||||
Transaction costs(d) | 6,383 | ||||||||||||||||||||||
Other adjustments(e) | 1,587 | ||||||||||||||||||||||
| Income before income taxes | 176,496 | ||||||||||||||||||||||
| Income tax expense | 44,206 | ||||||||||||||||||||||
| Equity in net income of unconsolidated affiliates | (1,333) | ||||||||||||||||||||||
| Net income from continuing operations | $ | 133,623 | |||||||||||||||||||||
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| Three Months Ended September 30, 2025 | |||||||||||||||||||||||
| (Amounts in thousands) | Stormwater | Wastewater | Intersegment Eliminations | Total | |||||||||||||||||||
| Net sales: | |||||||||||||||||||||||
| Net sales from external customers | $ | 670,665 | $ | 179,716 | $ | — | $ | 850,381 | |||||||||||||||
| Intersegment net sales | 9,346 | 16,652 | (25,998) | — | |||||||||||||||||||
| Net sales | 680,011 | 196,368 | (25,998) | 850,381 | |||||||||||||||||||
| Significant segment expenses: | |||||||||||||||||||||||
| Cost of goods sold | 435,834 | 100,525 | (26,110) | 510,249 | |||||||||||||||||||
| Selling, general and administrative expenses | 88,979 | 18,861 | — | 107,840 | |||||||||||||||||||
Other segment items(a) | (55,420) | (11,204) | — | (66,624) | |||||||||||||||||||
Segment Adjusted EBITDA(b) | $ | 210,618 | $ | 88,186 | $ | 112 | |||||||||||||||||
Corporate and other costs(c) | 11,384 | ||||||||||||||||||||||
| Total consolidated Adjusted EBITDA | $ | 287,532 | |||||||||||||||||||||
| Reconciliation of total consolidated Adjusted EBITDA to income from continuing operations before income taxes: | |||||||||||||||||||||||
| Interest expense | 23,116 | ||||||||||||||||||||||
| Interest income | (7,340) | ||||||||||||||||||||||
| Depreciation and amortization | 54,693 | ||||||||||||||||||||||
| Stock-based compensation expense | 8,577 | ||||||||||||||||||||||
| Gain on disposal of assets and costs from exit and disposal activities | (15,926) | ||||||||||||||||||||||
Transaction costs(d) | 9,317 | ||||||||||||||||||||||
Other adjustments(e) | 6,904 | ||||||||||||||||||||||
| Income before income taxes | 208,191 | ||||||||||||||||||||||
| Income tax expense | 52,399 | ||||||||||||||||||||||
| Equity in net income of unconsolidated affiliates | (708) | ||||||||||||||||||||||
| Net income from continuing operations | $ | 156,500 | |||||||||||||||||||||
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| Six Months Ended September 30, 2026 | |||||||||||||||||||||||
| (Amounts in thousands) | Stormwater | Wastewater | Intersegment Eliminations | Total | |||||||||||||||||||
| Net sales: | |||||||||||||||||||||||
| Net sales from external customers | $ | 1,521,439 | $ | 369,079 | $ | — | $ | 1,890,518 | |||||||||||||||
| Intersegment net sales | 22,600 | 37,416 | (60,016) | — | |||||||||||||||||||
| Net sales | 1,544,039 | 406,495 | (60,016) | 1,890,518 | |||||||||||||||||||
| Significant segment expenses: | |||||||||||||||||||||||
| Cost of goods sold | 990,557 | 205,244 | (59,185) | 1,136,616 | |||||||||||||||||||
| Selling, general and administrative expenses | 201,067 | 34,206 | — | 235,273 | |||||||||||||||||||
Other segment items(a) | (134,508) | (17,113) | — | (151,621) | |||||||||||||||||||
Segment Adjusted EBITDA(b) | $ | 486,923 | $ | 184,158 | $ | (831) | |||||||||||||||||
Corporate and other costs(c) | 25,162 | ||||||||||||||||||||||
| Total consolidated Adjusted EBITDA | $ | 645,088 | |||||||||||||||||||||
| Reconciliation of total consolidated Adjusted EBITDA to income from continuing operations before income taxes: | |||||||||||||||||||||||
| Interest expense | 54,555 | ||||||||||||||||||||||
| Interest income | (2,698) | ||||||||||||||||||||||
| Depreciation and amortization | 125,842 | ||||||||||||||||||||||
| Stock-based compensation expense | 24,531 | ||||||||||||||||||||||
| Loss on disposal of assets and costs from exit and disposal activities | 3,923 | ||||||||||||||||||||||
Transaction costs(d) | 9,627 | ||||||||||||||||||||||
| Inventory step up related to acquisition of NDS | 14,197 | ||||||||||||||||||||||
Other adjustments(e) | 9,655 | ||||||||||||||||||||||
| Income before income taxes | 405,456 | ||||||||||||||||||||||
| Income tax expense | 97,895 | ||||||||||||||||||||||
| Equity in net income of unconsolidated affiliates | (2,630) | ||||||||||||||||||||||
| Net income from continuing operations | $ | 310,191 | |||||||||||||||||||||
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| Six Months Ended September 30, 2025 | |||||||||||||||||||||||
| (Amounts in thousands) | Stormwater | Wastewater | Intersegment Eliminations | Total | |||||||||||||||||||
| Net sales: | |||||||||||||||||||||||
| Net sales from external customers | $ | 1,322,192 | $ | 358,069 | $ | — | $ | 1,680,261 | |||||||||||||||
| Intersegment net sales | 18,422 | 33,261 | (51,683) | — | |||||||||||||||||||
| Net sales | 1,340,614 | 391,330 | (51,683) | 1,680,261 | |||||||||||||||||||
| Significant segment expenses: | |||||||||||||||||||||||
| Cost of goods sold | 862,953 | 197,776 | (51,038) | 1,009,691 | |||||||||||||||||||
| Selling, general and administrative expenses | 162,761 | 37,205 | — | 199,966 | |||||||||||||||||||
Other segment items(a) | (99,213) | (19,101) | — | (118,314) | |||||||||||||||||||
Segment Adjusted EBITDA(b) | $ | 414,113 | $ | 175,450 | $ | (645) | |||||||||||||||||
Corporate and other costs(c) | 23,219 | ||||||||||||||||||||||
| Total consolidated Adjusted EBITDA | $ | 565,699 | |||||||||||||||||||||
| Reconciliation of total consolidated Adjusted EBITDA to income from continuing operations before income taxes: | |||||||||||||||||||||||
| Interest expense | 46,145 | ||||||||||||||||||||||
| Interest income | (12,745) | ||||||||||||||||||||||
| Depreciation and amortization | 104,921 | ||||||||||||||||||||||
| Stock-based compensation expense | 16,981 | ||||||||||||||||||||||
| Gain on disposal of assets and costs from exit and disposal activities | (8,902) | ||||||||||||||||||||||
Transaction costs(d) | 10,124 | ||||||||||||||||||||||
Other adjustments(e) | 11,562 | ||||||||||||||||||||||
| Income before income taxes | 397,613 | ||||||||||||||||||||||
| Income tax expense | 99,073 | ||||||||||||||||||||||
| Equity in net income of unconsolidated affiliates | (2,051) | ||||||||||||||||||||||
| Net income from continuing operations | $ | 300,591 | |||||||||||||||||||||
a.Other segment items include depreciation, amortization recorded within cost of goods sold, stock-based compensation expense, inventory step-up costs, restructuring and realignment expense, and transaction costs.
b.The Company calculates Segment Adjusted EBITDA as net income from continuing operations before interest, income taxes, depreciation and amortization, stock-based compensation expense, non-cash charges and certain other gains and expenses.
c.Represents certain unallocated selling, general and administrative expenses required to reconcile segment Adjusted EBITDA to consolidated Adjusted EBITDA.
d.Represents expenses recorded related to legal, accounting and other professional fees incurred in connection with business or asset acquisitions and dispositions.
e.Includes derivative fair value adjustments, foreign currency transaction (gains) losses, legal settlements, restructuring and realignment expense, and executive retirement expense (benefit).
Reconciliation of Adjusted EBITDA to Net Income - EBITDA and Adjusted EBITDA are non-GAAP financial measures that comprise 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
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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 a reconciliation of Adjusted EBITDA to net income.
| Three Months Ended September 30, | Six Months Ended September 30, | ||||||||||||||||||||||
| (Amounts in thousands) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| Net income from Continuing Operations | $ | 133,623 | $ | 156,500 | $ | 310,191 | $ | 300,591 | |||||||||||||||
| Depreciation and amortization | 63,685 | 54,693 | 125,842 | 104,921 | |||||||||||||||||||
| Interest expense | 27,515 | 23,116 | 54,555 | 46,145 | |||||||||||||||||||
| Income tax expense | 44,206 | 52,399 | 97,895 | 99,073 | |||||||||||||||||||
| EBITDA | 269,029 | 286,708 | 588,483 | 550,730 | |||||||||||||||||||
Restructuring and realignment expense(a) | 3,877 | 7,171 | 9,213 | 15,966 | |||||||||||||||||||
| Loss (gain) on disposal of assets | 649 | (17,644) | 1,108 | (16,446) | |||||||||||||||||||
| Stock-based compensation expense | 11,257 | 8,577 | 24,531 | 16,981 | |||||||||||||||||||
| Transaction costs | 6,383 | 9,317 | 9,627 | 10,124 | |||||||||||||||||||
| Inventory step up related to acquisition of NDS | — | — | 14,197 | — | |||||||||||||||||||
Interest income | (1,407) | (7,340) | (2,698) | (12,745) | |||||||||||||||||||
Other adjustments(b) | (2,970) | 743 | 627 | 1,089 | |||||||||||||||||||
| Adjusted EBITDA | $ | 286,818 | $ | 287,532 | $ | 645,088 | $ | 565,699 | |||||||||||||||
(a)Includes costs associated with closure of facilities, as well as professional fees incurred in connection with supporting enterprise-wide restructuring and realignment initiatives. Excludes gain on sale of properties previously held-for-sale and equipment.
(b)Includes derivative fair value adjustments, foreign currency transaction (gains) losses, legal settlements, and the proportionate share of interest, income taxes, depreciation and amortization related to the South American Joint Venture, which is accounted for under the equity method of accounting and executive retirement expense.
Reconciliation of Free Cash Flow to Cash Flow from Operating Activities - 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 a reconciliation of cash flow from operating activities to Free Cash Flow.
| Six Months Ended September 30, | |||||||||||
| (Amounts in thousands) | 2026 | 2025 | |||||||||
| Net cash flow provided by operating activities | $ | 458,247 | $ | 509,843 | |||||||
| Capital expenditures | (98,758) | (111,018) | |||||||||
| Free cash flow | $ | 359,489 | $ | 398,825 | |||||||
Organic Net Sales - Organic Net Sales is a non-GAAP financial measure that represents net sales excluding the impact of acquisitions and is intended to provide a meaningful comparison of sales growth attributable to underlying volume and pricing changes in the Company’s continuing operations. The following table presents a reconciliation of Net Sales to Organic Net Sales for the Company:
| Three Months Ended September 30, | Six Months Ended September 30, | ||||||||||||||||||||||
| (Amounts in thousands) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| Net Sales | $ | 889,406 | $ | 850,381 | $ | 1,890,518 | $ | 1,680,261 | |||||||||||||||
| Less: Net Sales from NDS | (77,267) | — | (171,954) | — | |||||||||||||||||||
| Organic Net Sales | $ | 812,139 | $ | 850,381 | $ | 1,718,564 | $ | 1,680,261 | |||||||||||||||
Reconciliation of Diluted Earnings per Share from Continuing Operations to Adjusted Earnings per Share from Continuing Operations - Adjusted Earnings per Share From Continuing Operations excludes losses (gains) on disposals of assets or business, restructuring and realignment expenses, impairment charges and transaction costs. Adjusted Earnings per Share from Continuing Operations is a measure used by management and may be useful for investors to evaluate the Company's operational performance. The
11
following table presents diluted earnings per share from continuing operations on an adjusted basis to supplement the Company's discussion of its results of operations herein.
| Three Months Ended September 30, | Six Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Diluted Earnings Per Share from Continuing Operations | $ | 1.77 | $ | 1.99 | $ | 4.02 | $ | 3.83 | |||||||||||||||
Restructuring and realignment expense | 0.05 | 0.09 | 0.12 | 0.20 | |||||||||||||||||||
| Loss (gain) on disposal of assets | 0.01 | (0.23) | 0.01 | (0.21) | |||||||||||||||||||
| Transaction costs | 0.08 | 0.12 | 0.13 | 0.13 | |||||||||||||||||||
| Inventory step up related to the acquisition of NDS | — | — | 0.19 | — | |||||||||||||||||||
Income tax impact of adjustments (a) | (0.03) | — | (0.11) | (0.03) | |||||||||||||||||||
| Adjusted Earnings per Share from Continuing Operations | $ | 1.88 | $ | 1.97 | $ | 4.36 | $ | 3.92 | |||||||||||||||
(a) The income tax impact of adjustments to each period is based on the statutory tax rate.
12
Q2 Fiscal 2027 Financial Results November 5, 2026
Management Presenters 2 Scott Barbour President and Chief Executive Officer Scott Cottrill Executive Vice President, Chief Financial Officer Craig Taylor President, Infiltrator Water Technologies Mike Higgins Senior Vice President, Corporate Strategy & Investor Relations
Forward Looking Statements and Non - GAAP Financial Metrics 3 Forward Looking Statements Certain statements in this press release may be deemed to be forward - looking statements. These statements are not historical fac ts 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 ava ilability of resins and other raw materials, new tariff and international trade policies, and our ability to pass any increased costs of raw materials and tariffs on to our customers in a timely manner; di sruption or volatility in general business, political and economic conditions in the markets in which we operate; cyclicality and seasonality of the non - residential and residential construction markets and infrast ructure spending; the risks of increasing competition in our existing and future markets; uncertainties surrounding the integration and realization of anticipated benefits of acquisitions and the ability to do so within the intended time frame, including our ability to successfully complete the acquisition of StormTrap and to integrate NDS and/or StormTrap into our business; risks that the acquisition of NDS and/or StormTrap may involve unexpected costs, liabilities or delays, risks that the cost savings and synergies from the acquisition of NDS and/or StormTrap may not be fully realized; the effect of any claims, litigation, investigations or proceedings; the effect of weather or seas onality; the loss of any of our significant customers; the risks of doing business internationally; the risks of conducting a portion of our opera tions through joint ventures; our ability to expand into new geographic or product markets; the risk associated with manufacturing processes; the effects of global climate change and any related regulatory re spo nses; our ability to protect against cybersecurity incidents and disruptions or failures of our IT systems; our ability to assess and monitor the effects of artificial intelligence, machine learning, and r obo tics and blockchain or other new approaches to data mining on our business and operations; our ability to manage our supply purchasing and customer credit policies; 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 abi lity to appropriately address any environmental, social or governance concerns that may arise from our activities; the risks associated with our current levels of indebtedness, including borrowings under our existing credit agreement and outstanding indebtedness under our existing senior notes; and other risks and uncertainties described in the Company’s filings with the SEC. New risks and uncertainties eme rge 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. Non - GAAP Financial Measures This presentation includes references to Adjusted EBITDA and Free Cash Flow, non - GAAP financial measures. These non - GAAP financi al 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 GA AP. Adjusted EBITDA and Free Cash Flow may be different from non - GAAP financial measures used by other companies, even when similar terms are used to identify such measures. EBITDA and Adjusted EBITDA are non - GAAP financial measures that comprise 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 t he 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 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 us efu l information to investors and others in understanding and evaluating our ability to generate cash flow from operations after capital expenditures.
CEO Highlights 4 1H Fiscal 2027 Revenue 1H Fiscal 2027 Profitability 33.8% 32.2% Q2 FY26 Q2 FY27 Adjusted EBITDA Margin (160 bps) • Continued favorable price/cost performance , with price covering material and transportation cost inflation in Q2 and 1H. • Continued execution on Adjusted EBITDA margin target >30%. Note: Sales based on net sales to external customers. Business Updates • Estimated $40 - $50 million of revenue pulled into Q1 from Q2 (previously ~$30 million). • Repurchased $375 million or 2.7 million shares year - to- date. • Announced the proposed acquisition of StormTrap Investments LLC (“StormTrap ”), a leader in large volume, space - constrained, highly engineered stormwater solutions. • Launched a new high - flow stormwater filtration system, AquaLux , designed for under ground installation within a smaller footprint. $651 $809 $671 $712 $1,322 $1,521 FY26 FY27 Stormwater $178 $192 $180 $177 $358 $369 FY26 FY27 Wastewater Q1 Q2 • Stormwater organic revenue +2% year - to- date, with 6% organic growth in Allied products. • Stormwater revenue includes $77 million (Q2) and $172 million (1H) from NDS acquisition. • Wastewater revenue +3% year - to- date, driven by growth in tanks and residential advanced treatment. +15% +6% +3% (1%) 33.7% 34.1% 1H FY26 1H FY27 +40 bps Detention System StormTrap • Expands addressable market in stormwater storage. • Enhances go - to- market capabilities with spec - driven commercial model. • Cross - selling opportunities in Non - Residential and Infrastructure markets. • Growth opportunities linked to secular and regulatory tailwinds and expanded customer relationships.
Q2 FY26 Volume Price / Mix, Materials Mfg / Trans SG&A and Other Q2 FY27 Q2 Fiscal 2027 Financial Performance 5 33.8% 32.2% Q2 FY26 Q2 FY27 $850 $889 Q2 FY26 Q2 FY27 (160 bps) (USD, in millions) +5% Domestic Markets + Construction +7% + Non - Residential +3% + Residential +14% - Infrastructure (12%) - Agriculture (19%) Revenue Performance By Business + Stormwater +6% - Pipe (8%) + Allied Products +35% - Wastewater (1%) $288 ($9) $31 ($8) $287 Revenue Adj. EBITDA ($15) Note: Revenue performance is based on net sales to external customers.
Free Cash Flow and Capital Structure 6 FY 2027 FY 2026 ∆ Consolidated Adjusted EBITDA $645 $566 $79 Working capital (2) (54) 4 (58) Cash tax (44) (56) 12 Cash interest – paid (52) (45) (7) Cash interest – received 3 13 (10) Transaction costs (3) (10) (10) 0 Other (30) 38 (68) Consolidated cash flow from operations $458 $510 $(52) Capital expenditures (99) (111) 12 Consolidated Free Cash Flow $359 $399 $(40) Free Cash Flow (¹) Note: all figures in USD, $mm. Figures may not add due to rounding. 1. Operating Cash Flow less capital expenditures 2. Inventory, Trade Receivables, Accounts Payable 3. Legal, accounting and other professional fees incurred in connection with business or asset acquisitions and dispositions (in millions) September 30, 2026 March 31, 2026 Term Loan Facility $ 599 $ 600 Senior Notes 1000 1000 Revolving Credit Facility - - Finance Leases & Other Debt 192 190 Total debt $ 1,791 $ 1,790 Leverage 1.6x 1.6x Debt & Capital Leases (in millions) September 30, 2026 Unrestricted Cash $ 153 Availability under Revolving Credit Facility 739 Total Liquidity $ 892 Liquidity
Disciplined Approach to Capital Allocation 7 Organic Capital Expenditures Acquisitions* Dividends Share Repurchases 1 2 3 4 Fiscal YTD 2027 Fiscal YTD 2026 $99M $0M $31M $375M $111M $19M $28M $0M $505M $158MTotal Capital Allocated 1.6x 0.7xLeverage Subtotal: Capital reinvested in business $99M $130M Subtotal: Capital returned to shareholders $406M $28M *StormTrap acquisition expected to close in Calendar Q4 2026 $530M proposed acquisition of StormTrap
Fiscal Year 2027 Guidance 8 Fiscal 2027 Expectations Key Metric FY 2026 Original FY27 Guidance Updated FY27 Guidance Net Sales (in Millions) $3,050 $3,350 - $3,550 $3,300 - $3,400 Adj. EBITDA (in Millions) $963 $1,000 - $1,050 $1,000 - $1,030 Adj. EBITDA Margin 31.6% 29.6% - 29.9% ~30.3%
Q&A
YTD FY26 Volume Price / Mix, Materials Mfg / Trans SG&A and Other YTD FY27 YTD Fiscal 2027 Financial Performance 10 33.7% 34.1% YTD FY26 YTD FY27 $1,680 $1,891 YTD FY26 YTD FY27 +40 bps (USD, in millions) +13% Domestic Markets + Construction +14% + Non - Residential +10% + Residential +21% - Infrastructure (2%) - Agriculture (2%) Revenue Performance By Business + Stormwater +15% + Pipe +0% + Allied Products +47% + Wastewater +3% $566 $66 $65 ($26) $645 Revenue Adj. EBITDA ($26) Note: Revenue performance is based on net sales to external customers.
Updated Fiscal 2027 Market Expectations 11 End Market % of Revenue Assumption Commentary Non - Residential 45% Flat • Interest rates and economic/geopolitical uncertainty weighing on market • Large project activity still going well Residential 39% Down high - single digits • Interest rates and economic/geopolitical uncertainty weighing on market • Advanced Treatment market growing • Retail market (DIY) choppy Infrastructure 6% Flat • Slowdown in local infrastructure spending Agriculture 4% Down double - digits • Rising input costs • Agriculture economy is soft International 6% Flat • Outlook stable in Canada and Mexico
Appendix 12
Reconciliations 13 a.) Other segment items include depreciation, amortization recorded within cost of goods sold, stock - based compensation expense, inventory step - up costs, restructuring and realignment expense, and transaction costs. b.) The Company calculates Segment Adjusted EBITDA as net income from continuing operations before interest, income taxes, de preciation and amortization, stock - based compensation expense, non - cash charges and certain other gains and expenses. c.) Represents certain unallocated selling, general and administrative expenses required to reconcile segment Adjusted EBITDA to consolidated Adjusted EBITDA. d.) Represents expenses recorded related to legal, accounting and other professional fees incurred in connection with busines s o r asset acquisitions and dispositions. e.) Includes derivative fair value adjustments, foreign currency transaction (gains) losses, legal settlements, restructuring and realignment expense, and executive retirement expense (benefit). (Amount in thousands) Net Sales: Stormwater Wastewater Intersegment Eliminations Total Net sales from external customers $ 712,063 $ 177,343 $ - $ 889,406 Intersegment net sales 11,034 20,232 (31,266) - Net Sales 723,097 197,575 (31,266) 889,406 Significant segment expenses: Cost of goods sold 471,745 100,644 (28,838) 543,551 Selling, general and administrative expenses 100,386 16,556 - 116,942 Other segment items(a) (62,256) (8,324) - (70,580) Segment Adjusted EBITDA(b) $ 213,222 $ 88,699 $ (2,428) Corporate and other costs(c) 12,675 Total consolidated Adjusted EBITDA $ 286,818 Interest expense 27,515 Interest income (1,407) Depreciation and amortization 63,685 Stock-based compensation expense 11,257 Loss on disposal of assets and costs from exit and disposal activities 1,302 Transaction costs(d) 6,383 Other adjustments(e) 1,587 Income before income taxes $ 176,496 Income tax expense 44,206 Equity in net income of unconsolidated affiliates (1,333) Net income from continuing operations $ 133,623 Three Months Ended September 30, 2026 Reconciliation of total consolidated Adjusted EBITDA to income from continuing operations before income taxes:
Reconciliations 14 a.) Other segment items include depreciation, amortization recorded within cost of goods sold, stock - based compensation expense, inventory step - up costs, restructuring and realignment expense, and transaction costs. b.) The Company calculates Segment Adjusted EBITDA as net income from continuing operations before interest, income taxes, de preciation and amortization, stock - based compensation expense, non - cash charges and certain other gains and expenses. c.) Represents certain unallocated selling, general and administrative expenses required to reconcile segment Adjusted EBITDA to consolidated Adjusted EBITDA. d.) Represents expenses recorded related to legal, accounting and other professional fees incurred in connection with busines s o r asset acquisitions and dispositions. e.) Includes derivative fair value adjustments, foreign currency transaction (gains) losses, legal settlements, restructuring and realignment expense, and executive retirement expense (benefit). (Amount in thousands) Net Sales: Stormwater Wastewater Intersegment Eliminations Total Net sales from external customers $ 670,665 $ 179,716 $ - $ 850,381 Intersegment net sales 9,346 16,652 (25,998) - Net Sales 680,011 196,368 (25,998) 850,381 Significant segment expenses: Cost of goods sold 435,834 100,525 (26,110) 510,249 Selling, general and administrative expenses 88,979 18,861 - 107,840 Other segment items(a) (55,420) (11,204) - (66,624) Segment Adjusted EBITDA(b) $ 210,618 $ 88,186 $ 112 Corporate and other costs(c) 11,384 Total consolidated Adjusted EBITDA $ 287,532 Interest expense 23,116 Interest income (7,340) Depreciation and amortization 54,693 Stock-based compensation expense 8,577 Gain on disposal of assets and costs from exit and disposal activities (15,926) Transaction costs(d) 9,317 Other adjustments(e) 6,904 Income before income taxes $ 208,191 Income tax expense 52,399 Equity in net income of unconsolidated affiliates (708) Net income from continuing operations $ 156,500 Three Months Ended September 30, 2025 Reconciliation of total consolidated Adjusted EBITDA to income from continuing operations before income taxes:
Reconciliations 15 a.) Other segment items include depreciation, amortization recorded within cost of goods sold, stock - based compensation expense, inventory step - up costs, restructuring and realignment expense, and transaction costs. b.) The Company calculates Segment Adjusted EBITDA as net income from continuing operations before interest, income taxes, de preciation and amortization, stock - based compensation expense, non - cash charges and certain other gains and expenses. c.) Represents certain unallocated selling, general and administrative expenses required to reconcile segment Adjusted EBITDA to consolidated Adjusted EBITDA. d.) Represents expenses recorded related to legal, accounting and other professional fees incurred in connection with busines s o r asset acquisitions and dispositions. e.) Includes derivative fair value adjustments, foreign currency transaction (gains) losses, legal settlements, restructuring and realignment expense, and executive retirement expense (benefit). (Amount in thousands) Net Sales: Stormwater Wastewater Intersegment Eliminations Total Net sales from external customers $ 1,521,439 $ 369,079 $ - $ 1,890,518 Intersegment net sales 22,600 37,416 (60,016) - Net Sales 1,544,039 406,495 (60,016) 1,890,518 Significant segment expenses: Cost of goods sold 990,557 205,244 (59,185) 1,136,616 Selling, general and administrative expenses 201,067 34,206 - 235,273 Other segment items(a) (134,508) (17,113) - (151,621) Segment Adjusted EBITDA(b) $ 486,923 $ 184,158 $ (831) Corporate and other costs(c) 25,162 Total consolidated Adjusted EBITDA $ 645,088 Interest expense 54,555 Interest income (2,698) Depreciation and amortization 125,842 Stock-based compensation expense 24,531 Loss on disposal of assets and costs from exit and disposal activities 3,923 Transaction costs(d) 9,627 Inventory step up related to acquisition of NDS 14,197 Other adjustments(e) 9,655 Income before income taxes 405,456 Income tax expense 97,895 Equity in net income of unconsolidated affiliates (2,630) Net income from continuing operations $ 310,191 Reconciliation of total consolidated Adjusted EBITDA to income from continuing operations before income taxes: Six Months Ended September 30, 2026
Reconciliations 16 a.) Other segment items include depreciation, amortization recorded within cost of goods sold, stock - based compensation expense, inventory step - up costs, restructuring and realignment expense, and transaction costs. b.) The Company calculates Segment Adjusted EBITDA as net income from continuing operations before interest, income taxes, de preciation and amortization, stock - based compensation expense, non - cash charges and certain other gains and expenses. c.) Represents certain unallocated selling, general and administrative expenses required to reconcile segment Adjusted EBITDA to consolidated Adjusted EBITDA. d.) Represents expenses recorded related to legal, accounting and other professional fees incurred in connection with busines s o r asset acquisitions and dispositions. e.) Includes derivative fair value adjustments, foreign currency transaction (gains) losses, legal settlements, restructuring and realignment expense, and executive retirement expense (benefit). (Amount in thousands) Net Sales: Stormwater Wastewater Intersegment Eliminations Total Net sales from external customers $ 1,322,192 $ 358,069 $ - $ 1,680,261 Intersegment net sales 18,422 33,261 (51,683) - Net Sales 1,340,614 391,330 (51,683) 1,680,261 Significant segment expenses: Cost of goods sold 862,953 197,776 (51,038) 1,009,691 Selling, general and administrative expenses 162,761 37,205 - 199,966 Other segment items(a) (99,213) (19,101) - (118,314) Segment Adjusted EBITDA(b) $ 414,113 $ 175,450 $ (645) Corporate and other costs(c) 23,219 Total consolidated Adjusted EBITDA $ 565,699 Interest expense 46,145 Interest income (12,745) Depreciation and amortization 104,921 Stock-based compensation expense 16,981 Gain on disposal of assets and costs from exit and disposal activities (8,902) Transaction costs(d) 10,124 Other adjustments(e) 11,562 Income before income taxes 397,613 Income tax expense 99,073 Equity in net income of unconsolidated affiliates (2,051) Net income from continuing operations $ 300,591 Six Months Ended September 30, 2025 Reconciliation of total consolidated Adjusted EBITDA to income from continuing operations before income taxes:
17 Reconciliations a.) Includes costs associated with closure of facilities, as well as professional fees incurred in connection with supporting ent erp rise - wide restructuring and realignment initiatives. Excludes gain on sale of properties previously held - for- sale and equipment. b.) Includes derivative fair value adjustments, foreign currency transaction (gains) losses, legal settlements, and the propor tionate share of interest, income taxes, depreciation and amortization related to the South American Joint Venture, which is accounted for under the equity method of accounting an d e xecutive retirement expense. (Amounts in thousands) 2026 2025 2026 2025 Net income from continuing operations $ 133,623 $ 156,500 $ 310,191 $ 300,591 Depreciation and amortization 63,685 54,693 125,842 104,921 Interest expense 27,515 23,116 54,555 46,145 Income tax expense 44,206 52,399 97,895 99,073 EBITDA 269,029 286,708 588,483 550,730 Restructuring and realignment expense(a) 3,877 7,171 9,213 15,966 Loss (gain) on disposal of assets 649 (17,644) 1,108 (16,446) Stock-based compensation expense 11,257 8,577 24,531 16,981 Transaction costs 6,383 9,317 9,627 10,124 Inventory step up related to acquisition of NDS - - 14,197 - Interest income (1,407) (7,340) (2,698) (12,745) Other adjustments(b) (2,970) 743 627 1,089 Adjusted EBITDA $ 286,818 $ 287,532 $ 645,088 $ 565,699 Three Months Ended September 30, Six Months Ended September 30,
Exhibit 99.3
ADVANCED DRAINAGE SYSTEMS ANNOUNCES QUARTERLY CASH DIVIDEND
HILLIARD, Ohio – (November 5, 2026) – Advanced Drainage Systems, Inc. (NYSE: WMS) (“ADS” or the “Company”), a leading provider of innovative water management solutions in the stormwater and onsite wastewater industries, today announced that its Board of Directors (the “Board”) has approved a quarterly cash dividend to its shareholders in the amount of $0.20 per share, a 11% increase over the prior year dividend amount.
Scott Barbour, President and Chief Executive Officer of Advanced Drainage Systems commented, “Today’s dividend announcement, is predicated on the strength of our balance sheet, formidable cash generation, and ongoing commitment to returning capital to shareholders. Our strong financial performance and operational excellence initiatives provide us with the confidence and financial flexibility to return excess cash to our shareholders while simultaneously continuing to strategically invest in our business.”
The quarterly cash dividend of $0.20 per share will be paid on December 15, 2026, to shareholders of record at the close of business on December 1, 2026.
About the Company
Advanced Drainage Systems is a leading manufacturer of innovative stormwater and onsite wastewater solutions that manage the world’s most precious resource: water. ADS, along with NDS and Infiltrator Water Technologies, provides superior stormwater drainage and onsite wastewater products used across commercial, residential, infrastructure, and agricultural applications, while delivering unparalleled customer service. ADS operates the industry’s largest company-owned fleet, an expansive sales team and a vast manufacturing network. As one of the largest plastic recycling companies in North America, ADS keeps millions of pounds of plastic out of landfills each year. Founded in 1966, ADS’ water management solutions are designed to last for decades. To learn more, visit the Company’s website at www.adspipe.com.
Forward Looking Statements
Certain statements in this press release may be deemed to be forward-looking statements. 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, new tariff and international trade policies, and our ability to pass any increased costs of raw materials and tariffs on to our customers in a timely manner; disruption or volatility in general business, political and economic conditions in the markets in which we operate; 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; uncertainties surrounding the integration and realization of anticipated benefits of acquisitions and the ability to do so within the intended time frame, including our ability to successfully complete the acquisition of StormTrap and to integrate NDS and/or StormTrap into our business; risks that the acquisition of NDS and/or StormTrap may involve unexpected costs, liabilities or delays, risks that the cost savings and synergies from the acquisition of NDS and/or StormTrap may not be fully realized; the effect of any claims, litigation, investigations or proceedings; 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; the risk associated with manufacturing processes; the effects of global climate change and any related regulatory responses; our ability to protect against cybersecurity incidents and disruptions or failures of our IT systems; our ability to assess and monitor the effects of artificial intelligence, machine learning, and robotics and blockchain or other new approaches to data mining on our business and operations; our ability to manage our supply purchasing and customer credit policies; 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 appropriately address any environmental, social or governance concerns that may arise from our activities; the risks associated with our current levels of indebtedness, including borrowings under our existing credit agreement and outstanding indebtedness under our existing senior notes; and other risks and uncertainties described in the Company’s filings with the SEC. 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.
For more information, please contact:
Michael Higgins
SVP, Corporate Strategy & Investor Relations
(614) 658-0050
Michael.Higgins@adspipe.com