Advanced Drainage Systems, Inc. · NYSE:WMS
Advanced Drainage Systems — Q2 FY2020 Earnings Presentation
20 slides from Advanced Drainage Systems's earnings presentation, Nov 7, 2019
Slide 1: Advanced Drainage Systems Q2 Fiscal 2020 Financial Results
Advanced Drainage Systems Q2 Fiscal 2020 Financial Results
Slide 2: Management Presenters
Management Presenters Scott Barbour President and Chief Executive Officer Scott Cottrill Executive Vice President, Chief Financial Officer Mike Higgins Vice President, Corporate Strategy & Investor Relations
Slide 3: Forward Looking Statements and Non-GAAP Financial Metrics
Forward Looking Statements and Non-GAAP Financial Metrics Certain statements in this presentation may be deemed to be forward-looking statements. Such statements include, but are not limited to, statements regarding the anticipated timing for the issuance of additional historic and future financial
Slide 4: Q2 Fiscal 2020 Revenue Highlights
Q2 Fiscal 2020 Revenue Highlights Domestic construction market sales grew 6% despite record rainfall in the quarter, in led by non-residential and residential construction. 1 Consolidated net sales grew 22%, driven by 9% organic growth and two-month contribution from Infiltrator Water Technologies.
Slide 5: Q2 Fiscal 2020 Profitability and Cash Flow Highlights
Q2 Fiscal 2020 Profitability and Cash Flow Highlights Domestic construction market sales grew 6% despite record rainfall in the quarter, in led by non-residential and residential construction. 5 Consolidated Adjusted EBITDA increased 65%, driven by 32% organic growth and two-month contribution from
Slide 6: Infiltrator Q2 Fiscal 2020 Results (August & September)
Q2 Fiscal 2020 Infiltrator Water Technologies Results (August & September) Infiltrator Water Technologies results are in line with to slightly above previous expectations Infiltrator Water Technologies acquisition closed July 31, 2019. Infiltrator Water Technologies results presented above are for A
Slide 7: Capital Deployment Priorities
Capital Deployment Priorities Investor Day – November 2018 CapEx FY20 Priorities Growth: Capacity for high growth products & regions Productivity & Efficiency: Continuous Improvement, Automation, Recycling Strategic Acquisitions Acquisition of Infiltrator Water Technologies Dividends $1.00 Special D
Slide 8: Q2 Fiscal 2020 Financial Performance
Q2 Fiscal 2020 Financial Performance +620 bps Organic* +360 bps (USD, in millions) +22.0% Organic* +9.0% By Application + Pipe +8% + Allied +13% Domestic Markets + Construction +10% + Non-Residential +8% + Residential +20% + Infrastructure +1% + Agriculture +38% Organic* Revenue Growth By Geography
Slide 9: Free Cash Flow
Free Cash Flow FY 2020 FY 2019 ∆ Consolidated Adjusted EBITDA $198 $147 $51 Working capital(2) 15 (59) 74 Cash tax (7) (18) 11 Cash interest (18) (8) (10) Transaction costs(3) (17) ‒ (17) Other 1 (4) 5 Consolidated Cash flow from operations 172 58 114 Capital expenditures (26) (19) (7) Consolidated
Slide 10: New Capital Structure
New Capital Structure (in millions) September 30, 2019 June 30, 2019 Interest Term Loan Facility (9/2019) $ 700 $ ‒ L + 2.250% Senior Notes (9/2019) 350 ‒ 5.000% Credit Agreement (2017) ‒ 156 L + 1.125% Senior Notes (2017) ‒ 100 3.660% Equipment financing 2 2 2.746% Total debt $ 1,052 $ 258 Capital
Slide 11: Fiscal 2020 Financial Outlook Update
Fiscal 2020 Financial Outlook Update Key Metric Previous Updated Y-o-Y Growth Net Sales (in Millions) $1,425 - $1,475 $1,450 - $1,500 Up 5% to 8% Adj. EBITDA (in Millions) $245 - $265 $260 - $280 Up 12% to 21% Adj. EBITDA Margin 17.2% - 18.0% 17.9% - 18.7% +120 to +190 basis points Key Metric Previo
Slide 12: Key Net Sales Drivers – Market Outlook Update
Key Net Sales Drivers – Market Outlook Update Market Previous Outlook FY2020 Outlook Comments Domestic Construction End Markets Low interest rates, favorable housing trends and healthy consumer confidence supporting overall growth. Residential market stronger than anticipated. Agriculture End Market
Slide 13: Q&A Session
Q&A Session
Slide 14: Closing Remarks
Closing Remarks Domestic construction market sales grew 6% despite record rainfall in the quarter, in led by non-residential and residential construction. Infiltrator Water Technologies acquisition enhances growth, margins and cash flow profile, while providing significant opportunities to capture s
Slide 15: Appendix
Appendix
Slide 16: Year-to-Date Fiscal 2020 Financial Performance
Year-to-Date Fiscal 2020 Financial Performance +330 bps Organic* +190 bps (USD, in millions) +14.5% Organic* +7.9% $146.7 $29.4 $20.3 ($9.2) $25.1 $198.5 Revenue Adj. EBITDA *Organic results represent the legacy ADS business and exclude Infiltrator Water Technologies results. ($12.8) $910 $794 $857*
Slide 17: Special Dividend / ESOP
Special Dividend / ESOP Special Dividend $1.00 Special Dividend paid on June 14, 2019 to all shareholders of record on June 3, 2019 $75M aggregate payment $63M to Common Shareholders $12M to Preferred Shareholders (ESOP) ESOP Background: The Company established the ESOP in 1993, funded by an existin
Slide 18: Reconciliations
Reconciliations Three Months Ended September 30, 2019 September 30, 2018 Net Sales Intersegment Net Sales Net Sales from External Customers Net Sales Intersegment Net Sales Net Sales from External Customers Pipe $,281,405 $-,342 $,281,063 $,249,380 $0 $,249,380 Infiltrator Water Technologies 64,889
Slide 19: Reconciliations
Reconciliations Three Months Ended Six Months Ended September 30, September 30, (Amounts in thousands) 2019 2018 2019 2018 Net (loss) income $8,462 $29,372 $-,218,989 $63,023 Depreciation and amortization 26,566 17,536 43,260 35,363 Interest expense 52,332 4,531 57,596 8,333 Income tax expense -3,54
Slide 20: Reconciliations
Reconciliations (a) Includes derivative fair value adjustments, foreign currency transaction (gains) losses, the proportional share of interest, income taxes, depreciation and amortization related to the South American Joint Venture, which are accounted for under the equity method of accounting, con
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