Advanced Drainage Systems, Inc. · NYSE:WMS
Advanced Drainage Systems — Q4 FY2017 Earnings Presentation
18 slides from Advanced Drainage Systems's earnings presentation, May 25, 2017
Slide 1: Fourth Quarter and Fiscal Year 2017 Financial Results
Fourth Quarter and Fiscal Year 2017 Financial Results Exhibit 99.2
Slide 2: Management Presenters
Management Presenters Joe Chlapaty Chairman and Chief Executive Officer Scott Cottrill Executive Vice President, Chief Financial Officer, Secretary and Treasurer Mike Higgins Director, Investor Relations & Business Strategy
Slide 3: Safe Harbor and Non-GAAP Financial Metrics
Safe Harbor and Non-GAAP Financial Metrics Certain statements in this presentation 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. Such statements include,
Slide 4: Q4 2017 Highlights
Better than expected fourth quarter net sales driven by construction market demand and the impact of favorable weather conditions in certain geographies. 1 Q4 2017 Highlights 2 3 Margin pressure in the quarter was due to the timing of absorption costs related to production and transportation expense
Slide 5: FY2017 Performance vs Guidance
FY2017 Performance FY2017 Guidance Actual Strong top line performance in Q4 drove sales above high end of guidance range, Adjusted EBITDA performance in line Key Metric Low High FY 2017 Net Sales (in Millions) $1,225 $1,250 $1,257 Adj. EBITDA (in Millions) $190 $210 $193
Slide 6: FY2017 Market Conversion Commentary
FY2017 Market Conversion Commentary Domestic End Market Results FY2017 Non-Residential sales continued to outpace the market, driven by HP and Allied Product sales. New Residential Construction sales outpaced Housing Market, driven by HP and N12 sales. Retail, Infrastructure and Agriculture sales pe
Slide 7: Q4 2017 Financial Performance
Q4 2017 Financial Performance Revenue Gross Margin Adjusted EBITDA Margin Despite tough comparison, better than anticipated sales driven by favorable weather conditions in certain geographies Q4 2017 Q4 2016 Q4 2017 Q4 2016 Q4 2017 Q4 2016 ~ flat - 410 bps - 370 bps (USD, in millions) $245 Revenue A
Slide 8: Fiscal Year 2017 Financial Performance
Fiscal Year 2017 Financial Performance Revenue Gross Margin Adjusted EBITDA Margin Despite lower revenues, earnings exceeded the prior year driven by disciplined pricing and a favorable cost environment. FY 2017 FY 2016 FY 2017 FY 2016 FY 2017 FY 2016 - 2.6% +140 bps +90 bps (USD, in millions) $1,29
Slide 9: General and Administrative Expenses
General and Administrative Expenses Q4 FY17 Q4 FY16 I/(D) FY17 FY16 I/(D) G&A expense, as reported $32.5 $27.7 $4.8 $111.0 $92.5 $18.5 EBITDA adjustments related to G&A expense: Stock-based compensation expense (benefit) 5.3 (2.6) 7.9 8.0 (5.1) 13.1 ESOP deferred stock-based compensation 0.2 0.1 0.1
Slide 10: Free Cash Flow Performance
FY 2016 FY 2017 Free Cash Flow¹ Free Cash Flow Performance % of Sales 2.7% 3.5% All figures in USD, mm Working Capital² CapEx Net Debt³ $45 $47 $418 $422 $298 $305 FY 2017 FY 2016 Change Adjusted EBITDA $193 $187 $6 Working Capital $(26) $24 $(50) Cash Tax $(14) $(32) $18 Cash Interest $(17) $(18) $
Slide 11: FY2018 Market Outlook
Market FY2018 Outlook Comments Domestic Construction End Markets Growth driven by share gains and continued strength in the domestic construction markets Agriculture End Market Softness expected to continue throughout FY2018 International End Market Modest improvement expected in Mexico, contingent
Slide 12: FY2018 Financial Outlook
FY2018 Financial Outlook Key Metric FY 2017 FY 2018 Y-o-Y Change Net Sales (in Billions) $1,257 $1,275 - $1,325 Up 1% to 5% Adj. EBITDA (in Millions) $193 $200 - $220 Up 4% to 14% Adj. EBITDA Margin 15.4% 15.7% - 16.6% +30 to +120 basis points Fiscal Year 2018 Expectations Net sales growth driven by
Slide 13: Strategic Pillars
Strategic Pillars Increase integrated supply chain planning Optimize network footprint Improve logistics and customer sourcing Build out broader continuous improvement initiatives Operational Excellence Commercial Excellence Strategic Growth Optimize sales force effectiveness Engineering services tr
Slide 14: Capital Structure and Deployment Priorities
Capital Structure and Deployment Priorities Cash and Leverage Cash Flow from Operations Sources Uses Top priorities for FY2018 include: supporting growth in certain diameters and geographies, productivity and efficiency initiatives (SPP) Focus on M&A to leverage our national footprint and sales and
Slide 15: Q&A Session
Q&A Session
Slide 16: Closing Remarks
Closing Remarks Strong demand in domestic construction markets expected to continue into FY 2018 1 2 3 Certain markets that were challenged in FY 2017 have begun to stabilize, with International construction markets expected to contribute to growth this year Focused on accelerating growth through in
Slide 17: Appendix
Appendix
Slide 18: EBITDA Reconciliation
EBITDA Reconciliation ___________________________ EBITDA as net income before interest, taxes, depreciation and amortization Adjusted EBITDA as EBITDA before stock based compensation expense, non-cash charges and certain other expenses Three Months Ended Fiscal Year Ended March 31, March 31, (Amount
Advanced Drainage Systems — Q4 FY2017 Earnings Presentation on 6ix