Advanced Drainage Systems, Inc. · NYSE:WMS
Advanced Drainage Systems — Q1 FY2017 Earnings Presentation
17 slides from Advanced Drainage Systems's earnings presentation, Oct 6, 2016
Slide 1: First Quarter Fiscal 2017 Financial Results
First Quarter Fiscal 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 2
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: Q1 2017 Highlights
Solid first quarter performance driven by successful execution of our conversion strategy. 1 Q1 2017 Highlights 2 3 4 Continued growth in core domestic construction markets offset weaker than expected performance in the agriculture market and Mexico. Strong profits driven by lower raw material costs
Slide 5: Q1 2017 Financial Performance
Q1 2017 Financial Performance Revenue Gross Margin Adjusted EBITDA Strong results driven by strength in construction markets and favorable cost environment. Q1 2017 Q1 2016 Q1 2017 Q1 2016 Q1 2017 Q1 2016 +2.4% +570 bps +33.7% (USD, in millions) (USD, in millions) $349 $54 $72 $19 $5 $3 Revenue Adju
Slide 6: Q1 Performance Highlights
Q1 Performance Highlights Domestic sales up 5.0% YoY driven primarily by continued strength in Allied Products & HP Domestic construction markets overall increased high single digits Early start to planting season caused weaker-than-expected performance in agriculture Revenue Q1 2017 Domestic Perfor
Slide 7: Domestic End Market Performance
Q1 2016 Q1 2017 Q1 2017 Domestic End Market Performance Non-Residential Infrastructure Residential Agriculture Solid growth in core construction markets driven by strong conversion. +11% +1% +7% (16%) Pipe +10% Allied Products +15% Retail (5%) Subdivision construction +8% Pipe +7% Allied Products +6
Slide 8: Free Cash Flow Performance
Three months ended June 30, 2015 Three months ended June 30, 2016 Free Cash Flow¹ Free Cash Flow Performance % of Sales 2.7% 3.5% ²Inventory, Accounts Receivable, Accounts Payable All figures in USD, mm 8 Working Capital² CapEx Net Debt³ $12 $13 $507 $446 $379 $338 Q1 2017 Q1 2016 Change Adjusted EB
Slide 9: Capital Structure and Deployment Priorities
Capital Structure and Deployment Priorities Cash and Leverage Cash Flow from Operations Sources Uses Top priorities for FY2017 include: completion of new manufacturing facility in Harrisonville, MO to serve a growing market, expanding HP production capacity as well as non-virgin material initiatives
Slide 10: FY2017 Financial Outlook
FY2017 Financial Outlook Key Metric Previous Guidance* Current Guidance Comments Net Sales (in Billions) $1,330 - $1,380 $1,270 - $1,310 Flat compared to FY2016 Adj. EBITDA (in Millions) $205 - $230 $200 - $225 $5M change on low and high end of range Adj. EBITDA Margin 15.3% - 16.7% 15.7% - 17.2% +4
Slide 11: Fiscal Year 2017 Market Outlook
Market Previous Outlook* Current Outlook Comments Domestic Construction End Markets ADS anticipates mid-single digit growth in domestic construction markets Agriculture End Market Softness expected to continue throughout FY2017 International End Market Continued weakness in Mexico, Canada expected t
Slide 12: Filings Update
Filings Update Q1 FY17 Form 10-Q to be filed by end of October 2016. Q2 FY17 Form 10-Q expected between late November and early December 2016. Q3 FY17 Form 10-Q expected to be timely filed by due date of February 9, 2017. 12
Slide 13: Q&A Session
Q&A Session
Slide 14: Closing Remarks
Closing Remarks Solid net sales growth in domestic construction markets, partially offset by softness in agriculture and international. 1 2 3 4 Underlying fundamentals of the business remain strong with significant opportunity ahead to continue driving above-market growth. Favorable adjusted EBITDA
Slide 15: Appendix
Appendix
Slide 16: 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 (Amounts in thousands) Fiscal Quarter Ended June 30 2016 2015 N
Slide 17: Free Cash Flow Reconciliation
Free Cash Flow Reconciliation Fiscal Quarter Ended June 30 (Amounts in thousands) 2016 2015 Cash flow from operating activities $-,132 $,-18,142 Capital Expenditures ,-12,595 ,-11,535 Free cash flow $,-12,727 $,-29,677
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