Advanced Drainage Systems Q4 2025 Earnings Report

Advanced Drainage Systems EPS Results

• Actual EPS: $1.03
• Consensus EPS: $1.09
• Beat/Miss: Missed by -$0.06
• One Year Ago EPS: $1.23

Advanced Drainage Systems Revenue Results

• Actual Revenue: $615.76 million
• Expected Revenue: $653.22 million
• Beat/Miss: Missed by -$37.46 million
• YoY Revenue Growth: -5.80%

Advanced Drainage Systems Announcement Details

• Quarter: Q4 2025
• Date: 5/15/2025
• Time: Before Market Opens
• Conference Call Date: Thursday, May 15, 2025
• Conference Call Time: 10:00AM ET

Advanced Drainage Systems (NYSE:WMS) designs, manufactures, and markets thermoplastic corrugated pipes and related water management products in North America and internationally. The company operates through Pipe, International, Infiltrator, and Allied Products & Other segments. It offers single, double, and triple wall corrugated polypropylene and polyethylene pipes; plastic leachfield chambers and systems; EZflow synthetic aggregate bundles; wastewater purification through mechanical aeration wastewater for residential and commercial systems; septic tanks and accessories; combined treatment and dispersal systems, including advanced enviro-septic and advanced treatment leachfield systems; and allied products, including storm retention/detention and septic chambers, polyvinyl chloride drainage structures, fittings, and water quality filters and separators. The company also purchases and distributes construction fabrics and other geosynthetic products for soil stabilization, reinforcement, filtration, separation, erosion control, and sub-surface drainage, as well as drainage grates and other products. In addition, it provides PVC hubs, rubber sleeves, and stainless-steel bands. The company offers its products for non-residential, residential, agriculture, and infrastructure applications through a network of distribution centers. Advanced Drainage Systems, Inc. incorporated in 1966 and is headquartered in Hilliard, Ohio.

Advanced Drainage Systems Q4 2025 Earnings Call Transcript

Key Takeaways

• Advantage reported FY25 net sales of $2.9 billion, up 1% year-on-year, with domestic construction sales growing 3% thanks to strong material conversion and double-digit gains in Florida and Texas.
• The company achieved a 30.6% adjusted EBITDA margin—its second-highest ever—driven by higher-margin segments, with Infiltrator and Allied Products now comprising 44% of revenue and up 53% organically.
• Over the past decade ADS has transformed from a PVC pipe maker into a diversified water-management solutions provider, growing Allied Products at a 10% CAGR, increasing residential land development exposure at an 18% CAGR, and boosting margins through the Infiltrator acquisition.
• ADS generated $581 million in operating cash flow, maintained a conservative 1.1x net leverage ratio, raised its dividend 13% to $0.72, and remains opportunistic on M&A—recently acquiring Orenco and River Valley Pipe.
• For FY26 the company guides $2.825 billion to $2.975 billion in revenue and $850 million to $910 million in adjusted EBITDA, with volumes up low single digits, pricing down low single digits, and margins in the 30.1%–30.6% range.

Presentation

[Operator]

Good morning, ladies and gentlemen, and welcome to the Advantage Drainage Systems Fourth Quarter of Fiscal Year twenty twenty five Results Conference Call. My name is Tamika, and I am your operator for today's call. At this time, all participants are in a listen only mode. Later, we will conduct a question and answer session. I would now like to turn the presentation over to your host for today's call, Michael Higgins, Vice President of Investor Relations and Corporate Strategy.

[Operator]

Please go ahead, sir.

[Michael Higgins, Vice President of Corporate Strategy and Investor Relations at Advanced Drainage Systems]

Thank you. Good morning, everyone. I'm here with Scott Harbour, our President and CEO and Scott Cottrell, our CFO and Craig Taylor, Executive Vice President of ADS and President of Infiltrator. I would also like to remind you that we will discuss forward looking statements. Actual results may differ materially from those forward looking statements because of various factors, including those discussed in our press release and the risk factors identified in our Form 10 ks filed with the SEC.

[Michael Higgins, Vice President of Corporate Strategy and Investor Relations at Advanced Drainage Systems]

While we may not take forward looking statements in the future, we disclaim any obligation to do so. You should not place undue reliance on these forward looking statements, all of which speak only as of today. Lastly, the press release we issued this morning is posted on the Investor Relations section of our website. A copy of the release has also been included in an eight ks submitted to the SEC. We will make a replay of this conference call available via webcast on the company website.

[Michael Higgins, Vice President of Corporate Strategy and Investor Relations at Advanced Drainage Systems]

With that, I'll now turn the call over to Scott Barbour.

[Scott Barbour, President and CEO at Advanced Drainage Systems]

Thank you, Mike, and good morning, everyone. Thank you all for joining us on today's call. We concluded fiscal twenty twenty five with net sales of $2,900,000,000 an increase of 1% over the prior year. Importantly, domestic construction market sales increased 3% as we continue to drive above market performance through our material conversion strategy in the storm water and on-site wastewater market.

[Scott Barbour, President and CEO at Advanced Drainage Systems]

We saw strong growth in places like Florida with double digit growth in pipe, allied products and infiltrator products and in Texas with double digit growth in infiltrator products as well as growth in pipe and the nonresidential market. From a product standpoint, water quality products increased double digits as did the Coltac retentiondetention chambers that we acquired in 2022. The tank and active treatment product at Hempiltrator each grew double digits also and Craig Taylor will talk about those here in a few minutes. Moving to profitability. This year's 30.6% adjusted EBITDA margin marks the second most profitable year in the company's history, down modestly off peak in a year when we take headwinds and pricing and material costs in addition to a challenging economic backdrop that impacted demand.

[Scott Barbour, President and CEO at Advanced Drainage Systems]

The resiliency demonstrated by this year's profitability is partially due to our strategy to grow the more profitable segments, Infiltrator and Allied Products, to be a higher mix of overall sales. Organic sales in these segments increased 53% respectively and the On-site Wastewater and allied products now represent a collective 44% of revenue. The evolution of ADS' product mix is one of the topics we intended to discuss at our Investor Day originally planned for this upcoming June. We have a lot of exciting things to highlight about our future at both Infiltrator and ADS around growth, innovation and the customer experience. However, right now, the industry is highly dynamic and as we wait to see how the construction economy unfolds with the current economic uncertainty.

[Scott Barbour, President and CEO at Advanced Drainage Systems]

While the current dynamics play out, I didn't think that the audience is going to be the most receptive to a major Investor Day talking about how things look over the next three years. So I think that there'll be a better opportunity for that type of discussion later in the year when we have a much better picture of what this three year outlook will look like. Therefore, we are going to push the Investor Day and we'll be in touch with a new day that will be sometime later this year. Now I want to turn to slide five, which highlights this journey that ADS has been over the past ten years. But if you move from left to right from FY 2016 to FY 2025, we have strategically diversified the product, the geography and the end market mix to become a higher margin more profitable business.

[Scott Barbour, President and CEO at Advanced Drainage Systems]

We focused on driving growth in our higher margin Allied Products, which grew at a 10% CAGR over this time period, outpacing the core pipe business. We deepened and broadened our exposure to the residential market through both our pipe business and infiltrator products. Our exposure to the residential land development has grown at an 18% CAGR over this time period, driven by a focus on building relationships with large national homebuilders and pursuing approvals and engineering acceptance in some of the fastest growing residential areas, primarily the Southeast. We deployed incremental resources around that over this time period and we think that paid off very well for the company. This focus on residential was complemented by the acquisition of Infiltrator, which increased our residential exposure to 36% of their overall company, again, accelerating our overall growth and enhancing the margin profile of the company.

[Scott Barbour, President and CEO at Advanced Drainage Systems]

This diversification is incredibly important to our go forward strategy. It increases the profit resilience of the company. It supports ongoing margin expansion and it enables us to pursue projects across nearly all facets of the water management we participate in. We have evolved from simply a pipe manufacturing company in FY twenty sixteen to a broader water management solutions provider and I think our profitability is reflected in that and we're really pleased with this diversification growth and the leadership we have in each one of these segments. I'm going to move to slide six.

[Scott Barbour, President and CEO at Advanced Drainage Systems]

This diversification has expanded our total market opportunity by about $10,000,000,000 over this time frame. And we have a very nice addressable market. And then we have a long runway to continue executing the conversion strategy across these markets and all of our product lines. In the storm water market, where ADS is the clear market leader, plastic pipe is about 40% of that $5,500,000,000 market. In Allied Products, again, where we have market leading product lines and participation, we're probably around 10% of that.

[Scott Barbour, President and CEO at Advanced Drainage Systems]

And in the on-site wastewater, infiltrators share is about one third of the market. So with each of those categories, we feel we have a long way to go. And we'll drive that through our tried and true of getting approvals, keeping good teams in the field and driving this through our distribution. There are also some secular tailwinds that are going to drive these markets. We've talked about these in the past.

[Scott Barbour, President and CEO at Advanced Drainage Systems]

It's really the underbuilt U. S. Water infrastructure, this increasing frequency and intensity of large scale storm events and residential underbuild that is highlighted many times when we talk with you. We've mentioned these studies in the past. The one we really like is from the American Society of Civil Engineers.

[Scott Barbour, President and CEO at Advanced Drainage Systems]

They did their 2025 infrastructure report card and water infrastructure has a greater D, which simply says the existing infrastructure is in poor to fair condition and mostly below current standards. This is a good trend for us. I mean, this will continue to pace investment in the water management infrastructure across a broad array of products and geographies. So over the long term, we will continue to have these secular growth tailwinds. We'll drive that growth through a good current portfolio of offerings, continue new product introductions, acquisitions, and we'll drive that conversion and share of wallet that we or the entire opportunity on these other projects.

[Scott Barbour, President and CEO at Advanced Drainage Systems]

And I'll turn to the next page, and this is how we drive that share of wallet. This is really what we think of as our value proposition. And it starts at the top of this chart with a best in class portfolio of water management products. We are the only company that could deliver complete water management solutions on a national or North American scale that are safer, more sustainable, faster to install and in a lower installation cost. It is a superior line of products we have at the top of this page.

[Scott Barbour, President and CEO at Advanced Drainage Systems]

And for many years, we have run this market share model. It's a proven go to market share market strategy of approvals, acceptance, coverage, win rate is supported by the 300 professionals in the field, which are the envy of our industry in terms of field sales capability and technical know how in the field. So we're very proud of that product line and our ability to kind of sell those product lines with our distributors in the field. But I think there's more to it than that. And it's that bottom tier of this chart is that balance sheet.

[Scott Barbour, President and CEO at Advanced Drainage Systems]

As we've improved the profitability and cash flow profile of the company, we can reinvest at an appropriate pace with the right returns in new capacity in the critical geographies, new products, new capabilities for engineering, innovation and increasingly investments around customer service and design tools. Over these last several years, we have built some industry leading design tools where customers can design around our products, select our products, we make these available to them in many different ways digitally. And it is really a superior service or asset of our company that I think we don't talk about enough. In addition, the kind of leading service we've always had is our fleet. We deliver over 70% of the products we sell on the ADS side and we've refreshed that fleet and modernized it and have really a great set of assets out there working for our customers.

[Scott Barbour, President and CEO at Advanced Drainage Systems]

I mentioned this modernizing our customer experience. We've invested in that heavily over the last year. We needed to do that. Our delivered performance is now over 90%. And these tools are rolling out and giving differentiated market leading information and availability information for our customers.

[Scott Barbour, President and CEO at Advanced Drainage Systems]

If you all know, we opened our engineering and technology center about nine months ago. It is by far the most advanced stormwater facility in the world, which enables us to develop and launch new products faster, while also working on our manufacturing processes and safety and efficiency. We really have everything we need to do around that stormwater business contained in this facility from an engineering and product management standpoint. And we are already in the first nine months have some great examples of accelerated in the market products and materials that we benefited from this new investment that we have. So when you stack all three elements of this chart together, the scale, the best in class products, the go to market strategy, our ability to reinvest.

[Scott Barbour, President and CEO at Advanced Drainage Systems]

I think it's really clear to me what hands you would rather play. It is that company that we have now and move into FY 2026 versus the company that we had in FY 2016. And I would argue versus any company that we're competing against on daily basis. So I'm very proud of the team for the performance delivered in a really challenging year. We got a lot of things done in spite of a very difficult demand environment and a difficult pricing and materials market.

[Scott Barbour, President and CEO at Advanced Drainage Systems]

We continue to make progress in safety. We passed a milestone this year in safety performance that we're very proud of. So lots of good things to talk about and we'll kind of gather those along with our three year plan to show at the Investor Day that we'll do a little bit later this year. Doctor. Troll is going to give you an outlook on FY 2016 in a minute, and we feel confident in our ability to achieve above market growth in our core domestic construction markets and maintain attractive profitability even if it is still a bit of a challenging demand environment.

[Scott Barbour, President and CEO at Advanced Drainage Systems]

First, I'm going to turn this over to Craig Taylor, the President of our Infiltrator business to review their fiscal twenty twenty five performance and talk a little bit about the great year they had there.

[Craig Taylor, Executive VP - Infiltrator Water Technologies at Advanced Drainage Systems]

Thanks, Pat, and good morning. I'm happy to be here today. Fiscal twenty twenty five was another strong year at InfraCare. We reported five sixteen million dollars in sales, an increase of 15% over prior year including $46,000,000 in Eureco sales.

[Craig Taylor, Executive VP - Infiltrator Water Technologies at Advanced Drainage Systems]

On an organic basis, sales increased 5% driven by double digit growth in both septic tanks and advanced treatment products. Tank sales increased 12%, driven by material conversion and new product introductions. Just like ADS' material conversion strategy, infiltrator plastic tanks are driving market conversion from the traditional concrete tank. In fiscal year twenty twenty five, we launched two new products to address market needs and to provide contractors with additional installation flexibility. Organic Advanced Treatment sales increased 33% compared to prior year, primarily driven by market growth as well as the introduction of the EcoPod NX.

[Craig Taylor, Executive VP - Infiltrator Water Technologies at Advanced Drainage Systems]

This product is the next generation of advanced wastewater treatment technology designed to meet new regulations that require higher levels of nitrogen reduction to protect watersheds and the environment. Adjusted gross margins increased 50 basis points to 53.6%. This includes the impact of the Orenco acquisition. Organically, we expanded adjusted gross margin by two fifty basis points, primarily driven by favorable pricing, manufacturing efficiencies and material costs. Infiltrator's profitability today demonstrates the benefit from capital investments made in machinery and equipment over the last six years, most significantly the highly automated advanced manufacturing facility opened in 2020.

[Craig Taylor, Executive VP - Infiltrator Water Technologies at Advanced Drainage Systems]

Since opening, Singletrader's profitability has improved by 1,100 basis points. When the market slowed two years ago, we were able to utilize the facility while we took older equipment offline for refurbishment. As we ramped back up, we achieved a 15% improvement in productivity and efficiency. In addition, our business continues to be very innovative. New products we have introduced in the past three years account for over 20% of our revenue.

[Craig Taylor, Executive VP - Infiltrator Water Technologies at Advanced Drainage Systems]

As we look at Oranco, we see an opportunity to grow revenue and improve the processes and efficiency of our manufacturing. We are targeting margin improvement of 1,000 basis points over the next three to five years, and we are excited about the additional breadth this acquisition brings to our product line. The acquisition also gives us access to new applications. For example, the Primos product assists homeowners converting to centralized wastewater systems by making the process lower cost and less disruptive. In addition, Arranco's advanced treatment product increases our exposure to the commercial systems where the Infiltrator products have a strong foothold in residential systems.

[Craig Taylor, Executive VP - Infiltrator Water Technologies at Advanced Drainage Systems]

All in, we are very proud of this year's accomplishment and excited about the future growth at Infiltrator as we continue to drive material conversion and capitalize on growth in advanced treatment market. Now I'll turn the call over to Scott to Charles.

[Scott Cottrill, Executive VP, CFO & Secretary at Advanced Drainage Systems]

Thanks, Craig. In the fourth quarter, net sales decreased 6% overall as demand was impacted by higher interest rates, economic uncertainty and unfavorable weather conditions. Recall, last year we experienced favorable weather conditions that allowed for an early start to the spring selling season in both construction and agriculture.

[Scott Cottrill, Executive VP, CFO & Secretary at Advanced Drainage Systems]

From a timing perspective, construction activity and agriculture accelerated by about six weeks this year compared to last year. Importantly, price cost remained in line with expectations and manufacturing and transportation costs were both favorable in the period. On slide 10, we present our free cash flow and liquidity. As most of you know, one of the strategic advantages of the business is the consistency and quality of our cash flow generation. Even in a choppy and uncertain macro environment, we generated $581,000,000 of cash from operations during fiscal twenty twenty five.

[Scott Cottrill, Executive VP, CFO & Secretary at Advanced Drainage Systems]

The strong cash generation of the business gives us the flexibility to invest in production, capacity and innovation to grow our position in the highly attractive stormwater and on-site wastewater markets. That's an envious position to be in and one we intend to optimize to continue driving long term shareholder value. Capital spending increased 15 to $212,000,000 in fiscal twenty twenty five as we continue to invest in improving customer service through investments in technology and better order management processes, accelerating innovation in new products and new technologies that add to our stormwater and wastewater solutions packages increasing our production capacity in certain regions and in certain products that have superior demand, profitability and growth characteristics debottlenecking and expanding our recycling operations, such as our recycling facility in Cordele, Georgia as well as our material science and blending capabilities and finally, increasing the safety, productivity and efficiency of our manufacturing network. In addition, we upgraded our transportation assets, including refreshing the fleet and implementing the latest telematics and safety technology to improve superior delivery and customer service. Turning to capital allocation.

[Scott Cottrill, Executive VP, CFO & Secretary at Advanced Drainage Systems]

Our priorities remain unchanged and rooted in our commitment to drive growth and create long term shareholder value. First and foremost, we will continue to invest strategically in the core business for all of the reasons I just mentioned. A close second, the pursuit of acquisitions to grow our product offering and leadership in the stormwater and on-site wastewater markets. That said, we recently announced the acquisition of River Valley Pipe, a manufacturer of corrugated plastic pipe products serving the agricultural market in the Midwest. We will continue to focus on opportunities to expand our product offering and capacity.

[Scott Cottrill, Executive VP, CFO & Secretary at Advanced Drainage Systems]

Our balance sheet and free cash flow profile gives us the ability to move decisively when the right opportunities emerge without needing to dilute shareholders or take on excessive leverage. We remain opportunistic in evaluating M and A that enhances our portfolio and aligns with our long term strategies. We've also maintained a balance sheet to capital deployment or I'm sorry, a balanced approach to capital deployment, returning 121,000,000 in fiscal twenty twenty five to shareholders through dividends and share repurchases. We have deliberately built and maintained a fortress balance sheet that provides us with the flexibility to navigate cycles as well as promptly act on opportunities. We closed the year with 1,100,000,000 in liquidity and a net leverage of 1.1 times.

[Scott Cottrill, Executive VP, CFO & Secretary at Advanced Drainage Systems]

In addition, today we announced a 13% increase in our annual dividend to $0.72 per share. Moving on to slide 11. We present our fiscal twenty twenty six guidance ranges. Based on our order book, backlog and market trends, we expect revenues to be in the range of $2,825,000,000 and $2,975,000,000 and adjusted EBITDA to be in the range of $850,000,000 to $910,000,000 These ranges result in an adjusted EBITDA margin of 30.1% to 30.6%, down 50 basis points to flat compared to this year's 30.6% margin. It is important to note that we do not expect a material impact from tariffs.

[Scott Cottrill, Executive VP, CFO & Secretary at Advanced Drainage Systems]

Today's guidance reflects the end market outlook on slide 12. We do not expect the nonresidential or residential end markets to accelerate as both are under pressure from higher interest rates and economic uncertainty. We expect the nonresidential end markets to be flat to down low single digits and the residential markets to be down low to mid single digits. The infrastructure market continues to benefit from IIJA funds and we expect that market to grow low single digits next year. Finally, both the agriculture and international end markets are expected to be down double digits in the year.

[Scott Cottrill, Executive VP, CFO & Secretary at Advanced Drainage Systems]

Finally, the fiscal twenty twenty six guidance at the midpoint includes the following key assumptions. For revenue, volume up low single digits and pricing down low single digits for profitability, price cost should be neutral for the year as we expect lower material costs year over year to offset the impact of pricing I just noted. Manufacturing costs will be unfavorable due to fixed cost absorption primarily in the first quarter. The higher costs are due to the lower production volume over the winter months due to the slower demand experienced in Q4 as well as expected in fiscal twenty twenty six. Transportation costs are expected to be favorable year over year due to improved efficiency and route planning and SG and A costs are expected to be 14% of revenue for the year.

[Scott Cottrill, Executive VP, CFO & Secretary at Advanced Drainage Systems]

We will remain focused on executing our long term strategy to drive consistent long term growth, margin expansion and free cash flow generation in the large and attractive stormwater and on-site wastewater markets, the significant conversion opportunity. With that, I will open the line for questions.

[Operator]

Your first question is from the line of Mike Halloran with Baird.

[Michael Halloran, Senior Research Analyst - Associate Director of Research at Robert W. Baird & Co]

First, Scott, I'd like to clarify the comment you just made there on the price cost side of things and pricing side of things. Is pricing how is pricing tracking sequentially? Have you seen any incremental pressure embedded in that pricing comment? Are there any mix components to what that pricing looks like? I certainly heard that you expect to be pricecost neutral as we work through the year because of those dynamics.

[Michael Halloran, Senior Research Analyst - Associate Director of Research at Robert W. Baird & Co]

Just want to understand what's happening on the pricing side of things.

[Scott Cottrill, Executive VP, CFO & Secretary at Advanced Drainage Systems]

Yes. And Michael, so largely, basically sequentially level as we've talked about since Q2 of this past year. So most of what you see in the comment related to price being down low single digits is relative to it doesn't lap the pricing impact until Q2 of this fiscal year. So most of that relates to just the comments that we'll see continued unfavorability, especially in Q1 as we work through the year.

[Scott Cottrill, Executive VP, CFO & Secretary at Advanced Drainage Systems]

But then sequentially throughout the year relatively flat on pricing. Okay.

[Michael Halloran, Senior Research Analyst - Associate Director of Research at Robert W. Baird & Co]

Okay. That makes sense. So you're basically saying first quarter is where the pressure point is and then kind of static year over year once you lap that comp.

[Michael Halloran, Senior Research Analyst - Associate Director of Research at Robert W. Baird & Co]

Okay. That helps. And then the demand side of the equation modestly positive volumes. I mean, it seems like you're embedding some sort of share gain potential within the context of that based on the end market commentary that you have on Slide 12. Maybe just talk about where you are expecting the shared gains to come in and what are the catalysts for that on an insular level by products, end markets, however you want to go after that?

[Scott Barbour, President and CEO at Advanced Drainage Systems]

So Mike, this is Scott B. How are doing? Yes, there are share gains through conversion from traditional materials to plastic pipe as there usually are in our guidance there. Those are primarily the HP or polypropylene products and primarily in the kind of what I would call the larger diameter. And we've been gaining share there.

[Scott Barbour, President and CEO at Advanced Drainage Systems]

In the comment I mean in in the discussion, we mentioned the residential segment, where we have clearly gained share and continue to gain share there through our sales efforts, the superiority of our value proposition for those that type of development or that type of project, kind of that early land development. And yes, we see that market can have different levels of growth and uncertainty, but we've been growing pretty steadily through that and started from a low point.

[Operator]

Your next question is from the line of Matthew Bouley with Barclays.

[Matthew Bouley, Senior Equity Research Analyst at Barclays]

Good morning, everyone. Thank you for taking the questions. Just wanted to ask first about the cadence for the year thinking about the top line. So a lot of great color there around some of the margin impacts in Q1. But just thinking about revenue, I guess if I look at the fourth quarter organic growth was maybe down 3% or so.

[Matthew Bouley, Senior Equity Research Analyst at Barclays]

Is Q1 shaping up similar to Q4 plus or minus? And kind of what I'm getting at is what's the implication to year over year growth as you think about the second half of the year within your guide? Thank you.

[Scott Cottrill, Executive VP, CFO & Secretary at Advanced Drainage Systems]

Yes. Don't want be careful to get too much Matt into the quarters, but I will highlight we do talk about 1H and 2H. And typically the business will see 55% to 60% of the revenue in the first half of the year and 40% to 45% obviously in the second half. We expect to see that same dynamic this year. I think in the first quarter on a year over year basis, obviously there is a little bit of upside opportunity given that some of that pull ahead that we saw last year that we mentioned.

[Scott Cottrill, Executive VP, CFO & Secretary at Advanced Drainage Systems]

So a year over year comp that's a little bit easier in the first quarter. But expect 55% to 60% of the revenue in the first half consistent with what we normally generate and drive.

[Scott Barbour, President and CEO at Advanced Drainage Systems]

You've got the Aurento impact in the first quarter.

[Matthew Bouley, Senior Equity Research Analyst at Barclays]

Okay. Got it. Great. That's helpful. Thanks for that Scott.

[Matthew Bouley, Senior Equity Research Analyst at Barclays]

And then I wanted to maybe just step back. The Investor Day, I just wanted to ask a little bit more about the, I guess, the postponement there, Because I certainly hear you around the uncertain cycle, but obviously you have a lot of great sort of non cycle topics to point to as you went through in your prepared remarks. And you obviously just guided to 2026. So presumably you have a starting point to think about a three year guide. So I guess what I'm asking is are you just seeing the end market volatility to such a degree that you sort of lost the comfort, I guess, around putting out a longer term outlook?

[Matthew Bouley, Senior Equity Research Analyst at Barclays]

Or yes, I'm just trying to understand how these current market conditions are giving you that sort of pause there. Thank you.

[Scott Barbour, President and CEO at Advanced Drainage Systems]

This is Scott, Scott Barbour. Good question. And I think it comes down to kind of two things, Matt. One was just getting FY 2026 kind of nailed down. Yes, there was a lot going on over the last three months to try to nail down that.

[Scott Barbour, President and CEO at Advanced Drainage Systems]

And then every time we got into what kind of assumptions to make on market growth and these other things to really nail down a three year plan, we couldn't we just didn't feel comfortable nailing down a three year plan underneath those kind of conditions. I mean, I know you all will hold me as highly accountable to that plan. And I didn't want to have to give you such a big range, it didn't make sense. So that's why we postponed it. You're right.

[Scott Barbour, President and CEO at Advanced Drainage Systems]

We have a lot of great things to talk about. But I felt like without a really solid economic three year plan in front of you, we wouldn't accomplish what we wanted to accomplish with you. And I didn't want to waste your time on that. So I'd rather give you a really solid plan, take an extra couple of months to get it done. And that was my logic on that.

[Operator]

Your next question is from Bryan Blair with Oppenheimer.

[Bryan Blair, Managing Director & Senior Research Analyst at Oppenheimer & Co. Inc.]

Thanks. Good morning, guys.

[Bryan Blair, Managing Director & Senior Research Analyst at Oppenheimer & Co. Inc.]

Want to circle

[Bryan Blair, Managing Director & Senior Research Analyst at Oppenheimer & Co. Inc.]

back to order rates, understand the framework for the full year guide and appreciate the other moving parts there and how you're contemplating end market dynamics. Just curious what you're seeing on a run rate basis. You mentioned that the orders are positive year to date. Just curious how end markets are trending relative to the guidance framework that you have and maybe speak to potential catalysts for first risk as we think about the full year progression?

[Scott Barbour, President and CEO at Advanced Drainage Systems]

Okay. This is Scott B. Order rates are trending positive and definitely support the guidance that we gave in the first half, second half that Scott mentioned a bit earlier. I think what we are really very focused on right now is we've mentioned there was a because of seasonality and favorable weather last year, unfavorable weather this year, there was clearly a shift from our fourth to our first that's going on right now. Now we think even as you strip that out, the market is growing.

[Scott Barbour, President and CEO at Advanced Drainage Systems]

But we would just like to get through that in April, May, June to really understand that impact. And as you can appreciate, particularly on the infiltrator side, as the season starts, there's an ordering. And how those reorder patterns occur really beginning in the June 1, I know Craig has got his eye on that very, very, very much, particularly on those core leach field products that we have, where we have really great visibility into the market. So we need to get to that point, Brian, that reorder point to make sure that kind of shifting the seasonality isn't head fakiness or I think we really want to comment deeply about the strength of the market.

[Bryan Blair, Managing Director & Senior Research Analyst at Oppenheimer & Co. Inc.]

Okay. Understood. I appreciate that detail. And I guess perhaps offer a little more of an update on the Renko integration and confirm that I hear that the target is 1,000 basis points margin expansion? And then perhaps touch on strategic fit and expected financial contribution of River Valley Pipe?

[Bryan Blair, Managing Director & Senior Research Analyst at Oppenheimer & Co. Inc.]

Thank you.

[Scott Barbour, President and CEO at Advanced Drainage Systems]

So Craig, why don't you talk about Arinko? He did in fact say that big of a number.

[Craig Taylor, Executive VP - Infiltrator Water Technologies at Advanced Drainage Systems]

Yes. So the margin expansion is really the growth that I had talked about, growing the top line, merging the commercial business together with our business and then using our distribution channels in growing the GOP, which grows our on-site product. So really focused on the growth opportunity there, bringing some of our progress of our manufacturing efficiencies into that operations there is going to help that margin expansion over the next couple of years.

[Craig Taylor, Executive VP - Infiltrator Water Technologies at Advanced Drainage Systems]

So that's a three to five

[Craig Taylor, Executive VP - Infiltrator Water Technologies at Advanced Drainage Systems]

year outlook for that expansion.

[Scott Barbour, President and CEO at Advanced Drainage Systems]

Doug, I think the infiltrator guys are really talented engineering and manufacturing people. And I think they're out there on a rotating basis in Oregon working through a very good plan. And as Craig said, they've done a lot of, I would say, commercial integration already, opened up some new distribution and already kind of starting to see some benefits from those things. And it is an aggressive plan and you did hear it right, but we're really encouraged by this first seven months of ownership with the team out there in Oregon and Christie.

[Scott Barbour, President and CEO at Advanced Drainage Systems]

And then River Valley. So River Valley, we always wanted to be bigger and more competitive in Illinois Illinois and Iowa. River Valley has a couple of facilities one in each of those states. So this was a chance to gain market share and give us future optionality on our footprints. And honestly, we want when assets like this come up, want to own them and not have others on them.

[Scott Barbour, President and CEO at Advanced Drainage Systems]

So I think for those three regions River Valley makes a lot of sense for us and it required a nice customer list in addition to a nice product line that will be sit right alongside ours in those two geographies where we think we definitely over many years ADS has wanted to be stronger in those two states. And this opportunity came up and I wasn't going to walk by it.

[Operator]

Your next question is from the line of John Loblaw with UBS.

[John Lovallo, Senior US Homebuilding & Building Products Equity Research Analyst at UBS Group]

Good morning, guys. Thanks for taking my questions. I wanted to go back to just kind of market growth and your forecast for internal growth. It seems like on a blended basis you're expecting your end markets to be down kind of low single digits and you're guiding to roughly flat sales. If we back out of Renko and River Valley, I mean, much of this is organic sales versus kind of the inorganic portion?

[John Lovallo, Senior US Homebuilding & Building Products Equity Research Analyst at UBS Group]

I guess the point is it seems like the expectation is for only sort of modest outperformance versus the end markets this year.

[Scott Cottrill, Executive VP, CFO & Secretary at Advanced Drainage Systems]

Yes, John, it's Scott D here. You're right. I mean, when you look at the end markets, you got to also weight the end markets based on about 45% of our business is non res, 35% is res. So when you look at what we think those end markets are going to be down low to mid single digits, roughly our guide would say organically at the midpoint, we're going to be flat on the volume side of the house. So again, we think that is still a really great example of conversion and continuing that trend.

[Scott Cottrill, Executive VP, CFO & Secretary at Advanced Drainage Systems]

So that's the way we looked at it and the way we think it's going to play out based on what we know right now.

[Matthew Bouley, Senior Equity Research Analyst at Barclays]

Okay. Got you. And then for the 2026 EBITDA margin of 30.3, I mean, it's down roughly 30 basis points year over year on sort of flattish sales. I guess a similar question. I mean, how much of this decline is organic versus inorganic?

[Matthew Bouley, Senior Equity Research Analyst at Barclays]

And on the organic piece, is that predominantly focused on the first quarter where that price cost is going to be unfavorable?

[Scott Cottrill, Executive VP, CFO & Secretary at Advanced Drainage Systems]

Yes. I would say right now, you got to remember the absorption impact we talked about that's coming in the first quarter. So roughly, when you look at kind of what we think our RINCO is going to be about 50 bps dilutive to what we're going to do organically versus about 30 bps what it was in the first in twenty five. So I think basically relatively flat year over year organically is the way I think about it with a little bit more dilution from Moranco having them for the full year at their lower margin profile.

[Operator]

Your next question is from Garik Shmois with Loop Capital Partners.

[Garik Shmois, Managing Director at Loop Capital Markets LLC]

Hi, thanks. Just want to follow-up on the pricing piece. Recognizing it's been stable for several quarters, but just with the market expected to again be down, just any additional maybe hand holding as to your level of confidence that pricing will remain stable from this point forward in the softer market?

[Scott Barbour, President and CEO at Advanced Drainage Systems]

Yes. I think that we the way we manage this on a very daily basis and looking at participation, competitor, the nature of the job, the nature of the customer and stuff.

[Scott Barbour, President and CEO at Advanced Drainage Systems]

We've been doing that for the last four quarters in a lot of detail and then trying to find opportunities for pricing advancement. We like that process. We feel that that gives us good visibility. It's really on the pipe piece of the business. So it's and it's contained to certain geographies.

[Scott Barbour, President and CEO at Advanced Drainage Systems]

So I think we feel pretty confident that this process we have, the managers we have looking at that, the data we can look at is going to continue to be a good tool for us to manage that price and participation. And we feel good about both right now. We've always had competitors. We're always going to have competitors. And this is just a daily fact of life.

[Scott Cottrill, Executive VP, CFO & Secretary at Advanced Drainage Systems]

Derek, the only thing I'll add to that is there are examples where we do have pricing that will be increasing, whether it's in certain regions, products or end markets. So it's always a mix and it's a balance thereof. So when we you've got the lapping, we already talked about as well that will impact year over year. So as we blend all that together to come out with that kind of vision as to what we think it will be on a relatively flat basis. But you got to factor all those pieces in there when you look at it.

[Garik Shmois, Managing Director at Loop Capital Markets LLC]

Okay. No, that's helpful. And then just follow-up is just on capital allocation and you're sitting at a pretty comfortable leverage ratio and you have a slide in the deck that does talk to your capabilities and your balance sheet is quite attractive to accelerate your investment. So is there a scenario here? And I know you've made two acquisitions over the last several quarters, but is there an opportunity for you to ramp that up even further or go larger if the opportunity presents itself?

[Scott Cottrill, Executive VP, CFO & Secretary at Advanced Drainage Systems]

Yes. Mean our growth algorithm is very compelling at growing above our end markets via the conversion story, the innovation and new products and then putting this balance sheet to work through acquisitions to get incremental growth on top of that. We like what we've been able to do over the last twelve, eighteen months going all the way back to fiscal twenty twenty for the Infiltrator acquisition that's been a grand plan, not even all run. So we look at that being at 1.1 times levered. We have a lot of opportunity to put this balance sheet to work.

[Scott Cottrill, Executive VP, CFO & Secretary at Advanced Drainage Systems]

And we're actively looking at all options, including the engineering technology center and innovation and what we can do there with new products. So again, very excited about that long term shareholder value creation and acquisitions will definitely be part of that.

[Operator]

Your next question is from the line of Jeff Hammond with KeyBanc Capital Markets.

[Jeffrey Hammond, Managing Director at KeyBanc Capital Markets]

Hey, good morning, guys. Hey, Jeff. Good morning.

[Jeffrey Hammond, Managing Director at KeyBanc Capital Markets]

Just it sounds like the near term orders are good, but I'm just wondering if you look a little further pipeline, one, what are you seeing on residential land development trends? And two, just any real time signs of delays deferrals on construction projects just given the tariff noise and uncertainty and higher costs, etcetera?

[Scott Barbour, President and CEO at Advanced Drainage Systems]

So, it's Todd Harbour here, Jeff. So, we're not really impacted by tariffs, very minimal impact for us as a company. We do worry about demand being impacted and construction projects being pushed pushed and pulled. We haven't seen a over the last sixty days, we didn't see a meaningful bunch of projects coming off the board. And since last week in whatever you want to call the agreement to delay these actions with China by ninety days.

[Scott Barbour, President and CEO at Advanced Drainage Systems]

We haven't seen a bus come back on. I think people are a little their heads are a little bit sore from swiveling and being jerked around so much. So we see it what we do see is a fairly consistent pace of orders, pace of quotes that has improved over last year. It's not radically high, but it's not going down either. I mean, it's at a very modest pace.

[Scott Barbour, President and CEO at Advanced Drainage Systems]

And we anticipate that will continue here for the rest of the quarter. But I really don't know what's going to happen in the second half of the year. I mean, it's pretty hard to gauge whether in ninety days these things get resolved and everything goes back to normal or what's going to happen with interest rates. I mean, it's pretty uncertain out there. So we're going to be very conservative in our response to that and our forecasting in our guidance.

[Scott Barbour, President and CEO at Advanced Drainage Systems]

But I haven't seen anything radical in terms of change in what happens to us over these last days with these different accounts.

[Michael Higgins, Vice President of Corporate Strategy and Investor Relations at Advanced Drainage Systems]

Think if you just look at guidance, go back to February, right, when we released our earnings and everybody thought the world was going to end because of all of these tariffs and it creating a ton of uncertainty. And there's been a lot of moves since then. So move, as Scott referenced, a week or so, ten days ago with relation to China. Everybody's feeling good about themselves.

[Michael Higgins, Vice President of Corporate Strategy and Investor Relations at Advanced Drainage Systems]

But again, that can change in another sixty, ninety, one hundred and twenty days.

[Scott Barbour, President and CEO at Advanced Drainage Systems]

They didn't open their purse strings for that.

[Michael Higgins, Vice President of Corporate Strategy and Investor Relations at Advanced Drainage Systems]

Yes. So it's just really we're going to actually we feel we have a good plan and a very solid strategy and a good position in the market to execute that. And we can't control the end markets, but we can control how well we execute on that strategy of outperformance, growing alloy products that will trade faster than the pipe business and we have good price cost discipline.

[Jeffrey Hammond, Managing Director at KeyBanc Capital Markets]

Okay, great. And then just back on the capital allocation question, so to ask it a different way maybe. One, a lot of my companies are saying, hey, it's tougher to get deals done in this environment just given all the uncertainty. Wondering if you're seeing any of that? And then I think your answer to the prior question was a lot more towards growth and external growth and just how you're thinking about buybacks because you highlighted a lot of great things about the business and the market doesn't seem to be appreciating it.

[Jeffrey Hammond, Managing Director at KeyBanc Capital Markets]

And you just wanted to see when and if you want to lean in on buybacks.

[Scott Cottrill, Executive VP, CFO & Secretary at Advanced Drainage Systems]

So again, I think like we talked our priorities remain the same. It's reinvesting the business. You saw we're going to increase CapEx. We did about $212,000,000 in fiscal twenty twenty five. We're now projecting $275,000,000 in fiscal twenty twenty six.

[Scott Cottrill, Executive VP, CFO & Secretary at Advanced Drainage Systems]

So innovation to the engineering technology center, new products, new technology, new things we intend to accelerate through that process. So a lot of really core good opportunities to invest internally. Acquisitions, absolutely. There's things that are always in the funnel, things that we're looking at. And then returning excess cash to our shareholders and that balanced capital allocation approach is absolutely core for us.

[Scott Cottrill, Executive VP, CFO & Secretary at Advanced Drainage Systems]

We did 120,000,000 of that this past year through dividends and buybacks. It's continually something that we look at and we'll do that. We always look at that based on the outlook for the company, where's our working capital, our cash flow and opportunities and the macroeconomic backdrop that's coming at us in the next six, twelve, eighteen months. So it's balanced. It's a really good approach.

[Scott Cottrill, Executive VP, CFO & Secretary at Advanced Drainage Systems]

I would say the share buybacks are always something that we think about and look at as we look at the first couple of buckets that I already mentioned. So we'll continue to do that. And again, if opportunities if we generate the cash that we think and other opportunities don't avail themselves as we think they might, then yes, you should expect us to be back in the market.

[Scott Barbour, President and CEO at Advanced Drainage Systems]

I would add one thing to that, which is that we are still in a period of relative uncertainty. And we want to have a very strong balance sheet if we're ever moving into those kind of times.

[Scott Barbour, President and CEO at Advanced Drainage Systems]

But I think Scott's right. I mean, it's excess cash beyond what we see for our needs. And so we obviously see some needs out there. Yes. With an appropriate level of conservatism.

[Scott Barbour, President and CEO at Advanced Drainage Systems]

Your

[Operator]

next question is from the line of Trey Grooms with Stephens.

[Trey Grooms, Managing Director at Stephens Inc]

Hey, good morning. Thanks for taking my question. So you guys did a great job in the quarter managing SG and A. How should we be thinking about the SG and A expense in 2026? And maybe if you could talk about some of the levers you're pulling or cost outs you can tap if end markets remain subdued or maybe even decrease more than expected from here just kind of given the current level of uncertainty?

[Scott Cottrill, Executive VP, CFO & Secretary at Advanced Drainage Systems]

Sure, Trey. So obviously, you've got the impact of Moranco coming in there. So that's part one. Craig did a good job highlighting the synergy program and some of the things that we're looking at there. On the internal basis, absolutely things that we're going to continue to invest in as we look to the long term growth of the company.

[Scott Cottrill, Executive VP, CFO & Secretary at Advanced Drainage Systems]

Obviously, when the top line is not growing and at the midpoint it's flat year over year, that's tough, right, because there's certain things you need to invest in and so forth. So right now, we've got a bunch of initiatives in place, a lot of things that we're looking at related to outside spend and things that we can do there through our procurement team as well as our team here in May and with our partners. So a lot of actions in flight that we're looking at to keep that manageable, if you will. So that's what I would tell you. Right now that 14% of revenue is where it rolls up, but a lot of things in flight to mitigate such as we move through the year.

[Trey Grooms, Managing Director at Stephens Inc]

Okay, great. That's helpful. And then you mentioned just kind of geographically, if we could touch on that, strength in Florida, infiltrators strong in Texas. Any other geographic puts and takes you could talk about as we look at your footprint?

[Scott Barbour, President and CEO at Advanced Drainage Systems]

So I think, Craig, you were pretty strong in the last year across all geographies.

[Scott Barbour, President and CEO at Advanced Drainage Systems]

Both companies both in between ADS remain very focused with capacity and headcount all those kinds of things on the Southeast and the Atlantic Coast. And we haven't seen that slowdown, Craig. I mean, it does continue to be very, very good for us. Texas, we've had a very good year with Infiltrator. These new tanks, think, have done quite well there.

[Scott Barbour, President and CEO at Advanced Drainage Systems]

And we've strengthened our distribution there. And we continue to believe Texas or the ABS side, both pipe and allied products to be a good opportunity for us to increase our market share and grow. Not an easy market, it's competitive, but it continues to be a good one. Mike, can you think of any other geographies in particular? Mean, the core geographies have been going along at kind of a Yes.

[Michael Higgins, Vice President of Corporate Strategy and Investor Relations at Advanced Drainage Systems]

I would say, Trey, Scott mentioned a handful of states, Florida, Texas, Carolinas, etcetera. We talk a lot about these priority states and this was a year again where we saw it's a group of fifteen, sixteen states primarily kind of concentrated in the lower half of The U. S. Again, you saw those states grow faster than the company average. And again, as we've told you guys many times, those states, we all know them, they're growing faster than the rest of the country.

[Michael Higgins, Vice President of Corporate Strategy and Investor Relations at Advanced Drainage Systems]

Our market shares are lower in those states. So they provide really good runway for growth and they help offset some of the softness that we've seen in some of our other geographies that tend to be more mature like the Northeast, Ohio, some other places in the Midwest, etcetera. It's that focus and geographic focus on where those opportunities are where we're really seeing kind of continued consistent strength despite end markets that were quite a bit softer this past year.

[Operator]

Your next question is from Kyle Varano with Deutsche Bank.

[Collin Verron, Director at Deutsche Bank]

Good morning. Thanks for taking my question. I just wanted to dive a little bit more into the manufacturing transportation side. They were quite favorable in the first quarter in the fourth quarter here. You noted manufacturing is going to flip to a headwind in the first quarter, but transportation sounds like it's going to continue to be favorable into fiscal

[Collin Verron, Director at Deutsche Bank]

So any additional color on how we should think about sort of the manufacturing and transportation?

[Scott Barbour, President and CEO at Advanced Drainage Systems]

Yes. Colin, sure. This is Scott Barbour. And on the channel logistics, there are several things we're doing, primarily on the ABS side that are decreasing our mileage. And I would call this through some planning techniques, some different strategies we're taking around service to the market without any degradation of delivery performance and some things that Pat and Melissa are doing making sure we use the right mix of assets in the right place internal versus external.

[Scott Barbour, President and CEO at Advanced Drainage Systems]

So lots of different programs going on in logistics. We've also refreshed our fleet and brought down the average age of our fleet pretty significantly over the last eighteen months. So that's going to decrease our repair and maintenance costs and increase our miles per gallon. So the fleet is being more efficient. So I think that will continue to be a good story through the year.

[Scott Barbour, President and CEO at Advanced Drainage Systems]

And again, all things that we have invested in, done differently, intentionally set strategies about. On our manufacturing costs, in the fourth quarter, we benefited not only from better efficiency, but also we had favorable absorption earlier in the calendar year. And you might recall that either favorable or unfavorable absorption in manufacturing goes on our balance sheet, releases to the P and L about three months later. So as we had to take volume down really beginning December, December, January, February, March, because we were in good shape on our inventories and our delivery performance, we had some under absorption. And that's what's primarily going to come through and hit us in June April, May, June.

[Scott Barbour, President and CEO at Advanced Drainage Systems]

And so now we're working very hard to offset that under absorption, but kind of that's favorable in the fourth turning to unfavorable is the timing of that under absorption off the balance sheet. That said, the Infiltrator guys operating at very, very good manufacturing costs. Today, as we operate in the high plants, very, very good manufacturing costs. The benefits of the investments we've made, the organizations we've built and some of the actions we took back in starting November, December, January, February, we will see those coming through later in this year. If those costs are going on to our balance sheet now, then we'll release later.

[Scott Barbour, President and CEO at Advanced Drainage Systems]

So I really think we're on the right track with respect to both the logistics and the manufacturing cost.

[Collin Verron, Director at Deutsche Bank]

Great. That's really encouraging commentary. And I guess just on the CapEx really quickly. You called out the step up. Just given the step up, how are you guys thinking about free cash flow generation this year?

[Collin Verron, Director at Deutsche Bank]

And then how are you thinking about CapEx sort of in the medium term as we move beyond fiscal year twenty twenty six?

[Scott Cottrill, Executive VP, CFO & Secretary at Advanced Drainage Systems]

Yes. So we'll always look at cash flow from ops. We target anything greater than 65%. So we've had the target that we look at. Obviously, working capital as a percent of sales.

[Scott Cottrill, Executive VP, CFO & Secretary at Advanced Drainage Systems]

We're building stock type of operation. So we target 20% working capital as a percent of sales. So those are some of the key metrics we keep in front of us to manage the business. So right now, again, at the free cash flow level, 40% plus conversion of EBITDA is what we look at and target. Obviously, we're to invest in the business and that's we see that as the best use and highest return use of our capital.

[Scott Cottrill, Executive VP, CFO & Secretary at Advanced Drainage Systems]

But we keep all of those kind of key KPIs and guardrails and benchmarks in front of us to make sure that we're managing it correctly. So again, cash flow targeting greater than 40% of EBITDA, cash flow from operations targeting greater than 65.

[Scott Barbour, President and CEO at Advanced Drainage Systems]

Think keep it in those guardrails and then we'll spend capital will be probably in this range. $2.50? Yes.

[Scott Barbour, President and CEO at Advanced Drainage Systems]

We have some things coming up. This is a big year with a couple of big investments in facilities on the ADS side. There'll be some investments in Infiltrator coming up. And we'll balance those as we go through the year. We push and take, but it's not even looking out three or four years as well.

[Scott Cottrill, Executive VP, CFO & Secretary at Advanced Drainage Systems]

Yes. I think the other thing I would highlight there is the fact that to Scott's point, a big part of that February is Infiltrator. So again, when you look at the margins and profitability of that business, where else would you rather put have us put those funds to work? So that's really important. When you think of innovation in the engineering and technology center and those products, particularly in the Allied area that we see some of the early wins there as well out of the gate, there's some really exciting things to go in areas that are very profitable for the business and that's how we're prioritizing.

[Scott Cottrill, Executive VP, CFO & Secretary at Advanced Drainage Systems]

So it's not $275,000,000 of CapEx is going to take five years for returns at a low margin. It's basically the other way around. It's spending in areas that are high profitability and are going to add really greatly to that shareholder value over time.

[Scott Barbour, President and CEO at Advanced Drainage Systems]

All right. Thanks.

[Scott Barbour, President and CEO at Advanced Drainage Systems]

Thanks, Scott. We're I think we have all the questions. So we appreciate everyone being on the call today and the questions and engagement. And we'll be on the phone with many of you later today, year with a lot of accomplishments that we just closed. I mentioned several of them, a year with some frustrations and disappointments on a couple of things.

[Scott Barbour, President and CEO at Advanced Drainage Systems]

We finished pretty strong as we ended. The team never gave up as we closed the year. And as we mentioned, kind of in line with this guidance in April and May so far. So we'll continue to push forward and we look forward to seeing talking to you all or seeing you all in the near future. Thank you.

[Operator]

This concludes today's call. Thank you for joining. You may now disconnect.

Participants

Executives

• Michael Higgins, Vice President of Corporate Strategy and Investor Relations
• Scott Barbour, President and CEO
• Craig Taylor, Executive VP - Infiltrator Water Technologies

Analysts

• Scott Cottrill, Executive VP, CFO & Secretary at Advanced Drainage Systems
• Michael Halloran, Senior Research Analyst - Associate Director of Research at Robert W. Baird & Co
• Matthew Bouley, Senior Equity Research Analyst at Barclays
• Bryan Blair, Managing Director & Senior Research Analyst at Oppenheimer & Co. Inc.
• John Lovallo, Senior US Homebuilding & Building Products Equity Research Analyst at UBS Group
• Garik Shmois, Managing Director at Loop Capital Markets LLC
• Jeffrey Hammond, Managing Director at KeyBanc Capital Markets
• Trey Grooms, Managing Director at Stephens Inc
• Collin Verron, Director at Deutsche Bank