- Advanced Drainage Systems Inc WMS reported a Q4 FY23 sales decline of 8.9% Y/Y to $617.6 million, beating the consensus estimate of $562.8 million.
- Net sales from Domestic Pipe declined 9.9% Y/Y to $357.4 million, and Infiltrator fell 21.3% Y/Y to $102.7 million owing to weak demand in the US construction end markets.
- Domestic allied products & other sales increased 0.7% Y/Y to $150.2 million. However, international sales fell 12.1% Y/Y to $35.1 million.
- Gross profit increased 16.9% Y/Y to $222.4 million, reflecting increased pricing on pipe, on-site septic, allied products, and favorable material expenses.
- Adjusted EBITDA rose 2.1% Y/Y to $172.0 million, and the margin expanded 300 basis points Y/Y to 27.8%.
- EPS of $1.06 beat the consensus estimates of $0.77.
- Advanced Drainage generated an operating cash flow of $707.8 million and a free cash flow of $540.9 million in FY23.
- WMS had total liquidity of $807 million, comprised of cash of $217 million and availability under committed credit facilities of $590 million.
- Repurchase: The company repurchased 6.1 million shares for $575.0 million in FY23 and had $425.0 million available under its existing share repurchase authorization.
- Dividend: The Board of Directors increased the annual cash dividend per share by 17% to $0.56.
- The company announced a quarterly cash dividend per share of $0.14 to be paid on June 15, 2023, to shareholders of record as on June 1, 2023.
- FY24 Outlook: Advanced Drainage expects net sales of $2.60 billion to $2.80 billion (vs. consensus of $2.85 billion) and adjusted EBITDA of $725 million to $825 million. Capital expenditures is projected to be $200 million to $225 million.
- Scott Barbour, President and CEO, commented, "In the coming year, the ADS and Infiltrator businesses will be subject to the challenging economic fundamentals currently underlying the residential and non-residential markets. The actions we took in the fiscal fourth quarter to reduce manufacturing and transportation costs were implemented successfully and are reflected in our Fiscal 2024 guidance."
- "We will focus on growth opportunities in the Infrastructure and Agriculture markets, onshoring projects, and market penetration opportunities for products such as our HP pipe, Allied products, onsite septic tanks and active onsite treatment products to drive above market growth through our proven go to market capabilities."
- Price Action: WMS shares are trading lower by 9.7% at $97.30 on the last check Thursday.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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