ADS Q2 2021 Earnings Report
Key Takeaways
Advanced Drainage Systems announced a strong second quarter for fiscal year 2021, with net sales increasing by 9.7% to $544.2 million and net income increasing significantly to $80.6 million. The company's adjusted EBITDA also saw a substantial increase of 47.3% to $174.1 million. The company is optimistic about the second half of the fiscal year, expecting normal seasonal patterns and capitalizing on residential development and horizontal construction.
Net sales increased by 9.7% to $544.2 million.
Net income increased to $80.6 million, compared to $8.5 million in the prior year.
Adjusted EBITDA (Non-GAAP) increased 47.3% to $174.1 million.
The company's national presence and exposure to residential end market benefitted the results.
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Forward Guidance
ADS expects net sales to be in the range of $1.790 billion to $1.840 billion and Adjusted EBITDA to be in the range of $495 million to $515 million for fiscal year 2021. Capital expenditures are expected to be in the range of $80 million to $90 million.
Positive Outlook
- Based on current orderbook and market trends.
- Visibility into the second half of fiscal 2021.
- Strong financial performance in the first half of fiscal 2021.
- Expect volume in the second half of the year to be consistent with the prior year, driven by seasonality.
- Expect modest improvement in year-over-year profitability despite inflationary pressure as well as investments in both capital and our organization to drive future value.
Challenges Ahead
- Guidance does not contemplate any further change in economic conditions due to the COVID-19 pandemic.
- Inflationary pressure.
- Investments in capital.
- Investments in organization to drive future value.
- Uncertainties still exist regarding the broader market environment.
Revenue & Expenses
Visualization of income flow from segment revenue to net income