# EDGAR Filing Document

**Accession Number:** 0001604028
**File Stem:** 0001604028-23-000006
**Filing Date:** 2023-2
**Character Count:** 49218
**Document Hash:** 52e88c83eb8158311d1dddbfeb714c33
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001604028-23-000006.hdr.sgml**: 20230202

**ACCESSION NUMBER**: 0001604028-23-000006

**CONFORMED SUBMISSION TYPE**: 8-K

**PUBLIC DOCUMENT COUNT**: 36

**CONFORMED PERIOD OF REPORT**: 20230202

**ITEM INFORMATION**: Results of Operations and Financial Condition

**ITEM INFORMATION**: Regulation FD Disclosure

**ITEM INFORMATION**: Other Events

**ITEM INFORMATION**: Financial Statements and Exhibits

**FILED AS OF DATE**: 20230202

**DATE AS OF CHANGE**: 20230202

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** ADVANCED DRAINAGE SYSTEMS, INC.
- **CENTRAL INDEX KEY:** 0001604028
- **STANDARD INDUSTRIAL CLASSIFICATION:** PLASTICS FOAM PRODUCTS [3086]
- **IRS NUMBER:** 510105665
- **STATE OF INCORPORATION:** DE
- **FISCAL YEAR END:** 0331

**FILING VALUES:**
- **FORM TYPE:** 8-K
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-36557
- **FILM NUMBER:** 23578766

**BUSINESS ADDRESS:**
- **STREET 1:** 4640 TRUEMAN BOULEVARD
- **CITY:** HILLIARD
- **STATE:** OH
- **ZIP:** 43026
- **BUSINESS PHONE:** 614-658-0050

**MAIL ADDRESS:**
- **STREET 1:** 4640 TRUEMAN BOULEVARD
- **CITY:** HILLIARD
- **STATE:** OH
- **ZIP:** 43026

?xml version="1.0" ? wms-20230202

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**WASHINGTON, D.C. 20549**

**FORM 8-K**

**CURRENT REPORT**

**Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934**

**Date of Report (Date of earliest event reported): February 2, 2023**

**ADVANCED DRAINAGE SYSTEMS, INC.**

**(Exact name of Registrant as Specified in Its Charter)**

---

| | | | |
|:---|:---|:---|:---|
| **Delaware** | **Delaware** | **001-36557** | **51-0105665** |
| **(State or Other Jurisdiction**<br>**of Incorporation)** | **(State or Other Jurisdiction**<br>**of Incorporation)** | **(Commission File Number)** | **(IRS Employer**<br>**Identification No.)** |
| **4640 Trueman Boulevard,** | **4640 Trueman Boulevard,** |  | **43026** |
| **Hilliard,** | **Ohio** |  | **43026** |
| **(Address of Principal Executive Offices)** | **(Address of Principal Executive Offices)** |  | **(Zip Code)** |

---

**Registrant's Telephone Number, Including Area Code: (614) 658-0050**

**Not Applicable**

**(Former Name or Former Address, if Changed Since Last Report)**

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instructions A.2. below):

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

---

| | | |
|:---|:---|:---|
| **Title of each class** | **Trading**<br>**Symbol(s)** | **Name of each exchange on which registered** |
| Common Stock, $0.01 par value per share | WMS | New York Stock Exchange |

---

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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**Item 2.02&nbsp;&nbsp;&nbsp;&nbsp;Results of Operations and Financial Condition** 

On February 2, 2023, Advanced Drainage Systems, Inc. (the "Company") issued a press release setting forth the Company's unaudited results for the fiscal third quarter ended December 31, 2022. A copy of the Company's press release with the results is being furnished as Exhibit 99.1 and hereby incorporated by reference.

The information furnished pursuant to this Item 2.02, including Exhibit 99.1, shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934 (the "Exchange Act") or otherwise subject to the liabilities under Section 18 of the Exchange Act and shall not be deemed to be incorporated by reference into any filing of the Company under the Securities Act of 1933 or the Exchange Act.

**Item 7.01&nbsp;&nbsp;&nbsp;&nbsp;Regulation FD Disclosure** 

As previously announced, at 10:00 a.m. (Eastern time) on February 2, 2023, the Company's President and Chief Executive Officer, Scott Barbour, and Chief Financial Officer, Scott Cottrill, will host a conference call and webcast to discuss the Company's unaudited results for the third quarter ended December 31, 2022. A copy of the Company's slides forming the basis of the presentation is being furnished as Exhibit 99.2 and hereby incorporated by reference.

The live webcast will also be accessible via the "Events Calendar" section of the Company's Investor Relations website, www.investors.ads-pipe.com. An archived version of the webcast will be available following the call.

**Item 8.01&nbsp;&nbsp;&nbsp;&nbsp;Other Events**

On February 2, 2023, the Company issued a press release announcing the approval by the Board of Directors (the "Board") of the Company of the declaration of a cash dividend of $0.12 per share, payable on March 15, 2023, to stockholders of record at the close of business on March 1, 2023. A copy of the Company's press release is attached hereto as Exhibit 99.3 and hereby incorporated by reference.

**Item 9.01&nbsp;&nbsp;&nbsp;&nbsp;Financial Statements and Exhibits.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(d)Exhibits**

The following exhibits are being furnished as part of this report:

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| | |
|:---|:---|
| 99.1 | <u>[Press Release of Advanced Drainage Systems, Inc., dated](wms-02022023x8kex991.htm)[February 2](wms-02022023x8kex991.htm)[, 202](wms-02022023x8kex991.htm)[3](wms-02022023x8kex991.htm)[, regarding earnings](wms-02022023x8kex991.htm)</u> |
| 99.2 | <u>[Presentation slides, dated](ex992-q3fy23_vf.htm)[February](ex992-q3fy23_vf.htm)[2](ex992-q3fy23_vf.htm)[, 202](ex992-q3fy23_vf.htm)[3](ex992-q3fy23_vf.htm)[, regarding earnings](ex992-q3fy23_vf.htm)</u> |
| 99.3 | <u>[Press Release of Advanced Drainage Systems, Inc., dated](wms-02022023x8kex993.htm)[February](wms-02022023x8kex993.htm)[2](wms-02022023x8kex993.htm)[, 202](wms-02022023x8kex993.htm)[3](wms-02022023x8kex993.htm)[, regarding dividend](wms-02022023x8kex993.htm)</u> |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |

---

------

**SIGNATURES**

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

---

| | | |
|:---|:---|:---|
| | ADVANCED DRAINAGE SYSTEMS, INC. | ADVANCED DRAINAGE SYSTEMS, INC. |
| Date: February 2, 2023 | By: | /s/ Scott A. Cottrill |
|  | Name: | Scott A. Cottrill |
|  | Title: | EVP, CFO & Secretary |

---

## Exhibit 99.1

Exhibit 99.1

![adslogoa.jpg](adslogoa.jpg)

**ADVANCED DRAINAGE SYSTEMS ANNOUNCES THIRD QUARTER** 

**FISCAL 2023 RESULTS**

HILLIARD, Ohio – (February 2, 2023) – Advanced Drainage Systems, Inc. (NYSE: WMS) ("ADS" or the "Company"), a leading provider of innovative water management solutions in the stormwater and onsite septic wastewater industries today announced financial results for the fiscal third quarter ended December 31, 2022.

**<u>Third Quarter Fiscal 2023 Results</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**• Net sales decreased 8.4% to $655.2 million**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**• Net income increased 11.7% to $83.2 million**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**• Adjusted EBITDA (Non-GAAP) decreased 3.6% to $169.7 million**

**<u>Year-to-Date Fiscal 2023 Results</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**• Net sales increased 17.3% to $2,453.6 million**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**• Net income increased 86.5% to $425.0 million**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**• Adjusted EBITDA (Non-GAAP) increased 44.2% to $732.0 million**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**• Cash provided by operating activities increased 240.7% to $660.4 million**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**• Free cash flow (Non-GAAP) increased $440.1 million to $533.6 million**

Scott Barbour, President and Chief Executive Officer of ADS commented, "The Company executed well in the fiscal third quarter despite a challenging demand environment. Through October and November, demand was largely in line with expectations, but in December domestic construction market demand slowed significantly. As a result, consolidated net sales declined 8% in the fiscal third quarter. The ADS business was down 3%, primarily due to weakness in the non-residential and retail businesses. The 30% decline in Infiltrator sales was a result of the lower residential market demand and inventory destocking, which completed in the fiscal third quarter as we previously communicated."

Barbour continued, "Importantly, though we are facing a challenging demand environment, our market leading position, value proposition and execution enabled us to manage costs, maintain favorable price/material cost and generate significant cash flow. As a result, the Company's Adjusted EBITDA margin expanded 130 basis points and free cash flow increased $440 million, or 370% over the prior year. It is also important to point out that Net Income increased 11.7%. As demonstrated with the margin performance in the fiscal third quarter, our business model remains resilient in a lower demand environment. Going forward, we expect annual margin performance to be consistent with what we communicated at Investor Day in March 2022."

"As we look at the significant change in market dynamics that impact construction activity since the beginning of the fiscal year – interest rates nearly doubling and significant inflation – there is no doubt this is creating economic uncertainty. This combination has slowed down demand for the ADS and Infiltrator products. We expect the majority of calendar 2023 to remain a challenging demand environment."

Barbour concluded, "The need for the water management solutions and services we provide is as relevant as ever. The Company's industry leading water management products have significant competitive advantages that will continue to drive above market results. We will work through this period of lower demand by managing our costs, including reducing headcount and optimizing our network. The long-term fundamentals and position of both ADS and Infiltrator remain intact, and we will manage the business through the external conditions appropriately to continue delivering value to our customers and shareholders."

**<u>Third Quarter Fiscal 2023 Results</u>**

Net sales decreased $60.2 million, or 8.4%, to $655.2 million, as compared to $715.4 million in the prior year quarter. Domestic pipe sales decreased $24.3 million, or 6.1%, to $375.7 million. Domestic allied products & other sales increased $1.6 million, or 1.1%, to $149.0 million. Infiltrator sales decreased $44.8 million, or 30.1%, to $103.9 million. The decrease in domestic net sales was driven by sales in the U.S. construction end markets. International sales increased $3.1 million, or 5.6%, to $59.0 million, driven by growth in the Canadian and Mexican businesses.

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Gross profit increased $14.9 million, or 7.1%, to $223.9 million as compared to $209.0 million in the prior year. The increase in gross profit is primarily due to the favorable pricing on pipe, onsite septic and allied products as well as favorable material cost. This increase was partially offset by a decrease in volume, inflationary cost pressures and higher manufacturing costs.

Adjusted EBITDA (Non-GAAP) decreased $6.4 million, or 3.6%, to $169.7 million, as compared to $176.2 million in the prior year. The decrease is primarily due to the factors mentioned above, as well as an increase in selling, general and administrative expenses. As a percentage of net sales, Adjusted EBITDA was 25.9% as compared to 24.6% in the prior year.

Reconciliations of GAAP to Non-GAAP financial measures for Adjusted EBITDA and Free Cash Flow have been provided in the financial statement tables included in this press release. An explanation of these measures is also included below under the heading "Non-GAAP Financial Measures."

**<u>Year-to-Date Fiscal 2023 Results</u>**

Net sales increased $362.4 million, or 17.3%, to $2,453.6 million, as compared to $2,091.1 million in the prior year quarter. Domestic pipe sales increased $243.0 million, or 21.0%, to $1,401.6 million. Domestic allied products & other sales increased $129.9 million, or 30.9%, to $550.2 million. Infiltrator sales decreased $0.4 million, or 0.1%, to $420.9 million. The increase in domestic net sales was driven by double-digit sales growth in the U.S. construction end markets. International sales increased $19.2 million, or 10.4%, to $203.9 million, driven by strong sales growth in the Canadian, Mexican and Exports businesses.

Gross profit increased $285.8 million, or 46.8%, to $896.0 million as compared to $610.2 million in the prior year. The increase in gross profit is primarily due to the favorable pricing on pipe, onsite septic and allied products as well as favorable material cost. This increase was partially offset by a decrease in volume, inflationary cost pressures and higher manufacturing costs.

Adjusted EBITDA (Non-GAAP) increased $224.4 million, or 44.2%, to $732.0 million, as compared to $507.5 million in the prior year. The increase is primarily due to the factors mentioned above. As a percentage of net sales, Adjusted EBITDA was 29.8% as compared to 24.3% in the prior year.

**<u>Balance Sheet and Liquidity</u>**

Net cash provided by operating activities was $660.4 million, as compared to $193.8 million in the prior year. Free cash flow (Non-GAAP) was $533.6 million, as compared to $93.5 million in the prior year. Net debt (total debt and finance lease obligations net of cash) was $882.1 million as of December 31, 2022, a decrease of $42.4 million from March 31, 2022.

ADS had total liquidity of $1,017.1 million, comprised of cash of $426.7 million as of December 31, 2022 and $590.4 million of availability under committed credit facilities. As of December 31, 2022, the Company's trailing-twelve-month leverage ratio was 1.0 times Adjusted EBITDA.

In the nine months ended December 31, 2022, the Company repurchased 3.8 million shares of its common stock for a total cost of $375.0 million. As of December 31, 2022, approximately $625.0 million of common stock may be repurchased under the Company's existing share repurchase authorization.

**<u>Fiscal 2023 Outlook</u>**

Based on current visibility, backlog of existing orders and business trends, the Company updated its financial targets for fiscal 2023. Net sales are now expected to be in the range of $2.975 billion to $3.050 billion. Adjusted EBITDA is now expected to be in the range of $850 to $890 million. Capital expenditures are expected to be approximately $175 million.

**<u>Conference Call Information</u>**

**Webcast:** Interested investors and other parties can listen to a webcast of the live conference call by logging in through the Investor Relations section of the Company's website at https://investors.ads-pipe.com/events-and-presentations. An online replay will be available on the same website following the call.

**Teleconference:** To participate in the live teleconference, participants may register at https://www.netroadshow.com/events/login?show=4a232ad6&confId=45958. After registering, participants will receive a confirmation through email, including dial in details and unique conference call codes for entry. Registration is open through the live call. To ensure participants are connected for the full call, please register at least 10 minutes before the start of the call.

**<u>About the Company</u>**

Advanced Drainage Systems is a leading manufacturer of innovative stormwater and onsite septic wastewater solutions that manages the world's most precious resource: water. ADS provides superior drainage solutions for use in a wide variety of markets and applications including commercial, residential, infrastructure and agriculture. ADS delivers tremendous service to its customers with the industry's largest company-owned fleet, an expansive sales team, and a vast manufacturing network of approximately 70

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manufacturing plants and 37 distribution centers. ADS is the largest plastic recycling company in North America, ensuring over half a billion pounds of plastic is kept out of landfills every year. Founded in 1966, ADS' water management solutions are designed to last for decades. To learn more, visit the Company's website at www.adspipe.com.

**<u>Forward Looking Statements</u>**

Certain statements in this press release may be deemed to be forward-looking statements. These statements are not historical facts but rather are based on the Company's current expectations, estimates and projections regarding the Company's business, operations and other factors relating thereto. Words such as "may," "will," "could," "would," "should," "anticipate," "predict," "potential," "continue," "expects," "intends," "plans," "projects," "believes," "estimates," "confident" and similar expressions are used to identify these forward-looking statements. Factors that could cause actual results to differ from those reflected in forward-looking statements relating to our operations and business include: fluctuations in the price and availability of resins and other raw materials and our ability to pass any increased costs of raw materials on to our customers in a timely manner; the risks related to the COVID-19 pandemic or other pandemics in the future; disruption or volatility in general business and economic conditions in the markets in which we operate; cyclicality and seasonality of the non-residential and residential construction markets and infrastructure spending; the risks of increasing competition in our existing and future markets; uncertainties surrounding the integration and realization of anticipated benefits of; the effect of weather or seasonality; the loss of any of our significant customers; the risks of doing business internationally; the risks of conducting a portion of our operations through joint ventures; our ability to expand into new geographic or product markets; the risk associated with manufacturing processes; the effect of global climate change; cybersecurity risks; our ability to manage our supply purchasing and customer credit policies; our ability to control labor costs and to attract, train and retain highly-qualified employees and key personnel; our ability to protect our intellectual property rights; changes in laws and regulations, including environmental laws and regulations; the risks associated with our current levels of indebtedness, including borrowings under our existing credit agreement and outstanding indebtedness under our existing senior notes; and other risks and uncertainties described in the Company's filings with the SEC. New risks and uncertainties emerge from time to time and it is not possible for the Company to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this press release. In light of the significant uncertainties inherent in the forward-looking information included herein, the inclusion of such information should not be regarded as a representation by the Company or any other person that the Company's expectations, objectives or plans will be achieved in the timeframe anticipated or at all. Investors are cautioned not to place undue reliance on the Company's forward-looking statements and the Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

**For more information, please contact:**

Michael Higgins

VP, Corporate Strategy & Investor Relations

(614) 658-0050

Michael.Higgins@adspipe.com

------

**<u>Financial Statements</u>**

**ADVANCED DRAINAGE SYSTEMS, INC. AND SUBSIDIARIES**

**CONSOLIDATED STATEMENTS OF INCOME**

**(unaudited)**

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| | | | | |
|:---|:---|:---|:---|:---|
| | **Three Months Ended December 31,** | **Three Months Ended December 31,** | **Nine Months Ended<br>December 31,** | **Nine Months Ended<br>December 31,** |
| (In thousands, except per share data) | **2022** | **2021** | **2022** | **2021** |
| Net sales | $655167 | $715357 | $2453562 | $2091128 |
| Cost of goods sold | 431250 | 506380 | 1557575 | 1480973 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gross profit | 223917 | 208977 | 895987 | 610155 |
| Operating expenses: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Selling, general and administrative | 85936 | 80059 | 261095 | 230231 |
| &nbsp;&nbsp;&nbsp;&nbsp;(Gain) loss on disposal of assets and costs from exit and disposal activities | (348) | 3466 | (147) | 2554 |
| &nbsp;&nbsp;&nbsp;&nbsp;Intangible amortization | 13842 | 15138 | 41360 | 46229 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Income from operations | 124487 | 110314 | 593679 | 331141 |
| Other expense: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest expense | 20001 | 8756 | 49334 | 25100 |
| &nbsp;&nbsp;&nbsp;&nbsp;Derivative gains and other income, net | (4125) | (979) | (5632) | (2791) |
| Income before income taxes | 108611 | 102537 | 549977 | 308832 |
| Income tax expense | 26068 | 28792 | 128641 | 82063 |
| Equity in net income of unconsolidated affiliates | (639) | (717) | (3705) | (1128) |
| Net income | 83182 | 74462 | 425041 | 227897 |
| Less: net income attributable to noncontrolling interest | 1142 | 784 | 3848 | 2873 |
| Net income attributable to ADS | 82040 | 73678 | 421193 | 225024 |
| Dividends to participating securities |  | (1357) |  | (4633) |
| Net income available to common stockholders and participating securities | 82040 | 72321 | 421193 | 220391 |
| Undistributed income allocated to participating securities |  | (9457) |  | (30870) |
| **Net income available to common stockholders** | $**82040** | $**62864** | $**421193** | $**189521** |
| **Weighted average common shares outstanding:** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Basic | 82067 | 71267 | 82891 | 71087 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Diluted | 82987 | 72789 | 83980 | 72752 |
| **Net income per share:** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Basic | $1.00 | $0.88 | $5.08 | $2.67 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Diluted | $0.99 | $0.86 | $5.02 | $2.61 |
| **Cash dividends declared per share** | $0.12 | $0.11 | $0.36 | $0.33 |

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**ADVANCED DRAINAGE SYSTEMS, INC. AND SUBSIDIARIES**

**CONSOLIDATED BALANCE SHEETS**

**(unaudited)**

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| | | |
|:---|:---|:---|
| | **As of** | **As of** |
| *(Amounts in thousands)* | **December 31, 2022** | **March 31, 2022** |
| **ASSETS** |  |  |
| **Current assets:** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Cash | $426690 | $20125 |
| &nbsp;&nbsp;&nbsp;&nbsp;Receivables, net | 242485 | 341753 |
| &nbsp;&nbsp;&nbsp;&nbsp;Inventories | 459029 | 494324 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other current assets | 29162 | 15696 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total current assets | 1157366 | 871898 |
| Property, plant and equipment, net | 685496 | 619383 |
| **Other assets:** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Goodwill | 619275 | 610293 |
| &nbsp;&nbsp;&nbsp;&nbsp;Intangible assets, net | 421450 | 431385 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other assets | 122071 | 116799 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total assets** | $3005658 | $2649758 |
| **LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS' EQUITY** |  |  |
| **Current liabilities:** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Current maturities of debt obligations | $15601 | $19451 |
| &nbsp;&nbsp;&nbsp;&nbsp;Current maturities of finance lease obligations | 6556 | 5089 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accounts payable | 174106 | 224986 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other accrued liabilities | 170549 | 134877 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accrued income taxes | 3468 | 6838 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total current liabilities | 370280 | 391241 |
| Long-term debt obligations, net | 1272040 | 908705 |
| Long-term finance lease obligations | 14571 | 11393 |
| Deferred tax liabilities | 163259 | 168435 |
| Other liabilities | 69767 | 64939 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total liabilities | 1889917 | 1544713 |
| **Mezzanine equity:** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Redeemable common stock | 157128 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Redeemable convertible preferred stock |  | 195384 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total mezzanine equity | 157128 | 195384 |
| **Stockholders' equity:** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Common stock | 11645 | 11612 |
| &nbsp;&nbsp;&nbsp;&nbsp;Paid-in capital | 1128915 | 1065628 |
| &nbsp;&nbsp;&nbsp;&nbsp;Common stock in treasury, at cost | (719702) | (318691) |
| &nbsp;&nbsp;&nbsp;&nbsp;Accumulated other comprehensive loss | (29871) | (24386) |
| &nbsp;&nbsp;&nbsp;&nbsp;Retained earnings | 550011 | 158876 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total ADS stockholders' equity | 940998 | 893039 |
| &nbsp;&nbsp;&nbsp;&nbsp;Noncontrolling interest in subsidiaries | 17615 | 16622 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total stockholders' equity | 958613 | 909661 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total liabilities, mezzanine equity and stockholders' equity** | $3005658 | $2649758 |

---

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**ADVANCED DRAINAGE SYSTEMS, INC. AND SUBSIDIARIES**

**CONSOLIDATED STATEMENTS OF CASH FLOWS**

**(unaudited)**

---

| | | |
|:---|:---|:---|
| | **Nine Months Ended December 31,** | **Nine Months Ended December 31,** |
| *(Amounts in thousands)* | **2022** | **2021** |
| **Cash Flow from Operating Activities** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Net income | $425041 | $227897 |
| &nbsp;&nbsp;&nbsp;&nbsp;Adjustments to reconcile net income to net cash provided by operating activities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation and amortization | 107346 | 103687 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deferred income taxes | (4165) | 6243 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(Gain) loss on disposal of assets and costs from exit and disposal activities | (147) | 2554 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ESOP and stock-based compensation | 19912 | 61900 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amortization of deferred financing charges | 909 | 286 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Fair market value adjustments to derivatives | 2309 | 118 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Equity in net income of unconsolidated affiliates | (3705) | (1128) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other operating activities | 2732 | (9898) |
| &nbsp;&nbsp;&nbsp;&nbsp;Changes in working capital: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Receivables | 99958 | (59821) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Inventories | 34871 | (161878) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prepaid expenses and other current assets | (4532) | (5199) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable, accrued expenses, and other liabilities | (20091) | 29086 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash provided by operating activities | 660438 | 193847 |
| **Cash Flows from Investing Activities** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Capital expenditures | (126858) | (100367) |
| &nbsp;&nbsp;&nbsp;&nbsp;Acquisition, net of cash acquired | (48010) | (49210) |
| &nbsp;&nbsp;&nbsp;&nbsp;Other investing activities | 46 | (463) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash used in investing activities | (174822) | (150040) |
| **Cash Flows from Financing Activities** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Payments on syndicated Term Loan Facility | (5250) | (5250) |
| &nbsp;&nbsp;&nbsp;&nbsp;Proceeds from Revolving Credit Agreement | 26200 | 258100 |
| &nbsp;&nbsp;&nbsp;&nbsp;Payments on Revolving Credit Agreement | (140500) | (124600) |
| &nbsp;&nbsp;&nbsp;&nbsp;Proceeds from Amended Revolving Credit Agreement | 97000 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Payments on Amended Revolving Credit Agreement | (97000) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Proceeds from Senior Notes due 2030 | 500000 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Debt issuance costs | (11575) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Proceeds from Equipment Financing |  | 35963 |
| &nbsp;&nbsp;&nbsp;&nbsp;Payments on Equipment Financing | (10213) | (1177) |
| &nbsp;&nbsp;&nbsp;&nbsp;Payments on finance lease obligations | (4954) | (49365) |
| &nbsp;&nbsp;&nbsp;&nbsp;Repurchase of common stock | (375027) | (292000) |
| &nbsp;&nbsp;&nbsp;&nbsp;Cash dividends paid | (30111) | (27826) |
| &nbsp;&nbsp;&nbsp;&nbsp;Dividends paid to noncontrolling interest holder | (3652) | (1471) |
| &nbsp;&nbsp;&nbsp;&nbsp;Proceeds from exercise of stock options | 5145 | 4274 |
| &nbsp;&nbsp;&nbsp;&nbsp;Payment of withholding taxes on vesting of restricted stock units | (28653) | (13055) |
| &nbsp;&nbsp;&nbsp;&nbsp;Other financing activities |  | (167) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash used in financing activities | (78590) | (216574) |
| Effect of exchange rate changes on cash | (461) | (69) |
| Net change in cash | 406565 | (172836) |
| Cash at beginning of period | 20125 | 195009 |
| **Cash at end of period** | $426690 | $22173 |

---

------

**Selected Financial Data**

The following tables set forth net sales by reportable segment for each of the periods indicated.

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** |
| | **December 31, 2022** | **December 31, 2022** | **December 31, 2022** | **December 31, 2021** | **December 31, 2021** | **December 31, 2021** |
| (In thousands) | Net Sales | Intersegment Net Sales | Net Sales from External Customers | Net Sales | Intersegment Net Sales | Net Sales from External Customers |
| Pipe | $375719 | $(10839) | $364880 | $400027 | $(3332) | $396695 |
| Infiltrator | 103895 | (14961) | 88934 | 148677 | (26314) | 122363 |
| International |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;International - Pipe | 44882 | (5311) | 39571 | 41156 | (5700) | 35456 |
| &nbsp;&nbsp;&nbsp;&nbsp;International - Allied Products & Other | 14075 |  | 14075 | 14687 |  | 14687 |
| Total International | 58957 | (5311) | 53646 | 55843 | (5700) | 50143 |
| Allied Products & Other | 149044 | (1337) | 147707 | 147476 | (1320) | 146156 |
| Intersegment Eliminations | (32448) | 32448 |  | (36666) | 36666 |  |
| **Total Consolidated** | $**655167** | $**—** | $**655167** | $**715357** | $**—** | $**715357** |
|  | **Nine Months Ended** | **Nine Months Ended** | **Nine Months Ended** | **Nine Months Ended** | **Nine Months Ended** | **Nine Months Ended** |
|  | **December 31, 2022** | **December 31, 2022** | **December 31, 2022** | **December 31, 2021** | **December 31, 2021** | **December 31, 2021** |
|  | Net Sales | Intersegment Net Sales | Net Sales from External Customers | Net Sales | Intersegment Net Sales | Net Sales from External Customers |
| Pipe | $1401554 | $(31483) | $1370071 | $1158558 | $(7903) | $1150655 |
| Infiltrator | 420920 | (66317) | 354603 | 421330 | (67763) | 353567 |
| International |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;International - Pipe | 154762 | (18509) | 136253 | 142135 | (13784) | 128351 |
| &nbsp;&nbsp;&nbsp;&nbsp;International - Allied Products & Other | 49172 |  | 49172 | 42648 |  | 42648 |
| Total International | 203934 | (18509) | 185425 | 184783 | (13784) | 170999 |
| Allied Products & Other | 550153 | (6690) | 543463 | 420231 | (4324) | 415907 |
| Intersegment Eliminations | (122999) | 122999 |  | (93774) | 93774 |  |
| **Total Consolidated** | $**2453562** | $**—** | $**2453562** | $**2091128** | $**—** | $**2091128** |

---

**Non-GAAP Financial Measures**

This press release contains financial information determined by methods other than in accordance with accounting principles generally accepted in the United States of America ("GAAP"). ADS management uses non-GAAP measures in its analysis of the Company's performance. Investors are encouraged to review the reconciliation of non-GAAP financial measures to the comparable GAAP results available in the accompanying tables.

**Reconciliation of Non-GAAP Financial Measures**

This press release includes references to organic results, Adjusted EBITDA and Free Cash Flow, non-GAAP financial measures. These non-GAAP financial measures are used in addition to and in conjunction with results presented in accordance with GAAP. These measures are not intended to be substitutes for those reported in accordance with GAAP. Adjusted EBITDA and Free Cash Flow may be different from non-GAAP financial measures used by other companies, even when similar terms are used to identify such measures.

EBITDA and Adjusted EBITDA are non-GAAP financial measures that comprise net income before interest, income taxes, depreciation and amortization, stock-based compensation, non-cash charges and certain other expenses. The Company's definition of Adjusted EBITDA may differ from similar measures used by other companies, even when similar terms are used to identify such measures. Adjusted EBITDA is a key metric used by management and the Company's board of directors to assess financial performance and evaluate the effectiveness of the Company's business strategies. Accordingly, management believes that Adjusted EBITDA provides useful information to investors and others in understanding and evaluating our operating results in the same manner as the Company's management and board of directors. In order to provide investors with a meaningful reconciliation, the Company has provided below reconciliations of Adjusted EBITDA to net income.

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Free Cash Flow is a non-GAAP financial measure that comprises cash flow from operating activities less capital expenditures. Free Cash Flow is a measure used by management and the Company's board of directors to assess the Company's ability to generate cash. Accordingly, management believes that Free Cash Flow provides useful information to investors and others in understanding and evaluating our ability to generate cash flow from operations after capital expenditures. In order to provide investors with a meaningful reconciliation, the Company has provided below a reconciliation of cash flow from operating activities to Free Cash Flow.

The following tables present a reconciliation of EBITDA and Adjusted EBITDA to Net Income and Free Cash Flow to Cash Flow from Operating Activities, the most comparable GAAP measures, for each of the periods indicated.

**Reconciliation of Adjusted Gross Profit to Gross Profit**

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Three Months Ended<br>December 31,** | **Three Months Ended<br>December 31,** | **Nine Months Ended December 31,** | **Nine Months Ended December 31,** |
| *(Amounts in thousands)* | **2022** | **2021** | **2022** | **2021** |
| **Segment Adjusted Gross Profit** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Pipe | $106279 | $92066 | $421011 | $258681 |
| &nbsp;&nbsp;&nbsp;&nbsp;Infiltrator | 46497 | 60546 | 193569 | 178795 |
| &nbsp;&nbsp;&nbsp;&nbsp;International | 13342 | 13240 | 51456 | 49695 |
| &nbsp;&nbsp;&nbsp;&nbsp;Allied Products & Other | 78401 | 72785 | 293472 | 204063 |
| &nbsp;&nbsp;&nbsp;&nbsp;Intersegment Elimination | 714 | (44) | 329 | 1421 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total Segment Adjusted Gross Profit | 245233 | 238593 | 959837 | 692655 |
| &nbsp;&nbsp;&nbsp;&nbsp;Depreciation and amortization | 20573 | 18042 | 61675 | 52824 |
| &nbsp;&nbsp;&nbsp;&nbsp;ESOP and stock-based compensation | 743 | 11574 | 2175 | 29676 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total Gross Profit** | $**223917** | $**208977** | $**895987** | $**610155** |

---

**Reconciliation of Adjusted EBITDA to Net Income**

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Three Months Ended<br>December 31,** | **Three Months Ended<br>December 31,** | **Nine Months Ended December 31,** | **Nine Months Ended December 31,** |
| *(Amounts in thousands)* | **2022** | **2021** | **2022** | **2021** |
| **Net income** | $83182 | $74462 | $425041 | $227897 |
| &nbsp;&nbsp;&nbsp;&nbsp;Depreciation and amortization | 35846 | 34837 | 107346 | 103687 |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest expense | 20001 | 8756 | 49334 | 25100 |
| &nbsp;&nbsp;&nbsp;&nbsp;Income tax expense | 26068 | 28792 | 128641 | 82063 |
| EBITDA | 165097 | 146847 | 710362 | 438747 |
| &nbsp;&nbsp;&nbsp;&nbsp;(Gain) loss on disposal of assets and costs from exit and disposal activities | (348) | 3466 | (147) | 2554 |
| &nbsp;&nbsp;&nbsp;&nbsp;Stock-based compensation expense | 6179 | 6242 | 19912 | 18511 |
| &nbsp;&nbsp;&nbsp;&nbsp;ESOP compensation expense |  | 17221 |  | 43389 |
| &nbsp;&nbsp;&nbsp;&nbsp;Transaction costs | 1334 | 2145 | 3417 | 3022 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other adjustments<sup>(a)</sup> | (2525) | 234 | (1562) | 1318 |
| **Adjusted EBITDA** | $**169737** | $**176155** | $**731982** | $**507541** |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)Includes derivative fair value adjustments, foreign currency transaction (gains) losses, interest income, the proportionate share of interest, income taxes, depreciation and amortization related to the South American Joint Venture, which is accounted for under the equity method of accounting and executive retirement expense.

------

**Reconciliation of Free Cash Flow to Cash flow from Operating Activities**

---

| | | |
|:---|:---|:---|
| | **Nine Months Ended<br>December 31,** | **Nine Months Ended<br>December 31,** |
| *(Amounts in thousands)* | **2022** | **2021** |
| Net cash flow from operating activities | $660438 | $193847 |
| Capital expenditures | (126858) | (100367) |
| **Free cash flow** | $**533580** | $**93480** |

---

## Exhibit 99.2

![](ex992-q3fy23_vf001.jpg)

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![](ex992-q3fy23_vf002.jpg)

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![](ex992-q3fy23_vf003.jpg)

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![](ex992-q3fy23_vf004.jpg)

4 • • • • • • • • • • • •

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![](ex992-q3fy23_vf005.jpg)

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![](ex992-q3fy23_vf006.jpg)

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![](ex992-q3fy23_vf007.jpg)

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![](ex992-q3fy23_vf008.jpg)

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![](ex992-q3fy23_vf009.jpg)

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![](ex992-q3fy23_vf010.jpg)

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![](ex992-q3fy23_vf011.jpg)

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![](ex992-q3fy23_vf012.jpg)

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![](ex992-q3fy23_vf013.jpg)

Source: Dodge Construction Network, AIA. Commercial includes Hotels, Office, Retail and Warehouse spending. Institutional includes Dormitories, Education, Government Buildings, Healthcare, Recreation Buildings, Religious Buildings and Transportation Buildings. • • • • 13

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![](ex992-q3fy23_vf014.jpg)

Source: National Association of Home Builders (NAHB) Forecast December 2022; Fannie Mae Housing Forecast: December 2022; Mortgage Bankers Association (MBA) Mortgage Finance Forecast December 2022; National Association of Realtors (NAR) U.S. Economic Outlook: December 2022; Dodge Construction Network Q3 Forecast December 2022. Source 2020 2021 2022 2023 2023 % Change NAHB 1,000 1,130 999 744 (26%) Fannie Mae 1,004 1,127 1,006 769 (24%) MBA 1,004 1,131 1,014 923 (9%) NAR 990 1,127 1,010 900 (11%) Dodge 950 1,084 949 891 (6%) Average 990 1,120 996 845 (15%) % Growth +13% (11%) (15%) • • • • • • • • • 14

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![](ex992-q3fy23_vf015.jpg)

• • • • • • • • • • • • • • 15

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![](ex992-q3fy23_vf016.jpg)

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![](ex992-q3fy23_vf017.jpg)

Reconciliations 17 Net Sales Intersegment Net Sales Net Sales from External Customers Net Sales Intersegment Net Sales Net Sales from External Customers Pipe $375,719 $(10,839) $364,880 $400,027 $(3,332) $396,695 Infiltrator Water Technologies 103,895 (14,961) 88,934 148,677 (26,314) 122,363 International International - Pipe 44,882 (5,311) 39,571 41,156 (5,700) 35,456 International - Allied Products & Other 14,075 — 14,075 14,687 — 14,687 Total International 58,957 (5,311) 53,646 55,843 (5,700) 50,143 Allied Products & Other 149,044 (1,337) 147,707 147,476 (1,320) 146,156 Intersegment Eliminations (32,448) 32,448 — (36,666) 36,666 — Total Consolidated $655,167 $— $655,167 $715,357 $— $715,357 Net Sales Intersegment Net Sales Net Sales from External Customers Net Sales Intersegment Net Sales Net Sales from External Customers Pipe $1,401,554 $(31,483) $1,370,071 $1,158,558 $(7,903) $1,150,655 Infiltrator Water Technologies 420,920 (66,317) 354,603 421,330 (67,763) 353,567 International International - Pipe 154,762 (18,509) 136,253 142,135 (13,784) 128,351 International - Allied Products & Other 49,172 — 49,172 42,648 — 42,648 Total International 203,934 (18,509) 185,425 184,783 (13,784) 170,999 Allied Products & Other 550,153 (6,690) 543,463 420,231 (4,324) 415,907 Intersegment Eliminations (122,999) 122,999 — (93,774) 93,774 — Total Consolidated $2,453,562 $— $2,453,562 $2,091,128 $— $2,091,128 December 31, 2022 Three Months Ended December 31, 2021 December 31, 2021 Nine Months Ended December 31, 2022

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![](ex992-q3fy23_vf018.jpg)

Reconciliations 18 2022 2021 2022 2021 Segment adjusted gross profit Pipe $106,279 $92,066 $421,011 $258,681 Infiltrator Water Technologies 46,497 60,546 193,569 178,795 International 13,342 13,240 51,456 49,695 Allied Products & Other 78,401 72,785 293,472 204,063 Intersegment Eliminations 714 (44) 329 1,421 Total $245,233 $238,593 $959,837 $692,655 2022 2021 2022 2021 Reconciliation of Segment Adjusted Gross Profit: Total Gross Profit $223,917 $208,977 $895,987 $610,155 Depreciation and amortization 20,573 18,042 61,675 52,824 ESOP and stock-based compensation expense 743 11,574 2,175 29,676 Total Segment Adjusted Gross Profit $245,233 $238,593 $959,837 $692,655 (In thousands) (In thousands) Nine Months Ended December 31, Three Months Ended December 31, (In thousands) (In thousands) Nine Months Ended December 31, Three Months Ended December 31,

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![](ex992-q3fy23_vf019.jpg)

Reconciliations 19 2022 2021 2022 2021 Net income (loss) $83,182 $74,462 $425,041 $227,897 Depreciation and amortization 35,846 34,837 107,346 103,687 Interest expense 20,001 8,756 49,334 25,100 Income tax expense 26,068 28,792 128,641 82,063 EBITDA 165,097 146,847 710,362 438,747 Loss on disposal of assets and costs from exit and disposal activities (348) 3,466 (147) 2,554 Stock-based compensation expense 6,179 6,242 19,912 18,511 ESOP compensation expense — 17,221 — 43,389 Transaction costs (a) 1,334 2,145 3,417 3,022 Other adjustments (b) (2,525) 234 (1,562) 1,318 Adjusted EBITDA $169,737 $176,155 $731,982 $507,541 Three Months Ended December 31, (In thousands) (In thousands) Nine Months Ended December 31,

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## Exhibit 99.3

Exhibit 99.3

![adslogo.jpg](adslogo.jpg)

**ADVANCED DRAINAGE SYSTEMS ANNOUNCES QUARTERLY CASH DIVIDEND** 

HILLIARD, Ohio – (February 2, 2023) – Advanced Drainage Systems, Inc. (NYSE: WMS) ("ADS" or the "Company"), a leading provider of innovative water management solutions in the stormwater and on-site septic waste water industries, today announced that its Board of Directors (the "Board") has approved a quarterly cash dividend to its shareholders in the amount of $0.12 per share, a 9% increase over the prior year dividend amount.

Scott Barbour, President and Chief Executive Officer of Advanced Drainage Systems commented, "Today's dividend announcement is predicated on the strength of our balance sheet, formidable cash generation, and ongoing commitment to returning capital to shareholders. Our strong financial performance and operational excellence initiatives provide us with the confidence and financial flexibility to return excess cash to our shareholders while simultaneously continuing to strategically invest in our business."

The quarterly cash dividend of $0.12 per share will be paid on March 15, 2023, to shareholders of record at the close of business on March 1, 2023.

**<u>About the Company</u>**

Advanced Drainage Systems is a leading manufacturer of innovative stormwater and onsite septic wastewater solutions that manages the world's most precious resource: water. ADS provides superior drainage solutions for use in a wide variety of markets and applications including commercial, residential, infrastructure and agriculture. ADS delivers tremendous service to its customers with the industry's largest company-owned fleet, an expansive sales team, and a vast manufacturing network of approximately 70 manufacturing plants and 37 distribution centers. ADS is the largest plastic recycling company in North America, ensuring over half a billion pounds of plastic is kept out of landfills every year. Founded in 1966, ADS' water management solutions are designed to last for decades. To learn more, visit the Company's website at www.adspipe.com.

**<u>Forward Looking Statements</u>**

Certain statements in this press release may be deemed to be forward-looking statements. These statements are not historical facts but rather are based on the Company's current expectations, estimates and projections regarding the Company's business, operations and other factors relating thereto. Words such as "may," "will," "could," "would," "should," "anticipate," "predict," "potential," "continue," "expects," "intends," "plans," "projects," "believes," "estimates," "confident" and similar expressions are used to identify these forward-looking statements. Factors that could cause actual results to differ from those reflected in forward-looking statements relating to our operations and business include: fluctuations in the price and availability of resins and other raw materials and our ability to pass any increased costs of raw materials on to our customers in a timely manner; the risks related to the COVID-19 pandemic or other pandemics in the future; disruption or volatility in general business and economic conditions in the markets in which we operate; cyclicality and seasonality of the non-residential and residential construction markets and infrastructure spending; the risks of increasing competition in our existing and future markets; uncertainties surrounding the integration and realization of anticipated benefits of; the effect of weather or seasonality; the loss of any of our significant customers; the risks of doing business internationally; the risks of conducting a portion of our operations through joint ventures; our ability to expand into new geographic or product markets; the risk associated with manufacturing processes; the effect of global climate change; cybersecurity risks; our ability to manage our supply purchasing and customer credit policies; our ability to control labor costs and to attract, train and retain highly-qualified employees and key personnel; our ability to protect our intellectual property rights; changes in laws and regulations, including environmental laws and regulations; the risks associated with our current levels of indebtedness, including borrowings under our existing credit agreement and outstanding indebtedness under our existing senior notes; and other risks and uncertainties described in the Company's filings with the SEC. New risks and uncertainties emerge from time to time and it is not possible for the Company to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this press release. In light of the significant uncertainties inherent in the forward-looking information included herein, the inclusion of such information should not be regarded as a representation by the Company or any other person that the Company's expectations, objectives or plans will be achieved in the timeframe anticipated or at all. Investors are cautioned not to place undue reliance on the Company's forward-looking statements and the Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

**For more information, please contact:**

Michael Higgins

VP, Corporate Strategy & Investor Relations

(614) 658-0050

Michael.Higgins@adspipe.com

<br>