ADVANCED DRAINAGE SYSTEMS, INC.
For the period ended Mar 31, 2026. Filed May 21, 2026.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2026 · Filed May 21, 2026
WMS$124.31+1.4%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2025-03-31; filed 2025-05-15.
0001604028-25-000012
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2026-03-31; filed 2026-05-21.
0001604028-26-000019
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 108 previous paragraphs and 128 current paragraphs.
63 unchanged; 32 reworded; 21 added; 13 removed; 0 previous and 12 current paragraphs rearranged.
Tables are not compared: 11 previous and 17 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (21)
Current report
•Net sales increased 5.0% to $3.1 billion
Current report
•Net income from continuing operations decreased 5.0% to $429.9 million
Current report
•Adjusted EBITDA increased 8.3% to $962.9 million
Current report
•Free cash flow increased $200.7 million to $569.3 million
Current report
Net sales increased $146.1 million, or 5.0%, to $3,050.4 million, as compared to $2,904.2 million in the prior year. Stormwater sales increased $71.0 million, or 3.1%, to $2,397.4 million. Wastewater sales increased $75.1 million, or 13.0%, to $653.0 million.
Current report
Following the acquisition of NDS, the Company realigned its reportable segments to align with the manner in which the CODM assesses performance and makes resource allocation decisions. The Company’s revised reportable segments consist of Stormwater and Wastewater (formerly referred to as the “Infiltrator” reportable segment). Further, the Company changed the measure used to evaluate segment profitability from adjusted gross profit to Adjusted EBITDA. Segment results for the historical periods presented in these consolidated financial statements have been recast to reflect these changes. The Segment Realignment had no impact on our previously reported consolidated net sales, income from operations, net income attributable to ADS or earnings per share.
Current report
Our consolidated net sales for the fiscal year ended March 31, 2026 increased by $146.1 million, or 5.0%, compared to fiscal 2025. The increase in Stormwater sales was primarily driven by NDS net sales of $48.8 million and an increase in demand for our Allied Products in the non-residential construction market. The increase in Wastewater sales was primarily driven by an increase of Orenco net sales of $52.6 million to account for a full year of sales in fiscal 2026 and an increase in demand in the construction market.
Current report
Our consolidated Cost of goods sold for the fiscal year ended March 31, 2026 increased by $73.0 million or, 4.0%, and our consolidated Gross profit decreased by $73.1 million, or 6.7%, compared to the same period in fiscal 2025. The increase in gross profit for Stormwater is primarily due to favorable material costs and the acquisition of NDS. The increase in gross profit for Wastewater was driven by Orenco and volume.
Current report
Selling, general and administrative expenses for the fiscal year ended March 31, 2026 increased $89.2 million from the same period in fiscal 2025. The increase in Selling, general and administrative expenses is primarily the result of an increase in transaction costs of $31.5 million due to the acquisition of NDS, incremental operating expenses of NDS and Orenco, unfavorable incentive and stock-based compensation, and realignment expenses of $12.0 million.
Current report
Loss on disposal of assets and costs from exit and disposal activities- The loss on disposal in fiscal 2026 was due to exit and disposal activities related to plant closures and asset disposals partially offset by the sale of properties held-for-sale. See “Note 3. Restructuring and Loss (Gain) on Disposal of Assets and Costs from Exit and Disposal Activities” for additional information.
Current report
Interest expense- Interest expense increased $2.1 million for the fiscal year ended March 31, 2026 compared to the same period in fiscal 2025. The increase was primarily due to increased debt levels.
Current report
Net loss from discontinued operations- The loss from discontinued operations was attributable the NDS International entities classified as held for sale as of March 31, 2026.
Current report
(a)Includes costs associated with the optimization of the Company’s production, recycling and distribution network, as well as professional fees incurred in connection with supporting enterprise-wide restructuring and realignment initiatives. Excludes gain on sale of properties previously held-for-sale and equipment. See “Note 3. Restructuring and Loss (Gain) on Disposal of Assets and Costs from Exit and Disposal Activities” for additional information.
Current report
Investing Cash Flows -During fiscal 2026, cash used for investing activities was $1,211.8 million. The cash used for investing cash flows was primarily for the acquisition of NDS and capital expenditures. Capital expenditures increased in fiscal 2026 compared to fiscal 2025. Our capital expenditures in fiscal 2026 were used primarily to support facility expansions, equipment replacements, technology improvement initiatives and our corporate headquarters.
Current report
Financing Cash Flows- During fiscal 2026, cash provided by financing activities was $156.3 million. During fiscal 2026, we received proceeds from the Term Loan Facility (as defined below) and issued 2034 Notes (as defined below) of $600.0 million and $500.0 million, respectively, we repaid the Initial Term Loan Facility (as defined below) and the 2027 Notes (as defined below) of $413.3 million and $350.0 million, respectively. Additionally, we repurchased shares at a cost of $92.0 million and made dividend payments of $56.1 million.
Current report
Senior Secured Credit Facility -On July 31, 2019, we entered into a credit agreement (the “Base Credit Agreement”) by and among, the Company, as borrower, Barclays Bank PLC, as administrative agent, and several lenders from time to time party thereto. Among other things, the Base Credit Agreement provided for a term loan facility in the initial aggregate principal amount of $1.3 billion (the “Initial Term Loan Facility”) and a revolving credit facility in an initial aggregate amount of up to $350 million (the “Initial Revolving Credit Facility”), which included a sub-limit for a letter of credit sub-facility in the initial aggregate amount of up to $50 million.
Current report
On September 24, 2019, we entered into a First Amendment (the “First Amendment”) to the Company’s Base Credit Agreement subsequent to the common stock offering and Senior Notes due in 2027.
Current report
On November 26, 2025, the Company entered into a Third Amendment (the “Third Amendment”) to the Company’s Base Credit Agreement. Among other things, the Third Amendment modified the termination date of the Second Amended
Current report
Revolving Credit Facility to remove reference to the earliest maturity date of the loans outstanding under the Initial Term Loan Facility.
Current report
On February 27, 2026, the Company entered into a Fourth Amendment (the “Fourth Amendment”) to the Company’s Base Credit Agreement (the Base Credit Agreement as amended by the First Amendment, the Second Amendment, the Third Amendment and the Fourth Amendment, the “Credit Agreement”) with, among others, certain subsidiaries of the Company, as guarantors, Bank of America, N.A., as administrative agent under the Term Loan Facility (as defined below) and PNC Bank, National Association, as administrative agent under the Revolving Credit Facility (as defined below) and as successor administrative agent, Barclays Bank PLC, as predecessor administrative agent, and the several financial institutions from time to time party thereto as lenders. Among other things, the Fourth Amendment (i) increased the Amended Revolving Credit Facility from $600 million to $750 million (the “Revolving Credit Facility”), including an increase of the sub-limit for the letter of credit sub-facility from $60 million to $75 million, (ii) refinanced the outstanding amounts owing under the Initial Term Loan Facility by providing for a new term loan facility in the initial aggregate principal amount of $600 million (the “Term Loan Facility”), (iii) extended the maturity date of the Revolving Credit Facility to February 27, 2031, (iv) extended the maturity date of the Term Credit Facility to February 28, 2033, (v) revised the “applicable margin” to provide for a range of 125 basis points to 225 basis points (for Term Benchmark based loans) and 25 basis points to 125 basis points (for base rate loans), as determined based on the consolidated senior secured net leverage ratio ranging from less than 1.50 to 1.00 to greater than or equal to 3.50 to 1.00, (vi) provides for incremental facilities in the aggregate maximum amount of the greater of $350 million or 100% of consolidated EBITDA for the most recently ended four consecutive fiscal quarters, and (vii) amended certain covenant baskets under the Credit Agreement to align with the growth of the Company.
Current report
The Company is also required to pay a commitment fee that is based upon the undrawn amounts of the Revolving Credit Facility at a rate per annum based upon a calculated ratio as prescribed within the Credit Agreement. As of March 31, 2026, the rate the Company was committed to paying on the undrawn portion was equal to 0.15%.
Removed paragraphs (13)
Previous report
•Net sales increased 1.0% to $2.9 billion
Previous report
•Net income decreased 11.8% to $452.6 million
Previous report
•Net income per diluted share decreased 10.7% to $5.76
Previous report
•Adjusted EBITDA decreased 3.7% to $889.2 million
Previous report
•Free cash flow decreased $165.6 million to $368.5 million
Previous report
Net sales increased $29.8 million, or 1.0%, to $2,904.2 million, as compared to $2,874.5 million in the prior year. Domestic pipe sales decreased $40.9 million, or 2.6%, to $1,503.4 million. Domestic Allied Products & Other sales increased $16.6 million, or 2.5%, to $689.9 million. Infiltrator sales increased $67.3 million, or 15.0%, to $516.3 million. Excluding the acquisition of Orenco Systems, Inc. (“Orenco”), Infiltrator organic revenue increased 4.6%. The increase in overall domestic net sales was driven the growth of the Infiltrator business and Allied products portfolio as well as material conversion in the U.S. construction end markets. International sales decreased $13.1 million, or 6.3%, to $194.6 million.
Previous report
International - Our International segment manufactures and markets products in regions outside of the United States, with a strategy focused on our owned facilities in Canada and those markets serviced through our joint ventures in Mexico and South America. Pipe manufactured in these countries is primarily sold into the same region. Our joint venture strategy has provided us with local and regional access to new markets. The unconsolidated sales of the South American Joint Venture were $72.3 million, $75.9 million, and $69.5 million, in fiscal 2025, 2024, and 2023, respectively.
Previous report
Allied Products & Other - Our other operating segments manufacture a range of Allied Products & Other that are complementary to our Pipe products. Our Allied Products & Other offer adjacent technologies to our core Pipe offering, presenting a complete drainage solution for our clients and customers.
Previous report
The discussion of our results of operations for the fiscal year ended March 31, 2024 compared with the fiscal year ended March 31, 2023 can be found in “Item 7. Management’s Discussion and Analysis of Financial Discussion and Results of Operations” in our fiscal 2024 Form 10-K for further information on our prior period results of operations.
Previous report
In addition to the available liquidity above, we have the ability to borrow up to $1.3 billion under our Term Loan Facility, subject to leverage ratio restrictions.
Previous report
During fiscal 2023, cash used for investing activities was $214.5 million. The increase in cash used for investing cash flows was primarily due to elevated capital expenditures and the acquisition of Cultec, Inc. Our capital expenditures in fiscal 2023 were used primarily to support growth and our productivity initiatives, including automation and safety.
Previous report
During fiscal 2023, cash used in financing activities was $296.3 million. During fiscal 2023, we repurchased shares at a cost of $575.0 million; paid $114.3 million of the Revolving Credit Facility, net of proceeds, and made dividend payments of $44.9 million. The cash outflows were offset by $500.0 million of proceeds from Senior Notes due 2030.
Previous report
Senior Secured Credit Facility -On September 24, 2019, we successfully completed a $700 million syndication of the remaining balance of its credit facility (the “Term Loan Facility”) subsequent to the common stock offering and Senior Notes due 2027 and in connection with the syndication, we amended the Base Credit Agreement (the “Senior Secured Credit Facility”). The Senior Secured Credit Facility provided for a Revolving credit facility up to $350 million as a Revolving Facility, and up to $50 million as a letter of credit facility, as a sublimit of the Revolving Credit Facility.
Reworded paragraphs (32)
Previous wording
We are the leading manufacturer of innovative water management solutions in the stormwater and onsite septic wastewater industries, providing superior drainage solutions for use in the construction and agriculture marketplaces. Our innovative products, for which we hold many patents, are used across a broad range of end markets and applications, including non-residential, infrastructure and agriculture applications. We have established a leading position in many of these end markets by leveraging our national sales and distribution platform, industry-acclaimed engineering support, overall product breadth and scale plus manufacturing excellence.
Current wording
We are the leading manufacturer of innovative water management solutions in the stormwater and onsite wastewater industries, providing superior drainage solutions for use in the construction and agriculture marketplaces. Our innovative products, for which we hold many patents, are used across a broad range of end markets and applications, including non-residential, infrastructure and agriculture applications. We have established a leading position in many of these end markets by leveraging our national sales and distribution platform, industry-acclaimed engineering support, overall product breadth and scale plus manufacturing excellence.
Previous wording
Growth in Allied Products & Other -Our Allied Products & Other include storm and septic chambers, PVC drainage structures, fittings, stormwater filters and water separators. These products complement our pipe products and allow us to offer a comprehensive water management solution to our customers and drive organic growth. Our leading market position in pipe products allows us to cross-sell Allied Products effectively. Our comprehensive offering of Allied Products can also increase pipe sales in certain markets. Allied Products are less sensitive to resin prices since resin prices represent a smaller percentage of the cost for Allied Products. Our leading position in the pipe market has allowed us to increase organic growth of our Allied Products, and we also expect to expand our Allied Product offerings through acquisitions.
Current wording
Growth in Allied Products -Our Allied Products include storm and onsite wastewater chambers, PVC drainage structures, fittings, stormwater filters and water separators. These products complement our pipe products and allow us to offer a comprehensive water management solution to our customers and drive organic growth. Our leading market position in pipe products allows us to cross-sell Allied Products effectively. Our comprehensive offering of Allied Products can also increase pipe sales in certain markets. Allied Products are less sensitive to resin prices since resin prices represent a smaller percentage of the cost for Allied Products. Our leading position in the pipe market has allowed us to increase organic growth of our Allied Products, and we also expect to expand our Allied Product offerings through acquisitions, including our recent acquisition of NDS.
Previous wording
Material Conversion -Our HDPE and PP pipe, plastic leachfield chambers, septic tanks and related water management product lines compete with other manufacturers of similar products as well as manufacturers of alternative products made with traditional materials, such as concrete, steel and PVC. Our net sales are driven by market trends, including the adoption of thermoplastic corrugated pipe products as a replacement for traditional materials. Thermoplastic corrugated pipe is generally lighter, more durable, more cost effective and easier to install than comparable products made from traditional materials. We believe customers will continue to acknowledge the superior attributes and compelling value proposition of our thermoplastic products and expanded regulatory approvals allow for their use in new markets and geographies. In addition, we believe that PP pipe products will also help accelerate conversion given the additional applications for which our PP pipe products can be used.
Current wording
Material Conversion -Our HDPE and PP pipe, plastic leachfield chambers, onsite wastewater tanks and related water management product lines compete with other manufacturers of similar products as well as manufacturers of alternative products made with traditional materials, such as concrete, steel and PVC. Our net sales are driven by market trends, including the adoption of thermoplastic corrugated pipe products as a replacement for traditional materials. Thermoplastic corrugated pipe is generally lighter, more durable, more cost effective and easier to install than comparable products made from traditional materials. We believe customers will continue to acknowledge the superior attributes and compelling value proposition of our thermoplastic products and expanded regulatory approvals allow for their use in new markets and geographies. In addition, we believe that PP pipe products will also help accelerate conversion given the additional applications for which our PP pipe products can be used.
Previous wording
We currently purchase in excess of 1.0 billion pounds of virgin and recycled resin annually from approximately 400 suppliers in North America. As a high-volume buyer of resin, we are able to achieve economies of scale to negotiate favorable terms and pricing. Our purchasing strategies differ based on the material (virgin resin versus recycled material). The price movements of the different materials vary, resulting in the need to use a number of strategies to reduce volatility.
Current wording
We currently purchase in excess of 1.0 billion pounds of virgin and recycled resin annually from approximately 450 suppliers in North America. As a high-volume buyer of resin, we are able to achieve economies of scale to negotiate favorable terms and pricing. Our purchasing strategies differ based on the material (virgin resin versus recycled material). The price movements of the different materials vary, resulting in the need to use a number of strategies to reduce volatility.
Previous wording
•Cash provided by operating activities decreased $136.4 million to $581.5 million
Current wording
•Cash provided by operating activities increased $237.6 million to $819.1 million
Previous wording
Gross profit decreased $51.7 million, or 4.5%, to $1,094.2 million as compared to $1,145.9 million in the prior year. The decrease in gross profit is primarily driven by unfavorable pricing and material cost, partially offset by favorable volume, sales mix and manufacturing costs.
Current wording
Gross profit increased $73.1 million, or 6.7%, to $1,167.4 million as compared to $1,094.2 million in the prior year. The increase in gross profit is primarily driven by favorable volume, price/cost and mix of construction market and Infiltrator sales, partially offset by unfavorable fixed cost absorption as well as the mix impact from acquisitions.
Previous wording
Adjusted EBITDA, a non-GAAP financial measure, decreased $33.7 million, or 3.7%, to $889.2 million, as compared to $922.9 million in the prior year. The decrease is primarily due to the factors mentioned above. As a percentage of net sales, Adjusted EBITDA was 30.6% as compared to 32.1% in the prior year.
Current wording
Adjusted EBITDA, a non-GAAP financial measure, increased $73.7 million, or 8.3%, to $962.9 million, as compared to $889.2 million in the prior year. The increase is primarily due to the factors mentioned above. As a percentage of net sales, Adjusted EBITDA was 31.6% as compared to 30.6% in the prior year.
Previous wording
We operate our business in three distinct reportable segments: “Pipe”, “International” and “Infiltrator.” “Allied Products & Other” represents our Allied Products and all other business segments. We generate a greater proportion of our net sales and gross profit in our Pipe segment, which consists of Pipe product sales in the United States. We expect the percentage of total net sales and gross profit derived from our other segments to continue to increase in future periods as we continue to expand non-Pipe product and our international presence. See “Note 19. Business Segment Information,” to our audited consolidated financial statements included in “Item 8. Financial Statements and Supplementary Data” of this Form 10-K.
Current wording
We generate a greater portion of our net sales and Adjusted EBITDA in our Stormwater segment, which includes sales of high performance thermoplastic corrugated pipe and complementary products throughout the United States and certain international regions. We expect the percentage of total net sales and gross profit derived from the Wastewater segment to continue to increase in future periods as we continue to expand our wastewater management presence. See “Note 20. Business Segment Information” to our audited consolidated financial statements included in “Item 8. Financial Statements and Supplementary Data” of this Form 10-K.
Previous wording
Pipe - Our Pipe segment manufactures and markets high performance thermoplastic corrugated pipe throughout the United States. We maintain and serve these markets through product distribution relationships with many of the largest national and independent waterworks distributors, buying groups and co-ops, major national retailers as well as an extensive network of hundreds of small to medium-sized distributors across the United States.
Current wording
Stormwater - The Stormwater segment manufactures and markets high performance thermoplastic corrugated pipe and complementary products designed as an integrated, end-to-end solution set which provides a comprehensive approach to managing stormwater from the moment it hits the ground until it is cleaned and returned to its natural environment. In February 2026, the Company acquired NDS to further expand the Stormwater product offering, enhance go-to-market capabilities in retail and distributor channels, and expand the Stormwater addressable market. Stormwater products are sold and manufactured throughout the United States and certain international regions, including Company owned facilities in Canada, subsidiaries that distribute to Europe and the Middle East, and exports through the Company’s joint ventures with local partners in Mexico and South America. The Company maintains and serves these markets through product distribution relationships with many of the largest waterworks distributors, buying groups and co-ops, major retailers as well as an extensive network of hundreds of small to medium-sized distributors. Our joint venture strategy has provided us with local and regional access to new international markets. The unconsolidated sales of the South American Joint Venture were $75.6 million, $72.3 million, and $75.9 million, in fiscal 2026, 2025, and 2024, respectively.
Previous wording
Infiltrator - Infiltrator is a leading national provider of plastic leachfield chambers and systems, septic tanks and accessories, primarily for use in residential applications. Infiltrator products are used in onsite septic wastewater treatment systems in the United States and Canada.
Current wording
Wastewater- Wastewater (formerly “Infiltrator”) is a leading national provider of plastic leachfield chambers and systems, onsite wastewater tanks and accessories, primarily for use in residential applications. Wastewater products are used in onsite wastewater treatment systems in the United States and Canada.
Previous wording
Our consolidated net sales for the fiscal year ended March 31, 2025 increased by $29.8 million, or 1.0%, compared to fiscal 2024. The decrease in domestic Net sales for Pipe was primarily driven by unfavorable price/mix impact partially offset by higher demand. The increase in Net sales for Infiltrator was driven by improved price/mix and $46.4 million of net sales from Orenco. For the International segment, the decrease was driven by unfavorable price/mix and unfavorable foreign currency rates. The increase for Allied Products & Other was primarily driven by demand partially offset by unfavorable price/mix.
Current wording
Our consolidated net sales for the fiscal year ended March 31, 2025 increased by $29.8 million, or 1.0%, compared to fiscal 2024. The decrease in Net sales for Stormwater was primarily driven by unfavorable price/mix impact partially offset by higher demand in our Allied Products. The increase in Net sales for Wastewater was driven by improved price/mix and $46.4 million of net sales from Orenco.
Previous wording
Our consolidated Cost of goods sold for the fiscal year ended March 31, 2025 increased by $81.5 million or, 4.7%, and our consolidated Gross profit decreased by $51.7 million, or 4.5%, compared to the same period in fiscal 2024. The decrease in gross profit for Pipe is primarily due to unfavorable material cost and the decrease in Net sales. The increase in gross profit for Infiltrator was driven by improved pricing, improved material costs and the acquisition of Orenco. For the International segment, gross profit decreased due to same factors driving the decrease in Net sales. For Allied Products & Other, gross profit increased due to the same factors driving the decrease in Net sales.
Current wording
Our consolidated Cost of goods sold for the fiscal year ended March 31, 2025 increased by $81.5 million or, 4.7%, and our consolidated Gross profit decreased by $51.7 million, or 4.5%, compared to the same period in fiscal 2024. The decrease in gross profit for Stormwater is primarily due to unfavorable material cost and the decrease in Net sales in Pipe. The increase in gross profit for Wastewater was driven by improved pricing, improved material costs and the acquisition of Orenco.
Previous wording
EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin -EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin, non-GAAP financial measures, have been presented in this Annual Report on Form 10-K as supplemental measures of financial performance that are not required by, or presented in accordance with generally accepted accounting principles (“GAAP”) and should not be considered as alternatives to net income as measures of financial performance or any other performance measure derived in accordance with GAAP. We calculate Adjusted EBITDA as net income before interest, income taxes, depreciation and amortization, stock-based compensation expense, non-cash charges and certain other gains and expenses. We calculate Adjusted EBITDA Margin as Adjusted EBITDA divided by net sales.
Current wording
EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin -EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin, non-GAAP financial measures, have been presented in this Annual Report on Form 10-K as supplemental measures of financial performance that are not required by, or presented in accordance with generally accepted accounting principles (“GAAP”) and should not be considered as alternatives to net income as measures of financial performance or any other performance measure derived in accordance with GAAP. We calculate Adjusted EBITDA as net income from continuing operations before interest, income taxes, depreciation and amortization, stock-based compensation expense, non-cash charges and certain other gains and expenses. We calculate Adjusted EBITDA Margin as Adjusted EBITDA divided by net sales.
Previous wording
(a)Represents expenses recorded related to legal, accounting and other professional fees incurred in connection with business or asset acquisitions and dispositions.
Current wording
(b)Represents expenses recorded related to legal, accounting and other professional fees incurred in connection with business or asset acquisitions and dispositions.
Previous wording
(b)Includes derivative fair value adjustments, foreign currency transaction (gains) losses, legal settlements, inventory step-up costs, 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 (benefit).
Current wording
(c)Includes derivative fair value adjustments, foreign currency transaction (gains) losses, legal settlements, inventory step-up costs, 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 (benefit).
Previous wording
As of March 31, 2025, we had $22.5 million in cash that was held by our foreign subsidiaries, of which, $13.4 million was held by our Canadian subsidiaries. We continue to evaluate our strategy regarding foreign cash, but our earnings in foreign subsidiaries still remain indefinitely reinvested, except for Canada. See “Note 15. Income Taxes” for additional discussion of our plans to repatriate earnings from Canada.
Current wording
As of March 31, 2026, we had $25.7 million in cash that was held by our foreign subsidiaries, of which, $13.1 million was held by our Canadian subsidiaries. We continue to evaluate our strategy regarding foreign cash, but our earnings in foreign subsidiaries still remain indefinitely reinvested, except for Canada. See “Note 16. Income Taxes” for additional discussion of our plans to repatriate earnings from Canada.
Previous wording
In fiscal 2025, our cash balance decreased by $26.6 million. Cash generated from operations, changes in working capital and dispositions of assets was offset by the acquisition of Orenco, capital expenditures of $212.9 million, $69.9 million in share repurchases and $49.7 million of dividend payments. Our increase of cash in fiscal 2024 was $278.7 million. Cash generated from operations, changes in working capital and dispositions of assets was partially offset by $207.3 million in share repurchases and capital expenditures of $183.8 million and $47.7 million of dividend payments.
Current wording
In fiscal 2026, our cash balance decreased by $235.3 million. Cash outflows from the acquisition of NDS, repayment of the term loan and Senior Notes due 2027, and capital expenditures of $249.8 million were partially offset by cash generated from operations, issuance of the Senior Notes due 2034, proceeds from the new term loan facility, changes in working capital and dispositions of assets. Our decrease of cash in fiscal 2025 was $26.6 million. Cash generated from operations, changes in working capital and dispositions of assets was offset by the acquisition of Orenco, capital expenditures of $212.9 million, $69.9 million in share repurchases and $49.7 million of dividend payments.
Previous wording
As of March 31, 2025, we had $1,053.9 million in liquidity, including $463.3 million of cash, $590.6 million in borrowings available under our Revolving Credit Agreement, excluding $9.5 million of outstanding letters of credit. We believe that our cash on hand, together with the availability of borrowings under our Credit Agreement and other financing arrangements and cash generated from operations, will be sufficient to meet our working capital requirements, anticipated capital expenditures, and scheduled principal and interest payments on our indebtedness for at least the next twelve months.
Current wording
As of March 31, 2026, we had $962.9 million in liquidity, including $223.0 million of cash and $739.9 million in borrowings available under our Revolving Credit Agreement, excluding $10.1 million of outstanding letters of credit. We believe that our cash on hand, together with the availability of borrowings under our Credit Agreement and other financing arrangements and cash generated from operations, will be sufficient to meet our working capital requirements, anticipated capital expenditures, and scheduled principal and interest payments on our indebtedness for at least the next twelve months.
Previous wording
Working Capital - Working capital is an indication of liquidity and potential need for short-term funding. We define working capital as current assets less current liabilities. Working capital increased to $926.4 million as of March 31, 2025, from $860.3 million as of March 31, 2024, primarily due to increases in inventory to support projected sales and a decrease in accounts payable due to the timing of purchases.
Current wording
Working Capital - Working capital is an indication of liquidity and potential need for short-term funding. We define working capital as current assets less current liabilities. Working capital decreased to $721.4 million as of March 31, 2026, from $926.4 million as of March 31, 2025, primarily due to a decrease in cash due to the acquisition of NDS and capital expenditures, partially offset by cash flow from operations and the incremental working capital of NDS.
Previous wording
Operating Cash Flows -During fiscal 2025, 2024 and 2023, cash provided by operating activities was $581.5 million, $717.9 million and $707.8 million, respectively. Cash flow from operating activities for all periods was primarily driven by operating income and changes in working capital.
Current wording
Operating Cash Flows -During fiscal 2026, 2025 and 2024, cash provided by operating activities was $819.1 million, $581.5 million and $717.9 million, respectively. Cash flow from operating activities for all periods was primarily driven by operating income and changes in working capital.
Previous wording
Investing Cash Flows -During fiscal 2025, cash used for investing activities was $447.9 million. The cash used for investing cash flows was primarily from the acquisition of Orenco and capital expenditures. Capital expenditures increased in fiscal 2025 compared to fiscal 2024. Our capital expenditures in fiscal 2025 were used primarily to support new facilities, facility expansions to increase production capacity and recycling capabilities, manufacturing equipment replacements and upgrades, and technology initiatives to improve customer service.
Current wording
During fiscal 2025, cash used for investing activities was $447.9 million. The cash used for investing cash flows was primarily from the acquisition of Orenco and capital expenditures. Capital expenditures increased in fiscal 2025 compared to fiscal 2024. Our capital expenditures in fiscal 2025 were used primarily to support new facilities, facility expansions to increase production capacity and recycling capabilities, manufacturing equipment replacements and upgrades, and technology initiatives to improve customer service.
Previous wording
During fiscal 2024, cash used for investing activities was $155.7 million. The cash used for investing cash flows was primarily from capital expenditures offset with the disposition of assets or businesses. Capital expenditures increased in fiscal 2024 compared to fiscal 2023. Our capital expenditures in fiscal 2024 were used primarily to support new facilities, facility expansions, equipment replacements and technology improvement initiatives.
Current wording
During fiscal 2024, cash used for investing activities was $155.7 million. The cash used for investing cash flows was primarily from capital expenditures offset with the disposition of assets or businesses. Our capital expenditures in fiscal 2024 were used primarily to support new facilities, facility expansions, equipment replacements and technology improvement initiatives.
Previous wording
We currently anticipate that we will make capital expenditures of approximately $275 million in fiscal 2026 to focus on growth and productivity through increasing our manufacturing capacity and investing in automation. Such capital expenditures are expected to be financed using funds generated by operations. We had approximately $100 million of open orders through purchase commitments as of March 31, 2025.
Current wording
We currently anticipate that we will make capital expenditures of approximately $200 million in fiscal 2027 to focus on growth and productivity through increasing our manufacturing capacity and investing in automation. Such capital expenditures are expected to be financed using funds generated by operations. We had approximately $100 million of open orders through purchase commitments as of March 31, 2026.
Previous wording
Financing Cash Flows- During fiscal 2025, cash used in financing activities was $157.7 million. During fiscal 2025, we repurchased shares at a cost of $69.9 million and made dividend payments of $49.7 million.
Current wording
During fiscal 2025, cash used in financing activities was $157.7 million. During fiscal 2025, we repurchased shares at a cost of $69.9 million and made dividend payments of $49.7 million.
Previous wording
In May 2022, we entered into a Second Amendment (the “Second Amendment”) to our Company's Base Credit Agreement with Barclays Bank PLC, as administrative agent under the Term Loan Facility, PNC Bank, National Association, as new administrative agent under the Revolving Credit Facility. Among other things, the Second Amendment (i) amended the Base Credit Agreement by increasing the Revolving Credit Facility (the “Amended Revolving Credit Facility”) from$350.0 million to $600.0 million (including an increase of the sub-limit for the swing-line sub-facility from$50.0 million to $60.0 million) and extended the maturity date of the Revolving Credit Facility to May 26, 2027.
Current wording
On May 26, 2022, the Company entered into a Second Amendment (the “Second Amendment”) to the Company's Base Credit Agreement with, among others, Barclays Bank PLC, as administrative agent under the Initial Term Loan Facility, and PNC Bank, National Association, as new administrative agent under the Initial Revolving Credit Facility. Among other things, the Second Amendment (i) amended the Base Credit Agreement by increasing the Initial Revolving Credit Facility (the “Second Amended Revolving Credit Facility”) from$350.0 million to $600.0 million (including an increase of the sub-limit for the swing-line sub-facility from$50.0 million to $60.0 million) and extended the maturity date of the Revolving Credit Facility to the earlier of May 26, 2027 or the date that is six months prior to the earliest maturity date of the outstanding loans under the Initial Term Loan Facility.
Previous wording
At the option of the Company, borrowings under the Term Loan Facility and under the Amended Revolving Credit Facility (subject to certain limitations) bear interest at either a base rate (as determined pursuant to the Second Amendment) or at a Eurocurrency Rate, based on SOFR (as defined in the Second Amendment), plus the applicable margin as set forth therein from time to time. In the case of the Amended Revolving Credit Facility, the applicable margin is based on the Company's consolidated senior secured net leverage ratio (as defined in the Second Amendment). All borrowings under the Term Loan Facility as described above initially bear interest at a Eurocurrency Rate (as defined in the Amended Credit Facility). See“Note 12. Debt” for further information on the Term Loan Facility and Second Amendment.
Current wording
At the option of the Company, borrowings under the Term Loan Facility and under the Revolving Credit Facility (subject to certain limitations) bear interest at either a base rate (as determined pursuant to the Fourth Amendment) or at a Term Benchmark rate (as defined in the Fourth Amendment), plus the applicable margin as set forth therein from time to time. In the case of the Revolving Credit Facility, the applicable margin is based on the Company's consolidated senior secured net leverage ratio (as defined in the Fourth Amendment). All borrowings under the Term Loan Facility as described above initially bear interest at the Term Benchmark rate (as defined in the Fourth Amendment). In the case of the Term Loan Facility, the applicable margin shall be, for loans bearing interest at the Term Benchmark rate, 1.625%, and for loans bearing interest at the base rate, 0.625%.
Previous wording
The Company’s obligations under the Credit Agreement have been secured by granting a first priority lien on substantially all of the Company’s assets (subject to certain exceptions and limitations), and each of StormTech, LLC, Advanced Drainage of Ohio, Inc. and Infiltrator Water Technologies, LLC (collectively the “Guarantors”) has agreed to guarantee the obligations of the Company under the Senior Secured Credit Facility and to secure the obligations thereunder by granting a first priority lien in substantially all of such Guarantor's assets (subject to certain exceptions and limitations).
Current wording
The Company’s obligations under the Credit Agreement have been secured by granting a first priority lien on substantially all of the Company’s assets (subject to certain exceptions and limitations), and each of StormTech, LLC, Infiltrator Water Technologies, LLC, and Orenco Systems, Inc. (collectively the “Guarantors”) has agreed to guarantee the obligations of the Company under the Credit Agreement and to secure the obligations thereunder by granting a first priority lien in substantially all of such Guarantor's assets (subject to certain exceptions and limitations).
Previous wording
Issuance of Senior Notes due 2027 -On September 23, 2019, we issued $350.0 million aggregate principal amount of its senior notes (“2027 Notes”), pursuant to the Indenture dated September 23, 2019 (the “2027 Indenture”), among the Company, the guarantors party thereto (the “Guarantors”) and U.S. Bank National Association, as Trustee (the “Trustee”). The 2027 Notes were offered and sold either to persons reasonably believed to be “qualified institutional buyers” pursuant to Rule 144A under the Securities Act or to persons outside the United States under Regulation S of the Securities Act. We may redeem the 2027 Notes, in whole or in part, at any time on or after September 30, 2022 at established redemption prices set forth in the 2027 Indenture. See “Note 12. Debt” for further information on the 2027 Notes.
Current wording
Issuance of Senior Notes due 2027 -On September 23, 2019, we issued $350.0 million aggregate principal amount of senior notes (“2027 Notes”), pursuant to the Indenture dated September 23, 2019 (the “2027 Indenture”), among the Company, the guarantors party thereto (the “Guarantors”) and U.S. Bank Trust Company, National Association (formerly known as U.S. Bank National Association), as Trustee (the “Trustee”). The 2027 Notes were offered and sold either to persons reasonably believed to be “qualified institutional buyers” pursuant to Rule 144A under the Securities Act or to persons outside the United States under Regulation S of the Securities Act. We may redeem the 2027 Notes, in whole or in part, at any time on or after September 30, 2022 at established redemption prices set forth in the 2027 Indenture. On February 27, 2026, we redeemed all of our outstanding 2027 Notes in the original aggregate principal amount of $350.0 million at a redemption price equal to 100% of the principal amount plus accrued and unpaid interest, to, but excluding, the redemption date in connection with our issuance of $500.0 million aggregate principal amount of 5.375% senior notes due 2034 (the “2034 Notes”). See “Note 13. Debt” for further information on the 2027 Notes and 2034 Notes.
Previous wording
Equipment Financing - In November 2021, we purchased material handling equipment, trucks and trailers previously leased under a master lease agreement and classified as finance leases. The purchase was funded with debt through the Master Lease Agreement and Interim Funding Schedule with Fifth Third. The assets acquired are titled to the Company and included in Property, plant and equipment, net on our Consolidated Balance Sheet. The equipment financing has a balance of $6.0 million and had an initial term of between 12 and 84 months, based on the life of the equipment. The equipment financing bears a weighted average interest of 1.7% as of March 31, 2025.
Current wording
Equipment Financing - In November 2021, we purchased material handling equipment, trucks and trailers previously leased under a master lease agreement and classified as finance leases. The purchase was funded with debt through the Master Lease Agreement and Interim Funding Schedule with Fifth Third. The assets acquired are titled to the Company and included in Property, plant and equipment, net on our Consolidated Balance Sheet. The equipment financing has a balance of$3.1 million and had an initial term of between 12 and 84 months, based on the life of the equipment. The equipment financing bears a weighted average interest of 1.8% as of March 31, 2026.
Previous wording
The Senior Secured Credit Facility requires, if the aggregate amount of outstanding exposure under the Amended Revolving Credit Facility exceeds $210.0 million at the end of any fiscal quarter, the Company is to maintain a consolidated senior secured net leverage ratio not to exceed 4.25 to 1.00 for any four consecutive fiscal quarter periods.
Current wording
The Credit Agreement requires, if, on the last day of each fiscal quarter, the aggregate amount of outstanding exposure under the Revolving Credit Facility exceeds 35% of the aggregate maximum amount of commitments under the Revolving Credit Facility then in effect, the Company is to maintain a consolidated senior secured net leverage ratio not to exceed 4.25 to 1.00 for any four consecutive fiscal quarter periods.
Previous wording
The Senior Secured Credit Facility also includes other covenants, including negative covenants that, subject to certain exceptions, limit the Company's and its restricted subsidiaries’ (as defined in the Credit Agreement) ability to, among other things: (i) incur additional debt, including guarantees; (ii) create liens upon any of their property; (iii) enter into any merger, consolidation or amalgamation, liquidate, wind up or dissolve, or dispose of all or substantially all of their property or business; (iv) dispose of assets; (v) pay subordinated debt; (vi) make certain investments; (vii) enter into swap agreements; (viii) engage in transactions with affiliates; (ix) engage in new lines of business; (x) modify certain material contractual obligations, organizational documents, accounting policies or fiscal year; or (xi) create or permit restrictions on the ability of any subsidiary of any Loan Party (as defined in the Senior Secured Credit Facility) to pay dividends or make distributions to the Company or any of its subsidiaries.
Current wording
The Credit Agreement also includes other covenants, including negative covenants that, subject to certain exceptions, limit the Company's and its restricted subsidiaries’ (as defined in the Credit Agreement) ability to, among other things: (i) incur additional debt, including guarantees; (ii) create liens upon any of their property; (iii) enter into any merger, consolidation or amalgamation, liquidate, wind up or dissolve, or dispose of all or substantially all of their property or business; (iv) dispose of assets; (v) pay subordinated debt; (vi) make certain investments; (vii) enter into swap agreements; (viii) engage in transactions with affiliates; (ix) engage in new lines of business; (x) modify certain material contractual obligations, organizational documents, accounting policies or fiscal year; or (xi) create or permit restrictions on the ability of any subsidiary of any Loan Party (as defined in the Credit Agreement) to pay dividends or make distributions to the Company or any of its subsidiaries.
Previous wording
The Senior Secured Credit Facility also contains customary provisions requiring the following mandatory prepayments (subject to certain exceptions and limitations): (i) annual prepayments (beginning with the fiscal year ending March 31, 2021) with a percentage of excess cash flow (as defined in the Senior Secured Credit Facility); (ii) 100% of the net cash proceeds from any non-ordinary course sale of assets and certain casualty or condemnation events; and (iii) 100% of the net cash proceeds of indebtedness not permitted to be incurred under the Senior Secured Credit Facility. For further information, see “Note 12. Debt” to the Consolidated Financial Statements. We were in compliance with our debt covenants as of March 31, 2025.
Current wording
The Credit Agreement also contains customary provisions requiring the following mandatory prepayments (subject to certain exceptions and limitations): (i) annual prepayments (beginning with the fiscal year ending March 31, 2027) with a percentage of excess cash flow (as defined in the Credit Agreement); (ii) 100% of the net cash proceeds from any non-ordinary course sale of assets and certain casualty or condemnation events; and (iii) 100% of the net cash proceeds of indebtedness not permitted to be incurred under the Credit Agreement. For further information, see “Note 13. Debt” to the Consolidated Financial Statements. We were in compliance with our debt covenants as of March 31, 2026.
Rearranged current paragraphs (12)
Current report — wording carried from elsewhere
Intangible amortization- Intangible amortization increased by $6.9 million primarily due to the increase in intangible assets due to the NDS acquisition and the accelerated method of amortization for customer relationships.
Current report — wording carried from elsewhere
Interest income and other, net- Interest income and other, net increased by $10.6 million for the fiscal year ended March 31, 2026 compared to the same period in fiscal 2025. The increase was primarily due to increased cash balances in the fiscal year and unrealized gains related to derivatives.
Current report — wording carried from elsewhere
See “Note 16. Income Taxes” for additional information.
Current report — wording carried from elsewhere
Equity in net income of unconsolidated affiliates- The Equity in net income of unconsolidated affiliates increased for the fiscal year ended March 31, 2026 compared to the same period in fiscal 2025 due to the current period income at our South American Joint Venture.
Current report — wording carried from elsewhere
Net income attributable to noncontrolling interest- Net income attributable to noncontrolling interest was relatively flat for fiscal year ended March 31, 2026 compared to the same period in fiscal 2025.
Current report — wording carried from elsewhere
Results of Operations for Fiscal Year Ended March 31, 2025 Compared with Fiscal Year Ended March 31, 2024
Current report — wording carried from elsewhere
The following table summarizes our operating results as a percentage of net sales that have been derived from our Consolidated Financial Statements for the fiscal years ended March 31, 2025 and 2024. We believe this presentation is useful to investors in comparing historical results.
Current report — wording carried from elsewhere
Net sales- The following table presents net sales to external customers by reportable segment for the fiscal years ended March 31, 2025 and 2024.
Current report — wording carried from elsewhere
Cost of goods sold and Gross profit- The following table presents gross profit by reportable segment for the fiscal years ended March 31, 2025 and 2024.
Current report — wording carried from elsewhere
Selling, general and administrative expenses- The following table presents Selling, general and administrative expenses as a percentage of sales for the fiscal years ended March 31, 2025 and 2024.
Current report — wording carried from elsewhere
Income tax expense- The following table presents the effective tax rates for the fiscal years presented:
Current report — wording carried from elsewhere
Issuance of Senior Notes Due 2034- On February 27, 2026, we issued $500.0 million aggregate principal amount of 5.375% senior notes due 2034 pursuant to an Indenture, dated February 27, 2026 (the “2034 Indenture”), among the Company, the Guarantors and the Trustee. The 2034 Notes were offered and sold either to persons reasonably believed to be “qualified institutional buyers” pursuant to the Securities Act or to persons outside the United States under Regulation S of the Securities Act. See “Note 13. Debt” for further information on the 2034 Notes.