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What changed in ADVANCED DRAINAGE SYSTEMS, INC.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of ADVANCED DRAINAGE SYSTEMS, INC.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+210 added−211 removedSource: 10-K (2025-05-15) vs 10-K (2024-05-16)

Top changes in ADVANCED DRAINAGE SYSTEMS, INC.'s 2025 10-K

210 paragraphs added · 211 removed · 184 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

62 edited+12 added−9 removed79 unchanged
Biggest changeThis includes being honored many times during the past decade as the Plastics Pipe Institute’s Project of the Year. We have won 2 Table of Contents Advanced Drainage Systems, Inc. numerous awards from organizations such as the American Society of Testing & Materials (“ASTM”), the American Society of Civil Engineers, and many others.
Biggest changeWe have won numerous awards from organizations such as the American Society of Testing & Materials (“ASTM”), the American Society of Civil Engineers, and many others. 2 Table of Contents Advanced Drainage Systems, Inc Pipe Dual Wall Corrugated Pipe - Our N-12 pipe is a dual wall high-density polyethylene (“HDPE”) pipe with a corrugated exterior for strength and a smooth interior wall for hydraulics and flow capacity.
Our product line includes: single, double and triple wall corrugated polypropylene and polyethylene pipe (“Pipe”), plastic leachfield chambers and systems, septic tanks and accessories (or “Infiltrator”), and a variety of additional water management products (“Allied Products & Other” or “Allied Products”) including: storm retention/detention and septic chambers (“Chambers”); polyvinyl chloride drainage structures (“Structures”); fittings (“Fittings”); and water quality filters and separators (“Water Quality”).
Our product line includes: single, double and triple wall corrugated polypropylene and polyethylene pipe (“Pipe”), plastic leachfield chambers and systems, septic tanks and accessories (“Infiltrator”), and a variety of additional water management products (“Allied Products & Other” or “Allied Products”), including: storm retention/detention and septic chambers (“Chambers”); polyvinyl chloride drainage structures (“Structures”); fittings (“Fittings”); and water quality filters and separators (“Water Quality”).
We currently purchase in excess of 1.1 billion pounds of virgin and recycled resin annually from approximately 525 suppliers. As a high-volume buyer of resin, we achieve economies of scale to negotiate favorable terms and pricing. Our purchasing strategies differ based on the material (virgin resin versus recycled material) ordered for delivery to our production locations.
We currently purchase in excess of 1.0 billion pounds of virgin and recycled resin annually from approximately 400 suppliers. As a high-volume buyer of resin, we achieve economies of scale to negotiate favorable terms and pricing. Our purchasing strategies differ based on the material (virgin resin versus recycled material) ordered for delivery to our production locations.
Fiscal 2024 Revenue OUR PRODUCTS We design, manufacture and market a complete line of high performance thermoplastic corrugated pipe and related water management products for use in a wide range of end markets.
Fiscal 2025 Revenue OUR PRODUCTS We design, manufacture and market a complete line of high performance thermoplastic corrugated pipe and related water management products for use in a wide range of end markets.
Storm Chambers - Our StormTech and Cultec, acquired in April 2022, chambers are used for stormwater retention, detention and “first flush” underground water storage on residential and non-residential site development along with public projects. These highly engineered chambers are injection molded or thermoformed from HDPE and PP resins into a proprietary design which provides strength, durability, and resistance to corrosion.
Storm Chambers - Our StormTech and Cultec chambers are used for stormwater retention, detention and “first flush” underground water storage on residential and non-residential site development along with public projects. These highly engineered chambers are injection molded or thermoformed from HDPE and PP resins into a proprietary design which provides strength, durability, and resistance to corrosion.
Management’s Discussion and Analysis of Financial Condition and Results of Operations” of this Form 10-K. CORPORATE AND AVAILABLE INFORMATION We were founded in 1966 and are a Delaware corporation. Our principal executive offices are located at 4640 Trueman Boulevard, Hilliard, Ohio 43026, and our telephone number at that address is (614) 658-0050.
Management’s Discussion and Analysis of Financial Condition and Results of Operations” of this Form 10-K. CORPORATE AND AVAILABLE INFORMATION We were founded in 1966 and are a Delaware corporation. Our principal executive offices are located at 4640 Trueman Boulevard, Hilliard, Ohio 43026, and our telephone number at that address is (614) 658-0050. Our corporate website is www.adspipe.com.
In November 2023, we announced a plan to build a new pipe manufacturing facility on a 100-acre site in Lake Wales, Florida. The facility is designed with the future workforce in mind, promoting safety, efficient flow of materials and traffic, and incorporating the Company’s most advanced automation technologies for the manufacturing of corrugated thermoplastic pipe.
In November 2023, we announced a plan to build a new pipe manufacturing facility on a site in Florida. The facility is designed with the future workforce in mind, promoting safety, efficient flow of materials and traffic, and incorporating the Company’s most advanced automation technologies for the manufacturing of corrugated thermoplastic pipe.
We are dedicated to fostering an inclusive culture, empowering employees and communities by embracing the dynamics of different backgrounds, experiences and perspectives. We are committed to creating an environment where employees feel valued, respected, and fully engaged to contribute to our future success. The ability to recruit, retain, develop and protect our global workforce is key to our success.
We are dedicated to fostering a culture that empowers employees and communities by embracing the dynamics of different backgrounds, experiences and perspectives. We are committed to creating an environment where employees feel valued, respected, and fully engaged to contribute to our future success. The ability to recruit, retain, develop and protect our global workforce is key to our success.
The product family includes inline drains, drain basins, curb inlets and water control structures which move surface-collected stormwater vertically down to pipe conveyance systems. These custom structures are fabricated from sections of PVC pipe using a thermoforming process to achieve exact site-specific hydraulic design requirements.
The product family includes inline drains, drain basins, curb inlets and water control structures which move surface-collected 4 Table of Contents Advanced Drainage Systems, Inc stormwater vertically down to pipe conveyance systems. These custom structures are fabricated from sections of PVC pipe using a thermoforming process to achieve exact site-specific hydraulic design requirements.
The table below summarizes the percentage of Net Sales for Pipe, Infiltrator, International and Allied Products & Other. 2024 2023 2022 Pipe 53.7 % 55.9 % 55.6 % Infiltrator 15.6 % 14.4 % 16.6 % International 7.2 % 7.2 % 7.4 % Allied Products & Other 23.5 % 22.5 % 20.4 % Our products and engineering project designs have been continuously and frequently recognized by the industry.
The table below summarizes the percentage of Net Sales for Pipe, Infiltrator, International and Allied Products & Other. 2025 2024 2023 Pipe 51.8 % 53.7 % 55.9 % Infiltrator 17.8 % 15.6 % 14.4 % International 6.7 % 7.2 % 7.2 % Allied Products & Other 23.8 % 23.5 % 22.5 % Our products and engineering project designs have been continuously and frequently recognized by the industry.
Our customer service organization is supplemented by the employees of our manufacturing plants, distribution centers and drivers of our tractor-trailers. In conjunction with our field sales and engineering team, this highly trained and competent staff allows us to maintain more customer touch points and interaction than any of our competitors. 8 Table of Contents Advanced Drainage Systems, Inc.
Our customer service organization is supplemented by the employees of our manufacturing plants, distribution centers and drivers of our tractor-trailers. In conjunction with our field sales and engineering team, this highly trained and competent staff allows us to maintain more customer touch points and interaction than any of our competitors.
OUR MANUFACTURING AND DISTRIBUTION PLATFORM We have a leading domestic and international manufacturing and distribution infrastructure, serving customers throughout the United States, Canada, Mexico and other countries worldwide through 64 manufacturing plants and 41 distribution centers, including eight manufacturing plants and seven distribution centers owned or leased by our joint ventures.
OUR MANUFACTURING AND DISTRIBUTION PLATFORM We have a leading domestic and international manufacturing and distribution infrastructure, serving customers throughout the United States, Canada, Mexico and other countries worldwide through 63 manufacturing plants and 39 distribution centers, including six manufacturing plants and eight distribution centers owned or leased by our joint ventures.
Tank Products – Our Infiltrator tanks line, including our IM-Series and CM-Series septic tanks, are injection or compression molded polypropylene plastic tanks manufactured from recycled materials. Our Infiltrator tanks are available in various capacities for wastewater storage. Our IM-Series is the only two-piece construction, injection molded septic tank 3 Table of Contents Advanced Drainage Systems, Inc. design in North America.
Tank Products - Our Infiltrator tanks line, including our IM-Series and CM-Series septic tanks, are injection or compression molded polypropylene plastic tanks manufactured from recycled materials. Our Infiltrator tanks are available in various capacities for wastewater storage. Our IM-Series is the only two-piece construction, injection molded septic tank design in North America.
We strive to achieve less than three-day lead-time on deliveries and have the added benefit of redeploying fleet and driver assets to respond to short-term regional spikes in sales activity.
We strive to achieve less than three-day lead-time on deliveries and have the added benefit of redeploying fleet and driver 7 Table of Contents Advanced Drainage Systems, Inc assets to respond to short-term regional spikes in sales activity.
Our U.S. facilities follow the Occupational Safety and Health Act (“OSHA”) safety and health general industry standards under the Department of Labor and Federal Motor Carrier Safety Administration under the Department of Transportation, as required by law; our Canadian facilities follow the Canada Occupational Health and Safety Regulations under the Canada Labour Code for the Minister of Labour and Canada Motor Vehicle Safety Standards (“CMVSS”) under Transport Canada as required by law; and our Mexico locations follow the NOMs as required by the Federal Labor Law for the Labor Ministry (“STPS”) and Secretary of Communication and Transportation as required by law.
Our U.S. facilities follow the Occupational Safety and Health Act safety and health general industry standards under the Department of Labor and Federal Motor Carrier Safety Administration under the Department of Transportation, as required by law; our Canadian facilities follow the Canada Occupational Health and Safety Regulations under the Canada Labour Code for the Minister of Labour and Canada Motor Vehicle Safety 10 Table of Contents Advanced Drainage Systems, Inc Standards under Transport Canada as required by law; and our Mexico locations follow the NOMs as required by the Federal Labor Law for the Labor Ministry and Secretary of Communication and Transportation as required by law.
These systems when installed in a bed of sand provide combined treatment and dispersal in the same small footprint and at a reduced cost with minimal long-term maintenance. Our ATL product is an alternative combined treatment and dispersal system that provides advanced wastewater treatment. The ATL is a profile of polystyrene aggregates and geotextiles installed in a bed of sand.
These systems when installed in a bed of sand provide combined treatment and dispersal in the same small footprint and at a reduced cost with minimal long-term maintenance. 3 Table of Contents Advanced Drainage Systems, Inc Our ATL product is an alternative combined treatment and dispersal system that provides advanced wastewater treatment.
Allied Products & Other We produce a range of Allied Products that are complementary to our Pipe products. Our Allied Products offer adjacent technologies to our core Pipe offering, presenting a complete drainage solution for our clients and customers with this combination forming a key strategy in our sales growth, profitability and market share penetration.
Our Allied Products offer adjacent technologies to our core Pipe offering, presenting a complete drainage solution for our clients and customers with this combination forming a key strategy in our sales growth, profitability and market share penetration.
Our effective shipping radius is approximately 300 miles from one of our manufacturing plants or distribution centers. The combination of a dedicated fleet and team of company drivers allows greater flexibility and responsiveness in meeting dynamic customer job site delivery expectations.
Fleet - We also operate an in-house fleet of approximately 600 tractors. Our effective shipping radius is approximately 250 miles from one of our manufacturing plants or distribution centers. The combination of a dedicated fleet and team of company drivers allows greater flexibility and responsiveness in meeting dynamic customer job site delivery expectations.
These interconnecting 4 Table of Contents Advanced Drainage Systems, Inc. chambers are favored by septic contractors because they are lightweight and easy to install, and the Arc chamber offers articulating features which increase site-specific design flexibility. The ARC chamber products are manufactured by Infiltrator.
These interconnecting chambers are favored by septic contractors because they are lightweight and easy to install, and the ARC chamber offers articulating features which increase site-specific design flexibility. The ARC chamber products are manufactured by Infiltrator.
Fiscal 2024 Materials Purchased Further, we are focused on a program of continuous sustainability improvement, with approximately 360 million pounds of post-consumer and post-industrial recycled HDPE and 130 million pounds of post-consumer and post-industrial recycled polypropylene converted each year to make our products.
Further, we are focused on a program of continuous sustainability improvement, with approximately 300 million pounds of post-consumer and post-industrial recycled HDPE and 135 million pounds of post-consumer and post-industrial recycled polypropylene converted each year to make our products.
In addition, there are many HDPE pipe producers in the United States. We believe we are the only corrugated HDPE pipe producer with a national footprint, and our competitors operate primarily on a regional and local level.
In addition, there are many HDPE pipe producers in the United 9 Table of Contents Advanced Drainage Systems, Inc States. We believe we are the only corrugated HDPE pipe producer with a national footprint, and our competitors operate primarily on a regional and local level.
Our production equipment is built to accept transportable molds and die tooling over a certain range of sizes, so each plant is not required to house the full range of tooling at any given time.
Additional capacity is in place to support seasonal production needs and expected growth. Our production equipment is built to accept transportable molds and die tooling over a certain range of sizes, so each plant is not required to house the full range of tooling at any given time.
Vehicle dimensions and driver hours of service also remain subject to both federal and state regulation. We have been able to consistently capitalize on changes in both local and federal regulatory statutes relating to storm and sanitary sewer construction, repair and replacement.
Vehicle dimensions and driver hours of service also remain subject to both federal and state regulation. We have been able to consistently capitalize on changes in both local and federal regulatory statutes relating to storm and sanitary sewer construction, repair and replacement. Most noteworthy is the Federal Clean Water Act of 1972 and the subsequent U.S.
Most noteworthy is the Federal Clean Water Act of 1972 and the subsequent EPA Phase I, II and sustainable infrastructure regulations relating to storm sewer construction, stormwater quantity, stormwater quality, and combined sewer separation. Our diversity of products offering a solution-based selling approach coupled with detailed market knowledge makes us an integral industry resource in both regulatory changes and compliance.
Environmental Protection Agency Phase I, II and sustainable infrastructure regulations relating to storm sewer construction, stormwater quantity, stormwater quality, and combined sewer separation. Our diversity of products offering a solution-based selling approach coupled with detailed market knowledge makes us an integral industry resource in both regulatory changes and compliance.
Infiltrator Infiltrator is the leading designer and manufacturer of highly engineered plastic chambers, synthetic aggregate leachfields, combined treatment and dispersal systems, plastic tanks, active treatment systems, and related accessories that are used in septic systems and decentralized commercial wastewater treatment systems.
Infiltrator Infiltrator is the leading designer and manufacturer of highly engineered plastic chambers, synthetic aggregate leachfields, combined treatment and dispersal systems, plastic tanks, advanced treatment systems, and related accessories that are used in septic systems and decentralized commercial wastewater treatment systems. In addition to the core Infiltrator products discussed below, Orenco Systems, Inc.
In addition to providing competitive compensation and benefits, this includes the following categories: Health and Safety; Values; Diversity, Equity & Inclusion; and Training. 9 Table of Contents Advanced Drainage Systems, Inc. Employees - As of March 31, 2024, in our domestic and international operations, the Company and its consolidated subsidiaries had both hourly personnel and salaried employees.
In addition to providing competitive compensation and benefits, this includes the following categories: Health and Safety; Values; and Training. Employees - As of March 31, 2025, in our domestic and international operations, the Company and its consolidated subsidiaries had both hourly personnel and salaried employees.
Our corporate website is www.adspipe.com. 11 Table of Contents Advanced Drainage Systems, Inc. Our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to reports filed pursuant to Sections 13(a) and 15(d) of the Securities Exchange Act of 1934, as amended, (“Exchange Act”) are filed with the SEC.
Our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to reports filed pursuant to Sections 13(a) and 15(d) of the Securities Exchange Act of 1934, as amended, (“Exchange Act”) are filed with the SEC.
The goals include: a commitment to increase our use of recycled plastic, commit to operation clean sweep for plastic pellet management, implement a supplier sustainability program, reduce our total recordable injury rate, implement closed-loop water usage at all our manufacturing locations, continue our efforts in diversity, equity and inclusion and maintain transparency in our sustainability reporting efforts.
The goals include: a commitment to increase our use of recycled plastic, a commitment to operation clean sweep for plastic pellet management, implementing a supplier sustainability program, reducing our total recordable injury rate, implementing closed-loop water usage at all our manufacturing locations, continuing our efforts in culture and employee engagement and maintaining transparency in our sustainability reporting efforts.
These products assist our customers in meeting sustainability targets such as LEED or ENVISION certification while also allowing them to make needed repairs to aging infrastructure, plan for and mitigate future impacts from climate change and rapidly recover from catastrophic events when necessary.
These products assist our customers in meeting sustainability targets such as LEED or ENVISION certification while also allowing them to make needed repairs to aging infrastructure, plan for and mitigate future impacts from climate change and rapidly recover from catastrophic events when necessary. Our manufacturing facilities have no material process-related by-products released into the atmosphere, waterways, or solid waste discharge.
We maintain relationships with several of the largest environmental companies which provide us with post-consumer HDPE and PP recycled materials. We also maintain relationships with several key post-industrial HDPE and PP suppliers which provide us with materials that cannot otherwise be utilized in their respective production processes. We are one of the largest domestic recyclers of HDPE and PP.
We also maintain relationships with several key post-industrial HDPE and PP suppliers which provide us with materials that cannot otherwise be utilized in their respective production processes.
In fiscal 2022, we announced our 10 Year Sustainability Goals, which are available on our website. The goals are a set of targets focused on the “REASON” in “Our Reason is Water” and demonstrate our commitment to leadership in environment, social and governance.
The goals are a set of targets focused on the “REASON” in “Our Reason is Water” and demonstrate our commitment to leadership in environment, social and governance.
Conceptual project visibility allows sales and engineering professionals the ability to influence design specifications and increase the probability of inclusion of our products in bid documents. The inclusion of our products in bid documents improves the probability of completing the sale. On-demand installation support allows us to maintain customer relationships and ensure positive installation experience.
Conceptual project visibility allows sales and engineering professionals the ability to influence design specifications and increase the probability of inclusion of our products in bid documents. The inclusion of our products in bid documents improves the probability of completing the sale.
We also have wholly-owned subsidiaries that distribute our pipe and related products in Europe and the Middle East. Combining local partners’ customer relationships, brand recognition and local management talent, with our world-class manufacturing and process expertise, broad product portfolio and innovation creates a powerful solution driven platform and opportunities for continued profitable international expansion.
Combining local partners’ customer relationships, brand recognition and local management talent, with our world-class manufacturing and process expertise, broad product portfolio and innovation creates a powerful solution driven platform and opportunities for continued profitable international expansion.
As illustrated in the charts below, we provide a broad range of high performance thermoplastic corrugated pipe and related water management products to a highly diversified set of end markets and geographies.
Financial Statements and Supplementary Data” of this Form 10-K. 1 Table of Contents Advanced Drainage Systems, Inc As illustrated in the charts below, we provide a broad range of high performance thermoplastic corrugated pipe and related water management products to a highly diversified set of end markets and geographies.
These products, which meet an ASTM International standard and an American Association of State Highway and Transportation Officials standard, replaces a majority of the virgin resin that is used with optimized recycled materials.
These products, which meet an ASTM International standard and an American Association of State Highway and Transportation Officials standard, replaces a majority of the virgin resin that is used with optimized recycled materials. The manufacturing of septic leach field chambers and tanks leverage these same core competencies in the use of recycled polypropylene material streams.
Combined Treatment and Dispersal Products - Combined Treatment and Dispersal Products includes our Advanced Enviro-Septic (“AES”), previously known as Presby Treatment Dispersal Systems, and Advanced Treatment Leachfield (“ATL”). Our AES systems are proprietary combined treatment and dispersal systems made with a twelve-inch diameter corrugated extrusion product that is encapsulated in fibrous materials and geotextiles.
Our AES and ES systems are proprietary combined treatment and dispersal systems made with a twelve-inch diameter corrugated extrusion product that is encapsulated in fibrous materials and geotextiles.
This recycling capacity not only contributes to our sustainability initiatives through the promotion of a circular economy, but also allows us to better and more quickly serve the needs of our customers. We leverage our raw material blending and processing technologies to produce an HDPE pipe that incorporates recycled resin.
This recycling capacity not only contributes to our sustainability initiatives through the promotion of a circular economy, but also allows us to better and more quickly serve the needs of our customers.
We serve international markets primarily in Mexico, Central America and South America through joint venture operations with local partners. Our joint venture strategy has provided us with local and regional access to key markets such as Mexico, Brazil, Chile, Argentina, and Peru. Our international joint ventures produce pipe and related products to be sold in their respective regional markets.
Our joint venture strategy has provided us with local and regional access to key markets such as Mexico, Brazil, Chile, Argentina, and Peru. Our international joint ventures produce pipe and related products to be sold in their respective regional markets. We also have wholly-owned subsidiaries that distribute our pipe and related products in Europe and the Middle East.
Through our ADS Academy, we deliver targeted role-specific training to our operations team members through a blended curriculum of online and hands-on training experiences covering safety, 10 Table of Contents Advanced Drainage Systems, Inc. quality, product knowledge and manufacturing process.
Training - Our operational and management training programs are core to our commitment and enablement of a safe and productive manufacturing environment. Through our ADS Academy, we deliver targeted role-specific training to our operations team members through a blended curriculum of online and hands-on training experiences covering safety, quality, product knowledge and manufacturing process.
Corrugated pipe can easily be cut or coupled together, providing precise laying lengths while minimizing installation waste and difficulty. HP Storm Pipe and SaniTite HP Pipe - Our HP Storm pipe utilizes polypropylene (“PP”) resin, which provides: (i) increased pipe stiffness relative to HDPE; (ii) higher Environmental Stress Crack Resistance (“ESCR”); and (iii) improved thermal properties, which improves joint performance.
HP Storm Pipe and SaniTite HP Pipe - Our HP Storm pipe utilizes polypropylene (“PP”) resin, which provides: (i) increased pipe stiffness relative to HDPE; (ii) higher Environmental Stress Crack Resistance; and (iii) improved thermal properties, which improves joint performance.
This transportability provides us with the flexibility to optimize our capacity through centrally coordinated production planning, which helps to adapt to shifting sales demand patterns while reducing the capital needed for tooling.
This transportability provides us with the flexibility to optimize our capacity through centrally coordinated production planning, which helps to adapt to shifting sales demand patterns while reducing the capital needed for tooling. With our large manufacturing footprint, we can support rapid seasonal demand growth while focusing on customer service and minimizing transportation costs.
In the quality area, various national and international agencies such as National Transportation Product Evaluation Program (“NTPEP”), International Association of Plumbing and Mechanical Officials (“IAPMO”), Bureau de normalisation du Québec (“BNQ”), Intertek for Canadian Standards Association (“CSA”), Entidad Mexicana de Acreditacion A.C.
In the quality area, various national and international agencies such as National Transportation Product Evaluation Program, International Association of Plumbing and Mechanical Officials, Bureau de normalisation du Québec, Intertek for Canadian Standards Association, Entidad Mexicana de Acreditacion A.C. and NSF International and several state Departments of Transportation and municipal agencies conduct both scheduled and unscheduled audits/inspections of our plants to verify product quality and compliance to applicable standards.
ENVIRONMENTAL, HEALTH AND SAFETY MATTERS We are subject to a broad range of foreign, federal, state and local environmental, health and safety laws and regulations, including those pertaining to air emissions, water discharges, the handling, disposal and transport of solid and hazardous materials and wastes, the investigation and remediation of contamination and otherwise relating to health and safety and the protection of the environment and natural resources.
Over the past 10 years, the team has successfully embarked in over 100 regulatory initiatives increasing the addressability and size of markets across the U.S. and Canada. 11 Table of Contents Advanced Drainage Systems, Inc ENVIRONMENTAL, HEALTH AND SAFETY MATTERS We are subject to a broad range of foreign, federal, state and local environmental, health and safety laws and regulations, including those pertaining to air emissions, water discharges, the handling, disposal and transport of solid and hazardous materials and wastes, the investigation and remediation of contamination and otherwise relating to health and safety and the protection of the environment and natural resources.
Our N-12 pipe is available in a wide range of diameters and sections of length. N-12 provides joint integrity, with integral bell and spigot joints for fast push-together installations and is sold either with watertight or soil-tight coupling and fitting systems. Our corrugated polyethylene pipe offers many benefits including ease of installation, job-site handling and resistance to corrosion and abrasion.
Our N-12 pipe competes in the storm sewer and drainage markets that are also served by concrete pipe. Our N-12 pipe is available in a wide range of diameters and sections of length. N-12 provides joint integrity, with integral bell and spigot joints for fast push-together installations and is sold either with watertight or soil-tight coupling and fitting systems.
The Quick4 and Arc chambers are engineered for strength and performance, easy to install, and offer the user greater design flexibility, including a smaller footprint, as compared with traditional stone and pipe products. The product advantages are cost savings on labor, materials and time savings on the job.
There are Quick4, Quick5 and ARC line chamber models available to meet a wide variety of regulatory and market needs. The Quick4, Quick5 and ARC chambers are engineered for strength and performance, easy to install, and offer the user greater design flexibility, including a smaller footprint, as compared with traditional stone and pipe products.
As of March 31, 2024, approximately 230 hourly personnel in our Mexican joint venture were covered by collective bargaining agreements. Five employees at one US location are negotiating a collective bargaining agreement.
As of March 31, 2025, approximately 200 hourly personnel in our Mexican joint venture were covered by collective bargaining agreements.
We base hiring and promotional decisions on job qualifications, such as work records, performance history and length of service, to ensure equal opportunity to all. We also ensure equal opportunity across all relevant aspects of employment such as recruiting, job assignment, compensation, benefits, transfers, promotional opportunities, Company sponsored training, and recreation programs, among others.
We also ensure equal opportunity across all relevant aspects of employment such as recruiting, job assignment, compensation, benefits, transfers, promotional opportunities, Company sponsored training, and recreation programs, among others. Health and Safety - Employee safety is our highest priority and a key component of our company culture.
EZflow - EZflow synthetic aggregate bundles replace stone and pipe leachfields for effluent and drainage applications. The EZflow proprietary products are a modular design that incorporates recycled polystyrene aggregate bundles and corrugated polyethylene pipe that act as a replacement to the traditional materials stone and pipe.
The EZflow proprietary products are a modular design that incorporates recycled polystyrene aggregate bundles and corrugated polyethylene pipe that act as a replacement to the traditional materials stone and pipe. Combined Treatment and Dispersal Products - Combined Treatment and Dispersal Products include our AeroFin, Advanced Enviro-Septic (“AES”), Enviro-Septic (“ES”), and Advanced Treatment Leachfield (“ATL”).
We believe that we are well positioned for future growth as we add additional recycled material processing facilities, add capacity to existing facilities, and expand our supplier base for recycled and virgin resin. We anticipate continued growth in the availability of ethylene and propylene which are used to manufacture HDPE and PP, respectively.
ADS Recycling procures and processes recycled raw materials that can be used in products we produce and sell. We believe that we are well positioned for future growth as we add additional recycled material processing facilities, add capacity to existing facilities, and expand our supplier base for recycled and virgin resin.
IM-Series potable tanks are commonly used in water cistern applications, such as rainwater harvesting systems. Advanced Treatment Systems – Our Advanced Treatment Systems, previously known as Delta Treatment Systems, provide a higher level of wastewater purification through mechanical aeration wastewater for residential and commercial systems with daily flows up to 100,000 gallons per day.
IM-Series potable tanks are commonly used in water cistern applications, such as rainwater harvesting systems. Residential Advanced Treatment Products - Our Advanced Treatment Systems provide a higher level of wastewater purification through mechanical aeration wastewater for residential systems. Our advanced treatment systems product line for residential applications includes ECOPOD, ENVIRO-AIRE, Whitewater, and Orenco Advantex (AX-20 and AX-RT).
Ferguson Enterprises (“Ferguson”) accounted for 13.3% and Core and Main accounted for 12.5% of fiscal 2024 net sales. Our customer base is diversified across the range of end markets that we serve.
CUSTOMERS We have a large, active customer base of approximately 16,000 customers, with two customers representing 10% or more of fiscal 2025 net sales. Ferguson Enterprises (“Ferguson”) accounted for 14.3% and Core & Main, Inc. (“Core & Main”) accounted for 12.7% of fiscal 2025 net sales. Our customer base is diversified across the range of end markets that we serve.
We manufacture our corrugated pipe products using a continuous extrusion process, where polyethylene or polypropylene is extruded through a die into a moving series of corrugated U-shaped molds. We utilize customized and proprietary production equipment, which we believe produces higher quality final products and is more cost efficient than other pipe making equipment generally available in the market.
We manufacture our corrugated pipe products using a continuous extrusion process, where polyethylene or polypropylene is extruded through a die into a moving series of corrugated U-shaped molds.
The onsite wastewater (septic) market is heavily reliant on rural homes and communities that do not have access to centralized sewer and will require an onsite wastewater or septic solution. Onsite wastewater technologies are scalable and can easily meet the needs of churches, schools, light commercial and small community construction projects.
(“Orenco”) was acquired in October of 2024 and added to the Infiltrator segment. The onsite wastewater (septic) market is heavily reliant on rural homes and communities that do not have access to centralized sewer and will require an onsite wastewater or septic solution.
Our molds and machines have been designed to maximize interchangeability in order to optimize flexibility, maximize efficiency and minimize downtime. The standard fittings products (tees, wyes, elbows, etc.) that we produce and sell to connect our pipe on job sites are blow molded or injection molded at three domestic plants.
The standard fittings products (tees, wyes, elbows, etc.) that we produce and sell to connect our pipe on job sites are blow molded or injection molded at three domestic plants. In addition, customized fabricated fittings (e.g. more complex dual wall pipe reducers, bends or structures) are produced in specific North American plants.
In addition to direct channel customers, we also maintain and develop relationships with federal agencies, municipal agencies, national standard regulators, private consulting engineers and architects. Our consistent interaction with these market participants enables us to continue our market penetration.
On-demand installation support allows us to maintain 8 Table of Contents Advanced Drainage Systems, Inc customer relationships and ensure positive installation experience. In addition to direct channel customers, we also maintain and develop relationships with federal agencies, municipal agencies, national standard regulators, private consulting engineers and architects.
Business Segment Information” to our audited consolidated financial statements included in “Item 8. Financial Statements and Supplementary Data” of this Form 10-K. 1 Table of Contents Advanced Drainage Systems, Inc.
Business Segment Information” to our audited consolidated financial statements included in “Item 8.
In addition, customized fabricated fittings (e.g. more complex dual wall pipe reducers, bends or structures) are produced in specific North American plants. We produce storm and septic chambers, tanks and accessories using injection molding machines ranging in size. International Presence – We own manufacturing facilities in Canada to produce our products for sale in the Canadian markets.
We produce storm and septic chambers, tanks and accessories using injection molding machines ranging in size. International Presence - We own manufacturing facilities in Canada to produce our products for sale in the Canadian markets. We serve international markets primarily in Mexico, Central America and South America through joint venture operations with local partners.
This ongoing dialogue has positioned us as an industry resource for design guidance and product development and as a respected expert in water management solutions. CUSTOMERS We have a large, active customer base of approximately 16,000 customers, with two customers representing 10% or more of fiscal 2024 net sales.
Our consistent interaction with these market participants enables us to continue our market penetration. This ongoing dialogue has positioned us as an industry resource for design guidance and product development and as a respected expert in water management solutions.
Leachfield Products – Our Quick4 and Arc line of septic leachfield chambers are injection molded using recycled polyolefin materials. There are Quick4 and Arc line chamber models available to meet a wide variety of regulatory and market needs.
Onsite wastewater technologies are scalable and can easily meet the needs of churches, schools, light commercial and small community construction projects. Leachfield Products - Our Quick4, Quick5 and ARC line of septic leachfield chambers are injection molded using recycled polyolefin materials.
With our large manufacturing footprint, we can support rapid seasonal demand growth while focusing on customer service and minimizing transportation costs. 6 Table of Contents Advanced Drainage Systems, Inc. A wide variety of production processes and expertise allow us to provide cost-effective finished goods at competitive prices delivered in a timely fashion to our customers.
A wide variety of production processes and expertise allow us to provide cost-effective finished goods at competitive prices delivered in a timely fashion to our customers. Our molds and machines have been designed to maximize interchangeability in order to optimize flexibility, maximize efficiency and minimize downtime.
United States Pipe and Allied Product Facilities Domestically, we can produce more than one billion pounds of pipe annually. Additional capacity is in place to support seasonal production needs and expected growth.
We utilize customized and proprietary production equipment, which we believe produces higher quality final products and is more cost efficient than other pipe making equipment generally available in the market. 6 Table of Contents Advanced Drainage Systems, Inc United States Pipe and Allied Product Facilities Domestically, we can produce more than one billion pounds of pipe annually.
Our manufacturing facilities have no material process-related by-products 7 Table of Contents Advanced Drainage Systems, Inc. released into the atmosphere, waterways, or solid waste discharge. During pipe production start-ups and size changeovers, non-compliant scrap and any damaged finished goods pipe are recycled for internal re-use.
During pipe production start-ups and size changeovers, non-compliant scrap and any damaged finished goods pipe are recycled for internal re-use. In fiscal 2022, we announced our 10 Year Sustainability Goals, which are available on our website.
Removed
Pipe Dual Wall Corrugated Pipe - Our N-12 pipe is a dual wall high-density polyethylene (“HDPE”) pipe with a corrugated exterior for strength and a smooth interior wall for hydraulics and flow capacity. Our N-12 pipe competes in the storm sewer and drainage markets that are also served by concrete pipe.
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This includes being honored many times during the past decade as the Plastics Pipe Institute’s Project of the Year.
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The 5 Table of Contents Advanced Drainage Systems, Inc. manufacturing of septic leach field chambers and tanks leverage these same core competencies in the use of recycled polypropylene material streams. ADS Recycling procures and processes recycled raw materials that can be used in products we produce and sell.
Added
Our corrugated polyethylene pipe offers many benefits including ease of installation, job site handling and resistance to corrosion and abrasion. Corrugated pipe can easily be cut or coupled together, providing precise laying lengths while minimizing installation waste and difficulty.
Removed
In August 2022, we announced plans to invest $65 million near our existing headquarters to fund the development of a 110,000 square foot Engineering & Technology Center. This new facility will be dedicated to innovation across product engineering, material science and manufacturing technology and we anticipate it will open in fiscal 2025.
Added
The product advantages are cost savings on labor, materials and time savings on the job. EZflow - EZflow synthetic aggregate bundles replace stone and pipe leachfields for effluent and drainage applications.
Removed
(“EMA”) and NSF International and several state Departments of Transportation (“DOT”) and municipal agencies conduct both scheduled and unscheduled audits/inspections of our plants to verify product quality and compliance to applicable standards. Fleet – We also operate an in-house fleet of approximately 650 tractors.
Added
The ATL is a profile of polystyrene aggregates and geotextiles installed in a bed of sand. Our AeroFin product is the newest innovation in combined treatment and dispersal systems designed to provide higher treatment within a small footprint reducing installation time and energy.
Removed
March 31, 2024 March 31, 2023 Employees by Region United States 5,100 5,195 Canada 345 340 Other 260 335 Total 5,705 5,870 Employees by Type Hourly 3,845 3,885 Salary 1,860 1,985 Total 5,705 5,870 Health and Safety – Employee safety is our highest priority and a key component of our company culture.
Added
Commercial Advanced Treatment Products - Our Advanced Treatment Systems for decentralized and commercial systems are ideal solutions for treatment needs up to 250,000 gallons per day. Our advanced treatment systems product line for commercial applications includes ECOPOD, ENVIRO-AIRE Package Wastewater Treatment Plants, Whitewater, and Advantex Commercial (AX-100 and AX-MAX).
Removed
Diversity, Equity and Inclusion – As a global company, we are dedicated to fostering an inclusive culture, empowering employees and communities by embracing the dynamics of different backgrounds, experiences and perspectives. We are committed to creating an environment where employees feel valued, respected, and fully engaged to contribute to our future success.
Added
General Onsite Products - We offer a wide assortment of products for general onsite use. These products include Infiltrator EZsnap and EZset risers and lids, control panels, and secondary safety lid. Also included in this category are pump vaults, control panels, pumps, filters, risers, lids, basins, and miscellaneous products from the Orenco general onsite product catalog.
Removed
Training – Our operational and management training programs are core to our commitment and enablement of a safe and productive manufacturing environment.
Added
Orenco Controls - Orenco Controls designs and builds more than 20,000 panels a year for residential, commercial, municipal, and original equipment manufacturing (“OEM”) markets. This product line includes pump controllers for Orenco wastewater systems, pump controllers for commercial systems, and OEM controls applications.
Removed
For example, in November 2022, we announced that the Texas Department of Transportation released a new special specification to approve the use of thermoplastic pipe in storm sewer and culvert applications.
Added
Orenco Composites - Orenco Composites uses filament winding and two types of closed-molding processes, resin transfer molding and vacuum infusion, to produce fiber-reinforced plastic composite parts. This product line includes large composite tanks, composite utility buildings, treatment plant lids, and custom structures. Allied Products & Other We produce a range of Allied Products that are complementary to our Pipe products.
Removed
Over the past 10 years, the team has successfully embarked in over 100 regulatory initiatives increasing the addressability and size of markets across the U.S. and Canada.
Added
We anticipate continued growth in the availability of ethylene and propylene which are used to manufacture HDPE and PP, respectively. 5 Table of Contents Advanced Drainage Systems, Inc Fiscal 2025 Materials Purchased We leverage our raw material blending and processing technologies to produce an HDPE pipe that incorporates recycled resin.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeOur failure to obtain or maintain adequate protection of our intellectual property rights for any reason could have a material adverse effect on our business, results of operations and financial condition.
Biggest changeOur failure to obtain or maintain adequate protection of our intellectual property rights for any reason could have a material adverse effect on our business, results of operations and financial condition. 18 Table of Contents Advanced Drainage Systems, Inc We could incur significant costs in complying with environmental, health and safety laws or permits or as a result of satisfying any liability or obligation imposed under such laws or permits.
In addition, regardless of whether governmental bodies enact legislation to address climate change and reduce GHG emissions or we achieve our 10-year goals, the public perception of carbon-intensive industries may change adversely over time and additional focus on environmental, social and governance issues by the public and/or investors may harm our business as it could damage our reputation, require us to expend resources in reducing our net carbon emissions, or reduce demand for our products, which could adversely impact our results of operations and cash flows.
Regardless of whether governmental bodies enact legislation to address climate change and reduce GHG emissions or we achieve our 10-year goals, the public perception of carbon-intensive industries may change adversely over time and additional focus on environmental, social and governance issues by the public and/or investors may harm our business as it could damage our reputation, require us to expend resources in reducing our net carbon emissions, or reduce demand for our products, which could adversely impact our results of operations and cash flows.
The occurrence of such events could have a material adverse effect on our business financial condition and results of operations. All of these risks are also applicable where we rely on outside vendors to provide services. We are dependent on third-party vendors to operate secure and reliable systems which may include data transfers over the internet.
The occurrence of such events could have a material adverse effect on our business financial condition, reputation and results of operations. All of these risks are also applicable where we rely on outside vendors to provide services. We are dependent on third-party vendors to operate secure and reliable systems which may include data transfers over the internet.
Any events which deny us use of vital operating or information systems may seriously disrupt our normal business operations. Additionally, our key partners, distributors or suppliers could experience a compromise of their information security due to a cybersecurity incident, which may have an impact on our business and financial performance.
Any events which deny us use of vital operating or information systems may seriously disrupt our normal business operations. Additionally, our key partners, distributors or suppliers could experience a compromise of their information security due to a cybersecurity incident, which may have an impact on our business, reputation and financial performance.
Our attempts to safeguard our systems and mitigate potential risks may not be sufficient to prevent cyberattacks or security breaches that manipulate or improperly use our systems or networks, compromise confidential or otherwise protected information, destroy or corrupt data, or otherwise disrupt our operations.
Further, our attempts to safeguard our systems and mitigate potential risks may not be sufficient to prevent cyberattacks or security breaches that manipulate or improperly use our systems or networks, compromise confidential or otherwise protected information, destroy or corrupt data, or otherwise disrupt our operations.
These risks include but are not limited to: • taxation by multiple jurisdictions and the impact of such taxation on the effective tax rate and taxes paid; • material liabilities under our self-insured programs for workers' compensation, automobile and product/general liability coverage as well as health coverage to our employees; • fluctuations in our effective tax rate, including from the Inflation Reduction Act of 2022, Tax Cuts and Jobs Act of 2017, the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act and any future tax legislation; • new or modified legislation related to health care; • the review of potential weaknesses or deficiencies in the Company's disclosure controls and procedures, and discovering further weaknesses of which we are not currently aware, or which have not been detected; • we cannot assure our stockholders that an active market for shares of our common stock can be sustained, and the market price of our common stock may be volatile and could decline in the future; and • failure to meet the expectations of investors, including as a result of factors beyond our control.
These risks include but are not limited to: • taxation by multiple jurisdictions and the impact of such taxation on the effective tax rate and taxes paid; • material liabilities under our self-insured programs for workers' compensation, automobile and product/general liability coverage as well as health coverage to our employees; • fluctuations in our effective tax rate, including from the Inflation Reduction Act of 2022, Tax Cuts and Jobs Act of 2017, the Coronavirus Aid, Relief, and Economic Security Act and any future tax legislation; • the impact of tariffs; • new or modified legislation related to health care; • the review of potential weaknesses or deficiencies in the Company's disclosure controls and procedures, and discovering further weaknesses of which we are not currently aware, or which have not been detected; • our inability to assure our stockholders that an active market for shares of our common stock can be sustained, and the market price of our common stock may be volatile and could decline in the future; and • failure to meet the expectations of investors, including as a result of factors beyond our control.
For example, it could: • make it more difficult for us to satisfy our obligations with respect to the Company’s existing debt obligations; • increase our vulnerability to and compromise our flexibility to plan for, or react to, general adverse economic, industry or competitive conditions, including interest rate fluctuations, because a portion of our borrowings will be at variable rates of interest; • cause us to be unable to meet the financial covenants contained in our debt agreements, or to generate cash sufficient to make required debt payments, which circumstances would have the potential of accelerating the maturity of some or all of our outstanding indebtedness; • require us to dedicate a substantial portion of our cash flow from operations to payments on our indebtedness, thereby reducing the availability of our cash flow to fund working capital, capital expenditures, acquisitions, joint ventures and investments and other general corporate purposes, which could improve our competitive position, results of operations or share price; • require us to sell debt or equity securities or to sell some of our core assets, possibly on unfavorable terms, to meet payment obligations; • place us at a competitive disadvantage compared to our competitors that do not have the same level of indebtedness as we do and competitors that may be in a more favorable position to access additional capital resources; 18 Table of Contents Advanced Drainage Systems, Inc. • limit our ability to execute business development and acquisition activities to support our strategies; • limit our ability to obtain additional indebtedness or equity due to applicable financial and restrictive covenants in our debt agreements; and • limit our ability to refinance our indebtedness on more favorable terms.
For example, it could: • make it more difficult for us to satisfy our obligations with respect to the Company’s existing debt obligations; • increase our vulnerability to and compromise our flexibility to plan for, or react to, general adverse economic, industry or competitive conditions, including interest rate fluctuations, because a portion of our borrowings will be at variable rates of interest; • cause us to be unable to meet the financial covenants contained in our debt agreements, or to generate cash sufficient to make required debt payments, which circumstances would have the potential of accelerating the maturity of some or all of our outstanding indebtedness; • require us to dedicate a substantial portion of our cash flow from operations to payments on our indebtedness, thereby reducing the availability of our cash flow to fund working capital, capital expenditures, acquisitions, joint ventures and investments and other general corporate purposes, which could improve our competitive position, results of operations or share price; • require us to sell debt or equity securities or to sell some of our core assets, possibly on unfavorable terms, to meet payment obligations; • place us at a competitive disadvantage compared to our competitors that do not have the same level of indebtedness as we do and competitors that may be in a more favorable position to access additional capital resources; • limit our ability to execute business development and acquisition activities to support our strategies; • limit our ability to obtain additional indebtedness or equity due to applicable financial and restrictive covenants in our debt agreements; and • limit our ability to refinance our indebtedness on more favorable terms.
For example, our amended and restated certificate of incorporation and amended and restated bylaws, each as further amended, authorize the issuance of “blank check” preferred stock that could be issued by our board of directors to thwart a takeover attempt; provide that vacancies on our board of directors, including newly-created directorships, may be 19 Table of Contents Advanced Drainage Systems, Inc. filled only by a majority vote of directors then in office; prohibit stockholders from calling special meetings of stockholders; prohibit stockholder action by written consent, thereby requiring all actions to be taken at a meeting of the stockholders; do not give the holders of our common stock cumulative voting rights with respect to the election of directors, which means that the holders of a majority of our outstanding shares of common stock can elect all directors standing for election; establish advance notice requirements for nominations for election to our board of directors or for proposing matters that can be acted upon by stockholders at stockholder meetings; require a super-majority stockholders vote of 75% to approve any reorganization, recapitalization, share exchange, share reclassification, consolidation, merger, conversion or sale of all or substantially all assets to which we are a party that is not approved by the affirmative vote of at least 75% of the members of our board of directors; and require the approval of holders of a majority of the outstanding shares of our voting common stock to amend the bylaws and at least 75% of the outstanding shares of our voting common stock to amend certain provisions of the certificate of incorporation.
For example, our amended and restated certificate of incorporation and amended and restated bylaws, each as further amended, authorize the issuance of “blank check” preferred stock that could be issued by our board of directors to thwart a takeover attempt; provide that vacancies on our board of directors, including newly-created directorships, may be filled only by a majority vote of directors then in office; prohibit stockholders from calling special meetings of stockholders; prohibit stockholder action by written consent, thereby requiring all actions to be taken at a meeting of the stockholders; do not give the holders of our common stock cumulative voting rights with respect to the election of directors, which means that the holders of a majority of our outstanding shares of common stock can elect all directors standing for election; establish advance notice requirements for nominations for election to our board of directors or for proposing matters that can be acted upon by stockholders at stockholder meetings; require a super-majority stockholders vote of 75% to approve any reorganization, recapitalization, share exchange, share reclassification, consolidation, merger, conversion or sale of all or substantially all assets to which we are a party that is not approved by the affirmative vote of at least 75% of the members of our board of directors; and require the approval of holders of a majority of the outstanding shares of our voting common stock to amend the bylaws and at least 75% of the outstanding shares of our voting common stock to amend certain provisions of the certificate of incorporation.
Our international operations are subject to risks similar to those affecting our operations in the U.S. in addition to a number of other risks, including: difficulties in enforcing contractual and intellectual property rights; impositions or increases of withholding and other taxes on remittances and other payments by subsidiaries and affiliates; exposure to different or changing legal standards, including potential changes in government mandated regulatory product standards in those countries in which we or our joint ventures operate; fluctuations in currency exchange rates; impositions or increases of investment and other restrictions by foreign governments; the requirements of a wide variety of foreign laws; political and economic instability; war; and difficulties in staffing and managing operations, particularly in remote locations.
Our international operations are subject to risks similar to those affecting our operations in the U.S. in addition to a number of other risks, including: difficulties in enforcing contractual and intellectual property rights; impositions or increases of withholding and other taxes on remittances and other payments by subsidiaries and affiliates; exposure to different or changing legal standards, including potential changes in government mandated regulatory product standards in those countries in which we or our joint ventures operate; fluctuations in currency exchange rates; impositions or increases of investment and other restrictions by foreign governments; the requirements of a wide variety of foreign laws; political and economic instability; war, escalating geopolitical conflicts or acts or threats of terrorism; and difficulties in staffing and managing operations, particularly in remote locations.
Risks Relating to Our Business Fluctuations in the price and availability of resins, our principal raw materials, and our inability to obtain adequate supplies of resins from suppliers and pass on resin price increases to customers could adversely affect our business, financial condition, results of operations and cash flows.
Risks Relating to Our Business Fluctuations in the price and availability of resins, our principal raw materials, new tariff policies and our inability to obtain adequate supplies of resins from suppliers and pass on resin price increases to customers could adversely affect our business, financial condition, results of operations and cash flows.
If increases in the cost of raw materials cannot be passed on to our customers, our business, financial condition, results of operations and cash flows will be adversely affected. Conversely, in the event that there is deflation, we may experience pressure from our customers to reduce prices.
If increases in the cost of raw materials or any potential tariffs cannot be passed on to our customers, our business, financial condition, results of operations and cash flows will be adversely affected. Conversely, in the event that there is deflation, we may experience pressure from our customers to reduce prices.
Our success will depend, in part, on our ability to maintain the quality of our customer service, and selling and marketing efforts, as well as our ability to develop long-term relationships with our customers. Our ten largest customers generated approximately 43% o f our net sales in fiscal 2024.
Our success will depend, in part, on our ability to maintain the quality of our customer service, and selling and marketing efforts, as well as our ability to develop long-term relationships with our customers. Our ten largest customers generated approximately 47% o f our net sales in fiscal 2025.
Although it is uncertain what actions various governmental bodies will take to address the effects of climate change and to achieve goals in response to the effects of climate change, including in what timeframe those actions would be implemented, new laws or regulations could directly and indirectly affect our customers and suppliers (through an increase in the cost of production or their ability to produce satisfactory products) and our business (through the impact on our inventory availability, cost of sales, operations or demands for the products we sell).
Although it is uncertain what actions various governmental bodies will take to address the effects of climate change and to achieve goals in response to the effects of climate change, including in what timeframe those actions would be implemented, new laws or 13 Table of Contents Advanced Drainage Systems, Inc regulations could directly and indirectly affect our customers and suppliers (through an increase in the cost of production or their ability to produce satisfactory products) and our business (through the impact on our inventory availability, cost of sales, operations or demands for the products we sell).
Based on shares outstanding as of May 9, 2024, we have 77.4 million outstanding shares of common stock, including 0.2 million outstanding shares of our restricted stock, a significant portion of which are freely tradable without restriction under the Securities Act of 1933, as amended, (“Securities Act”) unless held by “affiliates,” as that term is defined in Rule 144 under the Securities Act.
Based on shares outstanding as of May 8, 2025, we have 77.6 million outstanding shares of common stock, including 0.2 million outstanding shares of our restricted stock, a significant portion of which are freely tradable without restriction under the Securities Act of 1933, as amended, (“Securities Act”) unless held by “affiliates,” as that term is defined in Rule 144 under the Securities Act.
The markets in which we operate are sensitive to regional, U.S. and worldwide economic conditions, including availability of credit, interest rates, inflation, fluctuations in capital and business and consumer confidence. The difficult conditions in these markets and the overall economy affect our business in a number of ways.
The markets in which we operate are sensitive to regional, U.S. and worldwide economic conditions, including availability of credit, interest rates, inflation, tariffs or other trade policies, fluctuations in capital and business and consumer confidence. The difficult conditions in these markets and the overall economy affect our business in a number of ways.
These incidents include but are not limited to, malicious software or viruses, including “ransomware” attempts to gain unauthorized access to, or otherwise disrupt, our information systems, attempts to gain unauthorized access to business, proprietary or other confidential information, and other electronic security breaches that could lead to disruptions in critical systems, unauthorized release of confidential or otherwise protected information and corruption of data.
These incidents include but are not limited to, malicious software or viruses, including “ransomware” attempts to gain unauthorized access 17 Table of Contents Advanced Drainage Systems, Inc to, or otherwise disrupt, our information systems, attempts to gain unauthorized access to business, proprietary or other confidential information, and other electronic security breaches that could lead to disruptions in critical systems, unauthorized release of confidential or otherwise protected information and corruption of data.
Foreign Corrupt Practices Act (“FCPA”) and similar foreign anti-corruption laws generally prohibit companies and their intermediaries from making improper payments or providing anything of value to wrongfully influence foreign 14 Table of Contents Advanced Drainage Systems, Inc. government officials for the purpose of obtaining or retaining business or obtaining an unfair advantage, and generally require companies to maintain accurate books and records and internal controls, including at foreign controlled subsidiaries.
Foreign Corrupt Practices Act and similar foreign anti-corruption laws generally prohibit companies and their intermediaries from making improper payments or providing anything of value to wrongfully influence foreign government officials for the purpose of obtaining or retaining business or obtaining an unfair advantage, and generally require companies to maintain accurate books and records and internal controls, including at foreign controlled subsidiaries.
For example: • The volatility of the U.S. economy, including recent volatility experienced in 2023 in the banking sector and recent bank failures, can have an adverse effect on our sales that are dependent on the non-residential construction market if participants in this industry may postpone spending or are otherwise unable to secure financing for construction projects. • Our business depends upon general activity levels in the agriculture market.
For example: • The volatility of the U.S. economy, including market uncertainty and volatility, can have an adverse effect on our sales that are dependent on the non-residential construction market if participants in this industry may postpone spending or are otherwise unable to secure financing for construction projects. • Our business depends upon general activity levels in the agriculture market.
While we maintain insurance covering our facilities and have significant flexibility to manufacture and ship our own products from various facilities, a loss of the use of our facilities, whether short or long-term, could have a material adverse effect on our business, financial 15 Table of Contents Advanced Drainage Systems, Inc. condition, results of operations and cash flows.
While we maintain insurance covering our facilities and have significant flexibility to manufacture and ship our own products from various facilities, a loss of the use of our facilities, whether short or long-term, could have a material adverse effect on our business, financial condition, results of operations and cash flows.
Furthermore, the success of new products and new product lines will depend on market demand and there is a risk that new products and new product lines will not deliver expected results, which could negatively impact our future sales and results of operations. We continue to invest in our initiatives.
Furthermore, the success of new products and new product lines will depend on market demand and there is a risk that new 15 Table of Contents Advanced Drainage Systems, Inc products and new product lines will not deliver expected results, which could negatively impact our future sales and results of operations. We continue to invest in our initiatives.
Thus, the collective voting power of our directors, officers and principal stockholders and their affiliates as of May 9, 2024 is approximate ly 28%, inc lusive of the outstanding shares of common stock held by the KSOP.
Thus, the collective voting power of our directors, officers and principal stockholders and their affiliates as of May 8, 2025 is approximate ly 27%, inc lusive of the outstanding shares of common stock held by the KSOP.
We may not be able to reduce our cost base to offset any such price concessions which could adversely impact our results of operations and cash flows. Any disruption or volatility in general business and economic conditions in the markets in which we operate could have a material adverse effect on the demand for our products and services.
We may not be able to reduce our cost base to offset any such price concessions which could adversely impact our results of operations and cash flows. 12 Table of Contents Advanced Drainage Systems, Inc Any disruption or volatility in general business and economic conditions in the markets in which we operate including market uncertainty and volatility, could have a material adverse effect on the demand for our products and services.
Although our IT systems are protected through physical and software 16 Table of Contents Advanced Drainage Systems, Inc. safeguards and remote processing capabilities exist, IT systems are still vulnerable to natural disasters, power losses, unauthorized access, telecommunication failures and other problems.
Although our IT systems are protected through physical and software safeguards and remote processing capabilities exist, IT systems are still vulnerable to natural disasters, power losses, unauthorized access, telecommunication failures and other problems.
The revenue growth and profitability of our business depends on the overall demand for our product and services. We may have to close under-performing facilities as warranted by general economic conditions and/or weakness in the markets in which we operate.
Delays in the placement of new orders and extended uncertainties may reduce future sales of our products and services. The revenue growth and profitability of our business depends on the overall demand for our product and services. We may have to close under-performing facilities as warranted by general economic conditions and/or weakness in the markets in which we operate.
Our operations are working capital intensive, and our inventories, accounts receivable and accounts payable are significant components of our net asset base. We manage our inventories and accounts payable through our purchasing policies and our accounts receivable through our customer credit policies.
Our operations are working capital intensive, and our inventories, accounts receivable and accounts payable are significant components of our net asset base. We manage our inventories and accounts payable through our purchasing policies and 14 Table of Contents Advanced Drainage Systems, Inc our accounts receivable through our customer credit policies.
Any provision of our amended and restated certificate of incorporation, amended and restated bylaws or Delaware General Corporation Law that has the effect of delaying or deterring a change in control could limit the opportunity for our stockholders to receive a premium for their shares of our common stock, and could also affect the price that some investors are willing to pay for our common stock.
Any provision of our amended and restated certificate of incorporation, amended and restated bylaws or Delaware General Corporation Law that has the effect of delaying or deterring a change in control could limit the opportunity for our stockholders to receive a premium for their shares of our common stock, and could also affect the price that some investors are willing to pay for our common stock. 20 Table of Contents Advanced Drainage Systems, Inc Our amended and restated certificate of incorporation and amended and restated bylaws may also make it difficult for stockholders to replace or remove our management.
As of March 31, 2024, there were stock options outstanding to purchase a total of approximately 1.1 million shares of our common stock. In addition, approximately 2.0 million shares of common stock are available for grant under our 2017 Omnibus Plan.
As of March 31, 19 Table of Contents Advanced Drainage Systems, Inc 2025, there were stock options outstanding to purchase a total of approximately 0.9 million shares of our common stock. In addition, approximately 1.8 million shares of common stock are available for grant under our 2017 Omnibus Plan.
Our amended and restated certificate of incorporation and amended and restated bylaws may also make it difficult for stockholders to replace or remove our management. These provisions may facilitate management entrenchment that may delay, deter, render more difficult or prevent a change in our control, which may not be in the best interests of our stockholders.
These provisions may facilitate management entrenchment that may delay, deter, render more difficult or prevent a change in our control, which may not be in the best interests of our stockholders.
Moreover, our competitors may develop products that are superior to our products or may adapt more quickly to new technologies or evolving customer requirements. In many markets in which we operate there are no significant entry barriers that would prevent new competitors from entering the market, especially on the local level, or existing competitors from expanding in the market.
In many markets in which we operate, there are no significant entry barriers that would prevent new competitors from entering the market, especially on the local level, or existing competitors from expanding in the market.
None of our 17 Table of Contents Advanced Drainage Systems, Inc. domestic employees are currently covered by collective bargaining or other similar labor agreements. However, if a number of our employees were to unionize, the effect on us may be negative.
None of our domestic employees are currently covered by collective bargaining or other similar labor agreements. However, if a number of our employees were to unionize, the effect on us may be negative. Additionally, we increasingly compete for talent within our industry.
In addition, to the extent that hurricanes, severe storms, floods, other 13 Table of Contents Advanced Drainage Systems, Inc. natural disasters or similar events occur in the geographic regions in which we operate, our results of operations may be adversely affected.
In addition, to the extent that hurricanes, severe storms, floods, other natural disasters or similar events occur in the geographic regions in which we operate, our results of operations may be adversely affected. We anticipate that fluctuations of our operations results from period to period due to seasonality will continue in the future.
Infrastructure spending is affected by a variety of factors beyond our control, including interest rates, inflation, availability and commitment of public funds for municipal spending and highway spending and general economic conditions. Weakness in the markets in which we operate could have a material adverse effect on our business, financial condition, results of operations and cash flows.
Infrastructure spending is affected by a variety of factors beyond our control, including interest rates, inflation, availability and commitment of public funds for municipal spending and highway spending and general economic conditions. Additionally, U.S. policies related to global trade and tariffs could have a material adverse effect on our results of operations.
Our operations are affected by various laws and regulations in the markets in which we operate, including government mandated regulatory product standards, and our failure to obtain or maintain approvals by municipalities, state departments of transportation, engineers and developers may affect our results of operations.
Additionally, defending against these lawsuits and proceedings may involve significant expense and diversion of management’s attention and resources from other matters. 16 Table of Contents Advanced Drainage Systems, Inc Our operations are affected by various laws and regulations in the markets in which we operate, including government mandated regulatory product standards, and our failure to obtain or maintain approvals by municipalities, state departments of transportation, engineers and developers may affect our results of operations.
As of May 9, 2024, our directors, officers and principal stockholders and their affiliates collectively own approximately 20% of our outstanding shares of common stock.
As of May 8, 2025, our directors, officers and principal stockholders and their affiliates collectively own, or have the right to own within 60 days, approximately 20% of our outstanding shares of common stock.
We could incur significant costs in complying with environmental, health and safety laws or permits or as a result of satisfying any liability or obligation imposed under such laws or permits. Our operations are subject to various federal, state, local and foreign environmental, health and safety laws and regulations.
Our operations are subject to various federal, state, local and foreign environmental, health and safety laws and regulations.
Removed
B ank failures and market disruptions could impact banks used by our customers, 12 Table of Contents Advanced Drainage Systems, Inc. which could negatively affect our customers. Delays in the placement of new orders and extended uncertainties may reduce future sales of our products and services.
Added
The current administration has suggested various new strategies regarding tariffs. Most recently, the administration imposed “reciprocal taxes”, in which the U.S. matches the import duties levied by other countries and individualized tariffs on goods originating from countries with trade surpluses with the United States.
Removed
In March 2024, the SEC adopted final rules on climate-related disclosure, which require issuers to make a significant amount of climate-related disclosure, including, among others, material scope 1 and scope 2 greenhouse gas, or GHG, emissions, climate-related financial metrics, climate-related strategy, governance, targets and goals, that could significantly increase compliance burdens and associated regulatory costs and complexity.
Added
In response, countries have imposed or proposed additional tariffs on certain U.S. imports, as well as additional trade restrictions. Tariffs may create an administrative burden and will cause companies to make difficult decisions as to how to pay the tariffs or absorb the cost into their profit margins.
Removed
We anticipate that fluctuations of our operations results from period to period due to seasonality will continue in the future.
Added
Weakness in the markets in which we operate could have a material adverse effect on our business, financial condition, results of operations and cash flows. B ank failures and market disruptions could impact banks used by our customers, which could negatively affect our customers.
Removed
Additionally, defending against these lawsuits and proceedings may involve significant expense and diversion of management’s attention and resources from other matters.
Added
Moreover, our competitors may develop products that are superior to our products or may adapt more quickly to new technologies or evolving customer requirements or requests.
Removed
Item 1B. Unresolved Staff Comments None. 20 Table of Contents Advanced Drainage Systems, Inc.
Added
While we no longer face reporting requirements under SEC rules after the SEC stated it would no longer defend its previous rules on climate-related disclosures, we may be subject to reporting requirements as states enact reporting obligations.
Added
Given the persistent and advanced nature of cybersecurity threats, we continue to invest in upgraded programs, implement advanced features, and establish adequate controls to stop or curtail these threats. However, investing in upgraded programs, advanced features and adequate controls is expensive and an ongoing, rapidly changing challenge.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeCybersecurity Governance Board and Committee Oversight - Our Board of Directors has ultimate oversight of the Company’s cybersecurity programs and strategy, with the Audit Committee maintaining oversight responsibility in reviewing cybersecurity and other information technology risks. The Audit Committee assess the steps management has taken to monitor, minimize or control such risks or exposures.
Biggest changeWe also purchase insurance to help protect us against the risk of cybersecurity breaches. 21 Table of Contents Advanced Drainage Systems, Inc Cybersecurity Governance Board and Committee Oversight - Our Board of Directors has ultimate oversight of the Company’s cybersecurity programs and strategy, with the Audit Committee maintaining oversight responsibility in reviewing cybersecurity and other information technology risks.
Item 1C. Cybersecurity Risk Management and Strategy Our cybersecurity program is designed to assess, identify and manage material risks from cybersecurity threats, and is a component of our overall enterprise risk program. Our cybersecurity program is based on the National Institute of Standards and Technology Cybersecurity Framework, version 2.0 (“NIST CSF”).
Item 1C. Cybersecurity Risk Management and Strategy Our cybersecurity program is designed to assess, identify and manage material risks from cybersecurity threats, and is a component of our overall enterprise risk program. Our cybersecurity program is based on the National Institute of Standards and Technology Cybersecurity Framework, version 2.0.
Management’s Role – The Company’s Chief Information Officer (“CIO”), supported by the Director of IT Security and Compliance, manages cybersecurity risk. Our CIO has over 25 years of experience in information technology and six years of experience with the Company.
Management’s Role - The Company’s CIO, supported by the Director of IT Security and Compliance, manages cybersecurity risk. Our CIO has over 25 years of experience in information technology and seven years of experience with the Company.
The Company’s Chief Information Officer presents a cybersecurity report to the Audit Committee each quarter. The report includes updates of recent cybe rsecurity threats, current key performance indicators of security controls and summaries of any recent incidents at the Company.
The Audit Committee assesses the steps management has taken to monitor, minimize or control such risks or exposures. The Company’s Chief Information Officer (“CIO”) presents a cybersecurity report to the Audit Committee each quarter. The report includes updates of recent cybe rsecurity threats, current key performance indicators of security controls and summaries of any recent incidents at the Company.
We have periodically engaged third parties to serve in a consultative and advisory manner to review current and future strategies. We also purchase insurance to help protect us against the risk of cybersecurity breaches.
We have periodically engaged third parties to serve in a consultative and advisory manner to review current and future strategies.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeWe generally prefer to own our manufacturing plant locations, with a typical pipe manufacturing facility consisting of approximately 40,000 square feet and 15 to 20 acres of land for storage of pipe and related products. Our network of 41 distribution centers consists of 4 owned and 37 leased locations.
Biggest changeOur network of 63 manufacturing plants consists of 45 that are owned and 18 that are leased. We generally prefer to own our manufacturing plant locations, with a typical pipe manufacturing facility consisting of approximately 40,000 square feet and 15 to 20 acres of land for storage of pipe and related products.
Our Pipe segment and Allied Products and other use our properties in the United States, except for 8 properties utilized by our Infiltrator segment, and our International segment operates all of our international properties. Each distribution center carries single wall and dual wall pipe and fittings and Allied Products per needs of the local market.
Our Pipe segment and Allied Products and other use our properties in the United States, except for 10 properties utilized by our Infiltrator segment, and our International segment operates all of our international properties. Each distribution center carries single wall and dual wall pipe and fittings and Allied Products per needs of the local market.
Properties Property - We have a network of 64 manufacturing plant locations and 41 distribution centers, summarized in the following table: Manufacturing Plants Distribution Centers Total United States 51 29 80 Canada 5 4 9 Mexico (1) 4 2 6 South America (2) 4 5 9 Other (3) — 1 1 Total 64 41 105 (1) Manufacturing plants and distribution centers in Mexico are owned or leased by our joint venture.
Properties Property - We have a network of 63 manufacturing plant locations and 39 distribution centers, summarized in the following table: Manufacturing Plants Distribution Centers Total United States 52 26 78 Canada 5 4 9 Mexico (1) 3 2 5 South America (2) 3 6 9 Other (3) — 1 1 Total 63 39 102 (1) Manufacturing plants and distribution centers in Mexico are owned or leased by our joint venture.
We believe that our properties have been adequately maintained and are generally in good condition. The extent to which we use our properties varies by property, but we believe the capacity of our facilities is adequate for the level of production and distribution activities necessary in our business as presently conducted.
The extent to which we use our properties varies by property, but we believe the capacity of our facilities is adequate for the level of production and distribution activities necessary in our business as presently conducted.
(2) Manufacturing plants and distribution centers owned or leased by our South America joint venture are not consolidated. (3) The other facility is located in the Netherlands. 21 Table of Contents Advanced Drainage Systems, Inc.
(2) Manufacturing plants and distribution centers owned or leased by our South America joint venture are not consolidated. (3) The other facility is located in the Netherlands.
In-House Fleet - As of March 31, 2024, our in-house fleet consists of approximately 650 tractors and approximately 1,100 trailers that are specially designed to haul our lightweight pipe and fittings products.
In-House Fleet - As of March 31, 2025, our in-house fleet consists of approximately 600 tractors and approximately 1,100 trailers that are specially designed to haul our lightweight pipe and fittings products. 22 Table of Contents Advanced Drainage Systems, Inc
We currently own approximately 36,000 square feet and lease approximately 33,000 square feet of office space in Hilliard, Ohio for our corporate headquarters and lease an office space in Old Saybrook, Connecticut for our Infiltrator headquarters. Our network of 64 manufacturing plants consists of 46 that are owned and 18 that are leased.
We currently own approximately 36,000 square feet and lease approximately 33,000 square feet of office space in Hilliard, Ohio for our corporate headquarters and own our approximately 110,000 square foot ADS Engineering and Technology Center. Additionally we lease an office space in Old Saybrook, Connecticut for our Infiltrator headquarters.
Added
Our network of 39 distribution centers consists of 4 owned and 35 leased locations. We believe that our properties have been adequately maintained and are generally in good condition.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeThe Company does not believe that such litigation, claims, and administrative proceedings will have a material adverse impact on our financial position or our results of operations. The Company records a liability when a loss is considered probable, and the amount can be reasonably estimated. Item 4. Mine Safety Disclosures Not applicable. 22 Table of Contents Advanced Drainage Systems, Inc.
Biggest changeThe Company does not believe that such litigation, claims, and administrative proceedings will have a material adverse impact on our financial position or our results of operations. The Company records a liability when a loss is considered probable, and the amount can be reasonably estimated. Item 4.
Added
Mine Safety Disclosures Not applicable. 23 Table of Contents Advanced Drainage Systems, Inc PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeSecurity Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters,” of this Annual Report on Form 10-K. Item 6. Reserved 23 Table of Contents Advanced Drainage Systems, Inc.
Biggest changeAs of March 31, 2025, approximately $147.7 million of common stock may be repurchased under the authorization. Equity Compensation Plan Information - For equity compensation plan information, refer to “Part III, Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters,” of this Annual Report on Form 10-K. Item 6.
The graph assumes investment of $100 on March 31, 2019 in our common stock and in each of the two indices and the reinvestment of dividends. Recent Sales of Unregistered Securities - Since the completion of our IPO, we have not sold any securities without registration under the Securities Act of 1933, as amended.
The graph assumes investment of $100 on March 31, 2020 in our common stock and in each of the two indices and the reinvestment of dividends. Recent Sales of Unregistered Securities - Since the completion of our IPO, we have not sold any securities without registration under the Securities Act of 1933, as amended.
During each quarter of fiscal 2024, 2023 and 2022, the Board of Directors approved a quarterly cash dividend of $0.14, $0.12 and $0.11 per share, respectively, to all common stockholders. During the first quarter of fiscal 2025, the Company declared a quarterly cash dividend of $0.16 per share of common stock.
During each quarter of fiscal 2025, 2024 and 2023, the Board of Directors approved a quarterly cash dividend of $0.16, $0.14 and $0.12 per share, respectively, to all common stockholders. During the first quarter of fiscal 2026, the Company declared a quarterly cash dividend of $0.18 per share of common stock.
Stock Performance Graph - The following graph presents a comparison from March 31, 2019 through March 31, 2024 of the cumulative return of our common stock, the Standard and Poor's Index (“S&P 500”) and the Standard and Poor’s Mid Cap 400 - Capital Goods Index (“S&P Mid Cap 400 - Capital Goods”).
Stock Performance Graph - The following graph presents a comparison from March 31, 2020 through March 31, 2025 of the cumulative return of our common stock, the Standard and Poor's Index and the Standard and Poor’s Mid Cap 400 - Capital Goods Index.
Issuer Purchases of Equity Securities - In February 2022, we announced that our Board of Directors approved a $1.0 billion stock repurchase program (the “Repurchase Program”) of ADS common stock in accordance with applicable securities laws. The Repurchase Program replaces the previously established share repurchase program, which has no remaining available capacity.
Issuer Purchases of Equity Securities - In February 2022, we announced that our Board of Directors approved a $1.0 billion stock repurchase program (the “Repurchase Program”) of ADS common stock in accordance with applicable securities laws.
The dividend is payable on June 14, 2024 to stockholders of record at the close of business on May 31, 2024. Holders of Record - As of May 9, 2024, we had 787 holders of record of our common stock.
The dividend is payable on June 16, 2025 to stockholders of record at the close of business on May 30, 2025. Holders of Record - As of May 8, 2025, we had 855 holders of record of our common stock.
The Repurchase Program does not obligate us to acquire any particular amount of common stock and may be suspended or terminated at any time at our discretion. During fiscal 2024, we repurchased 1.8 million shares of common stock at a cost of $207.3 million.
The Repurchase Program does not obligate us to acquire any particular amount of common stock and may be suspended or terminated at any time at our discretion. During fiscal 2025, we repurchased 0.4 million shares of common stock at a cost of $69.9 million and no repurchases during the three months ended March 31, 2025.
Removed
The following table provides information with respect to repurchases of our common stock by us and our “affiliated purchasers” (as defined by Rule 10b-18(a)(3) under the Exchange Act) during the three months ended March 31, 2024.
Added
Reserved 24 Table of Contents Advanced Drainage Systems, Inc
Removed
Period Total Number of Shares Purchased Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plan Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plan (amounts in thousands, except per share data) January 1, 2024 to January 31, 2024 100 $ 131.08 100 $ 232,572 February 1, 2024 to February 29, 2024 — — — 232,572 March 1, 2024 to March 31, 2024 100 166.29 100 215,943 Total 200 $ 148.71 200 $ 215,943 Equity Compensation Plan Information - For equity compensation plan information, refer to “Part III, Item 12.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest change(Amounts in thousands) 2024 2023 2022 Net income $ 513,291 $ 511,353 $ 275,026 Depreciation and amortization 154,903 145,149 141,808 Interest expense 88,862 70,182 33,550 Income tax expense 158,998 150,589 110,071 EBITDA 916,054 877,273 560,455 (Gain) loss on disposal of assets and costs from exit and disposal activities (8,365) 4,397 3,398 Stock-based compensation expense 31,986 21,659 24,158 ESOP compensation expense — — 53,401 ESOP acceleration compensation expense (a) — — 30,435 Transaction costs (b) 3,444 3,903 3,539 Interest income (22,047) (9,782) (52) Other adjustments (c) 1,875 6,512 708 Adjusted EBITDA $ 922,947 $ 903,962 $ 676,042 Adjusted EBITDA Margin 32.1 % 29.4 % 24.4 % (a) In the fourth quarter of fiscal 2022, the approximately 0.3 million remaining unallocated shares of Preferred Stock were allocated on March 31, 2022 after repayment of the ESOP loan.
Biggest change(Amounts in thousands) 2025 2024 2023 Net income $ 452,573 $ 513,291 $ 511,353 Depreciation and amortization 183,281 154,903 145,149 Interest expense 91,803 88,862 70,182 Income tax expense 141,063 158,998 150,589 EBITDA 868,720 916,054 877,273 Loss (gain) on disposal of assets and costs from exit and disposal activities 3,858 (8,365) 4,397 Stock-based compensation expense 26,581 31,986 21,659 Transaction costs (a) 9,291 3,444 3,903 Interest income (23,485) (22,047) (9,782) Other adjustments (b) 4,263 1,875 6,512 Adjusted EBITDA $ 889,228 $ 922,947 $ 903,962 Adjusted EBITDA Margin 30.6 % 32.1 % 29.4 % (a) Represents expenses recorded related to legal, accounting and other professional fees incurred in connection with business or asset acquisitions and dispositions.
In order to reduce the volatility of raw material costs in the future, our raw material strategies for managing our costs include the following: • increasing the use of recycled resin in place of virgin resin while meeting or exceeding industry standards; • internally processing greater amounts of our recycled resin in order to closely monitor quality and minimize costs; • managing a resin price risk program that may entail both physical fixed price and volume contracts; and • maintaining supply agreements with our major resin suppliers that provide multi-year terms and volumes that are in excess of our projected consumption.
In order to reduce the volatility of raw material costs in the future, our raw material strategies for managing our costs include the following: • increasing the use of low cost resin in place of virgin resin while meeting or exceeding industry standards; • internally processing greater amounts of our recycled resin in order to closely monitor quality and minimize costs; • managing a resin price risk program that may entail both physical fixed price and volume contracts; and • maintaining supply agreements with our major resin suppliers that provide multi-year terms and volumes that are in excess of our projected consumption.
Future events and unanticipated changes to assumptions could require a provision for impairment in a future period. 34 Table of Contents Advanced Drainage Systems, Inc. Recent Accounting Pronouncements For a discussion of recent accounting pronouncements, see “Note 1. Background and Summary of Significant Accounting Policies” to our consolidated financial statements included in “Item 8. Financial Statements and Supplementary Data.”
Future events and unanticipated changes to assumptions could require a provision for impairment in a future period. 35 Table of Contents Advanced Drainage Systems, Inc Recent Accounting Pronouncements For a discussion of recent accounting pronouncements, see “Note 1. Background and Summary of Significant Accounting Policies” to our consolidated financial statements included in “Item 8. Financial Statements and Supplementary Data.”
We believe customers will continue to acknowledge the superior attributes and compelling value 24 Table of Contents Advanced Drainage Systems, Inc. proposition of our thermoplastic products and expanded regulatory approvals allow for their use in new markets and geographies.
We believe customers will continue to acknowledge the superior attributes and compelling value 25 Table of Contents Advanced Drainage Systems, Inc proposition of our thermoplastic products and expanded regulatory approvals allow for their use in new markets and geographies.
Our maximum potential obligation under this guarantee totals $5.5 million as of March 31, 2024. The maximum borrowing permitted under the South American Joint Venture’s credit agreement is $11.0 million. As of March 31, 2024, our South American Joint Venture had no outstanding debt subject to our guarantee.
Our maximum potential obligation under this guarantee totals $5.5 million as of March 31, 2025. The maximum borrowing permitted under the South American Joint Venture’s credit agreement is $11.0 million. As of March 31, 2025, our South American Joint Venture had no outstanding debt subject to our guarantee.
We determined for our goodwill that it was more likely than not that the fair value of the assets exceeded carrying value for the fiscal year ended March 31, 2024 for all reporting units reviewed under the qualitative approach. For Cultec, the fair value of the reporting unit exceeded carrying value.
We determined for our goodwill that it was more likely than not that the fair value of the assets exceeded carrying value for the fiscal year ended March 31, 2025 for all reporting units reviewed under the qualitative approach. For Cultec, the fair value of the reporting unit exceeded carrying value.
We performed a qualitative impairment analysis and determined for our indefinite-lived intangible assets that it was more likely than not that the fair value of the assets exceeded carrying value for fiscal years ended March 31, 2024.
We performed a qualitative impairment analysis and determined for our indefinite-lived intangible assets that it was more likely than not that the fair value of the assets exceeded carrying value for fiscal years ended March 31, 2025.
The equipment financing bears a weighted average interest of 1.6% as of March 31, 2024. Issuance of Senior Notes Due 2030 – On June 9, 2022, we issued $500.0 million aggregate principal amount of 6.375% its senior notes (the “2030 Notes”) pursuant to an Indenture, dated June 9, 2022 (the “2030 Indenture”), among the Company, the Guarantors and the Trustee.
The equipment financing bears a weighted average interest of 1.7% as of March 31, 2025. Issuance of Senior Notes Due 2030 - On June 9, 2022, we issued $500.0 million aggregate principal amount of 6.375% its senior notes (the “2030 Notes”) pursuant to an Indenture, dated June 9, 2022 (the “2030 Indenture”), among the Company, the Guarantors and the Trustee.
We currently purchase in excess of 1.1 billion pounds of virgin and recycled resin annually from approximately 525 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).
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).
We aim to increase our product selling prices in order to cover raw material price increases, but the inability to do so could impact our profitability. Movements in raw material, logistics or other overhead costs and resulting changes in the selling prices may also impact changes in period-to-period comparisons of net sales.
We aim to increase our product selling prices in order to cover raw material price increases, including increases due to tariffs, but the inability to do so could impact our profitability. Movements in raw material, logistics or other overhead costs and resulting changes in the selling prices may also impact changes in period-to-period comparisons of net sales.
We did not record any impairment charges for definite-lived intangible assets in fiscal 2024, 2023, or 2022. We performed our annual impairment test for indefinite-lived intangible assets as of March 31, 2024.
We did not record any impairment charges for definite-lived intangible assets in fiscal 2025, 2024, or 2023. We performed our annual impairment test for indefinite-lived intangible assets as of March 31, 2025.
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 of 1933 (the “Securities Act”) or to persons outside the United States under Regulation S of the Securities Act.
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.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations Our fiscal year begins on April 1 and ends on March 31. Unless otherwise noted, references to “year” pertain to our fiscal year. For example, “2024” refers to fiscal 2024, which is the period from April 1, 2023 to March 31, 2024.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations Our fiscal year begins on April 1 and ends on March 31. Unless otherwise noted, references to “year” pertain to our fiscal year. For example, “2025” refers to fiscal 2025, which is the period from April 1, 2024 to March 31, 2025.
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.
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 33 Table of Contents Advanced Drainage Systems, Inc 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.
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 $10.9 million and had an initial term of between 12 and 84 months, based on the life of the equipment.
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.
Accordingly, free cash flow has been presented in this Annual Report on Form 10-K as a supplemental measure of liquidity that is not required by, or presented in accordance with GAAP, because management believes that free cash flow provides useful information to investors and others in understanding and evaluating our ability to generate cash flow from 29 Table of Contents Advanced Drainage Systems, Inc. operations after capital expenditures.
Accordingly, free cash flow has been presented in this Annual Report on Form 10-K as a supplemental measure of liquidity that is not required by, or presented in accordance with GAAP, because 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.
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. 31 Table of Contents Advanced Drainage Systems, Inc.
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.
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 $75.9 million, $69.5 million, and $61.6 million, in fiscal 2024, 2023, and 2022, respectively.
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.
In addition to covenant compliance and executive performance evaluations, we use 28 Table of Contents Advanced Drainage Systems, Inc. EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin to supplement GAAP measures of performance to evaluate the effectiveness of our business strategies, to make budgeting decisions and to compare our performance against that of other peer companies using similar measures.
In addition to covenant compliance and executive performance evaluations, we use EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin to supplement GAAP measures of performance to evaluate the effectiveness of our business strategies, to make budgeting decisions and to compare our performance against that of other peer companies using similar measures.
(Gain) loss on disposal of assets and costs from exit and disposal activities – The change in (Gain) loss on disposal of assets and costs from exit and disposal activities is primarily due to the gain on the sale of the assets of Spartan Concrete, Inc. in fiscal 2024, partially offset by the losses on the sale of the Paper Recycling business and disposal of other assets.
Loss (gain) on disposal of assets and costs from exit and disposal activities - The change in Loss (gain) on disposal of assets and costs from exit and disposal activities is primarily due to the closure of a plant and other asset disposals in fiscal 2025 compared to a gain on the sale of the assets of Spartan Concrete, Inc. in fiscal 2024, partially offset by the losses on the sale of the Paper Recycling business and disposal of other assets.
As of March 31, 2024, we had $24.8 million in cash that was held by our foreign subsidiaries, of which, $15.8 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 .
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 .
Our capital expenditures in fiscal 2023 were used primarily to support growth and our productivity initiatives, including automation and safety. During fiscal 2022, cash used for investing activities was $198.8 million. The increase in cash used for investing cash flows was primarily due to elevated capital expenditures and the acquisition of Jet Polymer Recycling.
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.
Income Taxes” for additional discussion of our plans to repatriate earnings from Canada. Working Capital and Cash Flows In fiscal 2024, our cash balance increased by $278.7 million.
Income Taxes” for additional discussion of our plans to repatriate earnings from Canada. Working Capital and Cash Flows In fiscal 2025, our cash balance decreased by $26.6 million.
Financial Statements and Supplementary Data” for a discussion of the Company’s financing transactions, including the Secured Bank Loans, the Senior Notes and the Company’s finance lease obligations.
Debt” to our consolidated financial statements included in “Item 8. Financial Statements and Supplementary Data” for a discussion of the Company’s financing transactions, including the Secured Bank Loans, the Senior Notes and the Company’s finance lease obligations.
For further information, see “Note 12 . Debt” to the Consolidated Financial Statements. We were in compliance with our debt covenants as of March 31, 2024. 32 Table of Contents Advanced Drainage Systems, Inc.
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.
Operating Cash Flows - During fiscal 2024, cash provided by operating activities was $717.9 million. Cash flow from operating activities in fiscal 2024 was primarily driven by operating income and changes in working capital. During fiscal 2023, cash provided by operating activities was $707.8 million.
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. Investing Cash Flows - During fiscal 2025, cash used for investing activities was $447.9 million.
(Amounts in thousands) 2024 2023 Selling, general and administrative $ 370,714 $ 339,504 % of Net Sales 12.9 % 11.2 % Selling, general and administrative expenses for the fiscal year ended March 31, 2024 increased $31.2 million from the same period in fiscal 2023.
(Amounts in thousands) 2025 2024 Selling, general and administrative $ 380,378 $ 370,714 % of Net Sales 13.1 % 12.9 % Selling, general and administrative expenses for the fiscal year ended March 31, 2025 increased $9.7 million from the same period in fiscal 2024.
Income Taxes” for additional information. Equity in net income of unconsolidated affiliates – The Equity in net income of unconsolidated affiliates increased for the fiscal year ended March 31, 2024 compared to the same period in fiscal 2023 due to an increase in the current period income at our South American Joint Venture.
See “N ote 15. Income Taxes” for additional information. Equity in net income of unconsolidated affiliates - The Equity in net income of unconsolidated affiliates decreased for the fiscal year ended March 31, 2025 compared to the same period in fiscal 2024 due to a decrease in the current period income at our South American Joint Venture.
Income tax expense – The following table presents the effective tax rates for the fiscal years presented: 2024 2023 Effective tax rate 23.8 % 22.9 % The change in the effective tax rate was primarily related to the decrease of the income tax benefit related to the stock-based compensation windfall in fiscal 2024. See “N ote 15.
Income tax expense - The following table presents the effective tax rates for the fiscal years presented: 2025 2024 Effective tax rate 23.9 % 23.8 % The change in the effective tax rate was primarily related to the increase of the income tax benefit related to the stock-based compensation windfall and the increase of income tax expense related to the executive compensation limitation in fiscal year 2025.
During fiscal 2024, we repurchased shares at a cost of $207.3 million and made dividend payments of $47.7 million. 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.
During fiscal 2024, we repurchased shares at a cost of $207.3 million and made dividend payments of $47.7 million. During fiscal 2023 , cash used in financing activities was $296.3 million.
(Amounts in thousands) 2024 2023 2022 Cash flow from operating activities $ 717,928 $ 707,810 $ 274,888 Capital expenditures (183,812) (166,913) (149,083) Free cash flow $ 534,116 $ 540,897 $ 125,805 The following table presents key liquidity metrics utilized by management: (Amounts in thousands) 3/31/2024 Total debt (debt and finance lease obligations) $ 1,351,068 Cash 490,163 Net debt (total debt less cash) 860,905 Leverage ratio 0.9 The following table summarizes our available liquidity under our Revolving Credit Facility as of March 31, 2024: (Amounts in thousands) 3/31/2024 Revolver capacity $ 600,000 Less: outstanding borrowings — Less: letters of credit 11,150 Revolver available liquidity $ 588,850 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.
(Amounts in thousands) 2025 2024 2023 Cash flow from operating activities $ 581,491 $ 717,928 $ 707,810 Capital expenditures (212,944) (183,812) (166,913) Free cash flow $ 368,547 $ 534,116 $ 540,897 The following table presents key liquidity metrics utilized by management: (Amounts in thousands) 3/31/2025 Total debt (debt and finance lease obligations) $ 1,425,666 Cash 463,319 Net debt (total debt less cash) 962,347 Leverage ratio (Net debt/Adjusted EBITDA) 1.1 The following table summarizes our available liquidity under our Revolving Credit Facility as of March 31, 2025: (Amounts in thousands) 3/31/2025 Revolver capacity $ 600,000 Less: outstanding borrowings — Less: letters of credit 9,450 Revolver available liquidity $ 590,550 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.
Interest income and other, net – Interest income and other, net increased by $15.5 million for the fiscal year ended March 31, 2024 compared to the same period in fiscal 2023 primarily due to the increase in Cash.
Interest income and other, net - Interest income and other, net increased by $0.3 million for the fiscal year ended March 31, 2025 compared to the same period in fiscal 2024.
Free cash flow is a measure used by management and our Board of Directors to assess our ability to generate cash.
Free Cash Flow - Free cash flow is a non-GAAP financial measure that comprises cash flow from operations less capital expenditures. Free cash flow is a measure used by management and our Board of Directors to assess our ability to generate cash.
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.
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. 32 Table of Contents Advanced Drainage Systems, Inc 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.
(Amounts in thousands) 2024 2023 Net sales $ 2,874,473 100.0 % $ 3,071,121 100.0 % Cost of goods sold 1,728,524 60.1 1,952,713 63.6 Gross profit 1,145,949 39.9 1,118,408 36.4 Selling, general and administrative expenses 370,714 12.9 339,504 11.1 (Gain) loss on disposal of assets and costs from exit and disposal activities (8,365) (0.3) 4,397 0.1 Intangible amortization 51,469 1.8 55,197 1.8 Income from operations 732,131 25.5 719,310 23.4 Interest expense 88,862 3.1 70,182 2.3 Interest income and other, net (23,484) (0.8) (7,972) (0.3) Income before income taxes 666,753 23.2 657,100 21.4 Income tax expense 158,998 5.5 150,589 4.9 Equity in net income of unconsolidated affiliates (5,536) (0.2) (4,842) (0.2) Net income 513,291 17.9 511,353 16.7 Less: net income attributable to the non-controlling interest 3,376 0.1 4,267 0.1 Net income attributable to ADS $ 509,915 17.7 % $ 507,086 16.5 % Net sales – The following table presents net sales to external customers by reportable segment for the fiscal years ended March 31, 2024 and 2023.
(Amounts in thousands) 2025 2024 Net sales $ 2,904,245 100.0 % $ 2,874,473 100.0 % Cost of goods sold 1,810,004 62.3 1,728,524 60.1 Gross profit 1,094,241 37.7 1,145,949 39.9 Selling, general and administrative expenses 380,378 13.1 370,714 12.9 Loss (gain) on disposal of assets and costs from exit and disposal activities 3,858 0.1 (8,365) (0.3) Intangible amortization 52,569 1.8 51,469 1.8 Income from operations 657,436 22.6 732,131 25.5 Interest expense 91,803 3.2 88,862 3.1 Interest income and other, net (23,832) (0.8) (23,484) (0.8) Income before income taxes 589,465 20.3 666,753 23.2 Income tax expense 141,063 4.9 158,998 5.5 Equity in net income of unconsolidated affiliates (4,171) (0.1) (5,536) (0.2) Net income 452,573 15.6 513,291 17.9 Less: net income attributable to the non-controlling interest 2,401 0.1 3,376 0.1 Net income attributable to ADS $ 450,172 15.5 % $ 509,915 17.7 % Net sales - The following table presents net sales to external customers by reportable segment for the fiscal years ended March 31, 2025 and 2024.
Policy Judgments and Estimates Effect if Actual Results Differ from Assumptions Goodwill - Goodwill is reviewed annually for impairment as of March 31 or whenever events or changes in circumstances indicate the carrying value may not be recoverable. The fair value of goodwill is determined by considering both the income and market approach.
If our historical experience differs from future experience, our estimates of variable consideration could differ. 34 Table of Contents Advanced Drainage Systems, Inc Policy Judgments and Estimates Effect if Actual Results Differ from Assumptions Goodwill - Goodwill is reviewed annually for impairment as of March 31 or whenever events or changes in circumstances indicate the carrying value may not be recoverable.
Our capital expenditures in fiscal 2024 were used primarily to support new facilities, facility expansions, equipment replacements and technology improvement initiatives. 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.
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.
Intangible amortization – Intangible amortization decreased by $3.7 million primarily due the accelerated method of amortization for certain customer relationships. Interest expense – Interest expense increased $18.7 million for the fiscal year ended March 31, 2024 compared to the same period in fiscal 2023. The increase was primarily due to an increase in interest rates.
Intangible amortization - Intangible amortization increased by $1.1 million primarily due to the increase in intangible assets due to the Orenco acquisition. Interest expense - Interest expense increased $2.9 million for the fiscal year ended March 31, 2025 compared to the same period in fiscal 2024. The increase was primarily due to an increase in interest rates.
Results of Operations for Fiscal Year Ended March 31, 2024 Compared with Fiscal Year Ended March 31, 2023 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, 2024 and 2023.
Our Allied Products & Other offer adjacent technologies to our core Pipe offering, presenting a complete drainage solution for our clients and customers. 27 Table of Contents Advanced Drainage Systems, Inc Results of Operations for Fiscal Year Ended March 31, 2025 Compared with Fiscal Year Ended March 31, 2024 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.
The discussion of our results of operations for the fiscal year ended March 31, 2023 compared with the fiscal year ended March 31, 2022 can be found in “Item 7. Management’s Discussion and Analysis of Financial Discussion and Results of Operations” in our fiscal 2023 Form 10-K for further information on our prior period results of operations.
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.
The fair value estimates are based on assumptions management believes to be reasonable but are inherently uncertain. We performed our annual impairment test for goodwill for all reporting units as of March 31, 2024 using a qualitative approach, except for Cultec, which was assessed using a quantitative approach.
We performed our annual impairment test for goodwill for all reporting units as of March 31, 2025 using a qualitative approach, except for Cultec, which was assessed using a quantitative approach.
Determining the fair value of a reporting unit is judgmental in nature and involves the use of significant estimates and assumptions. Estimates and assumptions include: revenue growth rates and EBITDA used to calculate projected future cash flows, risk-adjusted discount rates, future economic and market conditions, and determination of appropriate market comparables.
Estimates and assumptions include: revenue growth rates and EBITDA used to calculate projected future cash flows, risk-adjusted discount rates, future economic and market conditions, and determination of appropriate market comparables. The fair value estimates are based on assumptions management believes to be reasonable but are inherently uncertain.
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, 2024 and 2023.
For Allied Products & Other, gross profit increased due to the same factors driving the decrease in Net sales. 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.
Executive Summary of Our Fiscal 2024 Results • Net sales decreased 6.4% to $2.9 billion • Net income increased 0.4% to $513.3 million • Net income per diluted share increased 6.1% to $6.45 • Adjusted EBITDA increased 2.1% to $922.9 million • Cash provided by operating activities increased $10.1 million to $717.9 million • Free cash flow decreased $6.8 million to $534.1 million Net sales decreased $196.6 million, or 6.4%, to $2,874.5 million, as compared to $3,071.1 million in the prior year.
From time to time, we use derivatives to reduce our exposure to currency fluctuations. 26 Table of Contents Advanced Drainage Systems, Inc Executive Summary of Our Fiscal 2025 Results • Net sales increased 1.0% to $2.9 billion • Net income decreased 11.8% to $452.6 million • Net income per diluted share decreased 10.7% to $5.76 • Adjusted EBITDA decreased 3.7% to $889.2 million • Cash provided by operating activities decreased $136.4 million to $581.5 million • Free cash flow decreased $165.6 million to $368.5 million 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.
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.
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.
Investing Cash Flows - 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.
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.
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.
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.
Description of our Segments 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.
As a percentage of net sales, Adjusted EBITDA was 30.6% as compared to 32.1% in the prior year. Description of our Segments 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.
From time to time, we may explore additional financing methods and other means to raise capital. There can be no assurance that any additional financing will be available to us on acceptable terms or at all. Free Cash Flow - Free cash flow is a non-GAAP financial measure that comprises cash flow from operations less capital expenditures.
These sources have been sufficient historically to fund our primary liquidity requirements, including working capital, capital expenditures, debt service and dividend payments. From time to time, we may explore additional financing methods and other means to raise capital. There can be no assurance that any additional financing will be available to us on acceptable terms or at all.
Net income attributable to noncontrolling interest – Net income attributable to noncontrolling interest decreased for the fiscal year ended March 31, 2024 due to decreased net income at our ADS Mexicana joint venture.
Net income attributable to noncontrolling interest - Net income attributable to noncontrolling interest decreased for the fiscal year ended March 31, 2025 due to decreased net income at our ADS Mexicana joint venture. 29 Table of Contents Advanced Drainage Systems, Inc 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.
(c) Includes derivative fair value adjustments, foreign currency transaction (gains) losses, 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).
(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). 30 Table of Contents Advanced Drainage Systems, Inc Liquidity and Capital Resources Historically we have funded our operations through internally generated cash flow supplemented by debt financings, equity issuance and finance and operating leases.
Cost of goods sold and Gross profit – The following table presents gross profit by reportable segment for the fiscal years ended March 31, 2024 and 2023.
The increase for Allied Products & Other was primarily driven by demand partially offset by unfavorable price/mix. 28 Table of Contents Advanced Drainage Systems, Inc 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.
(Amounts in thousands) 2024 2023 $ Variance % Variance Pipe $ 448,186 $ 476,859 $ (28,673) (6.0) % Infiltrator 259,065 213,242 45,823 21.5 International 57,605 56,188 1,417 2.5 Allied Products & Other 385,650 371,195 14,455 3.9 Intersegment eliminations (4,557) 924 (5,481) (593.2) Total gross profit $ 1,145,949 $ 1,118,408 $ 27,541 2.5 % Our consolidated Cost of goods sold for the fiscal year ended March 31, 2024 decreased by $224.2 million or, 11.5%, and our consolidated Gross profit increased by $27.5 million, or 2.5%, compared to the same period in fiscal 2023.
(Amounts in thousands) 2025 2024 $ Variance % Variance Pipe $ 362,676 $ 448,186 $ (85,510) (19.1) % Infiltrator 291,811 259,065 32,746 12.6 International 50,052 57,605 (7,553) (13.1) Allied Products & Other 389,528 385,650 3,878 1.0 Intersegment eliminations 174 (4,557) 4,731 (103.8) Total gross profit $ 1,094,241 $ 1,145,949 $ (51,708) (4.5) % 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.
Such capital expenditures are expected to be financed using funds generated by operations. We had approximately $130 million of open orders through purchase commitments as of March 31, 2024. Financing Cash Flows – During fiscal 2024, cash used in financing activities was $284.3 million.
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.
Working capital increased to $860.3 million as of March 31, 2024, from $638.7 million as of March 31, 2023, primarily due to increases in cash and an increase in accounts receivable due to increased net sales offset by increases in accounts payable due to the timing of the purchases of raw materials. 30 Table of Contents Advanced Drainage Systems, Inc.
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.
(Amounts in thousands) 2024 2023 $ Variance % Variance Pipe $ 1,544,290 $ 1,717,189 $ (172,899) (10.1) % Infiltrator 449,027 442,280 6,747 1.5 International 207,769 219,853 (12,084) (5.5) Allied Products & Other 673,387 691,799 (18,412) (2.7) Total Consolidated $ 2,874,473 $ 3,071,121 $ (196,648) (6.4) % Our consolidated net sales for the fiscal year ended March 31, 2024 decreased by $196.6 million, or 6.4%, compared to fiscal 2023.
(Amounts in thousands) 2025 2024 $ Variance % Variance Pipe $ 1,503,377 $ 1,544,290 $ (40,913) (2.6) % Infiltrator 516,296 449,027 67,269 15.0 International 194,630 207,769 (13,139) (6.3) Allied Products & Other 689,942 673,387 16,555 2.5 Total Consolidated $ 2,904,245 $ 2,874,473 $ 29,772 1.0 % 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 cash outflows were offset by $500.0 million of proceeds from Senior Notes due 2030. During fiscal 2022 , cash used in financing activities was $251.1 million. During fiscal 2022, we repurchased shares for $292.0 million. Debt and Capitalized Lease Obligations See “Note 6. Leases” and “Note 12. Debt” to our consolidated financial statements included in “Item 8.
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. Debt and Capitalized Lease Obligations See “Note 6. Leases” and “Note 12.
Domestic pipe sales decreased $172.9 million, or 10.1%, to $1,544.3 million. Domestic Allied Products & Other sales decreased $18.4 million, or 2.7%, to $673.4 million. Infiltrator sales increased $6.7 million, or 1.5%, to $449.0 million.
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%.
Gross profit increased $27.5 million, or 2.5%, to $1,145.9 million as compared to $1,118.4 million in the prior year. The increase in gross profit is primarily due to favorable material cost, partially offset by the decrease in volume and unfavorable fixed cost absorption.
The decrease in gross profit is primarily driven by unfavorable pricing and material cost, partially offset by favorable volume, sales mix and manufacturing costs. 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.
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. 26 Table of Contents Advanced Drainage Systems, Inc.
Allied Products & Other - Our other operating segments manufacture a range of Allied Products & Other that are complementary to our Pipe products.
The increase in Selling, general and administrative expenses is the result of an increase in stock-based and incentive compensation related to business performance, headcount to support our engineering and innovation initiatives and the impact of inflation.
The increase in Selling, general and administrative expenses is primarily the result of the operating and acquisition expenses of Orenco partially offset by favorable incentive and stock-based compensation expense.
Pipe – Our Pipe segment manufactures and markets high performance thermoplastic corrugated pipe throughout the United States.
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. Pipe - Our Pipe segment manufactures and markets high performance thermoplastic corrugated pipe throughout the United States.
The decrease in overall domestic net sales was driven by lower demand in the U.S. construction and agriculture end markets during the first half of the year. The increase in sales at Infiltrator was driven by better-than-expected single-family housing construction and new product introductions. International sales decreased $12.1 million, or 5.5%, to $207.8 million.
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. 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.
As of March 31, 2024, we had $1,079.1 million in liquidity, including $490.2 million of cash, $588.9 million in borrowings available under our Revolving Credit Agreement, excluding $11.2 million of outstanding letters of credit.
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. 31 Table of Contents Advanced Drainage Systems, Inc 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.
Removed
From time to time, we use derivatives to reduce our exposure to currency fluctuations. 25 Table of Contents Advanced Drainage Systems, Inc.
Added
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.
Removed
Adjusted EBITDA, a non-GAAP financial measure, increased $19.0 million, or 2.1%, to $922.9 million, as compared to $904.0 million in the prior year. The increase is primarily due to the factors mentioned above. As a percentage of net sales, Adjusted EBITDA was 32.1% as compared to 29.4% in the prior year.
Added
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.
Removed
The decrease in overall domestic net sales was driven by lower demand in the U.S. construction and agriculture end markets during the first half of the year. The increase in sales at Infiltrator was driven by better-than-expected single-family housing construction and new product introductions.
Added
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. During fiscal 2024, cash used for investing activities was $155.7 million.
Removed
The 27 Table of Contents Advanced Drainage Systems, Inc. increase in gross profit is primarily due to favorable material cost, partially offset by the decrease in volume and unfavorable fixed cost absorption.
Added
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. During fiscal 2024, cash used in financing activities was $284.3 million.
Removed
See “Note 13. Employee Benefit Plans” for additional information. (b) Represents expenses recorded related to legal, accounting and other professional fees incurred in connection with business or asset acquisitions and dispositions.
Added
The fair value of goodwill is determined by considering both the income and market approach. Determining the fair value of a reporting unit is judgmental in nature and involves the use of significant estimates and assumptions.
Removed
Liquidity and Capital Resources Historically we have funded our operations through internally generated cash flow supplemented by debt financings, equity issuance and finance and operating leases. These sources have been sufficient historically to fund our primary liquidity requirements, including working capital, capital expenditures, debt service and dividend payments.
Removed
Our increase of cash in fiscal 2023 of $197.0 million was predominantly driven by cash generated from operations in excess of changes in working capital and $500.0 million proceeds from the issuance of senior notes. These sources were partially offset by $575.0 million in share repurchases, capital expenditures of $166.9 million, and $44.9 million of dividend payments.
Removed
Cash flow from operating activities in fiscal 2023 was primarily driven by operating income offset by changes in working capital. During fiscal 2022, cash provided by operating activities was $274.9 million. Cash flow from operating activities in fiscal 2022 was primarily driven by operating income offset by investments in working capital.
Removed
Our capital expenditures in fiscal 2022 were used primarily to support growth, but also to support our recycled resin and technology improvement initiatives. We currently anticipate that we will make capital expenditures of approximately $250 to $300 million in fiscal 2025 to focus on growth and productivity through increasing our manufacturing capacity and investing in automation.
Removed
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.
Removed
If our historical experience differs from future experience, our estimates of variable consideration could differ. 33 Table of Contents Advanced Drainage Systems, Inc.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

3 edited+0 added−0 removed14 unchanged
Biggest changeAssuming the Revolving Credit Facility is fully drawn, each 1.0% increase or decrease in the applicable interest rate would change our interest expense by approximately $10.2 million, for the year ended March 31, 2024. Credit Risk - Financial instruments that potentially subject us to a concentration of credit risk consist principally of accounts receivable.
Biggest changeAssuming the Revolving Credit Facility is fully drawn, each 1.0% increase or decrease in the applicable interest rate would change our interest expense by approximately $10.1 million, for the year ended March 31, 2025. Credit Risk - Financial instruments that potentially subject us to a concentration of credit risk consist principally of accounts receivable.
A 1% increase in the price of resin would increase our cost of goods sold by approximately $5.0 million. Inflation Risk - Our cost of goods sold is subject to inflationary pressures and price fluctuations of the raw materials we use, primarily HDPE and PP resins.
A 1% increase in the price of resin would increase our cost of goods sold by approximately $5.4 million. Inflation Risk - Our cost of goods sold is subject to inflationary pressures and price fluctuations of the raw materials we use, primarily HDPE and PP resins.
A 1.0% increase in interest rates on our variable-rate debt would increase our annual forecasted interest expense by approximately $4.2 million based on our borrowings as of March 31, 2024.
A 1.0% increase in interest rates on our variable-rate debt would increase our annual forecasted interest expense by approximately $4.1 million based on our borrowings as of March 31, 2025.

Other WMS 10-K year-over-year comparisons