WMS Q4 2026 Earnings Call Transcript

President & Chief Executive Officer — Donald Scott Barbour Chief Financial Officer — Scott A. Cottrill Executive Vice President, Sales — Michael Higgins President, Infiltrator Water Technologies — Craig J. Taylor Donald Scott Barbour: Thank you, Mike, and good morning, everyone. Thank you all for joining us on today s call. We are pleased to close out fiscal year 26 with strong results and we have a lot to cover today. Including our fourth quarter performance, full year results, an update on the NDS integration and a preview of what lies ahead as we prepare for our upcoming investor day. Okay. A lot happened in the fourth quarter. Despite the quarter being our most weather dependent, a seasonally variable period, we executed well and delivered results that reflect the strength and breadth of our portfolio. The diversification across our allied products, infiltrator business, and the HP pipe products combined with the continued execution of our market share model, allowed us to navigate a challenging demand environment and close the fiscal year on a strong note. Let me touch on a few highlights. As you saw in the press release, following the acquisition of NDS, we updated our reporting segments to stormwater and wastewater as reflected in the results today. The stormwater segment contains the legacy ADS business, Pipe and Allied Products, as well as acquisitions we have made in the space. NDS, Coltech, and River Valley Pipe. The wastewater segment contains the legacy infiltrator business as well as the acquisition of Orenco. Excuse me. Stormwater revenue increased 12% driven by a 43% increase in allied product sales including the $49 million contribution from the NDS acquisition that closed February 2nd. On an organic basis, stormwater sales increased 2% overall with a 12% growth in Allied Products. Once again, revenue in several highly profitable products grew double digit. Including the StormTech retention, detention chambers, the Nyloplast capture structures, and our water quality product line. These product lines continue to benefit from new product introductions and ongoing customer programs. Pipe revenue decreased 2% reflecting softness in the residential and infrastructure markets. Agriculture sales increased 30% in the quarter as customers bought ahead of price increases. Pricing remained stable throughout the quarter and material costs were favorable relative to the prior year. Wastewater revenue increased 4% with strong activity in the Southeast and South. Tank products increased double digits. Driven by material conversion product line expansion, and additional distribution. Leachfield sales remained resilient and our advanced treatment systems, including Orenco, continued to gain share in both residential and commercial applications. From an end market perspective, sales in our core nonresidential market increased 6% with strength in the West and Midwest Sales of Allied Products experienced broad based growth across the US as we continue to focus on selling the complete package. Sales in the residential end market increased 18% including the impact from NDS. Excluding NDS, resident residential sales decreased 1%, Single family housing continues to face headwinds from affordability, interest rate dynamics, in addition to geopolitical uncertainty. Importantly, we continue to see improving trends in the multifamily development. The Infiltrator Core residential business continues to significantly outperform the market driven by new products, and new distribution partners. We remain confident we have the right strategies and portfolio to increase our participation in the residential market as conditions inevitably improve. Moving to profitability. Adjusted EBITDA increased 6% in the quarter resulting in an adjusted EBITDA margin of 27.8%. This quarter s resilient margin is a reflection of the favorable growth, product mix, and price cost. As well as operational self help initiatives and the capital invested over the last several years. Turning to the NDS integration. We are pleased with the progress made since closing the acquisition in February. The NDS team is a strong cultural fit and we are on track to achieve our integration milestones. Continue to expect $25 million in annual cost synergies by year 3 and we are increasingly excited about the revenue synergy opportunities as we expand the collective product portfolio across our distribution and retail channels. We look forward to talking about NDS at investor day. Regarding the upcoming Investor Day, which will take place on June 18 at our engineering and technology center in Hilliard, Ohio. We are looking forward to sharing updates on our differentiated growth strategy and our resilient profit platform. As well as our medium term financial targets and the payoff from the significant capital have deployed over the last several years. We hope to see you all there. Please reach out to the investor relations team with any questions about t

WMS Q4 2026 Earnings Call Transcript

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WMS Q4 2026 Earnings Call Transcript

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