Advanced Drainage Systems, Inc.

good morning ladies and gentlemen and welcome to advanced drainage systems for quarter and fiscal year 2022 results conference call my name is juan and i will be your operator for today's call at this time all participants are in recent only mode later we will conduct a question and answer session if you would like to ask a question at that time please press star followed by number one on your telephone keypad. I would now like to turn the presentation over to your host for today's call, Mr. Mike Higgins, Vice President of Corporate Strategy and Investor Relations. Sir, you may begin.

Mr. Thank you, and good morning, everyone. Thanks for joining us for our call today. With me, I have Scott Barber, our President and CEO, and Scott Cottrell, our CFO. I would also like to remind you that we will discuss forward-looking statements Actual results may differ materially from those forward-looking statements because of various factors, including those discussed in our press release and the risk factors identified in our Form 10-K on file with the SEC. While we may update forward-looking statements in the future, we disclaim any obligation to do so. You should not place undue reliance on these forward-looking statements, all of which speak only as of today. Lastly, the press release we issued earlier this morning is posted on the investor relations section of our website. A copy of the release has also been included in an 8K submitted to the SEC. We will make replay of this conference call available via webcast on the company website. With that said, I'll turn the call over to Scott Barber.

Thanks, Mike, and good morning, everyone. Thank you for joining us on today's call. Fiscal 2022 played out largely as we communicated in February, with profit improvement occurring in the back half of the year due to multiple actions we took over the course of the year to improve pricing and operations. We closed out fiscal 2022 with a record $2.8 billion in revenue and $676 million in adjusted EBITDA, up 40% and 19% respectively. Our adjusted EBITDA margin was 24.4%, coming in at the high end of our guidance range. This fiscal year, we successfully managed through a number of challenges, including significant inflationary cost pressures, labor shortages, and two waves of COVID. Despite material shortages early in the year and persistent labor challenges, we were able to increase production and improve inventory levels to better service our customers, all while improving the safety within our facilities by double-digit rates. We employed $149 million in CapEx, primarily to drive organic growth more than any year in the history of the company. We also executed $292 million of share buybacks, and acquired Jet Polymers, a recycling company in the southeastern United States. I'm very proud of the performance of the entire operations team to help the company exceed our guidance ranges in this market environment. Domestic revenue increased across all end markets, driven by favorable pricing, as well as double-digit volume growth in the construction markets. as we continued our consistent track record of converting the market to our more environmentally friendly materials. Sales increased 45 percent in our priority states, with notable growth in Florida, Texas, and California. In addition, the 8 percent growth in the agriculture market displayed on slide four would have been even higher if we had had more available labor to run all of our production lines and available material in the spring season. In summary, the sales team did a great job executing our plan to meet the favorable demand we continue to see in the market. We finished out the year strong with a record $678 million in fourth quarter revenue, a 53% increase compared to last year. Sales growth was driven by both favorable pricing as well as construction market volume growth at ADS and Infiltrator. Agriculture volumes were down, driven by the cool, wet start to spring in the Midwest. Infiltrator sales increased 43%, primarily due to favorable pricing, with strong growth in the southeast and southern regions of the United States. The physical 2022 investments in Infiltrator continue to give us more capacity to work down the backlog, and order rates within that business remain favorable. Housing growth in the south, Midwest, and in rural areas remain strong where we have a better penetration of on-site septic products. Additionally, international sales increased 16% this quarter driven by growth in Mexico and the export businesses. We continue to leverage our Mexican and Canadian capacity to help service the strong domestic market demand and reduce our backlog. We have been working closely with our distribution partners to monitor market demand, and we collectively remain bullish on activity through calendar 2023. We continue to work programs with home builders and are encouraged by continued strength in land development. Our backlog is up double digit over this time last year, and we continue to work to reduce our backlog from peak levels through the recent capacity additions, improving service levels overall, Pace of orders and project strength remain favorable, as well as our ability to capture price in the market, which gives us confidence in the physical 2023 sales targets we issued today. April financial results were strong on a tough comparison to last year, which sets us up well for this year, in line with the guidance ranges we communicated today. To that end, we continue to invest in expanding our capabilities with investments in production capacity coming online at both ADS and Infiltrator in fiscal 2023. We plan to spend another $150 to $180 million on CapEx this year. These investments will allow us to continue working down the high levels of backlog build back inventory, and service the strong demand we continue to see in our end markets, particularly in key growth regions like the southeastern United States. From a profitability perspective, our adjusted EBITDA increased 78 percent this quarter. We realized the full benefit from price increases implemented through the first half of fiscal 2022, covering inflationary cost pressure on materials, transportation, and labor. We continue to face challenges around labor shortages and elevated transportation costs, which we expect to continue. Now, I want to highlight some other recent announcements. Earlier in May, we announced the acquisition of Coltec Inc. Coltec designs and sells plastic stormwater and on-site static chambers with a strong presence in the eastern United States. Their products expand ADS's portfolio of allied product solutions, enabling us to meet the growing and evolving needs of our customers. Coltech is well-respected within the industry, and we are excited to welcome the Coltech team to ADS. Finally, in a press release issued earlier this morning, we announced ADS's board chair, Bob Kidder, intends to retire at the end of his term this July and will not seek re-election. Bob has provided tremendous leadership and imparted timely advice throughout ADS's journey as a public company. His board knowledge and management experience are unmatched, and I'm personally very grateful for his guidance and partnership since I joined ADS in 2017. It is ADS's good fortune to have had Bob Kidder serve as board chair over the last five years, and I wish him success in his future endeavors. The board has elected Bob Ebersole, currently serving as chair of the audit committee, to serve as board chair starting in July. Bob has been on the ADS board since 2008 and brings a very strong background in finance and business management. I'm excited to work with Bob in his new role going forward. With that, I will turn the call over to Scott Cottrell to further discuss our financial results.