Advanced Drainage Systems Q3 2026 Advanced Drainage Systems Inc Earnings Call | AllMind AI Earnings | AllMind AI
Q3 2026 Advanced Drainage Systems Inc Earnings Call
Operator: Conference call. My name is Ellen, and I am your operator for today's call. At this time, all participants are in listen-only mode. Later, we will conduct a question-and-answer session. If you would like to ask a question, please press star one on your telephone keypad. To withdraw your question, press star one again. 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.
Operator: Conference call. My name is Ellen, and I am your operator for today's call. At this time, all participants are in listen-only mode. Later, we will conduct a question-and-answer session. If you would like to ask a question, please press star one on your telephone keypad. To withdraw your question, press star one again. 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.
Speaker #1: Conference call. My name is Ellen, and I am your operator for today's call. At this time, all participants are in listen-only mode. Later, we will conduct a question-and-answer session.
Speaker #1: If you would like to ask a question, please press star one on your telephone keypad. To withdraw your question, press star one again. 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.
Speaker #1: Sir, you may begin.
Speaker #2: Good morning, everybody. Thanks for joining us today. With me today, I have Scott Barbour, our President and CEO. Scott Cottrill, our CFO, and Craig Taylor.
Michael Higgins: Good morning, everybody. Thanks for joining us today. With me today, I have Scott Barber, our President and CEO, Scott Cottrell, our CFO, and Craig Taylor, President of our Infiltrator business. 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 filed 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 8-K submitted to the SEC.
Michael Higgins: Good morning, everybody. Thanks for joining us today. With me today, I have Scott Barber, our President and CEO, Scott Cottrell, our CFO, and Craig Taylor, President of our Infiltrator business. 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 filed 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 8-K submitted to the SEC.
Q3 2026 Advanced Drainage Systems Inc Earnings Call
Speaker #2: President of our Infiltrator business. I would also like to remind you that we will discuss forward-looking statements and actual results may differ materially from those forward-looking statements.
Speaker #2: Because of various factors, including those discussed in our press release, and the risk factors identified in our Form 10-K filed with the SEC. While we may update forward-looking statements in the future, we disclaim any obligation to do so.
Speaker #2: 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.
Speaker #2: A copy of the release has also been included in an 8-K submitted to the SEC. We will make a replay of this conference call available via webcast on the company website.
Michael Higgins: We will make a replay of this conference call available via webcast on the company website. I'll now turn the call over to Scott Barber.
Michael Higgins: We will make a replay of this conference call available via webcast on the company website. I'll now turn the call over to Scott Barber.
Speaker #2: I'll now turn
Speaker #2: the call over to Scott Barbour. Thank
Speaker #3: you, Mike, and good morning, everyone. Thank you all for joining us on today's call. We are excited to talk to you today and have a lot to cover, including the strong results we delivered in a challenging market environment, the acquisition of NDS that closed on Monday, and other business updates.
Scott Barber: Thank you, Mike, and good morning, everyone. Thank you all for joining us on today's call. We are excited to talk to you today and have a lot to cover, including the strong results we delivered in a challenging market environment, the acquisition of NDS that closed on Monday, and other business updates. Let me start with the Q3 results. We outperformed the market again this quarter through the Infiltrator business, the Allied Products portfolio, and HP Pipe sales as we continued to drive the market share model, introduce new products, distribution, and customer programs. These strategic priorities continue to help us achieve growth in the mixed demand environment we see today and reflect ADS's strategy to prioritize higher growth, higher margin, Allied and Infiltrator products that strengthen the resiliency in our profitability.
Scott Barbour: Thank you, Mike, and good morning, everyone. Thank you all for joining us on today's call. We are excited to talk to you today and have a lot to cover, including the strong results we delivered in a challenging market environment, the acquisition of NDS that closed on Monday, and other business updates. Let me start with the Q3 results. We outperformed the market again this quarter through the Infiltrator business, the Allied Products portfolio, and HP Pipe sales as we continued to drive the market share model, introduce new products, distribution, and customer programs. These strategic priorities continue to help us achieve growth in the mixed demand environment we see today and reflect ADS's strategy to prioritize higher growth, higher margin, Allied and Infiltrator products that strengthen the resiliency in our profitability.
Speaker #3: Let me start with the third-quarter results. We outperformed the market again this quarter through the Infiltrator business, the Allied Products portfolio, and HP pipe sales, as we continue to drive the market share model introduced new products, distribution, and customer programs.
Speaker #3: These strategic priorities continue to help us achieve growth in the mixed demand environment we see today, and reflect ADS's strategy to prioritize higher Allied and Infiltrator products that strengthen the resiliency in our profitability.
Speaker #3: This resulted in one of the most profitable third quarters in our history, with a 30.2% adjusted EBITDA margin. Let me touch on a few highlights.
Scott Barber: This resulted in one of the most profitable third quarters in our history, with a 30.2% Adjusted EBITDA margin. Let me touch on a few highlights. Allied Products sales increased 8%, with growth in several key products, including the StormTech storage chambers, the Nyloplast capture structures, and the water quality products, all of which benefited from new products introduced over the last year. Infiltrator revenue increased 2%, with good activity in the Southeast and the South. The Orenco acquisition is now fully lapsed, and its impact is embedded in our reported growth. Growth in tanks continues to be driven by conversion, product line expansion, and additional distribution. Leach field sales remained resilient despite the market sluggishness, and advanced treatment systems continued to gain share in residential due to new product launches and the growth in commercial systems.
Scott Barbour: This resulted in one of the most profitable third quarters in our history, with a 30.2% Adjusted EBITDA margin. Let me touch on a few highlights. Allied Products sales increased 8%, with growth in several key products, including the StormTech storage chambers, the Nyloplast capture structures, and the water quality products, all of which benefited from new products introduced over the last year. Infiltrator revenue increased 2%, with good activity in the Southeast and the South. The Orenco acquisition is now fully lapsed, and its impact is embedded in our reported growth. Growth in tanks continues to be driven by conversion, product line expansion, and additional distribution. Leach field sales remained resilient despite the market sluggishness, and advanced treatment systems continued to gain share in residential due to new product launches and the growth in commercial systems.
Speaker #3: Allied Products sales increased 8%, with growth in several key products including the StormTech storage chambers, the Nyloplast capture structures, and the water quality products.
Speaker #3: All of which benefited from new products introduced over the last year. Infiltrator revenue increased 2%, with good activity in the Southeast and the South.
Speaker #3: The lapped and its impact is embedded in our reported growth. Growth in tanks continues to be driven by conversion. Product line expansion and additional distribution.
Speaker #3: Leachfield sales remain resilient despite the market sluggishness and advanced treatment systems continue to gain share in residential due to new product launches, and the growth in commercial systems.
Speaker #3: Pipe revenue was down slightly, with growth in the HP pipe products being offset by weaker sales into the residential and infrastructure pricing remained stable, and materials are favorable compared to the prior year.
Scott Barber: Pipe revenue was down slightly, with growth in the HP Pipe products being offset by weaker sales into the residential and infrastructure markets. Importantly, pricing remained stable and materials are favorable compared to the prior year. From an end market perspective, sales in our core non-residential market increased 5%, with growth driven by sales in the Southeast, Midwest, and up the Atlantic Coast into the Northeast. Based on market indicators we follow, we are updating our end market demand forecast for the report for the non-residential market to down low to mid-single digits, compared to the previous outlook of flat to down low single digits. In spite of a challenging demand environment, ADS's Q3 performance highlights the strength and balance of our portfolio and the execution of the sales team on selling the high-growth products we continue to highlight, HP Pipe and the Allied Products.
Scott Barbour: Pipe revenue was down slightly, with growth in the HP Pipe products being offset by weaker sales into the residential and infrastructure markets. Importantly, pricing remained stable and materials are favorable compared to the prior year. From an end market perspective, sales in our core non-residential market increased 5%, with growth driven by sales in the Southeast, Midwest, and up the Atlantic Coast into the Northeast. Based on market indicators we follow, we are updating our end market demand forecast for the report for the non-residential market to down low to mid-single digits, compared to the previous outlook of flat to down low single digits. In spite of a challenging demand environment, ADS's Q3 performance highlights the strength and balance of our portfolio and the execution of the sales team on selling the high-growth products we continue to highlight, HP Pipe and the Allied Products.
Speaker #3: From an in-market perspective, sales in our core non-residential market increased 5%, with growth driven by sales in the Southeast, Midwest, and up the Atlantic Coast into the Northeast.
Speaker #3: Based on market indicators we follow, we are updating our in-market demand forecast for the four of the non-residential market to down low to mid-single digits compared to the previous outlook of flat to down low single digits.
Speaker #3: In spite of a challenging demand environment, ADS's third-quarter performance highlights the strength and balance of our portfolio, and the execution of the sales team on selling the high-growth products, we continue to highlight.
Speaker #3: HP pipe and the Allied products. Sales in the residential end market were down slightly as it remains under pressure. However, the Infiltrator core residential business continues to significantly outperform the market due to new products and distribution.
Scott Barber: Sales in the residential end market were down slightly as it remains under pressure. However, the Infiltrator core residential business continues to significantly outperform the market due to new products and distribution. In addition, for the third quarter in a row, Allied product sales increased in the residential market, driven by the multifamily construction activity. Single-family residential land development activity was better in the Atlantic Coast and Southeast, but the DIY channel continues to experience significant weakness. Based on our performance in the current end market, which was down high single digits, we are confident that we have the right strategies, the right product portfolio, and the go-to-market model to increase participation in the residential market, and we will benefit as that market inevitably recovers.
Scott Barbour: Sales in the residential end market were down slightly as it remains under pressure. However, the Infiltrator core residential business continues to significantly outperform the market due to new products and distribution. In addition, for the third quarter in a row, Allied product sales increased in the residential market, driven by the multifamily construction activity. Single-family residential land development activity was better in the Atlantic Coast and Southeast, but the DIY channel continues to experience significant weakness. Based on our performance in the current end market, which was down high single digits, we are confident that we have the right strategies, the right product portfolio, and the go-to-market model to increase participation in the residential market, and we will benefit as that market inevitably recovers.
Speaker #3: In addition, for the third quarter in a row, Allied product sales increased in the residential market, driven by the multifamily construction activity. Single-family residential land development activity was better in the Atlantic Coast and Southeast, but the DIY channel continues to experience significant weakness.
Speaker #3: Based on our performance in the current end market, which was down high single digits, we are confident that we have the right strategies and the right product portfolio, and the go-to-market model to increase market, and we will benefit as that market inevitably recovers.
Speaker #3: Moving to profitability, adjusted EBITDA increased 9% despite the flat revenue base, resulting in a $250 basis point increase in the adjusted EBITDA margin, to $30.2%.
Scott Barber: Moving to profitability, adjusted EBITDA increased 9% despite the flat revenue base, resulting in a 250 basis point increase in the adjusted EBITDA margin to 30.2%. Profitability increased across all facets of the business, including Pipe, Allied Products, and Infiltrator, due in part to the capital invested over the last several years and the cost improvement programs we started over a year ago. The sales team has also done an excellent job strengthening the product mix, as well as managing a challenging end market environment to achieve favorable price costs in this period. We're excited to have closed the NDS acquisition on Monday of this week. NDS's products are highly complementary to ADS's stormwater capture portfolio and enhance our offering in both the distribution and retail channels.
Scott Barbour: Moving to profitability, adjusted EBITDA increased 9% despite the flat revenue base, resulting in a 250 basis point increase in the adjusted EBITDA margin to 30.2%. Profitability increased across all facets of the business, including Pipe, Allied Products, and Infiltrator, due in part to the capital invested over the last several years and the cost improvement programs we started over a year ago. The sales team has also done an excellent job strengthening the product mix, as well as managing a challenging end market environment to achieve favorable price costs in this period. We're excited to have closed the NDS acquisition on Monday of this week. NDS's products are highly complementary to ADS's stormwater capture portfolio and enhance our offering in both the distribution and retail channels.
Speaker #3: Profitability increased across all facets of the business, including pipe, Allied products, and Infiltrator, due in part to the capital invested over the last several years and the cost improvement programs we started over a year ago.
Speaker #3: The sales team has also done an excellent job strengthening the product mix as well as managing a challenging end market environment to achieve favorable price-cost in this period.
Speaker #3: We're excited to have closed the NDS acquisition on Monday of this week. NDS's products are highly complementary to ADS's stormwater capture portfolio and enhance our offering in both the distribution and retail channels.
Speaker #3: We now operate the three most relevant brands in stormwater and wastewater management. Advanced Drainage Systems Infiltrator and NDS. The portfolio of products available across these brands is the largest and broadest in the industry, which gives us unmatched ability to meet customer needs across applications and in markets.
Scott Barber: We now operate the three most relevant brands in stormwater and wastewater management: Advanced Drainage Systems, Infiltrator, and NDS. The portfolio of products available across these brands is the largest and broadest in the industry, which gives us unmatched ability to meet customer needs across applications and end markets. We are in the early days of integration, and we look forward to sharing more about the business and our synergy plan at our Investor Day this summer. And on that note, I'm pleased to share the date for our ADS's third Investor Day, 18 June 2026. Management will host a presentation at ADS's Engineering and Technology Center in Columbus, Ohio, followed by a tour for in-person guests.
Scott Barbour: We now operate the three most relevant brands in stormwater and wastewater management: Advanced Drainage Systems, Infiltrator, and NDS. The portfolio of products available across these brands is the largest and broadest in the industry, which gives us unmatched ability to meet customer needs across applications and end markets. We are in the early days of integration, and we look forward to sharing more about the business and our synergy plan at our Investor Day this summer. And on that note, I'm pleased to share the date for our ADS's third Investor Day, 18 June 2026. Management will host a presentation at ADS's Engineering and Technology Center in Columbus, Ohio, followed by a tour for in-person guests.
Speaker #3: We are in the early days of integration, and we look forward to sharing more about the business and our synergy plan at our investor day this summer.
Speaker #3: And on that note, I'm pleased to share the date for our ADS's third investor day: June 18th, 2026. Management will host a presentation at ADS's engineering and technology center in Columbus, Ohio, followed by a tour for in-person guests.
Speaker #3: Invitations will go out in the coming months, but at this event, you can expect us to cover growth priorities and updates to our key sales strategies, a deeper look at acquisitions, particularly of NDS and Orinco, the resiliency of our profitability, payoff from the capital deployed over the last several years, as well as the next capital programs we will invest in going forward, and of course, new medium-term financial targets.
Scott Barber: Invitations will go out in the coming months, but at this event, you can expect us to cover growth priorities and updates to our key sales strategies, a deeper look at acquisitions, particularly of NDS and Orenco, the resiliency of our profitability, payoff from the capital deployed over the last several years, as well as the next capital programs we will invest in going forward, and of course, new medium-term financial targets. We look forward to providing the business updates and showing off the Engineering and Technology Center, the largest stormwater research facility in the world, which will drive innovation for many years to come. If you have questions about the event, please reach out to our investor relations team. To summarize, we continue to execute effectively in a challenging environment. Our self-help operational initiatives continue to bear fruit, as demonstrated by the profitability reported today.
Scott Barbour: Invitations will go out in the coming months, but at this event, you can expect us to cover growth priorities and updates to our key sales strategies, a deeper look at acquisitions, particularly of NDS and Orenco, the resiliency of our profitability, payoff from the capital deployed over the last several years, as well as the next capital programs we will invest in going forward, and of course, new medium-term financial targets. We look forward to providing the business updates and showing off the Engineering and Technology Center, the largest stormwater research facility in the world, which will drive innovation for many years to come. If you have questions about the event, please reach out to our investor relations team. To summarize, we continue to execute effectively in a challenging environment. Our self-help operational initiatives continue to bear fruit, as demonstrated by the profitability reported today.
Speaker #3: We look forward to providing the business updates and showing off the engineering and technology center the largest stormwater research facility in the world, which will drive innovation for many years to come.
Speaker #3: If you have questions about the event, please reach out to our investor relations team. To summarize, we continue to execute effectively in a challenging environment.
Speaker #3: Our self-help, operational initiatives continue to bear fruit, as profitability reported today. The outperformance year to date is driven by strong execution and I'm very proud of the team for doing so in a challenging environment.
Speaker #3: Our self-help, operational initiatives continue to bear fruit, as profitability reported today. The outperformance year to date is driven by strong execution and I'm very proud of the team for doing so in a challenging demonstrated by the strengths, the When you stack up our scale, the product portfolio, our go-to-market strategy, and the ability to invest in our business, our people, and the industry's growth, you can see remains both relevant and ADS's value proposition powerful.
Scott Barber: The outperformance year to date is driven by strong execution, and I'm very proud of the team for doing so in a challenging environment. When you stack up our strengths, the scale, the product portfolio, our go-to-market strategy, and the ability to invest in our business, our people, and the industry's growth, you can see ADS's value proposition remains both relevant and powerful. While we navigate this near-term environment, we will do so with an eye toward the future. We remain firmly committed to our long-term vision, and we'll continue investing in the capabilities that will position us for the future success. Overall, the long-term outlook for our business remains strong, supported by compelling secular tailwinds, driving demand for water management solutions across North America. Now, I'll turn the call over to Scott Cottrell.
Scott Barbour: The outperformance year to date is driven by strong execution, and I'm very proud of the team for doing so in a challenging environment. When you stack up our strengths, the scale, the product portfolio, our go-to-market strategy, and the ability to invest in our business, our people, and the industry's growth, you can see ADS's value proposition remains both relevant and powerful. While we navigate this near-term environment, we will do so with an eye toward the future. We remain firmly committed to our long-term vision, and we'll continue investing in the capabilities that will position us for the future success. Overall, the long-term outlook for our business remains strong, supported by compelling secular tailwinds, driving demand for water management solutions across North America. Now, I'll turn the call over to Scott Cottrell.
Speaker #3: While we navigate this near-term environment, we will do so with an eye toward the future. We remain firmly committed to our long-term vision and will continue investing in the capabilities that will position us for the future success.
Donald Scott Barbour: price loss in this period. We're excited to have closed the NDS acquisition on Monday of this week. NDS's products are highly complementary to ADS's stormwater capture portfolio and enhance our offering in both the distribution and retail channels. We now operate the three most relevant brands in stormwater and wastewater management: Advanced Drainage Systems, Infiltrator, and NDS. The portfolio of products available across these brands is the largest and broadest in the industry, which gives us unmatched ability to meet customer needs across applications and end markets. We are in the early days of integration, and we look forward to sharing more about the business and our synergy plan at our Investor Day this summer. And on that note, I'm pleased to share the date for our ADS's third Investor Day, 18 June 2026.
D. Scott Barbour: price loss in this period. We're excited to have closed the NDS acquisition on Monday of this week. NDS's products are highly complementary to ADS's stormwater capture portfolio and enhance our offering in both the distribution and retail channels. We now operate the three most relevant brands in stormwater and wastewater management: Advanced Drainage Systems, Infiltrator, and NDS. The portfolio of products available across these brands is the largest and broadest in the industry, which gives us unmatched ability to meet customer needs across applications and end markets. We are in the early days of integration, and we look forward to sharing more about the business and our synergy plan at our Investor Day this summer. And on that note, I'm pleased to share the date for our ADS's third Investor Day, 18 June 2026.
Indias acquisition on Monday of this week Nds's products are highly complementary to a D. S. As storm water capture portfolio and enhance our offering in both the distribution and retail channels. We now operate the three most relevant brands and storm water and wastewater management.
Speaker #3: Overall, the long-term outlook for our business remains strong, supported by compelling secular tailwinds driving demand for water management solutions across North America. Now I'll turn the call over to Scott Cottrill.
Speaker #2: Thanks, Scott. Today, my comments will focus on cash flow, capital allocation, and our updated guidance. Jumping this slide seven, I'd like to start by highlighting the fact that year to operations.
Scott Cottrill: Thanks, Scott. Today, my comments will focus on cash flow, capital allocation, and our updated guidance. Jumping to slide 7, I'd like to start by highlighting the fact that year to date, we generated $779 million in cash from operations, converting more than 100% of our adjusted EBITDA into cash. Year over year, cash flow from operations increased $239 million or 44%, driven by effective working capital management, increased profitability, and lower cash taxes, primarily due to the benefits of the OBBA. We ended the year with over $1 billion in cash and a half turn of net leverage. Turning to slide 8, we highlight our disciplined approach to capital allocation over the last several years.
Scott Cottrill: Thanks, Scott. Today, my comments will focus on cash flow, capital allocation, and our updated guidance. Jumping to slide 7, I'd like to start by highlighting the fact that year to date, we generated $779 million in cash from operations, converting more than 100% of our adjusted EBITDA into cash. Year over year, cash flow from operations increased $239 million or 44%, driven by effective working capital management, increased profitability, and lower cash taxes, primarily due to the benefits of the OBBA. We ended the year with over $1 billion in cash and a half turn of net leverage. Turning to slide 8, we highlight our disciplined approach to capital allocation over the last several years.
Advanced drainage systems, Infiltrator and India.
The portfolio of products available across these brands is the largest and broadest in the industry, which gives us unmatched ability to meet customer needs across applications and end markets.
Speaker #2: $779 million in cash from Converting more than 100% of our adjusted EBITDA into cash. Year over year, cash flow from operations increased $239 million or 44%, driven by effective working capital management, increased profitability, and lower cash taxes primarily due to the benefits of the OBBBA.
We are in the early days of integration and we look forward to sharing more about the business and our synergy plan at our Investor Day. This summer.
And on that note I am pleased to share the date for <unk> is third Investor Day June 18th 2026.
Donald Scott Barbour: Management will host a presentation at ADS's Engineering and Technology Center in Columbus, Ohio, followed by a tour for in-person guests. Invitations will go out in the coming months, but at this event, you can expect us to cover growth priorities and updates to our key sales strategies, a deeper look at acquisitions, particularly of NDS and Orenco, the resiliency of our profitability, payoff from the capital deployed over the last several years, as well as the next capital programs we will invest in going forward, and of course, new medium-term financial targets. We look forward to providing the business updates and showing off the Engineering and Technology Center, the largest stormwater research facility in the world, which will drive innovation for many years to come. If you have questions about the event, please reach out to our investor relations team.
D. Scott Barbour: Management will host a presentation at ADS's Engineering and Technology Center in Columbus, Ohio, followed by a tour for in-person guests. Invitations will go out in the coming months, but at this event, you can expect us to cover growth priorities and updates to our key sales strategies, a deeper look at acquisitions, particularly of NDS and Orenco, the resiliency of our profitability, payoff from the capital deployed over the last several years, as well as the next capital programs we will invest in going forward, and of course, new medium-term financial targets. We look forward to providing the business updates and showing off the Engineering and Technology Center, the largest stormwater research facility in the world, which will drive innovation for many years to come. If you have questions about the event, please reach out to our investor relations team.
Management will host a presentation at Ada Es is engineering and Technology Center in Columbus, Ohio, followed by a tour for in person guests in.
Speaker #2: We billion in cash and a ended the year with over $1 half turn of net
Invitations will go out in the coming months, but at this event you can expect us to cover growth priorities and updates to our key sales strategies.
Speaker #1: Leverage . Turning slide eight . We our approach to to last several allocation . over the Approximately 70% , 70% of total capital from deployed fiscal dedicated to 2020 to 2026 was growing the business through capital expenditures and strategic acquisitions .
A deeper look at acquisitions, particularly of India Center Rinko the.
Scott Cottrill: Approximately 70% of total capital deployed from fiscal 2020 to 2026 was dedicated to growing the business through capital expenditures and strategic acquisitions. This reflects our conviction in the long-term demand outlook across our end markets and our confidence in the returns generated from expanding capacity, innovation, and new product development, as well as continued automation and productivity improvements. The benefit of our balanced approach to capital allocation, as well as our strong commercial execution over this period of time, is evident in the growth and profitability of the business we experienced. In fiscal 2019, we were a $1 billion revenue company with an Adjusted EBITDA margin in the mid-teens. Today, we're generating approximately $3 billion in revenue and operating at an Adjusted EBITDA margin north of 31%, which is top quartile in the industry.
Scott Cottrill: Approximately 70% of total capital deployed from fiscal 2020 to 2026 was dedicated to growing the business through capital expenditures and strategic acquisitions. This reflects our conviction in the long-term demand outlook across our end markets and our confidence in the returns generated from expanding capacity, innovation, and new product development, as well as continued automation and productivity improvements. The benefit of our balanced approach to capital allocation, as well as our strong commercial execution over this period of time, is evident in the growth and profitability of the business we experienced. In fiscal 2019, we were a $1 billion revenue company with an Adjusted EBITDA margin in the mid-teens. Today, we're generating approximately $3 billion in revenue and operating at an Adjusted EBITDA margin north of 31%, which is top quartile in the industry.
The resiliency of our profitability.
Payoff from the capital deployed over the last several years as well as the next capital programs, we will invest in going forward and of course, new medium term financial targets.
Speaker #1: This reflects our conviction in the long outlook across our end markets and our term confidence in the returns generated from expanding capacity , innovation and new product well as as development , continued automation and productivity .
We look forward to providing business updates and showing off the engineering and technology Center, the largest storm water research facility in the World, which will drive innovation for many years to come.
Questions about the event, please reach out to our Investor Relations team.
Speaker #1: The benefit of our balanced approach to capital allocation , as our strong commercial well as execution over this period of time , is evident in the growth and profitability of the business .
Donald Scott Barbour: To summarize, we continue to execute effectively in a challenging environment. Our self-help operational initiatives continue to bear fruit, as demonstrated by the profitability reported today. The outperformance year to date is driven by strong execution, and I'm very proud of the team for doing so in a challenging environment. When you stack up our strengths, the scale, the product portfolio, our go-to-market strategy, and the ability to invest in our business, our people, and the industry's growth, you can see ADS's value proposition remains both relevant and powerful. While we navigate this near-term environment, we will do so with an eye toward the future. We remain firmly committed to our long-term vision, and we'll continue investing in the capabilities that will position us for the future success.
D. Scott Barbour: To summarize, we continue to execute effectively in a challenging environment. Our self-help operational initiatives continue to bear fruit, as demonstrated by the profitability reported today. The outperformance year to date is driven by strong execution, and I'm very proud of the team for doing so in a challenging environment. When you stack up our strengths, the scale, the product portfolio, our go-to-market strategy, and the ability to invest in our business, our people, and the industry's growth, you can see ADS's value proposition remains both relevant and powerful. While we navigate this near-term environment, we will do so with an eye toward the future. We remain firmly committed to our long-term vision, and we'll continue investing in the capabilities that will position us for the future success.
To summarize we continue to execute effectively in a challenging environment. Our self help operational initiatives continue to bear fruit as demonstrated by the profitable profitability reported today. The outperformance year to date is driven by strong execution and I'm very proud of the team for doing so in a challenging environment.
Speaker #1: We experienced in fiscal 2019 . We were $1 billion revenue a with an company EBITDA margin in the adjusted . Today , we're generating approximately $3 billion in revenue and operating at adjusted an EBITDA north of 31% , which is top quartile in the industry .
When you stack up our strengths the scale of the product portfolio, our go to market strategy and the ability to invest in our business our people and the industry's growth you can see a <unk> value proposition remains both relevant and powerful powerful.
Scott Cottrill: In addition, because of the strong cash generation profile of the business, we were able to fund the NDS acquisition this week almost entirely with cash on hand. Post-closing, our leverage is now approximately 1.5 times and is well within our guardrails of 1 to 2 times. It is also worth mentioning, we expect to access the capital markets this year due to some near-term maturities. In addition, today, we announced a new $1 billion stock repurchase authorization, bringing the total authorization to $1.148 billion. This authorization gives us the flexibility to execute the program over time, while still prioritizing organic investment opportunities we see as the lowest risk and highest return use of capital, as well as strategic M&A.
Scott Cottrill: In addition, because of the strong cash generation profile of the business, we were able to fund the NDS acquisition this week almost entirely with cash on hand. Post-closing, our leverage is now approximately 1.5 times and is well within our guardrails of 1 to 2 times. It is also worth mentioning, we expect to access the capital markets this year due to some near-term maturities. In addition, today, we announced a new $1 billion stock repurchase authorization, bringing the total authorization to $1.148 billion. This authorization gives us the flexibility to execute the program over time, while still prioritizing organic investment opportunities we see as the lowest risk and highest return use of capital, as well as strategic M&A.
Speaker #1: In because of the addition , strong generation profile of the business , we were able to fund the ends acquisition . This week almost entirely with cash on hand .
While we navigate this near term environment, we will do so with an eye towards the future. We remain firmly committed to our long term vision and we will continue investing in the capabilities that will position us for the future success overall.
Speaker #1: Post-closing . Our is now approximately 1.5 times and is well within our guardrails of 1 to 2 times . It is also worth mentioning we expect access the capital markets to this year due to some near term leverage maturities .
Donald Scott Barbour: Overall, the long-term outlook for our business remains strong, supported by compelling secular tailwinds, driving demand for water management solutions across North America. Now I'll turn the call over to Scott Cottrill.
D. Scott Barbour: Overall, the long-term outlook for our business remains strong, supported by compelling secular tailwinds, driving demand for water management solutions across North America. Now I'll turn the call over to Scott Cottrill.
Overall, the long term outlook for our business remains strong supported by compelling secular tailwind driving demand for water management solutions across North America.
Speaker #1: addition , In today we announced a new $1 billion stock repurchase authorization , bringing the total authorization $1,000,000,148 million . This authorization gives us the to over program time .
Now I'll turn the call over to Scott Cottrell.
Scott A. Cottrill: Thanks, Scott. Today, my comments will focus on cash flow, capital allocation, and our updated guidance. Jumping to slide 7, I'd like to start by highlighting the fact that year to date, we generated $779 million in cash from operations, converting more than 100% of our Adjusted EBITDA into cash. Year over year, cash flow from operations increased $239 million or 44%, driven by effective working capital management, increased profitability, and lower cash taxes, primarily due to the benefits of the OBBBA. We ended the year with over $1 billion in cash and 0.5 turn of net leverage. Turning to slide 8, we highlight our disciplined approach to capital allocation over the last several years.
Scott A. Cottrill: Thanks, Scott. Today, my comments will focus on cash flow, capital allocation, and our updated guidance. Jumping to slide 7, I'd like to start by highlighting the fact that year to date, we generated $779 million in cash from operations, converting more than 100% of our Adjusted EBITDA into cash. Year over year, cash flow from operations increased $239 million or 44%, driven by effective working capital management, increased profitability, and lower cash taxes, primarily due to the benefits of the OBBBA. We ended the year with over $1 billion in cash and 0.5 turn of net leverage. Turning to slide 8, we highlight our disciplined approach to capital allocation over the last several years.
Thanks, Scott today, My comments will focus on cash flow capital allocation and our updated guidance.
Jumping to slide seven I'd like to start by highlighting the fact that year to date, we generated $779 million in cash from operations converting more than 100% of our adjusted EBITDA and the cash.
Speaker #1: While still prioritizing organic opportunities . We see as the lowest risk and highest return use of investment capital , as well as strategic M&A Finally , .
Scott Barber: ...Finally, on slide 9. Based on our performance to date, current visibility, backlog of existing orders, and trends, we updated our fiscal 2026 guidance ranges today. We increased our fiscal year 2026 revenue guidance to a midpoint of $3.015 billion and adjusted EBITDA to a midpoint of $945 million. The adjusted EBITDA margin is expected to be between 31.1% and 31.6%, up 50 to 100 bps versus the prior year. This guidance includes approximately $40 million of revenue from the NDS acquisition at an approximate 20% EBITDA margin. The Q4 is our most variable quarter because of the impact of weather on construction. Winter Storm Fern and the adverse weather most of the US has experienced over the past two weeks is a great example of this.
Scott Cottrill: ...Finally, on slide 9. Based on our performance to date, current visibility, backlog of existing orders, and trends, we updated our fiscal 2026 guidance ranges today. We increased our fiscal year 2026 revenue guidance to a midpoint of $3.015 billion and adjusted EBITDA to a midpoint of $945 million. The adjusted EBITDA margin is expected to be between 31.1% and 31.6%, up 50 to 100 bps versus the prior year. This guidance includes approximately $40 million of revenue from the NDS acquisition at an approximate 20% EBITDA margin. The Q4 is our most variable quarter because of the impact of weather on construction. Winter Storm Fern and the adverse weather most of the US has experienced over the past two weeks is a great example of this.
Speaker #1: on based slide nine , on our performance to date visibility , current , backlog of existing orders and trends , updated our fiscal 2026 guidance ranges today .
Speaker #1: on based slide nine , on our performance to date visibility , current , backlog of existing orders and trends , updated our fiscal execute the We increased our fiscal year 26 revenue guidance to a midpoint of $3.15 billion adjusted and EBITDA to midpoint $945 million .
Year over year cash flow from operations increased $239 million or 44% driven by effective working capital management.
Increased profitability and lower cash taxes, primarily due to the benefits of the O D B B E.
We ended the year with over $1 billion in cash and a half turn of net leverage.
Speaker #1: of The adjusted EBITDA margin is be expected to between 31.1% and 31.6% , up 50 to 100 bips versus the year . This guidance includes approximately $40 million of revenue from the ends acquisition and an approximate 20% EBITDA margin The .
Turning to slide eight we highlight our disciplined approach to capital allocation over the last several years.
Scott A. Cottrill: Approximately 70% of total capital deployed from fiscal 2020 to 2026 was dedicated to growing the business through capital expenditures and strategic acquisitions. This reflects our conviction in the long-term demand outlook across our end markets and our confidence in the returns generated from expanding capacity, innovation, and new product development, as well as continued automation and productivity improvements. The benefit of our balanced approach to capital allocation, as well as our strong commercial execution over this period of time, is evident in the growth and profitability of the business we experienced. In fiscal 2019, we were a $1 billion revenue company with an Adjusted EBITDA margin in the mid-teens. Today, we're generating approximately $3 billion in revenue and operating at an Adjusted EBITDA margin north of 31%, which is top quartile in the industry.
Scott A. Cottrill: Approximately 70% of total capital deployed from fiscal 2020 to 2026 was dedicated to growing the business through capital expenditures and strategic acquisitions. This reflects our conviction in the long-term demand outlook across our end markets and our confidence in the returns generated from expanding capacity, innovation, and new product development, as well as continued automation and productivity improvements. The benefit of our balanced approach to capital allocation, as well as our strong commercial execution over this period of time, is evident in the growth and profitability of the business we experienced. In fiscal 2019, we were a $1 billion revenue company with an Adjusted EBITDA margin in the mid-teens. Today, we're generating approximately $3 billion in revenue and operating at an Adjusted EBITDA margin north of 31%, which is top quartile in the industry.
Proximately, 70% of total capital deployed from fiscal 2020 to 2026 was dedicated to growing the business through capital expenditures and strategic acquisitions.
This reflects our conviction in the long term demand outlook across our end markets and our confidence in the returns generated from expanding capacity innovation and new product development as well as continued automation and productivity improvements.
Speaker #1: fourth quarter is our most valuable quarter because of the impact construction weather on . Winter storm Fern and the weather . Most of the US has over the past great two weeks is a of this .
Scott Barber: We have included the anticipated impact of these storms in the updated guidance ranges we announced today. We remain focused on executing our long-term strategic plan to drive consistent long-term growth, margin expansion, and free cash flow generation. With that, I'll open the call for questions. Operator, please open the line.
Scott Cottrill: We have included the anticipated impact of these storms in the updated guidance ranges we announced today. We remain focused on executing our long-term strategic plan to drive consistent long-term growth, margin expansion, and free cash flow generation. With that, I'll open the call for questions. Operator, please open the line.
Speaker #1: We have example included the anticipated of these storms impact in the updated guidance ranges . We today . We focused on executing remain our long term strategic experienced adverse plan announced to drive consistent long term growth margin expansion and free cash flow generation .
The benefit of our balanced approach to capital allocation as well as our strong commercial execution over this period of time is evident in the growth and profitability of the business we experienced.
In fiscal 2019, we were on $1 billion revenue company with an adjusted EBITDA margin in the mid teens today, we're generating approximately $3 billion in revenue and operating and add in an adjusted EBITDA margin north of 31%, which is top quartile in the industry.
Speaker #1: that , I'll the call for With open Operator questions . . Please line .
Operator: We will now begin the question-and-answer session. Please limit yourself to one question and one follow-up. If you would like to ask a question, please press star one on your telephone keypad. To withdraw your question, press star one again. Please pick up your handset when asking a question, and if muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Our first question comes from the line of Matthew Bouley with Barclays. Your line is open. Please go ahead.
Operator: We will now begin the question-and-answer session. Please limit yourself to one question and one follow-up. If you would like to ask a question, please press star one on your telephone keypad. To withdraw your question, press star one again. Please pick up your handset when asking a question, and if muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Our first question comes from the line of Matthew Bouley with Barclays. Your line is open. Please go ahead.
Speaker #2: We begin will now the answer question and
Speaker #2: session . limit yourself to one
Speaker #2: question and one follow up . If you would of like to ask a question , please star one on your telephone press keypad .
Scott A. Cottrill: In addition, because of the strong cash generation profile of the business, we were able to fund the NDS acquisition this week, almost entirely with cash on hand. Post-closing, our leverage is now approximately 1.5 times and is well within our guardrails of 1 to 2 times. It is also worth mentioning, we expect to access the capital markets this year due to some near-term maturities. In addition, today, we announced a new $1 billion stock repurchase authorization, bringing the total authorization to $1.148 billion. This authorization gives us the flexibility to execute the program over time, while still prioritizing organic investment opportunities we see as the lowest risk and highest return use of capital, as well as strategic M&A. Finally, on slide 9. Based on our performance to date-
Scott A. Cottrill: In addition, because of the strong cash generation profile of the business, we were able to fund the NDS acquisition this week, almost entirely with cash on hand. Post-closing, our leverage is now approximately 1.5 times and is well within our guardrails of 1 to 2 times. It is also worth mentioning, we expect to access the capital markets this year due to some near-term maturities. In addition, today, we announced a new $1 billion stock repurchase authorization, bringing the total authorization to $1.148 billion. This authorization gives us the flexibility to execute the program over time, while still prioritizing organic investment opportunities we see as the lowest risk and highest return use of capital, as well as strategic M&A. Finally, on slide 9. Based on our performance to date-
In addition, because of the strong cash generation profile of the business, we were able to fund the NDS acquisition. This week almost entirely with cash on hand.
Speaker #2: To withdraw your question , press star one . open the up your handset when asking a question and if muted locally , please remember to unmute your , please pick device .
Speaker #2: Please stand by while we Again roster Q&A . Our first from the question comes line of Matthew Bouley with Barclays . Your line is open .
Post closing our leverage is now approximately one five times and is well within our guardrails of one to two times.
It is also worth mentioning we expect to access the capital markets. This year due to some near term maturities.
Matthew Bouley: Morning, everyone.
Scott Cottrill: Morning, everyone.
Scott Barber: Good morning, everyone. Thanks for taking the questions. So, just one on the non-residential side, because, you know, noticed you lowered your end market guide there. Correct me if I'm wrong, but it looks like you increased your overall revenue guidance by, seemingly more than just what NDS may be contributing. So my question is, is if that's kind of more of a mark to market on what's already happened in the first nine months of the year in non-residential, or are you seeing something in your orders and backlog? And obviously, you just mentioned the storms, regarding the fourth quarter, that perhaps may be a little bit more choppy in non-residential than what you previously thought. Thank you. All right. So Matt, Scott Barber, nice to hear you. Thank you for the question.
Matthew Bouley: Good morning, everyone. Thanks for taking the questions. So, just one on the non-residential side, because, you know, noticed you lowered your end market guide there. Correct me if I'm wrong, but it looks like you increased your overall revenue guidance by, seemingly more than just what NDS may be contributing. So my question is, is if that's kind of more of a mark to market on what's already happened in the first nine months of the year in non-residential, or are you seeing something in your orders and backlog? And obviously, you just mentioned the storms, regarding the fourth quarter, that perhaps may be a little bit more choppy in non-residential than what you previously thought. Thank you.
Speaker #2: ahead .
Speaker #3: Good morning everyone . Good
In addition, today, we announced a new $1 billion stock repurchase authorization, bringing the total authorization to $1.148 billion.
Speaker #3: Thanks morning . taking the . questions for So just here on the one on nonresidential side Please go you know because , noticed your you lowered end market guide .
This authorization gives us the flexibility to execute the program over time, while still prioritizing organic investment opportunities, we see as the lowest risk and highest return use of capital as well as strategic M&A.
Speaker #3: There and correct wrong , but it me if I'm you looks like increased your overall guidance by seemingly more than just ends may be So question is , is my if that's kind of mark to market on what's already happened in the first nine months of the year in non-residential .
Finally on slide nine.
Based on our performance to date current visibility backlog of existing orders and trends, we updated our fiscal 2026 guidance ranges today.
Speaker #3: Or are you seeing something in your orders and backlog ? And obviously you just mentioned the storms that perhaps may be a little bit more choppy in non-residential than what you previously Thank you thought .
Donald Scott Barbour: ... current visibility, backlog of existing orders, and trends, we updated our fiscal 2026 guidance ranges today. We increased our fiscal year 2026 revenue guidance to a midpoint of $3.015 billion and adjusted EBITDA to a midpoint of $945 million. The adjusted EBITDA margin is expected to be between 31.1% and 31.6%, up 50 to 100 bps versus the prior year. This guidance includes approximately $40 million of revenue from the NDS acquisition at an approximate 20% EBITDA margin. The fourth quarter is our most variable quarter because of the impact of weather on construction. Winter Storm Fern and the adverse weather most of the US has experienced over the past two weeks is a great example of this.
Scott A. Cottrill: ... current visibility, backlog of existing orders, and trends, we updated our fiscal 2026 guidance ranges today. We increased our fiscal year 2026 revenue guidance to a midpoint of $3.015 billion and adjusted EBITDA to a midpoint of $945 million. The adjusted EBITDA margin is expected to be between 31.1% and 31.6%, up 50 to 100 bps versus the prior year. This guidance includes approximately $40 million of revenue from the NDS acquisition at an approximate 20% EBITDA margin. The fourth quarter is our most variable quarter because of the impact of weather on construction. Winter Storm Fern and the adverse weather most of the US has experienced over the past two weeks is a great example of this.
Scott Barbour: All right. So Matt, Scott Barber, nice to hear you. Thank you for the question.
We increased our fiscal year 'twenty six revenue guidance to a midpoint of $3 <unk> 5 billion and adjusted EBITDA to a midpoint of $945 million.
Speaker #3: .
Speaker #1: All right . So Matt Scott Barber
Scott Barber: So a little bit to unpack in there. I think the, you know, the beat, the raise, we kind of gave you the beat, raised a little bit, then gave you the NDS. And I think the raise a little bit is reflective of good performance, particularly of our Allied Products, and the HP Pipe in the non-residential segment. As you know, we're really scaled in that with in our, in a lot of our product lines, and our go-to-market is tuned for that non-residential market. So we think we're gaining, you know, winning more than our fair share of the projects that are out there with good products, good pursuit. The storm that you mentioned, yeah, pretty darn disruptive, as you can imagine for us.
Speaker #1: you . Thank
Scott Barbour: So a little bit to unpack in there. I think the, you know, the beat, the raise, we kind of gave you the beat, raised a little bit, then gave you the NDS. And I think the raise a little bit is reflective of good performance, particularly of our Allied Products, and the HP Pipe in the non-residential segment. As you know, we're really scaled in that with in our, in a lot of our product lines, and our go-to-market is tuned for that non-residential market. So we think we're gaining, you know, winning more than our fair share of the projects that are out there with good products, good pursuit. The storm that you mentioned, yeah, pretty darn disruptive, as you can imagine for us.
Speaker #1: question . So a little bit to unpack in more of a there . I think the , you know , the the beat , the race of gave gave you the raised a little , we kind bit , then gave you the ends .
The adjusted EBITDA margin is expected to be between 31, 1% and 31, 6% up 50 to 100 bps versus the prior year.
Speaker #1: And I think the raise bit is reflective a little of performance , particularly of our allied products and the HP pipe non-residential segment , as you as you know , really we're scaled in regarding the that with in a lot of in our our product lines and our go to market tuned for that is market .
This guidance includes approximately $40 million of revenue from the NDS acquisition, and an approximate 20% EBITDA margin.
The fourth quarter is our most variable quarter because of the impact of weather on construction.
Speaker #1: So we think we're gaining , you know , winning more more than our more than our fair share of the projects that are out there with good , good products , good pursuit , the storm that you mentioned .
Winter Storm Byrne and the adverse weather most of the U S has experienced over the past two weeks is a great example of this we.
Donald Scott Barbour: We have included the anticipated impact of these storms in the updated guidance ranges we announced today. We remain focused on executing our long-term strategic plan to drive consistent long-term growth, margin expansion, and free cash flow generation. With that, I'll open the call for questions. Operator, please open the line.
Scott A. Cottrill: We have included the anticipated impact of these storms in the updated guidance ranges we announced today. We remain focused on executing our long-term strategic plan to drive consistent long-term growth, margin expansion, and free cash flow generation. With that, I'll open the call for questions. Operator, please open the line.
We have included the anticipated impact of these storms in the updated guidance ranges, we announced today.
Speaker #1: Yeah , pretty , pretty darn disruptive . As you can imagine for us . So as a result of that , we took some of that into account by widening our range , because this is a highly variable quarter for us .
Scott Barber: So as a result of that, we took some of that into account by widening our range, because this is a highly variable quarter for us, so we wanted to make sure that we gave ourselves enough room in the range. But make no mistake that that storm is gonna make this quarter a bit choppier, for everyone in kind of that segment. You don't dig a lot of holes and put pipe in it with these kind of temperatures, kind of in the Midwest and the North.
Scott Barbour: So as a result of that, we took some of that into account by widening our range, because this is a highly variable quarter for us, so we wanted to make sure that we gave ourselves enough room in the range. But make no mistake that that storm is gonna make this quarter a bit choppier, for everyone in kind of that segment. You don't dig a lot of holes and put pipe in it with these kind of temperatures, kind of in the Midwest and the North.
We remain focused on executing our long term strategic plan to drive consistent long term growth margin expansion and free cash flow generation.
Speaker #1: So we wanted to make sure that we gave ourselves enough room in the range . But make no make no mistake , that that storm is going to make quarter a bit choppier this for for everyone in in kind of that segment , you don't dig a lot of holes and put pipe in when it it's these kind temperatures , of kind of in the Midwest and the North .
With that I'll open the call for questions operator, Please open the line.
Yeah.
Operator: We will now begin the question-and-answer session. Please limit yourself to one question and one follow-up. If you would like to ask a question, please press star one on your telephone keypad. To withdraw your question, press star one again. Please pick up your handset when asking a question, and if muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Our first question comes from the line of Matthew Bouley with Barclays. Your line is open. Please go ahead.
Operator: We will now begin the question-and-answer session. Please limit yourself to one question and one follow-up. If you would like to ask a question, please press star one on your telephone keypad. To withdraw your question, press star one again. Please pick up your handset when asking a question, and if muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Our first question comes from the line of Matthew Bouley with Barclays. Your line is open. Please go ahead.
We will now begin the question and answer session. Please limit yourself to one question and one follow up if you would like to ask a question. Please press star one on your telephone keypad to withdraw your question Press Star one again.
Matthew Bouley: Okay. That, that's perfect. Yeah, great, great color. So then, you know, I got a second one. I mean, stepping back a little bit, as you alluded to, taking shares, a lot of new products in Allied. I mean, it sounds like it's contributing everywhere across Allied. Same thing in Infiltrator and, you know, expanding product lines. So, my question is, you know, now, now that you're kind of, I guess, you know, seasoning this, this new engineering center, and, and, you know, clearly a lot of these projects, products are getting to market quicker, what is the kind of future pipeline look like?
Matthew Bouley: Okay. That, that's perfect. Yeah, great, great color. So then, you know, I got a second one. I mean, stepping back a little bit, as you alluded to, taking shares, a lot of new products in Allied. I mean, it sounds like it's contributing everywhere across Allied. Same thing in Infiltrator and, you know, expanding product lines. So, my question is, you know, now, now that you're kind of, I guess, you know, seasoning this, this new engineering center, and, and, you know, clearly a lot of these projects, products are getting to market quicker, what is the kind of future pipeline look like?
Please pick up your handset when asking a question and if muted locally. Please remember to mute your device. Please standby, while we compile the Q&A roster.
Speaker #3: Okay , that's perfect . Yeah , great . Great color . So then , you know , I guess second one , I mean , stepping back a little bit , as alluded to you , taking shares products and a lot of new it sounds like allied I mean , it's contributing everywhere Allied .
Our first question comes from the line of Matthew Bouley with Barclays. Your line is open.
Speaker #3: thing Same in infiltrator and across expanding product lines . So my question is , is , you know , now that you're kind of I guess , you know , seasoning this , this new engineering center and , you know , clearly a lot of these projects , products are getting to market quicker the kind of future pipeline look .
Please go ahead good morning, everyone.
Matthew Adrien Bouley: Morning, everyone. Good morning, everyone.
Matthew Bouley: Morning, everyone. Good morning, everyone.
Good morning morning, Thanks for taking the questions.
Donald Scott Barbour: Morning.
D. Scott Barbour: Morning.
Matthew Adrien Bouley: Thanks for taking the questions. So just one on here on the non-residential side, because you know, noticed you, you lowered your end market guide there. Correct me if I'm wrong, but it looks like you increased your overall revenue guidance by seemingly more than just what NDS may be contributing. So my question is, is if that's kind of more of a mark to market on what's already happened in the first nine months of the year in non-residential, or are you seeing something in your orders and backlog? And obviously, you just mentioned the storms, regarding Q4, that perhaps may be a little bit more choppy in non-residential than what you previously thought. Thank you.
Matthew Bouley: Thanks for taking the questions. So just one on here on the non-residential side, because you know, noticed you, you lowered your end market guide there. Correct me if I'm wrong, but it looks like you increased your overall revenue guidance by seemingly more than just what NDS may be contributing. So my question is, is if that's kind of more of a mark to market on what's already happened in the first nine months of the year in non-residential, or are you seeing something in your orders and backlog? And obviously, you just mentioned the storms, regarding Q4, that perhaps may be a little bit more choppy in non-residential than what you previously thought. Thank you.
So just one on here on the nonresidential side, because you know noticed you lowered your end market guide there.
Matthew Bouley: So any sort of color on, you know, what that incremental contribution may be today from these new products, and then what are you kind of looking at around, you know, the next 12, 24 months around kind of additional products coming to market? Thank you.
Matthew Bouley: So any sort of color on, you know, what that incremental contribution may be today from these new products, and then what are you kind of looking at around, you know, the next 12, 24 months around kind of additional products coming to market? Thank you.
Speaker #3: like ? So any sort of color on What is what that incremental contribution may be today from these new then kind of looking what do you around 24 months around kind of additional products coming to market ?
If I'm wrong, but it looks like you increased your overall revenue guidance by a seemingly more than just what MBS maybe contributing. So my question is is if that's kind of more of a mark to market on what's already happened in the first nine months of the year in nonresidential or are you seeing something in your orders and backlog and obviously.
Scott Barber: Well, we're not gonna pre-- give you all the great stuff we're gonna talk about in June, today. But, I would tell you that, you know, the, I think what you-- the words you used are good. You know, we're seasoning and getting better in our pace of innovation, both Infiltrator, Craig's here with us today, and at ADS. And, you know, I would say right now, you know, when we look at just kind of results over the last quarter or 6 months, I mean, it's tens and tens of millions of dollars of revenue that these projects that we've just engineered in the last couple of years are contributing, which moves that needle, you know, to growth for these very challenging markets.
Scott Barbour: Well, we're not gonna pre-- give you all the great stuff we're gonna talk about in June, today. But, I would tell you that, you know, the, I think what you-- the words you used are good. You know, we're seasoning and getting better in our pace of innovation, both Infiltrator, Craig's here with us today, and at ADS. And, you know, I would say right now, you know, when we look at just kind of results over the last quarter or 6 months, I mean, it's tens and tens of millions of dollars of revenue that these projects that we've just engineered in the last couple of years are contributing, which moves that needle, you know, to growth for these very challenging markets.
Speaker #3: Thank you
Speaker #1: not going to give you all the great stuff . We're going to talk about in June . Today . But I would tell
Just mentioned the storms.
Speaker #1: that , you know , the I think you
Guarding the fourth quarter that perhaps maybe a little bit more choppy and nonresidential than what you previously thought.
Speaker #1: what you , the words you used are good . You know , we're seasoning . Well , we're and getting better in of Both innovation .
Yeah.
Donald Scott Barbour: All right. So Matt, Scott Barbour, nice to hear you. Thank you for the question. So a little bit to unpack in there. I think, you know, the beat, the raise, we kind of gave you the beat, raised a little bit, then gave you the NDS. And I think the raise a little bit is reflective of good performance, particularly of our Allied Products, and the HP pipes in the non-residential segment. As you know, we're really scaled in that with—in our, in a lot of our product lines, and our go-to-market is tuned for that non-residential market. So we think we're gaining, you know, winning more than our—more than our fair share of the projects that are out there with good products, good pursuit.
D. Scott Barbour: All right. So Matt, Scott Barbour, nice to hear you. Thank you for the question. So a little bit to unpack in there. I think, you know, the beat, the raise, we kind of gave you the beat, raised a little bit, then gave you the NDS. And I think the raise a little bit is reflective of good performance, particularly of our Allied Products, and the HP pipes in the non-residential segment. As you know, we're really scaled in that with—in our, in a lot of our product lines, and our go-to-market is tuned for that non-residential market. So we think we're gaining, you know, winning more than our—more than our fair share of the projects that are out there with good products, good pursuit.
Speaker #1: infiltrator with us today Craig Taylor at and ads and I would say you know , right now , you know , when we look at just kind of results over the last quarter or six months , I mean ,
Alright, So Matt Scott Barbour nice to hear you. Thank you for the question.
So a little bit to unpack in there I think the b. The raise we kind of gave you gave you to be raised a little bit then gave you the NDS and I think the raised a little bit is reflective of.
Speaker #1: it's tens and tens of our pace dollars of revenue at that these projects that we've just engineered in the last couple of years are , are contributing , products ?
Good performance.
Particularly of our allied products and the HP pipe in the non residential segment as you as you know, we're really scaled and that with and are in a lot of our product lines and our go to market is tuned for that nonresidential market. So we think were gaining you know winning more more than or more than our fair.
Speaker #1: that needle , you know , to to growth
Scott Barber: And that would be in the advanced treatment products that, that Craig has been launching in Infiltrator, the new tank products that he's launched, that we've invested capital in to do some new StormTech products, which are really exceeding expectations, and some new Nyloplast products. And then the water quality products, the new filtration, I mean, the new separator and the new biofiltration. When you add all that up, Matt, it, it's literally tens and tens and tens of millions of dollars that are being contributed right now. And we would see that accelerating as we, you know, get better at our pace of commercialization of those, of those new products.
Scott Barbour: And that would be in the advanced treatment products that, that Craig has been launching in Infiltrator, the new tank products that he's launched, that we've invested capital in to do some new StormTech products, which are really exceeding expectations, and some new Nyloplast products. And then the water quality products, the new filtration, I mean, the new separator and the new biofiltration. When you add all that up, Matt, it, it's literally tens and tens and tens of millions of dollars that are being contributed right now. And we would see that accelerating as we, you know, get better at our pace of commercialization of those, of those new products.
Speaker #1: for these very challenging And markets . And that would be in the active treatment products that that Craig has been launching . And infiltrator the new tank products that he's launched that we've invested to capital in do some new tech storm products , which are really exceeding expectations .
Our share of the projects that are out there with good good products. Good pursuit. The storm that you mentioned, yeah pretty pretty darn disruptive.
Speaker #1: And some new products then the . And water quality products , the new filtration , I mean , the new separator and the new biofiltration , when all that up .
Donald Scott Barbour: The storm that you mentioned, yeah, pretty darn disruptive, as you can imagine for us. So as a result of that, we took some of that into account by widening our range, because this is a highly variable quarter for us, so we wanted to make sure that we gave ourselves enough room in the range. But make no mistake that that storm is going to make this quarter a bit choppier, for everyone in kind of that segment. You don't dig a lot of holes and put pipe in it when it's these kind of temperatures, kind of in the Midwest and the North.
D. Scott Barbour: The storm that you mentioned, yeah, pretty darn disruptive, as you can imagine for us. So as a result of that, we took some of that into account by widening our range, because this is a highly variable quarter for us, so we wanted to make sure that we gave ourselves enough room in the range. But make no mistake that that storm is going to make this quarter a bit choppier, for everyone in kind of that segment. You don't dig a lot of holes and put pipe in it when it's these kind of temperatures, kind of in the Midwest and the North.
As you can imagine for us so as a result of that we took some of that into account by widening our range. Because this is a highly variable quarter for us so.
Speaker #1: Matt , it's tens and literally you add tens and tens of millions of that are dollars being contributed right now . And we would see that accelerating as we , you know , get better at our pace of commercialization , of of those new products .
So we wanted to make sure that we gave ourselves enough room in the range.
But make.
Make no mistake that storm is going to make this quarter a bit choppy or.
Matthew Bouley: Excellent. Well, perfect. Well, we'll certainly look forward to June. I'll see you guys there. Thank you, Scott, and good luck, guys.
Matthew Bouley: Excellent. Well, perfect. Well, we'll certainly look forward to June. I'll see you guys there. Thank you, Scott, and good luck, guys.
For for everyone and kind of that segment, you don't dig a lot of holes and put pipe in it with these.
Speaker #3: Excellent . Well , perfect . certainly look forward to June . I'll see you guys Well , we'll there . Thank you Scott and good luck guys .
Scott Barber: Thanks!
Scott Barbour: Thanks!
These kind of temperatures.
Speaker #1: Thanks .
Operator: Our next question comes from John Lovallo with UBS. Your line is open. Please go ahead.
Operator: Our next question comes from John Lovallo with UBS. Your line is open. Please go ahead.
And in the Midwest and the north.
Speaker #2: Our next question from comes John Lovallo with UBS . Your line is open . Please go ahead .
Matthew Adrien Bouley: Okay. That, that's perfect. Yeah, great, great color. So then, you know, I guess second one, I mean, stepping back a little bit, as you alluded to, taking shares, a lot of new products and Allied, I mean, it sounds like it's contributing everywhere across Allied. Same thing in Infiltrator and, you know, expanding product lines. So, my question is, you know, now, now that you're kind of, I guess, you know, seasoning this, this new engineering center, and, and, you know, clearly a lot of these projects, products are getting to market quicker, what, what is the kind of future pipeline look like?
Matthew Bouley: Okay. That, that's perfect. Yeah, great, great color. So then, you know, I guess second one, I mean, stepping back a little bit, as you alluded to, taking shares, a lot of new products and Allied, I mean, it sounds like it's contributing everywhere across Allied. Same thing in Infiltrator and, you know, expanding product lines. So, my question is, you know, now, now that you're kind of, I guess, you know, seasoning this, this new engineering center, and, and, you know, clearly a lot of these projects, products are getting to market quicker, what, what is the kind of future pipeline look like?
Okay, that's perfect yeah, great great color.
John Lovallo: Good morning, guys. Thanks for taking my questions as well. The first one is, you know, will NDS be broken out as a separate segment, or will, will it flow through the current segments? And, you know, what is the cadence of that $25 million of annual cost synergies, that we should expect?
John Lovallo: Good morning, guys. Thanks for taking my questions as well. The first one is, you know, will NDS be broken out as a separate segment, or will, will it flow through the current segments? And, you know, what is the cadence of that $25 million of annual cost synergies, that we should expect?
And then yeah.
I got the second one I mean stepping back a little bit as you alluded to taking shares a lot of new products and Allied I mean, it sounds like it's contributing everywhere across allied.
Speaker #4: Good morning guys . Thanks for taking my questions as well . The first one is will not be broken out as a separate segment .
Speaker #4: Or will it flow through the current . And segments what is the cadence of that 25 million of annual cost synergies that we should expect ?
Same thing in infiltrator and expanding product lines. So.
Scott Cottrill: Hey, John, Scott Cottrell here. So it'll be part of the, Allied and, and, and Other segment. So that's where we'll have it right now, and that's where we'll put it. The $25 million of cost run rate synergies by year three, year one will be more of kind of the investments and, beginning of the integration activity, and then you'll see it kind of ramp, between year and-- year two and year three.
Scott Cottrill: Hey, John, Scott Cottrell here. So it'll be part of the, Allied and, and, and Other segment. So that's where we'll have it right now, and that's where we'll put it. The $25 million of cost run rate synergies by year three, year one will be more of kind of the investments and, beginning of the integration activity, and then you'll see it kind of ramp, between year and-- year two and year three.
My question is as you know now now that you're kind of Ah I guess.
Speaker #1: John Hey , Scott Cottrill here . So it'll be part of the Allied and other segment . So that's where we'll have it right now .
Seasoning, New Engineering center in and clearly a lot of these projects products are getting to market quicker.
Speaker #1: And that's where we'll put it . The 25 million of cost run synergies by rate year , three , year one will be more of kind of the investment and beginning of the integration activity .
What is the kind of future pipeline look like so any sort of color on.
Matthew Adrien Bouley: So any sort of color on, you know, what that incremental contribution may be today from these new products, and then what are you kind of looking at around, you know, the next 12, 24 months around kind of additional products coming to market? Thank you.
Matthew Bouley: So any sort of color on, you know, what that incremental contribution may be today from these new products, and then what are you kind of looking at around, you know, the next 12, 24 months around kind of additional products coming to market? Thank you.
What that incremental contribution maybe today when the new products and then what are you kind of looking at around you know the next 12 to 24 months around kind of additional products coming to market. Thank you.
Speaker #1: And then you'll see it kind of ramp up between year and year two and year three . And we'll talk about that in June .
Scott Barber: We'll talk about that in June. We'll talk about that in June.
Scott Cottrill: We'll talk about that in June. We'll talk about that in June.
John Lovallo: Okay.
John Lovallo: Okay.
Donald Scott Barbour: Well, we're not going to give you all the great stuff we're going to talk about in June today, but I would tell you that, you know, I think what the words you used are good. You know, we're seasoning and getting better in our pace of innovation, both Infiltrator, Craig's here with us today, and at ADS. And you know, I would say right now, you know, when we look at just kind of results over the last quarter or six months, I mean, it's tens and tens of millions of dollars of revenue that these projects that we've just engineered in the last couple of years are contributing, which moves that needle, you know, to growth for these very challenging markets.
D. Scott Barbour: Well, we're not going to give you all the great stuff we're going to talk about in June today, but I would tell you that, you know, I think what the words you used are good. You know, we're seasoning and getting better in our pace of innovation, both Infiltrator, Craig's here with us today, and at ADS. And you know, I would say right now, you know, when we look at just kind of results over the last quarter or six months, I mean, it's tens and tens of millions of dollars of revenue that these projects that we've just engineered in the last couple of years are contributing, which moves that needle, you know, to growth for these very challenging markets.
Scott Barber: We're on the right.
Scott Barbour: We're on the right.
Well, we're not going to.
John Lovallo: Okay. No, understood. And then it looks like you guys raised the CapEx outlook by about $40 million at the midpoint. Is this Lake Wales related, or is, you know, something else driving this?
John Lovallo: Okay. No, understood. And then it looks like you guys raised the CapEx outlook by about $40 million at the midpoint. Is this Lake Wales related, or is, you know, something else driving this?
Speaker #1: We'll talk about that . okay .
Give you all the great stuff, we're going to talk about in June.
Speaker #4: No Okay . . Understood . And then it looks like you guys raised the CapEx outlook by about 40 million at the midpoint .
But I would tell you that.
I think what you. The words you used your good seasoning and getting better in our pace of innovation, both infiltrator Craig's here with us today and at a D S and.
Speaker #4: Is this Lake Wales related or , you know , something else driving this ?
Scott Cottrill: No, not, not Lake Wales at all. We're constantly moving and optimizing things within the network for sure, but this is just the timing of when the CapEx spend and assets are being put in service. So timing.
Scott Cottrill: No, not, not Lake Wales at all. We're constantly moving and optimizing things within the network for sure, but this is just the timing of when the CapEx spend and assets are being put in service. So timing.
Speaker #1: No , not not Lake Wales at all . We're constantly moving and optimizing things within the network , for sure . But this is just the timing of when the CapEx spend and assets are service .
I would say right now when we look at just kind of results over the last quarter or six months I mean, it's tens and tens of millions of dollars.
Scott Barber: Yeah, I would say timing in our... This is Scott B, John, just our continued belief, when we can pull those things in and get the impact sooner, you know we're gonna do it.
Scott Barbour: Yeah.
Scott Cottrill: I would say timing in our... This is Scott B, John, just our continued belief, when we can pull those things in and get the impact sooner, you know we're gonna do it.
Speaker #1: being put in So timing . Yeah , I would say timing in our in our and and this is Scott B John just our our belief when we can pull those things in and get the impact sooner .
Of revenue.
These projects.
We've just engineered in the last couple of years are are contributing which move that needle you know to growth for these very challenging markets and that would be in the active treatment.
Scott Cottrill: Yeah, the bonus depreciation really helps with those requirements as well.
Scott Cottrill: Yeah, the bonus depreciation really helps with those requirements as well.
Speaker #1: You know we're going to do it . Yeah . The bonus requirements . had our eye on really helps with those we So we on on that as well .
Scott Barber: Yeah. We had our eye on that as well.
Scott Barbour: Yeah.
Scott Cottrill: We had our eye on that as well.
Donald Scott Barbour: And that would be in the active treatment products that Craig's been launching in Infiltrator, the new tank products that he's launched, that we've invested capital in to do some new StormTech products, which are really exceeding expectations, and some new Nyloplast products... and then the water quality products, the new filtration, I mean, the new Separator and the new Biofiltration. When you add all that up, Matt, it literally $ tens and tens and tens of millions that are being contributed right now. And we would see that accelerating as we, you know, get better at our pace of commercialization of those new products.
D. Scott Barbour: And that would be in the active treatment products that Craig's been launching in Infiltrator, the new tank products that he's launched, that we've invested capital in to do some new StormTech products, which are really exceeding expectations, and some new Nyloplast products... and then the water quality products, the new filtration, I mean, the new Separator and the new Biofiltration. When you add all that up, Matt, it literally $ tens and tens and tens of millions that are being contributed right now. And we would see that accelerating as we, you know, get better at our pace of commercialization of those new products.
John Lovallo: Understood. Thank you, guys.
John Lovallo: Understood. Thank you, guys.
Scott Cottrill: Yeah.
Scott Cottrill: Yeah.
Speaker #4: Understood . Thank you .
Alex the Craig's been watching and infiltrator are the new tank products that he's launch that we've invested capital in to do.
Operator: Our next question comes from Brian Blair with Oppenheimer. Your line is open. Please go ahead.
Operator: Our next question comes from Brian Blair with Oppenheimer. Your line is open. Please go ahead.
Speaker #5: Yeah
Speaker #5: .
Speaker #2: Our guys next question comes from Brian Blair with Oppenheimer . Your line is open . Please go ahead .
Some new storm tech products, which are really exceeding expectations and some new naval class products.
Speaker #4: Thank you . Good morning everyone . Solid quarter .
Scott Barber: Good morning.
Scott Barbour: Good morning.
Bryan Blair: Morning. Having owned Orenco for a bit over a year now, maybe offer a little more color on integration saving and the progression of, of the deal model, where margins are now, and if there's been any change to the 1,000 basis point expansion target that your team had laid out. I'm sure we'll get more detail on this in June, but the highlights would be, would be great.
And then the water quality products, the new filtration I mean, the new separate or the new bio filtration when you add all that up Matt.
Bryan Blair: Morning. Having owned Orenco for a bit over a year now, maybe offer a little more color on integration saving and the progression of, of the deal model, where margins are now, and if there's been any change to the 1,000 basis point expansion target that your team had laid out. I'm sure we'll get more detail on this in June, but the highlights would be, would be great.
Speaker #5: Good morning . Having owned .
Speaker #4: Morning .
Speaker #6: Having owned for a bit over a year now . Maybe offer a little more color on integration phasing , progression of the deal model where margins are now .
Literally tens and tens and tens of millions of dollars that are being contributed right now.
Speaker #6: And if there's been any change to the thousand basis point expansion target that that your team out . had laid I'm sure we'll get more detail on this in June , but the highlights would be would be great .
And we would see that accelerating as we get better.
At our pace of commercialization.
Craig Taylor: Good morning, Brian, this is Craig. The acquisition of Orenco is going well, with the integration of the team members into Infiltrator. We've really combined the commercial side of the business right now with the Infiltrator side, and the teams are coming together. There's a lot of projects that are out in the market right now we're quoting on and working towards, both the Infiltrator product and the Orenco product are being offered up, and that's helping towards the growth of the business as we move forward. From a margin standpoint, it's what we were planning. There's some synergies that we've laid out. We're working towards those synergies. Those synergies are doing well, actually exceeding a little bit of our expectations.
Craig Taylor: Good morning, Brian, this is Craig. The acquisition of Orenco is going well, with the integration of the team members into Infiltrator. We've really combined the commercial side of the business right now with the Infiltrator side, and the teams are coming together. There's a lot of projects that are out in the market right now we're quoting on and working towards, both the Infiltrator product and the Orenco product are being offered up, and that's helping towards the growth of the business as we move forward. From a margin standpoint, it's what we were planning. There's some synergies that we've laid out. We're working towards those synergies. Those synergies are doing well, actually exceeding a little bit of our expectations.
Yeah.
Speaker #7: Good morning Brian , this is Craig , the acquisition of Renco is going well the team of the integration into with infiltrator . We've really combined the commercial side of the business right now with the infrastructure infiltrator side , and the teams are together coming lot of projects that are out in the market right now .
Of the of those new products.
[Company Representative] (Advanced Drainage Systems): Excellent. Well, perfect. Well, we'll certainly look forward to June. I'll, I'll see you guys there. Thank you, Scott, and good luck, guys.
Matthew Bouley: Excellent. Well, perfect. Well, we'll certainly look forward to June. I'll, I'll see you guys there. Thank you, Scott, and good luck, guys.
Excellent well perfect well, well certainly look forward to June.
See you guys. There. Thank you Scott and good luck guys.
Donald Scott Barbour: Thanks.
D. Scott Barbour: Thanks.
Thanks.
Operator: Our next question comes from John Lavallo with UBS. Your line is open. Please go ahead.
Operator: Our next question comes from John Lavallo with UBS. Your line is open. Please go ahead.
Our next question comes from from.
John Lovallo with UBS. Your line is open. Please go ahead.
Speaker #7: We're quoting on and working both towards the infiltrator product and the wrinkle product are being offered up , and that's helping towards the growth of the business .
Okay.
John Lovallo: Good morning, guys. Thanks for taking my questions as well. The first one is, you know, will NDS be broken out as a separate segment, or will it flow through the current segments? And, you know, what is the cadence of that $25 million of annual cost synergies that we should expect?
John Lovallo: Good morning, guys. Thanks for taking my questions as well. The first one is, you know, will NDS be broken out as a separate segment, or will it flow through the current segments? And, you know, what is the cadence of that $25 million of annual cost synergies that we should expect?
Good morning, guys. Thanks for taking my questions as well.
The first one as well and you have to be broken out as a separate segment or will it flow through the current segments and what is the cadence of that $25 million of annual cost synergies that we should expect.
Speaker #7: As forward from a margin standpoint , it's were planning . There's some synergies that we've laid out . We're working towards those synergies .
Speaker #7: Those synergies are doing well . It's actually exceeding a little bit of our expectations ahead of plan , ahead of the plan right now and working on that margin improvement that you had mentioned 1000 basis points .
Scott Barber: Ahead of plan.
Scott Barbour: Ahead of plan.
Craig Taylor: Ahead of the plan right now, and working on that margin improvement that you had mentioned, 1,000 basis points. So acquisition's going well, the integration of the team members, the growth expectations, and the synergies.
Craig Taylor: Ahead of the plan right now, and working on that margin improvement that you had mentioned, 1,000 basis points. So acquisition's going well, the integration of the team members, the growth expectations, and the synergies.
Donald Scott Barbour: Hey, John, Scott Cottrill here. So it'll be part of the Allied and other segment. So that's where we'll have it right now, and that's where we'll put it. The $25 million of cost run rate synergies by year three. Year one will be more of kind of the investments and the beginning of the integration activity, and then you'll see it kind of ramp between year two and year three. We'll talk about that in June. We'll talk about that.
D. Scott Barbour: Hey, John, Scott Cottrill here. So it'll be part of the Allied and other segment. So that's where we'll have it right now, and that's where we'll put it. The $25 million of cost run rate synergies by year three. Year one will be more of kind of the investments and the beginning of the integration activity, and then you'll see it kind of ramp between year two and year three. We'll talk about that in June. We'll talk about that.
Hey, John It's Scott Cottrill here, so it'll be part of the allied than in other segments. So that's where we will have it right now.
And that's where we'll put it the 25 million of cost run rate synergies by year three a year, one will be more of kind of the investments and the beginning of the integration activity and then youll see it kind of ramp.
Speaker #7: So acquisitions going well . The integration of the team members , the growth expectations in the synergies .
Scott Barber: I would add, the safety performance has been really good.
Scott Barbour: I would add, the safety performance has been really good.
Craig Taylor: Yeah. An 80% reduction in our TRIR, which is our recordable incident rates, since we've acquired the company.
Craig Taylor: Yeah. An 80% reduction in our TRIR, which is our recordable incident rates, since we've acquired the company.
Speaker #1: And I would add the safety performance has been really good .
Speaker #7: Yeah , an 80% reduction in our trigger , which is our recordable incident since we've acquired rates company .
Scott Barber: Which is outstanding. This is Scott, Scott Barber. The outstanding safety performance, which was a very early, early focus of Craig and his team out there. We're very excited that it's ahead of plan, on the surgery plan and the, the profitability piece. But boy, the team there at Orenco grabbed our safety program and, and implemented things quickly with a lot of support from the Infiltrator folks. And Craig has done a great job of kind of cycling his senior managers out there through it. And, we will follow very similar playbooks as we have with Infiltrator, Orenco, as we move into this phase with NDS. And, I'll be out there next week. Looking forward to being out there.
Scott Barbour: Which is outstanding. This is Scott, Scott Barber. The outstanding safety performance, which was a very early, early focus of Craig and his team out there. We're very excited that it's ahead of plan, on the surgery plan and the, the profitability piece. But boy, the team there at Orenco grabbed our safety program and, and implemented things quickly with a lot of support from the Infiltrator folks. And Craig has done a great job of kind of cycling his senior managers out there through it. And, we will follow very similar playbooks as we have with Infiltrator, Orenco, as we move into this phase with NDS. And, I'll be out there next week. Looking forward to being out there.
Zero year, two and year three.
Speaker #7: the Which
Speaker #1: is outstanding performance . This is Scott Scott Barbour , the outstanding safety performance , which was a very early , early focus of Craig and his team out there .
And we'll talk about that in June.
We'll talk about that okay.
John Lovallo: Okay.
John Lovallo: Okay.
Donald Scott Barbour: We're on the right.
D. Scott Barbour: We're on the right.
John Lovallo: Okay. No, understood. And then it looks like you guys raised the CapEx outlook by about $40 million at the midpoint. Is this Lake Wales related, or, you know, something else driving this?
John Lovallo: Okay. No, understood. And then it looks like you guys raised the CapEx outlook by about $40 million at the midpoint. Is this Lake Wales related, or, you know, something else driving this?
Okay.
Understood and then it looks like you guys raised the capex outlook by about $40 billion at the midpoint.
Speaker #1: And we're very excited that it's ahead of plan . On the synergy plan and the profitability piece . But boy , the team , there to grabbed our safety program and implemented things quickly with a lot of support from the infiltrator folks .
Is this lake Wales related hours.
Something else driving this.
Donald Scott Barbour: No, not Lake Wales at all. We're constantly moving and optimizing things within the network for sure. But this is just the timing of when the CapEx spend and assets are being put in service. So timing. Yeah. I would say timing in our... And this is Scott B, John, just our continued belief when we can pull those things in and get the impact sooner, you know, we're gonna do it. Yeah, the bonus depreciation really helps with those requirements as well. Yeah, we had our eye on that as well.
D. Scott Barbour: No, not Lake Wales at all. We're constantly moving and optimizing things within the network for sure. But this is just the timing of when the CapEx spend and assets are being put in service. So timing. Yeah. I would say timing in our... And this is Scott B, John, just our continued belief when we can pull those things in and get the impact sooner, you know, we're gonna do it. Yeah, the bonus depreciation really helps with those requirements as well. Yeah, we had our eye on that as well.
No not not like wells at all where we're constantly moving and optimizing things within the network for sure but.
But this is just the timing of when the Capex spend and our assets are being put in service so timing I.
Speaker #1: Craig has done a great job of kind of cycling his managers out senior there through it and we will follow very similar playbooks as we Infiltrator or have with Renco as we move into this phase of the NDS I'll be out there .
I would say timing in our in our bid.
This is Scott B, John just our continued belief when we can pull those things in and get the impact sooner, we're going to do it yes, the bonus depreciation really helps with those yeah. So.
Speaker #1: next week And forward to looking being out there .
Bryan Blair: Okay. That's all, all great to hear. And, curious if you could speak to infrastructure project visibility. You know, the-- your team has faced, you know, pretty difficult comps, at least on the trailing basis, and there are some administrative uncertainties that impacted project flow, specifically IIJA-funded projects there. Seems like within the transportation verticals, where you have meaningful exposure, the, the pipeline is, is resetting. There's more optimism looking through calendar 2026, even into 2027. Wondering if that's showing up in, in what your team tracks on, on a pipeline basis?
Bryan Blair: Okay. That's all, all great to hear. And, curious if you could speak to infrastructure project visibility. You know, the-- your team has faced, you know, pretty difficult comps, at least on the trailing basis, and there are some administrative uncertainties that impacted project flow, specifically IIJA-funded projects there. Seems like within the transportation verticals, where you have meaningful exposure, the, the pipeline is, is resetting. There's more optimism looking through calendar 2026, even into 2027. Wondering if that's showing up in, in what your team tracks on, on a pipeline basis?
So we were we had our eye on on on that as well.
Speaker #4: Okay , that's all .
Speaker #6: Great to hear and curious if you could speak to Infrastructure Project . You know , the your visibility team has faced , you know , pretty basis .
John Lovallo: Understood. Thank you, guys.
John Lovallo: Understood. Thank you, guys.
Understood. Thank you guys.
Donald Scott Barbour: Yeah.
D. Scott Barbour: Yeah.
Yeah.
Operator: Our next question comes from Brian Blair with Oppenheimer. Your line is open. Please go ahead.
Operator: Our next question comes from Brian Blair with Oppenheimer. Your line is open. Please go ahead.
Our next question comes from Bryan Blair with Oppenheimer. Your line is open. Please go ahead.
Speaker #6: comps uncertainties that difficult trailing there are some And administrative on the IJA funded projects . There seems within like the transportation verticals , where you meaningful exposure , have the pipeline is resetting .
Bryan Francis Blair: Thank you. Morning, everyone. Solid quarter.
Bryan Francis Blair: Morning. Having owned Orenco for a bit over a year now, maybe offer a little more color on integration phasing and the progression of the deal model, where margins are now, and if there's been any change to the thousand basis point expansion target that your team had laid out. I'm sure we'll get more detail on this in June, but the highlights would be great.
Good morning, having owned.
Bryan Blair: Morning. Having owned Orenco for a bit over a year now, maybe offer a little more color on integration phasing and the progression of the deal model, where margins are now, and if there's been any change to the thousand basis point expansion target that your team had laid out. I'm sure we'll get more detail on this in June, but the highlights would be great.
Having onto ranker for a bit over a year now.
Maybe offer a little more color on it.
Our integration savings and the progression of the deal model where margins are down.
Speaker #6: There's more looking optimism through 26 even into 27 , wondering if that's showing up in what your team tracks on a pipeline basis .
Theres been any change to the 1000 basis point expansion targets.
And your team have laid out and I'm sure we'll get more detail on this in June but the.
Scott Barber: Scott Barber again. I would say the things we track and look at for infrastructure, the activity is better from a quoting perspective. And the visibility continues to get better on that. That said, you know, it's choppy. Our win rate needs to be better in that segment. It's not like we're not finding and seeing and looking for things. We're just frankly, it's competitive. Some things that have kind of moved through from, you know, that we've already kind of had ordered and sold over the past year that made some of our comps difficult versus prior year, were places where we had very high participation, particularly around some of our Allied Products, like airports and rail, and things like that.
Scott Barbour: Scott Barber again. I would say the things we track and look at for infrastructure, the activity is better from a quoting perspective. And the visibility continues to get better on that. That said, you know, it's choppy. Our win rate needs to be better in that segment. It's not like we're not finding and seeing and looking for things. We're just frankly, it's competitive. Some things that have kind of moved through from, you know, that we've already kind of had ordered and sold over the past year that made some of our comps difficult versus prior year, were places where we had very high participation, particularly around some of our Allied Products, like airports and rail, and things like that.
Speaker #1: Scott Barbour again , I would say the things we track and look at for infrastructure , the activity is better from a perspective and the visibility continues to get better on that .
Highlights would be would be great.
[Company Representative] (Advanced Drainage Systems): Good morning, Brian. This is Craig. The acquisition of Orenco is going well, with the integration of the team members into Infiltrator. We've really combined the commercial side of the business right now with the Infiltrator side, and the teams are coming together. There's a lot of projects that are out in the market right now we're quoting on and working towards. Both the Infiltrator product and the Orenco product are being offered up, and that's helping towards the growth of the business as we move forward. From a margin standpoint, it's what we were planning. There's some synergies that we've laid out. We're working towards those synergies. Those synergies are doing well, actually exceeding a little bit of our expectations-
[Company Representative] (Advanced Drainage Systems): Good morning, Brian. This is Craig. The acquisition of Orenco is going well, with the integration of the team members into Infiltrator. We've really combined the commercial side of the business right now with the Infiltrator side, and the teams are coming together. There's a lot of projects that are out in the market right now we're quoting on and working towards. Both the Infiltrator product and the Orenco product are being offered up, and that's helping towards the growth of the business as we move forward. From a margin standpoint, it's what we were planning. There's some synergies that we've laid out. We're working towards those synergies. Those synergies are doing well, actually exceeding a little bit of our expectations-
Good morning, Brian This is Craig.
The acquisition of wrinkles going well with the integration of the team members into infiltrator.
We've really combine the commercial side of the business right now with the infiltrator infiltrator side.
Speaker #1: That said , you know , it's choppy . Our win rate needs to be better that segment . It's not like not we're finding and seeing and looking for things .
And the teams are coming together.
Theres a lot of projects that are out in the market right now, we're quoting on and working towards.
Both the infiltrator product and their wrinkled product are being offered up and that's helping towards the growth of the business as we move forward.
Speaker #1: We're just frankly , it's competitive kind of moved . Some through from , you know , that we've already had ordered and kind of over the past some of our year that made comps difficult prior year .
From a margin standpoint, it's what we were planning there are some synergies that we've laid out we're working towards those synergies the synergies are doing well.
Speaker #1: Were places where we had very high participation , particularly around some of our allied products , like airports and rail and things like that .
Actually exceeding a little bit of our expectations ahead of the plan right now and working on that margin improvement.
Donald Scott Barbour: Ahead of plan.
D. Scott Barbour: Ahead of plan.
[Company Representative] (Advanced Drainage Systems): -ahead of the plan right now, and working on that margin improvement that you had mentioned, 1,000 basis points. So acquisition is going well, the integration of the team members, the growth expectations, and the synergies.
[Company Representative] (Advanced Drainage Systems): -ahead of the plan right now, and working on that margin improvement that you had mentioned, 1,000 basis points. So acquisition is going well, the integration of the team members, the growth expectations, and the synergies.
Scott Barber: But when we get into the road and highway, we're good in some states, we're not good in some states, and that has hurt our participation there. That said, you know, we're we have visibility, we're in there pitching, and actually, our orders are slightly better right now in that category than they were. So we will remain pretty focused on gaining share there.
Scott Barbour: But when we get into the road and highway, we're good in some states, we're not good in some states, and that has hurt our participation there. That said, you know, we're we have visibility, we're in there pitching, and actually, our orders are slightly better right now in that category than they were. So we will remain pretty focused on gaining share there.
Speaker #1: But when we get into the road and highway , we're good . In some states , we're not good in some states . And hurt our participation .
You had mentioned the 1000 basis points.
So acquisitions going well the integration of the team members are the growth expectations in the synergies and I would add the safety performance has been really good.
Speaker #1: There . That said , you we're we're know , we have visibility . We're in pitching there and the actually order orders are better right now in slightly that category than they were .
Donald Scott Barbour: I would add, the safety performance has been really good.
D. Scott Barbour: I would add, the safety performance has been really good.
[Company Representative] (Advanced Drainage Systems): Yeah. An 80% reduction in our TRIR, which is our recordable incident rate, since we've acquired the company.
[Company Representative] (Advanced Drainage Systems): Yeah. An 80% reduction in our TRIR, which is our recordable incident rate, since we've acquired the company.
But an 80% reduction in our <unk>, which is our recordable incident rates.
Since we've acquired the company, which is outstanding performance as Scott Scott.
Donald Scott Barbour: Which is outstanding performance. This is Scott, Scott Barbour. The outstanding safety performance, which was a very early focus of Craig and his team out there. And we're very excited that it's ahead of plan, on the synergy plan and the profitability piece. But boy, the team there at Orenco grabbed our safety program and implemented things quickly with a lot of support from the Infiltrator folks. And Craig has done a great job of kind of cycling his senior managers out there through it. And we will follow very similar playbooks as we have with Infiltrator, Orenco, as we move into this phase with NDS. And I'll be out there next week. Looking forward to being out there.
D. Scott Barbour: Which is outstanding performance. This is Scott, Scott Barbour. The outstanding safety performance, which was a very early focus of Craig and his team out there. And we're very excited that it's ahead of plan, on the synergy plan and the profitability piece. But boy, the team there at Orenco grabbed our safety program and implemented things quickly with a lot of support from the Infiltrator folks. And Craig has done a great job of kind of cycling his senior managers out there through it. And we will follow very similar playbooks as we have with Infiltrator, Orenco, as we move into this phase with NDS. And I'll be out there next week. Looking forward to being out there.
Speaker #1: So we're we will remain pretty focused on gaining share there .
Scott Barbara Outstanding Safety performance, which was a very early early focus of Craig and his team out there and we're very excited that it's ahead of plan.
David Tarantino: Okay, understood. Thank you again.
Bryan Blair: Okay, understood. Thank you again.
Scott Barber: You know, yeah, I forgot, you know, you kind of. I think you maybe alluded to it in the question, was that the government shutdown probably didn't help. You know, through those 38 or 40 days of the government shutdown, we did see some friction created, particularly in that kind of work and some other type of work, through where there was just no one there to release an order or take a delivery, to tell you the truth.
Scott Barbour: You know, yeah, I forgot, you know, you kind of. I think you maybe alluded to it in the question, was that the government shutdown probably didn't help. You know, through those 38 or 40 days of the government shutdown, we did see some friction created, particularly in that kind of work and some other type of work, through where there was just no one there to release an order or take a delivery, to tell you the truth.
Speaker #4: Okay .
Speaker #6: Understood . Thank again .
Speaker #1: You know , I you kind forgot you know , of I think you maybe alluded you to it in the question was that government help .
On the synergy plan and the profitability piece.
Speaker #1: didn't probably shut down know , through government shutdown , 38 or 40 days of the we those did see some friction created , particularly in that kind of work .
Boy the team there to rinko grabbed.
Grabbed our safety program.
Implemented things quickly with a lot of support from the infiltrator folks.
Speaker #1: And some type of work other through where there was just no one there to release an order or take a take a delivery .
And Craig has done a great job of kind of cycling as senior managers out there through it and we will follow very similar playbooks as we have with infiltrator rinko as we move into this space with NDS.
Speaker #1: To tell you truth the .
David Tarantino: Yep, understood. Thanks, guys.
Bryan Blair: Yep, understood. Thanks, guys.
Speaker #5: .
Speaker #6: Thanks .
Speaker #5: Guys Understood .
Operator: Our next question comes from Garrick Schmoy of Loop Capital Markets. Your line is open. Please go ahead.
Operator: Our next question comes from Garrick Schmoy of Loop Capital Markets. Your line is open. Please go ahead.
I'll be out there next week and looking forward to being out there.
Speaker #2: Our next question from Garik Shmois of Loop Capital Your line is open . Please go ahead .
Bryan Francis Blair: Okay. That's all, all great to hear. And, curious if you could speak to infrastructure project visibility. You know, the-- your team has faced, you know, pretty difficult comps, at least on, you know, trailing basis, and there are some administrative uncertainties that impacted project flow, specifically IJA-funded projects there. Seems like within the transportation verticals, where you have meaningful exposure, the, the pipeline is, is resetting. There's more optimism looking through calendar 2026, even into 2027. Wondering if that's showing up in, in what your team tracks on, on a pipeline basis.
Bryan Blair: Okay. That's all, all great to hear. And, curious if you could speak to infrastructure project visibility. You know, the-- your team has faced, you know, pretty difficult comps, at least on, you know, trailing basis, and there are some administrative uncertainties that impacted project flow, specifically IJA-funded projects there. Seems like within the transportation verticals, where you have meaningful exposure, the, the pipeline is, is resetting. There's more optimism looking through calendar 2026, even into 2027. Wondering if that's showing up in, in what your team tracks on, on a pipeline basis.
Okay, that's great to hear.
Garik Shmois: Well, hi. Thanks. Good morning. Just on non-residential, just wondering if you can go into a little bit more detail on what led to the reduction in the end market guidance. Is there anything that you're seeing specific to any regions or any categories that is leading to the move to down low to mid single-digit declines?
Garik Shmois: Well, hi. Thanks. Good morning. Just on non-residential, just wondering if you can go into a little bit more detail on what led to the reduction in the end market guidance. Is there anything that you're seeing specific to any regions or any categories that is leading to the move to down low to mid single-digit declines?
And then curious if you could speak to infrastructure projects visibility.
Speaker #8: Hi . Markets . Thanks . Good morning .
Speaker #5: Just on non-residential . Just go into a little bit more wondering if you can detail on led to the reduction in the market Is there anything that you're you're seeing specific guidance .
The team has faced.
Pretty difficult comps really some trailing basis and there are some administrative uncertainties that impact it.
Project flow.
Specifically on JA funded them.
Speaker #5: to any regions or any that is categories leading to digit down to the declines single low to mid
Projects, there seems like within the.
The transportation verticals, where you have meaningful exposure to the pipeline is.
Michael Higgins: Hey, Garrick, Mike Higgins. I think Matt made the comment in his question about that, a kind of mark to market. And that's. I would kind of agree with that. You know, that's just more of an update. You know, hey, we're through nine months of the year. We have a pretty good idea of what it's gonna look like. And so, you know, kind of on the lower end, maybe a little. It'd be end market activity has been a little weaker than we thought. Looking forward, I would not take that move as a signal that we think the end market is deteriorating or getting any worse. You know, it just kind of looks like more of the same as we've been telling you guys all year, highly variable by geography. And then when you get into, you know, non-residential is a very broad segment.
Michael Higgins: Hey, Garrick, Mike Higgins. I think Matt made the comment in his question about that, a kind of mark to market. And that's. I would kind of agree with that. You know, that's just more of an update. You know, hey, we're through nine months of the year. We have a pretty good idea of what it's gonna look like. And so, you know, kind of on the lower end, maybe a little. It'd be end market activity has been a little weaker than we thought. Looking forward, I would not take that move as a signal that we think the end market is deteriorating or getting any worse. You know, it just kind of looks like more of the same as we've been telling you guys all year, highly variable by geography. And then when you get into, you know, non-residential is a very broad segment.
Speaker #5: ?
Speaker #9: Hey , about kind of mark to market . And that's I would kind of that . You know , that's just more agree with update .
Speaker #9: Derek Mike Higgins , I think Matt made the comment in his
Is resetting there's more optimism looking through calendar 'twenty six even into 'twenty seven I'm wondering if that's showing up in and what your team tracks on the pipeline.
Speaker #9: hey , we're You know , through nine months of We have a idea of what it's pretty good the year . going to look And like .
Donald Scott Barbour: Scott Barbour again. I would say the things we track and look at for infrastructure, the activity is better from a quoting perspective. And the visibility continues to get better on that. That said, you know, it's choppy. Our win rate needs to be better in that segment. It's not like we're not finding and seeing and looking for things. We're just frankly, it's competitive. Some things that have kind of moved through from, you know, that we've already kind of had ordered and sold over the past year, that make some of our comps difficult versus prior year, were places where we had very high participation, particularly around some of our Allied Products, like airports, rail, and things like that.
D. Scott Barbour: Scott Barbour again. I would say the things we track and look at for infrastructure, the activity is better from a quoting perspective. And the visibility continues to get better on that. That said, you know, it's choppy. Our win rate needs to be better in that segment. It's not like we're not finding and seeing and looking for things. We're just frankly, it's competitive. Some things that have kind of moved through from, you know, that we've already kind of had ordered and sold over the past year, that make some of our comps difficult versus prior year, were places where we had very high participation, particularly around some of our Allied Products, like airports, rail, and things like that.
Scott Barbour again.
Speaker #9: you know , the lower kind of on end , maybe a little at the end market activity has been a little weaker than we thought .
I would say the things, we track and look at for infrastructure.
The activity is better from a quoting.
Speaker #9: Looking forward would take that move signal that as a we think the end not deteriorating or getting any worse . You know , it just kind of more of the looks same as we've been telling you guys Highly variable by all year .
Perspective.
And the visibility continues to get better on that that said, it's choppy our win rate needs to be better in that segment, it's not like we're not finding and seeing and looking for things.
Speaker #9: geography . And then when you get into like non-residential is a very broad segment , when you get in there , certain there's types project , data always that are continued to be strong .
Michael Higgins: When you get in there, there are certain project types, data centers always come up that are continued to be strong. We've seen improvement in warehouse activity. Our sales are now up for the fiscal year, you know, which is good. That had been, you know, a decliner over the past couple of years. And, you know, depending on the geography, we are seeing fairly solid activity and just kind of your general purpose, kind of commercial type construction. Think of the things we always talk about, horizontal, low-rise type construction is where we do best in that non-residential segment.
Michael Higgins: When you get in there, there are certain project types, data centers always come up that are continued to be strong. We've seen improvement in warehouse activity. Our sales are now up for the fiscal year, you know, which is good. That had been, you know, a decliner over the past couple of years. And, you know, depending on the geography, we are seeing fairly solid activity and just kind of your general purpose, kind of commercial type construction. Think of the things we always talk about, horizontal, low-rise type construction is where we do best in that non-residential segment.
We're just frankly, it's competitive.
Things that have kind of moved through from.
Speaker #9: We've seen centers improvement in warehouse activity . Our sales are now up for the fiscal year . had which is good . That been , you know , a decline over the You know , past so , years .
You know that we've already kind of had ordered and sold over the past year that made some of our comps difficult versus prior year were places, where we had very high participation, particularly around some of our allied products like airports and rail and and things like that.
Speaker #9: you know , depending And , on the geography , we are fairly seeing solid activity kind of your general purpose kind of and just commercial type construction .
Donald Scott Barbour: But when we get into the road and highway, we're good in some states, we're not good in some states, and that has hurt our participation there. That said, you know, we have visibility, we're in there pitching, and actually, our orders are slightly better right now in that category than they were. So we will remain pretty focused on gaining share there.
D. Scott Barbour: But when we get into the road and highway, we're good in some states, we're not good in some states, and that has hurt our participation there. That said, you know, we have visibility, we're in there pitching, and actually, our orders are slightly better right now in that category than they were. So we will remain pretty focused on gaining share there.
But when we get into the road and highway we're good in some states were not good in some states.
Speaker #9: Think always talk things we about horizontal of the construction is where type we do in that non-residential segment
That has hurt our participation there.
We're we have visibility where in there pitching.
Garik Shmois: Yeah. Okay. No, thanks for the detail there. I wanted to ask on NDS, now that it's closed. Wanted to be clear on how much you are incorporating in the Q4 guide with respect to sales, and if there's any EBITDA contribution. And then also, if you could speak to, you know, what we should be thinking about for calendar 2026. You know, you know, we're not, you know, in the fiscal 2027 guidance range just yet, but any additional, you know, handholding on the expected contribution from the recently closed acquisition?
Garik Shmois: Yeah. Okay. No, thanks for the detail there. I wanted to ask on NDS, now that it's closed. Wanted to be clear on how much you are incorporating in the Q4 guide with respect to sales, and if there's any EBITDA contribution. And then also, if you could speak to, you know, what we should be thinking about for calendar 2026. You know, you know, we're not, you know, in the fiscal 2027 guidance range just yet, but any additional, you know, handholding on the expected contribution from the recently closed acquisition?
Speaker #5: okay . Thanks for for the detail . to ask on Pnds now There that it's closed , I wanted to be
And.
The extra order orders are slightly better right now in that category than they were.
Speaker #5: clear on how much you're incorporating low rise in the Force guide with respect to sales if there's any EBITDA contribution . And then also if you could to , you .
We will remain.
Pretty focused on gaining share there.
David Edmund Tarantino: Okay, understood. Thank you again.
Bryan Blair: Okay, understood. Thank you again.
Okay understood.
Donald Scott Barbour: You know, yeah, I forgot, you know, you kind of alluded to it in the question, that the government shutdown probably didn't help. You know, through those 38 or 40 days of the government shutdown, we did see some friction created, particularly in that kind of work and some other type of work, through where there was just no one there to release an order or take a delivery, to tell you the truth.
D. Scott Barbour: You know, yeah, I forgot, you know, you kind of alluded to it in the question, that the government shutdown probably didn't help. You know, through those 38 or 40 days of the government shutdown, we did see some friction created, particularly in that kind of work and some other type of work, through where there was just no one there to release an order or take a delivery, to tell you the truth.
Yeah, Yeah, Yeah, I forgot you know you kind of I think you made maybe alluded to it in the question was the government shutdown probably didn't help.
Speaker #5: what And we should be about for calendar 26 , I know , you thinking know , we're not the guidance yet , but any additional on the expected contribution from the recently closed acquisition just handholding
Through those 38 or 40 days of the government shutdown, we did see some friction created particularly in that kind of work and some other type of work.
Scott Barber: Yeah, like we said on the call, the NDS in the current guide is about $40 million in revenue at a 20% EBITDA margin. So that's how we've incorporated it for the last two months of our fiscal year, ending here at 31 March. As to next year, again, we'll get into a lot more detail of that at the Investor Day, but I would encourage you to go back and look at the 8-K that we filed a couple of months ago. And in there, we gave a little bit of detail on kind of what their performance looks like. So I think it'll give you kind of the guardrails to start thinking about it and how to model it.
Scott Barbour: Yeah, like we said on the call, the NDS in the current guide is about $40 million in revenue at a 20% EBITDA margin. So that's how we've incorporated it for the last two months of our fiscal year, ending here at 31 March. As to next year, again, we'll get into a lot more detail of that at the Investor Day, but I would encourage you to go back and look at the 8-K that we filed a couple of months ago. And in there, we gave a little bit of detail on kind of what their performance looks like. So I think it'll give you kind of the guardrails to start thinking about it and how to model it.
Speaker #5: ?
Speaker #1: on call , we said Yeah , like the Pnds in the guide is about revenue at a 40 million of 20% EBITDA margin .
Through.
There was just no one there to release in order to take a take care delivery to tell you the truth.
Speaker #1: current So that's how we've incorporated it for the last two months of our fiscal year ending here at March 31st , as to next year , again , we'll get into a lot more detail on that at the Day .
Yeah.
David Edmund Tarantino: Yep, understood. Thanks, guys.
Bryan Blair: Yep, understood. Thanks, guys.
Understood.
Yes.
Operator: Our next question comes from Garik Shmois of Loop Capital Markets. Your line is open. Please go ahead.
Operator: Our next question comes from Garik Shmois of Loop Capital Markets. Your line is open. Please go ahead.
Our next question comes from Garik <unk> of loop capital markets. Your line is open. Please go ahead.
Speaker #1: But Investor I would encourage you to go back and look at 8-K that we filed a couple of months ago , and we in there , gave a little bit the of detail on kind of what their performance looks like .
Garik Simha Shmois: Well, hi. Thanks. Good morning. Just on non-residential, just wondering if you can go into a little bit more detail on what led to the reduction in the end market guidance. Is there anything that you're seeing specific to any regions or any categories that is leading to the move to down low mid-single digit declines?
Garik Shmois: Well, hi. Thanks. Good morning. Just on non-residential, just wondering if you can go into a little bit more detail on what led to the reduction in the end market guidance. Is there anything that you're seeing specific to any regions or any categories that is leading to the move to down low mid-single digit declines?
Hi, Thanks, good morning.
On nonresidential just wondering if you could go into a little bit more detail on.
What led to the reduction of the end market guidance is there anything that you're you're seeing specific to any regions or.
Speaker #1: So I think it'll kind of the guardrails to give you thinking about it how to model it and
Garik Shmois: Okay. Thanks for that. I'll pass it on.
Garik Shmois: Okay. Thanks for that. I'll pass it on.
Speaker #1: .
Speaker #5: . Thanks for that . I'll pass it on Okay
Operator: Our next question comes from Trey Grooms with Stephens. Your line is open. Please go ahead.
Operator: Our next question comes from Trey Grooms with Stephens. Your line is open. Please go ahead.
Any categories.
Speaker #2: Our next Trey Grooms with Stephens . Your line is from .
Is leading to the move to down low to mid single digit declines.
Trey Grooms: Hey, good morning, everyone. Thanks for taking my question. So with the $1 billion, you know, stock repurchase authorization, it's good to see that. You know, and now with the completion of or the closing of the deal, the NDS deal, how are you thinking about balancing buyback, you know, buying back stock versus future M&A? You know, and now with the integration, NDS integration, you know, probably going into full swing, I would think here in short order, you know, maybe you could talk about your appetite for deals here, kind of, you know, in the more medium term.
Trey Grooms: Hey, good morning, everyone. Thanks for taking my question. So with the $1 billion, you know, stock repurchase authorization, it's good to see that. You know, and now with the completion of or the closing of the deal, the NDS deal, how are you thinking about balancing buyback, you know, buying back stock versus future M&A? You know, and now with the integration, NDS integration, you know, probably going into full swing, I would think here in short order, you know, maybe you could talk about your appetite for deals here, kind of, you know, in the more medium term.
Michael Higgins: Hey, Garik, Mike Higgins. I think Matt made the comment in his question about that, a kind of mark to market. And that's—I would kind of agree with that. You know, that's just more of an update, you know, hey, we're through nine months of the year, we have a pretty good idea of what it's gonna look like. And so, you know, kind of on the lower end, maybe a little... the end market activity has been a little weaker than we thought. Looking forward, I would not take that move as a signal that we think the end market is deteriorating or getting any worse.
Mike Higgins: Hey, Garik, Mike Higgins. I think Matt made the comment in his question about that, a kind of mark to market. And that's—I would kind of agree with that. You know, that's just more of an update, you know, hey, we're through nine months of the year, we have a pretty good idea of what it's gonna look like. And so, you know, kind of on the lower end, maybe a little... the end market activity has been a little weaker than we thought. Looking forward, I would not take that move as a signal that we think the end market is deteriorating or getting any worse.
Speaker #10: Hey , good morning everyone . Thanks for taking my question . So with the with the $1 billion stock repurchase authorization , it's that good to see the , you know , and now with the completion of the closing of the of deal .
Hey, Eric Mike Higgins I think Matt made the comment in his question about that are kind of mark to market and that's I would kind of agree with that that's just more of an update you know hey, we're through nine months of the year, we have a pretty good idea of what it's going to look like and so kind of on the lower end.
Speaker #10: Deal . How are you thinking about balancing buyback ? You know , buying back stock
Maybe a little it would be end market activities, but a little weaker than we thought looking forward.
Speaker #10: versus
Speaker #10: future M&A question . . You know , and now with the the integration ends integration , you know , probably going into full swing , I would think here in short , you know , if maybe you could talk about your appetite for order for deals here kind you know in the , in the of more medium term .
I would not take that move is a signal that we think the end market is deteriorating or getting any worse.
Michael Higgins: You know, it just kind of looks like more of the same as we've been telling you guys all year, highly variable by geography, and then when you get into, you know, non-residential is a very broad segment. When you get in there, there are certain project types, data centers always come up that are continued to be strong. We've seen improvement in warehouse activity. Our sales are now up for the fiscal year, you know, which is good. That had been, you know, a decliner over the past couple of years. And, you know, depending on the geography, we are seeing fairly solid activity and just kind of your general purpose, kind of commercial type construction. Think of the things we always talk about, horizontal, low-rise type construction is where we do best in that non-residential segment.
Mike Higgins: You know, it just kind of looks like more of the same as we've been telling you guys all year, highly variable by geography, and then when you get into, you know, non-residential is a very broad segment. When you get in there, there are certain project types, data centers always come up that are continued to be strong. We've seen improvement in warehouse activity. Our sales are now up for the fiscal year, you know, which is good. That had been, you know, a decliner over the past couple of years. And, you know, depending on the geography, we are seeing fairly solid activity and just kind of your general purpose, kind of commercial type construction. Think of the things we always talk about, horizontal, low-rise type construction is where we do best in that non-residential segment.
Kind of looks like more of the same as we've been telling you guys all year highly variable by geography, and then when you get into nonresidential has a very broad segment. When you get in there. There are certain project types Datacenters always come up that are continued to be strong we've seen improvement in.
Scott Barber: Yeah. Right now, Trey, the, the focus is gonna be organic. It's, it's getting NDS integrated. I'd say it's also the reason we're hosting at the Engineering and Technology Center, on purpose.
Scott Barbour: Yeah. Right now, Trey, the, the focus is gonna be organic. It's, it's getting NDS integrated. I'd say it's also the reason we're hosting at the Engineering and Technology Center, on purpose.
Speaker #1: Yeah . Right now the focus is going to be organic . It's it's getting I'd say it's also the reason we're hosting it .
Scott Cottrill: ... innovation, new product introduction really important as we go. So again, we look at the opportunities we have organically, and again, especially within not only the pipe business, but Allied and Infiltrator, highest return, lowest risk use of our capital and how we deploy it. So that, by far, will be number one. Again, pro forma debt with NDS, again, we paid for almost the entire deal out of cash on hand. We're only 1.5x levered right now. Our guardrails are 1 to 2x. And you know what? We're gonna generate a bunch of cash over the next 6, 9, 12 months and year, couple years, like we've been doing. So we're gonna, you know, we're gonna toggle lower to 1.5x pretty quick. So, does that mean that we've got an appetite for M&A?
Scott Barbour: ... innovation, new product introduction really important as we go. So again, we look at the opportunities we have organically, and again, especially within not only the pipe business, but Allied and Infiltrator, highest return, lowest risk use of our capital and how we deploy it. So that, by far, will be number one. Again, pro forma debt with NDS, again, we paid for almost the entire deal out of cash on hand. We're only 1.5x levered right now. Our guardrails are 1 to 2x. And you know what? We're gonna generate a bunch of cash over the next 6, 9, 12 months and year, couple years, like we've been doing. So we're gonna, you know, we're gonna toggle lower to 1.5x pretty quick. So, does that mean that we've got an appetite for M&A?
Speaker #1: The engineering and technology centers on purpose , innovation , product new introduction . Really as we important go . So again , we look at opportunities we have organically .
Warehouse activity our sales are now up for the fiscal year, which is good that had been.
A decliner over the past couple of years and depending on the geography.
Are seeing fairly solid activity and just kind of your general purpose kind of commercial type construction that think of the things. We always talk about horizontal low rise type construction is where we do best and that nonresidential segment.
Speaker #1: again , And especially within not only the the integrated . pipe business but allied and infiltrator return , lowest risk use of our capital highest and how we deploy it .
Speaker #1: So that by far will be number debt with NDS . Again , we're we almost the entire deal out of paid for cash on We're hand .
Garik Simha Shmois: Yeah. Okay. Well, thanks for the detail there. I wanted to ask on NDS, now that it's closed, wanted to be clear on how much you are incorporating in the Q4 guide with respect to sales, and if there's any EBITDA contribution. And then also, if you could speak to, you know, what we should be thinking about for calendar 2026. I know, you know, we're not, you know, in the, the fiscal 2027, guidance range just yet, but any additional, you know, handholding on, the expected contribution from the recently closed acquisition?
Garik Shmois: Yeah. Okay. Well, thanks for the detail there. I wanted to ask on NDS, now that it's closed, wanted to be clear on how much you are incorporating in the Q4 guide with respect to sales, and if there's any EBITDA contribution. And then also, if you could speak to, you know, what we should be thinking about for calendar 2026. I know, you know, we're not, you know, in the, the fiscal 2027, guidance range just yet, but any additional, you know, handholding on, the expected contribution from the recently closed acquisition?
Yep, Okay. Thanks sure.
For the detail there wanted to ask on <unk> now that it's closed.
Speaker #1: only one and a half times levered right now . Our guardrails are one that two times . And you know what we're going to one again , pro cash over generate a the next six , nine , 12 months .
I wanted to be clear on how.
Much incorporated in the <unk> guide with respect to sales.
Speaker #1: And years , couple of like we've been doing years . So we're going to you we're going to know , toggle over to one and a half times pretty quick .
Right.
If there is any EBITDA contribution and then also if you could speak to.
Speaker #1: So does we've got an for M&A ? We'll continue to look we have a funnel . But it will be tuck ins and bolt ons .
Scott Cottrill: We'll continue to look. We have a funnel, but it'll be tuck-ins and bolt-ons. Those are things we do really, really well, and those are things that might have an EV purchase price at $150 to 250 to maybe up to 300 million dollars. And that's really kind of where we do really well, we excel, and we leverage. And again, we have a great balance sheet, extremely fortified, and the leverage to go put that to work. So organic, for sure, as well as some productivity and efficiency initiatives that we have and continue to have. But then strategic M&A is definitely something we'll look there. But right now, the priority is organic. But we're always looking in for the right opportunity. We've got the capacity to pull the trigger, so that's always something we'll be looking for.
Scott Barbour: We'll continue to look. We have a funnel, but it'll be tuck-ins and bolt-ons. Those are things we do really, really well, and those are things that might have an EV purchase price at $150 to 250 to maybe up to 300 million dollars. And that's really kind of where we do really well, we excel, and we leverage. And again, we have a great balance sheet, extremely fortified, and the leverage to go put that to work. So organic, for sure, as well as some productivity and efficiency initiatives that we have and continue to have. But then strategic M&A is definitely something we'll look there. But right now, the priority is organic. But we're always looking in for the right opportunity. We've got the capacity to pull the trigger, so that's always something we'll be looking for.
Well, we should be thinking about for calendar 'twenty six.
We're not in the fiscal 'twenty seven Guy.
Speaker #1: Those are the that mean that do really , really well . And appetite those are things have that might an EV purchase price at 150 to 250 , to maybe up to $300 million .
Guidance range, just yet, but any additional handholding.
The expected contribution from the recently closed acquisition.
Donald Scott Barbour: Yeah, like we said on the call, the NDS in the current guide is about $40 million of revenue at a 20% EBITDA margin. So that's how we've incorporated it for the last two months of our fiscal year, ending here at 31 March. As to next year, again, we'll get into a lot more detail of that at the Investor Day, but I would encourage you to go back and look at the 8-K that we filed a couple of months ago. And in there, we gave a little bit of detail on kind of what their performance looks like. So I think it'll give you kind of the guardrails to start thinking about it and how to model it.
D. Scott Barbour: Yeah, like we said on the call, the NDS in the current guide is about $40 million of revenue at a 20% EBITDA margin. So that's how we've incorporated it for the last two months of our fiscal year, ending here at 31 March. As to next year, again, we'll get into a lot more detail of that at the Investor Day, but I would encourage you to go back and look at the 8-K that we filed a couple of months ago. And in there, we gave a little bit of detail on kind of what their performance looks like. So I think it'll give you kind of the guardrails to start thinking about it and how to model it.
Yeah, like we said on the call the NDS and the current guide is about $40 million of revenue had a 20% EBITDA margin. So that's how we've incorporated for the last two months of our fiscal year ending here at March 31st as to next year again, we'll get into a lot more detail that at the Investor day, but I.
Speaker #1: And that's really kind of where we do really well . We excel and we leverage . And again , we have a great balance sheet , extremely fortified .
Speaker #1: And the go put that to work . So organic for as some , as well sure leverage to productivity and efficiency initiatives that we have and continue to have .
I would encourage you to go back and look at the 8-K that we filed.
Speaker #1: But then M&A is definitely something we'll look there . But right now the priority is strategic organic . But we're we're always looking in for the right opportunity .
Couple of months ago, and in there, we gave a little bit of detail on kind of what their performance.
Speaker #1: We've got the capacity to pull the trigger . So that's always something we'll be looking for . If I could add one thing to that is , you know , much , much saw with infiltrator where , you know , some capital infusion could get some projects going .
It looks like so I think it'll give you kind of the guardrails to start thinking about it and how to model it.
Scott Barber: If I could add one thing to that-
Scott Cottrill: If I could add one thing to that-
Scott Cottrill: Yeah
Trey Grooms: Yeah
Scott Barber: ... is, you know, much, much like we saw with Infiltrator, where, you know, some capital infusion could get some projects going really quickly and fast, and that's paid off wonderfully for us. We see similar things at NDS, where not a lot of capital has been invested over the last 10 years by the previous owner. They have some great ideas around automation, around some new products, around some other, other, you know, kind of high-value moves. So we're anxious to get in there and look at those in more detail with them. To re-- and I'm only saying this, Trey, to kind of reinforce what Scott says about the organic opportunities we have. So, you know, I think we're gonna stay kind of in that range we're in today of capital spending, but where we're spending some of that is likely to, to shift a bit.
Scott Barbour: ... is, you know, much, much like we saw with Infiltrator, where, you know, some capital infusion could get some projects going really quickly and fast, and that's paid off wonderfully for us. We see similar things at NDS, where not a lot of capital has been invested over the last 10 years by the previous owner. They have some great ideas around automation, around some new products, around some other, other, you know, kind of high-value moves. So we're anxious to get in there and look at those in more detail with them. To re-- and I'm only saying this, Trey, to kind of reinforce what Scott says about the organic opportunities we have. So, you know, I think we're gonna stay kind of in that range we're in today of capital spending, but where we're spending some of that is likely to, to shift a bit.
Garik Simha Shmois: Okay, thanks for that. I'll pass it on.
Garik Shmois: Okay, thanks for that. I'll pass it on.
Okay. Thanks.
With that I'll pass it on.
Okay.
Operator: Our next question comes from Trey Grooms with Stephens. Your line is open. Please go ahead.
Operator: Our next question comes from Trey Grooms with Stephens. Your line is open. Please go ahead.
Our next question comes from Trey Grooms with Stephens. Your line is open. Please go ahead.
Speaker #1: Really quickly and fast , and that's paid off wonderfully for us . We see similar things at NDS where not a lot of capital has been invested over the last ten years by the previous owner .
Trey Grooms: Hey, good morning, everyone. Thanks for taking my question. So with the $1 billion stock repurchase authorization, it's good to see that. You know, and now with the completion of, or the closing of the deal, the NDS deal, how are you thinking about balancing buyback, you know, buying back stock versus future M&A? You know, and now with the integration, NDS integration, you know, probably going into full swing, I would think here in short order, you know, maybe you could talk about your appetite for deals here, kind of, you know, in the more medium term.
Trey Grooms: Hey, good morning, everyone. Thanks for taking my question. So with the $1 billion stock repurchase authorization, it's good to see that. You know, and now with the completion of, or the closing of the deal, the NDS deal, how are you thinking about balancing buyback, you know, buying back stock versus future M&A? You know, and now with the integration, NDS integration, you know, probably going into full swing, I would think here in short order, you know, maybe you could talk about your appetite for deals here, kind of, you know, in the more medium term.
Hey, good morning, everyone and thanks for taking my question.
So with the with the $1 billion stock repurchase authorization, it's good to see that.
Speaker #1: They have some great ideas around automation , around some new products , around some other other , you know , kind of high value moves .
And now with the completion of.
The closing of the deal the <unk> deal.
How are you thinking about balancing buyback.
Speaker #1: So we're anxious to get in and there look at those in more detail with them to and I'm only saying this to kind reinforce what says about the organic opportunities we have .
Adding back stock versus future M&A.
And now with the integration of NDS integration, probably going into full swing I would think here in short order.
Speaker #1: So , you know , I think we're going to stay kind of in that range . We're in today of capital spending , but where we're spending some of that is likely to to shift a bit .
Maybe you could talk about your appetite for per deal to your kind of.
Scott Barber: We got a big project going on at Infiltrator right now. We've done a lot of great work in the pipe network that's really paying off for us. This NDS is the next big opportunity.
Scott Barbour: We got a big project going on at Infiltrator right now. We've done a lot of great work in the pipe network that's really paying off for us. This NDS is the next big opportunity.
Speaker #1: We got a big project going on at infiltrator right now . We've done a lot of great work in the pipe pipe network .
In the in the more medium term.
Donald Scott Barbour: Yeah. Right now, Trey, the focus is gonna be organic. It's getting NDS integrated. I'd say it's also the reason we're hosting it, the engineering and technology center is on purpose, innovation, new product introduction, really important as we go. So again, we look at the opportunities we have organically, and again, especially within not only the pipe business, but Allied and Infiltrator.
D. Scott Barbour: Yeah. Right now, Trey, the focus is gonna be organic. It's getting NDS integrated. I'd say it's also the reason we're hosting it, the engineering and technology center is on purpose, innovation, new product introduction, really important as we go. So again, we look at the opportunities we have organically, and again, especially within not only the pipe business, but Allied and Infiltrator.
Yeah right now the focus is going to be organic it's getting NDS integrated.
Speaker #1: That's really paying off for us . This NDS is the next big opportunity we've .
Trey Grooms: Yep. That's all super helpful. Thank you for all that. And just kind of circling back on a comment earlier, you know, on accessing capital markets this year. You know, you do have some near-term maturities. Is it that you're expecting to or are you expecting to maybe bring on any, you know, incremental leverage there, or is this really just purely just taking care of the maturities?
Trey Grooms: Yep. That's all super helpful. Thank you for all that. And just kind of circling back on a comment earlier, you know, on accessing capital markets this year. You know, you do have some near-term maturities. Is it that you're expecting to or are you expecting to maybe bring on any, you know, incremental leverage there, or is this really just purely just taking care of the maturities?
It's also the reason we're hosting at the engineering and technology centers on purpose.
Speaker #10: Yep , that's all super helpful . Thank you for all that . And of circling back just kind on the comment earlier , you know ,
Innovation, new product introduction really important as we go so again, we look at the opportunities we have organically and again, especially within not only the pipe business, but allied and infiltrator highest return lowest risk use of our capital and how we deploy it so that by far will be number one again.
Speaker #10: accessing capital of markets this year . You know , you do have some near-term maturities is it that you're expecting to or are you expecting to maybe bring on any , you know , incremental leverage there ?
Scott A. Cottrill: ... highest return, lowest risk use of our capital and how we deploy it. So that, by far, will be number one. Again, pro forma debt with NDS, again, we paid for almost the entire deal out of cash on hand. We're only one and a half times levered right now. Our guardrails are one to two times. And you know what? We're gonna generate a bunch of cash over the next 6, 9, 12 months, and year, couple years, like we've been doing. So we're gonna, you know, we're gonna toggle lower to one and a half times pretty quick. So, does that mean that we've got an appetite for M&A? We'll continue to look. We have a funnel, but it'll be tuck-ins and bolt-ons.
Scott A. Cottrill: ... highest return, lowest risk use of our capital and how we deploy it. So that, by far, will be number one. Again, pro forma debt with NDS, again, we paid for almost the entire deal out of cash on hand. We're only one and a half times levered right now. Our guardrails are one to two times. And you know what? We're gonna generate a bunch of cash over the next 6, 9, 12 months, and year, couple years, like we've been doing. So we're gonna, you know, we're gonna toggle lower to one and a half times pretty quick. So, does that mean that we've got an appetite for M&A? We'll continue to look. We have a funnel, but it'll be tuck-ins and bolt-ons.
Speaker #10: Or is this really just purely just taking care of the maturities ?
Pro forma debt with NDS again, we paid for almost the entire deal out of cash on hand, we're only one five times Levered right now our guardrails of one to two times and you know what we're going to generate a bunch of cash over the next six 912 months in a couple of years like we've been doing so we're going to you know.
Scott Cottrill: Yeah. Right now, the primary focus is on the maturities, right? So, I like a weighted average maturity that's, you know, extended, gives us a lot of flexibility, and that's the primary focus right now.
Scott Cottrill: Yeah. Right now, the primary focus is on the maturities, right? So, I like a weighted average maturity that's, you know, extended, gives us a lot of flexibility, and that's the primary focus right now.
Speaker #1: Yeah . Right now , the primary focus is on the the maturities . I maturity . like a weighted you know average That's , , extended us a lot flexibility gives .
Speaker #1: And that's the primary focus right now .
Trey Grooms: Yep, makes sense. Okay, thanks a lot. I really appreciate it.
Trey Grooms: Yep, makes sense. Okay, thanks a lot. I really appreciate it.
Speaker #10: Yeah . Makes sense okay . Thanks a lot I really appreciate it . You're welcome .
We're gonna toggle lower to one five times pretty quick so does that mean that we've got an appetite for M&A.
Scott Cottrill: You're welcome.
Scott Cottrill: You're welcome.
Operator: Our next question comes from Jeff Reeves with RBC Capital Markets. Your line is open. Please go ahead.
Operator: Our next question comes from Jeff Reeves with RBC Capital Markets. Your line is open. Please go ahead.
Speaker #2: Our next question comes from Jeff Reeve with RBC Capital Markets . Your line is open . Please go ahead .
We continue to look we have a funnel.
But it'll be tuck ins and bolt ons those are the things, we do really really well and those are things that might have an EV purchase price at $1 50 to $2 50 to maybe up to $300 million and that's really kind of where we do really well, we excel when we leverage and again, we have a great balance sheet and extreme.
Scott A. Cottrill: Those are things we do really, really well, and those are things that might have an EV purchase price at $150 to 250 to maybe up to 300 million dollars. And that's really kind of where we do really well, we excel, and we leverage. And again, we have a, a great balance sheet, extremely fortified, and the leverage to go put that to work. So organic, for sure, as well as some productivity, and efficiency initiatives that we have and continue to have. But then strategic M&A is definitely something we'll look there. But right now, the priority is organic. But we're, we're always looking in for the right opportunity. We've got the capacity to pull the trigger, so that's always something we'll be looking for.
Scott A. Cottrill: Those are things we do really, really well, and those are things that might have an EV purchase price at $150 to 250 to maybe up to 300 million dollars. And that's really kind of where we do really well, we excel, and we leverage. And again, we have a, a great balance sheet, extremely fortified, and the leverage to go put that to work. So organic, for sure, as well as some productivity, and efficiency initiatives that we have and continue to have. But then strategic M&A is definitely something we'll look there. But right now, the priority is organic. But we're, we're always looking in for the right opportunity. We've got the capacity to pull the trigger, so that's always something we'll be looking for.
Jeff Reeves: Thanks. Good morning, and I appreciate all the details thus far. Really nice free cash flow generation this quarter, but working capital was a meaningful lift. Can you walk us through what drove that and maybe how we should be thinking about free cash flow for next, next quarter?
Jeff Reeves: Thanks. Good morning, and I appreciate all the details thus far. Really nice free cash flow generation this quarter, but working capital was a meaningful lift. Can you walk us through what drove that and maybe how we should be thinking about free cash flow for next, next quarter?
Speaker #11: Thanks . Good morning . And I appreciate all the details thus far . Really nice free cash flow generation . This quarter . But working capital was a meaningful lift .
Speaker #11: Can you walk us through what drove that and maybe how we should be thinking about free cash flow for next quarter .
Scott Cottrill: Yes, Scott Cottrell here. So again, the great thing about our working capital performance, it was all across the board. It was receivables, inventory, as well as accounts payable. So, really good execution by the team as we look at that. So our cash conversion cycle came down really nicely. So again, we target 20% working capital to sales. We're coming in, well, well, south of that, which is what we like. So again, it's a big focus of the team. Our demand and S&OP processes continue to get better. We've talked about the, you know, the investments we made in our customer service side of the house as well. So all of those things kind of lean into kind of better working capital performance.
Scott Cottrill: Yes, Scott Cottrell here. So again, the great thing about our working capital performance, it was all across the board. It was receivables, inventory, as well as accounts payable. So, really good execution by the team as we look at that. So our cash conversion cycle came down really nicely. So again, we target 20% working capital to sales. We're coming in, well, well, south of that, which is what we like. So again, it's a big focus of the team. Our demand and S&OP processes continue to get better. We've talked about the, you know, the investments we made in our customer service side of the house as well. So all of those things kind of lean into kind of better working capital performance.
<unk> four to five and the leverage to go put that to work so organic for sure.
Speaker #1: Yeah . Scott Cottrill here . So again , the great thing about our working capital performance , it was all across the board .
As well as some productivity and efficiency initiatives that we have and continue to have.
Speaker #1: It was receivables inventory as well as accounts payable . So really good execution by the team look at as we that . So our cash conversion cycle came really nicely down .
But then strategic M&A is definitely something we'll look there, but right now the priority is organic but we're always looking for the right opportunity. We've got the capacity to pull the trigger. So that's always something we will be looking for if I could add one thing to that as much.
Speaker #1: So again we target 20% working capital to sales . We're coming in well . Well south of that which is what we like .
Donald Scott Barbour: If I could add one thing to that-
Trey Grooms: If I could add one thing to that-
Scott A. Cottrill: Yeah
Scott A. Cottrill: Yeah
Donald Scott Barbour: ... is, you know, much, much like we saw with Infiltrator, where, you know, some capital infusion could get some projects going really quickly and fast, and that's paid off wonderfully for us. We see similar things at NDS, where not a lot of capital has been invested over the last 10 years by the previous owner. They have some great ideas around automation, around some new products, around some other, you know, kind of high-value moves. So we're anxious to get in there and to look at those in more detail with them. So and I'm only saying this, Trey, to kind of reinforce what Scott says about the organic opportunities we have. So, you know, I think we're gonna stay kind of in that range we're in today of capital spending, but where we're spending some of that is likely to shift a bit.
D. Scott Barbour: ... is, you know, much, much like we saw with Infiltrator, where, you know, some capital infusion could get some projects going really quickly and fast, and that's paid off wonderfully for us. We see similar things at NDS, where not a lot of capital has been invested over the last 10 years by the previous owner. They have some great ideas around automation, around some new products, around some other, you know, kind of high-value moves. So we're anxious to get in there and to look at those in more detail with them. So and I'm only saying this, Trey, to kind of reinforce what Scott says about the organic opportunities we have. So, you know, I think we're gonna stay kind of in that range we're in today of capital spending, but where we're spending some of that is likely to shift a bit.
Much like we saw with infiltrator, where some capital infusion could get some projects going really quickly and fast and that's paid off wonderfully for us we see similar things in India.
Speaker #1: So again it's a big focus of the team . Our demand and snop processes continue to get better . We've talked about the , you know , the investments we made in our customer service side of the house as well .
We're not a lot of capital has been invested over the last 10 years by the previous owner they have some great ideas around automation around some new products around some other other kind of high value moves. So we're anxious to get in there.
Speaker #1: So all of those things kind of lean into kind of better working capital performance . And again , it's a lot blocking and tackling and day by day little and things that add up to that kind of performance .
Scott Cottrill: And again, it's a lot of blocking and tackling and day by day, and little things that add up to that kind of performance. So, really good. And obviously, on the inventory side of the house, it's not just the fact that we're dealing with a lower res environment, it's also, again, that effective management of the pounds that are on the ground that we have. So again, really, really good kudos to the team.
Scott Cottrill: And again, it's a lot of blocking and tackling and day by day, and little things that add up to that kind of performance. So, really good. And obviously, on the inventory side of the house, it's not just the fact that we're dealing with a lower res environment, it's also, again, that effective management of the pounds that are on the ground that we have. So again, really, really good kudos to the team.
Speaker #1: So really good . And obviously on the inventory side of the house , it's not just the fact dealing with a lower resin environment .
Look at those in more detail with them.
So I'm always saying this trade to kind of reinforce what Scott says about the organic opportunities. We have so I think we're gonna stay kind of in that range. We're in today, if capital spending, but where we're spending some of that is likely to to shift a bit we've got a big project going on at Infiltrator right now we've done a lot.
Speaker #1: It's also , again , that effective management of the pounds that are on the ground that we have . So again , really , really good kudos to the team .
Donald Scott Barbour: We got a big project going on at Infiltrator right now. We've done a lot of great work in the pipe network that's really paying off for us. This NDS is the next big opportunity.
D. Scott Barbour: We got a big project going on at Infiltrator right now. We've done a lot of great work in the pipe network that's really paying off for us. This NDS is the next big opportunity.
Operator: Our next question comes from Colin Verron with Deutsche Bank.
Operator: Our next question comes from Colin Verron with Deutsche Bank.
Great work in the pipe type network, that's really paying off for us This NDS as the next big opportunity.
Speaker #2: Our next question comes from Collin Verron with Deutsche Bank .
Scott Barber: Good morning. Thank you for taking my questions. I just wanted to start on the mix. I was hoping you can dive a little bit further into that, help us really understand the top line and margin benefits there that you've seen. And then, can you just talk about how much of this is driven by the shift from sales of pipe toward Allied and Infiltrator versus maybe a mix shift within each of the categories? And then just how you're thinking about this, is this a structural improvement, or could some of this roll off as we see some of the end markets pick up, like resi in particular? Good question. This is Scott Barber. I'll take that. So for...
Colin Verron: Good morning. Thank you for taking my questions. I just wanted to start on the mix. I was hoping you can dive a little bit further into that, help us really understand the top line and margin benefits there that you've seen. And then, can you just talk about how much of this is driven by the shift from sales of pipe toward Allied and Infiltrator versus maybe a mix shift within each of the categories? And then just how you're thinking about this, is this a structural improvement, or could some of this roll off as we see some of the end markets pick up, like resi in particular?
Speaker #4: Good morning .
Trey Grooms: Yep. That's all super helpful. Thank you for all that. And, just kind of circling back on a comment earlier, you know, on accessing capital markets this year. You know, you do have some near-term maturities. Is it that you're expecting to... Or are you expecting to maybe bring on any, you know, incremental leverage there, or is this really just purely just taking care of the maturities?
Trey Grooms: Yep. That's all super helpful. Thank you for all that. And, just kind of circling back on a comment earlier, you know, on accessing capital markets this year. You know, you do have some near-term maturities. Is it that you're expecting to... Or are you expecting to maybe bring on any, you know, incremental leverage there, or is this really just purely just taking care of the maturities?
Speaker #12: Thank you for taking my questions . I just wanted to start on the mix . I was hoping you can dive a little bit further into that .
Yep.
All Super helpful. Thank you for all that in.
Just kind of circling back on a comment earlier.
Speaker #12: Help us really understand the top line and margin benefits there that you've seen . And then can you just talk about how much of this is driven by the shift from sales to sales of pipe toward allied and Infiltrator , versus maybe a mix shift within each of the categories ?
On accessing capital markets this year.
You do have some near term maturities as it is it that you're expecting to or are you expecting to maybe bring on any incremental leverage there or is this really just purely just taking care of the maturities.
Speaker #12: And then just how you're thinking about this , is this a structural improvement ? Or could some of this roll off as we see some of the end markets pick up like resin particular .
Scott Barbour: Good question. This is Scott Barber. I'll take that. So for...
Scott A. Cottrill: Yeah. Right now, the primary focus is on the maturities, right? So, I like a Weighted Average Maturity that's, you know, extended, gives us a lot of flexibility, and that's the primary focus right now.
Scott A. Cottrill: Yeah. Right now, the primary focus is on the maturities, right? So, I like a Weighted Average Maturity that's, you know, extended, gives us a lot of flexibility, and that's the primary focus right now.
Yeah right now the primary focus is on the maturities right. So I like a weighted average maturity that.
Speaker #1: Good question . And this is Scott Barber . I'll , I'll take that . So for for many years you know our growth algorithm has been to sell allied at a faster pace than pipe really driven by more market participation opportunities in the allied products .
Scott Barber: many years, you know, our growth algorithm has been to sell Allied at a faster pace than pipe. Really driven by more market participation opportunities in the Allied products, because they tended to be less mature markets versus the pipe piece of the water solution set. So we've been doing this quite a long time. In addition, as we've added, you know, kind of Infiltrator in, you know, we want to give better resiliency to our profitability, that we would get a lot of questions around, "Wow! You know, you've run the profitability up. Is it gonna come back down? Are you just gonna ride up and down with the, your materials pricing environment?" And, you know, we don't wanna do that. We'd be more consistent than that. We want to be more consistent.
Scott Barbour: many years, you know, our growth algorithm has been to sell Allied at a faster pace than pipe. Really driven by more market participation opportunities in the Allied products, because they tended to be less mature markets versus the pipe piece of the water solution set. So we've been doing this quite a long time. In addition, as we've added, you know, kind of Infiltrator in, you know, we want to give better resiliency to our profitability, that we would get a lot of questions around, "Wow! You know, you've run the profitability up. Is it gonna come back down? Are you just gonna ride up and down with the, your materials pricing environment?" And, you know, we don't wanna do that. We'd be more consistent than that. We want to be more consistent.
They extended it gives us a lot of flexibility.
And that's the primary focus right now.
Trey Grooms: Yep. Makes sense. Okay, thanks a lot. I really appreciate it.
Trey Grooms: Yep. Makes sense. Okay, thanks a lot. I really appreciate it.
Yeah makes sense, okay. Thanks, a lot I really appreciate it.
Donald Scott Barbour: You're welcome.
D. Scott Barbour: You're welcome.
Youre welcome.
Operator: Our next question comes from Jeff Reeves with RBC Capital Markets. Your line is open. Please go ahead.
Operator: Our next question comes from Jeff Reeves with RBC Capital Markets. Your line is open. Please go ahead.
Our next question comes from Jefferies with RBC capital markets. Your line is open. Please go ahead.
Speaker #1: Because they tended to be less mature markets versus the the pipe piece of the water . The water solution set . So we've been doing this quite , quite a long time .
Jeff Reeves: Thanks. Good morning, and I appreciate all the details thus far. Really nice free cash flow generation this quarter, but working capital was a meaningful lift. Can you walk us through what drove that and maybe how we should be thinking about free cash flow for next, next quarter?
Jeff Reive: Thanks. Good morning, and I appreciate all the details thus far. Really nice free cash flow generation this quarter, but working capital was a meaningful lift. Can you walk us through what drove that and maybe how we should be thinking about free cash flow for next, next quarter?
Thanks, Good morning, and I appreciate all the details thus far.
Speaker #1: In addition , as we've added , you know , kind of infiltrator in , you know , we , we , we want to give better resiliency to our profitability .
Really nice free cash flow generation this corner.
Working capital was a meaningful lift can you walk us through what drove that and maybe how we should be thinking about free cash flow for next quarter.
Speaker #1: You know , we would get a lot of questions around , wow , you know , you've run the profitability up . Is it going to come back down .
Scott A. Cottrill: Yes, Scott Cottrill here. So again, the great thing about our working capital performance, it was all across the board. It was receivables, inventory, as well as accounts payable. So, really good execution by the team as we look at that. So our cash conversion cycle came down really nicely. So again, we target 20% working capital to sales. We're coming in, well, well, south of that, which is what we like. So again, it's a big focus of the team. Our demand and S&OP processes continue to get better. We've talked about the, you know, the investments we made in our customer service side of the house as well. So all of those things kind of lean into kind of better working capital performance.
Scott A. Cottrill: Yes, Scott Cottrill here. So again, the great thing about our working capital performance, it was all across the board. It was receivables, inventory, as well as accounts payable. So, really good execution by the team as we look at that. So our cash conversion cycle came down really nicely. So again, we target 20% working capital to sales. We're coming in, well, well, south of that, which is what we like. So again, it's a big focus of the team. Our demand and S&OP processes continue to get better. We've talked about the, you know, the investments we made in our customer service side of the house as well. So all of those things kind of lean into kind of better working capital performance.
Yes.
Speaker #1: Are you just going to ride up and down with your materials pricing environment . And you know we don't want to do that .
Got control here, so again, the great thing about our working capital performance. It was all across the board it was receivables.
Speaker #1: We'd be more consistent than that . We want to be more consistent . I think we've proven that by continuing to move our mix to these allied products .
Scott Barber: I think we've proven that by continuing to move our mix to these Allied Products and the Infiltrator products. You do that with sales efforts, you do that with new products and programs. We doing that with acquisitions in the case of Orenco and NDS. It's not to say that we don't like the pipe business, we do, you know, but we also realized that investors wanted a more resilient profit profile. So that's what we work on. So it's not a one-time thing. Will it move around a bit as a percentage? Absolutely, it will. But I think, you know, we kind of like this 50%, you know, or better in Allied and Infiltrator. We think the natural tendencies of the growth of these businesses will continue to take us in this direction.
Scott Barbour: I think we've proven that by continuing to move our mix to these Allied Products and the Infiltrator products. You do that with sales efforts, you do that with new products and programs. We doing that with acquisitions in the case of Orenco and NDS. It's not to say that we don't like the pipe business, we do, you know, but we also realized that investors wanted a more resilient profit profile. So that's what we work on. So it's not a one-time thing. Will it move around a bit as a percentage? Absolutely, it will. But I think, you know, we kind of like this 50%, you know, or better in Allied and Infiltrator. We think the natural tendencies of the growth of these businesses will continue to take us in this direction.
Inventory as well as accounts payable so really good execution by the team as we look at that so our cash conversion cycle came down really nicely.
Speaker #1: And the infiltrator products , and you do that with sales efforts . You do that products and programs . We do that with acquisitions .
So again, we target, 20% working capital to sales.
Speaker #1: In the case of Orenco , in MDS , it's not to say that we don't like the pipe business . We do . You know , but we also realize that investors wanted a more resilient profit profile .
We're coming in well.
South of that which is what we like so again, it's a big focus of the team are our demand and S. N O P processes continue to get better we've talked about the.
Speaker #1: that's what we work So on . So it's not a one time thing . Will it move around a bit as a percentage ?
The investments we made in our customer service side of the house as well so all of those things kind of lean into kind of better working capital performance and again, it's a lot of blocking and tackling and day by day and little things that add up to that kind of performance. So.
Speaker #1: Absolutely . It But I think , you know , we kind of like this 50% . You know , or better in Allied and Infiltrator .
Scott A. Cottrill: And again, it's a lot of blocking and tackling, and day by day and little things that add up to that kind of performance. So, really good. And obviously, on the inventory side of the house, it's not just the fact that we're dealing with a lower resin environment, it's also, again, that effective management of the pounds that are on the ground, that we have. So again, really, really good kudos to the team.
Scott A. Cottrill: And again, it's a lot of blocking and tackling, and day by day and little things that add up to that kind of performance. So, really good. And obviously, on the inventory side of the house, it's not just the fact that we're dealing with a lower resin environment, it's also, again, that effective management of the pounds that are on the ground, that we have. So again, really, really good kudos to the team.
Speaker #1: We think the the the natural tendencies of the growth of these businesses will continue to take us into this direction . But if the pipe market takes off somewhere , you know that that could bounce around a bit .
Scott Barber: But if the pipe market takes off somewhere, you know, that, that could bounce around a bit, and that's not gonna scare us. That's not gonna frighten us. I think we know how to, we know how to handle that. I'm sure we'll talk about this at Investor Day as well. But it's just the changing complexion of the company as we move forward over these years.
Scott Barbour: But if the pipe market takes off somewhere, you know, that, that could bounce around a bit, and that's not gonna scare us. That's not gonna frighten us. I think we know how to, we know how to handle that. I'm sure we'll talk about this at Investor Day as well. But it's just the changing complexion of the company as we move forward over these years.
Really good and obviously on the inventory side of the house, it's not just the fact that we're dealing with a lower resin environment. It's also again that effective management of the pounds that are on the ground that we have so again really really good kudos to the team.
Speaker #1: And that's not going to scare us . That's not going to frighten us . I think we know how to we know how to handle that .
Speaker #1: I'm sure we'll talk about this at Investor Day as well , but it's just a the changing complexion of the company as , as we move forward over , over these years .
Okay.
Colin Verron: Great! That's really helpful color. And then, I guess, just want to touch on the raw material costs, based on the bridge, and I think your commentary is favorable on a year-over-year basis. But I'm curious how it's tracking sequentially, as we head into February here, and just any early thoughts on material costs in calendar year 2026, just based on what you're seeing today.
Colin Verron: Great! That's really helpful color. And then, I guess, just want to touch on the raw material costs, based on the bridge, and I think your commentary is favorable on a year-over-year basis. But I'm curious how it's tracking sequentially, as we head into February here, and just any early thoughts on material costs in calendar year 2026, just based on what you're seeing today.
Speaker #12: Great . That's really helpful . Color . And then I guess just wanted to touch on the raw material costs based on the bridge .
Operator: Our next question comes from Collin Verron with Deutsche Bank.
Operator: Our next question comes from Collin Verron with Deutsche Bank.
Our next question comes from Colin <unk> with Deutsche Bank.
Donald Scott Barbour: Good morning, thank you for taking my questions. I just wanted to start on the, the mix. I was hoping you can dive a little bit further into that, help us really understand the top line and margin benefits there that you've seen. And then, can you just talk about how much of this is driven by the shift from sales toward- sales of pipe toward Allied and Infiltrator, versus maybe a mix shift within each of the categories? And, and then just how are you thinking about this-- is this a structural improvement, or, or could some of this roll off as we see some of the end markets, pick up, like resin in particular?
Collin Verron: Good morning, thank you for taking my questions. I just wanted to start on the, the mix. I was hoping you can dive a little bit further into that, help us really understand the top line and margin benefits there that you've seen. And then, can you just talk about how much of this is driven by the shift from sales toward- sales of pipe toward Allied and Infiltrator, versus maybe a mix shift within each of the categories? And, and then just how are you thinking about this-- is this a structural improvement, or, or could some of this roll off as we see some of the end markets, pick up, like resin in particular?
Good morning. Thank you for taking my questions I just wanted to start on the mix I was hoping you can dive a little bit further into that and help us really understand the topline and margin benefits there that you've seen and then can you just talk about how much of this is driven by the shift from sales port sales with <unk> align and infiltrator versus maybe a mix shift within Egypt and categories.
Speaker #12: your And I think year basis , it's tracking curious how favorable on a but I'm commentary is year over sequentially head into as we February here .
Speaker #12: And just early any thoughts on material costs in calendar year 26 , just based on what you're seeing today ?
Scott Barber: I'll let Scott Cottrell handle this question.
Scott Barbour: I'll let Scott Cottrell handle this question.
Speaker #1: I'll let this question . Yeah . So again , price cost , you see it in our EBITDA waterfall on our bridges for the quarter and year to date period .
Scott Cottrill: Yeah. So again, price cost, you see it in our, EBITDA waterfall and our bridges for the quarter and year-to-date period. It's obviously something that we always look at and try to gauge. I mean, we, we have a pretty good, forecasting process. We call it our LE, our latest estimate, so it's constantly something that we look at. But to Scott's point, it's not just a resin cost environment that drives our, our pricing and/or profitability model. So that, volume side of the house, that demand side of the house, that mix side of the house, comes in pretty important when you look at that growth rate of Allied and Infiltrator and how that mixes us up from a margin, and profitability perspective.
Scott Cottrill: Yeah. So again, price cost, you see it in our, EBITDA waterfall and our bridges for the quarter and year-to-date period. It's obviously something that we always look at and try to gauge. I mean, we, we have a pretty good, forecasting process. We call it our LE, our latest estimate, so it's constantly something that we look at. But to Scott's point, it's not just a resin cost environment that drives our, our pricing and/or profitability model. So that, volume side of the house, that demand side of the house, that mix side of the house, comes in pretty important when you look at that growth rate of Allied and Infiltrator and how that mixes us up from a margin, and profitability perspective.
And then just how are you thinking about this is this a structural improvement or could some of this roll off as we see some of the end markets pick up like rescue in particular.
Speaker #1: It's obviously something that we always look at and try to gauge . I mean , we we have a good pretty forecasting process .
Scott A. Cottrill: Good question. And this is Scott Barbour. I'll take that. So for many years, you know, our growth algorithm has been to sell Allied at a faster pace than pipe. Really driven by more market participation opportunities in the Allied products.
Scott A. Cottrill: Good question. And this is Scott Barbour. I'll take that. So for many years, you know, our growth algorithm has been to sell Allied at a faster pace than pipe. Really driven by more market participation opportunities in the Allied products.
Good question and this is Scott Barbour I'll I'll take that so for four.
Speaker #1: We call our our latest estimate . So it's constantly something that we look at . But this guy's point , it's not just a resin cost environment that drives our pricing and or profitability model .
Many years.
Our growth algorithm has been to sell allied at a faster pace than pipe.
Speaker #1: So that volume side of the house , that demand side of the House , that mix side of the in house comes pretty important when you look at that growth rate of Allied and Infiltrator and how that mixes us up from a margin and profitability perspective .
Really driven by more market participation opportunities in the allied products, because they they tended to be less mature markets versus the pipe piece of the water. The water solution set so we've been doing this quite a quite a long time. In addition, as we've added you know kind of infiltrator in.
Donald Scott Barbour: ... because they tended to be less mature markets versus the pipe piece of the water solution set. So we've been doing this quite a long time. In addition, as we've added, you know, kind of Infiltrator in, you know, we want to give better resiliency to our profitability. So we would get a lot of questions around, wow, you know, you've run the profitability up. Is it gonna come back down? Are you just gonna ride up and down with your materials pricing environment? And, you know, we don't wanna do that. We'd be more consistent than that. We want to be more consistent. I think we've proven that by continuing to move our mix to these Allied Products and the Infiltrator products. And you do that with sales efforts, you do that with new products and programs.
D. Scott Barbour: ... because they tended to be less mature markets versus the pipe piece of the water solution set. So we've been doing this quite a long time. In addition, as we've added, you know, kind of Infiltrator in, you know, we want to give better resiliency to our profitability. So we would get a lot of questions around, wow, you know, you've run the profitability up. Is it gonna come back down? Are you just gonna ride up and down with your materials pricing environment? And, you know, we don't wanna do that. We'd be more consistent than that. We want to be more consistent. I think we've proven that by continuing to move our mix to these Allied Products and the Infiltrator products. And you do that with sales efforts, you do that with new products and programs.
Scott Cottrill: And then all the self-help initiatives that we've got going on within manufacturing, transportation, and then obviously within SG&A. So, specifically to your question, not gonna get into sequentially, kind of where we are, but I would just tell you, through the waterfalls, it's been a nice, you know, driver of profitability this year. And then we always look at that in our forecast, as well as all the other movers, when setting our guide and our targets, so.
Scott Cottrill: And then all the self-help initiatives that we've got going on within manufacturing, transportation, and then obviously within SG&A. So, specifically to your question, not gonna get into sequentially, kind of where we are, but I would just tell you, through the waterfalls, it's been a nice, you know, driver of profitability this year. And then we always look at that in our forecast, as well as all the other movers, when setting our guide and our targets, so.
Speaker #1: And then all the initiatives that on going manufacturing within , transportation obviously SG&A . , and then within So specifically to your question , not going to get into sequentially kind of where we are , but I would just tell you through the waterfalls , it's been a nice , you , driver of profitability know this year .
We want to give better resiliency to our profitability.
We would get a lot of questions around while you know you've run the profitability up is it going to come back down or you're just going to ride up and down with your materials pricing environment, and we don't want to do that we'd be more consistent and that we want to be more consistent I think we've proven that by continuing to move our mix to these allied products.
Speaker #1: And then we always look at that in our forecast , as well as all the other movers when , when setting our guide and our targets .
Speaker #1: So .
Colin Verron: Understood. Thank you.
Colin Verron: Understood. Thank you.
The infiltrator products and you do that with sales effort to do that with new products and programs you were doing that with acquisitions in the case of a rinko in NDS, except to say that we don't like the pipe business. We do you know, but we also realize that investors wanted a more resilient profit profile. So that's.
Speaker #12: Understood . Thank you .
Operator: Our next question comes from David Tarantino with KeyBanc Capital Markets. Your line is open. Please go ahead.
Operator: Our next question comes from David Tarantino with KeyBanc Capital Markets. Your line is open. Please go ahead.
Donald Scott Barbour: We're doing that with acquisitions in the case of Orenco and NDS. It's not to say that we don't like the pipe business, we do, you know, but we also realized that investors wanted a more resilient profit profile. So that's what we work on. So it's not a one-time thing. Will it move around a bit as a percentage? Absolutely, it will. But I think, you know, we kind of like this 50%, you know, or better in Allied and Infiltrator. We think the natural tendencies of the growth of these businesses will continue to take us into this direction. But if the pipe market takes off somewhere, you know, that could bounce around a bit, and that's not gonna scare us. That's not gonna frighten us. I think we know how to handle that.
D. Scott Barbour: We're doing that with acquisitions in the case of Orenco and NDS. It's not to say that we don't like the pipe business, we do, you know, but we also realized that investors wanted a more resilient profit profile. So that's what we work on. So it's not a one-time thing. Will it move around a bit as a percentage? Absolutely, it will. But I think, you know, we kind of like this 50%, you know, or better in Allied and Infiltrator. We think the natural tendencies of the growth of these businesses will continue to take us into this direction. But if the pipe market takes off somewhere, you know, that could bounce around a bit, and that's not gonna scare us. That's not gonna frighten us. I think we know how to handle that.
Speaker #2: Our next question comes from David Tarantino with KeyBanc Capital Markets . Your line is open . Please go ahead .
David Tarantino: Hey, good morning, everyone.
David Tarantino: Hey, good morning, everyone.
Speaker #13: Hey , good morning everyone .
Scott Barber: Good morning.
Scott Barbour: Good morning.
Scott Cottrill: Good morning.
Scott Cottrill: Good morning.
David Tarantino: To tie off the discussion on margins, you're still raising the margins despite NDS having a lower margin profile, if I'm not mistaken. Seems like a lot of this is better mix, but could you walk us through on what's giving the confidence here, and how you think about expanding margins moving forward as NDS contributes more meaningfully?
David Tarantino: To tie off the discussion on margins, you're still raising the margins despite NDS having a lower margin profile, if I'm not mistaken. Seems like a lot of this is better mix, but could you walk us through on what's giving the confidence here, and how you think about expanding margins moving forward as NDS contributes more meaningfully?
Speaker #9: Good morning .
Speaker #13: Tie off the discussion on margins . You're still raising the margins despite ends having a lower margin profile . If I'm not mistaken .
What we work on.
So it's not a onetime thing will it move around a bit as a percentage absolutely. It will but I think you know we kind of like the 50% you know.
Speaker #13: It seems like a lot of this is better mixed . But could you walk us through on what's given the confidence here and how you think about expanding margins as forward ends contributes more meaningfully ?
Or better in Allied and Infiltrator, we think the natural tendencies of the growth of these businesses will continue to take us into this direction.
Scott Cottrill: Starts with that mix, right? We talked about the Infiltrator and the Allied Products segments being 50% adjusted gross margin or greater businesses. So it starts with that mix. It also, you know, about 65 to 70 percent of our cost of sales, you know, sits on our balance sheet. So we know how that's gonna roll out here over the next 2 to 3 months. Obviously, the mix of the products that we sell and the segments that drive that are important to try to get right and kind of gauge that in. So that would be the driver of the margin expansion story as we look forward. It's what's on the balance sheet, you know, what's gonna be rolling off.
Scott Cottrill: Starts with that mix, right? We talked about the Infiltrator and the Allied Products segments being 50% adjusted gross margin or greater businesses. So it starts with that mix. It also, you know, about 65 to 70 percent of our cost of sales, you know, sits on our balance sheet. So we know how that's gonna roll out here over the next 2 to 3 months. Obviously, the mix of the products that we sell and the segments that drive that are important to try to get right and kind of gauge that in. So that would be the driver of the margin expansion story as we look forward. It's what's on the balance sheet, you know, what's gonna be rolling off.
Speaker #1: So with that , that mix , right . We talked about the infiltrator and the allied segments being 50% adjusted gross margin or greater .
But if the pipe market takes off somewhere.
That could bounce around a bit and thats not going to scarce, that's not going to frighten us I think we know how to we know how to handle that.
Speaker #1: Businesses . So it starts with that mix . It also , you know about 65 , 70% of our cost of sales . You know , sits on our balance sheet .
Donald Scott Barbour: I'm sure we'll talk about this at Investor Day as well. But it's just the changing complexion of the company as we move forward over these years.
D. Scott Barbour: I'm sure we'll talk about this at Investor Day as well. But it's just the changing complexion of the company as we move forward over these years.
I'm sure we'll talk about this at Investor day as well.
But it's just the changing complexion of the company is as we move forward over over these years.
Speaker #1: So we know how that's going to roll out here over the next 2 to 3 months . Obviously mix of the , the products that we sell and the segments that drive that are important to try to get right and kind of gauge that in .
Okay.
[Analyst] (Deutsche Bank): Great. That's really helpful color. And then, I guess, just wanted to touch on the raw material costs, based on the bridge, and I think your commentary is favorable on a year-over-year basis, but I'm curious how it's tracking sequentially, as we head into February here, and just any early thoughts on material costs in calendar year 2026, just based on what you're seeing today?
Collin Verron: Great. That's really helpful color. And then, I guess, just wanted to touch on the raw material costs, based on the bridge, and I think your commentary is favorable on a year-over-year basis, but I'm curious how it's tracking sequentially, as we head into February here, and just any early thoughts on material costs in calendar year 2026, just based on what you're seeing today?
Great that's really helpful color.
And then I guess just wanted to touch on the raw material costs based on the bridge and I think your commentary favorable on a year over year basis, but I'm curious, how it's tracking sequentially.
Speaker #1: So that would be the the driver of the margin expansion story . As we look forward . It's what's on the balance sheet .
As you head into February here, and just any early thoughts on material cost in calendar year 2016, just based on what Youre seeing today.
Scott Cottrill: That's not just resin costs; that's our manufacturing conversion costs, all of those items as well that we look at, and then we roll it forward based on that demand forecast. And then, again, like I mentioned, that mix of Allied Products and Infiltrator that tend to grow at kind of 2x the pipe business, that really mixes us up. So, those all go into it and are the drivers for that margin expansion story.
Scott Cottrill: That's not just resin costs; that's our manufacturing conversion costs, all of those items as well that we look at, and then we roll it forward based on that demand forecast. And then, again, like I mentioned, that mix of Allied Products and Infiltrator that tend to grow at kind of 2x the pipe business, that really mixes us up. So, those all go into it and are the drivers for that margin expansion story.
Speaker #1: What's going to be rolling off . That's not just resin costs . That's our manufacturing conversion costs items those . All of as well that at .
Donald Scott Barbour: I'll let Scott Cottrill handle this question.
D. Scott Barbour: I'll let Scott Cottrill handle this question.
I'll, let Scott control handle this question.
Scott A. Cottrill: Yeah. So again, price costs, you see it in our EBITDA waterfall and our bridges for the quarter and year-to-date period. It's obviously something that we always look at and try to gauge. I mean, we have a pretty good forecasting process. We call it our LE, our latest estimate, so it's constantly something that we look at. But to Scott's point, it's not just a resin cost environment that drives our pricing and/or profitability model. So that volume side of the house, that demand side of the house, that mix side of the house, comes in pretty important when you look at that growth rate of Allied and Infiltrator and how that mixes us up from a margin and profitability perspective.
Scott A. Cottrill: Yeah. So again, price costs, you see it in our EBITDA waterfall and our bridges for the quarter and year-to-date period. It's obviously something that we always look at and try to gauge. I mean, we have a pretty good forecasting process. We call it our LE, our latest estimate, so it's constantly something that we look at. But to Scott's point, it's not just a resin cost environment that drives our pricing and/or profitability model. So that volume side of the house, that demand side of the house, that mix side of the house, comes in pretty important when you look at that growth rate of Allied and Infiltrator and how that mixes us up from a margin and profitability perspective.
Yeah, So again price cost you see it in our EBITDA waterfall and our bridges for the quarter and year to date period.
Speaker #1: we look And then we roll it forward based on that demand forecast . And then again , like I mentioned , that mix of allied products and infiltrator that tend to grow at kind of two x the pipe business that really us mixes up .
Obviously, it's something that we always looked at and tried to gauge I mean, we we have a pretty good forecasting process, we call. It our L. E. Our latest estimate so it's constantly something that we look at but to Scott's point.
Speaker #1: So those all go into it and are the drivers for that margin expansion story . I would add one other thing to that , Scott , is , you know , we 16 , 18 months ago , you know , we started a lot of self-help programs across the company .
Scott Barber: I would add one other thing to that, Scott, is, you know, we 16, 18 months ago, you know, we started a lot of self-help programs-
Scott Barbour: I would add one other thing to that, Scott, is, you know, we 16, 18 months ago, you know, we started a lot of self-help programs-
It's not just a resin cost environment that drives our pricing <unk> profitability model.
Scott Cottrill: Mm-hmm.
Scott Cottrill: Mm-hmm.
Scott Barber: across the company, and it, and it was in materials, conversion, logistics, recycling, the Infiltrator, you know, work at Orenco in particular. I mean, all that stuff, you know, gained momentum as we've gone through these three quarters.
Scott Barbour: across the company, and it, and it was in materials, conversion, logistics, recycling, the Infiltrator, you know, work at Orenco in particular. I mean, all that stuff, you know, gained momentum as we've gone through these three quarters.
Speaker #1: And and it was in materials conversion , logistics , recycling , the infiltrator , you know , work at a renco in particular .
So that volume side of the house that demand side of the house that mix side of the house comes in pretty important when you look at that growth rate of Allied and infiltrator and how that mixes us up from a margin and profitability perspective, and then all of the self help initiatives that we've got going on within manufacturing transportation.
Speaker #1: I mean , all that stuff , you know , gained momentum as we've gone through these , these three quarters and we've seen that contribute .
Scott Cottrill: Yeah.
Scott Cottrill: Yeah.
Scott Barber: And we've seen that contribute, and I think that gave us some confidence to increase the margins as we looked at this back half of the year, which is our toughest part of the year.
Scott Barbour: And we've seen that contribute, and I think that gave us some confidence to increase the margins as we looked at this back half of the year, which is our toughest part of the year.
Scott A. Cottrill: And then all the self-help initiatives that we've got going on within manufacturing, transportation, and then obviously within SG&A. So, specifically to your question, I'm not gonna get into sequentially kind of where we are, but I would just tell you, through the waterfalls, it's been a nice, you know, driver of profitability this year. And then we always look at that in our forecast, as well as all the other movers, when setting our guide and our targets, so...
Scott A. Cottrill: And then all the self-help initiatives that we've got going on within manufacturing, transportation, and then obviously within SG&A. So, specifically to your question, I'm not gonna get into sequentially kind of where we are, but I would just tell you, through the waterfalls, it's been a nice, you know, driver of profitability this year. And then we always look at that in our forecast, as well as all the other movers, when setting our guide and our targets, so...
Speaker #1: And I think that gave us some confidence to to increase that . The margins as we looked at this back half of the year , which is our toughest part of the year , I mean , the fourth quarter is our toughest quarter .
And then obviously within SG&A so.
David Tarantino: Right.
David Tarantino: Right.
Scott Barber: I mean, the fourth quarter is our toughest quarter. We wanna be, you know, pretty conservative about what we predict or see coming from a profitability standpoint. But those programs, which a lot of people contributed to, I think, worked better than we thought they were gonna work. And it was across lots of different categories of stuff, even some categories we didn't expect, that were contributing nicely. And, you know, this kinda, I think a quarter like we just had isn't just the result of one, you know, kind of, one set of activities. It builds up, and that's why I kind of bring that up.
Scott Barbour: I mean, the fourth quarter is our toughest quarter. We wanna be, you know, pretty conservative about what we predict or see coming from a profitability standpoint. But those programs, which a lot of people contributed to, I think, worked better than we thought they were gonna work. And it was across lots of different categories of stuff, even some categories we didn't expect, that were contributing nicely. And, you know, this kinda, I think a quarter like we just had isn't just the result of one, you know, kind of, one set of activities. It builds up, and that's why I kind of bring that up.
Specifically to your question.
Im going to hit in the sequentially kind of where we are but I would just tell you through the waterfall is it's been a nice.
Speaker #1: We're always we want to you know , pretty be , conservative what we predict or see coming from a profitability standpoint . But those programs , which a lot of people contributed to , I think worked better than we thought they were going to work .
Yeah driver of profitability. This year and then we always look at that in our forecast as well as all the other movers when when setting our guide and our targets.
Speaker #1: And and it it was across lots of different categories of stuff , even , even even some , some , some categories . We didn't expect .
[Analyst] (Deutsche Bank): Understood. Thank you.
Collin Verron: Understood. Thank you.
Understood. Thank you.
Okay.
Operator: Our next question comes from David Tarantino with KeyBanc Capital Markets. Your line is open. Please go ahead.
Operator: Our next question comes from David Tarantino with KeyBanc Capital Markets. Your line is open. Please go ahead.
Our next question comes from David Tarantino with Keybanc capital markets. Your line is open. Please go ahead.
Speaker #1: But we're contributing nicely and you know , this , this kind of I think a quarter like we just had isn't just the result of one , you know , kind of one set of activities .
David Edmund Tarantino: Hey, good morning, everyone.
David Tarantino: Hey, good morning, everyone.
Hey, good morning, everyone.
Donald Scott Barbour: Good morning.
D. Scott Barbour: Good morning.
Scott A. Cottrill: Good morning.
Scott A. Cottrill: Good morning.
Good morning, good morning, good afternoon.
David Edmund Tarantino: To tie off the discussion on margins, you're still raising the margins despite NDS having a lower margin profile, if I'm not mistaken. Seems like a lot of this is better mix, but could you walk us through on what's giving the confidence here and how you think about expanding margins moving forward as NDS contributes more meaningfully?
David Tarantino: To tie off the discussion on margins, you're still raising the margins despite NDS having a lower margin profile, if I'm not mistaken. Seems like a lot of this is better mix, but could you walk us through on what's giving the confidence here and how you think about expanding margins moving forward as NDS contributes more meaningfully?
Discussion on margins.
Speaker #1: It builds up . And that's why I kind of bring that up .
Still raising the margins despite.
David Tarantino: Okay, great. That's helpful. And maybe could you give us a better picture of the demand trends, specifically within pipe? Sounds like pricing is largely stable, but could you give some color on the sales declines here versus the more positive trends elsewhere in the business?
David Tarantino: Okay, great. That's helpful. And maybe could you give us a better picture of the demand trends, specifically within pipe? Sounds like pricing is largely stable, but could you give some color on the sales declines here versus the more positive trends elsewhere in the business?
And yes, having a lower margin profile, if I'm not mistaken it seems like a lot of this is better mix, but could you walk us through on what's giving the confidence here and how you think about expanding margins moving forward as India's contributes more meaningfully.
Speaker #13: Okay , great . That's helpful . And maybe could you give us a better picture of the demand trends specifically within pipe ? Sounds like pricing is largely stable , but could you give some color on the sales declines here versus the more positive trends elsewhere in the business ?
Scott Barber: Yeah, I would say that. This is Scott Barber again. You know, our polypropylene pipe, what we call our HP pipe, selling quite well. Selling quite well. And, you know, those are share gains. Those are conversions from concrete. We have that specified very nicely in the high-growth geographies of the country, primarily. So that's growing nicely. Our black dual wall N-12 pipe is kind of riding along at the market, maybe a little bit better than the market. The downdraft that we're experiencing in pipe, in particular, are the agriculture segments, which although had a good year-over-year quarter, has been tough, you know, year to date.
Scott Barbour: Yeah, I would say that. This is Scott Barber again. You know, our polypropylene pipe, what we call our HP pipe, selling quite well. Selling quite well. And, you know, those are share gains. Those are conversions from concrete. We have that specified very nicely in the high-growth geographies of the country, primarily. So that's growing nicely. Our black dual wall N-12 pipe is kind of riding along at the market, maybe a little bit better than the market. The downdraft that we're experiencing in pipe, in particular, are the agriculture segments, which although had a good year-over-year quarter, has been tough, you know, year to date.
Scott A. Cottrill: Starts with that mix, right? We talked about the Infiltrator and the Allied Products segments being 50% adjusted gross margin or greater businesses. So it starts with that mix. It also, you know, about 65-70% of our cost of sales, you know, sits on our balance sheet. So we know how that's gonna roll out here over the next two to three months. Obviously, the mix of the products that we sell and the segments that drive that are important to try to get right and kind of gauge that in. So that would be the driver of the margin expansion story as we look forward. It's what's on the balance sheet, you know, what's gonna be rolling off.
Scott A. Cottrill: Starts with that mix, right? We talked about the Infiltrator and the Allied Products segments being 50% adjusted gross margin or greater businesses. So it starts with that mix. It also, you know, about 65-70% of our cost of sales, you know, sits on our balance sheet. So we know how that's gonna roll out here over the next two to three months. Obviously, the mix of the products that we sell and the segments that drive that are important to try to get right and kind of gauge that in. So that would be the driver of the margin expansion story as we look forward. It's what's on the balance sheet, you know, what's gonna be rolling off.
It starts with that that mix right, we've talked about the <unk>.
Speaker #1: Yeah , I would that say for the Scott Barbour , again , you know , our our polypropylene pipe , what we call our HP pipe selling quite well , selling quite well .
Infiltrator and the allied product segments being 50% adjusted gross margin or greater businesses. So it starts with that mix. It also you know about 65, 70% of our cost of sales sits on our balance sheet.
Speaker #1: And you know , share those are gains . Those are conversions from concrete . We have that specified very nicely in the high growth geographies of the country .
So we know how that's going to roll out here over the next two to three months, obviously the mix of the products that we sell in that segment that drive that are important to try to get right and kind of gauge that and so that would be the driver of the margin expansion story as we look forward, it's what's on the balance sheet.
Speaker #1: Primarily . So that's growing nicely . Our black dual wall in 12 pipe is kind of riding along at the market . Maybe a little bit better than the market .
Speaker #1: The the downdraft that we're we're experiencing in pipe in particular are the agriculture segments which although had a good year over year quarter , has been had been tough .
What's going to be rolling off that's not just the resin cost that's our manufacturing conversion costs all of those items as well that we look at and then we roll. It forward based on that demand forecast and then again like I mentioned that mix of Allied products and infiltrator that tend to grow at kind of two weeks the pipe business.
Scott A. Cottrill: That's not just resin costs, that's our manufacturing conversion costs, all of those items as well that we look at, and then we roll it forward based on that demand forecast. And then, again, like I mentioned, that mix of Allied Products and Infiltrator that tend to grow at kind of 2x the pipe business, that really mixes us up. So, those all go into it and are the drivers for that margin expansion story.
Scott A. Cottrill: That's not just resin costs, that's our manufacturing conversion costs, all of those items as well that we look at, and then we roll it forward based on that demand forecast. And then, again, like I mentioned, that mix of Allied Products and Infiltrator that tend to grow at kind of 2x the pipe business, that really mixes us up. So, those all go into it and are the drivers for that margin expansion story.
Scott Barber: And our team there has done exactly what we wanted them to do in terms of discipline in that market and had a good year relative to the prior year in terms of profitability. We sell a fair amount of that single-wall product through the DIY channel, which are all kinds of different retailers, and that market has been down, like, three years in a row. So our downdraft, I'd say we're market neutral with the black dual-wall N-12. We're gaining share with the HP product. Couldn't be happier with that one. But the single wall, some is market headwinds, some are, you know, things that we need to go do better, but that's the one that's the downdraft.
Scott Barbour: And our team there has done exactly what we wanted them to do in terms of discipline in that market and had a good year relative to the prior year in terms of profitability. We sell a fair amount of that single-wall product through the DIY channel, which are all kinds of different retailers, and that market has been down, like, three years in a row. So our downdraft, I'd say we're market neutral with the black dual-wall N-12. We're gaining share with the HP product. Couldn't be happier with that one. But the single wall, some is market headwinds, some are, you know, things that we need to go do better, but that's the one that's the downdraft.
Speaker #1: You know , year to date . And our team there has done exactly what we wanted them to do in terms of discipline in that market and had a good year relative to the prior year in terms of profitability .
Speaker #1: We sell a fair amount of that single wall product through the channel , kinds of all are are DIY which . different And that market has been down row like three years in a .
That really mixes us up so those all go into it and are the drivers for that margin expansion story I would add one other thing to that Scott is we 16 18 months ago. We started a lot of self help programs across the company and it and it was in materials conversion logistics recycling.
Donald Scott Barbour: I would add one other thing to that, Scott, is, you know, we-- 16, 18 months ago, you know, we started a lot of self-help programs across the company, and it, and it was in materials, conversion, logistics, recycling, the, the Infiltrator, you know, work at Orenco in particular. I mean, all that stuff, you know, gained momentum as we've gone through these quar- these three quarters.
D. Scott Barbour: I would add one other thing to that, Scott, is, you know, we-- 16, 18 months ago, you know, we started a lot of self-help programs across the company, and it, and it was in materials, conversion, logistics, recycling, the, the Infiltrator, you know, work at Orenco in particular. I mean, all that stuff, you know, gained momentum as we've gone through these quar- these three quarters.
Speaker #1: So our downdraft , I'd say we're market neutral with the black dual wall in 12 . We're gaining share with HP product . Couldn't be happier with that one .
Speaker #1: But the single wall some is market headwinds . Some are . are you know , Some things that we need to go do better .
The infiltrator.
Work at a renco in particular, I mean, all of that stuff you know gained momentum as we've gone through these court. These three quarters and we've seen that contribute and I think that gave us some confidence to increase.
Scott Barber: We have programs that we've been talking about through our strategic planning process this fall, that we're activating in that, very high on our priority list. Some of those things that we need to do in that segment for the pipe. So that's how we kind of look at that. We'll talk a lot about that in June when we're together. But it frustrates Scott, you know, there are elements of that pipe segment that are super, super healthy, and then these others that have some challenges that we got to get on top of.
Scott Barbour: We have programs that we've been talking about through our strategic planning process this fall, that we're activating in that, very high on our priority list. Some of those things that we need to do in that segment for the pipe. So that's how we kind of look at that. We'll talk a lot about that in June when we're together. But it frustrates Scott, you know, there are elements of that pipe segment that are super, super healthy, and then these others that have some challenges that we got to get on top of.
Speaker #1: But that's the one . That's the downdraft . And we have programs that we've been talking about through our , our our strategic planning process this fall that we're activating in that very high on our priority list .
Scott A. Cottrill: Yeah.
Scott A. Cottrill: Yeah.
Donald Scott Barbour: We've seen that contribute, and I think that gave us some confidence to increase the margins as we looked at this back half of the year, which is our toughest part of the year.
D. Scott Barbour: We've seen that contribute, and I think that gave us some confidence to increase the margins as we looked at this back half of the year, which is our toughest part of the year.
Speaker #1: Some of those things that we we need to do in that segment for the pipe . So that's how we kind of look at that .
The margins as we looked at the back half of the year, which is our toughest part of the year in the fourth quarter is our toughest quarter, we're always tinder, we want to be.
Scott A. Cottrill: Right.
Scott A. Cottrill: Right.
Donald Scott Barbour: I mean, the fourth quarter is our toughest quarter. We're always, we want to be, you know, pretty conservative about what we predict or see coming from a profitability standpoint. But those programs, which a lot of people contributed to, I think worked better than we thought they were gonna work. And it was across lots of different categories of stuff, even some categories we didn't expect that were contributing nicely. And you know, this kind of, I think a quarter like we just had isn't just the result of one, you know, kind of one set of activities. It builds up, and that's why I kind of bring that up.
D. Scott Barbour: I mean, the fourth quarter is our toughest quarter. We're always, we want to be, you know, pretty conservative about what we predict or see coming from a profitability standpoint. But those programs, which a lot of people contributed to, I think worked better than we thought they were gonna work. And it was across lots of different categories of stuff, even some categories we didn't expect that were contributing nicely. And you know, this kind of, I think a quarter like we just had isn't just the result of one, you know, kind of one set of activities. It builds up, and that's why I kind of bring that up.
Speaker #1: We'll talk a lot about that . And in June when we're together , but there it frustrates Scott . You know , there are elements of that pipe segment that are super , super healthy .
Pretty conservative about what we predict or see coming from a profitability standpoint, but those programs, which a lot of people, but contributed to I think works better than we thought they were going to work.
Speaker #1: And then these these others that have some challenges . And we got to get on top of .
David Tarantino: Okay, great. Thanks for the color, guys.
David Tarantino: Okay, great. Thanks for the color, guys.
Speaker #13: Okay . Great . Thanks for the color guys .
And it is.
Operator: There are no further questions at this time. I will now turn the call back to Scott Barber for closing remarks.
Operator: There are no further questions at this time. I will now turn the call back to Scott Barber for closing remarks.
It was across lots of different categories of stuff, even at even even some hum.
Speaker #2: no There are further questions at this time . I will now turn the call back to Scott Barber for closing remarks .
Categories that we didn't expect that we're contributing nicely.
Scott Barber: All right. Thank you very much. Lots of great questions. We appreciate the chance to give some color on the business and what's going on. You know, I kind of said it there, a lot, a lot of what we have seen this year, particularly in these last two quarters, is really good performance. We think significantly outpacing our industry and competitors and all that stuff, but it's a result of work we've been doing over the last year and a half or two years. Whether they be acquisitions or new products, like the tank and the active treatment that Craig has been working on for a long time. In the ADS side, it's the new StormTech products. It's the new Nyloplast products. There are some things underneath that that you guys would never see that are growing very nicely for us.
Scott Barbour: All right. Thank you very much. Lots of great questions. We appreciate the chance to give some color on the business and what's going on. You know, I kind of said it there, a lot, a lot of what we have seen this year, particularly in these last two quarters, is really good performance. We think significantly outpacing our industry and competitors and all that stuff, but it's a result of work we've been doing over the last year and a half or two years. Whether they be acquisitions or new products, like the tank and the active treatment that Craig has been working on for a long time. In the ADS side, it's the new StormTech products. It's the new Nyloplast products. There are some things underneath that that you guys would never see that are growing very nicely for us.
Speaker #1: All right . Thank you very much . We lots of great questions . We appreciate the chance to to give some color on the business and what's going on .
And you.
This is kind of I think a quarter like we just had isn't just the result of one.
You know kind of one set of activities.
Speaker #1: You know , I kind of said it there a lot a lot of what we have seen this year , particularly in these last two quarters , are is really good performance .
It builds up and that's why I kind of bring that up.
David Edmund Tarantino: Okay, great. That's helpful. And maybe could you give us a better picture of the demand trends specifically within pipe? Sounds like pricing is largely stable, but could you give some color on the sales declines here versus the more positive trends elsewhere in the business?
David Tarantino: Okay, great. That's helpful. And maybe could you give us a better picture of the demand trends specifically within pipe? Sounds like pricing is largely stable, but could you give some color on the sales declines here versus the more positive trends elsewhere in the business?
Okay, Great that's helpful.
Speaker #1: We think significantly outpacing our industry and competitors and all that stuff . But it's a result of work we've been doing over the last year and a half or two years .
Maybe could you give us a better picture of the demand trend specifically within pipe. It sounds like pricing is largely stable, but could you give some color on the sales declines here versus the more positive trends elsewhere in the business.
Speaker #1: Whether they be acquisitions or new products like the tank and the active treatment that Craig has been working on for a long time .
Donald Scott Barbour: Yeah, I would say that. This is Scott Barbour again. You know, our polypropylene pipe, what we call our HP pipe, selling quite well, selling quite well. And, you know, those are share gains, those are conversions from concrete. We have that specified very nicely in the high-growth geographies of the country, primarily. So that's growing nicely. Our black dual wall 12-inch pipe is kind of riding along at the market, maybe a little bit better than the market. The downdraft that we're experiencing in pipe, in particular, are the agriculture segments, which although had a good year-over-year quarter, has been tough, you know, year to date.
D. Scott Barbour: Yeah, I would say that. This is Scott Barbour again. You know, our polypropylene pipe, what we call our HP pipe, selling quite well, selling quite well. And, you know, those are share gains, those are conversions from concrete. We have that specified very nicely in the high-growth geographies of the country, primarily. So that's growing nicely. Our black dual wall 12-inch pipe is kind of riding along at the market, maybe a little bit better than the market. The downdraft that we're experiencing in pipe, in particular, are the agriculture segments, which although had a good year-over-year quarter, has been tough, you know, year to date.
Yes, I would say that.
For this is Scott Barbour again.
Speaker #1: In the ads side , it's the new storm tech products . It's the new needle products . And some things underneath that that , that , that you guys would never see that are growing very nicely for It's us .
Our our polypropylene pipe, what we call our HP pipe selling quite well selling quite well and you know those are share gains those are conversions from concrete we had that specified very nicely in the high growth geographies of the country are.
Scott Barber: It's the HP Pipe. It's Brett's reconfiguration of some of our sales activities. So there's a lot of work going on. We're really proud of how it's coming to fruition in our results here. And we're super excited about the NDS acquisition. As many of you know, we worked on that for a long time, had our eyes on that for a long time. So Monday was quite a nice day to finally get that closed. And we're gonna be out there with that team next week, and I know it's gonna be an equally successful kind of journey with them as some of these other things that we've done. So we appreciate your attention, and we look forward to talking to you later or seeing you around soon. Bye-bye.
Scott Barbour: It's the HP Pipe. It's Brett's reconfiguration of some of our sales activities. So there's a lot of work going on. We're really proud of how it's coming to fruition in our results here. And we're super excited about the NDS acquisition. As many of you know, we worked on that for a long time, had our eyes on that for a long time. So Monday was quite a nice day to finally get that closed. And we're gonna be out there with that team next week, and I know it's gonna be an equally successful kind of journey with them as some of these other things that we've done. So we appreciate your attention, and we look forward to talking to you later or seeing you around soon. Bye-bye.
Speaker #1: the HP pipe . It's our Brett's activities . sales So work of some of reconfiguration there's a lot of really going on . We're proud of it's how it's it's coming to fruition in in our results here and we're super excited about the India's acquisition .
Primarily.
So that's growing nicely.
Our black.
Dual wall in 12 pipe.
Is it kind of riding along at the market, maybe a little bit better than the market.
The downdraft that where we're experiencing in pipe in particular are the agriculture segments, which although had a good year over year quarter. It's been has been tough you know year to date and our team. There has done exactly what we wanted them to do in terms of discipline in that market and.
Speaker #1: As many of you know , we we worked on that for a long time , had our eyes on that for a long time .
Speaker #1: So Monday was quite a nice day to finally get that closed . And we're going to be out there with that team next week .
Donald Scott Barbour: And our team there has done exactly what we wanted them to do in terms of discipline in that market and had a good year relative to the prior year in terms of profitability. We sell a fair amount of that single wall product through the DIY Channel, which are all kinds of different retailers, and that market has been down, like, three years in a row. So our downdrafts, I'd say we're market neutral with the black dual wall, N-12. We're gaining share with the HP product. Couldn't be happier with that one. With the single wall, some is market headwinds, some are, you know, things that we need to go do better, but that's the one that's the downdraft.
D. Scott Barbour: And our team there has done exactly what we wanted them to do in terms of discipline in that market and had a good year relative to the prior year in terms of profitability. We sell a fair amount of that single wall product through the DIY Channel, which are all kinds of different retailers, and that market has been down, like, three years in a row. So our downdrafts, I'd say we're market neutral with the black dual wall, N-12. We're gaining share with the HP product. Couldn't be happier with that one. With the single wall, some is market headwinds, some are, you know, things that we need to go do better, but that's the one that's the downdraft.
Speaker #1: And I and I know it's going to be a equally successful kind of journey with them of these as some other we've done things that .
And it had a good year relative to the prior year in terms of profitability, we sell a fair amount of that single wall product through the DIY channel, which are all kinds of different retailers and that market has been down like three years in a row.
Speaker #1: So we appreciate your attention and we look forward to talking to you later or seeing you around soon . Bye bye .
Operator: This concludes today's call. Thank you for attending. You may now disconnect.
Operator: This concludes today's call. Thank you for attending. You may now disconnect.
So our downdraft, I'd say where market neutral with the black dual wall in 12, we're gaining share with the HP product couldn't be happier with that one with a single wall. Some as market headwinds. Some are some are you know things that we need to go do better but that's the one that's the down draft and we have <unk>.
Donald Scott Barbour: We have programs that we've been talking about through our strategic planning process this fall, that we're activating in that, very high on our priority list, some of those things that we need to do in that segment for the pipe. So that's how we kind of look at that. We'll talk a lot about that in June when we're together, but there it frustrates Scott, you know, there are elements of that pipe segment that are super, super healthy, and then these others that have some challenges that we got to get on top of.
D. Scott Barbour: We have programs that we've been talking about through our strategic planning process this fall, that we're activating in that, very high on our priority list, some of those things that we need to do in that segment for the pipe. So that's how we kind of look at that. We'll talk a lot about that in June when we're together, but there it frustrates Scott, you know, there are elements of that pipe segment that are super, super healthy, and then these others that have some challenges that we got to get on top of.
Programs that we've been talking about through our strategic planning process. This fall that we're activating in that very high on our priority list.
Some of those things that we need to do in that segment for the pipe. So that's how we kind of look at that we'll talk a lot about that and in June when we're together but.
There it frustrates Scott Yeah. There are elements of that pipe segment that are Super Super healthy and then these these others that have some challenges and we got to get on top off.
Yeah.
David Edmund Tarantino: Okay, great. Thanks for the color, guys.
David Tarantino: Okay, great. Thanks for the color, guys.
Okay, great. Thanks for the color guys.
[noise] there are no further questions at this time I will now turn the call back to Scott Barbour for closing remarks.
Operator: There are no further questions at this time. I will now turn the call back to Scott Barbour for closing remarks.
Operator: There are no further questions at this time. I will now turn the call back to Scott Barbour for closing remarks.
Donald Scott Barbour: All right. Thank you very much. We have lots of great questions. We appreciate the chance to give some color on the business and what's going on. You know, I kind of said it there, a lot of what we have seen this year, particularly in these last two quarters, is really good performance. We think significantly outpacing our industry and competitors and all that stuff, but it's a result of work we've been doing over the last year and a half or two years, whether they be acquisitions or new products, like the tank and the active treatment that Craig has been working on for a long time. In the ADS side, it's the new StormTech products. It's the new Nyloplast products. There's some things underneath that that you guys would never see that are growing very nicely for us.
Operator: All right. Thank you very much. We have lots of great questions. We appreciate the chance to give some color on the business and what's going on. You know, I kind of said it there, a lot of what we have seen this year, particularly in these last two quarters, is really good performance. We think significantly outpacing our industry and competitors and all that stuff, but it's a result of work we've been doing over the last year and a half or two years, whether they be acquisitions or new products, like the tank and the active treatment that Craig has been working on for a long time. In the ADS side, it's the new StormTech products. It's the new Nyloplast products. There's some things underneath that that you guys would never see that are growing very nicely for us.
Alright. Thank you very much we got lots of great questions. We appreciate the chance to give some color on the business and in what's going on.
There a lot a lot of what we have seen this year, particularly in these last two quarters are really good performance, we think significantly outpacing our industry and competitors and all of that stuff, but it's the result of work we've been doing over the last year and a half or two years whether.
Whether they be acquisitions or new products like the tank in the active treatment that Craig has been working on for a long time in the ADM side, it's the new storm Tech products. That's the new novel class products. There's some things underneath that that that that you guys would never see that are growing very nicely for us it's the H P.
Donald Scott Barbour: It's the HP pipe. It's Brett's reconfiguration of some of our sales activities. So there's a lot of work going on. We're really proud of the how it's coming to fruition in our results here. And we're super excited about the NDS acquisition. As many of you know, we worked on that for a long time, had our eyes on that for a long time. So Monday was quite a nice day to finally get that closed, and we're gonna be out there with that team next week, and I know it's gonna be an equally successful kind of journey with them as some of these other things that we've done. So we appreciate your attention, and we look forward to talking to you later, or seeing you around soon. Bye-bye.
Operator: It's the HP pipe. It's Brett's reconfiguration of some of our sales activities. So there's a lot of work going on. We're really proud of the how it's coming to fruition in our results here. And we're super excited about the NDS acquisition. As many of you know, we worked on that for a long time, had our eyes on that for a long time. So Monday was quite a nice day to finally get that closed, and we're gonna be out there with that team next week, and I know it's gonna be an equally successful kind of journey with them as some of these other things that we've done. So we appreciate your attention, and we look forward to talking to you later, or seeing you around soon. Bye-bye.
It's Brett reconfiguration of some of our sales activities. So there's a lot of work going on we're really proud of that.
It's.
Hum.
Coming to fruition.
In in our results here and.
We're super excited about the NDS acquisition as many of you know we worked on that for a long time had our eyes on that for a long time. So Monday was quite a nice day to finally get that closed and we're gonna be out there with that team next week and I and I know, it's gonna be a equally successful.
The journey with them as some of these other things that we've done.
So we appreciate your attention and we look forward to talking to you later, our senior around soon goodbye.
