Advanced Drainage Systems, Inc. (NYSE:WMS) Q2 2023 Earnings Conference Call November 3, 2022 10:00 AM ET
Company Participants
Mike Higgins - VP, Corporate Strategy & IR
Scott Barbour - President & CEO
Scott Cottrill - CFO
Conference Call Participants
Michael Halloran - Baird
Matthew Bouley - Barclays
Josh Pokrzywinski - Morgan Stanley
Garik Shmois - Loop Capital
Spencer Kaufman - UBS
Operator
Good morning, ladies and gentlemen, and welcome to Advanced Drainage Systems Second Quarter of Fiscal Year 2023 Results Conference Call. My name is Jason, and I am your operator for today's call. Currently, all participants are placed in listen-only mode. Later, we will conduct a question-and-answer session.
I would now like to turn the presentation over to our host for today's call, Mr. Mike Higgins, Vice President of Corporate Strategy and Investor Relations. Please go ahead.
Mike Higgins
Thank you, and good morning. With me today, I have Scott Barbour, our President and CEO; and Scott Cottrill, our CFO.
I would also like to remind you that we will discuss forward-looking statements. Actual results may differ materially from those forward-looking statements because of various factors, including those discussed in our press release and the Risk Factors identified in our Form 10-K 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.
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 and an 8-K submitted to the SEC. 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 Barbour.
Scott Barbour
Thank you, Mike, and good morning. Thank you, everyone, for joining us on today's call.
We achieved another very strong quarter of results, with the second quarter sales of $884 million and adjusted EBITDA of $263 million. Importantly, this is the fourth quarter in a row that we have covered cost pressure through favorable pricing in the third quarter in a row of margin expansion.
Sales growth of 25% was broad-based across geographies in both the construction and agriculture end markets, supported by continued strength in our priority states and Allied Products. The strongest volume growth occurred in the ADS residential and agricultural end markets. In the ADS agriculture business, we did a good job level loading deliveries, and that is shaping up for a fall season with year-over-year growth. The ADS residential business grew as homebuilders continue to develop land despite market uncertainty. We expect homebuilder land development to continue on previously acquired land and over the long-term, the lack of available home supply will continue to drive growth in this market. ADS participation in the residential market is still early in the material conversion story. So despite the pullback, residential remains a large growth opportunity for the company.