Advanced Drainage Systems, Inc. (NYSE: WMS)

Advanced Drainage Systems, Inc. is a leading manufacturer of innovative water management solutions, specializing in the stormwater and onsite septic wastewater industries. The company provides superior drainage solutions for construction and agriculture markets, catering to residential, non-residential, infrastructure, and agriculture applications. ADS has established a leading position in many end markets by leveraging its national sales and distribution platform, market share model, industry-acclaimed engineering support, product breadth and scale, and manufacturing excellence. The company's approach to water management focuses on managing the lifecycle of a raindrop from the moment it hits the ground until it is released back into the ecosystem. ADS's product portfolio is built around four steps of this lifecycle: Capture, Conveyance, Storage, and Treatment, offering environmentally friendly solutions that safely and efficiently manage stormwater.

ADS generates revenue through the design, manufacture, and marketing of a comprehensive line of high-performance thermoplastic corrugated pipe and related water management products. The company's primary products include single, double, and triple-wall corrugated polypropylene and polyethylene pipe (Pipe), plastic leachfield chambers and systems, septic tanks and accessories (Infiltrator), and a variety of additional water management products (Allied Products & Other). These products are used across a broad range of end markets and applications, including residential, non-residential, infrastructure, and agriculture. The company's customer base is diversified across these markets, with a majority of sales made through distributors, including many of the largest national and independent waterworks distributors. ADS also maintains relationships with major national retailers, buying groups, and co-ops, further expanding its market reach.

• Pipe: This segment includes a range of products such as N-12 dual wall corrugated HDPE pipe, HP Storm pipe, SaniTite HP pipe, single wall corrugated HDPE pipe, and triple wall corrugated pipe and smoothwall HDPE pipe. These products are used in storm sewer and drainage markets, agricultural drainage, highway edge drains, septic systems, and other construction applications. The segment caters to residential, non-residential, infrastructure, and agriculture markets.

• Infiltrator: This segment focuses on highly engineered plastic chambers, synthetic aggregate leachfields, combined treatment and dispersal systems, plastic tanks, advanced treatment systems, and related accessories used in septic systems and decentralized commercial wastewater treatment systems. Key products include Quick4, Quick5, ARC line of septic leachfield chambers, EZflow synthetic aggregate bundles, Combined Treatment and Dispersal Products (AeroFin, Advanced Enviro-Septic, Enviro-Septic, Advanced Treatment Leachfield), and Tank Products (IM-Series and CM-Series septic tanks). The segment also includes Residential and Commercial Advanced Treatment Products, General Onsite Products, Orenco Controls, and Orenco Composites. This segment serves the onsite septic market, which is heavily reliant on rural homes and communities without access to centralized sewer systems.

• Allied Products & Other: This segment produces a range of complementary products to the Pipe segment, including storm retention/detention and septic chambers (StormTech and Cultec chambers), structures (Nyloplast PVC drainage structures), fittings, water quality filters and separators, and other products such as ARC, BioDiffuser, Contactor, and Recharger chambers. These products are used in non-residential, residential, and municipal site development, road and highway construction, landscaping, recreational, industrial, and mechanical applications. The segment also includes geotextile products, drainage grates, and other complementary products distributed through resale agreements.

ADS holds a leading position in the stormwater and onsite septic wastewater industries, competing against concrete pipe, corrugated steel pipe, PVC pipe producers, and other HDPE pipe producers. The company's competitive advantages include its national footprint, strong local presence, broad product offering, technical knowledge and expertise, customer and supplier relationships, reliability and accuracy of service, effective use of technology, delivery capabilities and timeliness, pricing of products, and the provision of credit. ADS's products are generally lighter, more durable, more cost-effective, and easier to install than comparable alternatives made with traditional materials. The company's extensive network of manufacturing and distribution facilities provides a critical cost advantage, enabling efficient transportation of products to customers and end users, promoting faster product shipments due to proximity to delivery locations.

ADS serves a large, active customer base of approximately 16,000 customers, with a majority of sales made through distributors, including many of the largest national and independent waterworks distributors. The company also maintains relationships with major national retailers, buying groups, and co-ops, further expanding its market reach. Specific customers mentioned include Ferguson Enterprises, which accounted for 14.3% of fiscal 2025 net sales, and Core & Main, Inc., which accounted for 12.7% of fiscal 2025 net sales. The customer base is diversified across the range of end markets that ADS serves, including residential, non-residential, infrastructure, and agriculture markets.