Advanced Drainage Systems Inc WMS
Q1 2011 Earnings Call Transcript

Transcript Call Date 11/01/2010

Operator: Ladies and gentlemen, thank you for standing by. Welcome to the WMS Industries Fiscal 2011 First Quarter Results Conference Call. During the presentation, all participants will be in a listen-only mode. Afterwards you'll be invited to participate in a question-and-answer session. As a reminder, today's conference call, November 1, 2010, is being recorded.

I would now like to turn the call over to Bill Pfund, Vice President of Investor Relations for WMS. Please go ahead.

William Pfund - VP, IR: Thank you, Sean. Good afternoon, everyone, and welcome to WMS Industries conference call to discuss our fiscal 2011 first quarter results. With me are Brian Gamache, Chairman and Chief Executive Officer; Orrin Edidin, President; and Scott Schweinfurth, Executive Vice President, Chief Financial Officer and Treasurer.

Before we start, let me review our safe harbor language. Our call today contains forward-looking statements concerning the outlook for WMS and future business conditions. These statements are based on currently available information and involve certain risks and uncertainties. The Company's actual results may differ materially from those anticipated in the forward-looking statements and can be impacted by the factors described under 'Item 1. Business Risk Factors' in the Company's Annual Report on Form 10-K for the year ended June 30, 2010 and in our more recent reports filed with the SEC. The forward-looking statements made on this call and webcast, the archived version of the webcast and in any transcripts of this call are only made as of this date, November 1, 2010.

In addition, our call also contains non-GAAP measures that adjust our fiscal first quarter diluted earnings per share, operating income and operating margin for the facility closure cost. Regulation G reconciliations to the most appropriate GAAP measures and related disclosures can be found in the supplemental tables that are part of today's press release.

Now, let me turn the call over to Brian.

Brian R. Gamache - Chairman and CEO: Thank you, Bill, and good afternoon, everyone. Today, WMS reported fiscal first quarter total revenue of $187 million, a year-over-year increase of 13% or $22 million. These results were above expectations, and again, clearly, demonstrate that with great product we can capture a high share of the limited capital dollars that our customers are willing to spend.

Total product sales revenues were up 25% and reflects strong demand for the high earning performance of our BLUEBIRD xD cabinet, coupled with the ongoing strong player appeal for the innovative game content on both our BLUEBIRD xD and BLUEBIRD 2 cabinets.

Earnings per share for the fiscal 2011 first quarter were $0.33, and without the impact of the $0.04 facility closure charge, our adjusted earnings per share were $0.37 per diluted share.

Cash flow from operating activities was $19 million, a $29 million improvement compared with a net cash use of $10 million a year ago. WMS is clearly getting stronger by continuing to focus our development efforts on the creation of innovative products that are both high earning and differentiated, which in turn drives our growing ship share and our higher average selling price.

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