Advanced Drainage Systems Inc WMS
Q3 2012 Earnings Call Transcript

Transcript Call Date 04/30/2012

Operator: Thank you for standing by and welcome to the WMS Industries' Fiscal 2012 Third Quarter Conference Call. During the presentation, all participants will be in a listen-only mode. Afterwards, you will be invited to participate in the question-and-answer session. As a reminder, today's conference call, on April 30, 2012 is being recorded.

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

William Pfund - VP, IR: Thank you, operator. Before beginning the review of our financial results and operating progress, I'd like to remind everybody that 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 depending on the factors described under Item 1. Business and Item 1A. Risk Factors, in the Company's Annual Report on Form 10-K for the year ended June 30, 2011 and in our more recent press releases and 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, April 30, 2012.

This afternoon, Brian Gamache, Chairman and Chief Executive Officer, will provide an overview of recent milestones and of the third quarter results, followed by Scott Schweinfurth, our CFO; and Orrin Edidin, WMS' President and then we'll open the call up for your questions.

Now let me turn the call over to Brian.

Brian R. Gamache - Chairman and CEO: Thanks, Bill. Good afternoon, everyone. WMS' fiscal third quarter results demonstrate further operating progress and quarterly sequential improvement in financial results.

For the March 2012 quarter WMS generated total revenue of $176 million compared to $193 million a year ago. Our revenues increased 9% or $14 million on a quarterly sequential basis. With a significantly improved gross profit margin, and continued cost containment our operating margin grew sequentially to 18%, and was about flat with the March 2011 quarter on less revenue. As a result, both operating income and diluted earnings per share increased almost 50% on a quarterly sequential basis from the December 2011 quarter.

With EPS excluding the $0.02 per share second quarter benefit of the litigation settlement going from $0.27 per share to $0.40 per diluted share, and cash flow confirms our operating progress as cash flow generated from operating activities is up 6% for the nine months from the comparable period a year ago.

Our fiscal third quarter operating results reflect ongoing progress consistent with the sequential goals we set early this fiscal year, but investors should also note several key milestones that occurred during the quarter. We believe these milestones highlight the meaningful ongoing progress we are making with our strategies to build a foundation for steady and sustainable long-term growth.

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