Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Dec. 31, 2017 | Jan. 31, 2018 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Dec. 31, 2017 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q3 | |
Trading Symbol | WMS | |
Entity Registrant Name | ADVANCED DRAINAGE SYSTEMS, INC. | |
Entity Central Index Key | 1,604,028 | |
Current Fiscal Year End Date | --03-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 56,261,608 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2017 | Mar. 31, 2017 |
Current assets: | ||
Cash | $ 18,407 | $ 6,450 |
Receivables (less allowance for doubtful accounts of $6,811 and $10,431, respectively) | 176,942 | 168,943 |
Inventories | 215,045 | 258,430 |
Other current assets | 4,962 | 6,743 |
Total current assets | 415,356 | 440,566 |
Property, plant and equipment, net | 410,534 | 406,858 |
Other assets: | ||
Goodwill | 103,282 | 100,566 |
Intangible assets, net | 46,439 | 51,758 |
Other assets | 37,623 | 46,537 |
Total assets | 1,013,234 | 1,046,285 |
Current liabilities: | ||
Current maturities of debt obligations | 26,833 | 37,789 |
Current maturities of capital lease obligations | 22,654 | 21,450 |
Accounts payable | 71,591 | 121,922 |
Current portion of liability-classified stock-based awards | 11,926 | |
Other accrued liabilities | 66,665 | 54,460 |
Accrued income taxes | 9,825 | 8,207 |
Total current liabilities | 197,568 | 255,754 |
Long-term debt obligations (less unamortized debt issuance costs of $3,216 and $1,723, respectively) | 260,981 | 310,849 |
Long-term capital lease obligations | 64,959 | 58,710 |
Deferred tax liabilities | 31,021 | 44,007 |
Other liabilities | 22,681 | 26,530 |
Total liabilities | 577,210 | 695,850 |
Commitments and contingencies (see Note 9) | ||
Mezzanine equity: | ||
Redeemable convertible preferred stock: $0.01 par value; 47,070 shares authorized; 44,170 shares issued; 23,463 and 24,225 shares outstanding, respectively | 293,284 | 302,814 |
Deferred compensation – unearned ESOP shares | (192,180) | (198,216) |
Redeemable noncontrolling interest in subsidiaries | 9,000 | 8,227 |
Total mezzanine equity | 110,104 | 112,825 |
Stockholders’ equity: | ||
Common stock; $0.01 par value: 1,000,000 shares authorized; 56,607 shares issued; 56,204 and 55,338 shares outstanding, respectively | 11,424 | 12,393 |
Paid-in capital | 357,684 | 755,787 |
Common stock in treasury, at cost | (7,958) | (436,984) |
Accumulated other comprehensive loss | (20,933) | (24,815) |
Retained deficit | (29,007) | (83,678) |
Total ADS stockholders’ equity | 311,210 | 222,703 |
Noncontrolling interest in subsidiaries | 14,710 | 14,907 |
Total stockholders’ equity | 325,920 | 237,610 |
Total liabilities, mezzanine equity and stockholders’ equity | $ 1,013,234 | $ 1,046,285 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2017 | Mar. 31, 2017 |
Allowance for doubtful accounts | $ 6,811 | $ 10,431 |
Unamortized debt issuance costs | $ 3,216 | $ 1,723 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 1,000,000,000 | 1,000,000,000 |
Common stock, shares issued | 56,607,000 | 56,607,000 |
Common stock, shares outstanding | 56,204,000 | 55,338,000 |
Redeemable Convertible Preferred Stock [Member] | ||
Mezzanine equity, par value | $ 0.01 | $ 0.01 |
Mezzanine equity, shares authorized | 47,070,000 | 47,070,000 |
Mezzanine equity, shares issued | 44,170,000 | 44,170,000 |
Mezzanine equity, shares outstanding | 23,463,000 | 24,225,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Statement [Abstract] | ||||
Net sales | $ 320,832 | $ 294,716 | $ 1,080,240 | $ 1,013,077 |
Cost of goods sold | 243,006 | 225,275 | 825,874 | 756,518 |
Gross profit | 77,826 | 69,441 | 254,366 | 256,559 |
Operating expenses: | ||||
Selling | 22,903 | 21,292 | 70,348 | 68,732 |
General and administrative | 23,788 | 22,719 | 74,351 | 78,429 |
Loss on disposal of assets and costs from exit and disposal activities | 1,924 | 2,138 | 10,468 | 3,077 |
Intangible amortization | 2,012 | 2,116 | 6,071 | 6,431 |
Income from operations | 27,199 | 21,176 | 93,128 | 99,890 |
Other expense: | ||||
Interest expense | 3,086 | 4,221 | 12,620 | 13,551 |
Derivative gains and other income, net | (963) | (772) | (4,456) | (5,543) |
Income before income taxes | 25,076 | 17,727 | 84,964 | 91,882 |
Income tax (benefit) expense | (7,371) | 5,986 | 15,812 | 35,528 |
Equity in net (income) loss of unconsolidated affiliates | (768) | 1,483 | (496) | 2,394 |
Net income | 33,215 | 10,258 | 69,648 | 53,960 |
Less: net income attributable to noncontrolling interest | 1,110 | 1,205 | 1,938 | 2,900 |
Net income attributable to ADS | 32,105 | 9,053 | 67,710 | 51,060 |
Accretion of redeemable noncontrolling interest | (399) | (1,141) | ||
Dividends to redeemable convertible preferred stockholders | (456) | (407) | (1,415) | (1,247) |
Dividends paid to unvested restricted stockholders | (12) | (32) | (47) | (86) |
Net income available to common stockholders and participating securities | 31,637 | 8,215 | 66,248 | 48,586 |
Undistributed income allocated to participating securities | (2,766) | (503) | (5,588) | (4,066) |
Net income available to common stockholders | $ 28,871 | $ 7,712 | $ 60,660 | $ 44,520 |
Weighted average common shares outstanding: | ||||
Basic | 55,917 | 54,557 | 55,497 | 54,354 |
Diluted | 56,459 | 55,167 | 56,124 | 55,156 |
Net income per share: | ||||
Basic | $ 0.52 | $ 0.14 | $ 1.09 | $ 0.82 |
Diluted | 0.51 | 0.14 | 1.08 | 0.81 |
Cash dividends declared per share | $ 0.07 | $ 0.06 | $ 0.21 | $ 0.18 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | |
Statement Of Income And Comprehensive Income [Abstract] | ||||
Net income | $ 33,215 | $ 10,258 | $ 69,648 | $ 53,960 |
Currency translation | (2,975) | (3,571) | 3,010 | (8,739) |
Comprehensive income | 30,240 | 6,687 | 72,658 | 45,221 |
Less: other comprehensive loss attributable to noncontrolling interest, net of tax | (1,484) | (894) | (872) | (2,961) |
Less: net income attributable to noncontrolling interest | 1,110 | 1,205 | 1,938 | 2,900 |
Total comprehensive income attributable to ADS | $ 30,614 | $ 6,376 | $ 71,592 | $ 45,282 |
Condensed Consolidated Stateme6
Condensed Consolidated Statement of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Cash Flows from Operating Activities | ||
Net income | $ 69,648 | $ 53,960 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 55,793 | 54,065 |
Deferred income taxes | (12,738) | 1,280 |
Loss on disposal of assets and costs from exit and disposal activities | 10,468 | 3,077 |
ESOP and stock-based compensation | 13,086 | 10,126 |
Amortization of deferred financing charges | 746 | 1,055 |
Fair market value adjustments to derivatives | (1,988) | (11,297) |
Equity in net (income) loss of unconsolidated affiliates | (496) | 2,394 |
Other operating activities | 12,046 | (3,249) |
Changes in working capital: | ||
Receivables | (14,817) | 29,113 |
Inventories | 44,560 | 5,298 |
Prepaid expenses and other current assets | 2,105 | (1,353) |
Accounts payable, accrued expenses, and other liabilities | (39,504) | (27,838) |
Net cash provided by operating activities | 138,909 | 116,631 |
Cash Flows from Investing Activities | ||
Capital expenditures | (35,124) | (36,504) |
Cash paid for acquisitions, net of cash acquired | (1,990) | |
Purchases of property, plant and equipment through financing | (4,116) | |
Proceeds from sale of corporate-owned life insurance | 5,959 | |
Other investing activities | (570) | (801) |
Net cash used in investing activities | (31,725) | (41,421) |
Cash Flows from Financing Activities | ||
Proceeds from Revolving Credit Facility | 397,450 | 315,400 |
Payments on Revolving Credit Facility | (431,950) | (329,400) |
Payments on Term Loan | (72,500) | (7,500) |
Proceeds from Senior Notes | 75,000 | |
Payments on Senior Notes | (25,000) | (25,000) |
Equipment financing | 4,116 | |
Debt issuance costs | (2,268) | |
Payments of notes, mortgages and other debt | (1,675) | (650) |
Payments on capital lease obligations | (18,176) | (16,373) |
Cash dividends paid | (13,511) | (11,011) |
Proceeds from exercise of stock options | 7,606 | 2,687 |
Repurchase of common stock | (7,947) | |
Other financing activities | (1,558) | (1,339) |
Net cash used in financing activities | (94,529) | (69,070) |
Effect of exchange rate changes on cash | (698) | (598) |
Net change in cash | 11,957 | 5,542 |
Cash at beginning of period | 6,450 | 6,555 |
Cash at end of period | 18,407 | 12,097 |
SUPPLEMENTAL CASH FLOW INFORMATION | ||
Cash paid for income taxes | 25,408 | 4,155 |
Cash paid for interest | 13,904 | 13,277 |
Non-cash operating, investing and financing activities: | ||
Acquisition of property, plant and equipment under capital lease and incurred lease obligations | 25,993 | $ 16,716 |
Balance in accounts payable for the acquisition of property, plant and equipment | 998 | |
Contribution of net accounts receivable to the South American Joint Venture | 2,785 | |
Payable recorded for business acquisition | $ 300 |
Condensed Consolidated Stateme7
Condensed Consolidated Statements of Stockholders' Equity (Deficit) - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock [Member] | Paid-In Capital [Member] | Common Stock in Treasury [Member] | Accumulated Other Comprehensive Loss [Member] | Retained Earnings (Deficit) [Member] | Total ADS Stockholders' Equity [Member] | Non-controlling Interest in Subsidiaries [Member] |
Beginning Balance, Value at Mar. 31, 2016 | $ 202,489 | $ 12,393 | $ 739,097 | $ (440,995) | $ (21,261) | $ (101,778) | $ 187,456 | $ 15,033 |
Beginning Balance, Shares at Mar. 31, 2016 | 153,560 | 99,123 | ||||||
Net income | 53,304 | 51,060 | 51,060 | 2,244 | ||||
Other comprehensive income (loss) | (8,739) | (5,778) | (5,778) | (2,961) | ||||
Redeemable convertible preferred stock dividends | (1,131) | (1,131) | (1,131) | |||||
Common stock dividends | (9,880) | (9,880) | (9,880) | |||||
Allocation of ESOP shares to participants for compensation | 1,944 | 1,944 | 1,944 | |||||
Exercise of common stock options | 5,602 | 4,554 | $ 1,048 | 5,602 | ||||
Exercise of common stock options, Shares | (236) | |||||||
Restricted stock awards | 368 | 161 | $ 207 | 368 | ||||
Restricted stock awards, Shares | (47) | |||||||
ESOP distribution in common stock | 6,391 | 4,641 | $ 1,750 | 6,391 | ||||
ESOP distribution in common stock, Shares | (394) | |||||||
Accretion of redeemable noncontrolling interest | (713) | (713) | (713) | |||||
Ending Balance, Value at Dec. 31, 2016 | 249,635 | $ 12,393 | 749,684 | $ (437,990) | (27,039) | (61,729) | 235,319 | 14,316 |
Ending Balance, Shares at Dec. 31, 2016 | 153,560 | 98,446 | ||||||
Beginning Balance, Value at Mar. 31, 2017 | 237,610 | $ 12,393 | 755,787 | $ (436,984) | (24,815) | (83,678) | 222,703 | 14,907 |
Beginning Balance, Shares at Mar. 31, 2017 | 153,560 | 98,222 | ||||||
Net income | 68,875 | 67,710 | 67,710 | 1,165 | ||||
Other comprehensive income (loss) | 3,010 | 3,882 | 3,882 | (872) | ||||
Redeemable convertible preferred stock dividends | (1,310) | (1,310) | (1,310) | |||||
Common stock dividends | (11,729) | (11,729) | (11,729) | |||||
Dividend paid to noncontrolling interest holder | (490) | (490) | ||||||
Allocation of ESOP shares to participants for compensation | 1,910 | 1,910 | 1,910 | |||||
Exercise of common stock options | 7,606 | $ 6 | 7,558 | $ 42 | 7,606 | |||
Exercise of common stock options, Shares | 559 | (2) | ||||||
Restricted stock awards | 2,150 | 1,801 | $ 349 | 2,150 | ||||
Restricted stock awards, Shares | 41 | (78) | ||||||
Reclassification of liability-classified awards | 13,714 | 13,714 | 13,714 | |||||
Stock-based compensation expense before related tax effects | 2,991 | 2,991 | 2,991 | |||||
ESOP distribution in common stock | 9,530 | $ 2 | 7,775 | $ 1,753 | 9,530 | |||
ESOP distribution in common stock, Shares | 192 | (394) | ||||||
Retirement of common stock held in treasury | $ (977) | (433,852) | $ 434,829 | |||||
Retirement of common stock held in treasury, Shares | (97,745) | (97,745) | ||||||
Common stock repurchases | (7,947) | $ (7,900) | $ (7,947) | (7,947) | ||||
Common stock repurchases, Shares | 400 | 400 | ||||||
Ending Balance, Value at Dec. 31, 2017 | $ 325,920 | $ 11,424 | $ 357,684 | $ (7,958) | $ (20,933) | $ (29,007) | $ 311,210 | $ 14,710 |
Ending Balance, Shares at Dec. 31, 2017 | 56,607 | 403 |
Condensed Consolidated Stateme8
Condensed Consolidated Statements of Mezzanine Equity - USD ($) shares in Thousands, $ in Thousands | Total | Redeemable Non-controlling Interest [Member] | Redeemable Convertible Preferred Stock [Member] | Deferred Compensation - Unearned ESOP Shares [Member] | Total Mezzanine Equity [Member] |
Beginning Balance, Value at Mar. 31, 2016 | $ 7,171 | $ 310,240 | $ (205,664) | $ 111,747 | |
Beginning Balance, Shares at Mar. 31, 2016 | 24,819 | 16,448 | |||
Net income | 656 | 656 | |||
Allocation of ESOP shares to participants for compensation | $ 1,944 | $ 5,484 | 5,484 | ||
Allocation of ESOP shares to participants for Compensation, Shares | (439) | ||||
ESOP distribution in common stock | $ (6,391) | (6,391) | |||
ESOP distribution in common stock, Shares | (511) | ||||
Accretion of redeemable noncontrolling interest | 1,141 | 1,141 | |||
Ending Balance, Value at Dec. 31, 2016 | 8,968 | $ 303,849 | $ (200,180) | 112,637 | |
Ending Balance, Shares at Dec. 31, 2016 | 24,308 | 16,009 | |||
Beginning Balance, Value at Mar. 31, 2017 | 112,825 | 8,227 | $ 302,814 | $ (198,216) | 112,825 |
Beginning Balance, Shares at Mar. 31, 2017 | 24,225 | 15,863 | |||
Net income | 773 | 773 | |||
Allocation of ESOP shares to participants for compensation | 1,910 | $ 6,036 | 6,036 | ||
Allocation of ESOP shares to participants for Compensation, Shares | (483) | ||||
ESOP distribution in common stock | $ (9,530) | (9,530) | |||
ESOP distribution in common stock, Shares | (762) | ||||
Ending Balance, Value at Dec. 31, 2017 | $ 110,104 | $ 9,000 | $ 293,284 | $ (192,180) | $ 110,104 |
Ending Balance, Shares at Dec. 31, 2017 | 23,463 | 15,380 |
Condensed Consolidated Stateme9
Condensed Consolidated Statements of Stockholders' Equity (Deficit) (Parenthetical) - $ / shares | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | |
Statement Of Stockholders Equity [Abstract] | ||||
Common stock dividend per share | $ 0.07 | $ 0.06 | $ 0.21 | $ 0.18 |
Background and Summary of Signi
Background and Summary of Significant Accounting Policies | 9 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Background and Summary of Significant Accounting Policies | 1. BACKGROUND AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Description of Business - Advanced Drainage Systems, Inc. and subsidiaries (collectively referred to as “ADS” or the “Company”), incorporated in Delaware, designs, manufactures and markets high performance thermoplastic corrugated pipe and related water management products, primarily in North and South America and Europe. ADS’s broad product line includes corrugated high density polyethylene (or “HDPE”) pipe, polypropylene (or “PP”) pipe and related water management products. On August 1, 2017, ADS acquired DURASLOT, Inc., a manufacturer of linear surface drains, for $2.3 million. The acquisition included approximately $2.1 million of tax-deductible goodwill. The Company is managed based primarily on the geographies in which it operates and reports results of operations in two reportable segments: Domestic and International. Historically, sales of the Company’s products have been higher in the first and second quarters of each fiscal year due to favorable weather and longer daylight conditions accelerating construction activity during these periods. Seasonal variations in operating results may also be impacted by inclement weather conditions, such as cold or wet weather, which can delay projects. Basis of Presentation - The Company prepares its Condensed Consolidated Financial Statements in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The Condensed Consolidated Balance Sheet as of March 31, 2017 was derived from audited financial statements included in the Annual Report on Form 10-K for the year ended March 31, 2017 (“Fiscal 2017 Form 10-K”). The accompanying unaudited Condensed Consolidated Financial Statements contain all adjustments, of a normal recurring nature, necessary to present fairly its financial position as of December 31, 2017 and the results of operations and cash flows for the three and nine months ended December 31, 2017 and 2016. The interim Condensed Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements, including the notes thereto, filed in the Company’s Fiscal 2017 Form 10-K. Principles of Consolidation - The Condensed Consolidated Financial Statements include the Company, its wholly-owned subsidiaries, its majority-owned subsidiaries and variable interest entities (“VIEs”) of which the Company is the primary beneficiary. The Company uses the equity method of accounting for equity investments where it exercises significant influence but does not hold a controlling financial interest. Such investments are recorded in Other assets in the Condensed Consolidated Balance Sheets and the related equity earnings from these investments are included in Equity in net (income) loss of unconsolidated affiliates in the Condensed Consolidated Statements of Operations. All intercompany balances and transactions have been eliminated in consolidation. Recent Accounting Guidance Recently Adopted Accounting Guidance Measurement of Inventory In July 2015, the Financial Accounting Standards Board (“FASB”) issued an accounting standards update (“ASU”) which requires entities to measure most inventory at the lower of cost and net realizable value, simplifying current guidance under which an entity must measure inventory at the lower of cost or market. The determination of market value, under current guidance, is considered unnecessarily complex as there are several potential outcomes based on its definition as replacement cost, net realizable value, or net realizable value less an approximate normal profit margin. Whereas net realizable value, under the update, is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. The Company adopted this standard effective April 1, 2017. The new standard did not have a material impact on the Condensed Consolidated Financial Statements. Stock-Based Compensation In March 2016, the FASB issued an ASU which is intended to simplify certain aspects of the accounting for stock-based compensation. The Company adopted the standard on April 1, 2017. The adoption of the ASU did not have a material impact on the historical Consolidated Financial Statements. This update contains changes to the accounting for excess tax benefits, whereby excess tax benefits will be recognized in the income statement rather than in additional paid-in capital on the balance sheet. This update is expected to result in increased volatility to income tax expense in future periods dependent upon the timing of employee exercises of stock options, the price of the Company's common stock and the vesting of restricted stock awards. In addition, excess tax benefits will now be classified as operating cash flows rather than financing cash flows in the Condensed Consolidated Statements of Cash Flows. The amendment also contained potential changes to the accounting for forfeitures, whereby entities could elect to either continue to apply the previous requirement to estimate forfeitures when determining compensation expense, or to alternatively reverse the compensation expense of forfeited awards when they occur. The Company will account for forfeitures as they occur, which may result in expense volatility based on the timing of forfeitures. In addition, the update also modified the net-share settlement liability classification exception for statutory income tax withholdings, whereby the new guidance allows an employer with a statutory income tax withholding obligation to withhold shares with a fair value up to the maximum statutory tax rate in the employee’s applicable jurisdiction. The Company included this provision in awards issued in fiscal 2017 and modified previously issued awards on April 1, 2017. See “Note 11. Stock-Based Compensation” for further information on the modification. Recent Accounting Guidance Not Yet Adopted Revenue Recognition - In May 2014, the FASB issued an ASU which amends the guidance for revenue recognition. This standard contains principles that will require an entity to recognize revenue to depict the transfer of goods and services to customers at an amount that an entity expects to be entitled to in exchange for goods or services. The standard sets forth a new revenue recognition model that requires identifying the contract, identifying the performance obligations and recognizing the revenue upon satisfaction of performance obligations. In August 2015, the FASB issued an ASU that deferred the effective date of the new revenue standard for public entities to periods beginning after December 15, 2017, with early adoption permitted but not earlier than the original effective date of periods beginning after December 15, 2016. There have also been various additional accounting standards updates issued by the FASB in 2016 that further amend this new revenue standard. The updated standard permits the use of either the retrospective or cumulative effect transition method. The Company will adopt this standard effective April 1, 2018. To date, the Company has formed an internal stakeholder group to promote information sharing, communicate the new requirements of the standard, and assess the impact of the new revenue recognition model on the Company’s contracts with customers. The Company expects enhanced revenue disclosures as the result of adoption. The Company has not yet selected a transition method and is currently evaluating the impact of this standard on the Condensed Consolidated Financial Statements. Leases - In February 2016, the FASB issued an ASU which amends the guidance for leases. This standard contains principles that will require an entity to recognize most leases on the balance sheet by recording a right-of-use asset and a lease liability, unless the lease is a short-term lease that has an accounting lease term of twelve months or less. The standard also contains other changes to the current lease guidance that may result in changes to how entities determine which contractual arrangements qualify as a lease, the accounting for executory costs such as property taxes and insurance, as well as which lease origination costs will be capitalizable. The new standard also requires expanded quantitative and qualitative disclosures. This standard is effective for fiscal years beginning after December 15, 2018, including interim periods within those years, and early adoption is permitted. The standard requires the use of the modified retrospective transition method, whereby the new guidance will be applied at the beginning of the earliest period presented in the financial statements of the period of adoption. The modified retrospective transition approach includes certain practical expedients that entities may elect to apply in transition. The Company expects to adopt this standard effective April 1, 2019. The Company has implemented a new software solution to improve the process of tracking and accounting for leases under the current and new standards. The Company has not yet determined whether to apply any of the available practical expedients. The Company has begun the process of reviewing contracts under the new standard to determine the impact the new standard will have on the Condensed Consolidated Financial Statements. Measurement of Credit Losses - In June 2016, the FASB issued an ASU which provides amended guidance on the measurement of credit losses on financial instruments, including trade receivables. This standard requires the use of an impairment model referred to as the current expected credit loss model. This standard is effective for fiscal years beginning after December 15, 2019, including interim periods within those years, and early adoption is permitted for fiscal years beginning after December 15, 2018. The Company expects to adopt this standard effective April 1, 2020. The Company is currently evaluating the impact of this standard on the Condensed Consolidated Financial Statements. Cash Flow Classification - In August 2016, the FASB issued an ASU which provides amended guidance on the classification of certain cash receipts and cash payments in the statement of cash flows, including related to debt prepayment or debt extinguishment costs, contingent consideration payments made after a business combination, proceeds from the settlement of insurance claims, proceeds from the settlement of corporate-owned life insurance and distributions received from equity method investees. This update is effective for fiscal years beginning after December 15, 2017, including interim periods within those years, and early adoption is permitted. This amended guidance must be applied retrospectively to all periods presented, but may be applied prospectively if retrospective application would be impracticable. The Company expects to adopt this update effective April 1, 2018. The Company is currently evaluating the impact of this update on the Condensed Consolidated Financial Statements. Goodwill Impairment - In January 2017, the FASB issued an ASU which removes the requirement to compare the implied fair value of goodwill with its carrying amount as part of step 2 of the goodwill impairment test. As a result, under the standards update, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount and should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. The amendments are effective for annual periods beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company expects to adopt this standard effective April 1, 2018. The Company is currently evaluating the impact of this standard on the Condensed Consolidated Financial Statements. Definition of a Business - In January 2017, the FASB issued an ASU to clarify the definition of a business. The definition of a business affects many areas of accounting including acquisitions, disposals, goodwill, and consolidation. The amendments are intended to help companies and other organizations evaluate whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The amendments provide a more robust framework to use in determining when a set of assets and activities is a business. The amendments are effective for annual periods beginning after December 15, 2017, including interim periods within those periods. The Company will adopt this standard effective April 1, 2018. The new standard will not have a material impact on the Condensed Consolidated Financial Statements. Stock-Based Compensation - In May 2017, the FASB issued an ASU to clarify when modification accounting should be applied for changes to the terms or conditions of share-based payment awards. The amendments clarify that modification accounting guidance should only be applied if there is a change to the value, vesting conditions, or award classification and would not be required if the changes are considered non-substantive. The amendments are effective for annual periods beginning after December 15, 2017, including interim periods within those periods. The Company expects to adopt this standard effective April 1, 2018. The Company is currently evaluating the impact of this update on its Condensed Consolidated Financial Statements. Hedge Accounting – In August 2017, the FASB issued an ASU which expands an entity’s ability to apply hedge accounting for non-financial and financial risk components and provides a simplified approach for fair value hedging of interest rate risk. The standard also refines how entities assess hedge effectiveness. This standard is effective for fiscal years beginning after December 15, 2018, including interim periods within those years, and early adoption is permitted. The Company is currently evaluating the impact of this standard on the Condensed Consolidated Financial Statements. With the exception of the pronouncements described above, there have been no new accounting pronouncements issued or adopted since the filing of the Fiscal 2017 Form 10-K that have significance, or potential significance, to the Condensed Consolidated Financial Statements. |
Loss on Disposal of Assets and
Loss on Disposal of Assets and Costs from Exit and Disposal Activities | 9 Months Ended |
Dec. 31, 2017 | |
Discontinued Operations And Disposal Groups [Abstract] | |
Loss on Disposal of Assets and Costs from Exit and Disposal Activities | 2. The Company recorded loss on disposal of assets and costs from exit and disposal activities of $1.9 million and $10.5 million for the three and nine months ended December 31, 2017, respectively. For the three and nine months ended December 31, 2016, the Company recorded loss on disposal of assets and costs from exit and disposal activities of $2.1 million and $3.1 million, respectively. In the three months ended December 31, 2016, the Company shortened the remaining useful life of certain assets related to two manufacturing facilities, including the closing of one facility. In fiscal 2018, the Company initiated restructuring activities (the “2018 Restructuring Plan”), including closing three underutilized manufacturing facilities, reducing headcount and eliminating nonessential costs, designed to improve the Company’s cost structure. The following table summarizes the activity included in Loss on disposal of assets and costs from exit and disposal activities recorded during the three and nine months ended December 31, 2017 and 2016: Three Months Ended December 31, Nine Months Ended December 31, 2017 2016 2017 2016 (in thousands) Accelerated depreciation $ — $ — $ 3,561 $ — Plant severance 1,021 — 1,848 — Headcount reduction — — 2,577 — Other restructuring activities 56 — 56 — Total 2018 Restructuring Plan activities $ 1,077 $ — $ 8,042 $ — Loss on other disposals and partial disposals of property, plant and equipment 847 2,138 2,426 3,077 Total loss on disposal of assets and costs from exit and disposal activities $ 1,924 $ 2,138 $ 10,468 $ 3,077 As of December 31, 2017, the Company has a $2.8 million severance liability related to the 2018 Restructuring Plan, which is recorded in Other accrued liabilities and Other liabilities in the Condensed Consolidated Balance Sheet. |
Receivables and Allowance for D
Receivables and Allowance for Doubtful Accounts | 9 Months Ended |
Dec. 31, 2017 | |
Accounts Notes Loans And Financing Receivable Gross Allowance And Net [Abstract] | |
Receivables and Allowance For Doubtful Accounts | 3. RECEIVABLES AND ALLOWANCE FOR DOUBTFUL ACCOUNTS Receivables include trade receivables, net of an allowance for doubtful accounts, refundable income taxes and other miscellaneous receivables. Receivables at December 31, 2017 and March 31, 2017 consisted of the following: December 31, 2017 March 31, 2017 (In thousands) Trade receivables $ 159,343 $ 160,655 Refundable income taxes — 1,468 Other miscellaneous receivables 17,599 6,820 Receivables $ 176,942 $ 168,943 As of December 31, 2017, Other miscellaneous receivables includes an insurance recoverable of approximately $3.1 million, which has a corresponding liability recorded in Other accrued liabilities, and approximately $7.2 million related to the cash surrender value of officer life insurance on key senior management executives, as the Company discontinued offering this benefit. During the nine months ended December 31, 2017, the Company collected $6.0 million in proceeds from the sale of the officer life insurance. |
Inventories
Inventories | 9 Months Ended |
Dec. 31, 2017 | |
Inventory Disclosure [Abstract] | |
Inventories | 4 . Inventories as of the periods presented consisted of the following: December 31, 2017 March 31, 2017 (In thousands) Raw materials $ 43,492 $ 52,746 Finished goods 171,553 205,684 Total inventories $ 215,045 $ 258,430 There were no work-in-process inventories as of the periods presented. |
Fair Value Measurement
Fair Value Measurement | 9 Months Ended |
Dec. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurement | 5 . When applying fair value principles in the valuation of assets and liabilities, the Company is required to maximize the use of quoted market prices and minimize the use of unobservable inputs. The Company has not changed its valuation techniques used in measuring the fair value of any financial assets or liabilities during the fiscal years presented. The fair value estimates take into consideration the credit risk of both the Company and its counterparties. When active market quotes are not available for financial assets and liabilities, ADS uses industry standard valuation models. Where applicable, these models project future cash flows and discount the future amounts to a present value using market-based observable inputs including credit risk, interest rate curves, foreign currency rates and forward and spot prices for currencies. In circumstances where market-based observable inputs are not available, management judgment is used to develop assumptions to estimate fair value. Generally, the fair value of Level 3 instruments is estimated as the net present value of expected future cash flows based on internal and external inputs. Recurring Fair Value Measurements - The assets and liabilities carried at fair value as of the periods presented were as follows: December 31, 2017 Total Level 1 Level 2 Level 3 (In thousands) Assets: Derivative assets – diesel fuel contracts $ 772 $ — $ 772 $ — Derivative assets – interest rate swap 1,351 — 1,351 — Total assets at fair value on a recurring basis $ 2,123 $ — $ 2,123 $ — Liabilities: Derivative liability - interest rate swap $ 98 $ — $ 98 $ — Contingent consideration for acquisitions 640 — — 640 Total liabilities at fair value on a recurring basis $ 738 $ — $ 98 $ 640 March 31, 2017 Total Level 1 Level 2 Level 3 (In thousands) Assets: Derivative assets – diesel fuel contracts $ 179 $ — $ 179 $ — Total assets at fair value on a recurring basis $ 179 $ — $ 179 $ — Liabilities: Derivative liability - diesel fuel contracts $ 142 $ — $ 142 $ — Contingent consideration for acquisitions 1,348 — — 1,348 Total liabilities at fair value on a recurring basis $ 1,490 $ — $ 142 $ 1,348 For the nine months ended December 31, 2017 and 2016, respectively, there were no transfers in or out of Levels 1, 2 or 3. Valuation of Contingent Consideration for Acquisitions - The fair values of the contingent consideration payables for acquisitions were calculated based on a discounted cash flow model, whereby the probability-weighted future payment value is discounted to the present value using a market discount rate. The method used to price these liabilities is considered Level 3, due to the subjective nature of the unobservable inputs used to determine the fair value. Changes in the fair value of recurring fair value measurements using significant unobservable inputs (Level 3) for the periods presented were as follows: Three Months Ended December 31, Nine Months Ended December 31, 2017 2016 2017 2016 (In thousands) Balance at the beginning of the period $ 735 $ 1,997 $ 1,348 $ 2,858 Change in fair value 1 (15 ) 33 42 Payments of contingent consideration liability (96 ) (169 ) (741 ) (1,087 ) Balance at the end of the period $ 640 $ 1,813 $ 640 $ 1,813 Valuation of Debt - The carrying amounts of current financial assets and liabilities approximate fair value because of the immediate or short-term maturity of these items, or in the case of derivative instruments, because they are recorded at fair value. The carrying and fair value of the Company’s Senior Notes (discussed in “Note 7. Debt”) were $125.0 million and $123.9 million, respectively, as of December 31, 2017 and $75.0 million and $75.9 million, respectively, at March 31, 2017. The fair value of the Senior Notes was determined based on a comparison of the interest rate and terms of such borrowings to the rates and terms of similar debt available for the period. The Company believes the carrying amount on the remaining long-term debt, including the Secured Bank Term Loans, is not materially different from its fair value as the interest rates and terms of the borrowings are similar to currently available borrowings. The categorization of the framework used to evaluate this debt is considered Level 2. Valuation of Investment in the South American Joint Venture - During the three months ended December 31, 2017, the Company made a contribution to its South American Joint Venture. The additional investment was measured at the fair value of the interest in the South American Joint Venture. The method used to value the investment is considered Level 3 due to the subjective nature of the unobservable inputs used to determine the fair value. In the determination of fair value of its investment, the Company used a weighted income approach, based on internal forecasts of expected future cash flows, and market approach, based on comparable public companies. Significant unobservable inputs included the weighted average cost of capital used to discount the future cash flows, which was 16.5%, based on the markets in which the South American Joint Venture conducts business. See Note 6. Related Party Transactions. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Dec. 31, 2017 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 6. ADS Mexicana - ADS conducts business in Mexico and Central America through its joint venture ADS Mexicana, S.A. de C.V. (together with its affiliate ADS Corporativo, S.A. de C.V., “ADS Mexicana”). ADS owns 51% of the outstanding stock of ADS Mexicana and consolidates ADS Mexicana for financial reporting purposes. During the three and nine months ended December 31, 2017 and 2016, ADS Mexicana compensated certain current and former shareholders of Grupo Altima, the joint venture partner of ADS Mexicana, for consulting services related to the operations of the business. These cash payments were $0.1 million or less for the three and nine months ended December 31, 2017 and 2016. Occasionally, ADS and ADS Mexicana jointly enter into agreements for pipe sales with related parties. There were no such sales in either the three and nine months ended December 31, 2017 and 2016. However, outstanding receivables related to such sales from prior periods were less than $0.1 million and $0.2 million as of December 31, 2017 and March 31, 2017, respectively. ADS Mexicana paid a $1.0 million dividend to its owners in the three months ended December 31, 2017. ADS and the ADS Mexicana joint venture partner each received a dividend payment of $0.5 million. The Company is the guarantor of 100% of a second credit facility for ADS Mexicana, and the Company’s maximum potential payment under this guarantee is $12.0 million. See “Note 7. Debt.” South American Joint Venture - The Tuberias Tigre – ADS Limitada joint venture (the “South American Joint Venture”) manufactures and sells HDPE corrugated pipe in certain South American markets. ADS owns 50% of the South American Joint Venture. ADS is the guarantor of 50% of the South American Joint Venture’s credit facility, and the debt guarantee is shared equally with the joint venture partner. The Company’s maximum potential obligation under this guarantee is $11.0 million as of December 31, 2017. The maximum borrowings permitted under the South American Joint Venture’s credit facility are $22.0 million. This credit facility allows borrowings in either Chilean pesos or US dollars at a fixed interest rate determined at inception of each draw on the facility. The guarantee of the South American Joint Venture’s debt expires on December 31, 2020. ADS does not anticipate any required contributions related to the balance of this credit facility. As of December 31, 2017 and March 31, 2017, the outstanding principal balances of the credit facility including letters of credit were $14.2 million and $16.0 million, respectively. As of December 31, 2017, there were no U.S. dollar denominated loans. The weighted average interest rate as of December 31, 2017 was 5.8% on Chilean peso denominated loans. In order to improve the South American Joint Venture’s working capital position and allow it to reallocate capital resources to business growth, the Company and the joint venture partner each contributed equal amounts of outstanding receivables owed to them from the South American Joint Venture in exchange for incremental ownership interest in the South American Joint Venture in December 2017. The Company and the joint venture partner continue to maintain a 50% ownership interest in the South American Joint Venture following the contribution. As a result of the transaction the Company contributed receivables of approximately $5.8 million net of a $3.0 million allowance for doubtful accounts and recorded an additional investment in the South American Joint Venture at the fair value of $4.7 million and a $1.9 million gain on the book value of the receivables. The investment is recorded within Other assets on the Company’s Condensed Consolidated Balance Sheets and the gain is recorded within Equity in net (income) loss of unconsolidated affiliates on the Company’s Condensed Consolidated Statements of Operations. ADS and the South American Joint Venture have shared services arrangements in order to execute the joint venture services. In addition, the South American Joint Venture has entered into agreements for pipe sales with ADS and its other related parties, which totaled $0.6 million and $1.4 million for the three and nine months ended December 31, 2017, respectively, and $0.4 million and $0.9 million for the three and nine months ended December 31, 2016, respectively. ADS pipe sales to the South American Joint Venture were $0.1 million and $0.3 million for the three and nine months ended December 31, 2017, respectively, and $0.2 million and $0.7 million for the three and nine months ended December 31, 2016, respectively. BaySaver - BaySaver Technologies LLC (“BaySaver”) is a joint venture that was established to produce and distribute water quality filters and separators used in the removal of sediment and pollution from storm water. ADS owns 65% of the outstanding stock of BaySaver and consolidates its interest in BaySaver. ADS and BaySaver have entered into shared services arrangements in order to execute the joint venture services. Included within these arrangements are the lease of a plant and adjacent yard used to conduct business and operating expenses related to the leased facility. Occasionally, ADS and BaySaver jointly enter into agreements for sales of pipe and Allied Products with their related parties, which totaled $0.1 million and $0.2 million for the three and nine months ended December 31, 2017. Sales of pipe and Allied Products with related parties were immaterial for the fiscal 2017 periods presented. Tigre-ADS USA - Tigre-ADS USA is a joint venture established to manufacture and sell PVC fittings for waterworks, plumbing, and HVAC applications primarily in the United States and Canadian markets. ADS owns 49% of the outstanding shares of capital stock of Tigre-ADS USA. The joint venture represents a continuation of the existing activities of Tigre-ADS USA through its Janesville, Wisconsin manufacturing facility. ADS is the guarantor of 49% of a specific Tigre-ADS USA credit facility. The Company’s maximum potential obligation under this guarantee totals $4.4 million as of December 31, 2017. The guarantee of Tigre-ADS USA’s debt expires on August 2, 2018. ADS does not anticipate any required contributions related to the balance of this credit facility. The outstanding principal balance of the credit facility, including letters of credit the Company guarantees, was $9.0 million as of both December 31, 2017 and March 31, 2017. The weighted average interest rate as of December 31, 2017 was 3.25%. ADS purchased $0.5 million and $1.6 million of Tigre-ADS USA manufactured products for use in the production of ADS products during the three and nine months ended December 31, 2017, respectively, and $0.4 million and $1.3 million during the three and nine months ended December 31, 2016. |
Debt
Debt | 9 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
Debt | 7. Long-term debt as of the periods presented consisted of the following: December 31, 2017 March 31, 2017 (In thousands) Secured Bank Term Loans: Revolving Credit Facility — ADS $ 161,300 $ 194,300 Revolving Credit Facility — ADS Mexicana — 1,500 Term Note — 72,500 Senior Notes payable 125,000 75,000 Industrial revenue bonds 1,170 1,845 Equipment financing 3,560 4,216 ADS Mexicana Scotia bank revolving credit facility — 1,000 Total 291,030 350,361 Unamortized debt issuance costs (3,216 ) (1,723 ) Current maturities (26,833 ) (37,789 ) Long-term debt obligation $ 260,981 $ 310,849 Master Loan and Security Agreement - In June 2016, ADS signed a Master Loan and Security Agreement for Equipment Financing in the U.S. and Canada for an aggregate amount of up to $4.5 million. During fiscal 2017, the Company issued $4.6 million of Equipment Notes with a weighted average fixed interest rate at 2.72%, with the aggregate loan amount during fiscal 2017 reaching a total of $4.2 million, net of principal payments. Each Equipment Note amortizes the principal over five years and is payable monthly. Events Related to the Secured Bank Term Loans - On May 19, 2017, the Company obtained a waiver from the lenders of the Revolving Credit Facility regarding an event of default. A material domestic subsidiary failed to join as a guarantor resulting in default. The lenders agreed to waive the default if the material domestic subsidiary joined as a guarantor by July 31, 2017. The material domestic subsidiary joined as a guarantor on June 22, 2017 upon the closing of the amended Secured Bank Term Loans discussed below. On June 28, 2017, ADS executed a Forward Interest Rate Swap on the 30-Day LIBOR interest rate to mitigate the impact of interest rate volatility. The swap has a notional value of $100.0 million and a fixed rate of 1.8195% for a five year period. Events Related to the Senior Notes - On June 28, 2017, the Company issued and sold Shelf Notes in the aggregate principal amount of $75.0 million pursuant to the Private Shelf Agreement. The $75.0 million of Shelf Notes bears interest at a fixed interest rate of 3.53% per annum and have a maturity date of seven years from the date of issuance. The rate is subject to an additional 100 basis point excess leverage fee if the calculated leverage ratio exceeds 3 to 1 at the end of a fiscal quarter. Events Related to the ADS Mexicana Scotia Bank Revolving Credit Facility - On December 11, 2017, the $5.0 million Scotia Bank revolving credit facility matured. At December 11, 2017, there were no borrowings under the Scotia Bank revolving credit facility. Long-term Debt Modification Secured Bank Term Loans - On June 22, 2017, the Company and certain of its subsidiaries, as guarantors (collectively, the “Guarantors”), entered into a Second Amended and Restated Credit Agreement (the “Credit Agreement”) with PNC Bank, National Association (“PNC”), as administrative agent (in such capacity, the “Agent”), and various financial institutions party thereto (together with PNC, collectively, the “Lenders”), pursuant to which the Lenders have committed to provide the Company a $550.0 million revolving credit facility (with an option to increase such revolving credit facility or incur new term loans in an agreement amount of up to $150.0 million) subject to the terms and conditions in the Credit Agreement. The Credit Agreement amends and restates the Amended and Restated Credit Agreement dated as of June 12, 2013, as amended, among the Company and certain of its subsidiaries, as guarantors, various financial institutions party thereto, and the Agent. Borrowings under the credit facility will be used for general corporate purposes, including repurchases of stock, repayments of existing indebtedness, repayments of short-term borrowings, working capital requirements, capital expenditures and acquisitions. The interest rates under the Credit Agreement are determined by certain base rates or LIBOR rates, plus an applicable margin based on the Leverage Ratio then in effect. The average interest rate was 3.51% as of December 31, 2017. The Credit Agreement has an expiration date of June 22, 2022. The Credit Agreement sets forth certain customary business and financial covenants to which the Company and Guarantors are subject when any amounts under the Credit Agreement are outstanding, including covenants that limit or restrict the ability of the Company and the Guarantors to incur indebtedness, to make capital distributions, and to incur certain liens and encumbrances on any of its respective property. The two primary financial covenants of the Credit Agreement require the Company to maintain a certain Leverage Ratio and an Interest Coverage Ratio. The Credit Agreement Leverage Ratio generally requires that at the end of any fiscal quarter, for the four fiscal quarters then ended, the Company will not permit the ratio of its total consolidated indebtedness to the Company’s Consolidated EBITDA (as defined in the Credit Agreement) to be greater than 4.00 to 1.00 (or 4.25 to 1.00 as of the date of any acquisitions permitted under the Credit Agreement for which the aggregate consideration is $100.0 million or greater). The Credit Agreement Interest Coverage Ratio generally requires that at the end of any fiscal quarter, for the four fiscal quarters then ended, the Company will not permit the ratio of Consolidated EBITDA to the Company’s consolidated interest expense payable during such period to be less than 3.00 to 1.00. The Credit Agreement provides for customary events of default, including, among other things, in the event of nonpayment of principal, interest, or other amounts, a representation or warranty proving to have been incorrect in any material respect when made, failure to perform or observe certain covenants within a specified period of time, a cross-default to other Company indebtedness of a specified amount, the bankruptcy or insolvency of the Company or a Guarantor, monetary judgment defaults of a specified amount, a change of control of the Company, and ERISA defaults resulting in liability under certain circumstances. In the event of a default by the Company, the Agent or the requisite number of Lenders may declare all amounts owed under the Credit Agreement and outstanding letters of credit immediately due and payable and terminate the Lenders’ commitments to make loans under the Credit Agreement. For defaults related to bankruptcy, insolvency or reorganization proceedings, the commitments of the Lenders will be automatically terminated and all outstanding loans and other amounts will become immediately due and payable. Senior Notes - On June 22, 2017, the Company and the Guarantors entered into the Second Amended and Restated Private Shelf Agreement (the “Private Shelf Agreement”) with PGIM, Inc. (“Prudential”) and certain other parties thereto. The Private Shelf Agreement amends and restates the Amended and Restated Private Shelf Agreement dated as of September 24, 2010, as amended, pursuant to which the Company has previously issued and sold secured senior notes of the Company. Under the terms of the Private Shelf Agreement, the Company may request that Prudential purchase, over the next three years, secured senior notes of the Company so long as the aggregate principal amount of notes outstanding at any time does not exceed $175.0 million (the “Shelf Notes”). The Shelf Notes shall bear interest at a fixed interest rate and have a maturity date not to exceed ten years from the date of issuance. Prudential and its affiliates are under no obligation to purchase any of the Shelf Notes. The interest rate and terms of payment of any series of Shelf Notes will be determined at the time of purchase. The proceeds of any series of Shelf Notes will be used as specified in the request for purchase with respect to such series, subject to compliance with the requirements in the Private Shelf Agreement, but are anticipated to be used for general corporate purposes, including refinancing of short-term borrowings and/or repayment of outstanding indebtedness under the Credit Agreement, which is described above, as well as financing of capital expenditures and acquisitions. Obligations under the Private Shelf Agreement are secured by capital stock of certain direct and indirect subsidiaries of the Company and the Guarantors and substantially all other tangible and intangible personal property owned by the Company and the Guarantors. Obligations under the Private Shelf Agreement are secured by the collateral on a pari passu basis with obligations under the Credit Agreement. The Private Shelf Agreement sets forth certain customary business and financial covenants to which the Company and Guarantors are subject when any Shelf Note is outstanding, including covenants that limit or restrict the ability of the Company and the Guarantors to incur indebtedness, to make capital distributions, and to incur certain liens and encumbrances on any of its respective property. The two primary financial covenants of the Private Shelf Agreement require the Company to maintain a certain Leverage Ratio and an Interest Coverage Ratio. The Private Self Agreement Leverage Ratio generally requires that at the end of any fiscal quarter, for the four fiscal quarters then ended, the Company will not permit the ratio of its total consolidated indebtedness to the Company’s Consolidated EBITDA (as defined in the Private Shelf Agreement) to be greater than 4.00 to 1.00 (or 4.25 to 1.00 as of the date of any acquisitions permitted under the Private Self Agreement for which the aggregate consideration is $100.0 million or greater). The Private Self Agreement Interest Coverage Ratio generally requires that at the end of any fiscal quarter, for the four fiscal quarters then ended, the Company will not permit the ratio of Consolidated EBITDA to the Company’s consolidated interest expense payable during such period to be less than 3.00 to 1.00. The Private Shelf Agreement provides for customary events of default, including, among other things, in the event of nonpayment of principal, interest, or other amounts, a representation or warranty proving to have been incorrect in any material respect when made, failure to perform or observe certain covenants within a specified period of time, a cross-default to other Company indebtedness of a specified amount, the bankruptcy or insolvency of the Company or a Guarantor, monetary judgment defaults of a specified amount, a change of control of the Company, and ERISA defaults resulting in liability under certain circumstances. In the event of a default by the Company, any or all holders of Shelf Notes may declare amounts owed under the Private Shelf Agreement immediately due and payable. For defaults related to bankruptcy, insolvency or reorganization proceedings, all amounts owed under the Agreement will become immediately due and payable, and Prudential may at its option terminate the Private Shelf Note Facility. Principal Maturities – Maturities of long-term debt (excluding interest and deferred financing costs) as of December 31, 2017 are summarized below: Twelve Months Ended December 31, (Amounts in thousands) 2018 2019 2020 2021 2022 Thereafter Total Principal maturities $ 26,833 $ 26,168 $ 954 $ 758 $ 161,317 $ 75,000 $ 291,030 |
Derivative Transactions
Derivative Transactions | 9 Months Ended |
Dec. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Derivative Transactions | 8. DERIVATIVE TRANSACTIONS Derivatives - The Company uses interest rate swaps and commodity options in the form of collars and swaps to manage its various exposures to interest rate and commodity price fluctuations. For the interest rate swap executed on June 28, 2017, gains and losses resulting from the difference between the spot rate and applicable base rate is recorded in Interest expense. For collars and commodity swaps, contract settlement gains and losses are recorded in the Condensed Consolidated Statements of Operations in Derivative gains and other income, net. Gains and losses related to mark-to-market adjustments for changes in fair value of the derivative contracts are also recorded in the Condensed Consolidated Statements of Operations in Derivative gains and other income, net. The Company recorded net losses and net (gains) on mark-to-market adjustments for changes in the fair value of derivatives contracts as well as net losses and net (gains) on the settlement of derivative contracts as follows: Three Months Ended December 31, Nine Months Ended December 31, 2017 2016 2017 2016 (in thousands) Propylene swaps $ — $ (1,380 ) $ — $ (8,027 ) Diesel fuel contracts (333 ) (857 ) (735 ) (3,018 ) Interest rate swaps (1,065 ) — (1,253 ) (252 ) Total net unrealized mark-to-market (gains) $ (1,398 ) $ (2,237 ) $ (1,988 ) $ (11,297 ) Propylene swaps $ — $ 1,988 $ — $ 6,671 Diesel fuel contracts (203 ) 543 (204 ) 1,928 Interest rate swaps 138 — 286 (218 ) Total net realized (gains) losses $ (65 ) $ 2,531 $ 82 $ 8,381 A summary of the fair value of derivatives is included in “Note 5. Fair Value Measurements.” Other Non-Operating Income - In addition to the above amounts, Derivative gains and other income, net in the Condensed Consolidated Statements of Operations, also includes other non-operating income of $0.6 million and $3.5 million for the three and nine month period ended December 31, 2017, respectively, and other non-operating income of $1.1 million and $2.8 million for the three and nine month period ending December 31, 2016, respectively. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Dec. 31, 2017 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 9. COMMITMENTS AND CONTINGENCIES Purchase Commitments – The Company secures supplies of resin raw material by agreeing to purchase quantities during a future given period at a fixed price. These purchase contracts typically range from 1 to 12 months and occur in the ordinary course of business. Under such noncancelable purchase contracts in place at December 31, 2017, the Company has agreed to purchase resin over the period January 2018 through December 2018 at a committed purchase cost of $17.8 million. Litigation and Other Proceedings – On July 29, 2015, a putative stockholder class action, Christopher Wyche, individually and on behalf of all others similarly situated v. Advanced Drainage Systems, Inc., et al. (Case No. 1:15-cv-05955-KPF), was commenced in the U.S. District Court for the Southern District of New York (the “District Court”), naming the Company, along with Joseph A. Chlapaty, the Company’s former Chief Executive Officer, and Mark B. Sturgeon, the Company’s former Chief Financial Officer, as defendants and alleging violations of the federal securities laws. An amended complaint was filed on April 28, 2016. The amended complaint alleged that the Company made material misrepresentations and/or omissions of material fact in its public disclosures during the period from July 25, 2014 through March 29, 2016, in violation of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended, and Rule 10b-5 promulgated thereunder. On March 10, 2017, the District Court dismissed Plaintiff’s claims against all defendants in their entirety and with prejudice. Plaintiff appealed to the United States Court of Appeals for the Second Circuit, and on October 13, 2017 the District Court’s judgment was affirmed by the Second Circuit. On October 27, 2017, Plaintiff filed a petition for rehearing with the Second Circuit. The Second Circuit denied the petition for rehearing on November 28, 2017. On August 12, 2015, the SEC Division of Enforcement (“Enforcement Division”) informed the Company that it was conducting an informal inquiry with respect to the Company. As part of this inquiry, the Enforcement Division requested the voluntary production of certain documents generally related to the Company’s accounting practices. Subsequent to the initial voluntary production request, the Company received document subpoenas from the Enforcement Division pursuant to a formal order of investigation. The Company has continued to cooperate with the Enforcement Division’s investigation and has engaged in preliminary discussions with the staff of the Enforcement Division about a potential resolution. While it is reasonably possible that the investigation ultimately could result in a material loss, the Company is currently unable to estimate the range of possible losses, or predict the likelihood, timing, or final terms of any settlement. In May 2017, a former employee filed a class action complaint against the Company in Superior Court for the State of California, County of Kern (the “Hayes matter”), alleging that the Company violated certain California wage and hour laws for missed meal and rest periods and other wage and hour claims. In June 2017, the Company removed the case to the United States District Court for the Eastern District of California, where it is currently pending. The plaintiffs were seeking to recover, on their own behalf and on behalf of a putative class of all non-exempt employees in the State of California from December 16, 2012 through present, damages resulting from missed rest breaks, missed meal periods, unpaid minimum wage, straight-time and overtime pay, improper wage statements, non-payment of wages at termination, and attorneys’ fees and costs. On January 24, 2018, the Company entered into a settlement agreement to resolve the class action. Pursuant to the settlement, the Company will pay $1.8 million, which includes payments to class members in resolution of all claims, attorneys’ fees, and settlement fund claims administration fees. The Company is involved from time to time in various legal proceedings that arise in the ordinary course of business, including but not limited to commercial disputes, environmental matters, employee related claims, intellectual property disputes and litigation in connection with transactions including acquisitions and divestitures. The Company does not believe that such litigation, claims, and administrative proceedings will have a material adverse impact on the Company’s financial position or results of operations. The Company records a liability when a loss is considered probable, and the amount can be reasonably estimated. |
Income Taxes
Income Taxes | 9 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 10. INCOME TAXES The provision for income taxes is based on a current estimate of the annual effective tax rate adjusted to reflect the impact of discrete items. The Company’s effective tax rate may fluctuate from quarter to quarter as a result of a variety of factors, including changes in the Company’s assessment of certain tax contingencies, changes in tax law, outcomes of administrative audits, the impact of discrete items, and the mix of earnings. Federal Income Tax Reform The Tax Cuts and Jobs Act (the “Tax Act”) was enacted on December 22, 2017. The Tax Act significantly revises the future ongoing U.S. corporate income tax by, among other things, lowering the U. S. corporate income tax rate from 35% to 21%, full expensing on qualified property, eliminates the domestic manufacturing deduction and implements a territorial tax system. The 21% U.S. corporate income tax rate is effective January 1, 2018. Based on the Company’s fiscal year end of March 31, the U.S. statutory federal rate will be approximately 31.5% for our fiscal year ending March 31, 2018. The Company’s effective tax rate varied significantly from the statutory Federal income tax rate as a result of the Tax Act and other discrete items during the three and nine months ended December 31, 2017. The following is a reconciliation of the Company’s effective tax rate to the statutory Federal income tax rate. Three Months Ended December 31, Nine Months Ended December 31, 2017 2016 2017 2016 Federal statutory rate 31.5 % 35.0 % 31.5 % 35.0 % State and local taxes—net of federal income tax benefit 4.7 4.6 4.7 4.6 Effect of tax rate of foreign subsidiaries 0.1 (0.4 ) (0.1 ) (0.4 ) Uncertain tax position change 1.7 (6.5 ) (0.7 ) (1.3 ) Qualified production activity credit (2.8 ) (2.9 ) (2.8 ) (2.9 ) Impact of tax reform (58.2 ) — (16.2 ) — ESOP stock appreciation 5.0 3.5 5.0 3.5 Return to provision - federal and state (12.0 ) — (3.6 ) — Other 0.6 0.5 0.8 0.2 Effective rate (29.4 )% 33.8 % 18.6 % 38.7 % The Company is currently in the process of evaluating the impacts of the Tax Act on the Company’s deferred income tax attributes and tax on undistributed foreign earnings. As such, the Company has recorded provisional amounts for the revaluing of deferred tax attributes resulting in a tax benefit of $14.7 million and an estimated tax obligation on the Company’s undistributed foreign earnings resulting in a tax expense of $0.9 million. The Company needs full year activity to be able to appropriately revalue its deferred tax attributes. Also, additional time is needed to fully evaluate the earnings and profit and corresponding measurement periods for the Company’s tax on undistributed foreign earnings. As of December 31, 2017, the Company had unrecognized tax benefits of $6.6 million, which if resolved favorably, would reduce income tax expense by $6.6 million. A reconciliation of the beginning and ending amounts of unrecognized tax benefits for the nine months ended December 31, 2017 is as follows: (Amounts in thousands) Balance as of March 31, 2017 $ 6,196 Tax positions taken in the current year — Decreases in tax positions for prior years — Increases in tax positions for prior years 4,434 Settlements — Lapse of statute of limitations (4,014 ) Balance as of December 31, 2017 $ 6,616 The unrecognized tax benefits are primarily recorded in Other Liabilities on the Company’s Condensed Consolidated Balance Sheets. These amounts include potential accrued interest and penalties of $1.8 million at December 31, 2017. It is reasonably possible that there could be a change in the amount of unrecognized tax benefits within the next twelve months due to activities of the IRS or other taxing authorities, including proposed assessments of additional tax, possible settlement of audit issues, or the expiration of applicable statutes of limitation. |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Dec. 31, 2017 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Stock-Based Compensation | 11. ADS has several programs for stock-based payments to employees and non-employee members of its Board of Directors, including stock options and restricted stock. Equity-classified restricted stock awards are measured based on the grant-date estimated fair value of each award. Liability-classified stock options are re-measured at fair value at each reporting date until the date of settlement, and the pro-rata vested portion of the award is recognized as a liability. The Company determines the fair value of options based on the Black-Scholes option pricing model. The Company accounts for all restricted stock granted to Directors as equity-classified awards. The Company recognized stock-based compensation expense in the following line items of the Condensed Consolidated Statements of Operations for the three and nine months ended December 31, 2017 and 2016: Three Months Ended December 31, Nine Months Ended December 31, 2017 2016 2017 2016 (in thousands) Component of income before income taxes: Cost of goods sold $ 45 $ (40 ) $ 135 $ (40 ) Selling expenses 27 (70 ) 79 130 General and administrative expenses 1,568 (3,303 ) 4,926 2,609 Total stock-based compensation expense (benefit) $ 1,640 $ (3,413 ) $ 5,140 $ 2,699 The following table summarizes stock-based compensation expense by award type for the three and nine months ended December 31, 2017 and 2016: Three Months Ended December 31, Nine Months Ended December 31, 2017 2016 2017 2016 (in thousands) Stock-based compensation expense: Liability-classified Stock Options $ — $ (3,580 ) $ — $ 2,181 Equity-classified Stock Options 898 — 2,991 — Restricted Stock 430 167 1,158 518 Non-Employee Directors 312 — 991 — Total stock-based compensation expense (benefit) $ 1,640 $ (3,413 ) $ 5,140 $ 2,699 On April 1, 2017, the Company modified all outstanding awards to remove the provision that permitted employees to satisfy their personal tax liability with the net settlement of shares in excess of minimum tax withholding. Consistent with the ASU in Note 1, employees can now withhold shares with a fair value up to the maximum statutory rate. Accordingly, the Company modified the awards previously accounted for as liability-classified to equity-classified and reclassified the carrying amount of the awards of $13.7 million to Paid-in capital in the Condensed Consolidated Balance Sheet. All stock options have been accounted for as equity-classified awards for the periods subsequent to the modification. Prior to the modification, liability-classified awards were reclassified to additional paid-in capital at fair value when stock options were exercised. 2017 Omnibus Plan On May 24, 2017, the Board of Directors approved the 2017 Omnibus Incentive Plan (the “2017 Incentive Plan”) which was approved by the Company’s stockholders on July 17, 2017. The 2017 Incentive Plan provides for the issuance of a maximum of 3.5 million shares of the Company’s common stock for awards made thereunder, which awards may consist of stock options, restricted stock, restricted stock units, stock appreciation rights, phantom stock, cash-based awards, performance awards (which may take the form of performance cash, performance units or performance shares) or other stock-based awards. The 2017 Incentive Plan replaces the 2000 Incentive Stock Option Plan, 2008 Restricted Stock Plan, 2013 Stock Option Plan, and 2014 Non-Employee Director Compensation Plan (the “Prior Plans”) and no further grants will be made under the Prior Plans. During the three and nine months ended December 31, 2017, the Company granted 0.1 million shares of restricted stock and 0.2 million nonqualified stock options under the 2017 Incentive Plan. The Company estimates the fair value of stock options using a Black-Scholes option-pricing model. The following table summarizes the assumptions used in estimate the fair value of stock-options during the nine months ended December 31, 2017: Nine Months Ended December 31, 2017 Common stock price $19.35 - $22.95 Expected stock price volatility 32.1% - 35.6% Risk-free interest rate 1.9% - 2.2% Weighted-average expected option life (years) 5.6 - 6.0 Dividend yield 1.1% - 1.5% |
Net Income Per Share and Stockh
Net Income Per Share and Stockholders' Equity | 9 Months Ended |
Dec. 31, 2017 | |
Net Income Per Share And Stockholders Equity [Abstract] | |
Net Income Per Share and Stockholders' Equity | 12. The Company is required to apply the two-class method to compute both basic and diluted net income per share. The two-class method is an earnings allocation formula that treats participating securities as having rights to earnings that would otherwise have been available to common stockholders. The following table presents information necessary to calculate net income per share for the periods presented, as well as potentially dilutive securities excluded from the weighted average number of diluted common shares outstanding because their inclusion would have been anti-dilutive: Three Months Ended December 31, Nine Months Ended December 31, (In thousands, except per share data) 2017 2016 2017 2016 NET INCOME PER SHARE—BASIC: Net income attributable to ADS $ 32,105 $ 9,053 $ 67,710 $ 51,060 Adjustments for: Accretion of redeemable noncontrolling interest — (399 ) — (1,141 ) Dividends to redeemable convertible preferred stockholders (456 ) (407 ) (1,415 ) (1,247 ) Dividends paid to unvested restricted stockholders (12 ) (32 ) (47 ) (86 ) Net income available to common stockholders and participating securities 31,637 8,215 66,248 48,586 Undistributed income allocated to participating securities (2,766 ) (503 ) (5,588 ) (4,066 ) Net income available to common stockholders – Basic $ 28,871 $ 7,712 $ 60,660 $ 44,520 Weighted average number of common shares outstanding – Basic 55,917 54,557 55,497 54,354 Net income per common share – Basic $ 0.52 $ 0.14 $ 1.09 $ 0.82 NET INCOME PER SHARE—DILUTED: Net income available to common stockholders – Diluted $ 28,871 $ 7,712 $ 60,660 $ 44,520 Weighted average number of common shares outstanding – Basic 55,917 54,557 55,497 54,354 Assumed exercise of stock options 542 610 627 802 Weighted average number of common shares outstanding – Diluted 56,459 55,167 56,124 55,156 Net income per common share – Diluted $ 0.51 $ 0.14 $ 1.08 $ 0.81 Potentially dilutive securities excluded as anti-dilutive 6,060 6,134 6,252 6,282 Stockholders’ Equity – During the nine months ended December 31, 2017, the Company repurchased 0.4 million shares of common stock at a cost of $7.9 million. The Company did not repurchase any shares of common stock during the three months ended December 31, 2017. The repurchases were made under the Board of Directors’ authorization in February 2017 to repurchase up to $50 million of ADS common stock in accordance with applicable securities laws. As of December 31, 2017, approximately $42.1 million of common stock may be repurchased under the authorization. The repurchase program does not obligate the Company to acquire any particular amount of common stock, and may be suspended or terminated at any time at the Company’s discretion. Treasury Stock Retirement On November 1, 2017, the Board of Directors resolved to retire 97.7 million shares of Treasury Stock. The retirement of the Treasury Stock resulted in a reclassification of Treasury Stock to Paid-In-Capital and did not have an impact on Total Stockholders’ Equity. |
Business Segments Information
Business Segments Information | 9 Months Ended |
Dec. 31, 2017 | |
Segment Reporting [Abstract] | |
Business Segments Information | 13. The Company operates its business in two distinct operating and reportable segments based on the markets it serves: “Domestic” and “International.” The Chief Operating Decision Maker (“CODM”) evaluates segment reporting based on Net sales and Segment Adjusted EBITDA. The Company calculates Segment Adjusted EBITDA as net income or loss before interest, income taxes, depreciation and amortization, stock-based compensation expense, non-cash charges and certain other expenses. The following table sets forth reportable segment information with respect to the amount of Net sales contributed by each class of similar products for the periods presented: Three Months Ended December 31, Nine Months Ended December 31, 2017 2016 2017 2016 (In thousands) Domestic Pipe $ 196,402 $ 182,061 $ 676,079 $ 627,397 Allied Products 80,470 72,251 272,174 251,451 Total domestic 276,872 254,312 948,253 878,848 International Pipe 33,166 32,550 101,139 105,832 Allied Products 10,794 7,854 30,848 28,397 Total international 43,960 40,404 131,987 134,229 Total Net sales $ 320,832 $ 294,716 $ 1,080,240 $ 1,013,077 The following sets forth certain additional financial information attributable to the reportable segments for the periods presented: Domestic International Total (In thousands) For the three months ended December 31, 2017 Net sales $ 276,872 $ 43,960 $ 320,832 Segment Adjusted EBITDA 48,790 7,209 55,999 Interest expense 3,007 79 3,086 Income tax (benefit) expense (9,117 ) 1,746 (7,371 ) Depreciation and amortization 15,804 2,048 17,852 Equity in net loss (income) of unconsolidated affiliates 952 (1,720 ) (768 ) Capital expenditures 7,820 269 8,089 For the three months ended December 31, 2016 Net sales $ 254,312 $ 40,404 $ 294,716 Segment Adjusted EBITDA 37,040 6,354 43,394 Interest expense 4,127 94 4,221 Income tax expense 5,342 644 5,986 Depreciation and amortization 15,911 2,118 18,029 Equity in net loss of unconsolidated affiliates 348 1,135 1,483 Capital expenditures 9,829 2,879 12,708 Domestic International Total (In thousands) For the nine months ended December 31, 2017 Net sales $ 948,253 $ 131,987 $ 1,080,240 Segment Adjusted EBITDA 167,352 15,876 183,228 Interest expense 12,363 257 12,620 Income tax expense 12,583 3,229 15,812 Depreciation and amortization 49,725 6,068 55,793 Equity in net loss (income) of unconsolidated affiliates 1,607 (2,103 ) (496 ) Capital expenditures 33,601 1,523 35,124 For the nine months ended December 31, 2016 Net sales $ 878,848 $ 134,229 $ 1,013,077 Segment Adjusted EBITDA 158,794 22,009 180,803 Interest expense 13,236 315 13,551 Income tax expense 31,319 4,209 35,528 Depreciation and amortization 47,418 6,647 54,065 Equity in net loss of unconsolidated affiliates 375 2,019 2,394 Capital expenditures 31,820 4,684 36,504 The following sets forth certain additional financial information attributable to the reportable segments as of the periods presented: December 31, 2017 March 31, 2017 (In thousands) Investments in unconsolidated affiliates Domestic $ 819 $ 2,427 International 12,450 6,559 Total $ 13,269 $ 8,986 Total identifiable assets Domestic $ 887,724 $ 917,006 International 134,421 134,987 Eliminations (8,911 ) (5,708 ) Total $ 1,013,234 $ 1,046,285 The following reconciles segment adjusted EBITDA to net income for the periods presented: Three Months Ended December 31, 2017 2016 Domestic International Domestic International (In thousands) Reconciliation of Segment Adjusted EBITDA: Net income $ 29,755 $ 3,460 $ 7,233 $ 3,025 Depreciation and amortization 15,804 2,048 15,911 2,118 Interest expense 3,007 79 4,127 94 Income tax (benefit) expense (9,117 ) 1,746 5,342 644 Segment EBITDA 39,449 7,333 32,613 5,881 Derivative fair value adjustments (145 ) — (2,237 ) — Foreign currency transaction gains — (430 ) — (601 ) Loss (gain) on disposal of assets and costs from exit and disposal activities 1,940 (16 ) 1,258 880 Unconsolidated affiliates interest, tax, depreciation and amortization (1) 315 322 275 194 Contingent consideration remeasurement 1 — (15 ) — Stock-based compensation expense (benefit) 1,640 — (3,413 ) — ESOP deferred compensation 2,737 — 2,323 — Executive retirement expense (benefit) 73 — (170 ) — Transaction costs (2) 92 — — — Legal settlement (3) 1,800 — — — Restatement-related costs (4) 888 — 6,406 — Segment Adjusted EBITDA (5) $ 48,790 $ 7,209 $ 37,040 $ 6,354 Nine Months Ended December 31, 2017 2016 Domestic International Domestic International (In thousands) Reconciliation of Segment Adjusted EBITDA: Net income $ 61,837 $ 7,811 $ 43,704 $ 10,256 Depreciation and amortization 49,725 6,068 47,418 6,647 Interest expense 12,363 257 13,236 315 Income tax expense 12,583 3,229 31,319 4,209 Segment EBITDA 136,508 17,365 135,677 21,427 Derivative fair value adjustments (735 ) — (11,297 ) — Foreign currency transaction gains — (2,878 ) — (1,678 ) Loss on disposal of assets and costs from exit and disposal activities 10,253 215 2,040 1,037 Unconsolidated affiliates interest, tax, depreciation and amortization (1) 886 1,174 826 1,223 Contingent consideration remeasurement 33 — 42 — Stock-based compensation expense 5,140 — 2,699 — ESOP deferred compensation 7,946 — 7,428 — Executive retirement expense (benefit) 982 — (12 ) — Transaction costs (2) 1,149 — — — Legal settlement (3) 1,800 — — — Restatement-related costs (4) 3,390 — 21,391 — Segment Adjusted EBITDA (5) $ 167,352 $ 15,876 $ 158,794 $ 22,009 (1) Includes the proportional share of interest, income taxes, depreciation and amortization related to the South American Joint Venture and the Tigre-ADS USA joint venture, which are accounted for under the equity method of accounting. (2) Represents expenses recorded related to legal, accounting and other professional fees incurred in connection with the Company’s debt refinancing and potential asset acquisitions and dispositions. (3) Represents settlement agreement to resolve the Hayes matter discussed in “Note 9. Commitments and Contingencies.” (4) Represents expenses recorded related to legal, accounting and other professional fees incurred in connection with the restatement of prior period financial statements as reflected in the fiscal year 2015 Form 10-K and fiscal year 2016 Form 10-K/A. Fiscal 2018 expenses relate to the ongoing SEC Enforcement Division’s investigation and related shareholder litigation discussed in “Note 9. Commitments and Contingencies.” (5) A portion of the reduction in International EBITDA is related to transfer pricing. The reduction is fully offset by an increase in Domestic EBITDA. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Dec. 31, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events | 14. Dividends on Common Stock - During the fourth quarter of fiscal 2018, the Company declared a quarterly cash dividend of $0.07 per share of common stock. The dividend is payable on March 15, 2018 to stockholders of record at the close of business on March 1, 2018. Restructuring Activities- In January 2018, the Company finalized and communicated its plan to close a customer service facility. As a result of the closure, the Company will incur expenses in the fourth quarter of fiscal 2018 and fiscal 2019 for employee severance and the termination of the facility lease agreement. Related Party Transactions - In February 2018, the Company’s former CEO, purchased his officer life insurance policies for their fair value from the Company. The Company had $7.2M in recorded in Accounts Receivable for the cash surrender value as of December 31, 2017. |
Background and Summary of Sig24
Background and Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation - The Company prepares its Condensed Consolidated Financial Statements in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The Condensed Consolidated Balance Sheet as of March 31, 2017 was derived from audited financial statements included in the Annual Report on Form 10-K for the year ended March 31, 2017 (“Fiscal 2017 Form 10-K”). The accompanying unaudited Condensed Consolidated Financial Statements contain all adjustments, of a normal recurring nature, necessary to present fairly its financial position as of December 31, 2017 and the results of operations and cash flows for the three and nine months ended December 31, 2017 and 2016. The interim Condensed Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements, including the notes thereto, filed in the Company’s Fiscal 2017 Form 10-K. |
Principles of Consolidation | Principles of Consolidation - The Condensed Consolidated Financial Statements include the Company, its wholly-owned subsidiaries, its majority-owned subsidiaries and variable interest entities (“VIEs”) of which the Company is the primary beneficiary. The Company uses the equity method of accounting for equity investments where it exercises significant influence but does not hold a controlling financial interest. Such investments are recorded in Other assets in the Condensed Consolidated Balance Sheets and the related equity earnings from these investments are included in Equity in net (income) loss of unconsolidated affiliates in the Condensed Consolidated Statements of Operations. All intercompany balances and transactions have been eliminated in consolidation. |
Recent Accounting Guidance | Recent Accounting Guidance Recently Adopted Accounting Guidance Measurement of Inventory In July 2015, the Financial Accounting Standards Board (“FASB”) issued an accounting standards update (“ASU”) which requires entities to measure most inventory at the lower of cost and net realizable value, simplifying current guidance under which an entity must measure inventory at the lower of cost or market. The determination of market value, under current guidance, is considered unnecessarily complex as there are several potential outcomes based on its definition as replacement cost, net realizable value, or net realizable value less an approximate normal profit margin. Whereas net realizable value, under the update, is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. The Company adopted this standard effective April 1, 2017. The new standard did not have a material impact on the Condensed Consolidated Financial Statements. Stock-Based Compensation In March 2016, the FASB issued an ASU which is intended to simplify certain aspects of the accounting for stock-based compensation. The Company adopted the standard on April 1, 2017. The adoption of the ASU did not have a material impact on the historical Consolidated Financial Statements. This update contains changes to the accounting for excess tax benefits, whereby excess tax benefits will be recognized in the income statement rather than in additional paid-in capital on the balance sheet. This update is expected to result in increased volatility to income tax expense in future periods dependent upon the timing of employee exercises of stock options, the price of the Company's common stock and the vesting of restricted stock awards. In addition, excess tax benefits will now be classified as operating cash flows rather than financing cash flows in the Condensed Consolidated Statements of Cash Flows. The amendment also contained potential changes to the accounting for forfeitures, whereby entities could elect to either continue to apply the previous requirement to estimate forfeitures when determining compensation expense, or to alternatively reverse the compensation expense of forfeited awards when they occur. The Company will account for forfeitures as they occur, which may result in expense volatility based on the timing of forfeitures. In addition, the update also modified the net-share settlement liability classification exception for statutory income tax withholdings, whereby the new guidance allows an employer with a statutory income tax withholding obligation to withhold shares with a fair value up to the maximum statutory tax rate in the employee’s applicable jurisdiction. The Company included this provision in awards issued in fiscal 2017 and modified previously issued awards on April 1, 2017. See “Note 11. Stock-Based Compensation” for further information on the modification. Recent Accounting Guidance Not Yet Adopted Revenue Recognition - In May 2014, the FASB issued an ASU which amends the guidance for revenue recognition. This standard contains principles that will require an entity to recognize revenue to depict the transfer of goods and services to customers at an amount that an entity expects to be entitled to in exchange for goods or services. The standard sets forth a new revenue recognition model that requires identifying the contract, identifying the performance obligations and recognizing the revenue upon satisfaction of performance obligations. In August 2015, the FASB issued an ASU that deferred the effective date of the new revenue standard for public entities to periods beginning after December 15, 2017, with early adoption permitted but not earlier than the original effective date of periods beginning after December 15, 2016. There have also been various additional accounting standards updates issued by the FASB in 2016 that further amend this new revenue standard. The updated standard permits the use of either the retrospective or cumulative effect transition method. The Company will adopt this standard effective April 1, 2018. To date, the Company has formed an internal stakeholder group to promote information sharing, communicate the new requirements of the standard, and assess the impact of the new revenue recognition model on the Company’s contracts with customers. The Company expects enhanced revenue disclosures as the result of adoption. The Company has not yet selected a transition method and is currently evaluating the impact of this standard on the Condensed Consolidated Financial Statements. Leases - In February 2016, the FASB issued an ASU which amends the guidance for leases. This standard contains principles that will require an entity to recognize most leases on the balance sheet by recording a right-of-use asset and a lease liability, unless the lease is a short-term lease that has an accounting lease term of twelve months or less. The standard also contains other changes to the current lease guidance that may result in changes to how entities determine which contractual arrangements qualify as a lease, the accounting for executory costs such as property taxes and insurance, as well as which lease origination costs will be capitalizable. The new standard also requires expanded quantitative and qualitative disclosures. This standard is effective for fiscal years beginning after December 15, 2018, including interim periods within those years, and early adoption is permitted. The standard requires the use of the modified retrospective transition method, whereby the new guidance will be applied at the beginning of the earliest period presented in the financial statements of the period of adoption. The modified retrospective transition approach includes certain practical expedients that entities may elect to apply in transition. The Company expects to adopt this standard effective April 1, 2019. The Company has implemented a new software solution to improve the process of tracking and accounting for leases under the current and new standards. The Company has not yet determined whether to apply any of the available practical expedients. The Company has begun the process of reviewing contracts under the new standard to determine the impact the new standard will have on the Condensed Consolidated Financial Statements. Measurement of Credit Losses - In June 2016, the FASB issued an ASU which provides amended guidance on the measurement of credit losses on financial instruments, including trade receivables. This standard requires the use of an impairment model referred to as the current expected credit loss model. This standard is effective for fiscal years beginning after December 15, 2019, including interim periods within those years, and early adoption is permitted for fiscal years beginning after December 15, 2018. The Company expects to adopt this standard effective April 1, 2020. The Company is currently evaluating the impact of this standard on the Condensed Consolidated Financial Statements. Cash Flow Classification - In August 2016, the FASB issued an ASU which provides amended guidance on the classification of certain cash receipts and cash payments in the statement of cash flows, including related to debt prepayment or debt extinguishment costs, contingent consideration payments made after a business combination, proceeds from the settlement of insurance claims, proceeds from the settlement of corporate-owned life insurance and distributions received from equity method investees. This update is effective for fiscal years beginning after December 15, 2017, including interim periods within those years, and early adoption is permitted. This amended guidance must be applied retrospectively to all periods presented, but may be applied prospectively if retrospective application would be impracticable. The Company expects to adopt this update effective April 1, 2018. The Company is currently evaluating the impact of this update on the Condensed Consolidated Financial Statements. Goodwill Impairment - In January 2017, the FASB issued an ASU which removes the requirement to compare the implied fair value of goodwill with its carrying amount as part of step 2 of the goodwill impairment test. As a result, under the standards update, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount and should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. The amendments are effective for annual periods beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company expects to adopt this standard effective April 1, 2018. The Company is currently evaluating the impact of this standard on the Condensed Consolidated Financial Statements. Definition of a Business - In January 2017, the FASB issued an ASU to clarify the definition of a business. The definition of a business affects many areas of accounting including acquisitions, disposals, goodwill, and consolidation. The amendments are intended to help companies and other organizations evaluate whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The amendments provide a more robust framework to use in determining when a set of assets and activities is a business. The amendments are effective for annual periods beginning after December 15, 2017, including interim periods within those periods. The Company will adopt this standard effective April 1, 2018. The new standard will not have a material impact on the Condensed Consolidated Financial Statements. Stock-Based Compensation - In May 2017, the FASB issued an ASU to clarify when modification accounting should be applied for changes to the terms or conditions of share-based payment awards. The amendments clarify that modification accounting guidance should only be applied if there is a change to the value, vesting conditions, or award classification and would not be required if the changes are considered non-substantive. The amendments are effective for annual periods beginning after December 15, 2017, including interim periods within those periods. The Company expects to adopt this standard effective April 1, 2018. The Company is currently evaluating the impact of this update on its Condensed Consolidated Financial Statements. Hedge Accounting – In August 2017, the FASB issued an ASU which expands an entity’s ability to apply hedge accounting for non-financial and financial risk components and provides a simplified approach for fair value hedging of interest rate risk. The standard also refines how entities assess hedge effectiveness. This standard is effective for fiscal years beginning after December 15, 2018, including interim periods within those years, and early adoption is permitted. The Company is currently evaluating the impact of this standard on the Condensed Consolidated Financial Statements. With the exception of the pronouncements described above, there have been no new accounting pronouncements issued or adopted since the filing of the Fiscal 2017 Form 10-K that have significance, or potential significance, to the Condensed Consolidated Financial Statements. |
Loss on Disposal of Assets an25
Loss on Disposal of Assets and Costs from Exit and Disposal Activities (Tables) | 9 Months Ended |
Dec. 31, 2017 | |
Discontinued Operations And Disposal Groups [Abstract] | |
Summary of Loss on Disposal of Assets and Costs from Exit and Disposal Activities | The following table summarizes the activity included in Loss on disposal of assets and costs from exit and disposal activities recorded during the three and nine months ended December 31, 2017 and 2016: Three Months Ended December 31, Nine Months Ended December 31, 2017 2016 2017 2016 (in thousands) Accelerated depreciation $ — $ — $ 3,561 $ — Plant severance 1,021 — 1,848 — Headcount reduction — — 2,577 — Other restructuring activities 56 — 56 — Total 2018 Restructuring Plan activities $ 1,077 $ — $ 8,042 $ — Loss on other disposals and partial disposals of property, plant and equipment 847 2,138 2,426 3,077 Total loss on disposal of assets and costs from exit and disposal activities $ 1,924 $ 2,138 $ 10,468 $ 3,077 |
Receivables and Allowance for26
Receivables and Allowance for Doubtful Accounts (Tables) | 9 Months Ended |
Dec. 31, 2017 | |
Accounts Notes Loans And Financing Receivable Gross Allowance And Net [Abstract] | |
Summary of Receivables | Receivables include trade receivables, net of an allowance for doubtful accounts, refundable income taxes and other miscellaneous receivables. Receivables at December 31, 2017 and March 31, 2017 consisted of the following: December 31, 2017 March 31, 2017 (In thousands) Trade receivables $ 159,343 $ 160,655 Refundable income taxes — 1,468 Other miscellaneous receivables 17,599 6,820 Receivables $ 176,942 $ 168,943 |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Dec. 31, 2017 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories | Inventories as of the periods presented consisted of the following: December 31, 2017 March 31, 2017 (In thousands) Raw materials $ 43,492 $ 52,746 Finished goods 171,553 205,684 Total inventories $ 215,045 $ 258,430 |
Fair Value Measurement (Tables)
Fair Value Measurement (Tables) | 9 Months Ended |
Dec. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Summary of Assets and Liabilities Carried at Fair Value | The assets and liabilities carried at fair value as of the periods presented were as follows: December 31, 2017 Total Level 1 Level 2 Level 3 (In thousands) Assets: Derivative assets – diesel fuel contracts $ 772 $ — $ 772 $ — Derivative assets – interest rate swap 1,351 — 1,351 — Total assets at fair value on a recurring basis $ 2,123 $ — $ 2,123 $ — Liabilities: Derivative liability - interest rate swap $ 98 $ — $ 98 $ — Contingent consideration for acquisitions 640 — — 640 Total liabilities at fair value on a recurring basis $ 738 $ — $ 98 $ 640 March 31, 2017 Total Level 1 Level 2 Level 3 (In thousands) Assets: Derivative assets – diesel fuel contracts $ 179 $ — $ 179 $ — Total assets at fair value on a recurring basis $ 179 $ — $ 179 $ — Liabilities: Derivative liability - diesel fuel contracts $ 142 $ — $ 142 $ — Contingent consideration for acquisitions 1,348 — — 1,348 Total liabilities at fair value on a recurring basis $ 1,490 $ — $ 142 $ 1,348 |
Summary of Changes in Fair Value of Recurring Fair Value Measurements Using Unobservable Inputs | Changes in the fair value of recurring fair value measurements using significant unobservable inputs (Level 3) for the periods presented were as follows: Three Months Ended December 31, Nine Months Ended December 31, 2017 2016 2017 2016 (In thousands) Balance at the beginning of the period $ 735 $ 1,997 $ 1,348 $ 2,858 Change in fair value 1 (15 ) 33 42 Payments of contingent consideration liability (96 ) (169 ) (741 ) (1,087 ) Balance at the end of the period $ 640 $ 1,813 $ 640 $ 1,813 |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | Long-term debt as of the periods presented consisted of the following: December 31, 2017 March 31, 2017 (In thousands) Secured Bank Term Loans: Revolving Credit Facility — ADS $ 161,300 $ 194,300 Revolving Credit Facility — ADS Mexicana — 1,500 Term Note — 72,500 Senior Notes payable 125,000 75,000 Industrial revenue bonds 1,170 1,845 Equipment financing 3,560 4,216 ADS Mexicana Scotia bank revolving credit facility — 1,000 Total 291,030 350,361 Unamortized debt issuance costs (3,216 ) (1,723 ) Current maturities (26,833 ) (37,789 ) Long-term debt obligation $ 260,981 $ 310,849 |
Maturities of Long-term Debt (Excluding Interest and Deferred Financing Costs) | Maturities of long-term debt (excluding interest and deferred financing costs) as of December 31, 2017 are summarized below: Twelve Months Ended December 31, (Amounts in thousands) 2018 2019 2020 2021 2022 Thereafter Total Principal maturities $ 26,833 $ 26,168 $ 954 $ 758 $ 161,317 $ 75,000 $ 291,030 |
Derivative Transactions (Tables
Derivative Transactions (Tables) | 9 Months Ended |
Dec. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Schedule of Cash Settlements and Net Losses and Net (Gains) on Mark-to-Market Adjustments for Changes in Fair Value of Derivative Contracts | The Company recorded net losses and net (gains) on mark-to-market adjustments for changes in the fair value of derivatives contracts as well as net losses and net (gains) on the settlement of derivative contracts as follows: Three Months Ended December 31, Nine Months Ended December 31, 2017 2016 2017 2016 (in thousands) Propylene swaps $ — $ (1,380 ) $ — $ (8,027 ) Diesel fuel contracts (333 ) (857 ) (735 ) (3,018 ) Interest rate swaps (1,065 ) — (1,253 ) (252 ) Total net unrealized mark-to-market (gains) $ (1,398 ) $ (2,237 ) $ (1,988 ) $ (11,297 ) Propylene swaps $ — $ 1,988 $ — $ 6,671 Diesel fuel contracts (203 ) 543 (204 ) 1,928 Interest rate swaps 138 — 286 (218 ) Total net realized (gains) losses $ (65 ) $ 2,531 $ 82 $ 8,381 |
Income Taxes (Tables)
Income Taxes (Tables) | 9 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Effective Tax Rate Varied from Statutory Federal Income Tax Rate | The following is a reconciliation of the Company’s effective tax rate to the statutory Federal income tax rate. Three Months Ended December 31, Nine Months Ended December 31, 2017 2016 2017 2016 Federal statutory rate 31.5 % 35.0 % 31.5 % 35.0 % State and local taxes—net of federal income tax benefit 4.7 4.6 4.7 4.6 Effect of tax rate of foreign subsidiaries 0.1 (0.4 ) (0.1 ) (0.4 ) Uncertain tax position change 1.7 (6.5 ) (0.7 ) (1.3 ) Qualified production activity credit (2.8 ) (2.9 ) (2.8 ) (2.9 ) Impact of tax reform (58.2 ) — (16.2 ) — ESOP stock appreciation 5.0 3.5 5.0 3.5 Return to provision - federal and state (12.0 ) — (3.6 ) — Other 0.6 0.5 0.8 0.2 Effective rate (29.4 )% 33.8 % 18.6 % 38.7 % |
Reconciliation of Beginning and Ending Balance of Unrecognized Tax Benefits | A reconciliation of the beginning and ending amounts of unrecognized tax benefits for the nine months ended December 31, 2017 is as follows: (Amounts in thousands) Balance as of March 31, 2017 $ 6,196 Tax positions taken in the current year — Decreases in tax positions for prior years — Increases in tax positions for prior years 4,434 Settlements — Lapse of statute of limitations (4,014 ) Balance as of December 31, 2017 $ 6,616 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 9 Months Ended |
Dec. 31, 2017 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Summary of Stock-based Compensation Expense | The Company recognized stock-based compensation expense in the following line items of the Condensed Consolidated Statements of Operations for the three and nine months ended December 31, 2017 and 2016: Three Months Ended December 31, Nine Months Ended December 31, 2017 2016 2017 2016 (in thousands) Component of income before income taxes: Cost of goods sold $ 45 $ (40 ) $ 135 $ (40 ) Selling expenses 27 (70 ) 79 130 General and administrative expenses 1,568 (3,303 ) 4,926 2,609 Total stock-based compensation expense (benefit) $ 1,640 $ (3,413 ) $ 5,140 $ 2,699 The following table summarizes stock-based compensation expense by award type for the three and nine months ended December 31, 2017 and 2016: Three Months Ended December 31, Nine Months Ended December 31, 2017 2016 2017 2016 (in thousands) Stock-based compensation expense: Liability-classified Stock Options $ — $ (3,580 ) $ — $ 2,181 Equity-classified Stock Options 898 — 2,991 — Restricted Stock 430 167 1,158 518 Non-Employee Directors 312 — 991 — Total stock-based compensation expense (benefit) $ 1,640 $ (3,413 ) $ 5,140 $ 2,699 |
Schedule of Estimate Fair Value of Stock-Options Granted | The following table summarizes the assumptions used in estimate the fair value of stock-options during the nine months ended December 31, 2017: Nine Months Ended December 31, 2017 Common stock price $19.35 - $22.95 Expected stock price volatility 32.1% - 35.6% Risk-free interest rate 1.9% - 2.2% Weighted-average expected option life (years) 5.6 - 6.0 Dividend yield 1.1% - 1.5% |
Net Income Per Share and Stoc33
Net Income Per Share and Stockholders' Equity (Tables) | 9 Months Ended |
Dec. 31, 2017 | |
Net Income Per Share And Stockholders Equity [Abstract] | |
Summary of Net Income Per Share | The following table presents information necessary to calculate net income per share for the periods presented, as well as potentially dilutive securities excluded from the weighted average number of diluted common shares outstanding because their inclusion would have been anti-dilutive: Three Months Ended December 31, Nine Months Ended December 31, (In thousands, except per share data) 2017 2016 2017 2016 NET INCOME PER SHARE—BASIC: Net income attributable to ADS $ 32,105 $ 9,053 $ 67,710 $ 51,060 Adjustments for: Accretion of redeemable noncontrolling interest — (399 ) — (1,141 ) Dividends to redeemable convertible preferred stockholders (456 ) (407 ) (1,415 ) (1,247 ) Dividends paid to unvested restricted stockholders (12 ) (32 ) (47 ) (86 ) Net income available to common stockholders and participating securities 31,637 8,215 66,248 48,586 Undistributed income allocated to participating securities (2,766 ) (503 ) (5,588 ) (4,066 ) Net income available to common stockholders – Basic $ 28,871 $ 7,712 $ 60,660 $ 44,520 Weighted average number of common shares outstanding – Basic 55,917 54,557 55,497 54,354 Net income per common share – Basic $ 0.52 $ 0.14 $ 1.09 $ 0.82 NET INCOME PER SHARE—DILUTED: Net income available to common stockholders – Diluted $ 28,871 $ 7,712 $ 60,660 $ 44,520 Weighted average number of common shares outstanding – Basic 55,917 54,557 55,497 54,354 Assumed exercise of stock options 542 610 627 802 Weighted average number of common shares outstanding – Diluted 56,459 55,167 56,124 55,156 Net income per common share – Diluted $ 0.51 $ 0.14 $ 1.08 $ 0.81 Potentially dilutive securities excluded as anti-dilutive 6,060 6,134 6,252 6,282 |
Business Segments Information (
Business Segments Information (Tables) | 9 Months Ended |
Dec. 31, 2017 | |
Segment Reporting [Abstract] | |
Schedule of Revenue from Reportable Segments by Product Type | The following table sets forth reportable segment information with respect to the amount of Net sales contributed by each class of similar products for the periods presented: Three Months Ended December 31, Nine Months Ended December 31, 2017 2016 2017 2016 (In thousands) Domestic Pipe $ 196,402 $ 182,061 $ 676,079 $ 627,397 Allied Products 80,470 72,251 272,174 251,451 Total domestic 276,872 254,312 948,253 878,848 International Pipe 33,166 32,550 101,139 105,832 Allied Products 10,794 7,854 30,848 28,397 Total international 43,960 40,404 131,987 134,229 Total Net sales $ 320,832 $ 294,716 $ 1,080,240 $ 1,013,077 |
Schedule of Additional Financial Information Attributable to Reportable Segments | The following sets forth certain additional financial information attributable to the reportable segments for the periods presented: Domestic International Total (In thousands) For the three months ended December 31, 2017 Net sales $ 276,872 $ 43,960 $ 320,832 Segment Adjusted EBITDA 48,790 7,209 55,999 Interest expense 3,007 79 3,086 Income tax (benefit) expense (9,117 ) 1,746 (7,371 ) Depreciation and amortization 15,804 2,048 17,852 Equity in net loss (income) of unconsolidated affiliates 952 (1,720 ) (768 ) Capital expenditures 7,820 269 8,089 For the three months ended December 31, 2016 Net sales $ 254,312 $ 40,404 $ 294,716 Segment Adjusted EBITDA 37,040 6,354 43,394 Interest expense 4,127 94 4,221 Income tax expense 5,342 644 5,986 Depreciation and amortization 15,911 2,118 18,029 Equity in net loss of unconsolidated affiliates 348 1,135 1,483 Capital expenditures 9,829 2,879 12,708 Domestic International Total (In thousands) For the nine months ended December 31, 2017 Net sales $ 948,253 $ 131,987 $ 1,080,240 Segment Adjusted EBITDA 167,352 15,876 183,228 Interest expense 12,363 257 12,620 Income tax expense 12,583 3,229 15,812 Depreciation and amortization 49,725 6,068 55,793 Equity in net loss (income) of unconsolidated affiliates 1,607 (2,103 ) (496 ) Capital expenditures 33,601 1,523 35,124 For the nine months ended December 31, 2016 Net sales $ 878,848 $ 134,229 $ 1,013,077 Segment Adjusted EBITDA 158,794 22,009 180,803 Interest expense 13,236 315 13,551 Income tax expense 31,319 4,209 35,528 Depreciation and amortization 47,418 6,647 54,065 Equity in net loss of unconsolidated affiliates 375 2,019 2,394 Capital expenditures 31,820 4,684 36,504 The following sets forth certain additional financial information attributable to the reportable segments as of the periods presented: December 31, 2017 March 31, 2017 (In thousands) Investments in unconsolidated affiliates Domestic $ 819 $ 2,427 International 12,450 6,559 Total $ 13,269 $ 8,986 Total identifiable assets Domestic $ 887,724 $ 917,006 International 134,421 134,987 Eliminations (8,911 ) (5,708 ) Total $ 1,013,234 $ 1,046,285 |
Schedule of Reconciliation of Segment Adjusted EBITDA to Net Income | The following reconciles segment adjusted EBITDA to net income for the periods presented: Three Months Ended December 31, 2017 2016 Domestic International Domestic International (In thousands) Reconciliation of Segment Adjusted EBITDA: Net income $ 29,755 $ 3,460 $ 7,233 $ 3,025 Depreciation and amortization 15,804 2,048 15,911 2,118 Interest expense 3,007 79 4,127 94 Income tax (benefit) expense (9,117 ) 1,746 5,342 644 Segment EBITDA 39,449 7,333 32,613 5,881 Derivative fair value adjustments (145 ) — (2,237 ) — Foreign currency transaction gains — (430 ) — (601 ) Loss (gain) on disposal of assets and costs from exit and disposal activities 1,940 (16 ) 1,258 880 Unconsolidated affiliates interest, tax, depreciation and amortization (1) 315 322 275 194 Contingent consideration remeasurement 1 — (15 ) — Stock-based compensation expense (benefit) 1,640 — (3,413 ) — ESOP deferred compensation 2,737 — 2,323 — Executive retirement expense (benefit) 73 — (170 ) — Transaction costs (2) 92 — — — Legal settlement (3) 1,800 — — — Restatement-related costs (4) 888 — 6,406 — Segment Adjusted EBITDA (5) $ 48,790 $ 7,209 $ 37,040 $ 6,354 Nine Months Ended December 31, 2017 2016 Domestic International Domestic International (In thousands) Reconciliation of Segment Adjusted EBITDA: Net income $ 61,837 $ 7,811 $ 43,704 $ 10,256 Depreciation and amortization 49,725 6,068 47,418 6,647 Interest expense 12,363 257 13,236 315 Income tax expense 12,583 3,229 31,319 4,209 Segment EBITDA 136,508 17,365 135,677 21,427 Derivative fair value adjustments (735 ) — (11,297 ) — Foreign currency transaction gains — (2,878 ) — (1,678 ) Loss on disposal of assets and costs from exit and disposal activities 10,253 215 2,040 1,037 Unconsolidated affiliates interest, tax, depreciation and amortization (1) 886 1,174 826 1,223 Contingent consideration remeasurement 33 — 42 — Stock-based compensation expense 5,140 — 2,699 — ESOP deferred compensation 7,946 — 7,428 — Executive retirement expense (benefit) 982 — (12 ) — Transaction costs (2) 1,149 — — — Legal settlement (3) 1,800 — — — Restatement-related costs (4) 3,390 — 21,391 — Segment Adjusted EBITDA (5) $ 167,352 $ 15,876 $ 158,794 $ 22,009 (1) Includes the proportional share of interest, income taxes, depreciation and amortization related to the South American Joint Venture and the Tigre-ADS USA joint venture, which are accounted for under the equity method of accounting. (2) Represents expenses recorded related to legal, accounting and other professional fees incurred in connection with the Company’s debt refinancing and potential asset acquisitions and dispositions. (3) Represents settlement agreement to resolve the Hayes matter discussed in “Note 9. Commitments and Contingencies.” (4) Represents expenses recorded related to legal, accounting and other professional fees incurred in connection with the restatement of prior period financial statements as reflected in the fiscal year 2015 Form 10-K and fiscal year 2016 Form 10-K/A. Fiscal 2018 expenses relate to the ongoing SEC Enforcement Division’s investigation and related shareholder litigation discussed in “Note 9. Commitments and Contingencies.” (5) A portion of the reduction in International EBITDA is related to transfer pricing. The reduction is fully offset by an increase in Domestic EBITDA. |
Background and Summary of Sig35
Background and Summary of Significant Accounting Policies - Additional Information (Detail) $ in Thousands | Aug. 01, 2017USD ($) | Dec. 31, 2017USD ($)Segment | Mar. 31, 2017USD ($) |
Schedule Of Organization And Summary Of Significant Accounting Policies [Line Items] | |||
Goodwill | $ 103,282 | $ 100,566 | |
Number of reportable segments | Segment | 2 | ||
Duraslot, Inc [Member] | |||
Schedule Of Organization And Summary Of Significant Accounting Policies [Line Items] | |||
Date of acquisition of business | Aug. 1, 2017 | ||
Acquisition of business | $ 2,300 | ||
Goodwill | $ 2,100 |
Loss on Disposal of Assets an36
Loss on Disposal of Assets and Costs from Exit and Disposal Activities - Additional Information (Detail) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2017USD ($)Facility | Dec. 31, 2016USD ($)Facility | Dec. 31, 2017USD ($)Facility | Dec. 31, 2016USD ($)Facility | |
Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations [Line Items] | ||||
Loss on disposal of assets and costs from exit and disposal activities | $ | $ 1,924 | $ 2,138 | $ 10,468 | $ 3,077 |
Number of manufacturing facilities closed | Facility | 3 | 1 | 3 | 1 |
Number of manufacturing facilities related to assets with shortened useful life | Facility | 2 | |||
Other Accrued Liabilities and Other Liabilities [Member] | 2018 Restructuring Plan [Member] | ||||
Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations [Line Items] | ||||
Severance liability related to restructuring plan | $ | $ 2,800 | $ 2,800 |
Loss on Disposal of Assets an37
Loss on Disposal of Assets and Costs from Exit and Disposal Activities - Summary of Loss on Disposal of Assets and Costs from Exit and Disposal Activities (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | |
Discontinued Operations And Disposal Groups [Abstract] | ||||
Accelerated depreciation | $ 3,561 | |||
Plant severance | $ 1,021 | 1,848 | ||
Headcount reduction | 2,577 | |||
Other restructuring activities | 56 | 56 | ||
Total 2018 Restructuring Plan activities | 1,077 | 8,042 | ||
Loss on other disposals and partial disposals of property, plant and equipment | 847 | $ 2,138 | 2,426 | $ 3,077 |
Total loss on disposal of assets and costs from exit and disposal activities | $ 1,924 | $ 2,138 | $ 10,468 | $ 3,077 |
Receivables and Allowance for38
Receivables and Allowance for Doubtful Accounts - Summary of Receivables (Detail) - USD ($) $ in Thousands | Dec. 31, 2017 | Mar. 31, 2017 |
Accounts Notes And Loans Receivable [Line Items] | ||
Receivables | $ 176,942 | $ 168,943 |
Trade Receivables [Member] | ||
Accounts Notes And Loans Receivable [Line Items] | ||
Receivables | 159,343 | 160,655 |
Refundable Income Taxes [Member] | ||
Accounts Notes And Loans Receivable [Line Items] | ||
Receivables | 1,468 | |
Other Miscellaneous Receivables [Member] | ||
Accounts Notes And Loans Receivable [Line Items] | ||
Receivables | $ 17,599 | $ 6,820 |
Receivables and Allowance for39
Receivables and Allowance for Doubtful Accounts - Additional Information (Detail) $ in Thousands | 9 Months Ended |
Dec. 31, 2017USD ($) | |
Accounts Notes And Loans Receivable [Line Items] | |
Proceeds from sale of officer life insurance | $ 5,959 |
Other Miscellaneous Receivables [Member] | |
Accounts Notes And Loans Receivable [Line Items] | |
Cash surrender value of officer life insurance | 7,200 |
Proceeds from sale of officer life insurance | 6,000 |
Other Miscellaneous Receivables [Member] | Other Accrued Liabilities [Member] | |
Accounts Notes And Loans Receivable [Line Items] | |
Insurance recoverable | $ 3,100 |
Inventories - Schedule of Inven
Inventories - Schedule of Inventories (Detail) - USD ($) $ in Thousands | Dec. 31, 2017 | Mar. 31, 2017 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 43,492 | $ 52,746 |
Finished goods | 171,553 | 205,684 |
Total inventories | $ 215,045 | $ 258,430 |
Inventories - Additional Inform
Inventories - Additional Information (Detail) - USD ($) | Dec. 31, 2017 | Mar. 31, 2017 |
Inventory Disclosure [Abstract] | ||
Work-in-process inventories | $ 0 | $ 0 |
Fair Value Measurement - Summar
Fair Value Measurement - Summary of Assets and Liabilities Carried at Fair Value (Detail) - Fair Value, Measurements, Recurring [Member] - USD ($) $ in Thousands | Dec. 31, 2017 | Mar. 31, 2017 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets at fair value on a recurring basis | $ 2,123 | $ 179 |
Contingent consideration for acquisitions | 640 | 1,348 |
Total liabilities at fair value on a recurring basis | 738 | 1,490 |
Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets at fair value on a recurring basis | 2,123 | 179 |
Total liabilities at fair value on a recurring basis | 98 | 142 |
Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent consideration for acquisitions | 640 | 1,348 |
Total liabilities at fair value on a recurring basis | 640 | 1,348 |
Diesel Fuel Contracts [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets | 772 | 179 |
Derivative liability | 142 | |
Diesel Fuel Contracts [Member] | Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets | 772 | 179 |
Derivative liability | $ 142 | |
Interest Rate Swap [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets | 1,351 | |
Derivative liability | 98 | |
Interest Rate Swap [Member] | Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets | 1,351 | |
Derivative liability | $ 98 |
Fair Value Measurement - Additi
Fair Value Measurement - Additional Information (Detail) - USD ($) | 9 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Mar. 31, 2017 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Fair value of assets and liabilities, additional transfers | $ 0 | $ 0 | |
Level 3 [Member] | South American Joint Venture [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Discount the future cash flow rates | 16.50% | ||
Senior Notes Payable [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Senior notes | $ 125,000,000 | $ 75,000,000 | |
Senior notes, fair value | $ 123,900,000 | $ 75,900,000 |
Fair Value Measurement - Summ44
Fair Value Measurement - Summary of Changes in Fair Value of Recurring Fair Value Measurements Using Unobservable Inputs (Detail) - Level 3 [Member] - Contingent Consideration [Member] - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Balance beginning | $ 735 | $ 1,997 | $ 1,348 | $ 2,858 |
Change in fair value | 1 | (15) | 33 | 42 |
Payments of contingent consideration liability | (96) | (169) | (741) | (1,087) |
Balance ending | $ 640 | $ 1,813 | $ 640 | $ 1,813 |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Detail) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Mar. 31, 2017 | |
Related Party Transaction [Line Items] | |||||
Dividend paid | $ 13,511,000 | $ 11,011,000 | |||
South American Joint Venture [Member] | |||||
Related Party Transaction [Line Items] | |||||
Company's ownership percentage | 50.00% | 50.00% | |||
Percentage of debt guarantee | 50.00% | ||||
Maximum potential payment under guarantee | $ 11,000,000 | $ 11,000,000 | |||
Maximum borrowings permitted under credit facility | 22,000,000 | $ 22,000,000 | |||
Debt, expiration date | Dec. 31, 2020 | ||||
Outstanding letters of credit | $ 14,200,000 | $ 14,200,000 | $ 16,000,000 | ||
Percentage of ownership in joint venture | 50.00% | 50.00% | |||
Receivables contributed | $ 5,800,000 | ||||
Allowance for doubtful accounts | $ 3,000,000 | 3,000,000 | |||
Fair value of additional investment in joint venture | 4,700,000 | 4,700,000 | |||
Gain on book value of receivables | 1,900,000 | ||||
Sales with related parties | 600,000 | $ 400,000 | 1,400,000 | 900,000 | |
Sale with joint ventures | 100,000 | $ 200,000 | 300,000 | $ 700,000 | |
South American Joint Venture [Member] | US Dollar Denominated Loans [Member] | |||||
Related Party Transaction [Line Items] | |||||
Outstanding letters of credit | $ 0 | $ 0 | |||
South American Joint Venture [Member] | Chilean Peso Denominated Loans [Member] | |||||
Related Party Transaction [Line Items] | |||||
Weighted average interest rate | 5.80% | 5.80% | |||
BaySaver [Member] | |||||
Related Party Transaction [Line Items] | |||||
Company's ownership percentage | 65.00% | 65.00% | |||
Tigre-ADS USA [Member] | |||||
Related Party Transaction [Line Items] | |||||
Company's ownership percentage | 49.00% | 49.00% | 49.00% | 49.00% | |
Percentage of debt guarantee | 49.00% | ||||
Maximum potential payment under guarantee | $ 4,400,000 | $ 4,400,000 | |||
Debt, expiration date | Aug. 2, 2018 | ||||
Outstanding letters of credit | $ 9,000,000 | $ 9,000,000 | 9,000,000 | ||
Weighted average interest rate | 3.25% | 3.25% | |||
Purchases from related party | $ 500,000 | $ 400,000 | $ 1,600,000 | $ 1,300,000 | |
Pipe Sales Joint Venture Agreement [Member] | |||||
Related Party Transaction [Line Items] | |||||
Proceeds from sales | 0 | $ 0 | 0 | $ 0 | |
Outstanding receivables from related party | $ 200,000 | ||||
Pipe Sales and Allied Products Joint Venture Agreement [Member] | BaySaver [Member] | |||||
Related Party Transaction [Line Items] | |||||
Proceeds from sales | 100,000 | 200,000 | |||
ADS [Member] | |||||
Related Party Transaction [Line Items] | |||||
Dividend payment received | 500,000 | ||||
ADS Mexicana Joint Venture Partner [Member] | |||||
Related Party Transaction [Line Items] | |||||
Dividend payment received | 500,000 | ||||
Maximum [Member] | Pipe Sales Joint Venture Agreement [Member] | |||||
Related Party Transaction [Line Items] | |||||
Outstanding receivables from related party | $ 100,000 | $ 100,000 | |||
Consolidated Entity Excluding Variable Interest Entities (VIE) [Member] | |||||
Related Party Transaction [Line Items] | |||||
Company's ownership percentage | 51.00% | 51.00% | 51.00% | 51.00% | |
Dividend paid | $ 1,000,000 | ||||
Guarantee percentage on credit facility | 100.00% | ||||
Maximum potential guarantee payments | 12,000,000 | $ 12,000,000 | |||
Guarantee description | The Company is the guarantor of 100% of a second credit facility for ADS Mexicana | ||||
Consolidated Entity Excluding Variable Interest Entities (VIE) [Member] | Maximum [Member] | |||||
Related Party Transaction [Line Items] | |||||
Cash payments for consulting services related to the operations of the business | $ 100,000 | $ 100,000 | $ 100,000 | $ 100,000 |
Debt - Long-Term Debt (Detail)
Debt - Long-Term Debt (Detail) - USD ($) | Dec. 31, 2017 | Dec. 11, 2017 | Mar. 31, 2017 |
Debt Instrument [Line Items] | |||
Total | $ 291,030,000 | $ 350,361,000 | |
Unamortized debt issuance costs | (3,216,000) | (1,723,000) | |
Current maturities | (26,833,000) | (37,789,000) | |
Long-term debt obligation | 260,981,000 | 310,849,000 | |
Equipment Financing [Member] | |||
Debt Instrument [Line Items] | |||
Revolving credit facility | 3,560,000 | 4,216,000 | |
ADS [Member] | Revolving Credit Facility [Member] | |||
Debt Instrument [Line Items] | |||
Revolving credit facility | 161,300,000 | 194,300,000 | |
ADS Mexicana [Member] | |||
Debt Instrument [Line Items] | |||
Revolving credit facility | 1,500,000 | ||
ADS Mexicana [Member] | Scotia Bank Revolving Credit Facility [Member] | |||
Debt Instrument [Line Items] | |||
Revolving credit facility | $ 0 | 1,000,000 | |
Term Note [Member] | |||
Debt Instrument [Line Items] | |||
Term Note | 72,500,000 | ||
Senior Notes Payable [Member] | |||
Debt Instrument [Line Items] | |||
Senior notes | 125,000,000 | 75,000,000 | |
Industrial Revenue Bonds [Member] | |||
Debt Instrument [Line Items] | |||
Industrial revenue bonds | $ 1,170,000 | $ 1,845,000 |
Debt (Master Loan and Security
Debt (Master Loan and Security Agreement) - Additional Information (Detail) - USD ($) | 12 Months Ended | |
Mar. 31, 2017 | Jun. 30, 2016 | |
Security Agreement for Equipment Financing [Member] | Maximum [Member] | ||
Debt Instrument [Line Items] | ||
Intercompany loans outstanding | $ 4,500,000 | |
Equipment Notes [Member] | ||
Debt Instrument [Line Items] | ||
Equipment notes | $ 4,600,000 | |
Weighted average fixed interest rate | 2.72% | |
Aggregate loan amount | $ 4,200,000 | |
Amortization period of the principal amount | 5 years |
Debt (Events Related to the Sec
Debt (Events Related to the Secured Bank Term Loans) - Additional Information (Detail) - Interest Rate Swaps [Member] - LIBOR [Member] | Jun. 28, 2017USD ($) |
Debt Instrument [Line Items] | |
Description of variable rate basis | 30-Day LIBOR |
Notional amount | $ 100,000,000 |
Fixed rate of interest | 1.8195% |
Maturity period | 5 years |
Debt (Events Related to the Sen
Debt (Events Related to the Senior Notes) - Additional Information (Detail) - Shelf Notes [Member] - USD ($) | Jun. 28, 2017 | Dec. 31, 2017 |
Debt Instrument [Line Items] | ||
Principal amount | $ 75,000,000 | |
Fixed rate of interest | 3.53% | |
Maturity period | 7 years | |
Debt instrument leverage fee | The rate is subject to an additional 100 basis point excess leverage fee if the calculated leverage ratio exceeds 3 to 1 at the end of a fiscal quarter. | |
Excess leverage fee | 1.00% | |
Minimum [Member] | ||
Debt Instrument [Line Items] | ||
Calculated leverage ratio for additional fee | 3.00% |
Debt (Events Related to the ADS
Debt (Events Related to the ADS Mexicana Scotia Bank Revolving Credit Facility) - Additional Information (Detail) - USD ($) | Dec. 11, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Mar. 31, 2017 |
Debt Instrument [Line Items] | ||||
Credit facility matured amount | $ 431,950,000 | $ 329,400,000 | ||
ADS Mexicana [Member] | ||||
Debt Instrument [Line Items] | ||||
Revolving credit facility | $ 1,500,000 | |||
ADS Mexicana [Member] | Scotia Bank Revolving Credit Facility [Member] | ||||
Debt Instrument [Line Items] | ||||
Credit facility matured amount | $ 5,000,000 | |||
Credit facility maturity date | Dec. 11, 2017 | |||
Revolving credit facility | $ 0 | $ 1,000,000 |
Debt (Secured Bank Term Loans)
Debt (Secured Bank Term Loans) - Additional Information (Detail) | Jun. 22, 2017USD ($) | Dec. 31, 2017Covenant |
Debt Instrument [Line Items] | ||
Number of financial convenants | Covenant | 2 | |
Revolving Credit Facility [Member] | ||
Debt Instrument [Line Items] | ||
Maximum borrowings permitted under credit facility | $ 550,000,000 | |
Line of credit facility, Increase | $ 150,000,000 | |
Weighted average interest rate | 3.51% | |
Credit agreement expiration date | Jun. 22, 2022 | |
Secured Bank Term Loans [Member] | ||
Debt Instrument [Line Items] | ||
Number of financial convenants | Covenant | 2 | |
Debt instrument, description | The Credit Agreement Leverage Ratio generally requires that at the end of any fiscal quarter, for the four fiscal quarters then ended, the Company will not permit the ratio of its total consolidated indebtedness to the Company’s Consolidated EBITDA (as defined in the Credit Agreement) to be greater than 4.00 to 1.00 (or 4.25 to 1.00 as of the date of any acquisitions permitted under the Credit Agreement for which the aggregate consideration is $100.0 million or greater). | |
Secured Bank Term Loans [Member] | Minimum [Member] | ||
Debt Instrument [Line Items] | ||
Ratio of indebtedness | 0.0400 | |
Secured Bank Term Loans [Member] | Maximum [Member] | ||
Debt Instrument [Line Items] | ||
Ratio of indebtedness | 0.0425 | |
Aggregate consideration | $ 100,000,000 | |
Ratio of EBITDA to Interest expense payable | 0.0300 |
Debt (Senior Notes) - Additiona
Debt (Senior Notes) - Additional Information (Detail) | Jun. 22, 2017USD ($) | Dec. 31, 2017Covenant |
Debt Instrument [Line Items] | ||
Number of financial convenants | Covenant | 2 | |
Secured Senior Notes [Member] | ||
Debt Instrument [Line Items] | ||
Senior notes | $ 175,000,000 | |
Debt instrument, description | The Private Self Agreement Leverage Ratio generally requires that at the end of any fiscal quarter, for the four fiscal quarters then ended, the Company will not permit the ratio of its total consolidated indebtedness to the Company’s Consolidated EBITDA (as defined in the Private Shelf Agreement) to be greater than 4.00 to 1.00 (or 4.25 to 1.00 as of the date of any acquisitions permitted under the Private Self Agreement for which the aggregate consideration is $100.0 million or greater). | |
Secured Senior Notes [Member] | Minimum [Member] | ||
Debt Instrument [Line Items] | ||
Maturity period | 10 years | |
Ratio of indebtedness | 0.0400 | |
Secured Senior Notes [Member] | Maximum [Member] | ||
Debt Instrument [Line Items] | ||
Ratio of indebtedness | 0.0425 | |
Aggregate consideration | $ 100,000,000 | |
Ratio of EBITDA to Interest expense payable | 0.0300 |
Debt - Maturities of Long-term
Debt - Maturities of Long-term Debt (Detail) - USD ($) $ in Thousands | Dec. 31, 2017 | Mar. 31, 2017 |
Debt Disclosure [Abstract] | ||
2,018 | $ 26,833 | |
2,019 | 26,168 | |
2,020 | 954 | |
2,021 | 758 | |
2,022 | 161,317 | |
Thereafter | 75,000 | |
Total | $ 291,030 | $ 350,361 |
Derivative Transactions - Sched
Derivative Transactions - Schedule of Cash Settlements and Net Losses and Net (Gains) on Mark-to-Market Adjustments for Changes in Fair Value of Derivative Contracts (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | |
Derivatives, Fair Value [Line Items] | ||||
Total net unrealized mark-to-market (gains) | $ (1,398) | $ (2,237) | $ (1,988) | $ (11,297) |
Total net realized (gains) losses | (65) | 2,531 | 82 | 8,381 |
Propylene Swaps [Member] | ||||
Derivatives, Fair Value [Line Items] | ||||
Total net unrealized mark-to-market (gains) | (1,380) | (8,027) | ||
Total net realized (gains) losses | 1,988 | 6,671 | ||
Diesel Fuel Contracts [Member] | ||||
Derivatives, Fair Value [Line Items] | ||||
Total net unrealized mark-to-market (gains) | (333) | (857) | (735) | (3,018) |
Total net realized (gains) losses | (203) | $ 543 | (204) | 1,928 |
Interest Rate Swaps [Member] | ||||
Derivatives, Fair Value [Line Items] | ||||
Total net unrealized mark-to-market (gains) | (1,065) | (1,253) | (252) | |
Total net realized (gains) losses | $ 138 | $ 286 | $ (218) |
Derivative Transactions - Addit
Derivative Transactions - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | |
Derivatives, Fair Value [Line Items] | ||||
Other non-operating income | $ 963 | $ 772 | $ 4,456 | $ 5,543 |
Gain On Derivative Instruments And Other Income, Net [Member] | Derivatives Contracts [Member] | ||||
Derivatives, Fair Value [Line Items] | ||||
Other non-operating income | $ 600 | $ 1,100 | $ 3,500 | $ 2,800 |
Commitments and Contingencies (
Commitments and Contingencies (Purchase Commitments) - Additional Information (Detail) - Inventory [Member] $ in Millions | 9 Months Ended |
Dec. 31, 2017USD ($) | |
Purchase Commitment, Excluding Long-term Commitment [Line Items] | |
Purchase contracts period range, start | 1 month |
Purchase contracts period range, end | 12 months |
Total purchase commitment | $ 17.8 |
Commitments and Contingencies57
Commitments and Contingencies (Litigation and Other Proceedings) - Additional Information (Detail) $ in Millions | Jan. 24, 2018USD ($) |
Subsequent Event [Member] | |
Purchase Commitment, Excluding Long-term Commitment [Line Items] | |
Litigation settlement amount | $ 1.8 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) $ in Thousands | Jan. 01, 2018 | Dec. 21, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Mar. 31, 2018 | Mar. 31, 2017 |
Income Taxes [Line Items] | ||||||||
Change in corporate income taxes | 21.00% | 35.00% | 31.50% | 35.00% | 31.50% | 35.00% | ||
Deferred tax attributes resulting in a tax benefit | $ (14,700) | |||||||
Estimated tax obligation on undistributed foreign earnings, tax expense | 900 | |||||||
Unrecognized tax benefit that would decrease income tax expense | $ 6,616 | 6,616 | $ 6,196 | |||||
Decrease in unrecognized tax benefit related to income tax expense | 6,600 | 6,600 | ||||||
Accrued interest and penalties related to unrecognized tax benefits | $ 1,800 | $ 1,800 | ||||||
Scenario, Forecast [Member] | ||||||||
Income Taxes [Line Items] | ||||||||
Change in corporate income taxes | 31.50% |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Effective Tax Rate and Statutory Federal Income Tax Rate (Detail) | Jan. 01, 2018 | Dec. 21, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 |
Income Tax Disclosure [Abstract] | ||||||
Federal statutory rate | 21.00% | 35.00% | 31.50% | 35.00% | 31.50% | 35.00% |
State and local taxes—net of federal income tax benefit | 4.70% | 4.60% | 4.70% | 4.60% | ||
Effect of tax rate of foreign subsidiaries | 0.10% | (0.40%) | (0.10%) | (0.40%) | ||
Uncertain tax position change | 1.70% | (6.50%) | (0.70%) | (1.30%) | ||
Qualified production activity credit | (2.80%) | (2.90%) | (2.80%) | (2.90%) | ||
Impact of tax reform | (58.20%) | (16.20%) | ||||
ESOP stock appreciation | 5.00% | 3.50% | 5.00% | 3.50% | ||
Return to provision - federal and state | (12.00%) | (3.60%) | ||||
Other | 0.60% | 0.50% | 0.80% | 0.20% | ||
Effective rate | (29.40%) | 33.80% | 18.60% | 38.70% |
Income Taxes - Unrecognized Tax
Income Taxes - Unrecognized Tax Benefits (Detail) $ in Thousands | 9 Months Ended |
Dec. 31, 2017USD ($) | |
Income Tax Disclosure [Abstract] | |
Balance as beginning of year | $ 6,196 |
Increases in tax positions for prior years | 4,434 |
Lapse of statute of limitations | (4,014) |
Balance at end of year | $ 6,616 |
Stock-Based Compensation - Summ
Stock-Based Compensation - Summary of Stock-based Compensation Expense (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Total stock-based compensation expense (benefit) | $ 1,640 | $ (3,413) | $ 5,140 | $ 2,699 |
Non-Employee Director [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Total stock-based compensation expense (benefit) | 312 | 991 | ||
Liability-Classified Stock Options [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Total stock-based compensation expense (benefit) | (3,580) | 2,181 | ||
Equity-Classified Stock Options [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Total stock-based compensation expense (benefit) | 898 | 2,991 | ||
Restricted Stock [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Total stock-based compensation expense (benefit) | 430 | 167 | 1,158 | 518 |
Cost of Goods Sold [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Total stock-based compensation expense (benefit) | 45 | (40) | 135 | (40) |
Selling Expenses [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Total stock-based compensation expense (benefit) | 27 | (70) | 79 | 130 |
General and Administrative Expenses [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Total stock-based compensation expense (benefit) | $ 1,568 | $ (3,303) | $ 4,926 | $ 2,609 |
Stock-Based Compensation (Stock
Stock-Based Compensation (Stock Options) - Additional Information (Detail) - USD ($) $ in Thousands | Dec. 31, 2017 | Apr. 01, 2017 | Mar. 31, 2017 |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |||
Paid-in capital | $ 357,684 | $ 13,700 | $ 755,787 |
Stock-Based Compensation (2017
Stock-Based Compensation (2017 Omnibus Plan) - Additional Information (Detail) - 2017 Omnibus Plan [Member] - shares | 3 Months Ended | 9 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2017 | May 24, 2017 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Number of restricted stock granted | 100,000 | 100,000 | |
Number of nonqualified stock options granted | 200,000 | 200,000 | |
Maximum [Member] | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Common stock approved for issuance | 3,500,000 |
Stock-Based Compensation - Sche
Stock-Based Compensation - Schedule of Estimate Fair Value of Stock-Options Granted (Detail) | 9 Months Ended |
Dec. 31, 2017$ / shares | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |
Expected stock price volatility, minimum | 32.10% |
Expected stock price volatility, maximum | 35.60% |
Risk-free interest rate, minimum | 1.90% |
Risk-free interest rate, maximum | 2.20% |
Minimum [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |
Common stock price | $ 19.35 |
Weighted-average expected option life (years) | 5 years 7 months 6 days |
Dividend yield | 1.10% |
Maximum [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |
Common stock price | $ 22.95 |
Weighted-average expected option life (years) | 6 years |
Dividend yield | 1.50% |
Net Income Per Share and Stoc65
Net Income Per Share and Stockholders' Equity - Summary of Net Income Per Share (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | |
NET INCOME PER SHARE—BASIC: | ||||
Net income attributable to ADS | $ 32,105 | $ 9,053 | $ 67,710 | $ 51,060 |
Accretion of redeemable noncontrolling interest | (399) | (1,141) | ||
Dividends to redeemable convertible preferred stockholders | (456) | (407) | (1,415) | (1,247) |
Dividends paid to unvested restricted stockholders | (12) | (32) | (47) | (86) |
Net income available to common stockholders and participating securities | 31,637 | 8,215 | 66,248 | 48,586 |
Undistributed income allocated to participating securities | (2,766) | (503) | (5,588) | (4,066) |
Net income available to common stockholders | $ 28,871 | $ 7,712 | $ 60,660 | $ 44,520 |
Weighted average number of common shares outstanding – Basic | 55,917 | 54,557 | 55,497 | 54,354 |
Net income per common share – Basic | $ 0.52 | $ 0.14 | $ 1.09 | $ 0.82 |
NET INCOME PER SHARE—DILUTED: | ||||
Net income available to common stockholders – Diluted | $ 28,871 | $ 7,712 | $ 60,660 | $ 44,520 |
Weighted average number of common shares outstanding – Basic | 55,917 | 54,557 | 55,497 | 54,354 |
Assumed exercise of stock options | 542 | 610 | 627 | 802 |
Weighted average number of common shares outstanding – Diluted | 56,459 | 55,167 | 56,124 | 55,156 |
Net income per common share – Diluted | $ 0.51 | $ 0.14 | $ 1.08 | $ 0.81 |
Potentially dilutive securities excluded as anti-dilutive | 6,060 | 6,134 | 6,252 | 6,282 |
Net Income Per Share and Stoc66
Net Income Per Share and Stockholders' Equity - Additional Information (Detail) - USD ($) $ in Thousands | Nov. 01, 2017 | Dec. 31, 2017 | Dec. 31, 2017 | Feb. 28, 2017 |
Equity Class Of Treasury Stock [Line Items] | ||||
Repurchases of common stock | $ 7,947 | |||
Stock repurchase program amount authorized | $ 50,000 | |||
Common Stock [Member] | ||||
Equity Class Of Treasury Stock [Line Items] | ||||
Common stock repurchases, Shares | 0 | 400,000 | ||
Repurchases of common stock | $ 7,900 | |||
Stock repurchase program amount authorized | $ 42,100 | $ 42,100 | ||
Treasury stock retired | 97,700,000 | 97,745,000 |
Business Segments Information -
Business Segments Information - Additional Information (Detail) | 9 Months Ended |
Dec. 31, 2017Segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 2 |
Number of operating segments | 2 |
Business Segments Information68
Business Segments Information - Schedule of Revenue from Reportable Segments by Product Type (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | |
Segment Reporting Information [Line Items] | ||||
Total Net sales | $ 320,832 | $ 294,716 | $ 1,080,240 | $ 1,013,077 |
Domestic [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Total Net sales | 276,872 | 254,312 | 948,253 | 878,848 |
Domestic [Member] | Pipe [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Total Net sales | 196,402 | 182,061 | 676,079 | 627,397 |
Domestic [Member] | Allied Products [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Total Net sales | 80,470 | 72,251 | 272,174 | 251,451 |
International Segment [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Total Net sales | 43,960 | 40,404 | 131,987 | 134,229 |
International Segment [Member] | Pipe [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Total Net sales | 33,166 | 32,550 | 101,139 | 105,832 |
International Segment [Member] | Allied Products [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Total Net sales | $ 10,794 | $ 7,854 | $ 30,848 | $ 28,397 |
Business Segments Information69
Business Segments Information - Schedule of Additional Financial Information Attributable to Reportable Segments (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Mar. 31, 2017 | |
Segment Reporting Information [Line Items] | |||||
Net sales | $ 320,832 | $ 294,716 | $ 1,080,240 | $ 1,013,077 | |
Segment Adjusted EBITDA | 55,999 | 43,394 | 183,228 | 180,803 | |
Interest expense | 3,086 | 4,221 | 12,620 | 13,551 | |
Income tax (benefit) expense | (7,371) | 5,986 | 15,812 | 35,528 | |
Depreciation and amortization | 17,852 | 18,029 | 55,793 | 54,065 | |
Equity in net loss (income) of unconsolidated affiliates | (768) | 1,483 | (496) | 2,394 | |
Capital expenditures | 8,089 | 12,708 | 35,124 | 36,504 | |
Investments in unconsolidated affiliates | 13,269 | 13,269 | $ 8,986 | ||
Total identifiable assets | 1,013,234 | 1,013,234 | 1,046,285 | ||
Intersegment Eliminations [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Total identifiable assets | (8,911) | (8,911) | (5,708) | ||
Domestic [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 276,872 | 254,312 | 948,253 | 878,848 | |
Segment Adjusted EBITDA | 48,790 | 37,040 | 167,352 | 158,794 | |
Interest expense | 3,007 | 4,127 | 12,363 | 13,236 | |
Income tax (benefit) expense | (9,117) | 5,342 | 12,583 | 31,319 | |
Depreciation and amortization | 15,804 | 15,911 | 49,725 | 47,418 | |
Equity in net loss (income) of unconsolidated affiliates | 952 | 348 | 1,607 | 375 | |
Capital expenditures | 7,820 | 9,829 | 33,601 | 31,820 | |
Investments in unconsolidated affiliates | 819 | 819 | 2,427 | ||
Total identifiable assets | 887,724 | 887,724 | 917,006 | ||
International Segment [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 43,960 | 40,404 | 131,987 | 134,229 | |
Segment Adjusted EBITDA | 7,209 | 6,354 | 15,876 | 22,009 | |
Interest expense | 79 | 94 | 257 | 315 | |
Income tax (benefit) expense | 1,746 | 644 | 3,229 | 4,209 | |
Depreciation and amortization | 2,048 | 2,118 | 6,068 | 6,647 | |
Equity in net loss (income) of unconsolidated affiliates | (1,720) | 1,135 | (2,103) | 2,019 | |
Capital expenditures | 269 | $ 2,879 | 1,523 | $ 4,684 | |
Investments in unconsolidated affiliates | 12,450 | 12,450 | 6,559 | ||
Total identifiable assets | $ 134,421 | $ 134,421 | $ 134,987 |
Business Segments Information70
Business Segments Information - Schedule of Reconciliation of Segment Adjusted EBITDA to Net Income (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | |
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||
Net income | $ 32,105 | $ 9,053 | $ 67,710 | $ 51,060 |
Interest expense | 3,086 | 4,221 | 12,620 | 13,551 |
Income tax (benefit) expense | (7,371) | 5,986 | 15,812 | 35,528 |
Fair market value adjustments to derivatives | (1,398) | (2,237) | (1,988) | (11,297) |
Loss (gain) on disposal of assets and costs from exit and disposal activities | 1,924 | 2,138 | 10,468 | 3,077 |
Stock-based compensation expense (benefit) | 1,640 | (3,413) | 5,140 | 2,699 |
Domestic [Member] | ||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||
Net income | 29,755 | 7,233 | 61,837 | 43,704 |
Depreciation and amortization | 15,804 | 15,911 | 49,725 | 47,418 |
Interest expense | 3,007 | 4,127 | 12,363 | 13,236 |
Income tax (benefit) expense | (9,117) | 5,342 | 12,583 | 31,319 |
Segment EBITDA | 39,449 | 32,613 | 136,508 | 135,677 |
Fair market value adjustments to derivatives | (145) | (2,237) | (735) | (11,297) |
Loss (gain) on disposal of assets and costs from exit and disposal activities | 1,940 | 1,258 | 10,253 | 2,040 |
Unconsolidated affiliates interest, tax, depreciation and amortization | 315 | 275 | 886 | 826 |
Contingent consideration remeasurement | 1 | (15) | 33 | 42 |
Stock-based compensation expense (benefit) | (1,640) | 3,413 | (5,140) | (2,699) |
ESOP deferred compensation | 2,737 | 2,323 | 7,946 | 7,428 |
Executive retirement expense (benefit) | (73) | 170 | (982) | 12 |
Transaction costs | 92 | 1,149 | ||
Legal settlement | 1,800 | 1,800 | ||
Restatement-related costs | 888 | 6,406 | 3,390 | 21,391 |
Segment Adjusted EBITDA | 48,790 | 37,040 | 167,352 | 158,794 |
International Segment [Member] | ||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||
Net income | 3,460 | 3,025 | 7,811 | 10,256 |
Depreciation and amortization | 2,048 | 2,118 | 6,068 | 6,647 |
Interest expense | 79 | 94 | 257 | 315 |
Income tax (benefit) expense | 1,746 | 644 | 3,229 | 4,209 |
Segment EBITDA | 7,333 | 5,881 | 17,365 | 21,427 |
Foreign currency transaction gains | (430) | (601) | (2,878) | (1,678) |
Loss (gain) on disposal of assets and costs from exit and disposal activities | (16) | 880 | 215 | 1,037 |
Unconsolidated affiliates interest, tax, depreciation and amortization | 322 | 194 | 1,174 | 1,223 |
Segment Adjusted EBITDA | $ 7,209 | $ 6,354 | $ 15,876 | $ 22,009 |
Subsequent Events - Additional
Subsequent Events - Additional Information (Detail) $ / shares in Units, $ in Millions | 9 Months Ended |
Dec. 31, 2017USD ($)$ / shares | |
Other Miscellaneous Receivables [Member] | |
Subsequent Event [Line Items] | |
Cash surrender value of officer life insurance | $ | $ 7.2 |
Fourth Quarter [Member] | |
Subsequent Event [Line Items] | |
Dividend payable date | Mar. 15, 2018 |
Dividend payable, date of record | Mar. 1, 2018 |
Common Stock [Member] | |
Subsequent Event [Line Items] | |
Cash dividend declared | $ / shares | $ 0.07 |