Advanced Drainage Systems CEO on its role in building resilient water infrastructure

Well, thank you for having us. It's an exciting time for us to celebrate 10 years of being on the stock exchange.

Well, I think over the last 10 years, a couple things. One, I think we've really sharpened our focus over these 10 years on storm water management. That's what we do. That's our promise: to protect and manage water, the world's most precious resource. And we do this across communities across North America. I think that sharpened focus of really understanding what we do has led to some of the performance we've had and has allowed us to reinvest at a pretty good rate, both organically, spending capital on machinery, new initiatives, penetrating new territories, gaining participation versus alternative materials, and to make acquisitions over that time. Five years ago we made a big one with Infiltrator, which is our other business, and that wouldn't have been possible really without being part of the New York Stock Exchange and that access to capital, but also that sharpened execution and focus.

We play a lot of roles in that, as a matter of fact, across a wide variety of end markets. As you know, water events are becoming more frequent and more intense. Our products really help mitigate the flooding that could occur during these events. We make storm water products that capture the water, drain it, convey it, that's the pipe around a piece of property, storage so it can be stored and then cleaned up and released back into the watershed. That's our solution. So as these events become more intense and more frequent, often there is additional volume of water that has to be taken care of, new installations, maybe the rewriting of the regulations that govern storm water design in an area. It's an intensely local business from that perspective. So I think we play a very big role in mitigating these issues.

I tell people we make places a better place to live. We improve the quality of life with our products in a neighborhood or on a piece of property. We participate from 5 acres to 5,000 acres, a wide variety of things. What we do is, when our products are applied on these sites, we're preventing the pooling of water, the flooding of a street, because it's captured, moved, usually stored appropriately, and then discharged cleanly to the watershed. Our teams, our engineers, are working with local departments of engineering, local civil engineering firms, departments of transportation. These are all the folks that are designing these storm water systems. And it's all about making those areas or those neighborhoods good places to live. No one wants to live in a neighborhood that floods.

For the next 10 years, we think there's a lot of really nice tailwinds. I mentioned this increase in intensity and frequency of storms, that's driving a lot of demand. Many areas, including here in the tri-state area, are rewriting their storm water regulations to account for that additional water that needs to be managed. That's going on in Houston, Texas, South Florida, lots of different things around cleaning up water. In our application, it rains, that water hits an impervious surface like a road or a parking lot, sediment and oils come off of that. Our products then clean that out and reintroduce it to the watershed. So clean water is a big part of our future also. We're investing at a pretty good rate in new machinery, safety, redesigning our equipment for more ergonomically friendly, hands-off type of thing. That's really what's in our future. And then we announced an acquisition yesterday of a company called Areno that makes advanced treatment systems for on-site septic wastewater. That's a mouthful, but our other business, Infiltrator, makes on-site septic systems. If you're not connected to a centralized system, you're in an on-site system, and there's a tank and a leach field. Think of a rural area where a lot of those are, or a very fast growing area where the municipal centralized system hasn't caught up. There's a lot of work going on there around what we call advanced treatment systems, which remove nitrogen at a faster rate from the effluent before it seeps back into the ground. In Florida, Chesapeake Bay, all these areas are using these kinds of products. And Areno fits in with us very nicely, both geographically and from a technology standpoint. So there'll be some acquisitions in our future. We have a good balance sheet, we've worked hard to get that, and we want to use it both organically and inorganically over the future to grow the business with these nice tailwinds.

Yeah, it's been a thrill for us too. So thank you very much. And we're equally excited about being part of the New York Stock Exchange family.