Advanced Drainage Systems, the largest plastics recycling company in North America, increased sales at the end of 2023 as it experienced rising demand for its water management products.
ADS, a Hilliard, Ohio-based manufacturer of water management systems made from recycled and virgin plastic, reported sales of $662.4 million in its third fiscal quarter (the last three months of the 2023 calendar year). That’s up 1.1% over the same period the prior year.
It’s a welcome change for the huge plastics end user, which saw sales plummet 8% during the last three months of 2022. The sales increase was driven by improvement in U.S. construction and infrastructure activity, the company noted in an analysis of the results.
“Despite ongoing headwinds from higher interest rates, credit tightening and economic uncertainty, volume increased in the quarter, primarily driven by stronger demand in the infrastructure, residential and agriculture markets,” CEO Scott Barbour said in a statement on the earnings.
The demand growth was profitable for the company: ADS reported net income of $106.9 million for the quarter, up a substantial 28% compared to the same quarter in 2022.
ADS consumes more than 500 million pounds of scrap plastic per year, making up about 48% of its resin feedstock. In the company’s most recent annual report published in May 2023, it reported processing 360 million pounds of post-consumer and post-industrial HDPE and 130 million pounds of post-consumer and post-industrial PP during the 2023 fiscal year.
The company has a goal to recycle 1 billion pounds of scrap plastic per year by 2032, according to its latest sustainability report published in October.
Despite the late-year stability, the previous drop in sales continues to drag down the company’s year-to-date results. The company reported $2.2 billion in sales for the nine months ending Dec. 31, compared with $2.5 billion during the prior-year period.
ADS currently operates 70 manufacturing plants and 40 distribution centers.
