WMS earnings call transcript, November 5, 2026

And whatever, whatever, you know, small momentum was in the residential piece, particularly of the land development piece off the board. So our only real change and reflection on our. Command is in that is in that area. The non-residential, why we adjusted our outlet for the market a little bit, you know, our forecast is kind of hanging in there, driven by the allied products, driven by our penetration with particularly the polypropylene. Clink pipe, just our scale to be able to address any market in the country. That piece we still feel pretty good about. But that, I think that's kind of how I check. The only change I saw in that. Got it. Okay, no, that's perfect. Yeah, that's a great caller.

Thank you for that.

Secondly, NDS, I heard you mention you're sort of getting the ball rolling on cross-selling. I know the revenue synergies would have not been part of the initial guidance there, so maybe on both revenue synergies, kind of update us on or any more caller on how that is advancing there. And then... You know, where are you on the cost synergies as well since that deal closure? Thank you. All right. This would be Scott B. again. NDS is performing quite well. I think they've had their most successful six months from kind of an economic standpoint in their history of their company, you know, since being with us. And I can tell you that the work. We're doing with that. Mike's team is really quite good. And both organizations leaning in well. So while we've seen a lot of quoting and some product movement on the cross-selling, really it's just them performing well. Against everything we've asked them to do and taking advantage of some things in the market for them. So they had a good revenue year over year in the first six months and they had good profitability year over year in the first six months. We see other good things coming along from a from a cash flow and cost performance perspective there. As you probably know, that cross selling takes a while to get things going. I think that the gears are really meshing and starting to move there. Do you add anything, Mike, on the estimates?

You asked about the synergies. I would say we're tracking ahead of our year one plan and synergies. That's gone very well. We're starting to see the benefits of that. I would say we've, as we've kind of owned the business now for several months, we've uncovered other opportunities, we think, to that $25 million target we had. But just reemphasize, like what Scott said, the cross-selling just continues. kicked off. You know, very encouraged about what we're seeing early. Hasn't turned into, you know, a material amount of orders yet, but the momentum for that will build through the year. And, you know, I would expect that the bigger in pack from that will come next fiscal year versus, you know, in the remaining months that we have this fiscal year. Excellent. Well, thanks, guys. Good luck.

So on the latter part of that, no on transportation cost. Still something that we're managing through. But again, we've talked about that as something that continues to accelerate on us as we look particularly, you know, sequentially in year over year. So on the resin cost side of the house. Timing in the first half. But second quarter, we still project will be the high end of that on a college basis. We obviously look at what we procure, how it sits on the balance sheet, and when it comes through to the income statement. So again, Q2 is going to be the high watermark. But that being said, when you look at 2H, that's going to be at a relatively higher steady level. And in the first half of the year, we had not as much in Q1, but more in Q2. To the pricing getting in front of that, as we saw in Q1. So again, Q2 is the high watermark, but we're still going to see elevated res as we go into 2H. But it's not going to be as high as what we saw in Q1. It's not going back down. That's for sure. Still elevated. Appreciate that caller. And then I guess if I can just take a stab at the EBITDA bridge. I think in the back half, the outlook implies that your total EBITDA is down, I think, about 27 million year over year at the midpoint. I mean, should we think of, based on what you guys are saying, that the price mix materials? Bucket plus the manufacturing and transportation buckets will combined remain positive year over year, which will be offset by pressure on the others. I know you guys had mentioned that organic volume should be up, so just trying to get some help on how we should make it.

Think about that. Yeah, organic volume should be up below single digit, but absolutely, you said it well. When we look at price material costs, that bar will continue to be favorable. When you look at transportation headwinds that we have, again, that pricing will. We'll offset the volume as we look at.

Thanks, guys.

We can obviously back into fiscal 2H expectations given the reset guide, and you've given some good color on the bridge, 2H versus 1H. Anything else you can offer on revenue and edict.cad? for giving current visibility?

No, I think, you know, we're trying to stay away from giving kind of quarterly guidance, Brian. So I think it's the most important takeaways. Our first low single digit organic growth in 2H. Again, we saw that in 1H. So again, we're going to grow organically, even in these down end markets. That's key takeaway number one. Key takeaway. Key takeaway number two, pricing is covering not only material costs, but the transportation cost headwinds that we have. Net-net. And that is going to continue. You saw the bridge we put out there for the first half of the year, year to date September. And again, we'll see. The same in 2-H. It won't be that, you know, robust of a spread, if you will, but it's still going to cover it more on a dollar-for-dollar basis as we go through 2-H. But that's a key takeaway. Price cost, favorable. So organic, low-single-digit growth. So those would be two of the key takeaways I would make sure that you have. Okay. Understood completely. And then hopefully we could focus a bit more on storm traps. Why was that, or why is that the right answer? It's a free to expand in a large volume space constraint vertical. And we know snapshot TNL metrics, but you know, how fast has storm trap been growing over recent years and recent past and how significant could or should cross selling opportunities. B going forward. Any related color would be great. Yeah.

Hey, Brian, it's, it's Mike Higgins. So, you know, why that's the right product for us in these large volume kind of space constrained deep app. You know, clearly, you know, StormTech is a market leader in those applications. But, you know, the chambers, you know, are best suited when, you know, you have space. You know, you're not footprint constrained and you don't have to go too deep to get the storage you require. When you get into a situation where you're footprint constrained, you need larger volumes of storage, you need to go deeper. And the vault provides, you know, the best solution in those type of projects or in those type of applications. And as we, you know, continue to look at the segments, you know, we sell into those four parts of the life cycle. of a raindrop. You know, we want to have a full set of solutions for people across, you know, specifically storage in the treatment segment and capture. So, you know, if you look at what we have today, you know. We have pipe can be used in that application. We have chamber, plastic chambers with storm tech and cold tech. And now with storm trap, you know, we have these vault products to kind of cover the spectrum of. Applications and solutions you would need. And that makes we think makes us more valuable, you know, to our engineering customers and contractors. The second part of your question about the cross selling. You know, we, we, we think that's going to be, you know, pretty strong going forward. You know, obviously they have the same type of go to market strategy. So it fits very well with us. It's very engineering centric, spec driven.

And, you know, today, you know, we're, you know, they have basically a vault product and kind of a smaller water quality product line. And so we can open access to their salespeople, to all of our. And then this just also we can open up further engineering customers and engineering contacts of their salespeople. So this really enhances our scale through that specification community.

Makes a lot of sense.

Thanks again.

So, I'll take this one. This is Scott Barber. I would not say there's any major change. You know, I think there, in fact, there might have been some retreat in some areas because of the. Inflationary pressure, particularly rapid rises in materials and the transportation, make it a little harder for smaller guys to compete against us. Many, many times they don't have the balance sheet we have. They don't have a fleet. Like we do, where they can control the cost a bit more of the transportation of the product. So I would say it's gotten any more competitive. And I would also say, perhaps in some areas, it seems that people take a step back. That said, we have to remain sharp with the service and economics we provide in the market. So we continue to focus on that every day. with our work in the various regions. Okay, that's helpful. I want to ask just on a couple of the smaller end markets, infrastructure and agriculture. Just given the outside sales declines in the second quarter. Anything to call out there?

This is Scott Barber. The answer to your question is no.

Thank you, Trey.

This marks the end of the question and answer session. I will now turn the call back to Mr. Scott Barber for closing remarks. All right.

Thank you for, for those, uh, questions and, uh, we appreciate opportunity to provide clarity and, and what we, we understand is a lot of movement, um, in, in that first quarter, in that first half. And. In the end of the year here. Um, as you guys know as well, I mean, we're, we're pretty focused on, on executing against our plan, uh, and, and sharing with y'all, uh, how we're going about doing that. We have confidence. We're going, we had really good board meeting and committee meetings this week. You know, I think we're, we're well aligned. Uh, we're anxious to close the storm trap, uh, the, uh, acquisition here this quarter. Uh, we're really looking forward to getting in and closely working with. That team, uh, Nate and his team on the growth opportunities there. It's a, you know, the question was asked about, you know, how we build this portfolio. And if you, if you guys recall what I, what we talked about on the capture, where we had. Had a very nice bespoke product line with Nyloplast. We added in a market leading standard product with the NDS. I think if you look at our storage, this retention, detention market, it was kind. Kind of built around StormTech. We added in the Coltech product line. We added in the Aquabox, you know, Crate product. Think of this StormTrap as just adding to what I call our stack of solutions. For a very attractive, nicely growing market in that retention and detention.

And StormTrap has been growing a little faster than we have in that market. And we were growing pretty well in that for ourselves. So, we'll continue to look at how we added that package over time. And I think we feel good about where we're set up right now. So, thanks. And we look forward to being on the call with a group of you here.