WMS · CIK 1604028
What Advanced Drainage Systems, Inc. told the SEC could break it.
Advanced Drainage Systems' register is dominated by its exposure to resin costs. HDPE and PP resins are its principal raw materials, with prices that swing alongside crude oil and natural gas — a 1% move in resin prices shifts cost of goods sold by about $4.3 million — and it cautions it cannot reliably pass those increases through to customers. That same supply chain is exposed to new tariff policies affecting resin price and availability, while on the demand side its ten largest customers made up roughly 50% of fiscal 2026 net sales under no long-term arrangements, so a customer loss or consolidation could materially hurt results.
3 self-disclosed vulnerabilities, pulled from its own filings, each in the company’s words, with the source. This is the risk register almost nobody reads.
In its own words
What could break it.
Commodity & input dependence
- HDPE and PP (polypropylene) resins — principal raw materials; tied to crude oil/natural gas; 1% resin = $4.3M COGShigh
Advanced Drainage Systems' cost of goods sold is driven by HDPE and PP resins, its principal raw materials, whose prices fluctuate with crude oil and natural gas prices and resin-supplier capacity; a 1% increase in resin price raises COGS by ~$4.3 million, and the company cannot reliably estimate its ability to pass through increases.
“A 1% increase in the price of resin would increase our cost of goods sold by approximately $4.3 million. Inflation Risk - Our cost of goods sold is subject to inflationary pressures and price fluctuations of the raw materials we use, primarily HDPE and PP resins.”
SEC filing →As of 2026
Customer concentration
- ten largest customers = ~50% of net sales; no long-term arrangementsmedium
Advanced Drainage Systems' ten largest customers generated approximately 50% of net sales in fiscal 2026, and it does not have long-term arrangements with many customers, so they may cease purchasing without notice; loss of a significant customer or customer consolidation could materially harm results.
“Our ten largest customers generated approximately 50% o f our net sales in fiscal 2026. Because we do not have long-term arrangements with many of our customers, such customers may cease purchasing our products without notice or upon short notice to us.”
SEC filing →As of 2026
Regulatory & policy
- new tariff policies affecting price/availability of resins and end-market demandmedium
New tariff policies, alongside resin price/availability fluctuations, are cited by ADS as a risk to obtaining adequate resin supplies and passing through price increases; its cyclical non-residential, residential, agricultural and infrastructure end markets are also sensitive to tariffs and other trade policies.
“Fluctuations in the price and availability of resins, our principal raw materials, new tariff policies and our inability to obtain adequate supplies of resins from suppliers and pass on resin price increases to customers could adversely affect our business, financial condition, results of operations and cash flows.”
The hidden graph
Who it depends on, and who depends on it.
Relationships surfaced from filings, including ones disclosed by the other side, which is how the non-obvious ones come to light.
Its customers
“One customer, Ferguson Enterprises, accounted for approximately 10.4 % and 19.1 % of Receivables at March 31, 2026 and 2025, respectively, and Core & Main accounted for approximately 10.4 % of Receivables at March 31, 2025.”
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