How do you interpret US — business acquisition contingent consideration adjustments?

An increase in expense indicates that acquired businesses are performing better than expected, triggering higher payout obligations.

Advanced Drainage Systems WMS US — Business Acquisition Contingent Consideration Adjustments

Discontinued — last reported Q4 '18

Similar metrics at other companies

WTRGNon Regulated Businesses — Business Combination Contingent Consideration Arrangements Change In Amount Of Contingent Consideration Liability1

6,750,000%0.0pp

BROVarious — Business Acquisitions Contingent Consideration At Fair Value

$3.21M+58.9%

AMWater Handling — Business Acquisition Contingent Consideration Accretion

$2.75M—

HSICBusiness Combination Contingent Consideration Arrangements Change In Fair Value Of Contingent Consideration In Connection With Business Acquisition

-$500K-104%

VMI

VMIConsolidation Eliminations — Increase Decreasein Fair Valueof Contingent Consideration

$0—

COKEFair value adjustment of acquisition related contingent consideration

$53.39M+25.0%

Other financials

Income statement

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Revenue$676.8M+9.9%

Gross profit$237.7M+5.0%

Operating income$53.3M-54.4%

Net income$32.9M-57.4%

EPS (diluted)$0.42-57.6%

Balance sheet

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Cash & equivalents$223.0M-52.5%

Total debt$1.8B+23.6%

Total equity$1.9B+21.8%

Total assets$4.5B+22.1%

Cash flow

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Operating cash flow$39.9M-3.2%

CapEx$53.0M+14.0%

Free cash flow-—

Valuation

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Market cap$11.27B+26.7%

Enterprise value$12.89B+30.2%

P/E26.4×+6.7×

P/S3.7×+0.6×

Profitability

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Gross margin38.3%+0.6pp

Operating margin20.3%-2.3pp

Net margin14%-1.5pp

FCF margin19.1%+6.2pp

Returns & leverage

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Return on equity25.2%-8.4pp

Debt / equity1×0.0×

Current ratio2.4×-0.9×

Where this comes from

Reported directly by Advanced Drainage Systems in its filing.

Tagged under the XBRL concept wms:BusinessAcquisitionContingentConsiderationAdjustments.

The official record: Advanced Drainage Systems’s 10-K, filed May 30, 2019, on SEC EDGAR. View the filing →

Questions, answered.

What does US — business acquisition contingent consideration adjustments mean?: Adjustments to the estimated value of future payments owed to sellers of acquired businesses in the US.
How do you interpret US — business acquisition contingent consideration adjustments?: An increase in expense indicates that acquired businesses are performing better than expected, triggering higher payout obligations.
How does US — business acquisition contingent consideration adjustments compare across companies?: Standard in companies with active M&A strategies; often found in notes regarding fair value measurements.