Intro/Outro:
From the New York Stock Exchange on the corner of Wall and Broad Streets in New York City, welcome Inside the ICE House. Our podcast from Intercontinental Exchange is your go-to for the latest on markets, leadership, vision and business. For over 230 years, the NYSE has been the beating heart of global growth. Each week we bring you inspiring stories of innovators, job creators and the movers and shakers of capitalism here at the NYSE and ICE's exchanges around the world. Now let's go Inside the ICE House, here's your host Lance Glinn.
Lance Glinn:
In 2012 Hurricane Sandy inundated New Jersey with much of the state receiving five to 10 inches of rain. South Jersey's Wildwood was hit with over a foot, the largest amount recorded. The storm wreaked havoc on homes, buildings and the iconic Jersey Shore boardwalks, causing approximately $30 billion dollars in damages. When Sandy made landfall I was just a junior in high school, admittedly more focused on the unexpected week off than the devastation around me. My family was fortunate, we lost power for a week, but our home suffered no flood damage, just a few missing shingles and a downed tree from the 70 to 80-mile-per-hour winds that accompanied the storm.
That year the United States endured $11 billion dollar weather and climate disasters, with total economic damages exceeding $100 billion dollars. At the time it was considered one of the more severe years for such events in the country's history. Fast-forward to 2023 and the nation has faced more than double, a total of $27 billion dollar weather and climate disasters, the highest number on record. The increasing frequency and severity of storms and flooding demand a stronger focus on water infrastructure and management. Leading this industry is Advanced Drainage Systems, that's NYSE ticker symbol WMS. Under the leadership of today's guest, President and CEO Scott Barbour, ADS is helping communities thrive by advancing the future of water management and making the world a better place to live.
Today Inside the ICE House with Scott Barbour, we'll discuss America's water management infrastructure and whether recent legislation has helped the country mitigate the impact of natural disasters. We'll also explore recent innovations from ADS and the company's commitment to sustainability. Our conversation with Scott Barbour, President and CEO of Advanced Drainage Systems is coming up right after this.
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Lance Glinn:
Welcome back, remember to subscribe wherever you listen and rate and review us on Apple Podcasts so that others know where to find us. Our guest today, Scott Barbour, is the President and CEO of Advanced Drainage Systems, that's NYSE ticker symbol WMS, and has served in that role since 2017. Prior to joining ADS, Scott held a variety of roles for Emerson Electric, that's NYSE ticker symbol EMR, including as President and CEO of its Network Power business. A graduate of SMU with an MBA from Vanderbilt, he began has career at Colt Industries as a product engineer, and has served on the board of Allison Transmission Holdings, that's NYSE ticker symbol ALSN, since 2022. Scott, thanks so much for joining us Inside the ICE House. Welcome to the New York Stock Exchange.
Scott Barbour:
Thank you very much, it's good to be here.
Lance Glinn:
So Advanced Drainage Systems has traveled east to the New York Stock Exchange to ring the closing bell, celebrating the 10th anniversary of listing. Just what's the level of excitement like for you to not only be up on that podium, but to also be leading the company at this milestone?
Scott Barbour:
It's very exciting. It's very exciting for me, it's very exciting for our team. Not all companies get to 10 years of age, and we feel very good about that. Not all companies have the performance we've had over the last 10 years, so we're very proud of that. And what I always see is our people, and they are part of that success. Bringing a few members of our operations team and our engineering team here for tomorrow is going to be super cool, because this is, we were talking about it with them earlier today, it's a once in a lifetime opportunity to come to the New York Stock Exchange.
I've been here a couple of times with Emerson, ADS and Allison Transmission, and every time you feel part of something bigger. And it's hard to describe, but you just feel like you're part of something bigger. I told someone one time you really feel like you understand capitalism, you understand something there, and certainly for ADS, over our last 10 years, being on the New York Stock Exchange gave us access to capital that we otherwise did not have, which enabled us to go and do some things in terms of investment in our business, investment in expanding our business into new markets and acquisitions. So I feel pretty, pretty good about that, and excited about tomorrow.
Lance Glinn:
No, I wholeheartedly agree with you. I have the luxury of obviously being able to work in this building on a daily basis, and every day I walk in you can just ... It's just special, to say the very least. It's just a special place to work. Now, the name alone, Advanced Drainage Systems, come be associated with infrastructure elements like drains, pipes, water management as a whole, but for those unfamiliar how would you describe what ADS does and the role of the company, or the role the company plays in addressing today's challenges?
Scott Barbour:
Well, there's a lot to unpack underneath that. Our reason is water. We manage stormwater. Water's the world's most precious resource. We do this in communities around North America primarily, and we think it's a big mission to help manage that stormwater, and onsite septic through our Infiltrator business. So what we do is, it rains, something has to be done with that stormwater or runoff, it comes off of impervious surfaces like a roof, a road, a parking lot, and it's our job, our products take that water and then get it to the right place, store it in many cases, clean it up and then reintroduce it into the watershed, a lake, a river, a stream.
And we do that across thousands of projects every day, many, many job sites and applications, and at scale. Really at scale. For what we do, we're highly, highly relevant in these various local markets, and it's an intensely local business by the way. So that's how I describe our company and what we do. Our other business, Infiltrator, which is onsite septic, if you're not connected to a municipal centralized system you have a septic system on your property, and we manufacture all of the components of that, the tank, the various ways to do the leach field, and we do that in, again, a very scaled manner.
And by doing all that, these things are necessary things to be done, I like to tell people there's lots of different ways to make money, we do that in a pretty good model. We have good growth rate, longterm average I think we've been growing almost 10%, we do it in a way of increasing our profitability faster than our sales, and then converting that to cash. And that's the model we've been working pretty hard for the last seven years that I've been there, and that's led to a lot of success in terms of our growth, our profitability and our ability to reinvest in our organization, both organically, think of capital, new equipment, capacity, safety, automation, but then also a few acquisitions, and then a pretty healthy return to shareholders. We were totaling up I think about a billion-four returned to shareholders over the last really four years. And that's made us a pretty good profile and driven some pretty good economic value.
Lance Glinn:
So over the now 10 years that ADS has been listed on the New York Stock Exchange, you've been president and CEO for seven of them, as I said before, started your tenure in 2017. Over your time just leading the company, how have you seen ADS grow and evolve from both the initial listing day back in 2014, as well as day one for you a few years later?
Scott Barbour:
Yeah. I think one way we've really grown is this thematic of water. We did a lot of work and strategic planning and thinking about what we wanted to be when we grew up, and we really focused on that thematic of water. And why do we do that? There's a lot of really nice tailwinds to the water industry. There's various studies that show 600-plus billion dollars need to be invested over the next 20 years in water management. That's not all just in our place, but that's in water infrastructure in general. The IIJA money that's flowing into roads and highways, repairs, new capacity in roads and highways, airports, rail. I think we're participating in something like 33 airport projects right now. If you've been to LaGuardia, big airport project for us.
So all those kinds of things, but it's that singular focus on water over the last seven years really, and then a focus on certain geographies where more money's being spent. Think of the majority of construction being spent in the Sunbelt or the Southwest or California, we've really focused on that. And then I think the capital investments that we have focused on, both at Infiltrator, we made a big acquisition five years ago, we followed that up with really significant capital investments in machinery, automation. It's paid off wonderfully as that business has grown.
Within the ADS core business, again, investments in machinery, capacity in the right places, lots of investment in safety. We also have a big trucking fleet, so we're very big in distribution and logistics of our products. We've invested a lot in that fleet with new trailers and new tractors and all that kind of stuff. So I think over these last seven years it's that focus, the performance that allowed us to invest at a pretty good clip over the last couple of years, which then it just builds that scale. It builds that scale, and I think that makes you a tough competitor.
Lance Glinn:
So you click onto the Advanced Drainage System website and in big bold letters, you just said it before, "Our reason is water." Water management solutions, water treatment, water infrastructure, all under the ADS umbrella. But over the course of your seven years leading the company, I just asked you obviously how the company has evolved from day one as a listed company in 2014, and in your first day in 2017, but how have you seen the industry as a whole evolve and change over the course of the last almost decade?
Scott Barbour:
Well, for our industry in particular, I think there's a couple of things. One is we go out and sell hard every day, and we sell against other materials that could be doing pipe or storage or whatever. And I think as an industry, and certainly we're a big part of this, the continued conversion of those traditional materials to our materials, plastic materials. As you know, we're very focused on plastics and recycled plastics, and I think we just continue to see that become a bigger part of the conversation. And five, six years ago we didn't like to talk about we use plastics, we use recycled plastics. We almost hid from it, and I've often called it the band of the willing where we began to promote that as a big part of what we do for sustainability reasons, for economic reasons, for all these different things.
And I think that's been a big change over the last couple of years. It's increased our relevance in this water space, which we think is a good space, it has a lot of nice secular tailwinds. So I think those are some of the biggest changes I've seen over the last couple of years.
Lance Glinn:
So your history, besides these seven years at ADS, dates back even further. A Northeastern-er from New Hampshire finds his way first to Dallas and SMU, then Nashville, Tennessee, Vanderbilt for his MBA. How have your New Hampshire roots, as well as these various stops along the way, be it Dallas or Nashville, helped shape you, your management style, as you obviously lead the company for the last seven-plus years?
Scott Barbour:
I moved around a lot, and-
Lance Glinn:
Did you always have that adventurous spirit?
Scott Barbour:
Yeah. My parents did, my parents were always very willing to move. I'm not unusual, our parents moved for better jobs or things like that, and that's how we moved to New England. I was originally from Arkansas, so you can imagine moving from Arkansas.
Lance Glinn:
Whole different world.
Scott Barbour:
Whole different world, really bad accent, and you move to rural New England. My mother had never been north of St. Louis, and we moved there with part of my dad's job. And it was a great experience, because I think it really opened up that the world's a big place, and there's lots to learn from people, all kinds of different people, and different parts of the culture. And believe me, from rural Arkansas to rural New England, that's a big jump.
And then later in my life how that changed me is I had a chance to go to Hong Kong when I worked for Emerson, and I took it. My kids were young, I didn't have to really convince my wife, she thought it was a good idea, and now I see that same life-changing experience for my children where they see the world's a big place. They're not scared of anything, and can deal with all kinds of different people and cultures, and that's a real benefit. And by the way, that's what I learned moving around as a kid, to do that, and my dad changed a couple of different times, that's how I got to Texas to go to SMU. My dad was being transferred to Texas. And I think that's been a big advantage, and one I've seen in my kids too.
Now, you fast-forward that, here you are a long time later, and how do you use that in a day in and day out basis? And I think I use it by being able to relate and communicate with everyone in our company. I think people will tell you that I'm just as easy with our trucking people or the people in the fleet, I mean in the factories, or the people that are in our sales department, and I really enjoy that part of the job. And I learned that when I lived in Asia, where I was often the only Westerner in the meeting, and you have to learn how to get things done through other people and other cultures, and that's a tremendous benefit as the CEO, tremendous benefit. Because you're getting things done through people every day, and the more effective you can be at doing that, you force multiply your initiatives.
Lance Glinn:
So is it Scott Barbour the New England-er, or Scott Barbour the ...
Scott Barbour:
I'm a Red Sox fan, I'm a Patriots fan, it's definitely Scott Barbour the New England-er because that's where I went to high school and stuff like that. Now, I still do like the Arkansas Razorbacks, because my parents went there, so I still route for them even though I live in Ohio. So you have to be an Ohio State fan too.
Lance Glinn:
I was going to say, Ohio State might not ...
Scott Barbour:
It's hard not to be an Ohio State fan living in Columbus, but definitely a Red Sox fan.
Lance Glinn:
So the role of a CEO is one, and this is for good measure of course, viewed as pretty much all business, right? There's a sole focus on bettering the business, increasing revenue, achieving company goals. But you're someone who's actively out there interacting and engaging with employees. You just talked about how you're able to relate to all the different types of employees in your company, outside the office, away from the conference room. Is that something that you pride yourself on, stepping away from maybe the traditional CEO role, when it's appropriate of course, having fun with your employees, doing extracurriculars and activities to be more than just the boss?
Scott Barbour:
You have to play different roles at different times as the CEO. The guys I worked for at Emerson, Chuck Knight and Dave Farr, those guys could ... I saw them play different roles at different times as necessary, and sometimes that role is being in a non-business way with the team. We just had our Pelotonia Bike Ride, and it's a big fundraiser in Columbus and I ride in that 20 miles. There's a 20, a 50, a 100, I'm a committed 20-miler.
Lance Glinn:
What was your time?
Scott Barbour:
It's not a race, it's a ride. It's not a race, it's a ride. But several people in here also rode in it, that's why we're all smiling. But I enjoy the heck out of that, because I'm in a situation unlike any other situation that I'm usually in with those folks, and I get to meet a lot of them in a personal basis that I never, I usually don't get to meet. And I find that pretty cool. Now, let's relate that back to being the CEO, all right? What did I say a minute ago? You've got to get things done through people. The most effective CEOs in my book are individuals who can get things done through people even beyond, above and beyond what those individuals might think they're capable of.
And it's only through those kinds of relationships where they really see you as a real person and trust you, and say, "Okay, I'm going to go the extra mile for that individual as the CEO, because I know it gets done and I know he'll recognize me. I know that CEO will recognize me." I had that experience by the way growing up at Emerson, in different things that I went and did, or I was asked to do or jobs I was asked to take, and I found that to be very effective. Now, don't go riding the Pelotonia just because of that, there's other good reasons to do it, but that's just one example of I think things that you've got to go into. I was around a lot of stuff before I took this job, but it's even more of a 24-hour job than I thought, and I thought it was to begin with.
Lance Glinn:
So you spend those years at Emerson Electric, what first introduced you, or how were you first introduced to ADS and Advanced Drainage Systems?
Scott Barbour:
So one of my colleagues, a guy that worked for me there, he had a brother that worked at Advanced Drainage Systems, and so I knew about it through them and I recall it going public in 2014, I was still at Emerson at that time. So we're not a huge city in Columbus, so when a company goes public you read it in the paper and you usually know someone who knows someone. And then fast-forward several years, lots of changes at Emerson, and then I was recruited to come to Advanced Drainage Systems.
Lance Glinn:
So let's now talk about ADS, you've discussed the company's purpose, we've seen over the last decade-plus a dramatic increase in large scale storms. 27 large scale events in 2023 alone compared to just six in 2003. How has ADS adapted its strategies over the course of these years as the storm frequency has increased to make sure that when more rain comes, when more storms come, the technology and the infrastructure is ready to handle it?
Scott Barbour:
Yeah. Those events are certainly changing our market, our end of market that we sell into, the stormwater management. So how's it changing it? There's a couple of different levels of that. At the first level, with the frequency of these events and they happen, and you've got to be there. You have to have stock on the ground, your people have to be ready to help, and we've developed good techniques for getting that done. And so when you have a big rain event like up here, you've had ... We have stuff pre-positioned to take care of that stuff.
And usually what happens is the guys who install our products are the same ones who clean up, so they're busy cleaning up, doing some repairs, so there's actually a compression in demand for a little while, and then that stuff all gets cleaned up and then they try to get caught up real fast. But most importantly is longer term what we see happening is a reexamination of the regulations that govern stormwater. And what do I mean by that? In this, like I said earlier, this is an intensely local business because it rains different amounts in different places, you have different topographies and all that other kind of stuff. So when you have these big rain events, Houston is the one we use a lot, right after the big storm in 2017 they went and started to look at all of their stormwater regulations.
How much water did they need to be able to handle in a certain period of time? I think of it as intensity and frequency, and those have changed, and it's led them to rewrite their regulations, and two to three times more water needs to be stored than previously. That drives demand for our products, that means our guys on the field, we're very local, like I said, and very technical, they have to be cognizant of these new regulations. Often we're the ones interpreting these new regulations for general contractors. The engineering firms are looking at these regs, we're giving them ideas on how to address them with our products, or developing new products to do it. Then we've got to educate the general contractors and installation contractors how to do all that stuff.
So we're in the thick of that, and those regulations are reexamined, are being reexamined all over the country right now. And there's also going to be a rewrite in the next four years of the rainfall patterns. You can imagine there's a handbook that shows rainfall patterns over the last 50, that's going to be updated for the next 50 with data that's being taken right now. And we'll be right in the middle of that. We're actually quite relevant and influential on that local level in giving comments and influencing these regulations, if that's clear. It's always clear to us because we live in it every day, but that's a big part of what we do in the field is the technical expertise.
Lance Glinn:
And so you mentioned regulation and working with local communities and municipalities to figure out products they need, services they need to deal with the storms when they ultimately come. In 2021, the Biden administration, on a federal level, the Biden administration passed the Bipartisan Infrastructure Law injecting obviously much needed funds to help modernize our nation's infrastructure. Over the last two years we've seen around the country those funds pay dividends for things like rails, bridges, airports, et cetera. How have these improvements, and the improvements to come, benefited ADS and benefited what you do to help with storm management?
Scott Barbour:
Clearly a benefit, that IIJA money. We participate roads and highways, airports, rail, ports, those are all projects that saw significant increases in funding from the IIJA. Two years before that was even passed as a piece of legislation, we stood up a sales team exclusively focused on what we call public work. We have a nonresidential, biggest segment, residential, then infrastructure or public work, and we stood that team up mainly in pursuit of Texas DOT regulator approval, but we morphed that as we saw the IIJA thing coming, we morphed it into that. And we have very active pursuit in that, we were up 19% last quarter in that segment, so we clearly see that, benefit from it.
Our products work great in this environment. As you drive around, you'll see a lot of them, I mentioned airports a couple of times, but in rail, we have very good approvals in rail. You see a lot of road and highway work here. We do very well in New York State in that in particular. So that stuff, that's money's flowing and we're in active pursuit of it.
Lance Glinn:
But even with this injection of the funds, as storms increase do you think our nation's infrastructure is still playing catch up when it comes to water management?
Scott Barbour:
Yeah. All the studies we see say yes. This is helping, but it's probably going to take additional years of funding to get it solved. This study's been out a while from the American Society of Civil Engineers, and they give our water infrastructure a grade of D in preparedness. So that tells you where we're starting from. It's obviously better in some areas than others, it's probably not as equal as it should be, but that's what this stuff is all moving towards. We're constantly out there trying to find a better way to do a lot of this, to mitigate flooding, to store water more efficiently, to clean it up better. That's what we spend a lot of time in engineering and field work to try to get better at that, to make it more efficient use of funds was where I was going.
Lance Glinn:
So speaking to that need for quickness and to come up with innovation fast, on episode 418 we spoke with Miami-Dade County Mayor Daniella Levine Cava, and she spoke to the need to enhance infrastructure resiliency specifically in South Florida, which as we know is an area with a ton of water and a ton of storms. And while they've made progress, there's still a ton of work to be done. But as frequency picks up, to which we've spoken to, and as storm intensity continues to grow, how quickly do these new solutions need to be devised and implemented, and how quickly does innovation need to happen to make sure that if we're at 27 storms in 2023, we could be at 30 in 2024, 35 in 2025? The storms aren't going to get smaller, there's not going to be less of them, how quickly do we need to innovate to catch up?
Scott Barbour:
I would say you need to innovate pretty darn fast if you want to ultimately get where it's never a problem. Miami-Dade County is one, we do a lot of work down there, and they have a very active rewrite, reexamination of their codes to increase capacity, which is that intensity and amplitude thing. So I would say they're in that top 10% of addressing this, and again, we do a lot of work down there. They're also very, very conscious about water quality, getting nitrogen removed, cleanliness of water. We're told it's one of the few things both sides of the aisle in Florida can agree upon is the good management of water-
Lance Glinn:
I would hope so. I certainly hope so.
Scott Barbour:
It seems to drive a lot of people their way, doesn't it? But that encourages us is my point, is when you see that kind of cooperation among both sides of the aisle in a state like Florida that clearly has issues, and they're doing it pretty fast. I'd also say in Florida they're very aggressive at putting in good road infrastructure with very good storm water management. No one likes a neighborhood that floods, no one likes the inconvenience of flooding, no one likes the inconvenience of dirty water in a waterway and stuff like that.
So I would say they're pretty aggressive. They have one of the bigger budgets, I think they're number two on the IIJA list of receiving funds, and they're very aggressive within the state. I don't want to lead you to believe that they're going to solve this in five years, because they're not, but if there's anyone that's on a good pace of trying to solve it and cognizant of the issue, we would say the people in Florida are.
Lance Glinn:
They're ahead of the game.
Scott Barbour:
They're certainly ahead of the game, absolutely they're ahead of the game.
Lance Glinn:
So the Inflation Reduction Act signed into law by the Biden administration in 2022 marked a significant investment in climate and clean energy initiatives. Given that sustainability, environmental responsibility are central to obviously what ADS does, how has this legislation influenced ADS's operations and obviously the broader water management industry?
Scott Barbour:
So the broader, let's just take that first, these onshore-ing and these semiconductor investments, battery investments, all those kinds of things that the IRA money is targeted at has been a good market for us to pursue also. Again, whether it was smart or lucky, probably a little bit of both, before COVID we stood up a team that we call Business Development, out there looking for these big projects. Again, because of our success and our scale, we could afford to go do this, others probably can't. And man, these guys hit the ground running on these big onshore-ing projects, which I put in this category of the Intel stuff in Ohio, which is very visible to us in Central Ohio, or these battery and EV things, those have been some really nice projects for us also.
And one of the ways we win those is because of our carbon footprint. If you use our products on a big job site like that you will reduce by 50% the carbon footprint versus competing products. Fewer trucks, we use this recycled material, we have a less energy intensive manufacturing process. It really adds up quickly, and that has been a nice selling feature for that. So that's one way we address the sustainability through that stuff. We don't receive money directly from the IRA funding for that, but it's part of our value proposition.
The other thing is increasing, continuing to increase our use of recycled materials. We're one of the, if not the largest user of high density polyethylene, and a very large user of polypropylene materials to manufacture our products. And we're continually investing in material science and blending techniques. There's a lot of engineering behind the use of these materials, and because we're the scale player we can go and afford to invest in that, and I think that addresses things we're doing to meet sustainability goals, which I always relate to that IRA bill. So I think we're in the thick of it in a lot of ways, and we feel good about that.
Lance Glinn:
So you mentioned recycled materials, plastics, let's talk a little bit about those, because this summer you also shared 2024 Fiscal Sustainability Report, highlighted in it the removal of over half a billion pounds of recycled plastic from the waste stream. So you consume all this plastic, what do you do next with it? How do you reuse it, incorporate it back into products and services?
Scott Barbour:
Well, so we buy this material, this wide range of material on open markets, we buy bales post consumer from people like waste management and 100 others, we buy scrap from other injection guys, and then what our job is is to bring all that together and then clean it up, sort it, all this stuff. And then blend it to a pretty tight specification so that it goes through my machinery at the optimum rate, and with a right quality at the end of it. And we do that across 60 plants, four recycling centers day in and day out.
It is a scaled operation. So our goal is in that is to be able to ramp that up in 10 years to a billion pounds. Now, that's going to take a lot of work. We'll have to get access to new materials, find new ways of getting stuff out of the waste stream. We'll have to find new designs that utilize this better, both tooling designs and product designs. We're probably going to have to develop some new products and get some regulatory approval. It is a multi, multifaceted type of endeavor to do that.
Now, why do we do it? We do it, honestly at the very beginning when we started this probably 10, 12 years ago, it was economic. There's a nice, there's a pretty big gap between virgin material and recycled material. That gap ebbs and flows, but it's still there. But we also do it because we think there are going to be market demands for the use of recycled materials. It preforms well, it's a very good story for us. At Infiltrator they use 70, 85% recycled material and have for a very long time in their products. So it really is a formula that works well for us from a profitability and what I would call a positioning perspective in the marketplace, and with our investment community.
Lance Glinn:
Employee development is also at the core of ADS does, whether it's colleagues in the field or those at ADS HQ in Ohio. How is the company helping to set up its members, its employees, its colleagues of the workforce to grow personally and professionally, limiting turnover and of course boosting morale?
Scott Barbour:
So a couple of things around that. One, and I would almost think about this as salaried and hourly, because those are two different programs, right? But what is in common with those programs is people have to be respected, they have to be heard, you have to be able to be transparent and give feedback back and forth with them. We're doing our employee survey, our new employee survey here in a couple of weeks, and I'll look very hard at every one of those answers.
But whether you're a salaried employee or an hourly employee, we want your voice to be heard. We want you to be respected and felt as part of our community. And that's really a talent thing, because it's not easy to get people into manufacturing. So we really have to work hard and be a great place to work to attract those people. Now, people have had some pretty good careers at ADS and that builds on itself.
Within our hourly, we provide lots of opportunities for up-scaling, we have a lot of folks that move from what I would say our manufacturing environment to our logistics and trucking. Everyone wants to get in a truck, it's a life of freedom and stuff like that. But then we've been up-scaling a lot of, in our factories because of the automation and then the changes in that environment that we continue to make as a result of our investments. And if you go to our Infiltrator facility and look at the automation there, we bought that company five years ago, it looks completely different today given the investments they've made and the training and skillsets that they have in their today versus five years ago.
So those are the kinds of things that go on with them. And then we have internships and we have management development programs. I think we did 72,000 hours of training, front line training for supervisors. That's part of that communication thing. But training around that, and then training around injection molding and operation of machines, stuff that maybe not too interesting, but really counts for those folks, really counts. And when they can have a good career, work hard, get paid a fair wage, have a great benefit plan, have some upward mobility, that's how you get folks to stick with you.
Lance Glinn:
So in 2020 the ADS Foundation was established with five areas of emphasis, including recycling, education, mental health, housing and water. How does the foundation engage these focus areas and in the process build resilient and sustainable communities?
Scott Barbour:
So we've engaged with partnerships like the Nature Conservancy, the recycling partnership, that give us some breadth and visibility to projects or opportunities that are outside of Columbus. You've got to watch ... We're very proud of getting the foundation up and going, but if you're not careful all the money gets spent around HQ, so these relationships help us promulgate outside of that, and in conjunction with our factories that are local. Because often we've identified an activity to do with local employees in a state, and you do that with the Nature Conservancy for example, and we've also used that to raise our profile in some states where we're trying to get a bigger profile.
And then we've done a lot of community development, some of those really historical relationships like Nationwide Children's Hospital, others are new relationships. I think we're speaking to a school here next week, Scott and I, on a business ... To get high school students to see what businesses are doing. But we like those pillars, those are very purposefully chosen around those things. And the mental health one was added, really listening to our employees and it came back through the survey that we did a year ago. We made it easier to find those resources around mental health that the company could provide, and literally our employees came out of the woodwork telling us, "Wow. Thank you. That's really helpful that now I know how to get ahold of these resources." Because then it was buried in the manual and stuff like that.
Lance Glinn:
So Scott, as we begin to wrap up, we spoke earlier to how ADS and the industry have changed since you took over in 2017, but as you view the sector today from a 35,000-foot view, what are some of the emerging trends you see and what do they tell you about, not how the industry has changed, but where the industry is heading five, 10, 15 years down the line?
Scott Barbour:
So we think about this a lot, and I think if you fast-forward 10 years, it could be a slow evolving industry so I'm going to pick 10 out there, I think this will be an industry that is much more focused on capturing water, cleaning it up, and when I say clean up, filtering the rainwater and then reusing it aggressively for maybe not drinking purposes, although we know how to do that with our partner Rainwater Management Systems, but I just think there's going to be a lot of first owner led and later regulatory tailwinds to the reuse of water. And it might be to irrigate or flush the toilet or wash the clothes, it might be for drinking, it might be recharging the aquifer.
A big issue in agriculture is how do you capture the rainwater, then recharge the aquifers so you can use it again for irrigation? Or really efficient subsurface irrigation? I think that's going to be an enormously big deal. I think this separation of sediments or oils that come off the parking lots or off a roof, I think anything that makes water cleaner as you put it back into the watershed, I think that's going to be an ever bigger deal. We were spending a lot of our product development dollars around those kinds of issues right now, and I think the other big change will be this intensity and frequency.
If you think that you've got a handle, 100,000 gallons of stormwater in a one-hour events, that's going to be 150, 175 in 10 years. And so that will be a big deal. Now, what we need to do is continuing to come up with really cost-effective engineered ways to do that. We need to be coming up with new techniques to do that, and that's going to fun. That's part of the investment in the engineering and technology centers, so we are prepared for that. We're doing the work now to be prepared for that day. And what I really like about ADS is we're the scaled player, and that means that we can go and make those investments and further our competitive advantage as we go forward. That's my job is to make sure that we're ready for that stuff and are always trying to distance ourselves as these issues come up. Will be right 1000% of the time? No. But I like my chances.
Lance Glinn:
Making sure that you're ready, Scott. Thanks so much for joining us Inside the ICE House.
Scott Barbour:
All right. Thank you very much. Enjoyed it.
Intro/Outro:
That's our conversation for this week. Remember to rate, review and subscribe wherever you listen, and follow us on X at ICE House Podcast. From the New York Stock Exchange, we'll talk to you again next week Inside the ICE House. Information contained in this podcast was obtained in part from publicly available sources and not independently verified. Neither ICE nor its affiliates make any representations or warranties expressed or implied as to the accuracy or completeness of the information, and do not sponsor, approve or endorse any of the content herein, all of which is presented solely for informational and educational purposes. Nothing here constitutes an offer to sell a solicitation of an offer to buy any security or a recommendation of any security or trading practice. Some portions of the preceding conversation may have been edited for the purpose of length or clarity.
