Recent Quotes View Full List My Watchlist Create Watchlist Indicators DJI Nasdaq Composite SPX Gold Crude Oil EL&P Market Index Markets Stocks ETFs Tools Overview News Currencies International Treasuries AdvanSix Announces Second Quarter 2023 Financial Results By: AdvanSix via Business Wire August 04, 2023 at 06:30 AM EDT Sales of $428 million, down 27% versus prior year Earnings Per Share of $1.16; Adjusted Earnings Per Share of $1.25 Returned $19 million of cash to shareholders through repurchases and dividends in 2Q23 Announced 10% increase in quarterly dividend to $0.16 per share AdvanSix (NYSE: ASIX) today announced its financial results for the second quarter ending June 30, 2023. Overall, the Company delivered solid earnings and cash flow results amid a continued dynamic macro environment. Second Quarter 2023 Summary Sales down approximately 27% versus prior year driven by 19% unfavorable impact of market-based pricing, 6% lower raw material pass-through pricing, and 2% lower volume Net Income of $32.7 million, a decrease of $32.4 million versus the prior year Adjusted EBITDA of $65.8 million, a decrease of $39.6 million versus the prior year Cash Flow from Operations of $35.0 million, a decrease of $60.9 million versus the prior year Capital Expenditures of $19.3 million, an increase of $1.5 million versus the prior year Free Cash Flow of $15.7 million, a decrease of $62.4 million versus the prior year Repurchased 410,862 shares for approximately $14.9 million in 2Q23 “AdvanSix successfully delivered solid earnings and cash flow results in the second quarter against a record prior year,” said Erin Kane, president and CEO of AdvanSix. “The AdvanSix team executed well within a mixed set of dynamics across the portfolio. We captured strong in-season demand for plant nutrients in a significantly lower nitrogen and raw material environment, navigated a nylon pricing environment pressured by industry supply and demand conditions including increased low-priced imports, while North American acetone supply and demand continued to be balanced. Our team’s collective performance and advantaged business model supporting through-cycle profitability illustrates the value and resilience of our diversified chemistry company. Our confidence is reflected in once again increasing our quarterly cash dividend by 10 percent.” Summary second quarter 2023 financial results for the Company are included below: ($ in Thousands, Except Earnings Per Share) 2Q 2023 2Q 2022 Sales $427,940 $583,736 Net Income 32,728 65,157 Diluted Earnings Per Share $1.16 $2.23 Adjusted Diluted Earnings Per Share (1) $1.25 $2.30 Adjusted EBITDA (1) 65,785 105,426 Adjusted EBITDA Margin % (1) 15.4% 18.1% Cash Flow from Operations 35,004 95,891 Free Cash Flow (1)(2) 15,713 78,131 (1) See “Non-GAAP Measures” included in this press release for non-GAAP reconciliations (2) Net cash provided by operating activities less capital expenditures Sales of $428 million in the quarter decreased approximately 27% versus the prior year. Market-based pricing was unfavorable by 19% compared to the prior year primarily reflecting lower nutrient values reducing ammonium sulfate pricing, as well as lower nylon pricing. Raw material pass-through pricing was unfavorable by 6% following a net cost decrease in benzene and propylene (inputs to cumene which is a key feedstock to our products). Sales volume decreased approximately 2% driven by soft end market demand impacting portions of our nylon and chemical intermediates product lines, partially offset by higher domestic ammonium sulfate volume to meet strong in-season customer demand. Sales by product line and approximate percentage of total sales are included below: ($ in Thousands) 2Q 2023 2Q 2022 Sales % of Total Sales % of Total Nylon $ 92,953 22% $ 132,105 23 % Caprolactam 74,682 18 % 87,169 15 % Chemical Intermediates 121,365 28 % 158,611 27 % Ammonium Sulfate 138,940 32 % 205,851 35 % $ 427,940 100 % $ 583,736 100 % Adjusted EBITDA of $65.8 million in the quarter decreased $39.6 million versus the prior year primarily due to unfavorable market-based pricing, net of raw material costs, partially offset by the favorable year-over-year impact of planned plant turnarounds, and the net impact of lower sales volume and changes in sales mix including higher domestic plant nutrients sales. Adjusted earnings per share of $1.25 decreased $1.05 versus the prior year driven primarily by the factors discussed above. Cash flow from operations of $35.0 million in the quarter decreased $60.9 million versus the prior year primarily due to lower net income and the unfavorable impact of changes in working capital driven largely by the unwinding of ammonium sulfate pre-buy advances. Capital expenditures of $19.3 million in the quarter increased $1.5 million versus the prior year. Dividend The Company's Board of Directors declared a quarterly cash dividend of $0.16 per share on the Company's common stock. This represents a 10% increase from the previous quarter's dividend. The dividend is payable on August 29, 2023 to stockholders of record as of the close of business on August 15, 2023. Outlook Expect favorable underlying agriculture industry fundamentals to continue; Typical North American ammonium sulfate seasonality expected to drive 3Q23 sequential domestic pricing decline Expect balanced supply and demand conditions for North American acetone to continue Expect continued unfavorable supply and demand conditions across nylon and other chemical intermediates due to headwinds in consumer durables and building and construction end markets Continue to expect Capital Expenditures of $110 million to $120 million in 2023, reflecting increased spend due to critical infrastructure, other maintenance, and growth and cost savings projects Continue to expect pre-tax income impact of planned plant turnarounds to be $25 million to $30 million in 3Q23, totaling $28 million to $33 million in full year 2023 "We are highly focused on the execution of our upcoming third quarter planned plant turnaround to support safe, stable and sustainable operations at higher utilization rates relative to our industry. While we anticipate the impacts of ammonium sulfate seasonality and soft end market demand overall, we remain well positioned to offer near, medium and long-term value for our shareholders supported by the structural improvements made to the underlying earnings power of this business. We are committed to producing the right chemistries with the right properties to solve our customers' most exciting opportunities, recently illustrated by the introduction of new 100 percent post-consumer recycled content nylon,” concluded Kane. Conference Call Information AdvanSix will discuss its results during its investor conference call today starting at 9:00 a.m. ET. To participate on the conference call, dial (844) 855-9494 (domestic) or (412) 858-4602 (international) approximately 10 minutes before the 9:00 a.m. ET start, and tell the operator that you are dialing in for AdvanSix’s second quarter 2023 earnings call. The live webcast of the investor call as well as related presentation materials can be accessed at http://investors.advansix.com. Investors can hear a replay of the conference call from 12 noon ET on August 4 until 12 noon ET on August 11 by dialing (877) 344-7529 (domestic) or (412) 317-0088 (international). The access code is 9404240. About AdvanSix AdvanSix is a diversified chemistry company that produces essential materials for our customers in a wide variety of end markets and applications that touch people’s lives. Our integrated value chain of our five U.S.-based manufacturing facilities plays a critical role in global supply chains and enables us to innovate and deliver essential products for our customers across building and construction, fertilizers, agrochemicals, plastics, solvents, packaging, paints, coatings, adhesives, electronics and other end markets. Guided by our core values of Safety, Integrity, Accountability and Respect, AdvanSix strives to deliver best-in-class customer experiences and differentiated products in the industries of nylon solutions, chemical intermediates, and plant nutrients. More information on AdvanSix can be found at http://www.advansix.com. Forward Looking Statements This release contains certain statements that may be deemed “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of historical fact, that address activities, events or developments that our management intends, expects, projects, believes or anticipates will or may occur in the future are forward-looking statements. Forward-looking statements may be identified by words such as "expect," "anticipate," "estimate," “outlook,” "project," "strategy," "intend," "plan," "target," "goal," "may," "will," "should" and "believe" and other variations or similar terminology and expressions. Although we believe forward-looking statements are based upon reasonable assumptions, such statements involve known and unknown risks, uncertainties and other factors, many of which are beyond our control and difficult to predict, which may cause the actual results or performance of the Company to be materially different from any future results or performance expressed or implied by such forward-looking statements. Such risks and uncertainties include, but are not limited to: general economic and financial conditions in the U.S. and globally, including the impact of the coronavirus (COVID-19) pandemic and any resurgences; the potential effects of inflationary pressures, labor market shortages and supply chain issues; instability or volatility in financial markets or other unfavorable economic or business conditions caused by geopolitical concerns, including as a result of the conflict between Russia and Ukraine; the effect on our customers’ demand for our products and our suppliers’ ability to manufacture and deliver our raw materials, including implications of reduced refinery utilization in the U.S.; our ability to sell and provide our goods and services; the ability of our customers to pay for our products; any closures of our and our customers’ offices and facilities; risks associated with increased phishing, compromised business emails and other cybersecurity attacks and disruptions to our technology infrastructure; risks associated with employees working remotely or operating with a reduced workforce; risks associated with our indebtedness including compliance with financial and restrictive covenants, and our ability to access capital on reasonable terms, at a reasonable cost, or at all, due to economic conditions or otherwise; the impact of scheduled turnarounds and significant unplanned downtime and interruptions of production or logistics operations as a result of mechanical issues or other unanticipated events such as fires, severe weather conditions, natural disasters, pandemics and geopolitical conflicts and related events; price fluctuations, cost increases and supply of raw materials; our operations and growth projects requiring substantial capital; growth rates and cyclicality of the industries we serve including global changes in supply and demand; failure to develop and commercialize new products or technologies; loss of significant customer relationships; adverse trade and tax policies; extensive environmental, health and safety laws that apply to our operations; hazards associated with chemical manufacturing, storage and transportation; litigation associated with chemical manufacturing and our business operations generally; inability to acquire and integrate businesses, assets, products or technologies; protection of our intellectual property and proprietary information; prolonged work stoppages as a result of labor difficulties or otherwise; cybersecurity, data privacy incidents and disruptions to our technology infrastructure; failure to maintain effective internal controls; our ability to declare and pay quarterly cash dividends and the amounts and timing of any future dividends; our ability to repurchase our common stock and the amount and timing of any future repurchases; disruptions in supply chain, transportation and logistics; potential for uncertainty regarding qualification for tax treatment of our spin-off; fluctuations in our stock price; and changes in laws or regulations applicable to our business. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this release. Such forward-looking statements are not guarantees of future performance, and actual results, developments and business decisions may differ from those envisaged by such forward-looking statements. We identify the principal risks and uncertainties that affect our performance in our filings with the Securities and Exchange Commission (SEC), including the risk factors in Part 1, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2022, as updated in subsequent reports filed with the SEC. Non-GAAP Financial Measures This press release includes certain non-GAAP financial measures intended to supplement, not to act as substitutes for, comparable GAAP measures. Reconciliations of non-GAAP financial measures to GAAP financial measures are provided in this press release. Investors are urged to consider carefully the comparable GAAP measures and the reconciliations to those measures provided. Non-GAAP measures in this press release may be calculated in a way that is not comparable to similarly-titled measures reported by other companies. AdvanSix Inc. Condensed Consolidated Balance Sheets (Unaudited) (Dollars in thousands, except share and per share amounts) June 30, 2023 December 31, 2022 ASSETS Current assets: Cash and cash equivalents $ 10,536 $ 30,985 Accounts and other receivables – net 153,148 175,429 Inventories – net 225,986 215,502 Taxes receivable 1,442 9,771 Other current assets 20,043 9,241 Total current assets 411,155 440,928 Property, plant and equipment – net 816,885 811,065 Operating lease right-of-use assets 109,816 114,688 Goodwill 56,192 56,192 Intangible assets 47,717 49,242 Other assets 25,244 23,216 Total assets $ 1,467,009 $ 1,495,331 LIABILITIES Current liabilities: Accounts payable $ 220,158 $ 272,770 Accrued liabilities 43,310 48,820 Operating lease liabilities – short-term 34,342 37,472 Deferred income and customer advances 2,333 34,430 Total current liabilities 300,143 393,492 Deferred income taxes 164,256 160,409 Operating lease liabilities – long-term 75,829 77,571 Line of credit – long-term 140,000 115,000 Postretirement benefit obligations 2,279 — Other liabilities 10,143 10,679 Total liabilities 692,650 757,151 STOCKHOLDERS' EQUITY Common stock, par value $0.01; 200,000,000 shares authorized; 32,577,862 shares issued and 27,302,873 outstanding at June 30, 2023; 31,977,593 shares issued and 27,446,520 outstanding at December 31, 2022 326 320 Preferred stock, par value $0.01; 50,000,000 shares authorized and 0 shares issued and outstanding at June 30, 2023 and December 31, 2022 — — Treasury stock at par (5,274,989 shares at June 30, 2023; 4,531,073 shares at December 31, 2022) (53 ) (45 ) Additional paid-in capital 151,706 174,585 Retained earnings 626,885 567,517 Accumulated other comprehensive loss (4,505 ) (4,197 ) Total stockholders' equity 774,359 738,180 Total liabilities and stockholders' equity $ 1,467,009 $ 1,495,331 AdvanSix Inc. Condensed Consolidated Statements of Operations (Unaudited) (Dollars in thousands, except share and per share amounts) Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Sales $ 427,940 $ 583,736 $ 828,484 $ 1,062,809 Costs, expenses and other: Costs of goods sold 360,017 476,835 690,059 852,482 Selling, general and administrative expenses 24,011 20,841 49,126 42,051 Interest expense, net 1,954 769 3,221 1,332 Other non-operating (income) expense, net (1,325 ) 172 (1,433 ) (431 ) Total costs, expenses and other 384,657 498,617 740,973 895,434 Income before taxes 43,283 85,119 87,511 167,375 Income tax expense 10,555 19,962 19,829 39,145 Net income $ 32,728 $ 65,157 $ 67,682 $ 128,230 Earnings per common share Basic $ 1.19 $ 2.31 $ 2.46 $ 4.55 Diluted $ 1.16 $ 2.23 $ 2.39 $ 4.37 Weighted average common shares outstanding Basic 27,494,555 28,168,207 27,547,874 28,183,951 Diluted 28,113,402 29,262,709 28,348,266 29,316,792 AdvanSix Inc. Condensed Consolidated Statements of Cash Flows (Unaudited) (Dollars in thousands) Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Cash flows from operating activities: Net income $ 32,728 $ 65,157 $ 67,682 $ 128,230 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 18,113 17,534 35,958 34,226 Loss on disposal of assets 400 441 568 800 Deferred income taxes 4,064 3,077 3,894 2,558 Stock-based compensation 2,436 2,005 4,449 5,379 Amortization of deferred financing fees 154 154 309 309 Changes in assets and liabilities, net of business acquisitions: Accounts and other receivables 8,116 (23,743 ) 22,123 (52,145 ) Inventories (1,351 ) 4,901 (10,484 ) 3,012 Taxes receivable (419 ) — 8,329 — Accounts payable 6,172 42,535 (47,216 ) 52,439 Accrued liabilities 2,664 2,897 (5,744 ) (8,821 ) Deferred income and customer advances (23,339 ) (827 ) (32,097 ) (1,142 ) Other assets and liabilities (14,734 ) (18,240 ) (11,192 ) (19,792 ) Net cash provided by operating activities 35,004 95,891 36,579 145,053 Cash flows from investing activities: Expenditures for property, plant and equipment (19,291 ) (17,760 ) (43,894 ) (38,779 ) Acquisition of businesses — 1,133 — (97,456 ) Other investing activities (1,031 ) (925 ) (2,034 ) (1,221 ) Net cash used for investing activities (20,322 ) (17,552 ) (45,928 ) (137,456 ) Cash flows from financing activities: Borrowings from line of credit 152,500 82,000 230,500 230,500 Payments of line of credit (139,500 ) (155,500 ) (205,500 ) (219,000 ) Principal payments of finance leases (225 ) (244 ) (456 ) (481 ) Dividend payments (3,984 ) (3,515 ) (8,004 ) (7,032 ) Purchase of treasury stock (14,886 ) (3,407 ) (28,385 ) (10,419 ) Issuance of common stock 123 318 745 1,032 Net cash used for financing activities (5,972 ) (80,348 ) (11,100 ) (5,400 ) Net change in cash and cash equivalents 8,710 (2,009 ) (20,449 ) 2,197 Cash and cash equivalents at beginning of period 1,826 19,306 30,985 15,100 Cash and cash equivalents at the end of period $ 10,536 $ 17,297 $ 10,536 $ 17,297 Supplemental non-cash investing activities: Capital expenditures included in accounts payable $ 9,832 $ 9,207 AdvanSix Inc. Non-GAAP Measures (Dollars in thousands, except share and per share amounts) Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Net cash provided by operating activities $ 35,004 $ 95,891 $ 36,579 $ 145,053 Expenditures for property, plant and equipment (19,291 ) (17,760 ) (43,894 ) (38,779 ) Free cash flow (1) $ 15,713 $ 78,131 $ (7,315 ) $ 106,274 (1) Free cash flow is a non-GAAP measure defined as Net cash provided by operating activities less Expenditures for property, plant and equipment The Company believes that this metric is useful to investors and management as a measure to evaluate our ability to generate cash flow from business operations and the impact that this cash flow has on our liquidity. Reconciliation of Net Income to Adjusted EBITDA and Earnings Per Share to Adjusted Earnings Per Share Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Net income $ 32,728 $ 65,157 $ 67,682 $ 128,230 Non-cash stock-based compensation 2,436 2,005 4,449 5,379 Non-recurring, unusual or extraordinary expenses — — — — Non-cash amortization from acquisitions 532 551 1,064 752 Non-recurring M&A costs — — — 277 Benefit from income taxes relating to reconciling items (498 ) (439 ) (933 ) (995 ) Adjusted Net Income 35,198 67,274 72,262 133,643 Interest expense, net 1,954 769 3,221 1,332 Income tax expense - adjusted 11,053 20,401 20,763 40,141 Depreciation and amortization - adjusted 17,580 16,982 34,893 33,474 Adjusted EBITDA $ 65,785 $ 105,426 $ 131,139 $ 208,590 Sales $ 427,940 $ 583,736 $ 828,484 $ 1,062,809 Adjusted EBITDA Margin (2) 15.4 % 18.1 % 15.8 % 19.6 % (2) Adjusted EBITDA Margin is defined as Adjusted EBITDA divided by Sales Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Net Income $ 32,728 $ 65,157 $ 67,682 $ 128,230 Adjusted Net Income 35,198 67,274 72,262 133,643 Weighted-average number of common shares outstanding - basic 27,494,555 28,168,207 27,547,874 28,183,951 Dilutive effect of equity awards and other stock-based holdings 618,847 1,094,502 800,392 1,132,841 Weighted-average number of common shares outstanding - diluted 28,113,402 29,262,709 28,348,266 29,316,792 EPS - Basic $ 1.19 $ 2.31 $ 2.46 $ 4.55 EPS - Diluted $ 1.16 $ 2.23 $ 2.39 $ 4.37 Adjusted EPS - Basic $ 1.28 $ 2.39 $ 2.62 $ 4.74 Adjusted EPS - Diluted $ 1.25 $ 2.30 $ 2.55 $ 4.56 The Company believes the non-GAAP financial measures presented in this release provide meaningful supplemental information as they are used by the Company’s management to evaluate the Company’s operating performance, enhance a reader’s understanding of the financial performance of the Company, and facilitate a better comparison among fiscal periods and performance relative to its competitors, as these non-GAAP measures exclude items that are not considered core to the Company’s operations. AdvanSix Inc. Appendix (Pre-tax income impact, Dollars in millions) Planned Plant Turnaround Schedule (3) 1Q 2Q 3Q 4Q FY 2017 — ~$10 ~$4 ~$20 ~$34 2018 ~$2 ~$10 ~$30 — ~$42 2019 — ~$5 ~$5 ~$25 ~$35 2020 ~$2 ~$7 ~$20 ~$2 ~$31 2021 ~$3 ~$8 — ~$18 ~$29 2022 ~$1 ~$5 ~$44 — ~$50 2023E ~$2 ~$1 $25-$30 — $28-$33 (3) Primarily reflects the impact of fixed cost absorption, maintenance expense, and the purchase of feedstocks which are normally manufactured by the Company. View source version on businesswire.com: https://www.businesswire.com/news/home/20230803655711/en/Contacts Media Janeen Lawlor (973) 526-1615 janeen.lawlor@advansix.com Investors Adam Kressel (973) 526-1700 adam.kressel@advansix.com Data & News supplied by www.cloudquote.io Stock quotes supplied by Barchart Quotes delayed at least 20 minutes. By accessing this page, you agree to the following Privacy Policy and Terms and Conditions.
AdvanSix Announces Second Quarter 2023 Financial Results By: AdvanSix via Business Wire August 04, 2023 at 06:30 AM EDT Sales of $428 million, down 27% versus prior year Earnings Per Share of $1.16; Adjusted Earnings Per Share of $1.25 Returned $19 million of cash to shareholders through repurchases and dividends in 2Q23 Announced 10% increase in quarterly dividend to $0.16 per share AdvanSix (NYSE: ASIX) today announced its financial results for the second quarter ending June 30, 2023. Overall, the Company delivered solid earnings and cash flow results amid a continued dynamic macro environment. Second Quarter 2023 Summary Sales down approximately 27% versus prior year driven by 19% unfavorable impact of market-based pricing, 6% lower raw material pass-through pricing, and 2% lower volume Net Income of $32.7 million, a decrease of $32.4 million versus the prior year Adjusted EBITDA of $65.8 million, a decrease of $39.6 million versus the prior year Cash Flow from Operations of $35.0 million, a decrease of $60.9 million versus the prior year Capital Expenditures of $19.3 million, an increase of $1.5 million versus the prior year Free Cash Flow of $15.7 million, a decrease of $62.4 million versus the prior year Repurchased 410,862 shares for approximately $14.9 million in 2Q23 “AdvanSix successfully delivered solid earnings and cash flow results in the second quarter against a record prior year,” said Erin Kane, president and CEO of AdvanSix. “The AdvanSix team executed well within a mixed set of dynamics across the portfolio. We captured strong in-season demand for plant nutrients in a significantly lower nitrogen and raw material environment, navigated a nylon pricing environment pressured by industry supply and demand conditions including increased low-priced imports, while North American acetone supply and demand continued to be balanced. Our team’s collective performance and advantaged business model supporting through-cycle profitability illustrates the value and resilience of our diversified chemistry company. Our confidence is reflected in once again increasing our quarterly cash dividend by 10 percent.” Summary second quarter 2023 financial results for the Company are included below: ($ in Thousands, Except Earnings Per Share) 2Q 2023 2Q 2022 Sales $427,940 $583,736 Net Income 32,728 65,157 Diluted Earnings Per Share $1.16 $2.23 Adjusted Diluted Earnings Per Share (1) $1.25 $2.30 Adjusted EBITDA (1) 65,785 105,426 Adjusted EBITDA Margin % (1) 15.4% 18.1% Cash Flow from Operations 35,004 95,891 Free Cash Flow (1)(2) 15,713 78,131 (1) See “Non-GAAP Measures” included in this press release for non-GAAP reconciliations (2) Net cash provided by operating activities less capital expenditures Sales of $428 million in the quarter decreased approximately 27% versus the prior year. Market-based pricing was unfavorable by 19% compared to the prior year primarily reflecting lower nutrient values reducing ammonium sulfate pricing, as well as lower nylon pricing. Raw material pass-through pricing was unfavorable by 6% following a net cost decrease in benzene and propylene (inputs to cumene which is a key feedstock to our products). Sales volume decreased approximately 2% driven by soft end market demand impacting portions of our nylon and chemical intermediates product lines, partially offset by higher domestic ammonium sulfate volume to meet strong in-season customer demand. Sales by product line and approximate percentage of total sales are included below: ($ in Thousands) 2Q 2023 2Q 2022 Sales % of Total Sales % of Total Nylon $ 92,953 22% $ 132,105 23 % Caprolactam 74,682 18 % 87,169 15 % Chemical Intermediates 121,365 28 % 158,611 27 % Ammonium Sulfate 138,940 32 % 205,851 35 % $ 427,940 100 % $ 583,736 100 % Adjusted EBITDA of $65.8 million in the quarter decreased $39.6 million versus the prior year primarily due to unfavorable market-based pricing, net of raw material costs, partially offset by the favorable year-over-year impact of planned plant turnarounds, and the net impact of lower sales volume and changes in sales mix including higher domestic plant nutrients sales. Adjusted earnings per share of $1.25 decreased $1.05 versus the prior year driven primarily by the factors discussed above. Cash flow from operations of $35.0 million in the quarter decreased $60.9 million versus the prior year primarily due to lower net income and the unfavorable impact of changes in working capital driven largely by the unwinding of ammonium sulfate pre-buy advances. Capital expenditures of $19.3 million in the quarter increased $1.5 million versus the prior year. Dividend The Company's Board of Directors declared a quarterly cash dividend of $0.16 per share on the Company's common stock. This represents a 10% increase from the previous quarter's dividend. The dividend is payable on August 29, 2023 to stockholders of record as of the close of business on August 15, 2023. Outlook Expect favorable underlying agriculture industry fundamentals to continue; Typical North American ammonium sulfate seasonality expected to drive 3Q23 sequential domestic pricing decline Expect balanced supply and demand conditions for North American acetone to continue Expect continued unfavorable supply and demand conditions across nylon and other chemical intermediates due to headwinds in consumer durables and building and construction end markets Continue to expect Capital Expenditures of $110 million to $120 million in 2023, reflecting increased spend due to critical infrastructure, other maintenance, and growth and cost savings projects Continue to expect pre-tax income impact of planned plant turnarounds to be $25 million to $30 million in 3Q23, totaling $28 million to $33 million in full year 2023 "We are highly focused on the execution of our upcoming third quarter planned plant turnaround to support safe, stable and sustainable operations at higher utilization rates relative to our industry. While we anticipate the impacts of ammonium sulfate seasonality and soft end market demand overall, we remain well positioned to offer near, medium and long-term value for our shareholders supported by the structural improvements made to the underlying earnings power of this business. We are committed to producing the right chemistries with the right properties to solve our customers' most exciting opportunities, recently illustrated by the introduction of new 100 percent post-consumer recycled content nylon,” concluded Kane. Conference Call Information AdvanSix will discuss its results during its investor conference call today starting at 9:00 a.m. ET. To participate on the conference call, dial (844) 855-9494 (domestic) or (412) 858-4602 (international) approximately 10 minutes before the 9:00 a.m. ET start, and tell the operator that you are dialing in for AdvanSix’s second quarter 2023 earnings call. The live webcast of the investor call as well as related presentation materials can be accessed at http://investors.advansix.com. Investors can hear a replay of the conference call from 12 noon ET on August 4 until 12 noon ET on August 11 by dialing (877) 344-7529 (domestic) or (412) 317-0088 (international). The access code is 9404240. About AdvanSix AdvanSix is a diversified chemistry company that produces essential materials for our customers in a wide variety of end markets and applications that touch people’s lives. Our integrated value chain of our five U.S.-based manufacturing facilities plays a critical role in global supply chains and enables us to innovate and deliver essential products for our customers across building and construction, fertilizers, agrochemicals, plastics, solvents, packaging, paints, coatings, adhesives, electronics and other end markets. Guided by our core values of Safety, Integrity, Accountability and Respect, AdvanSix strives to deliver best-in-class customer experiences and differentiated products in the industries of nylon solutions, chemical intermediates, and plant nutrients. More information on AdvanSix can be found at http://www.advansix.com. Forward Looking Statements This release contains certain statements that may be deemed “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of historical fact, that address activities, events or developments that our management intends, expects, projects, believes or anticipates will or may occur in the future are forward-looking statements. Forward-looking statements may be identified by words such as "expect," "anticipate," "estimate," “outlook,” "project," "strategy," "intend," "plan," "target," "goal," "may," "will," "should" and "believe" and other variations or similar terminology and expressions. Although we believe forward-looking statements are based upon reasonable assumptions, such statements involve known and unknown risks, uncertainties and other factors, many of which are beyond our control and difficult to predict, which may cause the actual results or performance of the Company to be materially different from any future results or performance expressed or implied by such forward-looking statements. Such risks and uncertainties include, but are not limited to: general economic and financial conditions in the U.S. and globally, including the impact of the coronavirus (COVID-19) pandemic and any resurgences; the potential effects of inflationary pressures, labor market shortages and supply chain issues; instability or volatility in financial markets or other unfavorable economic or business conditions caused by geopolitical concerns, including as a result of the conflict between Russia and Ukraine; the effect on our customers’ demand for our products and our suppliers’ ability to manufacture and deliver our raw materials, including implications of reduced refinery utilization in the U.S.; our ability to sell and provide our goods and services; the ability of our customers to pay for our products; any closures of our and our customers’ offices and facilities; risks associated with increased phishing, compromised business emails and other cybersecurity attacks and disruptions to our technology infrastructure; risks associated with employees working remotely or operating with a reduced workforce; risks associated with our indebtedness including compliance with financial and restrictive covenants, and our ability to access capital on reasonable terms, at a reasonable cost, or at all, due to economic conditions or otherwise; the impact of scheduled turnarounds and significant unplanned downtime and interruptions of production or logistics operations as a result of mechanical issues or other unanticipated events such as fires, severe weather conditions, natural disasters, pandemics and geopolitical conflicts and related events; price fluctuations, cost increases and supply of raw materials; our operations and growth projects requiring substantial capital; growth rates and cyclicality of the industries we serve including global changes in supply and demand; failure to develop and commercialize new products or technologies; loss of significant customer relationships; adverse trade and tax policies; extensive environmental, health and safety laws that apply to our operations; hazards associated with chemical manufacturing, storage and transportation; litigation associated with chemical manufacturing and our business operations generally; inability to acquire and integrate businesses, assets, products or technologies; protection of our intellectual property and proprietary information; prolonged work stoppages as a result of labor difficulties or otherwise; cybersecurity, data privacy incidents and disruptions to our technology infrastructure; failure to maintain effective internal controls; our ability to declare and pay quarterly cash dividends and the amounts and timing of any future dividends; our ability to repurchase our common stock and the amount and timing of any future repurchases; disruptions in supply chain, transportation and logistics; potential for uncertainty regarding qualification for tax treatment of our spin-off; fluctuations in our stock price; and changes in laws or regulations applicable to our business. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this release. Such forward-looking statements are not guarantees of future performance, and actual results, developments and business decisions may differ from those envisaged by such forward-looking statements. We identify the principal risks and uncertainties that affect our performance in our filings with the Securities and Exchange Commission (SEC), including the risk factors in Part 1, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2022, as updated in subsequent reports filed with the SEC. Non-GAAP Financial Measures This press release includes certain non-GAAP financial measures intended to supplement, not to act as substitutes for, comparable GAAP measures. Reconciliations of non-GAAP financial measures to GAAP financial measures are provided in this press release. Investors are urged to consider carefully the comparable GAAP measures and the reconciliations to those measures provided. Non-GAAP measures in this press release may be calculated in a way that is not comparable to similarly-titled measures reported by other companies. AdvanSix Inc. Condensed Consolidated Balance Sheets (Unaudited) (Dollars in thousands, except share and per share amounts) June 30, 2023 December 31, 2022 ASSETS Current assets: Cash and cash equivalents $ 10,536 $ 30,985 Accounts and other receivables – net 153,148 175,429 Inventories – net 225,986 215,502 Taxes receivable 1,442 9,771 Other current assets 20,043 9,241 Total current assets 411,155 440,928 Property, plant and equipment – net 816,885 811,065 Operating lease right-of-use assets 109,816 114,688 Goodwill 56,192 56,192 Intangible assets 47,717 49,242 Other assets 25,244 23,216 Total assets $ 1,467,009 $ 1,495,331 LIABILITIES Current liabilities: Accounts payable $ 220,158 $ 272,770 Accrued liabilities 43,310 48,820 Operating lease liabilities – short-term 34,342 37,472 Deferred income and customer advances 2,333 34,430 Total current liabilities 300,143 393,492 Deferred income taxes 164,256 160,409 Operating lease liabilities – long-term 75,829 77,571 Line of credit – long-term 140,000 115,000 Postretirement benefit obligations 2,279 — Other liabilities 10,143 10,679 Total liabilities 692,650 757,151 STOCKHOLDERS' EQUITY Common stock, par value $0.01; 200,000,000 shares authorized; 32,577,862 shares issued and 27,302,873 outstanding at June 30, 2023; 31,977,593 shares issued and 27,446,520 outstanding at December 31, 2022 326 320 Preferred stock, par value $0.01; 50,000,000 shares authorized and 0 shares issued and outstanding at June 30, 2023 and December 31, 2022 — — Treasury stock at par (5,274,989 shares at June 30, 2023; 4,531,073 shares at December 31, 2022) (53 ) (45 ) Additional paid-in capital 151,706 174,585 Retained earnings 626,885 567,517 Accumulated other comprehensive loss (4,505 ) (4,197 ) Total stockholders' equity 774,359 738,180 Total liabilities and stockholders' equity $ 1,467,009 $ 1,495,331 AdvanSix Inc. Condensed Consolidated Statements of Operations (Unaudited) (Dollars in thousands, except share and per share amounts) Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Sales $ 427,940 $ 583,736 $ 828,484 $ 1,062,809 Costs, expenses and other: Costs of goods sold 360,017 476,835 690,059 852,482 Selling, general and administrative expenses 24,011 20,841 49,126 42,051 Interest expense, net 1,954 769 3,221 1,332 Other non-operating (income) expense, net (1,325 ) 172 (1,433 ) (431 ) Total costs, expenses and other 384,657 498,617 740,973 895,434 Income before taxes 43,283 85,119 87,511 167,375 Income tax expense 10,555 19,962 19,829 39,145 Net income $ 32,728 $ 65,157 $ 67,682 $ 128,230 Earnings per common share Basic $ 1.19 $ 2.31 $ 2.46 $ 4.55 Diluted $ 1.16 $ 2.23 $ 2.39 $ 4.37 Weighted average common shares outstanding Basic 27,494,555 28,168,207 27,547,874 28,183,951 Diluted 28,113,402 29,262,709 28,348,266 29,316,792 AdvanSix Inc. Condensed Consolidated Statements of Cash Flows (Unaudited) (Dollars in thousands) Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Cash flows from operating activities: Net income $ 32,728 $ 65,157 $ 67,682 $ 128,230 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 18,113 17,534 35,958 34,226 Loss on disposal of assets 400 441 568 800 Deferred income taxes 4,064 3,077 3,894 2,558 Stock-based compensation 2,436 2,005 4,449 5,379 Amortization of deferred financing fees 154 154 309 309 Changes in assets and liabilities, net of business acquisitions: Accounts and other receivables 8,116 (23,743 ) 22,123 (52,145 ) Inventories (1,351 ) 4,901 (10,484 ) 3,012 Taxes receivable (419 ) — 8,329 — Accounts payable 6,172 42,535 (47,216 ) 52,439 Accrued liabilities 2,664 2,897 (5,744 ) (8,821 ) Deferred income and customer advances (23,339 ) (827 ) (32,097 ) (1,142 ) Other assets and liabilities (14,734 ) (18,240 ) (11,192 ) (19,792 ) Net cash provided by operating activities 35,004 95,891 36,579 145,053 Cash flows from investing activities: Expenditures for property, plant and equipment (19,291 ) (17,760 ) (43,894 ) (38,779 ) Acquisition of businesses — 1,133 — (97,456 ) Other investing activities (1,031 ) (925 ) (2,034 ) (1,221 ) Net cash used for investing activities (20,322 ) (17,552 ) (45,928 ) (137,456 ) Cash flows from financing activities: Borrowings from line of credit 152,500 82,000 230,500 230,500 Payments of line of credit (139,500 ) (155,500 ) (205,500 ) (219,000 ) Principal payments of finance leases (225 ) (244 ) (456 ) (481 ) Dividend payments (3,984 ) (3,515 ) (8,004 ) (7,032 ) Purchase of treasury stock (14,886 ) (3,407 ) (28,385 ) (10,419 ) Issuance of common stock 123 318 745 1,032 Net cash used for financing activities (5,972 ) (80,348 ) (11,100 ) (5,400 ) Net change in cash and cash equivalents 8,710 (2,009 ) (20,449 ) 2,197 Cash and cash equivalents at beginning of period 1,826 19,306 30,985 15,100 Cash and cash equivalents at the end of period $ 10,536 $ 17,297 $ 10,536 $ 17,297 Supplemental non-cash investing activities: Capital expenditures included in accounts payable $ 9,832 $ 9,207 AdvanSix Inc. Non-GAAP Measures (Dollars in thousands, except share and per share amounts) Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Net cash provided by operating activities $ 35,004 $ 95,891 $ 36,579 $ 145,053 Expenditures for property, plant and equipment (19,291 ) (17,760 ) (43,894 ) (38,779 ) Free cash flow (1) $ 15,713 $ 78,131 $ (7,315 ) $ 106,274 (1) Free cash flow is a non-GAAP measure defined as Net cash provided by operating activities less Expenditures for property, plant and equipment The Company believes that this metric is useful to investors and management as a measure to evaluate our ability to generate cash flow from business operations and the impact that this cash flow has on our liquidity. Reconciliation of Net Income to Adjusted EBITDA and Earnings Per Share to Adjusted Earnings Per Share Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Net income $ 32,728 $ 65,157 $ 67,682 $ 128,230 Non-cash stock-based compensation 2,436 2,005 4,449 5,379 Non-recurring, unusual or extraordinary expenses — — — — Non-cash amortization from acquisitions 532 551 1,064 752 Non-recurring M&A costs — — — 277 Benefit from income taxes relating to reconciling items (498 ) (439 ) (933 ) (995 ) Adjusted Net Income 35,198 67,274 72,262 133,643 Interest expense, net 1,954 769 3,221 1,332 Income tax expense - adjusted 11,053 20,401 20,763 40,141 Depreciation and amortization - adjusted 17,580 16,982 34,893 33,474 Adjusted EBITDA $ 65,785 $ 105,426 $ 131,139 $ 208,590 Sales $ 427,940 $ 583,736 $ 828,484 $ 1,062,809 Adjusted EBITDA Margin (2) 15.4 % 18.1 % 15.8 % 19.6 % (2) Adjusted EBITDA Margin is defined as Adjusted EBITDA divided by Sales Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Net Income $ 32,728 $ 65,157 $ 67,682 $ 128,230 Adjusted Net Income 35,198 67,274 72,262 133,643 Weighted-average number of common shares outstanding - basic 27,494,555 28,168,207 27,547,874 28,183,951 Dilutive effect of equity awards and other stock-based holdings 618,847 1,094,502 800,392 1,132,841 Weighted-average number of common shares outstanding - diluted 28,113,402 29,262,709 28,348,266 29,316,792 EPS - Basic $ 1.19 $ 2.31 $ 2.46 $ 4.55 EPS - Diluted $ 1.16 $ 2.23 $ 2.39 $ 4.37 Adjusted EPS - Basic $ 1.28 $ 2.39 $ 2.62 $ 4.74 Adjusted EPS - Diluted $ 1.25 $ 2.30 $ 2.55 $ 4.56 The Company believes the non-GAAP financial measures presented in this release provide meaningful supplemental information as they are used by the Company’s management to evaluate the Company’s operating performance, enhance a reader’s understanding of the financial performance of the Company, and facilitate a better comparison among fiscal periods and performance relative to its competitors, as these non-GAAP measures exclude items that are not considered core to the Company’s operations. AdvanSix Inc. Appendix (Pre-tax income impact, Dollars in millions) Planned Plant Turnaround Schedule (3) 1Q 2Q 3Q 4Q FY 2017 — ~$10 ~$4 ~$20 ~$34 2018 ~$2 ~$10 ~$30 — ~$42 2019 — ~$5 ~$5 ~$25 ~$35 2020 ~$2 ~$7 ~$20 ~$2 ~$31 2021 ~$3 ~$8 — ~$18 ~$29 2022 ~$1 ~$5 ~$44 — ~$50 2023E ~$2 ~$1 $25-$30 — $28-$33 (3) Primarily reflects the impact of fixed cost absorption, maintenance expense, and the purchase of feedstocks which are normally manufactured by the Company. View source version on businesswire.com: https://www.businesswire.com/news/home/20230803655711/en/Contacts Media Janeen Lawlor (973) 526-1615 janeen.lawlor@advansix.com Investors Adam Kressel (973) 526-1700 adam.kressel@advansix.com
Sales of $428 million, down 27% versus prior year Earnings Per Share of $1.16; Adjusted Earnings Per Share of $1.25 Returned $19 million of cash to shareholders through repurchases and dividends in 2Q23 Announced 10% increase in quarterly dividend to $0.16 per share
AdvanSix (NYSE: ASIX) today announced its financial results for the second quarter ending June 30, 2023. Overall, the Company delivered solid earnings and cash flow results amid a continued dynamic macro environment. Second Quarter 2023 Summary Sales down approximately 27% versus prior year driven by 19% unfavorable impact of market-based pricing, 6% lower raw material pass-through pricing, and 2% lower volume Net Income of $32.7 million, a decrease of $32.4 million versus the prior year Adjusted EBITDA of $65.8 million, a decrease of $39.6 million versus the prior year Cash Flow from Operations of $35.0 million, a decrease of $60.9 million versus the prior year Capital Expenditures of $19.3 million, an increase of $1.5 million versus the prior year Free Cash Flow of $15.7 million, a decrease of $62.4 million versus the prior year Repurchased 410,862 shares for approximately $14.9 million in 2Q23 “AdvanSix successfully delivered solid earnings and cash flow results in the second quarter against a record prior year,” said Erin Kane, president and CEO of AdvanSix. “The AdvanSix team executed well within a mixed set of dynamics across the portfolio. We captured strong in-season demand for plant nutrients in a significantly lower nitrogen and raw material environment, navigated a nylon pricing environment pressured by industry supply and demand conditions including increased low-priced imports, while North American acetone supply and demand continued to be balanced. Our team’s collective performance and advantaged business model supporting through-cycle profitability illustrates the value and resilience of our diversified chemistry company. Our confidence is reflected in once again increasing our quarterly cash dividend by 10 percent.” Summary second quarter 2023 financial results for the Company are included below: ($ in Thousands, Except Earnings Per Share) 2Q 2023 2Q 2022 Sales $427,940 $583,736 Net Income 32,728 65,157 Diluted Earnings Per Share $1.16 $2.23 Adjusted Diluted Earnings Per Share (1) $1.25 $2.30 Adjusted EBITDA (1) 65,785 105,426 Adjusted EBITDA Margin % (1) 15.4% 18.1% Cash Flow from Operations 35,004 95,891 Free Cash Flow (1)(2) 15,713 78,131 (1) See “Non-GAAP Measures” included in this press release for non-GAAP reconciliations (2) Net cash provided by operating activities less capital expenditures Sales of $428 million in the quarter decreased approximately 27% versus the prior year. Market-based pricing was unfavorable by 19% compared to the prior year primarily reflecting lower nutrient values reducing ammonium sulfate pricing, as well as lower nylon pricing. Raw material pass-through pricing was unfavorable by 6% following a net cost decrease in benzene and propylene (inputs to cumene which is a key feedstock to our products). Sales volume decreased approximately 2% driven by soft end market demand impacting portions of our nylon and chemical intermediates product lines, partially offset by higher domestic ammonium sulfate volume to meet strong in-season customer demand. Sales by product line and approximate percentage of total sales are included below: ($ in Thousands) 2Q 2023 2Q 2022 Sales % of Total Sales % of Total Nylon $ 92,953 22% $ 132,105 23 % Caprolactam 74,682 18 % 87,169 15 % Chemical Intermediates 121,365 28 % 158,611 27 % Ammonium Sulfate 138,940 32 % 205,851 35 % $ 427,940 100 % $ 583,736 100 % Adjusted EBITDA of $65.8 million in the quarter decreased $39.6 million versus the prior year primarily due to unfavorable market-based pricing, net of raw material costs, partially offset by the favorable year-over-year impact of planned plant turnarounds, and the net impact of lower sales volume and changes in sales mix including higher domestic plant nutrients sales. Adjusted earnings per share of $1.25 decreased $1.05 versus the prior year driven primarily by the factors discussed above. Cash flow from operations of $35.0 million in the quarter decreased $60.9 million versus the prior year primarily due to lower net income and the unfavorable impact of changes in working capital driven largely by the unwinding of ammonium sulfate pre-buy advances. Capital expenditures of $19.3 million in the quarter increased $1.5 million versus the prior year. Dividend The Company's Board of Directors declared a quarterly cash dividend of $0.16 per share on the Company's common stock. This represents a 10% increase from the previous quarter's dividend. The dividend is payable on August 29, 2023 to stockholders of record as of the close of business on August 15, 2023. Outlook Expect favorable underlying agriculture industry fundamentals to continue; Typical North American ammonium sulfate seasonality expected to drive 3Q23 sequential domestic pricing decline Expect balanced supply and demand conditions for North American acetone to continue Expect continued unfavorable supply and demand conditions across nylon and other chemical intermediates due to headwinds in consumer durables and building and construction end markets Continue to expect Capital Expenditures of $110 million to $120 million in 2023, reflecting increased spend due to critical infrastructure, other maintenance, and growth and cost savings projects Continue to expect pre-tax income impact of planned plant turnarounds to be $25 million to $30 million in 3Q23, totaling $28 million to $33 million in full year 2023 "We are highly focused on the execution of our upcoming third quarter planned plant turnaround to support safe, stable and sustainable operations at higher utilization rates relative to our industry. While we anticipate the impacts of ammonium sulfate seasonality and soft end market demand overall, we remain well positioned to offer near, medium and long-term value for our shareholders supported by the structural improvements made to the underlying earnings power of this business. We are committed to producing the right chemistries with the right properties to solve our customers' most exciting opportunities, recently illustrated by the introduction of new 100 percent post-consumer recycled content nylon,” concluded Kane. Conference Call Information AdvanSix will discuss its results during its investor conference call today starting at 9:00 a.m. ET. To participate on the conference call, dial (844) 855-9494 (domestic) or (412) 858-4602 (international) approximately 10 minutes before the 9:00 a.m. ET start, and tell the operator that you are dialing in for AdvanSix’s second quarter 2023 earnings call. The live webcast of the investor call as well as related presentation materials can be accessed at http://investors.advansix.com. Investors can hear a replay of the conference call from 12 noon ET on August 4 until 12 noon ET on August 11 by dialing (877) 344-7529 (domestic) or (412) 317-0088 (international). The access code is 9404240. About AdvanSix AdvanSix is a diversified chemistry company that produces essential materials for our customers in a wide variety of end markets and applications that touch people’s lives. Our integrated value chain of our five U.S.-based manufacturing facilities plays a critical role in global supply chains and enables us to innovate and deliver essential products for our customers across building and construction, fertilizers, agrochemicals, plastics, solvents, packaging, paints, coatings, adhesives, electronics and other end markets. Guided by our core values of Safety, Integrity, Accountability and Respect, AdvanSix strives to deliver best-in-class customer experiences and differentiated products in the industries of nylon solutions, chemical intermediates, and plant nutrients. More information on AdvanSix can be found at http://www.advansix.com. Forward Looking Statements This release contains certain statements that may be deemed “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of historical fact, that address activities, events or developments that our management intends, expects, projects, believes or anticipates will or may occur in the future are forward-looking statements. Forward-looking statements may be identified by words such as "expect," "anticipate," "estimate," “outlook,” "project," "strategy," "intend," "plan," "target," "goal," "may," "will," "should" and "believe" and other variations or similar terminology and expressions. Although we believe forward-looking statements are based upon reasonable assumptions, such statements involve known and unknown risks, uncertainties and other factors, many of which are beyond our control and difficult to predict, which may cause the actual results or performance of the Company to be materially different from any future results or performance expressed or implied by such forward-looking statements. Such risks and uncertainties include, but are not limited to: general economic and financial conditions in the U.S. and globally, including the impact of the coronavirus (COVID-19) pandemic and any resurgences; the potential effects of inflationary pressures, labor market shortages and supply chain issues; instability or volatility in financial markets or other unfavorable economic or business conditions caused by geopolitical concerns, including as a result of the conflict between Russia and Ukraine; the effect on our customers’ demand for our products and our suppliers’ ability to manufacture and deliver our raw materials, including implications of reduced refinery utilization in the U.S.; our ability to sell and provide our goods and services; the ability of our customers to pay for our products; any closures of our and our customers’ offices and facilities; risks associated with increased phishing, compromised business emails and other cybersecurity attacks and disruptions to our technology infrastructure; risks associated with employees working remotely or operating with a reduced workforce; risks associated with our indebtedness including compliance with financial and restrictive covenants, and our ability to access capital on reasonable terms, at a reasonable cost, or at all, due to economic conditions or otherwise; the impact of scheduled turnarounds and significant unplanned downtime and interruptions of production or logistics operations as a result of mechanical issues or other unanticipated events such as fires, severe weather conditions, natural disasters, pandemics and geopolitical conflicts and related events; price fluctuations, cost increases and supply of raw materials; our operations and growth projects requiring substantial capital; growth rates and cyclicality of the industries we serve including global changes in supply and demand; failure to develop and commercialize new products or technologies; loss of significant customer relationships; adverse trade and tax policies; extensive environmental, health and safety laws that apply to our operations; hazards associated with chemical manufacturing, storage and transportation; litigation associated with chemical manufacturing and our business operations generally; inability to acquire and integrate businesses, assets, products or technologies; protection of our intellectual property and proprietary information; prolonged work stoppages as a result of labor difficulties or otherwise; cybersecurity, data privacy incidents and disruptions to our technology infrastructure; failure to maintain effective internal controls; our ability to declare and pay quarterly cash dividends and the amounts and timing of any future dividends; our ability to repurchase our common stock and the amount and timing of any future repurchases; disruptions in supply chain, transportation and logistics; potential for uncertainty regarding qualification for tax treatment of our spin-off; fluctuations in our stock price; and changes in laws or regulations applicable to our business. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this release. Such forward-looking statements are not guarantees of future performance, and actual results, developments and business decisions may differ from those envisaged by such forward-looking statements. We identify the principal risks and uncertainties that affect our performance in our filings with the Securities and Exchange Commission (SEC), including the risk factors in Part 1, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2022, as updated in subsequent reports filed with the SEC. Non-GAAP Financial Measures This press release includes certain non-GAAP financial measures intended to supplement, not to act as substitutes for, comparable GAAP measures. Reconciliations of non-GAAP financial measures to GAAP financial measures are provided in this press release. Investors are urged to consider carefully the comparable GAAP measures and the reconciliations to those measures provided. Non-GAAP measures in this press release may be calculated in a way that is not comparable to similarly-titled measures reported by other companies. AdvanSix Inc. Condensed Consolidated Balance Sheets (Unaudited) (Dollars in thousands, except share and per share amounts) June 30, 2023 December 31, 2022 ASSETS Current assets: Cash and cash equivalents $ 10,536 $ 30,985 Accounts and other receivables – net 153,148 175,429 Inventories – net 225,986 215,502 Taxes receivable 1,442 9,771 Other current assets 20,043 9,241 Total current assets 411,155 440,928 Property, plant and equipment – net 816,885 811,065 Operating lease right-of-use assets 109,816 114,688 Goodwill 56,192 56,192 Intangible assets 47,717 49,242 Other assets 25,244 23,216 Total assets $ 1,467,009 $ 1,495,331 LIABILITIES Current liabilities: Accounts payable $ 220,158 $ 272,770 Accrued liabilities 43,310 48,820 Operating lease liabilities – short-term 34,342 37,472 Deferred income and customer advances 2,333 34,430 Total current liabilities 300,143 393,492 Deferred income taxes 164,256 160,409 Operating lease liabilities – long-term 75,829 77,571 Line of credit – long-term 140,000 115,000 Postretirement benefit obligations 2,279 — Other liabilities 10,143 10,679 Total liabilities 692,650 757,151 STOCKHOLDERS' EQUITY Common stock, par value $0.01; 200,000,000 shares authorized; 32,577,862 shares issued and 27,302,873 outstanding at June 30, 2023; 31,977,593 shares issued and 27,446,520 outstanding at December 31, 2022 326 320 Preferred stock, par value $0.01; 50,000,000 shares authorized and 0 shares issued and outstanding at June 30, 2023 and December 31, 2022 — — Treasury stock at par (5,274,989 shares at June 30, 2023; 4,531,073 shares at December 31, 2022) (53 ) (45 ) Additional paid-in capital 151,706 174,585 Retained earnings 626,885 567,517 Accumulated other comprehensive loss (4,505 ) (4,197 ) Total stockholders' equity 774,359 738,180 Total liabilities and stockholders' equity $ 1,467,009 $ 1,495,331 AdvanSix Inc. Condensed Consolidated Statements of Operations (Unaudited) (Dollars in thousands, except share and per share amounts) Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Sales $ 427,940 $ 583,736 $ 828,484 $ 1,062,809 Costs, expenses and other: Costs of goods sold 360,017 476,835 690,059 852,482 Selling, general and administrative expenses 24,011 20,841 49,126 42,051 Interest expense, net 1,954 769 3,221 1,332 Other non-operating (income) expense, net (1,325 ) 172 (1,433 ) (431 ) Total costs, expenses and other 384,657 498,617 740,973 895,434 Income before taxes 43,283 85,119 87,511 167,375 Income tax expense 10,555 19,962 19,829 39,145 Net income $ 32,728 $ 65,157 $ 67,682 $ 128,230 Earnings per common share Basic $ 1.19 $ 2.31 $ 2.46 $ 4.55 Diluted $ 1.16 $ 2.23 $ 2.39 $ 4.37 Weighted average common shares outstanding Basic 27,494,555 28,168,207 27,547,874 28,183,951 Diluted 28,113,402 29,262,709 28,348,266 29,316,792 AdvanSix Inc. Condensed Consolidated Statements of Cash Flows (Unaudited) (Dollars in thousands) Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Cash flows from operating activities: Net income $ 32,728 $ 65,157 $ 67,682 $ 128,230 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 18,113 17,534 35,958 34,226 Loss on disposal of assets 400 441 568 800 Deferred income taxes 4,064 3,077 3,894 2,558 Stock-based compensation 2,436 2,005 4,449 5,379 Amortization of deferred financing fees 154 154 309 309 Changes in assets and liabilities, net of business acquisitions: Accounts and other receivables 8,116 (23,743 ) 22,123 (52,145 ) Inventories (1,351 ) 4,901 (10,484 ) 3,012 Taxes receivable (419 ) — 8,329 — Accounts payable 6,172 42,535 (47,216 ) 52,439 Accrued liabilities 2,664 2,897 (5,744 ) (8,821 ) Deferred income and customer advances (23,339 ) (827 ) (32,097 ) (1,142 ) Other assets and liabilities (14,734 ) (18,240 ) (11,192 ) (19,792 ) Net cash provided by operating activities 35,004 95,891 36,579 145,053 Cash flows from investing activities: Expenditures for property, plant and equipment (19,291 ) (17,760 ) (43,894 ) (38,779 ) Acquisition of businesses — 1,133 — (97,456 ) Other investing activities (1,031 ) (925 ) (2,034 ) (1,221 ) Net cash used for investing activities (20,322 ) (17,552 ) (45,928 ) (137,456 ) Cash flows from financing activities: Borrowings from line of credit 152,500 82,000 230,500 230,500 Payments of line of credit (139,500 ) (155,500 ) (205,500 ) (219,000 ) Principal payments of finance leases (225 ) (244 ) (456 ) (481 ) Dividend payments (3,984 ) (3,515 ) (8,004 ) (7,032 ) Purchase of treasury stock (14,886 ) (3,407 ) (28,385 ) (10,419 ) Issuance of common stock 123 318 745 1,032 Net cash used for financing activities (5,972 ) (80,348 ) (11,100 ) (5,400 ) Net change in cash and cash equivalents 8,710 (2,009 ) (20,449 ) 2,197 Cash and cash equivalents at beginning of period 1,826 19,306 30,985 15,100 Cash and cash equivalents at the end of period $ 10,536 $ 17,297 $ 10,536 $ 17,297 Supplemental non-cash investing activities: Capital expenditures included in accounts payable $ 9,832 $ 9,207 AdvanSix Inc. Non-GAAP Measures (Dollars in thousands, except share and per share amounts) Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Net cash provided by operating activities $ 35,004 $ 95,891 $ 36,579 $ 145,053 Expenditures for property, plant and equipment (19,291 ) (17,760 ) (43,894 ) (38,779 ) Free cash flow (1) $ 15,713 $ 78,131 $ (7,315 ) $ 106,274 (1) Free cash flow is a non-GAAP measure defined as Net cash provided by operating activities less Expenditures for property, plant and equipment The Company believes that this metric is useful to investors and management as a measure to evaluate our ability to generate cash flow from business operations and the impact that this cash flow has on our liquidity. Reconciliation of Net Income to Adjusted EBITDA and Earnings Per Share to Adjusted Earnings Per Share Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Net income $ 32,728 $ 65,157 $ 67,682 $ 128,230 Non-cash stock-based compensation 2,436 2,005 4,449 5,379 Non-recurring, unusual or extraordinary expenses — — — — Non-cash amortization from acquisitions 532 551 1,064 752 Non-recurring M&A costs — — — 277 Benefit from income taxes relating to reconciling items (498 ) (439 ) (933 ) (995 ) Adjusted Net Income 35,198 67,274 72,262 133,643 Interest expense, net 1,954 769 3,221 1,332 Income tax expense - adjusted 11,053 20,401 20,763 40,141 Depreciation and amortization - adjusted 17,580 16,982 34,893 33,474 Adjusted EBITDA $ 65,785 $ 105,426 $ 131,139 $ 208,590 Sales $ 427,940 $ 583,736 $ 828,484 $ 1,062,809 Adjusted EBITDA Margin (2) 15.4 % 18.1 % 15.8 % 19.6 % (2) Adjusted EBITDA Margin is defined as Adjusted EBITDA divided by Sales Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Net Income $ 32,728 $ 65,157 $ 67,682 $ 128,230 Adjusted Net Income 35,198 67,274 72,262 133,643 Weighted-average number of common shares outstanding - basic 27,494,555 28,168,207 27,547,874 28,183,951 Dilutive effect of equity awards and other stock-based holdings 618,847 1,094,502 800,392 1,132,841 Weighted-average number of common shares outstanding - diluted 28,113,402 29,262,709 28,348,266 29,316,792 EPS - Basic $ 1.19 $ 2.31 $ 2.46 $ 4.55 EPS - Diluted $ 1.16 $ 2.23 $ 2.39 $ 4.37 Adjusted EPS - Basic $ 1.28 $ 2.39 $ 2.62 $ 4.74 Adjusted EPS - Diluted $ 1.25 $ 2.30 $ 2.55 $ 4.56 The Company believes the non-GAAP financial measures presented in this release provide meaningful supplemental information as they are used by the Company’s management to evaluate the Company’s operating performance, enhance a reader’s understanding of the financial performance of the Company, and facilitate a better comparison among fiscal periods and performance relative to its competitors, as these non-GAAP measures exclude items that are not considered core to the Company’s operations. AdvanSix Inc. Appendix (Pre-tax income impact, Dollars in millions) Planned Plant Turnaround Schedule (3) 1Q 2Q 3Q 4Q FY 2017 — ~$10 ~$4 ~$20 ~$34 2018 ~$2 ~$10 ~$30 — ~$42 2019 — ~$5 ~$5 ~$25 ~$35 2020 ~$2 ~$7 ~$20 ~$2 ~$31 2021 ~$3 ~$8 — ~$18 ~$29 2022 ~$1 ~$5 ~$44 — ~$50 2023E ~$2 ~$1 $25-$30 — $28-$33 (3) Primarily reflects the impact of fixed cost absorption, maintenance expense, and the purchase of feedstocks which are normally manufactured by the Company. View source version on businesswire.com: https://www.businesswire.com/news/home/20230803655711/en/
Media Janeen Lawlor (973) 526-1615 janeen.lawlor@advansix.com Investors Adam Kressel (973) 526-1700 adam.kressel@advansix.com