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 Fourth Quarter and Full Year 2023 Financial Results By: AdvanSix via Business Wire February 16, 2024 at 06:30 AM EST 4Q23 Sales of $382 million, down 5% versus prior year 4Q23 Earnings Per Share of ($0.19); Adjusted Earnings Per Share of ($0.10) 4Q23 Cash Flow from Operations of $60 million Returned $63 million of cash to shareholders through repurchases and dividends in 2023 AdvanSix (NYSE: ASIX) today announced its financial results for the fourth quarter and full year ending December 31, 2023. The following results reflect our navigation of a challenging end market environment while maintaining focus on long-term priorities including portfolio simplification in the year and continued investments in support of improved through-cycle profitability. Full Year 2023 Summary Sales down 21% versus prior year driven by 17% unfavorable impact of market-based pricing and 5% lower raw material pass-through pricing, partially offset by 1% contribution from acquisitions and flat volume Net Income of $54.6 million, a decrease of $117.3 million versus the prior year Adjusted EBITDA of $153.6 million, a decrease of $154.9 million versus the prior year Cash Flow from Operations of $117.6 million, a decrease of $156.1 million versus the prior year Capital Expenditures of $107.4 million, an increase of $17.9 million versus the prior year Free Cash Flow of $10.2 million, a decrease of $174.0 million versus the prior year Repurchased 1,317,402 shares for approximately $46.2 million in 2023 Summary full year 2023 financial results for the Company are included below: ($ in Thousands, Except Earnings Per Share) FY 2023 FY 2022 Sales $1,533,599 $1,945,640 Net Income 54,623 171,886 Diluted Earnings Per Share $1.95 $5.92 Adjusted Diluted Earnings Per Share (1) $2.14 $6.28 Adjusted EBITDA (1) 153,559 308,481 Adjusted EBITDA Margin % (1) 10.0% 15.9% Cash Flow from Operations 117,550 273,601 Free Cash Flow (1)(2) 10,173 184,152 (1) See “Non-GAAP Measures” included in this press release for non-GAAP reconciliations (2) Net cash provided by operating activities less capital expenditures “I'm proud of the team and our continued commitment to driving improved through-cycle profitability. Our healthy balance sheet helped to support our performance through challenging market conditions, particularly in Nylon Solutions, while maintaining organic investments and return of cash to our shareholders,” said Erin Kane, president and CEO of AdvanSix. “Core to our long-term strategy is accelerating growth in the most profitable areas of our portfolio, continuous improvement to strengthen the underlying earnings power of the business, and sustaining our cost-advantaged business model." Fourth Quarter 2023 Summary Sales down 5% versus prior year driven by 22% unfavorable impact of market-based pricing, partially offset by a 16% increase in volume and 1% higher raw materials pass-through pricing. Net Loss of ($5.1) million, a decrease of $38.7 million versus the prior year Adjusted EBITDA of $15.1 million, a decrease of $51.5 million versus the prior year Cash Flow from Operations of $60.2 million, a decrease of $9.4 million versus the prior year Capital Expenditures of $38.4 million, an increase of $9.9 million versus the prior year Free Cash Flow of $21.8 million, a decrease of $19.4 million versus the prior year Repurchased 306,527 shares for approximately $8.5 million in 4Q23 Summary fourth quarter 2023 financial results for the Company are included below: ($ in Thousands, Except Earnings Per Share) 4Q 2023 4Q 2022 Sales $382,208 $404,062 Net Income (Loss) (5,082) 33,625 Diluted Earnings Per Share ($0.19) $1.18 Adjusted Diluted Earnings Per Share (1) ($0.10) $1.27 Adjusted EBITDA (1) 15,099 66,580 Adjusted EBITDA Margin % (1) 4.0% 16.5% Cash Flow from Operations 60,169 69,614 Free Cash Flow (1)(2) 21,817 41,175 (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 $382 million in the quarter decreased approximately 5% versus the prior year. Market-based pricing was unfavorable by 22% compared to the prior year primarily reflecting reduced ammonium sulfate pricing amid lower raw material input costs and a more stable global nitrogen supply environment, as well as lower nylon pricing due to unfavorable supply and demand conditions. Sales volume increased approximately 16% primarily driven by higher export shipments in both Ammonium Sulfate and Nylon. Raw material pass-through pricing was favorable by 1% as a result of a net cost increase in benzene and propylene (inputs to cumene which is a key feedstock to our products). Sales by product line and approximate percentage of total sales are included below: ($ in Thousands) FY 2023 FY 2022 Sales % of Total Sales % of Total Nylon $ 356,632 23% $ 485,241 25% Caprolactam 298,375 19% 319,863 16% Ammonium Sulfate 440,915 29% 629,021 33% Chemical Intermediates 437,677 29% 511,515 26% $ 1,533,599 100% $ 1,945,640 100% ($ in Thousands) 4Q 2023 4Q 2022 Sales % of Total Sales % of Total Nylon $ 78,251 20% $ 93,510 23% Caprolactam 82,508 22% 71,871 18% Ammonium Sulfate 108,691 28% 136,734 34% Chemical Intermediates 112,759 30% 101,947 25% $ 382,209 100% $ 404,062 100% Adjusted EBITDA of $15.1 million in the quarter decreased $51.5 million versus the prior year primarily due to unfavorable market-based pricing, net of raw material costs, partially offset by the net impact of higher sales volume and changes in sales mix including higher export volume. Adjusted earnings per share of ($0.10) decreased $1.37 versus the prior year driven primarily by the factors discussed above. Cash flow from operations of $60.2 million in the quarter decreased $9.4 million versus the prior year primarily due to lower net income, partially offset by the favorable impact of changes in working capital. Capital expenditures of $38.4 million in the quarter increased $9.9 million versus the prior year primarily reflecting increased spend on enterprise programs and other maintenance projects. Dividend The Company's Board of Directors declared a quarterly cash dividend of $0.16 per share on the Company's common stock. The dividend is payable on March 18, 2024 to stockholders of record as of the close of business on March 4, 2024. Outlook Expect nylon industry spreads to remain stabilized near current levels amid weak demand; Anticipate higher Nylon Solutions exports in first half of 2024 year-over-year Anticipate strong ammonium sulfate seasonal demand supported by continued favorable underlying agriculture industry fundamentals; Expect first half 2024 year-over-year pricing declines amid lower nitrogen pricing environment Expect balanced to tight global acetone supply and demand conditions Expect Capital Expenditures of $140 to $150 million in 2024, reflecting increased spend to address critical enterprise risk mitigation and growth projects including our SUSTAIN program Expect pre-tax income impact of planned plant turnarounds to be $38 to $43 million in 2024 versus approximately $30 million in 2023 Now expect to incur a total unfavorable impact to pre-tax income in 1Q24 of $23 to $27 million as a result of the process-based operational disruption at our Frankford, PA manufacturing site and a delayed ramp to planned utilization rates "While the previously disclosed operational disruption at our Frankford, Pennsylvania manufacturing site is impacting our first quarter results, our teams have been focused on stabilization of phenol production, which is enabling us to ramp up our Hopewell and Chesterfield manufacturing facilities to our targeted utilization rates. We thank our customers, partners and AdvanSix teammates for their collaboration and agility to mitigate the value chain impact of this event. Our focus remains on performing in the current set of industry dynamics and executing levers in our control, including remaining disciplined on cost and optimizing working capital. Our outlook reflects a continued investment in our long-term potential through both our SUSTAIN program's planned expansion in granular ammonium sulfate production and increased infrastructure spend in 2024 to mitigate enterprise risk,” 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 fourth 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 February 16 until 12 noon ET on February 23 by dialing (877) 344-7529 (domestic) or (412) 317-0088 (international). The access code is 4232990. 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, plant nutrients, and chemical intermediates. 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; 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 conflict in Israel and Gaza, and the possible expansion of such conflicts; the effect of the foregoing 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, data privacy incidents 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; 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. Consolidated Balance Sheets (Unaudited) (Dollars in thousands, except share and per share amounts) December 31, 2023 December 31, 2022 ASSETS Current assets: Cash and cash equivalents $ 29,768 $ 30,985 Accounts and other receivables – net 165,393 175,429 Inventories – net 211,831 215,502 Taxes receivable 1,434 9,771 Other current assets 11,378 9,241 Total current assets 419,804 440,928 Property, plant and equipment – net 852,642 811,065 Operating lease right-of-use assets 95,805 114,688 Goodwill 56,192 56,192 Intangible assets 46,193 49,242 Other assets 25,384 23,216 Total assets $ 1,496,020 $ 1,495,331 LIABILITIES Current liabilities: Accounts payable $ 259,068 $ 272,740 Accrued liabilities 44,086 48,820 Income taxes payable 8,033 30 Operating lease liabilities – short-term 32,053 37,472 Deferred income and customer advances 15,678 34,430 Total current liabilities 358,918 393,492 Deferred income taxes 151,059 160,409 Operating lease liabilities – long-term 63,961 77,571 Line of credit – long-term 170,000 115,000 Postretirement benefit obligations 3,660 — Other liabilities 9,185 10,679 Total liabilities 756,783 757,151 STOCKHOLDERS' EQUITY Common stock, par value $0.01; 200,000,000 shares authorized; 32,598,946 shares issued and 26,750,471 outstanding at December 31, 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; 0 shares issued and outstanding at December 31, 2023 and 2022 — — Treasury stock at par (5,848,475 shares at December 31, 2023; 4,531,073 shares at December 31, 2022) (58 ) (45 ) Additional paid-in capital 138,046 174,585 Retained earnings 605,067 567,517 Accumulated other comprehensive loss (4,144 ) (4,197 ) Total stockholders' equity 739,237 738,180 Total liabilities and stockholders' equity $ 1,496,020 $ 1,495,331 AdvanSix Inc. Consolidated Statements of Operations (Unaudited) (Dollars in thousands, except share and per share amounts) Three Months Ended December 31, Twelve Months Ended December 31, 2023 2022 2023 2022 Sales $ 382,208 $ 404,062 $ 1,533,599 $ 1,945,640 Costs, expenses and other: Costs of goods sold 363,667 335,033 1,368,511 1,631,161 Selling, general and administrative expenses 24,828 22,628 95,538 87,748 Interest expense, net 2,189 763 7,485 2,781 Other non-operating (income) expense, net (240 ) (16 ) (7,158 ) (1,841 ) Total costs, expenses and other 390,444 358,408 1,464,376 1,719,849 Income (loss) before taxes (8,236 ) 45,654 69,223 225,791 Income tax expense (benefit) (3,154 ) 12,029 14,600 53,905 Net Income (loss) $ (5,082 ) $ 33,625 $ 54,623 $ 171,886 Earnings per common share Basic $ (0.19 ) $ 1.22 $ 2.00 $ 6.15 Diluted $ (0.19 ) $ 1.18 $ 1.95 $ 5.92 Weighted average common shares outstanding Basic 26,911,754 27,572,344 27,302,254 27,969,436 Diluted 26,911,754 28,608,181 28,007,630 29,031,107 AdvanSix Inc. Consolidated Statements of Cash Flows (Unaudited) (Dollars in thousands) Three Months Ended December 31, Twelve Months Ended December 31, 2023 2022 2023 2022 Cash flows from operating activities: Net income (loss) $ (5,082 ) $ 33,625 $ 54,623 $ 171,886 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 18,673 17,483 73,010 69,353 Loss on disposal of assets 342 218 1,281 1,521 Deferred income taxes (10,416 ) 7,532 (9,347 ) 16,228 Stock-based compensation 2,473 2,680 8,313 10,279 Amortization of deferred financing fees 154 154 618 618 Operational asset adjustments — — (4,472 ) — Changes in assets and liabilities, net of business acquisitions: Accounts and other receivables (20,696 ) 10,496 21,489 17,842 Inventories 17,368 (57,070 ) 3,286 (57,043 ) Taxes receivable 64 5,159 8,337 (8,824 ) Accounts payable 27,231 22,094 (20,756 ) 55,863 Income taxes payable 8,003 (9,693 ) 8,003 (9,693 ) Accrued liabilities 2,218 4,544 (5,569 ) (3,122 ) Deferred income and customer advances 13,263 31,869 (18,752 ) 31,681 Other assets and liabilities 6,574 523 (2,514 ) (22,988 ) Net cash provided by operating activities 60,169 69,614 117,550 273,601 Cash flows from investing activities: Expenditures for property, plant and equipment (38,352 ) (28,439 ) (107,377 ) (89,449 ) Acquisition of businesses — — — (97,456 ) Other investing activities (1,116 ) (781 ) (3,520 ) (2,368 ) Net cash used for investing activities (39,468 ) (29,220 ) (110,897 ) (189,273 ) Cash flows from financing activities: Borrowings from line of credit 66,000 80,500 437,000 434,500 Payments of line of credit (66,000 ) (100,500 ) (382,000 ) (454,500 ) Principal payments of finance leases (240 ) (214 ) (938 ) (926 ) Dividend payments (4,303 ) (3,990 ) (16,657 ) (15,073 ) Purchase of treasury stock (8,500 ) (10,157 ) (46,151 ) (33,748 ) Issuance of common stock — 258 876 1,304 Net cash used for financing activities (13,043 ) (34,103 ) (7,870 ) (68,443 ) Net change in cash and cash equivalents 7,658 6,291 (1,217 ) 15,885 Cash and cash equivalents at beginning of year 22,110 24,694 30,985 15,100 Cash and cash equivalents at the end of year $ 29,768 $ 30,985 $ 29,768 $ 30,985 Supplemental non-cash investing activities: Capital expenditures included in accounts payable $ 22,660 $ 14,879 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 December 31, Twelve Months Ended December 31, 2023 2022 2023 2022 Net cash provided by operating activities $ 60,169 $ 69,614 $ 117,550 $ 273,601 Expenditures for property, plant and equipment (38,352 ) (28,439 ) (107,377 ) (89,449 ) Free cash flow (1) $ 21,817 $ 41,175 $ 10,173 $ 184,152 (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 December 31, Twelve Months Ended December 31, 2023 2022 2023 2022 Net Income (loss) $ (5,082 ) $ 33,625 $ 54,623 $ 171,886 Non-cash stock-based compensation 2,473 2,680 8,313 10,279 Non-recurring, unusual or extraordinary expenses (income) (2) — — (4,472 ) — Non-cash amortization from acquisitions 530 532 2,126 1,815 Non-recurring M&A costs — — — 277 Benefit from income taxes relating to reconciling items (504 ) (535 ) (661 ) (1,996 ) Adjusted Net Income (loss) (2,583 ) 36,302 59,929 182,261 Interest expense, net 2,189 763 7,485 2,781 Income tax expense (benefit) - Adjusted (2,650 ) 12,564 15,261 55,901 Depreciation and amortization - Adjusted 18,143 16,951 70,884 67,538 Adjusted EBITDA $ 15,099 $ 66,580 $ 153,559 $ 308,481 Sales $ 382,208 $ 404,062 $ 1,533,599 $ 1,945,640 Adjusted EBITDA Margin (3) 4.0 % 16.5 % 10.0 % 15.9 % (2) Includes a pre-tax gain of approximately $11.4 million related to the Company's exit from the Oben alliance, the unfavorable impact to pre-tax income of approximately $4.5 million associated with a licensee of certain legacy ammonium sulfate fertilizer technology assets closing its facility, and the unfavorable impact to pre-tax income of approximately $2.4 million from the exit of certain low-margin oximes products. (3) Adjusted EBITDA Margin is defined as Adjusted EBITDA divided by Sales Three Months Ended December 31, Twelve Months Ended December 31, 2023 2022 2023 2022 Net Income (loss) $ (5,082 ) $ 33,625 $ 54,623 $ 171,886 Adjusted Net Income (loss) (2,583 ) 36,302 59,929 182,261 Weighted-average number of common shares outstanding - basic 26,911,754 27,572,344 27,302,254 27,969,436 Dilutive effect of equity awards and other stock-based holdings — 1,035,837 705,376 1,061,671 Weighted-average number of common shares outstanding - diluted 26,911,754 28,608,181 28,007,630 29,031,107 EPS - Basic $ (0.19 ) $ 1.22 $ 2.00 $ 6.15 EPS - Diluted $ (0.19 ) $ 1.18 $ 1.95 $ 5.92 Adjusted EPS - Basic $ (0.10 ) $ 1.32 $ 2.20 $ 6.52 Adjusted EPS - Diluted $ (0.10 ) $ 1.27 $ 2.14 $ 6.28 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 (4) 1Q 2Q 3Q 4Q FY Primary Unit Operation 2017 — ~$10 ~$4 ~$20 ~$34 Sulfuric Acid 2018 ~$2 ~$10 ~$30 — ~$42 Ammonia 2019 — ~$5 ~$5 ~$25 ~$35 Sulfuric Acid 2020 ~$2 ~$7 ~$20 ~$2 ~$31 Ammonia 2021 ~$3 ~$8 — ~$18 ~$29 Sulfuric Acid 2022 ~$1 ~$5 ~$44 — ~$50 Ammonia 2023 ~$2 ~$1 ~$27 — ~$30 Sulfuric Acid 2024E ~$6 — $28-$33 ~$4 $38-$43 Ammonia (4) 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/20240215530378/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. 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AdvanSix Announces Fourth Quarter and Full Year 2023 Financial Results By: AdvanSix via Business Wire February 16, 2024 at 06:30 AM EST 4Q23 Sales of $382 million, down 5% versus prior year 4Q23 Earnings Per Share of ($0.19); Adjusted Earnings Per Share of ($0.10) 4Q23 Cash Flow from Operations of $60 million Returned $63 million of cash to shareholders through repurchases and dividends in 2023 AdvanSix (NYSE: ASIX) today announced its financial results for the fourth quarter and full year ending December 31, 2023. The following results reflect our navigation of a challenging end market environment while maintaining focus on long-term priorities including portfolio simplification in the year and continued investments in support of improved through-cycle profitability. Full Year 2023 Summary Sales down 21% versus prior year driven by 17% unfavorable impact of market-based pricing and 5% lower raw material pass-through pricing, partially offset by 1% contribution from acquisitions and flat volume Net Income of $54.6 million, a decrease of $117.3 million versus the prior year Adjusted EBITDA of $153.6 million, a decrease of $154.9 million versus the prior year Cash Flow from Operations of $117.6 million, a decrease of $156.1 million versus the prior year Capital Expenditures of $107.4 million, an increase of $17.9 million versus the prior year Free Cash Flow of $10.2 million, a decrease of $174.0 million versus the prior year Repurchased 1,317,402 shares for approximately $46.2 million in 2023 Summary full year 2023 financial results for the Company are included below: ($ in Thousands, Except Earnings Per Share) FY 2023 FY 2022 Sales $1,533,599 $1,945,640 Net Income 54,623 171,886 Diluted Earnings Per Share $1.95 $5.92 Adjusted Diluted Earnings Per Share (1) $2.14 $6.28 Adjusted EBITDA (1) 153,559 308,481 Adjusted EBITDA Margin % (1) 10.0% 15.9% Cash Flow from Operations 117,550 273,601 Free Cash Flow (1)(2) 10,173 184,152 (1) See “Non-GAAP Measures” included in this press release for non-GAAP reconciliations (2) Net cash provided by operating activities less capital expenditures “I'm proud of the team and our continued commitment to driving improved through-cycle profitability. Our healthy balance sheet helped to support our performance through challenging market conditions, particularly in Nylon Solutions, while maintaining organic investments and return of cash to our shareholders,” said Erin Kane, president and CEO of AdvanSix. “Core to our long-term strategy is accelerating growth in the most profitable areas of our portfolio, continuous improvement to strengthen the underlying earnings power of the business, and sustaining our cost-advantaged business model." Fourth Quarter 2023 Summary Sales down 5% versus prior year driven by 22% unfavorable impact of market-based pricing, partially offset by a 16% increase in volume and 1% higher raw materials pass-through pricing. Net Loss of ($5.1) million, a decrease of $38.7 million versus the prior year Adjusted EBITDA of $15.1 million, a decrease of $51.5 million versus the prior year Cash Flow from Operations of $60.2 million, a decrease of $9.4 million versus the prior year Capital Expenditures of $38.4 million, an increase of $9.9 million versus the prior year Free Cash Flow of $21.8 million, a decrease of $19.4 million versus the prior year Repurchased 306,527 shares for approximately $8.5 million in 4Q23 Summary fourth quarter 2023 financial results for the Company are included below: ($ in Thousands, Except Earnings Per Share) 4Q 2023 4Q 2022 Sales $382,208 $404,062 Net Income (Loss) (5,082) 33,625 Diluted Earnings Per Share ($0.19) $1.18 Adjusted Diluted Earnings Per Share (1) ($0.10) $1.27 Adjusted EBITDA (1) 15,099 66,580 Adjusted EBITDA Margin % (1) 4.0% 16.5% Cash Flow from Operations 60,169 69,614 Free Cash Flow (1)(2) 21,817 41,175 (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 $382 million in the quarter decreased approximately 5% versus the prior year. Market-based pricing was unfavorable by 22% compared to the prior year primarily reflecting reduced ammonium sulfate pricing amid lower raw material input costs and a more stable global nitrogen supply environment, as well as lower nylon pricing due to unfavorable supply and demand conditions. Sales volume increased approximately 16% primarily driven by higher export shipments in both Ammonium Sulfate and Nylon. Raw material pass-through pricing was favorable by 1% as a result of a net cost increase in benzene and propylene (inputs to cumene which is a key feedstock to our products). Sales by product line and approximate percentage of total sales are included below: ($ in Thousands) FY 2023 FY 2022 Sales % of Total Sales % of Total Nylon $ 356,632 23% $ 485,241 25% Caprolactam 298,375 19% 319,863 16% Ammonium Sulfate 440,915 29% 629,021 33% Chemical Intermediates 437,677 29% 511,515 26% $ 1,533,599 100% $ 1,945,640 100% ($ in Thousands) 4Q 2023 4Q 2022 Sales % of Total Sales % of Total Nylon $ 78,251 20% $ 93,510 23% Caprolactam 82,508 22% 71,871 18% Ammonium Sulfate 108,691 28% 136,734 34% Chemical Intermediates 112,759 30% 101,947 25% $ 382,209 100% $ 404,062 100% Adjusted EBITDA of $15.1 million in the quarter decreased $51.5 million versus the prior year primarily due to unfavorable market-based pricing, net of raw material costs, partially offset by the net impact of higher sales volume and changes in sales mix including higher export volume. Adjusted earnings per share of ($0.10) decreased $1.37 versus the prior year driven primarily by the factors discussed above. Cash flow from operations of $60.2 million in the quarter decreased $9.4 million versus the prior year primarily due to lower net income, partially offset by the favorable impact of changes in working capital. Capital expenditures of $38.4 million in the quarter increased $9.9 million versus the prior year primarily reflecting increased spend on enterprise programs and other maintenance projects. Dividend The Company's Board of Directors declared a quarterly cash dividend of $0.16 per share on the Company's common stock. The dividend is payable on March 18, 2024 to stockholders of record as of the close of business on March 4, 2024. Outlook Expect nylon industry spreads to remain stabilized near current levels amid weak demand; Anticipate higher Nylon Solutions exports in first half of 2024 year-over-year Anticipate strong ammonium sulfate seasonal demand supported by continued favorable underlying agriculture industry fundamentals; Expect first half 2024 year-over-year pricing declines amid lower nitrogen pricing environment Expect balanced to tight global acetone supply and demand conditions Expect Capital Expenditures of $140 to $150 million in 2024, reflecting increased spend to address critical enterprise risk mitigation and growth projects including our SUSTAIN program Expect pre-tax income impact of planned plant turnarounds to be $38 to $43 million in 2024 versus approximately $30 million in 2023 Now expect to incur a total unfavorable impact to pre-tax income in 1Q24 of $23 to $27 million as a result of the process-based operational disruption at our Frankford, PA manufacturing site and a delayed ramp to planned utilization rates "While the previously disclosed operational disruption at our Frankford, Pennsylvania manufacturing site is impacting our first quarter results, our teams have been focused on stabilization of phenol production, which is enabling us to ramp up our Hopewell and Chesterfield manufacturing facilities to our targeted utilization rates. We thank our customers, partners and AdvanSix teammates for their collaboration and agility to mitigate the value chain impact of this event. Our focus remains on performing in the current set of industry dynamics and executing levers in our control, including remaining disciplined on cost and optimizing working capital. Our outlook reflects a continued investment in our long-term potential through both our SUSTAIN program's planned expansion in granular ammonium sulfate production and increased infrastructure spend in 2024 to mitigate enterprise risk,” 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 fourth 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 February 16 until 12 noon ET on February 23 by dialing (877) 344-7529 (domestic) or (412) 317-0088 (international). The access code is 4232990. 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, plant nutrients, and chemical intermediates. 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; 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 conflict in Israel and Gaza, and the possible expansion of such conflicts; the effect of the foregoing 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, data privacy incidents 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; 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. Consolidated Balance Sheets (Unaudited) (Dollars in thousands, except share and per share amounts) December 31, 2023 December 31, 2022 ASSETS Current assets: Cash and cash equivalents $ 29,768 $ 30,985 Accounts and other receivables – net 165,393 175,429 Inventories – net 211,831 215,502 Taxes receivable 1,434 9,771 Other current assets 11,378 9,241 Total current assets 419,804 440,928 Property, plant and equipment – net 852,642 811,065 Operating lease right-of-use assets 95,805 114,688 Goodwill 56,192 56,192 Intangible assets 46,193 49,242 Other assets 25,384 23,216 Total assets $ 1,496,020 $ 1,495,331 LIABILITIES Current liabilities: Accounts payable $ 259,068 $ 272,740 Accrued liabilities 44,086 48,820 Income taxes payable 8,033 30 Operating lease liabilities – short-term 32,053 37,472 Deferred income and customer advances 15,678 34,430 Total current liabilities 358,918 393,492 Deferred income taxes 151,059 160,409 Operating lease liabilities – long-term 63,961 77,571 Line of credit – long-term 170,000 115,000 Postretirement benefit obligations 3,660 — Other liabilities 9,185 10,679 Total liabilities 756,783 757,151 STOCKHOLDERS' EQUITY Common stock, par value $0.01; 200,000,000 shares authorized; 32,598,946 shares issued and 26,750,471 outstanding at December 31, 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; 0 shares issued and outstanding at December 31, 2023 and 2022 — — Treasury stock at par (5,848,475 shares at December 31, 2023; 4,531,073 shares at December 31, 2022) (58 ) (45 ) Additional paid-in capital 138,046 174,585 Retained earnings 605,067 567,517 Accumulated other comprehensive loss (4,144 ) (4,197 ) Total stockholders' equity 739,237 738,180 Total liabilities and stockholders' equity $ 1,496,020 $ 1,495,331 AdvanSix Inc. Consolidated Statements of Operations (Unaudited) (Dollars in thousands, except share and per share amounts) Three Months Ended December 31, Twelve Months Ended December 31, 2023 2022 2023 2022 Sales $ 382,208 $ 404,062 $ 1,533,599 $ 1,945,640 Costs, expenses and other: Costs of goods sold 363,667 335,033 1,368,511 1,631,161 Selling, general and administrative expenses 24,828 22,628 95,538 87,748 Interest expense, net 2,189 763 7,485 2,781 Other non-operating (income) expense, net (240 ) (16 ) (7,158 ) (1,841 ) Total costs, expenses and other 390,444 358,408 1,464,376 1,719,849 Income (loss) before taxes (8,236 ) 45,654 69,223 225,791 Income tax expense (benefit) (3,154 ) 12,029 14,600 53,905 Net Income (loss) $ (5,082 ) $ 33,625 $ 54,623 $ 171,886 Earnings per common share Basic $ (0.19 ) $ 1.22 $ 2.00 $ 6.15 Diluted $ (0.19 ) $ 1.18 $ 1.95 $ 5.92 Weighted average common shares outstanding Basic 26,911,754 27,572,344 27,302,254 27,969,436 Diluted 26,911,754 28,608,181 28,007,630 29,031,107 AdvanSix Inc. Consolidated Statements of Cash Flows (Unaudited) (Dollars in thousands) Three Months Ended December 31, Twelve Months Ended December 31, 2023 2022 2023 2022 Cash flows from operating activities: Net income (loss) $ (5,082 ) $ 33,625 $ 54,623 $ 171,886 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 18,673 17,483 73,010 69,353 Loss on disposal of assets 342 218 1,281 1,521 Deferred income taxes (10,416 ) 7,532 (9,347 ) 16,228 Stock-based compensation 2,473 2,680 8,313 10,279 Amortization of deferred financing fees 154 154 618 618 Operational asset adjustments — — (4,472 ) — Changes in assets and liabilities, net of business acquisitions: Accounts and other receivables (20,696 ) 10,496 21,489 17,842 Inventories 17,368 (57,070 ) 3,286 (57,043 ) Taxes receivable 64 5,159 8,337 (8,824 ) Accounts payable 27,231 22,094 (20,756 ) 55,863 Income taxes payable 8,003 (9,693 ) 8,003 (9,693 ) Accrued liabilities 2,218 4,544 (5,569 ) (3,122 ) Deferred income and customer advances 13,263 31,869 (18,752 ) 31,681 Other assets and liabilities 6,574 523 (2,514 ) (22,988 ) Net cash provided by operating activities 60,169 69,614 117,550 273,601 Cash flows from investing activities: Expenditures for property, plant and equipment (38,352 ) (28,439 ) (107,377 ) (89,449 ) Acquisition of businesses — — — (97,456 ) Other investing activities (1,116 ) (781 ) (3,520 ) (2,368 ) Net cash used for investing activities (39,468 ) (29,220 ) (110,897 ) (189,273 ) Cash flows from financing activities: Borrowings from line of credit 66,000 80,500 437,000 434,500 Payments of line of credit (66,000 ) (100,500 ) (382,000 ) (454,500 ) Principal payments of finance leases (240 ) (214 ) (938 ) (926 ) Dividend payments (4,303 ) (3,990 ) (16,657 ) (15,073 ) Purchase of treasury stock (8,500 ) (10,157 ) (46,151 ) (33,748 ) Issuance of common stock — 258 876 1,304 Net cash used for financing activities (13,043 ) (34,103 ) (7,870 ) (68,443 ) Net change in cash and cash equivalents 7,658 6,291 (1,217 ) 15,885 Cash and cash equivalents at beginning of year 22,110 24,694 30,985 15,100 Cash and cash equivalents at the end of year $ 29,768 $ 30,985 $ 29,768 $ 30,985 Supplemental non-cash investing activities: Capital expenditures included in accounts payable $ 22,660 $ 14,879 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 December 31, Twelve Months Ended December 31, 2023 2022 2023 2022 Net cash provided by operating activities $ 60,169 $ 69,614 $ 117,550 $ 273,601 Expenditures for property, plant and equipment (38,352 ) (28,439 ) (107,377 ) (89,449 ) Free cash flow (1) $ 21,817 $ 41,175 $ 10,173 $ 184,152 (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 December 31, Twelve Months Ended December 31, 2023 2022 2023 2022 Net Income (loss) $ (5,082 ) $ 33,625 $ 54,623 $ 171,886 Non-cash stock-based compensation 2,473 2,680 8,313 10,279 Non-recurring, unusual or extraordinary expenses (income) (2) — — (4,472 ) — Non-cash amortization from acquisitions 530 532 2,126 1,815 Non-recurring M&A costs — — — 277 Benefit from income taxes relating to reconciling items (504 ) (535 ) (661 ) (1,996 ) Adjusted Net Income (loss) (2,583 ) 36,302 59,929 182,261 Interest expense, net 2,189 763 7,485 2,781 Income tax expense (benefit) - Adjusted (2,650 ) 12,564 15,261 55,901 Depreciation and amortization - Adjusted 18,143 16,951 70,884 67,538 Adjusted EBITDA $ 15,099 $ 66,580 $ 153,559 $ 308,481 Sales $ 382,208 $ 404,062 $ 1,533,599 $ 1,945,640 Adjusted EBITDA Margin (3) 4.0 % 16.5 % 10.0 % 15.9 % (2) Includes a pre-tax gain of approximately $11.4 million related to the Company's exit from the Oben alliance, the unfavorable impact to pre-tax income of approximately $4.5 million associated with a licensee of certain legacy ammonium sulfate fertilizer technology assets closing its facility, and the unfavorable impact to pre-tax income of approximately $2.4 million from the exit of certain low-margin oximes products. (3) Adjusted EBITDA Margin is defined as Adjusted EBITDA divided by Sales Three Months Ended December 31, Twelve Months Ended December 31, 2023 2022 2023 2022 Net Income (loss) $ (5,082 ) $ 33,625 $ 54,623 $ 171,886 Adjusted Net Income (loss) (2,583 ) 36,302 59,929 182,261 Weighted-average number of common shares outstanding - basic 26,911,754 27,572,344 27,302,254 27,969,436 Dilutive effect of equity awards and other stock-based holdings — 1,035,837 705,376 1,061,671 Weighted-average number of common shares outstanding - diluted 26,911,754 28,608,181 28,007,630 29,031,107 EPS - Basic $ (0.19 ) $ 1.22 $ 2.00 $ 6.15 EPS - Diluted $ (0.19 ) $ 1.18 $ 1.95 $ 5.92 Adjusted EPS - Basic $ (0.10 ) $ 1.32 $ 2.20 $ 6.52 Adjusted EPS - Diluted $ (0.10 ) $ 1.27 $ 2.14 $ 6.28 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 (4) 1Q 2Q 3Q 4Q FY Primary Unit Operation 2017 — ~$10 ~$4 ~$20 ~$34 Sulfuric Acid 2018 ~$2 ~$10 ~$30 — ~$42 Ammonia 2019 — ~$5 ~$5 ~$25 ~$35 Sulfuric Acid 2020 ~$2 ~$7 ~$20 ~$2 ~$31 Ammonia 2021 ~$3 ~$8 — ~$18 ~$29 Sulfuric Acid 2022 ~$1 ~$5 ~$44 — ~$50 Ammonia 2023 ~$2 ~$1 ~$27 — ~$30 Sulfuric Acid 2024E ~$6 — $28-$33 ~$4 $38-$43 Ammonia (4) 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/20240215530378/en/Contacts Media Janeen Lawlor (973) 526-1615 janeen.lawlor@advansix.com Investors Adam Kressel (973) 526-1700 adam.kressel@advansix.com
4Q23 Sales of $382 million, down 5% versus prior year 4Q23 Earnings Per Share of ($0.19); Adjusted Earnings Per Share of ($0.10) 4Q23 Cash Flow from Operations of $60 million Returned $63 million of cash to shareholders through repurchases and dividends in 2023
AdvanSix (NYSE: ASIX) today announced its financial results for the fourth quarter and full year ending December 31, 2023. The following results reflect our navigation of a challenging end market environment while maintaining focus on long-term priorities including portfolio simplification in the year and continued investments in support of improved through-cycle profitability. Full Year 2023 Summary Sales down 21% versus prior year driven by 17% unfavorable impact of market-based pricing and 5% lower raw material pass-through pricing, partially offset by 1% contribution from acquisitions and flat volume Net Income of $54.6 million, a decrease of $117.3 million versus the prior year Adjusted EBITDA of $153.6 million, a decrease of $154.9 million versus the prior year Cash Flow from Operations of $117.6 million, a decrease of $156.1 million versus the prior year Capital Expenditures of $107.4 million, an increase of $17.9 million versus the prior year Free Cash Flow of $10.2 million, a decrease of $174.0 million versus the prior year Repurchased 1,317,402 shares for approximately $46.2 million in 2023 Summary full year 2023 financial results for the Company are included below: ($ in Thousands, Except Earnings Per Share) FY 2023 FY 2022 Sales $1,533,599 $1,945,640 Net Income 54,623 171,886 Diluted Earnings Per Share $1.95 $5.92 Adjusted Diluted Earnings Per Share (1) $2.14 $6.28 Adjusted EBITDA (1) 153,559 308,481 Adjusted EBITDA Margin % (1) 10.0% 15.9% Cash Flow from Operations 117,550 273,601 Free Cash Flow (1)(2) 10,173 184,152 (1) See “Non-GAAP Measures” included in this press release for non-GAAP reconciliations (2) Net cash provided by operating activities less capital expenditures “I'm proud of the team and our continued commitment to driving improved through-cycle profitability. Our healthy balance sheet helped to support our performance through challenging market conditions, particularly in Nylon Solutions, while maintaining organic investments and return of cash to our shareholders,” said Erin Kane, president and CEO of AdvanSix. “Core to our long-term strategy is accelerating growth in the most profitable areas of our portfolio, continuous improvement to strengthen the underlying earnings power of the business, and sustaining our cost-advantaged business model." Fourth Quarter 2023 Summary Sales down 5% versus prior year driven by 22% unfavorable impact of market-based pricing, partially offset by a 16% increase in volume and 1% higher raw materials pass-through pricing. Net Loss of ($5.1) million, a decrease of $38.7 million versus the prior year Adjusted EBITDA of $15.1 million, a decrease of $51.5 million versus the prior year Cash Flow from Operations of $60.2 million, a decrease of $9.4 million versus the prior year Capital Expenditures of $38.4 million, an increase of $9.9 million versus the prior year Free Cash Flow of $21.8 million, a decrease of $19.4 million versus the prior year Repurchased 306,527 shares for approximately $8.5 million in 4Q23 Summary fourth quarter 2023 financial results for the Company are included below: ($ in Thousands, Except Earnings Per Share) 4Q 2023 4Q 2022 Sales $382,208 $404,062 Net Income (Loss) (5,082) 33,625 Diluted Earnings Per Share ($0.19) $1.18 Adjusted Diluted Earnings Per Share (1) ($0.10) $1.27 Adjusted EBITDA (1) 15,099 66,580 Adjusted EBITDA Margin % (1) 4.0% 16.5% Cash Flow from Operations 60,169 69,614 Free Cash Flow (1)(2) 21,817 41,175 (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 $382 million in the quarter decreased approximately 5% versus the prior year. Market-based pricing was unfavorable by 22% compared to the prior year primarily reflecting reduced ammonium sulfate pricing amid lower raw material input costs and a more stable global nitrogen supply environment, as well as lower nylon pricing due to unfavorable supply and demand conditions. Sales volume increased approximately 16% primarily driven by higher export shipments in both Ammonium Sulfate and Nylon. Raw material pass-through pricing was favorable by 1% as a result of a net cost increase in benzene and propylene (inputs to cumene which is a key feedstock to our products). Sales by product line and approximate percentage of total sales are included below: ($ in Thousands) FY 2023 FY 2022 Sales % of Total Sales % of Total Nylon $ 356,632 23% $ 485,241 25% Caprolactam 298,375 19% 319,863 16% Ammonium Sulfate 440,915 29% 629,021 33% Chemical Intermediates 437,677 29% 511,515 26% $ 1,533,599 100% $ 1,945,640 100% ($ in Thousands) 4Q 2023 4Q 2022 Sales % of Total Sales % of Total Nylon $ 78,251 20% $ 93,510 23% Caprolactam 82,508 22% 71,871 18% Ammonium Sulfate 108,691 28% 136,734 34% Chemical Intermediates 112,759 30% 101,947 25% $ 382,209 100% $ 404,062 100% Adjusted EBITDA of $15.1 million in the quarter decreased $51.5 million versus the prior year primarily due to unfavorable market-based pricing, net of raw material costs, partially offset by the net impact of higher sales volume and changes in sales mix including higher export volume. Adjusted earnings per share of ($0.10) decreased $1.37 versus the prior year driven primarily by the factors discussed above. Cash flow from operations of $60.2 million in the quarter decreased $9.4 million versus the prior year primarily due to lower net income, partially offset by the favorable impact of changes in working capital. Capital expenditures of $38.4 million in the quarter increased $9.9 million versus the prior year primarily reflecting increased spend on enterprise programs and other maintenance projects. Dividend The Company's Board of Directors declared a quarterly cash dividend of $0.16 per share on the Company's common stock. The dividend is payable on March 18, 2024 to stockholders of record as of the close of business on March 4, 2024. Outlook Expect nylon industry spreads to remain stabilized near current levels amid weak demand; Anticipate higher Nylon Solutions exports in first half of 2024 year-over-year Anticipate strong ammonium sulfate seasonal demand supported by continued favorable underlying agriculture industry fundamentals; Expect first half 2024 year-over-year pricing declines amid lower nitrogen pricing environment Expect balanced to tight global acetone supply and demand conditions Expect Capital Expenditures of $140 to $150 million in 2024, reflecting increased spend to address critical enterprise risk mitigation and growth projects including our SUSTAIN program Expect pre-tax income impact of planned plant turnarounds to be $38 to $43 million in 2024 versus approximately $30 million in 2023 Now expect to incur a total unfavorable impact to pre-tax income in 1Q24 of $23 to $27 million as a result of the process-based operational disruption at our Frankford, PA manufacturing site and a delayed ramp to planned utilization rates "While the previously disclosed operational disruption at our Frankford, Pennsylvania manufacturing site is impacting our first quarter results, our teams have been focused on stabilization of phenol production, which is enabling us to ramp up our Hopewell and Chesterfield manufacturing facilities to our targeted utilization rates. We thank our customers, partners and AdvanSix teammates for their collaboration and agility to mitigate the value chain impact of this event. Our focus remains on performing in the current set of industry dynamics and executing levers in our control, including remaining disciplined on cost and optimizing working capital. Our outlook reflects a continued investment in our long-term potential through both our SUSTAIN program's planned expansion in granular ammonium sulfate production and increased infrastructure spend in 2024 to mitigate enterprise risk,” 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 fourth 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 February 16 until 12 noon ET on February 23 by dialing (877) 344-7529 (domestic) or (412) 317-0088 (international). The access code is 4232990. 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, plant nutrients, and chemical intermediates. 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; 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 conflict in Israel and Gaza, and the possible expansion of such conflicts; the effect of the foregoing 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, data privacy incidents 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; 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. Consolidated Balance Sheets (Unaudited) (Dollars in thousands, except share and per share amounts) December 31, 2023 December 31, 2022 ASSETS Current assets: Cash and cash equivalents $ 29,768 $ 30,985 Accounts and other receivables – net 165,393 175,429 Inventories – net 211,831 215,502 Taxes receivable 1,434 9,771 Other current assets 11,378 9,241 Total current assets 419,804 440,928 Property, plant and equipment – net 852,642 811,065 Operating lease right-of-use assets 95,805 114,688 Goodwill 56,192 56,192 Intangible assets 46,193 49,242 Other assets 25,384 23,216 Total assets $ 1,496,020 $ 1,495,331 LIABILITIES Current liabilities: Accounts payable $ 259,068 $ 272,740 Accrued liabilities 44,086 48,820 Income taxes payable 8,033 30 Operating lease liabilities – short-term 32,053 37,472 Deferred income and customer advances 15,678 34,430 Total current liabilities 358,918 393,492 Deferred income taxes 151,059 160,409 Operating lease liabilities – long-term 63,961 77,571 Line of credit – long-term 170,000 115,000 Postretirement benefit obligations 3,660 — Other liabilities 9,185 10,679 Total liabilities 756,783 757,151 STOCKHOLDERS' EQUITY Common stock, par value $0.01; 200,000,000 shares authorized; 32,598,946 shares issued and 26,750,471 outstanding at December 31, 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; 0 shares issued and outstanding at December 31, 2023 and 2022 — — Treasury stock at par (5,848,475 shares at December 31, 2023; 4,531,073 shares at December 31, 2022) (58 ) (45 ) Additional paid-in capital 138,046 174,585 Retained earnings 605,067 567,517 Accumulated other comprehensive loss (4,144 ) (4,197 ) Total stockholders' equity 739,237 738,180 Total liabilities and stockholders' equity $ 1,496,020 $ 1,495,331 AdvanSix Inc. Consolidated Statements of Operations (Unaudited) (Dollars in thousands, except share and per share amounts) Three Months Ended December 31, Twelve Months Ended December 31, 2023 2022 2023 2022 Sales $ 382,208 $ 404,062 $ 1,533,599 $ 1,945,640 Costs, expenses and other: Costs of goods sold 363,667 335,033 1,368,511 1,631,161 Selling, general and administrative expenses 24,828 22,628 95,538 87,748 Interest expense, net 2,189 763 7,485 2,781 Other non-operating (income) expense, net (240 ) (16 ) (7,158 ) (1,841 ) Total costs, expenses and other 390,444 358,408 1,464,376 1,719,849 Income (loss) before taxes (8,236 ) 45,654 69,223 225,791 Income tax expense (benefit) (3,154 ) 12,029 14,600 53,905 Net Income (loss) $ (5,082 ) $ 33,625 $ 54,623 $ 171,886 Earnings per common share Basic $ (0.19 ) $ 1.22 $ 2.00 $ 6.15 Diluted $ (0.19 ) $ 1.18 $ 1.95 $ 5.92 Weighted average common shares outstanding Basic 26,911,754 27,572,344 27,302,254 27,969,436 Diluted 26,911,754 28,608,181 28,007,630 29,031,107 AdvanSix Inc. Consolidated Statements of Cash Flows (Unaudited) (Dollars in thousands) Three Months Ended December 31, Twelve Months Ended December 31, 2023 2022 2023 2022 Cash flows from operating activities: Net income (loss) $ (5,082 ) $ 33,625 $ 54,623 $ 171,886 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 18,673 17,483 73,010 69,353 Loss on disposal of assets 342 218 1,281 1,521 Deferred income taxes (10,416 ) 7,532 (9,347 ) 16,228 Stock-based compensation 2,473 2,680 8,313 10,279 Amortization of deferred financing fees 154 154 618 618 Operational asset adjustments — — (4,472 ) — Changes in assets and liabilities, net of business acquisitions: Accounts and other receivables (20,696 ) 10,496 21,489 17,842 Inventories 17,368 (57,070 ) 3,286 (57,043 ) Taxes receivable 64 5,159 8,337 (8,824 ) Accounts payable 27,231 22,094 (20,756 ) 55,863 Income taxes payable 8,003 (9,693 ) 8,003 (9,693 ) Accrued liabilities 2,218 4,544 (5,569 ) (3,122 ) Deferred income and customer advances 13,263 31,869 (18,752 ) 31,681 Other assets and liabilities 6,574 523 (2,514 ) (22,988 ) Net cash provided by operating activities 60,169 69,614 117,550 273,601 Cash flows from investing activities: Expenditures for property, plant and equipment (38,352 ) (28,439 ) (107,377 ) (89,449 ) Acquisition of businesses — — — (97,456 ) Other investing activities (1,116 ) (781 ) (3,520 ) (2,368 ) Net cash used for investing activities (39,468 ) (29,220 ) (110,897 ) (189,273 ) Cash flows from financing activities: Borrowings from line of credit 66,000 80,500 437,000 434,500 Payments of line of credit (66,000 ) (100,500 ) (382,000 ) (454,500 ) Principal payments of finance leases (240 ) (214 ) (938 ) (926 ) Dividend payments (4,303 ) (3,990 ) (16,657 ) (15,073 ) Purchase of treasury stock (8,500 ) (10,157 ) (46,151 ) (33,748 ) Issuance of common stock — 258 876 1,304 Net cash used for financing activities (13,043 ) (34,103 ) (7,870 ) (68,443 ) Net change in cash and cash equivalents 7,658 6,291 (1,217 ) 15,885 Cash and cash equivalents at beginning of year 22,110 24,694 30,985 15,100 Cash and cash equivalents at the end of year $ 29,768 $ 30,985 $ 29,768 $ 30,985 Supplemental non-cash investing activities: Capital expenditures included in accounts payable $ 22,660 $ 14,879 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 December 31, Twelve Months Ended December 31, 2023 2022 2023 2022 Net cash provided by operating activities $ 60,169 $ 69,614 $ 117,550 $ 273,601 Expenditures for property, plant and equipment (38,352 ) (28,439 ) (107,377 ) (89,449 ) Free cash flow (1) $ 21,817 $ 41,175 $ 10,173 $ 184,152 (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 December 31, Twelve Months Ended December 31, 2023 2022 2023 2022 Net Income (loss) $ (5,082 ) $ 33,625 $ 54,623 $ 171,886 Non-cash stock-based compensation 2,473 2,680 8,313 10,279 Non-recurring, unusual or extraordinary expenses (income) (2) — — (4,472 ) — Non-cash amortization from acquisitions 530 532 2,126 1,815 Non-recurring M&A costs — — — 277 Benefit from income taxes relating to reconciling items (504 ) (535 ) (661 ) (1,996 ) Adjusted Net Income (loss) (2,583 ) 36,302 59,929 182,261 Interest expense, net 2,189 763 7,485 2,781 Income tax expense (benefit) - Adjusted (2,650 ) 12,564 15,261 55,901 Depreciation and amortization - Adjusted 18,143 16,951 70,884 67,538 Adjusted EBITDA $ 15,099 $ 66,580 $ 153,559 $ 308,481 Sales $ 382,208 $ 404,062 $ 1,533,599 $ 1,945,640 Adjusted EBITDA Margin (3) 4.0 % 16.5 % 10.0 % 15.9 % (2) Includes a pre-tax gain of approximately $11.4 million related to the Company's exit from the Oben alliance, the unfavorable impact to pre-tax income of approximately $4.5 million associated with a licensee of certain legacy ammonium sulfate fertilizer technology assets closing its facility, and the unfavorable impact to pre-tax income of approximately $2.4 million from the exit of certain low-margin oximes products. (3) Adjusted EBITDA Margin is defined as Adjusted EBITDA divided by Sales Three Months Ended December 31, Twelve Months Ended December 31, 2023 2022 2023 2022 Net Income (loss) $ (5,082 ) $ 33,625 $ 54,623 $ 171,886 Adjusted Net Income (loss) (2,583 ) 36,302 59,929 182,261 Weighted-average number of common shares outstanding - basic 26,911,754 27,572,344 27,302,254 27,969,436 Dilutive effect of equity awards and other stock-based holdings — 1,035,837 705,376 1,061,671 Weighted-average number of common shares outstanding - diluted 26,911,754 28,608,181 28,007,630 29,031,107 EPS - Basic $ (0.19 ) $ 1.22 $ 2.00 $ 6.15 EPS - Diluted $ (0.19 ) $ 1.18 $ 1.95 $ 5.92 Adjusted EPS - Basic $ (0.10 ) $ 1.32 $ 2.20 $ 6.52 Adjusted EPS - Diluted $ (0.10 ) $ 1.27 $ 2.14 $ 6.28 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 (4) 1Q 2Q 3Q 4Q FY Primary Unit Operation 2017 — ~$10 ~$4 ~$20 ~$34 Sulfuric Acid 2018 ~$2 ~$10 ~$30 — ~$42 Ammonia 2019 — ~$5 ~$5 ~$25 ~$35 Sulfuric Acid 2020 ~$2 ~$7 ~$20 ~$2 ~$31 Ammonia 2021 ~$3 ~$8 — ~$18 ~$29 Sulfuric Acid 2022 ~$1 ~$5 ~$44 — ~$50 Ammonia 2023 ~$2 ~$1 ~$27 — ~$30 Sulfuric Acid 2024E ~$6 — $28-$33 ~$4 $38-$43 Ammonia (4) 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/20240215530378/en/
Media Janeen Lawlor (973) 526-1615 janeen.lawlor@advansix.com Investors Adam Kressel (973) 526-1700 adam.kressel@advansix.com
