Core Viewpoint - AdvanSix (ASIX) is anticipated to report a year-over-year decline in earnings due to lower revenues, with the earnings report expected on February 16, 2024, potentially impacting stock price based on actual results compared to estimates [1] Financial Performance Expectations - The company is projected to post a quarterly loss of $0.12 per share, reflecting a year-over-year change of -109.5% [2] - Revenues are expected to be $335.8 million, down 16.9% from the same quarter last year [2] Estimate Revisions - The consensus EPS estimate has been revised 163.64% lower in the last 30 days, indicating a reassessment by analysts [2] - The Most Accurate Estimate for AdvanSix is lower than the Zacks Consensus Estimate, resulting in an Earnings ESP of -141.67% [5] Earnings Surprise Prediction - The Zacks Earnings ESP model suggests that a positive reading indicates a likely earnings beat, but AdvanSix's negative Earnings ESP makes it difficult to predict a beat [3][4][6] - The stock currently holds a Zacks Rank of 5, which further complicates the prediction of an earnings beat [5][6] Historical Performance - In the last reported quarter, AdvanSix was expected to earn $0.01 per share but instead reported a loss of $0.36, resulting in a surprise of -3,700% [7] - Over the past four quarters, the company has beaten consensus EPS estimates twice [7] Conclusion - AdvanSix does not appear to be a compelling candidate for an earnings beat, and investors should consider other factors when evaluating the stock ahead of the earnings release [8]

Core Insights - AdvanSix has experienced a process-based operational disruption at its Frankford, Pennsylvania manufacturing site, leading to reduced production of phenol and acetone at multiple facilities [1] - The company is focused on safely returning operations to target rates and is collaborating with customers to mitigate the impact of reduced output [1] - An estimated unfavorable impact of $18 to $23 million on pre-tax income is expected in the first quarter of 2024 due to fixed cost absorption, lost sales, and additional costs for replacement products [1] Financial Performance - The unplanned interruption did not materially affect the fourth quarter 2023 results [2] - A conference call is scheduled for February 16th at 9:00 a.m. ET to discuss the fourth quarter and full year 2023 financial results and outlook [2] Company Overview - AdvanSix is a diversified chemistry company producing essential materials for various end markets, including building and construction, fertilizers, agrochemicals, and more [3] - The company operates five U.S.-based manufacturing facilities, which are integral to global supply chains [3] - AdvanSix emphasizes core values of Safety, Integrity, Accountability, and Respect in delivering customer experiences and differentiated products [3]

Company Overview - AdvanSix is a diversified chemistry company that produces essential materials for various end markets and applications, impacting daily life [4] - The company operates five U.S.-based manufacturing facilities, playing a critical role in global supply chains [4] - AdvanSix focuses on industries such as building and construction, fertilizers, agrochemicals, plastics, solvents, packaging, paints, coatings, adhesives, and electronics [4] Financial Results Announcement - AdvanSix will issue its fourth quarter and full year 2023 financial results before the opening of the New York Stock Exchange on February 16 [1] - A conference call with investors is scheduled for 9:00 a.m. ET on the same day [1] Conference Call Participation - To participate in the conference call, dial (844) 855-9494 for domestic or (412) 858-4602 for international calls approximately 10 minutes before the start [2] - A replay of the conference call will be available from 12 noon ET on February 16 until 12 noon ET on February 23 [2] Webcast and Presentation Materials - A real-time audio webcast of the presentation can be accessed at the AdvanSix investor website [3] - Related materials will be posted prior to the presentation, and a replay of the webcast will be available afterward [3]

Financial Data and Key Metrics Changes - Sales for Q3 2023 were $323 million, a decrease of approximately 33% compared to the previous year, with pricing unfavorable by 32% overall [10][12] - Adjusted EBITDA was approximately $7 million, with a loss of adjusted earnings per share of $0.36 [11][12] - Free cash flow was negative $4 million, with cash flow from operations decreasing by roughly $38 million year-over-year [12] Business Line Data and Key Metrics Changes - The Nylon Solutions segment continued to experience declines, with global composite caprolactam-over-benzene spreads down nearly 20% sequentially [16][19] - The Plant Nutrients business showed solid results despite seasonal slowdowns, with stable ammonium sulfate pricing compared to urea [17] - In Chemical Intermediates, acetone prices over refinery-grade propylene costs improved year-over-year, although demand remained soft [18] Market Data and Key Metrics Changes - Fertilizer demand remained stable, with order positions in line with historical levels, supporting solid ammonium sulfate demand [17] - The nylon industry faced increased competitive intensity, particularly from China's exports, which pressured pricing dynamics [21][64] - North American producers maintained a better position compared to global operating rates, with estimated rates around 84% [45] Company Strategy and Development Direction - The company is focused on simplifying its portfolio and executing a multi-year expansion in granular ammonium sulfate production through the SUSTAIN program [8][28] - Strategic decisions included exiting low-margin oximes products and accelerating the exit from the alliance with Oben to focus on resin production [7][27] - The company aims to drive productivity and improve unit profitability amid soft end-market demand [22] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenging macro environment, particularly for the Nylon Solutions business, but expressed confidence in the fundamentals for plant nutrients and North American acetone [29] - The company expects nylon industry margins to remain at prior trough levels through year-end, while anticipating favorable fundamentals for other segments [29] - Management emphasized a commitment to operational excellence and disciplined capital deployment to navigate current dynamics [30] Other Important Information - The company recorded a net favorable $4.5 million pre-tax income impact from three one-time transactions, which were excluded from adjusted EBITDA results [11] - Capital expenditures for the full year 2023 are expected to be approximately $115 million, reflecting increased spending on critical infrastructure and growth projects [30] Q&A Session Summary Question: Details on the exit from the partnership with Oben - Management clarified that the exit involves transitioning sales and distribution aspects to Oben while maintaining resin supply, allowing focus on core capabilities [34][36] Question: Impact of the nylon downturn on product mix - Management indicated that efforts are being made to commercialize recycled content products to maintain a favorable product mix during the downturn [38][40] Question: Resilience of the Chemical Intermediates portfolio - Management noted that while pricing and margins are resilient, demand has declined due to destocking, particularly in the Ag chemical space [51] Question: Order book for ammonium sulfate - Management confirmed a robust order book consistent with historical levels, expecting continued strength as they approach the spring application season [49] Question: M&A opportunities in the current environment - Management expressed openness to evaluating accretive M&A opportunities that align with their disciplined capital allocation approach [67][68]

Financial Performance - Sales for the three months ended September 30, 2023, decreased by $155.9 million (approximately 32.6%) compared to the prior year period, totaling $322.9 million[102]. - Sales for the nine months ended September 30, 2023, decreased by $390.2 million (approximately 25.3%) compared to the prior year period, totaling $1,151.4 million[104]. - Gross margin percentage for the three months ended September 30, 2023, was 2.5%, down from 7.3% in the prior year period[106]. - Net income for the three months ended September 30, 2023, was a loss of $8.0 million compared to a profit of $10.0 million in the prior year period[115]. - Adjusted EBITDA for the third quarter of 2023 was $7.321 million, a significant decrease from $33.313 million in the third quarter of 2022, resulting in an Adjusted EBITDA margin of 2.3% compared to 7.0% in the prior year[119]. - Total sales for the third quarter of 2023 were $322.907 million, down from $478.769 million in the same quarter of 2022, reflecting a year-over-year decline of approximately 32.5%[119]. Operational Changes - The company ceased production of certain low-margin oximes products, incurring an unfavorable impact of approximately $2.4 million to pre-tax income in Q3 2023[97]. - The company has implemented contingency measures to support operations during labor strikes, with recent agreements ratified for its Hopewell facilities[99][100]. - The company’s integrated supply chain includes five U.S.-based manufacturing facilities, enhancing operational efficiency and product offerings[86]. Capital Management - The company has a share repurchase program authorized for up to an additional $75 million of common stock, with no expiration date[98]. - The company has authorized share repurchase programs totaling $225 million, with $76.6 million remaining available for repurchases as of September 30, 2023[126]. - The Company declared dividends of $0.160 per share on November 3, 2023, payable on November 28, 2023[101]. - The Company declared a dividend of $0.160 per share on November 3, 2023, with an approximate total payout of $4.3 million[130]. - The company expects future cash needs to focus on operating activities, working capital, capital expenditures, and dividends, reflecting a disciplined capital deployment strategy[122]. Cash Flow and Financing - Cash provided by operating activities decreased by $146.6 million for the nine months ended September 30, 2023, totaling $57.4 million compared to $203.9 million in the prior year[138]. - Cash used for investing activities decreased by $88.6 million, primarily due to the absence of a $97.5 million acquisition of U.S. Amines in the current period[139]. - Cash used for financing activities decreased by $39.5 million, with share repurchases totaling $37.7 million and dividends of approximately $12.4 million during the nine months ended September 30, 2023[140]. - As of September 30, 2023, the Company had a borrowed balance of $170 million under the Revolving Credit Facility, with approximately $329 million available credit[137]. - The Company entered into a new Credit Agreement on October 27, 2021, providing a senior secured revolving credit facility of $500 million with a maturity date of October 27, 2026[132]. Market Position and Product Offering - The company is the world's largest single-site producer of ammonium sulfate fertilizer as of September 30, 2023, leveraging its Hopewell facility's size and technology[89]. - The company’s ammonium sulfate product is positioned to deliver the most readily available sulfur and nitrogen to crops compared to other fertilizers[92]. - The North American ammonium sulfate demand and pricing are typically strongest in the first half of the year, reflecting seasonal agricultural cycles[93]. - Global prices for Nylon 6 resin and caprolactam are influenced by supply and demand trends, with prices typically tracking a spread over the cost of raw materials[90]. Tax and Regulatory Considerations - The effective tax rate for the three months ended September 30, 2023, was 20.7%, slightly down from 21.4% in the prior year period[112]. - The Company continues to evaluate the provisions of the Inflation Reduction Act of 2022 related to energy tax credits[114]. Interest and Debt Management - A 25-basis point fluctuation in interest rates would result in an increase or decrease to the Company's interest expense of approximately $0.4 million based on current borrowing levels[146]. - The transition from LIBOR to Adjusted Term SOFR as the benchmark rate was effective July 1, 2023, with applicable margins of 0.25% for base rate loans and 1.25% for Adjusted Term SOFR loans[134]. - The Company is required to maintain a Consolidated Interest Coverage Ratio of not less than 3.00 to 1.00 and a Consolidated Leverage Ratio of 4.00 to 1.00 or less until September 30, 2023[136]. - The Company was in compliance with all covenants under the Credit Agreement as of September 30, 2023[136].

Financial Data and Key Metrics Changes - Sales for Q2 2023 were $428 million, a decrease of approximately 27% compared to the prior year [9] - Adjusted EBITDA was $66 million, with adjusted earnings per share at $1.25 [11] - Free cash flow was approximately $16 million, with cash flow from operations decreasing by roughly $61 million year-over-year [11] Business Line Data and Key Metrics Changes - In the Nylon Solutions segment, global pricing pressure continued due to unfavorable supply and demand conditions, with significant challenges from low-priced imports [14] - The Chemical Intermediates segment saw improved acetone prices over refinery-grade propylene costs, although demand remained soft [16] - The Plant Nutrients segment experienced a decline in nitrogen fertilizer pricing, but in-season customer demand picked up, particularly for ammonium sulfate [17][18] Market Data and Key Metrics Changes - The Asia caprolactam over benzene spreads averaged roughly $800 per ton, remaining flat sequentially but down significantly year-over-year [14] - Building construction indicators were mixed, with no recovery in volume or price in the fiber and filament space [15] - The export market for nitrogen saw cautious buying behavior, particularly from Brazil, as nitrogen prices fell [18] Company Strategy and Development Direction - The company is focused on sustainability initiatives, including the launch of 100% post-consumer recycled nylon [22] - A disciplined capital deployment framework is being executed to drive operational performance and shareholder value [8] - The company anticipates seasonality impacts in its Plant Nutrients business and demand weakness in certain market segments [25] Management's Comments on Operating Environment and Future Outlook - Management noted the dynamic macro environment and the challenges posed by lower nitrogen and raw material pricing [5] - There is confidence in the company's ability to navigate through various macroeconomic cycles, supported by a diversified business model [7] - The outlook for 2023 remains consistent, with expectations of continued resilience despite headwinds in certain markets [25] Other Important Information - The company plans to publish its annual sustainability report, highlighting progress in ESG performance [6] - A planned plant turnaround is expected to impact pre-tax income by $25 million to $30 million in Q3 2023 [26] Q&A Session Summary Question: How would a trade case against Nylon 6 from China compare to acetone or ammonium sulfate? - Management is assessing options and monitoring industry dynamics, emphasizing the importance of fair trade practices [30] Question: What types of agricultural products does the U.S. supply and how did it perform this quarter? - The company supplies herbicides and has seen destocking due to high inventory levels, but underlying fundamentals may support future opportunities [32] Question: What is the feedstock for the post-consumer recycled nylon? - The feedstock includes monomers reclaimed from customer waste streams, expanding the opportunity set for the company [34] Question: What is the comfort level with inventories as of June 30? - The company ended Q2 with $226 million in inventory, which is flat sequentially but up year-over-year, with expectations for a reduction in the second half [38] Question: What are the CapEx plans for this year? - The company expects a significant ramp-up in CapEx spending in the second half of the year, particularly related to planned turnarounds and infrastructure projects [42] Question: Are there other nylon chain products being exported from China? - Management noted that China is exporting significant volumes of nylon and ammonium sulfate, impacting global markets [45] Question: Is the U.S. in an industrial recession? - Management acknowledged the contraction in manufacturing PMIs and destocking trends, indicating challenges in the current macro environment [47]

August 4, 2023 2Q 2023 Earnings Forward Looking Statements This presentation 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 ...

Sales Performance - Sales for the three months ended June 2023 were $427,940, a decrease of 26.7% compared to $583,736 for the same period in 2022[99]. - Sales for the six months ended June 2023 were $828,484, down 22.0% from $1,062,809 for the same period in 2022[99]. - Sales decreased by $155.8 million (approximately 27%) in the three months ended June 30, 2023, compared to the prior year period, primarily due to unfavorable market-based pricing and lower sales volume[100]. - For the six months ended June 30, 2023, sales decreased by $234.3 million (approximately 22%), driven by unfavorable market-based pricing and decreased sales volume, partially offset by the acquisition of U.S. Amines (approximately 1%)[101]. - The acquisition of U.S. Amines contributed approximately 1% to sales in the six months ended June 30, 2023, partially offsetting the overall sales decline[101]. Financial Results - Net income for the three months ended June 30, 2023, was $32.7 million, compared to $65.2 million in the prior year period[111]. - Net income for the three months ended June 30, 2023, was $32.7 million, a decrease of 50% compared to $65.2 million for the same period in 2022[116]. - Adjusted net income (non-GAAP) for the same period was $35.2 million, down from $67.3 million year-over-year[116]. - Basic EPS for Q2 2023 was $1.19, a decline of 48.6% from $2.31 in Q2 2022[116]. - Adjusted EBITDA for the three months ended June 30, 2023, was $65.8 million, down from $105.4 million in the prior year period, with an Adjusted EBITDA Margin of 15.4%[114]. Costs and Expenses - Costs of goods sold decreased by $116.8 million (approximately 24%) in the three months ended June 30, 2023, due to decreased prices of raw materials and lower sales volume[102]. - Gross margin percentage decreased to 15.9% in the three months ended June 30, 2023, down from 18.3% in the prior year period, primarily due to market-based pricing impacts[104]. - Selling, general and administrative expenses increased by $3.2 million in the three months ended June 30, 2023, primarily due to upgrades to enterprise resource planning systems[105]. Cash Flow and Capital Expenditures - Cash provided by operating activities decreased by $108.5 million to $36.6 million for the six months ended June 30, 2023, compared to $145.1 million in the prior year period[134]. - Cash used for investing activities decreased by $91.5 million to $(45.9) million for the six months ended June 30, 2023, primarily due to a prior year acquisition of U.S. Amines for approximately $97.5 million[135]. - Cash used for financing activities increased by $5.7 million to $(11.1) million for the six months ended June 30, 2023, driven by share repurchases of $28.4 million and dividends of approximately $8.0 million[136]. - Capital expenditures for the six months ended June 30, 2023, amounted to $43.9 million, with total expected capital expenditures for 2023 projected to be approximately $110 million to $120 million[138]. - Capital expenditures are projected to be between $110 million and $120 million in 2023, up from $89 million in 2022[119]. Shareholder Returns - The company has authorized a share repurchase program of up to an additional $75 million of common stock, with no expiration date[95]. - The company declared dividends of $0.160 per share on August 4, 2023, $0.145 per share on May 5, 2023, and $0.145 per share on February 17, 2023[98]. - The company declared a dividend of $0.160 per share on August 4, 2023, totaling approximately $4.4 million[126]. - The company has repurchased a total of 5,274,989 shares for $164.4 million at an average price of $31.17 per share as of June 30, 2023[122]. Operational Highlights - The company is the world's largest single-site producer of ammonium sulfate fertilizer as of June 30, 2023, due to its Hopewell manufacturing facility's size and technology[88]. - The company’s Hopewell, VA facility is one of the world's largest single-site producers of caprolactam as of June 30, 2023[86]. - The company produces ammonium sulfate fertilizer continuously, but quarterly sales experience seasonality based on the growing seasons in North and South America[93]. - The company has implemented contingency measures to support operations during labor strikes, ensuring minimal impact on results[96]. - The Hopewell South bargaining unit ratified a new five-year collective bargaining agreement on May 8, 2023, following a labor strike affecting approximately 340 workers[96]. Tax and Regulatory Considerations - The effective tax rate for the three months ended June 30, 2023, was 23.5%, higher than the prior year period due to state tax legislation changes[108]. - The company continues to evaluate the provisions of the Inflation Reduction Act of 2022 related to energy credits in relation to sustainability initiatives[110]. Debt and Liquidity - The company had approximately $10.5 million in cash on hand and $359 million available under its revolving credit facility as of June 30, 2023[119]. - The company had a borrowed balance of $140 million under the Revolving Credit Facility as of June 30, 2023, with available credit of approximately $359 million[133]. - The company is in compliance with all covenants of its credit agreement as of June 30, 2023[132]. - The company expects cash contributions of up to $5 million to its defined benefit pension plan in 2023[121]. - The company has a scheduled maturity date for its revolving credit facility on October 27, 2026[129]. Interest Rate Sensitivity - A 25-basis point fluctuation in interest rates would have resulted in an increase or decrease to the company's interest expense of approximately $0.4 million based on current borrowing levels[141]. Working Capital Management - The company experienced a $69.8 million unfavorable cash impact from working capital changes year-over-year, primarily from accounts receivable and inventories[134]. - The company reported a $60.5 million decrease in net income contributing to the decline in cash provided by operating activities[134]. - Cash payments for capital expenditures increased by approximately $5.1 million during the current year period due to increased spending on critical infrastructure and growth projects[135]. - The company continues to monitor its critical accounting policies and has not made material changes to its methodologies or assumptions[139].

AdvanSix Inc. (NYSE:ASIX) Q1 2023 Earnings Conference Call May 5, 2023 9:00 AM ET Company Participants Erin Kane - President, Chief Executive Officer Michael Preston - Senior Vice President, Chief Financial Officer Adam Kressel - Vice President, Investor Relations, Treasurer Conference Call Participants Vincent Anderson - Stifel David Silver - CL King Charles Neivert - Piper Sandler Operator Good day and welcome to the AdvanSix first quarter 2023 earnings conference call. All participants will be in a list ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2023 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _____ to _____ Commission File Number: 1-37774 AdvanSix Inc. (Exact name of registrant as specified in its charter) | --- | --- | |--------------------------- ...