0001673985false00016739852024-08-022024-08-02


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________________________________
Form 8-K
_____________________________________
 
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
 
Date of Report (Date of earliest event reported): August 2, 2024
 
ADVANSIX INC.
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction
of incorporation)

1-37774
(Commission File Number)

81-2525089
(I.R.S. Employer
Identification No.)
300 Kimball Drive, Suite 101
Parsippany, New Jersey 07054
(Address of principal executive offices)
 
Registrant’s telephone number, including area code: (973) 526-1800

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
 
☐Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, par value $0.01 per shareASIXNew York Stock Exchange
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company   ☐               
 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐




ITEM 2.02    Results of Operations and Financial Condition.

On August 2, 2024, AdvanSix Inc. (the "Company") issued a press release announcing its financial results for the quarter ended June 30, 2024. A copy of the press release is furnished herewith as Exhibit 99.1.
 
ITEM 8.01    Other Events.

Dividend

On August 2, 2024, the Company announced that its Board of Directors declared a cash dividend of $0.16 per share on the Company's common stock. The dividend will be paid on August 27, 2024 to stockholders of record as of the close of business on August 13, 2024.

The Company's announcement of the dividend is included in the press release furnished herewith as Exhibit 99.1.

ITEM 9.01     Financial Statements and Exhibits.

(d) Exhibits
Exhibit
Number

Description
99.1

104Cover Page Interactive Data File (embedded within the Inline XBRL document)



SIGNATURE
 

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: August 2, 2024


AdvanSix Inc.




By:/s/ Achilles B. Kintiroglou

Name:Achilles B. Kintiroglou

Title:
Senior Vice President, General
Counsel and Corporate Secretary



Exhibit 99.1
advansixlogowithtagline.jpg                                
News Release

ADVANSIX ANNOUNCES SECOND QUARTER 2024 FINANCIAL RESULTS

Sales of $453 million, up 6% versus prior year
Earnings Per Share of $1.43; Adjusted Earnings Per Share of $1.55
Cash Flow from Operations of $50 million, up 43% versus prior year
Performance across diversified portfolio supports favorable earnings outlook

Parsippany, N.J., August 2, 2024 - AdvanSix (NYSE: ASIX), a diversified chemistry company, today announced its financial results for the second quarter ending June 30, 2024. Overall, the Company returned to targeted utilization rates across its integrated value chain and delivered strong earnings and cash flow results while continuing to invest for long-term sustainable growth.
Second Quarter 2024 Summary
•Sales up approximately 6% versus prior year driven by an approximately 5% increase in volume and approximately 1% favorable net pricing
•Net Income of $38.9 million, an increase of $6.2 million versus the prior year
•Adjusted EBITDA of $78.1 million, an increase of $12.4 million versus the prior year
•Adjusted EBITDA Margin of 17.2%, up 180 bps versus the prior year
•Cash Flow from Operations of $50.2 million, an increase of $15.2 million versus the prior year
•Capital Expenditures of $33.5 million, an increase of $14.2 million versus the prior year
•Free Cash Flow of $16.7 million, an increase of $1.0 million versus the prior year
•Returned $8 million of cash to shareholders through dividends and repurchases in 2Q24

“Our strong second quarter results, featuring top and bottom line growth as well as year-over-year cash flow improvement, reflect our collective organization's execution and the advantages of our business model and diverse product portfolio,” said Erin Kane, president and CEO of AdvanSix. “We realized a 6% improvement in sales reflecting higher domestic nylon sales volume, a robust domestic application season for ammonium sulfate and continued strength in acetone pricing. Plant output returned to targeted utilization rates across our integrated value chain as expected and we delivered our second highest quarter of granular ammonium sulfate production ever. This performance occurred all while continuing to invest in long-term sustainable growth including our SUSTAIN (Sustainable U.S. Sulfate to Accelerate
1

Increased Nutrition) program."

Summary second quarter 2024 financial results for the Company are included below:
($ in Thousands, Except Earnings Per Share)
2Q 20242Q 2023
Sales$453,479$427,940
Net Income38,92732,728
Diluted Earnings Per Share$1.43$1.16
Adjusted Diluted Earnings Per Share (1)
$1.55$1.25
Adjusted EBITDA (1)
78,14165,785
Adjusted EBITDA Margin % (1)
17.2%15.4%
Cash Flow from Operations50,20035,004
Free Cash Flow (1)(2)
16,70515,713
(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 $453 million in the quarter increased approximately 6% versus the prior year. Sales volume increased approximately 5% primarily driven by higher sales of nylon and ammonium sulfate due to favorable North American supply and demand conditions. Net pricing was favorable by 1% including continued strength in acetone.

Sales by product line and approximate percentage of total sales are included below:
($ in Thousands)2Q 20242Q 2023
Sales % of TotalSales% of Total
Nylon$103,217 23%$92,953 22%
Caprolactam81,303 18%74,682 18%
Ammonium Sulfate139,674 31%138,940 32%
Chemical Intermediates129,285 28%121,365 28%
Total$453,479 100%$427,940 100%

Adjusted EBITDA of $78.1 million in the quarter increased $12.4 million, or 19%, versus the prior year primarily driven by higher sales volume and favorable pricing, net of raw material costs.

Adjusted earnings per share of $1.55 increased $0.30, or 24%, versus the prior year driven primarily by the factors discussed above.

Cash flow from operations of $50.2 million in the quarter increased $15.2 million versus the prior year primarily driven by higher net income and the favorable impact of changes in working capital. Capital expenditures of $33.5 million in the quarter increased $14.2 million versus the prior year primarily reflecting planned increased spend on maintenance and enterprise programs.
2



Outlook
•Anticipate higher ammonium sulfate pricing in 3Q24 year-over-year reflecting robust demand entering fall fill; however, typical North American ammonium sulfate seasonality expected to drive 3Q24 sequential domestic pricing decline
•Expect balanced to tight global acetone supply and demand conditions
•Expect North American nylon industry spreads to modestly improve through 2024 reflecting tighter regional supply and stable end market demand
•Continue to expect Capital Expenditures of $140 million to $150 million in 2024, reflecting increased spend to address critical enterprise risk mitigation and growth projects including our SUSTAIN (Sustainable U.S. Sulfate to Accelerate Increased Nutrition) program
•Continue to expect pre-tax income impact of planned plant turnarounds to be $38 to $43 million in 2024

"We expect the current market backdrop to support our favorable second half outlook including a constructive global acetone supply and demand environment and modestly improving North American nylon industry spreads. While we anticipate typical North American ammonium sulfate seasonality, we are starting the third quarter with a strong fall fill program at higher pricing levels compared to the prior year. Over the long-term, we continue to positively position the enterprise through high-return growth and cost savings programs, an improved portfolio mix, and disciplined capital deployment to fuel future earnings, cash flow performance and robust total shareholder returns,” concluded Kane.

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 August 27, 2024 to stockholders of record as of the close of business on August 13, 2024.

Conference Call Information
AdvanSix will discuss its results during its investor conference call today starting at 9:00 a.m. ET. To participate on the conference call, dial (844) 855-9494 (domestic) or (412) 858-4602 (international) approximately 10 minutes before the 9:00 a.m. ET start, and tell the operator that you are dialing in for AdvanSix’s second quarter 2024 earnings call. The live webcast of the investor call as well as related presentation materials can be accessed at http://investors.advansix.com. Investors can hear a replay of the conference call from 12 noon ET on August 2 until 12 noon ET on August 8 by dialing (877) 344-7529 (domestic) or (412) 317-0088 (international). The access code is 4182243.

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
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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 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, 2023, 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.

# # #
Contacts:
MediaInvestors
Janeen LawlorAdam Kressel
(973) 526-1615(973) 526-1700
janeen.lawlor@advansix.comadam.kressel@advansix.com
4

AdvanSix Inc.
Condensed Consolidated Balance Sheets
(Unaudited)
(Dollars in thousands, except share and per share amounts)
June 30, 2024December 31, 2023
ASSETS
Current assets:
Cash and cash equivalents$12,105 $29,768 
Accounts and other receivables – net170,155 165,393 
Inventories – net175,827 211,831 
Taxes receivable179 1,434 
Other current assets20,326 11,378 
Total current assets378,592 419,804 
Property, plant and equipment – net878,491 852,642 
Operating lease right-of-use assets91,876 95,805 
Goodwill56,192 56,192 
Intangible assets44,668 46,193 
Other assets28,131 25,384 
Total assets$1,477,950 $1,496,020 
LIABILITIES
Current liabilities:
Accounts payable$189,326 $259,068 
Accrued liabilities50,223 44,086 
Income taxes payable1,007 8,033 
Operating lease liabilities – short-term31,250 32,053 
Deferred income and customer advances1,148 15,678 
Total current liabilities272,954 358,918 
Deferred income taxes151,803 151,059 
Operating lease liabilities – long-term60,783 63,961 
Line of credit – long-term230,000 170,000 
Postretirement benefit obligations5,919 3,660 
Other liabilities9,894 9,185 
Total liabilities731,353 756,783 
STOCKHOLDERS' EQUITY
Common stock, par value $0.01; 200,000,000 shares authorized; 32,959,588 shares issued and 26,709,407 outstanding at June 30, 2024; 32,598,946 shares issued and 26,750,471 outstanding at December 31, 2023
330 326 
Preferred stock, par value $0.01; 50,000,000 shares authorized; 0 shares issued and outstanding at June 30, 2024 and December 31, 2023
— — 
Treasury stock at par (6,250,181 shares at June 30, 2024; 5,848,475 shares at December 31, 2023)
(63)(58)
Additional paid-in capital132,786 138,046 
Retained earnings617,723 605,067 
Accumulated other comprehensive loss(4,179)(4,144)
Total stockholders' equity746,597 739,237 
Total liabilities and stockholders' equity$1,477,950 $1,496,020 
5

AdvanSix Inc.
Condensed Consolidated Statements of Operations
(Unaudited)
(Dollars in thousands, except share and per share amounts)

Three Months Ended
June 30,		Six Months Ended
June 30,
2024202320242023
Sales$453,479 $427,940 $790,308 $828,484 
Costs, expenses and other:
Costs of goods sold372,111 360,017 705,975 690,059 
Selling, general and administrative expenses24,431 24,011 48,024 49,126 
Interest expense, net3,514 1,954 6,213 3,221 
Other non-operating (income) expense, net1,351 (1,325)1,441 (1,433)
Total costs, expenses and other401,407 384,657 761,653 740,973 
Income before taxes52,072 43,283 28,655 87,511 
Income tax expense13,145 10,555 7,124 19,829 
Net income$38,927 $32,728 $21,531 $67,682 
Earnings per common share
Basic$1.45 $1.19 $0.80 $2.46 
Diluted$1.43 $1.16 $0.79 $2.39 
Weighted average common shares outstanding
Basic26,839,429 27,494,555 26,859,044 27,547,874 
Diluted27,150,347 28,113,402 27,251,326 28,348,266 



6

AdvanSix Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(Dollars in thousands)
Three Months Ended
June 30,		Six Months Ended
June 30,
2024202320242023
Cash flows from operating activities:
Net income$38,927 $32,728 $21,531 $67,682 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 19,162 18,113 38,264 35,958 
Loss on disposal of assets 172 400 261 568 
Deferred income taxes (357)4,064 751 3,894 
Stock-based compensation2,193 2,436 4,404 4,449 
Amortization of deferred financing fees154 154 309 309 
Operational asset adjustments1,200 — 1,200 — 
Changes in assets and liabilities, net of business acquisitions:
Accounts and other receivables (186)8,116 (6,004)22,123 
Inventories 15,094 (1,351)36,004 (10,484)
Taxes receivable(171)(419)1,255 8,329 
Accounts payable (8,686)8,611 (61,681)(45,878)
Income taxes payable72 (2,439)(7,026)(1,338)
Accrued liabilities 3,999 2,664 6,149 (5,744)
Deferred income and customer advances (10,138)(23,339)(14,530)(32,097)
Other assets and liabilities (11,235)(14,734)(6,889)(11,192)
Net cash provided by operating activities 50,200 35,004 13,998 36,579 
Cash flows from investing activities:
Expenditures for property, plant and equipment (33,495)(19,291)(68,883)(43,894)
Other investing activities(2,317)(1,031)(3,736)(2,034)
Net cash used for investing activities (35,812)(20,322)(72,619)(45,928)
Cash flows from financing activities:
Borrowings from line of credit73,000 152,500 257,500 230,500 
Payments of line of credit(88,000)(139,500)(197,500)(205,500)
Principal payments of finance leases(263)(225)(502)(456)
Dividend payments(4,292)(3,984)(8,582)(8,004)
Purchase of treasury stock(3,362)(14,886)(10,385)(28,385)
Issuance of common stock1 123 427 745 
Net cash provided by (used for) financing activities (22,916)(5,972)40,958 (11,100)
Net change in cash and cash equivalents (8,528)8,710 (17,663)(20,449)
Cash and cash equivalents at beginning of period20,633 1,826 29,768 30,985 
Cash and cash equivalents at the end of period$12,105 $10,536 $12,105 $10,536 
Supplemental non-cash investing activities:
Capital expenditures included in accounts payable $14,932 $9,832 
7

AdvanSix Inc.
Non-GAAP Measures
(Dollars in thousands, except share and per share amounts)
 
Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow
Three Months Ended
June 30,		Six Months Ended
June 30,
2024202320242023
Net cash provided by operating activities $50,200 $35,004 $13,998 $36,579 
Expenditures for property, plant and equipment(33,495)(19,291)(68,883)(43,894)
Free cash flow (1)
$16,705 $15,713 $(54,885)$(7,315)
(1) Free cash flow is a non-GAAP measure defined as Net cash provided by operating activities less Expenditures for property, plant and equipment

The Company believes that this metric is useful to investors and management as a measure to evaluate our ability to generate cash flow from business operations and the impact that this cash flow has on our liquidity.



Reconciliation of Net Income to Adjusted EBITDA and Earnings Per Share to Adjusted Earnings Per Share

Three Months Ended
June 30,		Six Months Ended
June 30,
2024202320242023
Net income$38,927 $32,728 $21,531 $67,682 
Non-cash stock-based compensation2,193 2,436 4,404 4,449 
Non-recurring, unusual or extraordinary expenses (income) (2)
1,200 — 1,200 — 
Non-cash amortization from acquisitions532 532 1,064 1,064 
Non-recurring M&A costs— — — — 
Benefit from income taxes relating to reconciling items(762)(498)(1,227)(933)
Adjusted Net Income42,090 35,198 26,972 72,262 
Interest expense, net3,514 1,954 6,213 3,221 
Income tax expense - Adjusted13,907 11,053 8,351 20,763 
Depreciation and amortization - Adjusted18,630 17,580 37,200 34,893 
Adjusted EBITDA$78,141 $65,785 $78,736 $131,139 
Sales$453,479 $427,940 $790,308 $828,484 
Adjusted EBITDA Margin (3)
17.2%15.4%10.0%15.8%
(2) Includes a pre-tax loss of approximately $1.2 million related to the reduction of the Company's anticipated receivable related to the gain on the termination fee recorded upon the exit from the Oben alliance during the third quarter of 2023
(3) Adjusted EBITDA Margin is defined as Adjusted EBITDA divided by Sales




8


Three Months Ended
June 30,		Six Months Ended
June 30,
2024202320242023
Net income$38,927 $32,728 $21,531 $67,682 
Adjusted Net income (non-GAAP)42,090 35,198 26,972 72,262 
Weighted-average number of common shares outstanding - basic26,839,429 27,494,555 26,859,044 27,547,874 
Dilutive effect of equity awards and other stock-based holdings310,918 618,847 392,282 800,392 
Weighted-average number of common shares outstanding - diluted27,150,347 28,113,402 27,251,326 28,348,266 
EPS - Basic$1.45 $1.19 $0.80 $2.46 
EPS - Diluted$1.43 $1.16 $0.79 $2.39 
Adjusted EPS - Basic (non-GAAP)$1.57 $1.28 $1.00 $2.62 
Adjusted EPS - Diluted (non-GAAP)$1.55 $1.25 $0.99 $2.55 

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.

9

AdvanSix Inc.
Appendix
(Pre-tax income impact, Dollars in millions)
 
Planned Plant Turnaround Schedule (4)
1Q2Q3Q4QFY
Primary Unit Operation
2017—~$10~$4~$20~$34Sulfuric Acid
2018~$2~$10~$30—~$42Ammonia
2019—~$5~$5~$25~$35Sulfuric Acid
2020~$2~$7~$20~$2~$31Ammonia
2021~$3~$8—~$18~$29Sulfuric Acid
2022~$1~$5~$44—~$50Ammonia
2023~$2~$1~$27—~$30Sulfuric Acid
2024E~$5~$3~$3$27-$32$38-$43Ammonia

(4) Primarily reflects the impact of fixed cost absorption, maintenance expense, and the purchase of feedstocks which are normally manufactured by the Company.
10
v3.24.2.u1
Cover Page
Aug. 02, 2024
Cover [Abstract]  
Document Type 8-K
Document Period End Date Aug. 02, 2024
Entity Registrant Name ADVANSIX INC.
Entity Incorporation, State or Country Code DE
Entity File Number 1-37774
Entity Tax Identification Number 81-2525089
Entity Address, Address Line One 300 Kimball Drive
Entity Address, Address Line Two Suite 101
Entity Address, City or Town Parsippany
Entity Address, State or Province NJ
Entity Address, Postal Zip Code 07054
City Area Code 973
Local Phone Number 526-1800
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Entity Emerging Growth Company false
Title of 12(b) Security Common Stock, par value $0.01 per share
Trading Symbol ASIX
Security Exchange Name NYSE
Amendment Flag false
Entity Central Index Key 0001673985
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