Sales of $398 million, up 23% versus prior
year
Earnings Per Share of $0.82; Adjusted Earnings
Per Share of $0.88
Cash Flow from Operations of $57 million, up
$36 million versus prior year
Awarded $12 million grant from USDA to support
expansion of granular ammonium sulfate
Appointed Sidd Manjeshwar as SVP and CFO,
effective October 1
AdvanSix (NYSE: ASIX), a diversified chemistry company,
today announced its financial results for the third quarter ending
September 30, 2024. Overall, the Company delivered strong sales,
earnings and cash flow performance while continuing to invest for
long-term sustainable growth.
Third Quarter 2024
Summary
- Sales up approximately 23% versus prior year driven by an
approximately 11% increase in volume, 8% higher raw material
pass-through pricing, and 5% favorable impact of market-based
pricing
- Net Income of $22.3 million, an increase of $30.2 million
versus the prior year
- Adjusted EBITDA of $53.2 million, an increase of $45.8 million
versus the prior year
- Adjusted EBITDA Margin of 13.4%, up 1,110 bps versus the prior
year
- Cash Flow from Operations of $57.3 million, an increase of
$36.4 million versus the prior year
- Capital Expenditures of $30.5 million, an increase of $5.4
million versus the prior year
- Free Cash Flow of $26.8 million, an increase of $31.1 million
versus the prior year
“In the third quarter, AdvanSix capitalized on the strength of
our competitive position to deliver robust results with the
continued realization of commercial performance across our diverse
product portfolio and strong operational execution,” said Erin
Kane, president and CEO of AdvanSix. “The AdvanSix team drove top
and bottom-line growth as well as continued cash flow improvement
amid a strong ammonium sulfate fall fill program supporting higher
pricing year-over-year, a constructive global acetone supply and
demand environment, and modestly improving North American nylon
industry conditions. We are accelerating focused growth in the most
profitable areas of our business and were pleased to be awarded an
approximately $12 million grant from the U.S. Department of
Agriculture to increase our production capacity of premium grade
products, reinforcing a strong return profile for our SUSTAIN
(Sustainable U.S. Sulfate to Accelerate Increased Nutrition)
program.”
Summary third quarter 2024 financial results for the Company are
included below:
($ in Thousands, Except Earnings Per
Share)
3Q 2024
3Q 2023
Sales
$398,187
$322,907
Net Income (Loss)
22,266
(7,977)
Diluted Earnings Per Share
$0.82
($0.29)
Adjusted Diluted Earnings Per Share
(1)
$0.88
($0.36)
Adjusted EBITDA (1)
53,161
7,321
Adjusted EBITDA Margin % (1)
13.4%
2.3%
Cash Flow from Operations
57,250
20,802
Free Cash Flow (1)(2)
26,760
(4,329)
(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 $398 million in the quarter increased approximately 23%
versus the prior year. Sales volume increased approximately 11%
primarily driven by higher sales of ammonium sulfate supported by
sulfur nutrition demand. Raw material pass-through pricing was
favorable by 8% as a result of a net cost increase in benzene and
propylene (inputs to cumene which is a key feedstock to our
products). Market-based pricing was favorable by 5% including
continued strength in acetone, as well as ammonium sulfate as
growers seeking to maximize crop yields continue to recognize the
benefits of sulfur nutrition.
Sales by product line and approximate percentage of total sales
are included below:
($ in Thousands)
3Q 2024
3Q 2023 (1)
Sales
% of Total
Sales
% of Total
Nylon
$
93,693
24%
$
86,056
27%
Caprolactam
76,338
19%
68,795
21%
Ammonium Sulfate
107,668
27%
79,067
24%
Chemical Intermediates
120,488
30%
88,989
28%
Total
$
398,187
100%
$
322,907
100%
(1) Previously reported amounts have been
updated for a reclassification of certain products representing
approximately $5.5 million of sales in 3Q 2023 between Ammonium
Sulfate (decreased) and Chemical Intermediates (increased). Total
sales were not impacted.
Adjusted EBITDA of $53.2 million in the quarter increased $45.8
million versus the prior year primarily driven by favorable
pricing, net of raw material costs, higher sales volume, and the
timing of planned plant turnarounds.
Adjusted earnings per share of $0.88 increased $1.24 versus the
prior year driven primarily by the factors discussed above.
Cash flow from operations of $57.3 million in the quarter
increased $36.4 million versus the prior year primarily driven by
higher net income. Capital expenditures of $30.5 million in the
quarter increased $5.4 million versus the prior year primarily
reflecting planned increased spend on maintenance and enterprise
programs.
Outlook
- Ammonium sulfate order book sold through 4Q24 amid continued
strong sulfur nutrition demand
- Expect balanced to tight global acetone supply and demand
conditions
- Expect North American nylon industry spreads to modestly
improve amid stable end market demand
- Expect Capital Expenditures to now be $135 to $140 million in
2024, reflecting refined execution timing to address critical
enterprise risk mitigation and growth projects including our
SUSTAIN (Sustainable U.S. Sulfate to Accelerate Increased
Nutrition) program
- As a result of additional required maintenance and a delayed
ramp to full operating rates at our Hopewell site following our
planned plant turnaround, we expect an incremental approximately
$17 million unfavorable impact to pre-tax income in 4Q24, inclusive
of $10 million related to fixed cost absorption and higher
maintenance expense, and $7 million of lost sales; no impact on
3Q24 results
Manufacturing plant turnarounds are a critical enabler for
driving operational excellence, safety and compliance across the
AdvanSix enterprise, and key to achieving and sustaining
disproportionately higher operating rates given our competitive
cost advantage. This year’s fourth quarter planned turnaround was
comprehensive in scope, designed to encompass maintenance and
reliability work at our three major sites. The mechanical portion
of the turnaround was safely and well executed across all sites,
however we experienced a delayed ramp to full operating rates in
our Hopewell facility given a challenge associated with our Ammonia
plant re-start.
“2024 has truly been a year of contrasts. On the positive side,
we have consistently demonstrated our agility and focus by
deploying the right strategies and actions to achieve commercial
success while advancing targeted growth initiatives. On the
opportunity side, while we have proven ability to navigate and
recover from operational difficulties, our manufacturing execution
this year has not met our expectations. Operational excellence is a
key enabler to our overall performance, with meaningful performance
upside for us to capture, and we take all learnings for sustained
continuous improvement with rigor and discipline. Despite the
unfavorable impact of the extended turnaround in the fourth
quarter, we are pleased to have returned to our targeted
utilization rates and our outlook for the remainder of the year and
2025 continues to be supported by our diverse product portfolio,
advantaged business model and favorable industry dynamics. We
remain confident in the growth prospects for AdvanSix, and are
committed to delivering sustainable long-term value to our
shareholders,” 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 November 26, 2024 to stockholders of record
as of the close of business on November 12, 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
third 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 November 1 until 12 noon ET on
November 8 by dialing (877) 344-7529 (domestic) or (412) 317-0088
(international). The access code is 2537780.
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 political and policy uncertainties with the approaching
U.S. Presidential election, and the conflict between Russia and
Ukraine, the conflict in Israel and Gaza, and the possible
expansion of such conflicts; the effect of any 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.
AdvanSix Inc.
Condensed Consolidated Balance
Sheets
(Unaudited)
(Dollars in thousands, except
share and per share amounts)
September 30, 2024
December 31, 2023
ASSETS
Current assets:
Cash and cash equivalents
$
17,298
$
29,768
Accounts and other receivables – net
149,058
165,393
Inventories – net
213,434
211,831
Taxes receivable
375
1,434
Other current assets
15,608
11,378
Total current assets
395,773
419,804
Property, plant and equipment – net
892,574
852,642
Operating lease right-of-use assets
90,740
95,805
Goodwill
56,192
56,192
Intangible assets
43,906
46,193
Other assets
31,050
25,384
Total assets
$
1,510,235
$
1,496,020
LIABILITIES
Current liabilities:
Accounts payable
$
207,272
$
259,068
Accrued liabilities
55,783
44,086
Income taxes payable
435
8,033
Operating lease liabilities –
short-term
30,135
32,053
Deferred income and customer advances
1,517
15,678
Total current liabilities
295,142
358,918
Deferred income taxes
154,690
151,059
Operating lease liabilities –
long-term
60,793
63,961
Line of credit – long-term
215,000
170,000
Postretirement benefit obligations
7,048
3,660
Other liabilities
11,154
9,185
Total liabilities
743,827
756,783
STOCKHOLDERS' EQUITY
Common stock, par value $0.01; 200,000,000
shares authorized; 32,982,868 shares issued and 26,730,739
outstanding at September 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
September 30, 2024 and December 31, 2023
—
—
Treasury stock at par (6,252,129 shares at
September 30, 2024; 5,848,475 shares at December 31, 2023)
(63
)
(58
)
Additional paid-in capital
134,735
138,046
Retained earnings
635,609
605,067
Accumulated other comprehensive loss
(4,203
)
(4,144
)
Total stockholders' equity
766,408
739,237
Total liabilities and stockholders'
equity
$
1,510,235
$
1,496,020
AdvanSix Inc.
Condensed Consolidated
Statements of Operations
(Unaudited)
(Dollars in thousands, except
share and per share amounts)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2024
2023
2024
2023
Sales
$
398,187
$
322,907
$
1,188,495
$
1,151,391
Costs, expenses and other:
Costs of goods sold
340,885
314,785
1,046,860
1,004,844
Selling, general and administrative
expenses
24,265
21,585
72,290
70,711
Interest expense, net
2,924
2,075
9,137
5,296
Other non-operating (income) expense,
net
368
(5,485
)
1,808
(6,918
)
Total costs, expenses and other
368,442
332,960
1,130,095
1,073,933
Income (loss) before taxes
29,745
(10,053
)
58,400
77,458
Income tax expense (benefit)
7,479
(2,076
)
14,603
17,753
Net income (loss)
$
22,266
$
(7,977
)
$
43,797
$
59,705
Earnings per common share
Basic
$
0.83
$
(0.29
)
$
1.63
$
2.18
Diluted
$
0.82
$
(0.29
)
$
1.61
$
2.12
Weighted average common shares
outstanding
Basic
26,790,752
27,209,521
26,836,114
27,433,851
Diluted
27,204,714
27,209,521
27,209,680
28,193,721
AdvanSix Inc.
Condensed Consolidated
Statements of Cash Flows
(Unaudited)
(Dollars in thousands)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2024
2023
2024
2023
Cash flows from operating
activities:
Net income (loss)
$
22,266
$
(7,977
)
$
43,797
$
59,705
Adjustments to reconcile net income (loss)
to net cash provided by operating activities:
Depreciation and amortization
18,933
18,379
57,197
54,337
Loss on disposal of assets
154
371
415
939
Deferred income taxes
2,887
(2,825
)
3,638
1,069
Stock-based compensation
1,559
1,391
5,963
5,840
Amortization of deferred financing
fees
155
155
464
464
Operational asset adjustments
—
(4,472
)
1,200
(4,472
)
Changes in assets and liabilities, net of
business acquisitions:
Accounts and other receivables
21,073
20,062
15,069
42,185
Inventories
(37,607
)
(3,598
)
(1,603
)
(14,082
)
Taxes receivable
(196
)
(56
)
1,059
8,273
Accounts payable
17,994
(4,245
)
(43,687
)
(50,123
)
Income taxes payable
(572
)
3,474
(7,598
)
2,136
Accrued liabilities
4,839
(2,043
)
10,988
(7,787
)
Deferred income and customer advances
369
82
(14,161
)
(32,015
)
Other assets and liabilities
5,396
2,104
(1,493
)
(9,088
)
Net cash provided by operating
activities
57,250
20,802
71,248
57,381
Cash flows from investing
activities:
Expenditures for property, plant and
equipment
(30,490
)
(25,131
)
(99,373
)
(69,025
)
Other investing activities
(2,317
)
(370
)
(6,053
)
(2,404
)
Net cash used for investing activities
(32,807
)
(25,501
)
(105,426
)
(71,429
)
Cash flows from financing
activities:
Borrowings from line of credit
54,000
140,500
311,500
371,000
Payments of line of credit
(69,000
)
(110,500
)
(266,500
)
(316,000
)
Principal payments of finance leases
(260
)
(242
)
(762
)
(698
)
Dividend payments
(4,276
)
(4,350
)
(12,858
)
(12,354
)
Purchase of treasury stock
(42
)
(9,266
)
(10,427
)
(37,651
)
Issuance of common stock
328
131
755
876
Net cash provided by (used for) financing
activities
(19,250
)
16,273
21,708
5,173
Net change in cash and cash
equivalents
5,193
11,574
(12,470
)
(8,875
)
Cash and cash equivalents at beginning of
period
12,105
10,536
29,768
30,985
Cash and cash equivalents at the end of
period
$
17,298
$
22,110
$
17,298
$
22,110
Supplemental non-cash investing
activities:
Capital expenditures included in accounts
payable
$
15,018
$
21,188
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
September 30,
Nine Months Ended
September 30,
2024
2023
2024
2023
Net cash provided by operating
activities
$
57,250
$
20,802
$
71,248
$
57,381
Expenditures for property, plant and
equipment
(30,490
)
(25,131
)
(99,373
)
(69,025
)
Free cash flow (1)
$
26,760
$
(4,329
)
$
(28,125
)
$
(11,644
)
(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
September 30,
Nine Months Ended
September 30,
2024
2023
2024
2023
Net income (loss)
$
22,266
$
(7,977
)
$
43,797
$
59,705
Non-cash stock-based compensation
1,559
1,391
5,963
5,840
Non-recurring, unusual or extraordinary
(income) expense (2)
—
(4,472
)
1,200
(4,472
)
Non-cash amortization from
acquisitions
531
532
1,595
1,596
Non-recurring M&A costs
—
—
—
—
Income tax expense (benefit) relating to
reconciling items
(367
)
776
(1,594
)
(157
)
Adjusted Net income (loss) (non-GAAP)
23,989
(9,750
)
50,961
62,512
Interest expense, net
2,924
2,075
9,137
5,296
Income tax expense (benefit) -
Adjusted
7,846
(2,852
)
16,197
17,911
Depreciation and amortization -
Adjusted
18,402
17,848
55,602
52,741
Adjusted EBITDA (non-GAAP)
$
53,161
$
7,321
$
131,897
$
138,460
Sales
$
398,187
$
322,907
$
1,188,495
$
1,151,391
Adjusted EBITDA Margin (non-GAAP) (3)
13.4
%
2.3
%
11.1
%
12.0
%
(2) 2024 includes a pre-tax loss of
approximately $1.2 million from the reduction of the Company’s
anticipated receivable related to the gain on the termination fee
recorded upon the exit from the Oben Holding Group S.A. alliance
during the third quarter of 2023. During 2023, there were several
transactions including the exit from the Oben Holding Group S.A.
alliance, licensee exit of legacy technology and exit of certain
low-margin oximes products that resulted in a $4.5 million net
pre-tax loss.
(3) Adjusted EBITDA Margin is defined as
Adjusted EBITDA divided by Sales
Three Months Ended
September 30,
Nine Months Ended
September 30,
2024
2023
2024
2023
Net income (loss)
$
22,266
$
(7,977
)
$
43,797
$
59,705
Adjusted Net income (loss) (non-GAAP)
23,989
(9,750
)
50,961
62,512
Weighted-average number of common shares
outstanding - basic
26,790,752
27,209,521
26,836,114
27,433,851
Dilutive effect of equity awards and other
stock-based holdings
413,962
—
373,566
759,870
Weighted-average number of common shares
outstanding - diluted
27,204,714
27,209,521
27,209,680
28,193,721
EPS - Basic
$
0.83
$
(0.29
)
$
1.63
$
2.18
EPS - Diluted
$
0.82
$
(0.29
)
$
1.61
$
2.12
Adjusted EPS - Basic (non-GAAP)
$
0.90
$
(0.36
)
$
1.90
$
2.28
Adjusted EPS - Diluted (non-GAAP)
$
0.88
$
(0.36
)
$
1.87
$
2.22
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(5)
—
~$50
Ammonia
2023
~$2
~$1
~$27
—
~$30
Sulfuric Acid
2024E
~$5
~$3
~$3
~$47(6)
~$58
Ammonia
(4) Primarily reflects the impact of fixed
cost absorption, maintenance expense, and the purchase of
feedstocks which are normally manufactured by the Company.
(5) During the multi-site planned plant
turnaround, additional required maintenance at our Frankford phenol
plant contributed to reduced production across our integrated value
chain and a delayed ramp to full operating rates at our Hopewell
and Chesterfield sites, resulting in an incremental $15 million
unfavorable impact to pre-tax income inclusive of fixed cost
absorption, higher maintenance expense and lost sales.
(6) During the multi-site planned plant
turnaround, additional required maintenance at our Hopewell plant
contributed to reduced production across our integrated value chain
and a delayed ramp to full operating rates, resulting in an
incremental approximately $17 million unfavorable impact to pre-tax
income inclusive of fixed cost absorption, higher maintenance
expense, and lost sales
View source
version on businesswire.com: https://www.businesswire.com/news/home/20241031152094/en/
Media Janeen Lawlor (973) 526-1615
janeen.lawlor@advansix.com
Investors Adam Kressel (973) 526-1700
adam.kressel@advansix.com
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