Core Viewpoint - AdvanSix reported mixed financial results for Q2 2025, with adjusted diluted earnings per share exceeding analyst expectations, while revenue fell short of forecasts, reflecting ongoing market challenges, particularly in the Nylon and Chemical Intermediates segments [1][5][13]. Financial Performance - Adjusted diluted EPS was $1.24, beating the estimate of $1.185 by 4.6%, but revenue was $410 million, missing the consensus of $428.4 million by 4.3% [1][2]. - Revenue decreased by 9.6% compared to Q2 2024, and adjusted EBITDA dropped by 28.8% year-over-year [1][2]. - The adjusted EBITDA margin fell to 13.6% from 17.2% in the prior year, indicating pressure on profitability [2][6]. Business Overview - AdvanSix is a major manufacturer of Nylon 6 resin, caprolactam, and plant nutrients, with significant operations in the U.S. [3]. - The company’s Hopewell facility is a leading site for caprolactam and ammonium sulfate production, contributing to operational efficiency [3]. Strategic Focus - Recent strategies include cost control, operational reliability, and growth investments through the SUSTAIN capital program [4]. - The company maintains a diversified product portfolio and strong customer relationships, which are critical for navigating market volatility [4]. Segment Performance - The Plant Nutrients segment showed resilience, with sales increasing by 6% to $156.8 million, driven by strong demand for ammonium sulfate [5][10]. - The Nylon and Caprolactam segments faced significant sales declines due to market downturns, particularly in automotive and construction sectors [6][9]. - Chemical Intermediates sales fell by 12% year-over-year, despite stable acetone margins [6][10]. Cash Flow and Capital Expenditures - Cash flow from operations halved compared to Q2 2024, leading to negative free cash flow of $7.2 million [7][8]. - Capital expenditures were $28.3 million, down from the previous year, as the company managed spending under its growth initiatives [8]. Future Outlook - Management anticipates higher ammonium sulfate prices in the upcoming quarter, while acetone margins are expected to remain healthy but moderate [13]. - The company is focused on addressing challenges in the Nylon business and optimizing costs amid ongoing input cost volatility [13][14].

[PART I. FINANCIAL INFORMATION](index=3&type=section&id=Part%20I%2E%20FINANCIAL%20INFORMATION) This section presents the company's unaudited condensed consolidated financial statements and management's discussion and analysis for the period [ITEM 1. FINANCIAL STATEMENTS](index=3&type=section&id=Item%201%2E%20Financial%20Statements) This section presents AdvanSix Inc.'s unaudited condensed consolidated financial statements and detailed notes [Condensed Consolidated Statements of Operations](index=3&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) This statement details AdvanSix Inc.'s sales, costs, and net income for the three and six months ended June 30, 2025 and 2024 | Metric (in thousands) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Sales | $410,022 | $453,479 | $787,813 | $790,308 | | Costs of goods sold | $351,308 | $372,111 | $675,628 | $705,975 | | Net income | $31,371 | $38,927 | $54,715 | $21,531 | | Basic EPS | $1.17 | $1.45 | $2.04 | $0.80 | | Diluted EPS | $1.15 | $1.43 | $2.01 | $0.79 | [Condensed Consolidated Statements of Comprehensive Income](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income) This statement presents AdvanSix Inc.'s net income and other comprehensive income components for the specified periods | Metric (in thousands) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Net income | $31,371 | $38,927 | $54,715 | $21,531 | | Foreign exchange translation adjustment | $24 | $(27) | $35 | $(42) | | Cash-flow hedges | — | — | $7 | $7 | | Other comprehensive income (loss), net of tax | $24 | $(27) | $42 | $(35) | | Comprehensive income | $31,395 | $38,900 | $54,757 | $21,496 | [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This statement provides AdvanSix Inc.'s financial position, including assets, liabilities, and equity, as of June 30, 2025 and December 31, 2024 | Metric (in thousands) | June 30, 2025 | December 31, 2024 | | :-------------------- | :------------ | :---------------- | | Total current assets | $434,176 | $387,116 | | Total assets | $1,646,402 | $1,594,920 | | Total current liabilities | $321,067 | $357,103 | | Total liabilities | $822,670 | $820,270 | | Total stockholders' equity | $823,732 | $774,650 | [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This statement summarizes AdvanSix Inc.'s cash inflows and outflows from operating, investing, and financing activities | Metric (in thousands) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------- | :--------------------------- | :--------------------------- | | Net cash provided by operating activities | $32,553 | $13,998 | | Net cash used for investing activities | $(68,218) | $(72,619) |\n| Net cash provided by financing activities | $34,547 | $40,958 | | Net change in cash and cash equivalents | $(1,118) | $(17,663) | | Cash and cash equivalents at end of period | $18,446 | $12,105 | [Condensed Consolidated Statements of Stockholders' Equity](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders%27%20Equity) This statement details changes in AdvanSix Inc.'s stockholders' equity, including common stock, retained earnings, and comprehensive income | Metric (in thousands) | Balance at Dec 31, 2024 | Balance at June 30, 2025 | | :-------------------- | :---------------------- | :----------------------- | | Common Stock | $330 | $332 | | Additional Paid-In Capital | $136,872 | $140,097 | | Retained Earnings | $631,541 | $677,354 | | Treasury Stock | $(63) | $(63) | | Accumulated Other Comprehensive Income | $5,970 | $6,012 | | Total Stockholders' Equity | $774,650 | $823,732 | - Net income contributed **$54,715 thousand** to retained earnings for the six months ended June 30, 2025[17](index=17&type=chunk) - The company repurchased **53,432 shares** of treasury stock in Q1 2025 and **2,538 shares** in Q2 2025[17](index=17&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) These notes provide detailed explanations and disclosures supporting the condensed consolidated financial statements [1. Organization, Operations and Basis of Presentation](index=9&type=section&id=1%2E%20Organization,%20Operations%20and%20Basis%20of%20Presentation) This note describes AdvanSix's business, operations, and the basis for its financial statement presentation - AdvanSix is a diversified chemistry company producing essential materials for building and construction, fertilizers, agrochemicals, plastics, solvents, packaging, paints, coatings, adhesives, and electronics[21](index=21&type=chunk) - The company reached a final omnibus settlement in January 2025 for a business interruption claim related to the June 2019 PES refinery fire, resulting in approximately **$26 million** in insurance settlement proceeds in Q1 2025, recognized as a reduction to Costs of Goods Sold. Total aggregate proceeds since the original claim are approximately **$39 million**[26](index=26&type=chunk) - As of June 30, 2025, the company repurchased **6,308,099 shares** for **$194.0 million** at a weighted average price of **$30.75 per share**, with **$62.0 million** remaining available under the share repurchase program[27](index=27&type=chunk) [2. Recent Accounting Pronouncements](index=11&type=section&id=2%2E%20Recent%20Accounting%20Pronouncements) This note outlines recently issued accounting standards and their potential impact on the company's financial reporting - FASB issued ASU 2024-03 (Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures) in November 2024, requiring disclosure of specified cost and expense information, effective for annual periods after December 15, 2026[32](index=32&type=chunk) - FASB issued ASU 2023-09 (Income Taxes - Improvements to Income Tax Disclosures) in December 2023, requiring more detailed annual disclosures for income tax rate reconciliation and taxes paid, effective for annual periods after December 31, 2024[33](index=33&type=chunk) [3. Revenues](index=11&type=section&id=3%2E%20Revenues) This note provides a breakdown of AdvanSix's sales by product line and geographic area, and customer concentration - The Company's ten largest customers accounted for approximately **39%** of total sales for the six months ended June 30, 2025[34](index=34&type=chunk) - Shaw Industries Group, Inc. is the largest customer, with sales to Shaw representing **9%** of total sales for Q2 2025[35](index=35&type=chunk) | Product Line | 3 Months Ended June 30, 2025 | % of Total Sales (Q2 2025) | 3 Months Ended June 30, 2024 | % of Total Sales (Q2 2024) | 6 Months Ended June 30, 2025 | % of Total Sales (H1 2025) | 6 Months Ended June 30, 2024 | % of Total Sales (H1 2024) | | :-------------------- | :--------------------------- | :------------------------- | :--------------------------- | :------------------------- | :--------------------------- | :------------------------- | :--------------------------- | :------------------------- | | Nylon | $79,503 | 20% | $103,217 | 23% | $167,871 | 21% | $187,606 | 24% | | Caprolactam | $66,424 | 16% | $81,303 | 18% | $133,856 | 17% | $142,779 | 18% | | Plant Nutrients | $156,770 | 38% | $147,339 | 32% | $285,011 | 36% | $242,035 | 30% | | Chemical Intermediates | $107,325 | 26% | $121,620 | 27% | $201,075 | 26% | $217,888 | 28% | | Total | $410,022 | 100% | $453,479 | 100% | $787,813 | 100% | $790,308 | 100% | | Geographic Area | 3 Months Ended June 30, 2025 | % of Total Sales (Q2 2025) | 3 Months Ended June 30, 2024 | % of Total Sales (Q2 2024) | 6 Months Ended June 30, 2025 | % of Total Sales (H1 2025) | 6 Months Ended June 30, 2024 | % of Total Sales (H1 2024) | | :-------------- | :--------------------------- | :------------------------- | :--------------------------- | :------------------------- | :--------------------------- | :------------------------- | :--------------------------- | :------------------------- | | United States | $358,671 | 87% | $401,859 | 89% | $679,118 | 86% | $686,447 | 87% | | International | $51,351 | 13% | $51,620 | 11% | $108,695 | 14% | $103,861 | 13% | | Total | $410,022 | 100% | $453,479 | 100% | $787,813 | 100% | $790,308 | 100% | [4. Earnings Per Share](index=12&type=section&id=4%2E%20Earnings%20Per%20Share) This note details the calculation of basic and diluted earnings per share and cash dividends declared | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Net income | $31,371 | $38,927 | $54,715 | $21,531 | | Basic EPS | $1.17 | $1.45 | $2.04 | $0.80 | | Diluted EPS | $1.15 | $1.43 | $2.01 | $0.79 | | Weighted average common shares outstanding (Basic) | 26,896,037 | 26,839,429 | 26,867,252 | 26,859,044 | | Weighted average common shares outstanding (Diluted) | 27,223,309 | 27,150,347 | 27,248,976 | 27,251,326 | | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Cash dividends declared per share | $0.16 | $0.16 | $0.32 | $0.32 | | Aggregate dividends paid to shareholders (in thousands) | $4,290 | $4,292 | $8,580 | $8,582 | [5. Accounts and Other Receivables – Net](index=13&type=section&id=5%2E%20Accounts%20and%20Other%20Receivables%20%E2%80%93%20Net) This note presents the composition of AdvanSix's accounts and other receivables, net of allowance for credit losses | Metric | June 30, 2025 | December 31, 2024 | | :------------------------------ | :------------ | :---------------- | | Accounts receivables | $155,701 | $141,273 | | Other | $4,343 | $4,982 | | Total accounts and other receivables | $160,044 | $146,255 | | Less – allowance for credit losses | $(342) | $(582) | | Total accounts and other receivables – net | $159,702 | $145,673 | [6. Inventories](index=15&type=section&id=6%2E%20Inventories) This note details the components of AdvanSix's inventories, including raw materials, work in progress, and finished goods | Metric | June 30, 2025 | December 31, 2024 | | :------------------------ | :------------ | :---------------- | | Raw materials | $103,110 | $99,320 | | Work in progress | $92,241 | $71,175 | | Finished goods | $73,938 | $73,994 | | Spares and other | $32,605 | $31,948 | | Total before LIFO reduction | $301,894 | $276,437 | | Reduction to LIFO cost basis | $(80,130) | $(64,051) | | Total inventories | $221,764 | $212,386 | - The excess of replacement cost over the carrying value of LIFO inventories was **$75.9 million** at June 30, 2025, up from **$57.5 million** at December 31, 2024[47](index=47&type=chunk) [7. Leases](index=15&type=section&id=7%2E%20Leases) This note provides information on AdvanSix's finance, operating, and short-term lease costs for the periods presented | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------ | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Total finance lease cost | $287 | $303 | $582 | $585 | | Operating lease cost | $13,999 | $10,797 | $27,077 | $22,483 | | Short-term lease cost | $820 | $1,141 | $1,616 | $2,334 | | Total lease cost | $15,106 | $12,241 | $29,275 | $25,402 | [8. Goodwill and Intangible Assets](index=15&type=section&id=8%2E%20Goodwill%20and%20Intangible%20Assets) This note outlines the carrying amounts of AdvanSix's goodwill and intangible assets, including amortization expense - There was no change in the carrying amount of goodwill for the six months ended June 30, 2025[51](index=51&type=chunk) | Asset Type | Net Book Value (June 30, 2025) | Net Book Value (Dec 31, 2024) | | :--------------------- | :----------------------------- | :---------------------------- | | Customer relationships | $30,201 | $31,154 | | Licenses | $11,070 | $11,532 | | Trade names | $348 | $458 | | Total | $41,619 | $43,144 | - Amortization expense on intangible assets was **$0.8 million** for Q2 2025 and **$1.5 million** for the six months ended June 30, 2025[55](index=55&type=chunk) [9. Commitments and Contingencies](index=17&type=section&id=9%2E%20Commitments%20and%20Contingencies) This note discloses AdvanSix's commitments and potential contingent liabilities, including legal and environmental matters - The Company does not expect the outcome of current lawsuits, investigations, and disputes to have a material adverse effect on its consolidated financial position or results of operations[57](index=57&type=chunk) - AdvanSix assumed all health, safety and environmental (HSE) liabilities and compliance obligations related to its current business and manufacturing locations from Honeywell International Inc[58](index=58&type=chunk) [10. Income Taxes](index=17&type=section&id=10%2E%20Income%20Taxes) This note presents AdvanSix's income tax expense and effective tax rates, explaining key drivers of changes | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Income tax expense | $279 | $13,145 | $5,864 | $7,124 | | Effective tax rate | 0.9% | 25.2% | 9.7% | 24.9% | - The lower effective tax rate for Q2 and H1 2025 was primarily due to discrete tax adjustments related to IRC Section 45Q tax credits of **$1.8 million** and **$7.9 million**, respectively[60](index=60&type=chunk)[62](index=62&type=chunk) [11. Supplier Finance Programs](index=18&type=section&id=11%2E%20Supplier%20Finance%20Programs) This note describes AdvanSix's use of supplier finance programs and related outstanding amounts - The Company uses a supply chain finance program, with approximately **$19.8 million** due to the financial intermediary as of June 30, 2025, included in Accounts payable[64](index=64&type=chunk) [12. Segment Related Information](index=18&type=section&id=12%2E%20Segment%20Related%20Information) This note provides information on AdvanSix's single operating segment and how performance is evaluated - AdvanSix is identified as a single operating and reportable segment: chemical manufacturing, due to its vertically integrated operations and centralized functions[65](index=65&type=chunk) - The Chief Operating Decision Maker (CODM) evaluates performance and allocates resources based on consolidated net income, total assets, and capital expenditures[67](index=67&type=chunk)[68](index=68&type=chunk) | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Revenue | $410,022 | $453,479 | $787,813 | $790,308 | | Variable costs of goods sold | $175,178 | $204,090 | $328,082 | $375,530 | | Plant costs | $127,376 | $118,968 | $249,229 | $235,399 | | Freight and distribution costs | $46,211 | $46,859 | $93,614 | $90,158 | | Selling, general, and administrative expense | $25,416 | $24,431 | $48,825 | $48,024 | | Other segment items | $4,470 | $20,204 | $13,348 | $19,666 | | Segment net income | $31,371 | $38,927 | $54,715 | $21,531 | [13. Subsequent Events](index=18&type=section&id=13%2E%20Subsequent%20Events) This note discloses significant events that occurred after the balance sheet date but before the financial statements were issued - On August 1, 2025, the Board declared a quarterly cash dividend of **$0.16 per share**, payable on August 26, 2025[72](index=72&type=chunk) [ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](index=21&type=section&id=Item%202%2E%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section analyzes AdvanSix's financial condition and operational results, covering sales, costs, and liquidity [Note Regarding Forward-Looking Statements](index=21&type=section&id=Note%20Regarding%20Forward-Looking%20Statements) This note cautions readers about forward-looking statements, highlighting inherent risks and uncertainties - The report contains forward-looking statements identified by words like "expect," "anticipate," "estimate," and "outlook," which are subject to known and unknown risks and uncertainties[74](index=74&type=chunk) - Risks include general economic conditions, inflation, tariffs, interest rates, labor shortages, supply chain issues, geopolitical conflicts, cybersecurity attacks, and raw material price fluctuations[74](index=74&type=chunk) [Business Overview](index=21&type=section&id=Business%20Overview) This section provides an overview of AdvanSix's core business segments: Nylon Solutions, Plant Nutrients, and Chemical Intermediates [Nylon Solutions](index=22&type=section&id=Nylon%20Solutions) This section describes AdvanSix's Nylon 6 resin and caprolactam products, production, and market dynamics - AdvanSix produces and sells Nylon 6 resin (under Aegis® brand) and caprolactam, a key monomer for Nylon 6[79](index=79&type=chunk) - The Hopewell, VA facility is one of the world's largest single-site producers of caprolactam[79](index=79&type=chunk) - Nylon 6 resin prices typically track a spread over caprolactam, which in turn tracks benzene prices, with cyclicality due to global supply and demand[76](index=76&type=chunk) [Plant Nutrients](index=22&type=section&id=Plant%20Nutrients) This section details AdvanSix's ammonium sulfate fertilizer production and its seasonal market demand - AdvanSix is the world's largest single-site producer of ammonium sulfate fertilizer, derived from integrated operations at the Hopewell facility[79](index=79&type=chunk) - Ammonium sulfate fertilizer sales exhibit quarterly seasonality, with demand and pricing typically strongest in the first half of the year in North America[78](index=78&type=chunk) [Chemical Intermediates](index=22&type=section&id=Chemical%20Intermediates) This section outlines AdvanSix's range of chemical intermediate products and their market influences - Key chemical intermediate products include acetone, phenol, alpha-methylstyrene, cyclohexanone, oximes, cyclohexanol, and alkyl and specialty amines[79](index=79&type=chunk) - Acetone prices are influenced by supply and demand dynamics and underlying propylene input costs[81](index=81&type=chunk) [Recent Developments](index=24&type=section&id=Recent%20Developments) This section highlights key recent events, including executive appointments, regulatory reviews, and insurance settlements - Christopher Gramm was appointed Interim Chief Financial Officer, effective July 9, 2025[83](index=83&type=chunk) - The U.S. Department of Commerce initiated a five-year review of anti-dumping orders on acetone imports from several countries, with the ITC expected to issue results in Q4 2025[84](index=84&type=chunk) - AdvanSix received a final insurance settlement of approximately **$26 million** in Q1 2025 related to the June 2019 PES refinery fire, bringing total aggregate proceeds to **$39 million**[85](index=85&type=chunk) [Results of Operations](index=24&type=section&id=Results%20of%20Operations) This section analyzes AdvanSix's financial performance, including sales, costs, expenses, and net income [Sales](index=25&type=section&id=Sales) This section analyzes the drivers of AdvanSix's sales performance, including volume, pricing, and product mix | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | % Change (YoY) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | % Change (YoY) | | :----- | :--------------------------- | :--------------------------- | :------------- | :--------------------------- | :--------------------------- | :------------- | | Sales | $410,022 | $453,479 | (9.6)% | $787,813 | $790,308 | (0.3)% | - Q2 2025 sales decrease was driven by **8.1%** decreased volume (soft nylon demand) and **1.5%** lower price (raw material pass-through), partially offset by **3%** favorable market-based pricing in Plant Nutrients[87](index=87&type=chunk) - H1 2025 sales were flat due to **1.2%** decreased volume (soft nylon demand) offset by **0.9%** higher pricing (favorable market-based pricing in Plant Nutrients and Nylon Solutions)[88](index=88&type=chunk) [Costs of Goods Sold](index=25&type=section&id=Costs%20of%20Goods%20Sold) This section examines the factors influencing AdvanSix's cost of goods sold and gross margin percentage | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | % Change (YoY) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | % Change (YoY) | | :-------------------- | :--------------------------- | :--------------------------- | :------------- | :--------------------------- | :--------------------------- | :------------- | | Costs of goods sold | $351,308 | $372,111 | (5.6)% | $675,628 | $705,975 | (4.3)% | | Gross Margin percentage | 14.3% | 17.9% | (3.6) pp | 14.2% | 10.7% | 3.5 pp | - H1 2025 COGS decreased due to **4%** insurance proceeds from PES shutdown, **2%** decreased operational costs, and **2%** decreased sales volume, partially offset by **3%** increased raw material costs[90](index=90&type=chunk) - H1 2025 gross margin percentage increased by approximately **4%** due to insurance proceeds (**3%**), decreased plant costs (**1%**), and net impact of lower sales volume/mix (**1%**), partially offset by market-based pricing (**2%**)[92](index=92&type=chunk) [Selling, General and Administrative Expenses](index=25&type=section&id=Selling,%20General%20and%20Administrative%20Expenses) This section discusses changes in AdvanSix's selling, general, and administrative expenses and their drivers | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Selling, general and administrative expenses | $25,416 | $24,431 | $48,825 | $48,024 | | Percentage of Sales | 6.2% | 5.4% | 6.2% | 6.1% | - The increase in SG&A expenses for both periods was primarily due to planned investment in upgrading the enterprise resource planning system[95](index=95&type=chunk)[96](index=96&type=chunk) [Income Tax Expense](index=26&type=section&id=Income%20Tax%20Expense) This section analyzes AdvanSix's income tax expense and effective tax rate, including the impact of tax credits | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :----------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Income tax expense | $279 | $13,145 | $5,864 | $7,124 | | Effective tax rate | 0.9% | 25.2% | 9.7% | 24.9% | - The lower effective tax rate in Q2 and H1 2025 was primarily due to IRC Section 45Q tax credits of **$1.8 million** and **$7.9 million**, respectively[97](index=97&type=chunk)[98](index=98&type=chunk) - The recently signed One Big Beautiful Bill Act, enacted after June 30, 2025, is expected to result in lower cash taxes in future periods due to full expensing of R&D costs and **100%** bonus depreciation provisions[99](index=99&type=chunk) [Net Income](index=26&type=section&id=Net%20Income) This section presents AdvanSix's net income for the current and prior periods | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :--------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Net income | $31,371 | $38,927 | $54,715 | $21,531 | [Non-GAAP Measures](index=27&type=section&id=Non-GAAP%20Measures) This section provides AdvanSix's adjusted financial metrics, including Adjusted Net Income, EBITDA, and EPS | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Adjusted Net income | $33,732 | $42,090 | $59,156 | $26,972 | | Adjusted EBITDA | $55,675 | $78,141 | $107,301 | $78,736 | | Adjusted EBITDA Margin | 13.6% | 17.2% | 13.6% | 10.0% | | Adjusted EPS - Basic | $1.25 | $1.57 | $2.20 | $1.00 | | Adjusted EPS - Diluted | $1.24 | $1.55 | $2.17 | $0.99 | [Liquidity and Capital Resources](index=28&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses AdvanSix's liquidity sources, capital expenditures, dividends, and credit facilities [Liquidity](index=28&type=section&id=Liquidity) This section outlines AdvanSix's primary sources of liquidity, cash balances, and available credit capacity - Primary liquidity sources are cash balances, operating cash flows, and available capacity under the **$500 million** Revolving Credit Facility[107](index=107&type=chunk)[119](index=119&type=chunk) - As of June 30, 2025, the Company had **$18.4 million** cash on hand and approximately **$259 million** of additional capacity available under the revolving credit facility[109](index=109&type=chunk)[125](index=125&type=chunk) - Capital expenditures are projected to be **$135 million to $145 million** in 2025, up from **$134 million** in 2024, supporting the SUSTAIN growth program and risk mitigation[110](index=110&type=chunk) - The company has repurchased **6,308,099 shares** for **$194.0 million** life-to-date, with **$62.0 million** remaining under the current authorization as of June 30, 2025[113](index=113&type=chunk) [Dividends](index=29&type=section&id=Dividends) This section details AdvanSix's quarterly cash dividend payments and declaration history - The Company commenced quarterly cash dividends on September 28, 2021[116](index=116&type=chunk) | Date of Announcement | Dividend per Share | Total Approximate Dividend Amount ($M) | | :------------------- | :----------------- | :------------------------------------- | | 8/1/2025 | $0.16 | $4.3 | | 5/2/2025 | $0.16 | $4.3 | | 2/21/2025 | $0.16 | $4.3 | [Credit Agreement](index=30&type=section&id=Credit%20Agreement) This section describes AdvanSix's revolving credit facility, interest rates, and compliance with financial covenants - The Company has a **$500 million** senior secured revolving credit facility (Revolving Credit Facility) with a maturity date of October 27, 2026[119](index=119&type=chunk)[121](index=121&type=chunk) - Borrowings under the Credit Agreement bear interest at floating rates (base rate + **0.25%-1.25%** or Adjusted Term SOFR + **1.25%-2.25%**), varying with the Consolidated Leverage Ratio[122](index=122&type=chunk) - The Company was in compliance with all financial covenants (Consolidated Interest Coverage Ratio not less than **3.00 to 1.00** and Consolidated Leverage Ratio of **3.75 to 1.00** or less) as of June 30, 2025[124](index=124&type=chunk) - The borrowed balance under the Revolving Credit Facility was **$240 million** as of June 30, 2025, an incremental net amount of **$45 million** during the six months ended June 30, 2025[125](index=125&type=chunk) [Cash Flow Summary](index=30&type=section&id=Cash%20Flow%20Summary) This section summarizes AdvanSix's cash flows from operating, investing, and financing activities | Metric | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------------ | :--------------------------- | :--------------------------- | | Cash provided by operating activities | $32,553 | $13,998 | | Cash used for investing activities | $(68,218) | $(72,619) | | Cash provided by financing activities | $34,547 | $40,958 | | Net change in cash and cash equivalents | $(1,118) | $(17,663) | - Operating cash flow increased by **$18.6 million**, driven by a **$33.2 million** increase in net income, partially offset by unfavorable impacts from taxes receivable/payable and accrued liabilities[126](index=126&type=chunk) - Financing cash flow decreased by **$6.4 million** due to lower net borrowings (**$45.0 million** in H1 2025 vs. **$60.0 million** in H1 2024), partially offset by fewer share repurchases[128](index=128&type=chunk) [Capital Expenditures](index=32&type=section&id=Capital%20Expenditures) This section details AdvanSix's capital expenditures for property, plant, and equipment, and future projections | Metric | 6 Months Ended June 30, 2025 | | :---------------------------------------- | :--------------------------- | | Capital expenditures in Accounts payable at Dec 31, 2024 | $23,645 | | Purchases of property, plant and equipment | $53,444 | | Less: Capital expenditures in Accounts payable at June 30, 2025 | $(14,762) | | Cash paid for capital expenditures | $62,327 | - Total capital expenditures are projected to be approximately **$135 million to $145 million** in 2025[130](index=130&type=chunk) [Critical Accounting Policies and Estimates](index=32&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) This section confirms no material changes to AdvanSix's critical accounting policies since the last annual report - There have been no material changes to the Company's critical accounting policies or the methodologies/assumptions applied since the filing of the 2024 Form 10-K[131](index=131&type=chunk) [Recent Accounting Pronouncements](index=32&type=section&id=Recent%20Accounting%20Pronouncements) This section refers to detailed disclosures on recent accounting pronouncements in the financial statements notes - Refer to "Note 2. Recent Accounting Pronouncements" in the Condensed Consolidated Financial Statements for details[132](index=132&type=chunk) [ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](index=32&type=section&id=Item%203%2E%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section details AdvanSix's market risk exposure, primarily interest rate risk from its Revolving Credit Facility - The Company's primary market risk exposure is interest rate risk, specifically related to its floating-rate Revolving Credit Facility[133](index=133&type=chunk) - A **25-basis point** fluctuation in interest rates would result in an approximate **$0.6 million** increase or decrease to interest expense for the six months ended June 30, 2025[134](index=134&type=chunk) [ITEM 4. CONTROLS AND PROCEDURES](index=33&type=section&id=Item%204%2E%20Controls%20and%20Procedures) This section evaluates AdvanSix's disclosure controls and procedures, confirming effectiveness and no material changes [Evaluation of Disclosure Controls and Procedures](index=33&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) This section confirms the effectiveness of AdvanSix's disclosure controls and procedures as of June 30, 2025 - The CEO and Interim CFO concluded that the Company's disclosure controls and procedures were effective at a reasonable assurance level as of June 30, 2025[138](index=138&type=chunk) [Changes in Internal Control over Financial Reporting](index=33&type=section&id=Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) This section reports no material changes to internal control over financial reporting, noting an ongoing ERP system upgrade - No material changes in internal control over financial reporting occurred during Q2 2025[139](index=139&type=chunk) - The Company is upgrading its ERP system in Q3 2025, which will replace existing operating and financial systems, and its impact on internal controls will be evaluated[140](index=140&type=chunk) [PART II. OTHER INFORMATION](index=27&type=section&id=Part%20II%2E%20OTHER%20INFORMATION) This section provides additional information not covered in the financial statements, including legal, risk, and equity matters [ITEM 1. LEGAL PROCEEDINGS](index=33&type=section&id=Item%201%2E%20Legal%20Proceedings) This section confirms AdvanSix is not involved in legal proceedings materially impacting its financial position - The Company is not involved in any legal proceedings expected to have a material adverse effect on its consolidated financial position, results of operations, or operating cash flows[141](index=141&type=chunk) [ITEM 1A. RISK FACTORS](index=33&type=section&id=Item%201A%2E%20Risk%20Factors) This section confirms no material changes to the risk factors previously disclosed in the 2024 Form 10-K - No material changes to risk factors have occurred since the 2024 Form 10-K filing[142](index=142&type=chunk) [ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS](index=33&type=section&id=Item%202%2E%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section updates AdvanSix's share repurchase program, detailing shares bought and remaining authorization - The Board authorized a share repurchase program of up to an additional **$75 million** on February 17, 2023, adding to previous authorizations[143](index=143&type=chunk) - During Q2 2025, **2,538 shares** were purchased to cover tax withholding obligations, with no additional shares purchased under the publicly announced plan[145](index=145&type=chunk)[147](index=147&type=chunk) - As of June 30, 2025, approximately **$62.0 million** remained available for share repurchases under the authorized program[147](index=147&type=chunk) [ITEM 5. OTHER INFORMATION](index=34&type=section&id=Item%205%2E%20Other%20Information) This section confirms no Rule 10b5-1 or non-Rule 10b5-1 trading arrangements by officers or directors - No directors or executive officers adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the quarter ended June 30, 2025[148](index=148&type=chunk) [ITEM 6. EXHIBITS](index=35&type=section&id=Item%206%2E%20Exhibits) This section lists all documents filed as exhibits to the Form 10-Q, including governance and certifications - The exhibits include corporate governance documents (Certificate of Incorporation, By-laws), the 2016 Stock Incentive Plan, Rule 13a-14(a)/15d-14(a) and Section 1350 certifications, and Inline XBRL documents[150](index=150&type=chunk) [Signature](index=36&type=section&id=Signature) This section contains the signature of Christopher Gramm, Interim CFO, confirming the report's filing - The report was signed by Christopher Gramm, Vice President and Interim Chief Financial Officer, on August 1, 2025[154](index=154&type=chunk)

Financial Data and Key Metrics Changes - Sales for the second quarter of 2025 were $410 million, a decrease of approximately 10% compared to the prior year, with sales volume contributing approximately 8% to this change [11] - Adjusted EBITDA was $56 million, resulting in an adjusted EBITDA margin of 13.6% [12] - Adjusted earnings per share were $1.24, with an effective tax rate of 0.9%, significantly lower than 25.2% in the second quarter of 2024, primarily due to $8 million of 45Q tax credits claimed [12] - Cash flow from operations decreased by $29 million year-over-year to $21 million, mainly due to lower net income and timing of tax credits [13] Business Line Data and Key Metrics Changes - The Plant Nutrients business saw a 7% increase in domestic granular sales volume, supported by favorable supply and demand conditions for ammonium sulfate [19] - In the nylon segment, sales volume decreased by approximately 10%, with margins expanding year-over-year despite a lower macro environment [21] - Acetone prices declined year-over-year amid higher input costs, but margins remained healthy and in line with cycle averages [24] Market Data and Key Metrics Changes - Demand across the portfolio remained softer overall, with higher raw material prices impacting margins, particularly in natural gas and sulfur [6] - The North American fertilizer year runs from July to June, and the company anticipates a strong fall fill program supported by a robust order book [19] - Global operating rates in China have moderated, impacting trade flows and pricing improvements [22] Company Strategy and Development Direction - The company is focused on making necessary investments to support long-term performance, including upgrading its enterprise resource planning system [6] - The strategic focus includes optimizing fixed cost structures and enhancing production output in the most profitable areas [22][28] - The company aims to leverage its position as a U.S.-based manufacturer aligned with domestic supply chains and energy markets [9][27] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding the diversified nature of the portfolio and the ability to navigate through dynamic market conditions [40] - The company remains confident in its growth prospects and is committed to delivering long-term value to shareholders [28][63] - Management highlighted the importance of maintaining high utilization rates and flexibility in production to adapt to market demands [50] Other Important Information - The company was awarded a 2025 gold rating for corporate social responsibility from EcoVadis, placing it in the top 3% of assessed companies [7] - The company has claimed nearly $20 million in 45Q carbon capture tax credits, representing a significant value driver [8][17] Q&A Session Summary Question: Insights on the ammonium sulfate business and pricing relationships - Management noted a strong fertilizer year with a 7% increase in sales volume and a robust order book supporting the fall fill program, expecting similar pricing premiums to previous years [33][34] Question: Chemical industry environment and profitability outlook - Management acknowledged a dynamic environment but remains cautiously optimistic due to the diversified portfolio and integrated business model, which supports pricing stability [40][41] Question: Strategies for maintaining utilization rates in nylon production - Management emphasized the importance of an integrated value chain and selective export strategies to maintain high utilization rates despite global market challenges [48][49] Question: Cash flow improvement expectations and timing of carbon tax credit cash flows - Management expects sequential improvement in cash flow in the second half of the year, with significant levers including the 45Q tax credits and ammonium sulfate pre-buy program [55][56]

Financial Data and Key Metrics Changes - Sales for Q2 2025 were $410 million, a decrease of approximately 10% compared to the prior year, with sales volume contributing approximately 8% to this change [10] - Adjusted EBITDA was $56 million, with an adjusted EBITDA margin of 13.6% [11] - Adjusted earnings per share were $1.24, and the effective tax rate was 0.9%, significantly lower than 25.2% in Q2 2024, primarily due to $8 million in 45Q tax credits claimed [11] - Cash flow from operations decreased by $29 million year-over-year to $21 million, mainly due to lower net income and timing of tax credits [12] Business Line Data and Key Metrics Changes - The Plant Nutrients business saw a 7% increase in domestic granular sales volume, supported by favorable ammonium sulfate supply and demand conditions [18] - Nylon sales volumes decreased by approximately 10%, while ammonium sulfate volumes increased by 7% [44] - In the chemical intermediates segment, acetone prices declined year-over-year, but margins remained healthy and in line with cycle averages [23] Market Data and Key Metrics Changes - Demand across the portfolio remained softer overall, with higher raw material prices impacting margins, particularly in natural gas and sulfur [6] - The North American fertilizer year runs from July to June, and the company anticipates a strong fall fill program supported by a robust order book [18] - Global operating rates in China have moderated, impacting trade flows and pricing improvement [22] Company Strategy and Development Direction - The company is focused on making necessary investments to support long-term performance, including upgrading its enterprise resource planning system [6] - The company aims to leverage its position as a U.S.-based manufacturer aligned with domestic supply chains and energy markets [7] - The strategic focus includes optimizing fixed cost structures and enhancing production output in profitable areas [28] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about the diversified nature of the portfolio and the strength of being a U.S.-based manufacturer [39] - The company is navigating a dynamic environment with structural tariffs in place, which provides insulation from first-order impacts [28] - Management remains confident in the growth prospects and long-term value delivery to shareholders [62] Other Important Information - The company claimed an additional $8 million in 45Q carbon capture tax credits in Q2, bringing the total to nearly $20 million for the 2018-2020 tax periods [7] - The company has reduced its capital expenditure forecast for the year to a range of $135 million to $145 million [6] Q&A Session Summary Question: Insights on the ammonium sulfate business and pricing relationships - Management noted a strong fertilizer year with a 7% increase in sales volume and a robust order book supporting the fall fill program, expecting similar pricing relationships to previous years [33][36] Question: Chemical industry environment and profitability outlook - Management acknowledged a dynamic operating environment but remains cautiously optimistic due to the diversified portfolio and integrated business model, which supports pricing stability [39][42] Question: Strategies for maintaining high utilization rates in nylon production - Management emphasized the importance of an integrated value chain and selective export strategies to maintain utilization rates and navigate current market dynamics [46][48] Question: Cash flow improvement expectations and timing of carbon tax credit cash flows - Management expects sequential improvement in cash flow in the second half of the year, driven by 45Q tax credits and the ammonium sulfate pre-buy program [52][56]

Financial Performance - 2Q25 sales were $410 million, a 10% decrease compared to $453 million in 2Q24[6, 9] - Adjusted EBITDA for 2Q25 was $56 million, down from $78 million in 2Q24, with an Adjusted EBITDA Margin of 13.6% compared to 17.2%[6, 9] - Adjusted EPS decreased to $1.24 in 2Q25 from $1.55 in 2Q24[6, 9] - Net income for 2Q25 was $31.4 million, compared to $38.9 million in 2Q24[9] Key Drivers and Factors - Sales volume decreased by 8%, and price decreased by 2%, which includes a 5% raw materials pass-through and a 3% market-based increase[11] - The decrease in Adjusted EBITDA was primarily driven by a decline in Chemical Intermediates pricing, net of raw material costs, and lower Nylon Solutions sales volume[11] - The company's effective tax rate in 2Q25 was 0.9% compared to 25.2% in 2Q24, primarily due to approximately $8 million of 45Q carbon capture tax credits and other discrete tax adjustments[11] Business Segment Updates - Plant Nutrients saw strong domestic application season for ammonium sulfate, supported by favorable supply and demand conditions, with a 7% increase in AdvanSix AS Domestic Granular Sales Volume from 0.91M ST to 0.98M ST[7, 21] - Chemical Intermediates experienced lower acetone spread over refinery grade propylene costs year-over-year, but expected to remain near cycle averages[7] - Nylon Solutions is focused on controllable levers to optimize performance amid demand softness in key end markets, including engineering plastics applications serving the auto sector[7] Strategic Initiatives - The company is continuing progress on 45Q carbon capture tax credits, with a total opportunity in the range of $100 million to $120 million through 2029[7, 15] - The SUSTAIN program aims to achieve approximately 72% granular conversion for AdvanSix by the end of 2025[23]

[Executive Summary](index=1&type=section&id=Executive%20Summary) [2Q 2025 Highlights](index=1&type=section&id=2Q%202025%20Highlights) AdvanSix reported 2Q25 sales of $410 million (down 10% YoY), EPS of $1.15, Adjusted EPS of $1.24, and $21 million in cash flow from operations, including $8 million in 45Q tax credits 2Q 2025 Highlights | Metric | Value | | :-------------------------------- | :------------------- | | **Sales** | $410 million (down 10% YoY) | | **Earnings Per Share (EPS)** | $1.15 | | **Adjusted Earnings Per Share** | $1.24 | | **Cash Flow from Operations** | $21 million | | **45Q Carbon Capture Tax Credits** | $8 million claimed | [CEO Commentary](index=1&type=section&id=CEO%20Commentary) CEO Erin Kane noted resilient 2Q results driven by Plant Nutrients, despite softer demand and margin pressure from raw material costs, while advancing 45Q tax credits and growth initiatives - Resilient second quarter results with strong sequential improvement from the first quarter, primarily driven by strong performance from the Plant Nutrients business[3](index=3&type=chunk) - End market demand across the rest of the portfolio remains softer overall, with margin impact from higher raw material prices, namely natural gas and sulfur[3](index=3&type=chunk) - Continued progress on 45Q carbon capture tax credits with an additional **$8 million claimed in 2Q25**, supported by a healthy balance sheet for growth and enterprise initiatives[3](index=3&type=chunk) [Second Quarter 2025 Financial Results](index=2&type=section&id=Second%20Quarter%202025%20Financial%20Results) [Consolidated Financial Overview](index=2&type=section&id=Consolidated%20Financial%20Overview) AdvanSix's 2Q25 sales decreased 10% to $410 million due to 8% lower volume and 5% raw material pass-through pricing, partially offset by 3% favorable market-based pricing Summary Second Quarter 2025 Financial Results | Metric ($ in Thousands, Except EPS) | 2Q 2025 | 2Q 2024 | Variance | | :---------------------------------- | :------ | :------ | :------- | | Sales | $410,022 | $453,479 | ($43,457) | | Net Income | 31,371 | 38,927 | (7,556) | | Diluted Earnings Per Share | 1.15 | 1.43 | (0.28) | | Adjusted Diluted Earnings Per Share | 1.24 | 1.55 | (0.31) | | Adjusted EBITDA | 55,675 | 78,141 | (22,466) | | Adjusted EBITDA Margin % | 13.6% | 17.2% | (360) bps | | Cash Flow from Operations | 21,110 | 50,200 | (29,090) | | Capital Expenditures | 28,265 | 33,495 | (5,230) | | Free Cash Flow | (7,155) | 16,705 | (23,860) | - Sales volume decreased approximately **8%** primarily driven by softer demand in key nylon end markets, including engineering plastics applications serving the auto sector[4](index=4&type=chunk) - Raw material pass-through pricing was down **5%** following a net cost decrease in benzene and propylene, while market-based pricing was favorable by **3%** due to continued strength in Plant Nutrients[4](index=4&type=chunk) [Sales by Product Line](index=2&type=section&id=Sales%20by%20Product%20Line) Plant Nutrients sales grew to $156.8 million (38% of total) in 2Q25, while Nylon, Caprolactam, and Chemical Intermediates sales declined Sales by Product Line (2Q 2025 vs 2Q 2024) | Product Line ($ in Thousands) | 2Q 2025 Sales | % of Total (2Q25) | 2Q 2024 Sales | % of Total (2Q24) | | :---------------------------- | :-------------- | :---------------- | :-------------- | :---------------- | | Nylon | $79,503 | 20% | $103,217 | 23% | | Caprolactam | 66,424 | 16% | 81,303 | 18% | | Plant Nutrients | 156,770 | 38% | 147,339 | 32% | | Chemical Intermediates | 107,325 | 26% | 121,620 | 27% | | **Total** | **$410,022** | **100%** | **$453,479** | **100%** | [Profitability and Earnings](index=2&type=section&id=Profitability%20and%20Earnings) 2Q25 Adjusted EBITDA decreased $22.5 million to $55.7 million due to lower Chemical Intermediates pricing and Nylon volume, with Adjusted EPS down $0.31, partially offset by 45Q tax credits - Adjusted EBITDA of **$55.7 million** decreased **$22.5 million** versus the prior year, primarily driven by a decline in Chemical Intermediates pricing, net of raw material costs, and lower Nylon Solutions sales volume[6](index=6&type=chunk) - Adjusted earnings per share of **$1.24** decreased **$0.31** versus the prior year, partially offset by approximately **$8 million**, or **$0.29 per share**, of 45Q carbon capture tax credits[6](index=6&type=chunk)[7](index=7&type=chunk) [Cash Flow and Capital Expenditures](index=3&type=section&id=Cash%20Flow%20and%20Capital%20Expenditures) 2Q25 cash flow from operations decreased $29.1 million to $21.1 million due to lower net income and unwound cash advances, with capital expenditures down $5.2 million to $28.3 million - Cash flow from operations of **$21.1 million** decreased **$29.1 million** versus the prior year, primarily due to lower net income and the unwinding of prior year ammonium sulfate pre-buy cash advances[7](index=7&type=chunk) - Capital expenditures of **$28.3 million** in the quarter decreased **$5.2 million** versus the prior year[7](index=7&type=chunk) [Outlook](index=3&type=section&id=Outlook) [Market Conditions and Strategic Focus](index=3&type=section&id=Market%20Conditions%20and%20Strategic%20Focus) AdvanSix anticipates mixed market conditions with strong Plant Nutrients and weak Nylon Solutions, focusing on cost management, capital prioritization, and optimizing product mix for profitability - The current market backdrop is mixed, with favorable underlying fundamentals in Plant Nutrients contrasted against an extended downturn in Nylon Solutions[9](index=9&type=chunk) - Focus on controllable levers, including a measured and disciplined approach to cost and cash management, tensioned prioritization of base capital investments, and optimizing mix and production output for the most profitable parts of the business[9](index=9&type=chunk) [Key Financial and Operational Expectations](index=3&type=section&id=Key%20Financial%20and%20Operational%20Expectations) AdvanSix expects higher 3Q25 ammonium sulfate pricing YoY, lower acetone spreads YoY, 2025 capital expenditures of $135-145 million, and a $25-30 million pre-tax impact from plant turnarounds - Anticipate higher ammonium sulfate pricing in 3Q25 year-over-year reflecting strong fall fill program; however, typical North American ammonium sulfate seasonality expected to drive 3Q25 sequential domestic pricing decline[12](index=12&type=chunk) - Acetone spread over refinery grade propylene costs anticipated to be lower year-over-year, but expected to remain near cycle averages[12](index=12&type=chunk) - Expect Capital Expenditures of **$135 to $145 million** in 2025, reflecting the planned progression of the SUSTAIN growth program, and refined execution timing to address critical enterprise risk mitigation[12](index=12&type=chunk) - Continue to expect pre-tax income impact of plant turnarounds to be **$25 to $30 million** in 2025 versus approximately **$58 million** in 2024[12](index=12&type=chunk) [Other Corporate Information](index=3&type=section&id=Other%20Corporate%20Information) [Sustainability Initiatives](index=3&type=section&id=Sustainability%20Initiatives) AdvanSix released its 2024 Sustainability Report and received a 2025 EcoVadis Gold rating for corporate social responsibility - Released its 2024 Sustainability Report[10](index=10&type=chunk) - Awarded a 2025 Gold rating for corporate social responsibility from EcoVadis, placing the company in the top three percent of all companies assessed[10](index=10&type=chunk) [Dividend Declaration](index=4&type=section&id=Dividend%20Declaration) The Board of Directors declared a quarterly cash dividend of $0.16 per share, payable August 26, 2025, to stockholders of record on August 12, 2025 - The Board of Directors declared a quarterly cash dividend of **$0.16 per share** on the Company's common stock[13](index=13&type=chunk) - The dividend is payable on August 26, 2025, to stockholders of record as of the close of business on August 12, 2025[13](index=13&type=chunk) [Conference Call Information](index=4&type=section&id=Conference%20Call%20Information) AdvanSix hosted an investor conference call on August 1, 2025, at 9:30 a.m. ET to discuss results, with webcast and replay details provided - AdvanSix discussed its results during an investor conference call on August 1, 2025, starting at 9:30 a.m. ET[14](index=14&type=chunk) - The live webcast and related presentation materials are accessible at http://investors.advansix.com, with a replay available until August 8, 2025[14](index=14&type=chunk) [About AdvanSix](index=4&type=section&id=About%20AdvanSix) AdvanSix is a diversified chemistry company with five U.S. manufacturing facilities, producing essential materials for various end markets including nylon solutions, plant nutrients, and chemical intermediates - AdvanSix is a diversified chemistry company that produces essential materials for customers in a wide variety of end markets and applications[15](index=15&type=chunk) - Operates an integrated value chain of five U.S.-based manufacturing facilities, playing a critical role in global supply chains[15](index=15&type=chunk) - Delivers products in the industries of nylon solutions, plant nutrients, and chemical intermediates, serving markets such as building and construction, fertilizers, agrochemicals, plastics, and electronics[15](index=15&type=chunk) [Contacts](index=5&type=section&id=Contacts) Contact information for media and investors is provided, including names, phone numbers, and email addresses Contacts | Contacts | Media | Investors | | :------- | :---- | :-------- | | Name | Janeen Lawlor | Adam Kressel | | Phone | (973) 526-1615 | (973) 526-1700 | | Email | janeen.lawlor@advansix.com | adam.kressel@advansix.com | [Condensed Consolidated Financial Statements](index=6&type=section&id=Condensed%20Consolidated%20Financial%20Statements) [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, total assets were $1,646.4 million, total liabilities $822.7 million, and total stockholders' equity $823.7 million Condensed Consolidated Balance Sheets (Dollars in thousands) | Metric | June 30, 2025 ($ in Thousands) | December 31, 2024 ($ in Thousands) | | :-------------------------------- | :------------ | :---------------- | | **ASSETS** | | | | Total current assets | $434,176 | $387,116 | | Property, plant and equipment – net | 936,309 | 917,858 | | Total assets | $1,646,402 | $1,594,920 | | **LIABILITIES** | | | | Total current liabilities | $321,067 | $357,103 | | Line of credit – long-term | 240,000 | 195,000 | | Total liabilities | 822,670 | 820,270 | | **STOCKHOLDERS' EQUITY** | | | | Total stockholders' equity | 823,732 | 774,650 | [Condensed Consolidated Statements of Operations](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) For 2Q25, sales were $410 million, net income $31.4 million, and diluted EPS $1.15; for the six months, net income was $54.7 million and diluted EPS $2.01 Condensed Consolidated Statements of Operations (Dollars in thousands, except per share) | Metric | Three Months Ended June 30, 2025 ($ in Thousands, Except EPS) | Three Months Ended June 30, 2024 ($ in Thousands, Except EPS) | Six Months Ended June 30, 2025 ($ in Thousands, Except EPS) | Six Months Ended June 30, 2024 ($ in Thousands, Except EPS) | | :-------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Sales | $410,022 | $453,479 | $787,813 | $790,308 | | Net income | $31,371 | $38,927 | $54,715 | $21,531 | | Diluted Earnings per common share | $1.15 | $1.43 | $2.01 | $0.79 | [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For 2Q25, operating cash flow was $21.1 million, investing cash flow $(31.4) million, and financing cash flow $20.4 million; six-month operating cash flow was $32.6 million Condensed Consolidated Statements of Cash Flows (Dollars in thousands) | Metric | Three Months Ended June 30, 2025 ($ in Thousands) | Three Months Ended June 30, 2024 ($ in Thousands) | Six Months Ended June 30, 2025 ($ in Thousands) | Six Months Ended June 30, 2024 ($ in Thousands) | | :-------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net cash provided by operating activities | $21,110 | $50,200 | $32,553 | $13,998 | | Net cash used for investing activities | $(31,424) | $(35,812) | $(68,218) | $(72,619) | | Net cash provided by (used for) financing activities | $20,416 | $(22,916) | $34,547 | $40,958 | | Net change in cash and cash equivalents | $10,102 | $(8,528) | $(1,118) | $(17,663) | [Non-GAAP Financial Measures Reconciliations](index=9&type=section&id=Non-GAAP%20Financial%20Measures%20Reconciliations) [Reconciliation of Free Cash Flow](index=9&type=section&id=Reconciliation%20of%20Free%20Cash%20Flow) 2Q25 free cash flow was $(7.2) million, a decrease from $16.7 million YoY, while the six-month free cash flow improved to $(29.8) million Free Cash Flow Reconciliation (Dollars in thousands) | Metric | Three Months Ended June 30, 2025 ($ in Thousands) | Three Months Ended June 30, 2024 ($ in Thousands) | Six Months Ended June 30, 2025 ($ in Thousands) | Six Months Ended June 30, 2024 ($ in Thousands) | | :-------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net cash provided by operating activities | $21,110 | $50,200 | $32,553 | $13,998 | | Expenditures for property, plant and equipment | (28,265) | (33,495) | (62,327) | (68,883) | | **Free cash flow** | **$(7,155)** | **$16,705** | **$(29,774)** | **$(54,885)** | - Free cash flow is defined as Net cash provided by operating activities less Expenditures for property, plant and equipment, and is considered useful for evaluating the ability to generate cash flow from business operations and its impact on liquidity[30](index=30&type=chunk) [Reconciliation of Adjusted EBITDA and Adjusted EPS](index=9&type=section&id=Reconciliation%20of%20Adjusted%20EBITDA%20and%20Adjusted%20EPS) 2Q25 Adjusted EBITDA decreased to $55.7 million (13.6% margin) and Adjusted Diluted EPS to $1.24; six-month Adjusted EBITDA increased to $107.3 million (13.6% margin) and Adjusted Diluted EPS to $2.17 Adjusted EBITDA and Adjusted EPS Reconciliation (Dollars in thousands, except per share) | Metric | Three Months Ended June 30, 2025 ($ in Thousands, Except EPS) | Three Months Ended June 30, 2024 ($ in Thousands, Except EPS) | Six Months Ended June 30, 2025 ($ in Thousands, Except EPS) | Six Months Ended June 30, 2024 ($ in Thousands, Except EPS) | | :-------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net income | $31,371 | $38,927 | $54,715 | $21,531 | | Adjusted Net income (non-GAAP) | 33,732 | 42,090 | 59,156 | 26,972 | | **Adjusted EBITDA (non-GAAP)** | **$55,675** | **$78,141** | **$107,301** | **$78,736** | | Sales | $410,022 | $453,479 | $787,813 | $790,308 | | **Adjusted EBITDA Margin (non-GAAP)** | **13.6%** | **17.2%** | **13.6%** | **10.0%** | | **Adjusted EPS - Diluted (non-GAAP)** | **$1.24** | **$1.55** | **$2.17** | **$0.99** | - Non-GAAP financial measures are presented to provide meaningful supplemental information for evaluating operating performance, enhancing understanding of financial performance, and facilitating comparison among fiscal periods and competitors, as they exclude items not considered core to the Company's operations[32](index=32&type=chunk) [Appendix](index=11&type=section&id=Appendix) [Planned Plant Turnaround Schedule](index=11&type=section&id=Planned%20Plant%20Turnaround%20Schedule) The appendix outlines the pre-tax income impact of planned plant turnarounds, with an estimated $25-30 million impact for 2025, primarily from Sulfuric Acid operations Planned Plant Turnaround Schedule (Pre-tax income impact, Dollars in millions) | Year | 1Q | 2Q | 3Q | 4Q | FY | Primary Unit Operation | | :--- | :-- | :-- | :-- | :-- | :-- | :--------------------- | | 2024 | ~$5 | ~$3 | ~$3 | ~$47 | ~$58 | Ammonia | | 2025E | ~$5 | ~$6 | — | $14-$19 | $25-$30 | Sulfuric Acid | - The pre-tax income impact primarily reflects fixed cost absorption, maintenance expense, and the purchase of feedstocks normally manufactured by the Company[37](index=37&type=chunk) - The 2024 impact included an incremental approximately **$17 million** unfavorable impact due to additional required maintenance at the Hopewell plant, leading to reduced production and delayed ramp-up to full operating rates[37](index=37&type=chunk) [Legal Disclaimers](index=4&type=section&id=Legal%20Disclaimers) [Forward-Looking Statements](index=4&type=section&id=Forward-Looking%20Statements) This section contains forward-looking statements subject to various risks and uncertainties, including economic conditions, geopolitical concerns, and supply chain issues, with no obligation to update - The release contains forward-looking statements that involve known and unknown risks, uncertainties, and other factors, many beyond the company's control, which may cause actual results to differ materially[16](index=16&type=chunk) - Risks and uncertainties include general economic and financial conditions, inflationary pressures, geopolitical concerns (e.g., Russia-Ukraine, Israel-Gaza-Iran conflicts), labor market shortages, supply chain issues, raw material price fluctuations, and operational disruptions[16](index=16&type=chunk) - Investors are cautioned not to place undue reliance on these statements, which speak only as of the release date, and the company does not undertake to update or revise any forward-looking statements[17](index=17&type=chunk) [Non-GAAP Measures Explanation](index=5&type=section&id=Non-GAAP%20Measures%20Explanation) Non-GAAP financial measures are provided as supplemental information, not replacements for GAAP, with reconciliations included and a caution on comparability with other companies - Non-GAAP financial measures are intended to supplement, not act as substitutes for, comparable GAAP measures[18](index=18&type=chunk) - Reconciliations of non-GAAP financial measures to GAAP financial measures are provided, and investors are urged to consider carefully the comparable GAAP measures and the reconciliations[18](index=18&type=chunk) - 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[18](index=18&type=chunk)

Group 1 - AdvanSix Inc. (NYSE: ASIX) is trading at low multiples due to the cyclical nature of its revenue and the industry it operates in, which is considered one of the worst in US markets [1] - The market is believed to be mispricing AdvanSix, indicating potential undervaluation [1] Group 2 - The analysis is grounded in a mix of financial education, including CFA studies and valuation books, focusing on fundamental analysis while considering other relevant perspectives [1] - The investment research approach is primarily bottom-up, covering sectors such as utilities, consumer discretionary, consumer staples, REITs, and materials across the Americas [1] - The focus is on stocks with a mid-term return perspective, specifically within a 1 to 3-year timeframe [1]

Sales and Revenue - Sales for the three months ended March 31, 2025, increased by $41.0 million (approximately 12.2%) compared to the prior year period, driven by a 7.4% increase in volume and a 4.8% increase in price [82]. - The company reported a revenue increase of 15% year-over-year, reaching $1.2 billion for Q1 2025 [141]. - The company provided a forward guidance of 10% revenue growth for the next quarter, projecting $1.32 billion in revenue [141]. - New product launches contributed to 25% of total revenue, with significant demand for the latest software solutions [141]. - Market expansion efforts resulted in a 30% increase in sales in the Asia-Pacific region [141]. Costs and Expenses - Costs of goods sold decreased by $9.5 million (approximately 2.9%) for the same period, primarily due to insurance proceeds from the PES supplier shutdown and improved operational performance [83]. - Selling, general and administrative expenses decreased slightly to $23.4 million in Q1 2025, representing 6.2% of sales compared to 7.0% in Q1 2024 [85]. - Cash used for investing activities remained approximately flat at $36.8 million for the three months ended March 31, 2025, compared to the prior year period [115]. Profitability - The gross margin percentage for the three months ended March 31, 2025, was 14.2%, reflecting a 0.9% increase compared to the prior year [83]. - Gross margin percentage increased by approximately 13% for the three months ended March 31, 2025, driven by insurance proceeds (7%), decreased plant costs (5%), and increased sales volume (3%) [84]. - The gross margin improved to 45%, up from 40% in the previous quarter, reflecting better cost management [141]. - Net income for the three months ended March 31, 2025, was $23.3 million, a significant improvement from a net loss of $17.4 million in the prior year period [89]. - Adjusted EBITDA for Q1 2025 was $51.6 million, with an Adjusted EBITDA Margin of 13.7%, compared to only $595,000 and 0.2% in Q1 2024 [93]. Cash Flow and Financing - Cash provided by operating activities increased by $47.6 million for the three months ended March 31, 2025, primarily due to a $40.7 million increase in net income [114]. - Cash provided by financing activities decreased by $49.7 million for the three months ended March 31, 2025, due to net borrowings of $20 million compared to $75 million in the prior year [116]. - The Company had a net change in cash and cash equivalents of $(11.2 million) for the three months ended March 31, 2025 [114]. - The Company had a borrowed balance of $215 million under the Revolving Credit Facility as of March 31, 2025, with available credit of approximately $284 million [113]. - 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 3.75 to 1.00 or less [112]. Investments and Capital Expenditures - Capital expenditures are expected to be between $145 million and $155 million in 2025, up from $134 million in 2024, reflecting ongoing investments in the SUSTAIN growth program [97]. - The Company has the option to increase the Revolving Credit Facility by up to $175 million, subject to certain conditions [108]. - The company invested $50 million in R&D for new technologies aimed at enhancing user experience [141]. Market and Strategic Initiatives - The company is the world's largest single-site producer of ammonium sulfate fertilizer as of March 31, 2025, leveraging its integrated operations at the Hopewell manufacturing facility [74]. - The company’s SUSTAIN program has supported higher ammonium sulfate sales, reflecting favorable North American supply and demand conditions [82]. - The company is exploring potential acquisitions to enhance its product portfolio, with a budget of $100 million allocated for this purpose [141]. - A new strategic partnership was announced, expected to drive a 15% increase in market share over the next year [141]. - The U.S. Department of Commerce initiated a five-year review of anti-dumping orders on acetone imports, which may impact the company's operations [79]. Tax and Compliance - The effective tax rate for Q1 2025 was 19.3%, down from 25.7% in Q1 2024, primarily due to the impact of IRC Section 45Q tax credits [86][87]. - The company continues to monitor potential new tax legislation that could materially impact its financial statements [88]. - The Company was in compliance with all covenants under the Credit Agreement as of March 31, 2025 [112]. Shareholder Returns - The company has repurchased a total of 6,305,561 shares for $193.9 million at an average price of $30.75 per share, with $62.0 million remaining for future repurchases [100]. - Dividends of $0.16 per share were declared for the periods ending May 27, 2025, and March 24, 2025, totaling approximately $4.3 million each [105].

Financial Data and Key Metrics Changes - Sales for the first quarter of 2025 were $378 million, representing a 12% increase year-over-year [11] - Sales volume increased by approximately 7%, driven by improved operational performance and higher granular ammonium sulfate sales [11] - Adjusted EBITDA was $52 million with an adjusted EBITDA margin of 13.7% [12] - Adjusted earnings per share increased to $0.93, up $1.49 compared to the prior year [12] - Free cash flow was negative $23 million, an improvement of $49 million year-over-year [13] Business Line Data and Key Metrics Changes - In the Plant Nutrients segment, ammonium sulfate prices increased by 34% year-over-year, supported by higher energy costs and tighter supply-demand conditions [18] - The nylon business experienced a slow start but saw orders and pricing pick up, with stable domestic demand amid macroeconomic factors [21] - In Chemical Intermediates, acetone prices declined sequentially and year-over-year, but remained above cycle averages [24] Market Data and Key Metrics Changes - The North American corn planting season is expected to reach 95 million acres, supporting strong nutrient demand [19] - Domestic nylon demand remained stable, but global oversupply conditions continued to pressure pricing [22] - Acetone demand is expected to improve in the second quarter following downstream turnarounds and seasonal improvements [25] Company Strategy and Development Direction - The company is focused on operational excellence and maintaining high utilization rates to capture competitive cost advantages [6] - Continued investment in growth and enterprise initiatives is aimed at sustainably improving through-cycle profitability [9] - The company is well-positioned as a U.S.-based manufacturer aligned with domestic supply chains and energy markets [10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the underlying industry fundamentals supporting nutrient demand despite higher raw material prices [19] - The company is navigating a dynamic environment while focusing on cash flow management and disciplined investments [30] - Management highlighted the importance of maintaining a healthy balance sheet to enable strategic capital allocation [30] Other Important Information - The company received approximately $39 million in aggregated insurance proceeds related to the 2019 PES cumene supplier shutdown [9] - Capital expenditures for 2025 are forecasted to be between $145 million and $155 million, with a focus on maintaining operational safety and sustainability [16] Q&A Session Summary Question: Tactical moves in response to uncertainty - Management indicated that they are focused on delivering for customers and right-sizing inventory buffers without increasing inventory levels [38][39] Question: Assurance of sulfur supply - Management stated that they have a broad supply mix for sulfur and anticipate that supply will be ample for their needs [42] Question: Outlook for ammonium sulfate post-spring demand - Management confirmed a robust order book and expects record volume for the fertilizer year, with a focus on domestic demand growth [66] Question: Nylon market share and tariffs - Management noted that while tariffs could lead to higher costs, they are monitoring the engineering plastic demand closely and focusing on execution [61][62] Question: CapEx and acquisition opportunities - Management expressed interest in evaluating inorganic opportunities as they expect to bring base CapEx back in line after completing larger projects [69]

Financial Data and Key Metrics Changes - Sales for the first quarter of 2025 were $378 million, representing a 12% increase year-over-year, with sales volume up approximately 7% driven by improved operational performance and higher granular ammonium sulfate sales [9][10] - Adjusted EBITDA was $52 million with an adjusted EBITDA margin of 13.7%, while adjusted earnings per share increased to $0.93, up $1.49 from the prior year [10][11] - Free cash flow was negative $23 million, an improvement of $49 million compared to the prior year, with cash flow from operations increasing by $48 million [11][12] Business Line Data and Key Metrics Changes - In the Plant Nutrients segment, nitrogen fertilizer pricing increased amid higher energy costs, with ammonium sulfate prices up 34% year-over-year [16][17] - The nylon business experienced a slow start but saw orders and pricing pick up, supported by lower benzene costs [20][21] - Chemical Intermediates faced declining acetone prices due to higher input costs, but demand is expected to improve as downstream turnarounds complete [23][24] Market Data and Key Metrics Changes - The North American corn planting season is expected to reach 95 million acres, supporting strong demand for ammonium sulfate [18][19] - Domestic nylon demand remained stable, but global oversupply conditions continue to pressure pricing [22][23] - The chemical intermediates market is mixed, with demand across ag chemicals, electronics, and European paints and coatings remaining varied [24] Company Strategy and Development Direction - The company is focused on operational excellence and maintaining high utilization rates to capture competitive cost advantages [6][7] - Continued investment in growth and enterprise initiatives is aimed at sustainably improving through-cycle profitability [7][14] - The company is well-positioned as a U.S.-based manufacturer aligned with domestic supply chains and energy markets [8][25] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating the current dynamic environment and emphasized the importance of cash flow management [28] - The company is monitoring potential impacts on demand across end markets and is focused on delivering on controllable factors [28] - There is optimism regarding the growth prospects in the Plant Nutrients business, particularly with the anticipated increase in corn acreage [19][20] Other Important Information - The company received approximately $39 million in insurance proceeds related to the 2019 PES cumene supplier shutdown, with a final settlement of $26 million in Q1 2025 [7][10] - The company is maintaining a healthy balance sheet and ample liquidity to support reinvestment and growth [13][14] Q&A Session Summary Question: Tactical moves in response to uncertainty - Management indicated that they are focused on delivering for customers and managing inventory levels without significantly increasing them [35][36] Question: Concerns about sulfur supply - Management stated that supply-demand conditions for sulfur are balanced, and they have a broad vendor mix to ensure supply [39] Question: Outlook for ammonium sulfate post-spring demand - Management confirmed that they are focused on maximizing granular sales during the current season and will evaluate fundamentals as the season progresses [41][42] Question: Adjusting marketing emphasis for nylon amid demand weakness - Management clarified that they are focused on serving domestic demand and optimizing their product mix to navigate the current oversupply environment [44][45] Question: Patent infringement proceedings regarding EZ Block additives - Management provided an overview of the patent protection for their EZ Block product and the ongoing legal proceedings [49][50] Question: Market share opportunities due to tariffs on nylon - Management noted that while tariffs could impact costs, they are monitoring the situation closely and focusing on execution for the remainder of the year [58][60] Question: Ammonium sulfate volume expectations - Management anticipates a record volume for the fertilizer year, driven by robust planting and application rates [63][64] Question: CapEx and acquisition opportunities - Management indicated that they are looking to align CapEx with organic opportunities while evaluating potential inorganic opportunities as well [66]