August 2, 2024 2Q 2024 Earnings Presentation Forward Looking Statements This presentation contains certain statements that may be deemed "forward-looking statements" within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of historical fact, that address activities, events or developments that our management intends, expects, projects, believes or anticipates will or may occur in the future are forward-looking statements. Forward-looking st ...

Company Performance - AdvanSix reported quarterly earnings of $1.55 per share, exceeding the Zacks Consensus Estimate of $1.20 per share, and up from $1.25 per share a year ago, representing an earnings surprise of 29.17% [1] - The company posted revenues of $453.48 million for the quarter ended June 2024, surpassing the Zacks Consensus Estimate by 6.25% and increasing from $427.94 million year-over-year [1] - Over the last four quarters, AdvanSix has surpassed consensus EPS estimates two times and revenue estimates two times [1] Future Outlook - The sustainability of AdvanSix's stock price movement will depend on management's commentary during the earnings call and future earnings expectations [2] - The current consensus EPS estimate for the upcoming quarter is $0.49 on revenues of $371.05 million, and for the current fiscal year, it is $1.50 on revenues of $1.56 billion [4] - The estimate revisions trend for AdvanSix is mixed, resulting in a Zacks Rank 3 (Hold), indicating expected performance in line with the market [4] Industry Context - The Chemical - Specialty industry, to which AdvanSix belongs, is currently in the top 33% of over 250 Zacks industries, suggesting a favorable outlook compared to the bottom 50% [5] - Another company in the same industry, Arcadium, is expected to report quarterly earnings of $0.05 per share, reflecting a year-over-year decline of 90.2%, with revenues projected at $253.63 million, up 7.6% from the previous year [5][6]

Financial Performance - Sales for Q2 2024 were $453 million, a 6% increase compared to the prior year, driven by a 5% increase in volume and 1% favorable net pricing[2]. - Net income reached $38.9 million, up $6.2 million from the previous year, with adjusted earnings per share of $1.55, a 24% increase year-over-year[2][6]. - Adjusted EBITDA was $78.1 million, reflecting a 19% increase from the prior year, with an adjusted EBITDA margin of 17.2%, up 180 basis points[2][3]. - Total sales for the three months ended June 30, 2024, were $453,479,000, an increase of 5.8% compared to $427,940,000 for the same period in 2023[19]. - Net income for the three months ended June 30, 2024, was $38,927,000, representing a 19% increase from $32,728,000 in the prior year[19]. - Basic earnings per share for the three months ended June 30, 2024, were $1.45, up from $1.19 for the same period in 2023, reflecting a 21.8% increase[19]. - Adjusted Net Income for the three months ended June 30, 2024, was $42,090 million, compared to $35,198 million in the prior year, reflecting a 19% increase[28]. - Adjusted EBITDA for the three months ended June 30, 2024, was $78,141 million, compared to $65,785 million in the same period last year, marking a 19% increase[27]. - Adjusted EBITDA Margin improved to 17.2% for the three months ended June 30, 2024, up from 15.4% in the same quarter of 2023[27]. - Basic EPS for the three months ended June 30, 2024, was $1.45, an increase from $1.19 in the same period of 2023, representing a growth of 22%[28]. - Diluted EPS for the three months ended June 30, 2024, was $1.43, compared to $1.16 in the prior year, reflecting a 23% increase[28]. - Adjusted EPS - Basic for the three months ended June 30, 2024, was $1.57, up from $1.28 in the same period of 2023, reflecting a growth of 23%[28]. Cash Flow and Capital Expenditures - Cash flow from operations was $50.2 million, an increase of 43% year-over-year, while free cash flow was $16.7 million, up $1.0 million[2][6]. - Capital expenditures for the quarter were $33.5 million, an increase of $14.2 million compared to the prior year, reflecting planned spending on maintenance and growth projects[2][6]. - Capital expenditures for 2024 are expected to be between $140 million and $150 million, focusing on risk mitigation and growth projects[7]. - Free cash flow for the three months ended June 30, 2024, was $16,705,000, compared to $15,713,000 for the same period in 2023, an increase of 6.3%[25]. Shareholder Returns - The company returned $8 million to shareholders through dividends and stock repurchases in Q2 2024[2]. - The Board of Directors declared a quarterly cash dividend of $0.16 per share, payable on August 27, 2024[8]. Assets and Liabilities - Total current assets decreased to $378,592,000 as of June 30, 2024, down from $419,804,000 at December 31, 2023, a decline of 9.8%[16]. - Total liabilities decreased to $731,353,000 as of June 30, 2024, compared to $756,783,000 at December 31, 2023, a reduction of 3.4%[16]. - Cash and cash equivalents at the end of the period were $12,105,000, down from $29,768,000 at the end of 2023, a decrease of 59.3%[16]. - The company’s retained earnings increased to $617,723,000 as of June 30, 2024, up from $605,067,000 at December 31, 2023, reflecting a growth of 2.7%[16]. Market Outlook - The company anticipates higher ammonium sulfate pricing in Q3 2024 due to robust demand, although a sequential pricing decline is expected due to typical seasonality[7]. - The company is positioned for favorable second-half performance, supported by a constructive global acetone supply and demand environment[7]. Expenses - Total costs and expenses for the three months ended June 30, 2024, were $401,407,000, up from $384,657,000 in the same period last year, an increase of 4.3%[19]. - The company reported a net cash provided by operating activities of $50,200,000 for the three months ended June 30, 2024, compared to $35,004,000 for the same period in 2023, an increase of 43.4%[22]. - The company reported an interest expense of $3,514 million for the three months ended June 30, 2024, compared to $1,954 million in the same period last year, indicating a significant increase[27].

Core Viewpoint - AdvanSix (ASIX) is identified as a strong value stock, currently holding a Zacks Rank of 2 (Buy) and a Value grade of A, indicating it is likely undervalued based on key financial metrics [2][3]. Financial Metrics - ASIX has a Forward P/E ratio of 9.79, significantly lower than the industry average of 23.01, suggesting it is undervalued compared to its peers [2]. - Over the past 52 weeks, ASIX's Forward P/E has fluctuated between a high of 16.05 and a low of 6.08, with a median of 9.34, indicating volatility but also potential for value [2]. - The P/CF ratio for ASIX stands at 9.70, which is attractive compared to the industry average of 22.57, further supporting the notion of undervaluation [2]. - In the past 12 months, ASIX's P/CF has ranged from a high of 10.29 to a low of 3.95, with a median of 5.58, highlighting its solid cash flow outlook [2]. Investment Outlook - The combination of ASIX's favorable financial metrics and strong earnings outlook positions it as a compelling value investment opportunity at this time [3].

Core Insights - The article emphasizes the importance of value investing, which focuses on identifying undervalued companies in the market [1] - Zacks has developed a Style Scores system to help investors find stocks with specific traits, particularly in the Value category [1] Company Overview: AdvanSix (ASIX) - AdvanSix currently holds a Zacks Rank of 1 (Strong Buy) and a Value grade of A, indicating strong investment potential [2] - The stock has a P/E ratio of 7.71, significantly lower than the industry average P/E of 22.37 [2] - Over the past 52 weeks, ASIX's Forward P/E has fluctuated between a high of 16.05 and a low of 6.08, with a median of 9.19 [2] - ASIX has a P/CF ratio of 7.28, which is also lower than the industry's average P/CF of 21.94, suggesting it may be undervalued [2] - The P/CF ratio for ASIX has ranged from a high of 10.29 to a low of 3.95 over the past year, with a median of 5.56 [2] Investment Outlook - The combination of ASIX's strong Value grade and favorable earnings outlook suggests that the stock is likely undervalued at present [3]

Core Viewpoint - Five stocks have been added to the Zacks Rank 1 (Strong Buy) List, indicating strong potential for investment based on recent earnings estimate increases [1]. Group 1: Company Summaries - **AdvanSix Inc. (ASIX)**: This manufacturer of polymer resins has seen a 5.6% increase in the Zacks Consensus Estimate for its current year earnings over the last 60 days [1]. - **SM Energy Company (SM)**: This independent crude oil and natural gas company has experienced an 11.4% increase in the Zacks Consensus Estimate for its current year earnings over the last 60 days [1]. - **Eldorado Gold Corporation (EGO)**: This mining and exploration company has seen a 10.1% increase in the Zacks Consensus Estimate for its current year earnings over the last 60 days [1]. - **Primo Water Corporation (PRMW)**: This pure-play water solutions company has experienced nearly an 8% increase in the Zacks Consensus Estimate for its current year earnings over the last 60 days [1]. - **Telephone and Data Systems, Inc. (TDS)**: This telecommunications company has seen a significant 68% increase in the Zacks Consensus Estimate for its current year earnings over the last 60 days [1].

Group 1 - Eldorado Gold Corporation (EGO) has a Zacks Rank 1 and a 10.1% increase in the Zacks Consensus Estimate for current year earnings over the last 60 days [1] - Eldorado Gold's price-to-earnings ratio (P/E) is 14.48, compared to 22.54 for the S&P 500, and it has a Value Score of B [1] - SM Energy Company (SM) also holds a Zacks Rank 1 with an 11.4% increase in the Zacks Consensus Estimate for current year earnings over the last 60 days [1] Group 2 - SM Energy has a price-to-earnings ratio (P/E) of 6.28, which is lower than the industry average of 7.50, and it possesses a Value Score of B [1] - AdvanSix Inc. (ASIX) carries a Zacks Rank 1 and has seen a 5.6% increase in the Zacks Consensus Estimate for current year earnings over the last 60 days [2] - AdvanSix has a price-to-earnings ratio (P/E) of 14.23, which is slightly lower than the industry average of 14.50, and it also has a Value Score of B [2]

Group 1 - AdvanSix Inc. (ASIX) has seen a 5.6% increase in the Zacks Consensus Estimate for its current year earnings over the last 60 days and offers a dividend yield of 3%, significantly higher than the industry average of 0.9% [1] - Calavo Growers, Inc. (CVGW) has experienced a 10.6% increase in the Zacks Consensus Estimate for its current year earnings over the last 60 days and provides a dividend yield of 1.8%, compared to the industry average of 0.0% [1] - SM Energy Company (SM) has a Zacks Rank 1 and has seen an 11.4% increase in the Zacks Consensus Estimate for its current year earnings over the last 60 days [1]

Company Overview - AdvanSix Inc. (ASIX) is currently experiencing significant activity in the options market, particularly with the Sep 20, 2024 $12.50 Call option showing high implied volatility, indicating potential for a major price movement [1]. Implied Volatility Insights - Implied volatility reflects market expectations for future price movements, suggesting that investors anticipate a significant change in AdvanSix's stock price, possibly due to an upcoming event [2]. Analyst Sentiment - AdvanSix holds a Zacks Rank 3 (Hold) within the Chemical - Specialty industry, which is positioned in the bottom 36% of the Zacks Industry Rank. Over the past 60 days, three analysts have raised their earnings estimates for the current quarter, increasing the Zacks Consensus Estimate from earnings of 84 cents per share to $1.19 [3]. - The high implied volatility may indicate a developing trading opportunity, as options traders often seek to sell premium on options with elevated implied volatility, aiming to benefit from time decay [3].

Core Viewpoint - The article emphasizes the importance of value investing and highlights AdvanSix (ASIX) as a strong candidate for value investors due to its favorable metrics and strong Zacks Rank [1][2][3] Company Metrics - AdvanSix (ASIX) holds a Zacks Rank of 1 (Strong Buy) and a Value grade of A, indicating strong potential for value investors [2] - The stock is currently trading with a P/E ratio of 9.19, significantly lower than the industry average of 22.84 [2] - Over the past 12 months, ASIX's Forward P/E has fluctuated between a high of 16.05 and a low of 6.08, with a median of 8.84 [2] - ASIX has a P/CF ratio of 7.93, which is also lower than the industry's average P/CF of 22.12, suggesting it is undervalued based on cash flow [2] - The P/CF for ASIX has ranged from a high of 10.29 to a low of 3.95 over the last year, with a median of 5.33 [2] Investment Outlook - The combination of ASIX's strong earnings outlook and favorable valuation metrics positions it as an impressive value stock at the moment [3]