AdvanSix(ASIX) - 2025 Q2 - Quarterly Results

Executive Summary 2Q 2025 Highlights 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 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] - 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] - 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] Second Quarter 2025 Financial Results Consolidated Financial Overview 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] - 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] Sales by Product Line 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 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] - 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][7] Cash Flow and Capital Expenditures 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] - Capital expenditures of $28.3 million in the quarter decreased $5.2 million versus the prior year[7] Outlook Market Conditions and Strategic Focus 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] - 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] Key Financial and Operational Expectations 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] - Acetone spread over refinery grade propylene costs anticipated to be lower year-over-year, but expected to remain near cycle averages[12] - 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] - 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] Other Corporate Information Sustainability Initiatives AdvanSix released its 2024 Sustainability Report and received a 2025 EcoVadis Gold rating for corporate social responsibility - Released its 2024 Sustainability Report[10] - Awarded a 2025 Gold rating for corporate social responsibility from EcoVadis, placing the company in the top three percent of all companies assessed[10] Dividend Declaration 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] - The dividend is payable on August 26, 2025, to stockholders of record as of the close of business on August 12, 2025[13] Conference Call Information 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] - The live webcast and related presentation materials are accessible at http://investors.advansix.com, with a replay available until August 8, 2025[14] About AdvanSix 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] - Operates an integrated value chain of five U.S.-based manufacturing facilities, playing a critical role in global supply chains[15] - 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] 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 Condensed Consolidated Balance Sheets 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 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 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 Reconciliation of Free Cash Flow 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] Reconciliation of Adjusted EBITDA and Adjusted EPS 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] Appendix Planned Plant Turnaround Schedule 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] - 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] Legal Disclaimers Forward-Looking Statements 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] - 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] - 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] Non-GAAP Measures Explanation 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] - 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] - 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]