AdvanSix(ASIX) - 2025 Q2 - Quarterly Report

PART I. FINANCIAL INFORMATION This section presents the company's unaudited condensed consolidated financial statements and management's discussion and analysis for the period ITEM 1. FINANCIAL STATEMENTS This section presents AdvanSix Inc.'s unaudited condensed consolidated financial statements and detailed notes Condensed Consolidated Statements of Operations 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 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 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 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 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] - The company repurchased 53,432 shares of treasury stock in Q1 2025 and 2,538 shares in Q2 2025[17] Notes to Condensed Consolidated Financial Statements These notes provide detailed explanations and disclosures supporting the condensed consolidated financial statements 1. Organization, Operations and Basis of Presentation 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] - 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] - 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] 2. Recent Accounting Pronouncements 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] - 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] 3. Revenues 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] - Shaw Industries Group, Inc. is the largest customer, with sales to Shaw representing 9% of total sales for Q2 2025[35] | 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 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 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 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] 7. Leases 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 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] | 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] 9. Commitments and Contingencies 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] - 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] 10. Income Taxes 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][62] 11. Supplier Finance Programs 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] 12. Segment Related Information 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] - The Chief Operating Decision Maker (CODM) evaluates performance and allocates resources based on consolidated net income, total assets, and capital expenditures[67][68] | 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 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] ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS This section analyzes AdvanSix's financial condition and operational results, covering sales, costs, and liquidity Note Regarding Forward-Looking Statements 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] - Risks include general economic conditions, inflation, tariffs, interest rates, labor shortages, supply chain issues, geopolitical conflicts, cybersecurity attacks, and raw material price fluctuations[74] Business Overview This section provides an overview of AdvanSix's core business segments: Nylon Solutions, Plant Nutrients, and Chemical Intermediates Nylon Solutions 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] - The Hopewell, VA facility is one of the world's largest single-site producers of caprolactam[79] - 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] Plant Nutrients 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] - Ammonium sulfate fertilizer sales exhibit quarterly seasonality, with demand and pricing typically strongest in the first half of the year in North America[78] Chemical Intermediates 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] - Acetone prices are influenced by supply and demand dynamics and underlying propylene input costs[81] Recent Developments 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] - 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] - 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] Results of Operations This section analyzes AdvanSix's financial performance, including sales, costs, expenses, and net income 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] - 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] Costs of Goods Sold 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] - 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] Selling, General and Administrative Expenses 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][96] Income Tax Expense 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][98] - 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] Net Income 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 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 This section discusses AdvanSix's liquidity sources, capital expenditures, dividends, and credit facilities 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][119] - 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][125] - 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] - The company has repurchased 6,308,099 shares for $194.0 million life-to-date, with $62.0 million remaining under the current authorization as of June 30, 2025[113] Dividends This section details AdvanSix's quarterly cash dividend payments and declaration history - The Company commenced quarterly cash dividends on September 28, 2021[116] | Date of Announcement | Dividend per Share | Total Approximate Dividend Amount ($M) | | :------------------- | :----------------- | :------------------------------------- | | 8/1/2025 | $0.16 | $4.3 | | 5/2/2025 | $0.16 | $4.3 | | 2/21/2025 | $0.16 | $4.3 | Credit Agreement 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][121] - 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] - 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] - 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] Cash Flow Summary 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] - 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] Capital Expenditures 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] Critical Accounting Policies and Estimates 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] Recent Accounting Pronouncements 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] ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 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] - 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] ITEM 4. CONTROLS AND PROCEDURES This section evaluates AdvanSix's disclosure controls and procedures, confirming effectiveness and no material changes Evaluation of Disclosure Controls and Procedures 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] Changes in Internal Control over Financial Reporting 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] - 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] PART II. OTHER INFORMATION This section provides additional information not covered in the financial statements, including legal, risk, and equity matters ITEM 1. LEGAL PROCEEDINGS 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] ITEM 1A. RISK FACTORS 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] ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS 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] - During Q2 2025, 2,538 shares were purchased to cover tax withholding obligations, with no additional shares purchased under the publicly announced plan[145][147] - As of June 30, 2025, approximately $62.0 million remained available for share repurchases under the authorized program[147] ITEM 5. OTHER INFORMATION 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] ITEM 6. EXHIBITS 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] 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]