AdvanSix Announces Third Quarter 2024 Financial Results
Sales of
Earnings Per Share of
Cash Flow from Operations of
Awarded
Appointed
Third Quarter 2024 Summary
- Sales up approximately 23% versus prior year driven by an approximately 11% increase in volume, 8% higher raw material pass-through pricing, and 5% favorable impact of market-based pricing
-
Net Income of
$22.3 million , an increase of$30.2 million versus the prior year -
Adjusted EBITDA of
$53.2 million , an increase of$45.8 million versus the prior year - Adjusted EBITDA Margin of 13.4%, up 1,110 bps versus the prior year
-
Cash Flow from Operations of
$57.3 million , an increase of$36.4 million versus the prior year -
Capital Expenditures of
$30.5 million , an increase of$5.4 million versus the prior year -
Free Cash Flow of
$26.8 million , an increase of$31.1 million versus the prior year
“In the third quarter,
Summary third quarter 2024 financial results for the Company are included below:
($ in Thousands, Except Earnings Per Share) |
3Q 2024 |
|
3Q 2023 |
|
Sales |
|
|
|
|
Net Income (Loss) |
22,266 |
|
(7,977) |
|
Diluted Earnings Per Share |
|
|
( |
|
Adjusted Diluted Earnings Per Share (1) |
|
|
( |
|
Adjusted EBITDA (1) |
53,161 |
|
7,321 |
|
Adjusted EBITDA Margin % (1) |
13.4% |
|
2.3% |
|
Cash Flow from Operations |
57,250 |
|
20,802 |
|
Free Cash Flow (1)(2) |
26,760 |
|
(4,329) |
|
(1) See “Non-GAAP Measures” included in this press release for non-GAAP reconciliations |
||||
(2) Net cash provided by operating activities less capital expenditures |
Sales of
Sales by product line and approximate percentage of total sales are included below:
($ in Thousands) |
3Q 2024 |
|
3Q 2023 (1) |
|||||||
|
Sales |
|
% of Total |
|
Sales |
|
% of Total |
|||
Nylon |
$ |
93,693 |
|
24% |
|
$ |
86,056 |
|
27% |
|
Caprolactam |
|
76,338 |
|
19% |
|
|
68,795 |
|
21% |
|
Ammonium Sulfate |
|
107,668 |
|
27% |
|
|
79,067 |
|
24% |
|
Chemical Intermediates |
|
120,488 |
|
30% |
|
|
88,989 |
|
28% |
|
Total |
$ |
398,187 |
|
100% |
|
$ |
322,907 |
|
100% |
|
(1) Previously reported amounts have been updated for a reclassification of certain products representing approximately |
Adjusted EBITDA of
Adjusted earnings per share of
Cash flow from operations of
Outlook
- Ammonium sulfate order book sold through 4Q24 amid continued strong sulfur nutrition demand
- Expect balanced to tight global acetone supply and demand conditions
- Expect North American nylon industry spreads to modestly improve amid stable end market demand
-
Expect Capital Expenditures to now be
$135 to$140 million in 2024, reflecting refined execution timing to address critical enterprise risk mitigation and growth projects including our SUSTAIN (SustainableU.S. Sulfate to Accelerate Increased Nutrition) program -
As a result of additional required maintenance and a delayed ramp to full operating rates at our
Hopewell site following our planned plant turnaround, we expect an incremental approximately$17 million unfavorable impact to pre-tax income in 4Q24, inclusive of$10 million related to fixed cost absorption and higher maintenance expense, and$7 million of lost sales; no impact on 3Q24 results
Manufacturing plant turnarounds are a critical enabler for driving operational excellence, safety and compliance across the
“2024 has truly been a year of contrasts. On the positive side, we have consistently demonstrated our agility and focus by deploying the right strategies and actions to achieve commercial success while advancing targeted growth initiatives. On the opportunity side, while we have proven ability to navigate and recover from operational difficulties, our manufacturing execution this year has not met our expectations. Operational excellence is a key enabler to our overall performance, with meaningful performance upside for us to capture, and we take all learnings for sustained continuous improvement with rigor and discipline. Despite the unfavorable impact of the extended turnaround in the fourth quarter, we are pleased to have returned to our targeted utilization rates and our outlook for the remainder of the year and 2025 continues to be supported by our diverse product portfolio, advantaged business model and favorable industry dynamics. We remain confident in the growth prospects for
Dividend
The Company's Board of Directors declared a quarterly cash dividend of
Conference Call Information
About
Forward Looking Statements
This release contains certain statements that may be deemed “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of historical fact, that address activities, events or developments that our management intends, expects, projects, believes or anticipates will or may occur in the future are forward-looking statements. Forward-looking statements may be identified by words such as "expect," "anticipate," "estimate," “outlook,” "project," "strategy," "intend," "plan," "target," "goal," "may," "will," "should" and "believe" and other variations or similar terminology and expressions. Although we believe forward-looking statements are based upon reasonable assumptions, such statements involve known and unknown risks, uncertainties and other factors, many of which are beyond our control and difficult to predict, which may cause the actual results or performance of the Company to be materially different from any future results or performance expressed or implied by such forward-looking statements. Such risks and uncertainties include, but are not limited to: general economic and financial conditions in the
Non-GAAP Financial Measures
This press release includes certain non-GAAP financial measures intended to supplement, not to act as substitutes for, comparable GAAP measures. Reconciliations of non-GAAP financial measures to GAAP financial measures are provided in this press release. Investors are urged to consider carefully the comparable GAAP measures and the reconciliations to those measures provided. Non-GAAP measures in this press release may be calculated in a way that is not comparable to similarly-titled measures reported by other companies.
|
||||||||
Condensed Consolidated Balance Sheets |
||||||||
(Unaudited) |
||||||||
(Dollars in thousands, except share and per share amounts) |
||||||||
|
|
|
|
|||||
ASSETS |
|
|
|
|||||
Current assets: |
|
|
|
|||||
Cash and cash equivalents |
$ |
17,298 |
|
|
$ |
29,768 |
|
|
Accounts and other receivables – net |
|
149,058 |
|
|
|
165,393 |
|
|
Inventories – net |
|
213,434 |
|
|
|
211,831 |
|
|
Taxes receivable |
|
375 |
|
|
|
1,434 |
|
|
Other current assets |
|
15,608 |
|
|
|
11,378 |
|
|
Total current assets |
|
395,773 |
|
|
|
419,804 |
|
|
|
|
|
|
|||||
Property, plant and equipment – net |
|
892,574 |
|
|
|
852,642 |
|
|
Operating lease right-of-use assets |
|
90,740 |
|
|
|
95,805 |
|
|
|
|
56,192 |
|
|
|
56,192 |
|
|
Intangible assets |
|
43,906 |
|
|
|
46,193 |
|
|
Other assets |
|
31,050 |
|
|
|
25,384 |
|
|
Total assets |
$ |
1,510,235 |
|
|
$ |
1,496,020 |
|
|
|
|
|
|
|||||
LIABILITIES |
|
|
|
|||||
Current liabilities: |
|
|
|
|||||
Accounts payable |
$ |
207,272 |
|
|
$ |
259,068 |
|
|
Accrued liabilities |
|
55,783 |
|
|
|
44,086 |
|
|
Income taxes payable |
|
435 |
|
|
|
8,033 |
|
|
Operating lease liabilities – short-term |
|
30,135 |
|
|
|
32,053 |
|
|
Deferred income and customer advances |
|
1,517 |
|
|
|
15,678 |
|
|
Total current liabilities |
|
295,142 |
|
|
|
358,918 |
|
|
|
|
|
|
|||||
Deferred income taxes |
|
154,690 |
|
|
|
151,059 |
|
|
Operating lease liabilities – long-term |
|
60,793 |
|
|
|
63,961 |
|
|
Line of credit – long-term |
|
215,000 |
|
|
|
170,000 |
|
|
Postretirement benefit obligations |
|
7,048 |
|
|
|
3,660 |
|
|
Other liabilities |
|
11,154 |
|
|
|
9,185 |
|
|
Total liabilities |
|
743,827 |
|
|
|
756,783 |
|
|
|
|
|
|
|||||
STOCKHOLDERS' EQUITY |
|
|
|
|||||
Common stock, par value |
|
330 |
|
|
|
326 |
|
|
Preferred stock, par value |
|
— |
|
|
|
— |
|
|
|
|
(63 |
) |
|
|
(58 |
) |
|
Additional paid-in capital |
|
134,735 |
|
|
|
138,046 |
|
|
Retained earnings |
|
635,609 |
|
|
|
605,067 |
|
|
Accumulated other comprehensive loss |
|
(4,203 |
) |
|
|
(4,144 |
) |
|
Total stockholders' equity |
|
766,408 |
|
|
|
739,237 |
|
|
Total liabilities and stockholders' equity |
$ |
1,510,235 |
|
|
$ |
1,496,020 |
|
|
||||||||||||||
Condensed Consolidated Statements of Operations |
||||||||||||||
(Unaudited) |
||||||||||||||
(Dollars in thousands, except share and per share amounts) |
||||||||||||||
|
Three Months Ended
|
|
Nine Months Ended
|
|||||||||||
|
2024 |
|
2023 |
|
2024 |
|
2023 |
|||||||
Sales |
$ |
398,187 |
|
$ |
322,907 |
|
|
$ |
1,188,495 |
|
$ |
1,151,391 |
|
|
|
|
|
|
|
|
|
|
|||||||
Costs, expenses and other: |
|
|
|
|
|
|
|
|||||||
Costs of goods sold |
|
340,885 |
|
|
314,785 |
|
|
|
1,046,860 |
|
|
1,004,844 |
|
|
Selling, general and administrative expenses |
|
24,265 |
|
|
21,585 |
|
|
|
72,290 |
|
|
70,711 |
|
|
Interest expense, net |
|
2,924 |
|
|
2,075 |
|
|
|
9,137 |
|
|
5,296 |
|
|
Other non-operating (income) expense, net |
|
368 |
|
|
(5,485 |
) |
|
|
1,808 |
|
|
(6,918 |
) |
|
Total costs, expenses and other |
|
368,442 |
|
|
332,960 |
|
|
|
1,130,095 |
|
|
1,073,933 |
|
|
|
|
|
|
|
|
|
|
|||||||
Income (loss) before taxes |
|
29,745 |
|
|
(10,053 |
) |
|
|
58,400 |
|
|
77,458 |
|
|
Income tax expense (benefit) |
|
7,479 |
|
|
(2,076 |
) |
|
|
14,603 |
|
|
17,753 |
|
|
Net income (loss) |
$ |
22,266 |
|
$ |
(7,977 |
) |
|
$ |
43,797 |
|
$ |
59,705 |
|
|
|
|
|
|
|
|
|
|
|||||||
Earnings per common share |
|
|
|
|
|
|
|
|||||||
Basic |
$ |
0.83 |
|
$ |
(0.29 |
) |
|
$ |
1.63 |
|
$ |
2.18 |
|
|
Diluted |
$ |
0.82 |
|
$ |
(0.29 |
) |
|
$ |
1.61 |
|
$ |
2.12 |
|
|
|
|
|
|
|
|
|
|
|||||||
Weighted average common shares outstanding |
|
|
|
|
|
|
|
|||||||
Basic |
|
26,790,752 |
|
|
27,209,521 |
|
|
|
26,836,114 |
|
|
27,433,851 |
|
|
Diluted |
|
27,204,714 |
|
|
27,209,521 |
|
|
|
27,209,680 |
|
|
28,193,721 |
|
|
||||||||||||||||
Condensed Consolidated Statements of Cash Flows |
||||||||||||||||
(Unaudited) |
||||||||||||||||
(Dollars in thousands) |
||||||||||||||||
|
Three Months Ended
|
|
Nine Months Ended
|
|||||||||||||
|
2024 |
|
2023 |
|
2024 |
|
2023 |
|||||||||
Cash flows from operating activities: |
|
|
|
|
|
|
|
|||||||||
Net income (loss) |
$ |
22,266 |
|
|
$ |
(7,977 |
) |
|
$ |
43,797 |
|
|
$ |
59,705 |
|
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities: |
|
|
|
|
|
|
|
|||||||||
Depreciation and amortization |
|
18,933 |
|
|
|
18,379 |
|
|
|
57,197 |
|
|
|
54,337 |
|
|
Loss on disposal of assets |
|
154 |
|
|
|
371 |
|
|
|
415 |
|
|
|
939 |
|
|
Deferred income taxes |
|
2,887 |
|
|
|
(2,825 |
) |
|
|
3,638 |
|
|
|
1,069 |
|
|
Stock-based compensation |
|
1,559 |
|
|
|
1,391 |
|
|
|
5,963 |
|
|
|
5,840 |
|
|
Amortization of deferred financing fees |
|
155 |
|
|
|
155 |
|
|
|
464 |
|
|
|
464 |
|
|
Operational asset adjustments |
|
— |
|
|
|
(4,472 |
) |
|
|
1,200 |
|
|
|
(4,472 |
) |
|
Changes in assets and liabilities, net of business acquisitions: |
|
|
|
|
|
|
|
|||||||||
Accounts and other receivables |
|
21,073 |
|
|
|
20,062 |
|
|
|
15,069 |
|
|
|
42,185 |
|
|
Inventories |
|
(37,607 |
) |
|
|
(3,598 |
) |
|
|
(1,603 |
) |
|
|
(14,082 |
) |
|
Taxes receivable |
|
(196 |
) |
|
|
(56 |
) |
|
|
1,059 |
|
|
|
8,273 |
|
|
Accounts payable |
|
17,994 |
|
|
|
(4,245 |
) |
|
|
(43,687 |
) |
|
|
(50,123 |
) |
|
Income taxes payable |
|
(572 |
) |
|
|
3,474 |
|
|
|
(7,598 |
) |
|
|
2,136 |
|
|
Accrued liabilities |
|
4,839 |
|
|
|
(2,043 |
) |
|
|
10,988 |
|
|
|
(7,787 |
) |
|
Deferred income and customer advances |
|
369 |
|
|
|
82 |
|
|
|
(14,161 |
) |
|
|
(32,015 |
) |
|
Other assets and liabilities |
|
5,396 |
|
|
|
2,104 |
|
|
|
(1,493 |
) |
|
|
(9,088 |
) |
|
Net cash provided by operating activities |
|
57,250 |
|
|
|
20,802 |
|
|
|
71,248 |
|
|
|
57,381 |
|
|
|
|
|
|
|
|
|
|
|||||||||
Cash flows from investing activities: |
|
|
|
|
|
|
|
|||||||||
Expenditures for property, plant and equipment |
|
(30,490 |
) |
|
|
(25,131 |
) |
|
|
(99,373 |
) |
|
|
(69,025 |
) |
|
Other investing activities |
|
(2,317 |
) |
|
|
(370 |
) |
|
|
(6,053 |
) |
|
|
(2,404 |
) |
|
Net cash used for investing activities |
|
(32,807 |
) |
|
|
(25,501 |
) |
|
|
(105,426 |
) |
|
|
(71,429 |
) |
|
|
|
|
|
|
|
|
|
|||||||||
Cash flows from financing activities: |
|
|
|
|
|
|
|
|||||||||
Borrowings from line of credit |
|
54,000 |
|
|
|
140,500 |
|
|
|
311,500 |
|
|
|
371,000 |
|
|
Payments of line of credit |
|
(69,000 |
) |
|
|
(110,500 |
) |
|
|
(266,500 |
) |
|
|
(316,000 |
) |
|
Principal payments of finance leases |
|
(260 |
) |
|
|
(242 |
) |
|
|
(762 |
) |
|
|
(698 |
) |
|
Dividend payments |
|
(4,276 |
) |
|
|
(4,350 |
) |
|
|
(12,858 |
) |
|
|
(12,354 |
) |
|
Purchase of treasury stock |
|
(42 |
) |
|
|
(9,266 |
) |
|
|
(10,427 |
) |
|
|
(37,651 |
) |
|
Issuance of common stock |
|
328 |
|
|
|
131 |
|
|
|
755 |
|
|
|
876 |
|
|
Net cash provided by (used for) financing activities |
|
(19,250 |
) |
|
|
16,273 |
|
|
|
21,708 |
|
|
|
5,173 |
|
|
|
|
|
|
|
|
|
|
|||||||||
Net change in cash and cash equivalents |
|
5,193 |
|
|
|
11,574 |
|
|
|
(12,470 |
) |
|
|
(8,875 |
) |
|
Cash and cash equivalents at beginning of period |
|
12,105 |
|
|
|
10,536 |
|
|
|
29,768 |
|
|
|
30,985 |
|
|
Cash and cash equivalents at the end of period |
$ |
17,298 |
|
|
$ |
22,110 |
|
|
$ |
17,298 |
|
|
$ |
22,110 |
|
|
|
|
|
|
|
|
|
|
|||||||||
Supplemental non-cash investing activities: |
|
|
|
|
|
|
|
|||||||||
Capital expenditures included in accounts payable |
|
|
|
|
$ |
15,018 |
|
|
$ |
21,188 |
|
|
||||||||||||||||
Non-GAAP Measures |
||||||||||||||||
(Dollars in thousands, except share and per share amounts) |
||||||||||||||||
Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow |
||||||||||||||||
|
Three Months Ended
|
|
Nine Months Ended
|
|||||||||||||
|
2024 |
|
2023 |
|
2024 |
|
2023 |
|||||||||
Net cash provided by operating activities |
$ |
57,250 |
|
|
$ |
20,802 |
|
|
$ |
71,248 |
|
|
$ |
57,381 |
|
|
Expenditures for property, plant and equipment |
|
(30,490 |
) |
|
|
(25,131 |
) |
|
|
(99,373 |
) |
|
|
(69,025 |
) |
|
Free cash flow (1) |
$ |
26,760 |
|
|
$ |
(4,329 |
) |
|
$ |
(28,125 |
) |
|
$ |
(11,644 |
) |
|
|
|
|
|
|
|
|
|
|||||||||
(1) Free cash flow is a non-GAAP measure defined as Net cash provided by operating activities less Expenditures for property, plant and equipment |
||||||||||||||||
The Company believes that this metric is useful to investors and management as a measure to evaluate our ability to generate cash flow from business operations and the impact that this cash flow has on our liquidity. |
Reconciliation of Net Income to Adjusted EBITDA and Earnings Per Share to Adjusted Earnings Per Share |
||||||||||||||||
|
Three Months Ended
|
|
Nine Months Ended
|
|||||||||||||
|
2024 |
|
2023 |
|
2024 |
|
2023 |
|||||||||
Net income (loss) |
$ |
22,266 |
|
|
$ |
(7,977 |
) |
|
$ |
43,797 |
|
|
$ |
59,705 |
|
|
Non-cash stock-based compensation |
|
1,559 |
|
|
|
1,391 |
|
|
|
5,963 |
|
|
|
5,840 |
|
|
Non-recurring, unusual or extraordinary (income) expense (2) |
|
— |
|
|
|
(4,472 |
) |
|
|
1,200 |
|
|
|
(4,472 |
) |
|
Non-cash amortization from acquisitions |
|
531 |
|
|
|
532 |
|
|
|
1,595 |
|
|
|
1,596 |
|
|
Non-recurring M&A costs |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Income tax expense (benefit) relating to reconciling items |
|
(367 |
) |
|
|
776 |
|
|
|
(1,594 |
) |
|
|
(157 |
) |
|
Adjusted Net income (loss) (non-GAAP) |
|
23,989 |
|
|
|
(9,750 |
) |
|
|
50,961 |
|
|
|
62,512 |
|
|
Interest expense, net |
|
2,924 |
|
|
|
2,075 |
|
|
|
9,137 |
|
|
|
5,296 |
|
|
Income tax expense (benefit) - Adjusted |
|
7,846 |
|
|
|
(2,852 |
) |
|
|
16,197 |
|
|
|
17,911 |
|
|
Depreciation and amortization - Adjusted |
|
18,402 |
|
|
|
17,848 |
|
|
|
55,602 |
|
|
|
52,741 |
|
|
Adjusted EBITDA (non-GAAP) |
$ |
53,161 |
|
|
$ |
7,321 |
|
|
$ |
131,897 |
|
|
$ |
138,460 |
|
|
|
|
|
|
|
|
|
|
|||||||||
Sales |
$ |
398,187 |
|
|
$ |
322,907 |
|
|
$ |
1,188,495 |
|
|
$ |
1,151,391 |
|
|
|
|
|
|
|
|
|
|
|||||||||
Adjusted EBITDA Margin (non-GAAP) (3) |
|
13.4 |
% |
|
|
2.3 |
% |
|
|
11.1 |
% |
|
|
12.0 |
% |
|
|
|
|
|
|
|
|
|
|||||||||
(2) 2024 includes a pre-tax loss of approximately |
||||||||||||||||
(3) Adjusted EBITDA Margin is defined as Adjusted EBITDA divided by Sales |
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||
|
2024 |
|
2023 |
|
2024 |
|
2023 |
||||||
Net income (loss) |
$ |
22,266 |
|
$ |
(7,977 |
) |
|
$ |
43,797 |
|
$ |
59,705 |
|
Adjusted Net income (loss) (non-GAAP) |
|
23,989 |
|
|
(9,750 |
) |
|
|
50,961 |
|
|
62,512 |
|
|
|
|
|
|
|
|
|
||||||
Weighted-average number of common shares outstanding - basic |
|
26,790,752 |
|
|
27,209,521 |
|
|
|
26,836,114 |
|
|
27,433,851 |
|
Dilutive effect of equity awards and other stock-based holdings |
|
413,962 |
|
|
— |
|
|
|
373,566 |
|
|
759,870 |
|
Weighted-average number of common shares outstanding - diluted |
|
27,204,714 |
|
|
27,209,521 |
|
|
|
27,209,680 |
|
|
28,193,721 |
|
|
|
|
|
|
|
|
|
||||||
EPS - Basic |
$ |
0.83 |
|
$ |
(0.29 |
) |
|
$ |
1.63 |
|
$ |
2.18 |
|
EPS - Diluted |
$ |
0.82 |
|
$ |
(0.29 |
) |
|
$ |
1.61 |
|
$ |
2.12 |
|
Adjusted EPS - Basic (non-GAAP) |
$ |
0.90 |
|
$ |
(0.36 |
) |
|
$ |
1.90 |
|
$ |
2.28 |
|
Adjusted EPS - Diluted (non-GAAP) |
$ |
0.88 |
|
$ |
(0.36 |
) |
|
$ |
1.87 |
|
$ |
2.22 |
|
The Company believes the non-GAAP financial measures presented in this release provide meaningful supplemental information as they are used by the Company’s management to evaluate the Company’s operating performance, enhance a reader’s understanding of the financial performance of the Company, and facilitate a better comparison among fiscal periods and performance relative to its competitors, as these non-GAAP measures exclude items that are not considered core to the Company’s operations. |
|
||||||||||||
Appendix |
||||||||||||
(Pre-tax income impact, Dollars in millions) |
||||||||||||
|
||||||||||||
Planned Plant Turnaround Schedule (4) |
||||||||||||
|
1Q |
2Q |
3Q |
4Q |
FY |
Primary Unit Operation |
||||||
2017 |
— |
|
|
|
|
Sulfuric Acid |
||||||
2018 |
|
|
|
— |
|
Ammonia |
||||||
2019 |
— |
|
|
|
|
Sulfuric Acid |
||||||
2020 |
|
|
|
|
|
Ammonia |
||||||
2021 |
|
|
— |
|
|
Sulfuric Acid |
||||||
2022 |
|
|
|
— |
|
Ammonia |
||||||
2023 |
|
|
|
— |
|
Sulfuric Acid |
||||||
2024E |
|
|
|
|
|
Ammonia |
||||||
(4) Primarily reflects the impact of fixed cost absorption, maintenance expense, and the purchase of feedstocks which are normally manufactured by the Company. |
||||||||||||
(5) During the multi-site planned plant turnaround, additional required maintenance at our Frankford phenol plant contributed to reduced production across our integrated value chain and a delayed ramp to full operating rates at our |
||||||||||||
(6) During the multi-site planned plant turnaround, additional required maintenance at our |
View source version on businesswire.com: https://www.businesswire.com/news/home/20241031152094/en/
Media
(973) 526-1615
janeen.lawlor@advansix.com
Investors
(973) 526-1700
adam.kressel@advansix.com
Source: