Exhibit 99.1

 

 
 Advan6.com News Release

 

  Media Investor Relations
  Debra Lewis Adam Kressel  
  (973) 526-1767 (973) 526-1700
  debra.lewis@advan6.com adam.kressel@advan6.com

 

ADVANSIX ANNOUNCES FOURTH QUARTER AND FULL YEAR 2016 FINANCIAL RESULTS

 

4Q16 Sales of $259 million, down 18% versus prior year

 

4Q16 Cash Flow from Operations of $47 million, up 49% versus prior year

 

4Q16 EPS loss of $0.81 includes impact of significant extended outage

 

Parsippany, N.J., March 3, 2017 – AdvanSix

(NYSE: ASIX) today announced its financial results for the fourth quarter and full year ending Dec. 31, 2016. The Company completed its first full quarter as an independent company and generated strong cash flow while managing through extended plant downtime. Below are business highlights for the fourth quarter and full year 2016.

 

Full Year 2016 Highlights

 

·Sales down 10% versus prior year, including a 5% unfavorable impact from 4Q16 unplanned outages

 

·Sales volume down 1% versus the prior year, including a 5% unfavorable impact from 4Q16 unplanned outages; Sales volume increased 5% for the first nine months of the year due to improved production rates

 

·4Q16 plant turnaround activities impacted pre-tax income by approximately $64 million, including approximately $20 million impact from the planned turnaround and approximately $44 million from unplanned outages

 

·Net Income of $34.1 million, down $29.6 million versus the prior year; EBITDA of $96.0 million, a decrease of $40.7 million versus the prior year

 

·Capital Expenditures of $84.0 million, down $13.1 million versus the prior year

 

·Cash Flow from Operations of $113.7 million, up $12.2 million versus the prior year; Free Cash Flow of $29.7 million, an increase of $25.3 million versus the prior year
 

Summary full year 2016 financial results for the Company are included below:

 

Full Year 2016 Results

 

($ Thousands, Except Earnings Per Share) FY 2015 FY 2016
     
Sales $1,329,409 $1,191,524
     
Net Income 63,776 34,147
     
Earnings Per Share (Diluted) $2.09 $1.12
     
EBITDA (1) 136,647 95,951
     
EBITDA Margin % (1) 10.3% 8.1%
     
Cash Flow from Operations 101,536 113,740
     
Free Cash Flow (1)(2) 4,392 29,731

 

(1)See “Non-GAAP Measures” included in this press release for non-GAAP reconciliations
(2)Net cash provided by operating activities less capital expenditures

 

“AdvanSix drove improved cash flow in the quarter despite lower income that was the result of the significant plant challenges we faced. With our sites currently running at planned rates, we maintain our focus on safe operations, reliable supply to customers, and productivity as we start the new year. We successfully navigated through significant outages in the fourth quarter and look forward to the prospect of an improved 2017,” said Erin Kane, president and CEO of AdvanSix.

 

4Q 2016 Turnaround Activities

 

Extensive planned turnaround activities across numerous operating units began in early October 2016. On Oct. 31, 2016, the Company announced that its planned fourth quarter turnaround would be extended due to additional, unplanned maintenance of its ammonia plant within its Hopewell facility. Operations resumed on Nov. 21, then on Dec. 8, the Company announced it had experienced a subsequent outage at its Hopewell facility, reducing caprolactam production and leading to a reduction in resin production at its downstream Chesterfield polymerization plant.

 

As a result of the planned turnaround activities and incremental unplanned outages, the Company’s fourth quarter 2016 pre-tax income was reduced by approximately $64 million, inclusive of reduced fixed cost absorption, inventory revaluation, additional raw material costs, maintenance expenses and an approximately $13 million impact from lost sales. The fourth quarter plant turnaround activities are not expected to have an adverse impact on first quarter 2017 financial results.

2

Summary fourth quarter 2016 financial results for the Company are included below:

 

Fourth Quarter 2016 Results

 

($ Thousands, Except Earnings Per Share) 4Q 2015 4Q 2016
     
Sales $315,865 $259,323
     
Net Income 15,338 (24,714)
     
Earnings Per Share (Diluted) $0.50 ($0.81)
     
EBITDA (1) 33,111 (29,586)
     
EBITDA Margin % (1) 10.5% (11.4%)
     
Cash Flow from Operations 31,688 47,273
     
Free Cash Flow (1)(2) 2,442 20,123

 

(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 volume in the quarter decreased 18% versus the prior year, including a 23% unfavorable impact from lower production rates as a result of the factors referenced above. Price was approximately flat overall in the quarter with 2% higher raw material pass-through pricing offset by the 2% unfavorable impact of market-based pricing.

 

Sales by product line represented the following approximate percentage of our total sales:

 

  4Q 2015 4Q 2016   FY 2015 FY 2016
           
Nylon 27% 26%   27% 28%
           
Caprolactam 19% 17%   18% 17%
           
Ammonium Sulfate Fertilizers 27% 24%   25% 24%
           
Chemical Intermediates 27% 33%   30% 31%

 

EBITDA loss of $29.6 million in the quarter decreased from EBITDA of $33.1 million in the prior year primarily due to the factors referenced above.

 

Recent Trends and Outlook

 

·Global caprolactam and nylon 6 price strength due to underlying raw material cost increases coupled with current tightened supply environment

 

·Ammonium sulfate fertilizer prices remain stable sequentially; Challenging agriculture fundamentals expected throughout 2017

 

·AdvanSix 1Q17 plant production rates on plan

 

·Hopewell 2017 plant production rates expected at or above historical production as a result of system upgrades and reliability improvements
3
·Capital Expenditures are expected to be approximately $90 million for the full year 2017

 

“We expect improved operational and financial performance in 2017 with an emphasis on increasing plant production output, driving higher-value product mix and continued strong working capital results,” said Kane.

 

Conference Call Information

 

AdvanSix will discuss its results during its investor conference call today starting at 9:00 a.m. ET. To participate on the conference call, dial (866) 807-9684 (domestic) or (412) 317-5415 (international) approximately 10 minutes before the 9:00 a.m. ET start, and tell the operator that you are dialing in for AdvanSix’s fourth quarter 2016 earnings call. The live webcast of the investor call as well as related presentation materials can be accessed at http://investors.advan6.com. Investors can hear a replay of the conference call from 12:00 noon ET on March 3 until 12:00 noon ET on March 10 by dialing (877) 344-7529 (domestic) or (412) 317-0088 (international). The access code is 10100151.

 

About AdvanSix

 

AdvanSix is a leading manufacturer of Nylon 6, a polymer resin which is a synthetic material used by our customers to produce engineered plastics, fibers, filaments and films that, in turn, are used in such end-products as automotive and electronic components, carpets, sports apparel, fishing nets and food and industrial packaging. As a result of our backward integration and the configuration of our manufacturing facilities, we also sell caprolactam, ammonium sulfate fertilizer, acetone and other intermediate chemicals, all of which are produced as part of the Nylon 6 resin manufacturing process. More information on AdvanSix can be found at http://www.advan6.com.

 

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 like “expect,” “anticipate,” “estimate,” “outlook”, “project,” “strategy,” “intend,” “plan,” “target,” “goal,” “may,” “will,” “should” and “believe” or other variations or similar terminology. Although we believe forward-looking statements are based upon reasonable assumptions, such statements involve known and unknown risks, uncertainties and other factors, 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: our inability to achieve some or all of the anticipated benefits of the spin-off from Honeywell including uncertainty regarding qualification for expected tax treatment, indebtedness incurred in connection with the spin-off, and operating as an independent, publicly traded company; fluctuations in our stock price; general economic and financial conditions in the U.S. and globally; growth rates and cyclicality of the industries we serve; the impact of scheduled turnarounds and significant unplanned interruptions of production or logistics operations as a result of mechanical issues or other unanticipated events such as fires, severe weather conditions, and natural disasters; price fluctuations and supply of raw materials; adverse trade and tax policies; extensive environmental, health and safety laws that apply to our operations; litigation associated with chemical manufacturing; loss of significant customer relationships; protection of our intellectual property and proprietary information; and prolonged work stoppages as a result of labor difficulties. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this release. Such forward-looking

4

statements are not guarantees of future performance, and actual results, developments and business decisions may differ from those envisaged by such forward-looking statements. We identify the principal risks and uncertainties that affect our performance in our filings with the Securities and Exchange Commission, including our Registration Statement on Form 10 and our Annual Report on Form 10-K for the year ended December 31, 2016 to be filed with the SEC.

 

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.

 

# # #

5

AdvanSix Inc.

Consolidated and Combined Balance Sheets (unaudited)

(in thousands, except share and per share amounts)

 

   December 31,
   2016  2015
Assets          
Current assets:          
Cash and cash equivalents  $14,199   $- 
Accounts and other receivables – net   131,671    127,545 
Inventories – net   128,978    150,231 
Other current assets   7,690    4,443 
Total current assets   282,538    282,219 
           
Property, plant, equipment – net   575,375    527,542 
Goodwill   15,005    15,005 
Other assets   32,039    16,220 
Total assets  $904,957   $840,986 
           
Liabilities          
Current liabilities:          
Accounts payable  $223,015   $192,733 
Accrued liabilities   25,396    25,114 
Deferred income and customer advances   25,567    25,207 
Total current liabilities   273,978    243,054 
           
Deferred income taxes   114,200    114,910 
Long-term debt   264,838    - 
Postretirement benefit obligations   33,544    - 
Other liabilities   3,035    3,952 
Total liabilities   689,595    361,916 
           
Stockholders’ Equity          
Common stock, par value $0.01; 200,000,000 shares authorized and 30,482,966 shares issued and outstanding   305    - 
Preferred stock, par value $0.01; 50,000,000 shares authorized and 0 shares issued and outstanding   -    - 
Additional paid-in capital   242,806    - 
Accumulated deficit   (24,714)   - 
Invested equity   -    482,809 
Accumulated other comprehensive income (loss)   (3,035)   (3,739)
Total stockholders’ equity   215,362    479,070 
Total liabilities and stockholders’ equity  $904,957   $840,986 
6

AdvanSix Inc.

Consolidated and Combined Statements of Operations

For the years and three months ended December 31, 2016 and 2015 (unaudited)

(in thousands, except share and per share amounts)

 

   Three Months Ended December 31,  Years Ended December 31,
   2016  2015  2016  2015
Sales  $259,323   $315,865   $1,191,524   $1,329,409 
                     
Costs, expenses and other:                    
Costs of goods sold   279,423    279,457    1,083,894    1,179,651 
Selling, general and administrative expenses   19,804    13,194    53,753    52,398 
Other non-operating – net   1,894    (863)   102    (2,877)
    301,121    291,788    1,137,749    1,229,172 
                     
Income before taxes   (41,798)   24,077    53,775    100,237 
Income taxes   (17,084)   8,739    19,628    36,461 
Net income  $(24,714)  $15,338   $34,147   $63,776 
                     
Earnings per common share                    
Basic  $(0.81)  $0.50   $1.12   $2.09 
Diluted  $(0.81)  $0.50   $1.12   $2.09 
                     
Weighted average common shares outstanding                    
Basic   30,482,966    30,482,966    30,482,966    30,482,966 
Diluted   30,503,587    30,482,966    30,503,587    30,482,966 
7

AdvanSix Inc.

Consolidated and Combined Statements of Cash Flows

For the years and three months ended December 31, 2016 and 2015 (unaudited)

(in thousands)

 

   Three Months Ended
December 31,
  Years Ended
December 31,
   2016  2015  2016  2015
Cash flows from operating activities:                    
Net income (loss)  $(24,714)  $15,338   $34,147   $63,776 
Adjustments to reconcile net income to net cash provided by operating activities:                    
Depreciation and amortization   10,365    9,034    40,329    36,410 
Loss on disposal of assets   283    273    1,529    1,308 
Deferred income taxes   (17,672)   2,284    11,534    9,913 
Stock based compensation   1,327    -    1,327    - 
Accretion of deferred financing costs   148    -    148    - 
Changes in assets and liabilities:                    
Accounts and other receivables   16,169    (1,776)   (3,948)   38,399 
Inventories   7,672    (11,518)   21,253    5,021 
Accounts payable   24,093    (4,176)   23,932    (38,689)
Accrued liabilities   9,971    3,683    281    500 
Deferred income and customer advances   23,861    21,857    360    (6,783)
Other assets and liabilities   (4,230)   (3,311)   (17,152)   (8,319)
Net cash provided by operating activities   47,273    31,688    113,740    101,536 
                     
Cash flows from investing activities:                    
Expenditures for property, plant and equipment   (27,150)   (29,246)   (84,009)   (97,144)
Other investing activities   (1,911)   (523)   (2,372)   (1,086)
Net cash (used for) investing activities   (29,061)   (29,769)   (86,381)   (98,230)
                     
Cash flow from financing activities:                    
Proceeds from long term debt   -    -    270,000    - 
Payment of long term debt   (3,375)   -    (3,375)   - 
Payment of debt issuance costs   (111)   -    (1,881)   - 
Borrowings under revolving credit facility   18,000    -    58,000    - 
Payments of revolving credit facility   (58,000)   -    (58,000)   - 
Payment of revolving credit facility fees   (64)   -    (1,080)   - 
Principal payments under capital lease   (165)   -    (165)   - 
Distribution to Honeywell in connection with Spin-Off   -    -    (269,347)   - 
Net increase (decrease) in invested equity   1,738    (1,755)   (7,312)   (2,936)
Other financing activities   -    (164)   -    (370)
Net cash (used for) financing activities   (41,977)   (1,919)   (13,160)   (3,306)
                     
Net increase/(decrease) in cash and cash equivalents   (23,765)   -    14,199    - 
Cash and cash equivalents at beginning of period   37,964    -    -    - 
Cash and cash equivalents at the end of period  $14,199   $-   $14,199   $- 
8

AdvanSix Inc.

Non-GAAP Measures

(in thousands)

 

Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow

 

   Three Months Ended
December 31,
  Years Ended
December 31,
   2016  2015  2016  2015
             
Net Cash Provided by Operating Activities  $47,273   $31,688   $113,740   $101,536 
Expenditures for Property, Plant and Equipment   (27,150)   (29,246)   (84,009)   (97,144)
Free Cash Flow (1)  $20,123   $2,442   $29,731   $4,392 
                     
(1) Free Cash Flow is defined as Net Cash provided by Operating Activities less Capital Expenditures

 

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 EBITDA

 

   Three Months Ended
December 31,
  Years Ended
December 31,
   2016  2015  2016  2015
             
Net Income  $(24,714)  $15,338   $34,147   $63,776 
Interest Expense   1,847    -    1,847    - 
Income Taxes   (17,084)   8,739    19,628    36,461 
Depreciation and Amortization   10,365    9,034    40,329    36,410 
EBITDA (2)  $(29,586)  $33,111   $95,951   $136,647 
                     
Sales  $259,323   $315,865   $1,191,524   $1,329,409 
EBITDA Margin (3)   (11.4%)   10.5%   8.1%   10.3%
                     
(2) EBITDA is defined as Net Income before Interest, Income Taxes, Depreciation and Amortization
(3) EBITDA Margin is defined as EBITDA divided by Sales

 

The Company believes these non-GAAP financial measures 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 the non-GAAP measures exclude items that are not considered core to the Company’s operations.

9

The following information was filed by Advansix Inc. (ASIX) on Friday, March 3, 2017 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.

View differences made from one year to another to evaluate Advansix Inc.'s financial trajectory

Compare SEC Filings Year-over-Year (YoY) and Quarter-over-Quarter (QoQ)
Sample 10-K Year-over-Year (YoY) Comparison

Compare this 10-K Annual Report to its predecessor by reading our highlights to see what text and tables were  removed  ,   added    and   changed   by Advansix Inc..

Continue

Never Miss A New SEC Filing Again


Real-Time SEC Filing Notifications
Screenshot taken from Gmail for a new 10-K Annual Report
Last10K.com Member Feature

Receive an e-mail as soon as a company files an Annual Report, Quarterly Report or has new 8-K corporate news.

Continue

We Highlighted This SEC Filing For You


SEC Filing Sentiment Analysis - Bullish, Bearish, Neutral
Screenshot taken from Wynn's 2018 10-K Annual Report
Last10K.com Member Feature

Read positive and negative remarks made by management in their entirety without having to find them in a 10-K/Q.

Continue

Widen Your SEC Filing Reading Experience


Increased Reading Area for SEC Filings
Screenshot taken from Adobe Inc.'s 10-Q Quarterly Report
Last10K.com Member Feature

Remove data columns and navigations in order to see much more filing content and tables in one view

Continue

Uncover Actionable Information Inside SEC Filings


SEC Filing Disclosures
Screenshot taken from Lumber Liquidators 10-K Annual Report
Last10K.com Member Feature

Read both hidden opportunities and early signs of potential problems without having to find them in a 10-K/Q

Continue

Adobe PDF, Microsoft Word and Excel Downloads


Download Annual and Quarterly Reports as PDF, Word and Excel Documents
Screenshots of actual 10-K and 10-Q SEC Filings in PDF, Word and Excel formats
Last10K.com Member Feature

Export Annual and Quarterly Reports to Adobe PDF, Microsoft Word and Excel for offline viewing, annotations and analysis

Continue

FREE Financial Statements


Download Annual and Quarterly Reports as PDF, Word and Excel Documents
Screenshot of actual balance sheet from company 10-K Annual Report
Last10K.com Member Feature

Get one-click access to balance sheets, income, operations and cash flow statements without having to find them in Annual and Quarterly Reports

Continue for FREE

Intrinsic Value Calculator


Intrinsic Value Calculator
Screenshot of intrinsic value for AT&T (2019)
Last10K.com Member Feature

Our Intrinsic Value calculator estimates what an entire company is worth using up to 10 years of financial ratios to determine if a stock is overvalued or not

Continue

Financial Stability Report


Financial Stability Report
Screenshot of financial stability report for Coco-Cola (2019)
Last10K.com Member Feature

Our Financial Stability reports uses up to 10 years of financial ratios to determine the health of a company's EPS, Dividends, Book Value, Return on Equity, Current Ratio and Debt-to-Equity

Continue

Get a Better Picture of a Company's Performance


Financial Ratios
Available Financial Ratios
Last10K.com Member Feature

See how over 70 Growth, Profitability and Financial Ratios perform over 10 Years

Continue

Log in with your credentials

or    

Forgot your details?

Create Account