Advansix Inc. (ASIX) 10-Q Quarterly Report October 2020

- AdvanSix (NYSE: ASIX) today announced its financial results for the third quarter ending September 30, 2020. Overall, the Company generated higher cash flow in the third quarter while mitigating the ongoing impacts of COVID-19 and executing its planned plant turnaround.

Third Quarter 2020 Results

•Sales down approximately 9% versus prior year, as 5% higher volume was more than offset by 13% lower raw material pass-through pricing and 1% unfavorable impact of market-based pricing

•Net Loss of ($0.7) million, a decrease of $8.6 million versus the prior year

•EBITDA of $15.8 million, a decrease of $9.1 million versus the prior year

•3Q20 planned plant turnaround successfully completed - approximately $20 million unfavorable pre-tax income impact (compared to approximately $5 million unfavorable impact in 3Q19)

•Cash Flow from Operations of $35.5 million, an increase of $2.4 million versus the prior year

•Capital Expenditures of $16.0 million, $19.2 million favorable versus the prior year

•Free Cash Flow of $19.6 million, an increase of $21.6 million versus the prior year

•As of 3Q20, approximately $17 million of cash on hand with approximately $111 million of additional capacity available under the revolving credit facility

“Our diverse product portfolio and global low-cost position continue to serve us well as we navigate through the current environment," said Erin Kane, president and CEO of AdvanSix. "We have seen nylon volume returning to pre-COVID levels and we continue to optimize our mix across end uses, applications and geographies through the recovery. The performance of the remainder of our portfolio, including ammonium sulfate, acetone and other high-value intermediates, remains resilient complementing ongoing benefits from our focused cost management and high-return capital investments. We generated higher cash flow in the quarter, as anticipated, supported by efficient working capital performance and reduced capital expenditures."

The following information was filed by Advansix Inc. (ASIX) on Friday, October 30, 2020 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-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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Inside Advansix Inc.'s 10-Q Quarterly Report:

Financial - Cash Flow Highlight
Cash Flow Summary Cash provided by operating activities decreased by $36.4 million for the nine months ended September 30, 2020 versus the prior year period due primarily to a $24.1 million decrease in net income, a $18.2 million unfavorable cash impact from working capital (comprised of Accounts receivables, Inventories, Accounts payable and Deferred income) for the nine months 32 ended September 30, 2020 versus a $9.0 million unfavorable cash impact from working capital in the prior year period and a $11.7 million unfavorable cash impact from taxes receivable.

Revenue - Product Highlight
Results of Operations (Dollars in thousands, unless otherwise noted) Sales The change in sales compared to the prior year period is attributable to the following: Sales decreased in the three months ended September 30, 2020 compared to the prior year period by $28.7 million (approximately 9%) due primarily to lower pricing (approximately 14%) driven primarily by (i) lower formula-based pass-through pricing (approximately 13%) following a net decrease in the cost of benzene and propylene (inputs to cumene which is a key feedstock material for our products) and (ii) lower market-based pricing (approximately 1%) in nylon, ammonium sulfate and caprolactam product lines, partially offset by market price increases in chemical intermediates, particularly acetone.
Financial - Shares Highlight
Cash provided by financing activities increased by $5.7 million for the nine months ended September 30, 2020 versus the prior year period due primarily to net borrowings of $16.0 million for the nine months ended September 30, 2020 compared to net borrowings of $66.0 million during the prior year period, offset by $1.0 million in cash outflows for share repurchases during the nine months ended September 30, 2020 compared to $53.1 million in cash outflows during the prior year period, both of which are described above.
Financial - Earnings Highlight
This was partially offset by the net favorable margin impact of lower formula based pass-through pricing (driven by decreased raw material costs) and market pricing impacts (approximately 2%) as well as decreased costs related to the PES shutdown (approximately 1%) and reduction of other expenses (approximately 2%).
Financial - Expense Highlight
Costs of Goods Sold 26 Costs of goods sold decreased in the three months ended September 30, 2020 compared to the prior year period by $14.4 million (approximately 5%) due primarily to (i) lower prices of raw materials, particularly benzene and propylene (approximately 16%), (ii) decreased costs related to the PES shutdown (approximately 1%) and (iii) reduction in R&D and other expenses (approximately 1%).
Revenue - Product
The pandemic and these 23...Read more
Other - Other
While our integration, scale and...Read more
Financial - Expense
Capital Expenditures (Dollars in thousands,...Read more
Other - Other
Our ability to fund our...Read more
Financial - Cash Flow
Our cash flows are affected...Read more
Financial - Shares
On May 4, 2018, the...Read more
Financial - Shares
On February 22, 2019, the...Read more
Financial - Expense
Selling, General and Administrative Expenses...Read more
Financial - Shares
In response to COVID-19, the...Read more
Financial - Earnings
Gross margin percentage decreased by...Read more
Financial - Expense
We believe our competitive strengths...Read more
Other - Other
Given the uncertain environment in...Read more
Revenue - Product
Due to the ammonium sulfate...Read more
Financial - Expense
Although we have ongoing environmental...Read more
Other - Other
Non-GAAP financial measures should be...Read more
Other - Other
Effective December 20, 2019, Commerce...Read more
Revenue - Geography
Effective March 31, 2020, Commerce...Read more
Other - Other
Forward-looking statements are not guarantees...Read more
Financial - Income
The Company anticipates the unfavorable...Read more
Financial - Earnings
Non-GAAP Measures (Dollars in thousands,...Read more
Other - Other
The Company's non-GAAP measures may...Read more
Other - Other
We also utilize maintenance excellence...Read more
Other - Other
For further information regarding the...Read more
Other - Other
Actual results and the timing...Read more
Financial - Income
In addition, the Company incurred...Read more
Other - Other
Cash used for investing activities...Read more
Other - Other
If the Company does not...Read more
Other - Other
In the first quarter of...Read more
Revenue - Product
Sales decreased in the nine...Read more
Other - Other
The Company believes these non-GAAP...Read more
Other - Other
While we continue to evaluate...Read more
Revenue - Product
This was partially offset by...Read more
Other - Other
22 Business Overview We produce...Read more
Other - Other
Our differentiated Nylon 6 products...Read more
Financial - Expense
For further information regarding risk...Read more
Revenue - Product
In particular, the Company experienced...Read more
Financial - Expense
Costs of goods sold decreased...Read more
Financial - Expense
The First Amendment resulted in...Read more
Other - Other
Although we believe forward-looking statements...Read more
Other - Other
The Company does not anticipate...Read more
Other - Other
The following tables also present...Read more
Other - Other
We believe that Nylon 6...Read more
Revenue - Product
We produce ammonium sulfate fertilizer...Read more
Financial - Expense
Prices for acetone are influenced...Read more

Financial Statements, Disclosures and Schedules

Inside this 10-Q Quarterly Report

Material Contracts, Statements, Certifications & more

Advansix Inc. provided additional information to their SEC Filing as exhibits

Exhibit 31.1: Rule 13A-14(A)/15D-14(A) Certification

Exhibit 31.2: Rule 13A-14(A)/15D-14(A) Certification

Exhibit 32.1: Section 1350 Certification

Exhibit 32.2: Section 1350 Certification

Ticker: ASIX
CIK: 1673985
Form Type: 10-Q Quarterly Report
Accession Number: 0001673985-20-000149
Submitted to the SEC: Fri Oct 30 2020 4:12:07 PM EST
Accepted by the SEC: Fri Oct 30 2020
Period: Wednesday, September 30, 2020
Industry: Plastic Materials Synth Resins And Nonvulcan Elastomers