Advansix Inc. (ASIX) 10-Q Quarterly Report October 2021

- AdvanSix (NYSE: ASIX) today announced its financial results for the third quarter ending September 30, 2021. Overall, the Company generated robust sales, earnings and cash flow in the quarter reflecting strong execution amid improving end market demand and tight industry supply conditions.

Third Quarter 2021 Summary

•Sales up approximately 58% versus prior year driven by 28% favorable impact of market-based pricing, 22% higher raw material pass-through pricing and 8% higher volume

•Net Income of $43.9 million, an increase of $44.6 million versus the prior year

•EBITDA of $75.2 million, an increase of $59.4 million versus the prior year

•EBITDA Margin of 16.8%, an increase of 1120 bps versus the prior year

•Cash Flow from Operations of $76.5 million, an increase of $41.0 million versus the prior year

•Capital Expenditures of $13.0 million, a decrease of $3.0 million versus the prior year

•Free Cash Flow of $63.5 million, an increase of $43.9 million versus the prior year

•Announced the initiation of a $0.125 per share quarterly dividend payable November 23, 2021

“We continued to execute well in the third quarter while supporting our customers to successfully navigate the current set of industry dynamics," said Erin Kane, president and CEO of AdvanSix. "Our performance was supported by strong pricing and volume improvement including continued contributions from differentiated products amid favorable end market conditions and tight industry supply. Our earnings results were above the high-end of the outlook we provided at our September 28th Investor Day driven primarily by better-than-expected pricing, net of raw material costs, as well as the timing of ammonium sulfate sales."

Summary third quarter 2021 financial results for the Company are included below:


($ in Thousands, Except Earnings Per Share)	3Q 2021	3Q 2020
Sales	$446,495	$281,910
Net Income (Loss)	43,942	(692)
Diluted Earnings (Loss) Per Share	$1.51	($0.02)
EBITDA (1)	75,188	15,806
EBITDA Margin % (1)	16.8%	5.6%
Cash Flow from Operations	76,488	35,533
Free Cash Flow (1)(2)	63,495	19,572

(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 $446.5 million increased approximately 58% versus the prior year. Raw material pass-through pricing was favorable by 22% following a net cost increase in benzene and propylene (inputs to cumene which is a key feedstock to our products). Market-based pricing was favorable by 28% compared to the prior year driven by higher pricing across each of our product lines. Sales volume in the quarter increased approximately 8% driven primarily by improved end market demand across our ammonium sulfate, nylon and caprolactam product lines.

Sales by product line and approximate percentage of total sales are included below:


($ in Thousands)	3Q 2021			3Q 2020
	Sales		% of Total	Sales		% of Total
Nylon	$	122,110	27%	$	73,555	26%
Caprolactam	80,265		18%	52,409		18%
Chemical Intermediates	130,920		29%	94,770		34%
Ammonium Sulfate	113,200		26%	61,176		22%
	$	446,495	100%	$	281,910	100%

EBITDA of $75.2 million in the quarter increased $59.4 million versus the prior year primarily due to higher market-based pricing, net of increased raw material costs, and the net approximately $20 million favorable impact of planned plant turnarounds year-over-year. 3Q 2021 EBITDA included approximately $2 million favorable impact of additional insurance proceeds related to the 2019 shutdown of cumene supplier Philadelphia Energy Solutions (PES).

Earnings per share of $1.51 increased $1.53 versus the prior year driven primarily by the factors discussed above.

Cash flow from operations of $76.5 million in the quarter increased $41.0 million versus the prior year primarily due to higher net income and the favorable impact of changes in working capital. Capital expenditures of $13.0 million in the quarter decreased $3.0 million versus the prior year reflecting capital

The following information was filed by Advansix Inc. (ASIX) on Friday, October 29, 2021 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 - Earnings Highlight
Gross margin percentage increased by approximately 12% in the three months ended September 30, 2021 compared to the prior year period due primarily to the (i) impact of formula-based pass-through pricing and increased market pricing (approximately 7%), (ii) net favorable impact of plant turnarounds year-over-year (approximately 4%), (iii) higher sales volume (approximately 2%) and (iv) the collection of additional insurance proceeds related to the 2019 shut-down of cumene supplier Philadelphia Energy Solutions (approximately 1%).

Financial - Earnings Highlight
Gross margin percentage increased by approximately 8% in the nine months ended September 30, 2021 compared to the prior year period due primarily to (i) the impact of formula-based pass-through pricing and increased market pricing (approximately 4%), (ii) higher sales volume (approximately 4%) and (iii) net favorable impact of plant turnarounds year-over-year (approximately 1%).
Financial - Cash Flow Highlight
Cash Flow Summary Cash provided by operating activities increased by $121.4 million for the nine months ended September 30, 2021 versus the prior year period due primarily to a $96.9 million increase in net income, a $23.7 million cash improvement from Taxes receivable (including a $12.3 million cash tax refund received in the first quarter of 2021) and a $13.3 million favorable cash impact from working capital (comprised of Accounts and other receivables, Inventories, Accounts payable and Deferred income and customer advances) year-over-year with a $4.9 million unfavorable cash impact from working capital for the nine months ended September 30, 2021 compared to a $18.2 million unfavorable cash impact in the prior year period.
Financial - Expense Highlight
Selling, general and administrative expenses increased by $11.3 million in the nine months ended September 30, 2021 compared to the prior period due primarily to increased incentive and stock-based compensation costs and increased functional support costs as compared to cost control measure implemented in response to the COVID-19 pandemic in the prior year.
Financial - Expense Highlight
Selling, General and Administrative Expenses Selling, general and administrative expenses increased by $4.9 million in the three months ended September 30, 2021 compared to the prior year period due primarily to increased incentive and stock-based compensation costs and increased functional support costs as compared to cost control measures implemented in response to the COVID-19 pandemic in the prior year.
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
Revenue - Product
As previously disclosed, the Company...Read more
Financial - Shares
On May 4, 2018, the...Read more
Other - Other
The noted increase was partially...Read more
Financial - Expense
For further information regarding risk...Read more
Financial - Shares
On February 22, 2019, the...Read more
Financial - Earnings
The Company currently plans to...Read more
Other - Other
Cash used for financing activities...Read more
Revenue - Product
Due to the ammonium sulfate...Read more
Financial - Expense
Although we have ongoing environmental...Read more
Financial - Expense
Costs of Goods Sold Costs...Read more
Other - Other
The noted increase was partially...Read more
Financial - Dividend
Dividend As announced on September...Read more
Financial - Dividend
Dividend As announced on September...Read more
Other - Other
Non-GAAP financial measures should be...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
The Company's effective tax rate...Read more
Other - Other
We also utilize maintenance excellence...Read more
Revenue - Product
The pandemic and these containment...Read more
Revenue - Product
Sales increased in the nine...Read more
Other - Other
Actual results and the timing...Read more
Financial - Expense
Costs of goods sold increased...Read more
Other - Other
Nylon 6 resin prices track...Read more
Revenue - Product
The noted increase was partially...Read more
Other - Other
We continue to invest in...Read more
M & A - Other
The Second Amended and Restated...Read more
Other - Other
Our differentiated Nylon 6 products...Read more
Other - Other
Although we believe forward-looking statements...Read more
Other - Other
The following tables may also...Read more
Other - Other
We believe that Nylon 6...Read more
Revenue - Product
We produce ammonium sulfate fertilizer...Read more
Other - Other
Starting in the second half...Read more
Other - Other
These covenants placed limits on...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: 0001673985-21-000144
Submitted to the SEC: Fri Oct 29 2021 4:32:24 PM EST
Accepted by the SEC: Fri Oct 29 2021
Period: Thursday, September 30, 2021
Industry: Plastic Materials Synth Resins And Nonvulcan Elastomers