Advansix Inc. (ASIX) 10-K Annual Report February 2022

Parsippany, N.J., February 18, 2022 - AdvanSix (NYSE: ASIX) today announced its financial results for the fourth quarter and full year ending December 31, 2021. In 2021, the Company generated record annual sales, earnings and cash flow as a public company reflecting strong execution amid improving end market demand and tight industry supply conditions. The Company also announced it has agreed to acquire U.S. Amines in an all-cash transaction for an estimated net purchase price of approximately $100 million. U.S. Amines is a leading North American producer of alkyl and specialty amines serving high-value end markets such as agrochemicals and pharmaceuticals.

Full Year 2021 Summary

•Sales up approximately 45% versus prior year driven by 20% favorable impact of market-based pricing, 18% higher raw material pass-through pricing and 7% higher volume

•Net Income of $139.8 million, an increase of $93.7 million versus the prior year

•EBITDA of $255.5 million, an increase of $131.8 million versus the prior year

•EBITDA Margin of 15.2%, up 450 bps versus the prior year

•Cash Flow from Operations of $218.8 million, an increase of $107.0 million versus the prior year

•Capital Expenditures of $56.8 million, a decrease of $26.1 million versus the prior year

•Free Cash Flow of $162.0 million, an increase of $133.1 million versus the prior year

Summary full year 2021 financial results for the Company are included below:


($ in Thousands, Except Earnings Per Share)	FY 2021	FY 2020
Sales	$1,684,625	$1,157,917
Net Income	139,791	46,077
Diluted Earnings Per Share	$4.81	$1.64
EBITDA (1)	255,479	123,657
EBITDA Margin % (1)	15.2%	10.7%
Cash Flow from Operations	218,849	111,847
Free Cash Flow (1)(2)	162,038	28,929

(1) See “Non-GAAP Measures” included in this press release for non-GAAP reconciliations

(2) Net cash provided by operating activities less capital expenditures

“In 2021, we once again differentiated our performance by delivering outstanding results and supporting our customers, all while continuing to successfully navigate the ongoing Covid-19 pandemic, significant industry supply chain disruptions, and an inflationary cost environment," said Erin Kane, president and CEO of AdvanSix. "We achieved a post-spin record annual EBITDA and Free Cash Flow, executed our first acquisition, initiated a quarterly dividend, entered into a new revolving credit facility and significantly reduced our debt levels to provide optionality for further value creation. Our strong results reflect the resilience and strength of our execution and business model as well as our leadership positions across our diverse product portfolio."

Fourth Quarter 2021 Summary

•Sales up approximately 25% versus prior year driven by 25% favorable impact of market-based pricing and 12% higher raw material pass-through pricing, partially offset by 12% lower volume

•Net Income of $23.6 million, a decrease of $3.2 million versus the prior year

•EBITDA of $49.3 million, an increase of $0.8 million versus the prior year including an approximately $16 million net unfavorable impact of planned plant turnarounds year-over-year

•Cash Flow from Operations of $33.3 million, a decrease of $14.4 million versus the prior year

•Capital Expenditures of $19.3 million, an increase of $4.0 million versus the prior year

•Free Cash Flow of $14.0 million, a decrease of $18.4 million versus the prior year

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


($ in Thousands, Except Earnings Per Share)	4Q 2021	4Q 2020
Sales	$424,064	$340,272
Net Income	23,587	26,764
Diluted Earnings Per Share	$0.80	$0.94
EBITDA (1)	49,287	48,499
EBITDA Margin % (1)	11.6%	14.3%
Cash Flow from Operations	33,326	47,761
Free Cash Flow (1)(2)	13,986	32,406

(1) See “Non-GAAP Measures” included in this press release for non-GAAP reconciliations

(2) Net cash provided by operating activities less capital expenditures

The following information was filed by Advansix Inc. (ASIX) on Friday, February 18, 2022 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.

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Inside Advansix Inc.'s 10-K Annual Report:

Financial - Earnings Highlight
Differences between actual and expected results or changes in the value of defined benefit obligations and fair value of plan assets, if any, are not recognized in earnings as they occur but rather systematically over subsequent periods when net actuarial gains or losses are in excess of 10% of the greater of the fair value of plan assets or the plan's projected benefit obligation.

Financial - Earnings Highlight
Gross margin percentage increased by approximately 5% in 2021 compared to 2020 due primarily to (i) the net impact of formula-based pass-through pricing and increased market pricing (approximately 4%) and (ii) higher sales volume (approximately 2%), partially offset by increased plant spend and sales freight to support higher sales volume (approximately 2%).
M & A - Other Highlight
The Credit Agreement also contains financial covenants that require the Company to maintain a Consolidated Interest Coverage Ratio (as defined in the Credit Agreement) of not less than 3.00 to 1.00 and to maintain a Consolidated Leverage Ratio of (i) 4.00 to 1.00 or less for the fiscal quarter ending December 31, 2021, through and including the fiscal quarter ending September 30, 2023 and (ii) 3.75 to 1.00 or less for each fiscal quarter thereafter (subject to the Company's option to elect a consolidated leverage ratio increase in connection with certain acquisitions).
Other - Other Highlight
While our integration, scale and range of product offerings make us one of the most efficient manufacturers in our industry, these attributes also expose us to increased risk associated with material disruptions at any one of our production facilities or logistics operations which could impact the overall manufacturing supply chain.
Financial - Expense Highlight
Capital Expenditures Our operations are capital intensive, requiring ongoing investments that have consisted, and are expected to continue to consist, primarily of capital expenditures required to maintain and improve equipment reliability, expand production output, further improve mix, yield and cost position and comply with environmental and safety regulations.
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Selling, General and Administrative Expenses...Read more
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Our ability to fund our...Read more
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Our cash flows are affected...Read more
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As previously disclosed, the Company...Read more
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The Company's effective income tax...Read more
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Although we have ongoing environmental...Read more
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Capital expenditures decreased $26.1 million...Read more
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Non-GAAP financial measures should be...Read more
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Effective December 20, 2019, Commerce...Read more
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Effective March 31, 2020, Commerce...Read more
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Effective March 9, 2017, Commerce...Read more
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Non-GAAP Measures The following tables...Read more
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As of year-end 2021, the...Read more
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A 25 basis point increase...Read more
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We continue to invest in...Read more
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Management believes that the following...Read more
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Income Taxes - We account...Read more
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Additionally, we continue to execute...Read more
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The Second Amended and Restated...Read more
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Business Overview We produce and...Read more
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Our differentiated Nylon 6 products...Read more
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The Company had approximately $1...Read more
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Although there are no unrecognized...Read more
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The following tables also present...Read more
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Starting in the second half...Read more
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These agreements typically contain formula-based...Read more
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We anticipate that our estimated...Read more
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Financial Statements, Disclosures and Schedules

Inside this 10-K Annual Report

Material Contracts, Statements, Certifications & more

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

Exhibit 23.1: Consents Of Experts And Counsel

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-K Annual Report
Accession Number: 0001673985-22-000010
Submitted to the SEC: Fri Feb 18 2022 4:39:51 PM EST
Accepted by the SEC: Fri Feb 18 2022
Period: Friday, December 31, 2021
Industry: Plastic Materials Synth Resins And Nonvulcan Elastomers