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PRESS RELEASE from provider: Business Wire
This content is a press release from our partner Business Wire. The AP newsroom and editorial departments were not involved in its creation.

AdvanSix Announces Fourth Quarter and Full Year 2018 Financial Results

February 22, 2019

PARSIPPANY, N.J.--(BUSINESS WIRE)--Feb 22, 2019--AdvanSix (NYSE: ASIX) today announced its financial results for the fourth quarter and full year ending December 31, 2018. The Company generated strong results across a number of measures in the quarter, including sales volume, income and operating cash flow.

Fourth Quarter 2018 Highlights

Summary fourth quarter 2018 financial results for the Company are included below:

Fourth Quarter 2018 Results

“AdvanSix delivered a strong fourth quarter to close out a dynamic year. 2018 began with a significant weather event, which the organization successfully managed through, demonstrating our resiliency and ability to perform in any environment. Throughout the year, we maintained our focus on safe and stable operations, captured the benefit of improved market-based pricing, and generated higher free cash flow. We initiated two high-return capital projects in 2018 driving future growth and cost saving benefits for sustained long-term performance,” said Erin Kane, president and CEO of AdvanSix. “Further, our additional $75 million repurchase authorization reflects confidence in ongoing cash flow performance and provides us with flexibility as we continue to mature our capital allocation strategy.”

Sales of $386.6 million in the quarter increased approximately 4% versus the prior year. Sales volume increased approximately 5% versus the prior year primarily due to high utilization rates at our manufacturing sites and the unfavorable impact of a planned plant turnaround in the fourth quarter of 2017. Pricing overall decreased 1% versus the prior year, including a 4% unfavorable impact from raw material pass-through pricing following cost decreases in benzene and propylene (inputs to cumene which is a key feedstock to our products). Market-based pricing was favorable by 3% compared to the prior year reflecting improved industry supply and demand dynamics in our ammonium sulfate, nylon, and caprolactam product lines, partially offset by softness in chemical intermediates due to the lengthening of acetone supply globally.

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

EBITDA of $42.8 million in the quarter increased $4.0 million versus the prior year primarily due to the unfavorable impact of the planned plant turnaround in the fourth quarter of 2017 (approximately $20 million) and the benefit of higher market-based pricing, partially offset by increased manufacturing costs, a $6 million charge to bad debt expense related to a Brazilian fertilizer customer filing for judicial reorganization and a prior year $4.4 million non-cash LIFO inventory reserve adjustment. Fourth quarter 2018 results included an approximately $2.9 million benefit from business interruption insurance advances related to the 1Q18 weather event claim.

Earnings per share of $0.68 in the quarter decreased versus $2.31 in the prior year period. Fourth quarter 2017 results included an approximately $1.71 per share one-time net tax benefit primarily related to re-measurement of net deferred tax liability at a lower corporate tax rate.

Cash flow from operations of $45.7 million in the quarter increased $9.5 million versus the prior year primarily due to the favorable impact of changes in working capital and the one-time net tax benefit discussed above driving a decline in net income and offsetting increase in deferred taxes. Capital expenditures of $36.6 million in the quarter increased $17.3 million versus the prior year primarily due to an increase in spend on growth and cost savings projects.

Summary full year 2018 financial results for the Company are included below:

Full Year 2018 Results

Full Year 2018 Highlights

Outlook

“In 2019, we expect improved financial and operational performance. We’re optimizing production output and maximizing higher value product mix, and we’ll begin to see the benefits of our investments in high-return capital projects in the second half of the year. Despite a more uncertain near-term macro environment and continued softness in North America acetone industry spreads, we expect strong plant utilization rates to continue. We’re executing against our focused strategy and remain confident in our ability to deliver long-term value to our shareholders,” added 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 (786) 789-4797 (domestic) or (888) 254-3590 (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 2018 earnings call. The live webcast of the investor call as well as related presentation materials can be accessed at http://investors.advansix.com. Investors can hear a replay of the conference call from 12 noon ET on February 22 until 12 noon ET on March 1 by dialing (719) 457-0820 (domestic) or (888) 203-1112 (international). The access code is 1606859.

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 our Nylon 6 integrated manufacturing chain. More information on AdvanSix can be found at http://www.advansix.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, 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 U.S. and globally; growth rates and cyclicality of the industries we serve; the impact of scheduled turnarounds and significant unplanned downtime and 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; our operations requiring substantial capital; risks associated with our indebtedness including with respect to restrictive covenants; failure to develop and commercialize new products or technologies; loss of significant customer relationships; adverse trade and tax policies; extensive environmental, health and safety laws that apply to our operations; hazards associated with chemical manufacturing, storage and transportation; litigation associated with chemical manufacturing and our business operations generally; inability to acquire and integrate businesses, assets, products or technologies; protection of our intellectual property and proprietary information; prolonged work stoppages as a result of labor difficulties; cybersecurity and data privacy incidents; failure to maintain effective internal controls; disruptions in transportation and logistics; 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; fluctuations in our stock price; and changes in laws or regulations applicable to our business. 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 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 Annual Report on Form 10-K for the year ended December 31, 2017 and our subsequent Quarterly Reports on Form 10-Q.

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.

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.

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

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

View source version on businesswire.com:https://www.businesswire.com/news/home/20190222005188/en/

CONTACT: Media

Debra Lewis

(973) 526-1767

debra.lewis@advansix.com

Investors

Adam Kressel

(973) 526-1700

adam.kressel@advansix.com

KEYWORD: UNITED STATES NORTH AMERICA NEW JERSEY

INDUSTRY KEYWORD: ENERGY OTHER ENERGY MANUFACTURING CHEMICALS/PLASTICS PACKAGING OTHER MANUFACTURING NATURAL RESOURCES AGRICULTURE

SOURCE: AdvanSix

Copyright Business Wire 2019.

PUB: 02/22/2019 06:30 AM/DISC: 02/22/2019 06:31 AM

http://www.businesswire.com/news/home/20190222005188/en