AdvanSix Announces First Quarter 2024 Financial Results
1Q24 Sales of
1Q24 Earnings Per Share of (
1Q24 results include approximately
Continued commitment to corporate social responsibility and sustainability performance with ISCC PLUS certification, and
First Quarter 2024 Summary
- Sales down 16% versus prior year driven by 9% unfavorable impact of market-based pricing and a 7% decrease in volume primarily due to the operational disruption at our Frankford site
-
Net Loss of
($17.4) million , a decrease of$52.4 million versus the prior year -
Adjusted EBITDA of
$0.6 million , a decrease of$64.8 million versus the prior year -
Cash Flow from Operations of
($36.2) million , a decrease of$37.8 million versus the prior year -
Capital Expenditures of
$35.4 million , an increase of$10.8 million versus the prior year -
Free Cash Flow of
($71.6) million , a decrease of$48.6 million versus the prior year -
Returned
$11 million of cash to shareholders through repurchases and dividends in 1Q24
“I would like to once again thank our customers, partners and teammates for their collaboration throughout the first quarter to mitigate value chain impact as we navigated the operational disruption at our Frankford manufacturing site. The total unfavorable impact to pre-tax income in the first quarter was approximately
Summary first quarter 2024 financial results for the Company are included below:
($ in Thousands, Except Earnings Per Share) |
1Q 2024 |
|
1Q 2023 |
Sales |
|
|
|
Net Income (Loss) |
(17,396) |
|
34,954 |
Diluted Earnings Per Share |
( |
|
|
Adjusted Diluted Earnings Per Share (1) |
( |
|
|
Adjusted EBITDA (1) |
595 |
|
65,354 |
Adjusted EBITDA Margin % (1) |
0.2% |
|
16.3% |
Cash Flow from Operations |
(36,202) |
|
1,575 |
Free Cash Flow (1)(2) |
(71,590) |
|
(23,028) |
(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
Sales by product line and approximate percentage of total sales are included below:
($ in Thousands) |
1Q 2024 |
|
1Q 2023 |
||||||
|
Sales |
|
% of Total |
|
Sales |
|
% of Total |
||
Nylon |
$ |
84,389 |
|
25% |
|
$ |
99,372 |
|
25% |
Caprolactam |
|
61,476 |
|
18% |
|
|
72,390 |
|
18% |
Ammonium Sulfate |
|
85,263 |
|
25% |
|
|
114,218 |
|
28% |
Chemical Intermediates |
|
105,701 |
|
32% |
|
|
114,564 |
|
29% |
Total |
$ |
336,829 |
|
100% |
|
$ |
400,544 |
|
100% |
Adjusted EBITDA of
Adjusted earnings per share of (
Cash flow from operations of
Outlook
- Expect second quarter 2024 ammonium sulfate sequential pricing improvement amid continued sulfur demand growth and tight North American supply
- Expect balanced to tight global acetone supply and demand conditions
- Expect nylon industry spreads to modestly improve through 2024 off 2023 trough levels
-
Continue to expect Capital Expenditures of
$140 million to$150 million in 2024, reflecting increased spend to address critical enterprise risk mitigation and growth projects including our SUSTAIN (SustainableU.S. Sulfate to Accelerate Increased Nutrition) program -
Continue to expect pre-tax income impact of planned plant turnarounds to be
$38 to$43 million in 2024; Shifting larger planned turnaround to 4Q24 from 3Q24
"As we look forward into the second quarter and beyond, there are a number of tailwinds at our back including strengthening fertilizer pricing, a continued tight global acetone supply and demand environment, an anticipated modest improvement in nylon industry spreads, and a return to expected robust plant utilization rates. With our proven ability to manage through various cycles, we remain highly focused on executing all levers in our control while driving progress on our long-term potential,” concluded Kane.
Dividend
The Company's Board of Directors declared a quarterly cash dividend of
Conference Call Information
About
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 such as "expect," "anticipate," "estimate," “outlook,” "project," "strategy," "intend," "plan," "target," "goal," "may," "will," "should" and "believe" and other variations or similar terminology and expressions. 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
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.
|
|||||||
Condensed Consolidated Balance Sheets |
|||||||
(Unaudited) |
|||||||
(Dollars in thousands, except share and per share amounts) |
|||||||
|
|
|
|
||||
ASSETS |
|
|
|
||||
Current assets: |
|
|
|
||||
Cash and cash equivalents |
$ |
20,633 |
|
|
$ |
29,768 |
|
Accounts and other receivables – net |
|
171,196 |
|
|
|
165,393 |
|
Inventories – net |
|
190,921 |
|
|
|
211,831 |
|
Taxes receivable |
|
8 |
|
|
|
1,434 |
|
Other current assets |
|
8,549 |
|
|
|
11,378 |
|
Total current assets |
|
391,307 |
|
|
|
419,804 |
|
|
|
|
|
||||
Property, plant and equipment – net |
|
861,982 |
|
|
|
852,642 |
|
Operating lease right-of-use assets |
|
86,835 |
|
|
|
95,805 |
|
|
|
56,192 |
|
|
|
56,192 |
|
Intangible assets |
|
45,431 |
|
|
|
46,193 |
|
Other assets |
|
26,236 |
|
|
|
25,384 |
|
Total assets |
$ |
1,467,983 |
|
|
$ |
1,496,020 |
|
|
|
|
|
||||
LIABILITIES |
|
|
|
||||
Current liabilities: |
|
|
|
||||
Accounts payable |
$ |
196,772 |
|
|
$ |
259,068 |
|
Accrued liabilities |
|
46,771 |
|
|
|
44,086 |
|
Income taxes payable |
|
935 |
|
|
|
8,033 |
|
Operating lease liabilities – short-term |
|
28,358 |
|
|
|
32,053 |
|
Deferred income and customer advances |
|
11,286 |
|
|
|
15,678 |
|
Total current liabilities |
|
284,122 |
|
|
|
358,918 |
|
|
|
|
|
||||
Deferred income taxes |
|
152,160 |
|
|
|
151,059 |
|
Operating lease liabilities – long-term |
|
58,621 |
|
|
|
63,961 |
|
Line of credit – long-term |
|
245,000 |
|
|
|
170,000 |
|
Postretirement benefit obligations |
|
4,790 |
|
|
|
3,660 |
|
Other liabilities |
|
10,133 |
|
|
|
9,185 |
|
Total liabilities |
|
754,826 |
|
|
|
756,783 |
|
|
|
|
|
||||
STOCKHOLDERS' EQUITY |
|
|
|
||||
Common stock, par value |
|
329 |
|
|
|
326 |
|
Preferred stock, par value |
|
— |
|
|
|
— |
|
|
|
(61 |
) |
|
|
(58 |
) |
Additional paid-in capital |
|
133,823 |
|
|
|
138,046 |
|
Retained earnings |
|
583,218 |
|
|
|
605,067 |
|
Accumulated other comprehensive loss |
|
(4,152 |
) |
|
|
(4,144 |
) |
Total stockholders' equity |
|
713,157 |
|
|
|
739,237 |
|
Total liabilities and stockholders' equity |
$ |
1,467,983 |
|
|
$ |
1,496,020 |
|
|
|||||||
Condensed Consolidated Statements of Operations |
|||||||
(Unaudited) |
|||||||
(Dollars in thousands, except share and per share amounts) |
|||||||
|
Three Months Ended
|
||||||
|
|
2024 |
|
|
|
2023 |
|
Sales |
$ |
336,829 |
|
|
$ |
400,544 |
|
|
|
|
|
||||
Costs, expenses and other: |
|
|
|
||||
Costs of goods sold |
|
333,864 |
|
|
|
330,042 |
|
Selling, general and administrative expenses |
|
23,593 |
|
|
|
25,114 |
|
Interest expense, net |
|
2,699 |
|
|
|
1,267 |
|
Other non-operating (income) expense, net |
|
90 |
|
|
|
(108 |
) |
Total costs, expenses and other |
|
360,246 |
|
|
|
356,315 |
|
|
|
|
|
||||
Income (loss) before taxes |
|
(23,417 |
) |
|
|
44,229 |
|
Income tax expense (benefit) |
|
(6,021 |
) |
|
|
9,275 |
|
Net Income (loss) |
$ |
(17,396 |
) |
|
$ |
34,954 |
|
|
|
|
|
||||
Earnings per common share |
|
|
|
||||
Basic |
$ |
(0.65 |
) |
|
$ |
1.27 |
|
Diluted |
$ |
(0.65 |
) |
|
$ |
1.22 |
|
|
|
|
|
||||
Weighted average common shares outstanding |
|
|
|
||||
Basic |
|
26,878,660 |
|
|
|
27,601,784 |
|
Diluted |
|
26,878,660 |
|
|
|
28,586,563 |
|
|
|||||||
Condensed Consolidated Statements of Cash Flows |
|||||||
(Unaudited) |
|||||||
(Dollars in thousands) |
|||||||
|
Three Months Ended
|
||||||
|
|
2024 |
|
|
|
2023 |
|
Cash flows from operating activities: |
|
|
|
||||
Net income (loss) |
$ |
(17,396 |
) |
|
$ |
34,954 |
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
||||
Depreciation and amortization |
|
19,102 |
|
|
|
17,845 |
|
Loss on disposal of assets |
|
89 |
|
|
|
168 |
|
Deferred income taxes |
|
1,108 |
|
|
|
(170 |
) |
Stock-based compensation |
|
2,211 |
|
|
|
2,013 |
|
Amortization of deferred financing fees |
|
155 |
|
|
|
155 |
|
Changes in assets and liabilities, net of business acquisitions: |
|
|
|
||||
Accounts and other receivables |
|
(5,818 |
) |
|
|
14,007 |
|
Inventories |
|
20,910 |
|
|
|
(9,133 |
) |
Taxes receivable |
|
1,426 |
|
|
|
8,748 |
|
Accounts payable |
|
(52,995 |
) |
|
|
(54,489 |
) |
Income taxes payable |
|
(7,098 |
) |
|
|
1,101 |
|
Accrued liabilities |
|
2,150 |
|
|
|
(8,408 |
) |
Deferred income and customer advances |
|
(4,392 |
) |
|
|
(8,758 |
) |
Other assets and liabilities |
|
4,346 |
|
|
|
3,542 |
|
Net cash provided by (used for) operating activities |
|
(36,202 |
) |
|
|
1,575 |
|
|
|
|
|
||||
Cash flows from investing activities: |
|
|
|
||||
Expenditures for property, plant and equipment |
|
(35,388 |
) |
|
|
(24,603 |
) |
Other investing activities |
|
(1,419 |
) |
|
|
(1,003 |
) |
Net cash used for investing activities |
|
(36,807 |
) |
|
|
(25,606 |
) |
|
|
|
|
||||
Cash flows from financing activities: |
|
|
|
||||
Borrowings from line of credit |
|
184,500 |
|
|
|
78,000 |
|
Payments of line of credit |
|
(109,500 |
) |
|
|
(66,000 |
) |
Principal payments of finance leases |
|
(239 |
) |
|
|
(231 |
) |
Dividend payments |
|
(4,290 |
) |
|
|
(4,020 |
) |
Purchase of treasury stock |
|
(7,023 |
) |
|
|
(13,499 |
) |
Issuance of common stock |
|
426 |
|
|
|
622 |
|
Net cash provided by (used for) financing activities |
|
63,874 |
|
|
|
(5,128 |
) |
|
|
|
|
||||
Net change in cash and cash equivalents |
|
(9,135 |
) |
|
|
(29,159 |
) |
Cash and cash equivalents at beginning of period |
|
29,768 |
|
|
|
30,985 |
|
Cash and cash equivalents at the end of period |
$ |
20,633 |
|
|
$ |
1,826 |
|
|
|
|
|
||||
Supplemental non-cash investing activities: |
|
|
|
||||
Capital expenditures included in accounts payable |
$ |
13,442 |
|
|
$ |
8,193 |
|
|
|||||||
Non-GAAP Measures |
|||||||
(Dollars in thousands, except share and per share amounts) |
|||||||
Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow |
|||||||
|
Three Months Ended
|
||||||
|
|
2024 |
|
|
|
2023 |
|
Net cash provided by (used for) operating activities |
$ |
(36,202 |
) |
|
$ |
1,575 |
|
Expenditures for property, plant and equipment |
|
(35,388 |
) |
|
|
(24,603 |
) |
Free cash flow (1) |
$ |
(71,590 |
) |
|
$ |
(23,028 |
) |
|
|
|
|
||||
(1) Free cash flow is a non-GAAP measure defined as Net cash provided by operating activities less Expenditures for property, plant and equipment |
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 Adjusted EBITDA and Earnings Per Share to Adjusted Earnings Per Share |
|||||||
|
Three Months Ended
|
||||||
|
|
2024 |
|
|
|
2023 |
|
Net Income (Loss) |
$ |
(17,396 |
) |
|
$ |
34,954 |
|
Non-cash stock-based compensation |
|
2,211 |
|
|
|
2,013 |
|
Non-recurring, unusual or extraordinary income |
|
— |
|
|
|
— |
|
Non-cash amortization from acquisitions |
|
532 |
|
|
|
532 |
|
Non-recurring M&A costs |
|
— |
|
|
|
— |
|
Benefit from income taxes relating to reconciling items |
|
(465 |
) |
|
|
(435 |
) |
Adjusted Net Income (Loss) |
|
(15,118 |
) |
|
|
37,064 |
|
Interest expense, net |
|
2,699 |
|
|
|
1,267 |
|
Income tax expense (benefit) - Adjusted |
|
(5,556 |
) |
|
|
9,710 |
|
Depreciation and amortization - Adjusted |
|
18,570 |
|
|
|
17,313 |
|
Adjusted EBITDA |
$ |
595 |
|
|
$ |
65,354 |
|
|
|
|
|
||||
Sales |
$ |
336,829 |
|
|
$ |
400,544 |
|
|
|
|
|
||||
Adjusted EBITDA Margin (2) |
|
0.2 |
% |
|
|
16.3 |
% |
|
|
|
|
||||
(2) Adjusted EBITDA Margin is defined as Adjusted EBITDA divided by Sales |
|
Three Months Ended
|
|||||
|
|
2024 |
|
|
|
2023 |
Net Income (Loss) |
$ |
(17,396 |
) |
|
$ |
34,954 |
Adjusted Net Income (Loss) |
|
(15,118 |
) |
|
|
37,064 |
|
|
|
|
|||
Weighted-average number of common shares outstanding - basic |
|
26,878,660 |
|
|
|
27,601,784 |
Dilutive effect of equity awards and other stock-based holdings |
|
— |
|
|
|
984,779 |
Weighted-average number of common shares outstanding - diluted |
|
26,878,660 |
|
|
|
28,586,563 |
|
|
|
|
|||
EPS - Basic |
$ |
(0.65 |
) |
|
$ |
1.27 |
EPS - Diluted |
$ |
(0.65 |
) |
|
$ |
1.22 |
Adjusted EPS - Basic |
$ |
(0.56 |
) |
|
$ |
1.34 |
Adjusted EPS - Diluted |
$ |
(0.56 |
) |
|
$ |
1.30 |
The Company believes the non-GAAP financial measures presented in this release 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. |
|
||||||
Appendix |
||||||
(Pre-tax income impact, Dollars in millions) |
||||||
|
|
|
|
|
|
|
Planned Plant Turnaround Schedule (3) |
||||||
|
1Q |
2Q |
3Q |
4Q |
FY |
Primary Unit Operation |
2017 |
— |
|
|
|
|
Sulfuric Acid |
2018 |
|
|
|
— |
|
Ammonia |
2019 |
— |
|
|
|
|
Sulfuric Acid |
2020 |
|
|
|
|
|
Ammonia |
2021 |
|
|
— |
|
|
Sulfuric Acid |
2022 |
|
|
|
— |
|
Ammonia |
2023 |
|
|
|
— |
|
Sulfuric Acid |
2024E |
|
|
|
|
|
Ammonia |
(3) Primarily reflects the impact of fixed cost absorption, maintenance expense, and the purchase of feedstocks which are normally manufactured by the Company. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20240502477023/en/
Media
(973) 526-1615
janeen.lawlor@advansix.com
Investors
(973) 526-1700
adam.kressel@advansix.com
Source: