ADVANSIX INC.

(ASIX)
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Delayed Nyse  -  04:00 2022-08-09 pm EDT
37.87 USD   -2.62%
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AdvanSix : 2Q22 Earnings Presentation

08/05/2022 | 06:46am EDT

2Q 2022

Earnings Presentation

August 5, 2022

Forward Looking Statements

This presentation 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 U.S. and globally, including the impact of the coronavirus (COVID-19) pandemic and any resurgences; the potential effects of inflationary pressures, labor market shortages and supply chain issues; instability or volatility in financial markets or other unfavorable economic or business conditions caused by geopolitical concerns, including as a result of the conflict between Russia and Ukraine; the scope, shape and pace of recovery of the pandemic including the impact of social and economic restrictions and other containment measures taken to combat virus transmission; the effect on our customers' demand for our products and our suppliers' ability to manufacture and deliver our raw materials, including implications of reduced refinery utilization in the U.S.; our ability to sell and provide our goods and services; the ability of our customers to pay for our products; any closures of our and our customers' offices and facilities; risks associated with increased phishing, compromised business emails and other cybersecurity attacks and disruptions to our technology infrastructure; risks associated with employees working remotely or operating with a reduced workforce; risks associated with our indebtedness including compliance with financial and restrictive covenants, and our ability to access capital on reasonable terms, at a reasonable cost, or at all, due to economic conditions; 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, natural disasters, pandemics and geopolitical conflicts and related events; price fluctuations, cost increases and supply of raw materials; our operations and growth projects requiring substantial capital; growth rates and cyclicality of the industries we serve including global changes in supply and demand; 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 or otherwise; cybersecurity, data privacy incidents and disruptions to our technology infrastructure; failure to maintain effective internal controls; our ability to declare and pay quarterly cash dividends and the amounts and timing of any future dividends; our ability to repurchase our common stock and the amount and timing of any future repurchases; disruptions in supply chain, transportation and logistics; potential for uncertainty regarding qualification for tax treatment of our spin-off; 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 presentation. 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 (SEC), including the risk factors in Part 1, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2021, as updated in subsequent reports filed with the SEC.

Non-GAAP Financial Measures

This presentation 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 presentation. Investors are urged to consider carefully the comparable GAAP measures and the reconciliations to those measures provided. Non-GAAP measures in this presentation may be calculated in a way that is not comparable to similarly-titled measures reported by other companies.

2 2Q 2022 Earnings Presentation - August 5, 2022

Overview

Business Model and Diverse Portfolio Support Robust Performance

  • Robust quarterly sales, earnings and cash flow in 2Q22
    • Sales of $584M, net income of $65M and cash flow from operations of $96M
  • Targeting significant earnings growth in 2022 supported by strength of our integrated business model and diverse end market exposure
  • Integration of U.S. Amines progressing very well as expected
  • Increasing quarterly cash dividend 16% to $0.145 per share
  • Repurchased 87,251 shares in 2Q22 for ~$3M; Repurchased 70,554 shares in July for ~$2.5M

2Q22 Sales up YoY

+33%

2Q22 Adjusted EBITDA

$105M

2Q22 Free Cash Flow

$78M

Increasing Quarterly

Dividend

+16%

See Appendix in this presentation for a reconciliation of Adjusted EBITDA and Free Cash Flow, which are non-GAAP

3

2Q 2022 Earnings Presentation - August 5, 2022

measures; Free cash flow = net cash provided by operating activities less capital expenditures

2Q 2022 Financial Summary

Commercial Execution Supports Strong Sales, Earnings and Cash Flow

($M, except per share amounts)

Highlights

Sales

Adjusted EBITDA

+33%

+32%

Sales: Price +32%, M&A +5%, Volume (4%)

- Market-Based Pricing +26%

- Raw Material Pass Through +6%

$438

$584

$80

$105

EBITDA increase driven primarily by improved

market-based pricing, net of increased raw material

2Q21

2Q22

2Q21

2Q22

costs, particularly natural gas and sulfur, partially

offset by lower sales volume, inflation, and higher

Adjusted

18.2%

18.1%

utilities cost driven by natural gas prices

EBITDA Margin

Adjusted Diluted EPS

Free Cash Flow

2Q22 effective tax rate of 23.5% vs. 2Q21 effective

+40%

+88%

tax rate of 23.8%

Cash Flow From Operations $96M, up $44M vs.

$1.64

$2.30

$78

prior year

$42

Capex $18M, up $7M vs. prior year

2Q21

2Q22

2Q21

2Q22

Net Income

$44.1

$65.2

Diluted EPS

$1.53

$2.23

4

2Q 2022 Earnings Presentation - August 5, 2022 See Appendix in this presentation for a reconciliation of Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted EPS and Free Cash Flow, which are

non-GAAP measures; Free cash flow = net cash provided by operating activities less capital expenditures

2Q 2022 Adjusted EBITDA Bridge

Strong Commercial Performance More Than Offset Inflation and Volume

($M)

Driving value through strong

$80

commercial excellence

$57

Ammonium Sulfate

CPL/Nylon

Chemical Intermediates

$3

($23)

  • Increased plant spend primarily driven by utilities due to higher natural gas prices
  • Non-rawmaterial inflation

($12)

  • Lower sales volume partially offset by
  • Contribution from U.S. Amines
  • Lower SG&A costs

$105

2Q21Price - Raws Spread Planned Plant Turnarounds Plant Spend / Non-RawVolume / Other2Q22 Material Inflation

See Appendix in this presentation for a reconciliation of Adjusted EBITDA, which is a non-GAAP measure

5 2Q 2022 Earnings Presentation - August 5, 2022

This is an excerpt of the original content. To continue reading it, access the original document here.

Disclaimer

AdvanSix Inc. published this content on 05 August 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 05 August 2022 10:45:03 UTC.


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Financials (USD)
Sales 2022 2 095 M - -
Net income 2022 223 M - -
Net Debt 2022 - - -
P/E ratio 2022 5,25x
Yield 2022 1,32%
Capitalization 1 064 M 1 064 M -
Capi. / Sales 2022 0,51x
Capi. / Sales 2023 0,54x
Nbr of Employees 1 375
Free-Float 86,0%
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Number of Analysts 3
Last Close Price 37,87 $
Average target price 62,67 $
Spread / Average Target 65,5%
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Managers and Directors
Erin N. Kane President, Chief Executive Officer & Director
Michael Preston Chief Financial Officer & Senior Vice President
Michael L. Marberry Independent Chairman
Darrell K. Hughes Independent Director
Sharon S. Spurlin Independent Director
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