Slide 1: 2Q 2020 Earnings Presentation
2Q 2020 Earnings Presentation July 31, 2020
Slide 2: Forward Looking Statements
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
Slide 3: Overview
Overview Focus on Safe, Stable and Sustainable Operations • 2Q20 Results Reflect Strength of Vertical Integration and Low-Cost Position • Mitigating COVID-19 Impacts – Health and Safety of Our Employees is Top Priority – Maintaining Operations and Adjusting Output to Changes in Mix and Demand – Disc
Slide 4: 2Q 2020 Financial Summary
2Q 2020 Financial Summary Results Reflect Vertical Integration and Global Low-Cost Position ($ Millions, Except Per Share Amounts) 2Q 2019 2Q 2020 Comments • Sales Down (33%): Volume (19%), Price (14%) Sales $345.2 $233.0 – Market Pricing (3%), Raw Material Pass Through (11%) • Unfavorable Impact of
Slide 5: 2Q 2020 EBITDA Bridge
2Q 2020 EBITDA Bridge Productivity Actions and Lower Raws Partially Mitigating Market Pricing and Volume Headwinds ($M) $4 • Raws ~$8M (lower natural gas and sulfur) Targeting $15-$20M reduction YoY for full year • Market Pricing (~$12M) 2020 in addition to the $13 $19 benefits of natural gas boiler
Slide 6: Industry Pricing And Spreads
Industry Pricing And Spreads Nylon Ammonium Sulfate Chemical Intermediates Challenging End Market Conditions Strong Demand, Lower Energy Environment Improved Supply and Demand Balance 2Q20 YOY 2Q20 vs. 1Q20 2Q20 YOY 2Q20 vs. 1Q20 2Q20 YOY 2Q20 vs. 1Q20 Global Composite (26%) 4% Acetone, Sm/Med Buyer
Slide 7: Industry Considerations Entering 2H20
Industry Considerations Entering 2H20 Diverse Product Portfolio Supporting Overall Performance Nylon Ammonium Sulfate Chemical Intermediates • Carpet demand weak – residential • Typical ammonium sulfate seasonality • Acetone imports into U.S. remain low consumer preferences/housing pace of expected
Slide 8: 2020 Outlook
2020 Outlook Mitigating COVID-19 Risks; Focused Cost Management and Capital Discipline Considerations 2020 Outlook Impacting Outlook • Residential / Non-Res construction • Challenging demand environment expected to continue Nylon • Optimizing mix across end uses, applications and geographies • Auto
Slide 9: APPENDIX
APPENDIX 9 2Q 2020 Earnings Presentation – July 31, 2020
Slide 10: Ammonium Sulfate Seasonality
Ammonium Sulfate Seasonality Typically See Seasonal Decline 2Q to 3Q Cornbelt AS Price (Avg sequential price change 2010-2020) • New North America fertilizer season 10% commencing 3Q 7% • Pricing typically declines with new season fill 5% in 3Q and strengthens into Spring planting 5% 3% season 0% •
Slide 11: Planned Plant Turnarounds
Planned Plant Turnarounds Pre-Tax Income Impact by Quarter (1) 1Q 2Q 3Q 4Q FY 2017 -- ~$10M ~$4M ~$20M ~$34M 2018 ~$2M ~$10M ~$30M -- ~$42M 2019 -- ~$5M ~$5M ~$25M ~$35M 2020E ~$2M ~$7M ~$20M ~$3M ~$32M • Timing driven by compliance, inspection and sustaining asset base • Critical to supporting high
Slide 12: Reconciliation of Non-GAAP Measures to GAAP Measures
APPENDIX Reconciliation of Non-GAAP Measures to GAAP Measures 12 2Q 2020 Earnings Presentation – July 31, 2020
Slide 13: Reconciliation Of Net Cash Provided By Operating Activities To Free Cash Flow
Reconciliation Of Net Cash Provided By Operating Activities To Free Cash Flow (in $ thousands) (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 investor
Slide 14: Reconciliation Of Net Income To EBITDA
Reconciliation Of Net Income To EBITDA (in $ thousands) (2) EBITDA is a non-GAAP measure defined as Net Income before Interest, Income Taxes, Depreciation and Amortization (3) Prior year one-time Pottsville restructuring charges reflect the closure of the Company’s Pottsville, Pennsylvania films pla