Slide 1: 3Q 2020 Earnings Presentation
3Q 2020 Earnings Presentation October 30, 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 Strong Cash Flow Generation, Cost Management and Capital Discipline • 3Q20 Results Reflect Diverse Product Portfolio and Low-Cost Position – Mitigating COVID-19 Impacts – Health and Safety of Our Employees is Top Priority – Successfully Executed Planned Plant Turnaround – Sales Volume Retur
Slide 4: 3Q 2020 Financial Summary
3Q 2020 Financial Summary Strong Volume Growth and Cash Flow Generation ($ Millions, Except Per Share Amounts) 3Q 2019 3Q 2020 Comments • Sales Down (9%): Volume +5%, Price (14%) Sales $310.6 $281.9 – Market Pricing (1%), Raw Material Pass Through (13%) • Planned Plant Turnaround (~$20M) in 3Q20 vs.
Slide 5: 3Q 2020 EBITDA Bridge
3Q 2020 EBITDA Bridge Productivity Actions Partially Mitigating Planned Plant Turnaround and Unfavorable Mix Impacts ($M) $1 • Raws ~$5M Targeting $20-$25M reduction (lower natural gas and sulfur) $8 YoY for full year 2020 • Market Pricing (~$4M) • Unfavorable Mix ‒ CPL/Nylon ‒ Nylon exports ‒ Ammon
Slide 6: Industry Pricing And Spreads
Industry Pricing And Spreads Nylon Ammonium Sulfate Chemical Intermediates Industry Spreads Stabilizing From 2Q20 Typical Seasonality, Lower Energy Environment Improved Supply and Demand Balance 3Q20 YOY 3Q20 vs. 2Q20 3Q20 YOY 3Q20 vs. 2Q20 3Q20 YOY 3Q20 vs. 2Q20 Global Composite (15%) (2%) Acetone,
Slide 7: Cash Flow
Cash Flow Robust Cash Generation, Improving Outlook 3Q20 Cash Flow ($M) Net Income ($1) Depreciation & Amortization $15 • $20M cash generated from working capital with a $10M reduction in inventory, as expected Inventory $10 • Focused cost management and capital discipline Other Working Capital $10
Slide 8: Net Debt / Leverage
Net Debt / Leverage Leverage Ratio Expected to Decline in 4Q20 Into Target Range Net Debt / Trailing 12-Month (TTM) Adjusted EBITDA Ratios Comments 4 • Net Debt includes line of credit from revolving credit facility less Net Debt / TTM Adjusted EBITDA cash balances 3 – Excludes operating leases and
Slide 9: Industry Performance
Industry Performance Diverse Product Portfolio Supporting Sustainable Earnings AdvanSix Sales By End Market • Strong demand for Chemical Coatings, Intermediates into paints and Adhesives coatings – DIY home improvement Other • Improving residential trends – Improved carpet demand from • Food packagi
Slide 10: 2021 Priorities
2021 Priorities Committed to Delivering Long-Term Shareholder Value Continued Operational Excellence and Improving Through-Cycle Profitability • Improving production rate, cost, quality and yield • Targeting high plant utilization rates and delivering strong operational leverage from our core assets
Slide 11: Appendix
APPENDIX 11 3Q 2020 Earnings Presentation – October 30, 2020
Slide 12: 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 2021E -- $11-$13M -- $14-$17M $25-$30M • Timing driven by compliance, inspection and sustaining a
Slide 13: Reconciliation of Non-GAAP Measures to GAAP Measures
APPENDIX Reconciliation of Non-GAAP Measures to GAAP Measures 13 3Q 2020 Earnings Presentation – October 30, 2020
Slide 14: 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 15: 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
Slide 16: Reconciliation Of Net Income To Adjusted EBITDA
Reconciliation Of Net Income To Adjusted EBITDA (in $ thousands) (5) EBITDA is a non-GAAP measure defined as Net Income before Interest, Income Taxes, Depreciation and Amortization (6) Adjusted EBITDA is defined as EBITDA plus Non-cash stock based compensation, non-recurring, unusual or extraordinar
Slide 17: Reconciliation Of Net Debt To TTM Adjusted EBITDA Ratio
Reconciliation Of Net Debt And Calculation Of Net Debt To Trailing 12-Months (TTM) Adjusted EBITDA Ratio (in $ thousands) The leverage ratio of Net debt to TTM Adjusted EBITDA is a financial measure that the Company believes is useful to investors and financial analysts in evaluating the Company’s l