Slide 1: 2Q 2017 Earnings Presentation
August 10, 2017 2Q 2017 Earnings Presentation
Slide 2: Forward Looking Statements
Forward Looking Statements 2 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 o
Slide 3: Overview
Overview 3 • Continued Strong Results in 2Q17: Sales $361M, Net Income $26M, Cash Flow from Operations $30M • Strong Operating Performance and Production Output Across Manufacturing Sites • Favorable 1H17 Conditions Across Nylon and Intermediates; Nitrogen Fertilizer Fundamentals Remain Challenging
Slide 4: 2Q 2017 Financial Summary
2Q 2017 Financial Summary 4 Improved Financial Results Driven by Strong Operational Performance ($ Millions, Except Per Share Amounts) 2Q 2016 2Q 2017 Comments • Volume +3%, Price +14% Sales $308.4 $361.4 – Raw Material Pass Through +10%, Market Pricing +4% EBITDA $34.1 $54.6 • Improved Production V
Slide 5: Nylon Market Outlook
Nylon Market Outlook 5 Global Caprolactam Supply / Demand Dynamics Normalizing Nylon Key Industry Spreads (1) 2Q17 YoY 2Q17 vs. 1Q17 • Pricing/spreads more regionalized: Global Composite BNZ-CPL 30% (-9%) tighter supply conditions in NA and What We’re Europe, dynamic China supply Asia BNZ-CPL 31% (-
Slide 6: Ammonium Sulfate (AS) Market Outlook
Ammonium Sulfate (AS) Market Outlook 6 AS Pricing Stable Sequentially; Nitrogen Fundamentals Remain Challenging Ammonium Sulfate Key Industry Prices (1) • Global urea supply additions 2Q17 YoY 2Q17 vs. 1Q17 continue to pressure nitrogen Corn Belt Granular AS 0% 1% pricing Corn Belt Urea (-15%) (-22%
Slide 7: Chemical Intermediates Market Outlook
Chemical Intermediates Market Outlook 7 Stable End Market Environment Chemical Intermediates Key Industry Prices (1) • Phenol / Acetone demand 2Q17 YoY 2Q17 vs. 1Q17 steady; Industry turnaround Acetone, Large Buyer 42% (-6%) What We’re activities tighten supply Refinery Grade Propylene 43% (-13%) Se
Slide 8: Operational Excellence
Operational Excellence 8 Driving Higher Uptime, More Stable Production and Higher Returns Annualized Plant Production • 1H17 Production Up 7% vs. Prior Year and 9% Above 2012-2015 Average – Continuing to Benefit from Upgrades and Reliability Improvements • Driving Maturity of our Mechanical Integrit
Slide 9: 2H 2017 Framework
2H 2017 Framework 9 Continued Strong Plant Production, Monitoring Market Pricing 2H17 vs. 1H17 Expectations • North America supply/demand remains balanced Nylon Spreads • Potential capacity adds in China • Seasonal demand to drive pricing Ammonium Sulfate Pricing • Higher export volume 2H17 vs. 1H17
Slide 10: Summary
Summary 10 • Strong Sales, Production, Earnings and Cash Flow in 1H17 • Favorable 1H17 Nylon and Intermediates Environment, While Nitrogen Fertilizer Fundamentals Remain Challenging • Driving Maturity of our Mechanical Integrity Programs, Turnaround Excellence • Sustainable Low-Cost Position, Higher
Slide 11: Appendix: Reconciliation of non-GAAP Measures to GAAP Measures
11 Appendix: Reconciliation of non-GAAP Measures to GAAP Measures 2Q 2017 Earnings Presentation – August 10, 2017
Slide 12: Reconciliation Of Net Cash Provided By Operating Activities To Free Cash Flow
Reconciliation Of Net Cash Provided By Operating 12 Activities To Free Cash Flow Three Months Ended June 30, Six Months Ended June 30, (in $ thousands) 2017 2016 2017 2016 Net Cash Provided by Operating Activities $ 29,586 $ 37,812 $ 60,792 $ 41,853 Expenditures for Property, Plant and Equipment (14
Slide 13: Reconciliation Of Net Income To EBITDA
Reconciliation Of Net Income To EBITDA 13 Three Months Ended June 30, Six Months Ended June 30, (in $ thousands) 2017 2016 2017 2016 Net Income $ 25,766 $ 15,008 $ 53,059 $ 42,402 Interest Expense 1,873 — 3,412 — Income Taxes 15,317 9,213 32,265 25,370 Depreciation and Amortization 11,663 9,869 22,9