Slide 1: 2Q 2018 Earnings Presentation
August 3, 2018 2Q 2018 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 • Strong 2Q18 results: Sales $400M, up 11%; EPS $0.91, up 10% • High plant utilization rates and favorable supply and demand environment • Cash flow generation continues to improve: 2Q18 Cash flow from operations $33M, up 12% • Repurchased $7.5M of shares through July ($2.7M in 2Q, $4.8M
Slide 4: 2Q 2018 Financial Summary
2Q 2018 Financial Summary 4 Higher Sales, Net Income, and Cash Flow From Operations ($ Millions, Except Per Share Amounts) 2Q 2017 2Q 2018 Comments • Sales Up 11%: Volume +4%, Price +7% Sales $361.4 $400.5 – Raw Material Pass Through +7%, Market Pricing ~Flat EBITDA $54.6 $53.0 • Near Record Plant P
Slide 5: Nylon Industry Outlook
Nylon Industry Outlook 5 Continued Favorable Industry Conditions Globally Nylon Key Industry Spreads (1) • North America supply/demand 2Q18 YoY 2Q18 vs. 1Q18 generally in balance Global Composite BNZ-CPL 34% 1% What We’re • Environmental policy and Asia BNZ-CPL 43% 10% feedstock constraints driving
Slide 6: Ammonium Sulfate (AS) Industry Outlook
Ammonium Sulfate (AS) Industry Outlook 6 Improved Market Dynamics as New ’18/’19 Season Begins Ammonium Sulfate Key Industry Prices (1) • Late start to planting season 2Q18 YoY 2Q18 vs. 1Q18 supported strong 2Q demand Corn Belt Granular AS 4% 1% • AS price movement modest Corn Belt Urea 21% (9%) Wha
Slide 7: Ammonium Sulfate Seasonality
Ammonium Sulfate Seasonality 7 Typically See Seasonal Decline 2Q to 3Q Cornbelt AS Price (Avg sequential price change 2010-2017) • New North America fertilizer season commencing 3Q 10% 9% 5% • Pricing typically declines with new season fill 5% 4% in 3Q and strengthens into Spring planting season 0%
Slide 8: Chemical Intermediates Industry Outlook
Chemical Intermediates Industry Outlook 8 Strong Global Phenol Demand, North America Acetone Imports Pressuring Price Chemical Intermediates Key Industry Prices (1) 2Q18 YoY 2Q18 vs. 1Q18 • Global phenol demand remains strong, high industry utilization Acetone, Large Buyer 13% 5% What We’re rates le
Slide 9: Operational Excellence
Operational Excellence 9 Driving Improved Reliability, Increased Output and Higher Returns Annualized Plant Production • 2Q18 Total Production Up 3% vs. 2012-2015 Average – Continuing to Benefit from Upgrades and Reliability Improvements – Hopewell Caprolactam Increased Output – 2Q18 Production Down
Slide 10: 2H 2018 Framework
2H 2018 Framework 10 3Q18 Planned Plant Turnaround Key Consideration 2H18 vs. 1H18 Expectations • Continued favorable industry conditions globally Nylon • Environmental policy and feedstock constraints to continue influencing China dynamics • New season starting with improved pricing year-over-year
Slide 11: Appendix: Reconciliation of non-GAAP Measures to GAAP Measures
11 Appendix: Reconciliation of non-GAAP Measures to GAAP Measures 2Q 2018 Earnings Presentation – August 3, 2018
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 (in $ thousands) 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
Slide 13: Reconciliation Of Net Income To EBITDA
Reconciliation Of Net Income To EBITDA 13 (in $ thousands) The Company believes these non-GAAP financial measures 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 financia