Slide 1: 4Q 2018 Earnings Presentation
February 22, 2019 4Q 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 • 4Q18 Sales $387M, up 4% including favorable impact of market-based pricing; EPS $0.68 • 4Q18 pre-tax income results include a ($6M) charge to bad debt expense and $2.9M benefit from business interruption insurance advances related to the 1Q18 weather event claim • Cash flow generation c
Slide 4: 4Q 2018 Financial Summary
4Q 2018 Financial Summary 4 Strong Cash Flow Generation Funding High-Return Capex ($ Millions, Except Per Share Amounts) 4Q 2017 4Q 2018 Comments • Sales Up 4%: Volume +5%, Price (1%) Sales $370.4 $386.6 Quarterly EBITDA Considerations – Raw Material Pass Through (4%), Market Pricing +3% 4Q17 4Q18 E
Slide 5: Nylon Industry Outlook
Nylon Industry Outlook 5 Industry Pricing Adjusting to Lower Input Environment Nylon Key Industry Spreads (1) • North America supply/demand 4Q18 YoY 4Q18 vs. 3Q18 generally in balance Global Composite BNZ-CPL 2% (1%) What We’re • Macro uncertainty for auto and Asia BNZ-CPL 19% 10% Seeing building/co
Slide 6: Ammonium Sulfate (AS) Industry Outlook
Ammonium Sulfate (AS) Industry Outlook 6 Expect Improved Nitrogen Fertilizer Environment Through Spring Planting Season Ammonium Sulfate Key Industry Prices (1) • AS price movement modest 4Q18 YoY 4Q18 vs. 3Q18 relative to recent nitrogen pricing Corn Belt Granular AS 11% 6% Corn Belt Urea 22% 9% Wh
Slide 7: Chemical Intermediates Industry Outlook
Chemical Intermediates Industry Outlook 7 Acetone Oversupply Pressuring Price/Raws Spread Chemical Intermediates Key Industry Prices (1) • Acetone imports in U.S. 4Q18 YoY 4Q18 vs. 3Q18 pressuring regional pricing – Acetone, Small/Medium Buyer (24%) (16%) industry oversupply continues Acetone, Large
Slide 8: Capital Expenditures
Capital Expenditures 8 Execution of High-Return Growth and Cost Saving Projects in 2019 Growth/Cost Savings $140-$150M • Executing against multi-year $150-$200M pipeline of high- return projects; 20%+ IRR target $109M ~33% ~2018 Levels • Relocation of R&D lab to Chesterfield from Colonial Heights ad
Slide 9: Full Year 2019 Outlook
Full Year 2019 Outlook 9 Expect Improved Performance in 2019 • Nylon: expect strong nylon plant utilization rates to continue while navigating through more uncertain near-term auto and building/construction macro environment • Ammonium Sulfate: expect improved nitrogen fertilizer environment to cont
Slide 10: Appendix
10 Appendix 4Q 2018 Earnings Presentation – February 22, 2019
Slide 11: Full Year 2018 Financial Summary
Full Year 2018 Financial Summary 11 Strong Cash Flow Generation, Improved Market-Based Pricing ($ Millions, Except Per Share Amounts) FY 2017 FY 2018 Comments • Sales Up 3%: Volume (2%), Price +5% Sales $1,475.2 $1,515.0 – Raw Material Pass Through +3%, Market Pricing +2% EBITDA $200.8 $146.5 • FY18
Slide 12: Planned Plant Turnarounds
Planned Plant Turnarounds 12 Pre-Tax Income Impact by Quarter (1) 1Q 2Q 3Q 4Q FY 2017 -- ~$10M ~$4M ~$20M ~$34M 2018 ~$2M ~$10M ~$30M -- ~$42M 2019E -- ~$5M ~$5M $25-$30M $35-$40M In-line with 2020E -- -- historical averages • Timing driven by compliance, inspection and sustaining asset base • C
Slide 13: Reconciliation of non-GAAP Measures to GAAP Measures
13 Appendix: Reconciliation of non-GAAP Measures to GAAP Measures 4Q 2018 Earnings Presentation – February 22, 2019
Slide 14: Reconciliation Of Net Cash Provided By Operating Activities To Free Cash Flow
Reconciliation Of Net Cash Provided By Operating 14 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 inves
Slide 15: Reconciliation Of Net Income To EBITDA
Reconciliation Of Net Income To EBITDA 15 (in $ thousands) (2) EBITDA is a non-GAAP measure defined as Net Income before Interest, Income Taxes, Depreciation and Amortization (3) EBITDA margin is defined as EBITDA divided by Sales The Company believes these non-GAAP financial measures provide meanin
Slide 16: Reconciliation Of Net Income And Diluted EPS Excluding One-Time Net Tax Benefit
Reconciliation Of Net Income And Diluted EPS To Net Income 16 and Diluted EPS Excluding One-Time Net Tax Benefit (in $ thousands) (4) Reflects net tax benefits primarily related to re-measurement of net deferred tax liability at a lower corporate tax rate pursuant to 2017 Tax Act The Company believe