Slide 1: 4Q 2017 Earnings Presentation
February 23, 2018 4Q 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 • Strong 2017 Results: Sales $1.5B, Net Income $147M, Cash Flow from Operations $135M • Robust Operations While Achieving Record Safety Performance; 4Q17 Planned Plant Turnaround Completed On Time and On Budget • 1Q18 Weather-Related Production Issue Resolved As Expected – ~$30M Unfavorab
Slide 4: 4Q 2017 Financial Summary
4Q 2017 Financial Summary 4 Strong Operational Performance and Improved Market Conditions ($ Millions, Except Per Share Amounts) 4Q 2016 4Q 2017 Comments • Sales Up 43%: Volume +25%, Price +18% Sales $259.3 $370.4 – Market Pricing +2%, Raw Material Pass Through +16% • Strong Operational Performance,
Slide 5: 4Q17 One-Time Net Tax Benefit
4Q17 One-Time Net Tax Benefit 5 Re-Measurement of Net Deferred Tax Liability Reduces Future Cash Tax Obligation ($ Millions, Except Per Share Amounts) Reported Net Tax Benefit Ex-Tax Benefit Income Before Taxes $23 - $23 Income Tax Expense ($49) ($53) $4 (Benefit) Net Income $72 ($53) $19 EPS (Dilut
Slide 6: Full Year 2017 Financial Summary
Full Year 2017 Financial Summary 6 Strong Volume, Earnings and Cash Flow Performance ($ Millions, Except Per Share Amounts) FY 2016 FY 2017 Comments • Sales Up 24%: Volume +9%, Price +15% Sales $1,191.5 $1,475.2 – Market Pricing +3%, Raw Material Pass Through +12% • Strong Operational Performance, I
Slide 7: Nylon Industry Outlook
Nylon Industry Outlook 7 Industry Conditions Improved But Remain Dynamic Nylon Key Industry Spreads (1) 4Q17 YoY 4Q17 vs. 3Q17 • Stricter environmental controls Global Composite BNZ-CPL 44% 10% in China drive lower utilization, What We’re higher costs and plant downtime Asia BNZ-CPL 40% 28% Asia CPL
Slide 8: Ammonium Sulfate (AS) Industry Outlook
Ammonium Sulfate (AS) Industry Outlook 8 Nitrogen Prices Firming, Remain Cautious on Fundamentals Ammonium Sulfate Key Industry Prices (1) • AS price more stable relative to 4Q17 YoY 4Q17 vs. 3Q17 recent Nitrogen pricing Corn Belt Granular AS 6% 5% What We’re • China urea utilization remains Corn Be
Slide 9: Chemical Intermediates Industry Outlook
Chemical Intermediates Industry Outlook 9 Stable End Market Environment Chemical Intermediates Key Industry Prices (1) 4Q17 YoY 4Q17 vs. 3Q17 • Phenol / Acetone demand steady Acetone, Large Buyer 40% 14% What We’re Refinery Grade Propylene 50% 25% Seeing • Refinery grade propylene (RGP) 60 input pri
Slide 10: 1Q18 Production Update
1Q18 Production Update 10 Weather-Related Production Issue Resolved as Expected 1Q18 Pre-Tax Income Impact Comments ~$30M • Experienced a temporary production issue in our ammonia plant at Hopewell, VA facility related to severe winter weather – Caprolactam and resin production rates were reduced at
Slide 11: Tax Reform – Anticipated Impact
Tax Reform – Anticipated Impact 11 Favorable Impact to ASIX Income and Cash Flow Effective Tax Rate Impact of Tax Cuts and Jobs Act ~38% • 4Q17 one-time net tax benefit ~$53M primarily related to re-measurement of net deferred tax liability at a lower ~25% corporate tax rate (35% 21%) – Reduces fu
Slide 12: Cash Flow
Cash Flow 12 Strong Cash Flow Generation; Deployment to Create Further Shareowner Value Trailing 12-Month Cash Flow Cash Generation and Deployment ($ Millions) • Nearly $70M of Free Cash Flow generated since spin-off 170 – Improved plant production rates 150 – Driving higher-value product mix – Effi
Slide 13: 2018 Outlook
2018 Outlook 13 Expect Current Industry Conditions to Continue, Focus on Organic Investments • Anticipate similar supply/demand environment to 2017 across major product lines – Nylon: industry spreads fluctuating near marginal producer cost Commercial – Ammonium Sulfate: pricing firming into season,
Slide 14: AdvanSix Strategy And Priorities
AdvanSix Strategy And Priorities 14 Well Positioned for Strong Operational and Financial Performance Over Long Term Focused Strategy Delivered In 2017 2018 Priorities • Rigorous commitment to Robust production output, sales • High operating rates to continue operational excellence volume up 9% • C
Slide 15: Appendix: Reconciliation of non-GAAP Measures to GAAP Measures
15 Appendix: Reconciliation of non-GAAP Measures to GAAP Measures 4Q 2017 Earnings Presentation – February 23, 2018
Slide 16: Reconciliation Of Net Cash Provided By Operating Activities To Free Cash Flow
Reconciliation Of Net Cash Provided By Operating 16 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 17: Reconciliation Of Net Income To EBITDA
Reconciliation Of Net Income To EBITDA 17 (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
Slide 18: Reconciliation of Net Income and Diluted EPS Excluding One-Time Net Tax Benefit
Reconciliation of Net Income and Diluted EPS to Net Income 18 and Diluted EPS Excluding One-Time Net Tax Benefit (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
Slide 19: Appendix
19 Appendix 4Q 2017 Earnings Presentation – February 23, 2018
Slide 20: AdvanSix Financial Drivers
AdvanSix Financial Drivers 20 Raws and Industry Pricing/Spreads Key Performance Considerations 2012 2013 2014 2015 2016 2017* AdvanSix 1,789 1,767 1,790 Sales / Net Income 166 1,329 119 1,192 1,475 ($M) 84 93 64 34 Sales Net Income WTI Crude Oil $95 $100 $90 $50 $45 $50 ($/bbl) Natural Gas $2.80 $3.