NYSE$ASIX

Advansix Inc · Q3 2020 earnings

Q3 2020 earnings · · Investor relations

Briefing

Reported strong volume growth, cash flow generation, cost management and capital discipline.

AdvanSix announced its Q3 2020 financial results, which showed higher cash flow generation while mitigating the ongoing impacts of COVID-19 and executing its planned plant turnaround. Sales were down 9% year-over-year, but volume was up 5%.

  • Sales down approximately 9% versus prior year, as 5% higher volume was more than offset by 13% lower raw material pass-through pricing and 1% unfavorable impact of market-based pricing
  • Net Loss of ($0.7) million, a decrease of $8.6 million versus the prior year
  • Cash Flow from Operations of $35.5 million, an increase of $2.4 million versus the prior year
  • Free Cash Flow of $19.6 million, an increase of $21.6 million versus the prior year

Headline financials

Total Revenue

$282M

Previous: $311M-9.2%
EPS (adj)

-$0.02

Previous: $0.28-107.1%
Adjusted EBITDA Margin

5.6%

No prior period
Capital Expenditures

-$67.6M

Previous: -$106M+36.5%
Free Cash Flow

-$68.3M

Previous: -$98.5M+30.7%
Net Income

-$692K

Previous: $7.92M-108.7%
Operating Income

-$282M

Previous: -$299M+5.6%
Gross Profit

$16.2M

Previous: $30.5M-47.1%
Cash & Equivalents

$16.7M

Previous: $10M+66.1%
Total Assets

$1.24B

Previous: $1.21B+1.9%
Stock-Based Comp

$603K

Previous: $2M-69.9%

Revenue & EPS history

Advansix · Revenue · Quarterly

$282M

Q3 2020-9.2%vs Q3 2019
Beat estimate in 12 of 16 quarters(75%)
ActualEstimate

Revenue by segment

Advansix · $220M total across 3 segments · Q3 2020

  • Chemical Intermediates
    $95.9M+6.5%
  • Nylon
    $73.3M-5.6%
  • Caprolactam
    $50.7M-37.2%

Forward guidance

AdvanSix provided an outlook including targeting strong caprolactam plant utilization and optimizing nylon mix, expecting a stable ammonium sulfate fertilizer environment, and anticipating a favorable acetone industry supply and demand balance. They also expect continued disciplined cost management and a reduction in net debt and leverage levels.

Tailwinds

  • Targeting strong caprolactam plant utilization and optimizing nylon mix across end uses, applications and geographies
  • Expect stable ammonium sulfate fertilizer environment to continue through 2020/2021 planting season
  • Expect favorable acetone industry supply and demand balance to continue
  • Continued disciplined cost management - expect $20 to $25 million full year 2020 cost reduction
  • Expect a reduction in net debt and leverage levels in 4Q20 with robust cash generation supported by working capital improvements and cash tax benefits associated with the CARES Act

Headwinds

  • Expect pre-tax income impact of planned plant turnarounds to be $25 to $30 million in 2021 (versus approximately $32 million in 2020)

Historical earnings impact

How earnings announcements have historically affected this stock's price.

Avg. return before/after earnings

Based on 19 quarterly earnings reports · overlaid with Q3 2020

Historical avgQ3 2020

-0.8%

Avg return

Earnings day

-1.1%

Avg return

5 days after

+0.8%

Avg return

30 days after

52%

23 / 44 earnings

Positive

+15.6%

Q1 2016

Best reaction

-15.5%

Q4 2019

Worst reaction

Earnings price reactions
QuarterReport dateReaction (Day 0)+5 days+30 days
Q1 2026-15.1%-6.6%
Q4 2025+3.9%+0.8%+12.5%
Q3 2025-15.0%-10.9%-11.7%
Q1 2025+6.1%+6.9%+10.4%
Q3 2024+5.0%+11.8%+14.5%
Q2 2024+2.7%+4.0%+10.5%
Q1 2024-9.9%-6.3%-8.0%
Q4 2023+0.8%-0.6%-4.2%
Q3 2023-9.5%-13.2%-5.0%
Q2 2023-8.1%-5.3%-14.0%
Q1 2023-0.7%-1.2%+1.1%
Q4 2022-3.3%-0.9%-17.7%
Q3 2022+3.7%+1.7%+14.9%
Q2 2022+1.6%+2.0%-8.2%
Q1 2022-3.9%-4.2%-2.2%
Q4 2021-11.0%-14.7%+30.5%
Q3 2021+5.4%+8.3%+2.4%
Q2 2021+2.6%+6.9%+11.5%
Q1 2021+3.3%+6.7%+3.4%
Q4 2020+11.5%+8.1%+2.8%
Q3 2020+4.4%-1.3%+23.6%
Q2 2020+1.5%+5.2%+16.4%
Q1 2020-6.0%-7.2%-2.8%
Q4 2019-15.5%-27.0%-34.1%
Q3 2019+3.4%+4.0%-11.1%
Q2 2019-2.3%-10.3%-12.9%
Q1 2019+8.1%+1.6%-18.7%
Q4 2018+2.0%-1.2%-15.6%
Q3 2018-8.9%-2.9%-2.5%
Q2 2018-13.2%-13.5%-15.0%
Q1 2018-5.5%+2.0%+2.9%
Q4 2017+4.5%+6.6%-12.2%
Q3 2017-6.7%-7.2%-11.4%
Q2 2017-4.6%-4.0%+3.2%
Q2 2016-4.6%-4.0%+3.2%
Q1 2017+15.6%+13.7%+11.3%
Q1 2016+15.6%+13.7%+11.3%
Q1 2015-7.1%-9.9%-11.7%
Q2 2015-7.1%-9.9%-11.7%
Q4 2014-7.1%-9.9%-11.7%
Q4 2016+1.3%-2.2%+1.3%
Q4 2015+8.5%+6.9%+30.4%
Q3 2016+8.5%+6.9%+30.4%
Q3 2015+8.5%+6.9%+30.4%

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