Advansix announces third quarter 2018 financial results
Parsippany, n.j.--(business wire)--advansix (nyse:asix) today announced its financial results for the third quarter ending september 30, 2018. the company generated strong cash flow while managing through a significant planned plant turnaround and lower production output. third quarter 2018 highlights sales up approximately 1% versus prior year, including approximately 10% higher raw material pass-through pricing and approximately 10% lower volume net income of $5.5 million, a decrease of $15.8 million versus the prior year ebitda of $20.0 million, a decrease of $30.4 million versus the prior year planned plant turnaround: approximately $30 million pre-tax income impact in 3q18 (versus approximately $4 million in 3q17) cash flow from operations of $50.5 million, an increase of $12.8 million versus the prior year free cash flow of $31.3 million, an increase of $13.0 million versus the prior year repurchased 475,175 shares for approximately $17 million under current authorized plan “in the third quarter, we continued to navigate through dynamic end market environments while successfully executing a significant planned plant turnaround at our hopewell facility. while we have continued to see favorable performance in nylon and year-over-year strengthening in our ammonium sulfate product line, challenging acetone industry dynamics persist. overall, we're maintaining our focus on safe and stable operations and remain confident in the resiliency and strength of our portfolio," said erin kane, president and ceo of advansix. "cash flow generation continues to improve with cash flow from operations increasing by $29 million, or 30%, on a year-to-date basis supporting smart deployment of capital into high-return growth and cost savings projects. we've also repurchased approximately $26 million of shares through late october, or roughly one-third of our authorization announced in may, reflecting our maturing capital allocation strategy and confidence in continued cash flow performance.” summary third quarter 2018 financial results for the company are included below: third quarter 2018 results (1) see “non-gaap measures” included in this press release for non-gaap reconciliations (2) net cash provided by operating activities less capital expenditures sales of $368.7 million increased approximately 1% versus the prior year. pricing overall increased 10% versus the prior year due to raw material pass-through pricing following cost increases in benzene and propylene (inputs to cumene which is a key feedstock to our products). market-based pricing was approximately flat compared to the prior year. the pricing benefit of improved industry supply and demand dynamics in our ammonium sulfate product line as we entered the new 2018/2019 planting season was primarily offset by softness in chemical intermediates due to lengthening of acetone supply globally. sales volume in the quarter decreased approximately 10% versus the prior year primarily due to a planned plant turnaround in the third quarter of 2018 and lower production output. sales by product line represented the following approximate percentage of our total sales: ebitda of $20.0 million in the quarter decreased $30.4 million versus the prior year primarily due to the impact of the planned plant turnaround and lower production output. earnings per share of $0.18 decreased 74% versus the prior year driven by the factors discussed above and higher depreciation and amortization partially offset by a reduction in our effective tax rate, primarily due to adjustments associated with the filing of the 2017 tax return, as well as lower interest expense. cash flow from operations of $50.5 million in the quarter increased $12.8 million versus the prior year primarily due to the favorable impact of changes in working capital, partially offset by lower net income and a reduced benefit from deferred taxes. capital expenditures of $19.2 million in the quarter decreased $0.2 million versus the prior year. outlook current favorable nylon industry conditions expected to continue ammonium sulfate fertilizer prices expected to increase seasonally; expecting improved nitrogen fertilizer environment to continue through 2018/2019 planting season expect challenging acetone industry conditions to continue capital expenditures tracking to approximately $110 million for the full year 2018; expect continued acceleration of high-return growth and cost savings project pipeline in 2019 full year 2019 pre-tax income impact of planned plant turnarounds expected to be $35 to $40 million “despite softness in north america acetone industry spreads, there are a number of expected tailwinds supporting improved financial and operational performance in 2019 including continued execution against our maturing pipeline of high-return capital projects and an improving nitrogen fertilizer environment. we continue to position the company for strong performance in the years to come and remain committed to delivering long-term value to our shareholders,” added kane. conference call information advansix will discuss its results during its investor conference call today starting at 9:00 a.m. et. to participate on the conference call, dial (844) 855-9494 (domestic) or (412) 858-4602 (international) approximately 10 minutes before the 9:00 a.m. et start, and tell the operator that you are dialing in for advansix’s third quarter 2018 earnings call. the live webcast of the investor call as well as related presentation materials can be accessed at http://investors.advansix.com. investors can hear a replay of the conference call from 12 noon et on november 2 until 12 noon et on november 9 by dialing (877) 344-7529 (domestic) or (412) 317-0088 (international). the access code is 10124573. about advansix advansix is a leading manufacturer of nylon 6, a polymer resin which is a synthetic material used by our customers to produce engineered plastics, fibers, filaments and films that, in turn, are used in such end-products as automotive and electronic components, carpets, sports apparel, fishing nets and food and industrial packaging. as a result of our backward integration and the configuration of our manufacturing facilities, we also sell caprolactam, ammonium sulfate fertilizer, acetone and other intermediate chemicals, all of which are produced as part of our nylon 6 integrated manufacturing chain. more information on advansix can be found at http://www.advansix.com. forward looking statements this release 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 or developments that our management intends, expects, projects, believes or anticipates will or may occur in the future are forward-looking statements. forward-looking statements may be identified by words like "expect," "anticipate," "estimate," “outlook”, "project," "strategy," "intend," "plan," "target," "goal," "may," "will," "should" and "believe" or other variations or similar terminology. although we believe forward-looking statements are based upon reasonable assumptions, such statements involve known and unknown risks, uncertainties and other factors, which may cause the actual results or performance of the company to be materially different from any future results or performance expressed or implied by such forward-looking statements. such risks and uncertainties include, but are not limited to: general economic and financial conditions in the u.s. and globally; growth rates and cyclicality of the industries we serve; the impact of scheduled turnarounds and significant unplanned downtime and interruptions of production or logistics operations as a result of mechanical issues or other unanticipated events such as fires, severe weather conditions, and natural disasters; price fluctuations and supply of raw materials; our operations requiring substantial capital; failure to develop and commercialize new products or technologies; loss of significant customer relationships; adverse trade and tax policies; extensive environmental, health and safety laws that apply to our operations; hazards associated with chemical manufacturing, store and transportation; litigation associated with chemical manufacturing and our business operations generally; inability to acquire and integrate businesses, assets, products or technologies; protection of our intellectual property and proprietary information; prolonged work stoppages as a result of labor difficulties; cybersecurity and data privacy incidents; failure to maintain effective internal controls; our inability to achieve some or all of the anticipated benefits of the spin-off from honeywell including uncertainty regarding qualification for expected tax treatment and indebtedness incurred in connection with the spin-off; fluctuations in our stock price; and tax reform or other changes in laws or regulations applicable to our business. you are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this release. such forward-looking statements are not guarantees of future performance, and actual results, developments and business decisions may differ from those envisaged by such forward-looking statements. we identify the principal risks and uncertainties that affect our performance in our filings with the securities and exchange commission, including our annual report on form 10-k for the year ended december 31, 2017 and our subsequent quarterly reports on form 10-q. non-gaap financial measures this press release includes certain non-gaap financial measures intended to supplement, not to act as substitutes for, comparable gaap measures. reconciliations of non-gaap financial measures to gaap financial measures are provided in this press release. investors are urged to consider carefully the comparable gaap measures and the reconciliations to those measures provided. non-gaap measures in this press release may be calculated in a way that is not comparable to similarly-titled measures reported by other companies. common stock, par value $0.01; 200,000,000 shares authorized;30,555,715 shares issued and 29,991,468 outstanding at september 30, 2018;30,482,966 shares issued and outstanding at december 31, 2017 preferred stock, par value $0.01; 50,000,000 shares authorized and 0shares issued and outstanding at september 30, 2018 and december 31, 2017 treasury stock at par (564,247 shares at september 30, 2018; 0shares at december 31, 2017) (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 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 our liquidity. reconciliation of net income to ebitda 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 financial performance of the company, and facilitate a better comparison among fiscal periods and performance relative to its competitors, as these non-gaap measures exclude items that are not considered core to the company’s operations. planned plant turnaround schedule (4) 1q 2q 3q 4q fy
