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Jun 30, 2020
Advansix Q2 2020 Earnings Report
Announced second quarter 2020 financial results, with sales down 33% and EPS down $0.12 versus prior year.
Key Takeaways
AdvanSix reported a decrease in sales by approximately 33% compared to the prior year, driven by lower volume and unfavorable pricing. Net income also decreased, but the EBITDA margin increased due to cost management and productivity benefits. The company's global low-cost position and diverse portfolio helped mitigate the impacts of COVID-19.
Sales decreased by approximately 33% versus prior year, influenced by lower volume, raw material pass-through pricing, and market-based pricing.
Net Income was $11.4 million, a decrease of $3.9 million versus the prior year.
EBITDA was $30.7 million, a decrease of $5.2 million versus the prior year.
Cash Flow from Operations was $8.8 million, a decrease of $16.5 million versus the prior year.
Revenue by Segment
Forward Guidance
AdvanSix anticipates a continued challenging nylon demand environment, expects typical ammonium sulfate seasonality to drive pricing decline, and foresees a favorable acetone industry supply and demand balance. The company is focused on cost management, reduced capital expenditures, and leveraging benefits from the CARES Act to improve cash flow in the second half of 2020.
Positive Outlook
- Optimizing mix across end uses, applications and geographies
- Expect favorable acetone industry supply and demand balance to continue
- Continued disciplined cost management - expect $15 to $20 million full year cost reduction (previously expected $10 to $15 million)
- Expect improved cash flow from operations in the second half of 2020 supported by working capital improvements and cash tax benefits associated with the CARES Act
- Focused on flawless execution of third quarter planned plant turnaround, while continuing to safely operate at higher utilization rates relative to industry
Challenges Ahead
- Challenging nylon demand environment expected to continue
- Typical ammonium sulfate seasonality expected to drive 3Q20 sequential domestic pricing decline and higher export mix
Revenue & Expenses
Visualization of income flow from segment revenue to net income
Historical Earnings Impact
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Avg. Return Before/After Earnings
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