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Sep 30, 2020
Advansix Q3 2020 Earnings Report
Reported strong volume growth, cash flow generation, cost management and capital discipline.
Key Takeaways
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
Revenue by Segment
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.
Positive Outlook
- 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
Challenges Ahead
- Expect pre-tax income impact of planned plant turnarounds to be $25 to $30 million in 2021 (versus approximately $32 million in 2020)
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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