AdvanSix (ASIX) Tops Q3 EPS by 3c, Revenues Beat
AdvanSix (NYSE: ASIX) reported Q3 EPS of ($0.02), $0.03 better than the analyst estimate of ($0.05). Revenue for the quarter came in at $281.91 million versus the consensus estimate of $266.77 million.
Third Quarter 2020 Results
- 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
- EBITDA of $15.8 million, a decrease of $9.1 million versus the prior year
- 3Q20 planned plant turnaround successfully completed - approximately $20 million unfavorable pre-tax income impact (compared to approximately $5 million unfavorable impact in 3Q19)
- Cash Flow from Operations of $35.5 million, an increase of $2.4 million versus the prior year
- Capital Expenditures of $16.0 million, $19.2 million favorable versus the prior year
- Free Cash Flow of $19.6 million, an increase of $21.6 million versus the prior year
- As of 3Q20, approximately $17 million of cash on hand with approximately $111 million of additional capacity available under the revolving credit facility
“Our diverse product portfolio and global low-cost position continue to serve us well as we navigate through the current environment," said Erin Kane, president and CEO of AdvanSix. "We have seen nylon volume returning to pre-COVID levels and we continue to optimize our mix across end uses, applications and geographies through the recovery. The performance of the remainder of our portfolio, including ammonium sulfate, acetone and other high-value intermediates, remains resilient complementing ongoing benefits from our focused cost management and high-return capital investments. We generated higher cash flow in the quarter, as anticipated, supported by efficient working capital performance and reduced capital expenditures."
- 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
- Capital Expenditures expected to be approximately $85 million in 2020 (down approximately $65 million versus 2019); Expect Capital Expenditures to be $80 to $90 million in 2021
- 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
- Expect pre-tax income impact of planned plant turnarounds to be $25 to $30 million in 2021 (versus approximately $32 million in 2020)
"During this dynamic time, we continue to strengthen our ability to deliver long-term shareholder return. We are focused on executing for the remainder of 2020 and driving best possible outcomes for the business. Looking ahead to 2021, our priorities are focused on continued operational excellence and improving through-cycle profitability, enhancing our portfolio resiliency through differentiated product growth and mix optimization, and being strong and disciplined stewards of capital,” added Kane.
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