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AdvanSix Inc. (ASIX)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 sales were $329.1M, down 14% YoY; Diluted EPS was $0.01 and Adjusted EPS $0.09, with volumes down ~16% due to delayed ramp post planned turnaround, partially offset by +2% market-based pricing (strength in ammonium sulfate and acetone) .
  • Pre-tax turnaround impact was ~$47M in Q4 and ~$58M for FY 2024; management guides a material reduction to $25–$30M in FY 2025, setting up YoY earnings improvement supported by ~10% higher sales volume in 2025 .
  • Initial 45Q carbon capture tax credits of $9.7M (for 2018–2019) and a final $26M insurance settlement in Q1’25 provide tailwinds to EPS and cash flow entering 2025; declared a $0.16 quarterly dividend (payable Mar 24, 2025) .
  • Cash flow from operations rose to $64.2M (+$4.0M YoY) and free cash flow to $29.8M (+$8.0M YoY) on working capital benefits from ammonium sulfate pre-buy advances; capex was $34.3M (-$4.0M YoY) .
  • Key catalysts: 45Q credits with multi-year run-rate potential, insurance proceeds, improved turnaround cadence in 2025, and sustained pricing strength in Plant Nutrients and acetone spreads; tempered by slower nylon recovery and higher raw input prices (natural gas, sulfur) .

What Went Well and What Went Wrong

What Went Well

  • Strong ammonium sulfate dynamics: industry Corn Belt prices up ~15% YoY; order book “sold out well into the second quarter” of 2025, supporting pricing and volume visibility .
  • Acetone spreads remained constructive on balanced global supply/demand and lower phenol operating rates; management expects spreads above cycle averages, providing a counterbalance to nylon headwinds .
  • Strategic and financial tailwinds: $9.7M 45Q tax credits claimed; final $26M insurance settlement; management emphasized these as EPS and cash flow supports entering 2025 .
  • Quote: “We anticipate meaningful year-over-year earnings improvement in 2025… with an expected approximately 10% sales volume increase for the year” — Erin Kane .

What Went Wrong

  • Extended Q4 turnaround and delayed ramp reduced volumes (~16%) and drove a ~$47M pretax impact, compressing Adjusted EBITDA to $10.2M (3.1% margin) .
  • Nylon Solutions: slower recovery off trough levels amid increased domestic competitive pressure and persistent oversupply globally; management flags a protracted cycle downturn .
  • Fertilizer margin headwinds expected from higher raw material prices (natural gas and sulfur) into 2025 despite sustained sulfur premiums; nitrogen price raw spreads pressured .

Financial Results

Quarterly Performance (oldest → newest)

MetricQ2 2024Q3 2024Q4 2024
Sales ($USD Millions)$453.5M $398.2M $329.1M
Diluted EPS ($USD)$1.43 $0.82 $0.01
Adjusted Diluted EPS ($USD)$1.55 $0.88 $0.09
Adjusted EBITDA ($USD Millions)$78.1M $53.2M $10.2M
Adjusted EBITDA Margin %17.2% 13.4% 3.1%
Cash Flow from Operations ($USD Millions)$50.2M $57.3M $64.2M
Free Cash Flow ($USD Millions)$16.7M $26.8M $29.8M
Capital Expenditure ($USD Millions)$33.5M $30.5M $34.3M

Q4 Year-over-Year

MetricQ4 2023Q4 2024
Sales ($USD Millions)$382.2M $329.1M
Diluted EPS ($USD)($0.19) $0.01
Adjusted Diluted EPS ($USD)($0.10) $0.09
Adjusted EBITDA ($USD Millions)$15.1M $10.2M
Adjusted EBITDA Margin %4.0% 3.1%
Cash Flow from Operations ($USD Millions)$60.2M $64.2M
Free Cash Flow ($USD Millions)$21.8M $29.8M

Segment/Product Line – Q4 2024

Product LineSales ($USD Millions)% of Total
Nylon$67.2M 21%
Caprolactam$57.2M 17%
Plant Nutrients$102.6M 31%
Chemical Intermediates$102.1M 31%
Total$329.1M 100%

Additional KPIs

KPIQ4/FY 2024 Detail
Q4 Pretax Turnaround Impact~$47M
FY 2024 Pretax Turnaround Impact~$58M
FY 2024 Effective Tax Rate (reported by CFO)3.1% (vs 21.1% prior year) driven by 45Q credits
Ammonium Sulfate PricingCorn Belt AS prices up ~15% YoY
Nitrogen PricingCorn Belt nitrogen down ~8% YoY
Order BookSold out into Q2 2025
Hopewell Caprolactam Utilization Target (2025)90%+

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Capital ExpendituresFY 2025N/A$140–$160M New
Plant Turnaround Pretax ImpactFY 2025FY 2024 actual ~$58M $25–$30M Lower YoY
Sales Volume GrowthFY 2025N/A~10% increase New
DividendQ1 2025$0.16/share (recurring) $0.16/share declared, payable Mar 24, 2025 Maintained
Acetone SpreadsFY 2025Balanced/tight conditions (Q3 outlook) Above cycle averages expected Maintained/Constructive
Nylon Industry ConditionsFY 2025Modest improvement expected (Q3 outlook) Slower recovery off trough; increased domestic competition Lower vs prior narrative
Fertilizer Margin InputsH1 2025Strong AS demand (Q3 outlook) Higher raw material prices (natural gas, sulfur) pressure spreads New headwind detail

Earnings Call Themes & Trends

TopicPrevious Mentions (Q-2 and Q-1)Current Period (Q4 2024)Trend
Plant Nutrients demand/pricingQ2: Spreads strengthened; strong Fill at higher pricing; sulfur value recognized . Q3: Order book sold through Q4; robust demand .Sold out well into Q2 2025; sulfur premiums near high end, but higher natural gas/sulfur headwind to spreads .Strong demand sustained; input cost headwind emerging.
Acetone spreadsQ2: Tight global supply/demand; healthy realized spreads . Q3: Balanced to tight conditions .Above cycle averages expected; MMA demand soft near term; phenol rates low .Constructive spreads; near-term demand softness in MMA.
Nylon cycleQ2: NA spreads modestly improving; export mix back to historical levels . Q3: Modest improvement expected .Slower recovery off trough; increased domestic competitive pressure; persistent oversupply .Weaker narrative vs Q2/Q3.
45Q tax creditsQ2: CO2 beneficial reuse partners; capture ongoing .$9.7M credits claimed (2018–2019); run-rate ~$5–6M over next several years; sequential filing process .New recurring value driver.
TurnaroundsQ2: FY 2024 impact guided $38–$43M . Q3: Incremental ~$17M hit expected in Q4 .Actual Q4 impact ~$47M; FY ~$58M; FY 2025 impact $25–$30M .Major 2024 headwind; easing materially in 2025.
Capex frameworkQ2: FY 2024 capex $140–$150M . Q3: Revised to $135–$140M .FY 2025 $140–$160M; SUSTAIN spend $20–$25M; $10M carryover; base maintenance lower; Hopewell water permit; Frankford boiler upgrade wrapping .Elevated but targeted toward growth/risk mitigation.
Ag-chem marketsQ2: Low-priced Chinese imports pressure amines; inventory overhang .Continued challenges; downstream customers pressured; adjuvants showed seasonal improvement .Still challenged; mixed signs of improvement.
Regional/phenol ratesQ2: NA strength in phenol/acetone mix .U.S. phenol rates ~65% vs ASIX higher due to integration; acetone a natural hedge at lower phenol rates .Integration advantage reiterated.

Management Commentary

  • “We anticipate meaningful year-over-year earnings improvement in 2025… with an expected approximately 10% sales volume increase for the year.” — Erin Kane .
  • “Adjusted earnings per share of $0.09… included the impact of $9.7 million in 45Q carbon capture tax credits that reduced our effective tax rate to 3.1% for the full year 2024 compared to 21.1% in the prior year period.” — CFO Sid Manjeshwar .
  • “Our plant turnarounds are anticipated to be a tailwind year-over-year… We also expect CapEx to be in the range of $140 million to $160 million, reflecting… our SUSTAIN program.” — Erin Kane .
  • “Final Omnibus settlement… approximately $26 million in the first quarter of 2025… In total, we have received approximately $39 million of aggregated insurance proceeds since the 2019 event.” — Erin Kane .
  • “Given our cost advantage, our caprolactam utilization rate at Hopewell is targeted to be 90% plus for 2025.” — Erin Kane .

Q&A Highlights

  • Granular AS conversion: SUSTAIN targets 75% conversion; assets will not reach 100%; export typically standard grade .
  • Phenol operating rates: U.S. phenol ~65%; ASIX targets higher rates due to forward integration; acetone acts as hedge when phenol rates are low .
  • 45Q run-rate: ~$5–6M annually over next several years, with sequential LCA filings and claims; broad capture/utilization already minimizes venting .
  • 2025 capex buckets: $140–$160M; SUSTAIN $20–$25M; $10M carryover; base maintenance down; Hopewell water permit; Frankford dock/boiler upgrade to wrap .
  • Ag-chem outlook: continued pressure from low-priced Chinese imports; adjuvants improved seasonally; sulfur in sulfate form delivers agronomic benefits vs elemental sulfur (availability timing) .

Estimates Context

  • S&P Global consensus estimates for Q4 2024 and the prior two quarters were unavailable at time of request due to provider limits; as a result, explicit “vs consensus” comparisons cannot be presented. Values would have been retrieved from S&P Global.
  • Given the absence of published consensus figures, investors should focus on management’s qualitative outlook and operational cadence improvements (turnaround impact reduction, volume growth, and pricing dynamics) .

Key Takeaways for Investors

  • 2025 setup is favorable: turnaround impact expected to drop to $25–$30M (from ~$58M in 2024) and management anticipates ~10% sales volume growth, supporting YoY earnings improvement .
  • Carbon capture credits emerge as recurring value driver: $9.7M claimed for 2018–2019; run-rate ~$5–6M over several years, lowering effective tax rate and aiding EPS/cash flow .
  • Plant Nutrients remains a core strength: sulfur premiums near the high end; order book sold into Q2; monitor higher natural gas/sulfur costs that may compress spreads .
  • Acetone spreads above cycle averages expected; near-term softness in MMA end markets but balanced supply/demand and low phenol operating rates remain supportive .
  • Nylon headwinds persist: slower recovery and domestic competitive pressure; management focused on productivity and sales mix optimization; caprolactam utilization targeted at 90%+ .
  • Cash generation resilient: Q4 CFFO $64.2M and FCF $29.8M supported by pre-buy advances; dividend maintained at $0.16/share .
  • Capex is elevated but targeted: $140–$160M in 2025, with SUSTAIN investment and enterprise risk mitigation, underpinning medium-term margin and mix improvements .