PARSIPPANY, N.J.--(BUSINESS WIRE)--AdvanSix (NYSE: ASIX) today announced its financial results for the fourth quarter and full year ending December 31, 2020. The Company generated improved results across a number of measures in the quarter and for the full year including sales volume, income and cash flow, while mitigating the ongoing impacts of COVID-19.

“Our strong fourth quarter and full year results demonstrate our team's resilience, perseverance and strength of execution. For the full year, we expanded margins, generated higher earnings and cash flow, and reduced leverage levels as we navigated the challenging macro environment," said Erin Kane, president and CEO of AdvanSix. "Sales volume grew compared to the prior year reflecting the strength of our business model, low-cost position and diversity of our product portfolio. In 2020, we proactively drove approximately $26 million of productivity and cost savings to mitigate the impact of COVID on our business while continuing to invest for future growth in differentiated products and high-return capital projects."

Fourth Quarter 2020 Results

• Sales up 4.2% versus prior year, as 7.9% higher volume and 0.7% favorable impact of market-based pricing were partially offset by 4.4% lower raw material pass-through pricing
• Net Income of $26.8 million, an increase of $28.9 million versus the prior year
• EBITDA of $48.5 million, an increase of $35.8 million versus the prior year
• Cash Flow from Operations of $47.8 million, an increase of $27.9 million versus the prior year
• Capital Expenditures of $15.4 million, a decrease of $28.6 million versus the prior year
• Free Cash Flow of $32.4 million, an increase of $56.5 million versus the prior year

Summary fourth quarter 2020 financial results for the Company are included below:

(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 $340.3 million in the quarter increased approximately 4.2% versus the prior year. Sales volume in the quarter increased approximately 7.9% versus the prior year primarily due to higher production output and improved end market demand overall. Raw material pass-through pricing was unfavorable by approximately 4.4% following a net cost decrease in benzene and propylene (inputs to cumene which is a key feedstock to our products). Market-based pricing was favorable by approximately 0.7% compared to the prior year reflecting continued strength in chemical intermediates, particularly acetone, partially offset by our nylon and caprolactam product lines.

Sales by product line represented the following approximate percentage of our total sales:

EBITDA of $48.5 million in the quarter increased $35.8 million versus the prior year primarily due to the net favorable year-over-year impact of planned plant turnarounds (approximately $23 million), higher market-based pricing, productivity and volume, and the net favorable impact of logistics productivity and our realigned cumene supply chain following the 2019 shutdown of cumene supplier Philadelphia Energy Solutions (PES).

Earnings per share of $0.94 increased $1.02 versus the prior year driven by the factors discussed above as well as a lower effective tax rate in the quarter versus the prior year primarily driven by an approximately $3.8 million energy tax credit associated with our natural gas boilers investment.

Cash flow from operations of $47.8 million in the quarter increased $27.9 million versus the prior year primarily due to higher net income. Capital expenditures of $15.4 million in the quarter decreased $28.6 million versus the prior year following the completion of several large 2019 high-return growth and cost savings investments. The expected approximately $12 million cash tax refund related to the CARES Act remains outstanding and is now anticipated to be received in the first half of 2021.

Full Year 2020 Results

• Sales down 10.8% versus prior year, including 6.9% lower raw material pass-through pricing and 4.5% unfavorable impact of market-based pricing, partially offset by 0.6% higher volume
• Net Income of $46.1 million, an increase of $4.7 million versus the prior year
• EBITDA of $123.7 million, an increase of $8.0 million versus the prior year
• EBITDA Margin of 10.7%, up 180 bps versus the prior year
• Cash Flow from Operations of $111.8 million, a decrease of $8.5 million versus the prior year
• Capital Expenditures of $82.9 million, a decrease of $67.4 million versus the prior year
• Free Cash Flow of $28.9 million, an increase of $58.9 million versus the prior year

Summary full year 2020 financial results for the Company are included below:

(1) See “Non-GAAP Measures” included in this press release for non-GAAP reconciliations (2) Net cash provided by operating activities less capital expenditures

Outlook

• Expect near-term improvement in nylon demand while navigating COVID environment
• Expect increased ammonium sulfate fertilizer demand through 2021 planting season supported by improvement in agricultural industry fundamentals
• Expect favorable acetone industry supply and demand balance to continue
• Continue to expect Capital Expenditures to be $80 to $90 million in 2021
• Continue to expect pre-tax income impact of planned plant turnarounds to be $25 to $30 million in 2021
• Expect to receive approximately $12 million cash tax refund in the first half of 2021 related to CARES Act

"We are targeting a record year of production output in 2021 supporting higher earnings and robust cash flow while making continued progress on our sustainability initiatives. Our strategic priorities remain consistent as we support 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. We are gaining momentum and remain confident that AdvanSix is well positioned to deliver attractive long-term shareholder value,” added Kane.

About AdvanSix

AdvanSix plays a critical role in global supply chains, innovating and delivering essential products for our customers in a wide variety of end markets and applications that touch people’s lives, such as building and construction, fertilizers, plastics, solvents, packaging, paints, coatings, adhesives and electronics. Our reliable and sustainable supply of quality products emerges from the vertically integrated value chain of our three U.S.-based manufacturing facilities. AdvanSix strives to deliver best-in-class customer experiences and differentiated products in the industries of nylon solutions, chemical intermediates, and plant nutrients, guided by our core values of Safety, Integrity, Accountability and Respect. More information on AdvanSix can be found at http://www.advansix.com.