AdvanSix — Third Quarter 2026 Earnings Summary

Financial Performance:

• Sales reached $430.8 million in Q3 2026, a 15% increase year-over-year from $374.5 million in Q3 2025.
• Net loss was $7.6 million compared to a net loss of $2.6 million in the prior year period.
• Diluted earnings per share (EPS) were ($0.28) versus ($0.10) in the prior year.
• Adjusted diluted EPS was ($0.24) compared to $0.08 in the prior year.
• Adjusted EBITDA was $14.6 million, a decrease of $10.1 million from $24.7 million in the prior year.
• Adjusted EBITDA margin was 3.4%, down 320 basis points from 6.6% in the prior year.
• Cash flow from operations was $48.0 million, an increase of $21.4 million versus $26.6 million in the prior year.
• Free cash flow was $29.7 million, compared to $0.1 million in the prior year.
• Capital expenditures were $18.3 million, a decrease of $8.2 million from $26.5 million in the prior year.
• Cost of goods sold was $419.6 million compared to $349.1 million in the prior year.
• Selling, general, and administrative expenses were $19.2 million compared to $27.4 million in the prior year.
• Interest expense, net, was $4.0 million compared to $2.3 million in the prior year.

Guidance and Future Outlook:

• Expect tighter ammonium sulfate supply and demand dynamics into 2027 amid a challenged sulfur input cost environment.
• Acetone spread over propylene costs expected to hold near cycle averages.
• Expect to optimize Nylon Solutions price over raw materials spreads and sales volume mix in a soft industrial end market environment.
• Revised full-year 2026 capital expenditures expectation to approximately $90 million, down from $116 million in 2025.
• Expect pre-tax income impact from plant turnarounds to be approximately $17 million in 2026, down from $25 million in 2025.
• Anticipate sequential cash flow improvement in the second half of 2026 driven by a reduced capital expenditures run-rate, working capital tailwinds including a Q4 2026 pre-buy program in Plant Nutrients, and timing of annual payments paid in the first half of 2026.
• Anticipate 45Q carbon capture tax credits to support improved earnings and cash flow generation moving forward.

Business Segments and Product Lines:

• Sales growth was driven by 17% favorable pricing, partially offset by a 2% decline in volume.
• Raw material pass-through pricing increased 10% following net cost increases in benzene and propylene.
• Market-based pricing improved 7% reflecting increases across all product lines.
• Lower sales volume was primarily driven by lower caprolactam sales.
• Nylon segment sales were $104.7 million (24% of total), up 33% from $79.0 million in the prior year.
• Caprolactam segment sales were $73.1 million (17% of total), flat compared to $73.1 million in the prior year.
• Plant Nutrients segment sales were $149.3 million (35% of total), up 8% from $138.7 million in the prior year.
• Chemical Intermediates segment sales were $103.7 million (24% of total), up 24% from $83.6 million in the prior year.
• Core caprolactam operating rate continues to exceed global industry averages.

Market and Competitive Landscape:

• The company navigates significant input cost inflation and a dynamic market environment.
• The company leverages formula and market-based pricing mechanisms to offset inflationary raw material costs.
• The company serves diverse end markets including building and construction, fertilizers, agrochemicals, plastics, solvents, packaging, paints, coatings, adhesives, and electronics.

Risks and Challenges:

• Reduced production output drove unfavorable fixed cost absorption in the quarter.
• Higher raw material costs, specifically benzene and propylene, impacted results.
• The company faces a challenged sulfur input cost environment.
• Industrial end markets are described as soft.

Management Commentary and Tone:

• CEO Erin Kane stated that results reflect strong commercial execution and the resilience of the integrated business model.
• Management is taking decisive actions to enhance cash generation, improve cost position, and optimize the portfolio.
• The company remains focused on executing strategic priorities and positioning for sustainable long-term value.
• Management is prioritizing disciplined cost management, cash generation, and capital deployment.
• The non-manpower fixed cost savings program remains on track.

Other Key Points:

• Project CENTURY was selected for a $47 million FIELDS Grant to support the Ammonia Platform Investment.
• On August 14, 2026, the Company refinanced its existing credit facility with a new 5-year, $425 million credit facility, comprised of a $275 million senior secured revolving credit facility and a $150 million senior secured term loan facility.
• The Board of Directors declared a quarterly cash dividend of $0.16 per share, payable on December 1, 2026, to stockholders of record as of November 17, 2026.
• The company is continuing the evaluation of its potential DEF growth project.
• The company reported a $4.3 million dividend payment in the quarter.
• The company purchased $41,000 of treasury stock in the quarter.
• The company recognized $1.5 million in deferred income and customer advances reduction in the quarter.
• The company reported a $12,088,000 decrease in accrued liabilities in the quarter.
• The company reported a $44,338,000 increase in accounts payable in the quarter.
• The company reported a $12,732,000 decrease in inventories in the quarter.
• The company reported a $6,243,000 increase in accounts and other receivables in the quarter.