AdvanSix (ASIX)

Adam Kressel Director-Investor Relations
Erin Kane President and Chief Executive Officer
Michael Preston Senior Vice President and Chief Financial Officer
David Silver CL King
Vincent Anderson Stifel
Call transcript
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Good morning, and welcome to the AdvanSix First Quarter 2021 Earnings Conference Call. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Adam Kressel, Director of Investor Relations. Please go ahead.

Adam Kressel

Thank you, Betsey. to first welcome conference XXXX and call. morning the quarter AdvanSix’s earnings Good today CEO, President Senior me are With here and and Michael Vice CFO, Erin Preston. President and Kane; available webcast, non-GAAP including This website call reconciliations and are investors.advansix.com. at on any our this the that of today. statements that best and see it of our contain are Note presentation forward-looking on based of our we elements world view business as differ can elements change Those from projected. actual could and those materially results the consider them in we And that light. ask you that in included statements press forward-looking the to you refer earnings and our presentation. We release

In affect share for addition, SEC. the on in SEC first the outlook our identify uncertainties we updated our the principal XXXX our key results for with report our filings, and This quarter and of risks product morning, annual Form that further filings lines our XX-K we'll as performance review end and in subsequent financial including markets. our

Finally, we'll your for at end. questions the leave time

turn with the Kane. call I'll AdvanSix's CEO, Erin to over So that, President and

Erin Kane

morning, for and safe. And AdvanSix. you healthy remain Adam. continued joining also We do Thank in your for good interest Thanks and hope us everyone. you

As start release, robust AdvanSix you XXXX. quarter results in saw our first press to delivered

year, cash recall, unaffected our and EBITDA generate our million the to highlighted double on cash metrics contributed mention a to left-hand all, see execution environment, organization as COVID-XX free collective detail overall. variances earnings performance, the significant flow Slide the flow last in in some and them year-over-year see and you improvement we've generating but first strong for in can which by significantly ability quarter, was will reflecting the can Our side in particularly amid in improvement to supply a higher financials tightened our key won't a to you'll demand year-over-year. But quarter. you nearly $XX Mike X, largely as moment. compared of I

second and quarter then. highest the Our highest the we've since seen XXXX first quarter of of XXXX our first quarter, EBITDA was since

diversifies Early the was growth, further pricing, enabled or terrific continue the It expand acquisition are to Board, of sulfate integration and and synergy well start products to for retardant industrial expanded to other and Importantly, we've to our to also levels. optimizes a margins offerings excited the announced volume we use. the achieved to our assets and while sulfate. as ammonium sales and fertilizers a looking that well progressing ahead to which captured ammonium building and and realization Across Services reducing CIS, leverage installation, of Commonwealth supply offering on include first The customers. quarter, in us chain are Industrial we spray-grade of I'm packaged that are momentum. industry-leading plan crop we our certain directly XXXX, proud acquisition specialty protection, say to a as support adjuvant extend fire value for to

growth As we recovery. America the the we packaged remains and prices chemical economic are demand of we expectation in Nadone, intermediate improved favorable. oximes a targeting as Agricultural and favorability we're In and and for our overall outlook demand environment. marketplaces, pricing execute and product our experience highs. in North heart acres customer while also planted those multi-year demand an expand customer as for tight on nutrients plant as season. ammonium at we global and chemical crop strong pricing portfolio enter industry as cultivate of and robust capturing our sulfate bulk acetone optimization expect we as In improved our continued look growing fundamentals the with business differentiated robust storefront business ahead, well nylon, production supply improving Supporting

There record year product cash we including input flow. freight supporting investments differentiated logistics, output a and robust lot XXXX, remain shareholders. production costs, about. growth, do, in confident material higher but ability markets raw can't to of create our targeted in We for executing in are our and be we're will and what highly on value focused While in the predict higher always what coupled mitigating are continued to excited our control is is earnings our a focused with on

focused We long-term. deliver are executing returns against a strong strategy and sustainable to over the

profitability, that, it being improving the we details As to excellence resiliency of and strong Mike over optimization, of and to and quarter. and continued through With differentiated portfolio operational disciplined support mix I'll cycle through turn enhancing growth product stewards discuss the our capital.

Michael Preston

cover generation. expansion as now cash Erin I'll growth robust executed Okay, year last the about roughly great. with on that's pointed first across I'm end XX% year. X% quarter in to prior Thanks, million, market Sales, everyone. results. volume morning Sales compared X, lines. up financial the pricing totaled driven product once Slide strong improved demand and margin the increased $XXX by out, our versus improvement, And quarter where again We well, Erin. good very volume

comprised in last In effective the prior year, items year's I'll in lower on we following of the in a and pricing volume $X.XX of was to the particularly compared continued sales year-over-year, reflects prior recall, year. increased The quarter, $X.XX continuation through quarter, slide. per we've walk per the doubling last primarily year-of-year fourth favorable also next benzene share, raw of propylene X%. material XXXX EBITDA versus primarily rate. had pricing the drove X% two seen market-based saw pass-through year You was rate a driven Pricing XX% increase levels. trends by about strong chemical share $XX key market-based in virtually by million year. and tax the exiting increased quarter the that so up improvement the of strength Earnings net pricing cost of in intermediates, of variances XX%, acetone.

And refund, Act. and about robust compared higher First, million $XX approximately associated claim CARES from finally, reaching impact second, was the net to quarter, equity $XX last million, up due by income year-over-year, that's favorable several investing. prior the our was primarily $XX high roughly cash of the in and $XX cashflow capital. federal partially the operations execution priorities impact million million against to the compensation tax in and tax we as with working CapEx the growth return of of upset And million XXXX investments savings following year. cost anticipated carryback completion was $XX in the was year, unfavorable by changes capital of reflecting

X. Slide to turn Let's

while acetone year-over-year, the year-over-year. Here in we year-over-year. natural gas improves margin favorable were by million we was over materials observed highlight an primarily reopening trough saw performance in drivers, and a reflecting sharp Tracking around nylon the of our Ammonium supply chemical industry sulfur of sulfate, and in performance tailwind improvement as reflected we basis, for raw propylene continued continued increase spreads. Caprolactam demand and our roughly first benzene down input key supported globe. year-over-year, EBITDA few intermediates supply $XX in of big spreads drivers a constraints, XXXX, price industry the with quarter was economies Pricing over demand up variable the quarter. on off the a over in levels, net costs environment

price second turnarounds million over items to a significantly inventories reflecting price approximately drove an favorable basis Higher increased $X.X recent In Sequentially first $X inventory an XXXX, sales $X sulfur unfavorable And quarter $X layers lines. the XXXX reserve quarter. expensing the across and natural the lastly, volume of from from most XXXX natural price of representing these in spiked due into recall, environment. cost million to adjustment and strong income gas planned reduction inputs on sulfur pre-tax improve resulting the the adjustment fundamentals higher XXXX. year-over-year. strong and considerations XXXX of of was You increase for the benefited quarter. year-end volume only non-cash our we approximately supply in approximately first of first million major year-over-year in to the agricultural $XX higher from in XXXX, of we net the versus product prior and and LIFO inventory expect This approximately quarter all industry prices million The moving the reflects years. quarter gas in in the had quarter were ammonium of increases. low plant a million of sulfate impact other we We

the slide. turn next to let's Now,

XXXX, in left inventory we've of flow the net the as the $XX income, CapEx lower drivers rates while timing impact, robust anticipated. in cash cash with to the with environment material roughly demand cumene. use and payable $XX approximately in purchases a refund and headwind million also the of side the working compared free was notably of million capital. of the highlighted quarter favorable spend supported raw on purchases an million was jump Working payments by $XX by quarter the quarter lower a dynamic first Page of fourth and million the of cash On supply based sales cumene quarter, Accounts receivable increased representing reduction X, reflecting generation offset XX% a accounts $X of tax capital cash and the

year we've efficiencies rate in line our we with run down in has our our come for as priorities As previously, and shared CapEx capital targeted the drive process.

leverage to the trailing terms our and side net again accordance going credit of EBITDA shown debt XX the debt ratios adjusted back facility. On the Both with once or end calculated XXXX. of adjusted page, over our in we've months right EBITDA, net of the revolving

by was as continued leverage of quarter half well our cash a the comfortably first times. further in ratio leverage pay supported robust times, one of expected, and range at generation, improved We of our to which is debt within a as XXXX target two quarter down. As exited the earnings, reduced X.X

cash end target further We supporting for leverage reduction lower of robust continue towards XXXX to in range. expect our a outlook a flow the

to Now, Erin. call the me turn let back

Erin Kane

X, constraints spreads and back demand around product recovering Starting improvement where of now the industry globe. improving included Mike. and We've with further across pricing supply Thanks, our nylon. lines. economies seen with Slide I'm on on we've spreads the

comparing we've for performance, producers the upstream spread versus quarter believe resin over also industry the of input indication to better like shown is benzene costs, caprolactam which ourselves. particularly a integrated we This

an seen Asia in in encouraged continue quarter per level in caprolactam and to industry the March. recent ton benzene since the first XX, ton pricing. we've quarter, Although to $X,XXX of regionally second remains the improvement above and me, globally, oversupplied $XXX The demand spreads be we XXXX excuse position the averaged per by highest the

we through expect prices resin by which costs, supported input fundamentals, the benzene closely nitrogen Overall, planted would in including acres to rise profitability, move both first monitoring farmer forward. pricing to continued and caprolactam follow improving industry overall. prices, agricultural are moving quarter and crop We higher

the largest nitrogen urea on influence to total As underlying products. and nitrogen fertilizer by other reminder, an a tends have is consumption

influencing its sulfur the for supply does earned premium have However, ammonium sulfate nutrient. own the demand and dynamics,

improvement. this did while So other nitrogen the pricing urea move higher including in lag quarter, sulfate ammonium sharply fertilizers, did

tracking for raw quarter. costs we're quarter, particular, the recently the $XXX market Tampa higher addition, material from significantly industry. In sulfur time nearly per input long doubled second In last the settling in

highest continued XXXX. peak quarter and of Now we've in lower season. storms ag that our level since first refinery sulfate strong expect grade increase in premium demand on performance robust recent and is the the the from The reflects of And quarter seen to unplanned over spinoff with U.S. industry small, Despite supply acetone fighting prices refinery by the supply medium downtime strong quarter, ammonium in a the and rates, spring this, impacting demand reduction during industry planting supply. tight buyer season winter with the the operating expectations expand recent second amid a far we acetone the large propylene basis. the and first continued in in expansion year-over-year price the biomarker the realized costs increases. planned in a continued prices We've lastly, seen of balance over

have to small/medium the a first predominantly buyer backed where domestic propylene reminder, roughly surge although bit quarter. costs of is when freely price negotiated. has continued reflective X/X time come have higher, a As pricing off the a This is the of industry, exiting at also

discuss since Slide and We've we we key to as market things of turn conditions to experiencing well residential Let's industry as seen industries year’s place. healthy COVID demand. rebounding trough mill considerations And across the some Overall, in many discussed steady last are through XQ improved we remodeling X, carpet serve. quarter for particularly XXXX. data, remain from rates last with construction strong the

supporting to and indicators to have in also demand expectations ending continue improve. well. have for corn continues crop our trend favorably of demand for remain consumer term. input industrial Lowered all continues and tightness industry While have near first recovery resilient construction relatively applications. Ag with Expectation profitability auto, the continue and from outlook sulfur coupled nutrition in remain robust rising continue sulfur we prices, story and lag, electronics supported soybeans overall efforts nitrogen we been translated remained to supply A including drive the multi-year down evident low as high as positive commercial quarter electric out coming to increases and crop nitrogen expect the into the nutrient key pricing. We've value which that growers for remaining yields, has highs us. acres chain. Non-acetone increased seen a into number key of planted at costs value With our to while the the proposition is for which stocks, a XXXX-XXXX the

expect the supply near term. in industry to We continue acetone and a favorable balance demand

portfolio improving of the and as year We're to the for look investments in differentiated products. high purity on we'll Although as nylon through value high supply growth expected the our availability supporting applications, with phenol industry utilization through across back as we higher in the demand. progress increase well

anti-skinning and of great has grow XXXX XX% expected for CapEx as to this investment agent compared targeted expansion and been traction EZ-Blox in for year roughly commercial Our example an paints the to area year. is last a

focused remain application flexibility, supporting our optimize customer new development efforts and asset on mix. and to qualifications nylon products Our

We cable in double see year. wire strong continue in versus and to XXXX digit double last growth are sales while copolymer our to our expected offerings,

Slide Q&A. to to to Let's up X turn before wrap moving

sustainable Our and long we as strategic the remain creation return consistent priorities over value roadmap support term. shareholder

excellence. core day-to-day our First, execution foundations strengthening our culture enhancing by of and

robust and flow. XXXX, targeting output are in earnings year production higher cash We supporting record a

to make continue on performance. meaningful also our initiatives and sustainability progress We

supported We culture are core our our engaged by strengthening integrity, always by of safety, empowered high workforce and accountability, performing and guided values respect.

a I'm the report, happening which We overall sustainability around will take through we many ongoing highlights strategy. read all soon proud of to it. you publish annual organization encourage it when our I the our EcoVadis, integrated awarded initiatives This assessed. week, with share a independent ranks Gold an of all this assessment X% XXXX to in we companies by Rating CSR the among Corporate for now agency. Platinum our and were Rating us Social Responsibility follows publish top

Second, on earnings asset driving driving focused commercial We're and flow is improving core leverage. profitability cost operational operational cash cycle priorities superior creating on productivity, and and performance. through improved by through our strong optimization

efficiencies and plant turnaround We have the costs, number across capital as well efforts in and a place our targeting of rate, yield, organization, engineering quality in improvements planned as in programs.

range the planned expect $XX $XX and turnarounds approximately We XXXX be $XX million continue plant the of which to the million XXXX. in $XX to to million million impact to in is of XXXX, in in reduction compared

of a throughout rigorous For approximately the XXXX cost savings year. of continue of and model, to environment cost actions well, amid portfolio maintaining a structural the global taken demand based half and on through we on living diversity cost perform productivity and and last reflecting business permanent overall. tightened Mostly, focus strength supply our savings position product our with low

costs XXXX. input higher material focused raw in we're expected mitigating addition, In on

growth the third XX% differentiated value are long-term talked products, in We've high which is nearly areas an viewed more enhancing XXXX, it nylon. earns. value year, differentiated applications, our increase product, purity our products resiliency. would represents and focused represented about granular of this in portfolio high our high our Our X% last sales priority sustainable for which as in ammonium intermediate total is sales of XXXX. and by of approximately total does These the approximately our sulfate sales of from include not XX% premium a note I that enabling

sales XX% year-over-year increased the growth across a on to continued Although these basis, nearly products. we've of building In first quarter see these XXXX, our products basis. of smaller strong

lines, and continuing value growth product oximes investments purity high high while these optimize serving applications and bolstering our in offerings. Nadone to nylon through our are We

is Our enhancing final through priority value stewardship. creation disciplined capital

million reduced for CapEx We $XX $XX range our have XXXX. to expected to million in

cost return Now savings million that growth expectations, our $XX is planning high execution. spend and does from efficiencies and year towards about include in This projects. down reflecting higher

$XXX we As at may spin, $XXX smaller pipeline pipeline with projects to projects of million we against. execute million shortly continues recall, this million $XXX robust a to continue to refine, from originally million prioritize you and to $XX after be targeted which that

end We're lower a repurchase leverage range $XX we've continue and acquisition deliver also for authorization. the trend under portfolio our Adam, that, continue to and by expect to have momentum remaining and to I of had approximately would in as end this share strong lines year let's all We acquisitions call, with near the With and stakeholders. move bolt-on technologies. our target Q&A. key strategy focus our assess our all product being million execute the have inorganically value ability success recent to opportunistic as other mentioned that with of And of CIS, to earlier a built long-term we strengthen leveraging of against we'll coherence

Adam Kressel

could line Great. Betsey, the for Thanks, Erin. you please open Q&A.


session. We question-and-answer question will Instructions] Silver CL King. David [Operator from the Our go now begin first Please with ahead. comes

David Silver

Thank you. morning. Good Okay.

Erin Kane

Dave. morning, Good

Michael Preston

morning. Good

David Silver

questions have down Hey. number this cropped if kind here. that quarter. I issue drill the maybe of But I could layers to wanted of just – up a we LIFO on

if you of more just going or to layers even maybe origination in in further coming a the And those quarters, adjustments would forward? older more on touch genesis layers on be those So point, the could the provide will then anticipate other you background would Thanks. words, LIFO that great? little of you LIFO

Michael Preston

layers go to reduction the in the means cost layers. simply of we reduction and a year a the we as result $X.X so saw to is of XXXX. evaluate on we question, that's an in are the quarter communicated a million have back that inventories to we in need of And adjustment Yes, Well, did and those Dave. from Yes. accounting, and prior good LIFO you make as quarter, what

as a the our reduce were roughly those of some levels. to And have into as that costs. at higher costs inventory layers XX% current And P&L absorb result, standard a in the you you

forward, end we anticipate lot where don't to inventory we for going Now today. the are year year through change a by the whole

our to don't forward. So adjustment we'll continue anticipate go here. monitor inventory going forward another obviously we we But as

David Silver

I Okay. ammonium quarter on question, Thank the sulfate. this you guess, sales had in for next a I trend that.

do like quarter. sulfate I total and seems the in it actually modest So when a percentage from And of the it to ammonium that's your sales them the revenues, a increase was fourth mean, I was decline allocated revenue. it year-over-year very math,

volume a that there. year-over-year bunch confess now? and whole little increase in there's you. I relatively arms Thank I was quite demand certainly and how curious robust a modest – the seems only was wise. price why about and market So improved market price of be thinking both I'm to right know and a I confess legs But speaking has so the

Erin Kane

know of QX. that David, I as and here good season in expectations peak were the certainly have at communicated here the we we in

If two we're leading also selling basically the but July fall building is, export fall to you application the spring us think In progress as throughout the fall North some prep round. ag North sort America, year, right high year South you then America, about half fill inventory there cycle sort of levels sulfates to America. bridge contribution ammonium the run second the growing that of seasons of for the we how of as plus producing June sort the in has into for

exactly to play difficult it's sort will that how always know So of out.

the selling be stronger and I to full saw we heart annually June of And season. a versus season the what ag on we staging season into a year. a will material again, are this think last that July material

into season more going timing benefits could not wouldn't numbers add that I mix be our through in considerations, on we're a some to of reflect Michael some strong there view the the in it to coming see want it, and but here So if QX.

Michael Preston

And be repeated those thing due bit last timing. of only They we I'll sales first quarter of some last to add sort can year. the sales. didn't the have the Dave, year did year. little shifts fourth the we a some export year from lumpy prior quarter the of standard sales We timing is that this Yes, of had high see to

result year-over-year that as of So a the impacted that timing variance.

of more really. consideration, it's So sales a timing

David Silver

good rate. Very your on question I tax Okay. accrual with that. income here have a

around So, than should earnings what the be right expected my XX%, year. in last but it I – is significantly quarter was your earnings assumption your year first that higher pre-tax of this

that slightly income In tends I've levels than your have kind importance accrual in found accrual earnings up. the ramp percentage be certain normal other and or in when fade kind when benefits are higher pre-tax of that words, at handful But up, there earnings sometimes And the to tax to a like discrete anticipated. as be discrete of that, rate cases be might benefits rate those effect below a normal. we income can creep a should of applying result, tax originally

mean, So, tax earnings as year swing higher company pre-tax level a starts into full and think we purposes? for your of should how I accrual to rate earnings, about income the

Michael Preston

see forward I target is mitigate we've that thing question, about rate. we've XX% No. job assume would as a nice seen credits creep anticipating year. we to one a done and the It’s – think year in planning past of The to from tax is with this relative going to talked earnings we good last Dave. could higher any an I still driving of lot the effective we've doing are good and as a

ETR so is and of And an sort with good. bonus a envelope continue cash going there. of number But the expenditures, think I to tax the perspective on too capital we're planning to see that we depreciation say What from well. still still as benefits push from target XX% I'll sort a is

range that in excluding XX% way by tax the That's probably we Our XX% around cash excludes tax for the the that. rate first the refund right the normalized year quarter. will got be cash to more

we benefits as So to those see well. continue

David Silver

And of pretty your quarters, with in to it's question. maybe couple one bright cash Okay. back and picking outlook up for kind think then and a question going Erin get I of and a generation capital And But have be in if mean, you're a as this wondering, maybe the I'll or with for there shift here I flexibility And was here to your grows? little guess, the inclination more flexibility flow instance, this opinion. queue. deployment of priority for would share creep how I'm a say of buybacks cash share bit I Thanks. but repurchases just deploy which quarter does incremental, for for my kind you could

Erin Kane

Well, thanks a certainly over allocation And the David. for enhancing communications that, lever sustainable is value delivering a it's returns us past, committed our creation we with and to shareholder and our capital consistent strong are in for long core term and obviously strategy. through

the We're cash growth waterline high XXXX build out in that. well. And one, should still as through and have about We already assess projects to the As those priorities us, mix in opportunities return we've here year those ourselves to are drive to you and we levels as and as continue navigating have an prioritize would pandemic, for We strong opportunity the that what our our demonstrated continue think demonstrate business. great returning we XX levels. execute to we investments to shareholders achieve, on that leverage type and we excess pipelines right. us believe progress getting we again, And opportunity. for still as debt projects, for levels in started in plus We'll And which will through come acquisition And capital with And been that we long-term as place. CIS, is note as target against. which certainly allocation well. set sets continue we range business, we to recognized refine those for the continue inorganic and capabilities. is our as had a the that with tracking for our be into we we'll these has aligned strategy returns that executing right our is targeting to well authorization

David Silver

you Okay. Thank that. for

for So Thank a queue. questions you. I going get to have couple I more back But later. do am you in

Erin Kane

Right. Okay.

Michael Preston

Dave. Thanks,


[Operator next Please go comes Instructions] Stifel. Anderson ahead. Vincent Our from question with

Vincent Anderson

Yes, good to year off. job morning. start Great the

Michael Preston

morning. Thank you, Good Vincent.

Erin Kane

you, Thank Vincent. morning. Good

Vincent Anderson

first perspective, start with a just out capro. working logistics import particularly the way, with have XQ, capital are a into you standpoint? in And what a did deal to then export from specifically cost So how positioned you both and get the let's from of quarter standpoint cumene and

Erin Kane

the of do manage QX. through have looked the And that of of the the led and being in there we And and remained off to consistently the We which chain. the and we demand, we performed disruption our to last I into do results midst And know, sort next I a the And how maybe we And the then the we winter we our recognize to into damage you context that we mean, period quarter of physical for any at if supply show supply think facilities, see really, certainly industry. some in and we in earnings that well industries and right industry that offline, side the raw and still in XXXX were components one remained through. tightness sort really were raw difficult that which we storm direct not value disruptions. here with to Frankford it transitory rates we factors, availability stabilizing of is that's during utilization didn't maybe and working you things as that was the it of rates move around chain relatively there. time – left with sort XQ get quarter the call chain performance as to that fact how protect quarter. all supported performance largest nearly Hopewell the line did few certainly our materials material to in of take producers and strong Chesterfield plant that while fourth participate running And the and and consistent in reduction exactly

the reduction meet industry draw that in needs As LIFO consideration, like hard and did know a significant ultimate we as into the demands support going you we to worked know, the customer cord inventories, forward. that to customer down played our and

continues has U.S. demand been recover. It to strong. the So

here presence our think helped. I

QX, through of that's height cumene it, supply and a So, phenol the the nylon in back think significant think a expectation. still cyclohexanone of XX% capro supply chain our the chain there's were and off tightness. was impacted. the of you the When about I in And supply is others amount stabilizing and out side acetone U.S., it even

think that I certainly logistics talk export about U.S. sorting rolling, to of watch container where the that ahead and ships considerations, is get the that side do mix well. itself to but on the pre-booking So, shift containers. see comes we I as out. to need We supply We're it think When we'll something availability trying is we to that. continue have we And monitor. to in

I we XXXX into back think, transpire a see the shift our that exposure continue in export XXXX, perhaps our I that U.S. to the were XXXX. in our little that of on would alleviates levels numbers me, evident will mix excuse – say bit versus as what

Michael Preston


quarter. plan started and million the $XX we Just other up year I thing that cumene last good the inventory was add a would to year was in suppliers you and going in only inventory we if recall, is the The up certain in perspective. material the a from an and very knew turnarounds $X raw first million quarter a take overall position fourth were

some uncertainty that a through very result us weather to of position the first put a quarter So good in Uri. as in

Vincent Anderson

markets spreads quarter kind from contributed now your there Asia Okay, first perfect. too pretty China gas just looked just any the in we about, we're wild of that the then of of recovery. a lived? seeing get U.S., a internationally wanted check the first at as well. to prices to of and the thinking in just to in it of point When in over and had Eastern had appreciate general, they old was a really or I view. feel the outside And start kind of quarter, capital just that. short year good And terms you what Do sulfur like is right I fashion

Erin Kane

you we're I some point raw oxime of seen had were on typical QX, its stabilization side Asia to your had We've places in you nearly here, pricing, certainly, come and at of disruptions availability may or around as the spreads some material of with capital some in supply them There in number sort into ramp plus think percent we've there on Europe, that and potentially majeures lost XX think XX, of in April, watching. force capacity dislocations globe China too. a – ups

I start bit to think is a perhaps too. has there demand here that textile quick plateaued a

these posted strong will the recovery, And So is I whether we we'll be think to. the late an trend that housing, quarter. demand some stayed with I I every in had numbers sort are of of as automotive play we disruptions, there'll second again, that construction, forward be region. greatest, improvement through work think as watching into certainly side set of head in seen the as has opportunity it's here think But out that

Vincent Anderson

recovery. a spend time to wanted that I little I out further on bit we're sustained a it then as confident a more And of brought maybe little more bit looking know David you up, capital facing allocation. but become

modest front, outstanding buyback where sense a would share think the shares you start about more on is make and off dividend? curbing to start of there it repurchases a thinking First percent

Michael Preston

XX% you're of the more perspective. over look, share of all, what million aware repurchased we've done repurchase company. from of May $XXX so and first than a far We've

to So, on we've significantly bottom have the more we leverage navigated leverage continue authorization a still gotten times and to quite forward. perspective the range. a the lot. trend year $XX from that million challenging down in And done expect a remaining through the and down going we've here We farewell last

target we necessarily repurchases deploy share to certainly specific something of it dividends. down we product capital, as leverage opportunities But we terms there. ways shareholders. flexibility be lines. further pipeline, to our single would create other through would We either shares is something could of identified flow improve, also, value us opportunities say I this for cash M&A. gives continues up have you continue very opportunity, one more out our bring And mean, That's did that as first are There and don't yet. generation, evaluate. haven't we more leverage in we I year. just to So a that in But outstanding. to get our have one we every active improve done

as look to to vet there well. capital deploy We and continue

those, And again, forward. evaluate the going across getting us the even more So, the to it's opportunity really down leverage levels robustly Board. gives

Vincent Anderson

anyways. to that, ask Kind of going them headed but follow-ups my off a I'm couple of to

– So, have are that are about level right with just the think future Do when you in strong be about a debt improving opportunistic a the asset you you downturn, comfortable yourself levels, very they – to better to or position position such where a about now? lower targeting little think a obviously you think base drastically. we are maybe maybe debt overall is for in gross bit do operationally, you

Michael Preston

we're within Again, we've the range. mean, communicated I certainly that can we that range. comfortable operate

credit We within have very, very ample comfortable that our with. we're plenty liquidity facility and

evaluate going that consider as outlook we’ve again forward that opportunities weigh as to, the we’ll well we we we value creation. and leverage And all additional those proven for can opportunities look execute compare generation, for cashflow and which so, at out,

a, debt would there's we say terms gross So of leverage very more creating here. again, at I But a a it focused value of ratio. range level look wouldn't we specific sort would on of of in target,

Vincent Anderson

product more And M&A, comfortable so really back starting ideal you then, to Would more significantly? that base getting expect maybe Or the maintain, incremental like about improving prioritize drill to even you macro into bit and an a seen asset downstream to we've backdrop. so far? are we ad-ons assuming mix expanding more feel and to can thinking

Erin Kane

in represented we when in an we continued streams in that that that one plant fact nutrition Yes, applications have chemistries, And and And target around, into we continuing And software technologies growing wider we think about we sets. area just share and about, the nylon, company of of and the it's expand It think growth. have are variety then talked market as into investment in think continues and pharma one across before, historically, we've that amid value end rate whether to chain application more as areas really right, platform portfolio, been intermediates have application diverse that that that continue refine the you of intermediate ag as when optimization, the as in way linear about I year, think to interest, and we is we've are than in a investments. we you the Vincent, fashion much think those obviously either chemistry an diversified we've to about franchise the receive sort application nice even And end or nutrients, markets sets perform area it's to in we is higher forward representation, growth a of more electronic thinking space, has that continued coding, to integrate of business space. getting as that’s focus we got organically time, exposed value well. a a really to. at this

continue in our disclosures and we main be. three, And where ourselves around us these areas and growth sort not really are segments how of see we but how So, strategies to could reportable, targeted well those from that discreet operating represent are into driving them standpoint.

that's So been our focus.

Vincent Anderson

exactly a just then strategy so it. appreciate with kind then, finish it perfect And I couple the focused tying I'll M&A No, what like. into sounds questions up sense. makes of more

with urea nitrogen restarting am-sul in capacity the there of up the competition think in that as the could higher that utilization that specifically. any kind and just U.S., demand they're your maybe did So imbalance little about there Brazil, Are help overseas, opportunities, footprint firm acquisition bit like some tick incremental rates capro in one you then country? more here when I first, a

Erin Kane

right. again, I explore all will business. and can in number import ag can inorganic we our material so that sort my we're we with margins, accordingly in just these – I Brazil, raw sit we we its that players of today, right. the framework portfolio here, I you go think when are investments dampen continue how organic to we before coherence, There And said we looking with looking general, cyclicality, we our We're a continue both can avenues that. leave that, again, where independent increase Brazil remarks right. there in to avenues, for a traits is of about Yes, to space our very in a the mean, mean, are few of large considerations. address And

Vincent Anderson

may a opportunity downstream of ignorance And to offer. acetone just different become it and more a place the about in an has always that this U.S., how this of given the potential is struggling mix there? that felt the maybe last really I side. you've one tight But in and know price one, good go you users grades bit comes from little there quality of end be any But the a present your environment on

Erin Kane

the goes all acetone in are very end markets robust. which The into

it’s think I demand. evidenced by the

consumers, are demands from, large BPA all methacrylate, got making benefiting folks who got here. You've of are which you've end consumer methyl

are You've down value got strengthen paints in you look doing. chain how of and and coatings, can those customers that end

are So, pricing. on think pressures now, I certainly right here there

say I given would there about imports help month. think, of market right out the imports rather and availability is again, robust arrived supply the year. But that to strength considerations. to demands value as we have noted marketplace. XXK Certainly, are that expect the do T And this need ease just I chain end now we balance we would throughout the that of

Vincent Anderson

Thanks. Excellent. right. All


Silver ahead. King. Our go question CL with Please comes last from David

David Silver

thanks Okay, a lot.

a coming season planned believe, about of acid, there's for see of have of undergo major before a you'll levels question for shipment kind in operations inventory I any the you its do selling also amount equipment, capability I in consider execution all, kind that but there? your equipment kind you assume you of should In your I But take related, two-part wondering timing scheduled think update of I to to your could words, of offline. the the annual during of on quarter. just kind of be your mean, some and question. quarter. other what based how you a your on reduction availability, of if somewhat products? turnarounds, certain have spring But turnaround us first of company, of second product second the sulfuric get I'm interruption overall won't the mean the secondly, in turnaround. peak give to And quarter progress pieces update could And there Thanks. your the is could for we and I an activity through, update, us then progressing kind the the to able And any I that production second an one just of I be or aspect on I

Erin Kane

of happy I'm think No, to $XX $XX to turnarounds, continuing David. maybe we just rate about the positive, if a impact on to right, expect year million. full and million

for would comparable a be turnaround million. look the at at that we on you in $XX XXXX consideration it likely of If took, same type

our in and delivery So, to creating here. focus execution our on of I value and turnarounds we think continue

the to outages one you the may quarter. take and And plan will the one well in in set acid the plant if spring be recall, do year hope two our we one this Now, sulfuric our turnaround and spring. is fourth smaller for in in in the the in case, fall,

winter turnaround lighter we quarter, think we So, are if consideration, have our to well the as have did storm. complete. were more in you taking remainder second But that be in second completed the turnaround hope the quarter. could forward about QX some we of work navigating also still we the in at that much impacts We that Frankfurt as to our we of and has pull of

think right, rates. in demands And through. were ability. meet second these our So are at But as to plants still times, also consideration, those and represents. albeit taken that's certainly, we into the we The quarter running, continue leverage about navigate we what customer the reduced how

So, we've planned very well for these.

not in strong the second good position as in executing plant. continue expectations well – execution said on to now forward, obviously for the for in targeted drive impact. that's then think I right And shown quarter. in And we're the we just

the QX, perspective, chain, sulfate of We've for into value about full the warehouses and that, well year So, again, we're height think, very peak into we asked from in as the think the of even a you I season, moved positioned. material ammonium still particularly.

So pulled through navigate preparation. again, as we that expect had think, the well all we in intended. will we And I this we've as levers

David Silver

nylon Okay, about I question, part had business. guess, one your resins of the I thanks. engineering

of few producer their their And was call from to an the nylon disrupting listening the was So, resins resins customers. product PBT. of to one I auto a industry. ago, supply conference during from – another and engineering interest days with And shortages conference other cited they that big supplying engineering a call

nylon Now, engineering there's mean, resins. something nylon But I might not of that incident? that I be several know isolated typically. your that they you And are a perspective, in from types business, aspect in other used are seeing be might Is relative it's just broader nylon words mix is Thank an of on can in share your just of how market that part you the supply the that market? wise maybe to you. color, it some if demand

Erin Kane

for with the majeure. pertains auto that chain key majeure force of rather have to again, shortages X. as of is had, raw sort players. with say players right significant indefinite also has now number materials In happening sure. the several now, you announcing storm were as out significant well value here for in some it a you implications two right Yes, happening a Nylon But I significant certainly Nylon supply as X-X it, into would demand Europe force amongst there of some once there X-X, Nylon others, a have

a tropical bit So think space. that theory. here nylon that has North again, key resin as portfolio. to And, rate. in growth for see did storm an side us continue of for for focus application that plastics It's think, certainly see supply and I in we area the crimped about our with a engineering we We saw America, what transitory

the demand and certainly we through support here had couple of hard, months. the worked time right and last So, over right to it a meet – industry challenging

is if I a say So, would I there's by factors, at impacted time. not of think, as six side as But mostly likely this it driven noted. you of equally, all number sort XX, supply PA it’s more

David Silver

I No, an you. to Yes. I suspected but assumption. kind make that, of want didn't thank

you. thank So

Erin Kane

welcome. are You

David Silver

I charts, someone, line say a but a I'm medical to don't And kind want been of and then one of maybe up used a that piece like what's of assets very reading just But quarter anything. reminds chart to when on line someone to that spikes quarter. have medical goes diagnostic price me quickly, providing up, and a equipment happening you has last the after line I don't know, condition on

internally, So, expect or or I and do or the right Thanks. enjoying, think I what But continue mean, adjustments I how some how at some I on your planning on, mean, buyer, market you – mean, you can trajectory small would spot duration pricing now part. market? on purposes, mean, purposes, I'm acetone from you sure I remain very in mean, for imports margins robust perspective prices that are and elevated – these persistent this planning reef this level? for how

Erin Kane

there right underlying David, influenced also but that well. the here been certainly played here side months of is has significant consideration, a pricing supply cost input couple and last the Over as consideration through the there's market

then month. balance let's On market to the availability, raw monthly supply consideration. as throughout acetone came material call have to flow XX a side, we your point, it, materials underlying help have seen I this tons propylene ease relative back to as right, availability we started or take give in one off, the to as do world need, XX,XXX improved. out the to And noted, on XX,XXX basis has about And

continuing phenol see we're trend that utilization So again, as rebounds. to globally going to

something as And recovery were improving, trend to COVID, underlying certainly for of sort are hard. impacts year, we mileposts we the recall, may we're its from looking nylon half a the you watching. phenol And, that of of applications. an with I and those certainly demand the phenol think, look As at, those back were hit number is that of

moderation so And expect point as you out eases, cycle again any the would here. in we supply availability as

David Silver

Okay, I for me. great. appreciate it. it That's Thanks.

Michael Preston

you. Thank

Erin Kane

would This back concludes Thanks any to good question-and-answer Kane I our the over the for like for conference turn closing remarks. all Erin session. questions. to

Erin Kane

our again the the time conditions, your of share the delivered this are our opportunities that hopeful We morning. In interest first Great. we set and results are ahead. excitement for for and lie Thank you of outcomes in quarter industry possible about all you year driving the current business. best terrific

continue create We as strategies sustainable ability shareholder are across execute to confident value long-term we the portfolio. our and our to in

So we'll be with speaking safe next to again, Stay that, quarter. look and forward well. you with