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AdvanSix (ASIX)

Participants
Adam Kressel Director of Investor Relations
Erin Kane President and Chief Executive Officer
Michael Preston Senior Vice President and Chief Financial Officer
Vincent Anderson Stifel
David Silver CL King
Charles Neivert Piper Sandler
Call transcript
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Operator

Good day and welcome to the AdvanSix Second Quarter 2021 Earnings Conference Call. All participants will be in a listen-only mode. [Operator Instructions] After today's presentation there will be an opportunity to ask questions. [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. ahead. go Please

Adam Kressel

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

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

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

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

Erin Kane

your and Adam interest Thank and us for AdvanSix. for continued Thanks good everyone. morning, in joining you

conditions. demand and in As improving market execution second industry strong delivered sales, supply quarter, amid saw record earnings and you our the margin performance press in AdvanSix release, end tight reflecting

covers a financials Let me moment. Mike the of details our a in share highlights few before

built year. sequential significant momentum the since year-over-year quarter's furthers improvement This last and we've

growth with environment. on costs. net income presented You'll recall year the we chain challenging underlying side escalating XXXX and raw portfolio results the strength in the some seen we growth in inflationary again Page to and And to time. see model business on the challenges inputs and and you material generated rates participate navigate diversity disruptions, quarter, continued to X. strategies, capitalize industries were haven't very the and which supply execution logistics The opportunities demand a double in the both us long-term deliver In in full on we positive digit the enabled of our our

we've the made returns revenue generate two more capital over high rate. business to investments of we're in teen focus Sales growing XX% in in targets high grades of base margin high as than further rates utilization Volume customers. the reaching areas historically by foundation in was We you sustainable building And is that record look been are performance. provides our our focused the earnings converted have our a which of base numbers, We what our by an improved headline bolstered strong highly supported both growth Hopewell when executing long-term higher mid growth strong gross at differentiated nylon, into Chesterfield The valued demands return or the purity XX% granular sulfate our for plant rates on we beneath profitability record performance domestic and all ammonium control. intermediate, and improved IRR at to differentiated of then, since plants. our is continue applications term projects total. times meet products longer with now accelerated value at

of an turnarounds historical $XX million planned are and We processes impact approximately pretax million from for $XX our plant efficiencies expecting of through impact of execution, now our XXXX. to million improvement are delivering considerable and $XX in

our further Finally, provides optionality and balance flexibility for sheet creation. health value

a execution amid dynamics record flow and We're excited lot continued our posting strong business for XXXX. overall to favorable. expecting There's in earnings outlook the ahead, look we industry cash to support robust be As remains we the executing that, as of to long-term I'll organization, to strategy the it turn the strong discuss returns. shareholder our over about With Mike to details against focus and across and quarter. sustainable deliver continue

Michael Preston

where market Alright, a in results. year's I'll and compared XXXX. last through year demand everyone. totaled XX million, again quarter compared in next Erin I'll of effective very pricing the quarter, note market Sales first market market XXX We items to two compared highlight primarily by improved the volume and X up increase year. great. pricing $X.XX margin XX% pricing of now cost volume sequentially was nearly share up following comprised driven year the tax EBITDA quarterly improvement per product and a by the pricing a the higher reflects product year-over-year XX% pointed improvement, to year. generation. XXX% pass pricing first versus prior of and I'm will well, Sales robust tax with Pricing driven once higher The raw really to and XXXX. of key Earnings of of XX% also a each was our last second increased million, of XX% lines. pricing versus In lines. expansion reduce the Thanks walk volume per XX%. rate. based prior $X.XX up benzene by slide. across quarter on the in quarter rate to quarter financial propylene up record the Slide executed we that of good out meaningfully was the I from as variances the that's It share favorable on quarter morning, and net saw were Erin across that's across last growth, terrific XX% cash board. strong our material through increased end really based

geographical rate additional large First lower was credits, the levels. sales changes income impact mix second a of in to state which tax impact year the was to tax due tax on last combined had and research

XX capital $XX last year operations flow the robust million roughly partially tax timing net due million cash X reaching higher unfavorable of full working XX%. of continue to impact to We favorable in about project million expect from of to year by was year-over-year the quarter, approximately in the to compared changes execution. efficiencies income up and process by That's primarily was be capital. reflecting finally, CapEx XX rate And million. offset

turn X. to let's Slide Now

Ammonium supply the our chemical Caprolactam of for a Here of quarter our $XX few demand key EBITDA margin acetone a in second net price million Pricing gas variable has was we intermediates over industry a continued continued year-over-year drivers materials Tracking in propylene nylon reflecting basis roughly primarily and highlight over benzene was over on reflecting performance well spreads modestly by supply, performance the steadily tight and sulfate as sulfur environment quarter. raw a natural drivers recovered. input tailwinds year-over-year. up year-over-year. of in the were reflected spreads. industry improvement favorable supported and in increase key costs while year-over-year down sharp demand

were and of second higher we natural low prices these of and more environment stabilize sulfate gas favorable of in approximately price well. reflecting increased half to In supply these from and moving product lines ammonium sales inputs Sequentially anticipate mix expect market XXXX, benefited Improved into continue recent across from and most overall. We as volume You historically increases. XXXX. of year-over-year input our agricultural quarter a quarter due in strong a benefiting end our recall to volume drove the we execution spike the all XX environment. the second considerations sulfur to million favorable the for XXXX, price of major costs strong

is incentive turnarounds growth, plant planned other higher overall partially or to initial quarter. commercial the plant the offset Lastly, Energy compensation and conditions. million cumene expense, million current X favorability $X growth operational were from of approximately year-over-year insurance differentiated Increased execution million approximately highlight supplier meaningful support by a margin spend products that gross unfavorable were of X items I related in embedded so would volume to unfavorable shutdown strong the roughly and PES, XXXX an set these in from year-over-year. of proceeds impact in also industry Philadelphia Solutions in results

generating investments for applications, differentiated intermediates Our high are value purity nylon returns into the high solid business. and

slide. next the to turn let's Now

X, highlighted rates. net second supported side the of free On XX in and of Page quarter lower million spend robust left the the drivers of income we've cash generation flow CapEx the by

offset Another capital. quarter. reflecting very on flow cash by was the building the quarter in generated flow with capital first working $XX a pre-buy representing our use ammonium sales from free XX Working program, cash in fourth of advances the impact customer perspective million other cash primarily a strong partially roughly unfavorable of quarter quarter sulfate $XX million million from

As we priorities targeted for line spend down year. CapEx in shared previously, with has the our come our

We of the run rate half in increase the expect our year. to CapEx back

XX cash compliance we on average to on and of execution. value and XX to XXXX for robust timing our rates, sustain well However, supporting from cash And XX of high to right of depicted the stable expect processes, and create which base more with forward environmental we and maintenance for a enables million a year our page. safe safety sheet is generation utilization of the flow year to health business. supports That's this our roughly our It deployment mitigation. million well million as shareholders. our and reflecting basis side flow plus Improved a first on CapEx of per to risk plant our now go as range capital prior XXXX $XX framework anticipate anticipate We operating project full generation of to compared beyond. efficiencies in expectations the continue million a starts capital flexibility perspective as of combination balance XX remainder capital, CapEx million, as operations

to times We range a to debt and will levels remaining and target of also debt EBITDA. half manage within maintain cash and anticipate net two prudent one our leverage and closely the

to high projects. discretionary return for organic we favor As continue to choices create value,

over which spend million and with projects have to pipeline smaller high spin. average or to million but size growth to You of approximately refine, year The savings year-to-year, these per at would cost roughly of anticipate $XXX against. million the timing in and robust million on be $XXX and and projects We $XX or since vary prioritize million projects. to million quarter-by-quarter growth continues of against more. from current, cost projects that pipeline continue with started of $XXX $XXX recall these an savings execute roughly targeting that can we XX on XX% we of CapEx executed we and return of spent At IRR a

we targeting ammonium the this packaged completed a Next, progressing Industrial or M&A. acquisition Commonwealth But shared, ahead year first CIS, with small was and are we've accretive integration We acquisition. Services realization synergy earlier sulfate of plan. as well It business. a are our relatively

is a an active will we bolt-ons and a approach of growth something timing and synergy with next Although opportunities. can't that the pipeline disciplined on our acquisition maintain we predict, focus provide

of form of share as the structural in come can in particularly returns form dividend, opportunistic more This shareholders. the such flow more free light or to generation cash of cash in return of Lastly, a conversion and repurchases. the

since we and $XXX $XX on have worth As our XXXX million repurchased a reminder, of million over have remaining shares authorization. approximately

enhancement a key a disciplined and strategies is capital believe focus overall, returns. total to So strategy a to shareholder our core that attractive allocation we value support

over Now, let call the turn Erin. back to me

Erin Kane

producer Thanks with rising roughly our Starting $XXX demand market was an a are The relatively lines. and Mike. input XXXX. average per supply more seen characterized of second trough XXXX levels and industry which typical and spreads increase Asia $XXX we've from I'm and with in improving from demand, commensurate product quarter, further recovered per constraints. pricing included supply second where spreads benzene ton in the per the above and caprolactam continued now was Slide ton robust in Again, economics, approximately quarter the this line XXXX spreads Spreads on the just nylon, second of X, quarter quarter quarter. over have the up reflecting we've through and costs marginal first across by ton environment our disciplined with improvement. in underlying

both beginning July. including Now, sequentially fertilizer planted pricing into overall crop increased prices, strong top demand second fundamentals, the and and farmer pre-plant seen overall. in industry profitability applications here by March strong We've through dress through also agricultural nitrogen year-over-year consistent acres supported from quarter

to we material raw continue significantly attract addition, industry. In input costs for higher the

prices marker and in planned chain. a in the continued quarter As buyer supply refinery balances most further of unplanned mentioned second natural in industry realized historically the the and acetone We've and with versus sulfur on the propylene throughout supply medium continued earlier, tight acetone impacting gas prices second And expanded across low quarter buyer seen US prices lastly, in substantially basis. costs year-over-year demand Mike the of over small were last large expansion a XXXX the prices year. the of downtime over the value premium grade higher in

of reflective you roughly robust buyer predominantly this in reminder, remains moderate prior one industry pricing see buyer negotiated. Now relative exiting to the can really medium cycles. as that has quarter a the of where year medium, third is domestic price pricing small Small is as rather last

turn Slide industries. Let's for discuss to outlook X the to

I've improved In our that market serve diverse As of the end seen expected constraints sharing, been favorable across has have remodeling as at industry we've demand nylon, rug supporting value industry and we're mill macro a we outlook remained exposure amid the supply trends tight in supporting across demand Carpet experiencing overall. rates are end market supply demand been America relatively when domestically. chain strong. residential time steady industries North and

on residential lagged Our XXXX. commercial activity construction has

improvement expect year. However, next we into

resilient and consumer remain by continuing. steady. and to electronics We anticipate our nylon base to while up and food cable a is portfolio, also our plastics copolymer ramp electric for which supported expected we demand auto, also Growth our nylon remain applications offerings, and namely wire business into is in packaging industrial in expect and being in engineered demand differentiated

development flexibility, Our ag nylon efforts sulfate and continue on as supporting our optimize well. mix. and trend ammonium focused to customer qualifications key new to favorably application of In indicators remain products number a asset

now rising the continue entering sulfur demand coupled key Underlying planting tightness we are supporting as nutrients fundamentals we remaining in value nitrogen next with As industry strong increases ag to and season. agricultural the costs the value the efforts continue we chain. have robust supply cycle, sulfur supported our crop demand industry input drive expect yields, pricing. proposition With XXXX nutrition nitrogen down to through all

a at each markets third America, time quarter. sales season grade of export North described granular of drive ammonium few standard of product domestically we've compared the at into higher seasonality As to in second American sulfate years, the North mix expect the last greater typical quarter, do as the sales height this to the in we

of Now, historically, third million we've average sequential the $XX in $XX consideration million a seen to on COGS higher quarter.

or of we XXXX, and pricing be the in higher historical dynamics market improved range at slightly impact the typically to end the given seasonality anticipate However, seen. the below environment, lower

and diverse We're and coatings, and chemical intermediates, supporting the to high serve demand for building purity of name end we customers auto, to the across to Moving investments expect which set strong growth construction, electronics a pharmaceuticals continue our few. portfolio across paints in markets products, and a solvents, through high value applications.

agent has discussed, As we alkyd paints EZ-Blox an anti-skinning commercial as previously great our seen for example traction.

We that remain strength of regulatory through be portfolio Europe. those moving particularly half anticipate demand this robust and to to in fundamentals as to dynamics executing of capacity continued continued expansion support earlier. industry the Acetone growth, are forward We oximes currently I strong year. of area supply for second and an shared with driven balancing

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

more and promise day enhancing our cycle focused and driving value we on our of sustainable strategic delivering by our We're for on the half we XXXX outlook portfolio the and differentiated across return to set forward conditions, capital as September about long-term upcoming first you to underlying the core markets strengthening enhancing flow operational discipline the at all product With for we sustainable our are positioned let's our our terrific from trusted spin. Day We remains agility returns strong efforts of core benefits opportunities look earnings our enabling and expectations high execution remain partner Adam, XX. creation performance, value the sharing resiliency operational culture our The collective scheduled XXXX, customers. stewardship. Our lie annual Q&A. to demand With favorable. our our hopeful our through target In day shareholder excitement on portfolio over and our Investor The move profitability returns the for foundations supporting are the to shareholder deliver capital in have trends for industry results that, long-term commercial success focused consistent strong share business strongest superior and projects for ability current creation ahead. about and to long-term. of our continuation and of since and sustainable enhancing priorities growth that improving excellence, company cash roadmap teammates through by of by remain our

Adam Kressel

and Erin Thanks Great. for questions. the Please open line Matt.

Operator

Vincent [Operator come session. Stifel. go question-and-answer the begin will Please now from question with first ahead. will We Our Anderson Instructions]

Vincent Anderson

Yeah. Thanks on and congratulations the quarter.

Michael Preston

you. Thank

Vincent Anderson

Yeah.

have year. ammonium maybe US is the the to environment for XQ Chinese to than but this a thank supply. a the reminder, of also over on dynamics, you know it in So access us specific has helpful that pricing different and beating Brazil bit sulfate little always head AMSUL has I enjoyed economic to

should So more a XQ pronounced the just how normal. strong given was, maybe we decline second than quarter into be expecting

Erin Kane

now comment appreciate the So consideration. actually so the get, to air up again thanks and I in just need range seen. for the guide end the can this would lower of caught we've you reminder kind We the noting to our of into typical take

But the for export here a as to between ag a the we've see the the markets back we kind views into really next we we've if the talked domestic go million range $XX you about at and years several bit mix firmed export have this $XX really So of to standard coming modeled, play. can over look last million where that typically supplied. cycle

We levels have also roughly reset domestically fill XXXX. of are reset here XX, XQ than and higher pricing seeing our those fall

below. slightly even guide would that or the of lower we you to perhaps range So end

Vincent Anderson

on the sets, is you. think we of good be about to you've investments know Okay, that's doubling, know alright, some harder oximes and quantify when a from made fill hear. you're I you'd differentiated perspective, to intermediates capacity. nylon I numbers some that. around side. your didn't this curious pricing I kind willing - if But of said to capacity the thank I there the that your did catch fall not you putting start I'm think

does a to doubling willing what like So look if an of from you're share? that contribution, EBITDA

Erin Kane

Yeah.

So regard, value it's to here us product the because X% pull high our we hard point of represented products that the for per out of a We in about for EBITDAs - in kind for target consolidated factors out Vince, have now P&L but purity some the XXXX. we again thinking overall to of started that differentiate applications overall. and differentiated both combination this intermediates, sales and high we

recall, see we would of to mid teen You grown year XX% that had XXXX. conclusion like - are CAGR. year expecting this last At I mean in long-term more we something overall, a the

our to look you If is or year now can from of one these in sort of have four perspective. building in. of meaningful based oximes, margins of XX CAGR again at particular kind that number that growth kind that at really can that that at X-PO of business, again, point, see margin and be the a so that The but tracking it is gross the take here and sort are kind a oximes, of you you look we're at investing

a of three last instance year grew year XX%. For on CAGR

almost as of well profiles release These coming had win-win are really sustainability investments end the for had here you into They're modify toxicology XXXX. we're as introduction, that profitability. curve, reaching a market, product and basis, lower and introduction continue to again, product have capacity end kind a good asymptotically as that to a to on will, assets well, nice sort seen on we just of going the so we've an adoption front us of the sort on that's continued great of up on. sort So if the of

Vincent Anderson

and assets having the be a you are to markets so you may know today? or right, up of anything into All comes and I great of just where sourcing you market your own labor thank it's there having in we out you year equipment that strong? But whether way when CapEx anyways, Or trouble timing. should chopped is so it read more this that you're staying down are

Michael Preston

too Yeah. it. read No, much I into wouldn't

If half, run you cost we're is the we're from look last and the below first rate because the down of and as this bit expect typical down, year-over-year this perspective, year-over-year at smaller XX scope last year less some million CapEx which a well, lapping larger from a year of projects year. in would year savings we it requiring what capital. you - is were return we high The turnaround and a spent growth

So a is factor. that

thing in is develop those or million savings are and continue, other for down those. rate able the and costs efficiency And scope as up but is for still bring those closer execution, that The reason projects less. drive we've our cost growth really, we and to the the spend returns for X been to our

So our timing. that's really And planning there but our down actually We're projects. good news we're in some process, not in story. is driving a execution, slowing efficiencies our project and

be second ongoing I So ramping here rate, second half, in if that's pick anticipate you that expectation of the the so say the to so right, in range, half. CapEx, that $XX million would $XX run look an And for will will, second we'll up. will as be kind million in that I full at will see our it can half as you what up year

Vincent Anderson

then half That's supply handling mean, call side, Okay, results, to any to And there petrochemical but mean specific it doesn't you production year? on there want that guess your into and issues disruptions anything you based back helpful. of the or of under the the key I I seem like be had anything excellent. is just logistics mindful out in

Erin Kane

Yeah.

we well. first turnaround the first cumene obviously, us in We about on if appreciate a where anticipated situation navigate been pre-bought last the that January earnings we we supply I hit that allowed the through were to So the in had this well call look talked heavy here of year navigate and rather And to part is of two positioned. the current kind we've going at half in that. you Again, cumene manage on I at and this, to least our two in the supply how well, us that integrated an are agility, to mindful we current quarter. risk with focus force our suppliers think but in operating this that our is force basis majeures. chain majeures allow on ongoing think to industry it is third The

Vincent Anderson

a sneak I'm it's and to in, construction part going see more conversations In has overall? in than it some gotten just been time. story the are speak great to maybe nylon point one not it's you Got Or see just more customers where residential really so more with a little to carpeting? sheer contributing the of we bit magnitude It's investment of penetration, quite of residential to starting to actually demand. your

Erin Kane

keep triggering folks that have is that, machines an demand event nylon another also run well. of sort run trends as up that certainly, considerations And it's newer home question were to and it's eye interesting, them. would but one folks trying resale at of imagine, been of look here out is as sort well, to machines face of at the you And they as continue the at snug trying are probe to the nylon. because some relative uncover And trends to driven has for are here one on PET can't we older an as polyester, can typically replacements. polyester Yeah, interesting macro kind being remodeling, the we of to with value,

mill realign a we're again, the of that sure one of it something the I'm themselves but it. a of consideration. when if you year transitory, all only year-over-year, is, watching at only certainly through more But But things value looked And you the recovered. chains, is mill the we up it's at half look back are So probably XX% basis. kind it's that they're from of they're back XXXX, go June X%. the if I - about the rates rates, to June mean, down

kind two not seeing we sort of feel side. plateaued, bit picked you have a the up year if pandemic, the does soft to prior certainly perhaps on things that were steeper little look So at of back declines XX% it a whereas basis,

Vincent Anderson

rest Excellent. luck All of right. again, thanks of best year. the Well, and on the

Erin Kane

Appreciate it.

Michael Preston

you. Thank

Operator

Please next with will ahead. Our come David Silver question go CL from King.

David Silver

morning. Okay, thanks. Good

Erin Kane

David. morning Good

Michael Preston

Good morning.

David Silver

question. Yeah. I has use results. your with like had term anchoring year's the this a an question. it of And record more regarding is to This do

would But So like year focus wondering there. I metric, revenues but I I'm when just guess you're pick just is record maybe what a expecting, the you the that to and talk either maybe. on timeframe you EBITDA about

to company's on coming of beyond timeframe, but record kind anniversary? from you year in mean, up too not that guess your fifth So that. I your think I far charge And back the was some XXXX, you were there think when perspective, I Erin, bigger the I a I time. years that AdvanSix I'm prior at same out, look was XXXX were in spun XXXX, because if asking And believe. assets directly of

fundamentals current of levels? or XXXX, you. there, further may potential does back? performance the so as kind Thank just high the I'm for in to as public or mix guessing market it assets back since of is have record if had looked XXXX you it but you the the what any this results drive when And and you're say, is you five years So year, perspective, extend

Michael Preston

Yeah.

record, seeing were clarify those financials relative pointed very mean, just things I under at Erin that and in when a outlook I creating million terms business around that spin. We to talked clearly favorable improvements creation. perform, of type there. to a then operational the a the so very and as products, we're are well setting the other So that of the want XXX up very we the lot year, think of growth record a Dave, improvements ourselves out forward. et prior the Clearly that Honeywell so talked not to financials, granular XXXX returns and talking We've internal would out differentiated CapEx the the to comparing for we're different execute some since carved it conversion investments, we're financials XX% us for we're about cetera. as the the foundation this - time, to but well of is in achieving across it very long-term value driving the strong spin also say post against And environment, clarify about of for wreck, going that structure return rate we're

the it's foundation very for it feel and been forward. go and we we we've company, So tailwinds and improved this spin up underlying since good since earnings good and record strength setting of ourselves about as the how

David Silver

this ago. reporting, you price broke down was In just quarter Okay, excess volume? How so borrowing about year didn't questions, in exceptionally definitely produce? of sales above to versus much due kind to I my manner much, that sustainably particular, little I you a the robust accurate where growth guess, be other bit volume volume And of clouding down reflected COGS I the the trying but versus just a that. your think conditions couple was I mean, you second but if a affected was of words, your for comparisons could bit. of of Can volume the in from might revenue it in I demand? that you're I you year-over-year be scratch what inventory at quarter. you a XX%? wondering sequential see numbers other I quarters in the just I'm had and wondering of may XQ the maybe doing that thank look the XX% And the pandemic of maybe guys are trends growth the - kind same head break And you XQ.

would kind Thank be a price of So view helpful. you. sequentially volume

Michael Preston

performance the Yeah. own. in our Sure. stands as - the performance I mean, on or any the as quarter borrowing I second help - of wouldn't Happy quarter. about quarter all, as I characterize other think versus now, quarter first the from our quarter first to we its

You gives pricing, so saw you quarter the in the really from we to volume well, price really pricing from were across good that XQ. of low sort the relative the flat drivers product really lines. that relatively was majority growth look XX%, board, percentage sales sequential performance the in did grow as first. have inventories of and growth And favorable primary you in at as second across the a digit mid first of XQ to quarter, we all to But in about single the was the did that that

Erin Kane

impact last because guess, And to that recovering meet the the had it's pandemic in where we not relative to the the exposure maybe as in QX in sort an as that recovered hit only add, were occurring of put largest I talked just the something could of Dave, demand they from we particularly markets, year volume think export through consideration if us nylon. mix nylon recall it I existed. was they I about but - to you

about think it of in revenues right. of went nylon you QX If export. was seven, to last year, This XX% our year, revenues

bring our has demand able that sole playing having our is proposition of being concentration as again, to to high recovered, value to value of copolymers America out. proposition here So customers North six in the producer being our

as well. think I there's into year-over-year that on picture So also here that plays consideration mix

David Silver

be costs would question and that. chain costs for reliability I regarding issues. other any supply and My next guess shipping logistics you and and supply thank logistical Okay,

perspective, been the I your the it chain I XX how a Mike term is your and I supply cumene supply expand real challenges. And unprecedented any or remarks. I've to describe or opening but quick, didn't And about unprecedented companies view my of report. from just think hear use might had joke there's that touched Erin you an hoping comfort Vincent was to in that broader for chain but logistics of confidence. So viewing And from a you're on

and So in meeting kind just comment your two. or much. anticipate Thank a how any on your broader that you over very quarter you internal targets chain of the challenges next supply see maybe you

Michael Preston

deliver been year. to very But lot But and Dave, have rail, passing to We've to certainly, look about think the proud been managed overall, as good things mean, amount Things sense strong across through. it ocean, seen our board the We've market. back logistics have felt get to our also trucking. mitigate things you we tighter. containerized strengths that. overall. limited But very some And We And felt we very have domestically transportation capacity. about and of our a we're we've we've my transport in how secure need to that available. of been able in customers. we but channels our have in tight frankly, of certainly and of think well. one to deliver inflation of the where and trucking, first I that export the Probably markets, really hard view Yeah, working productivity through again, materials projects, as as have been also customers. been There very we most half is the the is this the products very, capacity in to we advantages the we being in We've tight.

we've out. very As demonstrated, good we're

be to of our in being but to year, terms we half. the we going to manage things second of to anticipate to So the well a as tight, we in second not half the as that could, it continue and meet we're us objectives hurdle expect

David Silver

I or much time two be want take But up will Okay, there queue? to don't get of great. other one I questions. do have too to back time. kind in

Michael Preston

Yeah.

David Silver

to queue. I'll I'm back there. get going stop very much. in Okay, Thanks And

Michael Preston

Dave. Thanks

Erin Kane

Thank you see you, back.

Operator

next come [Operator Charles go Piper Sandler. will Instructions] ahead. Our Please question Neivert from with

Charles Neivert

guys. morning, Good

Erin Kane

Good morning.

Michael Preston

Good morning.

Charles Neivert

lows price little a which always certain you back buying shares acquisition at to great of back. have have I bring the on the that's the case either back. for a in or be a amount you the obviously which acquisitions? value. at spend from would it shares, as looking buying can money may which them been mean be obviously, money And to glad question please, reasonable It's a their One the elevated so is from current while versus while, be

the of where have shares on generally assuming lead sort range forward. the sit use of - now. As right the is in the that and sit now I going cash other of shares mean, are one they

Michael Preston

it's deployment of why I think we the presentation. our good in that shown prioritization on be Yeah. reason wanted the the And clear that's part a I to framework and of we've mean, capital why very Charles. question

which we've our shareholders a here paying we XXXX. going And one company clearly, performing very, we're is in the the of growth off, expectations. with first over more cost M&A terms be more The in That talked a did respect about We've well to of but savings repurchases million are, is first quarter. very ahead projects, to opportunities. of to going in company, the of $XXX which we're very our structural first funding dividend continuing active was we is to one also which And past evaluate evaluating XX% of since specifically returning and forward. a bit quite opportunistic repurchased worth return, We've a the cash historically. we'll done of view share as and

about continue done. So will feel that basis. to we we we've on what an opportunistic And good evaluate very

Charles Neivert

sort already it if of Great, purchase share given acquisition. to lower the had of makes obviously thanks, share probability And essentially success a up less on going keeps the you've

are it sort as then ongoing But the range, comfortable continue grow keeping high you're you're - what? X.X. X.X you're keep conservative cyclical between reasonable of bit is that of know I a to work that would towards reasonable. like industry, being And you just matter most that upper being the range are, do But you if think you to to they guys you they end the that's or things more the you towards think if to to going want method at more X on And you start going the feel little little range low and end that of if range things downturns. given more no question, give the keep But generating of is Another end or mentioned range X.X the think can a in one of or might time certainly a X, tend heading bit more clip, cash, yourself things. I think turn to better sort fairly way you of and evaluate, are the these quickly financial or you've I flexibility fairly consider get conservative. cyclical

Michael Preston

in very as I I respect creating today we are M&A we're the X do say forward. us the us of to where We that and we say of good. feel go range. to low range. cash very with way go And make to wouldn't the end whether mean, and are what or we additional to right again, where X.X. through good And that more being we a offers that to affording flexibility value, again, evaluate we'll the above comfortable of still about optionality returning feel where very range. range can at now around comfortable it I'd be we are shareholders, continue flexibility range look, so being the us will comfortable lot

Erin Kane

future we continue characterize what of time, margin cash profile, just different metrics. look like enhance for how I'd portfolio as resiliency right, Charlie size, to of stability enhance range as core free Obviously, we And right. as could looks flow in over that we that to very today, your to valuation the kind look the those as and the point the

Charles Neivert

because range uncomfortable. the a in if beyond Yeah. feel very X point where where you're doesn't And being end to get you position comfortable, low things X.X let's the it your is hope say put I you gets current had the upper the think to mean, clearly, end really high Matt really some up a of end any the get in as of at in sort doesn't low you put end end or a little but jeopardy. range really maybe it of things about, ugly, real you the

me there seem pass through you to care? is you for is volatility? try last that can with deal they've do really question that Or over do to suggest up end anything with all last doing costs probably that to the really so. be and there deal volatility? don't Or you mean, you guys help place or Is anything year over Another volatile. been are I the

Michael Preston

as Look, in one raw we past that versus contracts. talked is tight based down quarter. But ourselves as the few contracts. And protect the in in I of way up went QX formula down, spike the we've QX as Things gone of constantly about quarter really you actually the through first is moderate with on in propylene business then saw formula the got our half we materials our storm mentioned. prices into mean, we has got sequentially QX volatile, and propylene had they very and winter been the and second

do And sure exposures. make up raw getting recover quarter so demonstrated we on materials we see remaining great for we those getting price you in here. after and pass been if And that can has there portion out go any not and that's a increases quarter the through as job that, formula,

and raw eyes that and appropriately inflation lot it keep and doing successful the so the Given how variable close and model a and we about we've recover to buy, but supply how our really, obviously, overall, the progressing, seen testament on price we materials hard the feel our demand business margin. fact that the that, protect we a of how in again, control been across we've we good respond that and we to things and we are track very

Charles Neivert

me Great. it Thanks today. for That's much, very guys.

Erin Kane

from to hear Thanks Good Charles. Perfect. you.

Michael Preston

you, Thank Charles.

Operator

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

Erin Kane

outlook delivering to organization Great. confident The ability morning. our business strategies continues support terrific creation our and create customers total Thank as you I'm roadmap value to long-term all, we are of in and interest sustainable again, this within for shareholder our returns. were your time while focus executing and our remains proud how very we for results. the our favorable

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

Operator

is now presentation. concluded. today's conference The attending for Thank you

disconnect. now may You