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What changed in AdvanSix Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of AdvanSix Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+269 added−281 removedSource: 10-K (2025-02-21) vs 10-K (2024-02-16)

Top changes in AdvanSix Inc.'s 2024 10-K

269 paragraphs added · 281 removed · 216 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

89 edited+20 added−23 removed70 unchanged
Biggest changeWe are among the most significant suppliers of acetone to a variety of end-markets in North America. Sales of acetone in 2023 were approximately $203 million and represented 13% of our total sales. In addition to ammonium sulfate and acetone, other products from our manufacturing process include high-purity phenol, AMS, cyclohexanone, oximes, cyclohexanol, sulfuric acid, ammonia and carbon dioxide.
Biggest changeIn addition to ammonium sulfate and acetone, other products from our manufacturing process include high-purity phenol, AMS, cyclohexanone, oximes, cyclohexanol, sulfuric acid, ammonia and carbon dioxide. The diversity of our sales portfolio helps to mitigate, to some extent, the cyclicality in our end markets.
The market growth typically tracks global GDP growth over the long-term but varies by end-use.
Market growth typically tracks global GDP growth over the long-term but varies by end-use.
As noted in their respective charters: • Our Health, Safety, and Environmental Committee oversees policies and programs relating to HSE matters, including process safety, HSE management systems and compliance with HSE regulations and compliance. • Our Nominating and Governance Committee annually evaluates the effectiveness of our corporate governance framework and corporate social responsibility policies, goals and programs, including oversight of sustainability matters, community engagement and government affairs, as well as such other matters regarding the Company's role as a responsible corporate citizen. • Our Audit Committee exercises oversight of enterprise risk assessments and risk management including with respect to current and emerging labor and human capital management risks and seeks to mitigate exposure to those risks. • Our Compensation and Leadership Development Committee is responsible for oversight of the performance, development and retention of senior and executive management necessary to support the growth and success of the Company.
As noted in their respective charters: • Our Health, Safety, and Environmental Committee oversees policies and programs relating to HSE matters, including process safety, HSE management systems and compliance with HSE regulations and compliance. • Our Nominating and Governance Committee annually evaluates the effectiveness of our corporate governance framework and corporate social responsibility policies, goals and programs, including oversight of sustainability matters, community engagement and government affairs, as well as such other matters regarding the Company's role as a responsible corporate citizen. 9 • Our Audit Committee exercises oversight of enterprise risk assessments and risk management including with respect to current and emerging labor and human capital management risks and seeks to mitigate exposure to those risks. • Our Compensation and Leadership Development Committee is responsible for oversight of the performance, development and retention of senior and executive management necessary to support the growth and success of the Company.
Our focus on operational excellence and ongoing productivity improvements concentrate on the following: • Increasing production volume through asset reliability, flexibility and capacity; • Investing in digital transformation and process automation to optimize and improve operational efficiency; • Executing planned plant turnarounds and prioritizing replacement maintenance capital investments to mitigate risk and support safe, stable and sustainable operations; • Investing in intermediate chemical buffer storage capacity to mitigate the unfavorable impact of routine maintenance and unplanned interruptions; • Energy and direct material initiatives aimed at increasing plant productivity and lowering costs; and • Procurement processes, competitive bidding and supplier diversification to reduce raw material and indirect costs.
Our focus on operational excellence and ongoing productivity improvements concentrate on the following: • Increasing production volume through asset reliability, flexibility and capacity; 4 • Investing in digital transformation and process automation to optimize and improve operational efficiency; • Executing planned plant turnarounds and prioritizing replacement maintenance capital investments to mitigate risk and support safe, stable and sustainable operations; • Investing in intermediate chemical buffer storage capacity to mitigate the unfavorable impact of routine maintenance and unplanned interruptions; • Energy and direct material initiatives aimed at increasing plant productivity and lowering costs; and • Procurement processes, competitive bidding and supplier diversification to reduce raw material and indirect costs.
Acetone is typically used by our customers as a key raw material in the production of a variety of other chemicals which are then used in the applications listed above. 6 We also produce and sell AMS, cyclohexanone, oximes and cyclohexanol to customers for use in end-products such as resins, inks, paints, coatings and electronic components.
Acetone is typically used by our customers as a key raw material in the production of a variety of other chemicals which are then used in the applications listed above. We also produce and sell AMS, cyclohexanone, oximes and cyclohexanol to customers for use in end-products such as resins, inks, paints, coatings and electronic components.
We have emphasized investing in our talent and focusing on developing our people to incorporate opportunities for advancement based on experiential learning and development. We acknowledge that development is a career-long endeavor and place the greatest emphasis on learning by doing, supported by feedback, training, and self-reflection. AdvanSix promotes development through training that broadens work-related skills.
We have emphasized investing in our talent and focusing on developing our people to incorporate opportunities for advancement based on experiential learning and development. We acknowledge that development is a career-long endeavor and place the greatest emphasis on learning by doing, supported by feedback, training, and self-reflection. 10 AdvanSix promotes development through training that broadens work-related skills.
Our filings with the SEC are also available on the SEC website at www.sec.gov. We are a Delaware corporation that was incorporated on May 4, 2016. Our principal executive offices are located at 300 Kimball Drive, Suite 101, Parsippany, NJ 07054. Our telephone number is (973) 526-1800. Our website address is www.AdvanSix.com. 13
Our filings with the SEC are also available on the SEC website at www.sec.gov. 12 We are a Delaware corporation that was incorporated on May 4, 2016. Our principal executive offices are located at 300 Kimball Drive, Suite 101, Parsippany, NJ 07054. Our telephone number is (973) 526-1800. Our website address is www.AdvanSix.com. 13
Our compensation and benefit programs are designed to support our business strategy through four key objectives: • Attract and retain best-in-class talent; • Drive and pay for performance that creates superior results and sustainable stockholder value; • Manage risk through oversight and sound management; and 10 • Nurture a culture of employee health and wellness.
Our compensation and benefit programs are designed to support our business strategy through four key objectives: • Attract and retain best-in-class talent; • Drive and pay for performance that creates superior results and sustainable stockholder value; • Manage risk through oversight and sound management; and • Nurture a culture of employee health and wellness.
Carpet is the largest end-use for Nylon 6 in North America and has seen stable to declining demand growth for a number of years reflecting shifts in consumer preferences to hard flooring versus soft and the previous substitution to lower-cost polyester.
Carpet is the largest end-use for Nylon 6 in North America and has seen stable to declining demand growth for a number of 5 years reflecting shifts in consumer preferences to hard flooring versus soft and the previous substitution to lower-cost polyester.
We do not consider any individual patent, trademark or 7 licensing or distribution rights related to a specific process or product to be of material importance in relation to our overall business. In our judgment, our intellectual property rights are adequate for the conduct of our business.
We do not consider any individual patent, trademark or licensing or distribution rights related to a specific process or product to be of material importance in relation to our overall business. In our judgment, our intellectual property rights are adequate for the conduct of our business.
We mitigate our exposure to commodity price risk primarily through the use of medium- and long-term, formula-based price contracts with our suppliers and formula-based price agreements with customers which structurally pass through increases or decreases in raw material costs.
We mitigate our exposure to commodity price risk primarily through the use of medium- and 7 long-term, formula-based price contracts with our suppliers and formula-based price agreements with customers which structurally pass through increases or decreases in raw material costs.
Most fundamentally, it enables us to spread fixed and overhead costs across more pounds of production, thereby enabling us to produce caprolactam at a lower per pound cost than our competitors.
Most fundamentally, it enables us 3 to spread fixed and overhead costs across more pounds of production, thereby enabling us to produce caprolactam at a lower per pound cost than our competitors.
By contrast, a significant number of our competitors are in geographic locations where energy prices are currently substantially higher. Our footprint also provides access to a number of higher value end markets across our product lines.
By contrast, a significant number of our competitors are in geographic locations where energy prices are substantially higher. Our footprint also provides access to a number of higher value end markets across our product lines.
Currently, we not only have leading positions across these diverse product lines but are also aligned to several favorable macro trends that are supporting growth across the portfolio including urbanization and aging infrastructure, digital transformation, global food production and resource scarcity, and a shift to green and performance chemicals. In addition, our acquisition of U.S.
Currently, we not only have leading positions across these diverse product lines but are also aligned to several favorable macro trends that are supporting growth across the portfolio including urbanization and aging infrastructure, digital transformation, global food production and resource scarcity, and a shift to green and performance chemicals. In addition, our U.S.
There are no family relationships among them or our Board members. 11 Name, Age Position Business Experience Erin N. Kane, 46 Chief Executive Officer and Director Prior to joining the Company, Ms. Kane served as vice president and general manager of Honeywell Resins and Chemicals since October 2014.
There are no family relationships among them or our Board members. 11 Name, Age Position Business Experience Erin N. Kane, 47 Chief Executive Officer and Director Prior to joining the Company, Ms. Kane served as vice president and general manager of Honeywell Resins and Chemicals since October 2014.
Finally, our long-term customer relationships and contracts enable us to maintain high plant utilization rates, which, along with our size and scale, serves to retain and attract customers who prioritize security of supply. Diverse Revenue Sources from the Sale of Ammonium Sulfate Fertilizer, Acetone and Other Chemical Intermediates.
Finally, our long-term customer relationships and contracts enable us to maintain high plant utilization rates through the cycle, which, along with our size and scale, serves to retain and attract customers who prioritize security of supply. Diverse Revenue Sources from the Sale of Ammonium Sulfate Fertilizer, Acetone and Other Chemical Intermediates.
Our R&D activities are regularly prioritized and funded with a stage gate approach with a primary emphasis on improving our chemical manufacturing processes to increase efficiency, capacity and productivity, lower production and operating costs, and innovating and developing new product applications. We benefit from numerous patents and trademarks that we own.
Our R&D activities are regularly prioritized and funded with a stage gate approach with a primary emphasis on improving our chemical manufacturing processes to increase efficiency, capacity and productivity, lowering production and operating costs, and innovating and developing new product applications. We benefit from numerous patents and trademarks that we own.
Our four key product lines are as follows : • Nylon Solutions ◦ Nylon – We sell our Nylon 6 resin globally, primarily under the Aegis® brand name.
Our key product lines are as follows : • Nylon Solutions ◦ Nylon – We sell our Nylon 6 resin globally, primarily under the Aegis® brand name.
From 2015 through 2018, she served as vice president, human resources of the Honeywell UOP business. Christopher Gramm, 54 Vice President, Controller Prior to joining the Company, Mr. Gramm served as vice president and controller of the aerospace and corporate government compliance divisions at Honeywell. He joined Honeywell in 1997 as a senior staff accountant.
From 2015 through 2018, she served as vice president, human resources of the Honeywell UOP business. Christopher Gramm, 55 Vice President, Controller Prior to joining the Company, Mr. Gramm served as vice president and controller of the aerospace and corporate government compliance divisions at Honeywell. He joined Honeywell in 1997 as a senior staff accountant.
Our Hopewell manufacturing facility is one of the world’s largest single-site producers of caprolactam as of December 31, 2023. • Ammonium Sulfate – Our ammonium sulfate is used by customers as a fertilizer containing nitrogen and sulfur, two key plant nutrients. Ammonium sulfate fertilizer is derived from the integrated operations at the Hopewell manufacturing facility.
Our Hopewell manufacturing facility is one of the world’s largest single-site producers of caprolactam as of December 31, 2024. • Plant Nutrients – Our ammonium sulfate is used by customers as a fertilizer containing nitrogen and sulfur, two key plant nutrients. Ammonium sulfate fertilizer is derived from the integrated operations at the Hopewell manufacturing facility.
Equity, Diversity and Inclusion At AdvanSix, we strive for an inclusive work environment that fosters respect for all our coworkers, customers, suppliers and business partners. We value the diversity reflected in the various backgrounds, experiences, and ideas of our directors, employees, contractors, and other stakeholders.
Engagement and Inclusion At AdvanSix, we strive for an inclusive work environment that fosters respect for all our coworkers, customers, suppliers and business partners. We value the diversity reflected in the various backgrounds, experiences, and ideas of our directors, employees, contractors, and other stakeholders.
Before joining AdvanSix, he was a corporate and securities partner at Day Pitney LLP and a corporate and finance associate at Pillsbury Winthrop Shaw Pittman LLP and Pitney Hardin LLP. Kelly J. Slieter, 49 Senior Vice President and Chief Human Resources Officer Prior to joining the Company, Ms.
Before joining AdvanSix, he was a corporate and securities partner at Day Pitney LLP and a corporate and finance associate at Pillsbury Winthrop Shaw Pittman LLP and Pitney Hardin LLP. Kelly J. Slieter, 50 Senior Vice President and Chief Human Resources Officer Prior to joining the Company, Ms.
Nylon 6 is a polymer resin which is a synthetic material used by our customers to produce fibers, filaments, engineered plastics and films that, in turn, are used in such end-products as carpets, automotive and electric components, sports apparel, food packaging and other industrial applications. ◦ Caprolactam – Caprolactam is the key monomer used in the production of Nylon 6 resin.
Nylon 6 is a polymer resin which is a synthetic material used by our customers to produce fibers, filaments, engineered plastics and films that, in turn, are used in such end-products as carpets, automotive and electric components, sports apparel, food packaging and other industrial applications. ◦ Caprolactam – Caprolactam is the key monomer or building block used in the production of Nylon 6 resin.
In addition, in this Form 10-K, the Company incorporates by reference certain information from parts of its Proxy Statement for the 2024 Annual Meeting of 12 Stockholders, which will also be available free of charge on our website. Information contained on, or that may be accessed through, our website does not and will not constitute part of this Form 10-K.
In addition, in this Form 10-K, the Company incorporates by reference certain information from parts of its Proxy Statement for the 2025 Annual Meeting of Stockholders, which will also be available free of charge on our website. Information contained on, or that may be accessed through, our website does not and will not constitute part of this Form 10-K.
Kintiroglou, 45 Senior Vice President, General Counsel and Corporate Secretary Prior to being named to his current role, Mr. Kintiroglou was the deputy general counsel of AdvanSix since the spin-off in 2016.
Kintiroglou, 46 Senior Vice President, General Counsel and Corporate Secretary Prior to being named to his current role, Mr. Kintiroglou was the deputy general counsel of AdvanSix since the spin-off in 2016.
For the years ended December 31, 2023, 2022 and 2021, our international sales were $284 million, $323 million and $302 million, respectively. AdvanSix is a single operating segment and a single reportable segment, operating through five U.S.-based manufacturing sites located in Frankford, Pennsylvania, Hopewell, Chesterfield and Portsmouth, Virginia and Bucks, Alabama. The Company's headquarters is located in Parsippany, New Jersey.
For the years ended December 31, 2024, 2023 and 2022, our international sales were $213 million, $284 million and $323 million, respectively. AdvanSix is a single operating segment and a single reportable segment, operating through five U.S.-based manufacturing sites located in Frankford, Pennsylvania, Hopewell, Chesterfield and Portsmouth, Virginia and Bucks, Alabama. The Company's headquarters is located in Parsippany, New Jersey.
We consistently focus on and invest in improving production yields from our various manufacturing processes to build on our leading cost position. Our logistics infrastructure enables a reliable intra-plant supply chain and consistent and timely delivery to our customers.
We consistently focus on and invest in improving production yields from our various manufacturing processes to build on our leading global cost advantage. Our logistics infrastructure enables a reliable intra-plant supply chain and consistent and timely delivery to our customers.
Strong underlying agriculture fundamentals coupled with elevated global energy input costs and tighter nitrogen fertilizer supply and demand dynamics drove significantly higher nutrient values through most of 2021 and 2022. Nitrogen fertilizer pricing declined through 2023 amid lower energy costs and increases in global supply availability, however, remain favorable relative to historical levels.
Strong underlying agriculture fundamentals coupled with elevated global energy input costs and tighter nitrogen fertilizer supply and demand dynamics drove significantly higher nutrient values through most of 2021 and 2022. Nitrogen fertilizer pricing declined through 2023 amid lower energy costs and increases in global supply availability, but remained favorable relative to historical levels.
Sales to Shaw were 11% of our total sales for the year ended December 31, 2023, and 12% for the years ended December 31, 2022 and 2021. We typically sell to our other customers under master services agreements, with primarily one-year terms, or by purchase orders. We have historically experienced low customer turnover.
Sales to Shaw were 10% of our total sales for the year ended December 31, 2024, and 11% for the years ended December 31, 2023 and 2022. We typically sell to our other customers under master services agreements, with primarily one-year terms, or by purchase orders. We have historically experienced low customer turnover.
We use the industry standard Total Case Incident Rate ("TCIR") to measure our ongoing safety performance and compare with benchmarks. TCIR is defined as the number of occupational injuries and illnesses per 100 employees. Our TCIR was 0.97 in 2023, 1.15 in 2022 and 0.48 in 2021.
We use the industry standard Total Case Incident Rate ("TCIR") to measure our ongoing safety performance and compare with benchmarks. TCIR is defined as the number of occupational injuries and illnesses per 100 employees. Our TCIR was 1.09 in 2024, 0.97 in 2023 and 1.15 in 2022.
Acetone global demand totals approximately six million metric tons with the U.S. representing approximately 20% of the global market. Major end-uses for acetone are methyl methacrylate, polycarbonate, epoxy resins, ketones and solvents used widely in automotive and construction, as well as agrochemicals.
Acetone global demand totals approximately eight million metric tons with the U.S. representing approximately 18% of the global market. Major end-uses for acetone are methyl methacrylate, polycarbonate, epoxy resins, ketones and solvents used widely in automotive and construction, as well as agrochemicals.
We continue to pursue a highly-selective acquisition and alliance strategy to supplement our organic sales by broadening our customer base, developing our technology and product portfolios, and enhancing our cash flow profile and margin stability. On an ongoing basis we evaluate options to return cash to shareholders including significant remaining capacity under our current share repurchase authorization.
We continue to pursue a highly-selective acquisition and alliance strategy to supplement our organic sales by broadening our customer base, developing our technology and product portfolios, and enhancing our cash flow profile and margin stability. On an ongoing basis we evaluate options to return cash to shareholders and maintain sufficient capacity under our current share repurchase authorization.
As a result of strong global acetone demand driven by favorable COVID-related acetone derivative drivers (hand sanitizers and acrylic screens) in addition to the implementation of acetone anti-dumping duties, acetone imports into the U.S. declined through 2020 and 2021, creating more favorable supply and demand conditions for the product and improved pricing.
As a result of strong global acetone demand driven by favorable COVID-related acetone derivative drivers (hand sanitizers and acrylic screens) in addition to the implementation of acetone anti-dumping duties, acetone imports into the U.S. declined in recent years, creating more favorable supply and demand conditions for the product and improved pricing.
Information about our Executive Officers The executive officers of AdvanSix, listed as follows, are appointed annually by the Board. Ms. Kane, Mr. Preston and Mr. Gramm were each first appointed as an executive officer in 2016, and Ms. Slieter and Mr. Kintiroglou were each appointed as executive officers in 2020.
Information about our Executive Officers The executive officers of AdvanSix, listed as follows, are appointed annually by the Board. Ms. Kane and Mr. Gramm were each first appointed as an executive officer in 2016, Ms. Slieter and Mr. Kintiroglou were each appointed as executive officers in 2020, and Mr. Manjeshwar was appointed as an executive officer in 2024.
She served on the Board of Directors of the AIChE from 2019 through 2021. Ms. Kane brings to the Board her extensive leadership experience as well as knowledge of AdvanSix’s business, industry, health, safety and environmental processes, and operations. Michael Preston, 52 Senior Vice President and Chief Financial Officer Prior to joining the Company, Mr.
She served on the Board of Directors of the AIChE from 2019 through 2021. Ms. Kane brings to the Board her extensive leadership experience as well as knowledge of AdvanSix’s business, industry, health, safety and environmental processes, and operations. Siddharth Manjeshwar, 48 Senior Vice President and Chief Financial Officer Prior to joining the Company, Mr.
Approximately 750 employees are covered under collective bargaining agreements that expire between 2024 and 2028. The Company strives to maintain positive and productive relationships with all of its employees, including the unions representing those employees. Oversight and Management Our Board and Board committees provide oversight on various human capital management matters.
Approximately 760 employees are covered under collective bargaining agreements that expire between 2025 and 2029. The Company strives to maintain positive and productive relationships with all of its employees, including the unions representing those employees. Oversight and Management Our Board and Board committees provide oversight on various human capital management matters.
We have also diversified and optimized our ammonium sulfate-based offerings to include a spray-grade adjuvant to support crop protection, as well as other specialty fertilizers and products for industrial use. Sales of ammonium sulfate in 2023 were $441 million and represented 29% of our total sales.
We have also diversified and optimized our ammonium sulfate-based offerings to include a spray-grade adjuvant to support crop protection, as well as other specialty fertilizers and products for industrial use. Sales of ammonium sulfate in 2024 were $458 million and represented 30% of our total sales.
The housing sector had seen an improving trend in recent years, however, residential construction markets have slowed through 2023 reflecting the rise in interest rates. While Nylon 6 has a stronger presence in commercial carpet applications, including hospitality and office, where the material is preferred for its durability and performance characteristics, growth in both residential and commercial markets are challenged.
The housing sector had seen an improving trend in recent years, however, residential construction markets have slowed through 2024 reflecting higher interest rates. While Nylon 6 has a stronger presence in commercial carpet applications, including hospitality and office, where the material is preferred for its durability and performance characteristics, growth in both residential and commercial markets has been subdued.
We have initiated a program to educate growers and retailers on the yield benefit of ammonium sulfate fertilizer on soybeans and to generate on-farm research results that support this crop management practice.
We have been executing a program to educate growers and retailers on the yield benefit of ammonium sulfate fertilizer on soybeans and have generated on-farm research results that support this crop management practice.
Our Board, along with management and cross-functional teams, work closely to evaluate and proactively address human capital management topics such as safety, inclusion and diversity, employee development, employee benefits and employee engagement. 8 Employees As of December 31, 2023, the Company employed approximately 1,450 people. Of this total, approximately 570 are salaried employees and approximately 880 are hourly employees.
Our Board, along with management and cross-functional teams, work closely to evaluate and proactively address human capital management topics such as safety, employee development, employee benefits and employee engagement and inclusion. Employees As of December 31, 2024, the Company employed approximately 1,450 people. Of this total, approximately 560 are salaried employees and approximately 890 are hourly employees.
To achieve that togetherness, we strive to represent the communities in which we operate, celebrate our differences, inspire belonging, and be tenacious in our pursuit of bringing out the best in people both individually and collectively.
We strive to represent the communities in which we operate, celebrate our differences, inspire belonging, and are tenacious in our pursuit of bringing out the best in people both individually and collectively.
Nylon is sold globally as a polymer resin that is drawn into fiber for textiles and carpet and into filament for industrial applications: compounded for engineering plastics largely for automotive end-use; and extruded into film for food and 4 industrial packaging applications.
Industry Overview Nylon Solutions. Nylon is sold globally as a polymer resin that is drawn into fiber for textiles and carpet and into filament for industrial applications: compounded for engineering plastics, including for automotive end-use; and extruded into film for food and industrial packaging applications.
We will continue to evaluate and execute high-return growth and cost savings capital projects. These efforts target improvement in production rate, cost, quality and yield. As an example, we are accelerating profitable growth through our multi-year SUSTAIN (Sustainable U.S. Sulfate To Accelerate Increased Nutrition) program's planned expansion in granular ammonium sulfate production.
Our high-return growth and cost savings capital project pipeline target improvement in production rate, cost, quality and yield. As an example, we are accelerating profitable growth through our multi-year SUSTAIN (Sustainable U.S. Sulfate To Accelerate Increased Nutrition) program's planned expansion in granular ammonium sulfate production.
In addition, we strive to understand the product applications and end-markets into which our products are sold, which helps us upgrade the quality, chemical properties and packaging of our products in ways which enable us to attract price premiums and greater demand. In February 2022, we successfully completed our second acquisition with the U.S.
In addition, we strive to understand the product applications and end markets into which our products are sold, which helps us upgrade the quality, chemical properties and packaging of our products in ways which enable us to attract price premiums and greater demand.
The majority of cyclohexanone we produce is used in our caprolactam manufacturing process with the remainder sold to customers. As a result of the U.S. Amines acquisition during the first quarter of 2022, we also produce and sell alkyl and specialty amines which are used in agrochemical intermediates, water treatment and pharmaceutical applications.
The majority of cyclohexanone we produce is used in our caprolactam manufacturing process with the remainder sold to customers. Through our U.S. Amines sites, we also produce and sell alkyl and specialty amines which are used in agrochemical intermediates, water treatment and pharmaceutical applications.
We produce a high-quality granular grade of ammonium sulfate to meet the growing demand of our customers. We also directly supply packaged ammonium sulfate to customers, primarily in North and South America, and have diversified and optimized our offerings to include spray-grade adjuvants to support crop protection, as well as other specialty fertilizers and products for industrial use. Chemical Intermediates.
We also directly supply packaged ammonium sulfate to customers, primarily in North America, and have diversified and optimized our offerings to include spray-grade adjuvants to support crop protection, as well as other specialty fertilizers and products for industrial use. Chemical Intermediates.
At a national level, AdvanSix participates as a patron level supporter of the American Institute of Chemical Engineers’ ("AIChE") “Doing a World of Good” initiative that actively supports five high priority pillars within the chemical engineering field that align closely with sustainability and ESG principles including equity, diversity and inclusion.
At a national level, AdvanSix continues its participation as a patron level supporter of the American Institute of Chemical Engineers’ ("AIChE") “Doing a World of Good” initiative that actively supports five high priority pillars within the chemical engineering field that align closely with sustainability and environmental, social and governance ("ESG") focus including engagement and inclusion.
We sell our Nylon 6 resin globally, primarily under the Aegis® brand name. In 2023, our Nylon products generated $357 million of sales. In 2023, 2022 and 2021, Nylon sales were 23%, 25% and 25% of our total sales, respectively.
Product Overview Nylon and Caprolactam We manufacture our Nylon 6 resin in our Chesterfield plant. We sell our Nylon 6 resin globally, primarily under the Aegis® brand name. In 2024, our Nylon products generated $349 million of sales. In 2024, 2023 and 2022, Nylon sales were 23%, 23% and 25% of our total sales, respectively.
Our agronomists provide the latest scientific information on the importance of sulfur nutrition for crops and how to optimize the benefits of ammonium sulfate fertilizer to our global customers through a variety of channels including webinars, technical training sessions for retailers and direct grower meetings.
Our agronomists provide the latest scientific information on the importance of sulfur nutrition for crops and how to optimize the benefits of ammonium sulfate fertilizer to our global customers through a variety of channels including webinars, technical training sessions for retailers and direct grower meetings. We also have a strategic focus around placing our various chemistry platforms into high-value applications.
In addition, as a result of recent efforts and enhancements in crystallizer technology and operations, we are now producing a high-quality granular grade ammonium sulfate at greater conversion levels to meet the growing demand of our customers. Strong Capital Stewardship.
In addition, as a result of recent efforts and enhancements in crystallizer technology and operations, we are now producing a high-quality granular grade ammonium sulfate at greater conversion levels to meet the growing demand of our customers. These efforts are being supplemented by our multi-year SUSTAIN (Sustainable U.S.
All our acetone is sold to customers for use in products such as methyl methacrylate, polycarbonate, epoxy resins, ketones and solvents used widely in automotive and construction, as well as agrochemicals.
Any remaining phenol is sold to customers for use in their product applications such as phenolic resins, alkyl phenols and Bisphenol A used for epoxy resins and polycarbonate. All our acetone is sold to customers for use in products such as methyl methacrylate, polycarbonate, epoxy resins, ketones and solvents used widely in automotive and construction, as well as agrochemicals.
During 2023, approximately seven million metric tons of Nylon 6 resin were produced and consumed globally, with China containing approximately 60% of total global Nylon 6 production capacity and Western Europe and North America combined for approximately 15%. Overall utilization of global production capacity was approximately 55% to 65%.
During 2024, approximately seven million metric tons of Nylon 6 resin were produced and consumed globally, with China and the rest of Asia containing approximately 67% of total global Nylon 6 production capacity and Western Europe and North America combined for approximately 14%. Overall utilization of global production capacity was approximately 58%.
Our largest customer is Shaw Industries Group Inc. ("Shaw"), one of the world's largest consumers of caprolactam and Nylon 6 resin. We sell caprolactam and Nylon 6 resin to Shaw under a long-term agreement.
In 2024, the Company's 10 largest customers accounted for approximately 38% of total sales. Our largest customer is Shaw Industries Group Inc. ("Shaw"), one of the world's largest consumers of caprolactam and Nylon 6 resin. We sell caprolactam and Nylon 6 resin to Shaw under a long-term agreement.
We produce caprolactam, the key monomer used in the production of Nylon 6 resin, at our Hopewell plant using phenol produced at our Frankford plant and sulfur and natural gas obtained from third-party suppliers. In 2023, caprolactam generated $298 million of sales. In 2023, 2022 and 2021, caprolactam sales were 19%, 16% and 19% of our total sales, respectively.
We produce caprolactam, the key monomer or building block used in the production of Nylon 6 resin, at our Hopewell plant using phenol produced at our Frankford plant and sulfur and natural gas obtained from third-party suppliers. In 2024, caprolactam generated $276 million of sales.
Enhancing Portfolio Resiliency. Our diverse portfolio serves us well particularly during times of uncertainty. Supplementing our exposure to diverse end-use applications, we have enhanced our sales mix through our differentiated product portfolio, which earn gross margins that are roughly double our average base business margin.
Enhancing Portfolio Resiliency. Our diverse portfolio serves us well particularly during times of uncertainty. Supplementing our exposure to diverse end-use applications, we have enhanced our sales mix through our differentiated product portfolio.
In 2023, 2022 and 2021, ammonium sulfate sales were 29%, 33% and 24% of our total sales, respectively. Chemical Intermediates We manufacture, market and sell chemical intermediates to a range of customers for use in many different types of end-products.
In 2024, 2023 and 2022, Plant Nutrient sales were 30%, 31% and 34% of our total sales, respectively. Chemical Intermediates We manufacture, market and sell chemical intermediates to a range of customers for use in many different types of end-products.
We believe that, as a general matter, our policies, practices and procedures are properly designed to prevent unreasonable risk of environmental impact, and any resulting financial liability. Some risk of environmental impact is, however, inherent in some of our operations and products, as it is with other companies engaged in similar businesses.
We believe that, as a general matter, our policies, practices and procedures are properly designed to prevent unreasonable risk of environmental impact, and any resulting financial liability.
In 2023, chemical intermediates generated $438 million of sales, of which $297 million, or 68%, came from sales of acetone, phenol and cyclohexanone, and $141 million, or 32%, came from sales of our other chemical intermediates. In 2023, 2022 and 2021, sales of chemical intermediates were 29%, 26% and 32% of our total sales, respectively.
In 2024, chemical intermediates generated $435 million of sales, of which $337 million, or 78%, came from sales of acetone, phenol and cyclohexanone, and $97 million, or 22%, came from sales of our other chemical intermediates. In 2024, 2023 and 2022, sales of chemical intermediates were 29%, 26% and 25% of our total sales, respectively.
We also compete with synthetic manufacturers of ammonium sulfate, such as Pasadena Commodities International and Nutrien Ltd.; and stand-alone phenol and acetone producers, such as INEOS Phenol and Altivia. In the U.S. Amines business, the key alkyl amines U.S.-based competitor is Eastman Chemical Company. Product Overview Nylon and Caprolactam We manufacture our Nylon 6 resin in our Chesterfield plant.
For Plant Nutrients, we compete with manufacturers such as Pasadena Commodities International 6 and Nutrien Ltd. For Chemical Intermediates, we compete with stand-alone phenol and acetone producers, such as INEOS Phenol and Altivia, and, with respect to our amines product line, our key alkyl amines U.S.-based competitor is Eastman Chemical Company.
Because of our Hopewell facility’s size, scale and technology design, we are the world’s largest single-site producer of ammonium sulfate fertilizer as of December 31, 2023.
Because of our Hopewell facility’s size, scale and technology design, we are the world’s largest single-site producer of ammonium sulfate fertilizer as of December 31, 2024. We market and sell ammonium sulfate primarily to North American and South American distributors, farm cooperatives and retailers to fertilize crops.
The phenol we produce at our Frankford plant is a key chemical intermediate used in our caprolactam manufacturing process. The majority of the phenol we produce is used in production of caprolactam and other chemical intermediates at Hopewell. Any remaining phenol is sold to customers for use in their product applications such as phenolic resins, epoxies and Bisphenol A.
The phenol we produce at our Frankford plant is a key chemical intermediate used in our caprolactam manufacturing process. The majority of the phenol we produce is used in production of caprolactam and other chemical intermediates at Hopewell.
Chemical intermediates are used as key inputs for a variety of end-market products including construction materials, paints and coatings, packaging and consumer applications. The primary products are acetone, phenol, AMS and cyclohexanone. With the acquisition of U.S.
Chemical intermediates are used as key inputs for a variety of end market products including construction materials, paints and coatings, packaging agrochemical, water treatment, pharmaceutical and consumer applications. The primary products are acetone, phenol, AMS, cyclohexanone and a range of alkyl and specialty amines. Acetone and phenol represent approximately 58% and 10%, respectively, of our chemical intermediates sales.
Ammonium sulfate is used as a fertilizer providing the key nutrients of sulfur and nitrogen for major agricultural crops globally such as corn, wheat, coffee, sugar, cotton and rice. As of December 31, 2023, ammonium sulfate fertilizer accounts for approximately 6% of the global market for nitrogen fertilizer and over 40% of the global market for sulfur fertilizer.
Ammonium sulfate is used as a fertilizer providing the key nutrients of sulfur and nitrogen for major agricultural crops globally such as corn, wheat, coffee, sugar, cotton and rice. Ammonium sulfate fertilizer products are primarily sold in North and South America.
Ammonium Sulfate Ammonium sulfate fertilizer is produced simultaneously with caprolactam as part of our integrated manufacturing process at our Hopewell plant. We manufacture this product in a ratio of approximately four pounds of ammonium sulfate to one pound of caprolactam. Our co-product competitors typically produce approximately two pounds or less of ammonium sulfate for each pound of caprolactam.
In 2024, 2023 and 2022, caprolactam sales were 18%, 20% and 16% of our total sales, respectively. Plant Nutrients Ammonium sulfate fertilizer is produced simultaneously with caprolactam as part of our integrated manufacturing process at our Hopewell plant. We manufacture this product in a ratio of approximately four pounds of ammonium sulfate to one pound of caprolactam.
Our freight and logistics capabilities and terminal locations position us well to serve global markets, including the dock and loading facility at our Hopewell facility which serves ocean-going dry-bulk freight vessels.
Our cost position, business model, and sales and marketing capabilities, however, enable us to compete globally where nylon resin, caprolactam, ammonium sulfate and chemical intermediates are consumed. Our freight and logistics capabilities and terminal locations position us well to serve global markets, including the dock and loading facility at our Hopewell facility which serves ocean-going dry-bulk freight vessels.
Our global reach enables us to arbitrage geographic price variations to ensure we are receiving the highest value for our products. 3 Technical Know-How, Customer Intimacy and Application Development Capabilities. Intimate knowledge of our customers and end-market applications, combined with our technical know-how, enables us to develop differentiated products that are often valued higher by customers compared to commodity products.
Our global reach enables us to arbitrage geographic price variations to ensure we are receiving the highest value for our products. Technical Know-How, Customer Intimacy and Application Development Capabilities.
We are and have been engaged in the handling, manufacture, use and disposal of many substances classified as hazardous by one or more regulatory agencies.
Some risk of environmental impact is, however, inherent in some of our operations and products, as it is with other companies engaged in similar businesses. 8 We are and have been engaged in the handling, manufacture, use and disposal of many substances classified as hazardous by one or more regulatory agencies.
Global prices for ammonium sulfate are influenced by several factors including the price of urea, which is the most widely used source of nitrogen-based fertilizer in the world. Other global factors driving ammonium sulfate fertilizer demand are general agriculture trends, including the price of crops.
As of December 31, 2024, ammonium sulfate fertilizer accounts for approximately 6% of the global market for nitrogen fertilizer and over 40% of the global market for sulfur fertilizer. Global prices for ammonium sulfate are influenced by several factors including the price of urea, which is the most widely used source of nitrogen-based fertilizer in the world.
Our target base capital expenditures are approximately $75 million per year on average between maintenance and health, safety and environmental capital to sustain the business. We have and will continue to flex this level of spend, as needed or required, to address critical enterprise risk mitigation, regulatory compliance and sustainability programs.
From a critical funding perspective, we have our ongoing base maintenance and health, safety and environmental capital expenditures including our enterprise programs to support long-term operational excellence and risk mitigation. We have and will continue to flex this level of spend, as needed or required, to address critical enterprise risk mitigation, regulatory compliance and sustainability programs.
In 2023, approximately 55% of the caprolactam we produced at our facility in Hopewell, Virginia was shipped to our facility in Chesterfield, Virginia where it was polymerized into Aegis® Nylon 6 resins. During 2022, AdvanSix acquired U.S.
In 2024, approximately 59% of the caprolactam we produced at our facility in Hopewell, Virginia was shipped to our facility in Chesterfield, Virginia where it was polymerized into Aegis® Nylon 6 resins. Manufacturing for our U.S. Amines portfolio occurs at our two facilities located in Bucks, Alabama and Portsmouth, Virginia.
Most significant is acetone which is used by our customers in the production of adhesives, paints, coatings, solvents, herbicides and engineered plastic resins. Other intermediate chemicals that we manufacture, market and sell include phenol, alpha-methylstyrene ("AMS"), cyclohexanone, 2-pentanone oxime, cyclohexanol, sulfuric acid, ammonia and carbon dioxide. With the acquisition of U.S. Amines Limited ("U.S.
Most significant is acetone which is used by our customers in the production of solvents, paints, coatings, adhesives, resins and herbicides. Other intermediate chemicals that we manufacture, market and sell include phenol, alpha-methylstyrene ("AMS"), cyclohexanone, oximes, cyclohexanol, and alkyl and specialty amines. Additional end-products for intermediates include automotive components, and water treatment and pharmaceutical intermediates.
SWiM seeks to raise awareness on these matters through programs, events and discussions, including networking, professional development, outreach, volunteering and internal programs highlighting leadership and career paths in multiple disciplines.
Supporting Women in Manufacturing (SWiM), an AdvanSix Employee Resource Group, was formed in 2019 with the goal of promoting women in manufacturing, female leadership and growth in STEM-related fields. SWiM seeks to raise awareness on these matters through programs, events and discussions, including networking, professional development, outreach, volunteering and internal programs highlighting leadership and career paths in multiple disciplines.
Our Research and Development ("R&D") talent consists of scientists and engineers with degrees in polymer and chemical synthesis, catalysis and chemical engineering, who work not only on developing new products for nylon resins but also driving unique offerings for our chemical intermediates and ammonium sulfate customers.
Our technology talent consists of scientists and engineers with degrees in polymer and chemical synthesis, catalysis and chemical engineering, who work on driving unique offerings and developing new products across our diverse portfolio.
Our products are supported by our global logistics capability that we employ to ensure reliable and timely delivery to our customers while maximizing distribution resources and efficiency. Customers Globally, we serve approximately 400 customers in a wide variety of industries located in approximately 50 countries. In 2023, the Company's 10 largest customers accounted for approximately 39% of total sales.
Our products are supported by our global logistics capability that we employ to ensure reliable and timely delivery to our customers while maximizing distribution resources and efficiency. Customers AdvanSix serves around 400 customers annually, primarily in the United States, with global capabilities, spanning a wide variety of industries.
Amines, which has two manufacturing facilities located in Bucks, Alabama and Portsmouth, Virginia. 2 Our integrated manufacturing process, our scale and the quantity and range of our products make us one of the most reliable and efficient manufacturers in our industry.
The below chart shows the end-markets for the Company's products: 2 Our integrated manufacturing process, our scale and the quantity and range of our products make us one of the most reliable and efficient manufacturers in our industry.
AdvanSix also seeks to improve gender equality in the manufacturing industry, starting with supporting science, technology, engineering and math (STEM) education and work in related fields. A group of employees formed Supporting Women in Manufacturing (SWiM), an AdvanSix Employee Resource Group, with the goal of promoting women in manufacturing, female leadership and growth in STEM-related fields.
Our third inclusive leadership cohort kicked off a full year of experiential learning in 2024. AdvanSix also seeks to improve gender equality in the manufacturing industry, starting with supporting science, technology, engineering and math (STEM) education and work in related fields.
Our ammonium sulfate product is positioned with the added value proposition of sulfur nutrition to increase yields of key crops. In addition, due to its nutrient density, the typical ammonium sulfate product delivers pound for pound the most readily available sulfur and nitrogen to crops than other fertilizers.
In addition, due to its nutrient density, the typical ammonium sulfate product delivers pound for pound the most readily available sulfur and nitrogen to crops as compared to other fertilizers. We produce a high-quality granular grade of ammonium sulfate to meet the growing demand of our customers.
We have developed and are executing against a disciplined framework for capital deployment that balances return of cash to shareholders with long-term investment to improve the through-cycle profitability of the business. We are focused on improving our return on invested capital and remain committed to delivering strong and sustainable total shareholder return over the long-term.
We are focused on improving our return on invested capital and remain committed to delivering strong and sustainable total shareholder return over the long-term. Our approach to deploying cash is disciplined with a two-pronged framework of critical funding and discretionary choices to create value.
Each of these product lines represented the following approximate percentage of total sales: Years Ended December 31, 2023 2022 2021 Nylon 23% 25% 25% Caprolactam 19% 16% 19% Ammonium Sulfate 29% 33% 24% Chemical Intermediates 29% 26% 32% 100% 100% 100% 1 The following charts illustrate the distribution of our sales by product line and by region, measured by the destination of each sale, for the year ended December 31, 2023: For information concerning revenues and assets by geographic region, see “Note 3.
The following charts illustrate the distribution of our sales by product line and by region, measured by the destination of each sale, for the year ended December 31, 2024: For information concerning revenues and assets by geographic region, see “Note 3.
Industry operating rates for phenol and acetone production have fallen in 2022 and 2023 as global demand drivers have been reduced and are estimated to be less than 70% both globally and in the U.S. with reduced 5 consumer demand.
Industry operating rates for phenol and acetone production have fallen in recent years and are estimated to be approximately 70% globally and low to mid 60% in the U.S. with reduced consumer demand and significant additional capacity additions in Asia, particularly China.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeChanges in discount rates and actual asset returns different from our anticipated asset returns can result in significant non-cash actuarial gains or losses. With regard to cash pension contributions, funding requirements for our pension plans are largely dependent upon interest rates, actual investment returns on pension assets and the impact of legislative or regulatory changes related to pension funding obligations.
Biggest changeWith regard to cash pension contributions, funding requirements for our pension plans are largely dependent upon interest rates, actual investment returns on pension assets and the impact of legislative or regulatory changes related to pension funding obligations. Our pension contributions may be material and could adversely impact our financial condition, cash flow and 19 results of operations.
Due to concerns related to terrorism, we are subject to various security laws including Maritime Transportation Security Act of 2002 (“MTSA”) regulations. Our Frankford and Hopewell facilities are regulated facilities under MTSA due to the nature of our operations and the proximity of the facilities to adjacent waterways.
Due to concerns related to terrorism, we are subject to various security laws including Maritime Transportation Security Act of 2002 (“MTSA”) regulations. Our Frankford and Hopewell facilities are regulated facilities under MTSA regulations due to the nature of our operations and the proximity of the facilities to adjacent waterways.
In each case, we diligently evaluate our commercial and legal options to defend these investigations and their subsequent sunset reviews and take steps we feel are prudent to protect our interests, including defending our anti-dumping petitions covering imports of acetone and ammonium sulfate with the International Trade Commission (see "Anti-Dumping Duty Petitions - Ammonium Sulfate" under "Recent Developments" in Item 7.
In each case, we diligently evaluate our commercial and legal options to defend these investigations and their subsequent sunset reviews and take steps we feel are prudent to protect our interests, including defending our anti-dumping petitions covering imports of acetone and ammonium sulfate with the International Trade Commission (see "Anti-Dumping Duty Petitions - Acetone" under "Recent Developments" in Item 7.
In this case, each U.S. stockholder who received our common stock in the distribution would generally be treated as having received a distribution in an amount equal to the fair market value of our common stock received, which would generally result in (1) a taxable dividend to the U.S. stockholder to the extent of that U.S. stockholder’s pro rata share of Honeywell’s current and accumulated earnings and profits; (2) a reduction in the U.S. stockholder’s basis (but not below zero) in its Honeywell common stock to the extent the amount received exceeds the stockholder’s share of Honeywell’s earnings and profits; and (3) a taxable gain from the exchange of Honeywell common stock to the extent the amount received exceeds the sum of the U.S. 22 stockholder’s share of Honeywell’s earnings and profits and the U.S. stockholder’s basis in its Honeywell common stock.
In this case, each U.S. stockholder who received our common stock in the distribution would generally be treated as having received a distribution in an amount equal to the fair market value of our common stock received, which would generally result in (1) a taxable dividend to the U.S. stockholder to the extent of that U.S. stockholder’s pro rata share of Honeywell’s current and accumulated earnings and profits; (2) a reduction in the U.S. stockholder’s basis (but not below zero) in its Honeywell common stock to the extent the amount received exceeds the stockholder’s share of Honeywell’s earnings and profits; and (3) a taxable gain from the exchange of Honeywell common stock to the extent the amount received exceeds the sum of the U.S. stockholder’s share of Honeywell’s earnings and profits and the U.S. stockholder’s basis in its Honeywell common stock.
Heightened public focus on climate change, sustainability, and environmental issues has also led to increased government regulation and may cause certain of our key stakeholders to require that we meet certain standards, including customers or suppliers who may impose environmental standards on us as a part of doing business with them, all of which could increase the costs incurred by our customers to use our products and otherwise limit the use of these products, which could lead to decreased demand for these products.
Public focus on climate change, sustainability, and environmental issues has also led to increased government regulation and may cause certain of our key stakeholders to require that we meet certain standards, including customers or suppliers who may impose environmental standards on us as a part of doing business with them, all of which could increase the costs incurred by our customers to use our products and otherwise limit the use of these products, which could lead to decreased demand for these products.
As a result of potential cyclicality, we cannot assure you that pricing or profitability in the future will be comparable to any historical period, including the most recent period shown in our operating results. Structural changes in industry and customer trends for our products could adversely affect our business, financial condition and results of operations.
As a result of potential cyclicality, we cannot assure you that pricing or profitability in the future will be comparable to any historical period, including the most recent period shown in our operating results. Changes in industry and customer trends for our products could adversely affect our business, financial condition and results of operations.
The occurrence of extraordinary events, including future terrorist attacks and the outbreak or escalation of hostilities, cannot be predicted, and their occurrence can be expected to continue to negatively affect the economy in general, and the markets for our products in particular. The resulting damage from an attack on our assets could include loss of life and property damage.
The occurrence of extraordinary events, including future terrorist attacks and the outbreak or escalation of hostilities, cannot be predicted, and their occurrence can be expected to continue to negatively affect the economy in general, and the markets for our products in particular. The resulting damage from an attack on our assets could include loss of life and significant property damage.
Any material changes in key assumptions, including failure to meet business plans, a deterioration in the U.S. and global 19 financial markets, an increase in interest rates, an increase in inflation, or other unanticipated events and circumstances, may decrease the projected cash flows or increase the discount rates and could potentially result in an impairment charge.
Any material changes in key assumptions, including failure to meet business plans, a deterioration in the U.S. and global financial markets, an increase in interest rates, an increase in inflation, or other unanticipated events and circumstances, may decrease the projected cash flows or increase the discount rates and could potentially result in an impairment charge.
If we fail to maintain the effectiveness of our internal controls, including any failure to implement required new or improved controls, or if we experience difficulties in their implementation, our business and operating results could be harmed, we could fail to meet our reporting obligations, and there could be a material adverse effect on our stock price.
If we fail to maintain the effectiveness of our internal controls, including any failure to implement required new or improved controls, or if we 22 experience difficulties in their implementation, our business and operating results could be harmed, we could fail to meet our reporting obligations, and there could be a material adverse effect on our stock price.
Such events involving limited liquidity, defaults, non-performance or other adverse developments that affect financial institutions, transactional counterparties or the financial services industry generally, or concerns about any events of these kinds or other similar risks, have in the past and may in the future lead to market-wide liquidity problems, which could significantly impair our access to funding sources or other credit arrangements in amounts adequate to finance our current and future business operations or could result in less favorable commercial financing terms, including higher interest rates or costs and tighter financial and operating covenants, or limitations on access to credit and liquidity sources, thereby making it more difficult for us to acquire financing on acceptable terms or at all.
Circumstances involving limited liquidity, defaults, non-performance or other adverse developments that affect financial institutions, transactional counterparties or the financial services industry generally, or concerns about any events of these kinds or other similar risks, have in the past and may in the future lead to market-wide liquidity problems, which could significantly impair our access to funding sources or other credit arrangements in amounts adequate to finance our current and future business operations or could result in less favorable commercial financing terms, including higher interest rates or costs and tighter financial and operating covenants, or limitations on access to credit and liquidity sources, thereby making it more difficult for us to acquire financing on acceptable terms or at all.
In addition, we may issue equity to raise capital to finance our ongoing operations or as all or part of the consideration paid for acquisitions and strategic investments that we may make in the future. 23 Certain provisions in our Amended and Restated Certificate of Incorporation and Amended and Restated By-laws and Delaware law may discourage takeovers.
In addition, we may issue equity to raise capital to finance our ongoing operations or as all or part of the consideration paid for acquisitions and strategic investments that we may make in the future. Certain provisions in our Amended and Restated Certificate of Incorporation and Amended and Restated By-laws and Delaware law may discourage takeovers.
A decision by a government agency to deny or delay issuing a new or renewed material permit or approval, or to 21 revoke or substantially modify an existing material permit or approval, could have an adverse effect on our ability to continue operations at the affected facility, or facilities, and on our business, financial condition and results of operations.
A decision by a government agency to deny or delay issuing a new or renewed material permit or approval, or to revoke or substantially modify an existing material permit or approval, could have an adverse effect on our ability to continue operations at the affected facility, or facilities, and on our business, financial condition and results of operations.
These hazards may cause personal injury and loss of life, damage to property and contamination of the environment, which could lead to government fines, work stoppage injunctions, lawsuits by injured persons, damage to our public reputation and brand and diminished product acceptance.
These hazards may cause personal injury and loss of life, damage to property and contamination of the environment, which could lead to government fines, work stoppage injunctions, lawsuits by injured persons, damage to our reputation and brand and diminished product acceptance.
Ultimately, we cannot predict how stable our union relationships will be or whether we will be able to successfully negotiate successor agreements without impacting our financial condition. In addition, the presence of unions may limit our flexibility in dealing with our workforce.
We cannot predict how stable our union relationships will be or whether we will be able to successfully negotiate successor agreements without impacting our financial condition. In addition, the presence of unions may limit our flexibility in dealing with our workforce.
To the extent we have been able to achieve favorable terms in our existing negotiated contracts, we may not be able to renew such contracts at the current terms or at all, and this may adversely impact our 15 results of operations.
To the extent we have been able to achieve favorable terms in our existing negotiated contracts, we may not be able to renew such contracts at the current terms or at all, and this may adversely impact our results of operations.
In addition to changes in regulations, the impact of health, sustainability, and safety concerns could increase the costs incurred by our customers to use our products and otherwise limit the use of these products, which could lead to decreased demand for these products.
In addition to changes 16 in regulations, the impact of health, sustainability, and safety concerns could increase the costs incurred by our customers to use our products and otherwise limit the use of these products, which could lead to decreased demand for these products.
We may not be successful in 17 negotiating the terms of any potential acquisition, conducting thorough due diligence, financing the acquisition or effectively integrating the acquired business, product or technology into our existing business and operations.
We may not be successful in negotiating the terms of any potential acquisition, conducting thorough due diligence, financing the acquisition or effectively integrating the acquired business, product or technology into our existing business and operations.
We seek to maintain appropriate buffer inventory of intermediate chemicals necessary for our manufacturing process, which are intended to mitigate the extent of any delays or disruptions in supply chain logistics. However, our failure to obtain raw materials, ship products or maintain sufficient buffer inventory could materially and adversely impact our business, financial condition and results of operations.
We seek to maintain appropriate buffer inventory of intermediate chemicals necessary for our manufacturing process, which is intended to mitigate the extent of any delays or disruptions in supply chain logistics. However, our failure to obtain raw materials, ship products or maintain sufficient buffer inventory could materially and adversely impact our business, financial condition and results of operations.
Moreover, taking our production facilities offline for regularly scheduled repairs can be an expensive and time-consuming operation with risk that discoverable items and delays during the repair process may cause additional unplanned downtime. Any such unplanned downtime at any of our production facilities may adversely affect our business, financial condition and results of operations.
Moreover, taking our production facilities offline for regularly scheduled repairs can be an expensive and time-consuming operation and carry the risk that discoverable items and delays during the repair process may cause additional unplanned downtime. Any such unplanned downtime at any of our production facilities may adversely affect our business, financial condition and results of operations.
As a result of the scale and quantity and range of our product offerings, as well as the significant level of integration across our manufacturing facilities, we are also exposed to increased risk associated with unplanned downtime or material disruptions at any one of our production facilities, which have occurred in the past and which may occur in the future, and which could impact our supply chain and our manufacturing process.
As a result of the scale and quantity and range of our product offerings, as well as the significant level of integration across our manufacturing facilities, we are exposed to increased risk associated with unplanned downtime or material disruptions at any one of our production facilities, which have occurred in the past and which may occur in the future, and which adversely impact our supply chain and our manufacturing process.
Any of these factors 16 could create pressure on pricing and gross margins and could adversely impact our business.
Any of these factors could create pressure on pricing and gross margins and could adversely impact our business.
Our business, financial condition and results of operations could be adversely affected by difficult global economic conditions and significant volatility in the capital, credit and commodities markets and in the overall economy.
Our business, financial condition and results of operations could be adversely affected by domestic and global economic conditions and significant volatility in the capital, credit and commodities markets and in the overall economy.
An investment in, or acquisition of, complementary businesses, products or technologies in the future could materially decrease the amount of our available cash or require us to seek additional equity or debt financing.
An investment in, or acquisition of, complementary businesses, products or technologies could materially decrease the 17 amount of our available cash or require us to seek additional equity or debt financing.
In 2023, our 10 largest customers accounted for approximately 39% of our total sales across all product lines. Our largest customer is Shaw, one of the world’s largest consumers of Nylon 6 resin and caprolactam. We sell caprolactam and Nylon 6 resin to Shaw under a long-term agreement.
In 2024, our 10 largest customers accounted for approximately 38% of our total sales across all product lines. Our largest customer is Shaw, one of the world’s largest consumers of Nylon 6 resin and caprolactam. We sell caprolactam and Nylon 6 resin to Shaw under a long-term agreement.
There can be no assurance that, in the future, any governmental or international trade body will not institute trade policies or remedies that are adverse to exports from the United States, and we may face additional uncertainty with regard to U.S. government trade policy.
There can be no assurance that, in the future, any governmental or international trade body will not institute trade policies or remedies that are adverse to exports from the United States, and given the recent change in U.S. presidential administration, we may face additional uncertainty with regard to U.S. government trade policy.
For example: • Weak economic conditions, especially in our key value chains and end markets, could reduce demand for our products, impacting our sales and margins; • As a result of volatility in commodity prices, and increased inflation, we may encounter difficulty in achieving sustained market acceptance of past or future price increases; • In addition, in the event of continued high inflationary pressure, we may not be able to adjust our pricing or increase our productivity and reduce our costs sufficient to offset increased costs, which could reduce our margins and profitability; • Market conditions could result in our key customers experiencing financial difficulties and/or electing to limit spending, which in turn could cause decreases in demand for our products, decreased product prices and lower volumes and margins, potentially resulting in decreased sales and earnings; 14 • Under difficult market conditions, there can be no assurance that access to credit or the capital markets would be available to us or sufficient, and as such, we may not be able to successfully obtain additional financing on reasonable terms, or at all; and • Market conditions and credit availability could adversely affect the financial situation of raw material suppliers and their ability to deliver key materials, thus impacting our ability to run our production facilities at the intended rates.
For example: • Weak economic conditions, especially in our key value chains and end markets, could reduce demand for our products, impacting our sales and margins; • As a result of volatility in commodity prices and inflation, we may encounter difficulty in achieving sustained market acceptance of past or future price increases; • In addition, in the event of continued high inflationary pressure, we may not be able to adjust our pricing or increase our productivity and reduce our costs to a level sufficient to offset increased costs, which could reduce our margins and profitability; • Market conditions, including those arising from any new or proposed regulatory, trade or other policy changes of the new U.S. presidential administration could result in our key customers experiencing financial difficulties and/or electing to limit 14 spending, which in turn could cause decreases in demand for our products, decreased product prices and lower volumes and margins, potentially resulting in decreased sales and earnings; • Under difficult market conditions, there can be no assurance that access to credit or the capital markets would be available to us or sufficient, and as such, we may not be able to successfully obtain additional financing on reasonable terms, or at all; and • Market conditions and credit availability could adversely affect the financial situation of raw material suppliers and their ability to deliver key materials, thus impacting our ability to run our production facilities at the intended rates.
Approximately 750 of our employees are covered under collective bargaining agreements that expire between 2024 and 2028, which represents approximately 52% of our employee base as of December 31, 2023. From time to time, we engage in negotiations to renew collective bargaining agreements as those contracts are scheduled to expire.
Approximately 760 of our employees are covered under collective bargaining agreements that expire between 2025 and 2029, which represents approximately 52% of our employee base as of December 31, 2024. From time to time, we engage in negotiations to renew collective bargaining agreements as those contracts are scheduled to expire.
“Management’s Discussion and Analysis of Financial Condition and Results of Operations”). Historically, we have sought to mitigate these risks through geographical mix management so that the imposition of duties does not materially affect our business results, but such duties could have an adverse effect on the sales of our key product lines and affect our business performance in the future.
Historically, we have sought to plan for these risks through geographical mix management so that the imposition of duties does not materially affect our business results, but such duties could have an adverse effect on the sales of our key product lines and affect our business performance in the future.
Business - Regulation and Environmental Matters” for more information on the environmental laws and regulations to which we are subject. 20 Primarily because of past operations at our current manufacturing locations and other locations used in our operations as currently conducted, we may be subject to potentially material liabilities related to the remediation of environmental hazards and to claims of personal injuries or property damages that may have been or may be caused by hazardous substance releases and exposures or other hazardous conditions.
Primarily because of past operations at our current manufacturing locations and other locations used in our operations as currently conducted, we may be subject to potentially material liabilities related to the remediation of environmental hazards and to claims of personal injuries or property damages that may have been or may be caused by hazardous substance releases and exposures or other hazardous conditions.
Risks Relating to Legal and Regulatory Matters Extensive environmental, health and safety laws and regulations applicable to our operations, including initiatives related to discharges into the air and water, hazardous waste, sustainability, global warming and climate change, may result in substantial costs and unanticipated loss or liability, which could adversely affect our business, financial condition and results of operations.
In the event our creditors accelerate the repayment of our borrowings, we may not have sufficient assets to repay such indebtedness, which could adversely affect our business, financial condition and results of operations. 20 Risks Relating to Legal and Regulatory Matters Extensive environmental, health and safety laws and regulations applicable to our operations, including initiatives related to discharges into the air and water, hazardous waste, sustainability, global warming and climate change, may result in substantial costs and unanticipated loss or liability, which could adversely affect our business, financial condition and results of operations.
If we are found to be in violation of these laws or regulations, we may incur substantial costs, including fines, damages, criminal or civil sanctions and remediation costs, or experience interruptions in our operations. See “Item 1.
If we are found to be in violation of these laws or regulations, we may incur substantial costs, including fines, damages, criminal or civil sanctions and remediation costs, or experience interruptions in our operations. See “Item 1. Business - Regulation and Environmental Matters” for more information on the environmental laws and regulations to which we are subject.
Adverse events affecting the health of the economy, including inflation and potential recessionary pressures, rising interest rates, supply chain issues, labor market shortages, trade conflicts including export and import restrictions, tariffs and other trade barriers, the COVID-19 pandemic and any resurgences or other pandemics, the threat of war and geopolitical concerns, including as a result of the conflict between Russia and Ukraine, the conflict in Israel and Gaza and the possible expansion of such conflicts, sovereign debt and economic crises, terrorism and protectionism could have a negative impact on the health of the global economy.
Adverse economic events, including inflation and potential recessionary pressures, interest rate volatility, supply chain issues, labor market shortages, trade conflicts including export and import restrictions, tariffs and other trade barriers, any economic volatility or uncertainty resulting from new or proposed regulatory, trade or other policies of the new U.S. presidential administration, pandemics and any resurgences thereof, the threat of war and geopolitical concerns, including as a result of the conflict between Russia and Ukraine, the conflict in Israel and Gaza, the surrounding region and the possible expansion of such conflicts, sovereign debt and economic crises, domestic or international terrorism, and protectionism could have a negative impact on the health of the global economy.
Our pension contributions may be material and could adversely impact our financial condition, cash flow and results of operations. We made no pension contributions during 2023, but may make pension contributions in future periods to satisfy funding requirements. We may be required to record significant charges from impairment to goodwill, intangibles, and other long-lived assets. We are required under U.S.
We made no pension contributions during 2024, but may make pension contributions in future periods to satisfy funding requirements. We may be required to record significant charges from impairment to goodwill, intangibles, and other long-lived assets. We are required under U.S.
In addition, we may need to seek additional capital in the future, and debt or equity financing may not be available to us on terms we find acceptable, if at all. Certain U.S. and non-U.S. financial institutions experienced crisis in 2023, resulting in disruption in the financial markets.
In addition, we may need to seek additional capital in the future, and debt or equity financing may not be available to us on terms we find acceptable, if at all.
We are impacted by increasing stakeholder interest in performance relative to sustainability and environmental, social and governance (ESG) matters. As a result, we have significantly expanded our reporting and investments associated with ESG matters and have announced goals regarding our sustainability and ESG performance.
As a result, we have expanded our reporting and investments associated with ESG matters and have announced goals regarding our sustainability and ESG performance.
We sponsor a defined benefit pension plan under which certain eligible AdvanSix employees who were employed by Honeywell prior to the spin-off earn pension benefits as if they remained employed by Honeywell. Significant changes in actual investment return on pension assets, discount rates, retirement rates and other factors could require unplanned cash pension contributions in future periods.
We may be required to make significant cash contributions to our defined benefit pension plan. We sponsor a defined benefit pension plan under which certain eligible AdvanSix employees who were employed by Honeywell prior to the spin-off earn pension benefits as if they remained employed by Honeywell.
Our inability to satisfy our supply needs would jeopardize our ability to fulfill obligations under contracts, which could, in turn, result in reduced sales and profits, contract penalties or terminations and damage to customer relationships.
Our inability to satisfy our supply needs would jeopardize our ability to fulfill obligations under contracts, which could, in turn, result in reduced sales and profits, contract penalties or terminations and damage to customer relationships. 15 When possible, we have purchased, and we plan to continue to purchase, raw materials, including cumene, natural gas and sulfur, through negotiated medium- or long-term contracts.
The techniques used to obtain unauthorized access to networks, or to sabotage IT systems, change frequently and generally are not recognized until launched against a target. We may be unable to anticipate these techniques or to implement adequate preventative measures.
The techniques used to obtain unauthorized access to networks, or to sabotage IT systems, change frequently and may become more advanced including through the use of artificial intelligence ("AI"), and are increasingly difficult to detect and prevent, as these attacks are generally not recognized until launched against a target.
Noncompliance with these laws can result in reputational damage, fines and penalties, and enforcement proceedings and litigation, any of which may adversely affect our business, reputation, financial condition and results of operations. We may be required to make significant cash contributions to our defined benefit pension plan.
Noncompliance with these laws can result in reputational damage, fines and penalties, and enforcement proceedings and litigation, any of which may adversely affect our business, reputation, financial condition and results of operations. Recent technological advances in AI come with significant risks related to its use across many industries and end markets, as well as an evolving regulatory landscape.
Removed
When possible, we have purchased, and we plan to continue to purchase, raw materials, including cumene, natural gas and sulfur, through negotiated medium- or long-term contracts.
Added
We may be unable to anticipate these techniques or to implement adequate preventative measures.
Removed
In 2021, we completed the acquisition of certain assets of Commonwealth Industrial Services, Inc., and in February 2022, we completed the acquisition of U.S. Amines, Ltd.
Added
We may be exposed to such risks in cases where we utilize AI in connection with certain business activities now or in the future, in cases where, whether or not known to us, Company personnel use AI for our business or at Company locations, or in cases where our third-party partners, whether or not known to us, use AI in their business activities, which we may not be in a position to control.
Removed
In April 2023, a labor strike was initiated by the Hopewell South bargaining unit, affecting approximately 340 workers at the Company’s manufacturing facility in Hopewell, Virginia, which was later resolved in May 2023 when the bargaining unit voted to ratify a new five-year collective bargaining agreement.
Added
The use of AI by us, our employees or any of our third-party partners may result in unauthorized disclosure of personal data, proprietary information and trade secrets, commercially sensitive or confidential information of the Company, our employees or our partners.
Removed
In the event our creditors accelerate the repayment of our borrowings, we may not have sufficient assets to repay such indebtedness, which could adversely affect our business, financial condition and results of operations.
Added
Such unauthorized disclosures or uses of information can result, among other things, in reputational harm, loss of confidence by our customers or employees, penalties, litigation costs, or legal liability. If we are unable to successfully manage these risks, it may have a material adverse effect on our business, results of operations and financial condition.
Added
Significant changes in actual investment return on pension assets, discount rates, retirement rates and other factors could require unplanned cash pension contributions in future periods. Changes in discount rates and actual asset returns different from our anticipated asset returns can result in significant non-cash actuarial gains or losses.
Added
We may 21 also incur additional expense as a result of domestic and international regulations requiring disclosures regarding GHG emissions and/or broader ESG matters, related performance indicators and other factors. We are impacted by increasing stakeholder interest in performance relative to sustainability and ESG matters.
Added
“Management’s Discussion and Analysis of Financial Condition and Results of Operations”).
Added
In recent years, stockholder activism, including threatened or actual proxy contests, has been directed against numerous public companies.
Added
If a stockholder activist was to take, or threaten to take actions, against the Company, this could cause the Company to incur significant costs as well as the distraction of management, which could have an adverse effect on our business and financial results.
Added
In addition, actions of activist stockholders may cause significant 23 fluctuations in our stock price based on temporary or speculative market perceptions or other factors that do not necessarily reflect the underlying fundamentals and prospects of our business.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

3 edited+2 added−0 removed4 unchanged
Biggest changeThe United States Environmental Protection Agency (“EPA”) and the Company entered into an Administrative Compliance Order on Consent in February 2023 in connection with alleged violations involving the Company’s risk management program at its manufacturing facility in Hopewell, Virginia and is negotiating a second Administrative Compliance Order associated with the same program.
Biggest changeThe EPA and the Company entered into an Administrative Compliance Order on Consent in February 2023 and a second Administrative Compliance Order on Consent in February 2024 in connection with alleged violations involving the Company’s risk management program at its manufacturing facility in Hopewell, Virginia.
Although the outcome of these matters cannot be predicted with certainty, we do not believe that it will have a material adverse effect on our consolidated financial position, results of operations or operating cash flows. Item 4. Mine Safety Disclosures Not applicable. 26 PART II.
Although the outcome of the matter cannot be predicted with certainty, we do not believe that it will have a material adverse effect on our consolidated financial position, results of operations or operating cash flows. Item 4. Mine Safety Disclosures Not applicable. 26 PART II.
The Company is currently implementing an EPA-approved work plan to improve its risk management program at Hopewell in connection with the orders. The Company and EPA also anticipate entering into an Administrative Compliance Order in connection with alleged violations involving the Company’s stormwater and other discharges. These EPA allegations may potentially subject the Company to penalties.
The Company is currently implementing an EPA-approved work plan to improve its risk management program at Hopewell in connection with the orders. The Company and the EPA also entered into an Administrative Compliance Order on Consent in February 2024 connection with alleged violations involving the Company’s stormwater and other discharges. These EPA allegations may potentially subject the Company to penalties.
Added
Although the outcome of these matters cannot be predicted with certainty, we do not believe that it will have a material adverse effect on our consolidated financial position, results of operations or operating cash flows.
Added
Additionally, the Virginia Department of Environmental Quality ("VA DEQ") has initiated discussions regarding certain alleged violations associated with air emissions and water discharges at the Company’s Hopewell facility. The facility is currently assessing and discussing the allegations with the VA DEQ.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

9 edited+1 added−1 removed5 unchanged
Biggest changeThe below table sets forth the repurchases of Company common stock, by month, for the quarter ended December 31, 2023: Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plan Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plan October 2023 111,987 $ 28.97 111,987 $ 73,375,668 November 2023 120,010 26.09 120,010 70,245,038 December 2023 74,530 27.31 74,530 $ 68,209,639 Total 306,527 $ 27.44 306,527 As of December 31, 2023, the Company had repurchased a total of 5,848,475 shares of common stock, including 854,340 shares withheld to cover tax withholding obligations in connection with the vesting of equity awards, for an aggregate of $182.0 million at a weighted average market price of $31.12 per share.
Biggest changePeriod Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plan Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plan October 2024 — $ — — $ 61,957,898 November 2024 — — — 61,957,898 December 2024 — — — $ 61,957,898 Total — $ — — As of December 31, 2024, the Company had repurchased a total of 6,252,129 shares of common stock, including 1,006,673 shares withheld to cover tax withholding obligations in connection with the vesting of equity awards, for an aggregate of $192.4 million at a weighted average market price of $30.78 per share.
The changes for the periods shown in the graph assume that $100 had been invested in AdvanSix stock and each index on December 31, 2018, and that all dividends, if any, were reinvested. The share price performance in the graph is not necessarily indicative of future price performance.
The changes for the periods shown in the graph assume that $100 had been invested in AdvanSix stock and each index on December 31, 2019, and that all dividends, if any, were reinvested. The share price performance in the graph is not necessarily indicative of future price performance.
The Company paid dividends of approximately $16.7 million, $15.1 million and $3.5 million for the years ended December 31, 2023, 2022 and 2021, respectively.
The Company paid dividends of approximately $17.1 million, $16.7 million and $15.1 million for the years ended December 31, 2024, 2023 and 2022, respectively.
Dividends paid during 2023 and announced on the date of this filing are as follows: Date of Announcement Date of Record Date Payable Dividend per Share Total Approximate Dividend Amount ($M) 2/16/2024 3/4/2024 3/18/2024 $0.160 $4.3 11/3/2023 11/14/2023 11/28/2023 $0.160 $4.3 8/4/2023 8/15/2023 8/29/2023 $0.160 $4.4 5/5/2023 5/16/2023 5/30/2023 $0.145 $4.0 2/17/2023 3/3/2023 3/17/2023 $0.145 $4.0 27 The timing, declaration, amount and payment of future dividends to stockholders, if any, will be within the discretion of our Board.
Dividends paid during 2024 and the dividend announced on the date of this filing are as follows: 27 Date of Announcement Date of Record Date Payable Dividend per Share Total Approximate Dividend Amount ($M) 2/21/2025 3/10/2025 3/24/2025 $0.16 $4.3 11/1/2024 11/12/2024 11/26/2024 $0.16 $4.3 8/2/2024 8/13/2024 8/27/2024 $0.16 $4.3 5/3/2024 5/14/2024 5/28/2024 $0.16 $4.3 2/16/2024 3/4/2024 3/18/2024 $0.16 $4.3 The timing, declaration, amount and payment of future dividends to stockholders, if any, will be within the discretion of our Board.
As of February 2, 2024, 26,700,024 shares of our common stock and 0 shares of our preferred stock were outstanding. On May 4, 2018, the Company announced that the Board of Directors (the "Board") authorized a share repurchase program of up to $75 million of the Company’s common stock.
As of January 31, 2025, 26,744,101 shares of our common stock and 0 shares of our preferred stock were outstanding. On May 4, 2018, the Company announced that the Board of Directors (the "Board") authorized a share repurchase program of up to $75 million of the Company’s common stock.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Our common stock is traded on the New York Stock Exchange under the symbol “ASIX.” On February 2, 2024, there were 16,728 holders of record of our common stock and the closing price of our common stock on the New York Stock Exchange was $25.18 per share.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Our common stock is traded on the New York Stock Exchange under the symbol “ASIX.” On January 31, 2025, there were 15,738 holders of record of our common stock and the closing price of our common stock on the New York Stock Exchange was $31.28 per share.
The Company has increased its quarterly dividend by 10% ($0.145 to $0.160) and 16% ($0.125 to $0.145) during the third quarter of 2023 and 2022, respectively.
Dividends The Company commenced the declaration of dividends on September 28, 2021 and has declared and paid dividends on a quarterly basis. The Company increased its quarterly dividend by 10% ($0.145 to $0.160) and 16% ($0.125 to $0.145) during the third quarter of 2023 and 2022, respectively.
COMPARISON OF CUMULATIVE TOTAL RETURN December 31, 2018 December 31, 2019 December 31, 2020 December 31, 2021 December 31, 2022 December 31, 2023 AdvanSix Inc. 100 82 82 195 159 127 S&P Small Cap 600 100 123 137 173 145 169 S&P Small Cap 600 Materials 100 121 148 175 164 197 Item 6. [Reserved]
COMPARISON OF CUMULATIVE TOTAL RETURN December 31, 2019 December 31, 2020 December 31, 2021 December 31, 2022 December 31, 2023 December 31, 2024 AdvanSix Inc. 100 100 237 193 155 151 S&P Small Cap 600 100 111 141 118 137 149 S&P Small Cap 600 Materials 100 123 145 136 164 165 28 Item 6. [Reserved]
The repurchase program has no expiration date and may be modified, suspended or discontinued at any time.
The repurchase program has no expiration date and may be modified, suspended or discontinued at any time. The below table sets forth the repurchases of Company common stock, by month, for the quarter ended December 31, 2024. During the quarter ended December 31, 2024, no additional shares were repurchased for tax withholding obligations or under the currently authorized repurchase program.
Removed
During the period January 1, 2024 through February 2, 2024, the Company repurchased an additional 64,678 shares at a weighted average market price of $26.39 per share under the current authorized repurchase program. Dividends The Company commenced the declaration of dividends on September 28, 2021 and has declared and paid dividends on a quarterly basis.
Added
During the period January 1, 2025 through January 31, 2025, 6,269 additional shares were repurchased for tax withholding obligations in connection with the vesting of equity awards at a weighted average market price of $28.35 and no additional shares were repurchased under the currently authorized repurchase program.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

74 edited+20 added−37 removed66 unchanged
Biggest changeGAAP financial measure: 33 Twelve Months Ended December 31, 2023 2022 2021 Net Income $ 54,623 $ 171,886 $ 139,791 Non-cash stock-based compensation 8,313 10,279 11,299 Non-recurring, unusual or extraordinary income* (4,472) — — Non-cash amortization from acquisitions 2,126 1,815 239 Non-recurring M&A costs — 277 172 Benefit from income taxes relating to reconciling items (661) (1,996) (1,798) Adjusted Net Income (non-GAAP) 59,929 182,261 149,703 Interest expense, net 7,485 2,781 5,023 Income tax expense - Adjusted 15,261 55,901 47,123 Depreciation and amortization - Adjusted 70,884 67,538 65,101 Adjusted EBITDA (non-GAAP) $ 153,559 $ 308,481 $ 266,950 Sales $ 1,533,599 $ 1,945,640 $ 1,684,625 Adjusted EBITDA Margin** (non-GAAP) 10.0% 15.9% 15.8% * Includes a pre-tax gain of approximately $11.4 million related to the Company's exit from the Oben alliance, the unfavorable impact to pre-tax income of approximately $4.5 million associated with a licensee of certain legacy ammonium sulfate fertilizer technology assets closing its facility, and the unfavorable impact to pre-tax income of approximately $2.4 million from the exit of certain low-margin oximes products. **Adjusted EBITDA Margin is defined as Adjusted EBITDA divided by Sales The following is a reconciliation between the non-GAAP financial measures of Adjusted Earnings Per Share to its most directly comparable U.S.
Biggest changeGAAP financial measure: 33 Twelve Months Ended December 31, 2024 2023 2022 Net income $ 44,149 $ 54,623 $ 171,886 Non-cash stock-based compensation 7,854 8,313 10,279 Non-recurring, unusual or extraordinary (income) expense* 1,200 (4,472) — Non-cash amortization from acquisitions 2,126 2,126 1,815 Non-recurring M&A costs — — 277 Income tax benefit relating to reconciling items (2,011) (661) (1,996) Adjusted Net income (loss) (non-GAAP) 53,318 59,929 182,261 Interest expense, net 11,311 7,485 2,781 Income tax expense - Adjusted 3,437 15,261 55,901 Depreciation and amortization - Adjusted 74,050 70,884 67,538 Adjusted EBITDA (non-GAAP) $ 142,116 $ 153,559 $ 308,481 Sales $ 1,517,557 $ 1,533,599 $ 1,945,640 Adjusted EBITDA Margin** (non-GAAP) 9.4% 10.0% 15.9% * 2024 includes a pre-tax loss of approximately $1.2 million from the reduction of the Company's anticipated receivable related to the gain on the termination fee recorded upon the exit from the Oben Holding Group S.A. alliance during the third quarter of 2023.
Our principal source of liquidity is our cash flow generated from operating activities, which is expected to provide us with the ability to meet the majority of 34 our short-term funding requirements for the next twelve months and beyond.
Our 34 principal source of liquidity is our cash flow generated from operating activities, which is expected to provide us with the ability to meet the majority of our short-term funding requirements for the next twelve months and beyond.
On October 27, 2021, the Company completed a refinancing of the Second Amended and Restated Credit Agreement by entering into a new Credit Agreement (the “Credit Agreement”), among the Company, the lenders party thereto, the swing line lenders party thereto, the letter of credit issuers party thereto and Truist Bank, as administrative agent, which provides for a senior secured revolving credit facility in an aggregate principal amount of $500 million (the “Revolving Credit Facility”).
On October 27, 2021, the Company completed a refinancing of the Second Amended and Restated Credit Agreement by entering into a new Credit Agreement (the “Credit Agreement”), among the Company, the lenders party thereto, the swing line lenders party thereto, the letter of credit issuers party thereto and Truist Bank, as administrative agent, which provides for a new senior secured revolving credit facility in an aggregate principal amount of $500 million (the “Revolving Credit Facility”).
We also utilize maintenance excellence and mechanical integrity programs, targeted buffer inventory of intermediate chemicals necessary for our manufacturing process, and co-producer swap arrangements, which are intended to mitigate the extent of any production losses as a result of planned and unplanned downtime; 29 however, the mitigation of all or part of any such production impact cannot be assured.
We also utilize maintenance excellence and mechanical integrity programs, targeted buffer inventory of intermediate chemicals necessary for our manufacturing process, and co-producer swap arrangements, which are intended to mitigate the extent of any production losses as a result of planned and unplanned downtime; however, the mitigation of all or part of any such production impact cannot be assured.
Differences between actual and expected results or changes in the value of defined benefit obligations and fair value of plan assets, if any, are not recognized in earnings as they occur but rather systematically over subsequent periods when net actuarial gains or losses are in excess of 10% of the greater of the fair value of plan assets or the plan’s projected benefit obligation.
Differences between actual and expected results or changes in the value of defined benefit obligations and fair value of plan assets, if any, are not recognized in earnings as they occur but rather systematically 39 over subsequent periods when net actuarial gains or losses are in excess of 10% of the greater of the fair value of plan assets or the plan’s projected benefit obligation.
A valuation allowance is provided when it is more likely than not that a portion or all 40 of a deferred tax asset will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income and the reversal of deferred tax liabilities during the period in which related temporary differences become deductible.
A valuation allowance is provided when it is more likely than not that a portion or all of a deferred tax asset will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income and the reversal of deferred tax liabilities during the period in which related temporary differences become deductible.
We assumed from Honeywell all HSE liabilities and compliance obligations related to the past and future operations of our current business as of the spin-off, as well as all HSE liabilities associated with our three current manufacturing locations assumed from Honeywell that are used in our current operations, including any cleanup or other liabilities related to any contamination that may have occurred at such locations in the past.
("Honeywell") all HSE liabilities and compliance obligations related to the past and future operations of our current business as of the spin-off, as well as all HSE liabilities associated with three manufacturing locations assumed from Honeywell that are used in our current operations, including any cleanup or other liabilities related to any contamination that may have occurred at such locations in the past.
Management believes that the application of these 38 policies on a consistent basis enables the Company to provide the users of the financial statements with useful and reliable information about the Company’s operating results and financial condition. The preparation of our Consolidated Financial Statements in conformity with U.S.
Management believes that the application of these policies on a consistent basis enables the Company to provide the users of the financial statements with useful and reliable information about the Company’s operating results and financial condition. The preparation of our Consolidated Financial Statements in conformity with U.S.
At December 31, 2023, 2022 and 2021, the Company did not have any off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K or financing activities with special-purpose entities. The Company has not guaranteed any debt or commitments of other entities or entered into any options on non-financial assets.
At December 31, 2024, 2023 and 2022, the Company did not have any off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K or financing activities with special-purpose entities. The Company has not guaranteed any debt or commitments of other entities or entered into any options on non-financial assets.
The Company also utilizes the practical expedient in Topic 606 and does not include an adjustment for the effects of a significant financing component given the expected period duration of one year or less. Stock-Based Compensation Plans – The principal awards issued under our stock-based compensation plans, which are described in "Note 16.
The Company also utilizes the practical expedient in Topic 606 and does not include an adjustment for the effects of a significant financing component given the expected period duration of one year or less. Stock-Based Compensation Plans – The principal awards issued under our stock-based compensation plans, which are described in "Note 14.
As of December 31, 2023 and 2022, no liability for unrecognized tax benefits was required to be reported. We do not expect any significant changes in our unrecognized tax benefits in the next year. Use of Estimates – The preparation of the Consolidated Financial Statements in conformity with U.S.
As of December 31, 2024 and 2023, no liability for unrecognized tax benefits was required to be reported. We do not expect any significant changes in our unrecognized tax benefits in the next year. Use of Estimates – The preparation of the Consolidated Financial Statements in conformity with U.S.
Interest costs and related penalties related to unrecognized tax benefits are required to be calculated, if applicable. Our policy is to classify tax related interest and penalties, if any, as a component of income tax expense. No interest or penalties related to unrecognized income tax benefits were recorded during the years ended December 31, 2023, 2022 and 2021.
Interest costs and related penalties related to unrecognized tax benefits are required to be calculated, if applicable. Our policy is to classify tax related interest and penalties, if any, as a component of income tax expense. No interest or penalties related to unrecognized income tax benefits were recorded during the years ended December 31, 2024, 2023 and 2022.
As of December 31, 2023 and 2022, there were no unrecognized tax benefits recorded by the Company. Although there are no unrecognized income tax benefits, when applicable, the Company’s policy is to report interest expense and penalties related to unrecognized income tax benefits in the income tax provision.
As of December 31, 2024 and 2023, there were no unrecognized tax benefits recorded by the Company. Although there are no unrecognized income tax benefits, when applicable, the Company’s policy is to report interest expense and penalties related to unrecognized income tax benefits in the income tax provision.
In January 2024, as previously announced, the Company experienced a process-based operational disruption at its Frankford, Pennsylvania manufacturing site temporarily reducing phenol and acetone production at the facility, as well as production at its Hopewell and Chesterfield, Virginia facilities.
In January 2024, the Company experienced a process-based operational disruption at its Frankford, Pennsylvania manufacturing site temporarily reducing phenol and acetone production at the facility, as well as production at its Hopewell and Chesterfield, Virginia facilities.
The Company made no cash contributions to the defined benefit pension plan during the year ended December 31, 2023. Additional contributions may be made in future years sufficient to satisfy pension funding requirements in those periods.
The Company made no cash contributions to the defined benefit pension plan during the year ended December 31, 2024. Additional contributions may be made in future years sufficient to satisfy pension funding requirements in those periods.
This section of this Form 10-K generally discusses our financial condition and results of operations as of and for the years ended December 31, 2023 and 2022 and year-to-year comparisons between 2023 and 2022.
This section of this Form 10-K generally discusses our financial condition and results of operations as of and for the years ended December 31, 2024 and 2023 and year-to-year comparisons between 2024 and 2023.
Commitments and Contingencies", respectively, to the Consolidated Financial Statements in Item 8 of this Form 10-K. Interest payments are estimated based on the interest rate applicable as of December 31, 2023 and approximate $9.7 million per year, subject to changes in variable interest rates and additional obligations.
Commitments and Contingencies", respectively, to the Consolidated Financial Statements in Item 8 of this Form 10-K. Interest payments are estimated based on the interest rate applicable as of December 31, 2024 and approximate $10.9 million per year, subject to changes in variable interest rates and additional obligations.
The Company had approximately $1 million of letter of credit agreements outstanding under the Revolving Credit Facility at December 31, 2023. There was no amount associated with bilateral letters of credit outside the Revolving Credit Facility.
The Company had approximately $1 million of letter of credit agreements outstanding under the Revolving Credit Facility at December 31, 2024. There was no amount associated with bilateral letters of credit outside the Revolving Credit Facility.
We expect that our primary cash requirements for 2024 will be to fund costs associated with ongoing operations, capital expenditures and amounts related to contractual obligations. See below under “Capital Expenditures” for more information regarding our capital expenditures in 2023, 2022 and 2021 and anticipated capital expenditures for 2024.
We expect that our primary cash requirements for 2025 will be to fund costs associated with ongoing operations, capital expenditures and amounts related to other contractual obligations. See below under “Capital Expenditures” for more information regarding our capital expenditures in 2024, 2023 and 2022 and anticipated capital expenditures for 2025.
The Company's Board of Directors (the "Board") has authorized share repurchase programs to repurchase shares of the Company's common stock as follows: 35 Date of Authorization Authorized Amount (millions) Authorized Amount Remaining as of December 31, 2023 (millions) May 4, 2018 $ 75.0 $ — February 22, 2019 75.0 — February 17, 2023 75.0 68.2 Totals $ 225.0 $ 68.2 Repurchases may be made from time to time on the open market in accordance with Rule 10b-18 of the Exchange Act, including through the use of trading plans intended to qualify under Rule 10b5-1 of the Exchange Act.
The Board has authorized share repurchase programs to repurchase shares of the Company's common stock as follows: 35 Date of Authorization Authorized Amount (millions) Authorized Amount Remaining as of December 31, 2024 (millions) May 4, 2018 $ 75.0 $ — February 22, 2019 75.0 — February 17, 2023 75.0 62.0 Totals $ 225.0 $ 62.0 Repurchases may be made from time to time on the open market in accordance with Rule 10b-18 of the Exchange Act, including through the use of trading plans intended to qualify under Rule 10b5-1 of the Exchange Act.
This amount is related to what has been accrued as probable and reasonably estimable as of December 31, 2023. For information regarding material cash requirements from known contractual obligations with respect to lease obligations, long-term debt principal repayments and purchase obligations please refer to "Note 8. Leases", "Note 9. Long-term Debt and Credit Agreement" and "Note 13.
This amount is related to what has been accrued as probable and reasonably estimable as of December 31, 2024. For information regarding material cash requirements from known contractual obligations with respect to lease obligations, long-term debt principal repayments and purchase obligations please refer to "Note 8. Leases", "Note 9. Long-term Debt and Credit Agreement" and "Note 11.
Increases to the effective income tax rate, due primarily to state taxes and executive compensation limitations, were materially offset by research tax credits, excess tax benefits of equity compensation and the foreign-derived intangible income deduction. The Company's effective income tax rate for 2022 and 2021 was higher compared to the U.S.
Federal statutory rate of 21%. Increases to the effective income tax rate, due primarily to state taxes and executive compensation limitations, were materially offset by research tax credits, excess tax benefits of equity compensation and the foreign-derived intangible income deduction. The Company's effective income tax rate for 2022 was higher compared to the U.S.
Amounts related to contractual obligations are related to principal repayments and interest payments on leases, long-term debt, purchase obligations, estimated environmental compliance costs, and postretirement benefit obligations. We anticipate that our estimated environmental compliance costs will be approximately $1.7 million in aggregate for 2024 through 2028.
Amounts related to contractual obligations are related to principal repayments and interest payments on leases, long-term debt, purchase obligations, estimated environmental compliance costs, and postretirement benefit obligations. We anticipate that our estimated environmental compliance costs will be approximately $1.7 million in aggregate for 2025 through 2029.
We were in compliance with all of our covenants at December 31, 2023 and through the date of the filing of this Annual Report on Form 10-K. We had a borrowed balance of $115 million under the Revolving Credit Facility at December 31, 2022.
We were in compliance with all of our covenants at December 31, 2024 and through the date of the filing of this Annual Report on Form 10-K. We had a borrowed balance of $170 million under the Revolving Credit Facility at December 31, 2023.
On a recurring basis, our primary future cash needs will be centered on operating activities, working capital, capital expenditures, dividends and liquidity reflecting disciplined capital deployment. Capital expenditures are deployed for various ongoing investments and initiatives to improve reliability, yield and quality, expand production capacity, as well as comply with HSE regulations.
On a recurring basis, our primary future cash needs will be centered on operating activities, working capital, capital expenditures, dividends and liquidity reflecting disciplined capital deployment. Capital expenditures are deployed for various ongoing investments and initiatives to improve reliability, yield and quality, expand production capacity and comply with health, safety and environmental ("HSE") regulations.
Discussions of our financial condition and results of operations as of and for the year ended December 31, 2021 and year-to-year comparisons between 28 2022 and 2021 that are not included in this Form 10-K can be found under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022, filed with the SEC on February 18, 2022.
Discussions of our financial condition and results of operations as of and for the year ended December 31, 2022 and year-to-year comparisons between 2023 and 2022 that are not included in this Form 10-K can be found under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023, filed with the SEC on February 16, 2024.
At December 31, 2023, the Company had approximately $30 million of cash on hand with approximately $329 million of additional capacity available under the revolving credit facility. The Company’s Consolidated Leverage Ratio financial covenant of its credit facility allows it to net up to $75 million of cash with debt.
At December 31, 2024, the Company had approximately $20 million of cash on hand with approximately $304 million of additional capacity available under the revolving credit facility. The Company’s Consolidated Leverage Ratio financial covenant of its credit facility allows it to net up to $75 million of cash with debt.
Sulfate To Accelerate Increased Nutrition) program. Critical Accounting Policies and Estimates (Dollars in thousands, unless otherwise noted) The Company’s significant accounting policies are more fully described in "Note 2. Summary of Significant Accounting Policies" to the Consolidated Financial Statements included in Item 8 of this Form 10-K.
Sulfate To Accelerate Increased Nutrition) program, and refined execution timing to address critical enterprise risk mitigation. Critical Accounting Policies and Estimates (Dollars in thousands, unless otherwise noted) The Company’s significant accounting policies are more fully described in "Note 2. Summary of Significant Accounting Policies" to the Consolidated Financial Statements included in Item 8 of this Form 10-K.
We borrowed an incremental net amount of $55 million during 2023 bringing the balance under the Revolving Credit Facility to $170 million, and available credit for use of $329 million as of December 31, 2023. We expect that Cash provided by operating activities will fund future interest payments on the Company's outstanding indebtedness.
We borrowed an incremental net amount of $25 million during 2024 bringing the balance under the Revolving Credit Facility to $195 million, and available credit for use of $304 million as of December 31, 2024. We expect that Cash provided by operating activities will fund future interest payments on the Company's outstanding indebtedness.
Dividends The Company commenced the declaration of dividends on September 28, 2021 and has since declared and paid a dividend on a quarterly basis. The Company increased its quarterly dividend by 10% ($0.145 to $0.160) and 16% ($0.125 to $0.145) during the third quarter of 2023 and 2022, respectively.
Dividends The Company commenced the declaration of dividends on September 28, 2021. The Company increased its quarterly dividend by 10% ($0.145 to $0.160) and 16% ($0.125 to $0.145) during the third quarter of 2023 and 2022, respectively.
A 25 basis point increase in the discount rate would result in a decrease of approximately $0.1 million to the net periodic benefit cost for 2024, while a 25 basis point decrease in the discount rate would result in an increase of approximately $0.1 million to the net periodic benefit cost for 2024.
A 25 basis point increase in the discount rate would result in a decrease of approximately $0.4 million to the net periodic benefit cost for 2025, while a 25 basis point decrease in the discount rate would result in an increase of approximately $0.5 million to the net periodic benefit cost for 2025.
The Company made cash contributions to the defined contribution plan of $6.0 million and $5.9 million for the years ended December 31, 2023 and 2022, respectively.
The Company made cash contributions to the defined contribution plan of $6.8 million and $6.0 million for the years ended December 31, 2024 and 2023, respectively.
The impact of any excise tax imposed on the Company for share repurchases is generally accounted for as an equity transaction with no consequences to the Company's results of operations, and this provision of the law does not currently have a material impact on the Company's financial condition.
The impact of any excise tax imposed on the Company for share repurchases is generally accounted for as an equity transaction with no consequences to the Company's results of operations, and this provision of the law has an immaterial impact on the Company's financial condition.
The Company paid dividends of approximately $16.7 million, $15.1 million and $3.5 million for the years ended December 31, 2023, 2022 and 2021, respectively.
The Company paid dividends of approximately $17.1 million, $16.7 million and $15.1 million for the years ended December 31, 2024, 2023 and 2022, respectively.
The Revolving Credit Facility has a scheduled maturity date of October 27, 2026. The Credit Agreement permits the Company to utilize up to $40 million of the Revolving Credit Facility for the issuance of letters of credit and up to $40 million for swing line loans.
Borrowings under the Revolving Credit Facility are subject to customary borrowing conditions. The Revolving Credit Facility has a scheduled maturity date of October 27, 2026. The Credit Agreement permits the Company to utilize up to $40 million of the Revolving Credit Facility for the issuance of letters of credit and up to $40 million for swing line loans.
GAAP financial measure: Twelve Months Ended December 31, 2023 2022 2021 Numerator Net Income $ 54,623 $ 171,886 $ 139,791 Adjusted Net Income (non-GAAP) 59,929 182,261 149,703 Denominator Weighted-average number of common shares outstanding - basic 27,302,254 27,969,436 28,152,876 Dilutive effect of equity awards and other stock-based holdings 705,376 1,061,671 892,310 Weighted-average number of common shares outstanding - diluted 28,007,630 29,031,107 29,045,186 EPS - Basic $ 2.00 $ 6.15 $ 4.97 EPS - Diluted $ 1.95 $ 5.92 $ 4.81 Adjusted EPS - Basic (non-GAAP) $ 2.20 $ 6.52 $ 5.32 Adjusted EPS - Diluted (non-GAAP) $ 2.14 $ 6.28 $ 5.15 Liquidity and Capital Resources Liquidity We believe that cash balances and operating cash flows, together with available capacity under our credit agreement, will provide adequate funds to support our current short-term operating objectives as well as our longer-term strategic plans, subject to the risks and uncertainties outlined below and in the risk factors previously disclosed in in Item 1A, Risk Factors.
GAAP financial measure: Twelve Months Ended December 31, 2024 2023 2022 Numerator Net income $ 44,149 $ 54,623 $ 171,886 Adjusted Net income (non-GAAP) 53,318 59,929 182,261 Denominator Weighted-average number of common shares outstanding - basic 26,828,338 27,302,254 27,969,436 Dilutive effect of equity awards and other stock-based holdings 426,875 705,376 1,061,671 Weighted-average number of common shares outstanding - diluted 27,255,213 28,007,630 29,031,107 EPS - Basic $ 1.65 $ 2.00 $ 6.15 EPS - Diluted $ 1.62 $ 1.95 $ 5.92 Adjusted EPS - Basic (non-GAAP) $ 1.99 $ 2.20 $ 6.52 Adjusted EPS - Diluted (non-GAAP) $ 1.96 $ 2.14 $ 6.28 Liquidity and Capital Resources Liquidity We believe that cash balances and operating cash flows, together with available capacity under our credit agreement, as utilized during 2024, will provide adequate funds to support our current short-term operating objectives as well as our longer-term strategic plans, subject to the risks and uncertainties outlined below and in the risk factors previously disclosed in in Item 1A, Risk Factors.
These net borrowings were partially offset by payments for share repurchases of $46.2 million and cash paid for dividends of approximately $16.7 million during the year ended December 31, 2023 compared to $33.7 million and $15.1 million during the prior year period, respectively.
These net borrowings were partially offset by payments for share repurchases of $10.4 million and cash paid for dividends of approximately $17.1 million during the year ended December 31, 2024 compared to $46.2 million and $16.7 million during the prior year periods, respectively.
As a result of a delayed ramp to planned utilization rates, the Company is now anticipating a total unfavorable impact to pre-tax income in the first quarter 2024 of $23 to $27 million, comprised of the impact of lost sales and other additional costs including purchases of replacement product and incremental plant spend.
As a result of a delayed ramp to targeted utilization rates, the Company recognized an unfavorable impact to pre-tax income in the first quarter 2024 of approximately $27 million, comprised of the impact of lost sales and other additional costs including purchases of replacement product and incremental plant spend.
The resulting impact on the pension benefit obligation would be a decrease of $2.9 million and an increase of $3.1 million, respectively.
The resulting impact on the pension benefit obligation would be a decrease of $2.5 million and an increase of $2.6 million, respectively.
Cash used for financing activities decreased by $60.6 million for the year ended December 31, 2023 versus the prior year due to net borrowings on the credit facility of $55.0 million for the year ended December 31, 2023 compared to net payments of $20.0 million during the prior year.
Cash used for financing activities decreased by $5.2 million for the year ended December 31, 2024 versus the prior year due to net borrowings on the credit facility of $25.0 million for the year ended December 31, 2024 compared to net payments of $55.0 million during the prior year.
Dividends paid during 2023 and announced on the date of this filing are as follows: Date of Announcement Date of Record Date Payable Dividend per Share Total Approximate Dividend Amount ($M) 2/16/2024 3/4/2024 3/18/2024 $0.160 $4.3 11/3/2023 11/14/2023 11/28/2023 $0.160 $4.3 8/4/2023 8/15/2023 8/29/2023 $0.160 $4.4 5/5/2023 5/16/2023 5/30/2023 $0.145 $4.0 2/17/2023 3/3/2023 3/17/2023 $0.145 $4.0 The timing, declaration, amount and payment of future dividends to stockholders, if any, will be within the discretion of our Board.
Dividends paid during 2024 and the dividend announced on the date of this filing are as follows: Date of Announcement Date of Record Date Payable Dividend per Share Total Approximate Dividend Amount ($M) 2/21/2025 3/10/2025 3/24/2025 $0.16 $4.3 11/1/2024 11/12/2024 11/26/2024 $0.160 $4.3 8/2/2024 8/13/2024 8/27/2024 $0.160 $4.3 5/3/2024 5/14/2024 5/28/2024 $0.160 $4.3 2/16/2024 3/4/2024 3/18/2024 $0.160 $4.3 The timing, declaration, amount and payment of future dividends to stockholders, if any, will be within the discretion of our Board.
Credit Agreement On September 30, 2016, the Company as the borrower, entered into a Credit Agreement with Bank of America, as administrative agent (the "Original Credit Agreement"), which was amended on February 21, 2018 pursuant to Amendment No. 1 to the Original 36 Credit Agreement (the "First Amended and Restated Credit Agreement"), and further amended on February 19, 2020 pursuant to, Amendment No. 2 to the First Amended and Restated Credit Agreement (after giving effect to the Second Amendment, the “Second Amended and Restated Credit Agreement”).
Credit Agreement On September 30, 2016, the Company as the borrower, entered into a Credit Agreement with Bank of America, as administrative agent (the "Original Credit Agreement"), which was amended on February 21, 2018 (the "First Amended and Restated Credit 36 Agreement"), and further amended on February 19, 2020 (the "Second Amended and Restated Credit Agreement").
Net Income 2023 2022 2021 Net income $ 54,623 $ 171,886 $ 139,791 2023 compared with 2022 As a result of the factors described above, net income was $54.6 million in 2023 as compared to $171.9 million in 2022.
Net Income 2024 2023 2022 Net income $ 44,149 $ 54,623 $ 171,886 2024 compared with 2023 As a result of the factors described above, net income was $44.1 million in 2024 as compared to $54.6 million in 2023.
Inventories valued at LIFO amounted to $195.6 million and $202.9 million at December 31, 2023 and 2022, respectively. Had such LIFO inventories been valued at current costs, their carrying values would have been approximately $95.2 million and $64.8 million higher at December 31, 2023 and 2022.
Had such LIFO inventories been valued at current costs, their carrying values would have been approximately $64.1 million and $95.2 million higher at December 31, 2024 and 2023. Inventories valued at FIFO amounted to $15.9 million and $16.2 million at December 31, 2024 and 2023, respectively.
Capital expenditures are deployed for various ongoing investments and initiatives to improve reliability, yield and quality, expand production capacity and comply with HSE regulations. For 2024, we expect our total capital expenditures to be approximately $140 million to $150 million reflecting increased spend to address critical enterprise risk mitigation and growth projects including our SUSTAIN (Sustainable U.S.
Capital expenditures are deployed for various ongoing investments and initiatives to improve reliability, yield and quality, expand production capacity and comply with HSE regulations. For 2025, we expect our total capital expenditures to be approximately $140 million to $160 million reflecting the planned progression of growth projects including our SUSTAIN (Sustainable U.S.
The following table summarizes ongoing and expansion capital expenditures for the periods indicated. Years Ended December 31, 2023 2022 2021 (Dollars in thousands) Purchases of property, plant and equipment $ 107,377 $ 89,449 $ 56,811 Capital expenditures increased $17.9 million from 2022 to 2023 reflecting increased spend due to replacement maintenance, growth and cost savings projects, and enterprise programs.
The following table summarizes ongoing and expansion capital expenditures for the periods indicated. Years Ended December 31, 2024 2023 2022 (Dollars in thousands) Purchases of property, plant and equipment $ 133,722 $ 107,377 $ 89,449 Capital expenditures increased $26.3 million from 2023 to 2024 reflecting planned increased spend on replacement maintenance and enterprise programs.
The Credit Agreement also contains financial covenants that require the Company to maintain a Consolidated Interest Coverage Ratio (as defined in the Credit Agreement) of not less than 3.00 to 1.00 and to maintain a Consolidated Leverage Ratio of (i) 4.00 to 1.00 or less for the fiscal quarter ended December 31, 2021, through and including the fiscal quarter ending September 30, 2023 and (ii) 3.75 to 1.00 or less for each fiscal quarter thereafter (subject to the Company’s option to elect a consolidated leverage ratio increase in connection with certain acquisitions).
The Credit Agreement also contains financial covenants that require the Company to maintain a Consolidated Interest Coverage Ratio (as defined in the Credit Agreement) of not less than 3.00 to 1.00 and to maintain a Consolidated Leverage Ratio of 3.75 to 1.00 or less (subject to the Company’s option to elect a consolidated leverage ratio increase in connection with certain acquisitions).
Cash Flow Summary for the Years Ended December 31, 2023, 2022 and 2021 Our cash flows from operating, investing and financing activities for the years ended December 31, 2023, 2022 and 2021, as reflected in the audited Consolidated Financial Statements included in this Form 10-K, are summarized as follows: 37 Years Ended December 31, 2023 2022 2021 (Dollars in thousands) Cash provided by (used for): Operating activities $ 117,550 $ 273,601 $ 218,849 Investing activities (110,897) (189,273) (67,562) Financing activities (7,870) (68,443) (146,793) Net change in cash and cash equivalents $ (1,217) $ 15,885 $ 4,494 2023 compared with 2022 Net cash provided by operating activities decreased by $156.1 million for the year ended December 31, 2023 versus the prior year due primarily to (i) a $117.3 million decrease in net income and (ii) a $63.1 million unfavorable impact from working capital (comprised of Accounts and other receivables, Inventories, Accounts payable and Deferred income and customer advances) year-over-year, with a $14.7 million unfavorable cash impact for the year ended December 31, 2023 compared to a $48.3 million favorable cash impact in the prior year period due primarily to the timing of payments, the unfavorable impact of customer advances and favorable inventory fluctuation, and (iii) a $25.6 million unfavorable impact from Deferred income taxes.
Cash Flow Summary for the Years Ended December 31, 2024, 2023 and 2022 Our cash flows from operating, investing and financing activities for the years ended December 31, 2024, 2023 and 2022, as reflected in the audited Consolidated Financial Statements included in this Form 10-K, are summarized as follows: Years Ended December 31, 2024 2023 2022 (Dollars in thousands) Cash provided by (used for): Operating activities $ 135,413 $ 117,550 $ 273,601 Investing activities (142,902) (110,897) (189,273) Financing activities (2,715) (7,870) (68,443) Net change in cash and cash equivalents $ (10,204) $ (1,217) $ 15,885 37 2024 compared with 2023 Net cash provided by operating activities increased by $17.9 million for the year ended December 31, 2024 versus the prior year due primarily to (i) a $23.8 million favorable impact from working capital (comprised of Accounts and other receivables, Inventories, Accounts payable and Deferred income and customer advances) year-over-year, with a $9.1 million favorable cash impact for the year ended December 31, 2024 compared to a $14.7 million unfavorable cash impact in the prior year period due primarily to the timing of payments and the favorable impact of customer advances, (ii) a $10.7 million favorable cash impact from Other assets and liabilities driven primarily by a change from net a pension liability to a net pension asset and an increase in prepaid expenses versus the prior year and (iii) an $8.0 million favorable cash impact from Accrued liabilities due to timing of payments.
Management believes that the following represent some of the more critical judgment areas in the applications of the Company’s accounting policies which could have a material effect on the Company’s financial position, results of operations or cash flows.
Management believes that the following represent some of the more critical judgment areas in the applications of the Company’s accounting policies which could have a material effect on the Company’s financial position, results of operations or cash flows. 38 Inventories – Substantially all of the Company's inventories are valued at the lower of cost or market using the last-in, first-out (“LIFO”) method.
As of December 31, 2023, the Company had repurchased 5,848,475 shares of common stock, including 854,340 shares withheld to cover tax withholding obligations in connection with the vesting of equity awards, for an aggregate of $182.0 million at a weighted average market price of $31.12 per share.
As of December 31, 2024, the Company had repurchased 6,252,129 shares of common stock, including 1,006,673 shares withheld to cover tax withholding obligations in connection with the vesting of equity awards, for an aggregate of $192.4 million at a weighted average market price of $30.78 per share.
The IRA also includes significant extensions, expansions and enhancements related to climate and energy tax credits designed to encourage 32 investment in the adoption and expansion of renewable and alternative energy sources. The Company continues to evaluate these energy credit provisions of the law in relation to our sustainability and environmental, social and governance initiatives.
The IRA also includes significant extensions, expansions and enhancements related to climate and energy tax credits designed to encourage investment in the adoption and expansion of renewable and alternative energy sources.
Adjusted EBITDA Margin is equal to Adjusted EBITDA divided by Sales. The following tables may also present each of these measures as further adjusted.
The following tables may also present each of these measures as further adjusted.
Potential impairment is identified by comparing the fair value of a reporting unit to the carrying value, including goodwill. The Company completed its annual goodwill impairment test as of March 31, 2023 and, based on the results of the Company's assessment of qualitative factors, it was determined that it was not necessary to perform the quantitative goodwill impairment test.
The Company completed its annual goodwill impairment test as of October 26, 2024 and, based on the results of the Company's assessment of qualitative factors, it was determined that it was not necessary to perform the quantitative goodwill impairment test.
These net unfavorable impacts were partially offset by (i) a $20.5 million favorable cash impact from Other assets and liabilities driven primarily by a reduction in the net pension liability due to contributions to the defined benefit pension plan in the prior year, and (ii) the favorable cash impact of $17.7 million and $17.2 million from Taxes payable and Taxes receivable, respectively, driven by the timing of income tax payments.
These net favorable impacts were partially offset by (i) the unfavorable cash impact of $15.0 million and $7.4 million from Taxes payable and Taxes receivable, respectively, driven by the timing of income tax payments and (ii) a $10.5 million decrease in net income.
While various macroeconomic conditions have created and could continue to create volatility in funding markets, we believe that our future cash from operations, together with cash on hand and our access to credit and capital markets, will provide adequate resources to fund our expected operating and financing needs and obligations.
We believe that our future cash from operations, cash on hand and available capacity under our credit agreement, as well as our access to credit and capital markets, will provide adequate resources to fund our expected operating and financing needs and obligations.
We seek to run our production facilities on a nearly continuous basis for maximum efficiency as several of our intermediate products are key feedstock materials for other products in our integrated manufacturing chain.
Amines portfolio as well as our oximes-based EZ-Blox™ anti-skinning agent used in paints and Nadone® cyclohexanone, which is a solvent used in various high-value applications. 29 We seek to run our production facilities on a nearly continuous basis for maximum efficiency as several of our intermediate products are key feedstock materials for other products in our integrated manufacturing chain.
Non-GAAP Measures The following tables set forth the non-GAAP financial measures of Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Income and Adjusted Earnings Per Share. Adjusted EBITDA is defined as Net income before Interest, Income taxes, Depreciation and amortization, Non-cash stock-based compensation, Non-recurring, unusual or extraordinary expenses, Non-cash amortization from acquisitions and one-time merger and acquisition costs.
Adjusted EBITDA is defined as Net income before Interest, Income taxes, Depreciation and amortization, Non-cash stock-based compensation, Non-recurring, unusual or extraordinary expenses, Non-cash amortization from acquisitions and merger and acquisition costs that are not reflective of ongoing operations. Adjusted EBITDA Margin is equal to Adjusted EBITDA divided by Sales.
Philadelphia Energy Solutions’ Shut Down The Company has assessed the business impact of the June 2019 fire that shut down Philadelphia Energy Solutions’ (“PES”) refinery in Philadelphia, Pennsylvania. PES was one of multiple suppliers to the Company of cumene, a feedstock material used to produce phenol, acetone and other chemical intermediates.
PES was one of multiple suppliers to the Company of cumene, a feedstock material used to produce phenol, acetone and other chemical intermediates.
Finite-Lived Intangible Assets – Other intangible assets with determinable lives consist of customer relationships, trademarks, patents and other intangibles and are amortized over their estimated useful lives, ranging from 5 to 20 years. As described in "Note 18. Acquisitions" to the consolidated financial statements included in Item 8 of this Form 10-K, in February 2022, the Company acquired U.S.
Finite-Lived Intangible Assets – Other intangible assets with determinable lives consist of customer relationships, trademarks, patents and other intangibles and are amortized over their estimated useful lives, ranging from 5 to 20 years.
Inventories – Substantially all of the Company's inventories are valued at the lower of cost or market using the last-in, first-out (“LIFO”) method. The Company includes spare and other parts in inventory which are used in support of production or production facilities operations and are valued based on weighted average cost.
The Company includes spare and other parts in inventory which are used in support of production or production facilities operations and are valued based on weighted average cost. Inventories valued at LIFO amounted to $196.5 million and $195.6 million at December 31, 2024 and 2023, respectively.
Capital expenditures were approximately $107 million in 2023 compared to $89 million in 2022, reflecting increased spend due to replacement maintenance, growth and cost savings projects and enterprise programs.
Capital expenditures were approximately $134 million in 2024 compared to $107 million in 2023, reflecting planned increased spend on replacement maintenance and enterprise programs. We assumed from Honeywell International Inc.
Amines acquisition (approximately 1%). 31 Gross margin percentage decreased by approximately 5% in 2023 compared to 2022 due primarily to the net impact of lower market pricing and formula-based raw material pass-through pricing (approximately 5%).
Gross margin percentage decreased by approximately 1% in 2024 compared to 2023 due primarily to the impact of market-based pricing, net of raw material costs and increased plant costs, primarily driven by the operational disruptions at the Frankford, Pennsylvania and Hopewell, Virginia manufacturing sites.
Other Non-operating (Income) Expense, Net 2023 2022 2021 Other non-operating (income) expense, net $ (7,158) $ (1,841) $ 998 2023 compared with 2022 Other non-operating income, net, increased in 2023 compared to 2022 by $5.3 million, or approximately 289%, due primarily to the exit from its alliance with Oben (approximately $11.4 million) offset by (i) the exit from a licensing agreement of certain legacy ammonium sulfate technology assets operated at the licensee's fertilizer manufacturing facility, that it intends to close its facilities no later than August 2024 (approximately $4.5 million) and (ii) the exit of production from certain low-margin oximes products.
Other Non-operating (Income) Expense, Net 2024 2023 2022 Other non-operating (income) expense, net $ 2,027 $ (7,158) $ (1,841) 2024 compared with 2023 Other non-operating income, net, decreased in 2024 compared to 2023 by $9.2 million, or approximately (128)%, due primarily to (i) the absence of prior year events, such as the exit from the Oben Holding Group S.A. alliance, a licensee of certain legacy ammonium sulfate fertilizer technology assets closing its facility, and the exit of production from certain low-margin oximes products (approximately $4.5 million) and (ii) the reduction of the Company's anticipated receivable related to the gain on the termination fee recorded upon the exit from the Oben Holding Group S.A. alliance (approximately $1.2 million).
Selling, General and Administrative Expenses 2023 2022 2021 Selling, general and administrative expense $ 95,538 $ 87,748 $ 82,985 % of sales 6.2 % 4.5 % 4.9 % 2023 compared with 2022 Selling, general and administrative expenses increased in 2023 compared to 2022 by $7.8 million, or approximately 9%, due primarily to increased functional support costs including upgrades to our enterprise resource planning system, costs associated with pursuing the business interruption insurance claim in connection with the June 2019 shutdown of cumene supplier, Philadelphia Energy Solutions, and a cash recovery in 2022 of a previously written off receivable.
Selling, General and Administrative Expenses 2024 2023 2022 Selling, general and administrative expense $ 94,023 $ 95,538 $ 87,748 % of sales 6.2 % 6.2 % 4.5 % 2024 compared with 2023 Selling, general and administrative expenses decreased in 2024 compared to 2023 by $1.5 million, or approximately 2%, due primarily to moderated functional support costs and legal spend, partially offset by increased enterprise resource planning system expense.
These increases were partially offset by lower incentive-based compensation costs. Interest Expense, Net 2023 2022 2021 Interest Expense, net $ 7,485 $ 2,781 $ 5,023 2023 compared with 2022 Interest expense, net, increased in 2023 compared to 2022 by $4.7 million, or approximately 169%, due primarily to higher interest rates.
Interest Expense, Net 2024 2023 2022 Interest Expense, net $ 11,311 $ 7,485 $ 2,781 2024 compared with 2023 31 Interest expense, net, increased in 2024 compared to 2023 by $3.8 million, or approximately 51%, due primarily to higher debt balances.
Consolidated Results of Operations for the Years Ended December 31, 2023, 2022 and 2021 (Dollars in thousands ) Sales 2023 2022 2021 Sales $ 1,533,599 $ 1,945,640 $ 1,684,625 % change compared with prior period (21.2) % 15.5 % 45.5 % The change in sales is attributable to the following: 2023 versus 2022 2022 versus 2021 Volume 0.2 % (10.2) % Price (22.0) % 22.2 % Acquisition 0.6 % 3.5 % (21.2) % 15.5 % 2023 compared with 2022 Sales decreased in 2023 compared to 2022 by $412.0 million (approximately 21%) due to (i) net unfavorable market-based pricing (approximately 17%) primarily reflecting reduced ammonium sulfate pricing amid lower raw material input costs and a more stable global nitrogen fertilizer supply environment, as well as lower nylon pricing due to unfavorable supply and demand conditions and (ii) unfavorable raw material pass-through pricing (approximately 5%) as a result of a net cost decrease in benzene and propylene (inputs to cumene which is a key feedstock to our products).
Consolidated Results of Operations for the Years Ended December 31, 2024, 2023 and 2022 (Dollars in thousands ) Sales 2024 2023 2022 Sales $ 1,517,557 $ 1,533,599 $ 1,945,640 % change compared with prior period (1.0) % (21.2) % 15.5 % The change in sales is attributable to the following: 2024 versus 2023 2023 versus 2022 Volume (1.9) % 0.2 % Price 0.9 % (22.0) % Acquisition — % 0.6 % (1.0) % (21.2) % 2024 compared with 2023 Sales decreased in 2024 compared to 2023 by $16.0 million (approximately 1%) due to (i) decreased volume (approximately 2%) primarily driven by lost sales resulting from the operational disruptions at the Frankford and Hopewell manufacturing sites partially offset by net pricing (approximately 1%).
Cost of Goods Sold 2023 2022 2021 Cost of goods sold $ 1,368,511 $ 1,631,161 $ 1,410,503 % change compared with prior period (16.1) % 15.6 % 37.7 % Gross margin % 10.8 % 16.2 % 16.3 % 2023 compared with 2022 Costs of goods sold decreased in 2023 compared to 2022 by $262.6 million (approximately 16%) due primarily to decreased prices of raw materials including natural gas, sulfur, benzene and propylene (inputs to cumene which is a key feedstock to our products) (approximately 17%) partially offset by the impact of the U.S.
Cost of Goods Sold 2024 2023 2022 Cost of goods sold $ 1,364,621 $ 1,368,511 $ 1,631,161 % change compared with prior period (0.3) % (16.1) % 15.6 % Gross margin % 10.1 % 10.8 % 16.2 % 2024 compared with 2023 Costs of goods sold remained flat in 2024 compared to 2023 due primarily to (i) increased prices of raw materials (approximately 2%) and (ii) increased plant costs (approximately 1%) primarily driven by the operational disruptions at the Frankford, Pennsylvania and Hopewell, Virginia manufacturing sites, mitigated by decreased sales volume (approximately 2%).
Goodwill is subject to impairment testing annually and has historically been tested as of March 31, or whenever events or changes in circumstances indicate that the carrying amount may not be fully recoverable. Management first assesses qualitative factors as described in ASC 350 to determine whether it is necessary to perform the quantitative goodwill impairment test.
Management first assesses qualitative factors as described in ASC 350 to determine whether it is necessary to perform the quantitative goodwill impairment test. Potential impairment is identified by comparing the fair value of a reporting unit to the carrying value, including goodwill.
As of December 31, 2023, $68.2 million remained available for repurchase under the currently authorized repurchase program. During the period from January 1, 2024 through February 2, 2024, the Company repurchased an additional 64,678 shares at a weighted average market price of $26.39 per share under the currently authorized repurchase program.
During the period from January 1, 2025 through January 31, 2025, 6,269 additional shares were repurchased for tax withholding obligations in connection with the vesting of equity awards at a weighted average market price of $28.35 and no additional shares were repurchased under the currently authorized repurchase program.
Our differentiated product offerings include high-purity applications and high-value intermediates including our U.S. Amines portfolio as well as our oximes-based EZ-Blox™ anti-skinning agent used in paints and Nadone® cyclohexanone, which is a solvent used in various high-value applications.
Our differentiated product offerings include high-purity applications and high-value intermediates including our U.S.
In January 2023, the ITC made affirmative determinations that revocation of the orders would likely lead to continuation or recurrence of material injury. As a result of Commerce’s and ITC’s determinations, the orders will be extended for another five years.
The anti-dumping orders and applicable duties will continue for another five-year period if Commerce finds that revocation of the orders is likely to lead to continuation or recurrence of dumping and if the ITC finds that revocation is likely to lead to continuation or recurrence of material injury to the U.S. domestic industry.
Cash used for investing activities decreased by $78.4 million for the year ended December 31, 2023 versus the prior year period due primarily to cash paid for the acquisition of U.S.
Cash used for investing activities increased by $32.0 million for the year ended December 31, 2024 versus the prior year period due primarily to higher cash payments for capital expenditures of approximately $26.3 million during the current year period primarily reflecting planned increased spend on replacement maintenance and enterprise programs.
The strike did not have a material impact on the Company’s results of operations. On September 29, 2023, the Company’s Hopewell North bargaining unit, represented by the United Steelworkers, ratified a new five-year labor agreement in advance of the prior agreement’s anticipated expiration date of October 4, 2023.
Chesterfield, VA Collective Bargaining Agreement On May 9, 2024, the Company’s Chesterfield bargaining unit, represented by the Teamsters Local 592, ratified a new five-year labor agreement in advance of the prior agreement’s expiration date of May 14, 2024. The ratified labor agreement affected approximately 160 workers at the Company’s manufacturing facility in Chesterfield, Virginia.
Income Tax Expense 2023 2022 2021 Income tax expense $ 14,600 $ 53,905 $ 45,325 Effective tax rate 21.1 % 23.9 % 24.5 % The Company's effective income tax rate for 2023 approximated the U.S. Federal statutory rate of 21%.
Income Tax Expense 2024 2023 2022 Income tax expense $ 1,426 $ 14,600 $ 53,905 Effective income tax rate 3.1 % 21.1 % 23.9 % Generally, the Company's effective income tax rate is increased relative to the U.S. statutory rate of 21% due to state taxes and executive compensation limitations, which are generally offset by research tax credits, excess tax benefits of equity compensation and the foreign derived intangible income deduction.
Removed
For a description of our principal risks, see “Risk Factors" in Item 1A. Recent Developments Business Operations In the second quarter of 2019, the Company entered into an alliance with Oben Holding Group S.A. (“Oben”), a third-party producer of films for the flexible packaging industry.
Added
For a description of our principal risks, see “Risk Factors" in Item 1A. Recent Developments Business Operations In October 2024, additional required maintenance at our Hopewell, Virginia manufacturing site resulted in a delayed ramp to full operating rates following our multi-site planned plant turnaround.
Removed
On September 8, 2023, the Company entered into an agreement to exit its alliance with Oben. The exit of the alliance provides a termination fee payable by Oben to AdvanSix in exchange for full transition of AdvanSix’s share of the alliance. The Company recorded a gain of $11.4 million in the third quarter of 2023.
Added
The Company recognized an incremental approximately $17 million unfavorable impact to pre-tax income in the fourth quarter 2024, inclusive of fixed cost absorption and higher maintenance expense, and lost sales.
Removed
The gain represents management’s estimate of the value of the termination fee, which is calculated based upon a formula that takes into account a combination of historical and future performance, and is included as a component of Other non-operating (income) expense, net.
Added
The Company returned to targeted utilization rates at its Frankford, Pennsylvania manufacturing site, as well as across its value chain, prior to the end of the first quarter of 2024.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeDerivative and Hedging Instruments” to the Consolidated Financial Statements included in Item 8 of this Form 10-K for a discussion relating to credit and market, commodity price and interest rate risk management. 41
Biggest changeSummary of Significant Accounting Policies” to the Consolidated Financial Statements included in Item 8 of this Form 10-K for a discussion relating to credit and market, commodity price and interest rate risk management. 40
Based on current borrowing levels at December 31, 2023, a 25-basis point fluctuation in interest rates for the year ended December 31, 2023 would have resulted in an increase or decrease to our interest expense of approximately $0.4 million. See “Note 12.
Based on current borrowing levels at December 31, 2024, a 25-basis point fluctuation in interest rates for the year ended December 31, 2024 would have resulted in an increase or decrease to our interest expense of approximately $0.5 million. See “Note 2.

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