Delaware
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81-2525089
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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300 Kimball Drive, Suite 101 Parsippany, New Jersey
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07054
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(Address of principal executive offices)
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(Zip Code)
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Title of each class
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Name of each exchange on which registered
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Common Stock, par value $0.01 per share
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New York Stock Exchange
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Large accelerated filer
ý
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Accelerated filer
o
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Non-accelerated filer
o
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Smaller reporting company
o
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Emerging growth company
o
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•
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Nylon
–
We sell our Nylon 6 resin globally, primarily under the Aegis® brand name. In addition, we use our Nylon 6 resin to produce nylon films which we primarily sell to our customers under the Capran® brand name.
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•
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Caprolactam –
Caprolactam is the key chemical compound used in the production of Nylon 6 resin. In recent years, approximately 60% of the caprolactam we have produced at our facility in Hopewell, Virginia has been shipped to our facility in Chesterfield, Virginia to manufacture Nylon 6 resin. We market and sell the caprolactam that is not consumed internally in Nylon 6 resin production to customers who use it to manufacture polymer resins to produce nylon fibers, films and other nylon products. Our Hopewell manufacturing facility is one of the world’s largest single-site producers of caprolactam as of December 31, 2017.
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•
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Ammonium Sulfate Fertilizers –
Ammonium sulfate fertilizers are derived from the caprolactam manufacturing process. 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, 2017. We market and sell ammonium sulfate primarily to North American and South American distributors, farm cooperatives and retailers to fertilize crops.
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•
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Chemical Intermediates –
We manufacture, market and sell a number of other chemical products that are derived from the chemical processes within our integrated supply chain. Most significant is acetone which is used by our customers in the production of adhesives, paints, coatings, solvents, herbicides and other engineered plastic resins. Other intermediate chemicals that we manufacture, market and sell include phenol, alpha-methylstyrene (“AMS”), cyclohexanone, methyl ethyl ketoxime (“MEKO”), cyclohexanol, acetaldehyde oxime, 2-pentanone oxime, sulfuric acid, ammonia and carbon dioxide.
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Years Ended December 31,
|
||||
|
2017
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|
2016
|
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2015
|
Nylon
|
29%
|
|
28%
|
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27%
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Caprolactam
|
19%
|
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17%
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18%
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Ammonium Sulfate Fertilizers
|
19%
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24%
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25%
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Chemical Intermediates
|
33%
|
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31%
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30%
|
|
100%
|
|
100%
|
|
100%
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•
|
Increasing production volume through asset reliability, flexibility and capacity;
|
•
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Investing in intermediate chemical buffer storage capacity to mitigate the unfavorable impact of routine maintenance and unplanned interruptions;
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•
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Energy and direct material initiatives aimed at increasing plant productivity and lowering costs; and
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•
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Procurement processes, competitive bidding and supplier diversification to reduce raw material costs.
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Name, Age
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Position
|
Business Experience
|
Erin N. Kane, 41
|
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. She joined Honeywell in 2002 as a Six Sigma Blackbelt of Honeywell’s Specialty Materials business. In 2004, she was named product marketing manager of Honeywell’s Specialty Additives business. From 2006 until 2008, Ms. Kane served as global marketing manager of Honeywell’s Authentication Technologies business, and in 2008 she was named global marketing manager of Honeywell’s Resins and Chemicals business. In 2011, she was named business director of chemical intermediates of Honeywell’s Resins and Chemicals business. Prior to joining Honeywell, Ms. Kane held Six Sigma and process engineering positions at Elementis Specialties and Kvaerner Process. Ms. Kane brings to the Board her extensive leadership experience as well as knowledge of AdvanSix’s business, industry, health, safety and environmental (HSE), and operations.
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Michael Preston, 46
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Senior Vice President and Chief Financial Officer
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Prior to joining the Company, Mr. Preston held a number of finance roles with Honeywell for over 15 years. Most recently, Mr. Preston served as vice president and chief financial officer for Honeywell’s UOP division (2013-2016). Prior to this role, Mr. Preston was vice president of business analysis & planning (2012–2013) with Honeywell corporate. Mr. Preston also held several finance leadership roles within businesses and Honeywell corporate, including chief financial officer for Fluorine Products, director of financial planning & analysis for Performance Materials and Technologies, and director of business analysis & planning for Honeywell corporate. Mr. Preston began his career with Honeywell in September of 2001 as manager of investor relations. Prior to joining Honeywell, he spent seven years in investor relations consulting. Mr. Preston was awarded the Chartered Financial Analyst designation in September of 2001 and is a member of CFA Institute and New York Society of Security Analysts.
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John M. Quitmeyer, 67
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Senior Vice President, General Counsel and Corporate Secretary
|
Prior to joining the Company, Mr. Quitmeyer served as vice president and general counsel of Honeywell’s Automation and Control Solutions strategic business group since 2005. He joined Honeywell in 1997 as general counsel of Honeywell’s safety restraint business. From 1997 until 1998, Mr. Quitmeyer served as general counsel of Honeywell’s automotive products group. From 1998 until 2000, Mr. Quitmeyer served as general counsel of Honeywell’s consumer products group. From 2000 until 2002, Mr. Quitmeyer was Honeywell’s chief litigation counsel. From 2002 until 2005, Mr. Quitmeyer served as general counsel of Honeywell’s Specialty Materials business. Prior to joining Honeywell, Mr. Quitmeyer was a litigation partner at Rogers & Wells.
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Jonathan Bellamy, 52
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Senior Vice President and Chief Human Resources Officer
|
Prior to joining the Company, Mr. Bellamy served as vice president of human resources of the Defense and Space business of Honeywell’s Aerospace division since 2015. He joined Honeywell in 1997 as human resources manager of the Turbo Technologies division. From March 2000 until February 2003, Mr. Bellamy served as human resources manager, then regional director of Honeywell’s Turbo Technologies division. From February 2003 until December 2004, he served as director of human resources of Honeywell Transportation Systems, Asia. From December 2004 until November 2005, Mr. Bellamy served as global human resources director of Honeywell’s Friction Materials division. From November 2005 until July 2010, Mr. Bellamy served as corporate human resources director. From 2010 to 2015, he was vice president of human resources of Honeywell UOP. Prior to joining Honeywell, Mr. Bellamy held human resources and operations positions at BTR Brook Hansen and N.S.K./RHP Bearings.
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Name, Age
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Position
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Business Experience
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Christopher Gramm, 48
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Vice President, Controller
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Prior to joining the Company, Mr. Gramm served as vice president and controller of the aerospace and corporate government compliance divisions at Honeywell International Inc. From August 2014 to November 2015, Mr. Gramm served as vice president of finance for the integrated supply chain of the aerospace division at Honeywell International Inc. Beginning in March 2011, he was vice president and controller of the aerospace division at Honeywell International Inc. Over the course of the period from 1997 to March 2011, Mr. Gramm held several positions at Honeywell International Inc., including controller and chief financial officer of various divisions focused on areas including specialty materials and resins and chemicals. He joined Honeywell International Inc. in 1997 as a senior staff accountant. Before joining Honeywell International Inc., Mr. Gramm was a manager at Corning Life Sciences.
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•
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Weak economic conditions, especially in our key markets, could reduce demand for our products, impacting our sales and margins;
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•
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As a result of volatility in commodity prices, we may encounter difficulty in achieving sustained market acceptance of past or future price increases;
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•
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Under difficult market conditions, there can be no assurance that access to credit or the capital markets would be available or sufficient, and as such, we may not be able to successfully obtain additional financing on reasonable terms, or at all;
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•
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Market conditions and credit availability could adversely affect the financial situation of key raw material suppliers’ ability to deliver key materials, thus impacting our ability to run our production facilities at the intended rates; and
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•
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Market conditions could result in our key customers experiencing financial difficulties and/or electing to limit spending, which in turn could result in decreased sales and earnings for us.
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•
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Prior to the Spin-Off, we operated as part of Honeywell’s broader corporate organization, and Honeywell performed various corporate functions for us. Our historical consolidated financial information prior to the Spin-Off reflects allocations of corporate expenses from Honeywell for these and similar functions. These allocations may not reflect the costs we will incur for similar services in the future as an independent, publicly-traded company.
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•
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We have entered into transactions with Honeywell that did not exist prior to the Spin-Off, such as Honeywell’s provision of transition and other services, which will cause us to incur new costs. See the section titled “Certain Relationships and Related Party Transactions” of the Company’s Information Statement filed as Exhibit 99.1 to the Form 10 and "Note 3 - Related Party Transactions with Honeywell" to our Consolidated Financial Statements included in this Form 10-K.
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•
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Our historical consolidated financial information prior to the Spin-Off does not reflect changes that we expect to experience in the future as a result of our separation from Honeywell, including changes in the financing, cash management, operations, cost structure and personnel needs of our business. As part of Honeywell, there were certain benefits derived from Honeywell’s operating diversity, size, purchasing power, borrowing leverage and available capital for investments. As an independent entity, we may be unable to purchase goods, services and technologies, such as insurance and health care benefits and computer software licenses, or access capital markets on terms as favorable to us as those we obtained as part of Honeywell prior to the Spin-Off. In addition, our historical consolidated financial data does not include an allocation of interest expense comparable to the interest expense we will incur as a result of the series of internal transactions which were effected in order for us to hold, directly or through our subsidiaries, the businesses constituting Honeywell’s Resins and Chemicals business and related operations, and the Spin-Off, including interest expense in connection with the incurrence of indebtedness at AdvanSix.
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•
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Incur or guarantee additional indebtedness or sell disqualified or preferred stock;
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•
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Pay dividends on, make distributions in respect of, repurchase or redeem capital stock;
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•
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Make investments or acquisitions;
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•
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Sell, transfer or otherwise dispose of certain assets;
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•
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Create liens;
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•
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Enter into sale/leaseback transactions;
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•
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Enter into agreements restricting the ability to pay dividends or make other intercompany transfers;
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•
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Consolidate, merge, sell or otherwise dispose of all or substantially all of our or our subsidiaries’ assets;
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•
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Enter into transactions with affiliates;
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•
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Prepay, repurchase or redeem certain kinds of indebtedness;
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•
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Issue or sell stock of our subsidiaries; and/or
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•
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Significantly change the nature of our business.
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•
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Actual or anticipated fluctuations in our results of operations due to factors related to our business;
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•
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Success or failure of our business strategies;
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•
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Competition and industry capacity;
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•
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Changes in interest rates and other factors that affect earnings and cash flow;
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•
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Our level of indebtedness, our ability to make payments on or service our indebtedness and our ability to obtain financing as needed;
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•
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Our ability to retain and recruit qualified personnel;
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•
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Our quarterly or annual earnings, or those of other companies in our industry;
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•
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Announcements by us or our competitors of significant acquisitions or dispositions;
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•
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Changes in accounting standards, policies, guidance, interpretations or principles;
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•
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Changes in earnings estimates by securities analysts or our ability to meet those estimates;
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•
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The operating and stock price performance of other comparable companies;
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•
|
Investor perception of our company and our industry;
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•
|
Overall market fluctuations and volatility unrelated to our operating performance;
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•
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Results from any material litigation or government investigation;
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•
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Changes in laws and regulations (including tax laws and regulations) affecting our business;
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•
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Changes in capital gains taxes and taxes on dividends affecting stockholders; and
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•
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General economic conditions and other external factors.
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•
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Provide for staggered terms for directors on our Board through our 2020 annual meeting of stockholders;
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•
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Do not permit our stockholders to act by written consent and require that stockholder action must take place at an annual or special meeting of our stockholders;
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•
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Establish advance notice requirements for stockholder nominations and proposals;
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•
|
Limit the persons who may call special meetings of stockholders; and
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•
|
Limit our ability to enter into business combination transactions with certain stockholders.
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|
Market Prices
|
||||||
2017
|
Low
|
|
High
|
||||
Quarter ended December 31, 2017
|
$
|
39.28
|
|
|
$
|
46.51
|
|
Quarter ended September 30, 2017
|
$
|
29.55
|
|
|
$
|
40.34
|
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Quarter ended June 30, 2017
|
$
|
24.72
|
|
|
$
|
33.67
|
|
Quarter ended March 31, 2017
|
$
|
20.88
|
|
|
$
|
30.21
|
|
|
|
|
|
||||
2016
|
|
|
|
||||
Quarter ended December 31, 2016
|
$
|
13.70
|
|
|
$
|
23.35
|
|
|
October 3, 2016
|
December 31,
2016 |
March 31, 2017
|
June 30, 2017
|
September 30, 2017
|
December 31,
2017 |
AdvanSix Inc.
|
100
|
135
|
166
|
190
|
242
|
256
|
S&P Small Cap 600
|
100
|
112
|
113
|
115
|
121
|
126
|
S&P Small Cap 600 Chemicals
|
100
|
116
|
117
|
117
|
126
|
131
|
|
Year Ended December 31,
|
||||||||||||||||||
Selected Statement of Operations Information (Dollars in thousands):
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
||||||||||
Sales
|
$
|
1,475,194
|
|
|
$
|
1,191,524
|
|
|
$
|
1,329,409
|
|
|
$
|
1,790,372
|
|
|
$
|
1,766,586
|
|
Net Income
|
146,699
|
|
|
34,147
|
|
|
63,776
|
|
|
83,858
|
|
|
118,746
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
|
As of December 31,
|
||||||||||||||||||
Selected Balance Sheet Information (Dollars in thousands):
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
||||||||||
Total assets
|
$
|
1,050,274
|
|
|
$
|
904,957
|
|
|
$
|
840,986
|
|
|
$
|
823,048
|
|
|
$
|
733,981
|
|
Total liabilities
|
673,949
|
|
|
689,595
|
|
|
361,916
|
|
|
406,293
|
|
|
313,407
|
|
|||||
Total equity
|
376,325
|
|
|
215,362
|
|
|
479,070
|
|
|
416,755
|
|
|
420,574
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Earnings Per Common Share
(a)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Basic:
|
$
|
4.81
|
|
|
$
|
1.12
|
|
|
$
|
2.09
|
|
|
$
|
2.75
|
|
|
$
|
3.90
|
|
Diluted:
|
4.72
|
|
|
1.12
|
|
|
2.09
|
|
|
2.75
|
|
|
3.90
|
|
|||||
Weighted average common shares
(a)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Basic:
|
30,482,966
|
|
|
30,482,966
|
|
|
30,482,966
|
|
|
30,482,966
|
|
|
30,482,966
|
|
|||||
Diluted:
|
31,091,601
|
|
|
30,503,587
|
|
|
30,482,966
|
|
|
30,482,966
|
|
|
30,482,966
|
|
(a)
|
On October 1, 2016, the date of consummation of the Spin-Off, 30,482,966 shares of the Company’s common stock were distributed to Honeywell stockholders of record as of September 16, 2016. Basic and Diluted EPS for all periods prior to the Spin-Off reflect the number of distributed shares, or 30,482,966 shares. These shares were treated as issued and outstanding from January 1, 2013 for purposes of calculating historical basic earnings per share. No dividends have been paid by the Company from October 1, 2016 through December 31, 2017.
|
|
2017
|
|
2016
|
|
2015
|
||||||
Sales
|
$
|
1,475,194
|
|
|
$
|
1,191,524
|
|
|
$
|
1,329,409
|
|
% change compared with prior period
|
23.8
|
%
|
|
(10.4
|
)%
|
|
(25.7
|
)%
|
|
2017 versus 2016
|
|
2016 versus 2015
|
||
Volume
|
8.5
|
%
|
|
(1.2
|
)%
|
Price
|
15.3
|
%
|
|
(9.2
|
)%
|
|
23.8
|
%
|
|
(10.4
|
)%
|
|
2017
|
|
2016
|
|
2015
|
||||||
Cost of goods sold
|
$
|
1,249,014
|
|
|
$
|
1,083,894
|
|
|
$
|
1,179,651
|
|
% change compared with prior period
|
15.2
|
%
|
|
(8.1
|
)%
|
|
(26.6
|
)%
|
|||
Gross margin %
|
15.3
|
%
|
|
9.0
|
%
|
|
11.3
|
%
|
|
2017
|
|
2016
|
|
2015
|
||||||
Selling, general and administrative expense
|
$
|
72,815
|
|
|
$
|
53,753
|
|
|
$
|
52,398
|
|
% of sales
|
4.9
|
%
|
|
4.5
|
%
|
|
3.9
|
%
|
|
2017
|
|
2016
|
|
2015
|
||||||
Other non-operating expense (income), net
|
$
|
8,733
|
|
|
$
|
102
|
|
|
$
|
(2,877
|
)
|
|
2017
|
|
2016
|
|
2015
|
||||||
Income tax expense (benefit)
|
$
|
(2,067
|
)
|
|
$
|
19,628
|
|
|
$
|
36,461
|
|
Effective tax rate
|
(1.4
|
)%
|
|
36.5
|
%
|
|
36.4
|
%
|
|
2017
|
|
2016
|
|
2015
|
||||||
Net income
|
$
|
146,699
|
|
|
$
|
34,147
|
|
|
$
|
63,776
|
|
|
|
Years Ended December 31,
|
||||||||||
|
|
2017
|
|
2016
|
|
2015
|
||||||
Net income
|
|
$
|
146,699
|
|
|
$
|
34,147
|
|
|
$
|
63,776
|
|
Interest expense, net
|
|
7,716
|
|
|
1,847
|
|
|
—
|
|
|||
Income tax expense (benefit)
|
|
(2,067
|
)
|
|
19,628
|
|
|
36,461
|
|
|||
Depreciation and amortization
|
|
48,455
|
|
|
40,329
|
|
|
36,410
|
|
|||
EBITDA (non-GAAP)
|
|
200,803
|
|
|
95,951
|
|
|
136,647
|
|
|||
Prior-year one-time benefit
(1)
|
|
—
|
|
|
15,500
|
|
|
—
|
|
|||
EBITDA excluding prior-year one-time benefit (non-GAAP)
|
|
$
|
200,803
|
|
|
$
|
80,451
|
|
|
$
|
136,647
|
|
|
|
|
|
|
|
|
||||||
Sales
|
|
$
|
1,475,194
|
|
|
$
|
1,191,524
|
|
|
$
|
1,329,409
|
|
|
|
|
|
|
|
|
||||||
EBITDA margin % (non-GAAP)
|
|
13.6
|
%
|
|
8.1
|
%
|
|
10.3
|
%
|
|||
|
|
|
|
|
|
|
||||||
EBITDA margin % excluding prior year one-time benefit (non-GAAP)
|
|
13.6
|
%
|
|
6.8
|
%
|
|
10.3
|
%
|
|
Years Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Net Income
|
$
|
146,699
|
|
|
$
|
34,147
|
|
|
$
|
63,776
|
|
One-time net tax benefit
(2)
|
(53,424
|
)
|
|
—
|
|
|
—
|
|
|||
Net Income excluding one-time net tax benefit
|
$
|
93,275
|
|
|
$
|
34,147
|
|
|
$
|
63,776
|
|
|
Years Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Basic
|
|
|
|
|
|
||||||
EPS
|
$
|
4.81
|
|
|
$
|
1.12
|
|
|
$
|
2.09
|
|
One-time net tax benefit
(2)
|
(1.75
|
)
|
|
—
|
|
|
—
|
|
|||
EPS excluding one-time net tax benefit
|
$
|
3.06
|
|
|
$
|
1.12
|
|
|
$
|
2.09
|
|
|
Years Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Diluted
|
|
|
|
|
|
||||||
EPS
|
$
|
4.72
|
|
|
$
|
1.12
|
|
|
$
|
2.09
|
|
One-time net tax benefit
(2)
|
(1.72
|
)
|
|
—
|
|
|
—
|
|
|||
EPS excluding one-time net tax benefit
|
$
|
3.00
|
|
|
$
|
1.12
|
|
|
$
|
2.09
|
|
(Dollars in millions)
|
|
2017
|
||
Quarter ended December 31, 2017
|
|
$
|
—
|
|
Quarter ended September 30, 2017
|
|
$
|
32.5
|
|
Quarter ended June 30, 2017
|
|
$
|
108.5
|
|
Quarter ended March 31, 2017
|
|
$
|
167.5
|
|
|
Years Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
(Dollars in thousands)
|
|
|
|
|
|
||||||
Cash provided by (used for):
|
|
|
|
|
|
|
|
|
|||
Operating activities
|
$
|
134,607
|
|
|
$
|
113,740
|
|
|
$
|
101,536
|
|
Investing activities
|
(93,247
|
)
|
|
(86,381
|
)
|
|
(98,230
|
)
|
|||
Financing activities
|
(127
|
)
|
|
(13,160
|
)
|
|
(3,306
|
)
|
|||
Net increase in cash and cash equivalents
|
$
|
41,233
|
|
|
$
|
14,199
|
|
|
$
|
—
|
|
|
Payments due by period
|
||||||||||||||||||||||||||
Contractual Obligations
|
Total
|
|
2018
|
|
2019
|
|
2020
|
|
2021
|
|
2022
|
|
2023 and Beyond
|
||||||||||||||
Long-term debt – principal repayments
(1)
|
$
|
266,625
|
|
|
$
|
16,875
|
|
|
$
|
27,000
|
|
|
$
|
27,000
|
|
|
$
|
195,750
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Long-term debt – interest payments
(1)
|
40,185
|
|
|
11,377
|
|
|
11,621
|
|
|
10,312
|
|
|
6,875
|
|
|
—
|
|
|
—
|
|
|||||||
Transition services agreement
(2)
|
3,211
|
|
|
3,211
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Capitalized leases
|
601
|
|
|
125
|
|
|
131
|
|
|
119
|
|
|
95
|
|
|
98
|
|
|
33
|
|
|||||||
Interest payments on capitalized leases
|
55
|
|
|
22
|
|
|
16
|
|
|
9
|
|
|
5
|
|
|
3
|
|
|
—
|
|
|||||||
Minimum operating lease payments
|
126,772
|
|
|
32,661
|
|
|
21,002
|
|
|
12,488
|
|
|
11,780
|
|
|
10,628
|
|
|
38,213
|
|
|||||||
Estimated environmental compliance costs
(3)
|
6,837
|
|
|
952
|
|
|
1,661
|
|
|
1,515
|
|
|
1,445
|
|
|
1,264
|
|
|
—
|
|
|||||||
Purchase obligations
(4)
|
314,429
|
|
|
83,793
|
|
|
46,798
|
|
|
37,705
|
|
|
37,525
|
|
|
17,668
|
|
|
90,940
|
|
|||||||
Postretirement benefit obligations
(5)
|
39,800
|
|
|
8,800
|
|
|
7,500
|
|
|
7,500
|
|
|
7,800
|
|
|
8,200
|
|
|
—
|
|
|||||||
Total contractual obligations
|
$
|
798,515
|
|
|
$
|
157,816
|
|
|
$
|
115,729
|
|
|
$
|
96,648
|
|
|
$
|
261,275
|
|
|
$
|
37,861
|
|
|
$
|
129,186
|
|
(1)
|
Long-term Debt - Principal repayments: refer to Note 9--Long-term Debt and Credit Arrangements 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, 2017
.
|
(2)
|
Transition Services Agreement: On September 28, 2016, in connection with, and as a condition to the Spin-Off, Honeywell and AdvanSix Inc. entered into a Transition Services Agreement. Pursuant to the Transition Services Agreement, Honeywell agreed to provide AdvanSix Inc. with, among other things, certain information technology, human resources, financial, health, safety and environmental, sales, product stewardship, operations and manufacturing, procurement, customer support, legal and contractual, trade compliance, supply chain and logistics, and real estate services for a limited period of time after the consummation of the Spin-Off (ranging from two months to two years depending on the service), in exchange for the minimum fees set forth in the Transition Services Agreement. Additionally, AdvanSix Inc. entered into a separate agreement with Honeywell to provide similar services with respect to certain non-US premises of the Company.
|
(3)
|
The payment amounts in the table only reflect the environmental compliance costs which we have accrued as probable and reasonably estimable as of December 31, 2017.
|
(4)
|
Purchase obligations are entered into with various vendors in the normal course of business, which are consistent with our expected requirements and primarily relate to cumene, oleum, sulfur and natural gas, as well as a long-term agreement for loading, unloading and handling of a portion of our ammonium sulfate export volumes.
|
(5)
|
Actual contribution payments will depend on several factors, including investment performance and discount rates, timing of benefits and changes in applicable local requirements. The Company plans to make pension plan contributions in future years sufficient to satisfy pension funding requirements in those periods.
|
|
Years Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
(Dollars in thousands)
|
|
|
|
|
|
|
|
|
|||
Purchases of property, plant and equipment
|
$
|
86,438
|
|
|
$
|
84,009
|
|
|
$
|
97,144
|
|
|
Years Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Sales
|
$
|
1,475,194
|
|
|
$
|
1,191,524
|
|
|
$
|
1,329,409
|
|
Costs, expenses and other:
|
|
|
|
|
|
|
|
|
|||
Costs of goods sold
|
1,249,014
|
|
|
1,083,894
|
|
|
1,179,651
|
|
|||
Selling, general and administrative expenses
|
72,815
|
|
|
53,753
|
|
|
52,398
|
|
|||
Other non-operating expense (income), net
|
8,733
|
|
|
102
|
|
|
(2,877
|
)
|
|||
|
1,330,562
|
|
|
1,137,749
|
|
|
1,229,172
|
|
|||
|
|
|
|
|
|
||||||
Income before taxes
|
144,632
|
|
|
53,775
|
|
|
100,237
|
|
|||
Income tax expense (benefit)
|
(2,067
|
)
|
|
19,628
|
|
|
36,461
|
|
|||
Net income
|
$
|
146,699
|
|
|
$
|
34,147
|
|
|
$
|
63,776
|
|
|
|
|
|
|
|
||||||
Earnings per common share
|
|
|
|
|
|
|
|
|
|||
Basic
|
$
|
4.81
|
|
|
$
|
1.12
|
|
|
$
|
2.09
|
|
Diluted
|
$
|
4.72
|
|
|
$
|
1.12
|
|
|
$
|
2.09
|
|
Weighted average common shares outstanding
|
|
|
|
|
|
|
|
|
|||
Basic
|
30,482,966
|
|
|
30,482,966
|
|
|
30,482,966
|
|
|||
Diluted
|
31,091,601
|
|
|
30,503,587
|
|
|
30,482,966
|
|
|
Years Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Net income
|
$
|
146,699
|
|
|
$
|
34,147
|
|
|
$
|
63,776
|
|
Foreign exchange translation adjustment
|
12
|
|
|
154
|
|
|
(1,390
|
)
|
|||
Commodity hedges
|
—
|
|
|
(1,413
|
)
|
|
2,865
|
|
|||
Pension obligation adjustments
|
(6,023
|
)
|
|
1,963
|
|
|
—
|
|
|||
Other comprehensive income, net of tax
|
(6,011
|
)
|
|
704
|
|
|
1,475
|
|
|||
Comprehensive income
|
$
|
140,688
|
|
|
$
|
34,851
|
|
|
$
|
65,251
|
|
|
Years Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
|||
Net income
|
$
|
146,699
|
|
|
$
|
34,147
|
|
|
$
|
63,776
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
|
|
|
|||
Depreciation and amortization
|
48,455
|
|
|
40,329
|
|
|
36,410
|
|
|||
Loss on disposal of assets
|
1,500
|
|
|
1,529
|
|
|
1,308
|
|
|||
Deferred income taxes
|
(7,513
|
)
|
|
11,534
|
|
|
9,913
|
|
|||
Stock based compensation
|
7,742
|
|
|
1,327
|
|
|
—
|
|
|||
Accretion of deferred financing fees
|
592
|
|
|
148
|
|
|
—
|
|
|||
Changes in assets and liabilities:
|
|
|
|
|
|
|
|
|
|||
Accounts and other receivables
|
(64,320
|
)
|
|
(3,948
|
)
|
|
38,399
|
|
|||
Inventories
|
(230
|
)
|
|
21,253
|
|
|
5,021
|
|
|||
Accounts payable
|
8,172
|
|
|
23,846
|
|
|
(38,689
|
)
|
|||
Income taxes payable
|
(85
|
)
|
|
86
|
|
|
—
|
|
|||
Accrued liabilities
|
9,617
|
|
|
281
|
|
|
500
|
|
|||
Deferred income and customer advances
|
(8,373
|
)
|
|
360
|
|
|
(6,783
|
)
|
|||
Other assets and liabilities
|
(7,649
|
)
|
|
(17,152
|
)
|
|
(8,319
|
)
|
|||
Net cash provided by operating activities
|
134,607
|
|
|
113,740
|
|
|
101,536
|
|
|||
|
|
|
|
|
|
||||||
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|||
Expenditures for property, plant and equipment
|
(86,438
|
)
|
|
(84,009
|
)
|
|
(97,144
|
)
|
|||
Other investing activities
|
(6,809
|
)
|
|
(2,372
|
)
|
|
(1,086
|
)
|
|||
Net cash used for investing activities
|
(93,247
|
)
|
|
(86,381
|
)
|
|
(98,230
|
)
|
|||
|
|
|
|
|
|
||||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|||
Proceeds from long-term debt
|
—
|
|
|
270,000
|
|
|
—
|
|
|||
Payment of long-term debt
|
—
|
|
|
(3,375
|
)
|
|
—
|
|
|||
Payment of debt issuance costs
|
—
|
|
|
(1,881
|
)
|
|
—
|
|
|||
Borrowings under revolving credit facility
|
308,500
|
|
|
58,000
|
|
|
—
|
|
|||
Payments of revolving credit facility
|
(308,500
|
)
|
|
(58,000
|
)
|
|
—
|
|
|||
Payment of revolving credit facility fees
|
—
|
|
|
(1,080
|
)
|
|
—
|
|
|||
Principal payments under capital lease
|
(127
|
)
|
|
(165
|
)
|
|
—
|
|
|||
Distribution to Honeywell in connection with Spin-Off
|
—
|
|
|
(269,347
|
)
|
|
—
|
|
|||
Net decrease in invested equity
|
—
|
|
|
(7,312
|
)
|
|
(2,936
|
)
|
|||
Other financing activities
|
—
|
|
|
—
|
|
|
(370
|
)
|
|||
Net cash used for financing activities
|
(127
|
)
|
|
(13,160
|
)
|
|
(3,306
|
)
|
|||
|
|
|
|
|
|
||||||
Net increase in cash and cash equivalents
|
41,233
|
|
|
14,199
|
|
|
—
|
|
|||
Cash and cash equivalents at beginning of year
|
14,199
|
|
|
—
|
|
|
—
|
|
|||
Cash and cash equivalents at the end of year
|
$
|
55,432
|
|
|
$
|
14,199
|
|
|
$
|
—
|
|
Supplemental non-cash investing activities:
|
|
|
|
|
|
|
|
|
|||
Capital expenditures included in accounts payable
|
$
|
25,222
|
|
|
$
|
28,485
|
|
|
$
|
22,282
|
|
Supplemental cash investing activities:
|
|
|
|
|
|
|
|
|
|||
Cash paid for interest
|
$
|
7,236
|
|
|
$
|
1,862
|
|
|
$
|
—
|
|
Cash paid for taxes
|
$
|
12,982
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Common Stock
|
|
Additional
Paid-In Capital |
|
Retained Earnings (Accumulated
Deficit) |
|
Invested
Equity |
|
Accumulated
Other Comprehensive Income (Loss) |
|
Total Equity
|
|||||||||||||||
Shares
|
|
Amount
|
|
|||||||||||||||||||||||
Balance at December 31, 2014
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
421,969
|
|
|
$
|
(5,214
|
)
|
|
$
|
416,755
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net Income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
63,776
|
|
|
—
|
|
|
63,776
|
|
||||||
Comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Foreign exchange translation adjustments
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,390
|
)
|
|
(1,390
|
)
|
||||||
Commodity hedges
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,865
|
|
|
2,865
|
|
||||||
Total comprehensive income (loss), net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,475
|
|
|
1,475
|
|
||||||
Change in invested equity
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,936
|
)
|
|
—
|
|
|
(2,936
|
)
|
||||||
Balance at December 31, 2015
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
482,809
|
|
|
(3,739
|
)
|
|
479,070
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net Income through September 30, 2016
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
58,861
|
|
|
—
|
|
|
58,861
|
|
||||||
Net Loss from October 1, 2016
|
—
|
|
|
—
|
|
|
—
|
|
|
(24,714
|
)
|
|
—
|
|
|
—
|
|
|
(24,714
|
)
|
||||||
Comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Foreign exchange translation adjustments
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
154
|
|
|
154
|
|
||||||
Commodity hedges
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,413
|
)
|
|
(1,413
|
)
|
||||||
Pension obligation adjustments
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,963
|
|
|
1,963
|
|
||||||
Total comprehensive income (loss), net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
704
|
|
|
704
|
|
||||||
Change in invested equity
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(299,886
|
)
|
|
—
|
|
|
(299,886
|
)
|
||||||
Issuance of common stock and reclassification of invested equity
|
30,482,966
|
|
|
305
|
|
|
241,479
|
|
|
—
|
|
|
(241,784
|
)
|
|
—
|
|
|
—
|
|
||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
1,327
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,327
|
|
||||||
Balance at December 31, 2016
|
30,482,966
|
|
|
305
|
|
|
242,806
|
|
|
(24,714
|
)
|
|
—
|
|
|
(3,035
|
)
|
|
215,362
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
146,699
|
|
|
—
|
|
|
—
|
|
|
146,699
|
|
||||||
Comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Foreign exchange translation adjustments
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12
|
|
|
12
|
|
||||||
Commodity hedges
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Pension obligation adjustments
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6,023
|
)
|
|
(6,023
|
)
|
||||||
Total comprehensive income (loss), net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6,011
|
)
|
|
(6,011
|
)
|
||||||
Spin-off deferred tax adjustments
|
—
|
|
|
—
|
|
|
12,533
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12,533
|
|
||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
7,742
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7,742
|
|
||||||
Balance at December 31, 2017
|
30,482,966
|
|
|
$
|
305
|
|
|
$
|
263,081
|
|
|
$
|
121,985
|
|
|
$
|
—
|
|
|
$
|
(9,046
|
)
|
|
$
|
376,325
|
|
|
Years Ended December 31,
|
||||
|
2017
|
|
2016
|
|
2015
|
Nylon
|
29%
|
|
28%
|
|
27%
|
Caprolactam
|
19%
|
|
17%
|
|
18%
|
Ammonium Sulfate Fertilizers
|
19%
|
|
24%
|
|
25%
|
Chemical Intermediates
|
33%
|
|
31%
|
|
30%
|
|
100%
|
|
100%
|
|
100%
|
|
|
|||||||
|
|
2016
|
|
2015
|
||||
Cash pooling and general financing activities
|
|
$
|
(73,534
|
)
|
|
$
|
(84,312
|
)
|
Distribution to Honeywell in connection with the Spin-Off
|
|
(269,347
|
)
|
|
—
|
|
||
Net contribution of assets and liabilities upon Spin-Off
|
|
(22,938
|
)
|
|
—
|
|
||
Sales to Honeywell
|
|
(5,955
|
)
|
|
(9,071
|
)
|
||
Purchases from Honeywell
|
|
3,299
|
|
|
4,694
|
|
||
Corporate allocations
|
|
31,877
|
|
|
49,292
|
|
||
Income tax expense
|
|
36,712
|
|
|
36,461
|
|
||
Net decrease in invested equity
|
|
$
|
(299,886
|
)
|
|
$
|
(2,936
|
)
|
|
2017
|
|
2016
|
|
2015
|
||||||
Income (loss) before taxes
|
|
|
|
|
|
|
|
|
|||
U.S
|
$
|
144,499
|
|
|
$
|
55,189
|
|
|
$
|
103,115
|
|
Non-U.S
|
133
|
|
|
(1,414
|
)
|
|
(2,878
|
)
|
|||
|
$
|
144,632
|
|
|
$
|
53,775
|
|
|
$
|
100,237
|
|
|
Years Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Current Provision:
|
|
|
|
|
|
|
|
|
|||
Federal
|
$
|
3,682
|
|
|
$
|
6,875
|
|
|
$
|
23,023
|
|
State
|
1,743
|
|
|
1,290
|
|
|
4,241
|
|
|||
Non-U.S
|
22
|
|
|
(71
|
)
|
|
(716
|
)
|
|||
|
$
|
5,447
|
|
|
$
|
8,094
|
|
|
$
|
26,548
|
|
Deferred Provision:
|
|
|
|
|
|
|
|
|
|||
Federal
|
$
|
(6,824
|
)
|
|
$
|
10,908
|
|
|
$
|
8,372
|
|
State
|
(700
|
)
|
|
638
|
|
|
1,527
|
|
|||
Non-U.S
|
10
|
|
|
(12
|
)
|
|
14
|
|
|||
|
(7,514
|
)
|
|
11,534
|
|
|
9,913
|
|
|||
|
$
|
(2,067
|
)
|
|
$
|
19,628
|
|
|
$
|
36,461
|
|
|
Years Ended December 31,
|
|||||||
|
2017
|
|
2016
|
|
2015
|
|||
U.S. federal statutory income tax rate
|
35.0
|
%
|
|
35.0
|
%
|
|
35.0
|
%
|
2017 Act
|
(36.9
|
)%
|
|
—
|
%
|
|
—
|
%
|
U.S. state income taxes
|
2.6
|
%
|
|
2.3
|
%
|
|
3.7
|
%
|
U.S. state income tax rate change
|
(1.7
|
)%
|
|
—
|
%
|
|
—
|
%
|
Manufacturing incentives
|
(0.3
|
)%
|
|
(1.8
|
)%
|
|
(2.6
|
)%
|
Tax rate differential on non-U.S. earnings
|
—
|
%
|
|
0.8
|
%
|
|
0.3
|
%
|
Other, net
|
(0.1
|
)%
|
|
0.2
|
%
|
|
—
|
|
|
(1.4
|
)%
|
|
36.5
|
%
|
|
36.4
|
%
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
Deferred tax assets:
|
|
|
|
|
|
||
Net Operating Loss
|
$
|
74
|
|
|
$
|
12,560
|
|
Accruals and Reserves
|
1,917
|
|
|
6,772
|
|
||
Inventory
|
—
|
|
|
215
|
|
||
Pension Obligation
|
7,251
|
|
|
13,086
|
|
||
Equity Compensation
|
1,052
|
|
|
513
|
|
||
Other
|
—
|
|
|
28
|
|
||
Total gross deferred tax assets
|
10,294
|
|
|
33,174
|
|
||
Less: Valuation Allowance
|
—
|
|
|
—
|
|
||
Total deferred tax assets
|
$
|
10,294
|
|
|
$
|
33,174
|
|
|
|
|
|
||||
Deferred tax liabilities:
|
|
|
|
|
|
||
Property, plant & equipment
|
$
|
(91,985
|
)
|
|
$
|
(145,712
|
)
|
Intangibles
|
(2,487
|
)
|
|
(1,262
|
)
|
||
Inventory
|
(6,461
|
)
|
|
—
|
|
||
Other
|
(1,637
|
)
|
|
(400
|
)
|
||
Total deferred tax liabilities
|
(102,570
|
)
|
|
(147,374
|
)
|
||
Net deferred taxes
|
$
|
(92,276
|
)
|
|
$
|
(114,200
|
)
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
Accounts receivables
|
$
|
188,477
|
|
|
$
|
119,475
|
|
Other
|
8,936
|
|
|
15,407
|
|
||
|
197,413
|
|
|
134,882
|
|
||
Less – allowance for doubtful accounts
|
(1,410
|
)
|
|
(3,211
|
)
|
||
Total accounts and other receivables – net
|
$
|
196,003
|
|
|
$
|
131,671
|
|
|
Balance at
Beginning of Year |
|
Charged to
Costs and Expenses |
|
Charged to
Other Accounts |
|
Deductions
|
|
Balance at
End of Year |
||||||||||
Year ended December 31, 2017
|
$
|
3,211
|
|
|
$
|
725
|
|
|
$
|
(34
|
)
|
|
$
|
(2,492
|
)
|
|
$
|
1,410
|
|
Year ended December 31, 2016
|
2,875
|
|
|
334
|
|
|
74
|
|
|
(72
|
)
|
|
3,211
|
|
|||||
Year ended December 31, 2015
|
484
|
|
|
2,477
|
|
|
—
|
|
|
(86
|
)
|
|
2,875
|
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
Raw materials
|
$
|
48,502
|
|
|
$
|
68,900
|
|
Work in progress
|
50,511
|
|
|
47,759
|
|
||
Finished goods
|
35,430
|
|
|
19,069
|
|
||
Spares and other
|
23,091
|
|
|
23,129
|
|
||
|
157,534
|
|
|
158,857
|
|
||
Reduction to LIFO cost basis
|
(28,326
|
)
|
|
(29,879
|
)
|
||
Total inventories
|
$
|
129,208
|
|
|
$
|
128,978
|
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
Land and improvements
|
$
|
6,396
|
|
|
$
|
6,396
|
|
Machinery and equipment
|
1,165,304
|
|
|
1,116,758
|
|
||
Buildings and improvements
|
165,612
|
|
|
155,749
|
|
||
Construction in progress
|
75,322
|
|
|
67,829
|
|
||
|
1,412,634
|
|
|
1,346,732
|
|
||
Less – accumulated depreciation
|
(800,022
|
)
|
|
(771,357
|
)
|
||
Total property, plant, equipment – net
|
$
|
612,612
|
|
|
$
|
575,375
|
|
|
December 31,
|
||
2018
|
$
|
32,661
|
|
2019
|
21,002
|
|
|
2020
|
12,488
|
|
|
2021
|
11,780
|
|
|
2022
|
10,628
|
|
|
Thereafter
|
38,213
|
|
|
Total
|
$
|
126,772
|
|
Total term loan outstanding
|
$
|
265,214
|
|
Amounts outstanding under the Revolving Credit Facility
|
—
|
|
|
Total outstanding indebtedness
|
265,214
|
|
|
Less: amounts due within one year
|
16,875
|
|
|
Total long term debt due after one year
|
$
|
248,339
|
|
2018
|
$
|
16,875
|
|
2019
|
27,000
|
|
|
2020
|
27,000
|
|
|
2021
|
195,750
|
|
|
Total
|
$
|
266,625
|
|
Change in benefit obligation:
|
|
|
|
Benefit obligation at January 1, 2017
|
$
|
33,887
|
|
Service Cost
|
7,629
|
|
|
Interest Cost
|
1,333
|
|
|
Actuarial losses (gains)
|
8,190
|
|
|
Benefits Paid
|
(21
|
)
|
|
Benefit obligation at December 31, 2017
|
$
|
51,018
|
|
|
|
|
|
Change in plan assets:
|
|
|
|
Fair value of plan assets at January 1, 2017
|
$
|
—
|
|
Actual return on plan assets
|
592
|
|
|
Benefits paid
|
(21
|
)
|
|
Company contributions during 2017
|
16,750
|
|
|
Fair value of plan assets at December 31, 2017
|
17,321
|
|
|
|
|
||
Funded status of plan
|
$
|
33,697
|
|
|
|
|
|
Amounts recognized in Balance Sheet consists of:
|
|
|
|
Accrued pension liabilities-current (1)
|
$
|
301
|
|
Accrued pension liabilities-noncurrent (2)
|
33,396
|
|
|
Total pension liabilities recognized
|
$
|
33,697
|
|
(1)
|
Included in accrued liabilities on Balance Sheet
|
(2)
|
Included in postretirement benefit obligations on Balance Sheet
|
Transition obligation
|
$
|
—
|
|
Prior service cost
|
—
|
|
|
Net actuarial loss
|
4,743
|
|
|
Pension amounts recognized in other comprehensive loss (income)
|
$
|
4,743
|
|
|
|
Years ended December 31,
|
||||||||||
|
|
2017
|
|
2016
|
|
2015
|
||||||
Net periodic pension cost (benefit)
|
|
|
|
|
|
|
||||||
Service cost
|
|
$
|
7,629
|
|
|
$
|
1,796
|
|
|
$
|
—
|
|
Interest cost
|
|
1,333
|
|
|
315
|
|
|
—
|
|
|||
Expected return on plan assets
|
|
(302
|
)
|
|
—
|
|
|
—
|
|
|||
Recognition of actuarial losses
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Net periodic Pension Cost
|
|
8,660
|
|
|
2,111
|
|
|
—
|
|
|||
Other changes in benefits obligations recognized in other comprehensive loss (income)
|
|
|
|
|
|
|
|
|
|
|||
Actuarial losses (gains)
|
|
7,902
|
|
|
(3,159
|
)
|
|
—
|
|
|||
Total recognized in other comprehensive income
|
|
7,902
|
|
|
(3,159
|
)
|
|
—
|
|
|||
Total net periodic pension cost (benefit) recognized in Other comprehensive income
|
|
$
|
16,562
|
|
|
$
|
(1,048
|
)
|
|
$
|
—
|
|
Key actuarial assumptions used to determine benefit obligations at December 31,
|
2017
|
2016
|
|
|
Effective discount rate for benefit obligation
|
3.9%
|
4.5%
|
|
Expected annual rate of compensation increase
|
2.8%
|
2.8%
|
|
|
|
|
Key actuarial assumptions used to determine the net periodic benefit cost for the years ended December 31,
|
2017
|
2016
|
|
|
Effective discount rate for service cost
|
4.5%
|
3.7%
|
|
Effective discount rate for interest cost
|
4.0%
|
3.6%
|
|
Expected long-term rate of return
|
5.8%
|
5.8%
|
|
Expected annual rate of compensation increase
|
2.8%
|
3.8%
|
2018
|
$
|
302
|
|
2019
|
492
|
|
|
2020
|
702
|
|
|
2021
|
964
|
|
|
2022
|
1,159
|
|
|
2023–2027
|
9,444
|
|
Pension Plan Contributions
|
||||||||
Years ended December 31,
|
||||||||
2017
|
|
2016
|
|
2015
|
||||
$
|
16,750
|
|
|
—
|
|
|
—
|
|
|
|
|
December 31, 2017
|
Cash and cash equivalents
|
|
|
2%
|
US and non-US equity securities
|
|
65%
|
|
Fixed income / real estate / other securities
|
|
33%
|
|
Total Pension Assets
|
|
|
100%
|
|
Fair Value at December 31,
|
||||||||
Fair Value Measurements
|
2017
|
2016
|
2015
|
||||||
Investments valued using NAV per share
|
|
|
|
||||||
Emerging Markets Region Equities
|
$
|
1,090
|
|
$
|
—
|
|
$
|
—
|
|
International Region Equities
|
3,215
|
|
—
|
|
—
|
|
|||
United States Equities
|
7,273
|
|
—
|
|
—
|
|
|||
United States Bonds
|
4,723
|
|
—
|
|
—
|
|
|||
Real Estate
|
872
|
|
—
|
|
—
|
|
|||
Cash Fund
|
148
|
|
—
|
|
|
||||
Total Pension Plan Assets at Fair Value
|
$
|
17,321
|
|
$
|
—
|
|
$
|
—
|
|
Level 1
|
Unadjusted quoted prices in active markets for identical assets or liabilities
|
|
|
Level 2
|
Unadjusted quoted prices in active markets for similar assets or liabilities, or
|
|
|
|
Unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active, or Inputs other than quoted prices that are observable for the asset or liability
|
|
|
Level 3
|
Unobservable inputs for the asset or liability
|
Year
|
Amount
|
||
2018
|
$
|
83,793
|
|
2019
|
46,798
|
|
|
2020
|
37,705
|
|
|
2021
|
37,525
|
|
|
2022
|
17,668
|
|
|
Thereafter
|
90,940
|
|
|
|
$
|
314,429
|
|
|
Currency
Translation Adjustment |
|
Postretirement
Benefit Obligations Adjustment |
|
Changes in
Fair Value of Effective Cash Flow Hedges |
|
Accumulated
Other Comprehensive Income (loss) |
||||||||
Balance at December 31, 2014
|
$
|
(3,762
|
)
|
|
$
|
—
|
|
|
$
|
(1,452
|
)
|
|
$
|
(5,214
|
)
|
Other comprehensive income (loss)
|
(1,390
|
)
|
|
—
|
|
|
2,865
|
|
|
1,475
|
|
||||
Amounts reclassified from accumulated other
comprehensive income (loss) |
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Income tax expense (benefit)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Current period change
|
(1,390
|
)
|
|
—
|
|
|
2,865
|
|
|
1,475
|
|
||||
Balance at December 31, 2015
|
(5,152
|
)
|
|
—
|
|
|
1,413
|
|
|
(3,739
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Other comprehensive income (loss)
|
154
|
|
|
3,159
|
|
|
(1,413
|
)
|
|
1,900
|
|
||||
Amounts reclassified from accumulated other
comprehensive income (loss) |
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Income tax expense (benefit)
|
—
|
|
|
(1,196
|
)
|
|
—
|
|
|
(1,196
|
)
|
||||
Current period change
|
154
|
|
|
1,963
|
|
|
(1,413
|
)
|
|
704
|
|
||||
Balance at December 31, 2016
|
(4,998
|
)
|
|
1,963
|
|
|
—
|
|
|
(3,035
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Other comprehensive income (loss)
|
12
|
|
|
(7,902
|
)
|
|
—
|
|
|
(7,890
|
)
|
||||
Amounts reclassified from accumulated other
comprehensive income (loss) |
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Income tax expense (benefit)
|
—
|
|
|
1,879
|
|
|
—
|
|
|
1,879
|
|
||||
Current period change
|
12
|
|
|
(6,023
|
)
|
|
—
|
|
|
(6,011
|
)
|
||||
Balance at December 31, 2017
|
$
|
(4,986
|
)
|
|
$
|
(4,060
|
)
|
|
$
|
—
|
|
|
$
|
(9,046
|
)
|
|
Years Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Basic
|
|
|
|
|
|
|
|
|
|||
Net Income
|
$
|
146,699
|
|
|
$
|
34,147
|
|
|
$
|
63,776
|
|
|
|
|
|
|
|
||||||
Weighted average common shares outstanding
|
30,482,966
|
|
|
30,482,966
|
|
|
30,482,966
|
|
|||
|
|
|
|
|
|
||||||
EPS – Basic
|
$
|
4.81
|
|
|
$
|
1.12
|
|
|
$
|
2.09
|
|
|
Years Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Diluted
|
|
|
|
|
|
|
|
|
|||
Net Income
|
$
|
146,699
|
|
|
$
|
34,147
|
|
|
$
|
63,776
|
|
|
|
|
|
|
|
||||||
Weighted average common shares outstanding – Basic
|
30,482,966
|
|
|
30,482,966
|
|
|
30,482,966
|
|
|||
|
|
|
|
|
|
||||||
Dilutive effect of unvested equity awards
|
608,635
|
|
|
20,621
|
|
|
—
|
|
|||
|
|
|
|
|
|
||||||
Weighted average common shares outstanding – Diluted
|
31,091,601
|
|
|
30,503,587
|
|
|
30,482,966
|
|
|||
|
|
|
|
|
|
||||||
EPS – Diluted
|
$
|
4.72
|
|
|
$
|
1.12
|
|
|
$
|
2.09
|
|
•
|
On October 3, 2016,
783,159
Restricted stock units ("RSUs") were granted to officers of AdvanSix with
three
-year vesting periods.
|
•
|
On October 3, 2016,
36,564
RSUs were granted to members of our Board of Directors as director compensation with
three
-year vesting periods.
|
•
|
On October 25, 2016, Honeywell RSU awards held by certain of our key employees who would otherwise forfeit prior Honeywell awards as a result of the Spin-Off were issued replacement grants in the amount of
88,817
RSUs with substantially the same vesting schedule as the forfeited awards. Compensation expense for these awards will continue to be recognized ratably over the remaining terms of the unvested awards, which ranged from
18
to
42
months.
|
•
|
On March 8, 2017, the Company granted equity awards representing
333,719
shares of common stock to Company employees consisting of
175,026
stock options,
89,896
performance share units ("PSUs") (at target) and
68,797
RSUs. These equity awards have a per share strike price or grant date fair value per share of
$26.66
with vesting periods ranging from
12
to
36
months.
|
•
|
On June 1, 2017, the Company granted equity awards representing
28,856
shares of common stock to Company employees and the Company's Board of Directors consisting of RSUs. These equity awards have a grant date fair value per share of
$29.25
with vesting periods ranging from
12
to
36
months.
|
|
Number of Restricted
Stock Units (In Thousands) |
|
Weighted Average Grant Date Fair Value (Per Share)
|
|||
Non-vested at October 1, 2016
|
—
|
|
|
$
|
—
|
|
Granted
|
908
|
|
|
16.41
|
|
|
Vested
|
—
|
|
|
—
|
|
|
Forfeited
|
—
|
|
|
—
|
|
|
Non-vested at December 31, 2016
|
908
|
|
|
16.41
|
|
|
Granted
|
98
|
|
|
27.43
|
|
|
Vested
|
—
|
|
|
—
|
|
|
Forfeited
|
(2
|
)
|
|
27.73
|
|
|
Non-vested at December 31, 2017
|
1,004
|
|
|
$
|
17.46
|
|
|
Year Ended December 31, 2017 (In Thousands)
|
Year Ended December 31, 2016 (In Thousands)
|
||||
Compensation expense
|
$
|
6,141
|
|
$
|
1,327
|
|
Future income tax benefit recognized
|
$
|
755
|
|
$
|
513
|
|
|
Year Ended December 31, 2017 (In Thousands)
|
||
Compensation expense
|
$
|
969
|
|
Future income tax benefit recognized
|
$
|
230
|
|
|
Number of Shares (in thousands)
|
|
Weighted Average Exercise Price (per share)
|
|
Weighted Average Remaining Contractual Term (years)
|
|
Aggregate Intrinsic Value (in thousands)
|
||||||
Outstanding at December 31, 2016
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
|
||
Granted
|
175
|
|
|
10.48
|
|
|
|
|
|
||||
Exercised
|
—
|
|
|
—
|
|
|
|
|
|
||||
Forfeited
|
(3
|
)
|
|
10.48
|
|
|
|
|
|
||||
Expired
|
—
|
|
|
—
|
|
|
|
|
|
||||
Outstanding at December 31, 2017
|
172
|
|
|
$
|
10.48
|
|
|
9.31
|
|
|
$
|
5,434
|
|
Exercisable at December 31, 2017
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
|
Number of Performance
Stock Units (In Thousands)
|
|
Weighted Average Grant Date Fair Value (Per Share)
|
|||
Non-vested at December 31, 2016
|
—
|
|
|
$
|
—
|
|
Granted
|
90
|
|
|
26.66
|
|
|
Vested
|
—
|
|
|
—
|
|
|
Forfeited
|
(1
|
)
|
|
26.66
|
|
|
Non-vested at December 31, 2017
|
89
|
|
|
$
|
26.66
|
|
|
Year Ended December 31, 2017 (In Thousands)
|
||
Compensation expense
|
$
|
632
|
|
Future income tax benefit recognized
|
$
|
66
|
|
|
Net Sales
(1)
|
|
Long-lived Assets
(2)
|
||||||||||||||||||||
Years Ended December 31,
|
2017
|
|
2016
|
|
2015
|
|
2017
|
|
2016
|
|
2015
|
||||||||||||
United States
|
$
|
1,189
|
|
|
$
|
976
|
|
|
$
|
957
|
|
|
$
|
613
|
|
|
$
|
575
|
|
|
$
|
527
|
|
International
|
286
|
|
|
216
|
|
|
372
|
|
|
—
|
|
|
—
|
|
|
1
|
|
||||||
Total
|
$
|
1,475
|
|
|
$
|
1,192
|
|
|
$
|
1,329
|
|
|
$
|
613
|
|
|
$
|
575
|
|
|
$
|
528
|
|
(1)
|
International sales represent net sales made to customers outside the U.S.
|
(2)
|
Long-lived assets are comprised of property, plant and equipment – net.
|
|
2017
|
||||||||||||||||||
|
March 31,
|
|
June 30,
|
|
September 30,
|
|
December 31,
|
|
Year Ended December 31,
|
||||||||||
Net Sales
|
$
|
376,704
|
|
|
$
|
361,441
|
|
|
$
|
366,660
|
|
|
$
|
370,389
|
|
|
$
|
1,475,194
|
|
Gross Profit
|
62,587
|
|
|
61,922
|
|
|
57,031
|
|
|
44,640
|
|
|
226,180
|
|
|||||
Net Income (Loss)
|
27,293
|
|
|
25,766
|
|
|
21,274
|
|
|
72,366
|
|
|
146,699
|
|
|||||
Earnings (loss) per share – basic
(a)
|
0.90
|
|
|
0.85
|
|
|
0.70
|
|
|
2.37
|
|
|
4.81
|
|
|||||
Earnings (loss) per share – diluted
(a)
|
0.88
|
|
|
0.83
|
|
|
0.68
|
|
|
2.31
|
|
|
4.72
|
|
|
2016
|
||||||||||||||||||
|
March 31,
|
|
June 30,
|
|
September 30,
|
|
December 31,
|
|
Year Ended December 31,
|
||||||||||
Net Sales
|
$
|
299,830
|
|
|
$
|
308,418
|
|
|
$
|
323,953
|
|
|
$
|
259,323
|
|
|
$
|
1,191,524
|
|
Gross Profit
|
54,271
|
|
|
34,598
|
|
|
38,862
|
|
|
(20,101
|
)
|
|
107,630
|
|
|||||
Net Income (Loss)
|
27,393
|
|
|
15,008
|
|
|
16,460
|
|
|
(24,714
|
)
|
|
34,147
|
|
|||||
Earnings (loss) per share – basic
(a)
|
0.90
|
|
|
0.49
|
|
|
0.54
|
|
|
(0.81
|
)
|
|
1.12
|
|
|||||
Earnings (loss) per share – diluted
(a)
|
0.90
|
|
|
0.49
|
|
|
0.54
|
|
|
(0.81
|
)
|
|
1.12
|
|
(a)
|
On October 1, 2016, the date of consummation of the Spin-Off,
30,482,966
shares of the Company’s common stock were distributed to Honeywell stockholders of record as of September 16, 2016. Basic and Diluted EPS for all periods prior to the Spin-Off reflect the number of distributed shares, or
30,482,966
shares.
|
(a)(1) Consolidated Financial Statements
|
|
Page Number
|
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
|
|
(a)(2) Financial Statement Schedules
|
|
|
None
|
|
|
|
|
|
(a)(3) Exhibits
|
|
|
See the Exhibit Index of this Annual Report on Form 10-K
|
|
|
|
|
ADVANSIX INC.
|
|
|
|
Date: February 27, 2018
|
By:
|
/s/ Michael Preston
|
|
|
Michael Preston
|
|
|
Senior Vice President and Chief Financial Officer
(on behalf of the Registrant and as the Registrant’s Principal Financial Officer)
|
/s/ Erin N. Kane
Erin N. Kane
Chief Executive Officer and Director
(Principal Executive Officer)
|
/s/ Michael L. Marberry
Michael L. Marberry
Independent Chairman of the Board
|
/s/ Paul E. Huck
Paul E. Huck
Director
|
/s/ Darrell K. Hughes
Darrell K. Hughes
Director
|
/s/ Todd D. Karran
Todd D. Karran
Director
|
/s/ Daniel F. Sansone
Daniel F. Sansone
Director
|
/s/ Sharon S. Spurlin
Sharon S. Spurlin
Director
|
|
/s/ Michael Preston
Michael Preston
Senior Vice President and Chief Financial Officer
(Principal Financial Officer)
|
/s/ Christopher Gramm
Christopher Gramm
Vice President and Controller
(Principal Accounting Officer)
|
February 27, 2018
|
|
Exhibit No.
|
Description
|
|
|
2.1
|
|
|
|
3.1
|
|
|
|
3.2
|
|
|
|
10.1
|
|
|
|
10.2
|
|
|
|
10.3
|
|
|
|
10.4
|
|
|
|
10.5
|
|
|
|
10.6
|
|
|
|
10.7
|
|
|
|
10.8
|
|
|
|
10.9
|
|
|
|
10.10
|
|
|
|
10.11
|
Exhibit No.
|
Description
|
|
|
10.12
|
|
|
|
10.13
|
|
|
|
10.14
|
|
|
|
10.15
|
|
|
|
10.16
|
|
|
|
10.17
|
|
|
|
10.18
|
|
|
|
10.19
|
|
|
|
10.20
|
|
|
|
10.21
|
|
|
|
10.22
|
|
|
|
10.23
|
|
|
|
10.24
|
|
|
|
10.25
|
|
|
|
10.26
|
|
|
|
Exhibit No.
|
Description
|
|
|
10.27
|
|
|
|
10.28
|
|
|
|
10.29
|
|
|
|
21.1
|
|
|
|
23.1
|
|
|
|
24
|
|
|
|
31.1
|
|
|
|
31.2
|
|
|
|
32.1
|
|
|
|
32.2
|
|
|
|
99.1
|
|
|
|
99.2
|
|
|
|
99.3
|
|
|
|
101.INS
|
XBRL Instance Document
|
|
|
101.SCH
|
XBRL Taxonomy Extension Schema
|
|
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase
|
|
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase
|
|
|
101.LAB
|
XBRL Taxonomy Extension Label Linkbase
|
|
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase
|
|
†
|
Indicates management contract or compensatory plan.
|
|
|
|
|
*
|
Confidential treatment has been granted for certain information contained in Exhibits 10.21, 10.22, 10.23, 10.24, 10,25, 10.26 and 10.27, and the omitted portions have been filed separately with the SEC. Portions of Exhibit 10.28 and 10.29 have been omitted pursuant to a request for confidential treatment, and the omitted portions have been filed separately with the SEC.
|
ADVANSIX RESINS & CHEMICALS LLC
|
|
SHAW INDUSTRIES GROUP, INC.
|
|
|
|
|
|
|
By:
/s/ Erin Kane
|
|
By:
/s/ David Morgan
|
Erin Kane
|
|
David Morgan
|
President
|
|
Executive Vice President Operations
|
1.
|
Section 1.2 (c) of the Agreement is deleted in its entirety, and inserted in lieu thereof is a new Section 1.2 (c), as follows:
|
2.
|
Section 2.1 of the Agreement is amended by adding the following to the end of Section 2.1 as follows:
|
3.
|
All capitalized terms used, but not defined, herein shall have the meaning set forth in the Agreement.
|
4.
|
This Amendment may be executed in counterparts, each of which shall be deemed an original but all of which shall constitute one and the same agreement.
|
5.
|
Except as expressly modified in this Amendment, the Agreement remains in full force and effect. The Agreement and this Amendment together constitute the entire agreement between the Parties with respect to the subject matter hereof, and supersede all prior agreements or understandings between the Parties as to the subject matter hereof.
|
ADVANSIX RESINS & CHEMICALS LLC
|
|
SHAW INDUSTRIES GROUP, INC.
|
|
|
|
|
|
|
By:
/s/ Erin Kane
|
|
By:
/s/ David Morgan
|
Erin Kane
|
|
David Morgan
|
President
|
|
Executive Vice President Operations
|
1.
|
I have reviewed this Annual Report on Form 10-K of AdvanSix Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report.
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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a.
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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b.
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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/s/ Erin N. Kane
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Erin N. Kane
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President and Chief Executive Officer
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1.
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I have reviewed this Annual Report on Form 10-K of AdvanSix Inc.;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report.
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4.
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The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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a.
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b.
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c.
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d.
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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/s/ Michael Preston
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|
|
Michael Preston
|
|
|
Chief Financial Officer
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|
1.
|
the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as
|
2.
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of
|
|
/s/ Erin N. Kane
|
|
|
Erin N. Kane
|
|
|
President and Chief Executive Officer
|
|
1.
|
the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as
|
2.
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of
|
|
/s/ Michael Preston
|
|
|
Michael Preston
|
|
|
Chief Financial Officer
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|