AdvanSix Inc Q1 2025 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: David Silver - C.L. King & Associates - Analyst : Yeah, hi, good morning. Good morning. Yeah, so -- and I'm sorry, I have -- I can't read my own handwriting here, sorry. I would like to maybe just pick up on, I guess, Sidd's comments or both of your comments regarding tactical moves that are preparing for uncertainty. And in particular, I guess, your company had a playbook of some sort as of a few years ago tied to pandemic pressures. And while it's not a perfect guide, I'm assuming there is a few pages that you could have pulled from that earlier book -- playbook for use here. But just in particular, Erin, you talked about things you can control. And is this a period where as a company, you want to maybe increase or selectively build up inventories and strategic inputs, or maybe any other concrete steps that you're thinking of? And then for Sidd, you did mention cash flow and managing cash. Is this kind of an opportunity to increase borrowing capability or gaining more financial flexibility that way? I'll stop there. Thank you.

Question: David Silver - C.L. King & Associates - Analyst : Okay. Thank you for that. I would want to follow up, I guess, on one input, and that would be sulfur. My -- just my history with it is that I'm always worried at times like this when the supply might be constrained by an economic slowdown while agricultural demand remains steady or even better. How concerned are you or what steps can you take to ensure not necessarily -- I'm not interested in the particular price that will find its own level. But can you take steps to increase your assurance of supply? In a pinch, could you substitute purchased sulfuric acid for purchases of elemental sulfur? Just what's the flexibility in your system just to ensure that the sulfur side of your input requirements are covered?

Question: David Silver - C.L. King & Associates - Analyst : Okay. Great. Thank you for that. I did have a question about ammonium sulfate and the outlook there. I mean, I do think the fundamentals have been very healthy for a little while here domestically. I am thinking a little bit about that post-spring demand outlook. Have you kind of been getting inquiries -- just given the relatively firm fundamentals there, have you been getting inquiries from overseas? Or are you adjusting your strategies as a result of the profit opportunities? Just how are you thinking about the post-spring demand and deployment of your -- demand for and deployment of your ammonium sulfate products?

Question: David Silver - C.L. King & Associates - Analyst : Okay. Very good. I did have a question on the nylon side here. And I'm making reference to your comments in the press release regarding kind of positioning yourself for a more protracted period of, I guess, softer demand. Could you just qualitatively kind of discuss how you plan to maybe shift your marketing emphasis to adapt to the more protracted period of demand weakness that you're citing?

Question: David Silver - C.L. King & Associates - Analyst : Okay. And then last one from me. But I did notice in your talk -- in your discussion in the slide covering your chemical intermediates unit, you did cite patent infringement proceedings regarding your EZ-BLOX additives. And just wondering if you could discuss that a little bit, I mean, I guess, just sticking to what's publicly available. But just maybe if you could kind of characterize this -- well, first of all, congratulations for having a product that people want to poach your technology from. But separately, it says Europe here, but I'm kind of scratching my head and wondering where the source of the infringement originated. But anyway, maybe if you could just share a brief overview of that and then your expectations for how the infringement proceedings might progress. Thank you.

Question: David Silver - C.L. King & Associates - Analyst : Okay, that's great. Thank you very much. I appreciate all the color.

Question: Charles Neivert - Piper Sandler Companies - Analyst : Good morning, everybody. Just a few questions. One, on the nylon side, China obviously has some position here in the US. And assuming some level of tariff exists, do you guys anticipate, A, being able to pick up some market share from the fact that their product is going to become a lot more expensive? And from what they do bring in, how does that -- might that affect your share -- I mean, your -- excuse me, your product mix? I mean, if they're bringing in carpet, you're going to get carpet business. If they're bringing in other resins, you're going to get the other resin business? Or is there something you guys are going to be doing to sort of adjust product mix based on changes due to the potential for some tariffs on that front. And then by the same token, you guys have talked as well about your own export to domestic mix and at times, has affected earnings. Where are we today? And do you anticipate that changing over the next, let's say, six months or a year if the significant tariffs come into place?

Question: Charles Neivert - Piper Sandler Companies - Analyst : Got it. Okay. And on the ammonium sulfate side, obviously, you talked about the higher acreages that are going in. You've got a little bit of an early start to the year, I guess, which is good, which means potentially it ends a little earlier. I think you mentioned that as sort of late June might be some tail off. But I mean, given the acreages, given the pricing for corn, are you guys seeing like -- and volumes are up, but it's sort of hard to measure whether it's just a timing thing. But does it look like volume over the course of the season is going to be substantially higher given the acreage? And are you seeing any more like a higher application rate on the acres that you're selling into?

Question: Charles Neivert - Piper Sandler Companies - Analyst : Then last question is -- on the CapEx side, you said after '25 you sort of hit peak, then you start winding down a little bit '26, '27 as some of these projects complete. But if you're looking at a total spend between CapEx plus the opportunity stuff that you also talk about, does that mean we have, for lack of a better term, assuming that we don't have any real serious earnings issues, that we've got actually more to spend on those opportunistic type of acquisitions? And does the pipeline -- given the current situation, does the pipeline for acquisition look a little better right now, I mean, just in terms of what might be out there? And obviously, again, if you're spending less, you may have more to get there if those things become available. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 02, 2025 / 1:30PM, ASIX.N - Q1 2025 AdvanSix Inc Earnings Call

Question: Charles Neivert - Piper Sandler Companies - Analyst : Okay. Well, that's it from my end. Thanks.