- AdvanSix Inc ASIX reported fourth-quarter FY21 sales growth of 24.6% year-over-year to $424.06 million, beating the consensus of $408.30 million.
- The sales increase was driven by a 25% favorable impact of market-based pricing and 12% higher raw material pass-through pricing, partially offset by lower volume.
- Sales volume in the quarter decreased ~12% driven primarily by the impact of the planned plant turnaround and strong operational performance in the prior-year period.
- Sales by segments: Nylon $105.29 million (+31.7% Y/Y), Caprolactam $73.67 million (+15.7% Y/Y), Chemical Intermediates $127.86 million (+7.6% Y/Y) and Ammonium Sulfate $117.24 million (+50.7% Y/Y).
- EPS decreased to $0.80 compared to $0.94 in 4Q20, missing the consensus of $0.81.
- EBITDA increased to $49.29 million (+1.6% Y/Y), and the margin contracted by 263 bps to 11.6%.
- AdvanSix generated cash from operating activities of $218.85 million in FY21, compared to $111.85 million a year ago. Free cash flow was $162.04 million. It held cash and equivalents of $15.1 million.
- Dividend: The company declared a quarterly cash dividend of $0.125 per share, payable on March 15, 2022, to stockholders of record on March 1, 2022.
- Acquisition: The company agreed to acquire U.S. Amines in an all-cash transaction for ~$100 million.
- U.S. Amines employs ~50 people in the U.S. at Bucks, Alabama, and Portsmouth, Virginia. Estimated 2022 revenue for the business is ~$70 million.
- The company expects the acquisition to close in Q1 of 2022 and accretive to 2022 earnings.
- FY22 Outlook: The company expects strong demand for nylon and chemical intermediates to continue in North America. The company targets significant earnings growth in 2022.
- Price Action: ASIX shares are trading lower by 11% at $36.63 on the last check Friday.
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