AdvanSix Inc. recently released its 10-K report, detailing its operations in the manufacture and sale of polymer resins, caprolactam, ammonium sulfate fertilizers, and acetone. The company's products are utilized in various industries such as textiles, engineered plastics, industrial filament, food and industrial films, and carpet.
In 2024, AdvanSix reported sales of $1,517,557, a 1% decrease from the previous year. This decline was primarily due to decreased volume, driven by lost sales resulting from operational disruptions at its manufacturing sites in Pennsylvania and Virginia. The cost of goods sold remained flat in 2024 compared to 2023, primarily due to increased prices of raw materials and increased plant costs, mitigated by decreased sales volume. The gross margin percentage decreased by approximately 1% in 2024 compared to 2023 due to the impact of market-based pricing, net of raw material costs, and increased plant costs.
Selling, general and administrative expenses decreased in 2024 compared to 2023 by approximately 2%, due primarily to moderated functional support costs and legal spend, partially offset by increased enterprise resource planning system expense. Interest expense, net, increased by approximately 51% in 2024 compared to 2023 due primarily to higher debt balances.
The company's effective income tax rate for 2024 was significantly less than the U.S. Federal statutory rate of 21% due to approximately $9.7 million in income tax benefits associated with prior year refund claims, specifically related to Internal Revenue Code (IRC) Section 45Q tax credits generated in the 2018 and 2019 tax periods. The company continues to pursue credits for the periods subsequent to 2019.
AdvanSix also faced operational disruptions at its manufacturing sites in Pennsylvania and Virginia, resulting in an unfavorable impact on pre-tax income of approximately $27 million in the first quarter of 2024 and an incremental unfavorable impact of approximately $17 million in the fourth quarter of 2024.
Furthermore, the company faced challenges due to the shut down of Philadelphia Energy Solutions’ refinery in 2019, one of its suppliers of cumene, a feedstock material used to produce phenol, acetone, and other chemical intermediates. The company received insurance settlement proceeds of approximately $26 million in the first quarter of 2025, bringing the total aggregate insurance proceeds since the original claim submission to approximately $39 million.
As a result of these announcements, the company's shares have moved 1.6% on the market, and are now trading at a price of $29.77. For the full picture, make sure to review AdvanSix's 10-K report.
