What changed in this filing

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Item 1. Business

2023-02-17 compared with 2022-02-18 · 109 added, 114 removed, 302 unchanged (42% of the section changed)

In this Annual Report on Form 10-K, unless the context otherwise dictates, “AdvanSix”, the “Company”, “we” or “our” means AdvanSix Inc.

In this Annual Report on Form 10-K, unless the context otherwise dictates, “AdvanSix,” the “Company,” “we,” “us” or “our” means AdvanSix Inc.

and its consolidated subsidiaries.

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(“Honeywell”) completed the separation of AdvanSix.

The separation was completed by Honeywell distributing (the "Distribution") all of the then outstanding shares of common stock of AdvanSix on October 1, 2016 (the “Distribution Date”) through a dividend in kind of AdvanSix common stock, par value $0.01 per share, to holders of Honeywell common stock as of the close of business on the record date of September 16, 2016 who held their shares through the Distribution Date (the “Spin-Off”).

Description of Business

AdvanSix Inc.

plays a critical role in global supply chains, innovating and delivering essential products for our customers in a wide variety of end markets and applications that touch people’s lives, such as building and construction, fertilizers, plastics, solvents, packaging, paints, coatings, adhesives and electronics.

Our reliable and sustainable supply of quality products emerges from the vertically integrated value chain of our three U.S.-based manufacturing facilities.

plays a critical role in global supply chains, innovating and delivering essential products for our customers in a wide variety of end markets and applications that touch people’s lives, such as building and construction, fertilizers, agrochemicals, plastics, solvents, packaging, paints, coatings, adhesives and electronics.

Our reliable and sustainable supply of quality products emerges from the integrated value chain of our five U.S.-based manufacturing facilities.

AdvanSix strives to deliver best-in-class customer experiences and differentiated products in the industries of nylon solutions, chemical intermediates and plant nutrients, guided by our core values of Safety, Integrity, Accountability and Respect.

Our four key product lines are as follows :

• Nylon – We sell our Nylon 6 resin globally, primarily under the Aegis® brand name.

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, packaging, including food packaging, and other industrial applications.

In addition, our Nylon 6 resin is used to produce nylon films which we sell to our customers primarily under the Capran® brand name.

• Nylon – 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, packaging, including food packaging, and other industrial applications including wire and cable.

We sell our Nylon 6 resin globally, primarily under the Aegis® brand name.

In addition, our Nylon 6 resin is used to produce nylon films through our Oben Alliance which we sell to our customers primarily under the Capran® brand name.

• Caprolactam – Caprolactam is the key monomer used in the production of Nylon 6 resin.

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Our Hopewell manufacturing facility is one of the world’s largest single-site producers of caprolactam as of December 31, 2022.

• 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.

• 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 and as a result of the acquisition of U.S.

Amines Limited (“U.S.

Amines”) in 2022.

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, oximes (methyl ethyl ketoxime, acetaldehyde oxime and 2-pentanone oxime), cyclohexanol, sulfuric acid, ammonia and carbon dioxide.

Other intermediate chemicals that we manufacture, market and sell include phenol, alkyl and specialty amines including monoisopropylamine, dipropylamine, and monoallylamine, alpha-methylstyrene (“AMS”), cyclohexanone, oximes (methyl ethyl ketoxime, acetaldehyde oxime and 2-pentanone oxime), cyclohexanol, sulfuric acid, ammonia and carbon dioxide.

• Ammonium Sulfate – Our ammonium sulfate is used by customers as a fertilizer containing nitrogen and sulfur, two key plant nutrients, as an herbicide adjuvant for crop protection, and in several industrial applications.

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For information concerning revenues and assets by geographic region, see “Note 3.

Revenue” to our Consolidated Financial Statements included in this Form 10-K, which is incorporated herein by reference.

Revenue” to our Consolidated Financial Statements included in Item 8 of this Form 10-K, which is incorporated herein by reference.

Our manufacturing process is vertically integrated.

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The majority of the phenol we manufacture is further processed at our Hopewell facility through an integrated series of unit operations, which also consume natural gas and sulfur, to produce caprolactam and ammonium sulfate.

In 2021, approximately 56% of the caprolactam we have produced at our facility in Hopewell, Virginia has been shipped to our facility in Chesterfield, Virginia where it has been polymerized into Aegis® Nylon 6 resins.

Our integrated manufacturing process, scale and the quantity and range of our products make us one of the most reliable and efficient manufacturers in our industry.

In 2022, approximately 57% 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.

Amines, which has two manufacturing facilities located in Bucks, Alabama and Portsmouth, Virginia.

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.

We consistently focus on and invest in improving production yields from our various manufacturing processes to build on our leading cost position.

Our global logistics infrastructure enables a reliable intra-plant supply chain and consistent and timely delivery to our customers.

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.

Our logistics infrastructure enables a reliable intra-plant supply chain and consistent and timely delivery to our customers.

enable us to attract price premiums and greater demand.

In February 2022, we successfully completed our second acquisition with the U.S.

Amines purchase, adding alkly and allyl amine chemistry to our value chains.

We serve approximately 400 customers globally located in approximately 50 countries.

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For the years ended December 31, 2022, 2021 and 2020, our international sales were $323 million, $302 million and $267 million, respectively.

AdvanSix is a single operating segment and a single reportable segment, operating through three integrated U.S.-based manufacturing sites located in Frankford, Pennsylvania and Hopewell and Chesterfield, Virginia.

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.

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It also allows us to remain flexible, while optimizing sales from our diverse portfolio of products.

Second, we operate one of the world’s largest single-site caprolactam and ammonium sulfate production facilities, which is a competitive advantage in our fragmented industry.

Our scale provides operating leverage and the opportunity to achieve stronger business performance than our competitors in several ways.

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, as well as benefiting our procurement activities for raw materials and services.

In addition, we believe that our size and scale serves to retain and attract customers who prioritize security of supply.

Third, the location of our manufacturing operations in the United States affords us access to the world’s lowest cost natural gas, which is a key raw material needed to manufacture the ammonia used in the production of caprolactam and ammonium sulfate as well as the source of energy for our manufacturing operations.

Second, we operate one of the world’s largest single-site caprolactam and ammonium sulfate production facilities, which is a competitive advantage in our globally, fragmented industry.

Our scale provides operating and purchasing leverage and the opportunity to achieve stronger business performance than our competitors in several ways.

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.

Third, the location of our manufacturing operations in the United States affords us access to low-cost natural gas, which is a key raw material needed to manufacture the ammonia used in the production of caprolactam and ammonium sulfate as well as the source of energy for our manufacturing operations.

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.

Finally, our long-term customer relationships and contracts enable us to maintain high plant utilization rates, which, along with our large scale, provide significant operating and purchasing leverage.

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 Fertilizer, Acetone and Other Chemical Intermediates.

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Most significantly, for every pound of caprolactam produced, we produce approximately four pounds of ammonium sulfate, a fertilizer used by farmers around the world.

For the past two decades, we have employed agronomists to educate growers and retailers in the Americas on the yield value of using ammonium sulfate fertilizer on key crops including corn, wheat, coffee, sugar, cotton and rice.

We have also diversified and optimized our ammonium sulfate-based offerings to include spray-grade adjuvant to support crop protection, as well as other specialty fertilizers and products for industrial use.

For many decades, we have employed agronomists to educate growers and retailers in the Americas on the yield value of using ammonium sulfate fertilizer on key crops including corn, wheat, coffee, sugar, cotton and rice.

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 2022 were $629 million and represented 33% of our total sales.

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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 recent acquisition of U.S.

Amines enables further diversification into agrochemical intermediates, water treatment and pharmaceuticals.

Global Reach.

The global reach of our sales and marketing capabilities enables us to compete everywhere nylon resin, caprolactam, ammonium sulfate and chemical intermediates are consumed.

Our cost position, business model, and sales and marketing capabilities enable us to compete globally where nylon resin, caprolactam, ammonium sulfate and chemical intermediates are consumed.

In 2022, approximately 17% of our sales were outside the United States.

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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.

We have a Research and Development ("R&D") department consisting 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 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 R&D team has expanded our capabilities to test and scale production of copolymer Nylon 6/66 resin, which is used in food packaging films and other applications.

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.

Further, members of our technical

marketing team, representing each of our major product lines, present at various industry events and conferences to demonstrate our breadth of product offerings and capabilities.

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.

Further, members of our technical marketing team, representing each of our major product lines, present at various industry events and conferences to demonstrate our breadth of product offerings and capabilities.

Business Strategies

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• 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;

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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.

Over the past several years, we have invested in capabilities to strengthen our innovation, increase the value of our product portfolio and meet customer specifications in certain high value industries including high-purity applications, high-value intermediates and differentiated nylon.

We have had successes across the portfolio including our oximes-based EZ-Blox® anti-skinning agent used in paints and coatings, and our Nadone® cyclohexanone product line, which is a solvent used in various high-value applications.

Growing off a small base, we have also seen commercial success with our Nylon-based wire and cable offerings.

Supporting our differentiated nylon portfolio, our Chesterfield facility is capable of producing multiple grades of higher value Nylon 6 resin as well as copolymer Nylon 6/66 resin, which are used in engineered plastics for the automotive industry, films for food packaging, as well as other higher value applications.

Our customers typically buy nylon resin and caprolactam for compounding or extruding with additives and other materials, to increase strength or flexibility or to add color to make the resin more suitable for use in their end products such as textiles, packaging and industrial materials.

Growing off a small base, we have also seen commercial success with our Nylon-based wire and cable offerings as well as copolymer Nylon 6/66 resin, which are used in engineered plastics for the automotive industry, films for food packaging, as well as other higher value applications.

We leverage our R&D investments, customer intimacy and knowledge of product applications to develop new resin products to better serve our customers and increase the value of our resin products portfolio.

For example, engineered plastics that utilize Nylon 6 and Nylon 66 resin are being increasingly used in automobiles to reduce weight as automobile manufacturers strive to meet stricter fuel efficiency standards.

We work with our customers serving this market to develop resin products specifically tailored for these product applications.

We are focused on working with customers to solve their needs with respect to sustainability and have received commercial orders for our recently launched 100% Post-Industrial Recycled resins and films.

Another focus of our R&D initiatives includes nylon resin processing technologies that can produce existing high value resins at lower costs.

We are focused on working with customers to solve their needs with respect to sustainability and have received commercial orders for our 100% Post-Industrial Recycled resins and films.

Our R&D team works with existing and potential customers to understand end-use applications, build application development capabilities and protect the value proposition of our new products.

In addition, as a result of recent efforts and enhancements in crystallizer technology and operations, we are now producing more high-quality granular grade ammonium sulfate to meet the growing demand of our customers.

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 to meet the growing demand of our customers.

Strong Capital Stewardship.

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and we initiated a structural return of cash in the form of a quarterly dividend reflecting confidence in our cash flow generation.

The timing, declaration, amount and payment of dividends to stockholders, if any, will fall within the sole discretion of our Board of Directors (the "Board").

We continued to mature and enhance our capital deployment in 2022 with the acquisition of U.S.

Amines, an increase in capital expenditures, and return of cash to shareholders through share repurchases and an increase of our quarterly dividend.

The timing, declaration, amount and payment of dividends to stockholders, if any, will be within the sole discretion of our Board of Directors (the "Board").

Industry Overview

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Generally, Nylon 6 resin prices track the cyclicality of caprolactam prices, although prices set above the spread are achievable when nylon resin manufacturers, like AdvanSix, formulate and produce differentiated nylon resin products.

Our differentiated Nylon 6 products are

typically valued at a higher level than commodity resin products.

We believe that Nylon 6 end-market growth will continue to generally track global GDP over the long-term.

Our differentiated Nylon 6 products are typically valued at a higher level than commodity resin products.

We believe that Nylon 6 end-market growth will continue to

generally track global GDP over the long-term.

Carpet is the largest end-use for Nylon 6 in North America and has seen stable to declining demand growth in recent years reflecting shifts in consumer preferences to hard flooring versus soft and the previous substitution to lower-cost polyester.

The housing sector had seen an improving trend in recent years, however, residential construction markets slowed in 2022 reflecting the rise in interest rates.

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.

We have seen some recovery in commercial construction growth, which had lagged residential in recent years.

Applications such as engineered plastics and packaging have potential to grow at faster rates given certain macrotrends.

Additionally, one of our strategies is to continue developing higher-value, differentiated Nylon 6 products, such as our wire and cable, Post-Industrial Recycled resins and films and co-polymer offerings, in current and new customer applications.

The global market for Nylon 6 resin and caprolactam has undergone significant change over the past decade.

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As a result of the increased capacity and competitive intensity, industry margins for Nylon 6 resin and caprolactam compressed over this period to a low point in mid-2016.

In the second half of 2016, capacity reductions by our competitors occurred in North America and Europe improving supply / demand fundamentals in North America with continued dynamic conditions globally.

In the second half of 2016, capacity reductions by our competitors occurred in North America and Europe improved supply / demand fundamentals in North America while conditions globally remained dynamic.

Industry spreads had fluctuated near marginal producer cost since 2016, but, slowing global growth and soft end-market demand, combined with capacity increases and an uncertain macro environment, pressured pricing and spreads during the second half of 2019 and throughout 2020.

In 2021, strong end use demand, combined with industry operational upsets and supply chain disruptions, created an environment for robust performance in Nylon 6.

Additionally, buyers have explored using Nylon 6 as a substitution for other resins where applications allow, based on the need for reliable, secure long-term supply and performance needs.

Nylon end-uses are sensitive to consumer demand, which was softer overall through 2022, particularly in consumer durables and residential end markets.

However, buyers have explored using Nylon 6 as a substitute for other resins where applications allow, based on the need for reliable, secure long-term supply and performance needs.

Chemical Intermediates.

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The primary products are acetone, phenol, AMS and cyclohexanone.

With the acquisition of U.S.

Amines in the first quarter of 2022, we have expanded our end markets to include agrochemical, water treatment and pharmaceutical applications with the addition of a range of alkyl and specialty amines.

Acetone and phenol represent approximately 44% and 12%, respectively, of our chemical intermediates sales.

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declined through 2020 and 2021, creating more favorable supply and demand conditions for the product and improved pricing.

Industry operating rates improved in the second half of 2021 supporting a balancing of supply and demand and moderation in acetone industry spreads relative to recent highs.

Supply and demand conditions for the remaining intermediates we sell are generally balanced or favorable.

Generally, industry operating rates in 2022 declined with a reduction in global downstream demand.

During 2022 supply and demand of acetone was balanced in the U.S.

with lower imports along with falling input propylene raw material costs, supporting favorable acetone industry margins.

We also saw strong demand for Alpha-methyl styrene ("AMS") as a result of lower global production output.

Supply and demand conditions for the remaining intermediates began to soften in the latter part of 2022 in line with overall weaker demand and reduced industry output.

Plant Nutrients.

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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.

During 2020, we expanded our offering to directly supply packaged ammonium sulfate to customers, primarily in North and South America, and diversified and optimized our offerings to include spray-grade adjuvant to support crop protection, as well as other specialty fertilizers and products for industrial use.

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 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.

Competition across our product offerings is based on a variety of factors including price, reliability of supply, product innovation, and quality.

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While the competitive position of our individual products varies, we believe we are a significant competitor in each major product class.

AdvanSix competes with integrated manufacturers, such as Highsun Group Holdings Ltd., BASF Corporation, Sinopec Limited, DOMO Chemicals GmbH, LANXESS AG and Ube Industries, Ltd.

AdvanSix competes with integrated manufacturers, such as Highsun Group Holdings Ltd., BASF Corporation, Sinopec Limited, DOMO Chemicals GmbH, LANXESS AG and UBE Corporation.

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 and Altivia.

and stand-alone phenol and acetone producers, such as INEOS Phenol and Altivia.

A number of our products are sold in markets with many competitors, some of whom have substantial financial resources and significant technological capabilities.

Additionally, our competitors include companies with global operations as well as those operating only within specific geographic regions.

Additionally, our competitors include companies with global operations as well as

those operating only within specific geographic regions.

Amines business, the key alkyl amines U.S.

based competitor is Eastman Chemical Company.

Product Overview

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We sell our Nylon 6 resin globally, primarily under the Aegis® brand name.

In addition, we sell our Nylon 6 resin to a nylon film producer from whom we purchase films to sell to our customers under the

Capran® brand name.

In addition, our Nylon 6 resin is used to produce nylon films through our Oben alliance which we sell to our customers under the Capran® brand name.

In 2022, our Nylon products generated $485 million of sales.

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We produce and sell chemical intermediates to a range of customers for use in many different types of end-products.

In 2021, our chemical intermediates generated $545 million of sales, of which $443 million, or 81%, came from sales of acetone, phenol and cyclohexanone, and $102 million, or 19%, came from sales of our other chemical intermediates.

In 2022, our chemical intermediates generated $512 million of sales, of which $349 million, or 68%, came from sales of acetone, phenol and cyclohexanone, and $163 million, or 32%, came from sales of our other chemical intermediates, including a range of alkyl and specialty amines.

In 2022, 2021 and 2020, sales of chemical intermediates were 26%, 32% and 32% of our total sales, respectively.

The phenol we produce at our Frankford plant is a key chemical intermediate used in our caprolactam manufacturing process.

Approximately 80% of the phenol we produce is used in production of caprolactam and other chemical intermediates at Hopewell, and approximately 20% of our phenol is sold to customers for use in their product applications such as resins, epoxies and Bisphenol A.

Approximately 88% of the phenol we produce is used in production of caprolactam and other chemical intermediates at Hopewell, and approximately 12% of our phenol is sold to customers for use in their product applications such as phenolic resins, epoxies and Bisphenol A.

All our acetone is sold to customers for use in end-products such as adhesives, paints, coatings, solvents, herbicides and engineered plastic resins.

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We use some of these products in our manufacturing process and sell some to customers for use in end-products such as resins, inks, paints, coatings and agricultural chemical intermediates and electronic components.

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.

Ammonium Sulfate

Ammonium sulfate fertilizer is produced simultaneously with caprolactam as part of our integrated caprolactam manufacturing process at our Hopewell plant.

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.

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Global supply and demand can significantly impact the price of our key raw materials, and historically prices have been cyclical.

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.

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.

Sales, Marketing and Distribution

We have a global sales force with long-standing customer relationships and deep expertise with our products, product applications and end-markets.

We have a sales force with global reach, long-standing customer relationships and deep expertise with our products, product applications and end-markets.

We predominantly sell directly to our customers, primarily under contracts but also through spot transactions under purchase orders and through distributors.

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We believe success in our industry is driven not only by operational excellence and cost position but also through technological strength and innovation.

Our R&D activities focus on improving our chemical manufacturing processes to increase efficiency, capacity, productivity, and lowering our production and operating costs, as well as innovating and developing new product applications.

Our R&D activities focus on improving our chemical manufacturing processes to increase efficiency, capacity and productivity, lower production and operating costs, and innovate and develop new product applications.

We benefit from numerous patents and trademarks that we own.

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We intend to continue taking steps as necessary to protect our intellectual property, including when appropriate, filing patent applications for inventions that are deemed important to our business.

In 2021, we conducted R&D at technology centers with researchers at our sites in Frankford, Pennsylvania and Chesterfield, Virginia where our former Colonial Heights R&D facility relocated in early 2020 enabling an improved configuration of our labs to drive productivity, increased connectivity with our resin manufacturing and more effective collaboration with customers.

We conduct R&D at technology centers with researchers at our manufacturing sites in Frankford, Pennsylvania and Chesterfield, Virginia.

Regulation and Environmental Matters

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Summary of Significant Accounting Policies” to the audited Consolidated Financial Statements included in this Form 10-K.

We continuously seek to improve our health, safety and

environmental performance.

We continuously seek to improve our health, safety and environmental performance.

We have expended funds to comply with environmental laws and regulations and expect to continue to do so.

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As a result, we are required to comply with numerous regulations administered by the Department of Homeland Security, including the development and implementation of compliant security procedures and protocols.

Additionally, sales of acetone, which is a List II Chemical under the TSCA, are regulated by the Drug Enforcement Act.

This classification subjects us to audits by the Drug Enforcement Administration and ongoing restrictions on our sales activities with respect to acetone.

Additionally, sales of certain of our products such as acetone and amines, which may implicate List II or other considerations under the Drug Enforcement Act.

Such classifications subject us to further compliance audits by the relevant federal and state agencies and place ongoing restrictions on our sales activities.

See “Risk Factors – 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 Item 1A.

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As noted in their respective charters:

• Our Health, Safety, Environmental and Sustainability Committee oversees policies and programs relating to compliance with health, safety, environmental, and sustainability matters, including process safety, supply chain security, asset reliability, product stewardship, community engagement and government affairs, as well as such other matters regarding the Company’s role as a responsible corporate citizen.

• Our Nominating and Governance Committee annually evaluates the effectiveness of our governance framework and social responsibility policies, goals and programs.

• Our Health, Safety, and Environmental Committee oversees policies and programs relating to health, safety, and environmental (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.

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As an organization, we maintain a relentless focus on continuous improvement and our expectation is zero injuries for employees and contractors.

Our CARE program — Courage to Act, Respond and Engage — was launched in 2019 and inspires us to Live Safety in

Our CARE program — Courage to Act, Respond and Engage — was launched in 2019 and inspires us to Live Safety in all we do.

We use the industry standard Total Case Incident Rate ("TCIR") to measure our ongoing safety performance and compare with benchmarks.

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Our TCIR was 1.15 in 2022, 0.48 in 2021 and 0.91 in 2020.

In the first quarter of 2020, the Company began executing its business continuity plans with dedicated teams chartered to proactively implement measures to mitigate COVID-19 impacts while continuing to operate all of its manufacturing facilities to meet customer demand.

In response to COVID-19, the Company took many actions to protect its employees, customers, suppliers, shareholders and surrounding communities including, but not limited to:

(i) 100% thermal screening process at all facilities and restrictions on non-essential visitors;

(ii) telecommuting across all sites, where possible;

(iii) prohibiting all non-essential domestic and international business travel;

(iv) establishing social distancing while limiting the number of employees in control rooms, labs and in-person meetings;

and (v) maintaining policies and practices consistent with CDC and government guidelines including upgraded personal protective equipment, face coverings at all facilities, and exposure management protocols.

Our telecommuting policies have been designed to allow for continued operation of non-production business-critical functions, including financial reporting systems and internal controls.

The Company has protocols in place at all sites, including on-site medical personnel at manufacturing facilities to actively monitor employees and contractors who report symptoms of or exposure to COVID-19.

In addition, the Company has trained a contingent workforce to operate the plants as part of its business continuity planning.

The Company continued its execution of these measures at all sites through the end of 2021 and intends to continue to do so through the duration of the pandemic.

Equity, Diversity and Inclusion

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AdvanSix is committed to pay equity for its employees and regularly performs reviews of its compensation practices to evaluate and maintain pay equity in several respects, including by gender, ethnicity and race.

At a national level, AdvanSix not only participates as a board member, but is 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.

In addition, AdvanSix has supported and participated in the Future of STEM Scholars Initiative ("FOSSI"), a national, industry-wide program which provides scholarships to students pursuing STEM degrees at Historically Black Colleges and Universities ("HBCU") and connections to internships, leadership development and mentoring opportunities.

During 2021, we welcomed our first class of FOSSI scholars all of whom are in attendance at HBCUs.

During 2021, we introduced a number of key actions to advance equity, diversity and inclusion within the organization including focus group discussions, review of our talent pipeline and overall development programs.

Notably, we further enhanced our recruiting processes by implementing a program mandating a diverse candidate slate with the goal to increase our organization’s workforce diversity and improve outreach in the local communities where we operate.

In addition, we continued unconscious bias training at leadership and managerial levels enterprise-wide to enhance our recruitment efforts and the evaluation process of candidates.

We conducted Days of Understanding at our largest manufacturing facility throughout the month of June to encourage active engagement by leadership with all employees to listen to their experiences and gather feedback for improvement.

Our senior leadership team was comprised of over 50% women in 2021, including our Chief Executive Officer, Chief Human Resources Officer, Chief Information Officer, Vice President, Nylon Solutions and Vice President, Business Development.

Four directors of our ten-member Board are women, and two directors of our ten-member Board are ethnically diverse.

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.

In addition, AdvanSix has supported and participated in the Future of STEM Scholars Initiative ("FOSSI"), a national, industry-wide program which provides scholarships to students pursuing STEM degrees at Historically Black Colleges and Universities ("HBCUs") and connections to internships, leadership development and mentoring opportunities.

During 2022, we welcomed our second class of FOSSI scholars all of whom are in attendance at HBCUs doubling our previous year's number of scholars to ten.

During 2022, we progressed a number of key actions to advance equity, diversity and inclusion within the organization including focus group discussions, review of our talent pipeline and overall development programs.

Notably, we continued our program of mandating a diverse candidate slate with the goal to increase our organization’s workforce diversity and improve outreach in the local communities where we operate.

In addition, we created a program for inclusive leadership, ensuring our leaders understand and have the tools to create an inclusive environment where all can thrive.

We held our second annual Days of Understanding at our largest manufacturing facility throughout the month of June to encourage active engagement by leadership with all employees to listen to their experiences and gather feedback for improvement.

Our senior leadership team was comprised of approximately 45% women in 2022, including our Chief Executive Officer, Chief Human Resources Officer, Chief Information Officer and Vice President, Nylon Solutions Business Director.

Four directors of our nine-member Board are women, and two directors of our nine-member Board are ethnically diverse.

Employee Development

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We have established strong relationships with community colleges, universities, professional associations and industry groups with a focus on technical positions and development in order to attract talent including by utilizing co-op, internship programs and university relations as a talent pipeline.

Early career development and continual learning is part of our employee engagement strategy.

To support the advancement of our employees, we promote development through training that broadens work-related skills and believe that the most effective model combines an “experience, exposure, and education” approach.

We acknowledge that learning is a career-long endeavor and place the greatest emphasis on learning by doing, supported by feedback, training, and self-reflection.

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.

7 unchanged sentences

On an annual basis, senior leadership recognizes the FLS who demonstrates excellence with this initiative with an FLS of the Year Award.

During 2021, we held a Technical Career Progression event in order to recognize those employees who have displayed technical capability and regularly deliver in three key areas — results, behaviors and capability.

A highly trained and engaged workforce is essential for AdvanSix to be our customers’ trusted partner, and those partnerships are built by delivering best-in-class experiences that result in satisfied customers and support shareholder return.

5 unchanged sentences

Our compensation and benefit programs are designed to support our business strategy through four key objectives:

• Attract and retain world-class talent;

• Attract and retain best-in-class talent;

• Drive and pay for performance that creates superior results and sustainable stockholder value;

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Preston and Mr.

Gramm were each first appointed as an executive officer in 2016, Mr.

Blindenbach was first appointed as an executive officer in 2019, and Ms.

Gramm were each first appointed as an executive officer in 2016, and Ms.

Slieter and Mr.

17 unchanged sentences

Preston held various finance roles with Honeywell for over 15 years.

Preston served as vice president and chief financial officer for Honeywell’s UOP division from 2013 to 2016.

Prior to this role, Mr.

Preston was vice president of business analysis & planning from 2012 to 2013.

Preston also held several finance leadership roles within Honeywell, including chief financial officer of the Fluorine Products business, director of financial planning & analysis for the Performance Materials and Technologies segment, and director of business analysis & planning for Honeywell corporate.

Preston began his career with Honeywell in September of 2001 as manager of investor relations.

From 2012 to 2013, Mr.

Preston was vice president of business analysis & planning.

Preston served as vice president and chief financial officer for Honeywell’s UOP division from 2013 to 2016.

Prior to joining Honeywell, he spent seven years in investor relations consulting.

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Gramm served as vice president and controller of the aerospace and corporate government compliance divisions at Honeywell.

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.

Beginning in March 2011, he was vice president and controller of the aerospace division at Honeywell.

He joined Honeywell in 1997 as a senior staff accountant.

Over the course of the period from 1997 to March 2011, Mr.

Gramm held several positions at Honeywell, including controller and chief financial officer of various divisions focused on areas including specialty materials and resins and chemicals.

He joined Honeywell in 1997 as a senior staff accountant.

Beginning in March 2011, he was vice president and controller of the aerospace division at Honeywell.

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.

Before joining Honeywell, Mr.

Gramm was a manager at Corning Life Sciences.

Blindenbach, 53

Senior Vice President, Integrated Supply Chain Prior to joining the Company, Mr.

Blindenbach served as Vice President of Mobil International Company Operations Manager, EMEA since 2018.

He joined ExxonMobil in 1994 and served in several roles with increasing responsibility including Sales Engineer, Technical Support Supervisor, Pernis Plant Operations Manager, Europe Project Advisor, Europe Supply Manager, and Global Operations Project Advisor.

From 2006 to 2007, he served as Executive Advisor to the President of ExxonMobil Lubes and Fuels.

From 2007 to 2009, Mr.

Blindenbach served as Manager, Supply and Distribution for EMEA.

From 2010 to 2011, he served as Vice President, ExxonMobil Lubricants, Trading and Supply Manager, Global Basestocks.

From 2011 to 2012, he served as Manager of Global Product Integrity.

From 2012 to 2013, he served as Project Executive.

From 2013 to 2014, he served as Manager of Midstream Business.

From 2014 through 2017, he served as Manager, Manufacturing, Lubes, Americas.

Other Information

Our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and any amendments to those reports are available free of charge on our website (www.AdvanSix.com) under the heading Investors (see SEC Filings) immediately after they are filed with, or furnished to, the Securities and Exchange Commission ("SEC").

In addition, in this Form 10-K, the Company incorporates by reference certain information from parts of its Proxy Statement for the 2022 Annual Meeting of Stockholders, which will also be available free of charge on our website.

In addition, in this Form 10-K, the Company incorporates by reference certain information from parts of its Proxy Statement for the 2023 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.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business