AdvanSix Inc. 10-Q

ITEM 1. FINANCIAL STATEMENTS ADVANSIX INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (Dollars in thousands, except share and per share amounts) Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 Sales $ 410,022 $ 453,479 $ 787,813 $ 790,308 Costs, expenses and other: Costs of goods sold 351,308 372,111 675,628 705,975 Selling, general and administrative expenses 25,416 24,431 48,825 48,024 Interest expense, net 2,255 3,514 3,796 6,213 Other non-operating (income) expense, net ( 607 ) 1,351 ( 1,015 ) 1,441 Total costs, expenses and other 378,372 401,407 727,234 761,653 Income before taxes 31,650 52,072 60,579 28,655 Income tax expense 279 13,145 5,864 7,124 Net income $ 31,371 $ 38,927 $ 54,715 $ 21,531 Earnings per common share Basic $ 1.17 $ 1.45 $ 2.04 $ 0.80 Diluted $ 1.15 $ 1.43 $ 2.01 $ 0.79 Weighted average common shares outstanding Basic 26,896,037 26,839,429 26,867,252 26,859,044 Diluted 27,223,309 27,150,347 27,248,976 27,251,326 See accompanying notes to Condensed Consolidated Financial Statements. 3 ADVANSIX INC. CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) (Dollars in thousands) Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 Net income $ 31,371 $ 38,927 $ 54,715 $ 21,531 Foreign exchange translation adjustment 24 ( 27 ) 35 ( 42 ) Cash-flow hedges — — 7 7 Other comprehensive income (loss), net of tax 24 ( 27 ) 42 ( 35 ) Comprehensive income $ 31,395 $ 38,900 $ 54,757 $ 21,496 See accompanying notes to Condensed Consolidated Financial Statements. 4 ADVANSIX INC. CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Dollars in thousands, except share and per share amounts) June 30, 2025 December 31, 2024 ASSETS Current assets: Cash and cash equivalents $ 18,446 $ 19,564 Accounts and other receivables – net 159,702 145,673 Inventories – net 221,764 212,386 Taxes receivable 15,243 503 Other current assets 19,021 8,990 Total current assets 434,176 387,116 Property, plant and equipment – net 936,309 917,858 Operating lease right-of-use assets 136,888 153,438 Goodwill 56,192 56,192 Intangible assets 41,619 43,144 Other assets 41,218 37,172 Total assets $ 1,646,402 $ 1,594,920 LIABILITIES Current liabilities: Accounts payable $ 231,907 $ 228,761 Accrued liabilities 48,200 47,264 Income taxes payable 384 1,047 Operating lease liabilities – short-term 38,718 42,493 Deferred income and customer advances 1,858 37,538 Total current liabilities 321,067 357,103 Deferred income taxes 151,938 145,299 Operating lease liabilities – long-term 99,037 111,400 Line of credit – long-term 240,000 195,000 Other liabilities 10,628 11,468 Total liabilities 822,670 820,270 COMMITMENTS AND CONTINGENCIES (Note 9) STOCKHOLDERS' EQUITY Common stock, par value $ 0.01 ; 200,000,000 shares authorized; 33,152,286 shares issued and 26,844,187 outstanding at June 30, 2025; 32,989,165 shares issued and 26,737,036 outstanding at December 31, 2024 332 330 Preferred stock, par value $ 0.01 ; 50,000,000 shares authorized and 0 shares issued and outstanding at June 30, 2025 and December 31, 2024 — — Treasury stock at par ( 6,308,099 shares at June 30, 2025; 6,252,129 shares at December 31, 2024) ( 63 ) ( 63 ) Additional paid-in capital 140,097 136,872 Retained earnings 677,354 631,541 Accumulated other comprehensive income 6,012 5,970 Total stockholders' equity 823,732 774,650 Total liabilities and stockholders' equity $ 1,646,402 $ 1,594,920 See accompanying notes to Condensed Consolidated Financial Statements. 5 ADVANSIX INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (Dollars in thousands) Six Months Ended June 30, 2025 2024 Cash flows from operating activities: Net income $ 54,715 $ 21,531 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 38,639 38,264 (Gain) loss on disposal of assets ( 177 ) 261 Deferred income taxes 6,646 751 Stock-based compensation 4,287 4,404 Amortization of deferred financing fees 309 309 Operational asset adjustments — 1,200 Changes in assets and liabilities, net of business acquisitions: Accounts and other receivables ( 13,994 ) ( 6,004 ) Inventories ( 9,378 ) 36,004 Taxes receivable ( 14,740 ) 1,255 Accounts payable 12,423 ( 61,681 ) Income taxes payable ( 663 ) ( 7,026 ) Accrued liabilities 561 6,149 Deferred income and customer advances ( 35,680 ) ( 14,530 ) Other assets and liabilities ( 10,395 ) ( 6,889 ) Net cash provided by operating activities 32,553 13,998 Cash flows from investing activities: Expenditures for property, plant and equipment ( 62,327 ) ( 68,883 ) Other investing activities ( 5,891 ) ( 3,736 ) Net cash used for investing activities ( 68,218 ) ( 72,619 ) Cash flows from financing activities: Borrowings from line of credit 231,500 257,500 Repayments of line of credit ( 186,500 ) ( 197,500 ) Principal payments of finance leases ( 491 ) ( 502 ) Dividend payments ( 8,580 ) ( 8,582 ) Purchase of treasury stock ( 1,537 ) ( 10,385 ) Issuance of common stock 155 427 Net cash provided by financing activities 34,547 40,958 Net change in cash and cash equivalents ( 1,118 ) ( 17,663 ) Cash and cash equivalents at beginning of period 19,564 29,768 Cash and cash equivalents at the end of period $ 18,446 $ 12,105 Supplemental non-cash investing activities: Capital expenditures included in accounts payable $ 14,762 $ 14,932 Supplemental cash activities: Cash paid for interest $ 2,297 $ 6,015 Cash paid for income taxes $ 15,080 $ 13,587 See accompanying notes to Condensed Consolidated Financial Statements. 6 ADVANSIX INC. CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Unaudited) (Dollars in thousands) Common Stock Additional Paid-In Capital Retained Earnings Treasury Stock Accumulated Other Comprehensive Income (Loss) Total Equity Shares Amount Balance at December 31, 2024 32,989,165 $ 330 $ 136,872 $ 631,541 $ ( 63 ) $ 5,970 $ 774,650 Net income — — — 23,344 — — 23,344 Comprehensive income Foreign exchange translation adjustments — — — — — 11 11 Cash-flow hedges — — — — — 7 7 Other comprehensive income, net of tax — — — — — 18 18 Issuance of common stock 124,214 1 153 — — — 154 Purchase of treasury stock ( 53,432 shares) — — ( 1,486 ) — — — ( 1,486 ) Stock-based compensation — — 1,978 — — — 1,978 Dividends — — 160 ( 4,450 ) — — ( 4,290 ) Balance at March 31, 2025 33,113,379 331 137,677 650,435 ( 63 ) 5,988 794,368 Net income — — — 31,371 — — 31,371 Comprehensive income Foreign exchange translation adjustments — — — — — 24 24 Other comprehensive loss, net of tax — — — — — 24 24 Issuance of common stock 38,907 1 — — — — 1 Purchase of treasury stock ( 2,538 shares) — — ( 51 ) — — — ( 51 ) Stock-based compensation — — 2,309 — — — 2,309 Dividends — — 162 ( 4,452 ) — — ( 4,290 ) Balance at June 30, 2025 33,152,286 $ 332 $ 140,097 $ 677,354 $ ( 63 ) $ 6,012 $ 823,732 7 ADVANSIX INC. CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Unaudited) (Dollars in thousands) Common Stock Additional Paid-In Capital Retained Earnings Treasury Stock Accumulated Other Comprehensive Income (Loss) Total Equity Shares Amount Balance at December 31, 2023 32,598,946 $ 326 $ 138,046 $ 605,067 $ ( 58 ) $ ( 4,144 ) $ 739,237 Net loss — — — ( 17,396 ) — — ( 17,396 ) Comprehensive income Foreign exchange translation adjustments — — — — — ( 15 ) ( 15 ) Cash-flow hedges — — — — — 7 7 Other comprehensive loss, net of tax — — — — — ( 8 ) ( 8 ) Issuance of common stock 323,989 3 423 — — — 426 Purchase of treasury stock ( 260,464 shares) — — ( 7,020 ) — ( 3 ) — ( 7,023 ) Stock-based compensation — — 2,211 — — — 2,211 Dividends — — 163 ( 4,453 ) — — ( 4,290 ) Balance at March 31, 2024 32,922,935 329 133,823 583,218 ( 61 ) ( 4,152 ) 713,157 Net income — — — 38,927 — — 38,927 Comprehensive income Foreign exchange translation adjustments — — — — — ( 27 ) ( 27 ) Other comprehensive loss, net of tax — — — — — ( 27 ) ( 27 ) Issuance of common stock 36,653 1 — — — — 1 Purchase of treasury stock ( 141,242 shares) — — ( 3,360 ) — ( 2 ) — ( 3,362 ) Stock-based compensation — — 2,193 — — — 2,193 Dividends — — 130 ( 4,422 ) — — ( 4,292 ) Balance at June 30, 2024 32,959,588 $ 330 $ 132,786 $ 617,723 $ ( 63 ) $ ( 4,179 ) $ 746,597 See accompanying notes to Condensed Consolidated Financial Statements. 8 ADVANSIX INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands, except share and per share amounts and as otherwise noted) 1. Organization, Operations and Basis of Presentation Description of Business AdvanSix Inc. ("AdvanSix," the "Company," "we" or "our") is a diversified chemistry company that produces essential materials for our customers in a wide variety of end markets and applications that touch people’s lives. Our integrated value chain of our five U.S.-based manufacturing facilities plays a critical role in global supply chains and enables us to innovate and deliver essential products for our customers across building and construction, fertilizers, agrochemicals, plastics, solvents, packaging, paints, coatings, adhesives, electronics and other end markets. Guided by our core values of Safety, Integrity, Accountability and Respect, AdvanSix strives to deliver best-in-class customer experiences and differentiated products in the industries of nylon solutions, plant nutrients, and chemical intermediates. Basis of Presentation The Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions to Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, the accompanying unaudited Condensed Consolidated Financial Statements contain all adjustments, consisting of only normal recurring adjustments, necessary for a fair statement of the Company's financial position as of June 30, 2025, and its results of operations for the three and six months ended June 30, 2025 and 2024 and cash flows for the six months ended June 30, 2025 and 2024. The year-end Condensed Consolidated Balance Sheet data was derived from audited financial statements but does not include all disclosures required by U.S. GAAP. The results of operations of any interim period are not necessarily indicative of the results of operations to be expected for the full fiscal year. These financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2024. All intercompany transactions have been eliminated. Certain prior period amounts have been reclassified for consistency with the current period presentation. It is our practice to establish actual quarterly closing dates using a predetermined fiscal calendar, which requires our businesses to close their books on a Saturday in order to minimize the potentially disruptive effects of quarterly closing on our business processes. Historically, the effects of this practice have generally not been significant to reported results for any quarter and only existed within a reporting year. In the event that differences in actual closing dates are material to year-over-year comparisons of quarterly or year-to-date results, we will provide the appropriate disclosures. Our actual closing dates for the three and six months ended June 30, 2025 and 2024 were June 28, 2025 and June 29, 2024, respectively. Liabilities to creditors to whom we have issued checks that remained outstanding at June 30, 2025 and December 31, 2024 aggregated to $ 6.0 million and $ 7.3 million, respectively. These were included in Cash and cash equivalents and Accounts payable in the Condensed Consolidated Balance Sheets. The Company previously reported a business impact associated with the June 2019 fire that shut down the Philadelphia Energy Solutions refinery in Philadelphia, Pennsylvania. The Company actively pursued a business interruption claim and reached a final omnibus settlement in January 2025 which resulted in insurance settlement proceeds of approximately $ 26 million in the first quarter of 2025. The total aggregate insurance proceeds since the original claim submission are approximately $ 39 million. The proceeds have been recognized as a reduction to Costs of Goods Sold on the Condensed Consolidated Statements of Operations in the periods in which they were received. On February 17, 2023, the Company's Board of Directors (the "Board") authorized a share repurchase program to repurchase shares of the Company's common stock. As of June 30, 2025, the Company has repurchased a total of 6,308,099 shares of common stock, including 1,062,643 shares withheld to cover tax withholding obligations in connection with the vesting of awards, for an aggregate of $ 194.0 million at a weighted average market price of $ 30.75 per share. As of June 30, 2025, approximately $ 62.0 million remained available for share repurchases under the current authorization. During the period July 1, 2025 through July 25, 2025, no additional shares were repurchased for tax withholding obligations or under the currently authorized repurchase program. Repurchases may be made from time to time on the open market in accordance with Rule 10b-18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), including through the use of trading plans intended to qualify under Rule 9 ADVANSIX INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands, except share and per share amounts and as otherwise noted) 10b5-1 of the Exchange Act. The size and timing of these repurchases will depend on pricing, market and economic conditions, legal and contractual requirements and other factors. The share repurchase program has no expiration date and may be modified, suspended or discontinued at any time. The par value of the shares repurchased is applied to Treasury stock and the excess of the purchase price over par value is applied to Additional paid-in capital. 2. Recent Accounting Pronouncements Recent Accounting Pronouncements – The Company considers the applicability and impact of all Accounting Standards Updates (“ASUs”) issued by the Financial Accounting Standards Board (“FASB”). ASUs not discussed below were assessed and determined to be either not applicable or are expected to have minimal impact on our consolidated financial position or results of operations. In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. The amendments in this ASU require disclosure, in the notes to the financial statements, of specified information about certain costs and expenses. The amendments require that at each interim and annual reporting period an entity will: (1) disclose the amounts of (a) purchases of inventory, (b) employee compensation, (c) depreciation, (d) intangible asset amortization, and (e) depreciation, depletion, and amortization recognized as part of oil-and gas-producing activities (or other amounts of depletion expense) included in each relevant expense caption. A relevant expense caption is an expense caption presented on the face of the income statement within continuing operations that contains any of the expense categories listed in (a)-(e); (2) include certain amounts that are already required to be disclosed under current generally accepted accounting principles (GAAP) in the same disclosure as other disaggregation requirements; (3) disclose a qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively; and (4) disclose the total amount of selling expense and, in annual reporting periods, an entity's definition of selling expense. The guidance is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. The amendments in this ASU should be applied either (1) prospectively to financial statements issued for reporting periods after the effective date of this ASU or (2) retrospectively to any or all prior periods presented in the financial statements. The Company is evaluating the pronouncement and does not expect adoption to have a material impact on the Company's consolidated financial position or results of operations. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The amendments in this ASU require that public business entities, on an annual basis, disclose specific categories in the rate reconciliation and provide additional information for reconciling items that are equal to or greater than 5 percent of the amount computed by multiplying pretax income (or loss) by the applicable statutory income tax rate. The amendments also require that the Company disclose the following (net of refunds received): (1) the amount of income taxes paid disaggregated by federal (national), state, and foreign taxes and (2) the amount of income taxes paid disaggregated by individual jurisdictions in which income taxes paid is equal to or greater than 5 percent of total income taxes paid. Additionally, the amendments in this update eliminate the requirement for all entities to disclose the nature and estimate of the range of the reasonably possible change in the unrecognized tax benefits balance in the next 12 months or to make a statement that an estimate of the range cannot be made, and remove the requirement to disclose the cumulative amount of each type of temporary difference when a deferred tax liability is not recognized because of the exceptions to comprehensive recognition of deferred taxes related to subsidiaries and corporate joint ventures. This pronouncement is effective for annual periods beginning after December 31, 2024 and the required disclosures will be adopted in the Company's Annual Report on Form 10-K for the year ended December 31, 2025. 3. Revenues Revenue Recognition AdvanSix serves around 400 customers annually, primarily in the United States, spanning a wide variety of industries worldwide. For the six months ended June 30, 2025 and 2024, the Company's ten largest customers accounted for approximately 39 % and 38 % of total sales, respectively. We typically sell to customers under master service agreements, with primarily one-year terms, or by purchase orders. We have historically experienced low customer turnover and have long-standing customer relationships, which span decades. Our largest customer is Shaw Industries Group, Inc. (“Shaw”), a significant consumer of caprolactam and Nylon 6 resin, to whom we sell under a long-term agreement. For each of the three months ended June 30, 2025 and 2024, the Company's sales to Shaw were 9 % of our total sales. 10 ADVANSIX INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands, except share and per share amounts and as otherwise noted) The Company's revenue by product line, and related approximate percentage of total sales, for the three and six months ended June 30, 2025 and 2024 were as follows: Three Months Ended June 30, Six Months Ended June 30, 2025 2024* 2025 2024* Nylon $ 79,503 20 % $ 103,217 23 % $ 167,871 21 % $ 187,606 24 % Caprolactam 66,424 16 % 81,303 18 % 133,856 17 % 142,779 18 % Plant Nutrients 156,770 38 % 147,339 32 % 285,011 36 % 242,035 30 % Chemical Intermediates 107,325 26 % 121,620 27 % 201,075 26 % 217,888 28 % Total $ 410,022 100 % $ 453,479 100 % $ 787,813 100 % $ 790,308 100 % * The Company transferred certain products between its Chemical Intermediates product line and its Plant Nutrients product line to align more closely with its current sales structure. Historical information has been reclassified to reflect these changes for all periods presented in the Consolidated Financial Statements. Total revenue amounts were not impacted for either period. The Company's revenues by geographic area, and related approximate percentage of total sales, for the three and six months ended June 30, 2025 and 2024 were as follows: Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 United States $ 358,671 87 % $ 401,859 89 % $ 679,118 86 % $ 686,447 87 % International * 51,351 13 % 51,620 11 % 108,695 14 % 103,861 13 % Total $ 410,022 100 % $ 453,479 100 % $ 787,813 100 % $ 790,308 100 % * Predominantly Latin America and Canada Deferred Income and Customer Advances The Company defers revenues when cash payments are received in advance of our performance. Below is a roll-forward of Deferred income and customer advances for the six months ended June 30, 2025: Opening balance January 1, 2025 $ 37,538 Additional cash advances — Less amounts recognized in revenues ( 35,680 ) Ending balance June 30, 2025 $ 1,858 The Company expects to recognize as revenue the June 30, 2025 ending balance of Deferred income and customer advances within one year or less. 4. Earnings Per Share The computation of basic and diluted earnings per share ("EPS") is based on Net income (loss) divided by the basic weighted average number of common shares outstanding and diluted weighted average number of common shares outstanding, respectively. The details of the basic and diluted EPS calculations for the three and six months ended June 30, 2025 and 2024 were as follows: 11 ADVANSIX INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands, except share and per share amounts and as otherwise noted) Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 Basic Net income $ 31,371 $ 38,927 $ 54,715 $ 21,531 Weighted average common shares outstanding 26,896,037 26,839,429 26,867,252 26,859,044 EPS – Basic $ 1.17 $ 1.45 $ 2.04 $ 0.80 Diluted Dilutive effect of equity awards and other stock-based holdings 327,272 310,918 381,724 392,282 Weighted average common shares outstanding 27,223,309 27,150,347 27,248,976 27,251,326 EPS – Diluted $ 1.15 $ 1.43 $ 2.01 $ 0.79 Diluted EPS is computed based upon the weighted average number of common shares outstanding for the period plus the dilutive effect of common stock equivalents using the treasury stock method and the average market price of our common stock for the period. The diluted EPS calculations exclude the effect of stock options when the options’ assumed proceeds exceed the average market price of the common shares during the period. The anti-dilutive common stock equivalents outstanding at the three and six months ended June 30, 2025 and 2024 were as follows: Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 Options and stock equivalents 1,005,749 1,057,349 948,963 1,127,661 Dividend activity for the three and six months ended June 30, 2025 and 2024 was as follows: Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 Cash dividends declared per share $ 0.16 $ 0.16 $ 0.32 $ 0.32 Aggregate dividends paid to shareholders $ 4,290 $ 4,292 $ 8,580 $ 8,582 5. Accounts and Other Receivables – Net June 30, 2025 December 31, 2024 Accounts receivables $ 155,701 $ 141,273 Other 4,343 4,982 Total accounts and other receivables 160,044 146,255 Less – allowance for credit losses ( 342 ) ( 582 ) Total accounts and other receivables – net $ 159,702 $ 145,673 12 ADVANSIX INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands, except share and per share amounts and as otherwise noted) 6. Inventories June 30, 2025 December 31, 2024 Raw materials $ 103,110 $ 99,320 Work in progress 92,241 71,175 Finished goods 73,938 73,994 Spares and other 32,605 31,948 301,894 276,437 Reduction to LIFO cost basis ( 80,130 ) ( 64,051 ) Total inventories $ 221,764 $ 212,386 Substantially all of the Company’s inventories at June 30, 2025 and December 31, 2024 are valued at the lower of cost or market using the last-in, first-out (“LIFO”) method. However, approximately 6 % was valued at average cost using the first-in, first-out (“FIFO”) method at June 30, 2025. The excess of replacement cost over the carrying value of total inventories subject to LIFO was $ 75.9 million and $ 57.5 million at June 30, 2025 and December 31, 2024, respectively. 7. Leases We determine if an arrangement is a lease at inception. Operating leases are included in Operating lease right-of-use assets ("ROU"), Operating lease liabilities – short-term, and Operating lease liabilities – long-term in our Condensed Consolidated Balance Sheets. Finance leases are included in Property, plant and equipment – net, Accounts payable, and Other liabilities in our Condensed Consolidated Balance Sheets. The components of lease expense were as follows: Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 Finance lease cost: Amortization of right-of-use asset $ 249 $ 264 $ 503 $ 508 Interest on lease liabilities 38 39 79 77 Total finance lease cost 287 303 582 585 Operating lease cost 13,999 10,797 27,077 22,483 Short-term lease cost 820 1,141 1,616 2,334 Total lease cost $ 15,106 $ 12,241 $ 29,275 $ 25,402 As of June 30, 2025, we have no additional operating or finance leases that have not yet commenced. 8. Goodwill and Intangible Assets Intangible assets with finite lives acquired through a business combination are recorded at fair value, less accumulated amortization. Customer relationships and trade-names are amortized on a straight-line basis over their expected useful lives of 15 to 20 years and 5 years, respectively. Goodwill There was no change in the carrying amount of goodwill for the six months ended June 30, 2025. Finite-Lived Intangible Assets Intangible assets subject to amortization were as follows: 13 ADVANSIX INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands, except share and per share amounts and as otherwise noted) June 30, 2025 December 31, 2024 Gross Carrying Amount Accumulated Amortization Net Book Value Gross Carrying Amount Accumulated Amortization Net Book Value Customer relationships $ 36,820 $ ( 6,619 ) $ 30,201 $ 36,820 $ ( 5,666 ) $ 31,154 Licenses 18,451 ( 7,381 ) 11,070 18,451 ( 6,919 ) 11,532 Trade names 1,100 ( 752 ) 348 1,100 ( 642 ) 458 Total $ 56,371 $ ( 14,752 ) $ 41,619 $ 56,371 $ ( 13,227 ) $ 43,144 For each of the three months ended June 30, 2025 and June 30, 2024, the Company recorded amortization expense on intangible assets of $ 0.8 million. For each of the six months ended June 30, 2025 and June 30, 2024, the Company recorded amortization expense on intangible assets of $ 1.5 million. 9. Commitments and Contingencies The Company is subject to a number of lawsuits, investigations and disputes, some of which may involve substantial amounts claimed, arising out of the conduct of the Company or other third-parties in the normal and ordinary course of business. A liability is recognized for any contingency that is probable of occurrence and reasonably estimable. The Company continually assesses the likelihood of adverse judgments or outcomes in these matters, as well as potential ranges of possible losses, based on an analysis of each matter with the assistance of legal counsel and, if applicable, other experts. Given the uncertainty inherent in such lawsuits, investigations and disputes, the Company does not believe it is possible to develop estimates of reasonably possible loss in excess of current accruals for these matters. Considering the Company’s past experience and existing accruals, the Company does not expect the outcome of these matters, either individually or in the aggregate, to have a material adverse effect on the Company’s consolidated financial position or results of operations. Potential liabilities are subject to change due to new developments, changes in settlement strategy or the impact of evidentiary requirements, which could cause the Company to pay damage awards or settlements (or become subject to equitable remedies) that could have a material adverse effect on the Company’s consolidated results of operations, balance sheet and/or operating cash flows in the periods recognized or paid. We assumed from Honeywell International Inc. ("Honeywell") all health, safety and environmental (“HSE”) liabilities and compliance obligations related to the past and future operations of our current business, as well as all HSE liabilities associated with our three manufacturing locations and the other locations used in our current operations, including any cleanup or other liabilities related to any contamination that may have occurred at such locations in the past. Honeywell retained all HSE liabilities related to former business locations or the operation of our former businesses. Although we have ongoing environmental remedial obligations at certain of our facilities, in the past three years, the associated remediation costs have not been material, and we do not expect our known remediation costs to have a material adverse effect on the Company's consolidated financial position or results of operations. 10. Income Taxes The provision for income taxes was $ 0.3 million and $ 13.1 million for the three months ended June 30, 2025 and 2024, respectively, resulting in an effective tax rate of 0.9 % and 25.2 %, respectively. The provision for income taxes was $ 5.9 million and $ 7.1 million for the six months ended June 30, 2025 and 2024, respectively, resulting in an effective tax rate of 9.7 % and 24.9 %, respectively. The Company’s provision for income taxes in interim periods is computed by applying an estimated annual effective tax rate against Income before taxes for the period in addition to recording any tax effects of discrete items for the quarter. The Company’s effective tax rate for the three and six months ended June 30, 2025 differed from the U.S. federal statutory rate due to state taxes and executive compensation deduction limitations which generally increase the rate, offset by research tax credits that generally decrease the rate. Additionally, discrete tax adjustments recorded in the first and second quarter of 2025 related to Internal Revenue Code (IRC) Section 45Q tax credits of $ 1.8 million and $ 7.9 million, respectively, offset slightly by state tax legislation changes, resulted in a net 24.7 % and 15.7 % decrease in the rate for the three and six months ended June 30, 2025, respectively. The Company’s effective tax rate for the three and six months ended June 30, 2024 was higher than the U.S. 14 ADVANSIX INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands, except share and per share amounts and as otherwise noted) federal statutory rate, due to the impacts of state taxes and executive compensation deduction limitations which generally increase the tax rate, partially offset by tax credits which generally decrease the tax rate. 11. Supplier Finance Programs The Company has entered into a supply chain finance program with a financial intermediary providing participating suppliers the option to be paid by the intermediary earlier than the original invoice due date. AdvanSix’s responsibility is limited to making payments to the intermediary based upon payment terms negotiated with the suppliers, regardless of whether the intermediary pays the supplier in advance of the original due date. The Company’s payment terms with suppliers are consistent, regardless of whether a vendor participates in the supply chain finance program or not. All related agreements are terminable by either party upon at least 30 days’ notice. The total amount due to the financial intermediary to settle supplier invoices under its supply chain finance program was approximately $ 19.8 million as of June 30, 2025 and approximately $ 19.2 million as of December 31, 2024. These amounts outstanding are included in Accounts payable . 12. Segment Related Information The Company has concluded that it is a single operating segment and a single reportable segment: chemical manufacturing. Its larger manufacturing sites are vertically integrated and leverage cross-plant resources, including centralized supply chain and procurement functions. This production process uses one key raw material, cumene, as the input to products produced for sale through the sales channels and end markets the Company serves. Production rates and output volumes are managed across locations to align with the Company’s overall operating plan. Additionally, the Company’s operating results, which are evaluated regularly to make decisions about resource allocation and performance assessment by the chief operating decision maker ("CODM"), our CEO and President, are on a consolidated basis. The chemical manufacturing segment derives its revenues by innovating and delivering essential products in the industries of nylon solutions, plant nutrients, and chemical intermediates to its customers in a wide variety of end markets and applications, such as building and construction, fertilizers, agrochemicals, plastics, solvents, packaging, paints, coatings, adhesives and electronics. The CODM’s performance assessment and resource allocation for the chemical manufacturing segment is based on net income which is also reported on the income statement as net income, the measure of segment assets which is also reported on the balance sheet as total assets, and capital expenditures which is also reported in management’s discussion and analysis. The CODM uses net income generated from segment assets in deciding whether to reinvest profits into the segment or into other parts of the entity, such as for acquisitions or to pay dividends. The CODM also uses net income to monitor budget versus actual results. Monitoring budgeted versus actual results is used in assessing performance of the segment and in establishing management’s compensation. Lastly, the CODM uses capital expenditures to estimate the cash-generating potential and cash requirements of the segment. Significant expense information reviewed by the CODM was as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 Revenue $ 410,022 $ 453,479 $ 787,813 $ 790,308 Less: Variable costs of goods sold * 175,178 204,090 328,082 375,530 Plant costs 127,376 118,968 249,229 235,399 Freight and distribution costs 46,211 46,859 93,614 90,158 Selling, general, and administrative expense 25,416 24,431 48,825 48,024 Other segment items ** 4,470 20,204 13,348 19,666 Segment net income $ 31,371 $ 38,927 $ 54,715 $ 21,531 *Variable costs of goods sold includes the raw material costs associated with volumes sold during the period as well as insurance settlement proceeds, when applicable. **Other segment items include research and development expense, interest income and expense, capitalized interest, other non-operating expense, and income tax expense. 13. Subsequent Events 15 ADVANSIX INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands, except share and per share amounts and as otherwise noted) As announced on August 1, 2025, the Board declared a quarterly cash dividend of $ 0.16 per share on the Company's common stock, payable on August 26, 2025 to stockholders of record as of the close of business on August 12, 2025. 16