What changed in this filing

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Item 7. Management’s Discussion and Analysis

2026-02-20 compared with 2025-02-21 · 102 added, 103 removed, 266 unchanged (44% of the section changed)

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This section of this Form 10-K generally discusses our financial condition and results of operations as of and for the years ended December 31, 2025 and 2024 and year-to-year comparisons between 2025 and 2024.

Discussions of our financial condition and results of operations as of and for the year ended December 31, 2022 and year-to-year comparisons between 2023 and 2022 that are not included in this Form 10-K can be found under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023, filed with the SEC on February 16, 2024.

Discussions of our financial condition and results of operations as of and for the year ended December 31, 2023 and year-to-year comparisons between

2024 and 2023 that are not included in this Form 10-K can be found under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024, filed with the SEC on February 21, 2025.

Business Overview

AdvanSix Inc.

is a diversified chemistry company playing 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.

is an integrated chemistry company that produces essential materials for our customers across diverse end markets.

Our 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.

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

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We also directly supply packaged ammonium sulfate to customers, primarily in North and South America, and have 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.

We produce ammonium sulfate fertilizer continuously throughout the year as part of our manufacturing process, but quarterly sales fluctuate reflecting both geographical and product sales mix considerations based on the timing and length of the growing seasons in North and South America.

North American ammonium sulfate demand and pricing, particularly for our higher-value granular product, are typically strongest during second quarter fertilizer application and then typically decline seasonally with new season fill in the third quarter.

Our ammonium sulfate fertilizer experiences quarterly sales seasonality reflecting both geographical and product sales mix considerations based on the timing and length of the growing seasons in North and South America.

The North American fertilizer season typically runs from July, when the value chain begins restocking fertilizer, through June of the following year, when most application for the year’s planting is completed.

The new season fill begins in the third quarter and proceeds sequentially into the following spring, which is the peak period for crop fertilizer application.

As a result of this pattern, North American ammonium sulfate demand and pricing, particularly for our higher-value granular product, are typically strongest in the first half of the year through application for the spring crop and then decline in the second half of the year.

Ammonium sulfate industry prices in the corn belt have declined approximately 12% from the second quarter to the third quarter, on average, since 2016.

Due to the ammonium sulfate fertilizer sales cycle, we occasionally build up higher inventory balances because our production is continuous and not tied to seasonal demand for fertilizers.

Due to the ammonium sulfate fertilizer sales cycle, we occasionally build up higher inventory balances because our production is continuous throughout the year and not tied to seasonal demand for fertilizers.

Sales of most of our other products have generally been subject to minimal, or no, seasonality.

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In order to mitigate the risk of unplanned interruptions, we schedule several planned plant turnarounds each year to conduct routine and major maintenance across our facilities.

We also utilize maintenance excellence and mechanical integrity programs, targeted buffer inventory of intermediate chemicals necessary for our manufacturing process, and co-producer swap arrangements, which are intended to mitigate the extent of any production losses as a result of planned and unplanned downtime;

We also utilize maintenance excellence and mechanical integrity

programs, targeted buffer inventory of intermediate chemicals necessary for our manufacturing process, and co-producer swap arrangements, which are intended to mitigate the extent of any production losses as a result of planned and unplanned downtime;

however, the mitigation of all or part of any such production impact cannot be assured.

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Recent Developments

Business Operations

In October 2024, additional required maintenance at our Hopewell, Virginia manufacturing site resulted in a delayed ramp to full operating rates following our multi-site planned plant turnaround.

The Company recognized an incremental approximately $17 million unfavorable impact to pre-tax income in the fourth quarter 2024, inclusive of fixed cost absorption and higher maintenance expense, and lost sales.

In January 2024, the Company experienced a process-based operational disruption at its Frankford, Pennsylvania manufacturing site temporarily reducing phenol and acetone production at the facility, as well as production at its Hopewell and Chesterfield, Virginia facilities.

As a result of a delayed ramp to targeted utilization rates, the Company recognized an unfavorable impact to pre-tax income in the first quarter 2024 of approximately $27 million, comprised of the impact of lost sales and other additional costs including purchases of replacement product and incremental plant spend.

The Company returned to targeted utilization rates at its Frankford, Pennsylvania manufacturing site, as well as across its value chain, prior to the end of the first quarter of 2024.

Chesterfield, VA Collective Bargaining Agreement

On May 9, 2024, the Company’s Chesterfield bargaining unit, represented by the Teamsters Local 592, ratified a new five-year labor agreement in advance of the prior agreement’s expiration date of May 14, 2024.

The ratified labor agreement affected approximately 160 workers at the Company’s manufacturing facility in Chesterfield, Virginia.

Succession of Senior Vice President and Chief Financial Officer

Michael Preston retired as the Company's Senior Vice President and Chief Financial Officer, effective as of October 1, 2024 and remained at the Company through year-end 2024 to help facilitate the transition of his responsibilities to his successor.

Effective as of October 1, 2024, the Board appointed Siddharth Manjeshwar as Senior Vice President and Chief Financial Officer to succeed Mr.

Frankford, PA Collective Bargaining Agreement

On November 12, 2025, the Company’s Frankford bargaining unit, represented by the United Steelworkers Local No.

10-667, ratified a new four-year labor agreement.

The ratified labor agreement affected approximately 100 workers at the Company’s manufacturing facility in Frankford, Pennsylvania.

Amendment to Credit Agreement

On October 23, 2025, the Company entered into Amendment No.

2 (the “Amendment”) to the Credit Agreement (as defined below).

See “Liquidity and Capital Resources - Credit Agreement” for a discussion regarding the Amendment.

Succession of Chief Financial Officer

Effective as of July 9, 2025, the Board appointed Christopher Gramm as Interim Chief Financial Officer.

Anti-Dumping Duty Petition - Acetone

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On November 1, 2024, the U.S.

International Trade Commission ("ITC") initiated its notice of initiation of its five-year review of the orders.

International Trade Commission ("ITC") issued its notice of initiation of its five-year review of the orders.

The anti-dumping orders and applicable duties will continue for another five-year period if Commerce finds that revocation of the orders is likely to lead to continuation or recurrence of dumping and if the ITC finds that revocation is likely to lead to continuation or recurrence of material injury to the U.S.

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On February 4, 2025, the ITC voted to conduct a full review and is expected to issue its results in the fourth quarter of 2025.

The anti-dumping duties will continue to apply during the pending review.

On March 7, 2025, Commerce determined that revocation of the anti-dumping orders would likely lead to continuation of recurrence of dumping.

In January 2026, the ITC made affirmative determinations that revocation of the orders would likely lead to continuation or recurrence of material inquiry.

As a result of the Commerce and ITC's determinations, the orders will be extended for another five years.

Philadelphia Energy Solutions’ Shut Down

The Company previously reported a business impact associated with the June 2019 fire that shut down Philadelphia Energy Solutions’ (“PES”) refinery in Philadelphia, Pennsylvania.

The Company previously reported a business impact associated with the June 2019 fire that shut down the Philadelphia Energy Solutions (“PES”) refinery in Philadelphia, Pennsylvania.

PES was one of multiple suppliers to the Company of cumene, a feedstock material used to produce phenol, acetone and other chemical intermediates.

The Company has been actively pursuing the claim over several years, with $5.3 million in insurance settlement proceeds during the fourth quarter of 2024 and a final omnibus settlement in January 2025 which will result in insurance settlement proceeds of approximately $26 million in the first quarter of 2025.

the proceeds received in the first quarter of 2025, total aggregate insurance proceeds since the original claim submission are approximately $39 million.

The Company was actively pursuing a business interruption claim over several years, with 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.

Consolidated Results of Operations for the Years Ended December 31, 2025, 2024 and 2023

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Price (0.5) % 0.9 %

Acquisition — % 0.6 %

0.3 % (1.0) %

2025 compared with 2024

Sales decreased in 2024 compared to 2023 by $16.0 million (approximately 1%) due to (i) decreased volume (approximately 2%) primarily driven by lost sales resulting from the operational disruptions at the Frankford and Hopewell manufacturing sites partially offset by net pricing (approximately 1%).

Sales were essentially flat in 2025 compared to 2024 due to increased volume (approximately 1%) primarily driven by higher granular ammonium sulfate sales supported by our SUSTAIN (Sustainable U.S.

Sulfate to Accelerate Increased Nutrition) program offset by decreased net pricing (approximately 0.5%) reflecting lower raw material pass through pricing on lower benzene input costs and favorable market-based pricing across our Plant Nutrients and Nylon Solutions product lines.

Cost of Goods Sold

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2025 compared with 2024

Costs of goods sold remained flat in 2024 compared to 2023 due primarily to (i) increased prices of raw materials (approximately 2%) and (ii) increased plant costs (approximately 1%) primarily driven by the operational disruptions at the Frankford, Pennsylvania and Hopewell, Virginia manufacturing sites, mitigated by decreased sales volume (approximately 2%).

Gross margin percentage decreased by approximately 1% in 2024 compared to 2023 due primarily to the impact of market-based pricing, net of raw material costs and increased plant costs, primarily driven by the operational disruptions at the Frankford, Pennsylvania and Hopewell, Virginia manufacturing sites.

Cost of goods sold decreased in 2025 by $7.3 million compared to 2024 due primarily to insurance proceeds collected as a result of the PES supplier shutdown (approximately 2%) partially offset by increased raw material costs (approximately 2%) driven by sulfur and natural gas.

Gross margin percentage increased by approximately 1% in 2025 compared to 2024 due primarily to (i) insurance proceeds collected as a result of the PES supplier shutdown (approximately 2%) and (ii) increased sales volumes as discussed above (approximately 2%), partially offset by the impact of market-based pricing, net of raw material costs (approximately 2%).

Selling, General and Administrative Expenses

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2025 compared with 2024

Selling, general and administrative expenses decreased in 2024 compared to 2023 by $1.5 million, or approximately 2%, due primarily to moderated functional support costs and legal spend, partially offset by increased enterprise resource planning system expense.

Selling, general and administrative expenses increased in 2025 compared to 2024 by $10.7 million (approximately 11%), due primarily to legal and professional fees associated with strategic regulatory matters and potential inorganic growth options, including costs associated with a transaction that the Company is no longer pursuing, and the planned investment to upgrade our enterprise resource planning system which was completed in 2025.

Interest Expense, Net

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2025 compared with 2024

Interest expense, net, increased in 2024 compared to 2023 by $3.8 million, or approximately 51%, due primarily to higher debt balances.

Interest expense, net, decreased in 2025 compared to 2024 by $2.8 million, or approximately 25%, primarily due to lower interest rates.

Other Non-operating (Income) Expense, Net

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2025 compared with 2024

Other non-operating income, net, decreased in 2024 compared to 2023 by $9.2 million, or approximately (128)%, due primarily to (i) the absence of prior year events, such as the exit from the Oben Holding Group S.A.

alliance, a licensee of certain legacy ammonium sulfate fertilizer technology assets closing its facility, and the exit of production from certain low-margin oximes products (approximately $4.5 million) and (ii) the reduction of the Company's anticipated receivable related to the gain on the termination fee recorded upon the exit from the Oben Holding Group S.A.

Other non-operating income, net, increased in 2025 compared to 2024 by $4.7 million due primarily to lower pension and other employee compensation expense and the absence of the prior year reduction of the Company's anticipated receivable related to the gain on the last installment of the termination fee recorded upon the exit from the Oben Holding Group S.A.

alliance (approximately $1.2 million).

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Effective income tax rate 9.5 % 3.1 % 21.1 %

Generally, the Company's effective income tax rate is increased relative to the U.S.

statutory rate of 21% due to state taxes and executive compensation limitations, which are generally offset by research tax credits, excess tax benefits of equity compensation and the foreign derived intangible income deduction.

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.

IRC Section 45Q allows taxpayers to receive a tax credit for carbon capture and utilization at its facilities.

The Company's effective income tax rate differs from the U.S.

statutory rate of 21% due to state taxes and executive compensation limitations which generally increase the effective income tax rate.

Research tax credits, excess tax benefits of equity compensation and the foreign derived intangible income deduction recorded in a period generally decrease the effective income tax rate.

Additionally, the Company's effective income tax rate for 2024 and 2025 was less than the U.S.

Federal statutory rate of 21% due to Internal Revenue Code (IRC) Section 45Q tax credits of approximately $9.7 million claimed in each of those years for credits generated in tax periods 2018, 2019 and 2020.

IRC Section 45Q allows a taxpayer to receive a tax credit for carbon capture and utilization at its facilities.

For certain utilization projects, the 45Q tax credit requires approval by the Internal Revenue Service (IRS) of a life-cycle assessment ("LCA") prior to claiming the tax credits.

The Company received approval for its 2018 LCA in November 2024 which enables the Company to claim credits for the 2018 and 2019 years.

The Company continues to pursue credits for the periods subsequent to 2019.

The 45Q tax credits for 2018 and 2019 have been recorded as a reduction in the Company's Income taxes payable account.

Additionally, in 2024 the Company recorded 2023 return to provision adjustments which resulted in a 2.1% increase in its current year effective income tax rate.

These adjustments primarily relate to a reduction in the income tax benefits associated with the research tax credit and the foreign derived intangible income deduction as reported on the Company's 2023 income tax return as compared to amounts recorded in its 2023 Income tax expense.

The Company received approval for its 2018 LCA in November 2024, which the Company was able to rely on for 2018 through 2020.

Approximately $18 million of the 45Q tax credits claimed for these periods are reflected in Taxes receivable as of December 31, 2025.

The Company continues to pursue IRC section 45Q tax credits for the periods after 2020.

The Company's effective income tax rate for 2023 approximated the U.S.

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Increases to the effective income tax rate due primarily to state taxes and executive compensation limitations, were materially offset by research tax credits, excess tax benefits of equity compensation and the foreign-derived intangible income deduction.

The Company's effective income tax rate for 2022 was higher compared to the U.S.

Federal statutory rate of 21% due primarily to state taxes and executive compensation deduction limitations partially offset by research tax credits and the foreign-derived intangible income deduction.

On August 16, 2022, the Inflation Reduction Act of 2022 (the "IRA") was signed into law.

This legislation includes significant changes relating to tax, climate change, energy and health care.

Among other provisions, the IRA introduces a corporate alternative minimum tax ("CAMT") on adjusted financial statement income of certain large corporations and a 1% excise tax on share repurchases.

The Company is not currently subject to the CAMT which became effective for tax years beginning after December 31, 2022.

The 1% excise tax is generally applicable to publicly traded corporations for the net value of certain stock that the corporation repurchases during the year and is also effective for tax years beginning after December 31, 2022.

The impact of any excise tax imposed on the Company for share repurchases is generally accounted for as an equity transaction with no consequences to the Company's results of operations, and this provision of the law has an immaterial impact on the Company's financial condition.

The IRA also includes significant extensions, expansions and enhancements related to climate and energy tax credits designed to encourage investment in the adoption and expansion of renewable and alternative energy sources.

The Company continues to evaluate these energy credit provisions of the law in relation to our sustainability and environmental, social and governance initiatives.

The Company also continues to monitor any new tax legislation that would result in a material impact on its financial statements, in particular as a result of the new U.S.

presidential administration and U.S.

On July 4, 2025, the One Big Beautiful Bill Act (the "Act") was enacted into law, which includes numerous tax provisions affecting businesses, including the reinstatement of full expensing of domestic research and experimental expenditures, modification of the limitation on business interest and making permanent full expensing for certain business property.

These provisions resulted in an approximately $9 million reduction in cash taxes in our financial results for the period ended December 31, 2025 and are expected to reduce our cash taxes in future periods.

The Pillar Two Global Anti-Base Erosion rules issued by the Organization for Economic Co-operation and Development ("OECD"), a global policy forum, introduced a global minimum tax of 15% which would apply to multinational groups with consolidated financial statement revenue in excess of EUR 750 million.

Numerous jurisdictions, including jurisdictions where the Company operates, have enacted these rules as of December 31, 2025.

The Company has evaluated the impact of these rules and currently believes they will not have a material impact on financial results through 2026 due to certain transitional safe harbors.

Additionally, on January 5, 2026, the OECD announced a new package of administrative guidance under Pillar Two which includes new safe harbors for companies headquartered in qualifying jurisdictions such as the United States.

These safe harbors are for periods on or after January 1, 2026.

Additionally, this guidance would extend the transitional safe harbors by one year.

We continue to monitor this guidance as details are made available.

As of December 31, 2025 and 2024, there were no unrecognized tax benefits recorded by the Company.

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The following tables set forth the non-GAAP financial measures of Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Income and Adjusted Earnings Per Share.

Adjusted EBITDA is defined as Net income before Interest, Income taxes, Depreciation and amortization, Non-cash stock-based compensation, Non-recurring, unusual or extraordinary expenses, Non-cash amortization from acquisitions and merger and acquisition costs that are not reflective of ongoing operations.

Adjusted EBITDA is defined as Net income before Interest, Income taxes, Depreciation and amortization, Non-cash stock-based compensation, Non-recurring, unusual or extraordinary expenses, Non-cash amortization from acquisitions and strategic advisory and professional fees that are not reflective of ongoing operations.

Adjusted EBITDA Margin is equal to Adjusted EBITDA divided by Sales.

The following tables may also present each of these measures as further adjusted.

The Company believes these non-GAAP financial measures provide meaningful supplemental information as they are used by the Company’s management to evaluate the Company’s operating performance, enhance a reader’s understanding of the financial performance of the Company, and facilitate a better comparison among fiscal periods and performance relative to the Company's competitors, as the non-GAAP measures exclude items that management believes do not reflect the Company’s ongoing operations.

The Company believes these non-GAAP financial measures provide meaningful supplemental information as they are used by the

Company’s management to evaluate the Company’s operating performance, enhance a reader’s understanding of the financial performance of the Company, and facilitate a better comparison among fiscal periods and performance relative to the Company's competitors, as the non-GAAP measures exclude items that management believes do not reflect the Company’s ongoing operations.

These non-GAAP results are presented for supplemental informational purposes only and should not be considered a substitute for the financial information presented in accordance with U.S.

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Non-cash stock-based compensation 6,821 7,854 8,313

Non-recurring, unusual or extraordinary (income) expense* 1,200 (4,472) —

Non-recurring, unusual or extraordinary expense* — 1,200 (4,472)

Non-cash amortization from acquisitions 2,127 2,126 2,126

Non-recurring M&A costs — — 277

Strategic advisory and professional fees** 7,325 — —

Income tax benefit relating to reconciling items (3,386) (2,011) (661)

Adjusted Net income (loss) (non-GAAP) 53,318 59,929 182,261

Adjusted Net income (non-GAAP) 62,173 53,318 59,929

Interest expense, net 8,481 11,311 7,485

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alliance during the third quarter of 2023.

During 2023, there were several transactions including the Company's exit from the Oben Holding Group S.A.

alliance, a licensee exit of legacy technology and the Company's exit of certain low-margin oximes products that resulted in a $4.5 million net pre-tax loss.

** Legal and professional fees associated with strategic regulatory matters and potential inorganic growth options, including costs associated with a transaction that the Company is no longer pursuing

*** Adjusted EBITDA Margin is defined as Adjusted EBITDA divided by Sales

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Liquidity and Capital Resources

We believe that cash balances and operating cash flows, together with available capacity under our credit agreement, as utilized during 2024, will provide adequate funds to support our current short-term operating objectives as well as our longer-term strategic plans, subject to the risks and uncertainties outlined below and in the risk factors previously disclosed in in Item 1A, Risk Factors.

principal source of liquidity is our cash flow generated from operating activities, which is expected to provide us with the ability to meet the majority of our short-term funding requirements for the next twelve months and beyond.

We believe that cash balances and operating cash flows, together with available capacity under our credit agreement, will provide adequate funds to support our current short-term operating objectives as well as our longer-term strategic plans, subject to the risks and uncertainties outlined below and in the risk factors previously disclosed in in Item 1A, Risk Factors.

Our principal source of liquidity is our cash flow generated from operating activities, which is expected to provide us with the ability to meet the majority of our short-term funding requirements for the next twelve months and beyond.

Our cash flows are affected by capital requirements and production volume, which may be materially impacted by unanticipated events such as unplanned downtime, material disruptions at our production facilities, the prices of our raw materials, general economic and industry trends and customer demand.

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The Company’s Consolidated Leverage Ratio financial covenant of its credit facility allows it to net up to $75 million of cash with debt.

Capital expenditures were approximately $134 million in 2024 compared to $107 million in 2023, reflecting planned increased spend on replacement maintenance and enterprise programs.

Capital expenditures were approximately $116 million in 2025 compared to $134 million in 2024, reflecting the planned progression of our SUSTAIN growth program, and refined execution timing to address critical enterprise risk mitigation.

We assumed from Honeywell International Inc.

("Honeywell") all HSE liabilities and compliance obligations related to the past and future operations of our current business as of the spin-off, as well as all HSE liabilities associated with three manufacturing locations assumed from Honeywell that are 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.

("Honeywell") all HSE liabilities and compliance obligations related to the past and future operations of our current business as of the spin-off, as well as all HSE liabilities associated with the three manufacturing locations assumed from Honeywell that are 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 and results of operations.

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The Company made no cash contributions to the defined benefit pension plan during the year ended December 31, 2025.

Additional contributions may be made in future years sufficient to satisfy pension funding requirements in those periods.

The Company expects to make pension plan contributions during 2026 sufficient to satisfy pension funding requirements estimated to be approximately $3 million, as well as evaluate contributions in future years sufficient to satisfy pension funding requirements in those periods.

As previously disclosed in Item 7.

Management's Discussion and Analysis of Financial Condition and Results of Operations, in connection with the Philadelphia Energy Solutions' shutdown, the Company received insurance settlement proceeds of approximately $26 million in the first quarter of 2025.

The Company made cash contributions to the defined contribution plan of $6.7 million and $6.8 million for the years ended December 31, 2025 and 2024, respectively.

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As of December 31, 2025, $62.0 million remained available for repurchase under the currently authorized repurchase program.

During the period from January 1, 2025 through January 31, 2025, 6,269 additional shares were repurchased for tax withholding obligations in connection with the vesting of equity awards at a weighted average market price of $28.35 and no additional shares were repurchased under the currently authorized repurchase program.

During the period from January 1, 2026 through January 30, 2026, no additional shares were repurchased for tax withholding obligations or under the currently authorized repurchase program.

At December 31, 2025, 2024 and 2023, the Company did not have any off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K or financing activities with special-purpose entities.

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The Company commenced the declaration of dividends on September 28, 2021.

The Company increased its quarterly dividend by 10% ($0.145 to $0.160) and 16% ($0.125 to $0.145) during the third quarter of 2023 and 2022, respectively.

The Company increased its quarterly dividend by 10% ($0.145 to $0.160) during the third quarter of 2023.

Dividends paid during 2025 and the dividend announced on the date of this filing are as follows:

Date of Announcement Date of Record Date Payable Dividend per Share Total Approximate Dividend Amount ($M)

Date of Announcement Date of Record Date Payable Dividend per Share Total Approximate Dividend Amount

2/20/2026 3/9/2026 3/23/2026 $0.16 $4.3

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Credit Agreement

On September 30, 2016, the Company as the borrower, entered into a Credit Agreement with Bank of America, as administrative agent (the "Original Credit Agreement"), which was amended on February 21, 2018 (the "First Amended and Restated Credit

Agreement"), and further amended on February 19, 2020 (the "Second Amended and Restated Credit Agreement").

The Second Amended and Restated Credit Agreement had a five-year term with a scheduled maturity date of February 21, 2023.

On October 27, 2021, the Company completed a refinancing of the Second Amended and Restated Credit Agreement by entering into a new Credit Agreement (the “Credit Agreement”), among the Company, the lenders party thereto, the swing line lenders party thereto, the letter of credit issuers party thereto and Truist Bank, as administrative agent, which provides for a new senior secured revolving credit facility in an aggregate principal amount of $500 million (the “Revolving Credit Facility”).

On October 27, 2021, the Company entered into a Credit Agreement, as amended on June 27, 2023 (the “Credit Agreement”), among the Company, the lenders party thereto, the swing line lenders party thereto, the letter of credit issuers party thereto and Truist Bank, as administrative agent, which provides for a senior secured revolving credit facility in an aggregate principal amount of $500 million (the “Revolving Credit Facility”).

Borrowings under the Revolving Credit Facility are subject to customary borrowing conditions.

The Revolving Credit Facility has a scheduled maturity date of October 27, 2026.

The Revolving Credit Facility provided for a scheduled maturity date of October 27, 2026 (which was extended pursuant to an October 2025 amendment, as described in more detail below).

The Credit Agreement permits the Company to utilize up to $40 million of the Revolving Credit Facility for the issuance of letters of credit and up to $40 million for swing line loans.

The Company has the option to establish a new class of term loans and/or increase the amount of the Revolving Credit Facility in an aggregate principal amount for all such incremental term loans and increases of the Revolving Credit Facility of up to the sum of (x) $175 million plus (y) an amount such that the Company’s Consolidated First Lien Secured Leverage Ratio (as defined in the Credit Agreement) would not be greater than 2.75 to 1.00, in each case, to the extent that any one or more lenders, whether or not currently party to the Credit Agreement, commits to be a lender for such amount or any portion thereof.

With the cessation of LIBOR on June 30, 2023 and subject to the First Amendment to the Credit Agreement, dated as of June 27, 2023, the Eurodollar Rate was replaced with the Adjusted Term SOFR as an alternative benchmark rate for purposes of the Credit Agreement.

The transition was effective July 1, 2023.

Borrowings under the Credit Agreement bear interest at a rate equal to either the sum of a base rate plus a margin ranging from 0.25% to 1.25% or the sum of an Adjusted Term SOFR rate plus a margin ranging from 1.25% to 2.25%, with either such margin varying according to the Company’s Consolidated Leverage Ratio (as defined in the Credit Agreement).

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We were in compliance with all of our covenants at December 31, 2025 and through the date of the filing of this Annual Report on Form 10-K.

On October 23, 2025, the Company entered into Amendment No.

2 (the “Amendment”) to the Credit Agreement (as further amended by the Amendment, the “Amended Credit Agreement”), among the Company, the guarantors, the lenders party thereto and Truist Bank, as administrative agent.

Pursuant to the Amendment, the Credit Agreement was amended to, among other things:

(i) extend the maturity date of the Revolving Credit Facility for participating Revolving Credit Lenders, as defined in the Amended Credit Agreement, in an aggregate principal amount of $452 million to the earlier of (x) October 27, 2027 and (y) the date of the termination in whole of the Revolving Credit Facility, pursuant to the terms of the Amended Credit Agreement, and (ii) effect certain other conforming changes and modifications consistent with the foregoing.

The remaining $48 million under the Revolving Credit Facility that was not extended will continue to mature on the earlier of (x) October 27, 2026 and (y) the date of the termination in whole of the Revolving Credit Facility pursuant to the terms of the Amended Credit Agreement.

We had a borrowed balance of $195 million under the Revolving Credit Facility at December 31, 2024.

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2025 compared with 2024

Net cash provided by operating activities increased by $17.9 million for the year ended December 31, 2024 versus the prior year due primarily to (i) a $23.8 million favorable impact from working capital (comprised of Accounts and other receivables, Inventories, Accounts payable and Deferred income and customer advances) year-over-year, with a $9.1 million favorable cash impact for the year ended December 31, 2024 compared to a $14.7 million unfavorable cash impact in the prior year period due primarily to the timing of payments and the favorable impact of customer advances, (ii) a $10.7 million favorable cash impact from Other assets and liabilities driven primarily by a change from net a pension liability to a net pension asset and an increase in prepaid expenses versus the prior year and (iii) an $8.0 million favorable cash impact from Accrued liabilities due to timing of payments.

These net favorable impacts were partially offset by (i) the unfavorable cash impact of $15.0 million and $7.4 million from Taxes payable and Taxes receivable, respectively, driven by the timing of income tax payments and (ii) a $10.5 million decrease in net income.

Cash used for investing activities increased by $32.0 million for the year ended December 31, 2024 versus the prior year period due primarily to higher cash payments for capital expenditures of approximately $26.3 million during the current year period primarily reflecting planned increased spend on replacement maintenance and enterprise programs.

Cash used for financing activities decreased by $5.2 million for the year ended December 31, 2024 versus the prior year due to net borrowings on the credit facility of $25.0 million for the year ended December 31, 2024 compared to net payments of $55.0 million during the prior year.

These net borrowings were partially offset by payments for share repurchases of $10.4 million and cash paid for dividends of approximately $17.1 million during the year ended December 31, 2024 compared to $46.2 million and $16.7 million during the prior year periods, respectively.

Net cash provided by operating activities decreased by $12.5 million for the year ended December 31, 2025 versus the prior year due primarily to a $11.7 million unfavorable impact from the timing and fluctuation of working capital (comprised of Accounts and other receivables, Inventories, Accounts payable and Deferred income and customer advances) year-over-year and a $5.0 million unfavorable cash impact from Other assets and liabilities driven primarily by a change in our pension versus the prior year.

These net unfavorable impacts were partially offset by a $5.1 million increase in net income.

Cash used for investing activities decreased by $20.3 million for the year ended December 31, 2025 versus the prior year period due primarily to lower cash payments for capital expenditures of approximately $17.3 million during the current year period primarily reflecting disciplined spend on replacement maintenance while maintaining progress on growth and other enterprise programs.

Cash used for financing activities decreased by $2.7 million for the year ended December 31, 2025 versus the prior year due to payments for share repurchases of $1.7 million during the year ended December 31, 2025 compared to $10.4 million during the prior year period partially offset by net borrowings of $20.0 million for the year ended December 31, 2025 compared to net borrowings of $25.0 million during the prior year period.

Capital Expenditures

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Purchases of property, plant and equipment $ 116,445 $ 133,722 $ 107,377

Capital expenditures increased $26.3 million from 2023 to 2024 reflecting planned increased spend on replacement maintenance and enterprise programs.

Capital expenditures decreased $17.3 million from 2024 to 2025 reflecting disciplined spend on capital expenditures and enterprise programs.

Capital expenditures are deployed for various ongoing investments and initiatives to improve reliability, yield and quality, expand production capacity and comply with HSE regulations.

For 2025, we expect our total capital expenditures to be approximately $140 million to $160 million reflecting the planned progression of growth projects including our SUSTAIN (Sustainable U.S.

Sulfate To Accelerate Increased Nutrition) program, and refined execution timing to address critical enterprise risk mitigation.

For 2026, we expect our total capital expenditures to be approximately $75 million to $95 million reflecting a risk-based prioritization of base investments and enterprise programs with continued progression of growth programs including our SUSTAIN program.

Critical Accounting Policies and Estimates (Dollars in thousands, unless otherwise noted)

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The preparation of our Consolidated Financial Statements in conformity with U.S.

GAAP is based on the selection and application of accounting policies that require management to make significant estimates and assumptions about the effects of matters that are inherently uncertain and that affect the reported amounts, including, but not limited to, inventory valuations, impairment of goodwill, stock-based compensation, long-term employee benefit obligations, income taxes and environmental matters.

GAAP is based on the selection and application of accounting policies that require management to make significant estimates and assumptions about the effects of matters that are inherently uncertain and that affect the reported amounts, including, but not limited to, inventory valuations, impairment of goodwill, long-term employee benefit obligations, income taxes and environmental matters.

Management’s estimates are based on historical experience, facts and circumstances available at the time and various other assumptions that are believed to be reasonable.

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Goodwill is subject to impairment testing annually on the last day of our October close, or whenever events or changes in circumstances indicate that the carrying amount may not be fully recoverable.

Management first assesses qualitative factors as described in ASC 350 to determine whether it is necessary to perform the quantitative goodwill impairment test.

Potential impairment is identified by comparing the fair value of a reporting unit to the carrying value, including goodwill.

The Company completed its annual goodwill impairment test as of October 26, 2024 and, based on the results of the Company's assessment of qualitative factors, it was determined that it was not necessary to perform the quantitative goodwill impairment test.

Finite-Lived Intangible Assets – Other intangible assets with determinable lives consist of customer relationships, trademarks, patents and other intangibles and are amortized over their estimated useful lives, ranging from 5 to 20 years.

To determine if goodwill is potentially impaired, we have the option to perform a qualitative assessment to determine whether it is more likely than not that the fair value is less than the carrying value.

The Company’s practice is to perform a quantitative impairment assessment at least every three years.

Under the qualitative assessment, the Company considers several factors, including the enterprise value from the previous quantitative test and the excess of fair value over carrying value from such test, macroeconomic conditions (including changes in interest rates and discount rates), industry and market considerations, recent and projected financial performance of the Company, as well as other factors.

The Company has concluded that, as of the fourth quarter of 2025, it is not more likely than not that an impairment of the goodwill balances exists.

Our qualitative analysis reflects our best estimates of the impacts of the cyclical nature of the industries in which we operate, as well as the cycles of fluctuating supply and demand for each of our products resulting in changes in selling prices and margins.

It is possible that in the future there may be changes in industry trends, estimates and assumptions, including the timing and amount of future cash flows, margins, growth rates, market participant assumptions, comparable benchmark companies and related multiples and discount rates, which could impact estimates of fair value.

Significant and adverse changes to any one or more of the above-noted estimates and assumptions could result in an impairment.

Revenue Recognition – The Company recognizes revenue upon the transfer of control of goods or services to customers at amounts that reflect the consideration expected to be received.

AdvanSix primarily recognizes revenues when title and control of the product transfers from the Company to the customer.

Outbound shipping costs incurred by the Company are not included in revenues but are reflected as freight expense in Costs of goods sold in the Consolidated Statements of Operations.

AdvanSix primarily recognizes revenues when title and control of the product

transfers from the Company to the customer.

Outbound shipping costs incurred by the Company are not included in revenues but are reflected as freight expense in Cost of goods sold in the Consolidated Statements of Operations.

Sales of our products to customers are made under a purchase order, and in certain cases in accordance with the terms of a master services agreement.

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Management considers the performance obligation with respect to such purchase order satisfied at the point in time when control of the product is transferred to the customer, which is indicated by shipment of the product and transfer of title and risk of loss to the customer.

Transfer of control to the customer occurs through various modes of shipment, including trucks, railcars, and vessels, and follows a variety of commercially acceptable shipping or destination point terms pursuant to the arrangement with the customer.

Transfer of control to the customer occurs through various modes of shipment, including trucks, railcars, and vessels, and generally follows commercially acceptable shipping point terms pursuant to the arrangement with the customer.

In more limited circumstances, the Company recognizes revenue from sales of products that are subject to inventory consignment agreements, and transfer of control generally occurs when the customer pulls product from the consignment inventory location.

Variable consideration is estimated for future volume rebates and early pay discounts on certain products and product returns.

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The Company also utilizes the practical expedient in Topic 606 and does not include an adjustment for the effects of a significant financing component given the expected period duration of one year or less.

Stock-Based Compensation Plans – The principal awards issued under our stock-based compensation plans, which are described in "Note 14.

Stock-Based Compensation Plans" to the Consolidated Financial Statements included in Item 8 of this Form 10-K, are non-qualified stock options, performance stock units and restricted stock units.

The cost for such awards is measured at the grant date based on the fair value of the award.

The value of the portion of the award that is ultimately expected to vest, including the impact of the Company's anticipated performance against certain metrics for performance stock units, is recognized as expense over the requisite service periods (generally the vesting period of the equity award) and is included in selling, general and administrative expenses.

Estimates of future performance are utilized to determine the underlying expense for shares expected to vest.

Forfeitures are estimated at the time of grant to recognize expense for those awards that are expected to vest and are based on our historical forfeiture rates.

Pension Benefits – We have a defined benefit plan covering certain employees primarily in the U.S.

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We use actuarial methods and assumptions in the valuation of defined benefit obligations and the determination of net periodic pension income or expense.

over subsequent periods when net actuarial gains or losses are in excess of 10% of the greater of the fair value of plan assets or the plan’s projected benefit obligation.

Differences between actual and expected results or changes in the value of defined benefit obligations and fair value of plan assets, if any, are not recognized in earnings as they occur but rather systematically over subsequent periods when net actuarial gains or losses are in excess of 10% of the greater of the fair value of plan assets or the plan’s projected benefit obligation.

A 25 basis point increase in the discount rate would result in a decrease of approximately $0.5 million to the net periodic benefit cost for 2026, while a 25 basis point decrease in the discount rate would result in an increase of approximately $0.5 million to the net periodic benefit cost for 2026.

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The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income and the reversal of deferred tax liabilities during the period in which related temporary differences become deductible.

We adopted the provisions of ASC 740 related to the accounting for uncertainty in income taxes recognized in an enterprise’s consolidated financial statements.

We apply the provisions of ASC 740 related to the accounting for uncertainty in income taxes recognized in an enterprise’s consolidated financial statements.

ASC 740 prescribes a comprehensive model for the financial statement recognition, measurement, presentation and disclosure of uncertain tax positions taken or expected to be taken in income tax returns.

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Our policy is to classify tax related interest and penalties, if any, as a component of income tax expense.

No interest or penalties related to unrecognized income tax benefits were recorded during the years ended December 31, 2024, 2023 and 2022.

No interest or penalties related to unrecognized income tax benefits were recorded during the years

ended December 31, 2025, 2024 and 2023.

As of December 31, 2025 and 2024, no liability for unrecognized tax benefits was required to be reported.

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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 7. Management’s Discussion and Analysis