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, 2026 2025 2026 2025 Sales $ 421,284 $ 410,022 $ 825,468 $ 787,813 Costs, expenses and other: Cost of goods sold 390,183 351,308 790,565 675,628 Selling, general and administrative expenses 22,054 25,416 44,572 48,825 Interest expense, net 2,608 2,255 5,038 3,796 Other non-operating income, net ( 215 ) ( 607 ) ( 684 ) ( 1,015 ) Total costs, expenses and other 414,630 378,372 839,491 727,234 Income (loss) before taxes 6,654 31,650 ( 14,023 ) 60,579 Income tax expense (benefit) 3,406 279 ( 1,725 ) 5,864 Net income (loss) $ 3,248 $ 31,371 $ ( 12,298 ) $ 54,715 Earnings per common share Basic $ 0.12 $ 1.17 $ ( 0.46 ) $ 2.04 Diluted $ 0.12 $ 1.15 $ ( 0.46 ) $ 2.01 Weighted average common shares outstanding Basic 27,046,372 26,896,037 27,013,738 26,867,252 Diluted 27,602,088 27,223,309 27,013,738 27,248,976 See accompanying notes to Condensed Consolidated Financial Statements. 3 ADVANSIX INC. CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited) (Dollars in thousands) Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Net income (loss) $ 3,248 $ 31,371 $ ( 12,298 ) $ 54,715 Foreign exchange translation adjustment ( 22 ) 24 ( 14 ) 35 Cash-flow hedges — — — 7 Other comprehensive income (loss), net of tax ( 22 ) 24 ( 14 ) 42 Comprehensive income (loss) $ 3,226 $ 31,395 $ ( 12,312 ) $ 54,757 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, 2026 December 31, 2025 ASSETS Current assets: Cash and cash equivalents $ 7,217 $ 19,766 Accounts and other receivables – net 187,429 154,102 Inventories – net 194,145 236,495 Taxes receivable 20,510 21,605 Other current assets 15,560 8,639 Total current assets 424,861 440,607 Property, plant and equipment – net 964,867 963,718 Operating lease right-of-use assets 147,454 164,494 Goodwill 56,192 56,192 Intangible assets 38,570 40,095 Other assets 41,072 41,042 Total assets $ 1,673,016 $ 1,706,148 LIABILITIES Current liabilities: Accounts payable $ 243,287 $ 284,016 Accrued liabilities 43,558 45,945 Income taxes payable 73 1,100 Operating lease liabilities – short-term 42,841 44,354 Deferred income and customer advances 1,980 14,536 Total current liabilities 331,739 389,951 Deferred income taxes 152,172 154,061 Operating lease liabilities – long-term 106,100 121,201 Line of credit – long-term 275,000 215,000 Other liabilities 11,093 10,719 Total liabilities 876,104 890,932 COMMITMENTS AND CONTINGENCIES (Note 9) STOCKHOLDERS' EQUITY Common stock, par value $ 0.01 ; 200,000,000 shares authorized; 33,393,066 shares issued and 27,001,186 outstanding at June 30, 2026; 33,177,824 shares issued and 26,864,035 outstanding at December 31, 2025 334 332 Preferred stock, par value $ 0.01 ; 50,000,000 shares authorized and 0 shares issued and outstanding at June 30, 2026 and December 31, 2025 — — Treasury stock at par ( 6,391,880 shares at June 30, 2026; 6,313,789 shares at December 31, 2025) ( 64 ) ( 63 ) Additional paid-in capital 145,991 142,932 Retained earnings 641,669 663,019 Accumulated other comprehensive income 8,982 8,996 Total stockholders' equity 796,912 815,216 Total liabilities and stockholders' equity $ 1,673,016 $ 1,706,148 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, 2026 2025 Cash flows from operating activities: Net income (loss) $ ( 12,298 ) $ 54,715 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 41,751 38,639 (Gain) loss on disposal of assets 134 ( 177 ) Deferred income taxes ( 1,889 ) 6,646 Stock-based compensation 3,878 4,287 Amortization of deferred financing fees 304 309 Changes in assets and liabilities, net of business acquisitions: Accounts and other receivables ( 33,341 ) ( 13,994 ) Inventories 42,350 ( 9,378 ) Taxes receivable 1,095 ( 14,740 ) Accounts payable ( 22,934 ) 12,423 Income taxes payable ( 1,027 ) ( 663 ) Accrued liabilities ( 2,001 ) 561 Deferred income and customer advances ( 12,556 ) ( 35,680 ) Other assets and liabilities ( 8,760 ) ( 10,395 ) Net cash provided by (used for) operating activities ( 5,294 ) 32,553 Cash flows from investing activities: Expenditures for property, plant and equipment ( 56,650 ) ( 62,327 ) Other investing activities ( 222 ) ( 5,891 ) Net cash used for investing activities ( 56,872 ) ( 68,218 ) Cash flows from financing activities: Borrowings from line of credit 261,500 231,500 Repayments of line of credit ( 201,500 ) ( 186,500 ) Principal payments of finance leases ( 513 ) ( 491 ) Dividend payments ( 8,627 ) ( 8,580 ) Purchase of treasury stock ( 1,397 ) ( 1,537 ) Issuance of common stock 154 155 Net cash provided by financing activities 49,617 34,547 Net change in cash and cash equivalents ( 12,549 ) ( 1,118 ) Cash and cash equivalents at beginning of period 19,766 19,564 Cash and cash equivalents at the end of period $ 7,217 $ 18,446 Supplemental non-cash investing activities: Capital expenditures included in accounts payable $ 9,301 $ 14,762 Supplemental cash activities: Cash paid for interest $ 4,452 $ 2,297 Cash paid for income taxes, net of refund $ 3,795 $ 15,080 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, 2025 33,177,824 $ 332 $ 142,932 $ 663,019 $ ( 63 ) $ 8,996 $ 815,216 Net loss — — — ( 15,546 ) — — ( 15,546 ) Comprehensive income Foreign exchange translation adjustments — — — — — 8 8 Other comprehensive income, net of tax — — — — — 8 8 Issuance of common stock 167,501 2 152 — — — 154 Purchase of treasury stock ( 72,500 shares) — — ( 1,274 ) — ( 1 ) — ( 1,275 ) Stock-based compensation — — 2,045 — — — 2,045 Dividends — — 211 ( 4,524 ) — — ( 4,313 ) Balance at March 31, 2026 33,345,325 334 144,066 642,949 ( 64 ) 9,004 796,289 Net income — — — 3,248 — — 3,248 Comprehensive income Foreign exchange translation adjustments — — — — — ( 22 ) ( 22 ) Other comprehensive loss, net of tax — — — — — ( 22 ) ( 22 ) Issuance of common stock 47,741 — — — — — — Purchase of treasury stock ( 5,591 shares) — — ( 122 ) — — — ( 122 ) Stock-based compensation — — 1,833 — — — 1,833 Dividends — — 214 ( 4,528 ) — — ( 4,314 ) Balance at June 30, 2026 33,393,066 $ 334 $ 145,991 $ 641,669 $ ( 64 ) $ 8,982 $ 796,912 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, 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 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 vertically integrated chemistry company that produces essential materials for 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. 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, 2026, and its results of operations for the three and six months ended June 30, 2026 and 2025 and cash flows for the six months ended June 30, 2026 and 2025. 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, 2025. 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, 2026 and 2025 were July 4, 2026 and June 28, 2025, respectively, which resulted in six additional reporting days in the six month period from our normal quarterly closing procedures. Liabilities to creditors to whom we have issued checks that remained outstanding at June 30, 2026 and December 31, 2025 aggregated to $ 3.4 million and $ 4.9 million, respectively. These were included in Cash and cash equivalents and Accounts payable in the Condensed Consolidated Balance Sheets. As of June 30, 2026, the Company has repurchased a total of 6,391,880 shares of common stock, including 1,146,424 shares withheld to cover tax withholding obligations in connection with the vesting of awards, for an aggregate of $ 195.5 million at a weighted average market price of $ 30.58 per share. As of June 30, 2026, approximately $ 62.0 million remained available for share repurchases under the current authorization approved by the Company's Board of Directors (the "Board") on February 17, 2023. The Company has no t repurchased any shares under the currently authorized repurchase program since June 2024. During the period July 1, 2026 through July 31, 2026, no additional shares were repurchased for tax withholding obligations or under the 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 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 9 ADVANSIX INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands, except share and per share amounts and as otherwise noted) 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. On December 8, 2025, the FASB issued ASU No. 2025-11: Interim Reporting (Topic 270), Narrow Scope Improvements. The amendments in this ASU provide a comprehensive list of interim disclosures that are required by GAAP. The amendments also clarify the applicability of Topic 270, the types of interim reporting, and the form and content of interim financial statements in accordance with GAAP to enhance consistency in interim reporting for all entities. The update is effective for interim reporting periods within annual reporting periods beginning after December 15, 2027 for public business entities. Early adoption is permitted. The amendments in this update can be applied either prospectively or 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 its consolidated financial position or results of operations. On December 4, 2025, the FASB issued ASU No. 2025-10: Accounting for Government Grants Received by Business Entities. The amendments in this ASU establish the accounting for a government grant received. The amendments require that a grant received should not be recognized until (1) it is probable that (a) an entity will comply with conditions attached to the grant and (b) the grant will be received and (2) an entity meets the recognition guidance for a grant related to an asset or to income. The amendments require that a grant related to an asset be recognized on the balance sheet as the entity incurs the related costs for which the grant is intended to compensate, either as (1) deferred income (the deferred income approach) or (2) an adjustment to the cost basis in determining the carrying amount of the asset (the cost accumulation approach). A grant related to income and a grant related to an asset for which the deferred income approach is elected should be recognized in earnings on a systematic and rational basis over the periods in which an entity recognizes as expenses the costs for which the grant is intended to compensate. The amendments require that an entity present a grant related to income and a grant related to an asset for which the deferred income is elected as part of earnings either (1) separately under a general heading such as other income or (2) deducted from the related expense. In addition, the amendments require that an entity provide disclosures, including the nature of the government grant received, the accounting policies used to account for the grant, and significant terms and conditions of the grant. For public business entities, this update is effective for annual reporting periods beginning after December 15, 2028, and interim reporting periods within those annual reporting periods. Early adoption is permitted in both interim and annual reporting periods in which financial statements have not yet been issued or made available for issuance. The amendments in this ASU require that a business entity apply the guidance using a modified prospective approach, a modified retrospective approach or a retrospective approach to all government grants through a cumulative effect adjustment to the opening balance of retained earnings as of the beginning of the earliest period presented. The Company is evaluating the pronouncement and does not expect adoption to have a material impact on its 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. 3. Revenues Revenue Recognition 10 ADVANSIX INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands, except share and per share amounts and as otherwise noted) AdvanSix serves approximately 375 customers annually, primarily in the United States, spanning a wide variety of industries worldwide. For the three months ended June 30, 2026 and 2025, the Company's ten largest customers accounted for approximately 36 % and 43 % of total sales, respectively. For the six months ended June 30, 2026 and 2025, the Company's ten largest customers accounted for approximately 36 % and 39 % 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 the three months ended June 30, 2026 and 2025, the Company's sales to Shaw were 8 % and 9 % of our total sales, respectively. For each of the six months ended June 30, 2026 and 2025, the Company's sales to Shaw were 9 % of our total sales. The Company's revenue by product line, and related approximate percentage of total sales, for the three and six months ended June 30, 2026 and 2025 were as follows: Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Nylon $ 100,218 24 % $ 79,503 20 % $ 188,685 23 % $ 167,871 21 % Caprolactam 62,644 15 % 66,424 16 % 130,413 16 % 133,856 17 % Plant Nutrients 131,439 31 % 156,770 38 % 272,074 33 % 285,011 36 % Chemical Intermediates 126,983 30 % 107,325 26 % 234,296 28 % 201,075 26 % Total $ 421,284 100 % $ 410,022 100 % $ 825,468 100 % $ 787,813 100 % The Company's revenues by geographic area, and related approximate percentage of total sales, for the three and six months ended June 30, 2026 and 2025 were as follows: Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 United States $ 354,322 84 % $ 358,671 87 % $ 690,319 84 % $ 679,118 86 % International* 66,962 16 % 51,351 13 % 135,149 16 % 108,695 14 % Total $ 421,284 100 % $ 410,022 100 % $ 825,468 100 % $ 787,813 100 % * Predominantly Latin America, Europe, Middle East and Africa (EMEA) 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, 2026: Opening balance January 1, 2026 $ 14,536 Additional cash advances — Less amounts recognized in revenues ( 12,556 ) Ending balance June 30, 2026 $ 1,980 The Company expects to recognize as revenue the June 30, 2026 ending balance of Deferred income and customer advances which are predominantly driven by our ammonium sulfate pre-buy program, 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 an d, where appropriate, dilu ted 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, 2026 and 2025 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, 2026 2025 2026 2025 Basic Net income (loss) $ 3,248 $ 31,371 $ ( 12,298 ) $ 54,715 Weighted average common shares outstanding 27,046,372 26,896,037 27,013,738 26,867,252 EPS – Basic $ 0.12 $ 1.17 $ ( 0.46 ) $ 2.04 Diluted Dilutive effect of equity awards and other stock-based holdings 555,716 327,272 — 381,724 Weighted average common shares outstanding 27,602,088 27,223,309 27,013,738 27,248,976 EPS – Diluted $ 0.12 $ 1.15 $ ( 0.46 ) $ 2.01 Where appropriate, 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. Where appropriate, 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, 2026 and 2025 were as follows: Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Options and stock equivalents 642,061 1,005,749 1,040,112 948,963 Dividend activity for the three and six months ended June 30, 2026 and 2025 was as follows: Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Cash dividends declared per share $ 0.16 $ 0.16 $ 0.32 $ 0.32 Aggregate dividends paid to shareholders $ 4,314 $ 4,290 $ 8,627 $ 8,580 5. Accounts and Other Receivables – Net June 30, 2026 December 31, 2025 Accounts receivables $ 187,078 $ 153,059 Other 893 1,438 Total accounts and other receivables 187,971 154,497 Less – allowance for credit losses ( 542 ) ( 395 ) Total accounts and other receivables – net $ 187,429 $ 154,102 6. Inventories 12 ADVANSIX INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands, except share and per share amounts and as otherwise noted) June 30, 2026 December 31, 2025 Raw materials $ 70,643 $ 116,248 Semi-finished and finished goods 144,857 167,498 Spares and other 34,069 32,877 249,569 316,623 Reduction to LIFO cost basis ( 55,424 ) ( 80,128 ) Total inventories $ 194,145 $ 236,495 Substantially all of the Company’s inventories at June 30, 2026 and December 31, 2025 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, 2026. The excess of replacement cost over the carrying value of total inventories subject to LIFO was $ 79.4 million and $ 61.3 million at June 30, 2026 and December 31, 2025, respectively. 7. Leases The Company determines 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, 2026 2025 2026 2025 Finance lease cost: Amortization of right-of-use asset $ 259 $ 249 $ 544 $ 503 Interest on lease liabilities 34 38 72 79 Total finance lease cost 293 287 616 582 Operating lease cost 13,768 13,999 27,064 27,077 Short-term lease cost 1,390 820 3,226 1,616 Total lease cost $ 15,451 $ 15,106 $ 30,906 $ 29,275 As of June 30, 2026, 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 three or six months ended June 30, 2026. To determine if goodwill is potentially impaired, we may perform either a qualitative or quantitative assessment to determine whether it is more likely than not that the fair value is less than the carrying value. The Company most recently performed a qualitative assessment in the fourth quarter of 2025 whereby we considered the enterprise value from the previous 2023 quantitative test (including the underlying excess fair value over carrying value), macroeconomic conditions (including changes in interest and discount rates), industry and market considerations, recent and projected financial performance, as well as other factors. The Company concluded that it was not more likely than not that an impairment of the goodwill balances existed. 13 ADVANSIX INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands, except share and per share amounts and as otherwise noted) In the quarter ended June 30, 2026, the Company identified certain events and circumstances, specifically a sustained decline in market capitalization, that required an interim evaluation of whether it was more likely than not that its fair value was less than its carrying value. Accordingly, the Company performed a quantitative goodwill impairment assessment during the quarter ended June 30, 2026. The fair value of the reporting unit was determined using a combination of an income approach, based on discounted cash flows, and a market approach, utilizing comparable public company multiples. Under the income approach, the fair value of the reporting unit is estimated based on the present value of the projected future cash flows. Management's cash flow projections for the reporting unit included significant judgments and assumptions, including revenue growth rate, EBITDA margin, future capital expenditures, market participants cost synergies and discount rate. Under the market approach, management uses selected financial information of publicly-traded companies that compare to the reporting unit to derive a market-based multiple. The Company considered the difference between net book value and market capitalization in assessing the reasonableness of the estimated fair value of its reporting unit. Based on the results of the quantitative assessment completed during the second quarter, the Company concluded that the estimated fair value of the reporting unit was in excess of its carrying value, resulting in no impairment. Our qualitative and quantitative assessment 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. Finite-Lived Intangible Assets Intangible assets subject to amortization were as follows: June 30, 2026 December 31, 2025 Gross Carrying Amount Accumulated Amortization Net Book Value Gross Carrying Amount Accumulated Amortization Net Book Value Customer relationships $ 36,820 $ ( 8,526 ) $ 28,294 $ 36,820 $ ( 7,572 ) $ 29,248 Licenses 18,451 ( 8,303 ) 10,148 18,451 ( 7,842 ) 10,609 Trade names 1,100 ( 972 ) 128 1,100 ( 862 ) 238 Total $ 56,371 $ ( 17,801 ) $ 38,570 $ 56,371 $ ( 16,276 ) $ 40,095 For each of the three months ended June 30, 2026 and June 30, 2025, the Company recorded amortization expense on intangible assets of $ 0.8 million. For each of the six months ended June 30, 2026 and June 30, 2025, 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) 14 ADVANSIX INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands, except share and per share amounts and as otherwise noted) 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 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 or results of operations. 10. Income Taxes The provision for income taxes was $ 3.4 million and $ 0.3 million for the three months ended June 30, 2026 and 2025, respectively, resulting in an effective tax rate of 51.2 % and 0.9 %, respectively. The provision (benefit) for income taxes was ($ 1.7 million) and $ 5.9 million for the six months ended June 30, 2026 and 2025, respectively, resulting in an effective tax rate of 12.3 % and 9.7 %, respectively. The Company’s provision (benefit) for income taxes in interim periods is computed by applying an estimated annual effective tax rate against Income (loss) before taxes for the period in addition to recording any tax effects of discrete items for the quarter. The Company’s effective tax rates for the three and six months ended June 30, 2026 and 2025 differed from the U.S. federal statutory rate primarily due to state taxes and executive compensation deduction limitations which generally increase the rate, offset by research tax credits that generally decrease the rate. These adjustments have the inverse impact on the effective tax rate in periods with a loss before taxes. Changes in our forecasted earnings and taxable income between the first and second quarter have impacted our effective tax rate for the three and six months ended June 30, 2026. 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. 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. Several of the major business provisions in the Act became effective in 2025 while other business tax changes are effective for the 2026 tax year. The major business provisions in the Act reduced our cash taxes in 2025 and are expected to reduce our cash taxes in future periods. 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 the Company's supply chain finance program was approximately $ 12.2 million as of June 30, 2026 and approximately $ 9.0 million as of December 31, 2025. 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. 15 ADVANSIX INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands, except share and per share amounts and as otherwise noted) 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, 2026 2025 2026 2025 Revenue $ 421,284 $ 410,022 $ 825,468 $ 787,813 Less: Variable costs of goods sold * 219,925 175,178 437,631 328,082 Plant costs 126,093 127,376 254,685 249,229 Freight and distribution costs 42,822 46,211 94,061 93,614 Selling, general, and administrative expense 22,054 25,416 44,572 48,825 Other segment items ** 7,142 4,470 6,817 13,348 Segment net income (loss) $ 3,248 $ 31,371 $ ( 12,298 ) $ 54,715 *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 Dividends As announced on August 7, 2026, the Board declared a quarterly cash dividend of $ 0.16 per share on the Company's common stock, payable on September 1, 2026 to stockholders of record as of the close of business on August 18, 2026. 16