Document

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q


(Mark One)
ý			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2018


o			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____ to _____

Commission File Number: 1-37774


AdvanSix Inc.
(Exact Name of Registrant as Specified in its Charter)


Delaware						81-2525089
(State or Other Jurisdiction of Incorporation or Organization)						(I.R.S. Employer Identification No.)


300 Kimball Drive, Suite 101, Parsippany, New Jersey						07054
(Address of Principal Executive Offices)						(Zip Code)

(973) 526-1800

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ý No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.


Large accelerated filer ý	Accelerated filer o	Non-accelerated filer o	Smaller reporting company o
			Emerging growth company o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No ý

The Registrant had 29,802,868 shares of common stock, $0.01 par value, outstanding at October 26, 2018.

ADVANSIX INC.

FORM 10-Q

TABLE OF CONTENTS


Part I.	FINANCIAL INFORMATION

Item 1.	Financial Statements	3
	Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2018 and 2017 (unaudited)	3
	Condensed Consolidated Statements of Comprehensive Income for the Three and Nine Months Ended September 30, 2018 and 2017 (unaudited)	4
	Condensed Consolidated Balance Sheets as of September 30, 2018 and December 31, 2017 (unaudited)	5
	Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2018 and 2017 (unaudited)	6
	Notes to Condensed Consolidated Financial Statements (unaudited)	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	16
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	23
Item 4.	Controls and Procedures	24

Part II.	OTHER INFORMATION	25

Item 1.	Legal Proceedings	25
Item 1A.	Risk Factors	25
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	25
Item 6.	Exhibits	26
	Signature	27

ITEM 1. FINANCIAL STATEMENTS

ADVANSIX INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(Dollars in thousands, except share and per share amounts)


	Three Months Ended September 30,						Nine Months Ended September 30,
	2018		2017		2018		2017
Sales	$	368,653	$	366,660	$	1,128,350	$	1,104,805
Costs, expenses and other:
Costs of goods sold	343,434		309,408		1,007,712		922,604
Selling, general and administrative expenses	18,057		19,050		55,189		53,914
Other non-operating expense (income), net	1,453		2,390		6,581		7,153
Total costs, expenses and other	362,944		330,848		1,069,482		983,671

Income before taxes	5,709		35,812		58,868		121,134
Income taxes	229		14,538		13,385		46,803
Net income	$	5,480	$	21,274	$	45,483	$	74,331

Earnings per common share
Basic	$	0.18	$	0.70	$	1.50	$	2.44
Diluted	$	0.18	$	0.68	$	1.46	$	2.40
Weighted average common shares outstanding
Basic	30,160,991		30,482,966		30,375,873		30,482,966
Diluted	30,983,834		31,159,710		31,189,640		31,013,606

See accompanying notes to Condensed Consolidated Financial Statements.

ADVANSIX INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

(Dollars in thousands)


	Three Months Ended September 30,						Nine Months Ended September 30,
	2018		2017		2018		2017
Net income	$	5,480	$	21,274	$	45,483	$	74,331
Foreign exchange translation adjustment	(8)		(12)		(26)		(15)

Pension obligation adjustments	—		—		410		—
Other comprehensive income (loss), net of tax	(8)		(12)		384		(15)
Comprehensive income	$	5,472	$	21,262	$	45,867	$	74,316

See accompanying notes to Condensed Consolidated Financial Statements.

ADVANSIX INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(Dollars in thousands, except share and per share amounts)


	September 30, 2018		December 31, 2017
ASSETS
Current assets:
Cash and cash equivalents	$	20,206	$	55,432
Accounts and other receivables – net	149,099		196,003
Inventories – net	115,026		129,208
Other current assets	3,900		7,130
Total current assets	288,231		387,773
Property, plant and equipment – net	639,728		612,612
Goodwill	15,005		15,005

Other assets	37,312		34,884
Total assets	$	980,276	$	1,050,274

LIABILITIES
Current liabilities:
Accounts payable	$	209,239	$	227,712
Accrued liabilities	26,310		35,013

Deferred income and customer advances	2,295		17,194
Line of credit – short-term	9,400		—
Current portion of long-term debt	—		16,875
Total current liabilities	247,244		296,794
Deferred income taxes	101,092		92,276
Line of credit – long-term	190,600		—
Long-term debt	—		248,339
Postretirement benefit obligations	28,145		33,396
Other liabilities	4,350		3,144
Total liabilities	571,431		673,949

COMMITMENTS AND CONTINGENCIES (Note 9)

STOCKHOLDERS' EQUITY
Common stock, par value $0.01; 200,000,000 shares authorized; 30,555,715 shares issued and 29,991,468 outstanding at September 30, 2018; 30,482,966 shares issued and outstanding at December 31, 2017	306		305
Preferred stock, par value $0.01; 50,000,000 shares authorized and 0 shares issued and outstanding at September 30, 2018 and December 31, 2017	—		—
Treasury stock at par (564,247 shares at September 30, 2018; 0 shares at December 31, 2017)	(6)		—
Additional paid-in capital	250,149		263,081
Retained earnings	167,058		121,985
Accumulated other comprehensive loss	(8,662)		(9,046)
Total stockholders' equity	408,845		376,325
Total liabilities and stockholders' equity	$	980,276	$	1,050,274

See accompanying notes to Condensed Consolidated Financial Statements.

ADVANSIX INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(Dollars in thousands)


	Nine Months Ended September 30,
	2018		2017
Cash flows from operating activities:
Net income	$	45,483	$	74,331
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	38,905		35,524
Loss on disposal of assets	1,560		1,236
Deferred income taxes	8,816		40,478
Stock based compensation	7,506		5,686
Accretion of deferred financing fees	1,696		444
Changes in assets and liabilities:
Accounts and other receivables	46,878		(20,825)
Inventories	14,182		28,504
Accounts payable	(10,675)		(33,893)
Income taxes payable	—		(68)
Accrued liabilities	(9,703)		2,234
Deferred income and customer advances	(14,899)		(24,766)
Other assets and liabilities	(2,014)		(10,414)
Net cash provided by operating activities	127,735		98,471

Cash flows from investing activities:
Expenditures for property, plant and equipment	(72,650)		(67,206)
Other investing activities	(1,656)		(5,387)
Net cash used for investing activities	(74,306)		(72,593)

Cash flows from financing activities:

Payment of long-term debt	(266,625)		—

Borrowings from line of credit	284,500		308,500
Payments of line of credit	(84,500)		(308,500)
Payment of line of credit fees	(1,362)		—

Principal payments under capital lease	(225)		(91)

Purchase of treasury shares	(20,443)		—

Net cash used for financing activities	(88,655)		(91)

Net change in cash and cash equivalents	(35,226)		25,787
Cash and cash equivalents at beginning of period	55,432		14,199
Cash and cash equivalents at the end of period	$	20,206	$	39,986

Supplemental non-cash investing activities:
Capital expenditures included in accounts payable	$	17,649	$	17,228

Supplemental cash investing activities:
Cash paid for interest	$	4,406	$	7,976
Cash paid for income taxes	$	7,254	$	12,695

See accompanying notes to Condensed Consolidated Financial Statements.

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 an integrated manufacturer of Nylon 6, a polymer resin which is a synthetic material used by our customers to produce engineered plastics, fibers, filaments and films that, in turn, are used in such end-products as automotive and electronic components, carpets, sports apparel, fishing nets and food and industrial packaging. As a result of our backward integration and the configuration of our manufacturing facilities, we also sell a variety of other products, all of which are produced as part of our integrated Nylon 6 resin manufacturing process including caprolactam, ammonium sulfate fertilizers, acetone and other chemical intermediates.

Separation from Honeywell

On October 1, 2016, Honeywell International Inc. (“Honeywell”) completed the separation of AdvanSix. The separation was completed by Honeywell distributing (the “Distribution”) all of the then outstanding shares of common stock of AdvanSix on October 1, 2016 (the “Distribution Date”) through a dividend in kind of AdvanSix common stock, par value $0.01, to holders of Honeywell common stock as of the close of business on the record date of September 16, 2016 who held their shares through the Distribution Date (the “Spin-Off”). Each Honeywell stockholder who held their shares through the Distribution Date received one share of AdvanSix common stock for every 25 shares of Honeywell common stock held at the close of business on the record date of September 16, 2016. We filed our Form 10 describing the Spin-Off with the Securities and Exchange Commission (the “SEC”), which was declared effective by the SEC on September 8, 2016 (the “Form 10”). On October 3, 2016, AdvanSix stock began “regular-way” trading on the New York Stock Exchange under the “ASIX” stock symbol.

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 September 30, 2018, and its results of operations for the three and nine months ended September 30, 2018 and 2017, and cash flows for the nine months ended September 30, 2018 and 2017. The Condensed Consolidated Balance Sheets at December 31, 2017 were derived from audited annual financial statements but do not contain all of the footnote disclosures from the annual financial statements. 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 (the "2017 Form 10-K") for the year ended December 31, 2017. 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 were generally not 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 nine months ended September 30, 2018 and 2017 were September 29, 2018 and September 30, 2017, respectively.

Liabilities to creditors to whom we have issued checks that remained outstanding at September 30, 2018, and December 31, 2017 aggregated $8.2 million and $8.5 million, respectively, and were included in Cash and cash equivalents and Accounts payable in the Condensed Consolidated Balance Sheets.

ADVANSIX INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except share and per share amounts and as otherwise noted)

discontinued at any time. The Company had approximately 30 million shares of common stock outstanding as of September 30, 2018. 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.

As of September 30, 2018, the Company had repurchased 545,282 shares of common stock for an aggregate of $19.7 million under the currently authorized program at a weighted average market price of $36.06 per share. As of September 30, 2018, $55.3 million remained available for share repurchases under the currently authorized program.

2. Recent Accounting Pronouncements

The Company considers the applicability and impact of all Accounting Standards Updates (“ASUs”). ASUs not discussed below were assessed and determined to be either not applicable or are expected to have minimal impact on our consolidated financial position or results of operations.

In February 2018, the Financial Accounting Standards Board (“FASB”) issued ASU 2018-02, Income Statement – Reporting Comprehensive Income (Topic 220), Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income, that allows companies to reclassify to Retained earnings the stranded tax effects in Accumulated other comprehensive income resulting from the Tax Cuts and Jobs Act (the "Tax Act"). The amendments in ASU 2018-02 are effective for all entities for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption of the amendments in this update is permitted, including adoption in any interim period. The Company elected to early adopt this guidance effective January 1, 2018 and to reclassify the stranded tax effects from the Tax Act from Accumulated other comprehensive income to Retained earnings (see Note 10).

In March 2017, the FASB issued ASU 2017-07, Compensation – Retirement Benefits (Topic 715), in order to improve the presentation of net periodic pension and postretirement costs. The amendment requires that an employer report the service cost component in the same line item or items as other compensation costs arising from services rendered by the pertinent employees during the period. The other components of net benefit cost as defined in paragraphs 715-30-35-4 and 715-60-35-9 are required to be presented in the income statement separately from the service cost component and outside a subtotal of income from operations, if one is presented. The amendments in this ASU also allow only the service cost component to be eligible for capitalization when applicable. The amendments in this update related to income statement activity were applied retrospectively whereas balance sheet activity was applied prospectively. For public business entities, the effective date for ASU 2017-07 was annual periods beginning after December 15, 2017, including interim periods within those annual periods. The Company adopted this guidance effective January 1, 2018 and there was no impact on the Company’s consolidated financial position and results of operations upon adoption other than pension expense reclassifications in the 2017 Consolidated Statement of Operations which reduced Costs of goods sold and Selling, general and administrative expenses and increased Other non-operating expense (income), net.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which requires lessees to recognize most leases on their balance sheets related to the rights and obligations created by those leases. The new standard also requires disclosures to help financial statement users better understand the amount, timing, and uncertainty of cash flows arising from leases and will be effective for interim and annual periods beginning after December 15, 2018 (early adoption is permitted). Initial guidance states the new standard be applied under a modified retrospective approach. During August 2018, however, the FASB issued ASU 2018-11, Leases (Topic 842), providing another transition method allowing a company to recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. We continue to evaluate the impact of the new standard on the Company’s consolidated financial position, results of operations and related disclosures. Although we have not yet completed our assessment, adoption of this standard will have a significant impact on the Consolidated Balance Sheets. However, we do not expect adoption of this standard to have a significant impact on the recognition, measurement or presentation of lease expenses within the Consolidated Statements of Operations or the Consolidated Statements of Cash Flows. Information about our undiscounted future lease payments and the timing of those payments is provided in Note 8 of the 2017 Form 10-K. The Company plans to adopt this standard effective January 1, 2019.

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606), which replaced the existing accounting standards for revenue recognition with a single comprehensive five-step model eliminating industry-specific accounting rules. The core principle is to recognize revenue upon the transfer of goods or services to customers at an amount that reflects the consideration expected to be received. Since its issuance, the FASB amended several aspects of the new guidance, including provisions that address revenue recognition associated with the licensing of intellectual property. The provisions of ASU 2014-09 became effective for public business entities for interim and annual periods beginning after

ADVANSIX INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except share and per share amounts and as otherwise noted)

December 15, 2017. The Company adopted this standard effective January 1, 2018 using the modified retrospective method of transition and there was no cumulative impact adjustment on the Company’s consolidated financial position and results of operations. Under this standard, revenue recognition from the Company's products remained unchanged from the Company's previous revenue recognition model. As a result of adopting this standard, the Company expanded its revenue recognition disclosures (see Note 3).

3. Revenues

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.

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. These agreements typically contain formula-based pass-through pricing tied to key feedstock materials and volume ranges, but often do not specify the goods, including the quantities thereof, to be transferred. Certain master services agreements (including with respect to our largest customer) may contain minimum purchase volumes which can be satisfied by the customer on a periodic basis by choosing from various products offered by the Company. In these cases, a performance obligation is created when a customer submits a purchase order for a specific product at a specified price, typically providing for delivery within the next 60 days. The Company 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. Variable consideration is estimated for future volume rebates and early pay discounts on certain products and product returns. The Company records variable consideration as an adjustment to the sale transaction price. Since variable consideration is generally settled within one year, the time value of money is not significant.

The Company applies the practical expedient in Topic 606 and does not include disclosures regarding remaining performance obligations that have original expected durations of one year or less, or amounts for variable consideration allocated to wholly-unsatisfied performance obligations or wholly-unsatisfied distinct goods that form part of a single performance obligation, if any.

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.

We serve more than 500 customers annually in more than 40 countries and across a wide variety of industries. For the three months ended September 30, 2018 and 2017, the Company's ten largest customers accounted for approximately 48% and 44% of total sales, respectively. For the nine months ended September 30, 2018 and 2017, the Company’s ten largest customers accounted for approximately 45% and 43% of total sales, respectively.

We typically sell to customers under contracts, with one- to two-year terms on average, or by purchase orders. We have historically experienced low customer turnover.

Each of the Company’s product lines represented the following approximate percentage of total sales for the three and nine months ended September 30, 2018 and 2017:


	Three Months Ended September 30,			Nine Months Ended September 30,
	2018	2017	2018	2017
Nylon	28%	28%	28%	29%
Caprolactam	18%	19%	18%	19%
Ammonium Sulfate Fertilizers	19%	20%	20%	20%
Chemical Intermediates	35%	33%	34%	32%
	100%	100%	100%	100%

ADVANSIX INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except share and per share amounts and as otherwise noted)

The Company's revenues by geographic area for the three and nine months ended September 30, 2018 and 2017 were as follows:


	Three Months Ended September 30,						Nine Months Ended September 30,
	2018		2017		2018		2017
United States	$	306,050	$	289,480	$	946,195	$	889,515
International	62,603		77,180		182,155		215,290
Total	$	368,653	$	366,660	$	1,128,350	$	1,104,805

Deferred Income and Customer Advances

The Company defers revenues when cash payments are received in advance of our performance. Customer advances relate primarily to sales from the ammonium sulfate business. Below is a roll-forward of Deferred Income and Customer Advances for the nine months ended September 30, 2018:



Opening balance January 1, 2018	$	17,194

Additional cash advances	2,883

Less amounts recognized in revenues	(17,782)

Ending balance September 30, 2018	$	2,295

The Company expects to recognize as revenue the September 30, 2018 ending balance of Deferred Income and Customer Advances within one year or less.

4. Earnings Per Share

The computation of basic and diluted earnings per share ("EPS") is based on net income divided by the basic weighted average number of common shares and diluted weighted average number of common shares, respectively. The details of the basic and diluted EPS calculations for the three and nine months ended September 30, 2018 and 2017 were as follows:


	Three Months Ended September 30,						Nine Months Ended September 30,
	2018		2017		2018		2017
Basic
Net Income	$	5,480	$	21,274	$	45,483	$	74,331
Weighted average common shares outstanding	30,160,991		30,482,966		30,375,873		30,482,966
EPS – Basic	$	0.18	$	0.70	$	1.50	$	2.44
Diluted
Dilutive effect of unvested equity awards and other stock-based holdings	822,843		676,744		813,767		530,640
Weighted average common shares outstanding	30,983,834		31,159,710		31,189,640		31,013,606
EPS – Diluted	$	0.18	$	0.68	$	1.46	$	2.40

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. For the three months ended September 30, 2018 and 2017, stock options of 135,535 and 70,782, respectively, were anti-dilutive and excluded from the computations of dilutive EPS.

On March 2, 2018, the Company granted equity awards representing 231,162 shares of common stock under the 2016 Stock Incentive Plan of AdvanSix Inc. and its Affiliates (the "2016 Stock Plan") to Company employees consisting of 128,777 stock options, 58,078 performance stock units (at target) and 44,307 restricted stock units. These equity awards have a per share

ADVANSIX INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except share and per share amounts and as otherwise noted)

strike price (for stock options) or grant date fair value per share (for performance stock units and restricted stock units) of $41.97 with vesting periods ranging from 12 to 36 months.

On June 14, 2018, the Company granted equity awards representing 20,760 shares of common stock under the 2016 Stock Plan to certain Company employees and the Company’s Board of Directors consisting of restricted stock units. These equity awards have a grant date fair value per share of $40.74 with vesting periods ranging from 12 to 36 months.

In September 2017, the Board adopted the AdvanSix Inc. Deferred Compensation Plan (the “DCP”), effective January 1, 2018. Pursuant to the DCP, our directors may elect to defer their cash retainer fees and allocate their deferrals to the AdvanSix stock unit fund. Each unit allocated under the stock unit fund represents the economic equivalent of one share of common stock. Units are paid out in shares of AdvanSix Inc. common stock upon distribution. As of September 30, 2018, a total of 8,570 units were allocated to the AdvanSix stock unit fund under the DCP during 2018.

In the third quarter of 2018, the Company repurchased 475,175 shares of common stock under the share repurchase program and 9,970 shares of common stock covering the tax withholding obligations in connection with the vesting of equity awards for a total of $17.3 million at a weighted average market price of $35.70 per share. The purchase of shares reduces the weighted average number of shares outstanding in the basic and diluted earnings per share calculations.

5. Accounts and Other Receivables – Net


	September 30, 2018		December 31, 2017
Accounts receivables	$	145,444	$	188,477
Other	5,380		8,936
Total accounts and other receivables	150,824		197,413
Less – allowance for doubtful accounts	(1,725)		(1,410)
Total accounts and other receivables – net	$	149,099	$	196,003

The decrease in Total accounts and other receivables – net at September 30, 2018 versus December 31, 2017 was due primarily to increased collections during the nine months ended September 30, 2018 related to a trade receivables discount arrangement with a third-party financial institution, lower sales and the collection of a Federal income tax refund.

6. Inventories


	September 30, 2018		December 31, 2017
Raw materials	$	34,334	$	48,502
Work in progress	56,049		50,511
Finished goods	29,063		35,430
Spares and other	24,052		23,091
	143,498		157,534
Reduction to LIFO cost basis	(28,472)		(28,326)
Total inventories – net	$	115,026	$	129,208

The decrease in Total inventories – net as of September 30, 2018 compared to December 31, 2017 is due to lower levels of raw materials driven by the timing of cumene deliveries.

ADVANSIX INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except share and per share amounts and as otherwise noted)

7. Long-term Debt and Credit Agreement

The Company’s debt at September 30, 2018 consisted of the following:


Total term loan outstanding	$	—
Amounts outstanding under the Revolving Credit Facility	200,000
Total outstanding indebtedness	200,000
Less: Line of credit – short-term	(9,400)
Line of credit – long-term	$	190,600

At September 30, 2018, the Company assessed the amount recorded under the Revolving Credit Facility (defined below) and determined that such amounts approximate fair value. The fair values of the debt are based on quoted inactive market prices and are therefore classified as Level 2 within the valuation hierarchy.

The outstanding balances under the Revolving Credit Agreement are classified as $9.4 million as short-term and $190.6 million as long-term. The amount included in Line of credit - short-term, noted above and included on the accompanying Condensed Consolidated Balance Sheets, represents the outstanding balance the Company anticipates paying within one year.

Credit Agreement

On February 21, 2018 (the “Amendment Date”), the Company entered into Amendment No. 1 (the “Amendment”) to the Credit Agreement, dated September 30, 2016 (the “Original Credit Agreement”), among the Company, the guarantors, the lenders party thereto and Bank of America, N.A., as administrative agent (the Original Credit Agreement, after giving effect to the Amendment, the “Amended and Restated Credit Agreement”).

The credit facilities under the Original Credit Agreement consisted of a senior secured term loan in an aggregate principal amount of $270 million, of which $267 million was outstanding just prior to entering into the Amendment, and a senior secured revolving credit facility in a principal amount of $155 million. Pursuant to the Amendment, (i) the term loan facility under the Original Credit Agreement was terminated and the entire outstanding balance of the term loan facility (the “Term Loan”) thereunder was paid in full and (ii) the maximum aggregate principal amount of the senior secured revolving credit facility (the “Revolving Credit Facility”) was increased to $425 million.

On the Amendment Date, the Company borrowed $242 million under the Revolving Credit Facility. The proceeds of such loans, as well as cash on hand, were used to repay the outstanding Term Loan under the Original Credit Agreement. The Revolving Credit Facility under the Amended and Restated Credit Agreement has a 5-year term with a scheduled maturity date of February 21, 2023. The Amendment resulted in an increase in the Revolving Credit Facility to replace the Term Loan and provides increased borrowing flexibility and reduced overall borrowing costs with an approximate 50 basis point reduction in the interest rate spread.

The Amended and Restated 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 incur incremental 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 Senior Secured Leverage Ratio (as defined in the Amended and Restated Credit Agreement) would not be greater than 1.75 to 1.00, in each case, to the extent that any one or more lenders, whether or not currently party to the Amended and Restated Credit Agreement, commits to be a lender for such amount. Borrowings under the Amended and Restated Credit Agreement bear interest at a rate equal to either the sum of a base rate plus a margin ranging from 0.50% to 1.50% or the sum of a Eurodollar rate plus a margin ranging from 1.50% to 2.50%, with either such margin varying according to the Company’s Consolidated Leverage Ratio (as defined in the Amended and Restated Credit Agreement). The Company is also required to pay a commitment fee in respect of unused commitments under the Revolving Credit Facility, if any, at a rate ranging from 0.20% to 0.40% per annum depending on the Company’s Consolidated Leverage Ratio. The initial margin under the Amended and Restated Credit Agreement is 0.75% for base rate loans and 1.75% for Eurodollar rate loans and the initial commitment fee rate is 0.25% per annum. Substantially all domestic tangible and intangible assets of the Company and its subsidiaries are pledged as collateral to secure the obligations under the Amended and Restated Credit Agreement.

ADVANSIX INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except share and per share amounts and as otherwise noted)

The Amended and Restated Credit Agreement contains customary covenants limiting the ability of the Company and its subsidiaries to, among other things, pay cash dividends, incur debt or liens, redeem or repurchase stock of the Company, enter into transactions with affiliates, make investments, make capital expenditures, merge or consolidate with others or dispose of assets. The Amended and Restated Credit Agreement also contains financial covenants that require the Company to maintain a Consolidated Interest Coverage Ratio (as defined in the Amended and Restated Credit Agreement) of not less than 3.00 to 1.00 and to maintain a Consolidated Leverage Ratio of (i) 3.50 to 1.00 or less for the fiscal quarter ending March 31, 2018, through and including the fiscal quarter ending December 31, 2019, (ii) 3.25 to 1.00 or less for the fiscal quarter ending March 31, 2020, through and including the fiscal quarter ending December 31, 2020, (iii) 3.00 to 1.00 or less for the fiscal quarter ending March 31, 2021, through and including the fiscal quarter ending December 31, 2021, and (iv) 2.75 to 1.00 or less for the fiscal quarter ending March 31, 2022 and each fiscal quarter thereafter (subject to the Company’s option to elect a consolidated leverage ratio increase in connection with certain acquisitions). If the Company does not comply with the covenants in the Amended and Restated Credit Agreement, the lenders may, subject to customary cure rights, require the immediate payment of all amounts outstanding under the Revolving Credit Facility.

In addition to the amount borrowed on the Amendment Date, the Company has since borrowed an incremental $43 million ($4 million in first quarter, $15 million in second quarter and $24 million in the third quarter) for working capital purposes under the Revolving Credit Facility and repaid $85 million ($16 million in first quarter, $35 million in second quarter and $34 million in the third quarter) to bring the balance under the Revolving Credit Facility to $200 million at September 30, 2018.

The Company had approximately $6.6 million of letter of credit agreements outstanding at the end of the third quarter, of which $5.5 million are bi-lateral letters of credit outside the Revolving Credit Facility with $1.1 million outstanding under the Revolving Credit Facility.

8. Postretirement Benefit Cost

The components of net periodic benefit cost of the Company’s pension plan are as follows:


	Three Months Ended September 30,						Nine Months Ended September 30,
	2018		2017		2018		2017
Service costs	$	2,001	$	1,908	$	6,004	$	5,724
Interest costs	469		333		1,407		999
Expected return on plan assets	(287)		(76)		(862)		(228)




Net periodic benefit cost	$	2,183	$	2,165	$	6,549	$	6,495

The Company made pension plan contributions of approximately $12 million during the nine months ended September 30, 2018 sufficient to satisfy pension funding requirements under the AdvanSix Retirement Earnings Plan and will make additional contributions in future years sufficient to satisfy pension funding requirements in those periods. The Company made contributions of $2.0 million in the first quarter of 2018, $6.6 million in the second quarter of 2018 and $3.3 million in the third quarter of 2018. The Company does not plan to make additional pension plan contributions during the fourth quarter of 2018.

The pension plan assets are invested through a master trust fund. The strategic asset allocation for the trust fund is selected by the Company's Investment Committee reflecting the results of comprehensive asset and liability modeling. The Investment Committee establishes strategic asset allocation percentage targets and appropriate benchmarks for significant asset classes with the aim of achieving a prudent balance between return and risk.

ADVANSIX INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except share and per share amounts and as otherwise noted)

9. Commitments and Contingencies

The Company is subject to a number of lawsuits, investigations and disputes (some of which 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 (taking into consideration any insurance recoveries), 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, results of operations or cash flows. Potential liabilities are subject to change due to new developments, changes in settlement strategy or the impact of evidentiary requirements, which could cause the Company to pay damage awards or settlements (or become subject to equitable remedies) that could have a material adverse effect on the Company’s consolidated results of operations, balance sheet and/or operating cash flows in the periods recognized or paid.

On March 13, 2018, a federal search warrant was executed at the Company’s Hopewell, Virginia manufacturing facility. On the same date, the Company was separately served with a grand jury subpoena issued by the U.S. District Court for the Eastern District of Virginia, which requested documents related to the Hopewell facility’s air emissions and its compliance with the terms of a previously disclosed 2013 consent decree with the federal government and the Commonwealth of Virginia. The Company continues to cooperate fully with the authorities and is providing information in response to the subpoena. The Company’s production across its sites was not affected by these events and the Company expects to continue operating safely at plan moving forward. While the Company may incur penalties or fines in connection with the federal inquiry, the amount of such penalties or fines, if any, cannot be reasonably estimated at this time.

Following the Spin-Off, the Company assumed from Honeywell all health, safety and environmental (“HSE”) liabilities and compliance obligations related to the past and future operations of our current business, as well as all HSE liabilities associated with our three current manufacturing locations and the other locations used in our current operations, including any cleanup or other liabilities related to any contamination that may have occurred at such locations in the past. Honeywell retained all HSE liabilities related to former business locations or the operation of our former businesses. Although we have ongoing environmental remedial obligations at certain of our facilities, in the past three years, the associated remediation costs have not been material, and we do not expect our known remediation costs to be material for 2018.

10. Income Taxes

The Company’s provision for income taxes in interim periods is computed by applying an estimated annual effective tax rate against Income before taxes for the period in addition to recording any tax effects of discrete items for the three and nine months ended September 30, 2018. For interim reporting purposes, the Company recorded a benefit to the Income taxes of $0.4 million as a discrete item related to excess tax benefits associated with the vesting of restricted stock units for the nine months ended September 30, 2018. The provision for income taxes was $0.2 million and $14.5 million for the three months ended September 30, 2018 and 2017, respectively. The provision for income taxes was $13.4 million and $46.8 million for the nine months ended September 30, 2018 and 2017, respectively.

The Company recorded a $1.0 million immaterial out of period adjustment in connection with the filing of the 2017 U.S. federal income tax return, resulting in an income tax benefit in the third quarter. Additionally, under Staff Accounting Bulletin No. 118 (“SAB 118”), the Company recorded a $0.6 million income tax benefit as a measurement period adjustment for the income tax effects related to the Tax Act for which the accounting under ASC 740 is incomplete and provisional estimates were recorded in the period of enactment. As a result of the total adjustments of $1.6 million, the Company revised the provisional estimate of the deferred income tax benefit attributable to the reduction in the U.S. federal corporate tax rate from 35% to 21% as originally recorded in December 2017. These adjustments decrease the Company’s effective tax rate for the nine months ended September 30, 2018 by 2.8%. The Company has not completed the accounting for the income tax effects of the Tax Act and the amounts recorded under SAB 118 remain provisional. The Company will complete the accounting for the income tax effects of the Tax Act during the quarter ending December 31, 2018.

ADVANSIX INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except share and per share amounts and as otherwise noted)

As a result of the early adoption of ASU 2018-02, Income Statement – Reporting Comprehensive Income (Topic 220), Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income, during the nine months ended September 30, 2018, the Company elected to reclassify $0.4 million from Accumulated other comprehensive income to Retained earnings. The reclassification results from the remeasurement of deferred taxes pursuant to the Tax Act related to the Company’s pension plan that was recognized as a component of Income taxes related to continuing operations for the year ended December 31, 2017 which was originally recognized in Other comprehensive income. The Company elected the optional transition method and recorded the adjustment at the beginning of the period of adoption of ASU 2018-02. The Company’s current accounting policy related to stranded tax effects in Accumulated other comprehensive income is to review and reclassify on an item by item basis.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of the Company’s financial condition and results of operations, which we refer to as our “MD&A,” should be read in conjunction with the Condensed Consolidated Financial Statements and the notes thereto contained elsewhere in this Report, as well as the MD&A section included in our Annual Report on Form 10-K for the year ended December 31, 2017 filed with the Securities and Exchange Commission ("SEC") on February 27, 2018 (the “2017 Form 10-K”). Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties. Actual results and the timing of events may differ materially from those contained in these forward-looking statements due to a number of factors, including those incorporated by reference in Item 1A of Part II of this Report, as well as those discussed in the section entitled “Note Regarding Forward-Looking Statements” below.

Note Regarding Forward-Looking Statements

All statements other than statements of historical fact included in this Report including, without limitation, statements in this MD&A regarding our financial position, business strategy and the plans and objectives of management for future operations, are forward-looking statements. When used in this Report, words such as “anticipate,” “believe,” “will,” “estimate,” “expect,” “intend” and similar expressions identify forward-looking statements. Such forward-looking statements are based on the beliefs of management, as well as assumptions made by, and information then available to, our management at the time such statements are made. Actual results could differ materially from those contemplated by the forward-looking statements as a result of a number of factors including those detailed in our filings with the SEC. All subsequent written or oral forward-looking statements attributable to us or persons acting on our behalf are qualified in their entirety by this paragraph.

Separation from Honeywell

On October 1, 2016, Honeywell International Inc. (“Honeywell”) completed the separation of AdvanSix Inc. The separation was completed by Honeywell distributing all of the then outstanding shares of common stock of AdvanSix on October 1, 2016 (the “Distribution Date”) through a dividend in kind of AdvanSix common stock, par value $0.01, to holders of Honeywell common stock as of the close of business on the record date of September 16, 2016 who held their shares through the Distribution Date (the “Spin-Off”). Each Honeywell stockholder who held their shares through the Distribution Date received one share of AdvanSix common stock for every 25 shares of Honeywell common stock held at the close of business on the record date of September 16, 2016. We filed our Form 10 describing the Spin-Off with the SEC, which was declared effective by the SEC on September 8, 2016 (the “Form 10”). On October 3, 2016, AdvanSix stock began “regular-way” trading on the New York Stock Exchange under the “ASIX” stock symbol.

Business Overview

We produce and sell caprolactam as a commodity product and produce and sell our Nylon 6 resin as both a commoditized and specialized resin product. The production of these products is capital intensive, requiring ongoing investments to improve plant reliability, expand production capacity and achieve higher quality. Our results of operations are primarily driven by production volume and the spread between the sales prices of our products and the costs of the underlying raw materials built into the market-based pricing models for most of our products. The global prices for nylon resin typically track a spread over the price of caprolactam, which in turn tracks as a spread over benzene because the key feedstock materials for caprolactam, phenol or cyclohexane are derived from benzene. This price spread has historically experienced cyclicality as a result of global changes in supply and demand. Generally, Nylon 6 resin prices track the cyclicality of caprolactam prices, although prices set above the spread are achievable when nylon resin manufacturers, like AdvanSix, formulate and produce specialized nylon resin products. Our specialized Nylon 6 products are typically valued at a higher level than commodity resin products.

Following the peak in 2011 through the first half of 2016, nylon and caprolactam prices experienced a cyclical period of downturn as the global market experienced large increases in supply without a commensurate increase in demand. Most of this supply increase was the result of Chinese manufacturers, resulting in margin compression for Nylon 6 resin and caprolactam to historic lows. Beginning in the second half of 2016, capacity reductions by our competitors have occurred in North America and Europe improving supply/demand fundamentals in North America with continued dynamic conditions globally. We believe that, in addition to a potential recovery that has historically followed periods of oversupply and declining prices, Nylon 6 end-market growth will continue to generally track global GDP with certain applications, including engineered plastics and packaging, growing at faster rates. Additionally, one of our strategies is to continue developing specialty nylon 6 and nylon 6 based copolymer products that we believe will generate higher margins.

Our ammonium sulfate is used by customers as a fertilizer containing nitrogen and sulfur, two key crop nutrients. Global prices for ammonium sulfate fertilizer are influenced by several factors including the price of urea, which is the most widely used source of nitrogen-based fertilizer in the world. Other global factors driving ammonium sulfate fertilizer demand are general agriculture trends, including crop prices.

We produce ammonium sulfate fertilizer continuously throughout the year as part of our manufacturing process, but quarterly sales experience cyclicality based on the timing and length of the growing seasons in North and South America. North America ammonium sulfate prices are typically strongest during second quarter fertilizer application and then typically decline seasonally with new season fill in the third quarter. 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. Sales of most of our other products have generally been subject to minimal, or no, seasonality.

We also manufacture, market and sell a number of chemical intermediate products that are derived from the chemical processes within our integrated supply chain. Most significant is acetone, which is used by our customers in the production of adhesives, paints, coatings and solvents. Prices for acetone are influenced by its own supply and demand dynamics but can also be influenced by the underlying move in propylene input costs.

We seek to run our production facilities on a nearly continuous basis for maximum efficiency as several of our intermediate products are key feedstock materials for other products in our integrated manufacturing chain. We schedule several planned turnarounds each year, referred to as plant turnarounds, to conduct routine and major maintenance across our facilities. While we may experience unplanned interruptions from time to time, we seek to mitigate the risk through regularly scheduled maintenance both for major and minor repairs at all our production facilities. We also utilize maintenance excellence and mechanical integrity programs and maintain appropriate buffer inventory of intermediate chemicals necessary for our manufacturing process, which are intended to mitigate the extent of any production losses as a result of planned and unplanned downtime.

While our integrated manufacturing, scale and the quantity and range of our product offerings make us one of the most efficient manufacturers in our industry, it also exposes us to increased risk associated with unplanned downtime or material disruptions at any one of our production facilities which could impact the supply chain throughout our manufacturing process. Should unplanned outages occur, we may not have enough buffer inventory at any given time to offset such production losses. Moreover, taking our production facilities offline for regularly scheduled repairs can be an expensive and time-consuming operation with risk that discoverable items and delays during the repair process may cause unplanned downtime as well.

Recent Developments

On May 4, 2018, the Company announced that its Board of Directors authorized a share repurchase program of up to $75 million of the Company’s common stock. Repurchases may be made from time to time on the open market, including through the use of trading plans intended to qualify under Rule 10b5-1 of the Securities Exchange Act of 1934, as amended (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 repurchase program has no expiration date and may be modified, suspended or discontinued at any time. The Company had approximately 30.0 million shares of common stock outstanding as of September 30, 2018. See Part II, Item 2 of this Form 10-Q for information regarding the Company's repurchase activity during the three months ended September 30, 2018.

2018 Operational Events

On January 17, 2018, the Company announced that it had experienced a temporary production issue at its Hopewell, Virginia facility related to the severe winter weather. As a result of this unplanned interruption, caprolactam and resin production had been reduced at the Hopewell and Chesterfield, Virginia facilities. As a result of these events, the Company incurred a $20

million unfavorable impact to pre-tax income in the first quarter of 2018 including the impact of fixed cost absorption, maintenance expense and incremental raw material costs. In addition, the Company incurred an approximately $10 million unfavorable impact to pre-tax income in the first quarter due to lost sales. The Company informed its customers of this force majeure event and actively worked to mitigate the impact of reduced production output on its customers’ operations. As previously disclosed, the required mechanical repair work was completed as expected. The Company has submitted a business interruption insurance claim.

Results of Operations

(Dollars in thousands, unless otherwise noted)

Sales


	Three Months Ended September 30,			Nine Months Ended September 30,
	2018	2017	2018	2017
Sales	$368,653	$366,660	$1,128,350	$1,104,805
% change compared with prior year period	0.5%		2.1%

The change in sales compared to the prior year period is attributable to the following:


	Three Months Ended September 30, 2018	Nine Months Ended September 30, 2018
Volume	(9.7)%	(4.5)%
Price	10.2%	6.6%
	0.5%	2.1%

Sales increased in the three months ended September 30, 2018 compared to the prior year period by $2.0 million (approximately 1%) due primarily to higher sales prices (approximately 10%) driven by formula-based pass-through pricing, particularly for benzene and propylene (inputs to cumene which is a key feedstock material for our products). Market-based pricing was nearly flat due to increases in ammonium sulfate primarily offset by decreases in chemical intermediates, particularly acetone. Volume decreased by approximately 10% due primarily to a planned plant turnaround at the Hopewell facility and lower production output versus the prior year.

Sales increased in the nine months ended September 30, 2018 compared to the prior year period by $23.5 million (approximately 2%) due to higher sales prices (approximately 7%) driven by (i) formula-based pass-through pricing (approximately 6% favorable impact), and (ii) market-based price increases in ammonium sulfate and nylon (approximately 1% favorable impact), partially offset by volume decreases of approximately 5% associated with the unplanned outage in January 2018 and timing of the planned plant turnaround in the third quarter of 2018.

Costs of Goods Sold


	Three Months Ended September 30,			Nine Months Ended September 30,
	2018	2017	2018	2017
Costs of goods sold	$343,434	$309,408	$1,007,712	$922,604
% change compared with prior year period	11.0%		9.2%
Gross Margin percentage	6.8%	15.6%	10.7%	16.5%

Costs of goods sold increased in the three months ended September 30, 2018 compared to the prior year period by $34 million (approximately 11%) due primarily to (i) higher prices of raw materials, particularly propylene, benzene and sulfur (approximately 13%), and (ii) increased manufacturing costs including the planned plant turnarounds in the third quarter of 2018 and purchases of feedstocks which are normally manufactured by the Company (approximately 10%), partially offset by lower sales volumes (approximately 10%) driven by the planned plant turnaround in the third quarter of 2018 and lower production output and the impact of the prior year LIFO cost basis charge (approximately 1%).

Costs of goods sold increased in the nine months ended September 30, 2018 compared to the prior year period by $85.1 million (approximately 9%) due primarily to (i) the higher prices of raw materials, particularly propylene, benzene and sulfur (approximately 8%), and (ii) the impact of planned plant turnarounds and the unplanned outage in January 2018, including fixed cost absorption, maintenance expense and higher costs associated with the purchase of feedstocks which are normally manufactured by the Company (approximately 7%), partially offset by lower sales volumes (approximately 4%).

Gross margin percentage decreased by approximately 9% in the three months ended September 30, 2018 compared to the prior year period due to (i) increased manufacturing costs including planned plant turnarounds and purchases of feedstocks which are normally manufactured by the Company (approximately 8%), and (ii) the impact of formula-based pass-through pricing as discussed above (approximately 2%) partially offset by the impact of the prior year LIFO cost basis charge (approximately 1%).

Gross margin percentage decreased by approximately 6% in the nine months ended September 30, 2018 compared to the prior year period due primarily to the impact of the unplanned outage in January 2018 and planned plant turnarounds (as discussed above) as well as the impact of formula-based pass-through pricing.

Selling, General and Administrative Expenses


	Three Months Ended September 30,			Nine Months Ended September 30,
	2018	2017	2018	2017
Selling, general and administrative expenses	$18,057	$19,050	$55,189	$53,914
Percent of sales	4.9%	5.2%	4.9%	4.9%

Selling, general and administrative expenses decreased by $1.0 million in the three months ended September 30, 2018 compared to the prior year period due to lower IT infrastructure costs associated with the exit of Honeywell transition services, partially offset by legal costs associated with the federal inquiry at the Hopewell facility discussed above.

Selling, general and administrative expenses increased by $1.3 million in the nine months ended September 30, 2018 compared to the prior year period due primarily to legal costs associated with the federal inquiry at the Hopewell facility partially offset by lower IT infrastructure costs associated with the exit of Honeywell transition services.

Tax Expense


	Three Months Ended September 30,			Nine Months Ended September 30,
	2018	2017	2018	2017
Tax expense	$229	$14,538	$13,385	$46,803
Effective tax rate	4.0%	40.6%	22.7%	38.6%

The Company’s effective tax rate for the three months ended September 30, 2018 was lower compared to the U.S. federal statutory rate due primarily to a $1.0 million income tax benefit associated with the filing of the 2017 U.S. federal income tax return as well as $0.2 million of excess tax benefits related to vesting of restricted stock units partially offset by state taxes. The Company's effective tax rate for the nine months ended September 30, 2018 was slightly higher compared to the U.S. federal statutory rate due primarily to state taxes and executive compensation deduction limitations resulting from the Tax Cuts and Jobs Act ("Tax Act"), partially offset by a $1.0 million income tax benefit associated with the filing of the 2017 U.S. federal income tax return as well as excess tax benefits realized upon vesting of restricted stock units. The Company’s effective tax rate for the three and nine months ended September 30, 2018 was lower than the prior year period due primarily to the passage of the Tax Act which reduced the corporate tax rate to 21% from 35% for periods beginning after December 31, 2017.

Net Income


	Three Months Ended September 30,			Nine Months Ended September 30,
	2018	2017	2018	2017
Net income	$5,480	$21,274	$45,483	$74,331

As a result of the factors described above, Net income was $5.5 million and $45.5 million for the three and nine months ended September 30, 2018, respectively, as compared to $21.3 million and $74.3 million in the corresponding prior year period.

Non-GAAP Measures

(Dollars in thousands, unless otherwise noted)

The following tables set forth the non-GAAP financial measures of EBITDA and EBITDA Margin. EBITDA is defined as Net income before Interest, Income taxes, Depreciation and amortization. EBITDA Margin is equal to EBITDA divided by Sales. 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 its competitors, as the non-GAAP measures exclude items that are not considered core to the Company’s 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 GAAP. Non-GAAP financial measures should be read only in conjunction with the comparable GAAP financial measures. The Company's non-GAAP measures may not be comparable to other companies' non-GAAP measures.

The following is a reconciliation between the non-GAAP financial measures of EBITDA and EBITDA Margin to their most directly comparable GAAP financial measure:


	Three Months Ended September 30,						Nine Months Ended September 30,
	2018		2017		2018		2017
Net income	$	5,480	$	21,274	$	45,483	$	74,331
Interest expense, net	1,270		1,961		5,958		5,373
Income taxes	229		14,538		13,385		46,803
Depreciation and amortization	12,992		12,565		38,905		35,524
EBITDA (non-GAAP)	$	19,971	$	50,338	$	103,731	$	162,031



Sales	$	368,653	$	366,660	$	1,128,350	$	1,104,805

EBITDA Margin (non-GAAP)	5.4%		13.7%		9.2%		14.7%

Liquidity and Capital Resources

(Dollars in thousands, unless otherwise noted)

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 as previously disclosed in our 2017 Form 10-K. 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. Our operating cash flows are affected by capital requirements and production volume as well as the prices of our raw materials and general economic and industry trends. We utilize supply chain financing and trade receivables discount arrangements with third party financial institutions which enhance liquidity and enable us to efficiently manage our working capital needs. In addition, we monitor the third-party depository institutions that hold our cash and cash equivalents. Our emphasis is primarily on the safety of principal and secondarily on maximizing yield on those funds. We diversify our cash and cash equivalents among counterparties to minimize exposure to any one of these entities.

On a recurring basis, our primary future cash needs will be centered on operating activities, working capital, capital expenditures including high return growth and cost savings investments, share repurchases, employee benefit obligations, interest payments, debt management and strategic acquisitions. We believe that our future cash from operations, together with our access to funds on hand and credit and capital markets, will provide adequate resources to fund our expected operating and financing needs. Our ability to fund our capital needs, however, will depend on our ongoing ability to generate cash from operations and access to credit and capital markets, both of which are subject to the risk factors previously disclosed in our 2017 Form 10-K and subsequent Quarterly Reports on Form 10-Q, as well as general economic, financial, competitive, regulatory and other factors that are beyond our control.

We assumed from Honeywell all health, safety and environmental (“HSE”) liabilities and compliance obligations related to the past and future operations of our current business, as well as all HSE liabilities associated with our three current manufacturing locations and the other locations used in our current operations including any cleanup or other liabilities related to any contamination that may have occurred at such locations in the past. Honeywell retained all HSE liabilities related to former business locations or the operation of our former businesses. Although we have ongoing environmental remedial obligations at certain of our facilities, in the past three years, the associated remediation costs have not been material, and we do not expect our known remediation costs to be material for 2018.

We expect that our primary cash requirements for the remainder of 2018 will be to fund costs associated with ongoing operations, capital expenditures, share repurchases and amounts related to other contractual obligations.

The Company made pension contributions of approximately $12 million during the nine months ended September 30, 2018 sufficient to satisfy pension funding requirements. The Company made contributions of approximately $2.0 million during the first quarter of 2018, $6.6 million in the second quarter of 2018, and $3.3 million in the third quarter of 2018. The Company does not plan to make additional pension plan contributions during the fourth quarter of 2018.

On May 4, 2018, the Company announced that its Board of Directors authorized a share repurchase program of up to $75 million of the Company’s common stock. Repurchases may be made from time to time on the open market, 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 repurchase program has no expiration date and may be modified, suspended or discontinued at any time. The Company had approximately 30.0 million shares of common stock outstanding as of September 30, 2018.

As of September 30, 2018, the Company had repurchased 545,282 shares of common stock for an aggregate of $19.7 million under the share repurchase program at a weighted average market price of $36.06 per share. As of September 30, 2018, $55.3 million remained available for repurchase under the currently authorized program. During the period October 1, 2018 through October 26, 2018, we repurchased an additional 188,600 shares at a weighted average market price of $31.59 per share. After giving effect to these repurchases, we have approximately $49.4 million of remaining capacity authorized under the currently authorized program.

Credit Agreement

increased borrowing flexibility and reduced overall borrowing costs with an approximate 50 basis point reduction in the interest rate spread.

In addition to the amount borrowed on the Amendment Date, the Company borrowed an incremental $43 million ($4 million in first quarter, $15 million in second quarter and $24 million in the third quarter) for working capital purposes under the Revolving Credit Facility and repaid $85 million ($16 million in first quarter, $35 million in second quarter and $34 million in the third quarter) to bring the balance under the Revolving Credit Facility to $200 million at September 30, 2018. Going forward, we expect that cash provided by operating activities will fund future interest payments on the Company's outstanding indebtedness.

For additional details regarding the Amended and Restated Credit Agreement, refer to “Note 7. Long-term Debt and Credit Agreement” to the Condensed Consolidated Financial Statements.

Cash Flow Summary


	Nine Months Ended September 30,
	2018		2017
Cash provided by (used for):
Operating activities	$	127,735	$	98,471
Investing activities	(74,306)		(72,593)
Financing activities	(88,655)		(91)
Net change in cash and cash equivalents	$	(35,226)	$	25,787

Cash provided by operating activities increased by $29.3 million for the nine months ended September 30, 2018 versus the prior year period due primarily to an $86.5 million improvement in working capital (comprised of Accounts receivables, Inventories, Accounts payable and Deferred income and customer advances) with higher collections providing $46.9 million of cash from Accounts and other receivables during the nine months ended September 30, 2018 compared to a $20.8 million unfavorable cash impact in the prior year period, and a $23.2 million favorable cash impact in Accounts payable due to the timing of payments, with cash outflows of $10.7 million during the nine months ended September 30, 2018 compared to larger outflows of $33.9 million during the prior year period, partially offset by (i) a $28.8 million decrease in Net income versus the prior year period due primarily to the January 2018 unplanned outage and the planned plant turnaround in the third quarter of 2018, and (ii) a $31.7 million less favorable cash impact from changes in Deferred income taxes versus the prior year period due primarily to the utilization of net operating losses in 2017 and the reduction in the U.S. federal corporate tax rate from 35% to 21%.

Cash used for investing activities increased by $1.7 million for the nine months ended September 30, 2018 versus the prior year period due primarily to an increase in cash paid for capital expenditures.

Cash used for financing activities increased by $88.6 million for the nine months ended September 30, 2018 versus the prior year period primarily due to the repayment of borrowings and the impact of the share repurchase program, both of which are described above. During the nine months ended September 30, 2018, the Company amended its Credit Facility, as described above.

Capital Expenditures

(Dollars in thousands, unless otherwise noted)

Our operations are capital intensive, requiring ongoing investments that have consisted, and are expected to continue to consist, primarily of capital expenditures required to maintain and improve equipment reliability, expand production output, further improve mix, yield and cost position, and comply with environmental and safety regulations.

The following table summarizes ongoing and expansion capital expenditures:


	Nine Months Ended September 30, 2018
Capital expenditures in Accounts payable at December 31, 2017	$	25,222
Purchases of property, plant and equipment	65,077
Less: Capital expenditures in Accounts payable at September 30, 2018	(17,649)
Cash paid for capital expenditures	$	72,650

For the full year 2018, we expect the Company’s total capital expenditures to be approximately $110 million.

Critical Accounting Policies

The preparation of our Condensed Consolidated Financial Statements in accordance with U.S. GAAP is based on the selection and application of accounting policies that require us to make significant estimates and assumptions about the effects of matters that are inherently uncertain. We consider these accounting policies to be critical to the understanding of our Condensed Consolidated Financial Statements. For a full description of our critical accounting policies, refer to Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in our 2017 Form 10-K. While there have been no material changes to our critical accounting policies or the methodologies or assumptions we apply under them, we continue to monitor such methodologies and assumptions.

Off-Balance Sheet Arrangements and Contractual Obligations

As of September 30, 2018, the Company did not have any off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K and did not have any material changes in the commitments or contractual obligations detailed in the Company's 2017 Form 10-K. The Company has not guaranteed any debt or commitments of other entities or entered into any options on non-financial assets.

Recent Accounting Pronouncements

See “Note 2. Recent Accounting Pronouncements” to the Condensed Consolidated Financial Statements included in Part I, Item 1 of this Form 10-Q.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Interest Rate Risk

Our exposure to risk based on changes in interest rates relates primarily to our Amended and Restated Credit Agreement. We have not used derivative financial instruments in our investment portfolio. The Amended and Restated Credit Agreement bears interest at floating rates. For variable rate debt, interest rate changes generally do not affect the fair market value of such debt assuming all other factors remain constant but do impact future earnings and cash flows. Accordingly, we may be exposed to interest rate risk on borrowings under the Amended and Restated Credit Agreement. Based on current borrowing levels, a 25-basis point fluctuation in interest rates for the nine months ended September 30, 2018 would result in an increase or decrease to our interest expense of approximately $0.4 million.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

The Company maintains a system of disclosure controls and procedures designed to give reasonable assurance that information required to be disclosed in the Company’s reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC and that such information is accumulated and communicated to management to allow timely decisions regarding required disclosures.

Management recognizes that any disclosure controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives. Because there are inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud have been or will be detected.

Our Chief Executive Officer and Chief Financial Officer, with the assistance of other members of our management, conducted an evaluation of the effectiveness of the Company’s disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this quarterly report. Based upon such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures are effective at a reasonable assurance level as of the end of the period covered by this quarterly report.

Changes in Internal Control over Financial Reporting

Management has not identified any change in the Company’s internal control over financial reporting that occurred during the quarter ended September 30, 2018 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

From time to time, we are involved in litigation relating to claims arising out of the ordinary course of our business operations. We are not a party to, and, to our knowledge, there are not threats of any claims or actions against us, the ultimate disposition of which would have a material adverse effect on our consolidated results of operations or liquidity.

ITEM 1A. RISK FACTORS

There have been no material changes to our risk factors as previously disclosed in the Company’s 2017 Form 10-K and the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2018.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

The below table sets forth the repurchases of Company common stock, by month, for the quarter ended September 30, 2018:

ISSUER PURCHASES OF EQUITY SECURITIES


Period		Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plan	Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plan
July 2018		124,767	$	38.32	124,767	$	67,478,054
August 2018	⁽¹⁾	196,878	34.92		186,908	61,001,676
September 2018		163,500	34.66		163,500	55,335,379
Total		485,145	$	35.70	475,175	$	—

(1) Includes 9,970 shares covering the tax withholding obligations in connection with the vesting of equity awards.

During the period October 1, 2018 through October 26, 2018, we repurchased an additional 188,600 shares at a weighted average market price of $31.59 per share. After giving effect to these repurchases, we have approximately $49.4 million of remaining capacity authorized under the currently authorized program.

ITEM 6. EXHIBITS


Exhibit						Description
3.1						Amended and Restated Certificate of Incorporation of AdvanSix Inc. (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on October 3, 2016).
3.2						Amended and Restated By-laws of AdvanSix Inc. (incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K filed on October 3, 2016).
31.1						Rule 13a-14(a)/15d-14(a) Certification of the Company’s Principal Executive Officer.
31.2						Rule 13a-14(a)/15d-14(a) Certification of the Company’s Principal Financial Officer.
32.1						Section 1350 Certification of the Company’s Principal Executive Officer. The information contained in this Exhibit shall not be deemed filed with the SEC nor incorporated by reference in any registration statement filed by the registrant under the Securities Act of 1933, as amended.
32.2						Section 1350 Certification of the Company’s Principal Financial Officer. The information contained in this Exhibit shall not be deemed filed with the SEC nor incorporated by reference in any registration statement filed by the registrant under the Securities Act of 1933, as amended.
101.INS						XBRL Instance Document - The instance document does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document.
101.SCH						XBRL Taxonomy Extension Schema Document
101.CAL						XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF						XBRL Taxonomy Extension Definition Linkbase Document
101.LAB						XBRL Taxonomy Extension Label Linkbase Document
101.PRE						XBRL Taxonomy Extension Presentation Linkbase Document

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

ADVANSIX INC.

Date: November 2, 2018

By:

/s/ Michael Preston

Michael Preston

Senior Vice President and Chief Financial Officer

Document And Entity Information - shares	9 Months Ended
Document And Entity Information - shares	Sep. 30, 2018	Oct. 26, 2018
Document and Entity Information [Abstract]
Entity Registrant Name	AdvanSix Inc.
Document Type	10-Q
Current Fiscal Year End Date	--12-31
Entity Common Stock, Shares Outstanding		29,802,868
Amendment Flag	false
Entity Central Index Key	0001673985
Entity Filer Category	Large Accelerated Filer
Document Period End Date	Sep. 30, 2018
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	Q3
Entity Emerging Growth Company	false
Entity Small Business	false

CONDENSED CONSOLIDATED BALANCE SHEETS (Parentheticals) - $ / shares	Sep. 30, 2018	Dec. 31, 2017
Statement of Financial Position [Abstract]
Common stock par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	200,000,000	200,000,000
Common stock, shares issued (in shares)	30,555,715	30,482,966
Common stock, shares outstanding (in shares)	29,991,468	30,482,966
Preferred stock par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized (in shares)	50,000,000	50,000,000
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Treasury stock (in shares)	564,247	0

Organization, Operations and Basis of Presentation	9 Months Ended
Organization, Operations and Basis of Presentation	Sep. 30, 2018
Accounting Policies [Abstract]
Organization, Operations and Basis of Presentation	Organization, Operations and Basis of Presentation Description of Business AdvanSix Inc. (“AdvanSix”, the “Company”, "we" or "our") is an integrated manufacturer of Nylon 6, a polymer resin which is a synthetic material used by our customers to produce engineered plastics, fibers, filaments and films that, in turn, are used in such end-products as automotive and electronic components, carpets, sports apparel, fishing nets and food and industrial packaging. As a result of our backward integration and the configuration of our manufacturing facilities, we also sell a variety of other products, all of which are produced as part of our integrated Nylon 6 resin manufacturing process including caprolactam, ammonium sulfate fertilizers, acetone and other chemical intermediates. Separation from Honeywell On October 1, 2016, Honeywell International Inc. (“Honeywell”) completed the separation of AdvanSix. The separation was completed by Honeywell distributing (the “Distribution”) all of the then outstanding shares of common stock of AdvanSix on October 1, 2016 (the “Distribution Date”) through a dividend in kind of AdvanSix common stock, par value $0.01, to holders of Honeywell common stock as of the close of business on the record date of September 16, 2016 who held their shares through the Distribution Date (the “Spin-Off”). Each Honeywell stockholder who held their shares through the Distribution Date received one share of AdvanSix common stock for every 25 shares of Honeywell common stock held at the close of business on the record date of September 16, 2016. We filed our Form 10 describing the Spin-Off with the Securities and Exchange Commission (the “SEC”), which was declared effective by the SEC on September 8, 2016 (the “Form 10”). On October 3, 2016, AdvanSix stock began “regular-way” trading on the New York Stock Exchange under the “ASIX” stock symbol. 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 September 30, 2018, and its results of operations for the three and nine months ended September 30, 2018 and 2017, and cash flows for the nine months ended September 30, 2018 and 2017. The Condensed Consolidated Balance Sheets at December 31, 2017 were derived from audited annual financial statements but do not contain all of the footnote disclosures from the annual financial statements. 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 (the "2017 Form 10-K") for the year ended December 31, 2017. 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 were generally not 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 nine months ended September 30, 2018 and 2017 were September 29, 2018 and September 30, 2017, respectively. Liabilities to creditors to whom we have issued checks that remained outstanding at September 30, 2018, and December 31, 2017 aggregated $8.2 million and $8.5 million, respectively, and were included in Cash and cash equivalents and Accounts payable in the Condensed Consolidated Balance Sheets. On May 4, 2018, the Company announced that its Board of Directors authorized a share repurchase program of up to $75 million of the Company’s common stock. Repurchases may be made from time to time on the open market, including through the use of trading plans intended to qualify under Rule 10b5-1 of the Securities Exchange Act of 1934, as amended (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 repurchase program has no expiration date and may be modified, suspended or discontinued at any time. The Company had approximately 30 million shares of common stock outstanding as of September 30, 2018. 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. As of September 30, 2018, the Company had repurchased 545,282 shares of common stock for an aggregate of $19.7 million under the currently authorized program at a weighted average market price of $36.06 per share. As of September 30, 2018, $55.3 million remained available for share repurchases under the currently authorized program.

Recent Accounting Pronouncements	9 Months Ended
Recent Accounting Pronouncements	Sep. 30, 2018
Accounting Policies [Abstract]
Recent Accounting Pronouncements	Recent Accounting Pronouncements The Company considers the applicability and impact of all Accounting Standards Updates (“ASUs”). ASUs not discussed below were assessed and determined to be either not applicable or are expected to have minimal impact on our consolidated financial position or results of operations. In February 2018, the Financial Accounting Standards Board (“FASB”) issued ASU 2018-02, Income Statement – Reporting Comprehensive Income (Topic 220), Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income, that allows companies to reclassify to Retained earnings the stranded tax effects in Accumulated other comprehensive income resulting from the Tax Cuts and Jobs Act (the "Tax Act"). The amendments in ASU 2018-02 are effective for all entities for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption of the amendments in this update is permitted, including adoption in any interim period. The Company elected to early adopt this guidance effective January 1, 2018 and to reclassify the stranded tax effects from the Tax Act from Accumulated other comprehensive income to Retained earnings (see Note 10). In March 2017, the FASB issued ASU 2017-07, Compensation – Retirement Benefits (Topic 715), in order to improve the presentation of net periodic pension and postretirement costs. The amendment requires that an employer report the service cost component in the same line item or items as other compensation costs arising from services rendered by the pertinent employees during the period. The other components of net benefit cost as defined in paragraphs 715-30-35-4 and 715-60-35-9 are required to be presented in the income statement separately from the service cost component and outside a subtotal of income from operations, if one is presented. The amendments in this ASU also allow only the service cost component to be eligible for capitalization when applicable. The amendments in this update related to income statement activity were applied retrospectively whereas balance sheet activity was applied prospectively. For public business entities, the effective date for ASU 2017-07 was annual periods beginning after December 15, 2017, including interim periods within those annual periods. The Company adopted this guidance effective January 1, 2018 and there was no impact on the Company’s consolidated financial position and results of operations upon adoption other than pension expense reclassifications in the 2017 Consolidated Statement of Operations which reduced Costs of goods sold and Selling, general and administrative expenses and increased Other non-operating expense (income), net. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which requires lessees to recognize most leases on their balance sheets related to the rights and obligations created by those leases. The new standard also requires disclosures to help financial statement users better understand the amount, timing, and uncertainty of cash flows arising from leases and will be effective for interim and annual periods beginning after December 15, 2018 (early adoption is permitted). Initial guidance states the new standard be applied under a modified retrospective approach. During August 2018, however, the FASB issued ASU 2018-11, Leases (Topic 842), providing another transition method allowing a company to recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. We continue to evaluate the impact of the new standard on the Company’s consolidated financial position, results of operations and related disclosures. Although we have not yet completed our assessment, adoption of this standard will have a significant impact on the Consolidated Balance Sheets. However, we do not expect adoption of this standard to have a significant impact on the recognition, measurement or presentation of lease expenses within the Consolidated Statements of Operations or the Consolidated Statements of Cash Flows. Information about our undiscounted future lease payments and the timing of those payments is provided in Note 8 of the 2017 Form 10-K. The Company plans to adopt this standard effective January 1, 2019. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606), which replaced the existing accounting standards for revenue recognition with a single comprehensive five-step model eliminating industry-specific accounting rules. The core principle is to recognize revenue upon the transfer of goods or services to customers at an amount that reflects the consideration expected to be received. Since its issuance, the FASB amended several aspects of the new guidance, including provisions that address revenue recognition associated with the licensing of intellectual property. The provisions of ASU 2014-09 became effective for public business entities for interim and annual periods beginning after December 15, 2017. The Company adopted this standard effective January 1, 2018 using the modified retrospective method of transition and there was no cumulative impact adjustment on the Company’s consolidated financial position and results of operations. Under this standard, revenue recognition from the Company's products remained unchanged from the Company's previous revenue recognition model. As a result of adopting this standard, the Company expanded its revenue recognition disclosures (see Note 3).

Commitments and Contingencies	9 Months Ended
Commitments and Contingencies	Sep. 30, 2018
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	Commitments and Contingencies The Company is subject to a number of lawsuits, investigations and disputes (some of which 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 (taking into consideration any insurance recoveries), 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, results of operations or cash flows. Potential liabilities are subject to change due to new developments, changes in settlement strategy or the impact of evidentiary requirements, which could cause the Company to pay damage awards or settlements (or become subject to equitable remedies) that could have a material adverse effect on the Company’s consolidated results of operations, balance sheet and/or operating cash flows in the periods recognized or paid. On March 13, 2018, a federal search warrant was executed at the Company’s Hopewell, Virginia manufacturing facility. On the same date, the Company was separately served with a grand jury subpoena issued by the U.S. District Court for the Eastern District of Virginia, which requested documents related to the Hopewell facility’s air emissions and its compliance with the terms of a previously disclosed 2013 consent decree with the federal government and the Commonwealth of Virginia. The Company continues to cooperate fully with the authorities and is providing information in response to the subpoena. The Company’s production across its sites was not affected by these events and the Company expects to continue operating safely at plan moving forward. While the Company may incur penalties or fines in connection with the federal inquiry, the amount of such penalties or fines, if any, cannot be reasonably estimated at this time. Following the Spin-Off, the Company assumed from Honeywell all health, safety and environmental (“HSE”) liabilities and compliance obligations related to the past and future operations of our current business, as well as all HSE liabilities associated with our three current manufacturing locations and the other locations used in our current operations, including any cleanup or other liabilities related to any contamination that may have occurred at such locations in the past. Honeywell retained all HSE liabilities related to former business locations or the operation of our former businesses. Although we have ongoing environmental remedial obligations at certain of our facilities, in the past three years, the associated remediation costs have not been material, and we do not expect our known remediation costs to be material for 2018.


			/s/ Erin N. Kane
			Erin N. Kane
			President and Chief Executive Officer

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Income Statement [Abstract]
Sales	$ 368,653	$ 366,660	$ 1,128,350	$ 1,104,805
Costs, expenses and other:
Costs of goods sold	343,434	309,408	1,007,712	922,604
Selling, general and administrative expenses	18,057	19,050	55,189	53,914
Other non-operating expense (income), net	1,453	2,390	6,581	7,153
Total costs, expenses and other	362,944	330,848	1,069,482	983,671
Income before taxes	5,709	35,812	58,868	121,134
Income taxes	229	14,538	13,385	46,803
Net income	$ 5,480	$ 21,274	$ 45,483	$ 74,331
Earnings per common share
Basic (in dollars per share)	$ 0.18	$ 0.70	$ 1.50	$ 2.44
Diluted (in dollars per share)	$ 0.18	$ 0.68	$ 1.46	$ 2.40
Weighted average common shares outstanding
Basic (in shares)	30,160,991	30,482,966	30,375,873	30,482,966
Diluted (in shares)	30,983,834	31,159,710	31,189,640	31,013,606

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
Current assets:
Cash and cash equivalents	$ 20,206	$ 55,432
Accounts and other receivables – net	149,099	196,003
Inventories – net	115,026	129,208
Other current assets	3,900	7,130
Total current assets	288,231	387,773
Property, plant and equipment – net	639,728	612,612
Goodwill	15,005	15,005
Other assets	37,312	34,884
Total assets	980,276	1,050,274
Current liabilities:
Accounts payable	209,239	227,712
Accrued liabilities	26,310	35,013
Deferred income and customer advances	2,295	17,194
Line of credit – short-term	9,400	0
Current portion of long-term debt	0	16,875
Total current liabilities	247,244	296,794
Deferred income taxes	101,092	92,276
Line of credit – long-term	190,600	0
Long-term debt	0	248,339
Postretirement benefit obligations	28,145	33,396
Other liabilities	4,350	3,144
Total liabilities	571,431	673,949
COMMITMENTS AND CONTINGENCIES (Note 9)
STOCKHOLDERS' EQUITY
Common stock, par value $0.01; 200,000,000 shares authorized; 30,555,715 shares issued and 29,991,468 outstanding at September 30, 2018; 30,482,966 shares issued and outstanding at December 31, 2017	306	305
Preferred stock, par value $0.01; 50,000,000 shares authorized and 0 shares issued and outstanding at September 30, 2018 and December 31, 2017	0	0
Treasury stock at par (564,247 shares at September 30, 2018; 0 shares at December 31, 2017)	(6)	0
Additional paid-in capital	250,149	263,081
Retained earnings	167,058	121,985
Accumulated other comprehensive loss	(8,662)	(9,046)
Total stockholders' equity	408,845	376,325
Total liabilities and stockholders' equity	$ 980,276	$ 1,050,274

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017
Cash flows from operating activities:
Net income	$ 45,483	$ 74,331
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	38,905	35,524
Loss on disposal of assets	1,560	1,236
Deferred income taxes	8,816	40,478
Stock based compensation	7,506	5,686
Accretion of deferred financing fees	1,696	444
Changes in assets and liabilities:
Accounts and other receivables	46,878	(20,825)
Inventories	14,182	28,504
Accounts payable	(10,675)	(33,893)
Income taxes payable	0	(68)
Accrued liabilities	(9,703)	2,234
Deferred income and customer advances	(14,899)	(24,766)
Other assets and liabilities	(2,014)	(10,414)
Net cash provided by operating activities	127,735	98,471
Cash flows from investing activities:
Expenditures for property, plant and equipment	(72,650)	(67,206)
Other investing activities	(1,656)	(5,387)
Net cash used for investing activities	(74,306)	(72,593)
Cash flows from financing activities:
Payment of long-term debt	(266,625)	0
Borrowings from line of credit	284,500	308,500
Payments of line of credit	(84,500)	(308,500)
Payment of line of credit fees	(1,362)	0
Principal payments under capital lease	(225)	(91)
Purchase of treasury shares	(20,443)	0
Net cash used for financing activities	(88,655)	(91)
Net change in cash and cash equivalents	(35,226)	25,787
Cash and cash equivalents at beginning of period	55,432	14,199
Cash and cash equivalents at the end of period	20,206	39,986
Supplemental non-cash investing activities:
Capital expenditures included in accounts payable	17,649	17,228
Supplemental cash investing activities:
Cash paid for interest	4,406	7,976
Cash paid for income taxes	$ 7,254	$ 12,695

Income Taxes	9 Months Ended
Income Taxes	Sep. 30, 2018
Income Tax Disclosure [Abstract]
Income Taxes	Income Taxes The Company’s provision for income taxes in interim periods is computed by applying an estimated annual effective tax rate against Income before taxes for the period in addition to recording any tax effects of discrete items for the three and nine months ended September 30, 2018. For interim reporting purposes, the Company recorded a benefit to the Income taxes of $0.4 million as a discrete item related to excess tax benefits associated with the vesting of restricted stock units for the nine months ended September 30, 2018. The provision for income taxes was $0.2 million and $14.5 million for the three months ended September 30, 2018 and 2017, respectively. The provision for income taxes was $13.4 million and $46.8 million for the nine months ended September 30, 2018 and 2017, respectively. The Company recorded a $1.0 million immaterial out of period adjustment in connection with the filing of the 2017 U.S. federal income tax return, resulting in an income tax benefit in the third quarter. Additionally, under Staff Accounting Bulletin No. 118 (“SAB 118”), the Company recorded a $0.6 million income tax benefit as a measurement period adjustment for the income tax effects related to the Tax Act for which the accounting under ASC 740 is incomplete and provisional estimates were recorded in the period of enactment. As a result of the total adjustments of $1.6 million, the Company revised the provisional estimate of the deferred income tax benefit attributable to the reduction in the U.S. federal corporate tax rate from 35% to 21% as originally recorded in December 2017. These adjustments decrease the Company’s effective tax rate for the nine months ended September 30, 2018 by 2.8%. The Company has not completed the accounting for the income tax effects of the Tax Act and the amounts recorded under SAB 118 remain provisional. The Company will complete the accounting for the income tax effects of the Tax Act during the quarter ending December 31, 2018. As a result of the early adoption of ASU 2018-02, Income Statement – Reporting Comprehensive Income (Topic 220), Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income, during the nine months ended September 30, 2018, the Company elected to reclassify $0.4 million from Accumulated other comprehensive income to Retained earnings. The reclassification results from the remeasurement of deferred taxes pursuant to the Tax Act related to the Company’s pension plan that was recognized as a component of Income taxes related to continuing operations for the year ended December 31, 2017 which was originally recognized in Other comprehensive income. The Company elected the optional transition method and recorded the adjustment at the beginning of the period of adoption of ASU 2018-02. The Company’s current accounting policy related to stranded tax effects in Accumulated other comprehensive income is to review and reclassify on an item by item basis.

Recent Accounting Pronouncements (Policies)	9 Months Ended
Recent Accounting Pronouncements (Policies)	Sep. 30, 2018
Accounting Policies, by Policy (Policies) [Line Items]
Basis of Presentation	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 September 30, 2018, and its results of operations for the three and nine months ended September 30, 2018 and 2017, and cash flows for the nine months ended September 30, 2018 and 2017. The Condensed Consolidated Balance Sheets at December 31, 2017 were derived from audited annual financial statements but do not contain all of the footnote disclosures from the annual financial statements. 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 (the "2017 Form 10-K") for the year ended December 31, 2017. 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 were generally not 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 nine months ended September 30, 2018 and 2017 were September 29, 2018 and September 30, 2017, respectively. Liabilities to creditors to whom we have issued checks that remained outstanding at September 30, 2018, and December 31, 2017 aggregated $8.2 million and $8.5 million, respectively, and were included in Cash and cash equivalents and Accounts payable in the Condensed Consolidated Balance Sheets.
Accounting Standards Update 2018-02 [Member]
Accounting Policies, by Policy (Policies) [Line Items]
New Accounting Pronouncements	In February 2018, the Financial Accounting Standards Board (“FASB”) issued ASU 2018-02, Income Statement – Reporting Comprehensive Income (Topic 220), Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income, that allows companies to reclassify to Retained earnings the stranded tax effects in Accumulated other comprehensive income resulting from the Tax Cuts and Jobs Act (the "Tax Act"). The amendments in ASU 2018-02 are effective for all entities for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption of the amendments in this update is permitted, including adoption in any interim period. The Company elected to early adopt this guidance effective January 1, 2018 and to reclassify the stranded tax effects from the Tax Act from Accumulated other comprehensive income to Retained earnings (see Note 10).
Accounting Standard Update 2017-07 [Member]
Accounting Policies, by Policy (Policies) [Line Items]
New Accounting Pronouncements	In March 2017, the FASB issued ASU 2017-07, Compensation – Retirement Benefits (Topic 715), in order to improve the presentation of net periodic pension and postretirement costs. The amendment requires that an employer report the service cost component in the same line item or items as other compensation costs arising from services rendered by the pertinent employees during the period. The other components of net benefit cost as defined in paragraphs 715-30-35-4 and 715-60-35-9 are required to be presented in the income statement separately from the service cost component and outside a subtotal of income from operations, if one is presented. The amendments in this ASU also allow only the service cost component to be eligible for capitalization when applicable. The amendments in this update related to income statement activity were applied retrospectively whereas balance sheet activity was applied prospectively. For public business entities, the effective date for ASU 2017-07 was annual periods beginning after December 15, 2017, including interim periods within those annual periods. The Company adopted this guidance effective January 1, 2018 and there was no impact on the Company’s consolidated financial position and results of operations upon adoption other than pension expense reclassifications in the 2017 Consolidated Statement of Operations which reduced Costs of goods sold and Selling, general and administrative expenses and increased Other non-operating expense (income), net.
Accounting Standards Update 2016-02 [Member]
Accounting Policies, by Policy (Policies) [Line Items]
New Accounting Pronouncements	In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which requires lessees to recognize most leases on their balance sheets related to the rights and obligations created by those leases. The new standard also requires disclosures to help financial statement users better understand the amount, timing, and uncertainty of cash flows arising from leases and will be effective for interim and annual periods beginning after December 15, 2018 (early adoption is permitted). Initial guidance states the new standard be applied under a modified retrospective approach. During August 2018, however, the FASB issued ASU 2018-11, Leases (Topic 842), providing another transition method allowing a company to recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. We continue to evaluate the impact of the new standard on the Company’s consolidated financial position, results of operations and related disclosures. Although we have not yet completed our assessment, adoption of this standard will have a significant impact on the Consolidated Balance Sheets. However, we do not expect adoption of this standard to have a significant impact on the recognition, measurement or presentation of lease expenses within the Consolidated Statements of Operations or the Consolidated Statements of Cash Flows. Information about our undiscounted future lease payments and the timing of those payments is provided in Note 8 of the 2017 Form 10-K. The Company plans to adopt this standard effective January 1, 2019.
Accounting Standards Update 2014-09 [Member]
Accounting Policies, by Policy (Policies) [Line Items]
New Accounting Pronouncements	In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606), which replaced the existing accounting standards for revenue recognition with a single comprehensive five-step model eliminating industry-specific accounting rules. The core principle is to recognize revenue upon the transfer of goods or services to customers at an amount that reflects the consideration expected to be received. Since its issuance, the FASB amended several aspects of the new guidance, including provisions that address revenue recognition associated with the licensing of intellectual property. The provisions of ASU 2014-09 became effective for public business entities for interim and annual periods beginning after December 15, 2017. The Company adopted this standard effective January 1, 2018 using the modified retrospective method of transition and there was no cumulative impact adjustment on the Company’s consolidated financial position and results of operations. Under this standard, revenue recognition from the Company's products remained unchanged from the Company's previous revenue recognition model. As a result of adopting this standard, the Company expanded its revenue recognition disclosures (see Note 3).

Organization, Operations and Basis of Presentation (Details)		3 Months Ended	9 Months Ended	12 Months Ended
	Sep. 16, 2016	Sep. 30, 2018 USD ($) $ / shares shares	Sep. 30, 2018 USD ($) $ / shares shares	Dec. 31, 2017 USD ($) $ / shares shares	May 04, 2018 USD ($)	Oct. 01, 2016 $ / shares
Accounting Policies [Abstract]
Common stock par value (in dollars per share) \| $ / shares		$ 0.01	$ 0.01	$ 0.01		$ 0.01
Shares received, conversion ratio	0.04
Liabilities to creditors, payments issued but outstanding			$ 8,200,000	$ 8,500,000
Share repurchase program, maximum amount of shares authorized to be repurchased					$ 75,000,000
Common stock, shares outstanding (in shares) \| shares		29,991,468	29,991,468	30,482,966
Stock repurchased during period (in shares) \| shares		475,175	545,282
Stock repurchased during period, value		$ 17,300,000	$ 19,700,000
Treasury stock acquired, weighted average cost per share (in dollars per share) \| $ / shares		$ 35.70	$ 36.06
Stock repurchase program, remaining authorized repurchase amount		$ 55,300,000	$ 55,300,000

Revenues - Narrative (Details)	3 Months Ended		9 Months Ended
Revenues - Narrative (Details)	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018 customer country	Sep. 30, 2017
Revenue from Contract with Customer [Abstract]
Length of delivery period			60 days
Number of customers (more than) \| customer			500
Number of countries in which customers are located (more than) \| country			40
Length of contract terms			We typically sell to customers under contracts, with one- to two-year terms on average, or by purchase orders.
10 Largest Customers [Member] \| Customer Concentration Risk [Member] \| Sales Revenue, Net [Member]
Concentration Risk [Line Items]
Concentration risk percentage	48.00%	44.00%	45.00%	43.00%

Revenues - Summary of Deferred Revenue and Customer Advances (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2018 USD ($)
Change in Contract with Customer, Liability [Roll Forward]
Opening balance January 1, 2018	$ 17,194
Additional cash advances	2,883
Less amounts recognized in revenues	(17,782)
Ending balance September 30, 2018	$ 2,295

Earnings Per Share - Narrative (Details) - USD ($) $ / shares in Units, $ in Millions			1 Months Ended	3 Months Ended		9 Months Ended
	Jun. 14, 2018	Mar. 02, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018
Earnings Per Share [Line Items]
Stock options and equity instruments other than options granted in period (in shares)	20,760	231,162,000
Exercise price (in dollars per share)	$ 40.74	$ 41.97
Number of shares of common stock equal to one unit (in shares)			1
Stock repurchased during period (in shares)				475,175		545,282
Shares of common stock covering the tax withholding obligations (in shares)				9,970
Stock repurchased during period, value				$ 17.3		$ 19.7
Treasury stock acquired, weighted average cost per share (in dollars per share)				$ 35.70		$ 36.06
Employee Stock Option [Member]
Earnings Per Share [Line Items]
Weighted average number of stock options excluded form computation of diluted earnings per share (in shares)				135,535,000	70,782,000
Employee Stock Option [Member]
Earnings Per Share [Line Items]
Stock options granted in period (in shares)		128,777,000
Performance Shares [Member]
Earnings Per Share [Line Items]
Equity instruments other than options granted in shares (in shares)		58,078,000
Restricted Stock Units [Member]
Earnings Per Share [Line Items]
Equity instruments other than options granted in shares (in shares)		44,307,000
Minimum [Member]
Earnings Per Share [Line Items]
Vesting period (in months)	12 months	12 months
Maximum [Member]
Earnings Per Share [Line Items]
Vesting period (in months)	36 months	36 months
Deferred Compensation, Share-based Payments [Member]
Earnings Per Share [Line Items]
Number of units allocated to deferred compensation plan (in shares)				8,570		8,570

Accounts and Other Receivables - Net (Details) - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
Receivables [Abstract]
Accounts receivables	$ 145,444	$ 188,477
Other	5,380	8,936
Total accounts and other receivables	150,824	197,413
Less – allowance for doubtful accounts	(1,725)	(1,410)
Total accounts and other receivables – net	$ 149,099	$ 196,003

Inventories (Details) - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
Inventory Disclosure [Abstract]
Raw materials	$ 34,334	$ 48,502
Work in progress	56,049	50,511
Finished goods	29,063	35,430
Spares and other	24,052	23,091
Inventory gross	143,498	157,534
Reduction to LIFO cost basis	(28,472)	(28,326)
Total inventories – net	$ 115,026	$ 129,208

Long-term Debt and Credit Agreement - Summary of Company's Debt (Details) $ in Thousands	Sep. 30, 2018 USD ($)
Debt Instrument [Line Items]
Total outstanding indebtedness	$ 200,000
Less: Line of credit – short-term	(9,400)
Line of credit – long-term	190,600
Term Loan [Member]
Debt Instrument [Line Items]
Total outstanding indebtedness	0
Revolving Credit Facility [Member]
Debt Instrument [Line Items]
Total outstanding indebtedness	200,000
Less: Line of credit – short-term	(9,400)
Line of credit – long-term	$ 190,600

Long-term Debt and Credit Agreement - Narrative (Details)		3 Months Ended			9 Months Ended
	Feb. 21, 2018 USD ($)	Sep. 30, 2018 USD ($)	Jun. 30, 2018 USD ($)	Mar. 31, 2018 USD ($)	Sep. 30, 2018 USD ($)	Sep. 30, 2017 USD ($)	Feb. 20, 2018 USD ($)	Dec. 31, 2017 USD ($)	Sep. 30, 2016 USD ($)
Debt Instrument [Line Items]
Line of credit, short term		$ 9,400,000			$ 9,400,000
Line of credit, long term		190,600,000			190,600,000
Long-term line of credit		200,000,000			200,000,000
Proceeds from lines of credit					284,500,000	$ 308,500,000
Percentage decrease in overall borrowing costs	0.50%
Line of credit facility, accordion feature, higher borrowing capacity option	$ 175,000,000
Additional borrowings from line of credit		24,000,000	$ 15,000,000	$ 4,000,000	43,000,000
Repayments of lines of credit					84,500,000	$ 308,500,000
Letter of credit agreements outstanding		9,400,000			9,400,000			$ 0
Term Loan [Member]
Debt Instrument [Line Items]
Debt instrument, aggregate principal amount									$ 270,000,000
Long-term line of credit							$ 267,000,000
Amended and Restated Credit Agreement [Member]
Debt Instrument [Line Items]
Debt instrument, covenant, consolidated senior secured leverage ratio, maximum	1.75
Debt instrument, covenant, consolidated interest coverage ratio, minimum	3.00
Debt instrument, covenant, consolidated leverage ratio, scenario one, maximum	3.50
Debt instrument, covenant, consolidated leverage ratio, scenario two, maximum	3.25
Debt instrument, covenant, consolidated leverage ratio, scenario three, maximum	3.00
Debt instrument, covenant, consolidated leverage ratio, scenario four, maximum	2.75
Letter of Credit [Member]
Debt Instrument [Line Items]
Letter of credit agreements outstanding		6,600,000			6,600,000
Revolving Credit Facility [Member]
Debt Instrument [Line Items]
Debt instrument, aggregate principal amount									$ 155,000,000
Letter of credit agreements outstanding		1,100,000			1,100,000
Bi-lateral Letter of Credit Agreements [Member]
Debt Instrument [Line Items]
Letter of credit agreements outstanding		5,500,000			5,500,000
Revolving Credit Facility [Member]
Debt Instrument [Line Items]
Line of credit, short term		9,400,000			9,400,000
Line of credit, long term		190,600,000			190,600,000
Long-term line of credit		200,000,000			200,000,000
Proceeds from lines of credit	$ 242,000,000
Debt instrument, term	5 years
Repayments of lines of credit		$ 34,000,000	$ 35,000,000	$ 16,000,000	$ 85,000,000
Revolving Credit Facility [Member] \| Senior Secured Revolving Credit Facility [Member]
Debt Instrument [Line Items]
Maximum borrowing capacity	$ 425,000,000
Letter of Credit [Member]
Debt Instrument [Line Items]
Maximum borrowing capacity	40,000,000
Bridge Loan [Member]
Debt Instrument [Line Items]
Maximum borrowing capacity	$ 40,000,000
Minimum [Member] \| Amended and Restated Credit Agreement [Member]
Debt Instrument [Line Items]
Commitment fee percentage	0.20%
Maximum [Member] \| Amended and Restated Credit Agreement [Member]
Debt Instrument [Line Items]
Commitment fee percentage	0.40%
Base Rate [Member] \| Amended and Restated Credit Agreement [Member]
Debt Instrument [Line Items]
Debt instrument, basis spread on variable rate	0.75%
Base Rate [Member] \| Minimum [Member] \| Amended and Restated Credit Agreement [Member]
Debt Instrument [Line Items]
Debt instrument, basis spread on variable rate	0.50%
Base Rate [Member] \| Maximum [Member] \| Amended and Restated Credit Agreement [Member]
Debt Instrument [Line Items]
Debt instrument, basis spread on variable rate	1.50%
Eurodollar [Member] \| Amended and Restated Credit Agreement [Member]
Debt Instrument [Line Items]
Debt instrument, basis spread on variable rate	1.75%
Commitment fee percentage	0.25%
Eurodollar [Member] \| Minimum [Member] \| Amended and Restated Credit Agreement [Member]
Debt Instrument [Line Items]
Debt instrument, basis spread on variable rate	1.50%
Eurodollar [Member] \| Maximum [Member] \| Amended and Restated Credit Agreement [Member]
Debt Instrument [Line Items]
Debt instrument, basis spread on variable rate	2.50%

Postretirement Benefit Obligations - Narrative (Details) - USD ($) $ in Millions	3 Months Ended			9 Months Ended
	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Sep. 30, 2018
Retirement Benefits [Abstract]
Pension contributions	$ 3.3	$ 6.6	$ 2.0	$ 12.0

Commitments and Contingencies (Details)	9 Months Ended
Commitments and Contingencies (Details)	Sep. 30, 2018 customer
Commitments and Contingencies Disclosure [Abstract]
Number of manufacturing locations	3

Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
Income Taxes (Details) - USD ($) $ in Thousands	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Income Tax Disclosure [Abstract]
Income tax benefit related to excess tax benefits associated with vesting of RSUs			$ 400
Income taxes	$ 229	$ 14,538	13,385	$ 46,803
Valuation Allowance [Line Items]
Out of period adjustment resulting in an income tax expense (benefit)			(1,000)
Tax Cuts and Jobs Act, incomplete accounting, provisional income tax expense (benefit)			(600)
Tax Act and Jobs Act, incomplete accounting, including prior year income taxes, provisional income tax expense (benefit)			$ (1,600)
Effective income tax rate reconciliation, Tax Cuts and Jobs Act, percent			2.80%
Retained Earnings [Member] \| Accounting Standards Update 2018-02 [Member]
Valuation Allowance [Line Items]
Deferred tax benefit reclassified from AOCI to Retained Earnings			$ 400
AOCI Attributable to Parent [Member] \| Accounting Standards Update 2018-02 [Member]
Valuation Allowance [Line Items]
Deferred tax benefit reclassified from AOCI to Retained Earnings			$ (400)