10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

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

 For the quarterly period ended June 30, 2019

or

☐ 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)

Securities registered pursuant to Section 12(b) of the Act:
Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock, par value $0.01 per share	ASIX	New York Stock Exchange

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 ☒  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 ☒  No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth 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  ☒	Accelerated filer  o	Non-accelerated filer  o	Smaller reporting company ☐
			Emerging growth company ☐

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 ☐   No ý

The Registrant had 27,815,783 shares of common stock, $0.01 par value, outstanding at July 26, 2019.

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 Six Months Ended June 30, 2019 and 2018 (unaudited)	3
	Condensed Consolidated Statements of Comprehensive Income for the Three and Six Months Ended June 30, 2019 and 2018 (unaudited)	4
	Condensed Consolidated Balance Sheets as of June 30, 2019 and December 31, 2018 (unaudited)	5
	Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2019 and 2018 (unaudited)	6
	Condensed Consolidated Statements of Stockholders' Equity for the Six Months Ended June 30, 2019 and 2018 (unaudited)	7
	Notes to Condensed Consolidated Financial Statements (unaudited)	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	20
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	28
Item 4.	Controls and Procedures	28
Part II.	OTHER INFORMATION	29
Item 1.	Legal Proceedings	29
Item 1A.	Risk Factors	29
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	29
Item 6.	Exhibits	31
	Signature	32

ITEM 1. FINANCIAL STATEMENTS

ADVANSIX INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

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

	Three Months Ended June 30,				Six Months Ended June 30,
	2019		2018		2019		2018
Sales	$	345,215	$	400,459	$	660,110	$	759,697
Costs, expenses and other:
Costs of goods sold	303,128		342,958		570,008		664,278
Selling, general and administrative expenses	20,009		17,919		39,422		37,132
Other non-operating expense (income), net	1,452		1,582		3,056		5,128
Total costs, expenses and other	324,589		362,459		612,486		706,538
Income before taxes	20,626		38,000		47,624		53,159
Income tax expense	5,280		9,590		12,104		13,156
Net income	$	15,346	$	28,410	$	35,520	$	40,003
Earnings per common share
Basic	$	0.54	$	0.93	$	1.25	$	1.31
Diluted	$	0.53	$	0.91	$	1.21	$	1.28
Weighted average common shares outstanding
Basic	28,162,007		30,481,627		28,489,486		30,485,095
Diluted	29,136,979		31,305,168		29,460,149		31,294,323

See accompanying notes to Condensed Consolidated Financial Statements.

3

ADVANSIX INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

(Dollars in thousands)

	Three Months Ended June 30,				Six Months Ended June 30,
	2019		2018		2019		2018
Net income	$	15,346	$	28,410	$	35,520	$	40,003
Foreign exchange translation adjustment	4		(17)		3		(18)
Cash-flow hedges	(429)		—		(621)		—
Pension obligation adjustments	—		—		—		410
Other comprehensive income (loss), net of tax	(425)		(17)		(618)		392
Comprehensive income	$	14,921	$	28,393	$	34,902	$	40,395

See accompanying notes to Condensed Consolidated Financial Statements.

4

ADVANSIX INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

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

	June 30, 2019		December 31, 2018
ASSETS
Current assets:
Cash and cash equivalents	$	17,057	$	9,808
Accounts and other receivables – net	127,526		160,266
Inventories – net	138,234		137,182
Other current assets	10,496		3,807
Total current assets	293,313		311,063
Property, plant and equipment – net	701,120		672,210
Operating lease right-of-use assets	115,284		—
Goodwill	15,005		15,005
Other assets	38,164		36,348
Total assets	$	1,162,886	$	1,034,626
LIABILITIES
Current liabilities:
Accounts payable	$	192,614	$	231,720
Accrued liabilities	31,907		30,448
Operating lease liabilities – short-term	26,022		—
Deferred income and customer advances	3,184		22,556
Total current liabilities	253,727		284,724
Deferred income taxes	113,685		103,783
Operating lease liabilities – long-term	89,503		—
Line of credit – long-term	255,000		200,000
Postretirement benefit obligations	24,381		21,080
Other liabilities	6,027		4,701
Total liabilities	742,323		614,288
COMMITMENTS AND CONTINGENCIES (Note 9)
STOCKHOLDERS' EQUITY
Common stock, par value $0.01; 200,000,000 shares authorized; 30,591,472 shares issued and 28,008,959 outstanding at June 30, 2019; 30,555,715 shares issued and 29,345,001 outstanding at December 31, 2018	306		306
Preferred stock, par value $0.01; 50,000,000 shares authorized and 0 shares issued and outstanding at June 30, 2019 and December 31, 2018	—		—
Treasury stock at par (2,582,513 shares at June 30, 2019; 1,210,714 shares at December 31, 2018)	(26)		(12)
Additional paid-in capital	200,036		234,699
Retained earnings	223,339		187,819
Accumulated other comprehensive loss	(3,092)		(2,474)
Total stockholders' equity	420,563		420,338
Total liabilities and stockholders' equity	$	1,162,886	$	1,034,626

See accompanying notes to Condensed Consolidated Financial Statements.

5

ADVANSIX INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(Dollars in thousands)

	Six Months Ended June 30,
	2019		2018
Cash flows from operating activities:
Net income	$	35,520	$	40,003
Adjustments to reconcile net income to net cash (used for) provided by operating activities:
Depreciation and amortization	27,872		25,913
Loss on disposal of assets	1,901		1,336
Deferred income taxes	10,109		6,845
Stock based compensation	5,574		4,880
Accretion of deferred financing fees	214		1,589
Restructuring charges	12,623		—
Changes in assets and liabilities:
Accounts and other receivables	32,743		43,913
Inventories	(2,494)		7,079
Accounts payable	(30,586)		(30,185)
Accrued liabilities	(1,771)		(6,805)
Deferred income and customer advances	(19,372)		(14,769)
Other assets and liabilities	(4,970)		(2,578)
Net cash provided by operating activities	67,363		77,221
Cash flows from investing activities:
Expenditures for property, plant and equipment	(71,201)		(53,423)
Other investing activities	(1,285)		(1,254)
Net cash used for investing activities	(72,486)		(54,677)
Cash flows from financing activities:
Payments of long-term debt	—		(266,625)
Borrowings from line of credit	210,250		261,000
Payments of line of credit	(155,250)		(51,000)
Payment of line of credit facility fees	—		(1,362)
Principal payments of finance leases	(2,377)		(162)
Purchase of treasury stock	(40,267)		(3,113)
Issuance of common stock	16		—
Net cash provided by (used for) financing activities	12,372		(61,262)
Net change in cash and cash equivalents	7,249		(38,718)
Cash and cash equivalents at beginning of period	9,808		55,432
Cash and cash equivalents at the end of period	$	17,057	$	16,714
Supplemental non-cash investing activities:
Capital expenditures included in accounts payable	$	18,451	$	7,704
Supplemental cash activities:
Cash paid for interest	$	2,295	$	3,204
Cash paid for income taxes	$	6,576	$	2,240

See accompanying notes to Condensed Consolidated Financial Statements.

6

ADVANSIX INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(Unaudited)

(Dollars in thousands)

	Common Stock			Additional Paid-In Capital		Retained Earnings (Accumulated Deficit)		Treasury Stock		Accumulated  Other Comprehensive Income (Loss)		Total Equity
	Shares	Amount
Balance at December 31, 2018	30,555,715	$	306	$	234,699	$	187,819	$	(12)	$	(2,474)	$	420,338
Net Income	—	—		—		20,174		—		—		20,174
Comprehensive income
Foreign exchange translation adjustments	—	—		—		—		—		(1)		(1)
Cash-flow Hedges	—	—		—		—		—		(192)		(192)
Pension obligation adjustments	—	—		—		—		—		—		—
Other comprehensive income (loss), net of tax	—	—		—		—		—		(193)		(193)
Issuance of common stock	22,497	—		16		—		—		—		16
Purchase of treasury stock (793,754 shares)	—	—		(23,845)		—		(8)		—		(23,853)
Stock-based compensation	—	—		2,762		—		—		—		2,762
Balance at March 31, 2019	30,578,212	306		213,632		207,993		(20)		(2,667)		419,244
Net Income	—	—		—		15,346		—		—		15,346
Comprehensive income
Foreign exchange translation adjustments	—	—		—		—		—		4		4
Cash-flow Hedges	—	—		—		—		—		(429)		(429)
Pension obligation adjustments	—	—		—		—		—		—		—
Other comprehensive income (loss), net of tax	—	—		—		—		—		(425)		(425)
Issuance of common stock	13,260	—		—		—		—		—		—
Purchase of treasury stock (578,045 shares)	—	—		(16,408)		—		(6)		—		(16,414)
Stock-based compensation	—	—		2,812		—		—		—		2,812
Balance at June 30, 2019	30,591,472	$	306	$	200,036	$	223,339	$	(26)	$	(3,092)	$	420,563

7

ADVANSIX INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(Unaudited)

(Dollars in thousands)

	Common Stock			Additional Paid-In Capital		Retained Earnings (Accumulated Deficit)		Treasury Stock		Accumulated  Other Comprehensive Income (Loss)		Total Equity
	Shares	Amount
Balance at December 31, 2017	30,482,966	$	305	$	263,081	$	121,985	$	—	$	(9,046)	$	376,325
Net Income	—	—		—		11,593		—		—		11,593
Comprehensive income
Foreign exchange translation adjustments	—	—		—		—		—		(1)		(1)
Cash-flow Hedges	—	—		—		—		—		—		—
Pension obligation adjustments	—	—		—		(410)		—		410		—
Other comprehensive income (loss), net of tax	—	—		—		(410)		—		409		(1)
Issuance of common stock	25,356											—
Purchase of treasury stock (8,995 shares)	—	—		(370)		—		—		—		(370)
Stock-based compensation	—	—		2,281		—		—		—		2,281
Balance at March 31, 2018	30,508,322	305		264,992		133,168		—		(8,637)		389,828
Net Income	—	—		—		28,410		—		—		28,410
Comprehensive income
Foreign exchange translation adjustments	—	—		—		—		—		(17)		(17)
Cash-flow Hedges	—	—		—		—		—		—		—
Pension obligation adjustments	—	—		—		—		—		—		—
Other comprehensive income (loss), net of tax	—	—		—		—		—		(17)		(17)
Issuance of common stock	16,416	—		—		—		—		—		—
Purchase of treasury stock (70,107 shares)	—	—		(2,742)		—		(1)		—		(2,743)
Stock-based compensation	—	—		2,599		—		—		—		2,599
Balance at June 30, 2018	30,524,738	$	305	$	264,849	$	161,578	$	(1)	$	(8,654)	$	418,077

See accompanying notes to Condensed Consolidated Financial Statements.

8

ADVANSIX INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

1. Organization, Operations and Basis of Presentation

Description of Business

AdvanSix Inc. (“AdvanSix”, the “Company”, "we" or "our") is 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.

Basis of Presentation

The Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions to Rule 10-01 of Regulation S-X.  Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements.  In the opinion of management, the accompanying unaudited Condensed Consolidated Financial Statements contain all adjustments, consisting of only normal recurring adjustments, necessary for a fair statement of the Company's financial position as of June 30, 2019, and its results of operations and cash flows for the three and six months ended June 30, 2019 and 2018. The Condensed Consolidated Balance Sheet at December 31, 2018 was derived from audited annual financial statements but does 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 for the year ended December 31, 2018 (the "2018 Form 10-K"). 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 six months ended June 30, 2019 and 2018 were June 29, 2019 and June 30, 2018, respectively.

Liabilities to creditors to whom we have issued checks that remained outstanding at June 30, 2019 and December 31, 2018 aggregated $6.7 million and $7.7 million, respectively, and were included in Cash and cash equivalents and Accounts payable in the Condensed Consolidated Balance Sheets.

The Company submitted a business interruption insurance claim related to the first quarter 2018 weather event and recorded a benefit of $6.6 million and $2.3 million to Cost of goods sold in the first and second quarters of 2019, respectively. The business interruption claim has been closed with a total recorded benefit of approximately of $12 million.

On May 4, 2018, the Company announced that its Board of Directors (the “Board”) authorized a share repurchase program of up to $75 million of the Company’s common stock. On February 22, 2019, the Company announced that the Board authorized a share repurchase program of up to an additional $75 million of the Company's common stock, which was in addition to the remaining capacity available under the May 2018 share repurchase program. 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 share repurchase program has no expiration date and may be modified, suspended or discontinued at any time. The par value of the shares repurchased is applied to Treasury stock and the excess of the purchase price over par value is applied to Additional paid-in capital.

As of June 30, 2019, the Company had repurchased 2,555,713 shares of common stock for an aggregate of $77.7 million at a weighted average market price of $30.40 per share. As of June 30, 2019, $72.3 million remained available for share repurchases under the current authorization.

9

ADVANSIX INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

2. Recent Accounting Pronouncements

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

In October 2018, the FASB issued ASU No. 2018-16, Derivatives and Hedging (Topic 815): Inclusion of the Secured Overnight Financing Rate (“SOFR”) Overnight Index Swap (“OIS”) Rate as a Benchmark Interest Rate for Hedge Accounting Purposes, which permits use of the OIS rate based on SOFR as a U.S. benchmark interest rate for hedge accounting purposes under Topic 815 in addition to the interest rates on direct Treasury obligations of the U.S. government (“UST”), the LIBOR swap rate, the OIS rate based on the Fed Funds Effective Rate and the SIFMA Municipal Swap Rate. Pursuant to the amendments, SOFR will be an option to replace LIBOR as it is phased out. The amendments of ASU No. 2018-16 are effective for companies that have adopted ASU 2017-12 for fiscal years beginning after December 15, 2018, including interim periods within that fiscal year or at such time a company adopts ASU 2017-12. Early adoption of ASU 2018-16 is not permitted without previous adoption of ASU 2017-12. As the Company elected to early adopt ASU 2017-12 during the fourth quarter of 2018, the Company adopted ASU 2018-16 effective January 1, 2019, which did not have a material impact on the Company's consolidated financial position or results of operations upon adoption.

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 stated that the new standard be applied under a modified retrospective approach with periods prior to the adoption date being adjusted. During July 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 without adjusting prior periods. The Company adopted the standard effective January 1, 2019 electing the cumulative-effect adjustment approach made available in ASU 2018-11. The Company has also elected the following practical expedients:

•the package of three expedients which allows the Company not to re-assess (i) whether any expired or existing contracts are or contain leases, (ii) lease classification for any expired or existing leases, and (iii) initial direct costs for any expired or existing leases;

•the short-term lease practical expedient, which allows the Company to exclude leases with an initial term of 12 months or less (“short-term leases”) from recognition in the unaudited Condensed Consolidated Balance Sheet;

•the bifurcation of lease and non-lease components practical expedients, which did not require the Company to bifurcate lease and non-lease components for our real estate leases; and

•the land easements practical expedient, which allows the Company to carry forward the accounting treatment for land easements on existing agreements.

We have implemented internal controls and key system functionality to enable the preparation of financial information on adoption. The standard had a material impact to our Condensed Consolidated Balance Sheet, but did not have a significant impact in the recognition, measurement or presentation of lease expenses within the Condensed Consolidated Statements of Operations or the Condensed Consolidated Statements of Cash Flows. The most significant impact was the recognition of right-of-use (“ROU”) assets and liabilities for operating leases, while our accounting for finance leases remained substantially unchanged. See "Note 8. Leases" for further information.

3. Revenues

Revenue Recognition

We serve approximately 500 customers annually in more than 40 countries and across a wide variety of industries. For the three months ended June 30, 2019 and 2018, the Company's ten largest customers accounted for approximately 47% and 45% of total sales, respectively. For the six months ended June 30, 2019 and 2018, the Company's ten largest customers accounted for approximately 46% and 45% of total sales, respectively.

We typically sell to customers under master service agreements, with one- to two-year terms on average, or by purchase orders. We have historically experienced low customer turnover and have an average customer relationship of approximately 20 years. Our largest customer is Shaw Industries Group Inc. (“Shaw”), one of the world's largest consumers of caprolactam and Nylon 6 resin. We sell Nylon 6 resin and caprolactam to Shaw under a long-term agreement. For the three months ended June 30, 2019

10

ADVANSIX INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

and 2018, our sales to Shaw were 19% and 22%, respectively, of our total sales. For the six months ended June 30, 2019 and 2018, our sales to Shaw were 21% and 22%, respectively, of our total sales.

Each of the Company’s product lines represented the following approximate percentage of total sales for the three and six months ended June 30, 2019 and 2018:

	Three Months Ended June 30,		Six Months Ended June 30,
	2019	2018	2019	2018
Nylon	27%	27%	29%	28%
Caprolactam	20%	19%	20%	18%
Ammonium Sulfate Fertilizers	27%	21%	25%	20%
Chemical Intermediates	26%	33%	26%	34%
	100%	100%	100%	100%

The Company's revenues by geographic area for the three and six months ended June 30, 2019 and 2018 were as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2019		2018		2019		2018
United States	$	289,551	$	342,497	$	547,193	$	640,145
International	55,664		57,962		112,917		119,552
Total	$	345,215	$	400,459	$	660,110	$	759,697

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 six months ended June 30, 2019:

Opening balance January 1, 2019	$	22,556
Additional cash advances	1,083
Less amounts recognized in revenues	(20,455)
Ending balance June 30, 2019	$	3,184

The Company expects to recognize as revenue the June 30, 2019 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 six months ended June 30, 2019 and 2018 were as follows:

11

ADVANSIX INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

	Three Months Ended June 30,				Six Months Ended June 30,
	2019		2018		2019		2018
Basic
Net Income	$	15,346	$	28,410	$	35,520	$	40,003
Weighted average common shares outstanding	28,162,007		30,481,627		28,489,486		30,485,095
EPS – Basic	$	0.54	$	0.93	$	1.25	$	1.31
Diluted
Dilutive effect of equity awards and other stock-based holdings	974,972		823,541		970,663		809,228
Weighted average common shares outstanding	29,136,979		31,305,168		29,460,149		31,294,323
EPS – Diluted	$	0.53	$	0.91	$	1.21	$	1.28

Diluted EPS is computed based upon the weighted average number of common shares outstanding for the period plus the dilutive effect of common stock equivalents (which includes units allocated to the AdvanSix stock unit fund under the AdvanSix Inc. Deferred Compensation Plan) using the treasury stock method and the average market price of our common stock for the year.

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 June 30, 2019 and 2018, stock options of 539,054 and 128,777, respectively, were anti-dilutive and excluded from the computations of dilutive EPS.

5. Accounts and Other Receivables – Net

	June 30, 2019		December 31, 2018
Accounts receivables	$	125,887	$	166,017
Other	3,901		1,716
Total accounts and other receivables	129,788		167,733
Less – allowance for doubtful accounts	(2,262)		(7,467)
Total accounts and other receivables – net	$	127,526	$	160,266

The decrease in Total accounts and other receivables – net at June 30, 2019 versus December 31, 2018 was due primarily to lower sales. The change in the allowance for doubtful accounts relates to an accounts receivable write-off of approximately $5.1 million related to a customer bankruptcy as previously reported in the 2018 Form 10-K.

6. Inventories

	June 30, 2019		December 31, 2018
Raw materials	$	46,109	$	55,002
Work in progress	54,030		46,728
Finished goods	45,333		39,368
Spares and other	24,313		24,555
	169,785		165,653
Reduction to LIFO cost basis	(31,551)		(28,471)
Total inventories – net	$	138,234	$	137,182

Total inventories – net at June 30, 2019 were relatively flat compared to the balance at December 31, 2018. The shift in inventory categories reflects the normal course of operations including the timing of cumene deliveries and the fulfillment of customer orders.

12

ADVANSIX INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

7. Postretirement Benefit Cost

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

	Three Months Ended June 30,				Six Months Ended June 30,
	2019		2018		2019		2018
Service cost	$	1,714	$	2,001	$	3,427	$	4,003
Interest cost	521		469		1,042		938
Expected return on plan assets	(334)		(287)		(668)		(575)
Net periodic benefit cost	$	1,901	$	2,183	$	3,801	$	4,366

The Company made contributions to the defined benefit pension plan of $0.5 million in the second quarter of 2019. No contributions were made in the first quarter of 2019. The Company plans to make pension plan contributions during 2019 sufficient to satisfy pension funding requirements in an aggregate amount of approximately $4 to $6 million and will make additional contributions in future years sufficient to satisfy pension funding requirements in those periods.

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.

8. Leases

We determine if an arrangement is a lease at inception. Operating leases are included in Operating lease right-of-use assets, Operating lease liabilities – short-term, and Operating lease liabilities – long-term in our Condensed Consolidated Balance Sheet. Finance leases are included in Property, plant and equipment – net, Accounts payable, and Other liabilities in our Condensed Consolidated Balance Sheets.

ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. We use the implicit rate when readily determinable. The operating lease ROU asset also includes any lease payments made and excludes lease incentives. Our lease terms may include options to extend or terminate the lease and, when it is reasonably certain that such an option will be exercised, it is included in the determination of the corresponding assets and liabilities. Short-term leases are not recognized on our unaudited Condensed Consolidated Balance Sheets. Lease expense for all lease payments is recognized on a straight-line basis over the lease term.

We have lease agreements with lease and non-lease components, which are generally accounted for separately. Additionally, for certain equipment leases, we apply a portfolio approach to effectively account for the operating lease ROU assets and liabilities. The Company has entered into agreements to lease transportation equipment, storage facilities, office space, dock access and other equipment. The leases have initial terms of up to 20 years with some containing renewal options subject to customary conditions.

The components of lease expense were as follows:

13

ADVANSIX INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

	Three Months Ended June 30, 2019		Six Months Ended June 30, 2019
Finance lease cost:
Amortization of right-of-use asset	$	157	$	305
Interest on lease liabilities	17		35
Total finance lease cost	174		340
Operating lease cost	7,931		15,501
Short-term lease cost	4,116		8,397
Total lease cost	$	12,221	$	24,238

Supplemental cash flow information related to leases was as follows:

	Six Months Ended June 30, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	15,295
Operating cash flows from finance leases	30
Financing cash flows from finance leases	2,377
Non-cash information:
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	9,419
Finance leases	593

Supplemental balance sheet information related to leases was as follows:

	June 30, 2019
Operating Leases
Operating lease right-of-use assets	$	115,284
Operating lease liabilities – short term	26,022
Operating lease liabilities – long term	89,503
Total operating lease liabilities	$	115,525
Finance Leases
Property, plant and equipment – gross	$	2,354
Accumulated depreciation	(1,034)
Property, plant and equipment – net	$	1,320
Accounts payable	591
Other liabilities	739
Total finance lease liabilities	$	1,330
Weighted Average Remaining Lease Term
Operating leases	10.64 years
Finance leases	2.38 years
Weighted Average Discount Rate
Operating leases	6.14		%
Finance leases	5.20		%

The cumulative effect of the changes made to the Condensed Consolidated Balance Sheets for the adoption of the new leasing standard on January 1, 2019 was as follows:

14

ADVANSIX INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

	Balance Sheet accounts prior to new leasing standard adoption adjustments		Adjustments due to the adoption of the new leasing standard		Balance Sheet accounts after the new leasing standard adoption adjustments
ASSETS
Property, plant and equipment – net	$	1,032	$	—	$	1,032
Operating lease right-of-use assets	—		117,921		117,921
Total assets	1,034,626		$	117,921	1,152,547
LIABILITIES AND EQUITY
Current Liabilities:
Accounts payable	$	318	$	—	$	318
Operating lease liabilities – short term	—		24,794		24,794
Total current liabilities	284,724		24,794		309,518
Operating lease liabilities – long term	—		93,127		93,127
Other liabilities	762		—		762
Total liabilities	614,288		117,921		732,209
Total equity	420,338		—		420,338
Total liabilities and equity	1,034,626		$	117,921	1,152,547

Maturities of lease liabilities were as follows:

Year Ending December 31,	Operating Leases		Finance Leases
2019 (remainder)	$	16,402	$	332
2020	31,412		610
2021	19,736		374
2022	14,973		99
2023	12,350		—
Thereafter	70,291		—
Total lease payments	165,164		1,415
Less imputed interest	(49,639)		(85)
Total	$	115,525	$	1,330

As previously disclosed in our 2018 Form 10-K and under the previous lease accounting standard, future minimum lease payments for leases having initial or remaining non-cancellable lease terms in excess of one year would have been as follows:

Year Ending December 31,	Operating Leases		Capital Leases
2019	$	36,110	$	239
2020	29,318		212
2021	16,111		131
2022	11,571		89
2023	9,104		—
Thereafter	26,627		—
Total lease payments	$	128,841	$	671

15

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 was notified during the first quarter of 2019 that the U.S. Attorney’s Office for the Eastern District of Virginia had closed its investigation and no further action by the Company was required. On May 13, 2019, the Company announced that the United States government notified the Company that the balance of the criminal investigation concluded with no further action required.

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 2019.

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 quarter. The provision for income taxes was $5.3 million and $9.6 million for the three months ended June 30, 2019 and 2018, respectively. The provision for income taxes was $12.1 million and $13.2 million for the six months ended June 30, 2019 and 2018, respectively.

11. Fair Value Measurements

Financial and non-financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. During the fourth quarter of 2018, the Company acquired a royalty stream which has been treated as an asset acquisition and entered into an interest rate swap transaction related to its credit agreement. The purchase price of the royalty stream for $1.0 million approximates its fair value at December 31, 2018 and is considered a Level 3 asset. The fair value measurement is based on the expected future cash flows and, as there is no reason to believe that the asset is impaired, it is assumed that the valuation remains unchanged at June 30, 2019. The fair value of the interest rate swap at June 30, 2019 was a loss of approximately $1.7 million and is considered a Level 2 liability.

The pension plan assets are invested in collective investment trust funds. These investments are measured at fair value using the net asset value per share as a practical expedient. Investments valued using the net asset value method (NAV) (or its equivalent) practical expedient are excluded from the fair value hierarchy disclosure.

16

ADVANSIX INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

The Company’s Condensed Consolidated Balance Sheets also include Cash and cash equivalents, Accounts receivable and Accounts payable all of which are recorded at amounts which approximate fair value.

The Company also has assets that are required to be recorded at fair value on a non-recurring basis. These assets are evaluated when certain triggering events occur (including a decrease in estimated future cash flows) that indicate the asset should be evaluated for impairment. Goodwill and indefinite lived intangible assets must be evaluated at least annually.

12. Derivative and Hedging Instruments

The specific credit and market, commodity price and interest rate risks to which the Company is exposed in connection with its ongoing business operations are described below. This discussion includes an explanation of the hedging instrument, a rate swap agreement, used to manage the Company’s interest rate risk associated with a fixed and floating-rate borrowing.

For cash flow hedges, the entire change in the fair value of the hedging instrument included in the assessment of hedge effectiveness is recorded in Other comprehensive income. Those amounts are reclassified to earnings in the same income statement line item that is used to present the earnings effect of the hedged item when the hedged item affects earnings.

Credit and Market Risk – Financial instruments, including derivatives, expose the Company to counterparty credit risk for non-performance and to market risk related to changes in commodity prices, interest rates and foreign currency exchange rates. The Company manages its exposure to counterparty credit risk through specific minimum credit standards, diversification of counterparties, and procedures to monitor concentrations of credit risk. The Company’s counterparties in derivative transactions are substantial investment and commercial banks with significant experience using such derivative instruments. The Company monitors the impact of market risk on the fair value and cash flows of its derivative and other financial instruments considering reasonably possible changes in commodity prices, interest rates and foreign currency exchange rates and restricts the use of derivative financial instruments to hedging activities.

The Company continually monitors the creditworthiness of its customers to which it grants credit terms in the normal course of business. The terms and conditions of credit sales are designed to mitigate or eliminate concentrations of credit risk with any single customer. The Company has one customer that accounted for approximately 13% and 22% of trade Accounts receivable – net at June 30, 2019 and December 31, 2018, respectively.

Commodity Price Risk Management – The Company's exposure to market risk for commodity prices can result in changes in the cost of production. We primarily mitigate our exposure to commodity price risk by using long-term, formula-based price contracts with our suppliers and formula-based price agreements with customers. Our customer agreements provide for price adjustments based on relevant market indices and raw material prices and generally do not include take-or-pay terms. We may also enter into forward commodity contracts with third-parties designated as hedges of anticipated purchases of several commodities. Forward commodity contracts are marked-to-market, with the resulting gains and losses recognized in earnings, in the same category as the items being hedged, when the hedged transaction is recognized. At June 30, 2019 and 2018, we had no financial contracts related to forward commodity agreements.

Interest Rate Risk Management – On November 6, 2018, the Company entered into an interest rate swap agreement for a notional amount of $50 million to exchange floating for fixed rate interest payments for our LIBOR-based borrowings. This interest rate swap had a fair value of zero at inception and was effective November 30, 2018. In accordance with FASB Accounting Standards Codification (“ASC”) ASC 815, the Company designated the interest rate swap as a cash flow hedge of floating-rate borrowings. This interest rate swap, with a maturity date of November 30, 2021, converts the Company’s interest rate payments on the first $50 million of variable-rate, 1-month LIBOR-based debt to a fixed interest rate. This interest rate swap involves the receipt of floating rate amounts in exchange for fixed rate interest payments over the life of the interest rate swap without an exchange of the underlying principal amount.

17

ADVANSIX INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

	Liability Derivatives
	June 30, 2019			December 31, 2018
	Balance Sheet Classification	Fair Value		Balance Sheet Classification	Fair Value
Derivatives designated as hedging instruments under ASC 815:
Interest Rate Contracts	Accrued liabilities and Other liabilities	(1,661)		Accrued liabilities and Other liabilities	(833)
Total Derivatives		$	(1,661)		$	(833)

The following table summarizes adjustments related to cash flow hedge included in Cash-flow hedges, in the Condensed Consolidated Statements of Comprehensive Income:

	June 30, 2019
Loss on derivative instruments included in Accumulated other comprehensive income at December 31, 2018	$	(833)
Fair value adjustment	(828)
Loss on derivative instruments included in Accumulated other comprehensive income at June 30, 2019	$	(1,661)

At June 30, 2019, the Company expects to reclassify approximately $0.4 million of net losses on derivative instruments from Accumulated other comprehensive income to earnings during the next 12 months due to the payment of variable interest associated with the floating rate debt.

13. Restructuring

On May 2, 2019, the Company approved the closure of its Pottsville, Pennsylvania films plant as part of its broader strategic efforts to improve the Company’s competitive position in providing quality film products and services to its customers. The Company also announced a strategic alliance with Oben Holding Group S.A. (“Oben”), a third-party producer of films for the flexible packaging industry, leveraging the Company's sales channels and Nylon 6 supply with Oben's new state-of-the-art manufacturing facility. The Company ceased operations at the Pottsville, PA plant in July 2019.

Restructuring costs consist of long-lived asset impairments, facility exit costs, employee separations and inventory write-downs. Facility exit costs include demolition, equipment relocation, contract terminations and project management costs. These costs are included in Cost of goods sold in the Condensed Consolidated Statements of Operations. The Company does not expect to incur any additional restructuring charges related to the closure of its films plant.

Restructuring costs for the three months ended June 30, 2019 were as follows:

	Three Months Ended June 30, 2019
Write-off of equipment and facility	$	7,131
Facility exit costs	2,686
Employee separations	1,364
Inventory write-downs	1,442
Total restructuring charges	$	12,623

18

ADVANSIX INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

The following table summarizes the components of restructuring activities and the remaining balances of accrued restructuring charges as of June 30, 2019:

	Employee Separation Benefits		Facility Exit Costs		Total
Accrual balance at December 31, 2018	$	—	$	—	$	—
Charges	1,364		2,686		4,050
Cash payments	—		—		—
Accrual balance at June 30, 2019	$	1,364	$	2,686	$	4,050

The balance of accrued restructuring charges are expected to be settled within the next twelve months.

14. Subsequent Events

On July 15, 2019, the Company entered into an additional interest rate swap agreement for an incremental notional amount of $50 million to exchange floating for fixed rate interest payments for our LIBOR-based borrowings. This interest rate swap is in addition to the $50 million interest rate swap entered into in November 2018, had a fair value of zero at inception, is effective July 31, 2019 and has been designated as a cash flow hedge. This interest rate swap agreement, with a maturity date of February 21, 2023, converts the Company's interest rate payments on an incremental $50 million of variable-rate, 1-month LIBOR-based debt to a fixed interest rate.

19

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 Form 10-Q, as well as the MD&A section included in our Annual Report on Form 10-K for the year ended December 31, 2018 filed with the Securities and Exchange Commission (“SEC”) on February 22, 2019 (the “2018 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 that can affect our performance in both near- and long-term, including those incorporated by reference in Item 1A of Part II of this Form 10-Q as such factors may be revised or supplemented in subsequent filings with the SEC, 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 Form 10-Q 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 within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). When used in this Form 10-Q, words such as “anticipate,” “believe,” “will,” “estimate,” “expect,” “plan,” “intend” and similar expressions identify forward-looking statements. Although we believe forward-looking statements are based upon reasonable assumptions, such statements involve known and unknown risks, uncertainties and other factors, many of which are beyond our control and difficult to predict, which may cause the actual results or performance of the company to be materially different from any future results or performance expressed or implied by such forward-looking statements. Such risks and uncertainties include, but are not limited to: the impact of scheduled turnarounds and significant unplanned downtime and interruptions of production or logistics operations as a result of mechanical issues or other unanticipated events such as fires, severe weather conditions, and natural disasters; price fluctuations and supply of raw materials; our operations requiring substantial capital; general economic and financial conditions in the U.S. and globally; growth rates and cyclicality of the industries we serve; risks associated with our indebtedness including with respect to restrictive covenants; failure to develop and commercialize new products or technologies; loss of significant customer relationships; adverse trade and tax policies; extensive environmental, health and safety laws that apply to our operations; hazards associated with chemical manufacturing, storage and transportation; litigation associated with chemical manufacturing and our business operations generally; inability to acquire and integrate businesses, assets, products or technologies; protection of our intellectual property and proprietary information; prolonged work stoppages as a result of labor difficulties; cybersecurity and data privacy incidents; failure to maintain effective internal controls; disruptions in transportation and logistics; our inability to achieve some or all of the anticipated benefits of our spin-off including uncertainty regarding qualification for expected tax treatment; fluctuations in our stock price; and changes in laws or regulations applicable to our business. Forward-looking statements are not guarantees of future performance and actual results could differ materially from those contemplated by the forward-looking statements as a result of a number of risks, uncertainties and other factors including those noted above and those detailed in Item 1A of Part I and elsewhere in our 2018 Form 10-K and subsequent 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. We do not undertake to update or revise any of our forward-looking statements.

Business Overview

We produce and sell caprolactam as a commodity product and produce and sell our Nylon 6 resin as both a commoditized and differentiated resin product. 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 market-based and value-based pricing models. 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 differentiated nylon resin products. Our differentiated Nylon 6 products are typically valued at a higher level than commodity resin products.

Following a 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, which compressed industry margins for Nylon 6 resin and caprolactam

20

to historic lows. Since 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 the Nylon 6 end-market growth will continue to generally track global GDP over the long-term; applications such as packaging and engineering plastics have potential to grow at faster rates given certain macrotrends. Additionally, one of our strategies is to continue developing higher-value, differentiated Nylon 6 products, such as our co-polymer offerings, in current and new customer applications.

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 the price of crops. Our ammonium sulfate product is positioned with the added value proposition of sulfur nutrition to increase yields of key crops.

We produce ammonium sulfate fertilizer continuously throughout the year as part of our manufacturing process, but quarterly sales experience seasonality 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. While our integration, scale and range of product offerings make us one of the most efficient manufacturers in our industry, these attributes also expose us to increased risk associated with material disruptions at any one of our production facilities or logistics operations which could impact the overall manufacturing supply chain. Further, although we believe that our sources of supply for our raw materials, including cumene, natural gas and sulfur, are generally robust, it is difficult to predict the impact that shortages, increased costs and related supply chain logistics considerations may have in the future. In order to mitigate the risk of unplanned interruptions, we schedule several planned plant turnarounds each year to conduct routine and major maintenance across our facilities. We also utilize maintenance excellence and mechanical integrity programs, targeted buffer inventory of intermediate chemicals necessary for our manufacturing process, and co-producer swap arrangements, which are intended to mitigate the extent of any production losses as a result of planned and unplanned downtime; however, the mitigation of all or part of any such production impact cannot be assured.

Recent Developments

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. As previously reported in our 2018 Form 10-K, the Company was notified during the first quarter of 2019 that the U.S. Attorney’s Office for the Eastern District of Virginia had closed its investigation and no further action by the Company was required. On May 13, 2019, the Company announced that the United States government notified the Company that the balance of the criminal investigation concluded with no further action required.

On May 2, 2019, the Company approved the closure of its Pottsville, Pennsylvania films plant as part of its broader strategic efforts to improve the Company’s competitive position in providing quality film products and services to its customers. The Company has also announced a strategic alliance with Oben Holdings Group S.A. (“Oben”), a third-party producer of films for the flexible packaging industry, leveraging the Company's sales channels and Nylon 6 resin supply with Oben's new state-of-the-art manufacturing facility. The Company expects the closure to be completed during the third quarter of 2019. We recognized restructuring costs of $12.6 million during the second quarter of 2019. See “Note 13. Restructuring” to the Condensed Consolidated Financial Statements included in Part I, Item 1 of this Form 10-Q for further information.

On February 19, 2019, the Company announced that it filed anti-dumping duty petitions covering imports of acetone with the International Trade Commission (“ITC”) and U.S. Department of Commerce. The petitions allege that dumped acetone imports

21

into the United States from Belgium, Korea, Saudi Arabia, Singapore, South Africa, and Spain have caused material injury to the domestic industry. On April 4, 2019, the ITC voted to continue the anti-dumping duty investigations concerning imports of acetone from all such nations other than Saudi Arabia. On July 30, 2019, the U.S. Department of Commerce announced its preliminary affirmative determination regarding anti-dumping duties for Singapore and Spain. Any preliminary duty determinations for the remaining three countries are expected to be announced by the end of the third quarter of 2019. The Company continues to expect the full investigation process to be completed over the next 7 to 9 months.

2019 Operational Events

On March 11, 2019, the Company announced that it declared force majeure on its phenol product line as a result of shortages and delivery delays of its key raw material, cumene. The Company's cumene deliveries were reduced due to weather related logistics disruptions in the Gulf Coast area and supplier operational constraints. As a result of this force majeure event, phenol production at the Company's Frankford, Pennsylvania facility and caprolactam production at its Hopewell, Virginia facility were reduced. The Company incurred an approximately $6.9 million unfavorable impact to pre-tax income in the first quarter of 2019, including the unfavorable impact of fixed cost absorption and incremental logistics costs. In addition, the Company incurred an approximately $1.4 million unfavorable impact to pre-tax income in the first quarter of 2019 and an approximately $2.3 million unfavorable impact to pre-tax income in the second quarter of 2019 due to lost sales. The Company remains on force majeure with phenol customers.

On June 24, 2019, the Company announced that it was assessing the potential business impact of the fire that occurred at Philadelphia Energy Solutions' (“PES”) refinery in Philadelphia. PES is one of multiple suppliers to the Company of cumene, a feedstock material used to produce phenol, acetone and other chemical intermediates. The Company continues to operate its facilities while implementing its mitigation plans, including evaluation of business interruption insurance. The PES fire did not have a material impact on second quarter 2019 financial results; however, the Company anticipates an approximately $6 to $8 million and $5 to $7 million unfavorable impact to pre-tax income in the third and fourth quarters of 2019, respectively, including incremental raw material and logistics costs as well as a modest unfavorable impact from fixed cost absorption. The Company continues to assess long-term optionality for cumene supply and logistics, while optimizing expected base feedstock and logistic cost increases as it realigns its supply chain into 2020.

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. 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 of 2018 due to lost sales. The Company submitted a business interruption insurance claim related to the first quarter 2018 weather event and recorded a benefit of $6.6 million and $2.3 million to Cost of goods sold in the first and second quarters of 2019, respectively. The business interruption claim has been closed with a total recorded benefit of approximately $12 million.

Results of Operations

(Dollars in thousands, unless otherwise noted)

Sales

	Three Months Ended June 30,				Six Months Ended June 30,
	2019		2018		2019		2018
Sales	$	345,215	$	400,459	$	660,110	$	759,697
% change compared with prior year period	(13.8)%				(13.1)%

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

22

	Three Months Ended June 30, 2019	Six Months Ended June 30, 2019
Volume	(5.1)%	(4.2)%
Price	(8.7)%	(8.9)%
	(13.8)%	(13.1)%

Sales decreased in the three months ended June 30, 2019 compared to the prior year period by $55.2 million (approximately 14%) due primarily to lower sales prices (approximately 9%) driven by formula-based pass-through pricing (approximately 9% unfavorable impact), particularly for benzene and propylene (inputs to cumene which is a key feedstock material for our products). Our market-based pricing was relatively flat with increases in ammonium sulfate offset by decreases in chemical intermediates, particularly acetone. Volume decreased by approximately 5% due primarily to continued challenging acetone industry dynamics, the previously disclosed phenol force majeure and decreased nylon volume, partially offset by improved ammonium sulfate volume.

Sales decreased in the six months ended June 30, 2019 compared to the prior year period by $99.6 million (approximately 13%) due primarily to lower sales prices (approximately 9%) driven by formula-based pass-through pricing (approximately 10% unfavorable impact), particularly for benzene and propylene, partially offset by market-based price increases (1% favorable impact) in ammonium sulfate, nylon and caprolactam partially offset by decreases in chemical intermediates, particularly acetone. Volume decreased by approximately 4% due primarily to the phenol force majeure discussed above and continued challenging acetone industry dynamics, partially offset by improved caprolactam production and sales.

Costs of Goods Sold

	Three Months Ended June 30,				Six Months Ended June 30,
	2019		2018		2019		2018
Costs of goods sold	$	303,128	$	342,958	$	570,008	$	664,278
% change compared with prior year period	(11.6)%				(14.2)%
Gross Margin percentage	12.2%		14.4%		13.6%		12.6%

Costs of goods sold decreased in the three months ended June 30, 2019 compared to the prior year period by $39.8 million (approximately 12%) due primarily to (i) lower prices of raw materials, particularly benzene and propylene (approximately 12%), and (ii) lower manufacturing costs driven by improved operational performance (approximately 2%), partially offset by the Pottsville restructuring costs (approximately 4%).

Costs of goods sold decreased in the six months ended June 30, 2019 compared to the prior year period by $94.3 million (approximately 14%) due primarily to (i) lower prices of raw materials, particularly benzene and propylene (approximately 12%), (ii) lower manufacturing costs versus higher spend in the prior year as a result of the first quarter 2018 weather event, including purchases of feedstocks which are normally manufactured by the Company (approximately 2%), and (iii) the benefit of business interruption insurance proceeds recognized in 2019 related to the first quarter 2018 weather event claim (approximately 1%), partially offset by the Pottsville restructuring costs (approximately 2%).

Gross margin percentage decreased by approximately 2% in the three months ended June 30, 2019 compared to the prior year period primarily due to (i) lower sales volume related primarily to challenging acetone industry dynamics (approximately 4%) and (ii) the Pottsville restructuring costs (approximately 4%), partially offset by (i) the net favorable impact of lower raw material and customer pricing (approximately 3%) and (ii) lower manufacturing costs driven by improved operational performance (approximately 2%).

Gross margin percentage increased by approximately 1% in the six months ended June 30, 2019 compared to the prior year period due to (i) the net favorable impact of lower raw material and customer pricing (approximately 3%), (ii) lower manufacturing costs versus the impact of the first quarter 2018 weather event (approximately 2%) and (iii) the benefit of business interruption insurance proceeds (approximately 1%) discussed above, partially offset by (i) lower sales volume related to challenging acetone industry dynamics and phenol force majeure (approximately 3%) and (ii) Pottsville restructuring costs (approximately 2%).

Selling, General and Administrative Expenses

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	Three Months Ended June 30,				Six Months Ended June 30,
	2019		2018		2019		2018
Selling, general and administrative expenses	$	20,009	$	17,919	$	39,422	$	37,132
Percent of sales	5.8%		4.5%		6.0%		4.9%

Selling, general and administrative expenses increased in the three and six months ended June 30, 2019 compared to the prior period due primarily to higher legal and IT infrastructure costs, partially offset by lower costs associated with the exit of Honeywell transition services in 2018.

Tax Expense

	Three Months Ended June 30,				Six Months Ended June 30,
	2019		2018		2019		2018
Tax expense	$	5,280	$	9,590	$	12,104	$	13,156
Effective tax rate	25.6%		25.2%		25.4%		24.7%

The Company’s effective tax rate for the three months ended June 30, 2019 and 2018 was higher compared to the U.S. federal statutory rate due primarily to state taxes and executive compensation deduction limitations offset partially by the research and development tax credit. The Company’s effective tax rate for the three and six months ended June 30, 2019 was higher than the prior year period due primarily to an increase in expected non-deductible executive compensation amounts for 2019 and a decrease in the benefits from the vesting of restricted stock units.

Net Income

	Three Months Ended June 30,				Six Months Ended June 30,
	2019		2018		2019		2018
Net income	$	15,346	$	28,410	$	35,520	$	40,003

As a result of the factors described above, Net income was $15.3 million and $35.5 million for the three and six months ended June 30, 2019 as compared to $28.4 million and $40.0 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, and EBITDA and EBITDA Margin excluding the one-time Pottsville restructuring charges described below. EBITDA is defined as Net income before Interest, Income taxes and 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, and EBITDA and EBITDA Margin excluding the one-time Pottsville restructuring charges, to their most directly comparable GAAP financial measure:

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	Three Months Ended June 30,				Six Months Ended June 30,
	2019		2018		2019		2018
Net income	$	15,346	$	28,410	$	35,520	$	40,003
Interest expense, net	1,328		1,598		2,434		4,688
Income taxes	5,280		9,590		12,104		13,156
Depreciation and amortization	13,957		13,371		27,872		25,913
EBITDA (non-GAAP)	35,911		52,969		77,930		83,760
One-time Pottsville restructuring charges (1)	12,623		—		12,623		—
EBITDA excluding one-time Pottsville restructuring charges (non-GAAP)	$	48,534	$	52,969	$	90,553	$	83,760
Sales	$	345,215	$	400,459	$	660,110	$	759,697
EBITDA margin (non-GAAP)	10.4%		13.2%		11.8%		11.0%
EBITDA margin excluding one-time Pottsville restructuring charges (non-GAAP)	14.1%		13.2%		13.7%		11.0%

(1) Current year one-time Pottsville restructuring charges reflect the closure of the Company's Pottsville, Pennsylvania films plant. See “Note 13. Restructuring” to the Condensed Consolidated Financial Statements included in Part I, Item 1 of this Form 10-Q for further information.

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, in our "Note Regarding Forward-Looking Statements" above, and in the risk factors previously disclosed in our 2018 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 cash flows are affected by capital requirements and production volume, which may be materially impacted by unanticipated events such as unplanned downtime, material disruptions at our production facilities 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, strategic acquisitions and debt management. We believe that our future cash from operations, together with cash on hand and our access to 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 2018 Form 10-K, 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 2019.

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We expect that our primary cash requirements for the remainder of 2019 will be to fund costs associated with ongoing operations, capital expenditures, share repurchases and amounts related to other contractual obligations.

The Company made contributions to the defined benefit pension plan of $0.5 million in the second quarter 2019. No contributions were made in the first quarter of 2019. The Company plans to make pension plan contributions during 2019 sufficient to satisfy pension funding requirements in an aggregate amount of approximately $4 to $6 million and will make additional contributions in future years sufficient to satisfy pension funding requirements in those periods.

On May 4, 2018, the Company announced that its Board of Directors (the “Board”) authorized a share repurchase program of up to $75 million of the Company’s common stock. On February 22, 2019, the Company announced that the Board authorized a share repurchase program of up to an additional $75 million of the Company’s common stock, which was in addition to the remaining capacity available under the May 2018 share repurchase program. 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.

As of June 30, 2019, the Company had repurchased 2,555,713 shares of common stock for an aggregate of $77.7 million at a weighted average market price of $30.40 per share. As of June 30, 2019, $72.3 million remained available for repurchase under the current authorization. During the period July 1, 2019 through July 26, 2019, we repurchased an additional 193,176 shares at a weighted average market price of $24.82 per share. After giving effect to these repurchases, we have approximately $67.5 million of remaining capacity authorized.

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 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, as well as financial covenants that require the Company to maintain interest coverage and leverage ratios at levels specified in the Amended and Restated Credit Agreement. These covenants may limit how we conduct our business, and in the event of certain defaults, our repayment obligations may be accelerated. We were in compliance with all of our covenants at June 30, 2019. As of June 30, 2019, $169 million is available for use out of the total of $425 million under the Revolving Credit Facility.

In addition to the amount borrowed on the Amendment Date, the Company borrowed an incremental $210 million for working capital purposes under the Revolving Credit Facility and repaid $155 million to bring the balance under the Revolving Credit Facility to $255 million at June 30, 2019. Going forward, we expect that cash provided by operating activities will fund future interest payments on the Company's outstanding indebtedness.

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Cash Flow Summary

	Six Months Ended June 30,
	2019		2018
Cash provided by (used for):
Operating activities	$	67,363	$	77,221
Investing activities	(72,486)		(54,677)
Financing activities	12,372		(61,262)
Net change in cash and cash equivalents	$	7,249	$	(38,718)

Cash provided by operating activities decreased by $9.9 million for the six months ended June 30, 2019 versus the prior year period due primarily to a $19.7 million reduction in cash flow from working capital (comprised of Accounts receivables, Inventories, Accounts payable and Deferred income and customer advances) for the first six months ended June 30, 2019 versus a $6.0 million improvement in the prior year period, partially offset by a favorable impact from the timing of cash payments on Accrued liabilities and Deferred income taxes of $5.0 million and $3.3 million, respectively, versus the prior year period. The Pottsville restructuring charge had a net neutral impact on operational cash flows for the six months ended June 30, 2019.

Cash used for investing activities increased by $17.8 million for the six months ended June 30, 2019 versus the prior year period due to an increase in cash paid for capital expenditures.

Cash provided by financing activities increased by $73.6 million for the six months ended June 30, 2019 versus the prior year period due to net borrowings of $55.0 million for the six months ended June 30, 2019 compared to net repayments of $56.6 million during the prior year period, offset by $40.3 million in cash outflows for share repurchases during the six months ended June 30, 2019 compared to $3.1 million in cash outflows during the prior year period, both of which are 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:

	Six Months Ended June 30, 2019
Capital expenditures in Accounts payable at December 31, 2018	$	27,258
Purchases of property, plant and equipment	62,394
Less: Capital expenditures in Accounts payable at June 30, 2019	(18,451)
Cash paid for capital expenditures	$	71,201

For the full year 2019, we expect the Company’s total capital expenditures to be approximately $150 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 2018 Form 10-K. While there have been no material changes to our critical accounting policies, or the methodologies or assumptions we apply under them, during the first quarter of 2019, as described in “Note 2. Recent Accounting Pronouncements,” the Company changed the manner in which it accounts for leases under guidance that became effective January 1, 2019.

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Off-Balance Sheet Arrangements and Contractual Obligations

As of June 30, 2019, 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 2018 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. 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.

On November 6, 2018, the Company entered into an interest rate swap agreement for a notional amount of $50 million to exchange floating for fixed rate interest payments for our LIBOR-based borrowings.

This interest rate swap had a fair value of zero at inception, was effective November 30, 2018 and has been designated as a cash flow hedge. This interest rate swap, with a maturity date of November 30, 2021, converts the Company’s interest rate payments on the first $50 million of variable-rate 1-month LIBOR-based debt to a fixed interest rate. As a result of this interest rate swap, approximately 20% of our total borrowings as of June 30, 2019 are at a fixed interest rate. This interest rate swap involves the receipt of floating rate amounts in exchange for fixed rate interest payments over the life of the swap without an exchange of the underlying principal amount.

A hedge effectiveness assessment was completed by comparing the critical terms of the hedged item with the hedging instrument, and also by reviewing the credit standing of the counterparty. As of June 30, 2019, it was determined that the critical terms continued to exactly match, and that the counterparty still had the ability to honor their obligation. As a result, the hedge continued to be deemed effective.

Based on current borrowing levels at June 30, 2019, net of the interest rate swap, a 25-basis point fluctuation in interest rates for the six months ended June 30, 2019 would have resulted in an increase or decrease to our interest expense of approximately $0.5 million.

See “Note 12. Derivative and Hedging Instruments” to the Condensed Consolidated Financial Statements, included in Part I. Item 1 of this Form 10-Q, for a discussion relating to credit and market, commodity price and interest rate risk.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

The Company maintains disclosure controls and procedures designed to provide reasonable assurance that information required to be disclosed in 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, including the Chief Executive Officer and Chief Financial Officer, as appropriate, 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.

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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 June 30, 2019, 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 June 30, 2019 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 outside 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 financial position, results of operations or operating cash flows.

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. As previously reported in our 2018 Form 10-K, the Company was notified during the first quarter of 2019 that the U.S. Attorney’s Office for the Eastern District of Virginia had closed its investigation and no further action by the Company was required. On May 13, 2019, the Company announced that the United States government notified the Company that the balance of the criminal investigation concluded with no further action required.

ITEM 1A. RISK FACTORS

There have been no material changes to our risk factors as previously disclosed in Item 1A of Part I of the Company’s 2018 Form 10-K, which are hereby incorporated by reference.

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

On May 4, 2018, the Company announced that the Board authorized a share repurchase program of up to $75 million of the Company’s common stock. On February 22, 2019, the Company announced that the Board authorized a share repurchase program of up to an additional $75 million of the Company's common stock, which authorization was in addition to the remaining capacity authorized under the May 2018 share repurchase program. 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 share repurchase program has no expiration date and may be modified, suspended or discontinued at any time.

The below table sets forth the repurchases of Company common stock, by month, for the quarter ended June 30, 2019:

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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
April 2019	226,626	$	29.90	226,626	$	81,920,399
May 2019	231,964	28.20		231,964	75,380,096
June 2019	119,455	25.83		119,455	72,294,632
Total	578,045	$	28.38	578,045

During the period July 1, 2019 through July 26, 2019, we repurchased an additional 193,176 shares at a weighted average market price of $24.82 per share. After giving effect to these repurchases, we have approximately $67.5 million of remaining capacity authorized under the current authorization.

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ITEM 6. EXHIBITS 

Exhibit	Description
3.1	Amended and Restated Certificate of Incorporation of AdvanSix Inc. (conformed copy)
3.2	Amended and Restated By-laws of AdvanSix Inc.
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

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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: August 1, 2019	By:	/s/ Michael Preston
		Michael Preston
		Senior Vice President and Chief Financial Officer

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EX-3.1

Exhibit 3.1

AMENDED AND RESTATED

CERTIFICATE OF INCORPORATION

OF

ADVANSIX INC.

(Effective as of June 11, 2019)

ARTICLE I

The name of the corporation (hereinafter called the “Corporation”) is AdvanSix Inc.

ARTICLE II

The address of the Corporation’s registered office in the State of Delaware is 2711 Centerville Road, Suite 400, New Castle County, Wilmington, Delaware 19808. The name of the Corporation’s registered agent at such address is Corporation Service Company.

ARTICLE III

The purpose of the Corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of the State of Delaware.

ARTICLE IV

SECTION 1. The total number of shares of all classes of stock which the Corporation shall have authority to issue is 250,000,000 shares, consisting of (1) 50,000,000 shares of Preferred Stock, par value $0.01 per share (“Preferred Stock”), and (2) 200,000,000 shares of Common Stock, par value $0.01 per share (“Common Stock”). The number of authorized shares of either the Preferred Stock or the Common Stock may be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of the holders of a majority in voting power of the stock of the Corporation entitled to vote thereon irrespective of the provisions of Section 242(b)(2) of the General Corporation Law of the State of Delaware (or any successor provision thereto), and no vote of the holders of either the Preferred Stock or the Common Stock voting separately as a class shall be required therefor.

SECTION 2. The Board of Directors of the Corporation (the “Board of Directors”) is hereby expressly authorized, by resolution or resolutions, to provide, out of the unissued shares of Preferred Stock, for series of Preferred Stock and, with respect to each such series, to fix the number of shares constituting such series and the designation of such series, the voting powers (if any) of the shares of such series, and the preferences and relative, participating, optional or other special rights, if any, and any qualifications, limitations or restrictions thereof, of the shares of such series. The powers, preferences and relative, participating, optional and other special rights of each series of Preferred Stock, and the qualifications, limitations or

restrictions thereof, if any, may differ from those of any and all other series at any time outstanding.

SECTION 3. (a) Each holder of Common Stock, as such, shall be entitled to one vote for each share of Common Stock held of record by such holder on all matters on which stockholders generally are entitled to vote; provided, however, that, except as otherwise required by law, holders of Common Stock, as such, shall not be entitled to vote on any amendment to this Amended and Restated Certificate of Incorporation (including any Certificate of Designation relating to any series of Preferred Stock) that relates solely to the terms of one or more outstanding series of Preferred Stock if the holders of such affected series are entitled, either separately or together with the holders of one or more other such series, to vote thereon pursuant to this Amended and Restated Certificate of Incorporation (including any Certificate of Designation relating to any series of Preferred Stock) or pursuant to the General Corporation Law of the State of Delaware.

(b) Except as otherwise required by law, holders of a series of Preferred Stock, as such, shall be entitled only to such voting rights, if any, as shall expressly be granted to such holders by this Amended and Restated Certificate of Incorporation (including any Certificate of Designation relating to such series).

(c) Subject to applicable law and the rights, if any, of the holders of any outstanding series of Preferred Stock, dividends may be declared and paid on the Common Stock at such times and in such amounts as the Board of Directors in its discretion shall determine.

(d) Upon the dissolution, liquidation or winding up of the Corporation, subject to the rights, if any, of the holders of any outstanding series of Preferred Stock, the holders of the Common Stock, as such, shall be entitled to receive the assets of the Corporation available for distribution to its stockholders ratably in proportion to the number of shares held by them.

ARTICLE V

SECTION 1. (a) The business and affairs of the Corporation shall be managed by or under the direction of the Board of Directors. Except as otherwise fixed pursuant to the terms of any outstanding series of Preferred Stock pursuant to this Amended and Restated Certificate of Incorporation (including any Certificate of Designation relating to such series of Preferred Stock), the number of directors of the Corporation shall be fixed from time to time by the Board of Directors. In no event shall a decrease in the number of directors constituting the Board of Directors shorten the term of any incumbent director.

(b) The directors, other than those who may be elected by the holders of any series of Preferred Stock voting separately pursuant to this Amended and Restated Certificate of Incorporation (including any Certificate of Designation relating to such series of Preferred Stock), shall be elected by the stockholders entitled to vote thereon at each annual meeting of the stockholders. From the effective date of this Amended and Restated Certificate of Incorporation until the election of the directors at the 2020 annual meeting of stockholders, the directors of the Corporation shall be divided into three classes, designated Class I, Class II and Class III. Each class shall consist, as nearly as may be possible, of one-third of the total number of directors

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constituting the entire Board of Directors. If the number of directors has changed, any increase or decrease shall be apportioned among the classes so as to maintain the number of directors in each class as nearly equal as possible, and any additional director of any class elected to fill a vacancy resulting from an increase in such class shall hold office for a term that shall coincide with the remaining term of that class. The initial assignment of directors to each such class shall be made by the Board of Directors. The term of office of the initial Class I directors shall expire at the 2017 annual meeting of stockholders, the term of office of the initial Class II directors shall expire at the 2018 annual meeting of stockholders and the term of office of the initial Class III directors shall expire at the 2019 annual meeting of stockholders. Each director elected at the 2017, 2018 or 2019 annual meeting of stockholders shall belong to the same class as the director whose term shall have then expired and who is being succeeded by such director. Each Class I director elected at the 2017 annual meeting of stockholders, each Class II director elected at the 2018 annual meeting of stockholders and each Class III director elected at the 2019 annual meeting of stockholders shall hold office until the 2020 annual meeting of stockholders and, in each case, until his or her respective successor shall have been duly elected and qualified or until his or her earlier resignation or removal. Commencing with the 2020 annual meeting of stockholders, each director shall be elected annually and shall hold office until the next annual meeting of stockholders and until his or her respective successor shall have been duly elected and qualified or until his or her earlier resignation or removal. Pursuant to such procedures, effective as of the conclusion of the 2020 annual meeting of stockholders, the Board of Directors will no longer be classified under Section 141(d) of the General Corporation Law of the State of Delaware and directors shall no longer be divided into three classes. The election of directors need not be by written ballot.

SECTION 2. Advance notice of nominations for the election of directors shall be given in the manner and to the extent provided in the By-laws of the Corporation.

SECTION 3. (a) Except as otherwise provided for or fixed by or pursuant to the provisions of this Amended and Restated Certificate of Incorporation relating to the rights of the holders of any outstanding series of Preferred Stock (including any Certificate of Designation relating to such series of Preferred Stock), newly created directorships resulting from any increase in the number of directors and any vacancies on the Board of Directors resulting from death, resignation, removal or other cause shall only be filled by the Board of Directors by the affirmative vote of a majority of the remaining directors then in office, even though less than a quorum of the Board of Directors, or by a sole remaining director, or if not so filled, by the stockholders at the next annual meeting thereof. Any director elected in accordance with the first sentence of this Section 3 shall hold office for a term that shall coincide with the remaining term of the class such director is elected to and until such director’s successor shall have been duly elected and qualified or until his or her earlier resignation or removal.

(b) From the effective date of this Amended and Restated Certificate of Incorporation until the election of directors at the 2020 annual meeting of stockholders, any director or the entire Board of Directors may only be removed for cause, such removal to require the affirmative vote of shares representing at least a majority of the votes entitled to be cast by the then outstanding shares of all classes and series of capital stock of the Corporation entitled generally to vote on the election of directors of the Corporation. From and after the 2020 annual meeting of stockholders, any director or the entire Board of Directors may be removed with or

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without cause, and, in either case, such removal shall require the affirmative vote of shares representing at least a majority of the votes entitled to be cast by the then outstanding shares of all classes and series of capital stock of the Corporation entitled generally to vote on the election of directors of the Corporation. Notwithstanding the foregoing, whenever holders of outstanding shares of one or more series of Preferred Stock voting separately are entitled to elect directors of the Corporation pursuant to the provisions of this Amended and Restated Certificate of Incorporation (including any Certificate of Designation relating to such series of Preferred Stock), any such director of the Corporation so elected may be removed in accordance with this Amended and Restated Certificate of Incorporation (including such Certificate of Designation).

ARTICLE VI

Subject to the rights of the holders of any outstanding series of Preferred Stock, any action required or permitted to be taken by the stockholders of the Corporation must be effected at a duly called annual or special meeting of stockholders of the Corporation and may not be effected by any consent in writing by such stockholders. Except as otherwise required by law and subject to the rights of the holders of any outstanding series of Preferred Stock, special meetings of stockholders of the Corporation may be called only by the Board of Directors pursuant to a resolution approved by a majority of the entire Board of Directors or as otherwise provided in the By-laws of the Corporation.

ARTICLE VII

In furtherance and not in limitation of the powers conferred upon it by law, the Board of Directors is expressly authorized to adopt, repeal, alter or amend the By-laws of the Corporation by the vote of a majority of the entire Board of Directors. From the effective date of this Amended and Restated Certificate of Incorporation until the election of the directors at the 2020 annual meeting of stockholders, in addition to any requirements of law and any other provision of this Amended and Restated Certificate of Incorporation (and notwithstanding the fact that a lesser percentage may be specified by law), the affirmative vote of the holders of at least 66 2/3% of the combined voting power of the then outstanding shares of all classes and series of capital stock of the Corporation entitled generally to vote in the election of directors of the Corporation, voting together as a single class, shall be required for stockholders to adopt, amend, alter or repeal any provision of the By-laws of the Corporation. Commencing with the 2020 annual meeting of stockholders, in addition to any requirements of law and any other provision of this Amended and Restated Certificate of Incorporation (and notwithstanding the fact that a lesser percentage may be specified by law), the affirmative vote of the holders of at least a majority of the combined voting power of the then outstanding shares of all classes and series of capital stock of the Corporation entitled generally to vote in the election of directors of the Corporation, voting together as a single class, shall be required for stockholders to adopt, amend, alter or repeal any provision of the By-laws of the Corporation.

ARTICLE VIII

The Corporation reserves the right to amend, alter or repeal any provision contained in this Amended and Restated Certificate of Incorporation, in the manner now or

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hereafter prescribed by statute, and all rights conferred upon stockholders herein are subject to this reservation.

ARTICLE IX

SECTION 1. To the fullest extent that the General Corporation Law of the State of Delaware or any other law of the State of Delaware as it exists or as it may hereafter be amended permits the limitation or elimination of the liability of directors, no director of the Corporation shall be liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director.

SECTION 2. To the fullest extent that the General Corporation Law of the State of Delaware or any other law of the State of Delaware as it exists or as it may hereafter be amended permits, the Corporation may provide indemnification of (and advancement of expenses to) its current and former directors, officers and agents (and any other persons to which the General Corporation Law of the State of Delaware permits the Corporation to provide indemnification) through By-law provisions, agreements with such agents or other persons, votes of stockholders or disinterested directors or otherwise.

SECTION 3. No amendment to or repeal of any Section of this Article IX, nor the adoption of any provision of this Amended and Restated Certificate of Incorporation inconsistent with this Article IX, shall eliminate or reduce the effect of this Article IX in respect of any matter occurring, or any action or proceeding accruing or arising, prior to such amendment, repeal or adoption of an inconsistent provision.

ARTICLE X

Unless the Corporation consents in writing to the selection of an alternative forum, the sole and exclusive forum for (a) any derivative action or proceeding brought on behalf of the Corporation, (b) any action asserting a claim of breach of a fiduciary duty owed by any director, officer or other employee or stockholder of the Corporation to the Corporation or the Corporation’s stockholders, (c) any action asserting a claim arising pursuant to any provision of the General Corporation Law of the State of Delaware (or any successor provision thereto) or as to which the General Corporation Law of the State of Delaware (or any successor provision thereto) confers jurisdiction on the Court of Chancery of the State of Delaware or (d) any action asserting a claim governed by the internal affairs doctrine shall be the Court of Chancery of the State of Delaware or, if the Court of Chancery of the State of Delaware does not have jurisdiction, any other state or federal court located within the State of Delaware. Any person or entity purchasing or otherwise acquiring or holding any interest in shares of capital stock of the Corporation shall be deemed to have notice of and consented to the provisions of this Article X.

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EX-3.2

Exhibit 3.2

ADVANSIX INC.

AMENDED AND RESTATED BY-LAWS

(Effective as of June 11, 2019)

ARTICLE I

Offices

SECTION 1.Registered Office. The registered office of AdvanSix Inc. (hereinafter, the “Corporation”) in the State of Delaware shall be at 2711 Centerville Road, Suite 400, Wilmington, New Castle County, Delaware 19808, and the registered agent shall be Corporation Service Company, or such other office or agent as the Board of Directors of the Corporation (the “Board”) shall from time to time select.

SECTION 2.Other Offices. The Corporation may also have an office or offices, and keep the books and records of the Corporation, except as may otherwise be required by law, at such other place or places, either within or outside of the State of Delaware, as the Board may from time to time determine or the business of the Corporation may require.

ARTICLE II

Meetings of Stockholders

SECTION 1.Place of Meeting. All meetings of the stockholders of the Corporation (the “stockholders”) shall be at a place, either within or outside of the State of Delaware, to be determined by the Board.

SECTION 2.Annual Meetings. The annual meeting of the stockholders for the election of directors and for the transaction of such other business as may properly come before the meeting shall be held on such date and at such hour as shall from time to time be fixed by the Board. Any previously scheduled annual meeting of the stockholders may be postponed by action of the Board taken prior to the time previously scheduled for such annual meeting of the stockholders.

SECTION 3.Special Meetings. Except as otherwise required by law or the Amended and Restated Certificate of Incorporation of the Corporation (the “Certificate”), and subject to the rights of the holders of any outstanding series of Preferred Stock, special meetings of the stockholders for any purpose or purposes may be called only by the Chief Executive Officer or a majority of the entire Board. Only such business as is specified in the Corporation’s notice of any special meeting of stockholders shall come before such meeting. A special meeting shall be held at such place, on such date and at such time as shall be fixed by the Board.

SECTION 4.Notice of Meetings. Except as otherwise provided by law, notice of each meeting of the stockholders, whether annual or special, shall be given by the Corporation not less than 10 days nor more than 60 days before the date of the meeting to each stockholder of record entitled to notice of the meeting. If mailed, such notice shall be deemed given when deposited in the United States mail, postage prepaid, directed to the stockholder at such stockholder’s address as it appears on the records of the Corporation. Each such notice shall state the place, date and hour of the meeting, and, in the case of a special meeting, the purpose or purposes for which the meeting is called. Notice of any meeting of the stockholders shall not be required to be given to any stockholder who shall attend such meeting in person or by proxy without protesting, prior to or at the commencement of the meeting, the lack of proper notice to such stockholder, or who shall waive notice thereof as provided in Article X of these By-laws. Notice of adjournment of a meeting of the stockholders need not be given if the time and place to which it is adjourned are announced at such meeting, unless the adjournment is for more than 30 days or, after adjournment, a new record date is fixed for the adjourned meeting.

SECTION 5.Quorum. Except as otherwise provided by law or by the Certificate, the holders of a majority of the votes entitled to be cast by the stockholders entitled to vote generally, present in person or by proxy, shall constitute a quorum at any meeting of the stockholders; provided, however, that in the case of any vote to be taken by classes or series, the holders of a majority of the votes entitled to be cast by the stockholders of a particular class or series, present in person or by proxy, shall constitute a quorum of such class or series.

SECTION 6.Adjournments. The chairman of the meeting or the holders of a majority of the votes entitled to be cast by the stockholders who are present in person or by proxy may adjourn the meeting from time to time whether or not a quorum is present. In the event that a quorum does not exist with respect to any vote to be taken by a particular class or series, the chairman of the meeting or the holders of a majority of the votes entitled to be cast by the stockholders of such class or series who are present in person or by proxy may adjourn the meeting with respect to the vote(s) to be taken by such class or series. At any such adjourned meeting at which a quorum may be present, any business may be transacted which might have been transacted at the meeting as originally called.

SECTION 7.Order of Business. (a) At each meeting of the stockholders, the Chairman of the Board or, in the absence of the Chairman of the Board, the Chief Executive Officer or, in the absence of the Chairman of the Board and the Chief Executive Officer, such person as shall be selected by the Board, shall act as chairman of the meeting. The order of business at each such meeting shall be as determined by the chairman of the meeting. The chairman of the meeting shall have the right and authority to prescribe such rules, regulations and procedures and to do all such acts and things as are necessary or desirable for the proper conduct of the meeting, including, without limitation, the establishment of procedures for the maintenance of order and safety, limitations on the time allotted to questions or comments on the affairs of the Corporation, restrictions on entry to such meeting after the time prescribed for the commencement thereof and the opening and closing of the voting polls.

(b)At any annual meeting of the stockholders, only such business shall be conducted as shall have been brought before the annual meeting (i) by or at the direction of the chairman of the meeting or (ii) by any stockholder who is a holder of record at the time of the

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giving of the notice provided for in this Section 7, who is entitled to vote at the meeting and who complies with the procedures set forth in this Section 7.

(c)For business properly to be brought before an annual meeting of stockholders by a stockholder, the stockholder must have given timely notice thereof in proper written form to the Secretary of the Corporation (the “Secretary”). To be timely, a stockholder’s notice must be delivered to or mailed and received by the Secretary at the principal executive offices of the Corporation not less than 90 days nor more than 120 days prior to the first anniversary of the date of the immediately preceding annual meeting; provided, however, that in the event that the date of the annual meeting is more than 30 days earlier or more than 60 days later than such anniversary date, notice by the stockholder to be timely must be so delivered or received not earlier than the 120th day prior to such annual meeting and not later than the close of business on the later of the 90th day prior to such annual meeting or the 10th day following the day on which public announcement of the date of such meeting is first made; provided, further, that for the purpose of calculating the timeliness of stockholder notices for the 2017 annual meeting of stockholders, the date of the immediately preceding annual meeting shall be deemed to be April 25, 2016. To be in proper written form, a stockholder’s notice to the Secretary shall set forth in writing as to each matter the stockholder proposes to bring before the annual meeting: (i) a brief description of the business desired to be brought before the annual meeting, the text of the proposal or business (including, without limitation, the complete text of any resolutions proposed for consideration or any amendment to any Corporation document intended to be presented at the annual meeting) and the reasons for conducting such business at the annual meeting; (ii) the name and address of the stockholder proposing such business, as they appear on the Corporation’s books; (iii) the class or series and number of shares of the Corporation owned, directly or indirectly, beneficially and of record by the stockholder and any beneficial owner on whose behalf the business is proposed, and any of their respective affiliates or associates or other parties with whom they are acting in concert, as well as any derivative instrument or similar contract or agreement the value of or return on which is based on or linked to the value of or return of any of the Corporation’s securities; (iv) any material interest of the stockholder in such business; and (v) if the stockholder intends to solicit proxies in support of such stockholder’s proposal, a representation to that effect. The foregoing notice requirements shall be deemed satisfied by a stockholder if the stockholder has notified the Corporation of his or her intention to present a proposal at an annual meeting and such stockholder’s proposal has been included in a proxy statement that has been prepared by management of the Corporation to solicit proxies for such annual meeting; provided, however, that if such stockholder does not appear or send a qualified representative to present such proposal at such annual meeting, the Corporation need not present such proposal for a vote at such meeting, notwithstanding that proxies in respect of such vote may have been received by the Corporation; and provided, further, that the foregoing shall not imply any obligation beyond that required by applicable law to include a stockholder’s proposal in a proxy statement prepared by management of the Corporation. Notwithstanding anything in these By-laws to the contrary, no business shall be conducted at any annual meeting except in accordance with the procedures set forth in this Section 7. The chairman of an annual meeting may refuse to permit any business to be brought before an annual meeting which fails to comply with the foregoing procedures or, in the case of a stockholder proposal, if the stockholder solicits proxies in support of such stockholder’s proposal without having made the representation required by clause (v) of the third preceding sentence.

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SECTION 8.List of Stockholders. It shall be the duty of the Secretary or other officer who has charge of the stock ledger to prepare and make, at least 10 days before each meeting of the stockholders, a complete list of the stockholders entitled to vote thereat, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in such stockholder’s name. Such list shall be produced and kept available at the times and places required by law.

SECTION 9.Voting. (a) Except as otherwise provided by law or by the Certificate, each stockholder of record of any series of Preferred Stock shall be entitled at each meeting of the stockholders to such number of votes, if any, for each share of such stock as may be fixed in the Certificate or in the resolution or resolutions adopted by the Board providing for the issuance of such stock, and each stockholder of record of Common Stock shall be entitled at each meeting of the stockholders to one vote for each share of such stock, in each case, registered in such stockholder’s name on the books of the Corporation:

(i)on the date fixed pursuant to Section 6 of Article VII of these By-laws as the record date for the determination of stockholders entitled to notice of and to vote at such meeting; or

(ii)if no such record date shall have been so fixed, then at the close of business on the day before the day on which notice of such meeting is given, or, if notice is waived, at the close of business on the day before the day on which the meeting is held.

(b)Each stockholder entitled to vote at any meeting of the stockholders may authorize not in excess of three persons to act for such stockholder by proxy. Any such proxy shall be delivered to the secretary of such meeting at or prior to the time designated for holding such meeting, but in any event not later than the time designated in the order of business for so delivering such proxies. No such proxy shall be voted or acted upon after three years from its date, unless the proxy provides for a longer period.

(c)Except as otherwise required by law and except as otherwise provided in the Certificate or these By-laws, at each meeting of the stockholders, all corporate actions to be taken by vote of the stockholders shall be authorized by a majority of the votes cast by the stockholders entitled to vote thereon who are present in person or represented by proxy, and where a separate vote by class or series is required, a majority of the votes cast by the stockholders of such class or series who are present in person or represented by proxy shall be the act of such class or series.

(d)Unless required by law or determined by the chairman of the meeting to be advisable, the vote on any matter, including, without limitation, the election of directors, need not be by written ballot.

SECTION 10.Inspectors. The chairman of the meeting shall appoint one or more inspectors to act at any meeting of the stockholders. Such inspectors shall perform such duties as shall be required by law or specified by the chairman of the meeting. Inspectors need not be stockholders. No director or nominee for the office of director shall be appointed such inspector.

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SECTION 11.Public Announcements. For the purpose of Section 7 of this Article II and Section 2(d) of Article III, “public announcement” shall mean disclosure (i) in a press release reported by the Dow Jones Newswire, Business Wire, Reuters Information Service or any similar or successor news wire service or (ii) in a communication distributed generally to stockholders and in a document publicly filed by the Corporation with the Securities and Exchange Commission pursuant to Sections 13, 14 or 15(d) of the Securities Exchange Act of 1934, as amended, or any successor provisions thereto.

ARTICLE III

Board of Directors

SECTION 1.General Powers. The business and affairs of the Corporation shall be managed by or under the direction of the Board, which may exercise all such powers of the Corporation and do all such lawful acts and things as are not by law or by the Certificate directed or required to be exercised or done by the stockholders.

SECTION 2.Number, Qualification and Election. (a) The number of directors constituting the Whole Board shall be determined in accordance with the Certificate. The term “Whole Board” shall mean the total number of authorized directors, whether or not there exist any vacancies or unfilled previously authorized directorships. The terms of office of directors shall be governed by the Certificate.

(b)Each director shall be at least 21 years of age. Directors need not be stockholders of the Corporation. No person shall qualify for service as a director of the Corporation if he or she is a party to any compensatory, payment, indemnification or other financial agreement, arrangement or understanding with any person or entity other than the Corporation, or has received any such compensation or other payment from any person or entity other than the Corporation, in each case in connection with candidacy or service as a director of the Corporation, unless he or she discloses such compensatory, payment or other financial agreement, arrangement or understanding, or receipt of any such compensation or other payment, to the Corporation pursuant to the requirements and procedures set forth in Section 16(a) of this Article III as if such person were a Stockholder Nominee thereunder.

(c)In any uncontested election of directors, each person receiving a majority of the votes cast shall be deemed elected. For purposes of this paragraph, a “majority of the votes cast” shall mean that the number of votes cast “for” a director must exceed the number of votes cast “against” that director (with “abstentions” and “broker non-votes” not counted as a vote cast with respect to that director). In any contested election of directors, the persons receiving a plurality of the votes cast, up to the number of directors to be elected in such election, shall be deemed elected. Any incumbent director who fails to receive a majority of the votes cast in an uncontested election shall submit an offer to resign from the Board no later than two weeks after the certification by the Corporation of the voting results. An uncontested election is one in which the number of individuals who have been nominated for election as a director is equal to, or less than, the number of directors constituting the Whole Board. A contested election is one in which the number of persons nominated exceeds the number of directors to be elected as of the

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date that is 10 days prior to the date that the Corporation first mails its notice of meeting for such meeting to the stockholders.

(d)The Board shall consider the resignation offer and may either (i) accept the offer of resignation or (ii) reject the offer and seek to address the underlying cause(s) of the majority-withheld vote. While the Board may delegate to a committee the authority to assist the Board in its review of the matter, the Board shall decide whether to accept or reject the resignation offer within 90 days following the certification of the stockholder vote. Once the Board makes this decision, the Corporation will promptly make a public announcement of the Board’s decision in the manner described in Section 11 of Article II. If the Board rejects the offer of resignation, the public announcement will include a statement regarding the reasons for its decision.

(e)The chairman of the nominating and governance committee established pursuant to Section 1 of Article IV will have the authority to manage the Board’s review of the resignation offer. In the event it is the chairman of the nominating and governance committee who received a majority-withheld vote, the independent directors who did not receive majority-withheld votes shall select a director to manage the process, and that director shall have the authority otherwise delegated to the chairman of the nominating and governance committee by this Section 2 of Article III. Any director who tenders his or her offer of resignation as a result of a majority-withheld vote shall not participate in the committee’s or the Board’s deliberations or vote on whether to accept or reject the resignation offer.

(f)A majority of the members of the Board shall be persons determined by the Board to be independent directors. In order to determine that a director is independent pursuant to this Section 2, the Board shall make an affirmative determination that the director satisfies applicable regulatory and stock exchange listing requirements to be an independent director of the Corporation and that the director is free of any other relationship (with the Corporation and its consolidated subsidiaries (collectively, the “Company”) or otherwise) that would interfere with the exercise of independent judgment by such director. In making this determination, the Board shall consider all relevant facts and circumstances, including, without limitation, commercial, charitable and familial relationships that exist between the director and the Company, or between entities with which the director is affiliated and the Company. The Board may, from time to time, adopt categorical standards to guide its determinations regarding the materiality of any relationship.

SECTION 3.Notification of Nominations. (a) Subject to the rights of the holders of any outstanding series of Preferred Stock, nominations for the election of directors may be made by the Board or by any stockholder pursuant to this Section 3 who is a stockholder of record at the time of giving of the notice of nomination provided for in this Section 3 and who is entitled to vote for the election of directors. Any stockholder of record entitled to vote for the election of directors at a meeting may nominate persons for election as directors only if timely written notice of such stockholder’s intent to make such nomination is given, either by personal delivery or by United States mail, postage prepaid, to the Secretary. To be timely, a stockholder’s notice must be delivered to or mailed and received at the principal executive offices of the Corporation (i) with respect to an election to be held at an annual meeting of the stockholders, not less than 90 days nor more than 120 days prior to the first anniversary of the

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date of the immediately preceding annual meeting; provided, however, that in the event that the date of the annual meeting is more than 30 days earlier or more than 60 days later than such anniversary date, notice by the stockholder to be timely must be so delivered or received not earlier than the 120th day prior to such annual meeting and not later than the close of business on the later of the 90th day prior to such annual meeting or the 10th day following the day on which public announcement of the date of such meeting is first made; provided, further, that for the purpose of calculating the timeliness of stockholder notices for the 2017 annual meeting of stockholders, the date of the immediately preceding annual meeting shall be deemed to be April 25, 2016 and (ii) with respect to an election to be held at a special meeting of the stockholders for the election of directors, not earlier than the 90th day prior to such special meeting and not later than the close of business on the later of the 60th day prior to such special meeting or the 10th day following the day on which public announcement is first made of the date of the special meeting and of the nominees to be elected at such meeting. Each such notice shall set forth: (a) the name and address, as they appear on the Corporation’s books, of the stockholder who intends to make the nomination and the name and address of the person or persons to be nominated; (b) the class or series and number of shares of the Corporation owned, directly or indirectly, beneficially and of record by the stockholder and any beneficial owner on whose behalf the nomination is made, and any of their respective affiliates or associates or other parties with whom they are acting in concert, as well as any derivative instrument or similar contract or agreement the value of or return on which is based on or linked to the value of or return of any of the Corporation’s securities; (c) a representation that the stockholder is a holder of record of stock of the Corporation entitled to vote in the election of directors and intends to appear in person or by proxy at the meeting to nominate the person or persons specified in the notice; (d) a description of all arrangements or understandings between the stockholder and each nominee and any other person or persons (naming such person or persons) pursuant to which the nomination or nominations are to be made by the stockholder; (e) such other information regarding each nominee proposed by such stockholder as would have been required to be included in a proxy statement filed pursuant to the proxy rules of the Securities and Exchange Commission had each nominee been nominated, or intended to be nominated, by the Board; (f) the executed written consent of each nominee to serve as a director of the Corporation if so elected; and (g) if the stockholder intends to solicit proxies in support of such stockholder’s nominee(s), a representation to that effect. The chairman of the meeting may refuse to acknowledge the nomination of any person not made in compliance with the foregoing procedure or if the stockholder solicits proxies in favor of such stockholder’s nominee(s) without having made the representations required by the immediately preceding sentence. If such stockholder does not appear or send a qualified representative to present such proposal at such meeting, the Corporation need not present such proposal for a vote at such meeting, notwithstanding that proxies in respect of such vote may have been received by the Corporation. Only such persons who are nominated in accordance with the procedures set forth in this Section 3 or Section 15 of this Article III shall be eligible to serve as directors of the Corporation.

(b)Notwithstanding anything in the immediately preceding paragraph of this Section 3 to the contrary, in the event that the number of directors to be elected to the Board at an annual meeting of the stockholders is increased and there is no public announcement naming all of the nominees for directors or specifying the size of the increased Board made by the Corporation at least 90 days prior to the first anniversary of the date of the immediately preceding annual meeting, a stockholder’s notice required by this Section 3 shall also be

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considered timely, but only with respect to nominees for any new positions created by such increase, if it shall be delivered to or mailed to and received by the Secretary at the principal executive offices of the Corporation not later than the close of business on the 10th day following the day on which such public announcement is first made by the Corporation.

SECTION 4.Quorum and Manner of Acting. Except as otherwise provided by law, the Certificate or these By-laws, a majority of the Whole Board shall constitute a quorum for the transaction of business at any meeting of the Board, and, except as so provided, the vote of a majority of the directors present at any meeting at which a quorum is present shall be the act of the Board. The chairman of the meeting or a majority of the directors present may adjourn the meeting to another time and place whether or not a quorum is present. At any adjourned meeting at which a quorum is present, any business may be transacted which might have been transacted at the meeting as originally called.

SECTION 5.Place of Meeting. Subject to Sections 6 and 7 of this Article III, the Board may hold its meetings at such place or places, either within or outside of the State of Delaware, as the Board may from time to time determine, or as shall be specified or fixed in the respective notices or waivers of notice thereof.

SECTION 6.Regular Meetings. Regular meetings of the Board shall be held at such times as the Board shall from time to time determine, at such locations as the Board may determine. If any day fixed for a regular meeting shall be a legal holiday under the laws of the place where the meeting is to be held, the meeting which would otherwise be held on that day shall be held at the same hour on the next succeeding business day. No fewer than four meetings of the Board shall be held per year.

SECTION 7.Special Meetings. Special meetings of the Board shall be held whenever called by the Chairman of the Board, the Chief Executive Officer or by a majority of the non-employee directors, and shall be held at such place, on such date and at such time as he, she or they, as applicable, shall fix.

SECTION 8.Notice of Meetings. Notice of regular meetings of the Board or of any adjourned meeting thereof need not be given. Notice of each special meeting of the Board shall be given by overnight delivery service or mailed to each director, in either case addressed to such director at such director’s residence or usual place of business, at least two days before the day on which the meeting is to be held or shall be sent to such director at such place by telecopy or by electronic transmission or shall be given personally or by telephone, not later than the day before the meeting is to be held, but notice need not be given to any director who shall, either before or after the meeting, submit a waiver of such notice or who shall attend such meeting without protesting, prior to or at its commencement, the lack of notice to such director. Unless otherwise required by these By-laws, every such notice shall state the time and place but need not state the purpose of the meeting.

SECTION 9.Rules and Regulations. The Board may adopt such rules and regulations not inconsistent with the provisions of law, the Certificate or these By-laws for the conduct of its meetings and management of the affairs of the Corporation as the Board may deem proper.

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SECTION 10.Participation in Meeting by Means of Communications Equipment. Any one or more members of the Board or any committee thereof may participate in any meeting of the Board or of any such committee by means of conference telephone or other communications equipment by means of which all persons participating in the meeting can hear each other or as otherwise permitted by law, and such participation in a meeting shall constitute presence in person at such meeting.

SECTION 11.Action Without Meeting. Any action required or permitted to be taken at any meeting of the Board or any committee thereof may be taken without a meeting if all of the members of the Board or of any such committee consent thereto in writing or as otherwise permitted by law and, if required by law, the writing or writings are filed with the minutes or proceedings of the Board or of such committee.

SECTION 12.Chairman. The Board of Directors shall annually select one of its members who is independent under the listing standards of the principal United States exchange upon which the shares of the Corporation are listed to be Chairman and shall fill any vacancy in the position of Chairman at such time and in such manner as the Board of Directors shall determine.

SECTION 13.Resignations. Any director of the Corporation may at any time resign by giving written notice to the Board, the Chairman of the Board, the Chief Executive Officer or the Secretary. Such resignation shall take effect at the time specified therein or, if the time be not specified therein, upon receipt thereof; and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective.

SECTION 14.Compensation. Each director, in consideration of such person serving as a director, shall be entitled to receive from the Corporation such amount per annum and such fees (payable in cash or stock-based compensation) for attendance at meetings of the Board or of committees of the Board, or both, as the Board or a committee thereof shall from time to time determine. In addition, each director shall be entitled to receive from the Corporation reimbursement for the reasonable expenses incurred by such person in connection with the performance of such person’s duties as a director. Nothing contained in this Section 14 shall preclude any director from serving the Corporation or any of its subsidiaries in any other capacity and receiving compensation therefor.

SECTION 15.Proxy Access. (a) The Corporation shall include in its proxy statement and on its form of proxy for an annual meeting of stockholders the name of, and the Required Information (as defined below) relating to, any nominee for election or reelection to the Board who satisfies the eligibility requirements in this Section 15 and Section 16 (a “Stockholder Nominee”) and who is identified in a notice that complies with Section 15(f) of this Article III and that is timely delivered pursuant to Section 15(g) of this Article III (the “Stockholder Notice”) by one or more stockholders acting on behalf of up to twenty stockholders who:

(i)elect at the time of delivering the Stockholder Notice to have such Stockholder Nominee included in the Corporation’s proxy materials;

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(ii)as of the date of the Stockholder Notice and the record date for determining stockholders entitled to vote at the annual meeting of stockholders, Own (as defined below in Section 15(c) of this Article III) and have Owned a number of shares that represents at least 3% of the outstanding shares of the Corporation entitled to vote generally in the election of directors (the “Required Shares”) and have Owned continuously the Required Shares (as adjusted for any stock splits, stock dividends or similar events) for at least three years; and

(iii)satisfy the additional requirements in these By-laws (such stockholder or stockholders, collectively, an “Eligible Stockholder”).

(b)For purposes of satisfying the Ownership requirement under Section 15(a) of this Article III:

(i)the outstanding shares of the Corporation Owned by one or more stockholders may be aggregated; provided that the number of stockholders and other beneficial owners whose ownership of shares is aggregated for such purpose shall not exceed twenty; and

(ii)two or more funds that are (A) under common management and investment control, (B) under common management and funded primarily by the same employer, or (C) a “group of investment companies,” as such term is defined in Section 12(d)(1)(G)(ii) of the Investment Company Act of 1940, as amended, shall, in each case, be treated as one stockholder.

(c)For purposes of this Section 15, an Eligible Stockholder “Owns” only those outstanding shares of the Corporation as to which the stockholder or group of stockholders possesses both:

(i)the full voting and investment rights pertaining to the shares, and

(ii)the full economic interest in (including, without limitation, the opportunity for profit and risk of loss on) such shares;

provided that the number of shares calculated in accordance with clauses (i) and  (ii) of this Section 15(c) shall not include any shares:

(A)sold by such stockholder or any affiliate (as defined below in this Section 15(c)) in any transaction that has not been settled or closed, including, without limitation, any short sale;

(B)borrowed by such stockholder or any affiliate for any purposes or purchased by such stockholder or any affiliate pursuant to an agreement to resell; or

(C)subject to any option, warrant, forward contract, swap, contract of sale, other derivative or similar agreement entered into by such stockholder or any of its affiliates, whether any such instrument or agreement is to be settled with shares or with

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cash based on the notional amount or value of outstanding shares of the Corporation, in any such case which instrument or agreement has, or is intended to have, or if exercised would have, the purpose or effect of:

(i)reducing in any manner, to any extent or at any time in the future, such  stockholder’s or any of its affiliates’ full right to vote or direct the voting of any such shares; and/or

(ii)hedging, offsetting or altering to any degree gain or loss arising from the full economic interest in such shares by such stockholder or affiliate.

A stockholder “Owns” shares held in the name of a nominee or other intermediary so long as the stockholder retains the right to instruct how the shares are voted with respect to the election of directors and possesses the full economic interest in the shares. A stockholder’s Ownership of shares shall be deemed to continue during any period in which the stockholder has delegated any voting power by means of a proxy, power of attorney or other instrument or arrangement that is revocable at any time by the stockholder. A stockholder’s Ownership of shares shall be deemed to continue during any period in which the stockholder has loaned such shares, provided that the stockholder has the power to recall such loaned shares on five business days’ notice and has recalled such loaned shares as of the date of the Stockholder Notice and through the date of the annual meeting of stockholders. The terms “Owned,” “Owning” and other variations of the word “Own” shall have correlative meanings. Whether outstanding shares of the Corporation are “Owned” for these purposes shall be determined by the Board.

For purposes of this Section 15, the term “affiliate” or “affiliates” shall have the meaning ascribed thereto under the General Rules and Regulations under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

(d)No stockholder may be a member of more than one group of stockholders constituting an Eligible Stockholder under this Section 15.

(e)For purposes of this Section 15, the “Required Information” that the Corporation will include in its proxy materials is:

(i)the information concerning the Stockholder Nominee and the Eligible Stockholder that is required to be disclosed in the Corporation’s proxy materials by the applicable requirements of the Exchange Act and the rules and regulations thereunder; and

(ii)if the Eligible Stockholder so elects, a written statement of the Eligible Stockholder, not to exceed 500 words, in support of its Stockholder Nominee, which must be provided at the same time as the Stockholder Notice for inclusion in the Corporation’s proxy materials for the annual meeting of stockholders (the “Statement”).

Notwithstanding anything to the contrary contained in this Section 15, the Corporation may omit from its proxy materials any information or statement that it, in good faith, believes would violate any applicable law, rule, regulation or listing standard. Nothing in this Section 15 shall

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limit the Corporation’s ability to solicit against a stockholder nominee and include in its proxy materials its own statements relating to any Eligible Stockholder or Stockholder Nominee.

(f)The Stockholder Notice shall set forth the information required under Section 3(a) of this Article III and in addition shall include:

(i)the written consent of each Stockholder Nominee to being named in the Corporation’s proxy materials as a nominee and to serving as a director if elected;

(ii)a copy of the Schedule 14N that has been or concurrently is filed with the Securities and Exchange Commission under Exchange Act Rule 14a-18; and

(iii)the written agreement of the Eligible Stockholder (or in the case of a group, each stockholder whose shares are aggregated for purposes of constituting an Eligible Stockholder) addressed to the Corporation, setting forth the following additional agreements, representations and warranties:

(A)a certification as to the number of shares of the Corporation it Owns and has Owned continuously for at least three years as of the date of the Stockholder Notice and agreeing to continue to Own such shares through the date of the annual meeting of stockholders, which statement shall also be included in the written statements set forth in Item 4 of the Schedule 14N filed by the Eligible Stockholder with the Securities and Exchange Commission;

(B)the Eligible Stockholder’s agreement to provide the information required under Section 3(a) of this Article III and the written statements from the record holder and intermediaries as required under Section 15(h) of this Article III verifying the Eligible Stockholder’s continuous Ownership of the Required Shares through and as of the business day immediately preceding the date of the annual meeting of stockholders;

(C)the Eligible Stockholder’s representation and agreement that the Eligible Stockholder (including each member of any group of stockholders that together is an Eligible Stockholder under this Section 15):

(i)acquired the Required Shares in the ordinary course of business and not with the intent to change or influence control of the Corporation, and does not presently have such intent;

(ii)will provide facts, statements and other information in all communications with the Corporation and stockholders of the Corporation that are or will be true and correct in all material respects and do not and will not omit to state a material fact necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading;

(iii)has not nominated and will not nominate for election to the Board at the annual meeting of stockholders any person other than the Stockholder Nominee(s) being nominated pursuant to this Section 15;

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(iv)has not engaged and will not engage in a, and has not been and will not be a “participant” (as defined in Item 4 of the Exchange Act Schedule 14A) in another person’s, “solicitation” within the meaning of Exchange Act Rule 14a-1(l), in support of the election of any individual as a director at the annual meeting of stockholders other than its Stockholder Nominee or a nominee of the Board; and

(v)will not distribute to any stockholder any form of proxy for the annual meeting of stockholders other than the form distributed by the Corporation.

(D)the Eligible Stockholder’s agreement to:

(i)assume all liability stemming from any legal or regulatory violation arising out of the Eligible Stockholder’s communications with the stockholders of the Corporation or out of the information that the Eligible Stockholder provided to the Corporation;

(ii)indemnify and hold harmless the Corporation and each of its directors, officers and employees individually against any liability, loss or damages in connection with any threatened or pending action, suit or proceeding, whether legal, administrative or investigative, against the Corporation or any of its directors, officers or employees arising out of any nomination submitted by the Eligible Stockholder pursuant to this Section 15; provided, however that the indemnification by the Eligible Stockholder under this Section 15(f)(iii)(D)(ii) shall no longer be required or apply with respect to any acts or omissions by the Stockholder Nominee that occur after such Stockholder Nominee’s election to the Board;

(iii)comply with all other laws, rules, regulations and listing standards applicable to any solicitation in connection with the annual meeting of stockholders;

(iv)file all materials described below in Section 15(h)(iii) of this Article III with the Securities and Exchange Commission, regardless of whether any such filing is required under Exchange Act Regulation 14A, or whether any exemption from filing is available for such materials under Exchange Act Regulation 14A;

(v)provide to the Corporation prior to the annual meeting of stockholders such additional information as necessary or reasonably requested by the Corporation; and

(vi)promptly disclose to the Corporation if the Eligible Stockholder does not intend to continue to Own the Required Shares for at least one year following the annual meeting of stockholders; and

(iv)in the case of a nomination by a group of stockholders that together is an Eligible Stockholder, the designation by all group members of one group member that is authorized to act on behalf of all such members with respect to the nomination and matters related thereto, including, without limitation, any withdrawal of the nomination.

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(g)To be timely under this Section 15, the Stockholder Notice must be delivered to or mailed and received at the principal executive offices of the Corporation (i) with respect to an election to be held at an annual meeting of the stockholders, not less than 120 days nor more than 150 days prior to the first anniversary of the date of the immediately preceding annual meeting of stockholders; provided, however, that in the event that the date of the annual meeting of stockholders is more than 30 days earlier or more than 60 days later than such anniversary date, the Stockholder Notice to be timely must be so delivered or received not earlier than the 150th day prior to such annual meeting of stockholders and not later than the close of business on the later of the 120th day prior to such annual meeting of stockholders or the 10th day following the day on which public announcement of the date of such meeting is first made; provided, further, that for the purpose of calculating the timeliness of the Stockholder Notice for the 2017 annual meeting of stockholders, the date of the immediately preceding annual meeting of stockholders shall be deemed to be April 25, 2016 and (ii) with respect to an election to be held at a special meeting of the stockholders for the election of directors, not earlier than the 90th day prior to such special meeting and not later than the close of business on the later of the 60th day prior to such special meeting or the 10th day following the day on which public announcement is first made of the date of the special meeting and of the nominees to be elected at such meeting. In no event shall any adjournment or postponement of an annual meeting of stockholders, or the announcement thereof, commence a new time period (or extend any time period) for the giving of the Stockholder Notice as described above. For purposes of Rule 14a-18 under the Exchange Act, the applicable “date specified by the registrant’s advance notice provision” shall be the date determined pursuant to this Section 15(g).

(h)An Eligible Stockholder (or in the case of a group, each stockholder whose shares are aggregated for purposes of constituting an Eligible Stockholder) must:

(i)within five business days after the date of the Stockholder Notice provide one or more written statements from the record holder(s) of the Required Shares and from each intermediary through which the Required Shares are or have been held, in each case during the requisite three-year holding period, verifying that the Eligible Stockholder Owns, and has Owned continuously for the preceding three years, the Required Shares;

(ii)include in the written statements provided pursuant to Item 4 of Schedule 14N filed with the Securities and Exchange Commission a statement certifying that it Owns and continuously has Owned the Required Shares for at least three years;

(iii)file with the Securities and Exchange Commission any solicitation or other communication relating to the current year annual meeting of stockholders, one or more of the Corporation’s directors or director nominees or any Stockholder Nominee, regardless of whether any such filing is required under Exchange Act Regulation 14A or whether any exemption from filing is available for such solicitation or other communication under Exchange Act Regulation 14A; and

(iv)as to any group of funds whose shares are aggregated for purposes of constituting an Eligible Stockholder, within five business days after the date of the

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Stockholder Notice, provide documentation reasonably satisfactory to the Corporation that demonstrates that the funds satisfy Section 15(b)(ii) of this Article III.

(i)Within the time period specified in Section 15(iv) of this Article III for delivery of the Stockholder Notice, a Stockholder Nominee must deliver to the Secretary of the Corporation the questionnaire, representation and agreement set forth in Section 16 of this Article III.

(j)Notwithstanding anything to the contrary contained in this Section 15, the Corporation may omit from its proxy materials any Stockholder Nominee, and such nomination shall be disregarded and no vote on such Stockholder Nominee will occur, notwithstanding that proxies in respect of such vote may have been received by the Corporation, if:

(i)the Secretary of the Corporation receives notice that a stockholder intends to nominate a person for election to the Board which stockholder does not elect to have its nominee(s) included in the Corporation’s proxy materials pursuant to this Section 15;

(ii)the Eligible Stockholder or Stockholder Nominee breaches any of its respective agreements, representations or warranties set forth in the Stockholder Notice or otherwise required by this Section 15, or if any of the information in the Stockholder Notice (or otherwise submitted pursuant to this Section 15) was not, when provided, true, correct and complete or the requirements of this Section 15 have otherwise not been met;

(iii)the Stockholder Nominee or the stockholder or group of stockholders (including any member thereof) who has nominated such Stockholder Nominee has engaged in or is currently engaged in, or has been or is a “participant” in another person’s, “solicitation” within the meaning of Rule 14a-1(l) under the Exchange Act, in support of the election of any individual as a director at the meeting other than such Stockholder Nominee or a nominee of the Board;

(iv)the Stockholder Nominee (A) is not independent under the listing standards of the principal U.S. exchange upon which the shares of the Corporation are listed, any applicable rules of the Securities and Exchange Commission and any publicly disclosed standards used by the Board in determining and disclosing the independence of the Corporation’s directors, including, without limitation, as set forth in Section 2(f) of this Article III, (B) does not qualify as independent under the audit committee independence requirements set forth in the rules of the principal U.S. exchange on which shares of the Corporation are listed, as a “non-employee director” under Exchange Act Rule 16b-3 or as an “outside director” for the purposes of Section 162(m) of the Internal Revenue Code (or any successor provision), (C) is or has been, within the three years preceding the date the Corporation first mails to the stockholders its notice of the meeting that includes the Stockholder Nominee, an officer or director of a competitor, as defined in Section 8 of the Clayton Antitrust Act of 1914, as amended, (D) is an officer, director or general partner of any legal entity where a fellow officer, director or general partner of such legal entity is an officer or director of a competitor, as defined in Section 8 of the Clayton Antitrust Act of 1914, as amended, (E) is a named subject of a pending criminal

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proceeding (excluding traffic violations and other minor offenses) or has been convicted in a criminal proceeding within the 10 years preceding the date the Corporation first mails to the stockholders its notice of the meeting that includes the Stockholder Nominee, or (F) is subject to any order of the type specified in Rule 506(d) of Regulation D promulgated under the Securities Act of 1933, as amended; or

(v)the election of the Stockholder Nominee to the Board would cause the Corporation to be in violation of the Certificate, these By-laws or any applicable state or federal law, rule, regulation or listing standard.

Any such determination by the Board (or any other person or body authorized by the Board) shall be binding on the Corporation and its stockholders.

(k)The maximum number of Stockholder Nominees appearing in the Corporation’s proxy materials with respect to an annual meeting of stockholders pursuant to this Section 15 (including, without limitation, any Stockholder Nominee whose name was submitted for inclusion in the Corporation’s proxy materials for such annual meeting of stockholders but who is nominated by the Board as a Board nominee for such annual meeting of stockholders), together with:

(i)any nominees who were previously elected to the Board as (A) Stockholder Nominees pursuant to this Section 15 (including, without limitation, any Stockholder Nominee whose name was submitted for inclusion in the Corporation’s proxy materials for such prior annual meeting of stockholders but who was nominated by the Board as a Board nominee for such prior annual meeting of stockholders) or (B) a nominee of any stockholder in any other manner, in either case at any of the preceding two annual meetings of stockholders and who are re-nominated for election at such annual meeting of stockholders by the Board, and

(ii)any Stockholder Nominee who was qualified for inclusion in the Corporation’s proxy materials for such annual meeting of stockholders but whose nomination is subsequently withdrawn,

shall not exceed the greater of (x) two or (y) 20% of the number of directors in office as of the last day on which a Stockholder Notice may be delivered pursuant to this Section 15 with respect to such annual meeting of stockholders, or if such amount as calculated in clause (y) of this Section 15(k) is not a whole number, the closest whole number below 20%; provided that if there is a vacancy on the Board and the number of directors is decreased prior to such annual meeting of stockholders, then the 20% of the number of directors shall be calculated based on the number of directors in office as of the date of such decrease in the number of directors. In the event that the number of Stockholder Nominees submitted by Eligible Stockholders pursuant to this Section 15 exceeds this maximum number, each Eligible Stockholder will select one Stockholder Nominee for inclusion in the Corporation’s proxy materials until the maximum number is reached, going in order of the number (largest to smallest) of shares of the Corporation each Eligible Stockholder disclosed as Owned in its respective Stockholder Notice submitted to the Corporation. If the maximum number is not reached after each Eligible Stockholder has selected

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one Stockholder Nominee, this selection process will continue as many times as necessary, following the same order each time, until the maximum number is reached.

(l)Any Stockholder Nominee who is included in the Corporation’s proxy materials for a particular annual meeting of stockholders but either (i) withdraws from or becomes ineligible or unavailable for election at the annual meeting of stockholders, or (ii) does not receive at least 25% of the votes cast in favor of the Stockholder Nominee’s election, will be ineligible to be a Stockholder Nominee pursuant to this Section 15 for the next two annual meetings of stockholders.

SECTION 16.Submission of Questionnaire, Representation and Agreement. (a)At the request of the Corporation, the Stockholder Nominee must promptly, but in any event within five business days of such request, complete and deliver any questionnaires required of the Corporation’s directors and a written representation and agreement (the questionnaire, representation and agreement to be in the form provided by the Secretary upon written request) that such person:

(i)is not and will not become a party to:

(A)any agreement, arrangement or understanding with, and has not given any commitment or assurance to, any person or entity as to how the person, if elected as a director of the Corporation, will act or vote on any issue or question (a “Voting Commitment”) that has not been disclosed to the Corporation; or

(B)any Voting Commitment that could limit or interfere with the person’s ability to comply, if elected as a director of the Corporation, with the person’s fiduciary duties under applicable law;

(ii) is not and will not become a party to any compensatory, payment, indemnification or other financial agreement, arrangement or understanding with any person or entity other than the Corporation in connection with candidacy or service as a director of the Corporation that has not been disclosed to the Corporation; and

(iii)in the person’s individual capacity and on behalf of any person or entity on whose behalf the nomination is being made, would be in compliance, if elected as a director of the Corporation, and will comply with all applicable publicly disclosed corporate governance, conflict of interest, confidentiality and stock ownership and trading policies and guidelines of the Corporation, and any other Corporation policies and guidelines applicable to Corporation directors.

(b)The Corporation may request such additional information as necessary to permit the Board to determine if each Stockholder Nominee is independent under the listing standards of the principal U.S. exchange upon which the shares of the Corporation are listed, any applicable rules of the Securities and Exchange Commission and any publicly disclosed standards used by the Board in determining and disclosing the independence of the Corporation’s directors.

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ARTICLE IV

Committees of the Board of Directors

SECTION 1.Committees of the Board. The Board shall designate such committees as may be required by the listing standards of the principal United States exchange upon which the shares of the Corporation are listed and may from time to time designate other committees of the Board (including, without limitation, an executive committee), with such lawfully delegable powers and duties as it thereby confers, to serve at the pleasure of the Board and shall, for those committees and any others provided for herein, elect a director or directors to serve as the member or members, designating, if it desires, other directors as alternate members who may replace any absent or disqualified member at any meeting of the committee.

SECTION 2.Conduct of Business. Any committee, to the extent allowed by law and provided in the resolution establishing such committee or the charter of such committee, shall have and may exercise all the duly delegated powers and authority of the Board in the management of the business and affairs of the Corporation. The Board shall have the power to prescribe the manner in which proceedings of any such committee shall be conducted. In the absence of any such prescription, any such committee shall have the power to prescribe the manner in which its proceedings shall be conducted. Unless the Board or such committee shall otherwise provide, regular and special meetings and other actions of any such committee shall be governed by the provisions of Article III applicable to meetings and actions of the Board. Each committee shall keep regular minutes and report on its actions to the Board.

ARTICLE V

Officers

SECTION 1.Number; Term of Office. The officers of the Corporation shall be elected by the Board and may consist of: a Chief Executive Officer, a President, a Chief Operating Officer, a Chief Financial Officer and one or more Vice Presidents (including, without limitation, Senior Vice Presidents) and a Treasurer, Secretary and Controller and such other officers and agents with such titles and such duties as the Board may from time to time determine, each to have such authority, functions or duties as in these By-laws provided or as the Board may from time to time determine, and each to hold office for such term as may be prescribed by the Board and until such person’s successor shall have been chosen and shall qualify, or until such person’s death or resignation, or until such person’s removal in the manner hereinafter provided. One person may hold the offices and perform the duties of any two or more of said officers; provided, however, that no officer shall execute, acknowledge or verify any instrument in more than one capacity if such instrument is required by law, the Certificate or these By-laws to be executed, acknowledged or verified by two or more officers. The Board may require any officer or agent to give security for the faithful performance of such person’s duties.

SECTION 2.Removal. Subject to Section 13 of this Article V, any officer may be removed, either with or without cause, by the Board at any meeting thereof called for the

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purpose, by the Chief Executive Officer, or by any other superior officer upon whom such power may be conferred by the Board.

SECTION 3.Resignation. Any officer may resign at any time by giving notice to the Board, the Chief Executive Officer or the Secretary. Any such resignation shall take effect at the date of receipt of such notice or at any later date specified therein; and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective.

SECTION 4.Chief Executive Officer. The Chief Executive Officer shall have general supervision and direction of the business and affairs of the Corporation, subject to the control of the Board, and shall report directly to the Board.

SECTION 5.President. The President shall perform such senior duties as he or she may agree with the Chief Executive Officer (if the position is held by an individual other than the Chief Executive Officer) or as the Board shall from time to time determine.

SECTION 6.Chief Operating Officer. The Chief Operating Officer shall perform such senior duties in connection with the operations of the Corporation as he or she may agree with the Chief Executive Officer or as the Board shall from time to time determine. The Chief Operating Officer shall, when requested, counsel with and advise the other officers of the Corporation.

SECTION 7.Chief Financial Officer. The Chief Financial Officer shall perform all the powers and duties of the office of the chief financial officer and in general have overall supervision of the financial operations of the Corporation. The Chief Financial Officer shall, when requested, counsel with and advise the other officers of the Corporation and shall perform such other duties as he or she may agree with the Chief Executive Officer or as the Board may from time to time determine.

SECTION 8.Vice Presidents. Any Vice President shall have such powers and duties as shall be prescribed by his or her superior officer or the Board. A Vice President shall, when requested, counsel with and advise the other officers of the Corporation and shall perform such other duties as he or she may agree with the Chief Executive Officer or as the Board may from time to time determine. A Vice President need not be an officer of the Corporation and shall not be deemed an officer of the Corporation unless elected by the Board.

SECTION 9.Treasurer. The Treasurer shall supervise and be responsible for all the funds and securities of the Corporation; the deposit of all moneys and other valuables to the credit of the Corporation in depositories of the Corporation; borrowings and compliance with the provisions of all indentures, agreements and instruments governing such borrowings to which the Corporation is a party; the disbursement of funds of the Corporation and the investment of its funds; and in general shall perform all of the duties incident to the office of the Treasurer. The Treasurer shall, when requested, counsel with and advise the other officers of the Corporation and shall perform such other duties as he or she may agree with the Chief Executive Officer or the Chief Financial Officer or as the Board may from time to time determine.

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SECTION 10.Controller. The Controller shall be the chief accounting officer of the Corporation. The Controller shall, when requested, counsel with and advise the other officers of the Corporation and shall perform such other duties as he or she may agree with the Chief Executive Officer or the Chief Financial Officer or as the Board may from time to time determine.

SECTION 11.Secretary. It shall be the duty of the Secretary to act as secretary at all meetings of the Board, of the committees of the Board and of the stockholders and to record the proceedings of such meetings in a book or books to be kept for that purpose; the Secretary shall see that all notices required to be given by the Corporation are duly given and served; the Secretary shall be custodian of the seal of the Corporation and when deemed necessary shall affix the seal or cause it to be affixed to all certificates of stock, if any, of the Corporation (unless the seal of the Corporation on such certificates shall be a facsimile, as hereinafter provided) and to all documents, the execution of which on behalf of the Corporation under its seal is duly authorized in accordance with the provisions of these By-laws; the Secretary shall have charge of the books, records and papers of the Corporation and shall see that the reports, statements and other documents required by law to be kept and filed are properly kept and filed; and in general shall perform all of the duties incident to the office of Secretary. The Secretary shall, when requested, counsel with and advise the other officers of the Corporation and shall perform such other duties as he or she may agree with the Chief Executive Officer or as the Board may from time to time determine.

SECTION 12.Assistant Treasurers, Assistant Controllers and Assistant Secretaries. Any Assistant Treasurers, Assistant Controllers and Assistant Secretaries shall perform such duties as shall be assigned to them by the Board or by the Treasurer, Controller or Secretary, respectively, or by the Chief Executive Officer. An Assistant Treasurer, Assistant Controller or Assistant Secretary need not be an officer of the Corporation and shall not be deemed an officer of the Corporation unless elected by the Board.

SECTION 13.Additional Matters. The Chief Executive Officer, the President, the Chief Operating Officer and the Chief Financial Officer of the Corporation shall have the authority to designate employees of the Corporation to have the title of Vice President, Assistant Vice President, Assistant Treasurer, Assistant Controller or Assistant Secretary. Any employee so designated shall have the powers and duties determined by the officer making such designation. The persons upon whom such titles are conferred shall not be deemed officers of the Corporation unless elected by the Board or appointed by any duly elected officer or assistant officer authorized by the Board of Directors to appoint such person.

ARTICLE VI

Indemnification

SECTION 1.Right to Indemnification. The Corporation, to the fullest extent permitted or required by the General Corporation Law of the State of Delaware (the “DGCL”) or other applicable law, as the same exists or may hereafter be amended (but, in the case of any such amendment and unless applicable law otherwise requires, only to the extent that such amendment permits the Corporation to provide broader indemnification rights than such law

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permitted the Corporation to provide prior to such amendment), shall indemnify and hold harmless any person who is or was a director, officer or employee of the Corporation and who is or was involved in any manner (including, without limitation, as a party or a witness) or is threatened to be made so involved in any threatened, pending or completed investigation, claim, action, suit or proceeding, whether civil, criminal, administrative or investigative (including, without limitation, any action, suit or proceedings by or in the right of the Corporation to procure a judgment in its favor) (a “Proceeding”) by reason of the fact that such person, or another person of whom such person is the legal representative, is or was a director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise (including, without limitation, any employee benefit plan) (a “Covered Entity”), whether the basis of such Proceeding is alleged action in an official capacity as a director, officer, employee or agent or in any other capacity while serving as a director, officer, employee or agent, against all expenses, liabilities and losses (including, without limitation, attorneys’ fees, judgments, fines, ERISA excise taxes or penalties and amounts paid in settlement) actually and reasonably incurred by such person in connection with such Proceeding and such indemnification shall continue as to a person who has ceased to be a director, officer, employee or agent of the Corporation or a Covered Entity; provided, however, that, except as provided in Section 4(d) of this Article VI with respect to an adjudication of entitlement to indemnification, the Corporation shall indemnify and hold harmless any such Indemnitee in connection with a Proceeding initiated by such Indemnitee (as defined below) only if such Proceeding was authorized by the Board. Any person entitled to indemnification as provided in this Section 1 is hereinafter called an “Indemnitee”. Any right of an Indemnitee to indemnification shall be a contract right and shall include the right to receive, prior to the conclusion of any Proceeding, payment of any expenses incurred by the Indemnitee in connection with such Proceeding, consistent with the provisions of the DGCL or other applicable law, as the same exists or may hereafter be amended (but, in the case of any such amendment and unless applicable law otherwise requires, only to the extent that such amendment permits the Corporation to provide broader rights to payment of expenses than such law permitted the Corporation to provide prior to such amendment), and the other provisions of this Article VI; provided that payment of expenses incurred by a person other than a director or officer of the Corporation prior to the conclusion of any Proceeding shall be made, unless otherwise determined by the Board, only upon delivery to the Corporation of an undertaking by or on behalf of such person to the same effect as any undertaking required to be delivered to the Corporation by any director or officer of the Corporation pursuant to the DGCL or other applicable law.

SECTION 2.Insurance, Contracts and Funding. The Corporation may purchase and maintain insurance to protect itself and any director, officer, employee or agent of the Corporation or of any Covered Entity against any expenses, liabilities or losses as specified in Section 1 of this Article VI or incurred by any such director, officer, employee or agent in connection with any Proceeding referred to in Section 1 of this Article VI, whether or not the Corporation would have the power to indemnify such person against such expense, liability or loss under the DGCL. The Corporation may enter into contracts with any director, officer, employee or agent of the Corporation or of any Covered Entity in furtherance of the provisions of this Article VI and may create a trust fund, grant a security interest or use other means (including, without limitation, a letter of credit) to ensure the payment of such amounts as may be necessary to effect indemnification as provided or authorized in this Article VI.

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SECTION 3.Indemnification Not Exclusive Right. The right of indemnification provided in this Article VI shall not be exclusive of any other rights to which an Indemnitee may otherwise be entitled, and the provisions of this Article VI shall inure to the benefit of the heirs and legal representatives of any Indemnitee under this Article VI and shall be applicable to Proceedings commenced or continuing after the adoption of this Article VI, whether arising from acts or omissions occurring before or after such adoption.

SECTION 4.Advancement of Expenses; Procedures; Presumptions and Effect of Certain Proceedings; Remedies. In furtherance, but not in limitation, of the foregoing provisions, the following procedures, presumptions and remedies shall apply with respect to advancement of expenses and the right to indemnification under this Article VI:

(a)Advancement of Expenses. All reasonable expenses (including, without limitation, attorneys’ fees) incurred by or on behalf of the Indemnitee in connection with any Proceeding shall be advanced to the Indemnitee by the Corporation within 20 days after the receipt by the Corporation of a statement or statements from the Indemnitee requesting such advance or advances from time to time, whether prior to or after final disposition of such Proceeding. Such statement or statements shall reasonably evidence the expenses incurred by the Indemnitee and, if required by law or the provisions of this Article VI at the time of such advance, shall include or be accompanied by an undertaking by or on behalf of the Indemnitee to repay the amounts advanced if ultimately it should be determined that the Indemnitee is not entitled to be indemnified against such expenses pursuant to this Article VI.

(b)Procedure for Determination of Entitlement to Indemnification. (i) To obtain indemnification under this Article VI, an Indemnitee shall submit to the Secretary a written request including such documentation and information as is reasonably available to the Indemnitee and reasonably necessary to determine whether and to what extent the Indemnitee is entitled to indemnification (the “Supporting Documentation”). The determination of the Indemnitee’s entitlement to indemnification shall be made not later than 60 days after receipt by the Corporation of the written request for indemnification together with the Supporting Documentation. The Secretary shall, promptly upon receipt of such a request for indemnification, advise the Board in writing that the Indemnitee has requested indemnification.

(ii)The Indemnitee’s entitlement to indemnification under this Article VI shall be determined in one of the following ways: (A) by a majority vote of the Disinterested Directors (as hereinafter defined in Section 4(e) of this Article VI), whether or not they constitute a quorum of the Board, or by a committee of Disinterested Directors designated by a majority vote of the Disinterested Directors; (B) by a written opinion of Independent Counsel (as hereinafter defined in Section 4(e) of this Article VI) if there are no Disinterested Directors or a majority of such Disinterested Directors so directs; (C) by the stockholders of the Corporation; or (D) as provided in Section 4(c) of this Article VI.

(iii)In the event the determination of entitlement to indemnification is to be made by Independent Counsel pursuant to Section 4(b)(ii) of this Article VI, a majority of

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the Disinterested Directors shall select the Independent Counsel, but only an Independent Counsel to which the Indemnitee does not reasonably object.

(c)Presumptions and Effect of Certain Proceedings. If the person or persons empowered under Section 4(b) of this Article VI to determine entitlement to indemnification shall not have been appointed or shall not have made a determination within 60 days after receipt by the Corporation of the request therefor, together with the Supporting Documentation, the Indemnitee shall be deemed to be, and shall be, entitled to indemnification unless (A) the Indemnitee misrepresented or failed to disclose a material fact in making the request for indemnification or in the Supporting Documentation or (B) such indemnification is prohibited by law. The termination of any Proceeding described in Section 1 of this Article VI, or of any claim, issue or matter therein, by judgment, order, settlement or conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, adversely affect the right of the Indemnitee to indemnification or create a presumption that the Indemnitee did not act in good faith and in a manner which the Indemnitee reasonably believed to be in or not opposed to the best interests of the Corporation or, with respect to any criminal proceeding, that the Indemnitee had reasonable cause to believe that such conduct was unlawful.

(d)Remedies of Indemnitee. (i) In the event that a determination is made pursuant to Section 4(b) of this Article VI that the Indemnitee is not entitled to indemnification under this Article VI, (A) the Indemnitee shall be entitled to seek an adjudication of entitlement to such indemnification either, at the Indemnitee’s sole option, in (x) an appropriate court of the State of Delaware or any other court of competent jurisdiction or (y) an arbitration to be conducted by a single arbitrator pursuant to the rules of the American Arbitration Association and (B) any such judicial proceeding or arbitration shall be de novo and the Indemnitee shall not be prejudiced by reason of such adverse determination.

(ii)If a determination shall have been made or deemed to have been made, pursuant to Section 4(b) or (c) of this Article VI, that the Indemnitee is entitled to indemnification, the Corporation shall be obligated to pay the amounts constituting such indemnification within 45 days after such determination has been made or deemed to have been made and shall be conclusively bound by such determination unless (A) the Indemnitee misrepresented or failed to disclose a material fact in making the request for indemnification or in the Supporting Documentation or (B) such indemnification is prohibited by law. In the event that (X) advancement of expenses is not timely made pursuant to Section 4(a) of this Article VI or (Y) payment of indemnification is not made within 45 days after a determination of entitlement to indemnification has been made or deemed to have been made pursuant to Section 4(b) or (c) of this Article VI, the Indemnitee shall be entitled to seek judicial enforcement of the Corporation’s obligation to pay to the Indemnitee such advancement of expenses or indemnification. Notwithstanding the foregoing, the Corporation may bring an action, in an appropriate court in the State of Delaware or any other court of competent jurisdiction, contesting the right of the Indemnitee to receive indemnification hereunder due to the occurrence of an event described in sub-clause (A) or (B) of this clause (ii) (a “Disqualifying Event”); provided, however, that in any such action the Corporation shall have the burden of proving the occurrence of such Disqualifying Event.

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(iii)The Corporation shall be precluded from asserting in any judicial proceeding or arbitration commenced pursuant to this Section 4(d) that the procedures and presumptions of this Article VI are not valid, binding and enforceable and shall stipulate in any such court or before any such arbitrator that the Corporation is bound by all the provisions of this Article VI.

(iv)In the event that the Indemnitee, pursuant to this Section 4(d), seeks a judicial adjudication of or an award in arbitration to enforce rights under, or to recover damages for breach of, this Article VI, or in the event of a suit brought by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking, the Indemnitee shall be entitled to recover from the Corporation, and shall be indemnified by the Corporation against, any expenses actually and reasonably incurred by the Indemnitee if the Indemnitee prevails in such judicial adjudication, arbitration or suit. If it shall be determined in such judicial adjudication, arbitration or suit that the Indemnitee is entitled to receive part but not all of the indemnification or advancement of expenses sought, the expenses incurred by the Indemnitee in connection with such judicial adjudication , arbitration or action shall be prorated accordingly.

(e)Definitions. For purposes of this Article VI:

(i)“Disinterested Director” means a director of the Corporation who is not or was not a party to the Proceeding in respect of which indemnification is sought by the Indemnitee.

(ii)“Independent Counsel” means a law firm or a member of a law firm that neither presently is, nor in the past five years has been, retained to represent: (x) the Corporation or the Indemnitee in any matter material to either such party or (y) any other party to the Proceeding giving rise to a claim for indemnification under this Article VI. Notwithstanding the foregoing, the term “Independent Counsel” shall not include any person who, under the applicable standards of professional conduct then prevailing under the law of the State of Delaware, would have a conflict of interest in representing either the Corporation or the Indemnitee in an action to determine the Indemnitee’s rights under this Article VI.

SECTION 5.Severability. If any provision or provisions of this Article VI shall be held to be invalid, illegal or unenforceable for any reason whatsoever: (a) the validity, legality and enforceability of the remaining provisions of this Article VI (including, without limitation, all portions of any paragraph of this Article VI containing any such provision held to be invalid, illegal or unenforceable, that are not themselves invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby; and (b) to the fullest extent possible, the provisions of this Article VI (including, without limitation, all portions of any paragraph of this Article VI containing any such provision held to be invalid, illegal or unenforceable, that are not themselves invalid, illegal or enforceable) shall be construed so as to give effect to the intent manifested by the provision held invalid, illegal or unenforceable.

SECTION 6.Indemnification of Agents. Notwithstanding any other provision or provisions of this Article VI, the Corporation, to the fullest extent of the provisions of this

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Article VI with respect to the indemnification of directors, officers and employees of the Corporation or any Covered Entity, may indemnify any person other than a director, officer or employee of the Corporation or any Covered Entity, who is or was an agent of the Corporation or a Covered Entity and who is or was involved in any manner (including, without limitation, as a party or a witness) or is threatened to be made so involved in any threatened, pending or completed Proceeding by reason of the fact that such person, or another person of whom such person is the legal representative, is or was a director, officer, employee or agent of the Corporation or of a Covered Entity, whether the basis of such Proceeding is alleged action in an official capacity as a director, officer, employee or agent or in any other capacity while serving as a director, officer, employee or agent, against all expenses, liabilities and losses (including, without limitation, attorneys’ fees, judgments, fines, ERISA excise taxes or penalties and amounts paid in settlement) actually and reasonably incurred by such person in connection with such Proceeding. The Corporation may also advance expenses incurred by such employee or agent in connection with any such Proceeding, consistent with the provisions of this Article VI with respect to the advancement of expenses of directors, officers and employees of the Corporation.

ARTICLE VII

Capital Stock

SECTION 1.Certificates for Shares and Uncertificated Shares. (a) The shares of stock of the Corporation shall be uncertificated shares that may be evidenced by a book-entry system maintained by the registrar of such stock, or shall be represented by certificates, or a combination of both. To the extent that shares are represented by certificates, such certificates whenever authorized by the Board shall be in such form as shall be approved by the Board. The certificates representing shares of stock of each class shall be signed by, or in the name of, the Corporation by the Chairman of the Board, the Chief Executive Officer, the President, the Chief Financial Officer, the Chief Operating Officer or by any Vice President, and by the Secretary or any Assistant Secretary or the Treasurer or any Assistant Treasurer of the Corporation, and sealed with the seal of the Corporation, which may be a facsimile thereof. Any or all such signatures may be facsimiles if countersigned by a transfer agent or registrar. Although any officer, transfer agent or registrar whose manual or facsimile signature is affixed to such a certificate ceases to be such officer, transfer agent or registrar before such certificate has been issued, it may nevertheless be issued by the Corporation with the same effect as if such officer, transfer agent or registrar were still such at the date of its issue.

(b)The stock ledger and blank share certificates, if any, shall be kept by the Secretary or by a transfer agent or by a registrar or by any other officer or agent designated by the Board.

SECTION 2.Transfer of Shares. Transfers of shares of stock of each class of the Corporation shall be made only on the books of the Corporation upon authorization by the registered holder thereof, or by such holder’s attorney thereunto authorized by a power of attorney duly executed and filed with the Secretary or a transfer agent for such stock, if any, and if such shares are represented by a certificate, upon surrender of the certificate or certificates for such shares properly endorsed or accompanied by a duly executed stock transfer power (or by

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proper evidence of succession, assignment or authority to transfer) and the payment of any taxes thereon; provided, however, that the Corporation shall be entitled to recognize and enforce any lawful restriction on transfer. The person in whose name shares are registered on the books of the Corporation shall be deemed the owner thereof for all purposes as regards the Corporation; provided, however, that whenever any transfer of shares shall be made for collateral security and not absolutely, and written notice thereof shall be given to the Secretary or to such transfer agent, such fact shall be stated in the entry of the transfer. No transfer of shares shall be valid as against the Corporation, its stockholders and creditors for any purpose, except to render the transferee liable for the debts of the Corporation to the extent provided by law, until it shall have been entered in the stock records of the Corporation by an entry showing from and to whom transferred.

SECTION 3.Registered Stockholders and Addresses of Stockholders. (a) The Corporation shall be entitled to recognize the exclusive right of a person registered on its records as the owner of shares of stock to receive dividends and to vote as such owner, shall be entitled to hold liable for calls and assessments a person registered on its records as the owner of shares of stock, and shall not be bound to recognize any equitable or other claim to or interest in such share or shares of stock on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise provided by the laws of Delaware.

(b)Each stockholder shall designate to the Secretary or transfer agent of the Corporation an address at which notices of meetings and all other corporate notices may be given to such person, and, if any stockholder shall fail to designate such address, corporate notices may be given to such person by mail directed to such person at such person’s post office address, if any, as the same appears on the stock record books of the Corporation or at such person’s last known post office address.

SECTION 4.Lost, Destroyed and Mutilated Certificates. The holder of any certificate representing any shares of stock of the Corporation shall immediately notify the Corporation of any loss, theft, destruction or mutilation of such certificate; the Corporation may issue to such holder a new certificate or certificates for shares, upon the surrender of the mutilated certificate or, in the case of loss, theft or destruction of the certificate, upon satisfactory proof of such loss, theft or destruction; the Board, or a committee designated thereby, or the transfer agents and registrars for the stock, may, in their discretion, require the owner of the lost, stolen or destroyed certificate, or such person’s legal representative, to give the Corporation a bond in such sum and with such surety or sureties as they may direct to indemnify the Corporation and said transfer agents and registrars against any claim that may be made on account of the alleged loss, theft or destruction of any such certificate or the issuance of such new certificate.

SECTION 5.Regulations. The Board may make such additional rules and regulations as it may deem expedient concerning the issue, transfer and registration of certificated or uncertificated shares of stock of each class and series of the Corporation and may make such rules and take such action as it may deem expedient concerning the issue of certificates in lieu of certificates claimed to have been lost, destroyed, stolen or mutilated.

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SECTION 6.Fixing Date for Determination of Stockholders of Record. In order that the Corporation may determine the stockholders entitled to notice of or to vote at any meeting of the stockholders or any adjournment thereof, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the Board may fix, in advance, a record date, which shall not be more than 60 days nor less than 10 days before the date of such meeting, nor more than 60 days prior to any other action. A determination of stockholders entitled to notice of or to vote at a meeting of the stockholders shall apply to any adjournment of the meeting; provided, however, that the Board may fix a new record date for the adjourned meeting.

SECTION 7.Transfer Agents and Registrars. The Board may appoint, or authorize any officer or officers to appoint, one or more transfer agents and one or more registrars.

ARTICLE VIII

Seal

The Board shall approve a suitable corporate seal, which shall be in the form of a circle and shall bear the full name of the Corporation and shall be in the charge of the Secretary. The seal may be used by causing it or a facsimile thereof to be impressed or affixed or in any other manner reproduced.

ARTICLE IX

Fiscal Year

The fiscal year of the Corporation shall end on the 31st day of December in each year.

ARTICLE X

Waiver of Notice

Whenever any notice whatsoever is required to be given by these By-laws, by the Certificate or by law, the person entitled thereto may, either before or after the meeting or other matter in respect of which such notice is to be given, waive such notice in writing or as otherwise permitted by law, which shall be filed with or entered upon the records of the meeting or the records kept with respect to such other matter, as the case may be, and in such event such notice need not be given to such person and such waiver shall be deemed equivalent to such notice.

ARTICLE XI

Amendments

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These By-laws may be altered, amended or repealed, in whole or in part, or new By-laws may be adopted by the stockholders or by the Board at any meeting thereof; provided, however, that notice of such alteration, amendment, repeal or adoption of new By-laws is contained in the notice of such meeting of the stockholders or in the notice of such meeting of the Board and, in the latter case, such notice is given not less than 24 hours prior to the meeting. Until the election of the directors at the 2020 annual meeting of stockholders, unless a higher percentage is required by the Certificate, all such amendments must be approved by either the holders of 66 2/3% of the combined voting power of the outstanding shares of all classes and series of capital stock of the Corporation entitled generally to vote in the election of directors of the Corporation, voting as a single class, or by a majority of the Board. Commencing with the 2020 annual meeting of stockholders, unless a higher percentage is required by the Certificate, all such amendments must be approved by either the holders of at least a majority of the combined voting power of the outstanding shares of all classes and series of capital stock of the Corporation entitled generally to vote in the election of directors of the Corporation, voting as a single class, or by a majority of the Board.

ARTICLE XII

Miscellaneous

SECTION 1.Execution of Documents. The Board or any committee thereof shall designate the officers, employees and agents of the Corporation who shall have power to execute and deliver deeds, contracts, mortgages, bonds, debentures, notes, checks, drafts and other orders for the payment of money and other documents for and in the name of the Corporation and may authorize (including, without limitation, authority to redelegate) by written instrument to other officers, employees or agents of the Corporation. Such delegation may be by resolution or otherwise and the authority granted shall be general or confined to specific matters, all as the Board or any such committee may determine. In the absence of such designation referred to in the first sentence of this Section, the officers of the Corporation shall have such power so referred to, to the extent incident to the normal performance of their duties.

SECTION 2.Deposits. All funds of the Corporation not otherwise employed shall be deposited from time to time to the credit of the Corporation or otherwise as the Board or any committee thereof or any officer of the Corporation to whom power in respect of financial operations shall have been delegated by the Board or any such committee or in these By-laws shall select.

SECTION 3.Checks. All checks, drafts and other orders for the payment of money out of the funds of the Corporation, and all notes or other evidences of indebtedness of the Corporation, shall be signed on behalf of the Corporation in such manner as shall from time to time be determined by resolution of the Board or of any committee thereof or by any officer of the Corporation to whom power in respect of financial operations shall have been delegated by the Board or any such committee thereof or as set forth in these By-laws.

SECTION 4.Proxies in Respect of Stock or Other Securities of Other Corporations. The Board or any committee thereof shall designate the officers of the Corporation who shall have authority from time to time to appoint an agent or agents of the

28

Corporation to exercise in the name and on behalf of the Corporation the powers and rights which the Corporation may have as the holder of stock or other securities in any other corporation or other entity, and to vote or consent in respect of such stock or securities; such designated officers may instruct the person or persons so appointed as to the manner of exercising such powers and rights; and such designated officers may execute or cause to be executed in the name and on behalf of the Corporation and under its corporate seal, or otherwise, such written proxies, powers of attorney or other instruments as they may deem necessary or proper in order that the Corporation may exercise its said powers and rights.

SECTION 5.Subject to Law and Certificate of Incorporation. All powers, duties and responsibilities provided for in these By-laws, whether or not explicitly so qualified, are qualified by the provisions of the Certificate and applicable laws.

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EX-31.1

Exhibit 31.1

CERTIFICATIONS

I, Erin N. Kane, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of AdvanSix Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 1, 2019

/s/ Erin N. Kane

Erin N. Kane

President and Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATIONS

I, Michael Preston, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of AdvanSix Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 1, 2019

/s/ Michael Preston

Michael Preston

Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of AdvanSix Inc. (the “Company”) on Form 10-Q for the quarter ended June 30, 2019, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

1. the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

2. the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:  August 1, 2019

/s/ Erin N. Kane

Erin N. Kane

President and Chief Executive Officer

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of AdvanSix Inc. (the “Company”) on Form 10-Q for the quarter ended June 30, 2019, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

1. the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

2. the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: August 1, 2019

/s/ Michael Preston

Michael Preston

Chief Financial Officer

XML

Document And Entity Information - shares	6 Months Ended
	Jun. 30, 2019	Jul. 26, 2019
Document and Entity Information [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Jun. 30, 2019
Document Transition Report	false
Entity File Number	1-37774
Entity Registrant Name	AdvanSix Inc.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	81-2525089
Entity Address, Address Line One	300 Kimball Drive
Entity Address, Address Line Two	Suite 101
Entity Address, City or Town	Parsippany
Entity Address, State or Province	NJ
Entity Address, Postal Zip Code	07054
City Area Code	973
Local Phone Number	526-1800
Title of 12(b) Security	Common Stock, par value $0.01 per share
Trading Symbol	ASIX
Security Exchange Name	NYSE
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		27,815,783
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q2
Entity Central Index Key	0001673985
Amendment Flag	false

XML

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Income Statement [Abstract]
Sales	$ 345,215	$ 400,459	$ 660,110	$ 759,697
Costs, expenses and other:
Costs of goods sold	303,128	342,958	570,008	664,278
Selling, general and administrative expenses	20,009	17,919	39,422	37,132
Other non-operating expense (income), net	1,452	1,582	3,056	5,128
Total costs, expenses and other	324,589	362,459	612,486	706,538
Income before taxes	20,626	38,000	47,624	53,159
Income tax expense	5,280	9,590	12,104	13,156
Net income	$ 15,346	$ 28,410	$ 35,520	$ 40,003
Earnings per common share
Basic (in dollars per share)	$ 0.54	$ 0.93	$ 1.25	$ 1.31
Diluted (in dollars per share)	$ 0.53	$ 0.91	$ 1.21	$ 1.28
Weighted average common shares outstanding
Basic (in shares)	28,162,007	30,481,627	28,489,486	30,485,095
Diluted (in shares)	29,136,979	31,305,168	29,460,149	31,294,323

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CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Statement of Comprehensive Income [Abstract]
Net income	$ 15,346	$ 28,410	$ 35,520	$ 40,003
Foreign exchange translation adjustment	4	(17)	3	(18)
Cash-flow hedges	(429)	0	(621)	0
Pension obligation adjustments	0	0	0	410
Other comprehensive income (loss), net of tax	(425)	(17)	(618)	392
Comprehensive income	$ 14,921	$ 28,393	$ 34,902	$ 40,395

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CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Current assets:
Cash and cash equivalents	$ 17,057	$ 9,808
Accounts and other receivables – net	127,526	160,266
Inventories – net	138,234	137,182
Other current assets	10,496	3,807
Total current assets	293,313	311,063
Property, plant and equipment – net	701,120	672,210
Operating lease right-of-use assets	115,284	0
Goodwill	15,005	15,005
Other assets	38,164	36,348
Total assets	1,162,886	1,034,626
Current liabilities:
Accounts payable	192,614	231,720
Accrued liabilities	31,907	30,448
Operating lease liabilities – short-term	26,022	0
Deferred income and customer advances	3,184	22,556
Total current liabilities	253,727	284,724
Deferred income taxes	113,685	103,783
Operating lease liabilities – long-term	89,503	0
Line of credit – long-term	255,000	200,000
Postretirement benefit obligations	24,381	21,080
Other liabilities	6,027	4,701
Total liabilities	742,323	614,288
COMMITMENTS AND CONTINGENCIES (Note 9)
STOCKHOLDERS' EQUITY
Common stock, par value $0.01; 200,000,000 shares authorized; 30,591,472 shares issued and 28,008,959 outstanding at June 30, 2019; 30,555,715 shares issued and 29,345,001 outstanding at December 31, 2018	306	306
Preferred stock, par value $0.01; 50,000,000 shares authorized and 0 shares issued and outstanding at June 30, 2019 and December 31, 2018	0	0
Treasury stock at par (2,582,513 shares at June 30, 2019; 1,210,714 shares at December 31, 2018)	(26)	(12)
Additional paid-in capital	200,036	234,699
Retained earnings	223,339	187,819
Accumulated other comprehensive loss	(3,092)	(2,474)
Total stockholders' equity	420,563	420,338
Total liabilities and stockholders' equity	$ 1,162,886	$ 1,034,626

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CONDENSED CONSOLIDATED BALANCE SHEETS (Parentheticals) - $ / shares	Jun. 30, 2019	Dec. 31, 2018
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)	30,591,472	30,555,715
Common stock, shares outstanding (in shares)	28,008,959	29,345,001
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)	2,582,513	1,210,714

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018
Cash flows from operating activities:
Net income	$ 35,520	$ 40,003
Adjustments to reconcile net income to net cash (used for) provided by operating activities:
Depreciation and amortization	27,872	25,913
Loss on disposal of assets	1,901	1,336
Deferred income taxes	10,109	6,845
Stock based compensation	5,574	4,880
Accretion of deferred financing fees	214	1,589
Restructuring charges	12,623	0
Changes in assets and liabilities:
Accounts and other receivables	32,743	43,913
Inventories	(2,494)	7,079
Accounts payable	(30,586)	(30,185)
Accrued liabilities	(1,771)	(6,805)
Deferred income and customer advances	(19,372)	(14,769)
Other assets and liabilities	(4,970)	(2,578)
Net cash provided by operating activities	67,363	77,221
Cash flows from investing activities:
Expenditures for property, plant and equipment	(71,201)	(53,423)
Other investing activities	(1,285)	(1,254)
Net cash used for investing activities	(72,486)	(54,677)
Cash flows from financing activities:
Payments of long-term debt	0	(266,625)
Borrowings from line of credit	210,250	261,000
Payments of line of credit	(155,250)	(51,000)
Payment of line of credit facility fees	0	(1,362)
Principal payments of finance leases	(2,377)	(162)
Purchase of treasury stock	(40,267)	(3,113)
Issuance of common stock	16	0
Net cash provided by (used for) financing activities	12,372	(61,262)
Net change in cash and cash equivalents	7,249	(38,718)
Cash and cash equivalents at beginning of period	9,808	55,432
Cash and cash equivalents at the end of period	17,057	16,714
Supplemental non-cash investing activities:
Capital expenditures included in accounts payable	18,451	7,704
Supplemental cash activities:
Cash paid for interest	2,295	3,204
Cash paid for income taxes	$ 6,576	$ 2,240

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CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands	Total	Common Stock	Additional Paid-In Capital	Retained Earnings (Accumulated Deficit)	Treasury Stock	Accumulated  Other Comprehensive Income (Loss)
Beginning balance (in shares) at Dec. 31, 2017		30,482,966
Beginning balance at Dec. 31, 2017	$ 376,325	$ 305	$ 263,081	$ 121,985	$ 0	$ (9,046)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net Income	11,593			11,593
Comprehensive income
Foreign exchange translation adjustments	(1)					(1)
Cash-flow Hedges	0
Pension obligation adjustments	0			(410)		410
Other comprehensive income (loss), net of tax	(1)			(410)		409
Issuance of common stock (in shares)		25,356
Issuance of common stock	0
Purchase of treasury shares	(370)		(370)
Stock-based compensation	2,281		2,281
Ending balance (in shares) at Mar. 31, 2018		30,508,322
Ending balance at Mar. 31, 2018	389,828	$ 305	264,992	133,168	0	(8,637)
Beginning balance (in shares) at Dec. 31, 2017		30,482,966
Beginning balance at Dec. 31, 2017	376,325	$ 305	263,081	121,985	0	(9,046)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net Income	40,003
Comprehensive income
Cash-flow Hedges	0
Ending balance (in shares) at Jun. 30, 2018		30,524,738
Ending balance at Jun. 30, 2018	418,077	$ 305	264,849	161,578	(1)	(8,654)
Beginning balance (in shares) at Mar. 31, 2018		30,508,322
Beginning balance at Mar. 31, 2018	389,828	$ 305	264,992	133,168	0	(8,637)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net Income	28,410			28,410
Comprehensive income
Foreign exchange translation adjustments	(17)					(17)
Cash-flow Hedges	0
Pension obligation adjustments	0
Other comprehensive income (loss), net of tax	(17)					(17)
Issuance of common stock (in shares)		16,416
Issuance of common stock	0
Purchase of treasury shares	(2,743)		(2,742)		(1)
Stock-based compensation	2,599		2,599
Ending balance (in shares) at Jun. 30, 2018		30,524,738
Ending balance at Jun. 30, 2018	$ 418,077	$ 305	264,849	161,578	(1)	(8,654)
Beginning balance (in shares) at Dec. 31, 2018	29,345,001	30,555,715
Beginning balance at Dec. 31, 2018	$ 420,338	$ 306	234,699	187,819	(12)	(2,474)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net Income	20,174			20,174
Comprehensive income
Foreign exchange translation adjustments	(1)					(1)
Cash-flow Hedges	(192)					(192)
Pension obligation adjustments	0
Other comprehensive income (loss), net of tax	(193)					(193)
Issuance of common stock (in shares)		22,497
Issuance of common stock	16		16
Purchase of treasury shares	(23,853)		(23,845)		(8)
Stock-based compensation	2,762		2,762
Ending balance (in shares) at Mar. 31, 2019		30,578,212
Ending balance at Mar. 31, 2019	$ 419,244	$ 306	213,632	207,993	(20)	(2,667)
Beginning balance (in shares) at Dec. 31, 2018	29,345,001	30,555,715
Beginning balance at Dec. 31, 2018	$ 420,338	$ 306	234,699	187,819	(12)	(2,474)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net Income	35,520
Comprehensive income
Cash-flow Hedges	$ (621)
Ending balance (in shares) at Jun. 30, 2019	28,008,959	30,591,472
Ending balance at Jun. 30, 2019	$ 420,563	$ 306	200,036	223,339	(26)	(3,092)
Beginning balance (in shares) at Mar. 31, 2019		30,578,212
Beginning balance at Mar. 31, 2019	419,244	$ 306	213,632	207,993	(20)	(2,667)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net Income	15,346			15,346
Comprehensive income
Foreign exchange translation adjustments	4					4
Cash-flow Hedges	(429)					(429)
Pension obligation adjustments	0
Other comprehensive income (loss), net of tax	(425)					(425)
Issuance of common stock (in shares)		13,260
Issuance of common stock	0
Purchase of treasury shares	(16,414)		(16,408)		(6)
Stock-based compensation	$ 2,812		2,812
Ending balance (in shares) at Jun. 30, 2019	28,008,959	30,591,472
Ending balance at Jun. 30, 2019	$ 420,563	$ 306	$ 200,036	$ 223,339	$ (26)	$ (3,092)

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CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Parenthetical) - shares	3 Months Ended
	Jun. 30, 2019	Mar. 31, 2019	Jun. 30, 2018	Mar. 31, 2018
Treasury Stock
Stock repurchased during period (in shares)	578,045	793,754	70,107	8,995

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Organization, Operations and Basis of Presentation

6 Months Ended

Jun. 30, 2019

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.

Basis of Presentation

The Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions to Rule 10-01 of Regulation S-X.  Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements.  In the opinion of management, the accompanying unaudited Condensed Consolidated Financial Statements contain all adjustments, consisting of only normal recurring adjustments, necessary for a fair statement of the Company's financial position as of June 30, 2019, and its results of operations and cash flows for the three and six months ended June 30, 2019 and 2018. The Condensed Consolidated Balance Sheet at December 31, 2018 was derived from audited annual financial statements but does 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 for the year ended December 31, 2018 (the "2018 Form 10-K"). 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 six months ended June 30, 2019 and 2018 were June 29, 2019 and June 30, 2018, respectively.

Liabilities to creditors to whom we have issued checks that remained outstanding at June 30, 2019 and December 31, 2018 aggregated $6.7 million and $7.7 million, respectively, and were included in Cash and cash equivalents and Accounts payable in the Condensed Consolidated Balance Sheets.

The Company submitted a business interruption insurance claim related to the first quarter 2018 weather event and recorded a benefit of $6.6 million and $2.3 million to Cost of goods sold in the first and second quarters of 2019, respectively. The business interruption claim has been closed with a total recorded benefit of approximately of $12 million.

On May 4, 2018, the Company announced that its Board of Directors (the “Board”) authorized a share repurchase program of up to $75 million of the Company’s common stock. On February 22, 2019, the Company announced that the Board authorized a share repurchase program of up to an additional $75 million of the Company's common stock, which was in addition to the remaining capacity available under the May 2018 share repurchase program. 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 share repurchase program has no expiration date and may be modified, suspended or discontinued at any time. The par value of the shares repurchased is applied to Treasury stock and the excess of the purchase price over par value is applied to Additional paid-in capital.

As of June 30, 2019, the Company had repurchased 2,555,713 shares of common stock for an aggregate of $77.7 million at a weighted average market price of $30.40 per share. As of June 30, 2019, $72.3 million remained available for share repurchases under the current authorization.

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Recent Accounting Pronouncements

6 Months Ended

Jun. 30, 2019

Accounting Policies [Abstract]

Recent Accounting Pronouncements

Recent Accounting Pronouncements

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

In October 2018, the FASB issued ASU No. 2018-16, Derivatives and Hedging (Topic 815): Inclusion of the Secured Overnight Financing Rate (“SOFR”) Overnight Index Swap (“OIS”) Rate as a Benchmark Interest Rate for Hedge Accounting Purposes, which permits use of the OIS rate based on SOFR as a U.S. benchmark interest rate for hedge accounting purposes under Topic 815 in addition to the interest rates on direct Treasury obligations of the U.S. government (“UST”), the LIBOR swap rate, the OIS rate based on the Fed Funds Effective Rate and the SIFMA Municipal Swap Rate. Pursuant to the amendments, SOFR will be an option to replace LIBOR as it is phased out. The amendments of ASU No. 2018-16 are effective for companies that have adopted ASU 2017-12 for fiscal years beginning after December 15, 2018, including interim periods within that fiscal year or at such time a company adopts ASU 2017-12. Early adoption of ASU 2018-16 is not permitted without previous adoption of ASU 2017-12. As the Company elected to early adopt ASU 2017-12 during the fourth quarter of 2018, the Company adopted ASU 2018-16 effective January 1, 2019, which did not have a material impact on the Company's consolidated financial position or results of operations upon adoption.

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 stated that the new standard be applied under a modified retrospective approach with periods prior to the adoption date being adjusted. During July 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 without adjusting prior periods. The Company adopted the standard effective January 1, 2019 electing the cumulative-effect adjustment approach made available in ASU 2018-11. The Company has also elected the following practical expedients:

•the package of three expedients which allows the Company not to re-assess (i) whether any expired or existing contracts are or contain leases, (ii) lease classification for any expired or existing leases, and (iii) initial direct costs for any expired or existing leases;

•the short-term lease practical expedient, which allows the Company to exclude leases with an initial term of 12 months or less (“short-term leases”) from recognition in the unaudited Condensed Consolidated Balance Sheet;

•the bifurcation of lease and non-lease components practical expedients, which did not require the Company to bifurcate lease and non-lease components for our real estate leases; and

•the land easements practical expedient, which allows the Company to carry forward the accounting treatment for land easements on existing agreements.

We have implemented internal controls and key system functionality to enable the preparation of financial information on adoption. The standard had a material impact to our Condensed Consolidated Balance Sheet, but did not have a significant impact in the recognition, measurement or presentation of lease expenses within the Condensed Consolidated Statements of Operations or the Condensed Consolidated Statements of Cash Flows. The most significant impact was the recognition of right-of-use (“ROU”) assets and liabilities for operating leases, while our accounting for finance leases remained substantially unchanged. See "Note 8. Leases" for further information.

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Revenues

6 Months Ended

Jun. 30, 2019

Revenue from Contract with Customer [Abstract]

Revenues

Revenues

Revenue Recognition

We serve approximately 500 customers annually in more than 40 countries and across a wide variety of industries. For the three months ended June 30, 2019 and 2018, the Company's ten largest customers accounted for approximately 47% and 45% of total sales, respectively. For the six months ended June 30, 2019 and 2018, the Company's ten largest customers accounted for approximately 46% and 45% of total sales, respectively.

We typically sell to customers under master service agreements, with one- to two-year terms on average, or by purchase orders. We have historically experienced low customer turnover and have an average customer relationship of approximately 20 years. Our largest customer is Shaw Industries Group Inc. (“Shaw”), one of the world's largest consumers of caprolactam and Nylon 6 resin. We sell Nylon 6 resin and caprolactam to Shaw under a long-term agreement. For the three months ended June 30, 2019

and 2018, our sales to Shaw were 19% and 22%, respectively, of our total sales. For the six months ended June 30, 2019 and 2018, our sales to Shaw were 21% and 22%, respectively, of our total sales.

Each of the Company’s product lines represented the following approximate percentage of total sales for the three and six months ended June 30, 2019 and 2018:

	Three Months Ended June 30,		Six Months Ended June 30,
	2019	2018	2019	2018
Nylon	27%	27%	29%	28%
Caprolactam	20%	19%	20%	18%
Ammonium Sulfate Fertilizers	27%	21%	25%	20%
Chemical Intermediates	26%	33%	26%	34%
	100%	100%	100%	100%

The Company's revenues by geographic area for the three and six months ended June 30, 2019 and 2018 were as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2019		2018		2019		2018
United States	$	289,551	$	342,497	$	547,193	$	640,145
International	55,664		57,962		112,917		119,552
Total	$	345,215	$	400,459	$	660,110	$	759,697

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 six months ended June 30, 2019:

Opening balance January 1, 2019	$	22,556
Additional cash advances	1,083
Less amounts recognized in revenues	(20,455)
Ending balance June 30, 2019	$	3,184

The Company expects to recognize as revenue the June 30, 2019 ending balance of Deferred income and customer advances within one year or less.

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Earnings Per Share

6 Months Ended

Jun. 30, 2019

Earnings Per Share [Abstract]

Earnings Per Share

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 six months ended June 30, 2019 and 2018 were as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2019		2018		2019		2018
Basic
Net Income	$	15,346	$	28,410	$	35,520	$	40,003
Weighted average common shares outstanding	28,162,007		30,481,627		28,489,486		30,485,095
EPS – Basic	$	0.54	$	0.93	$	1.25	$	1.31
Diluted
Dilutive effect of equity awards and other stock-based holdings	974,972		823,541		970,663		809,228
Weighted average common shares outstanding	29,136,979		31,305,168		29,460,149		31,294,323
EPS – Diluted	$	0.53	$	0.91	$	1.21	$	1.28

Diluted EPS is computed based upon the weighted average number of common shares outstanding for the period plus the dilutive effect of common stock equivalents (which includes units allocated to the AdvanSix stock unit fund under the AdvanSix Inc. Deferred Compensation Plan) using the treasury stock method and the average market price of our common stock for the year.

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 June 30, 2019 and 2018, stock options of 539,054 and 128,777, respectively, were anti-dilutive and excluded from the computations of dilutive EPS.

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Accounts and Other Receivables - Net

6 Months Ended

Jun. 30, 2019

Receivables [Abstract]

Accounts and Other Receivables - Net

Accounts and Other Receivables – Net

	June 30, 2019		December 31, 2018
Accounts receivables	$	125,887	$	166,017
Other	3,901		1,716
Total accounts and other receivables	129,788		167,733
Less – allowance for doubtful accounts	(2,262)		(7,467)
Total accounts and other receivables – net	$	127,526	$	160,266

The decrease in Total accounts and other receivables – net at June 30, 2019 versus December 31, 2018 was due primarily to lower sales. The change in the allowance for doubtful accounts relates to an accounts receivable write-off of approximately $5.1 million related to a customer bankruptcy as previously reported in the 2018 Form 10-K.

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Inventories

6 Months Ended

Jun. 30, 2019

Inventory Disclosure [Abstract]

Inventories

Inventories

	June 30, 2019		December 31, 2018
Raw materials	$	46,109	$	55,002
Work in progress	54,030		46,728
Finished goods	45,333		39,368
Spares and other	24,313		24,555
	169,785		165,653
Reduction to LIFO cost basis	(31,551)		(28,471)
Total inventories – net	$	138,234	$	137,182

Total inventories – net at June 30, 2019 were relatively flat compared to the balance at December 31, 2018. The shift in inventory categories reflects the normal course of operations including the timing of cumene deliveries and the fulfillment of customer orders.

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Postretirement Benefit Cost

6 Months Ended

Jun. 30, 2019

Retirement Benefits [Abstract]

Postretirement Benefit Cost

Postretirement Benefit Cost

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

	Three Months Ended June 30,				Six Months Ended June 30,
	2019		2018		2019		2018
Service cost	$	1,714	$	2,001	$	3,427	$	4,003
Interest cost	521		469		1,042		938
Expected return on plan assets	(334)		(287)		(668)		(575)
Net periodic benefit cost	$	1,901	$	2,183	$	3,801	$	4,366

The Company made contributions to the defined benefit pension plan of $0.5 million in the second quarter of 2019. No contributions were made in the first quarter of 2019. The Company plans to make pension plan contributions during 2019 sufficient to satisfy pension funding requirements in an aggregate amount of approximately $4 to $6 million and will make additional contributions in future years sufficient to satisfy pension funding requirements in those periods.

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.

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Leases

6 Months Ended

Jun. 30, 2019

Leases [Abstract]

Leases

Leases

We determine if an arrangement is a lease at inception. Operating leases are included in Operating lease right-of-use assets, Operating lease liabilities – short-term, and Operating lease liabilities – long-term in our Condensed Consolidated Balance Sheet. Finance leases are included in Property, plant and equipment – net, Accounts payable, and Other liabilities in our Condensed Consolidated Balance Sheets.

ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. We use the implicit rate when readily determinable. The operating lease ROU asset also includes any lease payments made and excludes lease incentives. Our lease terms may include options to extend or terminate the lease and, when it is reasonably certain that such an option will be exercised, it is included in the determination of the corresponding assets and liabilities. Short-term leases are not recognized on our unaudited Condensed Consolidated Balance Sheets. Lease expense for all lease payments is recognized on a straight-line basis over the lease term.

We have lease agreements with lease and non-lease components, which are generally accounted for separately. Additionally, for certain equipment leases, we apply a portfolio approach to effectively account for the operating lease ROU assets and liabilities. The Company has entered into agreements to lease transportation equipment, storage facilities, office space, dock access and other equipment. The leases have initial terms of up to 20 years with some containing renewal options subject to customary conditions.

The components of lease expense were as follows:

	Three Months Ended June 30, 2019		Six Months Ended June 30, 2019
Finance lease cost:
Amortization of right-of-use asset	$	157	$	305
Interest on lease liabilities	17		35
Total finance lease cost	174		340
Operating lease cost	7,931		15,501
Short-term lease cost	4,116		8,397
Total lease cost	$	12,221	$	24,238

Supplemental cash flow information related to leases was as follows:

	Six Months Ended June 30, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	15,295
Operating cash flows from finance leases	30
Financing cash flows from finance leases	2,377
Non-cash information:
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	9,419
Finance leases	593

Supplemental balance sheet information related to leases was as follows:

	June 30, 2019
Operating Leases
Operating lease right-of-use assets	$	115,284
Operating lease liabilities – short term	26,022
Operating lease liabilities – long term	89,503
Total operating lease liabilities	$	115,525
Finance Leases
Property, plant and equipment – gross	$	2,354
Accumulated depreciation	(1,034)
Property, plant and equipment – net	$	1,320
Accounts payable	591
Other liabilities	739
Total finance lease liabilities	$	1,330
Weighted Average Remaining Lease Term
Operating leases	10.64 years
Finance leases	2.38 years
Weighted Average Discount Rate
Operating leases	6.14		%
Finance leases	5.20		%

The cumulative effect of the changes made to the Condensed Consolidated Balance Sheets for the adoption of the new leasing standard on January 1, 2019 was as follows:

	Balance Sheet accounts prior to new leasing standard adoption adjustments		Adjustments due to the adoption of the new leasing standard		Balance Sheet accounts after the new leasing standard adoption adjustments
ASSETS
Property, plant and equipment – net	$	1,032	$	—	$	1,032
Operating lease right-of-use assets	—		117,921		117,921
Total assets	1,034,626		$	117,921	1,152,547
LIABILITIES AND EQUITY
Current Liabilities:
Accounts payable	$	318	$	—	$	318
Operating lease liabilities – short term	—		24,794		24,794
Total current liabilities	284,724		24,794		309,518
Operating lease liabilities – long term	—		93,127		93,127
Other liabilities	762		—		762
Total liabilities	614,288		117,921		732,209
Total equity	420,338		—		420,338
Total liabilities and equity	1,034,626		$	117,921	1,152,547

Maturities of lease liabilities were as follows:

Year Ending December 31,	Operating Leases		Finance Leases
2019 (remainder)	$	16,402	$	332
2020	31,412		610
2021	19,736		374
2022	14,973		99
2023	12,350		—
Thereafter	70,291		—
Total lease payments	165,164		1,415
Less imputed interest	(49,639)		(85)
Total	$	115,525	$	1,330

As previously disclosed in our 2018 Form 10-K and under the previous lease accounting standard, future minimum lease payments for leases having initial or remaining non-cancellable lease terms in excess of one year would have been as follows:

Year Ending December 31,	Operating Leases		Capital Leases
2019	$	36,110	$	239
2020	29,318		212
2021	16,111		131
2022	11,571		89
2023	9,104		—
Thereafter	26,627		—
Total lease payments	$	128,841	$	671

Leases

Leases

We determine if an arrangement is a lease at inception. Operating leases are included in Operating lease right-of-use assets, Operating lease liabilities – short-term, and Operating lease liabilities – long-term in our Condensed Consolidated Balance Sheet. Finance leases are included in Property, plant and equipment – net, Accounts payable, and Other liabilities in our Condensed Consolidated Balance Sheets.

ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. We use the implicit rate when readily determinable. The operating lease ROU asset also includes any lease payments made and excludes lease incentives. Our lease terms may include options to extend or terminate the lease and, when it is reasonably certain that such an option will be exercised, it is included in the determination of the corresponding assets and liabilities. Short-term leases are not recognized on our unaudited Condensed Consolidated Balance Sheets. Lease expense for all lease payments is recognized on a straight-line basis over the lease term.

We have lease agreements with lease and non-lease components, which are generally accounted for separately. Additionally, for certain equipment leases, we apply a portfolio approach to effectively account for the operating lease ROU assets and liabilities. The Company has entered into agreements to lease transportation equipment, storage facilities, office space, dock access and other equipment. The leases have initial terms of up to 20 years with some containing renewal options subject to customary conditions.

The components of lease expense were as follows:

	Three Months Ended June 30, 2019		Six Months Ended June 30, 2019
Finance lease cost:
Amortization of right-of-use asset	$	157	$	305
Interest on lease liabilities	17		35
Total finance lease cost	174		340
Operating lease cost	7,931		15,501
Short-term lease cost	4,116		8,397
Total lease cost	$	12,221	$	24,238

Supplemental cash flow information related to leases was as follows:

	Six Months Ended June 30, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	15,295
Operating cash flows from finance leases	30
Financing cash flows from finance leases	2,377
Non-cash information:
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	9,419
Finance leases	593

Supplemental balance sheet information related to leases was as follows:

	June 30, 2019
Operating Leases
Operating lease right-of-use assets	$	115,284
Operating lease liabilities – short term	26,022
Operating lease liabilities – long term	89,503
Total operating lease liabilities	$	115,525
Finance Leases
Property, plant and equipment – gross	$	2,354
Accumulated depreciation	(1,034)
Property, plant and equipment – net	$	1,320
Accounts payable	591
Other liabilities	739
Total finance lease liabilities	$	1,330
Weighted Average Remaining Lease Term
Operating leases	10.64 years
Finance leases	2.38 years
Weighted Average Discount Rate
Operating leases	6.14		%
Finance leases	5.20		%

The cumulative effect of the changes made to the Condensed Consolidated Balance Sheets for the adoption of the new leasing standard on January 1, 2019 was as follows:

	Balance Sheet accounts prior to new leasing standard adoption adjustments		Adjustments due to the adoption of the new leasing standard		Balance Sheet accounts after the new leasing standard adoption adjustments
ASSETS
Property, plant and equipment – net	$	1,032	$	—	$	1,032
Operating lease right-of-use assets	—		117,921		117,921
Total assets	1,034,626		$	117,921	1,152,547
LIABILITIES AND EQUITY
Current Liabilities:
Accounts payable	$	318	$	—	$	318
Operating lease liabilities – short term	—		24,794		24,794
Total current liabilities	284,724		24,794		309,518
Operating lease liabilities – long term	—		93,127		93,127
Other liabilities	762		—		762
Total liabilities	614,288		117,921		732,209
Total equity	420,338		—		420,338
Total liabilities and equity	1,034,626		$	117,921	1,152,547

Maturities of lease liabilities were as follows:

Year Ending December 31,	Operating Leases		Finance Leases
2019 (remainder)	$	16,402	$	332
2020	31,412		610
2021	19,736		374
2022	14,973		99
2023	12,350		—
Thereafter	70,291		—
Total lease payments	165,164		1,415
Less imputed interest	(49,639)		(85)
Total	$	115,525	$	1,330

As previously disclosed in our 2018 Form 10-K and under the previous lease accounting standard, future minimum lease payments for leases having initial or remaining non-cancellable lease terms in excess of one year would have been as follows:

Year Ending December 31,	Operating Leases		Capital Leases
2019	$	36,110	$	239
2020	29,318		212
2021	16,111		131
2022	11,571		89
2023	9,104		—
Thereafter	26,627		—
Total lease payments	$	128,841	$	671

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Commitments and Contingencies

6 Months Ended

Jun. 30, 2019

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 was notified during the first quarter of 2019 that the U.S. Attorney’s Office for the Eastern District of Virginia had closed its investigation and no further action by the Company was required. On May 13, 2019, the Company announced that the United States government notified the Company that the balance of the criminal investigation concluded with no further action required.

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 2019.

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Income Taxes	6 Months Ended
	Jun. 30, 2019
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 quarter. The provision for income taxes was $5.3 million and $9.6 million for the three months ended June 30, 2019 and 2018, respectively. The provision for income taxes was $12.1 million and $13.2 million for the six months ended June 30, 2019 and 2018, respectively.

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Fair Value Measurements

6 Months Ended

Jun. 30, 2019

Fair Value Disclosures [Abstract]

Fair Value Measurements

Fair Value Measurements

Financial and non-financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. During the fourth quarter of 2018, the Company acquired a royalty stream which has been treated as an asset acquisition and entered into an interest rate swap transaction related to its credit agreement. The purchase price of the royalty stream for $1.0 million approximates its fair value at December 31, 2018 and is considered a Level 3 asset. The fair value measurement is based on the expected future cash flows and, as there is no reason to believe that the asset is impaired, it is assumed that the valuation remains unchanged at June 30, 2019. The fair value of the interest rate swap at June 30, 2019 was a loss of approximately $1.7 million and is considered a Level 2 liability.

The pension plan assets are invested in collective investment trust funds. These investments are measured at fair value using the net asset value per share as a practical expedient. Investments valued using the net asset value method (NAV) (or its equivalent) practical expedient are excluded from the fair value hierarchy disclosure.

The Company’s Condensed Consolidated Balance Sheets also include Cash and cash equivalents, Accounts receivable and Accounts payable all of which are recorded at amounts which approximate fair value.

The Company also has assets that are required to be recorded at fair value on a non-recurring basis. These assets are evaluated when certain triggering events occur (including a decrease in estimated future cash flows) that indicate the asset should be evaluated for impairment. Goodwill and indefinite lived intangible assets must be evaluated at least annually.

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Derivative and Hedging Instruments

6 Months Ended

Jun. 30, 2019

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative and Hedging Instruments

Derivative and Hedging Instruments

The specific credit and market, commodity price and interest rate risks to which the Company is exposed in connection with its ongoing business operations are described below. This discussion includes an explanation of the hedging instrument, a rate swap agreement, used to manage the Company’s interest rate risk associated with a fixed and floating-rate borrowing.

For cash flow hedges, the entire change in the fair value of the hedging instrument included in the assessment of hedge effectiveness is recorded in Other comprehensive income. Those amounts are reclassified to earnings in the same income statement line item that is used to present the earnings effect of the hedged item when the hedged item affects earnings.

Credit and Market Risk – Financial instruments, including derivatives, expose the Company to counterparty credit risk for non-performance and to market risk related to changes in commodity prices, interest rates and foreign currency exchange rates. The Company manages its exposure to counterparty credit risk through specific minimum credit standards, diversification of counterparties, and procedures to monitor concentrations of credit risk. The Company’s counterparties in derivative transactions are substantial investment and commercial banks with significant experience using such derivative instruments. The Company monitors the impact of market risk on the fair value and cash flows of its derivative and other financial instruments considering reasonably possible changes in commodity prices, interest rates and foreign currency exchange rates and restricts the use of derivative financial instruments to hedging activities.

The Company continually monitors the creditworthiness of its customers to which it grants credit terms in the normal course of business. The terms and conditions of credit sales are designed to mitigate or eliminate concentrations of credit risk with any single customer. The Company has one customer that accounted for approximately 13% and 22% of trade Accounts receivable – net at June 30, 2019 and December 31, 2018, respectively.

Commodity Price Risk Management – The Company's exposure to market risk for commodity prices can result in changes in the cost of production. We primarily mitigate our exposure to commodity price risk by using long-term, formula-based price contracts with our suppliers and formula-based price agreements with customers. Our customer agreements provide for price adjustments based on relevant market indices and raw material prices and generally do not include take-or-pay terms. We may also enter into forward commodity contracts with third-parties designated as hedges of anticipated purchases of several commodities. Forward commodity contracts are marked-to-market, with the resulting gains and losses recognized in earnings, in the same category as the items being hedged, when the hedged transaction is recognized. At June 30, 2019 and 2018, we had no financial contracts related to forward commodity agreements.

Interest Rate Risk Management – On November 6, 2018, the Company entered into an interest rate swap agreement for a notional amount of $50 million to exchange floating for fixed rate interest payments for our LIBOR-based borrowings. This interest rate swap had a fair value of zero at inception and was effective November 30, 2018. In accordance with FASB Accounting Standards Codification (“ASC”) ASC 815, the Company designated the interest rate swap as a cash flow hedge of floating-rate borrowings. This interest rate swap, with a maturity date of November 30, 2021, converts the Company’s interest rate payments on the first $50 million of variable-rate, 1-month LIBOR-based debt to a fixed interest rate. This interest rate swap involves the receipt of floating rate amounts in exchange for fixed rate interest payments over the life of the interest rate swap without an exchange of the underlying principal amount.

	Liability Derivatives
	June 30, 2019			December 31, 2018
	Balance Sheet Classification	Fair Value		Balance Sheet Classification	Fair Value
Derivatives designated as hedging instruments under ASC 815:
Interest Rate Contracts	Accrued liabilities and Other liabilities	(1,661)		Accrued liabilities and Other liabilities	(833)
Total Derivatives		$	(1,661)		$	(833)

The following table summarizes adjustments related to cash flow hedge included in Cash-flow hedges, in the Condensed Consolidated Statements of Comprehensive Income:

	June 30, 2019
Loss on derivative instruments included in Accumulated other comprehensive income at December 31, 2018	$	(833)
Fair value adjustment	(828)
Loss on derivative instruments included in Accumulated other comprehensive income at June 30, 2019	$	(1,661)

At June 30, 2019, the Company expects to reclassify approximately $0.4 million of net losses on derivative instruments from Accumulated other comprehensive income to earnings during the next 12 months due to the payment of variable interest associated with the floating rate debt.

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Restructuring

6 Months Ended

Jun. 30, 2019

Restructuring and Related Activities [Abstract]

Restructuring

Restructuring

On May 2, 2019, the Company approved the closure of its Pottsville, Pennsylvania films plant as part of its broader strategic efforts to improve the Company’s competitive position in providing quality film products and services to its customers. The Company also announced a strategic alliance with Oben Holding Group S.A. (“Oben”), a third-party producer of films for the flexible packaging industry, leveraging the Company's sales channels and Nylon 6 supply with Oben's new state-of-the-art manufacturing facility. The Company ceased operations at the Pottsville, PA plant in July 2019.

Restructuring costs consist of long-lived asset impairments, facility exit costs, employee separations and inventory write-downs. Facility exit costs include demolition, equipment relocation, contract terminations and project management costs. These costs are included in Cost of goods sold in the Condensed Consolidated Statements of Operations. The Company does not expect to incur any additional restructuring charges related to the closure of its films plant.

Restructuring costs for the three months ended June 30, 2019 were as follows:

	Three Months Ended June 30, 2019
Write-off of equipment and facility	$	7,131
Facility exit costs	2,686
Employee separations	1,364
Inventory write-downs	1,442
Total restructuring charges	$	12,623

The following table summarizes the components of restructuring activities and the remaining balances of accrued restructuring charges as of June 30, 2019:

	Employee Separation Benefits		Facility Exit Costs		Total
Accrual balance at December 31, 2018	$	—	$	—	$	—
Charges	1,364		2,686		4,050
Cash payments	—		—		—
Accrual balance at June 30, 2019	$	1,364	$	2,686	$	4,050

The balance of accrued restructuring charges are expected to be settled within the next twelve months.

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Subsequent Events	6 Months Ended
	Jun. 30, 2019
Subsequent Events [Abstract]
Subsequent Events	Subsequent EventsOn July 15, 2019, the Company entered into an additional interest rate swap agreement for an incremental notional amount of $50 million to exchange floating for fixed rate interest payments for our LIBOR-based borrowings. This interest rate swap is in addition to the $50 million interest rate swap entered into in November 2018, had a fair value of zero at inception, is effective July 31, 2019 and has been designated as a cash flow hedge. This interest rate swap agreement, with a maturity date of February 21, 2023, converts the Company's interest rate payments on an incremental $50 million of variable-rate, 1-month LIBOR-based debt to a fixed interest rate.

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Recent Accounting Pronouncements (Policies)

6 Months Ended

Jun. 30, 2019

Accounting Policies [Abstract]

Basis of Presentation

The Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions to Rule 10-01 of Regulation S-X.  Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements.  In the opinion of management, the accompanying unaudited Condensed Consolidated Financial Statements contain all adjustments, consisting of only normal recurring adjustments, necessary for a fair statement of the Company's financial position as of June 30, 2019, and its results of operations and cash flows for the three and six months ended June 30, 2019 and 2018. The Condensed Consolidated Balance Sheet at December 31, 2018 was derived from audited annual financial statements but does 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 for the year ended December 31, 2018 (the "2018 Form 10-K"). 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 six months ended June 30, 2019 and 2018 were June 29, 2019 and June 30, 2018, respectively.

New Accounting Pronouncements

In October 2018, the FASB issued ASU No. 2018-16, Derivatives and Hedging (Topic 815): Inclusion of the Secured Overnight Financing Rate (“SOFR”) Overnight Index Swap (“OIS”) Rate as a Benchmark Interest Rate for Hedge Accounting Purposes, which permits use of the OIS rate based on SOFR as a U.S. benchmark interest rate for hedge accounting purposes under Topic 815 in addition to the interest rates on direct Treasury obligations of the U.S. government (“UST”), the LIBOR swap rate, the OIS rate based on the Fed Funds Effective Rate and the SIFMA Municipal Swap Rate. Pursuant to the amendments, SOFR will be an option to replace LIBOR as it is phased out. The amendments of ASU No. 2018-16 are effective for companies that have adopted ASU 2017-12 for fiscal years beginning after December 15, 2018, including interim periods within that fiscal year or at such time a company adopts ASU 2017-12. Early adoption of ASU 2018-16 is not permitted without previous adoption of ASU 2017-12. As the Company elected to early adopt ASU 2017-12 during the fourth quarter of 2018, the Company adopted ASU 2018-16 effective January 1, 2019, which did not have a material impact on the Company's consolidated financial position or results of operations upon adoption.

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 stated that the new standard be applied under a modified retrospective approach with periods prior to the adoption date being adjusted. During July 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 without adjusting prior periods. The Company adopted the standard effective January 1, 2019 electing the cumulative-effect adjustment approach made available in ASU 2018-11. The Company has also elected the following practical expedients:

•the package of three expedients which allows the Company not to re-assess (i) whether any expired or existing contracts are or contain leases, (ii) lease classification for any expired or existing leases, and (iii) initial direct costs for any expired or existing leases;

•the short-term lease practical expedient, which allows the Company to exclude leases with an initial term of 12 months or less (“short-term leases”) from recognition in the unaudited Condensed Consolidated Balance Sheet;

•the bifurcation of lease and non-lease components practical expedients, which did not require the Company to bifurcate lease and non-lease components for our real estate leases; and

•the land easements practical expedient, which allows the Company to carry forward the accounting treatment for land easements on existing agreements.

We have implemented internal controls and key system functionality to enable the preparation of financial information on adoption. The standard had a material impact to our Condensed Consolidated Balance Sheet, but did not have a significant impact in the recognition, measurement or presentation of lease expenses within the Condensed Consolidated Statements of Operations or the Condensed Consolidated Statements of Cash Flows. The most significant impact was the recognition of right-of-use (“ROU”) assets and liabilities for operating leases, while our accounting for finance leases remained substantially unchanged. See "Note 8. Leases" for further information.

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Revenues (Tables)

6 Months Ended

Jun. 30, 2019

Revenue from Contract with Customer [Abstract]

Disaggregation of Revenue

Each of the Company’s product lines represented the following approximate percentage of total sales for the three and six months ended June 30, 2019 and 2018:

	Three Months Ended June 30,		Six Months Ended June 30,
	2019	2018	2019	2018
Nylon	27%	27%	29%	28%
Caprolactam	20%	19%	20%	18%
Ammonium Sulfate Fertilizers	27%	21%	25%	20%
Chemical Intermediates	26%	33%	26%	34%
	100%	100%	100%	100%

The Company's revenues by geographic area for the three and six months ended June 30, 2019 and 2018 were as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2019		2018		2019		2018
United States	$	289,551	$	342,497	$	547,193	$	640,145
International	55,664		57,962		112,917		119,552
Total	$	345,215	$	400,459	$	660,110	$	759,697

Summary of Deferred Income and Customer Advances

Below is a roll-forward of Deferred income and customer advances for the six months ended June 30, 2019:

Opening balance January 1, 2019	$	22,556
Additional cash advances	1,083
Less amounts recognized in revenues	(20,455)
Ending balance June 30, 2019	$	3,184

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Earnings Per Share (Tables)

6 Months Ended

Jun. 30, 2019

Earnings Per Share [Abstract]

Schedule of Earnings Per Share

The details of the basic and diluted EPS calculations for the three and six months ended June 30, 2019 and 2018 were as follows: 

	Three Months Ended June 30,				Six Months Ended June 30,
	2019		2018		2019		2018
Basic
Net Income	$	15,346	$	28,410	$	35,520	$	40,003
Weighted average common shares outstanding	28,162,007		30,481,627		28,489,486		30,485,095
EPS – Basic	$	0.54	$	0.93	$	1.25	$	1.31
Diluted
Dilutive effect of equity awards and other stock-based holdings	974,972		823,541		970,663		809,228
Weighted average common shares outstanding	29,136,979		31,305,168		29,460,149		31,294,323
EPS – Diluted	$	0.53	$	0.91	$	1.21	$	1.28

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Accounts and Other Receivables - Net (Tables)

6 Months Ended

Jun. 30, 2019

Receivables [Abstract]

Schedule of Accounts and Other Receivables Net

	June 30, 2019		December 31, 2018
Accounts receivables	$	125,887	$	166,017
Other	3,901		1,716
Total accounts and other receivables	129,788		167,733
Less – allowance for doubtful accounts	(2,262)		(7,467)
Total accounts and other receivables – net	$	127,526	$	160,266

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Inventories (Tables)

6 Months Ended

Jun. 30, 2019

Inventory Disclosure [Abstract]

Schedule of Inventory, Current

	June 30, 2019		December 31, 2018
Raw materials	$	46,109	$	55,002
Work in progress	54,030		46,728
Finished goods	45,333		39,368
Spares and other	24,313		24,555
	169,785		165,653
Reduction to LIFO cost basis	(31,551)		(28,471)
Total inventories – net	$	138,234	$	137,182

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Postretirement Benefit Cost (Tables)

6 Months Ended

Jun. 30, 2019

Retirement Benefits [Abstract]

Schedule of Net Benefit Costs

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

	Three Months Ended June 30,				Six Months Ended June 30,
	2019		2018		2019		2018
Service cost	$	1,714	$	2,001	$	3,427	$	4,003
Interest cost	521		469		1,042		938
Expected return on plan assets	(334)		(287)		(668)		(575)
Net periodic benefit cost	$	1,901	$	2,183	$	3,801	$	4,366

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Leases (Tables)

6 Months Ended

Jun. 30, 2019

Leases [Abstract]

Components of Lease Expense

The components of lease expense were as follows:

	Three Months Ended June 30, 2019		Six Months Ended June 30, 2019
Finance lease cost:
Amortization of right-of-use asset	$	157	$	305
Interest on lease liabilities	17		35
Total finance lease cost	174		340
Operating lease cost	7,931		15,501
Short-term lease cost	4,116		8,397
Total lease cost	$	12,221	$	24,238

Supplemental cash flow information related to leases was as follows:

	Six Months Ended June 30, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	15,295
Operating cash flows from finance leases	30
Financing cash flows from finance leases	2,377
Non-cash information:
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	9,419
Finance leases	593

Supplemental Balance Sheet Information

Supplemental balance sheet information related to leases was as follows:

	June 30, 2019
Operating Leases
Operating lease right-of-use assets	$	115,284
Operating lease liabilities – short term	26,022
Operating lease liabilities – long term	89,503
Total operating lease liabilities	$	115,525
Finance Leases
Property, plant and equipment – gross	$	2,354
Accumulated depreciation	(1,034)
Property, plant and equipment – net	$	1,320
Accounts payable	591
Other liabilities	739
Total finance lease liabilities	$	1,330
Weighted Average Remaining Lease Term
Operating leases	10.64 years
Finance leases	2.38 years
Weighted Average Discount Rate
Operating leases	6.14		%
Finance leases	5.20		%

Schedule of New Accounting Pronouncements

The cumulative effect of the changes made to the Condensed Consolidated Balance Sheets for the adoption of the new leasing standard on January 1, 2019 was as follows:

	Balance Sheet accounts prior to new leasing standard adoption adjustments		Adjustments due to the adoption of the new leasing standard		Balance Sheet accounts after the new leasing standard adoption adjustments
ASSETS
Property, plant and equipment – net	$	1,032	$	—	$	1,032
Operating lease right-of-use assets	—		117,921		117,921
Total assets	1,034,626		$	117,921	1,152,547
LIABILITIES AND EQUITY
Current Liabilities:
Accounts payable	$	318	$	—	$	318
Operating lease liabilities – short term	—		24,794		24,794
Total current liabilities	284,724		24,794		309,518
Operating lease liabilities – long term	—		93,127		93,127
Other liabilities	762		—		762
Total liabilities	614,288		117,921		732,209
Total equity	420,338		—		420,338
Total liabilities and equity	1,034,626		$	117,921	1,152,547

Maturities of Finance Lease Liabilities

Maturities of lease liabilities were as follows:

Year Ending December 31,	Operating Leases		Finance Leases
2019 (remainder)	$	16,402	$	332
2020	31,412		610
2021	19,736		374
2022	14,973		99
2023	12,350		—
Thereafter	70,291		—
Total lease payments	165,164		1,415
Less imputed interest	(49,639)		(85)
Total	$	115,525	$	1,330

Maturities of Operating Lease Liabilities

Maturities of lease liabilities were as follows:

Year Ending December 31,	Operating Leases		Finance Leases
2019 (remainder)	$	16,402	$	332
2020	31,412		610
2021	19,736		374
2022	14,973		99
2023	12,350		—
Thereafter	70,291		—
Total lease payments	165,164		1,415
Less imputed interest	(49,639)		(85)
Total	$	115,525	$	1,330

Schedule of Future Minimum Rental Payments for Operating Leases

As previously disclosed in our 2018 Form 10-K and under the previous lease accounting standard, future minimum lease payments for leases having initial or remaining non-cancellable lease terms in excess of one year would have been as follows:

Year Ending December 31,	Operating Leases		Capital Leases
2019	$	36,110	$	239
2020	29,318		212
2021	16,111		131
2022	11,571		89
2023	9,104		—
Thereafter	26,627		—
Total lease payments	$	128,841	$	671

Schedule of Future Minimum Lease Payments for Capital Leases

As previously disclosed in our 2018 Form 10-K and under the previous lease accounting standard, future minimum lease payments for leases having initial or remaining non-cancellable lease terms in excess of one year would have been as follows:

Year Ending December 31,	Operating Leases		Capital Leases
2019	$	36,110	$	239
2020	29,318		212
2021	16,111		131
2022	11,571		89
2023	9,104		—
Thereafter	26,627		—
Total lease payments	$	128,841	$	671

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Derivative and Hedging Instruments (Tables)

6 Months Ended

Jun. 30, 2019

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Derivative Instruments in Statement of Financial Position, Fair Value

	Liability Derivatives
	June 30, 2019			December 31, 2018
	Balance Sheet Classification	Fair Value		Balance Sheet Classification	Fair Value
Derivatives designated as hedging instruments under ASC 815:
Interest Rate Contracts	Accrued liabilities and Other liabilities	(1,661)		Accrued liabilities and Other liabilities	(833)
Total Derivatives		$	(1,661)		$	(833)

Derivative Instruments, Gain (Loss)

The following table summarizes adjustments related to cash flow hedge included in Cash-flow hedges, in the Condensed Consolidated Statements of Comprehensive Income:

	June 30, 2019
Loss on derivative instruments included in Accumulated other comprehensive income at December 31, 2018	$	(833)
Fair value adjustment	(828)
Loss on derivative instruments included in Accumulated other comprehensive income at June 30, 2019	$	(1,661)

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Restructuring (Tables)

6 Months Ended

Jun. 30, 2019

Restructuring and Related Activities [Abstract]

Restructuring and Related Costs

Restructuring costs for the three months ended June 30, 2019 were as follows:

	Three Months Ended June 30, 2019
Write-off of equipment and facility	$	7,131
Facility exit costs	2,686
Employee separations	1,364
Inventory write-downs	1,442
Total restructuring charges	$	12,623

Schedule of Restructuring Reserve by Type of Cost

The following table summarizes the components of restructuring activities and the remaining balances of accrued restructuring charges as of June 30, 2019:

	Employee Separation Benefits		Facility Exit Costs		Total
Accrual balance at December 31, 2018	$	—	$	—	$	—
Charges	1,364		2,686		4,050
Cash payments	—		—		—
Accrual balance at June 30, 2019	$	1,364	$	2,686	$	4,050

The balance of accrued restructuring charges are expected to be settled within the next twelve months.

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Organization, Operations and Basis of Presentation (Details) - USD ($)	3 Months Ended		6 Months Ended	14 Months Ended
	Jun. 30, 2019	Mar. 31, 2019	Jun. 30, 2019	Jun. 30, 2019	Feb. 22, 2019	May 04, 2018
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Liabilities to creditors, payments issued but outstanding		$ 7,700,000	$ 6,700,000
Share repurchase program, maximum amount of shares authorized to be repurchased					$ 75,000,000	$ 75,000,000
Stock repurchased during period (in shares)				2,555,713
Stock repurchased during period, value				$ 77,700,000
Treasury stock acquired, weighted average cost per share (in dollars per share)				$ 30.40
Stock repurchase program, remaining authorized repurchase amount	$ 72,300,000		72,300,000	$ 72,300,000
Cost of Sales
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Insurance recoveries	$ 2,300,000	$ 6,600,000	$ 12,000,000

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Revenues - Narrative (Details)	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019 country customer	Jun. 30, 2018
Concentration Risk [Line Items]
Number of customers | customer			500
Number of countries in which customers are located (more than) | country			40
Length of contract terms			We typically sell to customers under master service agreements, with one- to two-year terms on average, or by purchase orders.
Duration of customer relationship			20 years
10 Largest Customers | Customer Concentration Risk | Revenue from Contract with Customer
Concentration Risk [Line Items]
Concentration risk percentage	47.00%	45.00%	46.00%	45.00%
Shaw Industries Group Inc | Customer Concentration Risk | Revenue from Contract with Customer
Concentration Risk [Line Items]
Concentration risk percentage	19.00%	22.00%	21.00%	22.00%

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Revenues - Disaggregation of Revenue (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Disaggregation of Revenue [Line Items]
Percentage of sales	100.00%	100.00%	100.00%	100.00%
Sales	$ 345,215	$ 400,459	$ 660,110	$ 759,697
United States
Disaggregation of Revenue [Line Items]
Sales	289,551	342,497	547,193	640,145
International
Disaggregation of Revenue [Line Items]
Sales	$ 55,664	$ 57,962	$ 112,917	$ 119,552
Nylon
Disaggregation of Revenue [Line Items]
Percentage of sales	27.00%	27.00%	29.00%	28.00%
Caprolactam
Disaggregation of Revenue [Line Items]
Percentage of sales	20.00%	19.00%	20.00%	18.00%
Ammonium Sulfate Fertilizers
Disaggregation of Revenue [Line Items]
Percentage of sales	27.00%	21.00%	25.00%	20.00%
Chemical Intermediates
Disaggregation of Revenue [Line Items]
Percentage of sales	26.00%	33.00%	26.00%	34.00%

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Revenues - Summary of Deferred Revenue and Customer Advances (Details) $ in Thousands	6 Months Ended
	Jun. 30, 2019 USD ($)
Change in Contract with Customer, Liability [Roll Forward]
Opening balance	$ 22,556
Additional cash advances	1,083
Less amounts recognized in revenues	(20,455)
Ending balance	$ 3,184

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Earnings Per Share - Schedule of Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended				6 Months Ended
	Jun. 30, 2019	Mar. 31, 2019	Jun. 30, 2018	Mar. 31, 2018	Jun. 30, 2019	Jun. 30, 2018
Basic
Net Income	$ 15,346	$ 20,174	$ 28,410	$ 11,593	$ 35,520	$ 40,003
Weighted average common shares outstanding (in shares)	28,162,007		30,481,627		28,489,486	30,485,095
EPS – Basic (in dollars per share)	$ 0.54		$ 0.93		$ 1.25	$ 1.31
Diluted
Dilutive effect of equity awards and other stock-based holdings (in shares)	974,972		823,541		970,663	809,228
Weighted average common shares outstanding (in shares)	29,136,979		31,305,168		29,460,149	31,294,323
EPS – Diluted (in dollars per share)	$ 0.53		$ 0.91		$ 1.21	$ 1.28

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Earnings Per Share - Narrative (Details) - shares shares in Thousands	3 Months Ended
	Jun. 30, 2019	Jun. 30, 2018
Employee Stock Option
Earnings Per Share [Line Items]
Weighted average number of stock options excluded form computation of diluted earnings per share (in shares)	539,054	128,777

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Accounts and Other Receivables - Net (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2019	Dec. 31, 2018
Receivables [Abstract]
Accounts receivables	$ 125,887	$ 166,017
Other	3,901	1,716
Total accounts and other receivables	129,788	167,733
Less – allowance for doubtful accounts	(2,262)	(7,467)
Total accounts and other receivables – net	127,526	$ 160,266
Accounts receivable, allowance for doubtful accounts write-off	$ 5,100

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Inventories (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Inventory Disclosure [Abstract]
Raw materials	$ 46,109	$ 55,002
Work in progress	54,030	46,728
Finished goods	45,333	39,368
Spares and other	24,313	24,555
Inventory gross	169,785	165,653
Reduction to LIFO cost basis	(31,551)	(28,471)
Total inventories – net	$ 138,234	$ 137,182

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Postretirement Benefit Cost - Net Periodic Benefit Cost (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Retirement Benefits [Abstract]
Service costs	$ 1,714	$ 2,001	$ 3,427	$ 4,003
Interest costs	521	469	1,042	938
Expected return on plan assets	(334)	(287)	(668)	(575)
Net periodic benefit cost	$ 1,901	$ 2,183	$ 3,801	$ 4,366

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Postretirement Benefit Cost - Narrative (Details) - USD ($) $ in Millions	3 Months Ended	12 Months Ended
	Mar. 31, 2019	Dec. 31, 2019
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
Pension contributions	$ 0.5
Scenario, Forecast | Minimum
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
Pension contributions		$ 4.0
Scenario, Forecast | Maximum
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
Pension contributions		$ 6.0

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Leases - Narrative (Details)	Jun. 30, 2019
Leases [Abstract]
Leases, term of contract	20 years

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Leases - Components of Lease Expense (Details) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2019
Finance Lease Cost
Amortization of right-of-use asset	$ 157	$ 305
Interest on lease liabilities	17	35
Total finance lease cost	174	340
Operating lease cost	7,931	15,501
Short-term lease cost	4,116	8,397
Total lease cost	$ 12,221	$ 24,238

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Leases - Supplemental Cash Flow Information (Details) $ in Thousands	6 Months Ended
	Jun. 30, 2019 USD ($)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$ 15,295
Operating cash flows from finance leases	30
Financing cash flows from finance leases	2,377
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	9,419
Finance leases	$ 593

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Leases - Supplemental Balance Sheet Information (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Jan. 01, 2019	Dec. 31, 2018
Operating Leases
Operating lease right-of-use assets	$ 115,284	$ 117,921	$ 0
Operating lease liabilities – short-term	26,022	24,794	0
Operating lease liabilities – long-term	89,503	93,127	$ 0
Total operating lease liabilities	115,525
Finance Leases
Property, plant and equipment – gross	2,354
Accumulated depreciation	(1,034)
Property, plant and equipment – net	1,320	$ 1,032
Accounts payable	591
Other liabilities	739
Total finance lease liabilities	$ 1,330
Weighted Average Remaining Lease Term
Operating leases	10 years 7 months 20 days
Finance leases	2 years 4 months 17 days
Weighted Average Discount Rate
Operating leases	6.14%
Finance leases	5.20%

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Leases - Cumulative Effect of Adoption of New Leasing Standard (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Jan. 01, 2019	Dec. 31, 2018
ASSETS
Property, plant and equipment - net			$ 1,032
Property, plant and equipment – net	$ 1,320	$ 1,032
Operating lease right-of-use assets	115,284	117,921	0
Total assets	1,162,886	1,152,547	1,034,626
Current liabilities:
Accounts Payable		318	318
Operating lease liabilities – short-term	26,022	24,794	0
Total current liabilities	253,727	309,518	284,724
Operating lease liabilities – long-term	89,503	93,127	0
Other liabilities		762	762
Total liabilities	742,323	732,209	614,288
Total equity		420,338	420,338
Total liabilities and equity	$ 1,162,886	1,152,547	$ 1,034,626
Accounting Standards Update 2016-02
ASSETS
Property, plant and equipment – net		0
Operating lease right-of-use assets		117,921
Total assets		117,921
Current liabilities:
Accounts Payable		0
Operating lease liabilities – short-term		24,794
Total current liabilities		24,794
Operating lease liabilities – long-term		93,127
Other liabilities		0
Total liabilities		117,921
Total equity		0
Total liabilities and equity		$ 117,921

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Leases - Maturities of Lease Liabilities After Adoption (Details) $ in Thousands	Jun. 30, 2019 USD ($)
Operating Leases
2019 (remainder)	$ 16,402
2020	31,412
2021	19,736
2022	14,973
2023	12,350
Thereafter	70,291
Total lease payments	165,164
Less imputed interest	(49,639)
Total	115,525
Finance Leases
2019 (remainder)	332
2020	610
2021	374
2022	99
2023	0
Thereafter	0
Total lease payments	1,415
Less imputed interest	(85)
Total	$ 1,330

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Leases - Future Minimum Lease Payments Before Adoption (Details) $ in Thousands	Dec. 31, 2018 USD ($)
Operating Leases
2019	$ 36,110
2020	29,318
2021	16,111
2022	11,571
2023	9,104
Thereafter	26,627
Total lease payments	128,841
Capital Leases
2019	239
2020	212
2021	131
2022	89
2023	0
Thereafter	0
Total lease payments	$ 671

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Commitments and Contingencies (Details)	6 Months Ended
	Jun. 30, 2019 customer
Commitments and Contingencies Disclosure [Abstract]
Number of manufacturing locations	3

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Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Income Tax Disclosure [Abstract]
Income taxes	$ 5,280	$ 9,590	$ 12,104	$ 13,156

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Fair Value Measurements (Details) $ in Millions	Jun. 30, 2019 USD ($)
Fair Value, Inputs, Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Royalty agreement, asset, fair value	$ 1.0
Fair Value, Inputs, Level 2 | Interest Rate Contracts
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative liability, fair value	$ (1.7)

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Derivative and Hedging Instruments - Narrative (Details) - USD ($)	6 Months Ended	12 Months Ended
	Jun. 30, 2019	Dec. 31, 2018	Nov. 30, 2018	Nov. 06, 2018
Derivative Instruments, Gain (Loss) [Line Items]
Derivative loss reclassification from AOCI to income	$ 400,000
Customer Concentration Risk | Accounts Receivable | One Customer
Derivative Instruments, Gain (Loss) [Line Items]
Concentration risk percentage	13.00%	22.00%
Interest Rate Swap
Derivative Instruments, Gain (Loss) [Line Items]
Derivative, notional amount			$ 50,000,000	$ 50,000,000
Derivative liability, fair value			$ 0	$ 0
Derivative, amount of hedged item	$ 50,000,000

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Derivative and Hedging Instruments - Balance Sheet Classification (Details) - Designated as Hedging Instrument - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Derivative [Line Items]
Derivative liability, fair value	$ (1,661)	$ (833)
Interest Rate Contracts
Derivative [Line Items]
Derivative liability, fair value	$ (1,661)	$ (833)

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Derivative and Hedging Instruments - Adjustments Related to Cash Flow Hedges on the Comprehensive Income Statement (Details) - Accumulated Gain (Loss), Net, Cash Flow Hedge, Parent $ in Thousands	6 Months Ended
	Jun. 30, 2019 USD ($)
AOCI Attributable To Parent, Before Tax [Roll Forward]
Loss on derivative instruments included in Accumulated other comprehensive income at December 31, 2018	$ (833)
Fair value adjustment	(828)
Loss on derivative instruments included in Accumulated other comprehensive income at June 30, 2019	$ (1,661)

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Restructuring - Restructuring Costs (Details) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2019	Jun. 30, 2018
Restructuring Cost and Reserve [Line Items]
Total restructuring charges	$ 12,623	$ 12,623	$ 0
Write-off of equipment and facility
Restructuring Cost and Reserve [Line Items]
Total restructuring charges	7,131
Employee separations
Restructuring Cost and Reserve [Line Items]
Total restructuring charges	2,686
Facility exit costs
Restructuring Cost and Reserve [Line Items]
Total restructuring charges	1,364
Inventory write-downs
Restructuring Cost and Reserve [Line Items]
Total restructuring charges	$ 1,442

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Restructuring - Components of Restructuring Activities (Details) $ in Thousands	6 Months Ended
	Jun. 30, 2019 USD ($)
Restructuring Reserve [Roll Forward]
Accrual balance at December 31, 2018	$ 0
Restructuring charges	4,050
Cash payments	0
Accrual balance at June 30, 2019	4,050
Employee separations
Restructuring Reserve [Roll Forward]
Accrual balance at December 31, 2018	0
Restructuring charges	1,364
Cash payments	0
Accrual balance at June 30, 2019	1,364
Facility exit costs
Restructuring Reserve [Roll Forward]
Accrual balance at December 31, 2018	0
Restructuring charges	2,686
Cash payments	0
Accrual balance at June 30, 2019	$ 2,686

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Subsequent Events (Details) - Interest Rate Swap - USD ($)	Jul. 15, 2019	Jun. 30, 2019	Nov. 30, 2018	Nov. 06, 2018
Derivative [Line Items]
Derivative, notional amount			$ 50,000,000	$ 50,000,000
Derivative liability, fair value			$ 0	$ 0
Derivative, amount of hedged item		$ 50,000,000
Subsequent Event
Derivative [Line Items]
Derivative, notional amount	$ 50,000,000
Derivative, amount of hedged item	$ 50,000,000