(Mark One) | |||||
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
| ||
(Exact name of registrant as specified in its charter) |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
(Address of principal executive offices) | (Zip Code) |
Securities registered pursuant to Section 12(b) of the Act: | ||||||||
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
Accelerated filer o | Non-accelerated filer o | Smaller reporting company | |||||||||
Emerging growth company |
Condensed Consolidated Statements of Operations for the three months ended March 31, 2022 and 2021 (unaudited) | ||||||||
Condensed Consolidated Statements of Comprehensive Income for the three months ended March 31, 2022 and 2021 (unaudited) | ||||||||
Condensed Consolidated Balance Sheets as of March 31, 2022 and December 31, 2021 (unaudited) | ||||||||
Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2022 and 2021 (unaudited) | ||||||||
Condensed Consolidated Statements of Stockholders' Equity for the three months ended March 31, 2022 and 2021 (unaudited) | ||||||||
Three Months Ended March 31, | |||||||||||
2022 | 2021 | ||||||||||
Sales | $ | $ | |||||||||
Costs, expenses and other: | |||||||||||
Costs of goods sold | |||||||||||
Selling, general and administrative expenses | |||||||||||
Interest expense, net | |||||||||||
Other non-operating (income) expense, net | ( | ||||||||||
Total costs, expenses and other | |||||||||||
Income before taxes | |||||||||||
Income tax expense | |||||||||||
Net income | $ | $ | |||||||||
Earnings per common share | |||||||||||
Basic | $ | $ | |||||||||
Diluted | $ | $ | |||||||||
Weighted average common shares outstanding | |||||||||||
Basic | |||||||||||
Diluted |
Three Months Ended March 31, | |||||||||||
2022 | 2021 | ||||||||||
Net income | $ | $ | |||||||||
Foreign exchange translation adjustment | ( | ||||||||||
Cash-flow hedges | |||||||||||
Other comprehensive income (loss), net of tax | |||||||||||
Comprehensive income | $ | $ |
March 31, 2022 | December 31, 2021 | ||||||||||
ASSETS | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Accounts and other receivables – net | |||||||||||
Inventories – net | |||||||||||
Other current assets | |||||||||||
Total current assets | |||||||||||
Property, plant and equipment – net | |||||||||||
Operating lease right-of-use assets | |||||||||||
Goodwill | |||||||||||
Intangible assets | |||||||||||
Other assets | |||||||||||
Total assets | $ | $ | |||||||||
LIABILITIES | |||||||||||
Current liabilities: | |||||||||||
Accounts payable | $ | $ | |||||||||
Accrued liabilities | |||||||||||
Income taxes payable | |||||||||||
Operating lease liabilities – short-term | |||||||||||
Deferred income and customer advances | |||||||||||
Total current liabilities | |||||||||||
Deferred income taxes | |||||||||||
Operating lease liabilities – long-term | |||||||||||
Line of credit – long-term | |||||||||||
Postretirement benefit obligations | |||||||||||
Other liabilities | |||||||||||
Total liabilities | |||||||||||
COMMITMENTS AND CONTINGENCIES (Note 9) | |||||||||||
STOCKHOLDERS' EQUITY | |||||||||||
Common stock, par value $ | |||||||||||
Preferred stock, par value $ | |||||||||||
Treasury stock at par ( | ( | ( | |||||||||
Additional paid-in capital | |||||||||||
Retained earnings | |||||||||||
Accumulated other comprehensive loss | ( | ( | |||||||||
Total stockholders' equity | |||||||||||
Total liabilities and stockholders' equity | $ | $ |
Three Months Ended March 31, | |||||||||||
2022 | 2021 | ||||||||||
Cash flows from operating activities: | |||||||||||
Net income | $ | $ | |||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
Depreciation and amortization | |||||||||||
Loss on disposal of assets | |||||||||||
Deferred income taxes | ( | ||||||||||
Stock-based compensation | |||||||||||
Accretion of deferred financing fees | |||||||||||
Changes in assets and liabilities, net of business acquisitions: | |||||||||||
Accounts and other receivables | ( | ( | |||||||||
Inventories | ( | ||||||||||
Accounts payable | ( | ( | |||||||||
Income taxes payable | |||||||||||
Accrued liabilities | ( | ||||||||||
Deferred income and customer advances | ( | ( | |||||||||
Other assets and liabilities | ( | ||||||||||
Net cash provided by operating activities | |||||||||||
Cash flows from investing activities: | |||||||||||
Expenditures for property, plant and equipment | ( | ( | |||||||||
Acquisition of business | ( | ( | |||||||||
Other investing activities | ( | ( | |||||||||
Net cash used for investing activities | ( | ( | |||||||||
Cash flows from financing activities: | |||||||||||
Borrowings from line of credit | |||||||||||
Payments of line of credit | ( | ( | |||||||||
Principal payments of finance leases | ( | ( | |||||||||
Dividend payments | ( | ||||||||||
Purchase of treasury stock | ( | ( | |||||||||
Issuance of common stock | |||||||||||
Net cash provided by (used for) financing activities | ( | ||||||||||
Net change in cash and cash equivalents | |||||||||||
Cash and cash equivalents at beginning of period | |||||||||||
Cash and cash equivalents at the end of period | $ | $ | |||||||||
Supplemental non-cash investing activities: | |||||||||||
Capital expenditures included in accounts payable | $ | $ | |||||||||
Supplemental cash activities: | |||||||||||
Cash paid for interest | $ | $ | |||||||||
Cash paid for income taxes | $ | $ |
Common Stock | Additional Paid-In Capital | Retained Earnings | Treasury Stock | Accumulated Other Comprehensive Income (Loss) | Total Equity | ||||||||||||||||||||||||||||||||||||
Shares | Amount | ||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2021 | $ | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||||||
Net Income | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Comprehensive income | |||||||||||||||||||||||||||||||||||||||||
Foreign exchange translation adjustments | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Cash-flow hedges | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Pension obligation adjustments | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
Other comprehensive income (loss), net of tax | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Issuance of common stock | — | — | — | ||||||||||||||||||||||||||||||||||||||
Purchase of treasury stock ( | — | — | ( | — | ( | — | ( | ||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Dividends | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||
Balance at March 31, 2022 | $ | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||||||
Common Stock | Additional Paid-In Capital | Retained Earnings | Treasury Stock | Accumulated Other Comprehensive Income (Loss) | Total Equity | ||||||||||||||||||||||||||||||||||||
Shares | Amount | ||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2020 | $ | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||||||
Net Income | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Comprehensive income | |||||||||||||||||||||||||||||||||||||||||
Foreign exchange translation adjustments | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||
Cash-flow hedges | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Pension obligation adjustments | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
Other comprehensive income (loss), net of tax | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Issuance of common stock | — | — | — | — | |||||||||||||||||||||||||||||||||||||
Purchase of treasury stock ( | — | — | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Balance at March 31, 2021 | $ | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||||||
Three Months Ended March 31, | |||||||||||||||||||||||
2022 | 2021 | ||||||||||||||||||||||
Nylon | $ | $ | |||||||||||||||||||||
Caprolactam | |||||||||||||||||||||||
Chemical Intermediates | |||||||||||||||||||||||
Ammonium Sulfate | |||||||||||||||||||||||
$ | $ |
Three Months Ended March 31, | |||||||||||||||||||||||
2022 | 2021 | ||||||||||||||||||||||
United States | $ | % | $ | % | |||||||||||||||||||
International | % | % | |||||||||||||||||||||
Total | $ | % | $ | % |
Opening balance January 1, 2022 | $ | ||||
Additional cash advances | |||||
Less amounts recognized in revenues | ( | ||||
Ending balance March 31, 2022 | $ |
Three Months Ended March 31, | |||||||||||
2022 | 2021 | ||||||||||
Basic | |||||||||||
Net income | $ | $ | |||||||||
Weighted average common shares outstanding | |||||||||||
EPS – Basic | $ | $ | |||||||||
Diluted | |||||||||||
Dilutive effect of equity awards and other stock-based holdings | |||||||||||
Weighted average common shares outstanding | |||||||||||
EPS – Diluted | $ | $ |
Three Months Ended March 31, | |||||||||||
2022 | 2021 | ||||||||||
Options and stock equivalents |
Three Months Ended March 31, | |||||||||||
2022 | 2021 | ||||||||||
Cash dividends declared per share | $ | $ | |||||||||
Aggregate dividends paid to shareholders | $ | $ |
March 31, 2022 | December 31, 2021 | ||||||||||
Accounts receivables | $ | $ | |||||||||
Other | |||||||||||
Total accounts and other receivables | |||||||||||
Less – allowance for doubtful accounts | ( | ( | |||||||||
Total accounts and other receivables – net | $ | $ |
March 31, 2022 | December 31, 2021 | ||||||||||
Raw materials | $ | $ | |||||||||
Work in progress | |||||||||||
Finished goods | |||||||||||
Spares and other | |||||||||||
Reduction to LIFO cost basis | ( | ( | |||||||||
Total inventories | $ | $ |
Three Months Ended March 31, | |||||||||||
2022 | 2021 | ||||||||||
Finance lease cost: | |||||||||||
Amortization of right-of-use asset | $ | $ | |||||||||
Interest on lease liabilities | |||||||||||
Total finance lease cost | |||||||||||
Operating lease cost | |||||||||||
Short-term lease cost | |||||||||||
Total lease cost | $ | $ |
Total | |||||||||||
Balance at | December 31, 2021 | $ | |||||||||
Acquisition of U.S. Amines | |||||||||||
Balance at | March 31, 2022 | $ |
March 31, 2022 | December 31, 2021 | ||||||||||||||||||||||||||||||||||
Gross Carrying Amount | Accumulated Amortization | Net Book Value | Gross Carrying Amount | Accumulated Amortization | Net Book Value | ||||||||||||||||||||||||||||||
Customer relationships | $ | $ | ( | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||
Licenses | ( | ( | |||||||||||||||||||||||||||||||||
Trade names | ( | ||||||||||||||||||||||||||||||||||
Total | $ | $ | ( | $ | $ | $ | ( | $ |
Liability Derivatives | ||||||||||||||||||||||||||
March 31, 2022 | December 31, 2021 | |||||||||||||||||||||||||
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 | $ | ( | Accrued liabilities and Other liabilities | $ | ( | ||||||||||||||||||||
Total Derivatives | $ | ( | $ | ( |
March 31, 2022 | ||||||||||||||
Loss on derivative instruments included in Accumulated other comprehensive loss at December 31, 2021 | $ | ( | ||||||||||||
Fair value adjustment | ||||||||||||||
Loss on derivative instruments included in Accumulated other comprehensive loss at March 31, 2022 | $ | ( |
Amount of Loss Recognized in Earnings | |||||||||||
Three Months Ended March 31, | |||||||||||
2022 | 2021 | ||||||||||
Derivatives: | |||||||||||
Interest Rate Contracts | $ | $ | |||||||||
Total Derivatives | $ | $ |
U.S. Amines (February 2022 - Preliminary) | CIS (January 2021) | ||||||||||
Cash | $ | $ | |||||||||
Accounts receivable | |||||||||||
Inventories | |||||||||||
Other current assets | |||||||||||
Property, plant and equipment | |||||||||||
Intangible assets | |||||||||||
Accounts payable | ( | ( | |||||||||
Accrued liabilities | ( | ||||||||||
Deferred income taxes | ( | ||||||||||
Net tangible and intangible assets | |||||||||||
Goodwill | |||||||||||
Total purchase price | $ | $ | |||||||||
Total purchase price | $ | $ | |||||||||
Less: Cash acquired | ( | ||||||||||
Total purchase price, net of cash received | |||||||||||
Estimated working capital adjustment due from seller | |||||||||||
Net cash paid | $ | $ | |||||||||
Goodwill deductible for tax purposes | $ | $ |
Three Months Ended March 31, | |||||||||||
2022 | 2021 | ||||||||||
Sales | $ | 479,073 | $ | 376,383 | |||||||
% change compared with prior year period | 27.3% |
Three Months Ended March 31, 2022 | |||||
Volume | (4.0)% | ||||
Price | 29.4% | ||||
Acquisition | 1.9% | ||||
27.3% |
Three Months Ended March 31, | |||||||||||
2022 | 2021 | ||||||||||
Costs of goods sold | $ | 375,646 | $ | 317,899 | |||||||
% change compared with prior year period | 18.2% | ||||||||||
Gross Margin percentage | 21.6% | 15.5% |
Three Months Ended March 31, | |||||||||||
2022 | 2021 | ||||||||||
Selling, general and administrative expenses | $ | 21,210 | $ | 19,308 | |||||||
Percentage of Sales | 4.4% | 5.1% |
Three Months Ended March 31, | |||||||||||
2022 | 2021 | ||||||||||
Income tax expense | $ | 19,184 | $ | 9,271 | |||||||
Effective tax rate | 23.3% | 24.8% |
Three Months Ended March 31, | |||||||||||
2022 | 2021 | ||||||||||
Net income | $ | 63,073 | $ | 28,131 |
Three Months Ended March 31, | |||||||||||
2022 | 2021 | ||||||||||
Net income | $ | 63,073 | $ | 28,131 | |||||||
Non-cash stock-based compensation | 3,374 | 2,363 | |||||||||
Non-recurring, unusual or extraordinary expenses | — | — | |||||||||
Non-cash amortization from acquisitions | 201 | 44 | |||||||||
One-time M&A costs | 277 | 172 | |||||||||
Benefit from income taxes relating to reconciling items | (556) | (408) | |||||||||
Adjusted Net Income (non-GAAP) | 66,369 | 30,302 | |||||||||
Interest expense, net | 563 | 1,544 | |||||||||
Income tax expense - adjusted | 19,740 | 9,679 | |||||||||
Depreciation and amortization - adjusted | 16,491 | 16,060 | |||||||||
Adjusted EBITDA (non-GAAP) | 103,163 | 57,585 | |||||||||
Sales | $ | 479,073 | $ | 376,383 | |||||||
Adjusted EBITDA Margin* (non-GAAP) | 21.5% | 15.3% | |||||||||
Three Months Ended March 31, | ||||||||||||||
2022 | 2021 | |||||||||||||
Net Income | $ | 63,073 | $ | 28,131 | ||||||||||
Adjusted Net Income (non-GAAP) | 66,369 | 30,302 | ||||||||||||
Weighted-average number of common shares outstanding - basic | 28,199,871 | 28,093,764 | ||||||||||||
Dilutive effect of equity awards and other stock-based holdings | 1,171,180 | 647,302 | ||||||||||||
Weighted-average number of common shares outstanding - diluted | 29,371,051 | 28,741,066 | ||||||||||||
EPS - Basic | $ | 2.24 | $ | 1.00 | ||||||||||
EPS - Diluted | $ | 2.15 | $ | 0.98 | ||||||||||
Adjusted EPS - Basic (non-GAAP) | $ | 2.35 | $ | 1.08 | ||||||||||
Adjusted EPS - Diluted (non-GAAP) | $ | 2.26 | $ | 1.05 |
Three Months Ended March 31, | |||||||||||
2022 | 2021 | ||||||||||
Cash provided by (used for): | |||||||||||
Operating activities | $ | 49,162 | $ | 57,090 | |||||||
Investing activities | (119,904) | (23,931) | |||||||||
Financing activities | 74,948 | (29,641) | |||||||||
Net change in cash and cash equivalents | $ | 4,206 | $ | 3,518 |
Three Months Ended March 31, 2022 | |||||
Capital expenditures in Accounts payable at December 31, 2021 | $ | 11,720 | |||
Purchases of property, plant and equipment | 16,634 | ||||
Less: Capital expenditures in Accounts payable at March 31, 2022 | (7,335) | ||||
Cash paid for capital expenditures | $ | 21,019 |
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 | ||||||||||||||||||||||
January 2022 | — | $ | — | — | $ | 59,581,679 | ||||||||||||||||||||
February 2022 | 73,368 | 37.52 | 73,368 | 56,828,553 | ||||||||||||||||||||||
March 2022 | (1) | 108,168 | 39.35 | 50,200 | 54,835,540 | |||||||||||||||||||||
Total | 181,536 | $ | 38.61 | 123,568 |
Exhibit | Description | |||||||
3.1 | ||||||||
3.2 | ||||||||
31.1 | ||||||||
31.2 | ||||||||
32.1 | ||||||||
32.2 | ||||||||
101.INS | Inline 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 | Inline XBRL Taxonomy Extension Schema Document | |||||||
101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |||||||
101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | |||||||
101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | |||||||
101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |||||||
104 | Cover Page Interactive Data File (formatted as Inline XBRL and included in Exhibit 101) | |||||||
ADVANSIX INC. | |||||||||||
Date: May 6, 2022 | By: | /s/ Michael Preston | |||||||||
Michael Preston | |||||||||||
Senior Vice President and Chief Financial Officer |
/s/ Erin N. Kane | ||||||||
Erin N. Kane | ||||||||
President and Chief Executive Officer |
/s/ Michael Preston | ||||||||
Michael Preston | ||||||||
Chief Financial Officer |
/s/ Erin N. Kane | |||||
Erin N. Kane | |||||
President and Chief Executive Officer |
/s/ Michael Preston | |||||
Michael Preston | |||||
Chief Financial Officer |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
|
Income Statement [Abstract] | ||
Sales | $ 479,073 | $ 376,383 |
Costs, expenses and other: | ||
Costs of goods sold | 375,646 | 317,899 |
Selling, general and administrative expenses | 21,210 | 19,308 |
Interest expense, net | 563 | 1,544 |
Other non-operating (income) expense, net | (603) | 230 |
Total costs, expenses and other | 396,816 | 338,981 |
Income before taxes | 82,257 | 37,402 |
Income tax expense | 19,184 | 9,271 |
Net income | $ 63,073 | $ 28,131 |
Earnings per common share | ||
Basic (in dollars per share) | $ 2.24 | $ 1.00 |
Diluted (in dollars per share) | $ 2.15 | $ 0.98 |
Weighted average common shares outstanding | ||
Basic (in shares) | 28,199,871 | 28,093,764 |
Diluted (in shares) | 29,371,051 | 28,741,066 |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
|
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 63,073 | $ 28,131 |
Foreign exchange translation adjustment | 57 | (70) |
Cash-flow hedges | 512 | 483 |
Other comprehensive income (loss), net of tax | 569 | 413 |
Comprehensive income | $ 63,642 | $ 28,544 |
CONDENSED CONSOLIDATED BALANCE SHEETS (Parentheticals) - $ / shares |
Mar. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
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) | 31,900,305 | 31,755,430 |
Common stock, shares outstanding (in shares) | 28,103,293 | 28,139,954 |
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) | 3,797,012 | 3,615,476 |
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Parenthetical) - shares |
3 Months Ended | 37 Months Ended | |
---|---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
Mar. 31, 2022 |
|
Statement of Stockholders' Equity [Abstract] | |||
Stock repurchased during period (in shares) | 181,536 | 15,371 | 3,797,012 |
Organization, Operations and Basis of Presentation |
3 Months Ended |
---|---|
Mar. 31, 2022 | |
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") plays a critical role in global supply chains, innovating and delivering essential products for our customers in a wide variety of end markets and applications that touch people’s lives, such as building and construction, fertilizers, agrochemicals, plastics, solvents, packaging, paints, coatings, adhesives and electronics. Our reliable and sustainable supply of quality products emerges from the integrated value chain of our five U.S.-based manufacturing facilities. AdvanSix strives to deliver best-in-class customer experiences and differentiated products in the industries of nylon solutions, chemical intermediates and plant nutrients, guided by our core values of Safety, Integrity, Accountability and Respect. COVID-19 Since early 2020, the novel coronavirus (COVID-19) has continued to spread, with confirmed cases worldwide, and with certain jurisdictions experiencing resurgences, including as a result of variant strains. The pandemic and related containment measures, such as travel bans and restrictions, shelter in place orders and business shutdowns, have had a substantial impact on businesses around the world and on global, regional and national economies, including disruptions to supply chains, volatility in demand, production and sales across most industries, volatility within global financial markets, inflationary pressures in commodity pricing and an increasingly dynamic workforce environment. The continuously evolving nature of this pandemic and the pace and shape of a full recovery may continue to have an impact on the United States and global economies. The Company’s Condensed Consolidated Financial Statements reflect estimates and assumptions made by management that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the Condensed Consolidated Financial Statements and reported amounts of revenue and expenses during the reporting periods presented. The Company continues to consider the impact of COVID-19 on the estimates and assumptions used for the financial statements. As previously disclosed, the Company experienced a material impact on its second quarter 2020 results of operations associated with lower demand, particularly in nylon, caprolactam and phenol, and a decrease in overall sales volume related to global markets and the economic impact of COVID-19. Starting in the second half of 2020, and through the first quarter of 2022, demand improved to pre-COVID-19 levels with states, regions and countries in various phases of re-opening and continued administration of vaccines for COVID-19. The Company will continue to monitor developments and execute our operational and safety mitigation plans as previously disclosed. As the situation surrounding COVID-19 remains fluid and unpredictable, the Company cannot reasonably estimate with any degree of certainty the future impact COVID-19 may have on the Company’s results of operations, financial position, and liquidity. 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 March 31, 2022, and its results of operations for the three months ended March 31, 2022 and 2021 and cash flows for the three months ended March 31, 2022 and 2021. The year-end Condensed Consolidated Balance Sheet data were derived from audited financial statements but does not include all disclosures required by U.S. GAAP. The results of operations of any interim period are not necessarily indicative of the results of operations to be expected for the full fiscal year. These financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 (the "2021 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 months ended March 31, 2022 and 2021 were April 2, 2022 and April 3, 2021, respectively. Liabilities to creditors to whom we have issued checks that remained outstanding at March 31, 2022 and December 31, 2021 aggregated to $2.2 million and $4.5 million, respectively, and were included in Cash and cash equivalents and Accounts payable in the Condensed Consolidated Balance Sheets. On May 4, 2018, the Company announced that its Board of Directors (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 in accordance with Rule 10b-18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), including through the use of trading plans intended to qualify under Rule 10b5-1 of the Exchange Act. The size and timing of these repurchases will depend on pricing, market and economic conditions, legal and contractual requirements and other factors. The share repurchase program has no expiration date and may be modified, suspended or discontinued at any time. The par value of the shares repurchased is applied to Treasury stock and the excess of the purchase price over par value is applied to Additional paid-in capital. During the first quarter of 2022, the Company repurchased 181,536 shares of common stock, including 57,968 shares to cover tax withholding obligations in connection with the vesting of awards, for an aggregate of $7.0 million at a weighted average market price of $38.61 per share. As of March 31, 2022, the Company had repurchased 3,797,012 shares of common stock, including 583,682 shares withheld to cover tax withholding obligations in connection with the vesting of awards, for an aggregate of $109.4 million at a weighted average market price of $28.81 per share. As of March 31, 2022, $54.8 million remained available for share repurchases under the current authorization. During the period April 1, 2022 through April 29, 2022, no additional shares were repurchased under the currently authorized repurchase program.
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Recent Accounting Pronouncements |
3 Months Ended |
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Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
Recent Accounting Pronouncements | 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”). Any ASUs not currently adopted 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.
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Revenues |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenues | Revenues Revenue Recognition We serve approximately 400 customers annually in approximately 50 countries and across a wide variety of industries. For the three months ended March 31, 2022 and 2021, the Company's ten largest customers accounted for approximately 37% and 38% of total sales, respectively. We typically sell to customers under master service agreements, with primarily one-year terms, or by purchase orders. We have historically experienced low customer turnover and have long-standing customer relationships, which span decades. Our largest customer is Shaw Industries Group, Inc. (“Shaw”), a significant consumer of caprolactam and Nylon 6 resin, to whom we sell under a long-term agreement. For the three months ended March 31, 2022 and 2021, the Company's sales to Shaw were 9% and 12% of our total sales, respectively. The Company's revenue by product line, and related approximate percentage of total sales, for the three months ended March 31, 2022 and 2021 were as follows:
The Company's revenues by geographic area, and related approximate percentage of total sales, for the three months ended March 31, 2022 and 2021 were as follows:
Deferred Income and Customer Advances The Company defers revenues when cash payments are received in advance of our performance. Below is a roll-forward of Deferred income and customer advances for the three months ended March 31, 2022:
The Company expects to recognize as revenue the March 31, 2022 ending balance of Deferred income and customer advances within one year or less.
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Earnings Per Share |
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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 months ended March 31, 2022 and 2021 were as follows:
Diluted EPS is computed based upon the weighted average number of common shares outstanding for the period plus the dilutive effect of common stock equivalents using the treasury stock method and the average market price of our common stock for the period. The diluted EPS calculations exclude the effect of stock options when the options’ assumed proceeds exceed the average market price of the common shares during the period. The anti-dilutive common stock equivalents outstanding at the three months ended March 31, 2022 and 2021 were as follows:
Dividend activity for the three months ended March 31, 2022 and 2021 was as follows:
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Accounts and Other Receivables – Net |
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Accounts and Other Receivables – Net | Accounts and Other Receivables – Net
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Inventories |
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Inventories | Inventories
Substantially all of the Company’s inventories at March 31, 2022 and December 31, 2021 are valued at the lower of cost or market using the last-in, first-out (“LIFO”) method. However, approximately 9% was valued at average cost using the first-in, first-out (“FIFO”) method at March 31, 2022. The excess of replacement cost over the carrying value of total inventories subject to LIFO was $72.5 million and $29.4 million at March 31, 2022 and December 31, 2021, respectively.
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Leases |
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Leases | LeasesWe determine if an arrangement is a lease at inception. Operating leases are included in Operating lease right-of-use assets ("ROU"), Operating lease liabilities – short-term, and Operating lease liabilities – long-term in our Condensed Consolidated Balance Sheets. Finance leases are included in Property, plant and equipment – net, Accounts payable, and Other liabilities in our Condensed Consolidated Balance Sheets. The components of lease expense were as follows:
As of March 31, 2022, we have additional finance leases that have not yet commenced for approximately $0.5 million. These leases will commence during 2022 with lease terms of up to 5 years.
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Leases | LeasesWe determine if an arrangement is a lease at inception. Operating leases are included in Operating lease right-of-use assets ("ROU"), Operating lease liabilities – short-term, and Operating lease liabilities – long-term in our Condensed Consolidated Balance Sheets. Finance leases are included in Property, plant and equipment – net, Accounts payable, and Other liabilities in our Condensed Consolidated Balance Sheets. The components of lease expense were as follows:
As of March 31, 2022, we have additional finance leases that have not yet commenced for approximately $0.5 million. These leases will commence during 2022 with lease terms of up to 5 years.
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Goodwill and Intangible Assets |
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Goodwill and Intangible Assets | Goodwill and Intangible Assets Intangible assets with finite lives acquired through a business combination are recorded at fair value, less accumulated amortization. Customer relationships and trade-names are amortized on a straight-line basis over their expected useful lives of 15 to 20 years and 5 years, respectively. Goodwill The change in the carrying amount of goodwill was as follows:
Finite-Lived Intangible Assets Intangible assets subject to amortization were as follows:
For the three months ended March 31, 2022 and March 31, 2021, the Company recorded amortization expense on intangible assets of $0.4 million and $0.3 million, respectively.
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Commitments and Contingencies |
3 Months Ended |
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Mar. 31, 2022 | |
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 may involve substantial amounts claimed, arising out of the conduct of the Company or other third-parties in the normal and ordinary course of business. A liability is recognized for any contingency that is probable of occurrence and reasonably estimable. The Company continually assesses the likelihood of adverse judgments or outcomes in these matters, as well as potential ranges of possible losses, based on an analysis of each matter with the assistance of legal counsel and, if applicable, other experts.Given the uncertainty inherent in such lawsuits, investigations and disputes, the Company does not believe it is possible to develop estimates of reasonably possible loss in excess of current accruals for these matters. Considering the Company’s past experience and existing accruals, the Company does not expect the outcome of these matters, either individually or in the aggregate, to have a material adverse effect on the Company’s consolidated financial position or results of operations. Potential liabilities are subject to change due to new developments, changes in settlement strategy or the impact of evidentiary requirements, which could cause the Company to pay damage awards or settlements (or become subject to equitable remedies) that could have a material adverse effect on the Company’s consolidated results of operations, balance sheet and/or operating cash flows in the periods recognized or paid. We assumed from Honeywell 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 manufacturing locations used in our current operations, including any cleanup or other liabilities related to any contamination that may have occurred at such locations in the past. Honeywell retained all HSE liabilities related to former business locations or the operation of our former businesses. Although we have ongoing environmental remedial obligations at certain of our facilities, in the past three years, the associated remediation costs have not been material, and we do not expect our known remediation costs to have a material adverse effect on the Company's consolidated financial position or results of operations. |
Income Taxes |
3 Months Ended |
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Mar. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The provision for income taxes was $19.2 million and $9.3 million for the three months ended March 31, 2022 and 2021, respectively, resulting in an effective tax rate of 23.3% and 24.8%, respectively. The Company’s provision for income taxes in interim periods is computed by applying an estimated annual effective tax rate against Income (Loss) before taxes for the period in addition to recording any tax effects of discrete items for the quarter. The Company’s estimated annual effective tax rate applied against the three months ended March 31, 2022 and 2021 differed from the U.S. federal statutory rate, due primarily to state taxes and executive compensation deduction limitations which generally increase the tax rate, partially offset by tax credits and the foreign-derived intangible income deduction which generally decrease the tax rate. In February 2022, the Company acquired the stock of U.S. Amines, Ltd. Under purchase accounting rules, a net deferred tax liability of approximately $12.2 million was recorded in the quarter related to the adjustment of the acquired assets and liabilities to fair value. See Note 13 "Acquisitions" for further details. We are subject to income taxes in the United States and to a lesser extent several foreign jurisdictions. Changes to income tax laws and regulations, or the interpretation of such laws, in any of the jurisdictions in which we operate could increase our effective tax rate and reduce our cash flows from operating activities. The current U.S. administration has released various draft tax reform proposals that, if enacted, would generally increase U.S. federal income taxes on corporations. These proposals, if implemented, could have an unfavorable effect on our business, results of operations and financial condition. As such, we continue to monitor these legislative proposals to evaluate the impact on our business.
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Fair Value Measurements |
3 Months Ended |
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Mar. 31, 2022 | |
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. In July 2019, the Company entered into an interest rate swap transaction related to its credit agreement. The fair value of the interest rate swap at March 31, 2022 was a loss of approximately $0.04 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 which could result in such assets being measured at fair value. Goodwill must be evaluated at least annually. Our annual evaluation occurred on March 31, 2022 and we concluded that an impairment for goodwill did not occur.
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Derivative and Hedging Instruments |
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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 and interest 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 did not have any customers with significant concentrations of trade accounts receivable – net at March 31, 2022 or December 31, 2021. Allowance for doubtful accounts is calculated based upon the Company's estimate of expected credit losses over the life of exposure based upon both historical information as well as future expected losses. 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 March 31, 2022 and 2021, we had no financial contracts related to forward commodity agreements. Interest Rate Risk Management – The Company has entered into one interest rate swap agreement for a total notional amount of $50 million to exchange floating for fixed rate interest payments for our LIBOR-based borrowings. The interest rate swap had a fair value of zero at inception and was effective July 31, 2019 with a maturity date of February 21, 2023. In accordance with ASC 815, the Company designated the interest rate swap as a cash flow hedge of floating-rate borrowings. The interest rate swap 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. The 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.
The following table summarizes adjustments related to cash flow hedge included in Cash-flow hedges, in the Condensed Consolidated Statements of Comprehensive Income:
At March 31, 2022, the Company expects to reclassify approximately $0.04 million of net losses on derivative instruments from Accumulated other comprehensive income ("AOCI") to earnings during the next 12 months due to the payment of variable interest associated with the floating rate debt with the remainder recognized in future periods through the expiration date. The following table summarizes the reclassification of net losses on derivative instruments from AOCI into earnings:
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Acquisitions |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Business Combination and Asset Acquisition [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquisitions | Acquisitions In February 2022, the Company acquired U.S. Amines, Ltd. ("U.S. Amines"), a leading North American producer of alkyl and specialty amines serving high-value end markets such as agrochemicals and pharmaceuticals for an estimated purchase price of approximately $98 million, net of cash acquired. U.S. Amines employs approximately 50 people in the United States at manufacturing facilities in Bucks, AL and Portsmouth, VA. In accordance with ASC 805, this transaction has been accounted for as a business combination. The Company used its best estimates and assumptions for items including, but not limited to, corporate name recognition, strong, long-lasting customer relationships and potential revenue growth from existing customers to assign fair value to the tangible and identifiable intangible assets acquired and liabilities assumed at the acquisition date based on the information that was available as of the acquisition date. The transaction resulted in the Company acquiring tangible assets and finite-lived intangible assets, comprised of customer relationships (approximately $30 million) and trademarks (approximately $1 million) which reflect the value of the benefit derived from incremental revenue and related cash flows as a direct result of the customer relationships and name brand. These intangible assets are being amortized on a straight-line basis over their estimated useful lives of 20 years and 5 years, respectively. The residual amount of the purchase price in excess of the value of the tangible and definite-lived intangible assets was allocated to goodwill. Factors considered when identifying goodwill included, but are not limited to, a complementary business model and formula pricing mechanisms with a business that is adjacent to our ammonium sulfate adjuvant and solvent businesses, the enhancement of the Company’s value chain through internal supply of products and raw materials, a new unique platform in the agrochemicals space as well as a number of opportunities to support further penetration into high-value applications. The U.S. Amines acquisition was not significant to our Condensed Consolidated Financial Statements, therefore, pro forma and post-acquisition results of operations have not been presented. The preliminary measurements of fair value set forth herein are subject to change and such changes could be material. The Company expects to finalize the valuation as soon as practicable, but no later than one year from the acquisition date. In January 2021, the Company acquired certain assets associated with ammonium sulfate packaging, warehousing and logistics services in Virginia from Commonwealth Industrial Services, Inc. ("CIS") for approximately $9.5 million. This acquisition enables the Company to expand its product offerings by directly supplying packaged ammonium sulfate to customers, primarily in North and South America. It diversifies and optimizes our product offerings to include spray-grade adjuvant to support crop protection and products for industrial use. The Company also expects the addition of packaging and warehousing capabilities to bolster logistics and operational efficiency across its Richmond, Virginia area plants. The transaction resulted in the Company acquiring tangible assets and a finite-lived intangible asset, comprised of customer relationships which reflects the value of the benefit derived from incremental revenue and related cash flows as a direct result of the customer relationships. This intangible asset is being amortized on a straight-line basis over its estimated useful life of 15 years. The residual amount of the purchase price in excess of the value of the tangible and definite-lived intangible assets was allocated to goodwill The following table summarizes the allocation of the purchase price consideration as of the acquisition date for the transactions noted above:
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Subsequent Events |
3 Months Ended |
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Mar. 31, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent EventsAs announced on May 6, 2022, the Board declared a quarterly cash dividend of $0.125 per share on the Company's common stock, payable on May 31, 2022 to stockholders of record as of the close of business on May 17, 2022. |
Recent Accounting Pronouncements (Policies) |
3 Months Ended |
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Mar. 31, 2022 | |
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 March 31, 2022, and its results of operations for the three months ended March 31, 2022 and 2021 and cash flows for the three months ended March 31, 2022 and 2021. The year-end Condensed Consolidated Balance Sheet data were derived from audited financial statements but does not include all disclosures required by U.S. GAAP. The results of operations of any interim period are not necessarily indicative of the results of operations to be expected for the full fiscal year. These financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 (the "2021 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 months ended March 31, 2022 and 2021 were April 2, 2022 and April 3, 2021, respectively.
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New 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”). Any ASUs not currently adopted 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. |
Revenues (Tables) |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disaggregation of Revenue | The Company's revenue by product line, and related approximate percentage of total sales, for the three months ended March 31, 2022 and 2021 were as follows:
The Company's revenues by geographic area, and related approximate percentage of total sales, for the three months ended March 31, 2022 and 2021 were as follows:
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Summary of Deferred Income and Customer Advances | Below is a roll-forward of Deferred income and customer advances for the three months ended March 31, 2022:
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Earnings Per Share (Tables) |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Earnings Per Share | The details of the basic and diluted EPS calculations for the three months ended March 31, 2022 and 2021 were as follows:
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Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The anti-dilutive common stock equivalents outstanding at the three months ended March 31, 2022 and 2021 were as follows:
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Schedule of Dividends Declared | Dividend activity for the three months ended March 31, 2022 and 2021 was as follows:
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Accounts and Other Receivables - Net (Tables) |
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Mar. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accounts and Other Receivables Net |
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Inventories (Tables) |
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Leases (Tables) |
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Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of Lease Expense | The components of lease expense were as follows:
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Goodwill and Intangible Assets (Tables) |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Changes in Carrying Amount of Goodwill | The change in the carrying amount of goodwill was as follows:
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Schedule of Finite-Lived Intangible Assets | Intangible assets subject to amortization were as follows:
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Derivative and Hedging Instruments (Tables) |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Derivative Instruments in Statement of Financial Position, Fair Value |
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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:
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Schedule of Cash Flow Hedges Included in Accumulated Other Comprehensive Income (Loss) | The following table summarizes the reclassification of net losses on derivative instruments from AOCI into earnings:
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Acquisitions (Tables) |
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Mar. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Combination and Asset Acquisition [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Business Acquisitions | The following table summarizes the allocation of the purchase price consideration as of the acquisition date for the transactions noted above:
|
Revenues - Narrative (Details) |
3 Months Ended | |
---|---|---|
Mar. 31, 2022
customer
country
|
Mar. 31, 2021 |
|
Concentration Risk [Line Items] | ||
Number of customers | customer | 400 | |
Number of countries in which customers are located (more than) | country | 50 | |
Length of contract terms | We typically sell to customers under master service agreements, with primarily one-year terms, or by purchase orders. | |
10 Largest Customers | Customer Concentration Risk | Revenue from Contract with Customer | ||
Concentration Risk [Line Items] | ||
Concentration risk percentage | 37.00% | 38.00% |
Shaw Industries Group Inc | Customer Concentration Risk | Revenue from Contract with Customer | ||
Concentration Risk [Line Items] | ||
Concentration risk percentage | 9.00% | 12.00% |
Revenues - Disaggregation of Revenue (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
|
Disaggregation of Revenue [Line Items] | ||
Sales | $ 479,073 | $ 376,383 |
Percentage of sales | 100.00% | 100.00% |
United States | ||
Disaggregation of Revenue [Line Items] | ||
Sales | $ 403,018 | $ 300,672 |
Percentage of sales | 84.00% | 80.00% |
International | ||
Disaggregation of Revenue [Line Items] | ||
Sales | $ 76,055 | $ 75,711 |
Percentage of sales | 16.00% | 20.00% |
Nylon | ||
Disaggregation of Revenue [Line Items] | ||
Sales | $ 118,609 | $ 83,789 |
Percentage of sales | 25.00% | 22.00% |
Caprolactam | ||
Disaggregation of Revenue [Line Items] | ||
Sales | $ 70,005 | $ 80,403 |
Percentage of sales | 15.00% | 21.00% |
Chemical Intermediates | ||
Disaggregation of Revenue [Line Items] | ||
Sales | $ 135,690 | $ 141,360 |
Percentage of sales | 28.00% | 38.00% |
Ammonium Sulfate | ||
Disaggregation of Revenue [Line Items] | ||
Sales | $ 154,769 | $ 70,831 |
Percentage of sales | 32.00% | 19.00% |
Revenues - Summary of Deferred Revenue and Customer Advances (Details) $ in Thousands |
3 Months Ended |
---|---|
Mar. 31, 2022
USD ($)
| |
Change in Contract with Customer, Liability [Roll Forward] | |
Opening balance | $ 2,749 |
Additional cash advances | 640 |
Less amounts recognized in revenues | (955) |
Ending balance | $ 2,434 |
Earnings Per Share - Schedule of Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
|
Basic | ||
Net income | $ 63,073 | $ 28,131 |
Weighted average common shares outstanding (in shares) | 28,199,871 | 28,093,764 |
EPS – Basic (in dollars per share) | $ 2.24 | $ 1.00 |
Diluted | ||
Dilutive effect of equity awards and other stock-based holdings (in shares) | 1,171,180 | 647,302 |
Weighted average common shares outstanding (in shares) | 29,371,051 | 28,741,066 |
EPS – Diluted (in dollars per share) | $ 2.15 | $ 0.98 |
Earnings Per Share - Antidilutive Common Stock Equivalents (Details) - shares |
3 Months Ended | |
---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
|
Earnings Per Share [Abstract] | ||
Options and stock equivalents (in shares) | 120,316 | 861,376 |
Earnings Per Share - Dividend Activity (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
|
Earnings Per Share [Abstract] | ||
Cash dividends declared per share (in dollars per share) | $ 0.125 | $ 0 |
Aggregate dividends paid to shareholders | $ 3,517 | $ 0 |
Accounts and Other Receivables - Net (Details) - USD ($) $ in Thousands |
Mar. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Receivables [Abstract] | ||
Accounts receivables | $ 220,010 | $ 175,584 |
Other | 4,870 | 4,998 |
Total accounts and other receivables | 224,880 | 180,582 |
Less – allowance for doubtful accounts | (1,339) | (1,495) |
Total accounts and other receivables – net | $ 223,541 | $ 179,087 |
Inventories (Details) - USD ($) $ in Thousands |
Mar. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Inventory Disclosure [Abstract] | ||
Raw materials | $ 90,299 | $ 56,961 |
Work in progress | 52,578 | 43,526 |
Finished goods | 57,374 | 27,961 |
Spares and other | 27,679 | 27,150 |
Inventory gross | 227,930 | 155,598 |
Reduction to LIFO cost basis | (64,534) | (6,028) |
Total inventories | $ 163,396 | 149,570 |
Percentage of FIFO inventory | 9.00% | |
Excess of replacement or current costs over stated LIFO value | $ 72,500 | $ 29,400 |
Leases - Components of Lease Expense (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
|
Finance Lease Cost | ||
Amortization of right-of-use asset | $ 236 | $ 183 |
Interest on lease liabilities | 14 | 8 |
Total finance lease cost | 250 | 191 |
Operating lease cost | 10,339 | 11,571 |
Short-term lease cost | 1,353 | 1,913 |
Total lease cost | $ 11,942 | $ 13,675 |
Leases - Narrative (Details) $ in Millions |
3 Months Ended |
---|---|
Mar. 31, 2022
USD ($)
| |
Leases [Abstract] | |
Operating lease not yet commenced | $ 0.5 |
Operating lease, commence lease period | 5 years |
Goodwill and Intangible Assets - Narrative (Details) - USD ($) $ in Millions |
1 Months Ended | 3 Months Ended | |
---|---|---|---|
Feb. 28, 2022 |
Mar. 31, 2022 |
Mar. 31, 2021 |
|
Finite-Lived Intangible Assets [Line Items] | |||
Amortization of intangible assets | $ 0.4 | $ 0.3 | |
Customer Relationships | U.S. Amines, Ltd. | |||
Finite-Lived Intangible Assets [Line Items] | |||
Useful life | 20 years | ||
Customer Relationships | U.S. Amines, Ltd. | Minimum | |||
Finite-Lived Intangible Assets [Line Items] | |||
Useful life | 15 years | ||
Customer Relationships | U.S. Amines, Ltd. | Maximum | |||
Finite-Lived Intangible Assets [Line Items] | |||
Useful life | 20 years | ||
Trade names | U.S. Amines, Ltd. | |||
Finite-Lived Intangible Assets [Line Items] | |||
Useful life | 5 years |
Goodwill and Intangible Assets - Schedule of Changes in Carrying Amount of Goodwill (Details) $ in Thousands |
3 Months Ended |
---|---|
Mar. 31, 2022
USD ($)
| |
Goodwill [Roll Forward] | |
Beginning balance | $ 17,592 |
Acquisitions | 40,271 |
Ending balance | $ 57,863 |
Income Taxes (Details) - USD ($) |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
Dec. 31, 2021 |
|
Income Tax Disclosure [Abstract] | |||
Income tax expense | $ 19,184,000 | $ 9,271,000 | |
Effective income tax rate | 23.30% | 24.80% | |
Business Acquisition [Line Items] | |||
Deferred income taxes | $ 145,206,000 | $ 133,330,000 | |
U.S. Amines, Ltd. | |||
Business Acquisition [Line Items] | |||
Deferred income taxes | $ 12,200,000 |
Fair Value Measurements (Details) |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2022
USD ($)
derivative_instrument
|
Jul. 31, 2019
USD ($)
|
Nov. 30, 2018
USD ($)
|
|
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Impairment for goodwill | $ 0 | ||
Interest Rate Swap | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Number of instruments held | derivative_instrument | 1 | ||
Derivative liability, fair value | $ 0 | $ 0 | |
Fair Value, Inputs, Level 2 | Interest Rate Swap | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Derivative liability, fair value | $ 40,000.00 |
Derivative and Hedging Instruments - Narrative (Details) |
3 Months Ended | |
---|---|---|
Mar. 31, 2022
USD ($)
derivative_instrument
|
Dec. 31, 2021
derivative_instrument
|
|
Derivative Instruments, Gain (Loss) [Line Items] | ||
Derivative loss reclassification from AOCI to income | $ | $ 40,000.00 | |
Forward Commodity Agreements | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Number of instruments held | derivative_instrument | 0 | 0 |
Interest Rate Swap | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Number of instruments held | derivative_instrument | 1 | |
Derivative, notional amount | $ | $ 50,000,000 |
Derivative and Hedging Instruments - Balance Sheet Classification (Details) - Designated as Hedging Instrument - USD ($) $ in Thousands |
Mar. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Derivative [Line Items] | ||
Derivative liability, fair value | $ (44) | $ (708) |
Interest Rate Contracts | ||
Derivative [Line Items] | ||
Derivative liability, fair value | $ (44) | $ (708) |
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 |
3 Months Ended |
---|---|
Mar. 31, 2022
USD ($)
| |
AOCI Attributable To Parent, Before Tax [Roll Forward] | |
Loss on derivative instruments included in Accumulated other comprehensive loss at December 31, 2021 | $ (708) |
Fair value adjustment | 664 |
Loss on derivative instruments included in Accumulated other comprehensive loss at March 31, 2022 | $ (44) |
Derivative and Hedging Instruments - Amount of Loss Recognized in Earning (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
|
Derivative Instruments, Gain (Loss) [Line Items] | ||
Total Derivatives | $ 63,073 | $ 28,131 |
Amount of Loss Recognized in Earnings | Accumulated Net Gain (Loss) from Cash Flow Hedges Including Portion Attributable to Noncontrolling Interest | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Total Derivatives | 12 | 557 |
Amount of Loss Recognized in Earnings | Accumulated Net Gain (Loss) from Cash Flow Hedges Including Portion Attributable to Noncontrolling Interest | Interest Rate Contracts | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Total Derivatives | $ 12 | $ 557 |
Acquisitions - Asset Acquisition (Details) - Commonwealth Industrial Services, Inc. $ in Millions |
1 Months Ended |
---|---|
Jan. 31, 2021
USD ($)
| |
Asset Acquisition [Line Items] | |
Net cash paid | $ 9.5 |
Useful life | 15 years |
Subsequent Events (Details) - $ / shares |
3 Months Ended | ||
---|---|---|---|
May 06, 2022 |
Mar. 31, 2022 |
Mar. 31, 2021 |
|
Subsequent Event [Line Items] | |||
Cash dividends declared per share (in dollars per share) | $ 0.125 | $ 0 | |
Subsequent Event | |||
Subsequent Event [Line Items] | |||
Cash dividends declared per share (in dollars per share) | $ 0.125 |
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