AdvanSix Inc.

Ladies and gentlemen, good day and welcome to the AdvanSix Third Quarter 2019 Earnings Conference Call. Today's conference is being recorded. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on your telephone keypad. To withdraw your question, please press star, then two. I would now like to turn the conference over to Mr. Adam Kressel, Director of Investor Relations. Please go ahead, sir.

Thank you, David. Good morning and welcome to Advance6's third quarter 2019 earnings conference call. With me here today are President and CEO Aaron Kane and Senior Vice President and CFO Michael Preston. This call and webcast, including any non-GAAP reconciliations, are available on our website at investors.advance6.com. Note that elements of this presentation contain forward-looking statements that are based on our best view of the world and of our business as we see it today. Those elements can change, and the actual results could differ materially from those projected, and we ask that you consider them in that light. We refer you to the forward-looking statements included in our press release and earnings presentation. In addition, we identify the principal risks and uncertainties that affect our performance in our SEC filings, including our annual report on Form 10-K. This morning, we'll review our financial results for the third quarter of 2019 and share with you our outlook for our key product lines and end markets. Finally, we'll leave time for your questions at the end. So with that, I'll turn the call over to Advan6's President and CEO, Erin Kane.

Thanks, Adam, and good morning, everyone. Thank you for joining us and for your continued interest in Advan6. As you saw in our press release, Advan6 navigated a third quarter characterized by a challenging end market environment as we saw a further slowdown in demand on a global basis. Nylon industry conditions in particular remain lackluster with the sequential decline in industry spreads that began in June persisting through the third quarter. Mike will detail the full results in a moment, but overall, the third quarter results were pressured by challenging industry conditions and an unfavorable product mix. Given our global low-cost position, we continue to benefit from strong plant utilization rates at Hopal in particular, In the face of slowing nylon demand, continued acetone oversupply conditions, and mixed fertilizer industry dynamics. We have remained committed to the deployment of CapEx this year in high return growth and cost savings projects. Our new natural gas boilers are fully on stream, which coupled with low natural gas prices are delivering immediate productivity benefits for our business. And lastly, we repurchased approximately $13 million of shares in the third quarter. I'm also proud to announce that our Frankfurt facility was awarded RC 14001 certification in September. With that certification, all Advancix facilities are now third-party certified to RC 14001 and adhere to the responsible care guiding principles set forth by the American Chemistry Council. We continue to have a sharp focus on safety and advancing a sustainable enterprise. We're in the midst of completing our planning for 2020 with a conservative outlook in the near term, as macro uncertainty continues to weigh on market sentiment. Importantly, we are taking proactive measures to drive disciplined cost management, optimize working capital performance and cash flow generation, while deploying capital prudently. We remain focused on continuing to execute our strategic priorities with operational efficiency, and these will support our long-term performance. We continue to track to approximately $150 million in capital expenditures in 2019, which, as a reminder, funds three key investments this year, including our natural gas boilers, CapriLac TMZ bottlenecking, and R&D lab relocation projects. These will bolster our underlying earning potential. Looking to 2020, we expect total CapEx in the range of $90 to $110 million, or down $40 to $60 million year-over-year. Given the end market environment, we will be disciplined around reinvestment in the business while working to mature our long-term pipeline of high return opportunities. I'm happy to report that our fourth quarter 2019 plan turnaround was recently completed as expected and will have an approximately $25 million impact to pre-tax income in the fourth quarter at the low end of our previously expected range. This is a key consideration to our earnings performance in the fourth quarter and will bring the total plan turnaround impact for the full year to approximately $35 million. For the full year 2020, we expect the pre-tax income impact of planned plant turnarounds to be in the range of 33 to 38 million, which will be heavily concentrated in the second quarter of next year. Lastly, I want to provide an update on our community supply chain following a refinery fire at one of our suppliers, Philadelphia Energy Solutions, or PES, in June. In the third quarter, we saw a roughly $4 million pre-tax income impact as a result of our extended supply chain below the expected range we provided last quarter. Given the proximity of PES operations relative to our Frankfurt female plan, we inherently drive logistics and working capital benefits from that local supply relationship. As we are shifting towards a more Gulf Coast-reliant supply, our teams are actively working to optimize the impact on our business, including logistics, spot purchases, and buffer inventory levels. Given our efforts, we've narrowed the expected range of the fourth quarter 2019 financial impact to $46 million and expect the full year 2020 impact to be in the range of 10 to 15. compared to a full year 2019 impact of $8 to $10 million. Our key focus is to ensure security of supply and optimized economics as we rely on our supply chain into 2020, and we do remain confident in our long-term optionality. With that, I'll turn it over to Mike to discuss the details of the quarter.