Operator: Good day and welcome to the AdvanSix Inc. First Quarter 2026 Earnings Conference Call. All participants will be in a listen-only mode. Please note this event is being recorded. I would now like to turn the conference over to Adam Kressel, Vice President, Investor Relations and Treasurer. Please go ahead. Thank you, Danielle.

Adam Kressel: Good morning, and welcome to AdvanSix Inc.’s First Quarter 2026 Earnings Conference Call. With me here today are President and CEO, Erin N. Kane; Senior Vice President and CFO, Patrick Day; and Vice President of Corporate Finance and Strategic FP&A, Christopher Gramm. This call and webcast, including any non-GAAP reconciliations, are available on our website at investors.advansix.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 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-Ks, as further updated in subsequent filings with the SEC. This morning, we will review our financial results for the first quarter 2026, and share our outlook for our key product lines and end markets. Finally, we will leave time for your questions at the end. With that, I will turn the call over to AdvanSix Inc.’s President and CEO, Erin N. Kane.

Erin N. Kane: Thanks, Adam, and good morning, everyone. We appreciate you joining us here today for our quarterly call. As you saw in our press release, the AdvanSix Inc. team navigated a number of headwinds to deliver a solid first quarter performance, including the earlier winter-storm-related impacts, and new geopolitical challenges amid continued subdued industrial end market demand. In the quarter, we generated 7% sales growth year over year, supported by improvements in chemical intermediates volume and plant nutrients market pricing, partially offsetting the margin impacts driven by increased sulfur and natural gas costs. We are executing with a focus to recover inflationary raw material input costs by leveraging both our pass-through formula and freely negotiated pricing mechanisms.

I would like to thank all of our teammates who contributed to successfully maintaining safe operations during the winter storm earlier this year. While the earnings impact related to this event came in just above the high end of our anticipated range, we were able to save $3 million of planned turnaround expense for the year. Looking ahead, we anticipate significant sequential earnings and cash flow improvement into the second quarter. We are in a solid position as the domestic planting season progresses, and continue to operate amid a tightening acetone global supply and demand environment and a modestly recovering nylon industry. We are maintaining a disciplined focus on cost productivity, capital spending, turnaround execution, and full-year free cash flow generation.

We continue to expect full-year CapEx in the range of $75 million to $95 million, with targeted allocation of nearly 20% of that toward high-return growth investments. We also continue to expect debt leverage ratios near the low end of our target range of 1.0 to 2.5 times by the end of this year. Key to our strategy is a keen focus on controllables to support through-cycle profitability and cash conversion while progressing targeted growth strategies and initiatives. We announced yesterday an exciting new opportunity to expand our integrated ammonia platform at our Hopewell, Virginia site to supply the growing regional diesel exhaust fluid (DEF) market. I will share more about this later in the call. Lastly, effective April 27, we welcomed Patrick Day as our new Senior Vice President and Chief Financial Officer.

Pat has tremendous experience establishing corporate and financial strategies to accelerate growth and shareholder value. We look forward to his expertise as we advance into our next chapter. I would also like to thank Christopher Gramm for his commitment and support during his time as interim CFO over the last year. With that, I will turn it to Christopher to discuss the financials.

Christopher Gramm: Thanks, Erin. I am now on Slide 4 to discuss our results for the quarter. Sales of $[inaudible] in the quarter increased approximately 7% versus the prior year, comprised of 6% volume growth and 1% favorable price. Sales volume growth was primarily driven by favorable chemical intermediates sales. Market-based pricing improved by 3%, primarily driven by an increase in plant nutrients reflecting higher nitrogen pricing amid increased sulfur input costs. Raw material pass-through pricing was down 2% following a net cost decrease in benzene and propylene, which is a major input to cumene, our largest raw material and key feedstock to our products. Adjusted EBITDA was $5 million, down $47 million from last year, primarily driven by the absence of insurance proceeds from the prior year of $20 million, the unfavorable impact of higher sulfur and natural gas raw material prices, higher utility expenses, and $11 million of winter-storm-related impacts.

On a sequential basis compared to the fourth quarter, higher sales volume growth supported by improved operational performance was more than offset by escalating raw material input prices. From a free cash flow perspective, the first quarter represents a seasonal use of cash as expected, primarily due to the timing of cash payments for CapEx following the prior quarter outages. The absence of insurance proceeds was also a meaningful driver of the year-over-year change. We continue to anticipate sequential improvement into the second quarter and expect the second half of the year to be a source of cash to achieve our full-year expectations. Now let us turn to Slide 5. On this slide, we are detailing our quarterly sales contributions by product line, as well as price and volume indicators, both year over year and sequentially.

In light of the significant raw material inflation and the mix of our formula or index-based pricing mechanisms, we did not fully cover those costs in the first quarter. However, we anticipate recouping a large portion of that shortfall in the second quarter, particularly into the heart of the domestic planting season for plant nutrients. Starting with Nylon Solutions, resin volumes improved sequentially on improved operational performance, while caprolactam volumes moderated in a soft demand environment, particularly for carpet applications. We saw a higher export mix in 2026 which is expected to continue in the near term. With our advantaged position, we are evaluating export opportunities to ensure the best economic output for the integrated enterprise.

Domestic pricing steadily increased overall, supported in part by higher input costs. Plant nutrient volumes were flat to down both year over year and sequentially in the first quarter, while pricing strength continued. In the early parts of the year, we witnessed more cautious buying behavior down the value chain and a more risk-averse sentiment from customers amid the higher input costs and rapidly rising nitrogen prices. Lastly, chemical intermediates sales improved on the back of volume improvements year over year. In acetone, as we mentioned on the first quarter 2025 earnings call, downstream MMA saw extended plant outages last year. In 2026, we observed more normalized operating rates down the value chain supporting demand. In addition, given pricing dynamics and trade flows across our key products in this portfolio, we delivered on opportunistic spot sales domestically and in the export markets.

Thanks, Erin. I am now on Slide 6 to discuss what we are seeing across our major product lines.

Erin N. Kane: Our diversified end market exposure continues to be a strategic advantage providing resilience across cycles. Agriculture and fertilizer remains our largest end market. As we sit here today, our domestic granular sales for this fertilizer year are now expected to be near record levels but closer to flat as compared to the last fertilizer year. While the fertilizer year started off with optimism and a strong fall fill as we have discussed in previous calls, buying has become more cautious given continued challenged fundamentals including farmer profitability and input affordability, cold weather to start the spring, and drought conditions. What that means is we are now selling in-season tons with the ability to work coverage of sulfur input costs.

This is important because amid a higher global nitrogen pricing environment on the heels of the conflict in the Middle East, ammonium sulfate pricing actions are largely offsetting sulfur input costs rather than driving margin expansion in this current context. We know that growers value the cost of nutrition. In fact, ammonia for direct application is currently a relatively attractive value for growers. While we are not a large merchant ammonia supplier, we have seen good demand and netbacks and have been maximizing our ammonia availability this spring while slightly moderating ammonium sulfate production. While we capture the benefit from the advantage between U.S. natural gas and global nitrogen prices, we also contend with the impact of sulfur input costs versus the sulfur value proposition we deliver to farmers.

On tightened global supply, sulfur quarterly prices settled at a record $655 per long ton in 2026, with current spot prices trading even higher than those levels. This represents over a 30% sequential increase and roughly a 140% surge year over year, so a meaningful increase that the industry is experiencing. Moving to our key nylon end markets, across building and construction as well as engineering plastics, North American demand has not materially changed. Global pricing has moved up with capacity rationalization and material shortages in Europe, lower operating rates in China, logistics constraints, and higher input costs. Our industry pricing mechanisms work to pass through changes in core raw materials, notably benzene, but also natural gas and sulfur.

Given global trade flow dynamics, reduced imports have created opportunities to gain share. In this environment, it is critical for our business to remain agile through pricing and mix. We continue to execute our plan, including taking advantage of export opportunities as they arise, increasing prices to offset cost increases, and reducing inventory levels for nylon resin to align with current market conditions. In chemical intermediates, phenol demand remains soft overall, driving lower global operating rates. Coupled with reduced acetone imports into the U.S., all of this is supporting tightening acetone supply and demand dynamics. Acetone price increases have been implemented in the industry to keep pace with rising propylene costs. Spreads have held near cycle averages, and we continue to anticipate that for the full year 2026.

Let us move to Slide 7. We were excited to announce yesterday that we have entered into a process design and licensing agreement to assess expansion of our integrated ammonia platform to enable the domestic manufacturing of DEF, a critical emissions control product used across on- and off-highway diesel applications. As background, DEF is an EPA-mandated additive for reducing NOx emissions from diesel engines, with strong and growing demand driven primarily by Class 8 vehicle usage in the Mid-Atlantic and Northeast. Demand for DEF continues to grow to meet environmental standards, and as regulatory requirements expand across transportation, construction, agriculture, and industrial equipment fleets. The AdvanSix Inc. Hopewell facility provides a strong foundation for expanding domestic manufacturing at the site and already produces all required DEF inputs.

This potential expansion would complement existing capabilities at the site with full continued commitment to the production of ammonium sulfate fertilizer to serve the U.S. farming industry. Our geographic position uniquely enables reliable supply to meet growing demand in a market currently served by imports and production from other domestic regions. Our investments over time with our ammonia unit operation have paid off in terms of our reliability and output. This project has the potential to unlock further value from our existing assets through increased optionality to serve a broadened customer base. We will advance through detailed engineering and development phases with final investment decision targeted for 2027. Additional updates will be provided as engineering, commercial, and financial milestones are achieved, and regulatory approvals are secured.

We anticipate a multi-year capital investment supporting attractive financial returns following expected operational startup in 2029, which align with our long-term value creation objectives and commitment to disciplined capital allocation. Let us turn to Slide 8 before moving to Q&A. AdvanSix Inc. offers a compelling investment thesis with value drivers supporting through-cycle profitability and sustainable performance. Our strategic initiatives and unique combination of assets and business model are core to our durable competitive advantage and long-term positioning. Our global low-cost position and vertically integrated caprolactam production serve us well. In addition, a sulfuric acid platform integration coupled with a leading technology position underpins how we win in plant nutrients.

We are progressing our sustained ammonium sulfate growth program and have now announced another high-return investment opportunity to serve the growing DEF market. These capabilities, combined with increasing asset operational agility and diversified products and end market mix, position us to navigate cycles and capitalize on emerging opportunities. We remain focused on delivering on controllable levers, including our non-manpower fixed cost savings program, risk-based prioritization of our capital investments, continued working capital discipline, and 45Q carbon capture tax credits, to support improved cash flow generation. With that, Adam, let us move to Q&A.

Adam Kressel: Thanks, Erin. Danielle, can you please open the line for questions? We will now open the call for questions.

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Operator: Thank you. We will now begin the question and answer session. Using a speakerphone, please pick up your handset before pressing the keys. The first question comes from Pete Oesterlin from Truist Securities. Please go ahead.

Pete Oesterlin: Hey, good morning. Thanks for taking the questions. Just wanted to start on the DEF ammonia project. I guess, do you have a rough estimate you can share for the capital intensity you expect for this project between now and 2029? And maybe how does the hurdle you are targeting at this point compare to other programs you have had, like Sustain, and the IRRs you have referenced there?

Erin N. Kane: Thanks, Pete. Good morning, and appreciate the question. At this time, I would share that we would expect the CapEx for this program certainly to be larger than our Sustain program. Hopefully, you can appreciate that while we are investigating and doing our FEED process, we are having a number of negotiations with folks and, at this time, would keep the actual CapEx range a bit confidential—more to come there. But you can think about it certainly as a larger program than Sustain. That said, our internal targets, as we have shared for high-return growth and cost savings projects, are 20%+ IRR hurdle rates. This project fits well into that range, and we are certainly announcing it now given the fact that this continues to demonstrate real potential for the company.

Pete Oesterlin: Very helpful. Thanks. And then, switching gears, when you think about the level of sulfur pricing that you are guiding to for the second quarter, is it your expectation at this point that prices should be at or above that level for the remainder of the year? Even if the Iran conflict ended very soon, how long would you expect until you start seeing some easing for the dynamics that are driving higher prices in that market?

Erin N. Kane: You are probably aware that spot prices continue to trade higher than the Q2 settlement. Certainly, as we think about the Q3 settlement that will come in a couple of months—it is settled by two large phosphate producers here in the U.S. and their three largest suppliers. But I think, consistent with what you are probably hearing with others in this space, even if we have a resolution in the Middle East, there is quite a bit of time for things to settle back out. I can share that security of supply is not a consideration for us, seeing that we are buying here in North America. Certainly, there is a lot of sulfur—about 50% of world supply—coming from the Middle East, but we are in a great spot being a North American producer and purchaser.

Pricing probably does stay higher for longer. Then we will have to see what it does for demand into its largest applications. Just over 50% of the world’s sulfur goes into phosphate fertilizer. Watching that will be key compared to what we see. But we feel good about our sequential opportunity to recover, and that has been our focus as we progress through Q2.

Operator: The next question comes from David Silver from Freedom Capital Markets. Please go ahead.

David Silver: Let me just get my questions in order here. I did want to go back to the sulfur question and a couple of your comments regarding ammonium sulfate. I think you mentioned that ammonium sulfate prices are increasing but more or less in line with the rise in sulfur costs. I am wondering—you talked about kind of balanced markets, whereas for most nitrogen fertilizer products, it is somewhat different supply-demand; it is very tight. You do have a very strong vertically integrated production structure. What kind of in-season flexibility do you think you have to maybe exploit some pretty big price differentials amongst the different nitrogen fertilizer products? You have looked at these markets for quite a while. Why not tilt or lean on direct ammonia sales and a little bit less of the ammonium sulfate here?

Erin N. Kane: Thanks for that question, David. Hopefully that was teased out a bit in our remarks. We are a big producer and a leader in ammonium sulfate, and that is certainly a place we will continue to play. With ammonium sulfate, we do capture the differential between where nitrogen is priced and our U.S. natural gas position. We also can have that directly in our ammonia sales as well. I would say right now, it is a moderate lever. We can pull back a bit on our ammonium sulfate production. We continue, as we shared last year, to produce ammonia at historically high levels, and then, relative to what we are targeting to sell, that would be consistent with that. Farmers need NPK. They need sulfur. There is a value proposition for sulfur, and we continue to focus on ensuring that they have their needs met there as well.

This situation right now, compared to perhaps Ukraine and Russia, has us contending with sulfur. Farmers do seem to be sticking more with ammonia for direct application, and we are looking to take advantage of that too and provide the opportunity that we have off our assets to do so.

David Silver: Okay. I am going to follow up with a couple of targeted questions. Firstly, you did talk about the sulfur market. You did talk about your positioning and being able to get all the sulfur that you require. But there is—I am guessing it is unprecedented—this gap between the spot price of sulfur and the contract price of sulfur. I just wanted to clarify that AdvanSix Inc. is able to purchase at the contract price—the lower contract price—under your current supply agreements rather than some mix of contracts and spot pricing. Can you touch on your supply arrangements for sulfur and, in particular, how tight the relationship is between the U.S. contract price versus having to go out into the spot market?

Erin N. Kane: I can confirm that we purchase entirely on the contract marker.

David Silver: Okay, great. Thank you for that. I did want to follow up maybe on the DEF project—very interesting project and leveraging some of your capabilities. I read the release the other day and then your comments in the prepared remarks. You are going to be adding some urea melt capacity there. Will you also be debottlenecking ammonia? In other words, are you going to have a higher ammonia capacity once the project is finished than you currently have, or how should I think about that in terms of allocating ammonia amongst the nylon, the fertilizer, and now the DEF?

Erin N. Kane: This next phase does not require an ammonia expansion. Given our geographical location and our integrated platform, we always look at marginal ammonia debottlenecking, but for DEF we do not need to expand ammonia for the purposes of the project.

David Silver: Okay. Very good. Last one for me: I would like to get an update on the Section 45Q credits. I am guessing that the filing for the 2018–2020 period for roughly $20 million has not been received yet. Can you provide an update on that? And then, do you anticipate filing for an additional tranche of the credits to which you are entitled in the current fiscal year? Should we think about that maybe in the $20 million range as well?

Christopher Gramm: David, thanks for that question. As you can imagine, there has been a lot of continuing activity around 45Q. We have the audit process underway with the IRS for the 2018 through 2020 years of credit. We anticipate field work being wrapped up in the second quarter, and we are making good progress on the audit itself. In terms of the timing of the cash—and while $20 million was the full value—we have already received $2 million of that in prior years. We are anticipating another $18 million. We would expect the proceeds for that in the second half, subject to IRS approval, but we are expecting that in the second half. In terms of the life cycle assessment for the 2021 year and following, we have submitted those to the DOE, and we are working now with the DOE and the IRS to get those certified.

Just as a reminder, we have been at this for over five years, and so this process takes some time as we work through with the government to get their approval and the due diligence that they do. Hopefully those will be coming shortly, but that is the process and where we are.

David Silver: Okay. Great. Thank you for the update.

Erin N. Kane: Thanks, David.

Operator: This concludes our question and answer session. I would like to turn the conference back over to Erin N. Kane for closing remarks.

Erin N. Kane: Thank you all again for your time and interest this morning. As we move through the remainder of 2026 and navigate a dynamic environment, we are well positioned to support our strategic priorities as a U.S.-based integrated manufacturer aligned to domestic supply chains and energy, as well as a diverse set of end market applications. We look forward to speaking with you again next quarter. Stay safe and be well.

Operator: The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.

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ADVANSIX INC

Q1 2026

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