AdvanSix Issues Statement Regarding Philadelphia Refinery Fire

PARSIPPANY, N.J. — June 24, 2019 — AdvanSix said today that the Company is assessing the potential business impact of the fire that occurred Friday morning at the Philadelphia Energy Solutions’ (PES) refinery in Philadelphia. PES is one of multiple suppliers to AdvanSix of cumene, a feedstock material used to produce phenol, acetone and other chemical intermediates. The Company continues to operate its facilities while implementing its mitigation plans, including evaluation of business interruption insurance.

“We are thankful for the safety of all PES employees and have offered our assistance in the local area following Friday’s significant fire,” said Erin Kane, president and CEO of AdvanSix. “As a result of this event, we expect an increase in our feedstock and logistics costs to persist into the third quarter 2019. We are actively working with a number of suppliers to mitigate the impact on our business operations.”

Based on various planning scenarios and our current understanding of the PES fire’s impact on our business, the Company anticipates an approximately $7 to $12 million unfavorable impact to pre-tax income in the third quarter 2019, including incremental raw material and logistics costs as well as a modest unfavorable impact from fixed cost absorption.

The Company remains on force majeure with phenol customers and does not expect a material impact to second quarter 2019 financial results from the PES fire.

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

Posted June 24, 2019

Source: AdvanSix