Good day, everyone and welcome to the AdvanSix Second Quarter 2017 Earnings Conference Call. All participants will be listen-only mode [Operator Instructions]. After today’s presentation, there will be an opportunity to ask questions [Operator Instructions]. And please do note that today's event is being recorded. I would now like to turn the conference over to Adam Kressel, Director of Investor Relations. Please go ahead.

Thank you, William. Good morning and welcome to AdvanSix’s second quarter 2017 earnings conference call. With me here today are President and CEO, Erin 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.advansix.com, using the number six in the web address. 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 will review our financial results for the second quarter 2017, and share with you our outlook for our key product lines and end-markets. Finally, we will leave time for your questions at the end. So with that, I’ll turn the call over to AdvanSix’s President and CEO, Erin Kane.

Thanks, Adam, and good morning everyone. Thank you for joining us this morning and for your continued interest in AdvanSix. As you saw in our press release, AdvanSix delivered a terrific quarter to capping off a strong first half of 2017. Mike will detail the full results in a moment, so I would like to highlight the following. Sales for the quarter were $361 million with both higher pricing and volume contributing to the improvements year-over-year. We generated nearly $55 million of EBITDA in the quarter, a significant increase from the prior year, and expanded margins by 400 basis points. This resulted in the $26 million of net income or $0.83 earnings per share, that represents an EPS increase of 69% versus the prior year. There are number of exciting things happening on across the Company that I would like to touch on. We are building momentum of further being from our operational focus and made continued dynamic end-market. Our manufacturing sites have been running strong year-to-date with sales volume up 4% in the first half supported by the prior production output. We set production records in the first half at our Frankford Phenol plant and across the number of unit operations at our Hopewell site including Caprolactam, Granular Ammonium Sulfate cyclohexanol Ammonia and Sulfuric acid. We also continue to see increased production at our Chesterfield facility through our variety of organizational chain. We safely and efficiently executed our spring turnarounds across our plants, with on-time and on-budget. We will discuss our upcoming fourth quarter plan turnaround later on the call, but we are expecting impact to pre-tax income from plant turnarounds across all of our manufacturing sites in total this year to be around $35 million. Also in generally, we introduced the new version of our agriculture application called…

Hi, thanks, Erin, and good morning, everyone. I’m now on Slide 4 where I will cover the second quarter financial results. As Erin indicated, it’s been really a great start to the year so far with the drivers of our performance in the second quarter really very consistent with the first quarter. Sales came in at $361 million that's up 17% compared to last year. Pricing was the big driver of the top-line again, increasing 14% overall and that included a 10% benefit from a pass through of higher raw material costs. The remaining 4% was market based pricing. Now as a reminder, prices for our end products typically track a spread over the underlying raw material costs, which are largely sensitive to changes in oil prices. With these inputs increasing significantly year-over-year trending with the price of oil our sales in the second quarter also increased significantly. As I mentioned market based pricing was also higher compared to the prior year. We saw a favorable industry supply and demand conditions in our nylon, Caprolactam and chemical intermediates product lines. This was partially offset by a modest decline in ammonium sulfate pricing. It was another very strong quarter operationally, volume was up 3% in the quarter, with continued high utilization rates at our manufacturing sites. Through the first half of 2017, sales volumes has increased 4% versus the prior year, EBITDA of $55 million in the quarter increased nearly $21 million or 60% versus the prior year and that was driven mostly improved production and sales volume and the favorable impact of market based pricing. EBITDA margin also expanded significantly up 400 basis points to 15.1%. Items below EBITDA were also as expected. Depreciation decreased by about $1.9 million compared to last year driven by our broad scope of capital…

Thanks Mike. I’m now on Slide 5 to discuss on our nylon product line which includes our Caprolactam resin and films products and represented over 45% of our sales in the quarter. You may notice that we have added an additional lines to the pricing chart on the right side of the page to address to feedback and questions we received on Asia pricing versus global and regional pricing. We have continue to detect the Asia, Benzene in Caprolactam spreads and Caprolactam to resin spread based on third-party data sourced from Tecnon OrbiChem. The Caprolactam price highlights reflects the Asia import contracts in Taiwan and South Korea. In addition, we have now added what we are referring to as a global composite index which encompasses Benzene Caprolactam spreads across four regions, the U.S., Europe, China and rest of Asia with source of data from PCI Wood Mackenzie and Tecnon and it provide a weighted average view based on each regions percentage of global Caprolactam demand. Asia remains a net important region in the world so we will continue to reference trends there as its performance is the key macro indicator for the industry while also touching on regional supply and demand dynamics. We have seen generally balanced supply conditions across North America and Europe, while China’s structural imbalances continue to create uncertainty. Overall, global Caprolactam supply and demand dynamics are normalizing from the high seen in the first half. In China availability of key feedstock material which were short earlier in the first half have largely resolved themselves and we are continuing to monitor government imposed environment constraints as we move through the summer months. We are also tracking potential capacity additions in the region, however the timing remains uncertain and our balance against continued low utilization rate. Europe supply…

Okay thanks Erin and I’m now on Slide 9 and we would like to spend a little more time discussing our expectations for the second half of this year relative to the first half. And clearly there are number of puts and takes across the portfolio as we have discussed today. When you look at the nylon space increases in the industry pricing has sustained through second quarter. We expect supply and demand fundamentals in North America to remain relatively balanced in the second half of the year. However, the potential capacity additions we are tracking in China supported continued dynamics supply environment. Most recently, Asia Benzene to Caprolactam spreads had been firming after the sequential drop in the second quarter. So it's difficult to predict where things are going to go and we are cautious given the overcapacity in the region and the uncertainty that brings. A number of our key raw material inputs are also moving around, it’s unclear where oil prices are headed, but based on third-party analysts and economists, oil prices in the second half are expected to be roughly in-line with the first half. As a reminder, approximately 50% of our total revenue base is protected by formula or index based price agreements. While our sales will fluctuate with the price of those raw materials, the pricing model largely protects our variable margin. So our sales and cogs will move in tandem representing the pass through of those key raw material inputs. We are also closely monitoring developments in fertilizers as Erin indicated, prices for Ammonium Sulfate has stabilized sequentially, but we expect to see the normal seasonal pricing decline in the back half of the year. Although, we continue to face a challenging end-market environments overall, we remain focused on delivering on the value…

All right, thanks Mike and William, can you please open the line for questions?

We will now begin the Question-and-Answer Session. [Operator Instructions]. And our first questioner today will be Chris Moore with CJS Securities. Please go ahead.

Hey good morning guys. Yes and maybe if we could start on the Caprolactam spread. So as you talked about, it continues to be more regionalized at this point in time. It looks like based on the charts that obviously on a sequential basis the spreads were coming in a little bit in Q2, but were flattening a little bit towards the end of Q2. Is that what you are seeing, or is it a fair assessment from the chart there?

Yes, no I think when you look at the chart there Chris, I mean certainly as we are coming into the back half of Q2 into Q3 that overall we do see the dynamics normalizing from what was in some cases an acute consideration in the first half with feedstock materials availability in China, which has been largely resolved. We are continuing to monitor what appears to be the ongoing governmental imposed environmental constraints as we work through the summer months. And of course, we still have our eye on potentially roughly up to 800,000 tons of capacity coming on throughout the back half of the year as well. So I think when you look where we sit now, one could kind of look at the chart and almost go back to where we were discussing at the end of Q3 last year where pricing was firming and same sort of that that modest uptick and that's kind of what we are anticipating. I think it's reasonable probability that that's kind of the path we maybe on here now into the third quarter.

Got you. Beyond the China supply, anything else looks to be different in the second half, I mean for example the [Vibrant] (Ph) plants in Europe, any update there or could we share - is there additional capacity coming on beyond what might be coming from China?

No again, I think largely the issues in [indiscernible] that we are declared in the first half have been largely resolved to our knowledge and again there are no other public announcements that we have seen indicating that there would be anything structural that happened other than again watching these new assets to be brought online as we get into the back half.

Got you. And with respect to on Acetone side, obviously you had turnaround already, some of the turnarounds that competitors might be having. Are they typically in the back half of 2017 just trying to get a sense as to kind of on a relative basis how that plays out for you?

I think on a relatively basis I would say not quite industry wide, but a fair amount of the industry averages tend to be taken in the first half. So had ours, there were some disruptions in another - I would say peer’s you know value chain and then some standard outages. But I think in the back half again with everybody running with that behind them, again we see things relatively robust from a demand side, but probably coming a bit more in-line from an availability of supply.

Got you. And just a last question on the overall scope of your turnaround. So it sounds like $20 million in Q4, $35 million for the year, most of that was in Q2 I'm just trying to get a sense as to how much of that $15 million was Q2 or some of it was spread over Q1 and Q3?

Yes. So most of that was in Q2 Chris, we had just a little bit, low million dollar numbers may slip in between some other quarters. So we had a little bit in Q1, have a little bit in Q3, but a majority are going to be in Q2 and we are going have $20 million in Q4.

Got you. All right, I appreciate it guys.

Great. Thanks Chris.

All right. Thanks.

[Operator Instructions] And our next questioner today will be Brad Hathaway with Far View. Please go ahead.

Hi everyone. I just had a question about kind of global Caprolactam dynamics versus North America. How much Caprolactam actually comes into North America from other parts of the world?

So today when you think about the Caprolactam market as we have dialogues in the past, its predominantly a balanced North America environment, Vibrant shutdown their asset in 2016, and that was roughly about 25% of North America tax fee at that time. So material may in small quantities leave North America and potentially come in. There is a reminder, the North American environment particularly the U.S. is a molten market which means that we are servicing the customer base with hot liquid molten than materials. So there are supply chain considerations when you bring material in whether it would be imports from Europe or contemplated imports from Asia. You have put into a solid form in which case it needs to then be re-melted and handled here with a longer supply chain. So again, I think there are small amounts coming in an out relatively speaking, but the North American capacity and supply demands fundamentals are much more imbalanced than there were before.

Okay so does that suggest that the outlook for North America in the second half is different than the outlook for the global market given that North America is more balanced?

Again, from the standpoint of where we are in North Americas given that balanced environment which had been in place really since the fourth quarter of last year that what we have seen in the first half would continue into the second half.

Okay. So while there has been weakening in China, you haven’t really seen any weakening in North American spreads in the balance in the second half?

So again, North America roughly 80% of our sales here are in North America. We have a significant number of contracts as we talked about in our formula movement. So again, as we discussed its largely kind of protects the raw materials again that pass through in cogs to price and again when you look at the supply and demand fundamentals here that played out early, contracts are going to be a year to two years in length. So I think the way that we would characterize and want you to think about it, is the first half likely sort of carrying in it the key trends for the back half.

Okay. So kind of global normalizing maybe not happening as much in North America. Got it okay. Thank you.

Thanks Brad.

Thank you.

[Operator Instructions]. There look to be no further questioners. So this will conclude the Question-and-Answer Session. I would like to turn the conference back to Erin Kane for any closing remarks.

Great, thank you. It was terrific to share with you all the results of a very robust second quarter that when combined with Q1 highlight our execution to deliver improved operational and financial performance in 2017. Our leading cost position will serve us well through the dynamics of our end-market and we will continue to our focus on safe operational output, strong working capital results and delivering improved cash flow. We will continue to build our capabilities for longer term growth and value creations, all on ensuring end-to-end business efficiency. We are building great momentum and we look forward to sharing more with you next quarter. Thank you again for your time this morning.

And the conference has now concluded. Thank you all for attending today's presentation. You may now disconnect your lines.