AdvanSix Inc.

Previous wording

The following discussion and analysis of the Company’s financial condition and results of operations, which we refer to as our “MD&A,” should be read in conjunction with the Condensed Consolidated Financial Statements and the notes thereto contained in this Quarterly Report on Form 10-Q (this "Form 10-Q"), as well as the MD&A section included in our 2024 Form 10-K. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties. Actual results and the timing of events may differ materially from those contained in these forward-looking statements due to a number of factors that can affect our performance in both the near- and long-term, including those incorporated by reference in Item 1A of Part II of this Form 10-Q as such factors may be revised or supplemented in subsequent filings with the SEC, as well as those discussed in the section entitled “Note Regarding Forward-Looking Statements” below.

Current wording

The following discussion and analysis of the Company’s financial condition and results of operations, which we refer to as our “MD&A,” should be read in conjunction with the Condensed Consolidated Financial Statements and the notes thereto contained in this Quarterly Report on Form 10-Q (this "Form 10-Q"), as well as the MD&A section included in our Annual Report on Form 10-K for the year ended December 31, 2024 ("2024 Form 10-K"). Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties. Actual results and the timing of events may differ materially from those contained in these forward-looking statements due to a number of factors that can affect our performance in both the near- and long-term, including those incorporated by reference in Item 1A of Part II of this Form 10-Q as such factors may be revised or supplemented in subsequent filings with the SEC, as well as those discussed in the section entitled “Note Regarding Forward-Looking Statements” below.

Previous wording

All statements other than statements of historical fact included in this Form 10-Q including, without limitation, statements in this MD&A regarding our financial position, business strategy and the plans and objectives of management for future operations, are forward-looking statements within the meaning of Section 21E of the Exchange Act. When used in this Form 10-Q, words such as "expect," “anticipate,” "estimate," "outlook," "project," "strategy," "intend," "plan," "target," "goal," "may," "will," "should," and “believe,” and other variations or similar terminology and expressions identify forward-looking statements. Although we believe forward-looking statements are based upon reasonable assumptions, such statements involve known and unknown risks, uncertainties and other factors, many of which are beyond our control and difficult to predict, which may cause the actual results or performance of the Company to be materially different from any future results or performance expressed or implied by such forward-looking statements. Such risks and uncertainties include, but are not limited to: general economic and financial conditions in the U.S. and globally; the potential effects of inflationary pressures, tariffs or the imposition of new tariffs, trade wars, barriers or restrictions, or threats of such actions, changes in interest rates, labor market shortages and supply chain issues; instability or volatility in financial markets or other unfavorable economic or business conditions caused by geopolitical concerns, including as a result of new or proposed regulatory, trade or other policies of the U.S., and the conflict between Russia and Ukraine, the conflict in Israel and Gaza and related uncertainty in the surrounding region, and the possible expansion of such conflicts; the effect of any of the foregoing on our customers’ demand for our products and our suppliers’ ability to manufacture and deliver our raw materials, including implications of reduced refinery utilization in the U.S.; our ability to sell and provide our goods and services; the ability of our customers to pay for our products; any closures of our and our customers’ offices and facilities; risks associated with increased phishing, compromised business emails and other cybersecurity attacks, data privacy incidents and disruptions to our technology infrastructure; risks associated with operating with a reduced workforce; risks associated with our indebtedness including compliance with financial and restrictive covenants, and our ability to access capital on reasonable terms, at a reasonable cost, or at all, due to economic conditions or otherwise; the impact of scheduled turnarounds and significant unplanned downtime and interruptions of production or logistics operations as a result of mechanical issues or other unanticipated events such as fires, severe weather conditions, natural disasters, pandemics and, geopolitical conflicts and related events; price fluctuations, cost incr…

Excerpt shortened here; the source contains the full paragraph.

Current wording

All statements other than statements of historical fact included in this Form 10-Q including, without limitation, statements in this MD&A regarding our financial position, business strategy and the plans and objectives of management for future operations, are forward-looking statements within the meaning of Section 21E of the Exchange Act. When used in this Form 10-Q, words such as "expect," “anticipate,” "estimate," "outlook," "project," "strategy," "intend," "plan," "target," "goal," "may," "will," "should," and “believe,” and other variations or similar terminology and expressions identify forward-looking statements. Although we believe forward-looking statements are based upon reasonable assumptions, such statements involve known and unknown risks, uncertainties and other factors, many of which are beyond our control and difficult to predict, which may cause the actual results or performance of the Company to be materially different from any future results or performance expressed or implied by such forward-looking statements. Such risks and uncertainties include, but are not limited to: general economic and financial conditions in the U.S. and globally; the potential effects of inflationary pressures, tariffs or the imposition of new tariffs, trade wars, barriers or restrictions, or threats of such actions, changes in interest rates, labor market shortages and supply chain issues; instability or volatility in financial markets or other unfavorable economic or business conditions caused by geopolitical concerns, including as a result of new or proposed legislation or regulatory, trade or other policies in or impacting the U.S., the conflict between Russia and Ukraine, the conflicts in Israel, Gaza and Iran, related uncertainty in the surrounding region, and the possible expansion of such conflicts; the effect of any of the foregoing on our customers’ demand for our products and our suppliers’ ability to manufacture and deliver our raw materials, including implications of reduced refinery utilization in the U.S.; our ability to sell and provide our goods and services; the ability of our customers to pay for our products; any closures of our and our customers’ offices and facilities; risks associated with increased phishing, compromised business emails and other cybersecurity attacks, data privacy incidents and disruptions to our technology infrastructure; risks associated with operating with a reduced workforce; risks associated with our indebtedness including compliance with financial and restrictive covenants, and our ability to access capital on reasonable terms, at a reasonable cost, or at all, due to economic conditions or otherwise; the impact of scheduled turnarounds and significant unplanned downtime and interruptions of production or logistics operations as a result of mechanical issues or other unanticipated events such as fires, severe weather conditions, natural disasters, pandemics and geopolitical conflicts and related events; pr…

Excerpt shortened here; the source contains the full paragraph.

Previous wording

AdvanSix is a diversified chemistry company playing 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, plant nutrients and chemical intermediates, guided by our core values of Safety, Integrity, Accountability and Respect. Our key product lines are as follows:

Current wording

AdvanSix is a diversified chemistry company that produces essential materials for our customers in a wide variety of end markets and applications that touch people’s lives. Our integrated value chain of our five U.S.-based manufacturing facilities plays a critical role in global supply chains and enables us to innovate and deliver essential products for our customers across building and construction, fertilizers, agrochemicals, plastics, solvents, packaging, paints, coatings, adhesives, electronics and other end markets. Guided by our core values of Safety, Integrity, Accountability and Respect, AdvanSix strives to deliver best-in-class customer experiences and differentiated products in the industries of nylon solutions, plant nutrients, and chemical intermediates. Our key product lines are as follows:

Previous wording

•Chemical Intermediates – We manufacture, market and sell a number of chemical intermediate products that are derived from the manufacturing processes within our integrated supply chain. Most significant is acetone which is used by our customers in the production of solvents, paints, coatings, adhesives, resins and herbicides. Other intermediate chemicals that we manufacture, market and sell include phenol, alpha-methylstyrene ("AMS"), cyclohexanone, oximes, cyclohexanol, and alkyl and specialty amines. Additional end-products for intermediates include automotive components, and water treatment and pharmaceutical intermediates.

Current wording

•Chemical Intermediates – We manufacture, market and sell a number of chemical intermediate products that are derived from the manufacturing processes within our integrated supply chain. Most significant is acetone which is used by our customers in the production of solvents, paints, coatings, adhesives, resins and herbicides. Other intermediate chemicals that we manufacture, market and sell include phenol, alpha-methylstyrene, cyclohexanone, oximes, cyclohexanol, and alkyl and specialty amines. Additional end-products for intermediates include automotive components, and water treatment and pharmaceutical intermediates.

Previous wording

We produce ammonium sulfate fertilizer continuously throughout the year as part of our manufacturing process, but quarterly sales fluctuate reflecting both geographical and product sales mix considerations based on the timing and length of the growing seasons in North and South America. North American ammonium sulfate demand and pricing, particularly for our higher-value granular product, are typically strongest during second quarter fertilizer application and then typically decline seasonally with new season fill in the third quarter. Ammonium sulfate industry prices in the corn belt have declined approximately 10% from the second quarter to the third quarter, on average, since 2016. Due to the ammonium sulfate fertilizer sales cycle, we occasionally build up higher inventory balances because our production is continuous and not tied to seasonal demand for fertilizers. Sales of most of our other products have generally been subject to minimal, or no, seasonality.

Current wording

Our ammonium sulfate fertilizer experiences quarterly sales seasonality reflecting both geographical and product sales mix considerations based on the timing and length of the growing seasons in North and South America. The North American fertilizer season typically runs from July, when the value chain begins restocking fertilizer, through June of the following year, when most application for the year’s planting is completed. The new season fill begins in the third quarter and proceeds sequentially into the following spring, which is the peak period for crop fertilizer application. As a result of this pattern, North American ammonium sulfate demand and pricing, particularly for our higher-value granular product, are typically strongest in the first half of the year through application for the spring crop and then decline in the second half of the year. Ammonium sulfate industry prices in the corn belt have declined approximately 10% from the second quarter to the third quarter, on average, since 2016. Due to the ammonium sulfate fertilizer sales cycle, we occasionally build up higher inventory balances because our production is continuous throughout the year and not tied to seasonal demand for fertilizers. Sales of most of our other products have generally been subject to minimal, or no, seasonality.

Previous wording

We seek to run our production facilities on a nearly continuous basis for maximum efficiency as several of our intermediate products are key feedstock materials for other products in our integrated manufacturing chain. While our integration, scale and range of product offerings make us one of the most efficient manufacturers in our industry, these attributes also expose us to increased risk associated with material disruptions at any one of our production facilities or logistics operations which could impact the overall manufacturing supply chain. Further, although we believe that our sources of supply for our raw materials, including cumene, natural gas and sulfur, are generally robust, it is difficult to predict the impact that shortages, increased costs and related supply chain logistics considerations may have in the future. In order to mitigate the risk of unplanned interruptions, we schedule several planned plant turnarounds each year to conduct routine and major maintenance across our facilities. We also utilize maintenance excellence and mechanical integrity programs, targeted buffer inventory of intermediate chemicals necessary for our manufacturing process, and co-producer swap arrangements, which are intended to mitigate the extent of any production losses as a result of planned and unplanned downtime; however, the mitigation of all or part of any such production impact cannot be assured.

Current wording

We seek to run our production facilities on a nearly continuous basis for maximum efficiency as several of our intermediate products are key feedstock materials for other products in our integrated manufacturing chain. While our integration, scale and range of product offerings make us one of the most efficient manufacturers in our industry, these attributes also expose us to increased risk associated with material disruptions at any one of our production facilities or logistics operations which could impact the overall manufacturing supply chain. Further, although we believe that our sources of supply for our raw materials, including cumene, natural gas and sulfur, are generally robust, it is difficult to predict the impact that shortages, increased costs and related supply chain logistics considerations may have in the future. In order to mitigate the risk of unplanned interruptions, we schedule planned plant turnarounds each year to conduct routine and major maintenance across our facilities. We also utilize maintenance excellence and mechanical integrity programs, targeted buffer inventory of intermediate chemicals necessary for our manufacturing process, and co-producer swap arrangements, which are intended to mitigate the extent of any production losses as a result of planned and unplanned downtime; however, the mitigation of all or part of any such production impact cannot be assured.

Previous wording

Costs of goods sold decreased in the three months ended March 31, 2025 compared to the prior year period by $9.5 million (approximately 3%) due primarily to (i) insurance proceeds collected as a result of the PES supplier shutdown (approximately 8%) and (ii) decreased plant costs (approximately 6%) primarily driven by improved operational performance, partially offset by increased prices of raw materials, including natural gas and sulfur (approximately 6%) and increased sales volume (approximately 5%).

Current wording

Costs of goods sold decreased in the six months ended June 30, 2025 compared to the prior year period by $30.3 million (approximately 4%) due to (i) insurance proceeds collected as a result of the PES supplier shutdown (approximately 4%), (ii) decreased operational costs (approximately 2%) primarily driven by improved operational performance, and (iii) decreased sales volume (approximately 2%), partially offset by increased raw material costs (approximately 3%) driven by natural gas and sulfur.

Previous wording

Gross margin percentage increased in the three months ended March 31, 2025 compared to the prior year period (approximately 13%) due primarily to (i) insurance proceeds collected as a result of the PES supplier shutdown (approximately 7%), (ii) decreased plant costs (approximately 5%) primarily driven by improved operational performance and (iii) increased sales volume (approximately 3%), partially offset by the impact of market-based pricing, net of raw material costs (approximately 1%).

Current wording

Gross margin percentage increased by approximately 4% in the six months ended June 30, 2025 compared to the prior year period due to (i) insurance proceeds collected as a result of the PES supplier shutdown (approximately 3%), (ii) decreased plant costs (approximately 1%) primarily driven by improved operational performance, and (iii) the net impact of lower sales volume and change in sales mix (approximately 1%), partially offset by the impact of market-based pricing, net of raw material costs (approximately 2%).

Previous wording

The Company’s provision (benefit) for income taxes in interim periods is computed by applying an estimated annual effective tax rate against Income before taxes for the period in addition to recording any tax effects of discrete items for the quarter. The Company’s effective tax rate for the three months ended March 31, 2025 differed from the U.S. federal statutory rate due to state taxes and executive compensation deduction limitations which generally increase the rate, offset by research tax credits that generally decrease the rate. Additionally, discrete tax adjustments recorded in the quarter related to Internal Revenue Code (IRC) Section 45Q tax credits of $1.8 million, offset slightly by state tax legislation changes had a net 5.8% decrease on the rate.

Current wording

The Company’s provision for income taxes in interim periods is computed by applying an estimated annual effective tax rate against Income before taxes for the period in addition to recording any tax effects of discrete items for the quarter. The Company’s effective tax rate for the three and six months ended June 30, 2025 differed from the U.S. federal statutory rate due to state taxes and executive compensation deduction limitations which generally increase the rate, offset by research tax credits that generally decrease the rate. Additionally, discrete tax adjustments recorded in the first and second quarter of the year related to Internal Revenue Code (IRC) Section 45Q tax credits of $1.8 million and $7.9 million, respectively, offset slightly by state tax legislation resulted in a net 24.7% and 15.7% decrease in the rate for the three and six months ended June 30, 2025, respectively. The Company’s effective tax rate for the three and six months ended June 30, 2024 was higher than the U.S. federal statutory rate, due to the impacts of state taxes and executive compensation deduction limitations which generally increase the tax rate, partially offset by tax credits which generally decrease the tax rate.

Previous wording

The Company’s effective tax rate for the three months ended March 31, 2025 was lower than the prior year period due primarily to the impact of the IRC Section 45Q tax credits recorded in the current year.

Current wording

The Company’s effective tax rate for the three and six months ended June 30, 2025 was lower than the prior year period due primarily to the impact of the IRC Section 45Q tax credits recorded in the first half of the current year compared to the first half of the prior year.

Previous wording

As a result of the factors described above, Net income (loss) was $23.3 million for the three months ended March 31, 2025 as compared to $(17.4) million in the corresponding prior year period.

Current wording

As a result of the factors described above, Net income was $31.4 million and $54.7 million for the three and six months ended June 30, 2025, respectively, as compared to $38.9 million and $21.5 million in the corresponding prior year period.

Previous wording

We believe that cash balances and operating cash flows, together with available capacity under our credit agreement, as utilized in the first quarter of 2025, will provide adequate funds to support our current short-term operating objectives as well as our longer-term strategic plans, subject to the risks and uncertainties outlined below, in our "Note Regarding Forward-Looking Statements" above, and in the risk factors previously disclosed in Item 1A of Part I of our 2024 Form 10-K. Our principal source of liquidity is our cash flow generated from operating activities, which is expected to provide us with the ability to meet the majority of our short-term funding requirements. Our cash flows are affected by capital requirements and production volume, which may be materially impacted by unanticipated events such as unplanned downtime, material disruptions at our production facilities, the prices of our raw materials, general economic and industry trends and customer demand. The Company applies a proactive and disciplined approach to working capital management to optimize cash flow and to enable capital allocation options in support of the Company’s strategy. We utilize supply chain financing and trade receivables discount arrangements with third-party financial institutions which optimize terms and conditions related to accounts receivable and accounts payable in order to enhance liquidity and enable us to efficiently manage our working capital needs. Although we continue to optimize supply chain financing and trade receivable programs in the ordinary course, our utilization of these arrangements has not had a material impact on our liquidity. In addition, we monitor the third-party depository institutions that hold our cash and cash equivalents. Our emphasis is primarily on the safety of principal and secondarily on maximizing yield on those funds. We diversify our cash and cash equivalents among counterparties to minimize exposure to any one of these entities.

Current wording

We believe that cash balances and operating cash flows, together with available capacity under our credit agreement, as utilized in the second quarter of 2025, will provide adequate funds to support our current short-term operating objectives as well as our longer-term strategic plans, subject to the risks and uncertainties outlined below, in our "Note Regarding Forward-Looking Statements" above, and in the risk factors previously disclosed in Item 1A of Part I of our 2024 Form 10-K. Our principal source of liquidity is our cash flow generated from operating activities, which is expected to provide us with the ability to meet the majority of our short-term funding requirements for the next twelve months and beyond. Our cash flows are affected by capital requirements and production volume, which may be materially impacted by unanticipated events such as unplanned downtime, material disruptions at our production facilities, the prices of our raw materials, general economic and industry trends and customer demand. The Company applies a proactive and disciplined approach to working capital management to optimize cash flow and to enable capital allocation options in support of the Company’s strategy. We utilize supply chain financing and trade receivables discount arrangements with third-party financial institutions which optimize terms and conditions related to accounts receivable and accounts payable in order to enhance liquidity and enable us to efficiently manage our working capital needs. Although we continue to optimize supply chain financing and trade receivable programs in the ordinary course, our utilization of these arrangements has not had a material impact on our liquidity. In addition, we monitor the third-party depository institutions that hold our cash and cash equivalents. Our emphasis is primarily on the safety of principal and secondarily on maximizing yield on those funds. We diversify our cash and cash equivalents among counterparties to minimize exposure to any one of these entities.

Previous wording

As of the end of the first quarter of 2025, the Company had approximately $8.3 million of cash on hand with approximately $284 million of additional capacity available under the revolving credit facility. The Company’s Consolidated Leverage Ratio financial covenant of its credit facility allows it to net up to $75 million of cash with debt. Capital expenditures are expected to be approximately $145 million to $155 million in 2025 compared to $134 million in 2024, reflecting the planned progression of our SUSTAIN growth program, and refined execution timing to address critical enterprise risk mitigation.

Current wording

As of the end of the second quarter of 2025, the Company had approximately $18.4 million of cash on hand with approximately $259 million of additional capacity available under the revolving credit facility. The Company’s Consolidated Leverage Ratio financial covenant of its credit facility allows it to net up to $75 million of cash with debt. Capital expenditures are expected to be approximately $135 million to $145 million in 2025 compared to $134 million in 2024, reflecting the planned progression of our SUSTAIN growth program, and refined execution timing to address critical enterprise risk mitigation.

Previous wording

The Company made no cash contributions to the defined benefit pension plan during the three months ended March 31, 2025 as there were no funding requirements for the period. Additional contributions may be made in future periods sufficient to satisfy pension funding requirements in those periods or on a discretionary basis.

Current wording

The Company made no cash contributions to the defined benefit pension plan during the six months ended June 30, 2025 as there were no funding requirements for the period. Additional contributions may be made in future periods sufficient to satisfy pension funding requirements in those periods or on a discretionary basis.

Previous wording

On February 17, 2023, the Company's Board of Directors (the "Board") authorized a share repurchase program to repurchase shares of the Company's common stock. As of March 31, 2025, the Company has repurchased a total of 6,305,561 shares of common stock life-to-date, including 1,060,105 shares withheld to cover tax withholding obligations in connection with the vesting of awards, for an aggregate of $193.9 million at a weighted average market price of $30.75 per share. As of March 31, 2025, approximately $62.0 million remained available for share repurchases under the currently authorized repurchase program. During the period April 1, 2025 through April 25, 2025, 2,538 additional shares were repurchased for tax withholding obligations in connection with the vesting of equity awards at a weighted average market price of $20.05 and no additional shares were repurchased under the currently authorized repurchase program.

Current wording

On February 17, 2023, the Board authorized a share repurchase program to repurchase shares of the Company's common stock. As of June 30, 2025, the Company has repurchased a total of 6,308,099 shares of common stock life-to-date, including 1,062,643 shares withheld to cover tax withholding obligations in connection with the vesting of awards, for an aggregate of $194.0 million at a weighted average market price of $30.75 per share. As of June 30, 2025, approximately $62.0 million remained available for share repurchases under the currently authorized repurchase program. During the period July 1, 2025 through July 25, 2025, no additional shares were repurchased for tax withholding obligations or under the currently authorized repurchase program.

Previous wording

As of March 31, 2025, the Company did not have any off-balance sheet arrangements as described in Instruction 8 to Item 303(b) of Regulation S-K and did not have any material changes in the commitments or contractual obligations detailed in the Company's 2024 Form 10-K (see Part II, Item 7 "Management's Discussion and Analysis of Financial Condition and Results of Operations" under "Liquidity and Capital Resources - Liquidity"). The Company has not guaranteed any debt or commitments of other entities or entered into any options on non-financial assets.

Current wording

As of June 30, 2025, the Company did not have any off-balance sheet arrangements as described in Instruction 8 to Item 303(b) of Regulation S-K and did not have any material changes in the commitments or contractual obligations detailed in the 2024 Form 10-K (see Part II, Item 7 "Management's Discussion and Analysis of Financial Condition and Results of Operations" under "Liquidity and Capital Resources - Liquidity"). The Company has not guaranteed any debt or commitments of other entities or entered into any options on non-financial assets.

Previous wording

The Revolving Credit Facility has a scheduled maturity date of October 27, 2026. The Credit Agreement permits the Company to utilize up to $40 million of the Revolving Credit Facility for the issuance of letters of credit and up to $40 million for swing line loans. The Company has the option to establish a new class of term loans and/or increase the amount of the Revolving Credit Facility in an aggregate principal amount for all such incremental term loans and increases of the Revolving Credit Facility of up to the sum of (x) $175 million plus (y) an amount such that the Company’s Consolidated First Lien Secured Leverage Ratio (as defined in the Credit Agreement) would not be greater than 2.75 to 1.00, in each case, to the extent that any one or more lenders, whether or not currently party to the Credit Agreement, commits to be a lender for such amount or any portion thereof.

Current wording

The Revolving Credit Facility has a scheduled maturity date of October 27, 2026, which the Company expects to refinance before such date. The Credit Agreement permits the Company to utilize up to $40 million of the Revolving Credit Facility for the issuance of letters of credit and up to $40 million for swing line loans. The Company has the option to establish a new class of term loans and/or increase the amount of the Revolving Credit Facility in an aggregate principal amount for all such incremental term loans and increases of the Revolving Credit Facility of up to the sum of (x) $175 million plus (y) an amount such that the Company’s Consolidated First Lien Secured Leverage Ratio (as defined in the Credit Agreement) would not be greater than 2.75 to 1.00, in each case, to the extent that any one or more lenders, whether or not currently party to the Credit Agreement, commits to be a lender for such amount or any portion thereof.

Previous wording

We had a borrowed balance of $195 million under the Revolving Credit Facility at December 31, 2024. We borrowed an incremental net amount of $20 million during the three months ended March 31, 2025, bringing the balance under the Revolving Credit Facility to $215 million, and available credit for use of approximately $284 million as of March 31, 2025. We expect that Cash provided by operating activities will fund future interest payments on the Company's outstanding indebtedness.

Current wording

We had a borrowed balance of $195 million under the Revolving Credit Facility at December 31, 2024. We borrowed an incremental net amount of $45 million during the six months ended June 30, 2025, bringing the balance under the Revolving Credit Facility to $240 million, and available credit for use of approximately $259 million as of June 30, 2025. We expect that Cash provided by operating activities will fund future interest payments on the Company's outstanding indebtedness.

Previous wording

Cash provided by operating activities increased by $47.6 million for the three months ended March 31, 2025 versus the prior year period due primarily to (i) a $40.7 million increase in net income, (ii) the favorable cash impact of $7.7 million from Taxes receivable and Income taxes payable combined, driven by the timing of tax payments and (iii) a $6.6 million favorable cash impact from working capital (comprised of Accounts and other receivables, Inventories, Accounts payable and Deferred income and customer advances) with a $35.7 million unfavorable cash impact from working capital for the three months ended March 31, 2025 compared to a $42.3 million unfavorable cash impact in the prior year period due primarily to the favorable impact of Accounts payable partially offset by Inventory, Accounts and other receivables and Deferred income and customer advances. These net favorable impacts were partially offset by a $7.1 million unfavorable cash impact from accrued liabilities due primarily to the timing of payments and accruals during the three months ended March 31, 2025 related to other accrued liabilities compared to the prior year period.

Current wording

Cash provided by operating activities increased by $18.6 million for the six months ended June 30, 2025 versus the prior year period due primarily to a $33.2 million increase in net income, partially offset by (i) the unfavorable cash impact of $9.6 million from Taxes receivable and Income taxes payable combined, driven by the timing of tax payments and (ii) a $5.6 million unfavorable cash impact from Accrued liabilities due primarily to the timing of payments and accruals during the six months ended June 30, 2025 compared to the prior year period.

Previous wording

Cash used for investing activities was approximately flat for the three months ended March 31, 2025 versus the prior year period for capital expenditures and other enterprise programs.

Current wording

Cash used for investing activities decreased by $4.4 million for the six months ended June 30, 2025 versus the prior year period due primarily to the timing of cash payments for capital expenditures and other enterprise programs.

Previous wording

Cash provided by financing activities decreased by $49.7 million for the three months ended March 31, 2025 versus the prior year period due primarily to net borrowings of $20.0 million during the three months ended March 31, 2025 compared to net borrowings of $75.0 million during the prior year period, partially offset by payments for share repurchases of $1.5 million during the three months ended March 31, 2025 compared to $7.0 million during the prior year period. Cash paid for dividends was relatively unchanged year-over-year.

Current wording

Cash provided by financing activities decreased by $6.4 million for the six months ended June 30, 2025 versus the prior year period due primarily to net borrowings of $45.0 million during the six months ended June 30, 2025 compared to net borrowings of $60.0 million during the prior year period, partially offset by payments for share repurchases of $1.5 million during the six months ended June 30, 2025 compared to $10.4 million during the prior year period.

Previous wording

For 2025, we expect our total capital expenditures to be approximately $145 million to $155 million as discussed above.

Current wording

For 2025, we expect our total capital expenditures to be approximately $135 million to $145 million as discussed above.