Ingevity reports selected preliminary third quarter 2020 financial results

NORTH CHARLESTON, S.C.–(BUSINESS WIRE)–Ingevity Company (NYSE:NGVT) in the present day reported chosen preliminary monetary outcomes for the third quarter.

“Ingevity’s third quarter outcomes had been pushed by robust rebounds in automotive gross sales and manufacturing worldwide versus a weak second quarter, together with continued robust paving exercise, price discount actions and robust execution,” stated John Fortson, president and CEO. “These positives had been partially offset by a weakened financial surroundings resulting from COVID-19 that notably impacted our Efficiency Chemical substances companies. Nonetheless, our adjusted EBITDA and adjusted EBITDA margin had been data for the third quarter.”

Third quarter web gross sales of $332 million had been down 7.eight% versus the prior yr third quarter. Web revenue of $70 million elevated 16.7% and web revenue margin of 21.1% was up from 16.6% within the prior yr. The third quarter diluted earnings per share had been $1.69 in comparison with $1.41 within the prior yr interval.

Adjusted earnings of $74 million had been up 19.three% versus the prior yr quarter. Diluted adjusted earnings per share had been $1.79, which exclude, web of tax, $zero.10 associated primarily to restructuring and different costs, web, acknowledged throughout the quarter. This compares to diluted adjusted earnings per share of $1.46 within the prior yr quarter. Adjusted EBITDA of $128 million had been up 11.9% versus the third quarter 2019. Adjusted EBITDA margin of 38.5% was up 680 foundation factors from the prior yr’s third quarter.

The corporate generated working money move of $90 million, which translated to free money move of $74 million.

Efficiency Chemical substances

“Aside from our pavement applied sciences enterprise, our Efficiency Chemical substances phase was negatively impacted by a weak financial system ensuing from COVID-19,” stated Fortson. “We proceed to manage prices which resulted in our adjusted EBITDA margins remaining solidly within the mid 20s.”

Gross sales to pavement applied sciences functions had been barely greater than the prior yr and set a quarterly document. Whereas paving gross sales in North America had been primarily flat, gross sales in China and Europe, Center East and Africa (EMEA) had been up sharply, albeit from smaller bases. Gross sales for engineered polymers merchandise had been down resulting from decreased industrial demand globally. Footwear and medical system gross sales had been down, whereas gross sales to bioplastics clients continued to point out development. Gross sales decreased in industrial specialties functions resulting from continued demand weak point for printing inks and different end-use functions. Moreover, gross sales to oilfield applied sciences clients had been minimize sharply in keeping with decreased drilling in North America; gross sales in oil manufacturing functions had been down reasonably.

Third quarter 2020 gross sales within the Efficiency Chemical substances phase had been $188 million, down 18.2% versus the third quarter 2019. Section EBITDA had been $47 million, down 21.1% versus the prior yr quarter resulting from decrease volumes which had been partially offset by value/combine. Section EBITDA margin declined 90 foundation factors to 25.1%.

Efficiency Supplies

“Automakers – notably within the U.S. and Canada – rebounded sharply,” stated Fortson. “The trade continues to work to refill the automobile pipeline, and as such, demand for our gasoline vapor emission management options has risen dramatically versus the second quarter.” In consequence, the corporate’s quarterly manufacturing of honeycomb scrubbers used to satisfy the U.S. and Canadian regulatory requirements had been a quarterly document.

Gross sales of Efficiency Supplies merchandise in China had been up strongly as automakers there have bounced again from COVID-related shutdowns and the implementation of the China 6 normal has been accomplished.

Third quarter 2020 gross sales within the Efficiency Supplies phase had been $144 million, up 10.four% versus the third quarter 2019. Section EBITDA had been $80 million, up 48.three% versus the prior yr interval as a result of sharp enhance in volumes and value/combine enchancment. Section EBITDA margin elevated 1,430 foundation factors to 55.9%.

Outlook

Ingevity narrowed its fiscal yr 2020 steering for gross sales from between $1.10 billion and $1.20 billion to between $1.15 billion and $1.20 billion, and elevated and narrowed its steering for adjusted EBITDA from between $310 million and $350 million to between $355 million and $365 million.

“We stay assured in our enterprise by the tip of the yr,” stated Fortson. “Whereas we might even see continued weak point on the income line, given the associated fee controls we’ve applied, we count on our adjusted EBITDA and adjusted EBITDA margins to stay favorable. And whereas uncertainty stays relating to international financial power, we consider within the power of our technique and our crew’s potential to execute on the alternatives.”

Preliminary Outcomes

Now we have offered the preliminary estimated monetary outcomes contained on this press launch and the accompanying monetary schedules as a result of our monetary closing procedures for the three months ended September 30, 2020 are usually not but full. The preliminary estimated monetary data contained herein and within the accompanying monetary schedules doesn’t characterize a complete assertion of our outcomes of operations or monetary situation as of or for the three months ended September 30, 2020 and relies solely on data out there to us as of the date of this press launch. Our outcomes of operations and monetary situation as of and for the three months ended September 30, 2020 might differ from our present expectations and could also be completely different from the knowledge described above as our quarterly monetary assertion preparation course of is just not but full and extra developments and changes might come up between now and the time the monetary statements and different disclosures for this era are finalized, together with all disclosures required by GAAP. As well as, these preliminary estimated monetary outcomes are usually not essentially indicative of the outcomes to be achieved for the rest of 2020 or in any future interval. There may be no assurance that these estimates shall be realized, and estimates are topic to dangers and uncertainties, a lot of which aren’t inside our management. The data contained herein and within the accompanying monetary schedules shouldn’t be seen as an alternative to full monetary statements ready in accordance with GAAP or as a measure of efficiency. Accordingly, you shouldn’t place undue reliance on such monetary data.

Ingevity: Purify, Shield and Improve

Ingevity offers specialty chemical compounds, high-performance carbon supplies and engineered polymers that purify, shield and improve the world round us. By means of a crew of proficient and skilled folks, Ingevity develops, manufactures, and brings to market merchandise and processes that assist clients remedy advanced issues. These merchandise are utilized in quite a lot of demanding functions, together with asphalt paving, oil exploration and manufacturing, agrochemicals, adhesives, lubricants, publication inks, coatings, elastomers, bioplastics and automotive elements that scale back gasoline vapor emissions. Headquartered in North Charleston, South Carolina, Ingevity operates from 25 areas all over the world and employs roughly 1,850 folks. The corporate is traded on the New York Inventory Alternate (NYSE: NGVT). For extra data go to www.ingevity.com.

Further Info

The corporate will host a stay webcast on Thursday, Oct. 29, 2020, at 10 a.m. (Japanese Time) to debate third quarter 2020 fiscal outcomes. The webcast may be accessed by the buyers part of Ingevity’s web site. You might also hearken to the convention name by dialing 877-407-2991 (contained in the U.S.) or 201-389-0925 (outdoors the U.S.), not less than 10 minutes previous to the beginning of the occasion. Info on find out how to entry the webcast and convention name, together with a slide deck containing different related monetary and statistical data, shall be posted to the buyers part of Ingevity’s web site previous to the decision. For these unable to hitch the stay occasion, a replay of the webcast shall be out there starting at roughly 2 p.m. (Japanese Time) on Oct. 29, 2020, by Nov. 29, 2020.

Use of Non-GAAP Monetary Measures

Ingevity has offered sure monetary measures which haven’t been ready in accordance with U.S. usually accepted accounting ideas (GAAP). Definitions of our non-GAAP monetary measures and a reconciliation to essentially the most instantly comparable monetary measure calculated in accordance with GAAP are included within the monetary schedules accompanying this information launch, beneath the part entitled “Non-GAAP Monetary Measures.”

Cautionary Statements About Ahead-Wanting Statements

This press launch accommodates “forward-looking statements” inside the which means of the Securities Alternate Act of 1934, as amended, and the Non-public Securities Litigation Reform Act of 1995. Such statements usually embody the phrases “will,” “plans,” “intends,” “targets,” “expects,” “outlook,” or related expressions. Ahead-looking statements might embody, with out limitation, anticipated monetary positions, outcomes of operations and money flows; financing plans; enterprise methods and expectations; working plans; impression of COVID-19; synergies and the potential advantages of the acquisition of Perstorp Holding AB’s Capa® caprolactone enterprise (the “acquisition”); capital and different expenditures; aggressive positions; development alternatives for current merchandise; advantages from new know-how and cost-reduction initiatives, plans and goals; markets for securities and anticipated future repurchases of shares, together with statements concerning the method, quantity and timing of repurchases. Precise outcomes may differ materially from the views expressed. Elements that might trigger precise outcomes to materially differ from these contained within the forward-looking statements, or that might trigger different forward-looking statements to show incorrect, embody, with out limitation, hostile results from the COVID-19 pandemic; dangers that the anticipated advantages from the acquisition might not be realized or is not going to be realized within the anticipated time interval, the chance that the acquired enterprise is not going to be built-in efficiently and the chance of serious transaction prices and unknown or understated liabilities; hostile results of basic financial and monetary situations; dangers associated to worldwide gross sales and operations; impacts of foreign money alternate charges and foreign money devaluation; compliance with U.S. and international laws regarding our operations outdoors the U.S.; modifications in commerce coverage, together with the imposition of tariffs; the impression of the UK’s withdrawal from the European Union; attracting and retaining key personnel; hostile situations within the international automotive market or adoption of different and new applied sciences; competitors from producers of different merchandise and new applied sciences, and new or rising opponents; competitors from infringing mental property exercise; worldwide air high quality requirements; a lower in authorities infrastructure spending; declining volumes and downward pricing within the printing inks market; the restricted provide of or lack of entry to adequate crude tall oil; a protracted interval of low vitality costs; the supply of providers by third events at a number of services; pure disasters, reminiscent of hurricanes, winter or tropical storms, earthquakes, tornados, floods, fires; different unanticipated issues reminiscent of labor difficulties, gear failure or unscheduled upkeep and restore; safety of mental property and proprietary data; data know-how safety breaches and different disruptions; issues with designing and implementing our new enterprise useful resource planning system; authorities insurance policies and laws, together with, however not restricted to, these affecting the surroundings, local weather change, tax insurance policies, tariffs and the chemical compounds trade; and lawsuits arising out of environmental injury or private accidents related to chemical or different manufacturing processes, and the opposite components detailed every now and then within the experiences we file with the SEC, together with these described beneath “Danger Elements” in our Annual Report on Kind 10-Ok, our Kind 10-Q for the interval ending March 31, 2020 and different periodic filings. These forward-looking statements communicate solely as of the date of this press launch. Ingevity assumes no obligation to offer any revisions to, or replace, any projections and forward-looking statements contained on this press launch.

Ingevity has offered sure monetary measures, outlined under, which haven’t been ready in accordance with U.S. usually accepted accounting ideas (“GAAP”) and has offered a reconciliation to essentially the most instantly comparable monetary measure calculated in accordance with GAAP on the next pages. These monetary measures are usually not meant to be thought-about in isolation or as an alternative to essentially the most instantly comparable monetary measure calculated in accordance with GAAP. Buyers ought to think about the constraints related to these non-GAAP measures, together with the potential lack of comparability of those measures from one firm to a different.

We consider these non-GAAP monetary measures present administration in addition to buyers, potential buyers, securities analysts and others with helpful data to guage the efficiency of the enterprise, as a result of such measures, when seen along with our monetary outcomes computed in accordance with GAAP, present a extra full understanding of the components and traits affecting our historic monetary efficiency and projected future outcomes.

Ingevity makes use of the next non-GAAP measures:

Adjusted earnings (loss) is outlined as web revenue (loss) plus restructuring and different (revenue) costs, web, acquisition and other-related prices, pension and postretirement settlement and curtailment (revenue) costs and the revenue tax expense (profit) on these gadgets, much less the supply (profit) from sure discrete tax gadgets.

Diluted adjusted earnings (loss) per share is outlined as diluted earnings (loss) per frequent share plus restructuring and different (revenue) costs, web per share, acquisition and other-related prices per share, pension and postretirement settlement and curtailment (revenue) costs per share and the revenue tax expense (profit) per share on these gadgets, much less the per share tax provision (profit) from sure discrete tax gadgets per share.

Adjusted EBITDA is outlined as web revenue (loss) plus provision (profit) for revenue taxes, curiosity expense, web, depreciation and amortization, restructuring and different (revenue) costs, web, acquisition and other-related prices, and pension and postretirement settlement and curtailment (revenue) costs.

Adjusted EBITDA Margin is outlined as Adjusted EBITDA divided by Web gross sales.

Free Money Move is outlined because the sum of money offered by (utilized in) the next gadgets: working actions much less capital expenditures.

Ingevity additionally makes use of the above monetary measures as the first measures of profitability utilized by managers of the enterprise. As well as, Ingevity believes Adjusted EBITDA and Adjusted EBITDA Margin are helpful measures as a result of they exclude the consequences of financing and funding actions in addition to non-operating actions.

GAAP Reconciliation of 2020 Adjusted EBITDA Steerage

A reconciliation of web revenue to adjusted EBITDA as projected for 2020 is just not offered. Ingevity doesn’t forecast web revenue because it can’t, with out unreasonable effort, estimate or predict with certainty varied elements of web revenue. These elements, web of tax, embody additional restructuring and different revenue (costs), web; further acquisition and other-related prices in reference to the acquisition of Perstorp Holding AB’s Capa caprolactone enterprise; further pension and postretirement settlement and curtailment (revenue) costs; and revisions resulting from future steering and evaluation of U.S. tax reform. Moreover, discrete tax gadgets may drive variability in our projected efficient tax charge. All of those elements may considerably impression such monetary measures. Additional, sooner or later, different gadgets with related traits to these at present included in adjusted EBITDA, which have an analogous impression on comparability of durations, and which aren’t recognized presently, might exist and impression adjusted EBITDA.