GAAP EPS of $1.18; Adjusted EPS of $1.03,
8% ahead of Q2 2015 ($0.95, excluding divestment)
Innospec Inc. (NASDAQ:IOSP) today announced its financial results
for the second quarter ended June 30, 2016.
Total net sales for the quarter were $228.0
million, down 6 percent from the $242.9 million reported in the
corresponding quarter last year. Net income was $28.9
million, $1.18 per diluted share, compared to $34.5 million, or
$1.40 per diluted share, recorded a year ago. EBITDA
(earnings before interest, taxes, depreciation, amortization and
acquisition fair value adjustments) for the quarter was $44.3
million, a 28 percent increase from $34.7 million in 2015’s second
quarter. The figures for the second quarter of 2015 included the
Aroma Chemicals business, which was divested in July 2015 and
contributed $11.6 million of sales revenue, EBITDA of $2.3 million
and $0.07 of diluted EPS.
Results for this quarter include special items
summarized in the table below. Excluding these items,
adjusted non-GAAP EPS was $1.03 per diluted share, compared to
$1.02 per diluted share a year ago. Innospec closed the
quarter in a net debt position of $4.7 million. Cash
generation for the quarter was strong with operating cash inflows
of $50.4 million, before capital expenditures of $4.4 million.
EBITDA and net income excluding special items,
and related per-share amounts, are non-GAAP financial measures that
are defined and reconciled with GAAP results herein and in the
schedules below.
|
|
|
|
|
|
|
Quarter ended June 30, 2016 |
|
Quarter ended June 30, 2015 |
(in millions,
except share and per share data) |
|
Incomebeforeincometaxes |
|
NetIncome |
|
DilutedEPS |
|
Incomebeforeincometaxes |
|
Netincome |
|
DilutedEPS |
|
|
|
|
|
|
|
|
|
|
|
|
|
Reported GAAP
amounts |
$ |
|
36.4 |
|
$ |
|
28.9 |
|
$ |
|
1.18 |
|
$ |
|
51.8 |
|
$ |
|
34.5 |
|
$ |
|
1.40 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency
exchange (gains)/losses |
|
|
(8.5 |
) |
|
|
(6.8 |
) |
|
|
(0.28 |
) |
|
|
4.7 |
|
|
|
3.5 |
|
|
|
0.14 |
|
Amortization of
acquired intangible assets |
|
|
4.3 |
|
|
|
3.4 |
|
|
|
0.14 |
|
|
|
4.3 |
|
|
|
3.2 |
|
|
|
0.13 |
|
Adjustment to fair
value of contingent consideration |
|
|
(2.4 |
) |
|
|
(1.5 |
) |
|
|
(0.06 |
) |
|
|
(26.6 |
) |
|
|
(16.1 |
) |
|
|
(0.65 |
) |
Acquisition-related
costs |
|
|
1.0 |
|
|
|
1.0 |
|
|
|
0.04 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Adjustment of income
tax provisions |
|
|
0.4 |
|
|
|
0.4 |
|
|
|
0.01 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
(5.2 |
) |
|
|
(3.5 |
) |
|
|
(0.15 |
) |
|
|
(17.6 |
) |
|
|
(9.4 |
) |
|
|
(0.38 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
non-GAAP amounts |
$ |
|
31.2 |
|
$ |
|
25.4 |
|
$ |
|
1.03 |
|
$ |
|
34.2 |
|
$ |
|
25.1 |
|
$ |
|
1.02 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commenting on the second quarter results,
Patrick S. Williams, President and Chief Executive Officer,
said,
“This has been a very good quarter for Innospec.
Not only have we posted good results, but the signs from our
underlying markets are more positive than they have been for some
time. Our cash generation for the quarter was exceptional. Our GAAP
EPS was $1.18 and our adjusted EPS of $1.03 per share matched the
strong comparative period, despite some continued market challenges
and the Aroma divestment. Our financial discipline has further
strengthened our balance sheet to a point where our net debt is
negligible.”
“The performance in Fuel Specialties was
pleasing as revenues improved. Demand in this market is far from
strong, but when combined with our new product offerings, this has
allowed us to continue to grow, especially in the EMEA and Asia
Pacific regions.”
“Performance Chemicals has once again delivered
an excellent quarter of impressive growth at good margins, showing
the success of our strategy which is focused on innovative
technology for skincare, haircare and suncare. Our manufacturing
investment to meet the increased demand is coming on stream at just
the right time. We continue to pursue acquisition candidates in
Personal Care and the wider Performance Chemicals markets.”
“Market conditions in Oilfield Services continue
to remain a challenge. While the business is heading in the right
direction, and there are certainly some signs of increased customer
activity, it remains well below prior year levels. We will need to
see a further improvement in commodity prices, sustained over a
significant period, before this business can resume its previous
growth trend. Nevertheless, each month in the quarter was an
improvement on the one before, indicating that there are positive
trends in the Oilfield market.”
“In Octane Additives, we delivered the latest
order as previously indicated, although the final portion
will be shipped in the third quarter. We have no
further visibility on future orders at this stage.”
Net sales in Fuel Specialties were $129.3
million for the quarter, a 6 percent increase from $121.8 million
last year, driven by a good performance in the core business, and
strong demand in aviation as volume improvement of 8 percent and a
positive currency impact of 1 percent offset the price/mix
reduction of 3 percent. Sales performance was excellent in
EMEA and Asia Pacific. In the Americas, the business was down
against a very strong comparative quarter. Gross margins of 33.8
percent were similar to the first quarter of 2016, but slipped by
2.3 percentage points from last year as a result of a weaker sales
mix in the core business. Operating income for the quarter was
$24.2 million down slightly from $25.6 million a year ago.
In Performance Chemicals, excluding the
divestment of Aroma Chemicals (sales of $11.6 million), net sales
of $35.3 million were up 9 percent against 2015’s second quarter.
Adjusting for the divestment, volume growth of 11 percent offset 1
percent lower pricing and an adverse currency impact of 1 percent.
On the same basis, gross margins expanded over 4 percentage points
to 32.0 percent benefitting from a richer sales mix and operating
income was up by 81 percent from a year ago at $4.7 million.
In Oilfield Services, sales of $46.5 million
were down 34 percent on the second quarter of 2015, driven by a
reduction in customer activity, especially in completion as overall
volumes declined by 16 percent and there was an adverse price/mix
of 18 percent. However, as expected, sales were up 28 percent
sequentially over the first quarter of 2016. A favorable
sales mix helped drive an improvement of 2.6 percentage points in
gross margins in the quarter and operating expenses in this
business were down 8 percent compared to prior year, driven by our
cost reduction programs. The business made an operating loss
of $1.6 million during the quarter, compared to a $5.0 million
profit in the same quarter last year. However, as
anticipated, this represents good progress on the operating loss of
$5.5 million reported in the first quarter of 2016.
In Octane Additives, net sales for the quarter
were $16.9 million as expected compared to $6.5 million a year
ago. The segment’s gross margin was 62.7 percent benefitting
from increased production volumes. Octane Additives reported
an operating income of $9.6 million during the quarter, compared to
$2.8 million in last year’s second quarter.
Corporate costs for the quarter were $12.4
million, compared with $7.4 million a year ago. In this quarter
there were $1.0 million of acquisition-related costs and the
comparative quarter included a substantial recovery of legal costs.
The effective tax rate for the quarter was 20.6 percent, and the
expected tax rate for the full year remains at 20 percent.
Net cash generated from operations was $50.4
million, compared to the $36.9 million a year ago. As of June
30, 2016, Innospec had $153.2 million in cash and cash equivalents,
and total debt of $157.9 million. In the second quarter, the
Company paid $8.1 million to shareholders as the semi-annual
dividend.
Mr. Williams concluded,
“We are very pleased with our performance in the
quarter, despite the continuing challenges of some of our markets.
This strong performance reflects the benefit of having a range of
businesses in a balanced portfolio. Fuel Specialities made good
progress, while Performance Chemicals continued its excellent
growth based on further new product development. As we predicted,
Oilfield Services continued the improvement trend we saw at the end
of the first quarter, through the second quarter and is now back to
break even as we enter the third quarter. Conditions in this market
remain difficult, but we believe the outlook is better than it has
been for some time.”
“Our cash generation was strong in the quarter
which has further strengthened our balance sheet. With net debt
down to only $4.7 million, we consider ourselves to be well placed
to continue our balanced capital management program, and pursue the
pipeline of acquisition opportunities throughout the rest of the
year.”
“We enter the second half of the year with a
positive outlook, and we believe there are continued clear signs
that our strategy is right on track to deliver further growth and
shareholder value.”
Use of Non-GAAP Financial
Measures
The information presented in this press release
includes financial measures that are not calculated or presented in
accordance with Generally Accepted Accounting Principles in the
United States (GAAP). These non-GAAP financial measures
comprise EBITDA, income before income taxes excluding special
items, net income excluding special items and related per share
amounts and Performance Chemicals, excluding the divestment of
Aroma Chemicals. EBITDA is net income per our consolidated
financial statements adjusted for the exclusion of charges for
interest expense, net, income taxes, depreciation, amortization and
acquisition fair value adjustments. Income before income
taxes, net income and diluted EPS, excluding special items, per our
consolidated financial statements are adjusted for the exclusion of
foreign currency exchange (gains)/losses, amortization of acquired
intangible assets, adjustment to fair value of contingent
consideration, acquisition-related costs and adjustment of income
tax provisions. Reconciliations of these non-GAAP financial
measures to their most directly comparable GAAP financial measures
are provided herein and in the schedules below. The Company
believes that such non-GAAP financial measures provide useful
information to investors and may assist them in evaluating the
Company’s underlying performance and identifying operating
trends. In addition, management uses these non-GAAP financial
measures internally to allocate resources and evaluate the
performance of the Company’s operations. While the Company
believes that such measures are useful in evaluating the Company’s
performance, investors should not consider them to be a substitute
for financial measures prepared in accordance with GAAP. In
addition, these non-GAAP financial measures may differ from
similarly-titled non-GAAP financial measures used by other
companies and do not provide a comparable view of the Company’s
performance relative to other companies in similar
industries. Management believes the most directly comparable
GAAP financial measure is GAAP net income and has provided a
reconciliation of EBITDA and net income excluding special items,
and related per share amounts, to GAAP net income herein and in the
schedules below.
About Innospec Inc.
Innospec Inc. is an international specialty
chemicals company with approximately 1300 employees in 20
countries. Innospec manufactures and supplies a wide range of
specialty chemicals to markets in the Americas, Europe, the Middle
East, Africa and Asia-Pacific. The Fuel Specialties business
specializes in manufacturing and supplying fuel additives that
improve fuel efficiency, boost engine performance and reduce
harmful emissions. Oilfield Services provides specialty chemicals
to all elements of the oil & gas exploration and production
industry. The Performance Chemicals business creates
innovative technology-based solutions for our customers in the
Personal Care market, focusing on skincare, haircare and
suncare. Octane Additives produces octane improvers to
enhance gasoline.
Forward-Looking Statements
This press release contains certain
"forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. All statements
other than statements of historical facts included or incorporated
herein may constitute forward-looking statements. Such
forward-looking statements include statements (covered by words
like “expects,” “estimates,” “anticipates,” “may,” “believes,”
“feels” or similar words or expressions), for example, which relate
to earnings, growth potential, operating performance, events or
developments that we expect or anticipate will or may occur in the
future. Although forward-looking statements are believed by
management to be reasonable when made, they are subject to certain
risks, uncertainties and assumptions, including those associated
with the United Kingdom’s exit from the European Union and our
actual performance or results may differ materially from these
forward-looking statements. Additional information regarding
risks, uncertainties and assumptions relating to Innospec and
affecting our business operations and prospects are described in
Innospec’s Annual Report on Form 10-K for the year ended December
31, 2015 and other reports filed with the U.S. Securities and
Exchange Commission. You are urged to review our discussion
of risks and uncertainties that could cause actual results to
differ from forward-looking statements under the heading "Risk
Factors” in such reports. Innospec undertakes no obligation
to publicly update or revise any forward-looking statements,
whether as a result of new information, future events or
otherwise.
Schedule 1 |
|
INNOSPEC INC. AND SUBSIDIARIES |
CONSOLIDATED STATEMENTS OF INCOME |
|
|
|
Three Months EndedJune
30 |
|
Six Months EndedJune 30 |
(in millions, except share
and per share data) |
|
2016 |
|
|
|
2015 |
|
|
|
2016 |
|
|
|
2015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales |
$ |
|
228.0 |
|
$ |
|
242.9 |
|
$ |
|
440.1 |
|
$ |
|
512.1 |
|
Cost of goods sold |
|
|
(142.5 |
) |
|
|
(155.4 |
) |
|
|
(278.4 |
) |
|
|
(342.8 |
) |
Gross profit |
|
|
85.5 |
|
|
|
87.5 |
|
|
|
161.7 |
|
|
|
169.3 |
|
|
|
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
Selling, general
and administrative |
|
|
(53.1 |
) |
|
|
(50.2 |
) |
|
|
(97.0 |
) |
|
|
(98.9 |
) |
Research and
development |
|
|
(6.2 |
) |
|
|
(6.5 |
) |
|
|
(13.1 |
) |
|
|
(12.7 |
) |
Adjustment to fair
value of contingent consideration |
|
|
2.4 |
|
|
|
26.6 |
|
|
|
4.0 |
|
|
|
23.1 |
|
Loss on disposal of
subsidiary |
|
|
- |
|
|
|
- |
|
|
|
(1.4 |
) |
|
|
- |
|
Total operating
expenses |
|
|
(56.9 |
) |
|
|
(30.1 |
) |
|
|
(107.5 |
) |
|
|
(88.5 |
) |
Operating income |
|
|
28.6 |
|
|
|
57.4 |
|
|
|
54.2 |
|
|
|
80.8 |
|
Other net
income/(expense) |
|
|
8.5 |
|
|
|
(4.7 |
) |
|
|
8.2 |
|
|
|
(3.2 |
) |
Interest expense, net |
|
|
(0.7 |
) |
|
|
(0.9 |
) |
|
|
(1.5 |
) |
|
|
(1.9 |
) |
Income before income
taxes |
|
|
36.4 |
|
|
|
51.8 |
|
|
|
60.9 |
|
|
|
75.7 |
|
Income taxes |
|
|
(7.5 |
) |
|
|
(17.3 |
) |
|
|
(13.1 |
) |
|
|
(23.3 |
) |
Net income |
$ |
|
28.9 |
|
$ |
|
34.5 |
|
$ |
|
47.8 |
|
$ |
|
52.4 |
|
|
|
|
|
|
|
|
|
|
Earnings per
share: |
|
|
|
|
|
|
|
|
Basic |
$ |
|
1.21 |
|
$ |
|
1.43 |
|
$ |
|
1.99 |
|
$ |
|
2.16 |
|
Diluted |
$ |
|
1.18 |
|
$ |
|
1.40 |
|
$ |
|
1.95 |
|
$ |
|
2.12 |
|
|
|
|
|
|
|
|
|
|
Weighted average shares
outstanding (in thousands): |
|
|
|
|
|
|
|
|
Basic |
|
|
23,973 |
|
|
|
24,202 |
|
|
|
23,996 |
|
|
|
24,251 |
|
Diluted |
|
|
24,443 |
|
|
|
24,671 |
|
|
|
24,462 |
|
|
|
24,761 |
|
|
|
|
|
|
|
|
|
|
|
INNOSPEC INC. AND SUBSIDIARIES |
|
Schedule 2A |
|
SEGMENTAL ANALYSIS
OF RESULTS |
|
Three Months EndedJune
30 |
|
Six Months EndedJune
30 |
(in
millions) |
|
|
2016 |
|
|
|
2015 |
|
|
|
2016 |
|
|
|
2015 |
|
|
|
|
|
|
|
|
|
|
Net sales: |
|
|
|
|
|
|
|
|
Fuel
Specialties |
$ |
|
129.3 |
|
$ |
|
121.8 |
|
$ |
|
252.7 |
|
$ |
|
265.3 |
|
Performance
Chemicals |
|
|
35.3 |
|
|
|
43.9 |
|
|
|
70.0 |
|
|
|
90.7 |
|
Oilfield
Services |
|
|
46.5 |
|
|
|
70.7 |
|
|
|
82.7 |
|
|
|
137.4 |
|
Octane
Additives |
|
|
16.9 |
|
|
|
6.5 |
|
|
|
34.7 |
|
|
|
18.7 |
|
|
|
|
228.0 |
|
|
|
242.9 |
|
|
|
440.1 |
|
|
|
512.1 |
|
|
|
|
|
|
|
|
|
|
Gross profit: |
|
|
|
|
|
|
|
|
Fuel
Specialties |
|
|
43.7 |
|
|
|
44.0 |
|
|
|
85.7 |
|
|
|
85.9 |
|
Performance
Chemicals |
|
|
11.3 |
|
|
|
11.3 |
|
|
|
22.1 |
|
|
|
23.4 |
|
Oilfield
Services |
|
|
19.9 |
|
|
|
28.4 |
|
|
|
31.5 |
|
|
|
50.4 |
|
Octane
Additives |
|
|
10.6 |
|
|
|
3.8 |
|
|
|
22.4 |
|
|
|
9.6 |
|
|
|
|
85.5 |
|
|
|
87.5 |
|
|
|
161.7 |
|
|
|
169.3 |
|
|
|
|
|
|
|
|
|
|
Operating
income/(loss): |
|
|
|
|
|
|
|
|
Fuel
Specialties |
|
|
24.2 |
|
|
|
25.6 |
|
|
|
48.1 |
|
|
|
49.1 |
|
Performance
Chemicals |
|
|
4.7 |
|
|
|
4.7 |
|
|
|
9.1 |
|
|
|
9.5 |
|
Oilfield
Services |
|
|
(1.6 |
) |
|
|
5.0 |
|
|
|
(7.1 |
) |
|
|
6.6 |
|
Octane
Additives |
|
|
9.6 |
|
|
|
2.8 |
|
|
|
20.6 |
|
|
|
7.9 |
|
Pension credit |
|
|
1.7 |
|
|
|
0.1 |
|
|
|
3.5 |
|
|
|
0.1 |
|
Corporate costs |
|
|
(12.4 |
) |
|
|
(7.4 |
) |
|
|
(22.6 |
) |
|
|
(15.5 |
) |
|
|
|
26.2 |
|
|
|
30.8 |
|
|
|
51.6 |
|
|
|
57.7 |
|
Adjustment to fair value
of contingent consideration |
|
|
2.4 |
|
|
|
26.6 |
|
|
|
4.0 |
|
|
|
23.1 |
|
Loss on disposal of
subsidiary |
|
|
- |
|
|
|
- |
|
|
|
(1.4 |
) |
|
|
- |
|
Total operating
income |
$ |
|
28.6 |
|
$ |
|
57.4 |
|
$ |
|
54.2 |
|
$ |
|
80.8 |
|
Schedule 2B |
|
NON-GAAP
MEASURES |
|
Three Months EndedJune
30 |
|
Six Months EndedJune
30 |
(in
millions) |
|
|
2016 |
|
|
|
2015 |
|
|
|
2016 |
|
|
|
2015 |
|
|
|
|
|
|
|
|
|
|
Net income |
$ |
|
28.9 |
|
$ |
|
34.5 |
|
$ |
|
47.8 |
|
$ |
|
52.4 |
|
Interest expense, net |
|
|
0.7 |
|
|
|
0.9 |
|
|
|
1.5 |
|
|
|
1.9 |
|
Income taxes |
|
|
7.5 |
|
|
|
17.3 |
|
|
|
13.1 |
|
|
|
23.3 |
|
Depreciation and
amortization |
|
|
9.6 |
|
|
|
8.6 |
|
|
|
18.7 |
|
|
|
16.9 |
|
Adjustment to fair value
of contingent consideration |
|
|
(2.4 |
) |
|
|
(26.6 |
) |
|
|
(4.0 |
) |
|
|
(23.1 |
) |
EBITDA |
|
|
44.3 |
|
|
|
34.7 |
|
|
|
77.1 |
|
|
|
71.4 |
|
|
|
|
|
|
|
|
|
|
Fuel Specialties |
|
|
25.5 |
|
|
|
26.7 |
|
|
|
50.5 |
|
|
|
51.2 |
|
Performance Chemicals |
|
|
6.3 |
|
|
|
6.3 |
|
|
|
12.2 |
|
|
|
12.7 |
|
Oilfield Services |
|
|
2.9 |
|
|
|
9.4 |
|
|
|
1.8 |
|
|
|
15.3 |
|
Octane Additives |
|
|
9.8 |
|
|
|
2.9 |
|
|
|
20.9 |
|
|
|
8.1 |
|
Pension credit |
|
|
1.7 |
|
|
|
0.1 |
|
|
|
3.5 |
|
|
|
0.1 |
|
Corporate costs |
|
|
(10.4 |
) |
|
|
(6.0 |
) |
|
|
(18.6 |
) |
|
|
(12.8 |
) |
|
|
|
35.8 |
|
|
|
39.4 |
|
|
|
70.3 |
|
|
|
74.6 |
|
Loss on disposal of
subsidiary |
|
|
- |
|
|
|
- |
|
|
|
(1.4 |
) |
|
|
- |
|
Other net
income/(expense) |
|
|
8.5 |
|
|
|
(4.7 |
) |
|
|
8.2 |
|
|
|
(3.2 |
) |
EBITDA |
$ |
|
44.3 |
|
$ |
|
34.7 |
|
$ |
|
77.1 |
|
$ |
|
71.4 |
|
|
Schedule 3 |
|
INNOSPEC INC. AND SUBSIDIARIES |
CONSOLIDATED BALANCE SHEETS |
|
(in
millions) |
|
June 30,2016 |
|
December 31,2015 |
|
|
|
|
|
Assets |
|
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
Cash and cash
equivalents |
$ |
153.2 |
$ |
136.9 |
Short-term
investments |
|
- |
|
4.8 |
Trade and other
accounts receivable |
|
136.9 |
|
137.4 |
Inventories |
|
155.1 |
|
159.9 |
Current portion of
deferred tax assets |
|
8.5 |
|
8.8 |
Prepaid
expenses |
|
5.2 |
|
6.1 |
Prepaid income
taxes |
|
4.9 |
|
3.0 |
Other current
assets |
|
- |
|
1.8 |
Total current assets |
|
463.8 |
|
458.7 |
|
|
|
|
|
Net property, plant and
equipment |
|
78.0 |
|
76.0 |
Goodwill |
|
267.4 |
|
267.4 |
Other intangible
assets |
|
156.6 |
|
168.7 |
Deferred finance
costs |
|
1.2 |
|
1.4 |
Deferred tax assets, net
of current portion |
|
1.4 |
|
1.4 |
Pension asset |
|
60.4 |
|
55.5 |
Other non-current
assets |
|
2.3 |
|
0.9 |
Total assets |
$ |
1,031.1 |
$ |
1,030.0 |
|
|
|
|
|
Liabilities and
Stockholders’ Equity |
|
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
Accounts
payable |
|
50.7 |
|
52.2 |
Accrued
liabilities |
|
72.7 |
|
84.1 |
Current portion of
finance leases |
|
1.1 |
|
0.7 |
Current
portion of plant closure provisions |
|
5.7 |
|
6.4 |
Current portion of
accrued income taxes |
|
12.3 |
|
7.9 |
Current portion of
acquisition-related contingent consideration |
|
6.5 |
|
54.6 |
Current portion of
deferred income |
|
0.2 |
|
0.2 |
Total current
liabilities |
|
149.2 |
|
206.1 |
|
|
|
|
|
Long-term debt, net of
current portion |
|
154.0 |
|
133.0 |
Finance leases, net of
current portion |
|
2.8 |
|
2.4 |
Plant closure provisions,
net of current portion |
|
32.9 |
|
31.3 |
Unrecognized tax benefits,
net of current portion |
|
3.5 |
|
3.9 |
Deferred tax liabilities,
net of current portion |
|
38.6 |
|
37.7 |
Pension liability |
|
9.7 |
|
9.2 |
Deferred income, net of
current portion |
|
0.6 |
|
0.6 |
Other non-current
liabilities |
|
0.3 |
|
0.5 |
Equity |
|
639.5 |
|
605.3 |
Total liabilities and
equity |
$ |
1,031.1 |
$ |
1,030.0 |
|
|
Schedule 4 |
|
INNOSPEC INC. AND SUBSIDIARIES |
CONSOLIDATED STATEMENTS OF CASH FLOWS |
|
|
|
Six Months
EndedJune 30 |
(in
millions) |
|
|
2016 |
|
|
|
2015 |
|
|
|
|
|
|
|
|
|
|
Cash Flows from
Operating Activities |
|
|
|
|
|
|
|
|
|
Net income |
$ |
|
47.8 |
|
$ |
|
52.4 |
|
Adjustments to reconcile
net income to cash provided by operating activities: |
|
|
|
|
Depreciation and
amortization |
|
|
18.9 |
|
|
|
17.3 |
|
Adjustment to fair
value of contingent consideration |
|
|
(4.0 |
) |
|
|
(23.1 |
) |
Deferred taxes |
|
|
1.1 |
|
|
|
10.5 |
|
Changes in working
capital |
|
|
(6.6 |
) |
|
|
1.7 |
|
Excess tax benefit
from stock-based payment arrangements |
|
|
(0.1 |
) |
|
|
(0.7 |
) |
Accrued income
taxes |
|
|
1.6 |
|
|
|
0.5 |
|
Movement on plant
closure provisions |
|
|
0.9 |
|
|
|
1.4 |
|
Loss on disposal of
subsidiary |
|
|
1.4 |
|
|
|
- |
|
Cash contributions
to defined benefit pension plans |
|
|
(0.6 |
) |
|
|
(5.2 |
) |
Non-cash movements
on defined benefit pension plans |
|
|
(3.2 |
) |
|
|
0.3 |
|
Stock option
compensation |
|
|
1.9 |
|
|
|
1.8 |
|
Movements on
unrecognized tax benefits |
|
|
(0.4 |
) |
|
|
0.1 |
|
Movements on other
non-current assets and liabilities |
|
|
(1.7 |
) |
|
|
(1.9 |
) |
Net cash provided by
operating activities |
|
|
57.0 |
|
|
|
55.1 |
|
|
|
|
|
|
|
|
|
|
Cash Flows from
Investing Activities |
|
|
|
|
|
|
|
|
|
Capital expenditures |
|
|
(7.5 |
) |
|
|
(7.3 |
) |
Business combinations, net
of cash acquired |
|
|
1.8 |
|
|
|
- |
|
Internally developed
software |
|
|
- |
|
|
|
(5.1 |
) |
Purchase of short-term
investments |
|
|
- |
|
|
|
(3.7 |
) |
Sale of short-term
investments |
|
|
4.7 |
|
|
|
3.0 |
|
Net cash used in investing
activities |
|
|
(1.0 |
) |
|
|
(13.1 |
) |
|
|
|
|
|
|
|
|
|
Cash Flows from
Financing Activities |
|
|
|
|
|
|
|
|
|
Non-controlling
interest |
|
|
- |
|
|
|
0.4 |
|
Proceeds from revolving
credit facility |
|
|
21.0 |
|
|
|
- |
|
Repayments of finance
leases and term loans |
|
|
(0.4 |
) |
|
|
(0.4 |
) |
Payment for
acquisition-related contingent consideration |
|
|
(44.0 |
) |
|
|
- |
|
Excess tax benefit from
stock-based payment arrangements |
|
|
0.1 |
|
|
|
0.7 |
|
Dividend paid |
|
|
(8.1 |
) |
|
|
(7.3 |
) |
Issue of treasury
stock |
|
|
0.3 |
|
|
|
0.7 |
|
Repurchase of common
stock |
|
|
(8.2 |
) |
|
|
(11.4 |
) |
Net cash used in financing
activities |
|
|
(39.3 |
) |
|
|
(17.3 |
) |
Effect of foreign
currency exchange rate changes on cash |
|
|
(0.4 |
) |
|
|
(0.9 |
) |
Net change in cash and
cash equivalents |
|
|
16.3 |
|
|
|
23.8 |
|
Cash and cash equivalents
at beginning of period |
|
|
136.9 |
|
|
|
41.6 |
|
Reclassification of cash
to assets held for sale |
|
|
- |
|
|
|
(1.1 |
) |
Cash and cash equivalents
at end of period |
$ |
|
153.2 |
|
$ |
|
64.3 |
|
|
|
|
|
|
|
|
|
|
Amortization of deferred finance costs of $0.2
million (2015 - $0.4 million) are included in depreciation and
amortization in the cash flow statement but in interest expense in
the income statement.
Contacts:
Brian Watt
Innospec Inc.
+44-151-355-3611
Brian.Watt@innospecinc.com
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