- Net sales of $288.2 million were up 4.1% versus the prior year
quarter’s sales of $276.8 million.
- Net income of $45.3 million was up 99.6% versus net income in
the prior year quarter of $22.7 million; net income as a percentage
of sales was 15.7%, compared to 8.2% in the prior year quarter;
diluted earnings per share were $1.08 compared to $0.54.
- Adjusted earnings of $47.2 million were up 12.6% versus
adjusted earnings in the prior year quarter of $41.9 million;
diluted adjusted earnings per share were $1.12 versus $0.99 in the
prior year quarter.
- Adjusted EBITDA of $92.2 million were up 10.4% compared to
first quarter 2019 adjusted EBITDA of $83.5 million; adjusted
EBITDA margin of 32.0% increased 180 basis points versus first
quarter 2019.
- Operating cash flow of $60.2 million versus -$8 million in the
prior year quarter; free cash flow of $40.7 million versus -$36.1
million in the prior year quarter.
- Total debt to last twelve months’ net income ratio is 7.25; net
debt to last twelve months’ adjusted EBITDA ratio is 2.74.
- Company revises fiscal year 2020 guidance to sales between
$1.10 billion and $1.20 billion and adjusted EBITDA between $310
million and $350 million.
- Company expects that second quarter 2020 revenue will be down
25% to 30% and adjusted EBITDA will be down 35% to 40%.
The results and guidance in this release
include Non-GAAP financial measures. Refer to the section entitled
“Use of Non-GAAP Financial Measures” within this release.
Ingevity Corporation (NYSE:NGVT) today reported first quarter
net sales of $288.2 million, representing an increase of 4.1%
versus $276.8 million in the prior year’s first quarter. Net income
of $45.3 million, increased 99.6% versus $22.7 million in the
previous year’s quarter. Ingevity’s first quarter net income margin
of 15.7% was up from 8.2% in the prior year. The first quarter
diluted earnings per share were $1.08 compared to $0.54 in the
prior year period.
Adjusted earnings of $47.2 million were up 12.6% versus prior
year quarter of $41.9 million. Diluted adjusted earnings per share
were $1.12, which exclude, net of tax, $0.04 related to both
restructuring and other (income) expenses, net, and costs
associated with the acquisition of the Capa® caprolactone business,
net of discrete tax provision recognized during the quarter. This
compares to diluted adjusted earnings per share of $0.99 in the
prior year quarter. Adjusted earnings before interest, taxes,
depreciation and amortization (EBITDA) of $92.2 million were up
10.4% versus first quarter 2019 adjusted EBITDA of $83.5 million.
Adjusted EBITDA margin of 32.0% was up 180 basis points from the
prior year’s first quarter adjusted EBITDA margin of 30.2%.
“Ingevity delivered a strong first quarter, despite initial
impacts from the coronavirus, or COVID-19,” said Rick Kelson,
Ingevity’s chairman of the board, and interim president and CEO.
“We posted adjusted EBITDA that were 10% higher on net sales that
were up 4%, and increased our adjusted EBITDA margin by 180 basis
points. What’s more, we generated outstanding free cash flow of $41
million. This enabled us to reduce our leverage which now stands at
2.7 times net debt to adjusted EBITDA.”
Kelson said that the effects of the coronavirus on first quarter
financial results were not as severe as the company had expected in
mid-February. “The reduction in Chinese auto demand muted our
Performance Materials results to the extent we expected; however,
most other COVID-19 related impacts in Performance Chemicals appear
to have been delayed,” he said. “We expect the effects of the
coronavirus to more significantly begin in the second quarter.”
Kelson said that the company’s balance sheet is strong and that
the company recently withdrew $250 million from its revolver out of
an abundance of caution.
Performance Chemicals
First quarter 2020 sales in the Performance Chemicals segment
were $167.1 million, down $0.6 million, or 0.4%, versus the first
quarter 2019. Segment EBITDA were $31.0 million, down $1.3 million,
or 4.0%, versus the prior year quarter segment EBITDA. Segment
EBITDA margin declined 70 basis points to 18.6%.
“Sales in the Performance Chemicals segment were essentially
flat as increases in Pavement and Oilfield Technologies, and the
addition of the Engineered Polymers business, were offset by
weakness in Industrial Specialties applications,” said Kelson.
Sales decreased in Industrial Specialties applications due to
demand weakness, particularly in China, and continued pressure on
rosin markets. Sales to new Middle East and China Oilfield
Technologies customers drove a slight increase, despite reduced
North American drilling driven by reduced demand and lower oil
prices. Sales to Pavement Technologies applications were up solidly
as the paving season in North America jump-started in combination
with strong growth in several South American countries. Sales for
the Engineered Polymers product line were down on a pro forma
quarter-over-quarter comparison largely due to a strong first
quarter in 2019. Nonetheless, Kelson said, the business performed
well in the quarter due to increased sales of thermoplastics,
particularly in North America and Asia.
Segment EBITDA were impacted by slightly lower volumes, price /
mix impacts and foreign currency exchange, but were largely offset
by reduced spending.
Performance Materials
First quarter 2020 sales in the Performance Materials segment
were $121.1 million, up $12.0 million, or 11.0%, versus the first
quarter 2019. Segment EBITDA were $61.2 million, up $10.0 million,
or 19.5%, versus the prior year segment EBITDA. Segment EBITDA
margin increased 360 basis points to 50.5%.
“The Performance Materials segment grew respectably in the
quarter,” said Kelson. “Revenues in China increased significantly
in the year-over-year quarter as automakers there have essentially
completed the implementation of the China 6 standard. That said,
the significant downturn in auto production in China caused by the
coronavirus impacted our sales sharply in February and muted what
could have been an extraordinary quarterly sales result.
Fortunately, Chinese automakers are now rapidly coming back on
line.”
Kelson said the segment experienced strong growth in sales of
both its base automotive activated carbon products and its
‘honeycomb’ scrubber products as automotive customers complete
implementation of the U.S. and Canadian regulatory standards. This
occurred despite moderate impacts in the quarter related to the
current coronavirus-driven OEM shutdowns.
Segment EBITDA increased due to improvements in price and mix.
The segment also benefitted from reduced production costs. These
improvements were partially offset by modest increases in SG&A
and other expenses.
“Overall, while revenue growth was somewhat muted in the segment
versus our expectations,” Kelson said, “our execution was excellent
and led to a sharp increase in margins.”
Outlook
To account for the uncertainties related to COVID-19, Ingevity
revised and broadened its fiscal year 2020 guidance to sales
between $1.10 billion and $1.20 billion and adjusted EBITDA between
$310 million and $350 million. In addition, the company provided
one-time information on the coming quarter, and expects that second
quarter 2020 revenue will be down 25% to 30% versus the prior
year’s quarter and adjusted EBITDA will be down 35% to 40% versus
the prior year.
“We’re working from a position of financial strength, and we’re
working to control what we can control in a tumultuous
environment,” said Kelson. “We’re largely reliant either way on
conditions in our key end-use applications, particularly the
automotive industry. As auto OEMs and customers in other key
industries important to Ingevity recover, we will be prepared and
in a solid position to bounce back with them.”
Ingevity: Purify, Protect and Enhance
Ingevity provides specialty chemicals, high-performance carbon
materials and engineered polymers that purify, protect, and enhance
the world around us. Through a team of talented and experienced
people, Ingevity develops, manufactures, and brings to market
products and processes that help customers solve complex problems.
These products are used in a variety of demanding applications,
including asphalt paving, oil exploration and production,
agrochemicals, adhesives, lubricants, publication inks, coatings,
elastomers, bio-plastics and automotive components that reduce
gasoline vapor emissions. Headquartered in North Charleston, South
Carolina, Ingevity operates from 25 locations around the world and
employs approximately 1,850 people. The company is traded on the
New York Stock Exchange (NYSE: NGVT). For more information visit
www.ingevity.com.
Additional Information
The company will host a live webcast on Thursday, April 30,
2020, at 10 a.m. (Eastern Time) to discuss first quarter fiscal
results. The webcast can be accessed through the investors section
of Ingevity’s website (www.ingevity.com), or via this link:
Ingevity Q1 2020 webcast. You may also listen to the conference
call by dialing 877-407-2991 (inside the U.S.) or 201-389-0925
(outside the U.S.), at least 10 minutes prior to the start of the
event. Information on how to access the webcast and conference
call, along with a slide deck containing other relevant financial
and statistical information, will be posted to the Investors
section of Ingevity’s website prior to the call. For those unable
to join the live event, a replay of the webcast will be available
beginning at approximately 2 p.m. (Eastern Time) on April 30, 2020,
through May 30, 2020: Ingevity Q1 2020 webcast replay.
Use of Non-GAAP Financial Measures
Ingevity has presented certain financial measures which have not
been prepared in accordance with U.S. generally accepted accounting
principles (GAAP). Definitions of our non-GAAP financial measures
and a reconciliation to the most directly comparable financial
measure calculated in accordance with GAAP are included in the
financial schedules accompanying this news release, under the
section entitled "Non-GAAP Financial Measures."
A reconciliation of net income to adjusted EBITDA as projected
for 2020 is not provided. Ingevity does not forecast net income as
it cannot, without unreasonable effort, estimate or predict with
certainty various components of net income. These components, net
of tax, include further restructuring and other income (charges),
net; additional acquisition and other related costs in connection
with the acquisition of Perstorp Holding AB’s Capa caprolactone
business; and additional pension and postretirement settlement and
curtailment (income) charges. Additionally, discrete tax items
could drive variability in our projected effective tax rate. All of
these components could significantly impact such financial
measures. Further, in the future, other items with similar
characteristics to those currently included in adjusted EBITDA,
that have a similar impact on comparability of periods, and which
are not known at this time, may exist and impact adjusted
EBITDA.
Cautionary Statements About Forward-Looking
Statements
This press release contains “forward-looking statements” within
the meaning of the Securities Exchange Act of 1934, as amended, and
the Private Securities Litigation Reform Act of 1995. Such forward
looking statements generally include the words “may,” “could,”
“should,” “believes,” “plans,” “intends,” “targets,” “will,”
“expects,” “suggests,” “anticipates,” “outlook,” “continues,”
“forecast,” “prospect,” “potential” or similar expressions.
Forward-looking statements may include, without limitation,
expected financial positions, results of operations and cash flows;
financing plans; business strategies and expectations; operating
plans; impact of coronavirus; synergies and the potential benefits
of the acquisition of Perstorp Holding AB’s Capa® caprolactone
business (the “acquisition”); capital and other expenditures;
competitive positions; growth opportunities for existing products;
benefits from new technology and cost-reduction initiatives, plans
and objectives; markets for securities and expected future
repurchases of shares, including statements about the manner,
amount and timing of repurchases. Like other businesses, Ingevity
is subject to risks and uncertainties that could cause its actual
results to differ materially from its expectations or that could
cause other forward-looking statements to prove incorrect. Factors
that could cause actual results to materially differ from those
contained in the forward-looking statements, or that could cause
other forward-looking statements to prove incorrect, include,
without limitation, adverse effects from the COVID-19 pandemic;
risks that the expected benefits from the acquisition may not be
realized or will not be realized in the expected time period, the
risk that the acquired business will not be integrated successfully
and the risk of significant transaction costs and unknown or
understated liabilities; adverse effects of general economic and
financial conditions; risks related to international sales and
operations; impacts of currency exchange rates and currency
devaluation; compliance with U.S. and foreign regulations
concerning our operations outside the U.S.; changes in trade
policy, including the imposition of tariffs; the impact of the
United Kingdom’s withdrawal from the European Union; attracting and
retaining key personnel; adverse conditions in the global
automotive market or adoption of alternative and new technologies;
competition from producers of alternative products and new
technologies, and new or emerging competitors; competition from
infringing intellectual property activity; worldwide air quality
standards; a decrease in government infrastructure spending;
declining volumes and downward pricing in the printing inks market;
the limited supply of or lack of access to sufficient crude tall
oil; a prolonged period of low energy prices; the provision of
services by third parties at several facilities; natural disasters,
such as hurricanes, winter or tropical storms, earthquakes,
tornados, floods, fires; other unanticipated problems such as labor
difficulties, equipment failure or unscheduled maintenance and
repair; protection of intellectual property and proprietary
information; information technology security breaches and other
disruptions; complications with designing and implementing our new
enterprise resource planning system; government policies and
regulations, including, but not limited to, those affecting the
environment, climate change, tax policies, tariffs and the
chemicals industry; and lawsuits arising out of environmental
damage or personal injuries associated with chemical or other
manufacturing processes.
These and other important factors that could cause actual
results or events to differ materially from those expressed in
forward-looking statements that may have been made in this document
are and will be more particularly described in our filings with the
U.S. Securities and Exchange Commission, including our Form 10-K
for the year ended December 31, 2019 and our other periodic
filings. Readers are cautioned not to place undue reliance on
Ingevity’s projections and forward-looking statements, which speak
only as the date thereof. Ingevity undertakes no obligation to
publicly release any revision to the projections and
forward-looking statements contained in this press release, or to
update them to reflect events or circumstances occurring after the
date of this press release.
INGEVITY CORPORATION
Condensed Consolidated
Statements of Operations (Unaudited)
Three Months Ended March
31,
In millions, except per share
data
2020
2019
Net sales
$
288.2
$
276.8
Cost of sales
173.6
179.7
Gross profit
114.6
97.1
Selling, general and administrative
expenses
38.5
39.1
Research and technical expenses
6.2
5.1
Restructuring and other (income) charges,
net
0.5
—
Acquisition-related costs
1.3
22.8
Other (income) expense, net
2.0
(3.7
)
Interest expense, net
10.9
11.1
Income (loss) before income taxes
55.2
22.7
Provision (benefit) for income taxes
9.9
—
Net income (loss)
45.3
22.7
Per share data
Basic earnings (loss) per share
$
1.09
$
0.54
Diluted earnings (loss) per share
1.08
0.54
Weighted average shares
outstanding
Basic
41.7
41.7
Diluted
42.0
42.2
INGEVITY CORPORATION
Segment Operating Results
(Unaudited)
Three Months Ended March
31,
In millions
2020
2019
Net sales
Performance Materials
$
121.1
$
109.1
Automotive Technologies product line
112.9
99.7
Process Purification product line
8.2
9.4
Performance Chemicals
$
167.1
$
167.7
Oilfield Technologies product line
30.2
29.2
Pavement Technologies product line
20.7
18.5
Industrial Specialties product line
79.9
95.8
Engineered Polymers product line(1)
36.3
24.2
Total net sales
$
288.2
$
276.8
Segment EBITDA (2)
Performance Materials
$
61.2
$
51.2
Performance Chemicals
31.0
32.3
Total segment EBITDA (2)
$
92.2
$
83.5
Interest expense, net
(10.9
)
(11.1
)
(Provision) benefit for income taxes
(9.9
)
—
Depreciation and amortization -
Performance Materials
(7.2
)
(5.8
)
Depreciation and amortization -
Performance Chemicals
(17.1
)
(12.7
)
Restructuring and other income (charges),
net (3)
(0.5
)
—
Acquisition and other-related costs
(4)
(1.3
)
(31.2
)
Net income (loss)
$
45.3
$
22.7
_______________
(1)
Engineered Polymers product line was
acquired on February 13, 2019.
(2)
Segment EBITDA is the primary measure used
by our chief operating decision maker to evaluate the performance
of and allocate resources among our operating segments. Segment
EBITDA is defined as segment revenue less segment operating
expenses (segment operating expenses consist of costs of sales,
selling, general and administrative expenses, other (income)
expense, net, excluding depreciation and amortization). We have
excluded the following items from segment EBITDA: interest expense,
net associated with corporate debt facilities, income taxes,
depreciation, amortization, restructuring and other (income)
charges, net, acquisition and other-related costs, pension and
postretirement settlement and curtailment (income) charge.
(3)
For the three months ended March, 31 2020,
restructuring charges of $0.2 million relate to Performance
Chemicals and other charges of $0.3 million relate to business
transformation initiative costs.
(4)
Costs incurred to complete and integrate
the acquisition noted above into our Performance Chemicals segment
are expensed as incurred on our condensed consolidated statement of
operations. The following table summarizes the costs incurred
associated with these combined activities.
Three Months Ended March
31,
In millions
2020
2019
Legal and professional service fees
$
1.3
$
10.1
Loss on hedging purchase price
—
12.7
Acquisition-related costs
$
1.3
$
22.8
Inventory fair value step-up amortization
(i)
—
8.4
Acquisition and other-related
costs
$
1.3
$
31.2
_______________
(i) Included within "Cost of sales" on the
condensed consolidated statement of operations.
INGEVITY CORPORATION
Condensed Consolidated Balance
Sheets
In millions
March 31, 2020
December 31, 2019
Assets
(Unaudited)
Cash and cash equivalents
$
302.7
$
56.5
Accounts receivable, net
140.8
150.0
Inventories, net
236.2
212.5
Prepaid and other current assets
44.8
44.2
Current assets
724.5
463.2
Property, plant and equipment, net
659.7
664.7
Goodwill
416.8
436.4
Other intangibles, net
370.3
396.2
Restricted investment
72.2
72.6
Other assets
109.8
108.6
Total Assets
2,353.3
2,141.7
Liabilities
Accounts payable
$
105.0
$
99.1
Accrued expenses
30.1
33.3
Other current liabilities
72.6
83.1
Current liabilities
207.7
215.5
Long-term debt including finance lease
obligations
1,467.8
1,228.4
Deferred income taxes
104.3
100.3
Other liabilities
71.4
66.7
Total Liabilities
1,851.2
1,610.9
Equity
502.1
530.8
Total Liabilities and Equity
$
2,353.3
$
2,141.7
INGEVITY CORPORATION
Condensed Consolidated
Statements of Cash Flows (Unaudited)
Three Months Ended March
31,
In millions
2020
2019
Cash provided by (used in) operating
activities:
Net income (loss)
$
45.3
$
22.7
Adjustments to reconcile net income (loss)
to cash provided by (used in) operating activities:
Depreciation and amortization
24.3
18.5
Deferred income taxes
6.5
(0.4
)
Share-based compensation
0.8
4.1
Pension and other postretirement benefit
costs
0.4
0.3
Other non-cash items
5.0
0.1
Changes in operating assets and
liabilities, net of effect of acquisitions:
Accounts receivable, net
7.7
(16.1
)
Inventories, net
(25.9
)
(15.0
)
Prepaid and other current assets
(0.2
)
0.6
Planned major maintenance outage
(0.8
)
(2.0
)
Accounts payable
9.4
15.4
Accrued expenses
(3.2
)
(12.4
)
Accrued payroll and employee benefits
(12.4
)
(26.6
)
Income taxes
2.0
(0.2
)
Changes in other operating assets and
liabilities, net
1.3
3.0
Net cash provided by (used in) operating
activities
$
60.2
$
(8.0
)
Cash provided by (used in) investing
activities:
Capital expenditures
$
(19.5
)
$
(28.1
)
Payments for acquired businesses, net of
cash acquired
—
(537.9
)
Other investing activities, net
(0.7
)
(3.3
)
Net cash provided by (used in) investing
activities
$
(20.2
)
$
(569.3
)
Cash provided by (used in) financing
activities:
Proceeds from revolving credit
facility
$
346.1
$
714.2
Proceeds from long-term borrowings
—
375.0
Payments on revolving credit facility
(102.3
)
(421.1
)
Payments on long-term borrowings
(4.7
)
(113.1
)
Debt issuance costs
—
(1.8
)
Borrowings (repayments) of notes payable
and other short-term borrowings, net
(0.8
)
2.1
Tax payments related to withholdings on
vested equity awards
(3.1
)
(14.3
)
Proceeds and withholdings from share-based
compensation plans, net
0.4
1.7
Repurchases of common stock under publicly
announced plan
(32.4
)
(3.3
)
Net cash provided by (used in) financing
activities
$
203.2
$
539.4
Increase (decrease) in cash, cash
equivalents, and restricted cash
243.2
(37.9
)
Effect of exchange rate changes on
cash
2.9
(0.1
)
Change in cash, cash equivalents, and
restricted cash(1)
246.1
(38.0
)
Cash, cash equivalents, and restricted
cash at beginning of period
64.6
77.5
Cash, cash equivalents, and restricted
cash at end of period (1)
$
310.7
$
39.5
(1) Includes restricted cash of $8.0
million and $1.1 million and cash and cash equivalents of $302.7
million and $38.4 million of March 31, 2020 and 2019, respectively.
Restricted cash is included within "Prepaid and other current
assets" within the condensed consolidated balance sheets.
Supplemental cash flow
information:
Cash paid for interest, net of capitalized
interest
$
16.9
$
14.4
Cash paid for income taxes, net of
refunds
1.4
0.5
Purchases of property, plant and equipment
in accounts payable
5.1
6.6
Leased assets obtained in exchange for new
finance lease liabilities
—
—
Leased assets obtained in exchange for new
operating lease liabilities
4.2
—
Ingevity Corporation
Non-GAAP Financial Measures
Ingevity has presented certain financial measures, defined
below, which have not been prepared in accordance with U.S.
generally accepted accounting principles (“GAAP”) and has provided
a reconciliation to the most directly comparable financial measure
calculated in accordance with GAAP. These financial measures are
not meant to be considered in isolation or as a substitute for the
most directly comparable financial measure calculated in accordance
with GAAP.
We believe these non-GAAP financial measures provide management
as well as investors, potential investors, securities analysts and
others with useful information to evaluate the performance of the
business, because such measures, when viewed together with our
financial results computed in accordance with GAAP, provide a more
complete understanding of the factors and trends affecting our
historical financial performance and projected future results.
Ingevity uses the following non-GAAP measures:
Adjusted earnings (loss) is defined as
net income (loss) plus restructuring and other (income) charges,
net, acquisition and other-related costs, pension and
postretirement settlement and curtailment (income) charges and the
income tax expense (benefit) on those items, less the provision
(benefit) from certain discrete tax items.
Diluted adjusted earnings (loss) per
share is defined as diluted earnings (loss) per common share
plus restructuring and other (income) charges, net per share,
acquisition and other-related costs per share, pension and
postretirement settlement and curtailment (income) charges per
share and the income tax expense (benefit) per share on those
items, less the per share tax provision (benefit) from certain
discrete tax items per share.
Adjusted EBITDA is defined as net
income (loss) plus provision (benefit) for income taxes, interest
expense, net, depreciation and amortization, restructuring and
other (income) charges, net, acquisition and other-related costs,
and pension and postretirement settlement and curtailment (income)
charges.
Adjusted EBITDA Margin is defined as
Adjusted EBITDA divided by Net sales
Net Debt is defined as the sum of
short-term debt, current maturities of long-term debt and long-term
debt less the sum of cash and cash equivalents and restricted
investment.
Net Debt Ratio is defined as Net Debt
divided by last twelve months Adjusted EBITDA, inclusive of
acquisition-related pro forma adjustments, as applicable.
Free Cash Flow is defined as the sum
of cash provided by (used in) the following items: operating
activities less capital expenditures
Ingevity also uses the above financial measures as the primary
measures of profitability used by managers of the business. In
addition, Ingevity believes Adjusted EBITDA and Adjusted EBITDA
Margin are useful measures because they exclude the effects of
financing and investment activities as well as non-operating
activities. None of these non-GAAP financial measures are intended
to replace the presentation of financial results in accordance with
GAAP and investors should consider the limitations associated with
these non-GAAP measures, including the potential lack of
comparability of these measures from one company to another.
Reconciliations of these non-GAAP financial measures are set forth
within the following pages.
A reconciliation of net income to adjusted EBITDA as projected
for 2020 is not provided. Ingevity does not forecast net income as
it cannot, without unreasonable effort, estimate or predict with
certainty various components of net income. These components, net
of tax, include further restructuring and other income (charges),
net; additional acquisition and other-related costs in connection
with the acquisition of Perstorp Holding AB’s Capa caprolactone
business; and additional pension and postretirement settlement and
curtailment (income) charges. Additionally, discrete tax items
could drive variability in our projected effective tax rate. All of
these components could significantly impact such financial
measures. Further, in the future, other items with similar
characteristics to those currently included in adjusted EBITDA,
that have a similar impact on comparability of periods, and which
are not known at this time, may exist and impact adjusted
EBITDA.
INGEVITY CORPORATION
Reconciliation of Non-GAAP Financial
Measures
Reconciliation of Net Income
(Loss) (GAAP) to Adjusted Earnings (Loss) (Non-GAAP)
Three Months Ended March
31,
In millions, except per share data
(unaudited)
2020
2019
Net income (loss) (GAAP)
$
45.3
$
22.7
Restructuring and other (income) charges,
net
0.5
—
Acquisition and other-related costs
1.3
31.2
Tax effect on items above
(0.4
)
(5.3
)
Certain discrete tax provision (benefit)
(1)
0.5
(6.7
)
Adjusted earnings (loss)
(Non-GAAP)
$
47.2
$
41.9
Diluted earnings (loss) per common
share (GAAP)
$
1.08
$
0.54
Restructuring and other (income)
charges
0.01
—
Acquisition and other-related costs
0.03
0.74
Tax effect on items above
(0.01
)
(0.13
)
Certain discrete tax provision
(benefit)
0.01
(0.16
)
Diluted adjusted earnings (loss) per
share (Non-GAAP)
$
1.12
$
0.99
Weighted average common shares outstanding
- Diluted
42.0
42.2
_______________
(1) Represents certain discrete tax items
such as excess tax benefits on stock compensation and impacts of
changes associated with U.S. Tax Reform. Management believes
excluding these discrete tax items assists investors, potential
investors, securities analysts, and others in understanding the tax
provision and the effective tax rate related to continuing
operating results thereby providing useful supplemental information
about operational performance.
INGEVITY CORPORATION
Reconciliation of Non-GAAP Financial
Measures
Reconciliation of Net Income
(Loss) (GAAP) to Adjusted EBITDA (Non-GAAP)
Three Months Ended March
31,
In millions, except percentages
(unaudited)
2020
2019
Net income (loss) (GAAP)
$
45.3
$
22.7
Provision (benefit) for income taxes
9.9
—
Interest expense, net
10.9
11.1
Depreciation and amortization
24.3
18.5
Restructuring and other (income) charges,
net
0.5
—
Acquisition and other-related costs
1.3
31.2
Adjusted EBITDA (Non-GAAP)
$
92.2
$
83.5
Net sales
$
288.2
$
276.8
Net income (loss) margin
15.7
%
8.2
%
Adjusted EBITDA margin
32.0
%
30.2
%
INGEVITY CORPORATION
Reconciliation of Non-GAAP Financial
Measures
Calculation of Free Cash Flow
(Non-GAAP)
Three months ended March
31,
In millions
(unaudited)
2020
2019
Cash Flow from Operations
$
60.2
(8.0
)
Less: Capital Expenditures
19.5
28.1
Free Cash Flow
$
40.7
$
(36.1
)
INGEVITY CORPORATION
Reconciliation of Non-GAAP Financial
Measures
Calculation of Total Debt to
Net Income (Loss) Ratio (GAAP) to Net Debt to Adjusted EBITDA Ratio
(Non-GAAP)
In millions, except ratios
(unaudited)
March 31, 2020
Notes payable and current maturities of
long-term debt
21.6
Long-term debt including finance lease
obligations
1,467.8
Debt issuance costs
6.5
Total Debt
1,495.9
Less:
Cash and cash equivalents plus restricted
cash (1)
310.4
Restricted investment
72.2
Net Debt
1,113.3
Total Debt to Net income (loss) Ratio
(GAAP)
Net income (loss)
Twelve months ended December 31, 2019
$
183.7
Three months ended March 31, 2019
(22.7
)
Three months ended March 31, 2020
45.3
Net income (loss) - last twelve months
(LTM) as of March 31, 2020
$
206.3
Total debt to Net income (loss) ratio
(GAAP)
7.25
x
Net Debt Ratio (Non GAAP)
Adjusted EBITDA
Twelve months ended December 31, 2019
$
396.9
Three months ended March 31, 2019
(83.5)
Three months ended March 31, 2020
92.2
Adjusted EBITDA - LTM as of March 31,
2020
$
405.6
Net debt ratio (Non GAAP)
2.74
x
_______________
(1) Includes $7.7 million of Restricted
Cash related to our New Market Tax Credit arrangement.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200429005887/en/
Jack Maurer
843-746-8242 jack.maurer@ingevity.com
Investors: Dan
Gallagher 843-740-2126 daniel.gallagher@ingevity.com
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