HIGHLIGHTS: (comparisons versus prior year period)
- Net sales of $481.8 million, up 15%
- Net income of $35.5 million and diluted earnings per share
(EPS) of $0.97; adjusted earnings of $51.6 million and diluted
adjusted EPS of $1.41
- Adjusted EBITDA of $120.7 million and adjusted EBITDA margin of
25.1%
- Operating cash flow of $48.4 million with free cash flow of
$26.7 million
- Initiated cost reduction actions with anticipated annualized
savings of approximately $35 million with $20 million expected to
be realized in 2023
- Adjusted 2023 guidance for sales between $1.6 billion to $1.7
billion and adjusted EBITDA between $390 million to $420
million
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 its financial
results for the second quarter 2023.
Second quarter net sales of $481.8 million rose 15% versus the
prior year quarter as price increases across all segments, higher
volumes in Performance Materials and the Performance Chemicals’
Pavement Technologies business line, including the addition of the
Ozark road markings acquisition (Ozark), more than offset weaker
volumes in the Performance Chemicals’ Industrial Specialties
business line and Advanced Polymer Technologies.
Net income of $35.5 million and diluted earnings per share (EPS)
of $0.97 decreased 41% and 37%, respectively, and were negatively
impacted by restructuring and other charges recorded during the
quarter as well as higher interest and integration-related expenses
associated with the Ozark acquisition. Adjusted EBITDA remained
flat versus the prior year quarter at $120.7 million with adjusted
EBITDA margin of 25.1%.
“This quarter we delivered double-digit revenue growth and
maintained strong adjusted EBITDA margins in a challenging economic
environment. Sales in our Performance Materials segment and
Pavement Technologies business line were up due to an improved
automotive market and a strong paving season, which more than
offset weakness in the Industrial Specialties business line,
particularly in our rosin end markets. In Advanced Polymer
Technologies, EBITDA more than tripled as we implemented margin
improvement initiatives and benefited from lower input costs,” said
John Fortson, president and CEO. “Our strong results in this
environment reflect our broad portfolio of products that serve
diverse end markets across all regions. In addition, we began to
take actions to better align our cost structure with current
economic conditions and the continuing margin pressure on crude
tall oil (CTO) based products. We remain disciplined in managing
costs while delivering specialty products and technologies that
purify, protect, and enhance the world around us.”
Performance Chemicals
Sales in the Performance Chemicals segment were $284.0 million,
up 17% from prior year.
Industrial Specialties posted sales of $143.1 million, down 14%,
due to lower volumes attributed primarily to weaker demand in our
rosin end markets. Pavement Technologies sales increased to $140.9
million, driven by both higher volume and pricing in legacy
pavement applications and sales associated with Ozark.
Segment EBITDA was $44.9 million, down 27%, reflecting lower
sales volumes in Industrial Specialties and higher CTO cost,
resulting in a segment EBITDA margin of 15.8%.
“Pavement Technologies saw increased sales from our Ozark
acquisition bolstered by a record quarter in our legacy business as
a result of technology adoption and regional expansion, driving
increased volumes that supported higher prices. Industrial
Specialties sales continued to feel the impact of reduced customer
demand, particularly in rosin end markets, and lingering
destocking,” said Fortson. “The segment’s EBITDA decline and margin
compression reflect the elevated CTO pricing we are experiencing
coupled with weaker rosin end market demand and we expect to feel
these pressures in the segment for the remainder of the year. We
continue to see success in our alternative fatty acid-based
products in the marketplace, executing our strategy to diversify
our raw material stream in this segment.”
Advanced Polymer Technologies
Sales in the Advanced Polymer Technologies (APT) segment were
flat at $53.2 million as we saw strength in our key growth areas of
automotive and bioplastics, which was offset by lower volumes
primarily in footwear. Segment EBITDA more than tripled to $11.6
million and segment EBITDA margin improved to 21.8% due to our
margin improvement initiatives and lower input costs.
“APT had a solid quarter with year over year pricing gains and
growth in automotive and bioplastics helping offset volume weakness
in footwear and industrials,” said Fortson. “Pricing actions and
cost management, in addition to improved input costs, particularly
energy, overcame volume softness and FX headwinds, resulting in a
significant margin improvement, a true reflection of our APT team’s
focus on delivering improved profitability.”
Performance Materials
Sales in Performance Materials were $144.6 million in the
quarter, up 18% as the global automotive market improved versus the
prior year. Segment EBITDA was $64.2 million, up 16% versus the
prior year quarter as a result of improved volumes, with segment
EBITDA margins of 44.4%.
“Performance Materials saw improved volumes of automotive carbon
as last year’s volumes were negatively impacted by Covid-related
shutdowns in China,” said Fortson. “We see some positive signs in
the North America market, but the outlook for Europe and Asia is
less clear so we are managing inventory carefully until auto
production trends become more consistent.”
Liquidity/Other
Second quarter operating cash flow was $48.4 million with free
cash flow of $26.7 million reflecting higher inventory driven by
increased CTO prices and reduced rosin demand. Share repurchases
for the quarter were $58.7 million and $353.4 million remains
available under the July 2022 $500 million Board authorization. Net
leverage was 3.2 times, reflecting increased borrowing for the
Ozark acquisition in Q4 2022.
Full Year 2023 Guidance
“As you see in our results, most of our business lines delivered
a strong quarter. However, the high costs of CTO are pressuring
Industrial Specialties’ profitability, and the weaker industrial
environment is not providing us with the opportunity to fully
recoup these costs,” said Fortson. “Therefore, we are adjusting our
full-year guidance to sales between $1.6 billion and $1.7 billion,
and adjusted EBITDA between $390 million and $420 million. This
guidance reflects challenges we see in 2023 and reinforces our
confidence in our long-term strategy, which includes the AFA
transition that will diversify our raw material stream, global
expansion in Pavement which we are already executing today, and
higher adoption of sustainable products such as those delivered by
our APT and Performance Materials segments.”
Ingevity: Purify, Protect and Enhance
Ingevity provides products and technologies that purify, protect
and enhance the world around us. Through a team of talented and
experienced people, we develop, manufacture and bring to market
solutions that help customers solve complex problems and make the
world more sustainable. We operate in three reporting segments:
Performance Chemicals, which includes specialty chemicals and
pavement technologies; Advanced Polymer Technologies, which
includes biodegradable plastics and polyurethane materials; and
Performance Materials, which includes activated carbon. Our
products are used in a variety of demanding applications, including
adhesives, agrochemicals, asphalt paving, bioplastics, coatings,
elastomers, lubricants, pavement markings, publication inks, oil
exploration and production and automotive components. Headquartered
in North Charleston, South Carolina, Ingevity operates from 31
countries around the world and employs approximately 2,050 people.
The company’s common stock is traded on the New York Stock Exchange
(NYSE:NGVT). For more information, visit Ingevity.com. Follow
Ingevity on LinkedIn.
Additional Information
The company will host a live webcast on Thursday, August 3, at
10:00 a.m. (Eastern) to discuss second quarter 2023 fiscal results.
The webcast can be accessed here or on the investors section of
Ingevity’s website. You may also listen to the conference call by
dialing 833 470 1428 (inside the U.S.) or 929 526 1599 (outside the
U.S.) and entering access code 566352. 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 Ingevity’s investor site prior to the call. For those
unable to join the live event, a recording will be available
beginning at approximately 2:00 p.m. (Eastern) on August 3, 2023,
through August 2, 2024, at this replay link.
Use of non-GAAP financial measures: This press release
includes certain non‐GAAP financial measures intended to
supplement, not substitute for, comparable GAAP measures.
Reconciliations of non‐GAAP financial measures to GAAP financial
measures are provided within the Appendix to this presentation.
Investors are urged to consider carefully the comparable GAAP
measures and the reconciliations to those measures provided. The
company does not attempt to provide reconciliations of
forward-looking non-GAAP guidance to the comparable GAAP measure
because the impact and timing of the factors underlying the
guidance assumptions are inherently uncertain and difficult to
predict and are unavailable without unreasonable efforts. In
addition, Ingevity believes such reconciliations would imply a
degree of certainty that could be confusing to investors.
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
statements generally include the words “will,” “plans,” “intends,”
“targets,” “expects,” “outlook,” "guidance," “believes,”
“anticipates” or similar expressions. Forward-looking statements
may include, without limitation, the potential benefits of any
acquisition or investment transaction, expected financial
positions, expected financial positions, guidance, results of
operations and cash flows; financing plans; business strategies and
expectations; operating plans; impact of COVID-19; capital and
other expenditures; competitive positions; growth opportunities for
existing products; benefits from new technology and cost-reduction
initiatives, plans and objectives; litigation related strategies
and outcomes; markets for securities and expected future
repurchases of shares, including statements about the manner,
amount and timing of repurchases. Actual results could differ
materially from the views expressed. 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 general global economic,
geopolitical and financial conditions beyond our control, including
inflation and war in Ukraine; risks related to our international
sales and operations; adverse conditions in the automotive market;
competition from substitute products, new technologies and new or
emerging competitors; worldwide air quality standards; a decrease
in government infrastructure spending; adverse conditions in
cyclical end markets; the limited supply of or lack of access to
sufficient crude tall oil and other raw materials; issues with or
integration of future acquisitions and other investments; the
provision of services by third parties at several facilities,
including the impact of WestRock’s shutdown of its North Charleston
paper mill; adverse effects from the COVID-19 pandemic; supply
chain disruptions; natural disasters and extreme weather events; or
other unanticipated problems such as labor difficulties (including
work stoppages), equipment failure or unscheduled maintenance and
repair; attracting and retaining key personnel; dependence on
certain large customers; legal actions associated with our
intellectual property rights; protection of our intellectual
property and other proprietary information; information technology
security breaches and other disruptions; complications with
designing or 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 losses due to
lawsuits arising out of environmental damage or personal injuries
associated with chemical or other manufacturing processes, and the
other factors detailed from time to time in the reports we file
with the SEC, including those described in Part I, Item 1A. Risk
Factors in our Annual Report on Form 10-K as well as in our other
filings with the SEC. These forward-looking statements speak only
to management’s beliefs as of the date of this press release.
Ingevity assumes no obligation to provide any revisions to, or
update, any projections and forward-looking statements contained in
this press release.
INGEVITY CORPORATION
Condensed Consolidated
Statements of Operations (Unaudited)
Three Months Ended June
30,
Six Months Ended June
30,
In millions, except per share
data
2023
2022
2023
2022
Net sales
$
481.8
$
419.9
$
874.4
$
802.7
Cost of sales
328.8
269.3
591.0
514.3
Gross profit
153.0
150.6
283.4
288.4
Selling, general and administrative
expenses
51.7
48.7
100.3
88.7
Research and technical expenses
8.0
8.2
16.8
15.5
Restructuring and other (income) charges,
net
19.2
3.7
24.8
7.3
Acquisition-related costs
1.8
—
3.7
—
Other (income) expense, net
3.0
(1.6
)
(15.2
)
(3.0
)
Interest expense, net
21.6
15.1
41.2
25.8
Income (loss) before income taxes
47.7
76.5
111.8
154.1
Provision (benefit) for income taxes
12.2
16.7
25.6
33.5
Net income (loss)
$
35.5
$
59.8
$
86.2
$
120.6
Per share data
Basic earnings (loss) per share
$
0.98
$
1.55
$
2.34
$
3.11
Diluted earnings (loss) per share
0.97
1.54
2.33
3.09
Weighted average shares outstanding
Basic
36.4
38.5
36.8
38.8
Diluted
36.6
38.7
37.1
39.0
INGEVITY CORPORATION
Segment Operating Results
(Unaudited)
Three Months Ended June
30,
Six Months Ended June
30,
In millions
2023
2022
2023
2022
Net sales
Performance Materials
$
144.6
$
122.4
$
286.0
$
270.8
Performance Chemicals
$
284.0
$
243.7
$
469.6
$
416.3
Pavement Technologies product line
140.9
77.8
186.7
105.7
Industrial Specialties product line
143.1
165.9
282.9
310.6
Advanced Polymer Technologies
$
53.2
$
53.8
$
118.8
$
115.6
Total net sales
$
481.8
$
419.9
$
874.4
$
802.7
Segment EBITDA (1)
Performance Materials
$
64.2
$
55.6
$
134.0
$
133.5
Performance Chemicals
44.9
61.7
65.2
92.5
Advanced Polymer Technologies
11.6
3.8
25.4
14.1
Total segment EBITDA (1)
$
120.7
$
121.1
$
224.6
$
240.1
Interest expense, net
(21.6
)
(15.1
)
(41.2
)
(25.8
)
(Provision) benefit for income taxes
(12.2
)
(16.7
)
(25.6
)
(33.5
)
Depreciation and amortization -
Performance Materials
(9.2
)
(8.8
)
(19.2
)
(17.8
)
Depreciation and amortization -
Performance Chemicals
(14.0
)
(9.5
)
(27.8
)
(19.7
)
Depreciation and amortization - Advanced
Polymer Technologies
(8.2
)
(7.5
)
(15.5
)
(15.4
)
Restructuring and other income (charges),
net (2) (5)
(18.2
)
(3.7
)
(23.8
)
(7.3
)
Acquisition and other-related costs (3)
(6)
(1.8
)
—
(4.5
)
—
Gain on sale of strategic investment
(4)
—
—
19.2
—
Net income (loss)
$
35.5
$
59.8
$
86.2
$
120.6
________________
(1)
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, research and
technical 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, litigation verdict charges,
(losses) and gains from the sale of strategic investments, pension
and postretirement settlement and curtailment (income) charges,
net.
(2)
For the three and six months ended June
30, 2023, charges of $4.5 million and $6.2 million relate to the
Performance Materials segment, charges of $12.6 million and $15.7
million relate to the Performance Chemicals segment, and charges of
$1.1 million and $1.9 million relate to the Advanced Polymer
Technologies segment, respectively. For the three and six months
ended June 30, 2022, charges of $1.3 million and $2.6 million
relate to the Performance Materials segment, charges of $1.9
million and $3.7 million relate to the Performance Chemicals
segment, and charges of $0.5 million and $1.0 million relate to the
Advanced Polymer Technologies segment, respectively.
(3)
For the three and six months ended June
30, 2023, all charges relate to the acquisition and integration of
Ozark Materials into the Performance Chemicals segment.
(4)
For the three and six months ended June
30, 2023, gain on sale of strategic investment relates to the
Performance Materials segment.
(5)
Excludes $1.0 million of Depreciation and
amortization for the three and six months ended June 30, 2023,
relating to the alternative feedstock transition within our
Performance Chemicals reportable segment.
(6)
Includes zero and $0.8 million of
Inventory fair value step-up amortization for the three and six
months ended June 30, 2023, respectively, relating to the
acquisition and integration of Ozark Materials into the Performance
Chemicals segment. Included within "Cost of sales" on the
consolidated statement of operations.
INGEVITY CORPORATION
Condensed Consolidated Balance
Sheets (Unaudited)
In millions
June 30, 2023
December 31, 2022
Assets
Cash and cash equivalents
$
68.0
$
76.7
Accounts receivable, net
259.7
224.8
Inventories, net
387.1
335.0
Prepaid and other current assets
49.6
42.5
Current assets
764.4
679.0
Property, plant, and equipment, net
800.6
798.6
Goodwill
527.1
518.5
Other intangibles, net
394.2
404.8
Restricted investment
79.5
78.0
Strategic investments
99.4
109.8
Other assets
163.1
147.8
Total Assets
$
2,828.3
$
2,736.5
Liabilities
Accounts payable
$
203.6
$
174.8
Accrued expenses
63.7
54.4
Other current liabilities
43.8
74.3
Current liabilities
311.1
303.5
Long-term debt including finance lease
obligations
1,525.5
1,472.5
Deferred income taxes
109.5
106.5
Other liabilities
168.1
155.7
Total Liabilities
2,114.2
2,038.2
Equity
714.1
698.3
Total Liabilities and Equity
$
2,828.3
$
2,736.5
INGEVITY CORPORATION
Condensed Consolidated
Statements of Cash Flows (Unaudited)
Three Months Ended June
30,
Six Months Ended June
30,
In millions
2023
2022
2023
2022
Cash provided by (used in) operating
activities:
Net income (loss)
$
35.5
$
59.8
$
86.2
$
120.6
Adjustments to reconcile net income (loss)
to cash provided by (used in) operating activities:
Depreciation and amortization
31.4
25.8
62.5
52.9
Gain on sale of strategic investment
—
—
(19.2
)
—
Other non-cash items
41.2
14.9
75.6
36.4
Changes in operating assets and
liabilities, net of effect of acquisitions:
Changes in other operating assets and
liabilities, net
(59.7
)
(10.0
)
(151.5
)
(95.1
)
Net cash provided by (used in) operating
activities
$
48.4
$
90.5
$
53.6
$
114.8
Cash provided by (used in) investing
activities:
Capital expenditures
$
(21.7
)
$
(29.6
)
$
(47.1
)
$
(57.2
)
Proceeds from sale of strategic
investment
—
—
31.4
—
Other investing activities, net
(1.7
)
1.2
(5.8
)
(1.4
)
Net cash provided by (used in) investing
activities
$
(23.4
)
$
(28.4
)
$
(21.5
)
$
(58.6
)
Cash provided by (used in) financing
activities:
Proceeds from revolving credit
facility
$
107.5
$
788.0
$
197.8
$
788.0
Payments on revolving credit facility
(84.5
)
(256.0
)
(144.8
)
(256.0
)
Payments on long-term borrowings
—
(623.4
)
—
(628.1
)
Debt issuance costs
—
(3.0
)
—
(3.0
)
Debt repayment costs
—
(3.8
)
—
(3.8
)
Financing lease obligations, net
(0.2
)
(0.2
)
(0.5
)
(0.4
)
Tax payments related to withholdings on
vested equity awards
—
(0.2
)
(4.5
)
(2.0
)
Proceeds and withholdings from share-based
compensation plans, net
1.4
1.1
4.0
1.9
Repurchases of common stock under publicly
announced plan
(58.7
)
(49.5
)
(92.1
)
(89.9
)
Net cash provided by (used in) financing
activities
$
(34.5
)
$
(147.0
)
$
(40.1
)
$
(193.3
)
Increase (decrease) in cash, cash
equivalents, and restricted cash
(9.5
)
(84.9
)
(8.0
)
(137.1
)
Effect of exchange rate changes on
cash
(0.3
)
(6.5
)
(0.7
)
(7.2
)
Change in cash, cash equivalents, and
restricted cash(1)
(9.8
)
(91.4
)
(8.7
)
(144.3
)
Cash, cash equivalents, and restricted
cash at beginning of period
78.4
223.2
77.3
276.1
Cash, cash equivalents, and restricted
cash at end of period (1)
$
68.6
$
131.8
$
68.6
$
131.8
(1) Includes restricted cash of $0.6
million and $0.5 million and cash and cash equivalents of $68.0
million and $131.3 million at June 30, 2023 and 2022, 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
$
24.7
$
17.7
$
40.0
$
28.7
Cash paid for income taxes, net of
refunds
18.9
23.4
23.6
26.9
Purchases of property, plant, and
equipment in accounts payable
1.0
0.7
5.3
6.0
Leased assets obtained in exchange for new
operating lease liabilities
14.9
4.8
18.8
7.7
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 on the following pages. 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. 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.
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, debt refinancing fees,
litigation verdict charges, (losses) and gains from the sale of
strategic investments, 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, debt refinancing
fees per share, litigation verdict charge per share, (losses) and
gains from the sale of strategic investments 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 interest expense, net, provision (benefit) for
income taxes, depreciation, amortization, restructuring and other
(income) charges, net, acquisition and other-related costs,
litigation verdict charge, (losses) and gains from the sale of
strategic investments, pension and postretirement settlement and
curtailment (income) charges, net.
Adjusted EBITDA Margin is defined as
Adjusted EBITDA divided by Net sales.
Free Cash Flow is defined as the sum
of cash provided by (used in) the following items: operating
activities less capital expenditures.
Net Debt is defined as the sum of
notes payable, short-term debt, current maturities of long-term
debt and long-term debt less the sum of cash and cash equivalents,
restricted cash associated with our New Market Tax Credit financing
arrangement, and restricted investment excluding the allowance for
credit losses on held-to-maturity debt securities.
Net Debt Ratio is defined as Net Debt
divided by last twelve months Adjusted EBITDA, inclusive of
acquisition-related pro forma adjustments.
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.
GAAP Reconciliation of 2023 Adjusted EBITDA
Guidance
A reconciliation of net income to adjusted EBITDA as projected
for 2023 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; litigation
verdict charges; (losses) and gains from the sale of strategic
investments; additional pension and postretirement settlement and
curtailment (income) charges; and revisions due to legislative tax
rate changes. 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.
Reconciliation of Net Income
(Loss) (GAAP) and Diluted Earnings (Loss) Per Share (GAAP) to
Adjusted Earnings (Loss) (Non-GAAP) and Diluted Adjusted Earnings
(Loss) Per Share (Non-GAAP)
Three Months Ended June
30,
Six Months Ended June
30,
In millions, except per share data
(unaudited)
2023
2022
2023
2022
Net income (loss) (GAAP)
$
35.5
$
59.8
$
86.2
$
120.6
Restructuring and other (income) charges,
net
19.2
3.7
24.8
7.3
Acquisition and other-related costs
1.8
—
4.5
—
Debt refinancing fees (1)
—
5.1
—
5.1
Gain on sale of strategic investment
—
—
(19.2
)
—
Tax effect on items above
(4.8
)
(2.1
)
(2.3
)
(2.9
)
Certain discrete tax provision (benefit)
(2)
(0.1
)
0.5
(1.3
)
0.4
Adjusted earnings (loss)
(Non-GAAP)
$
51.6
$
67.0
$
92.7
$
130.5
Diluted earnings (loss) per common
share (GAAP)
$
0.97
$
1.54
$
2.33
$
3.09
Restructuring and other (income) charges,
net
0.52
0.10
0.67
0.19
Acquisition and other-related costs
0.05
—
0.12
—
Debt refinancing fees
—
0.13
—
0.13
Gain on sale of strategic investment
—
—
(0.52
)
—
Tax effect on items above
(0.13
)
(0.05
)
(0.06
)
(0.07
)
Certain discrete tax provision
(benefit)
—
0.01
(0.04
)
0.01
Diluted adjusted earnings (loss) per
share (Non-GAAP)
$
1.41
$
1.73
$
2.50
$
3.35
Weighted average common shares outstanding
- Diluted
36.6
38.7
37.1
39.0
____________________
(1)
Represents the acceleration of deferred financing fees, debt
extinguishment premium paid and other fees incurred related to our
senior note redemption, term loan repayment, revolving credit
facility amendment, and termination of certain interest rate swaps
during the period ended June 30, 2022. Management believes
excluding these items assists investors, potential investors,
securities analysts, and others in understanding the continuing
operating results thereby providing useful supplemental information
about operational performance.
(2)
Represents certain discrete tax items such as excess tax benefits
on stock compensation and impacts of legislative tax rate changes.
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.
Reconciliation of Net Income
(Loss) (GAAP) to Adjusted EBITDA (Non-GAAP)
Three Months Ended June
30,
Six Months Ended June
30,
In millions, except percentages
(unaudited)
2023
2022
2023
2022
Net income (loss) (GAAP)
$
35.5
$
59.8
$
86.2
$
120.6
Provision (benefit) for income taxes
12.2
16.7
25.6
33.5
Interest expense, net
21.6
15.1
41.2
25.8
Depreciation and amortization
31.4
25.8
62.5
52.9
Restructuring and other (income) charges,
net (1)
18.2
3.7
23.8
7.3
Acquisition and other-related costs
1.8
—
4.5
—
Gain on sale of strategic investment
—
—
(19.2
)
—
Adjusted EBITDA (Non-GAAP)
$
120.7
$
121.1
$
224.6
$
240.1
Net sales
$
481.8
$
419.9
$
874.4
$
802.7
Net income (loss) margin
7.4
%
14.2
%
9.9
%
15.0
%
Adjusted EBITDA margin
25.1
%
28.8
%
25.7
%
29.9
%
_________________
(1)
Excludes $1.0 million of Depreciation and
amortization for the three and six months ended June 30, 2023,
relating to the alternative feedstock transition within our
Performance Chemicals reportable segment.
Calculation of Free Cash Flow
(Non-GAAP)
Three Months Ended June
30,
Six Months Ended June
30,
In millions (unaudited)
2023
2022
2023
2022
Cash Flow from Operations
$
48.4
$
90.5
$
53.6
$
114.8
Less: Capital Expenditures
21.7
29.6
47.1
57.2
Free Cash Flow
$
26.7
$
60.9
$
6.5
$
57.6
Calculation of Net Debt Ratio
(Non-GAAP)
In millions, except ratios
(unaudited)
June 30, 2023
Notes payable and current maturities of
long-term debt
$
0.9
Long-term debt including finance lease
obligations
1,525.5
Debt issuance costs
6.0
Total Debt
1,532.4
Less:
Cash and cash equivalents (1)
68.2
Restricted investment (2)
79.8
Net Debt
$
1,384.4
Net Debt Ratio (Non GAAP)
Adjusted EBITDA (3)
Twelve months ended December 31, 2022
$
452.6
Six months ended June 30, 2022
(240.1
)
Six months ended June 30, 2023
224.6
Adjusted EBITDA - last twelve months (LTM)
as of June 30, 2023
$
437.1
Net debt ratio (Non GAAP)
3.2x
____________________
(1)
Includes $0.2 million of Restricted Cash
related to the New Market Tax Credit arrangement.
(2)
Excludes $0.3 million allowance for credit
losses on held-to-maturity debt securities.
(3)
Refer to the Reconciliation of Net Income
(GAAP) to Adjusted EBITDA (Non-GAAP) schedule for the
reconciliation to the most comparable GAAP financial measure.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230802510210/en/
Caroline Monahan 843-740-2068 media@ingevity.com
Investors: John E. Nypaver, Jr. 843-740-2002
investors@ingevity.com
Ingevity (NYSE:NGVT)
Historical Stock Chart
From Apr 2024 to May 2024
Ingevity (NYSE:NGVT)
Historical Stock Chart
From May 2023 to May 2024