Ingevity reports second quarter 2023 financial results
HIGHLIGHTS: (comparisons versus prior year period)
-
Net sales of
, up$481.8 million 15% -
Net income of
and diluted earnings per share (EPS) of$35.5 million ; adjusted earnings of$0.97 and diluted adjusted EPS of$51.6 million $1.41 -
Adjusted EBITDA of
and adjusted EBITDA margin of$120.7 million 25.1% -
Operating cash flow of
with free cash flow of$48.4 million $26.7 million -
Initiated cost reduction actions with anticipated annualized savings of approximately
with$35 million expected to be realized in 2023$20 million -
Adjusted 2023 guidance for sales between
to$1.6 billion and adjusted EBITDA between$1.7 billion to$390 million $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.
Second quarter net sales of
Net income of
“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
Industrial Specialties posted sales of
Segment EBITDA was
“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
“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
“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
Liquidity/Other
Second quarter operating cash flow was
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
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
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
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
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 |
|
(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 |
|
(6) |
Includes zero and |
|
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 |
|||||||||||||||
|
|
|
|
|
|
|
|
||||||||
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
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 |
|
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 |
|
(2) |
Excludes |
|
(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
Source: Ingevity Corporation