Ingevity reports selected preliminary third quarter 2020 financial results

Ingevity Corporation  reported selected preliminary financial results for the third quarter.

• Ingevity’s results were driven by global automotive demand and production rebound versus weak second quarter, continued strong paving activity, cost reduction actions and strong execution
• Third quarter net sales of $332 million were down 7.8% versus the prior year quarter driven by the economic impacts of COVID-19
• Net income of $70 million was up 16.7% versus prior year quarter; net income as a percentage of sales was 21.1%, compared to 16.6% in the prior year quarter
• Third quarter adjusted EBITDA of $128 million were up 11.9% versus the prior year quarter; adjusted EBITDA margin of 38.5% is up 680 basis points
• Operating cash flow of $90 million; free cash flow of $74 million
• Company increases and narrows fiscal year 2020 guidance for adjusted EBITDA to between $355 million and $365 million; narrows guidance for sales to between $1.15 billion and $1.20 billion

“Ingevity’s third quarter results were driven by strong rebounds in automotive sales and production worldwide versus a weak second quarter, along with continued strong paving activity, cost reduction actions and strong execution,” said John Fortson, president and CEO. “These positives were partially offset by a weakened economic environment due to COVID-19 that particularly impacted our Performance Chemicals businesses. Nonetheless, our adjusted EBITDA and adjusted EBITDA margin were records for the third quarter.”

Third quarter net sales of $332 million were down 7.8% versus the prior year third quarter. Net income of $70 million increased 16.7% and net income margin of 21.1% was up from 16.6% in the prior year. The third quarter diluted earnings per share were $1.69 compared to $1.41 in the prior year period.

Adjusted earnings of $74 million were up 19.3% versus the prior year quarter. Diluted adjusted earnings per share were $1.79, which exclude, net of tax, $0.10 related primarily to restructuring and other charges, net, recognized during the quarter. This compares to diluted adjusted earnings per share of $1.46 in the prior year quarter. Adjusted EBITDA of $128 million were up 11.9% versus the third quarter 2019. Adjusted EBITDA margin of 38.5% was up 680 basis points from the prior year’s third quarter.

The company generated operating cash flow of $90 million, which translated to free cash flow of $74 million.

Outlook

Ingevity narrowed its fiscal year 2020 guidance for sales from between $1.10 billion and $1.20 billion to between $1.15 billion and $1.20 billion, and increased and narrowed its guidance for adjusted EBITDA from between $310 million and $350 million to between $355 million and $365 million.

“We remain confident in our business through the end of the year,” said Fortson. “While we may see continued weakness on the revenue line, given the cost controls we’ve implemented, we expect our adjusted EBITDA and adjusted EBITDA margins to remain favorable. And while uncertainty remains regarding global economic strength, we believe in the strength of our strategy and our team’s ability to execute on the opportunities.”

(BUSINESS WIRE)

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, bioplastics 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.