- NORTH CHARLESTON, SC , Oct. 24, 2018 (Press Release) -
- Net sales of $311.2 million were up more than 17.8 percent versus the prior year quarter’s sales of $264.1 million
- Net income of $51.7 million was up almost 35 percent versus net income in the prior year quarter of $38.4 million; net income as a percentage of sales was 16.6 percent, compared to net income as a percentage of sales of 14.5 percent in the prior year quarter; diluted earnings per share were $1.16
- Adjusted EBITDA of $90.7 million were up 24.8 percent compared to third quarter 2017 adjusted EBITDA of $72.7 million; diluted adjusted earnings per share were $1.16
- Adjusted EBITDA margin of 29.1 percent increased 160 basis points versus third quarter 2017
- Strong results primarily driven by continued across-the-board demand growth, price and mix improvements and excellent operating performance and the acquisition of Georgia-Pacific’s pine chemicals business
- Company raises mid-point and narrows range for fiscal year 2018 adjusted EBITDA guidance and maintains guidance on revenues
Ingevity Corporation today reported third quarter net sales of $311.2 million, representing an increase of 17.8 percent versus $264.1 million in the prior year’s third quarter. Net income was $51.7 million, an increase of 34.6 percent versus $38.4 million in net income in the previous year’s quarter. The third quarter diluted earnings per share were $1.16. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) of $90.7 million were up 24.8 percent versus third quarter 2017 adjusted EBITDA of $72.7 million. Diluted adjusted earnings per share were $1.16. Ingevity’s third quarter adjusted EBITDA margin of 29.1 percent was up 160 basis points from the prior year’s third quarter adjusted EBITDA margin of 27.5 percent.
“As anticipated, we turned in a strong performance in the third quarter,” said Michael Wilson, Ingevity’s president and CEO. “We benefitted from demand growth across the board. In addition, our businesses and manufacturing operations are executing according to plan and expectations.”
Growth in adjusted EBITDA was driven by higher volumes, improved price and mix, and lower raw materials and production costs. These were partially offset by increased freight and selling, general and administrative (SG&A) costs, including legal and mergers and acquisitions (M&A) costs.
Third quarter 2018 sales in the Performance Chemicals segment were $214.9 million, up $36.2 million, or 20.3 percent, versus the third quarter 2017. Segment operating profit was $39.7 million, up $6.3 million, or 18.9 percent, versus the prior year quarter segment operating profit. Segment operating margin was 18.5 percent, down 20 basis points compared to prior year. Segment EBITDA were $49.1 million, up $10.6 million, or 27.5 percent, versus the prior year quarter segment EBITDA. Segment EBITDA margin rose 130 basis points to 22.8 percent.
“Our sales to oilfield applications continued to show significant growth based on increased U.S. drilling and production,” said Wilson. “Our pavement technologies sales overall were solid as we saw very strong growth in Europe. Paving in the U.S. was moderately disrupted by weather conditions. Sales to industrial specialties applications increased in the quarter as success in many of our key niche applications – such as adhesives, dispersants, lubricants, and rubber additives – more than offset declines in publication inks.”
Wilson said that the company has efficiently integrated its acquisition of Georgia-Pacific’s pine chemicals business into its commercial and manufacturing network and it is contributing significantly to both the top and bottom lines. Synergy capture for the acquisition is ahead of schedule.
Third quarter 2018 sales in the Performance Materials segment were $96.3 million, up $10.9 million, or 12.8 percent, versus the third quarter 2017. Segment operating profit was $36.3 million, up $7.0 million, or 23.9 percent, versus the prior year quarter segment operating profit. Segment operating margin rose 340 basis points to 37.7 percent. Segment EBITDA were $41.6 million, up $7.4 million, or 21.6 percent, versus the prior year segment EBITDA. Segment EBITDA margin rose 320 basis points to 43.2 percent.
“We drove increased revenues in Performance Materials based on continued adoption of our ‘honeycomb’ solutions which are used to meet U.S. Environmental Protection Agency (EPA) Tier 3 and California LEV III gasoline vapor emission regulations,” said Wilson. “Our profitability continues to grow as a result of our technology leadership in this application and very strong output and efficiency from our manufacturing facilities.”
Ingevity raised the mid-point and narrowed the range for its fiscal year 2018 guidance for adjusted EBITDA from between $302 million and $314 million to between $306 million and $314 million. It maintained its guidance for sales of between $1.10 billion and $1.13 billion.
“We expect to finish the year strongly and in line with our expectations,” Wilson said. “In all, we anticipate that 2018’s results will reflect another great year for Ingevity.”
Ingevity: Purify, Protect and Enhance
Ingevity provides specialty chemicals and high-performance carbon materials and technologies 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 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 1,600 people. The company is traded on the New York Stock Exchange.