Ingevity Reports 3Q 2018 Financial Results

Ingevity Corporation reported third quarter net sales of $311.2 million, representing an increase of 17.8% versus $264.1 million in the prior year’s third quarter. Net income was $51.7 million, an increase of 34.6% 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% 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% was up 160 basis points from the prior year’s third quarter adjusted EBITDA margin of 27.5%.
 
“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.
 
Third quarter 2018 sales in the Performance Chemicals segment were $214.9 million, up $36.2 million, or 20.3%, versus the third quarter of 2017. Segment operating profit was $39.7 million, up $6.3 million, or 18.9%, versus the prior year quarter segment operating profit. Segment operating margin was 18.5%, down 20 basis points compared to prior year.
 
“Our sales to oilfield applications continued to show significant growth based on increased US drilling and production,” said Wilson. “Our pavement technologies sales overall were solid as we saw very strong growth in Europe. Paving in the US 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.
 
Third quarter 2018 sales in the Performance Materials segment were $96.3 million, up $10.9 million, or 12.8%, versus the third quarter of 2017. Segment operating profit was $36.3 million, up $7 million, or 23.9%, versus the prior year quarter segment operating profit. Segment operating margin rose 340 basis points to 37.7%. Segment EBITDA was $41.6 million, up $7.4 million, or 21.6%, versus the prior year segment EBITDA. Segment EBITDA margin rose 320 basis points to 43.2%.