Ingevity Reports 4Q, Full Year 2022 Financial Results

Ingevity Corporation reported its financial results for the fourth quarter and full year 2022.

2022 was a record year for Ingevity as both Performance Chemicals and Performance Ma-terials delivered their best ever sales and EBITDA, despite persistent cost inflation, con-tinued COVID-19 and supply chain disruptions, a war in Ukraine, and an especially chal-lenging fourth quarter.

Fourth quarter (Q4) net sales of $383.6 million rose over 14% versus the prior year quar-ter. This growth reflects price increases across all businesses implemented throughout the year to address higher input costs, partially offset by significant volume declines in the latter half of Q4 attributed to customer destocking, particularly in certain higher-value product lines of the Performance Chemicals segment.

As a result, Q4 net income decreased 47% to $15.6 million compared to prior year and adjusted EBITDA decreased 7% to $74.3 million with adjusted EBITDA margin of 19.4%. Diluted earnings per share (EPS) in Q4 was $0.41 compared to diluted EPS of $0.74 in the prior year quarter. Diluted adjusted EPS in Q4 was $0.57 compared to diluted adjust-ed EPS of $0.78 in the prior year quarter.

Record full year (FY) net sales of $1.67 billion were up 20% compared to last year, as higher selling prices and a mix shift to higher-value products helped the company offset inflationary cost pressures and supply chain disruptions. FY net income of $211.6 million increased 79% versus the prior year. Excluding the pre-tax litigation expense of $85.0 million in 2021, FY 2022 net income increased 16%.

FY adjusted EBITDA increased 7% to $452.6 million with adjusted EBITDA margin of 27.1%. FY diluted EPS was $5.50 compared to $2.95 in the prior year. FY diluted adjust-ed EPS was $6.01 compared to diluted adjusted EPS of $5.23 in the prior year.

“I am extremely proud of our team’s resilience and persistence in successfully navigating 2022’s difficult business environment. Our record performance translated to strong free cash flow which we used to return significant cash to shareholders and fund growth initia-tives, including our acquisition of Ozark Materials in Q4, which expands our Pavement Technologies business into road markings,” said John Fortson, president and CEO. “We remain focused on delivering consistent growth over time to our shareholders.”

Full year operating cash flow was $313.1 million with free cash flow of $170.6 million. Net leverage at the end of the year was 2.9 times, reflecting increased borrowing for the Ozark Materials acquisition which closed early in the fourth quarter.