Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) of $67.1 million were up 33.7% versus first quarter 2017 adjusted EBITDA of $50.2 million. Diluted adjusted earnings per share were $0.79 excluding, net of tax, acquisition and other related costs of $0.08 per share and restructuring and other income of $0.01 per share. Ingevity’s first quarter adjusted EBITDA margin of 28.5% was up 550 basis points from the prior year’s first quarter adjusted EBITDA margin of 23.0%.
“We’re off to a great start, in line with our expectations,” said Michael Wilson, Ingevity’s president and CEO. “We drove a 34% jump in adjusted EBITDA on an 8% revenue increase. This reflects an improvement in market dynamics and product demand, strong execution and cost discipline.”
Wilson attributed the results primarily to volume growth resulting from higher sales of the company’s Performance Materials segment’s activated carbon products to the global automotive market. In addition, sales in Performance Chemicals benefitted from higher sales to the oilfield services and pavement industries, as well as the company’s recent acquisition of Georgia-Pacific’s (G-P) pine chemicals business. These revenue increases were partially offset by declines in sales to industrial specialties applications as the company shifted available product to higher value-added applications.
“Our adjusted EBITDA growth was driven primarily by volume gains, though price and mix benefits and lower raw material costs – specifically for crude tall oil, or CTO – also contributed significantly,” he said.
“Three months in, we feel we have good line of sight on the year,” Wilson said. “We’re executing our businesses according to plan. We are focused on efficiently integrating the G-P pine chemicals acquisition, capturing the benefits of improving market conditions in Performance Chemicals, preparing for growing global demand in Performance Materials, and turning in another strong performance in 2018.”