Ingevity Reports 2Q 2018 Financial Results

Ingevity Corporation reported second quarter net sales of $308.6 million, representing an increase of 18.6% versus $260.3 million in the prior year’s second quarter. Net income was $52.2 million, an increase of 45.8% versus $35.8 million in net income in the previous year’s quarter.
 
The second quarter diluted earnings per share were $1.10. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) of $89.4 million were up 33.0% versus second quarter 2017 adjusted EBITDA of $67.2 million. Diluted adjusted earnings per share were $1.12 excluding, net of tax, acquisition and other related costs of $0.02 per share. Ingevity’s second quarter adjusted EBITDA margin of 29.0% was up 320 basis points from the prior year’s second quarter adjusted EBITDA margin of 25.8%.
 
“We drove an outstanding second quarter performance,” said Michael Wilson, Ingevity’s president and CEO. “Our strong organic growth has been augmented by the Georgia-Pacific pine chemicals acquisition, and our profitability is being accelerated by excellent commercial and operational execution. Each of our businesses, across all of our end-use applications, is delivering to or exceeding our expectations.”
 
Wilson added that while volumes were by far the largest contributor to the company’s financial results, product price/mix and strong productivity all contributed to the bottom line. These were partially offset by increased freight and selling, general and administrative (SG&A) costs.
 
Second quarter 2018 sales in the Performance Chemicals segment were $212.5 million, up $41.7 million, or 24.4%, versus the second quarter 2017. Segment operating profit was $36.9 million, up $10.5 million, or 39.8%, versus the prior year quarter segment operating profit. Segment operating margin rose 190 basis points to 17.4%. Segment EBITDA were $46.7 million, up $15.2 million, or 48.3%, versus the prior year quarter segment EBITDA. Segment EBITDA margin rose 360 basis points to 22.0%.
 
Wilson said that even without the benefit of the effect of the Georgia-Pacific acquisition, the base Performance Chemicals segment’s revenues grew more than 12%, while segment operating profit rose by almost 26% and segment EBITDA by over 21%.
 
Second quarter 2018 sales in the Performance Materials segment were $96.1 million, up $6.6 million, or 7.4%, versus the second quarter 2017. Segment operating profit was $36.6 million, up $5.9 million, or 19.2%, versus the prior year quarter segment operating profit. Segment operating margin rose 380 basis points to 38.1%. Segment EBITDA were $42.7 million, up $7.0 million, or 19.6%, versus the prior year segment EBITDA. Segment EBITDA margin rose 450 basis points to 44.4%.
 
“We continue to feel very positive about the year,” said Wilson. “We are seeing the benefits of improving market conditions for both our basic materials and high-value added technologies and we are executing well.”