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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Ingevity Corporation | NYSE:NGVT | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
-1.24 | -2.26% | 53.56 | 56.295 | 53.195 | 55.36 | 374,454 | 22:30:00 |
☒
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
☐
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Delaware
|
47-4027764
|
||
(State or other jurisdiction of incorporation or organization)
|
(I.R.S. Employer Identification No.)
|
||
|
|
|
|
5255 Virginia Avenue
|
North Charleston
|
South Carolina
|
29406
|
(Address of principal executive offices)
|
(Zip code)
|
Title of each class
|
Trading Symbol(s)
|
Name of each exchange on which registered
|
Common Stock ($0.01 par value)
|
NGVT
|
New York Stock Exchange
|
Large accelerated filer
|
☒
|
Accelerated filer
|
☐
|
Non-accelerated filer
|
☐
|
Smaller reporting company
|
☐
|
|
|
Emerging growth company
|
☐
|
|
Page No.
|
|||
|
||||
|
||||
|
||||
|
||||
|
||||
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
In millions, except per share data
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Net sales
|
$
|
352.8
|
|
|
$
|
308.6
|
|
|
$
|
629.6
|
|
|
$
|
543.8
|
|
Cost of sales
|
218.4
|
|
|
193.1
|
|
|
398.1
|
|
|
343.2
|
|
||||
Gross profit
|
134.4
|
|
|
115.5
|
|
|
231.5
|
|
|
200.6
|
|
||||
Selling, general and administrative expenses
|
42.5
|
|
|
35.9
|
|
|
81.6
|
|
|
62.0
|
|
||||
Research and technical expenses
|
5.0
|
|
|
5.3
|
|
|
10.1
|
|
|
10.7
|
|
||||
Restructuring and other (income) charges, net
|
0.3
|
|
|
—
|
|
|
0.3
|
|
|
(0.6
|
)
|
||||
Acquisition-related costs
|
0.8
|
|
|
0.5
|
|
|
23.6
|
|
|
4.3
|
|
||||
Other (income) expense, net
|
—
|
|
|
1.4
|
|
|
(3.7
|
)
|
|
0.2
|
|
||||
Interest expense, net
|
13.1
|
|
|
7.8
|
|
|
24.2
|
|
|
13.9
|
|
||||
Income (loss) before income taxes
|
72.7
|
|
|
64.6
|
|
|
95.4
|
|
|
110.1
|
|
||||
Provision (benefit) for income taxes
|
15.9
|
|
|
12.4
|
|
|
15.9
|
|
|
22.1
|
|
||||
Net income (loss)
|
56.8
|
|
|
52.2
|
|
|
79.5
|
|
|
88.0
|
|
||||
Less: Net income (loss) attributable to noncontrolling interests
|
—
|
|
|
5.5
|
|
|
—
|
|
|
10.5
|
|
||||
Net income (loss) attributable to Ingevity stockholders
|
$
|
56.8
|
|
|
$
|
46.7
|
|
|
$
|
79.5
|
|
|
$
|
77.5
|
|
|
|
|
|
|
|
|
|
||||||||
Per share data
|
|
|
|
|
|
|
|
||||||||
Basic earnings (loss) per share attributable to Ingevity stockholders
|
$
|
1.36
|
|
|
$
|
1.11
|
|
|
$
|
1.90
|
|
|
$
|
1.84
|
|
Diluted earnings (loss) per share attributable to Ingevity stockholders
|
1.34
|
|
|
1.10
|
|
|
1.88
|
|
|
1.82
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
In millions
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Net income (loss)
|
$
|
56.8
|
|
|
$
|
52.2
|
|
|
$
|
79.5
|
|
|
$
|
88.0
|
|
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation adjustment
|
(15.5
|
)
|
|
(6.8
|
)
|
|
(6.1
|
)
|
|
(2.9
|
)
|
||||
Derivative instruments:
|
|
|
|
|
|
|
|
||||||||
Unrealized gain (loss), net of tax provision (benefit) of ($1.2), $0.2, ($1.2) and $0.2
|
(3.8
|
)
|
|
0.6
|
|
|
(3.7
|
)
|
|
0.7
|
|
||||
Reclassifications of deferred derivative instruments (gain) loss, included in net income (loss), net of tax (provision) benefit of zero, zero, ($0.1) and zero
|
(0.1
|
)
|
|
(0.2
|
)
|
|
(0.5
|
)
|
|
(0.2
|
)
|
||||
Total derivative instruments, net of tax provision (benefit) of ($1.2), $0.2, ($1.3) and $0.2
|
(3.9
|
)
|
|
0.4
|
|
|
(4.2
|
)
|
|
0.5
|
|
||||
Pension & other postretirement benefits:
|
|
|
|
|
|
|
|
||||||||
Unrealized actuarial gains (losses) and prior service (costs) credits, net of tax of zero for all periods
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Reclassifications of net actuarial and other (gain) loss and amortization of prior service cost, included in net income, net of tax of zero for all periods
|
—
|
|
|
0.1
|
|
|
—
|
|
|
0.1
|
|
||||
Total pension and other postretirement benefits, net of tax of zero for all periods
|
—
|
|
|
0.1
|
|
|
—
|
|
|
0.1
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Other comprehensive income (loss), net of tax provision (benefit) of ($1.2), $0.2, ($1.3) and $0.2
|
(19.4
|
)
|
|
(6.3
|
)
|
|
(10.3
|
)
|
|
(2.3
|
)
|
||||
Comprehensive income (loss)
|
37.4
|
|
|
45.9
|
|
|
69.2
|
|
|
85.7
|
|
||||
Less: Comprehensive income (loss) attributable to noncontrolling interests
|
—
|
|
|
5.5
|
|
|
—
|
|
|
10.5
|
|
||||
Comprehensive income (loss) attributable to Ingevity stockholders
|
$
|
37.4
|
|
|
$
|
40.4
|
|
|
$
|
69.2
|
|
|
$
|
75.2
|
|
In millions, except share and par value data
|
June 30, 2019
|
|
December 31, 2018
|
||||
Assets
|
(Unaudited)
|
|
|
||||
Cash and cash equivalents
|
$
|
53.3
|
|
|
$
|
77.5
|
|
Accounts receivable
, net of allowance of $0.5 million and $0.4 million at June 30, 2019 and
December 31, 2018, respectively
|
176.6
|
|
|
118.9
|
|
||
Inventories, net
|
221.3
|
|
|
191.4
|
|
||
Prepaid and other current assets
|
40.4
|
|
|
34.9
|
|
||
Current assets
|
491.6
|
|
|
422.7
|
|
||
Property, plant and equipment, net
|
638.0
|
|
|
523.8
|
|
||
Operating lease assets, net
|
58.9
|
|
|
—
|
|
||
Goodwill
|
425.7
|
|
|
130.7
|
|
||
Other intangibles, net
|
399.7
|
|
|
125.6
|
|
||
Deferred income taxes
|
2.4
|
|
|
2.9
|
|
||
Restricted investment
|
72.2
|
|
|
71.2
|
|
||
Other assets
|
41.0
|
|
|
38.3
|
|
||
Total Assets
|
$
|
2,129.5
|
|
|
$
|
1,315.2
|
|
Liabilities
|
|
|
|
||||
Accounts payable
|
$
|
114.7
|
|
|
$
|
92.9
|
|
Accrued expenses
|
37.6
|
|
|
36.7
|
|
||
Accrued payroll and employee benefits
|
18.7
|
|
|
42.0
|
|
||
Current operating lease liabilities
|
18.0
|
|
|
—
|
|
||
Notes payable and current maturities of long-term debt
|
22.3
|
|
|
11.2
|
|
||
Income taxes payable
|
4.7
|
|
|
0.5
|
|
||
Current liabilities
|
216.0
|
|
|
183.3
|
|
||
Long-term debt including finance lease obligations
|
1,363.3
|
|
|
741.2
|
|
||
Noncurrent operating lease liabilities
|
41.2
|
|
|
—
|
|
||
Deferred income taxes
|
83.6
|
|
|
36.9
|
|
||
Other liabilities
|
24.7
|
|
|
15.1
|
|
||
Total Liabilities
|
1,728.8
|
|
|
976.5
|
|
||
Commitments and contingencies
(Note 15)
|
|
|
|
|
|
||
Equity
|
|
|
|
||||
Preferred stock
(par value $0.01 per share; 50,000,000 shares authorized; zero issued and outstanding at June 30, 2019 and December 31, 2018)
|
—
|
|
|
—
|
|
||
Common stock
(par value $0.01 per share; 300,000,000 shares authorized; 42,669,755 and 42,331,913 issued; 41,848,740 and 41,693,261 outstanding at June 30, 2019 and December 31, 2018)
|
0.4
|
|
|
0.4
|
|
||
Additional paid-in capital
|
107.5
|
|
|
98.3
|
|
||
Retained earnings
|
393.0
|
|
|
313.5
|
|
||
Accumulated other comprehensive income (loss)
|
(28.0
|
)
|
|
(17.7
|
)
|
||
Treasury stock, common stock, at cost
(821,015 shares at June 30, 2019; 638,652 shares at December 31, 2018)
|
(72.2
|
)
|
|
(55.8
|
)
|
||
Total Equity
|
400.7
|
|
|
338.7
|
|
||
Total Liabilities and Equity
|
$
|
2,129.5
|
|
|
$
|
1,315.2
|
|
In millions
|
Balance at December 31, 2018
|
|
Adjustments
|
|
Balance at January 1, 2019
|
||||||
Assets
|
|
|
|
|
|
||||||
Prepaid and other current assets
|
$
|
34.9
|
|
|
$
|
(0.2
|
)
|
(1)
|
$
|
34.7
|
|
Operating lease assets, net
|
—
|
|
|
64.6
|
|
(2)
|
64.6
|
|
|||
Liabilities
|
|
|
|
|
|
||||||
Current operating lease liabilities
|
—
|
|
|
18.4
|
|
(3)
|
18.4
|
|
|||
Noncurrent operating lease liabilities
|
—
|
|
|
46.3
|
|
(4)
|
46.3
|
|
|||
Other liabilities
|
15.1
|
|
|
(0.3
|
)
|
(5)
|
14.8
|
|
|||
_______________
|
|||||||||||
(1) Represents prepaid rent reclassified to operating lease assets.
|
|||||||||||
(2) Represents capitalization of operating lease assets and straight-line rent accrual.
|
|||||||||||
(3) Represents recognition of the current portion of operating lease liabilities.
|
|||||||||||
(4) Represents recognition of the noncurrent operating lease liabilities.
|
|||||||||||
(5) Represents accrued rent reclassified to operating lease liabilities.
|
Preliminary Purchase Price Allocation
|
||||
In millions
|
Weighted Average Amortization Period
|
Fair Value
|
||
Cash and cash equivalents
|
|
$
|
0.7
|
|
Accounts receivable, net
|
|
15.7
|
|
|
Inventories
(1)
|
|
21.7
|
|
|
Prepaid and other current assets
|
|
1.3
|
|
|
Property, plant and equipment
(5)
|
|
86.3
|
|
|
Operating lease assets, net
(6)
|
|
1.8
|
|
|
Intangible assets
(2)
|
|
|
||
Customer relationships
|
17 years
|
159.0
|
|
|
Developed technology
|
12 years
|
64.8
|
|
|
Brands
|
Indefinite
|
67.0
|
|
|
Non-compete agreement
|
3 years
|
0.5
|
|
|
Goodwill
(3) (5)
|
|
297.5
|
|
|
Other assets
|
|
1.3
|
|
|
Total fair value of assets acquired
|
|
$
|
717.6
|
|
Accounts payable
|
|
13.6
|
|
|
Accrued expenses
(6)
|
|
2.3
|
|
|
Long-term debt
|
|
113.1
|
|
|
Operating lease liabilities
(6)
|
|
1.7
|
|
|
Deferred income taxes
(5)
|
|
47.5
|
|
|
Total fair value of liabilities assumed
|
|
$
|
178.2
|
|
Cash and restricted cash acquired
(4)
|
1.5
|
|
||
Total cash paid, less cash and restricted cash acquired
|
$
|
537.9
|
|
|
_______________
|
||||
(1) Fair value of finished good inventories acquired included a step-up in the value of approximately $8.4 million, all of which was expensed in the three months ended March 31, 2019. The expense is included in "Cost of sales" on the condensed consolidated statement of operations. Inventories are accounted for on a first-in, first-out basis of accounting.
|
||||
(2) The aggregate amortization expense was $3.9 million and $5.8 million for the three and six months ended June 30, 2019. Estimated amortization expense is as follows: 2019 - $13.3 million, 2020 - $15.2 million, 2021 - $15.1 million, 2022 - $15.0 million and 2023 - $15.0 million. The estimated pre-tax amortization expense may fluctuate due to changes in foreign currency.
|
||||
(3) Goodwill consists of estimated future economic benefits arising from other assets acquired that could not be individually identified and separately recognized. See Note 9 for further information regarding our allocation of goodwill among our reportable segments. None of the acquired goodwill will be deductible for income tax purposes.
|
||||
(4) Cash and cash equivalents and restricted cash were $0.7 million and $0.8 million, respectively, at closing. Restricted cash is included in "Prepaid and other current assets" on the condensed consolidated balance sheet.
|
||||
(5) During Q2 2019, we performed a full physical asset inspection resulting in the reduction of $2.5 million to the initial preliminary value of property, plant and equipment. This reduction also resulted in a corresponding increase in goodwill of $2.1 million and reduction of deferred income taxes $0.4 million.
|
||||
(6) During Q2 2019, we performed our assessment of the acquired lease assets in accordance with ASC 842 resulting in the recognition of $1.8 million of operating lease assets, $0.1 million of current lease liabilities, and $1.7 million of noncurrent lease liabilities.
|
Purchase Price Allocation
|
||||
In millions
|
Weighted Average Amortization Period
|
Fair Value
|
||
Accounts receivable
|
|
$
|
16.2
|
|
Inventories
(1)
|
|
9.4
|
|
|
Property, plant and equipment
|
|
39.3
|
|
|
Intangible assets
(2)
|
|
|
||
Patents
|
12 years
|
1.9
|
|
|
Non-compete agreement
|
3 years
|
2.2
|
|
|
Customer relationships
|
11 years
|
129.0
|
|
|
Goodwill
(3)
|
|
118.7
|
|
|
Other assets
|
|
0.1
|
|
|
Total fair value of assets acquired
|
|
316.8
|
|
|
Accounts payable
|
|
0.8
|
|
|
Accrued expenses
|
|
0.5
|
|
|
Total fair value of liabilities assumed
|
|
$
|
1.3
|
|
Total cash paid
|
$
|
315.5
|
|
|
_______________
|
||||
(1) Fair value of finished goods inventories acquired included a step-up in the value of approximately $1.4 million, of which $0.6 million and $1.4 million was expensed in the three and six months ended June 30, 2018, respectively. The expense is included in "Cost of sales" on the condensed consolidated statement of operations.
|
||||
(2) For the three months ended June 30, 2019 and 2018, the aggregate amortization expense was $3.1 million and $3.5 million, respectively, and for the six months ended June 30, 2019 and 2018, the aggregate amortization expense was approximately $6.3 million and $4.2 million, respectively. Estimated amortization expense is as follows: 2019 - $12.7 million, 2020 - $12.7 million, 2021 - $12.0 million, 2022 - $11.8 million and 2023 - $11.8 million.
|
||||
(3) Goodwill largely consists of expected cost synergies and economies of scale resulting from the business combination. We expect the full amount to be deductible for income tax purposes.
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
In millions
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Net sales
|
$
|
352.8
|
|
|
$
|
350.0
|
|
|
$
|
647.3
|
|
|
$
|
651.9
|
|
Income (loss) before income taxes
|
73.5
|
|
|
64.5
|
|
|
127.0
|
|
|
123.7
|
|
||||
Diluted earnings (loss) per share attributable to Ingevity stockholders
|
$
|
1.35
|
|
|
$
|
1.10
|
|
|
$
|
2.49
|
|
|
$
|
2.08
|
|
In millions
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Automotive Technologies product line
|
$
|
113.9
|
|
|
$
|
86.1
|
|
|
$
|
213.6
|
|
|
$
|
172.0
|
|
Process Purification product line
|
9.2
|
|
|
10.0
|
|
|
18.6
|
|
|
19.6
|
|
||||
Performance Materials segment
|
$
|
123.1
|
|
|
$
|
96.1
|
|
|
$
|
232.2
|
|
|
$
|
191.6
|
|
Oilfield Technologies product line
|
29.7
|
|
|
29.1
|
|
|
58.9
|
|
|
51.5
|
|
||||
Pavement Technologies product line
|
64.6
|
|
|
65.6
|
|
|
83.1
|
|
|
84.1
|
|
||||
Industrial Specialties product line
|
101.1
|
|
|
117.8
|
|
|
196.9
|
|
|
216.6
|
|
||||
Engineered Polymers product line
(1)
|
34.3
|
|
|
—
|
|
|
58.5
|
|
|
—
|
|
||||
Performance Chemicals segment
|
$
|
229.7
|
|
|
$
|
212.5
|
|
|
$
|
397.4
|
|
|
$
|
352.2
|
|
|
|
|
|
|
|
|
|
||||||||
Net sales
|
$
|
352.8
|
|
|
$
|
308.6
|
|
|
$
|
629.6
|
|
|
$
|
543.8
|
|
_______________
|
|
|
|
|
|||||||||||
(1) Engineered Polymers product line was acquired on February 13, 2019; see Note 4 for more information.
|
In millions
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
North America
|
$
|
227.2
|
|
|
$
|
212.0
|
|
|
$
|
398.9
|
|
|
$
|
366.7
|
|
Asia Pacific
|
67.8
|
|
|
42.9
|
|
|
116.9
|
|
|
76.9
|
|
||||
Europe, Middle East and Africa
|
52.6
|
|
|
47.9
|
|
|
103.8
|
|
|
88.3
|
|
||||
South America
|
5.2
|
|
|
5.8
|
|
|
10.0
|
|
|
11.9
|
|
||||
Net sales
|
$
|
352.8
|
|
|
$
|
308.6
|
|
|
$
|
629.6
|
|
|
$
|
543.8
|
|
In millions
|
Contract Asset
(1)
|
||||||
|
June 30, 2019
|
|
June 30, 2018
|
||||
Beginning balance
|
$
|
5.1
|
|
|
$
|
4.4
|
|
Contract asset additions
|
11.7
|
|
|
7.9
|
|
||
Reclassification to accounts receivable, billed to customers
|
(10.5
|
)
|
|
(7.2
|
)
|
||
Ending balance
|
$
|
6.3
|
|
|
$
|
5.1
|
|
_______________
|
|
|
|||||
(1) Included within "Prepaid and other current assets" on the condensed consolidated balance sheet.
|
|
|
|
Amount of Gain (Loss) Recognized in AOCI
|
|
Amount of Gain (Loss) Reclassified from AOCI into Net income
|
|
Location of Gain (Loss) Reclassified from AOCI into Net income
|
||||||||||||
|
Three Months Ended June 30,
|
|
|
||||||||||||||
In millions
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
|
||||||||
Currency exchange contracts
|
$
|
—
|
|
|
$
|
0.7
|
|
|
$
|
—
|
|
|
$
|
(0.1
|
)
|
|
Net sales
|
Natural gas contracts
|
(0.7
|
)
|
|
0.1
|
|
|
(0.1
|
)
|
|
(0.1
|
)
|
|
Cost of sales
|
||||
Interest rate swap contracts
|
(4.1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Interest expense, net
|
||||
Cash flow hedging derivatives
|
$
|
(4.8
|
)
|
|
$
|
0.8
|
|
|
$
|
(0.1
|
)
|
|
$
|
(0.2
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Currency exchange contracts
|
$
|
(0.2
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Other (income) expense, net
|
Net investment hedging derivatives
|
$
|
(0.2
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Six Months Ended June 30,
|
|
|
||||||||||||||
In millions
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
|
||||||||
Currency exchange contracts
|
$
|
—
|
|
|
$
|
0.8
|
|
|
$
|
—
|
|
|
$
|
(0.1
|
)
|
|
Net sales
|
Natural gas contracts
|
(0.6
|
)
|
|
0.1
|
|
|
(0.6
|
)
|
|
(0.1
|
)
|
|
Cost of sales
|
||||
Interest rate swap contracts
|
(4.1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Interest expense, net
|
||||
Cash flow hedging derivatives
|
$
|
(4.7
|
)
|
|
$
|
0.9
|
|
|
$
|
(0.6
|
)
|
|
$
|
(0.2
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Currency exchange contracts
|
$
|
(0.2
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Other (income) expense, net
|
Net investment hedging derivatives
|
$
|
(0.2
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
In millions
|
Level 1
(1)
|
|
Level 2
(2)
|
|
Level 3
(3)
|
|
Total
|
||||||||
June 30, 2019
|
|
|
|
|
|
|
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Equity securities
(4)
|
$
|
0.4
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
0.4
|
|
Deferred compensation plan investments
(5)
|
2.3
|
|
|
—
|
|
|
—
|
|
|
2.3
|
|
||||
Total assets
|
$
|
2.7
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2.7
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Deferred compensation arrangement
(5)
|
$
|
8.0
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
8.0
|
|
Separation-related reimbursement awards
(6)
|
0.1
|
|
|
—
|
|
|
—
|
|
|
0.1
|
|
||||
Natural gas contracts
(6)
|
—
|
|
|
0.6
|
|
|
—
|
|
|
0.6
|
|
||||
Net investment hedge currency exchange contracts
(8)
|
—
|
|
|
0.2
|
|
|
—
|
|
|
0.2
|
|
||||
Interest rate swap contracts
(8)
|
—
|
|
|
4.1
|
|
|
—
|
|
|
4.1
|
|
||||
Total liabilities
|
$
|
8.1
|
|
|
$
|
4.9
|
|
|
$
|
—
|
|
|
$
|
13.0
|
|
December 31, 2018
|
|
|
|
|
|
|
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Equity securities
(4)
|
$
|
0.4
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
0.4
|
|
Currency exchange contracts
(4)
|
—
|
|
|
0.2
|
|
|
—
|
|
|
0.2
|
|
||||
Natural gas contracts
(4)
|
—
|
|
|
0.1
|
|
|
—
|
|
|
0.1
|
|
||||
Deferred compensation plan investments
(5)
|
1.3
|
|
|
—
|
|
|
—
|
|
|
1.3
|
|
||||
Total assets
|
$
|
1.7
|
|
|
$
|
0.3
|
|
|
$
|
—
|
|
|
$
|
2.0
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Deferred compensation arrangement
(5)
|
$
|
4.6
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4.6
|
|
Separation-related reimbursement awards
(6)
|
0.1
|
|
|
—
|
|
|
—
|
|
|
0.1
|
|
||||
Currency exchange contracts
(7)
|
—
|
|
|
3.9
|
|
|
—
|
|
|
3.9
|
|
||||
Natural gas contracts
(6)
|
—
|
|
|
0.1
|
|
|
—
|
|
|
0.1
|
|
||||
Total liabilities
|
$
|
4.7
|
|
|
$
|
4.0
|
|
|
$
|
—
|
|
|
$
|
8.7
|
|
(1)
|
Quoted prices in active markets for identical assets.
|
(2)
|
Quoted prices for similar assets and liabilities in active markets.
|
(3)
|
Significant unobservable inputs.
|
(4)
|
Included within "Prepaid and other current assets" on the condensed consolidated balance sheet.
|
(5)
|
Consists of a deferred compensation arrangement, through which we hold various investment securities, recognized on our balance sheets. Both the asset and liability are recorded at fair value, and are included within "Other assets" and "Other liabilities" on the condensed consolidated balance sheets, respectively.
|
(6)
|
Included within "Accrued expenses" on the condensed consolidated balance sheet.
|
(7)
|
At December 31, 2018, this amount represented a non-designated foreign currency derivative associated with the purchase price of our acquisition of the Caprolactone Business, which was settled at the closing of the acquisition for a loss of
$16.6 million
. The expense recognized in Acquisition-related costs on the condensed consolidated statements of operations during the three and six months ended
June 30, 2019
was
zero
and
$12.7 million
, respectively. See Note 4 for more information.
|
(8)
|
Included within "Other liabilities" on the condensed consolidated balance sheet.
|
In millions
|
June 30, 2019
|
|
December 31, 2018
|
||||
Raw materials
|
$
|
44.0
|
|
|
$
|
36.5
|
|
Production materials, stores and supplies
|
20.9
|
|
|
17.5
|
|
||
Finished and in-process goods
|
166.1
|
|
|
144.7
|
|
||
Subtotal
|
231.0
|
|
|
198.7
|
|
||
Less: adjustment of inventories to LIFO basis
|
(9.7
|
)
|
|
(7.3
|
)
|
||
Inventories, net
|
$
|
221.3
|
|
|
$
|
191.4
|
|
In millions
|
June 30, 2019
|
|
December 31, 2018
|
||||
Machinery and equipment
|
$
|
931.7
|
|
|
$
|
857.2
|
|
Buildings and leasehold improvements
|
107.8
|
|
|
113.1
|
|
||
Land and land improvements
|
18.7
|
|
|
19.6
|
|
||
Construction in progress
|
113.5
|
|
|
71.2
|
|
||
Total cost
|
1,171.7
|
|
|
1,061.1
|
|
||
Less: accumulated depreciation
|
(533.7
|
)
|
|
(537.3
|
)
|
||
Property, plant and equipment, net
(1)
|
$
|
638.0
|
|
|
$
|
523.8
|
|
(1)
|
This includes finance leases related to machinery and equipment at our Wickliffe, Kentucky facility of
$69.2 million
and
$69.2 million
, and net book value of
$6.4 million
and
$6.7 million
at
June 30, 2019
, and
December 31, 2018
, respectively. This also includes finance leases related to our Waynesboro, Georgia manufacturing facility for (a) machinery and equipment of
$10.0 million
and
$6.5 million
and net book value of
$9.0 million
and
$6.0 million
, (b) construction in progress of
$15.2 million
and
$13.7 million
and (c) buildings and leasehold improvements of
$0.1 million
and
$0.1 million
at
June 30, 2019
, and
December 31, 2018
, respectively. Amortization expense associated with these capital leases is included within depreciation expense. The payments remaining under these capital leases obligations are included within Note 16.
|
|
Operating Segments
|
|
|
||||||||
In millions
|
Performance Chemicals
|
|
Performance Materials
|
|
Total
|
||||||
December 31, 2018
|
$
|
126.4
|
|
|
$
|
4.3
|
|
|
$
|
130.7
|
|
Acquisitions
(1)
|
297.5
|
|
|
—
|
|
|
297.5
|
|
|||
Foreign currency translation
|
(2.5
|
)
|
|
—
|
|
|
(2.5
|
)
|
|||
June 30, 2019
|
$
|
421.4
|
|
|
$
|
4.3
|
|
|
$
|
425.7
|
|
|
June 30, 2019
|
|
December 31, 2018
|
||||||||||||||||||||
In millions
|
Gross
|
|
Accumulated amortization
|
|
Net
|
|
Gross
|
|
Accumulated amortization
|
|
Net
|
||||||||||||
Intangible assets subject to amortization (finite-lived)
(1)
|
|||||||||||||||||||||||
Brands
(2)
|
$
|
11.4
|
|
|
$
|
9.9
|
|
|
$
|
1.5
|
|
|
$
|
11.4
|
|
|
$
|
9.8
|
|
|
$
|
1.6
|
|
Customer contracts and relationships
|
307.5
|
|
|
40.1
|
|
|
267.4
|
|
|
151.0
|
|
|
30.3
|
|
|
120.7
|
|
||||||
Developed technology
|
63.8
|
|
|
2.2
|
|
|
61.6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Other
|
4.6
|
|
|
1.4
|
|
|
3.2
|
|
|
4.1
|
|
|
0.8
|
|
|
3.3
|
|
||||||
Total
|
$
|
387.3
|
|
|
$
|
53.6
|
|
|
$
|
333.7
|
|
|
$
|
166.5
|
|
|
$
|
40.9
|
|
|
$
|
125.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Intangible assets not subject to amortization (indefinite life)
(1)
|
|||||||||||||||||||||||
Brands
(2)
|
66.0
|
|
|
—
|
|
|
66.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total
|
$
|
66.0
|
|
|
$
|
—
|
|
|
$
|
66.0
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Total Other intangibles, net
|
$
|
453.3
|
|
|
$
|
53.6
|
|
|
$
|
399.7
|
|
|
$
|
166.5
|
|
|
$
|
40.9
|
|
|
$
|
125.6
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
In millions
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Cost of sales
|
$
|
0.1
|
|
|
$
|
0.1
|
|
|
$
|
0.3
|
|
|
$
|
0.4
|
|
Selling, general and administrative expenses
|
7.3
|
|
|
3.8
|
|
|
12.6
|
|
|
4.8
|
|
||||
Total amortization expense
(1)
|
$
|
7.4
|
|
|
$
|
3.9
|
|
|
$
|
12.9
|
|
|
$
|
5.2
|
|
|
June 30, 2019
|
|
|
|
|
||||||
In millions, except percentages
|
Interest rate
|
|
Maturity date
|
|
June 30, 2019
|
|
December 31, 2018
|
||||
Revolving Credit Facility
(1)
|
3.90%
|
|
2023
|
|
$
|
257.5
|
|
|
$
|
—
|
|
Term Loan Facilities
|
3.76%
|
|
2022-2023
|
|
750.0
|
|
|
375.0
|
|
||
Senior Notes
|
4.50%
|
|
2026
|
|
300.0
|
|
|
300.0
|
|
||
Finance lease obligations
|
7.67%
|
|
2027
|
|
80.0
|
|
|
80.0
|
|
||
Other
|
4.95%
|
|
2019-2021
|
|
5.7
|
|
|
3.9
|
|
||
Total debt including finance lease obligations
|
|
|
|
|
1,393.2
|
|
|
758.9
|
|
||
Less: debt issuance costs
|
|
|
|
|
7.6
|
|
|
6.5
|
|
||
Total debt including finance lease obligations, net of debt issuance costs
|
|
|
|
|
1,385.6
|
|
|
752.4
|
|
||
Less: debt maturing within one year
(2)
|
|
|
|
|
22.3
|
|
|
11.2
|
|
||
Long-term debt including finance lease obligations
|
|
|
|
|
$
|
1,363.3
|
|
|
$
|
741.2
|
|
(1)
|
Letters of credit outstanding under the revolving credit facility were
$1.9 million
and available funds under the facility were
$490.6 million
at
June 30, 2019
.
|
(2)
|
Debt maturing within one year is included in "Notes payable and current maturities of long-term debt" on the condensed consolidated balance sheets.
|
|
Ingevity Stockholders'
|
|
|
|
|
|||||||||||||||||||||||||
|
Common Stock
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
In millions, except per share data in thousands
|
Shares
|
|
Amount
|
|
Additional paid in capital
|
|
Retained earnings
|
|
Accumulated
other comprehensive income (loss) |
|
Treasury stock
|
|
Noncontrolling interest
|
|
Total Equity
|
|||||||||||||||
Balance at December 31, 2018
|
42,332
|
|
|
$
|
0.4
|
|
|
$
|
98.3
|
|
|
$
|
313.5
|
|
|
$
|
(17.7
|
)
|
|
$
|
(55.8
|
)
|
|
$
|
—
|
|
|
$
|
338.7
|
|
Net income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
22.7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
22.7
|
|
|||||||
Other comprehensive income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9.1
|
|
|
—
|
|
|
—
|
|
|
9.1
|
|
|||||||
Common stock issued
|
276
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Exercise of stock options, net
|
51
|
|
|
—
|
|
|
1.4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1.4
|
|
|||||||
Tax payments related to vested restricted stock units
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(14.3
|
)
|
|
—
|
|
|
(14.3
|
)
|
|||||||
Share repurchase program
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3.3
|
)
|
|
—
|
|
|
(3.3
|
)
|
|||||||
Share-based compensation plans
|
—
|
|
|
—
|
|
|
4.1
|
|
|
—
|
|
|
—
|
|
|
0.3
|
|
|
—
|
|
|
4.4
|
|
|||||||
Balance at March 31, 2019
|
42,659
|
|
|
$
|
0.4
|
|
|
$
|
103.8
|
|
|
$
|
336.2
|
|
|
$
|
(8.6
|
)
|
|
$
|
(73.1
|
)
|
|
$
|
—
|
|
|
$
|
358.7
|
|
Net income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
56.8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
56.8
|
|
|||||||
Other comprehensive income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(19.4
|
)
|
|
—
|
|
|
—
|
|
|
(19.4
|
)
|
|||||||
Common stock issued
|
5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Exercise of stock options, net
|
6
|
|
|
—
|
|
|
0.2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.2
|
|
|||||||
Share-based compensation plans
|
—
|
|
|
—
|
|
|
3.5
|
|
|
—
|
|
|
—
|
|
|
0.9
|
|
|
—
|
|
|
4.4
|
|
|||||||
Balance at June 30, 2019
|
42,670
|
|
|
$
|
0.4
|
|
|
$
|
107.5
|
|
|
$
|
393.0
|
|
|
$
|
(28.0
|
)
|
|
$
|
(72.2
|
)
|
|
$
|
—
|
|
|
$
|
400.7
|
|
|
Ingevity Stockholders'
|
|
|
|
|
|||||||||||||||||||||||||
|
Common Stock
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
In millions, except per share data in thousands
|
Shares
|
|
Amount
|
|
Additional paid in capital
|
|
Retained earnings
|
|
Accumulated
other comprehensive income (loss) |
|
Treasury stock
|
|
Noncontrolling interest
|
|
Total Equity
|
|||||||||||||||
Balance at December 31, 2017
|
42,209
|
|
|
$
|
0.4
|
|
|
$
|
140.1
|
|
|
$
|
142.8
|
|
|
$
|
(11.7
|
)
|
|
$
|
(7.7
|
)
|
|
$
|
14.0
|
|
|
$
|
277.9
|
|
Net income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
30.8
|
|
|
—
|
|
|
—
|
|
|
5.0
|
|
|
35.8
|
|
|||||||
Other comprehensive income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4.0
|
|
|
—
|
|
|
—
|
|
|
4.0
|
|
|||||||
Common stock issued
|
56
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Exercise of stock options, net
|
5
|
|
|
—
|
|
|
0.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.1
|
|
|||||||
Tax payments related to vested restricted stock units
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1.5
|
)
|
|
—
|
|
|
(1.5
|
)
|
|||||||
Share repurchase program
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3.1
|
)
|
|
—
|
|
|
(3.1
|
)
|
|||||||
Noncontrolling interest distributions
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5.3
|
)
|
|
(5.3
|
)
|
|||||||
Share-based compensation plans
|
—
|
|
|
—
|
|
|
3.1
|
|
|
—
|
|
|
—
|
|
|
0.4
|
|
|
—
|
|
|
3.5
|
|
|||||||
Adoption of ASC 606
|
—
|
|
|
—
|
|
|
—
|
|
|
1.6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1.6
|
|
|||||||
Balance at March 31, 2018
|
42,270
|
|
|
$
|
0.4
|
|
|
$
|
143.3
|
|
|
$
|
175.2
|
|
|
$
|
(7.7
|
)
|
|
$
|
(11.9
|
)
|
|
$
|
13.7
|
|
|
$
|
313.0
|
|
Net income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
46.7
|
|
|
—
|
|
|
—
|
|
|
5.5
|
|
|
52.2
|
|
|||||||
Other comprehensive income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6.3
|
)
|
|
—
|
|
|
—
|
|
|
(6.3
|
)
|
|||||||
Common stock issued
|
38
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Exercise of stock options, net
|
1
|
|
|
—
|
|
|
0.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.1
|
|
|||||||
Share repurchase program
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6.0
|
)
|
|
—
|
|
|
(6.0
|
)
|
|||||||
Noncontrolling interest distributions
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7.9
|
)
|
|
(7.9
|
)
|
|||||||
Share-based compensation plans
|
—
|
|
|
—
|
|
|
3.5
|
|
|
—
|
|
|
—
|
|
|
0.7
|
|
|
—
|
|
|
4.2
|
|
|||||||
Balance at June 30, 2018
|
42,309
|
|
|
$
|
0.4
|
|
|
$
|
146.9
|
|
|
$
|
221.9
|
|
|
$
|
(14.0
|
)
|
|
$
|
(17.2
|
)
|
|
$
|
11.3
|
|
|
$
|
349.3
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
In millions
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation
|
|
|
|
|
|
|
|
||||||||
Beginning Balance
|
$
|
(7.0
|
)
|
|
$
|
(6.2
|
)
|
|
$
|
(16.4
|
)
|
|
$
|
(10.1
|
)
|
Net gains (losses) on foreign currency translation
|
(15.5
|
)
|
|
(6.8
|
)
|
|
(6.1
|
)
|
|
(2.9
|
)
|
||||
Ending Balance
|
$
|
(22.5
|
)
|
|
$
|
(13.0
|
)
|
|
$
|
(22.5
|
)
|
|
$
|
(13.0
|
)
|
|
|
|
|
|
|
|
|
||||||||
Derivative Instruments
|
|
|
|
|
|
|
|
||||||||
Beginning Balance
|
$
|
0.1
|
|
|
$
|
0.1
|
|
|
$
|
0.4
|
|
|
$
|
—
|
|
Gains (losses) on derivative instruments
|
(5.0
|
)
|
|
0.8
|
|
|
(4.9
|
)
|
|
0.9
|
|
||||
Less: tax provision (benefit)
|
(1.2
|
)
|
|
0.2
|
|
|
(1.2
|
)
|
|
0.2
|
|
||||
Net gains (losses) on derivative instruments
|
(3.8
|
)
|
|
0.6
|
|
|
(3.7
|
)
|
|
0.7
|
|
||||
(Gains) losses reclassified to net income
|
(0.1
|
)
|
|
(0.2
|
)
|
|
(0.6
|
)
|
|
(0.2
|
)
|
||||
Less: tax (provision) benefit
|
—
|
|
|
—
|
|
|
(0.1
|
)
|
|
—
|
|
||||
Net (gains) losses reclassified to net income
|
(0.1
|
)
|
|
(0.2
|
)
|
|
(0.5
|
)
|
|
(0.2
|
)
|
||||
Other comprehensive income (loss), net of tax
|
(3.9
|
)
|
|
0.4
|
|
|
(4.2
|
)
|
|
0.5
|
|
||||
Ending Balance
|
$
|
(3.8
|
)
|
|
$
|
0.5
|
|
|
$
|
(3.8
|
)
|
|
$
|
0.5
|
|
|
|
|
|
|
|
|
|
||||||||
Pension and other postretirement benefits
|
|
|
|
|
|
|
|
||||||||
Beginning Balance
|
$
|
(1.7
|
)
|
|
$
|
(1.6
|
)
|
|
$
|
(1.7
|
)
|
|
$
|
(1.6
|
)
|
Actuarial and other (gains) losses, amortization of prior service cost (credits), and settlement and curtailment (income) charge reclassified to net income
|
—
|
|
|
0.1
|
|
|
—
|
|
|
0.1
|
|
||||
Less: tax (provision) benefit
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Net actuarial and other (gains) losses, amortization of prior service cost (credits), and settlement and curtailment (income) charge reclassified to net income
|
—
|
|
|
0.1
|
|
|
—
|
|
|
0.1
|
|
||||
Other comprehensive income (loss), net of tax
|
—
|
|
|
0.1
|
|
|
—
|
|
|
0.1
|
|
||||
Ending Balance
|
$
|
(1.7
|
)
|
|
$
|
(1.5
|
)
|
|
$
|
(1.7
|
)
|
|
$
|
(1.5
|
)
|
|
|
|
|
|
|
|
|
||||||||
Total AOCI ending balance at June 30
|
$
|
(28.0
|
)
|
|
$
|
(14.0
|
)
|
|
$
|
(28.0
|
)
|
|
$
|
(14.0
|
)
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
In millions
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Derivative instruments
|
|
|
|
|
|
|
|
||||||||
Currency exchange contracts
(1)
|
$
|
—
|
|
|
$
|
(0.1
|
)
|
|
$
|
—
|
|
|
$
|
(0.1
|
)
|
Natural gas contracts
(2)
|
(0.1
|
)
|
|
(0.1
|
)
|
|
(0.6
|
)
|
|
(0.1
|
)
|
||||
Total before tax
|
(0.1
|
)
|
|
(0.2
|
)
|
|
(0.6
|
)
|
|
(0.2
|
)
|
||||
(Provision) benefit for income taxes
|
—
|
|
|
—
|
|
|
0.1
|
|
|
—
|
|
||||
Amount included in net income (loss)
|
$
|
(0.1
|
)
|
|
$
|
(0.2
|
)
|
|
$
|
(0.5
|
)
|
|
$
|
(0.2
|
)
|
|
|
|
|
|
|
|
|
||||||||
Pension and other post retirement benefits
|
|
|
|
|
|
|
|
||||||||
Amortization of unrecognized net actuarial and other gains (losses)
(3)
|
—
|
|
|
(0.1
|
)
|
|
—
|
|
|
(0.1
|
)
|
||||
Total before tax
|
—
|
|
|
(0.1
|
)
|
|
—
|
|
|
(0.1
|
)
|
||||
(Provision) benefit for income taxes
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Amount included in net income (loss)
|
$
|
—
|
|
|
$
|
(0.1
|
)
|
|
$
|
—
|
|
|
$
|
(0.1
|
)
|
_______________
|
|||||||||||||||
(1) Included within "Net sales" on the condensed consolidated statement of operations.
|
|||||||||||||||
(2) Included within "Cost of sales" on the condensed consolidated statement of operations.
|
|||||||||||||||
(3) Included within "Other (income) expense, net" on the condensed consolidated statement of operations.
|
|
Three Months Ended June 30,
|
||||||||||||||
|
Pensions
|
|
Other Benefits
|
||||||||||||
In millions
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Components of net periodic benefit cost (income):
|
|
|
|
|
|
|
|
||||||||
Service cost
(1)
|
$
|
0.4
|
|
|
$
|
0.4
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Interest cost
(2)
|
0.2
|
|
|
0.2
|
|
|
—
|
|
|
—
|
|
||||
Expected return on plan assets
(2)
|
(0.2
|
)
|
|
(0.2
|
)
|
|
—
|
|
|
—
|
|
||||
Amortization of net actuarial and other (gain) loss
(2)
|
—
|
|
|
0.1
|
|
|
—
|
|
|
—
|
|
||||
Net periodic benefit cost (income)
|
$
|
0.4
|
|
|
$
|
0.5
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Six Months Ended June 30,
|
||||||||||||||
|
Pensions
|
|
Other Benefits
|
||||||||||||
In millions
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Components of net periodic benefit cost (income):
|
|
|
|
|
|
|
|
||||||||
Service cost
(1)
|
$
|
0.7
|
|
|
$
|
0.8
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Interest cost
(2)
|
0.5
|
|
|
0.4
|
|
|
—
|
|
|
—
|
|
||||
Expected return on plan assets
(2)
|
(0.5
|
)
|
|
(0.4
|
)
|
|
—
|
|
|
—
|
|
||||
Amortization of net actuarial and other (gain) loss
(2)
|
—
|
|
|
0.1
|
|
|
—
|
|
|
—
|
|
||||
Net periodic benefit cost (income)
|
$
|
0.7
|
|
|
$
|
0.9
|
|
|
$
|
—
|
|
|
$
|
—
|
|
(1)
|
Amounts are recorded to "Cost of sales" on our condensed consolidated statements of operations consistent with the employee compensation costs that participate in the plan.
|
(2)
|
Amounts are recorded to "Other (income) expense, net" on our condensed consolidated statements of operations.
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
In millions
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Restructuring and other (income) charges, net
|
|
|
|
|
|
|
|
||||||||
Gain on sale of assets and businesses
|
$
|
(0.4
|
)
|
|
$
|
—
|
|
|
$
|
(0.4
|
)
|
|
$
|
(0.6
|
)
|
Other miscellaneous exit costs
|
0.7
|
|
|
—
|
|
|
0.7
|
|
|
—
|
|
||||
Total restructuring and other (income) charges, net
|
$
|
0.3
|
|
|
$
|
—
|
|
|
$
|
0.3
|
|
|
$
|
(0.6
|
)
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||
Effective tax rate
|
21.9
|
%
|
|
19.2
|
%
|
|
16.7
|
%
|
|
20.1
|
%
|
|
Three Months Ended June 30,
|
||||||||||||||||
|
2019
|
|
2018
|
||||||||||||||
In millions, except percentages
|
Before tax
|
Tax
|
Effective tax rate % impact
|
|
Before tax
|
Tax
|
Effective tax rate % impact
|
||||||||||
Consolidated operations
|
$
|
72.7
|
|
$
|
15.9
|
|
21.9
|
%
|
|
$
|
64.6
|
|
$
|
12.4
|
|
19.2
|
%
|
Discrete items:
|
|
|
|
|
|
|
|
||||||||||
Restructuring and other (income) charges, net
|
0.3
|
|
—
|
|
|
|
—
|
|
—
|
|
|
||||||
Acquisition and other-related costs
(1)
|
0.8
|
|
0.3
|
|
|
|
1.1
|
|
0.3
|
|
|
||||||
Other tax only discrete items
|
—
|
|
0.1
|
|
|
|
—
|
|
0.3
|
|
|
||||||
Total discrete items
|
1.1
|
|
0.4
|
|
|
|
1.1
|
|
0.6
|
|
|
||||||
Consolidated operations, before discrete items
|
$
|
73.8
|
|
$
|
16.3
|
|
|
|
$
|
65.7
|
|
$
|
13.0
|
|
|
||
Quarterly effect of changes in the EAETR
(2)
|
|
|
22.1
|
%
|
|
|
|
19.8
|
%
|
|
Six Months Ended June 30,
|
||||||||||||||||
|
2019
|
|
2018
|
||||||||||||||
In millions, except percentages
|
Before tax
|
Tax
|
Effective tax rate % impact
|
|
Before tax
|
Tax
|
Effective tax rate % impact
|
||||||||||
Consolidated operations
|
$
|
95.4
|
|
$
|
15.9
|
|
16.7
|
%
|
|
$
|
110.1
|
|
$
|
22.1
|
|
20.1
|
%
|
Discrete items:
|
|
|
|
|
|
|
|
||||||||||
Restructuring and other (income) charges, net
|
0.3
|
|
—
|
|
|
|
(0.6
|
)
|
—
|
|
|
||||||
Acquisition and other-related costs
(1)
|
32.0
|
|
5.6
|
|
|
|
5.7
|
|
1.3
|
|
|
||||||
Other tax only discrete items
|
—
|
|
6.8
|
|
|
|
—
|
|
0.1
|
|
|
||||||
Total discrete items
|
32.3
|
|
12.4
|
|
|
|
5.1
|
|
1.4
|
|
|
||||||
Consolidated operations, before discrete items
|
$
|
127.7
|
|
$
|
28.3
|
|
|
|
$
|
115.2
|
|
$
|
23.5
|
|
|
||
Quarterly effect of changes in the EAETR
(2)
|
|
|
22.2
|
%
|
|
|
|
20.4
|
%
|
(1)
|
See Note 4 for more information on our acquisition and other-related costs.
|
(2)
|
Increase in EAETR for the
three and six
months ended
June 30, 2019
, as compared to
June 30, 2018
, is driven primarily by the
30
percent acquisition of our noncontrolling interest in Purifications Cellutions, LLC. ("PurCell") on August 1, 2018. PurCell, prior to the acquisition, was a limited liability company and was treated as a "pass-through" entity for tax purposes. Although we consolidated
100
percent of PurCell, only
70
percent of PurCell's earnings were included in the calculation of Ingevity's provision for income taxes as presented on the Condensed Consolidated Statement of Operations. Post-acquisition,
100
percent of the earnings of the entity are now included in the tax calculation which when combined with other factors including the impact of U.S. Tax Reform resulted in a slight increase to our effective tax rate.
|
Leased Asset Class
|
|
Expected Lease Term
|
Administrative offices
|
|
1 to 10 years
|
Manufacturing buildings
|
|
10 to 28 years
|
Manufacturing and office equipment
|
|
2 to 6 years
|
Warehousing and storage facilities
|
|
2 to 10 years
|
Vehicles
|
|
3 to 6 years
|
Rail cars
|
|
2 to 8 years
|
In millions
|
Financial Statement Caption
|
June 30, 2019
|
||
Assets
|
|
|
||
Operating lease assets, net
(1)
|
Operating lease assets, net
|
$
|
58.9
|
|
Finance lease assets, net
(2)
|
Property, plant, and equipment, net
|
30.7
|
|
|
Finance lease assets, net
(2)
|
Other assets, net
|
1.2
|
|
|
Total lease assets
|
|
$
|
90.8
|
|
Liabilities
|
|
|
||
Current
|
|
|
||
Operating lease liabilities
(3)
|
Current operating lease liabilities
|
$
|
18.0
|
|
Finance lease liabilities
|
Notes payable and current maturities of long-term debt
|
—
|
|
|
Noncurrent
|
|
|
||
Operating lease liabilities
|
Noncurrent operating lease liabilities
|
41.2
|
|
|
Finance lease liabilities
|
Long-term debt including finance lease obligations
|
80.0
|
|
|
Total lease liabilities
|
|
$
|
139.2
|
|
(2)
|
Finance lease assets are recorded net of accumulated amortization in Property, plant, and equipment, net and Other assets, net of
$63.8 million
and
$0.2 million
, as of
June 30, 2019
, respectively.
|
In millions
|
Financial Statement Caption
|
Three Months Ended June 30, 2019
|
|
Six Months Ended June 30, 2019
|
||||
Operating lease cost
(1)
|
Cost of sales
|
$
|
5.7
|
|
|
$
|
11.2
|
|
|
Selling, general, and administrative expenses
|
0.6
|
|
|
1.2
|
|
||
Finance lease cost
|
|
|
|
|
||||
Amortization of leased assets
|
Cost of sales
|
$
|
0.4
|
|
|
$
|
0.8
|
|
Interest on lease liabilities
|
Interest expense, net
|
1.6
|
|
|
3.1
|
|
||
Net lease cost
(2)
|
|
$
|
8.3
|
|
|
$
|
16.3
|
|
|
June 30, 2019
|
||||||||||
In millions
|
Operating leases
|
|
Finance leases
|
|
Total
|
||||||
2019
|
$
|
10.8
|
|
|
$
|
3.1
|
|
|
$
|
13.9
|
|
2020
|
18.3
|
|
6.1
|
|
24.4
|
||||||
2021
|
14.0
|
|
6.1
|
|
20.1
|
||||||
2022
|
10.1
|
|
6.1
|
|
16.2
|
||||||
2023
|
6.4
|
|
6.1
|
|
12.5
|
||||||
2024 and thereafter
|
7.6
|
|
101.6
|
|
109.2
|
||||||
Total lease payments
|
$
|
67.2
|
|
|
$
|
129.1
|
|
|
$
|
196.3
|
|
Less: interest
|
7.9
|
|
49.1
|
|
57.0
|
||||||
Present value of lease liabilities
(1)
|
$
|
59.3
|
|
|
$
|
80.0
|
|
|
$
|
139.3
|
|
(1)
|
As of
June 30, 2019
, we have additional operating lease commitments that have not yet commenced of approximately
$33.9 million
for the relocation of our corporate headquarters. The lease is expected to commence in the first half of 2020 and the lease term is for
15 years
with two
5
year extensions.
|
In millions
|
Operating leases
|
|
Finance leases
|
||||
2019
|
$
|
21.9
|
|
|
$
|
6.1
|
|
2020
|
17.2
|
|
|
6.1
|
|
||
2021
|
13.3
|
|
|
6.1
|
|
||
2022
|
9.7
|
|
|
6.1
|
|
||
2023
|
6.0
|
|
|
6.1
|
|
||
2024 and thereafter
|
5.9
|
|
|
101.5
|
|
||
Minimum lease payments
|
$
|
74.0
|
|
|
$
|
132.0
|
|
Less: interest
|
|
|
52.0
|
|
|||
Capital lease obligations
|
|
|
$
|
80.0
|
|
|
June 30, 2019
|
|
Weighted-average remaining lease term (years)
|
|
|
Operating leases
|
4.4
|
|
Finance leases
|
8.9
|
|
Weighted-average discount rate
|
|
|
Operating leases
|
5.65
|
%
|
Finance leases
|
7.67
|
%
|
In millions
|
Six Months Ended June 30, 2019
|
||
Cash paid for amounts included in the measurement of lease liabilities:
|
|
||
Operating cash flows from operating leases
|
$
|
(12.3
|
)
|
Operating cash flows from finance leases
|
(3.1
|
)
|
|
Financing cash flows from finance leases
|
$
|
—
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
In millions
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Net sales
|
|
|
|
|
|
|
|
||||||||
Performance Materials
|
$
|
123.1
|
|
|
$
|
96.1
|
|
|
$
|
232.2
|
|
|
$
|
191.6
|
|
Performance Chemicals
|
229.7
|
|
|
212.5
|
|
|
397.4
|
|
|
352.2
|
|
||||
Total net sales
(1)
|
$
|
352.8
|
|
|
$
|
308.6
|
|
|
$
|
629.6
|
|
|
$
|
543.8
|
|
|
|
|
|
|
|
|
|
||||||||
Segment EBITDA
(2)
|
|
|
|
|
|
|
|
||||||||
Performance Materials
|
$
|
49.3
|
|
|
$
|
42.7
|
|
|
$
|
100.5
|
|
|
$
|
84.9
|
|
Performance Chemicals
|
59.0
|
|
|
46.7
|
|
|
91.3
|
|
|
71.6
|
|
||||
Total segment EBITDA
(2)
|
$
|
108.3
|
|
|
$
|
89.4
|
|
|
$
|
191.8
|
|
|
$
|
156.5
|
|
|
|
|
|
|
|
|
|
||||||||
Interest expense, net
|
(13.1
|
)
|
|
(7.8
|
)
|
|
(24.2
|
)
|
|
(13.9
|
)
|
||||
(Provision) benefit for income taxes
|
(15.9
|
)
|
|
(12.4
|
)
|
|
(15.9
|
)
|
|
(22.1
|
)
|
||||
Depreciation and amortization - Performance Materials
|
(5.8
|
)
|
|
(6.1
|
)
|
|
(11.6
|
)
|
|
(11.4
|
)
|
||||
Depreciation and amortization - Performance Chemicals
|
(15.6
|
)
|
|
(9.8
|
)
|
|
(28.3
|
)
|
|
(16.0
|
)
|
||||
Restructuring and other income (charges), net
(3)
|
(0.3
|
)
|
|
—
|
|
|
(0.3
|
)
|
|
0.6
|
|
||||
Acquisition and other related costs
(4)
|
(0.8
|
)
|
|
(1.1
|
)
|
|
(32.0
|
)
|
|
(5.7
|
)
|
||||
Net (income) loss attributable to noncontrolling interests
|
—
|
|
|
(5.5
|
)
|
|
—
|
|
|
(10.5
|
)
|
||||
Net income (loss) attributable to Ingevity stockholders
|
$
|
56.8
|
|
|
$
|
46.7
|
|
|
$
|
79.5
|
|
|
$
|
77.5
|
|
(1)
|
Relates to external customers only, all intersegment sales and related profit have been eliminated in consolidation.
|
(2)
|
Segment EBITDA is the primary measure used by the Company's chief operating decision maker to evaluate the performance of and allocate resources among our operating segments. Segment EBITDA is defined as segment revenue less segment operating expenses (segment operating expenses consist of costs of sales, selling, general and administrative expenses, other (income) expense, net, excluding depreciation and amortization). We have excluded the following items from segment EBITDA: interest expense associated with corporate debt facilities, income taxes, depreciation, amortization, restructuring and other (income) charges, acquisition and other related costs, pension and postretirement settlement and curtailment (income) charge.
|
(3)
|
Income (charges) for all periods presented related to our Performance Chemicals segment.
|
(4)
|
Charges associated with the acquisition and integration of the Caprolactone Business and Pine Chemical Business. For more detail on the charges incurred see Note 4 within these Condensed Consolidated Financial Statements.
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
In millions, except share and per share data
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Net income (loss) attributable to Ingevity stockholders
|
$
|
56.8
|
|
|
$
|
46.7
|
|
|
$
|
79.5
|
|
|
$
|
77.5
|
|
|
|
|
|
|
|
|
|
||||||||
Basic and Diluted earnings (loss) per share
|
|
|
|
|
|
|
|
||||||||
Basic earnings (loss) per share attributable to Ingevity stockholders
|
$
|
1.36
|
|
|
$
|
1.11
|
|
|
$
|
1.90
|
|
|
$
|
1.84
|
|
Diluted earnings (loss) per share attributable to Ingevity stockholders
|
1.34
|
|
|
1.10
|
|
|
1.88
|
|
|
1.82
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Shares
(in thousands)
|
|
|
|
|
|
|
|
||||||||
Weighted average number of common shares outstanding - Basic
|
41,844
|
|
|
42,084
|
|
|
41,770
|
|
|
42,088
|
|
||||
Weighted average additional shares assuming conversion of potential common shares
|
358
|
|
|
528
|
|
|
440
|
|
|
515
|
|
||||
Shares - diluted basis
|
42,202
|
|
|
42,612
|
|
|
42,210
|
|
|
42,603
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||
In thousands
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||
Average number of potential common shares - antidilutive
|
135
|
|
|
98
|
|
|
91
|
|
|
67
|
|
•
|
we are exposed to risks that the expected benefits from the acquisitions of Georgia Pacific's pine chemicals business ("Pine Chemical Acquisition") and of Perstorp Holding AB's caprolactone business ("Caprolactone Acquisition") may not be realized or will not be realized within the expected time period, the risk that the acquired businesses will not be integrated successfully, the risk of significant transaction costs and unknown or understated liabilities;
|
•
|
we may be adversely affected by general economic and financial conditions beyond our control;
|
•
|
we are exposed to risks related to our international sales and operations;
|
•
|
our reported results could be adversely affected by currency exchange rates and currency devaluation could impair our competitiveness;
|
•
|
our operations outside the U.S. require us to comply with a number of U.S. and foreign regulations, violations of which could have a material adverse effect on our financial condition and results of operations;
|
•
|
our engineered polymers product line may be adversely affected by Brexit;
|
•
|
we are dependent upon attracting and retaining key personnel;
|
•
|
adverse conditions in the global automotive market or adoption of alternative or new technologies may adversely affect demand for our automotive carbon products;
|
•
|
we face competition from producers of alternative products and new technologies, and new or emerging competitors;
|
•
|
we face competition from infringing intellectual property activity;
|
•
|
if increasingly more stringent air quality standards worldwide are not adopted, our growth could be impacted;
|
•
|
we may be adversely affected by a decrease in government infrastructure spending;
|
•
|
our printing inks business serves customers in a market that is facing declining volumes and downward pricing;
|
•
|
our Performance Chemicals segment is highly dependent on crude tall oil ("CTO") which is limited in supply;
|
•
|
lack of access to sufficient CTO would impact our ability to produce CTO-based products;
|
•
|
a prolonged period of low energy prices may materially impact our results of operations;
|
•
|
we are dependent upon third parties for the provision of certain critical operating services at several of our facilities;
|
•
|
the occurrence of a natural disaster, such as a hurricane, winter or tropical storm, earthquake, tornado, flood, fire or other matters such as labor difficulties (including work stoppages), equipment failure or unscheduled maintenance and repair, which could result in operational disruptions of varied duration;
|
•
|
from time to time we are called upon to protect our intellectual property rights and proprietary information though litigation and other means;
|
•
|
if we are unable to protect our intellectual property and other proprietary information we may lose significant competitive advantage;
|
•
|
information technology security breaches and other disruptions;
|
•
|
government policies and regulations, including, but not limited to, those affecting the environment, climate change, tariffs, tax policies and the chemicals industry; and
|
•
|
losses due to lawsuits arising out of environmental damage or personal injuries associated with chemical or other manufacturing processes.
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
In millions
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Net sales
|
$
|
352.8
|
|
|
$
|
308.6
|
|
|
$
|
629.6
|
|
|
$
|
543.8
|
|
Cost of sales
|
218.4
|
|
|
193.1
|
|
|
398.1
|
|
|
343.2
|
|
||||
Gross profit
|
134.4
|
|
|
115.5
|
|
|
231.5
|
|
|
200.6
|
|
||||
Selling, general and administrative expenses
|
42.5
|
|
|
35.9
|
|
|
81.6
|
|
|
62.0
|
|
||||
Research and technical expenses
|
5.0
|
|
|
5.3
|
|
|
10.1
|
|
|
10.7
|
|
||||
Restructuring and other (income) charges, net
|
0.3
|
|
|
—
|
|
|
0.3
|
|
|
(0.6
|
)
|
||||
Acquisition-related costs
|
0.8
|
|
|
0.5
|
|
|
23.6
|
|
|
4.3
|
|
||||
Other (income) expense, net
|
—
|
|
|
1.4
|
|
|
(3.7
|
)
|
|
0.2
|
|
||||
Interest expense, net
|
13.1
|
|
|
7.8
|
|
|
24.2
|
|
|
13.9
|
|
||||
Income (loss) before income taxes
|
72.7
|
|
|
64.6
|
|
|
95.4
|
|
|
110.1
|
|
||||
Provision (benefit) for income taxes
|
15.9
|
|
|
12.4
|
|
|
15.9
|
|
|
22.1
|
|
||||
Net income (loss)
|
56.8
|
|
|
52.2
|
|
|
79.5
|
|
|
88.0
|
|
||||
Less: Net income (loss) attributable to noncontrolling interest
|
—
|
|
|
5.5
|
|
|
—
|
|
|
10.5
|
|
||||
Net income (loss) attributable to Ingevity stockholders
|
$
|
56.8
|
|
|
$
|
46.7
|
|
|
$
|
79.5
|
|
|
$
|
77.5
|
|
|
|
|
Percentage change vs. prior year
|
||||||||
In millions, except percentages
|
Net sales
|
|
Total change
|
|
Currency
effect |
|
Price/Mix
|
|
Volume
|
||
Three months ended June 30, 2019
|
$
|
352.8
|
|
|
14%
|
|
(1)%
|
|
4%
|
|
11%
|
Six months ended June 30, 2019
|
$
|
629.6
|
|
|
16%
|
|
(1)%
|
|
5%
|
|
12%
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
In millions
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Foreign currency exchange (income) loss
|
$
|
(0.3
|
)
|
|
$
|
1.8
|
|
|
$
|
(2.6
|
)
|
|
$
|
1.0
|
|
Royalty and sundry (income) loss
|
(0.1
|
)
|
|
(0.3
|
)
|
|
(0.2
|
)
|
|
(0.5
|
)
|
||||
Other (income) expense, net
|
0.4
|
|
|
(0.1
|
)
|
|
(0.9
|
)
|
|
(0.3
|
)
|
||||
Total Other (income) expense, net
|
$
|
—
|
|
|
$
|
1.4
|
|
|
$
|
(3.7
|
)
|
|
$
|
0.2
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
In millions
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Interest expense on finance lease obligations
|
$
|
1.6
|
|
|
$
|
1.6
|
|
|
3.1
|
|
|
3.1
|
|
||
Interest expense on revolving credit and term loan facilities
(1)
|
10.3
|
|
|
3.6
|
|
|
17.5
|
|
|
6.7
|
|
||||
Interest expense on senior notes
(1)
|
3.6
|
|
|
3.6
|
|
|
7.1
|
|
|
6.2
|
|
||||
Interest income associated with our Restricted investment
|
(0.5
|
)
|
|
(0.5
|
)
|
|
(1.0
|
)
|
|
(1.0
|
)
|
||||
Capitalized interest
|
(0.4
|
)
|
|
(0.2
|
)
|
|
(0.8
|
)
|
|
(0.4
|
)
|
||||
Other interest expense, net
|
(1.5
|
)
|
|
(0.3
|
)
|
|
(1.7
|
)
|
|
(0.7
|
)
|
||||
Total Interest expense, net
|
$
|
13.1
|
|
|
$
|
7.8
|
|
|
$
|
24.2
|
|
|
$
|
13.9
|
|
(1)
|
See Note 10 within the Condensed Consolidated Financial Statements for more information.
|
In millions
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
2019
|
|
2018
|
|
2019
|
|
2018
|
|||||||||
Automotive Technologies product line
|
$
|
113.9
|
|
|
$
|
86.1
|
|
|
$
|
213.6
|
|
|
$
|
172.0
|
|
Process Purifications product line
|
9.2
|
|
|
10.0
|
|
|
18.6
|
|
|
19.6
|
|
||||
Total Performance Materials - Net sales
|
$
|
123.1
|
|
|
$
|
96.1
|
|
|
$
|
232.2
|
|
|
$
|
191.6
|
|
Segment EBITDA
|
$
|
49.3
|
|
|
$
|
42.7
|
|
|
$
|
100.5
|
|
|
$
|
84.9
|
|
|
Percentage change vs. prior year
|
||||||||||||||
Performance Materials
(In millions, except percentages)
|
Net sales
|
|
Total change
|
|
Currency
effect |
|
Price/Mix
|
|
Volume
|
||||||
Three months ended June 30, 2019
|
$
|
123.1
|
|
|
28
|
%
|
|
(1
|
)%
|
|
6
|
%
|
|
23
|
%
|
Six months ended June 30, 2019
|
$
|
232.2
|
|
|
21
|
%
|
|
(1
|
)%
|
|
5
|
%
|
|
17
|
%
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
In millions
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Oilfield Technologies product line
|
$
|
29.7
|
|
|
$
|
29.1
|
|
|
$
|
58.9
|
|
|
$
|
51.5
|
|
Pavement Technologies product line
|
64.6
|
|
|
65.6
|
|
|
83.1
|
|
|
84.1
|
|
||||
Industrial Specialties product line
|
101.1
|
|
|
117.8
|
|
|
196.9
|
|
|
216.6
|
|
||||
Engineered Polymers product line
|
$
|
34.3
|
|
|
$
|
—
|
|
|
$
|
58.5
|
|
|
$
|
—
|
|
Total Performance Chemicals - Net sales
|
$
|
229.7
|
|
|
$
|
212.5
|
|
|
$
|
397.4
|
|
|
$
|
352.2
|
|
Segment EBITDA
|
$
|
59.0
|
|
|
$
|
46.7
|
|
|
$
|
91.3
|
|
|
$
|
71.6
|
|
|
Percentage change vs. prior year
|
||||||||||||||
Performance Chemicals
(In millions, except percentages)
|
Net sales
|
|
Total change
|
|
Currency
effect |
|
Price/Mix
|
|
Volume
|
||||||
Three months ended June 30, 2019
|
$
|
229.7
|
|
|
8
|
%
|
|
(1
|
)%
|
|
3
|
%
|
|
6
|
%
|
Six months ended June 30, 2019
|
$
|
397.4
|
|
|
13
|
%
|
|
(1
|
)%
|
|
4
|
%
|
|
10
|
%
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
In millions
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Oilfield Technologies product line
|
$
|
29.7
|
|
|
$
|
29.1
|
|
|
$
|
58.9
|
|
|
$
|
56.1
|
|
Pavement Technologies product line
|
64.6
|
|
|
65.6
|
|
|
83.1
|
|
|
84.3
|
|
||||
Industrial Specialties product line
|
101.1
|
|
|
117.8
|
|
|
196.9
|
|
|
232.0
|
|
||||
Engineered Polymers product line
|
$
|
34.3
|
|
|
$
|
41.4
|
|
|
$
|
76.2
|
|
|
$
|
87.9
|
|
Pro Forma Combined Net Sales - Performance Chemicals
|
$
|
229.7
|
|
|
$
|
253.9
|
|
|
$
|
415.1
|
|
|
$
|
460.3
|
|
|
Percentage change vs. prior year
|
||||||||||||||
Performance Chemicals
(In millions, except percentages)
|
Pro Forma Combined Net sales
|
|
Total change
|
|
Currency
effect |
|
Price/Mix
|
|
Volume
|
||||||
Three months ended June 30, 2019
|
$
|
229.7
|
|
|
(10
|
)%
|
|
(1
|
)%
|
|
3
|
%
|
|
(12
|
)%
|
Six months ended June 30, 2019
|
$
|
415.1
|
|
|
(10
|
)%
|
|
(1
|
)%
|
|
3
|
%
|
|
(12
|
)%
|
(1)
|
For the
three and six
months ended
June 30, 2019
, charges relate to the Caprolactone Acquisition and include legal and professional fees of
$0.8 million
and
$10.9 million
, respectively, and purchase price hedge adjustment of
zero
and
$12.7 million
, respectively. Both are included in "Acquisition-related costs" on the condensed statement of operations. Also included above is the inventory step-up amortization of
zero
and
$8.4 million
for the
three and six
months ended
June 30, 2019
, which is included in "Cost of sales" on the condensed consolidated statement of operations. For the
three and six
months ended
June 30, 2018
, charges relate to the Pine Chemical Acquisition and include legal and professional fees of
$0.5 million
and
$4.3 million
, respectively, and inventory step-up amortization of
$0.6 million
and
$1.4 million
, respectively, which are included in "Acquisition-related costs" and "Cost of sales" on the condensed consolidated statement of operations, respectively.
|
|
Six Months Ended June 30,
|
||||||
In millions
|
2019
|
|
2018
|
||||
Net cash provided (used) by operating activities
|
$
|
71.5
|
|
|
$
|
71.1
|
|
Net cash provided (used) by investing activities
|
(599.3
|
)
|
|
(348.1
|
)
|
||
Net cash provided (used) by financing activities
|
504.8
|
|
|
271.9
|
|
In millions
|
June 30, 2019
|
|
December 31, 2018
|
||||
Cash and cash equivalents
|
$
|
53.3
|
|
|
$
|
77.5
|
|
Accounts receivable, net
|
176.6
|
|
|
118.9
|
|
||
Inventories, net
|
221.3
|
|
|
191.4
|
|
||
Prepaid and other current assets
|
40.4
|
|
|
34.9
|
|
||
Total current assets
|
$
|
491.6
|
|
|
$
|
422.7
|
|
In millions
|
June 30, 2019
|
|
December 31, 2018
|
||||
Accounts payable
|
$
|
114.7
|
|
|
$
|
92.9
|
|
Accrued expenses
|
37.6
|
|
|
36.7
|
|
||
Accrued payroll and employee benefits
|
18.7
|
|
|
42.0
|
|
||
Current operating lease liabilities
|
18.0
|
|
|
—
|
|
||
Notes payable and current maturities of long-term debt
|
22.3
|
|
|
11.2
|
|
||
Income taxes payable
|
4.7
|
|
|
0.5
|
|
||
Total current liabilities
|
$
|
216.0
|
|
|
$
|
183.3
|
|
Capital expenditure categories
|
Six Months Ended June 30,
|
||||||
In millions
|
2019
|
|
2018
|
||||
Maintenance
|
$
|
18.4
|
|
|
$
|
15.4
|
|
Safety, health and environment
|
4.9
|
|
|
2.1
|
|
||
Growth and cost improvement
|
34.4
|
|
|
12.9
|
|
||
Total capital expenditures
|
$
|
57.7
|
|
|
$
|
30.4
|
|
|
ISSUER PURCHASES OF SECURITIES
|
||||||||||||||||
|
|
|
|
|
Publicly Announced Program
|
||||||||||||
Period
|
Total Number of Shares Purchased
|
|
Average Price Paid Per Share
|
|
Cumulative Number of Shares Purchased
|
|
Total Dollar Amount Purchased
|
|
Maximum Dollar Value of Shares that May Yet be Purchased
|
||||||||
April 1-30, 2019
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
|
$
|
392,670,401
|
|
May 1-31, 2019
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
392,670,401
|
|
|||
June 1-30, 2019
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
392,670,401
|
|
|||
Total
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
|
$
|
392,670,401
|
|
Exhibit No.
|
Description of Exhibit
|
|
|
Second Amended and Restated Certificate of Incorporation of Ingevity Corporation (incorporated by reference to Exhibit 3.1 to Form 8-K (File No. 001-37586) filed April 25, 2019).
|
|
|
|
Amended and Restated Bylaws of Ingevity Corporation (incorporated by reference to Exhibit 3.2 to Form 8-K (File No. 001-37856) filed April 25, 2019).
|
|
|
|
Rule 13a-14(a)/15d-14(a) Certification of the Company’s Principal Executive Officer.
|
|
|
|
Rule 13a-14(a)/15d-14(a) Certification of the Company’s Principal Financial Officer.
|
|
|
|
Section 1350 Certification of the Company’s Principal Executive Officer. The information contained in this Exhibit shall not be deemed filed with the Securities and Exchange Commission nor incorporated by reference in any registration statement filed by the registrant under the Securities Act of 1933, as amended.
|
|
|
|
Section 1350 Certification of the Company’s Principal Financial Officer. The information contained in this Exhibit shall not be deemed filed with the Securities and Exchange Commission nor incorporated by reference in any registration statement filed by the registrant under the Securities Act of 1933, as amended.
|
|
|
|
101
|
Interactive Data File
|
INGEVITY CORPORATION
|
|
(Registrant)
|
|
|
|
By:
|
/S/ JOHN C. FORTSON
|
|
John C. Fortson
|
|
Executive Vice President, Chief Financial Officer & Treasurer
|
|
(Principal Financial Officer and Duly Authorized Officer)
|
1 Year Ingevity Chart |
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