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Mar 31, 2020
Ingevity Q1 2020 Earnings Report
Ingevity's first quarter net sales increased, with significant growth in net income and adjusted EBITDA.
Key Takeaways
Ingevity reported a strong first quarter with net sales up 4.1% and a significant increase in net income and adjusted EBITDA. The company's performance was driven by growth in Performance Materials, although the coronavirus had some impact. Ingevity is revising fiscal year 2020 guidance due to uncertainties related to COVID-19.
Net sales increased by 4.1% to $288.2 million compared to the prior year quarter.
Net income rose by 99.6% to $45.3 million, with diluted earnings per share at $1.08.
Adjusted EBITDA increased by 10.4% to $92.2 million, with an adjusted EBITDA margin of 32.0%.
Free cash flow was $40.7 million, a significant increase compared to the prior year quarter.
Revenue by Segment
Forward Guidance
Ingevity revised and broadened its fiscal year 2020 guidance to sales between $1.10 billion and $1.20 billion and adjusted EBITDA between $310 million and $350 million. The company expects that second quarter 2020 revenue will be down 25% to 30% versus the prior year’s quarter and adjusted EBITDA will be down 35% to 40% versus the prior year.
Positive Outlook
- Working from a position of financial strength.
- Working to control what we can control in a tumultuous environment.
- Largely reliant either way on conditions in our key end-use applications.
- Prepared and in a solid position to bounce back with auto OEMs.
- Prepared and in a solid position to bounce back with customers in other key industries important to Ingevity.
Challenges Ahead
- Uncertainties related to COVID-19.
- Second quarter 2020 revenue will be down 25% to 30% versus the prior year’s quarter.
- Second quarter 2020 adjusted EBITDA will be down 35% to 40% versus the prior year.
Revenue & Expenses
Visualization of income flow from segment revenue to net income
Historical Earnings Impact
Analyze how earnings announcements historically affect stock price performance
Avg. Return Before/After Earnings
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