Innospec Inc. (NASDAQ: IOSP)

Innospec Inc. (NASDAQ: IOSP) recently declared its fiscal results for the 3rd-quarter finished September 30, 2k19.  At the similar time, the Company declared that it has declared a semi-annual dividend of $0.520 for each common share for the 2nd-half of 2k19, which will be paid on November 27, 2k19 to shareholders of record as of November 19, 2k19. This brings the annual dividend to $1.020 for each share, a 15.00 percent incline over 2k18.

Total net sales for the 3rd-quarter were $371.90M, up 2.0 percent from the $363.10M stated in the corresponding quarter last year. Net income for the quarter was $30.10M, or $1.220 for each diluted share, contrast to $20.60M, or $0.840 for each diluted share, recorded for the similar duration a year ago. EBITDA for the quarter was $51.10M contrast to $44.70M in the 3rd-quarter a year ago.

Results for this quarter include several special items, which are summarized in the table below. Apart From these special items, adjusted non-GAAP EPS was $1.400 for each diluted share, contrast to $1.200 for each diluted share a year ago. Innospec closed the quarter with net debt of $22.70M, down substantially from $54.80M at the end of the 2nd-quarter. Cash generation in the quarter was excellent, with net cash offered by operating activities of $40.00M before capital expenditures and software capitalization totalling $6.80M.


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November 05, 2k19 16:45 ET | Source: Innospec Inc.

Strong revenue growth in Fuel Specialties and Oilfield Services

Operating income up 14.00 percent; Excellent cash generation reduces net debt to 0.10x EBITDA

GAAP diluted EPS up 45.00 percent; Adjusted non-GAAP EPS up 17.00 percent

Dividend for full year raised by 15.00 percent

ENGLEWOOD, Colo., Nov. 05, 2k19 (GLOBE NEWSWIRE) — Innospec Inc. (NASDAQ: IOSP) recently stated its fiscal results for the 3rd-quarter finished September 30, 2k19.  At the similar time, the Company declared that it has declared a semi-annual dividend of $0.520 for each common share for the 2nd-half of 2k19, which will be paid on November 27, 2k19 to shareholders of record as of November 19, 2k19. This brings the annual dividend to $1.020 for each share, a 15.00 percent incline over 2k18.

Total net sales for the 3rd-quarter were $371.90M, up 2 percent from the $363.10M stated in the corresponding quarter last year. Net income for the quarter was $30.10M, or $1.220 for each diluted share, contrast to $20.60M, or $0.840 for each diluted share, recorded for the similar duration a year ago. EBITDA for the quarter was $51.10M contrast to $44.70M in the 3rd-quarter a year ago.

Results for this quarter include several special items, which are summarized in the table below. Apart From these special items, adjusted non-GAAP EPS was $1.400 for each diluted share, contrast to $1.200 for each diluted share a year ago. Innospec closed the quarter with net debt of $22.70M, down substantially from $54.80M at the end of the 2nd-quarter. Cash generation in the quarter was excellent, with net cash offered by operating activities of $40.00M before capital expenditures and software capitalization totalling $6.80M.

EBITDA, income before income taxes and net income apart from special items, and related per-share amounts, are non-GAAP financial measures that are defined and reconciled with GAAP results herein and in the plans below.

Quarter finished September 30, 2k19 Quarter finished September 30, 2k18
(inMs, except share and for each share data)   Income
before
income
taxes
  Net
income
  Diluted
EPS
Income
before
income
taxes
  Net
income
  Diluted
EPS
             
Stated GAAP amounts $ 37.80 $ 30.10 $ 1.220 $ 30.4 $ 20.6 $ 0.84
Amortization of attained intangible assets 4.60 3.60 0.150 4.7 3.7 0.15
Foreign currency exchange losses 0.50 0.40 0.020 2.5 1.7 0.07
Adjustment of income tax provisions 0.30 0.010 (0.6) (0.02)
Restructuring charge 4.8 3.9 0.16
  5.10 4.30 0.180 12.0 8.7 0.36
             
Adjusted non-GAAP amounts $ 42.90 $ 34.40 $ 1.400 $ 42.4 $ 29.3 $ 1.20

Commenting on the 3rd-quarter results, Patrick S. Williams, President and Chief Executive Officer, said,

“We are reporting some very good results this quarter against a backdrop of negative messages from many in our industry. At times like this, we believe that our balanced portfolio of businesses allows us to take advantage of positive trends in some sectors, while dealing with challenging market conditions. Overall, we have delivered a further 17.00 percent improvement in adjusted non-GAAP EPS.”

“Fuel Specialties had an excellent quarter with further sales in the marine business adding to good growth in our traditional markets. A particularly rich product mix this quarter also delivered margins at the high end of our expected range.”

“The markets served by our Performance Chemicals business saw reduced demand in the face of global trade disputes and government policies.  With these headwinds, our business has performed reasonably well. Although revenues are down this quarter, gross margins continue to improve in line with our objectives.  We have a number of opportunities which make us feel optimistic that we will have a stronger 4th-quarter, but the market conditions for 2k20 remain unpredictable.”

“Oilfield Services once again performed extremely well, improving revenue by 17.00 percent and continuing its recent track record of margin improvement. This performance was impressive, given the volatile state of the underlying market. We believe that customers continue to find that the combination of our excellent technology and service levels brings tangible benefits to their operations.  We have also seen our 1st-sales in our differentiated DRA (drag reduction agents) technology, which is part of our strategy intended to reduce the cyclical nature of this business.”

“Revenues in Octane Additives were as anticipated, with the completion of an order for $6.50M during the quarter. The prognosis for this business remains unchanged.”

Net sales in Fuel Specialties for the quarter were $144.10M, a 7.0 percent incline from $134.90M previous year. Volume growth of 12.00 percent, which benefitted from a stronger aviation contribution, was partly offset by a negative price/mix impact of 3.0 percent and an adverse currency impact of 2.0 percent. Gross margins in the segment were 37.50 percent, towards the higher end of our expected range, moving up by 1.30 percentage points contrast to the similar duration last year. Operating income for the quarter was $31.10M, up 8 percent from last year’s $28.80M.

In Performance Chemicals, net sales of $99.90M were down 13.00 percent on last year, driven by volume reduction of 7.0 percent, a negative price/mix impact of 3 percent and an adverse currency impact of 3.0 percent. The segment’s gross margin improved to 22.60 percent in the quarter, up from 22.00 percent in the similar duration last year. Operating income of $9.30M for the quarter was down 25.00 percent contrast to the $12.40M recorded a year ago.

Sales in Oilfield Services were $121.40M, up 17.00 percent on the $104.20M recorded in the similar duration last year, mainly driven by positive customer activity in the North American markets. Gross margins of 33.90 percent were unchanged from the 2nd-quarter but up from 32.10 percent in the 3rd-quarter of 2k18, mostly as a result of a favourable sales mix. Operating income of $10.00M in the quarter was up 43.00 percent on the $7.00M stated in the similar duration last year.

In Octane Additives, net sales for the quarter were $6.50M, with the current small order being fulfilled as expected. Operating income of $0.80M was down contrast to the $2.70M recorded a year ago.

Corporate costs were $13.00M and within our expected range, up from $12.70M a year ago.  The effective tax rate for the quarter was 20.40 percent contrast to 32.20 percent in 2k18 as a consequence of the geographical location of taxable profits.

Net cash offered by operating activities in the quarter was $40.00M, contrast to $34.80M a year ago. As of September 30, 2k19, Innospec had $110.30M in cash and cash equivalents, and total debt of $133.00M, further strengthening our balance sheet and moving our net debt to about 0.10x EBITDA.