Ingevity has announced its financial results for Q3 2024, reporting net sales of $376.9 million—a decline of 16% mainly due to the repositioning of its Performance Chemicals segment, which involved scaling back exposure to specific Industrial Specialties markets and weather challenges in the Road Technologies line. Sales growth in Performance Materials and Advanced Polymer Technologies helped partially offset these declines.
The company reported a net loss of $107.2 million and a diluted loss per share of $2.95. This includes $86.9 million in restructuring charges related to the closure of the Crossett, Arkansas facility, as well as $100 million for the termination of a long-term crude tall oil (CTO) contract. Adjusted earnings were $40.2 million, with an adjusted EPS of $1.10. Adjusted EBITDA was $106.4 million, down 3.6%, reflecting an EBITDA margin of 28.2%, impacted by a $3.8 million inventory charge for the Crossett shutdown and CEO severance costs of around $5 million.
Interim CEO Luis Fernandez-Moreno expressed optimism about the company’s direction: “Performance Materials and Advanced Polymer Technologies have demonstrated resilience, while the repositioning of Performance Chemicals is beginning to yield cost efficiencies. I am focused on advancing our strategic goals to drive steady revenue growth and margin improvements.”
Segment Highlights
- Performance Materials reported sales of $151.1 million, a 3% increase due to strategic pricing, with segment EBITDA up 8% to $80.6 million.
- Advanced Polymer Technologies (APT) saw a 14% increase in sales to $48.8 million, though EBITDA decreased by 13% to $9.8 million due to a less favorable product mix and currency impacts.
- Performance Chemicals experienced a 31% drop in sales, with Road Technologies down 8% due to adverse weather and Industrial Specialties down 54%, largely due to repositioning actions aimed at reducing exposure to lower-margin markets. Segment EBITDA dropped by 20% to $19.8 million, although margin improved by 160 basis points due to lower-cost market exits and savings from repositioning.
Liquidity and Guidance
In Q3, operating cash flow was $46.5 million, and free cash flow stood at $28.5 million, factoring in a $50 million CTO contract termination payment and restructuring charges. Net leverage remained stable at 4.0x, with expectations for improvement next quarter. Ingevity reaffirmed its full-year guidance of $1.40-$1.50 billion in sales and $350-$360 million in adjusted EBITDA.
Looking Ahead
With the repositioning of Performance Chemicals beginning to positively impact results, Ingevity’s priorities remain on enhancing operational efficiency and executing its strategic realignment to optimize growth potential and profitability.
Company Information
Ingevity, headquartered in North Charleston, SC, develops and supplies solutions in three main segments—Performance Materials, Advanced Polymer Technologies, and Performance Chemicals. These products serve various applications in adhesives, bioplastics, coatings, lubricants, and automotive components, with a commitment to sustainability and market-driven innovation. Ingevity’s shares trade on the New York Stock Exchange under the ticker NGVT.
