Ingevity(NGVT) - 2025 Q3 - Quarterly Results

Financial Performance - Net sales from continuing operations were $333.1 million, flat compared to the prior year[4] - Total net sales, including discontinued operations, were $362.1 million, down 4% year-over-year[7] - Total adjusted EBITDA increased 14% to $121.2 million, with a margin improvement to 33.5%[7] - Performance Materials sales increased 3% to $155.0 million, driven by volume growth from improved global auto production[9] - Advanced Polymer Technologies sales declined by $10.6 million to $38.2 million due to indirect tariff impacts and weak industrial demand[10] - Performance Chemicals sales from continuing operations were $139.9 million, up nearly 5% due to record pavement sales in North America[11] - Net sales for Q3 2025 were $333.1 million, a slight decrease of 0.2% compared to $333.8 million in Q3 2024[21] - Gross profit increased to $133.9 million in Q3 2025, up 1.7% from $131.6 million in Q3 2024[21] - Net income from continuing operations for Q3 2025 was $40.8 million, down 14.1% from $47.5 million in Q3 2024[21] - Basic earnings per share from continuing operations decreased to $1.12 in Q3 2025, down from $1.31 in Q3 2024[21] - Performance Materials segment net sales were $155.0 million in Q3 2025, an increase of 2.6% from $151.1 million in Q3 2024[23] - Performance Chemicals segment net sales increased to $139.9 million in Q3 2025, up from $133.9 million in Q3 2024, representing a 4.5% growth[23] - Advanced Polymer Technologies segment net sales decreased to $38.2 million in Q3 2025, down 21.4% from $48.8 million in Q3 2024[23] - Total adjusted earnings for Q3 2025 were $56.3 million, up from $40.2 million in Q3 2024, representing an increase of approximately 40.5%[60] - The diluted adjusted earnings per share from continuing operations for Q3 2025 was $1.31, slightly down from $1.33 in Q3 2024[62] - The total diluted adjusted earnings per share for the nine months ended September 30, 2025 was $3.90, compared to $2.56 for the same period in 2024, indicating a significant increase of approximately 52.3%[62] Cash Flow and Debt Management - Operating cash flow was $129.7 million, with strong free cash flow of $117.8 million enabling $25 million in share repurchases[12] - Cash provided by operating activities increased to $129.7 million for the three months ended September 30, 2025, compared to $46.5 million in the same period of 2024, marking an increase of 178.5%[37] - Free cash flow for Q3 2025 was $117.8 million, significantly higher than $28.5 million in Q3 2024, with a total free cash flow of $200.0 million for the nine months ended September 30, 2025, compared to $11.4 million in the same period of 2024[70] - Long-term debt, including finance lease obligations, decreased from $1,339.7 million on December 31, 2024, to $1,158.5 million on September 30, 2025, a reduction of approximately 13.5%[35] - Cash paid for interest decreased to $13.5 million for the three months ended September 30, 2025, down from $18.7 million in the same period of 2024[39] - The net debt ratio as of September 30, 2025, was 2.7x, calculated using total adjusted EBITDA of $403.1 million for the last twelve months[72] Strategic Decisions and Future Outlook - Full-year guidance revised to total net sales between $1.25 billion and $1.35 billion and total adjusted EBITDA between $390 million and $405 million[13] - The company announced the sale of the majority of the Industrial Specialties product line and North Charleston crude tall oil refinery for $110 million, expected to close by early 2026[7] - The company plans to continue focusing on strategic investments to enhance its market position and operational efficiency[41] - The company is expected to continue its strategic investments and market expansion efforts, although specific future guidance was not detailed in the provided content[68] Impairments and Charges - The company reported a significant goodwill impairment charge of $183.8 million for the nine months ended September 30, 2025[37] - The company reported a goodwill impairment charge of $183.8 million for the nine months ended September 30, 2025, compared to $306.6 million for the same period in 2024[60] - Restructuring and other charges for Q3 2025 amounted to $1.0 million, down from $3.3 million in Q3 2024[63] - The company incurred $10.1 million in restructuring and other charges for the nine months ended September 30, 2025, compared to $8.3 million in the same period of 2024[63] Tax and Non-GAAP Adjustments - The tax effect on non-GAAP adjustments for the nine months ended September 30, 2025 was $51.2 million, compared to $74.2 million for the same period in 2024[60] - The company anticipates variability in projected effective tax rates due to discrete tax items and other components impacting financial measures[57] - The company does not provide a reconciliation of net income to Total Adjusted EBITDA for 2025 due to the uncertainty in estimating various components of net income[57]