Ingevity(NGVT) - 2023 Q4 - Annual Results

Financial Performance - Q4 2023 net sales were $371.7 million, a decrease of 3% year-over-year, with a net loss of $116.8 million including restructuring charges of $107.5 million [3]. - Full year 2023 net sales reached $1.69 billion, up 1% compared to the previous year, with a net loss of $5.4 million and restructuring charges totaling $145.3 million [4]. - Adjusted EBITDA for Q4 was $61.8 million, down 17%, resulting in an adjusted EBITDA margin of 16.6% [3]. - Full year adjusted EBITDA was $396.8 million, a decrease of 12%, with an adjusted EBITDA margin of 23.5% [4]. - Net loss for Q4 2023 was $116.8 million, compared to a net income of $15.6 million in Q4 2022 [24]. - Net income for Q4 2023 was $(116.8) million, compared to a profit of $15.6 million in Q4 2022, resulting in a full-year net loss of $(5.4) million versus a profit of $211.6 million in 2022 [36]. - Adjusted earnings for Q4 2023 were $7.8 million, down from $21.5 million in Q4 2022, with full-year adjusted earnings at $144.7 million compared to $231.4 million in 2022 [51]. - The diluted adjusted earnings per share for Q4 2023 was $0.21, down from $0.57 in Q4 2022, with full-year diluted adjusted earnings per share at $3.94 compared to $6.01 in 2022 [51]. Segment Performance - Performance Materials segment sales increased by 15% in Q4 to $152.8 million, with segment EBITDA of $78.1 million, up 36% [8]. - Advanced Polymer Technologies segment sales fell by 29% in Q4 to $42.4 million, with segment EBITDA down 46% to $7.9 million [10]. - Performance Chemicals segment sales in Q4 were $176.5 million, down 8%, with a negative segment EBITDA of $24.2 million due to high CTO costs [12]. - Performance Materials segment net sales increased to $152.8 million in Q4 2023, up 15.0% from $132.8 million in Q4 2022 [26]. - Performance Chemicals segment net sales decreased to $176.5 million in Q4 2023, down 7.3% from $191.2 million in Q4 2022 [26]. Cash Flow and Debt - Operating cash flow for the full year was $205.1 million, with free cash flow of $95.3 million and share repurchases totaling $92.1 million [14]. - The company reported cash provided by operating activities of $44.6 million in Q4 2023, a decrease from $98.5 million in Q4 2022, with full-year cash flow at $205.1 million compared to $313.4 million in 2022 [36]. - Capital expenditures for Q4 2023 were $(29.2) million, down from $(49.2) million in Q4 2022, with full-year capital expenditures totaling $(109.8) million compared to $(142.5) million in 2022 [36]. - The company experienced a net cash outflow from investing activities of $(21.0) million in Q4 2023, significantly improved from $(407.2) million in Q4 2022, with full-year outflow at $(77.3) million compared to $(551.9) million in 2022 [36]. - Financing activities resulted in a net cash outflow of $(6.5) million in Q4 2023, contrasting with an inflow of $313.0 million in Q4 2022, with full-year financing activities showing an outflow of $(99.9) million compared to an inflow of $48.1 million in 2022 [36]. - The total debt as of December 31, 2023, was $1,472.5 million, with cash and cash equivalents of $96.1 million [74]. - The net debt ratio as of December 31, 2023, was 3.3x, calculated using a net debt of $1,297.1 million and adjusted EBITDA of $396.8 million [74]. Restructuring and Workforce - The company is focusing on repositioning its Performance Chemicals segment and expanding into higher-growth markets like bioplastics [16]. - The Performance Chemicals repositioning initiative is expected to result in the permanent closure of the DeRidder Plant by the end of the first half of 2024, impacting approximately $300 million of net sales [57]. - The global workforce was reduced by almost 20% in 2023, with approximately 30% of the Performance Chemicals segment's workforce affected [59]. - The company reported restructuring and other charges of $140.5 million in Q4 2023, significantly higher than $3.2 million in Q4 2022, with full-year charges at $189.9 million compared to $13.8 million in 2022 [51]. - Restructuring and other income charges for the three months ended December 31, 2023, amounted to $140.5 million, significantly higher than $3.2 million in the same period of 2022 [67]. Guidance and Future Outlook - The company announced 2024 guidance for sales between $1.40 billion and $1.55 billion and adjusted EBITDA between $365 million and $390 million [15]. - The company recorded $22.0 million in losses on CTO resales during the twelve months ended December 31, 2023 [67].