QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) | |
(Address of principal executive offices) |
(Zip Code) |
Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered | ||
☒ | Accelerated filer | ☐ | ||||
Non-accelerated filer |
☐ | Smaller reporting company | ||||
Emerging growth company |
Class |
Outstanding as of October 26, 2021 | |
Common Stock, par value $0.01 |
PART I |
5 |
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Item 1 |
5 |
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5 |
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6 |
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7 |
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8 |
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9 |
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10 |
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12 |
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Item 2 |
26 |
|||||
26 |
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26 |
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35 |
||||||
Item 3 |
37 |
|||||
Item 4 |
38 |
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PART II |
39 |
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Item 1 |
39 |
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Item 1A |
39 |
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Item 2 |
39 |
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Item 3 |
39 |
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Item 4 |
39 |
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Item 5 |
39 |
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Item 6 |
40 |
|||||
41 |
Three Months Ended September 30 |
Nine Months Ended September 30 |
|||||||||||||||
(in millions, except share and per share data) |
2021 |
2020 |
2021 |
2020 |
||||||||||||
Net sales |
$ | $ | $ | $ | ||||||||||||
Cost of goods sold |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Gross profit |
||||||||||||||||
Operating expenses: |
||||||||||||||||
Selling, general and administrative |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Research and development |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Restructuring charge |
( |
) | ||||||||||||||
Impairment of intangible assets |
( |
) | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total operating expenses |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Operating income |
||||||||||||||||
Other income/(expense), net |
( |
) | ||||||||||||||
Interest expense, net |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Income before income tax expense |
||||||||||||||||
Income tax expense |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Net income |
$ | $ | $ | $ | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Earnings per share: |
||||||||||||||||
Basic |
$ | $ | $ | $ | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Diluted |
$ | $ | $ | $ | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Weighted average shares outstanding (in thousands): |
||||||||||||||||
Basic |
||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Diluted |
||||||||||||||||
|
|
|
|
|
|
|
|
Three Months Ended September 30 |
Nine Months Ended September 30 |
|||||||||||||||
(in millions) |
2021 |
2020 |
2021 |
2020 |
||||||||||||
Net income |
$ | $ | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Other comprehensive income/(loss): |
||||||||||||||||
Changes in cumulative translation adjustment, net of tax of $ |
( |
) | ( |
) | ||||||||||||
Amortization of prior service cost/(credit), net of tax of $ |
( |
) | ( |
) | ||||||||||||
Amortization of actuarial net losses, net of tax of $( |
||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total other comprehensive income/(loss) |
( |
) | ( |
) | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total comprehensive income |
$ | $ | ||||||||||||||
|
|
|
|
|
|
|
|
(in millions, except share and per share data) |
September 30, 2021 |
December 31, 2020 |
||||||
Assets |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ | $ | ||||||
Trade and other accounts receivable (less allowances of $ |
||||||||
Inventories (less allowances of $ |
||||||||
Finished goods |
||||||||
Raw materials |
||||||||
|
|
|
|
|||||
Total inventories |
||||||||
Prepaid expenses |
||||||||
Prepaid income taxes |
||||||||
Other current assets |
||||||||
|
|
|
|
|||||
Total current assets |
||||||||
Net property, plant and equipment |
||||||||
Operating lease right-of-use |
||||||||
Goodwill |
||||||||
Other intangible assets |
||||||||
Deferred tax assets |
||||||||
Pension asset |
||||||||
Other non-current assets |
||||||||
|
|
|
|
|||||
Total assets |
$ | $ | ||||||
|
|
|
|
(in millions, except share and per share data) |
September 30, 2021 |
December 31, 2020 |
||||||
Liabilities and Equity |
||||||||
Current liabilities: |
||||||||
Accounts payable |
$ | $ | ||||||
Accrued liabilities |
||||||||
Current portion of finance leases |
||||||||
Current portion of operating lease liabilities |
||||||||
Current portion of plant closure provisions |
||||||||
Current portion of accrued income taxes |
||||||||
|
|
|
|
|||||
Total current liabilities |
||||||||
Finance leases, net of current portion |
||||||||
Operating lease liabilities, net of current portion |
||||||||
Plant closure provisions, net of current portion |
||||||||
Accrued income taxes, net of current portion |
||||||||
Unrecognized tax benefits |
||||||||
Deferred tax liabilities |
||||||||
Pension liabilities and post-employment benefits |
||||||||
Other non-current liabilities |
||||||||
Equity: |
||||||||
Common stock, $ |
||||||||
Additional paid-in capital |
||||||||
Treasury stock ( |
( |
) | ( |
) | ||||
Retained earnings |
||||||||
Accumulated other comprehensive loss |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Total Innospec stockholders’ equity |
||||||||
Non-controlling interest |
||||||||
|
|
|
|
|||||
Total equity |
||||||||
|
|
|
|
|||||
Total liabilities and equity |
$ | $ | ||||||
|
|
|
|
Nine Months Ended September 30 |
||||||||
(in millions) |
2021 |
2020 |
||||||
Cash Flows from Operating Activities |
||||||||
Net income |
$ | $ | ||||||
Adjustments to reconcile net income to net cash provided by operating activities: |
||||||||
Depreciation and amortization |
||||||||
Impairment of intangible assets |
||||||||
Impairment of tangible assets |
||||||||
Deferred taxes |
( |
) | ||||||
Non-cash movements on defined benefit pension plans |
( |
) | ( |
) | ||||
Stock option compensation |
||||||||
Changes in assets and liabilities, net of effects of acquired and divested companies: |
||||||||
Trade and other accounts receivable |
( |
) | ||||||
Inventories |
( |
) | ||||||
Prepaid expenses |
||||||||
Accounts payable and accrued liabilities |
( |
) | ||||||
Plant closure provisions |
( |
) | ||||||
Accrued income taxes |
( |
) | ( |
) | ||||
Unrecognized tax benefits |
( |
) | ||||||
Other assets and liabilities |
||||||||
|
|
|
|
|||||
Net cash provided by operating activities |
||||||||
Cash Flows from Investing Activities |
||||||||
Capital expenditures |
( |
) | ( |
) | ||||
Proceeds on disposal of property, plant and equipment |
||||||||
|
|
|
|
|||||
Net cash used in investing activities |
( |
) | ( |
) | ||||
Cash Flows from Financing Activities |
||||||||
Non-controlling interest |
||||||||
Proceeds from revolving credit facility |
||||||||
Repayments of revolving credit facility |
( |
) | ||||||
Repayments of finance leases |
( |
) | ( |
) | ||||
Refinancing costs |
( |
) | ||||||
Dividend paid |
( |
) | ( |
) | ||||
Issue of treasury stock |
||||||||
Repurchase of common stock |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Net cash used in financing activities |
( |
) | ( |
) | ||||
Effect of foreign currency exchange rate changes on cash |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Net change in cash and cash equivalents |
( |
) | ( |
) | ||||
Cash and cash equivalents at beginning of period |
||||||||
|
|
|
|
|||||
Cash and cash equivalents at end of period |
$ | $ | ||||||
|
|
|
|
(in millions) |
Common Stock |
Additional Paid-In Capital |
Treasury Stock |
Retained Earnings |
Accumulated Other Comprehensive Loss |
Non- Controlling Interest |
Total Equity |
|||||||||||||||||||||
Balance at December 31, 2020 |
$ | $ | $ | ( |
) | $ | $ | ( |
) | $ | $ | |||||||||||||||||
Net income |
||||||||||||||||||||||||||||
Dividend paid ($ |
( |
) | ( |
) | ||||||||||||||||||||||||
Changes in cumulative translation adjustment, net of tax |
( |
) | ( |
) | ||||||||||||||||||||||||
Share of net income |
||||||||||||||||||||||||||||
Treasury stock reissued |
||||||||||||||||||||||||||||
Treasury stock repurchased |
( |
) | ( |
) | ||||||||||||||||||||||||
Stock option compensation |
||||||||||||||||||||||||||||
Amortization of prior service cost, net of tax |
||||||||||||||||||||||||||||
Amortization of actuarial net losses, net of tax |
||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Balance at September 30, 2021 |
$ | $ | $ | ( |
) | $ | $ | ( |
) | $ | $ | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in millions) |
Common Stock |
Additional Paid-In Capital |
Treasury Stock |
Retained Earnings |
Accumulated Other Comprehensive Loss |
Non- Controlling Interest |
Total Equity |
|||||||||||||||||||||
Balance at December 31, 2019 |
$ | $ | $ | ( |
) | $ | $ | ( |
) | $ | $ | |||||||||||||||||
Net income |
||||||||||||||||||||||||||||
Dividend paid ($ |
( |
) | ( |
) | ||||||||||||||||||||||||
Changes in cumulative translation adjustment, net of tax |
||||||||||||||||||||||||||||
Share of net income |
||||||||||||||||||||||||||||
Treasury stock reissued |
( |
) | ||||||||||||||||||||||||||
Treasury stock repurchased |
( |
) | ( |
) | ||||||||||||||||||||||||
Stock option compensation |
||||||||||||||||||||||||||||
Amortization of prior service credit, net of tax |
( |
) | ( |
) | ||||||||||||||||||||||||
Amortization of actuarial net losses, net of tax |
||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Balance at September 30, 2020 |
$ | $ | $ | ( |
) | $ | $ | ( |
) | $ | $ | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in millions) |
Common Stock |
Additional Paid-In Capital |
Treasury Stock |
Retained Earnings |
Accumulated Other Comprehensive Loss |
Non- Controlling Interest |
Total Equity |
|||||||||||||||||||||
Balance at June 30, 2021 |
$ | $ | $ | ( |
) | $ | $ | ( |
) | $ | $ | |||||||||||||||||
Net income |
||||||||||||||||||||||||||||
Changes in cumulative translation adjustment, net of tax |
( |
) | ( |
) | ||||||||||||||||||||||||
Treasury stock reissued |
||||||||||||||||||||||||||||
Stock option compensation |
||||||||||||||||||||||||||||
Amortization of prior service cost, net of tax |
||||||||||||||||||||||||||||
Amortization of actuarial net losses, net of tax |
||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Balance at September 30, 2021 |
$ | $ | $ | ( |
) | $ | $ | ( |
) | $ | $ | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in millions) |
Common Stock |
Additional Paid-In Capital |
Treasury Stock |
Retained Earnings |
Accumulated Other Comprehensive Loss |
Non- Controlling Interest |
Total Equity |
|||||||||||||||||||||
Balance at June 30, 2020 |
$ | $ | $ | ( |
) | $ | $ | ( |
) | $ | $ | |||||||||||||||||
Net income |
||||||||||||||||||||||||||||
Changes in cumulative translation adjustment, net of tax |
||||||||||||||||||||||||||||
Treasury stock reissued |
( |
) | ( |
) | ||||||||||||||||||||||||
Stock option compensation |
||||||||||||||||||||||||||||
Amortization of prior service credit, net of tax |
( |
) | ( |
) | ||||||||||||||||||||||||
Amortization of actuarial net losses, net of tax |
||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Balance at September 30, 2020 |
$ | $ | $ | ( |
) | $ | $ | ( |
) | $ | $ | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30 |
Nine Months Ended September 30 |
|||||||||||||||
(in millions) |
2021 |
2020 |
2021 |
2020 |
||||||||||||
Net Sales: |
||||||||||||||||
Refinery and Performance |
$ | $ | $ | |||||||||||||
Other |
||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Fuel Specialties |
||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Personal Care |
||||||||||||||||
Home Care |
||||||||||||||||
Other |
||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Performance Chemicals |
||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Oilfield Services |
||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
$ | $ | $ | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Gross profit/(loss): |
||||||||||||||||
Fuel Specialties |
$ | $ | $ | |||||||||||||
Performance Chemicals |
||||||||||||||||
Oilfield Services |
||||||||||||||||
Octane Additives |
( |
) | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
$ | $ | $ | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Operating income/(loss): |
||||||||||||||||
Fuel Specialties |
$ | $ | $ | |||||||||||||
Performance Chemicals |
||||||||||||||||
Oilfield Services |
( |
) | ( |
) | ||||||||||||
Octane Additives |
( |
) | ||||||||||||||
Corporate costs |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Restructuring charge |
( |
) | ||||||||||||||
Impairment of intangible assets |
( |
) | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total operating income |
$ | $ | $ | |||||||||||||
|
|
|
|
|
|
|
|
Three Months Ended September 30 |
Nine Months Ended September 30 |
|||||||||||||||
2021 |
2020 |
2021 |
2020 |
|||||||||||||
Numerator (in millions): |
||||||||||||||||
Net income available to common stockholders |
$ | $ | $ | $ | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Denominator (in thousands): |
||||||||||||||||
Weighted average common shares outstanding |
||||||||||||||||
Dilutive effect of stock options and awards |
||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Denominator for diluted earnings per share |
||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net income per share, basic: |
$ | $ | $ | $ | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net income per share, diluted: |
$ | $ | $ | $ | ||||||||||||
|
|
|
|
|
|
|
|
(in millions) |
Gross Cost |
|||
Opening balance at January 1, 2021 |
$ | |||
Exchange effect |
( |
) | ||
|
|
|||
Closing balance at September 30, 2021 |
$ | |||
|
|
(in millions) |
2021 |
|||
Gross cost at January 1 |
$ | |||
Exchange effect |
( |
) | ||
|
|
|||
Gross cost at September 30 |
||||
|
|
|||
Accumulated amortization at January 1 |
( |
) | ||
Amortization expense |
( |
) | ||
Exchange effect |
||||
|
|
|||
Accumulated amortization at September 30 |
( |
) | ||
|
|
|||
Net book amount at September 30 |
$ | |||
|
|
(in millions) |
September 30 2021 |
December 31 2020 |
||||||
Product rights |
$ | $ | ||||||
Brand names |
||||||||
Technology |
||||||||
Customer relationships |
||||||||
Internally developed software |
||||||||
|
|
|
|
|||||
$ | $ | |||||||
|
|
|
|
Three Months Ended September 30 |
Nine Months Ended September 30 |
|||||||||||||||
(in millions) |
2021 |
2020 |
2021 |
2020 |
||||||||||||
Service cost |
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||
Interest cost on projected benefit obligation |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Expected return on plan assets |
||||||||||||||||
Amortization of prior service credit/(cost) |
( |
) | ( |
) | ||||||||||||
Amortization of actuarial net losses |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Net periodic benefit |
$ | $ | $ | $ | ||||||||||||
|
|
|
|
|
|
|
|
(in millions) |
Unrecognized Tax Benefits |
Interest and Penalties |
Total |
|||||||||
Opening balance at January 1, 2021 |
$ | $ | $ | |||||||||
Net change for tax positions of prior periods |
( |
) | ||||||||||
|
|
|
|
|
|
|||||||
Closing balance at September 30 , 2021 |
||||||||||||
Current |
||||||||||||
|
|
|
|
|
|
|||||||
Non-current |
$ | $ | $ | |||||||||
|
|
|
|
|
|
(in millions) |
2021 |
|||
Total at January 1 |
$ | |||
Charge for the period |
||||
Utilized in the period |
( |
) | ||
Exchange effect |
( |
) | ||
|
|
|||
Total at September 30 |
||||
Due within one year |
( |
) | ||
|
|
|||
Due after one year |
$ | |||
|
|
September 30, 2021 |
December 31, 2020 |
|||||||||||||||
(in millions) |
Carrying Amount |
Fair Value |
Carrying Amount |
Fair Value |
||||||||||||
Assets |
||||||||||||||||
Non-derivatives: |
||||||||||||||||
Cash and cash equivalents |
$ | $ | $ | $ | ||||||||||||
Derivatives (Level 1 measurement): |
||||||||||||||||
Other current and non-current assets: |
||||||||||||||||
Foreign currency forward exchange contracts |
||||||||||||||||
Liabilities |
||||||||||||||||
Non-derivatives: |
||||||||||||||||
Finance leases (including current portion) |
||||||||||||||||
Derivatives (Level 1 measurement): |
||||||||||||||||
Other current and non-current liabilities: |
||||||||||||||||
Foreign currency forward exchange contracts |
||||||||||||||||
Non-financial liabilities (Level 3 measurement): |
||||||||||||||||
Other current and non-current liabilities: |
||||||||||||||||
Stock equivalent units |
Number of Options |
Weighted Average Exercise Price |
Weighted Average Grant-Date Fair Value |
||||||||||
Outstanding at December 31, 2020 |
$ | $ | ||||||||||
Granted - at discount |
$ | $ | ||||||||||
- at market value |
$ | $ | ||||||||||
Exercised |
( |
) | $ | $ | ||||||||
Forfeited |
( |
) | $ | $ | ||||||||
Outstanding at September 30, 2021 |
$ | $ | ||||||||||
Number of SEUs |
Weighted Average Exercise Price |
Weighted Average Grant-Date Fair Value |
||||||||||
Outstanding at December 31, 2020 |
$ | $ | ||||||||||
Granted - at discount |
$ | $ | ||||||||||
- at market value |
$ | $ | ||||||||||
Exercised |
( |
) | $ | $ | ||||||||
Forfeited |
( |
) | $ | $ | ||||||||
Outstanding at September 30, 2021 |
$ | $ | ||||||||||
(in millions) Details about AOCL Components |
Amount Reclassified from |
Affected Statement where Net | ||||
Defined benefit pension plan items: |
||||||
Amortization of prior service cost |
$ | See (1) below | ||||
Amortization of actuarial net losses |
See (1) below | |||||
|
|
|||||
Total before tax | ||||||
( |
) | Income tax expense | ||||
|
|
|||||
Total reclassifications |
$ | Net of tax | ||||
|
|
(1) |
These items are included in other income and expense. See Note 6 of the Notes to the Condensed Consolidated Financial Statements for additional information. |
(in millions) |
Defined Benefit Pension Items |
Cumulative Translation Adjustments |
Total |
|||||||||
Balance at December 31, 2020 |
$ | ( |
) | $ | ( |
) | $ | ( |
) | |||
|
|
|
|
|
|
|||||||
Other comprehensive income before reclassifications |
( |
) | ( |
) | ||||||||
Amounts reclassified from AOCL |
||||||||||||
|
|
|
|
|
|
|||||||
Total other comprehensive income |
( |
) | ( |
) | ||||||||
|
|
|
|
|
|
|||||||
Balance at September 30, 2021 |
$ | ( |
) | $ | ( |
) | $ | ( |
) | |||
|
|
|
|
|
|
(in millions) Details about AOCL Components |
Amount Reclassified from AOCL |
Affected LineItem Statement where Net |
||||||
Defined benefit pension plan items: |
|
|||||||
Amortization of prior service credit |
$ | ( |
) | See (1) |
||||
Amortization of actuarial net losses |
See (1) |
|||||||
|
|
|
|
|||||
Total before tax |
||||||||
Income tax expense |
||||||||
|
|
|
|
|||||
Total reclassifications |
$ | Net of tax |
||||||
|
|
|
|
(1) |
These items are included in other income and expense. See Note 6 of the Notes to the Condensed Consolidated Financial Statements for additional information. |
(in millions) |
Defined Benefit Pension Plan Items |
Cumulative Translation Adjustments |
Total |
|||||||||
Balance at December 31, 2019 |
$ | ( |
) | $ | ( |
) | $ | ( |
) | |||
|
|
|
|
|
|
|||||||
Other comprehensive income before reclassifications |
||||||||||||
Amounts reclassified from AOCL |
||||||||||||
|
|
|
|
|
|
|||||||
Total other comprehensive income |
||||||||||||
|
|
|
|
|
|
|||||||
Balance at September 30, 2020 |
$ | ( |
) | $ | ( |
) | $ | ( |
) | |||
|
|
|
|
|
|
Three Months Ended September 30 |
Nine Months Ended September 30 |
|||||||||||||||
(in millions) |
2021 |
2020 |
2021 |
2020 |
||||||||||||
Net sales: |
||||||||||||||||
Fuel Specialties |
$ |
156.4 |
$ |
120.0 |
438.8 |
374.4 |
||||||||||
Performance Chemicals |
132.8 |
102.0 |
386.9 |
310.8 |
||||||||||||
Oilfield Services |
86.9 |
43.1 |
244.5 |
197.1 |
||||||||||||
|
|
|
|
|
|
|
|
|||||||||
$ |
376.1 |
$ |
265.1 |
1,070.2 |
882.3 |
|||||||||||
|
|
|
|
|
|
|
|
|||||||||
Gross profit/(loss): |
||||||||||||||||
Fuel Specialties |
$ |
49.1 |
$ |
40.3 |
144.1 |
116.9 |
||||||||||
Performance Chemicals |
32.6 |
24.0 |
95.6 |
76.5 |
||||||||||||
Oilfield Services |
31.2 |
14.4 |
82.3 |
60.5 |
||||||||||||
Octane Additives |
0.0 |
0.0 |
0.0 |
(2.2 |
) | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
$ |
112.9 |
$ |
78.7 |
322.0 |
251.7 |
|||||||||||
|
|
|
|
|
|
|
|
|||||||||
Operating income/(loss): |
||||||||||||||||
Fuel Specialties |
$ |
26.6 |
$ |
22.2 |
78.9 |
59.0 |
||||||||||
Performance Chemicals |
17.8 |
12.4 |
54.0 |
40.2 |
||||||||||||
Oilfield Services |
2.7 |
(4.5 |
) |
6.1 |
(9.7 |
) | ||||||||||
Octane Additives |
0.0 |
0.0 |
0.0 |
(2.8 |
) | |||||||||||
Corporate costs |
(15.7 |
) |
(13.3 |
) |
(42.4 |
) |
(41.5 |
) | ||||||||
Restructuring Charge |
0.0 |
0.0 |
0.0 |
(21.1 |
) | |||||||||||
Impairment of intangible assets |
0.0 |
0.0 |
0.0 |
(19.8 |
) | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total operating income |
$ |
31.4 |
$ |
16.8 |
96.6 |
4.3 |
||||||||||
|
|
|
|
|
|
|
|
Three Months Ended September 30 |
||||||||||||||||
(in millions, except ratios) |
2021 |
2020 |
Change |
|||||||||||||
Net sales: |
||||||||||||||||
Fuel Specialties |
$ |
156.4 |
$ |
120.0 |
$ |
36.4 |
+30 |
% | ||||||||
Performance Chemicals |
132.8 |
102.0 |
30.8 |
+30 |
% | |||||||||||
Oilfield Services |
86.9 |
43.1 |
43.8 |
+102 |
% | |||||||||||
|
|
|
|
|
|
|||||||||||
$ |
376.1 |
$ |
265.1 |
$ |
111.0 |
+42 |
% | |||||||||
|
|
|
|
|
|
|||||||||||
Gross profit: |
| |||||||||||||||
Fuel Specialties |
$ |
49.1 |
$ |
40.3 |
$ |
8.8 |
+22 |
% | ||||||||
Performance Chemicals |
32.6 |
24.0 |
8.6 |
+36 |
% | |||||||||||
Oilfield Services |
31.2 |
14.4 |
16.8 |
+117 |
% | |||||||||||
|
|
|
|
|
|
|||||||||||
$ |
112.9 |
$ |
78.7 |
$ |
34.2 |
+43 |
% | |||||||||
|
|
|
|
|
|
|||||||||||
Gross margin (%): |
||||||||||||||||
Fuel Specialties |
31.4 |
33.6 |
-2.2 |
|||||||||||||
Performance Chemicals |
24.5 |
23.5 |
+1.0 |
|||||||||||||
Oilfield Services |
35.9 |
33.4 |
+2.5 |
|||||||||||||
Aggregate |
30.0 |
29.7 |
+0.3 |
|||||||||||||
Operating expenses: |
||||||||||||||||
Fuel Specialties |
$ |
(22.5 |
) |
$ |
(18.1 |
) |
$ |
(4.4 |
) |
+24 |
% | |||||
Performance Chemicals |
(14.8 |
) |
(11.6 |
) |
(3.2 |
) |
+28 |
% | ||||||||
Oilfield Services |
(28.5 |
) |
(18.9 |
) |
(9.6 |
) |
+51 |
% | ||||||||
Corporate costs |
(15.7 |
) |
(13.3 |
) |
(2.4 |
) |
+18 |
% | ||||||||
|
|
|
|
|
|
|||||||||||
$ |
(81.5 |
) |
$ |
(61.9 |
) |
$ |
(19.6 |
) |
+32 |
% | ||||||
|
|
|
|
|
|
Three Months Ended September 30, 2021 |
||||||||||||||||||||
Change (%) |
Americas |
EMEA |
ASPAC |
AvGas |
Total |
|||||||||||||||
Volume |
+54 | +4 | +7 | -44 | +17 | |||||||||||||||
Price and product mix |
-5 | +17 | +11 | +52 | +12 | |||||||||||||||
Exchange rates |
0 | +3 | +1 | 0 | +1 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
+49 | +24 | +19 | +8 | +30 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, 2021 |
||||||||||||||||
Change (%) |
Americas |
EMEA |
ASPAC |
Total |
||||||||||||
Volume |
+33 | +3 | -34 | +10 | ||||||||||||
Price and product mix |
+21 | +16 | +37 | +19 | ||||||||||||
Exchange rates |
0 | +2 | +1 | +1 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
+54 | +21 | +4 | +30 | |||||||||||||
|
|
|
|
|
|
|
|
(in millions) |
2021 |
2020 |
Change |
|||||||||
Net pension credit |
$ | 1.3 | $ | 1.4 | (0.1 | ) | ||||||
Foreign exchange gains/(losses) on translation |
(2.2 | ) | 3.5 | (5.7 | ) | |||||||
Foreign currency forward contracts gains/(losses) |
0.7 | (1.1 | ) | 1.8 | ||||||||
|
|
|
|
|
|
|||||||
$ | (0.2 | ) | $ | 3.8 | $ | (4.0 | ) | |||||
|
|
|
|
|
|
Three Months Ended September 30 |
||||||||
(in millions) |
2021 |
2020 |
||||||
Income before income taxes |
$ | 30.8 | $ | 20.2 | ||||
Indemnification asset regarding tax audit |
0.1 | 0.4 | ||||||
Adjustment for stock compensation |
1.6 | 0.0 | ||||||
Legacy costs of closed operations |
1.1 | 1.1 | ||||||
|
|
|
|
|||||
$ | 33.6 | $ | 21.7 | |||||
|
|
|
|
|||||
Income taxes |
$ | 7.4 | $ | 7.5 | ||||
Adjustment of income tax provision |
(0.1 | ) | (0.2 | ) | ||||
Tax on legacy cost of closed operations |
0.2 | 0.2 | ||||||
Tax on foreign exchange on distribution |
0.0 | 0.1 | ||||||
Change in UK statutory tax rate |
0.0 | (2.6 | ) | |||||
|
|
|
|
|||||
Adjusted income taxes |
$ | 7.5 | $ | 5.0 | ||||
|
|
|
|
|||||
GAAP effective tax rate |
24.0 | % | 37.1 | % | ||||
Adjusted effective tax rate |
22.3 | % | 23.0 | % |
Nine Months Ended September 30 |
||||||||||||||||
(in millions, except ratios) |
2021 |
2020 |
Change |
|||||||||||||
Net sales: |
||||||||||||||||
Fuel Specialties |
$ | 438.8 | $ | 374.4 | $ | 64.4 | +17 | % | ||||||||
Performance Chemicals |
386.9 | 310.8 | 76.1 | +24 | % | |||||||||||
Oilfield Services |
244.5 | 197.1 | 47.4 | +24 | % | |||||||||||
|
|
|
|
|
|
|||||||||||
$ | 1,070.2 | $ | 882.3 | $ | 187.9 | +21 | % | |||||||||
|
|
|
|
|
|
|||||||||||
Gross profit: |
||||||||||||||||
Fuel Specialties |
$ | 144.1 | $ | 116.9 | $ | 27.2 | +23 | % | ||||||||
Performance Chemicals |
95.6 | 76.5 | 19.1 | +25 | % | |||||||||||
Oilfield Services |
82.3 | 60.5 | 21.8 | +36 | % | |||||||||||
Octane Additives |
0.0 | (2.2 | ) | 2.2 | +100 | % | ||||||||||
|
|
|
|
|
|
|||||||||||
$ | 322.0 | $ | 251.7 | $ | 70.3 | +28 | % | |||||||||
|
|
|
|
|
|
|||||||||||
Gross margin (%): |
||||||||||||||||
Fuel Specialties |
32.8 | 31.2 | +1.6 | |||||||||||||
Performance Chemicals |
24.7 | 24.6 | +0.1 | |||||||||||||
Oilfield Services |
33.7 | 30.7 | +3.0 | |||||||||||||
Aggregate |
30.1 |
28.5 |
+1.6 |
|||||||||||||
Operating expenses: |
||||||||||||||||
Fuel Specialties |
$ | (65.2 | ) | $ | (57.9 | ) | $ | (7.3 | ) | +13 | % | |||||
Performance Chemicals |
(41.6 | ) | (36.3 | ) | (5.3 | ) | +15 | % | ||||||||
Oilfield Services |
(76.2 | ) | (70.2 | ) | (6.0 | ) | +9 | % | ||||||||
Octane Additives |
0.0 | (0.6 | ) | 0.6 | -100 | % | ||||||||||
Corporate costs |
(42.4 | ) | (41.5 | ) | (0.9 | ) | +2 | % | ||||||||
Restructuring charge |
0.0 | (21.1 | ) | 21.1 | -100 | % | ||||||||||
Impairment of intangible assets |
0.0 | (19.8 | ) | 19.8 | -100 | % | ||||||||||
|
|
|
|
|
|
|||||||||||
$ | (225.4 | ) | $ | (247.4 | ) | $ | 22.0 | -9 | % | |||||||
|
|
|
|
|
|
Nine Months Ended September 30, 2021 |
||||||||||||||||||||
Change (%) |
Americas |
EMEA |
ASPAC |
AvGas |
Total |
|||||||||||||||
Volume |
+25 | +4 | +9 | -40 | +8 | |||||||||||||||
Price and product mix |
-3 | +3 | +2 | +48 | +5 | |||||||||||||||
Exchange rates |
0 | +9 | +2 | 0 | +4 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
+22 | +16 | +13 | +8 | +17 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
Nine Months Ended September 30, 2021 |
||||||||||||||||
Change (%) |
Americas |
EMEA |
ASPAC |
Total |
||||||||||||
Volume |
+35 | +3 | -8 | +12 | ||||||||||||
Price and product mix |
+9 | +7 | +6 | +7 | ||||||||||||
Exchange rates |
0 | +7 | +3 | +5 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
+44 | +17 | +1 | +24 | |||||||||||||
|
|
|
|
|
|
|
|
(in millions) |
2021 |
2020 |
Change |
|||||||||
Net pension credit |
$ | 3.9 | $ | 4.2 | (0.3 | ) | ||||||
Profit on disposal of assets |
0.2 | 0.0 | 0.2 | |||||||||
Foreign exchange gains on translation |
1.2 | 2.9 | (1.7 | ) | ||||||||
Foreign currency forward contracts gains |
0.9 | 0.7 | 0.2 | |||||||||
|
|
|
|
|
|
|||||||
$ | 6.2 | $ | 7.8 | $ | (1.6 | ) | ||||||
|
|
|
|
|
|
Nine Months Ended September 30 |
||||||||
(in millions) |
2021 |
2020 |
||||||
Income before income taxes |
$ | 101.7 | $ | 10.6 | ||||
Indemnification asset regarding tax audit |
0.1 | 0.1 | ||||||
Adjustment for stock compensation |
4.2 | 0.0 | ||||||
Acquisition costs |
0.8 | 0.0 | ||||||
Legacy cost of closed operations |
2.9 | 1.1 | ||||||
Restructuring charge |
0.0 | 21.1 | ||||||
Impairment of acquired intangible assets |
0.0 | 19.8 | ||||||
|
|
|
|
|||||
$ | 109.7 | $ | 52.7 | |||||
|
|
|
|
|||||
Income taxes |
$ | 32.5 | $ | 4.5 | ||||
Tax on stock compensation |
0.3 | 0.5 | ||||||
Adjustment of income tax provision |
(0.4 | ) | 1.0 | |||||
Tax on acquisition costs |
0.2 | 0.0 | ||||||
Tax on legacy cost of closed operations |
0.6 | 0.2 | ||||||
Tax on restructuring charge |
0.0 | 4.3 | ||||||
Tax on impairment of acquired intangible assets |
0.0 | 4.6 | ||||||
Tax on foreign exchange on distribution |
(0.2 | ) | 0.5 | |||||
Change in UK statutory tax rate |
(7.4 | ) | (2.6 | ) | ||||
|
|
|
|
|||||
Adjusted income taxes |
$ | 25.6 | $ | 13.0 | ||||
|
|
|
|
|||||
GAAP effective tax rate |
32.0 | % | 42.5 | % | ||||
Adjusted effective tax rate |
23.3 | % | 24.7 | % |
(in millions) |
September 30, 2021 |
December 31, 2020 |
||||||
Total current assets |
$ | 683.0 | $ | 566.2 | ||||
Total current liabilities |
(308.3 | ) | (252.4 | ) | ||||
|
|
|
|
|||||
Working capital |
374.7 | 313.8 | ||||||
Less cash and cash equivalents |
(89.2 | ) | (105.3 | ) | ||||
Less prepaid income taxes |
(3.8 | ) | (4.2 | ) | ||||
Less other current assets |
(0.8 | ) | (0.4 | ) | ||||
Add back current portion of accrued income taxes |
4.6 | 5.5 | ||||||
Add back current portion of finance leases |
0.0 | 0.5 | ||||||
Add back current portion of plant closure provisions |
5.7 | 6.6 | ||||||
Add back current portion of operating lease liabilities |
13.3 | 11.3 | ||||||
|
|
|
|
|||||
Adjusted working capital |
$ | 304.5 | $ | 227.8 | ||||
|
|
|
|
31.1 | Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
31.2 | Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
32.1 | Certification of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
32.2 | Certification of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
101 | XBRL Instance Document and Related Item - The instance document does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document. | |
104 | Cover Page Interactive Data File – The cover page XBRL tags are embedded within the inline XBRL document. |
INNOSPEC INC. | ||||||
Registrant | ||||||
Date: November 3, 2021 | By | /s/ PATRICK S. WILLIAMS | ||||
Patrick S. Williams | ||||||
President and Chief Executive Officer | ||||||
Date: November 3, 2021 | By | /s/ IAN P. CLEMINSON | ||||
Ian P. Cleminson | ||||||
Executive Vice President and Chief Financial Officer |