10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 _______________________________________

FORM 10-Q

 ___________________________________________

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2019

OR

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the transition period from              to               .

Commission File Number 001-33124

 ___________________________________________

INNOPHOS HOLDINGS, INC.

(Exact Name of Registrant as Specified in its Charter)

 ___________________________________________

 

Delaware			20-1380758
(State or Other Jurisdiction of Incorporation or Organization)			(I.R.S. Employer Identification No.)
259 Prospect Plains Road	Cranbury	New Jersey	08512
(Address of Principal Executive Offices)			(Zip Code)

Registrant’s Telephone Number, Including Area Code: (609) 495-2495

 ____________________________________________

Securities registered pursuant to section 12(b) of the Act:
Title of each class	Trading symbol(s)	Name of exchange on which registered
Common Stock, $0.001 par value	IPHS	Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒    No  ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ☒    No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” "accelerated filer," “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer	☒	Accelerated Filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ 

Page 1 of 43

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐    No  ☒

As of August 2, 2019, the registrant had 19,691,124 shares of common stock outstanding.

Page 2 of 43

TABLE OF CONTENTS

		Page
PART I	Financial Information
Item 1.	Financial Statements	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	28
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	38
Item 4.	Controls and Procedures	40
PART II	Other Information
Item 1.	Legal Proceedings	41
Item 1A.	Risk Factors	41
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	41
Item 3.	Defaults Upon Senior Securities	41
Item 4.	Mine Safety Disclosures	41
Item 5.	Other Information	41
Item 6.	Exhibits	41
Signatures		42

Page 3 of 43

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

Unless the context requires otherwise, references to “Innophos,” “the Company,” “we,” “us” or “our” in this Quarterly Report on Form 10-Q refer to Innophos Holdings, Inc. and its consolidated subsidiaries.

This Quarterly Report on Form 10-Q contains forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995, that involve substantial risks and uncertainties. In some cases, you can identify forward-looking statements by the words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “objective,” “ongoing,” “plan,” “predict,” “project,” “potential,” “should,” “will,” or “would,” and/or the negative of these terms, or other comparable terminology intended to identify statements about the future. These statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from the information expressed or implied by these forward-looking statements.

Although we believe that we have a reasonable basis for each forward-looking statement contained in this Quarterly Report on Form 10-Q, we caution you that these statements are based on a combination of facts and factors currently known by us and our expectations of the future, about which we cannot be certain. The forward-looking statements in this Quarterly Report on Form 10-Q may include, among other things, statements about: (1) global macroeconomic conditions and trends; (2) the behavior of financial markets, including fluctuations in foreign currencies, interest rates and turmoil in capital markets; (3) changes in regulatory controls regarding tariffs, duties, taxes and income tax rates; (4) our ability to implement and refine our Vision 2022 growth plan; (5) our ability to successfully identify and complete acquisitions in line with our Vision 2022 growth plan and effectively operate and integrate acquired businesses to realize the anticipated benefits of those acquisitions; (6) our ability to realize expected cost savings and efficiencies from our performance improvement and other optimization initiatives; (7) our ability to effectively compete in our markets, and to successfully develop new and competitive products that appeal to our customers; (8) changes in consumer preferences and demand for our products or a decline in consumer confidence and spending; (9) our ability to benefit from our investments in assets and human capital and the ability to complete projects successfully and on budget; (10) economic, regulatory and political risks associated with our international operations, most notably Mexico and China; (11) volatility and increases in the price of raw materials, energy and transportation, and fluctuations in the quality and availability of raw materials and process aids; (12) the impact of a disruption in our supply chain or our relationship with our suppliers; (13) our ability to comply with, and the costs associated with compliance with, U.S. and foreign environmental protection laws; (14) our ability to meet quality and regulatory standards in the various jurisdictions in which we have operations or conduct business; and (15) other information that is not historical information.

You should refer to “Part I, Item 1A. Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2018, filed with the Securities and Exchange Commission on February 27, 2019, for a discussion of important factors that may cause our actual results to differ materially from those expressed or implied by our forward-looking statements.  As a result of these factors, we cannot assure you that the forward-looking statements in this Quarterly Report on Form 10-Q will prove to be accurate. You should understand that it is not possible to predict or identify all such factors. Consequently, you should not consider any such list to be a complete discussion of all potential risks or uncertainties that may substantially impact our business. Moreover, we operate in a competitive and rapidly changing environment. New factors emerge from time to time and it is not possible to predict the impact of all of these factors on our business, financial condition or results of operations.

Furthermore, if our forward-looking statements prove to be inaccurate, the inaccuracy may be material. In light of the significant uncertainties in these forward-looking statements, you should not regard these statements as a representation or warranty by us or any other person that we will achieve our objectives and plans in any specified time frame or at all. We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

You should read this Quarterly Report on Form 10-Q and any documents that we reference in this report completely and with the understanding that our actual future results may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements.

Page 4 of 43

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

INNOPHOS HOLDINGS, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets (Unaudited)

(Dollars in thousands, except per share amounts, the number of shares or where otherwise noted)

	June 30, 2019			December 31, 2018
ASSETS
Current assets:
Cash and cash equivalents	$	32,040		$	20,197
Accounts receivable, net of allowance for doubtful accounts ($852 and $688)	98,957			102,564
Inventories	172,455			180,203
Other current assets	37,012			24,094
Total current assets	340,464			327,058
Property, plant and equipment, net	235,349			240,235
Lease right-of-use assets	51,604			—
Goodwill	152,767			152,767
Intangibles and other assets, net	89,971			95,094
Total assets	$	870,155		$	815,154
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable, trade and other	$	51,297		$	80,007
Other current liabilities	67,993			49,993
Total current liabilities	119,290			130,000
Long-term debt	330,000			300,000
Long-term lease liabilities	45,478			—
Other long-term liabilities	36,200			49,639
Total liabilities	$	530,968		$	479,639
Commitments and contingencies (Note 14)
Common stock, par value $.001 per share; authorized 100,000,000; issued 23,042,492 and 22,984,608; outstanding 19,691,124 and 19,613,085 shares	$	20		$	20
Paid-in capital	146,107			142,558
Common stock held in treasury, at cost (3,351,368 and 3,371,523 shares)	(177,097		)	(176,862		)
Retained earnings	375,960			372,815
Accumulated other comprehensive loss	(5,803		)	(3,016		)
Total stockholders' equity	339,187			335,515
Total liabilities and stockholders' equity	$	870,155		$	815,154

See notes to condensed consolidated financial statements

Page 5 of 43

INNOPHOS HOLDINGS, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Comprehensive Income (Unaudited)

(Dollars in thousands, except per share amounts, the number of shares or where otherwise noted)

	Three months ended						Six months ended
	June 30, 2019			June 30, 2018			June 30, 2019			June 30, 2018
Net sales	$	185,038		$	206,725		$	376,452		$	412,165
Cost of goods sold	148,646			170,340			303,648			333,553
Gross profit	36,392			36,385			72,804			78,612
Operating expenses:
Selling, general and administrative	20,261			22,503			39,703			45,023
Research & development expenses	1,232			1,338			2,572			2,749
Total operating expenses	21,493			23,841			42,275			47,772
Operating income	14,899			12,544			30,529			30,840
Interest expense, net	3,887			3,198			7,589			6,102
Foreign exchange (gain) loss	(470		)	1,136			(851		)	940
Other (income), net	(8		)	(13		)	(11		)	(28		)
Income before income taxes	11,490			8,223			23,802			23,826
Provision for income taxes	10,089			1,977			13,707			6,665
Net income	$	1,401		$	6,246		$	10,095		$	17,161
Net income attributable to participating common shareholders	$	1,381		$	6,213		$	10,057		$	17,106
Per share data (Note 3):
Income per participating share:
Basic	$	0.07		$	0.32		$	0.51		$	0.88
Diluted	$	0.07		$	0.31		$	0.51		$	0.87
Weighted average participating shares outstanding:
Basic	19,572,648			19,505,877			19,571,742			19,503,755
Diluted	19,776,845			19,818,883			19,715,907			19,765,971
Other comprehensive income (loss), net of tax:
Change in interest rate swaps, (net of tax of $466, $0, $691, and $0)	$	(1,397	)	$	—		$	(2,073	)	$	—
Change in pension and post-retirement plans, (net of tax of $15, ($30), $32, and $213)	(662		)	94			(714		)	483
Other comprehensive income (loss), net of tax	$	(2,059	)	$	94		$	(2,787	)	$	483
Comprehensive (loss) income	$	(658	)	$	6,340		$	7,308		$	17,644

See notes to condensed consolidated financial statements

Page 6 of 43

INNOPHOS HOLDINGS, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows (Unaudited)

(Dollars in thousands)

	Six months ended
	June 30, 2019			June 30, 2018
Cash flows provided by operating activities
Net income	$	10,095		$	17,161
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	20,646			22,453
Amortization of deferred financing charges	215			215
Deferred income tax provision	208			97
Dutch income tax liability	6,603			—
Share-based compensation	3,567			2,992
Changes in assets and liabilities:
Accounts receivable	3,607			(8,110		)
Inventories	7,748			(13,136		)
Other current assets	(12,918		)	(4,481		)
Accounts payable	(24,129		)	(2,692		)
Other current liabilities	4,226			(718		)
Other long-term assets and liabilities, net	(3,087		)	(4,224		)
Net cash provided by operating activities	16,781			9,557
Cash flows used for investing activities:
Capital expenditures	(15,837		)	(26,475		)
Net cash used for investing activities	(15,837		)	(26,475		)
Cash flows provided by financing activities:
Long-term debt borrowings	37,000			61,000
Long-term debt repayments	(7,000		)	(41,000		)
Restricted stock forfeitures	(235		)	(251		)
Dividends paid	(18,866		)	(18,782		)
Net cash provided by financing activities	10,899			967
Effect of foreign exchange rate changes on cash and cash equivalents	—			(559		)
Net change in cash	11,843			(16,510		)
Cash and cash equivalents at beginning of period	20,197			28,782
Cash and cash equivalents at end of period	$	32,040		$	12,272
Supplemental disclosures of cash flow information:
Non-cash investing and financing activities:
Accrued additions to plant assets	$	4,824		$	12,121

See notes to condensed consolidated financial statements

Page 7 of 43

INNOPHOS HOLDINGS, INC. AND SUBSIDIARIES

Statement of Stockholders’ Equity (Unaudited)

(Dollars and shares in thousands)

	Number of Common Shares	Common Stock		Retained Earnings (Deficit)			Paid-in Capital / Common stock held in treasury			Accumulated Other Comprehensive Income/(Loss)			Total Shareholders' Equity
Balance, December 31, 2017	19,538	$	20	$	374,366		$	(38,629	)	$	(2,198	)	$	333,559
Net income				17,161									17,161
Other comprehensive income, (net of tax $213) (a)										483			483
Effects of U.S. enacted Tax Cuts and Jobs Act (a)				(293		)							(293		)
Effects of adoption of ASU 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory				360									360
Equity-based compensation	68						2,535						2,535
Dividends declared ($0.96 per share) (b)				(18,835		)							(18,835		)
Balance, June 30, 2018	19,606	$	20	$	372,759		$	(36,094	)	$	(1,715	)	$	334,970
Balance, December 31, 2018	19,613	$	20	$	372,815		$	(34,304	)	$	(3,016	)	$	335,515
Net income				10,095									10,095
Other comprehensive loss, (net of tax $723)										(2,787		)	(2,787		)
Effects of adoption of ASC 842 (net of tax $3,966) (c)				11,897									11,897
Equity-based compensation plans	78						3,314						3,314
Dividends declared ($0.96 per share) (d)				(18,847		)							(18,847		)
Balance, June 30, 2019	19,691	$	20	$	375,960		$	(30,990	)	$	(5,803	)	$	339,187

(a) Includes the impact of ASU 2018-02, which transferred those amounts from accumulated other comprehensive income (loss) to retained earnings. See Note 16 to the Condensed Consolidated Financial Statements.

(b) $0.48 per share declared February 2018 and May 2018

(c) On the transition to ASC 842 effective January 1, 2019, a deferred gain (net of taxes) related to a sale leaseback transaction was credited to Retained Earnings. See Note 8 to the Condensed Consolidated Financial Statements.

(d) $0.48 per share declared February 2019 and April 2019

See notes to condensed consolidated financial statements

Page 8 of 43

INNOPHOS HOLDINGS, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

(Dollars in thousands, except per share amounts, the number of shares or where otherwise noted)

1. Basis of Statement Presentation

Summary of Significant Accounting Policies

The accompanying unaudited condensed consolidated financial statements of Innophos have been prepared in accordance with generally accepted accounting principles in the United States of America, or U.S. GAAP, for interim financial reporting and do not include all disclosures required by U.S. GAAP for annual financial reporting, and should be read in conjunction with the audited consolidated and combined financial statements of the Company at December 31, 2018 and for the three years then ended.

The accompanying unaudited condensed consolidated financial statements of the Company reflect all adjustments which management considers necessary for a fair statement of the results of operations for the interim periods and is subject to year-end adjustments. The results of operations for the interim periods are not necessarily indicative of the results for the full year. The December 31, 2018 condensed balance sheet data was derived from audited financial statements, but does not include all disclosures required by U.S. GAAP.

Error Correction 

During the fourth quarter of 2018, the Company identified an error associated with disclosing 2018 accrued capital expenditures and adjusting for them as non-cash investing activities in the Condensed Consolidated Statements of Cash Flows. The Company has evaluated the materiality of the error and concluded it was not material to any of the previously issued consolidated financial statements. However, the Company has elected to revise its consolidated cash flow statement for the period ending June 30, 2018 to correct the error.

The following table presents the effect of the revision on the selected line items previously reported in the consolidated cash flows statement for the six months ended June 30, 2018:

	June 30, 2018						June 30, 2018
Consolidated Statement of Cash Flows	As reported			Adjustment			As revised
Cash flows from operating activities
Changes in assets and liabilities:
Accounts payable	$	(141	)	$	(2,551	)	$	(2,692	)
Net cash provided by (used for) operations	$	12,108		$	(2,551	)	$	9,557
Cash flows used for investing activities
Capital expenditures	$	(29,026	)	$	2,551		$	(26,475	)
Net cash (used for) investing activities	$	(29,026	)	$	2,551		$	(26,475	)
Supplemental disclosures of cash flow information:
Non-cash investing and financing activities
Accrued additions to plant assets				$	12,121		$	12,121

These accompanying notes to the consolidated financial statements reflect the impact of this revision. The revision of the Company’s interim Condensed Consolidated Statements of Cash Flows in the previously issued unaudited condensed consolidated financial statements for the nine months ended September 30, 2018 will be effected in connection with the Company’s filing of its Form 10-Q for the quarter ended September 30, 2019.

During the second quarter of 2019, the Company identified and corrected errors related to the valuation of its inventory located at one of its domestic subsidiaries and the translation of Accumulated other comprehensive income (loss) related to pension and post retirement obligations at a foreign subsidiary. The adjustments decreased Cost of goods sold by $3.1 million and Foreign exchange (gain) loss by $0.7 million resulting in an increase to income before income taxes of approximately $3.8 million in the three month period ended June 30, 2019 and increased the Inventory balance by $3.1 million and decreased Accumulated other comprehensive income before income taxes by $0.7 million as of June 30, 2019.

Page 9 of 43

INNOPHOS HOLDINGS, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

(Dollars in thousands, except per share amounts, share amounts or where otherwise noted)

Approximately $1.2 million of the cumulative adjustment should have been recorded during the first quarter of 2019 and the remaining $2.6 million related to prior periods. Management has concluded that these adjustments are not material to the periods presented or any of its previously issued financial statements, and are not expected to be material to the full year 2019 results.

Recently Issued Accounting Standards

Adopted

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), in order to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet for those leases classified as operating leases under previous GAAP. ASU 2016-02 requires that a lessee should recognize a liability to make lease payments (the lease liability) and a right-of-use asset (ROU asset) representing its right to use the underlying asset for the lease term on the balance sheet. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018 (including interim periods within those periods) using a modified retrospective approach and early adoption is permitted. In July 2018, the FASB issued updated guidance which allows an additional transition method to adopt the new leases standard at the adoption date, as compared to the beginning of the earliest period presented, and recognize a cumulative-effect adjustment to the beginning balance of retained earnings in the period of adoption (the effective date method). The Company adopted this standard as of January 1, 2019, and has elected the effective date method. The Company also elected the package of practical expedients, which among other things, does not require reassessment of prior conclusions to contracts containing a lease, lease classification, and initial direct costs. As an accounting policy election, the Company will exclude short-term leases (term of 12 months or less) from the balance sheet. The Company's lease agreements do not contain any residual value guarantees. Please see Note 8, "Leases", for further disclosures.

In August 2017, the FASB issued ASU No. 2017-12, Derivatives and hedging (Topic 815): Targeted improvements to accounting for hedging activities. This standard more closely aligns the results of cash flow and fair value hedge accounting with risk management activities through changes to both the designation and measurement guidance for qualifying hedging relationships and the presentation of hedge results in the financial statements. This standard also addresses specific limitations in current GAAP by expanding hedge accounting for both nonfinancial and financial risk components and by refining the measurement of hedge results to better reflect an entity’s hedging strategies. Additionally, by aligning the timing of recognition of hedge results with the earnings effect of the hedged item for cash flow and net investment hedges, and by including the earnings effect of the hedging instrument in the same income statement line item in which the earnings effect of the hedged item is presented, the results of an entity’s hedging program and the cost of executing that program will be more visible to users of financial statements. The new standard is effective for annual reporting periods beginning after December 15, 2018 with early adoption permitted. The Company adopted this standard on January 1, 2019, and there was no material impact on its financial position, results of operations and related disclosures.

Issued but not yet adopted

In August 2018, the FASB issued ASU No. 2018-14, Compensation - Retirement Benefits - Defined Benefit Plans - General (Topic 715-20), Disclosure Framework - Changes to the Disclosure Requirements for Defined Benefit Plans. This amendment modifies the disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans by removing and adding certain disclosures for these plans. The eliminated disclosures include the amounts in accumulated other comprehensive income expected to be recognized in net periodic benefit costs over the next fiscal year and the effects of a one-percentage-point change in assumed health care cost trend rates on the net periodic benefit costs and the benefit obligation for postretirement health care benefits. New disclosures include the interest crediting rates for cash balance plans, and an explanation of significant gains and losses related to changes in benefit obligations. The new standard is effective for fiscal years beginning after December 15, 2020, and must be applied retrospectively for all periods presented. Early adoption is permitted. The Company does not anticipate the adoption of this standard will have a material impact on its financial position, results of operations and related disclosures.

2. Revenue Recognition

Revenues are recognized when control of goods is transferred to customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods. Control passes either upon shipment or delivery, depending on the agreed sales terms with customers.

Page 10 of 43

INNOPHOS HOLDINGS, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

(Dollars in thousands, except per share amounts, share amounts or where otherwise noted)

Certain customers may receive cash-based incentives or credits, which are accounted for as variable consideration. The Company estimates these amounts based on the expected amount to be provided to customers and reduce revenues recognized. There were no significant changes to its estimates of variable consideration upon adoption.

The Company reports its business in three operating segments: Food, Health, and Nutrition; Industrial Specialties; and Other. The Company has three principal product lines within these operating segments: (i) Specialty Ingredients; (ii) Core Ingredients; and (iii) Co-Products and Other. Revenue recognition is measured on the same basis across these segments, products, markets, and geographic countries, with the performance obligation being the transfer of control of goods at a single point in time.

	Three Months Ended June 30, 2019
	U.S.		Canada		Mexico		Other Countries		Total
Specialty Ingredients	$	93,335	$	3,899	$	9,034	$	19,700	$	125,968
Core Ingredients	15,982		2,444		23,369		6,656		48,451
Co-Products & Other	5,395		73		4,939		212		10,619
Total	$	114,712	$	6,416	$	37,342	$	26,568	$	185,038

	Three Months Ended June 30, 2018
	U.S.		Canada		Mexico		Other Countries		Total
Specialty Ingredients	$	112,614	$	6,441	$	9,101	$	20,425	$	148,581
Core Ingredients	12,274		2,244		22,339		9,456		46,313
Co-Products & Other	5,488		68		5,849		426		11,831
Total	$	130,376	$	8,753	$	37,289	$	30,307	$	206,725

	Six Months Ended June 30, 2019
	U.S.		Canada		Mexico		Other Countries		Total
Specialty Ingredients	$	193,863	$	9,177	$	17,466	$	39,378	$	259,884
Core Ingredients	31,068		4,695		45,978		11,471		93,212
Co-Products & Other	17,766		219		5,088		283		23,356
Total	$	242,697	$	14,091	$	68,532	$	51,132	$	376,452

	Six Months Ended June 30, 2018
	U.S.		Canada		Mexico		Other Countries		Total
Specialty Ingredients	$	227,398	$	12,279	$	16,718	$	39,829	$	296,224
Core Ingredients	28,689		4,244		39,982		19,214		92,129
Co-Products & Other	14,195		133		9,057		427		23,812
Total	$	270,282	$	16,656	$	65,757	$	59,470	$	412,165

Revenues for the geographic information are attributed to geographic areas based on the destination of the sale.

The Company's payment terms vary by geography and location of its customer and the products offered. Invoices are generated upon shipment of the goods, with the term between invoicing and when payment is due being insignificant.

Page 11 of 43

INNOPHOS HOLDINGS, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

(Dollars in thousands, except per share amounts, share amounts or where otherwise noted)

Food, Health, and Nutrition and Industrial Specialties

The Food, Health and Nutrition reporting segment, as well as the Industrial Specialties reporting segment, consists of products in the Specialty Ingredients and Core Ingredients product lines.

Specialty Ingredients are the most value adding products in our portfolio. Specialty Ingredients consist of specialty phosphate products, specialty phosphoric acids, including polyphosphoric acid, and a range of other mineral, enzyme and botanical based specialty ingredients. The Company's Specialty Ingredients products have a wide range of applications, including:

• flavor enhancers in beverages;

• electrolytes in sports drinks;

• texture modifiers in cheeses;

• leavening agents in baked goods;

• calcium and phosphorus fortification in food and beverages;

• moisture and color retention in seafood, poultry and meat;

• mineral, enzyme and botanical sources for a wide variety of fortified foods, beverages and dietary supplements;

• excipients in vitamins, minerals, nutritional supplements and pharmaceuticals; and

• abrasives in toothpaste.

Each product typically has a number of different applications and end uses. For example, the Company's dicalcium phosphate product can be used as an excipient for pharmaceutical and dietary supplements, a leavening agent in bakery products and as an abrasive in oral care products. The Company often works directly with customers to tailor products to their required specifications for their finished product application.

The Company's Core Ingredients product line includes food grade purified phosphoric acid, or PPA, technical grade PPA, sodium tripolyphosphate, or STPP, and detergent grade PPA. Food grade PPA can be used to produce phosphate salts and has a variety of applications in food and beverages. Technical grade PPA has applications in water treatment. The Company also sells technical grade PPA in the merchant market to third-party phosphate derivative producers. STPP is a key ingredient in cleaning products, including industrial and institutional cleaners and automatic dishwashing detergents and consumer laundry detergents outside the United States. In addition to its use in cleaning products, STPP is also used in water treatment, clay processing, and copper ore processing. The end use market for STPP is largely derived from consumer product applications. Detergent Grade PPA is a lower grade form of PPA used primarily in the production of STPP.

Other

The Other reporting segment consists of products in the Co-Products and Other product line.

The Company's Co-Products and Other product line includes granular triple super phosphate, or GTSP, and merchant green phosphoric acid, or MGA. GTSP is generated at the Company's Coatzacoalcos facility in Mexico as a co-product of its purified wet acid manufacturing process. GTSP is a fertilizer product used throughout Latin America for increasing crop yields in a wide range of agricultural sectors. The Company sells MGA in the merchant market to third party manufacturers of fertilizer products.

Practical Expedients and Exemptions

Management reviewed the practical expedients which a Company may utilize when implementing Topic 606 - Revenue from Contracts with Customers. As such, the Company has applied the practical expedient related to significant financing components and does not disclose the value of unsatisfied performance obligations for contracts with an original expected length of one year or less.

3. Earnings per Share (EPS)

The Company accounts for earnings per share in accordance with ASC 260 and related guidance, which requires two calculations of earnings per share (EPS) to be disclosed: basic EPS and diluted EPS. Under ASC Subtopic 260-10-45, as of January 1, 2009 unvested awards of share-based payments with rights to receive dividends or dividend equivalents, such as restricted stock, are considered participating securities for purposes of calculating EPS. Under the two-class method, a portion

Page 12 of 43

INNOPHOS HOLDINGS, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

(Dollars in thousands, except per share amounts, share amounts or where otherwise noted)

of net income is allocated to these participating securities and therefore is excluded from the calculation of EPS allocated to common stock, as shown in the table below.

The numerator for basic and diluted earnings per share is net earnings attributable to shareholders reduced by dividends attributable to unvested shares. The denominator for basic earnings per share is the weighted average number of common stock outstanding during the period. The denominator for diluted earnings per share is weighted average shares outstanding adjusted for the effect of dilutive outstanding stock options, performance share awards and restricted stock awards.

The following is a reconciliation of the weighted average basic number of common shares outstanding to the diluted number of common and common stock equivalent shares outstanding and the calculation of earnings per share using the two-class method:

	Three Months Ended						Six Months Ended
	June 30, 2019			June 30, 2018			June 30, 2019			June 30, 2018
Net income	$	1,401		$	6,246		$	10,095		$	17,161
Less: earnings attributable to unvested shares	(20		)	(33		)	(38		)	(55		)
Net income available to participating common shareholders	$	1,381		$	6,213		$	10,057		$	17,106
Weighted average number of participating common and potential common shares outstanding:
Basic number of participating common shares outstanding	19,572,648			19,505,877			19,571,742			19,503,755
Dilutive effect of stock equivalents	204,197			313,006			144,165			262,216
Diluted number of weighted average participating common shares outstanding	19,776,845			19,818,883			19,715,907			19,765,971
Earnings per participating common share:
Earnings per participating common share—Basic	$	0.07		$	0.32		$	0.51		$	0.88
Earnings per participating common share—Diluted	$	0.07		$	0.31		$	0.51		$	0.87
Total outstanding options, performance share awards and unvested restricted stock not included in the calculation of diluted earnings per share as the effect would be anti-dilutive	867,092			468,773			924,886			519,563

Page 13 of 43

INNOPHOS HOLDINGS, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

(Dollars in thousands, except per share amounts, share amounts or where otherwise noted)

4. Stockholders’ Equity / Share-Based Compensation

The following table summarizes the components of share-based compensation expense, all of which has been classified as selling, general and administrative expense:

	Three Months Ended				Six Months Ended
	June 30, 2019		June 30, 2018		June 30, 2019		June 30, 2018
Stock options	$	485	$	538	$	802	$	884
Restricted stock	745		755		1,272		1,280
Performance shares	850		122		793		249
Stock grants	700		579		700		579
Total share-based compensation expense	$	2,780	$	1,994	$	3,567	$	2,992

5. Inventories

Inventories consist of the following:

	June 30, 2019		December 31, 2018
Raw materials	$	43,018	$	46,147
Finished products (a)	114,293		119,407
Spare parts	15,144		14,649
	$	172,455	$	180,203

(a) The balance as of June 30, 2019 includes a $3.1 million increase related to a cumulative adjustment of capitalized variances.

Inventory reserves for excess quantities, obsolescence or shelf-life expiration as of June 30, 2019 and December 31, 2018 were $16,490 and $14,327, respectively.

Page 14 of 43

INNOPHOS HOLDINGS, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

(Dollars in thousands, except per share amounts, share amounts or where otherwise noted)

6. Other Current Assets

Other current assets consist of the following:

	June 30, 2019		December 31, 2018
Creditable taxes (value added taxes)	$	14,405	$	11,944
Vendor inventory deposits (prepaid)	3,108		454
Prepaid income taxes	16,461		6,658
Prepaid insurance	797		2,605
Other	2,241		2,433
	$	37,012	$	24,094

7. Goodwill

The following table provides a reconciliation of the carrying amount of goodwill at the beginning and end of the reporting period (in thousands):

	Food, Health and Nutrition		Industrial Specialties		Other		Total
Balance: January 1, 2019	$	129,484	$	23,283	$	—	$	152,767
Balance: June 30, 2019	$	129,484	$	23,283	$	—	$	152,767

8. Leases

The Company determines if an arrangement is a lease at inception. Lease Right of Use, or ROU, assets and noncurrent lease liabilities are presented as distinct accounts in the Condensed Consolidated Balance Sheet. Current lease liabilities are included within Other current liabilities in the Condensed Consolidated Balance Sheet. The Company does not have any Finance leases. ROU assets represent the right to use an underlying asset for the lease term and lease liabilities represent the obligation to make lease payments arising from the lease. ROU assets and liabilities are recognized at the lease commencement date based on the estimated present value of lease payments over the lease term. The Company uses its estimated incremental borrowing rate, which is derived from information available at the lease commencement date, in determining the present value of lease payments, as the implicit rate is not readily determinable. The Company gives consideration to publicly available data for instruments with similar characteristics when calculating its incremental borrowing rates. The lease term includes options to extend the lease when it is reasonably certain that the Company will exercise that option. Leases with a term of 12 months or less are not recorded on the balance sheet. Certain leases include one or more options to renew, with renewal terms that can extend the lease up to five years and certain leases also include options to purchase the leased property. We include options that we are reasonably certain to exercise in our evaluation of the lease term after considering all relevant economic and financial factors. We have lease agreements with lease and non-lease components, which are generally accounted for as a single lease component.

The Company primarily leases rail cars, inventory tanks, buildings, equipment, and fleet cars. The Company recorded ROU assets of $48.8 million and lease liabilities of $48.9 million, respectively at January 1, 2019. The impact to the Company's Condensed Consolidated Statement of Comprehensive Income and Condensed Consolidated Statement of Cash Flows was not material. As of June 30, 2019, the Company had 43 leases, with remaining terms ranging from less than one year to 20 years.

Under one of its warehousing agreements with third-party service providers, the Company controls the amount, timing, placing, and removing of items for the entire capacity of the warehouse. Therefore the Company controls the asset, and

Page 15 of 43

INNOPHOS HOLDINGS, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

(Dollars in thousands, except per share amounts, share amounts or where otherwise noted)

the warehouse is deemed to be leased for accounting purposes. For this warehousing agreement, the Company accounts for the lease and non-lease components separately. The lease component consists of the warehouse and the non-lease components consist of services, such as loading, unloading, and maintenance. The Company allocates the consideration in the warehousing agreement to the lease and non-lease components using their relative standalone prices.

In December 2018, the Company sold its Chicago Heights, IL warehouse for $23.0 million. Under the agreement, the Company is leasing back the property from the purchaser over a period of 20 years. The Company is accounting for the leaseback as an operating lease. The annual rent for the initial period of five years is approximately $1.5 million plus taxes and subsequently will increase 10% every five years through the end of the lease. Prior to the adoption of the new lease standard, gains on sale-leaseback transactions were deferred and recognized in the statement of comprehensive income over the lease term. Under the new lease standard, gains on sale-leaseback transactions (subject to adjustment for off-market terms) are recognized immediately. Therefore, the sale-leaseback gain of $11.9 million (net of tax of $4.0 million) was deferred as of December 31, 2018 and on the transition to ASC 842 effective January 1, 2019, was reclassed to retained earnings.

The components of lease expense were as follows:

	Three months ended		Six months ended
	June 30, 2019		June 30, 2019
Operating lease expense:
Cost of goods sold	$	1,556	$	2,992
Selling, general and administrative	941		1,808
Total lease expense	$	2,497	$	4,800

Supplemental balance sheet information related to the leases were as follows:

	June 30, 2019
Operating lease ROU assets	$	51,604
Current operating lease liabilities	$	6,328
Noncurrent operating lease liabilities	45,478
Total operating lease liabilities	$	51,806

Supplemental cash flow and other information related to the leases were as follows:

	Six months ended
	June 30, 2019
Cash paid for amounts included in the measurement of operating lease liabilities	$	4,694
ROU assets obtained in exchange for new operating lease liabilities	$	6,230

	June 30, 2019
Weighted average remaining lease term of operating leases (in years)	11
Weighted average discount rate of operating leases	5.35	%

Page 16 of 43

INNOPHOS HOLDINGS, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

(Dollars in thousands, except per share amounts, share amounts or where otherwise noted)

Maturities of lease liabilities were as follows:

	June 30, 2019
2019	$	4,742
2020	8,140
2021	7,320
2022	6,793
2023	6,175
2024 and thereafter	38,195
Total lease payments	$	71,365
Less: imputed interest	19,559
Total lease obligations	$	51,806
Less: current obligations	6,328
Long-term lease obligations	$	45,478

As required by ASC 842, the future minimum operating lease payments on non-cancelable leases as of December 31, 2018 under the accounting standards in effect as of that period were as follows:

	December 31, 2018
2019	$	8,259
2020	7,130
2021	6,490
2022	6,032
2023	5,467
2024 and thereafter	33,957
Long-term lease obligations	$	67,335

In July 2019, the Company executed an agreement to exercise its option to renew the lease on its Cranbury, NJ headquarters for a period of five years beginning January 1, 2020. The Company will account for this lease modification as a change in lease term. The Company will remeasure the lease obligation and related ROU asset in July 2019, which will result in an increase in each account of approximately $5.9 million.

Page 17 of 43

INNOPHOS HOLDINGS, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

(Dollars in thousands, except per share amounts, share amounts or where otherwise noted)

9. Intangibles and Other Assets, net

Intangibles and other assets consist of the following:

	Useful life (years)	June 30, 2019		December 31, 2018
Developed technology and application patents, net of accumulated amortization of $35,991 for 2019 and $34,669 for 2018	7-20	$	10,284	$	11,606
Customer relationships, net of accumulated amortization of $30,916 for 2019 and $28,032 for 2018	5-20	64,597		67,479
Trade names and license agreements, net of accumulated amortization of $15,870 for 2019 and $14,599 for 2018	5-20	11,691		12,962
Non-compete agreements, net of accumulated amortization of $1,332 for 2019 and $1,319 for 2018	3-10	1		14
Total intangibles, net		$	86,573	$	92,061
Deferred financing costs, net of accumulated amortization of $4,546 for 2019 and $4,331 for 2018 (see Note 11)		$	1,076	$	1,291
Other assets		2,322		1,742
Total other assets, net		$	3,398	$	3,033
		$	89,971	$	95,094

Page 18 of 43

INNOPHOS HOLDINGS, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

(Dollars in thousands, except per share amounts, share amounts or where otherwise noted)

10. Other Current Liabilities

Other current liabilities consist of the following:

	June 30, 2019		December 31, 2018
Payroll related	$	14,342	$	15,656
Operating lease liabilities	6,328		—
Taxes other than income taxes	1,841		3,071
Benefits and pensions	5,257		5,680
Freight and rebates	3,759		6,431
Income taxes	15,516		1,355
Restructuring reserve	—		217
Deferred gain on sale leaseback transaction (a)	—		790
Deferred contract termination (b)	9,623		9,489
Other	11,327		7,304
	$	67,993	$	49,993

(a) See Note 8 to the Consolidated Financial Statements for further details.

(b) See Note 18 to the Consolidated Financial Statements for further details.

11. Short-Term Borrowings, Long-Term Debt, and Interest Expense

Short-term borrowings and long-term debt consist of the following:

 

	June 30, 2019		December 31, 2018
Revolver borrowings under the credit facility due 2021	$	330,000	$	300,000
Long-term debt	$	330,000	$	300,000

The Company's credit facility includes a revolving line of credit from the lenders of up to $450.0 million, including a $20.0 million letter of credit sub-facility and a $20.0 million swingline loan facility, all maturing on December 22, 2021. The credit agreement governing this facility also provides for possible additional revolving indebtedness under an incremental facility of up to $150.0 million (for an aggregate of revolving capacity up to $600.0 million) upon future request by the Company to existing lenders (and depending on their consent) or from other willing financial institutions invited by the Company and reasonably acceptable to the administrative agent to join in the credit agreement. This revolving credit facility increase, if implemented, may provide for higher applicable margins to either the increased portion or possibly the entire revolving credit facility, with limitations, than those in effect for the original revolving commitments under the credit agreement.

As of June 30, 2019, $330.0 million was outstanding under the revolving line of credit, which approximates fair value (determined using level 2 inputs within the fair value hierarchy) with total availability at $119.5 million, taking into account $0.5 million in face amount of letters of credit issued under the sub-facility. The current weighted average interest rate for all debt is 4.6%.

Among its affirmative covenants, the credit agreement governing this credit facility requires the Company to maintain the following consolidated ratios (as defined and calculated according to the credit agreement) as of the end of each fiscal quarter:

(a) “Total Leverage Ratio” less than or equal to 3.50 to 1.00.

(b) “Interest Coverage Ratio” greater than or equal to 3.00 to 1.00.

As of June 30, 2019, the Company was in full compliance with all debt covenant requirements.

Page 19 of 43

INNOPHOS HOLDINGS, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

(Dollars in thousands, except per share amounts, share amounts or where otherwise noted)

Based on $180.0 million outstanding borrowings as floating rate debt, an immediate increase of one percentage point would cause an increase to interest expense of approximately $1.8 million per year.

Total interest paid by the Company for all indebtedness for the six months ended June 30, 2019 and June 30, 2018 was $7.6 million and $6.8 million, respectively.

Interest expense, net consists of the following:

	Three months ended						Six months ended
	June 30, 2019			June 30, 2018			June 30, 2019			June 30, 2018
Interest expense	$	3,924		$	3,482		$	7,624		$	6,578
Deferred financing cost	108			107			215			215
Interest income	(36		)	(12		)	(63		)	(32		)
Less: amount capitalized for capital projects	(109		)	(379		)	(187		)	(659		)
Total interest expense, net	$	3,887		$	3,198		$	7,589		$	6,102

In December 2018, the Company entered into an interest rate swap, swapping the LIBOR exposure of $150.0 million of floating rate debt, which is currently outstanding under our Credit Agreement, to a fixed rate to maturity obligation of 2.677% expiring in November 2021.

The Company manages interest rate risk by balancing the amount of fixed-rate and floating-rate debt to the extent practicable consistent with the credit status.

The table below presents the fair value of the Company's derivative financial instruments as well as their classification in the Consolidated Balance Sheets as of June 30, 2019 and December 31, 2018.

Tabular Disclosure of Fair Values of Derivative Instruments
		Fair value as of
Derivatives designated as hedging instruments	Balance Sheet Location	June 30, 2019		December 31, 2018
Interest Rate Contract	Other Long-Term Liabilities	$	3,787	$	1,023
		$	3,787	$	1,023

The table below presents the effect of the Company’s derivative financial instruments in the Consolidated Statements of Operations and AOCI for the three and six months ended June 30, 2019 and June 30, 2018.

Tabular Disclosure of the Effect of Derivative Instruments
Derivatives in Cash Flow Hedging Relationships	Amount of Gain/(Loss) Recognized in AOCI on Derivative			Location of Gain/(Loss) Reclassified from AOCI into Income	Amount of Gain/(Loss) Reclassified from AOCI into Income
Interest Rate Contract	$	(1,862	)	Interest Income/(Expense)	$	(77	)
Three months ended June 30, 2019	$	(1,862	)		$	(77	)
Interest Rate Contract	$	(2,763	)	Interest Income/(Expense)	$	(140	)
Six months ended June 30, 2019	$	(2,763	)		$	(140	)
Interest Rate Contract	$	—		Interest Income/(Expense)	$	—
Three months ended June 30, 2018	$	—			$	—
Interest Rate Contract	$	—		Interest Income/(Expense)	$	—
Six months ended June 30, 2018	$	—			$	—

Page 20 of 43

INNOPHOS HOLDINGS, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

(Dollars in thousands, except per share amounts, share amounts or where otherwise noted)

12. Other Long-Term Liabilities

Other long-term liabilities consist of the following:

	June 30, 2019		December 31, 2018
Deferred income taxes	$	8,570	$	5,113
Pension and post retirement liabilities	9,632		9,238
Uncertain tax positions	320		320
Environmental liabilities	1,100		1,100
Deferred gain on sale leaseback transaction (a)	—		15,073
Deferred contract termination fee (b)	10,425		15,371
Interest rate hedge	3,787		1,023
Other liabilities	2,366		2,401
	$	36,200	$	49,639

(a) See Note 8 to the Consolidated Financial Statements for further details.

(b) See Note 18 to the Consolidated Financial Statements for further details.

13. Income Taxes

The effective income tax rate on income before taxes was approximately 58% for the six months ended June 30, 2019 compared to approximately 28% for the comparable period in 2018. The change in the effective tax rate is primarily due to the Dutch tax matter described below.

In the second quarter of 2019, the Company incurred a Dutch income tax liability of $6.6 million which was recorded in current liabilities. See Note 14 for further information.

Business is conducted in various countries throughout the world and is subject to tax in numerous jurisdictions. A significant number of tax returns are filed and subject to examination by various federal, state and local tax authorities. Tax examinations are often complex, as tax authorities may disagree with the treatment of items reported requiring several years to resolve. As such, the Company maintains liabilities for possible assessments by tax authorities resulting from known tax exposures for uncertain income tax positions. The Company’s policy is to accrue associated penalties in selling, general and administrative expenses and to accrue interest in net interest expense. Currently, the Company is under examination, or has been contacted for examination on income tax returns, for the years 2014 through 2017. During the quarter ended June 30, 2019, the Company's liability for unrecognized tax benefits was unchanged. The Company estimates the liability for unrecognized tax benefits will not change during the next twelve months. Other than the items mentioned above, as of June 30, 2019, no material adjustments have been proposed to the Company's tax positions and the Company currently does not anticipate any adjustments that would result in a material change to its financial position during the next twelve months.

Income taxes paid were $9.0 million and $12.8 million for the six months ended June 30, 2019 and June 30, 2018, respectively.

14. Commitments and Contingencies

Environmental

The Company's operations are subject to extensive and changing federal, state, local and international environmental laws, rules and regulations. The Company's manufacturing sites have an extended history of industrial use, and soil and groundwater contamination have or may have occurred in the past and might occur or be discovered in the future.

Page 21 of 43

INNOPHOS HOLDINGS, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

(Dollars in thousands, except per share amounts, share amounts or where otherwise noted)

Environmental efforts are difficult to assess for numerous reasons, including the discovery of new remedial sites, discovery of new information and scarcity of reliable information pertaining to certain sites, improvements in technology, changes in environmental laws and regulations, numerous possible remedial techniques and solutions, difficulty in assessing the involvement of and the financial capability of other potentially responsible parties and the extended time periods over which remediation occurs. Other than the items listed below, the Company is not aware of material environmental liabilities which are probable and estimable. As the Company's environmental contingencies are more clearly determined, it is reasonably possible that amounts may need to be accrued. However, management does not believe, based on current information, that environmental remediation requirements will have a material impact on the Company's results of operations, financial position or cash flows.

Future environmental spending is probable at the Company's site in Nashville, Tennessee, the eastern portion of which had been used historically as a landfill, and a western parcel therein, previously acquired from a third party, which reportedly had housed, but no longer does, a fertilizer and pesticide manufacturing facility. The Company has an estimated liability with a range of $0.9 million-$1.3 million. The remedial action plan for that site has yet to be finalized, and as such, the Company has recorded a liability, which represents the Company's best estimate, of $1.1 million as of June 30, 2019.

Litigation

In 2018, following a review of its global corporate and financing structure, Innophos’ management initiated a global entity simplification plan which included a strategy to merge two of the Company’s Dutch subsidiaries by the end of 2018. The contemplated merger was not completed in 2018 due to an administrative error committed and acknowledged by the Company’s Dutch legal counsel, Heussen B.V ("Heussen"). Such merger was ultimately completed in 2019. On May 17, 2019, changes to Dutch tax law were enacted and as expected, with retroactive effect to January 1, 2018. As a result of these changes in Dutch tax law and the merger of the two Dutch subsidiaries not completed in 2018, the Company incurred in its second quarter 2019 results a Dutch corporate income tax liability of $6.6 million for its 2018 tax year. On July 23, 2019, the Company initiated a malpractice legal proceeding in the Netherlands against Heussen seeking reimbursement for all costs and liabilities resulting from their administrative error, including all related tax liabilities and other associated expenses and damages. Any recovery by the Company in respect of that proceeding will be recorded gross in the period it is received.

In addition, the Company is a party to legal proceedings and contractual disputes that arise in the ordinary course of its business. Except as to the matters specifically discussed, management believes the likelihood that the ultimate disposition of these matters will have a material adverse effect on the Company's business, results of operations, financial condition and/or cash flows is remote. However, these matters cannot be predicted with certainty and an unfavorable resolution of one or more of them could have a material adverse effect on the Company's business, results of operations, financial condition, and/or cash flows.

Page 22 of 43

INNOPHOS HOLDINGS, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

(Dollars in thousands, except per share amounts, share amounts or where otherwise noted)

15. Pension Plans and Postretirement Benefits

Net periodic benefit expense for the United States plans:

	Three months ended June 30, 2019									Three months ended June 30, 2018
	Pension benefits			Other benefits			Total			Pension benefits			Other benefits			Total
Service cost	$	—		$	36		$	36		$	—		$	37		$	37
Interest cost	26			34			60			23			29			52
Expected return on assets	(39		)	—			(39		)	(37		)	—			(37		)
Amortization of
prior service cost	—			—			—			—			—			—
unrecognized (gain) loss	—			(39		)	(39		)	—			(40		)	(40		)
net transition obligation	—			—			—			—			—			—
Net periodic (benefit) cost	$	(13	)	$	31		$	18		$	(14	)	$	26		$	12
	Six Months Ended June 30, 2019									Six Months Ended June 30, 2018
	Pension benefits			Other benefits			Total			Pension benefits			Other benefits			Total
Service cost	$	—		$	72		$	72		$	—		$	73		$	73
Interest cost	51			68			119			47			58			105
Expected return on assets	(79		)	—			(79		)	(75		)	—			(75		)
Amortization of
prior service cost	—			—			—			—			—			—
unrecognized (gain) loss	—			(78		)	(78		)	—			(80		)	(80		)
net transition obligation	—			—			—			—			—			—
Net periodic cost	$	(28	)	$	62		$	34		$	(28	)	$	51		$	23

Innophos has no minimum contribution requirements and does not plan to make cash contributions for its U.S. defined benefit pension plan in 2019.

Innophos had no minimum contribution requirements and did not make cash contributions for its U.S. defined benefit pension plan in 2018.

Page 23 of 43

INNOPHOS HOLDINGS, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

(Dollars in thousands, except per share amounts, share amounts or where otherwise noted)

Net periodic benefit expense for the Canadian plans:

	Three months ended June 30, 2019								Three months ended June 30, 2018
	Pension benefits			Other benefits		Total			Pension benefits			Other benefits			Total
Service cost	$	97		$	15	$	112		$	109		$	16		$	125
Interest cost	137			15		152			129			14			143
Expected return on assets	(205		)	—		(205		)	(198		)	—			(198		)
Amortization of
actuarial loss (gain)	52			—		52			47			1			48
prior service cost	13			—		13			13			—			13
net transition obligation	—			3		3			—			6			6
Exchange rate changes	(79		)	29		(50		)	100			(34		)	66
Net periodic cost (benefit)	$	15		$	62	$	77		$	200		$	3		$	203
	Six Months Ended June 30, 2019								Six Months Ended June 30, 2018
	Pension benefits			Other benefits		Total			Pension benefits			Other benefits			Total
Service cost	$	190		$	30	$	220		$	222		$	32		$	254
Interest cost	268			30		298			261			29			290
Expected return on assets	(403		)	—		(403		)	(403		)	—			(403		)
Amortization of
actuarial loss (gain)	102			—		102			95			2			97
prior service cost	25			—		25			26			—			26
net transition obligation	—			6		6			—			12			12
Exchange rate changes	(167		)	59		(108		)	218			(73		)	145
Net periodic cost	$	15		$	125	$	140		$	419		$	2		$	421

Innophos Canada, Inc. plans to make cash contributions to its Canadian defined benefit plan of approximately $0.3 million in 2019.

Innophos Canada, Inc. made cash contributions to its Canadian defined benefit plan of approximately $0.7 million in 2018.

Page 24 of 43

INNOPHOS HOLDINGS, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

(Dollars in thousands, except per share amounts, share amounts or where otherwise noted)

16. Accumulated Other Comprehensive Income (Loss)

Changes in accumulated other comprehensive income (loss) by component:

Three months ended June 30, 2019	Pension and Other Postretirement Adjustments			Changes in Fair Value of Effective Cash Flow Hedges			Total
Balance at March 31, 2019	$	(2,301	)	$	(1,443	)	$	(3,744	)
Other comprehensive (loss) before reclassifications	—			(1,455		)	(1,455		)
Amounts reclassified from accumulated other comprehensive income	(662		)	58			(604		)
Net current period other comprehensive (loss)	(662		)	(1,397		)	(2,059		)
Balance at June 30, 2019	$	(2,963	)	$	(2,840	)	$	(5,803	)
Three months ended June 30, 2018	Pension and Other Postretirement Adjustments			Changes in Fair Value of Effective Cash Flow Hedges			Total
Balance at March 31, 2018	$	(1,809	)	$	—		$	(1,809	)
Other comprehensive income before reclassifications	94			—			94
Amounts reclassified from accumulated other comprehensive income	—			—			—
Net current period other comprehensive income	94			—			94
Balance at June 30, 2018	$	(1,715	)	$	—		$	(1,715	)
Six months ended June 30, 2019	Pension and Other Postretirement Adjustments			Changes in Fair Value of Effective Cash Flow Hedges			Total
Balance at December 31, 2018	$	(2,249	)	$	(767	)	$	(3,016	)
Other comprehensive (loss) before reclassifications	—			(2,178		)	(2,178		)
Amounts reclassified from accumulated other comprehensive income	(714		)	105			(609		)
Net current period other comprehensive (loss)	(714		)	(2,073		)	(2,787		)
Balance at June 30, 2019	$	(2,963	)	$	(2,840	)	$	(5,803	)
Six months ended June 30, 2018	Pension and Other Postretirement Adjustments			Changes in Fair Value of Effective Cash Flow Hedges			Total
Balance at December 31, 2017	$	(2,198	)	$	—		$	(2,198	)
Other comprehensive income before reclassifications	190			—			190
Amounts reclassified from accumulated other comprehensive income	293			—			293
Net current period other comprehensive income	483			—			483
Balance at June 30, 2018	$	(1,715	)	$	—		$	(1,715	)

Page 25 of 43

INNOPHOS HOLDINGS, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

(Dollars in thousands, except per share amounts, share amounts or where otherwise noted)

17. Segment Reporting

The Company discloses certain financial and supplementary information about its reportable segments, revenue by products and revenues by geographic area. Operating segments are defined as components of an enterprise about which separate discrete financial information is evaluated regularly by the chief operating decision maker, in order to decide how to allocate resources and assess performance. The primary performance indicators for the chief operating decision maker are sales and EBITDA (defined as net income (loss) before interest, income taxes, depreciation and amortization). All references to sales in this Quarterly Report on Form 10-Q are recognized when title and risk of loss passes to the customer, which occurs either upon shipment or delivery, depending upon the agreed sales terms with customers.

The Company's chief executive officer is the chief operating decision maker and has determined to assess the Company's performance and allocate the appropriate resources based on the following operating segments: (1) Food, Health and Nutrition; (2) Industrial Specialties; and (3) Other. These reporting segments accurately reflect the underlying business dynamics and align with the strategic direction of the Company.

During the second quarter of 2019, the Company adjusted the EBITDA allocation for certain transactions to align it with the underlying business. As a result, EBITDA in the Other segment decreased by $1.4 million with corresponding increases to Food, Health and Nutrition of $1.0 million and Industrial Specialties of $0.4 million.

Three months ended June 30, 2019	Food, Health and Nutrition		Industrial Specialties		Other			Total
Net sales	$	106,543	$	67,725	$	10,770		$	185,038
EBITDA	$	19,561	$	6,972	$	(270	)	$	26,263
Depreciation and amortization expense	$	6,781	$	3,766	$	339		$	10,886
Three months ended June 30, 2018	Food, Health and Nutrition		Industrial Specialties		Other			Total
Net sales	$	125,664	$	66,751	$	14,310		$	206,725
EBITDA	$	14,939	$	7,794	$	(223	)	$	22,510
Depreciation and amortization expense	$	7,213	$	3,368	$	508		$	11,089
Six months ended June 30, 2019	Food, Health and Nutrition		Industrial Specialties		Other			Total
Net sales	$	221,609	$	130,923	$	23,920		$	376,452
EBITDA	$	33,967	$	15,029	$	3,041		$	52,037
Depreciation and amortization expense	$	13,169	$	6,946	$	531		$	20,646
Six months ended June 30, 2018	Food, Health and Nutrition		Industrial Specialties		Other			Total
Net sales	$	252,027	$	130,101	$	30,037		$	412,165
EBITDA	$	33,931	$	17,886	$	564		$	52,381
Depreciation and amortization expense	$	14,535	$	7,104	$	814		$	22,453

Page 26 of 43

INNOPHOS HOLDINGS, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

(Dollars in thousands, except per share amounts, share amounts or where otherwise noted)

A reconciliation of net income to EBITDA follows:

	Three months ended
	June 30, 2019		June 30, 2018
Net income	$	1,401	$	6,246
Provision for income taxes	10,089		1,977
Interest expense, net	3,887		3,198
Depreciation and amortization	10,886		11,089
EBITDA	$	26,263	$	22,510
	Six months ended
	June 30, 2019		June 30, 2018
Net income	$	10,095	$	17,161
Provision for income taxes	13,707		6,665
Interest expense, net	7,589		6,102
Depreciation and amortization	20,646		22,453
EBITDA	$	52,037	$	52,381

Page 27 of 43

INNOPHOS HOLDINGS, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

(Dollars in thousands, except per share amounts, share amounts or where otherwise noted)

18. Supply Agreement Termination

In June 2018, the Company agreed to terminate a previously long-term supply agreement and replaced it with a short-term agreement. In December 2018, as a result of the termination, the Company received consideration of $24.9 million which included $21.3 million in cash as well as receipt of certain tangible assets with a fair value of $3.6 million. The consideration was recorded as a deferred liability with $9.5 million in Other current liabilities and the remaining $15.4 million recorded in Other long-term liabilities. Beginning in January 2019, the deferred liability is being amortized on a straight-line basis through July 2021, which is the end of the new supply agreement, as a reduction of Cost of goods sold. For the three and six months ended June 30, 2019 amortization of the deferred liability was $2.4 million and $4.8 million, respectively.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Innophos is a leading international producer of specialty ingredient solutions that deliver versatile benefits for the food, health, nutrition and industrial markets. Innophos combines more than a century of experience in specialty phosphate manufacturing with a broad range of other specialty nutritional ingredients. Many of Innophos' products are application-specific compounds engineered to meet customer performance requirements and are often critical to the taste, texture and performance of foods, beverages, pharmaceuticals, oral care products and other applications. For example, Innophos products act as flavor enhancers in beverages, electrolytes in sports drinks, texture additives in cheeses, leavening agents in baked goods, pharmaceutical excipients, cleaning agents in toothpaste, and they also provide a wide range of nutritional fortification solutions for food, beverage and nutritional supplement manufacturers.

Recent Trends and Outlook

Revenues are now forecasted to be 6-7% below 2018 revenue of $802 million, compared with the prior expectation of 1-2% down.

The revised revenue range reflects the expectation that the U.S. fertilizer sales impacted by Midwest flooding will not rebound in 2019 as previously expected. In addition, the Company expects market softness to continue to impact both the Food, Health and Nutrition segment and the Industrial Specialties segment volumes, as well as Industrial Specialties segment pricing and volumes to continue to be affected indirectly by tariffs. These factors will be partially offset by positive year-over-year revenue contribution from price increases and new product wins. The year-over-year volume decline from the discontinuation of the low margin nutrition business is expected to impact comps through the end of the year, but less materially for the fourth quarter.

From a GAAP and cash flow perspective, costs are expected to be lower in H2 than H1 as the Company winds down spending on the non-recurring expenses that are adjusted for non-GAAP reporting purposes, including value chain transition expense and Mexico natural gas supply adjustment charges.

Capital investments are now expected to be in the $45 to $50 million range, approximately 15-20% below 2018 spending. This compares with the prior expectation of capital investments in line with prior year, and reflects the Company’s expectation to be more efficient with spending to finalize the optimization of the value chain and manufacturing program while continuing to make investments in high return projects.

The Company expects its effective tax rate to operate in the 28-32% range, excluding the second quarter $6.6 million one-time Dutch tax charge.

Page 28 of 43

Results of Operations

The following table sets forth a summary of the Company’s operations and their percentages of total revenue for the periods indicated (dollars in millions):

	Three Months Ended
	June 30, 2019					June 30, 2018
	Amount			%		Amount		%
Net sales	$	185.0		100.0		$	206.7	100.0
Cost of goods sold	148.6			80.3		170.3		82.4
Gross profit	36.4			19.7		36.4		17.6
Operating expenses:
Selling, general and administrative	20.3			11.0		22.5		10.9
Research & development	1.2			0.6		1.4		0.7
Income from operations	14.9			8.1		12.5		6.0
Interest expense, net	3.9			2.1		3.2		1.5
Foreign exchange (gain) loss, net	(0.5		)	(0.3	)	1.1		0.5
Provision for income taxes	10.1			5.5		2.0		1.0
Net income	$	1.4		0.8		$	6.2	3.0
	Six Months Ended
	June 30, 2019					June 30, 2018
	Amount			%		Amount		%
Net sales	$	376.5		100.0		$	412.2	100.0
Cost of goods sold	303.7			80.7		333.6		80.9
Gross profit	72.8			19.3		78.6		19.1
Operating expenses:
Selling, general and administrative	39.7			10.5		45.0		10.9
Research & development	2.6			0.7		2.8		0.6
Income from operations	30.5			8.1		30.8		7.5
Interest expense, net	7.6			2.0		6.1		1.5
Foreign exchange (gain) loss, net	(0.9		)	(0.2	)	0.9		0.2
Provision for income taxes	13.7			3.6		6.6		1.7
Net income	$	10.1		2.7		$	17.2	4.2

Page 29 of 43

Three months ended June 30, 2019 compared to the three months ended June 30, 2018

Net Sales

Net sales represent the selling price of the products, net of any customer-related rebates, plus freight and any other items invoiced to customers. Net sales for the three months ended June 30, 2019 were $185.0 million, a decrease of $21.7 million, or 10.5%, as compared to $206.7 million for the same period in 2018, with prices up 2.9%, and volumes lower by 13.4%. Food, Health and Nutrition segment sales were down 15.2%, or $19.1 million, with selling prices higher by 3.1%, or $3.8 million, but volumes lower by 18.3%, or $22.9 million. Industrial Specialties segment sales were up 1.5%, or $1.0 million, with volumes lower by 1.9%, or $1.3 million, but selling prices higher by 3.4%, or $2.3 million. Other segment sales were lower by 24.7%, or $3.6 million, with volumes lower by 23.4%, or $3.4 million, and selling prices lower by 1.3%, or $0.2 million.

The Company calculates pure selling price dollar variances as the selling price for the current year to date period minus the selling price for the prior year to date period, and then multiplies the resulting selling price difference by the prior year to date period volume. Volume variance is calculated as the total sales variance minus the selling price variance and refers to the revenue effect of changes in tons sold at the relative prices applicable to the variation in tons, otherwise known as volume/mix.

The following table illustrates for the three months ended June 30, 2019 the percentage changes in net sales by reportable segment compared with the same period of the prior year, including the effect of price and volume/mix changes upon revenue:

	Price		Volume/Mix		Total
Food, Health and Nutrition	3.1	%	(18.3	)%	(15.2	)%
Industrial Specialties	3.4	%	(1.9	)%	1.5	%
Other	(1.3	)%	(23.4	)%	(24.7	)%
Total	2.9	%	(13.4	)%	(10.5	)%

Gross Profit

Gross profit represents net sales less cost of goods sold. Gross profit for the three months ended June 30, 2019 was $36.4 million, flat with the same period in 2018. Gross profit as a percentage of net sales increased to 19.7% for the three months ended June 30, 2019 versus 17.6% for the same period in 2018.

The following table outlines the factors resulting in the year on year change in the three months ended June 30, 2019.

	$ (in millions)
Higher selling prices	$	5.9
Lower sales volume/mix	(6.5		)
Supply agreement termination amortization	2.4
Severance	(0.3		)
Higher raw materials costs (a)	(0.1		)
Higher manufacturing cost (a)	(4.8		)
Lower value chain transition costs	3.4
Higher depreciation and amortization (a)	(0.9		)
Lower turnaround cost at our Coatzacoalcos, Mexico manufacturing facility	0.9
	$	—

(a) For the three months ended June 30, 2019, includes a $3.1 million benefit related to a cumulative adjustment of capitalized variances.

Page 30 of 43

Operating Expenses and Research and Development

Operating expenses consist primarily of selling, general and administrative and research and development expenses. Operating expenses for the three months ended June 30, 2019 were $21.5 million, a decrease of $2.4 million, or 10.0%, as compared to $23.9 million for the same period in 2018. The decrease was primarily due to $1.1 million lower depreciation and $2.6 million lower administration costs from acquisition synergies, partially offset by $0.8 million higher non-cash stock compensation expense and $0.7 million higher severance expense.

Operating Income

Operating income for the three months ended June 30, 2019 was $14.9 million, an increase of $2.4 million, or 19.2%, as compared to $12.5 million for the same period in 2018. Operating income as a percentage of net sales increased to 8.1% versus 6.0% for the same period in 2018, for the reasons noted above.

Interest Expense, net

Net interest expense, including deferred financing amortization expense, for the three months ended June 30, 2019 was $3.9 million, an increase of $0.7 million, or 21.9%, as compared to $3.2 million for the same period in 2018. The increase was primarily due to higher market interest rates and lower capitalized interest.

Foreign Exchange

Foreign exchange for the three months ended June 30, 2019 was a gain of $0.5 million as compared to a loss of $1.1 million for the same period in 2018. The U.S. Dollar is the functional currency of our Mexican and Canadian operations. The Company has greater foreign denominated asset balances (largely Mexican Peso and Canadian Dollar), such as VAT receivables and prepaid income taxes in foreign jurisdictions, than offsetting foreign denominated liability balances. Foreign exchange gain or loss is recorded on remeasurement of non-U.S. Dollar denominated monetary assets and liabilities. Such gains and losses fluctuate from period to period as the foreign currencies strengthen or weaken against the U.S. Dollar and the amount of non-U.S. Dollar denominated assets and liabilities increases or decreases.

Provision for Income Taxes

The effective income tax rate on income before taxes was approximately 88% for the three months ended June 30, 2019 compared to approximately 24% for the comparable period in 2018.The change in the effective tax rate is primarily due to the Dutch tax matter (Note 14).

Net Income

Net income for the three months ended June 30, 2019 was $1.4 million, as compared to $6.2 million for the same period in 2018, due to the factors described above.

Six months ended June 30, 2019 compared to the six months ended June 30, 2018

Net Sales

Net sales represent the selling price of the products, net of any customer-related rebates, plus freight and any other items invoiced to customers. Net sales for the six months ended June 30, 2019 were $376.5 million, a decrease of $35.7 million, or 8.7%, as compared to $412.2 million for the same period in 2018, with prices up 3.3%, and volumes lower by 12.0%. Food, Health and Nutrition segment sales were down 12.1%, or $30.4 million, with selling prices higher by 3.7%, or $9.4 million, but volumes lower by 15.8%, or $39.8 million. Industrial Specialties segment sales were up 0.6%, or $0.8 million, with volumes lower by 2.9%, or $3.7 million, but selling prices higher by 3.5%, or $4.5 million. Other segment sales were lower by 20.4%, or $6.1 million, with volumes lower by 19.3%, or $5.8 million, and selling prices lower by 1.1%, or $0.3 million.

The Company calculates pure selling price dollar variances as the selling price for the current year to date period minus the selling price for the prior year to date period, and then multiplies the resulting selling price difference by the prior year to date period volume. Volume variance is calculated as the total sales variance minus the selling price variance and refers to the revenue effect of changes in tons sold at the relative prices applicable to the variation in tons, otherwise known as volume/mix.

The following table illustrates for the six months ended June 30, 2019 the percentage changes in net sales by reportable segment compared with the same period of the prior year, including the effect of price and volume/mix changes upon revenue:

Page 31 of 43

	Price		Volume/Mix		Total
Food, Health and Nutrition	3.7	%	(15.8	)%	(12.1	)%
Industrial Specialties	3.5	%	(2.9	)%	0.6	%
Other	(1.1	)%	(19.3	)%	(20.4	)%
Total	3.3	%	(12.0	)%	(8.7	)%

Gross Profit

Gross profit represents net sales less cost of goods sold. Gross profit for the six months ended June 30, 2019 was $72.8 million, a decrease of $5.8 million, or 7.4%, as compared to $78.6 million for the same period in 2018. Gross profit as a percentage of net sales increased to 19.3% for the six months ended June 30, 2019 versus 19.1% for the same period in 2018.

The following table outlines the factors resulting in the year on year change in the six months ended June 30, 2019.

	$ (in millions)
Higher selling prices	$	13.6
Lower sales volume/mix	(13.0		)
Supply agreement termination amortization	4.8
Severance	(0.5		)
Higher raw materials costs (a) (b)	(5.1		)
Higher manufacturing cost (b)	(6.8		)
Lower value chain transition costs	1.8
Higher depreciation and amortization (b)	(0.3		)
Higher natural gas cost at our Coatzacoalcos, Mexico manufacturing facility	(1.2		)
Lower turnaround cost at our Coatzacoalcos, Mexico manufacturing facility	0.9
	$	(5.8	)

(a) Primarily sulfur and MGA.

(b) For the six months ended June 30, 2019, includes a $3.1 million benefit related to a cumulative adjustment of capitalized variances.

Operating Expenses and Research and Development

Operating expenses consist primarily of selling, general and administrative and research and development expenses. Operating expenses for the six months ended June 30, 2019 were $42.3 million, a decrease of $5.5 million, or 11.5%, as compared to $47.8 million for the same period in 2018. The decrease was primarily due to $2.2 million lower depreciation and $4.6 million lower administration costs from acquisition synergies, partially offset by $1.4 million higher severance expense.

Operating Income

Operating income for the six months ended June 30, 2019 was $30.5 million, a decrease of $0.3 million, or 1.0%, as compared to $30.8 million for the same period in 2018. Operating income as a percentage of net sales increased to 8.1% versus 7.5% for the same period in 2018, for the reasons noted above.

Interest Expense, net

Net interest expense, including deferred financing amortization expense, for the six months ended June 30, 2019 was $7.6 million, an increase of $1.5 million, or 24.6%, as compared to $6.1 million for the same period in 2018. The increase was primarily due to higher market interest rates and lower capitalized interest.

Foreign Exchange

Foreign exchange for the six months ended June 30, 2019 was a gain of $0.9 million as compared to a loss of $0.9 million for the same period in 2018. The U.S. Dollar is the functional currency of our Mexican and Canadian operations. The Company has greater foreign denominated asset balances (largely Mexican Peso and Canadian Dollar), such as VAT receivables and prepaid income taxes in foreign jurisdictions, than offsetting foreign denominated liability balances. Foreign exchange gain or loss is recorded on remeasurement of non-U.S. Dollar denominated monetary assets and liabilities. Such

Page 32 of 43

gains and losses fluctuate from period to period as the foreign currencies strengthen or weaken against the U.S. Dollar and the amount of non-U.S. Dollar denominated assets and liabilities increases or decreases.

Provision for Income Taxes

The effective income tax rate on income before taxes was approximately 58% for the six months ended June 30, 2019 compared to approximately 28% for the comparable period in 2018. The change in the effective tax rate is primarily due to the Dutch tax matter (Note 14).

Net Income

Net income for the six months ended June 30, 2019 was $10.1 million, as compared to $17.2 million for the same period in 2018, due to the factors described above.

Page 33 of 43

Segment Reporting

The Company's chief executive officer is the chief operating decision maker and has determined to assess the Company's performance and allocate the appropriate resources based on the following operating segments: (1) Food, Health and Nutrition; (2) Industrial Specialties; and (3) Other. These reporting segments accurately reflect the underlying business dynamics and align with the strategic direction of the Company. The primary performance indicators for the chief operating decision maker are sales and earnings before interest, taxes, depreciation and amortization, or EBITDA. The following table sets forth the results of these indicators by segment for the three and six months ended June 30, 2019 and June 30, 2018:

	Three Months Ended
	June 30, 2019			June 30, 2018			Net Sales % Change
Segment Net Sales
Food, Health and Nutrition	$	106,543		$	125,664		(15.2	)%
Industrial Specialties	67,725			66,751			1.5	%
Other	10,770			14,310			(24.7	)%
Total	$	185,038		$	206,725		(10.5	)%
Segment EBITDA
Food, Health and Nutrition	$	19,561		$	14,939
Industrial Specialties	6,972			7,794
Other	(270		)	(223		)
Total	$	26,263		$	22,510
Segment EBITDA % of net sales
Food, Health and Nutrition	18.4		%	11.9		%
Industrial Specialties	10.3		%	11.7		%
Other	(2.5		)%	(1.6		)%
Total	14.2		%	10.9		%
Depreciation and amortization expense
Food, Health and Nutrition	$	6,781		$	7,213
Industrial Specialties	3,766			3,368
Other	339			508
Total	$	10,886		$	11,089

Page 34 of 43

	Six Months Ended
	June 30, 2019			June 30, 2018			Net Sales % Change
Segment Net Sales
Food, Health and Nutrition	$	221,609		$	252,027		(12.1	)%
Industrial Specialties	130,923			130,101			0.6	%
Other	23,920			30,037			(20.4	)%
Total	$	376,452		$	412,165		(8.7	)%
Segment EBITDA
Food, Health and Nutrition	$	33,967		$	33,931
Industrial Specialties	15,029			17,886
Other	3,041			564
Total	$	52,037		$	52,381
Segment EBITDA % of net sales
Food, Health and Nutrition	15.3		%	13.5		%
Industrial Specialties	11.5		%	13.7		%
Other	12.7		%	1.9		%
Total	13.8		%	12.7		%
Depreciation and amortization expense
Food, Health and Nutrition	$	13,169		$	14,535
Industrial Specialties	6,946			7,104
Other	531			814
Total	$	20,646		$	22,453

A reconciliation of net income to EBITDA follows:

	Three months ended
	June 30, 2019		June 30, 2018
Net income	$	1,401	$	6,246
Provision for income taxes	10,089		1,977
Interest expense, net	3,887		3,198
Depreciation and amortization	10,886		11,089
EBITDA	$	26,263	$	22,510

	Six Months Ended
	June 30, 2019		June 30, 2018
Net income	$	10,095	$	17,161
Provision for income taxes	13,707		6,665
Interest expense, net	7,589		6,102
Depreciation and amortization	20,646		22,453
EBITDA	$	52,037	$	52,381

Page 35 of 43

Three months ended June 30, 2019 compared to the three months ended June 30, 2018

Segment Net Sales:

Food, Health and Nutrition net sales decreased 15.2% for the three months ended June 30, 2019 compared with the same period in 2018. Volumes decreased 18.3%, due to the Company's decision to discontinue low-margin nutrition trading business and softer demand including customer destocking. Average selling price increased 3.1%.

Industrial Specialties net sales increased 1.5% for the three months ended June 30, 2019 compared with the same period in 2018. Volumes decreased 1.9%, but average selling prices increased by 3.4%.

Other net sales decreased 24.7% for the three months ended June 30, 2019 compared with the same period in 2018. Volumes decreased 23.4% due primarily to reduced co-product and low grade acid sales, and average selling prices decreased 1.3%.

Segment EBITDA Percentage of Net Sales:

The 650 basis point increase in Food, Health and Nutrition EBITDA margins for the three months ended June 30, 2019 compared with the same period in 2018 is due to lower raw material costs, largely sulfur and MGA, which increased margins by 340 basis points, higher average selling prices which increased margins by 260 basis points, lower value chain transition costs which increased margins by 180 basis points, lower operating costs which increased margins by 130 basis points, and supply agreement termination amortization (Note 18) which increased margins by 100 basis points. This increase was partially offset by higher manufacturing costs which decreased margins by 250 basis points, lower sales volume/mix which decreased margins by 80 basis points, and other items which decreased margins by 30 basis points.

The 140 basis point decrease in Industrial Specialties EBITDA margins for the three months ended June 30, 2019 compared with the same period in 2018 is due to higher manufacturing and operating costs which decreased margins by 400 basis points, lower sales volume/mix which decreased margins by 340 basis points, and higher raw material costs which decreased margins by 320 basis points. This decrease was partially offset by higher average selling prices which increased margins by 290 basis points, favorable translation which increased margins by 240 basis points, value chain transition costs which increased margins by 200 basis points, supply agreement termination amortization which increased margins by 140 basis points, and other items which increased margins by 50 basis points.

The 90 basis point decrease in Other EBITDA margins for the three months ended June 30, 2019 compared with the same period in 2018 is due to higher raw material costs which decreased margins by 1,530 basis points, lower selling prices which decreased margins 130 basis points, and other items which decreased margins by 20 basis points. This decrease was partially offset by higher sales volume/mix which increased margins by 810 basis points, lower manufacturing and operating costs which increased margins 510 basis points, supply agreement termination amortization which increased margins by 170 basis points, and value chain transition costs which increased margins by 100 basis points.

Six months ended June 30, 2019 compared to the six months ended June 30, 2018

Segment Net Sales:

Food, Health and Nutrition net sales decreased 12.1% for the six months ended June 30, 2019 compared with the same period in 2018. Volumes decreased 15.8%, due to the Company's decision to discontinue low-margin nutrition trading business and softer demand including customer destocking. Average selling price increased 3.7%.

Industrial Specialties net sales increased 0.6% for the six months ended June 30, 2019 compared with the same period in 2018. Volumes decreased 2.9%, but average selling prices increased by 3.5%.

Other net sales decreased 20.4% for the six months ended June 30, 2019 compared with the same period in 2018. Volumes decreased 19.3% due primarily to reduced co-product and low grade acid sales volumes, and average selling prices decreased 1.1%.

Page 36 of 43

Segment EBITDA Percentage of Net Sales:

The 180 basis point increase in Food, Health and Nutrition EBITDA margins for the six months ended June 30, 2019 compared with the same period in 2018 is due to higher average selling prices which increased margins by 310 basis points, lower operating costs which increased margins by 160 basis points, supply agreement termination amortization which increased margins by 100 basis points, value chain transition costs which increased margins by 50 basis points, and other items which increased margins by 30 basis points. This increase was partially offset by higher manufacturing costs which decreased margins by 230 basis points, lower sales volume/mix which decreased margins by 190 basis points, and higher severance which decreased margins by 50 basis points.

The 220 basis point decrease in Industrial Specialties EBITDA margins for the six months ended June 30, 2019 compared with the same period in 2018 is due to higher manufacturing and operating costs which decreased margins by 370 basis points, higher raw material costs which decreased margins by 200 basis points, lower sales volume/mix which decreased margins by 130 basis points, and higher severance which decreased margins by 40 basis points. This decrease was partially offset by higher average selling prices which increased margins by 290 basis points, supply agreement termination amortization which increased margins by 140 basis points, value chain transition costs which increased margins by 60 basis points, and other items which increased margins by 30 basis points.

The 1,080 basis point increase in Other EBITDA margins for the six months ended June 30, 2019 compared with the same period in 2018 is due to lower manufacturing and operating costs which increased margins 1,140 basis points, favorable translation which increased margins by 570 basis points, higher sales volume/mix which increased margins by 490 basis points, supply agreement termination amortization which increased margins by 160 basis points, lower value chain transition costs and other items which increased margins by 40 basis points. This increase was partially offset by higher raw material costs which decreased margins by 1,050 basis points, higher natural gas costs at our Coatzacoalcos, Mexico manufacturing facility which decreased margins by 120 basis points, lower selling prices which decreased margins 110 basis points, and higher severance which lowered margins by 40 basis points.

Liquidity and Capital Resources

Historical

Our principal liquidity requirements have been, and we expect will be, for working capital and general corporate purposes, including capital expenditures, debt service, and our quarterly dividend program. Currently, the annual dividend payment is $1.92 per share or approximately $38 million. We do not currently have a share repurchase program in place. Capital investments are now expected to be in the $45 to $50 million range, approximately 15-20% below 2018 spending, compared with the prior expectation of in line with prior year, as the Company becomes more efficient with spending to finalize the optimization of the value chain and manufacturing program. We have historically satisfied our liquidity requirements with internally generated cash flows and availability under our revolving credit facility. We expect that our ability to generate cash from our operations and ability to borrow from our credit facilities should be sufficient to support working capital needs, planned growth and capital expenditures for the next 12 months and for the foreseeable future.

Cash Flow Summary

The following table sets forth a summary of the Company’s cash flows for the periods indicated.

(Dollars in millions)	Six Months Ended
	June 30, 2019			June 30, 2018
Operating Activities	$	16.8		$	9.6
Investing Activities	(15.8		)	(26.5		)
Financing Activities	10.9			1.0
Effect of foreign exchange rate changes	—			(0.6		)

Page 37 of 43

Six months ended June 30, 2019 compared to six months ended June 30, 2018

Net cash provided by operating activities was $16.8 million for the six months ended June 30, 2019 compared to $9.6 million for the same period in 2018, an increase in cash of $7.2 million. The increase in operating activities cash largely resulted from lower working capital needs, primarily due to favorable changes in inventories of $20.9 million, accounts receivable of $11.7 million and other current liabilities of $4.9 million, partially offset by an unfavorable change in accounts payable of $21.4 million and other current assets of $8.4 million.

Net cash used for investing activities was $15.8 million for the six months ended June 30, 2019, compared to $26.5 million for the same period in 2018, an increase in cash of $10.7 million. The increase in cash was due to $10.7 million decrease in capital spending.

Approximately 55% of the 2019 capital spending was for strategic growth and cost/productivity improvements and the remaining 45% was for plant maintenance projects.

    Net cash from financing activities for the six months ended June 30, 2019 was a source of $10.9 million, compared to a source of $1.0 million the same period in 2018, an increase in cash of $9.9 million. This increase in cash was primarily due to decreased loan repayments of $34.0 million, partially offset by the decrease in loan borrowings of $24.0 million.

On June 30, 2019, the Company had cash and cash equivalents outside the United States of $25.1 million, or 78% of the Company's balance. The foreign cash amounts are not restricted by law to be used in other countries. The Company's current operating plan does not include any other repatriation of any additional cash and cash equivalents held outside the United States to fund the United States operations. However, in the event we do repatriate cash and cash equivalents held outside of the United States, we may be required to pay additional taxes, such as withholding taxes, to repatriate these funds.

Critical Accounting Estimates and Policies

There have been no material changes from the critical accounting estimates previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2018.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are exposed to certain market risks as part of our ongoing business operations. Primary exposures include changes in interest rates, as borrowings under our credit agreement will bear interest at floating rates based on LIBOR plus an applicable borrowing margin. We manage our interest rate risk by balancing the amount of fixed-rate and floating-rate debt to the extent practicable consistent with our credit status. For fixed-rate debt, interest rate changes do not affect earnings or cash flows. Conversely, for floating-rate debt, interest rate changes generally affect our earnings and cash flows, assuming other factors are held constant.

At June 30, 2019, we had a $450.0 million revolving credit facility, of which $330.0 million of variable-rate debt was outstanding, which approximates fair value (determined using level 2 inputs within the fair value hierarchy). Total remaining availability was $119.5 million, taking into account $0.5 million in face amount of letters of credit issued under the sub-facility. In December 2018, the Company entered into an interest rate swap, swapping the LIBOR exposure of $150.0 million of floating rate debt, which is currently outstanding under our Credit Agreement, to a fixed rate to maturity obligation of 2.677% expiring in November 2021. The fair value of this interest rate swap is a liability of approximately $3.8 million as of June 30, 2019 and is included in other long-term liabilities.

Changes in economic conditions could result in higher interest rates, thereby increasing our interest expense on our revolving line of credit. Changes in economic conditions may also result in lower operating income, reducing our funds available for capital investment, operations or other purposes. In addition, a substantial portion of our operating cash flow and available borrowing capacity on our credit facility has been used to repurchase shares, pay dividends, fund capital expenditures, fund working capital needs and service debt, which may affect our ability to make future acquisitions. We have and may continue to use interest rate protection agreements to minimize our exposure to interest rate fluctuation. Regardless of hedges, we may experience economic loss and a negative impact on earnings or net assets as a result of interest rate fluctuations. Based on $180.0 million outstanding borrowings as floating rate debt, an immediate increase of one percentage point would cause an increase to interest expense of approximately $1.8 million per year.

Page 38 of 43

We do not currently, but may from time to time, hedge our currency rate and energy risks.

We believe that our concentration of credit risk related to trade accounts receivable is limited since these receivables are spread among a number of customers and are geographically dispersed. No customer accounted for more than 10% of our sales in the last 3 years.

Foreign Currency Exchange Rates

The U.S. Dollar is the functional currency of the Canadian and Mexican operations. Accordingly, these operations’ monetary assets and liabilities are remeasured at current exchange rates, non-monetary assets and liabilities are remeasured at historical exchange rates, and revenue and expenses are remeasured at average exchange rates and at historical exchange rates for the related revenue and expenses of non-monetary assets and liabilities. All transaction gains and losses are included in net income.

Our principal source of exchange rate exposure in our foreign operations consists of expenses, such as labor expenses, which are denominated in the foreign currency of the country in which we operate. A decline in the value of the U.S. Dollar relative to the local currency would generally cause our operational expenses (particularly labor costs) to increase (conversely, a decline in the value of the foreign currency relative to the U.S. Dollar would cause these expenses to decrease). We believe that normal exchange rate fluctuations consistent with recent historical trends would have a modest impact on our expenses, and would not materially affect our financial condition or results of operations. Nearly all of our sales are denominated in U.S. Dollars and our exchange rate exposure in terms of sales revenues is minimal. However, the strength or weakness of the U.S. Dollar versus other currencies can affect our competitiveness in the United States and export markets.

Inflation and changing prices

Our costs and expenses will be subject to inflation and price fluctuations. Significant price fluctuations in raw materials, freight and energy costs, if not compensated for by cost savings from production efficiencies or price increases passed on to customers, could have a material effect on our financial condition and results of operations.

Off-Balance Sheet Arrangements

We do not have any relationships with unconsolidated entities or financial partnerships, such as entities often referred to as “structured finance or special purpose entities”, which would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.

Page 39 of 43

ITEM 4. CONTROLS AND PROCEDURES

Disclosure Control and Procedures

The Company maintains disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended) that are designed to provide reasonable assurance that information required to be reported in the Company's consolidated financial statements and filings is recorded, processed, summarized and reported within the periods specified in the rules and forms of the Securities and Exchange Commission, or SEC, and that such information is accumulated and communicated to the Company's management, including its Principal Executive Officer and Principal Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. Any controls and procedures, no matter how well designed and operated, can provide only reasonable, not absolute, assurance of achieving the desired control objectives.

As of June 30, 2019, the Company completed an evaluation under the supervision and with the participation of the Company's management, including the Company's Principal Executive Officer and Principal Financial Officer, of the effectiveness of the design and operation of the Company's disclosure controls and procedures. Based upon that evaluation, the Principal Executive Officer and Principal Financial Officer concluded that the Company's disclosure controls and procedures are effective at the reasonable assurance level.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Changes in Internal Control over Financial Reporting

There have been no changes in our internal control over financial reporting during or with respect to the second quarter of 2019 that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

Page 40 of 43

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

Note 14 of Notes to Consolidated Condensed Financial Statements in “Part I, Item 1. Financial Statements" contained in this Quarterly Report on Form 10-Q is incorporated herein by reference.

ITEM 1A. RISK FACTORS

There have been no material changes from the risk factors previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2018.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

The Company did not have any share repurchases on the open market during the second quarter of 2019. From time to time, the Company reacquires shares from employees in connection with the vesting, exercise and forfeiture of awards under its equity compensation plans. In the second quarter of 2019, no such reacquisitions took place.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

None.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS

a) Exhibits. The following exhibits are filed or furnished as part of this report:

Exhibit No.	Description
31.1	Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1*	Certification of Principal Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2*	Certification of Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS	XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

* Not to be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section, nor deemed to be incorporated by reference into any filing under that Act or the Securities Act of 1933, as amended.

Page 41 of 43

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

INNOPHOS HOLDINGS, INC.
	/s/ Kim Ann Mink
By:	Kim Ann Mink
Its:	Chief Executive Officer, President and Director
	(Principal Executive Officer)
Dated:	August 8, 2019
INNOPHOS HOLDINGS, INC.
	/s/ Mark Feuerbach
By:	Mark Feuerbach
Its:	Interim Chief Financial Officer
	(Principal Financial Officer)
Dated:	August 8, 2019

Page 42 of 43

EXHIBIT INDEX

Exhibit No.	Description
31.1	Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1*	Certification of Principal Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2*	Certification of Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS	XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

* Not to be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section, nor deemed to be incorporated by reference into any filing under that Act or the Securities Act of 1933, as amended.

Page 43 of 43

EX-31.1

Exhibit 31.1

CERTIFICATIONS

I, Kim Ann Mink, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Innophos Holdings, Inc. (“the registrant”);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated:	August 8, 2019	By:	/S/    KIM ANN MINK
			Kim Ann Mink
			Chief Executive Officer, President and Director (Principal Executive Officer)

EX-31.2

Exhibit 31.2

I, Mark Feuerbach, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Innophos Holdings, Inc. (“the registrant”);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated:	August 8, 2019	By:	/S/    Mark Feuerbach
			Mark Feuerbach
			Interim Chief Financial Officer (Principal Financial Officer)

EX-32.1

Exhibit 32.1

Certification Pursuant to § 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. § 1350)

I, Kim Ann Mink, certify that:

1. the accompanying Quarterly Report on Form 10-Q for the period ended June 30, 2019 (the “Report”), fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and

2. the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Innophos Holdings, Inc. at the dates and for the periods indicated.

A signed original of this written statement required by Section 906 has been provided Innophos Holdings, Inc. and will be retained by Innophos Holdings, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

The undersigned expressly disclaims any obligation to update the foregoing certification except as required by law.

Date: August 8, 2019

/S/    KIM ANN MINK        

Kim Ann Mink

Chief Executive Officer and Director

(Principal Executive Officer)

The foregoing certification is being furnished solely pursuant to the requirements of 18 U.S.C. § 1350 and is not being filed as a part of the Report or as a separate disclosure document.

EX-32.2

Exhibit 32.2

Certification Pursuant to § 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. § 1350)

I, Mark Feuerbach, certify that:

1. the accompanying Quarterly Report on Form 10-Q for the period ended June 30, 2019 (the “Report”), fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and

2. the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Innophos Holdings, Inc. at the dates and for the periods indicated.

A signed original of this written statement required by Section 906 has been provided Innophos Holdings, Inc. and will be retained by Innophos Holdings, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

The undersigned expressly disclaims any obligation to update the foregoing certification except as required by law.

Date: August 8, 2019

/S/  Mark Feuerbach

Mark Feuerbach

Interim Chief Financial Officer

(Principal Financial Officer)

The foregoing certification is being furnished solely pursuant to the requirements of 18 U.S.C. § 1350 and is not being filed as a part of the Report or as a separate disclosure document.

XML

Cover Page - shares	6 Months Ended
	Jun. 30, 2019	Aug. 02, 2019
Cover page.
Document Type	10-Q
Document Quarterly Report	true
Document Transition Report	false
Amendment Flag	false
Entity Central Index Key	0001364099
Document Period End Date	Jun. 30, 2019
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q2
Entity File Number	001-33124
Entity Registrant Name	INNOPHOS HOLDINGS, INC.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	20-1380758
Entity Address, Address Line One	259 Prospect Plains Road
Entity Address, City or Town	Cranbury
Entity Address, State or Province	NJ
Entity Address, Postal Zip Code	08512
City Area Code	609
Local Phone Number	495-2495
Title of 12(b) Security	Common Stock, $0.001 par value
Trading Symbol	IPHS
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		19,691,124
Security Exchange Name	NASDAQ

XML

Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Current assets:
Cash and cash equivalents	$ 32,040	$ 20,197
Accounts receivable, net of allowance for doubtful accounts ($852 and $688)	98,957	102,564
Inventories	172,455	180,203
Other current assets	37,012	24,094
Total current assets	340,464	327,058
Property, plant and equipment, net	235,349	240,235
Lease right-of-use assets	51,604	0
Goodwill	152,767	152,767
Intangibles and other assets, net	89,971	95,094
Total assets	870,155	815,154
Current liabilities:
Accounts payable, trade and other	51,297	80,007
Other current liabilities	67,993	49,993
Total current liabilities	119,290	130,000
Long-term debt	330,000	300,000
Long-term lease obligations	45,478	0
Other long-term liabilities	36,200	49,639
Total liabilities	530,968	479,639
Commitments and contingencies (Note 14)
Common stock, par value $.001 per share; authorized 100,000,000; issued 23,042,492 and 22,984,608; outstanding 19,691,124 and 19,613,085 shares	20	20
Paid-in capital	146,107	142,558
Common stock held in treasury, at cost (3,351,368 and 3,371,523 shares)	(177,097)	(176,862)
Retained earnings	375,960	372,815
Accumulated other comprehensive loss	(5,803)	(3,016)
Total stockholders' equity	339,187	335,515
Total liabilities and stockholders' equity	$ 870,155	$ 815,154

XML

Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Statement of Financial Position [Abstract]
Allowance for doubtful accounts	$ 852	$ 688
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized	100,000,000	100,000,000
Common stock, shares issued	23,042,492	22,984,608
Common stock, shares outstanding	19,691,124	19,613,085
Treasury stock, shares held	3,351,368	3,371,523

XML

Condensed Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Statement of Comprehensive Income [Abstract]
Net sales	$ 185,038	$ 206,725	$ 376,452	$ 412,165
Cost of goods sold	148,646	170,340	303,648	333,553
Gross profit	36,392	36,385	72,804	78,612
Operating expenses:
Selling, general and administrative	20,261	22,503	39,703	45,023
Research & development expenses	1,232	1,338	2,572	2,749
Total operating expenses	21,493	23,841	42,275	47,772
Operating income	14,899	12,544	30,529	30,840
Interest expense, net	3,887	3,198	7,589	6,102
Foreign exchange (gain) loss	(470)	1,136	(851)	940
Other (income), net	(8)	(13)	(11)	(28)
Income before income taxes	11,490	8,223	23,802	23,826
Provision for income taxes	10,089	1,977	13,707	6,665
Net income	1,401	6,246	10,095	17,161
Net income attributable to participating common shareholders	$ 1,381	$ 6,213	$ 10,057	$ 17,106
Income per participating share:
Basic (in dollars per share)	$ 0.07	$ 0.32	$ 0.51	$ 0.88
Diluted (in dollars per share)	$ 0.07	$ 0.31	$ 0.51	$ 0.87
Weighted average participating shares outstanding:
Basic (in shares)	19,572,648	19,505,877	19,571,742	19,503,755
Diluted (in shares)	19,776,845	19,818,883	19,715,907	19,765,971
Other comprehensive income (loss), net of tax:
Change in interest rate swaps, (net of tax of $466, $0, $691, and $0)	$ (1,397)	$ 0	$ (2,073)	$ 0
Change in pension and post-retirement plans, (net of tax of $15, ($30), $32, and $213)	(662)	94	(714)	483
Other comprehensive income (loss), net of tax	(2,059)	94	(2,787)	483	[1]
Comprehensive (loss) income	$ (658)	$ 6,340	$ 7,308	$ 17,644

[1] Includes the impact of ASU 2018-02, which transferred those amounts from accumulated other comprehensive income (loss) to retained earnings. See Note 16 to the Condensed Consolidated Financial Statements.

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Condensed Consolidated Statements of Comprehensive Income (Unaudited) (Parenthetical) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Statement of Comprehensive Income [Abstract]
Tax amounts related to changes in interest rate swaps	$ 466	$ 0	$ 691	$ 0
Tax amounts related to changes in pension and post-retirement plans	$ 15	$ (30)	$ 32	$ 213

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Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018
Cash flows provided by operating activities
Net income	$ 10,095	$ 17,161
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	20,646	22,453
Amortization of deferred financing charges	215	215
Deferred income tax provision	208	97
Dutch income tax liability	6,603	0
Share-based compensation	3,567	2,992
Changes in assets and liabilities:
Accounts receivable	3,607	(8,110)
Inventories	7,748	(13,136)
Other current assets	(12,918)	(4,481)
Accounts payable	(24,129)	(2,692)
Other current liabilities	4,226	(718)
Other long-term assets and liabilities, net	(3,087)	(4,224)
Net cash provided by operating activities	16,781	9,557
Cash flows used for investing activities:
Capital expenditures	(15,837)	(26,475)
Net cash used for investing activities	(15,837)	(26,475)
Cash flows provided by financing activities:
Long-term debt borrowings	37,000	61,000
Long-term debt repayments	(7,000)	(41,000)
Restricted stock forfeitures	(235)	(251)
Dividends paid	(18,866)	(18,782)
Net cash provided by financing activities	10,899	967
Effect of foreign exchange rate changes on cash and cash equivalents	0	(559)
Net change in cash	11,843	(16,510)
Cash and cash equivalents at beginning of period	20,197	28,782
Cash and cash equivalents at end of period	32,040	12,272
Non-cash investing and financing activities:
Accrued additions to plant assets	$ 4,824	$ 12,121

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Statement of Stockholders' Equity (Unaudited) - USD ($) shares in Thousands, $ in Thousands		Total	Common Stock	Retained Earnings (Deficit)	Paid-in Capital / Common stock held in treasury	Accumulated Other Comprehensive Income/(Loss)
Beginning balance (in shares) at Dec. 31, 2017			19,538
Beginning balance at Dec. 31, 2017		$ 333,559	$ 20	$ 374,366	$ (38,629)	$ (2,198)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income		17,161		17,161
Other comprehensive income, (net of tax)	[1]	483				483
Effects of U.S. enacted Tax Cuts and Jobs Act	[1]	(293)		(293)
Effect of adoption | Accounting Standards Update 2016-16		360		360
Equity-based compensation plans (in shares)			68
Equity-based compensation		2,535			2,535
Dividends declared ($0.96 per share)	[2]	(18,835)		(18,835)
Ending balance (in shares) at Jun. 30, 2018			19,606
Ending balance at Jun. 30, 2018		334,970	$ 20	372,759	(36,094)	(1,715)
Beginning balance at Mar. 31, 2018						(1,809)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income		6,246
Other comprehensive income, (net of tax)		94
Ending balance (in shares) at Jun. 30, 2018			19,606
Ending balance at Jun. 30, 2018		334,970	$ 20	372,759	(36,094)	(1,715)
Beginning balance (in shares) at Dec. 31, 2018			19,613
Beginning balance at Dec. 31, 2018		335,515	$ 20	372,815	(34,304)	(3,016)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income		10,095		10,095
Other comprehensive income, (net of tax)		(2,787)				(2,787)
Effect of adoption | Accounting Standards Update 2016-02	[3]	11,897		11,897
Equity-based compensation plans (in shares)			78
Equity-based compensation		3,314			3,314
Dividends declared ($0.96 per share)	[4]	(18,847)		(18,847)
Ending balance (in shares) at Jun. 30, 2019			19,691
Ending balance at Jun. 30, 2019		339,187	$ 20	375,960	(30,990)	(5,803)
Beginning balance at Mar. 31, 2019						(3,744)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income		1,401
Other comprehensive income, (net of tax)		(2,059)
Ending balance (in shares) at Jun. 30, 2019			19,691
Ending balance at Jun. 30, 2019		$ 339,187	$ 20	$ 375,960	$ (30,990)	$ (5,803)

[1] Includes the impact of ASU 2018-02, which transferred those amounts from accumulated other comprehensive income (loss) to retained earnings. See Note 16 to the Condensed Consolidated Financial Statements.

[2] $0.48 per share declared February 2018 and May 2018

[3] On the transition to ASC 842 effective January 1, 2019, a deferred gain (net of taxes) related to a sale leaseback transaction was credited to Retained Earnings. See Note 8 to the Condensed Consolidated Financial Statements.

[4] $0.48 per share declared February 2019 and April 2019

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Statement of Stockholders' Equity (Unaudited) (Parenthetical) - USD ($) $ in Thousands	1 Months Ended				6 Months Ended
	May 31, 2019	Feb. 28, 2019	May 31, 2018	Feb. 28, 2018	Jun. 30, 2019	Jun. 30, 2018
Other comprehensive income (loss), tax					$ 723	$ 213
Dividends declared (in dollars per share)	$ 0.48	$ 0.48	$ 0.48	$ 0.48	$ 0.96	$ 0.96
Retained Earnings (Deficit)
Tax impact of adoption of ASC 842					$ 3,966

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Basis of Statement Presentation

6 Months Ended

Jun. 30, 2019

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Statement Presentation

Basis of Statement Presentation

Summary of Significant Accounting Policies

The accompanying unaudited condensed consolidated financial statements of Innophos have been prepared in accordance with generally accepted accounting principles in the United States of America, or U.S. GAAP, for interim financial reporting and do not include all disclosures required by U.S. GAAP for annual financial reporting, and should be read in conjunction with the audited consolidated and combined financial statements of the Company at December 31, 2018 and for the three years then ended.

The accompanying unaudited condensed consolidated financial statements of the Company reflect all adjustments which management considers necessary for a fair statement of the results of operations for the interim periods and is subject to year-end adjustments. The results of operations for the interim periods are not necessarily indicative of the results for the full year. The December 31, 2018 condensed balance sheet data was derived from audited financial statements, but does not include all disclosures required by U.S. GAAP.

Error Correction 

During the fourth quarter of 2018, the Company identified an error associated with disclosing 2018 accrued capital expenditures and adjusting for them as non-cash investing activities in the Condensed Consolidated Statements of Cash Flows. The Company has evaluated the materiality of the error and concluded it was not material to any of the previously issued consolidated financial statements. However, the Company has elected to revise its consolidated cash flow statement for the period ending June 30, 2018 to correct the error.

The following table presents the effect of the revision on the selected line items previously reported in the consolidated cash flows statement for the six months ended June 30, 2018:

	June 30, 2018						June 30, 2018
Consolidated Statement of Cash Flows	As reported			Adjustment			As revised
Cash flows from operating activities
Changes in assets and liabilities:
Accounts payable	$	(141	)	$	(2,551	)	$	(2,692	)
Net cash provided by (used for) operations	$	12,108		$	(2,551	)	$	9,557
Cash flows used for investing activities
Capital expenditures	$	(29,026	)	$	2,551		$	(26,475	)
Net cash (used for) investing activities	$	(29,026	)	$	2,551		$	(26,475	)
Supplemental disclosures of cash flow information:
Non-cash investing and financing activities
Accrued additions to plant assets				$	12,121		$	12,121

These accompanying notes to the consolidated financial statements reflect the impact of this revision. The revision of the Company’s interim Condensed Consolidated Statements of Cash Flows in the previously issued unaudited condensed consolidated financial statements for the nine months ended September 30, 2018 will be effected in connection with the Company’s filing of its Form 10-Q for the quarter ended September 30, 2019.

During the second quarter of 2019, the Company identified and corrected errors related to the valuation of its inventory located at one of its domestic subsidiaries and the translation of Accumulated other comprehensive income (loss) related to pension and post retirement obligations at a foreign subsidiary. The adjustments decreased Cost of goods sold by $3.1 million and Foreign exchange (gain) loss by $0.7 million resulting in an increase to income before income taxes of approximately $3.8 million in the three month period ended June 30, 2019 and increased the Inventory balance by $3.1 million and decreased Accumulated other comprehensive income before income taxes by $0.7 million as of June 30, 2019.

Approximately $1.2 million of the cumulative adjustment should have been recorded during the first quarter of 2019 and the remaining $2.6 million related to prior periods. Management has concluded that these adjustments are not material to the periods presented or any of its previously issued financial statements, and are not expected to be material to the full year 2019 results.

Recently Issued Accounting Standards

Adopted

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), in order to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet for those leases classified as operating leases under previous GAAP. ASU 2016-02 requires that a lessee should recognize a liability to make lease payments (the lease liability) and a right-of-use asset (ROU asset) representing its right to use the underlying asset for the lease term on the balance sheet. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018 (including interim periods within those periods) using a modified retrospective approach and early adoption is permitted. In July 2018, the FASB issued updated guidance which allows an additional transition method to adopt the new leases standard at the adoption date, as compared to the beginning of the earliest period presented, and recognize a cumulative-effect adjustment to the beginning balance of retained earnings in the period of adoption (the effective date method). The Company adopted this standard as of January 1, 2019, and has elected the effective date method. The Company also elected the package of practical expedients, which among other things, does not require reassessment of prior conclusions to contracts containing a lease, lease classification, and initial direct costs. As an accounting policy election, the Company will exclude short-term leases (term of 12 months or less) from the balance sheet. The Company's lease agreements do not contain any residual value guarantees. Please see Note 8, "Leases", for further disclosures.

In August 2017, the FASB issued ASU No. 2017-12, Derivatives and hedging (Topic 815): Targeted improvements to accounting for hedging activities. This standard more closely aligns the results of cash flow and fair value hedge accounting with risk management activities through changes to both the designation and measurement guidance for qualifying hedging relationships and the presentation of hedge results in the financial statements. This standard also addresses specific limitations in current GAAP by expanding hedge accounting for both nonfinancial and financial risk components and by refining the measurement of hedge results to better reflect an entity’s hedging strategies. Additionally, by aligning the timing of recognition of hedge results with the earnings effect of the hedged item for cash flow and net investment hedges, and by including the earnings effect of the hedging instrument in the same income statement line item in which the earnings effect of the hedged item is presented, the results of an entity’s hedging program and the cost of executing that program will be more visible to users of financial statements. The new standard is effective for annual reporting periods beginning after December 15, 2018 with early adoption permitted. The Company adopted this standard on January 1, 2019, and there was no material impact on its financial position, results of operations and related disclosures.

Issued but not yet adopted

In August 2018, the FASB issued ASU No. 2018-14, Compensation - Retirement Benefits - Defined Benefit Plans - General (Topic 715-20), Disclosure Framework - Changes to the Disclosure Requirements for Defined Benefit Plans. This amendment modifies the disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans by removing and adding certain disclosures for these plans. The eliminated disclosures include the amounts in accumulated other comprehensive income expected to be recognized in net periodic benefit costs over the next fiscal year and the effects of a one-percentage-point change in assumed health care cost trend rates on the net periodic benefit costs and the benefit obligation for postretirement health care benefits. New disclosures include the interest crediting rates for cash balance plans, and an explanation of significant gains and losses related to changes in benefit obligations. The new standard is effective for fiscal years beginning after December 15, 2020, and must be applied retrospectively for all periods presented. Early adoption is permitted. The Company does not anticipate the adoption of this standard will have a material impact on its financial position, results of operations and related disclosures.

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Revenue Recognition

6 Months Ended

Jun. 30, 2019

Revenue from Contract with Customer [Abstract]

Revenue Recognition

Revenue Recognition

Revenues are recognized when control of goods is transferred to customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods. Control passes either upon shipment or delivery, depending on the agreed sales terms with customers.

Certain customers may receive cash-based incentives or credits, which are accounted for as variable consideration. The Company estimates these amounts based on the expected amount to be provided to customers and reduce revenues recognized. There were no significant changes to its estimates of variable consideration upon adoption.

The Company reports its business in three operating segments: Food, Health, and Nutrition; Industrial Specialties; and Other. The Company has three principal product lines within these operating segments: (i) Specialty Ingredients; (ii) Core Ingredients; and (iii) Co-Products and Other. Revenue recognition is measured on the same basis across these segments, products, markets, and geographic countries, with the performance obligation being the transfer of control of goods at a single point in time.

	Three Months Ended June 30, 2019
	U.S.		Canada		Mexico		Other Countries		Total
Specialty Ingredients	$	93,335	$	3,899	$	9,034	$	19,700	$	125,968
Core Ingredients	15,982		2,444		23,369		6,656		48,451
Co-Products & Other	5,395		73		4,939		212		10,619
Total	$	114,712	$	6,416	$	37,342	$	26,568	$	185,038

	Three Months Ended June 30, 2018
	U.S.		Canada		Mexico		Other Countries		Total
Specialty Ingredients	$	112,614	$	6,441	$	9,101	$	20,425	$	148,581
Core Ingredients	12,274		2,244		22,339		9,456		46,313
Co-Products & Other	5,488		68		5,849		426		11,831
Total	$	130,376	$	8,753	$	37,289	$	30,307	$	206,725

	Six Months Ended June 30, 2019
	U.S.		Canada		Mexico		Other Countries		Total
Specialty Ingredients	$	193,863	$	9,177	$	17,466	$	39,378	$	259,884
Core Ingredients	31,068		4,695		45,978		11,471		93,212
Co-Products & Other	17,766		219		5,088		283		23,356
Total	$	242,697	$	14,091	$	68,532	$	51,132	$	376,452

	Six Months Ended June 30, 2018
	U.S.		Canada		Mexico		Other Countries		Total
Specialty Ingredients	$	227,398	$	12,279	$	16,718	$	39,829	$	296,224
Core Ingredients	28,689		4,244		39,982		19,214		92,129
Co-Products & Other	14,195		133		9,057		427		23,812
Total	$	270,282	$	16,656	$	65,757	$	59,470	$	412,165

Revenues for the geographic information are attributed to geographic areas based on the destination of the sale.

The Company's payment terms vary by geography and location of its customer and the products offered. Invoices are generated upon shipment of the goods, with the term between invoicing and when payment is due being insignificant.

Food, Health, and Nutrition and Industrial Specialties

The Food, Health and Nutrition reporting segment, as well as the Industrial Specialties reporting segment, consists of products in the Specialty Ingredients and Core Ingredients product lines.

Specialty Ingredients are the most value adding products in our portfolio. Specialty Ingredients consist of specialty phosphate products, specialty phosphoric acids, including polyphosphoric acid, and a range of other mineral, enzyme and botanical based specialty ingredients. The Company's Specialty Ingredients products have a wide range of applications, including:

• flavor enhancers in beverages;

• electrolytes in sports drinks;

• texture modifiers in cheeses;

• leavening agents in baked goods;

• calcium and phosphorus fortification in food and beverages;

• moisture and color retention in seafood, poultry and meat;

• mineral, enzyme and botanical sources for a wide variety of fortified foods, beverages and dietary supplements;

• excipients in vitamins, minerals, nutritional supplements and pharmaceuticals; and

• abrasives in toothpaste.

Each product typically has a number of different applications and end uses. For example, the Company's dicalcium phosphate product can be used as an excipient for pharmaceutical and dietary supplements, a leavening agent in bakery products and as an abrasive in oral care products. The Company often works directly with customers to tailor products to their required specifications for their finished product application.

The Company's Core Ingredients product line includes food grade purified phosphoric acid, or PPA, technical grade PPA, sodium tripolyphosphate, or STPP, and detergent grade PPA. Food grade PPA can be used to produce phosphate salts and has a variety of applications in food and beverages. Technical grade PPA has applications in water treatment. The Company also sells technical grade PPA in the merchant market to third-party phosphate derivative producers. STPP is a key ingredient in cleaning products, including industrial and institutional cleaners and automatic dishwashing detergents and consumer laundry detergents outside the United States. In addition to its use in cleaning products, STPP is also used in water treatment, clay processing, and copper ore processing. The end use market for STPP is largely derived from consumer product applications. Detergent Grade PPA is a lower grade form of PPA used primarily in the production of STPP.

Other

The Other reporting segment consists of products in the Co-Products and Other product line.

The Company's Co-Products and Other product line includes granular triple super phosphate, or GTSP, and merchant green phosphoric acid, or MGA. GTSP is generated at the Company's Coatzacoalcos facility in Mexico as a co-product of its purified wet acid manufacturing process. GTSP is a fertilizer product used throughout Latin America for increasing crop yields in a wide range of agricultural sectors. The Company sells MGA in the merchant market to third party manufacturers of fertilizer products.

Practical Expedients and Exemptions

Management reviewed the practical expedients which a Company may utilize when implementing Topic 606 - Revenue from Contracts with Customers. As such, the Company has applied the practical expedient related to significant financing components and does not disclose the value of unsatisfied performance obligations for contracts with an original expected length of one year or less.

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Earnings per Share (EPS)

6 Months Ended

Jun. 30, 2019

Earnings Per Share [Abstract]

Earnings per Share (EPS)

Earnings per Share (EPS)

The Company accounts for earnings per share in accordance with ASC 260 and related guidance, which requires two calculations of earnings per share (EPS) to be disclosed: basic EPS and diluted EPS. Under ASC Subtopic 260-10-45, as of January 1, 2009 unvested awards of share-based payments with rights to receive dividends or dividend equivalents, such as restricted stock, are considered participating securities for purposes of calculating EPS. Under the two-class method, a portion

of net income is allocated to these participating securities and therefore is excluded from the calculation of EPS allocated to common stock, as shown in the table below.

The numerator for basic and diluted earnings per share is net earnings attributable to shareholders reduced by dividends attributable to unvested shares. The denominator for basic earnings per share is the weighted average number of common stock outstanding during the period. The denominator for diluted earnings per share is weighted average shares outstanding adjusted for the effect of dilutive outstanding stock options, performance share awards and restricted stock awards.

The following is a reconciliation of the weighted average basic number of common shares outstanding to the diluted number of common and common stock equivalent shares outstanding and the calculation of earnings per share using the two-class method:

	Three Months Ended						Six Months Ended
	June 30, 2019			June 30, 2018			June 30, 2019			June 30, 2018
Net income	$	1,401		$	6,246		$	10,095		$	17,161
Less: earnings attributable to unvested shares	(20		)	(33		)	(38		)	(55		)
Net income available to participating common shareholders	$	1,381		$	6,213		$	10,057		$	17,106
Weighted average number of participating common and potential common shares outstanding:
Basic number of participating common shares outstanding	19,572,648			19,505,877			19,571,742			19,503,755
Dilutive effect of stock equivalents	204,197			313,006			144,165			262,216
Diluted number of weighted average participating common shares outstanding	19,776,845			19,818,883			19,715,907			19,765,971
Earnings per participating common share:
Earnings per participating common share—Basic	$	0.07		$	0.32		$	0.51		$	0.88
Earnings per participating common share—Diluted	$	0.07		$	0.31		$	0.51		$	0.87
Total outstanding options, performance share awards and unvested restricted stock not included in the calculation of diluted earnings per share as the effect would be anti-dilutive	867,092			468,773			924,886			519,563

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Stockholders' Equity / Share-Based Compensation

6 Months Ended

Jun. 30, 2019

Share-based Payment Arrangement [Abstract]

Stockholders' Equity / Share-Based Compensation

Stockholders’ Equity / Share-Based Compensation

The following table summarizes the components of share-based compensation expense, all of which has been classified as selling, general and administrative expense:

	Three Months Ended				Six Months Ended
	June 30, 2019		June 30, 2018		June 30, 2019		June 30, 2018
Stock options	$	485	$	538	$	802	$	884
Restricted stock	745		755		1,272		1,280
Performance shares	850		122		793		249
Stock grants	700		579		700		579
Total share-based compensation expense	$	2,780	$	1,994	$	3,567	$	2,992

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Inventories

6 Months Ended

Jun. 30, 2019

Inventory Disclosure [Abstract]

Inventories

Inventories

Inventories consist of the following:

	June 30, 2019		December 31, 2018
Raw materials	$	43,018	$	46,147
Finished products (a)	114,293		119,407
Spare parts	15,144		14,649
	$	172,455	$	180,203

(a) The balance as of June 30, 2019 includes a $3.1 million increase related to a cumulative adjustment of capitalized variances.

Inventory reserves for excess quantities, obsolescence or shelf-life expiration as of June 30, 2019 and December 31, 2018 were $16,490 and $14,327, respectively.

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Other Current Assets

6 Months Ended

Jun. 30, 2019

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]

Other Current Assets

Other Current Assets

Other current assets consist of the following:

	June 30, 2019		December 31, 2018
Creditable taxes (value added taxes)	$	14,405	$	11,944
Vendor inventory deposits (prepaid)	3,108		454
Prepaid income taxes	16,461		6,658
Prepaid insurance	797		2,605
Other	2,241		2,433
	$	37,012	$	24,094

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Goodwill

6 Months Ended

Jun. 30, 2019

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill

Goodwill

The following table provides a reconciliation of the carrying amount of goodwill at the beginning and end of the reporting period (in thousands):

	Food, Health and Nutrition		Industrial Specialties		Other		Total
Balance: January 1, 2019	$	129,484	$	23,283	$	—	$	152,767
Balance: June 30, 2019	$	129,484	$	23,283	$	—	$	152,767

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Leases

6 Months Ended

Jun. 30, 2019

Leases [Abstract]

Lessee, Operating Leases [Text Block]

Leases

The Company determines if an arrangement is a lease at inception. Lease Right of Use, or ROU, assets and noncurrent lease liabilities are presented as distinct accounts in the Condensed Consolidated Balance Sheet. Current lease liabilities are included within Other current liabilities in the Condensed Consolidated Balance Sheet. The Company does not have any Finance leases. ROU assets represent the right to use an underlying asset for the lease term and lease liabilities represent the obligation to make lease payments arising from the lease. ROU assets and liabilities are recognized at the lease commencement date based on the estimated present value of lease payments over the lease term. The Company uses its estimated incremental borrowing rate, which is derived from information available at the lease commencement date, in determining the present value of lease payments, as the implicit rate is not readily determinable. The Company gives consideration to publicly available data for instruments with similar characteristics when calculating its incremental borrowing rates. The lease term includes options to extend the lease when it is reasonably certain that the Company will exercise that option. Leases with a term of 12 months or less are not recorded on the balance sheet. Certain leases include one or more options to renew, with renewal terms that can extend the lease up to five years and certain leases also include options to purchase the leased property. We include options that we are reasonably certain to exercise in our evaluation of the lease term after considering all relevant economic and financial factors. We have lease agreements with lease and non-lease components, which are generally accounted for as a single lease component.

The Company primarily leases rail cars, inventory tanks, buildings, equipment, and fleet cars. The Company recorded ROU assets of $48.8 million and lease liabilities of $48.9 million, respectively at January 1, 2019. The impact to the Company's Condensed Consolidated Statement of Comprehensive Income and Condensed Consolidated Statement of Cash Flows was not material. As of June 30, 2019, the Company had 43 leases, with remaining terms ranging from less than one year to 20 years.

Under one of its warehousing agreements with third-party service providers, the Company controls the amount, timing, placing, and removing of items for the entire capacity of the warehouse. Therefore the Company controls the asset, and

the warehouse is deemed to be leased for accounting purposes. For this warehousing agreement, the Company accounts for the lease and non-lease components separately. The lease component consists of the warehouse and the non-lease components consist of services, such as loading, unloading, and maintenance. The Company allocates the consideration in the warehousing agreement to the lease and non-lease components using their relative standalone prices.

In December 2018, the Company sold its Chicago Heights, IL warehouse for $23.0 million. Under the agreement, the Company is leasing back the property from the purchaser over a period of 20 years. The Company is accounting for the leaseback as an operating lease. The annual rent for the initial period of five years is approximately $1.5 million plus taxes and subsequently will increase 10% every five years through the end of the lease. Prior to the adoption of the new lease standard, gains on sale-leaseback transactions were deferred and recognized in the statement of comprehensive income over the lease term. Under the new lease standard, gains on sale-leaseback transactions (subject to adjustment for off-market terms) are recognized immediately. Therefore, the sale-leaseback gain of $11.9 million (net of tax of $4.0 million) was deferred as of December 31, 2018 and on the transition to ASC 842 effective January 1, 2019, was reclassed to retained earnings.

The components of lease expense were as follows:

	Three months ended		Six months ended
	June 30, 2019		June 30, 2019
Operating lease expense:
Cost of goods sold	$	1,556	$	2,992
Selling, general and administrative	941		1,808
Total lease expense	$	2,497	$	4,800

Supplemental balance sheet information related to the leases were as follows:

	June 30, 2019
Operating lease ROU assets	$	51,604
Current operating lease liabilities	$	6,328
Noncurrent operating lease liabilities	45,478
Total operating lease liabilities	$	51,806

Supplemental cash flow and other information related to the leases were as follows:

	Six months ended
	June 30, 2019
Cash paid for amounts included in the measurement of operating lease liabilities	$	4,694
ROU assets obtained in exchange for new operating lease liabilities	$	6,230

	June 30, 2019
Weighted average remaining lease term of operating leases (in years)	11
Weighted average discount rate of operating leases	5.35	%

Maturities of lease liabilities were as follows:

	June 30, 2019
2019	$	4,742
2020	8,140
2021	7,320
2022	6,793
2023	6,175
2024 and thereafter	38,195
Total lease payments	$	71,365
Less: imputed interest	19,559
Total lease obligations	$	51,806
Less: current obligations	6,328
Long-term lease obligations	$	45,478

As required by ASC 842, the future minimum operating lease payments on non-cancelable leases as of December 31, 2018 under the accounting standards in effect as of that period were as follows:

	December 31, 2018
2019	$	8,259
2020	7,130
2021	6,490
2022	6,032
2023	5,467
2024 and thereafter	33,957
Long-term lease obligations	$	67,335

In July 2019, the Company executed an agreement to exercise its option to renew the lease on its Cranbury, NJ headquarters for a period of five years beginning January 1, 2020. The Company will account for this lease modification as a change in lease term. The Company will remeasure the lease obligation and related ROU asset in July 2019, which will result in an increase in each account of approximately $5.9 million.

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Intangibles and Other Assets, net

6 Months Ended

Jun. 30, 2019

Intangible Assets and Other Noncurrent Assets, Net [Abstract]

Intangibles and Other Assets, net

Intangibles and Other Assets, net

Intangibles and other assets consist of the following:

	Useful life (years)	June 30, 2019		December 31, 2018
Developed technology and application patents, net of accumulated amortization of $35,991 for 2019 and $34,669 for 2018	7-20	$	10,284	$	11,606
Customer relationships, net of accumulated amortization of $30,916 for 2019 and $28,032 for 2018	5-20	64,597		67,479
Trade names and license agreements, net of accumulated amortization of $15,870 for 2019 and $14,599 for 2018	5-20	11,691		12,962
Non-compete agreements, net of accumulated amortization of $1,332 for 2019 and $1,319 for 2018	3-10	1		14
Total intangibles, net		$	86,573	$	92,061
Deferred financing costs, net of accumulated amortization of $4,546 for 2019 and $4,331 for 2018 (see Note 11)		$	1,076	$	1,291
Other assets		2,322		1,742
Total other assets, net		$	3,398	$	3,033
		$	89,971	$	95,094

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Other Current Liabilities

6 Months Ended

Jun. 30, 2019

Other Liabilities Disclosure [Abstract]

Other Current Liabilities

Other Current Liabilities

Other current liabilities consist of the following:

	June 30, 2019		December 31, 2018
Payroll related	$	14,342	$	15,656
Operating lease liabilities	6,328		—
Taxes other than income taxes	1,841		3,071
Benefits and pensions	5,257		5,680
Freight and rebates	3,759		6,431
Income taxes	15,516		1,355
Restructuring reserve	—		217
Deferred gain on sale leaseback transaction (a)	—		790
Deferred contract termination (b)	9,623		9,489
Other	11,327		7,304
	$	67,993	$	49,993

(a) See Note 8 to the Consolidated Financial Statements for further details.

(b) See Note 18 to the Consolidated Financial Statements for further details.

Other Long-Term Liabilities

Other long-term liabilities consist of the following:

	June 30, 2019		December 31, 2018
Deferred income taxes	$	8,570	$	5,113
Pension and post retirement liabilities	9,632		9,238
Uncertain tax positions	320		320
Environmental liabilities	1,100		1,100
Deferred gain on sale leaseback transaction (a)	—		15,073
Deferred contract termination fee (b)	10,425		15,371
Interest rate hedge	3,787		1,023
Other liabilities	2,366		2,401
	$	36,200	$	49,639

(a) See Note 8 to the Consolidated Financial Statements for further details.

(b) See Note 18 to the Consolidated Financial Statements for further details.

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Short-Term Borrowings, Long-Term Debt, and Interest Expense

6 Months Ended

Jun. 30, 2019

Debt Disclosure [Abstract]

Short-Term Borrowings, Long-Term Debt, and Interest Expense

Short-Term Borrowings, Long-Term Debt, and Interest Expense

Short-term borrowings and long-term debt consist of the following:

 

	June 30, 2019		December 31, 2018
Revolver borrowings under the credit facility due 2021	$	330,000	$	300,000
Long-term debt	$	330,000	$	300,000

The Company's credit facility includes a revolving line of credit from the lenders of up to $450.0 million, including a $20.0 million letter of credit sub-facility and a $20.0 million swingline loan facility, all maturing on December 22, 2021. The credit agreement governing this facility also provides for possible additional revolving indebtedness under an incremental facility of up to $150.0 million (for an aggregate of revolving capacity up to $600.0 million) upon future request by the Company to existing lenders (and depending on their consent) or from other willing financial institutions invited by the Company and reasonably acceptable to the administrative agent to join in the credit agreement. This revolving credit facility increase, if implemented, may provide for higher applicable margins to either the increased portion or possibly the entire revolving credit facility, with limitations, than those in effect for the original revolving commitments under the credit agreement.

As of June 30, 2019, $330.0 million was outstanding under the revolving line of credit, which approximates fair value (determined using level 2 inputs within the fair value hierarchy) with total availability at $119.5 million, taking into account $0.5 million in face amount of letters of credit issued under the sub-facility. The current weighted average interest rate for all debt is 4.6%.

Among its affirmative covenants, the credit agreement governing this credit facility requires the Company to maintain the following consolidated ratios (as defined and calculated according to the credit agreement) as of the end of each fiscal quarter:

(a) “Total Leverage Ratio” less than or equal to 3.50 to 1.00.

(b) “Interest Coverage Ratio” greater than or equal to 3.00 to 1.00.

As of June 30, 2019, the Company was in full compliance with all debt covenant requirements.

Based on $180.0 million outstanding borrowings as floating rate debt, an immediate increase of one percentage point would cause an increase to interest expense of approximately $1.8 million per year.

Total interest paid by the Company for all indebtedness for the six months ended June 30, 2019 and June 30, 2018 was $7.6 million and $6.8 million, respectively.

Interest expense, net consists of the following:

	Three months ended						Six months ended
	June 30, 2019			June 30, 2018			June 30, 2019			June 30, 2018
Interest expense	$	3,924		$	3,482		$	7,624		$	6,578
Deferred financing cost	108			107			215			215
Interest income	(36		)	(12		)	(63		)	(32		)
Less: amount capitalized for capital projects	(109		)	(379		)	(187		)	(659		)
Total interest expense, net	$	3,887		$	3,198		$	7,589		$	6,102

In December 2018, the Company entered into an interest rate swap, swapping the LIBOR exposure of $150.0 million of floating rate debt, which is currently outstanding under our Credit Agreement, to a fixed rate to maturity obligation of 2.677% expiring in November 2021.

The Company manages interest rate risk by balancing the amount of fixed-rate and floating-rate debt to the extent practicable consistent with the credit status.

The table below presents the fair value of the Company's derivative financial instruments as well as their classification in the Consolidated Balance Sheets as of June 30, 2019 and December 31, 2018.

Tabular Disclosure of Fair Values of Derivative Instruments
		Fair value as of
Derivatives designated as hedging instruments	Balance Sheet Location	June 30, 2019		December 31, 2018
Interest Rate Contract	Other Long-Term Liabilities	$	3,787	$	1,023
		$	3,787	$	1,023

The table below presents the effect of the Company’s derivative financial instruments in the Consolidated Statements of Operations and AOCI for the three and six months ended June 30, 2019 and June 30, 2018.

Tabular Disclosure of the Effect of Derivative Instruments
Derivatives in Cash Flow Hedging Relationships	Amount of Gain/(Loss) Recognized in AOCI on Derivative			Location of Gain/(Loss) Reclassified from AOCI into Income	Amount of Gain/(Loss) Reclassified from AOCI into Income
Interest Rate Contract	$	(1,862	)	Interest Income/(Expense)	$	(77	)
Three months ended June 30, 2019	$	(1,862	)		$	(77	)
Interest Rate Contract	$	(2,763	)	Interest Income/(Expense)	$	(140	)
Six months ended June 30, 2019	$	(2,763	)		$	(140	)
Interest Rate Contract	$	—		Interest Income/(Expense)	$	—
Three months ended June 30, 2018	$	—			$	—
Interest Rate Contract	$	—		Interest Income/(Expense)	$	—
Six months ended June 30, 2018	$	—			$	—

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Other Long-Term Liabilities

6 Months Ended

Jun. 30, 2019

Other Liabilities Disclosure [Abstract]

Other Long-Term Liabilities

Other Current Liabilities

Other current liabilities consist of the following:

	June 30, 2019		December 31, 2018
Payroll related	$	14,342	$	15,656
Operating lease liabilities	6,328		—
Taxes other than income taxes	1,841		3,071
Benefits and pensions	5,257		5,680
Freight and rebates	3,759		6,431
Income taxes	15,516		1,355
Restructuring reserve	—		217
Deferred gain on sale leaseback transaction (a)	—		790
Deferred contract termination (b)	9,623		9,489
Other	11,327		7,304
	$	67,993	$	49,993

(a) See Note 8 to the Consolidated Financial Statements for further details.

(b) See Note 18 to the Consolidated Financial Statements for further details.

Other Long-Term Liabilities

Other long-term liabilities consist of the following:

	June 30, 2019		December 31, 2018
Deferred income taxes	$	8,570	$	5,113
Pension and post retirement liabilities	9,632		9,238
Uncertain tax positions	320		320
Environmental liabilities	1,100		1,100
Deferred gain on sale leaseback transaction (a)	—		15,073
Deferred contract termination fee (b)	10,425		15,371
Interest rate hedge	3,787		1,023
Other liabilities	2,366		2,401
	$	36,200	$	49,639

(a) See Note 8 to the Consolidated Financial Statements for further details.

(b) See Note 18 to the Consolidated Financial Statements for further details.

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Income Taxes

6 Months Ended

Jun. 30, 2019

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The effective income tax rate on income before taxes was approximately 58% for the six months ended June 30, 2019 compared to approximately 28% for the comparable period in 2018. The change in the effective tax rate is primarily due to the Dutch tax matter described below.

In the second quarter of 2019, the Company incurred a Dutch income tax liability of $6.6 million which was recorded in current liabilities. See Note 14 for further information.

Business is conducted in various countries throughout the world and is subject to tax in numerous jurisdictions. A significant number of tax returns are filed and subject to examination by various federal, state and local tax authorities. Tax examinations are often complex, as tax authorities may disagree with the treatment of items reported requiring several years to resolve. As such, the Company maintains liabilities for possible assessments by tax authorities resulting from known tax exposures for uncertain income tax positions. The Company’s policy is to accrue associated penalties in selling, general and administrative expenses and to accrue interest in net interest expense. Currently, the Company is under examination, or has been contacted for examination on income tax returns, for the years 2014 through 2017. During the quarter ended June 30, 2019, the Company's liability for unrecognized tax benefits was unchanged. The Company estimates the liability for unrecognized tax benefits will not change during the next twelve months. Other than the items mentioned above, as of June 30, 2019, no material adjustments have been proposed to the Company's tax positions and the Company currently does not anticipate any adjustments that would result in a material change to its financial position during the next twelve months.

Income taxes paid were $9.0 million and $12.8 million for the six months ended June 30, 2019 and June 30, 2018, respectively.

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Commitments and Contingencies

6 Months Ended

Jun. 30, 2019

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

Environmental

The Company's operations are subject to extensive and changing federal, state, local and international environmental laws, rules and regulations. The Company's manufacturing sites have an extended history of industrial use, and soil and groundwater contamination have or may have occurred in the past and might occur or be discovered in the future.

Environmental efforts are difficult to assess for numerous reasons, including the discovery of new remedial sites, discovery of new information and scarcity of reliable information pertaining to certain sites, improvements in technology, changes in environmental laws and regulations, numerous possible remedial techniques and solutions, difficulty in assessing the involvement of and the financial capability of other potentially responsible parties and the extended time periods over which remediation occurs. Other than the items listed below, the Company is not aware of material environmental liabilities which are probable and estimable. As the Company's environmental contingencies are more clearly determined, it is reasonably possible that amounts may need to be accrued. However, management does not believe, based on current information, that environmental remediation requirements will have a material impact on the Company's results of operations, financial position or cash flows.

Future environmental spending is probable at the Company's site in Nashville, Tennessee, the eastern portion of which had been used historically as a landfill, and a western parcel therein, previously acquired from a third party, which reportedly had housed, but no longer does, a fertilizer and pesticide manufacturing facility. The Company has an estimated liability with a range of $0.9 million-$1.3 million. The remedial action plan for that site has yet to be finalized, and as such, the Company has recorded a liability, which represents the Company's best estimate, of $1.1 million as of June 30, 2019.

Litigation

In 2018, following a review of its global corporate and financing structure, Innophos’ management initiated a global entity simplification plan which included a strategy to merge two of the Company’s Dutch subsidiaries by the end of 2018. The contemplated merger was not completed in 2018 due to an administrative error committed and acknowledged by the Company’s Dutch legal counsel, Heussen B.V ("Heussen"). Such merger was ultimately completed in 2019. On May 17, 2019, changes to Dutch tax law were enacted and as expected, with retroactive effect to January 1, 2018. As a result of these changes in Dutch tax law and the merger of the two Dutch subsidiaries not completed in 2018, the Company incurred in its second quarter 2019 results a Dutch corporate income tax liability of $6.6 million for its 2018 tax year. On July 23, 2019, the Company initiated a malpractice legal proceeding in the Netherlands against Heussen seeking reimbursement for all costs and liabilities resulting from their administrative error, including all related tax liabilities and other associated expenses and damages. Any recovery by the Company in respect of that proceeding will be recorded gross in the period it is received.

In addition, the Company is a party to legal proceedings and contractual disputes that arise in the ordinary course of its business. Except as to the matters specifically discussed, management believes the likelihood that the ultimate disposition of these matters will have a material adverse effect on the Company's business, results of operations, financial condition and/or cash flows is remote. However, these matters cannot be predicted with certainty and an unfavorable resolution of one or more of them could have a material adverse effect on the Company's business, results of operations, financial condition, and/or cash flows.

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Pension Plans and Postretirement Benefits

6 Months Ended

Jun. 30, 2019

Retirement Benefits [Abstract]

Pension Plans and Postretirement Benefits

Pension Plans and Postretirement Benefits

Net periodic benefit expense for the United States plans:

	Three months ended June 30, 2019									Three months ended June 30, 2018
	Pension benefits			Other benefits			Total			Pension benefits			Other benefits			Total
Service cost	$	—		$	36		$	36		$	—		$	37		$	37
Interest cost	26			34			60			23			29			52
Expected return on assets	(39		)	—			(39		)	(37		)	—			(37		)
Amortization of
prior service cost	—			—			—			—			—			—
unrecognized (gain) loss	—			(39		)	(39		)	—			(40		)	(40		)
net transition obligation	—			—			—			—			—			—
Net periodic (benefit) cost	$	(13	)	$	31		$	18		$	(14	)	$	26		$	12
	Six Months Ended June 30, 2019									Six Months Ended June 30, 2018
	Pension benefits			Other benefits			Total			Pension benefits			Other benefits			Total
Service cost	$	—		$	72		$	72		$	—		$	73		$	73
Interest cost	51			68			119			47			58			105
Expected return on assets	(79		)	—			(79		)	(75		)	—			(75		)
Amortization of
prior service cost	—			—			—			—			—			—
unrecognized (gain) loss	—			(78		)	(78		)	—			(80		)	(80		)
net transition obligation	—			—			—			—			—			—
Net periodic cost	$	(28	)	$	62		$	34		$	(28	)	$	51		$	23

Innophos has no minimum contribution requirements and does not plan to make cash contributions for its U.S. defined benefit pension plan in 2019.

Innophos had no minimum contribution requirements and did not make cash contributions for its U.S. defined benefit pension plan in 2018.

Net periodic benefit expense for the Canadian plans:

	Three months ended June 30, 2019								Three months ended June 30, 2018
	Pension benefits			Other benefits		Total			Pension benefits			Other benefits			Total
Service cost	$	97		$	15	$	112		$	109		$	16		$	125
Interest cost	137			15		152			129			14			143
Expected return on assets	(205		)	—		(205		)	(198		)	—			(198		)
Amortization of
actuarial loss (gain)	52			—		52			47			1			48
prior service cost	13			—		13			13			—			13
net transition obligation	—			3		3			—			6			6
Exchange rate changes	(79		)	29		(50		)	100			(34		)	66
Net periodic cost (benefit)	$	15		$	62	$	77		$	200		$	3		$	203
	Six Months Ended June 30, 2019								Six Months Ended June 30, 2018
	Pension benefits			Other benefits		Total			Pension benefits			Other benefits			Total
Service cost	$	190		$	30	$	220		$	222		$	32		$	254
Interest cost	268			30		298			261			29			290
Expected return on assets	(403		)	—		(403		)	(403		)	—			(403		)
Amortization of
actuarial loss (gain)	102			—		102			95			2			97
prior service cost	25			—		25			26			—			26
net transition obligation	—			6		6			—			12			12
Exchange rate changes	(167		)	59		(108		)	218			(73		)	145
Net periodic cost	$	15		$	125	$	140		$	419		$	2		$	421

Innophos Canada, Inc. plans to make cash contributions to its Canadian defined benefit plan of approximately $0.3 million in 2019.

Innophos Canada, Inc. made cash contributions to its Canadian defined benefit plan of approximately $0.7 million in 2018.

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Accumulated Other Comprehensive Income (Loss)

6 Months Ended

Jun. 30, 2019

Equity [Abstract]

Accumulated Other Comprehensive Income (Loss)

Accumulated Other Comprehensive Income (Loss)

Changes in accumulated other comprehensive income (loss) by component:

Three months ended June 30, 2019	Pension and Other Postretirement Adjustments			Changes in Fair Value of Effective Cash Flow Hedges			Total
Balance at March 31, 2019	$	(2,301	)	$	(1,443	)	$	(3,744	)
Other comprehensive (loss) before reclassifications	—			(1,455		)	(1,455		)
Amounts reclassified from accumulated other comprehensive income	(662		)	58			(604		)
Net current period other comprehensive (loss)	(662		)	(1,397		)	(2,059		)
Balance at June 30, 2019	$	(2,963	)	$	(2,840	)	$	(5,803	)
Three months ended June 30, 2018	Pension and Other Postretirement Adjustments			Changes in Fair Value of Effective Cash Flow Hedges			Total
Balance at March 31, 2018	$	(1,809	)	$	—		$	(1,809	)
Other comprehensive income before reclassifications	94			—			94
Amounts reclassified from accumulated other comprehensive income	—			—			—
Net current period other comprehensive income	94			—			94
Balance at June 30, 2018	$	(1,715	)	$	—		$	(1,715	)
Six months ended June 30, 2019	Pension and Other Postretirement Adjustments			Changes in Fair Value of Effective Cash Flow Hedges			Total
Balance at December 31, 2018	$	(2,249	)	$	(767	)	$	(3,016	)
Other comprehensive (loss) before reclassifications	—			(2,178		)	(2,178		)
Amounts reclassified from accumulated other comprehensive income	(714		)	105			(609		)
Net current period other comprehensive (loss)	(714		)	(2,073		)	(2,787		)
Balance at June 30, 2019	$	(2,963	)	$	(2,840	)	$	(5,803	)
Six months ended June 30, 2018	Pension and Other Postretirement Adjustments			Changes in Fair Value of Effective Cash Flow Hedges			Total
Balance at December 31, 2017	$	(2,198	)	$	—		$	(2,198	)
Other comprehensive income before reclassifications	190			—			190
Amounts reclassified from accumulated other comprehensive income	293			—			293
Net current period other comprehensive income	483			—			483
Balance at June 30, 2018	$	(1,715	)	$	—		$	(1,715	)

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Segment Reporting

6 Months Ended

Jun. 30, 2019

Segment Reporting [Abstract]

Segment Reporting

Segment Reporting

The Company discloses certain financial and supplementary information about its reportable segments, revenue by products and revenues by geographic area. Operating segments are defined as components of an enterprise about which separate discrete financial information is evaluated regularly by the chief operating decision maker, in order to decide how to allocate resources and assess performance. The primary performance indicators for the chief operating decision maker are sales and EBITDA (defined as net income (loss) before interest, income taxes, depreciation and amortization). All references to sales in this Quarterly Report on Form 10-Q are recognized when title and risk of loss passes to the customer, which occurs either upon shipment or delivery, depending upon the agreed sales terms with customers.

The Company's chief executive officer is the chief operating decision maker and has determined to assess the Company's performance and allocate the appropriate resources based on the following operating segments: (1) Food, Health and Nutrition; (2) Industrial Specialties; and (3) Other. These reporting segments accurately reflect the underlying business dynamics and align with the strategic direction of the Company.

During the second quarter of 2019, the Company adjusted the EBITDA allocation for certain transactions to align it with the underlying business. As a result, EBITDA in the Other segment decreased by $1.4 million with corresponding increases to Food, Health and Nutrition of $1.0 million and Industrial Specialties of $0.4 million.

Three months ended June 30, 2019	Food, Health and Nutrition		Industrial Specialties		Other			Total
Net sales	$	106,543	$	67,725	$	10,770		$	185,038
EBITDA	$	19,561	$	6,972	$	(270	)	$	26,263
Depreciation and amortization expense	$	6,781	$	3,766	$	339		$	10,886
Three months ended June 30, 2018	Food, Health and Nutrition		Industrial Specialties		Other			Total
Net sales	$	125,664	$	66,751	$	14,310		$	206,725
EBITDA	$	14,939	$	7,794	$	(223	)	$	22,510
Depreciation and amortization expense	$	7,213	$	3,368	$	508		$	11,089
Six months ended June 30, 2019	Food, Health and Nutrition		Industrial Specialties		Other			Total
Net sales	$	221,609	$	130,923	$	23,920		$	376,452
EBITDA	$	33,967	$	15,029	$	3,041		$	52,037
Depreciation and amortization expense	$	13,169	$	6,946	$	531		$	20,646
Six months ended June 30, 2018	Food, Health and Nutrition		Industrial Specialties		Other			Total
Net sales	$	252,027	$	130,101	$	30,037		$	412,165
EBITDA	$	33,931	$	17,886	$	564		$	52,381
Depreciation and amortization expense	$	14,535	$	7,104	$	814		$	22,453

A reconciliation of net income to EBITDA follows:

	Three months ended
	June 30, 2019		June 30, 2018
Net income	$	1,401	$	6,246
Provision for income taxes	10,089		1,977
Interest expense, net	3,887		3,198
Depreciation and amortization	10,886		11,089
EBITDA	$	26,263	$	22,510
	Six months ended
	June 30, 2019		June 30, 2018
Net income	$	10,095	$	17,161
Provision for income taxes	13,707		6,665
Interest expense, net	7,589		6,102
Depreciation and amortization	20,646		22,453
EBITDA	$	52,037	$	52,381

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Supply Agreement Termination

6 Months Ended

Jun. 30, 2019

Commitments and Contingencies Disclosure [Abstract]

Supply Agreement Termination

Supply Agreement Termination

In June 2018, the Company agreed to terminate a previously long-term supply agreement and replaced it with a short-term agreement. In December 2018, as a result of the termination, the Company received consideration of $24.9 million which included $21.3 million in cash as well as receipt of certain tangible assets with a fair value of $3.6 million. The consideration was recorded as a deferred liability with $9.5 million in Other current liabilities and the remaining $15.4 million recorded in Other long-term liabilities. Beginning in January 2019, the deferred liability is being amortized on a straight-line basis through July 2021, which is the end of the new supply agreement, as a reduction of Cost of goods sold. For the three and six months ended June 30, 2019 amortization of the deferred liability was $2.4 million and $4.8 million, respectively.

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Basis of Statement Presentation (Policies)

6 Months Ended

Jun. 30, 2019

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

The accompanying unaudited condensed consolidated financial statements of Innophos have been prepared in accordance with generally accepted accounting principles in the United States of America, or U.S. GAAP, for interim financial reporting and do not include all disclosures required by U.S. GAAP for annual financial reporting, and should be read in conjunction with the audited consolidated and combined financial statements of the Company at December 31, 2018 and for the three years then ended.

The accompanying unaudited condensed consolidated financial statements of the Company reflect all adjustments which management considers necessary for a fair statement of the results of operations for the interim periods and is subject to year-end adjustments. The results of operations for the interim periods are not necessarily indicative of the results for the full year. The December 31, 2018 condensed balance sheet data was derived from audited financial statements, but does not include all disclosures required by U.S. GAAP.

Error Correction 

During the fourth quarter of 2018, the Company identified an error associated with disclosing 2018 accrued capital expenditures and adjusting for them as non-cash investing activities in the Condensed Consolidated Statements of Cash Flows. The Company has evaluated the materiality of the error and concluded it was not material to any of the previously issued consolidated financial statements. However, the Company has elected to revise its consolidated cash flow statement for the period ending June 30, 2018 to correct the error.

The following table presents the effect of the revision on the selected line items previously reported in the consolidated cash flows statement for the six months ended June 30, 2018:

	June 30, 2018						June 30, 2018
Consolidated Statement of Cash Flows	As reported			Adjustment			As revised
Cash flows from operating activities
Changes in assets and liabilities:
Accounts payable	$	(141	)	$	(2,551	)	$	(2,692	)
Net cash provided by (used for) operations	$	12,108		$	(2,551	)	$	9,557
Cash flows used for investing activities
Capital expenditures	$	(29,026	)	$	2,551		$	(26,475	)
Net cash (used for) investing activities	$	(29,026	)	$	2,551		$	(26,475	)
Supplemental disclosures of cash flow information:
Non-cash investing and financing activities
Accrued additions to plant assets				$	12,121		$	12,121

These accompanying notes to the consolidated financial statements reflect the impact of this revision. The revision of the Company’s interim Condensed Consolidated Statements of Cash Flows in the previously issued unaudited condensed consolidated financial statements for the nine months ended September 30, 2018 will be effected in connection with the Company’s filing of its Form 10-Q for the quarter ended September 30, 2019.

During the second quarter of 2019, the Company identified and corrected errors related to the valuation of its inventory located at one of its domestic subsidiaries and the translation of Accumulated other comprehensive income (loss) related to pension and post retirement obligations at a foreign subsidiary. The adjustments decreased Cost of goods sold by $3.1 million and Foreign exchange (gain) loss by $0.7 million resulting in an increase to income before income taxes of approximately $3.8 million in the three month period ended June 30, 2019 and increased the Inventory balance by $3.1 million and decreased Accumulated other comprehensive income before income taxes by $0.7 million as of June 30, 2019.

Approximately $1.2 million of the cumulative adjustment should have been recorded during the first quarter of 2019 and the remaining $2.6 million related to prior periods. Management has concluded that these adjustments are not material to the periods presented or any of its previously issued financial statements, and are not expected to be material to the full year 2019 results.

Recently Issued Accounting Standards

Recently Issued Accounting Standards

Adopted

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), in order to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet for those leases classified as operating leases under previous GAAP. ASU 2016-02 requires that a lessee should recognize a liability to make lease payments (the lease liability) and a right-of-use asset (ROU asset) representing its right to use the underlying asset for the lease term on the balance sheet. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018 (including interim periods within those periods) using a modified retrospective approach and early adoption is permitted. In July 2018, the FASB issued updated guidance which allows an additional transition method to adopt the new leases standard at the adoption date, as compared to the beginning of the earliest period presented, and recognize a cumulative-effect adjustment to the beginning balance of retained earnings in the period of adoption (the effective date method). The Company adopted this standard as of January 1, 2019, and has elected the effective date method. The Company also elected the package of practical expedients, which among other things, does not require reassessment of prior conclusions to contracts containing a lease, lease classification, and initial direct costs. As an accounting policy election, the Company will exclude short-term leases (term of 12 months or less) from the balance sheet. The Company's lease agreements do not contain any residual value guarantees. Please see Note 8, "Leases", for further disclosures.

In August 2017, the FASB issued ASU No. 2017-12, Derivatives and hedging (Topic 815): Targeted improvements to accounting for hedging activities. This standard more closely aligns the results of cash flow and fair value hedge accounting with risk management activities through changes to both the designation and measurement guidance for qualifying hedging relationships and the presentation of hedge results in the financial statements. This standard also addresses specific limitations in current GAAP by expanding hedge accounting for both nonfinancial and financial risk components and by refining the measurement of hedge results to better reflect an entity’s hedging strategies. Additionally, by aligning the timing of recognition of hedge results with the earnings effect of the hedged item for cash flow and net investment hedges, and by including the earnings effect of the hedging instrument in the same income statement line item in which the earnings effect of the hedged item is presented, the results of an entity’s hedging program and the cost of executing that program will be more visible to users of financial statements. The new standard is effective for annual reporting periods beginning after December 15, 2018 with early adoption permitted. The Company adopted this standard on January 1, 2019, and there was no material impact on its financial position, results of operations and related disclosures.

Issued but not yet adopted

In August 2018, the FASB issued ASU No. 2018-14, Compensation - Retirement Benefits - Defined Benefit Plans - General (Topic 715-20), Disclosure Framework - Changes to the Disclosure Requirements for Defined Benefit Plans. This amendment modifies the disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans by removing and adding certain disclosures for these plans. The eliminated disclosures include the amounts in accumulated other comprehensive income expected to be recognized in net periodic benefit costs over the next fiscal year and the effects of a one-percentage-point change in assumed health care cost trend rates on the net periodic benefit costs and the benefit obligation for postretirement health care benefits. New disclosures include the interest crediting rates for cash balance plans, and an explanation of significant gains and losses related to changes in benefit obligations. The new standard is effective for fiscal years beginning after December 15, 2020, and must be applied retrospectively for all periods presented. Early adoption is permitted. The Company does not anticipate the adoption of this standard will have a material impact on its financial position, results of operations and related disclosures.

Revenue Recognition Policy

Revenues are recognized when control of goods is transferred to customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods. Control passes either upon shipment or delivery, depending on the agreed sales terms with customers.

Certain customers may receive cash-based incentives or credits, which are accounted for as variable consideration. The Company estimates these amounts based on the expected amount to be provided to customers and reduce revenues recognized. There were no significant changes to its estimates of variable consideration upon adoption.

The Company reports its business in three operating segments: Food, Health, and Nutrition; Industrial Specialties; and Other. The Company has three principal product lines within these operating segments: (i) Specialty Ingredients; (ii) Core Ingredients; and (iii) Co-Products and Other. Revenue recognition is measured on the same basis across these segments, products, markets, and geographic countries, with the performance obligation being the transfer of control of goods at a single point in time.

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Basis of Statement Presentation (Tables)

6 Months Ended

Jun. 30, 2019

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Schedule of Error Corrections and Prior Period Adjustments

The following table presents the effect of the revision on the selected line items previously reported in the consolidated cash flows statement for the six months ended June 30, 2018:

	June 30, 2018						June 30, 2018
Consolidated Statement of Cash Flows	As reported			Adjustment			As revised
Cash flows from operating activities
Changes in assets and liabilities:
Accounts payable	$	(141	)	$	(2,551	)	$	(2,692	)
Net cash provided by (used for) operations	$	12,108		$	(2,551	)	$	9,557
Cash flows used for investing activities
Capital expenditures	$	(29,026	)	$	2,551		$	(26,475	)
Net cash (used for) investing activities	$	(29,026	)	$	2,551		$	(26,475	)
Supplemental disclosures of cash flow information:
Non-cash investing and financing activities
Accrued additions to plant assets				$	12,121		$	12,121

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Revenue Recognition (Tables)

6 Months Ended

Jun. 30, 2019

Revenue from Contract with Customer [Abstract]

Disaggregation of Revenue

	Three Months Ended June 30, 2019
	U.S.		Canada		Mexico		Other Countries		Total
Specialty Ingredients	$	93,335	$	3,899	$	9,034	$	19,700	$	125,968
Core Ingredients	15,982		2,444		23,369		6,656		48,451
Co-Products & Other	5,395		73		4,939		212		10,619
Total	$	114,712	$	6,416	$	37,342	$	26,568	$	185,038

	Three Months Ended June 30, 2018
	U.S.		Canada		Mexico		Other Countries		Total
Specialty Ingredients	$	112,614	$	6,441	$	9,101	$	20,425	$	148,581
Core Ingredients	12,274		2,244		22,339		9,456		46,313
Co-Products & Other	5,488		68		5,849		426		11,831
Total	$	130,376	$	8,753	$	37,289	$	30,307	$	206,725

	Six Months Ended June 30, 2019
	U.S.		Canada		Mexico		Other Countries		Total
Specialty Ingredients	$	193,863	$	9,177	$	17,466	$	39,378	$	259,884
Core Ingredients	31,068		4,695		45,978		11,471		93,212
Co-Products & Other	17,766		219		5,088		283		23,356
Total	$	242,697	$	14,091	$	68,532	$	51,132	$	376,452

	Six Months Ended June 30, 2018
	U.S.		Canada		Mexico		Other Countries		Total
Specialty Ingredients	$	227,398	$	12,279	$	16,718	$	39,829	$	296,224
Core Ingredients	28,689		4,244		39,982		19,214		92,129
Co-Products & Other	14,195		133		9,057		427		23,812
Total	$	270,282	$	16,656	$	65,757	$	59,470	$	412,165

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Earnings per Share (EPS) (Tables)

6 Months Ended

Jun. 30, 2019

Earnings Per Share [Abstract]

Reconciliation of Earnings per Share

The following is a reconciliation of the weighted average basic number of common shares outstanding to the diluted number of common and common stock equivalent shares outstanding and the calculation of earnings per share using the two-class method:

	Three Months Ended						Six Months Ended
	June 30, 2019			June 30, 2018			June 30, 2019			June 30, 2018
Net income	$	1,401		$	6,246		$	10,095		$	17,161
Less: earnings attributable to unvested shares	(20		)	(33		)	(38		)	(55		)
Net income available to participating common shareholders	$	1,381		$	6,213		$	10,057		$	17,106
Weighted average number of participating common and potential common shares outstanding:
Basic number of participating common shares outstanding	19,572,648			19,505,877			19,571,742			19,503,755
Dilutive effect of stock equivalents	204,197			313,006			144,165			262,216
Diluted number of weighted average participating common shares outstanding	19,776,845			19,818,883			19,715,907			19,765,971
Earnings per participating common share:
Earnings per participating common share—Basic	$	0.07		$	0.32		$	0.51		$	0.88
Earnings per participating common share—Diluted	$	0.07		$	0.31		$	0.51		$	0.87
Total outstanding options, performance share awards and unvested restricted stock not included in the calculation of diluted earnings per share as the effect would be anti-dilutive	867,092			468,773			924,886			519,563

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Stockholders' Equity / Share-Based Compensation (Tables)

6 Months Ended

Jun. 30, 2019

Share-based Payment Arrangement [Abstract]

Summary of Components of Stock-Based Compensation Expense

The following table summarizes the components of share-based compensation expense, all of which has been classified as selling, general and administrative expense:

	Three Months Ended				Six Months Ended
	June 30, 2019		June 30, 2018		June 30, 2019		June 30, 2018
Stock options	$	485	$	538	$	802	$	884
Restricted stock	745		755		1,272		1,280
Performance shares	850		122		793		249
Stock grants	700		579		700		579
Total share-based compensation expense	$	2,780	$	1,994	$	3,567	$	2,992

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Inventories (Tables)

6 Months Ended

Jun. 30, 2019

Inventory Disclosure [Abstract]

Schedule of Inventory

Inventories consist of the following:

	June 30, 2019		December 31, 2018
Raw materials	$	43,018	$	46,147
Finished products (a)	114,293		119,407
Spare parts	15,144		14,649
	$	172,455	$	180,203

(a) The balance as of June 30, 2019 includes a $3.1 million increase related to a cumulative adjustment of capitalized variances.

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Other Current Assets (Tables)

6 Months Ended

Jun. 30, 2019

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]

Schedule of Other Current Assets

Other current assets consist of the following:

	June 30, 2019		December 31, 2018
Creditable taxes (value added taxes)	$	14,405	$	11,944
Vendor inventory deposits (prepaid)	3,108		454
Prepaid income taxes	16,461		6,658
Prepaid insurance	797		2,605
Other	2,241		2,433
	$	37,012	$	24,094

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Goodwill (Tables)

6 Months Ended

Jun. 30, 2019

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Reconciliation of the Carrying Amount of Goodwill

The following table provides a reconciliation of the carrying amount of goodwill at the beginning and end of the reporting period (in thousands):

	Food, Health and Nutrition		Industrial Specialties		Other		Total
Balance: January 1, 2019	$	129,484	$	23,283	$	—	$	152,767
Balance: June 30, 2019	$	129,484	$	23,283	$	—	$	152,767

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Leases (Tables)

6 Months Ended

Jun. 30, 2019

Leases [Abstract]

Components of Lease Expense

The components of lease expense were as follows:

	Three months ended		Six months ended
	June 30, 2019		June 30, 2019
Operating lease expense:
Cost of goods sold	$	1,556	$	2,992
Selling, general and administrative	941		1,808
Total lease expense	$	2,497	$	4,800

Supplemental Balance Sheet Information

Supplemental balance sheet information related to the leases were as follows:

	June 30, 2019
Operating lease ROU assets	$	51,604
Current operating lease liabilities	$	6,328
Noncurrent operating lease liabilities	45,478
Total operating lease liabilities	$	51,806

Supplemental Cash Flow and Other Information

Supplemental cash flow and other information related to the leases were as follows:

	Six months ended
	June 30, 2019
Cash paid for amounts included in the measurement of operating lease liabilities	$	4,694
ROU assets obtained in exchange for new operating lease liabilities	$	6,230

	June 30, 2019
Weighted average remaining lease term of operating leases (in years)	11
Weighted average discount rate of operating leases	5.35	%

Maturities of Lease Liabilities

Maturities of lease liabilities were as follows:

	June 30, 2019
2019	$	4,742
2020	8,140
2021	7,320
2022	6,793
2023	6,175
2024 and thereafter	38,195
Total lease payments	$	71,365
Less: imputed interest	19,559
Total lease obligations	$	51,806
Less: current obligations	6,328
Long-term lease obligations	$	45,478

Maturities of Lease Liabilities Under Prior Guidance

As required by ASC 842, the future minimum operating lease payments on non-cancelable leases as of December 31, 2018 under the accounting standards in effect as of that period were as follows:

	December 31, 2018
2019	$	8,259
2020	7,130
2021	6,490
2022	6,032
2023	5,467
2024 and thereafter	33,957
Long-term lease obligations	$	67,335

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Intangibles and Other Assets, net (Tables)

6 Months Ended

Jun. 30, 2019

Intangible Assets and Other Noncurrent Assets, Net [Abstract]

Summary of Intangibles and Other Assets

Intangibles and other assets consist of the following:

	Useful life (years)	June 30, 2019		December 31, 2018
Developed technology and application patents, net of accumulated amortization of $35,991 for 2019 and $34,669 for 2018	7-20	$	10,284	$	11,606
Customer relationships, net of accumulated amortization of $30,916 for 2019 and $28,032 for 2018	5-20	64,597		67,479
Trade names and license agreements, net of accumulated amortization of $15,870 for 2019 and $14,599 for 2018	5-20	11,691		12,962
Non-compete agreements, net of accumulated amortization of $1,332 for 2019 and $1,319 for 2018	3-10	1		14
Total intangibles, net		$	86,573	$	92,061
Deferred financing costs, net of accumulated amortization of $4,546 for 2019 and $4,331 for 2018 (see Note 11)		$	1,076	$	1,291
Other assets		2,322		1,742
Total other assets, net		$	3,398	$	3,033
		$	89,971	$	95,094

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Other Current Liabilities (Tables)

6 Months Ended

Jun. 30, 2019

Other Liabilities Disclosure [Abstract]

Summary of Other Current Liabilities

Other current liabilities consist of the following:

	June 30, 2019		December 31, 2018
Payroll related	$	14,342	$	15,656
Operating lease liabilities	6,328		—
Taxes other than income taxes	1,841		3,071
Benefits and pensions	5,257		5,680
Freight and rebates	3,759		6,431
Income taxes	15,516		1,355
Restructuring reserve	—		217
Deferred gain on sale leaseback transaction (a)	—		790
Deferred contract termination (b)	9,623		9,489
Other	11,327		7,304
	$	67,993	$	49,993

(a) See Note 8 to the Consolidated Financial Statements for further details.

(b) See Note 18 to the Consolidated Financial Statements for further details.

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Short-Term Borrowings, Long-Term Debt, and Interest Expense (Tables)

6 Months Ended

Jun. 30, 2019

Debt Disclosure [Abstract]

Short-Term Borrowings and Long-Term Debt

Short-term borrowings and long-term debt consist of the following:

 

	June 30, 2019		December 31, 2018
Revolver borrowings under the credit facility due 2021	$	330,000	$	300,000
Long-term debt	$	330,000	$	300,000

Components of Interest Expense, Net

Interest expense, net consists of the following:

	Three months ended						Six months ended
	June 30, 2019			June 30, 2018			June 30, 2019			June 30, 2018
Interest expense	$	3,924		$	3,482		$	7,624		$	6,578
Deferred financing cost	108			107			215			215
Interest income	(36		)	(12		)	(63		)	(32		)
Less: amount capitalized for capital projects	(109		)	(379		)	(187		)	(659		)
Total interest expense, net	$	3,887		$	3,198		$	7,589		$	6,102

Schedule of Derivative Instruments

The table below presents the fair value of the Company's derivative financial instruments as well as their classification in the Consolidated Balance Sheets as of June 30, 2019 and December 31, 2018.

Tabular Disclosure of Fair Values of Derivative Instruments
		Fair value as of
Derivatives designated as hedging instruments	Balance Sheet Location	June 30, 2019		December 31, 2018
Interest Rate Contract	Other Long-Term Liabilities	$	3,787	$	1,023
		$	3,787	$	1,023

Schedule of Derivative Instruments, Effect on Other Comprehensive Income (Loss)

The table below presents the effect of the Company’s derivative financial instruments in the Consolidated Statements of Operations and AOCI for the three and six months ended June 30, 2019 and June 30, 2018.

Tabular Disclosure of the Effect of Derivative Instruments
Derivatives in Cash Flow Hedging Relationships	Amount of Gain/(Loss) Recognized in AOCI on Derivative			Location of Gain/(Loss) Reclassified from AOCI into Income	Amount of Gain/(Loss) Reclassified from AOCI into Income
Interest Rate Contract	$	(1,862	)	Interest Income/(Expense)	$	(77	)
Three months ended June 30, 2019	$	(1,862	)		$	(77	)
Interest Rate Contract	$	(2,763	)	Interest Income/(Expense)	$	(140	)
Six months ended June 30, 2019	$	(2,763	)		$	(140	)
Interest Rate Contract	$	—		Interest Income/(Expense)	$	—
Three months ended June 30, 2018	$	—			$	—
Interest Rate Contract	$	—		Interest Income/(Expense)	$	—
Six months ended June 30, 2018	$	—			$	—

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Other Long-Term Liabilities (Tables)

6 Months Ended

Jun. 30, 2019

Other Liabilities Disclosure [Abstract]

Schedule of Other Long-Term Liabilities

Other long-term liabilities consist of the following:

	June 30, 2019		December 31, 2018
Deferred income taxes	$	8,570	$	5,113
Pension and post retirement liabilities	9,632		9,238
Uncertain tax positions	320		320
Environmental liabilities	1,100		1,100
Deferred gain on sale leaseback transaction (a)	—		15,073
Deferred contract termination fee (b)	10,425		15,371
Interest rate hedge	3,787		1,023
Other liabilities	2,366		2,401
	$	36,200	$	49,639

(a) See Note 8 to the Consolidated Financial Statements for further details.

(b) See Note 18 to the Consolidated Financial Statements for further details.

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Pension Plans and Postretirement Benefits (Tables)

6 Months Ended

Jun. 30, 2019

Retirement Benefits [Abstract]

Schedule of Net Periodic Benefit Expense

Net periodic benefit expense for the Canadian plans:

	Three months ended June 30, 2019								Three months ended June 30, 2018
	Pension benefits			Other benefits		Total			Pension benefits			Other benefits			Total
Service cost	$	97		$	15	$	112		$	109		$	16		$	125
Interest cost	137			15		152			129			14			143
Expected return on assets	(205		)	—		(205		)	(198		)	—			(198		)
Amortization of
actuarial loss (gain)	52			—		52			47			1			48
prior service cost	13			—		13			13			—			13
net transition obligation	—			3		3			—			6			6
Exchange rate changes	(79		)	29		(50		)	100			(34		)	66
Net periodic cost (benefit)	$	15		$	62	$	77		$	200		$	3		$	203
	Six Months Ended June 30, 2019								Six Months Ended June 30, 2018
	Pension benefits			Other benefits		Total			Pension benefits			Other benefits			Total
Service cost	$	190		$	30	$	220		$	222		$	32		$	254
Interest cost	268			30		298			261			29			290
Expected return on assets	(403		)	—		(403		)	(403		)	—			(403		)
Amortization of
actuarial loss (gain)	102			—		102			95			2			97
prior service cost	25			—		25			26			—			26
net transition obligation	—			6		6			—			12			12
Exchange rate changes	(167		)	59		(108		)	218			(73		)	145
Net periodic cost	$	15		$	125	$	140		$	419		$	2		$	421

Net periodic benefit expense for the United States plans:

	Three months ended June 30, 2019									Three months ended June 30, 2018
	Pension benefits			Other benefits			Total			Pension benefits			Other benefits			Total
Service cost	$	—		$	36		$	36		$	—		$	37		$	37
Interest cost	26			34			60			23			29			52
Expected return on assets	(39		)	—			(39		)	(37		)	—			(37		)
Amortization of
prior service cost	—			—			—			—			—			—
unrecognized (gain) loss	—			(39		)	(39		)	—			(40		)	(40		)
net transition obligation	—			—			—			—			—			—
Net periodic (benefit) cost	$	(13	)	$	31		$	18		$	(14	)	$	26		$	12
	Six Months Ended June 30, 2019									Six Months Ended June 30, 2018
	Pension benefits			Other benefits			Total			Pension benefits			Other benefits			Total
Service cost	$	—		$	72		$	72		$	—		$	73		$	73
Interest cost	51			68			119			47			58			105
Expected return on assets	(79		)	—			(79		)	(75		)	—			(75		)
Amortization of
prior service cost	—			—			—			—			—			—
unrecognized (gain) loss	—			(78		)	(78		)	—			(80		)	(80		)
net transition obligation	—			—			—			—			—			—
Net periodic cost	$	(28	)	$	62		$	34		$	(28	)	$	51		$	23

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Accumulated Other Comprehensive Income (Loss) (Tables)

6 Months Ended

Jun. 30, 2019

Equity [Abstract]

Changes in Accumulated Other Comprehensive Income (Loss) by Component

Changes in accumulated other comprehensive income (loss) by component:

Three months ended June 30, 2019	Pension and Other Postretirement Adjustments			Changes in Fair Value of Effective Cash Flow Hedges			Total
Balance at March 31, 2019	$	(2,301	)	$	(1,443	)	$	(3,744	)
Other comprehensive (loss) before reclassifications	—			(1,455		)	(1,455		)
Amounts reclassified from accumulated other comprehensive income	(662		)	58			(604		)
Net current period other comprehensive (loss)	(662		)	(1,397		)	(2,059		)
Balance at June 30, 2019	$	(2,963	)	$	(2,840	)	$	(5,803	)
Three months ended June 30, 2018	Pension and Other Postretirement Adjustments			Changes in Fair Value of Effective Cash Flow Hedges			Total
Balance at March 31, 2018	$	(1,809	)	$	—		$	(1,809	)
Other comprehensive income before reclassifications	94			—			94
Amounts reclassified from accumulated other comprehensive income	—			—			—
Net current period other comprehensive income	94			—			94
Balance at June 30, 2018	$	(1,715	)	$	—		$	(1,715	)
Six months ended June 30, 2019	Pension and Other Postretirement Adjustments			Changes in Fair Value of Effective Cash Flow Hedges			Total
Balance at December 31, 2018	$	(2,249	)	$	(767	)	$	(3,016	)
Other comprehensive (loss) before reclassifications	—			(2,178		)	(2,178		)
Amounts reclassified from accumulated other comprehensive income	(714		)	105			(609		)
Net current period other comprehensive (loss)	(714		)	(2,073		)	(2,787		)
Balance at June 30, 2019	$	(2,963	)	$	(2,840	)	$	(5,803	)
Six months ended June 30, 2018	Pension and Other Postretirement Adjustments			Changes in Fair Value of Effective Cash Flow Hedges			Total
Balance at December 31, 2017	$	(2,198	)	$	—		$	(2,198	)
Other comprehensive income before reclassifications	190			—			190
Amounts reclassified from accumulated other comprehensive income	293			—			293
Net current period other comprehensive income	483			—			483
Balance at June 30, 2018	$	(1,715	)	$	—		$	(1,715	)

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Segment Reporting (Tables)

6 Months Ended

Jun. 30, 2019

Segment Reporting [Abstract]

Schedule of Segment Reporting Information by Segment

Three months ended June 30, 2019	Food, Health and Nutrition		Industrial Specialties		Other			Total
Net sales	$	106,543	$	67,725	$	10,770		$	185,038
EBITDA	$	19,561	$	6,972	$	(270	)	$	26,263
Depreciation and amortization expense	$	6,781	$	3,766	$	339		$	10,886
Three months ended June 30, 2018	Food, Health and Nutrition		Industrial Specialties		Other			Total
Net sales	$	125,664	$	66,751	$	14,310		$	206,725
EBITDA	$	14,939	$	7,794	$	(223	)	$	22,510
Depreciation and amortization expense	$	7,213	$	3,368	$	508		$	11,089
Six months ended June 30, 2019	Food, Health and Nutrition		Industrial Specialties		Other			Total
Net sales	$	221,609	$	130,923	$	23,920		$	376,452
EBITDA	$	33,967	$	15,029	$	3,041		$	52,037
Depreciation and amortization expense	$	13,169	$	6,946	$	531		$	20,646
Six months ended June 30, 2018	Food, Health and Nutrition		Industrial Specialties		Other			Total
Net sales	$	252,027	$	130,101	$	30,037		$	412,165
EBITDA	$	33,931	$	17,886	$	564		$	52,381
Depreciation and amortization expense	$	14,535	$	7,104	$	814		$	22,453

Reconciliation of Net Income to EBITDA

A reconciliation of net income to EBITDA follows:

	Three months ended
	June 30, 2019		June 30, 2018
Net income	$	1,401	$	6,246
Provision for income taxes	10,089		1,977
Interest expense, net	3,887		3,198
Depreciation and amortization	10,886		11,089
EBITDA	$	26,263	$	22,510
	Six months ended
	June 30, 2019		June 30, 2018
Net income	$	10,095	$	17,161
Provision for income taxes	13,707		6,665
Interest expense, net	7,589		6,102
Depreciation and amortization	20,646		22,453
EBITDA	$	52,037	$	52,381

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Basis of Statement Presentation (Details) - USD ($) $ in Thousands	3 Months Ended			6 Months Ended		12 Months Ended
	Jun. 30, 2019	Mar. 31, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018	Dec. 31, 2018
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Accounts payable				$ (24,129)	$ (2,692)
Net cash provided by operating activities				16,781	9,557
Capital expenditures				15,837	26,475
Net cash used for investing activities				(15,837)	(26,475)
Accrued additions to plant assets				4,824	12,121
Cost of goods sold	$ (148,646)		$ (170,340)	(303,648)	(333,553)
Foreign exchange (gain) loss	(470)		1,136	(851)	940
Income before income taxes	11,490		$ 8,223	23,802	23,826
Inventories	172,455			172,455		$ 180,203
Inventory And AOCI Adjustments
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Cost of goods sold	3,100
Foreign exchange (gain) loss	700
Income before income taxes				3,800
Inventories	3,100			$ 3,100
Other comprehensive income before tax	$ (700)
Prior period reclassification adjustment		$ 1,200				$ 2,600
Previously Reported
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Accounts payable					(141)
Net cash provided by operating activities					12,108
Capital expenditures					29,026
Net cash used for investing activities					(29,026)
Restatement Adjustment
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Accounts payable					(2,551)
Net cash provided by operating activities					(2,551)
Capital expenditures					(2,551)
Net cash used for investing activities					2,551
Accrued additions to plant assets					$ 12,121

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Revenue Recognition (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Disaggregation of Revenue [Line Items]
Net sales	$ 185,038	$ 206,725	$ 376,452	$ 412,165
U.S.
Disaggregation of Revenue [Line Items]
Net sales	114,712	130,376	242,697	270,282
Canada
Disaggregation of Revenue [Line Items]
Net sales	6,416	8,753	14,091	16,656
Mexico
Disaggregation of Revenue [Line Items]
Net sales	37,342	37,289	68,532	65,757
Other Countries
Disaggregation of Revenue [Line Items]
Net sales	26,568	30,307	51,132	59,470
Specialty Ingredients
Disaggregation of Revenue [Line Items]
Net sales	125,968	148,581	259,884	296,224
Specialty Ingredients | U.S.
Disaggregation of Revenue [Line Items]
Net sales	93,335	112,614	193,863	227,398
Specialty Ingredients | Canada
Disaggregation of Revenue [Line Items]
Net sales	3,899	6,441	9,177	12,279
Specialty Ingredients | Mexico
Disaggregation of Revenue [Line Items]
Net sales	9,034	9,101	17,466	16,718
Specialty Ingredients | Other Countries
Disaggregation of Revenue [Line Items]
Net sales	19,700	20,425	39,378	39,829
Core Ingredients
Disaggregation of Revenue [Line Items]
Net sales	48,451	46,313	93,212	92,129
Core Ingredients | U.S.
Disaggregation of Revenue [Line Items]
Net sales	15,982	12,274	31,068	28,689
Core Ingredients | Canada
Disaggregation of Revenue [Line Items]
Net sales	2,444	2,244	4,695	4,244
Core Ingredients | Mexico
Disaggregation of Revenue [Line Items]
Net sales	23,369	22,339	45,978	39,982
Core Ingredients | Other Countries
Disaggregation of Revenue [Line Items]
Net sales	6,656	9,456	11,471	19,214
Co-Products & Other
Disaggregation of Revenue [Line Items]
Net sales	10,619	11,831	23,356	23,812
Co-Products & Other | U.S.
Disaggregation of Revenue [Line Items]
Net sales	5,395	5,488	17,766	14,195
Co-Products & Other | Canada
Disaggregation of Revenue [Line Items]
Net sales	73	68	219	133
Co-Products & Other | Mexico
Disaggregation of Revenue [Line Items]
Net sales	4,939	5,849	5,088	9,057
Co-Products & Other | Other Countries
Disaggregation of Revenue [Line Items]
Net sales	$ 212	$ 426	$ 283	$ 427

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Earnings per Share (EPS) (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Earnings Per Share [Abstract]
Net income	$ 1,401	$ 6,246	$ 10,095	$ 17,161
Less: earnings attributable to unvested shares	(20)	(33)	(38)	(55)
Net income available to participating common shareholders	$ 1,381	$ 6,213	$ 10,057	$ 17,106
Weighted average number of participating common and potential common shares outstanding:
Basic number of participating common shares outstanding (in shares)	19,572,648	19,505,877	19,571,742	19,503,755
Dilutive effect of stock equivalents (in shares)	204,197	313,006	144,165	262,216
Diluted number of weighted average participating common shares outstanding (in shares)	19,776,845	19,818,883	19,715,907	19,765,971
Earnings per participating common share:
Earnings per participating common share - Basic (in dollars per share)	$ 0.07	$ 0.32	$ 0.51	$ 0.88
Earnings per participating common share - Diluted (in dollars per share)	$ 0.07	$ 0.31	$ 0.51	$ 0.87
Total outstanding options, performance share awards and unvested restricted stock not included in the calculation of diluted earnings per share as the effect would be anti-dilutive (in shares)	867,092	468,773	924,886	519,563

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Stockholders' Equity / Share-Based Compensation (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total share-based compensation expense (benefit)	$ 2,780	$ 1,994	$ 3,567	$ 2,992
Stock options
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total share-based compensation expense (benefit)	485	538	802	884
Restricted stock
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total share-based compensation expense (benefit)	745	755	1,272	1,280
Performance shares
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total share-based compensation expense (benefit)	850	122	793	249
Stock grants
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total share-based compensation expense (benefit)	$ 700	$ 579	$ 700	$ 579

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Inventories (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Inventory Disclosure [Abstract]
Raw materials	$ 43,018	$ 46,147
Finished products	114,293	119,407
Spare parts	15,144	14,649
Inventories	172,455	180,203
Increase related to cumulative adjustment of capitalized variances	3,100
Inventory reserves	$ 16,490	$ 14,327

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Other Current Assets (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]
Creditable taxes (value added taxes)	$ 14,405	$ 11,944
Vendor inventory deposits (prepaid)	3,108	454
Prepaid income taxes	16,461	6,658
Prepaid insurance	797	2,605
Other	2,241	2,433
Other current assets	$ 37,012	$ 24,094

XML

Goodwill (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Goodwill [Line Items]
Goodwill	$ 152,767	$ 152,767
Food, Health and Nutrition
Goodwill [Line Items]
Goodwill	129,484	129,484
Industrial Specialties
Goodwill [Line Items]
Goodwill	23,283	23,283
Other
Goodwill [Line Items]
Goodwill	$ 0	$ 0

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Leases - Narrative (Details) $ in Thousands	1 Months Ended	6 Months Ended
	Dec. 31, 2018 USD ($)	Jun. 30, 2019 USD ($) lease	Jul. 31, 2019 USD ($)	Jan. 01, 2019 USD ($)
Lessee, Lease, Description [Line Items]
Operating lease ROU assets	$ 0	$ 51,604		$ 48,800
Lease liabilities		$ 51,806		$ 48,900
Number of leases | lease		43
Gross proceeds from sale	$ 23,000
Lease renewal term	20 years
Annual rental payments rent increase period	5 years
Annual rental payments	$ 1,500
Annual rental increase every five years (percent)	10.00%
Annual rental payments rent increase renewal period	5 years
Sale-leaseback gain	$ 11,900
Sale-leaseback gain, tax	$ 4,000
Minimum
Lessee, Lease, Description [Line Items]
Operating lease remaining term		1 year
Maximum
Lessee, Lease, Description [Line Items]
Operating lease remaining term		20 years
Subsequent Event [Member]
Lessee, Lease, Description [Line Items]
Operating lease ROU assets			$ 5,900
Lease liabilities			$ 5,900

XML

Leases - Components of Lease Expense (Details) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2019
Lessee, Lease, Description [Line Items]
Lease expense	$ 2,497	$ 4,800
Cost of goods sold
Lessee, Lease, Description [Line Items]
Lease expense	1,556	2,992
Selling, general and administrative
Lessee, Lease, Description [Line Items]
Lease expense	$ 941	$ 1,808

XML

Leases - Supplemental Balance Sheet Information (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Jan. 01, 2019	Dec. 31, 2018
Leases [Abstract]
Operating lease ROU assets	$ 51,604	$ 48,800	$ 0
Current operating lease liabilities	6,328		0
Noncurrent operating lease liabilities	45,478		$ 0
Total lease obligations	$ 51,806	$ 48,900

XML

Leases - Supplemental Cash Flow and Other Information (Details) $ in Thousands	6 Months Ended
	Jun. 30, 2019 USD ($)
Leases [Abstract]
Cash paid for amounts included in the measurement of operating lease liabilities	$ 4,694
ROU assets obtained in exchange for new operating lease liabilities	$ 6,230
Weighted average remaining lease term of operating leases (in years)	11 years
Weighted average discount rate of operating leases	5.35%

XML

Leases - Maturities of Lease Liabilities (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Jan. 01, 2019	Dec. 31, 2018
Leases [Abstract]
2019	$ 4,742
2020	8,140
2021	7,320
2022	6,793
2023	6,175
2024 and thereafter	38,195
Total lease payments	71,365
Less: imputed interest	19,559
Total lease obligations	51,806	$ 48,900
Less: current obligations	6,328		$ 0
Long-term lease obligations	$ 45,478		$ 0

XML

Leases - Maturities of Lease Liabilities Under Prior Guidance (Details) $ in Thousands	Dec. 31, 2018 USD ($)
Leases [Abstract]
2019	$ 8,259
2020	7,130
2021	6,490
2022	6,032
2023	5,467
2024 and thereafter	33,957
Long-term lease obligations	$ 67,335

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Intangibles and Other Assets, net (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2019	Dec. 31, 2018
Finite-Lived Intangible Assets [Line Items]
Total intangibles, net	$ 86,573	$ 92,061
Deferred financing costs, net of accumulated amortization of $4,546 for 2019 and $4,331 for 2018 (see Note 11)	1,076	1,291
Accumulated amortization of debt issuance costs	4,546	4,331
Other assets	2,322	1,742
Total other assets, net	3,398	3,033
Intangibles and other assets, net	89,971	95,094
Developed technology and application patents
Finite-Lived Intangible Assets [Line Items]
Total intangibles, net	10,284	11,606
Accumulated amortization	$ 35,991	34,669
Developed technology and application patents | Minimum
Finite-Lived Intangible Assets [Line Items]
Useful life (in years)	7 years
Developed technology and application patents | Maximum
Finite-Lived Intangible Assets [Line Items]
Useful life (in years)	20 years
Customer relationships
Finite-Lived Intangible Assets [Line Items]
Total intangibles, net	$ 64,597	67,479
Accumulated amortization	$ 30,916	28,032
Customer relationships | Minimum
Finite-Lived Intangible Assets [Line Items]
Useful life (in years)	5 years
Customer relationships | Maximum
Finite-Lived Intangible Assets [Line Items]
Useful life (in years)	20 years
Trade names and license agreements
Finite-Lived Intangible Assets [Line Items]
Total intangibles, net	$ 11,691	12,962
Accumulated amortization	$ 15,870	14,599
Trade names and license agreements | Minimum
Finite-Lived Intangible Assets [Line Items]
Useful life (in years)	5 years
Trade names and license agreements | Maximum
Finite-Lived Intangible Assets [Line Items]
Useful life (in years)	20 years
Non-compete agreements
Finite-Lived Intangible Assets [Line Items]
Total intangibles, net	$ 1	14
Accumulated amortization	$ 1,332	$ 1,319
Non-compete agreements | Minimum
Finite-Lived Intangible Assets [Line Items]
Useful life (in years)	3 years
Non-compete agreements | Maximum
Finite-Lived Intangible Assets [Line Items]
Useful life (in years)	10 years

XML

Other Current Liabilities (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Other Liabilities Disclosure [Abstract]
Payroll related	$ 14,342	$ 15,656
Operating lease liabilities	6,328	0
Taxes other than income taxes	1,841	3,071
Benefits and pensions	5,257	5,680
Freight and rebates	3,759	6,431
Income taxes	15,516	1,355
Restructuring reserve	0	217
Deferred gain on sale leaseback transaction	0	790
Deferred contract termination	9,623	9,489
Other	11,327	7,304
Other current liabilities	$ 67,993	$ 49,993

XML

Short-Term Borrowings, Long-Term Debt, and Interest Expense - Debt Components (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Debt Instrument [Line Items]
Long-term debt	$ 330,000	$ 300,000
Revolving Credit Facility | Line of Credit
Debt Instrument [Line Items]
Revolver borrowings under the credit facility due 2021	$ 330,000	$ 300,000

XML

Short-Term Borrowings, Long-Term Debt, and Interest Expense - Additional Information (Details) - USD ($)	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Dec. 31, 2018
Debt Instrument [Line Items]
Total leverage ratio	3.50
Interest coverage ratio	3.00
Outstanding borrowings as floating rate debt	$ 180,000,000.0
Effect of one percentage point increase to interest expense	1,800,000
Interest paid	7,600,000	$ 6,800,000
Line of Credit
Debt Instrument [Line Items]
Letters of credit outstanding	500,000
Revolving Credit Facility | Line of Credit
Debt Instrument [Line Items]
Line of credit facility, maximum borrowing capacity	450,000,000.0
Line of credit facility, maximum borrowing capacity including higher borrowing capacity option	600,000,000.0
Amount outstanding under line of credit	330,000,000.0
Line of credit facility, remaining borrowing capacity	$ 119,500,000
Weighted average interest rate	4.60%
Line of credit facility, additional borrowing capacity	$ 150,000,000.0		$ 150,000,000.0
Letter of Credit | Line of Credit
Debt Instrument [Line Items]
Line of credit facility, maximum borrowing capacity	20,000,000.0
Bridge Loan | Line of Credit
Debt Instrument [Line Items]
Line of credit facility, maximum borrowing capacity	$ 20,000,000.0
Interest Rate Swap
Debt Instrument [Line Items]
Interest rate swap, fixed rate to maturity obligation interest rate			2.677%

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Short-Term Borrowings, Long-Term Debt, and Interest Expense - Interest Expense, Net (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Debt Disclosure [Abstract]
Interest expense	$ 3,924	$ 3,482	$ 7,624	$ 6,578
Deferred financing cost	108	107	215	215
Interest income	(36)	(12)	(63)	(32)
Less: amount capitalized for capital projects	(109)	(379)	(187)	(659)
Total interest expense, net	$ 3,887	$ 3,198	$ 7,589	$ 6,102

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Short-Term Borrowings, Long-Term Debt, and Interest Expense - Fair Values of Derivative Instruments (Details) - Other Noncurrent Liabilities - Designated as Hedging Instrument - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Derivatives, Fair Value [Line Items]
Interest Rate Contract	$ 3,787	$ 1,023
Interest Rate Swap
Derivatives, Fair Value [Line Items]
Interest Rate Contract	$ 3,787	$ 1,023

XML

Short-Term Borrowings, Long-Term Debt, and Interest Expense - Derivatives and AOCI (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Amount of Gain/(Loss) Recognized in AOCI on Derivative	$ (1,862)	$ 0	$ (2,763)	$ 0
Interest Rate Swap
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Amount of Gain/(Loss) Recognized in AOCI on Derivative	(1,862)	0	(2,763)	0
Interest Income/(Expense)
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Amount of Gain/(Loss) Reclassified from AOCI into Income	(77)	0	(140)	0
Interest Income/(Expense) | Interest Rate Swap
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Amount of Gain/(Loss) Reclassified from AOCI into Income	$ (77)	$ 0	$ (140)	$ 0

XML

Other Long-Term Liabilities (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Other Liabilities Disclosure [Abstract]
Deferred income taxes	$ 8,570	$ 5,113
Pension and post retirement liabilities	9,632	9,238
Uncertain tax positions	320	320
Environmental liabilities	1,100	1,100
Deferred gain on sale leaseback transaction	0	15,073
Deferred contract termination fee	10,425	15,371
Interest rate hedge	3,787	1,023
Other liabilities	2,366	2,401
Other long-term liabilities	$ 36,200	$ 49,639

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Income Taxes (Details) - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018
Income Tax Disclosure [Abstract]
Effective income tax rate (as a percent)	58.00%	28.00%
Dutch income tax liability	$ 6.6
Income taxes paid	$ 9.0	$ 12.8

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Commitments and Contingencies (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Loss Contingencies [Line Items]
Environmental liabilities	$ 1,100	$ 1,100
Dutch income tax liability	6,600
Nashville, TN
Loss Contingencies [Line Items]
Environmental liabilities	1,100
Nashville, TN | Minimum
Loss Contingencies [Line Items]
Accrual for environmental loss contingencies	900
Nashville, TN | Maximum
Loss Contingencies [Line Items]
Accrual for environmental loss contingencies	$ 1,300

XML

Pension Plans and Postretirement Benefits - Net Periodic Benefit Expense (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
U.S.
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
Service cost	$ 36	$ 37	$ 72	$ 73
Interest cost	60	52	119	105
Expected return on assets	(39)	(37)	(79)	(75)
Amortization of prior service cost	0	0	0	0
Amortization of unrecognized (gain) loss	(39)	(40)	(78)	(80)
Amortization of net transition obligation	0	0	0	0
Net periodic cost (benefit)	18	12	34	23
U.S. | Pension benefits
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
Service cost	0	0	0	0
Interest cost	26	23	51	47
Expected return on assets	(39)	(37)	(79)	(75)
Amortization of prior service cost	0	0	0	0
Amortization of unrecognized (gain) loss	0	0	0	0
Amortization of net transition obligation	0	0	0	0
Net periodic cost (benefit)	(13)	(14)	(28)	(28)
U.S. | Other benefits
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
Service cost	36	37	72	73
Interest cost	34	29	68	58
Expected return on assets	0	0	0	0
Amortization of prior service cost	0	0	0	0
Amortization of unrecognized (gain) loss	(39)	(40)	(78)	(80)
Amortization of net transition obligation	0	0	0	0
Net periodic cost (benefit)	31	26	62	51
Canada
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
Service cost	112	125	220	254
Interest cost	152	143	298	290
Expected return on assets	(205)	(198)	(403)	(403)
Amortization of prior service cost	13	13	25	26
Amortization of unrecognized (gain) loss	52	48	102	97
Amortization of net transition obligation	3	6	6	12
Exchange rate changes	(50)	66	(108)	145
Net periodic cost (benefit)	77	203	140	421
Canada | Pension benefits
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
Service cost	97	109	190	222
Interest cost	137	129	268	261
Expected return on assets	(205)	(198)	(403)	(403)
Amortization of prior service cost	13	13	25	26
Amortization of unrecognized (gain) loss	52	47	102	95
Amortization of net transition obligation	0	0	0	0
Exchange rate changes	(79)	100	(167)	218
Net periodic cost (benefit)	15	200	15	419
Canada | Other benefits
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
Service cost	15	16	30	32
Interest cost	15	14	30	29
Expected return on assets	0	0	0	0
Amortization of prior service cost	0	0	0	0
Amortization of unrecognized (gain) loss	0	1	0	2
Amortization of net transition obligation	3	6	6	12
Exchange rate changes	29	(34)	59	(73)
Net periodic cost (benefit)	$ 62	$ 3	$ 125	$ 2

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Pension Plans and Postretirement Benefits - Additional Information (Details) - Pension benefits - USD ($)	12 Months Ended
	Dec. 31, 2018	Jun. 30, 2019
U.S.
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
Employer minimum contribution requirements		$ 0
Anticipated employer cash contributions		0
Cash contributions	$ 0
Canada
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
Anticipated employer cash contributions		$ 300,000
Cash contributions	$ 700,000

XML

Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance			$ 335,515	$ 333,559
Other comprehensive income before reclassifications	$ (1,455)	$ 94	(2,178)	190
Amounts reclassified from accumulated other comprehensive income	(604)	0	(609)	293
Other comprehensive income (loss), net of tax	(2,059)	94	(2,787)	483	[1]
Ending balance	339,187	334,970	339,187	334,970
Pension and Other Postretirement Adjustments
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance	(2,301)	(1,809)	(2,249)	(2,198)
Other comprehensive income before reclassifications	0	94	0	190
Amounts reclassified from accumulated other comprehensive income	(662)	0	(714)	293
Other comprehensive income (loss), net of tax	(662)	94	(714)	483
Ending balance	(2,963)	(1,715)	(2,963)	(1,715)
Changes in Fair Value of Effective Cash Flow Hedges
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance	(1,443)	0	(767)	0
Other comprehensive income before reclassifications	(1,455)	0	(2,178)	0
Amounts reclassified from accumulated other comprehensive income	58	0	105	0
Other comprehensive income (loss), net of tax	(1,397)	0	(2,073)	0
Ending balance	(2,840)	0	(2,840)	0
Accumulated Other Comprehensive Income/(Loss)
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance	(3,744)	(1,809)	(3,016)	(2,198)
Other comprehensive income (loss), net of tax			(2,787)	483	[1]
Ending balance	$ (5,803)	$ (1,715)	$ (5,803)	$ (1,715)

[1] Includes the impact of ASU 2018-02, which transferred those amounts from accumulated other comprehensive income (loss) to retained earnings. See Note 16 to the Condensed Consolidated Financial Statements.

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Segment Reporting - By Segment (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Segment Reporting Information [Line Items]
Net sales	$ 185,038	$ 206,725	$ 376,452	$ 412,165
EBITDA	26,263	22,510	52,037	52,381
Depreciation and amortization	10,886	11,089	20,646	22,453
Food, Health and Nutrition
Segment Reporting Information [Line Items]
Net sales	106,543	125,664	221,609	252,027
EBITDA	19,561	14,939	33,967	33,931
Depreciation and amortization	6,781	7,213	13,169	14,535
Industrial Specialties
Segment Reporting Information [Line Items]
Net sales	67,725	66,751	130,923	130,101
EBITDA	6,972	7,794	15,029	17,886
Depreciation and amortization	3,766	3,368	6,946	7,104
Other
Segment Reporting Information [Line Items]
Net sales	10,770	14,310	23,920	30,037
EBITDA	(270)	(223)	3,041	564
Depreciation and amortization	339	$ 508	$ 531	$ 814
Reconciling adjustment | Food, Health and Nutrition
Segment Reporting Information [Line Items]
EBITDA	1,000
Reconciling adjustment | Industrial Specialties
Segment Reporting Information [Line Items]
EBITDA	400
Reconciling adjustment | Other
Segment Reporting Information [Line Items]
EBITDA	$ (1,400)

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Segment Reporting - Reconciliation of Net Income to EBITDA (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Segment Reporting [Abstract]
Net income	$ 1,401	$ 6,246	$ 10,095	$ 17,161
Provision for income taxes	10,089	1,977	13,707	6,665
Interest expense, net	3,887	3,198	7,589	6,102
Depreciation and amortization	10,886	11,089	20,646	22,453
EBITDA	$ 26,263	$ 22,510	$ 52,037	$ 52,381

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Supply Agreement Termination (Details) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended	6 Months Ended
	Dec. 31, 2018	Jun. 30, 2019	Jun. 30, 2019
Commitments and Contingencies Disclosure [Abstract]
Supply commitment, contract termination agreement, consideration	$ 24,900
Supply commitment, contract termination agreement, cash proceeds	21,300
Assets received as part of the supply agreement termination	3,600
Deferred contract termination fee, current	9,489	$ 9,623	$ 9,623
Deferred contract termination fee, noncurrent	$ 15,371	10,425	10,425
Deferred contract termination fee, amortization		$ 2,400	$ 4,800