x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 47-4027764 | |
(State of other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |
5255 Virginia Avenue | ||
North Charleston, South Carolina 29406 | ||
(Address of principal executive offices) (Zip code) |
Large Accelerated Filer x | Accelerated Filer o | |
Non-Accelerated Filer o | Smaller reporting company o | |
Emerging growth company o |
Page No. | ||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
In millions, except per share data | 2018 | 2017 | 2018 | 2017 | |||||||||||
Net sales | $ | 311.2 | $ | 264.1 | $ | 855.0 | $ | 742.9 | |||||||
Cost of sales | 192.6 | 170.9 | 535.8 | 489.2 | |||||||||||
Gross profit | 118.6 | 93.2 | 319.2 | 253.7 | |||||||||||
Selling, general and administrative expenses | 34.5 | 26.2 | 96.5 | 78.5 | |||||||||||
Research and technical expenses | 5.6 | 4.8 | 16.3 | 14.6 | |||||||||||
Separation costs | — | 0.2 | — | 0.7 | |||||||||||
Restructuring and other (income) charges, net | — | 0.1 | (0.6 | ) | 3.5 | ||||||||||
Acquisition-related costs | — | 4.1 | 4.3 | 4.1 | |||||||||||
Other (income) expense, net | 2.5 | (0.5 | ) | 2.7 | 0.9 | ||||||||||
Interest expense, net | 7.9 | 3.2 | 21.8 | 9.3 | |||||||||||
Income (loss) before income taxes | 68.1 | 55.1 | 178.2 | 142.1 | |||||||||||
Provision (benefit) for income taxes | 16.4 | 16.7 | 38.5 | 44.9 | |||||||||||
Net income (loss) | 51.7 | 38.4 | 139.7 | 97.2 | |||||||||||
Less: Net income (loss) attributable to noncontrolling interest | 2.2 | 4.6 | 12.7 | 12.3 | |||||||||||
Net income (loss) attributable to Ingevity stockholders | $ | 49.5 | $ | 33.8 | $ | 127.0 | $ | 84.9 | |||||||
Per share data | |||||||||||||||
Basic earnings (loss) per share attributable to Ingevity stockholders | $ | 1.18 | $ | 0.80 | $ | 3.02 | $ | 2.01 | |||||||
Diluted earnings (loss) per share attributable to Ingevity stockholders | 1.16 | 0.79 | 2.98 | 2.00 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
In millions | 2018 | 2017 | 2018 | 2017 | |||||||||||
Net income (loss) | $ | 51.7 | $ | 38.4 | $ | 139.7 | $ | 97.2 | |||||||
Other comprehensive income (loss), net of tax: | |||||||||||||||
Foreign currency translation adjustment | (3.6 | ) | 2.4 | (6.5 | ) | 6.2 | |||||||||
Derivative instruments: | |||||||||||||||
Unrealized gain (loss), net of tax provision (benefit) of $0.1, zero, $0.3, zero | 0.1 | (0.2 | ) | 0.8 | (0.2 | ) | |||||||||
Reclassifications of deferred derivative instruments (gain) loss, included in net income (loss), net of tax (provision) benefit of ($0.2), zero, ($0.2), zero | (0.3 | ) | 0.1 | (0.5 | ) | 0.1 | |||||||||
Total derivative instruments, net of tax provision (benefit) of ($0.1), zero, $0.1, zero | (0.2 | ) | (0.1 | ) | 0.3 | (0.1 | ) | ||||||||
Pension & Other postretirement benefits: | |||||||||||||||
Reclassifications of net actuarial and other (gain) loss and amortization of prior service cost, included in net income, net of tax of zero for all periods | — | — | 0.1 | — | |||||||||||
Total pension and other postretirement benefits, net of tax of zero for all periods | — | — | 0.1 | — | |||||||||||
Other comprehensive income (loss), net of tax provision (benefit) of ($0.1), zero, $0.1, zero | (3.8 | ) | 2.3 | (6.1 | ) | 6.1 | |||||||||
Comprehensive income (loss) | 47.9 | 40.7 | 133.6 | 103.3 | |||||||||||
Less: Comprehensive income (loss) attributable to noncontrolling interest | 2.2 | 4.6 | 12.7 | 12.3 | |||||||||||
Comprehensive income (loss) attributable to Ingevity stockholders | $ | 45.7 | $ | 36.1 | $ | 120.9 | $ | 91.0 |
In millions, except share and par value data | September 30, 2018 | December 31, 2017 | |||||
Assets | (Unaudited) | ||||||
Cash and cash equivalents | $ | 57.5 | $ | 87.9 | |||
Accounts receivable, net of allowance of $0.3 million at September 30, 2018 and $0.4 million at December 31, 2017 | 140.4 | 100.0 | |||||
Inventories, net | 194.3 | 160.0 | |||||
Prepaid and other current assets | 28.6 | 20.8 | |||||
Current assets | 420.8 | 368.7 | |||||
Property, plant and equipment, net | 498.9 | 438.5 | |||||
Goodwill | 130.6 | 12.4 | |||||
Other intangibles, net | 129.2 | 4.9 | |||||
Deferred income taxes | 2.9 | 3.4 | |||||
Restricted investment | 70.7 | 71.3 | |||||
Other assets | 38.8 | 30.4 | |||||
Total Assets | $ | 1,291.9 | $ | 929.6 | |||
Liabilities | |||||||
Accounts payable | $ | 108.7 | $ | 83.1 | |||
Accrued expenses | 26.2 | 20.0 | |||||
Accrued payroll and employee benefits | 32.5 | 39.2 | |||||
Notes payable and current maturities of long-term debt | 4.9 | 9.4 | |||||
Income taxes payable | 7.5 | 1.5 | |||||
Current liabilities | 179.8 | 153.2 | |||||
Long-term debt including capital lease obligations | 744.0 | 444.0 | |||||
Deferred income taxes | 31.2 | 41.3 | |||||
Other liabilities | 14.2 | 13.2 | |||||
Total Liabilities | 969.2 | 651.7 | |||||
Commitments and contingencies (Note 15) | |||||||
Equity | |||||||
Preferred stock (par value $0.01 per share; 50,000,000 shares authorized; zero issued and outstanding at September 30, 2018 and December 31, 2017) | — | — | |||||
Common stock (par value $0.01 per share; 300,000,000 shares authorized; 42,322,153 and 42,208,973 issued; 41,992,323 and 42,089,103 outstanding at September 30, 2018 and December 31, 2017) | 0.4 | 0.4 | |||||
Additional paid-in capital | 95.1 | 140.1 | |||||
Retained earnings | 271.4 | 142.8 | |||||
Accumulated other comprehensive income (loss) | (17.8 | ) | (11.7 | ) | |||
Treasury stock, common stock, at cost (329,830 shares at September 30, 2018; 119,870 shares at December 31, 2017) | (26.4 | ) | (7.7 | ) | |||
Total Ingevity stockholders' equity | 322.7 | 263.9 | |||||
Noncontrolling interest | — | 14.0 | |||||
Total Equity | 322.7 | 277.9 | |||||
Total Liabilities and Equity | $ | 1,291.9 | $ | 929.6 |
Nine Months Ended September 30, | |||||||
In millions | 2018 | 2017 | |||||
Cash provided by (used in) operating activities: | |||||||
Net income (loss) | 139.7 | $ | 97.2 | ||||
Adjustments to reconcile net income (loss) to cash provided by operating activities: | |||||||
Depreciation and amortization | 42.1 | 30.4 | |||||
Deferred income taxes | 3.2 | (6.0 | ) | ||||
Disposal/impairment of assets | — | 1.1 | |||||
Restructuring and other (income) charges, net | (0.6 | ) | 3.5 | ||||
Share-based compensation | 10.1 | 7.4 | |||||
Pension and other postretirement expense | 1.4 | 0.8 | |||||
Other non-cash items | 8.5 | 9.1 | |||||
Changes in operating assets and liabilities: | |||||||
Accounts receivable, net | (24.6 | ) | (19.1 | ) | |||
Inventories, net | (30.3 | ) | (1.4 | ) | |||
Prepaid and other currents assets | (4.7 | ) | 4.1 | ||||
Planned major maintenance outage | (5.1 | ) | (4.5 | ) | |||
Accounts payable | 21.6 | 2.7 | |||||
Accrued expenses | 6.6 | 1.8 | |||||
Accrued payroll and employee benefit costs | (6.5 | ) | 7.0 | ||||
Income taxes | 7.5 | 3.9 | |||||
Pension contribution | (1.5 | ) | — | ||||
Restructuring and other spending | (0.1 | ) | (5.2 | ) | |||
Changes in other operating assets and liabilities, net | (0.9 | ) | 0.8 | ||||
Net cash provided by (used in) operating activities | 166.4 | 133.6 | |||||
Cash provided by (used in) investing activities: | |||||||
Capital expenditures | (56.6 | ) | (36.2 | ) | |||
Payments for acquired businesses, net of cash acquired | (315.5 | ) | — | ||||
Purchase of equity securities | — | (2.4 | ) | ||||
Sale of equity securities | 1.1 | 0.7 | |||||
Other investing activities, net | (5.3 | ) | (4.1 | ) | |||
Net cash provided by (used in) investing activities | (376.3 | ) | (42.0 | ) | |||
Cash provided by (used in) financing activities: | |||||||
Net borrowings under our revolving credit facility | — | (111.9 | ) | ||||
Proceeds from long-term borrowings | 300.0 | 75.0 | |||||
Debt issuance costs | (7.1 | ) | (1.3 | ) | |||
Tax payments related to withholdings on vested restricted stock units | (2.1 | ) | (0.9 | ) | |||
Proceeds and withholdings from share-based compensation plans, net | 1.8 | — | |||||
Repurchases of common stock under publicly announced plan | (18.1 | ) | (2.6 | ) | |||
Acquisition of noncontrolling interest | (80.0 | ) | — | ||||
Noncontrolling interest distributions | (15.3 | ) | (8.2 | ) | |||
Other financing activities, net | 0.7 | — | |||||
Net cash provided by (used in) financing activities | 179.9 | (49.9 | ) | ||||
Increase (decrease) in cash, cash equivalents and restricted cash | (30.0 | ) | 41.7 | ||||
Effect of exchange rate changes on cash | (0.1 | ) | (1.7 | ) | |||
Change in cash, cash equivalents and restricted cash | (30.1 | ) | 40.0 | ||||
Cash, cash equivalents and restricted cash at beginning of period | 87.9 | 30.5 | |||||
Cash, cash equivalents and restricted cash at end of period (1) | $ | 57.8 | $ | 70.5 | |||
(1) Includes restricted cash of $0.3 million and $0.3 million and cash and cash equivalents of $57.5 million and $70.2 million as of September 30, 2018 and 2017, respectively. Restricted cash is included within "Prepaid and Other Current Assets" within the condensed consolidated balance sheets. | |||||||
Supplemental cash flow information: | |||||||
Cash paid for interest, net of capitalized interest | $ | 22.6 | $ | 13.9 | |||
Cash paid for taxes, net of refunds | $ | 27.6 | $ | 47.5 | |||
Purchases of property, plant and equipment in accounts payable | $ | 8.7 | $ | 4.9 |
In millions | Balance at December 31, 2017 | Adjustments | Balance at January 1, 2018 | ||||||||
Assets | |||||||||||
Accounts receivable, net of allowance | $ | 100.0 | $ | 0.3 | $ | 100.3 | |||||
Inventories, net | 160.0 | (2.4 | ) | 157.6 | |||||||
Prepaid and other current assets | 20.8 | 5.1 | 25.9 | ||||||||
Liabilities | |||||||||||
Accrued expenses | 20.0 | 0.9 | 20.9 | ||||||||
Deferred income taxes | 41.3 | 0.5 | 41.8 | ||||||||
Equity | |||||||||||
Retained earnings | $ | 142.8 | $ | 1.6 | $ | 144.4 |
Three Months Ended September 30, 2018 | |||||||||||
In millions | As reported | Balances without Adoption of ASC 606 | Effect of Change Higher/(Lower) | ||||||||
Net sales | $ | 311.2 | $ | 311.4 | $ | (0.2 | ) | ||||
Cost of sales | 192.6 | 192.8 | (0.2 | ) | |||||||
Provision (benefit) for income taxes | 16.4 | 16.4 | — | ||||||||
Net income (loss) | $ | 51.7 | $ | 51.7 | $ | — |
Nine Months Ended September 30, 2018 | |||||||||||
In millions | As reported | Balances without Adoption of ASC 606 | Effect of Change Higher/(Lower) | ||||||||
Net sales | $ | 855.0 | $ | 854.7 | $ | 0.3 | |||||
Cost of sales | 535.8 | 536.1 | (0.3 | ) | |||||||
Provision (benefit) for income taxes | 38.5 | 38.4 | 0.1 | ||||||||
Net income (loss) | $ | 139.7 | $ | 139.2 | $ | 0.5 |
September 30, 2018 | |||||||||||
In millions | As reported | Balances without Adoption of ASC 606 | Effect of Change Higher/(Lower) | ||||||||
Assets | |||||||||||
Accounts receivable, net of allowance | $ | 140.4 | $ | 140.0 | $ | 0.4 | |||||
Inventories, net | 194.3 | 196.5 | (2.2 | ) | |||||||
Prepaid and other current assets | 28.6 | 23.1 | 5.5 | ||||||||
Liabilities | |||||||||||
Accrued expenses | 26.2 | 25.1 | 1.1 | ||||||||
Deferred income taxes | 31.2 | 31.1 | 0.1 | ||||||||
Equity | |||||||||||
Retained earnings | $ | 271.4 | $ | 268.9 | $ | 2.5 |
Purchase Price Allocation | ||||
In millions | Weighted Average Amortization Period | Fair Value | ||
Accounts receivable | $ | 16.2 | ||
Inventories (1) | 9.4 | |||
Property, plant and equipment | 39.3 | |||
Intangible assets (2) | ||||
Patents | 12 years | 1.9 | ||
Non-compete agreement | 3 years | 2.2 | ||
Customer relationships | 11 years | 129.0 | ||
Goodwill (3) | 118.7 | |||
Other assets | 0.1 | |||
Total fair value of assets acquired | 316.8 | |||
Accounts payable | 0.8 | |||
Accrued expenses | 0.5 | |||
Total fair value of liabilities assumed | $ | 1.3 | ||
Total cash paid | $ | 315.5 | ||
_______________ | ||||
(1) Fair value of finished good inventories acquired included a step-up in the value of approximately $1.4 million, of which zero and $1.4 million was expensed in the three and nine months ended September 30, 2018, respectively. The expense is included in "Cost of sales" on the condensed consolidated statement of operations. | ||||
(2) The aggregate amortization expense was $3.2 million and $7.4 million for the three and nine months ended September 30, 2018, respectively. Estimated amortization expense is as follows: 2018 - $10.6 million, 2019 - $12.7 million, 2020 - $12.7 million, 2021 - $12.0 million, and 2022 - $11.8 million. | ||||
(3) Goodwill largely consists of expected cost synergies and economies of scale resulting from the business combination. We expect the full amount to be deductible for income tax purposes. |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
In millions | 2018 | 2017 | 2018 | 2017 | |||||||||||
Net sales | $ | 311.2 | $ | 288.1 | $ | 875.2 | $ | 814.5 | |||||||
Income (loss) before income taxes | 68.1 | 58.8 | 184.7 | 141.3 | |||||||||||
Diluted earnings (loss) per share attributable to Ingevity stockholders | $ | 1.16 | $ | 0.85 | $ | 3.10 | $ | 1.99 |
In millions | Three Months Ended September 30, 2018 | Nine Months Ended September 30, 2018 | |||||
Automotive Technologies product line | $ | 86.6 | $ | 258.6 | |||
Process Purification product line | 9.7 | 29.3 | |||||
Performance Materials segment | $ | 96.3 | $ | 287.9 | |||
Oilfield Technologies product line | 32.5 | 84.0 | |||||
Pavement Technologies product line | 68.1 | 152.2 | |||||
Industrial Specialties product line | 114.3 | 330.9 | |||||
Performance Chemicals segment | $ | 214.9 | $ | 567.1 | |||
Consolidated Net sales | $ | 311.2 | $ | 855.0 |
In millions | Three Months Ended September 30, 2018 | Nine Months Ended September 30, 2018 | |||||
North America | $ | 220.6 | $ | 587.3 | |||
Asia Pacific | 45.0 | 121.9 | |||||
Europe, Middle East and Africa | 40.5 | 128.8 | |||||
South America | 5.1 | 17.0 | |||||
Consolidated Net sales | $ | 311.2 | $ | 855.0 |
In millions | Contract Asset | ||
Balance at January 1, 2018 | $ | 4.4 | |
Contract asset additions | 12.3 | ||
Reclassification to accounts receivable, billed to customers | (11.9 | ) | |
Balance at September 30, 2018 (1) | $ | 4.8 | |
_______________ | |||
(1) Included within "Prepaid and other current assets" on the condensed consolidated balance sheet. |
In millions | Level 1(1) | Level 2(2) | Level 3(3) | Total | |||||||||||
September 30, 2018 | |||||||||||||||
Assets: | |||||||||||||||
Equity securities (4) | $ | 0.5 | $ | — | $ | — | $ | 0.5 | |||||||
Foreign currency hedging (4) | — | 0.5 | — | 0.5 | |||||||||||
Commodity hedging (4) | — | 0.1 | — | 0.1 | |||||||||||
Deferred compensation plan investments (5) | 2.3 | — | — | 2.3 | |||||||||||
Total assets | $ | 2.8 | $ | 0.6 | $ | — | $ | 3.4 | |||||||
Liabilities: | |||||||||||||||
Deferred compensation arrangement (5) | $ | 4.5 | $ | — | $ | — | $ | 4.5 | |||||||
Separation-related reimbursement awards (6) | 0.3 | — | — | 0.3 | |||||||||||
Total liabilities | $ | 4.8 | $ | — | $ | — | $ | 4.8 | |||||||
December 31, 2017 | |||||||||||||||
Assets: | |||||||||||||||
Equity securities (4) | $ | 1.8 | $ | — | $ | — | $ | 1.8 | |||||||
Total assets | $ | 1.8 | $ | — | $ | — | $ | 1.8 | |||||||
Liabilities: | |||||||||||||||
Deferred compensation arrangement (5) | $ | 2.0 | $ | — | $ | — | $ | 2.0 | |||||||
Separation-related reimbursement awards (6) | 0.9 | — | — | 0.9 | |||||||||||
Total liabilities | $ | 2.9 | $ | — | $ | — | $ | 2.9 |
(1) | Quoted prices in active markets for identical assets. |
(2) | Quoted prices for similar assets and liabilities in active markets. |
(3) | Significant unobservable inputs. |
(4) | Represents securities with readily determinable fair value. Securities are included within "Prepaid and other current assets" on the condensed consolidated balance sheet. |
(5) | Consists of a deferred compensation arrangement, through which we hold various investment securities, recognized on our balance sheets. Both the asset and liability are recorded at fair value, and are included within "Other assets" and "Other liabilities" on the condensed consolidated balance sheets, respectively. |
(6) | Included within "Accrued expenses" on the condensed consolidated balance sheet. The expense recognized during the three and nine months ended September 30, 2018, was $0.1 million and zero, and during the three and nine months ended September 30, 2017, was zero and $0.3 million, respectively. |
In millions | September 30, 2018 | December 31, 2017 | |||||
Raw materials | $ | 40.8 | $ | 40.1 | |||
Production materials, stores and supplies | 16.8 | 13.4 | |||||
Finished and in-process goods | 145.2 | 114.3 | |||||
Subtotal | 202.8 | 167.8 | |||||
Less: excess of cost over LIFO cost | (8.5 | ) | (7.8 | ) | |||
Inventories, net | $ | 194.3 | $ | 160.0 |
In millions | September 30, 2018 | December 31, 2017 | |||||
Machinery and equipment | $ | 835.2 | $ | 792.5 | |||
Buildings and leasehold equipment | 112.2 | 115.0 | |||||
Land and land improvements | 19.6 | 18.0 | |||||
Construction in progress | 70.1 | 35.8 | |||||
Total cost | 1,037.1 | 961.3 | |||||
Less: accumulated depreciation | (538.2 | ) | (522.8 | ) | |||
Property, plant and equipment, net | $ | 498.9 | $ | 438.5 |
Operating Segments | |||||||||||
In millions | Performance Chemicals | Performance Materials | Total | ||||||||
December 31, 2017 | $ | 8.1 | $ | 4.3 | $ | 12.4 | |||||
Acquisitions(1) | 118.7 | — | 118.7 | ||||||||
Foreign currency translation | (0.5 | ) | — | (0.5 | ) | ||||||
September 30, 2018 | $ | 126.3 | $ | 4.3 | $ | 130.6 |
September 30, 2018 | December 31, 2017 | ||||||||||||||||||||||
In millions | Gross carrying amount | Accumulated amortization | Net | Gross carrying amount | Accumulated amortization | Net | |||||||||||||||||
Brands (1) | $ | 13.9 | $ | 12.2 | $ | 1.7 | $ | 13.9 | $ | 11.8 | $ | 2.1 | |||||||||||
Patents (2) | 1.9 | 0.2 | 1.7 | — | — | — | |||||||||||||||||
Customer contracts and relationships (2) | 157.2 | 33.2 | 124.0 | 28.2 | 25.4 | 2.8 | |||||||||||||||||
Non-compete agreements (2) | 2.2 | 0.4 | 1.8 | — | — | — | |||||||||||||||||
Other intangibles, net | $ | 175.2 | $ | 46.0 | $ | 129.2 | $ | 42.1 | $ | 37.2 | $ | 4.9 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
In millions | 2018 | 2017 | 2018 | 2017 | |||||||||||
Cost of sales | $ | 0.2 | $ | 0.3 | $ | 0.6 | $ | 1.0 | |||||||
Selling, general and administrative expenses | 3.4 | 0.3 | 8.2 | 0.9 | |||||||||||
Total amortization expense | $ | 3.6 | $ | 0.6 | $ | 8.8 | $ | 1.9 |
September 30, 2018 | |||||||||||
In millions, except percentages | Interest rate | Maturity date | September 30, 2018 | December 31, 2017 | |||||||
Revolving credit facility (1) | 3.51% | 2023 | $ | — | $ | — | |||||
Term loan facility | 3.49% | 2023 | 375.0 | 375.0 | |||||||
Senior notes | 4.50% | 2026 | 300.0 | — | |||||||
Capital lease obligations | 7.67% | 2027 | 80.0 | 80.0 | |||||||
Other | 5.09% | 2018-2021 | 0.7 | — | |||||||
Total debt including capital lease obligations | 755.7 | 455.0 | |||||||||
Less: debt issuance costs | 6.8 | 1.6 | |||||||||
Total debt including capital lease obligations, net of debt issuance costs | 748.9 | 453.4 | |||||||||
Less: debt maturing within one year (2) | 4.9 | 9.4 | |||||||||
Long-term debt including capital lease obligations | $ | 744.0 | $ | 444.0 |
(1) | Letters of credit outstanding under the revolving credit facility were $1.8 million and available funds under the facility were $748.2 million at September 30, 2018. |
(2) | Debt maturing within one year is included in "Notes payable and current maturities of long-term debt" on the condensed consolidated balance sheets. |
Ingevity Stockholders' Equity | ||||||||||||||||||||||||||
Common Stock | Additional paid in capital | Retained earnings | Accumulated other comprehensive income (loss) | Treasury stock | Total | |||||||||||||||||||||
In millions, except per share data | Shares | Amount | ||||||||||||||||||||||||
Balance at December 31, 2017 | 42,209 | $ | 0.4 | $ | 140.1 | $ | 142.8 | $ | (11.7 | ) | $ | (7.7 | ) | $ | 263.9 | |||||||||||
Net income (loss) | — | — | — | 127.0 | — | — | 127.0 | |||||||||||||||||||
Other comprehensive income (loss) | — | — | — | — | (6.1 | ) | — | (6.1 | ) | |||||||||||||||||
Common stock issued | 107 | — | — | — | — | — | — | |||||||||||||||||||
Exercise of stock options, net | 6 | — | 0.2 | — | — | — | 0.2 | |||||||||||||||||||
Tax payments related to vested restricted stock units | — | — | — | — | — | (2.1 | ) | (2.1 | ) | |||||||||||||||||
Share repurchase program | — | — | — | — | — | (18.1 | ) | (18.1 | ) | |||||||||||||||||
Share-based compensation plans | — | — | 10.0 | — | — | 1.5 | 11.5 | |||||||||||||||||||
Adoption of ASC 606 | — | — | — | 1.6 | — | — | 1.6 | |||||||||||||||||||
Acquisition of noncontrolling interest | — | — | (55.2 | ) | — | — | — | (55.2 | ) | |||||||||||||||||
Balance at September 30, 2018 | 42,322 | $ | 0.4 | $ | 95.1 | $ | 271.4 | $ | (17.8 | ) | $ | (26.4 | ) | $ | 322.7 |
Noncontrolling Interest | |||||||
In millions | 2018 | 2017 | |||||
Balance at December 31, | $ | 14.0 | $ | 7.6 | |||
Net income (loss) attributable to noncontrolling interests | 12.7 | 12.3 | |||||
Noncontrolling interest distributions | (15.3 | ) | (8.2 | ) | |||
Acquisition of noncontrolling interest | $ | (11.4 | ) | $ | — | ||
Balance at September 30, | $ | — | $ | 11.7 |
Ingevity Stockholders' Equity | ||||||||||||||||||||||||||
Common Stock | Additional paid in capital | Retained earnings | Accumulated other comprehensive income (loss) | Treasury stock | Total | |||||||||||||||||||||
In millions, except per share data | Shares | Amount | ||||||||||||||||||||||||
Balance at June 30, 2018 | 42,309 | $ | 0.4 | $ | 146.9 | $ | 221.9 | $ | (14.0 | ) | $ | (17.2 | ) | $ | 338.0 | |||||||||||
Net income (loss) | — | — | — | 49.5 | — | — | 49.5 | |||||||||||||||||||
Other comprehensive income (loss) | — | — | — | — | (3.8 | ) | — | (3.8 | ) | |||||||||||||||||
Common stock issued | 13 | — | — | — | — | — | — | |||||||||||||||||||
Exercise of stock options, net | — | — | — | — | — | — | — | |||||||||||||||||||
Tax payments related to vested restricted stock units | — | — | — | — | — | (0.6 | ) | (0.6 | ) | |||||||||||||||||
Share repurchase program | — | — | — | — | — | (9.0 | ) | (9.0 | ) | |||||||||||||||||
Share-based compensation plans | — | — | 3.4 | — | — | 0.4 | 3.8 | |||||||||||||||||||
Adoption of ASC 606 | — | — | — | — | — | — | — | |||||||||||||||||||
Acquisition of noncontrolling interest | — | $ | — | $ | (55.2 | ) | $ | — | $ | — | $ | — | $ | (55.2 | ) | |||||||||||
Balance at September 30, 2018 | 42,322 | $ | 0.4 | $ | 95.1 | $ | 271.4 | $ | (17.8 | ) | $ | (26.4 | ) | $ | 322.7 |
Noncontrolling Interest | |||||||
In millions | 2018 | 2017 | |||||
Balance at June 30, | $ | 11.3 | $ | 10.5 | |||
Net income (loss) attributable to noncontrolling interests | 2.2 | 4.6 | |||||
Noncontrolling interest distributions | (2.1 | ) | (3.4 | ) | |||
Acquisition of noncontrolling interest | $ | (11.4 | ) | $ | — | ||
Balance at September 30, | $ | — | $ | 11.7 |
Three Months Ended September 30, | |||||||||||||||
Pensions | Other Benefits | ||||||||||||||
In millions | 2018 | 2017 | 2018 | 2017 | |||||||||||
Components of net periodic benefit cost (income): | |||||||||||||||
Service cost (1) | $ | 0.5 | $ | 0.3 | $ | — | $ | — | |||||||
Interest cost (2) | 0.2 | 0.2 | — | — | |||||||||||
Expected return on plan assets (2) | (0.2 | ) | (0.2 | ) | — | — | |||||||||
Recognized net actuarial and other (gain) loss (2) | — | — | — | — | |||||||||||
Net periodic benefit cost (income) | $ | 0.5 | $ | 0.3 | $ | — | $ | — |
(1) | Included in "Cost of sales" on the condensed consolidated statements of operations. |
(2) | Included in "Other (income) expense, net" on the condensed consolidated statements of operations. |
Nine Months Ended September 30, | |||||||||||||||
Pensions | Other Benefits | ||||||||||||||
In millions | 2018 | 2017 | 2018 | 2017 | |||||||||||
Components of net periodic benefit cost (income): | |||||||||||||||
Service cost (1) | $ | 1.3 | $ | 0.8 | $ | — | $ | — | |||||||
Interest cost (2) | 0.6 | 0.6 | — | — | |||||||||||
Expected return on plan assets (2) | (0.6 | ) | (0.6 | ) | — | — | |||||||||
Recognized net actuarial and other (gain) loss (2) | 0.1 | — | — | — | |||||||||||
Net periodic benefit cost (income) | $ | 1.4 | $ | 0.8 | $ | — | $ | — |
(1) | Included in "Cost of sales" on the condensed consolidated statements of operations. |
(2) | Included in "Other (income) expense, net" on the condensed consolidated statements of operations. |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
In millions | 2018 | 2017 | 2018 | 2017 | |||||||||||
Restructuring and other (income) charges, net | |||||||||||||||
Gain on sale of assets and businesses | $ | — | $ | — | $ | (0.6 | ) | $ | — | ||||||
Severance and other employee-related costs (1) | — | — | — | 1.3 | |||||||||||
Other (income) charges, net (2) | — | 0.1 | — | 2.2 | |||||||||||
Total restructuring and other (income) charges, net | $ | — | $ | 0.1 | $ | (0.6 | ) | $ | 3.5 |
(1) | Represents severance and employee benefit charges. Income represents adjustments to previously recorded severance and employee benefits. |
(2) | Primarily represents costs associated with rental payments, contract terminations, and other miscellaneous exit costs. Other income primarily represents favorable developments on previously recorded exit costs as recoveries associated with restructuring activities. |
Balance at | Change in | Cash | Balance at | |||||||||||||
In millions | 12/31/2017(1) | Reserve(2) | Payments | Other(3) | 9/30/2018(1) | |||||||||||
Restructuring Reserves | $ | 0.2 | — | (0.1 | ) | — | $ | 0.1 |
(1) | Included in "Accrued expenses" on the condensed consolidated balance sheets. |
(2) | Includes severance and other employee-related costs, exited leases, contract terminations and other miscellaneous exit costs. Any asset write-downs including accelerated depreciation and impairment charges are not included in the above table. |
(3) | Primarily foreign currency translation adjustments. |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||
Effective tax rate | 24.1 | % | 30.3 | % | 21.6 | % | 31.6 | % |
Three Months Ended September 30, | |||||||||||||||||
2018 | 2017 | ||||||||||||||||
In millions, except percentages | Before tax | Tax | Effective tax rate % impact | Before tax | Tax | Effective tax rate % impact | |||||||||||
Consolidated operations | $ | 68.1 | $ | 16.4 | 24.1 | % | $ | 55.1 | $ | 16.7 | 30.3 | % | |||||
Discrete items: | |||||||||||||||||
Separation costs | — | — | 0.2 | 0.1 | |||||||||||||
Restructuring and other (income) charges, net | — | — | 0.1 | 0.1 | |||||||||||||
Acquisition and other related costs (1) | — | — | 4.1 | 1.5 | |||||||||||||
Results of legal entities with full valuation allowances (2) | — | — | 0.5 | — | |||||||||||||
Other tax only discrete items | — | 0.2 | — | 0.1 | |||||||||||||
Total discrete items | — | 0.2 | 4.9 | 1.8 | |||||||||||||
Consolidated operations, before discrete items | $ | 68.1 | $ | 16.6 | $ | 60.0 | $ | 18.5 | |||||||||
Quarterly effect of changes in the EAETR (3) | 24.4 | % | 30.8 | % |
Nine Months Ended September 30, | |||||||||||||||||
2018 | 2017 | ||||||||||||||||
In millions, except percentages | Before tax | Tax | Effective tax rate % impact | Before tax | Tax | Effective tax rate % impact | |||||||||||
Consolidated operations | $ | 178.2 | $ | 38.5 | 21.6 | % | $ | 142.1 | $ | 44.9 | 31.6 | % | |||||
Discrete items: | |||||||||||||||||
Separation costs | — | — | 0.7 | 0.3 | |||||||||||||
Restructuring and other (income) charges, net | (0.6 | ) | — | 3.5 | 0.7 | ||||||||||||
Acquisition and other related costs (1) | 5.7 | 1.3 | 4.1 | 1.5 | |||||||||||||
Results of legal entities with full valuation allowances (2) | — | — | 2.0 | — | |||||||||||||
Other tax only discrete items | — | 0.3 | — | (0.3 | ) | ||||||||||||
Total discrete items | 5.1 | 1.6 | 10.3 | 2.2 | |||||||||||||
Consolidated operations, before discrete items | $ | 183.3 | $ | 40.1 | $ | 152.4 | $ | 47.1 | |||||||||
EAETR (3) | 21.9 | % | 30.9 | % |
(1) | Charges primarily relate to legal and professional fees and inventory step-up amortization incurred associated with the Acquisition. The legal and professional fees of $4.3 million and the inventory step-up amortization of $1.4 million are included in "Acquisition-related costs" and "Cost of sales" on the condensed consolidated statement of operations, respectively. |
(2) | Legal entities within the consolidated results of Ingevity with full valuation allowances are treated discretely for income tax purposes. |
(3) | Decrease in EAETR for the three and nine months ended September 30, 2018, as compared to September 30, 2017, is primarily due to the effect of U.S. Tax Reform, which was enacted in December 2017. |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
In millions | 2018 | 2017 | 2018 | 2017 | |||||||||||
Net sales | |||||||||||||||
Performance Materials | $ | 96.3 | $ | 85.4 | $ | 287.9 | $ | 258.3 | |||||||
Automotive Technologies product line | 86.6 | 75.6 | 258.6 | 230.1 | |||||||||||
Process Purifications product line | 9.7 | 9.8 | 29.3 | 28.2 | |||||||||||
Performance Chemicals | $ | 214.9 | $ | 178.7 | $ | 567.1 | $ | 484.6 | |||||||
Oilfield Technologies product line | 32.5 | 20.3 | 84.0 | 58.1 | |||||||||||
Pavement Technologies product line | 68.1 | 64.5 | 152.2 | 137.2 | |||||||||||
Industrial Specialties product line | 114.3 | 93.9 | 330.9 | 289.3 | |||||||||||
Total net sales (1) | $ | 311.2 | $ | 264.1 | $ | 855.0 | $ | 742.9 | |||||||
Segment operating profit (2) | |||||||||||||||
Performance Materials | $ | 36.3 | $ | 29.3 | $ | 109.8 | $ | 89.5 | |||||||
Performance Chemicals | 39.7 | 33.4 | 95.3 | 70.2 | |||||||||||
Total segment operating profit (1) | $ | 76.0 | $ | 62.7 | $ | 205.1 | $ | 159.7 | |||||||
Separation costs (3) | — | (0.2 | ) | — | (0.7 | ) | |||||||||
Restructuring and other income (charges), net (4) | — | (0.1 | ) | 0.6 | (3.5 | ) | |||||||||
Acquisition and other related costs (5) | — | (4.1 | ) | (5.7 | ) | (4.1 | ) | ||||||||
Interest expense, net | (7.9 | ) | (3.2 | ) | (21.8 | ) | (9.3 | ) | |||||||
(Provision) benefit for income taxes | (16.4 | ) | (16.7 | ) | (38.5 | ) | (44.9 | ) | |||||||
Net (income) loss attributable to noncontrolling interest | (2.2 | ) | (4.6 | ) | (12.7 | ) | (12.3 | ) | |||||||
Net income (loss) attributable to Ingevity stockholders | $ | 49.5 | $ | 33.8 | $ | 127.0 | $ | 84.9 |
(1) | Relates to external customers only, all intersegment sales and related profit have been eliminated in consolidation. |
(2) | Segment operating profit is defined as segment revenue less segment operating expenses (segment operating expenses consist of costs of sales, selling, general and administrative expenses and other (income) expense, net). We have excluded the following items from segment operating profit: interest expense associated with corporate debt facilities, income taxes, gains (or losses) on divestitures of businesses, restructuring and other (income) charges, separation costs, acquisition and other related costs and net income (loss) attributable to noncontrolling interest. |
(3) | Represents transaction costs associated with separation of Ingevity from Westrock. These costs are primarily related to professional fees associated with separation activities within the finance, tax, and legal functions. |
(4) | Income (charges) for all periods presented related to our Performance Chemicals segment. |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
In millions | 2018 | 2017 | 2018 | 2017 | |||||||||||
Legal and professional service fees (1) | $ | — | $ | 4.1 | $ | 4.3 | $ | 4.1 | |||||||
Inventory fair value step-up amortization (2) | — | — | 1.4 | — | |||||||||||
Acquisition and other related costs | $ | — | $ | 4.1 | $ | 5.7 | $ | 4.1 | |||||||
_______________ | |||||||||||||||
(1) Included within "Acquisition and other related costs" on the condensed consolidated statement of operations. | |||||||||||||||
(2) Included within "Cost of sales" on the condensed consolidated statement of operations. |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
In millions, except share and per share data | 2018 | 2017 | 2018 | 2017 | |||||||||||
Net income (loss) attributable to Ingevity stockholders | $ | 49.5 | $ | 33.8 | $ | 127.0 | $ | 84.9 | |||||||
Basic and Diluted earnings (loss) per share | |||||||||||||||
Basic earnings (loss) per share attributable to Ingevity stockholders | $ | 1.18 | $ | 0.80 | $ | 3.02 | $ | 2.01 | |||||||
Diluted earnings (loss) per share attributable to Ingevity stockholders | 1.16 | 0.79 | 2.98 | 2.00 | |||||||||||
Shares (in thousands) | |||||||||||||||
Weighted average number of common stock outstanding - Basic | 42,037 | 42,139 | 42,070 | 42,137 | |||||||||||
Weighted average additional shares assuming conversion of potential common stock | 620 | 410 | 554 | 383 | |||||||||||
Shares - diluted basis | 42,657 | 42,549 | 42,624 | 42,520 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||
In thousands | 2018 | 2017 | 2018 | 2017 | |||||||
Average number of potential common shares - antidilutive | 17 | 93 | 77 | 94 |
• | we are exposed to risks that the expected benefits from the acquisition of Georgia Pacific's pine chemical business will not be realized or will not be realized within the expected time period, the risk that the businesses will not be integrated successfully, and the risk of significant transaction costs and unknown or understated liabilities; |
• | we may be adversely affected by general economic and financial conditions beyond our control; |
• | we are exposed to risks related to our international sales and operations; |
• | our reported results could be adversely affected by currency exchange rates and currency devaluation could impair our competitiveness; |
• | our operations outside the U.S. require us to comply with a number of U.S. and foreign regulations, violations of which could have a material adverse effect on our financial condition and results of operations; |
• | we are dependent upon attracting and retaining key personnel; |
• | adverse conditions in the global automotive market or adoption of alternative or competitive technologies may adversely affect demand for our automotive carbon products; |
• | we face competition from producers of alternative products and new technologies, and new or emerging competitors; |
• | if increasingly more stringent air quality standards worldwide are not adopted, our growth could be impacted; |
• | we may be adversely affected by a decrease in government infrastructure spending; |
• | our printing inks business serves customers in a market that is facing declining volumes; |
• | our Performance Chemicals segment is highly dependent on crude tall oil ("CTO") which is limited in supply; |
• | lack of access to sufficient CTO would impact our ability to produce CTO-based products; |
• | a prolonged period of low energy prices may materially impact our results of operations; |
• | we are dependent upon third parties for the provision of certain critical operating services at several of our facilities; |
• | the occurrence of a natural disaster, such as a hurricane, winter or tropical storm, earthquake, tornado, flood, fire or other matters such as labor difficulties, equipment failure or unscheduled maintenance and repair, which could result in operational disruptions of varied duration; |
• | if we are unable to protect our intellectual property and other proprietary information we may lose significant competitive advantage; |
• | information technology security risks; |
• | government policies and regulations, including, but not limited to, those affecting the environment, climate change, tax policies, tariffs, and the chemicals industry; and |
• | losses due to lawsuits arising out of environmental damage or personal injuries associated with chemical or other manufacturing processes. |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
In millions | 2018 | 2017 | 2018 | 2017 | |||||||||||
Net sales | $ | 311.2 | $ | 264.1 | $ | 855.0 | $ | 742.9 | |||||||
Cost of sales | 192.6 | 170.9 | 535.8 | 489.2 | |||||||||||
Gross profit | 118.6 | 93.2 | 319.2 | 253.7 | |||||||||||
Selling, general and administrative expenses | 34.5 | 26.2 | 96.5 | 78.5 | |||||||||||
Research and technical expenses | 5.6 | 4.8 | 16.3 | 14.6 | |||||||||||
Separation costs | — | 0.2 | — | 0.7 | |||||||||||
Restructuring and other (income) charges, net | — | 0.1 | (0.6 | ) | 3.5 | ||||||||||
Acquisition-related costs | — | 4.1 | 4.3 | 4.1 | |||||||||||
Other (income) expense, net | 2.5 | (0.5 | ) | 2.7 | 0.9 | ||||||||||
Interest expense, net | 7.9 | 3.2 | 21.8 | 9.3 | |||||||||||
Income (loss) before income taxes | 68.1 | 55.1 | 178.2 | 142.1 | |||||||||||
Provision (benefit) for income taxes | 16.4 | 16.7 | 38.5 | 44.9 | |||||||||||
Net income (loss) | 51.7 | 38.4 | 139.7 | 97.2 | |||||||||||
Less: Net income (loss) attributable to noncontrolling interest | 2.2 | 4.6 | 12.7 | 12.3 | |||||||||||
Net income (loss) attributable to Ingevity stockholders | $ | 49.5 | $ | 33.8 | $ | 127.0 | $ | 84.9 |
Percentage change vs. prior year | |||||||||||
In millions, except percentages | Net sales | Total change | Currency effect | Price/Mix | Volume | ||||||
Three months ended September 30, 2018 | $ | 311.2 | 18% | —% | 2% | 16% | |||||
Nine months ended September 30, 2018 | $ | 855.0 | 15% | 1% | 1% | 13% |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
In millions | 2018 | 2017 | 2018 | 2017 | |||||||||||
Gain on sale of assets and businesses | $ | — | $ | — | $ | (0.6 | ) | $ | — | ||||||
Severance and other employee-related costs (1) | — | — | — | 1.3 | |||||||||||
Other (income) charges, net (2) | — | 0.1 | — | 2.2 | |||||||||||
Total restructuring and other (income) charges, net | $ | — | $ | 0.1 | $ | (0.6 | ) | $ | 3.5 |
(1) | Represents severance and employee benefit charges. Income represents adjustments to previously recorded severance and employee benefits. |
(2) | Primarily represents costs associated with rental payments, contract terminations, and other miscellaneous exit costs. Other Income primarily represents favorable developments on previously recorded exit costs as recoveries associated with restructuring activities. |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
In millions | 2018 | 2017 | 2018 | 2017 | |||||||||||
Foreign currency exchange (income) loss | $ | 1.2 | $ | (0.2 | ) | $ | 2.2 | $ | 1.4 | ||||||
Royalty and sundry (income) loss | (0.2 | ) | (0.2 | ) | (0.7 | ) | (0.6 | ) | |||||||
Impairment of equity investment (1) | 1.5 | — | 1.5 | — | |||||||||||
Other (income) expense, net | — | (0.1 | ) | (0.3 | ) | 0.1 | |||||||||
Total Other (income) expense, net | $ | 2.5 | $ | (0.5 | ) | $ | 2.7 | $ | 0.9 | ||||||
_______________ | |||||||||||||||
(1) Represents an impairment charge recorded during the three months ended September 30, 2018 related to an equity investment within our Performance Materials segment. |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
In millions | 2018 | 2017 | 2018 | 2017 | |||||||||||
Interest expense on capital lease obligations | $ | 1.5 | $ | 1.5 | 4.6 | 4.6 | |||||||||
Interest expense on revolving credit and term loan facilities (1) | 3.8 | 2.7 | 10.5 | 8.3 | |||||||||||
Interest expense on senior notes (1) | 3.6 | — | 9.8 | — | |||||||||||
Interest income associated with our Restricted investment | (0.5 | ) | (0.4 | ) | (1.5 | ) | (1.5 | ) | |||||||
Capitalized interest | (0.3 | ) | (1.0 | ) | (0.7 | ) | (2.8 | ) | |||||||
Other interest expense, net | (0.2 | ) | 0.4 | (0.9 | ) | 0.7 | |||||||||
Total Interest expense, net | $ | 7.9 | $ | 3.2 | $ | 21.8 | $ | 9.3 |
(1) | See Note 10 within the Condensed Consolidated Financial Statements for more information. |
In millions | Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Automotive Technologies product line | $ | 86.6 | $ | 75.6 | $ | 258.6 | $ | 230.1 | |||||||
Process Purifications product line | 9.7 | 9.8 | 29.3 | 28.2 | |||||||||||
Total Performance Materials - Net sales | $ | 96.3 | $ | 85.4 | $ | 287.9 | $ | 258.3 | |||||||
Segment operating profit | $ | 36.3 | $ | 29.3 | $ | 109.8 | $ | 89.5 |
Percentage change vs. prior year | |||||||||||||||
Performance Materials (In millions, except percentages) | Net sales | Total change | Currency effect | Price/Mix | Volume | ||||||||||
Three months ended September 30, 2018 | $ | 96.3 | 13 | % | (1 | )% | 1 | % | 13 | % | |||||
Nine months ended September 30, 2018 | $ | 287.9 | 11 | % | 1 | % | — | % | 10 | % |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
In millions | 2018 | 2017 | 2018 | 2017 | |||||||||||
Oilfield Technologies product line | $ | 32.5 | $ | 20.3 | $ | 84.0 | $ | 58.1 | |||||||
Pavement Technologies product line | 68.1 | 64.5 | 152.2 | 137.2 | |||||||||||
Industrial Specialties product line | 114.3 | 93.9 | 330.9 | 289.3 | |||||||||||
Total Performance Chemicals - Net sales | $ | 214.9 | $ | 178.7 | $ | 567.1 | $ | 484.6 | |||||||
Segment operating profit | $ | 39.7 | $ | 33.4 | $ | 95.3 | $ | 70.2 |
Percentage change vs. prior year | |||||||||||||||
Performance Chemicals (In millions, except percentages) | Net sales | Total change | Currency effect | Price/Mix | Volume | ||||||||||
Three months ended September 30, 2018 | $ | 214.9 | 20 | % | — | % | 2 | % | 18 | % | |||||
Nine months ended September 30, 2018 | $ | 567.1 | 17 | % | 1 | % | 2 | % | 14 | % |
Performance Chemical Pro Forma Financial Results | |||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
In millions | 2018 | 2017 | 2018 | 2017 | |||||||||||
Net sales | |||||||||||||||
Performance Chemicals, as reported (1) | $ | 214.9 | $ | 178.7 | $ | 567.1 | $ | 484.6 | |||||||
Pine Chemical Business, pro forma (2) | — | 24.0 | 20.2 | 71.6 | |||||||||||
Pro Forma Combined Net Sales (3) | $ | 214.9 | $ | 202.7 | $ | 587.3 | $ | 556.2 | |||||||
Segment Operating Profit | |||||||||||||||
Performance Chemicals, as reported (1) | $ | 39.7 | $ | 33.4 | $ | 95.3 | $ | 70.2 | |||||||
Pine Chemical Business, pro forma (2) | — | 3.1 | 0.8 | 5.7 | |||||||||||
Pro Forma Combined Segment Operating Profit (3) | $ | 39.7 | $ | 36.5 | $ | 96.1 | $ | 75.9 | |||||||
_______________ | |||||||||||||||
(1) As reported amounts are the results of operations of Performance Chemicals, including the results of the Pine Chemical Business, post Acquisition Date. | |||||||||||||||
(2) Pro forma amounts include historical results of the Pine Chemical Business, prior to the Acquisition Date. These amounts also include adjustments as if the Acquisition had occurred on January 1, 2017, including the effects of purchase accounting. The pro forma amounts do not include adjustments for expenses related to integration activities, cost savings, or synergies that have been or may have been realized had we acquired the Pine Chemical Business on January 1, 2017. | |||||||||||||||
(3) The pro forma combined results are not necessarily indicative of what the results would have been had we acquired the Pine Chemical Business on January 1, 2017 nor indicative of future results. |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
In millions | 2018 | 2017 | 2018 | 2017 | |||||||||||
Oilfield Technologies product line | $ | 32.5 | $ | 26.4 | $ | 88.6 | $ | 75.0 | |||||||
Pavement Technologies product line | 68.1 | 64.9 | 204.6 | 137.8 | |||||||||||
Industrial Specialties product line | 114.3 | 111.4 | 294.1 | 343.4 | |||||||||||
Pro Forma Combined Net Sales - Performance Chemicals | $ | 214.9 | $ | 202.7 | $ | 587.3 | $ | 556.2 |
Percentage change vs. prior year | |||||||||||||||
Performance Chemicals (In millions, except percentages) | Pro Forma Combined Net sales | Total change | Currency effect | Price/Mix | Volume | ||||||||||
Three months ended September 30, 2018 | $ | 214.9 | 6 | % | — | % | 2 | % | 4 | % | |||||
Nine months ended September 30, 2018 | $ | 587.3 | 6 | % | 1 | % | 1 | % | 4 | % |
Reconciliation of Net Income (Loss) to Adjusted EBITDA | |||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
In millions | 2018 | 2017 | 2018 | 2017 | |||||||||||
Net income (loss) (GAAP) | $ | 51.7 | $ | 38.4 | $ | 139.7 | $ | 97.2 | |||||||
Provision (benefit) for income taxes | 16.4 | 16.7 | 38.5 | 44.9 | |||||||||||
Interest expense, net | 7.9 | 3.2 | 21.8 | 9.3 | |||||||||||
Depreciation and amortization | 14.7 | 10.0 | 42.1 | 30.4 | |||||||||||
Separation costs | — | 0.2 | — | 0.7 | |||||||||||
Restructuring and other (income) charges, net | — | 0.1 | (0.6 | ) | 3.5 | ||||||||||
Acquisition and other related costs (1) | — | 4.1 | 5.7 | 4.1 | |||||||||||
Adjusted EBITDA (Non-GAAP) | $ | 90.7 | $ | 72.7 | $ | 247.2 | $ | 190.1 |
(1) | Charges primarily relate to legal and professional fees and inventory step-up amortization incurred associated with the Acquisition. For the three and nine months ended September 30, 2018, the legal and professional fees of zero and $4.3 million, respectively, and the inventory step-up amortization of zero and $1.4 million, respectively, are included in "Acquisition-related costs" and "Cost of sales" on the condensed consolidated statement of operations, respectively. |
Reconciliation of Segment Operating Profit to Segment EBITDA | |||||||||||||||
Performance Materials | Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||
In millions | 2018 | 2017 | 2018 | 2017 | |||||||||||
Segment operating profit (GAAP) | $ | 36.3 | $ | 29.3 | $ | 109.8 | $ | 89.5 | |||||||
Depreciation and amortization | 5.3 | 4.9 | 16.7 | 14.9 | |||||||||||
Segment EBITDA (Non-GAAP) | $ | 41.6 | $ | 34.2 | $ | 126.5 | $ | 104.4 |
Reconciliation of Segment Operating Profit to Segment EBITDA | |||||||||||||||
Performance Chemicals | Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||
In millions | 2018 | 2017 | 2018 | 2017 | |||||||||||
Segment operating profit (GAAP) | $ | 39.7 | $ | 33.4 | $ | 95.3 | $ | 70.2 | |||||||
Depreciation and amortization | 9.4 | 5.1 | 25.4 | 15.5 | |||||||||||
Segment EBITDA (Non-GAAP) | $ | 49.1 | $ | 38.5 | $ | 120.7 | $ | 85.7 |
Reconciliation of Pro Forma Combined Segment Operating Profit to Pro forma Combined Segment EBITDA | |||||||||||||||
Performance Chemicals | Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||
In millions | 2018 | 2017 | 2018 | 2017 | |||||||||||
Pro Forma Combined Segment Operating Profit | $ | 39.7 | $ | 36.5 | $ | 96.1 | $ | 75.9 | |||||||
Pro Forma Combined Depreciation and amortization | 9.4 | 9.5 | 28.5 | 28.9 | |||||||||||
Pro Forma Combined Segment EBITDA | $ | 49.1 | $ | 46.0 | $ | 124.6 | $ | 104.8 |
Nine Months Ended September 30, | |||||||
In millions | 2018 | 2017 | |||||
Net cash provided (used) by operating activities | $ | 166.4 | $ | 133.6 | |||
Net cash provided (used) by investing activities | (376.3 | ) | (42.0 | ) | |||
Net cash provided (used) by financing activities | 179.9 | (49.9 | ) |
In millions | September 30, 2018 | December 31, 2017 | |||||
Cash and cash equivalents | $ | 57.5 | $ | 87.9 | |||
Accounts receivable, net | 140.4 | 100.0 | |||||
Inventories, net | 194.3 | 160.0 | |||||
Prepaid and other current assets | 28.6 | 20.8 | |||||
Total current assets | $ | 420.8 | $ | 368.7 |
In millions | September 30, 2018 | December 31, 2017 | |||||
Accounts payable | $ | 108.7 | $ | 83.1 | |||
Accrued expenses | 26.2 | 20.0 | |||||
Accrued payroll and employee benefits | 32.5 | 39.2 | |||||
Current maturities of long-term debt | 4.9 | 9.4 | |||||
Income taxes payable | 7.5 | 1.5 | |||||
Total current liabilities | $ | 179.8 | $ | 153.2 |
Capital expenditure categories | Nine Months Ended September 30, | ||||||
In millions | 2018 | 2017 | |||||
Maintenance | $ | 31.9 | $ | 23.0 | |||
Safety, health and environment | 4.6 | 3.9 | |||||
Growth and cost improvement | 19.4 | 9.3 | |||||
Total capital expenditures | $ | 55.9 | $ | 36.2 |
ISSUER PURCHASES OF SECURITIES | |||||||||||||||||
Publicly Announced Program | |||||||||||||||||
Period | Total Number of Shares Purchased | Average Price Paid Per Share | Cumulative Number of Shares Purchased | Total Dollar Amount Purchased | Maximum Dollar Value of Shares that May Yet be Purchased | ||||||||||||
July 1-31, 2018 | 30,900 | $ | 87.14 | 30,900 | $ | 2,692,554 | $ | 81,638,154 | |||||||||
August 1-31, 2018 | 34,500 | 99.53 | 34,500 | 3,433,613 | 78,204,541 | ||||||||||||
September 1-30, 2018 | 28,500 | 101.36 | 28,500 | 2,888,798 | 75,315,743 | ||||||||||||
Total | 93,900 | $ | 96.01 | 93,900 | $ | 9,014,965 | $ | 75,315,743 |
Exhibit No. | Description of Exhibit |
Amended and Restated Certificate of Incorporation of Ingevity Corporation (incorporated by reference to Exhibit 3.1 to Form 8-K (File No. 001-37586) filed May 16, 2016). | |
Amended and Restated Bylaws of Ingevity Corporation (incorporated by reference to Exhibit 3.2 to Form 8-K (File No. 001-37856) filed May 16, 2016). | |
Incremental Facility Agreement and Amendment No. 2, by and among Ingevity Corporation, Ingevity Holdings SPRL, the other loan parties party thereto, the lenders party thereto and Wells Fargo Bank, N.A., as administrative agent, dated as of August 7, 2018 (incorporated by reference to Exhibit 10.1 to Form 8-K (File No. 001-37586) filed August 9, 2018. | |
Rule 13a-14(a)/15d-14(a) Certification of the Company’s Principal Executive Officer. | |
Rule 13a-14(a)/15d-14(a) Certification of the Company’s Principal Financial Officer. | |
Section 1350 Certification of the Company’s Principal Executive Officer. The information contained in this Exhibit shall not be deemed filed with the Securities and Exchange Commission nor incorporated by reference in any registration statement filed by the registrant under the Securities Act of 1933, as amended. | |
Section 1350 Certification of the Company’s Principal Financial Officer. The information contained in this Exhibit shall not be deemed filed with the Securities and Exchange Commission nor incorporated by reference in any registration statement filed by the registrant under the Securities Act of 1933, as amended. | |
101 | Interactive Data File |
INGEVITY CORPORATION | |
(Registrant) | |
By: | /S/ JOHN C. FORTSON |
John C. Fortson | |
Executive Vice President, Chief Financial Officer & Treasurer | |
(Principal Financial Officer and Duly Authorized Officer) |
1. | I have reviewed this report on Form 10-Q of Ingevity Corporation; |
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 officer 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 officer 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. |
Date: | November 1, 2018 |
By: | /S/ D. MICHAEL WILSON |
D. Michael Wilson | |
President and Chief Executive Officer |
1. | I have reviewed this report on Form 10-Q of Ingevity Corporation; |
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 officer 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 officer 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. |
Date: | November 1, 2018 |
By: | /S/ JOHN C. FORTSON |
John C. Fortson | |
Executive Vice President, Chief Financial Officer & Treasurer |
/S/ D. MICHAEL WILSON |
D. Michael Wilson |
President and Chief Executive Officer |
/S/ JOHN C. FORTSON |
John C. Fortson |
Executive Vice President, Chief Financial Officer & Treasurer |
Document and Entity Information - shares |
9 Months Ended | |
---|---|---|
Sep. 30, 2018 |
Oct. 31, 2018 |
|
Document and Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2018 | |
Document Fiscal Year Focus | 2018 | |
Document Fiscal Period Focus | Q3 | |
Entity Registrant Name | Ingevity Corp | |
Entity Central Index Key | 0001653477 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common stock, shares outstanding | 41,968,680 | |
Entity Emerging Growth Company | false | |
Entity Small Business | false |
Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) (Parenthetical) - USD ($) |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2018 |
Sep. 30, 2017 |
|
Statement of Comprehensive Income [Abstract] | ||||
Unrealized tax (benefit) expense | $ 100,000 | $ 0 | $ 300,000 | $ 0 |
Reclassifications tax expense (benefit) | (200,000) | 0 | (200,000) | 0 |
Total derivative instruments tax (benefit) expense | (100,000) | 0 | 100,000 | 0 |
Reclassifications tax expense (benefit) | 0 | 0 | 0 | 0 |
Total pension and other postretirement benefits tax (benefit) expense | 0 | 0 | 0 | 0 |
Other comprehensive income (loss) tax (benefit) expense | $ (100,000.0) | $ 0 | $ 100,000.0 | $ 0 |
Condensed Consolidated Balance Sheets (Parentheticals) - USD ($) $ in Millions |
Sep. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 0.3 | $ 0.4 |
Preferred stock, par value (usd per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (shares) | 50,000,000 | 50,000,000 |
Preferred stock, shares issued (shares) | 0 | 0 |
Preferred stock, shares outstanding (shares) | 0 | 0 |
Common stock, par value (usd per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (shares) | 300,000,000 | 300,000,000 |
Common stock, shares issued (shares) | 42,322,153 | 42,208,973 |
Common stock shares outstanding (shares) | 41,992,323 | 42,089,103 |
Treasury shares (in shares) | 329,830 | 119,870 |
Condensed Consolidated Statements of Cash Flows (Unaudited) (Parentheticals) - USD ($) $ in Millions |
Sep. 30, 2018 |
Sep. 30, 2017 |
---|---|---|
Statement of Cash Flows [Abstract] | ||
Restricted cash and cash equivalents | $ 0.3 | $ 0.3 |
Cash and cash equivalents | $ 57.5 | $ 70.2 |
Background |
9 Months Ended |
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Sep. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Background | Background Ingevity Corporation ("Ingevity," "the Company," "we," "us" or "our") is a leading global manufacturer of specialty chemicals and high performance activated carbon materials. We provide innovative solutions to meet our customers’ unique and demanding requirements through proprietary formulated products. We report in two business segments, Performance Materials and Performance Chemicals. Our Performance Materials segment consists of our automotive technologies and process purifications product lines. Performance Materials manufactures products in the form of powder, granular, extruded pellets or structured honeycombs and activated carbon sheets. Automotive technologies products are sold into the gasoline vapor emission control markets within the automotive industry while process purifications products are sold into the food, water, beverage, air emissions control, corrosion protection, odor reduction and chemical purification industries. Our Performance Chemicals segment consists of our pavement technologies, oilfield technologies and industrial specialties product lines. Performance Chemicals manufactures products derived from crude tall oil and lignin extracted from the kraft paper making process. Performance Chemicals products serve as critical inputs used in a variety of high performance applications, including asphalt paving (pavement technologies product line), oil exploration and production (oilfield technologies product line), printing inks, adhesives, agrochemicals, and lubricants (industrial specialties product line). |
Basis of Consolidation and Presentation |
9 Months Ended |
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Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Basis of Consolidation and Presentation | Basis of Consolidation and Presentation In all periods presented within these Condensed Consolidated Financial Statements, all intercompany accounts and transactions have been eliminated. The Condensed Consolidated Financial Statements include the accounts of Ingevity and subsidiaries in which a controlling interest is maintained. If Ingevity's ownership is less than 100 percent, the outside stockholders' interests are shown as noncontrolling interest. In all periods presented, the noncontrolling interest reported within the Condensed Consolidated Financial Statements represents the 30 percent ownership interest held by a third party U.S.-based company in our consolidated Purification Cellutions LLC legal entity. Purification Cellutions LLC is the legal entity that owns the technology associated with, and manufactures, our structured honeycomb products within our Performance Materials segment. See Note 11 for information regarding our recent acquisition of the remaining 30 percent interest in Purification Cellutions, LLC on August 1, 2018. These Condensed Consolidated Financial Statements have not been audited. However, in the opinion of management, all normal recurring adjustments necessary to state fairly the financial position and the results of operations for the interim periods presented have been made. These Condensed Consolidated Financial Statements have been prepared on the basis of accounting principles and practices generally accepted in the United States (“GAAP”) applied consistently with those used in the preparation of the Annual Consolidated Financial Statements for the years ended December 31, 2017, 2016 and 2015, collectively referred to as the “Annual Consolidated Financial Statements” included in our Annual Report on Form 10-K for the year ended December 31, 2017 (the "2017 Annual Report"). Certain information and footnote disclosures normally included in our Annual Consolidated Financial Statements presented in accordance with GAAP have been condensed or omitted. The consolidated results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. The accompanying Condensed Consolidated Financial Statements should be read in conjunction with the Annual Consolidated Financial Statements and notes thereto included in the 2017 Annual Report. Certain prior year amounts have been reclassified to conform with the current year's presentation. |
New accounting guidance |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
New accounting guidance | New accounting guidance In August 2018, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2018-15 "Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40) Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract." This ASU requires companies to defer specific implementation costs incurred in a Cloud Computing Arrangement ("CCA") that are often expensed as incurred under current GAAP, and recognize the expense over the noncancellable term of the CCA. The new standard is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Although we are still evaluating the impact of this new standard, we do not believe that the adoption will materially impact our Condensed Consolidated Financial Statements and related disclosures. In August 2018, the FASB issued ASU 2018-13 "Fair Value Measurement (Topic 820) Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement." This ASU eliminates, amends, and adds disclosure requirements for fair value measurements. The new standard is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Although we are still evaluating the impact of this new standard, we do not believe that the adoption will materially impact our Condensed Consolidated Financial Statements and related disclosures. In June 2018, the FASB issued ASU 2018-07 "Compensation-Stock Compensation (Topic 718) - Improvements to Nonemployee Share-Based Payment Accounting." This ASU provides for a single accounting model for all share-based payments, with the employee based guidance now applying to nonemployee share-based transactions. The new standard is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Although we are still evaluating the impact of this new standard, we do not believe that the adoption will materially impact our Condensed Consolidated Financial Statements and related disclosures. In February 2018, the FASB issued ASU 2018-02 "Income Statement-Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from AOCI." This ASU provides for the reclassification of the effect of remeasuring deferred tax balances related to items within accumulated other comprehensive income to retained earnings resulting from the provisions of the December 22, 2017 U.S. Tax Cuts and Jobs Act (the "U.S. Tax Reform"). We early adopted this new ASU in the fourth quarter of 2017, and as a result, we reclassified $0.3 million from AOCI to retained earnings. In August 2017, the FASB issued ASU 2017-12 "Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities" that amends the hedge accounting recognition and presentation requirements under hedge accounting. The new standard will make more financial and non-financial hedging strategies eligible for hedge accounting, amends the presentation and disclosure requirements, and simplifies how companies assess effectiveness. The new standard is effective for fiscal years beginning after December 15, 2018, including interim periods within those years. We early adopted this new ASU during the fourth quarter of 2017. The impact of adoption did not have a material effect on our Condensed Consolidated Financial Statements and related disclosures. In January 2017, the FASB issued ASU 2017-04 "Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment," which amends and simplifies the accounting standard for goodwill impairment. The new standard removes Step 2 of the goodwill impairment test, which requires a hypothetical purchase price allocation. A goodwill impairment will now be the amount a reporting unit’s carrying value exceeds its fair value, limited to the total amount of goodwill allocated to that reporting unit. The new standard is effective for annual and any interim impairment tests for periods beginning after December 15, 2019. The Company early adopted this standard on January 1, 2018. The impact of adoption did not have a material impact on our Condensed Consolidated Financial Statements and related disclosures. In January 2017, the FASB issued ASU No. 2017-01 "Business Combinations (Topic 805): Clarifying the Definition of a Business." The new guidance narrows the existing definition of a business and provides a framework for evaluating whether a transaction should be accounted for as an acquisition (or disposal) of assets or a business. The guidance requires an entity to evaluate if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets; if so, the set of transferred assets and activities (collectively, the "set") is not a business. To be considered a business, the set would need to include an input and a substantive process that together significantly contribute to the ability to create outputs, as defined by the ASU. The guidance is effective for annual reporting periods beginning after December 15, 2017, including interim periods within those annual reporting periods, and should be applied prospectively. We adopted this standard on January 1, 2018. We have utilized this new guidance in our accounting for the Georgia Pacific's Pine Chemical Business acquisition; refer to Note 4 for more information. In August 2016, the FASB issued final amendments to clarify how entities should classify certain cash receipts and cash payments in ASU 2016-15 "Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments." The new guidance clarifies the classification on the statement of cash flows of certain cash receipts and disbursements such as distributions received from equity method investees, proceeds from settlement of insurance claims, and proceeds from the settlement of corporate-owned life insurance policies. The new standard is effective for fiscal years beginning after December 15, 2017, including interim periods within those years. The Company adopted this standard on January 1, 2018. The impact of adoption did not have a material impact on our Condensed Consolidated Financial Statements and related disclosures. In February 2016, the FASB issued ASU 2016-02 "Leases (Topic 842)." Under the new guidance, lessees will be required to recognize for all leases (with the exception of short-term leases) a lease liability, which is a lessee's obligation to make lease payments arising from a lease, measured on a discounted basis and a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. We expect to adopt these provisions on January 1, 2019, including interim periods subsequent to the adoption date, which can be applied using a full retrospective or modified retrospective approach. Since the issuance of ASU 2016-02, the FASB has issued several amendments which clarify certain points in Topic 842, including ASU 2018-01 ("Land Easement Practical Expedient"), ASU 2018-10 ("Codification Improvements"), and ASU 2018-11 ("Targeted Improvements"). We anticipate adopting all of these standards at the same time effective January 1, 2019. Based upon the results of our initial assessment thus far, we plan to adopt this new standard under the modified retrospective approach, utilizing the practical expedients upon transition that will retain lease classification and initial direct costs for any leases that exist prior to adoption of the standard. We are in the process of cataloging our existing lease contracts and implementing changes to our systems. As a lessee, the majority of our leases under existing guidance are classified as operating leases, and therefore, not recorded on the balance sheet but are recorded in the statement of earnings as expense as incurred. Upon adoption of the new guidance, we will be required to record the vast majority of these operating leases on the balance sheet as a right-of-use asset and a lease liability. The timing of expense recognition and classification in the statement of earnings could change based on the classification of leases as either operating or financing; however, we have not completed our evaluation to determine to what extent. In May 2014, the FASB issued ASU 2014-09 “Revenue from Contracts with Customers (Topic 606),” which supersedes both the revenue recognition requirement to Accounting Standards Codification ("ASC") 605 “Revenue Recognition” and most industry-specific guidance. The core principle of the new standard (ASC 606) is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. An entity must also disclose sufficient information to enable users of financial statements to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers, including qualitative and quantitative information about contracts with customers, significant judgments and changes in judgments, and assets recognized from the costs to obtain or fulfill a contract. In 2016 and 2017, the FASB issued several ASUs that provided additional clarity on numerous topics as well as providing technical corrections to the original ASU 2014-09. We adopted this new standard on January 1, 2018, utilizing the modified retrospective method applied to those contracts that were not completed as of January 1, 2018. See below for the effect of this adoption on our Condensed Consolidated Financial Statements. The majority of our sales revenue remains unchanged by ASC 606 and continues to be recognized when products are shipped from our manufacturing and warehousing facilities, which represents the point at which control is transferred to the customer. For certain limited contracts, where we are producing goods with no alternative use and for which we have an enforceable right to payment for performance completed to date, we are recognizing revenue as goods are manufactured, rather than when they are shipped as previously done under ASC 605. The cumulative effect of the changes made to our condensed consolidated balance sheet on January 1, 2018, due to the adoption of ASC 606, were as follows:
In accordance with ASC 606, the impact of adoption on our condensed consolidated statement of operations and balance sheet were as follows:
All other issued but not yet effective accounting pronouncements are not expected to have a material impact on our Condensed Consolidated Financial Statements. |
Acquisition |
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Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquisition | Acquisition Georgia Pacific's Pine Chemical Business On August 22, 2017, we entered into an Asset Purchase Agreement (the "Purchase Agreement") with Georgia-Pacific Chemicals LLC, Georgia-Pacific LLC (together with Georgia-Pacific Chemicals LLC, "GP") and Ingevity Arkansas, LLC, a wholly-owned subsidiary of Ingevity, to purchase substantially all the assets primarily used in GP's pine chemical business (the "Pine Chemical Business"), including assets and facilities related to tall oil fractionation operations and the production or modification of tall oil fatty acids, tall oil rosins, rosin derivatives and formulated products (the "Acquisition"). On March 8, 2018 (the "Acquisition Date"), pursuant to the terms and conditions set forth in the Purchase Agreement, we completed the Acquisition. During the three months ended September 30, 2018, we finalized the purchase price which included a final adjustment for working capital resulting in an aggregate purchase price of $315.5 million. The Acquisition was primarily funded with the net proceeds from the $300.0 million senior notes issued on January 24, 2018. See Note 10 for more information on the senior notes. In addition, on the Acquisition Date, the Company and GP entered into a 20-year, market-based crude tall oil ("CTO") supply contract with certain of Georgia-Pacific’s paper mill operations. The Acquisition is being integrated into our Performance Chemicals segment and has been included within our results of operations since the Acquisition Date. Although not yet complete, a substantial portion of the Pine Chemical Business has been integrated into our existing Performance Chemicals operations. As a result, our ability to separate net sales and operating performance of the Acquisition from our existing Performance Chemicals' operating results is no longer practicable. Purchase Price Allocation The Acquisition has been accounted for under the business combinations accounting guidance, and as such we have applied acquisition accounting. Acquisition accounting requires, among other things, that assets acquired and liabilities assumed be recognized at their fair values as of the acquisition date. The aggregate purchase price noted above was allocated to the major categories of assets acquired and liabilities assumed based upon their estimated fair values at the Acquisition Date using primarily Level 2 and Level 3 inputs. These Level 2 and Level 3 valuation inputs include an estimate of future cash flows and discount rates. Additionally, estimated fair values are based, in part, upon outside appraisals for certain assets, including specifically-identified intangible assets. The following table summarizes the consideration paid for the Acquisition and the amounts of the assets acquired and liabilities assumed as of the Acquisition Date.
Unaudited Pro Forma Financial Information The following unaudited pro forma results of operations assume that the Acquisition occurred at the beginning of the periods presented. These unaudited pro forma results are presented for informational purposes only and are not necessarily indicative of what the actual results of operations would have been if the Acquisition had occurred at the beginning of the periods presented, nor are they indicative of future results of operations. The pro forma results presented below are adjusted for the removal of Acquisition and other related costs of zero and $5.7 million for the three and nine months ended September 30, 2018, respectively, and of $4.1 million for both the three and nine months ended September 30, 2017.
Acquisition-related costs Costs incurred to complete and integrate the Acquisition into our Performance Chemicals segment are expensed as incurred and recorded to Acquisition-related costs on our condensed consolidated statement of operations. During the three and nine months ended September 30, 2018, zero and $4.3 million, respectively of Acquisition-related costs were recognized. Acquisition-related costs incurred in both the three and nine months ended September 30, 2017 were $4.1 million. These costs represent transaction costs, legal fees and professional third-party service fees. |
Revenues |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenues | Revenues On January 1, 2018, we adopted ASC 606 using the modified retrospective method applied to contracts not completed as of January 1, 2018. Results for reporting periods beginning after January 1, 2018 are presented under ASC 606, while prior period amounts are not adjusted and continue to be reported in accordance with our historic accounting under ASC 605. See Note 3 for more information on the adoption of ASC 606 and its impact on our Condensed Consolidated Financial Statements. Ingevity's operating segments are (i) Performance Materials and (ii) Performance Chemicals. Our Performance Materials segment consists of our automotive technologies and process purifications product lines. Performance Materials manufactures products in the form of powder, granular, extruded pellets or structured honeycombs and activated carbon sheets. Automotive technologies products are sold into the gasoline vapor emission control markets within the automotive industry while process purifications products are sold into the food, water, beverage, air emissions control, corrosion protection, odor reduction and chemical purification industries. Our Performance Chemicals segment consists of our pavement technologies, oilfield technologies and industrial specialties product lines. Performance Chemicals manufactures products derived from crude tall oil and lignin extracted from the kraft paper making process. Performance Chemicals products serve as critical inputs used in a variety of high performance applications, including asphalt paving (pavement technologies product line), oil exploration and production (oilfield technologies product line), printing inks, adhesives, agrochemicals, and lubricants (industrial specialties product line). Net sales in both of our reportable segments are based on the sale of manufactured products. Net sales are recognized when obligations under the terms of a contract with our customer are satisfied; generally, this occurs with the transfer of control of our products. Since net sales are derived from product sales only, we have disaggregated our net sales by our product lines within each reportable segment. Net sales are measured as the amount of consideration we expect to receive in exchange for transferring goods. Sales, value add, and other taxes we collect concurrent with revenue-producing activities are excluded from revenue. Sales returns and allowances are not a normal practice in the industry and are not significant. Shipping and handling fees billed to customers continue to be included with Net sales. Certain customers may receive cash-based incentives, including discounts and volume rebates, which are accounted for as variable consideration and included in Net sales. Incidental items immaterial in the context of the contract are recognized as expense. If we pay for the freight and shipping, we recognize the cost when control of the product has transferred to the customer as an expense in Cost of sales on the condensed consolidated statement of operations. Although very rare, from time to time we incur expenses to obtain a sales contract. In these cases, if these costs are for orders that are fulfilled in one year or less, we expense these costs as they are incurred. Because the period between when we transfer a contracted good to a customer and when the customer pays for that good will be one year or less, we elect not to adjust the contracted amount of consideration for the effects of any significant financing component. Disaggregation of Revenue The following tables present our Net sales disaggregated by product line and geography.
The following table presents our Net sales disaggregated by geography, based on the delivery address of our customer.
Contract Balances The following table provides information about contract assets and contract liabilities from contracts with customers. The contract assets primarily relate to our rights to consideration for products produced but not billed at the reporting date on contracts with certain customers. The contract assets are recognized as accounts receivables when the rights become unconditional and the customer has been billed. Contract liabilities represent obligations to transfer goods to a customer for which we have received consideration from our customer. For all periods presented we had no contract liabilities.
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Financial Instruments, Risk Management, and Fair Value Measurements |
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Financial Instruments, Risk Management, and Fair Value Measurements | Financial Instruments, Risk Management, and Fair Value Measurements Financial Instruments and Risk Management Ingevity’s operations are exposed to market risks, such as changes in foreign currency exchange rates and commodity prices due to transactions denominated in a variety of foreign currencies and purchases of certain commoditized raw materials and inputs. Changes in these rates and prices may have an impact on Ingevity’s future cash flow and earnings. To mitigate these market risks and their effects, we enter into derivative financial instruments from time to time, which are governed by policies, procedures and internal processes set forth by our Board of Directors. Our risk management program also addresses counterparty credit risk by entering into derivative financial instruments with only major financial institutions with investment grade ratings. Once the derivative financial instrument is entered into, we continuously monitor the financial institutions’ credit ratings and our credit risk exposure held by the financial institution. When appropriate, we reallocate exposures across multiple financial institutions to limit credit risk. If a counterparty fails to fulfill its performance obligations under the derivative financial instrument, then Ingevity is exposed to credit risk equal to the fair value of the financial instrument. Derivative assets and liabilities are reported on a net basis by counterparty, to the extent governed by master netting agreements, in the condensed consolidated balance sheets. Due to our proactive mitigation of these potential credit risks, we anticipate performance by our counterparties to these contracts and therefore no material loss is expected. Foreign Currency Exchange Risk Management We manufacture and sell our products in several countries throughout the world and, thus, we are exposed to changes in foreign currency exchange rates. To manage the volatility relating to these exposures, we net the exposures on a consolidated basis to take advantage of natural offsets. To manage the remaining exposure, from time to time, we utilize foreign currency exchange forward contracts to minimize the volatility to earnings and cash flows resulting from the effect of fluctuating foreign currency exchange rates on export sales denominated in foreign currencies (principally the euro). These contracts are generally designated as cash flow hedges. We began our foreign currency exchange risk hedging program in July 2017. As of September 30, 2018, open foreign currency derivative contracts hedge forecasted transactions until December 2018. These open derivative contracts hedge the notional U.S. dollar equivalent value of approximately $7.5 million. The fair value of the foreign currency hedge was a $0.5 million asset and zero at September 30, 2018 and December 31, 2017, respectively. Commodity Price Risk Management Certain energy sources used by the Company, are subject to price volatility caused by weather, supply and demand conditions, economic variables and other unpredictable factors. This volatility is primarily related to the market pricing of natural gas. To mitigate expected fluctuations in market prices and the volatility to earnings and cash flow resulting from changes to pricing of natural gas purchases, from time to time, we will enter into swap contracts and zero cost collar option contracts and designate these contracts as cash flow hedges. We began our commodity price risk hedging program in December 2017 and therefore prior to this date we had no derivative financial instruments designated to hedge commodity price risk. As of September 30, 2018, we had 1.3 million and 1.6 million mmBTUS (millions of British Thermal Units) in aggregate notional volume of outstanding natural gas commodity swap contracts and zero cost collar option contracts, respectively, designated as cash flow hedges. As of September 30, 2018, open commodity contracts hedge forecasted transactions until December 2019. The fair value of the outstanding designated natural gas commodity hedge contracts as of September 30, 2018 and December 31, 2017 was $0.1 million asset and less than $0.1 million asset, respectively. Equity Securities Our investments in equity securities with a readily determinable fair value totaled $0.5 million at September 30, 2018 and $1.8 million at December 31, 2017. The net realized gain/(loss) and unrealized gain/(loss) recognized during the three months ended September 30, 2018 was zero and zero, respectively. The net realized gain/(loss) and unrealized gain/(loss) recognized during the nine months ended September 30, 2018, was of zero and $(0.1) million, respectively. The aggregate carrying value of investments in equity securities where fair value is not readily determinable totaled $1.5 million as of September 30, 2018 and $3.0 million as of December 31, 2017. During the three months ended September 30, 2018, we recorded an impairment charge of $1.5 million to an equity security where fair value is not readily determinable held within our Performance Materials segment. The charge was based on recently updated expected future cash flow projections for the investment. Fair-Value Measurements We have categorized our assets and liabilities that are recorded at fair value, based on the priority of the inputs to the valuation technique, into a three-level fair-value hierarchy. The fair-value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). If the inputs used to measure the assets and liabilities fall within different levels of the hierarchy, the categorization is based on the lowest level input that is significant to the fair-value measurement of the instrument. The following information is presented for assets and liabilities that are recorded in the condensed consolidated balance sheets at fair value measured on a recurring basis. There were no transfers of assets and liabilities that are recorded at fair value between Level 1 and Level 2 during the period reported. There were no non-recurring fair value measurements in the condensed consolidated balance sheets as of September 30, 2018 or December 31, 2017.
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At September 30, 2018, the book value of capital lease obligations was $80.0 million and the fair value was $88.4 million. The fair value of our capital lease obligations is based on the period-end quoted market prices for the obligations, using Level 2 inputs. The carrying amount, excluding debt issuance fees, of our variable interest rate long-term debt is $370.3 million as of September 30, 2018. The carrying value is a reasonable estimate of the fair value of the outstanding debt based on the variable interest rate of the debt. At September 30, 2018, the book value of our fixed rate debt, the senior notes issued January 24, 2018, was $300.0 million, and the fair value was $286.3 million, based on Level 2 inputs. At September 30, 2018, the book value of our Restricted investment was $70.7 million, and the fair value was $66.4 million, based on Level 1 inputs. The carrying value of our financial instruments: cash and cash equivalents, other receivables, other payables and accrued liabilities approximate their fair values due to the short-term nature of these financial instruments. |
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Inventories, net | Inventories, net
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Property, plant and equipment, net |
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Property, plant and equipment, net | Property, plant and equipment, net
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Goodwill and other intangible assets, net |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and other intangible assets | Goodwill and other intangible assets, net
_______________ (1) See Note 4 for more information. There were no events or circumstances indicating that goodwill might be impaired during the nine months ended September 30, 2018. All of our other intangible assets, net are related to the Performance Chemicals operating segment. The following table summarizes intangible assets:
_______________ (1) Represents trademarks, trade names and know-how. (2) See Note 4 for more information. The amortization expense related to our intangible assets in the table above is shown in the table below.
Based on the current carrying values of intangible assets, estimated pre-tax amortization expense for the next five years is as follows: 2018 - $12.3 million, 2019 - $14.3 million, 2020 - $13.2 million, 2021 - $12.3 million and 2022 - $12.2 million. |
Debt including capital lease obligations |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt including capital lease obligations | Debt including capital lease obligations Current and long-term debt including capital lease obligations consisted of the following:
Revolving Credit and Term Loan Facility Amendment On August 7, 2018, we entered into an Incremental Facility Agreement and Amendment No. 2 (the “Amendment”) to the Credit Agreement, dated as of March 7, 2016 (the “Existing Credit Agreement”, and as amended, supplemented or otherwise modified from time to time, including pursuant to the Incremental Facility Agreement and Amendment No. 1, dated as of August 21, 2017, and the Amendment, the “Amended Credit Agreement”). Among other things, the Amendment (i) increased the revolving commitments under the Existing Credit Agreement by $200.0 million (the “Incremental Revolving Commitments”) and (ii) reduced the Applicable Rate (as defined in the Amended Credit Agreement). The Amendment also extended the maturity date for the loans and commitments under the Existing Credit Agreement to August 7, 2023. The Incremental Revolving Commitments have terms identical to those of the Revolving Commitments under the Existing Credit Agreement and will be treated as a single class with such existing commitments under the Amended Credit Agreement. Loans under the Amended Credit Agreement bear interest at either (a) an adjusted base rate or (b) an adjusted LIBOR rate, in each case, plus an applicable margin (the “Applicable Margin”), in the case of base rate loans, ranging between 0.00 percent and 0.75 percent, and in the case of adjusted LIBOR rate loans, ranging between 1.00 percent and 1.75 percent. The Applicable Margin is based on a total leverage based pricing grid. Fees to revolving lenders under the Amended Credit Agreement, including fees in respect of the Incremental Revolving Commitments, include (i) commitment fees, based on a percentage of the daily unused portions of the facility, ranging from 0.15 percent to 0.30 percent and (ii) customary letter of credit fees. As consideration for the Amendment, the Company paid to each lender under the Existing Credit Agreement a consent fee equal to 0.05 percent of the aggregate principal amount of the commitments and outstanding loans held by such lender immediately prior to the Closing Date. Fees of $1.4 million were incurred to secure the Amended Credit Agreement. These fees have been deferred and will be amortized over the term of the arrangement. The credit facilities under the Amended Credit Agreement will mature on August 7, 2023. The Initial Term Loans and the Incremental Term A Loans (each, as defined in the Amended Credit Agreement) will amortize at a rate equal to 1.25 percent per quarter starting in September 2019, with the balance due at maturity. 2018 Senior Notes On January 24, 2018, we issued $300.0 million aggregate principal amount of 4.50 percent senior unsecured notes due 2026 (the “Notes”). The Notes were issued pursuant to an indenture dated as of January 24, 2018 (the “Indenture”), by and among Ingevity, the subsidiary guarantors party thereto and U.S. Bank National Association, as trustee. The Notes were offered and sold only to qualified institutional buyers pursuant to Rule 144A and to certain non-U.S. persons in transactions outside the United States pursuant to Regulation S under the Securities Act of 1933, as amended (the “Securities Act”). The Notes have not been registered under the Securities Act or any state securities laws and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act and applicable state laws. The net proceeds from the sale of the Notes, after deducting deferred issuance costs of $5.7 million, were approximately $294.3 million. We used the net proceeds from the sale of the Notes to finance, in part, our purchase of substantially all the assets primarily used in the pine chemical business of Georgia-Pacific Chemicals LLC and Georgia-Pacific LLC. Interest payments on the Notes are due semiannually in arrears on February 1st and August 1st of each year, beginning on August 1, 2018, at a rate of 4.50 percent per year. The Notes will mature on February 1, 2026. Financial Covenants The Indenture contains certain customary covenants (including covenants limiting Ingevity's and its restricted subsidiaries’ ability to grant or permit liens on certain property securing debt, declare or pay dividends, make distributions on or repurchase or redeem capital stock, make investments in unrestricted subsidiaries, engage in sale and lease-back transactions, and engage in a consolidation or merger, or sell, transfer or otherwise dispose of all or substantially all of the assets of our and our restricted subsidiaries, taken as a whole) and events of default (subject in certain cases to customary exceptions, as well as grace and cure periods). The occurrence of an event of default under the Indenture could result in the acceleration of the Notes and could cause a cross-default that could result in the acceleration of other indebtedness of Ingevity and its subsidiaries. The revolving credit facility and term loan facility include financial covenants requiring Ingevity to maintain on a consolidated basis a maximum total leverage ratio of 4.00 to 1.00 (which may be increased to 4.50 to 1.00 under certain circumstances) and a minimum interest coverage ratio of 3.00 to 1.00. We were in compliance with all covenants at September 30, 2018. |
Equity |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity | Equity
Noncontrolling interest acquisition On August 1, 2018, we completed the acquisition of the remaining 30 percent noncontrolling interest in Purification Cellutions LLC, which was treated as a partnership for tax purposes, for a purchase price of $80.0 million. The acquisition resulted in the elimination of Noncontrolling interest ($11.4 million) and the recognition of a Deferred tax asset ($13.4 million), with the remainder being recorded against Additional paid in capital ($55.2 million) in our Condensed Consolidated Financial Statements. Share Repurchases On February 20, 2017, our Board of Directors authorized the repurchase of up to $100 million of our common stock. The repurchase program does not include a specific timetable or price targets and may be suspended or terminated at any time. Share repurchases may be made from time to time in either open market or private transactions. The repurchase program does not require us to acquire any specific number of shares, and the program may be suspended or discontinued at any time. The timing, volume and nature of share repurchases will be at the discretion of management, depending on market conditions, alternative options for the use of cash, applicable securities laws and other factors. During the three months ended September 30, 2018, we repurchased 93,900 shares of our common stock at a weighted average cost per share of $96.01. During the nine months ended September 30, 2018, we repurchased 211,000 shares of our common stock at a weighed average cost per share of $85.89. At September 30, 2018, $75.3 million remained unused under our Board-authorized repurchase program. We record shares of common stock repurchased at cost as treasury stock, resulting in a reduction of stockholders’ equity in the condensed consolidated balance sheets. When the treasury shares are contributed under our employee benefit plans or issued for option exercises, we use a first-in, first-out (“FIFO”) method for determining cost. The difference between the cost of the shares and the market price at the time of contribution to an employee benefit plan is added to or deducted from additional paid in capital. On November 1, 2018, our Board of Directors authorized the repurchase of up to $350 million of our common stock, in addition to the remaining authorization from February 20, 2017. The repurchase program does not include a specific timetable or price targets and may be suspended or terminated at any time. Share repurchases may be made from time to time in either open market or private transactions. The repurchase program does not require us to acquire any specific number of shares, and the program may be suspended or discontinued at any time. The timing, volume and nature of share repurchases will be at the discretion of management, depending on market conditions, alternative options for the use of cash, applicable securities laws and other factors. |
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Postemployment Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Retirement Plans | Retirement Plans The following table summarizes the components of net periodic benefit cost (income) for our defined benefit pension plans:
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We made a voluntary cash contribution of $1.5 million to our Union Hourly defined benefit pension plan in the three and nine months ended September 30, 2018. There are no required cash contributions to our Union Hourly defined benefit pension plan in 2018, and we currently have no plans to make any additional voluntary cash contributions for the remainder of the year. |
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Restructuring and Related Activities [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and other (income) charges, net | Restructuring and other (income) charges, net We continually perform strategic reviews and assess the return on our operations which sometimes results in a plan to restructure the business. The cost and benefit of these strategic restructuring initiatives are recorded as restructuring and other (income) charges, net in our condensed consolidated statements of operations. These costs are excluded from our operating segment results. We record an accrual for severance and other non-recurring costs under the provisions of the relevant accounting guidance. Additionally, in some restructuring plans write-downs of long-lived assets may occur. Two types of assets are impacted: assets to be disposed of by sale and assets to be abandoned. Assets to be disposed of by sale are measured at the lower of carrying amount or estimated net proceeds from the sale. Assets to be abandoned with no remaining future service potential are written down to amounts expected to be recovered. The useful life of assets to be abandoned that have a remaining future service potential are adjusted and depreciation is recorded over the adjusted useful life. Below provides detail of the Restructuring and other (income) charges, net incurred. Detail on the restructuring charges and asset disposal activities is provided below.
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2018 activities In February 2018, we sold assets from the Performance Chemicals derivatives operations in Duque De Caxias, Rio de Janeiro, Brazil. These assets were part of a facility that was closed as a result of a restructuring event in 2016. As a result of this sale, we recorded zero and $0.6 million as a gain on sale of assets in the three and nine months ended September 30, 2018, respectively. 2017 activities In January 2017, we initiated a reorganization to streamline our leadership team, flatten the organization and reduce costs. As a result of this reorganization, we recorded zero and $1.3 million, respectively, in severance and other employee-related costs in the three and nine months ended September 30, 2017. During the three and nine months ended September 30, 2017, we also recorded $0.1 million and $2.2 million, respectively, of additional miscellaneous exit costs primarily associated with the exit of our Performance Chemicals' manufacturing operations in Palmeira, Santa Catarina, Brazil which began in the fourth quarter of 2016. Roll forward of Restructuring Reserves The following table shows a roll forward of restructuring reserves that will result in cash spending.
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Income Taxes | Income Taxes For the three and nine months ended September 30, 2018 and 2017, the effective tax rates, including discrete items, were as follows:
We determine our interim tax provision using an Estimated Annual Effective Tax Rate methodology (“EAETR”). The EAETR is applied to the year-to-date ordinary income, exclusive of discrete items. The tax effects of discrete items are then included to arrive at the total reported interim tax provision. The determination of the EAETR is based upon a number of estimates, including the estimated annual pre-tax ordinary income in each tax jurisdiction in which we operate. As our projections of ordinary income change throughout the year, the EAETR will change period-to-period. The tax effects of discrete items are recognized in the tax provision in the period they occur. Depending on various factors, such as the item’s significance in relation to total income and the rate of tax applicable in the jurisdiction to which it relates, discrete items in any quarter may materially impact the reported effective tax rate. As a global enterprise, our tax expense may be impacted by changes in tax rates or laws, the finalization of tax audits and reviews, as well as other factors. As such, there may be significant volatility in interim tax provisions. The below table provides a reconciliation between our reported effective tax rates and the EAETR.
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On December 22, 2017, Staff Accounting Bulletin No. 118 ("SAB 118") was issued to address the application of GAAP in situations when a registrant does not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of U.S. Tax Reform. In accordance with SAB 118, we determined that the $24.5 million of the provisional deferred tax expense recorded in connection with the re-measurement of certain deferred tax assets and liabilities and current tax expense recorded in connection with any other provisions of U.S. Tax Reform were reasonable estimates at December 31, 2017. In the nine months ended September 30, 2018, no additional adjustments were recorded in relation to the re-measurement of certain deferred tax assets and liabilities and minimal current tax expense was recorded in connection with other provisions of U.S. Tax Reform. Additional work may be necessary as the U.S. Treasury Department, the IRS, or other standard setting bodies interpret or issue new guidance on how the provisions of U.S. Tax Reform should be applied that may be different from our interpretation as of the date of this filing. Any subsequent adjustment to these amounts will be recorded to current tax expense in the period when the analysis is complete. |
Commitments and Contingencies |
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Sep. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and contingencies | Commitments and contingencies Legal Proceedings We are, from time to time, involved in routine litigation incidental to our operations. None of the litigation in which we are currently involved, individually or in the aggregate, is material to our consolidated financial condition, liquidity or results of operations nor are we aware of any material pending or contemplated proceedings. |
Segment information |
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Segment information | Segment information
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(5) Charges associated with the acquisition and integration of the Pine Chemical Business. See below for more detail on the charges incurred and Note 4 within these Condensed Consolidated Financial Statements for more information.
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Earnings (loss) per share |
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Earnings (loss) per share | Earnings (loss) per share Basic earnings (loss) per share is computed by dividing net income (loss) attributable to Ingevity stockholders for the period by the weighted average number of common shares outstanding during the period. Diluted earnings (loss) per share is computed by dividing net income (loss) attributable to Ingevity stockholders for the period by the weighted average number of shares of common stock and potentially dilutive common stock outstanding for the period. The calculation of diluted net income per share excludes all anti-dilutive common shares.
The following average number of potential common shares were antidilutive and, therefore, were not included in the diluted earnings per share calculation:
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New accounting guidance (Policies) |
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Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Income tax | We determine our interim tax provision using an Estimated Annual Effective Tax Rate methodology (“EAETR”). The EAETR is applied to the year-to-date ordinary income, exclusive of discrete items. The tax effects of discrete items are then included to arrive at the total reported interim tax provision. The determination of the EAETR is based upon a number of estimates, including the estimated annual pre-tax ordinary income in each tax jurisdiction in which we operate. As our projections of ordinary income change throughout the year, the EAETR will change period-to-period. The tax effects of discrete items are recognized in the tax provision in the period they occur. Depending on various factors, such as the item’s significance in relation to total income and the rate of tax applicable in the jurisdiction to which it relates, discrete items in any quarter may materially impact the reported effective tax rate. As a global enterprise, our tax expense may be impacted by changes in tax rates or laws, the finalization of tax audits and reviews, as well as other factors. As such, there may be significant volatility in interim tax provisions. |
New accounting guidance | New accounting guidance In August 2018, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2018-15 "Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40) Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract." This ASU requires companies to defer specific implementation costs incurred in a Cloud Computing Arrangement ("CCA") that are often expensed as incurred under current GAAP, and recognize the expense over the noncancellable term of the CCA. The new standard is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Although we are still evaluating the impact of this new standard, we do not believe that the adoption will materially impact our Condensed Consolidated Financial Statements and related disclosures. In August 2018, the FASB issued ASU 2018-13 "Fair Value Measurement (Topic 820) Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement." This ASU eliminates, amends, and adds disclosure requirements for fair value measurements. The new standard is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Although we are still evaluating the impact of this new standard, we do not believe that the adoption will materially impact our Condensed Consolidated Financial Statements and related disclosures. In June 2018, the FASB issued ASU 2018-07 "Compensation-Stock Compensation (Topic 718) - Improvements to Nonemployee Share-Based Payment Accounting." This ASU provides for a single accounting model for all share-based payments, with the employee based guidance now applying to nonemployee share-based transactions. The new standard is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Although we are still evaluating the impact of this new standard, we do not believe that the adoption will materially impact our Condensed Consolidated Financial Statements and related disclosures. In February 2018, the FASB issued ASU 2018-02 "Income Statement-Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from AOCI." This ASU provides for the reclassification of the effect of remeasuring deferred tax balances related to items within accumulated other comprehensive income to retained earnings resulting from the provisions of the December 22, 2017 U.S. Tax Cuts and Jobs Act (the "U.S. Tax Reform"). We early adopted this new ASU in the fourth quarter of 2017, and as a result, we reclassified $0.3 million from AOCI to retained earnings. In August 2017, the FASB issued ASU 2017-12 "Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities" that amends the hedge accounting recognition and presentation requirements under hedge accounting. The new standard will make more financial and non-financial hedging strategies eligible for hedge accounting, amends the presentation and disclosure requirements, and simplifies how companies assess effectiveness. The new standard is effective for fiscal years beginning after December 15, 2018, including interim periods within those years. We early adopted this new ASU during the fourth quarter of 2017. The impact of adoption did not have a material effect on our Condensed Consolidated Financial Statements and related disclosures. In January 2017, the FASB issued ASU 2017-04 "Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment," which amends and simplifies the accounting standard for goodwill impairment. The new standard removes Step 2 of the goodwill impairment test, which requires a hypothetical purchase price allocation. A goodwill impairment will now be the amount a reporting unit’s carrying value exceeds its fair value, limited to the total amount of goodwill allocated to that reporting unit. The new standard is effective for annual and any interim impairment tests for periods beginning after December 15, 2019. The Company early adopted this standard on January 1, 2018. The impact of adoption did not have a material impact on our Condensed Consolidated Financial Statements and related disclosures. In January 2017, the FASB issued ASU No. 2017-01 "Business Combinations (Topic 805): Clarifying the Definition of a Business." The new guidance narrows the existing definition of a business and provides a framework for evaluating whether a transaction should be accounted for as an acquisition (or disposal) of assets or a business. The guidance requires an entity to evaluate if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets; if so, the set of transferred assets and activities (collectively, the "set") is not a business. To be considered a business, the set would need to include an input and a substantive process that together significantly contribute to the ability to create outputs, as defined by the ASU. The guidance is effective for annual reporting periods beginning after December 15, 2017, including interim periods within those annual reporting periods, and should be applied prospectively. We adopted this standard on January 1, 2018. We have utilized this new guidance in our accounting for the Georgia Pacific's Pine Chemical Business acquisition; refer to Note 4 for more information. In August 2016, the FASB issued final amendments to clarify how entities should classify certain cash receipts and cash payments in ASU 2016-15 "Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments." The new guidance clarifies the classification on the statement of cash flows of certain cash receipts and disbursements such as distributions received from equity method investees, proceeds from settlement of insurance claims, and proceeds from the settlement of corporate-owned life insurance policies. The new standard is effective for fiscal years beginning after December 15, 2017, including interim periods within those years. The Company adopted this standard on January 1, 2018. The impact of adoption did not have a material impact on our Condensed Consolidated Financial Statements and related disclosures. In February 2016, the FASB issued ASU 2016-02 "Leases (Topic 842)." Under the new guidance, lessees will be required to recognize for all leases (with the exception of short-term leases) a lease liability, which is a lessee's obligation to make lease payments arising from a lease, measured on a discounted basis and a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. We expect to adopt these provisions on January 1, 2019, including interim periods subsequent to the adoption date, which can be applied using a full retrospective or modified retrospective approach. Since the issuance of ASU 2016-02, the FASB has issued several amendments which clarify certain points in Topic 842, including ASU 2018-01 ("Land Easement Practical Expedient"), ASU 2018-10 ("Codification Improvements"), and ASU 2018-11 ("Targeted Improvements"). We anticipate adopting all of these standards at the same time effective January 1, 2019. Based upon the results of our initial assessment thus far, we plan to adopt this new standard under the modified retrospective approach, utilizing the practical expedients upon transition that will retain lease classification and initial direct costs for any leases that exist prior to adoption of the standard. We are in the process of cataloging our existing lease contracts and implementing changes to our systems. As a lessee, the majority of our leases under existing guidance are classified as operating leases, and therefore, not recorded on the balance sheet but are recorded in the statement of earnings as expense as incurred. Upon adoption of the new guidance, we will be required to record the vast majority of these operating leases on the balance sheet as a right-of-use asset and a lease liability. The timing of expense recognition and classification in the statement of earnings could change based on the classification of leases as either operating or financing; however, we have not completed our evaluation to determine to what extent. In May 2014, the FASB issued ASU 2014-09 “Revenue from Contracts with Customers (Topic 606),” which supersedes both the revenue recognition requirement to Accounting Standards Codification ("ASC") 605 “Revenue Recognition” and most industry-specific guidance. The core principle of the new standard (ASC 606) is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. An entity must also disclose sufficient information to enable users of financial statements to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers, including qualitative and quantitative information about contracts with customers, significant judgments and changes in judgments, and assets recognized from the costs to obtain or fulfill a contract. In 2016 and 2017, the FASB issued several ASUs that provided additional clarity on numerous topics as well as providing technical corrections to the original ASU 2014-09. We adopted this new standard on January 1, 2018, utilizing the modified retrospective method applied to those contracts that were not completed as of January 1, 2018. The majority of our sales revenue remains unchanged by ASC 606 and continues to be recognized when products are shipped from our manufacturing and warehousing facilities, which represents the point at which control is transferred to the customer. For certain limited contracts, where we are producing goods with no alternative use and for which we have an enforceable right to payment for performance completed to date, we are recognizing revenue as goods are manufactured, rather than when they are shipped as previously done under ASC 605. |
New accounting guidance (Tables) |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of New Accounting Pronouncements and Changes in Accounting Principles | The cumulative effect of the changes made to our condensed consolidated balance sheet on January 1, 2018, due to the adoption of ASC 606, were as follows:
In accordance with ASC 606, the impact of adoption on our condensed consolidated statement of operations and balance sheet were as follows:
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Acquisition (Tables) |
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Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The following table summarizes the consideration paid for the Acquisition and the amounts of the assets acquired and liabilities assumed as of the Acquisition Date.
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Business Acquisition, Pro Forma Information |
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Revenues (Tables) |
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Disaggregation of Revenue | The following tables present our Net sales disaggregated by product line and geography.
The following table presents our Net sales disaggregated by geography, based on the delivery address of our customer.
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Contract with Customer, Asset and Liability | The following table provides information about contract assets and contract liabilities from contracts with customers. The contract assets primarily relate to our rights to consideration for products produced but not billed at the reporting date on contracts with certain customers. The contract assets are recognized as accounts receivables when the rights become unconditional and the customer has been billed. Contract liabilities represent obligations to transfer goods to a customer for which we have received consideration from our customer. For all periods presented we had no contract liabilities.
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Financial Instruments, Risk Management, and Fair Value Measurements (Tables) |
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Sep. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements, Recurring | The following information is presented for assets and liabilities that are recorded in the condensed consolidated balance sheets at fair value measured on a recurring basis. There were no transfers of assets and liabilities that are recorded at fair value between Level 1 and Level 2 during the period reported. There were no non-recurring fair value measurements in the condensed consolidated balance sheets as of September 30, 2018 or December 31, 2017.
______________
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Inventories, net (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Inventory |
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Property, plant and equipment, net (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment |
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Goodwill and other intangible assets, net (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Goodwill |
_______________ (1) See Note 4 for more information. |
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Schedule of Finite-Lived Intangible Assets | All of our other intangible assets, net are related to the Performance Chemicals operating segment. The following table summarizes intangible assets:
_______________ (1) Represents trademarks, trade names and know-how. (2) See Note 4 for more information. |
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Finite-lived Intangible Assets Amortization Expense | The amortization expense related to our intangible assets in the table above is shown in the table below.
|
Debt including capital lease obligations (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Long-term Debt Instruments | Current and long-term debt including capital lease obligations consisted of the following:
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Equity (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Stockholders' Equity |
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Retirement Plans (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Postemployment Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Defined Benefit Plans Disclosures | The following table summarizes the components of net periodic benefit cost (income) for our defined benefit pension plans:
_______________
_______________
|
Restructuring and other (income) charges, net (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Activities [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Costs | Detail on the restructuring charges and asset disposal activities is provided below.
_______________
The following table shows a roll forward of restructuring reserves that will result in cash spending.
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Income taxes (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Effective Income Tax Rate Reconciliation | For the three and nine months ended September 30, 2018 and 2017, the effective tax rates, including discrete items, were as follows:
The below table provides a reconciliation between our reported effective tax rates and the EAETR.
_______________
|
Segment information (Tables) |
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Sep. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Segment Reporting Information |
_______________
(5) Charges associated with the acquisition and integration of the Pine Chemical Business. See below for more detail on the charges incurred and Note 4 within these Condensed Consolidated Financial Statements for more information. |
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Business Acquisition, Integration, Restructuring and Other Related Costs |
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Earnings (loss) per share (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Earnings Per Share, Basic and Diluted |
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Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The following average number of potential common shares were antidilutive and, therefore, were not included in the diluted earnings per share calculation:
|
Background (Details) |
9 Months Ended |
---|---|
Sep. 30, 2018
segment
| |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of business segments | 2 |
Basis of Consolidation and Presentation - Narrative (Details) |
Sep. 30, 2018 |
Aug. 01, 2018 |
---|---|---|
Purification Cellutions LLC | ||
Other Ownership Interests [Line Items] | ||
Ownership interest | 30.00% | 30.00% |
New accounting guidance (Narrative) (Details) - USD ($) $ in Millions |
Jan. 01, 2018 |
Dec. 31, 2017 |
---|---|---|
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Adoption of ASC 606 | $ 1.6 | |
AOCI | Accounting Standards Update 2018-02 | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Adoption of ASC 606 | $ (3.0) | |
Retained earnings | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Adoption of ASC 606 | $ 1.6 | |
Retained earnings | Accounting Standards Update 2018-02 | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Adoption of ASC 606 | $ 0.3 |
New accounting guidance - Cumulative effect of the changes (Details) - USD ($) $ in Millions |
Sep. 30, 2018 |
Jan. 01, 2018 |
Dec. 31, 2017 |
---|---|---|---|
Assets | |||
Accounts receivable, net of allowance | $ 140.4 | $ 100.3 | $ 100.0 |
Inventories, net | 194.3 | 157.6 | 160.0 |
Prepaid and other current assets | 28.6 | 25.9 | 20.8 |
Liabilities | |||
Accrued expenses | 26.2 | 20.9 | 20.0 |
Deferred income taxes | 31.2 | 41.8 | 41.3 |
Equity | |||
Retained earnings | 271.4 | 144.4 | 142.8 |
Calculated under Revenue Guidance in Effect before Topic 606 | |||
Assets | |||
Accounts receivable, net of allowance | 140.0 | 100.0 | |
Inventories, net | 196.5 | 160.0 | |
Prepaid and other current assets | 23.1 | 20.8 | |
Liabilities | |||
Accrued expenses | 25.1 | 20.0 | |
Deferred income taxes | 31.1 | 41.3 | |
Equity | |||
Retained earnings | 268.9 | $ 142.8 | |
Accounting Standards Update 2014-09 | Difference between Revenue Guidance in Effect before and after Topic 606 | |||
Assets | |||
Accounts receivable, net of allowance | 0.4 | 0.3 | |
Inventories, net | (2.2) | (2.4) | |
Prepaid and other current assets | 5.5 | 5.1 | |
Liabilities | |||
Accrued expenses | 1.1 | 0.9 | |
Deferred income taxes | 0.1 | 0.5 | |
Equity | |||
Retained earnings | $ 2.5 | $ 1.6 |
New accounting guidance - Condensed consolidated statement of operations (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2018 |
Sep. 30, 2017 |
|
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Net sales | $ 311.2 | $ 264.1 | $ 855.0 | $ 742.9 |
Cost of sales | 192.6 | 170.9 | 535.8 | 489.2 |
Provision (benefit) for income taxes | 16.4 | 16.7 | 38.5 | 44.9 |
Net income (loss) | 51.7 | $ 38.4 | 139.7 | $ 97.2 |
Balances without Adoption of ASC 606 | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Net sales | 311.4 | 854.7 | ||
Cost of sales | 192.8 | 536.1 | ||
Provision (benefit) for income taxes | 16.4 | 38.4 | ||
Net income (loss) | 51.7 | 139.2 | ||
Effect of Change Higher/(Lower) | Accounting Standards Update 2014-09 | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Net sales | (0.2) | 0.3 | ||
Cost of sales | (0.2) | (0.3) | ||
Provision (benefit) for income taxes | 0.0 | 0.1 | ||
Net income (loss) | $ 0.0 | $ 0.5 |
New accounting guidance - Condensed consolidated balance sheet (Details) - USD ($) $ in Millions |
Sep. 30, 2018 |
Jan. 01, 2018 |
Dec. 31, 2017 |
---|---|---|---|
Assets | |||
Accounts receivable, net of allowance | $ 140.4 | $ 100.3 | $ 100.0 |
Inventories, net | 194.3 | 157.6 | 160.0 |
Prepaid and other current assets | 28.6 | 25.9 | 20.8 |
Liabilities | |||
Accrued expenses | 26.2 | 20.9 | 20.0 |
Deferred income taxes | 31.2 | 41.8 | 41.3 |
Equity | |||
Retained earnings | 271.4 | 144.4 | 142.8 |
Calculated under Revenue Guidance in Effect before Topic 606 | |||
Assets | |||
Accounts receivable, net of allowance | 140.0 | 100.0 | |
Inventories, net | 196.5 | 160.0 | |
Prepaid and other current assets | 23.1 | 20.8 | |
Liabilities | |||
Accrued expenses | 25.1 | 20.0 | |
Deferred income taxes | 31.1 | 41.3 | |
Equity | |||
Retained earnings | 268.9 | $ 142.8 | |
Difference between Revenue Guidance in Effect before and after Topic 606 | Accounting Standards Update 2014-09 | |||
Assets | |||
Accounts receivable, net of allowance | 0.4 | 0.3 | |
Inventories, net | (2.2) | (2.4) | |
Prepaid and other current assets | 5.5 | 5.1 | |
Liabilities | |||
Accrued expenses | 1.1 | 0.9 | |
Deferred income taxes | 0.1 | 0.5 | |
Equity | |||
Retained earnings | $ 2.5 | $ 1.6 |
Acquisition (Narrative) (Details) - USD ($) |
3 Months Ended | 9 Months Ended | ||||
---|---|---|---|---|---|---|
Mar. 08, 2018 |
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2018 |
Sep. 30, 2017 |
Jan. 24, 2018 |
|
Business Acquisition [Line Items] | ||||||
Acquisition and other related costs | $ 0 | $ 4,100,000 | $ 5,700,000 | $ 4,100,000 | ||
Inventory fair value step-up amortization | 0 | 0 | 1,400,000 | 0 | ||
Acquisition-related costs | $ 0 | $ 4,100,000 | $ 4,300,000 | $ 4,100,000 | ||
Georgia-Pacific Chemicals LLC | ||||||
Business Acquisition [Line Items] | ||||||
Total cash paid | $ 315,500,000 | |||||
Weighted average useful life | 20 years | |||||
Senior notes | ||||||
Business Acquisition [Line Items] | ||||||
Face amount | $ 300,000,000.0 |
Acquisition (Schedule of Recognized Identified Assets Acquired and Liabilities Assumed) (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||||
---|---|---|---|---|---|---|
Mar. 08, 2018 |
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2018 |
Sep. 30, 2017 |
Dec. 31, 2017 |
|
Business Acquisition [Line Items] | ||||||
Goodwill | $ 130.6 | $ 130.6 | $ 12.4 | |||
Amortization expense | 3.6 | $ 0.6 | 8.8 | $ 1.9 | ||
2018 | 12.3 | 12.3 | ||||
2019 | 14.3 | 14.3 | ||||
2020 | 13.2 | 13.2 | ||||
2021 | 12.3 | 12.3 | ||||
2022 | 12.2 | 12.2 | ||||
Georgia-Pacific Chemicals LLC | ||||||
Business Acquisition [Line Items] | ||||||
Weighted average useful life | 20 years | |||||
Accounts receivable | $ 16.2 | |||||
Inventories | 9.4 | |||||
Property, plant and equipment | 39.3 | |||||
Goodwill | 118.7 | |||||
Other assets | 0.1 | |||||
Total fair value of assets acquired | 316.8 | |||||
Accounts payable | 0.8 | |||||
Accrued expenses | 0.5 | |||||
Total fair value of liabilities assumed | 1.3 | |||||
Total cash paid | 315.5 | |||||
Inventory Step up | 1.4 | 1.4 | ||||
Inventory Expense | 0.0 | 1.4 | ||||
Amortization expense | 3.2 | 7.4 | ||||
2018 | 10.6 | 10.6 | ||||
2019 | 12.7 | 12.7 | ||||
2020 | 12.7 | 12.7 | ||||
2021 | 12.0 | 12.0 | ||||
2022 | $ 11.8 | $ 11.8 | ||||
Patents | Georgia-Pacific Chemicals LLC | ||||||
Business Acquisition [Line Items] | ||||||
Weighted average useful life | 12 years | |||||
Intangibles assets | 1.9 | |||||
Customer contracts and relationships | Georgia-Pacific Chemicals LLC | ||||||
Business Acquisition [Line Items] | ||||||
Weighted average useful life | 11 years | |||||
Intangibles assets | 129.0 | |||||
Non-compete | Georgia-Pacific Chemicals LLC | ||||||
Business Acquisition [Line Items] | ||||||
Weighted average useful life | 3 years | |||||
Intangibles assets | $ 2.2 |
Acquisition (Business Acquisition, Pro Forma Information) (Details) - USD ($) $ / shares in Units, $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2018 |
Sep. 30, 2017 |
|
Business Acquisition [Line Items] | ||||
Net sales | $ 311.2 | $ 288.1 | $ 875.2 | $ 814.5 |
Income (loss) before income taxes | $ 68.1 | $ 58.8 | $ 184.7 | $ 141.3 |
Diluted earnings (loss) per share attributable to Ingevity stockholders (usd per share) | $ 1.16 | $ 0.85 | $ 3.10 | $ 1.99 |
Revenues - Revenue by segment (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2018 |
Sep. 30, 2017 |
|
Disaggregation of Revenue [Line Items] | ||||
Consolidated Net sales | $ 311.2 | $ 264.1 | $ 855.0 | $ 742.9 |
Performance Materials | ||||
Disaggregation of Revenue [Line Items] | ||||
Consolidated Net sales | 96.3 | 85.4 | 287.9 | 258.3 |
Performance Materials | Automotive Technologies product line | ||||
Disaggregation of Revenue [Line Items] | ||||
Consolidated Net sales | 86.6 | 75.6 | 258.6 | 230.1 |
Performance Materials | Process Purification product line | ||||
Disaggregation of Revenue [Line Items] | ||||
Consolidated Net sales | 9.7 | 9.8 | 29.3 | 28.2 |
Performance Materials | Oilfield Technologies product line | ||||
Disaggregation of Revenue [Line Items] | ||||
Consolidated Net sales | 84.0 | |||
Performance Materials | Pavement Technologies product line | ||||
Disaggregation of Revenue [Line Items] | ||||
Consolidated Net sales | 152.2 | |||
Performance Materials | Industrial Specialties product line | ||||
Disaggregation of Revenue [Line Items] | ||||
Consolidated Net sales | 330.9 | |||
Performance Chemicals | ||||
Disaggregation of Revenue [Line Items] | ||||
Consolidated Net sales | 214.9 | 178.7 | 567.1 | 484.6 |
Performance Chemicals | Oilfield Technologies product line | ||||
Disaggregation of Revenue [Line Items] | ||||
Consolidated Net sales | 32.5 | 20.3 | 84.0 | 58.1 |
Performance Chemicals | Pavement Technologies product line | ||||
Disaggregation of Revenue [Line Items] | ||||
Consolidated Net sales | 68.1 | 64.5 | 152.2 | 137.2 |
Performance Chemicals | Industrial Specialties product line | ||||
Disaggregation of Revenue [Line Items] | ||||
Consolidated Net sales | $ 114.3 | $ 93.9 | $ 330.9 | $ 289.3 |
Revenues - Revenue disaggregsated by geographic area (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2018 |
Sep. 30, 2017 |
|
Disaggregation of Revenue [Line Items] | ||||
Consolidated Net sales | $ 311.2 | $ 264.1 | $ 855.0 | $ 742.9 |
North America | ||||
Disaggregation of Revenue [Line Items] | ||||
Consolidated Net sales | 220.6 | 587.3 | ||
Asia Pacific | ||||
Disaggregation of Revenue [Line Items] | ||||
Consolidated Net sales | 45.0 | 121.9 | ||
Europe, Middle East and Africa | ||||
Disaggregation of Revenue [Line Items] | ||||
Consolidated Net sales | 40.5 | 128.8 | ||
South America | ||||
Disaggregation of Revenue [Line Items] | ||||
Consolidated Net sales | $ 5.1 | $ 17.0 |
Revenues - Contract assets (Details) - USD ($) |
9 Months Ended | |
---|---|---|
Sep. 30, 2018 |
Dec. 31, 2017 |
|
Revenue from Contract with Customer [Abstract] | ||
Contract with customer, liability | $ 0 | $ 0 |
Change in Contract with Customer, Asset [Roll Forward] | ||
Balance at January 1, 2018 | 4,400,000 | |
Contract asset additions | 12,300,000 | |
Reclassification to accounts receivable, billed to customers | (11,900,000) | |
Balance at September 30, 2018 | $ 4,800,000 |
Financial Instruments, Risk Management, and Fair Value Measurements - Narrative (Details) - USD ($) |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2018 |
Sep. 30, 2017 |
Dec. 31, 2017 |
|
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Equity securities | $ 500,000 | $ 500,000 | $ 1,800,000 | ||
Equity securities, unrealized gain (loss) | 0 | $ 0 | 0 | $ (100,000) | |
Equity Securities without readily determinable fair value | 1,500,000 | 1,500,000 | 3,000,000 | ||
Equity securities without readily determinable fair value impairment | 1,500,000 | ||||
Level 1 to level 2 transfers | 0 | 0 | |||
Long-term debt, gross | 755,700,000 | 755,700,000 | 455,000,000 | ||
Restricted investments | 70,700,000 | 70,700,000 | 71,300,000 | ||
Restricted investments, at fair value | 66,400,000 | 66,400,000 | |||
Foreign Exchange Contract | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Derivative, notional amount | 7,500,000 | 7,500,000 | |||
Derivative, fair value, net | 500,000 | 500,000 | |||
Commodity Contract | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Derivative, fair value, net | 100,000 | 100,000 | 100,000 | ||
Swap | Commodity Contract | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Derivative, notional amount | 1,300,000 | 1,300,000 | |||
Zero Cost Collar | Commodity Contract | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Derivative, notional amount | 1,600,000 | 1,600,000 | |||
Reported Value Measurement | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Capital lease obligations | 80,000,000 | 80,000,000 | |||
Estimate of Fair Value Measurement | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Capital lease obligations | 88,400,000 | 88,400,000 | |||
Variable Interest Rate | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Long-term debt, gross | 370,300,000 | 370,300,000 | |||
Senior Notes | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Debt instrument, fair value disclosure | 286,300,000 | 286,300,000 | |||
Level 2 | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Equity securities | 0 | 0 | 0 | ||
Level 2 | Foreign Exchange Contract | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Derivative, fair value, net | $ 500,000 | $ 500,000 | $ 0 |
Financial Instruments, Risk Management, and Fair Value Measurements - Measured on a Recurring Basis (Details) - USD ($) |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2018 |
Sep. 30, 2017 |
Dec. 31, 2017 |
|
Assets: | |||||
Equity securities | $ 500,000 | $ 500,000 | $ 1,800,000 | ||
Deferred compensation plan investments | 2,300,000 | 2,300,000 | |||
Total assets | 3,400,000 | 3,400,000 | 1,800,000 | ||
Liabilities: | |||||
Deferred compensation arrangement | 4,500,000 | 4,500,000 | 2,000,000 | ||
Separation-related reimbursement awards | 300,000 | 300,000 | 900,000 | ||
Total liabilities | 4,800,000 | 4,800,000 | 2,900,000 | ||
Share-based compensation | 10,100,000 | $ 7,400,000 | |||
Level 1 | |||||
Assets: | |||||
Equity securities | 500,000 | 500,000 | 1,800,000 | ||
Deferred compensation plan investments | 2,300,000 | 2,300,000 | |||
Total assets | 2,800,000 | 2,800,000 | 1,800,000 | ||
Liabilities: | |||||
Deferred compensation arrangement | 4,500,000 | 4,500,000 | 2,000,000 | ||
Separation-related reimbursement awards | 300,000 | 300,000 | 900,000 | ||
Total liabilities | 4,800,000 | 4,800,000 | 2,900,000 | ||
Level 2 | |||||
Assets: | |||||
Equity securities | 0 | 0 | 0 | ||
Deferred compensation plan investments | 0 | 0 | |||
Total assets | 600,000 | 600,000 | 0 | ||
Liabilities: | |||||
Deferred compensation arrangement | 0 | 0 | 0 | ||
Separation-related reimbursement awards | 0 | 0 | 0 | ||
Total liabilities | 0 | 0 | 0 | ||
Level 3 | |||||
Assets: | |||||
Equity securities | 0 | 0 | 0 | ||
Deferred compensation plan investments | 0 | 0 | |||
Total assets | 0 | 0 | 0 | ||
Liabilities: | |||||
Deferred compensation arrangement | 0 | 0 | 0 | ||
Separation-related reimbursement awards | 0 | 0 | 0 | ||
Total liabilities | 0 | 0 | $ 0 | ||
Foreign Exchange Contract | Level 1 | |||||
Assets: | |||||
Derivative | 0 | 0 | |||
Foreign Exchange Contract | Level 3 | |||||
Assets: | |||||
Derivative | 0 | 0 | |||
Commodity Contract | |||||
Assets: | |||||
Derivative | 100,000 | 100,000 | |||
Commodity Contract | Level 1 | |||||
Assets: | |||||
Derivative | 0 | 0 | |||
Commodity Contract | Level 2 | |||||
Assets: | |||||
Derivative | 100,000 | 100,000 | |||
Commodity Contract | Level 3 | |||||
Assets: | |||||
Derivative | 0 | 0 | |||
Accrued Liabilities | |||||
Liabilities: | |||||
Share-based compensation | $ 100,000 | $ 0 | $ 0 | $ 300,000 |
Inventories, net (Details) - USD ($) $ in Millions |
Sep. 30, 2018 |
Jan. 01, 2018 |
Dec. 31, 2017 |
---|---|---|---|
Inventory, Net | |||
Raw materials | $ 40.8 | $ 40.1 | |
Production materials, stores and supplies | 16.8 | 13.4 | |
Finished and in-process goods | 145.2 | 114.3 | |
Subtotal | 202.8 | 167.8 | |
Less: excess of cost over LIFO cost | (8.5) | (7.8) | |
Inventories, net | $ 194.3 | $ 157.6 | $ 160.0 |
Property, plant and equipment, net (Details) - USD ($) $ in Millions |
Sep. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Property, Plant and Equipment | ||
Total cost | $ 1,037.1 | $ 961.3 |
Less: accumulated depreciation | (538.2) | (522.8) |
Property, plant and equipment, net | 498.9 | 438.5 |
Machinery and equipment | ||
Property, Plant and Equipment | ||
Total cost | 835.2 | 792.5 |
Buildings and leasehold equipment | ||
Property, Plant and Equipment | ||
Total cost | 112.2 | 115.0 |
Land and land improvements | ||
Property, Plant and Equipment | ||
Total cost | 19.6 | 18.0 |
Construction in progress | ||
Property, Plant and Equipment | ||
Total cost | $ 70.1 | $ 35.8 |
Goodwill and other intangible assets, net - Carrying Amount (Details) $ in Millions |
9 Months Ended |
---|---|
Sep. 30, 2018
USD ($)
| |
Goodwill | |
Goodwill, beginning balance | $ 12.4 |
Acquisitions | 118.7 |
Foreign currency translation | (0.5) |
Goodwill, ending balance | 130.6 |
Performance Chemicals | |
Goodwill | |
Goodwill, beginning balance | 8.1 |
Acquisitions | 118.7 |
Foreign currency translation | (0.5) |
Goodwill, ending balance | 126.3 |
Performance Materials | |
Goodwill | |
Goodwill, beginning balance | 4.3 |
Acquisitions | 0.0 |
Foreign currency translation | 0.0 |
Goodwill, ending balance | $ 4.3 |
Goodwill and other intangible assets, net - Intangible Assets (Details) - USD ($) $ in Millions |
Sep. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Finite-Lived Intangible Assets, Net | ||
Net | $ 129.2 | $ 4.9 |
Performance Chemicals | ||
Finite-Lived Intangible Assets, Net | ||
Gross carrying amount | 175.2 | 42.1 |
Accumulated amortization | 46.0 | 37.2 |
Net | 129.2 | 4.9 |
Performance Chemicals | Brands | ||
Finite-Lived Intangible Assets, Net | ||
Gross carrying amount | 13.9 | 13.9 |
Accumulated amortization | 12.2 | 11.8 |
Net | 1.7 | 2.1 |
Performance Chemicals | Patents | ||
Finite-Lived Intangible Assets, Net | ||
Gross carrying amount | 1.9 | 0.0 |
Accumulated amortization | 0.2 | 0.0 |
Net | 1.7 | 0.0 |
Performance Chemicals | Customer contracts and relationships | ||
Finite-Lived Intangible Assets, Net | ||
Gross carrying amount | 157.2 | 28.2 |
Accumulated amortization | 33.2 | 25.4 |
Net | 124.0 | 2.8 |
Performance Chemicals | Non-compete agreements | ||
Finite-Lived Intangible Assets, Net | ||
Gross carrying amount | 2.2 | 0.0 |
Accumulated amortization | 0.4 | 0.0 |
Net | $ 1.8 | $ 0.0 |
Goodwill and other intangible assets, net - Amortization (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2018 |
Sep. 30, 2017 |
|
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization expense | $ 3.6 | $ 0.6 | $ 8.8 | $ 1.9 |
Cost of sales | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization expense | 0.2 | 0.3 | 0.6 | 1.0 |
Selling, general and administrative expenses | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization expense | $ 3.4 | $ 0.3 | $ 8.2 | $ 0.9 |
Goodwill and other intangible assets, net - Maturity (Details) $ in Millions |
Sep. 30, 2018
USD ($)
|
---|---|
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity | |
2018 | $ 12.3 |
2019 | 14.3 |
2020 | 13.2 |
2021 | 12.3 |
2022 | $ 12.2 |
Debt including capital lease obligations - Long-term Debt Including Capital Lease Obligations (Details) - USD ($) $ in Millions |
Sep. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Line of Credit Facility | ||
Long-term debt, gross | $ 755.7 | $ 455.0 |
Less: debt issuance costs | 6.8 | 1.6 |
Total debt including capital lease obligations, net of debt issuance costs | 748.9 | 453.4 |
Less: debt maturing within one year | 4.9 | 9.4 |
Long-term debt including capital lease obligations | $ 744.0 | 444.0 |
Revolving credit facility | ||
Line of Credit Facility | ||
Interest Rate | 3.51% | |
Long-term debt, gross | $ 0.0 | 0.0 |
Letters of credit outstanding | 1.8 | |
Available under the facility | $ 748.2 | |
Term loan facility | ||
Line of Credit Facility | ||
Interest Rate | 3.49% | |
Long-term debt, gross | $ 375.0 | 375.0 |
Senior notes | ||
Line of Credit Facility | ||
Interest Rate | 4.50% | |
Long-term debt, gross | $ 300.0 | 0.0 |
Capital lease obligations | ||
Line of Credit Facility | ||
Interest Rate | 7.67% | |
Long-term debt, gross | $ 80.0 | 80.0 |
Other | ||
Line of Credit Facility | ||
Interest Rate | 5.09% | |
Long-term debt, gross | $ 0.7 | $ 0.0 |
Debt including capital lease obligations - Narrative (Details) |
Aug. 07, 2018
USD ($)
|
Jan. 24, 2018
USD ($)
|
Sep. 30, 2018 |
---|---|---|---|
Senior notes | |||
Line of Credit Facility | |||
Principal amount | $ 300,000,000.0 | ||
Stated interest rate | 4.50% | ||
Deferred finance costs | $ 5,700,000 | ||
Proceeds from debt, net of issuance costs | $ 294,300,000 | ||
Credit Agreement - Amendment | |||
Line of Credit Facility | |||
Increase in commitments | $ 200,000,000 | ||
Commitment fee rate | 0.05% | ||
Line of credit facility fees | $ 1,400,000 | ||
Amortization rate | 1.25% | ||
Revolving Credit Facility | |||
Line of Credit Facility | |||
Leverage ratio | 4 | ||
Leverage ratio potential increase | 4.5 | ||
Leverage ratio, interest | 3.00 | ||
Minimum | Credit Agreement - Amendment | |||
Line of Credit Facility | |||
Unused commitment fee | 0.15% | ||
Minimum | Base Rate | Credit Agreement - Amendment | |||
Line of Credit Facility | |||
Basis spread rate | 0.00% | ||
Minimum | LIBOR | Credit Agreement - Amendment | |||
Line of Credit Facility | |||
Basis spread rate | 1.00% | ||
Maximum | Credit Agreement - Amendment | |||
Line of Credit Facility | |||
Unused commitment fee | 0.30% | ||
Maximum | Base Rate | Credit Agreement - Amendment | |||
Line of Credit Facility | |||
Basis spread rate | 0.75% | ||
Maximum | LIBOR | Credit Agreement - Amendment | |||
Line of Credit Facility | |||
Basis spread rate | 1.75% |
Equity - Rollforward (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | |||||
---|---|---|---|---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2018 |
Sep. 30, 2017 |
Jun. 30, 2018 |
Jan. 01, 2018 |
Dec. 31, 2017 |
|
Stockholders' Equity Attributable to Parent | $ 322.7 | $ 322.7 | $ 338.0 | $ 263.9 | |||
Increase (Decrease) in Stockholders' Equity | |||||||
Beginning balance (shares) | 42,089,103 | ||||||
Net Income (Loss) Attributable to Parent | 49.5 | $ 33.8 | $ 127.0 | $ 84.9 | |||
Other comprehensive income (loss) | (3.8) | (6.1) | |||||
Exercise of stock options, net | 0.2 | ||||||
Tax payments related to vested restricted stock units | (0.6) | (2.1) | |||||
Share repurchase program | (9.0) | (18.1) | |||||
Share-based compensation plans | 3.8 | 11.5 | |||||
Adoption of ASC 606 | $ 1.6 | ||||||
Acquisition of noncontrolling interest | $ (55.2) | $ (55.2) | |||||
Ending balance (shares) | 41,992,323 | 41,992,323 | |||||
Ending balance, value | $ 322.7 | $ 322.7 | |||||
Common Stock | |||||||
Stockholders' Equity Attributable to Parent | $ 0.4 | $ 0.4 | 0.4 | 0.4 | |||
Increase (Decrease) in Stockholders' Equity | |||||||
Beginning balance (shares) | 42,309,000 | 42,209,000 | |||||
Common stock issued (shares) | 13,000 | 107,000 | |||||
Exercise of stock options, net (shares) | 6,000 | ||||||
Ending balance (shares) | 42,322,000 | 42,322,000 | |||||
Additional paid in capital | |||||||
Stockholders' Equity Attributable to Parent | $ 95.1 | $ 95.1 | 146.9 | 140.1 | |||
Increase (Decrease) in Stockholders' Equity | |||||||
Exercise of stock options, net | 0.2 | ||||||
Share-based compensation plans | 3.4 | 10.0 | |||||
Acquisition of noncontrolling interest | (55.2) | (55.2) | |||||
Retained earnings | |||||||
Stockholders' Equity Attributable to Parent | 271.4 | 271.4 | 221.9 | 142.8 | |||
Increase (Decrease) in Stockholders' Equity | |||||||
Net Income (Loss) Attributable to Parent | 49.5 | 127.0 | |||||
Adoption of ASC 606 | $ 1.6 | ||||||
Accumulated other comprehensive income (loss) | |||||||
Stockholders' Equity Attributable to Parent | (17.8) | (17.8) | (14.0) | (11.7) | |||
Increase (Decrease) in Stockholders' Equity | |||||||
Other comprehensive income (loss) | (3.8) | (6.1) | |||||
Treasury stock | |||||||
Stockholders' Equity Attributable to Parent | (26.4) | (26.4) | $ (17.2) | $ (7.7) | |||
Increase (Decrease) in Stockholders' Equity | |||||||
Tax payments related to vested restricted stock units | (0.6) | (2.1) | |||||
Share repurchase program | (9.0) | (18.1) | |||||
Share-based compensation plans | $ 0.4 | $ 1.5 |
Equity - Noncontrolling Interest (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2018 |
Sep. 30, 2017 |
|
Noncontrolling Interest | ||||
Beginning balance | $ 11.3 | $ 10.5 | $ 14.0 | $ 7.6 |
Net income (loss) attributable to noncontrolling interests | 2.2 | 4.6 | 12.7 | 12.3 |
Noncontrolling interest distributions | (2.1) | (3.4) | (15.3) | (8.2) |
Acquisition of noncontrolling interest | (11.4) | 0.0 | (11.4) | 0.0 |
Ending balance | $ 0.0 | $ 11.7 | $ 0.0 | $ 11.7 |
Equity - Noncontrolling Interest Narrative (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Aug. 01, 2018 |
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2018 |
Sep. 30, 2017 |
|
Business Acquisition [Line Items] | |||||
Acquisition of noncontrolling interest | $ 11.4 | $ 0.0 | $ 11.4 | $ 0.0 | |
Acquisition of noncontrolling interest | $ 55.2 | $ 55.2 | |||
Purification Cellutions LLC | |||||
Business Acquisition [Line Items] | |||||
Ownership interest | 30.00% | 30.00% | 30.00% | ||
Payments to acquire additional interest | $ 80.0 | ||||
Acquisition of noncontrolling interest | 11.4 | ||||
Deferred tax assets assumed | 13.4 | ||||
Acquisition of noncontrolling interest | $ 55.2 |
Equity - Share Repurchases (Details) - USD ($) |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2018 |
Nov. 01, 2018 |
Feb. 20, 2017 |
|
Equity, Class of Treasury Stock [Line Items] | ||||
Common stock amount authorized to be repurchased | $ 100,000,000 | |||
Shares repurchased during period (in shares) | 93,900 | 211,000 | ||
Weighted average cost per share (in dollars per share) | $ 96.01 | $ 85.89 | ||
Amount remained unused under repurchase program | $ 75,300,000 | $ 75,300,000 | ||
Subsequent Event | Common Stock | ||||
Equity, Class of Treasury Stock [Line Items] | ||||
Common stock amount authorized to be repurchased | $ 350,000,000 |
Retirement Plans - Summary of Components of Net Periodic Benefit Cost (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2018 |
Sep. 30, 2017 |
|
Pensions | ||||
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) [Abstract] | ||||
Service cost | $ 0.5 | $ 0.3 | $ 1.3 | $ 0.8 |
Interest cost | 0.2 | 0.2 | 0.6 | 0.6 |
Expected return on plan assets | (0.2) | (0.2) | (0.6) | (0.6) |
Defined Benefit Plan, Benefit Obligation, Actuarial Gain (Loss) | 0.0 | 0.0 | 0.1 | 0.0 |
Net periodic benefit cost (income) | 0.5 | 0.3 | 1.4 | 0.8 |
Other Benefits | ||||
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) [Abstract] | ||||
Service cost | 0.0 | 0.0 | 0.0 | 0.0 |
Interest cost | 0.0 | 0.0 | 0.0 | 0.0 |
Expected return on plan assets | 0.0 | 0.0 | 0.0 | 0.0 |
Defined Benefit Plan, Benefit Obligation, Actuarial Gain (Loss) | 0.0 | 0.0 | 0.0 | 0.0 |
Net periodic benefit cost (income) | $ 0.0 | $ 0.0 | $ 0.0 | $ 0.0 |
Retirement Plans - Narrative (Details) $ in Millions |
3 Months Ended |
---|---|
Sep. 30, 2018
USD ($)
| |
Postemployment Benefits [Abstract] | |
Discretionary contribution amount | $ 1.5 |
Restructuring and other (income) charges, net - Restructuring (Details) - USD ($) |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2018 |
Sep. 30, 2017 |
|
Restructuring and Related Activities [Abstract] | ||||
Gain on sale of assets and businesses | $ 0 | $ 0 | $ (600,000) | $ 0 |
Severance and other employee-related costs | 0 | 0 | 0 | 1,300,000 |
Other (income) charges, net | 0 | 100,000 | 0 | 2,200,000 |
Total restructuring and other (income) charges, net | $ 0 | $ 100,000 | $ (600,000) | $ 3,500,000 |
Restructuring and other (income) charges, net - Narrative (Details) - USD ($) |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2018 |
Sep. 30, 2017 |
|
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations | ||||
Gain on sale of assets and businesses | $ 0 | $ 0 | $ 600,000 | $ 0 |
Severance costs | $ 0 | 0 | $ 0 | 1,300,000 |
Miscellaneous Exit Costs | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations | ||||
Severance costs | $ 100,000 | $ 2,200,000 |
Restructuring and other (income) charges, net - Roll forward of Restructuring Reserve (Details) $ in Millions |
9 Months Ended |
---|---|
Sep. 30, 2018
USD ($)
| |
Restructuring Reserve | |
Restructuring reserve, beginning balance | $ 0.2 |
Change in reserve | 0.0 |
Cash payments | (0.1) |
Other | 0.0 |
Restructuring reserve, ending balance | $ 0.1 |
Income taxes - Effective tax rate (Details) |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2018 |
Sep. 30, 2017 |
|
Effective Income Tax Rate Reconciliation, Percent | ||||
Effective tax rate | 24.10% | 30.30% | 21.60% | 31.60% |
Income taxes - Tax Reconciliation (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2018 |
Sep. 30, 2017 |
|
Before tax | ||||
Income (loss) before income taxes | $ 68.1 | $ 55.1 | $ 178.2 | $ 142.1 |
Separation costs | 0.0 | 0.2 | 0.0 | 0.7 |
Restructuring and other (income) charges, net | 0.0 | 0.1 | (0.6) | 3.5 |
Acquisition and other related costs | 0.0 | 4.1 | 5.7 | 4.1 |
Results of legal entities with full valuation allowances | 0.0 | 0.5 | 0.0 | 2.0 |
Total discrete items | 0.0 | 4.9 | 5.1 | 10.3 |
Consolidated and combined operations, before discrete items | 68.1 | 60.0 | 183.3 | 152.4 |
Tax | ||||
Tax | 16.4 | 16.7 | 38.5 | 44.9 |
Separation costs, tax | 0.0 | 0.1 | 0.0 | 0.3 |
Restructuring & other (income) charges, tax | 0.0 | 0.1 | 0.0 | 0.7 |
Acquisition costs, tax | 0.0 | 1.5 | 1.3 | 1.5 |
Other tax only discrete items | 0.2 | 0.1 | 0.3 | (0.3) |
Total discrete items, tax | 0.2 | 1.8 | 1.6 | 2.2 |
Combined operations, before discrete items, tax | $ 16.6 | $ 18.5 | $ 40.1 | $ 47.1 |
Effective tax rate | 24.10% | 30.30% | 21.60% | 31.60% |
EAETR | 24.40% | 30.80% | 21.90% | 30.90% |
Legal and professional service fees | $ 0.0 | $ 4.1 | $ 4.3 | $ 4.1 |
Inventory fair value step-up amortization | 0.0 | $ 0.0 | $ 1.4 | $ 0.0 |
Pine Chemical Business | ||||
Tax | ||||
Legal and professional service fees | 4.3 | |||
Inventory fair value step-up amortization | $ 1.4 |
Income taxes - Narrative (Details) $ in Millions |
Dec. 31, 2017
USD ($)
|
---|---|
Income Tax Disclosure [Abstract] | |
Anticipated decrease in unrecognized tax benefit | $ 24.5 |
Segment information (Net Sales and Segment Operating Profit) (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2018 |
Sep. 30, 2017 |
|
Segment Reporting Information [Line Items] | ||||
Consolidated Net sales | $ 311.2 | $ 264.1 | $ 855.0 | $ 742.9 |
Segment Reporting Information, Profit (Loss) | ||||
Segment operating profits | 76.0 | 62.7 | 205.1 | 159.7 |
Separation costs | 0.0 | (0.2) | 0.0 | (0.7) |
Restructuring and other (income) charges | 0.0 | (0.1) | 0.6 | (3.5) |
Acquisition and other related costs | 0.0 | (4.1) | (5.7) | (4.1) |
Interest expense, net | (7.9) | (3.2) | (21.8) | (9.3) |
(Provision) benefit for income taxes | (16.4) | (16.7) | (38.5) | (44.9) |
Net income (loss) attributable to noncontrolling interests | (2.2) | (4.6) | (12.7) | (12.3) |
Net income (loss) attributable to Ingevity stockholders | 49.5 | 33.8 | 127.0 | 84.9 |
Performance Materials | ||||
Segment Reporting Information [Line Items] | ||||
Consolidated Net sales | 96.3 | 85.4 | 287.9 | 258.3 |
Segment Reporting Information, Profit (Loss) | ||||
Segment operating profits | 36.3 | 29.3 | 109.8 | 89.5 |
Performance Materials | Automotive Technologies product line | ||||
Segment Reporting Information [Line Items] | ||||
Consolidated Net sales | 86.6 | 75.6 | 258.6 | 230.1 |
Performance Materials | Process Purification product line | ||||
Segment Reporting Information [Line Items] | ||||
Consolidated Net sales | 9.7 | 9.8 | 29.3 | 28.2 |
Performance Materials | Oilfield Technologies product line | ||||
Segment Reporting Information [Line Items] | ||||
Consolidated Net sales | 84.0 | |||
Performance Materials | Industrial Specialties product line | ||||
Segment Reporting Information [Line Items] | ||||
Consolidated Net sales | 330.9 | |||
Performance Materials | Pavement Technologies product line | ||||
Segment Reporting Information [Line Items] | ||||
Consolidated Net sales | 152.2 | |||
Performance Chemicals | ||||
Segment Reporting Information [Line Items] | ||||
Consolidated Net sales | 214.9 | 178.7 | 567.1 | 484.6 |
Segment Reporting Information, Profit (Loss) | ||||
Segment operating profits | 39.7 | 33.4 | 95.3 | 70.2 |
Performance Chemicals | Oilfield Technologies product line | ||||
Segment Reporting Information [Line Items] | ||||
Consolidated Net sales | 32.5 | 20.3 | 84.0 | 58.1 |
Performance Chemicals | Industrial Specialties product line | ||||
Segment Reporting Information [Line Items] | ||||
Consolidated Net sales | 114.3 | 93.9 | 330.9 | 289.3 |
Performance Chemicals | Pavement Technologies product line | ||||
Segment Reporting Information [Line Items] | ||||
Consolidated Net sales | $ 68.1 | $ 64.5 | $ 152.2 | $ 137.2 |
Segment information (Acquisiton related costs) (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2018 |
Sep. 30, 2017 |
|
Segment Reporting [Abstract] | ||||
Legal and professional service fees | $ 0.0 | $ 4.1 | $ 4.3 | $ 4.1 |
Inventory fair value step-up amortization | 0.0 | 0.0 | 1.4 | 0.0 |
Acquisition and other related costs | $ 0.0 | $ 4.1 | $ 5.7 | $ 4.1 |
Earnings (loss) per share - Earnings per share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2018 |
Sep. 30, 2017 |
|
Earnings Per Share Reconciliation | ||||
Net income (loss) attributable to Ingevity stockholders | $ 49.5 | $ 33.8 | $ 127.0 | $ 84.9 |
Basic and Diluted earnings (loss) per share | ||||
Basic earnings (loss) per share attributable to Ingevity stockholders (usd per share) | $ 1.18 | $ 0.80 | $ 3.02 | $ 2.01 |
Diluted earnings (loss) per share attributable to Ingevity stockholders (usd per share) | $ 1.16 | $ 0.79 | $ 2.98 | $ 2.00 |
Shares | ||||
Weighted average number of common stock outstanding - Basic | 42,037 | 42,139 | 42,070 | 42,137 |
Weighted average additional shares assuming conversion of potential common stock | 620 | 410 | 554 | 383 |
Shares - diluted basis | 42,657 | 42,549 | 42,624 | 42,520 |
Earnings (loss) per share - Antidilutive (Details) - shares shares in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2018 |
Sep. 30, 2017 |
|
Earnings Per Share [Abstract] | ||||
Potentially anti-dilutive shares (shares) | 17 | 93 | 77 | 94 |
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