GAAP Diluted EPS $1.00 vs.
$0.48
Excluding Special Items, Diluted EPS
$0.85 vs. $0.66
Innospec Inc. (Nasdaq:IOSP) today announced its financial results
for the second quarter ended June 30, 2011.
Total net sales for the quarter were $186.5 million, an 11%
increase from $168.4 million in the corresponding period last year.
Net income was $24.6 million, or $1.00 per diluted share, more than
double the $12.0 million, or $0.48 per diluted share, reported a
year ago. EBITDA (earnings before interest, taxes, depreciation,
amortization and impairment) for the quarter was $34.2 million,
nearly twice the $17.8 million a year ago.
Results for the second quarter include after-tax foreign
exchange gains of $6.3 million, or $0.25 per diluted share. The
results also include other special items, which are summarized in
the table below. For the second quarter of 2011, these items had a
combined positive impact on net income of $3.8 million, or $0.15
per diluted share; a year ago, special items reduced net income by
$4.4 million, or $0.18 per diluted share. Excluding these items,
diluted earnings per share for the second quarter of 2011 were
$0.85, a 29% increase from $0.66 a year ago.
EBITDA and net income excluding special items, and related per
share amounts, are non-GAAP financial measures that are defined and
reconciled with GAAP results herein and in the schedules below.
| |
Quarter ended
June 30, 2011 |
Quarter ended
June 30, 2010 |
| |
After-tax (in millions) |
Per diluted share |
After-tax (in millions) |
Per diluted share |
| |
|
|
|
|
| Net income |
$ 24.6 |
$ 1.00 |
$ 12.0 |
$ 0.48 |
| |
|
|
|
|
| Foreign exchange (gains)/losses |
(6.3) |
(0.25) |
7.7 |
0.31 |
| Civil complaint legal and professional
expenses |
2.4 |
0.10 |
-- |
-- |
| Pension charge |
0.1 |
-- |
1.5 |
0.06 |
| Adjustment of income tax provisions |
-- |
-- |
(5.0) |
(0.20) |
| Restructuring charge |
-- |
-- |
0.2 |
0.01 |
| |
(3.8) |
(0.15) |
4.4 |
0.18 |
| |
|
|
|
|
| Net income excluding special
items |
$ 20.8 |
$ 0.85 |
$ 16.4 |
0.66 |
For the first six months of 2011, total net sales of $371.8
million increased 12% from $331.9 million in the corresponding
period last year. Net income for the first half was $46.1
million, or $1.88 per diluted share, up sharply from $19.4 million,
or $0.78 per diluted share, a year ago. Excluding special
items, diluted earnings per share for the first six months of 2011
were $1.59, a 20% increase from $1.33 a year ago. EBITDA for
the first half of 2011 was $67.7 million, compared with $33.2
million in last year's first half.
"Against the backdrop of a continued challenging economic
environment, Innospec's 29% increase in second quarter earnings
excluding special items was an outstanding performance," said
Patrick Williams, President and Chief Executive Officer. "Fuel
Specialties' sales momentum remains strong across most of its
markets, and while its gross margins did not improve as expected in
the second quarter, recent price increases and declines in crude
oil-related costs have set the stage for higher margins in the
second half of the year. Our Active Chemicals segment
delivered another all-time record quarter, with sharply higher
margins and operating income more than double a year
ago. Octane Additives also turned in solid results, with sales
and adjusted operating income up significantly from the first
quarter and only slightly below the exceptionally strong levels in
last year's second quarter."
Net sales in Fuel Specialties for the second quarter were $113.3
million, up 9% from $104.2 million in last year's second
quarter. By region, sales increased 14% in the Americas and
16% in Europe, Middle East and Africa (EMEA), but were down 20% in
Asia-Pacific due to the timing of shipments and some raw material
supply tightening. The segment's gross margin was 27.4%,
compared with 30.8% a year ago. Its operating income for the
quarter was $12.3 million, compared with $17.1 million a year
ago.
In Active Chemicals, net sales were $48.7 million for the
quarter, a 28% increase from $38.1 million a year ago. By
region, sales rose 11% in the Americas, 38% in EMEA, and 48% in
Asia-Pacific. Active Chemicals' gross margin was 28.1% for the
quarter, up sharply from 21.3% a year ago. The segment's
operating income was $9.1 million, compared with $3.6 million in
last year's second quarter.
Octane Additives' net sales for the quarter were $24.5 million,
down 6% from $26.1 million a year ago. The segment's gross
margin was 54.3%, compared with 52.9% a year ago. Operating
income for the quarter was $8.1 million (including a $3.0 million
accrual for civil complaint legal and professional expenses),
compared with $11.6 million a year ago.
Corporate costs for the quarter were $6.5 million, compared with
$4.8 million a year ago. The increase primarily reflects
higher accruals for share based compensation expense, driven by the
increase in Innospec's share price during the quarter. As
expected, the charge related to the Company's pension plan of $0.1
million was down significantly from $2.1 million (pre-tax) a year
ago. The effective tax rate for the quarter was 16.6%,
compared to 7.0% in last year's second quarter. Excluding the
positive tax adjustment in last year's second quarter, the
effective tax rate was 26.2%.
Net cash generated from operations was $5.8 million for the
quarter, primarily due to continued strong operating income, partly
offset by increased working capital requirements of $17.6
million. As of June 30, 2011, Innospec had $103.4 million in
cash and cash equivalents, exceeding its total debt of $33.0
million by $70.4 million.
Mr. Williams concluded, "We remain confident that our core
businesses in Fuel Specialties and Active Chemicals are
well-positioned to drive significant growth and value for our
shareholders in the years ahead. We also continue to explore
opportunities to leverage our leading market positions and
financial resources through potential strategic acquisitions that
could further enhance our growth and profitability over the longer
term."
Revision to Classification of Certain Items
During the quarter, the Company revised the classification of
certain amortization of intangible assets expenses in its results
for 2011 and comparable information for 2010. Previously,
these expenses were disclosed separately within operating expenses
and are now charged to cost of goods sold or selling
expenses. This has no impact on 2011 or any prior periods'
reported net sales, income before income taxes, net income, EBITDA,
earnings per share, net cash provided by operating activities or
any balance sheet category.
Use of Non-GAAP Financial Measures
The information presented in this press release includes
financial measures that are not calculated or presented in
accordance with Generally Accepted Accounting Principles in the
United States (GAAP). These non-GAAP financial measures
comprise EBITDA and net income excluding special items, and related
per share amounts. EBITDA is net income per our consolidated
financial statements adjusted for the exclusion of charges for
interest expense (net), income taxes, depreciation, amortization
and impairment of Octane Additives segment goodwill. Net
income excluding special items is net income per our consolidated
financial statements adjusted for the exclusion of foreign exchange
(gains)/losses, civil complaint legal and professional expenses,
pension charge, adjustment of income tax provisions and
restructuring charge. Reconciliations of these non-GAAP
financial measures to their most directly comparable GAAP financial
measures are provided herein and in the schedules below. The
Company believes that such non-GAAP financial measures provide
useful information to investors and may assist them in evaluating
the Company's underlying performance and identifying operating
trends. In addition, management uses these non-GAAP financial
measures internally to allocate resources and evaluate the
performance of the Company's operations. While the Company
believes that such measures are useful in evaluating the Company's
performance, investors should not consider them to be a substitute
for financial measures prepared in accordance with GAAP. In
addition, these non-GAAP financial measures may differ from
similarly-titled non-GAAP financial measures used by other
companies and do not provide a comparable view of the Company's
performance relative to other companies in similar
industries. Management believes the most directly comparable
GAAP financial measure is GAAP net income and has provided a
reconciliation of EBITDA and net income excluding special items,
and related per share amounts, to GAAP net income herein and in the
schedules below.
About Innospec Inc.
Innospec Inc. is an international specialty chemicals company
with approximately 850 employees in 20 countries. Innospec
manufactures and supplies a wide range of specialty chemicals to
markets in the Americas, Europe, the Middle East, Africa and
Asia-Pacific. Innospec's Fuel Specialties business
specializes in manufacturing and supplying the fuel additives that
help improve fuel efficiency, boost engine performance and reduce
harmful emissions. Innospec's Active Chemicals business provides
effective technology-based solutions for our customers' processes
or products focused in the Personal Care; Household, Industrial
& Institutional; and Fragrance Ingredients markets. Innospec's
Octane Additives business is the world's only producer of tetra
ethyl lead.
Forward-Looking Statements
This press release contains certain "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act
of 1995. All statements other than statements of historical
facts included or incorporated herein may constitute
forward-looking statements. Such forward-looking statements
include statements (covered by words like "expects", "anticipates",
"may", "believes" or similar words or expressions), for example,
which relate to operating performance, events or developments that
we expect or anticipate will or may occur in the future (including,
without limitation, any of the Company's guidance in respect of
sales, gross margins, pension liabilities and charges, net income,
growth potential and other measures of financial
performance). Although forward-looking statements are believed
by management to be reasonable when made, caution should be
exercised not to place undue reliance on such statements because
they are subject to certain risks, uncertainties and assumptions,
including in respect of the general business environment,
regulatory actions or changes. If the risks or uncertainties
materialize or assumptions prove incorrect or change, our actual
performance or results may differ materially from those expressed
or implied by such forward-looking statements and
assumptions. Additional information regarding risks,
uncertainties and assumptions relating to the Company and affecting
our business operations and prospects are described in the
Company's Annual Report on Form 10-K for the year ended December
31, 2010, and other reports filed with the U.S. Securities and
Exchange Commission. You are urged to carefully review and
consider the cautionary statements and other disclosures made in
those filings, including specifically those under the heading "Risk
Factors". The Company undertakes no obligation to publicly
update or revise any forward-looking statements, whether as a
result of new information, future events or otherwise.
| |
|
|
|
|
Schedule 1 |
| |
|
|
|
|
| INNOSPEC INC. AND
SUBSIDIARIES |
| CONSOLIDATED STATEMENTS
OF INCOME |
| |
|
|
|
|
|
| |
|
|
|
|
|
| |
|
Three Months Ended June 30 |
Six Months Ended June 30 |
| |
|
2011 |
2010 |
2011 |
2010 |
| (in millions, except share and per
share data) |
|
|
|
|
|
| |
|
|
|
|
|
| Net sales |
|
$ 186.5 |
$ 168.4 |
$ 371.8 |
$ 331.9 |
| Cost of goods sold |
|
(128.4) |
(114.4) |
(260.9) |
(226.5) |
| Gross profit |
|
58.1 |
54.0 |
110.9 |
105.4 |
| |
|
|
|
|
|
| Selling, general and administrative |
|
(30.5) |
(24.1) |
(54.5) |
(51.4) |
| Research and development |
|
(4.7) |
(4.5) |
(9.0) |
(8.5) |
| Restructuring charge |
|
-- |
(0.3) |
-- |
(8.5) |
| Impairment of Octane Additives segment
goodwill |
|
(0.5) |
(0.5) |
(1.1) |
(1.1) |
| Profit on disposal |
|
-- |
0.2 |
-- |
0.2 |
| Total operating expenses |
|
(35.7) |
(29.2) |
(64.6) |
(69.3) |
| Operating income |
|
22.4 |
24.8 |
46.3 |
36.1 |
| Other net income/(expense) |
|
7.9 |
(10.8) |
13.2 |
(10.9) |
| Interest expense (net) |
|
(0.8) |
(1.1) |
(1.7) |
(2.3) |
| Income before income taxes |
|
29.5 |
12.9 |
57.8 |
22.9 |
| Income taxes |
|
(4.9) |
(0.9) |
(11.7) |
(3.5) |
| Net income |
|
$24.6 |
$12.0 |
$46.1 |
$19.4 |
| |
|
|
|
|
|
| Earnings per share |
Basic |
$ 1.04 |
$ 0.50 |
$ 1.95 |
$ 0.82 |
| |
Diluted |
$ 1.00 |
$ 0.48 |
$ 1.88 |
$ 0.78 |
| |
|
|
|
|
|
| Weighted average shares |
Basic |
23,726 |
23,781 |
23,691 |
23,732 |
| outstanding (in thousands) |
Diluted |
24,519 |
25,005 |
24,523 |
24,915 |
| |
|
|
|
|
|
| |
|
|
|
|
| |
|
|
|
Schedule 2A |
| INNOSPEC INC. AND
SUBSIDIARIES |
| SEGMENTAL
ANALYSIS |
| |
|
|
|
|
| SEGMENTAL ANALYSIS OF
RESULTS |
| |
Three Months Ended June 30 |
Six Months Ended June 30 |
| (in millions) |
2011 |
2010 |
2011 |
2010 |
| |
|
|
|
|
| Net sales |
|
|
|
|
| Fuel Specialties |
$ 113.3 |
$ 104.2 |
$ 240.4 |
$ 217.0 |
| Active Chemicals |
48.7 |
38.1 |
95.2 |
75.5 |
| Octane Additives |
24.5 |
26.1 |
36.2 |
39.4 |
| |
186.5 |
168.4 |
371.8 |
331.9 |
| |
|
|
|
|
| Gross profit |
|
|
|
|
| Fuel Specialties |
31.1 |
32.1 |
67.5 |
69.8 |
| Active Chemicals |
13.7 |
8.1 |
25.4 |
16.1 |
| Octane Additives |
13.3 |
13.8 |
18.0 |
19.5 |
| |
58.1 |
54.0 |
110.9 |
105.4 |
| |
|
|
|
|
| Operating income |
|
|
|
|
| Fuel Specialties |
12.3 |
17.1 |
34.6 |
39.2 |
| Active Chemicals |
9.1 |
3.6 |
16.7 |
7.7 |
| Octane Additives |
8.1 |
11.6 |
10.3 |
18.3 |
| Pension charge |
(0.1) |
(2.1) |
(0.2) |
(5.9) |
| Corporate costs |
(6.5) |
(4.8) |
(14.0) |
(13.8) |
| |
22.9 |
25.4 |
47.4 |
45.5 |
| |
|
|
|
|
| Restructuring charge |
-- |
(0.3) |
-- |
(8.5) |
| Impairment of Octane Additives segment
goodwill |
(0.5) |
(0.5) |
(1.1) |
(1.1) |
| Profit on disposal |
-- |
0.2 |
-- |
0.2 |
| Total operating income |
$ 22.4 |
$ 24.8 |
$ 46.3 |
$ 36.1 |
| |
|
|
|
|
| |
|
|
|
Schedule 2B |
| |
|
|
|
|
| NON-GAAP MEASURES |
| |
Three Months Ended June 30 |
Six Months Ended June 30 |
| |
2011 |
2010 |
2011 |
2010 |
| (in millions) |
|
|
|
|
| |
|
|
|
|
| Net income |
$ 24.6 |
$ 12.0 |
$ 46.1 |
$ 19.4 |
| Interest expense (net) |
0.8 |
1.1 |
1.7 |
2.3 |
| Income taxes |
4.9 |
0.9 |
11.7 |
3.5 |
| Depreciation and amortization |
3.4 |
3.3 |
7.1 |
6.9 |
| Impairment of Octane Additives segment
goodwill |
0.5 |
0.5 |
1.1 |
1.1 |
| EBITDA |
34.2 |
17.8 |
67.7 |
33.2 |
| |
|
|
|
|
| Fuel Specialties |
13.4 |
18.2 |
36.9 |
41.5 |
| Active Chemicals |
10.6 |
5.1 |
19.7 |
10.7 |
| Octane Additives |
8.5 |
12.0 |
11.2 |
19.2 |
| Pension charge |
(0.1) |
(2.1) |
(0.2) |
(5.9) |
| Corporate costs |
(6.1) |
(4.5) |
(13.1) |
(13.1) |
| |
26.3 |
28.7 |
54.5 |
52.4 |
| Restructuring charge |
-- |
(0.3) |
-- |
(8.5) |
| Profit on disposal |
-- |
0.2 |
-- |
0.2 |
| Other net income/(expense) |
7.9 |
(10.8) |
13.2 |
(10.9) |
| EBITDA |
$ 34.2 |
$ 17.8 |
$ 67.7 |
$ 33.2 |
| |
|
|
|
|
| |
|
Schedule 3 |
| INNOSPEC INC. AND
SUBSIDIARIES |
| CONSOLIDATED BALANCE
SHEETS |
| |
|
|
| |
June 30 2011 |
December 31 2010 |
| Assets |
(in millions) |
| Current assets |
|
|
| Cash and cash equivalents |
$ 103.4 |
$ 111.3 |
| Trade and other accounts receivable
(less allowance of $2.1 and $2.1, respectively) |
96.8 |
84.2 |
| Inventories |
142.4 |
122.3 |
| Prepaid expenses |
6.5 |
4.1 |
| Total current assets |
349.1 |
321.9 |
| |
|
|
| Property, plant and equipment |
48.9 |
48.7 |
| Goodwill |
142.6 |
143.6 |
| Intangible assets |
16.8 |
19.0 |
| Deferred finance costs |
0.1 |
0.5 |
| Deferred income taxes |
12.1 |
12.7 |
| Other non-current assets |
2.5 |
1.9 |
| Total assets |
$ 572.1 |
$ 548.3 |
| |
|
|
| Liabilities and Stockholders'
Equity |
|
|
| Accounts payable |
$ 57.5 |
$ 45.9 |
| Current portion of accrued liabilities |
79.1 |
85.7 |
| Accrued income taxes |
2.7 |
6.1 |
| Current portion of long-term debt |
33.0 |
15.0 |
| Current portion of plant closure
provisions |
4.0 |
3.9 |
| Current portion of unrecognized tax
benefits |
2.2 |
2.2 |
| Current portion of deferred income |
0.1 |
0.1 |
| Total current liabilities |
178.6 |
158.9 |
| |
|
|
| Accrued liabilities, net of current
portion |
13.5 |
13.6 |
| Long-term debt, net of current portion |
-- |
32.0 |
| Plant closure provisions, net of current
portion |
23.4 |
23.6 |
| Unrecognized tax benefits, net of current
portion |
6.5 |
6.4 |
| Pension liability |
7.8 |
11.7 |
| Other non-current liabilities |
0.4 |
0.5 |
| Deferred income, net of current portion |
1.1 |
0.9 |
| Total stockholders' equity |
340.8 |
300.7 |
| Total liabilities and stockholders'
equity |
$ 572.1 |
$ 548.3 |
| |
|
|
| |
|
Schedule 4 |
| INNOSPEC INC. AND
SUBSIDIARIES |
| CONSOLIDATED STATEMENTS
OF CASH FLOWS |
| |
|
|
| |
Six Months Ended June 30 |
| |
2011 |
2010 |
| |
(in millions) |
| Cash Flows from Operating
Activities |
|
|
| |
|
|
| Net income |
$ 46.1 |
$ 19.4 |
| Adjustments to reconcile net income to cash
provided by operating activities: |
|
|
| Depreciation and amortization |
7.5 |
7.7 |
| Impairment of Octane Additives segment
goodwill |
1.1 |
1.1 |
| Deferred income taxes |
0.6 |
1.3 |
| Profit on disposal of property, plant and
equipment |
-- |
(0.2) |
| Changes in working capital |
(33.9) |
(8.7) |
| Excess tax benefit from stock based
payment arrangements |
(1.2) |
-- |
| Income taxes and other current
liabilities |
(3.6) |
(8.1) |
| Movement on plant closure provisions |
(0.2) |
(0.1) |
| Movement on pension liability |
(4.4) |
8.1 |
| Stock option compensation |
1.6 |
-- |
| Movements on other non-current assets and
liabilities |
(2.1) |
(0.1) |
| Net cash provided by operating
activities |
11.5 |
20.4 |
| |
|
|
| Cash Flows from Investing
Activities |
|
|
| |
|
|
| Capital expenditures |
(4.0) |
(3.6) |
| Proceeds on disposal of property, plant and
equipment |
-- |
0.2 |
| Net cash (used in) investing activities |
(4.0) |
(3.4) |
| |
|
|
| Cash Flows from Financing
Activities |
|
|
| |
|
|
| Net receipt of revolving credit facility |
1.0 |
6.0 |
| Repayment of term loan |
(15.0) |
(10.0) |
| Excess tax benefit from stock based payment
arrangements |
1.2 |
-- |
| Issue of treasury stock |
0.7 |
0.1 |
| Repurchase of common stock |
(4.1) |
(0.2) |
| Net cash (used in) financing activities |
(16.2) |
(4.1) |
| Effect of foreign currency exchange rate
changes on cash |
0.8 |
(4.5) |
| Net change in cash and cash equivalents |
(7.9) |
8.4 |
| Cash and cash equivalents at beginning of
period |
111.3 |
68.6 |
| Cash and cash equivalents at end of
period |
$ 103.4 |
$ 77.0 |
| |
|
|
| Amortization of deferred finance
costs of $0.4 million (2010 -- $0.8 million) are included in
depreciation and amortization in the cash flow statement but in
interest expense in the income statement. |
CONTACT: Brian Watt
Innospec Inc.
+44-151-356-6241
Brian.Watt@innospecinc.com
Robert D. Ferris
RF Binder Partners
+1-212-994-7505
Robert.Ferris@RFBinder.com
Innospec (NASDAQ:IOSP)
Graphique Historique de l'Action
De Juin 2024 à Juil 2024
Innospec (NASDAQ:IOSP)
Graphique Historique de l'Action
De Juil 2023 à Juil 2024
