Innospec Inc. (NASDAQ: IOSP) today announced its financial results
for the third quarter ended September 30, 2020. At the same
time, the Company announced that it has declared a semi-annual
dividend of $0.52 per common share for the second half of 2020,
which will be paid on November 25, 2020 to shareholders of record
as of November 17, 2020. This brings the annual dividend to $1.04
per share compared to $1.02 per share in 2019.
Total net sales for the quarter were $265.1
million, down 29 percent from the $371.9 million reported in the
corresponding quarter last year. Net income was $12.7
million, or $0.51 per share, and EBITDA was $31.5 million, compared
to net income of $30.1 million, or $1.22 per share, and EBITDA of
$51.1 million in the third quarter of 2019.
Results for this quarter include special items
summarized in the table below. Excluding these items, adjusted
non-GAAP EPS was $0.71 compared to $1.40 a year ago. Cash
generation in the quarter was excellent with net cash provided by
operating activities of $55.5 million before capital expenditures
of $7.1 million. Innospec closed the quarter in a net cash
position of $66.0 million.
EBITDA, income before income taxes 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 September 30, 2020 |
|
Quarter ended September 30, 2019 |
|
|
|
|
|
(in millions, except
share and per share data) |
|
Incomebeforeincometaxes |
|
Netincome |
|
Per diluted share |
|
Incomebeforeincome taxes |
|
Net income |
|
Per diluted share |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reported GAAP
amounts |
$ |
20.2 |
|
$ |
12.7 |
|
$ |
0.51 |
|
$ |
37.8 |
$ |
30.1 |
$ |
1.22 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of acquired
intangible assets |
|
3.5 |
|
|
2.8 |
|
|
0.11 |
|
|
4.6 |
|
3.6 |
|
0.15 |
Change in UK statutory tax
rate |
|
- |
|
|
2.6 |
|
|
0.11 |
|
|
- |
|
- |
|
- |
Foreign currency exchange
(gains)/losses |
|
(2.4 |
) |
|
(1.8 |
) |
|
(0.07 |
) |
|
0.5 |
|
0.4 |
|
0.02 |
Legacy costs of closed
operations |
|
1.1 |
|
|
0.9 |
|
|
0.04 |
|
|
- |
|
- |
|
- |
Adjustment of income tax
provisions |
|
- |
|
|
0.3 |
|
|
0.01 |
|
|
- |
|
0.3 |
|
0.01 |
|
|
2.2 |
|
|
4.8 |
|
|
0.20 |
|
|
5.1 |
|
4.3 |
|
0.18 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted non-GAAP
amounts |
$ |
22.4 |
|
$ |
17.5 |
|
$ |
0.71 |
|
$ |
42.9 |
$ |
34.4 |
$ |
1.40 |
Commenting on the third quarter results, Patrick
S. Williams, President and Chief Executive Officer, said,
“As anticipated, this quarter was a substantial
improvement over the prior quarter, although the recovery in some
of our businesses has been slower than we had hoped. Sales
and operating income grew sequentially across all business units
and regions, and we again generated excellent cash flow while
continuing to fund our key organic growth projects.
Performance Chemicals delivered very strong
results with sales growing year over year. Along with gross
margin improvement, operating income increased 33 percent over the
same period in 2019. We expect to see increased customer
sales in chemistries that are more natural, mild and require less
single use packaging. We believe that we are well positioned
to support our customers in their drive to deliver these new
technologically advanced products to consumers.
In Fuel Specialties, global fuel demand
increased from the second quarter low point. Operating income
was down significantly compared to 2019 but gross margins were
within our expected range. Key drivers of our Fuel
Specialties segment such as automotive, trucking and aviation fuel
demand are still below 2019 levels but are expected to continue
improving as we move through the fourth quarter and into 2021.
In Oilfield Services, growth in production and
drag reducing agent sales helped offset a delayed recovery in US
completions. Sequential operating results improved
substantially as a result of increased sales, gross margins
returning to their expected range, and our focus on cost
control. We feel confident that we will achieve strong
operating leverage as oilfield and midstream activity
increases.
We delivered excellent cash flow which allowed
us to repay all our external bank debt in the quarter and maintain
cash on the balance sheet.”
Revenues in Fuel Specialties were $120.0 million
for the quarter down 17 percent from last year. Volumes were
down by 12 percent reflecting the reduction in fuel demand and
there was a negative price/mix effect of 5 percent with negligible
currency impact. Gross margins of 33.6 percent were within
our expected range but down 3.9 points from a strong prior year
comparative quarter. Operating income was $22.2 million down
from $31.1 million a year ago. Sequentially operating income
improved by $17.5 million over the second quarter of this
year.
In Performance Chemicals, revenues of $102.0
million were up 2 percent from $99.9 million a year ago as an
increase in volumes of 5 percent and a positive currency impact of
3 percent offset an adverse price/mix of 6 percent. Gross
margins improved to 23.5 percent up 0.9 percentage points on the
same quarter in 2019. Operating income was up by 33 percent
from last year at $12.4 million.
In Oilfield Services, revenues of $43.1 million
were down by 64 percent on the third quarter of 2019, driven by low
levels of customer activity in US completions. Gross margins
were 33.4 percent down slightly from 33.9 percent in the prior
year. This translated into an operating loss of $4.5 million
compared to an operating income of $10.0 million in the same
quarter last year. Sequentially operating results improved by
$7.9 million over the second quarter of this year.
Corporate costs for the quarter were $13.3
million, similar to the $13.0 million recorded a year ago.
The effective tax rate for the quarter was 37.1
percent compared to 20.4 percent last year primarily due to the
change in the U.K. tax rate. The adjusted effective tax rate
was 23.3 percent compared to 21.8 percent last year as a
consequence of the geographical location of taxable profits.
Net cash provided by operating activities in the
quarter was $55.5 million, compared to $40.0 million a year
ago. As of September 30, 2020, Innospec had $66.6 million in
cash and cash equivalents, and finance lease debt of $0.6 million,
resulting in a net cash position of $66.0 million. Mr.
Williams concluded,
“We remain focused in all our businesses on
helping our customers innovate the next generation of products that
are intended to drive growth in the post Covid world.
In Performance Chemicals, we plan to continue to
invest in global capacity to produce our leading mild and natural
home and personal care products as well as to advance our position
in the agricultural, mining and construction end-markets. We
believe that consumer preferences for natural and environmentally
friendly products have further strengthened since the onset of the
pandemic.
In Fuel Specialties, we intend to maintain our
technology leadership in additives that reduce emissions and
improve efficiency and we believe that we remain positioned to
extend this into applications such as fuel efficient gasoline
direct injection engines and low sulfur marine fuels.
In Oilfield Services, where sales have been the
most severely impacted, we continue to focus on technology driven
organic growth. We expect that our drag reducing agent
business will accelerate our recovery and help improve the overall
business margin profile in the coming years. In parallel, we
feel that our solutions for completion and production are well
suited to help our E&P customers achieve their post crisis
development objectives.
Our liquidity position has strengthened again in
the quarter. With the support of our strong balance sheet, we
believe that our key organic growth investments remain on
track. We continue to review a number of acquisition
opportunities which would complement our existing business.
I am delighted the Board has decided to maintain
our semi-annual dividend at $0.52 bringing our dividend to $1.04
for the full year.”
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, income before income taxes excluding special
items, net income excluding special items and related per share
amounts together with net cash. EBITDA is net income per our
consolidated financial statements adjusted for the exclusion of
charges for interest expense, net, income taxes, depreciation,
impairment and amortization. Income before income taxes, net
income and diluted EPS, excluding special items, per our
consolidated financial statements are adjusted for the exclusion of
amortization of acquired intangible assets, change in UK statutory
tax rate, foreign currency exchange (gains)/losses, legacy costs of
closed operations and adjustment of income tax provisions. Net cash
is cash and cash equivalents less total debt. 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, these non-GAAP
measures address questions the Company routinely receives from
analysts and investors and the Company has determined that it is
appropriate to make this data available to all investors.
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 uses adjusted EPS (the most
directly comparable GAAP financial measure for which is GAAP EPS)
and adjusted net income and EBITDA (the most directly comparable
GAAP financial measure for which is GAAP net income) to allocate
resources and evaluate the performance of the Company’s
operations. 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 2000 employees in 24
countries. Innospec manufactures and supplies a wide range of
specialty chemicals to markets in the Americas, Europe, the Middle
East, Africa and Asia-Pacific. The Fuel Specialties business
specializes in manufacturing and supplying fuel additives that
improve fuel efficiency, boost engine performance and reduce
harmful emissions. Oilfield Services provides specialty chemicals
to all elements of the oil and gas exploration and production
industry. The Performance Chemicals business creates
innovative technology-based solutions for our customers in the
Personal Care, Home Care, Agrochemical, Mining and Industrial
markets. Octane Additives produces octane improvers to
enhance gasoline.
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,” “estimates,” “anticipates,” “may,” “believes,”
“feels,” “plan,” “intend” or similar words or expressions, for
example) which relate to earnings, growth potential, operating
performance, events or developments that we expect or anticipate
will or may occur in the future. Although forward-looking
statements are believed by management to be reasonable when made,
they are subject to certain risks, uncertainties and assumptions,
including, the effects of the COVID-19 pandemic, such as its
duration, its unknown long-term economic impact, measures taken by
governmental authorities to address it and the manner in which the
pandemic may precipitate or exacerbate other risks and/or
uncertainties, and our actual performance or results may differ
materially from these forward-looking statements. Additional
information regarding risks, uncertainties and assumptions relating
to Innospec and affecting our business operations and prospects are
described in Innospec’s Annual Report on Form 10-K for the year
ended December 31, 2019, Innospec’s Quarterly Report on Form 10-Q
for the quarter ended June 30, 2020 and other reports filed with
the U.S. Securities and Exchange Commission. You are urged to
review our discussion of risks and uncertainties that could cause
actual results to differ from forward-looking statements under the
heading "Risk Factors” in such reports. Innospec undertakes
no obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, future events
or otherwise.
Contacts:
Brian WattInnospec
Inc.+44-151-355-3611Brian.Watt@innospecinc.com
|
|
INNOSPEC INC. AND
SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF
INCOME |
|
Schedule 1 |
|
|
|
|
|
Three Months EndedSeptember
30 |
|
|
Nine Months Ended September 30 |
(in millions, except share and per share data)
|
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales |
|
$ |
265.1 |
|
|
$ |
371.9 |
|
|
$ |
882.3 |
|
|
$ |
1,122.6 |
|
Cost of
goods sold |
|
|
(186.4 |
) |
|
|
(252.8 |
) |
|
|
(630.6 |
) |
|
|
(774.6 |
) |
Gross
profit |
|
|
78.7 |
|
|
|
119.1 |
|
|
|
251.7 |
|
|
|
348.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative |
|
|
(54.2 |
) |
|
|
(71.2 |
) |
|
|
(182.1 |
) |
|
|
(214.9 |
) |
Research and development |
|
|
(7.7 |
) |
|
|
(9.7 |
) |
|
|
(24.4 |
) |
|
|
(27.0 |
) |
Restructuring charge |
|
|
- |
|
|
|
- |
|
|
|
(21.1 |
) |
|
|
- |
|
Impairment of intangible assets |
|
|
- |
|
|
|
- |
|
|
|
(19.8 |
) |
|
|
- |
|
Total
operating expenses |
|
|
(61.9 |
) |
|
|
(80.9 |
) |
|
|
(247.4 |
) |
|
|
(241.9 |
) |
Operating income |
|
|
16.8 |
|
|
|
38.2 |
|
|
|
4.3 |
|
|
|
106.1 |
|
Other
income, net |
|
|
3.8 |
|
|
|
1.0 |
|
|
|
7.8 |
|
|
|
5.1 |
|
Interest
expense, net |
|
|
(0.4 |
) |
|
|
(1.4 |
) |
|
|
(1.5 |
) |
|
|
(4.1 |
) |
Income
before income taxes |
|
|
20.2 |
|
|
|
37.8 |
|
|
|
10.6 |
|
|
|
107.1 |
|
Income
taxes |
|
|
(7.5 |
) |
|
|
(7.7 |
) |
|
|
(4.5 |
) |
|
|
(26.0 |
) |
Net
income |
|
$ |
12.7 |
|
|
$ |
30.1 |
|
|
$ |
6.1 |
|
|
$ |
81.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings
per share: |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.52 |
|
|
$ |
1.23 |
|
|
$ |
0.25 |
|
|
$ |
3.31 |
|
Diluted |
|
$ |
0.51 |
|
|
$ |
1.22 |
|
|
$ |
0.25 |
|
|
$ |
3.28 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
average shares outstanding (in thousands): |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
24,570 |
|
|
|
24,491 |
|
|
|
24,555 |
|
|
|
24,476 |
|
Diluted |
|
|
24,720 |
|
|
|
24,715 |
|
|
|
24,758 |
|
|
|
24,700 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INNOSPEC INC. AND SUBSIDIARIES |
|
Schedule 2A |
|
|
|
|
|
|
|
SEGMENTAL ANALYSIS OF RESULTS |
|
|
Three Months Ended September 30 |
|
|
Nine Months Ended September 30 |
(in millions) |
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
sales: |
|
|
|
|
|
|
|
|
|
|
|
|
Fuel Specialties |
|
$ |
120.0 |
|
|
$ |
144.1 |
|
|
$ |
374.4 |
|
|
$ |
433.4 |
|
Performance Chemicals |
|
|
102.0 |
|
|
|
99.9 |
|
|
|
310.8 |
|
|
|
322.7 |
|
Oilfield Services |
|
|
43.1 |
|
|
|
121.4 |
|
|
|
197.1 |
|
|
|
358.1 |
|
Octane Additives |
|
|
- |
|
|
|
6.5 |
|
|
|
- |
|
|
|
8.4 |
|
|
|
|
265.1 |
|
|
|
371.9 |
|
|
|
882.3 |
|
|
|
1,122.6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
profit/(loss): |
|
|
|
|
|
|
|
|
|
|
|
|
Fuel Specialties |
|
|
40.3 |
|
|
|
54.1 |
|
|
|
116.9 |
|
|
|
154.5 |
|
Performance Chemicals |
|
|
24.0 |
|
|
|
22.6 |
|
|
|
76.5 |
|
|
|
73.2 |
|
Oilfield Services |
|
|
14.4 |
|
|
|
41.2 |
|
|
|
60.5 |
|
|
|
120.4 |
|
Octane Additives |
|
|
- |
|
|
|
1.2 |
|
|
|
(2.2 |
) |
|
|
(0.1 |
) |
|
|
|
78.7 |
|
|
|
119.1 |
|
|
|
251.7 |
|
|
|
348.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income/(loss): |
|
|
|
|
|
|
|
|
|
|
|
|
Fuel Specialties |
|
|
22.2 |
|
|
|
31.1 |
|
|
|
59.0 |
|
|
|
88.1 |
|
Performance Chemicals |
|
|
12.4 |
|
|
|
9.3 |
|
|
|
40.2 |
|
|
|
33.8 |
|
Oilfield Services |
|
|
(4.5 |
) |
|
|
10.0 |
|
|
|
(9.7 |
) |
|
|
27.9 |
|
Octane Additives |
|
|
- |
|
|
|
0.8 |
|
|
|
(2.8 |
) |
|
|
(1.9 |
) |
Corporate costs |
|
|
(13.3 |
) |
|
|
(13.0 |
) |
|
|
(41.5 |
) |
|
|
(41.8 |
) |
|
|
|
16.8 |
|
|
|
38.2 |
|
|
|
45.2 |
|
|
|
106.1 |
|
Restructuring charge |
|
|
- |
|
|
|
- |
|
|
|
(21.1 |
) |
|
|
- |
|
Impairment of intangible assets |
|
|
- |
|
|
|
- |
|
|
|
(19.8 |
) |
|
|
- |
|
Total
operating income |
|
$ |
16.8 |
|
|
$ |
38.2 |
|
|
$ |
4.3 |
|
|
$ |
106.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Schedule 2B |
|
NON-GAAP
MEASURES |
|
|
Three Months Ended September 30 |
|
|
Nine Months Ended September 30 |
(in
millions) |
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
12.7 |
|
|
$ |
30.1 |
|
|
$ |
6.1 |
|
|
$ |
81.1 |
|
Interest expense, net |
|
|
0.4 |
|
|
|
1.4 |
|
|
|
1.5 |
|
|
|
4.1 |
|
Income taxes |
|
|
7.5 |
|
|
|
7.7 |
|
|
|
4.5 |
|
|
|
26.0 |
|
Depreciation and
amortization: |
|
|
|
|
|
|
|
|
|
|
|
|
Fuel Specialties |
|
|
1.0 |
|
|
|
0.9 |
|
|
|
3.0 |
|
|
|
2.8 |
|
Performance Chemicals |
|
|
5.3 |
|
|
|
5.0 |
|
|
|
15.4 |
|
|
|
14.6 |
|
Oilfield Services |
|
|
3.2 |
|
|
|
4.3 |
|
|
|
11.8 |
|
|
|
13.1 |
|
Octane Additives |
|
|
- |
|
|
|
0.3 |
|
|
|
0.6 |
|
|
|
0.9 |
|
Corporate costs |
|
|
1.4 |
|
|
|
1.4 |
|
|
|
4.0 |
|
|
|
4.0 |
|
Impairment of intangible
assets |
|
|
- |
|
|
|
- |
|
|
|
19.8 |
|
|
|
- |
|
Impairment of tangible
assets |
|
|
- |
|
|
|
- |
|
|
|
2.0 |
|
|
|
- |
|
EBITDA |
|
|
31.5 |
|
|
|
51.1 |
|
|
|
68.7 |
|
|
|
146.6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA: |
|
|
|
|
|
|
|
|
|
|
|
|
Fuel Specialties |
|
|
23.2 |
|
|
|
32.0 |
|
|
|
62.0 |
|
|
|
90.9 |
|
Performance Chemicals |
|
|
17.7 |
|
|
|
14.3 |
|
|
|
55.6 |
|
|
|
48.4 |
|
Oilfield Services |
|
|
(1.3 |
) |
|
|
14.3 |
|
|
|
2.1 |
|
|
|
41.0 |
|
Octane Additives |
|
|
- |
|
|
|
1.1 |
|
|
|
(2.2 |
) |
|
|
(1.0 |
) |
Corporate costs |
|
|
(11.9 |
) |
|
|
(11.6 |
) |
|
|
(37.5 |
) |
|
|
(37.8 |
) |
|
|
|
27.7 |
|
|
|
50.1 |
|
|
|
80.0 |
|
|
|
141.5 |
|
Restructuring excluding
impairment of tangible assets |
|
|
- |
|
|
|
- |
|
|
|
(19.1 |
) |
|
|
- |
|
Other income, net |
|
|
3.8 |
|
|
|
1.0 |
|
|
|
7.8 |
|
|
|
5.1 |
|
EBITDA |
|
$ |
31.5 |
|
|
$ |
51.1 |
|
|
$ |
68.7 |
|
|
$ |
146.6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA by segment includes operating income relating to the
segments, excluding depreciation and amortization.
|
|
Schedule 3 |
INNOSPEC INC. AND SUBSIDIARIESCONDENSED
CONSOLIDATED BALANCE SHEETS |
|
(in millions) |
|
September 30,2020 |
|
|
December 31,2019 |
Assets |
|
|
|
|
|
|
|
|
|
|
|
Current
assets: |
|
|
|
|
|
Cash and cash equivalents |
$ |
66.6 |
|
$ |
75.7 |
Trade and other accounts receivable |
|
206.2 |
|
|
292.0 |
Inventories |
|
239.8 |
|
|
244.6 |
Prepaid expenses |
|
7.9 |
|
|
14.7 |
Prepaid income taxes |
|
8.1 |
|
|
2.5 |
Other current assets |
|
0.2 |
|
|
0.8 |
Total
current assets |
|
528.8 |
|
|
630.3 |
|
|
|
|
|
|
Net
property, plant and equipment |
|
204.2 |
|
|
198.7 |
Goodwill |
|
367.2 |
|
|
363.0 |
Operating lease right-of-use assets |
|
29.7 |
|
|
32.4 |
Other
intangible assets |
|
78.6 |
|
|
113.5 |
Deferred
tax assets |
|
9.4 |
|
|
9.1 |
Pension
asset |
|
120.0 |
|
|
115.9 |
Other
non-current assets |
|
5.8 |
|
|
5.9 |
Total
assets |
$ |
1,343.7 |
|
$ |
1,468.8 |
|
|
|
|
|
|
Liabilities and Stockholders’ Equity |
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
Accounts payable |
$ |
81.8 |
|
$ |
122.0 |
Accrued liabilities |
|
125.7 |
|
|
154.0 |
Current portion of finance leases |
|
0.4 |
|
|
1.0 |
Current portion of plant closure
provisions |
|
5.2 |
|
|
5.6 |
Current portion of accrued income
taxes |
|
5.4 |
|
|
10.3 |
Current portion of operating lease
liabilities |
|
11.3 |
|
|
10.6 |
Total
current liabilities |
|
229.8 |
|
|
303.5 |
|
|
|
|
|
|
Long-term debt |
|
- |
|
|
58.6 |
Finance
leases, net of current portion |
|
0.2 |
|
|
0.5 |
Plant
closure provisions, net of current portion |
|
52.7 |
|
|
43.7 |
Accrued
income taxes, net of current portion |
|
32.4 |
|
|
36.2 |
Unrecognized tax benefits |
|
15.5 |
|
|
16.4 |
Operating lease liabilities, net of current portion |
|
18.5 |
|
|
21.9 |
Deferred
tax liabilities |
|
47.2 |
|
|
49.6 |
Pension
liabilities and post-employment benefits |
|
18.7 |
|
|
17.8 |
Other
non-current liabilities |
|
2.7 |
|
|
1.7 |
Equity |
|
926.0 |
|
|
918.9 |
Total
liabilities and equity |
$ |
1,343.7 |
|
$ |
1,468.8 |
|
|
|
|
|
|
Schedule 4 |
INNOSPEC INC. AND SUBSIDIARIESCONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS |
|
|
Nine Months EndedSeptember
30 |
(in millions) |
|
2020 |
|
|
2019 |
|
|
|
|
|
|
Cash
Flows from Operating Activities |
|
|
|
|
|
|
|
|
|
|
|
Net income |
$ |
6.1 |
|
|
$ |
81.1 |
|
Adjustments to reconcile net income to cash provided by operating
activities: |
|
|
|
|
|
Depreciation and amortization |
|
35.3 |
|
|
|
36.3 |
|
Impairment of intangible assets |
|
19.8 |
|
|
|
- |
|
Impairment of tangible assets |
|
2.0 |
|
|
|
- |
|
Deferred taxes |
|
(3.3 |
) |
|
|
(0.1 |
) |
Cash contributions to defined benefit pension plans |
|
- |
|
|
|
(0.4 |
) |
Non-cash movements on defined benefit pension plans |
|
(3.3 |
) |
|
|
(4.7 |
) |
Stock option compensation |
|
4.4 |
|
|
|
4.9 |
|
Changes in working capital |
|
30.9 |
|
|
|
(14.9 |
) |
Movements in accrued income taxes |
|
(12.9 |
) |
|
|
(0.4 |
) |
Movements in plant closure provisions |
|
8.2 |
|
|
|
0.1 |
|
Movements in unrecognized tax benefits |
|
(0.9 |
) |
|
|
1.0 |
|
Movements in other assets and liabilities |
|
1.4 |
|
|
|
0.3 |
|
Net cash
provided by operating activities |
|
87.7 |
|
|
|
103.2 |
|
|
|
|
|
|
|
Cash
Flows from Investing Activities |
|
|
|
|
|
|
|
|
|
|
|
Capital
expenditures |
|
(21.7 |
) |
|
|
(22.6 |
) |
Internally developed software |
|
- |
|
|
|
(1.1 |
) |
Net cash
used in investing activities |
|
(21.7 |
) |
|
|
(23.7 |
) |
|
|
|
|
|
|
Cash
Flows from Financing Activities |
|
|
|
|
|
|
|
|
|
|
|
Non-controlling interest |
|
0.1 |
|
|
|
- |
|
Net
(repayment)/receipt of revolving credit facility |
|
(60.0 |
) |
|
|
6.5 |
|
Repayment of term loan |
|
- |
|
|
|
(82.5 |
) |
Repayment of finance leases |
|
(0.9 |
) |
|
|
(1.3 |
) |
Refinancing costs |
|
(0.3 |
) |
|
|
(1.3 |
) |
Dividend
paid |
|
(12.8 |
) |
|
|
(12.2 |
) |
Issue of
treasury stock |
|
1.2 |
|
|
|
1.2 |
|
Repurchase of common stock |
|
(2.1 |
) |
|
|
(2.2 |
) |
Net cash
used in financing activities |
|
(74.8 |
) |
|
|
(91.8 |
) |
Effect of foreign currency
exchange rate changes on cash |
|
(0.3 |
) |
|
|
(0.5 |
) |
Net
change in cash and cash equivalents |
|
(9.1 |
) |
|
|
(12.8 |
) |
Cash and
cash equivalents at beginning of period |
|
75.7 |
|
|
|
123.1 |
|
Cash and
cash equivalents at end of period |
$ |
66.6 |
|
|
$ |
110.3 |
|
|
|
|
|
|
|
|
|
Amortization of deferred finance costs of $0.3
million (2019 - $0.9 million) are included in depreciation and
amortization in the condensed consolidated statements of cash flows
and in interest expense, net in the condensed consolidated
statements of income.
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