Operating income advances 23% over prior
year; EBITDA up 29%
Innospec Inc. (NASDAQ:IOSP) today announced its financial results
for the third quarter ended September 30, 2015. At the same
time, the Company announced a new share repurchase program which
targets to repurchase up to $90 million of stock over the next
three years. It also announced that it has declared a semi-annual
dividend of $0.31 per common share for the second half of 2015,
which will be paid on November 25, 2015 to shareholders of record
as of November 16, 2015. This brings the annual dividend to
61 cents per share, an 11 percent increase over 2014.
Total net sales for the third quarter were
$254.2 million, up 11 percent from the $228.2 million reported in
the corresponding quarter last year. Net income was $35.6
million, or $1.45 per diluted share, compared to $20.8 million, or
$0.83 per diluted share, recorded a year ago. EBITDA
(earnings before interest, taxes, depreciation, amortization and
fair value adjustments) for the quarter was $42.1 million, a 29
percent increase from $32.6 million in 2014’s third quarter.
Results for this quarter include several special
items, which are summarized in the table below. Excluding
these items, adjusted non-GAAP EPS was $1.18 per diluted share,
compared to $0.86 per diluted share a year ago. Innospec closed the
quarter with a net debt position of $4.9 million, down from $71.1
million at the end of the second quarter. This includes the $41.5
million cash proceeds from the disposal of the Aroma Chemicals
business. Cash generation in the quarter was strong, with
operating cash inflows of $35.5 million before capital expenditures
during the quarter of $6.6 million.
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 September 30, 2015 |
|
Quarter ended September 30, 2014 |
(in millions,
except share and per share data) |
|
Income beforeincome
taxes |
|
NetIncome |
|
Diluted EPS |
|
Income beforeincome
taxes |
|
Netincome |
|
Diluted EPS |
|
|
|
|
|
|
|
|
|
|
|
|
|
Reported GAAP
amounts |
$ |
|
41.4 |
|
$ |
|
35.6 |
|
$ |
|
1.45 |
|
$ |
|
25.4 |
|
$ |
|
20.8 |
|
$ |
|
0.83 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustment to fair
value of contingent consideration |
|
|
(8.5 |
) |
|
|
(4.8 |
) |
|
|
(0.20 |
) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
Amortization of
acquired intangible assets |
|
|
4.3 |
|
|
|
3.4 |
|
|
|
0.14 |
|
|
|
3.0 |
|
|
|
2.3 |
|
|
|
0.09 |
|
Adjustment of income
tax provisions |
|
|
(2.7 |
) |
|
|
(2.7 |
) |
|
|
(0.11 |
) |
|
|
(1.8 |
) |
|
|
(1.8 |
) |
|
|
(0.07 |
) |
Profit on disposal of
subsidiary |
|
|
(1.6 |
) |
|
|
(1.6 |
) |
|
|
(0.06 |
) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
Foreign currency
exchange gains |
|
|
(1.2 |
) |
|
|
(0.9 |
) |
|
|
(0.04 |
) |
|
|
(1.0 |
) |
|
|
(0.8 |
) |
|
|
(0.03 |
) |
Acquisition-related
costs |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
1.3 |
|
|
|
1.0 |
|
|
|
0.04 |
|
|
|
|
(9.7 |
) |
|
|
(6.6 |
) |
|
|
(0.27 |
) |
|
|
1.5 |
|
|
|
0.7 |
|
|
|
0.03 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
non-GAAP amounts |
$ |
|
31.7 |
|
$ |
|
29.0 |
|
$ |
|
1.18 |
|
$ |
|
26.9 |
|
$ |
|
21.5 |
|
$ |
|
0.86 |
|
|
For the first nine months of 2015, total net
sales of $766.3 million increased 14 percent from $670.2 million in
the corresponding period last year. Net income for the
nine-month period was $88.0 million, or $3.57 per diluted share,
compared with $56.2 million, or $2.26 per diluted share, a year
ago. Excluding special items, diluted earnings per share for
the first nine months of 2015 were $3.11 up 30 percent from $2.39 a
year ago. EBITDA for the first nine months of 2015 was $113.5
million, 24 percent higher than $91.3 million a year ago
Commenting on third quarter results, Patrick S.
Williams, President and Chief Executive Officer of Innospec, said,
“Despite the continuing tough market environment, we are pleased to
report another strong quarter for Innospec, with continued gains in
sales, margins, operating income and EBITDA. Our results are
broadly in line with our expectations and we have closed on a
number of important new business opportunities.
"Our strategy has continued to deliver,
especially when you consider the challenging market conditions in
most areas of the world.
"In Fuel Specialties, our results have held up
well. Our core fuels business continued to benefit from sales
mix and lower raw material prices. The business in EMEA was
impacted by adverse currency movements, but our underlying business
remains in good shape. Asia-Pacific suffered slightly from
poor market conditions, but our gross margins here have
strengthened, due to a richer sales mix. As we expected, the
AvTel product line had a stronger quarter, but we see no
fundamental shift in demand.
"Needless to say, the oilfield market remains
extremely challenging, with low crude oil prices prevailing
throughout the quarter. Despite this, we posted a strong
third quarter in Oilfield Specialties, with sequential sales
holding steady, including some market share gains. Gross
margins showed good growth, driven by a strong performance in our
frac/stim business and by a richer sales mix in our production
business. Compared to many of our competitors, we believe
that this is a very creditable performance. Nevertheless, we
continue to be diligent regarding both customer service and cost
containment measures so that we remain aligned with our customers
prospects. We believe that we will reach our goals in
Oilfield Specialties for the full year and are well positioned in
the market. However, the low price of crude and gas continues
to have a huge impact on our customers’ investment plans and we
remain very cautious regarding prospects through the next quarter
and into 2016.
"In Performance Chemicals we completed the
disposal of our Aroma Chemicals business on July 6. Adjusting
prior year comparatives for this disposal, third quarter sales were
about the same as last year, with our improved Personal Care
performance offsetting the softer, less profitable Polymers
market. We delivered a stronger margin and operating
performance, due to higher-margin sales while our new product
launches have created a stronger foundation for future sales
growth. The performance in EMEA was significantly impacted by
the adverse currency movements, without which we would have shown
healthy growth. In the Americas, we had good growth, with
continued new business wins.
“As we previously indicated, Octane Additives
completed the delivery of the latest order during the quarter and
we continue to focus on responsibly managing the last customer in
this market.
“We remain cautiously optimistic in our
expectations for the remainder of the year. We believe we are
well positioned, both financially and operationally, for an
eventual market turn, but we remain very conscious of the impact
that oil and gas prices are having on our customers.”
Net sales in Fuel Specialties for the quarter of
$190.3 million, a 22 percent increase from $156.1 million in last
year’s third quarter, were driven again by a strong contribution
from the Independence acquisition. Excluding the acquisition,
volumes were up slightly by 1 percent, offset by a weaker sales mix
of 6 percent and the adverse currency impact of 5 percent in the
quarter. Excluding Oilfield Specialties, fuel revenues in the
Americas were up 10 percent year over year driven by volume growth,
but declined 13 percent in EMEA and 17 percent in Asia-Pacific due
to an adverse sales mix and foreign exchange. Gross margins
in the segment rose 2.2 percentage points from last year to 36.3
percent, benefitting from a richer sales mix of higher margin
business. Operating income for the quarter was $27.0 million,
up 10 percent from last year’s $24.5 million.
In Performance Chemicals, adjusting prior year
comparatives for the disposal of Aroma Chemicals, net sales of
$43.6 million were on par year over year, as volume growth of 13
percent offset 6 percent lower pricing and an adverse currency
impact of 7 percent. By region, sales were similar to last
year in the Americas but fell 4 percent in EMEA due mainly to
foreign exchange. Asia-Pacific sales were up 21 percent from
last year driven by improved volumes. The segment’s gross
margin was 28.4 percent benefitting from a richer sales mix with
increased sales of higher margin Personal Care business.
Operating income of $5.4 million for the quarter was down
from the $6.6 million reported in 2014’s third quarter.
Adjusting last year for the Aroma Chemicals disposal, operating
income was broadly on par year over year.
In Octane Additives, net sales for the quarter
were $20.3 million, as expected.
Corporate costs were $9.3 million, down by $0.7
million from a year ago, and remain broadly within the expected
range. Pension impact in the quarter was negligible, compared
to a charge of $0.8 million a year ago. The effective tax rate for
the quarter was 14 percent, and the full year adjusted effective
tax rate is anticipated to be 21 percent. This is lower than
previously expected due to the change in geographic mix of taxable
earnings, and revisions to our tax estimates.
Net cash generated from operations was strong in
the quarter at $35.5 million, compared to $25.2 million reported a
year ago. In the quarter, Innospec received $41.5 million
from the disposal of the Aroma Chemicals business. As of
September 30, 2015, Innospec has $132.8 million in cash, cash
equivalents and short-term investments, and a total debt of $137.7
million, resulting in net debt of $4.9 million. In the third
quarter, the company retired 84,633 shares at a cost of $4.0
million as part of the board-authorized share repurchase
program.
The Innospec Board has also approved a new $90
million share repurchase program.
Mr. Williams concluded, "In conclusion, we have
delivered on our expectations in the third quarter and we believe
we are very much on target in terms of meeting our goals for the
full year.
"Once again, we had a strong quarter in terms of
cash generation, which, coupled with the proceeds from the Aroma
Chemicals disposal, has enabled us to significantly reduce our net
debt position, while still maintaining a very strong balance sheet.
This enables us to continue to seek further strategic
acquisitions.
“We continue to focus on enhancing our return to
shareholders, and we have demonstrated this in terms of the 11
percent increase in our semi-annual dividend and the Board approval
for the substantially enhanced share repurchase program.”
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
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
adjustment to fair value of contingent consideration. Income
before income taxes, net income and diluted EPS, excluding special
items, per our consolidated financial statements are adjusted for
the exclusion of adjustment to fair value of contingent
consideration, amortization of acquired intangible assets,
adjustment of income tax provisions, profit on disposal of
subsidiary, foreign currency exchange gains and acquisition-related
costs. 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 1300 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. The Fuel Specialties business
specializes in manufacturing and supplying the fuel additives that
help improve fuel efficiency, boost engine performance and reduce
harmful emissions. This business also contains Oilfield
Specialties which provides specialty chemicals for oil & gas
drilling and production operations. Innospec's Performance
Chemicals business provides effective technology-based solutions
for our customers’ processes or products focused in the Personal
Care and Polymers 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,” “estimates,” “anticipates,” “may,” “believes,”
“feels” 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, 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, 2014,
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.
|
Schedule 1 |
|
INNOSPEC INC.
AND SUBSIDIARIES |
CONSOLIDATED
STATEMENTS OF INCOME |
|
|
|
|
|
|
|
|
|
|
|
|
Three Months EndedSeptember
30 |
|
Nine Months Ended September
30 |
(in millions,
except share and per share data) |
|
|
2015 |
|
|
|
2014 |
|
|
|
2015 |
|
|
2014 |
|
Net sales |
$ |
|
254.2 |
|
$ |
|
228.2 |
|
$ |
|
766.3 |
|
$ |
670.2 |
|
Cost of goods sold |
|
|
(163.8 |
) |
|
|
(154.6 |
) |
|
|
(506.6 |
) |
|
(462.3 |
) |
Gross profit |
|
|
90.4 |
|
|
|
73.6 |
|
|
|
259.7 |
|
|
207.9 |
|
|
|
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
Selling, general and
administrative |
|
|
(52.7 |
) |
|
|
(42.4 |
) |
|
|
(151.6 |
) |
|
(122.1 |
) |
Research and development |
|
|
(6.6 |
) |
|
|
(6.0 |
) |
|
|
(19.3 |
) |
|
(17.3 |
) |
Adjustment to fair value of
contingent consideration |
|
|
8.5 |
|
|
|
- |
|
|
|
31.6 |
|
|
- |
|
Profit on disposal of
subsidiary |
|
|
1.6 |
|
|
|
- |
|
|
|
1.6 |
|
|
- |
|
Total operating
expenses |
|
|
(49.2 |
) |
|
|
(48.4 |
) |
|
|
(137.7 |
) |
|
(139.4 |
) |
Operating income |
|
|
41.2 |
|
|
|
25.2 |
|
|
|
122.0 |
|
|
68.5 |
|
Other net
income/(expense) |
|
|
1.2 |
|
|
|
1.0 |
|
|
|
(2.0 |
) |
|
2.2 |
|
Interest expense, net |
|
|
(1.0 |
) |
|
|
(0.8 |
) |
|
|
(2.9 |
) |
|
(2.5 |
) |
Income before income
taxes |
|
|
41.4 |
|
|
|
25.4 |
|
|
|
117.1 |
|
|
68.2 |
|
Income taxes |
|
|
(5.8 |
) |
|
|
(4.6 |
) |
|
|
(29.1 |
) |
|
(12.0 |
) |
Net income |
$ |
|
35.6 |
|
$ |
|
20.8 |
|
$ |
|
88.0 |
|
$ |
56.2 |
|
|
|
|
|
|
|
|
|
|
Earnings per share: |
|
|
|
|
|
|
|
|
Basic |
$ |
|
1.48 |
|
$ |
|
0.85 |
|
$ |
|
3.64 |
|
$ |
2.30 |
|
Diluted |
$ |
|
1.45 |
|
$ |
|
0.83 |
|
$ |
|
3.57 |
|
$ |
2.26 |
|
|
|
|
|
|
|
|
|
|
Weighted average shares
outstanding (in thousands): |
|
|
|
|
|
|
|
|
Basic |
|
|
24,121 |
|
|
|
24,420 |
|
|
|
24,162 |
|
|
24,394 |
|
Diluted |
|
|
24,611 |
|
|
|
24,915 |
|
|
|
24,660 |
|
|
24,849 |
|
|
|
|
|
|
|
|
|
|
|
INNOSPEC INC.
AND SUBSIDIARIES |
Schedule 2A |
|
SEGMENTAL ANALYSIS
OF RESULTS |
|
Three Months EndedSeptember
30 |
|
Nine Months Ended September 30 |
(in
millions) |
|
|
2015 |
|
|
|
2014 |
|
|
|
2015 |
|
|
|
2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales: |
|
|
|
|
|
|
|
|
Fuel Specialties |
$ |
|
190.3 |
|
$ |
|
156.1 |
|
$ |
|
572.0 |
|
$ |
|
465.4 |
|
Performance Chemicals |
|
|
43.6 |
|
|
|
57.0 |
|
|
|
155.3 |
|
|
|
172.5 |
|
Octane Additives |
|
|
20.3 |
|
|
|
15.1 |
|
|
|
39.0 |
|
|
|
32.3 |
|
|
|
|
254.2 |
|
|
|
228.2 |
|
|
|
766.3 |
|
|
|
670.2 |
|
|
|
|
|
|
|
|
|
|
Gross profit: |
|
|
|
|
|
|
|
|
Fuel Specialties |
|
|
69.0 |
|
|
|
53.2 |
|
|
|
199.4 |
|
|
|
149.1 |
|
Performance Chemicals |
|
|
12.4 |
|
|
|
13.7 |
|
|
|
41.7 |
|
|
|
42.6 |
|
Octane Additives |
|
|
9.0 |
|
|
|
6.7 |
|
|
|
18.6 |
|
|
|
16.2 |
|
|
|
|
90.4 |
|
|
|
73.6 |
|
|
|
259.7 |
|
|
|
207.9 |
|
|
|
|
|
|
|
|
|
|
Operating income: |
|
|
|
|
|
|
|
|
Fuel Specialties |
|
|
27.0 |
|
|
|
24.5 |
|
|
|
78.3 |
|
|
|
67.8 |
|
Performance Chemicals |
|
|
5.4 |
|
|
|
6.6 |
|
|
|
19.3 |
|
|
|
20.9 |
|
Octane Additives |
|
|
8.0 |
|
|
|
4.9 |
|
|
|
15.9 |
|
|
|
12.0 |
|
Pension
(charge)/credit |
|
|
- |
|
|
|
(0.8 |
) |
|
|
0.1 |
|
|
|
(2.5 |
) |
Corporate costs |
|
|
(9.3 |
) |
|
|
(10.0 |
) |
|
|
(24.8 |
) |
|
|
(29.7 |
) |
|
|
|
31.1 |
|
|
|
25.2 |
|
|
|
88.8 |
|
|
|
68.5 |
|
Adjustment to fair value
of contingent consideration |
|
|
8.5 |
|
|
|
- |
|
|
|
31.6 |
|
|
|
- |
|
Profit on disposal of subsidiary |
|
|
1.6 |
|
|
|
- |
|
|
|
1.6 |
|
|
|
- |
|
Total operating
income |
$ |
|
41.2 |
|
$ |
|
25.2 |
|
$ |
|
122.0 |
|
$ |
|
68.5 |
|
|
Schedule 2B |
|
NON-GAAP
MEASURES |
|
Three Months Ended September
30 |
|
Nine Months EndedSeptember
30 |
(in
millions) |
|
|
2015 |
|
|
|
2014 |
|
|
|
2015 |
|
|
|
2014 |
|
|
|
|
|
|
|
|
|
|
Net income |
$ |
|
35.6 |
|
$ |
|
20.8 |
|
$ |
|
88.0 |
|
$ |
|
56.2 |
|
Interest expense, net |
|
|
1.0 |
|
|
|
0.8 |
|
|
|
2.9 |
|
|
|
2.5 |
|
Income taxes |
|
|
5.8 |
|
|
|
4.6 |
|
|
|
29.1 |
|
|
|
12.0 |
|
Depreciation and
amortization |
|
|
8.2 |
|
|
|
6.4 |
|
|
|
25.1 |
|
|
|
20.6 |
|
Adjustment to fair value
of contingent consideration |
|
|
(8.5 |
) |
|
|
- |
|
|
|
(31.6 |
) |
|
|
- |
|
EBITDA |
|
|
42.1 |
|
|
|
32.6 |
|
|
|
113.5 |
|
|
|
91.3 |
|
|
|
|
|
|
|
|
|
|
Fuel Specialties |
|
|
32.3 |
|
|
|
27.4 |
|
|
|
93.9 |
|
|
|
77.2 |
|
Performance Chemicals |
|
|
7.0 |
|
|
|
8.6 |
|
|
|
24.6 |
|
|
|
27.4 |
|
Octane Additives |
|
|
8.1 |
|
|
|
5.0 |
|
|
|
16.2 |
|
|
|
12.3 |
|
Pension
(charge)/credit |
|
|
- |
|
|
|
(0.8 |
) |
|
|
0.1 |
|
|
|
(2.5 |
) |
Corporate costs |
|
|
(8.1 |
) |
|
|
(8.6 |
) |
|
|
(20.9 |
) |
|
|
(25.3 |
) |
|
|
|
39.3 |
|
|
|
31.6 |
|
|
|
113.9 |
|
|
|
89.1 |
|
Profit on disposal of
subsidiary |
|
|
1.6 |
|
|
|
- |
|
|
|
1.6 |
|
|
|
- |
|
Other net
income/(expense) |
|
|
1.2 |
|
|
|
1.0 |
|
|
|
(2.0 |
) |
|
|
2.2 |
|
EBITDA |
$ |
|
42.1 |
|
$ |
|
32.6 |
|
$ |
|
113.5 |
|
$ |
|
91.3 |
|
|
|
Schedule 3 |
|
INNOSPEC INC. AND
SUBSIDIARIES |
CONSOLIDATED
BALANCE SHEETS |
|
(in
millions) |
|
September 30,2015 |
|
December 31,2014 |
|
|
Assets |
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
Cash and cash equivalents |
$ |
127.7 |
$ |
41.6 |
Short-term investments |
|
5.1 |
|
4.7 |
Trade and other accounts
receivable |
|
130.2 |
|
164.3 |
Inventories |
|
166.8 |
|
184.9 |
Current portion of deferred tax
assets |
|
8.1 |
|
8.4 |
Prepaid expenses |
|
3.9 |
|
8.3 |
Prepaid income taxes |
|
1.6 |
|
2.0 |
Total current assets |
|
443.4 |
|
414.2 |
|
|
|
|
|
Net property, plant and
equipment |
|
74.1 |
|
80.8 |
Goodwill |
|
268.3 |
|
276.1 |
Other intangible
assets |
|
172.6 |
|
181.1 |
Deferred finance
costs |
|
0.5 |
|
1.1 |
Deferred tax assets, net
of current portion |
|
0.7 |
|
0.7 |
Pension asset |
|
56.3 |
|
45.2 |
Other non-current
assets |
|
0.9 |
|
0.7 |
Total assets |
$ |
1,016.8 |
$ |
999.9 |
|
|
|
|
|
Liabilities and
Stockholders’ Equity |
|
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
Bank overdraft |
$ |
7.6 |
$ |
- |
Accounts payable |
|
67.2 |
|
87.6 |
Accrued liabilities |
|
69.1 |
|
77.2 |
Current portion of long-term
debt |
|
- |
|
0.4 |
Current portion of finance
leases |
|
0.7 |
|
0.5 |
Current portion of plant closure
provisions |
|
3.8 |
|
5.7 |
Current portion of accrued income
taxes |
|
4.5 |
|
5.6 |
Current portion of
acquisition-related contingent consideration |
|
43.6 |
|
45.7 |
Current portion of deferred
income |
|
0.2 |
|
0.2 |
Total current
liabilities |
|
196.7 |
|
222.9 |
|
|
|
|
|
Long-term debt, net of
current portion |
|
127.0 |
|
139.0 |
Finance leases, net of
current portion |
|
2.4 |
|
1.7 |
Plant closure provisions,
net of current portion |
|
31.2 |
|
28.4 |
Unrecognized tax benefits,
net of current portion |
|
3.6 |
|
6.2 |
Deferred tax liabilities,
net of current portion |
|
37.0 |
|
23.0 |
Pension liability |
|
9.9 |
|
10.4 |
Acquisition-related
contingent consideration, net of current portion |
|
20.0 |
|
49.5 |
Deferred income, net of
current portion |
|
0.7 |
|
0.9 |
Other non-current
liabilities |
|
0.1 |
|
2.0 |
Equity |
|
588.2 |
|
515.9 |
Total liabilities and
equity |
$ |
1,016.8 |
$ |
999.9 |
|
|
|
|
|
|
Schedule 4 |
|
INNOSPEC INC. AND
SUBSIDIARIES |
CONSOLIDATED
STATEMENTS OF CASH FLOWS |
|
|
|
Nine Months
Ended September 30 |
(in
millions) |
|
|
2015 |
|
|
|
2014 |
|
|
Cash Flows from Operating
Activities |
|
|
|
|
|
|
|
|
|
Net income |
$ |
|
88.0 |
|
$ |
|
56.2 |
|
Adjustments to reconcile
net income to cash provided by operating activities: |
|
|
|
|
Depreciation and amortization |
|
|
25.7 |
|
|
|
21.1 |
|
Adjustment to fair value of
contingent consideration |
|
|
(31.6 |
) |
|
|
- |
|
Deferred taxes |
|
|
13.9 |
|
|
|
1.9 |
|
Repayment of promissory note in
civil complaint settlement |
|
|
- |
|
|
|
(5.0 |
) |
Changes in working capital |
|
|
4.4 |
|
|
|
(15.4 |
) |
Excess tax benefit from stock-based
payment arrangements |
|
|
(0.7 |
) |
|
|
(0.7 |
) |
Accrued income taxes |
|
|
0.8 |
|
|
|
10.7 |
|
Movement on plant closure
provisions |
|
|
1.4 |
|
|
|
(0.7 |
) |
Profit on disposal of
subsidiary |
|
|
(1.6 |
) |
|
|
- |
|
Cash contributions to defined
benefit pension plans |
|
|
(7.9 |
) |
|
|
(8.8 |
) |
Non-cash expense of defined benefit
pension plans |
|
|
0.4 |
|
|
|
3.0 |
|
Stock option compensation |
|
|
2.7 |
|
|
|
1.7 |
|
Movements on unrecognized tax
benefits |
|
|
(2.6 |
) |
|
|
(7.2 |
) |
Movements on other non-current
assets and liabilities |
|
|
(2.3 |
) |
|
|
2.2 |
|
Net cash provided by
operating activities |
|
|
90.6 |
|
|
|
59.0 |
|
|
|
|
|
|
Cash Flows from Investing
Activities |
|
|
|
|
|
|
|
|
|
Capital expenditures |
|
|
(12.0 |
) |
|
|
(9.3 |
) |
Proceeds from disposal of
subsidiary |
|
|
41.5 |
|
|
|
- |
|
Business combinations, net
of cash acquired |
|
|
- |
|
|
|
0.3 |
|
Internally developed
software |
|
|
(7.0 |
) |
|
|
(6.1 |
) |
Purchase of short-term
investments |
|
|
(5.3 |
) |
|
|
(4.2 |
) |
Sale of short-term
investments |
|
|
4.8 |
|
|
|
5.8 |
|
Net cash provided by/(used
in) investing activities |
|
|
22.0 |
|
|
|
(13.5 |
) |
|
|
|
|
|
|
|
|
|
Cash Flows from Financing
Activities |
|
|
|
|
|
|
|
|
|
Non-controlling
interest |
|
|
0.4 |
|
|
|
- |
|
Net repayment of revolving
credit facility |
|
|
(12.0 |
) |
|
|
(27.0 |
) |
Repayment of term
loans |
|
|
(0.4 |
) |
|
|
(0.9 |
) |
Receipt of short-term
borrowing |
|
|
7.6 |
|
|
|
- |
|
Refinancing costs |
|
|
- |
|
|
|
(0.1 |
) |
Excess tax benefit from
stock-based payment arrangements |
|
|
0.7 |
|
|
|
0.7 |
|
Dividend paid |
|
|
(7.3 |
) |
|
|
(6.6 |
) |
Issue of treasury
stock |
|
|
1.0 |
|
|
|
0.4 |
|
Repurchase of common
stock |
|
|
(15.4 |
) |
|
|
(0.9 |
) |
Net cash used in financing
activities |
|
|
(25.4 |
) |
|
|
(34.4 |
) |
Effect of foreign
currency exchange rate changes on cash |
|
|
(1.1 |
) |
|
|
(0.9 |
) |
Net change in cash and
cash equivalents |
|
|
86.1 |
|
|
|
10.2 |
|
Cash and cash equivalents
at beginning of period |
|
|
41.6 |
|
|
|
80.2 |
|
Cash and cash equivalents
at end of period |
$ |
|
127.7 |
|
$ |
|
90.4 |
|
|
|
|
|
|
|
|
|
|
Amortization of deferred finance costs of $0.6
million (2014 - $0.5 million) are included in depreciation and
amortization in the cash flow statement but in interest expense in
the income statement.
Contacts:
Brian Watt
Innospec Inc.
+44-151-356-6241
Brian.Watt@innospecinc.com
Robert D. Ferris
RF|Binder Partners
+1-201-294-9390
Robert.Ferris@RFBinder.com
Chloe Miller
RF|Binder Partners
+1-212-994-7636
Chloe.Miller@RFBinder.com
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