Ingevity to reduce costs, staffing in response to coronavirus
June 02 2020 - 4:15PM
Business Wire
Ingevity Corporation (NYSE:NGVT) today announced a
cost-reduction initiative to realign its cost structure in response
to reduced demand for some of its products as a result of the
coronavirus.
“The strategic actions we are taking will not only enable us to
better weather the difficult times ahead, but will strengthen and
bolster our performance going forward,” said Rick Kelson, chairman
of the board, and interim president and CEO.
Kelson said the company will:
- Streamline manufacturing processes, including the temporary
furlough of certain production employees;
- Decrease outside spending on consultants and services;
- Reduce certain benefits for salaried employees, including the
suspension of matches to employee 401(k) retirement and deferred
compensation programs; and
- Reduce and restructure headcount through an early retirement
initiative and other employment reductions.
“These programs will lower both our cost of goods sold (COGS)
and selling, general & administrative (SG&A) costs,” said
Kelson. “Some of these measures are temporary, but many are
permanent; and as such will give us a leaner cost basis for the
future.”
The company stated that the cost reductions should enable it to
remain within the revised guidance range it set forth in its first
quarter 2020 earnings release. Ingevity stated on April 29, 2020,
that it expects fiscal year 2020 sales of between $1.10 billion and
$1.20 billion and adjusted EBITDA of between $310 million and $350
million. Kelson stated on the April 30, 2020, conference call that
the company expects more significant impacts from the coronavirus
to begin in the second quarter.
“We’re working from a platform of financial strength, and we’re
working to control what we can control in a tumultuous
environment,” said Kelson. “These steps – in combination with the
focused execution by our businesses – in the long run will make
Ingevity a more efficient, and more profitable company coming out
of the current economic downturn.”
The company will record a pre-tax charge in the company’s second
quarter 2020 financial results as part of the restructuring.
Ingevity: Purify, Protect and Enhance
Ingevity provides specialty chemicals, high-performance carbon
materials and engineered polymers that purify, protect and enhance
the world around us. Through a team of talented and experienced
people, Ingevity develops, manufactures, and brings to market
products and processes that help customers solve complex problems.
These products are used in a variety of demanding applications,
including asphalt paving, oil exploration and production,
agrochemicals, adhesives, lubricants, publication inks, coatings,
elastomers, bioplastics and automotive components that reduce
gasoline vapor emissions. Headquartered in North Charleston, South
Carolina, Ingevity operates from 25 locations around the world and
employs approximately 1,850 people. The company is traded on the
New York Stock Exchange (NYSE: NGVT). For more information visit
www.ingevity.com.
Cautionary Statements About Forward-Looking
Statements
This press release contains “forward-looking statements” within
the meaning of the Securities Exchange Act of 1934, as amended, and
the Private Securities Litigation Reform Act of 1995. Such forward
looking statements generally include the words “may,” “could,”
“should,” “believes,” “plans,” “intends,” “targets,” “will,”
“expects,” “suggests,” “anticipates,” “outlook,” “continues,”
“forecast,” “prospect,” “potential” or similar expressions.
Forward-looking statements may include, without limitation,
expected financial positions, results of operations and cash flows;
financing plans; business strategies and expectations; operating
plans; impact of coronavirus; synergies and the potential benefits
of the acquisition of Perstorp Holding AB’s Capa® caprolactone
business (the “acquisition”); capital and other expenditures;
competitive positions; growth opportunities for existing products;
benefits from new technology and cost-reduction initiatives, plans
and objectives; markets for securities and expected future
repurchases of shares, including statements about the manner,
amount and timing of repurchases. Like other businesses, Ingevity
is subject to risks and uncertainties that could cause its actual
results to differ materially from its expectations or that could
cause other forward-looking statements to prove incorrect. Factors
that could cause actual results to materially differ from those
contained in the forward-looking statements, or that could cause
other forward-looking statements to prove incorrect, include,
without limitation, adverse effects from the COVID-19 pandemic;
risks that the expected benefits from the acquisition may not be
realized or will not be realized in the expected time period, the
risk that the acquired business will not be integrated successfully
and the risk of significant transaction costs and unknown or
understated liabilities; adverse effects of general economic and
financial conditions; risks related to international sales and
operations; impacts of currency exchange rates and currency
devaluation; compliance with U.S. and foreign regulations
concerning our operations outside the U.S.; changes in trade
policy, including the imposition of tariffs; the impact of the
United Kingdom’s withdrawal from the European Union; attracting and
retaining key personnel; adverse conditions in the global
automotive market or adoption of alternative and new technologies;
competition from producers of alternative products and new
technologies, and new or emerging competitors; competition from
infringing intellectual property activity; worldwide air quality
standards; a decrease in government infrastructure spending;
declining volumes and downward pricing in the printing inks market;
the limited supply of or lack of access to sufficient crude tall
oil; a prolonged period of low energy prices; the provision of
services by third parties at several facilities; natural disasters,
such as hurricanes, winter or tropical storms, earthquakes,
tornados, floods, fires; other unanticipated problems such as labor
difficulties, equipment failure or unscheduled maintenance and
repair; protection of intellectual property and proprietary
information; information technology security breaches and other
disruptions; complications with designing and implementing our new
enterprise resource planning system; government policies and
regulations, including, but not limited to, those affecting the
environment, climate change, tax policies, tariffs and the
chemicals industry; and lawsuits arising out of environmental
damage or personal injuries associated with chemical or other
manufacturing processes. These and other important factors that
could cause actual results or events to differ materially from
those expressed in forward-looking statements that may have been
made in this document are and will be more particularly described
in our filings with the U.S. Securities and Exchange Commission,
including our Form 10-K for the year ended December 31, 2019 and
our other periodic filings. Readers are cautioned not to place
undue reliance on Ingevity’s projections and forward-looking
statements, which speak only as the date thereof. Ingevity
undertakes no obligation to publicly release any revision to the
projections and forward-looking statements contained in this press
release, or to update them to reflect events or circumstances
occurring after the date of this press release.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200602005903/en/
Laura Woodcock
843-746-8197 media@ingevity.com
Investors: Jack
Maurer 843-746-8242
investors@ingevity.com
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