CRANBURY, N.J.--(BUSINESS WIRE)--Innophos Holdings, Inc. (NASDAQ: IPHS) today announced financial results for its third-quarter ended September 30, 2019.
Q3 2019 Highlights
- Sales of $189 million up 2% sequentially but down 4% compared with prior-year quarter
- GAAP Net Income of $6 million, or $0.32 per diluted share, down $8 million from Q3 2018
- Adjusted diluted EPS of $0.45, down 24% year-on-year
- EBITDA of $24 million, down $1 million, or 6% year-over-year
- Adjusted EBITDA of $30 million, flat sequentially but down $3 million or 8% year-on-year; adjusted EBITDA margin of 16%, down 70 basis points compared with the prior year
- Cash flows from operations of $8 million, down $18 million year-on-year
- Free Cash outflow of $2 million, down $6 million year-on-year
Recent Developments
As announced on October 21, 2019, Innophos has entered into a definitive agreement to be acquired by an affiliate of One Rock Capital Partners, LLC, a leading middle-market private equity firm, in an all-cash transaction valued at $32.00 per share, or approximately $932 million, including the assumption of debt. Due to the pending transaction, Innophos will not host an earnings conference call, provide financial guidance or publish supplemental financial presentation slides. Innophos is also withdrawing its previously issued financial guidance for fiscal year 2019.
Q3 2019 Results
Variance $ and Variance % in the following tables and comments may not foot due to rounding
$ Millions except EPS
Quarter 3 |
2019 |
2018 |
Variance $ |
Variance % |
Sales |
189 |
197 |
(8) |
(4)% |
Net Income |
6 |
14 |
(8) |
(54)% |
Adj. Net Income |
9 |
12 |
(3) |
(24)% |
EBITDA |
24 |
26 |
(1) |
(6)% |
Adj. EBITDA |
30 |
32 |
(3) |
(8)% |
Diluted EPS |
0.32 |
0.71 |
(0.38) |
(54)% |
Adj. Diluted EPS |
0.45 |
0.58 |
(0.14) |
(24)% |
Cash from Ops |
8 |
26 |
(18) |
(69)% |
Free Cash Flow |
(2) |
4 |
(6) |
(141)% |
- Sales of $189 million were 4% below prior year as 1% selling price increases were offset by a 5% volume decline.
- The Q3 2019 volume decline was affected by several factors, including discontinued low-margin nutrition trading business, a general weakening of demand and continued “indirect” tariff impacts.
- GAAP Net Income of $6 million and diluted EPS of $0.32 were down versus the prior year primarily due to a $6 million one-off tax benefit for a partial reversal of tax reform in the prior year period and lower EBITDA.
- During the quarter, the Geismar facility incurred operating issues related to the transition to the company’s new low-cost supply structure, which had a total impact of $6 million, $4 million of which was adjusted out of Q3 results and the remaining $2 million is expected to be adjusted out of Q4 results. The issue was rectified during the quarter and the Geismar plant has been operating at normal rates since mid-September.
- Adjusted EBITDA margin of 16% was down 70 basis points year over year due to lower cost leverage from lower sales volumes. The Q3 Adjusted EBITDA was affected by the aforementioned operating issues, which resulted in the company not realizing any benefits from the value chain repositioning initiative in Q3 as planned.
- Free Cash outflow of $2 million was down $6 million from the prior year period due primarily to payment of a one-off tax charge related to Dutch tax regulations enacted in Q2.
Q3 2019 Segment Financials
Q3 Sales |
2019 $ Millions |
2018 $ Millions |
Variance $ |
Variance % |
FHN |
105 |
115 |
(10) |
(9)% |
IS |
73 |
66 |
7 |
11% |
Other |
11 |
16 |
(5) |
(32)% |
Total IPHS |
189 |
197 |
(8) |
(4)% |
Q3 Adj. EBITDA |
2019 $ Millions |
2018 $ Millions |
2019 % Margin |
2018 % Margin |
FHN |
18 |
17 |
17% |
15% |
IS |
10 |
12 |
14% |
18% |
Other |
1 |
3 |
10% |
16% |
Total IPHS |
30 |
32 |
16% |
16% |
Note: See Adjusted EBITDA reconciliation to EBITDA in the financial tables that follow
- FHN sales declined 9% year over year (price +3%, volume -11%) as price increases were offset by lower volumes due to the discontinuation of low-margin nutrition trading business and softer demand; adjusted EBITDA margins were up 201 basis points compared with Q3 2018 due to higher selling prices and improved sales mix.
- IS sales were up 11% year over year (price +1%, volume +10%) due to higher acid sales and STPP volumes into Latin America that exceeded lower volume effects from “indirect” unfavorable tariff impacts on international sales; adjusted EBITDA margins were down 422 basis points versus a strong prior year quarter due to unfavorable sales mix.
- Other sales were down 32% (price -8%, volume -24%) due to reduced co-product and low grade acid sales volumes; adjusted EBITDA margins were 10%.
Year-to-Date Quarter 3 Results
Variance $ and Variance % in the following tables and comments may not foot due to rounding
$ Millions except EPS
YTD Q3 |
2019 |
2018 |
Variance $ |
Variance % |
Sales |
566 |
609 |
(43) |
(7)% |
Net Income |
17 |
31 |
(15) |
(47)% |
Adj. Net Income |
29 |
35 |
(6) |
(17)% |
EBITDA |
76 |
78 |
(2) |
(2)% |
Adj. EBITDA |
90 |
95 |
(6) |
(6)% |
Diluted EPS |
0.83 |
1.57 |
(0.74) |
(47)% |
Adj. Diluted EPS |
1.45 |
1.74 |
(0.29) |
(17)% |
Cash from Ops |
25 |
35 |
(10) |
(27)% |
Free Cash Flow |
(1) |
(12) |
12 |
93% |
Year-to-Date Quarter 3 Segment Financials
YTD Q3 Segment Sales |
2019 $ Millions |
2018 $ Millions |
Variance $ |
Variance % |
FHN |
327 |
367 |
(40) |
(11)% |
IS |
204 |
196 |
8 |
4% |
Other |
35 |
46 |
(11) |
(24)% |
Total IPHS |
566 |
609 |
(43) |
(7)% |
YTD Q3 Segment Adj. EBITDA |
2019 $ Millions |
2018 $ Millions |
2019 % Margin |
2018 % Margin |
FHN |
57 |
56 |
18% |
15% |
IS |
28 |
34 |
14% |
17% |
Other |
4 |
5 |
11% |
10% |
Total IPHS |
90 |
95 |
16% |
16% |
Note: See Adjusted EBITDA reconciliation to EBITDA in the financial tables that follow
About the Company
Innophos is a leading international producer of essential ingredients. We partner with world-leading health & nutrition, food & beverage and industrial brands to create science-based solutions that improve quality of life. Our knowledgeable teams apply science to unlock the potential that lies within the blends and formulations that we deliver. Forward thinking and people centric at heart, we execute with purpose and efficiency to create value in everything we do. Headquartered in Cranbury, New Jersey, Innophos has manufacturing operations across the United States, in Canada, Mexico and China. For more information, please visit www.innophos.com 'IPHS-G'
Financial Tables Follow
Discussion of Non-GAAP Financial Measures
The non-GAAP financial measures in this news release are utilized by management to compare Innophos’ operating performance on a consistent basis. Management believes that these financial measures enhance the overall understanding of the Company’s underlying operating performance trends compared with historical periods. Non-GAAP financial measures should not be considered as a substitute for financial information calculated in accordance with GAAP.
Net debt is a supplemental financial measure that is not required by, or presented in accordance with, US GAAP. The Company believes net debt is helpful in analyzing leverage and as a performance measure for purposes of presentation in this release. The Company defines net debt as total long-term debt (including any current portion) less cash and cash equivalents.
Free cash flow is a supplemental financial measure that is not required by, or presented in accordance with, US GAAP. The Company believes free cash flow is helpful in analyzing the cash flow generating capability of the business and as a performance measure for purposes of presentation in this release. The Company defines free cash flow as net cash provided from operating activities plus cash used for capital expenditures plus cash received from sale leaseback transactions.
EBITDA, adjusted EBITDA, adjusted net income and adjusted diluted EPS are supplemental financial measures that are not required by, or presented in accordance with, US GAAP. The Company believes EBITDA and adjusted EBITDA are helpful in analyzing the cash flow generating capability of the business and as performance measures for purposes of presentation in this release.
Net Working Capital is a supplemental financial measure that is not required by, or presented in accordance with, US GAAP. The Company believes net working capital is helpful in analyzing the effects on the cash flow generating capability of the business and as a performance measure for purposes of presentation in this release. The Company defines net working capital as total current assets less cash and cash equivalents less total current liabilities plus current portion of capital leases.
Operating Working Capital is a supplemental financial measure that is not required by, or presented in accordance with, US GAAP. The Company believes operating working capital is helpful in analyzing the effects on the cash flow generating capability of the business and as a performance measure for purposes of presentation in this release. The Company defines operating working capital as net working capital less taxes less interest.
Safe Harbor for Forward-Looking and Cautionary Statements
This press release contains or may contain forward-looking statements within the meaning of Section 27a of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The Company intends these forward-looking statements to be covered by the safe harbor provisions for such statements. Statements made in this press release that relate to our future performance or future financial results or other future events (which may be identified by such terms as “expect”, “estimate”, “anticipate”, “assume”, “believe”, “plan”, “intend’, “may”, “will”, “should”, “outlook”, “guidance”, “target”, “opportunity”, “potential” or similar terms and variations or the negative thereof) are forward-looking statements, including the Company’s expectations regarding the business environment and the Company’s overall guidance regarding future performance and growth. These statements are based on our current beliefs and expectations and are subject to significant risks and uncertainties. Actual results may materially differ from the expectations expressed in or implied by these forward-looking statements. Factors that could cause the Company’s actual results to differ materially include, but are not limited to: (1) the Company’s pending merger with an affiliate of One Rock Capital Partners (2) global macroeconomic conditions and trends; (3) the behavior of financial markets, including fluctuations in foreign currencies, interest rates and turmoil in capital markets; (4) changes in regulatory controls regarding tariffs, duties, taxes and income tax rates; (5) the Company’s ability to implement and refine its Vision 2022 strategic roadmap; (6) the Company’s ability to successfully identify and complete acquisitions in line with its Vision 2022 strategic roadmap and effectively operate and integrate acquired businesses to realize the anticipated benefits of those acquisitions; (7) the Company’s ability to realize expected cost savings and efficiencies from its performance improvement and other optimization initiatives; (8) the Company’s ability to effectively compete in its markets, and to successfully develop new and competitive products that appeal to its customers; (9) changes in consumer preferences and demand for the Company’s products or a decline in consumer confidence and spending; (10) the Company’s ability to benefit from its investments in assets and human capital and the ability to complete projects successfully and on budget; (11) economic, regulatory and political risks associated with the Company’s international operations, most notably Mexico and China; (12) volatility and increases in the price of raw materials, energy and transportation, and fluctuations in the quality and availability of raw materials and process aids; (13) the impact of a disruption in the Company’s supply chain or its relationship with its suppliers; (14) the Company’s ability to comply with, and the costs associated with compliance with, U.S. and foreign environmental protection laws and (15) the Company’s ability to meet quality and regulatory standards in the various jurisdictions in which it has operations or conducts business. We caution you to consider the important risks and other factors as set forth in the forward-looking statements section and in Item 1A Risk Factors in our most recent Annual Report on Form 10-K, as amended by subsequent reports on Forms 10-Q and 8-K. We do not undertake to update the forward-looking statements to reflect the impact of circumstances or events that may arise after the date of the forward-looking statements.
Additional Information and Where to Find It
In connection with the proposed transaction, the Company expects to file with the SEC and furnish to its stockholders a proxy statement on Schedule 14A, as well as other relevant materials concerning the proposed transaction. Promptly after filing its definitive proxy statement with the SEC, the Company will mail the definitive proxy statement and a proxy card to each stockholder of the Company entitled to vote at the special meeting relating to the proposed transaction. WE URGE INVESTORS TO READ THE PROXY STATEMENT AND THESE OTHER MATERIALS FILED WITH THE SEC CAREFULLY WHEN THEY BECOME AVAILABLE BEFORE MAKING ANY VOTING OR INVESTMENT DECISION BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. Investors will be able to obtain free copies of the proxy statement (when available) and other documents that will be filed by the Company with the SEC at http://www.sec.gov, the SEC’s website, or from the Company’s website (http://www.innophos.com) under the tab “Investor Relations,” then under the heading “Financials” and then under “SEC Filings.” In addition, investors and stockholders may obtain free copies of these documents from the Company by directing a request to Investor Relations, Phone: 1-609-366-1204. Media inquiries can be directed to Ryan Flaim at Sharon Merrill Associates, Phone: 617-542-5300. Media inquiries related to One Rock specifically can be directed to Gasthalter & Co., Phone 212-257-4170.
Participants in the Solicitation
The Company, its directors and certain of its executive officers and other persons may be deemed to be participants in the solicitation of proxies from the Company’s stockholders with respect to the proposed transaction. Information regarding the directors and executive officers of the Company is available in its definitive proxy statement for its 2019 annual meeting, filed with the SEC on April 8, 2019. More detailed information regarding the identity of potential participants, and their direct or indirect interests, by securities, holdings or otherwise, will be set forth in the proxy statement and other materials when they are filed with the SEC in connection with the proposed transaction.
Summary Profit & Loss Statement
INNOPHOS HOLDINGS, INC. AND SUBSIDIARIES |
|||||||||||
Condensed Consolidated Statement of Operations (Unaudited) |
|||||||||||
(Dollars in thousands, except per share amounts or share amounts) |
|||||||||||
|
|
|
|
||||||||
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||
|
2019 |
|
2018 |
|
2019 |
|
2018 |
||||
Net Sales |
$189,349 |
$196,934 |
$565,801 |
$609,099 |
|||||||
Cost of goods sold |
156,685 |
|
|
161,706 |
|
|
460,333 |
|
|
495,259 |
|
Gross profit |
32,664 |
|
|
35,228 |
|
|
105,468 |
|
|
113,840 |
|
Operating expenses: |
|
|
|
|
|
|
|
||||
Selling, general and administrative |
17,803 |
|
|
19,525 |
|
|
57,505 |
|
|
64,548 |
|
Research & development expenses |
1,179 |
|
|
1,240 |
|
|
3,751 |
|
|
3,989 |
|
Total operating expenses |
18,982 |
|
|
20,765 |
|
|
61,256 |
|
|
68,537 |
|
Operating income |
13,682 |
|
|
14,463 |
|
|
44,212 |
|
|
45,303 |
|
Interest expense, net |
3,990 |
|
|
3,428 |
|
|
11,580 |
|
|
9,530 |
|
Foreign exchange (gain) loss |
373 |
|
|
(531 |
) |
|
(478 |
) |
|
409 |
|
Other income |
(5 |
) |
|
(14 |
) |
|
(16 |
) |
|
(42 |
) |
Income before income taxes |
9,324 |
|
|
11,580 |
|
|
33,126 |
|
|
35,406 |
|
Provision for income taxes |
2,873 |
|
|
(2,510 |
) |
|
16,580 |
|
|
4,155 |
|
Net income |
$6,451 |
$14,090 |
$16,546 |
$31,251 |
|||||||
Diluted Earnings Per Participating Share |
$0.32 |
$0.71 |
$0.83 |
$1.57 |
|||||||
Diluted weighted average participating shares outstanding |
19,785,045 |
|
|
19,838,962 |
|
|
19,740,262 |
|
|
19,790,570 |
|
Dividends paid per share of common stock |
$0.48 |
$0.48 |
$1.44 |
$1.44 |
|||||||
Dividends declared per share of common stock |
$0.48 |
$0.48 |
$1.44 |
$1.44 |
Adjusted Net Income Reconciliation to Net Income
(Dollars in thousands, except EPS) |
Three Months Ended
|
|
Nine Months Ended
|
||||
|
2019 |
|
2018 |
|
2019 |
|
2018 |
Net Income |
$6,451 |
|
$14,090 |
|
$16,546 |
|
$31,251 |
Pre-tax Adjustments |
|
|
|
|
|
|
|
Foreign exchange loss (gain) |
373 |
|
(531) |
|
(478) |
|
409 |
Severance/Restructuring expense |
839 |
|
1,297 |
|
4,088 |
|
2,581 |
M&A related costs |
517 |
|
45 |
|
968 |
|
982 |
Mexico natural gas supply imbalance charges |
0 |
|
1,857 |
|
1,179 |
|
1,857 |
Value chain transition |
3,902 |
|
2,385 |
|
6,240 |
|
6,878 |
Supplier Q418 payment amortization |
(2,315) |
|
0 |
|
(4,680) |
|
0 |
Other |
132 |
|
0 |
|
595 |
|
0 |
Total Pre-Tax Adjustments |
3,448 |
|
5,053 |
|
7,912 |
|
12,707 |
Income tax effects on Adjustments |
1,050 |
|
1,515 |
|
2,383 |
|
3,447 |
'18 Tax Reform Partial Reversal / '19 Dutch tax charge |
0 |
|
(5,982) |
|
6,603 |
|
(5,982) |
Adjusted Net Income |
$8,849 |
|
$11,646 |
|
$28,678 |
|
$34,529 |
Adjusted Diluted Earnings Per Participating Share |
$0.45 |
|
$0.58 |
|
$1.45 |
|
$1.74 |
Adjusted EBITDA Reconciliation to Net Income
(Dollars in thousands) |
Three Months Ended
|
|
Nine Months Ended
|
||||||||
|
2019 |
|
2018 |
|
2019 |
|
2018 |
||||
Net Income |
$6,451 |
|
$14,090 |
|
$16,546 |
|
$31,251 |
||||
Interest expense, net |
3,990 |
|
3,428 |
|
11,580 |
|
9,530 |
||||
Provision for income taxes |
2,873 |
|
(2,510) |
|
16,580 |
|
4,155 |
||||
Depreciation & amortization |
11,130 |
|
10,864 |
|
31,776 |
|
33,317 |
||||
EBITDA |
24,444 |
|
25,872 |
|
76,482 |
|
78,253 |
||||
Adjustments |
|
|
|
|
|
|
|
||||
Non-cash stock compensation |
1,621 |
|
1,152 |
|
5,188 |
|
4,143 |
||||
Foreign exchange loss (gain) |
373 |
|
(531) |
|
(478) |
|
409 |
||||
Severance/Restructuring expense |
839 |
|
1,297 |
|
4,088 |
|
2,581 |
||||
M&A related costs |
517 |
|
45 |
|
968 |
|
982 |
||||
Mexico natural gas supply imbalance charges |
0 |
|
1,857 |
|
1,179 |
|
1,857 |
||||
Value chain transition |
3,902 |
|
2,385 |
|
6,240 |
|
6,878 |
||||
Supplier Q418 payment amortization |
(2,315) |
|
0 |
|
(4,680) |
|
0 |
||||
Other |
132 |
|
0 |
|
595 |
|
0 |
||||
Adjusted EBITDA |
$29,513 |
|
$32,077 |
|
$89,582 |
|
$95,103 |
||||
Percent of Sales |
15.6% |
|
16.3% |
|
15.8% |
|
15.6% |
||||
Segment Adjusted EBITDA Reconciliation to EBITDA
(Dollars in thousands) |
Three Months Ended |
|
Three Months Ended |
||||||||||||||||||||||
|
September 30, 2019 |
|
September 30, 2018 |
||||||||||||||||||||||
|
FHN |
|
IS |
|
Other |
|
Total |
|
FHN |
|
IS |
|
Other |
|
Total |
||||||||||
EBITDA |
$14,791 |
$8,861 |
$792 |
$24,444 |
$14,563 |
$8,885 |
$2,424 |
$25,872 |
|||||||||||||||||
Non-cash stock compensation |
917 |
|
|
642 |
|
|
62 |
|
|
1,621 |
|
|
652 |
|
|
456 |
|
|
44 |
|
|
1,152 |
|
||
Foreign exchange loss (gain) |
119 |
|
|
— |
|
|
254 |
|
|
373 |
|
|
67 |
|
|
— |
|
|
(598 |
) |
|
(531 |
) |
||
Severance/Restructuring exp |
451 |
|
|
346 |
|
|
42 |
|
|
839 |
|
|
765 |
|
|
440 |
|
|
92 |
|
|
1,297 |
|
||
M&A related costs |
517 |
|
|
— |
|
|
— |
|
|
517 |
|
|
45 |
|
|
— |
|
|
— |
|
|
45 |
|
||
Mexico natural gas supply adj. |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
414 |
|
|
871 |
|
|
572 |
|
|
1,857 |
|
||
Value chain transition |
2,352 |
|
|
1,395 |
|
|
155 |
|
|
3,902 |
|
|
909 |
|
|
1,467 |
|
|
9 |
|
|
2,385 |
|
||
Supplier payment amortization |
(1,203 |
) |
|
(880 |
) |
|
(232 |
) |
|
(2,315 |
) |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
||
Other |
72 |
|
|
|
50 |
|
|
|
10 |
|
|
132 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
Adjusted EBITDA |
$18,016 |
$10,414 |
$1,083 |
$29,513 |
$17,415 |
$12,119 |
$2,543 |
$32,077 |
|||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Nine Months Ended |
|
Nine Months Ended |
||||||||||||||||||||||
|
September 30, 2019 |
|
September 30, 2018 |
||||||||||||||||||||||
|
FHN |
|
IS |
|
Other |
|
Total |
|
FHN |
|
IS |
|
Other |
|
Total |
||||||||||
EBITDA |
$48,758 |
$23,891 |
$3,833 |
$76,482 |
$48,494 |
$26,772 |
$2,987 |
$78,253 |
|||||||||||||||||
Non-cash stock compensation |
2,937 |
|
|
2,054 |
|
|
197 |
|
|
5,188 |
|
|
2,345 |
|
|
1,641 |
|
|
157 |
|
|
4,143 |
|
||
Foreign exchange loss (gain) |
59 |
|
|
— |
|
|
(537 |
) |
|
(478 |
) |
|
76 |
|
|
— |
|
|
333 |
|
|
409 |
|
||
Severance/Restructuring exp |
2,551 |
|
|
1,327 |
|
|
210 |
|
|
4,088 |
|
|
1,527 |
|
|
922 |
|
|
132 |
|
|
2,581 |
|
||
Inventory fair value adjustment |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
||
M&A related costs |
968 |
|
|
— |
|
|
— |
|
|
968 |
|
|
968 |
|
|
— |
|
|
14 |
|
|
982 |
|
||
Mexico natural gas supply adj. |
263 |
|
|
553 |
|
|
363 |
|
|
1,179 |
|
|
414 |
|
|
871 |
|
|
572 |
|
|
1,857 |
|
||
Value chain transition |
3,761 |
|
|
2,231 |
|
|
248 |
|
|
6,240 |
|
|
2,575 |
|
|
3,685 |
|
|
618 |
|
|
6,878 |
|
||
Supplier payment amortization |
(2,434 |
) |
|
(1,778 |
) |
|
(468 |
) |
|
(4,680 |
) |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
||
Other |
333 |
|
|
219 |
|
|
43 |
|
|
595 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
||
Adjusted EBITDA |
$57,196 |
$28,497 |
$3,889 |
$89,582 |
$56,399 |
$33,891 |
$4,813 |
$95,103 |
|||||||||||||||||
Segment Reporting
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||
Segment Net Sales |
2019 |
|
2018 |
|
2019 |
|
2018 |
||||
Food, Health and Nutrition |
$105,174 |
|
$115,132 |
|
$326,783 |
|
$367,159 |
||||
Industrial Specialties |
73,141 |
|
65,667 |
|
204,064 |
|
195,767 |
||||
Other |
11,034 |
|
16,135 |
|
34,954 |
|
46,173 |
||||
Total |
$189,349 |
|
$196,934 |
|
$565,801 |
|
$609,099 |
||||
Net Sales % change |
|
|
|
|
|
|
|
||||
Food, Health and Nutrition |
(8.6)% |
|
|
|
(11.0)% |
|
|
||||
Industrial Specialties |
11.4% |
|
|
|
4.2% |
|
|
||||
Other |
(31.6)% |
|
|
|
(24.3)% |
|
|
||||
Total |
(3.9)% |
|
|
|
(7.1)% |
|
|
||||
Segment EBITDA |
|
|
|
|
|
|
|
||||
Food, Health and Nutrition |
$14,791 |
|
$14,563 |
|
$48,758 |
|
$48,494 |
||||
Industrial Specialties |
8,861 |
|
8,885 |
|
23,891 |
|
26,772 |
||||
Other |
792 |
|
2,424 |
|
3,833 |
|
2,987 |
||||
Total |
$24,444 |
|
$25,872 |
|
$76,482 |
|
$78,253 |
||||
Segment EBITDA % of net sales |
|
|
|
|
|
|
|
||||
Food, Health and Nutrition |
14.1% |
|
12.6% |
|
14.9% |
|
13.2% |
||||
Industrial Specialties |
12.1% |
|
13.5% |
|
11.7% |
|
13.7% |
||||
Other |
7.2% |
|
15.0% |
|
11.0% |
|
6.5% |
||||
Total |
12.9% |
|
13.1% |
|
13.5% |
|
12.8% |
||||
Depreciation and amortization expense |
|
|
|
|
|
|
|
||||
Food, Health and Nutrition |
$6,959 |
|
$7,142 |
|
$20,128 |
|
$21,677 |
||||
Industrial Specialties |
3,768 |
|
3,153 |
|
10,714 |
|
10,257 |
||||
Other |
403 |
|
569 |
|
934 |
|
1,383 |
||||
Total |
$11,130 |
|
$10,864 |
|
$31,776 |
|
$33,317 |
Price / Volume
The Company calculates pure selling price dollar variances as the selling price for the current year to date period minus the selling price for the prior year to date period, and then multiplies the resulting selling price difference by the prior year to date period volume. The current quarter selling price dollar variance is derived from the current quarter year to date selling price dollar variance less the previous quarter year to date selling price dollar variance. The selling price dollar variance is then divided by the prior period sales dollars to calculate the percentage change. Volume/mix variance is calculated as the total sales variance minus the selling price variance. The following table illustrates the percentage changes in net sales by reportable segments compared with the same period of the prior year, including the effect of selling price and volume/mix changes upon revenue:
|
Three Months Ended |
|
Nine Months Ended |
||||||||||||||
|
September 30, 2019 |
|
September 30, 2019 |
||||||||||||||
Reportable Segments |
Price |
|
Vol/Mix |
|
Total |
|
Price |
|
Vol/Mix |
|
Total |
||||||
Food, Health and Nutrition |
2.7 |
% |
|
(11.3 |
)% |
|
(8.6 |
)% |
|
3.4 |
% |
|
(14.4 |
)% |
|
(11.0 |
)% |
Industrial Specialties |
1.2 |
% |
|
10.2 |
% |
|
11.4 |
% |
|
2.7 |
% |
|
1.5 |
% |
|
4.2 |
% |
Other |
(7.6 |
)% |
|
(24.0 |
)% |
|
(31.6 |
)% |
|
(3.3 |
)% |
|
(21.0 |
)% |
|
(24.3 |
)% |
Total |
1.3 |
% |
|
(5.2 |
)% |
|
(3.9 |
)% |
|
2.7 |
% |
|
(9.8 |
)% |
|
(7.1 |
)% |
Summary Cash Flow Statement
INNOPHOS HOLDINGS, INC. AND SUBSIDIARIES |
|||||
Condensed Consolidated Statement of Cash Flows (Unaudited) |
|||||
(Dollars in thousands) |
|||||
|
Nine Months Ended
|
||||
|
2019 |
|
2018 |
||
Cash flows provided from (used for) operating activities |
|
|
|
||
Net income |
$16,546 |
$31,251 |
|||
Adjustments to reconcile net income to net cash provided from (used for) operating activities: |
|||||
Depreciation and amortization |
31,776 |
|
|
33,317 |
|
Amortization of deferred financing charges |
322 |
|
|
322 |
|
Deferred income tax provision |
242 |
|
|
7,006 |
|
Share-based compensation |
5,188 |
|
|
4,143 |
|
Changes in assets and liabilities: |
|
|
|
||
Accounts receivable |
(3,655 |
) |
|
(2,272 |
) |
Inventories |
9,913 |
|
|
(23,094 |
) |
Other current assets |
(11,042 |
) |
|
(9,362 |
) |
Accounts payable |
(18,060 |
) |
|
(1,167 |
) |
Other current liabilities |
5,041 |
|
|
10,291 |
|
Other long-term assets and liabilities |
(11,608 |
) |
|
(15,071 |
) |
Net cash (used for) provided by operating activities |
24,663 |
|
|
35,364 |
|
Cash flows used for investing activities: |
|
|
|
||
Capital expenditures |
(25,576 |
) |
|
(47,800 |
) |
Net cash used for investing activities |
(25,576 |
) |
|
(47,800 |
) |
Cash flows provided by (used for) financing activities: |
|
|
|
||
Long-term debt borrowings |
51,000 |
|
|
86,000 |
|
Long-term debt repayments |
(11,000 |
) |
|
(51,000 |
) |
Restricted stock forfeitures |
(235 |
) |
|
(251 |
) |
Dividends paid |
(28,318 |
) |
|
(28,197 |
) |
Net cash provided by (used for) financing activities |
11,447 |
|
|
6,552 |
|
Effect of foreign exchange rate changes on cash and cash equivalents |
— |
|
|
181 |
|
Net change in cash |
10,534 |
|
|
(5,703 |
) |
Cash and cash equivalents at beginning of period |
20,197 |
|
|
28,782 |
|
Cash and cash equivalents at end of period |
$30,731 |
$23,079 |
Cash From Operations Reconciliation to EBITDA
(Dollars in thousands) |
Three Months Ended
|
|
Nine Months Ended
|
||||||||
|
2019 |
|
2018 |
|
2019 |
|
2018 |
||||
EBITDA |
$24,444 |
$25,872 |
$76,482 |
$78,253 |
|||||||
Operating Working Capital |
679 |
|
|
4,061 |
|
|
(22,370 |
) |
|
(19,446 |
) |
Taxes paid |
(10,653 |
) |
|
(3,792 |
) |
|
(19,679 |
) |
|
(16,590 |
) |
Interest paid |
(3,928 |
) |
|
(3,618 |
) |
|
(11,528 |
) |
|
(10,398 |
) |
All other including non-cash stock compensation and changes in other long-term assets and liabilities |
(2,660 |
) |
|
3,284 |
|
|
1,758 |
|
|
3,545 |
|
Net cash provided from operations |
$7,882 |
$25,807 |
$24,663 |
$35,364 |
Cash From Operations Reconciliation to Adjusted EBITDA
(Dollars in thousands) |
Three Months Ended
|
|
Nine Months Ended
|
||||||||
|
2019 |
|
2018 |
|
2019 |
|
2018 |
||||
Adjusted EBITDA |
$29,513 |
$32,077 |
$89,582 |
$95,103 |
|||||||
Operating Working Capital |
(2,769 |
) |
|
(992 |
) |
|
(30,282 |
) |
|
(32,154 |
) |
Taxes paid |
(10,653 |
) |
|
(3,792 |
) |
|
(19,679 |
) |
|
(16,590 |
) |
Interest paid |
(3,928 |
) |
|
(3,618 |
) |
|
(11,528 |
) |
|
(10,398 |
) |
All other including non-cash stock compensation and changes in other long-term assets and liabilities |
(4,281 |
) |
|
2,132 |
|
|
(3,430 |
) |
|
(597 |
) |
Net cash provided from operation |
$7,882 |
$25,807 |
$24,663 |
$35,364 |
Free Cash Flow Reconciliation to Cash From Operations
(Dollars in thousands) |
Three Months Ended
|
|
Nine Months Ended
|
||||
|
2019 |
|
2018 |
|
2019 |
|
2018 |
Cash from Operations |
$7,882 |
|
$25,807 |
|
$24,663 |
|
$35,364 |
Capital Expenditures |
(9,739) |
|
(21,325) |
|
(25,576) |
|
(47,800) |
Free Cash Flow |
$(1,857) |
|
$4,482 |
|
$(913) |
|
$(12,436) |
Summary Balance Sheets
INNOPHOS HOLDINGS, INC. AND SUBSIDIARIES |
||||||
Condensed Consolidated Balance Sheets (Unaudited) |
||||||
(Dollars in thousands) |
||||||
|
|
September 30, 2019 |
|
December 31, 2018 |
||
ASSETS |
|
|
|
|
||
Current assets: |
|
|
|
|
||
Cash and cash equivalents |
$30,731 |
$20,197 |
||||
Accounts receivable, net |
|
106,219 |
|
|
102,564 |
|
Inventories |
|
170,290 |
|
|
180,203 |
|
Other current assets |
|
35,136 |
|
|
24,094 |
|
Total current assets |
|
342,376 |
|
|
327,058 |
|
Property, plant and equipment, net |
|
237,803 |
|
|
240,235 |
|
Lease right-of-use assets |
|
55,597 |
|
|
— |
|
Goodwill |
|
152,767 |
|
|
152,767 |
|
Intangibles and other assets, net |
|
87,301 |
|
|
95,094 |
|
Total assets |
$875,844 |
$815,154 |
||||
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
||
Current liabilities: |
|
|
|
|
||
Accounts payable, trade and other |
|
57,850 |
|
|
80,007 |
|
Other current liabilities |
|
58,655 |
|
|
49,993 |
|
Total current liabilities |
|
116,505 |
|
|
130,000 |
|
Long-term debt |
|
340,000 |
|
|
300,000 |
|
Long-term lease liabilities |
|
49,077 |
|
|
— |
|
Other long-term liabilities |
|
32,364 |
|
|
49,639 |
|
Total stockholders' equity |
|
337,898 |
|
|
335,515 |
|
Total liabilities and stockholders' equity |
$875,844 |
$815,154 |