Cover page
Cover page - shares | 3 Months Ended | |
Mar. 31, 2020 | Apr. 28, 2020 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Mar. 31, 2020 | |
Entity File Number | 001-37586 | |
Entity Registrant Name | INGEVITY CORPORATION | |
Entity Central Index Key | 0001653477 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 47-4027764 | |
Entity Address, Address Line One | 5255 Virginia Avenue | |
Entity Address, City or Town | North Charleston | |
Entity Address, State or Province | SC | |
Entity Address, Postal Zip Code | 29406 | |
City Area Code | 843 | |
Local Phone Number | 740-2300 | |
Title of 12(b) Security | Common Stock ($0.01 par value) | |
Trading Symbol | NGVT | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 41,208,906 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Income Statement [Abstract] | ||
Net sales | $ 288.2 | $ 276.8 |
Cost of sales | 173.6 | 179.7 |
Gross profit | 114.6 | 97.1 |
Selling, general and administrative expenses | 38.5 | 39.1 |
Research and technical expenses | 6.2 | 5.1 |
Restructuring and other (income) charges, net | 0.5 | 0 |
Acquisition-related costs | 1.3 | 22.8 |
Other (income) expense, net | 2 | (3.7) |
Interest expense, net | 10.9 | 11.1 |
Income (loss) before income taxes | 55.2 | 22.7 |
Provision (benefit) for income taxes | 9.9 | 0 |
Net income (loss) | $ 45.3 | $ 22.7 |
Per share data | ||
Basic earnings (loss) per share (usd per share) | $ 1.09 | $ 0.54 |
Diluted earnings (loss) per share (usd per share) | $ 1.08 | $ 0.54 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Statement of Comprehensive Income [Abstract] | ||
Net income (loss) | $ 45.3 | $ 22.7 |
Foreign currency adjustments: | ||
Foreign currency translation adjustment | (40.1) | 9.4 |
Unrealized gain (loss) on net investment hedges, net of tax provision (benefit) of $1.7 and zero | 5.7 | 0 |
Foreign currency translation adjustment | (34.4) | 9.4 |
Derivative instruments: | ||
Unrealized gain (loss), net of tax provision (benefit) of $(1.4) and zero | (4.8) | 0.1 |
Reclassifications of deferred derivative instruments (gain) loss, included in net income (loss), net of tax (provision) benefit of zero and $(0.1) | 0.1 | (0.4) |
Total derivative instruments, net of tax provision (benefit) of $(1.4) and $(0.1) | (4.7) | (0.3) |
Other comprehensive income (loss), net of tax provision (benefit) of $0.3 and $(0.1) | (39.1) | 9.1 |
Comprehensive income (loss) | $ 6.2 | $ 31.8 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) (Parenthetical) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Statement of Comprehensive Income [Abstract] | ||
Tax on net investment hedge | $ 1,700,000 | $ 0 |
Foreign currency tax | 1,700,000 | 0 |
Derivative instruments, unrealized gain (loss), tax | (1,400,000) | 0 |
Reclassification derivative instrument, tax | 0 | (100,000) |
Derivative instrument, tax | (1,400,000) | (100,000) |
Other cmprehensive income (loss), tax | $ 300,000 | $ (100,000) |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Assets | ||
Cash and cash equivalents | $ 302.7 | $ 38.4 |
Accounts receivable, net of allowance for credit losses of $0.5 million - 2020 and $0.5 million - 2019 | 140.8 | 150 |
Inventories, net | 236.2 | 212.5 |
Prepaid and other current assets | 44.8 | 44.2 |
Current assets | 724.5 | 463.2 |
Property, plant and equipment, net | 659.7 | 664.7 |
Operating lease assets, net | 52.2 | 53.4 |
Goodwill | 416.8 | 436.4 |
Other intangibles, net | 370.3 | 396.2 |
Deferred income taxes | 5 | 5 |
Restricted investment, net of allowance for credit losses of $0.9 million - 2020 | 72.2 | 72.6 |
Other assets | 52.6 | 50.2 |
Total Assets | 2,353.3 | 2,141.7 |
Liabilities | ||
Accounts payable | 105 | 99.1 |
Accrued expenses | 30.1 | 33.3 |
Accrued payroll and employee benefits | 15.6 | 28.2 |
Current operating lease liabilities | 16.9 | 17.1 |
Notes payable and current maturities of long-term debt | 21.6 | 22.5 |
Income taxes payable | 18.5 | 15.3 |
Current liabilities | 207.7 | 215.5 |
Long-term debt including finance lease obligations | 1,467.8 | 1,228.4 |
Noncurrent operating lease liabilities | 35.7 | 36.7 |
Deferred income taxes | 104.3 | 100.3 |
Other liabilities | 35.7 | 30 |
Total Liabilities | 1,851.2 | 1,610.9 |
Commitments and contingencies (Note 16) | ||
Equity | ||
Preferred stock (par value $0.01 per share; 50,000,000 shares authorized; zero issued and outstanding - 2020 and 2019) | 0 | 0 |
Common stock (par value $0.01 per share; 300,000,000 shares authorized; issued: 42,836,074 - 2020 and 42,675,171 - 2019; outstanding: 41,176,953 - 2020 and 41,826,136 - 2019) | 0.4 | 0.4 |
Additional paid-in capital | 113.6 | 112.8 |
Retained earnings | 541.9 | 497.2 |
Accumulated other comprehensive income (loss) | (44.1) | (5) |
Treasury stock, common stock, at cost (1,659,121 shares - 2020; 849,035 shares - 2019) | (109.7) | (74.6) |
Total Equity | 502.1 | 530.8 |
Total Liabilities and Equity | $ 2,353.3 | $ 2,141.7 |
Preferred stock, par value (usd per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (shares) | 50,000,000 | 50,000,000 |
Preferred stock, shares issued (shares) | 0 | 0 |
Preferred stock, shares outstanding (shares) | 0 | 0 |
Common stock, par value (usd per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (shares) | 300,000,000 | 300,000,000 |
Shares issued (in shares) | 42,836,074 | 42,675,171 |
Common stock shares outstanding (shares) | 41,176,953 | 41,826,136 |
Treasury shares (in shares) | 1,659,121 | 849,035 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parentheticals) - USD ($) $ in Millions | Mar. 31, 2020 | Jan. 01, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | |||
Allowance for doubtful accounts | $ 1.4 | $ 1.1 | $ 0.5 |
Preferred stock, shares authorized (shares) | 50,000,000 | 50,000,000 | |
Preferred stock, par value (usd per share) | $ 0.01 | $ 0.01 | |
Preferred stock, shares issued (shares) | 0 | 0 | |
Preferred stock, shares outstanding (shares) | 0 | 0 | |
Common stock, shares authorized (shares) | 300,000,000 | 300,000,000 | |
Common stock, par value (usd per share) | $ 0.01 | $ 0.01 | |
Common stock, shares issued (shares) | 42,836,074 | 42,675,171 | |
Common stock shares outstanding (shares) | 41,176,953 | 41,826,136 | |
Treasury shares (in shares) | 1,659,121 | 849,035 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | ||
Cash provided by (used in) operating activities: | |||
Net income (loss) | $ 45.3 | $ 22.7 | |
Adjustments to reconcile net income (loss) to cash provided by (used in) operating activities: | |||
Depreciation and amortization | 24.3 | 18.5 | |
Deferred income taxes | 6.5 | (0.4) | |
Share-based compensation | 0.8 | 4.1 | |
Pension and other postretirement benefit costs | 0.4 | 0.3 | |
Other non-cash items | 5 | 0.1 | |
Changes in operating assets and liabilities, net of effect of acquisitions: | |||
Accounts receivable, net | 7.7 | (16.1) | |
Inventories, net | (25.9) | (15) | |
Prepaid and other current assets | (0.2) | 0.6 | |
Planned major maintenance outage | (0.8) | (2) | |
Accounts payable | 9.4 | 15.4 | |
Accrued expenses | (3.2) | (12.4) | |
Accrued payroll and employee benefits | (12.4) | (26.6) | |
Income taxes | 2 | (0.2) | |
Changes in other operating assets and liabilities, net | 1.3 | 3 | |
Net cash provided by (used in) operating activities | 60.2 | (8) | |
Cash provided by (used in) investing activities: | |||
Capital expenditures | (19.5) | (28.1) | |
Payments for acquired businesses, net of cash acquired | 0 | (537.9) | |
Other investing activities, net | (0.7) | (3.3) | |
Net cash provided by (used in) investing activities | (20.2) | (569.3) | |
Cash provided by (used in) financing activities: | |||
Proceeds from revolving credit facility | 346.1 | 714.2 | |
Proceeds from long-term borrowings | 0 | 375 | |
Payments on revolving credit facility | (102.3) | (421.1) | |
Payments on long-term borrowings | (4.7) | (113.1) | |
Debt issuance costs | 0 | (1.8) | |
Borrowings (repayments) of notes payable and other short-term borrowings, net | (0.8) | ||
Borrowings (repayments) of notes payable and other short-term borrowings, net | 2.1 | ||
Tax payments related to withholdings on vested equity awards | (3.1) | (14.3) | |
Proceeds and withholdings from share-based compensation plans, net | 0.4 | 1.7 | |
Repurchases of common stock under publicly announced plan | (32.4) | (3.3) | |
Net cash provided by (used in) financing activities | 203.2 | 539.4 | |
Increase (decrease) in cash, cash equivalents, and restricted cash | 243.2 | (37.9) | |
Effect of exchange rate changes on cash | 2.9 | (0.1) | |
Change in cash, cash equivalents, and restricted cash | [1] | 246.1 | (38) |
Cash, cash equivalents, and restricted cash at beginning of period | 64.6 | 77.5 | |
Cash, cash equivalents and restricted cash at end of period | [1] | 310.7 | 39.5 |
Supplemental cash flow information: | |||
Cash paid for interest, net of capitalized interest | 16.9 | 14.4 | |
Cash paid for income taxes, net of refunds | 1.4 | 0.5 | |
Purchases of property, plant and equipment in accounts payable | 5.1 | 6.6 | |
Leased assets obtained in exchange for new finance lease liabilities | 0 | 0 | |
Leased assets obtained in exchange for new operating lease liabilities | 4.2 | $ 0 | |
Restricted cash and cash equivalents | 8 | ||
Cash and cash equivalents | $ 302.7 | ||
[1] | Includes restricted cash of $8.0 million and $1.1 million and cash and cash equivalents of $302.7 million and $38.4 million of March 31, 2020 and 2019, respectively. Restricted cash is included within "Prepaid and other current assets" within the condensed consolidated balance sheets. |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Cash Flows (Unaudited) (Parentheticals) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Statement of Cash Flows [Abstract] | ||
Restricted cash and cash equivalents | $ 8 | $ 1.1 |
Cash and cash equivalents | $ 302.7 | $ 38.4 |
Description of Business and Bas
Description of Business and Basis of Presentation | 3 Months Ended |
Mar. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business and Basis of Presentation | Description of Business and Basis of Presentation Description of Business Ingevity Corporation ("Ingevity," "the Company," "we," "us," or "our") is a leading global manufacturer of specialty chemicals and high performance activated carbon materials. We provide innovative solutions to meet our customers’ unique and demanding requirements through proprietary formulated products. We report in two business segments, Performance Materials and Performance Chemicals. Our Performance Materials segment consists of our automotive technologies and process purification product lines. Performance Materials manufactures products in the form of powder, granular, extruded pellets, extruded honeycombs, and activated carbon sheets. Automotive technologies products are sold into gasoline vapor emission control applications within the automotive industry, while process purification products are sold into the food, water, beverage, and chemical purification industries. Our Performance Chemicals segment consists of our pavement technologies, oilfield technologies, industrial specialties, and engineered polymers product lines. Performance Chemicals manufactures products derived from crude tall oil ("CTO") and lignin extracted from the kraft paper making process as well as caprolactone monomers and derivatives derived from cyclohexanone and hydrogen peroxide. Performance Chemicals products serve as critical inputs used in a variety of high performance applications, including pavement preservation, pavement adhesion promotion, and warm mix paving (pavement technologies product line), oil well service additives, oil production, and downstream application chemicals (oilfield technologies product line), printing inks, adhesives, agrochemicals, lubricants, and industrial intermediates (industrial specialties product line), coatings, resins, elastomers, adhesives, and bio-plastics (engineered polymers product line). Basis of Presentation These unaudited Condensed Consolidated Financial Statements reflect the consolidated operations of the Company and have been prepared in accordance with United States Securities and Exchange Commission ("SEC") interim reporting requirements. Accordingly, the accompanying Condensed Consolidated Financial Statements do not include all disclosures required by accounting principles generally accepted in the United States of America ("GAAP") for full financial statements and should be read in conjunction with the Annual Consolidated Financial Statements for the years ended December 31, 2019, 2018 and 2017, collectively referred to as the “Annual Consolidated Financial Statements” included in our Annual Report on Form 10-K for the year ended December 31, 2019 (the "2019 Annual Report"). In the opinion of management, the Condensed Consolidated Financial Statements contain all adjustments, which include only normal recurring adjustments, necessary to fairly state the condensed consolidated results for the interim periods presented. The consolidated results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. The preparation of the condensed consolidated financial statements requires management to make estimates and assumptions with respect to the reported amounts of assets, liabilities, revenue and expenses and the disclosure of contingent assets and liabilities. Actual results could differ from these estimates. During the three months ended March 31, 2020 and subsequent to this date, there have been significant changes to the global economic situation and to public securities markets as a consequence of the novel strain of coronavirus ("COVID-19") pandemic. It is reasonably possible that this could cause changes to estimates as a result of the financial circumstances of the markets in which we operate, the price of our publicly traded equity in comparison to the carrying value, and the health of the global economy. Such changes to estimates could potentially result in impacts that would be material to the condensed consolidated financial statements. While there was not a material impact to our condensed consolidated financial statements as of and for the quarter ended March 31, 2020, our future assessment of the magnitude and duration of COVID-19, as well as other factors, could result in material impacts to our consolidated financial statements in future reporting periods. Certain prior year amounts have been reclassified to conform with the current year's presentation. |
Coronavirus Pandemic
Coronavirus Pandemic | 3 Months Ended |
Mar. 31, 2020 | |
Unusual or Infrequent Items, or Both [Abstract] | |
Coronavirus Pandemic | Coronavirus Pandemic On March 11, 2020, the World Health Organization declared COVID-19 a global pandemic and recommended containment and mitigation measures worldwide. COVID-19 has led to adverse impacts on the U.S. and global economies, and created uncertainty regarding potential impacts to our supply chain, operations, and customer demand. We have been classified as an essential business in the jurisdictions that have made this determination to date, allowing us to continue operations. However, our facilities - as well as the operations of our suppliers, customers, third-party sales representatives, and distributors - have been, and will continue to be, disrupted by governmental and private sector responses to COVID-19. This includes business shutdowns, work-from-home orders and social distancing protocols, travel or health-related restrictions, as well as quarantines, self-isolations, and disruptions to transportation channels. On March 27, 2020, the U.S. government enacted the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), which includes modifications to the limitation on business interest expense and net operating loss provisions, and provides a payment delay of employer payroll taxes during 2020 after the date of enactment. We estimate the payment of approximately $5.3 million of employer payroll taxes otherwise due in 2020 will be delayed with 50 percent due by December 31, 2021 and the remaining 50 percent by December 31, 2022. The CARES Act is not expected to have a material impact on our Condensed Consolidated Financial Statements. In order to strengthen our short term liquidity and to ensure financial flexibility, in March 2020, we drew down $250 million from our revolving credit facility as a precautionary measure and also suspended our share repurchase program. We also implemented work-from-home policies and protocols for the majority of our global salaried workforce, as well as social distancing practices to ensure the safety of our employees at our manufacturing facilities. Further, in April 2020, we decreased production at some of our U.S. based Performance Materials' manufacturing plants, due to COVID-19 impacts to the projected demand of our U.S. based automotive customers. As of March 31, 2020, we evaluated, in accordance with ASC 350 - Goodwill and Other and ASC 360 - Property, Plant, and Equipment, whether the economic impacts of the COVID-19 pandemic constitute triggering events requiring impairment or recoverability analysis to be performed. We considered the current and expected future economic and market conditions surrounding the COVID-19 pandemic and its impact on each of the reporting units and asset groups. Further, we assessed the current market capitalization, forecasts and the amount of headroom in the 2019 impairment test. We determined that a triggering event has not occurred which would require an interim impairment test to be performed.However, a lack of recovery or further deterioration in market conditions related to the general economy and the industries in which we operate, a sustained trend of weaker than anticipated financial performance, a lack of recovery or further decline in our share price for a sustained period of time, or an increase in the market-based weighted average cost of capital, among other factors, could significantly impact the impairment analysis and may result in future impairment charges that, if incurred, could have a material adverse effect on our financial condition and results of operations. |
New Accounting Guidance
New Accounting Guidance | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
New Accounting Guidance | New Accounting Guidance The Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC" or "Codification") is the sole source of authoritative GAAP other than SEC issued rules and regulations that apply only to SEC registrants. The FASB issues an Accounting Standards Update ("ASU") to communicate changes to the Codification. We consider the applicability and impact of all ASUs. ASUs not listed below were assessed and determined to be either not applicable or are not expected to have a material impact on the consolidated financial statements. Recently Adopted Accounting Pronouncements In August 2018, the FASB issued ASU 2018-15 "Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40) Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract." This ASU requires companies to defer specific implementation costs incurred in a Cloud Computing Arrangement ("CCA") that are often expensed as incurred under current GAAP, and recognize the expense over the noncancellable term of the CCA. We adopted this standard on a prospective basis on January 1, 2020. As a result of the adoption, we anticipate capitalizing certain implementation costs that were previously expensed as incurred, which will be recorded to either prepaid and other current assets or other assets on the condensed consolidated balance sheets, depending on the duration of the agreement. The impact of the adoption did not have a material impact on our Condensed Consolidated Financial Statements and related disclosures. In June 2016, the FASB issued ASU 2016-13 “Financial Instruments – Credit losses: Measurement of Credit Losses on Financial Instruments." In 2019 and 2020, the FASB issued several ASUs to amend and clarify the credit loss guidance in the original ASU 2016-13 (ASU 2016-13 and its amendments are herein referred to as “ASC 326” or "CECL"). ASC 326 amends FASB's guidance on the impairment of financial instruments, specifically adding an impairment model to GAAP that is based on expected losses, rather than incurred losses, which is intended to result in more timely recognition of such losses. We adopted this standard on January 1, 2020. We have updated our internal controls and operational processes and procedures, to include certain forward-looking considerations in our current process of developing and recognizing credit losses for our accounts receivable and restricted investment accounted for at amortized cost. Generally, the adoption of ASC 326 did not have a material impact on our condensed consolidated balance sheet, results of operations or cash flows. ASC 326 had an immaterial impact to our allowance for credit losses reported in accounts receivable on our condensed consolidated balance sheet upon adoption. Additionally, upon adoption of ASC 326, we estimated an allowance for credit losses for our restricted investment on our condensed consolidated balance sheet. Our restricted investment, which is accounted for as a held-to-maturity investment, consists of highly rated corporate long-term bonds that mature in 2025 and 2026. To calculate our expected credit loss allowance, we utilized a probability-of-default method (“PDM”) for each bond based on each securities term. This process uses historical credit loss experience on similar product types, adjusted for reasonable and supportable forecasts of future default rates. Using a PDM, we calculated an expected credit loss allowance at January 1, 2020 of $0.6 million, which was recorded as an adjustment to the opening balance of retained earnings. The following table displays changes in our allowance for credit losses as of March 31, 2020, including the transition impact of adopting the CECL standard. (in millions) Balance at December 31, 2019 (1) Impact from Adoption of ASC 326 Balance at January 1, 2020 Current Period Provision Balance at March 31, 2020 (2) Allowance for credit losses $ 0.5 0.6 1.1 0.3 $ 1.4 ______________ (1) The allowance for credit losses at December 31, 2019 of $0.5 million was included in "Accounts receivable, net" on the condensed consolidated balance sheets. (2) The allowance for credit losses at March 31, 2020 of $0.5 million and $0.9 million was included "Accounts receivable, net" and "Restricted investment" on the condensed consolidated balance sheets, respectively. Our expected credit losses can vary from period to period based on several factors, such as changes in bond ratings, actual observed bond defaults, and overall economic environment. The primary factor that contributed to our provision for expected credit losses in the first quarter of 2020 was a pessimistic outlook of the macroeconomic environment due to the COVID-19 pandemic, and related effects on the financial performance of U.S.-based corporations. The increase in the allowance for credit losses of $0.3 million is attributed to Level 1 securities expected credit loss. There was no material change in the accounts receivable expected credit loss. Recently Issued Accounting Pronouncements In August 2018, the FASB issued ASU 2018-14 "Compensation — Retirement Benefits — Defined Benefit Plans — General (Topic 715-20): Disclosure Framework — Changes to the Disclosure Requirements for Defined Benefit Plans." This ASU amends ASC 715 to add, remove, and clarify disclosure requirements related to defined benefit pension and other postretirement plans. The new standard is effective for fiscal years ending after December 15, 2020. Although we are still evaluating the impact of this new standard, we do not believe that the adoption will materially impact our Condensed Consolidated Financial Statements and related disclosures. In December 2019, the FASB issued ASU 2019-12 "Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes." This ASU amends ASC 740 to add, remove, and clarify disclosure requirements related to income taxes. The new standard is effective for fiscal years ending after December 15, 2020. Although we are still evaluating the impact of this new standard, we do not believe that the adoption of this new standard will materially impact our Condensed Consolidated Financial Statements and related disclosures. In March 2020, the FASB issued ASU 2020-04 "Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting." The ASU is intended to provide temporary optional expedients and exceptions to the GAAP guidance on contract modifications and hedge accounting to ease the financial reporting burdens related to the expected market transition from the London Interbank Offered Rate (LIBOR) and other interbank offered rates to alternative reference rates. This guidance became effective beginning on March 12, 2020, and we may elect to apply the amendments prospectively until December 31, 2022. We are currently evaluating the impact this guidance may have on our Condensed Consolidated Financial Statements and related disclosures. |
Acquisitions
Acquisitions | 3 Months Ended |
Mar. 31, 2020 | |
Business Combinations [Abstract] | |
Acquisitions | Acquisitions Perstorp Holding AB's Caprolactone Business On February 13, 2019, we completed the acquisition of 100 percent of the equity of Perstorp UK Ltd with Perstorp Holding AB ("Seller"), including the Seller's entire caprolactone business ("Caprolactone Business"), herein referred to as the "Caprolactone Acquisition." The Caprolactone Acquisition was completed for an aggregate purchase price of €578.9 million ($652.5 million), less assumed debt of €100.4 million ($113.1 million). At closing, the assumed debt was settled with an affiliate of the Seller. The Caprolactone Acquisition has been integrated into our Performance Chemicals segment and included within our engineered polymers product line. The Caprolactone Acquisition contributed Net sales of $36.3 million and $24.2 million for the three months ended March 31, 2020 and 2019, respectively, to the consolidated operating results of Ingevity. A substantial portion of the Caprolactone Business was integrated into our existing Performance Chemicals operations during 2019. As a result, we were no longer able to separate operating performance of the Caprolactone Acquisition from our existing Performance Chemicals' operating results. Purchase Price Allocation The following table summarizes the consideration paid for the Caprolactone Business and the assets acquired and liabilities assumed, which was finalized in Q4 2019: Purchase Price Allocation In millions Weighted Average Amortization Period Fair Value Cash and cash equivalents $ 0.7 Accounts receivable 15.7 Inventories (1) 21.7 Prepaid and other current assets 1.9 Property, plant and equipment 86.3 Operating lease assets, net 1.8 Intangible assets (2) Customer relationships 17 years 159.0 Developed technology 12 years 64.8 Brands 17 years 67.0 Non-compete agreement 3 years 0.5 Goodwill 295.1 Other assets 1.3 Total fair value of assets acquired $ 715.8 Accounts payable 13.6 Accrued expenses 2.3 Long-term debt 113.1 Operating lease liabilities 1.7 Deferred income taxes 45.7 Total fair value of liabilities assumed $ 176.4 Cash and restricted cash acquired (3) 1.5 Total cash paid, less cash and restricted cash acquired $ 537.9 ______________ (1) Fair value of finished goods inventories acquired included a step-up in the value of approximately $8.4 million, all of which was expensed in the three months ended March 31, 2019. The expense is included in "Cost of sales" on the condensed consolidated statement of operations. Inventories are accounted for on a first-in, first-out basis of accounting. (2) The aggregate amortization expense was $4.8 million and $1.9 million for the three months ended March 31, 2020 and 2019, respectively. Estimated amortization expense is as follows: 2020 - $19.6 million, 2021 - $19.6 million, 2022 - $19.5 million, 2023 - $19.5 million, and 2024 - $19.5 million. The estimated pre-tax amortization expense may fluctuate due to changes in foreign currency. (3) Cash and cash equivalents and restricted cash were $0.7 million and $0.8 million, respectively, at closing. Restricted cash is included in "Prepaid and other current assets" on the consolidated balance sheet. Unaudited Pro Forma Financial Information The following unaudited pro forma results of operations assume that the Caprolactone Acquisition occurred at the beginning of the periods presented. These unaudited pro forma results are presented for informational purposes only and are not necessarily indicative of what the actual results of operations would have been if the acquisitions occurred at the beginning of the periods presented, nor are they indicative of future results of operations. The pro forma results include additional interest expense on the debt issued to finance the acquisition, amortization and depreciation expense based on the estimated fair value and useful lives of intangible assets and tangible assets, and related tax effects. The pro forma results presented below are adjusted for the removal of Acquisition and other-related costs for the three months ended March, 31 2019 of $31.2 million. Three Months Ended In millions March 31, 2019 Net sales $ 294.5 Income (loss) before income taxes 53.5 Diluted earnings (loss) per share $ 1.14 Acquisition and other-related costs Costs incurred to complete and integrate the Caprolactone Acquisition noted above into our Performance Chemicals segment are expensed as incurred on our condensed consolidated statement of operations. The following table summarizes such costs. Three Months Ended March 31, In millions 2020 2019 Legal and professional service fees $ 1.3 $ 10.1 Loss on hedging purchase price — 12.7 Acquisition-related costs $ 1.3 $ 22.8 Inventory fair value step-up amortization (1) — 8.4 Acquisition and other-related costs $ 1.3 $ 31.2 ______________ (1) Included within "Cost of sales" on the condensed consolidated statement of operations. |
Revenues
Revenues | 3 Months Ended |
Mar. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Revenues | Revenues Ingevity's operating segments are (i) Performance Materials and (ii) Performance Chemicals. A description of both operating segments is included in Note 1. Disaggregation of Revenue The following table presents our Net sales disaggregated by product line. Three Months Ended March 31, In millions 2020 2019 Automotive Technologies product line $ 112.9 $ 99.7 Process Purification product line 8.2 9.4 Performance Materials segment $ 121.1 $ 109.1 Oilfield Technologies product line 30.2 29.2 Pavement Technologies product line 20.7 18.5 Industrial Specialties product line 79.9 95.8 Engineered Polymers product line (1) 36.3 24.2 Performance Chemicals segment $ 167.1 $ 167.7 Net sales $ 288.2 $ 276.8 ______________ (1) Engineered Polymers product line was acquired on February 13, 2019; see Note 4 for more information. The following table presents our Net sales disaggregated by geography, based on the delivery address of our customer. Three Months Ended March 31, In millions 2020 2019 North America $ 171.1 $ 171.7 Asia Pacific 67.9 49.1 Europe, Middle East and Africa 43.4 51.2 South America 5.8 4.8 Net sales $ 288.2 $ 276.8 Contract Balances The following table provides information about contract assets and contract liabilities from contracts with customers. The contract assets primarily relate to our rights to consideration for products produced but not billed at the reporting date on contracts with certain customers. The contract assets are recognized as accounts receivables when the rights become unconditional and the customer has been billed. Contract liabilities represent obligations to transfer goods to a customer for which we have received consideration from our customer. For all periods presented we had no contract liabilities. Contract Asset (1) In millions March 31, 2020 March 31, 2019 Beginning balance $ 6.2 $ 5.1 Contract asset additions 4.6 4.7 Reclassification to accounts receivable, billed to customers (3.9) (4.5) Ending balance $ 6.9 $ 5.3 ______________ (1) Included within "Prepaid and other current assets" on the condensed consolidated balance sheet. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements Fair-Value Measurements We have categorized our assets and liabilities that are recorded at fair value, based on the priority of the inputs to the valuation technique, into a three-level fair-value hierarchy. The fair-value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). If the inputs used to measure the assets and liabilities fall within different levels of the hierarchy, the categorization is based on the lowest level input that is significant to the fair-value measurement of the instrument. The carrying value of our financial instruments: cash and cash equivalents, other receivables, other payables and accrued liabilities, approximate their fair values due to the short-term nature of these financial instruments. Recurring Fair-Value Measurements The following information is presented for assets and liabilities that are recorded in the condensed consolidated balance sheets at fair value measured on a recurring basis. There were no transfers of assets and liabilities that were recorded at fair value between Level 1 and Level 2 during the periods reported. There were no non-recurring fair value measurements in the condensed consolidated balance sheets as of March 31, 2020 or December 31, 2019. In millions Level 1 (1) Level 2 (2) Level 3 (3) Total March 31, 2020 Assets: Equity securities (4) $ 0.1 $ — $ — $ 0.1 Deferred compensation plan investments (5) 1.5 — — 1.5 Total assets $ 1.6 $ — $ — $ 1.6 Liabilities: Deferred compensation arrangement (5) $ 9.9 $ — $ — $ 9.9 Total liabilities $ 9.9 $ — $ — $ 9.9 December 31, 2019 Assets: Equity securities (4) $ 0.4 $ — $ — $ 0.4 Deferred compensation plan investments (5) 1.4 — — 1.4 Total assets $ 1.8 $ — $ — $ 1.8 Liabilities: Deferred compensation arrangement (5) $ 10.0 $ — $ — $ 10.0 Separation-related reimbursement awards (6) 0.1 — — 0.1 Total liabilities $ 10.1 $ — $ — $ 10.1 ______________ (1) Quoted prices in active markets for identical assets. (2) Quoted prices for similar assets and liabilities in active markets. (3) Significant unobservable inputs. (4) Included within "Prepaid and other current assets" on the condensed consolidated balance sheet. (5) Consists of a deferred compensation arrangement, through which we hold various investment securities, recognized on our balance sheets. Both the asset and liability are recorded at fair value, and are included within "Other assets" and "Other liabilities" on the condensed consolidated balance sheets, respectively. (6) Included within "Accrued expenses" on the condensed consolidated balance sheet. Equity Securities Our investments in equity securities with a readily determinable fair value totaled $0.1 million and $0.4 million at March 31, 2020 and December 31, 2019, respectively. The net realized gain/(loss) recognized during the three months ended March 31, 2020 and 2019 was $(0.1) million and zero, respectively. The unrealized gain/(loss) was zero for both the three months ended March 31, 2020 and 2019. The aggregate carrying value of investments in equity securities where fair value is not readily determinable totaled $0.2 million and $1.5 million as of March 31, 2020 and December 31, 2019, respectively, and is included in "Other assets" on the condensed consolidated balance sheet. During the three months ended March 31, 2020, we recorded an impairment charge of $1.3 million to an equity security where fair value is not readily determinable held within our Performance Materials segment. The charge was based on recently updated expected future cash flow projections for the investment. Restricted Investment At March 31, 2020, the book value of our restricted investment, which is accounted for as held to maturity ("HTM") and therefore held at amortized costs, was $72.2 million, which includes an allowance for credit losses of $0.9 million and cash of $0.8 million, and the fair value was $75.4 million, based on Level 1 inputs. The following table shows the total amortized cost of our HTM debt securities by credit rating. The primary factor in our expected credit loss calculation is the composite bond rating. As the rating decreases, the risk present in holding the bond is inherently increased, leading to an increase in expected credit losses. March 31, 2020 (in millions) AA+ AA A A- BBB+ Total Level 1 Securities $ 13.5 10.7 24.2 13.4 10.5 $ 72.3 Debt Obligations At March 31, 2020, the book value of finance lease obligations was $80.0 million and the fair value was $100.1 million. The fair value of our finance lease obligations is based on the period-end quoted market prices for the obligations, using Level 2 inputs. The carrying amount, excluding debt issuance fees, of our variable interest rate long-term debt was $1,115.9 million as of March 31, 2020. The carrying value is a reasonable estimate of the fair value of the outstanding debt based on the variable interest rate of the debt. |
Inventories, net
Inventories, net | 3 Months Ended |
Mar. 31, 2020 | |
Inventory Disclosure [Abstract] | |
Inventories, net | Inventories, net In millions March 31, 2020 December 31, 2019 Raw materials $ 44.2 $ 42.6 Production materials, stores and supplies 23.0 22.3 Finished and in-process goods 182.3 158.0 Subtotal 249.5 222.9 Less: adjustment of inventories to LIFO basis (13.3) (10.4) Inventories, net $ 236.2 $ 212.5 |
Property, Plant and Equipment,
Property, Plant and Equipment, net | 3 Months Ended |
Mar. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment, net | Property, Plant and Equipment, net In millions March 31, 2020 December 31, 2019 Machinery and equipment $ 977.0 $ 964.3 Buildings and leasehold improvements 122.2 116.9 Land and land improvements 19.2 19.0 Construction in progress 109.0 119.1 Total cost 1,227.4 1,219.3 Less: accumulated depreciation (567.7) (554.6) Property, plant and equipment, net (1) $ 659.7 $ 664.7 _______________ (1) This includes finance leases related to machinery and equipment at our Wickliffe, Kentucky facility of $68.8 million and $68.8 million, and net book value of $5.8 million and $6.0 million at March 31, 2020, and December 31, 2019, respectively. This also includes finance leases related to our Waynesboro, Georgia manufacturing facility for (a) machinery and equipment of $18.4 million and $18.4 million and net book value of $16.5 million and $16.8 million, (b) construction in progress of $8.3 million and $6.4 million and (c) buildings and leasehold improvements of $4.3 million and $4.2 million and net book value of $4.2 million and $4.20 million at March 31, 2020 and December 31, 2019, respectively. Amortization expense associated with these finance leases is included within depreciation expense. |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets, net | 3 Months Ended |
Mar. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets, net | Goodwill and Other Intangible Assets, net Goodwill Operating Segments In millions Performance Chemicals Performance Materials Total December 31, 2019 $ 432.1 $ 4.3 $ 436.4 Foreign currency translation (19.6) — (19.6) March 31, 2020 $ 412.5 $ 4.3 $ 416.8 There were no events or circumstances indicating that goodwill might be impaired as of March 31, 2020. Other Intangible Assets All of our other intangibles, net are related to the Performance Chemicals operating segment. The following table summarizes these assets: March 31, 2020 December 31, 2019 In millions Gross Accumulated amortization Net Gross Accumulated amortization Net Intangible assets subject to amortization Customer contracts and relationships $ 304.2 $ 56.4 $ 247.8 $ 314.5 $ 51.6 $ 262.9 Brands (1) 76.0 12.1 63.9 80.3 11.1 69.2 Developed technology 64.5 6.9 57.6 68.6 5.7 62.9 Other 2.7 1.7 1.0 2.7 1.5 1.2 Total Other intangibles, net $ 447.4 $ 77.1 $ 370.3 $ 466.1 $ 69.9 $ 396.2 _______________ (1) Represents trademarks, trade names and know-how. The amortization expense related to our intangible assets in the table above is shown in the table below. Three Months Ended March 31, In millions 2020 2019 Cost of sales $ 0.1 $ 0.2 Selling, general and administrative expenses 8.2 5.3 Total amortization expense (1) $ 8.3 $ 5.5 _______________ (1) See Note 4 for more information about the Caprolactone Acquisition, and the related increase in amortization expense. Based on the current carrying values of intangible assets, estimated pre-tax amortization expense for the next five years is as follows: 2020 - $25.8 million, 2021 - $24.9 million, 2022 - $24.7 million, 2023 - $24.6 million, and 2024 - $24.3 million. The estimated pre-tax amortization expense may fluctuate due to changes in foreign currency. |
Financial Instruments and Risk
Financial Instruments and Risk Management | 3 Months Ended |
Mar. 31, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Financial Instruments and Risk Management | Financial Instruments and Risk Management Net Investment Hedges Beginning in the second quarter of 2019, we have entered into fixed-to-fixed cross-currency interest rate swaps with an aggregate notional amount of $166.2 million and a maturity date of July 2023. We designated the swaps to hedge a portion of our net investment in a euro functional currency denominated subsidiary against foreign currency fluctuations. These contracts involve the exchange of fixed U.S. dollars with fixed euro interest payments periodically over the life of the contract and an exchange of the notional amount at maturity. This effectively converts a portion of our U.S. dollar denominated fixed-rate debt from a weighted average rate of 3.79 percent to a euro denominated weighted average fixed-rate debt at a rate of 1.35 percent. Any difference between the fixed interest rate between the U.S. dollar denominated debt to euro denominated debt is recorded as interest income on the condensed consolidated statements of operations. The fair value of the fixed-to-fixed cross currency interest rate swap was an asset (liability) of $10.4 million and $3.0 million at March 31, 2020 and December 31, 2019, respectively. During the three months ending March 31, 2020, we recognized net interest income associated with this financial instrument of $0.8 million. Cash Flow Hedges Foreign Currency Exchange Risk Management We manufacture and sell our products in several countries throughout the world and, thus, we are exposed to changes in foreign currency exchange rates. To manage the volatility relating to these exposures, we net the exposures on a consolidated basis to take advantage of natural offsets. To manage the remaining exposure, from time to time, we utilize forward currency exchange contracts and zero cost collar option contracts to minimize the volatility to earnings and cash flows resulting from the effect of fluctuating foreign currency exchange rates on export sales denominated in foreign currencies (principally the euro). These contracts are generally designated as cash flow hedges. Designated cash flow hedges entered to minimize foreign currency exchange risk of forecasted revenue transactions are recorded to "Net sales" on the consolidated statement of operations when the forecasted transaction occurs. As of March 31, 2020, there were $14.7 million open foreign currency derivative contracts. The fair value of the designated foreign currency hedge contracts was an asset (liability) of $0.3 million and zero at March 31, 2020 and December 31, 2019, respectively. Commodity Price Risk Management Certain energy sources used in our manufacturing operations are subject to price volatility caused by weather, supply and demand conditions, economic variables, and other unpredictable factors. This volatility is primarily related to the market pricing of natural gas. To mitigate expected fluctuations in market prices and the volatility to earnings and cash flow resulting from changes to pricing of natural gas purchases, from time to time, we will enter into swap contracts and zero cost collar option contracts and designate these contracts as cash flow hedges. As of March 31, 2020, we had 1.5 million and 0.1 million mmBTUS (millions of British Thermal Units) in aggregate notional volume of outstanding natural gas commodity swap contracts and zero cost collar option contracts, respectively. Designated commodity cash flow hedge gains or losses recorded in Accumulated other comprehensive income ("AOCI") are recognized in "Cost of sales" on the condensed consolidated statements of operations when the inventory is sold. As of March 31, 2020, open commodity contracts hedge forecasted transactions until September 2020. The fair value of the outstanding designated natural gas commodity hedge contracts as of both March 31, 2020 and December 31, 2019 was an asset (liability) of $(0.5) million. Interest Rate Risk Management Our policy is to manage interest expense using a mix of fixed and variable rate debt. To manage interest rate risk effectively, from time to time, we may enter into cash flow interest rate derivative instruments, which can consist of forward starting swaps and treasury locks. In all cases, the notional amount of the interest rate swap agreements is equal to or less than the designated debt being hedged. Designated interest rate cash flow hedge gains or losses recorded in AOCI are recognized in "Interest expense, net" on the condensed consolidated statements of operations on a straight-line basis over the remaining maturity of the underlying debt. These instruments are designated as cash flow hedges. As of March 31, 2020, we have entered into interest rate swaps with a notional amount of $166.2 million to manage the variability of cash flows in the interest rate payments associated with our existing LIBOR-based interest payments, effectively converting $166.2 million of our floating rate debt to a fixed rate. In accordance with the terms of this instrument, we receive floating rate interest payments based upon three-month U.S. dollar LIBOR and in return are obligated to pay interest at a weighted average fixed rate of 3.79 percent until July 2023. The fair value of the interest rate swap was an asset (liability) of $(10.0) million and $(3.9) million at March 31, 2020 and December 31, 2019, respectively. Effect of Cash Flow and Net Investment Hedge Accounting on AOCI In millions Amount of Gain (Loss) Recognized in AOCI Amount of Gain (Loss) Reclassified from AOCI into Net income Location of Gain (Loss) Reclassified from AOCI in Net income Three Months Ended March 31, 2020 2019 2020 2019 Cash flow hedging derivatives Currency exchange contracts $ 0.3 $ — $ — $ — Net sales Natural gas contracts (0.4) 0.1 (0.1) 0.5 Cost of sales Interest rate swap contracts (6.1) — — — Interest expense, net Total $ (6.2) $ 0.1 $ (0.1) $ 0.5 Amount of Gain (Loss) Recognized in AOCI Amount of Gain (Loss) Recognized in Income on Derivative Location of Gain or (Loss) Recognized in Income on Derivative Three Months Ended March 31, 2020 2019 2020 2019 Net investment hedging derivative Currency exchange contracts (1) $ 7.4 $ — $ 0.8 $ — Interest expense, net Total $ 7.4 $ — $ 0.8 $ — __________ (1) Reclassifications from AOCI to Net Income were zero for all periods presented. Gains and losses would be reclassified from AOCI to Other (income) expense, net. Within the next twelve months, we expect to reclassify $0.7 million of net losses from AOCI to income, before taxes. Fair-Value Measurements The following information is presented for derivative assets and liabilities that are recorded in the condensed consolidated balance sheets at fair value measured on a recurring basis. See Note 6 for more information on our fair value measurements. There were no transfers of assets and liabilities that are recorded at fair value between Level 1 and Level 2 during the periods reported. There were no non-recurring fair value measurements in the condensed consolidated balance sheets as of March 31, 2020 or December 31, 2019. In millions Level 1 (1) Level 2 (2) Level 3 (3) Total March 31, 2020 Assets: Currency exchange contracts (4) $ — $ 0.3 $ — $ 0.3 Net investment hedge (5) — 10.4 — 10.4 Total assets $ — $ 10.7 $ — 10.7 Liabilities: Natural gas contracts (6) $ — $ 0.5 $ — $ 0.5 Interest rate swap contracts (7) — 10.0 — 10.0 Total liabilities $ — $ 10.5 $ — $ 10.5 In millions Level 1 (1) Level 2 (2) Level 3 (3) Total December 31, 2019 Assets: Net investment hedge (5) $ — $ 3.0 $ — $ 3.0 Total assets $ — $ 3.0 $ — 3.0 Liabilities: Natural gas contracts (6) $ — $ 0.5 $ — $ 0.5 Interest rate swap contracts (7) — 3.9 — 3.9 Total liabilities $ — $ 4.4 $ — $ 4.4 __________ (1) Quoted prices in active markets for identical assets. (2) Quoted prices for similar assets and liabilities in active markets. (3) Significant unobservable inputs (4) Included within "Prepaid and other current assets" on the condensed consolidated balance sheet. (5) Included within "Other assets" on the condensed consolidated balance sheet. (6) Included within "Accrued expenses" on the condensed consolidated balance sheet. (7) Included within "Other liabilities" on the condensed consolidated balance sheet. |
Debt including Finance Lease Ob
Debt including Finance Lease Obligations | 3 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
Debt including Finance Lease Obligations | Debt including Finance Lease Obligations Current and long-term debt including finance lease obligations consisted of the following: March 31, 2020 In millions, except percentages Interest rate Maturity date March 31, 2020 December 31, 2019 Revolving Credit Facility (1) 2.36% 2023 $ 375.0 $ 131.3 Term Loans 2.62% 2022-2023 735.9 740.6 Senior Notes 4.50% 2026 300.0 300.0 Finance lease obligations 7.67% 2027 80.0 80.0 Other 4.95% 2020-2021 5.0 5.9 Total debt including finance lease obligations 1,495.9 1,257.8 Less: debt issuance costs 6.5 6.9 Total debt including finance lease obligations, net of debt issuance costs 1,489.4 1,250.9 Less: debt maturing within one year (2) 21.6 22.5 Long-term debt including finance lease obligations $ 1,467.8 $ 1,228.4 ______________ (1) Letters of credit outstanding under the revolving credit facility were $2.1 million and undrawn capacity under the facility was $372.9 million at March 31, 2020. (2) Debt maturing within one year is included in "Notes payable and current maturities of long-term debt" on the condensed consolidated balance sheets. Debt Covenants Our 4.50 percent senior unsecured notes due in 2026 (the "Senior Notes") contain certain customary covenants (including covenants limiting Ingevity's and its restricted subsidiaries’ ability to grant or permit liens on certain property securing debt, declare or pay dividends, make distributions on or repurchase or redeem capital stock, make investments in unrestricted subsidiaries, engage in sale and lease-back transactions, and engage in a consolidation or merger, or sell, transfer or otherwise dispose of all or substantially all of the assets of our and our restricted subsidiaries, taken as a whole) and events of default (subject in certain cases to customary exceptions, as well as grace and cure periods). The occurrence of an event of default under the Senior Notes could result in the acceleration of the Senior Notes and could cause a cross-default that could result in the acceleration of other indebtedness of Ingevity and its subsidiaries. The revolving credit facility and term loans contain customary default provisions, including defaults for non-payment, breach of representations and warranties, insolvency, non-compliance with covenants and cross-defaults to other material indebtedness. The occurrence of an uncured event of default under the revolving credit facility and term loans could result in all loans and other obligations becoming immediately due and payable and the facilities being terminated. The revolving credit facility and term loans' financial covenants require Ingevity to maintain on a consolidated basis a maximum total leverage ratio of 4.0 to 1.0 (which may be increased to 4.5 to 1.0 under certain circumstances) and a minimum interest coverage ratio of 3.0 to 1.0. Our actual leverage for the four consecutive quarters ended March 31, 2020 was 3.5, and our actual interest coverage for the four consecutive quarters ended March 31, 2020 was 8.1. We were in compliance with all covenants at March 31, 2020. |
Equity
Equity | 3 Months Ended |
Mar. 31, 2020 | |
Equity [Abstract] | |
Equity | Equity The tables below provide a roll forward of equity. Common Stock In millions, except per share data in thousands Shares Amount Additional paid in capital Retained earnings Accumulated Treasury stock Total Equity Balance at December 31, 2019 42,675 $ 0.4 $ 112.8 $ 497.2 $ (5.0) $ (74.6) $ 530.8 Net income (loss) — — — 45.3 — — 45.3 Other comprehensive income (loss) — — — — (39.1) — (39.1) Common stock issued 161 — — — — — — Exercise of stock options, net — — — — — — — Tax payments related to vested restricted stock units — — — — — (3.1) (3.1) Share repurchase program — — — — — (32.4) (32.4) Share-based compensation plans — — 0.8 — — 0.4 1.2 Adoption of accounting standard — — — (0.6) — — (0.6) Balance at March 31, 2020 42,836 $ 0.4 $ 113.6 $ 541.9 $ (44.1) $ (109.7) $ 502.1 Common Stock In millions, except per share data in thousands Shares Amount Additional paid in capital Retained earnings Accumulated Treasury stock Total Equity Balance at December 31, 2018 42,332 $ 0.4 $ 98.3 $ 313.5 $ (17.7) $ (55.8) $ 338.7 Net income (loss) — — — 22.7 — — 22.7 Other comprehensive income (loss) — — — — 9.1 — 9.1 Common stock issued 276 — — — — — — Exercise of stock options, net 51 — 1.4 — — — 1.4 Tax payments related to vested restricted stock units — — — — — (14.3) (14.3) Share repurchase program — — — — — (3.3) (3.3) Share-based compensation plans — — 4.1 — — 0.3 4.4 Balance at March 31, 2019 42,659 $ 0.4 $ 103.8 $ 336.2 $ (8.6) $ (73.1) $ 358.7 Accumulated other comprehensive income (loss) Three Months ended March 31, In millions 2020 2019 Foreign currency translation Beginning Balance $ 1.5 $ (16.4) Gains (losses) on foreign currency translation (40.1) 9.4 Less: tax provision (benefit) — — Net gains (losses) on foreign currency translation (40.1) 9.4 Gains (losses) on net investment hedges 7.4 — Less: tax provision (benefit) 1.7 — Net gains (losses) on net investment hedges 5.7 — Other comprehensive income (loss), net of tax (34.4) 9.4 Ending Balance $ (32.9) $ (7.0) Derivative Instruments Beginning Balance $ (3.5) $ 0.4 Gains (losses) on derivative instruments (6.2) 0.1 Less: tax provision (benefit) (1.4) — Net gains (losses) on derivative instruments (4.8) 0.1 (Gains) losses reclassified to net income 0.1 (0.5) Less: tax (provision) benefit — (0.1) Net (gains) losses reclassified to net income 0.1 (0.4) Other comprehensive income (loss), net of tax (4.7) (0.3) Ending Balance $ (8.2) $ 0.1 Pension and other postretirement benefits Beginning Balance $ (3.0) $ (1.7) Unrealized actuarial gains (losses) and prior service (costs) credits — — Less: tax provision (benefit) — — Net actuarial gains (losses) and prior service (costs) credits — — Actuarial and other (gains) losses, amortization of prior service cost (credits), and settlement and curtailment (income) charge reclassified to net income — — Less: tax (provision) benefit — — Net actuarial and other (gains) losses, amortization of prior service cost (credits), and settlement and curtailment (income) charge reclassified to net income — — Other comprehensive income (loss), net of tax — — Ending Balance $ (3.0) $ (1.7) Total AOCI ending balance at March 31 $ (44.1) $ (8.6) Reclassifications of accumulated other comprehensive income (loss) Three Months Ended March 31, In millions 2020 2019 Derivative instruments Currency exchange contracts (1) $ — $ — Natural gas contracts (2) (0.1) 0.5 Total before tax (0.1) 0.5 (Provision) benefit for income taxes — (0.1) Amount included in net income (loss) $ (0.1) $ 0.4 Pension and other post retirement benefits Amortization of unrecognized net actuarial and other gains (losses) (3) — — Total before tax — — (Provision) benefit for income taxes — — Amount included in net income (loss) $ — $ — ______________ (1) Included within "Net sales" on the condensed consolidated statement of operations. (2) Included within "Cost of sales" on the condensed consolidated statement of operations. (3) Included within "Other (income) expense, net" on the condensed consolidated statement of operations. Share Repurchases On February 28, 2020, our Board of Directors authorized the repurchase of up to $500.0 million of our common stock, and rescinded the prior two authorizations from 2017 and 2018 of $100.0 million and $350.0 million each, respectively. The repurchase program does not include a specific timetable or price targets and may be suspended or terminated at any time. Shares may be purchased through open market or privately negotiated transactions at the discretion of management based on its evaluation of market prevailing conditions and other factors. During the three months ended March 31, 2020, 750,000 shares of our common stock were repurchased for $32.4 million. At March 31, 2020, $467.6 million remained unused under our Board-authorized repurchase program. We record shares of common stock repurchased at cost as treasury stock, resulting in a reduction of stockholders’ equity in the condensed consolidated balance sheets. When the treasury shares are contributed under our employee benefit plans or issued for option exercises, we use a first-in, first-out method for determining cost. The difference between the cost of the shares and the market price at the time of contribution to an employee benefit plan is added to or deducted from the related capital in excess of par value of common stock. |
Retirement Plans
Retirement Plans | 3 Months Ended |
Mar. 31, 2020 | |
Postemployment Benefits [Abstract] | |
Retirement Plans | Retirement Plans The following table summarizes the components of net periodic benefit cost (income) for our defined benefit pension plans: Three Months Ended March 31, Pensions Other Benefits In millions 2020 2019 2020 2019 Components of net periodic benefit cost (income): Service cost (1) $ 0.4 $ 0.3 $ — $ — Interest cost (2) 0.3 0.3 — — Expected return on plan assets (2) (0.3) (0.3) — — Amortization of net actuarial and other (gain) loss (2) — — — — Net periodic benefit cost (income) $ 0.4 $ 0.3 $ — $ — _______________ (1) Amounts are recorded to "Cost of sales" on our condensed consolidated statements of operations consistent with the employee compensation costs that participate in the plan. (2) Amounts are recorded to "Other (income) expense, net" on our condensed consolidated statements of operations. Contributions We did not make any voluntary cash contributions to our Union Hourly defined benefit pension plan in the three months ended March 31, 2020. There are no required cash contributions to our Union Hourly defined benefit pension plan in 2020, and we currently have no plans to make any voluntary cash contributions in 2020. |
Restructuring and Other (Income
Restructuring and Other (Income) Charges, net | 3 Months Ended |
Mar. 31, 2020 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Other (Income) Charges, net | Restructuring and Other (Income) Charges, netWe continually perform strategic reviews and assess the return on our operations which sometimes results in a plan to restructure the business. The cost and benefit of these strategic restructuring initiatives are recorded as restructuring and other (income) charges, net in our condensed consolidated statements of operations. These costs are excluded from our operating segment results. Detail on the restructuring charges and other (income) charges, net, is provided below. Three Months Ended March 31, In millions 2020 2019 Severance and other employee-related costs 0.2 — Restructuring charges 0.2 — Business transformation costs 0.3 — Other (income) charges, net 0.3 — Total restructuring and other (income) charges, net $ 0.5 $ — Restructuring charges 2019-2020 activities During the third quarter of 2019, we initiated a reorganization as part of an effort to improve our Performance Chemical’s workflow and efficiency to best serve our customers’ needs and reduce costs. As a result of this reorganization, we recorded $0.2 million in severance and other employee-related costs in the three months ended March 31, 2020. Rollforward of Restructuring Reserves The following table shows a roll forward of restructuring reserves that will result in cash spending. Balance at Change in Cash Balance at In millions 12/31/2019 (1) Reserve (2) Payments Other 3/31/2020 (1) Restructuring Reserves $ 0.4 0.2 (0.6) — $ — _______________ (1) Included in "Accrued Expenses" on the condensed consolidated balance sheets. (2) Includes severance and other employee-related costs. |
Income taxes
Income taxes | 3 Months Ended |
Mar. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The effective tax rates, including discrete items, were as follows: Three Months Ended March 31, 2020 2019 Effective tax rate 17.9 % — % We determine our interim tax provision using an Estimated Annual Effective Tax Rate methodology (“EAETR”). The EAETR is applied to the year-to-date ordinary income, exclusive of discrete items. The tax effects of discrete items are then included to arrive at the total reported interim tax provision. The determination of the EAETR is based upon a number of estimates, including the estimated annual pre-tax ordinary income in each tax jurisdiction in which we operate. As our projections of ordinary income change throughout the year, the EAETR will change period-to-period. The tax effects of discrete items are recognized in the tax provision in the period they occur. Depending on various factors, such as the item’s significance in relation to total income and the rate of tax applicable in the jurisdiction to which it relates, discrete items in any quarter may materially impact the reported effective tax rate. As a global enterprise, our tax expense may be impacted by changes in tax rates or laws, the finalization of tax audits and reviews, as well as other factors. As such, there may be significant volatility in interim tax provisions. The below table provides a reconciliation between our reported effective tax rates and the EAETR. Three Months Ended March 31, 2020 2019 In millions, except percentages Before tax Tax Effective tax rate % impact Before tax Tax Effective tax rate % impact Consolidated operations $ 55.2 $ 9.9 17.9 % $ 22.7 $ — — % Discrete items: Restructuring and other (income) charges, net 0.5 0.1 — — Acquisition and other-related costs (1) 1.3 0.3 31.2 5.3 Other tax only discrete items — 1.3 — 6.7 Total discrete items 1.8 1.7 31.2 12.0 Consolidated operations, before discrete items $ 57.0 $ 11.6 $ 53.9 $ 12.0 Quarterly effect of changes in the EAETR (2) 20.4 % 22.3 % _______________ (1) See Note 4 for more information on our acquisition and other-related costs. (2) Decrease in EAETR for the three months ended March 31, 2020, as compared to March 31, 2019, is due to a change in the mix of forecasted earnings in various tax jurisdictions with varying rates, offset by a large reduction in acquisition related costs and excess stock compensation benefit. At March 31, 2020 and December 31, 2019, we had deferred tax assets of $10.2 million and $13.0 million, respectively, resulting from certain historical net operating losses from our Brazilian operations and U.S. state tax credits for which a valuation allowance has been established. The ultimate realization of these deferred tax assets depends on the generation of future taxable income during the periods in which these net operating losses and tax credits are available to be used. In evaluating the realizability of these deferred tax assets, we consider projected future taxable income and tax planning strategies in making our assessment. As of March 31, 2020, we cannot objectively assert that these deferred tax assets are more likely than not to be realized and therefore we have maintained a valuation allowance. We intend to continue maintaining a valuation allowance on these deferred tax assets until there is sufficient evidence to support the reversal of all or some portion of these allowances. A release of all or a portion of the valuation allowance could be possible, if we determine that sufficient positive evidence becomes available to allow us to reach a conclusion that the valuation allowance will no longer be needed. A release of the valuation allowance would result in the recognition of certain deferred tax assets and a reduction to income tax expense for the period the release is recorded. However, the exact timing and amount of the valuation allowance release are subject to change based on the level of profitability that we are able to actually achieve. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and contingencies | Commitments and Contingencies Legal Proceedings We are from time to time, involved in routine litigation and other legal matters incidental to our operations. None of the litigation or other legal matters in which we are currently involved, individually or in the aggregate, is material to our consolidated financial condition, liquidity, or results of operations nor are we aware of any material pending or contemplated proceedings. |
Segment information
Segment information | 3 Months Ended |
Mar. 31, 2020 | |
Segment Reporting [Abstract] | |
Segment information | Segment Information Three Months Ended March 31, In millions 2020 2019 Net sales Performance Materials $ 121.1 $ 109.1 Performance Chemicals 167.1 167.7 Total net sales (1) $ 288.2 $ 276.8 Segment EBITDA (2) Performance Materials $ 61.2 $ 51.2 Performance Chemicals 31.0 32.3 Total segment EBITDA (2) $ 92.2 $ 83.5 Interest expense, net (10.9) (11.1) (Provision) benefit for income taxes (9.9) — Depreciation and amortization - Performance Materials (7.2) (5.8) Depreciation and amortization - Performance Chemicals (17.1) (12.7) Restructuring and other income (charges), net (3) (0.5) — Acquisition and other-related costs (4) (1.3) (31.2) Net income (loss) $ 45.3 $ 22.7 _______________ (1) Relates to external customers only, all intersegment sales and related profit have been eliminated in consolidation. (2) Segment EBITDA is the primary measure used by our chief operating decision maker to evaluate the performance of and allocate resources among our operating segments. Segment EBITDA is defined as segment revenue less segment operating expenses (segment operating expenses consist of costs of sales, selling, general and administrative expenses, other (income) expense, net, excluding depreciation and amortization). We have excluded the following items from segment EBITDA: interest expense, net, associated with corporate debt facilities, income taxes, depreciation, amortization, restructuring and other (income) charges, net, acquisition and other-related costs, pension and postretirement settlement and curtailment (income) charge. (3) Income (charges) for all periods presented relate to restructuring activity in our Performance Chemicals segment and costs associated with the business transformation initiative. For more detail on the charges incurred see Note 14 within these Condensed Consolidated Financial Statements. (4) Charges associated with the acquisition and integration of the Caprolactone Business. For more detail on the charges incurred see Note 4 within these Condensed Consolidated Financial Statements. |
Earnings (Loss) per Share
Earnings (Loss) per Share | 3 Months Ended |
Mar. 31, 2020 | |
Earnings Per Share [Abstract] | |
Earnings (loss) per share | Earnings (Loss) per ShareBasic earnings (loss) per share is computed by dividing net income (loss) for the period by the weighted average number of common shares outstanding during the period. Diluted earnings (loss) per share is computed by dividing net income (loss) for the period by the weighted average number of common shares and potentially dilutive common shares outstanding for the period. The calculation of diluted net income per share excludes all antidilutive common shares. Three Months Ended March 31, In millions, except share and per share data 2020 2019 Net income (loss) $ 45.3 $ 22.7 Basic and Diluted earnings (loss) per share Basic earnings (loss) per share $ 1.09 $ 0.54 Diluted earnings (loss) per share 1.08 0.54 Shares (in thousands) Weighted average number of common shares outstanding - Basic 41,692 41,695 Weighted average additional shares assuming conversion of potential common shares 270 542 Shares - diluted basis 41,962 42,237 The following average number of potential common shares were antidilutive, and therefore, were not included in the diluted earnings per share calculation: Three Months Ended March 31, In thousands 2020 2019 Average number of potential common shares - antidilutive 210 52 |
New Accounting Guidance (Polici
New Accounting Guidance (Policies) | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation These unaudited Condensed Consolidated Financial Statements reflect the consolidated operations of the Company and have been prepared in accordance with United States Securities and Exchange Commission ("SEC") interim reporting requirements. Accordingly, the accompanying Condensed Consolidated Financial Statements do not include all disclosures required by accounting principles generally accepted in the United States of America ("GAAP") for full financial statements and should be read in conjunction with the Annual Consolidated Financial Statements for the years ended December 31, 2019, 2018 and 2017, collectively referred to as the “Annual Consolidated Financial Statements” included in our Annual Report on Form 10-K for the year ended December 31, 2019 (the "2019 Annual Report"). In the opinion of management, the Condensed Consolidated Financial Statements contain all adjustments, which include only normal recurring adjustments, necessary to fairly state the condensed consolidated results for the interim periods presented. The consolidated results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. The preparation of the condensed consolidated financial statements requires management to make estimates and assumptions with respect to the reported amounts of assets, liabilities, revenue and expenses and the disclosure of contingent assets and liabilities. Actual results could differ from these estimates. During the three months ended March 31, 2020 and subsequent to this date, there have been significant changes to the global economic situation and to public securities markets as a consequence of the novel strain of coronavirus ("COVID-19") pandemic. It is reasonably possible that this could cause changes to estimates as a result of the financial circumstances of the markets in which we operate, the price of our publicly traded equity in comparison to the carrying value, and the health of the global economy. Such changes to estimates could potentially result in impacts that would be material to the condensed consolidated financial statements. While there was not a material impact to our condensed consolidated financial statements as of and for the quarter ended March 31, 2020, our future assessment of the magnitude and duration of COVID-19, as well as other factors, could result in material impacts to our consolidated financial statements in future reporting periods. Certain prior year amounts have been reclassified to conform with the current year's presentation. |
New accounting guidance | New Accounting Guidance The Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC" or "Codification") is the sole source of authoritative GAAP other than SEC issued rules and regulations that apply only to SEC registrants. The FASB issues an Accounting Standards Update ("ASU") to communicate changes to the Codification. We consider the applicability and impact of all ASUs. ASUs not listed below were assessed and determined to be either not applicable or are not expected to have a material impact on the consolidated financial statements. Recently Adopted Accounting Pronouncements In August 2018, the FASB issued ASU 2018-15 "Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40) Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract." This ASU requires companies to defer specific implementation costs incurred in a Cloud Computing Arrangement ("CCA") that are often expensed as incurred under current GAAP, and recognize the expense over the noncancellable term of the CCA. We adopted this standard on a prospective basis on January 1, 2020. As a result of the adoption, we anticipate capitalizing certain implementation costs that were previously expensed as incurred, which will be recorded to either prepaid and other current assets or other assets on the condensed consolidated balance sheets, depending on the duration of the agreement. The impact of the adoption did not have a material impact on our Condensed Consolidated Financial Statements and related disclosures. In June 2016, the FASB issued ASU 2016-13 “Financial Instruments – Credit losses: Measurement of Credit Losses on Financial Instruments." In 2019 and 2020, the FASB issued several ASUs to amend and clarify the credit loss guidance in the original ASU 2016-13 (ASU 2016-13 and its amendments are herein referred to as “ASC 326” or "CECL"). ASC 326 amends FASB's guidance on the impairment of financial instruments, specifically adding an impairment model to GAAP that is based on expected losses, rather than incurred losses, which is intended to result in more timely recognition of such losses. We adopted this standard on January 1, 2020. We have updated our internal controls and operational processes and procedures, to include certain forward-looking considerations in our current process of developing and recognizing credit losses for our accounts receivable and restricted investment accounted for at amortized cost. Generally, the adoption of ASC 326 did not have a material impact on our condensed consolidated balance sheet, results of operations or cash flows. ASC 326 had an immaterial impact to our allowance for credit losses reported in accounts receivable on our condensed consolidated balance sheet upon adoption. Additionally, upon adoption of ASC 326, we estimated an allowance for credit losses for our restricted investment on our condensed consolidated balance sheet. Our restricted investment, which is accounted for as a held-to-maturity investment, consists of highly rated corporate long-term bonds that mature in 2025 and 2026. To calculate our expected credit loss allowance, we utilized a probability-of-default method (“PDM”) for each bond based on each securities term. This process uses historical credit loss experience on similar product types, adjusted for reasonable and supportable forecasts of future default rates. Using a PDM, we calculated an expected credit loss allowance at January 1, 2020 of $0.6 million, which was recorded as an adjustment to the opening balance of retained earnings. The following table displays changes in our allowance for credit losses as of March 31, 2020, including the transition impact of adopting the CECL standard. (in millions) Balance at December 31, 2019 (1) Impact from Adoption of ASC 326 Balance at January 1, 2020 Current Period Provision Balance at March 31, 2020 (2) Allowance for credit losses $ 0.5 0.6 1.1 0.3 $ 1.4 ______________ (1) The allowance for credit losses at December 31, 2019 of $0.5 million was included in "Accounts receivable, net" on the condensed consolidated balance sheets. (2) The allowance for credit losses at March 31, 2020 of $0.5 million and $0.9 million was included "Accounts receivable, net" and "Restricted investment" on the condensed consolidated balance sheets, respectively. Our expected credit losses can vary from period to period based on several factors, such as changes in bond ratings, actual observed bond defaults, and overall economic environment. The primary factor that contributed to our provision for expected credit losses in the first quarter of 2020 was a pessimistic outlook of the macroeconomic environment due to the COVID-19 pandemic, and related effects on the financial performance of U.S.-based corporations. The increase in the allowance for credit losses of $0.3 million is attributed to Level 1 securities expected credit loss. There was no material change in the accounts receivable expected credit loss. Recently Issued Accounting Pronouncements In August 2018, the FASB issued ASU 2018-14 "Compensation — Retirement Benefits — Defined Benefit Plans — General (Topic 715-20): Disclosure Framework — Changes to the Disclosure Requirements for Defined Benefit Plans." This ASU amends ASC 715 to add, remove, and clarify disclosure requirements related to defined benefit pension and other postretirement plans. The new standard is effective for fiscal years ending after December 15, 2020. Although we are still evaluating the impact of this new standard, we do not believe that the adoption will materially impact our Condensed Consolidated Financial Statements and related disclosures. In December 2019, the FASB issued ASU 2019-12 "Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes." This ASU amends ASC 740 to add, remove, and clarify disclosure requirements related to income taxes. The new standard is effective for fiscal years ending after December 15, 2020. Although we are still evaluating the impact of this new standard, we do not believe that the adoption of this new standard will materially impact our Condensed Consolidated Financial Statements and related disclosures. In March 2020, the FASB issued ASU 2020-04 "Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting." The ASU is intended to provide temporary optional expedients and exceptions to the GAAP guidance on contract modifications and hedge accounting to ease the financial reporting burdens related to the expected market transition from the London Interbank Offered Rate (LIBOR) and other interbank offered rates to alternative reference rates. This guidance became effective beginning on March 12, 2020, and we may elect to apply the amendments prospectively until December 31, 2022. We are currently evaluating the impact this guidance may have on our Condensed Consolidated Financial Statements and related disclosures. |
Income tax | We determine our interim tax provision using an Estimated Annual Effective Tax Rate methodology (“EAETR”). The EAETR is applied to the year-to-date ordinary income, exclusive of discrete items. The tax effects of discrete items are then included to arrive at the total reported interim tax provision. The determination of the EAETR is based upon a number of estimates, including the estimated annual pre-tax ordinary income in each tax jurisdiction in which we operate. As our projections of ordinary income change throughout the year, the EAETR will change period-to-period. The tax effects of discrete items are recognized in the tax provision in the period they occur. Depending on various factors, such as the item’s significance in relation to total income and the rate of tax applicable in the jurisdiction to which it relates, discrete items in any quarter may materially impact the reported effective tax rate. As a global enterprise, our tax expense may be impacted by changes in tax rates or laws, the finalization of tax audits and reviews, as well as other factors. As such, there may be significant volatility in interim tax provisions. |
New Accounting Guidance (Tables
New Accounting Guidance (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Financing Receivable, Allowance for Credit Loss | The following table displays changes in our allowance for credit losses as of March 31, 2020, including the transition impact of adopting the CECL standard. (in millions) Balance at December 31, 2019 (1) Impact from Adoption of ASC 326 Balance at January 1, 2020 Current Period Provision Balance at March 31, 2020 (2) Allowance for credit losses $ 0.5 0.6 1.1 0.3 $ 1.4 ______________ (1) The allowance for credit losses at December 31, 2019 of $0.5 million was included in "Accounts receivable, net" on the condensed consolidated balance sheets. |
Acquisitions (Tables)
Acquisitions (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Business Combinations [Abstract] | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The following table summarizes the consideration paid for the Caprolactone Business and the assets acquired and liabilities assumed, which was finalized in Q4 2019: Purchase Price Allocation In millions Weighted Average Amortization Period Fair Value Cash and cash equivalents $ 0.7 Accounts receivable 15.7 Inventories (1) 21.7 Prepaid and other current assets 1.9 Property, plant and equipment 86.3 Operating lease assets, net 1.8 Intangible assets (2) Customer relationships 17 years 159.0 Developed technology 12 years 64.8 Brands 17 years 67.0 Non-compete agreement 3 years 0.5 Goodwill 295.1 Other assets 1.3 Total fair value of assets acquired $ 715.8 Accounts payable 13.6 Accrued expenses 2.3 Long-term debt 113.1 Operating lease liabilities 1.7 Deferred income taxes 45.7 Total fair value of liabilities assumed $ 176.4 Cash and restricted cash acquired (3) 1.5 Total cash paid, less cash and restricted cash acquired $ 537.9 ______________ (1) Fair value of finished goods inventories acquired included a step-up in the value of approximately $8.4 million, all of which was expensed in the three months ended March 31, 2019. The expense is included in "Cost of sales" on the condensed consolidated statement of operations. Inventories are accounted for on a first-in, first-out basis of accounting. (2) The aggregate amortization expense was $4.8 million and $1.9 million for the three months ended March 31, 2020 and 2019, respectively. Estimated amortization expense is as follows: 2020 - $19.6 million, 2021 - $19.6 million, 2022 - $19.5 million, 2023 - $19.5 million, and 2024 - $19.5 million. The estimated pre-tax amortization expense may fluctuate due to changes in foreign currency. (3) Cash and cash equivalents and restricted cash were $0.7 million and $0.8 million, respectively, at closing. Restricted cash is included in "Prepaid and other current assets" on the consolidated balance sheet. |
Business Acquisition, Pro Forma Information | The pro forma results presented below are adjusted for the removal of Acquisition and other-related costs for the three months ended March, 31 2019 of $31.2 million. Three Months Ended In millions March 31, 2019 Net sales $ 294.5 Income (loss) before income taxes 53.5 Diluted earnings (loss) per share $ 1.14 |
Restructuring and Related Costs | The following table summarizes such costs. Three Months Ended March 31, In millions 2020 2019 Legal and professional service fees $ 1.3 $ 10.1 Loss on hedging purchase price — 12.7 Acquisition-related costs $ 1.3 $ 22.8 Inventory fair value step-up amortization (1) — 8.4 Acquisition and other-related costs $ 1.3 $ 31.2 ______________ (1) Included within "Cost of sales" on the condensed consolidated statement of operations. |
Revenues (Tables)
Revenues (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | The following table presents our Net sales disaggregated by product line. Three Months Ended March 31, In millions 2020 2019 Automotive Technologies product line $ 112.9 $ 99.7 Process Purification product line 8.2 9.4 Performance Materials segment $ 121.1 $ 109.1 Oilfield Technologies product line 30.2 29.2 Pavement Technologies product line 20.7 18.5 Industrial Specialties product line 79.9 95.8 Engineered Polymers product line (1) 36.3 24.2 Performance Chemicals segment $ 167.1 $ 167.7 Net sales $ 288.2 $ 276.8 ______________ (1) Engineered Polymers product line was acquired on February 13, 2019; see Note 4 for more information. The following table presents our Net sales disaggregated by geography, based on the delivery address of our customer. Three Months Ended March 31, In millions 2020 2019 North America $ 171.1 $ 171.7 Asia Pacific 67.9 49.1 Europe, Middle East and Africa 43.4 51.2 South America 5.8 4.8 Net sales $ 288.2 $ 276.8 |
Contract with Customer, Asset and Liability | The following table provides information about contract assets and contract liabilities from contracts with customers. The contract assets primarily relate to our rights to consideration for products produced but not billed at the reporting date on contracts with certain customers. The contract assets are recognized as accounts receivables when the rights become unconditional and the customer has been billed. Contract liabilities represent obligations to transfer goods to a customer for which we have received consideration from our customer. For all periods presented we had no contract liabilities. Contract Asset (1) In millions March 31, 2020 March 31, 2019 Beginning balance $ 6.2 $ 5.1 Contract asset additions 4.6 4.7 Reclassification to accounts receivable, billed to customers (3.9) (4.5) Ending balance $ 6.9 $ 5.3 ______________ (1) Included within "Prepaid and other current assets" on the condensed consolidated balance sheet. |
Fair Value Measures and Disclos
Fair Value Measures and Disclosures (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements, Recurring | The following information is presented for assets and liabilities that are recorded in the condensed consolidated balance sheets at fair value measured on a recurring basis. There were no transfers of assets and liabilities that were recorded at fair value between Level 1 and Level 2 during the periods reported. There were no non-recurring fair value measurements in the condensed consolidated balance sheets as of March 31, 2020 or December 31, 2019. In millions Level 1 (1) Level 2 (2) Level 3 (3) Total March 31, 2020 Assets: Equity securities (4) $ 0.1 $ — $ — $ 0.1 Deferred compensation plan investments (5) 1.5 — — 1.5 Total assets $ 1.6 $ — $ — $ 1.6 Liabilities: Deferred compensation arrangement (5) $ 9.9 $ — $ — $ 9.9 Total liabilities $ 9.9 $ — $ — $ 9.9 December 31, 2019 Assets: Equity securities (4) $ 0.4 $ — $ — $ 0.4 Deferred compensation plan investments (5) 1.4 — — 1.4 Total assets $ 1.8 $ — $ — $ 1.8 Liabilities: Deferred compensation arrangement (5) $ 10.0 $ — $ — $ 10.0 Separation-related reimbursement awards (6) 0.1 — — 0.1 Total liabilities $ 10.1 $ — $ — $ 10.1 ______________ (1) Quoted prices in active markets for identical assets. (2) Quoted prices for similar assets and liabilities in active markets. (3) Significant unobservable inputs. (4) Included within "Prepaid and other current assets" on the condensed consolidated balance sheet. (5) Consists of a deferred compensation arrangement, through which we hold various investment securities, recognized on our balance sheets. Both the asset and liability are recorded at fair value, and are included within "Other assets" and "Other liabilities" on the condensed consolidated balance sheets, respectively. (6) Included within "Accrued expenses" on the condensed consolidated balance sheet. |
Debt Securities, Held-to-maturity, Credit Quality Indicator | The following table shows the total amortized cost of our HTM debt securities by credit rating. The primary factor in our expected credit loss calculation is the composite bond rating. As the rating decreases, the risk present in holding the bond is inherently increased, leading to an increase in expected credit losses. March 31, 2020 (in millions) AA+ AA A A- BBB+ Total Level 1 Securities $ 13.5 10.7 24.2 13.4 10.5 $ 72.3 |
Inventories, net (Tables)
Inventories, net (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory | In millions March 31, 2020 December 31, 2019 Raw materials $ 44.2 $ 42.6 Production materials, stores and supplies 23.0 22.3 Finished and in-process goods 182.3 158.0 Subtotal 249.5 222.9 Less: adjustment of inventories to LIFO basis (13.3) (10.4) Inventories, net $ 236.2 $ 212.5 |
Property, Plant and Equipment_2
Property, Plant and Equipment, net (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | In millions March 31, 2020 December 31, 2019 Machinery and equipment $ 977.0 $ 964.3 Buildings and leasehold improvements 122.2 116.9 Land and land improvements 19.2 19.0 Construction in progress 109.0 119.1 Total cost 1,227.4 1,219.3 Less: accumulated depreciation (567.7) (554.6) Property, plant and equipment, net (1) $ 659.7 $ 664.7 _______________ (1) This includes finance leases related to machinery and equipment at our Wickliffe, Kentucky facility of $68.8 million and $68.8 million, and net book value of $5.8 million and $6.0 million at March 31, 2020, and December 31, 2019, respectively. This also includes finance leases related to our Waynesboro, Georgia manufacturing facility for (a) machinery and equipment of $18.4 million and $18.4 million and net book value of $16.5 million and $16.8 million, (b) construction in progress of $8.3 million and $6.4 million and (c) buildings and leasehold improvements of $4.3 million and $4.2 million and net book value of $4.2 million and $4.20 million at March 31, 2020 and December 31, 2019, respectively. Amortization expense associated with these finance leases is included within depreciation expense. |
Goodwill and other intangible_2
Goodwill and other intangible assets, net (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | Operating Segments In millions Performance Chemicals Performance Materials Total December 31, 2019 $ 432.1 $ 4.3 $ 436.4 Foreign currency translation (19.6) — (19.6) March 31, 2020 $ 412.5 $ 4.3 $ 416.8 |
Schedule of Finite-Lived Intangible Assets | All of our other intangibles, net are related to the Performance Chemicals operating segment. The following table summarizes these assets: March 31, 2020 December 31, 2019 In millions Gross Accumulated amortization Net Gross Accumulated amortization Net Intangible assets subject to amortization Customer contracts and relationships $ 304.2 $ 56.4 $ 247.8 $ 314.5 $ 51.6 $ 262.9 Brands (1) 76.0 12.1 63.9 80.3 11.1 69.2 Developed technology 64.5 6.9 57.6 68.6 5.7 62.9 Other 2.7 1.7 1.0 2.7 1.5 1.2 Total Other intangibles, net $ 447.4 $ 77.1 $ 370.3 $ 466.1 $ 69.9 $ 396.2 _______________ (1) Represents trademarks, trade names and know-how. |
Finite-lived Intangible Assets Amortization Expense | The amortization expense related to our intangible assets in the table above is shown in the table below. Three Months Ended March 31, In millions 2020 2019 Cost of sales $ 0.1 $ 0.2 Selling, general and administrative expenses 8.2 5.3 Total amortization expense (1) $ 8.3 $ 5.5 _______________ (1) See Note 4 for more information about the Caprolactone Acquisition, and the related increase in amortization expense. |
Financial Instruments and Ris_2
Financial Instruments and Risk Management (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Effect of Cash Flow and Net Investment Hedge Accounting on Accumulated Other Comprehensive Income | In millions Amount of Gain (Loss) Recognized in AOCI Amount of Gain (Loss) Reclassified from AOCI into Net income Location of Gain (Loss) Reclassified from AOCI in Net income Three Months Ended March 31, 2020 2019 2020 2019 Cash flow hedging derivatives Currency exchange contracts $ 0.3 $ — $ — $ — Net sales Natural gas contracts (0.4) 0.1 (0.1) 0.5 Cost of sales Interest rate swap contracts (6.1) — — — Interest expense, net Total $ (6.2) $ 0.1 $ (0.1) $ 0.5 Amount of Gain (Loss) Recognized in AOCI Amount of Gain (Loss) Recognized in Income on Derivative Location of Gain or (Loss) Recognized in Income on Derivative Three Months Ended March 31, 2020 2019 2020 2019 Net investment hedging derivative Currency exchange contracts (1) $ 7.4 $ — $ 0.8 $ — Interest expense, net Total $ 7.4 $ — $ 0.8 $ — __________ |
Schedule of Derivative Instruments in Statement of Financial Position, Fair Value | In millions Level 1 (1) Level 2 (2) Level 3 (3) Total March 31, 2020 Assets: Currency exchange contracts (4) $ — $ 0.3 $ — $ 0.3 Net investment hedge (5) — 10.4 — 10.4 Total assets $ — $ 10.7 $ — 10.7 Liabilities: Natural gas contracts (6) $ — $ 0.5 $ — $ 0.5 Interest rate swap contracts (7) — 10.0 — 10.0 Total liabilities $ — $ 10.5 $ — $ 10.5 In millions Level 1 (1) Level 2 (2) Level 3 (3) Total December 31, 2019 Assets: Net investment hedge (5) $ — $ 3.0 $ — $ 3.0 Total assets $ — $ 3.0 $ — 3.0 Liabilities: Natural gas contracts (6) $ — $ 0.5 $ — $ 0.5 Interest rate swap contracts (7) — 3.9 — 3.9 Total liabilities $ — $ 4.4 $ — $ 4.4 __________ (1) Quoted prices in active markets for identical assets. (2) Quoted prices for similar assets and liabilities in active markets. (3) Significant unobservable inputs (4) Included within "Prepaid and other current assets" on the condensed consolidated balance sheet. (5) Included within "Other assets" on the condensed consolidated balance sheet. (6) Included within "Accrued expenses" on the condensed consolidated balance sheet. (7) Included within "Other liabilities" on the condensed consolidated balance sheet. |
Debt including Finance Lease _2
Debt including Finance Lease Obligations (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Instruments | Current and long-term debt including finance lease obligations consisted of the following: March 31, 2020 In millions, except percentages Interest rate Maturity date March 31, 2020 December 31, 2019 Revolving Credit Facility (1) 2.36% 2023 $ 375.0 $ 131.3 Term Loans 2.62% 2022-2023 735.9 740.6 Senior Notes 4.50% 2026 300.0 300.0 Finance lease obligations 7.67% 2027 80.0 80.0 Other 4.95% 2020-2021 5.0 5.9 Total debt including finance lease obligations 1,495.9 1,257.8 Less: debt issuance costs 6.5 6.9 Total debt including finance lease obligations, net of debt issuance costs 1,489.4 1,250.9 Less: debt maturing within one year (2) 21.6 22.5 Long-term debt including finance lease obligations $ 1,467.8 $ 1,228.4 ______________ (1) Letters of credit outstanding under the revolving credit facility were $2.1 million and undrawn capacity under the facility was $372.9 million at March 31, 2020. (2) Debt maturing within one year is included in "Notes payable and current maturities of long-term debt" on the condensed consolidated balance sheets. |
Equity (Tables)
Equity (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Equity [Abstract] | |
Schedule of Stockholders' Equity | The tables below provide a roll forward of equity. Common Stock In millions, except per share data in thousands Shares Amount Additional paid in capital Retained earnings Accumulated Treasury stock Total Equity Balance at December 31, 2019 42,675 $ 0.4 $ 112.8 $ 497.2 $ (5.0) $ (74.6) $ 530.8 Net income (loss) — — — 45.3 — — 45.3 Other comprehensive income (loss) — — — — (39.1) — (39.1) Common stock issued 161 — — — — — — Exercise of stock options, net — — — — — — — Tax payments related to vested restricted stock units — — — — — (3.1) (3.1) Share repurchase program — — — — — (32.4) (32.4) Share-based compensation plans — — 0.8 — — 0.4 1.2 Adoption of accounting standard — — — (0.6) — — (0.6) Balance at March 31, 2020 42,836 $ 0.4 $ 113.6 $ 541.9 $ (44.1) $ (109.7) $ 502.1 Common Stock In millions, except per share data in thousands Shares Amount Additional paid in capital Retained earnings Accumulated Treasury stock Total Equity Balance at December 31, 2018 42,332 $ 0.4 $ 98.3 $ 313.5 $ (17.7) $ (55.8) $ 338.7 Net income (loss) — — — 22.7 — — 22.7 Other comprehensive income (loss) — — — — 9.1 — 9.1 Common stock issued 276 — — — — — — Exercise of stock options, net 51 — 1.4 — — — 1.4 Tax payments related to vested restricted stock units — — — — — (14.3) (14.3) Share repurchase program — — — — — (3.3) (3.3) Share-based compensation plans — — 4.1 — — 0.3 4.4 Balance at March 31, 2019 42,659 $ 0.4 $ 103.8 $ 336.2 $ (8.6) $ (73.1) $ 358.7 |
Schedule of Accumulated Other Comprehensive Income (Loss) | Reclassifications of accumulated other comprehensive income (loss) Three Months Ended March 31, In millions 2020 2019 Derivative instruments Currency exchange contracts (1) $ — $ — Natural gas contracts (2) (0.1) 0.5 Total before tax (0.1) 0.5 (Provision) benefit for income taxes — (0.1) Amount included in net income (loss) $ (0.1) $ 0.4 Pension and other post retirement benefits Amortization of unrecognized net actuarial and other gains (losses) (3) — — Total before tax — — (Provision) benefit for income taxes — — Amount included in net income (loss) $ — $ — ______________ (1) Included within "Net sales" on the condensed consolidated statement of operations. (2) Included within "Cost of sales" on the condensed consolidated statement of operations. (3) Included within "Other (income) expense, net" on the condensed consolidated statement of operations. |
Retirement Plans (Tables)
Retirement Plans (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Postemployment Benefits [Abstract] | |
Schedule of Defined Benefit Plans Disclosures | The following table summarizes the components of net periodic benefit cost (income) for our defined benefit pension plans: Three Months Ended March 31, Pensions Other Benefits In millions 2020 2019 2020 2019 Components of net periodic benefit cost (income): Service cost (1) $ 0.4 $ 0.3 $ — $ — Interest cost (2) 0.3 0.3 — — Expected return on plan assets (2) (0.3) (0.3) — — Amortization of net actuarial and other (gain) loss (2) — — — — Net periodic benefit cost (income) $ 0.4 $ 0.3 $ — $ — _______________ (1) Amounts are recorded to "Cost of sales" on our condensed consolidated statements of operations consistent with the employee compensation costs that participate in the plan. |
Restructuring and Other (Inco_2
Restructuring and Other (Income) Charges, net (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Related Costs | Detail on the restructuring charges and other (income) charges, net, is provided below. Three Months Ended March 31, In millions 2020 2019 Severance and other employee-related costs 0.2 — Restructuring charges 0.2 — Business transformation costs 0.3 — Other (income) charges, net 0.3 — Total restructuring and other (income) charges, net $ 0.5 $ — The following table shows a roll forward of restructuring reserves that will result in cash spending. Balance at Change in Cash Balance at In millions 12/31/2019 (1) Reserve (2) Payments Other 3/31/2020 (1) Restructuring Reserves $ 0.4 0.2 (0.6) — $ — _______________ (1) Included in "Accrued Expenses" on the condensed consolidated balance sheets. (2) Includes severance and other employee-related costs. |
Income taxes (Tables)
Income taxes (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Schedule of Effective Income Tax Rate Reconciliation | The effective tax rates, including discrete items, were as follows: Three Months Ended March 31, 2020 2019 Effective tax rate 17.9 % — % The below table provides a reconciliation between our reported effective tax rates and the EAETR. Three Months Ended March 31, 2020 2019 In millions, except percentages Before tax Tax Effective tax rate % impact Before tax Tax Effective tax rate % impact Consolidated operations $ 55.2 $ 9.9 17.9 % $ 22.7 $ — — % Discrete items: Restructuring and other (income) charges, net 0.5 0.1 — — Acquisition and other-related costs (1) 1.3 0.3 31.2 5.3 Other tax only discrete items — 1.3 — 6.7 Total discrete items 1.8 1.7 31.2 12.0 Consolidated operations, before discrete items $ 57.0 $ 11.6 $ 53.9 $ 12.0 Quarterly effect of changes in the EAETR (2) 20.4 % 22.3 % _______________ (1) See Note 4 for more information on our acquisition and other-related costs. (2) Decrease in EAETR for the three months ended March 31, 2020, as compared to March 31, 2019, is due to a change in the mix of forecasted earnings in various tax jurisdictions with varying rates, offset by a large reduction in acquisition related costs and excess stock compensation benefit. |
Segment information (Tables)
Segment information (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information | Three Months Ended March 31, In millions 2020 2019 Net sales Performance Materials $ 121.1 $ 109.1 Performance Chemicals 167.1 167.7 Total net sales (1) $ 288.2 $ 276.8 Segment EBITDA (2) Performance Materials $ 61.2 $ 51.2 Performance Chemicals 31.0 32.3 Total segment EBITDA (2) $ 92.2 $ 83.5 Interest expense, net (10.9) (11.1) (Provision) benefit for income taxes (9.9) — Depreciation and amortization - Performance Materials (7.2) (5.8) Depreciation and amortization - Performance Chemicals (17.1) (12.7) Restructuring and other income (charges), net (3) (0.5) — Acquisition and other-related costs (4) (1.3) (31.2) Net income (loss) $ 45.3 $ 22.7 _______________ (1) Relates to external customers only, all intersegment sales and related profit have been eliminated in consolidation. (2) Segment EBITDA is the primary measure used by our chief operating decision maker to evaluate the performance of and allocate resources among our operating segments. Segment EBITDA is defined as segment revenue less segment operating expenses (segment operating expenses consist of costs of sales, selling, general and administrative expenses, other (income) expense, net, excluding depreciation and amortization). We have excluded the following items from segment EBITDA: interest expense, net, associated with corporate debt facilities, income taxes, depreciation, amortization, restructuring and other (income) charges, net, acquisition and other-related costs, pension and postretirement settlement and curtailment (income) charge. (3) Income (charges) for all periods presented relate to restructuring activity in our Performance Chemicals segment and costs associated with the business transformation initiative. For more detail on the charges incurred see Note 14 within these Condensed Consolidated Financial Statements. (4) Charges associated with the acquisition and integration of the Caprolactone Business. For more detail on the charges incurred see Note 4 within these Condensed Consolidated Financial Statements. |
Earnings (Loss) per Share (Tabl
Earnings (Loss) per Share (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | Three Months Ended March 31, In millions, except share and per share data 2020 2019 Net income (loss) $ 45.3 $ 22.7 Basic and Diluted earnings (loss) per share Basic earnings (loss) per share $ 1.09 $ 0.54 Diluted earnings (loss) per share 1.08 0.54 Shares (in thousands) Weighted average number of common shares outstanding - Basic 41,692 41,695 Weighted average additional shares assuming conversion of potential common shares 270 542 Shares - diluted basis 41,962 42,237 |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The following average number of potential common shares were antidilutive, and therefore, were not included in the diluted earnings per share calculation: Three Months Ended March 31, In thousands 2020 2019 Average number of potential common shares - antidilutive 210 52 |
Description of Business and B_2
Description of Business and Basis of Presentation (Details) | 3 Months Ended |
Mar. 31, 2020segment | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of business segments (in segments) | 2 |
Coronavirus Pandemic (Details)
Coronavirus Pandemic (Details) $ in Millions | 1 Months Ended |
Mar. 31, 2020USD ($) | |
Unusual or Infrequent Items, or Both [Abstract] | |
Deferred tax payable | $ 5.3 |
Proceeds from line of credit | $ 250 |
Accounting Policies - Allowance
Accounting Policies - Allowance for Credit Loss (Details) - USD ($) $ in Millions | Jan. 01, 2020 | Mar. 31, 2020 |
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||
Beginning balance | $ 0.5 | $ 0.5 |
Impact from Adoption of ASC 326 | 0.6 | |
Current Period Provision | 0.3 | |
Ending balance | 1.1 | 1.4 |
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
Allowance for doubtful accounts | 1.1 | 1.4 |
Accounts Receivable | ||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||
Beginning balance | 0.5 | 0.5 |
Ending balance | 0.5 | |
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
Allowance for doubtful accounts | $ 0.5 | 0.5 |
Restricted Investment | ||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||
Ending balance | 0.9 | |
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
Allowance for doubtful accounts | $ 0.9 |
Acquisitions (Narrative) (Detai
Acquisitions (Narrative) (Details) € in Millions, $ in Millions | Feb. 13, 2019USD ($) | Feb. 13, 2019EUR (€) | Mar. 31, 2020USD ($) | Mar. 31, 2019USD ($) | Feb. 13, 2019EUR (€) |
Business Acquisition [Line Items] | |||||
Acquisition and other-related costs | $ 1.3 | $ 31.2 | |||
Caprolactone Acquisition | |||||
Business Acquisition [Line Items] | |||||
Payments to acquire businesses, gross | $ 652.5 | € 578.9 | |||
Total cash paid | 113.1 | € 100.4 | |||
Revenues | $ 36.3 | $ 24.2 | |||
Total cash paid, less cash and restricted cash acquired | $ 537.9 |
Acquisitions (Schedule of Recog
Acquisitions (Schedule of Recognized Identified Assets Acquired and Liabilities Assumed) (Details) - USD ($) $ in Millions | Feb. 13, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 |
Business Acquisition [Line Items] | ||||
Goodwill | $ 416.8 | $ 436.4 | ||
Amortization expense | 8.3 | $ 5.5 | ||
2020 amortization expense | 25.8 | |||
2021 amortization expense | 24.9 | |||
2022 amortization expense | 24.7 | |||
2023 amortization expense | 24.6 | |||
2024 amortization expense | 24.3 | |||
Cash and cash equivalents | 302.7 | $ 38.4 | ||
Caprolactone | ||||
Business Acquisition [Line Items] | ||||
Cash and cash equivalents | $ 0.7 | |||
Accounts receivable | 15.7 | |||
Inventories | 21.7 | |||
Prepaid and other current assets | 1.9 | |||
Property, plant and equipment | 86.3 | |||
Operating lease assets, net | 1.8 | |||
Goodwill | 295.1 | |||
Other assets | 1.3 | |||
Total fair value of assets acquired | 715.8 | |||
Accounts payable | 13.6 | |||
Accrued expenses | 2.3 | |||
Long-term debt | 113.1 | |||
Operating lease liabilities | 1.7 | |||
Deferred income taxes | 45.7 | |||
Total fair value of liabilities assumed | 176.4 | |||
Cash and restricted cash acquired | 1.5 | |||
Total cash paid, less cash and restricted cash acquired | 537.9 | |||
Inventory step up | 8.4 | |||
Amortization expense | 4.8 | $ 1.9 | ||
2020 amortization expense | 19.6 | |||
2021 amortization expense | 19.6 | |||
2022 amortization expense | 19.5 | |||
2023 amortization expense | 19.5 | |||
2024 amortization expense | $ 19.5 | |||
Cash and cash equivalents | 0.7 | |||
Restricted cash | $ 0.8 | |||
Customer relationships | Caprolactone | ||||
Business Acquisition [Line Items] | ||||
Weighted Average Amortization Period | 17 years | |||
Intangible assets | $ 159 | |||
Developed technology | Caprolactone | ||||
Business Acquisition [Line Items] | ||||
Weighted Average Amortization Period | 12 years | |||
Intangible assets | $ 64.8 | |||
Brands | Caprolactone | ||||
Business Acquisition [Line Items] | ||||
Weighted Average Amortization Period | 17 years | |||
Intangible assets | $ 67 | |||
Non-compete | Caprolactone | ||||
Business Acquisition [Line Items] | ||||
Weighted Average Amortization Period | 3 years | |||
Intangible assets | $ 0.5 |
Acquisitions (Business Acquisit
Acquisitions (Business Acquisition, Pro Forma Information) (Details) $ / shares in Units, $ in Millions | 3 Months Ended |
Mar. 31, 2019USD ($)$ / shares | |
Business Combinations [Abstract] | |
Net sales | $ 294.5 |
Income (loss) before income taxes | $ 53.5 |
Diluted earnings (loss) per share attributable to Ingevity stockholders (usd per share) | $ / shares | $ 1.14 |
Acquisitions (Acquisition and o
Acquisitions (Acquisition and other related costs) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Business Acquisition [Line Items] | ||
Acquisition-related costs | $ 1.3 | $ 22.8 |
Acquisition and other-related costs | 1.3 | 31.2 |
Performance Chemicals | ||
Business Acquisition [Line Items] | ||
Legal and professional service fees | 1.3 | 10.1 |
Purchase price hedge adjustment | 0 | 12.7 |
Acquisition-related costs | 1.3 | 22.8 |
Inventory fair value step-up amortization | 0 | 8.4 |
Acquisition and other-related costs | $ 1.3 | $ 31.2 |
Revenues - Disaggregation of Re
Revenues - Disaggregation of Revenue by Product Line (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Disaggregation of Revenue [Line Items] | ||
Net sales | $ 288.2 | $ 276.8 |
Performance Materials segment | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 121.1 | 109.1 |
Performance Materials segment | Automotive Technologies product line | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 112.9 | 99.7 |
Performance Materials segment | Process Purification product line | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 8.2 | 9.4 |
Performance Chemicals segment | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 167.1 | 167.7 |
Performance Chemicals segment | Oilfield Technologies product line | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 30.2 | 29.2 |
Performance Chemicals segment | Pavement Technologies product line | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 20.7 | 18.5 |
Performance Chemicals segment | Industrial Specialties product line | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 79.9 | 95.8 |
Performance Chemicals segment | Engineered Polymers product line | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | $ 36.3 | $ 24.2 |
Revenues - Disaggregation of _2
Revenues - Disaggregation of Revenue by Geography (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Disaggregation of Revenue [Line Items] | ||
Net sales | $ 288.2 | $ 276.8 |
North America | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 171.1 | 171.7 |
Asia Pacific | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 67.9 | 49.1 |
Europe, Middle East and Africa | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 43.4 | 51.2 |
South America | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | $ 5.8 | $ 4.8 |
Revenues - Contract assets (Det
Revenues - Contract assets (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | ||
Contract with customer, liability | $ 0 | $ 0 |
Change in Contract with Customer, Asset [Roll Forward] | ||
Beginning balance | 6,200,000 | 5,100,000 |
Contract asset additions | 4,600,000 | 4,700,000 |
Reclassification to accounts receivable, billed to customers | (3,900,000) | (4,500,000) |
Ending balance | $ 6,900,000 | $ 5,300,000 |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Level 1 to level 2 transfers | $ 0 | $ 0 | |
Equity securities | 100,000 | 100,000 | |
Realized gains | (100,000) | $ 0 | |
Equity securities, unrealized gain (loss) | 0 | $ 0 | |
Equity Securities without readily determinable fair value | 200,000 | 1,500,000 | |
Impairment losses | 1,300,000 | ||
Debt Securities, held-to-maturity, restricted | 72,200,000 | ||
Held-to-maturity, allowance for credit loss | 900,000 | ||
Restricted cash | 800,000 | ||
Restricted investments, at fair value | 75,400,000 | ||
Long-term debt, gross | 1,495,900,000 | $ 1,257,800,000 | |
Variable Interest Rate | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Long-term debt, gross | 1,115,900,000 | ||
Senior Notes | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Long-term debt, gross | 300,000,000 | ||
Debt instrument, fair value disclosure | 282,800,000 | ||
Reported Value Measurement | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Finance lease obligations | 80,000,000 | ||
Estimate of Fair Value Measurement | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Finance lease obligations | $ 100,100,000 |
Fair Value Measurements - Measu
Fair Value Measurements - Measured on a Recurring Basis (Details) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Assets: | ||
Equity securities | $ 0.1 | $ 0.1 |
Fair Value, Measurements, Recurring | ||
Assets: | ||
Equity securities | 0.1 | 0.4 |
Deferred compensation plan investments | 1.5 | 1.4 |
Total assets | 1.6 | 1.8 |
Liabilities: | ||
Deferred compensation arrangement | 9.9 | 10 |
Separation-related reimbursement awards | 0.1 | |
Total liabilities | 9.9 | 10.1 |
Fair Value, Measurements, Recurring | Level 1 | ||
Assets: | ||
Equity securities | 0.1 | 0.4 |
Deferred compensation plan investments | 1.5 | 1.4 |
Total assets | 1.6 | 1.8 |
Liabilities: | ||
Deferred compensation arrangement | 9.9 | 10 |
Separation-related reimbursement awards | 0.1 | |
Total liabilities | 9.9 | 10.1 |
Fair Value, Measurements, Recurring | Level 2 | ||
Assets: | ||
Equity securities | 0 | 0 |
Deferred compensation plan investments | 0 | 0 |
Total assets | 0 | 0 |
Liabilities: | ||
Deferred compensation arrangement | 0 | 0 |
Separation-related reimbursement awards | 0 | |
Total liabilities | 0 | 0 |
Fair Value, Measurements, Recurring | Level 3 | ||
Assets: | ||
Equity securities | 0 | 0 |
Deferred compensation plan investments | 0 | 0 |
Total assets | 0 | 0 |
Liabilities: | ||
Deferred compensation arrangement | 0 | 0 |
Separation-related reimbursement awards | 0 | |
Total liabilities | $ 0 | $ 0 |
Fair Value Measurements - Credi
Fair Value Measurements - Credit Ratings (Details) $ in Millions | Mar. 31, 2020USD ($) |
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items] | |
Debt securities, held-to-maturity | $ 72.3 |
Standard & Poor's, AA+ Rating | |
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items] | |
Debt securities, held-to-maturity | 13.5 |
Standard & Poor's, AA Rating | |
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items] | |
Debt securities, held-to-maturity | 10.7 |
Standard & Poor's, A Rating | |
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items] | |
Debt securities, held-to-maturity | 24.2 |
Standard & Poor's, A- Rating | |
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items] | |
Debt securities, held-to-maturity | 13.4 |
Standard & Poor's, BBB+ Rating | |
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items] | |
Debt securities, held-to-maturity | $ 10.5 |
Inventories, net (Details)
Inventories, net (Details) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Inventory, Net | ||
Raw materials | $ 44.2 | $ 42.6 |
Production materials, stores and supplies | 23 | 22.3 |
Finished and in-process goods | 182.3 | 158 |
Subtotal | 249.5 | 222.9 |
Less: adjustment of inventories to LIFO basis | (13.3) | (10.4) |
Inventories, net | $ 236.2 | $ 212.5 |
Property, Plant and Equipment_3
Property, Plant and Equipment, net (Details) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Property, Plant and Equipment | ||
Total cost | $ 1,227.4 | $ 1,219.3 |
Less: accumulated depreciation | (567.7) | (554.6) |
Property, plant and equipment, net | 659.7 | 664.7 |
Machinery and equipment | ||
Property, Plant and Equipment | ||
Total cost | 977 | 964.3 |
Buildings and leasehold improvements | ||
Property, Plant and Equipment | ||
Total cost | 122.2 | 116.9 |
Land and land improvements | ||
Property, Plant and Equipment | ||
Total cost | 19.2 | 19 |
Construction in progress | ||
Property, Plant and Equipment | ||
Total cost | 109 | 119.1 |
Wickliffe, Kentucky Manufacturing Facility | Machinery and equipment | ||
Property, Plant and Equipment | ||
Finance lease, gross | 68.8 | 68.8 |
Finance lease, net | 5.8 | 6 |
Waynesboro, Georgia Manufacturing Facility | Machinery and equipment | ||
Property, Plant and Equipment | ||
Finance lease, gross | 18.4 | 18.4 |
Finance lease, net | 16.5 | 16.8 |
Waynesboro, Georgia Manufacturing Facility | Buildings and leasehold improvements | ||
Property, Plant and Equipment | ||
Finance lease, gross | 4.3 | 4.2 |
Finance lease, net | 4.2 | 4.2 |
Waynesboro, Georgia Manufacturing Facility | Construction in progress | ||
Property, Plant and Equipment | ||
Finance lease, gross | $ 8.3 | $ 6.4 |
Goodwill and other intangible_3
Goodwill and other intangible assets, net - Carrying Amount (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2020USD ($) | |
Goodwill | |
Goodwill, beginning balance | $ 436.4 |
Foreign currency translation | (19.6) |
Goodwill, ending balance | 416.8 |
Performance Chemicals | |
Goodwill | |
Goodwill, beginning balance | 432.1 |
Foreign currency translation | (19.6) |
Goodwill, ending balance | 412.5 |
Performance Materials | |
Goodwill | |
Goodwill, beginning balance | 4.3 |
Foreign currency translation | 0 |
Goodwill, ending balance | $ 4.3 |
Goodwill and other intangible_4
Goodwill and other intangible assets, net - Intangible Assets (Details) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Finite-Lived Intangible Assets [Line Items] | ||
Net | $ 370.3 | $ 396.2 |
Performance Chemicals | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross | 447.4 | 466.1 |
Accumulated amortization | 77.1 | 69.9 |
Net | 370.3 | 396.2 |
Customer contracts and relationships | Performance Chemicals | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross | 304.2 | 314.5 |
Accumulated amortization | 56.4 | 51.6 |
Net | 247.8 | 262.9 |
Brands | Performance Chemicals | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross | 76 | 80.3 |
Accumulated amortization | 12.1 | 11.1 |
Net | 63.9 | 69.2 |
Developed technology | Performance Chemicals | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross | 64.5 | 68.6 |
Accumulated amortization | 6.9 | 5.7 |
Net | 57.6 | 62.9 |
Other | Performance Chemicals | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross | 2.7 | 2.7 |
Accumulated amortization | 1.7 | 1.5 |
Net | $ 1 | $ 1.2 |
Goodwill and other intangible_5
Goodwill and other intangible assets, net - Amortization (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Finite-Lived Intangible Assets [Line Items] | ||
Total amortization expense | $ 8.3 | $ 5.5 |
Cost of sales | ||
Finite-Lived Intangible Assets [Line Items] | ||
Total amortization expense | 0.1 | 0.2 |
Selling, general and administrative expenses | ||
Finite-Lived Intangible Assets [Line Items] | ||
Total amortization expense | $ 8.2 | $ 5.3 |
Goodwill and other intangible_6
Goodwill and other intangible assets, net - Maturity (Details) $ in Millions | Mar. 31, 2020USD ($) |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity | |
2020 amortization expense | $ 25.8 |
2021 amortization expense | 24.9 |
2022 amortization expense | 24.7 |
2023 amortization expense | 24.6 |
2024 amortization expense | $ 24.3 |
Financial Instruments and Ris_3
Financial Instruments and Risk Management (Narrative) (Details) mmbtus in Millions | 3 Months Ended | ||
Mar. 31, 2020USD ($)mmbtus | Dec. 31, 2019USD ($)mmbtus | Jun. 30, 2019USD ($) | |
Derivative [Line Items] | |||
Foreign currency cash flow hedges losses expected to be recognized in the next 12 months | $ 700,000 | ||
Level 1 to level 2 transfers | 0 | $ 0 | |
Currency Swap | |||
Derivative [Line Items] | |||
Derivative, notional amount | $ 166,200,000 | ||
Derivative, fair value, net | 10,400,000 | $ 3,000,000 | |
Interest and dividend | $ 800,000 | ||
Currency Swap | US Dollar Denominated | |||
Derivative [Line Items] | |||
Derivative, fixed interest rate | 3.79% | ||
Currency Swap | Eurodollar | |||
Derivative [Line Items] | |||
Derivative, fixed interest rate | 1.35% | ||
Currency exchange contracts | |||
Derivative [Line Items] | |||
Derivative, notional amount | $ 14,700,000 | ||
Derivative asset | 300,000 | $ 0 | |
Commodity hedging | |||
Derivative [Line Items] | |||
Derivative, fair value, net | $ (500,000) | $ (500,000) | |
Commodity hedging | Swap | |||
Derivative [Line Items] | |||
Derivative, nonmonetary notional amount | mmbtus | 1.5 | ||
Commodity hedging | Zero Cost Collar | |||
Derivative [Line Items] | |||
Derivative, nonmonetary notional amount | mmbtus | 0.1 | ||
Interest rate swap contracts | |||
Derivative [Line Items] | |||
Derivative, notional amount | $ 166,200,000 | ||
Derivative, fair value, net | $ (10,000,000) | $ (3,900,000) |
Derivatives and Hedging - Effec
Derivatives and Hedging - Effect of Cash Flow and Net Investment Hedge Accounting on AOCI (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | ||
Net sales | $ 288.2 | $ 276.8 |
Cost of sales | 173.6 | 179.7 |
Interest expense, net | (10.9) | (11.1) |
Accumulated Gain (Loss), Net, Cash Flow Hedge, Parent | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | ||
Interest expense, net | 7.4 | 0 |
Total | (6.2) | 0.1 |
Accumulated Gain (Loss), Net, Cash Flow Hedge, Parent | Reclassification out of Accumulated Other Comprehensive Income | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | ||
Interest expense, net | 0.8 | 0 |
Total | (0.1) | 0.5 |
Currency Swap | Accumulated Gain (Loss), Net, Cash Flow Hedge, Parent | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | ||
Net sales | 0.3 | 0 |
Interest expense, net | 7.4 | 0 |
Currency Swap | Accumulated Gain (Loss), Net, Cash Flow Hedge, Parent | Reclassification out of Accumulated Other Comprehensive Income | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | ||
Net sales | 0 | 0 |
Interest expense, net | 0.8 | 0 |
Commodity hedging | Accumulated Gain (Loss), Net, Cash Flow Hedge, Parent | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | ||
Cost of sales | (0.4) | 0.1 |
Commodity hedging | Accumulated Gain (Loss), Net, Cash Flow Hedge, Parent | Reclassification out of Accumulated Other Comprehensive Income | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | ||
Cost of sales | (0.1) | 0.5 |
Interest rate swap contracts | Accumulated Gain (Loss), Net, Cash Flow Hedge, Parent | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | ||
Interest expense, net | (6.1) | 0 |
Interest rate swap contracts | Accumulated Gain (Loss), Net, Cash Flow Hedge, Parent | Reclassification out of Accumulated Other Comprehensive Income | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | ||
Interest expense, net | $ 0 | $ 0 |
Derivatives and Hedging (Fair V
Derivatives and Hedging (Fair Value of Hedging Contracts) (Details) - Fair Value, Measurements, Recurring - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | $ 10.7 | $ 3 |
Total liabilities | 10.5 | 4.4 |
Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 0 | 0 |
Total liabilities | 0 | 0 |
Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 10.7 | 3 |
Total liabilities | 10.5 | 4.4 |
Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 0 | 0 |
Total liabilities | 0 | 0 |
Currency exchange contracts | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 0.3 | |
Currency exchange contracts | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 0 | |
Currency exchange contracts | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 0.3 | |
Currency exchange contracts | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 0 | |
Net Investing Hedge | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 10.4 | 3 |
Net Investing Hedge | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 0 | 0 |
Net Investing Hedge | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 10.4 | 3 |
Net Investing Hedge | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 0 | 0 |
Commodity hedging | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total liabilities | 0.5 | 0.5 |
Commodity hedging | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total liabilities | 0 | 0 |
Commodity hedging | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total liabilities | 0.5 | 0.5 |
Commodity hedging | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total liabilities | 0 | 0 |
Interest rate swap contracts | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total liabilities | 10 | 3.9 |
Interest rate swap contracts | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total liabilities | 0 | 0 |
Interest rate swap contracts | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total liabilities | 10 | 3.9 |
Interest rate swap contracts | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total liabilities | $ 0 | $ 0 |
Debt including Finance Lease _3
Debt including Finance Lease Obligations - Long-term Debt (Details) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Line of Credit Facility | ||
Long-term debt, gross | $ 1,495.9 | $ 1,257.8 |
Less: debt issuance costs | 6.5 | 6.9 |
Total debt including finance lease obligations, net of debt issuance costs | 1,489.4 | 1,250.9 |
Less: debt maturing within one year | 21.6 | 22.5 |
Long-term debt including finance lease obligations | $ 1,467.8 | 1,228.4 |
Revolving Credit Facility | ||
Line of Credit Facility | ||
Interest rate | 2.36% | |
Long-term debt, gross | $ 375 | 131.3 |
Letters of credit outstanding | 2.1 | |
Available under the facility | $ 372.9 | |
Term Loans | ||
Line of Credit Facility | ||
Interest rate | 2.62% | |
Long-term debt, gross | $ 735.9 | 740.6 |
Senior Notes | ||
Line of Credit Facility | ||
Interest rate | 4.50% | |
Long-term debt, gross | $ 300 | 300 |
Capital lease obligations | ||
Line of Credit Facility | ||
Interest rate | 7.67% | |
Long-term debt, gross | $ 80 | 80 |
Other | ||
Line of Credit Facility | ||
Interest rate | 4.95% | |
Long-term debt, gross | $ 5 | $ 5.9 |
Debt including Finance Lease _4
Debt including Finance Lease Obligations - Narrative (Details) | Mar. 31, 2020 |
Line of Credit Facility | |
Leverage ratio | 3.5 |
Leverage ratio, interest | 8.1 |
Revolving Credit Facility | |
Line of Credit Facility | |
Leverage ratio | 4 |
Leverage ratio potential increase | 4.5 |
Leverage ratio, interest | 3 |
Senior Notes | |
Line of Credit Facility | |
Effective rate | 4.50% |
Equity - Rollforward (Details)
Equity - Rollforward (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Jan. 01, 2020 | |
Increase (Decrease) in Stockholders' Equity | |||
Beginning balance (shares) | 41,826,136 | ||
Beginning balance | $ 530.8 | $ 338.7 | |
Net income (loss) | 45.3 | 22.7 | |
Other comprehensive income (loss) | (39.1) | 9.1 | |
Exercise of stock options, net | 0 | 1.4 | |
Tax payments related to vested restricted stock units | (3.1) | (14.3) | |
Share repurchase program | (32.4) | (3.3) | |
Share-based compensation plans | $ 1.2 | 4.4 | |
Adoption of accounting standard | $ (0.6) | ||
Ending balance (shares) | 41,176,953 | ||
Ending balance | $ 502.1 | $ 358.7 | |
Common Stock | |||
Increase (Decrease) in Stockholders' Equity | |||
Beginning balance (shares) | 42,675,000 | 42,332,000 | |
Beginning balance | $ 0.4 | $ 0.4 | |
Common stock issued (shares) | 161,000 | 276,000 | |
Exercise of stock options, net (shares) | 0 | 51,000 | |
Ending balance (shares) | 42,836,000 | 42,659,000 | |
Ending balance | $ 0.4 | $ 0.4 | |
Additional paid in capital | |||
Increase (Decrease) in Stockholders' Equity | |||
Beginning balance | 112.8 | 98.3 | |
Exercise of stock options, net | 0 | 1.4 | |
Share-based compensation plans | 0.8 | 4.1 | |
Ending balance | 113.6 | 103.8 | |
Retained earnings | |||
Increase (Decrease) in Stockholders' Equity | |||
Beginning balance | 497.2 | 313.5 | |
Net income (loss) | 45.3 | 22.7 | |
Adoption of accounting standard | $ (0.6) | ||
Ending balance | 541.9 | 336.2 | |
Accumulated other comprehensive income (loss) | |||
Increase (Decrease) in Stockholders' Equity | |||
Beginning balance | (5) | (17.7) | |
Other comprehensive income (loss) | (39.1) | 9.1 | |
Ending balance | (44.1) | (8.6) | |
Treasury stock | |||
Increase (Decrease) in Stockholders' Equity | |||
Beginning balance | (74.6) | (55.8) | |
Tax payments related to vested restricted stock units | (3.1) | (14.3) | |
Share repurchase program | (32.4) | (3.3) | |
Share-based compensation plans | 0.4 | 0.3 | |
Ending balance | $ (109.7) | $ (73.1) |
Equity - Rollforward of Accumul
Equity - Rollforward of Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||
Less: tax provision (benefit) | $ 1,700,000 | $ 0 |
Net gains (losses) on net investment hedges | 5,700,000 | 0 |
Other comprehensive income (loss), net of tax provision (benefit) of $0.3 and $(0.1) | (39,100,000) | 9,100,000 |
Ending Balance | (44,100,000) | (8,600,000) |
Foreign currency adjustments | ||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||
Beginning Balance | 1,500,000 | (16,400,000) |
Net gains (losses) on foreign currency translation | (40,100,000) | 9,400,000 |
Less: tax provision (benefit) | 0 | 0 |
Less: tax provision (benefit) | 1,700,000 | 0 |
Net gains (losses) | (40,100,000) | 9,400,000 |
Gains (losses) before reclassification, before tax | 7,400,000 | 0 |
Net gains (losses) on net investment hedges | 5,700,000 | 0 |
Other comprehensive income (loss), net of tax provision (benefit) of $0.3 and $(0.1) | (34,400,000) | 9,400,000 |
Ending Balance | (32,900,000) | (7,000,000) |
Derivative Instruments | ||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||
Beginning Balance | (3,500,000) | 400,000 |
Less: tax provision (benefit) | (1,400,000) | 0 |
Net gains (losses) | (4,800,000) | 100,000 |
Gains (losses) before reclassification, before tax | (6,200,000) | 100,000 |
(Gains) losses reclassified to net income | 100,000 | (500,000) |
Less: tax (provision) benefit | 0 | (100,000) |
Net (gains) losses reclassified to net income | 100,000 | (400,000) |
Other comprehensive income (loss), net of tax provision (benefit) of $0.3 and $(0.1) | (4,700,000) | (300,000) |
Ending Balance | (8,200,000) | 100,000 |
Accumulated Defined Benefit Plans Adjustment Attributable to Parent | ||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||
Beginning Balance | (3,000,000) | (1,700,000) |
Unrealized actuarial gains (losses) and prior service (costs) credits | 0 | 0 |
Less: tax provision (benefit) | 0 | 0 |
Net actuarial gains (losses) and prior service (costs) credits | 0 | 0 |
Less: tax provision (benefit) | 0 | 0 |
Gains (losses) before reclassification, before tax | 0 | 0 |
Net (gains) losses reclassified to net income | 0 | 0 |
Other comprehensive income (loss), net of tax provision (benefit) of $0.3 and $(0.1) | 0 | 0 |
Ending Balance | $ (3,000,000) | $ (1,700,000) |
Equity - Reclassification of AO
Equity - Reclassification of AOCI (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Net sales | $ 288.2 | $ 276.8 |
Cost of sales | 173.6 | 179.7 |
Other (income) expense, net | 2 | (3.7) |
Income (loss) before income taxes | 55.2 | 22.7 |
(Provision) benefit for income taxes | (9.9) | 0 |
Net income (loss) | 45.3 | 22.7 |
Derivative Instruments | Reclassification out of Accumulated Other Comprehensive Income | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Income (loss) before income taxes | (0.1) | 0.5 |
(Provision) benefit for income taxes | 0 | (0.1) |
Net income (loss) | (0.1) | 0.4 |
Accumulated Defined Benefit Plans Adjustment, Net Gain (Loss) Including Portion Attributable to Noncontrolling Interest | Reclassification out of Accumulated Other Comprehensive Income | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Other (income) expense, net | 0 | 0 |
Accumulated Defined Benefit Plans Adjustment Including Portion Attributable to Noncontrolling Interest | Reclassification out of Accumulated Other Comprehensive Income | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Income (loss) before income taxes | 0 | 0 |
(Provision) benefit for income taxes | 0 | 0 |
Net income (loss) | 0 | 0 |
Currency exchange contracts | Derivative Instruments | Reclassification out of Accumulated Other Comprehensive Income | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Net sales | 0 | 0 |
Natural gas contracts | Derivative Instruments | Reclassification out of Accumulated Other Comprehensive Income | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Cost of sales | $ (0.1) | $ 0.5 |
Equity - Share Repurchases (Det
Equity - Share Repurchases (Details) - USD ($) | 3 Months Ended | ||||
Mar. 31, 2020 | Mar. 31, 2019 | Feb. 28, 2020 | Dec. 31, 2018 | Dec. 31, 2017 | |
Equity, Class of Treasury Stock [Line Items] | |||||
Common stock amount authorized to be repurchased | $ 500,000,000 | ||||
Shares repurchased (in shares) | 750,000 | ||||
Payments for repurchase of common stock | $ 32,400,000 | $ 3,300,000 | |||
Amount remained unused under repurchase program | $ 467,600,000 | ||||
Common Stock | |||||
Equity, Class of Treasury Stock [Line Items] | |||||
Common stock amount authorized to be repurchased | $ 350,000,000 | $ 100,000,000 |
Retirement Plans - Summary of C
Retirement Plans - Summary of Components of Net Periodic Benefit Cost (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Pensions | ||
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) [Abstract] | ||
Service cost | $ 0.4 | $ 0.3 |
Interest cost | 0.3 | 0.3 |
Expected return on plan assets | (0.3) | (0.3) |
Amortization of net actuarial and other (gain) loss | 0 | 0 |
Net periodic benefit cost (income) | 0.4 | 0.3 |
Other Benefits | ||
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) [Abstract] | ||
Service cost | 0 | 0 |
Interest cost | 0 | 0 |
Expected return on plan assets | 0 | 0 |
Amortization of net actuarial and other (gain) loss | 0 | 0 |
Net periodic benefit cost (income) | $ 0 | $ 0 |
Retirement Plans - Narrative (D
Retirement Plans - Narrative (Details) | 3 Months Ended |
Mar. 31, 2020USD ($) | |
Postemployment Benefits [Abstract] | |
Discretionary contribution amount | $ 0 |
Restructuring and Other (Inco_3
Restructuring and Other (Income) Charges, net - Restructuring (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Restructuring and Related Activities [Abstract] | ||
Severance and other employee-related costs | $ 0.2 | $ 0 |
Restructuring charges | 0.2 | 0 |
Business transformation costs | 0.3 | 0 |
Other (income) charges, net | 0.3 | 0 |
Total restructuring and other (income) charges, net | $ 0.5 | $ 0 |
Restructuring and Other (Inco_4
Restructuring and Other (Income) Charges, net - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Restructuring and Related Activities [Abstract] | ||
Other | $ 0.2 | |
Business transformation costs | 0.3 | $ 0 |
Other Restructuring | Minimum | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring expected cost | 60 | |
Other Restructuring | Maximum | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring expected cost | 70 | |
Non-Capitalizable | Minimum | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring expected cost | 10 | |
Restructuring costs expected in current fiscal year | 2 | |
Non-Capitalizable | Maximum | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring expected cost | 15 | |
Restructuring costs expected in current fiscal year | $ 3 |
Restructuring and other (inco_5
Restructuring and other (income) charges, net - Roll forward of Restructuring Reserve (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2020USD ($) | |
Restructuring Reserve | |
Restructuring reserve, beginning balance | $ 0.4 |
Change in reserve | 0.2 |
Cash payments | (0.6) |
Other | 0 |
Restructuring reserve, ending balance | $ 0 |
Income taxes - Effective tax ra
Income taxes - Effective tax rate (Details) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Effective Income Tax Rate Reconciliation, Percent | ||
Effective tax rate | 17.90% | 0.00% |
Income taxes - Tax Reconciliati
Income taxes - Tax Reconciliation (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Income Tax Disclosure [Abstract] | ||
Effective tax rate | 17.90% | 0.00% |
Before tax | ||
Income (loss) before income taxes | $ 55.2 | $ 22.7 |
Restructuring and other (income) charges, net | 0.5 | 0 |
Acquisition and other-related costs | 1.3 | 31.2 |
Total discrete items | 1.8 | 31.2 |
Consolidated and combined operations, before discrete items | 57 | 53.9 |
Tax | ||
Provision (benefit) for income taxes | 9.9 | 0 |
Restructuring and other (income) charges, net | 0.1 | 0 |
Acquisition and other-related costs | 0.3 | 5.3 |
Other tax only discrete items | 1.3 | 6.7 |
Total discrete items, tax | 1.7 | 12 |
Combined operations, before discrete items, tax | $ 11.6 | $ 12 |
EAETR | 20.40% | 22.30% |
Income taxes - Narrative (Detai
Income taxes - Narrative (Details) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Income Tax Disclosure [Abstract] | ||
Deferred tax asset | $ 10.2 | $ 13 |
Segment information (Net Sales
Segment information (Net Sales and Segment Operating Profit) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Segment Reporting Information [Line Items] | ||
Net sales | $ 288.2 | $ 276.8 |
Segment Reporting Information, Profit (Loss) | ||
Segment operating profits | 92.2 | 83.5 |
Interest expense, net | (10.9) | (11.1) |
(Provision) benefit for income taxes | (9.9) | 0 |
Depreciation and amortization - Performance Chemicals | (24.3) | (18.5) |
Restructuring and other income (charges), net | (0.5) | 0 |
Acquisition and other related costs | (1.3) | (31.2) |
Net income (loss) attributable to Ingevity stockholders | 45.3 | 22.7 |
Performance Materials | ||
Segment Reporting Information [Line Items] | ||
Net sales | 121.1 | 109.1 |
Segment Reporting Information, Profit (Loss) | ||
Segment operating profits | 61.2 | 51.2 |
Depreciation and amortization - Performance Chemicals | (7.2) | (5.8) |
Performance Chemicals | ||
Segment Reporting Information [Line Items] | ||
Net sales | 167.1 | 167.7 |
Segment Reporting Information, Profit (Loss) | ||
Segment operating profits | 31 | 32.3 |
Depreciation and amortization - Performance Chemicals | $ (17.1) | $ (12.7) |
Earnings (Loss) per Share - Ear
Earnings (Loss) per Share - Earnings per share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Earnings Per Share Reconciliation | ||
Net income (loss) | $ 45.3 | $ 22.7 |
Basic and Diluted earnings (loss) per share | ||
Basic earnings (loss) per share (usd per share) | $ 1.09 | $ 0.54 |
Diluted earnings (loss) per share (usd per share) | $ 1.08 | $ 0.54 |
Shares | ||
Weighted average number of common shares outstanding - Basic (in shares) | 41,692 | 41,695 |
Weighted average additional shares assuming conversion of potential common shares (in shares) | 270 | 542 |
Shares - diluted basis (in shares) | 41,962 | 42,237 |
Earnings (Loss) per Share - Ant
Earnings (Loss) per Share - Antidilutive (Details) - shares shares in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Earnings Per Share [Abstract] | ||
Potentially anti-dilutive shares (in shares) | 210 | 52 |