Ingevity Corporation (NGVT) has reported a 5.81 percent rise in profit for the quarter ended Dec. 31, 2016. The company has earned $9.10 million, or $0.22 a share in the quarter, compared with $8.60 million, or $0.21 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $14.30 million, or $0.34 a share compared with $10 million or $0.24 a share, a year ago.
Revenue during the quarter went up marginally by 0.86 percent to $210.90 million from $209.10 million in the previous year period. Gross margin for the quarter expanded 312 basis points over the previous year period to 26.70 percent. Total expenses were 90.75 percent of quarterly revenues, up from 87.85 percent for the same period last year. That has resulted in a contraction of 290 basis points in operating margin to 9.25 percent.
Operating income for the quarter was $19.50 million, compared with $25.40 million in the previous year period.
However, the adjusted EBITDA for the quarter stood at $36 million compared with $33.10 million in the prior year period. At the same time, adjusted EBITDA margin improved 124 basis points in the quarter to 17.07 percent from 15.83 percent in the last year period.
“In what is seasonally a slower quarter, Ingevity’s revenues were in line with our expectations,” said Michael Wilson, Ingevity’s president and chief executive officer. “Despite sales that were essentially level with the prior year’s quarter, we delivered an 18.0 percent increase in adjusted EBITDA. This was driven by improved product mix, lower raw material and energy costs, and the benefits from our cost reduction efforts.” He said that the company exceeded its 12-month company-wide cost reduction target and decreased costs by more than $30 million in the year.
Ingevity Corporation forecasts revenue to be in the range of $930 million to $950 million for fiscal year 2017.
Operating cash flow improves significantly
Ingevity Corporation has generated cash of $127.90 million from operating activities during the year, up 77.15 percent or $55.70 million, when compared with the last year.
The company has spent $126.40 million cash to meet investing activities during the year as against cash outgo of $89.30 million in the last year.
The company has spent $3.40 million cash to carry out financing activities during the year as against cash inflow of $27 million in the last year period.
Cash and cash equivalents stood at $30.50 million as on Dec. 31, 2016, down 4.69 percent or $1.50 million from $32 million on Dec. 31, 2015.
Debt increases substantially
Ingevity Corporation has witnessed an increase in total debt over the last one year. It stood at $481.30 million as on Dec. 31, 2016, up 501.62 percent or $401.30 million from $80 million on Dec. 31, 2015. Ingevity has witnessed an increase in long-term debt over the last one year. It stood at $481.30 million as on Dec. 31, 2016, up 501.62 percent or $401.30 million from $80 million on Dec. 31, 2015. Interest coverage ratio improved to 4.64 for the quarter from 3.91 for the same period last year.
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