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Innospec Reports First Quarter 2013 Financial Results

Stocks in this article: IOSP

Continued sales growth and further margin improvement in Fuel Specialties

Performance Chemicals' Personal Care market strong; 9 percent growth in Americas

Substantial cash generation; $17.9 million inflows; highly liquid balance sheet

Year-over-year adjusted non-GAAP diluted EPS $0.72 vs. $1.00 – with expected decline in Octane Additives, plus higher costs for business and technology expansion, enhanced compliance and share based compensation

LITTLETON, Colo., May 6, 2013 (GLOBE NEWSWIRE) -- Innospec Inc. (Nasdaq:IOSP) today announced its financial results for the first quarter ended March 31, 2013.

Total net sales for the quarter were $199.4 million, essentially unchanged from the $200.8 million reported in the corresponding quarter last year. Net income was $18.0 million, or $0.75 per diluted share, compared to $24.6 million, or $1.03 per diluted share, recorded a year ago. EBITDA (earnings before interest, taxes, depreciation, amortization and impairment) for the quarter was $27.9 million, a 21 percent decrease from $35.2 million in the year-ago period, reflecting the continued and expected decline in the Octane Additives business. This year's first quarter reflected $8.8 million more in operating expenses over 2012, relating to costs for enhanced compliance, research and development, new product testing, and headcount additions, as the company continues to build the platform for future growth.

Results for the first quarter include after-tax foreign currency exchange gains of $0.8 million, or $0.03 per diluted share, unchanged from a year ago. Excluding these items, adjusted non-GAAP EPS was $0.72 per diluted share, compared to $1.00 per diluted share a year ago. Cash generation for the quarter was particularly strong, with operating cash inflows of $17.9 million, before capital expenditures during the quarter of $4.3 million. Net cash stood at $11.2 million at the end of the quarter.

EBITDA and net income excluding special items, and related per-share amounts, are non-GAAP financial measures that are defined and reconciled with GAAP results herein and in the schedules below.

  Quarter ended March 31, 2013 Quarter ended March 31, 2012
(in millions, except share and per share data) Income before income taxes Net income Diluted EPS Income before income taxes Net income Diluted EPS
Reported GAAP amounts  $ 22.9  $ 18.0  $ 0.75  $ 32.0  $ 24.6  $ 1.03
Foreign currency exchange gains (1.0) (0.8) (0.03) (1.1) (0.8) (0.03)
Adjusted non-GAAP amounts  $ 21.9  $ 17.2  $ 0.72  $ 30.9  $ 23.8  $ 1.00

Commenting on the results, Patrick Williams, President and Chief Executive Officer, said, "We had a very good first quarter, and we are particularly pleased with continued impressive showings in Fuel Specialties and the Personal Care sub-segment of Performance Chemicals. It is important to note that our strong cash management policies and procedures have enabled us to maintain a very solid and liquid balance sheet position, to allow us to continue to pursue growth opportunities at Innospec.

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