Mar 23, 2020
Ingevity provides update in light of coronavirus (COVID-19)
NORTH CHARLESTON, S.C., March 23, 2020 – Ingevity Corporation (NYSE:NGVT) today announced some of the steps it is taking on various levels to address and mitigate the impacts of the coronavirus (COVID-19) and provided information on financial liquidity.
“At Ingevity, our number one priority is the health and safety of our employees,” said Rick Kelson, Ingevity’s chairman of the board, and interim president and CEO. “We are also working diligently to exercise our business continuity plans so that we can continue to supply our customers,” he continued. “And, we remain confident in our financial position and our liquidity is strong.
“In fact, Ingevity’s first quarter is progressing somewhat better than expected, despite moderate headwinds from the coronavirus,” he continued. “Nonetheless, the situation is and will be very dynamic as we move through the rest of the year.”
- All non-production and non-essential laboratory employees with remote access capability have been instructed to work from home. Social distancing measures limiting the number of employees in labs and meetings have been instituted.
- The company has implemented a ban on all non-essential international and domestic business travel.
- Employees returning from business or personal travel internationally or to highly-impacted areas in the U.S. are instructed to self-quarantine for 14 days prior to returning to any company location.
- The company has stopped visits to the company’s locations by non-employees who have traveled internationally and to other heavily-impacted areas in the U.S. within the past two weeks.
- To date, no domestic or international employees have tested positive for COVID-19.
- Operations at the company’s manufacturing locations in China (Zhuhai, Changshu) resumed following the Chinese New Year in full force on February 10. These plants continue to run at a rate necessary to meet customer orders which remain steady.
- The company’s U.S. and U.K. manufacturing locations continue to run normally with no decreases in production. Plans are in development to adjust production to market needs if necessary.
- The company’s manufacturing plants are not experiencing any issues in obtaining raw materials.
- All of Ingevity’s manufacturing facilities have pandemic response and business continuity plans in place. Plant leaders are reviewing and preparing to implement those plans if and when necessary.
- The kiln replacement outage at the Covington, Va., activated carbon facility previously scheduled for April is being delayed until the fall to ensure that it proceeds without interruption.
Financial Status and Liquidity
- To date, net debt to adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) is unchanged from the end of 2019 at 2.8x. Ingevity has maintained this moderate leverage despite its typical first quarter cash consumption in preparation for the paving season. This leverage also reflects the company’s strong focus on cash collections.
- Ingevity has a significant $750 million revolver of which $620 million was available at year end. Out of an abundance of caution, the company recently withdrew $250 million from this revolver.
- Excluding commitments to letters of credit, approximately $350 million of additional funds are available to the company.
- Moody’s recently upgraded Ingevity’s outlook from negative to stable as a result of its deleveraging since its acquisition of the Capa® caprolactones business from Perstorp AB.
Ingevity: Purify, Protect and Enhance
Ingevity provides specialty chemicals, high-performance carbon materials and engineered polymers that purify, protect and enhance the world around us. Through a team of talented and experienced people, Ingevity develops, manufactures, and brings to market products and processes that help customers solve complex problems. These products are used in a variety of demanding applications, including asphalt paving, oil exploration and production, agrochemicals, adhesives, lubricants, publication inks, coatings, elastomers, bio-plastics and automotive components that reduce gasoline vapor emissions. Headquartered in North Charleston, South Carolina, Ingevity operates from 25 locations around the world and employs approximately 1,850 people. The company is traded on the New York Stock Exchange (NYSE: NGVT). For more information visit www.ingevity.com.
This press release contains “forward-looking statements” within the meaning of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. Such forward looking statements generally include the words “may,” “could,” “should,” “believes,” “plans,” “intends,” “targets,” “will,” “expects,” “suggests,” “anticipates,” “outlook,” “continues,” “forecast,” “prospect,” “potential” or similar expressions. Forward-looking statements may include, without limitation, expected financial positions, results of operations and cash flows; financing plans; business strategies and expectations; operating plans; impact of coronavirus; synergies and the potential benefits of the acquisition of Perstorp Holding AB’s Capa caprolactone business (the “acquisition”); capital and other expenditures; competitive positions; growth opportunities for existing products; benefits from new technology and cost-reduction initiatives, plans and objectives; markets for securities and expected future repurchases of shares, including statements about the manner, amount and timing of repurchases. Like other businesses, Ingevity is subject to risks and uncertainties that could cause its actual results to differ materially from its expectations or that could cause other forward-looking statements to prove incorrect. Factors that could cause actual results to materially differ from those contained in the forward-looking statements, or that could cause other forward-looking statements to prove incorrect, include, without limitation, risks that the expected benefits from the acquisition will not be realized or will not be realized in the expected time period; the risk that the acquired business will not be integrated successfully; significant transaction costs; unknown or understated liabilities; general economic and financial conditions; international sales and operations; currency exchange rates and currency devaluation; compliance with U.S. and foreign regulations; competition from infringing intellectual property activity; attracting and retaining key personnel; changes in trade policy, including the imposition of tariffs; the impact of the United Kingdom’s withdrawal from the European Union; conditions in the automotive market or adoption of alternative technologies; worldwide air quality standards; a decrease in government infrastructure spending; declining volumes and downward pricing in the printing inks market; the limited supply of crude tall oil (“CTO”); lack of access to sufficient CTO; access to and pricing of raw materials; competition from producers of alternative products and new technologies, and new or emerging competitors; a prolonged period of low energy prices; the provision of services by third parties at several facilities; natural disasters, such as hurricanes, winter or tropical storms, earthquakes, floods, fires; the adverse effect of the coronavirus on our global sales and operations, demand for our automotive carbon products, and our manufacturing facilities and supply chain; other unanticipated problems such as labor difficulties including renewal of collective bargaining agreements, equipment failure or unscheduled maintenance and repair; protection of intellectual property and proprietary information; information technology security breaches and other disruptions; government policies and regulations, including, but not limited to, those affecting the environment, climate change, tax policies, tariffs and the chemicals industry; and lawsuits arising out of environmental damage or personal injuries associated with chemical or other manufacturing processes. These and other important factors that could cause actual results or events to differ materially from those expressed in forward-looking statements that may have been made in this document are and will be more particularly described in our filings with the U.S. Securities and Exchange Commission, including our Form 10-K for the year ended December 31, 2019 and our other periodic filings. Readers are cautioned not to place undue reliance on Ingevity’s projections and forward-looking statements, which speak only as the date thereof. Ingevity undertakes no obligation to publicly release any revision to the projections and forward-looking statements contained in this press release, or to update them to reflect events or circumstances occurring after the date of this announcement.