Ingevity lowers net leverage to 2.9x, aims for 2.8x ratio by year-end

By Devika Patel

Knoxville, Tenn., Oct. 24 – Ingevity Corp. expects to cut its leverage ratio to 2.8x by year-end.

The company generated $97 million of free cash flow last quarter, which was used to reduce leverage.

“Our near-term focus remains on de-levering our balance sheet to targeted ranges,” president and chief executive officer D. Michael Wilson said on the company’s third quarter ended Sept. 30 earnings conference call on Thursday.

“For the quarter, we generated outstanding free cash flow of $97 million, up 40% versus last year’s quarter.

“This reduced our leverage and brought our net debt to adjusted EBITDA down to 2.9x,” Wilson said.

The company seeks to lower its net debt to last 12 months’ adjusted EBITDA leverage ratio, which is currently 2.9x.

“We are committed to driving down our net debt ratio and are now targeting somewhere below 2.8x by the end of the year,” executive vice president, treasurer and chief financial officer John Fortson said on the call.

Adjusted EBITDA was $114 million for the quarter, compared to adjusted EBITDA of $90.7 million for the third quarter of 2018.

Cash and cash equivalents were $75.6 million as of Sept. 30, 2019, compared to $77.5 million as of Dec. 31, 2018.

The company had $555 million of availability under its revolver.

Long-term debt was $1,294,400,000 as of Sept. 30, 2019, compared to $741.2 million as of Dec. 31, 2018.

Net debt, as of Sept. 30, was $1,176,000,000.

North Charleston, S.C.-based Ingevity manufactures specialty chemicals and high-performance activated carbon materials.

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