Ingevity Corporation Common Stock

Greetings. Welcome to the third quarter 2020 earnings webcast and conference call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to your host, Jack Maher. You may begin.

Thank you, Somali. Good morning, everyone. Welcome to Ingevity's third quarter 2020 earnings conference call. Earlier this morning, we posted a presentation onto the investors section of our website. If you haven't already done so, I would encourage you to download this file so you can follow along during the call. You can find it by visiting ir.ingevity.com under events and presentations. For participants who are logged into our webcast, Slide number two of that deck, you'll see our disclaimer that today's earnings call may contain forward-looking statements. Relevant factors that could cause actual results to differ materially from these forward-looking statements are contained in our earnings release and in our SEC filings, including our Form 10-K and our most recent Form 10-Q. Mangevity undertakes no obligation to publicly release any revision to the projections and forward-looking statements made during this call or to update them to reflect events or circumstances occurring after the date of this call. Throughout this call, we may refer to non-GAAP financial measures, which are intended to supplement, not substitute, for comparable GAAP measures. Definitions of these non-GAAP financial measures and reconciliations to comparable GAAP financial measures are included in our earnings release and can be found on the investor relations section of our website. Our agenda is on slide three. With me today are John Fortson, President and CEO and interim CFO, Mike Smith, President of Performance Chemicals, Ed Woodcock, President of Performance Materials, and Bill Hamilton, Vice President of Financial Planning and Analysis and Treasury. First, John will comment on the highlights of the quarter and our impressive results despite the COVID weakened economy. Then, Mike and Ed will review the performance of our two segments. Bill will discuss our current financial status and our recent senior note offerings. And then John will comment on our revised guidance and provide an overview of what we're calling Ingevity 2.0, a strategic approach to growth under his leadership as CEO. With that, I'll turn the call over to our CEO, John Fortson.

Thanks, Jack. Good morning, everyone. Thank you for joining us this morning. We appreciate your continued interest in longevity. If you turn to slide four, you'll note some highlights for the quarter. Overall, this was a great quarter, particularly with compared to the challenges we faced in the second quarter. Revenues in the third quarter were $332 million, down only 8% when compared to the previous year's quarter, despite the economic impacts of COVID-19. The Japanese third quarter results were driven by strong rebounds in automotive sales and production worldwide versus a weak second quarter, along with continued strong paving activity in both North America and internationally. Cost reduction actions and strong execution also helped set several records in our performance. These positives were partially offset by a weakened economic environment due to COVID that particularly impacted our performance chemicals businesses. with the exception of pavement technologies, which held up fairly well in this environment. With respect to earnings, the tested EBITDA were $128 million, up almost 12% from the previous year's quarter. This was an all-time quarterly record. The cost reduction initiatives we put into place that resulted in a leaner cost structure and our ability to effectively execute helped partially offset the declines in volumes on a consolidated basis. Our adjusted EBITDA margin for the company was 38.5%, which was also an all-time quarterly record. For the fourth quarter, we also generated strong free cash flow of $73.5 million. I want to thank everyone on the Ingevity team for all their work over the last six months. We have navigated the ups and downs in both of our segments. The team in Williamsboro, Georgia, where we produce our honeycomb scrubbers, continues to set production records. Recently, Some of the leadership team and I visited our Derrida, Louisiana pine chemicals facility. They have not missed a beat, despite having to deal with two hurricanes and a tropical storm in an eight-week period. The plant continues to run, even as many of our employees were without power at their residences for several weeks. Our performance this quarter is a testament to their efforts across the company. If you turn to slide five, you'll see the third quarter results for performance chemicals. At this point, I'll turn the call over to Mike Smith.