Ingevity Corporation Common Stock

Good morning, my name is Rika and I will be your conference operator for today. At this time, I would like to welcome everyone to the Ingevity third quarter 2022 earnings call and webcast. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, please press star, then two. Thank you. John Naipova, Treasurer of Investor Relations, you may begin your conference.

Thank you, Parika. Good morning, and welcome to Ingevity's third quarter 2022 earnings call. Early this morning, we posted a presentation on our investor site that you can use to follow today's discussion. It can be found on ir.ingevity.com under Events and Presentations. Also, 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 measures are included in our earnings release and are also in our Form 10-K. We may also make forward-looking statements regarding future events and future financial performance of the company during this call. And we caution you that these statements are just projections and actual results or events may differ materially from those projections as further described in our earnings release. Our agenda is on slide three. Our speakers today are John Fortson, our President and CEO, Mary Hall, our CFO, Ed Woodcock, President of Performance Materials, and Rich White, President of Industrial Specialties and Pavement Technologies. In addition, Steve Hume, President, Engineered Polymers, and Eric Ripple, Chief Growth and Innovation Officer, will be available for questions and comments. John will start us off with some highlights for the quarter. Mary will follow with a review of our consolidated financial performance. Rich, on behalf of his performance chemicals segment co-lead, Steve Hume, will discuss the entire performance chemicals segment. And Ed will review the results of performance materials. Finally, John will conclude with our outlook for 2022. With that, over to you, John.

Thanks john and good morning everyone, please turn to slide four and we'll jump right in. Jeopardy had another great quarter, and I want to thank everyone on the team for how well they have navigated the current market. This is an environment where we continue to hear other chemical and material companies reduce their guidance and paint a pessimistic outlook. Yet for longevity this quarter we posted record sales adjusted EBITDA and adjusted EPS. Our performance chemical segment saw record sales across its businesses and engineered polymers, pavement technologies, and industrial specialties. Performance materials saw significant volume growth as global auto production increased during the quarter. Our consolidated results are directly due to our team's focus on attractive end markets where customers require unique performance characteristics and where we can gain market share. For example, With increased automotive production this quarter our engineer polymers CAPA business sold more higher value products used in auto applications. Such as paint protective film and jounce bumpers and, of course, higher auto production aided performance materials with significant volume growth in our activated carbon and honeycombs. Another end market where our products are experiencing strong demand is road construction municipalities are increasingly asking for sustainable performance enhancing products like evo therm. which lowers the amount of energy needed to pave roads while reducing harmful emissions. In the quarter, input costs, including energy, raw materials, and logistics, continued to rise, and industrial specialties volume was constrained due to lower availability of key raw materials. But by strategically focusing our product mix on derivatized products that bring higher value to both our customers and to Ingevity, in markets like oilfield, agricultural chemicals, and adhesives. Industrial Specialties was able to post a record sales quarter even on lower volume. In other businesses, we have experienced a lag between the timing of higher input costs and our price increases either due to the speed with which the cost rose or due to the nature of our supply agreements. These are timing issues that we'll correct as we adjust prices and represent expected upside into next year. We continue to generate strong free cash flow And this allowed us to return cash to shareholders pay down some debt and continue spending on growth initiatives. As we announced a few weeks ago we completed the acquisition of ozark materials and are excited to have the ozark family, especially products to support this end market. Our integration efforts are moving forward and remain on track, they are a high quality team and a great addition to longevity. There are tremendous opportunities for our teams to work together to better serve our customers with a broad array of products and technologies. We were also pleased to announce the completion of one of our key organic growth initiatives as we finished the addition of Caprolactone polyols production at our Derrida, Louisiana site. We have been telling you about the demand customers have for our Kappa polyols. Our polyols enhance high performing end use products such as top coats on autos or planes, coatings on specialty flooring and boats, protective films, and footwear by making them stronger and more durable. The addition will increase our global capacity by 40%. Before I turn it over to Mary, you all know that ESG is in our DNA and longevity. Our purpose is to purify, protect, and enhance the world around us, and we work to achieve this every day. As such, we were extremely pleased when we were awarded the Gold Rating for Corporate Social Responsibility by Ecovatus. This rating puts us in the top 3% of respondents in the specialty chemical sector. It is a reflection of who we are, what we do, and how we do it. With that, I'll turn it over to Mary to discuss the financials.