Home / Businesswire / Innophos Holdings, Inc. Issues Preliminary Third-Quarter Results and Updates Full Year 2018 Guidance

Innophos Holdings, Inc. Issues Preliminary Third-Quarter Results and Updates Full Year 2018 Guidance

Remains on Path to Double Digit Year-On-Year Revenue Growth

Continues Price Actions to Offset Input Cost Increases

Projects $40 Million 2018 Cash Generation from Two Transactions

Q3 2018 Earnings Call to Be Held November 1st
at 9am ET

CRANBURY, N.J.–(BUSINESS WIRE)–Innophos Holdings, Inc. (NASDAQ:IPHS) today issued preliminary results
for its third quarter ending September 30, 2018 and updated full year
2018 guidance.

This update is preliminary in nature, based upon information
available to the Company as of the date of this release and is subject
to further changes upon completion of the Company's standard closing
procedures. This update has not been reviewed or verified by the
Company's independent auditors.

The Company is revising its full year 2018 revenue and adjusted earnings
before interest, taxes, depreciation and amortization (EBITDA) guidance
with revenue expected to grow 10% to 12% (previously was 12% to 14%)
compared with full year 2017 revenue of $722 million. Adjusted EBITDA is
expected to grow 3% to 7% (previously was 15% to 17%) compared with
adjusted EBITDA of $120 million for full year 2017.

The Company anticipates softer sequential sales in the second half of
2018 compared with the first half of the current year with Q3 sales
estimated at $197 million. The revised revenue guidance reflects
lower-than-expected nutrition sales in the second half of 2018,
principally driven by the Company’s decision to discontinue a portion of
lower-margin trading business ahead of plan. To better position for
future revenue and earnings growth, the Company continues to actively
transition the lower-margin ingredients portion of its acquired
portfolio to more value-adding solutions.

The Company has revised its full year adjusted EBITDA guidance, with Q3
estimated to be in the range of $30 million to $32 million, which is
sequentially in line with Q1 and Q2 of 2018. This revision reflects a
shift in the timing of the anticipated initial value chain benefits from
2018 to 2019 due to various factors, including a delay in receiving long
lead-time environmental and operational government permits, which are
now finalized and have been received. Additionally, the Company
experienced isolated operations-related issues and expenses, which the
Company is actively addressing. The Company has continued to advance the
completion of the targeted supply chain redesign. As a result, Innophos
continues to expect full benefits of the strategic value chain
repositioning and manufacturing optimization program to materialize in
H2 2019 and reiterates its expectation to deliver adjusted diluted EPS
improvement of 10% by the end of 2019.

During the first half of 2018, selling price increases were effective in
offsetting input cost increases. In response to the operating
environment continuing to show cost inflation, the Company has continued
to take further price increase actions.

Additionally, the Company immediately took initial SG&A cost actions,
which are anticipated to deliver benefits in both Q3 and Q4 of 2018 and
will carry forward into 2019. The Company continues to evaluate
additional cost savings opportunities.

Further, the Company has taken steps to protect its 2018 free cash flow
delivery and is announcing its intention to finalize a sale lease-back
transaction during Q4 on a non-core asset for an estimated $20 million
in cash. This transaction, along with the previously communicated $20
million Nutrien payment, is expected to generate an estimated $40
million in positive cash flow in the fourth quarter of 2018.

“We are acting swiftly to manage the dynamics of the business by
implementing cost and pricing actions while simultaneously executing
against key initiatives under our Strategic Pillars,” said Kim Ann Mink,
Ph.D., Chairman, President and Chief Executive Officer. “We remain
confident that our strategic programs are positioning Innophos to
deliver long-term value for our customers and shareholders, and that we
are on track to achieve our Vision 2022 goals.”

Q3 2018 Conference Call

Innophos announced that it will host its third quarter 2018 conference
call on Thursday, November 1, 2018 at 9:00 am ET to discuss its earnings
results. The press release detailing third-quarter 2018 results will be
issued on the morning of November 1st prior to the call.

Those who wish to listen to the conference call webcast should visit the
“Investors” section of the Company’s website at www.innophos.com.
The live call also can be accessed by dialing (877) 604-1612 (U.S.) or
(201) 389-0883 (international). If you are unable to listen to the live
call, the webcast will be archived on the Company’s website.
In addition, a telephone replay will be available between November 1,
2018 and November 15, 2018. The replay is accessible by dialing (877)
660-6853 (U.S.) or (201) 612-7415 (international) and entering the
Conference ID number 13684095.

About the Company

Innophos is a leading international producer of specialty ingredient
solutions that deliver far-reaching, versatile benefits for the food,
health, nutrition and industrial markets. We leverage our expertise in
the science and technology of blending and formulating phosphate,
mineral, enzyme and botanical based ingredients to help our customers
offer products that are tasty, healthy, nutritious and economical.
Headquartered in Cranbury, New Jersey, Innophos has manufacturing
operations across the United States, in Canada, Mexico and China. For
more information, please visit www.innophos.com.

Safe Harbor for Forward-Looking and Cautionary

This press release contains or may contain forward-looking statements
within the meaning of Section 27a of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. The Company intends these forward-looking statements to be
covered by the safe harbor provisions for such statements. Statements
made in this press release that relate to our future performance or
future financial results or other future events (which may be identified
by such terms as “expect”, “estimate”, “anticipate”, “assume”,
“believe”, “plan”, “intend’, “may”, “will”, “should”, “outlook”,
“guidance”, “target”, “opportunity”, “potential” or similar terms and
variations or the negative thereof) are forward-looking statements,
including the Company’s expectations regarding the business environment
and the Company’s overall guidance regarding future performance and
growth. These statements are based on our current beliefs and
expectations and are subject to significant risks and uncertainties.
Actual results may materially differ from the expectations expressed in
or implied by these forward-looking statements. Factors that could cause
the Company’s actual results to differ materially include, but are not
limited to: (1) global macroeconomic conditions and trends; (2) the
behavior of financial markets, including fluctuations in foreign
currencies, interest rates and turmoil in capital markets; (3) changes
in regulatory controls regarding tariffs, duties, taxes and income tax
rates; (4) the Company’s ability to implement and refine its Vision 2022
strategic roadmap; (5) the Company’s ability to successfully identify
and complete acquisitions in line with its Vision 2022 strategic roadmap
and effectively operate and integrate acquired businesses to realize the
anticipated benefits of those acquisitions; (6) the Company’s ability to
realize expected cost savings and efficiencies from its performance
improvement and other optimization initiatives; (7) the Company’s
ability to effectively compete in its markets, and to successfully
develop new and competitive products that appeal to its customers; (8)
changes in consumer preferences and demand for the Company’s products or
a decline in consumer confidence and spending; (9) the Company’s ability
to benefit from its investments in assets and human capital and the
ability to complete projects successfully and on budget; (10) economic,
regulatory and political risks associated with the Company’s
international operations, most notably Mexico and China; (11) volatility
and increases in the price of raw materials, energy and transportation,
and fluctuations in the quality and availability of raw materials and
process aids; (12) the impact of a disruption in the Company’s supply
chain or its relationship with its suppliers; (13) the Company’s ability
to comply with, and the costs associated with compliance with, U.S. and
foreign environmental protection laws and (14) the Company’s ability to
meet quality and regulatory standards in the various jurisdictions in
which it has operations or conducts business. We caution you to consider
the important risks and other factors as set forth in the
forward-looking statements section and in Item 1A Risk Factors in our
most recent Annual Report on Form 10-K, as amended by subsequent reports
on Forms 10-Q and 8-K. We do not undertake to update the forward-looking
statements to reflect the impact of circumstances or events that may
arise after the date of the forward-looking statements.

Additional Information

Free cash flow is a supplemental financial measure that is not required
by, or presented in accordance with, US GAAP. The Company believes free
cash flow is helpful in analyzing the cash flow generating capability of
the business and as a performance measure for purposes of presentation
in this release. The Company defines free cash flow as net cash provided
from operating activities plus cash used for capital expenditures plus
cash received from sale leaseback transactions.

EBITDA, adjusted EBITDA, adjusted net income and adjusted diluted EPS
are supplemental financial measures that are not required by, or
presented in accordance with, US GAAP. The Company believes EBITDA and
adjusted EBITDA are helpful in analyzing the cash flow generating
capability of the business and as performance measures for purposes of
presentation in this release.

Innophos is not able to provide a reconciliation of its expectation for
adjusted earnings to 2018 and 2019 GAAP net income given the dynamic
nature of the strategic value chain repositioning program expenses that
may be incurred. As a result, we are currently unable to quantify
accurately certain amounts that would be required to be included in GAAP
net income for 2018 or 2019 or the individual adjustments for such
reconciliation. In addition, we believe such reconciliation would imply
a degree of precision that would be confusing or misleading to investors.


Mark Feuerbach, 609-366-1204
[email protected]
Merrill Associates
Ryan Flaim, 617-542-5300
[email protected]