Ingevity Corporation (NYSE:NGVT) Q3 2017 Earnings Conference Call - Final Transcript
Nov 02, 2017 • 10:00 am ET
Ladies and gentlemen, thank you for standing by. Welcome to the Ingevity Third Quarter Earnings Conference Call. At this time, all participants are in a listen-only mode. Later there will be an opportunity for your questions. (Operator Instructions) As a reminder, today's conference call is being recorded.
I would now like to turn the conference over to the VP of IR, Dan Gallagher. Please go ahead.
Good morning, everyone. Welcome to Ingevity's third quarter 2017 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 on the call. You can find it by visiting ir.ingevity.com under Events and Presentations.
(Forward-Looking Cautionary Statements)
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 number three. With me today are Michael Wilson, President and CEO; and John Fortson, EVP and CFO. First, Michael will comment on the highlights of the quarter and then he will review the performance of the two segments. John will discuss our current financial status, including year-to-date results and our revised guidance. Then Michael will make some brief closing remarks before we open the line for questions. Mike Smith, President of Performance Chemicals; and Ed Woodcock, President of Performance Materials will join the call for Q&A.
And with that I'll turn the call over to Michael.
Thank you for joining us this morning and for your continued interest in Ingevity. If you'll turn with me to slide number four, you will note some highlights for the quarter. We posted outstanding results in the third quarter.
Our strategic focus on high-value added product lines and our disciplined execution drove the improved performance in both revenues and earnings. Revenues grew approximately $12 million or about 5%, as higher volumes, price and mix impacts and favorable foreign currency exchange, all contributed to the increase. Adjusted EBITDA of $73 million was up $13 million versus the prior year's quarter. This represents a 22% increase.
In addition to higher volume gains and price improvement, earnings were further augmented by higher plant productivity, lower raw material costs and savings stemming from our strategic initiatives we took last year to lower our cost structure. As a result, we saw a sharp 390 basis point increase in adjusted EBITDA margins to 27.5%, making this our most profitable quarter since our spin-off in May of last year.
Turning to slide five. You'll see that the turnaround in our Performance Chemicals segment accelerated in the third quarter. Segment sales in the quarter were approximately $179 million, representing an increase of a little more than 3% versus the prior year quarter. The continued rebound in US drilling