Innophos Holdings, Inc. Reports Third Quarter 2016 Results

CRANBURY, N.J., Oct. 27, 2016

Q3 2016 Highlights

• Net income of $14 million was up 151% year-over-year on a GAAP basis and up 13% on an adjusted basis, despite a 7% decrease in sales
• Strong adjusted EBITDA performance of $34 million, or 18% of sales, up 192 basis points sequentially and 291 basis points year-over-year
• Working capital reductions drove strong cash delivery with $40 million operating cash flow and $33 million free cash flow
• Entered two-year tolling agreement for GTSP co-product business effective December 1, 2016
• Progress against three strategic pillars of operational excellence, commercial excellence and strategic growth

"Innophos delivered another solid quarter highlighted by significant improvements in net income, the highest adjusted EBITDA in eight quarters, and strong cash generation," said Kim Ann Mink, Ph.D., chief executive officer. "Our ability to maintain margins despite ongoing market headwinds is the direct result of our ability to reduce costs across the organization through our operational excellence initiatives. Through these efforts we have now identified a procurement savings pipeline of $13 to $15 million, 75% of which we expect to be recognized in our 2016 P&L.

"Our focus on efficient working capital drove another period of strong free cash flow generation. As a result, we are well positioned to invest in both organic and inorganic strategic growth opportunities, while also continuing to return value to our shareholders through our dividend program."

Dr. Mink continued, "The GTSP tolling agreement announced today reflects our commitment to deliver on what we promise. Once the agreement takes effect it will provide us with an outlet for our GTSP co-product and reduce GTSP earnings volatility. Further, this arrangement will eliminate the need for us to expend valuable resources on managing this non-core product line and market. 

"We are making significant headway in realizing our vision of transforming Innophos into a market-oriented growth company that provides a broad set of value-added and innovative technology-based ingredient solutions for the food, health and nutrition markets," Dr. Mink said. "The three strategic pillars of our transformation are at the core of realizing this vision. As we look ahead, our priorities remain to finalize our strategic growth roadmap and strengthen the foundation of our business by continuing to execute against our operational excellence and commercial excellence initiatives."