INNOSPEC INC., 10-Q filed on 08 Nov 23
 | XBRL Documents
v3.23.3
Cover Page - shares
 9 Months Ended
Sep. 30, 2023
Nov. 01, 2023
Cover [Abstract]    
Document Type 10-Q  
Amendment Flag false  
Document Fiscal Year Focus 2023  
Document Fiscal Period Focus Q3  
Document Quarterly Report true  
Document Transition Report false  
Current Fiscal Year End Date --12-31  
Document Period End Date Sep. 30, 2023  
Securities Act File Number 1-13879  
Entity Registrant Name INNOSPEC INC.  
Entity Central Index Key 0001054905  
Entity Incorporation, State or Country Code DE  
Entity Tax Identification Number 98-0181725  
City Area Code 303  
Entity Address, Postal Zip Code 80112  
Local Phone Number 792 5554  
Security Exchange Name NASDAQ  
Title of 12(b) Security Common stock  
Entity Filer Category Large Accelerated Filer  
Entity Small Business false  
Entity Emerging Growth Company false  
Entity Shell Company false  
Entity Common Stock, Shares Outstanding   24,865,799
Entity Address, Address Line One 8310 South Valley Highway  
Entity Address, Address Line Two Suite 350  
Entity Address, City or Town Englewood  
Entity Address, State or Province CO  
Trading Symbol IOSP  
Entity Current Reporting Status Yes  
Entity Interactive Data Current Yes  
v3.23.3
Condensed Consolidated Statements of Income (Unaudited) - USD ($)
shares in Thousands, $ in Millions
 3 Months Ended 9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Income Statement [Abstract]        
Net sales $ 464.1 $ 513.0 $ 1,454.1 $ 1,453.0
Cost of goods sold (326.9) (357.0) (1,018.7) (1,017.9)
Gross profit 137.2 156.0 435.4 435.1
Operating expenses:        
Selling, general and administrative (83.7) (95.8) (285.5) (264.1)
Research and development (11.6) (10.1) (32.8) (30.3)
Total operating expenses (95.3) (105.9) (318.3) (294.4)
Operating income 41.9 50.1 117.1 140.7
Other income/(expense), net 4.8 (0.9) 11.2 (0.2)
Interest income/(expense), net 0.8 (0.3) 0.8 (1.1)
Income before income tax expense 47.5 48.9 129.1 139.4
Income tax expense (8.3) (10.2) (27.8) (31.9)
Net income $ 39.2 $ 38.7 $ 101.3 $ 107.5
Earnings per share:        
Basic $ 1.58 $ 1.56 $ 4.08 $ 4.34
Diluted $ 1.57 $ 1.55 $ 4.05 $ 4.3
Weighted average shares outstanding (in thousands):        
Basic 24,866 24,786 24,845 24,794
Diluted 25,006 24,965 25,000 24,976
v3.23.3
Condensed Consolidated Statements of Comprehensive Income (Unaudited) - USD ($)
$ in Millions
 3 Months Ended 9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Statement of Comprehensive Income [Abstract]        
Net income $ 39.2 $ 38.7 $ 101.3 $ 107.5
Changes in cumulative translation adjustment, net of tax of $0.5 million, $1.0 million, $(0.2) million and $2.2 million, respectively (7.9) (16.4) (1.8) (37.1)
Amortization of prior service cost, net of tax of $(0.1) million, $0.0 million, $(0.1) million and $(0.1) million, respectively 0.1 0.1 0.3 0.3
Amortization of actuarial net losses/(gains), net of tax of $0.2 million, $0.0 million, $0.4 million and $0.0 million, respectively (0.4) 0.1 (1.2) 0.4
Total other comprehensive income/(loss) (8.2) (16.2) (2.7) (36.4)
Total comprehensive income $ 31.0 $ 22.5 $ 98.6 $ 71.1
v3.23.3
Condensed Consolidated Statements of Comprehensive Income (Parenthetical) (Unaudited) - USD ($)
$ in Millions
 3 Months Ended 9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Statement of Comprehensive Income [Abstract]        
Changes in cumulative translation adjustment, tax $ 0.5 $ 1.0 $ (0.2) $ 2.2
Amortization of prior service credit, tax 0.1 0.0 0.1 0.1
Amortization of actuarial net losses, tax $ 0.2 $ 0.0 $ 0.4 $ 0.0
v3.23.3
Condensed Consolidated Balance Sheets (Unaudited) - USD ($)
$ in Millions
Sep. 30, 2023
Dec. 31, 2022
Current assets:    
Cash and cash equivalents $ 207.2 $ 147.1
Trade and other accounts receivable (less allowances of $9.6 million and $7.7 million respectively) 305.2 334.6
Inventories (less allowances of $27.2 million and $27.1 million respectively):    
Finished goods 234.0 259.3
Raw materials 97.5 113.8
Total inventories 331.5 373.1
Prepaid expenses 7.7 14.1
Prepaid income taxes 10.7 3.3
Other current assets 1.4 0.4
Total current assets 863.7 872.6
Net property, plant and equipment 244.6 220.9
Operating lease right-of-use assets 42.5 45.3
Goodwill 357.9 358.8
Net book amount at September 30 47.8 45.0
Deferred tax assets 5.9 5.9
Pension asset 49.7 48.1
Other non-current assets 6.5 7.1
Total assets 1,618.6 1,603.7
Current liabilities:    
Accounts payable 146.1 165.3
Accrued liabilities 165.1 202.9
Current portion of operating lease liabilities 13.1 13.9
Current portion of plant closure provisions 4.7 5.3
Current portion of accrued income taxes 15.2 18.4
Total current liabilities 344.2 405.8
Operating lease liabilities, net of current portion 29.4 31.4
Plant closure provisions, net of current portion 51.1 51.9
Accrued income taxes, net of current portion 11.6 21.0
Unrecognized tax benefits 14.1 13.4
Deferred tax liabilities 26.4 26.2
Pension liabilities and post-employment benefits 12.2 12.2
Other non-current liabilities 1.5 1.4
Total liabilities 490.5 563.3
Equity:    
Common stock, $0.01 par value, authorized 40,000,000 shares, issued 29,554,500 shares 0.3 0.3
Additional paid-in capital 358.9 354.1
Treasury stock (4,688,514 and 4,788,966 shares at cost, respectively) (94.2) (95.4)
Retained earnings 1,008.3 924.2
Accumulated other comprehensive loss (147.9) (145.2)
Total Innospec stockholders' equity 1,125.4 1,038.0
Non-controlling interest 2.7 2.4
Total equity 1,128.1 1,040.4
Total liabilities and equity $ 1,618.6 $ 1,603.7
v3.23.3
Condensed Consolidated Balance Sheets (Parenthetical) (Unaudited) - USD ($)
$ in Millions
Sep. 30, 2023
Dec. 31, 2022
Statement of Financial Position [Abstract]    
Allowances for doubtful accounts $ 7.8 $ 7.7
Inventory allowances $ 27.4 $ 27.1
Common stock, par value $ 0.01 $ 0.01
Common stock, shares authorized 40,000,000 40,000,000
Common stock, shares issued 29,554,500 29,554,500
Treasury stock, shares 4,687,975 4,788,966
v3.23.3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)
$ in Millions
 9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Cash Flows from Operating Activities    
Net income $ 101.3 $ 107.5
Adjustments to reconcile net income to net cash provided by operating activities:    
Depreciation and amortization 29.1 30.9
Deferred taxes 0.5 0.6
Non-cash movements on defined benefit pension plans (2.5) (1.9)
Stock option compensation 5.9 4.7
Changes in assets and liabilities, net of effects of acquired and divested companies:    
Trade and other accounts receivable 29.5 (70.1)
Inventories 42.0 (112.6)
Prepaid expenses 6.5 11.2
Accounts payable and accrued liabilities (57.2) 38.9
Plant closure provisions (1.2) 0.3
Accrued income taxes (20.2) (4.0)
Unrecognized tax benefits 0.7 0.0
Other assets and liabilities 0.5 (2.2)
Net cash provided by/(used in) operating activities 134.9 3.3
Cash Flows from Investing Activities    
Capital expenditures (45.2) (27.1)
Internally developed software (10.8) 0.0
Proceeds on disposal of property, plant and equipment 0.0 0.1
Net cash used in investing activities (56.0) (27.0)
Cash Flows from Financing Activities    
Non-controlling interest 0.3 1.9
Proceeds from revolving credit facility 0.0 0.0
Repayments of revolving credit facility 0.0 0.0
Repayments of finance leases 0.0 (0.1)
Refinancing costs (1.4) 0.0
Dividend paid (17.2) (15.6)
Issue of treasury stock 0.7 2.1
Repurchase of common stock (1.0) (5.0)
Net cash used in financing activities (18.6) (16.7)
Effect of foreign currency exchange rate changes on cash (0.2) (0.9)
Net change in cash and cash equivalents 60.1 (41.3)
Cash and cash equivalents at beginning of period 147.1 141.8
Cash and cash equivalents at end of period $ 207.2 $ 100.5
v3.23.3
Condensed Consolidated Statements of Equity (Unaudited) - USD ($)
$ in Millions
Total
Common Stock [Member]
Additional Paid-In Capital [Member]
Treasury Stock [Member]
Retained Earnings [Member]
Accumulated Other Comprehensive Loss [Member]
Non-Controlling Interest [Member]
Beginning Balance at Dec. 31, 2021 $ 1,033.0 $ 0.3 $ 346.7 $ (90.6) $ 822.9 $ (46.9) $ 0.6
Net income 107.5       107.5    
Dividend paid (15.6)       (15.6)    
Changes in cumulative translation adjustment, net of tax (37.1)         (37.1)  
Non-controlling interest 1.8           1.8
Share of net income 0.1           0.1
Treasury stock reissued 1.8   0.8 1.0      
Treasury stock repurchased (5.0)     (5.0)      
Stock option compensation 4.7   4.7        
Amortization of prior service cost, net of tax 0.3         0.3  
Amortization of actuarial net losses, net of tax 0.4         0.4  
Ending Balance at Sep. 30, 2022 1,091.9 0.3 352.2 (94.6) 914.8 (83.3) 2.5
Beginning Balance at Jun. 30, 2022 1,068.6 0.3 350.9 (92.3) 876.1 (67.1) 0.7
Net income 38.7       38.7    
Changes in cumulative translation adjustment, net of tax (16.4)         (16.4)  
Non-controlling interest 1.8           1.8
Treasury stock reissued (0.2)   (0.2)        
Treasury stock repurchased (2.3)     (2.3)      
Stock option compensation 1.5   1.5        
Amortization of prior service cost, net of tax 0.1         0.1  
Amortization of actuarial net losses, net of tax 0.1         0.1  
Ending Balance at Sep. 30, 2022 1,091.9 0.3 352.2 (94.6) 914.8 (83.3) 2.5
Beginning Balance at Dec. 31, 2022 1,040.4 0.3 354.1 (95.4) 924.2 (145.2) 2.4
Net income 101.3       101.3    
Dividend paid (17.2)       (17.2)    
Changes in cumulative translation adjustment, net of tax (1.8)         (1.8)  
Share of net income 0.3           0.3
Treasury stock reissued 1.1   (1.1) 2.2      
Treasury stock repurchased (1.0)     (1.0)      
Stock option compensation 5.9   5.9        
Amortization of prior service cost, net of tax 0.3         0.3  
Amortization of actuarial net losses, net of tax (1.2)         (1.2)  
Ending Balance at Sep. 30, 2023 1,128.1 0.3 358.9 (94.2) 1,008.3 (147.9) 2.7
Beginning Balance at Jun. 30, 2023 1,094.8 0.3 356.7 (94.2) 969.1 (139.7) 2.6
Net income 39.2       39.2    
Changes in cumulative translation adjustment, net of tax (7.9)         (7.9)  
Share of net income 0.1           0.1
Treasury stock reissued 0.3   0.2 0.1      
Treasury stock repurchased (0.1)     (0.1)      
Stock option compensation 2.0   2.0        
Amortization of prior service cost, net of tax 0.1         0.1  
Amortization of actuarial net losses, net of tax (0.4)         (0.4)  
Ending Balance at Sep. 30, 2023 $ 1,128.1 $ 0.3 $ 358.9 $ (94.2) $ 1,008.3 $ (147.9) $ 2.7
v3.23.3
Condensed Consolidated Statements of Equity (Parenthetical) (Unaudited) - $ / shares
 9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Statement of Stockholders' Equity [Abstract]    
Dividend paid, per share $ 0.69 $ 0.63
v3.23.3
Insider Trading Arrangements
 9 Months Ended
Sep. 30, 2023
Trading Arrangements, by Individual  
Rule 10b5-1 Arrangement Adopted false
Non-Rule 10b5-1 Arrangement Adopted false
Rule 10b5-1 Arrangement Terminated false
Non-Rule 10b5-1 Arrangement Terminated false
v3.23.3
Basis of Presentation
 9 Months Ended
Sep. 30, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Basis of Presentation

NOTE 1 – BASIS OF PRESENTATION

The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X under the Securities Exchange Act of 1934. Accordingly, they do not include all the information and notes necessary for a comprehensive presentation of financial position, results of operations and cash flows.

It is our opinion, however, that all adjustments (consisting of normal, recurring adjustments, unless otherwise disclosed) have been made which are necessary for the condensed consolidated financial statements to be fairly stated. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 filed on February 22, 2023 (the “2022 Form 10-K”).

The results for the interim period covered by this report are not necessarily indicative of the results to be expected for the full year.

When we use the terms “Innospec,” “the Corporation,” “the Company,” “Registrant,” “the Group,” “we,” “us” and “our,” we are referring to Innospec Inc. and its consolidated subsidiaries unless otherwise indicated or the context otherwise requires.
v3.23.3
Segment Reporting
 9 Months Ended
Sep. 30, 2023
Segment Reporting [Abstract]  
Segment Reporting

NOTE 2 – SEGMENT REPORTING

The Company reports its financial performance based on three reportable segments, which are Performance Chemicals, Fuel Specialties and Oilfield Services.

The Company evaluates the performance of its segments based on operating income. The following table analyzes sales and other financial information by the Company’s reportable segments:

 

 

Three Months Ended
September 30,

 

 

Nine Months Ended
September 30,

 

(in millions)

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Net Sales:

 

 

 

 

 

 

 

 

 

 

 

 

Personal Care

 

$

97.0

 

 

$

102.4

 

 

$

263.8

 

 

$

311.1

 

Home Care

 

 

22.3

 

 

 

22.6

 

 

 

65.7

 

 

 

72.3

 

Other

 

 

25.9

 

 

 

34.7

 

 

 

94.9

 

 

 

112.4

 

Performance Chemicals

 

 

145.2

 

 

 

159.7

 

 

 

424.4

 

 

 

495.8

 

Refinery and Performance

 

 

126.0

 

 

 

133.2

 

 

 

394.6

 

 

 

405.5

 

Other

 

 

43.3

 

 

 

45.5

 

 

 

119.2

 

 

 

141.4

 

Fuel Specialties

 

 

169.3

 

 

 

178.7

 

 

 

513.8

 

 

 

546.9

 

Oilfield Services

 

 

149.6

 

 

 

174.6

 

 

 

515.9

 

 

 

410.3

 

 

$

464.1

 

 

$

513.0

 

 

$

1,454.1

 

 

$

1,453.0

 

Operating income/(loss):

 

 

 

 

 

 

 

 

 

 

 

 

Performance Chemicals

 

$

16.9

 

 

$

25.4

 

 

$

36.5

 

 

$

79.5

 

Fuel Specialties

 

 

27.6

 

 

 

27.9

 

 

 

77.1

 

 

 

94.9

 

Oilfield Services

 

 

16.4

 

 

 

14.2

 

 

 

60.3

 

 

 

21.2

 

Corporate costs

 

 

(19.0

)

 

 

(17.4

)

 

 

(56.8

)

 

 

(54.9

)

Total operating income

 

$

41.9

 

 

$

50.1

 

 

$

117.1

 

 

$

140.7

 
v3.23.3
Earnings Per Share
 9 Months Ended
Sep. 30, 2023
Earnings Per Share [Abstract]  
Earnings per Share

NOTE 3 – EARNINGS PER SHARE

Basic earnings per share is based on the weighted average number of common shares outstanding during the period. Diluted earnings per share includes the effect of options that are dilutive and outstanding during the period under the treasury stock method. Per share amounts are computed as follows:

 

 

Three Months Ended
September 30,

 

 

Nine Months Ended
September 30,

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Numerator (in millions):

 

 

 

 

 

 

 

 

 

 

 

 

Net income available to common stockholders

 

$

39.2

 

 

$

38.7

 

 

$

101.3

 

 

$

107.5

 

Denominator (in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding

 

 

24,866

 

 

 

24,786

 

 

 

24,845

 

 

 

24,794

 

Dilutive effect of stock options and awards

 

 

140

 

 

 

179

 

 

 

155

 

 

 

182

 

Denominator for diluted earnings per share

 

 

25,006

 

 

 

24,965

 

 

 

25,000

 

 

 

24,976

 

Net income per share, basic:

 

$

1.58

 

 

$

1.56

 

 

$

4.08

 

 

$

4.34

 

Net income per share, diluted:

 

$

1.57

 

 

$

1.55

 

 

$

4.05

 

 

$

4.30

 

 

In the three and nine months ended September 30, 2023, the average number of anti-dilutive options excluded from the calculation of diluted earnings per share were 21,950 and 29,293, respectively (three and nine months ended September 30, 2022 – 109,377 and 54,522, respectively).
v3.23.3
Goodwill
 9 Months Ended
Sep. 30, 2023
Goodwill and Intangible Assets Disclosure [Abstract]  
Goodwill

NOTE 4 – GOODWILL

The following table summarizes the goodwill movements in the year:

 

(in millions)

 

Gross Cost

 

Opening balance at January 1, 2023

 

$

358.8

 

Exchange effect

 

 

(0.9

)

Closing balance at September 30, 2023

 

$

357.9

 

 

The exchange effect for the nine months ended September 30, 2023 was $0.9 million relating to our Performance Chemicals segment.
v3.23.3
Other Intangible Assets
 9 Months Ended
Sep. 30, 2023
Goodwill and Intangible Assets Disclosure [Abstract]  
Other Intangible Assets

NOTE 5 – OTHER INTANGIBLE ASSETS

The following table analyzes other intangible assets movements in the year:

 

(in millions)

 

2023

 

Gross cost at January 1

 

$

291.1

 

Additions

 

 

10.8

 

Exchange effect

 

 

(0.3

)

Gross cost at September 30

 

 

301.6

 

Accumulated amortization at January 1

 

 

(246.1

)

Amortization expense

 

 

(8.0

)

Exchange effect

 

 

0.3

 

Accumulated amortization at September 30

 

 

(253.8

)

Net book amount at September 30

 

$

47.8

 

 

The amortization expense for the nine months ended September 30, 2023 was $8.0 million (nine months ended September 30, 2022 – $11.4 million).

 

In 2023, we capitalized $10.8 million in relation to our internally developed software for a new Enterprise Resource Planning (“ERP”) system covering our EMEA and ASPAC regions. The expenses capitalized include the acquisition costs for the software as well as the external and internal costs of the development.

v3.23.3
Pension and Post-Employment Benefits
 9 Months Ended
Sep. 30, 2023
Retirement Benefits [Abstract]  
Pension and Post-Employment Benefits

NOTE 6 – PENSION AND POST EMPLOYMENT BENEFITS

The Company maintains a defined benefit pension plan covering certain current and former employees in the United Kingdom (the “UK Plan”). The UK Plan is closed to future service accrual and has a large number of deferred and current pensioners. The assets of the UK Plan are predominantly insurance policies, operating as investment assets, covering all liabilities. This reduces the UK Plan’s potential reliance on the Company for future cash funding requirements.

 

The Company also maintains an unfunded defined benefit pension plan covering certain current and former employees in Germany (the “German plan”). The German plan is closed to new entrants and has no assets.

 

The net periodic benefit of these plans is shown in the following table:

 

 

Three Months Ended
September 30,

 

 

Nine Months Ended
September 30,

 

(in millions)

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Service cost

 

$

(0.9

)

 

$

(0.6

)

 

$

(2.7

)

 

$

(1.8

)

Interest cost on projected benefit obligation

 

 

(5.1

)

 

 

(2.4

)

 

 

(15.0

)

 

 

(7.8

)

Expected return on plan assets

 

 

6.5

 

 

 

3.8

 

 

 

19.0

 

 

 

12.3

 

Amortization of prior service cost

 

 

(0.2

)

 

 

(0.1

)

 

 

(0.4

)

 

 

(0.4

)

Amortization of actuarial net gains/(losses)

 

 

0.6

 

 

 

(0.1

)

 

 

1.6

 

 

 

(0.4

)

Net periodic benefit

 

$

0.9

 

 

$

0.6

 

 

$

2.5

 

 

$

1.9

 

 

The service cost has been recognized in selling, general and administrative expenses. All other items have been recognized within other income and expense. The amortization of prior service cost and actuarial net losses are a reclassification out of accumulated other comprehensive loss into other income and expense.

In addition, we have obligations for post-employment benefits in some of our other European businesses. As at September 30, 2023, we have recorded a liability of $3.9 million (December 31, 2022 – $4.1 million).
v3.23.3
Income Taxes
 9 Months Ended
Sep. 30, 2023
Income Tax Disclosure [Abstract]  
Income Taxes

NOTE 7 – INCOME TAXES

A roll-forward of unrecognized tax benefits and associated accrued interest and penalties is as follows:

 

(in millions)

 

Unrecognized
Tax Benefits

 

 

Interest and
Penalties

 

 

Total

 

Opening balance at January 1, 2023

 

$

10.2

 

 

$

3.2

 

 

$

13.4

 

Net change for tax positions of prior periods

 

 

—

 

 

 

0.7

 

 

 

0.7

 

Closing balance at September 30, 2023

 

 

10.2

 

 

 

3.9

 

 

 

14.1

 

Current

 

 

—

 

 

 

—

 

 

 

—

 

Non-current

 

$

10.2

 

 

$

3.9

 

 

$

14.1

 

 

All of the $14.1 million of unrecognized tax benefits, interest and penalties would impact our effective tax rate if recognized.

 

In 2021 a non-U.S. subsidiary, Innospec Limited, entered into a review by the U.K. tax authorities under the U.K.’s Profit Diversion Compliance Facility (“PDCF”) in relation to the period 2017 to 2020 inclusive. The Company has determined that additional tax and interest totaling $1.1 million may arise as a result of the ongoing review. This includes an increase in interest accrued of $0.1 million recorded in the nine months to September 30, 2023.

A non-U.S. subsidiary, Innospec Performance Chemicals Italia Srl, is subject to an ongoing tax audit in relation to the period 2011 to 2014 inclusive. The Company has determined that additional tax, interest and penalties totaling $3.2 million may arise as a consequence of the tax audit. As any additional tax arising as a consequence of the tax audit would be reimbursed by the previous owner under the terms of the sale and purchase agreement, an indemnification asset of the same amount is recorded in the financial statements to reflect this arrangement.

In 2018 the Company recorded an unrecognized tax benefit in relation to a potential adjustment that could arise as a consequence of the Tax Cuts and Jobs Act of 2017 (“Tax Act”), but for which retrospective adjustment to the filed 2017 U.S. federal income tax returns was not permissible. The Company has determined that additional tax, interest and penalties totaling $9.8 million may arise in relation to this item. This includes an increase in interest accrued of $0.6 million in the nine months to September 30, 2023.

Aside from certain tax returns that are closed after completion of a U.S. Internal Revenue Service (“IRS”) audit, the Company and its U.S. subsidiaries remain open to examination by the IRS for certain elements of year 2017 and for years 2019 onwards under the statute of limitations. The Company’s subsidiaries in foreign tax jurisdictions are open to examination including Brazil (2018 onwards), Germany (2018 onwards), and the U.K. (2017 onwards).
v3.23.3
Long-Term Debt
 9 Months Ended
Sep. 30, 2023
Debt Disclosure [Abstract]  
Long-Term Debt

NOTE 8 – LONG-TERM DEBT

As at September 30, 2023, and December 31, 2022, the Company had not drawn down on its revolving credit facility.

On May 31, 2023, Innospec Inc. and certain subsidiaries of the Company (together with the Company, the “Borrowers”) entered into a Multicurrency Revolving Facility Agreement with various lenders (the “Agreement”) which replaces the Company’s credit facility agreement dated September 26, 2019. The Agreement provides for a $250,000,000 four-year multicurrency revolving loan facility available to the Borrowers (the “Facility”). The Agreement also contains an accordion feature whereby the Company may elect to increase the total available borrowings by an aggregate amount of up to $125,000,000. The termination date of the Facility is May 30, 2027, but the Company has an option to request an extension of the Facility for a further year. As a consequence, the Company has capitalized $1.5 million of costs relating to the new Agreement which are to be amortized over the period to May 30, 2027. In addition the Company has written-off $0.5 million of capitalized costs relating to the previous agreement.

As at September 30, 2023, the deferred finance costs of $1.3 million (December 31, 2022 - $0.6 million) related to the arrangement of the credit facility, are included within other current and non-current assets at the balance sheet dates.
v3.23.3
Plant Closure Provisions
 9 Months Ended
Sep. 30, 2023
Restructuring and Related Activities [Abstract]  
Plant Closure Provisions

NOTE 9 – PLANT CLOSURE PROVISIONS

The Company has continuing plans to remediate manufacturing facilities at sites around the world as and when those operations are expected to cease, or we are required to decommission the sites according to local laws and regulations. The liability for estimated plant closure costs includes costs for environmental remediation liabilities and asset retirement obligations.

The principal site giving rise to asset retirement obligations is the manufacturing site at Ellesmere Port in the United Kingdom. There are also asset retirement obligations and environmental remediation liabilities on a much smaller scale in respect of other manufacturing sites.

 

Movements in the provisions are summarized as follows:

 

(in millions)

 

2023

 

Total at January 1

 

$

57.2

 

Charge for the period

 

 

2.7

 

Utilized in the period

 

 

(3.9

)

Exchange effect

 

 

(0.2

)

Total at September 30

 

 

55.8

 

Due within one year

 

 

(4.7

)

Due after one year

 

$

51.1

 

 

The charge for the nine months ended September 30, 2023 was $2.7 million (nine months ended September 30, 2022 – $2.7 million). The current year charge represents the accounting accretion only, with no changes for the expected cost and scope of future remediation activities. Amounts due within one year refer to provisions where expenditure is expected to arise within one year of the balance sheet date.
v3.23.3
Fair Value Measurements
 9 Months Ended
Sep. 30, 2023
Fair Value Disclosures [Abstract]  
Fair Value Measurements

NOTE 10 – FAIR VALUE MEASUREMENTS

The following table presents the carrying amount and fair values of the Company’s financial assets and liabilities measured on a recurring basis:

 

 

September 30, 2023

 

 

December 31, 2022

 

(in millions)

 

Carrying
Amount

 

 

Fair
Value

 

 

Carrying
Amount

 

 

Fair
Value

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

Non-derivatives:

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

207.2

 

 

$

207.2

 

 

$

147.1

 

 

$

147.1

 

Derivatives (Level 1 measurement):

 

 

 

 

 

 

 

 

 

 

 

 

Other current and non-current assets:

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency forward exchange contracts

 

 

1.0

 

 

 

1.0

 

 

 

—

 

 

 

—

 

Emissions Trading Scheme credits

 

 

3.2

 

 

 

3.2

 

 

 

2.7

 

 

 

2.7

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

Derivatives (Level 1 measurement):

 

 

 

 

 

 

 

 

 

 

 

 

Other current and non-current liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency forward exchange contracts

 

 

—

 

 

 

—

 

 

 

0.5

 

 

 

0.5

 

Non-financial liabilities (Level 3 measurement):

 

 

 

 

 

 

 

 

 

 

 

 

Other current and non-current liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Stock equivalent units

 

 

17.4

 

 

 

17.4

 

 

 

26.4

 

 

 

26.4

 

 

The following methods and assumptions were used to estimate the fair values:

Cash and cash equivalents: The carrying amount approximates fair value because of the short-term maturities of such instruments.

Emissions Trading Scheme credits: The fair value is determined by the open market pricing at the end of the reporting period.

Foreign currency forward exchange contracts: The fair value of derivatives relating to foreign currency forward exchange contracts are derived from current settlement prices and comparable contracts using current assumptions. Foreign currency forward exchange contracts primarily relate to contracts entered into to hedge future known transactions or hedge balance sheet net cash positions. The movements in the carrying amounts and fair values of these contracts are largely due to changes in exchange rates against the U.S. dollar.

Stock equivalent units: The fair values of stock equivalent units are calculated at each balance sheet date using either the Black-Scholes or Monte Carlo method depending on the terms of each grant.
v3.23.3
Derivative Instruments and Risk Management
 9 Months Ended
Sep. 30, 2023
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivative Instruments and Risk Management

NOTE 11 – DERIVATIVE INSTRUMENTS AND RISK MANAGEMENT

The Company enters into various foreign currency forward exchange contracts to minimize currency exchange rate exposure from expected future cash flows. As at September 30, 2023, the contracts have maturity dates of up to twelve months at the date of inception. These foreign currency forward exchange contracts have not been designated as hedging instruments, and their impact on the income statement for the first nine months of 2023 was a loss of $1.2 million (first nine months of 2022 – a gain of $6.5 million). The gain or loss has been recorded in other income or expense.
v3.23.3
Contingencies
 9 Months Ended
Sep. 30, 2023
Commitments and Contingencies Disclosure [Abstract]  
Contingencies

NOTE 12 – CONTINGENCIES

Legal matters

We are involved from time to time in claims and legal proceedings that result from, and are incidental to, the conduct of our business including business and commercial litigation, and employee and product liability claims.

As previously reported in the first and second quarters of 2023, we have lodged a civil and criminal legal claim related to a misappropriation of inventory and other losses incurred in Brazil. There is also an ongoing insurance claim related to the misappropriation of inventory element of the matter. Consistent with our accounting treatment in the first and second quarters, a corresponding asset for the potential legal or insurance recoveries has not been recorded for the resulting financial losses arising from this matter.

In addition, unrelated to the Brazil matter, in the unlikely event there are an unexpectedly large number of individual claims or proceedings with an adverse resolution, this could in the aggregate have a material adverse effect on the results of operations for a particular year or quarter.

Guarantees

The Company and certain of the Company’s consolidated subsidiaries are contingently liable for certain obligations of affiliated companies primarily in the form of guarantees of debt and performance under contracts entered into as a normal business practice. This includes guarantees of non-U.S. excise taxes and customs duties. As at September 30, 2023, such guarantees which are not recognized as liabilities in the condensed consolidated financial statements amounted to $6.0 million (December 31, 2022 - $7.0 million). The remaining terms of the fixed maturity guarantees are up to 9 years, with some further guarantees having no fixed expiry date.

Under the terms of the guarantee arrangements, generally the Company would be required to perform the obligations should the affiliated company fail to fulfill its obligations under the arrangements. In some cases, the guarantee arrangements have recourse provisions that would enable the Company to recover any payments made under the terms of the guarantees from securities held of the guaranteed parties’ assets.

The Company and its affiliates have numerous long-term sales and purchase commitments in their various business activities, which are expected to be fulfilled with no adverse consequences material to the Company.
v3.23.3
Stock-Based Compensation Plans
 9 Months Ended
Sep. 30, 2023
Share-Based Payment Arrangement [Abstract]  
Stock-Based Compensation Plans

NOTE 13 – STOCK-BASED COMPENSATION PLANS

The compensation cost recorded for stock options for the three months ended September 30, 2023 and 2022 was $2.0 million and $1.5 million, respectively. The compensation cost recorded for stock equivalent units for the three months ended September 30, 2023 and 2022 was $2.0 million and $1.8 million, respectively.

The compensation cost recorded for stock options for the first nine months of 2023 and 2022 was $5.9 million and $4.7 million, respectively. The compensation cost recorded for stock equivalent units for the first nine months of 2023 and 2022 was $7.1 million and $15.9 million, respectively.

The following table summarizes the transactions of the Company’s share-based compensation plans for the nine months ended September 30, 2023.

 

 

Number of
shares

 

 

Weighted
Average
Grant-Date
Fair Value

 

Nonvested at December 31, 2022

 

 

757,040

 

 

$

69.0

 

Granted

 

 

159,322

 

 

$

94.3

 

Vested

 

 

(208,803

)

 

$

66.3

 

Forfeited

 

 

(50,911

)

 

$

77.1

 

Nonvested at September 30, 2023

 

 

656,648

 

 

$

75.1

 

 

New grants in the quarter have similar vesting conditions to those granted in previous periods. The valuation methodologies of the new grants are consistent with previous periods.

As of September 30, 2023, there was $23.5 million of total unrecognized compensation cost related to nonvested share-based compensation arrangements. That cost is expected to be recognized over a weighted-average period of 1.9 years.
v3.23.3
Reclassifications out of Accumulated Other Comprehensive Loss
 9 Months Ended
Sep. 30, 2023
Equity [Abstract]  
Reclassifications out of Accumulated Other Comprehensive Loss

NOTE 14 – RECLASSIFICATIONS OUT OF ACCUMULATED OTHER COMPREHENSIVE LOSS

Reclassifications out of accumulated other comprehensive loss (“AOCL”) for the first nine months of 2023 were:

 

(in millions)
Details about AOCL Components

 

Amount
Reclassified
from AOCL

 

 

Affected Line Item in the
Statement where
Net Income is Presented

Defined benefit pension plan items:

 

 

 

 

 

Amortization of prior service cost

 

$

0.4

 

 

See (1) below

Amortization of actuarial net gains

 

 

(1.6

)

 

See (1) below

 

 

(1.2

)

 

Total before tax

 

 

0.3

 

 

Income tax expense

Total reclassifications

 

$

(0.9

)

 

Net of tax

 

(1)
These items are included in other income and expense. See Note 6 of the Notes to the Condensed Consolidated Financial Statements for additional information.

 

Changes in AOCL for the first nine months of 2023, net of tax, were:

 

(in millions)

 

Defined
Benefit
Pension
Plan Items

 

 

Cumulative
Translation
Adjustments

 

 

Total

 

Balance at December 31, 2022

 

$

(58.4

)

 

$

(86.8

)

 

$

(145.2

)

Other comprehensive income before reclassifications

 

 

—

 

 

 

(1.8

)

 

 

(1.8

)

Amounts reclassified from AOCL

 

 

(0.9

)

 

 

—

 

 

 

(0.9

)

Total other comprehensive income/(loss)

 

 

(0.9

)

 

 

(1.8

)

 

 

(2.7

)

Balance at September 30, 2023

 

$

(59.3

)

 

$

(88.6

)

 

$

(147.9

)

 

 

Reclassifications out of AOCL for the first nine months of 2022 were:

 

(in millions)
Details about AOCL Components

 

Amount
Reclassified
from AOCL

 

 

Affected Line Item in the
Statement where
Net Income is Presented

Defined benefit pension plan items:

 

 

 

 

 

Amortization of prior service cost

 

$

0.4

 

 

See (1) below

Amortization of actuarial net losses

 

 

0.4

 

 

See (1) below

 

 

0.8

 

 

Total before tax

 

 

(0.1

)

 

Income tax expense

Total reclassifications

 

$

0.7

 

 

Net of tax

 

(1)
These items are included in other income and expense. See Note 6 of the Notes to the Condensed Consolidated Financial Statements for additional information.

Changes in AOCL for the first nine months of 2022, net of tax, were:

 

(in millions)

 

Defined
Benefit
Pension
Plan Items

 

 

Cumulative
Translation
Adjustments

 

 

Total

 

Balance at December 31, 2021

 

$

10.7

 

 

$

(57.6

)

 

$

(46.9

)

Other comprehensive income before reclassifications

 

 

—

 

 

 

(37.1

)

 

 

(37.1

)

Amounts reclassified from AOCL

 

 

0.7

 

 

 

—

 

 

 

0.7

 

Total other comprehensive income/(loss)

 

 

0.7

 

 

 

(37.1

)

 

 

(36.4

)

Balance at September 30, 2022

 

$

11.4

 

 

$

(94.7

)

 

$

(83.3

)
v3.23.3
Recently Issued Accounting Pronouncements
 9 Months Ended
Sep. 30, 2023
Accounting Changes and Error Corrections [Abstract]  
Recently Issued Accounting Pronouncements

NOTE 15 – RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

 

In October 2023, the Financial Accounting Standards Board issued Accounting Standards Update (ASU) No. 2023-06, Disclosure Improvements. This guidance covers a number of disclosure improvements intended to align with the SEC's disclosure update and simplification initiative. The effective dates for any required changes to the specified disclosures are aligned with the timing of changes to the relevant SEC regulations. The Company does not expect the new standard to have a material impact on the Company’s consolidated financial statements, including its accounting policies, processes and systems.
v3.23.3
Related Party Transactions
 9 Months Ended
Sep. 30, 2023
Related Party Transactions [Abstract]  
Related Party Transactions

NOTE 16 – RELATED PARTY TRANSACTIONS

Mr. Patrick S. Williams has been an executive director of the Company since April 2009 and has been a non-executive director of AdvanSix, a chemicals manufacturer, since February 2020. In the first nine months of 2023 the Company purchased product from AdvanSix for $0.3 million (first nine months of 2022 – $0.4 million). As at September 30, 2023, the Company owed $0.0 million to AdvanSix (December 31, 2022 – $0.0 million).

Mr. Robert I. Paller has been a non-executive director of the Company since November 1, 2009. The Company has retained and continues to retain Smith, Gambrell & Russell, LLP (“SGR”), a law firm with which Mr. Paller holds a position. In the first nine months of 2023 the Company incurred fees from SGR of $0.2 million (first nine months of 2022 – $0.2 million). As at September 30, 2023, the Company owed $0.0 million to SGR (December 31, 2022 – $0.0 million).

Mr. David F. Landless has been a non-executive director of the Company since January 1, 2016 and is a non-executive director of Ausurus Group Limited which owns European Metal Recycling Limited (“EMR”). The Company has sold scrap metal to EMR in the first nine months of 2023 for a value of $0.1 million (first nine months of 2022 – $0.1 million). A tendering process is operated periodically to select the best buyer for the sale of scrap metal by the Company. As at September 30, 2023, EMR owed $0.0 million for scrap metal purchased from the Company (December 31, 2022 – $0.0 million).
v3.23.3
Segment Reporting (Tables)
 9 Months Ended
Sep. 30, 2023
Segment Reporting [Abstract]  
Segment Reporting

The Company evaluates the performance of its segments based on operating income. The following table analyzes sales and other financial information by the Company’s reportable segments:

 

 

Three Months Ended
September 30,

 

 

Nine Months Ended
September 30,

 

(in millions)

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Net Sales:

 

 

 

 

 

 

 

 

 

 

 

 

Personal Care

 

$

97.0

 

 

$

102.4

 

 

$

263.8

 

 

$

311.1

 

Home Care

 

 

22.3

 

 

 

22.6

 

 

 

65.7

 

 

 

72.3

 

Other

 

 

25.9

 

 

 

34.7

 

 

 

94.9

 

 

 

112.4

 

Performance Chemicals

 

 

145.2

 

 

 

159.7

 

 

 

424.4

 

 

 

495.8

 

Refinery and Performance

 

 

126.0

 

 

 

133.2

 

 

 

394.6

 

 

 

405.5

 

Other

 

 

43.3

 

 

 

45.5

 

 

 

119.2

 

 

 

141.4

 

Fuel Specialties

 

 

169.3

 

 

 

178.7

 

 

 

513.8

 

 

 

546.9

 

Oilfield Services

 

 

149.6

 

 

 

174.6

 

 

 

515.9

 

 

 

410.3

 

 

$

464.1

 

 

$

513.0

 

 

$

1,454.1

 

 

$

1,453.0

 

Operating income/(loss):

 

 

 

 

 

 

 

 

 

 

 

 

Performance Chemicals

 

$

16.9

 

 

$

25.4

 

 

$

36.5

 

 

$

79.5

 

Fuel Specialties

 

 

27.6

 

 

 

27.9

 

 

 

77.1

 

 

 

94.9

 

Oilfield Services

 

 

16.4

 

 

 

14.2

 

 

 

60.3

 

 

 

21.2

 

Corporate costs

 

 

(19.0

)

 

 

(17.4

)

 

 

(56.8

)

 

 

(54.9

)

Total operating income

 

$

41.9

 

 

$

50.1

 

 

$

117.1

 

 

$

140.7

 
v3.23.3
Earnings per Share (Tables)
 9 Months Ended
Sep. 30, 2023
Earnings Per Share [Abstract]  
Summary of Earnings Per Share

 

Three Months Ended
September 30,

 

 

Nine Months Ended
September 30,

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Numerator (in millions):

 

 

 

 

 

 

 

 

 

 

 

 

Net income available to common stockholders

 

$

39.2

 

 

$

38.7

 

 

$

101.3

 

 

$

107.5

 

Denominator (in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding

 

 

24,866

 

 

 

24,786

 

 

 

24,845

 

 

 

24,794

 

Dilutive effect of stock options and awards

 

 

140

 

 

 

179

 

 

 

155

 

 

 

182

 

Denominator for diluted earnings per share

 

 

25,006

 

 

 

24,965

 

 

 

25,000

 

 

 

24,976

 

Net income per share, basic:

 

$

1.58

 

 

$

1.56

 

 

$

4.08

 

 

$

4.34

 

Net income per share, diluted:

 

$

1.57

 

 

$

1.55

 

 

$

4.05

 

 

$

4.30

 
v3.23.3
Goodwill (Tables)
 9 Months Ended
Sep. 30, 2023
Goodwill and Intangible Assets Disclosure [Abstract]  
Summary of Goodwill

The following table summarizes the goodwill movements in the year:

 

(in millions)

 

Gross Cost

 

Opening balance at January 1, 2023

 

$

358.8

 

Exchange effect

 

 

(0.9

)

Closing balance at September 30, 2023

 

$

357.9

 

 
v3.23.3
Other Intangible Assets (Tables)
 9 Months Ended
Sep. 30, 2023
Goodwill and Intangible Assets Disclosure [Abstract]  
Summary of Other Intangible Assets

The following table analyzes other intangible assets movements in the year:

 

(in millions)

 

2023

 

Gross cost at January 1

 

$

291.1

 

Additions

 

 

10.8

 

Exchange effect

 

 

(0.3

)

Gross cost at September 30

 

 

301.6

 

Accumulated amortization at January 1

 

 

(246.1

)

Amortization expense

 

 

(8.0

)

Exchange effect

 

 

0.3

 

Accumulated amortization at September 30

 

 

(253.8

)

Net book amount at September 30

 

$

47.8

 

 
v3.23.3
Pension and Post-Employment Benefits (Tables)
 9 Months Ended
Sep. 30, 2023
Plan Net Pension Credit

The net periodic benefit of these plans is shown in the following table:

 

 

Three Months Ended
September 30,

 

 

Nine Months Ended
September 30,

 

(in millions)

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Service cost

 

$

(0.9

)

 

$

(0.6

)

 

$

(2.7

)

 

$

(1.8

)

Interest cost on projected benefit obligation

 

 

(5.1

)

 

 

(2.4

)

 

 

(15.0

)

 

 

(7.8

)

Expected return on plan assets

 

 

6.5

 

 

 

3.8

 

 

 

19.0

 

 

 

12.3

 

Amortization of prior service cost

 

 

(0.2

)

 

 

(0.1

)

 

 

(0.4

)

 

 

(0.4

)

Amortization of actuarial net gains/(losses)

 

 

0.6

 

 

 

(0.1

)

 

 

1.6

 

 

 

(0.4

)

Net periodic benefit

 

$

0.9

 

 

$

0.6

 

 

$

2.5

 

 

$

1.9

 
v3.23.3
Income Taxes (Tables)
 9 Months Ended
Sep. 30, 2023
Income Tax Disclosure [Abstract]  
Roll-forward of Unrecognized Tax Benefits and Associated Accrued Interest and Penalties

A roll-forward of unrecognized tax benefits and associated accrued interest and penalties is as follows:

 

(in millions)

 

Unrecognized
Tax Benefits

 

 

Interest and
Penalties

 

 

Total

 

Opening balance at January 1, 2023

 

$

10.2

 

 

$

3.2

 

 

$

13.4

 

Net change for tax positions of prior periods

 

 

—

 

 

 

0.7

 

 

 

0.7

 

Closing balance at September 30, 2023

 

 

10.2

 

 

 

3.9

 

 

 

14.1

 

Current

 

 

—

 

 

 

—

 

 

 

—

 

Non-current

 

$

10.2

 

 

$

3.9

 

 

$

14.1

 
v3.23.3
Plant Closure Provisions (Tables)
 9 Months Ended
Sep. 30, 2023
Restructuring and Related Activities [Abstract]  
Movements in Plant Closure and Restructuring Provisions

Movements in the provisions are summarized as follows:

 

(in millions)

 

2023

 

Total at January 1

 

$

57.2

 

Charge for the period

 

 

2.7

 

Utilized in the period

 

 

(3.9

)

Exchange effect

 

 

(0.2

)

Total at September 30

 

 

55.8

 

Due within one year

 

 

(4.7

)

Due after one year

 

$

51.1

 
v3.23.3
Fair Value Measurements (Tables)
 9 Months Ended
Sep. 30, 2023
Fair Value Disclosures [Abstract]  
Carrying Amount and Fair Values of the Company's Assets and Liabilities Measured on a Recurring Basis

The following table presents the carrying amount and fair values of the Company’s financial assets and liabilities measured on a recurring basis:

 

 

September 30, 2023

 

 

December 31, 2022

 

(in millions)

 

Carrying
Amount

 

 

Fair
Value

 

 

Carrying
Amount

 

 

Fair
Value

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

Non-derivatives:

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

207.2

 

 

$

207.2

 

 

$

147.1

 

 

$

147.1

 

Derivatives (Level 1 measurement):

 

 

 

 

 

 

 

 

 

 

 

 

Other current and non-current assets:

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency forward exchange contracts

 

 

1.0

 

 

 

1.0

 

 

 

—

 

 

 

—

 

Emissions Trading Scheme credits

 

 

3.2

 

 

 

3.2

 

 

 

2.7

 

 

 

2.7

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

Derivatives (Level 1 measurement):

 

 

 

 

 

 

 

 

 

 

 

 

Other current and non-current liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency forward exchange contracts

 

 

—

 

 

 

—

 

 

 

0.5

 

 

 

0.5

 

Non-financial liabilities (Level 3 measurement):

 

 

 

 

 

 

 

 

 

 

 

 

Other current and non-current liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Stock equivalent units

 

 

17.4

 

 

 

17.4

 

 

 

26.4

 

 

 

26.4

 
v3.23.3
Stock-Based Compensation Plans (Tables)
 9 Months Ended
Sep. 30, 2023
Summary of Transactions of the Share Based Compensation Plans

The following table summarizes the transactions of the Company’s share-based compensation plans for the nine months ended September 30, 2023.

 

 

Number of
shares

 

 

Weighted
Average
Grant-Date
Fair Value

 

Nonvested at December 31, 2022

 

 

757,040

 

 

$

69.0

 

Granted

 

 

159,322

 

 

$

94.3

 

Vested

 

 

(208,803

)

 

$

66.3

 

Forfeited

 

 

(50,911

)

 

$

77.1

 

Nonvested at September 30, 2023

 

 

656,648

 

 

$

75.1

 
v3.23.3
Reclassifications out of Accumulated Other Comprehensive Loss (Tables)
 9 Months Ended
Sep. 30, 2023
Equity [Abstract]  
Summary of Reclassifications Out of Accumulated Other Comprehensive Loss

Reclassifications out of accumulated other comprehensive loss (“AOCL”) for the first nine months of 2023 were:

 

(in millions)
Details about AOCL Components

 

Amount
Reclassified
from AOCL

 

 

Affected Line Item in the
Statement where
Net Income is Presented

Defined benefit pension plan items:

 

 

 

 

 

Amortization of prior service cost

 

$

0.4

 

 

See (1) below

Amortization of actuarial net gains

 

 

(1.6

)

 

See (1) below

 

 

(1.2

)

 

Total before tax

 

 

0.3

 

 

Income tax expense

Total reclassifications

 

$

(0.9

)

 

Net of tax

 

(1)
These items are included in other income and expense. See Note 6 of the Notes to the Condensed Consolidated Financial Statements for additional information.

Reclassifications out of AOCL for the first nine months of 2022 were:

 

(in millions)
Details about AOCL Components

 

Amount
Reclassified
from AOCL

 

 

Affected Line Item in the
Statement where
Net Income is Presented

Defined benefit pension plan items:

 

 

 

 

 

Amortization of prior service cost

 

$

0.4

 

 

See (1) below

Amortization of actuarial net losses

 

 

0.4

 

 

See (1) below

 

 

0.8

 

 

Total before tax

 

 

(0.1

)

 

Income tax expense

Total reclassifications

 

$

0.7

 

 

Net of tax

 

(1)
These items are included in other income and expense. See Note 6 of the Notes to the Condensed Consolidated Financial Statements for additional information.
Changes in Accumulated Other Comprehensive Loss

Changes in AOCL for the first nine months of 2023, net of tax, were:

 

(in millions)

 

Defined
Benefit
Pension
Plan Items

 

 

Cumulative
Translation
Adjustments

 

 

Total

 

Balance at December 31, 2022

 

$

(58.4

)

 

$

(86.8

)

 

$

(145.2

)

Other comprehensive income before reclassifications

 

 

—

 

 

 

(1.8

)

 

 

(1.8

)

Amounts reclassified from AOCL

 

 

(0.9

)

 

 

—

 

 

 

(0.9

)

Total other comprehensive income/(loss)

 

 

(0.9

)

 

 

(1.8

)

 

 

(2.7

)

Balance at September 30, 2023

 

$

(59.3

)

 

$

(88.6

)

 

$

(147.9

)

Changes in AOCL for the first nine months of 2022, net of tax, were:

 

(in millions)

 

Defined
Benefit
Pension
Plan Items

 

 

Cumulative
Translation
Adjustments

 

 

Total

 

Balance at December 31, 2021

 

$

10.7

 

 

$

(57.6

)

 

$

(46.9

)

Other comprehensive income before reclassifications

 

 

—

 

 

 

(37.1

)

 

 

(37.1

)

Amounts reclassified from AOCL

 

 

0.7

 

 

 

—

 

 

 

0.7

 

Total other comprehensive income/(loss)

 

 

0.7

 

 

 

(37.1

)

 

 

(36.4

)

Balance at September 30, 2022

 

$

11.4

 

 

$

(94.7

)

 

$

(83.3

)
v3.23.3
Segment Reporting - Segment Reporting (Detail) - USD ($)
$ in Millions
 3 Months Ended 9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Segment Reporting Information [Line Items]        
Net sales $ 464.1 $ 513.0 $ 1,454.1 $ 1,453.0
Operating income/(loss) 41.9 50.1 117.1 140.7
Operating Segments [Member] | Performance Chemicals [Member]        
Segment Reporting Information [Line Items]        
Net sales 145.2 159.7 424.4 495.8
Operating income/(loss) 16.9 25.4 36.5 79.5
Operating Segments [Member] | Fuel Specialties [Member]        
Segment Reporting Information [Line Items]        
Net sales 169.3 178.7 513.8 546.9
Operating income/(loss) 27.6 27.9 77.1 94.9
Operating Segments [Member] | Oilfield Services [Member]        
Segment Reporting Information [Line Items]        
Net sales 149.6 174.6 515.9 410.3
Operating income/(loss) 16.4 14.2 60.3 21.2
Operating Segments [Member] | Personal Care [Member] | Performance Chemicals [Member]        
Segment Reporting Information [Line Items]        
Net sales 97.0 102.4 263.8 311.1
Operating Segments [Member] | Home Care [Member] | Performance Chemicals [Member]        
Segment Reporting Information [Line Items]        
Net sales 22.3 22.6 65.7 72.3
Operating Segments [Member] | Other [Member] | Performance Chemicals [Member]        
Segment Reporting Information [Line Items]        
Net sales 25.9 34.7 94.9 112.4
Operating Segments [Member] | Refinery and Performance [Member] | Fuel Specialties [Member]        
Segment Reporting Information [Line Items]        
Net sales 126.0 133.2 394.6 405.5
Operating Segments [Member] | Other [Member] | Fuel Specialties [Member]        
Segment Reporting Information [Line Items]        
Net sales 43.3 45.5 119.2 141.4
Corporate, Non-Segment [Member]        
Segment Reporting Information [Line Items]        
Corporate costs $ (19.0) $ (17.4) $ (56.8) $ (54.9)
v3.23.3
Earnings Per Share - Additional Information (Detail) - shares
 3 Months Ended 9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Earnings Per Share [Abstract]        
Average number of anti-dilutive options excluded from the calculation of diluted earnings per share 21,950 109,377 29,293 54,522
v3.23.3
Earnings Per Share - Summary of Earnings Per Share (Detail) - USD ($)
$ / shares in Units, shares in Thousands, $ in Millions
 3 Months Ended 9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Numerator (in millions):        
Net income available to common stockholders $ 39.2 $ 38.7 $ 101.3 $ 107.5
Denominator (in thousands):        
Weighted average common shares outstanding 24,866 24,786 24,845 24,794
Dilutive effect of stock options and awards 140 179 155 182
Denominator for diluted earnings per share 25,006 24,965 25,000 24,976
Net income per share, basic: $ 1.58 $ 1.56 $ 4.08 $ 4.34
Net income per share, diluted: $ 1.57 $ 1.55 $ 4.05 $ 4.3
v3.23.3
Goodwill - Additional Information (Detail)
$ in Millions
 9 Months Ended
Sep. 30, 2023
USD ($)
Goodwill [Line Items]  
Goodwill, foreign currency translation gain (loss) $ 0.9
Performance Chemicals [Member]  
Goodwill [Line Items]  
Goodwill, foreign currency translation gain (loss) $ 0.9
v3.23.3
Goodwill - Summary of Goodwill (Detail)
$ in Millions
 9 Months Ended
Sep. 30, 2023
USD ($)
Goodwill [Line Items]  
Gross cost, beginning balance $ 358.8
Exchange effect 0.9
Gross cost, ending balance $ 357.9
v3.23.3
Other Intangible Assets - Summary of Other Intangible Assets (Detail) - USD ($)
$ in Millions
 9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Dec. 31, 2022
Gross cost at January 1 $ 291.1    
Additions 10.8    
Exchange effect (0.3)    
Gross cost at September 30 301.6   $ 291.1
Accumulated amortization at January 1 (246.1)    
Amortization expense (8.0) $ (11.4)  
Exchange effect 0.3    
Accumulated amortization at September 30 (253.8)    
Net book amount at September 30 $ 47.8   $ 45.0
v3.23.3
Other Intangible Assets - Additional Information (Detail) - USD ($)
$ in Millions
 9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Finite-Lived Intangible Assets [Line Items]    
Amortization expense $ 8.0 $ 11.4
Payments to Develop Software $ 10.8 $ (0.0)
v3.23.3
Pension and Post-Employment Benefits - Additional Information (Detail) - USD ($)
$ in Millions
Sep. 30, 2023
Dec. 31, 2022
Europe [Member]    
Defined Benefit Plan Disclosure [Line Items]    
Post-employment obligations European businesses $ 3.9 $ 4.1
v3.23.3
Pension and Post-Employment Benefits - Plan Net Pension Credit (Detail) - GERMANY - USD ($)
$ in Millions
 3 Months Ended 9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Defined Benefit Plan Disclosure [Line Items]        
Service cost $ (0.9) $ (0.6) $ (2.7) $ (1.8)
Interest cost on projected benefit obligation (5.1) (2.4) (15.0) (7.8)
Expected return on plan assets 6.5 3.8 19.0 12.3
Amortization of prior service cost (0.2) (0.1) (0.4) (0.4)
Amortization of actuarial net gains/(losses) 0.6 (0.1) 1.6 (0.4)
Net periodic benefit $ 0.9 $ 0.6 $ 2.5 $ 1.9
v3.23.3
Income Taxes - Roll-forward of Unrecognized Tax Benefits and Associated Accrued Interest and Penalties (Detail) - USD ($)
$ in Millions
 9 Months Ended
Sep. 30, 2023
Dec. 31, 2022
Income Tax Contingency [Line Items]    
Opening balance at January 1 $ 13.4  
Net change for tax positions of prior periods 0.7  
Closing balance at September 30 14.1  
Current 0.0  
Non-current 14.1 $ 13.4
Interest and Penalties [Member]    
Income Tax Contingency [Line Items]    
Opening balance at January 1 3.2  
Net change for tax positions of prior periods 0.7  
Closing balance at September 30 3.9  
Current 0.0  
Non-current 3.9  
Unrecognized Tax Benefits [Member]    
Income Tax Contingency [Line Items]    
Opening balance at January 1 10.2  
Net change for tax positions of prior periods 0.0  
Closing balance at September 30 10.2  
Current 0.0  
Non-current $ 10.2  
v3.23.3
Income Taxes - Additional Information (Detail) - USD ($)
$ in Millions
 9 Months Ended
Sep. 30, 2023
Dec. 31, 2022
Income Tax Contingency [Line Items]    
Unrecognized tax benefits would impact effective tax rate if recognized $ 14.1  
Unrecognized tax benefit $ 14.1 $ 13.4
Income tax examination, description Aside from certain tax returns that are closed after completion of a U.S. Internal Revenue Service (“IRS”) audit, the Company and its U.S. subsidiaries remain open to examination by the IRS for certain elements of year 2017 and for years 2019 onwards under the statute of limitations. The Company’s subsidiaries in foreign tax jurisdictions are open to examination including Brazil (2018 onwards), Germany (2018 onwards), and the U.K. (2017 onwards).  
Increase to income tax expense $ 0.6  
Profit Diversion Compliance Facility [Member]    
Income Tax Contingency [Line Items]    
Increase to income tax expense 0.1  
Italian Tax Authorities [Member]    
Income Tax Contingency [Line Items]    
Unrecognized tax benefit 3.2  
United Kingdom [Member] | Foreign [Member] | Profit Diversion Compliance Facility [Member]    
Income Tax Contingency [Line Items]    
Income tax examination penalties and interest expenses 1.1  
United States [Member]    
Income Tax Contingency [Line Items]    
Unrecognized tax benefit $ 9.8  
Non-US [Member] | Earliest Tax Year [Member]    
Income Tax Contingency [Line Items]    
Open tax year 2011  
Non-US [Member] | Latest Tax Year [Member]    
Income Tax Contingency [Line Items]    
Open tax year 2014  
v3.23.3
Long-Term Debt - Additional Information (Detail) - USD ($)
 9 Months Ended
May 31, 2023
Sep. 30, 2023
Dec. 31, 2022
Debt Instrument [Line Items]      
Capitalized Contract Cost, Net   $ 1,500,000  
Capitalized costs amortization period   May 30, 2027  
Deferred finance costs, net   $ 1,300,000 $ 600,000
Revolving Loan Facility [Member]      
Debt Instrument [Line Items]      
Due date of revolving credit May 30, 2027 Sep. 26, 2019  
Line of Credit Facility, Maximum Borrowing Capacity $ 250,000,000    
Expiration period 4 years    
Line Of Credit Facility Cumulative Drawn Down   $ 0 $ 0
Revolving Loan Facility [Member] | Accordion Feature [Member]      
Debt Instrument [Line Items]      
Line of Credit Facility, Maximum Borrowing Capacity $ 125,000,000    
Previous Agreement [Member]      
Debt Instrument [Line Items]      
Capitalized costs written off   $ 500,000  
v3.23.3
Plant Closure Provisions - Movements in Plant Closure and Restructuring Provisions (Detail) - USD ($)
$ in Millions
 9 Months Ended
Sep. 30, 2023
Dec. 31, 2022
Restructuring and Related Activities [Abstract]    
Beginning Balance $ 57.2  
Charge for the period 2.7  
Utilized in the period (3.9)  
Exchange effect (0.2)  
Ending Balance 55.8  
Due within one year (4.7) $ (5.3)
Due after one year $ 51.1 $ 51.9
v3.23.3
Plant Closure Provisions - Additional Information (Detail) - USD ($)
$ in Millions
 9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Remediation [Member]    
Restructuring Cost and Reserve [Line Items]    
Accretion expense recognized $ 2.7 $ 2.7
v3.23.3
Fair Value Measurements - Carrying Amount and Fair Values of the Company's Assets and Liabilities Measured on a Recurring Basis (Detail) - Recurring [Member] - USD ($)
$ in Millions
Sep. 30, 2023
Dec. 31, 2022
Carrying Amount [Member]    
Non-derivatives:    
Cash and cash equivalents $ 207.2 $ 147.1
Carrying Amount [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Foreign Currency Forward Exchange Contracts [Member]    
Derivatives (Level 1 measurement):    
Derivative asset 1.0 0.0
Derivatives (Level 1 measurement):    
Foreign currency forward exchange contracts 0.0 0.5
Carrying Amount [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Emission Trading Scheme Credits [Member]    
Derivatives (Level 1 measurement):    
Derivative asset 3.2 2.7
Carrying Amount [Member] | Significant Unobservable Inputs (Level 3) [Member]    
Non-financial liabilities (Level 3 measurement):    
Stock equivalent units 17.4 26.4
Fair Value [Member]    
Non-derivatives:    
Cash and cash equivalents 207.2 147.1
Fair Value [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Foreign Currency Forward Exchange Contracts [Member]    
Derivatives (Level 1 measurement):    
Derivative asset 1.0 0.0
Derivatives (Level 1 measurement):    
Foreign currency forward exchange contracts 0.0 0.5
Fair Value [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Emission Trading Scheme Credits [Member]    
Derivatives (Level 1 measurement):    
Derivative asset 3.2 2.7
Fair Value [Member] | Significant Unobservable Inputs (Level 3) [Member]    
Non-financial liabilities (Level 3 measurement):    
Stock equivalent units $ 17.4 $ 26.4
v3.23.3
Derivative Instruments and Risk Management - Additional Information (Detail) - USD ($)
$ in Millions
 9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Not Designated as Hedging Instrument [Member] | Foreign Currency Forward Exchange Contracts [Member] | Other net income/(expense) [Member]    
Derivative [Line Items]    
Amount of gain/(loss) recognized in income $ (1.2) $ 6.5
v3.23.3
Contingencies - Additional Information (Detail) - USD ($)
$ in Millions
 9 Months Ended
Sep. 30, 2023
Dec. 31, 2022
Other Commitments [Line Items]    
Guarantees $ 6.0 $ 7.0
Maximum [Member]    
Other Commitments [Line Items]    
Fixed maturity guarantee remaining term 9 years  
v3.23.3
Stock-Based Compensation Plans - Additional Information (Detail) - USD ($)
$ in Millions
 3 Months Ended 9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Stock option compensation     $ 5.9 $ 4.7
Total compensation cost related to non-vested stock options not yet recognized $ 23.5   $ 23.5  
Expected compensation cost recognized over the weighted-average period     1 year 10 months 24 days  
Employee Stock Option        
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Stock option compensation 2.0 $ 1.5 $ 5.9 4.7
Stock Equivalent Units [Member]        
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Compensation cost $ 2.0 $ 1.8 $ 7.1 $ 15.9
v3.23.3
Stock-Based Compensation Plans - Summary of Transactions of the Share Based Compensation Plans (Detail)
 9 Months Ended
Sep. 30, 2023
$ / shares
shares
Share-Based Payment Arrangement, Disclosure [Abstract]  
Number of shares, Begining balance | shares 757,040
Number of shares, Granted | shares 159,322
Number of shares, Vested | shares (208,803)
Number of shares, Forfeited | shares (50,911)
Number of shares , Ending balance | shares 656,648
Weighted Average Grant-Date Fair Value , Begining balance | $ / shares $ 69
Weighted Average Grant-Date Fair Value, Granted | $ / shares 94.3
Weighted Average Grant-Date Fair Value, Vested | $ / shares 66.3
Weighted Average Grant-Date Fair Value, Forfeited | $ / shares 77.1
Weighted Average Grant-Date Fair Value, Ending balance | $ / shares $ 75.1
v3.23.3
Reclassifications out of Accumulated Other Comprehensive Loss - Summary of Reclassifications out of Accumulated Other Comprehensive Loss (Detail) - USD ($)
$ in Millions
 9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]    
Total reclassifications $ 0.9 $ (0.7)
Defined Benefit Pension Plan Items [Member]    
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]    
Total reclassifications 0.9 (0.7)
Reclassification Out of Accumulated Other Comprehensive Income/(Loss) [Member]    
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]    
Total before tax (1.2) 0.8
Income tax expense 0.3 (0.1)
Total reclassifications (0.9) 0.7
Reclassification Out of Accumulated Other Comprehensive Income/(Loss) [Member] | Defined Benefit Pension Plan Items [Member]    
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]    
Amortization of prior service cost 0.4 0.4
Amortization of actuarial net losses $ (1.6) $ 0.4
v3.23.3
Reclassifications out of Accumulated Other Comprehensive Loss - Changes in Accumulated Other Comprehensive Loss (Detail) - USD ($)
$ in Millions
 3 Months Ended 9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Accumulated Other Comprehensive Income (Loss) [Line Items]        
Beginning Balance     $ 1,038.0  
Other comprehensive income before reclassifications     (1.8) $ (37.1)
Amounts reclassified from AOCL     (0.9) 0.7
Total other comprehensive income/(loss) $ (8.2) $ (16.2) (2.7) (36.4)
Ending Balance 1,125.4   1,125.4  
Accumulated Other Comprehensive Loss [Member]        
Accumulated Other Comprehensive Income (Loss) [Line Items]        
Beginning Balance     (145.2) (46.9)
Ending Balance (147.9) (83.3) (147.9) (83.3)
Defined Benefit Pension Plan Items [Member]        
Accumulated Other Comprehensive Income (Loss) [Line Items]        
Beginning Balance     (58.4) 10.7
Other comprehensive income before reclassifications     0.0 0.0
Amounts reclassified from AOCL     (0.9) 0.7
Total other comprehensive income/(loss)     (0.9) 0.7
Ending Balance (59.3) 11.4 (59.3) 11.4
Foreign Currency Translation Items [Member]        
Accumulated Other Comprehensive Income (Loss) [Line Items]        
Beginning Balance     (86.8) (57.6)
Other comprehensive income before reclassifications     (1.8) (37.1)
Amounts reclassified from AOCL     0.0 0.0
Total other comprehensive income/(loss)     (1.8) (37.1)
Ending Balance $ (88.6) $ (94.7) $ (88.6) $ (94.7)
v3.23.3
Related Party Transactions - Additional Information (Detail) - USD ($)
$ in Millions
 9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Dec. 31, 2022
Smith, Gambrell & Russell, LLP [Member]      
Related Party Transaction [Line Items]      
Fees payable to Smith, Gambrell & Russell $ 0.2 $ 0.2  
European Metal Recycling Limited [Member]      
Related Party Transaction [Line Items]      
Tendering process to select best buyer of scrap metal 0.1 0.1  
Advan Six [Member]      
Related Party Transaction [Line Items]      
Tendering process to select best buyer of scrap metal 0.3 $ 0.4  
Related Party [Member] | Smith, Gambrell & Russell, LLP [Member]      
Related Party Transaction [Line Items]      
Amount due to related party 0.0   $ 0.0
Related Party [Member] | European Metal Recycling Limited [Member]      
Related Party Transaction [Line Items]      
Amount due to related party 0.0   0.0
Related Party [Member] | Advan Six [Member]      
Related Party Transaction [Line Items]      
Amount due to related party $ 0.0   $ 0.0