Company: NGVT
Filing Date: 2025-08-05
Form Type: 10-Q
Source: 0001653477-25-000108
Chunk: 54

Company: Ingevity Corp
Filing Date: 2025-08-05
Form: 10-Q
Item: Part I, Item 1
Chunk 54
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4 and no excess CTO volumes were on hand at June 30, 2025. The DeRidder Plant closure, and the corresponding reduction in CTO refining capacity, significantly reduced our CTO volume requirements. However, we were obligated, under an existing CTO supply contract, to purchase CTO volumes through 2025 at amounts in excess of the CTO volumes needed to support our business operations. To manage this excess inventory, we sold CTO volumes (herein referred to as "CTO resales") in the open market. For the three and six months ended June 30 2024, we incurred $23.5 million and $50.0 million, respectively, of CTO resale losses, which are recorded as "Other (income) expense, net" on the condensed consolidated statements of operations.

On July 1, 2024, the CTO supply contract that resulted in these excess CTO volumes was terminated. As consideration for the termination of the CTO supply contract, we made cash payments totaling $100.0 million during 2024. The charge was recorded within "Other (income) expense, net" on the condensed consolidated statements of operations for the year ended December 31, 2024. As a result of the termination, the purchases under the CTO supply contract ended effective June 30, 2024.

Expected Savings and Impact

The Performance Chemicals repositioning, which began in November 2023, is focused on reducing exposure to lower margin end-use markets of our industrial specialties product line, such as adhesives, publication inks, and oilfield, representing approximately 45 percent of our industrial specialties product line historical annualized net sales. For the three and six months ended June 30, 2025, we realized cash savings of approximately $11 million and $19 million, including $8 million and $14 million in Cost of sales, $3 million and $4 million in Selling, general, and administrative expenses, and zero and $1 million in Research and technical expenses, respectively.

Since November of 2023, we have realized total cash savings of approximately $103 million, including $82 million in Cost of sales, $16 million in Selling, general, and administrative expenses, and $5 million in Research and technical expenses, respectively. All cash savings have been realized as of June 30, 2025.

These cash savings have been derived from headcount reductions, plant operating efficiencies, and reduced supply chain costs. Collectively