Innospec Inc.
11/04/2026 | Press release | Distributed by Public on 11/04/2026 08:27
Quarterly Report for Quarter Ending September 30, 2026 (Form 10-Q)
Management's Discussion and Analysis of Financial Condition and Results of Operations for the Three and Nine Months Ended September 30, 2026
This discussion should be read in conjunction with our unaudited interim condensed consolidated financial statements and the notes thereto.
CRITICAL ACCOUNTING ESTIMATES
The policies and estimates that the Company considers the most critical in terms of complexity and subjectivity of assessment are those related to plant closure provisions, goodwill, other intangible assets and property, plant and equipment. These policies have been discussed in the Company's 2025 Form 10-K.
RESULTS OF OPERATIONS
The Company reports its financial performance based on three reportable segments, which are Performance Chemicals, Fuel Specialties and Oilfield Services.
The following table provides sales, gross profit and operating income by reporting segment:
|
Three Months Ended |
Nine Months Ended |
|||||||||||||||
|
(in millions) |
2026 |
2025 |
2026 |
2025 |
||||||||||||
|
Net sales: |
||||||||||||||||
|
Performance Chemicals |
$ |
180.5 |
$ |
170.8 |
$ |
540.2 |
$ |
513.0 |
||||||||
|
Fuel Specialties |
180.7 |
172.0 |
548.0 |
507.4 |
||||||||||||
|
Oilfield Services |
112.4 |
99.1 |
330.0 |
302.0 |
||||||||||||
|
$ |
473.6 |
$ |
441.9 |
$ |
1,418.2 |
$ |
1,322.4 |
|||||||||
|
Gross profit: |
||||||||||||||||
|
Performance Chemicals |
$ |
34.0 |
$ |
25.8 |
$ |
95.4 |
$ |
91.6 |
||||||||
|
Fuel Specialties |
63.4 |
61.2 |
195.7 |
184.9 |
||||||||||||
|
Oilfield Services |
31.7 |
29.7 |
99.8 |
88.5 |
||||||||||||
|
$ |
129.1 |
$ |
116.7 |
$ |
390.9 |
$ |
365.0 |
|||||||||
|
Operating income/(loss): |
||||||||||||||||
|
Performance Chemicals |
$ |
16.9 |
$ |
9.2 |
$ |
44.0 |
$ |
43.3 |
||||||||
|
Fuel Specialties |
35.6 |
35.3 |
109.7 |
107.6 |
||||||||||||
|
Oilfield Services |
6.7 |
4.8 |
21.0 |
15.1 |
||||||||||||
|
Corporate costs |
(18.6 |
) |
(18.2 |
) |
(62.5 |
) |
(56.8 |
) |
||||||||
|
Adjustment to fair value of contingent consideration |
1.1 |
17.7 |
5.7 |
16.2 |
||||||||||||
|
Restructuring charge |
- |
(0.9 |
) |
- |
(0.9 |
) |
||||||||||
|
Impairment of property, plant and equipment |
- |
(22.9 |
) |
- |
(22.9 |
) |
||||||||||
|
Impairment of intangible assets |
- |
(19.1 |
) |
- |
(19.1 |
) |
||||||||||
|
Profit on disposal of property, plant and equipment |
- |
- |
- |
0.2 |
||||||||||||
|
Total operating income |
$ |
41.7 |
$ |
5.9 |
$ |
117.9 |
$ |
82.7 |
||||||||
Three Months Ended September 30, 2026
The following table shows the changes in sales, gross profit and operating expenses by reporting segment for the three months ended September 30, 2026, and the three months ended September 30, 2025:
|
Three Months Ended |
||||||||||||||
|
(in millions, except ratios) |
2026 |
2025 |
Change |
|||||||||||
|
Net sales: |
||||||||||||||
|
Performance Chemicals |
$ |
180.5 |
$ |
170.8 |
$ |
9.7 |
+6% |
|||||||
|
Fuel Specialties |
180.7 |
172.0 |
8.7 |
+5% |
||||||||||
|
Oilfield Services |
112.4 |
99.1 |
13.3 |
+13% |
||||||||||
|
$ |
473.6 |
$ |
441.9 |
$ |
31.7 |
+7% |
||||||||
|
Gross profit: |
||||||||||||||
|
Performance Chemicals |
$ |
34.0 |
$ |
25.8 |
$ |
8.2 |
+32% |
|||||||
|
Fuel Specialties |
63.4 |
61.2 |
2.2 |
+4% |
||||||||||
|
Oilfield Services |
31.7 |
29.7 |
2.0 |
+7% |
||||||||||
|
$ |
129.1 |
$ |
116.7 |
$ |
12.4 |
+11% |
||||||||
|
Gross margin (%): |
||||||||||||||
|
Performance Chemicals |
18.8 |
15.1 |
+3.7 |
|||||||||||
|
Fuel Specialties |
35.1 |
35.6 |
-0.5 |
|||||||||||
|
Oilfield Services |
28.2 |
30.0 |
-1.8 |
|||||||||||
|
Aggregate |
27.3 |
26.4 |
+0.9 |
|||||||||||
|
Operating expenses: |
||||||||||||||
|
Performance Chemicals |
$ |
(17.1 |
) |
$ |
(16.6 |
) |
$ |
(0.5 |
) |
+3% |
||||
|
Fuel Specialties |
(27.8 |
) |
(25.9 |
) |
(1.9 |
) |
+7% |
|||||||
|
Oilfield Services |
(25.0 |
) |
(24.9 |
) |
(0.1 |
) |
+0% |
|||||||
|
Corporate costs |
(18.6 |
) |
(18.2 |
) |
(0.4 |
) |
+2% |
|||||||
|
Adjustment to fair value of contingent consideration |
1.1 |
17.7 |
(16.6 |
) |
-94% |
|||||||||
|
Restructuring charge |
- |
(0.9 |
) |
0.9 |
-100% |
|||||||||
|
Impairment of property, plant and equipment |
- |
(22.9 |
) |
22.9 |
-100% |
|||||||||
|
Impairment of intangible assets |
- |
(19.1 |
) |
19.1 |
-100% |
|||||||||
|
$ |
(87.4 |
) |
$ |
(110.8 |
) |
$ |
23.4 |
-21% |
||||||
Performance Chemicals
Net sales: the table below details the components which comprise the year-over-year change in net sales spread across the markets in which we operate:
|
Three Months Ended September 30, 2026 |
||||||||||||||||
|
Change (%) |
Americas |
EMEA |
ASPAC |
Total |
||||||||||||
|
Volume |
-10 |
-3 |
+14 |
-5 |
||||||||||||
|
Price and product mix |
+16 |
+7 |
+14 |
+12 |
||||||||||||
|
Exchange rates |
- |
-1 |
- |
-1 |
||||||||||||
|
+6 |
+3 |
+28 |
+6 |
|||||||||||||
The Americas volumes were lower due to continued supply constraints and reduced demand for our personal care products, being offset by a favorable price and product mix due to pricing improvements and higher raw material costs.
EMEA volumes were lower due to decreased demand for our personal care products, being offset by a favorable price and product mix, driven by higher demand for our higher priced products and higher raw material costs.
ASPAC volumes were higher due to increased demand for certain products, together with a favorable price and
product mix, driven by higher demand for our higher priced products and higher raw material costs.
EMEA was impacted by adverse foreign currency exchange rate movements.
Gross margin: the year-over-year increase of 3.7 percentage points was primarily due to pricing improvements in the current year, and improved manufacturing variances compared to the prior year.
Operating expenses: the year-over-year increase of $0.5 million was primarily due to higher selling expenses and higher provisions for performance-related remuneration accruals, being partly offset by lower administrative costs.
Fuel Specialties
Net sales: the table below details the components which comprise the year-over-year change in net sales spread across the markets in which we operate:
|
Three Months Ended September 30, 2026 |
||||||||||||||||||||
|
Change (%) |
Americas |
EMEA |
ASPAC |
AvGas |
Total |
|||||||||||||||
|
Volume |
+33 |
-10 |
-17 |
-29 |
+3 |
|||||||||||||||
|
Price and product mix |
-2 |
+1 |
+7 |
+13 |
+2 |
|||||||||||||||
|
Exchange rates |
+1 |
-1 |
- |
- |
- |
|||||||||||||||
|
+32 |
-10 |
-10 |
-16 |
+5 |
||||||||||||||||
Sales volumes in the Americas were higher year-over-year due to the increase and timing of demand from customers, while partly offset by an adverse price and product mix.
Sales volumes in EMEA decreased year-over-year primarily due to the timing of demand from customers, being partly offset by a favorable price and product mix.
Sales volumes in ASPAC decreased year-over-year primarily due to the timing of demand from customers, being partly offset by a favorable price and product mix.
AvGas sales volumes were lower than the prior year due to changing demand from customers, partly offset by a favorable customer mix.
The favorable impact of foreign currency exchange rate movements in the Americas was offset in EMEA.
Gross margin: the year-over-year decrease of 0.5 percentage points was due to an adverse sales mix in the Americas from increased sales of lower-margin products, being partly offset by sales in EMEA of higher margin products.
Operating expenses: the year-over-year increase of $1.9 million was primarily due to adverse movements to the provisions for doubtful debts, together with increased employee-related costs, including higher provisions for performance-related remuneration accruals.
Oilfield Services
Net sales: have increased year-over-year by $13.3 million, driven by our DRA plant expansion and associated demand. The majority of the segment's sales are concentrated in the Americas region.
Gross margin: the year-over-year decrease of 1.8 percentage points was primarily due to higher raw materials costs and pricing pressures.
Operating expenses: the year-over-year increase of $0.1 million was primarily due to an increase in research and development expenses and selling expenses, being partly offset by lower performance-based remunerations accruals.
Other Income Statement Captions
Corporate costs: the year-over-year increase of $0.4 million was primarily due to higher provisions for performance-related remuneration accruals, being partly offset by a favorable revaluation for our U.K. emissions trading scheme credits.
Adjustment to fair value of contingent consideration: is a credit in the current year of $1.1 million compared to a credit in the prior year of $17.7 million. The adjustment relates to the acquisition of QGP within our Performance Chemicals segment and a small acquisition in our Oilfield Services segment. The credits in both years relate to a reduction in the expected payables, together with the lower accretion charge calculated on the lower expected consideration payable. See Note 10 of the Notes to the Condensed Consolidated Financial Statements for additional information.
Other net income/(expense): for the three months ended September 30, 2026, was $0.5 million of income compared to $3.2 million of income in the three months ended September 30, 2025, primarily driven by the revaluation of foreign currency forward contracts, and the foreign currency translation of non-USD balances in the group.
Interest income/(expense), net: in the three months ended September 30, 2026, was $0.4 million of income compared to $2.2 million of income in the three months ended September 30, 2025, driven by lower interest rates and lower cash balances in the current year.
Income taxes: the effective tax rate was 25.8% and (12.4)% in the third quarter of 2026 and 2025, respectively. The adjusted effective tax rate, once adjusted for the items set out in the following table, was 24.7% in 2026 compared with 22.7% in 2025. The 2.0% increase in the adjusted effective rate was primarily due to the fact that a higher proportion of the Company's profits are being generated in higher tax jurisdictions. The Company believes that this adjusted effective tax rate, a non-GAAP financial measure, provides useful information to investors and may assist them in evaluating the Company's underlying performance and identifying operating trends. In addition, management uses this non-GAAP financial measure internally to evaluate the performance of the Company's operations and for planning and forecasting in subsequent periods.
The following table shows a reconciliation of the GAAP effective tax charge to the adjusted effective tax charge:
|
Three Months Ended |
||||||||
|
(in millions) |
2026 |
2025 |
||||||
|
Income before income taxes |
$ |
42.6 |
$ |
11.3 |
||||
|
Adjustment for stock compensation |
2.1 |
0.9 |
||||||
|
Adjustment to fair value of contingent consideration |
(1.1 |
) |
(17.7 |
) |
||||
|
Impairment of acquired intangible assets |
- |
19.1 |
||||||
|
Impairment of property, plant and equipment |
- |
22.9 |
||||||
|
Legacy costs of closed operations |
0.9 |
1.0 |
||||||
|
Adjusted income before income taxes |
$ |
44.5 |
$ |
37.5 |
||||
|
Income taxes |
$ |
11.0 |
$ |
(1.4 |
) |
|||
|
Tax on stock compensation |
(0.2 |
) |
(0.2 |
) |
||||
|
Tax on adjustment to fair value of contingent consideration |
- |
- |
||||||
|
Tax on impairment of acquired intangible assets |
- |
5.1 |
||||||
|
Tax on impairment of property, plant and equipment |
- |
4.8 |
||||||
|
Tax on legacy costs of closed operations |
0.2 |
0.2 |
||||||
|
Adjusted income taxes |
$ |
11.0 |
$ |
8.5 |
||||
|
GAAP effective tax rate |
25.8 |
% |
(12.4 |
)% |
||||
|
Adjusted effective tax rate |
24.7 |
% |
22.7 |
% |
||||
Nine Months Ended September 30, 2026
The following table shows the changes in sales, gross profit and operating expenses by reporting segment for the nine months ended September 30, 2026, and the nine months ended September 30, 2025:
|
Nine Months Ended |
||||||||||||||
|
(in millions, except ratios) |
2026 |
2025 |
Change |
|||||||||||
|
Net sales: |
||||||||||||||
|
Performance Chemicals |
$ |
540.2 |
$ |
513.0 |
$ |
27.2 |
+5% |
|||||||
|
Fuel Specialties |
548.0 |
507.4 |
40.6 |
+8% |
||||||||||
|
Oilfield Services |
330.0 |
302.0 |
28.0 |
+9% |
||||||||||
|
$ |
1,418.2 |
$ |
1,322.4 |
$ |
95.8 |
+7% |
||||||||
|
Gross profit: |
||||||||||||||
|
Performance Chemicals |
$ |
95.4 |
$ |
91.6 |
$ |
3.8 |
+4% |
|||||||
|
Fuel Specialties |
195.7 |
184.9 |
10.8 |
+6% |
||||||||||
|
Oilfield Services |
99.8 |
88.5 |
11.3 |
+13% |
||||||||||
|
$ |
390.9 |
$ |
365.0 |
$ |
25.9 |
+7% |
||||||||
|
Gross margin (%): |
||||||||||||||
|
Performance Chemicals |
17.7 |
17.9 |
-0.2 |
|||||||||||
|
Fuel Specialties |
35.7 |
36.4 |
-0.7 |
|||||||||||
|
Oilfield Services |
30.2 |
29.3 |
+0.9 |
|||||||||||
|
Aggregate |
27.6 |
27.6 |
- |
|||||||||||
|
Operating expenses: |
||||||||||||||
|
Performance Chemicals |
$ |
(51.4 |
) |
$ |
(48.3 |
) |
$ |
(3.1 |
) |
+6% |
||||
|
Fuel Specialties |
(86.0 |
) |
(77.3 |
) |
(8.7 |
) |
+11% |
|||||||
|
Oilfield Services |
(78.8 |
) |
(73.4 |
) |
(5.4 |
) |
+7% |
|||||||
|
Corporate costs |
(62.5 |
) |
(56.8 |
) |
(5.7 |
) |
+10% |
|||||||
|
Adjustment to fair value of contingent consideration |
5.7 |
16.2 |
(10.5 |
) |
-65% |
|||||||||
|
Restructuring charge |
- |
(0.9 |
) |
0.9 |
-100% |
|||||||||
|
Impairment of property, plant and equipment |
- |
(22.9 |
) |
22.9 |
-100% |
|||||||||
|
Impairment of intangible assets |
- |
(19.1 |
) |
19.1 |
-100% |
|||||||||
|
Profit on disposal of property, plant and equipment |
- |
0.2 |
(0.2 |
) |
-100% |
|||||||||
|
$ |
(273.0 |
) |
$ |
(282.3 |
) |
$ |
9.3 |
-3% |
||||||
Performance Chemicals
Net sales: the table below details the components which comprise the year-over-year change in net sales spread across the markets in which we operate:
|
Nine Months Ended September 30, 2026 |
||||||||||||||||
|
Change (%) |
Americas |
EMEA |
ASPAC |
Total |
||||||||||||
|
Volume |
-11 |
- |
-11 |
-5 |
||||||||||||
|
Price and product mix |
+13 |
+2 |
+9 |
+7 |
||||||||||||
|
Exchange rates |
- |
+7 |
+2 |
+3 |
||||||||||||
|
+2 |
+9 |
- |
+5 |
|||||||||||||
The Americas volumes were lower due to some supply constraints and reduced demand for our personal care products, being offset by a favorable price and product mix driven by improved pricing and higher raw material costs.
EMEA volumes were unchanged, combined with a favorable price and product mix driven by improved pricing and higher raw material costs.
ASPAC volumes were lower driven by some supply constraints and decreased demand for certain products, being partly offset by a favorable price and product mix driven by improved pricing and higher raw material costs.
EMEA and ASPAC benefited from the favorable foreign currency exchange rate movements.
Gross margin: the year-over-year decrease of 0.2 percentage points was primarily due to negative manufacturing variances in North America including the impact of the severe weather conditions in the first quarter, being partly offset by pricing improvements.
Operating expenses: the year-over-year increase of $3.1 million was primarily due to increased research and development expenses, together with higher provisions for performance-related remuneration accruals and adverse provisions for doubtful debts, being partly offset by the reductions for other expenses.
Fuel Specialties
Net sales: the table below details the components which comprise the year-over-year change in net sales spread across the markets in which we operate:
|
Nine Months Ended September 30, 2026 |
||||||||||||||||||||
|
Change (%) |
Americas |
EMEA |
ASPAC |
AvGas |
Total |
|||||||||||||||
|
Volume |
+14 |
+2 |
-3 |
-12 |
+5 |
|||||||||||||||
|
Price and product mix |
- |
- |
+1 |
+2 |
- |
|||||||||||||||
|
Exchange rates |
+1 |
+5 |
+1 |
- |
+3 |
|||||||||||||||
|
+15 |
+7 |
-1 |
-10 |
+8 |
||||||||||||||||
The Americas and EMEA volumes increased year-over-year due to higher customer demand.
ASPAC volumes declined due to the timing of demand from customers, while benefiting from a favorable price and product mix with increased sales of higher priced products.
AvGas volumes were lower than the prior year due to changing demand from customers, being partly offset by a favorable customer mix.
All our regions benefited from favorable foreign currency exchange rate movements.
Gross margin: the year-over-year decrease of 0.7 percentage points was due to an adverse sales mix in the Americas from increased sales of lower-margin products, being partly offset by sales in EMEA of higher margin products.
Operating expenses: the year-over-year increase of $8.7 million was primarily due to increased operating expenses, including increased employee-related costs and adverse provisions for doubtful debts.
Oilfield Services
Net sales: have increased year-over-year by $28.0 million, driven by our DRA plant expansion and associated demand. The majority of the segment's sales are concentrated in the Americas region.
Gross margin: the year-over-year increase of 0.9 percentage points was primarily due to a favorable sales mix, being partly offset by pricing pressures.
Operating expenses: the year-over-year increase of $5.4 million was primarily due to increased selling administration and research expenses, together with adverse provisions for doubtful debts, being partly offset by lower performance-related remuneration accruals.
Other Income Statement Captions
Corporate costs: the year-over-year increase of $5.7 million was primarily due to higher information technology costs including additional amortization for our new ERP system, higher provisions for performance-related remuneration accruals and higher legal and compliance expenses, being partly offset by lower legacy costs of closed operations and favorable revaluations for our U.K. emissions trading scheme credits.
Adjustment to fair value of contingent consideration: is a credit in the current year of $5.7 million compared to a credit in the prior year of $16.2 million. The adjustment relates to the acquisition of QGP within our Performance Chemicals segment and a small acquisition in our Oilfield Services segment. The credits in both years relate to a reduction in the expected payables, together with the lower accretion charge calculated on the lower expected consideration payable. See Note 10 of the Notes to the Condensed Consolidated Financial Statements for additional information.
Other net income/(expense): for the nine months ended September 30, 2026, was $4.2 million of income compared to $1.2 million of expense in the nine months ended September 30, 2025, primarily driven by the revaluation of foreign currency forward contracts, and the foreign currency translation of non-USD balances in the group.
Interest income/(expense), net: in the nine months ended September 30, 2026, was $2.0 million of income compared to $7.3 million of income in the nine months ended September 30, 2025, driven by lower interest rates and lower cash balances in the current year.
Income taxes: the effective tax rate was 24.6% and 20.9% in the first nine months of 2026 and 2025, respectively. The adjusted effective tax rate, once adjusted for the items set out in the following table, was 23.6% in 2026 compared with 23.4% in 2025. The 0.2% increase in the adjusted effective rate was primarily due to the fact that a higher proportion of the Company's profits are being generated in higher tax jurisdictions. The Company believes that this adjusted effective tax rate, a non-GAAP financial measure, provides useful information to investors and may assist them in evaluating the Company's underlying performance and identifying operating
trends. In addition, management uses this non-GAAP financial measure internally to evaluate the performance of the Company's operations and for planning and forecasting in subsequent periods.
The following table shows a reconciliation of the GAAP effective tax charge to the adjusted effective tax charge:
|
Nine Months Ended |
||||||||
|
(in millions) |
2026 |
2025 |
||||||
|
Income before income taxes |
$ |
124.1 |
$ |
88.8 |
||||
|
Adjustment for stock compensation |
5.8 |
5.0 |
||||||
|
Adjustment to fair value of contingent consideration |
(5.7 |
) |
(16.2 |
) |
||||
|
Impairment of acquired intangible assets |
- |
19.1 |
||||||
|
Impairment of property, plant and equipment |
- |
22.9 |
||||||
|
Legacy costs of closed operations |
4.1 |
4.8 |
||||||
|
Adjusted income before income taxes |
$ |
128.3 |
$ |
124.4 |
||||
|
Income taxes |
$ |
30.5 |
$ |
18.6 |
||||
|
Tax on stock compensation |
(1.2 |
) |
(0.5 |
) |
||||
|
Tax on adjustment to fair value of contingent consideration |
- |
- |
||||||
|
Tax on impairment of acquired intangible assets |
- |
5.1 |
||||||
|
Tax on impairment of property, plant and equipment |
- |
4.8 |
||||||
|
Tax on legacy costs of closed operations |
1.0 |
1.1 |
||||||
|
Adjusted income taxes |
$ |
30.3 |
$ |
29.1 |
||||
|
GAAP effective tax rate |
24.6 |
% |
20.9 |
% |
||||
|
Adjusted effective tax rate |
23.6 |
% |
23.4 |
% |
||||
LIQUIDITY AND FINANCIAL CONDITION
Working Capital
In the nine months ended September 30, 2026, our working capital increased by $38.7 million, while our adjusted working capital increased by $80.8 million. The difference is primarily due to the exclusion of the movements for cash and cash equivalents and the movements for income taxes, being partly offset by the other movements shown in the table below.
The Company believes that adjusted working capital, a non-GAAP financial measure (defined by the Company as trade and other accounts receivable, inventories, prepaid expenses, accounts payable and accrued liabilities rather than total current assets less total current liabilities) provides useful information to investors in evaluating the Company's underlying performance and identifying operating trends. Management uses this non-GAAP financial measure internally to allocate resources and evaluate the performance of the Company's operations. Items excluded from working capital in the adjusted working capital calculation are listed in the table below and represent factors which do not fluctuate in line with the day-to-day working capital needs of the business.
|
(in millions) |
September 30, |
December 31, |
||||||
|
Total current assets |
$ |
1,034.4 |
$ |
1,004.6 |
||||
|
Total current liabilities |
(351.2 |
) |
(360.1 |
) |
||||
|
Working capital |
683.2 |
644.5 |
||||||
|
Less cash and cash equivalents |
(251.9 |
) |
(292.5 |
) |
||||
|
Less prepaid income taxes |
(2.7 |
) |
(13.1 |
) |
||||
|
Less other current assets |
(12.4 |
) |
(7.3 |
) |
||||
|
Add back accrued income taxes |
8.4 |
5.3 |
||||||
|
Add back current portion of plant closure provisions |
4.9 |
4.9 |
||||||
|
Add back current portion of acquisition-related contingent consideration |
2.5 |
7.0 |
||||||
|
Add back current portion of operating lease liabilities |
13.5 |
15.9 |
||||||
|
Adjusted working capital |
$ |
445.5 |
$ |
364.7 |
||||
We had a $53.3 million increase in trade and other accounts receivable, including a $3.1 million increase in allowances, which was due to increased sales and the timing of collections for different customers. Days' sales outstanding in our Performance Chemicals segment remained unchanged at 72 days; increased from 57 days to 63 days in our Fuel Specialties segment; and increased from 64 days to 76 days in our Oilfield Services segment.
We had a $32.5 million increase in inventories, including a $0.4 million decrease in allowances, which was driven by higher levels of finished goods for our Fuel Specialties segment due to the timing of production, together with higher levels of raw materials for our Performance Chemicals and Oilfield Services segments, as the Company continues to maintain inventory levels necessary to manage the risk of potential supply chain disruption for certain key raw materials. Days' sales in inventory in our Performance Chemicals segment increased from 65 days to 66 days; increased from 133 days to 155 days in our Fuel Specialties segment; and decreased from 83 days to 69 days in our Oilfield Services segment.
Prepaid expenses decreased $10.1 million, from $20.1 million to $10.0 million, primarily due to the cyclical expensing of prepaid invoices.
We had a $5.1 million decrease in accounts payable and accrued liabilities, which was dependent on the timing of payments for each of our reporting segments. Creditor days (including goods received not invoiced) have increased in our Performance Chemicals segment from 50 days to 53 days; decreased from 58 days to 45 days in our Fuel Specialties segment; and increased from 46 days to 55 days in our Oilfield Services segment.
Operating Cash Flows
We generated cash from operating activities of $42.2 million in the nine months ended September 30, 2026, compared to $77.9 million in the nine months ended September 30, 2025. The decrease in cash generated from operating activities compared to the prior year was primarily related to higher increases in working capital, being partly offset by the timing of income tax payments.
Cash
At September 30, 2026, and December 31, 2025, we had cash and cash equivalents of $251.9 million and $292.5 million, respectively, of which $113.6 million and $145.4 million, respectively, were held by non-U.S. subsidiaries principally in the U.K..
The decrease in cash and cash equivalents of $40.6 million for the nine months ended September 30, 2026, was primarily driven by our continued investments in capital projects, payment of our semi-annual dividend and the repurchases of our common stock, being partly offset by the cash generated from operating activities.
Debt
We continue to have available a $250.0 million multicurrency revolving credit facility.
At September 30, 2026, and December 31, 2025, we had no debt outstanding under the revolving credit facility and no obligations were outstanding under finance leases. See Note 8 of the Notes to the Condensed Consolidated Financial Statements for additional information.
Innospec Inc. published this content on November 04, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on November 04, 2026 at 14:28 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]