Ashland Global Holdings Inc. announced financial results for the first quarter of fiscal year 2022, which ended December 31, 2021. The global additives and specialty ingredients company serves customers in a wide range of consumer and industrial markets.
Sales were $512 million, up nine percent compared to the prior-year period. Strong demand continued across the company’s core, global end markets, despite global logistics challenges limiting the company’s ability to meet all customer demand. Enhanced pricing across all segments and the addition of the Schülke & Mayr acquisition were strong contributors to the year-over-year sales growth. Approximately $20 million of confirmed orders were delayed from late December into January because of logistics challenges. Foreign currency negatively impacted sales by one percent.
Net income was $48 million compared to $56 million in the prior-year quarter. Income from continuing operations was $32 million compared to $43 million in the prior-year quarter, or $0.55 per diluted share compared to $0.70 in the prior-year quarter. Adjusted income from continuing operations excluding intangibles amortization expense was $51 million compared to $43 million in the prior-year quarter, or $0.88 per diluted share, up from $0.69 in the prior-year quarter. Adjusted EBITDA was $106 million, up from $101 million in the prior-year quarter.
Cash flows provided by operating activities totaled $14 million compared to $81 million in the prior-year quarter. Ongoing free cash flow totaled $26 million compared to $74 million in the prior-year quarter primarily due to an increase in working capital reflecting higher raw-material costs and rebuilding inventory in key locations close to customers.
“As we indicated in our earnings update on January 18, we are encouraged by the strong demand in each of our segments and the disciplined pricing actions being demonstrated by our commercial teams,” said Guillermo Novo, chair and chief executive officer, Ashland. “The Ashland team is executing well across the board. All businesses have taken significant pricing actions to offset widespread cost inflation. Supporting our innovation-driven growth strategy, this quarter we launched eleven new products, an increase of more than 20 percent compared to the prior-year quarter. The combined impact of the delayed orders, continued cost-inflation escalation and the temporary government-mandated shutdown of our facility in Nanjing, China resulted in earnings for the quarter that were below our original expectations.”
For fiscal year 2022, the company continues to expect sales in the range of $2.25 billion to $2.35 billion and adjusted EBITDA in the range of $550 million to $570 million. Our most recent forecast projects full year Adjusted EBITDA below the midpoint of the range.
“We expect underlying demand to remain strong and for our pricing actions to cover currently-forecasted inflation,” continued Novo. “We also expect current shipping challenges to persist over the coming quarters. We are ready to take further action to recover any additional cost inflation and will continue to proactively build inventories in key regions to mitigate the supply-chain and shipping challenges. Given the demonstrated resilience of our portfolio against a backdrop of unprecedented market and industry conditions, we do not expect significant changes to our demand. The major potential headwinds to our outlook are driven by external risks that are outside of our control and which could result in increased costs and additional supply-chain constraints. As we did in the early phase of the COVID-19 pandemic, we will stay focused on the things we can control. We will plan for and build further resilience to react quickly to events that we do not control and cannot forecast."
