Innophos Holdings, Inc. reported unaudited consolidated earnings results for the three months ended March 31, 2017. For the period, the company reported net sales of $165,944,000 against $189,630,000 a year ago. The year-over-year variance was driven by 7% unfavorable volume and 5% unfavorable impact from lower average selling prices. Operating income was $16,405,000 against $21,485,000 a year ago. Income before income taxes was $15,109,000 against $19,725,000 a year ago. Net income was $10,923,000 against $12,842,000 a year ago. Diluted earnings per participating share were $0.55 against $0.66 per share a year ago. EBITDA was $26,043,000 against $30,806,000 a year ago. Adjusted EBITDA was $27,703,000 against $31,258,000 a year ago. Net income was $10,923,000 against $12,842,000 a year ago. Adjusted net income was $11,605,000 against $12,789,000 a year ago. Adjusted diluted earnings per participating share were $0.59 against $0.66 per share a year ago. Net cash used in operating activities was $10,679,000 against $3,074,000 a year ago. Capital expenditures were $8,553,000 against $8,024,000 a year ago. Net debt decreased 26%, or $55 million, year-over-year, but increased sequentially by 21%, or $28 million, due to seasonal working capital increases.

For the second quarter, the company expects sales comparables in second quarter are expected to improve sequentially, but still be down approximately 5% year-over-year, due primarily to portfolio pruning of lower margin, less differentiated applications, which did not take full effect until the second half of 2016. Earnings in the second quarter are forecast to be impacted by the remainder of consulting fees for the implementation of Phase 2 of Operational Excellence initiatives, which are estimated to be approximately $3 million. Adjusted EBITDA is therefore expected to be in that $27 million to $28 million range. The company anticipates that a tax rate will return to the more normalized level of approximately 33% beginning in the second quarter. Adjusted diluted EPS is forecast to be in the range of $0.51 to $0.54 per share.

The company provided earnings guidance for the full year of 2017. The company expects full year sales to be down 4%, primarily due to 3 factors: first, the continued pruning of lower-margin, less differentiated products in 2017; second, the impact from reduced sales for lower-margin products that were pruned from the company's portfolio in 2016 that will affect the company's comparables, particularly in the first half of the year; and finally, the soft customer demand in packaged food along with price competition from imports in the company's Industrial Specialties business. In regards to cash flow generation, the company forecasts 2017 capital expenditures to be in the range of $45 million to $50 million. This includes spending of $14 million at Geismar to construct the deep well injection system.