NewMarket Corporation Reports Third Quarter and First Nine Months 2024 Results
-
Third Quarter Net Income of
$132 Million $13.79 -
Nine Months Petroleum Additives Operating Profit of
$456 Million - First Nine Months AMPAC Results Consistent with Pre-Acquisition Expectations
-
Debt Reduction of
$259 Million
Net income for the third quarter of 2024 was
Petroleum additives sales for the third quarter of 2024 were
Petroleum additives sales were
We remain pleased with the strong performance of our petroleum additives business during the first nine months of 2024. We continue to see the favorable results of our ongoing focus on margin management. Managing our operating costs, our inventory levels, and our portfolio profitability will remain priorities throughout 2024.
We completed the acquisition of American Pacific Corporation (AMPAC) on January 16, 2024. We report the financial results of our AMPAC business since the date of acquisition in our specialty materials segment. Specialty materials sales were
The specialty materials third quarter and first nine months 2024 results reflect the sale of AMPAC finished goods inventory that we acquired at closing. The acquired inventory, which was recorded at fair value on the acquisition date and has been sold during the first nine months of 2024, generated no margin. We expect to see substantial variation in quarterly results for AMPAC due to the nature of its business, and we anticipate full year 2024 results to be consistent with our pre-acquisition expectations.
Our operations produced strong cash flows during the first nine months of 2024. We paid dividends of
I want to thank our dedicated employees for their hard work in welcoming and integrating AMPAC into our family of companies. Our team continues to make decisions to promote long-term value for our shareholders and customers, and remains focused on our long-term objectives. We believe the fundamentals of how we run our business - a long-term view, safety-first culture, customer-focused solutions, technology-driven product offerings, and world-class supply chain capability - will continue to be beneficial for all our stakeholders.
Sincerely,
Thomas E. Gottwald
The petroleum additives segment consists of the
The Company has disclosed the non-GAAP financial measures EBITDA, Net Debt, and Net Debt to EBITDA, as well as the related calculations in the schedules included with this earnings release. EBITDA is defined as income from continuing operations before the deduction of interest and financing expenses, income taxes, depreciation (on property, plant, and equipment) and amortization (on intangibles and lease right-of-use assets). Net Debt is defined as long-term debt, including current maturities, less cash and cash equivalents. Net Debt to EBITDA is defined as Net Debt divided by EBITDA for the rolling four quarters ended as of the specified date. The Company believes that even though these items are not required by or presented in accordance with
As a reminder, a conference call and webcast is scheduled for 3:00 p.m. ET on Thursday, October 24, 2024, to review third quarter 2024 financial results. You can access the conference call live by dialing 1-888-506-0062 (domestic) or 1-973-528-0011 (international) and requesting the NewMarket conference call. To avoid delays, callers should dial in five minutes early. A teleconference replay of the call will be available until October 31, 2024, at 3:00 p.m. ET by dialing 1-877-481-4010 (domestic) or 1-919-882-2331 (international). The replay passcode number is 51294. The call will also be broadcast via the internet and can be accessed through the Company’s website at www.newmarket.com or www.webcaster4.com/Webcast/Page/2001/51294. A webcast replay will be available for 30 days.
NewMarket Corporation is a holding company operating through its subsidiaries, Afton Chemical Corporation (Afton), Ethyl Corporation (Ethyl), and American Pacific Corporation (AMPAC). The Afton and Ethyl companies develop, manufacture, blend, and deliver chemical additives that enhance the performance of petroleum products. AMPAC is a manufacturer of specialty materials primarily used in solid rocket motors for the aerospace and defense industries. The NewMarket family of companies has a long-term commitment to its people, to safety, to providing innovative solutions for its customers, and to making the world a better place.
Some of the information contained in this press release constitutes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Although NewMarket’s management believes its expectations are based on reasonable assumptions within the bounds of its knowledge of its business and operations, there can be no assurance that actual results will not differ materially from expectations.
Factors that could cause actual results to differ materially from expectations include, but are not limited to, the availability of raw materials and distribution systems; disruptions at production facilities, including single-sourced facilities; hazards common to chemical businesses; the ability to respond effectively to technological changes in our industries; failure to protect our intellectual property rights; sudden, sharp, or prolonged raw material price increases; competition from other manufacturers; current and future governmental regulations; the loss of significant customers; termination or changes to contracts with contractors and subcontractors of the
You should keep in mind that any forward-looking statement made by NewMarket in the foregoing discussion speaks only as of the date on which such forward-looking statement is made. New risks and uncertainties arise from time to time, and it is impossible for us to predict these events or how they may affect us. We have no duty to, and do not intend to, update or revise the forward-looking statements in this discussion after the date hereof, except as may be required by law. In light of these risks and uncertainties, you should keep in mind that the events described in any forward-looking statement made in this discussion, or elsewhere, might not occur.
NEWMARKET CORPORATION AND SUBSIDIARIES |
||||||||||||||||
SEGMENT RESULTS AND OTHER FINANCIAL INFORMATION |
||||||||||||||||
(In thousands, except per-share amounts, unaudited) |
||||||||||||||||
|
||||||||||||||||
|
|
Third Quarter Ended
|
|
Nine Months Ended
|
||||||||||||
|
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
Net Sales: |
|
|
|
|
|
|
|
|
||||||||
Petroleum additives |
|
$ |
663,014 |
|
|
$ |
663,719 |
|
|
$ |
2,010,104 |
|
|
$ |
2,047,679 |
|
Specialty materials |
|
|
59,094 |
|
|
|
0 |
|
|
|
114,151 |
|
|
|
0 |
|
All other |
|
|
2,839 |
|
|
|
3,431 |
|
|
|
7,656 |
|
|
|
7,390 |
|
Total |
|
$ |
724,947 |
|
|
$ |
667,150 |
|
|
$ |
2,131,911 |
|
|
$ |
2,055,069 |
|
Segment operating profit: |
|
|
|
|
|
|
|
|
||||||||
Petroleum additives |
|
$ |
157,468 |
|
|
$ |
139,820 |
|
|
$ |
456,196 |
|
|
$ |
404,026 |
|
Specialty materials |
|
|
15,962 |
|
|
|
0 |
|
|
|
15,967 |
|
|
|
0 |
|
All other |
|
|
(93 |
) |
|
|
(764 |
) |
|
|
(1,548 |
) |
|
|
(2,761 |
) |
Segment operating profit |
|
|
173,337 |
|
|
|
139,056 |
|
|
|
470,615 |
|
|
|
401,265 |
|
Corporate unallocated expense |
|
|
(3,953 |
) |
|
|
(6,389 |
) |
|
|
(13,495 |
) |
|
|
(19,690 |
) |
Interest and financing expenses |
|
|
(14,157 |
) |
|
|
(9,221 |
) |
|
|
(45,721 |
) |
|
|
(30,249 |
) |
Other income (expense), net |
|
|
13,944 |
|
|
|
11,036 |
|
|
|
38,459 |
|
|
|
33,014 |
|
Income before income tax expense |
|
$ |
169,171 |
|
|
$ |
134,482 |
|
|
$ |
449,858 |
|
|
$ |
384,340 |
|
Net income |
|
$ |
132,322 |
|
|
$ |
111,247 |
|
|
$ |
351,674 |
|
|
$ |
308,454 |
|
Earnings per share - basic and diluted |
|
$ |
13.79 |
|
|
$ |
11.60 |
|
|
$ |
36.66 |
|
|
$ |
32.05 |
|
NEWMARKET CORPORATION AND SUBSIDIARIES |
||||||||||||
CONSOLIDATED STATEMENTS OF INCOME |
||||||||||||
(In thousands, except per-share amounts, unaudited) |
||||||||||||
|
||||||||||||
|
|
Third Quarter Ended
|
|
Nine Months Ended
|
||||||||
|
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
Net sales |
|
$ |
724,947 |
|
$ |
667,150 |
|
$ |
2,131,911 |
|
$ |
2,055,069 |
Cost of goods sold |
|
|
481,107 |
|
|
465,445 |
|
|
1,453,251 |
|
|
1,459,682 |
Gross profit |
|
|
243,840 |
|
|
201,705 |
|
|
678,660 |
|
|
595,387 |
Selling, general, and administrative expenses |
|
|
42,124 |
|
|
37,386 |
|
|
129,329 |
|
|
114,671 |
Research, development, and testing expenses |
|
|
32,193 |
|
|
31,894 |
|
|
92,056 |
|
|
99,008 |
Operating profit |
|
|
169,523 |
|
|
132,425 |
|
|
457,275 |
|
|
381,708 |
Interest and financing expenses, net |
|
|
14,157 |
|
|
9,221 |
|
|
45,721 |
|
|
30,249 |
Other income (expense), net |
|
|
13,805 |
|
|
11,278 |
|
|
38,304 |
|
|
32,881 |
Income before income tax expense |
|
|
169,171 |
|
|
134,482 |
|
|
449,858 |
|
|
384,340 |
Income tax expense |
|
|
36,849 |
|
|
23,235 |
|
|
98,184 |
|
|
75,886 |
Net income |
|
$ |
132,322 |
|
$ |
111,247 |
|
$ |
351,674 |
|
$ |
308,454 |
Earnings per share - basic and diluted |
|
$ |
13.79 |
|
$ |
11.60 |
|
$ |
36.66 |
|
$ |
32.05 |
Cash dividends declared per share |
|
$ |
2.50 |
|
$ |
2.25 |
|
$ |
7.50 |
|
$ |
6.60 |
NEWMARKET CORPORATION AND SUBSIDIARIES |
||||||||
CONSOLIDATED BALANCE SHEETS |
||||||||
(In thousands, except share amounts, unaudited) |
||||||||
|
||||||||
|
|
September 30,
|
|
December 31,
|
||||
ASSETS |
|
|
|
|
||||
Current assets: |
|
|
|
|
||||
Cash and cash equivalents |
|
$ |
80,310 |
|
|
$ |
111,936 |
|
Trade and other accounts receivable, less allowance for credit losses |
|
|
487,607 |
|
|
|
432,349 |
|
Inventories |
|
|
534,462 |
|
|
|
456,234 |
|
Prepaid expenses and other current assets |
|
|
35,250 |
|
|
|
39,051 |
|
Total current assets |
|
|
1,137,629 |
|
|
|
1,039,570 |
|
Property, plant, and equipment, net |
|
|
755,409 |
|
|
|
654,747 |
|
Intangibles (net of amortization) and goodwill |
|
|
757,060 |
|
|
|
124,642 |
|
Prepaid pension cost |
|
|
390,018 |
|
|
|
370,882 |
|
Operating lease right-of-use assets, net |
|
|
73,123 |
|
|
|
70,823 |
|
Deferred charges and other assets |
|
|
53,045 |
|
|
|
48,207 |
|
Total assets |
|
$ |
3,166,284 |
|
|
$ |
2,308,871 |
|
LIABILITIES AND SHAREHOLDERS' EQUITY |
|
|
|
|
||||
Current liabilities: |
|
|
|
|
||||
Accounts payable |
|
$ |
259,434 |
|
|
$ |
231,137 |
|
Accrued expenses |
|
|
82,364 |
|
|
|
76,546 |
|
Dividends payable |
|
|
21,419 |
|
|
|
19,212 |
|
Income taxes payable |
|
|
17,011 |
|
|
|
6,131 |
|
Operating lease liabilities |
|
|
15,683 |
|
|
|
15,074 |
|
Other current liabilities |
|
|
6,042 |
|
|
|
16,064 |
|
Total current liabilities |
|
|
401,953 |
|
|
|
364,164 |
|
Long-term debt |
|
|
1,085,006 |
|
|
|
643,622 |
|
Operating lease liabilities - noncurrent |
|
|
57,617 |
|
|
|
55,058 |
|
Other noncurrent liabilities |
|
|
257,422 |
|
|
|
168,966 |
|
Total liabilities |
|
|
1,801,998 |
|
|
|
1,231,810 |
|
Shareholders' equity: |
|
|
|
|
||||
Common stock and paid-in capital (with no par value; issued and outstanding shares - 9,595,011 at September 30, 2024 and 9,590,086 at December 31, 2023) |
|
|
3,201 |
|
|
|
2,130 |
|
Accumulated other comprehensive loss |
|
|
(14,644 |
) |
|
|
(21,071 |
) |
Retained earnings |
|
|
1,375,729 |
|
|
|
1,096,002 |
|
Total shareholders' equity |
|
|
1,364,286 |
|
|
|
1,077,061 |
|
Total liabilities and shareholders' equity |
|
$ |
3,166,284 |
|
|
$ |
2,308,871 |
|
NEWMARKET CORPORATION AND SUBSIDIARIES |
||||||||
SELECTED CONSOLIDATED CASH FLOW DATA |
||||||||
(In thousands, unaudited) |
||||||||
|
||||||||
|
|
Nine Months Ended
|
||||||
|
|
|
2024 |
|
|
|
2023 |
|
Net income |
|
$ |
351,674 |
|
|
$ |
308,454 |
|
Depreciation and amortization |
|
|
84,894 |
|
|
|
57,665 |
|
Cash pension and postretirement contributions |
|
|
(8,940 |
) |
|
|
(7,132 |
) |
Working capital changes |
|
|
(81,866 |
) |
|
|
71,900 |
|
Deferred income tax benefit |
|
|
(10,468 |
) |
|
|
(16,336 |
) |
Capital expenditures |
|
|
(42,700 |
) |
|
|
(34,793 |
) |
Acquisition of business, net of cash acquired |
|
|
(681,479 |
) |
|
|
0 |
|
Net borrowings (repayments) under revolving credit facility |
|
|
191,000 |
|
|
|
(225,000 |
) |
Proceeds from term loan |
|
|
250,000 |
|
|
|
0 |
|
Dividends paid |
|
|
(71,959 |
) |
|
|
(63,457 |
) |
Debt issuance costs |
|
|
(2,251 |
) |
|
|
0 |
|
Repurchases of common stock |
|
|
0 |
|
|
|
(42,864 |
) |
All other |
|
|
(9,531 |
) |
|
|
(14,589 |
) |
(Decrease) increase in cash and cash equivalents |
|
$ |
(31,626 |
) |
|
$ |
33,848 |
|
NEWMARKET CORPORATION AND SUBSIDIARIES |
||||||||||||
NON-GAAP FINANCIAL INFORMATION |
||||||||||||
(In thousands, unaudited) |
||||||||||||
|
||||||||||||
Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) |
|
|
||||||||||
|
|
|
|
|
|
|
||||||
|
|
Third Quarter Ended
|
|
Nine Months Ended
|
||||||||
|
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
Net Income |
|
$ |
132,322 |
|
$ |
111,247 |
|
$ |
351,674 |
|
$ |
308,454 |
Add: |
|
|
|
|
|
|
|
|
||||
Interest and financing expenses, net |
|
|
14,157 |
|
|
9,221 |
|
|
45,721 |
|
|
30,249 |
Income tax expense |
|
|
36,849 |
|
|
23,235 |
|
|
98,184 |
|
|
75,886 |
Depreciation and amortization |
|
|
29,379 |
|
|
16,760 |
|
|
83,572 |
|
|
56,623 |
EBITDA |
|
$ |
212,707 |
|
$ |
160,463 |
|
$ |
579,151 |
|
$ |
471,212 |
|
|
|
|
|
|
|
|
|
||||
Net Debt to EBITDA |
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
September 30,
|
|
December 31,
|
||||
Long-term debt, including current maturities |
|
|
|
|
|
$ |
1,085,006 |
|
$ |
643,622 |
||
Less: Cash and cash equivalents |
|
|
|
|
|
|
80,310 |
|
|
111,936 |
||
Net Debt |
|
|
|
|
|
$ |
1,004,696 |
|
$ |
531,686 |
||
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
Rolling Four Quarters Ended |
||||||
|
|
|
|
|
|
September 30,
|
|
December 31,
|
||||
Net Income |
|
|
|
|
|
$ |
432,084 |
|
$ |
388,864 |
||
Add: |
|
|
|
|
|
|
|
|
||||
Interest and financing expenses, net |
|
|
|
|
|
|
52,831 |
|
|
37,359 |
||
Income tax expense |
|
|
|
|
|
|
122,396 |
|
|
100,098 |
||
Depreciation and amortization |
|
|
|
|
|
|
103,569 |
|
|
76,620 |
||
EBITDA-Rolling Four Quarters |
|
|
|
|
|
$ |
710,880 |
|
$ |
602,941 |
||
|
|
|
|
|
|
|
|
|
||||
Net Debt to EBITDA |
|
|
|
|
|
|
1.4 |
|
|
0.9 |
||
View source version on businesswire.com: https://www.businesswire.com/news/home/20241022414012/en/
William J. Skrobacz
Investor Relations
Phone: 804.788.5555
Fax: 804.788.5688
Email: investorrelations@newmarket.com
Source: NewMarket Corporation
