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NewMarket (NEU) - 2024 Q3 - Quarterly Report
2024-10-24 12:47
Financial Performance - Net sales for the petroleum additives segment decreased by 1.8% to $2.0 billion for the first nine months of 2024 compared to the same period in 2023, primarily due to lower selling prices[61] - Consolidated net sales for the third quarter of 2024 totaled $724.9 million, an increase of 8.7% from $667.2 million in the third quarter of 2023[64] - The acquisition of AMPAC was completed for approximately $697 million on January 16, 2024, contributing $59.1 million to net sales in the third quarter of 2024[61] - Specialty materials segment net sales for the first nine months of 2024 were $114.2 million, reflecting the operations of AMPAC since acquisition[71] - The company reported a negligible decrease of 0.1% in petroleum additives net sales for the third quarter of 2024 compared to the same quarter in 2023[66] - The volume of product shipments for petroleum additives increased by 1.8% when comparing the first nine months of 2024 to the same period in 2023[70] Profitability and Costs - Petroleum additives operating profit increased by 12.9% for the first nine months of 2024, reflecting lower raw material and operating costs[61] - The petroleum additives segment gross profit increased by $47.7 million for the first nine months of 2024 compared to the same period in 2023[75] - Cost of goods sold as a percentage of net sales decreased to 66.6% in Q3 2024 from 69.6% in Q3 2023, contributing to an operating profit margin increase to 23.8% from 21.1%[77] - SG&A expenses increased by $1.4 million in Q3 2024 compared to Q3 2023, representing 4.8% of net sales for both periods[77] - R&D investment increased by $0.3 million in Q3 2024 compared to Q3 2023, accounting for 4.9% of net sales, while it decreased by $7.0 million for the first nine months of 2024 compared to the same period in 2023[77] Financing and Debt - The company entered into a new $900 million revolving credit facility and a $250 million unsecured term loan on January 22, 2024[61] - Long-term debt increased to $1.1 billion as of September 30, 2024, compared to $643.6 million at December 31, 2023[87] - As of September 30, 2024, the company had $191 million outstanding under its revolving credit facility and $250 million under the term loan[92] - The company had no outstanding variable rate debt under its revolving credit facility as of December 31, 2023, indicating no interest rate risk at that time[92] - Interest and financing expenses rose to $14.2 million in Q3 2024 from $9.2 million in Q3 2023, primarily due to higher average debt and interest rates[79] Tax and Other Income - Income tax expense for Q3 2024 was $36.8 million, up from $23.2 million in Q3 2023, with an effective tax rate increase to 21.8% from 17.3%[81] - Other income increased to $13.8 million in Q3 2024 from $11.3 million in Q3 2023, reflecting components of net periodic benefit cost[80] Cash Flow and Investments - Cash and cash equivalents decreased by $31.6 million to $80.3 million as of September 30, 2024, compared to December 31, 2023[82] - Cash used in investing activities totaled $724.2 million in the first nine months of 2024, primarily for the acquisition of AMPAC for $681.5 million[85] Market Outlook - The company anticipates a long-term growth rate of up to 2% in the petroleum additives market and plans to exceed this growth rate[91] - If the variable portion of interest rates hypothetically increased by 10%, the effect on the company's earnings and cash flow would be $2.3 million[92]
NewMarket (NEU) - 2024 Q3 - Quarterly Results
2024-10-23 21:16
Financial Performance - Third quarter net income was $132.3 million, or $13.79 per share, compared to $111.2 million, or $11.60 per share, in the same period last year, representing a 19.0% increase in net income [1] - Net income for the nine months ended September 30, 2024, was $351,674 thousand, compared to $308,454 thousand for the same period in 2023, reflecting a year-over-year increase of about 14% [16] - EBITDA for the nine months ended September 30, 2024, was $579,151 thousand, up from $471,212 thousand in 2023, marking a growth of around 23% [17] Sales and Operating Profit - Petroleum additives sales for the third quarter of 2024 were $663.0 million, slightly down from $663.7 million in the same period of 2023 [2] - Operating profit for petroleum additives in the third quarter of 2024 was $157.5 million, up from $139.8 million in the same period last year, reflecting a 12.8% increase [2] - For the first nine months of 2024, petroleum additives operating profit was $456.2 million, compared to $404.0 million in the same period of 2023, indicating a 12.9% increase [2] - Specialty materials sales were $59.1 million for the third quarter of 2024 and $114.2 million for the first nine months of 2024, with an operating profit of $16.0 million [3] Debt and Leverage - The company reduced debt by $259 million since the acquisition of American Pacific Corporation (AMPAC) on January 16, 2024 [4] - Long-term debt rose significantly to $1,085,006 thousand as of September 30, 2024, compared to $643,622 thousand at December 31, 2023, indicating an increase of approximately 68.5% [18] - Net debt increased to $1,004,696 thousand as of September 30, 2024, from $531,686 thousand at December 31, 2023, which is an increase of approximately 88.8% [18] - The net debt to EBITDA ratio increased to 1.4 as of September 30, 2024, compared to 0.9 in the previous year, indicating a higher leverage position [19] Cash and Assets - Cash and cash equivalents decreased to $80,310 thousand as of September 30, 2024, down from $111,936 thousand at December 31, 2023, representing a decline of approximately 28.3% [15] - Total assets increased to $3,166,284 thousand as of September 30, 2024, up from $2,308,871 thousand at December 31, 2023, representing a growth of approximately 37.2% [15] - Total current liabilities increased to $401,953 thousand as of September 30, 2024, from $364,164 thousand at December 31, 2023, which is an increase of about 10.4% [15] - The company reported a decrease in cash and cash equivalents of $31,626 thousand for the nine months ended September 30, 2024, compared to an increase of $33,848 thousand in the same period of 2023 [16] Capital Expenditures and Dividends - The company reported capital expenditures of $42,700 thousand for the nine months ended September 30, 2024, compared to $34,793 thousand in the same period of 2023, reflecting an increase of about 22.5% [16] - Cash dividends declared per share increased to $2.50 in the third quarter of 2024, up from $2.25 in the same period last year [14] Strategic Focus - The company remains focused on margin management, operating costs, inventory levels, and portfolio profitability as priorities throughout 2024 [3]
NewMarket: Accelerating EBITDA After M&A Completion
Seeking Alpha· 2024-10-08 14:30
Group 1 - The investment group European Small Cap Ideas focuses on high-quality small-cap investment opportunities in Europe, emphasizing capital gains and dividend income for continuous cash flow [1] - The group offers two model portfolios: the European Small Cap Ideas portfolio and the European REIT Portfolio, along with weekly updates and educational content [1] - An active chat room is available for discussions on the latest developments of the portfolio holdings [1] Group 2 - The article does not provide any specific investment recommendations or advice regarding suitability for particular investors [2] - It highlights that past performance is not indicative of future results, emphasizing the importance of independent analysis [2]
NewMarket (NEU) - 2024 Q2 - Quarterly Report
2024-07-30 12:49
Financial Performance - Net sales for the second quarter of 2024 totaled $710.2 million, an increase of $25.1 million, or 3.7%, from the second quarter of 2023[67] - Petroleum additives net sales for the first six months of 2024 were $1.3 billion, a decrease of 2.7% compared to $1.4 billion in the same period of 2023[68] - The operating profit for the petroleum additives segment increased by 13.1% for the first six months of 2024, reflecting lower raw material and operating costs[60] - Petroleum additives segment gross profit increased by $12.1 million in the second quarter of 2024 compared to the same period in 2023[77] - The company experienced a 2.1% decrease in petroleum additives net sales for the second quarter of 2024 compared to the same quarter in 2023[68] - The operating profit margin for petroleum additives was 20.7% for the rolling four quarters ended June 30, 2024, consistent with historical ranges[80] Financial Position and Debt - The company maintains a strong financial position with sufficient access to capital and does not anticipate issues meeting debt covenants[60] - The company entered into a new $900 million revolving credit facility and a $250 million unsecured term loan on January 22, 2024[60] - Total long-term debt increased to $1.2 billion at June 30, 2024, compared to $643.6 million at December 31, 2023[92] Expenses and Income - SG&A expenses for Q2 2024 increased by $1.7 million compared to Q2 2023, representing 4.7% of net sales[80] - R&D investment decreased by $5.3 million in Q2 2024 compared to Q2 2023, accounting for 4.3% of net sales[80] - Interest and financing expenses rose to $15.9 million in Q2 2024 from $10.3 million in Q2 2023, primarily due to higher average debt and interest rates[83] - Other income increased to $12.0 million in Q2 2024 from $10.7 million in Q2 2023, reflecting components of net periodic benefit cost[84] - Income tax expense for Q2 2024 was $31.4 million, with an effective tax rate of 21.9%, up from $25.1 million and 20.1% in Q2 2023[85] Cash Flow - Cash and cash equivalents decreased by $24.3 million to $87.6 million as of June 30, 2024[88] - Cash provided from operating activities was $217.8 million for the first six months of 2024, including $40.7 million of higher working capital requirements[89] Market Outlook - The company anticipates a long-term growth rate of up to 2% in the petroleum additives market and plans to exceed this growth rate[104] Acquisition - The acquisition of AMPAC was completed for approximately $697 million on January 16, 2024, contributing to the specialty materials segment[60] Specialty Materials - The specialty materials segment reported net sales of $38.0 million for the second quarter of 2024[72] Cost of Goods Sold - The cost of goods sold as a percentage of net sales for the second quarter of 2024 was 68.9%, down from 71.3% in the second quarter of 2023[78]
NewMarket (NEU) - 2024 Q2 - Quarterly Results
2024-07-29 21:24
Financial Performance - Net income for Q2 2024 was $111.6 million, or $11.63 per share, up from $99.6 million, or $10.36 per share in Q2 2023, representing a 20% increase in net income [4]. - Earnings per share for the first half of 2024 were $22.87, compared to $20.45 in the same period of 2023, indicating a 11% increase [4]. - Net income for the six months ended June 30, 2024, was $219,352 thousand, a 11.6% increase compared to $197,207 thousand for the same period in 2023 [25]. - EBITDA for the second quarter ended June 30, 2024, reached $187,842 thousand, up 21.3% from $154,862 thousand in the second quarter of 2023 [26]. - The company reported a gross profit of $434.8 million for the first half of 2024, up from $393.7 million in the same period of 2023 [23]. Sales and Operating Profit - Petroleum additives sales for Q2 2024 were $669.8 million, a decrease from $684.0 million in Q2 2023, while operating profit increased to $147.8 million from $132.1 million, reflecting improved margins despite lower selling prices [5]. - For the first half of 2024, petroleum additives sales totaled $1.3 billion, down from $1.4 billion in the same period of 2023, but operating profit rose to $298.7 million from $264.2 million, driven by a 2.7% increase in shipments [6]. - The specialty materials segment reported sales of $38.0 million in Q2 2024, with an operating profit of $5.0 million, compared to a loss of $5.0 million in Q1 2024 [8]. Cash Flow and Dividends - Cash flows from operations in the first half of 2024 were solid, with capital expenditures of $28.5 million and dividends paid amounting to $48.0 million [10]. - Cash dividends declared per share increased to $2.50 in Q2 2024 from $2.25 in Q2 2023 [23]. - The company paid dividends totaling $47,972 thousand in the first half of 2024, compared to $41,879 thousand in the same period of 2023, marking a 14.9% increase [25]. Debt and Leverage - Since the acquisition of American Pacific Corporation (AMPAC), the company has reduced debt by $171 million, with a Net Debt to EBITDA ratio of 1.6 as of June 30, 2024 [11]. - Long-term debt rose to $1,172,732 thousand as of June 30, 2024, compared to $643,622 thousand at December 31, 2023, indicating a significant increase of 82.3% [27]. - Net Debt to EBITDA ratio increased to 1.6 as of June 30, 2024, compared to 0.9 at December 31, 2023, reflecting a higher leverage position [27]. Assets and Retained Earnings - Total assets increased to $3,150,071 thousand as of June 30, 2024, up from $2,308,871 thousand at December 31, 2023, representing a growth of 36.5% [24]. - Retained earnings increased to $1,267,393 thousand as of June 30, 2024, up from $1,096,002 thousand at December 31, 2023, reflecting a growth of 15.6% [24]. Cash and Capital Expenditures - Cash and cash equivalents decreased to $87,632 thousand as of June 30, 2024, down from $111,936 thousand at December 31, 2023, a decline of 21.6% [24]. - Capital expenditures for the six months ended June 30, 2024, were $28,533 thousand, slightly higher than $26,006 thousand in the same period of 2023 [25]. - The company reported a decrease in cash and cash equivalents of $24,304 thousand for the six months ended June 30, 2024, compared to an increase of $62,211 thousand in the same period of 2023 [25]. Future Outlook - The company anticipates continued strength in the petroleum additives segment and is focused on the integration of AMPAC into its operations [12].
NewMarket Corporation: Surprisingly Strong Start Of The Year Despite Expensive Acquisition
Seeking Alpha· 2024-06-20 14:30
Core Insights - NewMarket (NYSE:NEU) is a holding company with subsidiaries Afton Chemical and Ethyl Corp., focusing on petroleum additives and specialty materials [1][4][17] - The company recently acquired AMPAC for approximately $700 million, which has impacted its financial results, particularly in the specialty materials division [4][5][17] Financial Performance - In Q1 2024, NewMarket reported total revenue of $697 million, a decrease of just under 1% year-over-year, while gross profit increased by over 9% to just over $216 million [11][16] - Operating profit in the petroleum additives division was nearly $151 million, contrasting with a negative operating profit of $5 million in the specialty materials division [7][11] - The company generated underlying free cash flow of $110 million, with a reported operating cash flow of approximately $124 million after accounting for working capital investments [4][8] Debt and Cash Flow - As of the end of Q1 2024, NewMarket had $117 million in cash and $1.28 billion in gross debt, resulting in a net debt level of $1.16 billion, up from $531 million at the end of the previous year [4][14] - The company anticipates ending the year with a net debt of less than $1 billion and a debt ratio closer to 1.5 times EBITDA, which is in line with its internal targets [14][19] Acquisition Impact - The AMPAC acquisition contributed to an operating loss in the specialty materials division, attributed to non-recurring items and transaction-related expenses [5][17] - NewMarket expects improved results from the specialty materials division in the upcoming quarters, aligning with pre-acquisition expectations [17] Earnings and Valuation - Net income for Q1 2024 was $107.7 million, reflecting an increase of over 10% compared to the same quarter last year, resulting in earnings per share of $11.23 [16][19] - The stock is currently trading at about 9.5 times projected full-year EBITDA of $625 million, with expectations for this multiple to decrease as debt is repaid and the AMPAC acquisition begins to contribute positively [19]
NewMarket (NEU) - 2024 Q1 - Quarterly Report
2024-04-25 13:03
Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2024 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 1-32190 NEWMARKET CORPORATION (Exact name of registrant as specified in its charter) Virginia 20-0812170 (State or other juri ...
NewMarket (NEU) - 2024 Q1 - Quarterly Results
2024-04-24 21:13
EXHIBIT 99.1 NewMarket Corporation Reports First Quarter 2024 Results Richmond, VA, April 24, 2024 – NewMarket Corporation (NYSE:NEU) Chairman and Chief Executive Officer, Thomas E. Gottwald, released the following earnings report of the Company's operations for the first quarter of 2024. Net income for the first quarter of 2024 was $107.7 million, or $11.23 per share, compared to net income of $97.6 million, or $10.09 per share, for the first quarter of 2023. Petroleum additives sales for the first quarter ...
NewMarket (NEU) - 2023 Q4 - Annual Report
2024-02-15 15:14
Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2023 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 1-32190 NEWMARKET CORPORATION Incorporated pursuant to the Laws of the Commonwealth of Virginia Internal Revenue Service Employer ...
NewMarket (NEU) - 2023 Q4 - Earnings Call Transcript
2024-02-01 22:28
Financial Data and Key Metrics Changes - Net income for Q4 2023 was $80 million or $8.38 per share, down from $91 million or $9.26 per share in Q4 2022. For the full year 2023, net income was $389 million or $40.44 per share, compared to $280 million or $27.77 per share in 2022 [5] - The decrease in operating profit was attributed to higher operating costs and lower shipments, partially offset by lower raw material costs [6] - The net debt-to-EBITDA ratio improved to 0.9 as of December 31, 2023, from 2.0 the previous year [20] Business Line Data and Key Metrics Changes - Petroleum additives operating profit for 2023 was $514 million, an increase from $378 million in 2022, driven by selling prices and a favorable product mix, despite lower shipments and higher costs [7] - Petroleum additives sales for Q4 2023 were $642 million, down from $680 million in Q4 2022. For the full year, sales were $2.7 billion compared to $2.8 billion in 2022 [16][17] - Shipments decreased by 10.7% in 2023 compared to 2022, with declines in lubricant and fuel additive shipments across all regions except Europe, which saw a slight increase in fuel additive shipments [18] Market Data and Key Metrics Changes - The overall global economic weakness and inventory rationalization in the chemical industry impacted shipments throughout 2023 [8] Company Strategy and Development Direction - The company is focused on managing operating costs, inventory levels, and portfolio profitability while continuing to invest in technology [19] - The acquisition of American Pacific Corporation for approximately $700 million is expected to be accretive to net income in 2024 and will enhance the company's capabilities in critical performance additives [10][21] - The company anticipates continued strength in the petroleum additives segment and looks forward to integrating AMPAC into its operations [22] Management's Comments on Operating Environment and Future Outlook - Management highlighted challenges from ongoing inflation and increased operating costs but expressed confidence in the fundamentals of the business and its long-term view [8][12] - The company remains committed to promoting long-term value for shareholders and customers [22] Other Important Information - The company generated solid cash flows in 2023, improving working capital by $134 million and returning $128 million to shareholders through dividends and share repurchases [9] - A new five-year $900 million revolving credit facility was established, along with a two-year $250 million unsecured term loan to enhance financial flexibility [11] Q&A Session Summary - The call concluded without specific questions being documented, indicating a focus on the prepared remarks and financial results [13][24]