NewMarket (NEU) - 2019 Q1 - Quarterly Report

Financial Performance - Consolidated net sales for Q1 2019 were $536.6 million, a decrease of$52.6 million or 8.9% from Q1 2018[71] - Petroleum additives net sales decreased 9.2% to $532.7 million in Q1 2019 compared to$586.9 million in Q1 2018, with the largest decline in the EMEAI region[75] - Operating profit for petroleum additives increased by $3.8 million to$87.9 million in Q1 2019, with an operating profit margin of 16.5% compared to 14.3% in Q1 2018[81][83] - The volume of product shipments for petroleum additives decreased by 12.5% in Q1 2019 compared to Q1 2018, with lubricant additives shipments declining across all regions[77] Research and Development - Research and development (R&D) investment decreased by $1.1 million in Q1 2019, representing 6.2$5.2 million to $78.2 million as of March 31, 2019[92] - Cash flows from operating activities for Q1 2019 were$19.1 million, with $63.4 million used to fund higher working capital requirements[96] - Total working capital increased to$596.2 million at March 31, 2019, with a current ratio of 3.29 to 1[98] - Cash used in financing activities during Q1 2019 amounted to $4.1 million, with dividends paid of$19.6 million partially offset by borrowings of $16.1 million[100] Capital Expenditures and Debt - Capital expenditures for Q1 2019 totaled$10.4 million, with total capital spending expected to be in the range of $75 million to$85 million for the year[99] - Long-term debt increased to $782.0 million at March 31, 2019, up from$771.0 million at December 31, 2018[100] - The total long-term debt as a percentage of total capitalization decreased from 61.1% at December 31, 2018 to 59.2% at March 31, 2019, primarily due to an increase in shareholders' equity[107] Future Outlook - The company expects petroleum additives industry shipment demand to grow in the 1% to 2% range over the long term, with plans to exceed this growth rate[113] - Significant investments have been made in organizational talent, technology development, and global infrastructure to enhance operating results and customer solutions[114] - The company generates excess cash beyond current offerings and regularly reviews internal opportunities for utilizing this cash, focusing on the petroleum additives industry for future acquisitions[115] Shareholder Returns and Compliance - The company aims to provide a 10% compounded return per year for shareholders over any five-year period, although this may not be achieved each year[112] - The company remains in compliance with all covenants under its debt agreements as of March 31, 2019[106] Market Risk - There have been no material changes in market risk as of March 31, 2019, compared to the 2018 Annual Report[117]