NewMarket (NEU) - 2024 Q4 - Annual Report

Financial Performance - Consolidated net sales for 2024 amounted to $2.8 billion, an increase of$88 million, or 3.3%, from 2023[167]. - Net sales for 2024 were $2,786,558 thousand, an increase from$2,698,419 thousand in 2023, representing a growth of approximately 3.3%[281]. - Gross profit for 2024 was $886,346 thousand, up from$772,513 thousand in 2023, indicating a gross margin improvement[281]. - Operating profit increased to $590,036 thousand in 2024 from$483,045 thousand in 2023, reflecting a growth of about 22.2%[281]. - Net income for 2024 reached $462,413 thousand, compared to$388,864 thousand in 2023, marking an increase of approximately 18.9%[281]. - Earnings per share for 2024 were $48.22, up from$40.44 in 2023, representing a growth of about 19.4%[281]. - Comprehensive income for 2024 was $516,354,000, compared to$439,788,000 in 2023, reflecting a growth of 17%[285]. - Total assets increased to $3,129,541,000 in 2024, up from$2,308,871,000 in 2023, representing a 36% growth[287]. - Cash flows from operating activities of $519,592,000 in 2024, down from$576,823,000 in 2023[292]. Segment Performance - Petroleum additives net sales for 2024 were $2.6 billion, approximately 2.0$54 million attributed to lower selling prices and unfavorable foreign currency impact[169][172]. - The petroleum additives segment generated net sales of $2,636,242 in 2024, a decrease of 2.0$2,689,709 in 2023[355]. - Segment operating profit for petroleum additives was $591,854 in 2024, an increase of 14.9$514,428 in 2023[355]. - The specialty materials segment reported operating profit of $17 million for the period from the AMPAC acquisition date of January 16, 2024, to December 31, 2024[183]. - Specialty materials revenue is mainly derived from U.S. government contractors, with total sales of$141,243 in 2024[339]. Acquisition and Investments - The company completed the acquisition of AMPAC for approximately $697 million on January 16, 2024[161]. - The acquisition of AMPAC Intermediate Holdings, LLC was completed on January 16, 2024, for approximately$697 million, expanding the company's presence in mission-critical sectors[327]. - The fair value of net assets acquired from AMPAC included $650 million in intangibles and goodwill, with$256 million recognized as goodwill attributable to access to resilient sectors[330]. - The identified intangible assets from the AMPAC acquisition included a customer base valued at $275 million and formulas and technology valued at$60 million[328]. - The company acquired a business for $681,479,000 in 2024, marking a significant investment in growth[292]. Expenses and Costs - Interest and financing expenses increased to$57 million in 2024 from 37 million in 2023, primarily due to higher average debt outstanding and interest rates[184]. - Selling, general, and administrative expenses (SG&A) increased by 5 million, or 4.2%, in 2024 compared to 2023, with SG&A as a percentage of net sales at 4.8%[181]. - Research and development (R&D) investment decreased by approximately $13 million, representing 4.7$37 million in 2024, down from $41 million in 2023[210]. - Research, development, and testing expenses for 2024 were$124,898 thousand, a decrease from $137,998 thousand in 2023[281]. Cash Flow and Capital Structure - Cash generated from operating activities was$520 million in 2024, down from $577 million in 2023[188]. - Cash and cash equivalents decreased from$112 million at the end of 2023 to $77 million at December 31, 2024[191]. - Long-term debt increased from$644 million at December 31, 2023 to $971 million at December 31, 2024, representing an increase in total long-term debt percentage from 37.4$655 million at December 31, 2024, with a current ratio of 2.75 to 1, down from $675 million and a current ratio of 2.85 to 1 at the end of 2023[206]. - Cash dividends paid in 2024 were$95,902,000, up from $85,034,000 in 2023, reflecting a 10$561 million as of December 31, 2024[272]. - The company expects net periodic benefit income for its pension and postretirement plans during 2025, with a discount rate assumption of 5.875% as of December 31, 2024[222]. - The expected aggregate cash contributions to the U.S. pension plans are projected to be approximately $4 million in 2025, with an additional$1 million for postretirement benefit plans[225]. - An actuarial gain of $16 million occurred during 2024, while an actuarial loss of$3 million was recorded in 2023 on plan liabilities due to changes in assumptions[229]. Market and Growth Outlook - The petroleum additives segment is expected to grow annually up to 2%, with the company planning to exceed that growth rate[236]. - The company aims to provide a 10% compounded return per year for shareholders over any ten-year period, focusing on a customer-centric strategy and technology-driven product offerings[235].