NewMarket (US:NEU)2021-10-26 13:38Financial Performance - Net sales for the third quarter of 2021 totaled $622.2 million, an increase of $109.3 million, or 21.3%, from the third quarter of 2020[82] - For the first nine months of 2021, consolidated net sales reached $1.8 billion, representing an increase of $296.4 million, or 20.0%, compared to the same period in 2020[82] - Petroleum additives net sales for the third quarter of 2021 were $619.1 million, up 21.3% from $510.3 million in the third quarter of 2020[85] - The petroleum additives operating profit decreased by $30.1 million in the third quarter of 2021 compared to the same quarter in 2020[93] Profitability and Costs - The operating profit margin for petroleum additives was 11.7% in the third quarter of 2021, down from 20.0% in the third quarter of 2020[94] - The cost of goods sold as a percentage of net sales was 77.7% for the third quarter of 2021, increasing from 67.9% in the third quarter of 2020[95] - Interest and financing expenses rose to $9.3 million in Q3 2021 from $6.5 million in Q3 2020, and totaled $24.6 million for the first nine months of 2021 compared to $20.6 million in the same period of 2020, primarily due to higher outstanding debt[100] - Other income (expense), net decreased to $7.4 million in Q3 2021 from $25.3 million in Q3 2020, and was $19.8 million for the first nine months of 2021 compared to $39.3 million in the same period of 2020[101] - Income tax expense for Q3 2021 was $9.1 million with an effective tax rate of 14.9%, down from $21.8 million and 18.6% in Q3 2020[102] Cash Flow and Working Capital - Cash and cash equivalents decreased by $65.6 million to $59.6 million as of September 30, 2021, compared to December 31, 2020[105] - Total working capital increased to $975.5 million at September 30, 2021, up from $585.6 million at December 31, 2020, with a current ratio of 3.49 to 1[111] - Cash used in investing activities totaled $445.6 million in the first nine months of 2021, including $381.5 million for marketable securities and $64.0 million for capital expenditures[112] - Long-term debt increased to $991.9 million at September 30, 2021, compared to $598.8 million at December 31, 2020[114] Market Outlook and Strategy - The company expects to continue facing challenges from rising raw material costs and supply chain disruptions[77] - The company expects the petroleum additives market to grow at an annual rate of 1% to 2% for the foreseeable future, with plans to exceed this growth rate[124] - The company aims to provide a 10% compounded return per year for shareholders over any five-year period, focusing on customer solutions and technology-driven offerings[123] Investments and Development - Investments are being made in organizational talent, technology development, and global infrastructure to support long-term growth[76] - R&D investment in petroleum additives increased by $2.3 million in Q3 2021 compared to Q3 2020, and by $5.1 million in the first nine months of 2021 compared to the same period in 2020, representing 5.7% of net sales in Q3 2021[98] Shareholder Actions - The company repurchased 292,392 shares of common stock for a total of $99.5 million during the third quarter of 2021[75] Shipment Volume - The volume of product shipments for petroleum additives increased by 11.9% in the third quarter of 2021 compared to the same period in 2020[88]