NewMarket (US:NEU)2024-02-15 15:14Financial Performance - Consolidated net sales for 2023 amounted to $2.7 billion, a decrease of $66 million, or 2.4% from 2022[155] - Net sales for 2023 were $2,698,419 thousand, a decrease of 2.4% from $2,764,799 thousand in 2022[258] - Net income for 2023 was $388,864 thousand, representing a 39% increase from $279,538 thousand in 2022[258] - Earnings per share increased to $40.44 in 2023, up 45.7% from $27.77 in 2022[258] - Comprehensive income for 2023 was $439,788 thousand, compared to $289,770 thousand in 2022, an increase of 52%[261] - Net income attributable to common shareholders for 2023 was $387.5 million, a significant increase of 39% from $278.7 million in 2022[311] Operating Profit and Expenses - Petroleum additives operating profit increased by 36.0% to $514 million in 2023, compared to $378 million in 2022[165] - Operating profit rose to $483,045 thousand, reflecting a significant increase of 36% compared to $355,139 thousand in 2022[258] - SG&A expenses increased by $2 million, or 1.6%, in 2023, with SG&A as a percentage of net sales at 4.6%[167] - Cash generated from operating activities was $577 million in 2023, significantly higher than $109 million in 2022[174] Cash and Liquidity - Cash and cash equivalents increased to $112 million at the end of 2023, up from $69 million at the end of 2022[177] - Total cash and cash equivalents at the end of 2023 were $111.936 million, up from $68.712 million at the end of 2022[267] - Cash dividends paid in 2023 were $85.034 million, slightly higher than $84.263 million in 2022[267] - The allowance for credit losses was not material at December 31, 2023, indicating strong credit management[274] Debt and Capital Structure - Long-term debt decreased from $1.0 billion at December 31, 2022, to $644 million at December 31, 2023, due to net repayments of $361 million on the revolving credit facility during 2023[188] - Total long-term debt as a percentage of total capitalization decreased from 56.8% at the end of 2022 to 37.4% at the end of 2023, primarily due to reduced borrowings and increased shareholders' equity[189] - The average interest rate for borrowings under the credit facility increased to 6.2% in 2023 from 3.5% in 2022[185] - The consolidated Leverage Ratio was 1.13 as of December 31, 2023, well below the maximum allowed ratio of 3.75 to 1.00[186] Investments and Expenditures - Capital expenditures for 2023 were $48 million, with an estimated range of $50 million to $60 million for 2024, focusing on manufacturing and R&D improvements[193] - Significant investments have been made in organizational talent, technology development, and global infrastructure to enhance operational results and customer solutions[222] Pension and Retirement Plans - The company expects net periodic benefit income for pension and postretirement plans in 2024, with expected cash contributions of approximately $3 million to U.S. pension plans and $1 million to postretirement benefit plans[209] - The expected long-term rate of return for U.S. pension plans was maintained at 8.0% as of December 31, 2023[202] - The company plans to invest approximately $4 million in cash contributions to the U.K. pension plan in 2024, reflecting sensitivity to interest rate changes[218] Market and Segment Performance - The petroleum additives segment is expected to grow at an annual rate of up to 2%, with the company aiming to exceed this growth rate despite inflationary pressures[221] - The Asia Pacific region accounted for approximately 62% of the decrease in petroleum additives net sales in 2023[157] - Petroleum additives segment generated net sales of $2,689.7 million in 2023, compared to $2,754.3 million in 2022, reflecting a decline of 2.4%[315] Asset Management - Total assets decreased to $2,308,871 thousand in 2023 from $2,406,818 thousand in 2022, a decline of 4.1%[263] - Total liabilities decreased to $1,231,810 thousand in 2023, down from $1,644,411 thousand in 2022, a reduction of 25.1%[263] - Retained earnings increased to $1,096,002 thousand in 2023, up from $834,402 thousand in 2022, an increase of 31.5%[263] Inventory and Receivables - Finished goods and work-in-process inventories dropped to $351,746 in 2023 from $497,652 in 2022, reflecting a significant inventory reduction[326] - Trade receivables decreased to $368,240 in 2023 from $384,636 in 2022, indicating a reduction in outstanding customer payments[325]