Workflow
NewMarket (NEU) - 2024 Q3 - Earnings Call Transcript
NEUNewMarket (NEU)2024-10-24 20:09
Filings

Financial Data and Key Metrics Changes - Net income for Q3 2024 was 132million,or132 million, or 13.79 per share, compared to 111million,or111 million, or 11.60 per share, for the same period last year, representing a year-over-year increase in net income [3] - Petroleum additives sales for Q3 2024 were 663million,slightlydownfrom663 million, slightly down from 664 million in Q3 2023, while operating profit for petroleum additives increased to 157millionfrom157 million from 140 million in the same period last year [3] Business Line Data and Key Metrics Changes - Specialty materials sales were 59millionforQ32024and59 million for Q3 2024 and 114 million for the first nine months of 2024, with an operating profit of 16millionforbothperiods[4]−Theincreaseinpetroleumadditivesoperatingprofitwasprimarilyduetolowerrawmaterialandoperatingcosts,despitelowersellingprices[3]MarketDataandKeyMetricsChanges−Thecompanyreportedstrongcashflowsduringthequarter,withdividendspaidamountingto16 million for both periods [4] - The increase in petroleum additives operating profit was primarily due to lower raw material and operating costs, despite lower selling prices [3] Market Data and Key Metrics Changes - The company reported strong cash flows during the quarter, with dividends paid amounting to 24 million and capital expenditures of 14million[5]−AsofSeptember30,2024,thenetdebt−to−EBITDAratiowas1.4,slightlybelowthetargetoperatingrangeof1.5to2[5]CompanyStrategyandDevelopmentDirection−Thecompanyremainsfocusedonmarginmanagement,operatingcostcontrol,inventorylevels,andportfolioprofitabilityasprioritiesthroughout2024[4]−TheacquisitionofAmericanPacificCorp.(AMPAC)onJanuary16,2024,isexpectedtocontributetothespecialtymaterialssegment,withanticipatedsubstantialvariationinquarterlyresultsduetothenatureofAMPAC′sbusiness[4][5]Management′sCommentsonOperatingEnvironmentandFutureOutlook−Managementexpressedconfidenceinthefundamentalsofthebusiness,emphasizingalong−termview,safety−firstculture,customer−focusedsolutions,technology−drivenproductofferings,andworld−classsupplychaincapability[6]−Thecompanyanticipatescapitalexpendituresintherangeof14 million [5] - As of September 30, 2024, the net debt-to-EBITDA ratio was 1.4, slightly below the target operating range of 1.5 to 2 [5] Company Strategy and Development Direction - The company remains focused on margin management, operating cost control, inventory levels, and portfolio profitability as priorities throughout 2024 [4] - The acquisition of American Pacific Corp. (AMPAC) on January 16, 2024, is expected to contribute to the specialty materials segment, with anticipated substantial variation in quarterly results due to the nature of AMPAC's business [4][5] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the fundamentals of the business, emphasizing a long-term view, safety-first culture, customer-focused solutions, technology-driven product offerings, and world-class supply chain capability [6] - The company anticipates capital expenditures in the range of 50 million to $70 million for 2024 [5] Other Important Information - The financial results of the AMPAC business have been reported since the date of acquisition, with the acquired inventory sold generating no margin [4][5] - The company thanked its employees for their efforts in integrating AMPAC into the organization [6] Q&A Session Summary - The conference call concluded with an invitation for questions via email or phone, indicating the management's openness to further discussions [7]