NewMarket (NEU) - 2023 Q1 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Net income for Q1 2023 was $98 million or $10.09 per share, compared to $59 million or $5.75 per share in Q1 2022, representing a significant increase [11] - Petroleum additives net sales increased to $700 million in Q1 2023 from $660 million in Q1 2022, a growth of 6% [11] - Shipments decreased by 15% year-over-year, with declines in lubricant additives and fuel additive shipments across all regions except for a small increase in North America [11] Business Line Data and Key Metrics Changes - Petroleum additives operating profit for Q1 2023 was $132 million, up from $87 million in Q1 2022, primarily due to increased selling prices, despite higher raw material and operating costs [7] - Operating margin for the rolling four quarters ended March 31, 2023, was 15.2%, at the lower end of the company's long-term expectations [12] Market Data and Key Metrics Changes - Shipments have been lower than expectations due to a general economic slowdown and customer destocking, with the overall market expected to grow annually in the low single-digit range [3] - Improvements in supply chain disruptions have been noted, although inflation remains a concern [8] Company Strategy and Development Direction - The company aims to exceed the low single-digit growth rates of the overall market and is focused on long-term value creation for shareholders and customers [3][8] - Capital expenditures for the year are expected to be in the range of $60 million to $70 million, slightly lower than previous estimates due to operational timing [12] Management's Comments on Operating Environment and Future Outlook - Management highlighted the importance of cost control and margin recovery as high priorities amid ongoing inflation concerns [8] - The company maintains a low leverage position with a net debt-to-EBITDA ratio of 1.7x, within the normal range [12] Other Important Information - The company returned $49 million to shareholders through dividends and share repurchases during the quarter [3] Q&A Session Summary - No Q&A session was conducted during this conference call [13]