RICHMOND, Va.--(BUSINESS WIRE)--Aug 2, 2022--

NewMarket Corporation (NYSE:NEU) Chairman and Chief Executive Officer, Thomas E. Gottwald, released the following earnings report of the Company’s operations for the second quarter and first half of 2022.

Net income for the second quarter of 2022 was $66.5 million, compared to net income of $52.0 million for the second quarter of 2021. Earnings per share increased to $6.54 per share from $4.75 per share in the prior year period. For the first half of 2022, net income was $125.8 million, or $12.28 per share, compared to net income of $121.7 million, or $11.13 per share, for the first half of last year.

Sales for the petroleum additives segment for the second quarter of 2022 were $721.0 million, up from $586.6 million in the second quarter of 2021. Petroleum additives operating profit for the second quarter of 2022 was $91.2 million, compared to $74.2 million for the same period last year. The increase was mainly due to increased selling prices and shipments partially offset by higher raw material and operating costs. Shipments between quarterly periods were up 2.6%, with increases in lubricant additives shipments partially offset by decreases in fuel additives shipments. All regions except Latin America contributed to the increase in lubricant additives shipments. All regions except North America contributed to the decrease in fuel additives shipments.

Petroleum additives sales for the first half of the year were a record $1.4 billion, compared to sales in the first half of last year of $1.2 billion. Petroleum additives operating profit for the first half of the year was $178.1 million compared to $168.3 million for the first half of 2021. The drivers for this increase were similar to those affecting the quarterly comparison of operating profit. Shipments increased 2.5% between periods, with increases in lubricant additives shipments partially offset by decreases in fuel additives shipments. All regions except Asia Pacific contributed to the increase in lubricant additives shipments. Europe and Asia Pacific were the primary drivers for the decrease in fuel additives shipments, partially offset by increases in North America and Latin America.

We are encouraged by the sequential improvement in our petroleum additives operating profit since the fourth quarter of 2021. Our efforts to recover margins and control costs are beginning to take hold, but we are still being challenged by the ongoing inflationary environment. Margin recovery and cost control will remain priorities throughout 2022 so that we can return to our historical profit margin range. In addition, worldwide supply chain disruptions continue to negatively impact our business. We are working to resolve continuing supply chain issues to meet our customers’ growing needs, and we expect to see improvement in the supply chain and in our performance as the year unfolds.

During the first half of 2022, we paid dividends of $42.9 million, repurchased 289,737 shares of our common stock for a total of $92.8 million, and funded capital expenditures of $27.8 million.

Our views toward the fundamentals of our industry remain unchanged with the petroleum additives market growing at 1% to 2% for the foreseeable future, and we expect to exceed that growth rate.

We continue to make decisions to promote long-term value for our shareholders and customers, and we remain focused on our long-term objectives. This is evidenced by our ongoing investments in supply capability and our technology- driven initiatives. We believe the fundamentals of how we run our business - a long-term view, safety-first culture, customer-focused solutions, technology-driven product offerings, and world-class supply chain capability - will continue to be beneficial for all our stakeholders.

Sincerely,

Thomas E. Gottwald

The petroleum additives segment consists of the North America (the United States and Canada), Latin America (Mexico, Central America, and South America), Asia Pacific, and Europe/Middle East/Africa/India (Europe or EMEAI) regions.

The Company has disclosed the non-GAAP financial measure EBITDA and the related calculation in the schedules included with this earnings release. EBITDA is defined as income from continuing operations before the deduction of interest and financing expenses, income taxes, depreciation (on property, plant and equipment) and amortization (on intangibles and lease right-of-use assets). The Company believes that even though this item is not required by or presented in accordance with United States generally accepted accounting principles (GAAP), this additional measure enhances understanding of the Company’s performance and period to period comparability. The Company believes that this item should not be considered an alternative to net income determined under GAAP.

As a reminder, a conference call and Internet webcast is scheduled for 3:00 p.m. EDT on Wednesday, August 3, 2022 to review second quarter 2022 financial results. You can access the conference call live by dialing 1-877-545-0523 (domestic) or 1-973-528-0016 (international) and requesting the NewMarket conference call. To avoid delays, callers should dial in five minutes early. A teleconference replay of the call will be available until August 10, 2022 at 3:00 p.m. EDT by dialing 1-877-481-4010 (domestic) or 1-919-882-2331 (international). The replay passcode number is 46033. The call will also be broadcast via the Internet and can be accessed through the Company’s website at www.NewMarket.com or www.webcaster4.com/Webcast/Page/2001/46033. A webcast replay will be available for 30 days.

NewMarket Corporation, through its subsidiaries Afton Chemical Corporation and Ethyl Corporation, develops, manufactures, blends, and delivers chemical additives that enhance the performance of petroleum products. From custom-formulated additive packages to market-general additives, the NewMarket family of companies provides the world with the technology to make engines run smoother, machines last longer, and fuels burn cleaner.

Some of the information contained in this press release constitutes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Although NewMarket’s management believes its expectations are based on reasonable assumptions within the bounds of its knowledge of its business and operations, there can be no assurance that actual results will not differ materially from expectations.

Factors that could cause actual results to differ materially from expectations include, but are not limited to, the availability of raw materials and distribution systems; disruptions at production facilities, including single-sourced facilities; hazards common to chemical businesses; the ability to respond effectively to technological changes in our industry; failure to protect our intellectual property rights; sudden, sharp, or prolonged raw material price increases; competition from other manufacturers; current and future governmental regulations; the gain or loss of significant customers; failure to attract and retain a highly-qualified workforce; an information technology system failure or security breach; the occurrence or threat of extraordinary events, including natural disasters, terrorist attacks, wars and health-related epidemics such as the COVID-19 pandemic; risks related to operating outside of the United States; political, economic, and regulatory factors concerning our products; the impact of substantial indebtedness on our operational and financial flexibility; the impact of fluctuations in foreign exchange rates; resolution of environmental liabilities or legal proceedings; limitation of our insurance coverage; our inability to realize expected benefits from investment in our infrastructure or from future acquisitions, or our inability to successfully integrate future acquisitions into our business; the underperformance of our pension assets resulting in additional cash contributions to our pension plans; and other factors detailed from time to time in the reports that NewMarket files with the Securities and Exchange Commission, including the risk factors in Item 1A. “Risk Factors” of our 2021 Annual Report on Form 10-K, which is available to shareholders upon request.

You should keep in mind that any forward-looking statement made by NewMarket in the foregoing discussion speaks only as of the date on which such forward-looking statement is made. New risks and uncertainties arise from time to time, and it is impossible for us to predict these events or how they may affect the Company. We have no duty to, and do not intend to, update or revise the forward-looking statements in this discussion after the date hereof, except as may be required by law. In light of these risks and uncertainties, you should keep in mind that the events described in any forward-looking statement made in this discussion, or elsewhere, might not occur.

NEWMARKET CORPORATION AND SUBSIDIARIES

SEGMENT RESULTS AND OTHER FINANCIAL INFORMATION

(In thousands, except per-share amounts, unaudited)

 

 

Second Quarter Ended

June 30,

 

Six Months Ended

June 30,

 

 

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

Revenue:

 

 

 

 

 

 

 

 

Petroleum additives

 

$

721,021

 

 

$

586,587

 

 

$

1,381,325

 

 

$

1,151,485

 

All other

 

 

2,618

 

 

 

4,134

 

 

 

4,866

 

 

 

5,851

 

Total

 

$

723,639

 

 

$

590,721

 

 

$

1,386,191

 

 

$

1,157,336

 

Segment operating profit:

 

 

 

 

 

 

 

 

Petroleum additives

 

$

91,185

 

 

$

74,200

 

 

$

178,107

 

 

$

168,271

 

All other

 

 

(262

)

 

 

17

 

 

 

(164

)

 

 

(647

)

Segment operating profit

 

 

90,923

 

 

 

74,217

 

 

 

177,943

 

 

 

167,624

 

Corporate unallocated expense

 

 

(7,332

)

 

 

(3,548

)

 

 

(11,222

)

 

 

(7,860

)

Interest and financing expenses

 

 

(7,084

)

 

 

(8,869

)

 

 

(16,490

)

 

 

(15,212

)

Loss on early extinguishment of debt

 

 

0

 

 

 

0

 

 

 

(7,545

)

 

 

0

 

Other income (expense), net

 

 

9,101

 

 

 

5,258

 

 

 

16,429

 

 

 

11,876

 

Income before income tax expense

 

$

85,608

 

 

$

67,058

 

 

$

159,115

 

 

$

156,428

 

Net income

 

$

66,472

 

 

$

51,952

 

 

$

125,790

 

 

$

121,664

 

Earnings per share - basic and diluted

 

$

6.54

 

 

$

4.75

 

 

$

12.28

 

 

$

11.13

 

NEWMARKET CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per-share amounts, unaudited)

 

 

Second Quarter Ended

June 30,

 

Six Months Ended

June 30,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

Net sales

 

$

723,639

 

$

590,721

 

$

1,386,191

 

$

1,157,336

Cost of goods sold

 

 

566,163

 

 

449,722

 

 

1,073,552

 

 

854,584

Gross profit

 

 

157,476

 

 

140,999

 

 

312,639

 

 

302,752

Selling, general, and administrative expenses

 

 

38,489

 

 

34,735

 

 

74,111

 

 

71,650

Research, development, and testing expenses

 

 

35,396

 

 

35,517

 

 

71,647

 

 

71,854

Operating profit

 

 

83,591

 

 

70,747

 

 

166,881

 

 

159,248

Interest and financing expenses, net

 

 

7,084

 

 

8,869

 

 

16,490

 

 

15,212

Loss on early extinguishment of debt

 

 

0

 

 

0

 

 

7,545

 

 

0

Other income (expense), net

 

 

9,101

 

 

5,180

 

 

16,269

 

 

12,392

Income before income tax expense

 

 

85,608

 

 

67,058

 

 

159,115

 

 

156,428

Income tax expense

 

 

19,136

 

 

15,106

 

 

33,325

 

 

34,764

Net income

 

$

66,472

 

$

51,952

 

$

125,790

 

$

121,664

Earnings per share - basic and diluted

 

$

6.54

 

$

4.75

 

$

12.28

 

$

11.13

Cash dividends declared per share

 

$

2.10

 

$

1.90

 

$

4.20

 

$

3.80

NEWMARKET CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In thousands, except share amounts, unaudited)

 

 

June 30,
2022

 

December 31,
2021

ASSETS

 

 

 

 

Current assets:

 

 

 

 

Cash and cash equivalents

 

$

79,491

 

 

$

83,304

 

Marketable securities

 

 

0

 

 

 

375,918

 

Trade and other accounts receivable, less allowance for credit losses

 

 

515,002

 

 

 

391,779

 

Inventories

 

 

530,186

 

 

 

498,539

 

Prepaid expenses and other current assets

 

 

36,282

 

 

 

38,633

 

Total current assets

 

 

1,160,961

 

 

 

1,388,173

 

Property, plant, and equipment, net

 

 

663,462

 

 

 

676,770

 

Intangibles (net of amortization) and goodwill

 

 

126,842

 

 

 

127,752

 

Prepaid pension cost

 

 

248,575

 

 

 

242,604

 

Operating lease right-of-use assets

 

 

66,821

 

 

 

68,402

 

Deferred charges and other assets

 

 

64,010

 

 

 

54,735

 

Total assets

 

$

2,330,671

 

 

$

2,558,436

 

LIABILITIES AND SHAREHOLDERS' EQUITY

 

 

 

 

Current liabilities:

 

 

 

 

Accounts payable

 

$

320,930

 

 

$

246,097

 

Accrued expenses

 

 

76,177

 

 

 

85,103

 

Dividends payable

 

 

16,555

 

 

 

16,648

 

Income taxes payable

 

 

9,677

 

 

 

4,442

 

Operating lease liabilities

 

 

16,018

 

 

 

15,709

Current portion of long-term debt

 

 

0

 

 

 

349,434

 

Other current liabilities

 

 

7,277

 

 

 

7,654

 

Total current liabilities

 

 

446,634

 

 

 

725,087

 

Long-term debt

 

 

911,295

 

 

 

789,853

 

Operating lease liabilities - noncurrent

 

 

50,468

 

 

 

52,591

 

Other noncurrent liabilities

 

 

200,939

 

 

 

228,776

 

Total liabilities

 

 

1,609,336

 

 

 

1,796,307

 

Shareholders' equity:

 

 

 

 

Common stock and paid-in capital (with no par value; issued and outstanding shares - 10,079,643 at June 30, 2022 and 10,362,722 at December 31, 2021)

 

 

0

 

 

 

0

 

Accumulated other comprehensive loss

 

 

(114,413

)

 

 

(82,227

)

Retained earnings

 

 

835,748

 

 

 

844,356

 

Total shareholders' equity

 

 

721,335

 

 

 

762,129

 

Total liabilities and shareholders' equity

 

$

2,330,671

 

 

$

2,558,436

 

NEWMARKET CORPORATION AND SUBSIDIARIES

SELECTED CONSOLIDATED CASH FLOW DATA

(In thousands, unaudited)

 

 

Six Months Ended

June 30,

 

 

 

2022

 

 

 

2021

 

Net income

 

$

125,790

 

 

$

121,664

 

Depreciation and amortization

 

 

41,670

 

 

 

41,719

 

Loss on early extinguishment of debt

 

 

7,545

 

 

 

0

 

Loss on marketable securities

 

 

2,977

 

 

 

2,314

 

Cash pension and postretirement contributions

 

 

(4,863

)

 

 

(5,184

)

Working capital changes

 

 

(114,665

)

 

 

(59,484

)

Deferred income tax (benefit) expense

 

 

(21,036

)

 

 

6,654

 

Purchases of marketable securities

 

 

(787

)

 

 

(387,653

)

Proceeds from sales and maturities of marketable securities

 

 

372,846

 

 

 

9,894

 

Capital expenditures

 

 

(27,807

)

 

 

(44,394

)

Redemption of 4.10% senior notes

 

 

(350,000

)

 

 

0

 

Issuance of 2.70% senior notes

 

 

0

 

 

 

395,052

 

Cash costs of 4.10% senior notes redemption

 

 

(7,099

)

 

 

0

 

Debt issuance costs

 

 

0

 

 

 

(3,897

)

Net borrowings under revolving credit facility

 

 

121,000

 

 

 

0

 

Repurchases of common stock

 

 

(90,782

)

 

 

0

 

Dividends paid

 

 

(42,860

)

 

 

(41,526

)

All other

 

 

(15,742

)

 

 

(6,467

)

(Decrease) increase in cash and cash equivalents

 

$

(3,813

)

 

$

28,692

 

NEWMARKET CORPORATION AND SUBSIDIARIES

NON-GAAP FINANCIAL INFORMATION

(In thousands, unaudited)

 

 

Second Quarter Ended

June 30,

 

Six Months Ended

June 30,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

Net Income

 

$

66,472

 

$

51,952

 

$

125,790

 

$

121,664

Add:

 

 

 

 

 

 

 

 

Interest and financing expenses, net

 

 

7,084

 

 

8,869

 

 

16,490

 

 

15,212

Income tax expense

 

 

19,136

 

 

15,106

 

 

33,325

 

 

34,764

Depreciation and amortization

 

 

20,251

 

 

20,594

 

 

40,855

 

 

40,918

EBITDA

 

$

112,943

 

$

96,521

 

$

216,460

 

$

212,558

 

View source version on businesswire.com:https://www.businesswire.com/news/home/20220801005626/en/

CONTACT: FOR INVESTOR INFORMATION CONTACT:

Brian D. Paliotti

Investor Relations

Phone: 804.788.5555

Fax: 804.788.5688

Email: investorrelations@newmarket.com

KEYWORD: UNITED STATES NORTH AMERICA VIRGINIA

INDUSTRY KEYWORD: OTHER ENERGY UTILITIES OIL/GAS OTHER MANUFACTURING ALTERNATIVE ENERGY ENERGY CHEMICALS/PLASTICS MANUFACTURING

SOURCE: NewMarket Corporation

Copyright Business Wire 2022.

PUB: 08/02/2022 05:00 PM/DISC: 08/02/2022 05:02 PM

http://www.businesswire.com/news/home/20220801005626/en

Copyright Business Wire 2022.

Trending Video

Recommended for you