Newmarket Corp (NEU) 10-Q Quarterly Report April 2023

Richmond, VA, April 26, 2023 – NewMarket Corporation (NYSE:NEU) Chairman and Chief Executive Officer, Thomas E. Gottwald, released the following earnings report of the Company’s operations for the first quarter of 2023.

Net income for the first quarter of 2023 was $97.6 million, or $10.09 per share, compared to net income of $59.3 million, or $5.75 per share, for the first quarter of 2022.

Petroleum additives sales for the first quarter of 2023 were $700.0 million, compared to $660.3 million for the same period in 2022. Petroleum additives operating profit for the first quarter of 2023 was $132.1 million, compared to $86.9 million for the first quarter of 2022. The increase in operating profit was mainly due to increased selling prices, partially offset by higher raw material and operating costs and lower shipments. Shipments between quarterly periods were down 15.4%, with decreases in both lubricant additives and fuel additives across all regions except North America, which reported a small increase in fuel additives shipments. Shipments have been lower than our expectations over the last few quarters, due to a general economic slowdown and customer destocking.

During the first quarter of 2023, we funded capital expenditures of $11.9 million and returned $48.8 million to our shareholders through dividends of $20.3 million and share repurchases of $28.5 million (82,486 shares of our common stock). Our Net Debt to EBITDA ratio was 1.7 as of March 31, 2023.

We are encouraged by the sequential improvement in our petroleum additives operating profit the last two quarters. After being below our historical norms for the past six quarters, our operating margin for the rolling four quarters ended March 31, 2023 was 15.2%, which is at the lower end of the range of our long-term expectations. We have seen improvements in the supply chain disruptions which have impacted the petrochemicals industry and our company over the past several years. Inflation continues to be a concern, and cost control and margin recovery will remain high priorities.

We continue to make decisions to promote long-term value for our shareholders and customers, and we remain focused on our long-term objectives. 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 measures EBITDA, Net Debt, and Net Debt to EBITDA, as well as the related calculations 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,

The following information was filed by Newmarket Corp (NEU) on Wednesday, April 26, 2023 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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Inside Newmarket Corp's 10-Q Quarterly Report:

Revenue - Geography Highlight
Higher selling prices were partially offset by lower shipments, as well as an unfavorable impact from foreign currency exchange rates for the three months comparative periods.

Financial - Shares Highlight
The increase in shareholders' equity primarily reflects our earnings offset by dividend payments, the repurchases of our common stock, and the impact of foreign currency translation adjustments.
Revenue - Product Highlight
Overview When comparing the results of the petroleum additives segment for the first three months of 2023 with the first three months of 2022, net sales increased 6.0% primarily due to significantly higher selling prices, partially offset by decreases in product shipments and an unfavorable foreign currency impact.
Financial - Earnings Highlight
When comparing the first three months of 2023 and 2022, both gross profit and operating profit included the favorable impact of significantly higher selling prices.
Financial - Expense Highlight
The favorable impact from higher selling prices was partially offset by significantly higher raw material costs, as well as higher operating and conversion costs and lower product shipments.
Financial - Cash Flow
Cash Flows, Financial Condition, and...Read more
Financial - Expense
Petroleum additives selling, general, and...Read more
Financial - Expense
Our SG&A costs are primarily...Read more
Financial - Earnings
The operating profit margin of...Read more
Revenue - Geography
The unfavorable foreign currency impacts...Read more
Financial - Shares
Outlook Our stated goal is...Read more
Financial - Debt
The increase for the three...Read more
Financial - Earnings
Petroleum additives operating profit was...Read more
Other - Other
We expect that our total...Read more
Revenue - Product
Petroleum additives net sales for...Read more
Financial - Shares
We will continue to evaluate...Read more
Revenue - Product
The following table details the...Read more
Financial - Cash Flow
These cash flows included net...Read more
Revenue - Product
16 Table of Contents Results...Read more
Revenue - Product
When comparing the first three...Read more
Other - Other
We will continue to invest...Read more
Financial - Earnings
Petroleum Additives Segment Petroleum additives...Read more
Financial - Expense
While personnel-related costs fluctuate from...Read more
Other - Other
Recent Accounting Pronouncements There have...Read more
Other - Other
Our approach to R&D investments,...Read more
Financial - Income
18 Table of Contents Other...Read more
Revenue - Geography
The $9.8 million excluded an...Read more
Financial - Income
Income tax expense increased $10.0...Read more
Other - Other
When we use words in...Read more
Other - Other
The effective tax rate was...Read more
Other - Other
The first three months of...Read more
Financial - Cash Flow
Cash Flows - Operating Activities...Read more

Financial Statements, Disclosures and Schedules

Inside this 10-Q Quarterly Report

Material Contracts, Statements, Certifications & more

Newmarket Corp provided additional information to their SEC Filing as exhibits

Exhibit 31.A: Rule 13A-14(A)/15D-14(A) Certification

Exhibit 31.B: Rule 13A-14(A)/15D-14(A) Certification

Exhibit 32.A: Section 1350 Certification

Exhibit 32.B: Section 1350 Certification

Ticker: NEU
CIK: 1282637
Form Type: 10-Q Quarterly Report
Accession Number: 0001282637-23-000009
Submitted to the SEC: Thu Apr 27 2023 9:08:45 AM EST
Accepted by the SEC: Thu Apr 27 2023
Period: Friday, March 31, 2023
Industry: Industrial Organic Chemicals