- Full Year Net Income of $190.9 Million and Earnings Per
Share of $17.71
- Petroleum Additives Full Year Shipments Strong, Up
11.7%
- 566,671 Shares Repurchased in 2021
NewMarket Corporation (NYSE:NEU) Chairman and Chief Executive
Officer, Thomas E. Gottwald, released the following earnings report
of the Company’s operations for the fourth quarter and full year
2021.
Net income for the fourth quarter of 2021 was $17.2 million, or
$1.65 per share, compared to net income of $66.9 million, or $6.12
per share, for the fourth quarter of 2020. Net income for 2021 was
$190.9 million, or $17.71 per share, compared to $270.6 million or
$24.64 per share, for 2020. Prior year net income includes a gain
of $16.5 million related to the sale of a non-operating parcel of
real estate.
Sales for the petroleum additives segment for the fourth quarter
of 2021 were $573.4 million, up from $525.2 million in the fourth
quarter of 2020. Shipments decreased 1.6% between periods, with
decreases in both lubricant additives and fuel additives shipments.
Petroleum additives operating profit for the fourth quarter of 2021
was $40.7 million, compared to $84.3 million for the same period
last year. The decrease was mainly due to higher raw material and
operating costs, partially offset by increased selling prices.
For the year, petroleum additives sales were $2.3 billion
compared to sales in 2020 of $2.0 billion. The increase was mainly
due to higher shipments, increased selling prices and changes in
foreign currency. Shipments increased 11.7% between periods, with
increases in both lubricant additives and fuel additives shipments
across all regions except Europe, which reported a decrease in fuel
additives shipments. Petroleum additives operating profit for 2021
was $281.1 million compared to $333.2 million for 2020. The
decrease was due mainly to higher raw material and operating costs,
partially offset by increased selling prices and higher shipments.
Petroleum additives operating margin for 2021 was 12.0% compared to
16.7% in 2020.
Throughout the year, we have continued to see our operating
margins decline mainly due to the prolonged period of escalating
raw material costs. While we have made some progress in adjusting
our selling prices to offset the effects of the higher costs, we
have not been able to adjust sufficiently to offset the cost
increases. We continue to see a lag between when price increases go
into effect and when we begin to see margin recovery. This lag will
continue until we see a period where raw material prices stabilize.
We have also seen significant increases in many elements of our
operating costs such as utilities, logistics, insurance, and
third-party manufacturing services. In addition, the worldwide
supply chain disruptions continue to negatively impact our
business. Margin recovery and cost control will be priorities
throughout 2022 so that we will return to our historical profit
margin range. We will also be working hard 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 2021, we paid dividends of $85.9 million, repurchased
566,671 shares of our common stock for a total of $196.2 million
and funded capital expenditures of $78.9 million.
As we look forward to 2022 and beyond, we expect continued
strength in our petroleum additives sales and shipments. 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. EST on Thursday, February 3, 2022 to review
fourth quarter and full year 2021 financial results. You can access
the conference call live by dialing 1-888-506-0062 (domestic) or
1-973-528-0011 (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 February 10, 2022 at 3:00 p.m. EST by dialing
1-877-481-4010 (domestic) or 1-919-882-2331 (international). The
replay passcode number is 44141. 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/2001/44141.
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 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
recent or future acquisitions, or our inability to successfully
integrate recent or 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 2020 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)
Fourth Quarter Ended
December 31,
Twelve Months Ended
December 31,
2021
2020
2021
2020
Revenue:
Petroleum additives
$
573,387
$
525,212
$
2,343,942
$
2,001,567
All other
3,180
2,569
12,168
9,364
Total
$
576,567
$
527,781
$
2,356,110
$
2,010,931
Segment operating profit:
Petroleum additives
$
40,656
$
84,323
$
281,055
$
333,241
All other
(727
)
(2,051
)
(1,525
)
(100
)
Segment operating profit
39,929
82,272
279,530
333,141
Corporate unallocated expense
(4,623
)
(6,481
)
(21,214
)
(21,744
)
Interest and financing expenses
(9,661
)
(5,753
)
(34,218
)
(26,328
)
Other income (expense), net
4,325
6,285
23,453
46,218
Income before income tax
expense
$
29,970
$
76,323
$
247,551
$
331,287
Net income
$
17,206
$
66,884
$
190,908
$
270,568
Earnings per share - basic and
diluted
$
1.65
$
6.12
$
17.71
$
24.64
NEWMARKET CORPORATION AND
SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
INCOME
(In thousands, except per-share amounts,
unaudited)
Fourth Quarter Ended
December 31,
Twelve Months Ended
December 31,
2021
2020
2021
2020
Net sales
$
576,567
$
527,781
$
2,356,110
$
2,010,931
Cost of goods sold
469,833
377,001
1,808,403
1,415,899
Gross profit
106,734
150,780
547,707
595,032
Selling, general, and administrative
expenses
34,594
37,026
145,973
142,863
Research, development, and testing
expenses
36,711
38,199
143,952
140,367
Operating profit
35,429
75,555
257,782
311,802
Interest and financing expenses, net
9,661
5,753
34,218
26,328
Other income (expense), net
4,202
6,521
23,987
45,813
Income before income tax
expense
29,970
76,323
247,551
331,287
Income tax expense
12,764
9,439
56,643
60,719
Net income
$
17,206
$
66,884
$
190,908
$
270,568
Earnings per share - basic and
diluted
$
1.65
$
6.12
$
17.71
$
24.64
Cash dividends declared per
share
$
2.10
$
1.90
$
8.00
$
7.60
NEWMARKET CORPORATION AND
SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except share amounts,
unaudited)
December 31,
2021
December 31,
2020
ASSETS
Current assets:
Cash and cash equivalents
$
83,304
$
125,172
Marketable securities
375,918
0
Trade and other accounts receivable, less
allowance for credit losses
391,779
336,395
Inventories
498,539
401,031
Prepaid expenses and other current
assets
38,633
35,480
Total current assets
1,388,173
898,078
Property, plant, and equipment, net
676,770
665,147
Intangibles (net of amortization) and
goodwill
127,752
129,944
Prepaid pension cost
242,604
137,069
Operating lease right-of-use assets
68,402
61,329
Deferred charges and other assets
54,735
42,308
Total assets
$
2,558,436
$
1,933,875
LIABILITIES AND SHAREHOLDERS'
EQUITY
Current liabilities:
Accounts payable
$
246,097
$
189,937
Accrued expenses
85,103
78,422
Dividends payable
16,648
15,184
Income taxes payable
4,442
3,760
Operating lease liabilities
15,709
13,410
Current portion of long-term debt
349,434
0
Other current liabilities
7,654
11,742
Total current liabilities
725,087
312,455
Long-term debt
789,853
598,848
Operating lease liabilities -
noncurrent
52,591
48,324
Other noncurrent liabilities
228,776
214,424
Total liabilities
1,796,307
1,174,051
Shareholders' equity:
Common stock and paid-in capital (with no
par value; issued and outstanding shares - 10,362,722 at December
31, 2021 and 10,921,377 at December 31, 2020)
0
717
Accumulated other comprehensive loss
(82,227
)
(173,164
)
Retained earnings
844,356
932,271
Total shareholders' equity
762,129
759,824
Total liabilities and shareholders'
equity
$
2,558,436
$
1,933,875
NEWMARKET CORPORATION AND
SUBSIDIARIES
SELECTED CONSOLIDATED CASH FLOW
DATA
(In thousands, unaudited)
Twelve Months Ended
December 31,
2021
2020
Net income
$
190,908
$
270,568
Depreciation and amortization
84,320
84,002
Unrealized (gain) loss on marketable
securities
7,440
0
Cash pension and postretirement
contributions
(10,342
)
(10,655
)
Working capital changes
(116,355
)
(54,089
)
Deferred income tax expense
1,978
7,554
Purchases of marketable securities
(393,434
)
0
Proceeds from sales and maturities of
marketable securities
10,957
0
Capital expenditures
(78,934
)
(93,316
)
Issuance of 2.70% senior notes
395,052
0
Debt issuance costs
(3,897
)
(1,349
)
Net borrowings (repayments) under
revolving credit facility
148,000
(44,678
)
Repurchases of common stock
(196,220
)
(101,434
)
Dividends paid
(85,910
)
(83,417
)
Proceeds from sale of land
0
20,000
Gain on sale of land
0
(16,483
)
All other
4,569
4,072
Decrease in cash and cash equivalents
$
(41,868
)
$
(19,225
)
NEWMARKET CORPORATION AND
SUBSIDIARIES
NON-GAAP FINANCIAL INFORMATION
(In thousands, unaudited)
Fourth Quarter Ended
December 31,
Twelve Months Ended
December 31,
2021
2020
2021
2020
Net Income
$
17,206
$
66,884
$
190,908
$
270,568
Add:
Interest and financing expenses, net
9,661
5,753
34,218
26,328
Income tax expense
12,764
9,439
56,643
60,719
Depreciation and amortization
20,752
20,684
82,532
82,666
EBITDA
$
60,383
$
102,760
$
364,301
$
440,281
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220201005844/en/
FOR INVESTOR INFORMATION: Brian D. Paliotti
Investor Relations Phone: 804.788.5555 Fax:
804.788.5688 Email: investorrelations@newmarket.com
NewMarket (NYSE:NEU)
Historical Stock Chart
From Mar 2024 to Apr 2024
NewMarket (NYSE:NEU)
Historical Stock Chart
From Apr 2023 to Apr 2024