NEU NewMarket Corporation

• Full Year Net Income of $462 Million and Earnings Per Share of $48.22

• Full Year Petroleum Additives Operating Profit of $592 Million

• AMPAC Sales for 2024 Surpass Pre-Acquisition Expectations

• Debt Reduction of $373 Million since AMPAC Acquisition

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 of 2024.

Net income for the fourth quarter of 2024 was $110.7 million, or $11.56 per share, compared to net income of $80.4 million, or $8.38 per share, for the same period last year. Net income for 2024 was $462.4 million, or $48.22 per share, compared to $388.9 million, or $40.44 per share, for 2023.

Petroleum additives sales for the fourth quarter of 2024 were $626.1 million, compared to $642.0 million for the same period in 2023. Petroleum additives operating profit for the fourth quarter of 2024 was $135.7 million, compared to $110.4 million for the fourth quarter of 2023. The increase in petroleum additives operating profit was primarily driven by lower operating costs. Our continued focus on operational efficiency enabled these cost savings, while still making investments in technology solutions for our customers. These gains were partially offset by a decrease in shipments, as our customers managed year-end inventory levels.

Sales for the petroleum additives segment for 2024 were $2.6 billion, compared to $2.7 billion in 2023. Petroleum additives operating profit for 2024 was $591.9 million, compared to $514.4 million for 2023. The increase in operating profit between these periods was primarily due to lower operating costs from our efficiency efforts, as well as lower raw material costs partially offset by lower selling prices. Shipments were flat in 2024 compared to 2023, with a small increase in lubricant additives shipments offset by a decline in fuel additives shipments.

We are pleased with the strong performance of our petroleum additives business in 2024 and continue to see favorable results from our ongoing efficiency initiatives. Our priorities for 2025 include continuing to invest in technology to meet customer needs, enhancing our operational efficiency to sustain those investments, optimizing inventory levels and improving our portfolio profitability.

We completed the acquisition of American Pacific Corporation (AMPAC) on January 16, 2024. We report the financial results of our AMPAC business in our specialty materials segment. Specialty materials sales were $27.1 million for the fourth quarter of 2024 and $141.2 million for the full year of 2024, surpassing our pre-acquisition expectations. Specialty materials operating profit was $1.5 million for the fourth quarter of 2024 and $17.5 million for the full year of 2024.

The specialty materials full year 2024 results include the sale of AMPAC finished goods inventory that we acquired at closing. The acquired inventory was recorded at fair value on the acquisition date and sold during 2024, generating no margin.

Our operations generated strong cash flows during 2024. We paid dividends of $95.9 million, funded capital expenditures of $57.3 million, and repurchased common stock for $31.9 million. Since the AMPAC acquisition, we have made net payments of $373.0 million on our revolving credit facility. As of December 31, 2024, our Net Debt to EBITDA ratio was 1.2, which is below our target operating range of 1.5 to 2.0.

As we look forward to 2025 and beyond, we expect continued strength in both our petroleum additives and specialty materials segments. Our dedicated team continues to make decisions to promote long-term value for our shareholders and customers, and remains 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 specialty materials segment, which consists of the AMPAC business, operates primarily in North America.

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, plant, and equipment) and amortization (on intangibles and lease right-of-use assets). Net Debt is defined as long-term debt, including current maturities, less cash and cash equivalents. Net Debt to EBITDA is defined as Net Debt divided by EBITDA for the rolling four quarters ended as of the specified date. The Company believes that even though these items are not required by or presented in accordance with United States generally accepted accounting principles (GAAP), these additional measures enhance understanding of the Company’s performance and period to period comparability. The Company believes that these items should not be considered an alternative to our results determined under GAAP.

As a reminder, a conference call and webcast is scheduled for 3:00 p.m. ET on Tuesday, February 4, 2025, to review fourth quarter and full year 2024 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 Tuesday, February 11, 2025, at 3:00 p.m. ET by dialing 1-877-481-4010 (domestic) or 1-919-882-2331 (international). The replay passcode number is 51799. 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/2001/51799. A webcast replay will be available for 30 days.

NewMarket Corporation is a holding company operating through its subsidiaries, Afton Chemical Corporation (Afton), Ethyl Corporation (Ethyl), and American Pacific Corporation (AMPAC). The Afton and Ethyl companies develop, manufacture, blend, and deliver chemical additives that enhance the performance of petroleum products. AMPAC is a manufacturer of specialty materials primarily used in solid rocket motors for the aerospace and defense industries. The NewMarket family of companies has a long-term commitment to its people, to safety, to providing innovative solutions for its customers, and to making the world a better place.

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 industries; 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 loss of significant customers; termination or changes to contracts with contractors and subcontractors of the U.S. government or directly with the U.S. government; 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; 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 acquisitions, or our inability to successfully integrate 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 Part I, Item 1A. “Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2023 and Part II, Item 1A. “Risk Factors” of our Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2024, which are available to shareholders at www.newmarket.com.

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 us. 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,

 

 

 

2024

 

 

 

2023

 

 

 

2024

 

 

 

2023

 

Net Sales:

 

 

 

 

 

 

 

 

Petroleum additives

 

$

626,138

 

 

$

642,030

 

 

$

2,636,242

 

 

$

2,689,709

 

Specialty materials

 

 

27,092

 

 

 

0

 

 

 

141,243

 

 

 

0

 

All other

 

 

1,417

 

 

 

1,320

 

 

 

9,073

 

 

 

8,710

 

Total

 

$

654,647

 

 

$

643,350

 

 

$

2,786,558

 

 

$

2,698,419

 

Segment operating profit:

 

 

 

 

 

 

 

 

Petroleum additives

 

$

135,658

 

 

$

110,402

 

 

$

591,854

 

 

$

514,428

 

Specialty materials

 

 

1,485

 

 

 

0

 

 

 

17,452

 

 

 

0

 

All other

 

 

(735

)

 

 

(2,225

)

 

 

(2,283

)

 

 

(4,986

)

Segment operating profit

 

 

136,408

 

 

 

108,177

 

 

 

607,023

 

 

 

509,442

 

Corporate unallocated expense

 

 

(3,837

)

 

 

(6,457

)

 

 

(17,332

)

 

 

(26,147

)

Interest and financing expenses

 

 

(11,645

)

 

 

(7,110

)

 

 

(57,366

)

 

 

(37,359

)

Other income (expense), net

 

 

13,323

 

 

 

10,012

 

 

 

51,782

 

 

 

43,026

 

Income before income tax expense

 

$

134,249

 

 

$

104,622

 

 

$

584,107

 

 

$

488,962

 

Net income

 

$

110,739

 

 

$

80,410

 

 

$

462,413

 

 

$

388,864

 

Earnings per share - basic and diluted

 

$

11.56

 

 

$

8.38

 

 

$

48.22

 

 

$

40.44

 

 

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,

 

 

 

2024

 

 

 

2023

 

 

 

2024

 

 

 

2023

 

Net sales

 

$

654,647

 

$

643,350

 

$

2,786,558

 

$

2,698,419

Cost of goods sold

 

 

446,961

 

 

 

466,224

 

 

 

1,900,212

 

 

 

1,925,906

 

Gross profit

 

 

207,686

 

 

 

177,126

 

 

 

886,346

 

 

 

772,513

 

Selling, general, and administrative expenses

 

 

42,083

 

 

 

36,799

 

 

 

171,412

 

 

 

151,470

 

Research, development, and testing expenses

 

 

32,842

 

 

 

38,990

 

 

 

124,898

 

 

 

137,998

 

Operating profit

 

 

132,761

 

 

 

101,337

 

 

 

590,036

 

 

 

483,045

 

Interest and financing expenses, net

 

 

11,645

 

 

 

7,110

 

 

 

57,366

 

 

 

37,359

 

Other income (expense), net

 

 

13,133

 

 

 

10,395

 

 

 

51,437

 

 

 

43,276

 

Income before income tax expense

 

 

134,249

 

 

 

104,622

 

 

 

584,107

 

 

 

488,962

 

Income tax expense

 

 

23,510

 

 

 

24,212

 

 

 

121,694

 

 

 

100,098

 

Net income

 

$

110,739

 

 

$

80,410

 

 

$

462,413

 

 

$

388,864

 

Earnings per share - basic and diluted

 

$

11.56

 

 

$

8.38

 

 

$

48.22

 

 

$

40.44

 

Cash dividends declared per share

 

$

2.50

 

 

$

2.25

 

 

$

10.00

 

 

$

8.85

 

 

NEWMARKET CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In thousands, except share amounts, unaudited)

 

 

 

December 31, 2024

 

December 31, 2023

ASSETS

 

 

 

 

Current assets:

 

 

 

 

Cash and cash equivalents

 

$

77,476

 

$

111,936

 

Trade and other accounts receivable, less allowance for credit losses

 

 

395,450

 

 

 

432,349

 

Inventories

 

 

505,426

 

 

 

456,234

 

Prepaid expenses and other current assets

 

 

51,203

 

 

 

39,051

 

Total current assets

 

 

1,029,555

 

 

 

1,039,570

 

Property, plant, and equipment, net

 

 

735,361

 

 

 

654,747

 

Intangibles (net of amortization) and goodwill

 

 

750,424

 

 

 

124,642

 

Prepaid pension cost

 

 

490,418

 

 

 

370,882

 

Operating lease right-of-use assets, net

 

 

71,253

 

 

 

70,823

 

Deferred charges and other assets

 

 

52,530

 

 

 

48,207

 

Total assets

 

$

3,129,541

 

 

$

2,308,871

 

LIABILITIES AND SHAREHOLDERS' EQUITY

 

 

 

 

Current liabilities:

 

 

 

 

Accounts payable

 

$

225,874

 

 

$

231,137

 

Accrued expenses

 

 

89,277

 

 

 

76,546

 

Dividends payable

 

 

22,037

 

 

 

19,212

 

Income taxes payable

 

 

15,798

 

 

 

6,131

 

Operating lease liabilities

 

 

15,337

 

 

 

15,074

 

Other current liabilities

 

 

6,155

 

 

 

16,064

 

Total current liabilities

 

 

374,478

 

 

 

364,164

 

Long-term debt

 

 

971,281

 

 

 

643,622

 

Operating lease liabilities - noncurrent

 

 

54,754

 

 

 

55,058

 

Other noncurrent liabilities

 

 

267,445

 

 

 

168,966

 

Total liabilities

 

 

1,667,958

 

 

 

1,231,810

 

Shareholders' equity:

 

 

 

 

Common stock and paid-in capital (with no par value; issued and outstanding shares - 9,524,789 at December 31, 2024 and 9,590,086 at December 31, 2023)

 

 

0

 

 

 

2,130

 

Accumulated other comprehensive income (loss)

 

 

32,870

 

 

 

(21,071

)

Retained earnings

 

 

1,428,713

 

 

 

1,096,002

 

Total shareholders' equity

 

 

1,461,583

 

 

 

1,077,061

 

Total liabilities and shareholders' equity

 

$

3,129,541

 

 

$

2,308,871

 

 

NEWMARKET CORPORATION AND SUBSIDIARIES

SELECTED CONSOLIDATED CASH FLOW DATA

(In thousands, unaudited)

 

 

 

Twelve Months Ended December 31,

 

 

 

2024

 

 

 

2023

 

Net income

 

$

462,413

 

 

$

388,864

 

Depreciation and amortization

 

 

116,957

 

 

 

78,010

 

Cash pension and postretirement contributions

 

 

(11,814

)

 

 

(10,219

)

Working capital changes

 

 

(23,332

)

 

 

134,280

 

Deferred income tax benefit

 

 

(12,799

)

 

 

(14,750

)

Capital expenditures

 

 

(57,319

)

 

 

(48,293

)

Acquisition of business, net of cash acquired

 

 

(681,479

)

 

 

0

 

Net borrowings (repayments) under revolving credit facility

 

 

77,000

 

 

 

(361,000

)

Proceeds from term loan

 

 

250,000

 

 

 

0

 

Dividends paid

 

 

(95,902

)

 

 

(85,034

)

Debt issuance costs

 

 

(2,251

)

 

 

0

 

Repurchases of common stock

 

 

(31,914

)

 

 

(42,864

)

All other

 

 

(24,020

)

 

 

4,230

 

(Decrease) increase in cash and cash equivalents

 

$

(34,460

)

 

$

43,224

 

 

NEWMARKET CORPORATION AND SUBSIDIARIES

NON-GAAP FINANCIAL INFORMATION

(In thousands, unaudited)

 

Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA)

 

 

 

 

 

 

 

 

 

Fourth Quarter Ended December 31,

 

Twelve Months Ended December 31,

 

 

 

2024

 

 

 

2023

 

 

 

2024

 

 

 

2023

 

Net Income

 

$

110,739

 

$

80,410

 

$

462,413

 

$

388,864

Add:

 

 

 

 

 

 

 

 

Interest and financing expenses, net

 

 

11,645

 

 

 

7,110

 

 

 

57,366

 

 

 

37,359

 

Income tax expense

 

 

23,510

 

 

 

24,212

 

 

 

121,694

 

 

 

100,098

 

Depreciation and amortization

 

 

33,385

 

 

 

19,997

 

 

 

116,957

 

 

 

76,620

 

EBITDA

 

$

179,279

 

 

$

131,729

 

 

$

758,430

 

 

$

602,941

 

 

 

 

 

 

 

 

 

 

Net Debt to EBITDA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2024

 

December 31, 2023

Long-term debt, including current maturities

 

 

 

 

 

$

971,281

 

 

$

643,622

 

Less: Cash and cash equivalents

 

 

 

 

 

 

77,476

 

 

 

111,936

 

Net Debt

 

 

 

 

 

$

893,805

 

 

$

531,686

 

 

 

 

 

 

 

 

 

 

Net Debt to EBITDA

 

 

 

 

 

 

1.2

 

 

 

0.9

 

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20250131960351/en/

FOR INVESTOR INFORMATION CONTACT: Timothy K. Fitzgerald Investor Relations Phone: 804.788.5555 Email: investorrelations@newmarket.com