NewMarket Corporation Reports Fourth Quarter and Full Year 2023 Results
-
Full Year
Net Income of$389 Million and Earnings Per Share of$40.44 -
$134 Million Working Capital Improvement in 2023 -
$361 Million Repaid on Revolving Credit Facility in 2023 -
Acquired
American Pacific Corporation (AMPAC) inJanuary 2024
Net income for the fourth quarter of 2023 was
Petroleum additives sales for the fourth quarter of 2023 were
Sales for the petroleum additives segment for 2023 were
During 2023, our shipments were impacted by the overall global economic weakness and inventory rationalization which persists in the chemical industry. We remain challenged by the ongoing inflationary environment and continue to experience increased operating costs. We are maintaining our focus on managing our operating costs, our inventory levels, and our portfolio profitability, while continuing our investment in technology.
We are very pleased with the performance of our petroleum additives business during 2023 and the work done by our team to achieve four quarters of strong operating profit. We generated solid cash flows throughout the year, our working capital improved by
On
On
As we look ahead to 2024 and beyond, we anticipate continued strength in our petroleum additives segment. We also look forward to the integration of
Sincerely,
The petroleum additives segment consists of the
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 and marketable securities. 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
As a reminder, a conference call and Internet webcast is scheduled for
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 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
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
|
|
Twelve Months Ended
|
||||||||||||
|
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
|
|
|
|
|
|
|
||||||||
Petroleum additives |
|
$ |
642,030 |
|
|
$ |
680,292 |
|
|
$ |
2,689,709 |
|
|
$ |
2,754,310 |
|
All other |
|
|
1,320 |
|
|
|
2,267 |
|
|
|
8,710 |
|
|
|
10,489 |
|
Total |
|
$ |
643,350 |
|
|
$ |
682,559 |
|
|
$ |
2,698,419 |
|
|
$ |
2,764,799 |
|
Segment operating profit: |
|
|
|
|
|
|
|
|
||||||||
Petroleum additives |
|
$ |
110,402 |
|
|
$ |
117,114 |
|
|
$ |
514,428 |
|
|
$ |
378,244 |
|
All other |
|
|
(2,225 |
) |
|
|
(1,577 |
) |
|
|
(4,986 |
) |
|
|
(1,782 |
) |
Segment operating profit |
|
|
108,177 |
|
|
|
115,537 |
|
|
|
509,442 |
|
|
|
376,462 |
|
Corporate unallocated expense |
|
|
(6,457 |
) |
|
|
(6,190 |
) |
|
|
(26,147 |
) |
|
|
(21,579 |
) |
Interest and financing expenses |
|
|
(7,110 |
) |
|
|
(10,343 |
) |
|
|
(37,359 |
) |
|
|
(35,202 |
) |
Loss on early extinguishment of debt |
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
(7,545 |
) |
Other income (expense), net |
|
|
10,012 |
|
|
|
9,286 |
|
|
|
43,026 |
|
|
|
35,598 |
|
Income before income tax expense |
|
$ |
104,622 |
|
|
$ |
108,290 |
|
|
$ |
488,962 |
|
|
$ |
347,734 |
|
Net income |
|
$ |
80,410 |
|
|
$ |
90,522 |
|
|
$ |
388,864 |
|
|
$ |
279,538 |
|
Earnings per share - basic and diluted |
|
$ |
8.38 |
|
|
$ |
9.26 |
|
|
$ |
40.44 |
|
|
$ |
27.77 |
|
NEWMARKET CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (In thousands, except per-share amounts, unaudited) |
||||||||||||
|
|
Fourth Quarter Ended
|
|
Twelve Months Ended
|
||||||||
|
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
Net sales |
|
$ |
643,350 |
|
$ |
682,559 |
|
$ |
2,698,419 |
|
$ |
2,764,799 |
Cost of goods sold |
|
|
466,224 |
|
|
503,008 |
|
|
1,925,906 |
|
|
2,124,302 |
Gross profit |
|
|
177,126 |
|
|
179,551 |
|
|
772,513 |
|
|
640,497 |
Selling, general, and administrative expenses |
|
|
36,799 |
|
|
35,803 |
|
|
151,470 |
|
|
145,106 |
Research, development, and testing expenses |
|
|
38,990 |
|
|
34,217 |
|
|
137,998 |
|
|
140,252 |
Operating profit |
|
|
101,337 |
|
|
109,531 |
|
|
483,045 |
|
|
355,139 |
Interest and financing expenses, net |
|
|
7,110 |
|
|
10,343 |
|
|
37,359 |
|
|
35,202 |
Loss on early extinguishment of debt |
|
|
0 |
|
|
0 |
|
|
0 |
|
|
7,545 |
Other income (expense), net |
|
|
10,395 |
|
|
9,102 |
|
|
43,276 |
|
|
35,342 |
Income before income tax expense |
|
|
104,622 |
|
|
108,290 |
|
|
488,962 |
|
|
347,734 |
Income tax expense |
|
|
24,212 |
|
|
17,768 |
|
|
100,098 |
|
|
68,196 |
Net income |
|
$ |
80,410 |
|
$ |
90,522 |
|
$ |
388,864 |
|
$ |
279,538 |
Earnings per share - basic and diluted |
|
$ |
8.38 |
|
$ |
9.26 |
|
$ |
40.44 |
|
$ |
27.77 |
Cash dividends declared per share |
|
$ |
2.25 |
|
$ |
2.10 |
|
$ |
8.85 |
|
$ |
8.40 |
NEWMARKET CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In thousands, except share amounts, unaudited) |
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|
|
|
|
|
||||
ASSETS |
|
|
|
|
||||
Current assets: |
|
|
|
|
||||
Cash and cash equivalents |
|
$ |
111,936 |
|
|
$ |
68,712 |
|
Trade and other accounts receivable, less allowance for credit losses |
|
|
432,349 |
|
|
|
453,692 |
|
Inventories |
|
|
456,234 |
|
|
|
631,383 |
|
Prepaid expenses and other current assets |
|
|
39,051 |
|
|
|
38,338 |
|
Total current assets |
|
|
1,039,570 |
|
|
|
1,192,125 |
|
Property, plant, and equipment, net |
|
|
654,747 |
|
|
|
659,998 |
|
Intangibles (net of amortization) and goodwill |
|
|
124,642 |
|
|
|
126,069 |
|
Prepaid pension cost |
|
|
370,882 |
|
|
|
302,584 |
|
Operating lease right-of-use assets, net |
|
|
70,823 |
|
|
|
62,417 |
|
Deferred charges and other assets |
|
|
48,207 |
|
|
|
63,625 |
|
Total assets |
|
$ |
2,308,871 |
|
|
$ |
2,406,818 |
|
LIABILITIES AND SHAREHOLDERS' EQUITY |
|
|
|
|
||||
Current liabilities: |
|
|
|
|
||||
Accounts payable |
|
$ |
231,137 |
|
|
$ |
273,289 |
|
Accrued expenses |
|
|
76,546 |
|
|
|
89,508 |
|
Dividends payable |
|
|
19,212 |
|
|
|
17,850 |
|
Income taxes payable |
|
|
6,131 |
|
|
|
16,109 |
|
Operating lease liabilities |
|
|
15,074 |
|
|
|
15,569 |
|
Other current liabilities |
|
|
16,064 |
|
|
|
11,562 |
|
Total current liabilities |
|
|
364,164 |
|
|
|
423,887 |
|
Long-term debt |
|
|
643,622 |
|
|
|
1,003,737 |
|
Operating lease liabilities - noncurrent |
|
|
55,058 |
|
|
|
46,968 |
|
Other noncurrent liabilities |
|
|
168,966 |
|
|
|
169,819 |
|
Total liabilities |
|
|
1,231,810 |
|
|
|
1,644,411 |
|
Shareholders' equity: |
|
|
|
|
||||
Common stock and paid-in capital (with no par value; issued and outstanding shares - 9,590,086 at |
|
|
2,130 |
|
|
|
0 |
|
Accumulated other comprehensive loss |
|
|
(21,071 |
) |
|
|
(71,995 |
) |
Retained earnings |
|
|
1,096,002 |
|
|
|
834,402 |
|
Total shareholders' equity |
|
|
1,077,061 |
|
|
|
762,407 |
|
Total liabilities and shareholders' equity |
|
$ |
2,308,871 |
|
|
$ |
2,406,818 |
|
NEWMARKET CORPORATION AND SUBSIDIARIES SELECTED CONSOLIDATED CASH FLOW DATA (In thousands, unaudited) |
||||||||
|
|
Twelve Months Ended
|
||||||
|
|
|
2023 |
|
|
|
2022 |
|
Net income |
|
$ |
388,864 |
|
|
$ |
279,538 |
|
Depreciation and amortization |
|
|
78,010 |
|
|
|
82,285 |
|
Cash pension and postretirement contributions |
|
|
(10,219 |
) |
|
|
(9,748 |
) |
Working capital changes |
|
|
134,280 |
|
|
|
(204,636 |
) |
Deferred income tax benefit |
|
|
(14,750 |
) |
|
|
(42,645 |
) |
Capital expenditures |
|
|
(48,293 |
) |
|
|
(56,169 |
) |
Net (repayments) borrowings under revolving credit facility |
|
|
(361,000 |
) |
|
|
213,000 |
|
Repurchases of common stock |
|
|
(42,864 |
) |
|
|
(207,470 |
) |
Dividends paid |
|
|
(85,034 |
) |
|
|
(84,263 |
) |
Proceeds from sales and maturities of marketable securities |
|
|
0 |
|
|
|
372,846 |
|
Redemption of 4.10% senior notes |
|
|
0 |
|
|
|
(350,000 |
) |
Loss on early extinguishment of debt |
|
|
0 |
|
|
|
7,545 |
|
Cash costs of 4.10% senior notes redemption |
|
|
0 |
|
|
|
(7,099 |
) |
Loss on marketable securities |
|
|
0 |
|
|
|
2,977 |
|
Purchases of marketable securities |
|
|
0 |
|
|
|
(787 |
) |
All other |
|
|
4,230 |
|
|
|
(9,966 |
) |
Increase (decrease) in cash and cash equivalents |
|
$ |
43,224 |
|
|
$ |
(14,592 |
) |
NEWMARKET CORPORATION AND SUBSIDIARIES NON-GAAP FINANCIAL INFORMATION (In thousands, unaudited) |
||||||||||||
|
|
|
|
|
|
|
|
|
||||
Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) |
||||||||||||
|
|
|
|
|
|
|
||||||
|
|
Fourth Quarter Ended
|
|
Twelve Months Ended
|
||||||||
|
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
Net Income |
|
$ |
80,410 |
|
$ |
90,522 |
|
$ |
388,864 |
|
$ |
279,538 |
Add: |
|
|
|
|
|
|
|
|
||||
Interest and financing expenses, net |
|
|
7,110 |
|
|
10,343 |
|
|
37,359 |
|
|
35,202 |
Income tax expense |
|
|
24,212 |
|
|
17,768 |
|
|
100,098 |
|
|
68,196 |
Depreciation and amortization |
|
|
19,997 |
|
|
19,777 |
|
|
76,620 |
|
|
80,775 |
EBITDA |
|
$ |
131,729 |
|
$ |
138,410 |
|
$ |
602,941 |
|
$ |
463,711 |
|
|
|
|
|
|
|
|
|
||||
Net Debt to EBITDA |
||||||||||||
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
2023 |
|
|
2022 |
||
Long-term debt, including current maturities |
|
|
|
|
|
$ |
643,622 |
|
$ |
1,003,737 |
||
Less: Cash and cash equivalents |
|
|
|
|
|
|
111,936 |
|
|
68,712 |
||
Net Debt |
|
|
|
|
|
$ |
531,686 |
|
$ |
935,025 |
||
|
|
|
|
|
|
|
|
|
||||
Net Debt to EBITDA |
|
|
|
|
|
|
0.9 |
|
|
2.0 |
View source version on businesswire.com: https://www.businesswire.com/news/home/20240130765599/en/
FOR INVESTOR INFORMATION CONTACT:
Investor Relations
Phone: 804.788.5555
Fax: 804.788.5688
Email: investorrelations@newmarket.com
Source: