Q2 2022 NewMarket Corp Earnings Call

Good afternoon, ladies and gentlemen, thank you for standing by and welcome to the New Market Corporation Conference call and webcast to review second quarter 2022 financial results. At this time all participants are in a listen only mode. I would now like to turn the call over to the host Vice President and Chief Financial Officer.

Sir Brian <unk>. Please go ahead.

Thank you Kelly and thanks to everyone for joining me. This afternoon as a reminder, some of the statements made during this conference call may be forward looking.

Relevant factors that could cause actual results to differ materially from those forward looking statements are contained in our earnings release, and our SEC filings, including our most recent Form 10-K.

During this call May also discuss non-GAAP financial measure are included in our earnings release.

The earnings release, which can be found out on our website includes a reconciliation of the non-GAAP financial measure to the comparable GAAP financial measure.

We filed our 10-Q. This morning. It contains significantly more details on the operations and performance of our company. Please take time to review it I'll be referring to the data that was included in last night's earnings release.

Net income of $66 million or $6 54, a share compared to net income of $52 million or $4.75 a share for the second quarter of last year.

Trillium additives net sales for the second quarter of 2022 were a record $721 million compared to $586 6 million for.

For the same period in 2021.

<unk> additives operating profit for the quarter was $91 $2 million.

Higher than the second quarter operating profit last year of $74 $2 million.

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 two 6% with increases in lubricant additive shipments, partially offset by decreases in fuel additive shipments.

In all regions, except Latin America contributed to the increase in lubricant additive shipments.

All regions, except North America contributed to the decrease in fuel additive shipments.

Petroleum additives operating profit margin for the second quarter of 2022 was 12, 7%.

Significantly lower than our historical average.

Margin management will continue to be a priority in 2022 as we can.

Can you see continuing upward pressure on all operating costs.

In the past cost increases are primarily been raw material related but in the recent and current inflationary environment. Many of the cost of goods sold and inputs are significantly under pressure.

We also continued to be challenged by the global supply network and transportation industry and remain committed to deliver the best service and solution to our customers.

We will continue to work diligently to return our margins to our historical levels in the mid to high teens.

During the quarter, we also funded capital expenditures of $15 million paid dividends of $21 million.

Purchased $55 million of stock.

We continue to operate with low leverage with our net debt to EBITDA ending the quarter at two three times.

This ratio is significantly.

Excuse me slightly above our normal range of one to two times, but.

But we have stated there will be periods. When we are outside the norm and our target remains unchanged.

For 2022, we expect to see the capital expenditures in the $55 million to $60 million range. This is slightly below our previous range due to operational timing of some of our projects.

We remain focused on the long term success of our company, including emphasis on <unk>.

SaaS high end customer needs.

<unk> solid operating results in pruning the greatest long term value for our shareholders customers and employees. We believe the fundamentals of how we run our business a long term view safety and people first culture customer focused solutions technology, driven product offerings and a world class supply chain capability will continue to be beneficial for all of our stakeholders.

We thank you all for joining the call today.

Kelly that concludes our planned comments, we are available for questions via E mail or by phone. So please feel free to contact us directly and thank you all for joining us and we'll talk to you next quarter.

Thank you ladies and gentlemen, this does conclude today's conference call. You may disconnect. Your phone lines at this time and have a wonderful day. Thank you for your participation.