Q4 2024 NewMarket Corp Earnings Call
Speaker Change: Good day everyone, and welcome to the New Market Corporation Schedules conference call and webcast to review the fourth quarter 2024 financial results.
Speaker Change: At this time, all participants have been placed on a listen-only mode. It is now my pleasure to turn the floor over to your host, Tim Fitzgerald. Sir, the floor is yours.
Tim Fitzgerald: Thank you, Matthew, and thanks to everyone for joining me this afternoon.
Tim Fitzgerald: As a reminder, some of the statements made during this conference call may be forward-looking.
Tim Fitzgerald: Relevant factors that could cause actual results to differ materially from those forward-looking statements are contained in our earnings release and in our SEC filings, including our most recent Form 10-K. During this call, we will also discuss the non-GAAP financial measures included in our earnings release.
Tim Fitzgerald: The earnings release, which can be found on our website, includes a reconciliation of the non-GAAP financial measures to the comparable GAAP financial measures.
Tim Fitzgerald: We intend to file our 2024 10-K in the middle of February. It will contain significantly more details on the operations and performance of our company. Today I will be referring to the data that was included in last night's release.
Tim Fitzgerald: Net income for the fourth quarter of 2024 was $111 million, or $11.56 per share, compared to net income of $80 million, or $8.38 per share, for the fourth quarter of 2023.
Tim Fitzgerald: Net income for the full year 2024 was $462 million, or $48.22 per share, compared to net income of $389 million, or $40.44 per share, for 2023.
Tim Fitzgerald: Petroleum additive sales for the fourth quarter of 2024 were 626 million dollars compared to 642 million dollars for the same period in 2023.
Tim Fitzgerald: Petroleum Additive's operating profit for the fourth quarter of 2024 was $136 million compared to $110 million for the fourth quarter of 2023. The increase in operating profit was mainly due to lower operating costs.
Tim Fitzgerald: We continue to focus on operational efficiency while still making investments in technology to support our customers.
Tim Fitzgerald: These gains were partially offset by a decrease in shipments as customers managed year-end inventory levels.
Tim Fitzgerald: For the full year 2024, sales for the petroleum additives segment were $2.6 billion compared to $2.7 billion in 2023. Petroleum additives operating profit for 2024 was $592 million compared to $514 million for 2023.
Tim Fitzgerald: The increase in operating profit was a result of lower operating costs driven by our efficiency efforts, as well as lower raw material costs offset by lower selling prices.
Tim Fitzgerald: Shipments were flat when comparing 2024 to 2023 with a small increase in lubricant additives offset by a decline in fuel additives.
Tim Fitzgerald: We are very pleased with the performance of our petroleum additives business during 2024 and the work done by our team to achieve four quarters of strong operating profit.
Tim Fitzgerald: However, we remain challenged by the ongoing inflationary environment, despite our efforts to improve efficiency and manage our operating costs.
Tim Fitzgerald: We continue to focus on investing in technology to meet customer needs, optimizing our inventory levels, and improving our portfolio profitability.
Tim Fitzgerald: On January 16, 2024, we completed the acquisition of American Pacific Corporation. Ampac is the leading North American manufacturer of critical performance additives used in solid rocket motors for space launch and military defense applications.
We report the financial results of our
Tim Fitzgerald: Specialty materials sales were $27 million for the fourth quarter of 2024 and $141 million for the full year, surpassing our pre-acquisition expectations.
Tim Fitzgerald: Specialty Materials operating profit was one and a half million dollars for the fourth quarter of 2024 and 17 and a half million dollars for the full year.
Tim Fitzgerald: The specialty materials full-year results include the sale of Ampact finished goods inventory that we acquired at closing and it was recorded at fair value and sold during the year at no margin.
Tim Fitzgerald: We generated solid cash flows throughout the year and made payments of $373 million on our revolving credit facility since the AmPAC acquisition.
Tim Fitzgerald: We returned $128 million to our shareholders through dividends of $96 million and share repurchases of $32 million.
Tim Fitzgerald: As of December 31st, 2024, our net debt to EBITDA ratio was 1.2.
Tim Fitzgerald: which was a significant improvement over the 1.9 times we reported at the end of Q1.
Tim Fitzgerald: As we look ahead to 2025 and beyond, we anticipate continued strength in our petroleum additives and specialty material segments.
Tim Fitzgerald: We are committed to making decisions that promote long-term value for our shareholders and customers, while staying focused on our long-term objectives.
Tim Fitzgerald: We believe that the core principles guiding our business – a long-term perspective, a safety-first culture, customer-focused solutions, technology-driven products, and a world-class supply chain – will continue to benefit all our stakeholders.
Tim Fitzgerald: Matthew, that concludes our planned comments. We are available for questions via email or by phone so please feel free to contact me directly. Thank you all again and we will talk to you next quarter.