Q1 2025 NewMarket Corp Earnings Call

Greetings and welcome to today's Newmarket Corporation schedule, a conference call and webcast to review first quarter 2025 financial results.

Operator: Greetings and welcome to today's NewMarket Corporation scheduled conference call and webcast to review first quarter 2025 financial results. At this time, all participants are on a listen-only mode. If anyone should require operator assistance during the conference today, please press star zero on your telephone keyboard. Please note, this conference is being recorded.

At this time, all participants are on a listen only mode.

If anyone should require operator assistance during the conference today. Please press star zero on your telephone keypad.

Please note this conference is being recorded.

Speaker Change: I will now turn the conference over to your host Mr. Tim Fitzgerald, Sir the floor is yours.

Tim Fitzgerald: I will now turn the conference over to your host, Mr. Tim Fitzgerald. Sir, the floor is yours. Thank you, Ali, and thanks, everyone, for joining me this afternoon.

Tim Fitzgerald: Thank you Ali and thanks, everyone for joining me this afternoon.

Tim Fitzgerald: 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 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 report. The earnings release, which can be found on our website, includes a reconciliation of the non-GAAP financial measures to the comparable GAAP financial.

Tim Fitzgerald: 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 in our SEC filings, including our most recent Form 10-K.

Tim Fitzgerald: During this call. We will also discuss the non-GAAP financial measures included in our earnings release, 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 filed our 10-Q for the first quarter of 2025 yesterday, and it contains 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 press Net income for the first quarter of 2025 was $126 million or $13.26 per share, compared to net income of $108 million or $11.23 per share for the first quarter of 2024. Petroleum additive sales for the first quarter of 2025 were $646 million, compared to $677 million for the same period in 2024. Petroleum added his operating profit for the first quarter of 2025 was $142 million compared to a record first quarter operating profit of $151 million in 2024.

Tim Fitzgerald: We filed our 10-Q for the first quarter of 2025 yesterday and it contains 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 press release.

Tim Fitzgerald: Net income for the first quarter of 2025 was $126 million or.

Tim Fitzgerald: Or $13.26 per share compared to net income of $108 million or $11 23 per share for the first quarter of 2024.

Tim Fitzgerald: Petroleum additives sales for the first quarter of 2025 were $646 million compared to $677 million for the same period in 2024.

Tim Fitzgerald: Petroleum additives operating profit for the first quarter of 2025 was $142 million.

Tim Fitzgerald: Compared to our record first quarter operating profit of $151 million in 2024.

Tim Fitzgerald: The decrease in operating profit was mainly due to lower shipments in the quarter lubricant additive shipments decreased in Asia Pacific and North America, While Europe, and Latin America reported slight increases.

Tim Fitzgerald: The decrease in operating profit was mainly due to lower shipments in the quarter. Lubricant additive shipments decreased in Asia Pacific and North America, while Europe and Latin America reported slight increase. Fuel additive shipments were lower in all regions except Asia-Pacific, which reported a small increase. Despite the lower shipments, we continue to focus on operational efficiency, which has allowed us to maintain strong operating profit. We are very pleased with the performance of our petroleum additives business during the first quarter of 2025, and the work done by our team to achieve these results.

Tim Fitzgerald: Fuel additive shipments were lower in all regions, except Asia Pacific, which reported a small increase.

Tim Fitzgerald: Despite the lower shipments we continue to focus on operational efficiency, which has allowed us to maintain strong operating profit levels.

Tim Fitzgerald: We are very pleased with the performance of our petroleum additives business during the first quarter of 2025 and the work done by our team to achieve these results. However, we remain challenged by the ongoing macroeconomic environment and are monitoring the uncertainty around international trade relations and tariffs we remain committed to.

Tim Fitzgerald: However, we remain challenged by the ongoing macroeconomic environment, and are monitoring the uncertainty around international trade relations and tariffs. we remain committed to improving efficiency and managing operating Our focus continues to be on investing in technology and our supply network to meet customer demands, enhancing our operational efficiency, and improving our portfolio profitability.

Tim Fitzgerald: Improving efficiency and managing operating costs.

Tim Fitzgerald: Our focus continues to be on investing in technology, and our supply network to meet customer demand enhancing our operational efficiency and improving our portfolio of profitability.

Tim Fitzgerald: We report the financial results of our impact business in our specialty materials segment special.

Tim Fitzgerald: We report the financial results of our impact business and our specialty materials sector. Specialty materials sales were $54 million for the first quarter of 2025 compared to $17 million for the first quarter of 2024. Specialty Materials operating profit was $23 million for the first quarter of 2025 compared to an operating loss of $5 million for the first quarter of 2024.

Tim Fitzgerald: Specialty materials sales were $54 million for the first quarter of 2025 compared to $17 million for the first quarter of 2024.

Tim Fitzgerald: Specialty materials operating profit was $23 million for the first quarter of 2025 compared to an operating loss of $5 million for the first quarter of 2024.

Tim Fitzgerald: Specialty materials sales and operating profits for the first quarter of 2024 reflect financial results since the acquisition of Ampact on January 16th, 2024. As previously stated, we will see substantial variation in quarterly results for the Specialty of Materials segment on an ongoing basis due to the nature of its business.

Tim Fitzgerald: Specialty materials sales and operating profit for the first quarter of 2024 reflect financial results since the acquisition of the impact on January 16th 2024.

Tim Fitzgerald: As previously stated we will see substantial variations in quarterly results for the specialty materials segment on an ongoing basis due to the nature of its business.

Tim Fitzgerald: As discussed in impacts April 21, 2025 press release and as approved earlier today by the new market Board of directors, we plan to make a capital investment of up to a $100 million that our impact facility in Cedar City, Utah.

Tim Fitzgerald: As discussed in AMPAC's April 21, 2025 press release, and as approved earlier today by the NewMarket Board of Directors, we plan to make a capital investment of up to $100 million at our AMPAC facility in Cedar City, Utah. This investment will allow Ampact to construct an additional production line, increasing capacity by more than 50%. With a projected completion date in 2026, the increased production capacity will allow Ampact to meet the growing demand of solid rocket motors for U.S. military and space launch programs, while also addressing the needs of U.S. allies in these critical areas. We view Ampac as a strategic national asset with a mission-critical role in global safety, security, and space programs. This investment assures capacity to meet our customers' growing needs while adding additional redundancy and security of supply in our production.

Tim Fitzgerald: This investment will allow impact to construct an additional production line increasing capacity by more than 50%.

Tim Fitzgerald: With the projected completion date in 2026, the increased production capacity will allow impact to meet the growing demand of solid rocket motors for U S military and space launch programs, while also addressing the needs of U S allies in these critical areas.

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Tim Fitzgerald: This investment assures capacity to meet our customers' growing needs, while adding additional redundancy and security of supply in our production system.

Tim Fitzgerald: Our company generated solid cash flows throughout the quarter, which allowed us to return $83 million to our shareholders through share repurchases of $57 million and dividends of $26 million.

Tim Fitzgerald: Our company generated solid cash flows throughout the quarter, which allowed us to return $83 million to our shareholders through share repurchases of $57 million and dividends of $26 million. As of March 31st, 2025, our net debt to EBITDA ratio was 1.1, which is a significant improvement over the 1.9 times we reported at the end of Q1, 2024.

Tim Fitzgerald: As of March 31, 2025, our net debt to EBITDA ratio was one one which is a significant improvement over the one nine times, we reported at the end of Q1 2024.

Tim Fitzgerald: As we look ahead to 2025, 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: As we look ahead to 2025, we are committed to making decisions that promote long-term value for our shareholders and customers while staying focused on our long-term objectives. 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: We believe that the core principles guiding our business a long term perspective, our safety first culture customer focused solutions technology, driven products and a world class supply chain will continue to benefit all our stakeholders.

Tim Fitzgerald: Holly, that concludes our planned comments. We are available for questions via email or by phone. So please feel free to contact me directly.

Tim Fitzgerald: Ali 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.

Tim Fitzgerald: Thank you all again, and we will talk to you next quarter. Thank you.

Tim Fitzgerald: Thank you ladies and gentlemen, this does conclude today's call you may disconnect. Your lines at this time and have a wonderful day, we thank you for your participation.

Operator: Ladies and gentlemen, this does conclude today's call. You may disconnect your lines at this time and have a wonderful day and we thank you for your participation.