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PRESS RELEASE from provider: Business Wire
This content is a press release from our partner Business Wire. The AP newsroom and editorial departments were not involved in its creation.

NewMarket Corporation Reports Fourth Quarter and Full Year 2018 Results

February 6, 2019

RICHMOND, Va.--(BUSINESS WIRE)--Feb 6, 2019--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 2018.

Profit before income taxes for the fourth quarter of 2018 was $71.1 million compared to $64.9 million for the fourth quarter of 2017. Net income for the fourth quarter of 2018 was $62.8 million, or $5.58 per share, compared to net income of $4.1 million, or $.35 per share, for the fourth quarter of 2017. Profit before income taxes for 2018 was $290.3 million compared to $315.4 million for 2017. Net income for 2018 was $234.7 million, or $20.34 per share, compared to net income of $190.5 million, or $16.08 per share, for 2017. Net income for all periods included effects of the tax reform act enacted on December 22, 2017, commonly known as the “Tax Cuts and Jobs Act” (the “Tax Reform Act”).

Sales for the petroleum additives segment for the fourth quarter of 2018 were $537.2 million, down 3.5% versus the same period last year. Petroleum additives operating profit for the fourth quarter of 2018 was $79.5 million, or 7.2% higher than fourth quarter operating profit last year of $74.2 million. The increase was mainly due to changes in selling prices and foreign currency rates, partially offset by higher raw material costs and lower shipments. Shipments were down 10.2% from the same period last year with decreases in both lubricant additives and fuel additives shipments. All regions except Asia Pacific contributed to the decrease in lubricant additives shipments, and Latin America was the only region reporting an increase in fuel additives shipments.

For the year, petroleum additives sales were $2.3 billion compared to sales in 2017 of $2.2 billion, or an increase of 4.3%. Petroleum additives operating profit for 2018 was $311.0 million, or 9.9% lower than last year’s $345.0 million. The decrease was due mainly to higher raw material and conversion costs, partially offset by changes in selling prices. Shipments decreased 2.8% versus 2017 with decreases in both lubricant additives and fuel additives shipments. The regional drivers for those decreases were consistent with the drivers in the fourth quarter discussed above.

Petroleum additives operating margin was 13.6% for 2018 compared to 15.8% for 2017. Throughout 2018 we continued to see downward pressure on our operating margin due mainly to the steady increase in raw material costs over the past two years. While our efforts have been focused on recovering these cost increases, we have been experiencing the lag between when price increases go into effect and when margins start to improve. Margin recovery will be our number one priority throughout 2019 so that they will again be consistent with our historical ranges.

Income tax expense was $8.3 million for the fourth quarter of 2018 compared to $60.9 million for the fourth quarter of 2017, and $55.6 million for 2018 compared to $124.9 million for 2017. The main driver for the difference between the comparative periods was additional income tax expense in the fourth quarter of 2017 of $31.4 million related to the enactment of the Tax Reform Act, primarily due to a one-time deemed repatriation tax on untaxed accumulated foreign earnings. In addition, the Tax Reform Act reduced the U.S. corporate tax rate from 35% to 21% beginning in 2018, reducing the income tax expense in both 2018 periods.

During 2018, we funded capital expenditures of $74.6 million, and returned $312.4 million to our shareholders through dividends ($80.4 million) and share repurchases (603,449 shares of our common stock for a total of $232.0 million), through a combination of borrowing under our revolving credit facility and cash from operations.

As we look forward to 2019 and beyond, we expect continued strength in our petroleum additives business and the industry as a whole. We will continue to make decisions we believe will promote the greatest long-term value for our shareholders, customers and employees, and will remain focused on our long-term objectives. This will be evidenced through our ongoing commitment to provide customers with innovative solutions to meet their business needs, investments in our supply capabilities, and technology-driven initiatives. 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 of our stakeholders.

Sincerely,

Thomas E. Gottwald

The Company has disclosed the non-GAAP financial measure EBITDA and the related calculation 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 and amortization. The Company believes that even though this item is not required by or presented in accordance with United States generally accepted accounting principles (GAAP), this additional measure enhances understanding of the Company’s performance and period to period comparability. The Company believes that this item should not be considered an alternative to net income determined under GAAP.

As a reminder, a conference call and Internet webcast is scheduled for 3:00 p.m. EST on Thursday, February 7, 2019, to review fourth quarter and year-end 2018 financial results. You can access the conference call live by dialing 1-866-682-6100 (domestic) or 1-862-298-0702 (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 February 14, 2019 at 11:59 p.m. EST by dialing 1-877-481-4010 (domestic) or 1-919-882-2331 (international). The replay ID number is 42300. The call will also be broadcast via the Internet and can be accessed through the Company’s website at www.NewMarket.com or www.investornetwork.com/event/presentation/42300. A webcast replay will be available for 30 days.

NewMarket Corporation, through its subsidiaries Afton Chemical Corporation and Ethyl Corporation, develops, manufactures, blends, and delivers chemical additives that enhance the performance of petroleum products. From custom-formulated additive packages to market-general additives, the NewMarket family of companies provides the world with the technology to make engines run smoother, machines last longer, and fuels burn cleaner.

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 manufacturing facilities, including single-sourced facilities; the ability to respond effectively to technological changes in our industry; failure to protect our intellectual property rights; failure to attract and retain a highly-qualified workforce; hazards common to chemical businesses; competition from other manufacturers; sudden or sharp raw material price increases; the gain or loss of significant customers; the occurrence or threat of extraordinary events, including natural disasters and terrorist attacks; risks related to operating outside of the United States; the impact of fluctuations in foreign exchange rates; an information technology system failure or security breach; political, economic, and regulatory factors concerning our products; current and future governmental regulations; resolution of environmental liabilities or legal proceedings; our inability to realize expected benefits from investment in our infrastructure or from recent or future acquisitions, or our inability to successfully integrate recent or future acquisitions into our business; 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 Item 1A. “Risk Factors” of our 2017 Annual Report on Form 10-K, which is available to shareholders upon request.

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 the Company. 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.

Notes to Segment Results and Other Financial Information

Certain prior year amounts have been reclassified to reflect the adoption of Accounting Standard Update No. 2017-07, “Compensation-Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost”. There was no impact to income before income tax expense.

Notes to Consolidated Statements of Income

Certain prior year amounts have been reclassified to reflect the adoption of Accounting Standard Update No. 2017-07, “Compensation-Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost”. There was no impact to net income.

View source version on businesswire.com:https://www.businesswire.com/news/home/20190206005680/en/

CONTACT: For Investor Information Contact:

Brian D. Paliotti

Investor Relations

Phone: 804.788.5555

Fax: 804.788.5688

Email: investorrelations@newmarket.com

KEYWORD: UNITED STATES NORTH AMERICA VIRGINIA

INDUSTRY KEYWORD: ENERGY OIL/GAS MANUFACTURING CHEMICALS/PLASTICS

SOURCE: NewMarket Corporation

Copyright Business Wire 2019.

PUB: 02/06/2019 05:01 PM/DISC: 02/06/2019 05:01 PM

http://www.businesswire.com/news/home/20190206005680/en