false000128263700012826372023-07-262023-07-26

 UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
  
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): July 26, 2023
  
NEWMARKET CORPORATION
(Exact name of registrant as specified in its charter)
 
Virginia1-3219020-0812170
(State or other jurisdiction of
incorporation or organization)		(Commission File Number)(IRS Employer
Identification No.)
330 South Fourth Street 
Richmond,Virginia 23219
(Address of principal executive offices)(Zip Code)
Registrant’s telephone number, including area code: (804) 788-5000  
Not applicable
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
☐Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, with no par valueNEUNew York Stock Exchange
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (Section 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (Section 240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐


Item 2.02.    Results of Operations and Financial Condition
On July 26, 2023, NewMarket Corporation (the “Company”) issued a press release regarding its earnings for the second quarter ended June 30, 2023. A copy of this press release is furnished as Exhibit 99.1 hereto and incorporated herein by reference.
In accordance with General Instruction B.2 of Form 8-K, the information in Item 2.02 of this Current Report on Form 8-K, including Exhibit 99.1, shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such a filing.

Item 9.01.     Financial Statements and Exhibits
 
(d) Exhibits.
Press release regarding earnings issued by the Company on July 26, 2023.
Exhibit 104Cover Page Interactive Data File (embedded within the Inline XBRL document)



SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date: July 26, 2023
 
NEWMARKET CORPORATION
By:/s/ William J. Skrobacz
William J. Skrobacz
Vice President and Chief Financial Officer


EXHIBIT 99.1

NewMarket Corporation Reports Second Quarter and First Half 2023 Results

•Second Quarter Net Income of $99.6 Million and Earnings Per Share of $10.36
•First Half Petroleum Additives Operating Profit of $264.2 Million
•7% Increase in Dividend Declared During the Second Quarter
Richmond, VA, July 26, 2023 – NewMarket Corporation (NYSE:NEU) Chairman and Chief Executive Officer, Thomas E. Gottwald, released the following earnings report of the Company’s operations for the second quarter and first half of 2023.

Net income for the second quarter of 2023 was $99.6 million compared to net income of $66.5 million for the second quarter of 2022. Second quarter 2023 earnings per share increased to $10.36, up from $6.54 per share in the same period last year. For the first half of 2023, net income was $197.2 million, or $20.45 per share, compared to net income of $125.8 million, or $12.28 per share, for the first half of 2022.

Petroleum additives sales for the second quarter of 2023 were $684.0 million, compared to $721.0 million for the same period in 2022. The decrease was primarily due to lower shipments, partially offset by increased selling prices. Petroleum additives operating profit for the second quarter of 2023 was $132.1 million, compared to $91.2 million for the second quarter of 2022. The increase in operating profit was mainly due to increased selling prices, partially offset by lower shipments and higher operating costs. Shipments were down 16.7% between quarterly periods, with decreases in both lubricant additives and fuel additives shipments. All regions contributed to the decrease in lubricant additives shipments, while North America was the primary contributor to the decrease in fuel additives shipments.

Petroleum additives sales for the first half of both 2023 and 2022 were $1.4 billion. Petroleum additives operating profit for the first half of 2023 was $264.2 million, compared to $178.1 million for the first half of 2022. The increase in operating profit was a result of increased selling prices, partially offset by lower shipments and higher operating and raw material costs. Shipments decreased 16.1% when comparing the first half of 2023 to the same period in 2022, with decreases in both lubricant additives and fuel additives shipments in all regions. Shipments have been lower than our expectations over the last few quarters, as we continue to see the effects of customer destocking and global economic weakness.
The petroleum additives operating margin for the rolling four quarters ended June 30, 2023 was 16.8%, which is back within our historical range and reflects the benefits of our focus on cost control and margin recovery. However, we are still challenged by higher operating costs due to the ongoing inflationary environment. Cost control and margin management remain high priorities for us.

We generated solid cash flows in the first half of 2023 and continue to operate with low leverage. Our working capital improved by $52.5 million, we paid dividends of $41.9 million, which included a 7% increase to our quarterly dividend rate, and we repurchased 119,075 shares of our common stock for $42.9 million (of which $14.4 million was spent in the second quarter of 2023). Our Net Debt to EBITDA ratio decreased to 1.4 as of June 30, 2023, a significant improvement over the December 31, 2022 ratio of 2.0.

We continue to make decisions to promote long-term value for our shareholders and customers, and we remain focused on our long-term objectives. 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 our stakeholders.





Sincerely,
Thomas E. Gottwald

The petroleum additives segment consists of the North America (the United States and Canada), Latin America (Mexico, Central America, and South America), Asia Pacific, and Europe/Middle East/Africa/India (Europe or EMEAI) regions.

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 United States generally accepted accounting principles (GAAP), these additional measures enhance understanding of the Company’s performance and period to period comparability. The Company believes that these items should not be considered an alternative to our results determined under GAAP.

As a reminder, a conference call and Internet webcast is scheduled for 3:00 p.m. EDT on Thursday, July 27, 2023, to review second quarter 2023 financial results. You can access the conference call live by dialing 1-888-506-0062 (domestic) or 1-973-528-0011 (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 August 3, 2023, at 3:00 p.m. EDT by dialing 1-877-481-4010 (domestic) or 1-919-882-2331 (international). The replay passcode number is 48659. The call will also be broadcast via the Internet and can be accessed through the Company’s website at www.NewMarket.com or www.webcaster4.com/Webcast/Page/2001/48659. 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 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 the United States; political, economic, and regulatory factors concerning our products; the impact of substantial indebtedness on our operational and financial flexibility; the impact of fluctuations in foreign exchange rates; resolution of environmental liabilities or legal proceedings; limitation of our insurance coverage; our inability to realize expected benefits from investment in our infrastructure or from future acquisitions, or our inability to successfully integrate future acquisitions into our business; the underperformance of our pension assets resulting in additional cash contributions to our pension plans; 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 Annual Report on Form 10-K for the year ended December 31, 2022, 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.


FOR INVESTOR INFORMATION CONTACT:
William J. Skrobacz
Investor Relations
Phone: 804.788.5555
Fax: 804.788.5688
Email: investorrelations@newmarket.com


NEWMARKET CORPORATION AND SUBSIDIARIES
SEGMENT RESULTS AND OTHER FINANCIAL INFORMATION
(In thousands, except per-share amounts, unaudited)
Second Quarter Ended June 30,Six Months Ended June 30,
2023202220232022
Net Sales:
Petroleum additives$683,969 $721,021 $1,383,960 $1,381,325 
All other 1,161 2,618 3,959 4,866 
Total$685,130 $723,639 $1,387,919 $1,386,191 
Segment operating profit:
Petroleum additives$132,138 $91,185 $264,206 $178,107 
All other (1,022)(262)(1,997)(164)
Segment operating profit131,116 90,923 262,209 177,943 
Corporate unallocated expense(6,810)(7,332)(13,301)(11,222)
Interest and financing expenses(10,255)(7,084)(21,028)(16,490)
Loss on early extinguishment of debt0 0 0 (7,545)
Other income (expense), net10,659 9,101 21,978 16,429 
Income before income tax expense$124,710 $85,608 $249,858 $159,115 
Net income$99,624 $66,472 $197,207 $125,790 
Earnings per share - basic and diluted$10.36 $6.54 $20.45 $12.28 








NEWMARKET CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per-share amounts, unaudited)
Second Quarter Ended June 30,Six Months Ended June 30,
2023202220232022
Net sales$685,130 $723,639 $1,387,919 $1,386,191 
Cost of goods sold489,492 566,163 994,237 1,073,552 
Gross profit195,638 157,476 393,682 312,639 
Selling, general, and administrative expenses37,438 38,489 77,285 74,111 
Research, development, and testing expenses33,958 35,396 67,114 71,647 
Operating profit124,242 83,591 249,283 166,881 
Interest and financing expenses, net10,255 7,084 21,028 16,490 
Loss on early extinguishment of debt0 0 0 7,545 
Other income (expense), net10,723 9,101 21,603 16,269 
Income before income tax expense124,710 85,608 249,858 159,115 
Income tax expense25,086 19,136 52,651 33,325 
Net income$99,624 $66,472 $197,207 $125,790 
Earnings per share - basic and diluted$10.36 $6.54 $20.45 $12.28 
Cash dividends declared per share$2.25 $2.10 $4.35 $4.20 





NEWMARKET CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except share amounts, unaudited)
June 30,
2023		December 31,
2022
ASSETS
Current assets:
Cash and cash equivalents$130,923 $68,712 
Trade and other accounts receivable, less allowance for credit losses
436,250 453,692 
Inventories537,380 631,383 
Prepaid expenses and other current assets35,550 38,338 
Total current assets1,140,103 1,192,125 
Property, plant, and equipment, net655,864 659,998 
Intangibles (net of amortization) and goodwill125,424 126,069 
Prepaid pension cost318,765 302,584 
Operating lease right-of-use assets, net62,381 62,417 
Deferred charges and other assets63,607 63,625 
Total assets$2,366,144 $2,406,818 
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable$222,969 $273,289 
Accrued expenses72,923 89,508 
Dividends payable18,898 17,850 
Income taxes payable8,522 16,109 
  Operating lease liabilities 14,525 15,569 
Other current liabilities11,201 11,562 
Total current liabilities349,038 423,887 
Long-term debt916,179 1,003,737 
Operating lease liabilities - noncurrent47,715 46,968 
Other noncurrent liabilities160,472 169,819 
Total liabilities1,473,404 1,644,411 
Shareholders' equity:
Common stock and paid-in capital (with no par value; issued and outstanding shares - 9,589,239 at June 30, 2023 and 9,702,147 at December 31, 2022)
0 0 
Accumulated other comprehensive loss(54,757)(71,995)
Retained earnings947,497 834,402 
Total shareholders' equity892,740 762,407 
Total liabilities and shareholders' equity$2,366,144 $2,406,818 



NEWMARKET CORPORATION AND SUBSIDIARIES
SELECTED CONSOLIDATED CASH FLOW DATA
(In thousands, unaudited)
Six Months Ended June 30,
20232022
Net income$197,207 $125,790 
Depreciation and amortization40,558 41,670 
Loss on early extinguishment of debt0 7,545 
Loss on marketable securities0 2,977 
Cash pension and postretirement contributions(5,020)(4,863)
Working capital changes52,494 (114,665)
Deferred income tax benefit(11,301)(21,036)
Purchases of marketable securities0 (787)
Proceeds from sales and maturities of marketable securities0 372,846 
Capital expenditures(26,006)(27,807)
Redemption of 4.10% senior notes0 (350,000)
Cash costs of 4.10% senior notes redemption0 (7,099)
Net (repayments) borrowings under revolving credit facility(88,000)121,000 
Repurchases of common stock(42,864)(90,782)
Dividends paid(41,879)(42,860)
All other(12,978)(15,742)
Increase (decrease) in cash and cash equivalents$62,211 $(3,813)


NEWMARKET CORPORATION AND SUBSIDIARIES
NON-GAAP FINANCIAL INFORMATION
(In thousands, unaudited)
Earnings Before Interest, Depreciation, and Amortization (EBITDA)
Second Quarter Ended June 30,Six Months Ended June 30,
2023202220232022
Net Income$99,624 $66,472 $197,207 $125,790 
Add:
Interest and financing expenses, net10,255 7,084 21,028 16,490 
Income tax expense25,086 19,136 52,651 33,325 
Depreciation and amortization19,897 20,251 39,863 40,855 
EBITDA$154,862 $112,943 $310,749 $216,460 
Net Debt to EBITDA
June 30,December 31,
20232022
Long-term debt, including current maturities$916,179 $1,003,737 
Less: Cash and cash equivalents130,923 68,712 
Net Debt$785,256 $935,025 
Rolling Four Quarters Ended
June 30,December 31,
20232022
Net Income$350,955 $279,538 
Add:
Interest and financing expenses, net39,74035,202
Income tax expense87,52268,196
Depreciation and amortization79,78380,775
EBITDA-Rolling Four Quarters$558,000 $463,711 
Net Debt to EBITDA1.42.0



v3.23.2
Document and Entity Information
Jul. 26, 2023
Cover [Abstract]  
Document Type 8-K
Amendment Flag false
Document Period End Date Jul. 26, 2023
Entity Registrant Name NEWMARKET CORPORATION
Entity Central Index Key 0001282637
Entity Incorporation, State or Country Code VA
Entity File Number 1-32190
Entity Tax Identification Number 20-0812170
Entity Address, Address Line One 330 South Fourth Street
Entity Address, City or Town Richmond,
Entity Address, State or Province VA
Entity Address, Postal Zip Code 23219
City Area Code 804
Local Phone Number 788-5000
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Title of 12(b) Security Common Stock, with no par value
Trading Symbol NEU
Security Exchange Name NYSE
Entity Emerging Growth Company false
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