neu-20240331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2024


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 1-32190

NEWMARKET CORPORATION

(Exact name of registrant as specified in its charter)


Virginia		20-0812170
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

330 South Fourth Street		23219-4350
Richmond,	Virginia
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code - (804) 788-5000

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, with no par value	NEU	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports); and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

☐

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. ¨


			Page Number
PART I. FINANCIAL INFORMATION
ITEM 1. Financial Statements (unaudited)
Consolidated Statements of Income - Three Months Ended March 31, 2024 and March 31, 2023			4
Consolidated Statements of Comprehensive Income - Three Months Ended March 31, 2024 and March 31, 2023			5
Condensed Consolidated Balance Sheets - March 31 , 202 4 and December 31, 202 3			6
Consolidated Statements of Shareholders' Equity - Three Months Ended March 31, 2024 and March 31, 2023			7
Condensed Consolidated Statements of Cash Flows - Three Months Ended March 31, 2024 and March 31, 2023			8
Notes to Condensed Consolidated Financial Statements			9
Financial Statement Presentation			9
Acquisition of Business			9
Net Sales			11
Segment Information			11
Pension Plans and Other Postretirement Benefits			12
Earnings Per Share			13
Inventories			13
Intangibles (Net of Amortization) and Goodwill			14
Long-term Debt			14
Commitments and Contingencies			16
Other Comprehensive Income (Loss) and Accumulated Other Comprehensive Loss			16
Fair Value Measurements			17
Recent Accounting Pronouncements			17
ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			18
ITEM 3. Quantitative and Qualitative Disclosures About Market Risk			23
ITEM 4. Controls and Procedures			23
PART II. OTHER INFORMATION
ITEM 1. Legal Proceedings			25
ITEM 1 A . Risk Factors			25
ITEM 5. Other Information			25
ITEM 6. Exhibits			25
SIGNATURES			26


(in thousands, except per-share amounts)	Three Months Ended March 31,
		2024		2023
Net sales		$	696,736	$	702,789
Cost of goods sold		480,371		504,745
Gross profit		216,365		198,044
Selling, general, and administrative expenses		44,365		39,847
Research, development, and testing expenses		31,200		33,156
Operating profit		140,800		125,041
Interest and financing expenses, net		15,654		10,773

Other income (expense), net		12,547		10,880
Income before income tax expense		137,693		125,148
Income tax expense		29,961		27,565
Net income		$	107,732	$	97,583
Earnings per share - basic and diluted		$	11.23	$	10.09
Cash dividends declared per share		$	2.50	$	2.10


(in thousands)	Three Months Ended March 31,
		2024		2023
Net income		$	107,732	$	97,583
Other comprehensive income (loss):
Pension plans and other postretirement benefits:

Amortization of prior service cost (credit) included in net periodic benefit cost (income), net of income tax expense (benefit) of $(174) in 2024 and $(171) in 2023		(502)		(547)

Amortization of actuarial net loss (gain) included in net periodic benefit cost (income), net of income tax expense (benefit) of $(122) in 2024 and $(118) in 2023		(358)		(375)
Total pension plans and other postretirement benefits		(860)		(922)




Foreign currency translation adjustments, net of income tax expense (benefit) of $(238) in 2024 and $207 in 2023		(6,943)		11,366




Other comprehensive income (loss)		(7,803)		10,444
Comprehensive income		$	99,929	$	108,027


(in thousands, except share amounts)	March 31, 2024		December 31, 2023
ASSETS
Current assets:
Cash and cash equivalents	$	117,066	$	111,936

Trade and other accounts receivable, less allowance for credit losses	464,687		432,349
Inventories	493,554		456,234
Prepaid expenses and other current assets	44,013		39,051
Total current assets	1,119,320		1,039,570
Property, plant, and equipment, net	761,685		654,747
Intangibles (net of amortization) and goodwill	768,918		124,642
Prepaid pension cost	377,941		370,882
Operating lease right-of-use assets, net	76,186		70,823

Deferred charges and other assets	53,449		48,207
Total assets	$	3,157,499	$	2,308,871
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	260,451	$	231,137
Accrued expenses	72,668		76,546
Dividends payable	21,365		19,212
Income taxes payable	15,403		6,131
Operating lease liabilities	15,505		15,074

Other current liabilities	5,402		16,064
Total current liabilities	390,794		364,164
Long-term debt	1,279,457		643,622
Operating lease liabilities-noncurrent	59,713		55,058
Other noncurrent liabilities	275,247		168,966
Total liabilities	2,005,211		1,231,810
Commitments and contingencies (Note 10)
Shareholders’ equity:
Common stock and paid-in capital (with no par value; authorized shares - 80,000,000; issued and outstanding shares - 9,594,250 at March 31, 2024 and 9,590,086 at December 31, 2023)	1,406		2,130
Accumulated other comprehensive loss	(28,874)		(21,071)
Retained earnings	1,179,756		1,096,002
Total shareholders' equity	1,152,288		1,077,061
Total liabilities and shareholders’ equity	$	3,157,499	$	2,308,871


(in thousands, except share and per-share amounts)	Common Stock and Paid-in Capital			Accumulated Other Comprehensive Loss		Retained Earnings		Total Shareholders’ Equity
	Shares	Amount


















Balance at December 31, 2022	9,702,147	$	0	$	(71,995)	$	834,402	$	762,407
Net income						97,583		97,583
Other comprehensive income (loss)				10,444				10,444
Cash dividends ($2.10 per share)						(20,292)		(20,292)
Repurchases of common stock	(82,486)	(1,223)				(27,525)		(28,748)

Tax withholdings related to stock-based compensation	(2,417)	0				(803)		(803)
Stock-based compensation	8,715	1,223				(14)		1,209
Balance at March 31, 2023	9,625,959	$	0	$	(61,551)	$	883,351	$	821,800

Balance at December 31, 2023	9,590,086	$	2,130	$	(21,071)	$	1,096,002	$	1,077,061
Net income						107,732		107,732
Other comprehensive income (loss)				(7,803)				(7,803)
Cash dividends ($2.50 per share)						(23,986)		(23,986)


Tax withholdings related to stock-based compensation	(1,816)	(1,118)						(1,118)
Stock-based compensation	5,980	394				8		402
Balance at March 31, 2024	9,594,250	$	1,406	$	(28,874)	$	1,179,756	$	1,152,288


Cash and cash equivalents	$	16
Trade and other accounts receivable, net	6
Inventories	28
Prepaid expenses and other current assets	3
Property, plant, and equipment, net	111
Intangibles and goodwill	650
Deferred charges and other assets	5
Accounts payable	(3)
Accrued expenses	(5)
Other noncurrent liabilities	(111)
Fair value of net assets acquired	$	700


	Fair Value		Estimated Useful Lives (in years)
Customer base	$	272	17.5
Formulas and technology	60		8
Trademarks and trade names	30		15
Water rights	30		indefinite
	$	392


Supplemental Information (in thousands)	January 16 to
AMPAC	March 31, 2024
Net sales	$	17,047
Loss before income taxes	(5,001)


Pro Forma Supplemental Information (unaudited) (in thousands)	Three Months Ended
Consolidated	March 31, 2024		March 31, 2023
Net sales	$	701,836	$	718,983
Income before income taxes	140,004		105,984


(in thousands)	Actual Cash Contributions for Three Months Ended March 31, 2024		Expected Remaining Cash Contributions for Year Ending December 31, 2024
Domestic plans
Pension benefits	$	793	$	3,926
Postretirement benefits	433		1,299
Foreign plans
Pension benefits	1,501		4,033


(in thousands)	Three Months Ended March 31,
	2024		2023
Cash and cash equivalents at beginning of year	$	111,936	$	68,712
Cash flows from operating activities:
Net income	107,732		97,583
Adjustments to reconcile net income to cash flows from operating activities:
Depreciation and amortization	25,807		20,313
Deferred income tax benefit	(3,899)		(4,932)


Working capital changes	(21,434)		9,795

Cash pension and postretirement contributions	(2,727)		(2,290)
Other, net	(2,640)		(10,554)
Cash provided from (used in) operating activities	102,839		109,915
Cash flows from investing activities:
Capital expenditures	(13,564)		(11,881)
Acquisition of business (net of $15,580 of cash acquired)	(683,924)		0



Cash provided from (used in) investing activities	(697,488)		(11,881)
Cash flows from financing activities:
Net borrowings (repayments) under revolving credit facility	386,000		(46,000)
Proceeds from term loan	250,000		0
Dividends paid	(23,986)		(20,292)
Debt issuance costs	(2,251)		0
Repurchases of common stock	0		(28,479)


Other, net	(8,372)		(2,280)
Cash provided from (used in) financing activities	601,391		(97,051)
Effect of foreign exchange on cash and cash equivalents	(1,612)		420
Increase in cash and cash equivalents	5,130		1,403
Cash and cash equivalents at end of period	$	117,066	$	70,115


	Three Months Ended March 31,
(in thousands)		2024		2023
Net sales
United States		$	248,236	$	256,398
Europe, Middle East, Africa, India		208,939		204,210
Asia Pacific		156,099		151,949
Other foreign		83,462		90,232
Net sales		$	696,736	$	702,789


	Three Months Ended March 31,
(in thousands)		2024		2023
Petroleum additives
Lubricant additives		$	571,915	$	602,574
Fuel additives		105,349		97,417
Total		677,264		699,991
Specialty materials		17,047		0
All other		2,425		2,798
Net sales		$	696,736	$	702,789


2024	$	18,925
2025	25,233
2026	25,233
2027	25,233
2028	25,184
2029	25,043


	Domestic
	Pension Benefits				Postretirement Benefits
	Three Months Ended March 31,
(in thousands)	2024		2023		2024		2023
Service cost	$	3,016	$	2,658	$	135	$	130
Interest cost	5,722		4,536		418		391
Expected return on plan assets	(13,541)		(11,509)		(192)		(202)
Amortization of prior service cost (credit)	47		6		(757)		(757)
Amortization of actuarial net (gain) loss	(457)		(411)		(16)		(76)
Net periodic benefit cost (income)	$	(5,213)	$	(4,720)	$	(412)	$	(514)


		Foreign
		Pension Benefits
	Three Months Ended March 31,
(in thousands)		2024		2023
Service cost		$	1,087	$	1,054
Interest cost		1,618		1,544
Expected return on plan assets		(3,333)		(2,841)
Amortization of prior service cost (credit)		35		34
Amortization of actuarial net (gain) loss		(7)		(6)
Net periodic benefit cost (income)		$	(600)	$	(215)


	March 31, 2024				December 31, 2023
(in thousands)	Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization
Amortizing intangible assets
Formulas and technology	$	60,000	$	1,595	$	6,200	$	6,200
Contract	0		0		2,000		2,000
Customer base	277,440		7,891		5,440		4,539
Trademarks and trade names	30,000		425		0		0
Water rights	29,392				0
Goodwill	381,997				123,741
	$	778,829	$	9,911	$	137,381	$	12,739



Three months ended March 31, 2024	$	5,372

Three months ended March 31, 2023	356


(in thousands)	Pension Plans and Other Postretirement Benefits		Foreign Currency Translation Adjustments		Accumulated Other Comprehensive (Loss) Income
Balance at December 31, 2022	$	54,562	$	(126,557)	$	(71,995)
Other comprehensive income (loss) before reclassifications	0		11,366		11,366
Amounts reclassified from accumulated other comprehensive loss (a)	(922)		0		(922)
Other comprehensive income (loss)	(922)		11,366		10,444
Balance at March 31, 2023	$	53,640	$	(115,191)	$	(61,551)

Balance at December 31, 2023	$	79,966	$	(101,037)	$	(21,071)
Other comprehensive income (loss) before reclassifications	0		(6,943)		(6,943)
Amounts reclassified from accumulated other comprehensive loss (a)	(860)		0		(860)
Other comprehensive income (loss)	(860)		(6,943)		(7,803)
Balance at March 31, 2024	$	79,106	$	(107,980)	$	(28,874)


	Three Months Ended March 31,
(in millions)		2024		2023
Petroleum additives
Lubricant additives		$	571.9	$	602.6
Fuel additives		105.4		97.4
Total		677.3		700.0
Specialty materials		17.0		0
All other		2.4		2.8
Net sales		$	696.7	$	702.8


(in millions)	Three Months
Period ended March 31, 2023	$	700.0
Lubricant additives shipments	4.8
Fuel additives shipments	12.3
Selling prices	(39.3)
Foreign currency impact, net	(0.5)
Period ended March 31, 2024	$	677.3


Exhibit 3.1			Articles of Incorporation Amended and Restated effective April 27, 2012 (incorporated by reference to Exhibit 3.1 to Form 8-K (File No. 1-32190) filed April 30, 2012)
Exhibit 3.2			NewMarket Corporation Bylaws Amended and Restated effective August 6, 2015 (incorporated by reference to Exhibit 3.1 to Form 8-K (File No. 1- 32190) filed August 6, 2015)
Exhibit 31(a)			Certification pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by Thomas E. Gottwald
Exhibit 31(b)			Certification pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by William J. Skrobacz
Exhibit 32(a)			Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 by Thomas E. Gottwald
Exhibit 32(b)			Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 by William J. Skrobacz
Exhibit 101			Inline XBRL Instance Document and Related Items (the instance document does not appear in the Interactive Data File because its Inline XBRL tags are embedded within the Inline XBRL document)
Exhibit 104			Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)


			NEWMARKET CORPORATION
			(Registrant)

Date: April 25, 2024			By: /s/ William J. Skrobacz
			William J. Skrobacz
			Vice President and
			Chief Financial Officer
			(Principal Financial Officer)

Date: April 25, 2024			By: /s/ Gail C. Ridgeway
			Gail C. Ridgeway
			Controller
			(Principal Accounting Officer)