NewMarket Corporation Reports Second Quarter and First Half 2014 Results

NewMarket Corporation (NYSE:NEU) President 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 2014.

Net income for the second quarter of 2014 was $66.8 million, or $5.24 per share, compared to net income of $64.0 million, or $4.81 per share, for the second quarter of 2013. For the first half of 2014, net income was $124.3 million, or $9.66 per share, compared to net income of $131.8 million, or $9.88 per share, for the first half of last year.

Net income for all periods included the impact of valuing an interest rate swap at fair value, while both periods last year included the results from operations of a discontinued business. Excluding these items, second quarter 2014 earnings were $68.2 million, or $5.35 per share, compared to $61.3 million, or $4.61 per share, last year. On the same basis, earnings for the first half of this year were $127.0 million, or $9.87 per share, compared to $127.8 million, or $9.58 per share, last year (see Summary of Earnings table below).

In our petroleum additives segment, sales for this year’s second quarter were $617.5 million compared to sales for the same period last year of $581.3 million, with shipments up a strong 7.2% to record levels. Operating profit reached $109.1 million, an 11.6% improvement over second quarter operating profit last year of $97.8 million. For the first half of this year, petroleum additives operating profit was $205.3 million compared to operating profit for the same period last year of $199.8 million. Sales for the first half of this year were $1.2 billion compared to sales in the first half of last year of $1.1 billion, with shipments up 6.6%.

In late June, we broke ground on the site of our previously announced manufacturing facility in Jurong Island, Singapore. Our initial investment of over $100 million demonstrates the Company’s commitment to serving the Asia Pacific and Middle East markets. This facility will help improve our security of supply, reduce customer lead-times for the delivery of our products, and help us grow in support of our customers. We expect the plant to become operational during the fourth quarter of 2015.

During the second quarter, we repurchased 222,200 shares of our stock at a cost of $85.8 million. At the end of June, we had $337.9 million remaining on our stock repurchase authorization, and we had 12.6 million shares outstanding.

We are pleased with the results of our petroleum additives segment and the overall performance of our business during the first half of this year. We are making the investments necessary to support our customers around the world, both now and in the future, and we expect these investments to allow us to continue to provide solid returns for our shareholders.

Please read our second quarter Form 10-Q for more details on operations of the Company.

Sincerely,

Thomas E. Gottwald

The results for all periods include the impact of valuing an interest rate swap at fair value, while both periods last year include the results from operations of a discontinued business. The Company is reporting net income including these items, as well as income excluding them, and related per share amounts in the Summary of Earnings included in the earnings release. The Company has also included the non-GAAP financial measure EBITDA in this earnings release. A schedule following the financial statements included in this earnings release is provided reflecting the calculation of EBITDA, defined as income from continuing operations, before the deduction of interest and financing expenses, income taxes, depreciation and amortization. EBITDA is shown on the schedule both including and excluding the interest rate swap agreement. 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 net income determined under GAAP.

As a reminder, a conference call and Internet webcast is scheduled for 10:00 a.m. EDT on Wednesday, July 30, 2014, to review second quarter and first half 2014 financial results. You can access the conference call live by dialing 1-877-407-9210 (domestic) or 1-201-689-8049 (international) and requesting the NewMarket conference call. To avoid delays, callers should dial in five minutes early. The call will also be broadcast via the Internet and can be accessed through the Company’s website at www.NewMarket.com or www.investorcalendar.com. A teleconference replay of the call will be available until August 6, 2014 at 11:59 p.m. EDT by dialing 1-877-660-6853 (domestic) and 1-201-612-7415 (international). The conference ID number is 13585986. 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: availability of raw materials and transportation systems; supply disruptions at single sourced facilities; ability to respond effectively to technological changes in our industry; failure to protect our intellectual property rights; hazards common to chemical businesses; occurrence or threat of extraordinary events, including natural disasters and terrorist attacks; competition from other manufacturers; sudden or sharp raw materials price increases; gain or loss of significant customers; risks related to operating outside of the United States; the impact of fluctuations in foreign exchange rates; political, economic, and regulatory factors concerning our products; future governmental regulation; resolution of environmental liabilities or legal proceedings; inability to complete future acquisitions or successfully integrate 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 2013 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 come up 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.