NewMarket Corporation's Acquisition and Financial Initiatives Drive Growth

2024-04-26

NewMarket Corporation recently hosted a conference call to discuss its financial performance for the first quarter of 2024, with Bill Skrobacz, the Vice President and CFO, leading the discussion. During the call, it was revealed that the company achieved a net income of $108 million, equivalent to $11.23 per share, for the mentioned quarter. Notably, the Petroleum additives operating profit experienced a notable increase, which was attributed to reduced raw material and operating expenses, despite facing challenges such as lower selling prices and product mix.

In a strategic move in January 2024, NewMarket Corporation acquired American Pacific Corporation (AMPAC) for an estimated $700 million. Following the acquisition, the financial results of AMPAC now contribute to the new Specialty materials segment within NewMarket Corporation. The purchase was financed through a combination of available cash and borrowings under the existing revolving credit facility.

Furthermore, the company undertook several financial initiatives, including funding capital expenditures, distributing dividends, and enhancing the quarterly dividend rate. Additionally, they replaced the existing revolving credit facility with a new $900 million facility and secured a $200 million unsecured term loan. As of March 31, 2024, the Net Debt to EBITDA ratio was reported at 1.9, aligning with the targeted operating range of 1.5 to 2.0.

Looking forward, the petroleum additives segment is anticipated to sustain its robust performance. NewMarket Corporation's strategic priorities encompass maintaining strong customer relationships, innovating new products and technologies, delivering exceptional customer service, and effectively integrating AMPAC into its portfolio of companies. The company upholds core values such as adopting a long-term perspective, promoting a safety-centric environment, providing customer-centric solutions, offering technology-oriented products, and generating value for all stakeholders.