NewMarket Corporation Reports Strong Q3 and Nine-Month Financial Results

NewMarket Corporation reported strong financial performance for the third quarter and the first nine months of 2024, with notable increases in net sales, gross profit, and net income compared to the same periods in 2023. For the third quarter ended September 30, 2024, net sales reached $724.9 million, an increase of $57.8 million (8.7%) from $667.2 million in Q3 2023. For the nine months ended September 30, 2024, net sales totaled $2.1 billion, up $76.8 million (3.7%) from $2.1 billion in the prior year.

Gross profit for the third quarter was $243.8 million, compared to $201.7 million in Q3 2023, while gross profit for the nine months increased to $678.7 million from $595.4 million. Operating profit also saw significant growth, with Q3 operating profit at $169.5 million, up from $132.4 million, and nine-month operating profit rising to $457.3 million from $381.7 million. Net income for Q3 2024 was $132.3 million, compared to $111.2 million in Q3 2023, and for the nine months, net income increased to $351.7 million from $308.5 million.

The company’s earnings per share (EPS) reflected this growth, with Q3 EPS at $13.79, up from $11.60, and nine-month EPS at $36.66, compared to $32.05 in the previous year. The increase in profitability was attributed to improved operating margins, with the operating profit margin for Q3 2024 at 23.8%, up from 21.1% in Q3 2023.

Strategically, NewMarket completed the acquisition of AMPAC Intermediate Holdings, LLC for approximately $697 million on January 16, 2024. This acquisition, which specializes in manufacturing critical specialty materials for solid rocket motors, was funded through cash on hand and borrowings from a revolving credit facility. The acquisition resulted in a significant increase in goodwill, recorded at $256 million, and is expected to enhance the company’s specialty materials segment.

Financially, NewMarket's total assets increased to $3.2 billion as of September 30, 2024, up from $2.3 billion at the end of 2023. Long-term debt rose to $1.1 billion, compared to $643.6 million at the end of the previous year, reflecting the financing of the AMPAC acquisition. The company also entered into a new $900 million revolving credit facility and a $250 million unsecured term loan in January 2024.

Despite challenges in the petroleum additives segment, which experienced a slight decline in net sales for the first nine months of 2024, the company remains optimistic about its long-term growth prospects and ongoing integration of AMPAC into its operations.