NewMarket (NEU) Q1 2026 Earnings Transcript

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DATE

Thursday, April 23, 2026 at 3 p.m. ET

CALL PARTICIPANTS

• President and Chief Executive Officer — Timothy K. Fitzgerald

TAKEAWAYS

• Net Income -- $118 million, representing a decrease from $126 million.
• EPS -- $12.62 per share, down from $13.26 per share.
• Petroleum Additives Sales -- $610 million, lower than the prior period's $646 million.
• Petroleum Additives Operating Profit -- $135 million, declining from $142 million, attributed mainly to a 7% drop in shipments.
• Petroleum Additives Shipments -- Down 7% due to both market softness and a strategic reduction in low-margin business.
• Petroleum Additives Operating Profit Margin -- Described as "strong" by management despite volume declines.
• Later-Quarter Shipments -- Management noted an increase in shipments "in the latter part of the quarter."
• Price Adjustments -- Implemented to address higher "raw materials, utilities, and logistics" costs.
• Global Production -- Rebalanced to match "customer demands in a dynamically evolving market."
• Specialty Materials Sales -- $58 million, up from $54 million, with growth driven by the October 2025 Calco Solutions acquisition, offset by a shipment mix shift at Ampak.
• Specialty Materials Operating Profit -- $12 million, down from $23 million, primarily due to quarterly shipment mix changes at Ampak.
• Quarterly Specialty Materials Volatility -- Management reaffirmed ongoing "substantial variation in quarterly results" driven by business characteristics.
• Cash Flow -- "Solid cash flows" enabled $104 million in capital return through $126 million share repurchases and $28 million in dividends (noting share repurchases plus dividends exceed total capital return, per company's stated split).
• Net Debt to EBITDA -- Ratio of 1.2x as of March 31, 2026.
• Strategic Priorities -- Management "remains committed" to long-term value creation, efficiency, and investments in technology and the supply network.

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RISKS

• Management cited a "decline in shipments of 7%" linked to "softening in the market and our strategic decision to reduce low-margin business."
• Specialty Materials segment operating profit declined from $23 million to $12 million due to unfavorable shipment mix at Ampak.
• Continued "substantial variation in quarterly results" is anticipated for the Specialty Materials segment.
• Management referenced "escalating cost of raw materials, utilities, and logistics" as challenges requiring price adjustments and cost management actions.

SUMMARY

NewMarket Corporation (NYSE:NEU) delivered a first-quarter net income and EPS decline, with lower petroleum additives sales and operating profit reflecting shipment volume contraction. Management addressed input cost pressures through pricing actions and production adjustments, indicating adaptability in a changing economic and geopolitical environment. Specialty Materials results showed year-over-year sales growth with Calco Solutions’ inclusion, while profitability declined due to shipment mix at Ampak and management warned of continued segment volatility.

• Management emphasized capital discipline, returning $104 million to shareholders and maintaining a net debt to EBITDA ratio of 1.2x as of quarter end.
• Operational actions in response to the Middle East conflict included rebalancing global production and price increases to offset cost escalation.
• Investments in technology, supply network, and a long-term strategic focus were reiterated by management as priorities for sustaining stakeholder value.

INDUSTRY GLOSSARY

• Petroleum Additives: Chemical compounds blended with base oils to improve the performance and longevity of lubricants and fuels in engines and industrial applications.
• Operating Profit Margin: The percentage of revenue remaining after deducting operating expenses, indicating operational efficiency within a business segment.
• Net Debt to EBITDA: A leverage ratio that compares a company’s net debt to its earnings before interest, taxes, depreciation, and amortization, serving as an indicator of financial risk.
• Shipment Mix: The composition and proportion of different products or segments shipped during a given period, impacting both revenue and profitability.

Full Conference Call Transcript

Timothy K. Fitzgerald: Thank you, and thanks to everyone for joining me this afternoon. As a reminder, some of the statements made during this conference call may be forward-looking. Relevant factors that could cause actual results to differ materially from those forward-looking are contained in our earnings release and in our SEC filings, including our most recent Form 10[inaudible]. During this call, we will also discuss the non-GAAP financial measures included in our earnings release, which can be found on our website and includes a reconciliation of the non-GAAP financial measures to the comparable GAAP financial measures. We filed our 10-Q for 2026 today, and it contains significantly more details on the operations and performance of our company.

Today, I will be referring to the data that was included in last night's press release. Net income for the first quarter of 2026 was $118 million, or $12.62 per share, compared to net income of $126 million, or $13.26 per share, for the first quarter of 2025. Petroleum additives sales for the first quarter of 2026 were $610 million, compared to $646 million for the same period in 2025. Petroleum additives operating profit for the first quarter of 2026 was $135 million, compared to operating profit of $142 million in 2025.

The decrease in operating profit was mainly due to the decline in shipments of 7% due to softening in the market and our strategic decision to reduce low-margin business. However, we are encouraged by the increase in shipments we observed in the latter part of the quarter. Despite the decline in shipments in the first quarter, our operating profit margin remained strong. We are very pleased with the performance of our petroleum additives business during the first quarter of 2026 and the work done by our team to operate within a rapidly changing environment due to the conflict in the Middle East.

We have implemented price adjustments to account for the escalating cost of raw materials, utilities, and logistics, and we have rebalanced our global production to make sure we are meeting customer demands in a dynamically evolving market. Despite these challenges, we remain committed to improving efficiency and managing operating costs. Our focus continues to be on investing in technology and our supply network to meet customer demands, enhancing our operational efficiency, and improving our portfolio profitability. We report the financial results of our Ampak business and our newly acquired Calco Solutions business in our Specialty Materials segment. Specialty Materials sales for the first quarter of 2026 were $58 million, compared to $54 million for the same period in 2025.

The increase in sales was mainly due to the inclusion of the Calco business, which was acquired on 10/01/2025, offset by a shift in shipment mix at Ampak versus the first quarter of last year. Specialty Materials operating profit for the first quarter of 2026 was $12 million, compared to $23 million for the first quarter of 2025. The decline in operating profit was mainly due to the change in quarterly shipment mix at Ampak compared to last year. As previously stated, we will see substantial variation in quarterly results for the Specialty Materials segment on an ongoing basis due to the nature of the business.

The company generated solid cash flows throughout the first quarter, which allowed us to return $104 million to our shareholders through share repurchases of $126 million and dividends of $28 million. As of 03/31/2026, our net debt to EBITDA ratio was 1.2 times. As we look ahead to 2026, we are committed to making decisions that promote long-term value for our shareholders and customers while staying focused on our long-term objectives. We believe that the core principles guiding our business—a long-term perspective, a safety-first culture, customer-focused solutions, technology-driven products, and a world-class supply chain—will continue to benefit all of our stakeholders. That concludes our planned comments.

We are available for questions via email or by phone, so please feel free to contact me directly. Thank you all again, and we will talk to you next quarter.

Operator: Thank you. This does conclude today's conference. You may disconnect your lines at this time. Thank you for your participation.

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