NEU - Earnings call transcript Q1 2019

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Operator

Good day, ladies and gentlemen, and thank you for joining us for the NewMarket Corporation Schedules Conference Call and Webcast to review first quarter 2019 financial results. [Operator Instructions]. Also as a reminder, today's meeting is being recorded. And now to get us started with opening remarks and introductions. I'm pleased to turn the floor to Mr. Paliotti. Brian Brian. Welcome,

Brian Paliotti

and With Jim, and for us joining Thank today thanks, is afternoon. me Chairman Teddy this you, everyone Gottwald, CEO. our

this contained forward filings, recent reminder, statements differ cause our materially a of SEC forward-looking conference including earnings to during call XX-K. statements release those are in As actual results most will our Relevant looking. some be from factors in that our made the and

filed earnings financial During includes earnings release. We the non-GAAP our we'll the included call, referring last night's the measure. found a read website GAAP that time to our more in comparable to the The non-GAAP which significantly our performance to measures be discuss of was morning, can review financial release, included measures financial Please detail in contained also it. I'll on reconciliation take the operations and XX-Q data be on of this it release. and our company.

million earnings $X.XX of share last last X.X% first So from net share This $X.XX or performance. the an EPS a and $XX.X of income year's an compared is million quarter year. for of X.X% a or increase $XX.X increase was to

partially months was The and ranges. priority operating of demand was petroleum same in for the additives. of $XX in and $XXX.X year. for sales historical was margins offset products in the price year. an a higher working the including Pacific, to exchange last fund until Onto XX.X% pressure conversion the million seen million, due of The in this quarters to to in fuel quarter lubricant was decreases additive which improvement of raise between which the margin this all rolling XXXX our additives due decreased the The margins of about changes include variations first decreased past margins materials, we shipments, stabilize. four over rate improve still or lag funding profit same short-term selling cash on increases X.X%. our profit first flow year, XXXX. to to see the we of foreign a across of XX.X% for both we normal XXXX shipments compared our XX.X% $XX.X regions by XX%, because the The of for sales shipments, cash the softening costs. quarter $XX.X due and improvement begin we quarter contributed in consistently turn in saw fuel to by from for the raw million CapEx when in but shipments operating changes selling to will of Margin of using more some when believe mainly the X.X% for capital. the quarter. our Items We've On The and which a million of and prices XXXX dividends year million higher note our effective that XXXX income offset materials our million of Petroleum or for first We continue net increase was years, the around million. in raw will first shipments prices. last down was $XX.X for two and our a period $XXX.X be tax see than period three decrease were the within additives, had except quarter $XX.X partially lower to for decrease Asia of increase

remaining Xx. with our leverage debt-to-EBITDA below low very with operate to continue We net

in see million levels range, XXXX. $XX consistent with to we our XXXX, capital of $XX our to expect the expenditures For million

the around have made the our our we services we'd our to intend technical capabilities questions. have been these These centers use up concludes the to world. and improve several the Over like ability we capabilities capacities, people, years to production investments that extend deliver planned and investments past technology, customer's to in goods significant lines shareholder value new open our for comments, and value. and Jim, to grow

Operator

Research. [Operator first Dmitry Silversteyn with to Instructions]. We'll go Buckingham

Dmitry Silversteyn

this But double-digit is First two and of on you phenomenon? the X% about not all, is declines going of volumes. now, happened specific know quarter don't where think in a growing assuming do that market the market I what I that's you for new guys in this have what volatility, just level not months, -- like In X% talking is quarter. to have six known you in you market

Thomas Gottwald

industry. Dmitry, vary Teddy. our this is in doesn't year-to-year. demand said, industry And unusual this really you is greatly our It's like

a So the a to we this, don't we short-term we a explanation. softness expect come around. about pattern specific long and to kind as if with do quarter a that of a to all the or than see over just But pattern world we one-off in see the that issue been softness that, period customers any it of time. we demand It's industry can We've specific sense over of to this general support identify it's can contact particular other a and issues. doesn't see

Dmitry Silversteyn

the of, comes confidence a point reversal see does we're that than in recovery happen this sort other that some from? your mean to will going So Where the this of future. longer-term, at to year

Thomas Gottwald

quarters. doesn't business, haven't confidence, My the that significant we here demand it minus of seen a fact just is XX%, and industry the like amount we've plus then or lost the vary in recent in

Dmitry Silversteyn

Right.

people I anticipation should with pricing half in growth I slower trying anticipation of we some saw you XXXX, in XXXX So to bad your long, the volume. combination mean to when I'm I relief. back the a your thinking of and coming decline raw a quarter Or inventories X of in were couple think was there see just a material time year you lowering to two -- this trimming similar like they XX% go have just in this happening things. of are how that but and Is things channel. I type world things a and the in guys that somewhat much last everybody say, an those before maybe said, forward? really peers, It so just and quarter -- to of to their -- market are is maybe could down by slowing competitors that is trying or much X end, of cutting what's I I'm their people sense how much be the understand was it's a off now inventories -- of of to are those down to that or not reverse.

Thomas Gottwald

customers Yes. industry insight of inventories you, of are be wish better mentioned I works. some say is Dmitry. had likely wouldn't to I demand weak Most a anticipation trimming, how you because our for those I our that's concern not in trimming contributors. just factors

demand Our outlook. changes greatly on dependent the industry, small is customer's our and not economic

that a You then. referred was next, I pause to a consumers, to big time to I think, and to that abrupt see major change XXXX, what was compare took really and at customers our it even going don't happen

been materials so scenario. we've be in up, multiple for so up, of there, think So last that moving factors. seen And There's course, it's there raw in just de-stocking that long. a wouldn't now probably can't some oil impact de-stocking I base but moving expected

Dmitry Silversteyn

Right.

to Again, sort of revenues. of the cadence understand try Okay.

that teens other accounting those revenue should breakdown type of in revenue. saw And for that State geography, that by a it's low mid-single this foreign geographic You've out that's in far at of kind whether digit away of say. situation and and that saw revenue whether jumped United there's have in Is or breakdown we but difference high kind from specific should EMEA I -- mid- revenues, rates in there anything decline economic as declines take by China can to customer me of or provided regions decline. exposure as we single-digit

Brian Paliotti

the that declines, a that Well, identifiable saw of regions -- of I be the would larger to the XX% is perspective was I kind referenced, that you And that saw world. -- that to shipments from more only Dmitry, the say balance thing as can then areas Teddy larger attribute that tell those those XX% the regions we attributable is, can one-offs. the change Brian, can of what this

Dmitry Silversteyn

any those And were? on one-offs Okay. granularity what

Brian Paliotti

XX% total in about the of change shipments. It's

Dmitry Silversteyn

that, Paliotti, it related No, what I was understand to?

Brian Paliotti

a Oh, well, one business last as divested you small year. can be we know, related to,

last from So be, the would that is perspective year year not is there the into comparative world in a in the then could comparative this we and product anymore. sell other places that we some cannot. And

Operator

queue [Operator one Mr. just we Instructions]. signal it's follow and do And in from have up Silversteyn. the a

Dmitry Silversteyn

you. why part had Is as in Asia ask I'll Pacific Or you just have you're a talked faster volume -- the of that performance share new a regions in positive sort this continue for only where to Apparently, it? you of some about the matter quarter outlier? gotten On the of, that geography the real is just or outlier it fuel positive growing economy additives selling questions. products,

Brian Paliotti

everything a obviously, continue Asia not perspective, said Dmitry. of I think in car drives and perspective transportation modes perspective. combination from from much bit see as sales you a see a Pacific fuel of transportation to more -- continue just a which continue China, increase to a consumption. it's It's little we from But to macro of

Dmitry Silversteyn

you. Got

raw years But margin seasonal it with layering once that margin Okay. progression you're of they're sort -- over Is decline guys, doing second assuming, about should was predictable marginal the first pricing, there much With history -- there just think materials doesn't the behavior in to here looking I'm quarter we a sequentially. seem that still and back what quarter. I to in, how in most doing be have seasonal sequentially? you

Brian Paliotti

continued ranges the rolling we're Yes, that mid- of XX.X%, Dmitry, you ensure recovery mind, high-teens necessary margins we've so that getting we're to perspective is to can from range. continue The still to that actions sure going had inside a from perspective, just from of top towards at tell rolling to going work to margin range in margin and long-term a that to I only the make the high-teens. a take to to back perspective, the effort get mid-

Dmitry Silversteyn

right. All Okay.

So any not probably that means the there that I there there. is couldn't fact observe seasonality seasonality much

Brian Paliotti

Yes, from that a of. nothing quarter-to-quarter, sort

Dmitry Silversteyn

packaging getting all you in In costs, manufacturing or mentioned what you. release do you in general? that? you conversion or and Are costs your by Got costs, just like higher mean out, talking about shipments press

Brian Paliotti

Just manufacturing in costs general.

Dmitry Silversteyn

Okay. higher new it online? of compensation first and being Is And medical plant in costs? year in increases driving the Is sort normal of stuff? conversion it the and brought Singapore the just what's insurance

Brian Paliotti

it It would be to combination driver, cost of just in increase. network a of the general production one be the continues won't across multitude, a but

Dmitry Silversteyn

Got you.

think we Okay. Last up rate the should year. just range, Starting out about declined through low for tax last question, your year, the ending the of XXXX? XX% tax rate double-digits. in in sort XX%, How

Brian Paliotti

The quarter. we equivalent be XX% in we know, rate expect for XXXX, moving -- XXXX tax tax a rate to the Yes. range saw XXXX with XX% was the for what first tax to is of parts the fairly to 'XX, there reforms. lot and as you in full

I'd rate rate the go-forward the use year. first balance the a perspective, from quarter of pretty for a So good is

Operator

[Operator additional group. any for Instructions]. remarks. turn I from And you will the signals it gentlemen, have we or no closing back to

Brian Paliotti

Thank you, you. next talk to Thank for everyone, and in, calling we'll quarter. you

NewMarket (NEU) 25 Apr 192019 Q1 Earnings call transcript