NEU - Earnings call transcript Q2 2019

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Operator

Good day, ladies and gentlemen, and welcome to the NewMarket Corporation Conference Call and Webcast to Review Second Quarter 2019 Financial Results. All lines have been placed in a listen-only mode and there will be a question-and-answer session after the presentation. [Operator Instructions]

At this time, it's my pleasure to turn the floor over to Mr. Brian Paliotti. yours. is floor the Sir,

Brian Paliotti

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

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

discuss on some to earnings of also financial including During measures release our the may financial the call, reconciliation in non-GAAP release. measure. financial can included we measure a GAAP non-GAAP the be our earnings comparable The found out website,

operations and of Please we review And earnings time included company. filed it. performance to XX-Q take night's last morning, was be release. data contained that our the the referring significantly in to I'll it the This on and more details

in shipments, was income the of $XXX.X XXXX. share Petroleum the lower Europe $XX.X were second and for year, Latin prices. the a quarter net offset million same last North $X.XX million The compared million lubricant $XXX.X in shipments in This mainly share quarter the and same in million a for Europe, sales $XX.X additive net $X.XX additive of period shipments income mainly for America or due period due net down America second X.X% year. to to decrease compared or was fuel to by selling last were Latin increased partially Shipments from to America. additive decreases and

reverse. $XX.X as year additives global low-margin additives was to we compared operating for last evidence quarter $XXX decisions begun products, business profit to this million starting demand quarters for profit Shipments million. have as quarter to not due operating of to petroleum is been renew trend lower the although that see Petroleum to have the our second recent certain softening well in

to additives changes costs, June due lower was Petroleum materials rolling increase and prices offset XX.X%. XXXX profit XX, and four ended operating raw the in The shipments. selling partially for lower was conversion by quarters

see turnaround environment we over material in global years, marked economic We which by have prices from some the increases sustained demand. was begun two past and raw have to the softening faced challenging

the This include flow in the Items year. million rolling range for $XX.X margin of operating more of end cash using XXXX, second of down $XX.X our reentered is historical tax of low million, our quarter: for capital. working the and same last in rate period we've XX.X%, highest has income profit Onto of since upper to seen fund the the the quarter it dividend mid of normal was The the and variations effective to the our note rate from XX% teens. CapEx cash of just funding

leverage continue to debt-to-EBITDA net times. We operate with X.X very below with low

For of expenditures the XXXX, XXXX projects. our we the some for to is million revised of larger million to due downward expect This to range. capital $XX in timing slightly capital $XX see

believe satisfy decisions and the to generating needs, business the making continued solid our have We customer operating customers employees. will value manage long-term profit, we shareholders, our to while for greatest promote

And with we that the remain believe will rate as fundamentals growth whole our we believe for the to growing a to the annual long exceed the at to in the that X% continue rate continue over We additives industry unchanged, X% petroleum future. term. market foreseeable

questions. concludes open it planned up comments. like to Tom, that We'd to the

Operator

question from a do We Dmitry Research. Buckingham Silversteyn Instructions] [Operator coming have with through

Dmitry Silversteyn

Good things. afternoon, a guys. of for Thanks taking call. couple Wondering my

where of you a your but that on positive you your exchange your that? margins? is translation just mentioned had or foreign your line you release was you foreign in First it elaborate hurt sell, helped And that manufacture margins. what top a of all, on it on about the exchange versus the impact -- press Can where

Brian Paliotti

impact. translation a It's Yes.

Dmitry Silversteyn

you Singapore it and local Including at get higher the or work? dollars, sell currency in U.S. you how does and

Brian Paliotti

of in balance units the of impacts manufacturing the stream. across type revenue the Those

Dmitry Silversteyn

us Can of idea your it's Okay. different sales so manufacturing how easier us of your versus is, an forward? you footprint effect this monitor for to give where footprint your -- going

Brian Paliotti

Dmitry… Well,

Dmitry Silversteyn

selling looking the in order XX% vice in for? that I'm of words, versa, that's or producing you're thing but U.S., XX% type the abroad

Brian Paliotti

multitude detailed we in all currencies more across Dmitry, of the have goods sell give over currencies. Yes. and world that to I mean, types all you world buy the had to and off-line. and of something I manufacture we

region a X we simple it's globally percent X not answer and manufacture in as one So collect region... percent in another

Dmitry Silversteyn

talk really Brian. Thanks. I'll to you offline, Okay.

loss volume additives, margin. of you're you also single-digit it combination was mentioned slowing petroleum low down, in some that high the but "firing" On that market the experiencing customers you a at

to separate had decline high those two we volume? in you've If would pocket digit single events, how that

Brian Paliotti

in we we impact first as of half XXXX carry half last there saw first quarter, think the the was about into talked Well, I that an XXXX. of

there's So we business a divested also when and talked no about longer that we sell. places small we

So was through the that effective of market. just margin was of rest about X% the was and it management rest of low the X%, and the business shedding then some

entirety makes that up the So that's the of -- X%.

Dmitry Silversteyn

would understand margins. consider lift trying great. And -- to be what in then to a surprisingly right, All I Okay. the just

yet you operating to if in through the So line. pricing, it completely grew was million I your or that million, million think top-line, the bottom $XX so fell by $XX lost of profit $XX

where to analyst, another that? So do the you did channel -- XX guys did how other

Brian Paliotti

just the raw but Well, of we also have it's in materials, seen materials. procurement reductions not raw

As for own the few that. of materials and our you benefit self-production years raw a an we're of we ago some seeing acquisition of made know,

over and the few that from from as last a to effective see cost continued Then be will we from that talked more benefits we operations. perspective had about to as well we start years, efficient saw line, that in and diligent

that. majority were So of vast both of those combined

Dmitry Silversteyn

Brian. it, Got Okay.

the going pricing to year-over-year EBIT pricing probably year are if -- raw you even going assuming even to here, at this given for you're getting your is I'm by the stays least XX%, the end get would better remainder for of the that consider the comp So still materials level product. get year, sustainable XX% of

this that So level four we've results? of the after lower got new quarter somewhat is

Brian Paliotti

know, guidance, don't give think business but we you over Dmitry, operates to we this mid- high-teens. As the the long-term in

Dmitry Silversteyn

Okay.

that of Let year? of question anything of drivers half differently. the in ask me terms second Was quarter in this the there repeatable the not the in be margin would

Brian Paliotti

answer is The that no. to

Dmitry Silversteyn

all you. Okay, Thank right.

Operator

question we a [Operator Instructions] coming Madison And Investment. through Haruki do with have Toyama from

Haruki Toyama

Or the have it for been renew volume something that a the really of that a although quarters. declines going out The to explanation, is Is on previous the ticked guys. explanation just business. couple you certain That's something off latest gave quarters? in you decision not Hi, in just call low new there up quarter? margin

Teddy Gottwald

want was just Hi, this we that this market out didn't related called to is indicate it quarter because changes, Teddy. to that's all. all We it

Haruki Toyama

Okay. that then But in your is declines quarters something well? impact did reported previous as that

Teddy Gottwald

and There the in is give marketplace, yes. so take always

Haruki Toyama

next similar to And pricing, will that really then increases the the wind over starting Should the or from start expect increase on to ago. Okay. you're pricing few a at paces we to continue some year down then quarters? lapse

Brian Paliotti

margin over high-teens the from We long-term, to to expect a and this the to business mid perspective operate to going manage we're in that. it

Haruki Toyama

you. Thank

Brian Paliotti

you. Thank

Operator

at no in the this there time. Paliotti, Mr. questions And Instructions] left further queue are [Operator

Brian Paliotti

All calling We'll quarter. next to right. and everyone in. for thanks talk Thanks, you Tom,

Operator

Ladies conclude your teleconference. and today's We gentlemen, this does appreciate participation.

at disconnect may this You time.

NewMarket (NEU) 2 Aug 192019 Q2 Earnings call transcript