NewMarket Corporation Reports Results for the Fourth Quarter and Full Year 2014

NewMarket Corporation (NYSE:NEU) Chairman and Chief Executive Officer, Thomas E. Gottwald, released the following earnings report of the Company’s operations for the fourth quarter and full year 2014.

Net income for the fourth quarter of 2014 was $52.1 million, or $4.17 per share, compared to net income of $54.0 million, or $4.08 per share, for the fourth quarter of 2013. Net income for 2014 was $233.3 million, or $18.38 per share, compared to net income of $264.7 million, or $19.90 per share, for 2013. Earnings for 2013 included the results from operations of a discontinued business and the related gain on the sale of the discontinued business. All quarterly and full-year periods included the impact of valuing an interest rate swap at fair value. Excluding these items, fourth quarter 2014 earnings were $53.7 million, or $4.30 per share, compared to $53.0 million, or $4.01 per share, in the prior year quarter, and earnings for the year 2014 were $237.6 million, or $18.72 per share, compared to $238.2 million, or $17.90 per share, last year (see Summary of Earnings table below).

Key to our business’ performance, the petroleum additives segment delivered operating profit of $85.5 million for the fourth quarter of 2014, an improvement of 6.9% over operating profit for the same period last year of $80.0 million. Sales of petroleum additives for the fourth quarter of 2014 were $547.9 million, down slightly from sales in the fourth quarter of last year of $553.9 million. Shipments were up about 1%. Petroleum additives operating profit for 2014 was $385.1 million, up 2.6% versus last year’s operating profit of $375.3 million. Sales for the year increased 2.4% to $2.3 billion, and shipments were up 4.2%.

Our business continued to generate strong cash flows in 2014. During the year, we paid dividends of $59.4 million, funded capital expenditures of $59.7 million and repurchased 664,254 shares of our stock at a cost of $248.5 million, including 95,644 shares repurchased in the fourth quarter. At the end of 2014, we had $256.7 million remaining on our stock repurchase authorization. Our strong financial position enhances our capability for future growth and improving shareholder value.

The results we have seen in the last few years reflect the hard work, dedication and extensive capabilities of NewMarket employees around the world. After having posted record results for each of the past 10 years, we expect that our petroleum additives segment will continue to deliver solid results in 2015. We believe our business fundamentals, including a long-term view, safety-first culture, customer-focused solutions, technology-driven product offerings, world-class supply chain capability and a regional organizational structure to better understand our customers’ needs, are core to our success.

Sincerely,

Thomas E. Gottwald

The results for all periods included the impact of valuing an interest rate swap at fair value, while the prior year periods included the results from operations of a discontinued business and the related gain on the sale of the discontinued business. The Company is reporting net income including these items, as well as income excluding them, and related per share amounts in the Summary of Earnings included in the earnings release. The Segment Results and Other Financial Information table included in this earnings release includes a non-GAAP financial measure, Income from Continuing Operations before Special Items and Income Tax Expense, which is reconciled to a GAAP measure. The Company has also included the non-GAAP financial measure EBITDA in this earnings release. A schedule following the financial statements included in this earnings release is provided reflecting the calculation of EBITDA, defined as income from continuing operations, before the deduction of interest and financing expenses, income taxes, depreciation and amortization. EBITDA is shown on the schedule both including and excluding the interest rate swap agreement. The Company believes that even though these items are not required by or presented in accordance with United States generally accepted accounting principles (GAAP), these additional measures enhance understanding of the Company’s performance and period to period comparability. The Company believes that these items should not be considered an alternative to net income determined under GAAP.

As a reminder, a conference call and Internet webcast is scheduled for 10:00 a.m. EST on Friday, January 30, 2015 to review fourth quarter and year-end 2014 financial results. You can access the conference call live by dialing 1-877-407-9210 (domestic) or 1-201-689-8049 (international) and requesting the NewMarket conference call. To avoid delays, callers should dial in five minutes early. The call will also be broadcast via the Internet and can be accessed through the Company’s website at www.NewMarket.com or www.investorcalendar.com. A teleconference replay of the call will be available until February 6, 2015 at 11:59 p.m. EST by dialing 1-877-660-6853 (domestic) and 1-201-612-7415 (international). The conference ID number is 13598780. A webcast replay will be available for 30 days.

NewMarket Corporation, through its subsidiaries Afton Chemical Corporation and Ethyl Corporation, develops, manufactures, blends, and delivers chemical additives that enhance the performance of petroleum products. From custom-formulated additive packages to market-general additives, the NewMarket family of companies provides the world with the technology to make engines run smoother, machines last longer and fuels burn cleaner.

Some of the information contained in this press release constitutes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Although NewMarket’s management believes its expectations are based on reasonable assumptions within the bounds of its knowledge of its business and operations, there can be no assurance that actual results will not differ materially from expectations.

Factors that could cause actual results to differ materially from expectations include, but are not limited to: availability of raw materials and transportation systems; supply disruptions at single sourced facilities; ability to respond effectively to technological changes in our industry; failure to protect our intellectual property rights; hazards common to chemical businesses; occurrence or threat of extraordinary events, including natural disasters and terrorist attacks; competition from other manufacturers; sudden or sharp raw materials price increases; gain or loss of significant customers; risks related to operating outside of the United States; the impact of fluctuations in foreign exchange rates; political, economic, and regulatory factors concerning our products; future governmental regulation; resolution of environmental liabilities or legal proceedings; inability to complete future acquisitions or successfully integrate future acquisitions into our business; and other factors detailed from time to time in the reports that NewMarket files with the Securities and Exchange Commission, including the risk factors in Item 1A, “Risk Factors” of our 2013 Annual Report on Form 10-K, which is available to shareholders upon request.

You should keep in mind that any forward-looking statement made by NewMarket in the foregoing discussion speaks only as of the date on which such forward-looking statement is made. New risks and uncertainties come up from time to time, and it is impossible for us to predict these events or how they may affect the Company. We have no duty to, and do not intend to, update or revise the forward-looking statements in this discussion after the date hereof, except as may be required by law. In light of these risks and uncertainties, you should keep in mind that the events described in any forward-looking statement made in this discussion, or elsewhere, might not occur.