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spk00: Good day, ladies and gentlemen, and welcome to your New Market Corporation conference call and webcast to review third quarter 2020 financial results. All lines have been placed in a listen-only mode. At this time, it is my pleasure to turn the floor over to your host, Brian Tagliotti. Sir, the floor is yours.
spk01: Thank you, Christy, and thanks to everyone for joining us 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 statements are contained in our earnings release and in our SEC filings, including our most recent Form 10-K and our first Quarter 10-Q. During this call, we may also discuss the non-GAAP financial measure included in our earnings release. The earnings release, which can be found on our website, includes a reconciliation of the non-GAAP financial measure to the comparable GAAP financial measure. We filed our 10-Q this morning. It contains significantly more details on the operations and performance of our company. Please take time to review it. I will be referring to the data that was included in last night's release. Net income was $96 million or $8.70 a share compared to net income of $68 million or $6.06 a share for the third quarter of last year. This increased performance includes a one-time $16.5 million gain on the sale of a non-operating real estate asset. This asset was part of our long-term real estate strategy that we have been executing on over the past few decades. This specific parcel project was kicked off late last year and closed in the third quarter. Sales for the petroleum additive segment for the third quarter of 2020 were $510 million compared to sales in the third quarter of 2019 of $551 million. The decrease was due primarily to lower shipments and selling prices. Petroleum additives operating profit for the third quarter of 2020 was $102 million compared to $95 million for the same period last year. The increase was due to lower raw material costs, selling, general, and administrative costs, research and development costs, partially offset by changes in selling prices, higher conversion costs, and lower shipments. Shipments decreased 3.2% between the periods mainly driven by decreases in fuel additive shipments. Our third quarter of 2020 operating results reflected continued improvement in some of the key drivers that affect the performance of our business consistent with what we Began to see near the end of the second quarter with gasoline consumption rebounding quickly miles driven continuing to show improvement industrial production beginning to rebound specifically related to automobile plants reopening and producing vehicles demand for both our lubricant and fuel additives have increased steadily throughout the quarter and While our second quarter results were significantly impacted by the economic disruption due to the COVID-19 pandemic and related government restrictions, these improvements in the third quarter of 2020 helped to drive an increase in shipments compared to the second quarter of over 25%. The effective tax rate for the third quarter of 2020 was 18.6%, down from the rate of 22.5% for the same period last year. During the quarter, we funded capital expenditures of $20 million, repaid debt of $82 million, and paid dividends of $21 million as we continue to operate with very low leverage with our net debt to EBITDA ending the quarter at 1.1 times. We would like to first and foremost continue to say thank you to our 2,000-plus team members who have adjusted in the past six months and who have made the necessary changes so that we can be able to continue to operate safely around the world. This has not been easy on anyone, and our team is no exception. Our primary focus, besides keeping everyone safe, continues to be meeting our customers' needs through this crisis. As we communicated since the beginning of this year, our operations continue to run globally without interruption. We continue to work with our customers to meet their needs, as well as we all, as well, excuse me, as we adjust to the changing economic environment. Helping our customers through these uncertain times continues to be a top priority. We are encouraged by the operating results of our petroleum additives business, and we expect the global market will continue to improve as government restrictions on the movement of people, goods, and services are eased, as modern transportation and machinery cannot function without our products. The rate of improvement will depend heavily on the rate at which these restrictions are lifted and remain lifted and the overall economic environment improving. Thank you for joining us for the call today. We hope you are all healthy and staying safe. Kristi, that concludes our planned comments for today, and thank you all for attending, and we look forward to talking to you at the end of the next quarter.
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