NewMarket Corporation Reports Improved Second Quarter and Six Month 2004 Results 
7/29/2004 
· Formation of NewMarket Corporation completed
· Petroleum additives and TEL second quarter and six month results improve
· New loan agreement completed

Richmond, VA, July 29, 2004 –NewMarket Corporation (NYSE-NEU)  President and Chief Executive Officer, Thomas E. Gottwald, released the following earnings report for the second quarter and six months 2004 and an update of the company’s operations.

Both petroleum additives and tetraethyl lead (TEL) earnings improved in the second quarter and first half of 2004 over the same periods last year.  Earnings from continuing operations for the first half of 2004 improved significantly to $17.2 million, or $1.02 per share, compared to earnings on the same basis for the first half of last year of $5.6 million, or $.33 cents per share.  First half net income in 2003, including the $14.8 million gain on the sale of our phenolic antioxidant business and a $1.6 million benefit upon adoption of Statement of Accounting Standards No. 143, amounted to $22 million or $1.32 per share.  These 2003  items are included in the summary of earnings chart at the end of this earnings release.  Net income for the second quarter of this year of $11.4 million, or $.67 per share, was also up significantly from second quarter 2003 net income of $5.7 million, or $.34 per share.

Petroleum additive profits improved 26% for the first half of 2004 and 20% for the second quarter compared with the same periods last year.  These results include an increase in net sales of petroleum additives of 23% for the first half and 22% for the second quarter.  This performance represents the best first-half petroleum additives earnings since 1999 and includes higher shipments in almost all of our major product lines.   Raw material costs were higher in the 2004 periods.  Research, development and testing costs were also higher for the first half of 2004 in support of our growth strategies, the requirements of new product specifications and our commitment to supply our customers with additives that help differentiate their products.

TEL earnings also improved for the second quarter and six months compared with the same periods last year.  The improvement reflects higher pricing as well as an increase in shipments compared to the same periods last year.  TEL segment results are subject to significant quarterly swings and therefore we do not believe that quarter to quarter comparisons are particularly meaningful.

During the quarter, we also completed the restructuring of our term and bank loans with terms that we believe are more consistent with our improved financial position.  This restructured facility consists of a $100 million revolving loan which we believe provides us more financial flexibility as we move forward.

While we are pleased with our first half performance, we expect the second half results to be lower than the first. We have been somewhat successful in raising the selling prices of our petroleum additives products.  However, our current price improvements do not cover the increased raw material costs, as the price of oil-based raw materials remains at record high levels, thereby reducing margins.  On TEL, we expect the full year 2004 results to be below last year.  Given that the first half for TEL was stronger than the first half last year, we expect that the second half will be weaker.    

The continuing improvement in earnings is a result of the dedication and efforts of employees of the family of NewMarket companies worldwide.  We believe that the new holding company structure enables the management of our operating subsidiaries, Afton Chemical Corporation and Ethyl Corporation, to focus more intensely than ever on the challenges, opportunities and strategies for their respective product lines and markets.

Sincerely,
Thomas E. Gottwald

Please review our 10-Q filing for a more thorough discussion of the topics mentioned in this release.

Earnings for the six months 2003 included significant nonrecurring items.  The following summary of earnings totaling net income under generally accepted accounting principles is included below as part of the earnings release.
 

Summary of Earnings for the Second Quarter:                  
      Second Quarter Ended
June 30
   

Six Months Ended
June 30

     
                     
      2004   2003     2004   2003
Net income:                  
  Earnings excluding discontinued operations and                  
    nonrecurring item $

11.4 

$

5.7

  $ 17.2 $ 5.6
  Discontinued operations (2003 gain on sale of phenolic                  
    antioxidant business) (1)  

-    

 

-    

    -       14.8
  Gain upon adoption of SFAS No. 143 (1)  

-    

 

-    

    -       1.6 
                     
   Net income $

11.4

$

5.7

  $ 17.2 $ 22.0
                     
Basic earnings per share (2):                  
  Earnings excluding discontinued operations and                  
    nonrecurring item $

0.67

$

0.34

  $ 1.02 $ 0.33
  Discontinued operations (2003 gain on sale of phenolic                  
    antioxidant business) (1)  

-    

 

-    

    -       0.89
  Gain upon adoption of SFAS No. 143 (1)  

-    

 

-    

    -       0.10
                     
   Net income $

0.67

$

0.34

  $ 1.02 $ 1.32
                     
(1) Details included in notes to accompanying financial statements.
                     
(2) Information on diluted earnings per share is included in the accompanying Segment Results and Other Financial Information Statement.
                     

As a reminder, a conference call and Internet web cast is scheduled for 10:00 a.m. EDT on July 30, 2004 to review second quarter 2004 financial results. You can access the conference call live by dialing 800-657-1269 (domestic) or  973-409-9259 (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.vcall.com.   A teleconference replay of the call will be available until 8-2-04 by dialing 877-519-4471 (domestic) and 973-341-3080 (international).  The replay passcode is 4974751.  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 chemical blends to market-general additive components, the NewMarket family of companies provides the world with the technology to make fuels burn cleaner, engines run smoother and machines last longer.

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: timing of sales orders; gain or loss of significant customers; competition from other manufacturers; resolution of environmental liabilities; changes in the demand for our products; significant changes in new product introduction; increases in product cost; the impact of fluctuations in foreign exchange rates on reported results of operations; changes in various markets; geopolitical risks in certain of the countries in which we conduct business; the impact of consolidation of the petroleum additives industry; 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 7A, “Quantitative and Qualitative Disclosures About Market Risk” of our 2003 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. 

To the extent that this press release contains non-GAAP financial measures, it also presents both the most directly comparable financial measures calculated and presented in accordance with GAAP and a quantitative reconciliation of the difference between any such non-GAAP measures and such comparable GAAP financial measures.  For management’s statement concerning the reasons why management believes that presentation of non-GAAP measures provides useful information to investors concerning NewMarket’s financial condition and results of operations, see the Form 8-K furnished to the Securities and Exchange Commission on July 29, 2004.
 

For Investor Information, Contact:

     NewMarket Corporation, Richmond
     Investor Relations: David A. Fiorenza, 804-788-5555
     Fax: 804-788-5688
     investorrelations@newmarket.com