Good afternoon, ladies and gentlemen, and welcome to the NewMarket Corporation Conference Call and Webcast to review Third Quarter 2022 Financial Results. It is now my pleasure to turn the floor over to your host, Mr. Brian Paliotti, Vice President and Chief Financial Officer of NewMarket Corporation. Sir, the floor is yours. Mr.

Paliotti?.

Yes..

Sorry, sir, I think you were on mute..

Okay. Thank you, Ali. Thanks, Ali. And thanks to everyone for joining us. As a reminder, some of the statements made during this conference call may be forward-looking.

Relevant factors that could cause results to differ materially from those forward-looking statements are contained in our earnings release in our SEC filings, including our most recent Form 10-K. During this call, I may also discuss the non-GAAP financial measure included in our earnings release.

The earnings release can be found on our website, including a reconciliation of the non-GAAP financial measure to the comparable GAAP financial measure. We filed our 10-Q this morning that contains significantly more detail 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 earnings release. Net income was $63 million or $6.32 a share compared to the net income of $52 million or $4.80 a share for the third quarter of last year.

Petroleum additives net sales for the third quarter of 2022 were $693 million compared to $619 million for the same period in 2021. Petroleum additives operating profit for the quarter was $83 million, higher than the third quarter operating profit of $72 million last year.

The profit increase was mainly due to increased selling prices, partially offset by higher raw material costs, decreased shipments and higher operating costs.

Shipments between quarterly periods were down 8.5%, with decreases in both lubricant additives and fuel additives shipments across all regions, except Latin America, which reported an increase in fuel additive shipments. Year-to-date, shipments decreased 1.3% between periods, with decreases in both lubricant additive and fuel additive shipments.

All regions, except Europe, contributed to the decrease in lubricant additive shipments. Europe and Asia Pacific were the primary drivers for the decrease in fuel additive shipments, partially offset by increases in both North America and Latin America. We're pleased with the strong petroleum additive sales in 2022.

However, our operating margins for the first 9 months of 2022 were 12.6% compared to 13.6% in the prior year 9-month period. We have seen progress in our efforts to recover margins and control costs, but we're still being challenged by the ongoing inflationary environment.

Margin recovery and cost control will continue to be a priority for the remainder of this year and into 2023, so that our margins will, again, be consistent with our historical ranges.

Worldwide supply chain disruptions continue to negatively impact our business, and we are working to resolve the supply chain issues to meet our customers' growing needs. During the quarter, working capital increased $84 million. We repurchased shares of our stock for $62 million.

We also funded capital expenditures of $13 million, and paid our dividends of $21 million, with our net debt-to-EBITDA ending the quarter at 2.4x. While this leverage is above our target range, we will -- as we use more working capital, we expect to return to our range of 1.5 to 2x net debt-to-EBITDA.

For 2022, we expect to see our capital expenditures in the $55 million to $65 million range. We remain focused on the long-term success of our company, including emphasis on satisfying customer needs, generating solid operating results and promoting the longest and greatest value to our shareholders, customers and employees.

We believe the fundamentals of how we run our business, a long-term view, safety and people-first culture, customer-focused solutions, technology-driven product offerings and a world-class supply chain capability continue to be beneficial for all of our stakeholders. We thank you for joining the call today, and we appreciate your support.

Ali, this concludes our planned comments. We are available for questions via e-mail and/or by phone, so please feel free to contact me directly. We thank you all, and we'll talk to you next quarter..

End of Q&A:.