Operator
Greetings and welcome to the New Mercos Corporation scheduled conference call and webcast to review second quarter 2026 financial results. At this time all participants are on a listen-only mode and if anyone should require operator assistance during the conference please press star zero on your telephone keypad. Please note this conference call is being recorded. I will now turn the conference over to your host, Mr. Tim Fitzgerald, Chief Financial Officer with Newmarket Corporation. Sir, the floor is yours. Thank you, and thanks to everyone for joining me 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. During this call, we will also discuss the non-GAAP financial measures included in our earnings release. The earnings release, which can be found on our website, includes a reconciliation of the non-GAAP financial measures to the comparable GAAP financial measures. We filed our 10-Q for the second quarter of 2026 today, and it contains significantly more details on the operations and performance of our company. Today, I will be referring to the data that was included in last night's press release. Net income for the second quarter of 2026 was $134 million, or $14.54 per share, compared to net income of $111 million, or $11.84 per share for the second quarter of 2025. Net income for the first half of 2026 was $252 million, or $27.14 per share, compared to net income of $237 million, or $25.11 per share in the first half of 2025. Petroleum additive sales for the second quarter of 2026 were $676 million, compared to $654 million for the same period in 2025. Petroleum additive's operating profit for the second quarter of 2026 was $149 million, dollars compared to operating profit of 140 million dollars in 2025. The increase in operating profit was mainly due to surcharges that were implemented in response to higher costs we have seen in our P&L from the supply chain disruptions in the Middle East. For the first half of 2026, sales for the petroleum additive segment were 1.3 billion dollars, essentially flat compared to the same period in 2025. Petroleum additive's operating profit for the first half of 2026 was $284 million compared to $282 million in 2025. We are very pleased with the performance of our petroleum additives business during the first half of 2026 and the work done by our team to operate within a rapidly changing environment due to the conflict in the Middle East. We remain committed to improving efficiency and managing operating costs while continuing to focus on investing in technology and our supply network to meet customer needs. Specialty materials sales for the second quarter of 2026 were $67 million compared to $42 million for the same period in 2025. Specialty materials operating profit for the second quarter of 2026 was $22 million compared to $11 million for the second quarter of 2025. The 2025 period excludes CALCA's results as the acquisition was completed on October 1, 2025. As previously stated, we will see substantial variation in quarterly results for the specialty materials segment on an ongoing basis due to the nature of the business. For the first half of 2026, sales for specialty materials segment were $125 million compared to $96 million for the same period in 2025. Specialty materials operating profit for the first half of 2026 was $35 million, essentially flat compared to the first half of 2025. We are especially pleased with the performance of our specialty materials segment, and we are excited about our investments to expand production capacity for both ammonium perchlorates and high-purity hydrazine to support the domestic production of critical aerospace and defense chemicals. We expect to see this additional capacity come online towards the end of 2026. Our company generated solid cash flow for the first half of 2026, which allowed us to return $182 million to our shareholders through dividends of $56 million and share repurchases of $126 million. Our net debt to EBITDA ratio improved to 1.0 times as of June 30, 2026. As we look ahead to the second half of 2026, we are committed to making decisions that promote long-term value for our customers and shareholders while staying focused on our long-term objectives. We believe that the core principles guiding our business, a long-term perspective, a safety-first culture, customer-focused solutions, technology-driven products, and a world-class supply chain will continue to benefit all our stakeholders. That concludes our planned comments. We are available for questions via email or by phone, so please feel free to contact me directly. Thank you all again, and we will talk to you next quarter.
Operator
Thank you. Ladies and gentlemen, this concludes today's conference, and you may disconnect your lines at this time, and we thank you for your participation.
