- Q2'24 net sales of $463.6
million, net income of $34.9
million and earnings per diluted share of $1.94
- Q2'24 non-GAAP net income of $38.2
million and non-GAAP earnings per diluted share of
$2.13
- Delivered adjusted EBITDA of $84.3
million in Q2'24, a 5% increase compared to $80.2 million in Q2'23
- Gross margins improved 200 basis points compared to the prior
year, the 8th consecutive quarterly year-over-year increase
- Generated $73.5 million of
operating cash flow YTD; Increased cash dividend by 6.6%
CONSHOHOCKEN, Pa., Aug. 5, 2024
/PRNewswire/ -- Quaker Houghton ("the Company") (NYSE: KWR), the
global leader in industrial process fluids, announced its second
quarter 2024 results today.
|
Three Months
Ended
June 30,
|
|
Six Months
Ended
June 30,
|
($ in thousands,
except per share data)
|
2024
|
|
2023
|
|
2024
|
|
2023
|
Net sales
|
$
463,567
|
|
$
495,444
|
|
$
933,326
|
|
$
995,592
|
Net income attributable
to Quaker Chemical Corporation
|
34,885
|
|
29,346
|
|
70,112
|
|
58,880
|
Net income attributable
to Quaker Chemical Corporation common shareholders –
diluted
|
1.94
|
|
1.63
|
|
3.89
|
|
3.27
|
Non-GAAP net income
*
|
38,232
|
|
34,774
|
|
75,905
|
|
68,766
|
Non-GAAP Earnings per
diluted share *
|
2.13
|
|
1.93
|
|
4.22
|
|
3.82
|
Adjusted EBITDA
*
|
84,291
|
|
80,242
|
|
167,573
|
|
159,033
|
|
* Refer
to the Non-GAAP Measures and Reconciliations section below for
additional information
|
|
Second Quarter 2024 Consolidated Results
Net sales in the second quarter of 2024 were $463.6 million, a decline of approximately 6%
compared to $495.4 million in the
second quarter of 2023. This result was primarily due to a
decrease in selling price and product mix of approximately 4%, a
decline in sales volumes of approximately 1% and an unfavorable
impact from foreign currency translation of 1%. The decrease
in selling price and product mix was primarily attributable to our
index-based customer contracts. The decline in sales volumes
was primarily attributable to a continuation of soft end market
conditions, primarily in the EMEA and Americas segments, partially
offset by an improvement in volumes in the Asia/Pacific segment and new business wins
across all segments.
The Company reported net income in the second quarter of 2024 of
$34.9 million, or $1.94 per diluted share, compared to net income
of $29.3 million, or $1.63 per diluted share, in the second quarter of
2023. Excluding non-recurring and non-core items in each
period, the Company's non-GAAP net income and earnings per diluted
share were $38.2 million and
$2.13 respectively in the second
quarter of 2024 compared to $34.8
million and $1.93 respectively
in the prior year. The Company generated adjusted EBITDA of
$84.3 million in the second quarter
of 2024, an increase of 5% compared to $80.2
million in the second quarter of 2023, primarily driven by
an improvement in gross margins in all segments compared to the
prior year.
Andy Tometich, Chief Executive
Officer and President, commented, "Quaker Houghton achieved solid
results in the second quarter, demonstrating the resilience of our
business and delivering year-over-year and sequential earnings
growth. We continue to outperform our end markets, driven by
the team's focus and execution, earning profitable new business by
enhancing our customer's operations. Segment margins have
also improved year-over-year for the 8th consecutive quarter,
helping to mitigate the continued soft end market conditions,
primarily in the Americas and EMEA regions.
"Looking ahead, we expect to deliver another year of earnings
growth in 2024, despite the challenging end market environment
which will likely persist through the end of the year. We
remain committed to advancing our enterprise strategy, enhancing
our capabilities, and strengthening our leading portfolio of
products and technical capabilities to drive efficiencies and
further reinforce the relationship with our customers. Our
balance sheet and cash flow generation are strong, which support
our balanced capital allocation strategy and we are well positioned
to accelerate our long-term growth initiatives and drive value
creation."
Second Quarter 2024 Segment Results
The Company's second quarter 2024 operating performance for each
of its three reportable segments: (i) Americas; (ii) EMEA; and
(iii) Asia/Pacific, is further
described below.
|
Three Months
Ended
June 30,
|
|
Six Months
Ended
June 30,
|
|
2024
|
|
2023
|
|
2024
|
|
2023
|
Net Sales
*
|
|
|
|
|
|
|
|
Americas
|
$
223,517
|
|
$
253,219
|
|
$
453,271
|
|
$
504,632
|
EMEA
|
138,001
|
|
143,533
|
|
276,423
|
|
295,982
|
Asia/Pacific
|
102,049
|
|
98,692
|
|
203,632
|
|
194,978
|
Total net
sales
|
$
463,567
|
|
$
495,444
|
|
$
933,326
|
|
$
995,592
|
Segment operating
earnings *
|
|
|
|
|
|
|
|
Americas
|
$
64,137
|
|
$
69,007
|
|
$
130,906
|
|
$
135,132
|
EMEA
|
26,652
|
|
25,583
|
|
56,223
|
|
53,154
|
Asia/Pacific
|
31,000
|
|
27,989
|
|
61,377
|
|
55,641
|
Total segment
operating earnings
|
$
121,789
|
|
$
122,579
|
|
$
248,506
|
|
$
243,927
|
|
* Refer
to the Segment Measures and Reconciliations section below for
additional information
|
|
Net sales in the Americas segment declined in the second quarter
of 2024 compared to the same period in 2023 primarily due to a
decline in both sales volumes and selling price and product
mix. Net sales in the EMEA segment declined in the second
quarter of 2024 compared to the same period in 2023 primarily due
to a decline in selling price and an unfavorable impact of foreign
currency translation. Net sales in the Asia/Pacific segment increased in the second
quarter of 2024 compared to the same period in 2023 primarily due
to an increase in sales volumes, partially offset by a decline in
selling price and product mix and an unfavorable impact of foreign
currency translation.
The decline in selling price and product mix in the second
quarter of 2024 compared to the same period in 2023 in all segments
primarily reflects the impact of our index-based customer
contracts. The decline in sales volumes in the Americas
segment reflects softer end market activity, primarily for
metalworking applications, compared to the prior year, partially
offset by new business wins. Sales volumes, inclusive of
acquisitions, increased in the Asia/Pacific and EMEA segment compared to the
prior year due to continued new business wins and a modest
improvement in end market conditions, primarily in metals
applications.
Compared to the first quarter of 2024, net sales decreased 1%
due to decline in selling price and product mix of 1%. Sales
volumes in the EMEA segment increased compared to the prior
quarter, whereas sales volumes remained consistent in the Americas
and Asia/Pacific segments.
Selling price and product mix increased in the Asia/Pacific segment, but declined in the
Americas and EMEA segments reflecting the impact of our index-based
customer contracts. The impact of foreign currency
translation was favorable to the EMEA segment and unfavorable in
the Americas and Asia/Pacific
segment, compared to the prior quarter.
Operating earnings increased in the EMEA and Asia/Pacific segments in the second quarter of
2024 compared to the prior year but declined in the Americas
segment. Operating margins increased in all segments in the
second quarter of 2024 compared to the prior year. Operating
earnings and operating margins increased in the Asia/Pacific segment in the second quarter of
2024 compared to the first quarter of 2024 and declined modestly in
the Americas and EMEA segment.
Cash Flow and Liquidity Highlights
Net cash provided by operating activities was $73.5 million for the six months ended
June 30, 2024, compared to net cash provided by operating
activities of $116.1 million for the
same period in 2023. The Company's operating cash flow
reflects a stronger operating performance in the six months ended
June 30, 2024, partially offset by ongoing working capital
requirements.
As of June 30, 2024, the Company's
total gross debt was $737.4 million
and its cash and cash equivalents was $188.6
million, which resulted in net debt of approximately
$548.8 million. The Company's
net debt divided by its trailing twelve months adjusted EBITDA was
approximately 1.7x. In the second quarter of 2024, the
Company repurchased 49,000 shares for approximately $7.8 million.
Non-GAAP Measures and Reconciliations
The information included in this press release includes non-GAAP
(unaudited) financial information that includes EBITDA, adjusted
EBITDA, adjusted EBITDA margin, non-GAAP operating income, non-GAAP
operating margin, taxes on income before equity in net income of
associated companies – adjusted, non-GAAP net income and non-GAAP
earnings per diluted share. The Company believes these
non-GAAP financial measures provide meaningful supplemental
information as they enhance a reader's understanding of the the
Company's financial performance, are indicative of future operating
performance and facilitate a comparison among fiscal periods, as
the non-GAAP financial measures exclude items that are not
indicative of future operating performance or not considered core
to the Company's operations. Non-GAAP results are presented
for supplemental informational purposes only and should not be
considered a substitute for the financial information presented in
accordance with GAAP. In addition, our definitions of EBITDA,
adjusted EBITDA, adjusted EBITDA margin, non-GAAP operating income,
non-GAAP operating margin, taxes on income before equity in net
income of associated companies – adjusted, non-GAAP net income and
non-GAAP earnings per diluted share as discussed and reconciled
below to the most comparable respective GAAP measures, may not be
comparable to similarly named measures reported by other
companies.
The Company presents EBITDA which is calculated as net income
attributable to the Company before depreciation and amortization,
interest expense, net, and taxes on income before equity in net
income of associated companies. The Company also presents
adjusted EBITDA which is calculated as EBITDA plus or minus certain
items that are not considered indicative of future operating
performance or not considered core to the Company's operations. In
addition, the Company presents non-GAAP operating income which is
calculated as operating income plus or minus certain items that are
not considered indicative of future operating performance or not
considered core to the Company's operations. Adjusted EBITDA
margin and non-GAAP operating margin are calculated as the
percentage of adjusted EBITDA and non-GAAP operating income to
consolidated net sales, respectively. The Company believes
these non-GAAP measures provide transparent and useful information
and are widely used by investors, analysts, and peers in our
industry as well as by management in assessing the operating
performance of the Company on a consistent basis.
Additionally, the Company presents non-GAAP net income and
non-GAAP earnings per diluted share as additional performance
measures. Non-GAAP net income is calculated as adjusted
EBITDA, defined above, less depreciation and amortization, interest
expense, net, and taxes on income before equity in net income of
associated companies, in each case adjusted, as applicable, for any
depreciation, amortization, interest or tax impacts resulting from
the non-core items identified in the reconciliation of net income
attributable to the Company to adjusted EBITDA. Non-GAAP
earnings per diluted share is calculated as non-GAAP net income per
diluted share as accounted for under the "two-class share
method." The Company believes that non-GAAP net income and
non-GAAP earnings per diluted share provide transparent and useful
information and are widely used by investors, analysts, and peers
in our industry as well as by management in assessing the operating
performance of the Company on a consistent basis.
As it relates to future projections for the Company as well as
other forward-looking information contained in this press release,
the Company has not provided guidance for comparable GAAP measures
or a quantitative reconciliation of forward-looking non-GAAP
financial measures to the most directly comparable U.S. GAAP
measure because it is unable to determine with reasonable certainty
the ultimate outcome of certain significant items necessary to
calculate such measures without unreasonable effort. These
items include, but are not limited to, certain non-recurring or
non-core items the Company may record that could materially impact
net income. These items are uncertain, depend on various
factors, and could have a material impact on the U.S. GAAP reported
results for the guidance period.
The Company's reference to trailing twelve months adjusted
EBITDA within this press release refers to the twelve month period
ended June 30, 2024 adjusted EBITDA of $328.9 million, which consists of (i) the six
months ended June 30, 2024 adjusted EBITDA of $167.6 million, as presented in the non-GAAP
reconciliations below, and (ii) the twelve months ended
December 31, 2023 adjusted EBITDA of $320.4 million, as presented in the non-GAAP
reconciliations included in the Company's fourth quarter and full
year 2023 results press release dated February 29, 2024, less (iii) the six months
ended June 30, 2023 adjusted EBITDA of $159.0 million, as presented in the non-GAAP
reconciliations below.
Certain of the prior period non-GAAP financial measures
presented in the following tables have been adjusted to conform
with current period presentation. The following tables
reconcile the Company's non-GAAP financial measures (unaudited) to
their most directly comparable GAAP (unaudited) financial measures
(dollars in thousands unless otherwise noted, except per share
amounts):
|
Three Months
Ended
June 30,
|
|
Six Months
Ended
June 30,
|
Non-GAAP Operating
Income and Margin Reconciliations:
|
2024
|
|
2023
|
|
2024
|
|
2023
|
Operating
income
|
$
58,449
|
|
$
56,795
|
|
$
113,975
|
|
$
106,724
|
Restructuring and
related charges, net
|
320
|
|
1,043
|
|
2,177
|
|
5,015
|
Strategic planning
(credits) expenses
|
—
|
|
579
|
|
(109)
|
|
2,666
|
Customer insolvency
costs
|
—
|
|
—
|
|
1,522
|
|
—
|
Other
charges
|
1,046
|
|
344
|
|
1,492
|
|
649
|
Non-GAAP operating
income
|
$
59,815
|
|
$
58,761
|
|
$
119,057
|
|
$
115,054
|
Non-GAAP operating
margin (%)
|
12.9 %
|
|
11.9 %
|
|
12.8 %
|
|
11.6 %
|
EBITDA, Adjusted
EBITDA, Adjusted EBITDA Margin and Non-GAAP Net Income
Reconciliations:
|
Three Months
Ended
June 30,
|
|
Six Months
Ended
June 30,
|
2024
|
|
2023
|
|
2024
|
|
2023
|
Net income attributable
to Quaker Chemical Corporation
|
$
34,885
|
|
$
29,346
|
|
$
70,112
|
|
$
58,880
|
Depreciation and
amortization (a)
|
21,428
|
|
20,834
|
|
42,484
|
|
41,344
|
Interest expense,
net
|
10,754
|
|
12,721
|
|
21,578
|
|
25,963
|
Taxes on income before
equity in net income of associated companies (b)
|
15,778
|
|
13,830
|
|
28,286
|
|
23,363
|
EBITDA
|
82,845
|
|
76,731
|
|
162,460
|
|
149,550
|
Equity (income) loss in
a captive insurance company
|
(475)
|
|
430
|
|
(981)
|
|
8
|
Restructuring and
related charges, net
|
320
|
|
1,043
|
|
2,177
|
|
5,015
|
Strategic planning
expenses (credits)
|
—
|
|
579
|
|
(109)
|
|
2,666
|
Customer insolvency
costs
|
—
|
|
—
|
|
1,522
|
|
—
|
Facility remediation
recoveries
|
—
|
|
(187)
|
|
—
|
|
(1,014)
|
Product liability claim
costs
|
—
|
|
—
|
|
896
|
|
—
|
Currency conversion
impacts of hyper-inflationary economies
|
613
|
|
1,184
|
|
(291)
|
|
1,640
|
Other
charges
|
988
|
|
462
|
|
1,899
|
|
1,168
|
Adjusted
EBITDA
|
$
84,291
|
|
$
80,242
|
|
$
167,573
|
|
$
159,033
|
Adjusted EBITDA margin
(%)
|
18.2 %
|
|
16.2 %
|
|
18.0 %
|
|
16.0 %
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
$
84,291
|
|
$
80,242
|
|
$
167,573
|
|
$
159,033
|
Less: Depreciation and
amortization (a)
|
21,428
|
|
20,834
|
|
42,484
|
|
41,344
|
Less: Interest expense,
net
|
10,754
|
|
12,721
|
|
21,578
|
|
25,963
|
Less: Taxes on income
before equity in net income of associated companies - adjusted
(b)
|
13,877
|
|
11,913
|
|
27,606
|
|
22,960
|
Non-GAAP net
income
|
$
38,232
|
|
$
34,774
|
|
$
75,905
|
|
$
68,766
|
|
Three Months
Ended
June 30,
|
|
Six Months
Ended
June 30,
|
Non-GAAP Earnings
per Diluted Share Reconciliations:
|
2024
|
|
2023
|
|
2024
|
|
2023
|
GAAP earnings per
diluted share attributable to Quaker Chemical Corporation common
shareholders
|
$
1.94
|
|
$
1.63
|
|
$
3.89
|
|
$
3.27
|
Equity (income) loss in
a captive insurance company per diluted share
|
(0.02)
|
|
0.02
|
|
(0.05)
|
|
—
|
Restructuring and
related charges, net per diluted share
|
0.01
|
|
0.04
|
|
0.09
|
|
0.21
|
Strategic planning
(credits) expenses per diluted share
|
—
|
|
0.03
|
|
—
|
|
0.13
|
Customer insolvency
costs per diluted share
|
—
|
|
—
|
|
0.06
|
|
—
|
Facility remediation
recoveries per diluted share
|
—
|
|
(0.01)
|
|
—
|
|
(0.05)
|
Product liability claim
costs per diluted share
|
—
|
|
—
|
|
0.04
|
|
—
|
Currency conversion
impacts of hyper-inflationary economies per diluted
share
|
0.03
|
|
0.06
|
|
(0.02)
|
|
0.09
|
Other charges per
diluted share
|
0.04
|
|
0.02
|
|
0.08
|
|
0.04
|
Impact of certain
discrete tax items per diluted share
|
0.13
|
|
0.14
|
|
0.13
|
|
0.13
|
Non-GAAP earnings per
diluted share
|
$
2.13
|
|
$
1.93
|
|
$
4.22
|
|
$
3.82
|
|
|
a.
|
Depreciation and
amortization for the three and six months ended June 30, 2024 and
2023 includes approximately $0.2 million and $0.5 million,
respectively, of amortization expense recorded within equity in net
income of associated companies in the Company's Condensed
Consolidated Statements of Operations, which is attributable to the
amortization of the fair value step up for the Company's 50%
interest in a joint venture in Korea as a result of required
purchase accounting.
|
|
|
b.
|
Taxes on income before
equity in net income of associated companies – adjusted includes
the Company's tax expense adjusted for the impact of any current
and deferred income tax expense (benefit), as applicable, of the
reconciling items presented in the reconciliation of Net income
attributable to Quaker Chemical Corporation to adjusted EBITDA,
above, determined utilizing the applicable rates in the taxing
jurisdictions in which these adjustments occurred, subject to
deductibility. This caption also includes the impact of
specific tax charges and benefits in the six months ended June 30,
2024 and 2023, which the Company does not consider core to the
Company's operations or indicative of future
performance.
|
|
|
Segment Measures and Reconciliations
Segment operating earnings for each of the Company's reportable
segments are comprised of the segment's net sales less directly
related Cost of goods sold ("COGS") and Selling, general and
administrative expenses ("SG&A"). Operating expenses not
directly attributable to the net sales of each respective segment,
such as certain corporate and administrative costs and
Restructuring and related charges, net, are not included in segment
operating earnings. Other items not specifically identified with
the Company's reportable segments include Interest expense, net and
Other income (expense), net.
The following table presents information about the performance
of the Company's reportable segments (dollars in thousands):
|
Three Months
Ended
June 30,
|
|
Six Months
Ended
June 30,
|
|
2024
|
|
2023
|
|
2024
|
|
2023
|
Net
Sales
|
|
|
|
|
|
|
|
Americas
|
$
223,517
|
|
$
253,219
|
|
$
453,271
|
|
$
504,632
|
EMEA
|
138,001
|
|
143,533
|
|
276,423
|
|
$
295,982
|
Asia/Pacific
|
102,049
|
|
98,692
|
|
203,632
|
|
$
194,978
|
Total net
sales
|
$
463,567
|
|
$
495,444
|
|
$
933,326
|
|
$
995,592
|
Segment operating
earnings
|
|
|
|
|
|
|
|
Americas
|
$
64,137
|
|
$
69,007
|
|
$
130,906
|
|
$
135,132
|
EMEA
|
26,652
|
|
25,583
|
|
56,223
|
|
$
53,154
|
Asia/Pacific
|
31,000
|
|
27,989
|
|
61,377
|
|
$
55,641
|
Total segment
operating earnings
|
121,789
|
|
122,579
|
|
248,506
|
|
243,927
|
Restructuring and
related charges, net
|
(320)
|
|
(1,043)
|
|
(2,177)
|
|
(5,015)
|
Non-operating and
administrative expenses
|
(47,584)
|
|
(49,950)
|
|
(101,760)
|
|
(101,721)
|
Depreciation of
corporate assets and amortization
|
(15,436)
|
|
(14,791)
|
|
(30,594)
|
|
(30,467)
|
Operating
income
|
58,449
|
|
56,795
|
|
113,975
|
|
106,724
|
Other income (expense),
net
|
422
|
|
(3,606)
|
|
1,502
|
|
(5,845)
|
Interest expense,
net
|
(10,754)
|
|
(12,721)
|
|
(21,578)
|
|
(25,963)
|
Income before taxes
and equity in net income of associated companies
|
$
48,117
|
|
$
40,468
|
|
$
93,899
|
|
$
74,916
|
|
Forward-Looking Statements
This press release contains "forward-looking statements" that
fall under the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995 and the Securities Act of 1933, as
amended. These statements can be identified by the fact that
they do not relate strictly to historical or current facts.
We have based these forward-looking statements on assumptions,
projections and expectations about future events that we believe
are reasonable based on currently available information, including
statements regarding the potential effects of the conflicts in
Ukraine and the Middle East; inflation and global supply chain
constraints on the Company's business, results of operations, and
financial condition; our expectation that we will maintain
sufficient liquidity and remain in compliance with the terms of the
Company's credit facility; expectations about future demand and raw
material costs; and statements regarding the impact of increased
raw material costs and pricing initiatives. These
forward-looking statements include statements with respect to our
beliefs, plans, objectives, goals, expectations, anticipations,
intentions, financial condition, results of operations, future
performance, and business, which may differ materially from our
actual results, including but not limited to the potential benefits
of acquisitions and divestitures, the impacts on our business as a
result of global supply chain constraints, and our current and
future results and plans and statements that include the words
"may," "could," "should," "would," "believe," "expect,"
"anticipate," "estimate," "intend," "outlook, "target", "possible",
"potential", "plan" or similar expressions. A major risk is
that demand for the Company's products and services is largely
derived from the demand for its customers' products, which subjects
the Company to uncertainties related to downturns in a customer's
business and unanticipated customer production slowdowns and
shutdowns. Other major risks and uncertainties include, but
are not limited to inflationary pressures, including the potential
for continued significant increases in raw material costs; supply
chain disruptions; customer financial instability; high interest
rates and the possibility of economic recession; economic and
political disruptions particularly in light of numerous elections
globally and the possibility of regime changes, including the
impacts of the military conflicts between Russia and Ukraine and between Israel and Hamas; legislative and regulatory
developments including changes to existing laws and regulations, or
the way they are interpreted, applied or enforced; tariffs, trade
restrictions, and the economic and other sanctions imposed by other
nations on Russia and Belarus and/or other government organizations;
suspensions of activities in Russia by many multinational companies and the
potential expansion of military activity; foreign currency
fluctuations; significant changes in applicable tax rates and
regulations; future terrorist attacks and other acts of violence;
the impacts of consolidation in our industry, including loss or
consolidation of a major customer; and the potential occurrence of
cyber-security breaches, cyber-security attacks and other
technology outages and security incidents. Furthermore, the Company
is subject to the same business cycles as those experienced by our
customers in the steel, automobile, aircraft, industrial equipment,
aluminum and durable goods industries. Our forward-looking
statements are subject to risks, uncertainties and assumptions
about the Company and its operations that are subject to change
based on various important factors, some of which are beyond our
control. These risks, uncertainties, and possible inaccurate
assumptions relevant to our business could cause our actual results
to differ materially from expected and historical results.
All forward-looking statements included in this press release,
including expectations about business conditions during 2024 and
future periods, are based upon information available to the Company
as of the date of this press release, which may change.
Therefore, we caution you not to place undue reliance on our
forward-looking statements. For more information regarding these
risks and uncertainties as well as certain additional risks that we
face, refer to the Risk Factors section, which appears in Item 1A
of our Annual Report on Form 10-K for the year ended December 31, 2023, and in subsequent reports
filed from time to time with the Securities and Exchange
Commission. We do not intend to, and we disclaim any duty or
obligation to, update or revise any forward-looking statements to
reflect new information or future events or for any other reason.
This discussion is provided as permitted by the Private Securities
Litigation Reform Act of 1995.
Conference Call
As previously announced, the Company's investor conference call
to discuss its second quarter of 2024 performance is scheduled for
Tuesday, August 6, 2024 at
8:30 a.m. ET. A live webcast of
the conference call, together with supplemental information, can be
accessed through the Company's Investor Relations website at
investors.quakerhoughton.com. You can also access the
conference call by dialing 877-269-7756.
About Quaker Houghton
Quaker Houghton is the global leader in industrial process
fluids. With a presence around the world, including
operations in over 25 countries, our customers include thousands of
the world's most advanced and specialized steel, aluminum,
automotive, aerospace, offshore, container, mining, and
metalworking companies. Our high-performing, innovative and
sustainable solutions are backed by best-in-class technology, deep
process knowledge and customized services. With approximately
4,400 employees, including chemists, engineers and industry
experts, we partner with our customers to improve their operations
so they can run even more efficiently, even more effectively,
whatever comes next. Quaker Houghton is headquartered in
Conshohocken, Pennsylvania,
located near Philadelphia in the
United States. Visit quakerhoughton.com to learn
more.
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Three Months
Ended
June 30,
|
|
Six Months
Ended
June 30,
|
|
2024
|
|
2023
|
|
2024
|
|
2023
|
Net sales
|
$
463,567
|
|
$
495,444
|
|
$
933,326
|
|
$
995,592
|
Cost of goods
sold
|
287,849
|
|
317,753
|
|
576,045
|
|
644,451
|
Gross profit
|
175,718
|
|
177,691
|
|
357,281
|
|
351,141
|
Selling, general and
administrative expenses
|
116,949
|
|
119,853
|
|
241,129
|
|
239,402
|
Restructuring and
related charges, net
|
320
|
|
1,043
|
|
2,177
|
|
5,015
|
Operating
income
|
58,449
|
|
56,795
|
|
113,975
|
|
106,724
|
Other income (expense),
net
|
422
|
|
(3,606)
|
|
1,502
|
|
(5,845)
|
Interest expense,
net
|
(10,754)
|
|
(12,721)
|
|
(21,578)
|
|
(25,963)
|
Income before taxes and
equity in net income of associated companies
|
48,117
|
|
40,468
|
|
93,899
|
|
74,916
|
Taxes on income before
equity in net income of associated companies
|
15,778
|
|
13,830
|
|
28,286
|
|
23,363
|
Income before equity in
net income of associated companies
|
32,339
|
|
26,638
|
|
65,613
|
|
51,553
|
Equity in net income of
associated companies
|
2,571
|
|
2,755
|
|
4,555
|
|
7,381
|
Net income
|
34,910
|
|
29,393
|
|
70,168
|
|
58,934
|
Less: Net income
attributable to noncontrolling interest
|
25
|
|
47
|
|
56
|
|
54
|
Net income attributable
to Quaker Chemical Corporation
|
$
34,885
|
|
$
29,346
|
|
$
70,112
|
|
$
58,880
|
Per share
data:
|
|
|
|
|
|
|
|
Net income attributable
to Quaker Chemical Corporation common shareholders –
basic
|
$
1.94
|
|
$
1.63
|
|
$
3.90
|
|
$
3.28
|
Net income attributable
to Quaker Chemical Corporation common shareholders –
diluted
|
$
1.94
|
|
$
1.63
|
|
$
3.89
|
|
$
3.27
|
Basic weighted average
common shares outstanding
|
17,921,395
|
|
17,892,444
|
|
17,915,104
|
|
17,879,629
|
Diluted weighted
average common shares outstanding
|
17,940,156
|
|
17,921,414
|
|
17,934,950
|
|
17,909,906
|
|
June 30,
2024
|
|
December 31,
2023
|
ASSETS
|
|
|
|
Current
assets
|
|
|
|
Cash and cash
equivalents
|
$
188,568
|
|
$
194,527
|
Accounts receivable,
net
|
423,906
|
|
444,950
|
Inventories,
net
|
239,141
|
|
233,857
|
Prepaid expenses and
other current assets
|
67,485
|
|
54,555
|
Total current
assets
|
919,100
|
|
927,889
|
|
|
|
|
Property, plant and
equipment, net
|
200,823
|
|
207,811
|
Right-of-use lease
assets
|
36,693
|
|
38,614
|
Goodwill
|
517,582
|
|
512,518
|
Other intangible
assets, net
|
866,167
|
|
896,721
|
Investments in
associated companies
|
96,090
|
|
101,151
|
Deferred tax
assets
|
12,903
|
|
10,737
|
Other non-current
assets
|
22,834
|
|
18,770
|
Total
assets
|
$
2,672,192
|
|
$ 2,714,211
|
|
|
|
|
LIABILITIES AND
EQUITY
|
|
|
|
Current
liabilities
|
|
|
|
Short-term borrowings
and current portion of long-term debt
|
$
32,448
|
|
$
23,444
|
Accounts
payable
|
185,351
|
|
184,813
|
Dividends
payable
|
8,163
|
|
8,186
|
Accrued
compensation
|
31,595
|
|
55,194
|
Accrued
restructuring
|
1,048
|
|
3,350
|
Accrued pension and
postretirement benefits
|
2,191
|
|
2,208
|
Other accrued
liabilities
|
89,281
|
|
90,315
|
Total current
liabilities
|
350,077
|
|
367,510
|
|
|
|
|
Long-term
debt
|
703,655
|
|
730,623
|
Long-term lease
liabilities
|
21,671
|
|
22,937
|
Deferred tax
liabilities
|
147,100
|
|
146,957
|
Non-current accrued
pension and postretirement benefits
|
28,109
|
|
29,457
|
Other non-current
liabilities
|
25,974
|
|
31,805
|
Total
liabilities
|
1,276,586
|
|
1,329,289
|
|
|
|
|
Equity
|
|
|
|
Common stock $1 par
value; authorized 30,000,000 shares; issued and
outstanding
March 31, 2024 – 17,940,532 shares; December 31, 2023 –
17,991,988 shares
|
17,941
|
|
17,992
|
Capital in excess of
par value
|
938,436
|
|
940,101
|
Retained
earnings
|
604,404
|
|
550,641
|
Accumulated other
comprehensive loss
|
(165,762)
|
|
(124,415)
|
Total Quaker
shareholders' equity
|
1,395,019
|
|
1,384,319
|
Noncontrolling
interest
|
587
|
|
603
|
Total
equity
|
1,395,606
|
|
1,384,922
|
Total liabilities and
equity
|
$
2,672,192
|
|
$ 2,714,211
|
|
Six Months
Ended
June 30,
|
|
2024
|
|
2023
|
Cash flows from
operating activities
|
|
|
|
Net income
|
$
70,168
|
|
$
58,934
|
Adjustments to
reconcile net income to net cash used in operating
activities:
|
|
|
|
Amortization of debt
issuance costs
|
706
|
|
706
|
Depreciation and
amortization
|
41,984
|
|
40,824
|
Equity in
undistributed earnings of associated companies, net of
dividends
|
(4,221)
|
|
(4,207)
|
Deferred compensation,
deferred taxes and other, net
|
(647)
|
|
154
|
Share-based
compensation
|
8,128
|
|
7,414
|
Restructuring and
related charges, net
|
2,177
|
|
5,015
|
Pension and other
postretirement benefits
|
(994)
|
|
(308)
|
(Decrease) increase in
cash from changes in current assets and current liabilities, net of
acquisitions:
|
|
|
|
Accounts
receivable
|
10,483
|
|
22,017
|
Inventories
|
(9,141)
|
|
11,750
|
Prepaid expenses and
other current assets
|
(15,646)
|
|
(8,925)
|
Accrued
restructuring
|
(4,442)
|
|
(5,410)
|
Accounts payable and
accrued liabilities
|
(25,021)
|
|
(11,912)
|
Net cash provided by
operating activities
|
73,534
|
|
116,052
|
Cash flows from
investing activities
|
|
|
|
Investments in
property, plant and equipment
|
(11,124)
|
|
(17,040)
|
Payments related to
acquisitions, net of cash acquired
|
(24,899)
|
|
—
|
Proceeds from
disposition of assets
|
2,798
|
|
—
|
Net cash used in
investing activities
|
(33,225)
|
|
(17,040)
|
Cash flows from
financing activities
|
|
|
|
Payments of long-term
debt
|
(34,169)
|
|
(9,439)
|
Borrowings (payments)
on revolving credit facilities, net
|
20,533
|
|
(62,778)
|
Payments on other
debt, net
|
(37)
|
|
(456)
|
Dividends
paid
|
(16,372)
|
|
(15,631)
|
Shares purchased under
share repurchase programs
|
(7,760)
|
|
—
|
Other stock related
activity
|
(1,492)
|
|
(712)
|
Net cash provided by
(used in) financing activities
|
(39,297)
|
|
(89,016)
|
Effect of foreign
exchange rate changes on cash
|
(6,971)
|
|
(1,554)
|
Net (decrease) increase
in cash and cash equivalents
|
(5,959)
|
|
8,442
|
Cash and cash
equivalents at the beginning of the period
|
194,527
|
|
180,963
|
Cash and cash
equivalents at the end of the period
|
$
188,568
|
|
$
189,405
|
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SOURCE Quaker Chemical Corporation