QUAKER HOUGHTON ANNOUNCES THIRD QUARTER 2024 RESULTS

• Q3’24 internet gross sales of $462.3 million, internet source of revenue of $32.3 million and income in keeping with diluted percentage of $1.81
• Q3’24 non-GAAP internet source of revenue of $34.0 million and non-GAAP income in keeping with diluted percentage of $1.89
• Delivered adjusted EBITDA and changed EBITDA margins of $78.6 million and 17.0% respectively in Q3’24
• Generated $141.5 million of working money tide YTD; Web leverage ratio of one.6x

CONSHOHOCKEN, Pa., Oct. 31, 2024 /PRNewswire/ — Quaker Houghton (“the Company”) (NYSE: KWR), the worldwide chief in business procedure fluids, introduced its 3rd quarter 2024 effects nowadays. 

3rd Quarter 2024 Consolidated Effects

Web gross sales within the 3rd quarter of 2024 had been $462.3 million, a abate of roughly 6% in comparison to $490.6 million within the 3rd quarter of 2023. This consequence was once because of a trim in promoting value and product combine of roughly 4%, which is basically due to the affect of index founded buyer word of honour, a abate in gross sales volumes of roughly 1% basically reflecting a continuation of sentimental finish marketplace situations, partly offset via unused industry wins, and an damaging affect from foreign currencies translation of one%.

The Corporate reported internet source of revenue within the 3rd quarter of 2024 of $32.3 million, or $1.81 in keeping with diluted percentage, in comparison to internet source of revenue of $33.7 million, or $1.87 in keeping with diluted percentage, within the 3rd quarter of 2023. Apart from non-recurring and non-core pieces in each and every duration, the Corporate’s non-GAAP internet source of revenue and income in keeping with diluted percentage had been $34.0 million and $1.89 respectively within the 3rd quarter of 2024 in comparison to $36.9 million and $2.05 respectively within the prior 12 months. The Corporate generated adjusted EBITDA of $78.6 million within the 3rd quarter of 2024, a trim of seven% in comparison to $84.4 million within the 3rd quarter of 2023, basically pushed via the abate in internet gross sales as discussed above.

Andy Tometich, Important Govt Officer and President, commented, “The 3rd quarter as soon as once more highlighted the resilience of Quaker Houghton. Pace finish marketplace situations softened in comparison to the second one quarter of 2024, our volumes remained constant, pushed via unused industry wins throughout our portfolio. We proceed to accomplish neatly on our monetary and operational priorities. Our branch working margins have progressed year-to-date, as we simplify our portfolio, and stay disciplined with our prices and investments, balancing our long-term targets with the near-term marketplace state.

“Looking ahead, we anticipate the current difficult market conditions will likely persist through the end of the year. Our focus remains on executing on what we can control, driving efficiencies and productivity for our Company and our customers. We are confident in the long-term positive fundamentals of the industry we serve and will further advance our enterprise strategy. Our investments will strengthen our ability to continue to deliver above market growth, especially as end markets recover. Additionally, our balance sheet and cash generation remain strong, providing avenues to accelerate our growth and enhance shareholder value.”

3rd Quarter 2024 Section Effects

The Corporate’s 3rd quarter 2024 working efficiency for each and every of its 3 reportable sections: (i) Americas; (ii) EMEA; and (iii) Asia/Pacific, is additional described underneath. 

Web gross sales within the Asia/Pacific branch higher within the 3rd quarter of 2024 in comparison to the similar duration in 2023 because of an build up in gross sales volumes and a good affect of foreign currencies translation, partly offset via a abate in promoting value and product combine. Web gross sales within the Americas branch declined within the 3rd quarter of 2024 in comparison to the similar duration in 2023 because of a abate in gross sales volumes and promoting value and product combine, and an damaging affect of foreign currencies translation. Web gross sales within the EMEA branch declined within the 3rd quarter of 2024 in comparison to the similar duration in 2023 because of a abate in promoting value and product combine, partly offset via an build up in gross sales volumes and a good affect of foreign currencies translation.

The abate in promoting value and product combine within the 3rd quarter of 2024 in comparison to the similar duration in 2023 basically displays the affect of our index-based buyer word of honour. Gross sales volumes higher within the Asia/Pacific branch basically because of persevered unused industry wins and a tiny growth in marketplace situations. The Americas and EMEA sections proceed to be impacted via a continuation of softer finish marketplace situations, for steel and metalworking packages, in comparison to the prior 12 months, partly offset via unused industry wins.

In comparison to the second one quarter of 2024, internet gross sales within the Americas and EMEA sections declined because of decrease gross sales volumes, reflecting persevered and extensive finish marketplace demanding situations, in particular for car and business packages. Web gross sales within the Asia/Pacific branch higher in comparison to the second one quarter of 2024, basically because of an build up in gross sales volumes, pushed via unused industry wins, partly offset via a abate in promoting value and product combine. The affect of foreign currencies translation was once favorable to the EMEA and Asia/Pacific sections and damaging within the Americas branch, in comparison to the prior quarter.

Working income reduced in all sections within the 3rd quarter of 2024 in comparison to the prior 12 months. Section working margins higher within the Americas branch and declined within the EMEA and Asia/Pacific sections within the 3rd quarter of 2024 in comparison to the prior 12 months. Working income and working margins declined in all sections within the 3rd quarter of 2024 in comparison to the second one quarter of 2024.

Money Wave and Liquidity Highlights

Web money supplied via working actions was once $141.5 million for the 9 months ended September 30, 2024, in comparison to internet money supplied via working actions of $199.5 million for a similar duration in 2023.  The Corporate’s working money tide displays upper outflows to charity ongoing running capital necessities. 

As of September 30, 2024, the Corporate’s general improper debt was once $740.6 million and its money and money equivalents was once $212.1 million, which led to internet debt of roughly $528.6 million. The Corporate’s internet debt divided via its trailing 12 months adjusted EBITDA was once roughly 1.6x. Within the 3rd quarter of 2024, the Corporate repurchased 89,088 stocks for about $14.6 million and 138,000 stocks for about $22.9 million within the 9 months ended September 30, 2024.

Non-GAAP Measures and Reconciliations

The tips incorporated on this press let fall contains non-GAAP (unaudited) monetary data that comes with EBITDA, adjusted EBITDA, adjusted EBITDA margin, non-GAAP working source of revenue, non-GAAP working margin, taxes on source of revenue earlier than fairness in internet source of revenue of related corporations – adjusted, non-GAAP internet source of revenue and non-GAAP income in keeping with diluted percentage. The Corporate believes those non-GAAP monetary measures grant significant supplemental data as they support a reader’s working out of the Corporate’s monetary efficiency and facilitate a comparability amongst fiscal sessions, because the non-GAAP monetary measures exclude pieces that aren’t indicative of past working efficiency or no longer regarded as core to the Corporate’s operations. Non-GAAP effects are introduced for supplemental informational functions handiest and must no longer be regarded as an alternative to the monetary data introduced according to GAAP. As well as, our definitions of EBITDA, adjusted EBITDA, adjusted EBITDA margin, non-GAAP working source of revenue, non-GAAP working margin, taxes on source of revenue earlier than fairness in internet source of revenue of related corporations – adjusted, non-GAAP internet source of revenue and non-GAAP income in keeping with diluted percentage as mentioned and reconciled underneath to essentially the most related respective GAAP measures, will not be related to in a similar fashion named measures reported via alternative corporations. 

The Corporate items EBITDA which is calculated as internet source of revenue due to the Corporate earlier than depreciation and amortization, hobby expense, internet, and taxes on source of revenue earlier than fairness in internet source of revenue of related corporations. The Corporate additionally items adjusted EBITDA which is calculated as EBITDA plus or minus positive pieces that aren’t indicative of past working efficiency or no longer regarded as core to the Corporate’s operations. As well as, the Corporate items non-GAAP working source of revenue which is calculated as working source of revenue plus or minus positive pieces that aren’t regarded as indicative of past working efficiency or no longer regarded as core to the Corporate’s operations. Adjusted EBITDA margin and non-GAAP working margin are calculated as the proportion of adjusted EBITDA and non-GAAP working source of revenue to consolidated internet gross sales, respectively. The Corporate believes those non-GAAP measures grant clear and helpful data and are broadly old via traders, analysts, and friends in our business in addition to via control in assessing the working efficiency of the Corporate on a constant foundation. 

Moreover, the Corporate items non-GAAP internet source of revenue and non-GAAP income in keeping with diluted percentage as supplementary efficiency measures. Non-GAAP internet source of revenue is calculated as adjusted EBITDA, outlined above, much less depreciation and amortization, hobby expense, internet, and taxes on source of revenue earlier than fairness in internet source of revenue of related corporations, in each and every case adjusted, as acceptable, for any depreciation, amortization, hobby or tax affects attributable to the non-core pieces recognized within the reconciliation of internet source of revenue due to the Corporate to adjusted EBITDA. Non-GAAP income in keeping with diluted percentage is calculated as non-GAAP internet source of revenue in keeping with diluted percentage as accounted for less than the “two-class share method.” The Corporate believes that non-GAAP internet source of revenue and non-GAAP income in keeping with diluted percentage grant clear and helpful data and are broadly old via traders, analysts, and friends in our business in addition to via control in assessing the working efficiency of the Corporate on a constant foundation. 

Because it pertains to past projections for the Corporate in addition to alternative forward-looking data contained on this press let fall, the Corporate has no longer supplied steerage for related GAAP measures or a quantitative reconciliation of forward-looking non-GAAP monetary measures to essentially the most immediately related U.S. GAAP measure as a result of it’s not able to resolve with affordable walk in the park the latter result of positive vital pieces essential to calculate such measures with out unreasonable try. This stuff come with, however aren’t restricted to, positive non-recurring or non-core pieces the Corporate might report that would materially affect internet source of revenue. This stuff are unsure, rely on numerous components, and will have a subject matter affect at the U.S. GAAP reported effects for the steerage duration. 

The Corporate’s connection with trailing 12 months adjusted EBITDA inside this press let fall refers back to the twelve time duration ended September 30, 2024 adjusted EBITDA of $323.1 million, which is composed of (i) the 9 months ended September 30, 2024 adjusted EBITDA of $246.1 million, as introduced within the non-GAAP reconciliations underneath, and (ii) the 12 months ended December 31, 2023 adjusted EBITDA of $320.4 million, as introduced within the non-GAAP reconciliations incorporated within the Corporate’s fourth quarter and whole 12 months 2023 effects press let fall dated February 29, 2024, much less (iii) the 9 months ended September 30, 2023 adjusted EBITDA of $243.4 million, as introduced within the non-GAAP reconciliations underneath. 

Sure of the prior duration non-GAAP monetary measures introduced in please see tables were adjusted to evolve with latest duration presentation. Refer to tables reconcile the Corporate’s non-GAAP monetary measures (unaudited) to their maximum immediately related GAAP (unaudited) monetary measures (greenbacks in hundreds except differently famous, with the exception of in keeping with percentage quantities):

Section Measures and Reconciliations

Section working income for each and every of the Corporate’s reportable sections are created from the branch’s internet gross sales much less immediately similar Price of products bought (“COGS”) and Promoting, common and administrative bills (“SG&A”). Working bills indirectly due to the online gross sales of each and every respective branch, equivalent to positive company and administrative prices and Restructuring and similar fees, internet, aren’t incorporated in branch working income. Alternative pieces no longer particularly recognized with the Corporate’s reportable sections come with Pastime expense, internet and Alternative source of revenue (expense), internet. 

Refer to desk items details about the efficiency of the Corporate’s reportable sections (greenbacks in hundreds):

Ahead-Taking a look Statements

This press let fall comprises “forward-looking statements” that fall underneath the defend harbor provisions of the Non-public Securities Litigation Reform Operate of 1995 and the Securities Operate of 1933, as amended. Those statements may also be recognized via the truth that they don’t relate strictly to historic or latest information. Now we have founded those forward-looking statements on guesses, projections and expectancies about past occasions that we consider are affordable in accordance with recently to be had data, together with statements in regards to the doable results of the conflicts in Ukraine and the Heart East; inflation and world provide chain constraints at the Corporate’s industry, result of operations, and fiscal status; our expectation that we will be able to conserve adequate liquidity and stay in compliance with the phrases of the Corporate’s credit score facility; expectancies about past call for and uncooked subject matter prices; and statements in regards to the affect of higher uncooked subject matter prices and pricing tasks. Those forward-looking statements come with statements with admire to our ideals, plans, targets, targets, expectancies, anticipations, intentions, monetary status, result of operations, past efficiency, and industry, which might range materially from our unedited effects, together with however no longer restricted to the possible advantages of acquisitions and divestitures, the affects on our industry on account of world provide chain constraints, and our latest and past effects and plans and statements that come with the phrases “may,” “could,” “should,” “would,” “believe,” “expect,” “anticipate,” “estimate,” “intend,” “outlook, “goal”, “imaginable”, “doable”, “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 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 in the Middle East; 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 next experiences filed from year to year with the Securities and Change Fee. We don’t intend to, and we abjure any accountability or legal responsibility to, replace or revise any forward-looking statements to replicate unused data or past occasions or for any alternative reason why. This dialogue is equipped as accepted via the Non-public Securities Litigation Reform Operate of 1995. 

Convention Name

As up to now introduced, the Corporate’s investor convention name to talk about its 3rd quarter of 2024 efficiency is scheduled for Friday, November 1, 2024 at 8:30 a.m. ET. A are living webcast of the convention name, along with supplemental data, may also be accessed in the course of the Corporate’s Investor Family members website online at traders.quakerhoughton.com. You’ll additionally get admission to the convention name via dialing 877-269-7756. 

About Quaker Houghton

Quaker Houghton is the worldwide chief in business procedure fluids. With a presence world wide, together with operations in over 25 nations, our consumers come with hundreds of the sector’s maximum complex and specialised metal, aluminum, car, aerospace, offshore, container, mining, and metalworking corporations. Our high-performing, leading edge and sustainable answers are sponsored via best-in-class era, deep procedure wisdom and custom designed products and services. With roughly 4,400 workers, together with chemists, engineers and business mavens, we spouse with our consumers to support their operations so they are able to run much more successfully, much more successfully, no matter comes nearest. Quaker Houghton is headquartered in Conshohocken, Pennsylvania, positioned close to Philadelphia in the USA. Talk over with quakerhoughton.com to be informed extra. 

SOURCE Quaker Chemical Company

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