- Record net sales of $500.1
million in Q1'23, an increase of 5% compared to Q1'22 driven
by value-based pricing initiatives
- Q1'23 net income of $29.5 million
and earnings per diluted share of $1.64
- Q1'23 non-GAAP net income of $34.0
million and non-GAAP earnings per diluted share of
$1.89
- Delivered adjusted EBITDA of $78.8
million in Q1'23, a 30% increase compared to $60.4 million in Q1'22
- Generated $37.8 million of
operating cash flow in Q1'23; net debt to adjusted EBITDA improved
to 2.7x
CONSHOHOCKEN, Pa., May 4, 2023
/PRNewswire/ -- Quaker Houghton ("the Company") (NYSE: KWR), the
global leader in industrial process fluids, today announced its
first quarter 2023 results.
|
Three Months
Ended
March 31,
|
($ in thousands,
except per share data)
|
2023
|
|
2022
|
Net sales
|
$
500,148
|
|
$
474,171
|
Net income attributable
to Quaker Chemical Corporation
|
29,534
|
|
19,816
|
Net income attributable
to Quaker Chemical Corporation common shareholders –
diluted
|
1.64
|
|
1.11
|
Non-GAAP net income
*
|
33,992
|
|
25,470
|
Non-GAAP Earnings per
diluted share *
|
1.89
|
|
1.42
|
Adjusted EBITDA
*
|
78,791
|
|
60,444
|
|
* Refer to the
Non-GAAP Measures and Reconciliations section below for additional
information
|
First Quarter 2023 Consolidated Results
First quarter of 2023 net sales were a record $500.1 million, an increase of 5% compared to
$474.2 million in the first quarter
of 2022 primarily due to an increase in selling price and product
mix of approximately 19% partially offset by an 11% decrease in
sales volumes and a 3% unfavorable impact from foreign currency
translation. selli The increase in selling price and product mix
was primarily attributable to double-digit increases in selling
prices in all segments to offset the significant inflationary
pressures on the business. The decline in sales volumes was
primarily attributable to a continuation of softer market
conditions, especially in Asia/Pacific and EMEA, and the impact of the
war in Ukraine.
The Company reported net income in the first quarter of 2023 of
$29.5 million, or $1.64 per diluted share, compared to net income
of $19.8 million or $1.11 per diluted share in the first quarter of
2022. Excluding non-recurring and non-core items in each
period, the Company's first quarter of 2023 non-GAAP net income and
earnings per diluted share were $34.0
million and $1.89 respectively
compared to $25.5 million and
$1.42 respectively in the prior year
quarter. The Company generated adjusted EBITDA of $78.8 million in the first quarter of 2023, an
increase of 30% compared to $60.4
million in the first quarter of 2022, primarily due to an
increase in net sales and a recovery in gross margins compared to
the prior year quarter.
Andy Tometich, Chief Executive
Officer and President, commented, "The first quarter was a strong
start to the year for Quaker Houghton, as we continued to execute
on our key financial and operational priorities. We achieved
record net sales, continued margin recovery, a double-digit
improvement in earnings and generated solid cash flow. Our
results underscore the resilience of our people and our portfolio
and the commitment to strengthening our business to continue to
deliver profitable growth ahead of the market.
"We are encouraged by our results in the first quarter despite
the complexities and uncertainties in the current operating
environment, which are likely to persist as we progress through
2023. We will continue to prioritize investments in our strategic
initiatives to increase customer solutions, lead in sustainability
and enhance our differentiated customer intimate model. We
believe these actions, and our commitment to a recovery in margins
and cash flow generation, will best position the Company for
long-term success."
First Quarter 2023 Segment Results
During the first quarter of 2023, the Company reorganized its
executive management team to align with its new business structure.
The Company's new structure includes three reportable segments: (i)
Americas; (ii) EMEA; and (iii) Asia/Pacific. Prior to the Company's
reorganization, the Company's historical reportable segments were:
(i) Americas; (ii) EMEA; (iii) Asia/Pacific; and (iv) Global Specialty
Businesses. Prior period information has been recast to align with
the Company's business structure as of January 1, 2023.
The Company's first quarter of 2023 operating performance of
each of its three reportable segments, (i) Americas; (ii) EMEA; and
(iii) Asia/Pacific, are further
described below.
|
Three Months
Ended
March 31,
|
|
2023
|
|
2022
|
Net Sales
*
|
|
|
|
Americas
|
$
251,413
|
|
$
212,091
|
EMEA
|
152,449
|
|
146,819
|
Asia/Pacific
|
96,286
|
|
115,261
|
Total net
sales
|
$
500,148
|
|
$
474,171
|
Segment operating
earnings *
|
|
|
|
Americas
|
$
66,125
|
|
$
45,022
|
EMEA
|
27,571
|
|
23,247
|
Asia/Pacific
|
27,652
|
|
24,501
|
Total segment
operating earnings
|
$
121,348
|
|
$
92,770
|
|
* Refer to the
Segment Measures and Reconciliations section below for additional
information
|
In the first quarter of 2023, the Americas segment once again
delivered double-digit year-over-year net sales growth driven by
increases in selling price and product mix, partially offset by a
modest decline in sales volumes primarily related to softer market
conditions. Net sales growth in the EMEA segment was
similarly a result of double-digit increases in selling price and
product mix, partially offset by a decline in sales volumes
primarily due to the ongoing war in Ukraine, softer market conditions and the
wind-down of the tolling agreement for products previously divested
related to the Quaker Houghton combination, and a headwind from
foreign currency translation. Net sales in the Asia/Pacific segment declined compared to the
prior year quarter as a decline in sales volumes, driven by softer
market conditions and our value based pricing actions, and a
headwind from foreign currency translation offset double-digit
increases in selling price and product mix. Compared to the fourth
quarter of 2022, net sales and sales volumes increased in the
Americas and EMEA segment but declined in Asia/Pacific.
Operating earnings increased in all three segments in the first
quarter of 2023 compared to the prior year, primarily driven by an
improvement in operating margins in all segments and partially
offset by continued inflationary pressures on our business and the
ongoing war in Ukraine on our EMEA
segment. All segments also delivered an improvement in operating
margins compared to the fourth quarter of 2022.
Cash Flow and Liquidity Highlights
Net cash provided by operating activities was $37.8 million in the first quarter of 2023
compared to net cash used in operating activities of $6.3 million in the first quarter of 2022.
The improvement in net operating cash flow primarily reflects an
improved operating performance and working capital management in
the first quarter of 2023 compared to the first quarter of
2022.
As of March 31, 2023, the Company's total gross debt was
$942.8 million, and its cash and cash
equivalents was $189.9 million, which
resulted in net debt of approximately $752.9
million. The Company's net debt divided by its
trailing twelve months adjusted EBITDA was approximately 2.7x.
In order to manage the Company's exposure to variable interest
rate risk associated with the Credit Facility, in the first quarter
of 2023, the Company entered into $300.0
million notional amounts of three-year interest rate swaps
to convert a portion of the Company's variable rate borrowings into
an average fixed rate obligation.
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, 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 financial performance of
the Company, are indicative of future operating performance of the
Company, 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, 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 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
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 described further above, 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, as well
as the impact of COVID-19. 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 March 31, 2023 adjusted EBITDA of $275.5 million, which includes (i) the three
months ended March 31, 2023 adjusted EBITDA of $78.8 million, as presented in the non-GAAP
reconciliations below, and (ii) the twelve months ended
December 31, 2022 adjusted EBITDA of $257.2 million, as presented in the non-GAAP
reconciliations included in the Company's fourth quarter and full
year 2022 results press release dated February 23, 2023, less (iii) the three months
ended March 31, 2022 adjusted EBITDA of $60.4 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
March 31,
|
Non-GAAP Operating
Income and Margin Reconciliations:
|
2023
|
|
2022
|
Operating
income
|
$
49,929
|
|
$
29,403
|
Combination,
integration and other acquisition-related expenses
|
—
|
|
4,053
|
Restructuring and
related charges, net
|
3,972
|
|
820
|
Strategic planning
expenses
|
2,087
|
|
3,088
|
Russia-Ukraine conflict
related expenses
|
—
|
|
1,166
|
Other
charges
|
305
|
|
631
|
Non-GAAP operating
income
|
$
56,293
|
|
$
39,161
|
Non-GAAP operating
margin (%)
|
11.3 %
|
|
8.3 %
|
|
EBITDA, Adjusted
EBITDA, Adjusted EBITDA Margin and Non-GAAP Net Income
Reconciliations:
|
Three Months
Ended
March 31,
|
2023
|
|
2022
|
Net income attributable
to Quaker Chemical Corporation
|
$
29,534
|
|
$
19,816
|
Depreciation and
amortization (a)(b)
|
20,510
|
|
20,727
|
Interest expense,
net
|
13,242
|
|
5,345
|
Taxes on income before
equity in net income of associated companies (c)
|
9,533
|
|
2,866
|
EBITDA
|
72,819
|
|
48,754
|
Equity (income) loss in
a captive insurance company
|
(422)
|
|
244
|
Combination,
integration and other acquisition-related expenses (a)
|
—
|
|
6,032
|
Restructuring and
related charges, net
|
3,972
|
|
820
|
Strategic planning
expenses
|
2,087
|
|
3,088
|
Russia-Ukraine conflict
related expenses
|
—
|
|
1,166
|
Other
charges
|
335
|
|
340
|
Adjusted
EBITDA
|
$
78,791
|
|
$
60,444
|
Adjusted EBITDA margin
(%)
|
15.8 %
|
|
12.7 %
|
|
|
|
|
Adjusted
EBITDA
|
$
78,791
|
|
$
60,444
|
Less: Depreciation and
amortization - adjusted (a)(b)
|
20,510
|
|
20,727
|
Less: Interest expense,
net
|
13,242
|
|
5,345
|
Less: Taxes on income
before equity in net income of associated companies - adjusted
(c)
|
11,047
|
|
8,902
|
Non-GAAP net
income
|
$
33,992
|
|
$
25,470
|
|
|
Three Months
Ended
March 31,
|
Non-GAAP Earnings
per Diluted Share Reconciliations:
|
2023
|
|
2022
|
GAAP earnings per
diluted share attributable to Quaker Chemical Corporation
common
shareholders
|
$
1.64
|
|
$
1.11
|
Equity (income) loss in
a captive insurance company per diluted share
|
(0.02)
|
|
0.01
|
Combination,
integration and other acquisition-related expenses per diluted
share (a)
|
—
|
|
0.25
|
Restructuring and
related charges, net per diluted share
|
0.17
|
|
0.03
|
Strategic planning
expenses per diluted share
|
0.10
|
|
0.14
|
Russia-Ukraine conflict
related expenses per diluted share
|
—
|
|
0.06
|
Other charges per
diluted share
|
0.01
|
|
0.01
|
Impact of certain
discrete tax items per diluted share
|
(0.01)
|
|
(0.19)
|
Non-GAAP earnings per
diluted share
|
$
1.89
|
|
$
1.42
|
|
|
(a)
|
Combination,
integration and other acquisition-related expenses include certain
legal, financial, and other advisory and consultant costs incurred
in connection with the Combination integration activities. These
amounts also include expense associated with the Company's other
recent acquisitions, including certain legal, financial, and other
advisory and consultant costs incurred in connection with due
diligence. During the three months ended March 31, 2022, the
Company recorded $2.0 million of other expense related to
indemnification assets. These amounts were recorded within
Other expense, net and therefore are included in the caption
"Combination, integration and other acquisition-related expenses"
in the reconciliation of Net income attributable to Quaker Chemical
Corporation to Adjusted EBITDA and GAAP earnings per diluted share
attributable to Quaker Chemical Corporation common shareholders to
Non-GAAP earnings per diluted share, however it is excluded in the
reconciliation of Operating income to Non-GAAP operating
income.
|
(b)
|
Depreciation and
amortization for both the three months ended March 31, 2023 and
2022 include approximately $0.3 million of amortization expense
recorded within equity in net income of associated companies in the
Condensed Consolidated Statement of Income, 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.
|
(c)
|
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 three months ended March 31, 2023
and 2022, 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, Combination,
integration and other acquisition-related expenses, and
Restructuring and related charges, are not included in segment
operating earnings. Other items not specifically identified with
the Company's reportable segments include Interest expense, net and
Other expense, net.
The following table presents information about the performance
of the Company's reportable segments (dollars in thousands):
|
Three Months
Ended
March 31,
|
|
2023
|
|
2022
|
Net
Sales
|
|
|
|
Americas
|
$
251,413
|
|
$
212,091
|
EMEA
|
152,449
|
|
146,819
|
Asia/Pacific
|
96,286
|
|
115,261
|
Total net
sales
|
$
500,148
|
|
$
474,171
|
Segment operating
earnings
|
|
|
|
Americas
|
$
66,125
|
|
$
45,022
|
EMEA
|
27,571
|
|
23,247
|
Asia/Pacific
|
27,652
|
|
24,501
|
Total segment
operating earnings
|
121,348
|
|
92,770
|
Combination,
integration and other acquisition-related expenses
|
—
|
|
(4,053)
|
Restructuring and
related charges
|
(3,972)
|
|
(820)
|
Non-operating and
administrative expenses
|
(51,771)
|
|
(43,305)
|
Depreciation of
corporate assets and amortization
|
(15,676)
|
|
(15,189)
|
Operating
income
|
49,929
|
|
29,403
|
Other expense,
net
|
(2,239)
|
|
(2,206)
|
Interest expense,
net
|
(13,242)
|
|
(5,345)
|
Income before taxes
and equity in net income of associated companies
|
$
34,448
|
|
$
21,852
|
Forward-Looking Statements
This press release contains "forward-looking statements" within
the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, 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, including
statements regarding the potential effects of the COVID-19
pandemic, the Russia and
Ukraine conflict, inflation, bank
failures, higher interest rate environment, global supply chain
constraints on the Company's business, results of operations, and
financial condition, our expectations that we will maintain
sufficient liquidity, 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, on our
current expectations about future events. 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, including but not limited to the
potential benefits of the Combination and other acquisitions, the
impacts on our business as a result of the COVID-19 pandemic and
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," "plan" or similar expressions. These
forward-looking statements are subject to certain risks and
uncertainties that could cause actual results to differ materially
from those projected in such statements. 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, including as is currently being experienced by many
automotive industry companies as a result of supply chain
disruptions. Other major risks and uncertainties include, but
are not limited to, the primary and secondary impacts of the
COVID-19 pandemic, including actions taken in response to the
pandemic by various governments, which could exacerbate some or all
of the other risks and uncertainties faced by the Company, as well
as inflationary pressures, including the potential for significant
increases in raw material costs, supply chain disruptions, customer
financial instability, rising interest rates and the potential of
economic recession, worldwide economic and political disruptions,
including the impacts of the military conflict between Russia and Ukraine, the economic and other sanctions
imposed by other nations on Russia, 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. Furthermore, the Company is subject to the same business
cycles as those experienced by our customers in the steel,
automobile, aircraft, industrial equipment, 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 2023 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, 2022, 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 first quarter of 2023 performance is scheduled
for Friday, May 5, 2023 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 4,600
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.
Quaker Chemical
Corporation
|
Condensed
Consolidated Statements of Operations
|
(Unaudited;
Dollars in thousands, except per share data)
|
|
|
Three Months
Ended
March 31,
|
|
2023
|
|
2022
|
Net sales
|
$
500,148
|
|
$
474,171
|
Cost of goods
sold
|
326,698
|
|
328,100
|
Gross profit
|
173,450
|
|
146,071
|
Selling, general and
administrative expenses
|
119,549
|
|
111,795
|
Restructuring and
related charges
|
3,972
|
|
820
|
Combination,
integration and other acquisition-related expenses
|
—
|
|
4,053
|
Operating
income
|
49,929
|
|
29,403
|
Other expense,
net
|
(2,239)
|
|
(2,206)
|
Interest expense,
net
|
(13,242)
|
|
(5,345)
|
Income before taxes and
equity in net income of associated companies
|
34,448
|
|
21,852
|
Taxes on income before
equity in net income of associated companies
|
9,533
|
|
2,866
|
Income before equity in
net income of associated companies
|
24,915
|
|
18,986
|
Equity in net income of
associated companies
|
4,626
|
|
835
|
Net income
|
29,541
|
|
19,821
|
Less: Net income
attributable to noncontrolling interest
|
7
|
|
5
|
Net income
attributable to Quaker Chemical Corporation
|
$
29,534
|
|
$
19,816
|
Per share
data:
|
|
|
|
Net income attributable
to Quaker Chemical Corporation common shareholders –
basic
|
$
1.64
|
|
$
1.11
|
Net income attributable
to Quaker Chemical Corporation common shareholders –
diluted
|
$
1.64
|
|
$
1.11
|
Basic weighted average
common shares outstanding
|
17,866,670
|
|
17,826,061
|
Diluted weighted
average common shares outstanding
|
17,898,746
|
|
17,851,859
|
Quaker Chemical
Corporation
|
Condensed
Consolidated Balance Sheets
|
(Unaudited;
Dollars in thousands, except par value)
|
|
|
March 31,
2023
|
|
December 31,
2022
|
ASSETS
|
|
|
|
Current
assets
|
|
|
|
Cash and cash
equivalents
|
$
189,872
|
|
$
180,963
|
Accounts receivable,
net
|
482,746
|
|
472,888
|
Inventories,
net
|
293,494
|
|
284,848
|
Prepaid expenses and
other current assets
|
63,189
|
|
55,438
|
Total current
assets
|
1,029,301
|
|
994,137
|
|
|
|
|
Property, plant and
equipment, net
|
203,088
|
|
198,595
|
Right of use lease
assets
|
43,344
|
|
43,766
|
Goodwill
|
517,206
|
|
515,008
|
Other intangible
assets, net
|
936,345
|
|
942,925
|
Investments in
associated companies
|
90,841
|
|
88,234
|
Deferred tax
assets
|
10,422
|
|
11,218
|
Other non-current
assets
|
27,916
|
|
27,739
|
Total
assets
|
$ 2,858,463
|
|
$ 2,821,622
|
|
|
|
|
LIABILITIES AND
EQUITY
|
|
|
|
Current
liabilities
|
|
|
|
Short-term borrowings
and current portion of long-term debt
|
$
19,350
|
|
$
19,245
|
Accounts
payable
|
216,633
|
|
193,983
|
Dividends
payable
|
7,822
|
|
7,808
|
Accrued
compensation
|
26,713
|
|
39,834
|
Accrued
restructuring
|
6,809
|
|
5,483
|
Accrued pension and
postretirement benefits
|
1,572
|
|
1,560
|
Other accrued
liabilities
|
90,513
|
|
86,873
|
Total current
liabilities
|
369,412
|
|
354,786
|
|
|
|
|
Long-term
debt
|
921,555
|
|
933,561
|
Long-term lease
liabilities
|
26,086
|
|
26,967
|
Deferred tax
liabilities
|
157,935
|
|
160,294
|
Non-current accrued
pension and postretirement benefits
|
28,985
|
|
28,765
|
Other non-current
liabilities
|
37,702
|
|
38,664
|
Total
liabilities
|
1,541,675
|
|
1,543,037
|
|
|
|
|
Equity
|
|
|
|
Common stock $1 par
value; authorized 30,000,000 shares; issued and outstanding
March 31,
2023 – 17,981,822 shares; December 31, 2022 – 17,950,264
shares
|
17,982
|
|
17,950
|
Capital in excess of
par value
|
929,674
|
|
928,288
|
Retained
earnings
|
491,632
|
|
469,920
|
Accumulated other
comprehensive loss
|
(123,177)
|
|
(138,240)
|
Total Quaker
shareholders' equity
|
1,316,111
|
|
1,277,918
|
Noncontrolling
interest
|
677
|
|
667
|
Total
equity
|
1,316,788
|
|
1,278,585
|
Total liabilities and
equity
|
$ 2,858,463
|
|
$ 2,821,622
|
Quaker Chemical
Corporation
|
Condensed
Consolidated Statements of Cash Flows
|
(Unaudited;
Dollars in thousands)
|
|
|
Three Months
Ended
March 31,
|
|
2023
|
|
2022
|
Cash flows from
operating activities
|
|
|
|
Net income
|
$
29,541
|
|
$
19,821
|
Adjustments to
reconcile net income to net cash used in operating
activities:
|
|
|
|
Amortization of debt
issuance costs
|
353
|
|
1,187
|
Depreciation and
amortization
|
20,246
|
|
20,447
|
Equity in
undistributed earnings of associated companies, net of
dividends
|
(4,401)
|
|
2,135
|
Deferred compensation,
deferred taxes and other, net
|
(2,231)
|
|
(3,801)
|
Share-based
compensation
|
3,527
|
|
2,462
|
Combination and other
acquisition-related expenses, net of payments
|
—
|
|
(4,246)
|
Restructuring and
related charges
|
3,972
|
|
820
|
Pension and other
postretirement benefits
|
(415)
|
|
(1,316)
|
(Decrease) increase in
cash from changes in current assets and current liabilities, net
of
acquisitions:
|
|
|
|
Accounts
receivable
|
(3,974)
|
|
(26,270)
|
Inventories
|
(5,792)
|
|
(33,873)
|
Prepaid expenses and
other current assets
|
(6,765)
|
|
(6,506)
|
Change in
restructuring liabilities
|
(2,747)
|
|
(408)
|
Accounts payable and
accrued liabilities
|
6,468
|
|
23,249
|
Net cash
provided by (used in) operating activities
|
37,782
|
|
(6,299)
|
Cash flows from
investing activities
|
|
|
|
Investments in
property, plant and equipment
|
(6,161)
|
|
(8,847)
|
Payments related to
acquisitions, net of cash acquired
|
—
|
|
(9,383)
|
Net cash used in
investing activities
|
(6,161)
|
|
(18,230)
|
Cash flows from
financing activities
|
|
|
|
Payments of long-term
debt
|
(4,703)
|
|
(14,112)
|
(Payments) borrowings
on revolving credit facilities, net
|
(9,776)
|
|
43,000
|
Payments on other
debt, net
|
(469)
|
|
(102)
|
Dividends
paid
|
(7,809)
|
|
(7,428)
|
Other stock related
activity
|
(2,109)
|
|
(801)
|
Net cash (used in)
provided by financing activities
|
(24,866)
|
|
20,557
|
Effect of foreign
exchange rate changes on cash
|
2,154
|
|
348
|
Net decrease in cash
and cash equivalents
|
8,909
|
|
(3,624)
|
Cash and cash
equivalents at the beginning of the period
|
180,963
|
|
165,176
|
Cash and cash
equivalents at the end of the period
|
$
189,872
|
|
$
161,552
|
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SOURCE Quaker Houghton