Have you evaluated the performance of Quaker Chemical's (KWR) international operations for the quarter ending June 2025? Given the extensive global presence of this specialty chemical company, analyzing the patterns in international revenues is crucial for understanding its financial strength and potential for growth. The global economy today is deeply interlinked, making a company's engagement with international markets a critical factor in determining its financial success and growth path. It has become e ...

Core Insights - Quaker Chemical reported Q2 2025 revenue of $483.4 million, exceeding analyst expectations by 4.8%, but faced profitability challenges with Non-GAAP EPS at $1.71, missing consensus by 6.6% and down 19.7% year-over-year [1][2] - The quarter included an $88.8 million non-cash goodwill impairment in the EMEA business, leading to a GAAP net loss of $66.6 million, highlighting ongoing margin pressure and challenges in Europe [1][7] Financial Performance - Non-GAAP EPS was $1.71, below the estimated $1.83 and down from $2.13 a year ago, reflecting a 19.7% decline [2] - Revenue increased by 4.3% year-over-year, from $463.6 million in Q2 2024 to $483.4 million in Q2 2025 [2] - Adjusted EBITDA decreased by 10.4% from the previous year, indicating underlying operating cash flow challenges [2] - Non-GAAP net income fell by 21.5% year-over-year to $30.0 million [2] - Non-GAAP operating margin decreased to 10.5%, down 2.4 percentage points from the previous year [2] Business Overview - Quaker Chemical operates in over 25 countries, providing industrial process fluids and chemicals to sectors such as steel, aluminum, automotive, and aerospace [3] - The company focuses on five core areas: global market share, product diversification, managing raw material costs, growth through acquisitions, and sustainability [4] Key Developments - The revenue growth was driven by a 6% contribution from acquisitions and 2% organic product volume growth, with the Dipsol acquisition significantly impacting results, especially in the Asia/Pacific region [5][6] - Despite revenue gains, profitability was affected by higher raw material and manufacturing costs, with flat sales in the Americas and slight growth in EMEA [6] - The Dipsol acquisition is expected to enhance the company's technology base and market reach, contributing to new surface treatment solutions [8] Strategic Initiatives - The company emphasizes customer intimacy and e-commerce channels for expansion, alongside investments in new manufacturing capacity to improve efficiency [9] - Ongoing sustainability efforts include increasing renewable energy usage and a $20 million multi-year cost reduction program [10] Capital Allocation - The company raised its quarterly dividend by approximately 5% and repurchased about $32.7 million of shares, with net debt rising to $734.8 million [11] - Management remains focused on using various capital allocation strategies to support future growth [11] Future Outlook - Management projects revenue and earnings for FY2025 to be stable, with no formal guidance provided due to uncertainties in global markets [12] - Key themes to monitor include cost-cutting progress, acquisition integration, EMEA recovery, and margin defense through selective price increases [13]

Financial Data and Key Metrics Changes - In the second quarter, the company reported net sales of $483 million, a 4% increase from the prior year, with organic volumes increasing by 2% [18] - Adjusted EBITDA was $75.5 million, reflecting a sequential increase of approximately $6 million, with adjusted EBITDA margins at 15.6% [9][20] - Gross margins were slightly lower at 36%, influenced by higher raw material and manufacturing costs, but remained within the target range [9][19] Business Line Data and Key Metrics Changes - The Asia Pacific segment achieved 3% organic sales growth, driven by strong contributions from new business wins and acquisitions, with sales increasing by 20% year over year [21] - The EMEA segment saw net sales growth compared to the prior year and quarter, with organic volumes increasing by 4% sequentially [22] - The Americas segment experienced a 1% decline in net sales year over year, with volumes down 2% [23] Market Data and Key Metrics Changes - The overall market served by the company is estimated to have declined by a low single-digit percentage compared to the prior year, with regional differences noted [7] - Demand uncertainty due to tariffs is impacting overall demand and geographic/product mix [8] Company Strategy and Development Direction - The company is focused on reducing complexity and improving cost structure to support long-term performance [6] - Investments are being made in new manufacturing capabilities and innovation to enhance customer solutions [10][11] - The integration of Dipsol's technology is expected to contribute positively to the company's portfolio [12] Management's Comments on Operating Environment and Future Outlook - Management anticipates that end market softness will persist through 2025, but remains confident in the ability to drive above-market growth [14][15] - The company is taking actions to enhance competitiveness and expects to deliver solid cash flow in 2025 [26][28] - Management expressed confidence in sustaining a long-term growth rate of 2% to 4% despite external market challenges [15][37] Other Important Information - The board approved a 5% increase in cash dividends, marking the sixteenth consecutive annual increase [14] - The company repurchased $33 million of shares and has $68 million remaining on its share repurchase authorization [28] Q&A Session Summary Question: Can you provide more details on the share gains and their sustainability? - Management noted broad-based share gains across all regions, particularly strong in Asia Pacific, and expressed confidence in sustaining a mid-single-digit growth rate into the second half of the year [35][37] Question: What is the outlook for Asia Pacific margins and raw material impacts? - Management indicated that new business wins may initially impact margins but expect stability and modest improvement in the second half, with targeted pricing actions in response to raw material costs [39] Question: What is the expected EBITDA growth cadence for the second half? - Management expects the second half to be stronger than the first, driven by new business wins and cost actions, but does not anticipate significant market improvement [41][46] Question: Can you elaborate on the double-digit growth in advanced products? - Management confirmed that advanced solutions, including Fluid Intelligence, are seeing strong traction and represent about 20% of total revenues, with higher growth rates than the corporate average [53] Question: What are the implications of tariffs on customer inventory and strategy? - Management noted that customers are cautious about building inventory due to uncertainty, but there is potential for positive impacts in North America [63] Question: What changes are being made to the commercial strategy? - Management highlighted improvements in organizational structure and operational efficiency to reduce complexity and enhance growth potential [66]

Financial Data and Key Metrics Changes - In Q2 2025, the company reported net sales of $483 million, a 4% increase year over year, with organic volumes up 2% driven by new business wins and acquisitions contributing an additional 6% to sales [18][6] - Adjusted EBITDA for the second quarter was $75.5 million, reflecting a margin of 15.6%, which is lower than the previous year due to higher raw material costs and disciplined cost management [20][8] - Gross margins were reported at 36%, slightly down from 36.4% in the previous year, influenced by product and geographic mix as well as increased manufacturing costs [19][8] Business Line Data and Key Metrics Changes - The Asia Pacific segment achieved 3% organic sales growth in Q2, with a 20% year-over-year increase in sales, bolstered by acquisitions and strong organic volume growth [21][6] - The EMEA segment saw net sales growth compared to both the prior year and quarter, with organic volumes increasing 4% sequentially, driven by advanced and operating solutions [22][6] - The Americas segment experienced a 1% decline in net sales year over year, with a 2% decrease in volumes, although price mix was slightly positive [23][6] Market Data and Key Metrics Changes - The overall market served by the company is estimated to have declined by a low single-digit percentage compared to the prior year, with regional differences impacting performance [6][7] - Demand uncertainty due to tariffs is affecting geographic and product mix, although share gains across the portfolio are mitigating these impacts [7][6] Company Strategy and Development Direction - The company is focused on reducing complexity and improving cost structure to support long-term performance, with a commitment to serving customers and driving growth [5][10] - Investments in new manufacturing capabilities and innovation through R&D are key strategies to enhance customer outcomes and drive sustainable growth [10][11] - The company is implementing a $20 million cost program expected to yield approximately $15 million in savings in 2025, with further actions anticipated to deliver additional savings by 2026 [12][13] Management's Comments on Operating Environment and Future Outlook - Management anticipates that the softness in end markets will persist through 2025, but remains confident in the ability to drive above-market growth through a healthy pipeline of product trials [14][15] - The company expects to maintain adjusted EBITDA margins in the high teens over time, with ongoing efforts to improve cost efficiency and manage inflationary pressures [60][62] - Management expressed optimism about the company's position and growth potential, regardless of external market conditions [68][69] Other Important Information - The company approved a 5% increase in cash dividends, marking the sixteenth consecutive annual increase, and repurchased $33 million of shares [14][28] - The net debt at the end of the quarter was $735 million, with a net leverage ratio of 2.6 times trailing twelve months adjusted EBITDA [28][25] Q&A Session Summary Question: Share gains and sustainability of growth - Management noted broad-based share gains across all regions, particularly strong in Asia Pacific, and expressed confidence in sustaining mid-single-digit growth rates into the second half of the year [34][36] Question: Asia Pacific margins and raw material impacts - Management indicated that new business wins in Asia Pacific may lead to modest margin improvements over time, despite current raw material headwinds related to oleochemicals [38][39] Question: Outlook for sequential EBITDA growth - Management expects stronger performance in the second half compared to the first half, driven by new business wins and cost actions, but does not anticipate significant market improvement [41][46] Question: Advanced products growth and margins - The advanced products segment, including Fluid Intelligence, is expected to grow significantly, contributing around 20% of total revenues with higher growth rates than the corporate average [52][54] Question: Cost savings program details - The new $20 million cost savings program is expected to yield significant savings, with a focus on both G&A and network improvements [56][57] Question: Customer sentiment regarding tariffs - Customers are cautious about building inventory due to uncertainty from tariffs, with some adjustments in inventory levels noted [64][65] Question: Commercial strategy and organizational changes - Management highlighted improvements in customer retention and share gains, with operational changes made to enhance product line management and sales deployment [67][68]

Quaker Houghton Second Quarter 2025 Results Investor Conference Call Forward-Looking Statements Regulation G The attached charts include Company information that does not conform to generally accepted accounting principles ("GAAP"). Management believes that an analysis of this data is meaningful to investors because it provides insight with respect to ongoing operating results of the Company and helps investors to evaluate the financial results of the Company. These measures should not be viewed as an alter ...

Quaker Chemical (KWR) came out with quarterly earnings of $1.71 per share, missing the Zacks Consensus Estimate of $1.82 per share. This compares to earnings of $2.13 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of -6.04%. A quarter ago, it was expected that this specialty chemical company would post earnings of $1.52 per share when it actually produced earnings of $1.58, delivering a surprise of +3.95%. Over the last four qu ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 FORM 10-Q x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2025 OR o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 001-12019 QUAKER CHEMICAL CORPORATION (Exact name of registrant as specified in its charter) Pennsylvania 23-0993790 (State o ...

July 31, 2025 CONSHOHOCKEN, PA – Quaker Houghton ("the Company") (NYSE: KWR), the global leader in industrial process fluids, announced its second quarter 2025 results today. | | Three Months Ended | | | | Six Months Ended | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | June 30, | | | | June 30, | | | | | ($ in thousands, except per share data) | | 2025 | | 2024 | 2025 | | | 2024 | | Net sales | $ | 483,400 | $ | 463,567 | $ | 926,314 | $ | 933,326 | | Net (loss) income attributable to Q ...

Core Insights - Quaker Houghton reported a net loss of $66.6 million in Q2 2025, primarily due to an $88.8 million non-cash goodwill impairment charge related to its EMEA segment [4][6][7] - The company's net sales for Q2 2025 were $483.4 million, a 4% increase from $463.6 million in Q2 2024, driven by a 2% increase in sales volumes and a 6% contribution from acquisitions [3][6][8] - The company generated non-GAAP net income of $30.0 million and non-GAAP earnings per diluted share of $1.71 in Q2 2025, compared to $38.2 million and $2.13 in Q2 2024 [4][6][8] Financial Performance - Q2 2025 net sales increased by 4% year-over-year, with organic sales volumes up 2% and acquisitions contributing approximately 6% [3][6] - The adjusted EBITDA for Q2 2025 was $75.5 million, a decrease of about 10% from $84.3 million in Q2 2024, reflecting lower operating margins despite increased sales [4][6][8] - The company reported a diluted loss per share of $3.78 in Q2 2025, compared to earnings of $1.94 per share in Q2 2024 [4][6][8] Segment Performance - In Q2 2025, net sales in the Americas segment were $221.1 million, a decrease of approximately 1% from $223.5 million in Q2 2024 [9][10] - The EMEA segment saw net sales of $139.9 million, a slight increase of about 1% compared to the same period in 2024 [9][10] - The Asia/Pacific segment experienced a significant increase in net sales of 20% year-over-year, reaching $122.4 million, driven by strong sales volumes and contributions from acquisitions [9][10] Market Conditions - The company noted that underlying end market activity remained below prior year levels, particularly in the Americas and EMEA segments, due to uncertainties related to tariffs [10][11] - Despite the challenging macroeconomic environment, the Asia/Pacific segment showed improvement, with 8% organic volume growth compared to the prior year [5][10] - The company anticipates tepid economic conditions to persist in the second half of 2025, but expects to achieve full-year revenue and earnings in line with 2024 levels [7][10] Cash Flow and Liquidity - For the six months ended June 30, 2025, net cash provided by operating activities was $38.5 million, down from $73.5 million for the same period in 2024 [14][15] - As of June 30, 2025, the company's total gross debt was $936.7 million, with cash and cash equivalents of $201.9 million, resulting in net debt of approximately $734.8 million [15][16] - The company repurchased 296,113 shares for $32.7 million in Q2 2025 and raised its quarterly cash dividend by approximately 5% [6][15]

Company Overview - Quaker Houghton is the global leader in industrial process fluids, operating in over 25 countries and serving thousands of advanced and specialized companies in sectors such as steel, aluminum, automotive, aerospace, and mining [3]. Dividend Announcement - The Board of Directors of Quaker Houghton declared a quarterly cash dividend of $0.508 per share, representing a 4.7% increase over the previous dividend [1]. - This dividend is scheduled to be paid on October 31, 2025, to shareholders of record as of October 17, 2025 [1]. Management Commentary - The CEO, Joseph A. Berquist, stated that the dividend increase reflects the company's confidence in its future and its ability to generate strong and consistent cash flow [2]. - The company has a balanced capital allocation strategy aimed at creating shareholder value, marking the 16th consecutive year of dividend increases and the 49th increase since going public in 1972 [2].