Financial Data and Key Metrics Changes - The company reported a sequential sales increase of 28% from Q2 2020, totaling $367 million, but a 5% decrease compared to pro forma Q3 2019 sales of $386 million [6][25] - Gross margin improved to 38.2%, up from 34% in Q2 and 32.3% in Q3 of the previous year [13][26] - Non-GAAP operating income rose to $43.2 million from $11.2 million in Q2 and increased by 25% from $34.5 million in Q3 2019 [28] - Adjusted EBITDA nearly doubled to approximately $64 million in Q3 from $32 million in Q2, reflecting a 5% increase compared to pro forma adjusted EBITDA of $61 million in Q3 2019 [30][31] - Net debt decreased by 7% or $58 million, improving the leverage ratio to 3.4 times from 3.7 times at the end of Q2 [17][34] Business Line Data and Key Metrics Changes - The Americas region saw the largest sales improvement, with a 48% sequential increase driven by stronger volumes [6] - Asia Pacific, EMEA, and Global Specialty Businesses experienced sales growth of 24%, 21%, and 16% respectively compared to Q2 [7] - The metalworking industry group grew 39% sequentially, primarily due to automotive OEMs recovering from shutdowns [8] - Overall sequential volumes were up 27%, but pro forma volumes were down approximately 10% year-over-year [10] Market Data and Key Metrics Changes - The company gained approximately 2% in organic sales growth due to net share gains compared to Q3 2019 [11] - Aerospace, which constitutes about 3% of sales, is expected to take longer to recover compared to other markets [12][82] Company Strategy and Development Direction - The company aims to continue market share gains and explore potential smaller bolt-on acquisitions [12] - Increased synergy estimates for 2020 from $53 million to $58 million, with projections for 2021 raised from $65 million to $75 million [16][35] - The company is focused on disciplined cost management and generating positive cash flow during downturns [36] Management's Comments on Operating Environment and Future Outlook - Management anticipates gradual sequential improvement in markets over the next year or two, but acknowledges uncertainty due to COVID-19 [18] - For Q4, adjusted EBITDA is expected to be similar to Q3, with full-year adjusted EBITDA projected to exceed $215 million [18][19] - The company expects a greater than 20% increase in adjusted EBITDA for 2021, driven by integration savings and market share gains [37] Other Important Information - The company has implemented cost-saving measures, including cutting capital expenditures by over 30% [14] - Strong cash flow management has allowed the company to reduce net debt and improve liquidity [34] Q&A Session Summary Question: What drives confidence in the 2021 EBITDA outlook? - Management indicated that the outlook is based on gradual market recovery and continued market share gains, but acknowledged uncertainty due to potential COVID-19 impacts [46][48] Question: What does steel business consolidation mean for the company? - Management does not anticipate any impact on business due to strong relationships with significant customers involved in the consolidation [49] Question: What drove margin strength in the Americas? - The Americas experienced disproportionate raw material savings and effective manufacturing consolidations contributing to margin strength [51][52] Question: Clarification on EBITDA guidance for Q4? - Management indicated that guidance reflects uncertainty in the market, particularly with ongoing lockdowns in Europe [55] Question: Have any Houghton revenue synergies been identified? - Management confirmed that net market share gains of 2% this quarter are partly due to sales synergies from the Combination [61] Question: How will temporary cost reductions impact future synergies? - Management expects some temporary cost reductions to return as business normalizes, but this is factored into the EBITDA guidance [64][65] Question: Real-time demand in October and November? - Management did not provide specific comments on October demand but indicated that guidance accounts for potential December weakness [72] Question: Cash flow dynamics as business recovers? - Management expects to manage working capital prudently, anticipating positive cash flow as earnings and sales pick up [76] Question: Where are the increasing synergies coming from? - Management noted that initial synergies were underestimated, and recent acceleration in synergy realization is contributing to the increase [78]

Financial Performance - Net sales for the three months ended September 30, 2020, increased to $367.2 million, up 12.9% from $325.1 million in the same period of 2019[11] - Gross profit for the three months ended September 30, 2020, was $140.2 million, representing a 33.4% increase compared to $105.1 million in 2019[11] - Operating income for the three months ended September 30, 2020, was $34.9 million, a significant recovery from an operating loss of $14.5 million in the same period of 2019[11] - Net income attributable to Quaker Chemical Corporation for the three months ended September 30, 2020, was $27.3 million, compared to a net loss of $13.1 million in 2019[11] - Comprehensive income for the three months ended September 30, 2020, was $61.6 million, compared to a comprehensive loss of $40.2 million in the same period of 2019[13] - Total net sales for the three months ended September 30, 2020, were $367.2 million, a 12.9% increase from $325.1 million in the same period of 2019[50] - Basic earnings per share for the three months ended September 30, 2020, was $1.53, compared to a loss of $0.80 for the same period in 2019[100] - Adjusted EBITDA for the third quarter of 2020 was $63.9 million, a 24% increase from $51.4 million in the prior year quarter, primarily due to the Combination and cost savings[145] Cash and Assets - Cash and cash equivalents increased to $155.8 million as of September 30, 2020, from $123.5 million at the end of 2019[16] - Total assets decreased to $2.75 billion as of September 30, 2020, from $2.85 billion at the end of 2019[16] - Total liabilities decreased to $1.53 billion as of September 30, 2020, from $1.61 billion at the end of 2019[16] - As of September 30, 2020, the company had cash, cash equivalents, and restricted cash totaling $174.7 million, an increase of $31.1 million from $143.6 million at December 31, 2019[158] Acquisitions and Integration - The acquisition of Houghton was completed on August 1, 2019, with a total consideration of $1.662 billion, including cash and common stock[29] - The Company incurred approximately $6.9 million and $23.4 million in combination, integration, and other acquisition-related expenses for the three and nine months ended September 30, 2020, respectively[33] - The acquisition of Norman Hay was completed on October 1, 2019, with an original purchase price of £80 million, enhancing the Company's technology and engineering expertise in various industrial markets[34] - The Combination with Houghton required divestiture of certain product lines, sold for approximately $37 million in cash, representing about 3% of the combined company's net sales[28] - The Company recorded accelerated depreciation charges of $0.8 million during the nine months ended September 30, 2020, related to the Houghton integration[33] Segment Performance - Segment operating earnings for the Americas increased to $31.1 million in Q3 2020, up 30.5% from $23.8 million in Q3 2019[50] - The EMEA segment reported net sales of $94.0 million for Q3 2020, representing a 14.2% increase from $82.4 million in Q3 2019[50] - Asia/Pacific net sales rose to $84.9 million in Q3 2020, a 14.3% increase compared to $74.3 million in Q3 2019[50] - Global Specialty Businesses achieved net sales of $68.8 million in Q3 2020, up 32.7% from $51.8 million in Q3 2019[50] Restructuring and Expenses - The Company accrued restructuring charges of $3.585 million for the nine months ended September 30, 2020, with total accrued restructuring as of September 30, 2020, amounting to $8.893 million[75] - SG&A expenses increased by $16.2 million due to Houghton and Norman Hay, but were partially offset by COVID-19 cost savings actions[200] - The Company recorded additional restructuring charges of $1.4 million in Q3 2020 as part of its ongoing restructuring program initiated in Q3 2019[202] Tax and Compliance - The effective tax rate for the three months ended September 30, 2020, was an expense of 8.1%, while for the nine months, it was a benefit of 38.3%[89] - The Company expects to recognize tax benefits of $5.0 million related to foreign tax credit valuation allowances and $2.1 million from a 2019 return to provision adjustment in Q3 2020[89] - As of September 30, 2020, the Company had a deferred tax liability of $6.4 million, down from $8.2 million at December 31, 2019[91] Debt and Financing - Total debt as of September 30, 2020, was $896.6 million, a decrease from $934.9 million as of December 31, 2019[112] - The Company had unused capacity under its Revolver of approximately $239 million as of September 30, 2020[113] - The Company capitalized $23.7 million of third-party debt issuance costs related to the New Credit Facility[117] - As of September 30, 2020, the Company was in compliance with all covenants of the New Credit Facility[115] COVID-19 Impact - The Company continues to monitor the impact of COVID-19, which has caused significant disruptions, including volume declines and lower net sales across its operations[136] - All 34 production facilities worldwide are currently open and operating, deemed essential businesses, and the Company has implemented health and safety measures for employees[155] - The Company anticipates that the impact from COVID-19 will gradually improve sequentially each quarter, subject to effective containment measures[156] Impairment and Valuation - As of September 30, 2020, the Company recorded an impairment charge of $38.0 million for the Houghton and Fluidcare trademark and tradename intangible assets due to a decrease in projected net sales and an increase in the WACC assumption[109] - The estimated fair value of the Houghton and Fluidcare trademark and tradename intangible assets was $204.0 million as of September 30, 2020, down from $242.0 million as of December 31, 2019[109] Shareholder Returns - The company declared dividends of $0.395 per share for the three months ended September 30, 2020, compared to $0.385 per share in 2019[11] - The Company declared dividends of $20,735,000 at a rate of $1.165 per share during the third quarter of 2020[124]

PART I. FINANCIAL INFORMATION [Financial Statements (Unaudited)](index=2&type=section&id=Item%201.%20Financial%20Statements%20(unaudited)) Unaudited financial statements reflect the Houghton acquisition, restructuring costs, and COVID-19 impacts [Condensed Consolidated Statements of Operations](index=3&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) The company reported a significant net loss in Q2 2020 due to acquisition costs and pandemic-related effects Consolidated Statements of Operations Highlights (in thousands, except per share data) | Metric | Three Months Ended June 30, 2020 | Three Months Ended June 30, 2019 | Six Months Ended June 30, 2020 | Six Months Ended June 30, 2019 | | :--- | :--- | :--- | :--- | :--- | | **Net sales** | $286,040 | $205,869 | $664,601 | $417,079 | | **Gross profit** | $97,386 | $75,161 | $231,237 | $150,928 | | **Operating income (loss)** | $2,238 | $20,531 | $(10,206) | $40,360 | | **Net (loss) income attributable to Quaker** | $(7,735) | $15,591 | $(36,116) | $29,435 | | **Diluted (loss) earnings per share** | $(0.43) | $1.17 | $(2.03) | $2.20 | - For the six months ended June 30, 2020, the company recorded a **$38.0 million impairment charge** for an indefinite-lived intangible asset, which was not present in 2019[11](index=11&type=chunk) [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets slightly increased while equity decreased, driven by higher cash from debt and lower intangible asset values Condensed Consolidated Balance Sheet Highlights (in thousands) | Metric | June 30, 2020 | December 31, 2019 | | :--- | :--- | :--- | | **Total current assets** | $849,238 | $715,972 | | **Goodwill** | $604,649 | $607,205 | | **Other intangible assets, net** | $1,044,516 | $1,121,765 | | **Total assets** | $2,871,526 | $2,850,316 | | **Total current liabilities** | $282,691 | $359,934 | | **Long-term debt** | $1,070,306 | $882,437 | | **Total liabilities** | $1,704,185 | $1,607,950 | | **Total equity** | $1,167,341 | $1,242,366 | [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Operating cash flow improved, and a significant increase in cash resulted from drawing on credit facilities Condensed Consolidated Cash Flow Highlights (in thousands) | Metric | Six Months Ended June 30, 2020 | Six Months Ended June 30, 2019 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | $44,662 | $22,409 | | **Net cash used in investing activities** | $(10,618) | $(5,843) | | **Net cash provided by (used in) financing activities** | $168,731 | $(35,282) | | **Net increase (decrease) in cash** | $198,200 | $(17,967) | [Notes to Condensed Consolidated Financial Statements](index=7&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Notes detail the Houghton acquisition, restructuring, asset impairment, and significant COVID-19 pandemic impacts - **Business Combinations:** The company completed its combination with Houghton on August 1, 2019, for a total consideration of **$1.66 billion**, with integration expenses of $16.5 million in H1 2020[24](index=24&type=chunk)[26](index=26&type=chunk)[30](index=30&type=chunk) - **Restructuring:** The 'QH Program' initiated in Q3 2019 aims to achieve cost synergies, with **$2.2 million in restructuring charges** recorded in the first six months of 2020[73](index=73&type=chunk)[75](index=75&type=chunk) - **Goodwill and Intangible Asset Impairment:** Due to COVID-19's impact, the company recorded a **non-cash impairment charge of $38.0 million** in Q1 2020 on intangible assets[109](index=109&type=chunk) - **COVID-19 Impact:** The pandemic caused significant disruptions, including **volume declines and lower net sales**, with the full extent of future impact remaining uncertain[138](index=138&type=chunk)[140](index=140&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=32&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations.) MD&A explains that while acquisitions boosted sales, organic revenue declined significantly due to COVID-19 - Q2 2020 net sales increased 39% to $286.0 million due to acquisitions, but **organic sales declined approximately 30%** from a 27% drop in sales volumes[146](index=146&type=chunk) - In response to COVID-19, the company took actions to conserve cash, including **lowering targeted capital expenditures by approximately 30%**[159](index=159&type=chunk) - As a precautionary measure, the company **drew down most of its revolving credit facility** in March 2020, increasing cash reserves and total debt[114](index=114&type=chunk)[163](index=163&type=chunk) - The company expects to realize **$53 million in Combination cost synergies in 2020**, with approximately $22 million realized in the first six months[168](index=168&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=47&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk.) Market risk exposures remain consistent, though heightened in volatility due to the COVID-19 pandemic - The company acknowledges market risks, noting that the COVID-19 pandemic has led to **significant volatility and uncertainty** across them[247](index=247&type=chunk) [Controls and Procedures](index=48&type=section&id=Item%204.%20Controls%20and%20Procedures.) Disclosure controls were deemed ineffective due to material weaknesses related to the recent business combination - Management concluded that **disclosure controls and procedures were not effective** as of June 30, 2020, due to existing material weaknesses[249](index=249&type=chunk) - The material weaknesses relate to **ineffective risk assessment**, revenue controls, and business combination accounting following the Combination[250](index=250&type=chunk) - A multi-step remediation plan is being executed, but **COVID-19 related challenges may impact the timing** of these activities[252](index=252&type=chunk) PART II. OTHER INFORMATION [Legal Proceedings](index=50&type=section&id=Item%201.%20Legal%20Proceedings.) The company faces ongoing legal matters related to environmental remediation and asbestos litigation - Information regarding legal proceedings is **incorporated by reference from Note 19** of the financial statements[257](index=257&type=chunk) [Risk Factors](index=50&type=section&id=Item%201A.%20Risk%20Factors.) The primary updated risk factor is the significant and uncertain negative impact of the COVID-19 pandemic - The primary updated risk factor relates to the **COVID-19 pandemic**, which has negatively affected business through reduced demand and volume declines[259](index=259&type=chunk)[260](index=260&type=chunk) - The pandemic has already led to a **non-cash impairment charge** and could cause future disruptions to supply chains and debt covenant compliance[261](index=261&type=chunk)[265](index=265&type=chunk) - The **ultimate significance of COVID-19 on the business is uncertain** and depends on the duration of the pandemic and pace of economic recovery[263](index=263&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=51&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds.) The company issued unregistered shares for an acquisition and repurchased shares from employees for tax purposes - On May 20, 2020, the company issued **17,894 shares of common stock** (valued at approx $2.9 million) in a private placement to acquire Tel Nordic ApS[264](index=264&type=chunk) - During the quarter, **3,930 shares were acquired from employees** for tax obligations, with no shares repurchased under the public buyback program[266](index=266&type=chunk) [Exhibits](index=52&type=section&id=Item%206.%20Exhibits.) This section lists all exhibits filed with the report, including certifications and interactive data files

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 March 31, 2020 OR [ ] 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 or other juris ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2019 or [ ] 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) A Pennsylvania Corporation No. 23-0993790 (State or ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2019 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 (Exact name of Registrant as specified in its charter) Pennsylvania 23-0993790 (State or other jurisdiction of incorporation or organization) One Quaker Park, 901 E. Hector Street, Conshohocken, ...

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, 2019 OR [ ] 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 or other jurisd ...

For the quarterly period ended March 31, 2019 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 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 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 or other juris ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2018 or [ ] 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) A Pennsylvania Corporation No. 23-0993790 (State or ...