Core Insights - Quaker Chemical reported a revenue of $442.91 million for the quarter ended March 2025, reflecting a 5.7% decrease year-over-year and a revenue surprise of -2.90% compared to the Zacks Consensus Estimate of $456.15 million [1] - The company's EPS for the quarter was $1.58, down from $2.09 in the same quarter last year, with an EPS surprise of +3.95% against the consensus estimate of $1.52 [1] - Quaker Chemical's stock has returned -14.8% over the past month, underperforming the Zacks S&P 500 composite, which changed by -0.7% [3] Revenue Breakdown - Geographic Revenue from the Americas was $213.71 million, below the estimated $219.54 million, representing a year-over-year decline of 7% [4] - Geographic Revenue from Asia/Pacific was reported at $99.93 million, compared to the average estimate of $105.48 million, indicating a year-over-year change of -1.6% [4] - Geographic Revenue from EMEA was $129.28 million, slightly below the estimated $132.47 million, reflecting a year-over-year decline of 6.6% [4]

Core Viewpoint - Quaker Chemical reported quarterly earnings of $1.58 per share, exceeding the Zacks Consensus Estimate of $1.52 per share, but down from $2.09 per share a year ago, indicating a 24.4% year-over-year decline in earnings [1][2] Group 1: Earnings Performance - The company achieved an earnings surprise of 3.95% for the recent quarter, while it had a negative surprise of -17.90% in the previous quarter [1][2] - Over the last four quarters, Quaker Chemical has only surpassed consensus EPS estimates once [2][6] Group 2: Revenue Analysis - Quaker Chemical's revenues for the quarter were $442.91 million, missing the Zacks Consensus Estimate by 2.90% and down from $469.76 million year-over-year [2][3] - The company has topped consensus revenue estimates just once over the last four quarters [2] Group 3: Stock Performance and Outlook - Quaker Chemical shares have declined approximately 24.7% since the beginning of the year, compared to a decline of -5.3% for the S&P 500 [3] - The current consensus EPS estimate for the upcoming quarter is $1.88 on revenues of $466.91 million, and for the current fiscal year, it is $7.51 on $1.88 billion in revenues [7] Group 4: Industry Context - The Chemical - Specialty industry, to which Quaker Chemical belongs, is currently ranked in the bottom 41% of over 250 Zacks industries, indicating potential challenges for stock performance [8]

[FINANCIAL INFORMATION](index=4&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements%20%28Unaudited%29) This section presents the unaudited condensed consolidated financial statements for Q1 2025 and 2024, including statements of operations, balance sheets, and cash flows, noting decreases in net sales and net income Condensed Consolidated Statements of Operations (Q1 2025 vs Q1 2024) | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net sales | $442.9 million | $469.8 million | | Gross profit | $161.3 million | $181.6 million | | Operating income | $27.6 million | $55.5 million | | Net income attributable to Quaker Chemical Corporation | $12.9 million | $35.2 million | | Diluted EPS | $0.73 | $1.95 | Condensed Consolidated Balance Sheets | Metric | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total current assets | $912.4 million | $876.4 million | | Total assets | $2,664.4 million | $2,610.6 million | | Total current liabilities | $372.8 million | $379.8 million | | Total liabilities | $1,277.9 million | $1,256.5 million | | Total equity | $1,386.5 million | $1,354.2 million | Condensed Consolidated Statements of Cash Flows (Q1 2025 vs Q1 2024) | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net cash (used in) provided by operating activities | ($3.1) million | $27.2 million | | Net cash used in investing activities | ($13.4) million | ($29.3) million | | Net cash provided by financing activities | $11.0 million | $6.6 million | | Net (decrease) increase in cash and cash equivalents | ($2.7) million | $1.2 million | - Subsequent to the reporting period, in April 2025, the company completed two acquisitions: Dipsol Chemicals Co., Ltd. for approximately **$187.0 million** and Natech, Ltd. for approximately **$6.5 million**[28](index=28&type=chunk)[29](index=29&type=chunk) - In February 2025, the company acquired Chemical Solutions & Innovations (Pty) Ltd. for approximately **$3.9 million**[31](index=31&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=28&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations.) Management discusses Q1 2025 financial results, highlighting a 6% decrease in net sales to **$442.9 million** due to lower volumes and unfavorable foreign currency, with Adjusted EBITDA also declining Q1 2025 vs Q1 2024 Performance Summary | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net Sales | $442.9 million | $469.8 million | | Net Income | $12.9 million | $35.2 million | | Diluted EPS | $0.73 | $1.95 | | Non-GAAP Diluted EPS | $1.58 | $2.09 | | Adjusted EBITDA | $69.0 million | $83.3 million | Consolidated Net Sales Variance (Q1 2025 vs Q1 2024) | Component | Percentage Change | | :--- | :--- | | Sales volumes | (3)% | | Selling price & product mix | (1)% | | Foreign currency | (3)% | | Acquisition & other | 1% | | **Total** | **(6)%** | - Net cash used in operating activities was **$3.1 million**, a significant decrease from the **$27.2 million** provided in the prior-year period, reflecting lower operating performance and higher cash outflows from restructuring and working capital[104](index=104&type=chunk)[110](index=110&type=chunk) - The company's global cost and optimization program has achieved its initial **$20 million** annualized savings goal, with additional actions expected to generate another **$20 million** in annualized savings, substantially complete in the first half of 2025[121](index=121&type=chunk) - Subsequent to the quarter end, the company borrowed **$210 million** from its revolving credit facility to fund the Dipsol acquisition and for other corporate purposes[116](index=116&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=41&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk.) No material changes to market risk disclosures were reported from the company's 2024 Annual Report on Form 10-K - There has been no material change to the quantitative and qualitative disclosures about market risk from the company's 2024 Form 10-K[162](index=162&type=chunk) [Controls and Procedures](index=41&type=section&id=Item%204.%20Controls%20and%20Procedures.) Management, including the CEO and CFO, concluded that disclosure controls and procedures were effective as of March 31, 2025, with no material changes to internal control over financial reporting - The principal executive officer and principal financial officer concluded that the company's disclosure controls and procedures were effective as of March 31, 2025[163](index=163&type=chunk) - No changes in internal control over financial reporting were identified during the quarter ended March 31, 2025, that have materially affected or are likely to materially affect these controls[164](index=164&type=chunk) [OTHER INFORMATION](index=42&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Legal Proceedings](index=42&type=section&id=Item%201.%20Legal%20Proceedings.) Legal proceedings information is incorporated by reference from Note 18, detailing an accrual of approximately **$5.5 million** for ongoing matters with no significant changes during the quarter - Information regarding legal proceedings is incorporated by reference from Note 18, Commitments and Contingencies[168](index=168&type=chunk) - As of March 31, 2025, the company has accrued approximately **$5.5 million** for ongoing environmental and other litigation matters, with no significant changes to these matters during the quarter[95](index=95&type=chunk) [Risk Factors](index=42&type=section&id=Item%201A.%20Risk%20Factors.) No material changes to risk factors were reported from the 2024 Form 10-K, though recent government actions like tariffs could exacerbate existing risks - There have been no material changes to the risk factors described in the Company's 2024 Form 10-K[169](index=169&type=chunk) - The company notes that recent government actions, including tariffs and trade policies, could exacerbate the risks and uncertainties set forth in its 2024 10-K[169](index=169&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=42&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds.) The company acquired **8,809 shares** from employees for tax withholding on restricted stock vesting, with no repurchases under the **$150 million** share repurchase program - A total of **8,809 shares** were acquired from employees related to the vesting of restricted stock awards or units during the quarter[170](index=170&type=chunk) - No shares were repurchased under the company's **$150 million** share repurchase program during the quarter ended March 31, 2025[170](index=170&type=chunk) [Other Information](index=42&type=section&id=Item%205.%20Other%20Information.) No director or officer adopted or terminated any Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during Q1 2025 - No director or officer adopted or terminated any Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the quarter ended March 31, 2025[172](index=172&type=chunk) [Exhibits](index=43&type=section&id=Item%206.%20Exhibits.) This section lists all exhibits filed with the Form 10-Q, including the Dipsol acquisition agreement and required CEO/CFO certifications - A Share Purchase Agreement, dated March 25, 2025, related to the acquisition of Dipsol was filed as an exhibit[173](index=173&type=chunk) - Certifications by the Chief Executive Officer and Chief Financial Officer pursuant to Rule 13a-14(a) and 18 U.S.C. Section 1350 were filed with the report[173](index=173&type=chunk)

Exhibit 99.1 NEWS Contact: Jeffrey Schnell Vice President, Investor Relations investor@quakerhoughton.com T. 1.610.832.4087 For Release: Immediate QUAKER HOUGHTON ANNOUNCES FIRST QUARTER 2025 RESULTS May 1, 2025 CONSHOHOCKEN, PA – Quaker Houghton ("the Company") (NYSE: KWR), the global leader in industrial process fluids, announced its first quarter 2025 results today. | | | | Three Months Ended | | | --- | --- | --- | --- | --- | | | | | March 31, | | | ($ in thousands, except per share data) | 2025 | | | ...

Core Insights - Quaker Houghton reported a decline in net sales and net income for Q1 2025 compared to Q1 2024, attributed to soft end market conditions and tariff uncertainties [3][4][10] - The company experienced a decrease in sales volumes across its segments, with a slight increase in the Asia/Pacific segment [3][10] - Strategic acquisitions in 2025 are expected to enhance growth opportunities despite current market challenges [5][15] Financial Performance - Net sales for Q1 2025 were $442.9 million, down approximately 6% from $469.8 million in Q1 2024 [3][4] - Net income attributable to Quaker Chemical Corporation was $12.9 million, or $0.73 per diluted share, compared to $35.2 million, or $1.95 per diluted share in the prior year [4][32] - Non-GAAP net income for Q1 2025 was $28.0 million, with non-GAAP earnings per diluted share at $1.58, down from $37.7 million and $2.09 respectively in Q1 2024 [4][23] Segment Performance - In the Americas segment, net sales decreased by 7% to $213.7 million, while EMEA also saw a 7% decline to $129.3 million; Asia/Pacific segment net sales decreased by 2% to $99.9 million [9][27] - Segment operating earnings for Q1 2025 were $107.8 million, down from $126.7 million in Q1 2024, with declines noted across all segments [9][27] Cash Flow and Liquidity - The company reported net cash used by operating activities of $3.1 million for Q1 2025, a significant decrease from $27.2 million provided in Q1 2024 [13] - As of March 31, 2025, total gross debt was $737.0 million, with cash and cash equivalents at $186.2 million, resulting in net debt of approximately $550.8 million [14] Strategic Acquisitions - In 2025, Quaker Houghton made three strategic acquisitions: Chemical Solutions & Innovations for approximately $3.9 million, Natech for about $6.5 million, and Dipsol Chemicals for approximately $155.2 million [15][31] - These acquisitions are expected to strengthen the company's portfolio and provide avenues for growth in 2025 and beyond [5][15]

Core Insights - Quaker Houghton released its 2024 Sustainability Report, showcasing its commitment to sustainability and progress in adapting to industry changes [1][2] - The company achieved 90% of its internal sustainability goals and received the EcoVadis Silver Award for its efforts [2] Sustainability Achievements - A 7% reduction in Scope 2 greenhouse gas emissions compared to 2023 [5] - Elimination of over 23,000 metric tons of waste in 2024 at QH FLUIDCARE™ partner locations, totaling over 70,000 metric tons since 2022 [5] - 76% of global electricity consumption sourced from renewable or zero carbon sources [5] - A 75% increase in average hours of employee training compared to 2023 [5] - Improvement in recordable incidents (TRIR) for the fifth consecutive year, reinforcing the company's "Life Safe" core value [5]

Core Viewpoint - Quaker Houghton is set to release its first quarter 2025 earnings on May 1, 2025, followed by an investor call on May 2, 2025, indicating the company's ongoing commitment to transparency and communication with investors [1][2]. Company Overview - Quaker Houghton is recognized as the global leader in industrial process fluids, operating in over 25 countries and serving thousands of advanced and specialized companies across various sectors including steel, aluminum, automotive, aerospace, and mining [3]. - The company employs approximately 4,400 individuals, including chemists, engineers, and industry experts, focusing on providing innovative and sustainable solutions backed by advanced technology and deep process knowledge [3]. - Quaker Houghton is headquartered in Conshohocken, Pennsylvania, near Philadelphia, emphasizing its strategic location in the United States [3].

Group 1: Quaker Chemical (KWR) - Quaker Chemical shares increased by 14.4% to close at $111.22, following a significant volume of trading, contrasting with a 26.9% loss over the past four weeks [1] - The stock's rally is attributed to a rise in material stocks after President Trump announced a 90-day pause on reciprocal tariffs for most countries [1] - The consensus EPS estimate for Quaker Chemical is projected at $1.57, reflecting a year-over-year decline of 24.9%, with expected revenues of $457.8 million, down 2.6% from the previous year [2] Group 2: Earnings Estimate Revisions - Over the last 30 days, the consensus EPS estimate for Quaker Chemical has been revised 4.5% lower, indicating a negative trend in earnings estimate revisions, which typically does not lead to price appreciation [3] - The stock currently holds a Zacks Rank of 3 (Hold), suggesting a neutral outlook [3] Group 3: Element Solutions (ESI) - Element Solutions, another company in the specialty chemical industry, saw its consensus EPS estimate remain unchanged at $0.33, representing a year-over-year change of -2.9% [4] - Element Solutions also holds a Zacks Rank of 3 (Hold), indicating a similar neutral outlook as Quaker Chemical [4]

Group 1: Acquisition Details - Quaker Chemical Corporation (KWR) has completed the acquisition of Dipsol Chemicals Co., Ltd. for JPY 23 billion (approximately $153 million) [1] - Dipsol generated around $82 million in revenues for the 12 months ended December 31, 2024, with an acquisition multiple of about 10.5 times its trailing 12-month estimated adjusted EBITDA of approximately $15 million [2] - Additionally, KWR announced the acquisition of Natech, Ltd. for about 4 million GBP (approximately $5.2 million) [3] Group 2: Strategic Impact - The acquisitions of Dipsol and Natech strengthen KWR's market position and enhance its technical service model, broadening its product and service portfolio [4] - These acquisitions are expected to expand KWR's advanced solutions business in high-growth potential markets, providing significant opportunities for cross-selling and meeting global customer needs [4] Group 3: Financial Performance and Outlook - KWR's shares have decreased by 43.1% over the past year, contrasting with a 2.3% decline in the Zacks Chemicals Specialty industry [5] - The company aims to achieve sustained growth and share gains by advancing its enterprise strategy, with expected run-rate cost savings of at least $20 million this year, which should enhance operational efficiency and competitiveness [6] - KWR anticipates revenue, adjusted EBITDA, and earnings growth in 2025 [6]

Core Insights - Quaker Houghton has completed the acquisition of Dipsol Chemicals Co., Ltd. for 23 billion JPY (~$153 million), enhancing its position in the surface treatment and plating solutions market [1] - The company also announced the acquisition of Natech, Ltd. for approximately 4 million GBP (~$5.2 million), further expanding its product offerings [2] - The acquisitions are expected to accelerate growth and create shareholder value by complementing Quaker Houghton's existing technical service model and expanding its advanced solutions businesses [3] Company Overview - Quaker Houghton is a global leader in industrial process fluids, operating in over 25 countries and serving advanced industries such as steel, aluminum, automotive, and aerospace [8] - The company employs approximately 4,400 individuals, including chemists and engineers, to provide innovative and sustainable solutions to its customers [8] Financial Metrics - Dipsol reported revenues of approximately $82 million for the twelve-month period ending December 31, 2024, with an estimated adjusted EBITDA of around $15 million [1] - The purchase price for Dipsol represents a multiple of approximately 10.5x its trailing twelve-month estimated adjusted EBITDA [1]