First Quarter 2024 Results Investor Conference Call Forward-Looking Statements 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 alternative to GAAP measures of per ...

Financial Performance - Net sales for Q1 2024 were $469,759,000, a decrease of 6.1% from $500,148,000 in Q1 2023[10] - Gross profit increased to $181,563,000 in Q1 2024, up 4.4% from $173,450,000 in Q1 2023[10] - Operating income rose to $55,526,000, reflecting an increase of 11.7% compared to $49,929,000 in the same period last year[10] - Net income attributable to Quaker Chemical Corporation was $35,227,000, a 19.0% increase from $29,534,000 in Q1 2023[10] - Basic net income per share increased to $1.96, up from $1.64 in Q1 2023, representing a growth of 19.5%[10] - Comprehensive income attributable to Quaker Chemical Corporation was $12,655,000, down from $44,597,000 in Q1 2023[13] - The Company generated net income of $35.2 million, or $1.95 per diluted share, in Q1 2024, compared to $29.5 million, or $1.64 per diluted share, in Q1 2023, reflecting a year-over-year increase of 19% in net income[92] - Non-GAAP earnings per diluted share for Q1 2024 were $2.09, up from $1.89 in the prior year quarter, indicating a growth of approximately 10.6%[92] - Adjusted EBITDA for Q1 2024 was $83.3 million, compared to $78.8 million in Q1 2023, representing a year-over-year increase of 5.7%[92] Cash Flow and Investments - Cash and cash equivalents at the end of Q1 2024 were $195,750,000, slightly up from $194,527,000 at the end of Q4 2023[16] - The company reported a net cash provided by operating activities of $27,231,000, a decrease from $37,782,000 in Q1 2023[19] - Cash used in investing activities increased to $29.3 million in Q1 2024 from $6.2 million in Q1 2023, primarily due to payments related to the IKV acquisition[101] - Cash flows provided by financing activities were $6.6 million in Q1 2024, a significant improvement compared to cash used in financing activities of $24.9 million in Q1 2023[102] Debt and Financing - Total debt as of March 31, 2024, was $769.632 million, an increase from $755.612 million as of December 31, 2023[64] - The weighted average variable interest rate on outstanding borrowings under the Credit Facility was approximately 6.4% for the three months ended March 31, 2024[67] - Interest expense for the three months ended March 31, 2024, was $11.282 million, down from $13.876 million in the same period of 2023[73] - The Company entered into $300 million notional amounts of interest rate swaps to convert variable rate borrowings to a fixed rate of 3.64% plus an applicable margin[68] - Total net debt as of March 31, 2024, was approximately $573.8 million, calculated as total borrowings of $769.6 million less cash and cash equivalents[104] Segment Performance - Segment operating earnings for the Americas increased slightly to $66.8 million in Q1 2024 from $66.1 million in Q1 2023, while EMEA segment operating earnings rose to $29.6 million from $27.6 million[33] - The Americas segment accounted for approximately 49% of consolidated net sales in Q1 2024, with net sales of $229.8 million, a decrease of 9% year-over-year[142] - The EMEA segment represented approximately 29% of consolidated net sales in Q1 2024, with net sales of $138.4 million, also a decrease of 9% year-over-year[144] - The Asia/Pacific segment accounted for approximately 22% of consolidated net sales in Q1 2024, with net sales of $101.6 million, an increase of 6% year-over-year[145] Acquisitions and Restructuring - The Company acquired I.K.V. Tribologie IKVT for €32.2 million ($34.6 million), enhancing its position in high-performance lubricants and greases[27] - Restructuring costs incurred during Q1 2024 amounted to $1.9 million, with a total of approximately 120 positions expected to be reduced globally[44] Shareholder Returns - The company declared dividends of $0.455 per share, an increase from $0.435 per share in Q1 2023[10] - The Company initiated a new share repurchase program authorizing the repurchase of up to $150 million of its outstanding common stock[112] - No shares were acquired under the 2024 Share Repurchase Program during the quarter ended March 31, 2024[165] Tax and Regulatory - The effective tax rate for Q1 2024 was 27.3%, slightly down from 27.7% in Q1 2023[60] - The company anticipates continued volatility in effective tax rates due to factors such as tax audits, uncertain tax positions, and foreign tax credit valuation allowances[137] Other Financial Metrics - Total other income for Q1 2024 was $1.080 million, compared to a loss of $2.239 million in Q1 2023[58] - SG&A expenses increased by approximately $4.7 million, or 4%, to $124.2 million in Q1 2024, driven by higher labor-related costs[131] - The net periodic benefit cost for pension benefits in Q1 2024 was $588,000, down from $671,000 in Q1 2023[55] - The Company expects to make full year cash contributions of approximately $5.7 million to its pension plans in 2024[56]

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 2024 RESULTS May 2, 2024 CONSHOHOCKEN, PA – Quaker Houghton ("the Company") (NYSE: KWR), the global leader in industrial process fluids, announced its first quarter 2024 results today. | | | Three Months Ended | | | --- | --- | --- | --- | | | | March 31, | | | ($ in thousands, except per share data) | 2024 | | 2023 | | Net ...

CONSHOHOCKEN, Pa., April 22, 2024 /PRNewswire/ -- Quaker Houghton (NYSE: KWR) the global leader in industrial process fluids, today announced the release of its 2023 Sustainability Report. The report highlights how the Company combines its solutions with industry insight and intelligence to See Beyond™ the issues of today and secure a better tomorrow. Andy Tometich, Chief Executive Officer and President commented, "In 2023, we continued to advance our sustainability initiatives, making targeted investments ...

CONSHOHOCKEN, Pa., April 18, 2024 /PRNewswire/ -- Quaker Houghton (NYSE: KWR) today announced the following schedule and contact information for its first quarter 2024 earnings release and investor call. Earnings Release: Thursday, May 2, 2024 (after market close) Visit the investor relations portion of Quaker Houghton's website at https://investors.quakerhoughton.com/ Teleconference: Friday, May 3, 2024, at 8:30 a.m. (ET) Participate live by phone or listen to live audio webcas ...

Quaker Houghton Forward-Looking Statements Forward-Looking Statements Non-GAAP and Pro Forma Measures 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 (loss) before equity in net income of associated companies, in each case adjusted, as applicable, for any depreciation, amortizatio ...

Part I [Business](index=4&type=section&id=Item%201.%20Business) Quaker Houghton leads in industrial process fluids, serving diverse industries globally with a focus on R&D, sustainability, and human capital management Principal Product Line Contributions to Net Sales | Major Product Line | 2023 (%) | 2022 (%) | 2021 (%) | | :--- | :--- | :--- | :--- | | Metal removal fluids | 23.6 % | 22.9 % | 23.4 % | | Rolling lubricants | 19.5 % | 20.8 % | 22.2 % | | Hydraulic fluids | 14.1 % | 14.1 % | 13.6 % | - In 2023, the company's five largest customers accounted for approximately **12%** of consolidated net sales, with the largest single customer representing about **3%**[16](index=16&type=chunk) Research and Development Expenses | Year | R&D Expense (USD Million) | | :--- | :--- | | 2023 | $50.3 | | 2022 | $46.0 | | 2021 | $44.9 | - In February 2024, the company acquired I.K.V. Tribologie IKVT for approximately **€27.0 million** to strengthen its position in high-performance lubricants and greases[22](index=22&type=chunk) - The company has set a target to achieve carbon neutrality in its global operations by **2030** and net zero emissions across its entire value chain by **2050**[32](index=32&type=chunk) - As of December 31, 2023, Quaker Houghton had approximately **4,400** full-time employees globally, with about **900** in the U.S. and **3,500** in non-U.S. subsidiaries[27](index=27&type=chunk) [Risk Factors](index=9&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks from cyclical demand, operational challenges, international market volatility, supply chain, and regulatory compliance - Demand for the company's products is highly dependent on the business cycles of its customers in the steel, automotive, aircraft, and durable goods industries[58](index=58&type=chunk) - The top five customers accounted for approximately **12%** of 2023 consolidated net sales, making the loss of a significant customer a material risk[60](index=60&type=chunk) - Variable rate indebtedness subjects the company to interest rate risk; rising rates increase debt service obligations and could negatively affect customer demand[71](index=71&type=chunk)[73](index=73&type=chunk) - Non-U.S. subsidiaries accounted for approximately **60% to 70%** of consolidated net sales over the past three years, exposing the company to significant foreign currency fluctuation risk[78](index=78&type=chunk) - The company uses approximately **3,000** different raw materials, and significant price fluctuations, particularly for commodity chemicals and materials linked to crude oil, can materially impact costs[81](index=81&type=chunk) - Cybersecurity incidents pose a significant risk. The company relies on IT systems for daily operations, and a breach could lead to data leaks, operational disruption, and potential liability under regulations like GDPR and CCPA[105](index=105&type=chunk)[106](index=106&type=chunk)[107](index=107&type=chunk) [Unresolved Staff Comments](index=20&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports no unresolved staff comments from the SEC - None[119](index=119&type=chunk) [Cybersecurity](index=20&type=section&id=Item%201C.%20Cybersecurity) The company's cybersecurity risk management, overseen by the Audit Committee, follows the NIST framework with 24/7 monitoring and no material incidents reported - The Board, primarily through the Audit Committee, oversees management's approach to cybersecurity risks, with management providing updates at least quarterly[122](index=122&type=chunk) - The company's cybersecurity risk management program is based on the National Institute of Standards and Technology (**NIST**) framework, covering identification, protection, detection, response, and recovery[125](index=125&type=chunk) - The company operates global cybersecurity operations centers for **24/7** monitoring and incident response and conducts annual penetration and disaster recovery tests with third parties[125](index=125&type=chunk)[133](index=133&type=chunk) [Properties](index=21&type=section&id=Item%202.%20Properties) Quaker Houghton's global operations are supported by numerous owned and leased facilities, with headquarters in Conshohocken, Pennsylvania, and most owned properties mortgage-free - The corporate headquarters and a laboratory are located in Conshohocken, Pennsylvania[127](index=127&type=chunk) - Principal facilities are located globally, including sites in California, Illinois, and Ohio (Americas); Netherlands, Germany, and the U.K. (EMEA); and China, India, and Australia (Asia/Pacific)[127](index=127&type=chunk) - Most principal facilities are owned by the company and were mortgage-free as of December 31, 2023, with some key locations being leased[128](index=128&type=chunk) [Legal Proceedings](index=21&type=section&id=Item%203.%20Legal%20Proceedings) The company is involved in various legal and environmental proceedings, with management expecting no material adverse effect on financial condition or operations - The company is party to various legal proceedings, including environmental matters. For detailed information, refer to **Note 25** of the Notes to Consolidated Financial Statements[131](index=131&type=chunk) [Mine Safety Disclosures](index=21&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[132](index=132&type=chunk) [Information about our Executive Officers](index=22&type=section&id=Item%204%28a%29.%20Information%20about%20our%20Executive%20Officers) This section provides biographical information for the company's executive officers as of February 29, 2024, detailing their age, position, and business experience Executive Officers as of February 29, 2024 | Name | Age | Position | | :--- | :--- | :--- | | Andrew E. Tometich | 57 | Chief Executive Officer and President | | Joseph A. Berquist | 52 | Executive Vice President, Chief Commercial Officer | | Jeewat Bijlani | 47 | Executive Vice President, Chief Strategy Officer | | Jeffrey L. Fleck | 53 | Senior Vice President, Chief Global Supply Chain Officer | | Shane W. Hostetter | 42 | Executive Vice President, Chief Financial Officer | | Melissa Leneis | 41 | Executive Vice President, Chief Human Resources Officer | | Anna Ransley | 46 | Senior Vice President, Chief Digital Information Officer | | Dr. David Slinkman | 59 | Senior Vice President, Chief Technology Officer | | Robert T. Traub | 59 | Senior Vice President, General Counsel and Corporate Secretary | | Jeffrey J. Kutz | 64 | Vice President, Chief Accounting Officer | Part II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=24&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's common stock trades on the NYSE, with cash dividends increasing in 2023 and a new **$150 million** share repurchase program authorized in February 2024 Cash Dividends Declared per Share | Year | Total Dividends per Share ($) | | :--- | :--- | | 2023 | $1.78 | | 2022 | $1.70 | Issuer Purchases of Equity Securities (Q4 2023) | Period | Total Shares Purchased | Average Price Paid Per Share ($) | | :--- | :--- | :--- | | Oct 2023 | 15,038 | $189.09 | | Nov 2023 | 30 | $175.71 | | Dec 2023 | 111 | $207.55 | | **Total** | **15,179** | **$158.68** | - In October 2023, **14,618** shares were released to the company from an indemnification escrow account related to the Houghton combination to satisfy tax audit settlements[143](index=143&type=chunk) - The 2015 Share Repurchase Program was terminated on February 28, 2024, and a new program authorizing up to **$150 million** in repurchases was approved[143](index=143&type=chunk)[183](index=183&type=chunk) [Reserved](index=25&type=section&id=Item%206.%20Reserved) This item is reserved and contains no information [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=26&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) The company's 2023 performance showed increased net sales and significant net income recovery, driven by gross margin improvements and strong operating cash flow [Executive Summary](index=26&type=section&id=Executive%20Summary) The company's 2023 performance saw a **1%** net sales increase to **$1.95 billion**, significant net income recovery, and **25%** Adjusted EBITDA growth, driven by improved margins and strong cash flow 2023 Key Financial Results vs. 2022 | Metric | 2023 (USD) | 2022 (USD) | Change | | :--- | :--- | :--- | :--- | | Net Sales | $1,953.3M | $1,943.6M | +1% | | Net Income (Loss) | $112.7M | ($15.9M) | N/A | | Diluted EPS | $6.26 | ($0.89) | N/A | | Non-GAAP Net Income | $137.6M | $105.3M | +30.7% | | Non-GAAP Diluted EPS | $7.65 | $5.87 | +30.3% | | Adjusted EBITDA | $320.4M | $257.2M | +25% | - The **1%** increase in net sales was driven by a **7%** increase in selling price/mix and **1%** favorable FX, offset by a **7%** decline in sales volumes[149](index=149&type=chunk) - Net operating cash flow increased significantly to **$279.0 million** in 2023 from **$41.8 million** in 2022, driven by improved operating performance and better working capital management[152](index=152&type=chunk) [Critical Accounting Policies and Estimates](index=27&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) The company's critical accounting policies involve significant judgments and estimates, particularly for credit losses, tax exposures, and the valuation of goodwill and other intangible assets - The consolidated allowance for credit losses was **$13.3 million** as of December 31, 2023, compared to **$13.5 million** in 2022[155](index=155&type=chunk) - The company's consolidated goodwill was **$512.5 million** at the end of 2023. No impairment was recorded in 2023, but a **$93.0 million** impairment charge was taken for the EMEA reporting unit in Q4 2022[160](index=160&type=chunk)[161](index=161&type=chunk) - The EMEA reporting unit's goodwill is sensitive to impairment risk. A **3.0 percentage point** increase in the WACC or a **4.0 percentage point** decline in the compound annual revenue growth rate could lead to full impairment of its remaining goodwill[162](index=162&type=chunk) [Liquidity and Capital Resources](index=29&type=section&id=Liquidity%20and%20Capital%20Resources) The company's cash increased to **$194.5 million** in 2023, driven by **$279.0 million** in operating cash flow, used primarily for debt repayment and a new **$150 million** share repurchase program Cash Flow Summary (2023 vs. 2022) | Cash Flow Activity | 2023 (USD Million) | 2022 (USD Million) | | :--- | :--- | :--- | | Net Cash from Operating Activities | $279.0 | $41.8 | | Net Cash Used in Investing Activities | ($27.6) | ($40.2) | | Net Cash (Used in) Provided by Financing Activities | ($238.6) | $24.7 | - As of December 31, 2023, the company had **$744.5 million** in borrowings outstanding under its Credit Facility and approximately **$465.7 million** of unused capacity under its revolver[171](index=171&type=chunk) - In Q1 2023, the company entered into **$300.0 million** of three-year interest rate swaps to convert a portion of its variable-rate debt to a fixed rate, managing interest rate risk[173](index=173&type=chunk) - A new share repurchase program authorizing up to **$150 million** was approved on February 28, 2024, replacing the previous 2015 program[183](index=183&type=chunk) Contractual Obligations as of December 31, 2023 (in thousands) | Contractual Obligations | Total (USD Thousands) | 2024 (USD Thousands) | 2025 (USD Thousands) | 2026 (USD Thousands) | 2027 (USD Thousands) | 2028 (USD Thousands) | 2029 and Beyond (USD Thousands) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Long-term debt | $755,046 | $23,250 | $36,955 | $36,914 | $647,899 | $10,028 | $— | | Interest obligations | $155,556 | $46,855 | $44,948 | $42,601 | $20,977 | $175 | $— | | Operating leases | $39,694 | $13,130 | $9,027 | $6,840 | $3,543 | $1,909 | $5,245 | | Purchase obligations | $1,285,259 | $1,282,910 | $783 | $783 | $783 | $— | $— | | **Total** | **$2,266,986** | **$1,384,494** | **$96,439** | **$87,496** | **$673,461** | **$12,127** | **$12,969** | [Non-GAAP Measures](index=32&type=section&id=Non-GAAP%20Measures) The company utilizes non-GAAP financial measures, including Adjusted EBITDA and non-GAAP EPS, to offer supplemental performance insights by excluding non-core operational items Reconciliation of Net Income to Adjusted EBITDA (in thousands) | | 2023 (USD Thousands) | 2022 (USD Thousands) | 2021 (USD Thousands) | | :--- | :--- | :--- | :--- | | Net income (loss) attributable to Quaker | $112,748 | ($15,931) | $121,369 | | Depreciation and amortization | $83,020 | $81,514 | $87,728 | | Interest expense, net | $50,699 | $32,579 | $22,326 | | Taxes on income (loss) | $55,585 | $24,925 | $34,939 | | **EBITDA** | **$302,052** | **$123,087** | **$266,362** | | Adjustments (e.g., Restructuring, Impairment) | $18,327 | $134,063 | $7,747 | | **Adjusted EBITDA** | **$320,379** | **$257,150** | **$274,109** | Reconciliation of GAAP EPS to Non-GAAP EPS | | 2023 (USD) | 2022 (USD) | 2021 (USD) | | :--- | :--- | :--- | :--- | | GAAP earnings (loss) per diluted share | $6.26 | ($0.89) | $6.70 | | Adjustments (per share) | $1.39 | $6.76 | $0.18 | | **Non-GAAP earnings per diluted share** | **$7.65** | **$5.87** | **$6.88** | [Operations](index=37&type=section&id=Operations) Consolidated net sales increased **1%** in 2023 to **$1.95 billion**, driven by price/mix gains offsetting volume declines, resulting in improved gross margin and operating income across all segments - **2023 vs. 2022:** Net sales increased **1%** due to a **7%** price/mix increase and **1%** favorable FX, offset by a **7%** volume decline. Gross margin improved to **36.1%** from **31.5%**[196](index=196&type=chunk)[198](index=198&type=chunk) - **2022 vs. 2021:** Net sales increased **10%** due to a **22%** price/mix increase, offset by a **7%** volume decline and **6%** unfavorable FX. Gross margin decreased to **31.5%** from **33.8%** due to significant raw material cost inflation[208](index=208&type=chunk)[210](index=210&type=chunk) Segment Operating Earnings (in millions) | Segment | 2023 (USD Million) | 2022 (USD Million) | 2021 (USD Million) | | :--- | :--- | :--- | :--- | | Americas | $266.0 | $223.6 | $176.3 | | EMEA | $104.8 | $76.4 | $111.0 | | Asia/Pacific | $118.5 | $105.8 | $109.2 | [Quantitative and Qualitative Disclosures About Market Risk](index=42&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Quaker Houghton faces market risks from interest rates, foreign currency, commodity prices, and credit, with mitigation strategies including interest rate swaps and credit loss allowances - A **100 basis point** change in interest rates would result in an approximate **$7.4 million** change to annual interest expense, based on debt levels as of December 31, 2023[237](index=237&type=chunk) - A hypothetical **10%** strengthening or weakening of key foreign currencies against the U.S. dollar would have impacted 2023 revenues by approximately **$100.7 million** and pre-tax earnings by about **$12.8 million**[239](index=239&type=chunk) - A **one percentage point** change in gross margin would have increased or decreased the company's 2023 pre-tax earnings by approximately **$19.5 million**, highlighting sensitivity to commodity price risk[241](index=241&type=chunk) - In Q1 2023, the company entered into **$300.0 million** of interest rate swaps to convert a portion of its variable-rate debt to a fixed rate, mitigating interest rate risk[238](index=238&type=chunk) [Financial Statements and Supplementary Data](index=44&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents the company's audited consolidated financial statements for fiscal year 2023, including statements of operations, balance sheets, cash flows, and comprehensive notes Consolidated Statement of Operations Highlights (Year Ended Dec 31, in thousands) | | 2023 (USD Thousands) | 2022 (USD Thousands) | 2021 (USD Thousands) | | :--- | :--- | :--- | :--- | | Net sales | $1,953,313 | $1,943,585 | $1,761,150 | | Gross profit | $705,644 | $612,654 | $594,640 | | Operating income | $214,495 | $52,304 | $150,460 | | Net income (loss) attributable to Quaker | $112,748 | ($15,931) | $121,360 | Consolidated Balance Sheet Highlights (As of Dec 31, in thousands) | | 2023 (USD Thousands) | 2022 (USD Thousands) | | :--- | :--- | :--- | | Total current assets | $927,889 | $994,130 | | Total assets | $2,714,211 | $2,821,620 | | Total current liabilities | $367,510 | $354,780 | | Total liabilities | $1,329,289 | $1,543,030 | | Total equity | $1,384,922 | $1,278,580 | Consolidated Statement of Cash Flows Highlights (Year Ended Dec 31, in thousands) | | 2023 (USD Thousands) | 2022 (USD Thousands) | 2021 (USD Thousands) | | :--- | :--- | :--- | :--- | | Net cash provided by operating activities | $279,020 | $41,794 | $48,933 | | Net cash used in investing activities | ($27,621) | ($40,191) | ($49,130) | | Net cash (used in) provided by financing activities | ($238,606) | $24,672 | ($13,465) | [Changes in and Disagreements With Accountants on Accounting and Financial Disclosure](index=96&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20With%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) This item is not applicable as there were no changes in or disagreements with accountants on accounting and financial disclosure - Not Applicable[518](index=518&type=chunk) [Controls and Procedures](index=96&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that disclosure controls and internal control over financial reporting were effective as of December 31, 2023, with no material changes identified - The principal executive officer and principal financial officer concluded that disclosure controls and procedures were effective as of December 31, 2023[519](index=519&type=chunk) - Management concluded that the company's internal control over financial reporting was effective as of December 31, 2023, based on the **COSO** framework[522](index=522&type=chunk) [Other Information](index=96&type=section&id=Item%209B.%20Other%20Information) During the fourth quarter ended December 31, 2023, no director or officer adopted or terminated any Rule 10b5-1 trading arrangement or any non-Rule 10b5-1 trading arrangement - No director or officer adopted or terminated a **Rule 10b5-1** or non-Rule 10b5-1 trading arrangement during the fourth quarter of 2023[524](index=524&type=chunk) [Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](index=96&type=section&id=Item%209C.%20Disclosure%20Regarding%20Foreign%20Jurisdictions%20that%20Prevent%20Inspections) This item is not applicable to the company - Not applicable[525](index=525&type=chunk) Part III [Directors, Executive Officers and Corporate Governance](index=97&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information on directors, executive officers, and corporate governance is incorporated by reference from the company's 2024 Proxy Statement - Information is incorporated by reference from the 2024 Proxy Statement[528](index=528&type=chunk) [Executive Compensation](index=97&type=section&id=Item%2011.%20Executive%20Compensation) Detailed information regarding executive compensation is incorporated by reference from the company's definitive Proxy Statement for the 2024 Annual Meeting of Shareholders - Information is incorporated by reference from the 2024 Proxy Statement[529](index=529&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=97&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Information on security ownership and equity compensation plans is incorporated by reference from the company's 2024 Proxy Statement, with a summary of available securities provided Equity Compensation Plan Information as of December 31, 2023 | Plan Category | Securities to be issued upon exercise (a) | Weighted-average exercise price (b) ($) | Securities available for future issuance (c) | | :--- | :--- | :--- | :--- | | Equity compensation plans approved by security holders | 62,853 | $214.40 | 460,407 | | **Total** | **62,853** | **$214.40** | **460,407** | [Certain Relationships and Related Transactions, and Director Independence](index=97&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Information regarding certain relationships, related party transactions, and director independence is incorporated by reference from the company's definitive Proxy Statement for the 2024 Annual Meeting of Shareholders - Information is incorporated by reference from the 2024 Proxy Statement[532](index=532&type=chunk) [Principal Accountant Fees and Services](index=97&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) Information regarding the fees paid to and services provided by the principal accountant, PricewaterhouseCoopers LLP, is incorporated by reference from the company's definitive Proxy Statement for the 2024 Annual Meeting of Shareholders - Information is incorporated by reference from the 2024 Proxy Statement[533](index=533&type=chunk) Part IV [Exhibits and Financial Statement Schedules](index=98&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists the financial statements, schedules, and exhibits filed with the Form 10-K report, including an index to consolidated financial statements and various corporate documents - This section provides an index to the financial statements (**pages 42-49**) and lists all exhibits filed with the report, including material contracts and officer certifications[534](index=534&type=chunk)[536](index=536&type=chunk) [Form 10-K Summary](index=101&type=section&id=Item%2016.%20Form%2010-K%20Summary) The company has elected not to provide a summary of the Form 10-K report under this item - The Company has elected not to include a Form 10-K summary[540](index=540&type=chunk)

[Executive Summary & Consolidated Results Overview](index=1&type=section&id=Executive%20Summary%20%26%20Consolidated%20Results%20Overview) This chapter provides an overview of Quaker Houghton's financial performance, highlighting key consolidated results for Q4 and full year 2023, along with strategic highlights [Fourth Quarter 2023 Consolidated Results](index=1&type=section&id=Fourth%20Quarter%202023%20Consolidated%20Results) Q4 2023 saw a 4% net sales decrease, but Quaker Houghton achieved a $20.2 million net income and 13% Adjusted EBITDA growth, reversing a prior year net loss Q4 2023 Consolidated Financial Performance | Metric | Q4 2023 ($ in thousands) | Q4 2022 ($ in thousands) | Change (%) | | :----------------------------------- | :----------------------- | :----------------------- | :--------- | | Net sales | 467,109 | 484,808 | -3.65% | | Net income (loss) attributable to Quaker Chemical Corporation | 20,198 | (75,957) | N/A | | Net income (loss) attributable to Quaker Chemical Corporation common shareholders – diluted | 1.12 | (4.24) | N/A | | Non-GAAP net income | 31,949 | 25,001 | 27.79% | | Non-GAAP earnings per diluted share | 1.78 | 1.39 | 28.06% | | Adjusted EBITDA | 76,964 | 67,923 | 13.31% | * The decrease in Q4 2023 net sales was primarily driven by a **~4% decrease in selling price and product mix** and a **~1% decrease in sales volumes**, partially offset by a **1% favorable foreign currency translation**[4](index=4&type=chunk) * Adjusted EBITDA increased by approximately **13% year-over-year** in Q4 2023, primarily reflecting an improvement in gross margins[5](index=5&type=chunk) [Full Year 2023 Highlights & CEO Commentary](index=1&type=section&id=Full%20Year%202023%20Highlights%20%26%20CEO%20Commentary) For the full year 2023, Quaker Houghton achieved record net sales and earnings, demonstrating significant profitability improvement and generating record operating cash flow FY 2023 Consolidated Financial Performance | Metric | FY 2023 ($ in thousands) | FY 2022 ($ in thousands) | Change (%) | | :----------------------------------- | :----------------------- | :----------------------- | :--------- | | Net sales | 1,953,313 | 1,943,585 | 0.50% | | Net income (loss) attributable to Quaker Chemical Corporation | 112,748 | (15,931) | N/A | | Net income (loss) attributable to Quaker Chemical Corporation common shareholders – diluted | 6.26 | (0.89) | N/A | | Non-GAAP net income | 137,643 | 105,320 | 30.69% | | Non-GAAP earnings per diluted share | 7.65 | 5.87 | 30.32% | | Adjusted EBITDA | 320,379 | 257,150 | 24.59% | | Operating cash flow | 279,000 | N/A | N/A | * Quaker Houghton delivered record full year adjusted EBITDA of **$320.4 million** and operating cash flow of **$279.0 million** in 2023[6](index=6&type=chunk) * The Board of Directors approved a new share repurchase program of up to **$150 million** of its common stock, effective immediately with no expiration date[6](index=6&type=chunk) [Business Outlook & Segment Performance](index=3&type=section&id=Business%20Outlook%20%26%20Segment%20Performance) This chapter outlines the company's forward-looking expectations for market conditions and earnings growth, alongside a detailed analysis of segment-specific financial results for Q4 and full year 2023 [Business Outlook](index=3&type=section&id=Business%20Outlook) The company anticipates current market conditions to persist through the first half of 2024 but expects to achieve another year of earnings growth due to ongoing strategic actions and new business wins * Current market conditions are expected to persist through the first half of 2024[7](index=7&type=chunk) * The Company expects to deliver another year of earnings growth in 2024, benefiting from advancing its enterprise strategy and earning new business[7](index=7&type=chunk) * The balance sheet and cash generation capabilities are strong, with a commitment to capital allocation priorities aimed at enhancing shareholder value[7](index=7&type=chunk) [Fourth Quarter and Full Year 2023 Segment Results](index=3&type=section&id=Fourth%20Quarter%20and%20Full%20Year%202023%20Segment%20Results) In Q4 2023, Americas net sales declined, while EMEA and Asia/Pacific net sales remained consistent; for the full year, all segments saw increased operating earnings due to improved margins * The Company's reportable segments are Americas, EMEA, and Asia/Pacific, following a reorganization effective January 1, 2023[8](index=8&type=chunk)[30](index=30&type=chunk) [Segment Net Sales Analysis](index=3&type=section&id=Segment%20Net%20Sales%20Analysis) Americas segment net sales declined in Q4 2023 due to lower volumes and price/mix, while EMEA and Asia/Pacific maintained consistent net sales, with full year 2023 showing increased selling price and product mix across all segments Segment Net Sales by Region | Segment | Q4 2023 Net Sales ($ in thousands) | Q4 2022 Net Sales ($ in thousands) | FY 2023 Net Sales ($ in thousands) | FY 2022 Net Sales ($ in thousands) | | :---------- | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | | Americas | 226,564 | 243,937 | 977,095 | 946,516 | | EMEA | 135,745 | 135,769 | 571,347 | 562,508 | | Asia/Pacific | 104,800 | 105,102 | 404,871 | 434,561 | | Total | 467,109 | 484,808 | 1,953,313 | 1,943,585 | * Americas Q4 2023 net sales declined due to decreased sales volumes and selling price/product mix, partially offset by favorable foreign currency translation[10](index=10&type=chunk)[11](index=11&type=chunk) * EMEA Q4 2023 net sales were consistent year-over-year, as increased sales volumes and favorable foreign currency translation were offset by a decline in selling price and product mix[10](index=10&type=chunk) * Asia/Pacific Q4 2023 net sales were also consistent, with increased sales volumes offsetting declines in selling price/product mix and unfavorable foreign currency translation[10](index=10&type=chunk) * Selling price and product mix increased in all segments for the full year 2023 compared to 2022[11](index=11&type=chunk) [Segment Operating Earnings Analysis](index=3&type=section&id=Segment%20Operating%20Earnings%20Analysis) All three segments experienced an increase in operating earnings for both Q4 and full year 2023, primarily attributed to improved operating margins consistent with ongoing initiatives Segment Operating Earnings by Region | Segment | Q4 2023 Operating Earnings ($ in thousands) | Q4 2022 Operating Earnings ($ in thousands) | FY 2023 Operating Earnings ($ in thousands) | FY 2022 Operating Earnings ($ in thousands) | | :---------- | :---------------------------------------- | :---------------------------------------- | :---------------------------------------- | :---------------------------------------- | | Americas | 61,756 | 59,547 | 266,036 | 223,629 | | EMEA | 23,735 | 17,562 | 104,811 | 76,364 | | Asia/Pacific | 31,854 | 29,696 | 118,458 | 105,842 | | Total | 117,345 | 106,805 | 489,305 | 405,835 | * Operating earnings increased in all three segments in Q4 2023 compared to the prior year, and also for the full year 2023[13](index=13&type=chunk) * The increase in operating earnings was primarily driven by an improvement in operating margins across all segments, consistent with the Company's ongoing margin improvement initiatives[13](index=13&type=chunk) [Financial Position & Strategic Actions](index=3&type=section&id=Financial%20Position%20%26%20Strategic%20Actions) This chapter details Quaker Houghton's improved cash flow and liquidity, along with recent strategic developments including an acquisition and a new share repurchase program [Cash Flow and Liquidity](index=3&type=section&id=Cash%20Flow%20and%20Liquidity) Quaker Houghton significantly improved its net operating cash flow in 2023, reaching a record $279.0 million, while also reducing total gross debt to $755.6 million and net debt to approximately $561.1 million * The Company generated **$279.0 million** in net operating cash flow for the full year 2023, a significant improvement of **$237.2 million** compared to **$41.8 million** in 2022[14](index=14&type=chunk) * Total gross debt decreased to **$755.6 million** at December 31, 2023, from **$933.6 million** at the end of 2022[15](index=15&type=chunk) * Net debt was approximately **$561.1 million** as of December 31, 2023, with a net debt to trailing twelve months adjusted EBITDA ratio of approximately **1.8x**[15](index=15&type=chunk) [Recent Strategic Developments](index=5&type=section&id=Recent%20Strategic%20Developments) In February 2024, Quaker Houghton expanded its EMEA segment through the acquisition of I.K.V. Tribologie (IKVT), and the Board of Directors approved a new $150 million share repurchase program * In February 2024, Quaker Houghton acquired I.K.V. Tribologie (IKVT) and its subsidiaries for approximately **27.0 million EUR** (**$29.1 million**)[17](index=17&type=chunk) * IKVT specializes in high-performance lubricants and greases for automotive, aerospace, electronics, and other industrial markets, and will be part of the Company's EMEA segment[17](index=17&type=chunk) * The Board of Directors approved a new share repurchase program, authorizing the Company to repurchase up to **$150 million** of its common stock, effective immediately[18](index=18&type=chunk) [Non-GAAP Financial Measures](index=5&type=section&id=Non-GAAP%20Financial%20Measures) This chapter explains Quaker Houghton's use of non-GAAP financial measures, providing reconciliations for operating income, EBITDA, and earnings per diluted share, along with notes on adjustments and segment reporting [Explanation of Non-GAAP Measures](index=5&type=section&id=Explanation%20of%20Non-GAAP%20Measures) Quaker Houghton utilizes non-GAAP financial measures to provide supplemental information, excluding non-recurring or non-core items to offer a clearer understanding of financial performance and facilitate comparisons * Non-GAAP financial measures (EBITDA, adjusted EBITDA, non-GAAP operating income, non-GAAP net income, non-GAAP EPS) are provided as supplemental information to enhance understanding of financial performance, indicate future operating performance, and facilitate comparison among fiscal periods[19](index=19&type=chunk) * These non-GAAP measures exclude items not indicative of future operating performance or not considered core to the Company's operations[19](index=19&type=chunk) * Definitions are provided for EBITDA (net income before D&A, interest, taxes), adjusted EBITDA (EBITDA +/- non-core items), non-GAAP operating income (operating income +/- non-core items), and non-GAAP net income/EPS (adjusted EBITDA less adjusted D&A, interest, and taxes)[20](index=20&type=chunk)[21](index=21&type=chunk) [Non-GAAP Operating Income and Margin Reconciliations](index=6&type=section&id=Non-GAAP%20Operating%20Income%20and%20Margin%20Reconciliations) This section provides a reconciliation of GAAP operating income to non-GAAP operating income and margin for the three and twelve months ended December 31, 2023 and 2022, adjusting for specific items Non-GAAP Operating Income and Margin Reconciliation | Metric | Q4 2023 ($ in thousands) | Q4 2022 ($ in thousands) | FY 2023 ($ in thousands) | FY 2022 ($ in thousands) | | :-------------------------- | :----------------------- | :----------------------- | :----------------------- | :----------------------- | | Operating income (loss) | 48,253 | (53,611) | 214,495 | 52,304 | | Non-GAAP operating income | 50,884 | 48,984 | 227,774 | 177,891 | | Non-GAAP operating margin (%) | 10.9% | 10.1% | 11.7% | 9.2% | [EBITDA, Adjusted EBITDA, and Non-GAAP Net Income Reconciliations](index=6&type=section&id=EBITDA%2C%20Adjusted%20EBITDA%2C%20and%20Non-GAAP%20Net%20Income%20Reconciliations) This section details the reconciliation from GAAP net income to EBITDA, Adjusted EBITDA, and non-GAAP net income for the three and twelve months ended December 31, 2023 and 2022, by adjusting for various non-core items EBITDA, Adjusted EBITDA, and Non-GAAP Net Income Reconciliation | Metric | Q4 2023 ($ in thousands) | Q4 2022 ($ in thousands) | FY 2023 ($ in thousands) | FY 2022 ($ in thousands) | | :-------------------------- | :----------------------- | :----------------------- | :----------------------- | :----------------------- | | Net income (loss) attributable to Quaker Chemical Corporation | 20,198 | (75,957) | 112,748 | (15,931) | | EBITDA | 71,591 | (33,083) | 302,052 | 123,087 | | Adjusted EBITDA | 76,964 | 67,923 | 320,379 | 257,150 | | Adjusted EBITDA margin (%) | 16.5% | 14.0% | 16.4% | 13.2% | | Non-GAAP net income | 31,949 | 25,001 | 137,643 | 105,320 | [Non-GAAP Earnings per Diluted Share Reconciliations](index=8&type=section&id=Non-GAAP%20Earnings%20per%20Diluted%20Share%20Reconciliations) This section provides a reconciliation of GAAP earnings per diluted share to non-GAAP earnings per diluted share for the three and twelve months ended December 31, 2023 and 2022, by adjusting for various non-core items Non-GAAP Earnings per Diluted Share Reconciliation | Metric | Q4 2023 ($) | Q4 2022 ($) | FY 2023 ($) | FY 2022 ($) | | :-------------------------------------------------------------------------------- | :---------- | :---------- | :---------- | :---------- | | GAAP earnings (loss) per diluted share attributable to Quaker Chemical Corporation common shareholders | 1.12 | (4.24) | 6.26 | (0.89) | | Non-GAAP earnings per diluted share | 1.78 | 1.39 | 7.65 | 5.87 | [Notes on Non-GAAP and Segment Measures](index=8&type=section&id=Notes%20on%20Non-GAAP%20and%20Segment%20Measures) This section provides detailed explanations for adjustments made in non-GAAP reconciliations and clarifies the company's segment reporting structure, which was reorganized effective January 1, 2023 * Combination, integration, and other acquisition-related expenses (credits) in 2022 included legal, financial, and advisory costs for integration activities and other acquisitions, as well as income/expenses related to indemnification assets and a gain from the sale of real property assets[28](index=28&type=chunk) * Depreciation and amortization adjustments include amortization expense related to the fair value step-up for a Houghton joint venture in Korea[28](index=28&type=chunk) * Adjusted taxes on income include current and deferred income tax impacts of reconciling items and specific tax charges/benefits not considered core or indicative of future performance, such as tax law changes, valuation allowance adjustments, and withholding taxes for repatriation of non-U.S. earnings[28](index=28&type=chunk) * The Company reorganized its executive management team and business structure into three reportable segments: Americas, EMEA, and Asia/Pacific, effective January 1, 2023, with prior period information recast accordingly[27](index=27&type=chunk)[30](index=30&type=chunk) [Consolidated Financial Statements](index=12&type=section&id=Consolidated%20Financial%20Statements) This chapter presents Quaker Houghton's unaudited consolidated financial statements, including statements of operations, balance sheets, and cash flows for the specified periods [Consolidated Statements of Operations](index=12&type=section&id=Consolidated%20Statements%20of%20Operations) The unaudited consolidated statements of operations present the company's financial performance for the three and twelve months ended December 31, 2023 and 2022, detailing net sales, gross profit, operating expenses, and net income (loss) Consolidated Statements of Operations | Metric | Q4 2023 ($ in thousands) | Q4 2022 ($ in thousands) | FY 2023 ($ in thousands) | FY 2022 ($ in thousands) | | :---------------------------------------------------------------- | :----------------------- | :----------------------- | :----------------------- | :----------------------- | | Net sales | 467,109 | 484,808 | 1,953,313 | 1,943,585 | | Gross profit | 171,156 | 156,270 | 705,644 | 612,654 | | Operating income (loss) | 48,253 | (53,611) | 214,495 | 52,304 | | Income (loss) before taxes and equity in net income of associated companies | 34,184 | (68,049) | 153,124 | 7,118 | | Net income (loss) attributable to Quaker Chemical Corporation | 20,198 | (75,957) | 112,748 | (15,931) | | Diluted EPS | 1.12 | (4.24) | 6.26 | (0.89) | [Consolidated Balance Sheets](index=13&type=section&id=Consolidated%20Balance%20Sheets) The unaudited consolidated balance sheets provide a snapshot of Quaker Houghton's financial position as of December 31, 2023 and 2022, detailing assets, liabilities, and equity Consolidated Balance Sheets | Metric | December 31, 2023 ($ in thousands) | December 31, 2022 ($ in thousands) | | :------------------------------------ | :--------------------------------- | :--------------------------------- | | Total current assets | 927,889 | 994,137 | | Total assets | 2,714,211 | 2,821,622 | | Total current liabilities | 367,510 | 354,786 | | Long-term debt | 730,623 | 933,561 | | Total liabilities | 1,329,289 | 1,543,037 | | Total Quaker shareholders' equity | 1,384,319 | 1,277,918 | | Total equity | 1,384,922 | 1,278,585 | [Consolidated Statements of Cash Flows](index=15&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) The unaudited consolidated statements of cash flows outline the cash generated and used by Quaker Houghton across operating, investing, and financing activities for the years ended December 31, 2023 and 2022 Consolidated Statements of Cash Flows | Metric | FY 2023 ($ in thousands) | FY 2022 ($ in thousands) | | :-------------------------------------- | :----------------------- | :----------------------- | | Net cash provided by operating activities | 279,020 | 41,794 | | Net cash used in investing activities | (27,621) | (40,191) | | Net cash (used in) provided by financing activities | (238,606) | 24,672 | | Net increase in cash, cash equivalents and restricted cash | 13,564 | 15,787 | | Cash, cash equivalents and restricted cash at the end of the period | 194,527 | 180,963 | [Additional Information](index=11&type=section&id=Additional%20Information) This chapter provides important context regarding forward-looking statements, details for the investor conference call, and an overview of Quaker Houghton's global leadership in industrial process fluids [Forward-Looking Statements](index=11&type=section&id=Forward-Looking%20Statements) This section contains forward-looking statements based on assumptions and expectations about future events, subject to various risks and uncertainties, with the company disclaiming any obligation to update them * Forward-looking statements are based on assumptions and expectations about future events and are subject to risks and uncertainties[32](index=32&type=chunk) * Major risks include demand for products, raw material costs, supply chain disruptions, customer financial instability, rising interest rates, economic recession, geopolitical disruptions, foreign currency fluctuations, and cyber-security breaches[32](index=32&type=chunk) * The Company disclaims any duty or obligation to update or revise any forward-looking statements[32](index=32&type=chunk) [Conference Call Details](index=11&type=section&id=Conference%20Call%20Details) Quaker Houghton announced details for its investor conference call to discuss fourth quarter and full year 2023 performance, scheduled for March 1, 2024, at 8:30 a.m. ET * An investor conference call to discuss Q4 and full year 2023 performance is scheduled for Friday, March 1, 2024, at **8:30 a.m. ET**[33](index=33&type=chunk) * A live webcast and supplemental information can be accessed through the Company's Investor Relations website or by dialing **877-269-7756**[33](index=33&type=chunk) [About Quaker Houghton](index=11&type=section&id=About%20Quaker%20Houghton) Quaker Houghton is recognized as the global leader in industrial process fluids, operating in over 25 countries and serving a diverse customer base with high-performing, innovative, and sustainable solutions * Quaker Houghton is the global leader in industrial process fluids, with operations in over **25 countries**[34](index=34&type=chunk) * Customers include thousands of advanced and specialized companies in steel, aluminum, automotive, aerospace, offshore, container, mining, and metalworking industries[34](index=34&type=chunk) * The company provides high-performing, innovative, and sustainable solutions, supported by approximately **4,400 employees** including chemists, engineers, and industry experts[34](index=34&type=chunk)

Quaker Chemical Corporation (NYSE:KWR) Q3 2023 Earnings Call Transcript November 3, 2023 8:30 AM ET Company Participants Jeffrey Schnell - Vice President, Investor Relations Andy Tometich - President and Chief Executive Officer Shane Hostetter - Executive Vice President and Chief Financial Officer Conference Call Participants Mike Harrison - Seaport Research Partners Vincent Anderson - Stifel Justin Ages - CJS Securities Arun Viswanathan - RBC Capital Markets David Begleiter - Deutsche Bank Operator Greetin ...

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