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Quaker(KWR) - 2024 Q1 - Quarterly Report
KWRQuaker(KWR)2024-05-02 20:43
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Financial Performance - Net sales for Q1 2024 were 469,759,000,adecreaseof6.1469,759,000, a decrease of 6.1% from 500,148,000 in Q1 2023[10] - Gross profit increased to 181,563,000inQ12024,up4.4181,563,000 in Q1 2024, up 4.4% from 173,450,000 in Q1 2023[10] - Operating income rose to 55,526,000,reflectinganincreaseof11.755,526,000, 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,a19.035,227,000, a 19.0% increase from 29,534,000 in Q1 2023[10] - Basic net income per share increased to 1.96,upfrom1.96, 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,downfrom12,655,000, down from 44,597,000 in Q1 2023[13] - The Company generated net income of 35.2million,or35.2 million, or 1.95 per diluted share, in Q1 2024, compared to 29.5million,or29.5 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,upfrom2.09, up from 1.89 in the prior year quarter, indicating a growth of approximately 10.6%[92] - Adjusted EBITDA for Q1 2024 was 83.3million,comparedto83.3 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,slightlyupfrom195,750,000, 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,adecreasefrom27,231,000, a decrease from 37,782,000 in Q1 2023[19] - Cash used in investing activities increased to 29.3millioninQ12024from29.3 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 6.6millioninQ12024,asignificantimprovementcomparedtocashusedinfinancingactivitiesof6.6 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 769.632million,anincreasefrom769.632 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 11.282million,downfrom11.282 million, down from 13.876 million in the same period of 2023[73] - The Company entered into 300millionnotionalamountsofinterestrateswapstoconvertvariablerateborrowingstoafixedrateof3.64300 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 769.6millionlesscashandcashequivalents[104]SegmentPerformance−SegmentoperatingearningsfortheAmericasincreasedslightlyto769.6 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 66.1millioninQ12023,whileEMEAsegmentoperatingearningsroseto66.1 million in Q1 2023, while EMEA segment operating earnings rose to 29.6 million from 27.6million[33]−TheAmericassegmentaccountedforapproximately4927.6 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 138.4million,alsoadecreaseof9138.4 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 (34.6million),enhancingitspositioninhigh−performancelubricantsandgreases[27]−RestructuringcostsincurredduringQ12024amountedto34.6 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 0.455pershare,anincreasefrom0.455 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 150millionofitsoutstandingcommonstock[112]−Noshareswereacquiredunderthe2024ShareRepurchaseProgramduringthequarterendedMarch31,2024[165]TaxandRegulatory−TheeffectivetaxrateforQ12024was27.3150 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 124.2millioninQ12024,drivenbyhigherlabor−relatedcosts[131]−ThenetperiodicbenefitcostforpensionbenefitsinQ12024was124.2 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 671,000inQ12023[55]−TheCompanyexpectstomakefullyearcashcontributionsofapproximately671,000 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]