Quaker(KWR) - 2025 Q1 - Quarterly Report

FINANCIAL INFORMATION Financial Statements (Unaudited) 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][29] - In February 2025, the company acquired Chemical Solutions & Innovations (Pty) Ltd. for approximately $3.9 million[31] Management's Discussion and Analysis of Financial Condition and Results of Operations 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][110] - 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] - 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] Quantitative and Qualitative Disclosures About Market Risk 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] Controls and Procedures 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] - 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] OTHER INFORMATION Legal Proceedings 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] - 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] Risk Factors 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] - 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] Unregistered Sales of Equity Securities and Use of Proceeds 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] - No shares were repurchased under the company's $150 million share repurchase program during the quarter ended March 31, 2025[170] Other Information 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] Exhibits 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] - 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]