Quaker(US:KWR)2025-10-30 20:43Financial Performance - Net sales for Q3 2025 reached $493,842,000, a 6.8% increase from $462,274,000 in Q3 2024[10] - Gross profit for Q3 2025 was $180,865,000, compared to $172,549,000 in Q3 2024, reflecting a 4.8% increase[10] - Operating income decreased to $46,641,000 in Q3 2025 from $51,718,000 in Q3 2024, a decline of 9.4%[10] - Net income attributable to Quaker Chemical Corporation for Q3 2025 was $30,469,000, down from $32,346,000 in Q3 2024, a decrease of 5.5%[10] - For the three months ended September 30, 2025, net income attributable to Quaker Chemical Corporation was $30.469 million, resulting in basic earnings per share of $1.75, compared to $32.346 million and $1.81 for the same period in 2024[90] - Adjusted EBITDA for Q3 2025 was $82.9 million, up from $78.6 million in Q3 2024, primarily due to increased net sales and consistent operating margins[131] - Non-GAAP net income for Q3 2025 was $36,270 thousand, up from $33,981 thousand in Q3 2024, reflecting an increase of 6.3%[197] Assets and Liabilities - Total assets increased to $2,816,797,000 as of September 30, 2025, up from $2,610,649,000 at the end of 2024, representing a growth of 7.9%[15] - Cash and cash equivalents decreased to $172,038,000 at the end of Q3 2025 from $188,880,000 at the end of 2024, a decline of 8.9%[15] - Long-term debt increased to $838,522,000 as of September 30, 2025, compared to $669,614,000 at the end of 2024, an increase of 25.2%[15] - Total debt as of September 30, 2025 was $875.234 million, an increase from $708.267 million as of December 31, 2024[96] - As of September 30, 2025, total net debt was approximately $703.2 million, calculated as total borrowings of $875.2 million minus cash and cash equivalents of $172.0 million[144] Cash Flow - Cash flows from operating activities for the nine months ended September 30, 2025, were $89,909,000, down from $141,514,000 for the same period in 2024, a decrease of 36.4%[19] - Cash used in investing activities was $193.0 million in the first nine months of 2025, compared to $55.8 million in the same period of 2024, primarily due to acquisitions totaling $164.2 million[141] - Cash provided by financing activities was $79.2 million in the first nine months of 2025, compared to $67.0 million used in financing activities in the prior year, driven by $168.9 million in net borrowings[142] Acquisitions - Quaker Chemical Corporation acquired Dipsol Chemicals Co., Ltd. for approximately $185.6 million, enhancing its capabilities in surface treatment and plating solutions[30] - The estimated fair value of total assets acquired from Dipsol is $172.526 million, with cash and cash equivalents amounting to $30.084 million[32] - The total liabilities assumed from Dipsol are valued at $37.504 million, resulting in goodwill of $53.042 million attributed to expected synergies[32][33] - The Company acquired Natech for approximately $6.5 million, allocating $2.1 million to intangible assets and recognizing $2.6 million of goodwill[36] - The acquisition of CSI was completed for about $3.9 million, with $1.4 million allocated to intangible assets and $1.7 million of goodwill recognized[37] - The Sutai Group was acquired for approximately $16.2 million, with $3.1 million allocated to intangible assets and $5.5 million of goodwill recognized[38] - The acquisition of IKV was valued at $35.2 million, with $15.0 million allocated to intangible assets and $16.4 million of goodwill recognized[39] Expenses and Charges - The company reported impairment charges of $88,840,000 for the nine months ended September 30, 2025, compared to no impairment charges in the same period of 2024[19] - The company incurred restructuring charges of $7.7 million in the third quarter of 2025, compared to $2.6 million in the same quarter of 2024, related to headcount reductions and facility closures[159] - Interest expense rose to $33.3 million in the first nine months of 2025, an increase of $1.4 million compared to $31.9 million in 2024, mainly due to higher outstanding borrowings[175] Segment Performance - The Americas segment generated net sales of $222,787 thousand for the three months ended September 30, 2025, representing a 1.8% increase from $220,275 thousand in the same period of 2024[51] - Americas segment net sales were $657.6 million in the first nine months of 2025, a decrease of $16.0 million or 2% compared to 2024, impacted by unfavorable foreign currency translation[186] - EMEA segment net sales increased to $413.1 million, a rise of $2.5 million or 1% compared to the first nine months of 2024, supported by acquisitions and favorable currency translation[187] - Asia/Pacific segment net sales reached $349.5 million, an increase of $38.0 million or 12% compared to the prior year, driven by acquisitions and organic sales growth[188] Tax and Regulatory Matters - The effective tax rate for the three months ended September 30, 2025 was 26.2%, a decrease from 28.9% in the same period of 2024[88] - Effective tax rate for the first nine months of 2025 was (169.5)%, compared to 29.7% in 2024, influenced by goodwill impairment charges and other factors[176] - The Company expects the provisions of the One Big Beautiful Bill Act, effective in 2025, to have no material impact on its consolidated financial statements[89] Risks and Challenges - Forward-looking statements indicate potential impacts from economic downturns, tariffs, and global supply chain constraints on business operations[203] - Risks include demand fluctuations for products and services due to customer production slowdowns and shutdowns[204] - The Company faces challenges from inflationary pressures and increases in raw material costs, affecting operational costs[206] - The Company is subject to various legislative and regulatory developments that could impact operations and financial condition[205]