Quaker Houghton · NYSE:KWR
Quaker Houghton — Quaker Chemical — Q2 2018 Earnings Presentation
15 slides from Quaker Houghton's earnings presentation, Jul 30, 2018
Slide 1: Second Quarter 2018 Results Investor Conference Call
1 Second Quarter 2018 Results Investor Conference Call July 31, 2018 Quaker Chemical Corporation
Slide 2: Risks and Uncertainties Statement
Risks and Uncertainties Statement Regulation G The attached charts include C ompany 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 ongoin
Slide 3: Speakers
Speakers Michael F. Barry Chairman of the Board, Chief Executive Officer & President Mary Dean Hall Vice President, Chief Financial Officer & Treasurer Robert T. Traub Vice President, General Counsel & Corporate Secretary Chart #1
Slide 4: Second Quarter 2018 Headlines
Second Quarter 2018 Headlines ▪ 10% increase in net sales to $222.0 million driven by solid volume growth of 5% ▪ Net income of $19.2 million and earnings per diluted share of $1.44 ▪ Strong operating performance drives a 26% increase in non - GAAP earnings per diluted share to $1.56 and a 15% incre
Slide 5: Chairman Comments
Chairman Comments ▪ Second Quarter 2018 x Strong operating performance drives a 15% increase in adjusted EBITDA and, coupled with a lower effective tax rate, results in a 26% increase in non - GAAP earnings per diluted share x Net sales increase of 10% to $222.0 million driven by volume, selling pri
Slide 6: Second quarter 2018 financial highlights
▪ Strong operating performance drove a 26% increase in non - GAAP earnings per diluted share to a record of $1.56 and a 15% increase in adjusted EBITDA to a record of $32.2 million ▪ Net sales increased 10% to a record $222.0 million driven by a 5% increase in volume, a 3% increase in selling price
Slide 7: Financial Snapshot
Chart #5 Financial Snapshot ($ in Millions unless otherwise noted) Q2 2018 Q2 2017 YTD 2018 YTD 2017 Net Sales 222.0 201.2 434.0 396.1 Gross Profit 80.9 71.8 156.4 142.7 Gross Margin (%) 36.5% 35.7% 36.0% 36.0% SG&A 54.1 49.6 104.1 97.6 Combination-Related Expenses 4.3 4.3 9.5 13.4 Operating Income
Slide 8: Continued market share gains drive volume growth
Chart #6 Continued market share gains drive volume growth in the majority of regions quarter - over - quarter Product Volume by Quarter and Year in Thousands of Kilograms 100,000 140,000 180,000 220,000 260,000 300,000 25,000 35,000 45,000 55,000 65,000 75,000 Full Year Volume Quarter Volume Quarter
Slide 9: Gross Margin Percentage Trends
28.1% 35.0% 35.6% 32.7% 33.8% 35.9% 35.8% 37.7% 37.5% 35.5% 25.0% 28.0% 31.0% 34.0% 37.0% 40.0% 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Gross Margin Percentage 35.7% 35.1% 35.1% 35.6% 36.5% 33.0% 34.0% 35.0% 36.0% 37.0% 38.0% Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Gross Margin Percentage
Slide 10: Adjusted EBITDA Historical Performance
$40.1 $44.2 $66.8 $73.0 $80.9 $89.6 $99.8 $101.6 $106.6 $115.2 $110.2 $122.0 6.9% 9.8% 12.3% 10.7% 11.4% 12.3% 13.0% 13.8% 14.3% 14.1% 14.2% 14.2% 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Trailing Twelve Months Q2'17 Trailing Twelve Months Q2'18 Adjusted EBITDA ($ Mils.) Adjusted EBITDA Mar
Slide 11: Balance Sheet Cash and Debt
-$100 -$75 -$50 -$25 $0 $25 $50 $75 $100 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Q2 2018 $ Millions Cash ST/LT Debt Net Cash (Debt) Chart #9 Continued solid cash flow generation and strong balance sheet Balance Sheet Cash and Debt
Slide 12: Appendix
@ Quaker APPENDIX
Slide 13: Non-GAAP EPS Reconciliation
Chart #10 Non - GAAP EPS Reconciliation Q2 2018 Q2 2017 YTD 2018 YTD 2017 GAAP earnings per diluted share 1.44$ 0.89$ 2.40$ 1.42$ Equity income in a captive insurance company per diluted share (0.08) (0.04) (0.05) (0.08) Houghton combination-related expenses per diluted share 0.29 0.27 0.66 0.95 Tra
Slide 14: TTM Adjusted EBITDA Reconciliation
Chart #11 TTM Adjusted EBITDA Reconciliation I = G + H H G = F - D F E = C + D D C = B - A B A ($ in thousands unless otherwise noted) Trailing Twelve Months Q2 2018 YTD Q2 2018 Last Six Months 2017 FY 2017 Trailing Twelve Months Q2 2017 YTD Q2 2017 Last Six Months 2016 FY 2016 YTD Q2 2016 Net incom
Slide 15: Adjusted EBITDA Reconciliation
Chart #12 Adjusted EBITDA Reconciliation ($ in Thousands unless otherwise noted) 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Net income 9,833$ 16,058$ 32,120$ 45,892$ 47,405$ 56,339$ 56,492$ 51,180$ 61,403$ 20,278$ Depreciation 10,879 9,525 9,867 11,455 12,252 12,339 12,306 12,395 12,557 12,59