Quaker Houghton · NYSE:KWR
Quaker Houghton — Quaker Chemical — Q3 2015 Earnings Presentation
15 slides from Quaker Houghton's earnings presentation, Oct 28, 2015
Slide 1: Third Quarter 2015 Results Investor Conference Call
Quaker Chemical Corporation Third Quarter 2015 Results Investor Conference Call October 29, 2015
Slide 2: Risks and Uncertainties Statement
Risks and Uncertainties Statement Regulation G 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
Slide 3: Speakers
Speakers Michael F. Barry Chairman of the Board, Chief Executive Officer & President Shane W. Hostetter Global Controller and Principal Accounting Officer Robert T. Traub Vice President, General Counsel & Corporate Secretary Chart #1
Slide 4: Third Quarter 2015 Headlines
Third Quarter 2015 Headlines Strong operating results drive consistent non-GAAP earnings, despite an 8% negative impact from foreign exchange and lower global steel production Current quarter results include $2.8 million of one-time non-GAAP transaction expenses related to the Verkol S.A. acquisitio
Slide 5: Chairman Comments Third Quarter 2015
Chairman Comments Third Quarter 2015 Third Quarter 2015 Stable earnings and strong cash flow on margin expansion, market share gains, and recent acquisitions, which offset difficult market conditions Foreign exchange headwinds continue to have the most significant negative impact on earnings Global
Slide 6: Financial Highlights Third Quarter 2015
Financial Highlights Third Quarter 2015 1) Strong operating results drive consistent non-GAAP earnings per diluted share of $1.19, despite a negative impact of $0.09 per diluted share, or 8%, due to foreign exchange 2) One-time transaction expenses of $2.8 million, or $0.15 per diluted share, relate
Slide 7: Financial Snapshot
Financial Snapshot Q3 2015 Q3 2014 YTD 2015 YTD 2014 Net Sales ($Mils.) 189.2 198.9 554.3 571.8 Gross Margin (%) 37.7 35.4 37.6 35.6 Operating Margin (%) 9.9 10.3 10.5 10.6 Net Income attributable to Quaker Chemical Corporation ($Mils.) 14.4 15.7 39.8 43.9 Adjusted EBITDA ($Mils.) – Trailing Twelve
Slide 8: Product Volume by Quarter
Product Volume by Quarter Thousand Kilograms 55,000 61,000 49,000 25,000 31,000 37,000 43,000 4Q08 YTD Avg. 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 Chart #6
Slide 9: Gross Margin Percentage
Gross Margin Percentage 40.0% 40.0% 38.4% 37.6% 37.7% 36.6% 35.8% 35.7% 35.9% 35.4% 35.4% 34.7% 35.0% 33.7% 35.0% 32.6% 30.0% 30.0% 28.0% 25.0% 25.0% 20.0% 20.0% 2008 2009 2010 2011 2012 2013 2014 YTD 2015 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Gross Margin Percentage Gross Margin Percentage Chart
Slide 10: Adjusted EBITDA Baseline Historical Performance
Adjusted EBITDA Baseline Historical Performance 2008 –– – 2015 $99.8 $100.1 $97.0 CAGR: 14.0% $89.6 $80.9 +650 Margin bps $73.0 $66.8 13.4% 13.0% 12.8% 12.3% 12.3% $44.2 11.4% $40.1 10.7% 9.8% 6.9% 2008 2009 2010 2011 2012 2013 2014 Trailing Trailing Twelve Twelve Months Months Q3 2014 Q3 2015 Adjus
Slide 11: Balance Sheet Net Cash / (Debt)
Balance Sheet Net Cash / (Debt) $120 $80 $40 $Millions $0$0 $0 -$40 -$80 -$120 2008 2009 2010 2011 2012 2013 2014 Q3Q3 Q3 2015 Cash ST/LT Debt Net Debt Chart #9
Slide 12: Appendix
@ Quaker APPENDIX
Slide 13: Non-GAAP Earnings Per Diluted Share Reconciliation
Non-GAAP Earnings Per Diluted Share Reconciliation Q3 2015 Q3 2014 YTD 2015 YTD 2014 GAAP earnings per diluted share $1.08 $1.18 $2.98 $3.31 Equity income in a captive insurance company per diluted share $(0.04) $(0.01) $(0.09) $(0.16) Verkol transaction expenses per diluted share $0.15 $- $0.15 $-
Slide 14: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation 2008 2009 2010 2011 2012 2013 2014 Net income 9,833 16,058 32,120 45,892 47,405 56,339 56,492 Depreciation 10,879 9,525 9,867 11,455 12,252 12,339 12,306 Amortization 1,177 1,078 988 2,338 3,106 3,445 4,325 Interest expense 5,509 5,533 5,225 4,666 4,283 2,922 2,371 Tax
Slide 15: Trailing Twelve Months Adjusted EBITDA Reconciliation
Trailing Twelve Months Adjusted EBITDA Reconciliation I = G + H HH H G = F - D FF F E = C + D D DD C = B - A BB B AA A Trailing Trailing Twelve Last Three Twelve Last Three Months Q3 YTD Q3 Months Months Q3 YTD Q3 Months YTD Q3 2015 2015 2014 YTD 2014 2014 2014 2013 YTD 2013 2013 Net income 52,426 3