Quaker Houghton · NYSE:KWR
Quaker Houghton — Quaker Chemical — Q2 2020 Earnings Presentation
24 slides from Quaker Houghton's earnings presentation, Aug 5, 2020
Slide 1: Quaker Houghton Second Quarter 2020 Results Investor Conference Call
Quaker Houghton Second Quarter 2020 Results Investor Conference Call
Slide 2: Regulation G and Forward-Looking Statements
On August 1, 2019, Quaker Chemical Corporation (the “Company”, also known as Quaker Houghton) completed its combination with Hou ghton International, Inc. (“Houghton”) (herein referred to as “the Combination”). In addition, the Company acquired the operating divisions of Norman Hay plc (“Norman Hay”
Slide 3: Speakers
Michael F. Barry Chairman of the Board, Chief Executive Officer & President Mary Dean Hall Senior Vice President, Chief Financial Officer & Treasurer Robert T. Traub Senior Vice President, General Counsel & Corporate Secretary Shane W. Hostetter Vice President, Finance & Chief Accounting Officer ©20
Slide 4: Second Quarter 2020 Headlines
©2019 Quaker Houghton. All Rights Reserved 4 Second Quarter 2020 Headlines • Net sales of $286.0 million decreased 27% compared to prior year pro forma net sales primarily due to volume declines resulting from the impact of COVID - 19 • GAAP net loss of $7.7 million or $0.43 per diluted share; non -
Slide 5: Chairman Comments
©2019 Quaker Houghton. All Rights Reserved 5 Chairman Comments Second Quarter of 2020 • Current quarter adjusted EBITDA consistent with our guidance of being down nearly half of the first quarter 2020 • 27% decline in global revenues from pro forma second quarter 2019 driven by significant net sales
Slide 6: Financial Highlights – Actual Results
©2019 Quaker Houghton. All Rights Reserved 6 Financial Highlights – Actual Results Second quarter of 2020 • Net sales of $286.0 million include net sales from Houghton and Norman Hay of $142.5 million; excluding Houghton and Norman Hay, net sales declined approximately 30% driven by lower volumes of
Slide 7: Financial Highlights – Non-GAAP & Pro Forma
©2019 Quaker Houghton. All Rights Reserved 7 Financial Highlights – Non - GAAP & Pro Forma Second quarter of 2020 Non - GAAP Results • Non - GAAP EPS decreased to $0.21 compared to $1.56 in the prior year as the negative impact of COVID - 19 more than offset additional Houghton and Norman Hay earnin
Slide 8: Financial Snapshot
©2019 Quaker Houghton. All Rights Reserved 8 Financial Snapshot ( dollars in millions, unless otherwise noted) (1) Certain amounts may not calculate due to rounding (2) Pro forma results for Q2 2020 and YTD 2020 presented above are the actual results for Quaker Houghton Q2 2020 Q2 2019 YTD 2020 YTD
Slide 9: Pro Forma Adjusted EBITDA
©2019 Quaker Houghton. All Rights Reserved 9 Pro Forma Adjusted EBITDA (dollars in millions) $215 $221 $236 $234 $214 $200 $213 $225 $238 $250 2016 2017 2018 2019 TTM Q2 2020 Q2’20 adjusted EBITDA significantly impacted by COVID - 19 but continues to be in line with guidance $57 $32 $20 $33 $45 $58
Slide 10: Leverage and Liquidity Update
©2019 Quaker Houghton. All Rights Reserved 10 Leverage and Liquidity Update • As a precautionary measure in response to the current economic uncertainty from COVID - 19, the Company drew down most of the available liquidity on its revolving credit facility during the second half of March 2020 • Tota
Slide 11: Appendix Actual and Non-GAAP Results
Appendix Actual and Non - GAAP Results
Slide 12: Non-GAAP financial information definitions
The information included in this presentation includes non - GAAP (unaudited) financial information that includes EBITDA, adjusted EBITDA, adjusted EBITDA margin, non - GAAP operating income, non - GAAP operating margin, non - GAAP net income, non - GAAP earnings per diluted share, and pro forma net
Slide 13: Non-GAAP Operating Income Reconciliation
©2019 Quaker Houghton. All Rights Reserved 13 Non - GAAP Operating Income Reconciliation (dollars in thousands, unless otherwise noted) Q2 2020 Q2 2019 YTD 2020 YTD 2019 Operating income (loss) 2,238$ 20,531$ (10,206)$ 40,360$ Fair value step up of inventory sold 226 - 226 - Houghton combination, in
Slide 14: Adjusted EBITDA Reconciliation
©2019 Quaker Houghton. All Rights Reserved 14 Adjusted EBITDA Reconciliation (dollars in thousands, unless otherwise noted) Q2 2020 Q2 2019 YTD 2020 YTD 2019 Net (loss) income attributable to Quaker Chemical Corporation (7,735)$ 15,591$ (36,116)$ 29,435$ Depreciation and amortization 21,158 4,843 42
Slide 15: Non-GAAP EPS Reconciliation
©2019 Quaker Houghton. All Rights Reserved 15 Non - GAAP EPS Reconciliation Q2 2020 Q2 2019 YTD 2020 YTD 2019 GAAP (loss) earnings per diluted share attributable to Quaker Chemical Corporation common shareholders Equity income in a captive insurance company per diluted share (0.03) (0.03) (0.01) (0.
Slide 16: Segment Performance
©2019 Quaker Houghton. All Rights Reserved 16 Segment Performance (dollars in thousands) Q2 2020 Q2 2019 YTD 2020 YTD 2019 Net sales Americas 80,576$ 71,747$ 210,472$ 143,972$ EMEA 77,702 49,012 182,541 101,437 Asia/Pacific 68,421 44,801 141,973 90,968 Global Specialty Businesses 59,341 40,309 129,6
Slide 17: A Quaker Houghton Forward Together
A Quaker Veg Houghton. Forward Together”
Slide 18: Q2 2019 Pro Forma Reconciliations
©2019 Quaker Houghton. All Rights Reserved 18 Q2 2019 Pro Forma Reconciliations (dollars in millions) Quaker Houghton Divestitures Other (a) Pro Forma* Net Sales 206$ 204$ (14)$ (5)$ 390$ Net Income (Loss) Attributable to Quaker Houghton 16$ 1$ (3)$ 4$ 18$ Depreciation and Amortization 5 13 - 1 19 I
Slide 19: YTD Q2 2019 Pro Forma Reconciliations
©2019 Quaker Houghton. All Rights Reserved 19 YTD Q2 2019 Pro Forma Reconciliations (dollars in millions) Quaker Houghton Divestitures Other (a) Pro Forma* Net Sales 417$ 403$ (29)$ (11)$ 781$ Net Income (Loss) Attributable to Quaker Houghton 29$ 4$ (5)$ 7$ 35$ Depreciation and Amortization 10 26 -
Slide 20: TTM Q2 2020 Pro Forma Reconciliations
©2019 Quaker Houghton. All Rights Reserved 20 TTM Q2 2020 Pro Forma Reconciliations (dollars in millions) Quaker Houghton Divestitures Other (a) Pro Forma* Net sales 1,381$ 72$ (5)$ (2)$ 1,446$ Net (Loss) Income Attributable to Quaker Houghton (34)$ (7)$ (1)$ 0$ (42)$ Depreciation and Amortization 7
Slide 21: Full Year 2019 Pro Forma Reconciliations
©2019 Quaker Houghton. All Rights Reserved 21 Full Year 2019 Pro Forma Reconciliations (dollars in millions) Quaker Houghton Divestitures Other (a) Pro Forma* Net sales 1,134$ 475$ (34)$ (13)$ 1,562$ Net Income (Loss) Attributable to Quaker Houghton 32$ (3)$ (6)$ 10$ 33$ Depreciation and Amortizatio
Slide 22: Full Year 2018 Pro Forma Reconciliations
22 ©2019 Quaker Houghton. All Rights Reserved Full Year 2018 Pro Forma Reconciliations (dollars in millions) Quaker Houghton Divestitures Other (a) Pro Forma* Net sales 868$ 861$ (53)$ (22)$ 1,655$ Net Income (Loss) Attributable to Quaker Houghton 59$ (0)$ (9)$ 17$ 66$ Depreciation and Amortization
Slide 23: Full Year 2017 Pro Forma Reconciliations
23 ©2019 Quaker Houghton. All Rights Reserved Full Year 2017 Pro Forma Reconciliations (dollars in millions) Quaker Houghton Divestitures Other (a) Pro Forma* Net Income (Loss) Attributable to Quaker Houghton 20$ (47)$ (9)$ 9$ (26)$ Depreciation and Amortization 20 55 - 5 80 Interest Expense, Net 1
Slide 24: Full Year 2016 Pro Forma Reconciliations
24 ©2019 Quaker Houghton. All Rights Reserved Full Year 2016 Pro Forma Reconciliations (dollars in millions) Quaker Houghton Divestitures Other (a) Pro Forma* Net Income (Loss) Attributable to Quaker Houghton 61$ (37)$ (8)$ 7$ 23$ Depreciation and Amortization 20 55 - 5 80 Interest Expense, Net 1 51