Quaker Houghton · NYSE:KWR
Quaker Houghton — Quaker Chemical — Q4 2017 Earnings Presentation
15 slides from Quaker Houghton's earnings presentation, Feb 28, 2018
Slide 1: Fourth Quarter 2017 Results Investor Conference Call
1 Fourth Quarter 2017 Results Investor Conference Call March 1, 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: Fourth Quarter 2017 Headlines
Fourth Quarter 2017 Headlines ▪ 10% growth in net sales for both the fourth quarter and full year driven by strong volumes ▪ U.S. tax reform charges of $22.2 million and Houghton combination - related expenses decrease net income in the fourth quarter and full year to a net loss of $9.8 million, or
Slide 5: Chairman Comments Fourth Quarter 2017
Chairman Comments Fourth Quarter 2017 ▪ Fourth Quarter 2017 x Net sales of $211.1 million increase 10% driven by organic volume growth of 5% on continued market share gains and increased production in some end markets x Strong volumes drove higher gross profit despite a lower gross margin primarily
Slide 6: Net sales, gross profit and operating income commentary
▪ Net sales increases of 10% in both Q4’17 and FY’17 driven by volume growth of 6% and 7%, respectively, and to a lesser extent increases from changes in selling price and product mix and the positive impact from FX in each period ▪ Gross profit increased $4.2 million in Q4’17 and $11.4 million in F
Slide 7: Financial Snapshot
Chart #5 Financial Snapshot ($ Millions unless otherwise noted) Q4 2017 Q4 2016 YTD 2017 YTD 2016 Net Sales 211.1 191.2 820.1 746.7 Gross Profit 74.0 69.8 291.5 280.1 Gross Margin 35.1% 36.5% 35.5% 37.5% SG&A 50.1 48.9 198.8 193.7 Restructuring and Related Activities - (0.4) - (0.4) Combination-Rela
Slide 8: Strong organic volumes continue to drive top line growth
Chart #6 Strong organic volumes continue to drive top line growth Product Volume by Quarter and Year in Thousands of Kilograms 115,000 135,000 155,000 175,000 195,000 215,000 235,000 255,000 275,000 25,000 30,000 35,000 40,000 45,000 50,000 55,000 60,000 65,000 70,000 75,000 Full Year 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% 20.0% 25.0% 30.0% 35.0% 40.0% 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Gross Margin Percentage 36.5% 36.4% 35.7% 35.1% 35.1% 20.0% 25.0% 30.0% 35.0% 40.0% Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Gross Margin Percentage Chart #7 Exp
Slide 10: Strong operating earnings drives record Adjusted EBITDA
FY 2008 – FY 2017 CAGR: 12.4% +720 Margin bps Adjusted EBITDA Baseline Historical Performance $40.1 $44.2 $66.8 $73.0 $80.9 $89.6 $99.8 $101.6 $106.6 $115.2 6.9% 9.8% 12.3% 10.7% 11.4% 12.3% 13.0% 13.8% 14.3% 14.1% 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Adjusted EBITDA ($ Mils.) Adjusted
Slide 11: Continued solid cash flow generation and strong balance sheet
-$120 -$80 -$40 $0 $40 $80 $120 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 $ 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 Q4 2017 Q4 2016 YTD 2017 YTD 2016 GAAP (loss) earnings per diluted share (0.73)$ 1.31$ 1.52$ 4.63$ Equity income in a captive insurance company per diluted share (0.08) (0.06) (0.19) (0.13) Restructuring credit per diluted share - (0.02) - (0.02) Houghton comb
Slide 14: Adjusted EBITDA Reconciliation
Chart #11 Adjusted EBITDA Reconciliation ($ Thousands unless otherwise noted) Q4 2017 Q4 2016 YTD 2017 YTD 2016 Net (loss) income attributable to Quaker Chemical Corporation (9,762)$ 17,434$ 20,278$ 61,403$ Depreciation and amortization 5,012 4,778 19,966 19,566 Interest expense 1,664 663 3,892 2,88
Slide 15: Adjusted EBITDA Reconciliation 2008-2017
Chart #12 Adjusted EBITDA Reconciliation ($ 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 12,598 A