Quaker Houghton · NYSE:KWR
Quaker Houghton — Quaker Chemical — Q1 2017 Earnings Presentation
15 slides from Quaker Houghton's earnings presentation, May 1, 2017
Slide 1: First Quarter 2017 Results Investor Conference Call
1 First Quarter 2017 Results Investor Conference Call May 2, 2017 Quaker Chemical Corporation
Slide 2: Regulation G and Forward-Looking Statements
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 ongoing operating results of the Company
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: First Quarter 2017 Headlines
First Quarter 2017 Headlines ▪ Strong organic volume growth of 10% drives a net sales increase of 9% despite continued FX headwinds ▪ Net income of $7.0 million and earnings per diluted share of $0.52 reflect costs related to the Houghton combination, which was previously announced on April 5, 2017
Slide 5: Chairman Comments First Quarter 2017 and 2017 Outlook
Chairman Comments First Quarter 2017 ▪ First Quarter 2017 x Net sales growth driven primarily by increases in organic volume as well as contributions from the prior year Lubricor acquisition, which offset the continued negative impact from foreign exchange x Consistent levels of SG&A on strong volum
Slide 6: First Quarter 2017 results commentary
▪ Net sales growth driven by a 10% increase in organic volume and a 1% increase from Lubricor, partially offset by a negative impact from foreign currency translation of 2% ▪ Gross profit increased 4% due to the increase in sales volumes, partially offset by a lower gross margin of 36.4% compared to
Slide 7: Financial Snapshot
($ Millions unless otherwise noted) Q1 2017 Q1 2016 Net Sales 194.9 178.1 Gross Margin 36.4% 38.2 % Operating Income 13.8 19.8 Operating Margin 7.1% 11.1 % Net Income Attributable to Quaker Chemical Corporation 7.0 12.9 Earnings Per Diluted Share 0.52 0.98 Non - GAAP Earnings Per Diluted Share 1.18
Slide 8: Product Volume by Quarter and Year
Chart #6 Strong organic volume increases continue to drive top line growth 115,000 135,000 155,000 175,000 195,000 215,000 235,000 255,000 25,000 30,000 35,000 40,000 45,000 50,000 55,000 60,000 65,000 70,000 Full Year Volume Quarter Volume Quarter Volume Full Year Volume Product Volume by Quarter a
Slide 9: Gross Margin Percentage Trends
28.1% 35.0% 35.6% 32.7% 33.8% 35.9% 35.8% 37.7% 37.5% 20.0% 25.0% 30.0% 35.0% 40.0% 2008 2009 2010 2011 2012 2013 2014 2015 2016 Gross Margin Percentage 38.2% 38.2% 37.2% 36.5% 36.4% 20.0% 25.0% 30.0% 35.0% 40.0% Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Gross Margin Percentage Chart #7 Quarterly gros
Slide 10: Adjusted EBITDA Baseline Historical Performance
$40.1 $44.2 $66.8 $73.0 $80.9 $89.6 $99.8 $101.6 $106.6 $103.3 $109.8 6.9% 9.8% 12.3% 10.7% 11.4% 12.3% 13.0% 13.8% 14.3% 2008 2009 2010 2011 2012 2013 2014 2015 2016 Trailing Twelve Months Q1 2016 Trailing Twelve Months Q1 2017 Adjusted EBITDA ($ Mils.) Adjusted EBITDA Margin (%) 14.1% 14.4% FY 200
Slide 11: Balance Sheet Cash and Debt
-$120 -$80 -$40 $0 $40 $80 $120 2008 2009 2010 2011 2012 2013 2014 2015 2016 Q1 2017 $ Millions Cash ST/LT Debt Net Cash (Debt) Chart #9 Strong cash flow generation and balance sheet continue to support future growth Balance Sheet Cash and Debt
Slide 12: Appendix
@ Quaker APPENDIX
Slide 13: Non-GAAP EPS Reconciliation
Chart #10 Non - GAAP EPS Reconciliation Q1 2017 Q1 2016 GAAP earnings per diluted share 0.52$ 0.98$ Equity income in a captive insurance company per diluted share (0.04)$ (0.01)$ Houghton combination-related expenses per diluted share 0.69$ -$ Cost streamlining initiative per diluted share 0.01$ -$
Slide 14: Adjusted EBITDA Reconciliation
Chart #11 Adjusted EBITDA Reconciliation 2008 2009 2010 2011 2012 2013 2014 2015 2016 Net income 9,833 16,058 32,120 45,892 47,405 56,339 56,492 51,180 61,403 Depreciation 10,879 9,525 9,867 11,455 12,252 12,339 12,306 12,395 12,557 Amortization 1,177 1,078 988 2,338 3,106 3,445 4,325 6,811 7,009 In
Slide 15: TTM Adjusted EBITDA Reconciliation
TTM Adjusted EBITDA Reconciliation Chart #12 I = G + H H G = F - D F E = C + D D C = B - A B A Trailing Twelve Months Q1 2017 YTD Q1 2017 Last Nine Months 2016 FY 2016 Trailing Twelve Months Q1 2016 YTD Q1 2016 Last Nine Months 2015 FY 2015 YTD Q1 2015 Net income 55,449 6,992 48,457 61,403 53,748 12