Quaker Houghton · NYSE:KWR
Quaker Houghton — Quaker Chemical — Q1 2016 Earnings Presentation
15 slides from Quaker Houghton's earnings presentation, Apr 27, 2016
Slide 1: First Quarter 2016 Results Investor Conference Call
1 First Quarter 2016 Results Investor Conference Call April 28, 2016 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 2016 Headlines
First Quarter 2016 Headlines ▪ Strong operating income of $19.2 million drives 8% increase in adjusted EBITDA ▪ Volume growth in all major regions despite continued end - market weakness ▪ Solid operating cash flow of $10.9 million up 34% from the prior year Chart #2
Slide 5: Chairman Comments
Chairman Comments ▪ First Quarter of 2016 x Solid volume growth both organically by 1% and from acquisition by 4%, despite a global decline in steel production of approximately 3.5% x Continued benefits from timing of certain raw material cost decreases drove gross margin expansion x Strong operatin
Slide 6: Financial Highlights
Financial Highlights 1) Solid operating results drive 4% increase in non - GAAP earnings per diluted share of $0.98 in the first quarter of 2016, despite an inflated tax rate ▪ Timing issue drives quarterly tax rate of 32.3% up from 30.8% in Q1 2015 ▪ Negative foreign exchange impact of approximatel
Slide 7: Financial Snapshot
Financial Snapshot ($ Millions unless otherwise noted) Q1 2016 Q1 2015 Net Sales 178.1 181.3 Gross Margin 38.1 % 36.6 % Operating Income 19.2 17.9 Operating Margin 10.8 % 9.9 % Net Income Attributable to Quaker Chemical Corporation 12.9 10.4 Earnings Per Diluted Share 0.98 0.78 Non - GAAP Earnings P
Slide 8: Product Volume by Quarter and Year
Product Volume by Quarter and Year Thousand Kilograms Chart #6 Acquisition and base - volume related growth in each of the Company’s largest regions 115,000 135,000 155,000 175,000 195,000 215,000 235,000 25,000 31,000 37,000 43,000 49,000 55,000 61,000 Full Year Volume Quarter Volume Quarter Volume
Slide 9: Gross Margin Percentage
Gross Margin Percentage 28.0% 34.7% 35.4% 32.6% 33.7% 35.8% 35.7% 37.6% 20.0% 25.0% 30.0% 35.0% 40.0% 2008 2009 2010 2011 2012 2013 2014 2015 Gross Margin Percentage 36.6% 38.4% 37.7% 37.5% 38.1% 20.0% 25.0% 30.0% 35.0% 40.0% Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Gross Margin Percentage Chart #7 F
Slide 10: Adjusted EBITDA Baseline Historical Performance
Adjusted EBITDA Baseline Historical Performance $40.1 $66.8 $73.0 $80.9 $89.6 $99.8 $101.6 $99.3 $103.3 $44.2 13.0% 14.1% 13.0% 12.3% 9.8% 10.7% 12.3% 6.9% 13.8% 11.4% 2008 2009 2010 2011 2012 2013 2014 2015 Trailing Twelve Months Q1 2015 Trailing Twelve Months Q1 2016 Adjusted EBITDA ($ Mils.) Adju
Slide 11: Balance Sheet Cash and Debt
Balance Sheet Cash and Debt -$120 -$80 -$40 $0 $40 $80 $120 2008 2009 2010 2011 2012 2013 2014 2015 Q1 2016 $ Millions Cash ST/LT Debt Net Debt Chart #9 Strong cash flow generation and balance sheet continue to support future growth
Slide 12: Appendix
@ Quaker APPENDIX
Slide 13: Non-GAAP Earnings Per Diluted Share Reconciliation
Non - GAAP Earnings Per Diluted Share Reconciliation Chart #10 Q1 2016 Q1 2015 GAAP earnings per diluted share 0.98$ 0.78$ Equity income in a captive insurance company per diluted share (0.01)$ (0.06)$ Cost streamlining initiative per diluted share -$ 0.01$ Currency conversion impact of the Venezuel
Slide 14: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation Chart #11 2008 2009 2010 2011 2012 2013 2014 2015 Net income 9,833 16,058 32,120 45,892 47,405 56,339 56,492 51,180 Depreciation 10,879 9,525 9,867 11,455 12,252 12,339 12,306 12,395 Amortization 1,177 1,078 988 2,338 3,106 3,445 4,325 6,811 Interest expense 5,509 5,53
Slide 15: Trailing Twelve Months Adjusted EBITDA Reconciliation
Trailing Twelve Months 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 2016 YTD Q1 2016 Last Nine Months 2015 FY 2015 Trailing Twelve Months Q1 2015 YTD Q1 2015 Last Nine Months 2014 FY 2014 Q1 2014 Net income 53,748 12,946 40,802