Quaker Houghton · NYSE:KWR
Quaker Houghton — Quaker Chemical — Q1 2020 Earnings Presentation
23 slides from Quaker Houghton's earnings presentation, May 11, 2020
Slide 1: Quaker Houghton First Quarter 2020 Results Investor Conference Call
Quaker Houghton First 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: First Quarter 2020 Headlines
©2019 Quaker Houghton. All Rights Reserved 4 First Quarter 2020 Headlines • Net sales of $378.6 million were negatively impacted by volume declines primarily attributed to the initial impact of COVID - 19 and Boeing’s decision to temporarily stop production of its 737 Max aircraft, which drove a 3%
Slide 5: Chairman Comments First Quarter 2020
©2019 Quaker Houghton. All Rights Reserved 5 Chairman Comments First Quarter 2020 • The Company’s top priority is to protect the health and safety of our employees and our customers, while ensuring business continuity and with all 34 of the Company’s plants operating we have been able to meet our cu
Slide 6: Financial Highlights – Actual Results
©2019 Quaker Houghton. All Rights Reserved 6 Financial Highlights – Actual Results First quarter of 2020 • Net sales of $378.6 million increased 79% compared to Q1’19 due to the inclusion of Houghton and Norman Hay net sales of $190.3 million; excluding Houghton and Norman Hay net sales declined 11%
Slide 7: Financial Highlights – Non-GAAP & Pro Forma
©2019 Quaker Houghton. All Rights Reserved 7 Financial Highlights – Non - GAAP & Pro Forma First quarter of 2020 Non - GAAP Results • Non - GAAP EPS of $1.38 compared to $1.41 in the prior year impacted by the increase in share count due to the closing of the Combination partially offset by Houghton
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 Q1 2020 presented above are the actual GAAP and Non - GAAP results for Quaker Houghton Q1 2020 Q1 2019 GAAP N
Slide 9: Pro Forma Adjusted EBITDA
©2019 Quaker Houghton. All Rights Reserved 9 Pro Forma Adjusted EBITDA (dollars in millions) $215 $221 $236 $234 $239 $200 $213 $225 $238 $250 2016 2017 2018 2019 TTM Q1 2020 Q1’20 pro forma adjusted EBITDA increase due to the benefits of cost savings realized from the Combination and the inclusion
Slide 10: Leverage and Liquidity Update
©2019 Quaker Houghton. All Rights Reserved 10 Leverage and Liquidity Update • As a precautionary measure in response to the current economic uncertainty from COVID - 19, the Company drew down most of the available liquidity on its revolving credit facility during the first quarter of 2020 • Total gr
Slide 11: Appendix Actual and Non-GAAP Results
Appendix Actual and Non - GAAP Results
Slide 12: Non-GAAP financial information notes
The information included in this presentation includes non - GAAP (unaudited) financial information that includes EBITDA, adjusted EBITDA, adjusted EBITDA margin, non - GAAP operating income, non - GAAP operating margin, non - GAAP net income, non - GAAP earnings per diluted share, and pro forma net
Slide 13: Non-GAAP Operating Income Reconciliation
©2019 Quaker Houghton. All Rights Reserved 13 Non - GAAP Operating Income Reconciliation (dollars in thousands, unless otherwise noted) Q1 2020 Q1 2019 Operating (loss) income (12,444)$ 19,829$ Houghton combination and other acquisition-related expenses 8,276 4,483 Restructuring and related charges
Slide 14: Adjusted EBITDA Reconciliation
©2019 Quaker Houghton. All Rights Reserved 14 Adjusted EBITDA Reconciliation (dollars in thousands, unless otherwise noted) Q1 2020 Q1 2019 Net (loss) income attributable to Quaker Chemical Corporation (28,381)$ 13,844$ Depreciation and amortization 21,584 4,859 Interest expense, net 8,461 776 Taxes
Slide 15: Non-GAAP EPS Reconciliation
©2019 Quaker Houghton. All Rights Reserved 15 Non - GAAP EPS Reconciliation Q1 2020 Q1 2019 GAAP (loss) earnings per diluted share attributable to Quaker Chemical Corporation common shareholders (1.60)$ 1.03$ Equity loss (income) in a captive insurance company per diluted share 0.02 (0.03) Houghton
Slide 16: Segment Performance
©2019 Quaker Houghton. All Rights Reserved 16 Segment Performance (dollars in thousands) Q1 2020 Q1 2019 Net sales Americas 129,896$ 72,225$ EMEA 104,839 52,425 Asia/Pacific 73,552 46,167 Global Specialty Businesses 70,274 40,393 Total net sales 378,561$ 211,210$ Segment operating earnings Americas
Slide 17: Quaker Houghton: Forward Together
& Quaker Vg Houghton. Forward Together~
Slide 18: Q1 2019 Pro Forma Reconciliations
©2019 Quaker Houghton. All Rights Reserved 18 Q1 2019 Pro Forma Reconciliations (dollars in millions) Quaker Houghton Divestitures Other (a) Pro Forma* Net sales 211$ 200$ (14)$ (5)$ 391$ Net Income Attributable to Quaker Houghton 14$ 3$ (3)$ 4$ 17$ Depreciation and Amortization 5 13 - 1 19 Interest
Slide 19: TTM Q1 2020 Pro Forma Reconciliations
©2019 Quaker Houghton. All Rights Reserved 19 TTM Q1 2020 Pro Forma Reconciliations (dollars in millions) Quaker Houghton Divestitures Other (a) Pro Forma* Net sales 1,301$ 275$ (19)$ (7)$ 1,550$ Net (Loss) Income Attributable to Quaker Houghton (11)$ (6)$ (4)$ 6$ (15)$ Depreciation and Amortization
Slide 20: Full Year 2019 Pro Forma Reconciliations
©2019 Quaker Houghton. All Rights Reserved 20 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 Attributable to Quaker Houghton 32$ (3)$ (6)$ 10$ 33$ Depreciation and Amortization 45 31
Slide 21: Full Year 2018 Pro Forma Reconciliations
21 ©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 Attributable to Quaker Houghton 59$ (0)$ (9)$ 17$ 66$ Depreciation and Amortization 20 54 -
Slide 22: Full Year 2017 Pro Forma Reconciliations
22 ©2019 Quaker Houghton. All Rights Reserved Full Year 2017 Pro Forma Reconciliations (dollars in millions) Quaker Houghton Divestitures Other (a) Pro Forma* Net Income Attributable to Quaker Houghton 20$ (47)$ (9)$ 9$ (26)$ Depreciation and Amortization 20 55 - 5 80 Interest Expense, Net 1 51 - (1
Slide 23: Full Year 2016 Pro Forma Reconciliations
23 ©2019 Quaker Houghton. All Rights Reserved Full Year 2016 Pro Forma Reconciliations (dollars in millions) Quaker Houghton Divestitures Other (a) Pro Forma* Net Income Attributable to Quaker Houghton 61$ (37)$ (8)$ 7$ 23$ Depreciation and Amortization 20 55 - 5 80 Interest Expense, Net 1 51 - (14)