Quaker Houghton · NYSE:KWR
Quaker Houghton — Quaker Chemical — Q2 2013 Earnings Presentation
15 slides from Quaker Houghton's earnings presentation, Jul 29, 2013
Slide 1: Quaker Chemical Corporation Investor Conference Call Second Quarter 2013 Results
1 Quaker Chemical Corporation Investor Conference Call July 30, 2013 Second Quarter 2013 Results
Slide 2: Regulation G and Forward-Looking Statements
2 Regulation G The attached charts include Company 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 a
Slide 3: Speakers
3 Speakers Michael F. Barry Chairman of the Board, Chief Executive Officer & President Margaret M. Loebl Vice President, Chief Financial Officer & Treasurer Robert T. Traub General Counsel Chart #1
Slide 4: Second Quarter 2013 Headlines
4 2 nd Quarter 2013 Headlines • Net sales up 5% from second quarter 2012 despite challenging environment • Volume and margins drive solid operating performance • Quarterly net operating cash flow of approximately $16 million Chart #2
Slide 5: Chairman Comments
5 Chairman Comments ▪ Positives x Solid sales / margins in a difficult economy x Gaining share & leveraging acquisitions x Good cash flow generation x Liquidity remains a Company strength ▪ Negatives x Weak market conditions x Potential raw material cost increases in the second half of the year Seco
Slide 6: Product Volume by Quarter
6 Product Volume by Quarter 25,000 30,000 35,000 40,000 45,000 50,000 55,000 4Q08 YTD Avg. 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 Metalworking Process Chemicals Segment Chart #4
Slide 7: Financial Snapshot
7 Financial Snapshot Q2 2013 Q2 2012 YTD 2013 YTD 2012 Net Sales ($Mils.) 184.8 176.8 361.0 354.4 Gross Margin (%) 36.4 34.3 36.0 34.0 Operating Margin (%) 10.7 9.6 10.3 9.5 Net Income attributable to Quaker Chemical Corporation ($Mils.) 16.1 11.1 29.7 23.5 Adjusted EBITDA ($Mils.) – Trailing Twelve
Slide 8: Gross Margin Percentage
8 Gross Margin Percentage 34.3% 32.7% 34.2% 35.5% 36.4% 20.0% 25.0% 30.0% 35.0% 40.0% Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Gross Margin Percentage Chart #6 28.0% 34.7% 35.4% 32.6% 33.7% 36.0% 20.0% 25.0% 30.0% 35.0% 40.0% 2008 2009 2010 2011 2012 2013 YTD Gross Margin Percentage
Slide 9: Baseline Historical Performance
9 Baseline Historical Performance $40.1 $44.2 $66.8 $73.0 $80.9 $84.4 6.90% 9.80% 12.30% 10.70% 11.40% 11.80% 2008 2009 2010 2011 2012 Q2 2013 Trailing Twelve Months Adjusted EBITDA ($ Mils.) Adjusted EBITDA Margin (%) Chart #7 (Adjusted EBITDA)
Slide 10: Balance Sheet Net Cash / (Debt)
10 Balance Sheet Net Cash / (Debt) -$100 -$80 -$60 -$40 -$20 $0 $20 $40 $60 2008 2009 2010 2011 2012 Q2 2013 $ Millions Cash ST/LT Debt Net Debt Chart #8
Slide 11: Net Cash Flow From Operations
11 Net Cash Flow From Operations 15.2 19.8 21.1 11.3 16.2 0 10 20 30 40 50 60 70 80 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Operating Cash Flow ($ Millions) Chart #9 13.4 41.6 37.5 19.7 62.9 0 10 20 30 40 50 60 70 80 2008 2009 2010 2011 2012 Operating Cash Flow ($ Millions)
Slide 12: Appendix
12 APPENDIX
Slide 13: Trailing Twelve Months Adjusted EBITDA Reconciliation
13 Trailing Twelve Months Adjusted EBITDA Reconciliation Chart #10 I = G + H H G = F - D F E = C + D D C = B - A B A Trailing Twelve Months Q2 2013 YTD Q2 2013 Last Six Months 2012 YTD 2012 Trailing Twelve Months Q2 2012 YTD Q2 2012 Last Six Months 2011 YTD 2011 YTD Q2 2011 Net income 53,634 29,702
Slide 14: Annual Adjusted EBITDA Reconciliation
14 Annual Adjusted EBITDA Reconciliation Chart #11 2008 2009 2010 2011 2012 Net income 9,833 16,058 32,120 45,892 47,405 Depreciation 10,879 9,525 9,867 11,455 12,252 Amortization 1,177 1,078 988 2,338 3,106 Interest expense 5,509 5,533 5,225 4,666 4,283 Taxes on income 4,977 7,065 12,616 14,256 15,
Slide 15: Non-GAAP Earnings Per Diluted Share Reconciliation
Non - GAAP Earnings Per Diluted Share Reconciliation Chart #12 Q2 2013 Q2 2012 YTD 2013 YTD 2012 GAAP Earnings Per Diluted Share 1.22$ 0.85$ 2.26$ 1.80$ CFO transition costs per diluted share -$ 0.03$ -$ 0.03$ Customer bankruptcies per diluted share -$ 0.06$ -$ 0.06$ Cost streamlining initiatives pe