Quaker Houghton · NYSE:KWR
Quaker Houghton — Quaker Chemical — Q1 2018 Earnings Presentation
15 slides from Quaker Houghton's earnings presentation, Apr 30, 2018
Slide 1: First Quarter 2018 Results Investor Conference Call
1 First Quarter 2018 Results Investor Conference Call May 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: First Quarter 2018 Headlines
First Quarter 2018 Headlines ▪ Strong net sales increase of 9% to $212.1 million ▪ Net income of $12.7 million and earnings per diluted share of $0.95 include costs related to the pending Houghton combination of $6.1 million or $0.38 per diluted share ▪ Non - GAAP earnings per diluted share increase
Slide 5: Chairman Comments
Chairman Comments ▪ First Quarter 2018 x Solid operating performance drives a 9% increase in adjusted EBITDA and, coupled with a lower effective tax rate, results in a 17% increase in non - GAAP earnings per diluted share x Net sales increase of 9% to $212.1 million driven by volume, selling price a
Slide 6: First Quarter 2018 Financial Results Commentary
▪ Solid operating performance drove a 9% increase in adjusted EBITDA to a quarterly record of $30.8 million and a 17% increase in non - GAAP earnings per diluted share to $1.38 ▪ Net sales increase of 9% to $212.1 million driven by a 1% increase in volume, a 2% increase in selling price and product
Slide 7: Financial Snapshot
Chart #5 Financial Snapshot ($ in Millions unless otherwise noted) Q1 2018 Q1 2017 Net Sales 212.1 194.9 Gross Profit 75.4 70.9 Gross Margin (%) 35.6% 36.4% SG&A 50.0 48.1 Combination-Related Expenses 5.2 9.1 Operating Income 20.2 13.8 Operating Margin (%) 9.5% 7.1% Net Income Attributable to Quaker
Slide 8: Continued market share gains drive volume growth
Chart #6 Continued market share gains drive volume growth in the majority of regions quarter - over - quarter Product Volume by Quarter and Year in Thousands of Kilograms 100,000 140,000 180,000 220,000 260,000 300,000 25,000 35,000 45,000 55,000 65,000 75,000 Full Year Volume Quarter 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% 25.0% 28.0% 31.0% 34.0% 37.0% 40.0% 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Gross Margin Percentage 36.4% 35.7% 35.1% 35.1% 35.6% 33.0% 34.0% 35.0% 36.0% 37.0% 38.0% Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Gross Margin Percentage
Slide 10: Strong operating earnings drives record Adjusted EBITDA
FY 2008 – Q1 2018 CAGR: 12.4% +720 Margin bps Adjusted EBITDA Baseline Historical Performance Strong operating earnings drives record quarterly and trailing twelve month Adjusted EBITDA Chart #8
Slide 11: Balance Sheet Cash and Debt
-$120 -$80 -$40 $0 $40 $80 $120 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Q1 2018 $ 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 Q1 2018 Q1 2017 GAAP earnings per diluted share 0.95$ 0.52$ Equity loss (income) in a captive insurance company per diluted share 0.03 (0.04) Houghton combination-related expenses per diluted share 0.38 0.69 Cost streamlining initiative per diluted share - 0.0
Slide 14: TTM Adjusted EBITDA Reconciliation
Chart #11 TTM Adjusted EBITDA Reconciliation I = G + H H G = F - D F E = C + D D C = B - A B A ($ in thousands unless otherwise noted) Trailing Twelve Months Q1 2018 YTD Q1 2018 Last Nine Months 2017 FY 2017 Trailing Twelve Months Q1 2017 YTD Q1 2017 Last Nine Months 2016 FY 2016 YTD Q1 2016 Net inc
Slide 15: Adjusted EBITDA Reconciliation
Chart #12 Adjusted EBITDA Reconciliation ($ in 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 12,59