Slide 1: Third Quarter 2018 Results Investor Conference Call
1 Third Quarter 2018 Results Investor Conference Call November 2, 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: Third Quarter 2018 Headlines
Third Quarter 2018 Headlines ▪ Solid volume growth of 4% drives net sales of $222.0 million ▪ Net income of $19.7 million and earnings per diluted share of $1.47 ▪ Strong operating performance drives a 21% increase in non - GAAP earnings per diluted share to $1.60 and a 12% increase in adjusted EBIT
Slide 5: Chairman Comments
Chairman Comments ▪ Third Quarter 2018 x Solid operating performance drives a 12% increase in adjusted EBITDA and, coupled with a lower effective tax rate, results in a 21% increase in non - GAAP earnings per diluted share x Net sales increase of 4% to $222.0 million driven by solid volume growth an
Slide 6: Third Quarter 2018 results discussion
▪ Strong operating performance drove a 21% increase in non - GAAP earnings per diluted share to a record $1.60 and a 12% increase in adjusted EBITDA to a record $33.0 million ▪ Net sales increased 4% to $222.0 million driven by a 4% increase in volume and a 3% increase in selling price & product mix
Slide 7: Financial Snapshot
Chart #5 Financial Snapshot ($ in Millions unless otherwise noted) Q3 2018 Q3 2017 YTD 2018 YTD 2017 Net Sales 222.0 212.9 656.0 609.0 Gross Profit 81.1 74.8 237.5 217.5 Gross Margin (%) 36.5% 35.1% 36.2% 35.7% SG&A 53.3 51.1 157.4 148.7 Combination-Related Expenses 2.9 9.7 12.4 23.1 Operating Incom
Slide 8: Product Volume by Quarter and Year
Chart #6 Continued market share gains in the majority of the Company’s regions drives solid volume growth 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 Q
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% 36.2% 25.0% 28.0% 31.0% 34.0% 37.0% 40.0% 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 YTD 2018 Gross Margin Percentage 35.1% 35.1% 35.6% 36.5% 36.5% 33.0% 34.0% 35.0% 36.0% 37.0% 38.0% Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Gross Mar
Slide 10: Adjusted EBITDA Historical Performance
$40.1 $44.2 $66.8 $73.0 $80.9 $89.6 $99.8 $101.6 $106.6 $115.2 $111.3 $125.6 6.9% 9.8% 12.3% 10.7% 11.4% 12.3% 13.0% 13.8% 14.3% 14.1% 13.9% 14.5% 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Trailing Twelve Months Q3'17 Trailing Twelve Months Q3'18 Adjusted EBITDA ($ Mils.) Adjusted EBITDA Mar
Slide 11: Balance Sheet Cash and Debt
-$100 -$75 -$50 -$25 $0 $25 $50 $75 $100 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Q3 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 Q3 2018 Q3 2017 YTD 2018 YTD 2017 GAAP earnings per diluted share 1.47$ 0.83$ 3.87$ 2.25$ Equity income in a captive insurance company per diluted share (0.03) (0.03) (0.08) (0.11) Houghton combination-related expenses per diluted share 0.23 0.52 0.89 1.47 Tra
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 Q3 2018 YTD Q3 2018 Last Three Months 2017 FY 2017 Trailing Twelve Months Q3 2017 YTD Q3 2017 Last Three Months 2016 FY 2016 YTD Q3 2016 Net i
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