Quaker Houghton · NYSE:KWR
Quaker Houghton — Quaker Chemical — Q3 2016 Earnings Presentation
15 slides from Quaker Houghton's earnings presentation, Oct 26, 2016
Slide 1: Third Quarter 2016 Results Investor Conference Call
1 Third Quarter 2016 Results Investor Conference Call October 27, 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: Third Quarter 2016 Headlines
Third Quarter 2016 Headlines ▪ Strong operating income of $21.3 million drives 6% increase in adjusted EBITDA ▪ Volume growth drives an increase in net sales despite FX headwinds ▪ Year - to - date operating cash flow of $53.0 million increases 4% from the prior year Chart #2
Slide 5: Chairman Comments
Chairman Comments ▪ Third Quarter of 2016 x Revenue growth both organically by 2% and from acquisitions by 2%, despite challenging environment and foreign exchange headwinds x Strong operating income drives adjusted EBITDA increase of 6%, despite foreign exchange headwinds to sales and earnings of 2
Slide 6: Financial Highlights
Financial Highlights ▪ Non - GAAP earnings per diluted share up 5% to $1.25 despite higher effective tax rate and negative impact of 4 cents per diluted share from foreign exchange ▪ Adjusted EBITDA up 6% with Adjusted EBITDA margin nearly 15% ▪ Net sales increase driven by 2% growth from organic vo
Slide 7: Financial Snapshot
Financial Snapshot ($ Millions unless otherwise noted) Q3 2016 Q3 2015 YTD 2016 YTD 2015 Net Sales 190.4 189.2 555.4 554.3 Gross Margin 37.2% 37.7 % 37.8% 37.6% Operating Income 21.3 18.7 62.7 58.0 Operating Margin 11.2% 9.9 % 11.3% 10.5% Net Income Attributable to Quaker Chemical Corporation 16.0 1
Slide 8: Product Volume by Quarter and Year
Product Volume by Quarter and Year In Thousands of Kilograms Chart #6 Organic and acquisition - related volume growth despite continued challenges in end - markets 115,000 135,000 155,000 175,000 195,000 215,000 235,000 255,000 25,000 31,000 37,000 43,000 49,000 55,000 61,000 67,000 Full Year Volume
Slide 9: Gross Margin Percentage Trends
Gross Margin Percentage Trends 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 37.7% 37.5% 38.1% 38.1% 37.2% 20.0% 25.0% 30.0% 35.0% 40.0% Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Gross Margin Percentage Cha
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 $106.3 $100.1 $44.2 13.0% 14.4% 11.4% 13.8% 6.9% 12.3% 10.7% 9.8% 12.3% 13.4% 2008 2009 2010 2011 2012 2013 2014 2015 Trailing Twelve Months Q3 2015 Trailing Twelve Months Q3 2016 Adjusted EBITDA ($ Mils.) Adj
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 Q3 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
APPENDIX
Slide 13: Non-GAAP Earnings Per Diluted Share Reconciliation
Non - GAAP Earnings Per Diluted Share Reconciliation Chart #10 Q3 2016 Q3 2015 YTD 2016 YTD 2015 GAAP earnings per diluted share 1.21$ 1.08$ 3.32$ 2.98$ Equity income in a captive insurance company per diluted share (0.04) (0.04) (0.07) (0.09) Certain uncommon transaction-related expenses per dilute
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 Q3 2016 YTD Q3 2016 Last Three Months 2015 FY 2015 Trailing Twelve Months Q3 2015 YTD Q3 2015 Last Three Months 2014 FY 2014 YTD Q3 2014 Net income 55,362 43,969 1