CONSHOHOCKEN, Pa., Feb. 25, 2021 /PRNewswire/ -- Quaker Chemical
Corporation ("the Company", also known as Quaker Houghton; NYSE:
KWR) today announced both fourth quarter and 2020 full year
financial results.
- Quarterly net sales of $385.9
million down 1% compared to the fourth quarter of 2019 but
up 5% sequentially due to improved volumes on continued gradual
COVID-19 recovery
- GAAP net income of $48.5 million
compared to prior year fourth quarter net income of $15.2 million; non-GAAP net income of
$29.3 million up 23% compared to
$23.7 million in the prior year
fourth quarter
- Adjusted EBITDA of $65.5 million
up 8% compared to the fourth quarter of 2019 and up 2%
sequentially
- Strong quarterly cash flow from operations of $66.3 million results in record full year
operating cash flow of $178.4 million
and 12% reduction in net debt during 2020
- Two recent bolt-on acquisitions expected to add approximately
$11 million of adjusted EBITDA in
2021
- Full year 2021 adjusted EBITDA expected to be over 20% higher
than $222 million in
2020
Quaker Houghton also announced today that Michael F. Barry will retire from his role as
CEO on December 31, 2021. He
will retain the role of Chairman of the Board following his
retirement. The Board of Directors is committed to a
strong, orderly process and transition with a comprehensive search
that will include internal and external candidates.
Michael F. Barry commented, "The
future of Quaker Houghton has never been brighter. This year
we will take a step change in our profitability, we will have
essentially completed our integration, and we will pay down more
debt to reach our targeted leverage ratio. We have the right
strategy in place, a strong management team, tremendous people
throughout our organization, and above market growth opportunities
in our businesses for the foreseeable future – making this the
right time to begin the transition of the CEO role to new
leadership. With the strong foundation we have in place, I am
confident Quaker Houghton is well positioned to make the most of
its potential and flourish in new and exciting ways, and I look
forward to continuing to work with the company as Board Chair after
my retirement as CEO."
Financial Results
The Company's fourth quarter and full year 2020 results included
net sales of $385.9 million and
$1,417.7 million, respectively.
Fourth quarter net sales decreased only 1% compared to $391.3 million in the prior year fourth quarter
as sales volumes continued to gradually recover from the impact of
COVID-19. Full year net sales increased 25% compared to
$1,133.5 million in the prior full
year. The full year increase was driven by additional net
sales due to the Company's August 1,
2019 combination with Houghton International, Inc.
("Houghton"), which we refer to as "the Combination", as well as
its October 1, 2019 acquisition of
the operating divisions of Norman
Hay plc ("Norman Hay").
Full year 2020 net sales declined approximately 9% compared to full
year 2019 pro forma net sales of approximately $1,562 million, which are adjusted to include the
results of Houghton for the full year as well as certain other pro
forma adjustments. This year-over-year decline in full year net
sales from prior year pro forma net sales was primarily due to
lower volumes reflecting the current year impact from COVID-19 on
global industrial production, partially offset by additional net
sales from Norman Hay.
The Company's fourth quarter and full year 2020 net income was
$48.5 million and $39.7 million, or $2.72 and $2.22 per
diluted share, respectively, compared to fourth quarter and full
year 2019 net income of $15.2 million
and $31.6 million, or $0.86 and $2.08 per
diluted share, respectively. Excluding all one-time and other
non-core items impacting results in all periods, the Company's
fourth quarter and full year 2020 non-GAAP earnings per diluted
share were $1.63 and $4.78, respectively, compared to prior year
fourth quarter and full year non-GAAP earnings per diluted share of
$1.34 and $5.83, respectively. Both GAAP and non-GAAP
earnings per diluted share reflect the increase to the Company's
share count resulting from the closing of the Combination on
August 1, 2019, as well as earnings
attributed to Houghton for the last five months of 2019 and
Norman Hay for the fourth quarter of
2019.
The Company's fourth quarter and full year 2020 adjusted EBITDA
was $65.5 million and $222.0 million respectively, compared to fourth
quarter and full year 2019 adjusted EBITDA of $60.6 million and $173.1
million and full year 2019 pro forma adjusted EBITDA of
approximately $234 million. The
Company's current quarter adjusted EBITDA increase of 8% was
primarily due to the benefits of cost saving synergies realized
from the Combination. The decrease in full year adjusted
EBITDA compared to full year 2019 pro forma adjusted EBITDA was
primarily due to lower full year net sales compared to prior year
pro forma net sales due to the current year impacts of COVID-19 on
the Company's volumes, partially offset by the benefits of
synergies realized from the Combination and some temporary COVID-19
related cost savings actions taken by the Company. The
Company's strong earnings drove net operating cash flow of
approximately $66.3 million during
the fourth quarter of 2020, resulting in full year net operating
cash flow of $178.4 million
increasing 117% compared to $82.4
million in 2019.
Michael F. Barry, Chairman, Chief
Executive Officer and President, "We continued to see our sales and
volumes increase from the second and third quarter levels with
sequential growth in each business segment. We also continued
to gain new business in the current quarter with net market share
gains of approximately 4%. This is one of the main reasons
our fourth quarter revenues were nearly flat with last year despite
the continuing impacts of COVID-19. We did begin to
experience some raw material increases in the current quarter which
we anticipate will continue into the first half of 2021.
Overall, our fourth quarter adjusted EBITDA grew 8% from the
prior year and benefited from cost synergies of $18 million compared to $5
million in the fourth quarter of 2019."
Mr. Barry continued, "The past twelve months have been
challenging due to COVID-19 but I am very pleased with our overall
performance. Over the past year we continued to service and
supply our customers despite difficult economic conditions, we
continued to gain share in our markets, we completed a significant
part of our integration activities, and we were able to realize
$58 million of cost synergies which
exceeded our previous estimate of $35
million. We also made additional bolt-on acquisitions
which will add approximately $11
million in EBITDA in 2021 and, even with those acquisitions,
were able to reduce our net debt by 12% or $94 million. In short, we are delivering on
the powerful benefits that we anticipated from our combination with
Houghton. As we look forward, we expect some short-term
headwinds from higher raw material costs and lower than expected
volumes to the automotive market due to the semiconductor
shortage. However, we feel positive about 2021 and continue
to expect a step change in our profitability with over a 20%
increase in our adjusted EBITDA from 2020 as we complete our
integration cost synergies, continue to take further share in the
marketplace, benefit from a projected gradual rebound in demand,
and see the positive impact of our recent acquisitions."
Fourth Quarter 2020 Consolidated Results
Net sales were $385.9 million in
the fourth quarter of 2020 compared to $391.3 million in the fourth quarter of
2019. The net sales decrease of 1% quarter-over-quarter was
primarily due to a 2% decrease from price and product mix,
partially offset by a 1% positive impact from foreign currency
translation. Despite the on-going negative impact of
COVID-19, current quarter sales volumes were relatively consistent
with the prior year fourth quarter, primarily due to market-share
gains in the current quarter and lower demand in Europe in the prior year fourth quarter.
Gross profit in the fourth quarter of 2020 increased
$5.9 million compared to the fourth
quarter of 2019 primarily due to higher gross margins
quarter-over-quarter. The Company's gross margin in the
current quarter was 36.8% compared to 34.8% in the fourth quarter
of 2019. Excluding one-time increases to cost of goods sold
("COGS") in the prior year, primarily related to an expense
associated with selling acquired Norman
Hay inventory at its fair value, the Company estimates that
its gross margin in the fourth quarter of 2019 would have been
35.3%. The increase in gross margin quarter-over-quarter was
primarily due to lower COGS as a result of the Company's progress
on Combination-related logistics, procurement and manufacturing
cost savings initiatives.
Selling, general and administrative expenses ("SG&A") in the
fourth quarter of 2020 decreased $3.2
million compared to the fourth quarter of 2019 due primarily
to the impact of COVID-19 cost savings actions, including lower
travel expenses, and the benefits of realized cost savings
associated with the Combination, partially offset by the negative
impact from foreign currency translation.
During the fourth quarter of 2020, the Company incurred
$7.0 million of Combination,
integration and other acquisition-related expenses, primarily for
professional fees related to Houghton integration and other
acquisition-related activities, compared to $11.7 million of similar expenses in the prior
year fourth quarter.
The Company initiated a restructuring program during the third
quarter of 2019 as part of its global plan to realize cost
synergies associated with the Combination. Reductions in
headcount and site closures under this program occurred during 2019
and 2020 and are expected to continue into 2021. The Company
incurred restructuring and related charges of $2.0 million and $2.6
million under this program during the fourth quarters of
2020 and 2019, respectively.
Operating income in the fourth quarter of 2020 was $34.7 million compared to $20.3 million in the fourth quarter of
2019. Excluding Combination, integration and other
acquisition-related expenses, restructuring and related charges,
and other expenses that are not indicative of the Company's future
operating performance, the Company's current quarter non-GAAP
operating income increased 16% to $43.7
million compared to $37.6
million in the prior year quarter, primarily due to the
benefits from cost savings related to the Combination, partially
offset by the negative current quarter impact of COVID-19.
The Company estimates that it realized approximately $18 million of cost savings related to the
Combination during the fourth quarter of 2020 compared to
$5 million of cost savings realized
in the fourth quarter of 2019.
Other income, net, was $16.8
million in the fourth quarter of 2020 compared to
$0.1 million in the prior year fourth
quarter. The current quarter includes a gain of $18.1 million related to restrictions lapsing on
certain cash that was previously designated solely for the
settlement of asbestos claims at an inactive subsidiary of the
Company. Excluding this gain, the current quarter other
expense, net, was driven by higher foreign currency transaction
losses compared to the prior year fourth quarter.
Interest expense, net, decreased $4.9
million compared to the prior year fourth quarter primarily
due to a decline in interest rates in the current year, as the
weighted average interest rate incurred on outstanding borrowings
under the Company's credit facility was less than 2% during the
fourth quarter of 2020 compared to approximately 3% in the prior
year.
The Company's effective tax rates for the fourth quarters of
2020 and 2019 were an expense of 4.9% compared to a benefit of
18.2%, respectively. Both the Company's current and prior
year fourth quarter effective tax rates were impacted by certain
non-recurring items including a deferred tax benefit recorded in
each quarter related to two separate intercompany intangible asset
transfers, a tax benefit from certain intercompany prepaid
royalties and a deferred tax benefit resulting from legal entity
integrations in the U.S. Excluding the impact of these tax
benefits and all other non-core items in each quarter, described in
the Non-GAAP and Pro Forma measures section below, the Company
estimates that its effective tax rates for the fourth quarters of
2020 and 2019 would have been approximately 30% and 24%,
respectively. The higher estimated current quarter tax rate
was driven by higher U.S. income taxes resulting from a change in
certain deductions and the taxability of foreign earnings in the
U.S. in the current year, partially offset by a change in the mix
of earnings.
Equity in net income of associated companies increased
$1.6 million in the fourth quarter of
2020 compared to the fourth quarter of 2019, primarily due to
higher earnings from the Company's 50% interest in a joint venture
in Korea.
Full Year 2020 Consolidated Results
Net sales were $1,417.7 million in
2020 compared to $1,133.5 million in
2019. The net sales increase of 25% year-over-year includes
additional net sales from acquisitions, primarily Houghton and
Norman Hay, of $408.6 million. Excluding net sales from
acquisitions, current year net sales would have declined
approximately 11% due to a 9% decrease in sales volumes associated
with the negative impacts of COVID-19 on global production levels,
as well as a 1% negative impact from foreign currency translation
and a 1% decrease from price and product mix.
Gross profit in 2020 increased $121.3
million compared to 2019 primarily due to additional gross
profit from Houghton and Norman
Hay. The Company's gross margin in the current year
was 36.2% compared to 34.6%. Excluding one-time
increases to COGS in both periods, primarily related to expense
associated with selling acquired inventory at fair value, the
Company estimates that its gross margins for 2020 and 2019 would
have been 36.3% and 35.7%, respectively. The increase in
gross margin year-over-year was driven primarily by the same
synergies described in the fourth quarter results above, partially
offset by the impact of lower current year sales volumes on certain
fixed manufacturing costs.
SG&A in 2020 increased $96.9
million compared to 2019 due primarily to additional
SG&A from Houghton and Norman
Hay, partially offset by lower SG&A due to the impact of
COVID-19 cost savings actions, including lower travel expenses, and
the benefits of realized cost savings associated with the
Combination.
During 2020, the Company incurred $29.8 million of
Combination, integration and other acquisition-related expenses,
primarily for professional fees related to Houghton integration and
other acquisition-related activities. Comparatively, the
Company incurred $35.5 million of
similar expenses in the prior year, primarily due to various
professional fees related to integration planning and regulatory
approval as well as professional fees associated with closing the
Combination.
As noted above, the Company initiated a restructuring program
during the third quarter of 2019 as part of its global plan to
realize cost synergies associated with the Combination.
During 2020, the Company recorded additional restructuring and
related charges of $5.5 million under
this program. Comparatively, the Company incurred
restructuring and related charges of $26.7
million under this program during 2019.
During the first quarter of 2020, the Company recorded a
$38.0 million non-cash impairment
charge to write down the value of certain indefinite-lived
intangible assets associated with the Combination. This
non-cash impairment charge is related to certain acquired Houghton
trademarks and tradenames and is primarily the result of the
current year negative impacts of COVID-19 on their estimated fair
values. There were no other impairment charges in 2020 or in
the prior year.
Operating income in 2020 was $59.4
million compared to $46.1
million in 2019. Excluding Combination, integration
and other acquisition-related expenses, restructuring and related
charges, the non-cash indefinite-lived intangible asset impairment
charge, and other expenses that are not indicative of the Company's
future operating performance, the Company's non-GAAP operating
income increased 10% to $134.0
million in 2020 compared to $121.9
million in the prior year, primarily due to additional
operating income from Houghton and Norman
Hay and the benefits from cost savings related to the
Combination, partially offset by the current year negative impact
due to COVID-19. The Company estimates that in 2020 it
realized full year cost synergies associated with the Combination
of approximately $58 million compared
to $7 million in 2019. The
Company continues to expect to realize cost synergies of
approximately $75 million in 2021 and
$80 million in 2022.
Other expense, net, was $5.6
million in 2020 compared to $0.3
million in the prior year. The current year other
expense, net, includes a first quarter of 2020 non-cash settlement
charge of $22.7 million associated
with the termination of the legacy Quaker U.S. Pension Plan,
partially offset by a fourth quarter of 2020 gain of $18.1 million related to the lapsing of
restrictions over certain designated funds, as described
above. Excluding these items, the Company's increase in
other expense, net, year-over-year, was driven by higher foreign
currency transaction losses in the current year.
Interest expense, net, increased $9.6
million in 2020 compared to the prior year primarily due to
a full year of borrowings under the Company's term loans and
revolving credit facility to finance the closing of the Combination
on August 1, 2019, partially offset
by lower overall interest rates in the current year.
The Company's effective tax rates for 2020 and 2019 were a
benefit of 19.5% and an expense of 7.2%, respectively. The
Company's current year effective tax rate was impacted by the tax
effect of certain one-time tax benefits and charges, including
those mentioned in the fourth quarter results above, as well as
other changes in the valuation allowance for foreign tax credits
acquired with the Combination, additional charges for uncertain tax
positions relating to certain foreign tax audits, and the tax
impact of the Company's termination of its legacy Quaker U.S.
pension plan. Comparatively, the prior year effective tax
rate was primarily impacted by certain non-deductible costs
associated with the Combination. Excluding the impact of all
non-core items in each year, described in the Non-GAAP and Pro
Forma measures section below, the Company estimates that its
effective tax rates for 2020 and 2019 would have been approximately
25% and 22%, respectively. The year-over-year increase is
driven primarily by the full year impact of similar factors in the
fourth quarter results noted above.
Equity in net income of associated companies increased
$2.3 million in 2020 compared to
2019, primarily due to additional earnings from the Company's 50%
interest in a joint venture in Korea, partially offset by lower
earnings as compared to the prior year from the Company's interest
in a captive insurance company.
Cash Flow and Liquidity Highlights
The Company had net operating cash flow of approximately
$66.3 million during the fourth
quarter of 2020, resulting in full year net operating cash flow of
$178.4 million compared to
$82.4 million in 2019. The
$96.0 million or 117% increase in net
operating cash flow year-over-year was primarily driven by
additional earnings, including a full year of Houghton and
Norman Hay, as well as higher cash
flow due to changes in working capital.
In December 2020, the
Company acquired Coral Chemical ("Coral"), a privately held,
U.S.-based provider of metal finishing fluid solutions, for
approximately $53 million, net of
cash acquired. Coral provides technical expertise and product
solutions for pre-treatment, metalworking and wastewater treatment
applications to the beverage can and general industrial end
markets. Coral had approximately $37
million in net sales, approximately $5 million of net income and approximately
$5.5 million of adjusted EBITDA in
2020 (unaudited). The reconciliation of Coral's net income to
adjusted EBITDA for 2020 includes approximately $1 million of depreciation, interest and taxes,
partially offset by approximately $0.5
million of certain non-recurring items, including the
benefit of COVID-19 related government incentives. The
Company expects to realize approximately $3
million in cost synergies related to this acquisition over
two years from date of acquisition. In February 2021, the Company acquired certain
assets related to tin-plating solutions primarily for the steel end
markets for approximately $25
million, which the Company estimates will add full year net
sales of approximately $8 million and
approximately $4 million of full year
adjusted EBITDA going forward.
The Company has no material debt maturities until August 1, 2024. As of December 31, 2020, the Company's total gross debt
was $899.1 million and its cash on
hand was $181.8 million. The
Company's net debt was $717.3
million, and its net debt divided by its trailing twelve
months adjusted EBITDA was approximately 3.2 to 1 as of
December 31, 2020. The
Company's consolidated net leverage ratio, as defined under its
bank agreement, was approximately 2.8 to 1 as of December 31, 2020 compared to a maximum permitted
leverage of 4.0 to 1. Based on current projections of future
liquidity and leverage, the Company does not expect any compliance
issues with its bank covenants.
Non-GAAP and Pro Forma Measures
The information included in this press release 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 sales, net income (loss)
attributable to Quaker Houghton, EBITDA, adjusted EBITDA, and
adjusted EBITDA margin. The Company believes these non-GAAP
financial measures provide meaningful supplemental information as
they enhance a reader's understanding of the financial performance
of the Company, are indicative of future operating performance of
the Company, and facilitate a comparison among fiscal periods, as
the non-GAAP financial measures exclude items that are not
indicative of future operating performance or not considered core
to the Company's operations. Non-GAAP results and pro forma
information are presented for supplemental informational purposes
only and should not be considered a substitute for the financial
information presented in accordance with GAAP.
The Company presents EBITDA which is calculated as net income
attributable to the Company before depreciation and amortization,
interest expense, net, and taxes on income before equity in net
income of associated companies. The Company also presents
adjusted EBITDA which is calculated as EBITDA plus or minus certain
items that are not indicative of future operating performance or
not considered core to the Company's operations. In addition,
the Company presents non-GAAP operating income which is calculated
as operating income plus or minus certain items that are not
indicative of future operating performance or not considered core
to the Company's operations. Adjusted EBITDA margin and
non-GAAP operating margin are calculated as the percentage of
adjusted EBITDA and non-GAAP operating income to consolidated net
sales, respectively. The Company believes these non-GAAP
measures provide transparent and useful information and are widely
used by analysts, investors, and competitors in our industry as
well as by management in assessing the operating performance of the
Company on a consistent basis.
Additionally, the Company presents non-GAAP net income and
non-GAAP earnings per diluted share as additional performance
measures. Non-GAAP net income is calculated as adjusted
EBITDA, defined above, less depreciation and amortization, interest
expense, net, and taxes on income before equity in net income of
associated companies, in each case adjusted, as applicable, for any
depreciation, amortization, interest or tax impacts resulting from
the non-core items identified in the reconciliation of net income
attributable to the Company to adjusted EBITDA.
Non-GAAP earnings per diluted share is calculated as non-GAAP net
income per diluted share as accounted for under the "two-class
share method." The Company believes that non-GAAP net income
and non-GAAP earnings per diluted share provide transparent and
useful information and are widely used by analysts, investors, and
competitors in our industry as well as by management in assessing
the operating performance of the Company on a consistent
basis.
As it relates to 2021 projected adjusted EBITDA growth for the
Company, including as a result of our recent acquisitions, as well
as other forward-looking information described further above, the
Company has not provided guidance for comparable GAAP measures or a
quantitative reconciliation of forward-looking non-GAAP financial
measures to the most directly comparable U.S. GAAP measure because
it is unable to determine with reasonable certainty the ultimate
outcome of certain significant items necessary to calculate such
measures without unreasonable effort. These items include,
but are not limited to, certain non-recurring or non-core items the
Company may record that could materially impact net income, as well
as the impact of COVID-19. These items are uncertain, depend
on various factors, and could have a material impact on the U.S.
GAAP reported results for the guidance period.
The following tables reconcile the Company's non-GAAP financial
measures (unaudited) to their most directly comparable GAAP
(unaudited) financial measures (dollars in thousands unless
otherwise noted, except per share amounts):
Non-GAAP Operating
Income and Margin Reconciliations
|
|
|
Three Months
Ended
December
31,
|
|
Twelve Months
Ended
December
31,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Operating
income
|
$
34,707
|
|
$
20,276
|
|
$
59,360
|
|
$
46,134
|
Fair value step up of
inventory sold
|
—
|
|
1,500
|
|
226
|
|
11,714
|
Houghton combination,
integration and other
|
7,004
|
|
12,156
|
|
30,446
|
|
35,945
|
acquisition-related
expenses (a)
|
|
|
|
Restructuring and
related charges
|
1,956
|
|
2,633
|
|
5,541
|
|
26,678
|
Customer bankruptcy
costs
|
—
|
|
1,073
|
|
463
|
|
1,073
|
Charges related to the
settlement of a non-core
|
—
|
|
—
|
|
—
|
|
384
|
equipment
sale
|
|
|
|
Indefinite-lived
intangible asset impairment
|
—
|
|
—
|
|
38,000
|
|
—
|
Non-GAAP operating
income
|
$
43,667
|
|
$
37,638
|
|
$
134,036
|
|
$
121,928
|
Non-GAAP operating
margin (%)
|
11.3%
|
|
9.6%
|
|
9.5%
|
|
10.8%
|
|
|
EBITDA, Adjusted
EBITDA, Adjusted EBITDA Margin and Non-GAAP Net Income
Reconciliations
|
|
|
Three Months
Ended
December
31,
|
|
Twelve Months
Ended
December
31,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Net income
attributable to Quaker Chemical Corporation
|
$
48,470
|
|
$
15,240
|
|
$
39,658
|
|
$
31,622
|
Depreciation and
amortization (a)(b)
|
20,730
|
|
21,250
|
|
84,494
|
|
45,264
|
Interest expense, net
(c)
|
4,494
|
|
9,365
|
|
26,603
|
|
16,976
|
Taxes on income before
equity in net income
|
2,307
|
|
(2,012)
|
|
(5,296)
|
|
2,084
|
of associated
companies (d)
|
|
|
|
EBITDA
|
$
76,001
|
|
$
43,843
|
|
$
145,459
|
|
$
95,946
|
Equity income in a
captive insurance company
|
(454)
|
|
(562)
|
|
(1,151)
|
|
(1,822)
|
Fair value step up of
inventory sold
|
—
|
|
1,500
|
|
226
|
|
11,714
|
Houghton combination,
integration and other
|
6,859
|
|
11,572
|
|
29,538
|
|
35,361
|
acquisition-related
expenses (a)
|
|
|
|
Restructuring and
related charges
|
1,956
|
|
2,633
|
|
5,541
|
|
26,678
|
Customer bankruptcy
costs
|
—
|
|
1,073
|
|
463
|
|
1,073
|
Charges related to the
settlement of a non-core
|
—
|
|
—
|
|
—
|
|
384
|
equipment
sale
|
|
|
|
Indefinite-lived
intangible asset impairment
|
—
|
|
—
|
|
38,000
|
|
—
|
Pension and
postretirement benefit costs,
|
(899)
|
|
501
|
|
21,592
|
|
2,805
|
non-service
components
|
|
|
|
Gain on changes in
insurance settlement restrictions
of an inactive subsidiary and
related insurance
insolvency recovery
|
(18,144)
|
|
(60)
|
|
(18,144)
|
|
(60)
|
Currency conversion
impacts of hyper-
|
172
|
|
142
|
|
450
|
|
1,033
|
inflationary
economies
|
|
|
|
Adjusted
EBITDA
|
$
65,491
|
|
$
60,642
|
|
$
221,974
|
|
$
173,112
|
Adjusted EBITDA
margin (%)
|
17.0%
|
|
15.5%
|
|
15.7%
|
|
15.3%
|
|
|
|
|
Adjusted
EBITDA
|
$
65,491
|
|
$
60,642
|
|
$
221,974
|
|
$
173,112
|
Less: Depreciation and
amortization (a)(b)
|
20,730
|
|
20,666
|
|
83,732
|
|
44,680
|
Less: Interest
expense, net - adjusted (c)
|
4,494
|
|
9,365
|
|
26,603
|
|
14,896
|
Less: Taxes on income
before equity in net
|
11,015
|
|
6,912
|
|
26,488
|
|
24,825
|
income of associated
companies – adjusted (d)
|
|
|
|
Non-GAAP net
income
|
$
29,252
|
|
$
23,699
|
|
$
85,151
|
|
$
88,711
|
|
|
Non-GAAP Earnings
per Diluted Share Reconciliations
|
|
|
Three Months
Ended
December
31,
|
|
Twelve Months
Ended
December
31,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
GAAP earnings per
diluted share attributable to Quaker Chemical Corporation common
shareholders (e)
|
$
2.72
|
|
$
0.86
|
|
$
2.22
|
|
$
2.08
|
Equity income in a
captive insurance company per diluted share
|
(0.03)
|
|
(0.03)
|
|
(0.07)
|
|
(0.12)
|
Fair value step up of
inventory sold per diluted share
|
—
|
|
0.07
|
|
0.01
|
|
0.58
|
Houghton combination,
integration and other acquisition-related expenses per diluted
share (a)
|
0.28
|
|
0.56
|
|
1.31
|
|
2.05
|
Restructuring and
related charges per diluted share
|
0.08
|
|
0.11
|
|
0.23
|
|
1.34
|
Customer bankruptcy
costs per diluted share
|
—
|
|
0.04
|
|
0.02
|
|
0.05
|
Charges related to the
settlement of a non-core equipment sale per diluted
share
|
—
|
|
—
|
|
—
|
|
0.02
|
Indefinite-lived
intangible asset impairment per diluted share
|
—
|
|
—
|
|
1.65
|
|
—
|
Pension and
postretirement benefit costs, non-service components per diluted
share
|
(0.04)
|
|
0.02
|
|
0.79
|
|
0.14
|
Gain on changes in
insurance settlement restrictions
of an inactive subsidiary and related insurance
insolvency recovery per diluted share
|
(0.78)
|
|
(0.00)
|
|
(0.78)
|
|
(0.00)
|
Currency conversion
impacts of hyper-inflationary economies per diluted
share
|
0.00
|
|
0.01
|
|
0.02
|
|
0.07
|
Impact of certain
discrete tax items per diluted share
|
(0.60)
|
|
(0.30)
|
|
(0.62)
|
|
(0.38)
|
Non-GAAP earnings per
diluted share (e)
|
$
1.63
|
|
$
1.34
|
|
$
4.78
|
|
$
5.83
|
|
|
(a)
|
Houghton combination,
integration and other acquisition-related expenses include certain
legal, financial, and other advisory and consultant costs incurred
in connection with due diligence, regulatory approvals, integration
planning, and closing the Combination, as well as certain other
one-time costs associated with the Company's acquisition-related
activities. The Company recorded $0.8 million of accelerated
depreciation expense related to the Combination during the twelve
months ended December 31, 2020, as well as $0.6 million during the
both the three and twelve months ended December 31, 2019,
respectively. There was no similar accelerated depreciation
expense in the three months ended December 31, 2020. This
accelerated depreciation expense was recorded within both COGS as
well as Combination, integration and other acquisition-related
expenses. The amount of accelerated depreciation expense
recorded within COGS was $0.7 million during the twelve months
ended December 31, 2020, and $0.5 million during the both the three
and twelve months ended December 31, 2019, respectively.
These amounts recorded within COGS are included in the caption
Houghton combination, integration and other acquisition-related
expenses in the reconciliation of Operating income to Non-GAAP
operating income and GAAP earnings per diluted share attributable
to Quaker Chemical Corporation common shareholders to Non-GAAP
earnings per diluted share. In addition, these accelerated
depreciation amounts are recorded within the caption Depreciation
and amortization in the reconciliation of Net income attributable
to Quaker Chemical Corporation to Adjusted EBITDA; however, it is
excluded in the reconciliation of Adjusted EBITDA to Non-GAAP net
income. During the twelve months ended December 31, 2020, the
Company recorded a loss of $0.6 million on the sale of certain
held-for-sale assets related to the Combination, as well as $0.8
million of income related to an indemnification asset, which are
both included in the caption Houghton combination, integration and
other acquisition-related expenses in the reconciliations of GAAP
earnings per diluted share attributable to Quaker Chemical
Corporation common shareholders to Non-GAAP earnings per diluted
share as well as the reconciliation of Net income attributable to
Quaker Chemical Corporation to Adjusted EBITDA and to Non-GAAP net
income.
|
|
|
(b)
|
Depreciation and
amortization for the three and twelve months ended December 31,
2020 includes $0.3 million and $1.2 million, respectively, of
amortization expense recorded within equity in net income of
associated companies in the Statements of Income, attributable to
the amortization of the fair value step up for our 50% interest in
a joint venture in Korea as a result of required purchase
accounting. Comparatively, the three and twelve months ended
December 31, 2019 includes $0.3 million and $0.4 million of similar
amortization expense recorded within equity in net income of
associated companies.
|
|
|
(c)
|
Interest expense, net
– adjusted excludes $2.1 million for the twelve months ended
December 31, 2019, of interest costs the Company incurred to
maintain the bank commitment to finance the Combination, prior to
executing the Company's credit facility and closing the Combination
on August 1, 2019.
|
|
|
(d)
|
Taxes on income
before equity in net income of associated companies – adjusted
includes the Company's tax expense adjusted for the impact of any
current and deferred income tax expense (benefit), as applicable,
of the reconciling items presented in the reconciliation of Net
income attributable to Quaker Chemical Corporation to adjusted
EBITDA, above, determined utilizing the applicable rates in the
taxing jurisdictions in which these adjustments occurred, subject
to deductibility. In addition, this caption also includes the
impact of certain specific tax charges and benefits, net, which the
Company does not consider core or indicative of future performance,
including tax benefits, net, of $10.8 million and $11.2 million in
the three and twelve months ended December 31, 2020 and $5.3
million and $5.7 million during the three and twelve months ended
December 31, 2019, respectively.
|
|
|
(e)
|
The Company's
calculation of GAAP and non-GAAP earnings per diluted share
attributable to Quaker Chemical Corporation common shareholders for
the three and twelve months ended December 31, 2020 and 2019 was
impacted by the 4.3 million share issuance in connection with
closing the Combination. As a result, the per diluted share
result for each of the four quarters of 2019, as reported on a
standalone basis, may not add up to the per diluted share result
for the twelve months ended December 31, 2019.
|
Pro Forma Adjusted Measures and Reconciliations
The Company has provided certain unaudited pro forma financial
information in this press release. The unaudited pro forma
financial information is based on the historical consolidated
financial statements and results of both Quaker and Houghton, and
has been prepared to illustrate the effects of the
Combination. The unaudited pro forma financial information
has been presented for informational purposes only and is not
necessarily indicative of Quaker Houghton's past results of
operations, nor is it indicative of the future operating results of
Quaker Houghton and should not be considered a substitute for the
financial information presented in accordance with GAAP. The
Company has not provided pro forma financial information as it
relates to the acquired operating divisions of Norman Hay plc based on materiality. The
following schedules present the Company's unaudited pro forma 2019
financial information (see footnote a) for net sales, as well as
net income (loss) attributable to Quaker Houghton and the
applicable reconciliation to EBITDA and adjusted EBITDA on a pro
forma non-GAAP basis (dollars in millions unless otherwise
noted):
|
Twelve months
ended December 31, 2019 (a)
|
|
As
Reported
|
|
Houghton
|
|
Divestitures
(b)
|
|
Other
(c)
|
|
Pro Forma
*
|
Net sales
|
$
1,134
|
|
$
475
|
|
$
(34)
|
|
$
(13)
|
|
$
1,562
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
attributable to Quaker Houghton
|
$
32
|
|
$
(3)
|
|
$
(6)
|
|
$
10
|
|
$
33
|
Depreciation and
amortization
|
45
|
|
31
|
|
—
|
|
3
|
|
77
|
Interest expense,
net
|
17
|
|
33
|
|
—
|
|
(15)
|
|
35
|
Taxes on income (loss)
(d)
|
2
|
|
(1)
|
|
(2)
|
|
3
|
|
2
|
EBITDA *
|
96
|
|
60
|
|
(8)
|
|
1
|
|
148
|
Combination,
integration and other acquisition-related expenses
|
35
|
|
44
|
|
—
|
|
—
|
|
80
|
Gain on sale of
divested assets
|
—
|
|
(35)
|
|
—
|
|
—
|
|
(35)
|
Fair value step up of
Houghton and Norman Hay inventory sold
|
12
|
|
—
|
|
—
|
|
—
|
|
12
|
Restructuring and
related charges
|
27
|
|
—
|
|
—
|
|
—
|
|
27
|
Other addbacks
(e)
|
3
|
|
(0)
|
|
—
|
|
—
|
|
3
|
Adjusted EBITDA
*
|
$
173
|
|
$
68
|
|
$
(8)
|
|
$
1
|
|
$
234
|
Adjusted EBITDA margin
* (%)
|
15%
|
|
14%
|
|
24%
|
|
-4%
|
|
15%
|
* Certain amounts may not calculate due to rounding,
including EBITDA, Adjusted EBITDA, Adjusted EBITDA margin (%) as
well as the total pro forma financial results as presented for
combined Quaker Houghton
|
|
(a)
|
As reported results
for the twelve months ended December 31, 2019 include five months
of Houghton's operations as the Combination closed on August 1,
2019. Houghton reflects the results prior to closing of the
Combination, including year-to-date July 2019. Pro forma
results for the three months ended December 31, 2020 and 2019, as
well as the twelve months ended December 31, 2020 have not been
presented above because the actual results for Quaker Houghton as
presented in this press release are the applicable comparative
results.
|
|
|
(b)
|
Divestitures includes the elimination of results
associated with divested product lines.
|
|
|
(c)
|
Other includes: (i)
additional depreciation and amortization expense based on the
initial estimates of fair value step up and estimated useful lives
of depreciable fixed assets, definite-lived intangible assets and
investment in associated companies acquired; (ii) adoption of
required accounting guidance and alignment of related accounting
policies; (iii) elimination of transactions between Quaker and
Houghton; and (iv) an adjustment to interest expense, net, to
reflect the impact of the new financing and capital structure of
the combined Company.
|
|
|
(d)
|
Taxes on income
(loss) related to the Divestiture and Other reflect each tax
effected at the U.S. tax rate of 21%.
|
|
|
(e)
|
Other addbacks
includes: (i) equity income in a captive insurance company; (ii)
pension and postretirement benefit costs, non-service components;
(iii) customer bankruptcy costs; (iv) insurance insolvency
recoveries; (v) currency conversion impacts of
hyper-inflationary economies; and (vi) charges related to the
settlement of a non-core equipment sale.
|
Forward-Looking Statements
This press release contains "forward-looking statements" within
the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. These statements can be identified by the fact that
they do not relate strictly to historical or current facts.
We have based these forward-looking statements, including
statements regarding the potential effects of the COVID-19 pandemic
on the Company's business, results of operations, and financial
condition, our expectations that we will maintain sufficient
liquidity and remain in compliance with the terms of the Company's
credit facility, and statements regarding remediation of our
material weaknesses in internal control over financial reporting on
our current expectations about future events. These
forward-looking statements include statements with respect to our
beliefs, plans, objectives, goals, expectations, anticipations,
intentions, financial condition, results of operations, future
performance, and business, including but not limited to the
potential benefits of the Combination and other acquisitions, the
impacts on our business as a result of the COVID-19 pandemic and
any projected global economic rebound or anticipated positive
results due to Company actions taken in response to the pandemic,
and our current and future results and plans and statements that
include the words "may," "could," "should," "would," "believe,"
"expect," "anticipate," "estimate," "intend," "plan" or similar
expressions. These forward-looking statements are subject to
certain risks and uncertainties that could cause actual results to
differ materially from those projected in such statements. A
major risk is that demand for the Company's products and services
is largely derived from the demand for its customers' products,
which subjects the Company to uncertainties related to downturns in
a customer's business and unanticipated customer production
shutdowns. Other major risks and uncertainties include, but
are not limited to, the primary and secondary impacts of the
COVID-19 pandemic, including actions taken in response to the
pandemic by various governments, which could exacerbate some or all
of the other risks and uncertainties faced by the Company,
including the potential for significant increases in raw material
costs, supply chain disruptions, customer financial instability,
worldwide economic and political disruptions, foreign currency
fluctuations, significant changes in applicable tax rates and
regulations, future terrorist attacks and other acts of violence.
Furthermore, the Company is subject to the same business
cycles as those experienced by our customers in the steel,
automobile, aircraft, industrial equipment, and durable goods
industries. The ultimate impact of COVID-19 on our business
will depend on, among other things, the extent and duration of the
pandemic, the severity of the disease and the number of people
infected with the virus, the continued uncertainty regarding
availability, administration and long-term efficacy of a vaccine,
or other treatments, including on new strands or mutations of the
virus, the longer-term effects on the economy by the pandemic,
including the resulting market volatility, and by the measures
taken by governmental authorities and other third parties
restricting day-to-day life and business operations and the length
of time that such measures remain in place, as well as laws and
other governmental programs implemented to address the pandemic or
assist impacted businesses, such as fiscal stimulus and other
legislation designed to deliver monetary aid and other
relief. Other factors could also adversely affect us,
including those related to the Combination and other acquisitions
and the integration of acquired businesses. Our
forward-looking statements are subject to risks, uncertainties and
assumptions about the Company and its operations that are subject
to change based on various important factors, some of which are
beyond our control. These risks, uncertainties, and possible
inaccurate assumptions relevant to our business could cause our
actual results to differ materially from expected and historical
results. All forward-looking statements included in this
press release, including expectations about the improvements in
business conditions during 2021 and future periods, are based upon
information available to the Company as of the date of this press
release, which may change. Therefore, we caution you not to
place undue reliance on our forward-looking statements. For
more information regarding these risks and uncertainties as well as
certain additional risks that we face, refer to the Risk Factors
section, which appears in Item 1A of our Annual Report on Form 10-K
for the year ended December 31, 2019,
our Quarterly Report on Form 10-Q for the quarter ended
September 30, 2020, and in subsequent
reports filed from time to time with the Securities and Exchange
Commission, including, once filed, our Annual Report on Form 10-K
for the year ended December 31,
2020. We do not intend to, and we disclaim any duty or
obligation to, update or revise any forward-looking statements to
reflect new information or future events or for any other
reason. This discussion is provided as permitted by the
Private Securities Litigation Reform Act of 1995.
Conference Call
As previously announced, the Company's investor conference call
to discuss its fourth quarter and full year performance is
scheduled for February 26, 2021 at
8:30 a.m. (ET). A live webcast
of the conference call, together with supplemental information, can
be accessed through the Company's Investor Relations website at
investors.quakerhoughton.com. You can also access the
conference call by dialing 877-269-7756.
About Quaker Houghton
Quaker Houghton is a global leader in industrial process fluids.
With a presence around the world, including operations in
over 25 countries, our customers include thousands of the world's
most advanced and specialized steel, aluminum, automotive,
aerospace, offshore, can, mining, and metalworking companies.
Our high-performing, innovative and sustainable solutions are
backed by best-in-class technology, deep process knowledge and
customized services. With approximately 4,200 employees,
including chemists, engineers and industry experts, we partner with
our customers to improve their operations so they can run even more
efficiently, even more effectively, whatever comes next.
Quaker Houghton is headquartered in Conshohocken, Pennsylvania, located near
Philadelphia in the United
States. Visit quakerhoughton.com to learn more.
Quaker Chemical
Corporation
|
Condensed
Consolidated Statements of Operations
|
(Dollars in
thousands, except share and per share amounts)
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
December 31,
|
|
Twelve Months
Ended
December 31,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
(Unaudited)
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
Net
sales
|
$
385,852
|
|
$
391,294
|
|
$
1,417,677
|
|
$
1,133,503
|
|
|
|
|
|
|
|
|
Cost of goods
sold
|
243,838
|
|
255,162
|
|
904,234
|
|
741,386
|
|
|
|
|
|
|
|
|
Gross
profit
|
142,014
|
|
136,132
|
|
513,443
|
|
392,117
|
%
|
36.8%
|
|
34.8%
|
|
36.2%
|
|
34.6%
|
|
|
|
|
|
|
|
|
Selling, general and
administrative expenses
|
98,347
|
|
101,535
|
|
380,752
|
|
283,828
|
Indefinite-lived
intangible asset impairment
|
-
|
|
-
|
|
38,000
|
|
-
|
Restructuring and
related charges
|
1,956
|
|
2,633
|
|
5,541
|
|
26,678
|
Combination,
integration and other acquisition-related expenses
|
7,004
|
|
11,688
|
|
29,790
|
|
35,477
|
|
|
|
|
|
|
|
|
Operating
income
|
34,707
|
|
20,276
|
|
59,360
|
|
46,134
|
%
|
9.0%
|
|
5.2%
|
|
4.2%
|
|
4.1%
|
|
|
|
|
|
|
|
|
Other income
(expense), net
|
16,789
|
|
135
|
|
(5,618)
|
|
(254)
|
Interest expense,
net
|
(4,494)
|
|
(9,365)
|
|
(26,603)
|
|
(16,976)
|
Income before taxes
and equity in net income of associated companies
|
47,002
|
|
11,046
|
|
27,139
|
|
28,904
|
|
|
|
|
|
|
|
|
Taxes on income
before equity in net income of associated companies
|
2,307
|
|
(2,012)
|
|
(5,296)
|
|
2,084
|
Income before equity
in net income of associated companies
|
44,695
|
|
13,058
|
|
32,435
|
|
26,820
|
|
|
|
|
|
|
|
|
Equity in net income
of associated companies
|
3,816
|
|
2,258
|
|
7,352
|
|
5,064
|
|
|
|
|
|
|
|
|
Net income
|
48,511
|
|
15,316
|
|
39,787
|
|
31,884
|
|
|
|
|
|
|
|
|
Less: Net income
attributable to noncontrolling interest
|
41
|
|
76
|
|
129
|
|
262
|
|
|
|
|
|
|
|
|
Net income
attributable to Quaker Chemical Corporation
|
$
48,470
|
|
$
15,240
|
|
$
39,658
|
|
$
31,622
|
%
|
12.6%
|
|
3.9%
|
|
2.8%
|
|
2.8%
|
|
|
|
|
|
|
|
|
Share and per
share data:
|
|
|
|
|
|
|
|
Basic weighted
average common shares outstanding
|
17,764,854
|
|
17,666,163
|
|
17,719,792
|
|
15,126,928
|
Diluted weighted
average common shares outstanding
|
17,817,012
|
|
17,684,090
|
|
17,750,879
|
|
15,163,171
|
|
|
|
|
|
|
|
|
Net income
attributable to Quaker Chemical Corporation common shareholders -
basic
|
$
2.73
|
|
$
0.86
|
|
$
2.23
|
|
$
2.08
|
Net income
attributable to Quaker Chemical Corporation common shareholders -
diluted
|
$
2.72
|
|
$
0.86
|
|
$
2.22
|
|
$
2.08
|
Quaker Chemical
Corporation
|
Condensed
Consolidated Balance Sheets
|
(Dollars in
thousands, except par value and share amounts)
|
|
|
|
|
|
December
31,
|
|
2020
|
|
2019
|
|
(Unaudited)
|
|
|
ASSETS
|
|
|
|
|
|
|
|
Current
assets
|
|
|
|
Cash and cash
equivalents
|
$
181,833
|
|
$
123,524
|
Accounts receivable,
net
|
372,974
|
|
375,982
|
Inventories,
net
|
187,764
|
|
174,950
|
Prepaid expenses and
other current assets
|
50,156
|
|
41,516
|
Total current
assets
|
792,727
|
|
715,972
|
|
|
|
|
Property, plant and
equipment, net
|
203,883
|
|
213,469
|
Right of use lease
assets
|
38,507
|
|
42,905
|
Goodwill
|
631,212
|
|
607,205
|
Other intangible
assets, net
|
1,081,358
|
|
1,121,765
|
Investments in
associated companies
|
95,785
|
|
93,822
|
Deferred tax
assets
|
16,566
|
|
14,745
|
Other non-current
assets
|
31,796
|
|
40,433
|
Total
assets
|
$
2,891,834
|
|
$
2,850,316
|
|
|
|
|
LIABILITIES AND
EQUITY
|
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
Short-term borrowings
and current portion of long-term debt
|
$
38,967
|
|
$
38,332
|
Accounts and other
payables
|
198,872
|
|
170,929
|
Accrued
compensation
|
43,300
|
|
45,620
|
Accrued
restructuring
|
8,248
|
|
18,043
|
Other current
liabilities
|
93,573
|
|
87,010
|
Total current
liabilities
|
382,960
|
|
359,934
|
|
|
|
|
Long-term
debt
|
849,068
|
|
882,437
|
Long-term lease
liabilities
|
27,070
|
|
31,273
|
Deferred tax
liabilities
|
192,763
|
|
211,094
|
Other non-current
liabilities
|
119,059
|
|
123,212
|
Total
liabilities
|
1,570,920
|
|
1,607,950
|
|
|
|
|
Equity
|
|
|
|
Common stock, $1 par
value; authorized 30,000,000 shares; issued and outstanding 2020 -
17,850,616 shares; 2019 - 17,735,162 shares
|
17,851
|
|
17,735
|
Capital in excess of
par value
|
905,171
|
|
888,218
|
Retained
earnings
|
423,940
|
|
412,979
|
Accumulated other
comprehensive loss
|
(26,598)
|
|
(78,170)
|
Total Quaker
shareholders' equity
|
1,320,364
|
|
1,240,762
|
Noncontrolling
interest
|
550
|
|
1,604
|
Total
equity
|
1,320,914
|
|
1,242,366
|
Total liabilities and
equity
|
$
2,891,834
|
|
$
2,850,316
|
Quaker Chemical
Corporation
|
Condensed
Consolidated Statements of Cash Flows
|
(Dollars in
thousands)
|
|
|
|
|
|
Twelve Months
Ended
December 31,
|
|
2020
|
|
2019
|
|
(Unaudited)
|
|
|
Cash flows from
operating activities
|
|
|
|
Net income
|
$
39,787
|
|
$
31,884
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
Amortization of debt
issuance costs
|
4,749
|
|
1,979
|
Depreciation and
amortization
|
83,246
|
|
44,895
|
Equity in
undistributed earnings of associated companies, net of
dividends
|
4,862
|
|
(2,115)
|
Acquisition-related
fair value adjustments related to inventory
|
229
|
|
11,714
|
Deferred income
taxes
|
(38,281)
|
|
(24,242)
|
Uncertain tax
positions (non-deferred portion)
|
1,075
|
|
958
|
Non-current income
taxes payable
|
-
|
|
856
|
Deferred compensation
other, net
|
(471)
|
|
(6,789)
|
Share-based
compensation
|
10,996
|
|
4,861
|
Loss (gain) on
disposal of property, plant, equipment and other assets
|
871
|
|
(58)
|
Insurance settlement
realized
|
(1,035)
|
|
(822)
|
Indefinite-lived
intangible asset impairment
|
38,000
|
|
-
|
Gain on inactive
subsidiary litigation and settlement reserve
|
(18,144)
|
|
-
|
Combination and other
acquisition-related expenses, net of payments
|
860
|
|
(14,414)
|
Restructuring and
related charges
|
5,541
|
|
26,678
|
Pension and other
postretirement benefits
|
16,535
|
|
46
|
Increase (decrease)
in cash from changes in current assets and current liabilities, net
of acquisitions:
|
|
|
|
Accounts
receivable
|
17,170
|
|
19,926
|
Inventories
|
(3,854)
|
|
10,844
|
Prepaid expenses and
other current assets
|
927
|
|
(4,640)
|
Change in
restructuring liabilities
|
(15,745)
|
|
(8,899)
|
Accounts payable and
accrued liabilities
|
22,308
|
|
(8,915)
|
Estimated taxes on
income
|
8,763
|
|
(1,373)
|
Net cash provided by
operating activities
|
178,389
|
|
82,374
|
|
|
|
|
Cash flows from
investing activities
|
|
|
|
Investments in
property, plant and equipment
|
(17,901)
|
|
(15,545)
|
Payments related to
acquisitions, net of cash acquired
|
(56,230)
|
|
(893,412)
|
Proceeds from
disposition of assets
|
2,702
|
|
103
|
Insurance settlement
interest earned
|
44
|
|
222
|
Net cash used in
investing activities
|
(71,385)
|
|
(908,632)
|
|
|
|
|
Cash flows from
financing activities
|
|
|
|
Payments of term loan
debt
|
(37,615)
|
|
-
|
Proceeds from long
term debt
|
-
|
|
750,000
|
(Repayments)
borrowings on revolving credit facilities, net
|
(11,485)
|
|
147,135
|
Repayments on other
debt, net
|
(661)
|
|
(8,798)
|
Financing-related
debt issuance costs
|
-
|
|
(23,747)
|
Dividends
paid
|
(27,563)
|
|
(21,830)
|
Stock options
exercised, other
|
3,867
|
|
1,370
|
Purchase of
noncontrolling interest in affiliates
|
(1,047)
|
|
-
|
Distributions to
noncontrolling affiliate shareholders
|
(751)
|
|
-
|
Net cash (used in)
provided by financing activities
|
(75,255)
|
|
844,130
|
|
|
|
|
Effect of foreign
exchange rate changes on cash
|
6,591
|
|
1,258
|
|
|
|
|
Net increase in cash,
cash equivalents and restricted cash
|
38,340
|
|
19,130
|
Cash, cash
equivalents and restricted cash at the beginning of the
period
|
143,555
|
|
124,425
|
Cash, cash
equivalents and restricted cash at the end of the
period
|
$
181,895
|
|
$ 143,555
|
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SOURCE Quaker Houghton