CONSHOHOCKEN, Pa., July 27, 2017 /PRNewswire/ -- Quaker
Chemical Corporation (NYSE: KWR) today announced a net sales
increase of 8% to $201.2 million in
the second quarter of 2017 compared to $186.9 million in the second quarter of 2016,
driven by organic and acquisition volume growth of 5% and 2%,
respectively. These strong volumes drove higher gross profit
quarter-over-quarter, despite lower gross margin in the second
quarter of 2017 primarily attributable to higher raw material
costs. In addition, current quarter operating income
benefited from the Company's ability to maintain a relatively
consistent level of selling, general and administrative expenses
("SG&A") on the Company's strong net sales growth.
The Company's second quarter of 2017 net income was $11.9 million and its earnings per diluted share
was $0.89 which includes $4.3 million, or $0.27 per diluted share, of expenses incurred
related to the Company's previously announced combination with
Houghton International, Inc ("Houghton"). The Company's
second quarter of 2016 net income was $15.0
million and its earnings per diluted share was $1.13. Excluding combination-related
expenses and other non-core items, the Company's operating
performance, coupled with a lower current quarter tax rate, drove
non-GAAP earnings per diluted share to $1.24, a 12% increase compared to $1.11 in the prior year period. Also, the
Company's adjusted EBITDA of $28.0
million in the second quarter of 2017 represented a 1%
increase compared to the second quarter of 2016. The Company
was able to achieve these reported and non-GAAP results in the
second quarter of 2017 despite a negative foreign exchange impact
of approximately 1%, or $0.01 per
diluted share. In addition, the Company had solid operating
cashflows of $12.5 million in the
second quarter of 2017, despite outflows of $9.4 million in the current quarter related to
certain Houghton combination-related expenses.
Michael F. Barry, Chairman, Chief
Executive Officer and President, commented, "We are pleased with
our second quarter results, despite higher raw material costs which
continued to increase more than we had expected in the
quarter. We were able to grow our organic volumes by 5% on
continued market share gains, as well as from increased production
in some of our end markets. While our gross margins declined
due to raw material price increases, we were able to partially
offset this decline with savings realized from our previously
announced restructuring program and other cost streamlining
initiatives. Overall, we achieved a 1% increase in adjusted
EBITDA and a 12% increase in non-GAAP earnings."
Mr. Barry continued, "Looking forward, we expect our gross
margins to trend upwards over the next two quarters, gradually
heading back to our 37% target. We remain committed to our
strategy and believe our ability to take market share and leverage
our past acquisitions will continue to help offset market
challenges. Our 2017 plans continue to indicate growth in
both the top line and bottom line, excluding Houghton-related
costs, with earnings growth in all regions. Overall, I
continue to remain confident in our future and expect 2017 to be
another good year for Quaker, as we expect to increase non-GAAP
earnings and adjusted EBITDA for the eighth consecutive year.
In addition, we believe our previously announced combination with
Houghton will create long-term sustainable value for our customers
and shareholders, and remains on track to close by the end of
the year or the first quarter of 2018."
Second Quarter of 2017 Summary
Net sales in the second quarter of 2017 were $201.2 million compared to $186.9 million in the second quarter of
2016. The $14.3 million or 8%
increase in net sales was primarily due to a 5% increase in organic
volumes, a 2% increase from acquisitions and a 2% increase due to
price and product mix, partially offset by a negative impact from
foreign currency translation of 1% or $2.3
million.
Gross profit in the second quarter of 2017 increased
$0.4 million or 1% from the second
quarter of 2016, primarily due to the increase in sales volumes,
noted above, largely offset by a lower gross margin of 35.7% in the
second quarter of 2017 compared to 38.2% in the prior year
quarter. The decrease in the Company's gross margin
quarter-over-quarter was attributable to the timing of certain raw
material cost changes versus related sales price adjustments and
changes in the mix of products sold. The prior year second
quarter gross margin benefited from a generally declining raw
material cost environment, whereas the second quarter of 2017 was
negatively impacted by a generally rising raw material cost
environment.
SG&A increased $0.9 million
during the second quarter of 2017 compared to the second quarter of
2016 due to the net impact of several factors. Specifically,
the Company's SG&A increased as a result of higher
labor-related costs, primarily due to annual compensation increases
and the timing of certain incentive compensation accruals, and
additional SG&A associated with the Company's fourth quarter of
2016 Lubricor Inc. acquisition. These were partially offset
by decreases to SG&A as a result of foreign currency
translation and certain cost savings efforts, including the
Company's 2015 global restructuring program.
During the second quarter of 2017, the Company incurred
$4.3 million or $0.27 per diluted share of expenses related to
its previously announced combination with Houghton, including
certain legal, regulatory, environmental, financial, and other
advisory and consultant expenses related to due diligence,
integration planning and the financing associated with the
Combination. There were no similar combination-related
expenses incurred in the second quarter of 2016.
Operating income in the second quarter of 2017 was $17.9 million compared to $22.7 million in the second quarter of
2016. The decrease in operating income was primarily due to
the Houghton combination expenses, noted above.
Other expense, net, was $1.6
million in the second quarter of 2017 compared to
$0.3 million in the second quarter of
2016. The increase in other expense was primarily driven by a
settlement charge of $1.9 million or
$0.09 per diluted share as a result
of the Company's decision to offer lump sum settlements of its U.S.
pension plan obligation to vested and terminated participants
during the second quarter of 2017. This settlement charge was
partially offset by higher foreign currency transaction gains
realized in the second quarter of 2017 compared to the second
quarter of 2016, as well as higher receipts of local
municipality-related grants in one of the Company's regions
quarter-over-quarter.
Interest expense and interest income were relatively consistent
quarter-over-quarter.
The Company's effective tax rates for the second quarters of
2017 and 2016 were 26.2% and 32.6%, respectively. The
Company's second quarter of 2017 effective tax rate includes the
favorable impact of an accounting standard that was adopted in the
current year. Comparatively, the second quarter of 2016
effective tax rate was elevated, as it reflected earnings taxed at
one of the Company's subsidiaries at a statutory rate of 25% while
awaiting recertification of a concessionary 15% tax rate, which the
Company received and recorded the full year benefit of during the
fourth quarter of 2016. This concessionary tax rate was
available to the Company during the second quarter of
2017.
Equity in net income of associated companies ("equity income")
was consistent quarter-over-quarter, as higher earnings from the
Company's interest in a captive insurance company were offset by a
currency conversion charge associated with the Company's
Venezuela affiliate due to the
significant devaluation of the Venezuelan bolivar fuerte
experienced during second quarter of 2017.
The Company's net income attributable to noncontrolling interest
was consistent quarter-over-quarter.
Changes in foreign exchange rates, excluding the currency
conversion impacts of the Venezuelan bolivar fuerte, noted above,
negatively impacted the Company's second quarter of 2017 earnings
by approximately 1%, or $0.01 per
diluted share.
Year-to-Date 2017 Summary
Net sales in the first six months of 2017 were $396.1 million compared to $365.0 million in the first six months of
2016. The $31.1 million or 9%
increase in net sales was primarily due to a 7% increase in organic
volumes, a 2% increase from acquisitions and a 2% increase due to
price and product mix, partially offset by a negative impact from
foreign currency translation of approximately 2% or $5.0 million.
Gross profit in the first six months of 2017 increased
$3.3 million or 2% from the first six
months of 2016, primarily due to the increase in sales volumes,
noted above, partially offset by a lower gross margin of 36.0% in
the first six months of 2017 compared to 38.2% in the same prior
year period. Consistent with the results noted above for the
quarter, the decrease in the Company's gross margin during the
first six months of 2017 was attributable to the timing of certain
raw material cost increases and the Company's related sales price
adjustments and changes in product mix.
SG&A increased $0.8 million in
the first six months of 2017 compared to the prior year period due
to similar factors noted in the second quarter of 2017 summary,
above. Specifically, SG&A increased due to the Company's
prior year Lubricor Inc. acquisition and overall labor related
costs, partially offset by foreign currency translation and the
Company's past cost savings efforts.
During the first six months of 2017, the Company incurred
$13.4 million or $0.95 per diluted share of expenses related to
its previously announced combination with Houghton, noted
above. There were no similar combination-related expenses
incurred in the first six months of 2016.
Operating income in the first six months of 2017 was
$31.7 million compared to
$42.5 million in the first six months
of 2016. The decrease in operating income was primarily due
to the Houghton combination expenses along with slightly higher
levels of SG&A not related to the Houghton combination, which
more than offset gross profit increases on strong volume growth,
noted above.
Other expense was $1.7 million in
the first six months of 2017 compared to $0.2 million in the first six months of
2016. The increase in other expense was primarily driven by
the U.S. pension plan settlement charge during the second quarter
of 2017, noted above.
Interest expense was relatively consistent year-over-year.
Interest income was $0.2 million
higher in the first six months of 2017 compared to the first six
months of 2016, primarily due to an increase in the level of the
Company's invested cash in certain regions with higher
returns.
The Company's effective tax rates for the first six months of
2017 and 2016 were 37.4% and 32.5%, respectively. The
Company's first six months of 2017 effective tax rate was higher
due to the impact of certain non-deductible Houghton
combination-related expenses partially offset by the favorable
impact of the accounting standard adoption, noted above. The
first six months of 2016 effective tax rate was elevated due to the
temporary inflated rate at one of the Company's subsidiaries, noted
above.
Equity income increased $0.9
million in the first six months of 2017 compared to the
first six months of 2016. The increase was primarily due to
higher earnings from the Company's interest in a captive insurance
company in the current year.
The Company had a $0.3 million
increase in net income attributable to noncontrolling interest in
the first six months of 2017 compared to the first six months of
2016, primarily due to an increase in performance from certain
consolidated affiliates in the Company's Asia/Pacific region.
Changes in foreign exchange rates, excluding the currency
conversion impacts of the Venezuelan bolivar fuerte, noted above,
negatively impacted the Company's first six months of 2017 earnings
by approximately 2%, or $0.05 per
diluted share.
Balance Sheet and Cash Flow Items
The Company's net operating cash flow of $12.5 million in the second quarter of 2017
increased its year-to-date net operating cash flow to $20.8 million, as compared to $36.0 million in the first six months of
2016. The decrease in net operating cash flow was primarily
due to $10.1 million of Houghton
combination-related payments in the current year and higher cash
invested in the Company's working capital as a result of the
Company's operating performance and sales volume growth. In
addition, the Company paid a $4.6
million cash dividend during the second quarter of 2017,
increasing its total dividends paid to $9.2
million in the first six months of 2017, which represents a
$0.7 million increase in cash
dividends paid year-over-year. Overall, the Company's
liquidity and balance sheet remain strong, as its cash position
exceeded its debt at June 30, 2017 by
$24.2 million and the Company's total
debt continued to be less than one times its trailing twelve month
adjusted EBITDA.
Houghton Combination
On April 4, 2017, Quaker entered
into a share purchase agreement with Gulf Houghton Lubricants, Ltd.
to purchase the entire issued and outstanding share capital of
Houghton ("the Combination"). The shares will be bought for
aggregate purchase consideration consisting of: (i) $172.5 million in cash; (ii) a number of shares
of common stock, $1.00 par value per
share, of the Company comprising 24.5% of the common stock
outstanding upon the closing of the Combination; and (iii) the
Company's assumption of Houghton's net indebtedness as of the
closing of the Combination, which is estimated to be approximately
$690 million. At closing, the
total aggregate purchase consideration is dependent on the
Company's stock price and the level of Houghton's
indebtedness. The Company secured $1.15 billion in commitments from Bank of America
Merrill Lynch and Deutsche Bank to fund the Combination and to
provide additional liquidity at signing, and has since replaced
these commitments with a syndicated bank agreement with customary
terms and conditions as of June 30,
2017. Funding of the syndicated bank agreement is contingent
upon closing of the Combination, and the Company will only incur
interest costs to maintain the banks' committed capital until
closing. In addition, the issuance of the Company's shares at
closing of the Combination is subject to approval by Quaker's
shareholders under the rules of the New York Stock Exchange.
The Company expects to seek such approval of the share issuance at
a meeting of the Company's shareholders in the third quarter of
2017. Also, the Combination is subject to regulatory
approvals in the United States,
Europe, China and Australia. During July 2017, the Company received regulatory
approval from China. Depending on
the shareholder and regulatory approvals noted above, as well as
other customary terms and conditions set forth in the share
purchase agreement, Quaker still estimates closing of the
Combination to occur either in the fourth quarter of 2017 or the
first quarter of 2018.
Non-GAAP Measures
Included in this public release are two non-GAAP (unaudited)
financial measures: non-GAAP earnings per diluted share and
adjusted EBITDA. 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 more indicative of future operating performance
of the Company, and facilitate a better comparison among fiscal
periods, as the non-GAAP financial measures exclude items that are
not considered core to the Company's operations. Non-GAAP
results are presented for supplemental informational purposes only
and should not be considered a substitute for the financial
information presented in accordance with GAAP.
The following tables reconcile non-GAAP earnings per diluted
share (unaudited) and adjusted EBITDA (unaudited) to their most
directly comparable GAAP (unaudited) financial measures:
|
Three Months
Ended
June
30,
|
|
Six Months
Ended June
30,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
GAAP earnings per
diluted share attributable to Quaker
Chemical Corporation common shareholders
|
$
0.89
|
|
$
1.13
|
|
$
1.42
|
|
$
2.11
|
Equity income in a
captive insurance company per diluted share
|
(0.04)
|
|
(0.02)
|
|
(0.08)
|
|
(0.03)
|
Houghton
combination-related expenses per diluted share
|
0.27
|
|
—
|
|
0.95
|
|
—
|
U.S. pension plan
settlement charge per diluted share
|
0.09
|
|
—
|
|
0.09
|
|
—
|
Cost streamlining
initiative per diluted share
|
—
|
|
—
|
|
0.01
|
|
—
|
Currency conversion
impacts of the Venezuelan bolivar fuerte per diluted
share
|
0.03
|
|
—
|
|
0.03
|
|
0.01
|
Non-GAAP earnings per
diluted share
|
$
1.24
|
|
$
1.11
|
|
$
2.42
|
|
$
2.09
|
|
|
Three Months
Ended
June
30,
|
|
Six Months
Ended
June
30,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Net income
attributable to Quaker Chemical Corporation
|
$ 11,906
|
|
$ 15,015
|
|
$ 18,898
|
|
$ 27,961
|
Depreciation and
amortization
|
5,007
|
|
4,986
|
|
9,937
|
|
9,920
|
Interest
expense
|
780
|
|
727
|
|
1,436
|
|
1,468
|
Taxes on income
before equity in net income of associated companies
|
4,224
|
|
7,238
|
|
11,089
|
|
13,543
|
Equity income in a
captive insurance company
|
(435)
|
|
(303)
|
|
(1,027)
|
|
(355)
|
Houghton
combination-related expenses
|
4,338
|
|
—
|
|
13,413
|
|
—
|
U.S. pension plan
settlement charge
|
1,860
|
|
—
|
|
1,860
|
|
—
|
Cost streamlining
initiative
|
—
|
|
—
|
|
286
|
|
—
|
Currency conversion
impacts of the Venezuelan bolivar fuerte
|
340
|
|
—
|
|
340
|
|
88
|
Adjusted
EBITDA
|
$ 28,020
|
|
$ 27,663
|
|
$ 56,232
|
|
$ 52,625
|
Adjusted EBITDA
margin (%)
|
13.9%
|
|
14.8%
|
|
14.2%
|
|
14.4%
|
Forward-Looking Statements
This release contains "forward-looking statements" within the
meaning of Section 27A of the Securities Act of 1933 and Section
21E of the Securities Exchange Act of 1934. 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, significant increases in raw material costs, customer financial
stability, worldwide economic and political conditions, foreign
currency fluctuations, significant changes in applicable tax rates
and regulations, future terrorist attacks and other acts of
violence. Other factors, including those related to the
previously announced Houghton combination, could also adversely
affect us. For more information regarding these risks and
uncertainties as well as certain additional risks that we face, you
should refer to the Risk Factors detailed in Item 1A of our Form
10-K for the year ended December 31,
2016, and in our quarterly and other reports filed from time
to time with the Commission. Therefore, we caution you not to
place undue reliance on our forward-looking statements. This
discussion is provided as permitted by the Private Securities
Litigation Reform Act of 1995.
Additional Information and Where to Find It
In connection with the proposed Combination,
Quaker Chemical will file a proxy statement with the
Securities and Exchange Commission. INVESTORS AND SECURITY
HOLDERS ARE ADVISED TO READ THIS PROXY STATEMENT WHEN IT BECOMES
AVAILABLE, BECAUSE IT WILL CONTAIN IMPORTANT INFORMATION. Investors
and security holders may obtain a free copy of the proxy statement
(when available) and other documents filed by
Quaker Chemical with the Commission at the Commission's
web site at http://www.sec.gov. Free copies of the proxy statement,
once available, and of Quaker Chemical's other filings with
the Commission may also be obtained from the Company by directing a
request to: Victoria K. Gehris, Investor Relations,
+1.610.832.4246.
Quaker Chemical and its directors, executive officers
and other members of its management may solicit proxies from its
shareholders in favor of the transaction. Information concerning
such persons who may be considered participants in the solicitation
of Quaker Chemical's shareholders under the rules of the
Commission will be set forth in the definitive proxy statement to
be filed by Quaker with the Commission in connection with the
transaction.
Conference Call
As previously announced, Quaker Chemical's investor conference
call to discuss the second quarter of 2017 results is scheduled for
July 28, 2017 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
https://www.quakerchem.com. You can also access the
conference call by dialing 877-269-7756.
About Quaker
Quaker Chemical is a leading global provider of
process fluids, chemical specialties, and technical expertise
to a wide range of industries, including steel, aluminum,
automotive, mining, aerospace, tube and pipe, cans, and
others. For nearly 100 years, Quaker has helped customers
around the world achieve production efficiency, improve product
quality, and lower costs through a combination of innovative
technology, process knowledge, and customized services.
Headquartered in Conshohocken,
Pennsylvania USA, Quaker serves businesses worldwide with
a network of dedicated and experienced professionals
whose mission is to make a difference.
Quaker Chemical
Corporation
|
Condensed
Consolidated Statements of Income
|
(Dollars in
thousands, except share and per share data)
|
|
|
|
|
|
|
|
|
|
(Unaudited)
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
|
|
|
|
|
|
|
Net
sales
|
$
201,183
|
|
$
186,915
|
|
$
396,092
|
|
$
364,992
|
|
|
|
|
|
|
|
|
Cost of goods
sold
|
129,348
|
|
115,514
|
|
253,370
|
|
225,610
|
|
|
|
|
|
|
|
|
Gross
profit
|
71,835
|
|
71,401
|
|
142,722
|
|
139,382
|
%
|
35.7%
|
|
38.2%
|
|
36.0%
|
|
38.2%
|
|
|
|
|
|
|
|
|
Selling, general and
administrative expenses
|
49,594
|
|
48,700
|
|
97,648
|
|
96,843
|
Combination-related
expenses
|
4,338
|
|
-
|
|
13,413
|
|
-
|
|
|
|
|
|
|
|
|
Operating
income
|
17,903
|
|
22,701
|
|
31,661
|
|
42,539
|
%
|
8.9%
|
|
12.1%
|
|
8.0%
|
|
11.7%
|
|
|
|
|
|
|
|
|
Other expense,
net
|
(1,571)
|
|
(337)
|
|
(1,676)
|
|
(235)
|
Interest
expense
|
(780)
|
|
(727)
|
|
(1,436)
|
|
(1,468)
|
Interest
income
|
540
|
|
545
|
|
1,063
|
|
893
|
Income before taxes
and equity in net income of associated companies
|
16,092
|
|
22,182
|
|
29,612
|
|
41,729
|
|
|
|
|
|
|
|
|
Taxes on income
before equity in net income of associated companies
|
4,224
|
|
7,238
|
|
11,089
|
|
13,543
|
Income before equity
in net income of associated companies
|
11,868
|
|
14,944
|
|
18,523
|
|
28,186
|
|
|
|
|
|
|
|
|
Equity in net income
of associated companies
|
473
|
|
461
|
|
1,432
|
|
563
|
|
|
|
|
|
|
|
|
Net income
|
12,341
|
|
15,405
|
|
19,955
|
|
28,749
|
|
|
|
|
|
|
|
|
Less: Net income
attributable to noncontrolling interest
|
435
|
|
390
|
|
1,057
|
|
788
|
|
|
|
|
|
|
|
|
Net income
attributable to Quaker Chemical Corporation
|
$
11,906
|
|
$
15,015
|
|
$
18,898
|
|
$
27,961
|
%
|
5.9%
|
|
8.0%
|
|
4.8%
|
|
7.7%
|
|
|
|
|
|
|
|
|
Share and per
share data:
|
|
|
|
|
|
|
|
Basic weighted
average common shares outstanding
|
13,195,053
|
|
13,126,134
|
|
13,185,627
|
|
13,121,470
|
Diluted weighted
average common shares outstanding
|
13,240,279
|
|
13,144,713
|
|
13,230,937
|
|
13,136,653
|
|
|
|
|
|
|
|
|
Net income
attributable to Quaker Chemical Corporation Common
Shareholders - basic
|
$
0.90
|
|
$
1.13
|
|
$
1.42
|
|
$
2.11
|
Net income
attributable to Quaker Chemical Corporation Common
Shareholders - diluted
|
$
0.89
|
|
$
1.13
|
|
$
1.42
|
|
$
2.11
|
Quaker Chemical
Corporation
|
Condensed
Consolidated Balance Sheets
|
(Dollars in
thousands, except par value and share amounts)
|
|
|
|
|
|
(Unaudited)
|
|
June
30,
|
|
December
31,
|
|
2017
|
|
2016
|
ASSETS
|
|
|
|
|
|
|
|
Current
assets
|
|
|
|
Cash and cash
equivalents
|
$
98,821
|
|
$
88,818
|
Accounts receivable,
net
|
201,529
|
|
195,225
|
Inventories,
net
|
87,882
|
|
77,082
|
Prepaid expenses and
other current assets
|
21,466
|
|
15,343
|
Total current
assets
|
409,698
|
|
376,468
|
|
|
|
|
Property, plant and
equipment, net
|
86,727
|
|
85,734
|
Goodwill
|
84,762
|
|
80,804
|
Other intangible
assets, net
|
74,406
|
|
73,071
|
Investments in
associated companies
|
24,513
|
|
22,817
|
Non-current deferred
tax assets
|
20,742
|
|
24,382
|
Other
assets
|
29,412
|
|
28,752
|
Total
assets
|
$
730,260
|
|
$
692,028
|
|
|
|
|
LIABILITIES AND
EQUITY
|
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
Short-term borrowings
and current portion of long-term debt
|
$
736
|
|
$
707
|
Accounts and other
payables
|
91,461
|
|
82,164
|
Accrued
compensation
|
14,459
|
|
19,356
|
Accrued
restructuring
|
-
|
|
670
|
Other current
liabilities
|
27,732
|
|
24,514
|
Total current
liabilities
|
134,388
|
|
127,411
|
Long-term
debt
|
73,896
|
|
65,769
|
Non-current deferred
tax liabilities
|
12,458
|
|
12,008
|
Other non-current
liabilities
|
69,924
|
|
74,234
|
Total
liabilities
|
290,666
|
|
279,422
|
|
|
|
|
Equity
|
|
|
|
Common stock, $1 par
value; authorized 30,000,000 shares; issued and
outstanding 2017- 13,309,966 shares; 2016 - 13,277,832
shares
|
13,310
|
|
13,278
|
Capital in excess of
par value
|
113,747
|
|
112,475
|
Retained
earnings
|
374,001
|
|
364,414
|
Accumulated other
comprehensive loss
|
(72,938)
|
|
(87,407)
|
Total Quaker
shareholders' equity
|
428,120
|
|
402,760
|
Noncontrolling
interest
|
11,474
|
|
9,846
|
Total
equity
|
439,594
|
|
412,606
|
Total liabilities and
equity
|
$
730,260
|
|
$
692,028
|
Quaker Chemical
Corporation
|
Condensed
Consolidated Statements of Cash Flows
|
(Dollars in
thousands)
|
|
|
|
|
|
(Unaudited)
|
|
Six Months Ended
June 30,
|
|
2017
|
|
2016
|
Cash flows from
operating activities
|
|
|
|
Net income
|
$
19,955
|
|
$
28,749
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
Depreciation
|
6,333
|
|
6,331
|
Amortization
|
3,604
|
|
3,589
|
Equity in
undistributed earnings of associated companies, net of
dividends
|
(1,301)
|
|
(488)
|
Deferred compensation
and other, net
|
268
|
|
3,609
|
Stock-based
compensation
|
2,245
|
|
3,423
|
(Gain) loss on
disposal of property, plant and equipment and other
assets
|
(28)
|
|
45
|
Insurance settlement
realized
|
(446)
|
|
(614)
|
Combination-related
expenses, net of payments
|
3,306
|
|
-
|
Pension and other
postretirement benefits
|
(439)
|
|
(2,896)
|
Increase (decrease)
in cash from changes in current assets and current
liabilities, net of acquisitions:
|
|
|
|
Accounts
receivable
|
790
|
|
3,801
|
Inventories
|
(7,881)
|
|
(2,387)
|
Prepaid expenses and
other current assets
|
(4,686)
|
|
(3,164)
|
Accounts payable and
accrued liabilities
|
(213)
|
|
(1,642)
|
Restructuring
liabilities
|
(675)
|
|
(2,330)
|
Net cash provided by
operating activities
|
20,832
|
|
36,026
|
|
|
|
|
Cash flows from
investing activities
|
|
|
|
Investments in
property, plant and equipment
|
(5,242)
|
|
(4,377)
|
Payments related to
acquisitions, net of cash acquired
|
(5,363)
|
|
(3,284)
|
Proceeds from
disposition of assets
|
43
|
|
48
|
Insurance settlement
interest earned
|
21
|
|
16
|
Change in restricted
cash, net
|
425
|
|
598
|
Net cash used in
investing activities
|
(10,116)
|
|
(6,999)
|
|
|
|
|
Cash flows from
financing activities
|
|
|
|
Proceeds from
long-term debt
|
6,753
|
|
1,736
|
Repayments of
long-term debt
|
(373)
|
|
(286)
|
Dividends
paid
|
(9,167)
|
|
(8,480)
|
Stock options
exercised, other
|
(941)
|
|
(95)
|
Payments for
repurchase of common stock
|
-
|
|
(5,859)
|
Excess tax benefit
related to stock option exercises
|
-
|
|
136
|
Net cash used in
financing activities
|
(3,728)
|
|
(12,848)
|
|
|
|
|
Effect of exchange
rate changes on cash
|
3,015
|
|
(987)
|
Net increase in cash
and cash equivalents
|
10,003
|
|
15,192
|
Cash and cash
equivalents at the beginning of the period
|
88,818
|
|
81,053
|
Cash and cash
equivalents at the end of the period
|
$
98,821
|
|
$
96,245
|
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