CONSHOHOCKEN, Pa., July 30, 2018 /PRNewswire/ -- Quaker
Chemical Corporation (NYSE: KWR) today announced a net sales
increase of 10% to $222.0 million in
the second quarter of 2018 compared to $201.2 million in the second quarter of 2017
driven by increases in volume, selling price and product mix, and
foreign exchange. This increase in net sales, coupled with a
higher current quarter gross margin of 36.5% as compared to 35.7%
in the prior year quarter, drove a $9.1
million or 13% increase in gross profit
quarter-over-quarter. The Company's second quarter of 2018
net income was $19.2 million or
$1.44 per diluted share compared to
the prior year quarter's net income of $11.9
million or $0.89 per diluted
share. Excluding total combination-related expenses and all
other non-core items in each period, the Company's strong current
quarter operating performance, coupled with a lower effective tax
rate, drove non-GAAP earnings per diluted share to $1.56, a 26% increase compared to non-GAAP
earnings per diluted share of $1.24
in the prior year period. In addition, the Company's adjusted
EBITDA increased 15% to $32.2 million
in the second quarter of 2018 compared to $28.0 million in the prior year period.
Michael F. Barry, Chairman, Chief
Executive Officer and President, commented, "We are pleased with
our second quarter results despite a challenging raw material
environment. We saw sequential improvement in our gross
margin for the second quarter in a row primarily due to price
increases outpacing raw material cost changes. In
addition, we experienced good operating conditions in all regions
with broad revenue growth, primarily driven by solid production
increases in our steel and automotive end markets and continued
market share gains. We also continued to show good cost
control which, coupled with our revenue and margin expansion,
resulted in a 15% increase in adjusted EBITDA for the second
quarter as well as a 26% increase in non-GAAP earnings."
Mr. Barry continued, "Looking forward to the second half of the
year, we expect our solid volumes to continue, but we also expect
some headwinds that include a stronger US dollar and higher raw
material costs. Overall, we expect our gross margin to be in
the low to mid 36 percent range. Concerning the Houghton
combination, our previous guidance still applies. We expect
to present a remedy that meets the needs of the United States and Europe regulators in the third quarter of
2018, and receive approvals from both regulatory authorities and
close in the fourth quarter of 2018. Overall, I continue to
be confident in our future given our modestly growing global end
markets, our continued market share gains, U.S. Tax Reform and the
benefits we will achieve through the upcoming combination with
Houghton."
Second Quarter of 2018 Summary
Net sales of $222.0 million in the
second quarter of 2018 increased $20.8
million or 10% compared to $201.2
million in the second quarter of 2017. The Company's
second quarter of 2018 net sales benefited from
quarter-over-quarter increases in volume of 5%, selling price and
product mix of approximately 3%, and a positive impact from foreign
currency translation of 2% or $4.5
million.
Gross profit in the second quarter of 2018 increased
$9.1 million or 13% from the second
quarter of 2017, primarily due to the increase in net sales, noted
above, as well as a higher gross margin of 36.5% in the second
quarter of 2018 compared to 35.7% in the prior year quarter.
The increase in the Company's current quarter gross margin was
primarily driven by pricing initiatives and the mix of certain
products sold which more than offset raw material cost
increases.
SG&A increased $4.5 million
during the second quarter of 2018 compared to the second quarter of
2017 primarily due to the impact of foreign currency translation
and higher labor-related costs primarily from annual merit
increases and incentive based compensation due to the Company's
strong operating performance in the current quarter.
During the second quarter of 2018, the Company incurred
$4.3 million of legal, financial, and
other advisory and consultant expenses for integration planning and
regulatory approvals related to the pending combination with
Houghton. Comparatively, the Company incurred $4.3 million of combination-related expenses
during the second quarter of 2017 related to costs similar to the
current quarter and certain due diligence-related costs.
Operating income in the second quarter of 2018 was $22.6 million compared to $17.9 million in the second quarter of
2017. The increase in operating income was due to strong net
sales and gross profit increases, noted above, partially offset by
an increase in SG&A not related to the pending Houghton
combination.
Other income, net, was $0.3
million in the second quarter of 2018 compared to other
expense, net, of $1.6 million in the
second quarter of 2017. The quarter-over-quarter change was
primarily due to a second quarter of 2017 U.S. pension plan
settlement charge of $1.9
million. In addition, the Company incurred higher
foreign currency transaction losses in the current quarter as
compared to the second quarter of 2017, however this was largely
offset by a second quarter of 2018 gain on the sale of an
available-for-sale asset.
Interest expense increased $0.8
million during the second quarter of 2018 compared to the
second quarter of 2017, primarily due to costs incurred to maintain
the bank commitment for the pending Houghton combination which the
Company did not incur during the second quarter of 2017. The
Company had a relatively consistent level of interest income in
both the second quarters of 2018 and 2017.
The Company's effective tax rates for the second quarters of
2018 and 2017 were 16.8% and 26.2%, respectively. Both of
these effective tax rates include the impact of Houghton
combination-related expenses, noted above, certain of which were
considered non-deductible for the purpose of determining the
Company's effective tax rate. In addition, the Company
recorded a tax adjustment of $1.2
million in the second quarter of 2018 to decrease its
initial fourth quarter of 2017 estimate of the one-time charge on
deemed repatriation of undistributed earnings ("Transition Tax")
associated with the U.S. Tax Cuts and Jobs Act ("U.S. Tax
Reform"). Excluding the current quarter $1.2 million Transition Tax adjustment and the
impact of the combination-related expenses in each quarter, the
Company estimates that its second quarters of 2018 and 2017
effective tax rates would have been approximately 22% and 27%,
respectively. This decrease quarter-over-quarter was
primarily due to a lower U.S. statutory tax rate of 21% in the
current quarter compared to 35% in the prior period.
Equity in net income of associated companies increased
$0.8 million in the second quarter of
2018 compared to the second quarter of 2017. The increase was
primarily due to higher income from the Company's interest in a
captive insurance company in the current quarter compared to the
prior year, as well as a lower quarter-over-quarter charge to write
down the Company's equity investment in its Venezuelan affiliate
due to the on-going devaluation of the Venezuelan bolivar fuerte in
each period.
The Company's net income attributable to noncontrolling interest
decreased $0.3 million in the second
quarter of 2018 compared to the second quarter of 2017, primarily
due to the Company's purchase of the remaining interest in its
India joint venture during
December 2017.
Foreign exchange negatively impacted the Company's second
quarter of 2018 earnings by less than 1% or $0.01 per diluted share, including the positive
impact from foreign currency translation net of higher foreign
currency transaction losses quarter-over-quarter.
Year-to-Date 2018 Summary
Net sales grew approximately $37.9
million or 10% in the first six months of 2018, increasing
to $434.0 million compared to
$396.1 million in the first six
months of 2017. The Company's first six months of 2018 net
sales benefited from increases in volume of 3%, selling price and
product mix of 3%, and a positive impact from foreign currency
translation of 4% or $15.5
million.
Gross profit in the first six months of 2018 increased
$13.7 million or 10% from the first
six months of 2017, primarily due to the increase in net sales,
noted above. The Company's gross margin was consistent at
36.0% in both the first six months of 2018 and 2017.
SG&A increased $6.4 million in
the first six months of 2018 compared to the prior year period due
to similar factors noted in the second quarter of 2018 summary,
above, including the impact of foreign currency translation and
higher labor-related costs.
During the first six months of 2018, the Company incurred
$9.5 million of legal, financial, and
other advisory and consultant expenses for integration planning and
regulatory approvals related to the pending combination with
Houghton. Comparatively, the Company incurred $13.4 million of combination-related expenses
during the first six months of 2017 related to costs similar to the
current year and certain due diligence-related costs.
Operating income in the first six months of 2018 was
$42.8 million compared to
$31.7 million in the first six months
of 2017. The increase in operating income was due to strong
net sales and gross profit increases as well as lower Houghton
combination-related expenses, noted above, partially offset by an
increase in SG&A not related to the pending Houghton
combination.
Other expense, net, was $0.1
million in the first six months of 2018 compared to
$1.7 million in the first six months
of 2017. The decrease in other expense, net, year-over-year
was primarily due to the prior year U.S. pension plan settlement
charge and a current year gain on the sale of an available-for-sale
asset, partially offset by higher foreign currency transaction
losses in the current year.
Interest expense increased $1.9
million during the first six months of 2018 compared to the
first six months of 2017, primarily due to current year costs
incurred to maintain the bank commitment for the pending Houghton
combination which the Company did not incur during the prior year
period. Interest income was consistent in both the first six
months of 2018 and 2017.
The Company's effective tax rates for the first six months of
2018 and 2017 were 22.8% and 37.4%, respectively. Similar to
the second quarter of 2018 summary above, the Company's first six
months of 2018 and 2017 effective tax rates were impacted by the
non-deductibility of certain Houghton combination-related expenses
and a current year tax adjustment to decrease the Company's initial
estimate of the Transition Tax associated with U.S. Tax
Reform. Excluding the current year $1.2 million Transition Tax adjustment and the
impact of combination-related expenses in each period, the Company
estimates that its first six months of 2018 and 2017 effective tax
rates would have been approximately 24% and 27%,
respectively. The decrease in the Company's effective tax
rate year-over-year was primarily due to a lower U.S. statutory tax
rate of 21% in the current year compared to 35% in the prior
year.
Equity in net income of associated companies decreased
$0.5 million in the first six months
of 2018 compared to the first six months of 2017, primarily due to
lower earnings from the Company's interest in a captive insurance
company in the current year.
The Company's net income attributable to noncontrolling interest
decreased $0.9 million in the first
six months of 2018 compared to the first six months of 2017,
primarily due to the Company's purchase of the remaining interest
in its India joint venture during
December 2017.
Foreign exchange positively impacted the Company's first six
months of 2018 earnings by approximately 2% or $0.06 per diluted share, including the positive
impact from foreign currency translation net of higher foreign
currency transaction losses year-over-year.
Balance Sheet and Cash Flow Items
The Company's net operating cash flow of $17.0 million in the second quarter of 2018
increased its year-to-date net operating cash flow to $19.7 million as compared to $20.8 million in the first six months of
2017. The decrease in net operating cash flow was primarily
due to higher cash invested in the Company's working capital as a
result of the Company's increase in net sales and related accounts
receivable, partially offset by the Company's strong current year
operating performance and a second quarter of 2018 cash dividend
received from the Company's captive insurance company. In
addition, the Company paid a $4.7
million dividend to its shareholders during the second
quarter of 2018, increasing its total cash dividends paid to
approximately $9.5 million in the
first six months of 2018, which represents a 3% increase
year-over-year. Overall, the Company's liquidity and balance
sheet remain strong, as its cash position exceeded its debt at
June 30, 2018 by $26.1 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 was approximately $690 million at signing. 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 closing, and has since replaced
these commitments with a syndicated bank agreement with customary
terms and conditions. Funding of the syndicated bank
agreement is contingent upon closing of the Combination and until
then the Company has and will only incur certain interest costs to
maintain the banks' capital commitment. The Company
anticipates extending the bank commitment through December 15, 2018 during the third quarter of
2018. In addition, the issuance of the Company's shares at
closing of the Combination was subject to approval by Quaker's
shareholders under the rules of the New York Stock Exchange, and
approval was received at a meeting of the Company's shareholders
during the third quarter of 2017. Also, the Combination is
subject to regulatory approvals in the
United States, Europe,
China and Australia. The
Company received regulatory approval from China and Australia in 2017. The Company continues
to be in productive discussions with the European Commission and
Federal Trade Commission regarding the Combination, and based on
these discussions the Company continues to expect the remedy will
involve a divestment of some product lines which, in total, are
approximately 3% or less of the revenues of the combined company,
which is consistent with the Company's original projections.
The Company is in discussions with potential buyers for the product
lines to be divested and intends to present a remedy that meets the
needs of both regulatory authorities in the third quarter of
2018. Based on the information available to date, the Company
expects to receive approval from the regulatory authorities and
close the Combination in the fourth 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,
|
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
GAAP earnings per
diluted share attributable to Quaker
Chemical Corporation common shareholders
|
$
1.44
|
|
$
0.89
|
|
$
2.40
|
|
$
1.42
|
|
Equity income in a
captive insurance company per
diluted share
|
(0.08)
|
|
(0.04)
|
|
(0.05)
|
|
(0.08)
|
|
Houghton
combination-related expenses per diluted
share (a)
|
0.29
|
|
0.27
|
|
0.66
|
|
0.95
|
|
Transition Tax
adjustment per diluted share (b)
|
(0.09)
|
|
—
|
|
(0.09)
|
|
—
|
|
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
|
0.00
|
|
0.03
|
|
0.02
|
|
0.03
|
|
Non-GAAP earnings per
diluted share
|
$
1.56
|
|
$
1.24
|
|
$
2.94
|
|
$
2.42
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
June
30,
|
|
Six Months
Ended
June
30,
|
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
Net income
attributable to Quaker Chemical
Corporation
|
$ 19,246
|
|
$ 11,906
|
|
$ 31,978
|
|
$ 18,898
|
|
Depreciation and
amortization
|
4,981
|
|
5,007
|
|
10,028
|
|
9,937
|
|
Interest expense
(a)
|
1,602
|
|
780
|
|
3,294
|
|
1,436
|
|
Taxes on income
before equity in net income of
associated companies (b)
|
3,668
|
|
4,224
|
|
9,224
|
|
11,089
|
|
Equity income in a
captive insurance company
|
(1,015)
|
|
(435)
|
|
(643)
|
|
(1,027)
|
|
Houghton
combination-related expenses (a)
|
3,681
|
|
4,338
|
|
8,890
|
|
13,413
|
|
U.S. pension plan
settlement charge
|
—
|
|
1,860
|
|
—
|
|
1,860
|
|
Cost streamlining
initiative
|
—
|
|
—
|
|
—
|
|
286
|
|
Currency conversion
impacts of the Venezuelan
bolivar fuerte
|
26
|
|
340
|
|
244
|
|
340
|
|
Adjusted
EBITDA
|
$ 32,189
|
|
$ 28,020
|
|
$ 63,015
|
|
$ 56,232
|
|
Adjusted EBITDA
margin (%)
|
14.5%
|
|
13.9%
|
|
14.5%
|
|
14.2%
|
|
|
|
|
|
|
|
|
|
|
(a)
|
During the three and
six months ended June 30, 2018, the Company incurred $0.9 million
and $1.7 million of interest costs, respectively, to maintain the
bank commitment related to the pending Combination. These
interest costs are included within the caption Houghton
combination-related expenses in the reconciliation of GAAP earnings
per diluted share attributable to Quaker Chemical Corporation
common shareholders to Non-GAAP earnings per diluted share.
These interest costs are included within the caption Interest
expense in the reconciliation of Net income attributable to Quaker
Chemical Corporation to Adjusted EBITDA. In addition,
Houghton combination-related expenses during the three and six
months ended June 30, 2018 includes a $0.6 million gain on the sale
of an available-for-sale asset.
|
|
|
(b)
|
Transition Tax
adjustment of $1.2 million is included within Taxes on income
before equity in net income of associated companies in the
reconciliation of Net income attributable to Quaker Chemical
Corporation to Adjusted EBITDA.
|
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 could also adversely affect us,
including factors related to the previously announced
pending Houghton combination and the risk that the transaction
may not receive regulatory approval or that regulatory approval may
include conditions or other terms not acceptable to 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, 2017, the proxy
statement the Company filed on July 31,
2017 and in our quarterly and other reports filed from time
to time with the Securities and Exchange 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.
Conference Call
As previously announced, Quaker Chemical's investor conference
call to discuss the second quarter of 2018 results is scheduled for
July 31, 2018 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 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,
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
|
|
|
|
|
|
|
Net
sales
|
$
221,962
|
|
$
201,183
|
|
$
434,017
|
|
$
396,092
|
|
|
|
|
|
|
|
|
Cost of goods
sold
|
141,025
|
|
129,348
|
|
277,633
|
|
253,370
|
|
|
|
|
|
|
|
|
Gross
profit
|
80,937
|
|
71,835
|
|
156,384
|
|
142,722
|
%
|
36.5%
|
|
35.7%
|
|
36.0%
|
|
36.0%
|
|
|
|
|
|
|
|
|
Selling, general and
administrative expenses
|
54,083
|
|
49,594
|
|
104,090
|
|
97,648
|
Combination-related
expenses
|
4,291
|
|
4,338
|
|
9,500
|
|
13,413
|
|
|
|
|
|
|
|
|
Operating
income
|
22,563
|
|
17,903
|
|
42,794
|
|
31,661
|
%
|
10.2%
|
|
8.9%
|
|
9.9%
|
|
8.0%
|
|
|
|
|
|
|
|
|
Other income
(expense), net
|
261
|
|
(1,571)
|
|
(108)
|
|
(1,676)
|
Interest
expense
|
(1,602)
|
|
(780)
|
|
(3,294)
|
|
(1,436)
|
Interest
income
|
571
|
|
540
|
|
1,060
|
|
1,063
|
Income before taxes
and equity in net income of associated companies
|
21,793
|
|
16,092
|
|
40,452
|
|
29,612
|
|
|
|
|
|
|
|
|
Taxes on income
before equity in net income of associated companies
|
3,668
|
|
4,224
|
|
9,224
|
|
11,089
|
Income before equity
in net income of associated companies
|
18,125
|
|
11,868
|
|
31,228
|
|
18,523
|
|
|
|
|
|
|
|
|
Equity in net income
of associated companies
|
1,245
|
|
473
|
|
929
|
|
1,432
|
|
|
|
|
|
|
|
|
Net income
|
19,370
|
|
12,341
|
|
32,157
|
|
19,955
|
|
|
|
|
|
|
|
|
Less: Net income
attributable to noncontrolling interest
|
124
|
|
435
|
|
179
|
|
1,057
|
|
|
|
|
|
|
|
|
Net income
attributable to Quaker Chemical Corporation
|
$
19,246
|
|
$
11,906
|
|
$
31,978
|
|
$
18,898
|
%
|
8.7%
|
|
5.9%
|
|
7.4%
|
|
4.8%
|
|
|
|
|
|
|
|
|
Share and per
share data:
|
|
|
|
|
|
|
|
Basic weighted
average common shares outstanding
|
13,267,504
|
|
13,195,053
|
|
13,256,327
|
|
13,185,627
|
Diluted weighted
average common shares outstanding
|
13,297,388
|
|
13,240,279
|
|
13,287,946
|
|
13,230,937
|
|
|
|
|
|
|
|
|
Net income
attributable to Quaker Chemical Corporation Common
Shareholders - basic
|
$
1.44
|
|
$
0.90
|
|
$
2.40
|
|
$
1.42
|
Net income
attributable to Quaker Chemical Corporation Common
Shareholders - diluted
|
$
1.44
|
|
$
0.89
|
|
$
2.40
|
|
$
1.42
|
Quaker Chemical
Corporation
|
Condensed
Consolidated Balance Sheets
|
(Dollars in
thousands, except par value and share amounts)
|
|
|
|
|
|
(Unaudited)
|
|
June
30,
|
|
December
31,
|
|
2018
|
|
2017
|
ASSETS
|
|
|
|
|
|
|
|
Current
assets
|
|
|
|
Cash and cash
equivalents
|
$
90,220
|
|
$
89,879
|
Accounts receivable,
net
|
213,548
|
|
208,358
|
Inventories,
net
|
95,930
|
|
87,221
|
Prepaid expenses and
other current assets
|
22,225
|
|
21,128
|
Total current
assets
|
421,923
|
|
406,586
|
|
|
|
|
Property, plant and
equipment, net
|
83,367
|
|
86,704
|
Goodwill
|
84,230
|
|
86,034
|
Other intangible
assets, net
|
67,650
|
|
71,603
|
Investments in
associated companies
|
21,778
|
|
25,690
|
Non-current deferred
tax assets
|
12,602
|
|
15,661
|
Other
assets
|
32,075
|
|
30,049
|
Total
assets
|
$
723,625
|
|
$
722,327
|
|
|
|
|
LIABILITIES AND
EQUITY
|
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
Short-term borrowings
and current portion of long-term debt
|
$
5,689
|
|
$
5,736
|
Accounts and other
payables
|
96,815
|
|
97,732
|
Accrued
compensation
|
17,648
|
|
22,846
|
Other current
liabilities
|
31,556
|
|
29,384
|
Total current
liabilities
|
151,708
|
|
155,698
|
|
|
|
|
Long-term
debt
|
58,397
|
|
61,068
|
Non-current deferred
tax liabilities
|
8,302
|
|
9,653
|
Other non-current
liabilities
|
82,541
|
|
87,044
|
Total
liabilities
|
300,948
|
|
313,463
|
|
|
|
|
Equity
|
|
|
|
Common stock, $1 par
value; authorized 30,000,000 shares; issued and outstanding 2018 -
13,330,845 shares; 2017 - 13,307,976 shares
|
13,331
|
|
13,308
|
Capital in excess of
par value
|
94,984
|
|
93,528
|
Retained
earnings
|
387,498
|
|
365,182
|
Accumulated other
comprehensive loss
|
(74,351)
|
|
(65,100)
|
Total Quaker
shareholders' equity
|
421,462
|
|
406,918
|
Noncontrolling
interest
|
1,215
|
|
1,946
|
Total
equity
|
422,677
|
|
408,864
|
Total liabilities and
equity
|
$
723,625
|
|
$
722,327
|
Quaker Chemical
Corporation
|
Condensed
Consolidated Statements of Cash Flows
|
(Dollars in
thousands)
|
|
|
|
|
|
(Unaudited)
|
|
Six Months Ended
June 30,
|
|
2018
|
|
2017
|
Cash flows from
operating activities
|
|
|
|
Net income
|
$
32,157
|
|
$
19,955
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
Depreciation
|
6,330
|
|
6,333
|
Amortization
|
3,698
|
|
3,604
|
Equity in
undistributed earnings of associated companies, net of
dividends
|
3,352
|
|
(1,301)
|
Deferred compensation
and other, net
|
177
|
|
268
|
Share-based
compensation
|
1,975
|
|
2,245
|
Gain on disposal of
property, plant and equipment and other assets
|
(599)
|
|
(28)
|
Insurance settlement
realized
|
(481)
|
|
(446)
|
Combination-related
expenses, net of payments
|
(1,445)
|
|
3,306
|
Pension and other
postretirement benefits
|
(2,341)
|
|
(439)
|
(Decrease) increase
in cash from changes in current assets and current
liabilities, net of acquisitions:
|
|
|
|
Accounts
receivable
|
(10,873)
|
|
790
|
Inventories
|
(11,301)
|
|
(7,881)
|
Prepaid expenses and
other current assets
|
(2,323)
|
|
(4,686)
|
Accounts payable and
accrued liabilities
|
1,407
|
|
(213)
|
Restructuring
liabilities
|
-
|
|
(675)
|
Net cash provided by
operating activities
|
19,733
|
|
20,832
|
|
|
|
|
Cash flows from
investing activities
|
|
|
|
Investments in
property, plant and equipment
|
(5,622)
|
|
(5,242)
|
Payments related to
acquisitions, net of cash acquired
|
(500)
|
|
(5,363)
|
Proceeds from
disposition of assets
|
668
|
|
43
|
Insurance settlement
interest earned
|
47
|
|
21
|
Net cash used in
investing activities
|
(5,407)
|
|
(10,541)
|
|
|
|
|
Cash flows from
financing activities
|
|
|
|
Proceeds from
long-term debt
|
-
|
|
6,753
|
Repayments of
long-term debt
|
(287)
|
|
(373)
|
Dividends
paid
|
(9,453)
|
|
(9,167)
|
Stock options
exercised, other
|
(496)
|
|
(941)
|
Distributions to
noncontrolling affiliate shareholders
|
(834)
|
|
-
|
Net cash used in
financing activities
|
(11,070)
|
|
(3,728)
|
|
|
|
|
Effect of foreign
exchange rate changes on cash
|
(3,346)
|
|
3,015
|
|
|
|
|
Net (decrease)
increase in cash, cash equivalents and restricted cash
|
(90)
|
|
9,578
|
Cash, cash
equivalents and restricted cash at the beginning of the
period
|
111,050
|
|
110,701
|
Cash, cash
equivalents and restricted cash at the end of the
period
|
$
110,960
|
|
$
120,279
|
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