CONSHOHOCKEN, Pa., Nov. 1, 2018 /PRNewswire/ -- Quaker Chemical
Corporation (NYSE: KWR) today announced a net sales increase of 4%
to $222.0 million in the third
quarter of 2018 compared to $212.9
million in the third quarter of 2017 driven by an increase
in volume of 4% and selling price and product mix of 3% which
offset a 3% negative impact from foreign exchange. This
increase in net sales, coupled with a higher current quarter gross
margin of 36.5% as compared to 35.1% in the prior year period,
drove a $6.3 million or 8% increase
in gross profit quarter-over-quarter. The Company's third
quarter of 2018 net income was $19.7
million or $1.47 per diluted
share compared to the prior year quarter's net income of
$11.1 million or $0.83 per diluted share. Excluding total
combination-related expenses and all other non-core items in each
period, the Company's solid current quarter operating performance,
coupled with a lower effective tax rate, drove non-GAAP earnings
per diluted share to $1.60, a 21%
increase compared to non-GAAP earnings per diluted share of
$1.32 in the prior year period.
In addition, the Company's adjusted EBITDA increased 12% to
$33.0 million in the third quarter of
2018 compared to $29.4 million in the
prior year period. These results were achieved despite a
negative impact from foreign exchange on earnings of approximately
6% or $0.09 per diluted share in the
current quarter. The Company's operating performance also
drove strong net operating cash flow of $31.2 million in the third quarter of 2018,
increasing its year-to-date net operating cash flow to $50.9 million, a 25% increase compared to the
first nine months of 2017.
Michael F. Barry, Chairman, Chief
Executive Officer and President, commented, "We are pleased with
our third quarter results despite several market challenges,
including foreign exchange headwinds. Our volume growth was
solid, increasing 4% compared to the prior year, and we continued
to exceed our base markets' growth which we estimated at 1%
year-over-year. Our gross margins were up significantly
compared to the prior year and flat sequentially, as our price
increases continued to outpace increasing raw material costs.
We also continued to show good cost control which, coupled with our
revenue and margin expansion, resulted in a 12% increase in
adjusted EBITDA for the third quarter as well as a 21% increase in
non-GAAP earnings per diluted share compared to the prior
year. These strong increases were achieved despite a 6%
negative impact from foreign exchange on earnings."
Mr. Barry continued, "Looking forward to the fourth quarter of
the year, we do expect some potential headwinds such as a strong
U.S. dollar and higher raw material costs. However, we also
anticipate modest growth in our overall base markets similar to the
third quarter and expect our volume growth will exceed this due to
continued market share gains, which will help offset some of the
fourth quarter headwinds we foresee. In addition, we are
implementing additional price increases where necessary and expect
our gross margins to be in the low to mid 36 percent range.
Overall, we expect to continue our year-over-year non-GAAP earnings
per diluted share and adjusted EBITDA growth in the fourth
quarter. Concerning the Houghton combination, we are making
progress with both the U.S. and European regulatory authorities and
expect to receive approval and close sometime in December or
January. 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."
Third Quarter of 2018 Summary
Net sales grew $9.1 million or 4%
in the third quarter of 2018, increasing to $222.0 million compared to $212.9 million in third quarter of 2017.
The Company's third quarter of 2018 net sales benefited from
quarter-over-quarter increases in volume of 4% as well as selling
price and product mix of 3%, partially offset by a negative impact
from foreign currency translation of approximately 3% or
$5.2 million.
Gross profit in the third quarter of 2018 increased $6.3 million or 8% from the third 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 third quarter of 2018
compared to 35.1% 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 $2.2 million
during the third quarter of 2018 compared to the third quarter of
2017 driven by the impact of 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,
partially offset by the positive impact of foreign currency
translation.
During the third quarter of 2018, the Company incurred
$2.9 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 $9.7 million of combination-related expenses
during the third quarter of 2017 related to costs similar to the
current quarter.
Operating income in the third quarter of 2018 was $24.9 million compared to $14.0 million in the third quarter 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 $0.5
million in the third quarter of 2018 compared to other
income, net, of $0.2 million in the
third quarter of 2017. The increase in other expense was
primarily the result of foreign currency transaction losses in the
current quarter as compared to foreign currency transaction gains
in the third quarter of 2017.
Interest expense increased $0.7
million during the third quarter of 2018 compared to the
third quarter of 2017, primarily due to higher current quarter
costs incurred to maintain the bank commitment for the pending
Houghton combination. Interest income decreased $0.2 million in the third quarter of 2018
compared to the third quarter of 2017 primarily due to changes in
the level of the Company's invested cash in certain regions with
higher returns.
The Company's effective tax rates for the third quarters of 2018
and 2017 were 18.5% and 22.1%, 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 $1.1
million in the third quarter of 2018 to decrease its initial
fourth quarter of 2017 estimates associated with the U.S. Tax Cuts
and Jobs Act ("U.S. Tax Reform"), which included the one-time
charge on deemed repatriation of undistributed earnings
("Transition Tax"). Excluding this current quarter tax
adjustment and the impact of the combination-related expenses in
each quarter, the Company estimates that its third quarters of 2018
and 2017 effective tax rates would have been approximately 22% and
25%, 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 year period.
Equity in net income of associated companies increased slightly
in the third quarter of 2018 compared to the third quarter of 2017,
primarily due to higher income from the Company's interest in a
captive insurance company.
The Company's net income attributable to noncontrolling interest
decreased $0.5 million in the third
quarter of 2018 compared to the third 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 third quarter
of 2018 earnings by approximately 6% or $0.09 per diluted share, including the negative
impact from both foreign currency translation and foreign currency
transactions quarter-over-quarter, noted above.
Year-to-Date 2018 Summary
Net sales grew $47.0 million or 8%
in the first nine months of 2018, increasing to $656.0 million compared to $609.0 million in the first nine months of
2017. The Company's first nine 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 2% or $10.2 million.
Gross profit in the first nine months of 2018 increased
$20.0 million or 9% from the first
nine months of 2017, primarily due to the increase in net sales,
noted above, as well as a higher gross margin of 36.2% in the first
nine months of 2018 compared to 35.7% in the prior year
period. The increase in the Company's current year 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 $8.6 million in
the first nine months of 2018 compared to the prior year period due
to similar factors noted in the third quarter of 2018 summary,
above, including the impact of higher labor-related costs and a
negative impact from foreign currency translation.
During the first nine months of 2018, the Company incurred
$12.4 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 $23.1 million of combination-related expenses
during the first nine months of 2017 related to costs similar to
the current year as well as certain due diligence-related
costs.
Operating income in the first nine months of 2018 was
$67.7 million compared to
$45.7 million in the first nine
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 $0.6
million in the first nine months of 2018 compared to
$1.4 million in the first nine months
of 2017. The decrease in other expense, net, year-over-year
was primarily due to a prior year settlement charge in one of the
Company's U.S. pension plans and a current year gain on the sale of
a held-for-sale asset, partially offset by foreign currency
transaction losses in the current year compared to foreign currency
transaction gains in the first nine months of 2017.
Interest expense increased $2.6
million during the first nine months of 2018 compared to the
first nine months of 2017, primarily due to higher current year
costs incurred to maintain the bank commitment for the pending
Houghton combination. Interest income was slightly lower in
the first nine months of 2018 compared to the first nine months of
2017 primarily due to changes in the level of the Company's
invested cash in certain regions with higher
returns.
The Company's effective tax rates for the first nine months of
2018 and 2017 were 21.2% and 32.5%, respectively. Similar to
the third quarter of 2018 summary above, the Company's first nine
months of 2018 and 2017 effective tax rates were impacted by the
non-deductibility of certain Houghton combination-related
expenses. In addition, the current year effective tax rate
was impacted by $2.3 million of tax
adjustments in 2018 to decrease the Company's initial estimates
associated with U.S. Tax Reform, including the Transition
Tax. Excluding these cumulative current year tax adjustments
and the impact of combination-related expenses in each period, the
Company estimates that its first nine months of 2018 and 2017
effective tax rates would have been approximately 23% 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
$0.4 million in the first nine months
of 2018 compared to the first nine months of 2017, primarily due to
lower earnings from the Company's interest in a captive insurance
company.
The Company's net income attributable to noncontrolling interest
decreased $1.4 million in the first
nine months of 2018 compared to the first nine months 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 first nine
months of 2018 earnings by less than 1% or $0.02 per diluted share, driven by the negative
impact from foreign currency transactions year-over-year, noted
above, net of a positive impact from foreign currency
translation.
Balance Sheet and Cash Flow Items
The Company's net operating cash flow of $31.2 million in the third quarter of 2018 drove
a 25% increase in its year-to-date net operating cash flow to
$50.9 million as compared to
$40.8 million in the first nine
months of 2017. The $10.1
million increase in year-to-date net operating cash flow was
primarily due to the Company's strong current year operating
performance. In addition, the Company paid a $4.9 million dividend to its shareholders during
the third quarter of 2018, increasing its total cash dividends paid
to approximately $14.4 million in the
first nine months of 2018, which represents a 4% increase
year-over-year. Overall, the Company's liquidity and balance
sheet remain strong, as its cash position exceeded its debt at
September 30, 2018 by $47.3 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. During the third
quarter of 2018, the Company extended the bank commitment through
December 15, 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 expect a regulatory remedy will involve the divestment of some
product lines which, in total, are approximately 3% of the revenues
of the combined company, and is consistent with the Company's
original projections. The Company has presented a remedy to
both the European Commission and the United States Federal Trade
Commission and expects to receive approval from both regulatory
authorities and close the Combination in December 2018 or January 2019.
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
September
30,
|
|
Nine Months
Ended September
30,
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
GAAP earnings per
diluted share attributable to Quaker Chemical Corporation common
shareholders
|
$
1.47
|
|
$
0.83
|
|
$
3.87
|
|
$
2.25
|
Equity income in a
captive insurance company per diluted share
|
(0.03)
|
|
(0.03)
|
|
(0.08)
|
|
(0.11)
|
Houghton
combination-related expenses per diluted share (a)
|
0.23
|
|
0.52
|
|
0.89
|
|
1.47
|
Transition Tax
adjustments per diluted share (b)
|
(0.08)
|
|
—
|
|
(0.17)
|
|
—
|
U.S. pension plan
settlement charge per diluted share
|
—
|
|
—
|
|
—
|
|
0.09
|
Cost streamlining
initiative per diluted share
|
—
|
|
—
|
|
—
|
|
0.01
|
Gain on liquidation
of an inactive legal entity per diluted share
|
(0.03)
|
|
—
|
|
(0.03)
|
|
—
|
Currency conversion
impacts of hyper-inflationary economies per diluted
share
|
0.04
|
|
0.00
|
|
0.06
|
|
0.03
|
Non-GAAP earnings per
diluted share
|
$
1.60
|
|
$
1.32
|
|
$
4.54
|
|
$
3.74
|
|
|
Three Months
Ended
September
30,
|
|
Nine Months
Ended
September
30,
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
Net income
attributable to Quaker Chemical Corporation
|
$ 19,690
|
|
$ 11,142
|
|
$ 51,668
|
|
$ 30,040
|
Depreciation and
amortization
|
4,883
|
|
5,017
|
|
14,911
|
|
14,954
|
Interest expense
(a)
|
1,510
|
|
793
|
|
4,804
|
|
2,229
|
Taxes on income
before equity in net income of associated companies (b)
|
4,330
|
|
3,140
|
|
13,554
|
|
14,229
|
Equity income in a
captive insurance company
|
(440)
|
|
(400)
|
|
(1,083)
|
|
(1,427)
|
Houghton
combination-related expenses (a)
|
2,904
|
|
9,675
|
|
11,794
|
|
23,088
|
U.S. pension plan
settlement charge
|
—
|
|
—
|
|
—
|
|
1,860
|
Cost streamlining
initiative
|
—
|
|
—
|
|
—
|
|
286
|
Gain on liquidation
of an inactive legal entity
|
(446)
|
|
—
|
|
(446)
|
|
—
|
Currency conversion
impacts of hyper-inflationary economies
|
520
|
|
35
|
|
764
|
|
375
|
Adjusted
EBITDA
|
$ 32,951
|
|
$ 29,402
|
|
$ 95,966
|
|
$ 85,634
|
Adjusted EBITDA
margin (%)
|
14.8%
|
|
13.8%
|
|
14.6%
|
|
14.1%
|
|
|
(a)
|
During the three and
nine months ended September 30, 2018, the Company incurred $0.9
million and $2.6 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 nine
months ended September 30, 2018 includes a $0.6 million
gain on the sale of a held-for-sale asset, recorded in Other
(expense) income, net, in the Company's Condensed Consolidated
Statements of Income.
|
|
|
(b)
|
Transition Tax
adjustments of $1.1 million and $2.3 million during the three and
nine months ended September 30, 2018 are
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 third quarter of 2018 results is scheduled for
November 2, 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
|
|
Nine Months
Ended
|
|
September
30,
|
|
September
30,
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
|
|
|
|
|
|
|
Net
sales
|
$
222,022
|
|
$
212,918
|
|
$
656,039
|
|
$
609,010
|
|
|
|
|
|
|
|
|
Cost of goods
sold
|
140,929
|
|
138,142
|
|
418,562
|
|
391,512
|
|
|
|
|
|
|
|
|
Gross
profit
|
81,093
|
|
74,776
|
|
237,477
|
|
217,498
|
%
|
36.5%
|
|
35.1%
|
|
36.2%
|
|
35.7%
|
|
|
|
|
|
|
|
|
Selling, general and
administrative expenses
|
53,270
|
|
51,092
|
|
157,360
|
|
148,740
|
Combination-related
expenses
|
2,904
|
|
9,675
|
|
12,404
|
|
23,088
|
|
|
|
|
|
|
|
|
Operating
income
|
24,919
|
|
14,009
|
|
67,713
|
|
45,670
|
%
|
11.2%
|
|
6.6%
|
|
10.3%
|
|
7.5%
|
|
|
|
|
|
|
|
|
Other (expense)
income, net
|
(523)
|
|
249
|
|
(631)
|
|
(1,427)
|
Interest
expense
|
(1,510)
|
|
(793)
|
|
(4,804)
|
|
(2,229)
|
Interest
income
|
521
|
|
762
|
|
1,581
|
|
1,825
|
Income before taxes
and equity in net income of associated companies
|
23,407
|
|
14,227
|
|
63,859
|
|
43,839
|
|
|
|
|
|
|
|
|
Taxes on income
before equity in net income of associated companies
|
4,330
|
|
3,140
|
|
13,554
|
|
14,229
|
Income before equity
in net income of associated companies
|
19,077
|
|
11,087
|
|
50,305
|
|
29,610
|
|
|
|
|
|
|
|
|
Equity in net income
of associated companies
|
694
|
|
617
|
|
1,623
|
|
2,049
|
|
|
|
|
|
|
|
|
Net income
|
19,771
|
|
11,704
|
|
51,928
|
|
31,659
|
|
|
|
|
|
|
|
|
Less: Net income
attributable to noncontrolling interest
|
81
|
|
562
|
|
260
|
|
1,619
|
|
|
|
|
|
|
|
|
Net income
attributable to Quaker Chemical Corporation
|
$
19,690
|
|
$
11,142
|
|
$
51,668
|
|
$
30,040
|
%
|
8.9%
|
|
5.2%
|
|
7.9%
|
|
4.9%
|
|
|
|
|
|
|
|
|
Share and per
share data:
|
|
|
|
|
|
|
|
Basic weighted
average common shares outstanding
|
13,278,259
|
|
13,217,165
|
|
13,263,417
|
|
13,196,255
|
Diluted weighted
average common shares outstanding
|
13,315,541
|
|
13,251,693
|
|
13,297,345
|
|
13,238,073
|
|
|
|
|
|
|
|
|
Net income
attributable to Quaker Chemical Corporation Common
Shareholders - basic
|
$
1.48
|
|
$
0.84
|
|
$
3.88
|
|
$
2.26
|
Net income
attributable to Quaker Chemical Corporation Common
Shareholders - diluted
|
$
1.47
|
|
$
0.83
|
|
$
3.87
|
|
$
2.25
|
Quaker Chemical
Corporation
|
Condensed
Consolidated Balance Sheets
|
(Dollars in
thousands, except par value and share amounts)
|
|
|
|
|
|
(Unaudited)
|
|
September
30,
|
|
December
31,
|
|
2018
|
|
2017
|
ASSETS
|
|
|
|
|
|
|
|
Current
assets
|
|
|
|
Cash and cash
equivalents
|
$
99,810
|
|
$
89,879
|
Accounts receivable,
net
|
214,056
|
|
208,358
|
Inventories,
net
|
96,605
|
|
87,221
|
Prepaid expenses and
other current assets
|
17,446
|
|
21,128
|
Total current
assets
|
427,917
|
|
406,586
|
|
|
|
|
Property, plant and
equipment, net
|
82,157
|
|
86,704
|
Goodwill
|
83,695
|
|
86,034
|
Other intangible
assets, net
|
65,912
|
|
71,603
|
Investments in
associated companies
|
22,471
|
|
25,690
|
Non-current deferred
tax assets
|
15,072
|
|
15,661
|
Other
assets
|
32,065
|
|
30,049
|
Total
assets
|
$
729,289
|
|
$
722,327
|
|
|
|
|
LIABILITIES AND
EQUITY
|
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
Short-term borrowings
and current portion of long-term debt
|
$
5,673
|
|
$
5,736
|
Accounts and other
payables
|
96,053
|
|
97,732
|
Accrued
compensation
|
24,099
|
|
22,846
|
Other current
liabilities
|
31,485
|
|
29,384
|
Total current
liabilities
|
157,310
|
|
155,698
|
|
|
|
|
Long-term
debt
|
46,875
|
|
61,068
|
Non-current deferred
tax liabilities
|
9,543
|
|
9,653
|
Other non-current
liabilities
|
82,925
|
|
87,044
|
Total
liabilities
|
296,653
|
|
313,463
|
|
|
|
|
Equity
|
|
|
|
Common stock, $1 par
value; authorized 30,000,000 shares; issued and outstanding 2018 -
13,334,364 shares; 2017 - 13,307,976 shares
|
13,334
|
|
13,308
|
Capital in excess of
par value
|
96,121
|
|
93,528
|
Retained
earnings
|
402,255
|
|
365,182
|
Accumulated other
comprehensive loss
|
(80,332)
|
|
(65,100)
|
Total Quaker
shareholders' equity
|
431,378
|
|
406,918
|
Noncontrolling
interest
|
1,258
|
|
1,946
|
Total
equity
|
432,636
|
|
408,864
|
Total liabilities and
equity
|
$
729,289
|
|
$
722,327
|
Quaker Chemical
Corporation
|
Condensed
Consolidated Statements of Cash Flows
|
(Dollars in
thousands)
|
|
|
|
|
|
(Unaudited)
|
|
Nine Months
Ended
|
|
September
30,
|
|
2018
|
|
2017
|
Cash flows from
operating activities
|
|
|
|
Net income
|
$
51,928
|
|
$
31,659
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
Depreciation
|
9,386
|
|
9,464
|
Amortization
|
5,525
|
|
5,490
|
Equity in
undistributed earnings of associated companies, net of
dividends
|
2,658
|
|
(1,919)
|
Deferred compensation
and other, net
|
(898)
|
|
(1,190)
|
Share-based
compensation
|
2,847
|
|
3,269
|
Gain on disposal of
property, plant and equipment and other assets
|
(680)
|
|
(50)
|
Insurance settlement
realized
|
(680)
|
|
(542)
|
Combination-related
expenses, net of payments
|
(349)
|
|
10,367
|
Pension and other
postretirement benefits
|
(1,113)
|
|
608
|
(Decrease) increase
in cash from changes in current assets and current liabilities, net
of acquisitions:
|
|
|
|
Accounts
receivable
|
(14,029)
|
|
(12,946)
|
Inventories
|
(12,719)
|
|
(9,272)
|
Prepaid expenses and
other current assets
|
2,196
|
|
(5,217)
|
Accounts payable and
accrued liabilities
|
6,824
|
|
11,755
|
Restructuring
liabilities
|
-
|
|
(675)
|
Net cash provided by
operating activities
|
50,896
|
|
40,801
|
|
|
|
|
Cash flows from
investing activities
|
|
|
|
Investments in
property, plant and equipment
|
(8,815)
|
|
(8,032)
|
Payments related to
acquisitions, net of cash acquired
|
(500)
|
|
(5,363)
|
Proceeds from
disposition of assets
|
803
|
|
67
|
Insurance settlement
interest earned
|
102
|
|
35
|
Net cash used in
investing activities
|
(8,410)
|
|
(13,293)
|
|
|
|
|
Cash flows from
financing activities
|
|
|
|
Proceeds from
long-term debt
|
-
|
|
4,472
|
Repayments of
long-term debt
|
(11,518)
|
|
(488)
|
Dividends
paid
|
(14,385)
|
|
(13,893)
|
Stock options
exercised, other
|
(227)
|
|
(2,594)
|
Distributions to
noncontrolling affiliate shareholders
|
(834)
|
|
-
|
Net cash used in
financing activities
|
(26,964)
|
|
(12,503)
|
|
|
|
|
Effect of foreign
exchange rate changes on cash
|
(6,168)
|
|
4,758
|
|
|
|
|
Net increase in cash,
cash equivalents and restricted cash
|
9,354
|
|
19,763
|
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
|
$
120,404
|
|
$
130,464
|
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SOURCE Quaker Chemical Corporation