Loading...
•
Mar 31, 2020
Quaker Chemical Q1 2020 Earnings Report
Quaker Houghton's first quarter results were announced, revealing a net loss primarily due to non-cash impairment and settlement charges, despite increased net sales driven by the Houghton combination and Norman Hay acquisition.
Key Takeaways
Quaker Houghton reported a 79% increase in net sales to $378.6 million compared to the prior year, driven by the Houghton and Norman Hay acquisitions. However, the company experienced a net loss of $28.4 million, primarily due to a non-cash impairment charge and a settlement charge related to the termination of a U.S. defined benefit pension plan.
Net sales increased 79% year-over-year to $378.6 million, driven by the Houghton and Norman Hay acquisitions.
The company had a net loss of $28.4 million, or $1.60 per diluted share, due to non-cash charges.
Non-GAAP earnings per diluted share were $1.38, compared to $1.41 in the prior year.
The company expects the second quarter to be the most challenging quarter of the year due to customer shutdowns related to COVID-19.
Forward Guidance
The company expects the second quarter to be the most challenging of the year due to customer shutdowns and reduced production related to COVID-19. Full year adjusted EBITDA is expected to be more than $200 million.
Positive Outlook
- Higher expected integration synergies.
- Additional cost savings actions.
- Improvement in gross margins.
- Expected release of cash via working capital.
- Expect to achieve significant increases in adjusted EBITDA as integration cost synergies are completed.
Challenges Ahead
- Second quarter adjusted EBITDA expected to be down by nearly half of the first quarter.
- Economic uncertainty caused by the COVID-19 pandemic makes providing specific guidance difficult.
- Many customers have shut down or significantly reduced their production.
- COVID-19 impact most notable on lower volumes in the Company’s Asia/Pacific reportable segment
Historical Earnings Impact
Analyze how earnings announcements historically affect stock price performance
Avg. Return Before/After Earnings
Loading earnings performance data...
Loading earnings reaction data...