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Mar 31, 2021
Quaker Chemical Q1 2021 Earnings Report
Quaker Houghton's first quarter performance improved due to higher sales and realized cost synergies.
Key Takeaways
Quaker Houghton reported a strong first quarter with net sales increasing by 14% to $429.8 million, driven by higher volumes and the positive impact of foreign currency translation. Net income was $38.6 million, or $2.15 per diluted share, compared to a net loss in the prior year, with non-GAAP earnings per diluted share at $2.11. Adjusted EBITDA increased by 28% to $77.1 million due to higher net sales and cost synergies from the Combination.
Net sales increased by 14% to $429.8 million compared to the prior year, driven by higher volumes and acquisitions.
Net income was $38.6 million, or $2.15 per diluted share, a significant improvement from the prior year's net loss.
Non-GAAP earnings per diluted share were $2.11, compared to $1.38 in the prior year.
Adjusted EBITDA increased by 28% to $77.1 million due to higher net sales and cost synergies.
Forward Guidance
The company expects the second quarter results will be lower than the first quarter due to the lag effect on gross margin and potentially lower volumes. Gross margins are expected to sequentially improve in the third and fourth quarters as pricing initiatives catch up to increases in raw material costs. The company believes its previous guidance is an appropriate floor for its full year adjusted EBITDA.
Positive Outlook
- Expect gross margins to sequentially improve in the third and fourth quarters.
- Pricing initiatives are expected to catch up to increases in raw material costs.
- Previous guidance is an appropriate floor for full year adjusted EBITDA.
- Company experienced higher than expected demand in the first quarter.
- Expect to take a step change in profitability.
Challenges Ahead
- Second quarter results are expected to be lower than the first quarter.
- Lowest gross margins of the year are expected in the second quarter.
- Raw material prices continued to increase in the first quarter and are expected to continue to increase in the second quarter.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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