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Mar 31, 2022
Quaker Chemical Q1 2022 Earnings Report
Quaker Houghton's Q1 2022 net sales reached a record high, driven by price increases and acquisitions, but profitability was impacted by rising raw material costs.
Key Takeaways
Quaker Houghton reported record net sales of $474.2 million in Q1 2022, a 10% increase year-over-year. This growth was primarily due to higher selling prices and product mix, as well as contributions from acquisitions. However, net income decreased to $19.8 million, or $1.11 per diluted share, due to lower gross margins resulting from significant increases in raw material and other costs.
Net sales reached a record $474.2 million, up 10% compared to the prior year quarter.
Organic sales volumes decreased by 6%, primarily due to a strong comparison in Q1 2021 and impacts from the war in Ukraine.
Net income decreased to $19.8 million, or $1.11 per diluted share, compared to $38.6 million, or $2.15 per diluted share in the prior year quarter.
Adjusted EBITDA declined to $60.4 million compared to $77.1 million in the first quarter of 2021, due to lower gross margins from increased raw material costs.
Forward Guidance
The Company is implementing further aggressive and strategic pricing actions to mitigate the current and expected inflationary pressures on our business. While significant uncertainty exists, notably due to pandemic-related restrictions in China and the ongoing war in Ukraine, the Company is encouraged by the favorable demand profile and its ability to capture price. The Company is confident in its strategy and focused on executing its value enhancing initiatives aimed at improving its profitability, delivering its growth potential and generating solid free cash flow
Positive Outlook
- Favorable demand profile
- Ability to capture price
- Executing value enhancing initiatives
- Improving profitability
- Delivering growth potential
Challenges Ahead
- Significant supply chain disruptions
- Geopolitical issues
- Unprecedented inflationary pressures
Historical Earnings Impact
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Avg. Return Before/After Earnings
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