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Jun 30, 2021
Quaker Chemical Q2 2021 Earnings Report
Quaker Houghton's financial performance significantly improved due to higher sales volumes, cost synergies, and market share gains.
Key Takeaways
Quaker Houghton reported a strong second quarter with a 52% increase in net sales and a significant improvement in net income compared to the prior year. The company benefited from higher sales volumes, cost synergies, and market share gains, but faced challenges from rising raw material costs and supply chain issues.
Net sales increased by 52% to $435.3 million compared to the prior year quarter.
Net income was $33.6 million, or $1.88 per diluted share, compared to a net loss of $7.7 million, or $0.43 per diluted share in the prior year quarter.
Non-GAAP earnings per diluted share was $1.82 compared to $0.21 in the prior year second quarter.
Adjusted EBITDA increased by 118% to $70.1 million compared to the second quarter of 2020.
Forward Guidance
The company expects raw material costs to continue to increase in the third quarter and is implementing additional price increases to help offset them. Gross margins for the third quarter are expected to be at or somewhat below the second quarter level before beginning to increase in the fourth quarter. Demand is expected to remain strong, but also to have some headwinds in automotive due to the semiconductor shortage and some seasonality trends. The company reaffirms its previous floor guidance on full year adjusted EBITDA.
Positive Outlook
- Sufficient price increases implemented during the year to return product margins to their targeted level as we exit the year.
- Demand remains strong.
- Completing integration cost synergies.
- Continuing to take share in the marketplace.
- Achieving positive impacts from recent acquisitions.
Challenges Ahead
- Raw material costs to continue to increase in the third quarter.
- Gross margins for the third quarter are expected to be at or somewhat below our second quarter level.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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