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Sep 30, 2020
Quaker Chemical Q3 2020 Earnings Report
Quaker Houghton reported a net sales increase of 13% compared to the third quarter of 2019, driven by additional net sales from the Combination and Norman Hay acquisition, but experienced a 5% decline compared to prior year pro forma net sales due to lower volumes reflecting the impact from COVID-19.
Key Takeaways
Quaker Houghton's Q3 2020 results showed a strong rebound compared to Q2, with net sales at $367.2 million, a 13% increase year-over-year. Net income was $27.3 million, and adjusted EBITDA increased 24% to $63.9 million year-over-year. The company expects gradual sequential improvement in markets and anticipates full-year adjusted EBITDA to exceed $215 million.
Net sales increased by 13% compared to Q3 2019, reaching $367.2 million.
Net income was $27.3 million, or $1.53 per diluted share, compared to a net loss of $13.1 million, or $0.80 per diluted share, in the prior year.
Adjusted EBITDA increased by 24% to $63.9 million compared to $51.4 million in Q3 2019.
The company expects adjusted EBITDA to be in the range of the third quarter result for the fourth quarter and to exceed $215 million for the full year.
Forward Guidance
The company expects gradual sequential improvement in its markets, anticipating adjusted EBITDA to be in the range of Q3 results for Q4 and to exceed $215 million for the full year. They project a 20+% increase in adjusted EBITDA for 2021.
Positive Outlook
- Expect gradual sequential improvement in markets.
- Anticipate a 20+% increase in adjusted EBITDA for 2021.
- Integration synergies are expected to continue to help.
- Additional cost savings actions are expected to continue to help.
- Improvement in product margins are expected to continue to help.
Challenges Ahead
- Improvement by quarter is hard to predict given the uncertainty in the operating environment.
- Still not back to where we would have expected our business to be when we started the year.
- COVID-19 continues to negatively impact global production levels.
Historical Earnings Impact
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