Q1 2024 Quaker Chemical Corp Earnings Call Transcript
Key Points
- Quaker Houghton reported a strong financial performance with a 6% increase in adjusted EBITDA year-over-year and an 11% increase in non-GAAP diluted earnings per share compared to the prior year.
- The company achieved a gross margin of 38.7%, which is a 400 basis points improvement from the previous year, indicating successful margin enhancement initiatives.
- Operating cash flow remained robust at approximately $27 million, driven by improved operating performance despite a modest working capital build.
- Quaker Houghton experienced volume growth in the Asia Pacific segment by a mid-teens percentage, primarily due to improvements in China and new business wins in Greater Asia.
- The company's balance sheet remains strong with a net leverage ratio of 1.8x adjusted EBITDA, providing significant financial flexibility for future growth investments and shareholder value enhancement.
- Net sales decreased by 6% year-over-year to $470 million, primarily due to lower selling prices and product mix, reflecting the impact of index-based contracts and softer industrial activity.
- Volumes in the EMEA segment declined compared to the previous year, continuing to reflect volatile end market activity in the region.
- The Americas segment also saw a decline in volumes compared to the previous year, with restrained demand in metalworking, particularly in industrial applications and packaging containers.
- The company noted limited visibility and dynamic market conditions which are expected to persist at least through the first half of 2024, adding uncertainty to the business outlook.
- Despite overall positive financial results, the company faces challenges in certain segments and regions, indicating uneven recovery and performance across its markets.
Greetings. Welcome to the Quaker Houghton First Quarter 2024 Earnings Conference Call. (Operator Instructions) As a reminder, this conference is being recorded.
I'd now like to turn the call over to Jeffrey Schnell, Vice President of Investor Relations. Mr. Schnell, you may now begin.
Thank you. Good morning, and welcome to our first quarter 2024 earnings conference call. On the call today are Andy Tometich, our President and Chief Executive Officer; Shane Hostetter, our Executive Vice President and Chief Financial Officer; and Robert Traub, our General Counsel.
Our comments relate to the financial information released after the close of U.S. markets yesterday, May 2, 2024.
Our press release and accompanying slides can be found on our Investor Relations website. Both the prepared commentary and discussion during the call may contain forward-looking statements reflecting the company's current view of future events and their potential effect on Quaker Houghton's operating
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