UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 8-K
 
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
 
July 30, 2015
Date of Report (Date of earliest event reported)
 
QUAKER CHEMICAL CORPORATION
(Exact name of Registrant as specified in its charter)
 
Commission File Number 001-12019
 
PENNSYLVANIA	 	No. 23-0993790	
(State or other jurisdiction of
incorporation or organization)	 	(I.R.S. Employer
Identification No.)	
 
One Quaker Park
901 E. Hector Street
Conshohocken, Pennsylvania 19428	
(Address of principal executive offices)	
(Zip Code)	
 
(610) 832-4000	
(Registrant’s telephone number, including area code)	
 
Not Applicable
(Former name or former address, if changed since last report)	
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
 	¨	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)	
 
 	¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)	
 
 	¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))	
 
 	¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))	

 

 	
 
INFORMATION TO BE INCLUDED IN THE REPORT
 
 	Item 2.02.	Results of Operations and Financial Condition.	
 
On July 30, 2015, Quaker Chemical Corporation announced its results of operations for the second quarter ended June 30, 2015, in a press release, the text of which is included as Exhibit 99.1 hereto. Supplemental information related to the same period is also included as Exhibit 99.2 hereto.
 
 	Item 9.01.	Financial Statements and Exhibits.	
 
The following exhibits are included as part of this report:
 
Exhibit No.	 	 	
99.1	 	Press Release of Quaker Chemical Corporation dated July 30, 2015.  	
 	 	 	
99.2	 	Supplemental Information related to second quarter ended June 30, 2015.	
 
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SIGNATURE
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 	QUAKER CHEMICAL CORPORATION	
 	Registrant	
 
Date:  July 30, 2015	 	By:	/S/ MARGARET M. LOEBL	
 	 	 	Margaret M. Loebl
Vice President, Chief Financial
Officer and Treasurer	
 
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Exhibit 99.1
 
NEWS
 
Contact:
Margaret M. Loebl
Vice President, Chief Financial Officer and Treasurer
loeblm@quakerchem.com
T. 610.832.4160	 	
 
For Release: Immediate	
 
QUAKER CHEMICAL ANNOUNCES SECOND QUARTER 2015 RESULTS
 
 	·	Solid operating results drive 4% increase in non-GAAP earnings per diluted share, despite a negative impact of 8% from foreign exchange	
 
 	·	Market share gains and acquisitions offset difficult market conditions and foreign exchange	
 
 	·	Strong quarterly operating cash flow generation of $19 million	
 
July 30, 2015
 
CONSHOHOCKEN, PA - Quaker Chemical Corporation (NYSE: KWR) today announced net sales of $183.7 million for the second quarter of 2015 compared to $191.3 million for the second quarter of 2014, and earnings per diluted share of $1.13 for the second quarter of 2015 compared to $1.16 for the second quarter of 2014.
 
Foreign currency translation continued to have a significant impact on the Company’s reported and non-GAAP results. Specifically, net sales for the second quarter of 2015 decreased by 7% due to foreign currency translation while earnings were also negatively impacted by $0.09 per diluted share, or 8%. Despite these impacts from foreign exchange, the Company’s non-GAAP earnings per diluted share increased 4% to $1.15 for the second quarter of 2015 from $1.11 for the second quarter of 2014. Adjusted EBITDA increased 2% to $26.2 million for the second quarter of 2015 from $25.8 million in the second quarter of 2014, despite the impact from changes in foreign exchange rates on the Company’s earnings of 8%, as mentioned above.
 
Michael F. Barry, Chairman, Chief Executive Officer and President commented, “We are pleased to have delivered another quarter of consistent earnings and strong cash flow despite a variety of market challenges. Foreign exchange headwinds continue to have the most significant impact on our earnings while we were also challenged by global steel industry production being down by approximately 2%. In addition, we are seeing continued weak economic conditions in several regional areas, especially in South America. Our sales have also seen some impact of price adjustments due to lower raw material costs. Despite these headwinds, we have been able to increase our non-GAAP earnings through margin expansion, market share gains and our recent acquisitions.”
 
Mr. Barry added, “We continue to pursue our key strategic initiatives and acquisitions. Today’s acquisition of Verkol in Spain, a market leader in specialty grease and lubricants, is our eleventh acquisition in the last five years. This is a continuation of our strategy to create shareholder value by using our strong cash flow and balance sheet to grow the Company through acquisitions. Looking forward to the remainder of 2015, while we anticipate a continued strong U.S. Dollar and generally weak market conditions in most countries, we believe market share gains and acquisitions will continue to compensate for these challenges. Overall, I remain confident in Quaker’s future and expect our full year 2015 non-GAAP earnings to increase modestly over 2014, leading to our sixth consecutive year of earnings improvement.”
 
Quaker Chemical Corporation
One Quaker Park, 901 E. Hector Street, Conshohocken, PA 19428-2380 USA
P: 610.832.4000 F: 610.832.8682
quakerchem.com

 	
 
Second Quarter of 2015 Summary
 
Net sales for the second quarter of 2015 were $183.7 million compared to net sales of $191.3 million for the second quarter of 2014. Increases of 4% in product volume, including additional sales from acquisitions, were more than offset by a decrease of $14.2 million, or 7%, due to the impacts of foreign currency translation.
 
Gross profit for the second quarter of 2015 increased $2.4 million, or 4%, from the second quarter of 2014, driven by increased product volume on higher gross margin of 38.4% for the second quarter of 2015 compared to 35.7% for the second quarter of 2014. The current quarter’s expansion in gross margin was mainly due to the timing of certain raw material cost decreases compared to the prior year quarter.
 
The increase in selling, general and administrative expenses (“SG&A”) for the second quarter of 2015 of $1.9 million from the second quarter of 2014 was due to the net impact of several factors. Notably, included in SG&A were incremental costs associated with the Company’s prior year acquisitions and higher labor-related costs, partially offset by decreases from foreign currency translation.
 
Interest expense was slightly higher in the second quarter of 2015 compared to the second quarter of 2014. The Company had higher average borrowings outstanding in the current quarter to fund the Company’s recent acquisition activity.
 
Interest income was $0.5 million lower in the second quarter of 2015 compared to the second quarter of 2014, primarily due to interest received on several non-income tax-related credits in the second quarter of 2014.
 
The Company’s effective tax rates for the second quarters of 2015 and 2014 were 27.1% and 30.6%, respectively. The primary contributor to the decrease in the current quarter’s effective tax rate was lower changes to reserves for uncertain tax positions in the second quarter of 2015.
 
Equity in net income of associated companies (“equity income”) decreased $1.1 million in the second quarter of 2015 compared to the second quarter of 2014 primarily due to lower equity income from the Company’s interest in a captive insurance company. The Company’s equity income for the second quarter of 2014 also includes a currency conversion charge at the Company’s Venezuelan affiliate.
 
The $0.1 million decrease in net income attributable to noncontrolling interest in the second quarter of 2015 compared to the second quarter of 2014 was primarily due to the Company’s June 2014 acquisition of the noncontrolling interest in its Australian affiliate.
 
Changes in foreign exchange rates negatively impacted the second quarter of 2015 net income by $1.2 million, or $0.09 per diluted share.
 
Year-to-Date 2015 Summary
 
Net sales for the first six months of 2015 were $365.1 million compared to net sales of $373.0 million for the first six months of 2014. Increases of 6% in product volume, including additional sales from acquisitions, were more than offset by a decrease of $26.3 million, or 7%, due to the impacts of foreign currency translation.
 
Gross profit for the first six months of 2015 increased $3.6 million, or 3%, compared to the first six months of 2014 driven by increased product volume on higher gross margin of 37.5% for the first six months of 2015 compared to 35.7% for the first six months of 2014. The Company’s expansion in gross margin was mainly due to the timing of certain raw material cost decreases compared to the prior year period.
 
The increase in SG&A for the first six months of 2015 of $4.6 million from the first six months of 2014 was due to the net impact of several factors. Notably, included in SG&A were incremental costs associated with the Company’s prior year acquisitions and higher labor-related costs, partially offset by decreases from foreign currency translation and a first quarter of 2014 cost related to an amendment to the Company’s pension plan in the United Kingdom (“U.K.”).
 
Other expense was $0.3 million in the first six months of 2015 compared to $0.4 million in the first six months of 2014. In both periods, the Company’s other expense was driven by foreign exchange transactional losses, net of third party license fee income, with lower net foreign exchange transactional losses in the first six months of 2015 compared to the first six months of 2014.
 
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Interest expense was $0.1 million higher in the first six months of 2015 compared to the first six months of 2014, primarily due to higher average borrowings outstanding in the current period.
 
Interest income was $0.7 million lower in the first six months of 2015 compared to the first six months of 2014 due to interest received on several non-income tax-related credits in the first six months of 2014.
 
The Company’s effective tax rates for the first six months of 2015 and 2014 were 28.8% and 32.5%, respectively. The primary contributors to the decrease in the current year’s effective tax rate were lower changes in reserves related to uncertain tax positions in the first six months of 2015 and certain one-time items that increased the first six months of 2014’s effective tax rate. We currently estimate the full year 2015 effective tax rate will approximate 29%.
 
Equity income decreased $3.6 million in the first six months of 2015 compared to the first six months of 2014. The decrease was primarily due to a current year currency conversion charge recorded at the Company’s Venezuelan affiliate. Due to changes in Venezuela’s foreign exchange markets and controls, the Company re-assessed its Venezuelan affiliate’s access to U.S. Dollars and its ability to import or trade under the existing exchange markets in the first quarter of 2015, which resulted in the current year charge. This was partially offset by a similar currency charge related to the conversion of Venezuelan Bolivar Fuerte to the U.S. Dollar recorded during the first six months of 2014. In addition, there was lower equity income from the Company’s interest in a captive insurance company during the first six months of 2015 compared to the first six months of 2014.
 
The $0.5 million decrease in net income attributable to noncontrolling interest in the first six months of 2015 compared to the first six months of 2014 was primarily due to the Company’s June 2014 acquisition of the noncontrolling interest in its Australian affiliate.
 
Changes in foreign exchange rates, excluding the currency conversion impacts of the Venezuelan Bolivar Fuerte, noted above, negatively impacted the first six months of 2015 net income by $2.2 million, or $0.17 per diluted share.
 
Balance Sheet and Cash Flow Items
 
The Company’s net operating cash flow of $19.2 million for the second quarter of 2015 increased its year-to-date net operating cash flow to $27.3 million compared to $8.3 million for the first six months of 2014. The increase of $19.0 million in net operating cash flows was driven by higher operating performance and lower cash invested in the Company’s working capital during the first six months of 2015 due to continued improvement in working capital management. Most notably, cash outflows from accounts receivables decreased significantly in the first six months of 2015, primarily due to the timing of sales around quarter end and improvements in timing of cash receipts. Also, included in the Company’s second quarter of 2015 net cash flow were repurchases of 18,854 shares of its common stock for $1.6 million, pursuant to the share repurchase program announced in May, 2015. Overall, the Company’s liquidity remains strong, as its cash position exceeded its debt at June 30, 2015, and the Company’s consolidated leverage ratio continued to be less than one times EBITDA.
 
Non-GAAP Measures
 
Included in this public release are non-GAAP (unaudited) financial measures of non-GAAP earnings per diluted share and adjusted EBITDA. The Company believes these non-GAAP financial measures provide meaningful supplemental information as they enhance a reader’s understanding of the financial performance of the Company, are more indicative of future operating performance of the Company, and facilitate a better comparison among fiscal periods, as the non-GAAP financial measures exclude items that are not considered core to the Company’s operations. Non-GAAP results are presented for supplemental informational purposes only and should not be considered a substitute for the financial information presented in accordance with GAAP.
 
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The following are reconciliations between the non-GAAP (unaudited) financial measures of non-GAAP earnings per diluted share and adjusted EBITDA to their most directly comparable GAAP (unaudited) financial measures:
 
 	 	Three Months Ended
June 30,	 	 	Six Months Ended
June 30,	 	
 	 	2015	 	 	2014	 	 	2015	 	 	2014	 	
GAAP earnings per diluted share attributable to Quaker Chemical Corporation common shareholders	 	$	1.13	 	 	$	1.16	 	 	$	1.90	 	 	$	2.13	 	
Equity loss (income) in a captive insurance company per diluted share	 	 	0.01	 	 	 	(0.09	)	 	 	(0.05	)	 	 	(0.15	)	
U.K. pension plan amendment per diluted share	 	 	-	 	 	 	-	 	 	 	-	 	 	 	0.05	 	
U.S. customer bankruptcy per diluted share	 	 	0.01	 	 	 	-	 	 	 	0.01	 	 	 	-	 	
Cost streamlining initiatives per diluted share	 	 	-	 	 	 	0.02	 	 	 	0.01	 	 	 	0.02	 	
Currency conversion impact of the Venezuelan Bolivar Fuerte per diluted share	 	 	-	 	 	 	0.02	 	 	 	0.21	 	 	 	0.02	 	
Non-GAAP earnings per diluted share	 	$	1.15	 	 	$	1.11	 	 	$	2.08	 	 	$	2.07	 	
 
 	 	Three Months Ended
June 30,	 	 	Six Months Ended
June 30,	 	
 	 	2015	 	 	2014	 	 	2015	 	 	2014	 	
Net income attributable to Quaker Chemical Corporation	 	$	15,038	 	 	$	15,427	 	 	$	25,416	 	 	$	28,157	 	
Depreciation and amortization	 	 	4,666	 	 	 	3,824	 	 	 	9,364	 	 	 	7,712	 	
Interest expense	 	 	607	 	 	 	581	 	 	 	1,194	 	 	 	1,106	 	
Taxes on income before equity in net income of associated companies	 	 	5,724	 	 	 	6,538	 	 	 	11,083	 	 	 	13,084	 	
Equity loss (income) in a captive insurance company	 	 	100	 	 	 	(1,225	)	 	 	(695	)	 	 	(2,071	)	
U.K. pension plan amendment	 	 	-	 	 	 	-	 	 	 	-	 	 	 	902	 	
U.S. customer bankruptcy	 	 	111	 	 	 	-	 	 	 	111	 	 	 	-	 	
Cost streamlining initiatives	 	 	-	 	 	 	348	 	 	 	173	 	 	 	348	 	
Currency conversion impact of the Venezuelan Bolivar Fuerte	 	 	-	 	 	 	321	 	 	 	2,806	 	 	 	321	 	
Adjusted EBITDA	 	$	26,246	 	 	$	25,814	 	 	$	49,452	 	 	$	49,559	 	
 
Forward-Looking Statements
 
This release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those projected in such statements. A major risk is that the Company’s demand is largely derived from the demand for its customers’ products, which subjects the Company to downturns in a customer’s business and unanticipated customer production shutdowns. Other major risks and uncertainties include, but are not limited to, significant increases in raw material costs, customer financial stability, worldwide economic and political conditions, foreign currency fluctuations, future terrorist attacks and other acts of violence. Other factors could also adversely affect us. Therefore, we caution you not to place undue reliance on our forward-looking statements. This discussion is provided as permitted by the Private Securities Litigation Reform Act of 1995.
 
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Conference Call
 
As previously announced, Quaker Chemical’s investor conference call to discuss the second quarter of 2015 results is scheduled for July 31, 2015 at 8:30 a.m. (ET). A live webcast of the conference call, together with supplemental information, can be accessed through the Company’s Investor Relations website at  http://www.quakerchem.com . You can also access the conference call by dialing 877-269-7756.
 
About Quaker
 
Quaker Chemical is a leading global provider of process fluids, chemical specialties, and technical expertise to a wide range of industries, including steel, aluminum, automotive, mining, aerospace, tube and pipe, cans, and others.  For nearly 100 years, Quaker has helped customers around the world achieve production efficiency, improve product quality, and lower costs through a combination of innovative technology, process knowledge, and customized services. Headquartered in Conshohocken, Pennsylvania USA, Quaker serves businesses worldwide with a network of dedicated and experienced professionals whose mission is to make a difference.
 
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Quaker Chemical Corporation
Condensed Consolidated Statements of Income
(Dollars in thousands, except per share data)
 
 	 	(Unaudited)	 	
 	 	Three Months Ended June 30,	 	 	Six Months Ended June 30,	 	
 	 	2015	 	 	2014	 	 	2015	 	 	2014	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Net sales	 	$	183,726	 	 	$	191,286	 	 	$	365,056	 	 	$	372,960	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Cost of goods sold	 	 	113,109	 	 	 	123,070	 	 	 	228,111	 	 	 	239,630	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Gross profit	 	 	70,617	 	 	 	68,216	 	 	 	136,945	 	 	 	133,330	 	
%	 	 	38.4	%	 	 	35.7	%	 	 	37.5	%	 	 	35.7	%	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Selling, general and administrative expenses	 	 	49,172	 	 	 	47,271	 	 	 	97,636	 	 	 	93,012	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Operating income	 	 	21,445	 	 	 	20,945	 	 	 	39,309	 	 	 	40,318	 	
%	 	 	11.7	%	 	 	10.9	%	 	 	10.8	%	 	 	10.8	%	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Other (expense) income, net	 	 	(88	)	 	 	117	 	 	 	(282	)	 	 	(356	)	
Interest expense	 	 	(607	)	 	 	(581	)	 	 	(1,194	)	 	 	(1,106	)	
Interest income	 	 	375	 	 	 	895	 	 	 	695	 	 	 	1,348	 	
Income before taxes and equity in net income of associated companies	 	 	21,125	 	 	 	21,376	 	 	 	38,528	 	 	 	40,204	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Taxes on income before equity in net income of associated companies	 	 	5,724	 	 	 	6,538	 	 	 	11,083	 	 	 	13,084	 	
Income before equity in net income of associated companies	 	 	15,401	 	 	 	14,838	 	 	 	27,445	 	 	 	27,120	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Equity in net income (loss) of associated companies	 	 	11	 	 	 	1,104	 	 	 	(1,426	)	 	 	2,131	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net income	 	 	15,412	 	 	 	15,942	 	 	 	26,019	 	 	 	29,251	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Less: Net income attributable to noncontrolling interest	 	 	374	 	 	 	515	 	 	 	603	 	 	 	1,094	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net income attributable to Quaker Chemical Corporation	 	$	15,038	 	 	$	15,427	 	 	$	25,416	 	 	$	28,157	 	
%	 	 	8.2	%	 	 	8.1	%	 	 	7.0	%	 	 	7.5	%	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Per share data:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net income attributable to Quaker Chemical Corporation Common Shareholders - basic	 	$	1.13	 	 	$	1.17	 	 	$	1.91	 	 	$	2.13	 	
Net income attributable to Quaker Chemical Corporation Common Shareholders - diluted	 	$	1.13	 	 	$	1.16	 	 	$	1.90	 	 	$	2.13	 	
 
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Quaker Chemical Corporation
Condensed Consolidated Balance Sheets
(Dollars in thousands, except par value and share amounts)
 
 	 	(Unaudited)	 	
 	 	June 30,	 	 	December 31,	 	
 	 	2015	 	 	2014	 	
ASSETS	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	
Current assets	 	 	 	 	 	 	 	 	
Cash and cash equivalents	 	$	65,784	 	 	$	64,731	 	
Accounts receivable, net	 	 	187,415	 	 	 	189,484	 	
Inventories, net	 	 	77,041	 	 	 	77,708	 	
Prepaid expenses and other current assets	 	 	20,614	 	 	 	19,595	 	
Total current assets	 	 	350,854	 	 	 	351,518	 	
 	 	 	 	 	 	 	 	 	
Property, plant and equipment, net	 	 	81,370	 	 	 	85,763	 	
Goodwill	 	 	76,017	 	 	 	77,933	 	
Other intangible assets, net	 	 	66,034	 	 	 	70,408	 	
Investments in associated companies	 	 	20,078	 	 	 	21,751	 	
Deferred income taxes	 	 	20,740	 	 	 	24,411	 	
Other assets	 	 	32,971	 	 	 	33,742	 	
Total assets	 	$	648,064	 	 	$	665,526	 	
 	 	 	 	 	 	 	 	 	
LIABILITIES AND EQUITY	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	
Current liabilities	 	 	 	 	 	 	 	 	
Short-term borrowings and current portion of long-term debt	 	$	397	 	 	$	403	 	
Accounts and other payables	 	 	74,762	 	 	 	78,977	 	
Accrued compensation	 	 	13,784	 	 	 	19,853	 	
Other current liabilities	 	 	24,997	 	 	 	25,668	 	
Total current liabilities	 	 	113,940	 	 	 	124,901	 	
Long-term debt	 	 	61,694	 	 	 	75,328	 	
Deferred income taxes	 	 	7,454	 	 	 	8,584	 	
Other non-current liabilities	 	 	86,450	 	 	 	91,578	 	
Total liabilities	 	 	269,538	 	 	 	300,391	 	
 	 	 	 	 	 	 	 	 	
Equity	 	 	 	 	 	 	 	 	
Common stock, $1 par value; authorized 30,000,000 shares; issued and outstanding 2015 - 13,336,918 shares; 2014 - 13,300,891 shares	 	 	13,337	 	 	 	13,301	 	
Capital in excess of par value	 	 	103,082	 	 	 	99,056	 	
Retained earnings	 	 	315,060	 	 	 	299,524	 	
Accumulated other comprehensive loss	 	 	(60,771	)	 	 	(54,406	)	
Total Quaker shareholders' equity	 	 	370,708	 	 	 	357,475	 	
Noncontrolling interest	 	 	7,818	 	 	 	7,660	 	
Total equity	 	 	378,526	 	 	 	365,135	 	
Total liabilities and equity	 	$	648,064	 	 	$	665,526	 	
 
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Quaker Chemical Corporation
Condensed Consolidated Statements of Cash Flows
(Dollars in thousands)
 
 	 	(Unaudited)	 	
 	 	Six Months Ended June 30,	 	
 	 	2015	 	 	2014	 	
Cash flows from operating activities	 	 	 	 	 	 	 	 	
Net income	 	$	26,019	 	 	$	29,251	 	
Adjustments to reconcile net income to net cash provided by operating activities:	 	 	 	 	 	 	 	 	
Depreciation	 	 	6,117	 	 	 	6,084	 	
Amortization	 	 	3,247	 	 	 	1,628	 	
Equity in undistributed earnings of associated companies, net of dividends	 	 	1,487	 	 	 	(1,931	)	
Deferred compensation and other, net	 	 	1,325	 	 	 	3,340	 	
Stock-based compensation	 	 	3,169	 	 	 	2,732	 	
Gain on disposal of property, plant and equipment and other assets	 	 	(69	)	 	 	(97	)	
Insurance settlements realized	 	 	(301	)	 	 	(980	)	
Pension and other postretirement benefits	 	 	1,019	 	 	 	(926	)	
(Decrease) increase in cash from changes in current assets and current liabilities, net of acquisitions:	 	 	 	 	 	 	 	 	
Accounts receivable	 	 	(2,344	)	 	 	(20,563	)	
Inventories	 	 	(1,993	)	 	 	(7,568	)	
Prepaid expenses and other current assets	 	 	(4,057	)	 	 	1,157	 	
Accounts payable and accrued liabilities	 	 	(6,301	)	 	 	(3,873	)	
Net cash provided by operating activities	 	 	27,318	 	 	 	8,254	 	
 	 	 	 	 	 	 	 	 	
Cash flows from investing activities	 	 	 	 	 	 	 	 	
Investments in property, plant and equipment	 	 	(4,277	)	 	 	(5,521	)	
Payments related to acquisitions, net of cash acquired	 	 	528	 	 	 	-	 	
Proceeds from disposition of assets	 	 	102	 	 	 	128	 	
Insurance settlement interest earned	 	 	20	 	 	 	23	 	
Change in restricted cash, net	 	 	281	 	 	 	957	 	
Net cash used in investing activities	 	 	(3,346	)	 	 	(4,413	)	
 	 	 	 	 	 	 	 	 	
Cash flows from financing activities	 	 	 	 	 	 	 	 	
Proceeds from long-term debt	 	 	-	 	 	 	7,500	 	
Repayment of long-term debt	 	 	(12,699	)	 	 	(248	)	
Dividends paid	 	 	(7,991	)	 	 	(6,607	)	
Stock options exercised, other	 	 	534	 	 	 	(33	)	
Payments for repurchase of common stock	 	 	(1,630	)	 	 	-	 	
Excess tax benefit related to stock option exercises	 	 	378	 	 	 	267	 	
Purchase of a noncontrolling interest in an affiliate	 	 	-	 	 	 	(7,532	)	
Payment of acquisition-related earnout liability	 	 	-	 	 	 	(4,709	)	
Distributions to noncontrolling affiliate shareholders	 	 	-	 	 	 	(657	)	
Net cash used in financing activities	 	 	(21,408	)	 	 	(12,019	)	
 	 	 	 	 	 	 	 	 	
Effect of exchange rate changes on cash	 	 	(1,511	)	 	 	(82	)	
Net increase (decrease) in cash and cash equivalents	 	 	1,053	 	 	 	(8,260	)	
Cash and cash equivalents at the beginning of the period	 	 	64,731	 	 	 	68,492	 	
Cash and cash equivalents at the end of the period	 	$	65,784	 	 	$	60,232	 	

 

Exhibit 99.2

1 Second Quarter 2015 Results Investor Conference Call July 31, 2015 Quaker Chemical Corporation

 	

Regulation G The attached charts include Company information that does not conform to generally accepted accounting principles ( “GAAP”). Management believes that an analysis of this data is meaningful to investors because it provides insight with respect to ongoing operating results of the Company and allows investors to better evaluate the financial results of the Company. These measures should not be viewed as an alternative to GAAP measures of performance. Furthermore, these measures may not be consis tent with similar measures provided by other companies. This data should b e read in conjunction with the C ompany’s second quarter earnings news release dated July 30, 2015, which has been furnished to the SEC on Form 8-K and the Company’s Form 10-Q for the quarterly period ended June 30, 2015, which has been filed with the SEC. Forward-Looking Statements This presentation may contain forward-looking statements that are subject to certain risks and uncertainties that could cause actual results to differ materially from those projected in such statements. A major risk is that the Company’s demand is largely derived from the demand for its customers’ products, which subjects the Company to downturns in a customer’s business and unanticipated customer production shutdowns. Other major risks and uncertainties include, but are not limited to, significant increases in raw material costs, customer financial stability, worldwide economic and political conditions, foreign currency fluctuations, future terrorist attacks and other acts of violence. Other factors could also adversely affect us. Therefore, we caution you not to place undue reliance on our forward-looking statements. This discussion is provided as permitted by the Private Securities Litigation Reform Act of 1995. Risks and Uncertainties Statement

 	

Speakers Michael F. Barry Chairman of the Board, Chief Executive Officer & President Margaret M. Loebl Vice President, Chief Financial Officer & Treasurer Robert T. Traub Vice President, General Counsel & Corporate Secretary Chart #1

 	

Second Quarter 2015 Headlines ▪ Solid operating results drive 4% increase in non - GAAP earnings per diluted share, despite a negative impact of 8% from foreign exchange ▪ Market share gains and acquisitions offset difficult market conditions and foreign exchange ▪ Strong quarterly operating cash flow generation of $19 million Chart #2

 	

Chairman Comments Second Quarter 2015 ▪ Second Quarter 2015 x Foreign exchange headwinds continue to have the most significant impact on earnings x Market share gains, margin expansion, and acquisitions offset difficult market conditions and foreign exchange impact x Consistent earnings despite challenges from a global steel decline of 2% and price adjustments on lower raw material costs x Strong operating cash flow and balance sheet enable key strategic initiatives and acquisitions, including today’s acquisition of Verkol S.A. ▪ 2015 Outlook x Continued foreign exchange impacts expected from strong U.S. Dollar x Global market challenges on weak economic conditions x Anticipate market share gains and acquisition leverage will continue to compensate various market challenges “Overall, we remain confident in our future and expect our full year 2015 non - GAAP earnings to increase modestly over 2014, leading to our sixth consecutive year of earnings improvement.” -- Michael F. Barry, Chairman, CEO & President Chart #3

 	

1) Solid operating results drive quarterly non - GAAP earnings per diluted share of $1.15, up 4% from $1.11 in prior year quarter – Negative impact of $0.09 per diluted share, or 8%, due to foreign exchange 2) Quarterly sales up 4% on volumes, including recent acquisitions, offset by 7% decline from foreign currency translation 3) Increased gross margin in the current quarter driven by timing of certain raw material cost decreases 4) Lower year - over - year effective tax rate 5) Strong quarterly operating cash flow generation of $19.2 million 6) Continued strength in balance sheet for future acquisitions Chief Financial Officer – Highlights Second Quarter 2015 Chart #4

 	

Product Volume by Quarter Thousand Kilograms 25,000 30,000 35,000 40,000 45,000 50,000 55,000 60,000 4Q08 YTD Avg. 1Q092Q093Q094Q091Q102Q103Q104Q101Q112Q113Q114Q111Q122Q123Q124Q121Q132Q133Q134Q131Q142Q143Q144Q141Q152Q15 Chart #5

 	

Financial Snapshot Q2 2015 Q2 2014 YTD 2015 YTD 2014 Net Sales ($Mils.) 183.7 191.3 365.1 373.0 Gross Margin (%) 38.4 35.7 37.5 35.7 Operating Margin (%) 11.7 10.9 10.8 10.8 Net Income attributable to Quaker Chemical Corporation ($Mils.) 15.0 15.4 25.4 28.2 Adjusted EBITDA ($Mils.) – Trailing Twelve Months 99.7 93.4 -- -- Adjusted EBITDA Margin (%) 13.2 12.6 -- -- Earnings Per Diluted Share 1.13 1.16 1.90 2.13 Non - GAAP Earnings Per Diluted Share 1.15 1.11 2.08 2.07 Debt ($Mils.) 62.1 26.0 -- -- Equity ($Mils.) 378.5 364.7 -- -- Net Operating Cash Flow ($Mils.) 19.2 10.1 27.3 8.3 Chart #6

 	

Gross Margin Percentage 28.0% 34.7% 35.4% 32.6% 33.7% 35.8% 35.7% 37.5% 20.0% 25.0% 30.0% 35.0% 40.0% 2008 2009 2010 2011 2012 2013 2014 YTD 2015 Gross Margin Percentage 35.7% 35.4% 35.9% 36.6% 38.4% 20.0% 25.0% 30.0% 35.0% 40.0% Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Gross Margin Percentage Chart #7

 	

Adjusted EBITDA Baseline Historical Performance $40.1 $66.8 $73.0 $80.9 $89.6 $99.8 $99.7 $44.2 9.8% 12.3% 10.7% 11.4% 12.3% 13.0% 13.2% 6.9% 2008 2009 2010 2011 2012 2013 2014 Trailing Twelve Months Q2 2015 Adjusted EBITDA ($ Mils.) Adjusted EBITDA Margin (%) 2008 – 2015 CAGR: 13.9% +630 Margin bps Chart #8

 	

Balance Sheet Net Cash / (Debt) -$100 -$80 -$60 -$40 -$20 $0 $20 $40 $60 $80 2008 2009 2010 2011 2012 2013 2014 Q2 2015 $ Millions Cash ST/LT Debt Net Debt Chart #9

 	

APPENDIX

 	

Non - GAAP Earnings Per Diluted Share Reconciliation Chart #10 Q2 2015 Q2 2014 YTD 2015 YTD 2014 GAAP earnings per diluted share 1.13$ 1.16$ 1.90$ 2.13$ Equity loss (income) in a captive insurance company per diluted share 0.01$ (0.09)$ (0.05)$ (0.15)$ U.K. pension plan amendment per diluted share -$ -$ -$ 0.05$ U.S. customer bankruptcy per diluted share 0.01$ -$ 0.01$ -$ Cost streamlining initiatives per diluted share -$ 0.02$ 0.01$ 0.02$ Currency conversion impact of the Venezuelan Bolivar Fuerte per diluted share -$ 0.02$ 0.21$ 0.02$ Non-GAAP earnings per diluted share 1.15$ 1.11$ 2.08$ 2.07$

 	

Adjusted EBITDA Reconciliation 2008 2009 2010 2011 2012 2013 2014 Net income 9,833 16,058 32,120 45,892 47,405 56,339 56,492 Depreciation 10,879 9,525 9,867 11,455 12,252 12,339 12,306 Amortization 1,177 1,078 988 2,338 3,106 3,445 4,325 Interest expense 5,509 5,533 5,225 4,666 4,283 2,922 2,371 Taxes on income 4,977 7,065 12,616 14,256 15,575 20,489 23,539 Restructuring and related activities 2,916 2,289 - - - - - Non-income tax contingency charge - - 4,132 - - 796 - Equity affiliate out of period charge - - 564 - - - - Mineral oil excise tax refund - - - - - (2,540) - Transition costs related to key employees 3,505 2,443 1,317 - 609 - - Non-cash gain from the purchase of an equity affiliate - - - (2,718) - - - Change in acquisition-related earnout liability - - - (595) (1,737) (497) - Equity loss (income) from a captive insurance company 1,299 162 (313) (2,323) (1,812) (5,451) (2,412) Currency conversion impacts of the Venezuelan Bolivar - - 322 - - 357 321 Customer Bankruptcies - - - - 1,254 - 825 Cost streamlining initiatives - - - - - 1,419 1,166 U.K. pension plan amendment - - - - - - 902 Adjusted EBITDA 40,095 44,153 66,838 72,971 80,935 89,618 99,835 Adjusted EBITDA Margin 6.9% 9.8% 12.3% 10.7% 11.4% 12.3% 13.0% Chart #11

 	

Trailing Twelve Months Adjusted EBITDA Reconciliation I = G + H H G = F - D F E = C + D D C = B - A B A Trailing Twelve Months Q2 2015 YTD Q2 2015 Last Six Months 2014 YTD 2014 Trailing Twelve Months Q2 2014 YTD Q2 2014 Last Six Months 2013 YTD 2013 YTD Q2 2013 Net income 53,751 25,416 28,335 56,492 54,794 28,157 26,637 56,339 29,702 Depreciation 12,339 6,117 6,222 12,306 12,298 6,084 6,214 12,339 6,125 Amortization 5,944 3,247 2,697 4,325 3,310 1,628 1,682 3,445 1,763 Interest expense 2,459 1,194 1,265 2,371 2,522 1,106 1,416 2,922 1,506 Taxes on income 21,538 11,083 10,455 23,539 22,612 13,084 9,528 20,489 10,961 Non-income tax contingency - - - - 796 - 796 796 - Mineral oil excise tax refund - - - - - - - (2,540) (2,540) Change in acquisition-related earnout liability - - - - (1,172) - (1,172) (497) 675 Equity income from a captive insurance company (1,036) (695) (341) (2,412) (4,391) (2,071) (2,320) (5,451) (3,131) Currency conversion impacts of the Venezuelan Bolivar 2,806 2,806 - 321 321 321 - 357 357 Customer bankruptcies 936 111 825 825 - - - - - Cost streamlining initiatives 991 173 818 1,166 1,365 348 1,017 1,419 402 U.K. pension plan amendment - - - 902 902 902 - - - Adjusted EBITDA 99,728 49,452 50,276 99,835 93,357 49,559 43,798 89,618 45,820 Adjusted EBITDA Margin 13.2% 13.5% 12.8% 13.0% 12.6% 13.3% 11.9% 12.3% 12.7% Chart #12