Quaker Houghton (KWR) Reports Q3 2023 Earnings: Net Sales of $490.6 Million, Net Income of $33. ...
Quaker Houghton (NYSE:KWR) reported Q3 2023 net sales of $490.6 million and net income of $33.7 million.
The company's adjusted EBITDA for Q3 2023 was $84.4 million, a 20% increase compared to $70.3 million in Q3 2022.
Operating cash flow for the year-to-date was approximately $199.5 million.
Net debt to adjusted EBITDA improved to 2.0x.
Quaker Houghton (NYSE:KWR), the global leader in industrial process fluids, announced its third quarter 2023 results on November 2, 2023. The company reported net sales of $490.6 million, a slight decrease compared to $492.2 million in the third quarter of 2022. This was primarily due to a decrease in sales volumes of approximately 4%, offset by an increase in selling price and product mix of approximately 2% and a favorable impact of foreign currency translation of 2%.
Financial Highlights
Quaker Houghton (NYSE:KWR) reported a net income of $33.7 million, or $1.87 per diluted share, in the third quarter of 2023, compared to a net income of $25.9 million or $1.44 per diluted share in the third quarter of 2022. The company's non-GAAP net income and earnings per diluted share were $36.9 million and $2.05 respectively in the third quarter of 2023 compared to $31.2 million and $1.74 respectively in the prior year quarter.
The company generated adjusted EBITDA of $84.4 million in the third quarter of 2023, an increase of 20% compared to $70.3 million in the third quarter of 2022. This increase was primarily driven by an improvement in gross margins in all segments compared to the prior year.
Segment Results
Quaker Houghton (NYSE:KWR) reorganized its executive management team in the first quarter of 2023 to align with its new business structure, which includes three reportable segments: Americas, EMEA, and Asia/Pacific. The company's net sales in the Americas segment decreased in the third quarter of 2023 compared to the same period in 2022 primarily due to a decrease in sales volumes, partially offset by higher selling price and product mix and a favorable impact from foreign currency translation. Net sales in the EMEA segment increased compared to the prior year quarter as a result of an increase in selling price and product mix and a favorable impact from foreign currency translation, partially offset by a decline in sales volumes. Net sales in the Asia/Pacific segment increased compared to the prior year quarter as a result of an increase in sales volumes, partially offset by an unfavorable impact of foreign currency translation.
Cash Flow and Liquidity Highlights
Net cash provided by operating activities was $199.5 million for the first nine months of 2023 compared to net cash used in operating activities of $26.3 million in the first nine months of 2022. As of September 30, 2023, the companys total gross debt was $825.9 million and its cash and cash equivalents was $198.4 million, which resulted in net debt of $627.5 million. The company has paid down approximately $127 million of gross debt year-to-date in 2023. The companys net debt divided by its trailing twelve months adjusted EBITDA was approximately 2.0x.
CEO and President, Andy Tometich, commented on the results,
Quaker Houghton achieved record results in the third quarter highlighted by further improvement in our profitability and double-digit earnings growth as well as robust cash flow generation. I am proud of the organizations resolve and consistent execution; delivering strong operational and financial performance in a challenging end market environment."
Explore the complete 8-K earnings release (here) from Quaker Houghton for further details.
This article first appeared on GuruFocus.
