Organic sales volumes increased 3% Y/Y driven by new business wins of approximately 4%
Delivered Q1'26 adjusted EBITDA of $72.5 million, a 5% increase Y/Y
Q1'26 non-GAAP net income of $28.4 million and non-GAAP earnings per diluted share of $1.63, a 3% increase Y/Y
Amended credit agreement, extending nearest-term debt maturity to 2031 and increasing available credit with improved terms
New global transformation and cost program targeting $20 to $30 million savings, with run rate of $10M by end of 2026
CONSHOHOCKEN, Pa., April 30, 2026 /PRNewswire/ -- Quaker Houghton ("the Company") (NYSE:KWR), the global leader in industrial process fluids, announced its first quarter 2026 results today.
Three Months EndedMarch 31,
($ in thousands, except per share data)
2026
2025
Net sales
$ 480,479
$ 442,914
Net income attributable to Quaker Chemical Corporation
19,669
12,922
Net income attributable to Quaker Chemical Corporation common shareholders, diluted
1.13
0.73
Non-GAAP net income *
28,374
28,028
Non-GAAP Earnings per diluted share *
1.63
1.58
Adjusted EBITDA *
72,530
69,047
*
Refer to the Non-GAAP Measures and Reconciliations section below for additional information
First Quarter 2026 Consolidated Results
Net sales in the first quarter of 2026 were $480.5 million, an increase of 8% compared to $442.9 million in the first quarter of 2025. This increase was primarily driven by an increase in organic sales volumes of 3%, a contribution from acquisitions of 4%, and a favorable impact from foreign currency translation of 4%, partially offset by a decline in selling price and product mix of 3%. The increase in organic sales volumes compared to the prior year was the result of net 4% new business wins across all segments and strong growth in the Asia/Pacific segment.
The Company reported net income in the first quarter of 2026 of $19.7 million, or $1.13 per diluted share, compared to $12.9 million, or $0.73 per diluted share, in the first quarter of 2025. Excluding non-recurring and non-core items in each period, the Company's non-GAAP net income and non-GAAP earnings per diluted share were $28.4 million and $1.63, respectively, in the first quarter of 2026 compared to $28.0 million and $1.58, respectively, in the first quarter of 2025. The Company generated adjusted EBITDA of $72.5 million in the first quarter of 2026, an increase of approximately 5% compared to $69.0 million in the first quarter of 2025, driven by the increase in net sales, partially offset by a decrease in operating margins. See the Non-GAAP Measures and Reconciliations section below for additional information.
Joe Berquist, Chief Executive Officer and President, commented, "We achieved 3% year-over-year organic volume growth despite challenging markets, resulting in our third consecutive quarter of profitability improvement compared to prior year. The volume growth was driven by new business wins in all regions, led again by the Asia/Pacific region. Our disciplined approach to sales execution and serving the customer is enabling us to outperform soft end markets, which we estimate were down a low-single-digit percentage in the quarter. Gross margins improved as expected in the first quarter, driving higher earnings, with adjusted EBITDA up 5% compared to prior year.
Looking ahead we expect demand to improve incrementally with normal seasonality, even with volatility and current uncertainty in the market. We expect to incur raw material inflation beginning in the second quarter and have implemented price recovery and cost actions to mitigate the impact; however, some lag will temporarily impact gross margins in the second quarter. We expect to fully recover margins to reach our target range as we exit the year. While recent geopolitical events have created additional near-term uncertainty, we expect to achieve year-over-year revenue and adjusted EBITDA growth in 2026 assuming no significant deterioration in our end markets as a result of the Middle East conflict. I am proud of the resilience and unwavering commitment to our customers demonstrated by the entire Quaker Houghton team in an exceptionally volatile environment."
First Quarter 2026 Segment Results
The Company's first quarter of 2026 operating performance for each of its three reportable segments: (i) Americas; (ii) EMEA; and (iii) Asia/Pacific, is further described below.
Three Months EndedMarch 31,
2026
2025
Net Sales *
Americas
$ 213,728
$ 213,711
EMEA
142,083
129,278
Asia/Pacific
124,668
99,925
Total net sales
$ 480,479
$ 442,914
Segment operating earnings *
Americas
$ 53,947
$ 58,462
EMEA
25,561
23,393
Asia/Pacific
34,276
25,930
Total segment operating earnings
$ 113,784
$ 107,785
*
Refer to the Segment Measures and Reconciliations section below for additional information
The following table summarizes the sales variances by reportable segment and consolidated operations in the first quarter of 2026 compared to the first quarter of 2025:
Sales volumes
Selling price & product mix
Foreign currency
Acquisition & other
Total
Americas
(2) %
(1) %
1 %
2 %
— %
EMEA
2 %
(4) %
10 %
2 %
10 %
Asia/Pacific
10 %
(2) %
3 %
14 %
25 %
Consolidated
3 %
(3) %
4 %
4 %
8 %
Net sales in the Asia/Pacific segment increased 25% in the first quarter of 2026 compared to the same period in 2025, as an increase in organic sales volumes, a contribution in sales from acquisitions, primarily Dipsol, and a favorable impact of foreign currency translation, was partially offset by a decrease in selling price and product and geographic mix. Net sales in the EMEA segment increased 10% in the first quarter of 2026 compared to the same period in 2025, due to an increase in organic sales volumes, an increase in sales from acquisitions, and a favorable impact of foreign currency translation, partially offset by a decrease in selling price and product and geographic mix. Net sales in the Americas segment in the first quarter of 2026 were consistent with the same period in 2025, as the contribution in sales from acquisitions and favorable impact from foreign currency translation was offset by a decrease in organic sales volumes and a decrease in selling price and product and geographic mix.
New business wins were strong across all segments in the first quarter of 2026 despite softer underlying end market activity compared to prior year levels. The decline in selling price and product mix in the first quarter of 2026 compared to the same period in 2025 reflects changes in the mix of products, services and geographies, and the impact of our index-based customer contracts.
Consolidated net sales increased approximately 3% compared to the fourth quarter of 2025, driven by an increase in organic sales volumes and a favorable impact from foreign currency translation, partially offset by a decrease in selling price and product and geographic mix. Net sales increased in the Americas segment compared to the fourth quarter of 2025 driven by an increase in organic sales volumes and new business wins, despite a continuation of soft underlying end market activity, partially offset by a decrease in selling price and product and geographic mix. Net sales increased in the EMEA segment compared to the fourth quarter of 2025 driven by an increase in organic sales volumes and new business wins, and an increase in selling price and product and geographic mix. Net sales in the Asia/Pacific segment decreased compared to the fourth quarter of 2025 primarily due to a decrease in selling price and product and geographic mix. Foreign currency translation was favorable to sales across all segments in the first quarter of 2026 compared to the fourth quarter of 2025.
Segment operating earnings increased in the EMEA and Asia/Pacific segments in the first quarter of 2026 compared to the prior year period primarily due to the improvement in net sales and a decrease in raw material costs, partially offset by an increase in SG&A expenses. Segment operating earnings decreased in the Americas segment in the first quarter of 2026 compared to the prior year due to a decrease in segment operating margins resulting from a decrease in price and product mix and higher SG&A expenses. Segment operating earnings increased in all three segments in the first quarter of 2026 compared to the fourth quarter of 2025, primarily driven by an increase in net sales in the Americas and EMEA segments and improved operating margins in all three segments.
Cash Flow and Liquidity Highlights
Net cash provided by operating activities was $3.8 million for the three months ended March 31, 2026, compared to net cash used by operating activities of $3.1 million for the same period in 2025. The Company's increase in operating cash flow year-over-year primarily reflects improved operating performance and lower cash outflows from restructuring activities and working capital.
Subsequent to the first quarter end, the Company successfully amended its credit agreement, extending its nearest-term maturity from June 2027 to April 2031 and expanding the availability under its revolving credit facility. As of March 31, 2026, the Company's total gross debt was $875.0 million and its cash and cash equivalents was $169.7 million, which resulted in net debt of approximately $705.3 million. The Company's net debt divided by its trailing twelve months adjusted EBITDA was approximately 2.3x.
The Company also announced the initiation of a global business transformation and cost savings program, which is expected to generate at least $20 million to $30 million of annualized cost savings by 2028.
Non-GAAP Measures and Reconciliations
The information in this press release includes non-GAAP (unaudited) financial information that includes EBITDA, adjusted EBITDA, adjusted EBITDA margin, non-GAAP operating income, non-GAAP operating margin, taxes on income before equity in net income of associated companies, adjusted, non-GAAP net income and non-GAAP earnings per diluted share. 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, facilitate a comparison among fiscal periods, and exclude items that management believes are not indicative of future operating performance or 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. In addition, our definitions of EBITDA, adjusted EBITDA, adjusted EBITDA margin, non-GAAP operating income, non-GAAP operating margin, taxes on income before equity in net income of associated companies, adjusted, non-GAAP net income, and non-GAAP earnings per diluted share, as discussed and reconciled below to the most comparable GAAP measures, may not be comparable to similarly named measures reported by other companies.
The Company presents EBITDA, which is calculated as net income attributable to the Company before depreciation and amortization, interest expense, and taxes on income before equity in net income of associated companies. The Company also presents adjusted EBITDA, which is calculated as EBITDA plus or minus certain items that management believes are not indicative of future operating performance or considered core to the Company's operations. In addition, the Company presents non-GAAP operating income, which is calculated as operating income plus or minus certain items that management believes are not indicative of future operating performance or considered core to the Company's operations. In addition, the Company presents non-GAAP Adjusted EBITDA margin and non-GAAP operating margin, which are calculated as the percentage of adjusted EBITDA and non-GAAP operating income, respectively. The Company believes these non-GAAP measures provide transparent and useful information and are widely used by analysts, investors, and competitors in our industry, as well as by management in assessing the operating performance of the Company on a consistent basis.
Additionally, the Company presents non-GAAP net income and non-GAAP earnings per diluted share as additional performance measures. Non-GAAP net income is calculated as adjusted EBITDA, defined above, less depreciation and amortization, interest expense, and taxes on income before equity in net income of associated companies, in each case adjusted, as applicable, for any depreciation, amortization, interest or tax impacts resulting from the non-core items identified in the reconciliation of net income attributable to the Company to adjusted EBITDA. Non-GAAP earnings per diluted share is calculated as non-GAAP net income per diluted share as accounted for under the "two-class share method." The Company believes that non-GAAP net income and non-GAAP earnings per diluted share provide transparent and useful information and are widely used by analysts, investors, and competitors in our industry as well as by management in assessing the performance of the Company on a consistent basis.
As it relates to future projections for the Company as well as other forward-looking information contained in this press release, the Company has not provided guidance for comparable GAAP measures or a quantitative reconciliation of forward-looking non-GAAP financial measures to the most directly comparable U.S. GAAP measure because it is unable to determine with reasonable certainty the ultimate outcome of certain significant items necessary to calculate such measures without unreasonable effort. These items include, but are not limited to, certain non-recurring or non-core items the Company may record that could materially impact net income. These items are uncertain, depend on various factors, and could have a material impact on the U.S. GAAP reported results for the guidance period.
The Company's reference to trailing twelve months adjusted EBITDA within this press release refers to the twelve-month period ended March 31, 2026 adjusted EBITDA of $302.7 million, which consists of (i) the three months ended March 31, 2026 adjusted EBITDA of $72.5 million, as presented in the non-GAAP reconciliations below, and (ii) the twelve months ended December 31, 2025 adjusted EBITDA of $299.2 million, as presented in the non-GAAP reconciliations included in the Company's fourth quarter and full year 2025 results press release dated February 23, 2026 less (iii) the three months ended March 31, 2025 adjusted EBITDA of $69.0 million, as presented in the non-GAAP reconciliations below.
Certain of the prior period non-GAAP financial measures presented in the following tables have been adjusted to conform with current period presentation. The following tables reconcile the Company's non-GAAP financial measures (unaudited) to their most directly comparable GAAP (unaudited) financial measures (dollars in thousands unless otherwise noted, except per share amounts):
