Quaker Houghton — Third Quarter 2026 Earnings Summary

Financial Performance:

• Net sales for the third quarter of 2026 were $544.5 million, a 10% increase year-over-year from $493.8 million in the third quarter of 2025.
• Net income attributable to Quaker Chemical Corporation was $30.0 million ($1.73 per diluted share) for the third quarter of 2026, compared to $30.5 million ($1.75 per diluted share) in the prior year period.
• Non-GAAP net income for the third quarter of 2026 was $41.4 million ($2.39 per diluted share), an increase of 15% year-over-year from $36.3 million ($2.08 per diluted share).
• Adjusted EBITDA for the third quarter of 2026 was $89.8 million, an 8% increase year-over-year from $82.9 million.
• For the nine months ended September 30, 2026, net sales were $1,557.6 million compared to $1,420.2 million in the prior year.
• Net income for the nine months ended September 30, 2026, was $76.5 million, compared to a net loss of $23.2 million in the prior year period.
• Non-GAAP net income for the nine months ended September 30, 2026, was $107.7 million, compared to $94.3 million in the prior year.
• Adjusted EBITDA for the nine months ended September 30, 2026, was $247.5 million, compared to $227.4 million in the prior year.
• Net cash provided by operating activities for the nine months ended September 30, 2026, was $47.6 million, a decrease from $89.9 million in the prior year period.
• As of September 30, 2026, total gross debt was $894.6 million and cash and cash equivalents were $167.0 million, resulting in net debt of approximately $727.6 million.
• The net debt to trailing twelve-month adjusted EBITDA ratio was approximately 2.3x.
• Gross profit for the third quarter of 2026 was $193.5 million, with a non-GAAP gross margin of 35.5%, compared to a non-GAAP gross margin of 36.8% in the prior year quarter.
• Non-GAAP operating income for the third quarter of 2026 was $63.1 million, with a non-GAAP operating margin of 11.6%, compared to 11.7% in the prior year quarter.

Guidance and Future Outlook:

• Management anticipates fourth quarter revenue and adjusted EBITDA will improve year-over-year but decline sequentially from the third quarter's record level due to normal seasonal demand patterns from the holiday season in North America and EMEA.
• Activity in Asia is expected to remain soft in the fourth quarter as geopolitical and economic uncertainty have tempered industrial demand in China.
• Global raw material costs are anticipated to remain elevated through the end of the year due to the ongoing conflict in the Middle East.
• The Company remains focused on advancing transformation initiatives and carrying positive earnings momentum into 2027.
• The Company has not provided quantitative guidance for comparable GAAP measures or a quantitative reconciliation of forward-looking non-GAAP financial measures due to uncertainty regarding non-recurring or non-core items.

Business Segments and Product Lines:

• Americas segment net sales increased 14% year-over-year to $254.0 million, driven by a 6% increase in sales volumes and an 8% increase in selling price and product mix.
• EMEA segment net sales increased 6% year-over-year to $152.5 million, driven by a 10% increase in selling price and product mix, partially offset by a 2% decrease in sales volumes and a 2% unfavorable impact from foreign currency.
• Asia/Pacific segment net sales increased 9% year-over-year to $138.1 million, driven by a 5% increase in sales volumes, a 3% increase in selling price and product mix, and a 1% favorable impact from foreign currency.
• Consolidated sales volumes increased 3% year-over-year, primarily driven by new business wins across all segments.
• The increase in selling price and product mix reflects pricing actions taken to offset higher raw material costs, changes in product and service mix, and the impact of index-based customer contracts.
• Americas segment operating earnings increased to $65.7 million from $58.9 million in the prior year quarter.
• EMEA segment operating earnings increased to $31.2 million from $26.5 million in the prior year quarter.
• Asia/Pacific segment operating earnings decreased to $35.1 million from $35.6 million in the prior year quarter.
• Underlying end market activity was flat to slightly lower than prior year levels, while new business wins led to year-over-year volume growth.

Market and Competitive Landscape:

• The Company operates as the global leader in industrial process fluids with a presence in over 25 countries.
• End markets remain challenged amid ongoing conflict in the Middle East.
• Market conditions in China softened throughout the third quarter.
• The Company serves thousands of customers in the steel, aluminum, automotive, aerospace, offshore, can, mining, and metalworking industries.

Risks and Challenges:

• Risks include inflationary pressures, increases in raw material costs, and global supply chain constraints.
• Geopolitical events, including the conflict in the Middle East and Ukraine, and economic/political disruptions globally pose risks.
• Demand for the Company's products is derived from customer demand, subjecting the Company to uncertainties related to customer business downturns and production slowdowns.
• High interest rates and their impact on the Company and its customers' business operations are a risk factor.
• Foreign currency fluctuations and changes in applicable tax rates and regulations are potential risks.
• The Company is subject to business cycles experienced by customers in the steel, automobile, aircraft, industrial equipment, aluminum, and durable goods industries.

Management Commentary and Tone:

• Joe Berquist, Chief Executive Officer and President, noted that results were led by strong growth in the Americas and improved operating earnings in EMEA despite challenged end markets.
• Management highlighted a fifth consecutive quarter of year-over-year profitability improvement and a second consecutive quarter of record adjusted EBITDA.
• Management expressed pride in the team's consistent execution and ability to convert above-market growth into higher earnings.
• The tone regarding future outlook is cautious regarding Asia and raw material costs but confident in the transformation initiatives and earnings momentum.

Other Key Points:

• In the third quarter of 2026, the Company repurchased 21,781 shares for $3.3 million.
• Total shares purchased under share repurchase programs for the nine months ended September 30, 2026, were valued at $27.5 million.
• Dividends paid for the nine months ended September 30, 2026, were $26.4 million.
• The Company incurred restructuring and related charges, net, of $8.3 million in the third quarter and $23.8 million for the nine months.
• Business transformation costs were $3.0 million in the third quarter and $8.8 million for the nine months.
• The Company recorded impairment charges of $88.8 million in the nine months ended September 30, 2025, with no such charges in the current period.
• A conference call to discuss third quarter 2026 performance is scheduled for October 30, 2026, at 8:00 a.m. ET.