What changed in this filing

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Item 1. Financial Statements

2025-05-01 compared with 2024-10-31 · 275 added, 303 removed, 419 unchanged (58% of the section changed)

4 unchanged sentences

Three Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

Net sales $ 442,914 $ 469,759

5 unchanged sentences

Other income (expense), net ( 709 ) 1,080

Interest expense, net ( 10,347 ) ( 12,781 ) ( 31,925 ) ( 38,744 )

Interest expense ( 9,545 ) ( 10,824 )

Income before taxes and equity in net income of associated companies 17,370 45,782

3 unchanged sentences

Net income 12,917 35,258

Net income attributable to noncontrolling interest 26 40 82 94

Net income (loss) attributable to noncontrolling interest ( 5 ) 31

Net income attributable to Quaker Chemical Corporation $ 12,922 $ 35,227

9 unchanged sentences

Three Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

Net income $ 12,917 $ 35,258

3 unchanged sentences

Current period change in fair value of derivatives ( 592 ) 2,345

Unrealized gain (loss) on available-for-sale securities 325 ( 637 ) 326 938

Unrealized (loss) gain on available-for-sale securities ( 304 ) 45

Other comprehensive income (loss) 25,968 ( 22,645 )

7 unchanged sentences

Dollars in thousands, except par value)

September 30,

2025 December 31,

36 unchanged sentences

issued and outstanding

September 30, 2024 – 17,852,066 shares;

March 31, 2025 – 17,680,380 shares;

December 31, 2024 – 17,673,607 shares

12 unchanged sentences

Dollars in thousands)

Nine Months Ended

September 30,

Three Months Ended

Cash flows from operating activities

1 unchanged sentence

Adjustments to reconcile net income to net cash provided by operating activities:

Amortization of debt issuance costs 1,059 1,059

Depreciation and amortization 20,599 20,802

1 unchanged sentence

Deferred income taxes ( 3,340 ) 3,167

Deferred compensation and other, net ( 1,428 ) 1,076

Share-based compensation 3,182 3,884

Restructuring and related charges, net 14,590 1,857

Pension and other postretirement benefits ( 3,956 ) ( 2,000 )

(Decrease) increase in cash from changes in current assets and current liabilities, net of acquisitions:

(Gain) loss on disposal of property, plant and equipment and other assets ( 2,148 ) —

Other adjustments 2,190 ( 2,797 )

Increase (decrease) in cash from changes in current assets and current liabilities, net of acquisitions:

Accounts receivable ( 10,302 ) 1,431

3 unchanged sentences

Accounts payable and accrued liabilities ( 15,712 ) ( 23,400 )

Net cash provided by operating activities 141,514 199,460

Net cash (used in) provided by operating activities ( 3,050 ) 27,231

Cash flows from investing activities

5 unchanged sentences

Payments of long-term debt ( 8,523 ) ( 4,711 )

Borrowings (payments) on revolving credit facilities, net 30,500 ( 112,835 )

(Payments) borrowings on other debt, net ( 842 ) 797

Borrowings on revolving credit facilities, net 30,000 20,902

Payments on other debt, net ( 773 ) —

Dividends paid ( 8,572 ) ( 8,186 )

Shares purchased under share repurchase programs ( 22,906 ) —

Other stock related activity ( 1,176 ) ( 1,442 )

Net cash used in financing activities ( 67,002 ) ( 150,525 )

Net cash provided by financing activities 10,956 6,563

Effect of foreign exchange rate changes on cash 2,849 ( 3,270 )

Net increase in cash and cash equivalents 17,547 17,395

Net (decrease) increase in cash and cash equivalents ( 2,657 ) 1,223

Cash and cash equivalents at the beginning of the period 188,880 194,527

Cash and cash equivalents at the end of the period $ 186,223 $ 195,750

Supplemental cash flow disclosures:

Non-cash activities:

Change in accrued purchases of property, plant and equipment, net $ ( 7,105 ) $ 289

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Table of Content

Quaker Chemical Corporation

7 unchanged sentences

Net income — — 35,227 — 31 35,258

Amounts reported in other comprehensive income — — — 15,063 3 15,066

Dividends ($ 0.435 per share)

— — ( 7,822 ) — — ( 7,822 )

Share issuance and equity-based compensation plans 32 1,386 — — — 1,418

Balance as of March 31, 2023 $ 17,982 $ 929,674 $ 491,632 $ ( 123,177 ) $ 677 $ 1,316,788

Net income — — 29,346 — 47 29,393

Amounts reported in other comprehensive loss — — — ( 22,572 ) ( 73 ) ( 22,645 )

1 unchanged sentence

— — ( 8,186 ) — — ( 8,186 )

Share issuance and equity-based compensation plans 17 5,267 — — — 5,284

Balance as of June 30, 2023 $ 17,999 $ 934,941 $ 513,148 $ ( 130,108 ) $ 686 $ 1,336,666

Net income — — 33,670 — 40 33,710

Amounts reported in other comprehensive loss — — — ( 24,616 ) ( 3 ) ( 24,619 )

Dividends ($ 0.455 per share)

— — ( 8,190 ) — — ( 8,190 )

Share issuance and equity-based compensation plans 2 3,532 — — — 3,534

Balance as of September 30, 2023 $ 18,001 $ 938,473 $ 538,628 $ ( 154,724 ) $ 723 $ 1,341,101

Balance as of December 31, 2023 $ 17,992 $ 940,101 $ 550,641 $ ( 124,415 ) $ 603 $ 1,384,922

Net income — — 35,227 — 31 35,258

Amounts reported in other comprehensive loss — — — ( 22,572 ) ( 73 ) ( 22,645 )

Dividends ($ 0.455 per share)

— — ( 8,186 ) — — ( 8,186 )

Share issuance and equity-based compensation plans ( 2 ) 2,445 — — — 2,443

Share issuance and equity-based compensation plans, net ( 2 ) 2,445 — — — 2,443

Balance as of March 31, 2024 $ 17,990 $ 942,546 $ 577,682 $ ( 146,987 ) $ 561 $ 1,391,792

Net income — — 34,885 — 25 34,910

Amounts reported in other comprehensive loss — — — ( 18,775 ) 1 ( 18,774 )

Dividends ($ 0.455 per share)

— — ( 8,163 ) — — ( 8,163 )

Shares purchased under share repurchase program ( 49 ) ( 8,306 ) — — — ( 8,355 )

Share issuance and equity-based compensation plans — 4,196 — — — 4,196

Balance as of June 30, 2024 $ 17,941 $ 938,436 $ 604,404 $ ( 165,762 ) $ 587 $ 1,395,606

Balance as of December 31, 2024 $ 17,674 $ 903,781 $ 633,731 $ ( 201,619 ) $ 616 $ 1,354,183

Net income — — 12,922 — ( 5 ) 12,917

2 unchanged sentences

— — ( 8,574 ) — — ( 8,574 )

Shares purchased under share repurchase program ( 89 ) ( 14,462 ) — — — ( 14,551 )

Excise tax on shares purchased under share repurchase program — ( 162 ) — — — ( 162 )

Share issuance and equity-based compensation plans — 4,344 — — — 4,344

Balance as of September 30, 2024 $ 17,852 $ 928,156 $ 628,103 $ ( 128,448 ) $ 607 $ 1,446,270

Share issuance and equity-based compensation plans, net 6 2,000 — — — 2,006

Balance as of March 31, 2025 $ 17,680 $ 905,781 $ 638,079 $ ( 175,655 ) $ 615 $ 1,386,500

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

2 unchanged sentences

Dollars in thousands, except per share amounts, unless otherwise stated)

Basis of Presentation and Description of Business

Business Acquisitions

Recently Issued Accounting Standards

Business Segments

Net Sales and Revenue Recognition

Restructuring and Related Activities

Share-Based Compensation

Pension and Other Postretirement Benefits

Other Income (Expense), Net

Earnings Per Share

Goodwill and Other Intangible Assets

Accumulated Other Comprehensive Income

Fair Value Measurements

Hedging Activities

Commitments and Contingencies

Quaker Chemical Corporation

Notes to Condensed Consolidated Financial Statements

Dollars in thousands, except per share amounts, unless otherwise stated)

Note 1 – Basis of Presentation and Description of Business

As used in these Notes to Condensed Consolidated Financial Statements of this Quarterly Report on Form 10-Q for the period ended September 30, 2024 (the “Report”), the terms “Quaker Houghton,” the “Company,” “we,” and “our” refer to Quaker Chemical Corporation (doing business as Quaker Houghton), its subsidiaries, and associated companies, unless the context otherwise requires.

As used in these Notes to Condensed Consolidated Financial Statements of this Quarterly Report on Form 10-Q for the period ended March 31, 2025 (the “Report”), the terms “Quaker Houghton,” the “Company,” “we,” and “our” refer to Quaker Chemical Corporation (doing business as Quaker Houghton), its subsidiaries, and associated companies, unless the context otherwise requires.

Basis of Presentation

4 unchanged sentences

In the opinion of management, the financial statements reflect all adjustments, which are of a normal recurring nature, necessary for a fair statement of the financial position, results of operations, and cash flows for the interim periods.

The results for the nine months ended September 30, 2024 are not necessarily indicative of the results to be expected for the full year.

These financial statements should be read in conjunction with the Company’s Annual Report filed on Form 10-K for the year ended December 31, 2023 (as amended, the “2023 Form 10-K”).

The results for the three months ended March 31, 2025 are not necessarily indicative of the results to be expected for the full year.

These financial statements should be read in conjunction with the Company’s Annual Report filed on Form 10-K for the year ended December 31, 2024 (the “2024 Form 10-K”).

Certain prior year amounts in the Condensed Consolidated Statements of Cash Flows have been reclassified to conform to the current year presentation.

2 unchanged sentences

Quaker Houghton is the global leader in industrial process fluids.

With a presence around the world, including operations in over 25 countries, the Company’s customers include thousands of the world’s most advanced and specialized steel, aluminum, automotive, aerospace, offshore, container, mining, and metalworking companies.

Quaker Houghton develops, produces, and markets a broad range of formulated chemical specialty products and offers chemical management services, which the Company refers to as Fluidcare TM , for various heavy industrial and manufacturing applications sold in its three reportable segments:

5 unchanged sentences

GAAP effective July 1, 2018 and April 1, 2022, respectively.

As of, and for the three and nine months ended September 30, 2024, the Company's Argentine and Turkish subsidiaries together represented approximately 1 % and 2 % of the Company’s consolidated total assets and net sales, respectively.

During the three and nine months ended September 30, 2024, the Company recorded $ 0.6 million and $ 0.3 million of net remeasurement losses associated with the applicable currency conversions, respectively.

Comparatively, during the three and nine months ended September 30, 2023, the Company recorded $ 1.2 million and $ 2.9 million of remeasurement losses associated with the applicable currency conversions, respectively.

These gains and losses were recorded within Other income (expense), net, in the Company’s Condensed Consolidated Statements of Operations.

As of, and for the three months ended March 31, 2025, the Company's Argentine and Turkish subsidiaries together represented approximately 1 % and 2 % of the Company’s consolidated total assets and net sales, respectively.

During the three months ended March 31, 2025 and March 31, 2024, the Company recorded $ 0.5 million of remeasurement losses and $ 0.9 million of remeasurement gains associated with the applicable currency conversions, respectively.

These losses and gains were recorded within Other income (expense), net, in the Company’s Condensed Consolidated Statements of Operations.

Note 2 – Business Acquisitions

Recent Acquisition Activity

Subsequent to the date of this Report, in April 2025, the Company acquired Dipsol Chemicals Co., Ltd., (“Dipsol”) for cash consideration of approximately $ 187.0 million ( 27.7 billion JPY), which included approximately $ 31.8 million ( 4.7 billion JPY) acquired cash for a net purchase price of approximately $ 155.2 million ( 23.0 billion JPY).

The acquisition is subject to routine and customary post-closing adjustments.

The Company funded the acquisition purchase price with borrowings under its existing credit facility.

Dipsol is headquartered in Japan and is a leading supplier of surface treatment and plating solutions and services primarily for the automotive and other industrial applications end markets.

Dipsol has operations in several countries and these operations will be reported within the Company’s respective Americas, EMEA, and Asia/Pacific segments.

This acquisition expands the Company’s advanced solutions businesses in attractive end markets with solid growth characteristics and high barriers to entry.

Dipsol also provides significant cross-selling opportunities and enhances the Company’s ability to meet and exceed the needs of our customers across the globe.

Due to the timing of the acquisition, as of the date of issuance of these Condensed Consolidated Financial Statements, the Company is not yet able to provide the amounts recognized as of the acquisition date for major classes of Dipsol assets acquired and liabilities assumed.

Subsequent to the date of this Report, in April 2025, the Company acquired Natech, Ltd., (“Natech”) for approximately $ 6.5 million, which includes an initial cash payment of $ 6.0 million and a deferred payment of $ 0.5 million, subject to routine and customary post-closing adjustments.

Assets acquired included cash and cash equivalents of $ 1.5 million.

Natech is based in the United Kingdom and is a manufacturer of surface treatment chemicals for a variety of industrial applications.

Natech will be reported as part of the EMEA reportable segment.

This acquisition strengthens Quaker Houghton’s overall surface treatment product and application capabilities within Europe.

Due to the timing of the acquisition, as of the date of issuance of these Condensed Consolidated Financial

Quaker Chemical Corporation

Notes to Condensed Consolidated Financial Statements - Continued

Dollars in thousands, except per share amounts, unless otherwise stated)

Statements, the Company is not yet able to provide the amounts recognized as of the acquisition date for major classes of Natech assets acquired and liabilities assumed.

In February 2025, the Company acquired Chemical Solutions & Innovations (Pty) Ltd.

(“CSI”), for approximately $ 3.9 million, subject to routine and customary post-closing adjustments.

CSI is based in South Africa and is a supplier of metalworking fluids and lubricants to the South African market.

CSI is reported as part of the EMEA reportable segment.

This acquisition strengthens Quaker Houghton’s position in South Africa and expands the Company’s presence in that region.

The Company allocated $ 1.4 million of the purchase price to intangible assets and recognized $ 1.7 million of goodwill in the EMEA segment, none of which is deductible for tax purposes.

The goodwill is primarily attributable to expected growth synergies.

As of March 31, 2025, the allocation of the purchase price has not been finalized.

Previous Acquisitions

In July 2024, the Company acquired the Sutai Group (“Sutai”), for approximately $ 16.2 million, including an initial cash payment of $ 14.6 million, subject to routine and customary post-closing adjustments related to working capital and net indebtedness levels, as well as earn-out provisions with an initial estimated payout of $ 1.6 million related to the finalization of 2024 and 2025 earnings.

Assets acquired included cash and cash equivalents of $ 5.5 million.

The Company recorded incremental income of $ 0.4 million during the three and nine months ended September 30, 2024 relating to adjustments to these earnout provisions in Other income (expense), net on the Condensed Consolidated Statements of Operations.

As of September 30, 2024, the Company has remaining earnout liabilities recorded on its Condensed Consolidated Balance Sheet of $ 1.2 million.

As of March 31, 2025, the Company has remaining earnout liabilities recorded on its Condensed Consolidated Balance Sheet of $ 0.8 million which we expect to settle by the end 2025.

Sutai is based in Japan and provides impregnation treatment products and services to the automotive and other industries.

Sutai is reported as part of the Asia/Pacific reportable segment.

Sutai is reported as part of the Asia/Pacific segment.

This acquisition strengthens Quaker Houghton’s technology portfolio, enabling the Company to better support and optimize production processes for customers across the Japanese, Asia Pacific and global markets.

The Company allocated $ 3.1 million of the purchase price to intangible assets and recognized $ 5.5 million of goodwill in the Asia/Pacific segment, none of which is deductible for tax purposes.

During the first quarter of 2025, the Company finalized the working capital settlements for an immaterial amount which impacted the residual goodwill recorded.

The goodwill is primarily attributable to expected growth synergies.

As of September 30, 2024, the allocation of the purchase price has not been finalized.

Quaker Chemical Corporation

Notes to Condensed Consolidated Financial Statements - Continued

Dollars in thousands, except per share amounts, unless otherwise stated)

As of March 31, 2025, the allocation of the purchase price has not been finalized.

During February 2024, the Company acquired I.K.V.

9 unchanged sentences

In July 2024, the 2023 earnings were finalized and the Company made a payment of $ 5.5 million in connection with the post-closing adjustments and earn-out provision.

As of September 30, 2024, the allocation of the purchase price has been finalized.

The results of operations of Sutai and IKV subsequent to the acquisition dates are included in the unaudited Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2024.

As of March 31, 2025, the allocation of the purchase price has been finalized.

The results of operations of CSI, Sutai and IKV subsequent to the acquisition dates are included in the unaudited Condensed Consolidated Statements of Operations for the three months ended March 31, 2025.

During the three months ended March 31, 2025 and 2024, the Company recognized $ 3.3 million and $ 0.3 million, respectively, of acquisition-related expenses including legal, financial, consulting and other costs.

These costs are included in Selling, general and administrative expenses (“SG&A”) in the Condensed Consolidated Statements of Operations.

Note 3 – Recently Issued Accounting Standards

Recently Adopted Accounting Standards

The Company adopted Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures for the 2024 Form 10-K and this Report.

This ASU expands reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses, defined as those expenses that are regularly provided to the Chief Operating Decision Maker (“CODM”) and included in the reported measure of segment profit or loss.

The Company disclosed that the CODM, who is our Chief Executive Officer, assesses segment performance and makes decisions about allocating resources to its operating segments using segment operating earnings.

Based on the Company’s assessment, the Company determined that product costs are significant segment expenses that are regularly provided to the CODM and included in segment operating earnings.

The Company disclosed product costs and other operating expenses included in segment operating earnings by reportable segment.

See Note 4, Business Segments , for additional information.

Quaker Chemical Corporation

Notes to Condensed Consolidated Financial Statements - Continued

Dollars in thousands, except per share amounts, unless otherwise stated)

Recently Issued Accounting Standards Not Yet Adopted

The Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures in November 2023.

This ASU expands on reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses, defined as those expenses that are regularly provided to the chief operating decision maker (“CODM”) and included in the reported measure of segment profit or loss.

ASU 2023-07 is effective for annual reports for fiscal years beginning after December 15, 2023, with early adoption permitted.

The Company continues to assess the impact of ASU 2023-07.

As part of its preliminary assessment, the Company is in the process of identifying the significant segment expenses and other information regularly provided to the CODM and included in the reported measure of segment profitability.

The FASB issued ASU 2023-09, Income Taxes (Topic 740) :

Improvements to Income Tax Disclosures in December 2023.

This ASU requires public business entities to disclose additional information in specified categories with respect to the reconciliation of the effective tax rate to the statutory rate (the “rate reconciliation”) for federal, state, and foreign income taxes.

It also requires greater detail about individual reconciling items in the rate reconciliation to the extent the impact of those items exceeds a specified threshold.

This ASU requires public business entities (“PBEs”) to disclose additional information in specified categories with respect to the reconciliation of the effective tax rate to the statutory rate (the “rate reconciliation”) for federal, state, and foreign income taxes, requiring greater detail about individual reconciling items in the rate reconciliation to the extent the impact of those items exceeds a specified threshold.

The ASU also requires PBEs to disclose income taxes paid disaggregated by federal, state, and foreign taxes.

Further disaggregation is also required in jurisdictions where income taxes paid exceeds a certain threshold.

ASU 2023-09 is effective for fiscal years beginning after December 15, 2024.

The Company is currently evaluating the disclosure requirements of this standard and the impact on its consolidated financial statements.

The Company is currently evaluating the disclosure requirements of this standard and the impact on its condensed consolidated financial statements.

The FASB issued ASU 2024-03, Income Statement- Reporting Comprehensive Income- Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses in November 2024 .

This ASU requires PBEs to disclose, in interim and annual reporting periods, additional information about certain expenses in the notes to the financial statements, including disclosing the amounts of purchases of inventory, employee compensation, depreciation, and intangible asset amortization in each relevant expense caption.

It also requires PBEs to disclose a qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively and to disclose the total amount of selling expenses, and in the annual reporting periods, an entity’s definition of selling expenses.

ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, with early adoption permitted.

The Company is currently evaluating the disclosure requirements of this standard and the impact on its condensed consolidated financial statements.

Note 4 – Business Segments

The Company’s operating segments, which are consistent with its reportable segments, reflect the structure of the Company’s internal organization, the method by which the Company’s resources are allocated, and the manner by which the CODM assesses the Company’s performance.

The Company has three reportable segments:

(i) Americas;

and (iii) Asia/Pacific.

Segment operating earnings for each of the Company’s reportable segments are comprised of the segment’s net sales less directly related Cost of goods sold (“COGS”) and Selling, general and administrative expenses (“SG&A”).

Operating expenses not directly attributable to the net sales of each respective segment, such as certain corporate and administrative costs and Restructuring and related charges, net, are not included in segment operating earnings.

Other items not specifically identified with the Company’s reportable segments include Interest expense, net and Other income (expense), net.

The Company’s operating segments, which are consistent with its reportable segments, reflect the structure of the Company’s internal organization and the manner by which the CODM, which is the Company’s Chief Executive Officer, allocates resources and assesses performance.

The CODM evaluates performance for the Company’s operating segments based on segment operating earnings.

Segment operating earnings for each of the Company’s reportable segments are comprised of the segment’s net sales less directly related product costs and other operating expenses.

Operating expenses not directly attributable to the net sales of each respective segment, such as certain corporate and administrative costs and restructuring charges, are not included in segment operating earnings.

Other items not specifically identified with the Company’s reportable segments include Interest expense and Other income (expense), net.

The CODM uses segment operating earnings to allocate resources for each segment predominantly in the annual budget and forecasting process.

The CODM considers budget-to-actual variances on a monthly basis for segment operating earnings when making decisions about allocating capital and personnel to the segments.

The CODM also uses segment operating earnings to assess the performance for each segment and in the compensation of certain employees.

Segment asset information is not regularly provided to or reviewed by the CODM.

Therefore, the Company did not disclose segment asset information for each reportable segment.

Quaker Chemical Corporation

1 unchanged sentence

Dollars in thousands, except per share amounts, unless otherwise stated)

The following table presents information about the performance of the Company’s reportable segments:

Three Months Ended

September 30, Nine Months Ended

September 30,

The following table presents information about the performance of the Company’s reportable segments for the three months ended March 31, 2025 and 2024:

Americas EMEA Asia/Pacific Totals

Three Months Ended March 31, 2025

Net sales $ 213,711 $ 129,278 $ 99,925 $ 442,914

Americas $ 220,275 $ 245,899 $ 673,546 $ 750,531

EMEA 134,135 139,620 410,558 435,602

Asia/Pacific 107,864 105,093 311,496 300,071

Total net sales $ 462,274 $ 490,612 $ 1,395,600 $ 1,486,204

Significant segment expenses

Product costs (1)

104,505 70,102 53,098 227,705

Other operating expenses (2)

50,744 35,783 20,897 107,424

Segment operating earnings $ 58,462 $ 23,393 $ 25,930 $ 107,785

Americas $ 62,121 $ 69,148 $ 193,027 $ 204,280

EMEA 24,644 27,922 80,867 81,076

Asia/Pacific 30,656 30,963 92,033 86,604

Total segment operating earnings 117,421 128,033 365,927 371,960

Three Months Ended March 31, 2024

Net sales $ 229,754 $ 138,422 $ 101,583 $ 469,759

Significant segment expenses

Product costs (1)

111,075 71,372 51,375 233,822

Other operating expenses (2)

51,909 37,479 19,831 109,219

Segment operating earnings $ 66,770 $ 29,571 $ 30,377 $ 126,718

(1) Product costs include the costs of raw materials and are recorded in Cost of goods sold in the Company’s Consolidated Statements of Operations.

(2) Other operating expenses include overhead costs of operating the Company’s production facilities and providing chemical management services to customers and direct SG&A.

The following table presents a reconciliation of the Company’s segment operating earnings to income before taxes and equity in net income of associated companies in the Company’s Consolidated Statements of Operations for the three months ended March 31, 2025 and 2024:

Three Months Ended March 31,

Segment operating earnings $ 107,785 $ 126,718

Restructuring and related charges, net ( 14,590 ) ( 1,857 )

3 unchanged sentences

Other income (expense), net ( 709 ) 1,080

Interest expense, net ( 10,347 ) ( 12,781 ) ( 31,925 ) ( 38,744 )

Interest expense ( 9,545 ) ( 10,824 )

Income before taxes and equity in net income of associated companies $ 17,370 $ 45,782

The following table summarizes inter-segment revenues.

All inter-segment transactions have been eliminated from each reportable segment’s net sales and earnings for all periods presented in the above tables.

Three Months Ended

September 30, Nine Months Ended

September 30,

Inter-segment revenues 2024 2023 2024 2023

The following table presents information regarding the Company’s reportable segments’ depreciation for the three months ended March 31, 2025 and 2024:

Three Months Ended March 31,

Depreciation 2025 2024

Americas $ 2,655 $ 2,775

1 unchanged sentence

Asia/Pacific 1,213 1,022

Total segment depreciation $ 5,745 $ 5,644

Quaker Chemical Corporation

Notes to Condensed Consolidated Financial Statements - Continued

Dollars in thousands, except per share amounts, unless otherwise stated)

Note 5 – Net Sales and Revenue Recognition

1 unchanged sentence

As part of the Company’s Fluidcare TM business, certain third-party product sales to customers are managed by the Company.

The Company transferred third-party products under arrangements recognized on a net reporting basis of $ 19.4 million and $ 58.5 million for the three and nine months ended September 30, 2024, respectively, and $ 21.6 million and $ 63.2 million for the three and nine months ended September 30, 2023, respectively.

The Company transferred third-party products under arrangements recognized on a net reporting basis of $ 17.6 million and $ 19.8 million for the three months ended March 31, 2025 and 2024, respectively.

Customer Concentration

A significant portion of the Company’s revenues are realized from the sale of process fluids and services to manufacturers of steel, aluminum, automobiles, aerospace, industrial and agricultural equipment, and durable goods.

A significant portion of the Company’s revenues are realized from the sale of process fluids and services to manufacturers of steel, aluminum, automotive, aerospace, industrial and agricultural equipment, and durable goods.

As previously disclosed in the Company’s 2024 Form 10-K, the Company’s five largest customers combined (each composed of multiple subsidiaries or divisions with semiautonomous purchasing authority) accounted for approximately 12 % of consolidated net sales for 2024, with its largest customer accounting for approximately 3 % of consolidated net sales.

Contract Assets and Liabilities

The Company had no material contract assets recorded on its Condensed Consolidated Balance Sheets as of September 30, 2024 or December 31, 2023.

Quaker Chemical Corporation

Notes to Condensed Consolidated Financial Statements - Continued

Dollars in thousands, except per share amounts, unless otherwise stated)

The Company had approximately $ 3.7 million and $ 4.5 million of deferred revenue as of September 30, 2024 and December 31, 2023, respectively.

For the nine months ended September 30, 2024, the Company satisfied materially all of the associated performance obligations and recognized into revenue materially all advance payments received and recorded as of December 31, 2023.

The Company had no material contract assets recorded on its Condensed Consolidated Balance Sheets as of March 31, 2025 or December 31, 2024.

The Company had approximately $ 2.5 million and $ 4.2 million of deferred revenue as of March 31, 2025 and December 31, 2024, respectively.

For the three months ended March 31, 2025, the Company satisfied materially all of the associated performance obligations and recognized into revenue materially all advance payments received and recorded as of December 31, 2024.

Disaggregated Revenue

1 unchanged sentence

The Company generally manages and evaluates its performance by reportable segment first, and then by customer industries.

Net sales of each of the Company’s major product lines are generally spread throughout all three of the Company’s geographic regions, and in most cases, are approximately proportionate to the level of total sales in each region.

Net sales of each of the Company’s major product lines are generally spread throughout all three of the Company’s reportable segments, and in most cases, are approximately proportionate to the level of total sales in each reportable segment.

The following tables disaggregate the Company’s net sales by segment and customer industry.

Three Months Ended September 30, 2024

Customer Industries Americas EMEA Asia/Pacific Consolidated

Metals $ 65,393 $ 34,782 $ 52,385 $ 152,560

Metalworking and other 154,882 99,353 55,479 309,714

$ 220,275 $ 134,135 $ 107,864 $ 462,274

Nine Months Ended September 30, 2024

Customer Industries Americas EMEA Asia/Pacific Consolidated

Metals $ 195,172 $ 102,909 $ 153,446 $ 451,527

Metalworking and other 478,374 307,649 158,050 944,073

$ 673,546 $ 410,558 $ 311,496 $ 1,395,600

Three Months Ended September 30, 2023

Three Months Ended March 31, 2025

Customer Industries Americas EMEA Asia/Pacific Consolidated

2 unchanged sentences

$ 213,711 $ 129,278 $ 99,925 $ 442,914

Nine Months Ended September 30, 2023

Three Months Ended March 31, 2024

Customer Industries Americas EMEA Asia/Pacific Consolidated

6 unchanged sentences

In addition, the Company has certain land use leases with remaining lease terms up to 90 years.

The Company had no material variable lease costs, sublease income, or finance leases for the three and nine months ended September 30, 2024 and 2023.

Quaker Chemical Corporation

Notes to Condensed Consolidated Financial Statements - Continued

Dollars in thousands, except per share amounts, unless otherwise stated)

The Company had no material variable lease costs, sublease income, or finance leases for the three months ended March 31, 2025 and 2024.

The components of the Company’s lease expense are as follows:

Three Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

Operating lease expense $ 3,708 $ 3,743

Short-term lease expense 144 199

Quaker Chemical Corporation

Notes to Condensed Consolidated Financial Statements - Continued

Dollars in thousands, except per share amounts, unless otherwise stated)

Supplemental cash flow information related to the Company’s leases is as follows:

Three Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

Cash paid for amounts included in the measurement of lease liabilities:

3 unchanged sentences

Supplemental balance sheet information related to the Company’s leases is as follows:

September 30,

2025 December 31,

Right-of-use lease assets $ 36,122 $ 34,120

Other current liabilities 11,185 11,965

Other accrued liabilities 11,628 10,619

Long-term lease liabilities 21,130 20,028

2 unchanged sentences

Weighted average discount rate 5.81 % 5.63 %

Maturities of operating lease liabilities as of September 30, 2024 were as follows:

Maturities of operating lease liabilities as of March 31, 2025 were as follows:

For the remainder of 2025 $ 10,208

7 unchanged sentences

Present value of lease liabilities (1)

Note 7 – Restructuring and Related Activities

In 2022, the Company initiated a global cost and optimization program to improve its cost structure and drive a more profitable and productive organization.

As of September 30, 2024, the program included restructuring and associated severance costs to reduce headcount by approximately 175 positions globally.

The program is expected to be substantially complete by the end of the first quarter of 2025.

Employee separation benefits vary depending on local regulations within certain foreign countries and include severance and other benefits.

The exact timing to complete, and final costs associated with, all actions will depend on a number of factors and are subject to change.

In addition to the program described above, the Company continues to take actions to optimize its facilities’ footprint.

Restructuring costs incurred during the three and nine months ended September 30, 2024 and 2023 include employee severance, asset related and facility closure costs that are recorded in Restructuring and related charges, net in the Company’s Condensed Consolidated Statements of Operations.

(1) During the year ended December 31, 2024, the Company entered into a new lease agreement for office and laboratory space in Radnor, PA for the purposes of relocating its global headquarters.

The lease is expected to commence in the third quarter of 2025 with a total lease commitment of $ 79.7 million.

The $ 79.7 million of future lease commitments relating to this lease were not included in the lease liabilities balance as of March 31, 2025.

Quaker Chemical Corporation

1 unchanged sentence

Dollars in thousands, except per share amounts, unless otherwise stated)

Changes in the Company’s accruals for its restructuring program and facility closure actions are as follows:

Note 7 – Restructuring and Related Activities

In 2022, the Company initiated a global cost and optimization program to improve its cost structure and drive a more profitable and productive organization.

As of March 31, 2025, the program included restructuring and associated severance costs to reduce headcount by approximately 350 positions globally.

These actions are expected to be substantially complete in the first half of 2025.

Employee separation benefits vary depending on local regulations within certain foreign countries and include severance and other benefits.

The exact timing to complete, and finalize costs associated with, all actions will depend on a number of factors and are subject to change.

In addition to the global cost and optimization program described above, the Company continues to take actions to optimize its facilities’ footprint.

Restructuring costs incurred during the three months ended March 31, 2025 and 2024 include employee severance and asset-related and facility closure costs, including non-cash asset write-offs, which are recorded in Restructuring and related charges, net in the Company’s Consolidated Statements of Operations.

Activity in the Company’s accrual for its restructuring program and facility closure actions are as follows:

Accrued restructuring as of December 31, 2024 $ 2,297

Restructuring and related charges, net 4,787

Severance costs 13,902

Asset-related and facility closure charges 688

Cash payments ( 9,045 )

Reductions against the reserve ( 642 )

Currency translation adjustments ( 41 )

Accrued restructuring as of September 30, 2024 $ 1,727

In connection with the plans for closure of certain manufacturing and non-manufacturing facilities, the Company has made available for sale certain facilities and properties.

As of September 30, 2024, the Company classified properties in the Americas and EMEA segments with an aggregate book value of approximately $ 2.2 million as held-for-sale.

These assets are recorded in Prepaid expenses and other current assets on the Company’s Condensed Consolidated Balance Sheets.

The Company expects to complete the sale of these properties over the next 12 months.

During the three and nine months ended September 30, 2024, the Company completed the sale of certain facilities previously classified as held for sale for a net gain of $ 0.5 million, which is recorded in Other income (expenses), net in the Company’s Condensed Consolidated Statements of Operations.

Accrued restructuring as of March 31, 2025 $ 7,159

During the three months ended March 31, 2025, the Company completed the sale of certain property previously classified as held for sale as of December 31, 2024 for a gain of $ 2.2 million, which is recorded in Other income (expense), net in the Company’s Condensed Consolidated Statements of Operations.

Note 8 – Share-Based Compensation

The Company recognized the following share-based compensation expense in its Condensed Consolidated Statements of Operations:

Three Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

Stock options $ 35 $ 203 $ 249 $ 837

Non-vested stock awards and restricted stock units 2,672 2,429 7,800 7,192

Director stock ownership plan 39 30 99 56

Performance stock units 1,539 1,113 4,265 3,104

Total share-based compensation expense $ 4,285 $ 3,775 $ 12,413 $ 11,189

Stock Options

As of September 30, 2024, unrecognized compensation expense related to unvested stock options was $ 0.1 million, to be recognized over a weighted average remaining period of 0.5 year.

The Company recognized $ 3.2 million and $ 3.9 million of share-based compensation expense in its Condensed Consolidated Statements of Operation s for the three months ended March 31, 2025 and 2024, respectively.

Restricted Stock Awards

During the nine months ended September 30, 2024, the Company granted 872 non-vested restricted share awards under its long-term incentive plan (“LTIP”) , which are subject to time-based vesting, generally over one to three years .

As of September 30, 2024, unrecognized compensation expense related to non-vested restricted shares was $ 2.1 million, to be recognized over a weighted average remaining period of 1.0 year.

As of March 31, 2025, unrecognized compensation expense related to non-vested restricted shares was $ 0.6 million, to be recognized over a weighted average remaining period of 0.8 years.

Restricted Stock Units

During the nine months ended September 30, 2024, the Company granted 59,678 restricted stock units under its LTIP , which are subject to time-based vesting, generally over one to three years .

During the three months ended March 31, 2025, the Company granted 63,791 restricted stock units under its LTIP , which are subject to time-based vesting, generally over one to three years .

The fair value of these grants is based on the closing price of the Company’s common stock on the date of grant.

As of September 30, 2024, unrecognized compensation expense related to non-vested restricted stock units was $ 7.9 million, to be recognized over a weighted average remaining period of 1.5 years.

As of March 31, 2025, unrecognized compensation expense related to non-vested restricted stock units was $ 12.9 million, to be recognized over a weighted average remaining period of 1.9 years.

Performance Stock Units

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The service vesting period required for the PSUs is generally three years and the measurement period of the market-based and performance objectives is generally from January 1 of the year of grant through December 31 of the year prior to issuance of the shares.

As mentioned above, a portion of the Company’s PSUs are subject to the achievement of the Company’s TSR relative to the performance of a selected peer group.

For PSUs subject to relative TSR performance granted in 2025 and 2024, the Company’s peer group was the S&P Composite 1500 Chemicals index.

Quaker Chemical Corporation

1 unchanged sentence

Dollars in thousands, except per share amounts, unless otherwise stated)

As mentioned above, a portion of the Company’s PSUs are subject to the achievement of the Company’s TSR relative to the performance of a selected peer group.

For PSUs granted prior to 2024, the Company’s peer group was the S&P Midcap 400 Materials group.

For PSUs subject to relative TSR performance granted in 2024, the Company made an election to change peer groups to the S&P 1500 Chemical group.

Compensation expense for PSUs is measured based on the grant date fair value and is recognized on a straight-line vesting method basis over the applicable vesting period.

During the nine months ended September 30, 2024, the Company granted 21,019 PSUs with a ROIC condition at a grant date fair value of $ 200.16 per unit, which was based on the closing trading price of the Company’s common stock on the date of grant.

During the nine months ended September 30, 2024, the Company granted 20,883 PSUs with a relative TSR condition.

During the three months ended March 31, 2025, the Company granted 25,994 PSUs with a ROIC condition at a grant date fair value of $ 128.47 per unit, which was based on the closing trading price of the Company’s common stock on the date of grant.

During the three months ended March 31, 2025, the Company granted 25,951 PSUs with a relative TSR condition.

These PSUs are valued using a Monte Carlo simulation on the grant date and had a grant-date fair value of $ 150.90 per unit, which was developed based on the assumptions set forth in the table below:

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Expected term (years) 3.0

As of September 30, 2024, there was approximately $ 10.7 million of total unrecognized compensation cost related to PSUs, which the Company expects to recognize over a weighted-average period of 2.1 years.

As of March 31, 2025, there was approximately $ 10.7 million of total unrecognized compensation cost related to PSUs, which the Company expects to recognize over a weighted-average period of 2.5 years.

Note 9 – Pension and Other Postretirement Benefits

The components of net periodic benefit cost (income) are as follows:

Three Months Ended September 30,

Nine Months Ended September 30,

Pension Benefits Other Postretirement Benefits Pension Benefits Other Postretirement Benefits

Three Months Ended March 31,

Pension Benefits Other Postretirement Benefits

2025 2024 2025 2024

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Actuarial loss (gain) amortization 140 127 ( 26 ) ( 29 )

Prior service cost (income) amortization 6 18 — ( 4 ) 21 26 — ( 12 )

Prior service cost amortization 6 7 — —

Net periodic benefit cost (income) $ 548 $ 588 $ ( 12 ) $ ( 14 )

Employer Contributions

During the nine months ended September 30, 2024, $ 5.3 million of contributions have been made to the Company’s U.S.

During the three months ended March 31, 2025, $ 1.4 million of contributions have been made to the Company’s U.S.

and foreign pension plans.

Contributions to other postretirement benefit plans were $ 0.1 million.

Contributions to other postretirement benefit plans were less than $ 0.1 million.

Taking into consideration current minimum cash contribution requirements, the Company currently expects to make full year cash contributions of approximately $ 6.0 million to its U.S.

and foreign pension plans and approximately $ 0.2 million to its other postretirement benefit plans.

Quaker Chemical Corporation

Notes to Condensed Consolidated Financial Statements - Continued

Dollars in thousands, except per share amounts, unless otherwise stated)

Note 10 – Other income (expense), net

1 unchanged sentence

Three Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

Non-income tax refunds and other related credits $ 168 $ 2,155

Income from third party license fees 207 225

(Loss) gain on disposals of property, plant, equipment and other assets, net ( 56 ) ( 25 ) 861 ( 91 )

Gain on disposals of property, plant, equipment and other assets, net 2,148 407

Foreign exchange losses, net ( 3,518 ) ( 448 )

Pension and postretirement benefit costs, non-service components ( 434 ) ( 465 )

Facility remediation recoveries, net — — — 1,014

Business interruption insurance proceeds 1,000 — 1,000 —

Product liability claim — — ( 896 ) —

Earnout liability adjustment 400 — 400 —

Other non-operating (expense) income, net ( 33 ) 23 134 12

Product liability claim costs, net — ( 896 )

Interest income 660 —

Other non-operating income, net 60 102

Total other income (expense), net $ ( 709 ) $ 1,080

(Loss) gain on disposals of property, plant, equipment and other assets, net, includes the net gains recognized for the sale of certain facilities previously classified as held for sale during the three and nine months ended September 30, 2024.

See Note 7 of Notes to the Condensed Consolidated Financial Statements.

Business interruption insurance proceeds during the three and nine months ended September 30, 2024 reflects an insurance recovery of $ 1.0 million related to production losses due to an electrical fire in 2021 that resulted in temporary shutdown of production at one of the Company’s production facilities.

See Note 18 for additional discussion regarding the Company’s business interruption claims.

Facility remediation recoveries, net, during the nine months ended September 30, 2023, reflect insurance recoveries of costs for remediation and restoration of property damage.

See Note 18 for additional discussion regarding the Company’s insurance recoveries for facility remediation and property damage.

Product liability claim costs represents expense related to the payments by the Company in connection with a product liability dispute with a customer during the nine months ended September 30, 2024.

Note 11 – Income Taxes

The Company’s effective tax rates for the three and nine months ended September 30, 2024 were 28.9 % and 29.7 %, respectively, compared to 30.9 % and 31.1 % for the three and nine months ended September 30, 2023, respectively.

The Company’s effective tax rates for the three months ended September 30, 2024 was largely driven by the mix of pre-tax earnings, withholding taxes, and changes in uncertain tax positions offset by return to provision adjustments.

The effective tax rate for the nine months ended September 30, 2024 was further impacted by certain one-time charges related to an intercompany intangible asset transfer offset by changes in uncertain tax positions.

Comparatively, the effective tax rates for the three and nine months ended September 30, 2023 were largely impacted by the mix of pre-tax earnings, changes to the valuation allowance for and the usage of certain foreign tax credits, return to provision adjustments and withholding taxes, partially offset by changes in uncertain tax positions .

Quaker Chemical Corporation

1 unchanged sentence

Dollars in thousands, except per share amounts, unless otherwise stated)

Gain on disposals of property, plant, equipment and other assets, net, includes the gain of $ 2.2 million recognized for the sale of certain property previously classified as held for sale during the three months ended March 31, 2025.

See Note 7, Restructuring and Related Activities , for more information.

Foreign exchange losses, net includes the $ 1.9 million foreign exchange losses recognized during the three months ended March 31, 2025 relating to the change in fair value of the foreign exchange forward contracts entered into in connection with the acquisition of Dipsol.

See Note 17, Hedging Activities , for more information.

Product liability claim costs, net represents expense related to payments by the Company in connection with a product liability dispute with a customer, net of insurance recoveries during the three months ended March 31, 2024.

Note 11 – Income Taxes

The Company’s effective tax rates for the three months ended March 31, 2025 and 2024 were 43.4 % and 27.3 %, respectively.

The Company’s effective tax rate for the three months ended March 31, 2025 was largely driven by our mix of pre-tax earnings, withholding taxes and return to provision adjustments offset by net favorable reductions in uncertain tax positions.

Comparatively, the effective tax rate for the three months ended March 31, 2024 was largely driven by a mix of earnings and withholding taxes, offset by reductions in uncertain tax positions .

Note 12 – Earnings Per Share

1 unchanged sentence

Three Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

Basic earnings per common share

13 unchanged sentences

Certain stock options, restricted stock units, and PSUs are not included in the diluted earnings per share calculation when the effect would be anti-dilutive.

The number of anti-dilutive shares was 19,374 and 31,377 for the three and nine months ended September 30, 2024, respectively, and 11,598 and 10,453 for the three and nine months ended September 30, 2023, respectively .

The number of anti-dilutive shares was 70,771 and 39,066 for the three months ended March 31, 2025 and 2024, respectively .

Quaker Chemical Corporation

Notes to Condensed Consolidated Financial Statements - Continued

Dollars in thousands, except per share amounts, unless otherwise stated)

Note 13 – Goodwill and Other Intangible Assets

Changes in the carrying amount of goodwill for the nine months ended September 30, 2024 were as follows:

Changes in the carrying amount of goodwill for the three months ended March 31, 2025 were as follows:

Americas EMEA Asia/Pacific Total

Balance as of December 31, 2024 $ 276,875 $ 80,404 $ 161,615 $ 518,894

Goodwill additions — 16,448 5,511 21,959

Goodwill recognized for CSI acquisition

— 1,721 — 1,721

Goodwill recognized for Sutai acquisition (1)

— — ( 233 ) ( 233 )

Currency translation adjustments 768 1,475 2,042 4,285

Balance as of September 30, 2024 $ 279,355 $ 82,173 $ 170,995 $ 532,523

Balance as of March 31, 2025 $ 277,643 $ 83,600 $ 163,424 $ 524,667

(1) During the three months ended March 31, 2025, the Company finalized the working capital settlements which impacted the goodwill recorded.

See Note 2, Business Acquisitions , for additional information.

Mar 31, 2025 Dec 31, 2024

Goodwill, gross $ 620,857 $ 611,498

Accumulated impairment losses (1)

( 96,190 ) ( 92,604 )

Goodwill, net $ 524,667 $ 518,894

(1) Accumulated impairment losses are attributable to the non-cash impairment charge of $ 93.0 million to write down the carrying value of the EMEA reporting unit during the fourth quarter of 2022 and includes the impact of currency translation.

Gross carrying amounts and accumulated amortization for definite-lived intangible assets were as follows:

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Amortization Net Book Value

September 30, 2024 December 31, 2023 September 30, 2024 December 31, 2023 September 30, 2024 December 31, 2023

March 31, 2025 December 31, 2024 March 31, 2025 December 31, 2024 March 31, 2025 December 31, 2024

Customer lists and rights to sell $ 842,996 $ 829,255 $ 302,054 $ 285,450 $ 540,942 $ 543,805

2 unchanged sentences

Total definite-lived intangible assets $ 1,013,113 $ 995,271 $ 373,409 $ 353,486 $ 639,704 $ 641,785

Quaker Chemical Corporation

Notes to Condensed Consolidated Financial Statements - Continued

Dollars in thousands, except per share amounts, unless otherwise stated)

The Company amortizes definite-lived intangible assets on a straight-line basis over their useful lives.

1 unchanged sentence

Three Months Ended

September 30,

Nine Months Ended

September 30,

2024 2023 2024 2023

Amortization expense $ 14,237 $ 14,472

6 unchanged sentences

For the year ended December 31, 2030 53,106

As of September 30, 2024 and December 31, 2023, the Company had indefinite-lived intangible assets for trademarks and tradenames totaling $ 194.7 million and $ 193.2 million, respectively.

As of March 31, 2025 and December 31, 2024, the Company had indefinite-lived intangible assets for trademarks and tradenames totaling $ 190.6 million and $ 185.3 million, respectively.

Quaker Chemical Corporation

Notes to Condensed Consolidated Financial Statements - Continued

Dollars in thousands, except per share amounts, unless otherwise stated)

Note 14 – Debt

The following table sets forth the components of the Company’s debt:

As of September 30, 2024 As of December 31, 2023

As of March 31, 2025 As of December 31, 2024

Rate Outstanding

17 unchanged sentences

The Company has the right to increase the amount of the Credit Facility by an aggregate amount not to exceed the greater of $ 300.0 million or 100 % of Consolidated EBITDA, subject to certain conditions including the agreement to provide financing by any lender providing such increase.

As of September 30, 2024, the Company was in compliance with all of the Credit Facility covenants.

See Note 19 of Notes to Consolidated Financial Statements in the Company’s 2023 Form 10-K.

Quaker Chemical Corporation

Notes to Condensed Consolidated Financial Statements - Continued

Dollars in thousands, except per share amounts, unless otherwise stated)

The weighted average variable interest rates incurred on the outstanding borrowings under the Credit Facility during the three and nine months ended September 30, 2024 were approximately 6.1 % and 6.2 %, respectively.

As of September 30, 2024, the interest rate on the outstanding borrowings under the Credit Facility was approximately 5.8 %.

As of March 31, 2025, the Company was in compliance with all of the Credit Facility covenants.

See Note 19, Debt, to Consolidated Financial Statements in the Company’s 2024 Form 10-K.

The weighted average variable interest rate incurred on the outstanding borrowings under the Credit Facility during the three months ended March 31, 2025 was approximately 5.2 %.

As of March 31, 2025, the interest rate on the outstanding borrowings under the Credit Facility was approximately 5.0 %.

As part of the Credit Facility, in addition to paying interest on outstanding principal, the Company is also required to pay an annual commitment fee ranging from 0.150 % to 0.275 % related to unutilized commitments under the Revolver, depending on the Company’s consolidated net leverage ratio.

The Company had unused capacity under the Revolver of approximately $ 436 million, which is net of bank letters of credit of approximately $ 3 million, as of September 30, 2024.

The Company had unused capacity under the Revolver of approximately $ 417 million, which is net of bank letters of credit of approximately $ 2 million, as of March 31, 2025.

Subsequent to the date of the financial statements, in April 2025, the Company borrowed $ 210 million from the Revolver to fund the Dipsol acquisition and for other corporate purposes.

See Note 2, Business Acquisitions , for more information.

In order to manage the Company’s exposure to variable interest rate risk associated with the Credit Facility, in the first quarter of 2023, the Company entered into $ 300.0 million notional amounts of three-year interest rate swaps to convert a portion of the Company’s variable rate borrowings to an average fixed rate of 3.64 % plus an applicable margin as provided in the Credit Facility based on the Company’s consolidated net leverage ratio.

As of September 30, 2024, the aggregate interest rate on the swaps, including the fixed base rate plus the applicable margin, was approximately 4.9 %.

See Note 17 of Notes to Condensed Consolidated Financial Statements.

As of March 31, 2025, the aggregate interest rate on the swaps, including the fixed base rate plus the applicable margin, was 4.9 %.

See Note 17, Hedging Activities , for more information.

The Company capitalized third-party and credit debt issuance costs attributed to the Euro Term Loan, U.S.

Term Loan and Revolver in connection to the amended Credit Facility during the second quarter of 2022.

Term Loan and Revolver during the second quarter of 2022.

Capitalized costs attributed to the Euro Term Loan and U.S.

Term Loan are recorded as a direct offset of Long-term debt on the Condensed Consolidated Balance Sheet.

Capitalized costs attributed to the Revolver are recorded within Other assets on the Condensed Consolidated Balance Sheet.

Term Loan are recorded as a direct offset to Long-term debt on the Condensed Consolidated Balance Sheets.

Capitalized costs attributed to the Revolver are recorded within Other assets on the Condensed Consolidated Balance Sheets.

These capitalized costs will collectively be amortized into Interest expense over the five-year term of the Credit Facility.

As of September 30, 2024, the Company had $ 1.2 million of debt issuance costs recorded as an offset of Long-term debt and $ 2.6 million of debt issuance costs recorded within Other assets.

Comparatively, as of December 31, 2023, the Company had $ 1.5 million of debt issuance costs recorded as an offset of Long-term debt and $ 3.3 million of debt issuance costs recorded within Other assets.

As of March 31, 2025 and December 31, 2024, the Company had $ 1.0 million and $ 1.1 million, respectively, of debt issuance costs recorded as a reduction of Long-term debt and $ 2.1 million and $ 2.4 million, respectively, of debt issuance costs recorded within Other assets.

Quaker Chemical Corporation

Notes to Condensed Consolidated Financial Statements - Continued

Dollars in thousands, except per share amounts, unless otherwise stated)

Industrial development bonds

As of September 30, 2024 and December 31, 2023, the Company had fixed rate, industrial development authority bonds totaling $ 10.0 million in principal amount due in 2028.

As of March 31, 2025 and December 31, 2024, the Company had fixed rate, industrial development authority bonds totaling $ 10.0 million in principal amount due in 2028.

These bonds have similar covenants to the Credit Facility noted above.

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The Company’s other debt obligations primarily consist of certain domestic and foreign low interest rate or interest-free municipality-related loans, local credit facilities of certain foreign subsidiaries, and finance lease obligations.

Total unused capacity under these arrangements as of September 30, 2024 was approximately $ 35 million.

Total unused capacity under these arrangements as of March 31, 2025 was approximately $ 34 million.

In addition to the bank letters of credit described in the “Credit facilities” subsection above, the Company’s other off-balance sheet arrangements include certain financial and other guarantees.

The Company’s total bank letters of credit and guarantees outstanding as of September 30, 2024 were approximately $ 7 million.

Interest expense, net

The Company incurred the following debt related expenses included within Interest expense, net, in the Condensed Consolidated Statements of Operations:

The Company’s total bank letters of credit and guarantees outstanding as of March 31, 2025 were approximately $ 7 million.

Interest expense

The Company incurred the following debt related expenses included within Interest expense in the Condensed Consolidated Statements of Operations:

Three Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

Interest expense, net $ 10,774 $ 12,598 $ 33,585 $ 40,863

Interest expense $ 9,192 $ 11,282

Amortization of debt issuance costs 353 353

Total $ 9,545 $ 11,635

Based on the variable interest rates associated with the Credit Facility, as of September 30, 2024 and as of December 31, 2023, the amounts at which the Company’s total debt were recorded are not materially different from their fair market value.

Quaker Chemical Corporation

Notes to Condensed Consolidated Financial Statements - Continued

Dollars in thousands, except per share amounts, unless otherwise stated)

Based on the variable interest rates associated with the Credit Facility, as of March 31, 2025 and as of December 31, 2024, the amounts at which the Company’s total debt were recorded are not materially different from their fair market value.

Note 15 – Accumulated Other Comprehensive Income

6 unchanged sentences

Instruments Total

Balance as of June 30, 2024 $ ( 159,574 ) $ ( 10,259 ) $ 334 $ 3,737 $ ( 165,762 )

Other comprehensive income (loss) before Reclassifications 41,535 ( 858 ) 411 ( 5,226 ) 35,862

Amounts reclassified from AOCI — 164 — — 164

Related tax amounts — 172 ( 86 ) 1,202 1,288

Balance as of September 30, 2024 $ ( 118,039 ) $ ( 10,781 ) $ 659 $ ( 287 ) $ ( 128,448 )

Balance as of June 30, 2023 $ ( 130,738 ) $ ( 4,024 ) $ 91 $ 4,563 $ ( 130,108 )

Other comprehensive (loss) income before Reclassifications ( 25,501 ) 304 ( 802 ) 1,612 ( 24,387 )

Amounts reclassified from AOCI — 71 ( 4 ) — 67

Related tax amounts — ( 94 ) 169 ( 371 ) ( 296 )

Balance as of September 30, 2023 $ ( 156,239 ) $ ( 3,743 ) $ ( 546 ) $ 5,804 $ ( 154,724 )

Adjustments Defined

Plans Unrealized Gain

Available-for-

Sale Securities Derivative

Instruments Total

Balance as of December 31, 2024 $ ( 192,841 ) $ ( 10,313 ) $ 287 $ 1,248 $ ( 201,619 )

Other comprehensive (loss) income before reclassifications ( 2,622 ) ( 425 ) 416 ( 2,200 ) ( 4,831 )

Other comprehensive income (loss) before Reclassifications 27,125 ( 472 ) ( 391 ) ( 769 ) 25,493

Amounts reclassified from AOCI — 121 7 — 128

Related tax amounts — 86 80 177 343

Balance as of September 30, 2024 $ ( 118,039 ) $ ( 10,781 ) $ 659 $ ( 287 ) $ ( 128,448 )

Balance as of March 31, 2025 $ ( 165,716 ) $ ( 10,578 ) $ ( 17 ) $ 656 $ ( 175,655 )

Balance as of December 31, 2023 $ ( 115,417 ) $ ( 10,738 ) $ 333 $ 1,407 $ ( 124,415 )

2 unchanged sentences

Related tax amounts — ( 116 ) ( 11 ) ( 700 ) ( 827 )

Balance as of September 30, 2023 $ ( 156,239 ) $ ( 3,743 ) $ ( 546 ) $ 5,804 $ ( 154,724 )

All reclassifications related to unrealized gain (loss) in available-for-sale securities relate to the Company’s equity interest in a captive insurance company and are recorded in equity in net income of associated companies.

The amounts reported in other comprehensive income for noncontrolling interest are related to currency translation adjustments.

Balance as of March 31, 2024 $ ( 140,733 ) $ ( 10,384 ) $ 378 $ 3,752 $ ( 146,987 )

Quaker Chemical Corporation

3 unchanged sentences

The Company values its company-owned life insurance policies at fair value.

During June 2023, the Company surrendered and liquidated $ 1.9 million of these life insurance policies.

As a result, the Company owns an immaterial amount of company-owned life insurance policies as of September 30, 2024 and December 31, 2023.

See Note 17 for a description of the Company’s derivative instruments.

The Company owns an immaterial amount of company-owned life insurance policies as of March 31, 2025 and December 31, 2024.

See Note 17, Hedging Activities , for a description of the Company’s derivative instruments.

Note 17 – Hedging Activities

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The fair value of the forward contract is determined from sources independent of the Company, including the financial institutions which are party to the derivative instruments.

Open foreign exchange forward contracts as of September 30, 2024 were entered into as hedges of Japanese yen and Mexican peso against the U.S.

Open foreign exchange forward contracts as of March 31, 2025 were entered into as hedges of Japanese yen and Mexican peso against the U.S.

dollar and had the following notional U.S.

dollar values :

Currency September 30,

dollar values (in millions) :

Currency March 31,

Mexican Peso $ 12,500

Japanese Yen 164,673

Open foreign exchange forward contracts as of September 30, 2024 had maturities occurring over a period of one month .

In connection with the acquisition of Dipsol as described in Note 2, Business Acquisitions , in March 2025, the Company entered into multiple foreign exchange forward contracts with various financial institutions with an aggregate notional amount totaling $ 155.3 million to hedge the variability of exchange rate impacts between the U.S.

Dollar and Japanese yen.

These foreign exchange forward contracts settled on April 1, 2025.

The Company recognized a $ 1.9 million loss in Other income (expense), net relating to the change in fair value of these instruments as of the reporting date for the three months ended March 31, 2025.

Open foreign exchange forward contracts as of March 31, 2025 had maturities occurring over a period of up to one month .

Interest Rate Swaps

In order to manage the Company’s exposure to variable interest rate risk associated with the Credit Facility, such as the Secured Overnight Financing Rate (“SOFR”), in the first quarter of 2023, the Company entered into $ 300.0 million notional amounts of three-year interest rate swaps to convert a portion of the Company’s variable-rate borrowings into a fixed-rate obligation.

See Note 14 of Notes to Condensed Consolidated Financial Statements.

See Note 14, Debt , for additional information.

These interest rate swaps are designated as cash flow hedges and, as such, the contracts are marked-to-market at each reporting date with any unrealized gains or losses included in AOCI to the extent effective and reclassified to interest expense in the period during which the hedged transactions affect earnings or it becomes probable that the forecasted transaction will not occur.

The balance sheet classification and fair values of the Company’s derivative instruments, which are Level 2 measurements, are as follows:

Derivatives instruments Condensed Consolidated Balance Sheets Location September 30,

Derivatives instruments Condensed Consolidated Balance Sheets Location March 31,

2025 December 31,

Interest rate swaps:

Other accrued liabilities $ 373 $ —

Other non-current assets $ 852 $ 1,621

1 unchanged sentence

Other accrued liabilities 1,994 67

The following table presents the net unrealized (loss) gain deferred to AOCI:

Derivatives designated as cash flow hedges September 30,

2024 December 31,

Interest rate swaps AOCI $ ( 287 ) $ 1,407

Quaker Chemical Corporation

1 unchanged sentence

Dollars in thousands, except per share amounts, unless otherwise stated)

The following table presents the net unrealized gain (loss) deferred to AOCI:

Derivatives designated as cash flow hedges March 31,

2025 December 31,

Interest rate swaps AOCI $ 656 $ 1,248

The following table presents the location and the amount of net gain or loss recognized in the Company’s Condensed Consolidated Statements of Operations related to derivative instruments:

Three Months Ended

September 30, Nine Months Ended

September 30,

Derivative instruments Condensed Consolidated Statements of Operations 2025 2024

Interest rate swaps Interest expense, net $ 1,295 $ 1,198 $ 3,854 $ 2,259

Foreign exchange forward contracts Other (expense) income, net ( 1,308 ) ( 29 ) ( 2,040 ) 2,107

Interest rate swaps Interest expense $ 523 $ 1,286

Foreign exchange forward contracts Other income (expense), net ( 1,857 ) 943

Total $ ( 1,334 ) $ 2,229

Net Investment Hedge

Subsequent to the date of this report, in April 2025, the Company entered into a fixed-for-fixed cross currency swap with an aggregate notional amount totaling $ 100.0 million to hedge the variability of exchange rate impacts between the U.S.

Dollar and Japanese yen.

The cross-currency swap was designated as a net investment hedge and expires in April 2028.

Note 18 – Commitments and Contingencies

As previously disclosed in its 2024 Form 10-K, the Company is party to certain environmental matters and other litigation.

See Note 25 of Notes to Consolidated Financial Statements in the Company’s 2023 Form 10-K.

During the three and nine months ended September 30, 2024, there have been no significant changes to the facts or circumstances of any of the previously disclosed matters.

See Note 25, Commitments and Contingencies , in the Company’s 2024 Form 10-K for more information.

During the three months ended March 31, 2025, there have been no significant changes to the facts or circumstances of any of the previously disclosed matters.

Although there can be no assurance regarding the outcome of any of the ongoing environmental matters or litigation, the Company believes that it has made adequate accruals for costs and liabilities associated with these matters.

The Company has accrued approximately $ 6 million as of September 30, 2024 and December 31, 2023, respectively, for these ongoing matters.

The Company previously disclosed in its 2023 Form 10-K that one of its North American production facilities experienced an electrical fire in 2021 that resulted in property damage and the temporary shutdown of production.

The Company and its insurance carrier reviewed the impact of the electrical fire on the production facility’s operations as it relates to a potential business interruption insurance claim.

In July 2024, the Company and its insurance carrier settled this claim for $ 1.0 million.

In December 2021, the Company completed its acquisition of Coral Chemical Company (“Coral”), a privately held, U.S.-based provider of metal finishing fluid solutions.

Subsequent to the acquisition, the Company and the sellers of Coral (the “Sellers”) have worked to finalize certain post-closing adjustments.

During the second quarter of 2022, after failing to reach resolution, the Sellers filed suit asserting certain amounts owed related to tax attributes of the acquisition.

Since the second quarter of 2022, there have been no material changes to the facts and circumstances of the claim asserted by the Sellers, and the Company continues to believe the potential range of exposure for this claim is $ 0 to $ 1.5 million.

In addition, during the three and nine months ended September 30, 2024, there are no new environmental matters or litigation that the Company believes will have a material adverse effect on the Company’s results of operations, cash flows, or financial condition.

The Company has accrued approximately $ 5.5 million and $ 5.3 million as of March 31, 2025 and December 31, 2024, respectively, for these ongoing matters.

In addition, during the three months ended March 31, 2025, there are no new environmental matters or litigation that the Company believes will have a material adverse effect on the Company’s results of operations, cash flows, or financial condition.

Quaker Chemical Corporation

1 unchanged sentence

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements