QUAKER CHEMICAL CORP 10-Q

Item 1. Financial Statements (Unaudited). Quaker Chemical Corporation Condensed Consolidated Statements of Operations (Unaudited; Dollars in thousands, except per share data) Three Months Ended March 31, 2025 2024 Net sales $ 442,914 $ 469,759 Cost of goods sold (excluding amortization expense - See Note 13) 281,654 288,196 Gross profit 161,260 181,563 Selling, general and administrative expenses 119,046 124,180 Restructuring and related charges, net 14,590 1,857 Operating income 27,624 55,526 Other income (expense), net ( 709 ) 1,080 Interest expense ( 9,545 ) ( 10,824 ) Income before taxes and equity in net income of associated companies 17,370 45,782 Taxes on income before equity in net income of associated companies 7,542 12,508 Income before equity in net income of associated companies 9,828 33,274 Equity in net income of associated companies 3,089 1,984 Net income 12,917 35,258 Less: Net income (loss) attributable to noncontrolling interest ( 5 ) 31 Net income attributable to Quaker Chemical Corporation $ 12,922 $ 35,227 Per share data: Net income attributable to Quaker Chemical Corporation common shareholders – basic $ 0.73 $ 1.96 Net income attributable to Quaker Chemical Corporation common shareholders – diluted $ 0.73 $ 1.95 Dividends declared $ 0.485 $ 0.455 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 2 Table of Content Quaker Chemical Corporation Condensed Consolidated Statements of Comprehensive Income (Unaudited; Dollars in thousands) Three Months Ended March 31, 2025 2024 Net income $ 12,917 $ 35,258 Other comprehensive income (loss), net of tax Currency translation adjustments 27,129 ( 25,389 ) Defined benefit retirement plans ( 265 ) 354 Current period change in fair value of derivatives ( 592 ) 2,345 Unrealized (loss) gain on available-for-sale securities ( 304 ) 45 Other comprehensive income (loss) 25,968 ( 22,645 ) Comprehensive income 38,885 12,613 Less: Comprehensive income attributable to noncontrolling interest 1 42 Comprehensive income attributable to Quaker Chemical Corporation $ 38,886 $ 12,655 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 3 Table of Content Quaker Chemical Corporation Condensed Consolidated Balance Sheets (Unaudited; Dollars in thousands, except par value) March 31, 2025 December 31, 2024 ASSETS Current assets Cash and cash equivalents $ 186,223 $ 188,880 Accounts receivable, net 418,659 400,126 Inventories Raw materials and supplies 116,953 112,457 Work-in-process and finished goods 129,169 115,015 Prepaid expenses and other current assets 61,417 59,939 Total current assets 912,421 876,417 Property, plant and equipment, at cost 496,185 483,033 Less: Accumulated depreciation ( 263,716 ) ( 253,501 ) Property, plant and equipment, net 232,469 229,532 Right-of-use lease assets 36,122 34,120 Goodwill 524,667 518,894 Other intangible assets, net 830,270 827,098 Investments in associated companies 101,182 98,012 Deferred tax assets 9,443 9,216 Other non-current assets 17,855 17,360 Total assets $ 2,664,429 $ 2,610,649 LIABILITIES AND EQUITY Current liabilities Short-term borrowings and current portion of long-term debt $ 37,292 $ 37,554 Accounts payable 199,430 198,137 Dividends payable 8,575 8,572 Accrued compensation 28,706 50,212 Accrued restructuring 7,159 2,297 Accrued pension and postretirement benefits 2,228 2,328 Other accrued liabilities 89,436 80,668 Total current liabilities 372,826 379,768 Long-term debt 698,768 669,614 Long-term lease liabilities 21,130 20,028 Deferred tax liabilities 136,593 138,828 Non-current accrued pension and postretirement benefits 24,062 23,783 Other non-current liabilities 24,550 24,445 Total liabilities 1,277,929 1,256,466 Commitments and contingencies (Note 18) Equity Common stock $ 1 par value; authorized 30,000,000 shares; issued and outstanding March 31, 2025 – 17,680,380 shares; December 31, 2024 – 17,673,607 shares 17,680 17,674 Capital in excess of par value 905,781 903,781 Retained earnings 638,079 633,731 Accumulated other comprehensive loss ( 175,655 ) ( 201,619 ) Total Quaker shareholders’ equity 1,385,885 1,353,567 Noncontrolling interest 615 616 Total equity 1,386,500 1,354,183 Total liabilities and equity $ 2,664,429 $ 2,610,649 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 4 Table of Content Quaker Chemical Corporation Condensed Consolidated Statements of Cash Flows (Unaudited; Dollars in thousands) Three Months Ended March 31, 2025 2024 Cash flows from operating activities Net income $ 12,917 $ 35,258 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 20,599 20,802 Equity in undistributed earnings of associated companies, net of dividends ( 2,769 ) ( 1,675 ) Deferred income taxes ( 3,340 ) 3,167 Share-based compensation 3,182 3,884 Restructuring and related charges, net 14,590 1,857 (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 Inventories ( 13,457 ) ( 6,576 ) Prepaid expenses and other current assets 245 ( 1,054 ) Accrued restructuring ( 9,045 ) ( 3,666 ) Accounts payable and accrued liabilities ( 15,712 ) ( 23,400 ) Net cash (used in) provided by operating activities ( 3,050 ) 27,231 Cash flows from investing activities Investments in property, plant and equipment ( 12,329 ) ( 4,460 ) Payments related to acquisitions, net of cash acquired ( 3,983 ) ( 24,899 ) Proceeds from disposition of assets 2,900 58 Net cash used in investing activities ( 13,412 ) ( 29,301 ) Cash flows from financing activities Payments of long-term debt ( 8,523 ) ( 4,711 ) Borrowings on revolving credit facilities, net 30,000 20,902 Payments on other debt, net ( 773 ) — Dividends paid ( 8,572 ) ( 8,186 ) Other stock related activity ( 1,176 ) ( 1,442 ) Net cash provided by financing activities 10,956 6,563 Effect of foreign exchange rate changes on cash 2,849 ( 3,270 ) 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. 5 Quaker Chemical Corporation Condensed Consolidated Statements of Changes in Equity (Unaudited; Dollars in thousands, except per share amounts) Common Stock Capital in Excess of Par Value Retained Earnings Accumulated Other Comprehensive Loss Noncontrolling Interest Total 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, net ( 2 ) 2,445 — — — 2,443 Balance as of March 31, 2024 $ 17,990 $ 942,546 $ 577,682 $ ( 146,987 ) $ 561 $ 1,391,792 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 Amounts reported in other comprehensive income — — — 25,964 4 25,968 Dividends ($ 0.485 per share) — — ( 8,574 ) — — ( 8,574 ) 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. 6 Table of Contents Quaker Chemical Corporation Notes to Condensed Consolidated Financial Statements (Unaudited; Dollars in thousands, except per share amounts, unless otherwise stated) Page Note 1 Basis of Presentation and Description of Business 8 Note 2 Business Acquisitions 8 Note 3 Recently Issued Accounting Standards 9 Note 4 Business Segments 10 Note 5 Net Sales and Revenue Recognition 12 Note 6 Leases 12 Note 7 Restructuring and Related Activities 14 Note 8 Share-Based Compensation 14 Note 9 Pension and Other Postretirement Benefits 15 Note 10 Other Income (Expense), Net 15 Note 11 Income Taxes 16 Note 12 Earnings Per Share 16 Note 13 Goodwill and Other Intangible Assets 17 Note 14 Debt 18 Note 15 Accumulated Other Comprehensive Income 19 Note 16 Fair Value Measurements 20 Note 17 Hedging Activities 20 Note 18 Commitments and Contingencies 21 7 Table of Contents Quaker Chemical Corporation Notes to Condensed Consolidated Financial Statements (Unaudited; 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 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 The condensed consolidated financial statements included herein are unaudited and have been prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”) for interim financial reporting and the United States Securities and Exchange Commission (“SEC”) regulations. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations. 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 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. Description of Business The Company was organized in 1918 and incorporated as a Pennsylvania business corporation in 1930. 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, can, 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: (i) Americas; (ii) Europe, Middle East and Africa (“EMEA”); and (iii) Asia/Pacific. Hyper-inflationary economies Argentina’s and Türkiye’s economies were considered hyper-inflationary under U.S. GAAP effective July 1, 2018 and April 1, 2022, respectively. 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 8 Table of Contents Quaker Chemical Corporation Notes to Condensed Consolidated Financial Statements - Continued (Unaudited; 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. 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 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 March 31, 2025, the allocation of the purchase price has not been finalized. During February 2024, the Company acquired I.K.V. Tribologie IKVT and its subsidiaries (“IKV”) for $ 35.2 million, including an initial cash payment of $ 29.7 million, subject to routine and customary post-closing adjustments related to working capital and net indebtedness levels as well as earn-out provisions related to the finalization of 2023 earnings. Assets acquired included approximately $ 4.8 million of cash and cash equivalents. IKV, which is part of the Company’s EMEA segment, specializes in high-performance lubricants and greases, including original equipment manufacturer first-fill greases that are primarily used in the automotive, aerospace, electronics, and other industrial markets. The acquisition of IKV strengthens the Company’s position in first-fill greases. The Company allocated $ 15.0 million of the purchase price to intangible assets, comprised of approximately $ 11.1 million of customer relationships to be amortized over 16 years; $ 3.2 million of product technologies to be amortized over 14 years; and $ 0.7 million of trademarks to be amortized over 5 years. In addition, the Company recognized $ 16.4 million of goodwill in the EMEA segment, none of which is deductible for tax purposes. The goodwill is primarily attributable to expected cost and growth synergies. 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 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. 9 Table of Contents Quaker Chemical Corporation Notes to Condensed Consolidated Financial Statements - Continued (Unaudited; Dollars in thousands, except per share amounts, unless otherwise stated) Recently Issued Accounting Standards Not Yet Adopted The FASB issued ASU 2023-09, Income Taxes (Topic 740) : Improvements to Income Tax Disclosures in December 2023. 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 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 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. 10 Table of Contents Quaker Chemical Corporation Notes to Condensed Consolidated Financial Statements - Continued (Unaudited; Dollars in thousands, except per share amounts, unless otherwise stated) 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 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 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, 2025 2024 Segment operating earnings $ 107,785 $ 126,718 Restructuring and related charges, net ( 14,590 ) ( 1,857 ) Non-operating and administrative expenses ( 50,717 ) ( 54,177 ) Depreciation of corporate assets and amortization ( 14,854 ) ( 15,158 ) Operating income 27,624 55,526 Other income (expense), net ( 709 ) 1,080 Interest expense ( 9,545 ) ( 10,824 ) Income before taxes and equity in net income of associated companies $ 17,370 $ 45,782 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 EMEA 1,877 1,847 Asia/Pacific 1,213 1,022 Total segment depreciation $ 5,745 $ 5,644 11 Table of Contents Quaker Chemical Corporation Notes to Condensed Consolidated Financial Statements - Continued (Unaudited; Dollars in thousands, except per share amounts, unless otherwise stated) Note 5 – Net Sales and Revenue Recognition Arrangements Resulting in Net Reporting 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 $ 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, 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 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 The Company sells its industrial process fluids, specialty chemicals and technical expertise as a global product portfolio. 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 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 March 31, 2025 Customer Industries Americas EMEA Asia/Pacific Consolidated Total Metals $ 64,296 $ 32,960 $ 49,867 $ 147,123 Metalworking and other 149,415 96,318 50,058 295,791 $ 213,711 $ 129,278 $ 99,925 $ 442,914 Three Months Ended March 31, 2024 Customer Industries Americas EMEA Asia/Pacific Consolidated Total Metals $ 66,026 $ 32,820 $ 50,911 $ 149,757 Metalworking and other 163,728 105,602 50,672 320,002 $ 229,754 $ 138,422 $ 101,583 $ 469,759 Note 6 - Leases The Company has operating leases for certain facilities, vehicles, and machinery and equipment with remaining lease terms up to 10 years. Operating lease expense is recognized on a straight-line basis over the lease term. In addition, the Company has certain land use leases with remaining lease terms up to 90 years. 12 Table of Contents Quaker Chemical Corporation Notes to Condensed Consolidated Financial Statements - Continued (Unaudited; 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 March 31, 2025 2024 Operating lease expense $ 3,708 $ 3,743 Short-term lease expense 144 199 Supplemental cash flow information related to the Company’s leases is as follows: Three Months Ended March 31, 2025 2024 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 3,584 $ 3,661 Non-cash lease liabilities activity: Leased assets obtained in exchange for new operating lease liabilities 3,877 3,234 Supplemental balance sheet information related to the Company’s leases is as follows: March 31, 2025 December 31, 2024 Right-of-use lease assets $ 36,122 $ 34,120 Other accrued liabilities 11,628 10,619 Long-term lease liabilities 21,130 20,028 Total operating lease liabilities $ 32,758 $ 30,647 Weighted average remaining lease term (years) 5.1 5.0 Weighted average discount rate 5.81 % 5.63 % Maturities of operating lease liabilities as of March 31, 2025 were as follows: For the remainder of 2025 $ 10,208 For the year ended December 31, 2026 10,101 For the year ended December 31, 2027 6,092 For the year ended December 31, 2028 3,550 For the year ended December 31, 2029 2,090 For the year ended December 31, 2030 and beyond 6,054 Total lease payments 38,095 Less: imputed interest ( 5,337 ) Present value of lease liabilities (1) $ 32,758 (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. 13 Table of Contents Quaker Chemical Corporation Notes to Condensed Consolidated Financial Statements - Continued (Unaudited; Dollars in thousands, except per share amounts, unless otherwise stated) 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 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 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 $ 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 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 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 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 As a component of its LTIP, the Company grants performance-based stock unit awards (“PSUs”). The number of shares that may ultimately be issued as settlement for each award may range from 0 % up to 200 % of the target award, subject to the achievement of the Company’s market-based total shareholder return (“TSR”) metric relative to the performance of a selected peer group, and separately the achievement of a performance-based return on invested capital (“ROIC”) measure. 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. 14 Table of Contents Quaker Chemical Corporation Notes to Condensed Consolidated Financial Statements - Continued (Unaudited; Dollars in thousands, except per share amounts, unless otherwise stated) 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 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: 2025 Grants Risk-free interest rate 3.96 % Dividend yield 1.51 % Expected term (years) 3.0 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 March 31, Pension Benefits Other Postretirement Benefits 2025 2024 2025 2024 Service cost $ 102 $ 109 $ — $ — Interest cost 2,284 2,375 14 15 Expected return on plan assets ( 1,984 ) ( 2,030 ) — — Actuarial loss (gain) amortization 140 127 ( 26 ) ( 29 ) Prior service cost amortization 6 7 — — Net periodic benefit cost (income) $ 548 $ 588 $ ( 12 ) $ ( 14 ) Employer Contributions 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 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. Note 10 – Other income (expense), net The components of Other income (expense), net are as follows: Three Months Ended March 31, 2025 2024 Non-income tax refunds and other related credits $ 168 $ 2,155 Income from third party license fees 207 225 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 ) Product liability claim costs, net — ( 896 ) Interest income 660 — Other non-operating income, net 60 102 Total other income (expense), net $ ( 709 ) $ 1,080 15 Table of Contents Quaker Chemical Corporation Notes to Condensed Consolidated Financial Statements - Continued (Unaudited; 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 The following table summarizes earnings per share calculations: Three Months Ended March 31, 2025 2024 Basic earnings per common share Net income attributable to Quaker Chemical Corporation $ 12,922 $ 35,227 Less: income allocated to participating securities ( 22 ) ( 159 ) Net income available to common shareholders $ 12,900 $ 35,068 Basic weighted average common shares outstanding 17,639,764 17,908,814 Basic earnings per common share $ 0.73 $ 1.96 Diluted earnings per common share Net income attributable to Quaker Chemical Corporation $ 12,922 $ 35,227 Less: income allocated to participating securities ( 22 ) ( 158 ) Net income available to common shareholders $ 12,900 $ 35,069 Basic weighted average common shares outstanding 17,639,764 17,908,814 Effect of dilutive securities 30,201 30,048 Diluted weighted average common shares outstanding 17,669,965 17,938,862 Diluted earnings per common share $ 0.73 $ 1.95 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 70,771 and 39,066 for the three months ended March 31, 2025 and 2024, respectively . 16 Table of Contents Quaker Chemical Corporation Notes to Condensed Consolidated Financial Statements - Continued (Unaudited; 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 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 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 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: Gross Carrying Amount Accumulated Amortization Net Book Value 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 Trademarks, formulations and product technology 164,312 160,257 65,642 62,373 98,670 97,884 Other 5,805 5,759 5,713 5,663 92 96 Total definite-lived intangible assets $ 1,013,113 $ 995,271 $ 373,409 $ 353,486 $ 639,704 $ 641,785 The Company amortizes definite-lived intangible assets on a straight-line basis over their useful lives. The Company recorded amortization expense as follows: Three Months Ended March 31, 2025 2024 Amortization expense $ 14,237 $ 14,472 Estimated annual aggregate amortization expense for the current year and subsequent five years is as follows: For the remainder of 2025 $ 43,236 For the year ended December 31, 2026 57,179 For the year ended December 31, 2027 56,838 For the year ended December 31, 2028 56,371 For the year ended December 31, 2029 55,271 For the year ended December 31, 2030 53,106 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. 17 Table of Contents Quaker Chemical Corporation Notes to Condensed Consolidated Financial Statements - Continued (Unaudited; 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 March 31, 2025 As of December 31, 2024 Interest Rate Outstanding Balance Interest Rate Outstanding Balance Credit Facilities: Revolver 4.38 % $ 80,860 4.00 % $ 48,820 U.S. Term Loan 5.55 % 502,184 5.62 % 508,863 Euro Term Loan 3.50 % 142,637 4.00 % 138,767 Industrial development bonds 5.26 % 10,000 5.26 % 10,000 Bank lines of credit and other debt obligations Various 1,366 Various 1,817 Total debt $ 737,047 $ 708,267 Less: debt issuance costs ( 987 ) ( 1,099 ) Less: short-term and current portion of long-term debts ( 37,292 ) ( 37,554 ) Total long-term debt $ 698,768 $ 669,614 Credit facilities In June 2022, the Company, and its wholly owned subsidiary, Quaker Houghton B.V., as borrowers, Bank of America, N.A., as administrative agent, U.S. dollar swing line lender and letter of credit issuer, Bank of America Europe Designated Active Company, as Euro Swing Line Lender, certain guarantors and other lenders entered into an amendment to its primary credit facility. The amended credit facility (the “Credit Facility”) established (A) a $ 150.0 million Euro equivalent senior secured term loan (the “Euro Term Loan”), (B) a $ 600.0 million senior secured term loan (the “U.S. Term Loan”), and (C) a $ 500.0 million senior secured revolving credit facility (the “Revolver”), each maturing in June 2027. 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 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 $ 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 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 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 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 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. 18 Table of Contents Quaker Chemical Corporation Notes to Condensed Consolidated Financial Statements - Continued (Unaudited; Dollars in thousands, except per share amounts, unless otherwise stated) Industrial development bonds 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. Bank lines of credit and other debt obligations The Company has certain unsecured bank lines of credit and discounting facilities in certain foreign subsidiaries, which are not collateralized. 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 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 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 March 31, 2025 2024 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 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 The following tables show the reclassifications from and resulting balances of accumulated other comprehensive income (“AOCI”): Currency Translation Adjustments Defined Benefit Pension Plans Unrealized Gain (Loss) in Available-for- Sale Securities Derivative Instruments Total Balance as of December 31, 2024 $ ( 192,841 ) $ ( 10,313 ) $ 287 $ 1,248 $ ( 201,619 ) 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 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 ) Other comprehensive (loss) income before Reclassifications ( 25,316 ) 320 63 3,045 ( 21,888 ) Amounts reclassified from AOCI — 150 ( 7 ) — 143 Related tax amounts — ( 116 ) ( 11 ) ( 700 ) ( 827 ) Balance as of March 31, 2024 $ ( 140,733 ) $ ( 10,384 ) $ 378 $ 3,752 $ ( 146,987 ) 19 Table of Contents Quaker Chemical Corporation Notes to Condensed Consolidated Financial Statements - Continued (Unaudited; Dollars in thousands, except per share amounts, unless otherwise stated) Note 16 – Fair Value Measurements The Company values its company-owned life insurance policies at fair value. 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 The Company’s ongoing business operations expose it to various risks, including fluctuating foreign exchange rates and interest rate risk. To manage these risks, the Company periodically enters into derivative financial instruments, such as foreign exchange forward contracts and interest rate swap agreements. The Company does not hold or enter into derivative financial instruments for trading or speculative purposes. Foreign Exchange Forward Contracts The Company uses foreign exchange forward contracts to economically hedge the impact of the variability in exchange rates on certain assets and/or liabilities denominated in foreign currencies. These forward contracts are marked-to-market at each reporting date. Changes in the fair value of the underlying instrument and settlements are recognized in earnings in Other income (expense), net. 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 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 (in millions) : Currency March 31, 2025 Mexican Peso $ 12,500 Japanese Yen 164,673 $ 177,173 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, 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 March 31, 2025 December 31, 2024 Interest rate swaps: Other non-current assets $ 852 $ 1,621 Foreign currency forward contracts: Other accrued liabilities 1,994 67 20 Table of Contents Quaker Chemical Corporation Notes to Condensed Consolidated Financial Statements - Continued (Unaudited; 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, 2024 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 March 31, Derivative instruments Condensed Consolidated Statements of Operations 2025 2024 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, 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 $ 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. 21 Table of Contents Quaker Chemical Corporation Management’s Discussion and Analysis