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Item 1. Financial Statements

2025-07-31 compared with 2025-05-01 · 360 added, 189 removed, 505 unchanged (52% of the section changed)

4 unchanged sentences

Three Months Ended

June 30, Six Months Ended

2025 2024 2025 2024

Net sales $ 483,400 $ 463,567 $ 926,314 $ 933,326

2 unchanged sentences

Selling, general and administrative expenses 126,600 116,949 245,646 241,129

Impairment charges 88,840 — 88,840 —

Restructuring and related charges, net 8,793 320 23,383 2,177

Operating income 27,624 55,526

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

Operating (loss) income ( 52,510 ) 58,449 ( 24,886 ) 113,975

Other (expense) income, net ( 653 ) 422 ( 1,362 ) 1,502

Interest expense ( 12,779 ) ( 10,754 ) ( 22,324 ) ( 21,578 )

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

(Loss) income before taxes and equity in net income of associated companies ( 65,942 ) 48,117 ( 48,572 ) 93,899

Taxes on income before equity in net income of associated companies 5,472 15,778 13,014 28,286

Income before equity in net income of associated companies 9,828 33,274

(Loss) income before equity in net income of associated companies ( 71,414 ) 32,339 ( 61,586 ) 65,613

Equity in net income of associated companies 4,851 2,571 7,940 4,555

Net income 12,917 35,258

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

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

Net (loss) income ( 66,563 ) 34,910 ( 53,646 ) 70,168

Net income attributable to noncontrolling interest 17 25 12 56

Net (loss) income attributable to Quaker Chemical Corporation $ ( 66,580 ) $ 34,885 $ ( 53,658 ) $ 70,112

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

Net (loss) income attributable to Quaker Chemical Corporation common shareholders – basic $ ( 3.78 ) $ 1.94 $ ( 3.04 ) $ 3.90

Net (loss) income attributable to Quaker Chemical Corporation common shareholders – diluted $ ( 3.78 ) $ 1.94 $ ( 3.04 ) $ 3.89

Dividends declared $ 0.485 $ 0.455 $ 0.970 $ 0.910

5 unchanged sentences

Three Months Ended

Net income $ 12,917 $ 35,258

June 30, Six Months Ended

2025 2024 2025 2024

Net (loss) income $ ( 66,563 ) $ 34,910 $ ( 53,646 ) $ 70,168

Other comprehensive income (loss), net of tax

4 unchanged sentences

Other comprehensive income (loss) 60,601 ( 18,774 ) 86,569 ( 41,419 )

Comprehensive income 38,885 12,613

Comprehensive income attributable to noncontrolling interest 1 42

Comprehensive income attributable to Quaker Chemical Corporation $ 38,886 $ 12,655

Comprehensive (loss) income ( 5,962 ) 16,136 32,923 28,749

Comprehensive (income) loss attributable to noncontrolling interest ( 144 ) ( 26 ) ( 143 ) 16

Comprehensive (loss) income attributable to Quaker Chemical Corporation $ ( 6,106 ) $ 16,110 $ 32,780 $ 28,765

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

41 unchanged sentences

issued and outstanding

March 31, 2025 – 17,680,380 shares;

June 30, 2025 – 17,394,128 shares;

December 31, 2024 – 17,673,607 shares

12 unchanged sentences

Dollars in thousands)

Three Months Ended

Six Months Ended

Cash flows from operating activities

Net income $ 12,917 $ 35,258

Net (loss) income $ ( 53,646 ) $ 70,168

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

3 unchanged sentences

Share-based compensation 6,903 8,128

Impairment charges 88,840 —

Restructuring and related charges, net 23,383 2,177

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

Inventory step-up amortization 6,022 —

Gain on disposal of property, plant and equipment and other assets ( 2,108 ) ( 509 )

Other adjustments ( 5,228 ) 3,302

5 unchanged sentences

Accounts payable and accrued liabilities ( 25,551 ) ( 25,021 )

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

Net cash provided by operating activities 38,522 73,534

Cash flows from investing activities

2 unchanged sentences

Proceeds from disposition of assets 2,950 2,798

Other investing activities 697 —

Net cash used in investing activities ( 180,720 ) ( 33,225 )

4 unchanged sentences

Dividends paid ( 17,146 ) ( 16,372 )

Shares purchased under share repurchase programs ( 32,693 ) ( 7,760 )

Other stock related activity ( 1,301 ) ( 1,492 )

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

Net cash provided by (used in) financing activities 147,554 ( 39,297 )

Effect of foreign exchange rate changes on cash 7,682 ( 6,971 )

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

Net increase (decrease) in cash and cash equivalents 13,038 ( 5,959 )

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

18 unchanged sentences

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, net of excise taxes ( 49 ) ( 8,306 ) — — — ( 8,355 )

Share issuance and equity-based compensation plans, net — 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

5 unchanged sentences

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

Net (loss) income — — ( 66,580 ) — 17 ( 66,563 )

Amounts reported in other comprehensive income — — — 60,474 127 60,601

Noncontrolling interest from acquisition — — — — 2,451 2,451

Dividends ($ 0.485 per share)

— — ( 8,436 ) — — ( 8,436 )

Shares purchased under share repurchase program, net of excise taxes ( 296 ) ( 32,686 ) — — — ( 32,982 )

Share issuance and equity-based compensation plans, net 10 3,874 — — — 3,884

Balance as of June 30, 2025 $ 17,394 $ 876,969 $ 563,063 $ ( 115,181 ) $ 3,210 $ 1,345,455

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

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Pension and Other Postretirement Benefits

Other Income (Expense), Net

Other ( E xpense) I ncome, net

Earnings Per Share

8 unchanged sentences

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.

As used in these Notes to Condensed Consolidated Financial Statements of this Quarterly Report on Form 10-Q for the period ended June 30, 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

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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.

The results for the six months ended June 30, 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.

Certain prior year amounts have been reclassified to conform to the current year presentation.

Description of Business

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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:

5 unchanged sentences

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.

As of and for the three and six months ended June 30, 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 and six months ended June 30, 2025, the Company recorded $ 0.7 million and $ 1.2 million of remeasurement losses associated with the applicable currency conversions, respectively.

Comparatively, during the three and six months ended June 30, 2024, the Company recorded $ 0.6 million of remeasurement losses and $ 0.3 million of remeasurement gains associated with the applicable currency conversions, respectively.

These losses and gains were recorded within Other (expense) income, 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.

In April 2025, the Company acquired Dipsol Chemicals Co., Ltd.

and its subsidiaries, (“Dipsol”) for approximately $ 185.6 million ( 27.7 billion JPY), which included approximately $ 30.1 million ( 4.5 billion JPY) of acquired cash for a net purchase price of approximately $ 155.5 million ( 23.2 billion JPY).

In July 2025, the Company satisfied all routine and customary post-closing conditions and finalized the purchase price with no adjustments.

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

In connection with the acquisition of Dipsol, the Company entered into foreign currency forward contracts, which resulted in a $ 187.0 million cash payment and a $ 1.4 million foreign currency loss recognized during the six months ended June 30, 2025.

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.

Dipsol has operations in several countries and these operations are 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

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

Quaker Chemical Corporation

1 unchanged sentence

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.

The following table presents the preliminary estimated fair values of Dipsol assets acquired and liabilities assumed:

Dipsol Assets Acquired and Liabilities Assumed on April 1, 2025

Dollars in thousands

Fair value of assets acquired

Cash and cash equivalents $ 30,084

Accounts receivable, net 16,481

Inventories 17,962

Prepaid expenses and other current assets 1,411

Property, plant and equipment, net 39,450

Right-of-use lease assets 2,534

Other intangible assets, net 55,000

Investments in associated companies 5,096

Other non-current assets 4,687

Total Assets Acquired $ 172,706

Fair value of liabilities assumed

Accounts payable $ 6,763

Accrued compensation 1,528

Other accrued liabilities 1,869

Long-term lease liabilities 1,446

Deferred income tax liabilities 25,898

Total Liabilities Assumed $ 37,504

Noncontrolling interest ( 2,451 )

Goodwill 52,862

Total Consideration $ 185,613

As of June 30, 2025, the allocation of the purchase price has not been finalized and the one-year measurement period has not ended.

Further adjustments may be necessary as a result of the Company’s ongoing assessment of additional information related to the fair value of assets acquired and liabilities assumed.

The Company allocated $ 55.0 million of the purchase price to intangible assets across the Americas, EMEA, and Asia/Pacific segments.

Customer relationships, product technologies, and trademarks will be amortized over 14 years, 8 years, and 13 years, respectively.

The following table presents the intangible assets recognized for each reportable segment:

Americas EMEA Asia/Pacific Total

Customer Relationships $ 3,500 $ 200 $ 26,300 $ 30,000

Product Technologies — — 18,000 18,000

Trademarks — — 7,000 7,000

Total Intangibles $ 3,500 $ 200 $ 51,300 $ 55,000

The Company recognized $ 52.9 million of goodwill, comprised of $ 47.2 million in the Asia/Pacific segment, $ 5.3 million in the Americas segment, and $ 0.4 million in the EMEA segment.

The goodwill is not deductible for tax purposes.

The goodwill is primarily attributable to expected synergies.

Total sales included in the Condensed Consolidated Statement of Operations for the three and six months ended June 30, 2025 are $ 20.9 million.

Quaker Chemical Corporation

Notes to Condensed Consolidated Financial Statements - Continued

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

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 is reported as part of the EMEA reportable segment.

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

The Company allocated $ 2.1 million of the purchase price to intangible assets and recognized $ 2.6 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 June 30, 2025, the allocation of the purchase price has not been finalized.

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

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The goodwill is primarily attributable to expected growth synergies.

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

As of June 30, 2025, the allocation of the purchase price has not been finalized.

Previous Acquisitions

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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.

As of June 30, 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 of 2025.

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

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The goodwill is primarily attributable to expected growth synergies.

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

As of June 30, 2025, the allocation of the purchase price has been finalized.

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

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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.

As of June 30, 2025, the allocation of the purchase price has been finalized.

The results of operations of Dipsol, Natech, CSI, Sutai and IKV subsequent to the acquisition dates are included in the unaudited Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2025.

During the three and six months ended June 30, 2025, the Company recognized $ 0.8 million and $ 4.1 million, respectively, of acquisition-related expenses including legal, financial, consulting and other costs, compared to $ 0.2 million and $ 0.5 million, respectively, during the three and six months ended June 30, 2024.

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

Quaker Chemical Corporation

Notes to Condensed Consolidated Financial Statements - Continued

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

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.

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

Improvements to Reportable Segment Disclosures beginning with the 2024 Form 10-K and the Form 10-Q for the period ended March 31, 2025.

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.

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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

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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.

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

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

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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.

Therefore, the Company does 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 for the three months ended March 31, 2025 and 2024:

The following table presents information about the performance of the Company’s reportable segments for the three and six months ended June 30, 2025 and 2024:

Americas EMEA Asia/Pacific Totals

Three Months Ended March 31, 2025

Three Months Ended June 30, 2025

Net sales $ 221,062 $ 139,923 $ 122,415 $ 483,400

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Segment operating earnings $ 58,976 $ 24,995 $ 28,715 $ 112,686

Three Months Ended March 31, 2024

Six Months Ended June 30, 2025

Net sales $ 434,773 $ 269,201 $ 222,340 $ 926,314

5 unchanged sentences

Segment operating earnings $ 117,438 $ 48,388 $ 54,645 $ 220,471

(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.

Americas EMEA Asia/Pacific Totals

Three Months Ended June 30, 2024

Net sales $ 223,517 $ 138,001 $ 102,049 $ 463,567

Significant segment expenses

Product costs (1)

107,973 72,391 51,427 231,791

Other operating expenses (2)

51,407 38,958 19,622 109,987

Segment operating earnings $ 64,137 $ 26,652 $ 31,000 $ 121,789

Six Months Ended June 30, 2024

Net sales $ 453,271 $ 276,423 $ 203,632 $ 933,326

Significant segment expenses

Product costs (1)

219,048 143,763 102,802 465,613

Other operating expenses (2)

103,317 76,437 39,453 219,207

Segment operating earnings $ 130,906 $ 56,223 $ 61,377 $ 248,506

(1) Product costs include the costs of raw materials and are recorded in Cost of goods sold in the Company’s Condensed 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,

(3) Product costs includes the $ 6.0 million amortization of the fair value step-up in Dipsol's inventories as a result of the acquisition, which is comprised of approximately $ 2.6 million in the Americas segment, $ 3.0 million in the Asia/Pacific segment, and $ 0.4 million in the EMEA segment.

(4) Product costs includes a $ 3.6 million gain related to immaterial out-of-period adjustments for inventory, which is comprised of approximately $ 1.4 million in the Americas segment and $ 2.2 million in the EMEA segment.

Quaker Chemical Corporation

Notes to Condensed Consolidated Financial Statements - Continued

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

The following table presents a reconciliation of the Company’s segment operating earnings to (loss) income before taxes and equity in net income of associated companies in the Company’s Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2025 and 2024:

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

Segment operating earnings $ 112,686 $ 121,789 $ 220,471 $ 248,506

Restructuring and related charges, net ( 8,793 ) ( 320 ) ( 23,383 ) ( 2,177 )

Impairment charges ( 88,840 ) — ( 88,840 ) —

Non-operating and administrative expenses ( 50,860 ) ( 47,584 ) ( 101,577 ) ( 101,760 )

Depreciation of corporate assets and amortization ( 16,703 ) ( 15,436 ) ( 31,557 ) ( 30,594 )

Operating income 27,624 55,526

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

Operating (loss) income ( 52,510 ) 58,449 ( 24,886 ) 113,975

Other (expense) income, net ( 653 ) 422 ( 1,362 ) 1,502

Interest expense ( 12,779 ) ( 10,754 ) ( 22,324 ) ( 21,578 )

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,

(Loss) income before taxes and equity in net income of associated companies $ ( 65,942 ) $ 48,117 $ ( 48,572 ) $ 93,899

The following table presents information regarding the Company’s reportable segments’ depreciation for the three and six months ended June 30, 2025 and 2024:

Three Months Ended June 30, Six Months Ended June 30,

Depreciation 2025 2024 2025 2024

3 unchanged sentences

Total segment depreciation $ 6,975 $ 5,745 $ 12,721 $ 11,389

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

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

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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.

The Company had no material contract assets recorded on its Condensed Consolidated Balance Sheets as of June 30, 2025 or December 31, 2024.

The Company had approximately $ 2.3 million and $ 4.2 million of deferred revenue as of June 30, 2025 and December 31, 2024, respectively.

For the six months ended June 30, 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

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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.

Quaker Chemical Corporation

Notes to Condensed Consolidated Financial Statements - Continued

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

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

Three Months Ended March 31, 2025

Three Months Ended June 30, 2025

Customer Industries Americas EMEA Asia/Pacific Consolidated

2 unchanged sentences

$ 221,062 $ 139,923 $ 122,415 $ 483,400

Three Months Ended March 31, 2024

Six Months Ended June 30, 2025

Customer Industries Americas EMEA Asia/Pacific Consolidated

2 unchanged sentences

$ 434,773 $ 269,201 $ 222,340 $ 926,314

Three Months Ended June 30, 2024

Customer Industries Americas EMEA Asia/Pacific Consolidated

Metals $ 63,753 $ 35,307 $ 50,150 $ 149,210

Metalworking and other 159,764 102,694 51,899 314,357

$ 223,517 $ 138,001 $ 102,049 $ 463,567

Six Months Ended June 30, 2024

Customer Industries Americas EMEA Asia/Pacific Consolidated

Metals $ 129,779 $ 68,127 $ 101,061 $ 298,967

Metalworking and other 323,492 208,296 102,571 634,359

$ 453,271 $ 276,423 $ 203,632 $ 933,326

Note 6 - Leases

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

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 Company had no material variable lease costs, sublease income, or finance leases for the three and six months ended June 30, 2025 and 2024.

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

Three Months Ended

June 30, Six Months Ended

2025 2024 2025 2024

Operating lease expense $ 4,302 $ 3,727 $ 8,010 $ 7,470

Short-term lease expense 140 193 284 392

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

June 30, Six Months Ended

2025 2024 2025 2024

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

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Weighted average discount rate 6.16 % 5.63 %

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

Maturities of operating lease liabilities as of June 30, 2025 were as follows:

For the remainder of 2025 $ 8,028

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Present value of lease liabilities (1)

(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.

(1) During the year ended December 31, 2024, the Company entered into a new lease agreement for office and laboratory space in Radnor, Pennsylvania 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.

The $ 79.7 million of future lease commitments relating to this lease were not included in the lease liabilities balance as of June 30, 2025.

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 June 30, 2025, the program included restructuring and associated severance costs to reduce headcount by approximately 380 positions globally.

These actions are expected to be substantially complete by the end of 2025.

Employee separation benefits vary depending on local regulations across countries.

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

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

Restructuring costs incurred during the three and six months ended June 30, 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 Condensed Consolidated Statements of Operations.

Quaker Chemical Corporation

1 unchanged sentence

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:

5 unchanged sentences

Currency translation adjustments 116

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.

Accrued restructuring as of June 30, 2025 $ 7,646

During the six months ended June 30, 2025, the Company completed the sale of certain property previously classified as held for sale for a gain of $ 2.2 million, which is recorded in Other (expense) income, 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.

The Company recognized $ 3.7 million and $ 6.9 million, respectively, of share-based compensation expense in its Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2025, compared to $ 4.2 million and $ 8.1 million, respectively, for the three and six months ended June 30, 2024.

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.

As of June 30, 2025, unrecognized compensation expense related to non-vested restricted shares was $ 0.4 million, to be recognized over a weighted average remaining period of 0.6 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 .

During the six months ended June 30, 2025, the Company granted 67,319 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.

As of June 30, 2025, unrecognized compensation expense related to non-vested restricted stock units was $ 12.1 million, to be recognized over a weighted average remaining period of 1.7 years.

Performance Stock Units

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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

Notes to Condensed Consolidated Financial Statements - Continued

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.

During the six months ended June 30, 2025, the Company granted 26,389 PSUs with a ROIC condition.

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

During the six months ended June 30, 2025, the Company granted 26,343 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:

2 unchanged sentences

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.

As of June 30, 2025, there was approximately $ 9.4 million of total unrecognized compensation cost related to PSUs, which the Company expects to recognize over a weighted-average period of 2.3 years.

Quaker Chemical Corporation

Notes to Condensed Consolidated Financial Statements - Continued

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

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

Three Months Ended June 30,

Six Months Ended June 30,

Pension Benefits Other Postretirement Benefits Pension Benefits Other Postretirement Benefits

2025 2024 2025 2024 2025 2024 2025 2024

6 unchanged sentences

Employer Contributions

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

During the six months ended June 30, 2025, $ 2.6 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.

Contributions to other postretirement benefit plans were $ 0.2 million.

Taking into consideration current minimum cash contribution requirements, the Company currently expects to make full year cash contributions of approximately $ 7.0 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:

Note 10 – Other (Expense) Income, net

The components of Other (expense) income, net are as follows:

Three Months Ended

June 30, Six Months Ended

2025 2024 2025 2024

Non-income tax refunds and other related credits $ 132 $ 868 $ 300 $ 3,023

Income from third party license fees 207 225

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

(Loss) gain on disposals of property, plant, equipment and other assets, net ( 40 ) 510 2,108 917

Foreign exchange losses, net ( 1,083 ) ( 727 ) ( 4,601 ) ( 1,175 )

1 unchanged sentence

Product liability claim costs, net — — — ( 896 )

Earnout liability adjustment ( 340 ) — ( 340 ) —

Interest income 752 — 1,412 —

Other non-operating income, net 374 235 641 562

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

Total other (expense) income, net $ ( 653 ) $ 422 $ ( 1,362 ) $ 1,502

(Loss) 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 six months ended June 30, 2025.

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

Foreign exchange losses, net includes a $ 0.6 million foreign exchange gain and a $ 1.4 million foreign exchange loss, respectively, during the three and six months ended June 30, 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 to the Company in connection with a product liability dispute with a customer, net of insurance recoveries during the six months ended June 30, 2024.

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 .

The Company’s effective tax rates for the three and six months ended June 30, 2025 were ( 8.3 )% and ( 26.8 )%, respectively, compared to 32.8 % and 30.1 %, respectively, for the three and six months ended June 30, 2024.

The Company’s effective tax rate for the three months ended June 30, 2025 was largely driven by our mix of pre-tax earnings, goodwill impairment and withholding taxes offset by return to provision adjustments and net favorable reductions in uncertain tax positions.

The Company’s effective tax rate for the six months ended June 30, 2025 was largely driven by our mix of pre-tax earnings, goodwill impairment, return to provision adjustments and withholding taxes offset by net favorable reductions in uncertain tax positions.

Comparatively, the effective tax rates for the three and six months ended June 30, 2024 were largely driven by the mix of pre-tax earnings, certain one-time charges related to an intercompany intangible asset transfer, and withholding taxes, offset by changes in uncertain tax positions.

On July 4, 2025, H.R.

1, commonly known as the One Big Beautiful Bill Act (the “OBBB”), was signed into law.

This includes significant changes to the federal corporate tax provisions and extends certain otherwise expiring provisions of the 2017 Tax Cuts and Jobs Act.

Among other things, the legislation restores 100% bonus depreciation for eligible property, reinstates expensing for domestic research and experimental expenditures, imposes new limitations on interest expense deductibility, and expands disallowed deductions for certain employee remuneration.

The OBBB also includes provisions that could impact our international business and which are still being evaluated.

ASU 2023-09 Income Taxes (Topic 740) requires the effects of changes in tax rates and laws on deferred tax balances to be recognized in the period in which the relevant legislation is enacted.

The OBBB was passed subsequent to the date of our financial statements and may affect the Company’s tax assets and liabilities in future periods.

The legislation has multiple effective dates, with certain provisions effective in 2025 and other provisions implemented through 2027.

The Company continues to assess the potential impact of the OBBB on our Condensed Consolidated Financial Statements.

Note 12 – Earnings Per Share

The following table summarizes earnings per share calculations:

The following table summarizes earnings (loss) per share calculations:

Three Months Ended

June 30, Six Months Ended

2025 2024 2025 2024

Basic earnings per common share

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

income allocated to participating securities ( 22 ) ( 159 )

Net income available to common shareholders $ 12,900 $ 35,068

Net (loss) income attributable to Quaker Chemical Corporation $ ( 66,580 ) $ 34,885 $ ( 53,658 ) $ 70,112

loss (income) allocated to participating securities 82 ( 118 ) 91 ( 276 )

Net (loss) income available to common shareholders $ ( 66,498 ) $ 34,767 $ ( 53,567 ) $ 69,836

Basic weighted average common shares outstanding 17,572,447 17,921,395 17,605,920 17,915,104

Basic earnings per common share $ 0.73 $ 1.96

Basic (loss) earnings per common share $ ( 3.78 ) $ 1.94 $ ( 3.04 ) $ 3.90

Diluted earnings per common share

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

income allocated to participating securities ( 22 ) ( 158 )

Net income available to common shareholders $ 12,900 $ 35,069

Net (loss) income attributable to Quaker Chemical Corporation $ ( 66,580 ) $ 34,885 $ ( 53,658 ) $ 70,112

loss (income) allocated to participating securities 82 ( 118 ) 90 ( 276 )

Net (loss) income available to common shareholders $ ( 66,498 ) $ 34,767 $ ( 53,568 ) $ 69,836

Basic weighted average common shares outstanding 17,572,447 17,921,395 17,605,920 17,915,104

1 unchanged sentence

Diluted weighted average common shares outstanding 17,592,971 17,940,156 17,630,541 17,934,950

Diluted earnings per common share $ 0.73 $ 1.95

Diluted (loss) earnings per common share $ ( 3.78 ) $ 1.94 $ ( 3.04 ) $ 3.89

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 .

The number of anti-dilutive shares were 60,117 and 67,575 , respectively, for the three and six months ended June 30, 2025, compared to 16,098 and 31,000 , respectively, for the three and six months ended June 30, 2024 .

Quaker Chemical Corporation

2 unchanged sentences

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:

Changes in the carrying amount of goodwill for the six months ended June 30, 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

Goodwill recognized for Dipsol acquisition

5,276 380 47,206 52,862

Goodwill recognized for Natech acquisition

— 2,625 — 2,625

Goodwill recognized for CSI acquisition — 1,721 — 1,721

Goodwill recognized for Sutai acquisition (1)

1 unchanged sentence

Currency translation adjustments 3,454 3,710 8,245 15,409

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.

Goodwill impairments — ( 88,840 ) — ( 88,840 )

Balance as of June 30, 2025 $ 285,605 $ — $ 216,833 $ 502,438

(1) During the six months ended June 30, 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

Jun 30, 2025 Dec 31, 2024

Goodwill, gross $ 694,922 $ 611,498

2 unchanged sentences

Goodwill, net $ 502,438 $ 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.

(1) Accumulated impairment losses are attributable to the non-cash impairment charges of $ 88.8 million and $ 93.0 million to write down the carrying value of the EMEA reporting unit during the second quarter of 2025 and the fourth quarter of 2022, respectively.

These amounts include the impact of currency translation.

The Company completes its annual goodwill and indefinite-lived intangible asset impairment tests during the fourth quarter of each year, or more frequently if triggering events indicate a possible impairment in one or more of its reporting units.

The Company continually evaluates financial performance, economic conditions and other recent developments in assessing if a triggering event indicates that the carrying value of goodwill, indefinite-lived, or long-lived assets might be impaired.

During the second quarter of 2025, the Company concluded that the negative impacts of the lower than projected financial performance, driven by the continuation of soft end market conditions, as well as an increase in the Company’s cost of capital, driven by uncertainty around the potential negative impacts of tariffs, represented a triggering event for the Company’s EMEA reporting unit and the associated goodwill, as well as the related asset group.

As a result of this conclusion, the Company completed an interim impairment assessment as of June 30, 2025 for its EMEA reporting unit and the related asset group.

The Company concluded that the undiscounted cash flows exceeded the carrying value of the EMEA asset group, and therefore that the long-lived assets are not impaired.

In completing a quantitative goodwill impairment test, the Company compares the reporting unit’s fair value, based on future discounted cash flows, to its carrying value in order to determine if an impairment of goodwill exists.

The estimates of future discounted cash flows involve considerable judgment and are based upon certain significant assumptions including the weighted average cost of capital (“WACC”) as well as projected EBITDA, which includes assumptions related to revenue growth rates, gross margin levels and operating expenses.

As a result of the impact of the uncertainty around tariffs, and continued soft end market conditions driving lower current year EMEA earnings and a decline in projected future EMEA earnings, as well as an increase in the WACC assumption utilized in the Company’s 2024 annual impairment assessment, the Company concluded that the estimated fair value of the EMEA reporting unit was less than its carrying value.

As a result, a pre-tax, non-cash impairment charge of $ 88.8 million ($ 86.7 million after-tax) to write down the remaining carrying value amount of the EMEA reporting unit Goodwill was recorded in the second quarter of 2025, reflected in “Impairment charges” in the Consolidated Statements of Operations for the three and six months ended June 30, 2025.

Quaker Chemical Corporation

Notes to Condensed Consolidated Financial Statements - Continued

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

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

2 unchanged sentences

Amortization Net Book Value

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

June 30, 2025 December 31, 2024 June 30, 2025 December 31, 2024 June 30, 2025 December 31, 2024

Customer lists and rights to sell $ 901,686 $ 829,255 $ 324,711 $ 285,450 $ 576,975 $ 543,805

5 unchanged sentences

Three Months Ended

Six Months Ended

2025 2024 2025 2024

Amortization expense $ 16,088 $ 14,744 $ 30,325 $ 29,215

6 unchanged sentences

For the year ended December 31, 2030 59,665

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)

As of June 30, 2025 and December 31, 2024, the Company had indefinite-lived intangible assets for trademarks and tradenames totaling $ 201.2 million and $ 185.3 million, respectively.

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

As of June 30, 2025 As of December 31, 2024

Rate Outstanding

11 unchanged sentences

Total long-term debt $ 897,953 $ 669,614

Quaker Chemical Corporation

Notes to Condensed Consolidated Financial Statements - Continued

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

Credit facilities

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

As of June 30, 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 %.

The weighted average variable interest rate incurred on the outstanding borrowings under the Credit Facility during the three and six months ended June 30, 2025 was approximately 5.2 % for both periods.

As of June 30, 2025, the interest rate on the outstanding borrowings under the Credit Facility was approximately 4.9 %.

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.

The Company had unused capacity under the Revolver of approximately $ 220 million, which is net of bank letters of credit of approximately $ 2 million, as of June 30, 2025.

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 %.

As of June 30, 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.

4 unchanged sentences

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.

Quaker Chemical Corporation

Notes to Condensed Consolidated Financial Statements - Continued

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

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

As of June 30, 2025 and December 31, 2024, the Company had $ 0.9 million and $ 1.1 million, respectively, of debt issuance costs recorded as a reduction of Long-term debt and $ 1.9 million and $ 2.4 million, respectively, of debt issuance costs recorded within Other assets.

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.

As of June 30, 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.

2 unchanged sentences

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.

Total unused capacity under these arrangements as of June 30, 2025 was approximately $ 40 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.

The Company’s total bank letters of credit and guarantees outstanding as of June 30, 2025 were approximately $ 7 million.

Quaker Chemical Corporation

Notes to Condensed Consolidated Financial Statements - Continued

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

Interest expense

1 unchanged sentence

Three Months Ended

June 30, Six Months Ended

2025 2024 2025 2024

Interest expense $ 12,426 $ 11,530 $ 21,618 $ 22,812

1 unchanged sentence

Total $ 12,779 $ 11,883 $ 22,324 $ 23,518

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.

Based on the variable interest rates associated with the Credit Facility, as of June 30, 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”):

Adjustments Defined

Plans Unrealized

Gain (Loss) in

Adjustments (1)

Plans Unrealized Gain

Available-for-

1 unchanged sentence

Instruments Total

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

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

Other comprehensive income (loss) before Reclassifications 62,129 ( 1,601 ) ( 267 ) ( 130 ) 60,131

1 unchanged sentence

Related tax amounts ( 244 ) 366 56 30 208

Balance as of June 30, 2025 $ ( 103,831 ) $ ( 11,682 ) $ ( 224 ) $ 556 $ ( 115,181 )

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

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

Other comprehensive (loss) income before Reclassifications ( 18,841 ) 113 ( 58 ) ( 19 ) ( 18,805 )

1 unchanged sentence

Related tax amounts — ( 47 ) 11 4 ( 32 )

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

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

(1) Includes mark-to-market impacts associated with net investment hedges.

See Note 17, Hedging Activities , for more information.

Quaker Chemical Corporation

1 unchanged sentence

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

Adjustments 1

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 income (loss) before reclassifications 89,254 ( 2,073 ) ( 658 ) ( 899 ) 85,624

Amounts reclassified from AOCI — 252 11 — 263

Related tax amounts ( 244 ) 452 136 207 551

Balance as of June 30, 2025 $ ( 103,831 ) $ ( 11,682 ) $ ( 224 ) $ 556 $ ( 115,181 )

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

Other comprehensive (loss) income before reclassifications ( 44,157 ) 433 5 3,026 ( 40,693 )

Amounts reclassified from AOCI — 209 ( 4 ) — 205

Related tax amounts — ( 163 ) — ( 696 ) ( 859 )

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

(1) Includes mark-to-market impacts associated with net investment hedges.

See Note 17, Hedging Activities , for more information.

All reclassifications related to unrealized gain (loss) in available-for-sale securities relate to the Company’s equity interest in Primex, 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.

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.

The Company owns an immaterial amount of company-owned life insurance policies as of June 30, 2025 and December 31, 2024.

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

1 unchanged sentence

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.

To manage these risks, the Company periodically enters into derivative financial instruments, such as foreign exchange forward contracts, interest rate swap agreements, and cross-currency swap agreements.

The Company does not hold or enter into derivative financial instruments for trading or speculative purposes.

2 unchanged sentences

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.

Changes in the fair value of the underlying instrument and settlements are recognized in earnings in Other (expense) income, 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.

Open foreign exchange forward contracts as of June 30, 2025 were entered into as hedges of the Japanese yen and Mexican peso against the U.S.

dollar and had the following notional U.S.

dollar values (in millions) :

Currency March 31,

Currency June 30,

Mexican Peso $ 12,300

Japanese Yen 23,200

Quaker Chemical Corporation

Notes to Condensed Consolidated Financial Statements - Continued

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

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.

1 unchanged sentence

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 .

The Company recognized a $ 0.6 million foreign currency gain and a $ 1.4 million foreign currency loss, respectively, during the three and six months ended June 30, 2025 in Other (expense) income, net relating to the change in fair value of these instruments as of the settlement date.

Open foreign exchange forward contracts as of June 30, 2025 had maturities occurring over a period of up to one month .

Interest Rate Swaps

2 unchanged sentences

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.

Net Investment Hedges

In June 2025, the Company entered into a fixed-for-fixed cross currency swap for a notional amount of $ 75.0 million to hedge the variability of exchange rate impacts between the U.S.

Dollar and the European euro.

Under the terms of the cross-currency swap agreement, the Company notionally exchanged $ 75.0 million at an interest rate of 1.9 % for 65.8 million EUR at an interest rate of 0.0 %.

The cross-currency swap is designated as a net investment hedge on a pre-tax basis and expires in June 2027.

In April 2025, the Company entered into fixed-for-fixed cross currency swaps 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.

Under the terms of the cross-currency swap agreements, the Company notionally exchanged $ 100.0 million at a weighted average interest rate of 3.1 % for 14.3 billion JPY at a weighted average interest rate of 0.0 %.

The cross-currency swaps are designated as net investment hedges on an after-tax basis and expire in April 2028.

The fixed-for-fixed cross-currency swaps are marked to market at each reporting date and any unrealized gains or losses are included in unrealized currency translation adjustments, within AOCI.

The Company uses the spot method to evaluate the effectiveness of the net investment hedges.

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,

Derivative instruments Condensed Consolidated Balance Sheets Location June 30,

2025 December 31,

Interest rate swaps:

Other non-current assets $ 852 $ 1,621

Foreign currency forward contracts:

Other accrued liabilities 1,994 67

Net investment hedges Other non-current assets $ 1,048 $ —

Net investment hedges Other non-current liabilities 2,111 —

Interest rate swaps Other non-current assets 722 1,621

Foreign currency forward contracts Other accrued liabilities 13 67

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

Derivative instruments:

Condensed Consolidated Balance Sheets Location June 30,

2025 December 31,

Net investment hedges AOCI $ ( 818 ) $ —

Interest rate swaps AOCI 556 1,248

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:

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

Three Months Ended

June 30, Six Months Ended

Derivative instruments Condensed Consolidated Statements of Operations 2025 2024 2025 2024

Net investment hedges Interest expense $ 697 $ — $ 697 $ —

Interest rate swaps Interest expense 518 1,273 1,041 2,559

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

Foreign exchange forward contracts Other (expense) income, net 1,441 ( 1,675 ) ( 415 ) ( 732 )

Total $ 2,656 $ ( 402 ) $ 1,323 $ 1,827

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

1 unchanged sentence

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.

During the three and six months ended June 30, 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.

The Company has accrued approximately $ 5.6 million and $ 5.3 million as of June 30, 2025 and December 31, 2024, respectively, for these ongoing matters.

In addition, during the three and six months ended June 30, 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