Quaker Chemical Reports 6% Decline in Net Sales and Lower Net Income in Q1 2025

Quaker Chemical Corporation reported a decline in financial performance for the first quarter of 2025, with net sales totaling $442.9 million, a decrease of 6% from $469.8 million in the same period of 2024. The decline was attributed to a 3% drop in sales volumes, a 3% unfavorable impact from foreign currency translation, and a 1% decrease in selling prices and product mix. The company noted that the decrease in sales volumes was primarily due to ongoing soft market conditions and uncertainties related to tariffs, particularly in the Europe, Middle East, and Africa (EMEA) and Americas segments. However, there was a slight offset from an increase in sales volumes in the Asia/Pacific segment and contributions from recent acquisitions.

Net income for the quarter was $12.9 million, or $0.73 per diluted share, compared to $35.2 million, or $1.95 per diluted share, in the prior year. The decrease in earnings was largely driven by lower net sales, reduced gross margins, and higher restructuring charges, which amounted to $14.6 million in the first quarter of 2025, compared to $1.9 million in the same quarter of 2024. Adjusted EBITDA for the quarter was $69.0 million, down from $83.3 million in the previous year, reflecting the impact of lower sales and gross margins.

In terms of strategic developments, Quaker Chemical made several acquisitions in early 2025, including Dipsol Chemicals Co., Ltd. for approximately $187 million, Natech, Ltd. for $6.5 million, and Chemical Solutions & Innovations (CSI) for $3.9 million. These acquisitions are expected to enhance the company's product offerings and market presence, particularly in the automotive and industrial applications sectors. The company also reported a restructuring program aimed at optimizing its cost structure, which is expected to yield annualized savings of $20 million.

Operationally, Quaker Chemical's total assets increased to $2.66 billion as of March 31, 2025, up from $2.61 billion at the end of 2024. The company’s cash and cash equivalents stood at $186.2 million, slightly down from $188.9 million at the end of the previous year. The company’s total debt increased to $737.0 million, reflecting borrowings to fund acquisitions and operational needs. The company maintained compliance with its credit facility covenants and reported a weighted average interest rate of approximately 5.0% on its outstanding borrowings.

Looking ahead, Quaker Chemical anticipates continued challenges due to soft market conditions and uncertainties in global trade. However, the company remains focused on executing its strategic priorities, including leveraging recent acquisitions and optimizing its cost structure. The management expressed confidence in the company's ability to navigate these challenges and achieve its financial and operational goals in the coming quarters.