Created in Tahoma
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
April 29, 2015
Date of Report (Date of earliest event reported)
QUAKER CHEMICAL CORPORATION
(Exact name of Registrant as specified in its charter)
Commission File Number 001-12019
| PENNSYLVANIA | No. 23-0993790 | |
| (State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
|
One Quaker Park 901 E. Hector Street Conshohocken, Pennsylvania 19428 |
| (Address of principal executive offices) |
| (Zip Code) |
| (610) 832-4000 |
| (Registrant’s telephone number, including area code) |
Not Applicable
| (Former name or former address, if changed since last report) |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
INFORMATION TO BE INCLUDED IN THE REPORT
Item 2.02. Results of Operations and Financial Condition.
On April 29, 2015, Quaker Chemical Corporation announced its results of operations for the first quarter ended March 31, 2015, in a press release, the text of which is included as Exhibit 99.1 hereto. Supplemental information related to the same period is also included as Exhibit 99.2 hereto.
Item 9.01. Financial Statements and Exhibits.
The following exhibits are included as part of this report:
| Exhibit No. | |
| 99.1 | Press Release of Quaker Chemical Corporation dated April 29, 2015. |
| 99.2 | Supplemental Information related to first quarter ended March 31, 2015. |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
|
QUAKER CHEMICAL CORPORATION Registrant | |||
| Date: April 29, 2015 | By: | /s/ Margaret m. loebl | |
|
Margaret M. Loebl Vice President, Chief Financial Officer and Treasurer | |||
Exhibit 99.1
|
NEWS
Contact: Margaret M. Loebl Vice President, Chief Financial Officer and Treasurer loeblm@quakerchem.com T. 610.832.4160 |
 |
|
For Release: Immediate |
QUAKER CHEMICAL ANNOUNCES FIRST QUARTER 2015 RESULTS
| · | Volume gains and gross margin drive good results despite foreign exchange impact |
| · | Foreign currency exchange negatively impacts sales by 7% and EPS by $0.08 per share |
| · | Strong operating cash flow generation, up $10 million from the prior year period |
April 29, 2015
CONSHOHOCKEN, PA – Quaker Chemical Corporation (NYSE: KWR) today announced net sales of $181.3 million for the first quarter of 2015 compared to the first quarter of 2014 net sales of $181.7 million. Despite year-over-year volume growth in the first quarter of 2015, these gains were offset by $12.1 million, or 7%, of lower net sales due to foreign currency exchange. Earnings per diluted share for the first quarter of 2015 were $0.78 compared to $0.96 for the first quarter of 2014, with non-GAAP earnings per diluted share for the first quarter of 2015 of $0.94 compared to $0.95 for the first quarter of 2014. The key driver in the decrease in reported earnings per diluted share compared to the first quarter of 2014 was a $2.8 million, or $0.21 per diluted share, charge related to the Company’s Venezuelan affiliate, noted below. The Company’s adjusted EBITDA was $23.2 million in the first quarter of 2015 compared to $23.7 million in the first quarter of 2014. Overall, changes in foreign exchange rates significantly impacted the Company’s first quarter of 2015 reported and non-GAAP results, decreasing net income approximately $1.1 million, or $0.08 per diluted share.
Michael F. Barry, Chairman, Chief Executive Officer and President commented, “We are pleased with our results this quarter in spite of a difficult global market with significant foreign exchange headwinds. Lower oil prices and a stronger U.S. Dollar have changed the dynamics of our customers’ markets and have negatively impacted both our top and bottom lines. However, our continued market share gains and recent acquisitions have helped us achieve stable sales and earnings despite these extreme changes in our environment.”
Mr. Barry continued, “Looking forward, we expect a challenging, but stable, market environment in many of the countries in which we operate, along with a continued strong U.S. Dollar. However, we remain committed to our strategy and believe our ability to increase market share and leverage our acquisitions will more than offset these market and exchange rate challenges. In addition, our strong cash flow and balance sheet will allow us to continue to pursue our key strategic initiatives and future acquisitions, which we believe will add significant shareholder value. Overall, I remain confident in our future and expect 2015 to be another good year for Quaker with increased earnings for the sixth consecutive year.”
Quaker Chemical Corporation
One Quaker Park, 901 E. Hector Street, Conshohocken, PA 19428-2380 USA
P: 610.832.4000 F: 610.832.8682
quakerchem.com
First Quarter of 2015 Summary
Net sales for the first quarter of 2015 of $181.3 million were generally consistent with net sales for the first quarter of 2014 of $181.7 million. Increases in product volume, including additional sales from acquisitions, were offset by a decrease of $12.1 million, or 7%, due to the negative impacts of foreign currency exchange rate translation.
Gross profit increased $1.2 million, or 2%, compared to the first quarter of 2014, which was primarily driven by the higher product volume, noted above, and increased gross margin of 36.6% for the first quarter of 2015 compared to 35.8% for the first quarter of 2014.
Selling, general and administrative expenses (“SG&A”) increased $2.7 million compared to the first quarter of 2014, which was driven by the net impact of several factors. Specifically, SG&A increased due to additional costs acquired with the Company’s prior year acquisitions, higher labor-related costs, and a first quarter of 2015 charge related to a cost streamlining initiative in South America. These SG&A increases were partially offset by decreases from foreign currency exchange rate translation and a first quarter of 2014 cost related to an amendment to the Company’s pension plan in the United Kingdom (“U.K.”).
Other expense was approximately $0.2 million in the first quarter of 2015 compared to $0.5 million in the first quarter of 2014. In both quarters, the Company’s other expense was primarily driven by foreign exchange transactional losses, with a lower net loss in the first quarter of 2015 driving the year-over-year comparison.
Interest expense was $0.1 million higher in the first quarter of 2015 compared to the first quarter of 2014, primarily due to higher average borrowings outstanding in the current quarter to fund the Company’s recent acquisition activity. Interest income was $0.1 million lower in the first quarter of 2015 compared to the first quarter of 2014, primarily due to interest received on a non-income tax credit in the first quarter of 2014.
The Company’s effective tax rates for the first quarters of 2015 and 2014 were 30.8% and 34.8%, respectively. The primary contributors to the decrease in the current quarter’s effective tax rate were lower changes in reserves related to uncertain tax positions in the first quarter of 2015 and certain one-time items that increased the first quarter of 2014’s effective tax rate. We currently estimate the full year 2015 effective tax rate will approximate 30%.
Equity in net income of associated companies (“equity income”) decreased by $2.5 million in the first quarter of 2015 compared to the first quarter of 2014, which was primarily due to the current quarter’s currency conversion charge recorded at the Company’s Venezuelan affiliate. Due to recent changes in Venezuela’s foreign exchange markets and controls, the Company re-assessed its Venezuelan affiliate’s access to U.S. Dollars and its ability to import or trade under the existing exchange markets as of March 31, 2015, which resulted in the first quarter of 2015 charge, noted above. In addition, equity income includes the Company’s interest in a captive insurance company, which was consistent in the current and prior year quarters.
The $0.4 million decrease in net income attributable to noncontrolling interest in the first quarter of 2015 compared to the first quarter of 2014 was primarily due to the Company’s second quarter of 2014 acquisition of the noncontrolling interest in its Australian affiliate.
Changes in foreign exchange rates negatively impacted the first quarter of 2015 net income by approximately $1.1 million, or $0.08 per diluted share.
Balance Sheet and Cash Flow Items
The Company had net operating cash flows of approximately $8.1 million for the first quarter of 2015, a $9.9 million increase compared to cash outflows of $1.8 million in the first quarter of 2014. The increase in net operating cash flows primarily relates to lower cash invested in the Company’s working capital during the first quarter of 2015 due to improved working capital management. Overall, the Company’s liquidity remains strong, with net debt of $8.8 million as of March 31, 2015 and a consolidated leverage ratio that continues to be less than one times EBITDA.
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Non-GAAP Measures
Included in this public release are non-GAAP (unaudited) financial measures of non-GAAP earnings per diluted share and adjusted EBITDA. The Company believes these non-GAAP financial measures provide meaningful supplemental information as they enhance a reader’s understanding of the financial performance of the Company, are more indicative of future operating performance of the Company, and facilitate a better comparison among fiscal periods, as the non-GAAP financial measures exclude items that are not considered core to the Company’s operations. Non-GAAP results are presented for supplemental informational purposes only and should not be considered a substitute for the financial information presented in accordance with GAAP.
The following are reconciliations between the non-GAAP (unaudited) financial measures of non-GAAP earnings per diluted share and adjusted EBITDA to their most directly comparable GAAP (unaudited) financial measures:
Three Months Ended March 31, | ||||||||
| 2015 | 2014 | |||||||
| GAAP earnings per diluted share attributable to Quaker Chemical Corporation common shareholders | $ | 0.78 | $ | 0.96 | ||||
| Equity income in a captive insurance company per diluted share | (0.06 | ) | (0.06 | ) | ||||
| U.K. pension plan amendment per diluted share | — | 0.05 | ||||||
| Cost streamlining initiatives per diluted share | 0.01 | — | ||||||
| Currency conversion impact of the Venezuelan Bolivar Fuerte per diluted share | 0.21 | — | ||||||
| Non-GAAP earnings per diluted share | $ | 0.94 | $ | 0.95 | ||||
Three Months Ended March 31, | ||||||||
| 2015 | 2014 | |||||||
| Net income attributable to Quaker Chemical Corporation | $ | 10,378 | $ | 12,730 | ||||
| Depreciation and amortization | 4,698 | 3,888 | ||||||
| Interest expense | 587 | 525 | ||||||
| Taxes on income before equity in net income of associated companies | 5,359 | 6,546 | ||||||
| Equity income in a captive insurance company | (795 | ) | (846 | ) | ||||
| U.K. pension plan amendment | — | 902 | ||||||
| Cost streamlining initiatives | 173 | — | ||||||
| Currency conversion impact of the Venezuelan Bolivar Fuerte | 2,806 | — | ||||||
| Adjusted EBITDA | $ | 23,206 | $ | 23,745 | ||||
Forward-Looking Statements
This release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those projected in such statements. A major risk is that the Company’s demand is largely derived from the demand for its customers’ products, which subjects the Company to downturns in a customer’s business and unanticipated customer production shutdowns. Other major risks and uncertainties include, but are not limited to, significant increases in raw material costs, customer financial stability, worldwide economic and political conditions, foreign currency fluctuations, future terrorist attacks and other acts of violence. Other factors could also adversely affect us. Therefore, we caution you not to place undue reliance on our forward-looking statements. This discussion is provided as permitted by the Private Securities Litigation Reform Act of 1995.
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Conference Call
As previously announced, Quaker Chemical’s investor conference call to discuss the first quarter of 2015 results is scheduled for April 30, 2015 at 8:30 a.m. (ET). A live webcast of the conference call, together with supplemental information, can be accessed through the Company’s Investor Relations website at http://www.quakerchem.com. You can also access the conference call by dialing 877-269-7756.
About Quaker
Quaker Chemical is a leading global provider of process fluids, chemical specialties, and technical expertise to a wide range of industries, including steel, aluminum, automotive, mining, aerospace, tube and pipe, cans, and others. For nearly 100 years, Quaker has helped customers around the world achieve production efficiency, improve product quality, and lower costs through a combination of innovative technology, process knowledge, and customized services. Headquartered in Conshohocken, Pennsylvania USA, Quaker serves businesses worldwide with a network of dedicated and experienced professionals whose mission is to make a difference.
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Quaker Chemical Corporation
Condensed Consolidated Statements of Income
(Dollars in thousands, except per share data)
| (Unaudited) | ||||||||
| Three Months Ended March 31, | ||||||||
| 2015 | 2014 | |||||||
| Net sales | $ | 181,330 | $ | 181,674 | ||||
| Cost of goods sold | 115,002 | 116,560 | ||||||
| Gross profit | 66,328 | 65,114 | ||||||
| % | 36.6 | % | 35.8 | % | ||||
| Selling, general and administrative expenses | 48,464 | 45,741 | ||||||
| Operating income | 17,864 | 19,373 | ||||||
| % | 9.9 | % | 10.7 | % | ||||
| Other expense, net | (194 | ) | (473 | ) | ||||
| Interest expense | (587 | ) | (525 | ) | ||||
| Interest income | 320 | 453 | ||||||
| Income before taxes and equity in net income of associated companies | 17,403 | 18,828 | ||||||
| Taxes on income before equity in net income of associated companies | 5,359 | 6,546 | ||||||
| Income before equity in net income of associated companies | 12,044 | 12,282 | ||||||
| Equity in net (loss) income of associated companies | (1,437 | ) | 1,027 | |||||
| Net income | 10,607 | 13,309 | ||||||
| Less: Net income attributable to noncontrolling interest | 229 | 579 | ||||||
| Net income attributable to Quaker Chemical Corporation | $ | 10,378 | $ | 12,730 | ||||
| % | 5.7 | % | 7.0 | % | ||||
| Per share data: | ||||||||
| Net income attributable to Quaker Chemical Corporation Common Shareholders - basic | $ | 0.78 | $ | 0.96 | ||||
| Net income attributable to Quaker Chemical Corporation Common Shareholders - diluted | $ | 0.78 | $ | 0.96 | ||||
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Quaker Chemical Corporation
Condensed Consolidated Balance Sheets
(Dollars in thousands, except par value and share amounts)
| (Unaudited) | ||||||||
| March 31, | December 31, | |||||||
| 2015 | 2014 | |||||||
| ASSETS | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | 64,338 | $ | 64,731 | ||||
| Accounts receivable, net | 180,402 | 189,484 | ||||||
| Inventories, net | 77,176 | 77,708 | ||||||
| Prepaid expenses and other current assets | 18,282 | 19,595 | ||||||
| Total current assets | 340,198 | 351,518 | ||||||
| Property, plant and equipment, net | 81,865 | 85,763 | ||||||
| Goodwill | 75,169 | 77,933 | ||||||
| Other intangible assets, net | 67,153 | 70,408 | ||||||
| Investments in associated companies | 20,536 | 21,751 | ||||||
| Deferred income taxes | 21,770 | 24,411 | ||||||
| Other assets | 33,586 | 33,742 | ||||||
| Total assets | $ | 640,277 | $ | 665,526 | ||||
| LIABILITIES AND EQUITY | ||||||||
| Current liabilities | ||||||||
| Short-term borrowings and current portion of long-term debt | $ | 401 | $ | 403 | ||||
| Accounts and other payables | 71,718 | 78,977 | ||||||
| Accrued compensation | 11,954 | 19,853 | ||||||
| Other current liabilities | 24,711 | 25,668 | ||||||
| Total current liabilities | 108,784 | 124,901 | ||||||
| Long-term debt | 72,698 | 75,328 | ||||||
| Deferred income taxes | 7,558 | 8,584 | ||||||
| Other non-current liabilities | 86,108 | 91,578 | ||||||
| Total liabilities | 275,148 | 300,391 | ||||||
| Equity | ||||||||
| Common stock, $1 par value; authorized 30,000,000 shares; issued and outstanding 2015 - 13,332,472 shares; 2014 - 13,300,891 shares | 13,332 | 13,301 | ||||||
| Capital in excess of par value | 100,947 | 99,056 | ||||||
| Retained earnings | 305,902 | 299,524 | ||||||
| Accumulated other comprehensive loss | (62,971 | ) | (54,406 | ) | ||||
| Total Quaker shareholders' equity | 357,210 | 357,475 | ||||||
| Noncontrolling interest | 7,919 | 7,660 | ||||||
| Total equity | 365,129 | 365,135 | ||||||
| Total liabilities and equity | $ | 640,277 | $ | 665,526 | ||||
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Quaker Chemical Corporation
Condensed Consolidated Statements of Cash Flows
(Dollars in thousands)
| (Unaudited) | ||||||||
| Three Months Ended March 31, | ||||||||
| 2015 | 2014 | |||||||
| Cash flows from operating activities | ||||||||
| Net income | $ | 10,607 | $ | 13,309 | ||||
| Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||||||||
| Depreciation | 3,071 | 3,075 | ||||||
| Amortization | 1,627 | 813 | ||||||
| Equity in undistributed earnings of associated companies, net of dividends | 1,437 | (927 | ) | |||||
| Deferred compensation and other, net | 1,091 | 2,944 | ||||||
| Stock-based compensation | 1,685 | 1,388 | ||||||
| Gain on disposal of property, plant and equipment | (21 | ) | (48 | ) | ||||
| Insurance settlements realized | (115 | ) | (337 | ) | ||||
| Pension and other postretirement benefits | 10 | (1,665 | ) | |||||
| Increase (decrease) in cash from changes in current assets and current liabilities, net of acquisitions: | ||||||||
| Accounts receivable | 3,428 | (13,387 | ) | |||||
| Inventories | (2,584 | ) | (6,389 | ) | ||||
| Prepaid expenses and other current assets | (2,634 | ) | (29 | ) | ||||
| Accounts payable and accrued liabilities | (9,516 | ) | (544 | ) | ||||
| Net cash provided by (used in) operating activities | 8,086 | (1,797 | ) | |||||
| Cash flows from investing activities | ||||||||
| Investments in property, plant and equipment | (2,414 | ) | (3,057 | ) | ||||
| Payments related to acquisitions, net of cash acquired | 528 | - | ||||||
| Proceeds from disposition of assets | 80 | 58 | ||||||
| Interest earned on insurance settlements | 10 | 11 | ||||||
| Change in restricted cash, net | 105 | 326 | ||||||
| Net cash used in investing activities | (1,691 | ) | (2,662 | ) | ||||
| Cash flows from financing activities | ||||||||
| Repayment of long-term debt | (1,327 | ) | (232 | ) | ||||
| Dividends paid | (3,990 | ) | (3,300 | ) | ||||
| Stock options exercised, other | (50 | ) | (205 | ) | ||||
| Excess tax benefit related to stock option exercises | 287 | 239 | ||||||
| Net cash used in financing activities | (5,080 | ) | (3,498 | ) | ||||
| Effect of exchange rate changes on cash | (1,708 | ) | (85 | ) | ||||
| Net decrease in cash and cash equivalents | (393 | ) | (8,042 | ) | ||||
| Cash and cash equivalents at the beginning of the period | 64,731 | 68,492 | ||||||
| Cash and cash equivalents at the end of the period | $ | 64,338 | $ | 60,450 | ||||
Exhibit 99.2
1 First Quarter 2015 Results Investor Conference Call April 30, 2015 Quaker Chemical Corporation
Regulation G The attached charts include Company information that does not conform to generally accepted accounting principles ( “GAAP”). Management believes that an analysis of this data is meaningful to investors because it provides insight with respect to ongoing operating results of the Company and allows investors to better evaluate the financial results of the Company. These measures should not be viewed as an alternative to GAAP measures of performance. Furthermore, these measures may not be consis tent with similar measures provided by other companies. This data should be read in conjunction with the Company’s first quarter earnings news release dated April 29, 2015, which has been furnished to the SEC on Form 8-K and the Company’s Form 10-Q for the period ended March 31, 2015, which has been filed with the SEC. Forward-Looking Statements This presentation may contain forward-looking statements that are subject to certain risks and uncertainties that could cause actual results to differ material ly from those projected in such statements. A major risk is that the Company’s demand is largely derived from the demand for its customers’ products, which subjects the Company to downturns in a customer’s business and unanticipated customer production shutdowns. Other major risks and uncertainties include, but are not limited to, significant increases in raw material costs, customer financial stability, worldwide economic and political conditions, foreign currency fluctuations, future terrorist attacks and other acts of violence. Other factors could also adversely affect us. Therefore, we caution you not to place undue reliance on our forward-looking statements. This discussion is provided as permitted by the Private Securities Litigation Reform Act of 1995. Risks and Uncertainties Statement
Speakers Chart #1 Michael F. Barry Chairman of the Board, Chief Executive Officer & President Margaret M. Loebl Vice President, Chief Financial Officer & Treasurer Robert T. Traub Vice President, General Counsel & Corporate Secretary
First Quarter 2015 Headlines ▪ Volume gains and gross margin drive good results despite foreign exchange impact ▪ Foreign currency exchange negatively impacts sales by 7% and EPS by $0.08 per share ▪ Strong operating cash flow generation, up $10 million from the prior year period Chart #2
Chairman Comments First Quarter 2015 ▪ First Quarter 2015 x Volume gains largely offset foreign exchange impact to net sales x Lower oil prices and stronger U.S. Dollar changing the dynamics of customers’ markets x Market share gains continue in a challenging global environment x Strong cash flow generation and balance sheet will continue to enable key strategic initiatives and acquisitions ▪ 2015 Outlook x Global end use markets expect to be relatively stable x Continued foreign exchange impacts expected from strong U.S. Dollar x Anticipate growth from increasing market share and leveraging acquisitions “Overall, we remain confident in our future and expect 2015 to be another good year for Quaker with increased earnings for the sixth consecutive year.” -- Michael F. Barry, Chairman, CEO & President Chart #3
1) Increased volumes, including recent acquisitions, offset 7% decline on net sales from foreign currency exchange 2) Changes in foreign exchange rates decrease earnings by $0.08 per share 3) Increased gross margin in the current quarter driven by changes in price and product mix 4) Currency related charge of $2.8 million related to the Company’s Venezuelan affiliate 5) Strong operating cash flow of $8.1 million 6) Continued strength in balance sheet for future acquisitions Chart #4 Chief Financial Officer – Highlights First Quarter 2015
Product Volume by Quarter Thousand Kilograms 25,000 30,000 35,000 40,000 45,000 50,000 55,000 60,000 4Q08 YTD Avg. 1Q092Q093Q094Q091Q102Q103Q104Q101Q112Q113Q114Q111Q122Q123Q124Q121Q132Q133Q134Q131Q142Q143Q144Q141Q15 Chart #5
Financial Snapshot Q1 2015 Q1 2014 Net Sales ($Mils.) 181.3 181.7 Gross Margin (%) 36.6 35.8 Operating Margin (%) 9.9 10.7 Net Income attributable to Quaker Chemical Corporation ($Mils.) 10.4 12.7 Adjusted EBITDA ($Mils.) – Trailing Twelve Months 99.3 92.0 Adjusted EBITDA Margin (%) 13.0 12.5 Earnings Per Diluted Share 0.78 0.96 Non - GAAP Earnings Per Diluted Share 0.94 0.95 Debt ($Mils.) 73.1 18.5 Equity ($Mils.) 365.1 358.0 Net Operating Cash Flow ($Mils.) 8.1 (1.8) Chart #6
Gross Margin Percentage 28.0% 34.7% 35.4% 32.6% 33.7% 35.8% 35.7% 20.0% 25.0% 30.0% 35.0% 40.0% 2008 2009 2010 2011 2012 2013 2014 Gross Margin Percentage 35.8% 35.7% 35.4% 35.9% 36.6% 20.0% 25.0% 30.0% 35.0% 40.0% Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Gross Margin Percentage Chart #7
Adjusted EBITDA Baseline Historical Performance $40.1 $66.8 $73.0 $80.9 $89.6 $99.8 $99.3 $44.2 9.8% 12.3% 10.7% 11.4% 12.3% 13.0% 13.0% 6.9% 2008 2009 2010 2011 2012 2013 2014 Trailing Twelve Months Q1 2015 Adjusted EBITDA ($ Mils.) Adjusted EBITDA Margin (%) 2008 – 2015 CAGR: 13.8% +610 Margin bps Chart #8
Balance Sheet Net Cash / (Debt) -$100 -$80 -$60 -$40 -$20 $0 $20 $40 $60 $80 2008 2009 2010 2011 2012 2013 2014 Q1 2015 $ Millions Cash ST/LT Debt Net Debt Chart #9
APPENDIX
Non - GAAP Earnings Per Diluted Share Reconciliation Chart #10 Q1 2015 Q1 2014 GAAP earnings per diluted share 0.78$ 0.96$ Equity income in a captive insurance company per diluted share (0.06)$ (0.06)$ U.K. pension plan amendment per diluted share -$ 0.05$ Cost streamlining initiative per diluted share 0.01$ -$ Currency conversion impact of the Venezuelan Bolivar Fuerte per diluted share 0.21$ -$ Non-GAAP earnings per diluted share 0.94$ 0.95$
Adjusted EBITDA Reconciliation Chart #11 2008 2009 2010 2011 2012 2013 2014 Net income 9,833 16,058 32,120 45,892 47,405 56,339 56,492 Depreciation 10,879 9,525 9,867 11,455 12,252 12,339 12,306 Amortization 1,177 1,078 988 2,338 3,106 3,445 4,325 Interest expense 5,509 5,533 5,225 4,666 4,283 2,922 2,371 Taxes on income 4,977 7,065 12,616 14,256 15,575 20,489 23,539 Restructuring and related activities 2,916 2,289 - - - - - Non-income tax contingency charge - - 4,132 - - 796 - Equity affiliate out of period charge - - 564 - - - - Mineral oil excise tax refund - - - - - (2,540) - Transition costs related to key employees 3,505 2,443 1,317 - 609 - - Non-cash gain from the purchase of an equity affiliate - - - (2,718) - - - Change in acquisition-related earnout liability - - - (595) (1,737) (497) - Equity loss (income) from a captive insurance company 1,299 162 (313) (2,323) (1,812) (5,451) (2,412) Currency conversion impacts of the Venezuelan Bolivar - - 322 - - 357 321 Customer bankruptcies - - - - 1,254 - 825 Cost streamlining initiatives - - - - - 1,419 1,166 U.K. pension plan amendment - - - - - - 902 Adjusted EBITDA 40,095 44,153 66,838 72,971 80,935 89,618 99,835 Adjusted EBITDA Margin 6.9% 9.8% 12.3% 10.7% 11.4% 12.3% 13.0%
Trailing Twelve Months Adjusted EBITDA Reconciliation Chart #12 I = G + H H G = F - D F E = C + D D C = B - A B A Trailing Twelve Months Q1 2015 Q1 2015 Last Nine Months 2014 YTD 2014 Trailing Twelve Months Q1 2014 Q1 2014 Last Nine Months 2013 YTD 2013 Q1 2013 Net income 54,140 10,378 43,762 56,492 55,450 12,730 42,720 56,339 13,619 Depreciation 12,302 3,071 9,231 12,306 12,358 3,075 9,283 12,339 3,056 Amortization 5,139 1,627 3,512 4,325 3,379 813 2,566 3,445 879 Interest expense 2,433 587 1,846 2,371 2,703 525 2,178 2,922 744 Taxes on income 22,352 5,359 16,993 23,539 22,902 6,546 16,356 20,489 4,133 Non-income tax contingency - - - - 796 - 796 796 - Mineral oil excise tax refund - - - - (2,540) - (2,540) (2,540) - Change in acquisition-related earnout liability - - - - (497) - (497) (497) - Equity income from a captive insurance company (2,361) (795) (1,566) (2,412) (4,862) (846) (4,016) (5,451) (1,435) Currency conversion impacts of the Venezuelan Bolivar 3,127 2,806 321 321 - - - 357 357 Customer bankruptcies 825 - 825 825 - - - - - Cost streamlining initiatives 1,339 173 1,166 1,166 1,419 - 1,419 1,419 - U.K. pension plan amendment - - - 902 902 902 - - - Adjusted EBITDA 99,296 23,206 76,090 99,835 92,010 23,745 68,265 89,618 21,353 Adjusted EBITDA Margin 13.0% 12.8% 13.0% 13.0% 12.5% 13.1% 12.3% 12.3% 12.1%