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
 
October 28, 2014
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 October 28, 2014, Quaker Chemical Corporation announced its results of operations for the third quarter ended September 30, 2014, 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 October 28, 2014.	
 	 	
99.2	Supplemental Information related to third quarter ended September 30, 2014.	
 
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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:  October 28, 2014	 	By:	/S/ MARGARET M. LOEBL	
 	 	 	Margaret M. Loebl
Vice President, Chief Financial
Officer and Treasurer	

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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 THIRD QUARTER 2014 RESULTS
 
·         8% revenue growth on increased product volume
·         Operating income drives non-GAAP earnings per diluted share up 31% to $1.19
·         Net operating cash flow of approximately $30 million generated in the quarter

October 28, 2014
 
CONSHOHOCKEN, PA - Quaker Chemical Corporation (NYSE: KWR) today announced an 8% increase in net sales to $198.9 million for the third quarter of 2014 compared to the third quarter of 2013 net sales of $184.1 million. Earnings per diluted share for the third quarter of 2014 were $1.18 compared to $0.95 for the third quarter of 2013, with non-GAAP earnings per diluted share increasing 31% to $1.19 for the third quarter of 2014 compared to $0.91 for the third quarter of 2013. The Company’s adjusted EBITDA increased 16% to $26.5 million for the third quarter of 2014 compared to $22.8 million for the third quarter of 2013. For the first nine months of 2014, the Company’s net sales increased 5% to $571.8 million from $545.1 million for the first nine months of 2013. Earnings per diluted share for the first nine months of 2014 were $3.31 compared to $3.21 for the first nine months of 2013, with non-GAAP earnings per diluted share increasing 14% to $3.26 for the first nine months of 2014 from $2.87 for the first nine months of 2013. The Company’s adjusted EBITDA increased 11% to $76.1 million for the first nine months of 2014 from $68.6 million for the first nine months of 2013.
 
Michael F. Barry, Chairman, Chief Executive Officer and President commented, "We are very pleased with our third quarter results despite the continued challenges in Brazil, as well as the overall slowing global economy. Our above-market revenue growth of 8% and strong earnings growth are a testament to the strength of our people, business model and competitive positioning. Our geographic diversification continues to help us as we experienced double-digit growth in each of our three largest regions (North America, Europe and Asia/Pacific), which more than offset a decline in our smallest region (South America), due to poor economic conditions.”
 
Mr. Barry continued, "Looking forward, we are seeing an uncertain economic environment in many countries throughout the world. However, we do believe our track record of increasing our market share and leveraging our recent acquisitions will continue and help offset the market issues we may experience. In addition, our strong cash flow and balance sheet will allow us to continue to pursue strategic, value creating acquisitions like our recent acquisition of ECLI Products, LLC in August. Overall, I continue to remain confident in our future and expect 2014 to be another good year for Quaker."

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	

 	

 
Third Quarter of 2014 Summary
 
Net sales for the third quarter of 2014 of $198.9 million increased approximately 8% from net sales of $184.1 million for the third quarter of 2013, primarily due to higher product volumes. Included in the Company’s net sales growth for the third quarter of 2014 was 1.7% of additional sales from its acquisition of ECLI Products, LLC (“ECLI”).
 
Gross profit increased approximately $4.3 million, or approximately 7%, from the third quarter of 2013 on the increase from sales volumes, noted above, on relatively consistent gross margins of 35.4% and 35.9% for the third quarter of 2014 and the third quarter of 2013, respectively.
 
Selling, general and administrative expenses (“SG&A”) increased approximately $2.6 million from the third quarter of 2013. The increase in SG&A was driven by higher labor-related costs primarily on increased sales and merit inflation, incentive compensation increases, acquisition-related costs and a U.S. customer bankruptcy, partially offset by the Company’s prior year cost streamlining initiatives and the effects of foreign exchange.
 
The Company had other income of $0.9 million in the third quarter of 2014 compared to other expense of $0.7 million in the third quarter of 2013. The change to other income for the third quarter of 2014 was the result of foreign exchange gains and receipts of annual government grants in one of the Company’s regions. Comparatively, the third quarter of 2013 had significant foreign exchange losses and minimal related government grants, as the majority of such grants were recognized in different quarters of the prior year.
 
Interest expense was slightly lower in the third quarter of 2014 compared to the third quarter of 2013. The Company incurred additional interest expense in the current quarter on higher average borrowings due to its recent acquisition activity, but this was more than offset by prior year interest expense from the accretion of an acquisition-related earnout liability that was settled in 2014.
 
Interest income was higher in the third quarter of 2014 compared to the third quarter of 2013, primarily due to interest received on certain tax-related credits and an increase in the level of the Company’s invested cash in regions with higher returns.
 
The Company’s effective tax rates for the third quarters of 2014 and 2013 were 26.7% and 33.8%, respectively. The Company has historically recognized a third quarter tax rate that is lower than its annual effective tax rate. However, in the prior year, the Company’s effective tax rate was impacted by its Asia/Pacific region, where it was recording tax expense at the local statutory tax rate of 25% while awaiting recertification of a concessionary tax rate.
 
Equity in net income of associated companies (“equity income”) decreased $1.2 million in the third quarter of 2014 compared to the third quarter of 2013. The primary component of the Company’s equity income is its interest in a captive insurance company, which was higher in the prior year period.
 
The $0.3 million decrease in net income attributable to noncontrolling interest in the third quarter of 2014 compared to the third quarter of 2013 was primarily due to the Company’s second quarter of 2014 acquisition of the noncontrolling interest in its Australian affiliate.
 
Overall, the Company realized a minimal impact to its net income from its current quarter acquisitions, as their respective operational results were offset by acquisition-related costs and initial adjustments related to fair value accounting.
  
Changes in foreign exchange rates positively impacted the third quarter of 2014 net income by approximately $0.1 million, or $0.01 per diluted share.

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	

 	

Year-to-Date 2014 Summary
 
Net sales for the first nine months of 2014 of $571.8 million increased 5% from $545.1 million for the first nine months of 2013, primarily due to higher product volumes.
 
Gross profit increased approximately $7.7 million, or approximately 4%, from the first nine months of 2013, which was primarily driven by the increase in sales volumes, noted above, on relatively consistent gross margins of 35.6% and 35.9% for the first nine months of 2014 and the first nine months of 2013, respectively.
 
SG&A increased approximately $2.9 million from the first nine months of 2013. The increase in SG&A was driven by higher labor-related costs primarily on increased sales and merit inflation, acquisition-related costs, a U.S. customer bankruptcy and, also, additional costs related to an amendment to the Company’s pension plan in the United Kingdom (“UK”). These increases to the first nine months of 2014 SG&A were partially offset by lower incentive compensation costs, decreases in foreign currency exchange rate translation and additional costs in the prior year related to the Company’s cost streamlining initiatives in Europe and South America.
 
The $1.4 million decrease in other income in the first nine months of 2014 from other income in the first nine months of 2013 was primarily caused by the Company’s prior year receipt of a mineral oil excise tax refund net of the prior year expense related to a change in an acquisition-related earnout liability.
 
Interest expense was lower in the first nine months of 2014 compared to the first nine months of 2013, primarily due to decreases in average borrowings, lower average interest rates and the prior year interest accretion on an acquisition-related earnout liability, discussed above.
 
Interest income was higher in the first nine months of 2014 compared to the first nine months of 2013, primarily due to interest received on several tax-related credits and an increase in the average level of the Company’s cash on hand in the current year.
 
The Company’s effective tax rates for the first nine months of 2014 and 2013 were relatively consistent at 30.5% and 30.0%, respectively. The Company still estimates that its full year 2014 effective tax rate will approximate 31%.
 
The decrease in the Company’s equity income of $2.2 million from the first nine months of 2013 to the first nine months of 2014 was primarily caused by lower earnings related to the Company’s equity interest in a captive insurance company. In addition, the Company’s equity income for both the first nine months of 2014 and the first nine months of 2013 include comparable currency charges related to the conversion of the Venezuelan Bolivar Fuerte to the U.S. Dollar.
 
The primary component of the $0.4 million decrease in net income attributable to noncontrolling interest from the first nine months of 2013 was the Company’s acquisition of the noncontrolling interest in its Australian affiliate, discussed above.
 
Changes in foreign exchange rates negatively impacted the first nine months of 2014 net income by approximately $0.7 million, or $0.05 per diluted share.
  
Balance Sheet and Cash Flow Items
 
Strong quarterly earnings and improved working capital management drove net operating cash flows of approximately $29.8 million for the third quarter of 2014 compared to $24.5 million in the third quarter of 2013, which increased the Company’s year-to-date net operating cash flow to $38.0 million compared to $51.9 million for the first nine months of 2013. Overall, the Company’s liquidity remains strong, as its cash position continued to exceed its debt at September 30, 2014 and, also, the Company’s consolidated leverage ratio continued to be less than one times EBITDA, despite the added borrowings for the $52.0 million purchase of ECLI.
 
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Non-GAAP Measures
 
Included in this public release are non-GAAP 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
September 30,	 	 	Nine Months Ended
September 30,	 	
 	 	2014	 	 	2013	 	 	2014	 	 	2013	 	
GAAP earnings per diluted share attributable to Quaker Chemical Corporation Common Shareholders	 	$	1.18	 	 	$	0.95	 	 	$	3.31	 	 	$	3.21	 	
UK pension plan amendment per diluted share	 	 	-	 	 	 	-	 	 	 	0.05	 	 	 	-	 	
U.S. customer bankruptcy per diluted share	 	 	0.02	 	 	 	-	 	 	 	0.02	 	 	 	-	 	
Mineral oil excise tax refund per diluted share	 	 	-	 	 	 	-	 	 	 	-	 	 	 	(0.14	)	
Change in acquisition-related earnout liability per diluted share	 	 	-	 	 	 	-	 	 	 	-	 	 	 	0.03	 	
Cost streamlining initiatives per diluted share	 	 	-	 	 	 	0.05	 	 	 	0.02	 	 	 	0.07	 	
Currency conversion impacts of the Venezuelan Bolivar Fuerte per diluted share	 	 	-	 	 	 	-	 	 	 	0.02	 	 	 	0.03	 	
Equity income in a captive insurance company per diluted share	 	 	(0.01	)	 	 	(0.09	)	 	 	(0.16	)	 	 	(0.33	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Non-GAAP earnings per diluted share	 	$	1.19	 	 	$	0.91	 	 	$	3.26	 	 	$	2.87	 	

 
 	 	Three Months Ended
September 30,	 	 	Nine Months Ended
September 30,	 	
 	 	2014	 	 	2013	 	 	2014	 	 	2013	 	
Net income attributable to Quaker Chemical Corporation	 	$	15,696	 	 	$	12,551	 	 	$	43,853	 	 	$	42,253	 	
Depreciation and amortization	 	 	4,196	 	 	 	3,952	 	 	 	11,908	 	 	 	11,840	 	
Interest expense	 	 	641	 	 	 	717	 	 	 	1,747	 	 	 	2,223	 	
Taxes on income before equity in net income of associated companies	 	 	5,724	 	 	 	5,972	 	 	 	18,808	 	 	 	16,933	 	
UK pension plan amendment	 	 	-	 	 	 	-	 	 	 	902	 	 	 	-	 	
U.S. customer bankruptcy	 	 	310	 	 	 	-	 	 	 	310	 	 	 	-	 	
Mineral oil excise tax refund	 	 	-	 	 	 	-	 	 	 	-	 	 	 	(2,540	)	
Change in acquisition-related earnout liability	 	 	-	 	 	 	-	 	 	 	-	 	 	 	675	 	
Cost streamlining initiatives	 	 	-	 	 	 	875	 	 	 	348	 	 	 	1,277	 	
Currency conversion impacts of the Venezuelan Bolivar Fuerte	 	 	-	 	 	 	-	 	 	 	321	 	 	 	357	 	
Equity income in a captive insurance company	 	 	(72	)	 	 	(1,247	)	 	 	(2,142	)	 	 	(4,378	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Adjusted EBITDA	 	$	26,495	 	 	$	22,820	 	 	$	76,055	 	 	$	68,640	 	

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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.
 
Conference Call
 
As previously announced, Quaker Chemical’s investor conference call to discuss the third quarter of 2014 results is scheduled for October 29, 2014 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 Statement of Income	
(Dollars in thousands, except per share amounts)	

 	 	(Unaudited)	 	 	(Unaudited)	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Three Months Ended September 30,	 	 	Nine Months Ended September 30,	 	
 	 	2014	 	 	2013	 	 	2014	 	 	2013	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Net sales	 	$	198,867	 	 	$	184,059	 	 	$	571,827	 	 	$	545,098	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Cost of goods sold	 	 	128,567	 	 	 	118,069	 	 	 	368,197	 	 	 	349,186	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Gross profit	 	 	70,300	 	 	 	65,990	 	 	 	203,630	 	 	 	195,912	 	
%	 	 	35.4	%	 	 	35.9	%	 	 	35.6	%	 	 	35.9	%	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Selling, general and administrative expenses	 	 	49,747	 	 	 	47,183	 	 	 	142,759	 	 	 	139,901	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Operating income	 	 	20,553	 	 	 	18,807	 	 	 	60,871	 	 	 	56,011	 	
%	 	 	10.3	%	 	 	10.2	%	 	 	10.6	%	 	 	10.3	%	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Other income (expense), net	 	 	914	 	 	 	(685	)	 	 	558	 	 	 	1,962	 	
Interest expense	 	 	(641	)	 	 	(717	)	 	 	(1,747	)	 	 	(2,223	)	
Interest income	 	 	642	 	 	 	267	 	 	 	1,990	 	 	 	665	 	
Income before taxes and equity in net income of associated companies	 	 	21,468	 	 	 	17,672	 	 	 	61,672	 	 	 	56,415	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Taxes on income before equity in net income of associated companies	 	 	5,724	 	 	 	5,972	 	 	 	18,808	 	 	 	16,933	 	
Income before equity in net income of associated companies	 	 	15,744	 	 	 	11,700	 	 	 	42,864	 	 	 	39,482	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Equity in net income of associated companies	 	 	375	 	 	 	1,605	 	 	 	2,506	 	 	 	4,689	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net income	 	 	16,119	 	 	 	13,305	 	 	 	45,370	 	 	 	44,171	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Less: Net income attributable to noncontrolling interest	 	 	423	 	 	 	754	 	 	 	1,517	 	 	 	1,918	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net income attributable to Quaker Chemical Corporation	 	$	15,696	 	 	$	12,551	 	 	$	43,853	 	 	$	42,253	 	
%	 	 	7.9	%	 	 	6.8	%	 	 	7.7	%	 	 	7.8	%	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Per share data:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net income attributable to Quaker Chemical Corporation Common Shareholders - basic	 	$	1.18	 	 	$	0.95	 	 	$	3.31	 	 	$	3.21	 	
Net income attributable to Quaker Chemical Corporation Common Shareholders - diluted	 	$	1.18	 	 
 	$	0.95	 	 	$	3.31	 	 	$	3.21	 	

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Quaker Chemical Corporation	
Condensed Consolidated Balance Sheet	
(Dollars in thousands, except par value and share amounts)	
 	 	 	 	 	 	 	
 	 	(Unaudited)	 	
 	 	 	 	 	 	 	
 	 	 	September 30,	 	 	 	December 31, 	 	
 	 	 	2014	 	 	 	2013	 	
ASSETS	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	
Current assets	 	 	 	 	 	 	 	 	
Cash and cash equivalents	 	$	64,221	 	 	$	68,492	 	
Accounts receivable, net	 	 	188,982	 	 	 	165,629	 	
Inventories	 	 	80,534	 	 	 	71,557	 	
Prepaid expenses and other current assets	 	 	19,818	 	 	 	23,169	 	
Total current assets	 	 	353,555	 	 	 	328,847	 	
 	 	 	 	 	 	 	 	 	
Property, plant and equipment, net	 	 	83,796	 	 	 	85,488	 	
Goodwill	 	 	70,053	 	 	 	58,151	 	
Other intangible assets, net	 	 	59,301	 	 	 	31,272	 	
Investments in associated companies	 	 	21,149	 	 	 	19,397	 	
Deferred income taxes	 	 	21,996	 	 	 	24,724	 	
Other assets	 	 	34,360	 	 	 	36,267	 	
Total assets	 	$	644,210	 	 	$	584,146	 	
 	 	 	 	 	 	 	 	 	
LIABILITIES AND EQUITY	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	
Current liabilities	 	 	 	 	 	 	 	 	
Short-term borrowings and current portion of long-term debt	 	$	571	 	 	$	1,395	 	
Accounts and other payables	 	 	85,888	 	 	 	75,580	 	
Accrued compensation	 	 	16,058	 	 	 	20,801	 	
Other current liabilities	 	 	28,362	 	 	 	33,080	 	
Total current liabilities	 	 	130,879	 	 	 	130,856	 	
Long-term debt	 	 	62,009	 	 	 	17,321	 	
Deferred income taxes	 	 	5,920	 	 	 	6,729	 	
Other non-current liabilities	 	 	78,391	 	 	 	84,544	 	
Total liabilities	 	 	277,199	 	 	 	239,450	 	
 	 	 	 	 	 	 	 	 	
Equity	 	 	 	 	 	 	 	 	
Common stock, $1 par value; authorized 30,000,000 shares; issued and outstanding 2014 - 13,269,266 shares; 2013 - 13,196,140 shares	 	 	13,269	 	 	 	13,196	 	
Capital in excess of par value	 	 	96,717	 	 	 	99,038	 	
Retained earnings	 	 	290,876	 	 	 	258,285	 	
Accumulated other comprehensive loss	 	 	(41,413	)	 	 	(34,700	)	
Total Quaker shareholders' equity	 	 	359,449	 	 	 	335,819	 	
Noncontrolling interest	 	 	7,562	 	 	 	8,877	 	
Total equity	 	 	367,011	 	 	 	344,696	 	
Total liabilities and equity	 	$	644,210	 	 	$	584,146	 	
 
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Quaker Chemical Corporation	
Condensed Consolidated Statement of Cash Flows	
For the Nine months ended September 30,	
(Dollars in thousands)	

 	 	(Unaudited)	 	
 	 	2014	 	 	2013	 	
Cash flows from operating activities	 	 	 	 	 	 	 	 	
Net income	 	$	45,370	 	 	$	44,171	 	
Adjustments to reconcile net income to net cash provided by operating activities:	 	 	 	 	 	 	 	 	
Depreciation	 	 	9,154	 	 	 	9,219	 	
Amortization	 	 	2,754	 	 	 	2,621	 	
Equity in undistributed earnings of associated companies, net of dividends	 	 	(2,306	)	 	 	(2,525	)	
Deferred compensation and other, net	 	 	1,672	 	 	 	(50	)	
Stock-based compensation	 	 	3,959	 	 	 	3,133	 	
(Gain) loss on disposal of property, plant and equipment	 	 	(125	)	 	 	193	 	
Insurance settlements realized	 	 	(1,214	)	 	 	(731	)	
Pension and other postretirement benefits	 	 	178	 	 	 	(561	)	
(Decrease) increase in cash from changes in current assets and current liabilities, net of acquisitions:	 	 	 	 	 	 	 	 	
Accounts receivable	 	 	(23,061	)	 	 	(13,222	)	
Inventories	 	 	(9,143	)	 	 	(4,569	)	
Prepaid expenses and other current assets	 	 	1,332	 	 	 	1,017	 	
Accounts payable and accrued liabilities	 	 	9,470	 	 	 	13,256	 	
Net cash provided by operating activities	 	 	38,040	 	 	 	51,952	 	
 	 	 	 	 	 	 	 	 	
Cash flows from investing activities	 	 	 	 	 	 	 	 	
Investments in property, plant and equipment	 	 	(8,376	)	 	 	(7,330	)	
Payments related to acquisitions, net of cash acquired	 	 	(51,947	)	 	 	(2,478	)	
Proceeds from disposition of assets	 	 	178	 	 	 	391	 	
Interest earned on insurance settlements	 	 	34	 	 	 	40	 	
Change in restricted cash, net	 	 	1,180	 	 	 	691	 	
Net cash used in investing activities	 	 	(58,931	)	 	 	(8,686	)	
 	 	 	 	 	 	 	 	 	
Cash flows from financing activities	 	 	 	 	 	 	 	 	
Proceeds from long-term debt	 	 	45,000	 	 	 	-	 	
Repayment of long-term debt	 	 	(1,106	)	 	 	(12,289	)	
Dividends paid	 	 	(10,580	)	 	 	(9,721	)	
Stock options exercised, other	 	 	(194	)	 	 	(510	)	
Excess tax benefit related to stock option exercises	 	 	430	 	 	 	815	 	
Purchase of a noncontrolling interest in an affiliate	 	 	(7,422	)	 	 	-	 	
Payment of acquisition-related earnout liability	 	 	(4,709	)	 	 	-	 	
Distributions to noncontrolling affiliate shareholders	 	 	(1,806	)	 	 	(30	)	
Net cash provided by (used in) financing activities	 	 	19,613	 	 	 	(21,735	)	
 	 	 	 	 	 	 	 	 	
Effect of exchange rate changes on cash	 	 	(2,993	)	 	 	(133	)	
Net (decrease) increase in cash and cash equivalents	 	 	(4,271	)	 	 	21,398	 	
Cash and cash equivalents at the beginning of the period	 	 	68,492	 	 	 	32,547	 	
Cash and cash equivalents at the end of the period	 	$	64,221	 	 	$	53,945	 	

Exhibit 99.2

1 Third Quarter 2014 Results Investor Conference Call October 29, 2014 Quaker Chemical Corporation

 	

Regulation G The attached charts include C ompany 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 consiste nt with simi lar measures provided by other companies. This data should b e read in conjunction with the C ompany’s third quarter earnings news release dated October 28, 2014, which has been furnished to the SEC on Form 8-K, and the Company’s Form 10-Q for the quarterly period ended September 30, 2014, 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 d iffer 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, for eign 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 General Counsel

 	

Third Quarter 2014 Headlines ▪ 8% revenue growth on increased product volume ▪ Operating income drives non - GAAP earnings per diluted share up 31% to $1.19 ▪ Net operating cash flows of approximately $30 million generated in the quarter Chart #2

 	

Chairman Comments Third Quarter 2014 ▪ Third Quarter 2014 x Strong volumes drive above - market sales growth x Double - digit growth in North America, Asia Pacific and Europe, partially offset by poor economic conditions in South America x Stable margins x Effective business model & competitive position x Solid net operating cash flow in the quarter ▪ Outlook x Uncertain conditions due to a slowing global economy and a strengthening U.S. Dollar x Potential lower volume due to fourth quarter seasonality x Expect further share gains & leverage from acquisitions “Overall, I continue to remain confident in our future and expect 2014 to be another good year for Quaker.” -- Michael F. Barry, Chairman, CEO & President Chart #3

 	

Chief Financial Officer -- Highlights 1) Record Volume Drives Above - Market Growth in Net Sales 2) Stable Margins Continue to Drive Strong Operating Results 3) Below Operating Income Items Contribute to Strong Results 4) Continued EBITDA Growth and Non - GAAP EPS Up 31% 5) Strong Cash Flow and Balance Sheet for Acquisitions Chart #4 Third Quarter 2014

 	

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. 1Q092Q093Q094Q091Q102Q103Q104Q101Q112Q113Q114Q111Q122Q123Q124Q121Q132Q133Q134Q131Q142Q143Q14 Chart #5

 	

Financial Snapshot Q3 2014 Q3 2013 YTD 2014 YTD 2013 Net Sales ($Mils.) 198.9 184.1 571.8 545.1 Gross Margin (%) 35.4 35.9 35.6 35.9 Operating Margin (%) 10.3 10.2 10.6 10.3 Net Income attributable to Quaker Chemical Corporation ($Mils.) 15.7 12.6 43.9 42.3 Adjusted EBITDA ($Mils.) – Trailing Twelve Months 97.0 87.5 -- -- Adjusted EBITDA Margin (%) 12.8 12.2 -- -- Earnings Per Diluted Share 1.18 0.95 3.31 3.21 Non - GAAP Earnings Per Diluted Share 1.19 0.91 3.26 2.87 Debt ($Mils.) 62.6 19.2 -- -- Equity ($Mils.) 367.0 324.8 -- -- Net Operating Cash Flow ($Mils.) 29.8 24.5 38.0 51.9 Chart #6

 	

Gross Margin Percentage 28.0% 34.7% 35.4% 32.6% 33.7% 35.8% 35.6% 20.0% 25.0% 30.0% 35.0% 40.0% 2008 2009 2010 2011 2012 2013 YTD 2014 Gross Margin Percentage 35.9% 35.4% 35.8% 35.7% 35.4% 20.0% 25.0% 30.0% 35.0% 40.0% Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Gross Margin Percentage Chart #7

 	

Adjusted EBITDA Baseline Historical Performance $40.1 $66.8 $73.0 $80.9 $89.6 $101.4 $44.2 9.8% 12.3% 10.7% 11.4% 12.3% 13.3% 6.9% 2008 2009 2010 2011 2012 2013 Q3 YTD 2014 Annualized Adjusted EBITDA ($ Mils.) Adjusted EBITDA Margin (%) 2008 – 2014 Annualized CAGR: 16.7% +640 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 Q3 2014 $ Millions Cash ST/LT Debt Net Debt Chart #9

 	

APPENDIX

 	

Non - GAAP Earnings Per Diluted Share Reconciliation Chart #10 Q3 2014 Q3 2013 YTD 2014YTD 2013 GAAP Earnings Per Diluted Share 1.18$ 0.95$ 3.31$ 3.21$ U.K. pension plan amendment per diluted share -$ -$ 0.05$ -$ U.S. customer bankruptcy per diluted share 0.02$ -$ 0.02$ -$ Mineral oil excise tax refund per diluted share -$ -$ -$ (0.14)$ Change in acquisition-related earnout liability per diluted share -$ -$ -$ 0.03$ Cost streamlining initiatives per diluted share -$ 0.05$ 0.02$ 0.07$ Currency conversion impacts of the Venezuelan Bolivar Fuerte per diluted share -$ -$ 0.02$ 0.03$ Equity income in a captive insurance company per diluted share (0.01)$ (0.09)$ (0.16)$ (0.33)$ Non-GAAP Earnings Per Diluted Share 1.19$ 0.91$ 3.26$ 2.87$

 	

Annualized Adjusted EBITDA Reconciliation Chart #11 2008 2009 2010 2011 2012 2013 YTD Q3 2014 Net income 9,833 16,058 32,120 45,892 47,405 56,339 43,853 Depreciation 10,879 9,525 9,867 11,455 12,252 12,339 9,154 Amortization 1,177 1,078 988 2,338 3,106 3,445 2,754 Interest expense 5,509 5,533 5,225 4,666 4,283 2,922 1,747 Taxes on income 4,977 7,065 12,616 14,256 15,575 20,489 18,808 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) (2,142) Currency conversion impacts of the Venezuelan Bolivar - - 322 - - 357 321 U.S. customer bankruptcies - - - - 1,254 - 310 Cost streamlining initiatives - - - - - 1,419 348 U.K. pension plan amendment - - - - - - 902 Adjusted EBITDA 40,095 44,153 66,838 72,971 80,935 89,618 76,055 Adjusted EBITDA Margin 6.9% 9.8% 12.3% 10.7% 11.4% 12.3% 13.3% Multiply Adjusted EBITDA by Annual Run Rate 1 1 1 1 1 1 1.33 Annualized Adjusted EBITDA 40,095 44,153 66,838 72,971 80,935 89,618 101,407

 	

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 Q3 2014 YTD Q3 2014 Last Three Months 2013 YTD 2013 Trailing Twelve Months Q3 2013 YTD Q3 2013 Last Three Months 2012 YTD 2012 YTD Q3 2012 Net income 57,939 43,853 14,086 56,339 55,260 42,253 13,007 47,405 34,398 Depreciation 12,274 9,154 3,120 12,339 12,470 9,219 3,251 12,252 9,001 Amortization 3,578 2,754 824 3,445 3,444 2,621 823 3,106 2,283 Interest expense 2,446 1,747 699 2,922 3,147 2,223 924 4,283 3,359 Taxes on income 22,364 18,808 3,556 20,489 19,816 16,933 2,883 15,575 12,692 Non-income tax contingency 796 - 796 796 - - - - - Mineral oil excise tax refund - - - (2,540) (2,540) (2,540) - - - Change in acquisition-related earnout liability (1,172) - (1,172) (497) (1,062) 675 (1,737) (1,737) - Equity loss (income) from a captive insurance company (3,215) (2,142) (1,073) (5,451) (4,764) (4,378) (386) (1,812) (1,426) Currency conversion impacts of the Venezuelan Bolivar 321 321 - 357 357 357 - - - U.S. customer bankruptcies 310 310 - - 98 - 98 1,254 1,156 Transition costs related to key employees - - - - - - - 609 609 Cost streamlining initiatives 490 348 142 1,419 1,277 1,277 - - - U.K. pension plan amendment 902 902 - - - - - - - Adjusted EBITDA 97,033 76,055 20,978 89,618 87,503 68,640 18,863 80,935 62,072 Adjusted EBITDA Margin 12.8% 13.3% 11.4% 12.3% 12.2% 12.6% 10.9% 11.4% 11.6%