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Basis of Presentation and Description of Business
9 Months Ended
Sep. 30, 2021
Basis of Presentation and Description of Business [Abstract]  
Basis of Presentation and Description of Business [Text Block]
Note 1 – Basis of Presentation and Description of Business
 
Basis of Presentation
As used in these Notes to Condensed Consolidated Financial Statements of
 
this Quarterly Report on Form 10-Q for the period
ended September 30, 2021 (the “Report”),
 
the terms “Quaker,”
 
“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,
 
the term Legacy Quaker refers to the Company
prior to the closing of its combination with Houghton International, Inc. (“Houghton”)
 
(herein referred to as the “Combination”).
 
The
condensed consolidated financial statements included herein are
 
unaudited and have been prepared in accordance with generally
accepted accounting principles in the United States (“U.S. GAAP”) for interim
 
financial reporting and the United States Securities and
Exchange Commission (“SEC”) regulations.
 
Certain information and footnote disclosures normally included in financial statements
prepared in accordance with U.S. GAAP have been condensed or omitted
 
pursuant to such rules and regulations.
 
In the opinion of
management, the financial statements reflect all adjustments consisting
 
only of normal recurring adjustments which are necessary for a
fair statement of the financial position, results of operations and cash
 
flows for the interim periods.
 
The results for the nine months
ended September 30, 2021 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, 2020 (the
“2020 Form 10-K”).
 
During the three months ended September 30, 2020, the Company
 
identified and corrected certain immaterial adjustments relating
to the three months ended March 31, 2020 as well as the three and six months
 
ended June 30, 2020.
 
These adjustments related to the
Company’s over-recognition
 
of cost of goods sold (“COGS”) and corresponding under-recognition
 
of inventory, as well as the
associated tax impact of these adjustments, in the Company’s
 
previously issued interim financial statements for the three months
ended March 31, 2020 and the three and six months ended June 30, 2020.
 
These adjustments impact the Company’s
 
Americas
reportable segment.
 
The cumulative amount of reduction to COGS recorded in the three and nine months ended
 
September 30, 2020
was approximately $
1.7
 
million, with approximately $
0.7
 
million related to the three months ended March 31, 2020 and
approximately $
1.0
 
million related to the three months ended June 30, 2020.
Description of Business
The Company was organized in 1918, incorporated as a Pennsylvania
 
business corporation in 1930, and in August 2019
completed the Combination with Houghton to form Quaker Houghton.
 
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”)
 
for various heavy industrial and manufacturing
applications throughout its
four
 
segments: Americas; Europe, Middle East and Africa (“EMEA”); Asia/Pacific; and
 
Global Specialty
Businesses.
Hyper-inflationary economies
Based on various indices or index compilations being used to monitor inflation
 
in Argentina as well as economic instability,
effective July 1, 2018, Argentina’s
 
economy was considered hyper-inflationary under U.S. GAAP.
 
As of, and for the three and nine
months ended September 30, 2021, the Company's Argentine
 
subsidiaries represented less than
1
% of the Company’s consolidated
total assets and net sales, respectively.
 
During the three and nine months ended September 30, 2021, the Company
 
recorded less than
$
0.1
 
million and $
0.3
 
million, respectively,
 
of remeasurement losses associated with the applicable currency conversions
 
related to
Argentina.
 
Comparatively, during the
 
three and nine months ended September 30, 2020, the Company recorded $
0.2
 
million and $
0.3
million, respectively,
 
of remeasurement losses associated with the applicable currency conversions
 
related to Argentina.
 
These losses
were recorded within foreign exchange losses, net, which is a component
 
of other income (expense), net, in the Company’s
Condensed Consolidated Statements of Operations.
COVID-19
Management continues to monitor the impact that the COVID-19 pandemic
 
is having on the Company, the overall
 
specialty
chemical industry, and
 
the economies and markets in which the Company operates.
 
The full extent of the COVID-19 pandemic
related business and travel restrictions and changes to business and consumer behavior
 
intended to reduce its spread are uncertain as of
the date of the Report as COVID-19 and the responses of governmental
 
authorities continue to evolve globally.
Further, management continues to evaluate
 
how COVID-19-related circumstances, such as remote work arrangements, affect
financial reporting processes, internal control over financial reporting,
 
and disclosure controls and procedures.
 
While the
circumstances have presented and are expected to continue to present challenges,
 
at this time, Management does not believe that
COVID-19 has had a material impact on financial reporting processes, internal
 
control over financial reporting, and disclosure
controls and procedures.
The Company cannot reasonably estimate the magnitude of the effects
 
these conditions will have on the Company’s
 
operations in
the future as they are subject to significant uncertainties relating to the ultimate
 
geographic spread of the virus, the incidence and
severity of the symptoms, the duration or resurgences
 
of the outbreak including the impact of new variants, the global availability,
acceptance and efficacy of vaccines, the length of the travel restrictions
 
and business closures imposed by governments of impacted
countries, and the economic response by governments of impacted countries,
 
all of which continue to evolve.
To the extent
 
that the Company’s customers and suppliers continue
 
to be significantly and adversely impacted by COVID-19, this
could reduce the availability,
 
or result in delays, of materials or supplies to or from the Company,
 
which in turn could significantly
interrupt the Company’s business operations.
 
Such impacts could grow and become more significant to the Company’s
 
operations
and the Company’s liquidity
 
or financial position.
 
Therefore, given the continuously evolving global developments with respect to
this pandemic, the Company cannot reasonably estimate the magnitude or
 
the full extent to which COVID-19 may impact the
Company’s results of operations,
 
liquidity or financial position.