8-K

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

February 26, 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 February 26, 2015, Quaker Chemical Corporation announced its results of operations for the fourth quarter and full year ended December 31, 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 February 26, 2015.
99.2	Supplemental Information related to fourth quarter and full year ended December 31, 2014.

-2-

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:  February 26, 2015	By:	/s/ Margaret m. loebl
		Margaret M. Loebl Vice President, Chief Financial Officer and Treasurer

-3-

EX-99.1

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 FOURTH QUARTER AND FULL YEAR 2014 RESULTS

·Solid quarterly revenue growth of 5%, despite 4% of foreign exchange headwinds

·Strong operating income drives 13% adjusted EBITDA increase in the quarter

·Purchase of Binol AB contributes to record year of acquisition activity

February 26, 2015

CONSHOHOCKEN, PA – Quaker Chemical Corporation (NYSE: KWR) today announced a 5% increase in net sales to $194.0 million for the fourth quarter of 2014 compared to the fourth quarter of 2013 net sales of $184.3 million. Earnings per diluted share for the fourth quarter of 2014 were $0.95 compared to $1.07 for the fourth quarter of 2013, with non-GAAP earnings per diluted share of $1.00 for the fourth quarter of 2014 compared to $0.98 for the fourth quarter of 2013. The fourth quarter comparison obscures year-over-year earnings growth as the fourth quarter of 2013 benefited from a $0.08 favorable tax adjustment while the fourth quarter of 2014 was negatively impacted by foreign exchange of $0.04 and the other non-operating expenses noted below. The Company’s adjusted EBITDA highlights this improved performance over the prior year quarter, increasing 13% to $23.8 million for the fourth quarter of 2014 compared to $21.0 million for the fourth quarter of 2013. Net sales for the full year 2014 increased 5% to $765.9 million from $729.4 million for 2013. Earnings per diluted share were $4.26 in 2014 compared to $4.27 in 2013, with non-GAAP earnings per diluted share increasing 11% to $4.26 for 2014 from $3.84 for 2013. The Company’s adjusted EBITDA approximated $100 million for 2014, which was an 11% increase from $89.6 million in 2013.

Michael F. Barry, Chairman, Chief Executive Officer and President commented, “We are very pleased to close out 2014 with a strong quarter despite the continued challenges in Brazil, and the appreciation of the U.S. dollar versus key currencies. We continue to take market share, to leverage our diverse geographic footprint and to acquire businesses, driving strong growth in three of our four regions while the global economy and underlying markets slow down.”

Mr. Barry continued, “2014 was the fifth consecutive year of increased revenue, operating income and adjusted EBITDA, which approximated $100 million. Also, our total shareholder return was 21% as a result of Quaker’s continued dividend and stock price appreciation. We had a record year of acquisitions as we continue to believe they are the best way to utilize Quaker’s strong balance sheet and cash flow to generate shareholder value.”

Mr. Barry continued, “Looking forward, we are seeing an uncertain economic environment in many countries throughout the world and a strong U.S. dollar. However, we remain committed to our strategy and believe our ability to take market share and leverage our acquisitions will continue to help offset forward market challenges. Overall, I continue to remain confident in our future and expect 2015 to be another good year for Quaker, as we strive to increase revenue, operating income and adjusted EBITDA 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 

Fourth Quarter of 2014 Summary

Net sales for the fourth quarter of 2014 of $194.0 million increased approximately 5% from net sales of $184.3 million for the fourth quarter of 2013, primarily due to higher product volumes and price and product mix. Included in the Company’s net sales growth for the fourth quarter of 2014 was $8.4 million, or 4.6%, of additional sales from acquisitions, which was largely offset by $6.6 million, or 4%, related to a decrease in foreign currency exchange rate translation.

Gross profit increased approximately $4.4 million, or 7%, from the fourth quarter of 2013 on the increase from sales volumes, noted above, on relatively consistent gross margins of 35.9% and 35.4% for the fourth quarter of 2014 and the fourth quarter of 2013, respectively.

Selling, general and administrative expenses (“SG&A”) increased approximately $3.2 million from the fourth quarter of 2013, which was driven by the net impact of several factors. Specifically, SG&A increased from additional costs acquired with the Company’s 2014 acquisitions, higher labor-related costs on increased sales and merit inflation, current year costs related to a certain customer bankruptcy and the Company’s fourth quarter of 2014 cost streamlining initiative in South America, partially offset by a prior year non-income tax contingency charge and the effects of foreign currency exchange rate translation. In addition, the Company incurred approximately $0.6 million of diligence-related costs in the current quarter to support its 2014 acquisition-related activity compared to $0.2 million in the prior year quarter.

Other income decreased approximately $1.3 million from the fourth quarter of 2013, which was primarily the result of the prior year other income related to finalizing an acquisition-related earnout liability.

Interest expense was consistent between the fourth quarter of 2014 and the fourth quarter of 2013. The Company incurred additional interest expense in the current quarter from higher average borrowings due to its recent acquisition activity, which was more than offset by prior year interest expense from the accretion of the acquisition-related earnout liability, noted above, that was settled in early 2014.

Interest income was $0.2 million higher in the fourth quarter of 2014 compared to the fourth quarter of 2013, primarily due to interest received on a non-income tax credit 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 fourth quarters of 2014 and 2013 were 28.5% and 21.7%, respectively. During 2013, the Company’s quarterly effective tax rates were impacted by its Asia/Pacific region, as it recorded tax expense at the local statutory tax rate of 25% during the first three quarters of 2013, while it awaited recertification of a concessionary tax rate. The Company received such recertification and adjusted its year-to-date tax expense to its concessionary tax rate in the fourth quarter of 2013, which significantly decreased its prior year quarterly effective tax rate.

Equity in net income of associated companies (“equity income”) decreased $0.8 million in the fourth quarter of 2014 compared to the fourth quarter of 2013. The primary component of the Company’s equity income is earnings from its equity interest in a captive insurance company, which were higher in the prior year period.

The $0.3 million decrease in net income attributable to noncontrolling interest in the fourth quarter of 2014 compared to the fourth quarter of 2013 was primarily due to the Company’s second quarter of 2014 acquisition of the noncontrolling interest in its Australian affiliate.

The Company’s current year acquisitions generally performed in line with their expected positive operating results for the fourth quarter of 2014, however, these results were largely offset by the acquisition-related costs, noted above, and initial adjustments related to fair value accounting. Overall, the impact from the current year acquisitions to the Company’s net income was slightly positive at less than $0.1 million, or less than $0.01 per diluted share, for the fourth quarter of 2014.

Changes in foreign exchange rates negatively impacted the fourth quarter of 2014 net income by approximately $0.5 million, or $0.04 per diluted share.

Year-to-Date 2014 Summary

Net sales for 2014 of $765.9 million increased 5% from $729.4 million for 2013 due to higher product volumes. Included in the Company’s net sales growth in 2014 was $12.8 million, or 1.7%, of additional sales from acquisitions, which was largely offset by $10.3 million, or 1%, related to a decrease in foreign currency exchange rate translation.

Gross profit increased approximately $12.1 million, or 5%, from 2013, which was driven by the increase in sales volumes, noted above, on relatively consistent gross margins of 35.7% and 35.8% for 2014 and 2013, respectively.

SG&A increased approximately $6.0 million from 2013, which was driven by the net impact of several factors. Specifically, SG&A increased from additional costs acquired with the Company’s 2014 acquisitions, higher labor-related costs on increased sales and merit inflation, current year costs related to certain customer bankruptcies and, also, additional costs related to an amendment to the Company’s pension plan in the United Kingdom (“UK”). These increases to SG&A for 2014 were partially offset by lower incentive compensation costs, decreases in foreign currency exchange rate translation and a non-income tax contingency charge recorded in the prior year. In addition, the Company incurred approximately $1.1 million of diligence-related costs to support its acquisition-related activity in 2014 compared to $0.2 million in 2013.

The $2.8 million decrease in other income in 2014 from 2013 was primarily caused by the Company’s prior year receipt of a mineral oil excise tax refund and, also, prior year net other income related to changes in an acquisition-related earnout liability.

Interest expense was $0.6 million lower in 2014 compared to 2013. The Company incurred additional interest expense in 2014 from higher average borrowings due to its recent acquisition activity, which was more than offset by prior year interest expense from the accretion of the acquisition-related earnout liability, noted above, that was settled in early 2014.

Interest income was $1.6 million higher in 2014 compared to 2013, primarily due to interest received on several 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 2014 and 2013 were 30.1% and 28.1%, respectively. The primary contributor to the Company’s higher effective tax rate in 2014 was an increase in reserves related to uncertain tax positions.

The decrease in the Company’s equity income of $3.0 million in 2014 compared to 2013 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 2014 and 2013 include comparable currency charges related to the conversion of the Venezuelan Bolivar Fuerte to the U.S. Dollar.

The primary component of the $0.7 million decrease in net income attributable to noncontrolling interest in 2014 compared to 2013 was the Company’s second quarter of 2014 acquisition of the noncontrolling interest in its Australian affiliate, noted above.

The Company’s current year acquisitions generally performed in line with their expected positive operating results for 2014, however, these results were largely offset by the acquisition-related costs, noted above, and initial adjustments related to fair value accounting. Overall, the impact from the current year acquisitions to the Company’s net income was slightly positive at less than $0.1 million, or less than $0.01 per diluted share, for 2014.

Changes in foreign exchange rates negatively impacted the 2014 net income by approximately $1.2 million, or $0.09 per diluted share.

Balance Sheet and Cash Flow Items

The Company’s net operating cash flow for the fourth quarter of 2014 was approximately $16.7 million, which increased its full year 2014 net operating cash flow to $54.7 million compared to $73.8 million for 2013. The main reason for the decrease to the Company’s operating cash flow from 2013 was an outflow from accounts receivables. Other than normal outflow due to higher sales, a key driver in the change in the Company’s receivables was a significant increase in the level of bank acceptance drafts that the Company received on outstanding receivables in its Asia/Pacific region. This type of payment carries with it extended terms, if the Company chooses not to immediately exchange it with the respective issuing bank for a discounted amount. To date, all of the Company’s bank acceptance drafts have been carried to their full term. Overall, the current year marked an uncommon increase in the use of such methods of payment by the Company’s customers, which the Company expects to be at a more stable level in the next year. At December 31, 2014, the Company’s liquidity remains strong, with net debt of $11.0 million and a consolidated leverage ratio that continues to be less than one times EBITDA, despite the added borrowings in 2014 to fund $73.5 million and $7.4 million of acquisition and non-controlling interest purchases, respectively. Specifically, the Company’s acquisition activity was highlighted by the second quarter of 2014 purchase of the 49% remaining interest in its equity affiliate Quaker Chemical (Australasia) Pty. Limited, the third quarter of 2014 purchase of ECLI Products, LLC, and the fourth quarter of 2014 purchase of Binol AB.

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 financial measures:

	Three Months Ended December 31,						Twelve Months Ended December 31,
	2014			2013			2014			2013
GAAP earnings per diluted share attributable to Quaker Chemical Corporation Common Shareholders	$	0.95		$	1.07		$	4.26		$	4.27
UK pension plan amendment per diluted share		—			—			0.05			—
Customer bankruptcy costs per diluted share		0.03			—			0.05			—
Mineral oil excise tax refund per diluted share		—			—			—			(0.14	)
Change in acquisition-related earnout liability per diluted share		—			(0.06	)		—			(0.03	)
Cost streamlining initiatives per diluted share		0.04			0.01			0.06			0.08
Currency conversion impacts of the Venezuelan Bolivar Fuerte per diluted share		—			—			0.02			0.03
Non-income tax contingency charge per diluted share		—			0.04			—			0.04
Equity income in a captive insurance company per diluted share		(0.02	)		(0.08	)		(0.18	)		(0.41	)
Non-GAAP earnings per diluted share	$	1.00		$	0.98		$	4.26		$	3.84

	Three Months Ended December 31,						Twelve Months Ended December 31,
	2014			2013			2014			2013
Net income attributable to Quaker Chemical Corporation	$	12,639		$	14,086		$	56,492		$	56,339
Depreciation and amortization		4,723			3,944			16,631			15,784
Interest expense		624			699			2,371			2,922
Taxes on income before equity in net income of associated companies		4,731			3,556			23,539			20,489
UK pension plan amendment		—			—			902			—
Customer bankruptcy costs		515			—			825			—
Mineral oil excise tax refund		—			—			—			(2,540	)
Change in acquisition-related earnout liability		—			(1,172	)		—			(497	)
Cost streamlining initiatives		818			142			1,166			1,419
Currency conversion impacts of the Venezuelan Bolivar Fuerte		—			—			321			357
Non-income tax contingency charge		—			796			—			796
Equity income in a captive insurance company		(270	)		(1,073	)		(2,412	)		(5,451	)
Adjusted EBITDA	$	23,780		$	20,978		$	99,835		$	89,618

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 fourth quarter and full year 2014 results is scheduled for February 27, 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.

Quaker Chemical Corporation

Consolidated Statements of Income

(Dollars in thousands, except per share data)

	Three Months Ended December 31,						Twelve Months Ended December 31,
	2014			2013			2014			2013
Net sales	$	194,033		$	184,297		$	765,860		$	729,395
Cost of goods sold		124,457			119,134			492,654			468,320
Gross profit		69,576			65,163			273,206			261,075
%		35.9	%		35.4	%		35.7	%		35.8	%
Selling, general and administrative expenses		53,091			49,931			195,850			189,832
Operating income		16,485			15,232			77,356			71,243
%		8.5	%		8.3	%		10.1	%		9.8	%
Other income, net		209			1,557			767			3,519
Interest expense		(624	)		(699	)		(2,371	)		(2,922	)
Interest income		551			321			2,541			986
Income before taxes and equity in net income of associated companies		16,621			16,411			78,293			72,826
Taxes on income before equity in net income of associated companies		4,731			3,556			23,539			20,489
		11,890			12,855			54,754			52,337
Equity in net income of associated companies		1,037			1,825			3,543			6,514
Net income		12,927			14,680			58,297			58,851
Less: Net income attributable to noncontrolling interest		288			594			1,805			2,512
Net income attributable to Quaker Chemical Corporation	$	12,639		$	14,086		$	56,492		$	56,339
%		6.5	%		7.6	%		7.4	%		7.7	%
Per share data:
Net income attributable to Quaker Chemical Corporation Common Shareholders - basic	$	0.95		$	1.07		$	4.27		$	4.28
Net income attributable to Quaker Chemical Corporation Common Shareholders - diluted	$	0.95		$	1.07		$	4.26		$	4.27

Quaker Chemical Corporation

Consolidated Balance Sheets

(Dollars in thousands, except par value and share amounts) 

	December 31,			December 31,
	2014			2013
ASSETS
Current assets
Cash and cash equivalents	$	64,731		$	68,492
Accounts receivable, net		189,484			165,629
Inventories, net		77,708			71,557
Current deferred tax assets		8,367			7,826
Prepaid expenses and other current assets		11,228			15,343
Total current assets		351,518			328,847
Property, plant and equipment, net		85,763			85,488
Goodwill		77,933			58,151
Other intangible assets, net		70,408			31,272
Investments in associated companies		21,751			19,397
Non-current deferred income taxes		24,411			24,724
Other assets		33,742			36,267
Total assets	$	665,526		$	584,146
LIABILITIES AND EQUITY
Current liabilities
Short-term borrowings and current portion of long-term debt	$	403		$	1,395
Accounts payable		74,987			72,281
Dividends payable		3,990			3,299
Accrued compensation		19,853			20,801
Accrued pension and postretirement benefits		1,239			1,438
Current deferred tax liabilities		732			1,057
Other current liabilities		23,697			30,585
Total current liabilities		124,901			130,856
Long-term debt		75,328			17,321
Non-current deferred income taxes		8,584			6,729
Non-current accrued pension and postretirement benefits		46,088			37,006
Other non-current liabilities		45,490			47,538
Total liabilities		300,391			239,450
Equity
Common stock, $1 par value; authorized 30,000,000 shares; issued and outstanding 2014 - 13,300,891 shares; 2013 - 13,196,140 shares		13,301			13,196
Capital in excess of par value		99,056			99,038
Retained earnings		299,524			258,285
Accumulated other comprehensive loss		(54,406	)		(34,700	)
Total Quaker shareholders' equity		357,475			335,819
Noncontrolling interest		7,660			8,877
Total equity		365,135			344,696
Total liabilities and equity	$	665,526		$	584,146

Quaker Chemical Corporation

Consolidated Statements of Cash Flows

For the twelve months ended December 31,

(Dollars in thousands)

	2014			2013
Cash flows from operating activities
Net income	$	58,297		$	58,851
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		12,306			12,339
Amortization		4,325			3,445
Equity in undistributed earnings of associated companies, net of dividends		(3,180	)		(4,162	)
Deferred income taxes		1,007			(30	)
Uncertain tax positions (non-deferred portion)		(1,256	)		(1,826	)
Acquisition-related fair value adjustments		-			200
Deferred compensation and other, net		3,174			(259	)
Stock-based compensation		5,309			4,161
(Gain) loss on disposal of property, plant and equipment		(86	)		200
Insurance settlements realized		(1,907	)		(988	)
Pension and other postretirement benefits		1,265			862
(Decrease) increase in cash from changes in current assets and current liabilities, net of acquisitions:
Accounts receivable		(24,944	)		(11,837	)
Inventories		(5,484	)		406
Prepaid expenses and other current assets		2,003			(743	)
Accounts payable and accrued liabilities		2,999			11,301
Estimated taxes on income		862			1,881
Net cash provided by operating activities		54,690			73,801
Cash flows from investing activities
Investments in property, plant and equipment		(13,052	)		(11,439	)
Payments related to acquisitions, net of cash acquired		(73,527	)		(2,478	)
Proceeds from disposition of assets		201			513
Interest earned on an Insurance settlement		44			52
Change in restricted cash, net		1,863			936
Net cash used in investing activities		(84,471	)		(12,416	)
Cash flows from financing activities
Proceeds from long-term debt		58,771			-
Repayments of long-term debt		(1,368	)		(12,791	)
Dividends paid		(14,562	)		(13,018	)
Stock options exercised, other		804			(307	)
Excess tax benefit related to stock option exercises		453			815
Purchase of noncontrolling interest in affiliates, net		(7,422	)		-
Payment of acquisition-related earnout liability		(4,709	)		-
Distributions to noncontrolling affiliate shareholders		(1,806	)		(905	)
Net cash provided by (used in) financing activities		30,161			(26,206	)
Effect of exchange rate changes on cash		(4,141	)		766
Net (decrease) increase in cash and cash equivalents		(3,761	)		35,945
Cash and cash equivalents at the beginning of the period		68,492			32,547
Cash and cash equivalents at the end of the period	$	64,731		$	68,492

EX-99.2

Exhibit 99.2

1 Fourth Quarter and Full Year 2014 Results Investor Conference Call February 27, 2015 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 consis tent with similar measures provided by other companies. This data should b e read in conjunction with the C ompany’s fourth quarter earnings news release dated February 26, 2015, which has been furnished to the SEC on Form 8-K, and the Company’s Form 10-K for the year ended December 31, 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 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. 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

Fourth Quarter 2014 Headlines ▪ Strong quarterly revenue growth of 5%, despite 4% of foreign exchange headwinds ▪ Strong operating income drives 13% adjusted EBITDA increase in the quarter ▪ Purchase of Binol AB contributes to record year of acquisition activity Chart #2

Chairman Comments Fourth Quarter and Full Year 2014 ▪ Fourth Quarter / Full Year 2014 x Strong Volumes Drive Sales Growth in Quarter and Year x Acquisitions Offset Foreign Exchange Headwinds x Continue to Maintain Stable Quarterly and Annual Margins x Record Revenue, Operating Income and Adjusted EBITDA in 2014 x Effective Business Model & Competitive Position ▪ 2015 Outlook x Uncertain Economic Conditions Within Quaker’s Global Footprint x Further Foreign Exchange Headwinds From Strengthening U.S. Dollar x Anticipate Growth From Leveraging Past and Future Acquisitions “Overall, I continue to remain confident in our future and expect 2015 to be another good year for Quaker, as we strive to increase revenue, operating income and adjusted EBITDA for the sixth consecutive year .” -- Michael F. Barry, Chairman, CEO & President Chart #3

Chief Financial Officer --Highlights 1) Volume Drives 5% Increase in Net Sales for Quarter and Year 2) Stable Margins Drive Strong Operating Results in Quarter and Year 3) Adjusted EBITDA up 13% in Quarter & Approximated $100 Million in Year 4) Non-GAAP EPS up 11% for Year; While Up Only Slightly From Prior Year; With Comparison Impacted by Foreign Exchange & Tax Rate 5) Solid Cash Flow Generation in Quarter and Year 6) Continued Strength in Balance Sheet for Future Acquisitions Chart #4 Fourth Quarter 2014 and Full Year 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. 1Q092Q093Q094Q091Q102Q103Q104Q101Q112Q113Q114Q111Q122Q123Q124Q121Q132Q133Q134Q131Q142Q143Q144Q14 Chart #5

Financial Snapshot Q4 2014 Q4 2013 YTD 2014 YTD 2013 Net Sales ($Mils.) 194.0 184.3 765.9 729.4 Gross Margin (%) 35.9 35.4 35.7 35.8 Operating Margin (%) 8.5 8.3 10.1 9.8 Net Income attributable to Quaker Chemical Corporation ($Mils.) 12.6 14.1 56.5 56.3 Adjusted EBITDA ($Mils.) –Trailing Twelve Months 99.8 89.6 -- -- Adjusted EBITDA Margin (%) 13.0 12.3 -- -- Earnings Per Diluted Share 0.95 1.07 4.26 4.27 Non-GAAP Earnings Per Diluted Share 1.00 0.98 4.26 3.84 Debt ($Mils.) 75.7 18.7 -- -- Equity ($Mils.) 365.1 344.7 -- -- Net Operating Cash Flow ($Mils.) 16.7 21.8 54.7 73.8 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 35.4% 35.8% 35.7% 35.4% 35.9% 20.0% 25.0% 30.0% 35.0% 40.0% Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Gross Margin Percentage Chart #7

Adjusted EBITDA Baseline Historical Performance $40.1 $66.8 $73.0 $80.9 $89.6 $99.8 $44.2 9.8% 12.3% 10.7% 11.4% 12.3% 13.0% 6.9% 2008 2009 2010 2011 2012 2013 2014 Adjusted EBITDA ($ Mils.) Adjusted EBITDA Margin (%) 2008 –2014 CAGR: 16.4% +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 $ Millions Cash ST/LT Debt Net Debt Chart #9

APPENDIX

Non-GAAP Earnings Per Diluted Share Reconciliation Chart #10 Q4 2014 Q4 2013 YTD 2014 YTD 2013 GAAP Earnings Per Diluted Share 0.95$ 1.07$ 4.26$ 4.27$ U.K. pension plan amendment per diluted share -$ -$ 0.05$ -$ Customer bankruptcy costs per diluted share 0.03$ -$ 0.05$ -$ Mineral oil excise tax refund per diluted share -$ -$ -$ (0.14)$ Change in acquisition-related earnout liability per diluted share -$ (0.06)$ -$ (0.03)$ Cost streamlining initiatives per diluted share 0.04$ 0.01$ 0.06$ 0.08$ Currency conversion impacts of the Venezuelan Bolivar Fuerte per diluted share -$ -$ 0.02$ 0.03$ Non-income tax contingency charge per diluted share -$ 0.04$ -$ 0.04$ Equity income in a captive insurance company per diluted share (0.02)$ (0.08)$ (0.18)$ (0.41)$ Non-GAAP Earnings Per Diluted Share 1.00$ 0.98$ 4.26$ 3.84$

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%