KWR Filings — Quaker Chemical Corporation - FilingSpy
KWR
Quaker Chemical Corporation
A maker of industrial process fluids, Quaker Houghton supplies metal removal fluids, rolling lubricants, hydraulic fluids, and surface treatments used by steelmakers, aluminum producers, and aerospace and automotive manufacturers. The company was formed in 2019 when Quaker Chemical (founded in 1918) merged with Houghton International, whose roots stretch back to 1865 in Norristown, Pennsylvania. Its "Quaker" name nods to the state's Quaker heritage, made famous by William Penn's colony.
Quaker Houghton's Q2 2026 revenue rose 10% to $532.6M on 7% volume growth, but gross margin was flat and operating cash flow declined.
Sales volumes grew 7% — the strongest organic expansion in years — as new business wins lifted every . rose 10% to $532.6 million, but held flat at 35.5% as higher raw material costs offset pricing gains, and for the first half fell to $33.2 million from $38.5 million a year ago. The volume recovery is taking hold, but it is not yet translating into higher profitability or cash generation.
Key takeaways
rose 10% to $532.6 million, driven by a 7% increase in sales volumes from new business wins across all segments, plus 2% favorable foreign exchange and 1% higher selling price and product mix.
was flat at 35.5%, as higher raw material costs were partially offset by pricing actions; declined slightly from 36.0% a year ago.
SG&A expenses rose 11% to $140.5 million, driven by higher incentive compensation, costs tied to the new 2026 business transformation program, and unfavorable foreign exchange, which partially offset the gain.
Section summaries
Management's Discussion and Analysis
Q2 2026 net sales rose 10% to $532.6M on 7% volume growth from new business wins, while adjusted EBITDA increased to $85.2M.
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Consolidated grew 10% to $532.6M, driven by a 7% increase in sales volumes from new business wins across all segments, plus 2% favorable FX and 1% higher selling price and product mix.
for the first six months fell to $33.2 million from $38.5 million in the prior-year period, as higher outflows for and strategic builds absorbed cash.
The company amended its in April 2026, extending maturity to 2031 and increasing revolver capacity to $800 million, and entered $400 million of new fixing a portion of variable-rate debt at 3.58% plus margin.
Management cited escalating Middle East conflict and new U.S. tax legislation as risks but stated neither has had a material impact on financial results to date.
What changed
The Q1 2026 filing flagged whether organic volume growth could be sustained or accelerate beyond the 3% rate. Q2 delivered 7% volume growth, confirming the recovery is broadening beyond Asia/Pacific and accelerating.
The Q1 2026 filing asked whether could be maintained or improved from 36.8%. It fell 1.3 points sequentially to 35.5%, pressured by higher raw material costs that pricing actions only partially offset.
The Q1 2026 filing questioned whether would recover toward historical levels after generating only $3.8 million in Q1. First-half cash flow of $33.2 million remains below the prior year's $38.5 million, as outflows continued.
The FY 2025 10-K flagged whether the $40 million restructuring program would show measurable margin improvement in 2026. The company has now launched a new transformation program targeting $20-$30 million in annualized savings by 2028, while SG&A costs rose 11% in the quarter.
What to watch
Whether the 7% volume growth rate is sustained in the second half of 2026, confirming that the demand recovery is durable and not a one-quarter acceleration from new business wins.
Whether can recover from 35.5% as raw material cost pressures persist and the company implements further pricing actions, testing whether this level represents a new baseline.
Whether improves in the second half after generating only $33.2 million in the first six months, and whether the company can service its $857.8 million in while funding the new transformation program.
Whether the new business transformation program's targeted $20-$30 million in annualized savings begins to materialize, or whether related charges continue to offset the benefits in reported earnings.
declined slightly to 35.5% from 36.0% a year ago, as higher raw material costs were partially offset by pricing actions; reported was flat at 35.5%.
SG&A rose 11% to $140.5M due to higher incentive compensation, business transformation costs under the new 2026 program, and unfavorable FX, partially offsetting sales growth.
for the first six months of 2026 was $33.2M, down from $38.5M in the prior year, reflecting higher outflows for and strategic builds.
The Company amended its in April 2026, extending maturity to 2031 and increasing revolver capacity to $800M; total stood at $721.0M as of June 30, 2026.
Management cited geopolitical risks from the Middle East conflict and new U.S. tax legislation (OBBB) but stated neither has had a material impact on financial results to date.
Quantitative and Qualitative Disclosures About Market Risk
Interest-rate risk increased after legacy swaps expired, partially offset by new $400M swaps fixing a portion of variable-rate debt.
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The company’s prior interest-rate swaps expired in March 2026, leaving all borrowings exposed to variable rates until new hedges were entered.
In April 2026, the company entered $400 million notional of four-year interest-rate swaps, converting a portion of variable-rate debt to an average fixed rate of 3.58% plus the applicable margin.
As of June 30, 2026, outstanding borrowings under the Amended were $864.7 million, with an effective interest rate of approximately 4.4%.
A hypothetical 100-basis-point change in interest rates would have impacted by approximately $4.3 million for the six months ended June 30, 2026.
The company states there has been no material change to other market-risk exposures (currency, commodity, equity) from what was disclosed in the 2025 10-K.
Incorporated by reference is the information in Note 18, Commitments and Contingencies, to the Condensed Consolidated Financial Statements in Part I, Item 1, of this Report.
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Incorporated by reference is the information in Note 18, Commitments and Contingencies, to the Condensed Consolidated Financial Statements in Part I, Item 1, of this Report.
Escalating Middle East conflict and recent government trade actions amplify macroeconomic and operational risks.
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Escalated military conflict involving Iran threatens critical shipping routes like the Strait of Hormuz, potentially disrupting raw material deliveries and raising logistics costs.
Regional instability drives sharp, prolonged energy price volatility that may increase operating costs and dampen customer demand.
New or expanded U.S., EU, or UN sanctions could restrict dealings with certain customers or suppliers and force costly compliance efforts or relationship unwinds.
Heightened geopolitical tensions elevate cybersecurity threats, risking data breaches, business interruption, or reputational harm.
Recent government tariffs and trade policies have already disrupted supply chains, increased financial-market uncertainty, and raised recession and unemployment risks, which may worsen.