Quaker Chemical (KWR) 6 Aug 242024 Q2 Earnings call transcript

Greetings, and welcome to the Quaker Houghton Second Quarter 2024 Earnings Conference Call. A brief question-and-answer session will follow the formal. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the call over to Jeffrey Schnell, Vice President of Investor Relation. Mr. begin. may you Schnell,

morning, Call. to Good XXXX second Earnings Conference and you. our welcome quarter Thank

call are Vice the General Officer; Financial On today and Counsel. Tom Chief President Officer; Coler, Executive and our Traub, Executive Robert President Chief Andy and our Tometich, our

U.S. Our the the close to X, August relate information released yesterday, comments the XXXX. after financial of markets

reflecting and Quaker Our and actual results the cause potential contain website. Both Relations on our press Investor may of view release differ. and current and involve may effect to call prepared company's accompanying performance. discussion commentary future slides forward-looking their uncertainties this can statements which These statements, Houghton's be found and financial during the risks, events operating on

subsequent presentation the non-GAAP statements. measures updates to materials, on is our appendix directly company of website. provided the The these are most of also available the measures, GAAP and certain comparable provide This non-GAAP company financial has measures to these reconciliations financial under no financial to which the contains forward-looking in presentation obligation

For our the filings to additional please SEC. with information, refer

pleasure my over to it's Now hand the to call Andy.

dynamic we Jeff, a through which you, operating expansion highlighted Quaker were Houghton's our conditions and manage challenges by The resilience are translated market flow. the second cash we is everyone. in good as results the the business Thank In margins, earnings increase evident drove quarter, solid facing. an in and further morning, into of our of sustained

financial and We our execute of improve continue customers, priorities our the on earn strength profile. to enterprise our with new business

on long-term our of the focused building sustainable is also are We with which advancement momentum growth. strategy,

below than stable and focus our and solutions differentiated leading first despite portfolio our soft sales our customer on services reported were driven quarter. the team's relationships X% year in was of again our end customers better their year-over-year net and prior were basis our primarily expanding the achieve with Second model intimate once This sequential conditions. our market $XXX a outcomes Total volumes million, sustained which by both and help on X% customers through quarter operations. lower

the driver were quarter improvement higher year. the points basis year-over-year on prior primary costs the Raw a Gross were XX.X%, second of material than margins in XXX the basis.

our As modest movements. has expected, benefited cost material deflationary raw position from

We our maintained have model. value-driven cost ownership also approach a disciplined with customer of total

we and capabilities our enhancing improving support manufacturing Additionally, productivity, are our own for supply our providing avenues and and our chain expectations growth. to actively customers

end million, challenging X% second and in and $X.XX financial In our navigate backdrop. while compared the $XX a adjusted These results and per a strategic persistent pursuing also we increase focus operational share, of prior of non-GAAP year-over-year. diluted to the quarter, our EBITDA earnings as emphasize increase we generated the year. pillars investments XX% market

by is flow Our the cash In generated our capabilities improvements. cash continued $XX capital progress operating strong approximately position and second we million financial of generation working $XX year-to-date. incremental supported million or driving quarter,

adjusted trailing ratio leverage our And to net our XX-month improved X.Xx EBITDA.

support to of model dividend, cash framework in balance end, flow the creation. that accelerate X.X% and characteristics for to highlighting increase Board an To our commitment our opportunities returns. strong our week, provide sheet, business value cash significant long-term authorized Our legacy of and our last shareholder

of year. in the conditions. the first our market XX% margins the soft compared in year-over-year once growth our of basis all Turning in a quarter a than This are Pacific segments on to was improvement more year-over-year margin increased consecutive eighth profitable despite performance Volumes segment driven to XXXX our We in Asia execution improved single-digit of by our prior initiatives. delivered the percentage segments. our our again a by half high end segment on and higher

both working levels India metals underlying to and for has Growth the applications across region, business in well mixed as as been helping and and combat broad-based Asia, of the China, new in metal Southeast demand wins amplified including region. by the

Volumes with prior EMEA slightly conditions end driven improved In auto, for acquisition remain and consistent applications, challenged. in uneven metal industrial by the segment, nonferrous of sequentially. business wins, the we remain Macroeconomic inclusive saw were year and the and new the working and I.K.V. metal country, ferrous quarter, by improved market including demand customer. in EMEA applications but

improve. for We to are profitability, our economic diligently own focusing enhance as advance chain supply efficiency the begin as our customers working well solutions initiatives, on organization conditions as our which to our value-added to benefit will

consistent Americas customers. in prior existing And with year. to metal activity. improved, but the earn applications team metals continued The prior with declined continuation business soft quarter, the and while new Volumes working segment were a of reflect production industrial the compared to new

in improvement several earnings Our Segment the a by decline quarter. Americas dealt segment customer in also sales year-over-year offset an partially with driven in and declined in the by the unplanned outages primarily basis, Americas margins. on

we continues Our the or regions of be and aggregate our to in volume growth the performance operate. which markets better underlying consistent than

and soft shared our and customers. to delivered our business to services to trials quality markets based While and new value with remains end customer production wins products, our globally the of on convert industrial continue and and technical uneven, breadth we knowledge

believe levels. conditions the of in value low of have the segments regional each persistent as further from model our improve and our We unlock will these end substantial we profitability made of improvements market

and visibility, half improvement outlook. that likely first we through our regional year. will stable have momentum India China. Switching the we to the dynamic environment end expect combination more in The geographies like demand in the current a this remainder of wins, the and experienced continue business in market conditions of of segments through XXXX new modest market Despite continued and across our sequential uncertainty a

and executing XXXX and productivity, including and quarter. our continued to initiatives we beyond. on third continue the will our own operations deliver results effectively outperform in position and adjusted strategic on of value-based we'll in expect in These the with execution growth our and be We managing quarter continue on range Houghton markets model, EBITDA remain relationship disciplined focus to the our to second end earnings Quaker our to customers, profitability and our deepening

our our and investing In generation allocation priorities, growth, strong, being including paying repurchases. dividends, debt balance organic opportunistic in capital supports cash our are strategy, disciplined sheet flow and with which our share addition, repaying advancing M&A

enterprise to sustainability. While globalizing, fully leading challenges, we balanced continue around our and remain near-term to in we navigate the committed digitizing strategy,

to and long-term compared further competitive our outperformance drivers the and that Our will market traction rates. believe value-enhancing initiatives continue our position unlock customers gain with augment are we to

a Asia Pacific of half from we our benefited from meaningful In contribution have XXXX, first segment. the

R&D advantage cross-selling global and environmental to our deploying customers the business Globally, opportunities are full benefits wins have we new scale, for trials We taking our our of had. complementing of several new technical capitalizing and breadth both product, our customers. capabilities have underway on we that performance by provide

To chain, the in amplifying a Asia help be of our customers. be on facility us to supply The expected the new support part second region. China, with region in meet will our a manufacturing opportunities Pacific across in of critical increasing consistent operational and model, in in new is XXXX our Zhangjiagang, broke Pacific Asia ground and needs to this and which facility China our we manufacturing the latest expected our and strong growth presence site of be the will quarter

existing industry. also our in completed impregnation of which and are based We will our scale technical acquisition further casting in drive the note the within die to pleased Group, the enhancing capabilities, SUTAI and and that we global complement is innovation SUTAI Japan. July, existing expertise

recent advanced SUTAI to Like cornerstone acquisition and solutions will accelerate our of our the growth globally, of I.K.V., operating a strategy. enterprise our

network of include optimization around ongoing, strategies. the product rationalization chain X to to as anticipate well Our swiftly capabilities simplifying our systems, support and supply as to fluid including needs. also use examples drive reducing of global ability We're which intelligence our to and channel and and scaling in our efforts customers' respond efficiencies offering, digital expanding better are complexity implementing our

customers launched as to help position our industry leader a emerging lead shift enable our XXXX and complex successfully the sustainability We're e-mobility. like to solutions to opportunities, business our campaign, our have our CB We to and of of to our investing achieve portfolio targets. in in the broad highlighting also On develop their and goals sustainable achievement

further Our opportunities scale their enterprise strategy how we It value to effectively will tailor most of new is with and efficiently earn amplifying and us allow our unlock for growth. regardless model. customers, or our industry

for strong and foundation future investments value long-term shareholders. customers drive in Our and our our embolden will our the

by demonstrating to in and priorities, at macroeconomic a started navigate breadth We end services. our earning to regions of our in and successfully have business committed We of market XXXX, backdrop levels improved profitability strong all environment. financial and operational continuing remain new products the challenging

leading to industry. position our this in enhancing We are dedicated and attractive expanding

We invest the our in our and profitability, customers aspirations and we support growth best are of unlock continue intimate enhance us attractive the to model customer prudently in improvements and supplement enterprise opportunities, to new our making positioning our strategy to company. our productivity

supported balance generation. cash our our And strong, sheet by is

We the allocation of proud growth. collective shareholder I value, earn through which together. of our work capital moving are focused am every the comes to and primarily solving to customers' committed strategy. day forward everyone to and who Quaker efforts constantly our Houghton, challenges value at disciplined add remains maximizing on company

to it Tom to pass like With financials. that, over the to discuss I'd

everyone. morning, good and Andy, you, Thank

declined volumes foreign approximately impact our price and the were unfavorable Our the selling impact net approximately primarily million, the X% X%. lower primary of lower the an of product change approximately X%, from of mix $XXX X%, and sales which sales of which of to year includes the reflects of exchange prior contribution contracts year-over-year I.K.V. index-based drivers of

metal the primarily persistent in on been new by our sequential by segments. sales basis our sequential volumes and continue has basis, execution metals and largely a Americas challenging industrial applications offset Demand and challenges earning the the continued the both for be quarter, reflecting applications. a in environment, has soft sales to consecutive been have Our on for team's sixth in improved activity volumes market business end the EMEA year-over-year all segments. consistent working impacted and Notwithstanding

to moderating as costs the quarter is quarter Gross to and second supply actions were of XXX an XXXX. first of the as chain margins basis the This compared well which points the ongoing from compared of as XX.X%, our in to efficiency XX.X% productivity. improve result represents increase in material raw benefits year, a prior and in XX.X%

items, is year basis, periods higher X% million On $X of by controls, year-to-date and a or foreign compared and timing combination prior X% or to exchange cost SG&A the million compensation. both Excluding the $X SG&A incentive X%. of sequentially. decrease a The onetime decreased approximately and levels reflects

an and in or increase of of which $X X% an second EBITDA quarter. the to prior We prior million adjusted or quarter, of the represents million to delivered year million compared compared $X $XX X% the increase

Our both balancing adjusted second with was growth business continues XX.X% team operational The and including compared the our our to increase XXXX priorities, of end while profile initiatives and on the margin EBITDA second quarter. to restoring margin financial execute of market the in quarter, profitable the the an the prior environment. quarter

segment mix. increase partially in sales in Pacific prior increased our X% price slight Asia selling unfavorable and impact the to our an a in year, and sales driven volumes to decrease and product segment by results. single-digit Switching compared offset by foreign Net exchange a approximately high

wins were in the applications. Pacific contributor metals both strong region region for to the primary Asia the metal in volume business and performance and working New throughout China the

the increased also segment gross XX% driven prior Pacific in an improvement sales in approximately the X% The and net sales segment quarter. margins. prior improvement to year. Segment to Asia increased by earnings compared was earnings higher Pacific compared in Asia

as the effectively We are with in relationships Asia serve. provide we and with our customer to the Pacific pleased they balance value the performance cost

impact with EMEA Net due sales selling drivers volumes, impact of mix at the remain from the and in our of EMEA an Net acquisition prior foreign index-based XXXX. price lower low in consistent were sales lower unfavorable X% segment The the customers this and year-over-year. and conditions inclusive economic Sales of segment in first were Overall, exchange. product and quarter primary were were to the subdued of impacts volumes levels. year. I.K.V consistent with the

improvement earnings The cost approximately in due the reflects our to EMEA X% ongoing year. prior increased initiatives. to our compared the This savings profitability segment's increase largely

EMEA improvements we in segment We expect efficiencies the productivity drive as to the through continue to year. progress and

quarter. the in working declined XX% activity product the volumes lower as lower to Volumes selling the and primarily in metal well in price several Americas sales impacted the sales region, year-over-year by business and customer Net in were as due unplanned in mix. Americas outages our industrial

On contracts. down sequential of a Our the the X%. net largely selling our were in price Americas impact reflects index-based basis, sales approximately

if by outages for unplanned business sales customer increased driven not However, wins. new have volumes would

the prior environment. the X% Segment lower to cost a margins. offset basis earnings sequential an market our declined partially margins by actively largely sales manage year, the we approximately and on Americas consistent as compared segment structure the segment's in improvement reflecting with were

is market and business performing the challenges. well, Overall, considering persistent especially the

We while begin our position have in market to as all to made improve. progress benefit the aligning company environment segments, conditions considerable best to continuing the to

Turning nonoperating to costs.

Our $X in approximately the our XXXX. interest prior in compared which reflects the was debt lower expense to second million in the variable reduction quarter cost year,

cost second the with quarter the of in approximately debt prior consistent Our X.X%. at was quarter

quarter. and noncore tax excluding rate, was Our nonrecurring the effective in items, second XX% approximately

tax expect continue effective our will to rate approximately be XXXX in We XX%.

in $X.XX, our to cash million, Capital were an and year, was in which operating and $XX $X.XX second were share interest year-to-date. GAAP driven were strong non-GAAP cash by from of second costs. Switching $XX share prior diluted improving the earnings lower our of efficiency $XX liquidity, million in $X the earnings Our to flow expenditures earnings we operating XXXX. year per year-to-date. an million operations million delivering the generated We in focused another quarter compared improvement and increase of per approximately and XX% diluted working quarter capital remain on and

We to of expect be CapEx within X.X% XXXX. sales X.X% to of will in prior communicated continue range total our

repurchased also In approximately XX,XXX the and we million. quarter, $X $X.X dividends approximately second million for shares paid opportunistically of

Board increase in in X.X% the approved confidence cash cash the Additionally, generation. a our flow Andy highlighting mentioned, as dividends, and our

balance and are liquidity Our sheet strong.

our Our net second adjusted $XXX XX of the end X.Xx trailing and EBITDA. debt leverage net million, months the at quarter was improved our ratio to

within was and quarter financial priorities and accelerate navigated support capital deliver focused our macro Quaker second executing to growth items for We remain challenging our on our expectations our shareholder growth on executed through another and on to disciplined the on our control. The solid environment strategy long-term Houghton investing quarter in strategy delivering value. as and enterprise operational allocation our we

to ahead. call is excited collective I dedication many entire look the forward meeting for person bright, thank the months. and you Quaker I Houghton's Quaker and strong over many welcome your the want also foundation success. the Houghton coming Lastly, to warm about the to in team our I'm future is of and on opportunities

it turn I'll that, With Andy. back over to

Houghton confident we in Quaker well continued while I'm Tom. our and and well strategy you, priorities. to Thank advancing success. execute our team drive continues are our believe positioned to

With take that, questions. we'd be to your happy

Instructions]. [Operator

comes question Seaport Harrison the first Our line of Mike Partners. with Research from

was Andy, the seeing detail I on bit hoping you little give could more you in what that were Americas. a maybe

that there was that but volumes. weakest I unplanned mentioned volume think impacted your was there, also customer some You the mentioned customer outages you --

for said you been have like volumes if those year-on-year, sounded it And that would not higher outages.

growing volumes I just guess, complete there. to do maybe And QX. expect color And be into you QX and more little are point? we this as at outages So a the get

Really question. Yes. Thanks, Mike. good

takeaway. Your the takeaway right is

on improvement saw business we the So softness the anticipated Americas, anticipated. that kind the positives of some on basis, primary the working outages there of but in we metal that metals some canceled the in anticipated kind benefit of and a seasonality was that while we we seasonality some

In flooding a related was some pretty And factors, there of and operations just couple were color, around Central to own and it down discrete events. discrete outages little challenges There labor. to America, in a you combination give created that was a their some a of situations customer more North Brazil there.

of what for that, seasonality. impacted it hoping were on net So we

when happen, the we can't but as through outages. those anticipating reversal the move As there'll we of year, on look benefit we exactly will related the some of the some are that of be we balance predict forward, recovery to

numbers then All right. strong. Pacific on flip the And actually Asia side, the were quite

related lower-margin And and the How also think prioritizing Just you Asia to improvement having much deselecting is region if disaggregate markets? is you to curious most much were in business I headwind is going could the how some wins? that's pricing. what's that related underlying of on where to new maybe there related

So outlook just on in there. strength can curious a APAC give if seeing more of little us the the that you're kind you color and

Sure.

certainly a was and pretty widespread, it in Asia Mike. second bright for was quarter, Pacific spot us the

which as trends some So in overall with wins. working, up. complemented metals we saw favorable as was metal That well was new business our

targeted we've even a well So net bit there, been range that and targeted higher our operating in generating really wins actually new business within range. little

the markets in Southeast positive. clearly and China, underlying too, direction. good the But there, are And some not in India going right seen Asia are we've but results only

look as generate in trend. course, we we're forward, the continue of focused and to directional wins. to the whatever anticipate of regardless business So outperform us going market we as market new on there those And to continuing that stay a happens

last that XX% you're growth of your sequentially, just the up All outlook -- kind for overall QX then is be the year. for I'm could EBITDA specific should down numbers provide gross guiding gross margin recover bit little XX%, margin more And then kind year-on-year right. or details came you back expectations of a all, And full question into that helpful. should as first to for any range? would curious, me of on you

Yes, sure.

Mike. don't why QX, with I So start

has So basis, improved all, we we've only strong doing strong first great and really generating results. started margin been of earnings flow. are and in delivering grown on on have cash we've not and And job team profitability a XXXX, the a execution

and doing what's wins, is offset happening which generate Third volumes all on the quarter to some new regions little improvement the already. us helping I in the underlying and business to even outpace modest team across in to cases, is respect specifically, a and bit with a that Americas touched great of job sequential we're expecting market. in But the some APAC

So feel about good that. we

We the going the but business some stay underlying of to we're still as do wins. through believe the year, going those challenges to on move markets have new are balance we focused

There's predict, levels. APAC. it kind little a in and little bit a of to we Europe of is bounce would Americas to the anticipate bit harder trough continues seasonality around

So us quarter. that third some optimistic we're benefit seasonality will the that in cautiously of

in similar that to range we to expect cost the we quarter. second about. we're to be margins, the the to operate constantly continuing We're provide value Gross the our against talked customers consistently now target And balancing serve. we had to

to on any to also we SG&A our those prudent of going be As deliver margins, very we're continue spending.

a We an continue growth, increase we to help be those will us costs those really longer-term expect with little of to drive that as to we're but bit things focus well productivity, the as diligent with on going investments. associated as

take third I earnings, of quarter, mentioned execute deliver all I to well second pre-prepared and it in going for together the in the we're anticipate the as marks When range quarter. the we

continue full on just outperforming of business margins towards we the new forward, still are on higher those a -- full a wins. our within be with challenged couple go end end but trending only comments. volumes our are the Gross of will outperformance are the then as but Transitioning markets We our target, to likely volumes focus end we to to the our year, range. year not basis our additional and believe markets

I as to So want through cycle the of costs mentioned. that those continue the control And of as to through this the we're we move year and going year. we balance through maintain the to balance

we're full that established that's very market year XXXX. of challenging success we year, another So for growth in on in and our earnings expecting the building end a

line the David next Deutsche comes Our Bank. from Begleiter of with question

actually the Americas, Andy, were down year-over-year? the back in to volumes quarter

I've again, the down it low they year-over-year that were associated covered. single on David, digits already And factors a was with Yes. basis.

it. Got

to the pricing was So index-based due contracts, remainder the correct?

repeat could that, sorry, you I'm David?

the of the sales to contracts? was year-over-year remainder index-based due The pricing decline

with impact index Yes, pricing, to associated sure. predominantly, I There was clearly -- mean related of an our contracts. pricing impact the any was

QX margins drove What basis to QX Got about by it. XXX points. sequentially And down from that EMEA decrease? sequential were

There bounce there. index underlying of And Again, well. continues market Yes. demand to around. the is a there the factors again, of business combination as

So the factors EMEA combined those impacted numbers. X

line the Our next of question comes Alexander Jefferies. with Laurence from

on you something mentioned. to might half Outside into kind pricing Laurence. It's the have do of Dan just headwind concessions? customers additional a year you for Is XXXX? pricing on Rizzo that where that second index-based seeing you and in could any back of be of the Are the push

Yes, and there's right? better So Dan, conversations the there are been has for characterize always always looking time. always I customers all deals, those

partnership we're engage think continue with do And to that service us to against I customers them. against value. on we finding continue right for pretty the very that good provide job the to we with that to good them a proactively and balance them a providing value cost to our of

to we've continue our So margin forward. and targeted cycle we'll want go we forward. gross we here do at that go as through continue goal entire sure now make as to to The level, to achieved, the do is be we that which we

So I with managing customers. think team course, customers, with well those of our partnership in that but is there's very our dialogues

electric vehicles impact -- Is demand in Okay. and then really, demand? kind do it's your broad-based not guys? Or China, more metal you more of on demand than working it from have an it that? it's And does outsized

Yes.

results, in first actually was not I just metals, highlighted, but think China, wide-ranging. in positive for I pretty saw some as metal real all, sure, and we it primary in of working

vehicles electric us is growth as sessions, For there's sure, in a opportunities talked in of accelerated we've vehicles. well. in number But China, those about as an electric there for previous of new

to the there, continue ICE continuing the not only those needs but are we vehicles on opportunities focused serve that around that and world. being the still developing to So, stay while of produced,

Viswanathan Capital Our of next question RBC from the comes line Arun Markets. with

-- wanted just some market on performance. just of Congrats can maybe performance walk to the through I end good the us you Great. here.

say What are other and in some construction your some of think. weakness mentioned conditions transportation would would? You maybe and in you markets, metal I and end building working, you if

Arun. question, the Yes. Thanks for

different So kind might a imagine. metal think of when of you about tale as it's we segments, working,

we in totality transportation see of to some world, aerospace the that positive as And continues be when trends to the OEMs continued around in particular. positive well. take we've So

their of with the industrial customers And that. Kind of there be equipment had the kind our of some components some associated have seems on manage to are engaged still operations. generally just where transportation side, in industrial providing flip latent in then some weakness as customers weakness

have metal positives well are as underlying as both challenges. there's -- So new And converting the again, business the metals working wins to segments. and customers of some But focused doing spaces. those where kind necessarily even helping very we're challenges in those not focused in that and solve across strong, markets in we're they metal on areas a on working good we're job entire the

sluggishness Okay. just persistent I kind year, some were destocking impacted in Last called volumes. And out as trends kind curious, think, well. some by overall and negative you've of volumes other obviously, of

your there's about look do could footprint, when where you curious, could thinking you're when visibility necessary So things certain on think a limited any rationalization are? in churn be given pretty the comfortable that Or at you that? happen, with Just are that geographies? how you

Thanks, Arun. Yes.

sure, to For we're to the we for always customers. the how have footprint right end regardless of on provide market need be conditions, able service the that we looking,

reminder, source, plan, make up we're that so locally, Just and able part a that's proposition. big tend set to deliver our of as value to a and we

continue look to do to we can that. need it customers at against and to So we'll that from how to that optimize offer able we an efficiency and be the standpoint balance

to job there the to going doing and although we good outperforming we're make been continue that and we're things doing a of we're anticipating challenged, volumes, control can they've progress control. But our the we're by things of taking good own

can could, -- the you side. on you're what elaborate And then seeing just I maybe just lastly, on if just M&A

fit completed next the you think else the, that expect should what months? in? How say, And in XX we does to I transaction. SUTAI X

Sure. Yes.

good allocation remains focused we of intact. on So and value have that's all, a first We shareholder one here think capital strategy balance.

SUTAI. In operating strategy way that X advanced we unlock we on I.K.V a our this kind that's and through inorganically. organically completed year, shareholder both we're acquisitions bolt-on growth, of to building Of and solutions. down those our just and capabilities course, of value big out is right both And aligned as cases,

our say that we capability, intimate technology And of X to all model in both unique some a cases, geographic we channels play. when building And have in can those we might that advantage taking customer as out play added much build and up, of or is capabilities areas. strength customers adding we not that a

is We're evaluate continuing move And We we There's of The generation cultivate thanks those our over to sizes. sheet it pipeline allows to still good that to opportunities and rich. a a spot, that us along. balance cash our time. really range in have all options.

shareholders, So, going we've our we're for the our value business to those nicely. generate best which already that our prioritize and are X continue for advance and to to aligned on strategy that very executed fit

from Tanwanteng CJS with Jon the Securities. comes line Our next of question

you and to any could meaningful CFO your goals if you talk if your predecessor? versus expect changes wondering, was as drive Tom, about I

Yes. that's and my continue over to we here the last QH the years. advance Jon, I that question in One at to strong you to of Thanks, say on really good happened progress the and foundation make Yes. threefold. have priorities would morning. are good few is sort asked the build

So really excited opportunity I'm the to about that. do

continued focus another opportunities enterprise for and on to in think focus area is I with me we efficiencies that operational the that balance drive generating growth got we've that. support where then continued to do have to investments the

been generation as flow organization lastly, for cash I historically prepared strong. then our has the the think we about talked remarks, in And

generation balance further cash on we focused have support maintain flow I'm capital sheet so allocation the And flexibility enabling strategy. to and our to overall

on in QX? expect heard that do to to point, expect do of you share you this balance sheet you that repurchase firepower say think I M&A more the Or Andy, pipeline rich then, saw the And at those opportunities? cash Great. be continue for your I and we was reserve to holding

We go and disciplined Jon. to, and got we've and growth want build. and we're of is organic to a shareholder that preference we all inorganic, pretty value. tools and Thanks, allocation able solid I through that not do the to going cash do pipeline. optimize a back capital again, have to deliver balanced to let have And for the flexibility But our be strategy. to

reduced quarter And great a some we of bought and bought I.K.V acquisition example, on earlier the our -- back that we we bought the was builds done increased debt, we we had we which we invested in the SUTAI, where year second shares. in dividend, CapEx,

for were those It But pretty was quarter. $X the second repurchase context, million shares opportunistic. in

right we tools deliver model are in using and So, shareholder us allocation we're available confident our value all that flow our we've the able got to that strategy be believe capabilities, strategy. capital to cash and in to the

I more. If the could What's or in one SUTAI? from accretion contribution Great. expected squeeze

Yes.

haven't minor that. the outside Houghton is us can for overall where It's brings more Quaker us relatively does really But we into us Japan, some technology new we can leverage of really good that but what not solutions. in avenues line. Japan, So within only gives it customers we in additional disclosed take some Japan the of top and

about move brings it So to us well forward. do as we the we're what that as help really energized will it opportunity as

Sandler. Neivert next from the comes question with Our line Charles Piper of

necessarily side is structure your there more that your won't weaker Europe Have the Pacific, little business, has you're bit new say their since maybe in win make -- one an where you but still or companies struggling, at stand really cost Americas. won't looking Asia in easier, struggling, the ability as question, any although and value carefully, better, bringing is makes to Just I that considering a say that are, noticed getting to appealing. but to things wins acceleration more I been ability on

So in have an acceleration you seen that?

sure. for Yes,

value all is customers world. But your even Asia We value and to resources providing possible, on and to products, selling we're highest-quality in them our end in think Pacific the the is appealing up proposition to helping and the China. their customers rates, redeploy reduce specific make their really value successful. other challenges, question, proposition scrap over the make I to products really but

customers appealing And and end geography market. any that's to really any in

to position themselves, it. on be And and support of we're more able So that to focused very in a our that. we stay good drive to as continue customers performance more

of an the terms about is had? And talk Great. of of guys What at now? it can maybe wins wins for going in a numbers there years forward? expectation how ago quarters, a all sort few you let's it and many what last, couple is was or in have of of you years couple And say, --

Yes, said at of Charlie, our level we've usually know over end target been always We've exceeding And that. actually that outperforming range great question. X% I we've to end X% that is historically quite operating the talked our about and level. higher often markets.

to muscle more for and our to add really our and ability to in value additional challenges customers ability continue our that. is solve represented So do

just challenging And I our I anticipate, about talked things to we as on to that's customers world those deliver continue because going more go value getting for a proposition. ago some is minute the forward, on of our

are questions like the further turn back to comments. time. Andy for There floor to over no at would Tometich closing this I

ask have I and to questions very interest day. continued you a Thank much. great out Yes. Quaker appreciate additional Houghton, We in have and Thanks really much, for please you you follow-up. reach to any if Jeff very your

today's And teleconference. this concludes

lines your disconnect at may time. this Thank your participation. You for you