KWR 10-K & 10-Q changes, risk factors and insider trading

As athe leader in industrial process fluids, thewe Company isare subject to the same business cycles as those experienced by our customers that participate in the steel, automotive, industrial equipment, aerospace, aluminum and durable goods industries. Because demand for our products and services is largely derived from the global demand for our customers’ products, we are subject to uncertainties related to downturns in our customers’ businesses and shutdowns or curtailments of our customers’ production, including as a result of adverse changes affecting national, regional and global economies or increased competitive pressure within our customers’ industries. Our customers may experience deterioration of their businesses, cash flow shortages and difficulty obtaining financing, leading them to delay or cancel plans to purchase products, and they may not be able to pay our bills or fulfill their other obligations in a timely fashion. We have limited ability to adjust our costs contemporaneously with changes in sales; thus, a significant sudden downturn in sales or increased credit losses due to reductions in global production within the industries we serve and/or weak end-user markets could have a material adverse effect on our liquidity, financial position and results of operations. Further, our suppliers and other business partners may experience similar conditions, which could impact their ability to fulfill their obligations to us and also result in material adverse effects on our liquidity, financial position and results of operations.

The specialty chemical industry is highly competitive and there are many companies with significant financial resources and/or customer relationships that compete with us to provide similar products and services. Some competitors may be able to offer more favorable or flexible pricing and service terms or may be better able to adapt to changes in conditions in our industries, fluctuations in the costs of raw materials or to changes in global economic conditions, potentially resulting in reduced profitability and/or a loss of market share for us. The pricing decisions of our competitors could affect demand for our offerings, and could lead us to decrease our pricesprices, which could negatively affect our margins and profitability. In addition, our competitors could potentially consolidate their businesses and gain scale or better position their product offerings, which could have a negative impact on our profitability and market share. Competition in our industry historically has also been based on the ability to provide products that meet the needs of the customer and render technical services and laboratory assistance, which our competitors may be able to accomplish more effectively or efficiently than us.we can. If we are unsuccessful with differentiating ourselves, it could have a material adverse effect on our liquidity, financial position and results of operations and we could lose market share to our competitors.

During 2024,2025, the Company’sour top five largest customers (each composed of multiple subsidiaries or divisions with semi-autonomous purchasing authority) together accounted for approximately 12%11% of our consolidated net sales, with the largest customer accounting for approximately 3% of our consolidated net sales. The loss of a significant customer could have a material adverse effect on our liquidity, financial position and results of operations. Also, a significant portion of our revenues is derived from sales to customers in the cyclical steel, aerospace, aluminum and automotive industries, where bankruptcies have occurred in the past and where companies have periodically experienced financial difficulties. If a significant customer or group of customers in the same industry experiences financial difficulties or files for bankruptcy protection, we may be unable to collect on our receivables, customer manufacturing sites may be closed, or our contracts may be voided.voided, which could have a material adverse effect on our liquidity, financial position and result of operations. The bankruptcy of a major customer could therefore have a material adverse effect on our liquidity, financial position and results of operations. Also, some of our customers, primarily in the steel, aluminum and aerospace industries, often have fewer manufacturing locations compared to other metalworking customers and generally use higher volumes of products at a single location. The loss, closure, or significant reduction in production at one or more of these locations or other major sites of a significant customer could have a material adverse effect on our business.

We believe that our continued success depends on our ability to continuously develop and manufacture new products and product enhancements on a timely and cost-effective basis in response to customer demands for higher performance process chemicals and other product offerings. Our competitors may develop new products or enhancements to their products that offer better performance, features and lower prices that may render our products less competitive or obsolete, andor lower prices, any of which may cause us to lose business and/or significant market share. The development and commercialization of new products require significant expenditures over an extended period of time, and some products that we seek to develop may fail to gain traction or never become profitable. In any event, ongoing investments in research and development for the future do not yield an immediate beneficial impact on our operating results and therefore could result in higher costs without a proportional increase in revenues.

Divestitures have inherent risks, including the possibility that we may not be able to achieve the proceeds we desire from a sale, potential post-closing liabilities and claims for indemnification, that may impact our ability to fully realize the anticipated benefits of a given divestiture.benefit. In particular, in connection with the sale of certain properties and businesses, we agreed to indemnify the purchasers for certain types of matters, including certain breaches of representations and warranties, taxes and certain environmental matters. With respect to environmental matters, the discovery of contamination arising from properties that we have divested may expose us to indemnity obligations under the sale agreements with the buyers of such properties or cleanup obligations and other damages under applicable environmental laws, even if we were not aware of the contamination. We may not have insurance coverage for such indemnity obligations. Further, we cannot predict the nature or amount of any indemnity or other obligations we may have to pay. These payments may be costly and may adversely affect our financial position and results of operations. If these or other post-closing risks materialize, the benefits of any divestiture may not be fully realized, if at all, and our business, financial condition, and results of operations could be negatively impacted.

In addition, under our shareholders agreement with the Gulf Affiliates, they currently have the right to designate three individuals for election to the Board and this right, together with their share ownership, gives them substantial influence over our business, including over matters submitted to a vote of our shareholders, including the election of directors, amendment of our organizational documents, acquisitions or other business combinations involving the Company, and potentially the ability to prevent extraordinary transactions such as a takeover attempt or business combination. The concentration of ownership of our shares held by the Gulf Affiliates may make some future actions more difficult without their support. The Gulf Affiliates, however, among other provisions in the shareholders agreement, have agreed that for so long as any of their designees are on the Board, and for six months thereafter, they will vote all Quaker Houghton shares consistent with the recommendations of the Board for each director nominee as reflected in each proxy statement of the Company, including in support of any Quaker Houghton directors nominated for election or re-election to the Board (except as would conflict with their rights to designees on the Board). Nevertheless, the interests of Gulf may conflict with our interests or the interests of our other shareholders, though we are not currently aware of any such existing conflicts of interest at this time.conflicts.

On February 28, 2024, the Board approved a new share repurchase program (“2024 Share Repurchase Program”), authorizing the Company to repurchase up to an aggregate of $150 million of the Company’s outstanding common stock. The 2024 Share Repurchase Program replaced an earlier program, was effective immediately and has no expiration date. Under the 2024 Share Repurchase Program, the Company is authorized to repurchase shares through open market purchases, privately-negotiated transactions, accelerated share repurchases or otherwise in accordance with applicable federal securities laws, including through Rule 10b5-1 and under Rule 10b-18 of the Securities Exchange Act of 1934, as amended. The Company continues to employutilize trading plans for the repurchase of shares pursuant to the 2024 Share Repurchase Program, which permit the Company to purchase shares, at predetermined price targets, when it may otherwise be precluded from doing so. The 2024 Share Repurchase Program does not obligate us to acquire any particular amount of common stock, and it may be terminated at any time at the Company’s discretion. The specific timing and amount of repurchases will vary based on available capital resources and other financial and operational performance, prevailing prices, market conditions, securities law limitations, and other factors. Important factors that could cause the Company to limit, suspend or delay its share repurchases include unfavorable trading market conditions, the price of the Company’s common stock, the nature of other investment opportunities presented to us from time to time, the ability to obtain financing at attractive rates and the availability of U.S. cash, allnone of which we cannotcan predict.

•trade protection measures including import and export controls, trade embargoes, and trade sanctions affecting countries or regions we serveserve, thatwhich could result in our losing access to customers and suppliers in those countries or regions;

•instability in or adverse changes to the economic, political, social, legal or regulatory conditions in a country or region where we do business, as a result of terrorist activities, political disruptionactivity, armed conflict and/or militaryterrorist conflictactivities such as those that are being experienced in multiple areas around the world; and

The current global geopolitical and trade environment creates the potential for increased escalation of domestic and international tariffs and retaliatory trade policies, including the possibility of a “trade war” involving the United States and one or more of its trading partners. Recent government actions, including tariffs and trade policies, have impacted the global economy, disrupted global supply chains, created significant uncertainty and volatility in financial markets, and increased the risk of recession and elevated unemployment levels; these conditions could continue or worsen. Changes in U.S. trade policy and retaliatory actions by U.S. trade partners could also result in weakening economic conditions. If new tariffs are imposed or current tariffs are increased, materials and goods that U.S. companies import and export may face higher prices, and this could lead to significant shortages or price increases in our raw materials, decreased international sales, reduced margins or increased prices. Changes in U.S. trade policy and retaliatory actions by U.S. trade partners could also result in weakening economic conditions. If we are unable to successfully manage these and other risks associated with our international businesses, the risks could have a material adverse effect on our business, results of operations and financial condition.

Our non-U.S. operations generate significant revenues and earnings. Fluctuations in foreign currency exchange rates, including hyperinflationary conditions, may affect product demand and may adversely affect the profitability in U.S. dollars of the products and services we provide in international markets where payment for our products and services is made in the local currency. Our financial results are affected by currency fluctuations, particularly between the U.S. dollar and the Euro, the British pound sterling, the Brazilian real, the Mexican peso, the Chinese renminbi and the Indian rupee. During the past three years, sales by our non-U.S. subsidiaries accounted for approximately 63% to 65%67% of our consolidated net sales. We generally do not use financial instruments that expose us to significant risk involving foreign currency transactions; however, the relative size of our non-U.S. activities has a significant impact on reported operating results and our net assets. Therefore, as exchange rates change, our results can be materially affected. Incorporated by reference isSee the foreign exchange risk information contained in Item 7A of this Report and the geographic information in Note 4, Business Segments, to the Consolidated Financial Statements included in Item 8 of this Report.

Quaker Houghton uses approximatelyApproximately 3,000 raw materials, including animal fats, vegetable oils, mineral oils, oleochemicals, ethylene, solvents, surfactant agents, and various chemical compounds that act as additives to our base formulations, and a wide variety of other organic and inorganic compounds and various derivatives of the foregoing. The price of mineral oil and its derivatives can be affected by the price of crude oil and industry refining capacity. Animal fat and vegetable oil prices, as well as the prices of other raw materials, are impacted by their own unique supply and demand factors, and by biodiesel consumption, which in turn can be affected by the price of crude oil and by government incentives for low-carbon fuels. Accordingly, significant fluctuations in the price of crude oil can have a material impact on the cost of these raw materials. In addition, many of the raw materials used by Quaker Houghton are commodity chemicals which can experience significant price volatility.

The specialty chemical industry periodically experiences supply shortages for certain raw materials. In addition, we source some materials from a single supplier or from suppliers in jurisdictions that have experienced political or economic instability. Even where we have multiple suppliers of a particular raw material, there are occasionally shortages. Any significant disruption in supply, such as was experienced several years ago, could affect our ability to obtain raw materials or satisfactory substitutes or could increase the cost of such raw materials or substitutes, which could have a material adverse effect on our liquidity, financial position and results of operations. In addition, certain raw materials that we use are subject to various regulatory laws,regulation, and a change in our ability to legally use such raw materials may impact the products or services we are able to offer which could negatively affect our ability to compete and could adversely affect our liquidity, financial position and results of operations.

Our manufacturing facilities are located throughout the world. While we have some redundant capabilities, if one of our facilities is forced to shut down or curtail operations because of damage or other unforeseen factors, including natural disasters, labor difficulties or public health crises, we may not be able to timely supply our customers. This could result in a loss of sales over an extended period or permanently. While thewe Company seeksseek to mitigate this risk through business continuity and contingency planning and other measures, the loss of production in any one region over an extended period of time could have a material adverse effect on our liquidity, financial position and results of operations. Any losses due to these events may not be covered by our existing insurance policies or may be subject to significant deductibles.

Pending and future legal proceedingsproceedings, including tax and environmental mattersmatters, could have a material adverse effect on our liquidity, financial position and results of operations, as well as our reputation in the markets we serve.

Further, we are subject to the U.S. Foreign Corrupt Practices Act (the “FCPA”), the U.K. Bribery Act and other anti-bribery, anti-corruption and anti-money laundering laws in jurisdictions around the world. These and similar laws generally prohibit companies and their officers, directors, employees and third-party intermediaries, business partners and agents,agents from making improper payments or providing other improper items of value to government officials or other persons. While we have policies and procedures and internal controls designed to address compliance with such laws, including employee training programs, we cannot guarantee that our employees and third-party intermediaries, business partners and agents will not take, or be alleged to have taken, actions in violation of such policies and laws for which we may be ultimately held responsible. Detecting, investigating and resolving actual or alleged violations can be extensive andmay require a significant diversion of time, resources and attention from senior management. Any alleged or actual violation of these or other applicable anti-bribery, anti-corruption and anti-money laundering laws could result in whistleblower complaints, adverse media coverage, investigations, loss of export privileges, and criminal or civil sanctions, penalties and fines, any of which could adversely affect our business and financial condition.

The laws and regulations concerning import activity, export record-keeping and reporting, export control and economic sanctions are complex and constantly changing. These laws and regulations can cause delays in shipments and unscheduled operational downtime. Moreover, any failure to comply with applicable legal and regulatory trading obligations could result in criminal and civil penalties and sanctions such as fines, imprisonment, debarment from governmental contracts, seizure of shipments and loss of import and export privileges. In addition, investigations by government authorities as well as legal, social, economic and political issues in these countries could have a material adverse effect on our business, results of operations and financial condition. We are also subject to the risks that our employees, joint venture partners and agents outside of the U.S. may fail to comply with other applicable laws.

Increased public and stakeholder awareness of global climate change, biodiversity loss, and other environmental risks have contributed to, and may result in, even more extensive, international, regional and/or federal requirements or industry standards to reduce or mitigate the effects of these changes. These regulations could mandate even more restrictive regulatory or industry standards than the voluntary goals that we have established or require changes to be adopted on a more accelerated time frame.frame than we currently plan. New disclosure requirements have been adopted various jurisdictions, including in the EUEU, California, Mexico and California and additional rule making is expected to be adopted by the SEC.Australia. There continues to be a lack of consistent legislation related to disclosure and operational matters, which creates complexity and economic and regulatory uncertainty. ThoughAlthough we are closely following developments in this area and changes in the regulatory landscape in the U.S. and our other markets, we cannot predict how or when those challenges may ultimately impact our business. While certain climate change initiatives may result in new business opportunities for us in the area of alternative fuel technologies and emissions control, compliance with these initiatives may also result in additional costs to us including, among other things, increased production costs, additional taxes and compliance costs, reduced emission allowances or additional restrictions on production or operations.

If environmental laws or regulations or industry standards are either changed orin adopteda andmanner imposethat imposes significant additional operational restrictions and compliance requirements upon us or our products, or our operations are disrupted due to physical impacts of climate change or biodiversity loss, our business, capital expenditures, liquidity, results of operations, financial condition and competitive position could be negatively impacted.

We are subject to stringent labor and employment laws in manythe jurisdictions in which we operate, and our relationship with our employees could deteriorate which could adversely impact our operations.

A majority of our full-time employees are employed outside the U.S. In many jurisdictions where we operate, labor and employment laws and regulations grant significant job protection to some employees including rights on termination of employment. In addition, in some countries our employees are represented by works councils or are governed by collective bargaining agreements and we are often required to consult with and seek the consent or advice of such representatives. These laws and regulations, together with our obligations to seek consent or consult with the relevant unions or works councils, could have a significant impact on our flexibility in managing costsour workforce and responding to market changes. While the Company believes it has generally positive relations with its labor unions and employees, there is no guarantee the Company will be able to successfully negotiate new or renew labor agreements without work stoppages, labor difficulties or unfavorable terms. If we were to experience an extended interruption of operations at any of our facilities because of strikes or other work stoppages, our liquidity, results of operations and financial condition could be materially and adversely affected.

We have a limited number of patents and patent applications, including patents issued, applied for, or acquired in the U.S. and in various foreign countries, some of which are material to our business. However, we rely principally on our proprietary formulae and the applications know-how and experience to meet customer needs. Also, our products are identified by trademarks that are registered throughout our marketing area. Despite our efforts to protect our proprietary information through patent and trademark filings, and the use of appropriate trade secret protections, it is possible that competitors or other unauthorized third parties may obtain, copy, use, disclose or replicate our formulae, products, and processes. Similarly, third parties may assert claims against us and our customers and distributors alleging our products infringe upon third-party intellectual property rights. In addition, the laws and/or judicial systems of foreign countries in which we design, manufacture, market and sell our products may afford little or no effective protection of our proprietary technology or trade brands. Also, security over our global information technology structure is subject to increasing risks associated with cyber-crime and other related cyber-security threats. These potential risks to our proprietary information, trade brands and other intellectual property could subject us to increased competition and a failure to protect, defend or enforce our intellectual property rights could negatively impact our liquidity, financial position and results of operations.

We maintain product, property, business interruption, casualty, cyber, and other general liability insurance, but this may not cover all risks associated with the hazards of our business and these coverages are subject to limitations, including deductibles and coverage limits. We may incur losses beyond the limits, or outside the coverage, of our insurance policies, including liabilities for environmental remediation. In addition, from time to time, various types of insurance for companies in the specialty chemical industry have not been available on commercially acceptable terms and, in some cases, have not been available at all. We are potentially at additional risk if one or more of our insurance carriers fail. Additionally, severe disruptions in the domestic and global financial markets could adversely impact the ratings and survival of some of our insurers. Future downgrades in the ratings of insurers could adversely impact both the availability of appropriate insurance coverage and its cost. In the future, we may not be able to obtain coverage at current levels, if at all, and our premiums may increase significantly on coverage that we maintain.

We perform reviews of goodwill and indefinite-lived intangible assets on an annual basis, or more frequently if triggering events indicate a possible impairment. We test goodwill at the reporting unit level by comparing the carrying value of the net assets of the reporting unit, including goodwill, to the reporting unit's fair value. Similarly, we test indefinite-lived intangible assets by comparing the fair value of the assets to their carrying values. If the carrying values of goodwill or indefinite-lived intangible assets exceed their fair value, the goodwill or indefinite-lived intangible assets would be considered impaired. In addition, we perform a review of a definite-lived intangible assets or other long-lived assets when changes in circumstances or events indicate a possible impairment. If any impairment or related charge is warranted, as we determined to be the case in the fourthsecond quarter of 20222025 when we recognized aan $93.0$88.8 million impairment charge related to our EMEA reportable segment, then our financial position and results of operations could be materially affected. See Note 15, Goodwill and Other Intangible Assets, to the Consolidated Financial Statements included in Item 8 of this Report.

Effective internal controls are necessary for us to provide reliable financial reports and effectively prevent fraud. Section 404 of the Sarbanes-Oxley Act of 2002 requires us to evaluate and report on our internal control over financial reporting. We cannot be certain that we will be successful in maintaining adequate internal control over financial reporting and financial processes. We have in the past and may in the future discover areas of our internal controls that need improvement. Furthermore, to the extent our business grows or significantly changes, our internal controls may become more complex, and we could require significantly more resources to ensure our internal controls remain effective. If we identify material weaknesses in the future, it could negatively impact our operations or the market value of our common stock. Additionally, the existence of anya material weakness may require management to devote significant time and incur significant expense to remediate any such material weaknesses and management may not be able to remediate anyit, suchwhich materialwe weaknessesmay not be able to do in a timely manner.

Legislation requiring disclosure related to ESG matters is increasingly being adopted by governments in various jurisdictions, including the EU, Mexico, Australia and California, which requirements are expected to be applicable to us or certain of our operations and which impose varying and differing requirements. These developing requirements can significantly expand climate and other sustainability related disclosure requirements, which could require substantial time and attention of management and financial resources. Further, as we work to align with the recommendations of recognized third-party frameworks, we continue to expand our disclosures in these areas. This is consistent with our commitment to executing on a strategy that reflects the economic, social, and environmental impact we have on the world while advancing and complementing our business strategy. Our disclosures on these matters and standards we set for ourselves or a failure to meet these standards, may influence our reputation and the value of our brand. It is possible that our stakeholders might not be satisfied with our ESG efforts or the speed of their adoption. If we do not meet our stakeholders’ expectations, our business and/or our ability to access capital could be harmed. Any harm to our reputation resulting from setting these standards or our failure or perceived failure to meet such standards could adversely affect our business, financial performance, and growth.

Terrorist attacks, otherwars actsand ofarmed violence or war,conflicts, natural disasters, widespread public health crises or other uncommon events may affect the markets in which we operate and our profitability which could adversely affect our business, liquidity, financial position, and results of operations.

TerroristWars attacks, other acts ofand armed conflicts or war, cyber-attacks, natural disasters, widespread public health crises or an outbreak of a contagious disease, or other uncommon global events,conflicts, such as the currentongoing military conflicts between Russia andin Ukraine and in the Middle East, as well as responses to such events including sanctions, boycotts, protests or other restrictive actions by the United StatesU.S. and/or other countries or its residents, terrorist attacks, cyber-attacks, natural disasters, widespread public health crises or other disruptive events may negatively affect our operations. There can be no assurance that there will not be terroristviolence attacksor againstunrest in the U.S. or other locationsjurisdictions where we do business. Also, natural disasters such as earthquakes, tornados, hurricanes, fires, floods, and tsunamis cannot be predicted.

TerroristWars attacks, other acts ofor armed conflictsconflicts, orterrorist war,attacks, cyber-attacks, and natural disasters,disasters (which may be amplified by ongoing global climate change and biodiversity loss,loss) may directly impact our physical facilities and/or those of our suppliers or customers. In addition, terroristsuch attacks or natural disastersevents may disrupt the global insurance and reinsurance industries with the result that we may not be able to obtain insurance at historical terms and levels, if at all, for all of our facilities. In addition, available insurance coverage may not be sufficient to cover all of the damage incurred or, if available, may be prohibitively expensive. Widespread public health crises, including contagious diseases, could also disrupt operations of the Company, its suppliers and customerscustomers, which could have a material adverse impact on our results of operations. A significant outbreak of contagious diseases in the human population similar to the COVID-19 pandemic could also result in an economic downturn that could adversely affect demand for our products and likely impact our operating results. To the extent that the Company’s customers and suppliers are materially and adversely impacted by a widespread outbreak of contagious disease, this could reduce the availability, or result in delays, of materials or supplies to or from the Company, which in turn could materially interrupt the Company’s business operations.

The consequences of wars or armed conflicts, terrorist attacks, other acts of armed conflicts or war, including cyber-attacks, natural disasters, widespread public health crises or other uncommon global events can be unpredictable, and we may not be able to foresee or effectively plan for these events, resulting in a material adverse effect on our business, liquidity, financial position, and results of operations.

The Company generatedreported a net loss of $2.5 million or $0.14 net loss per diluted share in 2025, compared to a net income of $116.6 million or $6.51 per diluted share in 2024, compared to a net income of $112.7 million or $6.26earnings per diluted share in 2023.2024. The increasenet in current year earnings wasloss primarily drivenreflects byan lower$88.8 interestmillion expensenon-cash andimpairment lowercharge foreignto exchangewrite losses,down partiallythe offsetremaining byvalue lowerof operatinggoodwill income.associated with the Company’s EMEA reportable segment. Excluding non-recurring and non-core items, the Company’s current year non-GAAP net income and non-GAAP earnings per diluted share were $123.2 million and $7.02, respectively, compared to $133.5 million and $7.44, respectively, compared to $137.6 million and $7.65, respectively, in 2023.2024. The decrease in current year non-GAAPNon-GAAP earnings was primarily driven by alower decreasegross margins and an increase in netselling, sales,general and administrative expenses (“SG&A”), partially offset by an improvement in gross margins, lower interest expense, and an increase in othernet income (expense), net.sales. The Company generated adjusted EBITDA of $310.9$299.2 million compared to $320.4$310.9 million in 2023,2024, aas decreasethe of 3%. The decrease in adjusted EBITDA was primarily a result of a decreaseincrease in net sales,sales partiallywas offset by lower operating margins and an increase in otherSG&A. incomeNon-GAAP (expense),net net.income, non-GAAP earnings per diluted share and adjusted EBITDA are non-GAAP measures. See the“Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations—Consolidated—Use of Non-GAAP Financial Measures” sectionfor the definition and reconciliation of thisthese Itemmeasures below.to their most comparable GAAP measures.

The Company’s 20242025 operating performance in theeach Americasof andits EMEAthree reportable segments: reflect(i) Americas; (ii) EMEA; and (iii) Asia/Pacific, reflects similar drivers to that of the Company’s consolidated performance. OperatingThe increase in operating earnings for the AmericasAsia/Pacific and EMEA segments decreasedsegment compared to the prior year,year was primarily driven by an increase in net sales and further contribution from acquisitions, partially offset by lower segment operating margins. The decrease in operating earnings for the EMEA segment compared to the prior year was primarily driven by lower segment operating margins, partially offset by an increase in net sales. The decrease in operating earnings for the America segment compared to the prior year was primarily driven by a decrease in net sales,sales partially offset by an increase in segment operating margins. Asia/Pacific segment operating earnings increased compared to the prior year, primarily driven by an increase in net sales, partially offset byand a decrease in segment operating margins. Additional details of each segment’ssegment operating performance are further discussedprovided in the Company’sReportable reportableSegments segments review,Review in the Operations section of this Item 7, below.

Net cash flows provided by operating activities were $136.5 million in 2025 compared to $204.6 million in 2024 compared to $279.0 million in 2023.2024. The decrease in net operating cash flows was primarily driven by alower reductionoperating inperformance, higher cash inflowoutflows from restructuring activities and higher outflows from working capital in the2025 currentcompared year.to 2024. The key drivers of the Company’s operating cash flow and overallworking liquiditycapital are further discussed in the Company’s Liquidity and Capital Resources section of this Item 7, below.

The Company also records valuation allowances whenon necessarya quarterly basis to reduce its deferred tax assets to the amount that is more likely than not to be realized. While the Company has considered future taxable income and assesses the need for a valuation allowance, in the event Quakerthe HoughtonCompany were to determine that it would be able to realize its deferred tax assets in the future in excess of its net recorded amount, an adjustment to the deferred tax asset would increase income in the period such determination was made. Likewise, should the Company determine that it would not be able to realize all or part of its net deferred tax assets in the future, an adjustment to the deferred tax asset would be charged to income in the period such determination was made. Both determinations could have a material impact on the Company’s financial statements.

Pursuant to the Tax Cuts and Jobs Act (“U.S. Tax Reform”), the Company recorded a $15.5 million transition tax liability for U.S. income taxes on the undistributed earnings of non-U.S. subsidiaries. As of December 31, 2024,2025, $11.6the $15.5 million intransition installmentsliability havehas been paidfully withpaid. the remaining $3.9 million to be paid in 2025. However, theThe Company may also be subject to other taxes, such as withholding taxes and dividend distribution taxes, if certainthese undistributed earnings are ultimately remitted to the U.S. As of December 31, 2024,2025, the Company has a deferred tax liability of $8.4$8.5 million, which primarily represents the estimate of the non-U.S. taxes the Company will incur to remit certain previously taxed earnings to the U.S. It is the Company’s current intention to reinvest its future undistributed earnings of non-U.S. subsidiaries to support working capital needs and certain other growth initiatives outside of the U.S. The amount of such undistributed earnings at December 31, 20242025 was approximately $359.8$429.2 million. Any tax liability which might result from ultimate remittance of these earnings is expected to be substantially offset by foreign tax credits (“FTCs”) (subject to certain limitations), however, certain withholding taxes could apply. It is currently impractical to estimate any such incremental tax expense. See Note 10, Income Taxes, to the Consolidated Financial Statements for more information.

GoodwillBusiness and other intangible assetsCombinations: The Company accounts for business combinations under the acquisition method of accounting. This method requires the recording of acquired assets, including separately identifiable intangible assets, at their acquisition date fair values. Any excess of the purchase price over the estimated fair value of the identifiable net assets acquired is recorded as goodwill. The determination of the estimated fair value of assets acquired requires management’s judgment and often involves the use of significant estimates and assumptions, including assumptions with respect to projected revenue growth rates, gross margins, and operating margins, the weighted average cost of capital (“WACC”), royalty rates, asset lives and market multiples, among other items. When necessary, the Company consults with external advisors to help determine fair value. For non-observable market values, the Company may determine fair value using acceptable valuation principles, including the excess earnings, relief from royalty, lost profit or cost methods. The Company engaged an independent third-party valuation specialist to assist with the allocation of the total purchase price for the acquisition of Dipsol Chemicals Co., Ltd. and its subsidiaries, (“Dipsol”) to the fair value of the net assets acquired. The preliminary fair value of customer-related intangible assets was determined using the multi-period excess earnings method, while the preliminary fair value of product technology and trademarks were determined using the relief from royalty method. These valuation methodologies required the use of several assumptions and estimates, including, but not limited to, the customer attrition rate, the discount rate, net sales attributable to existing customers, the economic life, the EBITDA margin, and the contributory asset charge for the customer-related intangible assets, and the discount rate, the projected revenue, the royalty rate, and the economic life for the product technology and trademark intangible assets. The preliminary fair value of inventory was determined using the net realizable value approach, which includes the use of several estimates, including the selling prices and current replacement cost as of the valuation date. The preliminary fair value of land was determined using a sales comparison approach, which includes the use of several assumptions and estimates, including reproduction/replacement cost, while the preliminary fair value of building and improvements and personal property was determined using the cost approach, which includes the use of several assumptions and estimates, including the building condition, floor value, physical deterioration, functional and economic obsolescence, reproduction/replacement cost, and remaining useful lives. For further information see Note 2, Business Combinations, to the Consolidated Financial Statements.

The Company amortizes definite-lived intangible assets on a straight-line basis over their useful lives. Goodwill and intangible assets that have indefinite lives are not amortized and are required to be assessed at least annually for impairment. The Company completes its annual goodwill and indefinite-lived intangible asset impairment test during the fourth quarter of each year, or more frequently if triggering events indicate a possible impairment. The Company’s consolidated goodwill at December 31, 20242025 and 20232024 was $518.9$501.7 million and $512.5$518.9 million, respectively. As of December 31, 20242025 and 2023,2024, the Company had indefinite-lived intangible assets for trademarks and intangibles totaling $185.3$201.2 million and $193.2$185.3 million, respectively.

See Note 3, Recently Issued Accounting Standards, to the Consolidated Financial Statements for more information and for a discussion regarding recently adopted accounting standards and recently issued accounting standards not yet adopted.

The Company had cash and cash equivalents of $188.9$179.8 million and $194.5$188.9 million at December 31, 20242025 and 2023,2024, respectively. Cash held by subsidiaries in foreign countries was approximately $180.6$171.4 million and $177.1$180.6 million at December 31, 20242025 and 2023,2024, respectively. The $5.6$9.1 million decrease in cash and cash equivalents was the net result of $204.6$214.1 million of cash used in investing activities, largely offset by $136.5 million of cash provided by operating activities, largely offset by $122.7$61.8 million ofprovided cash used inby financing activities, $76.4 million of cash used in investing activities, and ana unfavorablefavorable impact of foreign currency translation of approximately $11.1$6.7 million.

Net cash flows provided by operating activities were $136.5 million in 2025 compared to $204.6 million in 2024 compared to $279.0 million in 2023.2024. The decrease in net operating cash flow year-over-year reflects alower decreaseoperating performance in 2025 compared to 2024, higher outflows from restructuring activities, and an increase in net cash inflowoutflows from working capital, notablyprimarily due to anhigher approximatelyoutflows $53.0of millionaccounts decreasepayable inand cashaccrued flow associated with inventory, as inventory purchases returned to normalized levels after inventory reductions in 2023liabilities due to customertiming destocking.of payments and higher outflows for the purchases of inventories.

Net cash flows used in investing activities were $214.1 million in 2025 compared to $76.4 million in 2024 compared to $27.6 million in 2023.2024. The increase in cash used in investing activities year-over-year is primarily the result of $39.3$164.2 million of paymentspayments, net of cash acquired, in the current year related to the acquisitions of theChemical SutaiSolutions Group& Innovations (Pty) Ltd. (“SutaiCSI”), Dipsol, and Natech, Ltd., (“Natech”), a $14.1 million increase in payments relating to capital expenditures, and $3.0 million of interest received from the fixed-for-fixed cross-currency swaps designated as net investment hedges. The prior year included $39.3 million of payments, net of cash acquired, related to the acquisitions of I.K.V. Tribologie IKVT and its subsidiaries (“IKV”), a $3.0 million increase in capital expenditures, and athe reductionSutai ofGroup proceeds from asset dispositions of $6.5 million.(“Sutai”). See Note 2, Business Combinations, to the Consolidated Financial Statements for further information about business acquisitions.

Net cash flows provided by financing activities were $61.8 million in 2025 compared to net cash flows used in financing activities wereof $122.7 million in 2024 compared to $238.6 million in 2023.2024. The decreaseincrease in net cash outflowsinflows was primarily relateddriven toby $17.9$174.2 million of net borrowings on the Company’s revolving credit facility in the current yearyear, an increase of $156.3 million compared to $164.8the prior year, which the Company used for the purpose of funding the purchase price of the Dipsol acquisition as well as for other corporate purposes. In addition, the Company made term loan debt payments of approximately $34.7 million ofin net2025, repaymentsa $22.5 million decrease in payments compared to the prior year. ThisThe wasCompany offsetalso bymade payments of approximately $49.2$41.5 million for repurchases of the Company’s common stock under its share repurchase program in the current yearyear, anda payments of $57.2$7.7 million to reduce long-term debt in the current year, an $18.3 million increasedecrease compared to the prior year. In addition, the Company paid $33.2 million of cash dividends to shareholders during 2024, a $1.5 million increase compared to the prior year.

During June 2022, the Company,Company and its wholly owned subsidiary, Quaker Houghton B.V., as borrowers, Bank of America, N.A., as administrative agent, U.S. Dollar swing line lender and letter of credit issuer, Bank of America Europe Designated Active Company, as Euro Swing Line Lender, certain guarantors and other lenders entered into an amendment to its primary credit facility (the “ Original Credit Facility”). The amended credit facility (“Credit Facility”) established (A) a new $150.0 million Euro equivalent senior secured term loan (the “Euro Term Loan”), (B) a new $600.0 million senior secured term loan (the “U.S. Term Loan”), and (C) a new $500.0 million senior secured revolving credit facility (the “Revolver”), each maturing in June 2027. The Company has the right to increase the amount of the Credit Facility by an aggregate amount not to exceed the greater of $300.0 million or 100% of Consolidated EBITDA, subject to certain conditions including the agreement to provide financing by any lender providing such increase. In addition, the Credit Facility also:

In connection with executing the Credit Facility, the Company recorded a loss on extinguishment of debt of approximately $6.8 million in Other income (expense), net on the Consolidated Statement of Operations during the year ended December 31, 2022. The loss on extinguishment of debt included the write-off of certain previously unamortized deferred financing costs as well as a portion of the third-party and creditor debt issuance costs incurred to execute the Credit Facility. The Company capitalized third-party and credit debt issuance costs attributed to the Euro Term Loan, U.S. Term Loan and Revolver in connection to the amended Credit Facility during the second quarter of 2022. Capitalized costs attributed to the Euro Term Loan and U.S. Term Loan are recorded as a direct offset to Long-term debt on the Consolidated Balance Sheets. Capitalized costs attributed to the Revolver are recorded within Other assets on the Consolidated Balance Sheets. These capitalized costs will collectively beare amortized into Interest expense over the five year term of the Credit Facility. As of December 31, 20242025 and 2023,2024, the Company had $1.1$0.7 million and $1.5$1.1 million, respectively, of debt issuance costs recorded as a reduction of Long-term debt and $2.4$1.4 million and $3.3$2.4 million, respectively, of debt issuance costs recorded within Other assets.

The Company uses foreign exchange forward contracts to economically hedge the impact of the variability in exchange rates on certain foreign currency-denominated assets and/or liabilitiesliabilities. denominatedAdditionally, in certainconnection with the Dipsol acquisition, in March 2025, the Company entered into foreign currencies.exchange Duringforward contracts with various financial institutions with an aggregate notional amount of $155.3 million to hedge the variability in U.S. dollar-Japanese yen exchange rates associated with the purchase price. These contracts settled on April 1, 2025 in connection with the Dipsol acquisition. The Company recognized a $1.4 million foreign currency loss during the year ended December 31, 2024,2025 in Other (expense) income, net relating to the Company entered into and settled forward contracts resultingchange in otherfair expensevalue of $2.0these millioninstruments compared to other incomeas of $2.1 million in the priorsettlement year.date. See Note 24, Hedging Activities, to the Consolidated Financial Statements for more information.

During 2022, the Company’s managementCompany initiated a global cost and optimization program to improve its cost structure and drive a more profitable and productive organization. The Company has achieved its initial full run-rateannualized cost savings goal from the global cost and optimizationthis program of approximatelyat least $20 million. In the first quarter of 2025, the Company approved additional actions under the program, which are expected to generate approximately an additional run-rate$40 million of annualized cost savingssavings. ofThese atactions least $20 million. The program isare expected to be substantially complete inby the first halfend of 2025.2026. The Company recognized $6.5$35.1 million, $7.6$6.5 million and $3.2$7.6 million of restructuring and related charges for the years ended December 31, 2024,2025, 20232024 and 2022,2023, respectively, as a result of these programs and other facility closure actions. The Company made cash payments related to the settlement of restructuring liabilities under the program of $7.6$26.6 million and $9.8$7.6 million during the years ended December 31, 20242025 and 2023,2024, respectively. The Company expects total one-time cash costs of this program to be approximately 1 to 1.5 times annualized savings. See Note 7, Restructuring and Related Activities, to the Consolidated Financial Statements for more information.

OnAs Februarypreviously 28, 2024,disclosed, the Board of Directors of the Company has approved a new share repurchase program (“2024 Share Repurchase Program”), authorizing the Company to repurchase up to an aggregate of $150 million of the Company’s outstanding common stock and replacing the prior share repurchase program, under which no repurchases were made in 2024.program. The 2024 Share Repurchase Program was effective immediately upon approval and has no expiration date. The Companynumber madeof certainshares repurchasesto underbe repurchased and the 2024timing Repurchaseof Programsuch duringtransactions thedepend yearon endeda Decembervariety 31,of 2024,factors, asincluding mentionedmarket above.conditions. As of December 31, 2024,2025, there was approximately $100.8$59.2 million of capacity remaining under the 2024 Share Repurchase Program. SeeThe NoteCompany 8,repurchased Equity,364,797 toand 312,997 shares under the Consolidated2024 FinancialShare StatementsRepurchase Program for morethe year ended December 31, 2025 and 2024, respectively. See Item 5, Unregistered Sales of Equity Securities, Use of Proceeds and Issuer Purchases of Equity Securities, within Part II of this Report for further information.

The following table summarizes the Company’s contractual obligations as of December 31, 2024,2025, and the effect such obligations are expected to have on its liquidity and cash flows in future periods. Pension and postretirement plan contributions beyond 20252026 are not determinable since the amount of any contribution is heavily dependent on the future economic environment and investment returns on pension trust assets. The timing of payments related to other long-term liabilities which consistsconsist primarily of deferred compensation agreements and environmental reserves, also cannot be readily determined due to their uncertainty. Interest obligations on the Company’s long-term debt and capital leases assume the current debt levels will be outstanding for the entire respective period and apply the interest rates in effect as of December 31, 2024.2025.

The information in this Report includes non-GAAP (unaudited) financial information that includes EBITDA, adjusted EBITDA, adjusted EBITDA margin, non-GAAP operating income, non-GAAP operating margin, non-GAAP net income and non-GAAP earnings per diluted share. 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, facilitate a comparison among fiscal periods, and exclude items that management believes are not indicative of future operating performance or 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. In addition, our definitions of EBITDA, adjusted EBITDA, adjusted EBITDA margin, non-GAAP operating income, non-GAAP operating margin, non-GAAP gross profit, non-GAAP gross margin, taxes on income before equity in net income of associated companies – adjusted, non-GAAP net income, and non-GAAP earnings per share, as discussed and reconciled below to the most comparable GAAP measures, may not be comparable to similarly named measures reported by other companies.

The Company presents EBITDAEBITDA, which is calculated as net income attributable to the Company before depreciation and amortization, interest expense, net, and taxes on income before equity in net income of associated companies. The Company also presents adjusted EBITDAEBITDA, which is calculated as EBITDA plus or minus certain items that management believes are not indicative of future operating performance or not considered core to the Company’s operations. In addition, theThe Company presents non-GAAP operating incomeincome, which is calculated as operating income plus or minus certain items that management believes are not indicative of future operating performance or considerscore to the Company’s operations. Additionally, the Company presents non-GAAP gross profit, which is calculated as gross profit plus or minus certain items that management believes are not indicative of future operating performance or core to the Company’s operations. Adjusted EBITDA marginmargin, non-GAAP operating margin, and non-GAAP operatinggross margin are calculated as the percentage of adjusted EBITDAEBITDA, non-GAAP operating income, and non-GAAP operatinggross incomeprofit to consolidated net sales, respectively. The Company believes these non-GAAP measures provide transparent and useful information and are widely used by analysts, investors, and competitors in our industry as well as by management in assessing the operating performance of the Company on a consistent basis.

Additionally, the Company presents non-GAAP net income and non-GAAP earnings per diluted share as additional performance measures. Non-GAAP net income is calculated as adjusted EBITDA, defined above, less depreciation and amortization, interest expense, net, and taxes on income before equity in net income of associated companies, in each case adjusted, as applicable, for any depreciation, amortization, interest or tax impacts resulting from the non-core items identified in the reconciliation of net income attributable to the Company to adjusted EBITDA. Non-GAAP earnings per diluted share is calculated as non-GAAP net income per diluted share as accounted for under the “two-class share method.” The Company believes that non-GAAP net income and non-GAAP earnings per diluted share provide transparent and useful information and are widely used by analysts, investors, and competitors in our industry as well as by management in assessing the performance of the Company on a consistent basis.

(cd)Strategic planning expenses (credits) expenses include certain consultant and advisory expenses for the Company's long-term strategic planning, as well as process optimization and the next phase of the Company's long-term integration to further optimize its footprint, processes and other functions.

(ge)ProductPension liabilityand claimpostretirement benefit costs, netnon-service components represents expensesthe relatedpre-tax, tonon-service components of the paymentsCompany’s bypension theand Companypostretirement net periodic benefit cost in connectioneach with product liability disputes with customers, net of insurance recoveries during 2024.period. See Note 20, Pension and Other Postretirement Benefits, and Note 9, Other Income(expense) (Expense),income, netnet, to the Consolidated Financial Statements for additional information.

(jh)Currency conversion impacts of hyper-inflationary economies represent the foreign currency remeasurement impacts associated with the Company’s affiliates in Argentina and Türkiye whose local economies are designated as hyper-inflationary under U.S. GAAP. These pre-tax foreign currency remeasurement impacts are not deductible for tax purposes for each of the years ended December 31, 2025 and 2024 and 2023 and 2022.2023. The charges incurred related to the immediate recognition of foreign currency remeasurement in the Consolidated Statements of Operations. See Note 1, Basis of Presentation and Significant Accounting Policies, to the Consolidated Financial Statements for additional information.

(ki)Impairment charges representrepresents the non-cash chargescharge taken to write down the remaining carrying value of goodwill forin the yearEMEA endedreportable Decembersegment 31,during 2022.the second quarter of 2025. See Note 15, Goodwill and Other Intangible Assets, to the Consolidated Financial Statements for additional information.

Net sales in the firstsecond quarter of 2026 were $480.5$532.6 million, an increase of 8%10% compared to $442.9$483.4 million in the firstsecond quarter of 2025. This increase was primarily driven by an increase in organicsales volumes of approximately 3%, a contribution from acquisitions of approximately 4%, and7%, a favorable impact from foreign currency translation of approximately 4%,2%, partiallyand offsetan by a declineincrease in selling price and product mix of approximately 3%.1%. The increase in organic sales volumes in all segments compared to the prior year was primarily a result of continued growth in the Asia/Pacific segment and new business wins across all segments, helping to offset a continuation of soft end market conditions, particularly in the Americas and EMEA segments, including the uncertainty caused by the macroeconomic environment.segments. The decreaseincrease in selling price and product mix wasreflects primarilypricing attributableactions taken to theoffset impacthigher ofraw material costs, as well as changes in the mix of products, servicesproducts and geographiesservices, and the impact of our index-based customer contracts.

The Company reported net income in the firstsecond quarter of 2026 of $19.7$26.8 million, or $1.13$1.55 earnings per diluted share, compared to $12.9a net loss of $66.6 million, or $0.73$3.78 earningsloss per diluted share in the firstsecond quarter of 2025. Excluding non-recurring and non-core items in each period, the Company’s firstsecond quarter 2026 non-GAAP net income and earnings per diluted share were $28.4$37.9 million and $1.63$2.19 compared to $28.0$30.0 million and $1.58,$1.71, respectively, in the prior year. The increase in current quarter Non-GAAP earnings was primarily driven by an increase in net sales and improved gross margins,sales, partially offset by an increase in selling, general and administrative expenses (“SG&A”). and a slight decrease in Non-GAAP gross margin. The Company’s current quarter adjusted EBITDA was $72.5$85.2 million compared to $69.0$75.5 million in the firstsecond quarter of 2025, primarily driven by the increase in net sales, partially offset by lowerhigher operating margins.SG&A. See the Non-GAAP Measures and Consolidated Operations Review sections of this Item below for additional details.

The Company’s firstsecond quarter 2026 operating performance in each of its three reportable segments: (i) Americas; (ii) EMEA; and (iii) Asia/Pacific, reflects similar drivers to that of the Company’s consolidated performance. Operating earnings for the EMEA and Asia/Pacific segments increased compared to the prior year quarter, primarily due to an increase in net sales and an improvement in segment gross margins, partially offset by higher SG&A. Operating earnings for the Americas segment decreased compared to the prior year quarter primarily due to lower segment gross margins and higher SG&A.A, partially offset by an increase in net sales. Additional details of segment operating performance are provided in the Reportable Segments Review in the Operations section of this Item below.

Net cash flows provided by operating activities were $3.8$33.2 million in the first threesix months of 2026 compared to $3.1$38.5 million of net cash flows usedprovided inby operating activities the first threesix months of 2025. The higherlower operating cash inflow year-over-year reflects higher net cash outflows from working capital, partially offset by improved operating performance and lower cash outflows from restructuring activities and working capital in the first threesix months of 2026 compared to the first threesix months of 2025. The key drivers of the Company’s operating cash flow and working capital are further discussed in the Company’s Liquidity and Capital Resources section of this Item below.

Overall, the Company’s results in the firstsecond quarter of 2026 reflect an increase in net sales in all segments,segments compared to the prior quarter and the prior year quarter, driven by acquisitions and new business wins, despite a continuation of challenging end market conditions, and the Company’s continued focus on delivering on its long-term financial and strategic initiatives.

We had cash and cash equivalents of $169.7$155.1 million and $179.8 million as of MarchJune 31,30, 2026 and December 31, 2025, respectively. Cash held by subsidiaries in foreign countries was approximately $162.5$146.8 million and $171.4 million at MarchJune 31,30, 2026 and December 31, 2025, respectively. The $10.1$24.7 million decrease in cash and cash equivalents was the net result of $9.5$38.4 million of cash used in financing activities, $18.8 million of cash used in investing activities, $3.4 million of cash used in financing activities, and a $0.9$0.7 million unfavorable impact of foreign currency translation, partially offset by $3.8$33.2 million of cash provided by operating activities.

Net cash flows provided by operating activities were $3.8$33.2 million in the first threesix months of 2026 compared to net cash flows usedprovided inby operating activities of $3.1$38.5 million in the first threesix months of 2025. The increasedecrease in net operating cash flow year-over-year reflects improved operating performance, lower outflows from restructuring activities, and lowerhigher net cash outflows from working capital.capital, partially offset by improved operating performance and lower outflows from restructuring activities. The lowerhigher net cash outflows from working capital were primarilyare due to higher inflows from the timing of payments of accounts payable. This is partially offset by higher net cash outflows from accounts receivable due to an increase in net sales and timing of collections and higher net cash outflows for the purchases of inventory due to higher workingraw capitalmaterial needscosts includingand strategic inventory builds at production sites in advance of planned manufacturing transitions and in response to global supply chain risks in connection with the conflict in the Middle East. This is partially offset by higher inflows from the timing of payments of accounts payable.

Net cash flows used in investing activities were $9.5$18.8 million in the first threesix months of 2026 compared to $13.4$180.7 million in the first threesix months of 2025. The decrease in cash used in investing activities year-over-year is primarily the result of $4.0$164.1 million of payments, net of cash acquired, in the prior year related to the acquisitionacquisitions of Chemical Solutions & Innovations (Pty) Ltd,Ltd. (“CSI”), Dipsol Chemicals Co., Ltd., (“Dipsol”) and aNatech, $1.7Ltd., million decrease in payments related to capital expenditures.(“Natech”). This is partially offset by $2.9$3.0 million proceeds from asset dispositions in the prior year.year and $0.7 million increase in payments related to capital expenditures. See Note 2, Business Acquisitions, to the Condensed Consolidated Financial Statements for further information about business acquisitions.

Net cash flows used in financing activities were $3.4$38.4 million in the first threesix months of 2026 compared to $11.0$147.5 million cash provided by financing activities in the first threesix months of 2025. The decrease in financingnet cash inflows from financing activities is primarily driven by a $15.9$901.8 million decreaseincrease ofin net borrowingspayments on the Company’s revolvingU.S. creditand facilityEuro Term Loan and Revolver loans, which is primarily related to repaying in full all outstanding loan commitments under the existing Credit Facility in connection with amending the Credit Facility in April 2026. Proceeds from the Revolver decreased by $85.7 million, which is primarily related to a revolver borrowing during the first threesix months of 2025 to fund the purchase price of the Dipsol acquisition, partially offset by a revolver borrowing upon executing the Amended Credit Facility in April 2026. The first six months of 2026 comparedalso includes a $6.2 million net cash outflow relating to financing-related debt issuance costs associated with the priorAmended year.Credit Facility. This is partially offset by a $2.4$800.0 million increase ofin borrowingsproceeds offrom otherthe U.S. and Euro Term Loan debt inupon executing the firstAmended threeCredit monthsFacility ofin April 2026 and a $8.5 million decrease in share repurchases compared to the prior year.

Subsequent to the first quarter of 2026, in April 2026, theThe Company, andalong with its wholly owned subsidiary, Quaker Houghton B.V., as borrowers, maintain a credit facility with Bank of America, N.A., as administrative agent, U.S. dollar swing line lender and letter of credit issuer, Bank of America Europe Designated Active Company, as Euro Swing Line Lender, certain guarantors and other lenderslenders. entered into the fourth amendment to its primaryThe credit facility, enteredas intoamended in AugustJune 2019. The amended credit facility2022 (the “Amended Credit Facility”), established (A) a $250.0$150.0 million Euro equivalent senior secured term loanloan, (B) a $550.0$600.0 million senior secured term loanloan, and (C) a $800.0$500.0 million senior secured revolving credit facility, each maturing in AprilJune 2031. The Company primarily used the proceeds from the Amended Credit Facility to repay in full all outstanding loans under the existing Credit Facility and to terminate the revolving credit commitments under the existing Credit Facility. The Company has the right to increase the amount of the Amended Credit Facility by an aggregate amount not to exceed (a) the greater of (i) $331.0 million and (ii) 100% of Consolidated EBITDA, subject to certain conditions including the agreement to provide financing by any lender providing such increase.2027.

As of MarchJune 31,30, 2026 and December 31, 2025, the Company had Amended Credit Facility and Credit Facility borrowings outstanding of $861.8$864.7 million and $859.7 million, respectively. The Company’s other debt obligations are primarily industrial development bonds, bank lines of credit and municipality-related loans, which totaled $13.2 million and $11.5 million as of MarchJune 31,30, 2026 and December 31, 2025. Total unused capacity under these arrangements, excluding the Amended Credit Facility, as of MarchJune 31,30, 2026 was approximately $58$63 million. The Company’s total net debt as of MarchJune 31,30, 2026, which consists of total borrowings of $875.0$876.1 million less cash and cash equivalents of $169.7$155.1 million, was approximately $705.3$721.0 million.

The weighted average variable interest rate incurred on the outstanding borrowings under the Amended Credit Facility and Credit Facility during the three and six months ended MarchJune 31,30, 2026 was approximately 4.8%.4.6% and 4.70%, respectively. As of MarchJune 31,30, 2026, the weighted average variable interest rate on the outstanding borrowings under the Amended Credit Facility was approximately 4.7%.4.40%. As part of the Credit Facility, in addition to paying interest on outstanding principal, the Company iswas also required to pay an annual commitment fee ranging from 0.150% to 0.275% related to unutilized commitments under the Revolver,senior secured revolving credit facility, depending on the Company’s consolidated net leverage ratio. As part of March 31, 2026, the CompanyAmended hadCredit unused capacity underFacility, the Revolverrange of approximatelythe $255annual million,commitment whichfee iswas netchanged offrom bank0.125% lettersto of credit of approximately $2 million.0.275%.

In order to manage the Company’s exposure to variable interest rate risk associated with the Credit Facility, such as the Secured Overnight Financing Rate (“SOFR”), in the first quarter of 2023, the Company entered into $300.0 million notional amounts of three-year interest rate swaps to convert a portion of the Company’s variable ratevariable-rate borrowings into ana averagefixed-rate fixedobligation. rate obligation of 3.64% plus an applicable margin as provided in the Credit Facility based on the Company’s consolidated net leverage ratio. InDuring March 2026, the Company’s interest rate swap contracts expired. In April 2026, the Company entered into $400.0 million notional amountsamount of four-year interest rate swaps, converting a portion of the Company’s variable rate borrowings relating to the Amended Credit Facility into an average fixed rate of 3.58% plus the applicable margin. See Note 17, Hedging Activities, to the Condensed Consolidated Financial Statements for further information.

The Company capitalized third-party and credit debt issuance costs attributedPrior to the Euro Term Loan, U.S. Term Loan and Revolver duringexecuting the second quarter of 2022. Capitalized costs attributed to the Euro Term Loan and U.S. Term Loan are recorded as a direct offset to Long-term debt on the Condensed Consolidated Balance Sheets. Capitalized costs attributed to the Revolver are recorded within Other assets on the Condensed Consolidated Balance Sheets. These capitalized costs are amortized into Interest expense over the five-year term of theAmended Credit Facility. As of March 31, 2026 and December 31, 2025,Facility, the Company had $0.5 million and $0.7 million, respectively, of debt issuance costs recorded as a reduction of Long-term debt and $1.2$1.1 million and $1.4 million, respectively, of debt issuance costs recorded within Other non-current assets on the Condensed Consolidated Balance Sheets. In connection with executing the Amended Credit Facility, the Company recorded debt modification and extinguishment costs of approximately$1.7 million, which includes the write-off of certain previously unamortized debt issuance costs and a portion of third-party costs that were incurred to execute the Amended Credit Facility. Also in connection with executing the Amended Credit Facility, during the second quarter of 2026 the Company capitalized $6.2 million of creditor debt issuance costs and certain third-party costs. Approximately $2.4 million of the capitalized costs were attributed to the Euro Term Loan and U.S. Term Loan and were recorded as a direct reduction of Long-term debt on the Condensed Consolidated Balance Sheet. Approximately $3.8 million of the capitalized costs were attributed to the Revolver and recorded within Other non-current assets on the Condensed Consolidated Balance Sheets. These capitalized costs, as well as the previously capitalized costs that were not written off, will collectively be amortized into Interest expense over the five-year term of the Amended Credit Facility. As of June 30, 2026, the Company had $2.7 million of debt issuance costs recorded as a reduction of Long-term debt and $4.6 million of debt issuance costs recorded within Other non-current assets.

The Company uses foreign exchange forward contracts to economically hedge the impact of the variability in exchange rates on certain foreign currency-denominated assets and liabilities. During the threesix months ended MarchJune 31,30, 2026, the Company entered into and settled forward contracts resulting in other income of $0.4$1.0 million as compared to $1.9$0.4 million of other expense during the threesix months ended MarchJune 31,30, 2025. In connection with the Dipsol acquisition, in March 2025, the Company entered into foreign exchange forward contracts with various financial institutions with an aggregate notional amount of $155.3 million to hedge the variability in U.S. dollar-Japanese yen exchange rates associated with the purchase price. These contracts settled on April 1, 2025 in connection with the Dipsol acquisition. During the threesix months ended MarchJune 31,30, 2025, the Company recognized a $1.9$1.4 million foreign currency loss in Other expense,income (expense), net relating to changes in fair value of these instruments as of the settlement date. See Note 17, Hedging Activities, to the Condensed Consolidated Financial Statements for further information.

In 2026, the Company initiated a global business transformation program (the “2026 program”), encompassing several strategic transformation and restructuring initiatives. The 2026 program primarily involves simplifying the organizational structure of legal entities, projects associated with information technology infrastructure initiatives, the optimization of specific product portfolios through targeted rationalization efforts, the optimization of certain supply chain activities and related workforce reductions. The 2026 program began in the first quarter of 2026 and is expected to be complete in 2028. The Company expects the program to generate at least $20 million to $30 million of annualized cost savings. The Company recognized restructuring and related charges and cash payments relating to the settlement of restructuring liabilities of $4.4$8.9 million and $1.0$3.9 million during the threesix months ended MarchJune 31,30, 2026, respectively, under this program. The Company expects total one-time cash costs of this program to be approximately 1 to 1.5 times annualized savings.

During 2022, the Company initiated a global cost and optimization program (the “2022 program”) to improve its cost structure and drive a more profitable and productive organization. The Company has achieved its annualized cost savings goal from this program of at least $20 million. During 2025, the Company approved additional actions under the 2022 program, which are expected to generate approximately an additional $40.0 million of annualized cost savings. These actions are expected to be substantially complete by the end of 2026. The Company recognized restructuring and related charges of $3.0$6.6 million and $14.6$23.4 million for the threesix months ended MarchJune 31,30, 2026 and 2025, respectively, under this program. The Company made cash payments related to the settlement of restructuring liabilities under the 2022 program during the first threesix months of 2026 of approximately $2.9$7.4 million compared to $9.0$15.9 million in the first threesix months of 2025. The Company expects total one-time cash costs of this program to be approximately 1 to 1.5 times annualized savings. See Note 7, Restructuring and Related Activities, to the Condensed Consolidated Financial Statements for further information.

As of MarchJune 31,30, 2026, the Company’s gross liability for uncertain tax positions, including interest and penalties, was $15.7$13.9 million. The Company cannot determine a reliable estimate of the timing of cash flows related to its uncertain tax position liability. However, should the entire liability be paid, the amount of the payment may be reduced by up to $7.5$6.5 million as a result of offsetting benefits in other tax jurisdictions.

As previously disclosed, the Board of Directors of theThe Company hasmaintained approvedits aprevious share repurchase program (the “2024 Share Repurchase Plan”), which was approved by the Board and announced by the Company on February 28, 2024, which authorized the repurchase of up to $150.0 million of Quaker Chemical Corporation common stock, and had no expiration date. On May 13, 2026, the Board approved a new share repurchase program (the “2026 Share Repurchase Program”), authorizing the Company to repurchase up to an aggregate of $150$250.0 million of the Company’s outstanding common stock and replacing the prior share repurchase program.stock. The 20242026 Share Repurchase Program was effective immediatelyimmediately, replaced the 2024 Share Repurchase Plan, and has no expiration date. The Company did not make anymade purchases under the 2024 Share Repurchase Program and 2026 Share Repurchase Program while each was in effect during the threesix months ended MarchJune 31,30, 2026. See Item 2, Unregistered Sales of Equity Securities, Use of Proceeds and Issuer Purchases of Equity Securities, within Part II of this Report for further information.

The Company believes that its existing cash, anticipated cash flows from operations and available liquidity will be sufficient to support its operating requirements and fund its business objectives for at least the next twelve months, including but not limited to payments of dividends to shareholders, share repurchases, capital expenditures, other growth opportunities (including potential acquisitions), pension plan contributions, implementing actions to achieve the Company’s sustainability goals and other potential known or anticipated contingencies. The Company also believes it has sufficient additional liquidity to support its operating requirements and to fund its business obligations for the period beyond the next twelve months, including the aforementioned items which are expected to recur annually, as well as future principal and interest payments on the Company’s Amended Credit Facility, tax obligations and other long-term liabilities. The Company’s liquidity is affected by many factors, some based on normal operations of our business and others related to the impact of global events on our business and on global economic conditions as well as industry uncertainties, which we cannot predict. We also cannot predict economic conditions and industry downturns or the timing, strength or duration of recoveries. We may seek, as we believe appropriate, additional debt or equity financing that would provide capital for corporate purposes, working capital funding, additional liquidity needs or to fund future growth opportunities, including possible acquisitions and organic investments. The timing and amount of potential additional capital requirements cannot be determined at this time and will depend on a number of factors, including the actual and projected demand for our products, specialty chemical industry conditions, competitive factors, and the condition of financial markets, among others.

Consolidated Operations Review – Comparison of the FirstSecond Quarter of 2026 with the FirstSecond Quarter of 2025

Net sales in the firstsecond quarter of 2026 were $480.5$532.6 million, an increase of 8%10% compared to $442.9$483.4 million in the firstsecond quarter of 2025. This increase was primarily driven by an increase in organicsales volumes of approximately 3%, a contribution from acquisitions of approximately 4%, and7%, a favorable impact from foreign currency translation of approximately 4%,2%, partiallyand offsetan by a declineincrease in selling price and product mix of approximately 3%.1%. The increase in organic sales volumes in all segments compared to the prior year was primarily a result of continued growth in the Asia/Pacific segment and new business wins across all segments, helping to offset a continuation of soft end market conditions, particularly in the Americas and EMEA segments, including the uncertainty caused by the macroeconomic environment.segments. The decreaseincrease in selling price and product mix wasreflects primarilypricing attributableactions taken to theoffset impacthigher ofraw material costs, as well as changes in the mix of products, servicesproducts and geographiesservices, and the impact of our index-based customer contracts.

Cost of goods sold (“COGS”) was $303.7$343.3 million in the firstsecond quarter of 2026 compared to $281.7$311.7 million in the firstsecond quarter of 2025, an increase of approximately $22.0$31.6 million, or 8%.10%. The increase in COGS reflects an increase in spend on the increase in current year sales volumes,volumes partiallyand offsetan by a slight decreaseincrease in global raw material costs. Additionally, COGS in the second quarter of 2025 includes a $3.6 million gain related to an out-of-period inventory adjustment, which is partially offset by $6.0 million amortization of the fair value step-up in Dipsol’s inventories as a result of the acquisition.

Gross profit was $176.7$189.2 million in the firstsecond quarter of 2026 compared to $161.3$171.7 million in the firstsecond quarter of 2025, an increase of $15.4$17.5 million, or 10% primarily due to an increase in salesnet andsales, aan slight decreaseincrease in raw material costs.costs, a $3.6 million gain related to an out-of-period inventory adjustment in the second quarter of 2025, partially offset by $6.0 million amortization of the fair value step-up in Dipsol’s inventories as a result of the acquisition in the second quarter of 2025. The Company’s reported gross margin in the firstsecond quarter of 2026 and 2025 was each 35.5%. The Company’s non-GAAP gross margin in the second quarter of 2026 was 36.8%35.5% compared to 36.4%36.0% in the firstsecond quarter of 2025. See the Non-GAAP Measures section of this Item below for additional details.

SG&A expense was $135.8$140.5 million in the firstsecond quarter of 2026 compared to $119.0$126.6 million in the firstsecond quarter of 2025, an increase of approximately $16.8$13.9 million, or 14%,11%, primarily driven by an increase in SG&Aincentive expenses related to acquisitions,compensation, an increase in incentivebusiness compensation,transformation costs as part of the 2026 program, and unfavorable impacts from foreign currency translation.

The Company incurred Restructuring and related charges of $7.4$8.1 million and $14.6$8.8 million during the firstsecond quarter of 2026 and 2025, respectively, primarily related to a lower number of headcountadditional reductions in theheadcount firstand quarterfacility closure costs as part of the 2022 program and 2026 compared to the first quarter of 2025.program. See the Non-GAAP Measures section below and Note 7, Restructuring and Related Activities, to the Condensed Consolidated Financial Statements for additional information.

Operating income in the firstsecond quarter of 2026 was $33.6$40.6 million compared to $27.6the operating loss of $52.5 million in the firstsecond quarter of 2025. The operating loss in the second quarter of 2025 was primarily driven by the $88.8 million non-cash impairment charge described above. Excluding non-recurring and non-core expenses that are not indicative of the future operating performance of the Company described in the Non-GAAP Measures section of this Item below, the Company’s non-GAAP operating income was $45.3$55.3 million in the firstsecond quarter of 2026 and $45.8$50.6 million in the firstsecond quarter of 2025. The slight decreaseincrease in non-GAAP operating income was primarily due to higher SG&A, partially offset by an increase in net salessales, partially offset by higher SG&A and higherslightly lower non-GAAP gross margins, as described above.

The Company had Other expense,income, net of less than $0.1$0.4 million in the firstsecond quarter of 2026 as compared to Other expense, net of $0.7 million in the firstsecond quarter of 2025. BothThe the firstsecond quarter of 2026 and 2025 included foreign exchange transaction losses,gains whichof were $2.8$0.7 million highercompared to foreign exchange translation losses of $1.1 million in the prior year. TheAdditionally, priorthe yearsecond alsoquarter of 2026 included otherdebt incomeextinguishment fromand netmodification gain on disposalscosts of property$1.7 million and a product liability claim reimbursement of $2.1$1.0 million, while the second quarter of 2025 included an earnout liability adjustment of $0.3 million.

Interest expense was $9.9 million in the firstsecond quarter of 2026 compared to $9.5$12.8 million in the firstsecond quarter of 2025, ana increasedecrease of approximately $0.4$2.9 million, primarily as a result of higherlower outstanding borrowings,borrowings partially offset byand decreases in interest rates.

The Company’s effective tax rates for the firstsecond quarters of 2026 and 2025 were 30.2%35.9% and 43.4%,(8.3)%, respectively. The Company’s effective tax rate for the firstsecond quarter of 2026 was largely driven by our mix of pre-tax earnings and withholding taxes. Comparatively, the effective tax rate for the firstsecond quarter of 2025 was largely driven by our mix of pre-tax earnings, goodwill impairment charges and withholding taxestaxes, andoffset by return to provision adjustments offset byand net favorable reductions in uncertain tax positions. Excluding the impact of non-core items in each quarter, described in the Non-GAAP Measures section of this Item below, the Company estimates that its effective tax rates for the first quarters of 2026 and 2025 would have been approximately 28% for each of the second quarters of 2026 and 29%, respectively.2025. The Company may experience continued volatility in its effective tax rates due to several factors, including the timing of tax audits, the expiration of applicable statutes of limitations as they relate to uncertain tax positions, the unpredictability of timing and amount of certain incentives in various tax jurisdictions, and the timing and amount of certain share-based compensation-related tax benefits, among other factors. In addition, the foreign tax credit valuation allowance, or absence thereof, is based on a number of factors, including forecasted mix of earnings, which may vary.

Equity in net income of associated companies was $3.2$6.8 million in the firstsecond quarter of 2026 compared to $3.1$4.9 million in the firstsecond quarter of 2025, an increase of $0.1$1.9 million, primarily due to recognizinghigher earningscurrent year income from SKT,the Company’s 50% equity interest in a 30%joint equityventure methodin Korea and higher current year income from the Company’s 32% investment thein CompanyPrimex, acquireda ascaptive partinsurance of the Dipsol acquisition.company.

Net (loss) income attributable to noncontrolling interest was less than $0.1 millionimmaterial in the firstsecond quarter of 2026 and 2025.

ReportableConsolidated SegmentsOperations Review -– Comparison of the First QuarterSix Months of 2026 with the First QuarterSix Months of 2025

Segment operating earnings for each of the Company’s reportable segments are comprised of the segment’s net sales less directly related product costs and other segment items. Operating expenses not directly attributable to the net sales of each respective segment, such as certain corporate and administrative costs and restructuring charges, are not included in segment operating earnings. Other items not specifically identified with the Company’s reportable segments include Interest expense and Other expense,income (expense), net.

Americas represented approximately 44% of the Company’s consolidated net sales in the firstsecond quarter of 2026. This segment’s net sales were $213.7$236.5 million, whichan wasincrease consistentof $15.5 million, or 7%, compared to the firstsecond quarter of 2025. This was driven by an increase in net sales from the acquisition of Dipsolvolumes of approximately 2%,4%, a favorable foreign exchange impact of 1%, partially offset by a decrease in organic sales volumes of approximately 2%2%, and aan decreaseincrease in selling price and product mix of approximately 1%. Sales volumes increased compared to the prior year primarily due to new business wins. The increase in selling price and product mix was primarily attributable to pricing actions taken to offset higher raw material costs, as well as changes in the mix of products and services, and the impact of our index-based customer contracts. The favorable foreign exchange impact was primarily due to the weakening of the U.S. dollar against the Mexican peso and Brazilian real. Sales volumes declined compared to the prior year due to a continuation of soft end market conditions further impacted by the uncertainty of the macroeconomic environment, partially offset by new business wins. The decrease in selling price and product mix was primarily attributable to the impact of the mix of products, services and geographies and the impact of our index-based customer contracts. Segment operating earnings were $53.9$57.2 million, a decrease of $4.5$1.7 million, or 8%,3%, compared to the firstsecond quarter of 2025, primarily driven by lower segment gross margins and higher SG&A.A, partially offset by an increase in net sales.

EMEA represented approximately 30% of the Company’s consolidated net sales in the firstsecond quarter of 2026. This segment’s net sales were $142.1$158.4 million, an increase of $12.8$18.5 million, or 10%,13%, compared to the firstsecond quarter of 2025. This was driven by an increase in organic sales volumes of approximately 2%,7%, an increase in netselling sales from the acquisitions of Dipsolprice and Natechproduct mix of approximately 2%,4% and a favorable impact from foreign currency translation of approximately 10%, partially offset by a decrease in selling price and product mix of approximately 4%.2%. The increase in organic sales volumes was primarily driven by new business wins,wins. whichThe helpedincrease in selling price and product mix was primarily attributable to pricing actions taken to offset ahigher continuationraw material costs, as well as changes in the mix of softproducts endand marketservices, conditions, which were further impacted byand the uncertaintyimpact of theour macroeconomicindex-based environment.customer contracts. The favorable foreign currency translation impact was primarily due to the weakening of the U.S. dollar against the Euro. The decrease in selling price and product mix was primarily attributable to the impact of the mix of products, services and geographies and the impact of our index-based customer contracts. Segment operating earnings were $25.6$32.7 million, an increase of $2.2$7.7 million, or 9%,31%, compared to the firstsecond quarter of 2025, primarily due to an increase in net sales and an improvement in segment gross margins, partially offset by higher SG&A.

Asia/Pacific represented approximately 26% of the Company’s consolidated net sales in the firstsecond quarter of 2026. This segment’s net sales were $124.7$137.6 million, an increase of $24.7$15.2 million, or 25%,12%, compared to the firstsecond quarter of 2025. This was driven by an increase in net sales from the acquisition of Dipsol of approximately 14%, an increase in organic sales volumes of approximately 10%, an increase in selling price and product mix of approximately 1%, and a favorable impact from foreign currency translation of approximately 3%, partially offset by a decrease in selling price and product mix of approximately 2%.1%. The increase in organic sales volumes was primarily driven by new business wins despite a modest decrease in underlying market conditions.wins. The favorable foreign currency translation impact was primarily due to the weakening of the U.S. dollar against the Chinese renminbi. The decreaseincrease in selling price and product mix was primarily attributable to thepricing impactactions oftaken to offset higher raw material costs, as well as changes in the mix of products, servicesproducts and geographiesservices, and the impact of our index-based customer contracts. Segment operating earnings were $34.3$36.6 million, an increase of $8.3$7.8 million, or 32%,27%, compared to the firstsecond quarter of 2025, primarily due to an increase in net sales and an improvement in segment gross margins, partially offset by higher SG&A.