Quaker Houghton

of Investor Relations. Mr. Schnell, you may begin.

Thank you. Good morning, and welcome to our second quarter 2025 earnings conference call. On the call today are Joe Berquist, our President and Chief Executive Officer, Tom Kohler, our Executive Vice President and Chief Financial Officer, and Robert Traub, our General Counsel. Our comments relate to the financial information released after the close of the U.S. markets yesterday, July 31st, 2025. Our press release and accompanying slides can be found on our investor relations website. Both the prepared commentary and discussion during this call may contain forward-looking statements reflecting the company's current view of future events and their potential effect on Quaker Houghton's operating performance. These statements involve uncertainties and risks, which may cause actual results to differ. The company is under no obligation to provide subsequent updates to these forward-looking statements. This presentation also contains certain non-GAAP financial measures, and the company has provided reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measure in the appendix of the presentation materials, which are available on our website. For additional information, please refer to our filings with the SEC. Now it is my pleasure to hand the call over to Joe.

Thank you, Jeff, and good morning, everyone. In the second quarter, we delivered organic volume growth of 2% year over year, led by another strong performance in Asia Pacific. Importantly, all segments delivered organic volume growth on a sequential basis, mitigating sustained macroeconomic pressures. We are gaining traction with our key objectives, refocusing and strengthening the organization around the customer, which is enabling us to grow our share and outpace the market at solid levels of profitability. and we have been deliberate in our actions to reduce complexity and improve our cost structure to support stronger and sustained performance over the long term. In the second quarter, we generated $42 million of operating cash flow and executed our capital allocation strategy, including repurchasing $33 million of shares. I am pleased with the team's performance in the second quarter as they continue to adapt to the dynamic external environment while keeping a clear focus on our customers' needs. Second quarter results were broadly in line with our expectations. We delivered a 4% year-over-year increase in sales, including a 2% increase in organic sales volume. This was led by an 8% increase on organic sales volume in Asia Pacific. We also benefited from the contribution from acquisitions, namely Dipsol, which we closed early in the quarter and is performing in line with expectations. We estimate the aggregate of the markets we served declined in the second quarter a low single-digit percentage compared to the prior year, with regional differences. Our end markets were also largely stable with the first quarter. Uncertainty created by tariffs is impacting demand overall, as well as weighing on our geographic and product mix. Share gains remain strong across the portfolio. mitigating the impact of the persistent and challenging end markets. These gains are trending at the high end of our range as we successfully convert trials and cross-sell. We remain encouraged by the business development opportunities we are generating and expect to continue to capitalize on our pipeline to drive sustained above-market growth. Gross profit dollars were in line with the prior year and above the prior quarter. Gross margins were slightly lower at 36%, but remained within our target range. Margin performance was influenced by both product and geographic mix, as well as higher raw material and manufacturing costs, some of which were induced by tariffs. We generated $75.5 million of adjusted EBITDA in the second quarter, an increase of approximately $6 million sequentially, with adjusted EBITDA margins of 15.6%, reflecting our sales growth and disciplined cost management. Our resilient performance underscores the strong culture at Quaker Houghton. Our success is driven by our commitment to serving the customer. By being indispensable to our customers, we are earning the right to grow as a stronger, more profitable enterprise, regardless of the in-market environment. A few key areas of strength are fueling our organic growth. We believe we have the most comprehensive portfolio of solutions in our industry and our team of technical experts collectively possess unmatched industry leading process and application knowledge. We are leveraging our financial strength and global reach by investing in new manufacturing capabilities, driving innovation through our global R&D organization and deploying resources to help our customers manufacture metals and metal containing industrial goods more cost effectively, safer, and in more sustainable ways. We are also giving our customers a broader set of solutions and improving our manufacturing capabilities in highly competitive markets to drive growth with strategic customers and reduce churn, which is trending back to historical levels. And we are harnessing our centers of innovation around key initiatives like fluid intelligence, to enhance the outcomes for our customers by developing breakthrough sensor technology, digitized services and automation. We also have significant opportunities in our portfolio of advanced solutions where volumes are up a double digit percentage year over year. As I mentioned in the beginning, we are winning in Asia Pacific where we have delivered organic growth for seven of the last eight quarters as we earn new business in excess of market growth rates. by capitalizing on the evolving landscape in China as well as growth regions like India and Southeast Asia. We expect further contribution as we integrate Dipsol's leading technology and capabilities into our portfolio and commercialize our new facility in China in the second half of 2026, solidifying our local-for-local strategy in the region. It is critical that we continue to invest in our growth while maintaining a clear emphasis on controlling what we can control. In the first half of 2025, we actioned our previously announced $20 million cost program, yielding approximately $15 million of realized savings in 2025. To align with the ongoing environment, we have identified further actions to drive out complexity and enhance our competitiveness. To that end, we are initiating cost actions which we expect will deliver approximately $20 million of additional run rate savings by the end of 2026. We expect these actions will deliver $5 to $8 million of incremental in-year savings in the second half of 2025. We have closed one facility in our Americas network year to date. Further actions across the network are necessary, including possible asset consolidation. to unlock the leverage in our model and support our ability to deliver adjusted EBITDA margins in the high teens as a percent of sales over time. This journey is underway and we expect to provide more details in the coming quarters. And lastly, we are executing on our discipline capital allocation strategy. This week, the board approved a 5% increase to our cash dividend, our 16th consecutive annual increase. We also closed on two acquisitions and we repurchased $33 million of shares. We have approximately $68 million remaining on our current authorization, and we will continue to be opportunistic with share repurchases, balanced with our growth ambitions while preserving our financial flexibility. We continue to execute our enterprise strategy with a focus on driving growth and delivering greater value to customers. Turning to our outlook, based on indicators we track, tariffs and a significant amount of uncertainty, we forecast the end market softness we experienced in the first half will persist through the second half of 2025. Our pipeline of product trials remains healthy, and we are confident in our ability to convert them to new business with customers. This will support our ability to drive above market growth in 2025. in line with our long-term annual expectation of two to four percent. DIPSOL is performing in line with expectations and should also help offset some of the market softness as we progress through the year. We expect the business performance will improve in the second half of 2025 and therefore we forecast revenue and earnings will be in the range of 2024. This is based on our current market visibility in the timing and execution of the additional cost actions I mentioned earlier. We will remain diligent and agile to navigate the current uncertainty while positioning the company to capitalize on the positive long-term fundamentals of our industry. We have conviction in our strategy and are balancing the near-term and long-term needs of the organization. We will continue to demonstrate strong execution regardless of the market environment delivering for our customers, and in turn, creating value for shareholders. With that, I'd like to pass it to Tom to discuss the financials in more detail.