Quaker Houghton

If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn the call over to Jeffrey Schnell, Vice President of Investor Relations. Mr. Schnell, you may begin.

Thank you. Good morning, and welcome to Quaker Houghton's third quarter 2025 earnings conference call. Joining us 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, October 30, 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 and financial 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 to the most directly comparable GAAP financial measures 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's my pleasure to hand the call over to Joe.

Thank you, Jeff, and good morning, everyone. We had a strong performance in the third quarter with adjusted EBITDA up 5% and adjusted earnings per share up 10% year over year. Our results were highlighted by another consecutive quarter of organic volume growth across all regions. This was amplified by ongoing strength in Asia Pacific and strong new business winds of 5% globally, enabling Quaker Houghton to outperform its underlying end markets. Our earnings growth reflects the increase in organic sales, contribution from acquisitions, especially DIPSOL, and a sequential expansion in operating margins as we better leverage our scale. The organization is balancing both operational discipline and strategic execution while advancing our key objectives. This is resulting in an acceleration of new business wins at appropriate levels of profitability across the portfolio. These actions are building on our solid foundation and give us confidence in our ability to drive sustainable long-term performance. Cash generation and capital discipline also remain strong. In the third quarter, we generated $51 million of operating cash flow and made progress on our capital allocation strategy including reducing our net leverage to 2.4 times and returning cash to shareholders through share repurchases and dividends. Our business continues to perform well, and we remain focused on what we can control while navigating the dynamic and uncertain environment. I am proud of the team's performance in 2025, as well as the organization's renewed focus in delivering meaningful productivity and results for our customers through innovation, technical expertise, and service. Third quarter results were in line with our expectations despite markets being softer than anticipated. Uncertainty around tariffs continued to weigh on customer operating plans. We estimate end market activity declined a low single digit percentage compared to the prior year. And on a year to date basis, production levels across our major end markets, including steel, automotive, internal combustion engines and industrial products are down a low single digit percentage globally compared to 2024. Relative to our markets, we are outperforming. In the third quarter, we delivered a 7% year over year increase in sales on a 3% increase in organic sales volumes. This was most notable in Asia Pacific, which delivered another 8% increase in organic sales volumes. Net share gains were also strong at 5% globally, as the team is successfully executing our commercial strategy, capitalizing on the pipeline of cross-selling opportunities, reducing churn, and solving complex customer needs. These wins and the evolution of the pipeline should provide continued benefit to the organization as we wrap into 2026. Our organic growth was complemented by a contribution from acquisitions, namely Dipsol, which we closed in the second quarter. We are pleased with the ongoing integration of Dipsol. The business is performing in line with our expectations, and we are excited by the commercial opportunities it provides to the combined organization. Gross profit dollars increased compared to both the prior year and prior quarter. Importantly, gross margins improved from the second quarter and are within our targeted range, which promotes growth at solid levels of profitability. We generated $83 million of adjusted EBITDA, an increase of approximately 5% year-over-year and 10% sequentially. This reflects the top-line growth and operational improvements, including ongoing cost controls. Adjusted EBITDA margins of 16.8% continue to improve towards our targeted range. When I stepped into the role a year ago, I set out three key priorities underpinned by several initiatives aimed at strengthening the core of our organization. Our strategy is working and these actions are yielding results as demonstrated in the resilience of our earnings profile. From a commercial standpoint, we have doubled down on our commitment to serving the customer. We have taken a focused strategic approach to customer segmentation and are advancing key initiatives to improve service levels and optimize our portfolio, scaling the organization to have the capabilities to deliver the right solutions and services to meet and exceed our customers' needs. We have also increased our discipline in pursuing new business opportunities, leveraging innovation. For instance, in aluminum, where we recently introduced new products, cross-selling our leading portfolio, and being more intentional with pricing. Our teams are working diligently to reduce churn, which I am pleased has trended back to historic low single digit levels and winning back previously lost business. These efforts are paying off with positive year-to-date organic volume growth and new business wins, which are at the high end of our targeted range. To give some context to these actions, we are leveraging our global scale footprint, and R&D capabilities. We have localized or transferred production of select products, for instance, in forging and specialty greases. This flexible sourcing provides greater consistency, speed, and cost efficiency, enhancing our competitiveness. When aggregated, these smaller wins add up and are meaningful contributors to the strong organic volume growth that we have delivered for the past nine consecutive quarters in Asia Pacific. We believe we are well positioned to continue to capitalize on the growth in China, India, and Southeast Asia, and will further benefit as our new China facility comes online in 2026. Our new R&D lab in Brazil expands our global innovation network, strengthens technical capabilities for local customers, and supports the growth of advanced solutions in the region. These enhancements highlight some of the swift, targeted actions we're taking to accelerate growth and provide the full portfolio in all regions. Our team is hyper-focused on growing our portfolio of advanced solutions. In the third quarter, we delivered our fourth consecutive quarter of high single digit or low double digit organic volume growth in the product segment, with a strong contribution across all regions. We have significant opportunities ahead to continue to align the business towards these attractive areas of the portfolio, especially as we leverage our increased scale with DIFSOL. We have also maintained a clear emphasis on controlling what we can control. From a cost perspective, on a year-to-date basis, organic SG&A is down approximately 3% as we make progress on our cost and efficiency actions announced earlier this year. We began to put in motion further network optimization actions aimed at unlocking the leverage in our model. We have closed one manufacturing facility year to date in the Americas, and we consider further actions that our manufacturing footprint will be needed to improve our asset utilization, reduce manufacturing costs while maintaining the quality and service levels customers expect from us. These actions support our ability to deliver adjusted EBITDA margins and the high teens as a percent of sales over time. We will continue to benefit from the ongoing cost actions in the fourth quarter in 2026. And lastly, we are fully committed to executing on our disciplined capital allocation strategy. In the quarter, our outstanding debt balance was reduced by $62 million, and our net leverage ratio is below our targeted range of 2.5 times. Year to date, we have returned approximately $62 million to shareholders through dividends and share repurchases, while maintaining our balance sheet flexibility to execute on strategic acquisitions. The team is energized. We are executing on our strategy to deliver growth, reduce complexity, and efficiently deploy capital to unlock our potential. Turning to Outlook. Macroeconomic trends have remained soft through 2025, and we expect them to remain so at least through Q4. We also expect a return to normal seasonal trends in the fourth quarter, and there is lingering uncertainty that continues to weigh on customer operating rates from tariffs and global trade. We anticipate continued momentum driven by share gains and our ongoing cost actions will help mitigate these impacts. Based on our current visibility in the fourth quarter, we expected to deliver another quarter of revenue and adjusted EBITDA growth on a year-over-year basis and should generate solid cash flow. We have conviction in our strategy and are balancing the near-term and long-term needs of the organization. We have delivered strong results year-to-date despite a softer macro backdrop, and current data suggests markets could begin to stabilize in 2026. Irrespective, the share gains and cost actions we are delivering give me confidence that we are well positioned to return to growth in 2026 and beyond. With that, I'd like to pass it to Tom to discuss the financials in more detail.