The following is excerpted from the question-and-answer section of the transcript.
(Questions from industry analysts are provided in full, but answers are omitted - download the transcript to see the full question-and-answer session)
Question: Marisa Liliam Hernandez - Sidoti & Company, LLC - Analyst
: Congratulations on the results in a challenging environment. So I have a couple of questions to follow-up on the raw material cost inflation here.
So the cost pressure that you're seeing, is that across all of your raw materials in a similar way? Or are there differences?
Question: Marisa Liliam Hernandez - Sidoti & Company, LLC - Analyst
: Understood. And have you seen any signs of a slowdown anywhere just yet, whether it's a specific input or specific geography?
Question: Marisa Liliam Hernandez - Sidoti & Company, LLC - Analyst
: Yes. So you mentioned that you were expecting the pace to slowdown in the fourth quarter. So wondering if you already started to see that
somewhere?
Question: Marisa Liliam Hernandez - Sidoti & Company, LLC - Analyst
: So basically, in October, the pace of our raw material price increases on average was lower than what you saw in the third quarter?
Question: Marisa Liliam Hernandez - Sidoti & Company, LLC - Analyst
: Okay. So I suppose that is what gives you confidence that the pressure will be lower in the fourth quarter?
Question: Marisa Liliam Hernandez - Sidoti & Company, LLC - Analyst
: Okay.
Andrew Tometich
Yes. Marisa, if I could add -- thank you for the question. I think it's not unique to Quaker Houghton. And I think what I would like to emphasize is
regardless of what's happening with that, we're going to react to that. I think that's what this company has been doing, and that's what we're going
to continue to do going forward.
Question: Marisa Liliam Hernandez - Sidoti & Company, LLC - Analyst
: That's helpful. And finally, more on the strategic side, to follow-up on an earlier question about you potentially starting to look at larger deals after
you reach your 2.5x net debt-to-EBITDA target ratio. Does the current environment on the raw materials side potentially influence what you're
looking to do, what your strategic priorities might be in terms of type of businesses. How do you incorporate what's going on in 2021 and with
raw material cost inflation into your thinking about M&A?
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