Quaker Chemical Announces Record Quarterly Sales and Increased Earnings
CONSHOHOCKEN, Pa., Oct 30, 2002 /PRNewswire-FirstCall via COMTEX/ -- Quaker Chemical Corporation (NYSE: KWR) today announced that net sales for the third quarter of 2002, ended September 30, 2002, were a record high $72.7 million versus $63.5 million for the third quarter of 2001, an increase of over 14%. Earnings for the quarter were $4.3 million or $0.45 per diluted share, which represents a 29% improvement over earnings for the second quarter of 2002 of $0.35 per diluted share. Reported earnings in the third quarter of 2001 of $0.12 per diluted share were negatively impacted by special charges of $3.7 million or $0.28 per diluted share, consisting of restructuring and nonrecurring expenses as well as an additional reserve for doubtful accounts. Excluding these 2001 special charges, earnings for the third quarter of 2002 were 12% higher than the third quarter of 2001.
Sales for the quarter were aided by the Company's acquisition earlier this year of United Lubricants, Epmar, and a controlling interest in its South Africa joint venture. Excluding the impact of these acquisitions, net sales would have been $66.1 million or 4% above the prior year. SG&A expenses in the third quarter increased primarily due to the noted acquisitions, as well as higher pension, insurance, and other administrative costs.
Earnings for the first nine months of 2002 were $9.9 million or $1.05 per diluted share. During the first nine months of 2001, earnings were $9.2 million or $1.02 per diluted share and $1.30 per diluted share excluding the special charges. Net sales for the first nine months of 2002 were $202.1 million versus $192.8 million for the same period a year ago. Excluding revenue from the acquisitions made in 2002, net sales for the first nine months would have been $188.8 million.
Ronald J. Naples, Chairman and Chief Executive Officer, stated, "We continue to perform as expected in 2002 by showing sequential quarterly progress. Through this third quarter, our business activity level has grown each quarter with improvement in all regions except South America. In addition, our recent acquisitions continue to perform well and have been slightly accretive to the bottom line."
Mr. Naples continued, "As we enter the fourth quarter, we do see some challenges in our operating environment. Raw material prices are starting to rise, and the global economic, and in some cases, political, environment causes demand uncertainty looking forward. Certain industry segments (e.g., aerospace) and regions (e.g., South America) are surely under some pressure. However, we have made progress with our penetration into our core steel and metalworking markets, and we continue to expect market share increases from these segments. We are convinced that our key strategic imperatives of selling value rather than simply fluids, operating as a globally-integrated enterprise, and harnessing our global knowledge will continue to increase our differentiation from our competitors. Although there is less visibility ahead than we would like, we expect fourth quarter earnings to be similar to the third quarter. This provides the prospect of a slight increase in full year earnings over the 2001 operating earnings level of $1.49 per diluted share (excluding special charges)."
Quaker Chemical Corporation, headquartered in Conshohocken, Pennsylvania, is a worldwide developer, producer, and marketer of custom-formulated chemical specialty products and a provider of chemical management services for manufacturers around the globe, primarily in the steel and automotive industries.
This release contains forward-looking statements that are subject to certain risks and uncertainties that could cause actual results to differ materially from those projected in such statements. Such risks and uncertainties include, but are not limited to, further downturns in our customers' businesses, significant increases in raw material costs, worldwide economic and political conditions, foreign currency fluctuations, and future terrorist attacks such as those that occurred on September 11, 2001.
As previously announced, Quaker Chemical's investor conference to discuss third quarter earnings results is scheduled for October 31, 2002, at 2:30 p.m. (ET). Access the conference by calling 800-922-0755 or visit Quaker's Web site at www.quakerchem.com for a live webcast.
Quaker Chemical Corporation Condensed Consolidated Statement of Income For the period ended September 30, Unaudited Dollars in thousands except per share data Third Quarter Nine Months 2002 2001 2002 2001 Net Sales $72,693 $63,514 $202,077 $192,802 Cost of goods sold 43,294 38,371 119,359 114,752 Gross Margin 29,399 25,143 82,718 78,050 % 40.4% 39.6% 40.9% 40.5% Selling, general and administrative expenses 22,697 19,065 66,000 58,914 Restructuring and nonrecurring expenses - 3,225 - 3,225 Operating Income 6,702 2,853 16,718 15,911 % 9.2% 4.5% 8.3% 8.3% Other income (expense), net 942 (469) 1,194 690 Interest expense, net (469) (205) (747) (719) Income before taxes 7,175 2,179 17,165 15,882 Taxes on income 2,296 675 5,493 4,923 4,879 1,504 11,672 10,959 Equity in net income of associated companies 130 244 314 740 Minority interest in net income of subsidiaries (720) (632) (2,103) (2,456) Net income $4,289 $1,116 $9,883 $9,243 % 5.9% 1.8% 4.9% 4.8% Per Share Data: Net income - basic $0.47 $0.12 $1.08 $1.02 Net income - diluted $0.45 $0.12 $1.05 $1.02 Shares Outstanding: Basic 9,222,050 9,115,591 9,149,337 9,028,096 Diluted 9,453,208 9,174,754 9,433,279 9,088,547 Other Information: Depreciation and Amortization $1,495 $1,534 A $4,147 $4,640 A: Upon adopting SFAS No. 142, "Goodwill and Other Intangible Assets," effective January 1, 2002, the Company no longer amortizes goodwill. The Company recorded goodwill amortization of $243 or $0.02 per diluted share and $760 or $0.06 per diluted share for the three and nine months ended September 30, 2001, respectively.SOURCE Quaker Chemical Corporation
CONTACT: Michael F. Barry, Vice President and Chief Financial Officer of Quaker Chemical, +1-610-832-8500