Press Releases
Quaker Chemical Announces Fourth Quarter and Full Year Results
CONSHOHOCKEN, Pa.,
Mr. Barry continued, "We expect our overall demand for products to be lower in 2009 as a result of the global recession with gradual improvement in our volumes as the year progresses. Fortunately, we entered this significant downturn at the end of the third quarter with a strong balance sheet position as our net debt level was at the lowest point since 2005. While 2009 will be a challenging year for Quaker and our customers, we remain confident that our business model, strong associate base, key growth initiatives and solid balance sheet will get us through this difficult period in a profitable manner and position us well for the future."
Fourth Quarter Summary
Net sales for the fourth quarter were
Gross margins were down approximately
Selling, general and administrative expenses ("SG&A") decreased
In response to the significant volume declines, Quaker implemented a
restructuring program in the fourth quarter of 2008, which eliminated more
than 80 positions and included provisions for severance for 57 employees
totaling
The decrease in other income was primarily the result of foreign exchange losses recorded in the fourth quarter of 2008, compared to gains in the same period of the prior year. The higher net interest expense was due to higher average borrowings and lower interest income.
Full Year Summary
Net sales for 2008 were
Gross margins were down approximately
SG&A for 2008 decreased
Effective
In 2007, the Company recorded environmental charges of
The decrease in other income was primarily the result of foreign exchange
losses recorded in 2008, compared to gains in the prior year. Other income
for 2008 also includes a net arbitration award of approximately
The Company's effective tax rate was 29.9% for 2008, compared to 29.3% in
the prior year. The 2008 effective tax rate was affected by a changing mix of
income among jurisdictions, as well as the derecognition of several uncertain
tax positions due to the expiration of applicable statutes of limitations for
certain tax years. The effective tax rate for 2007 includes an out of period
non-cash tax benefit adjustment of
Balance Sheet and Cash Flow Items
The Company's net debt-to-total-capital ratio remained strong at 32% at
both
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. A major risk is that the
Company's demand is largely derived from the demand for its customers'
products, which subjects the Company to downturns in a customer's business and
unanticipated customer production shutdowns. Other major risks and
uncertainties include, but are not limited to, significant increases in raw
material costs, customer financial stability, worldwide economic and political
conditions, foreign currency fluctuations, and future terrorist attacks such
as those that occurred on
As previously announced,
Quaker Chemical Corporation
Condensed Consolidated Statement of Operations
(Dollars in thousands, except per share data and share amounts)
(Unaudited)
Three Months Ended Twelve Months Ended
December 31, December 31,
2008 2007 2008 2007
Net sales $116,229 $142,393 $581,641 $545,597
Cost of goods sold 88,114 98,783 418,580 377,661
Gross margin 28,115 43,610 163,061 167,936
% 24.2% 30.6% 28.0% 30.8%
Selling, general and
administrative expenses 26,762 35,499 136,697 139,429
Restructuring and related
charges 2,916 - 2,916 -
CEO transition costs - - 3,505 -
Environmental charges - - - 3,300
Operating (loss) income (1,563) 8,111 19,943 25,207
% -1.3% 5.7% 3.4% 4.6%
Other income, net (657) 960 1,095 2,578
Interest expense, net (1,204) (829) (4,409) (5,050)
(Loss) income before taxes (3,424) 8,242 16,629 22,735
Taxes on income (871) 3,592 4,977 6,668
(2,553) 4,650 11,652 16,067
Equity in net (loss)
income of associated
companies (102) 226 388 783
Minority interest in net
income of subsidiaries (67) (253) (908) (1,379)
Net (loss) income $(2,722) $4,623 $11,132 $15,471
% -2.3% 3.2% 1.9% 2.8%
Per share data:
Net (loss) income -
basic $(0.25) $0.46 $1.07 $1.55
Net (loss) income -
diluted $(0.25) $0.46 $1.05 $1.53
Shares Outstanding:
Basic 10,729,049 10,035,630 10,419,654 9,986,347
Diluted 10,729,049 10,154,388 10,553,325 10,106,918
Quaker Chemical Corporation
Condensed Consolidated Balance Sheet
(Dollars in thousands, except par value and share amounts)
(Unaudited)
December 31, December 31,
2008 2007
ASSETS
Current assets
Cash and cash equivalents $20,892 $20,195
Construction fund (restricted cash) 8,281 -
Accounts receivable, net 98,702 118,135
Inventories, net 57,419 60,738
Deferred income taxes 4,948 4,042
Prepaid expenses and other current assets 10,584 10,391
Total current assets 200,826 213,501
Property, plant and equipment, net 60,945 62,287
Goodwill 40,997 43,789
Other intangible assets, net 6,417 7,873
Investments in associated companies 7,987 7,323
Deferred income taxes 34,179 30,257
Other assets 34,088 34,019
Total assets $385,439 $399,049
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Short-term borrowings and current
portion of long-term debt $4,631 $4,288
Accounts payable 48,849 65,202
Dividends payable 2,492 2,178
Accrued compensation 7,741 17,287
Accrued pension and
postretirement benefits 7,380 1,726
Other current liabilities 12,771 15,670
Total current liabilities 83,864 106,351
Long-term debt 84,236 78,487
Deferred income taxes 7,156 7,583
Accrued pension and
postretirement benefits 37,638 30,699
Other non-current liabilities 42,670 41,023
Total liabilities 255,564 264,143
Minority interest in equity of
subsidiaries 3,952 4,513
Shareholders' equity
Common stock, $1 par value;
authorized 30,000,000
shares; issued 2008 -
10,833,325 shares 10,833 10,147
Capital in excess of par value 25,238 10,104
Retained earnings 117,089 115,767
Accumulated other comprehensive loss (27,237) (5,625)
Total shareholders' equity 125,923 130,393
Total liabilities and
shareholders' equity $385,439 $399,049
Quaker Chemical Corporation
Condensed Consolidated Statement of Cash Flows
For the twelve months ended December 31,
(Dollars in thousands)
(Unaudited)
2008 2007
Cash flows from operating activities
Net income $11,132 $15,471
Adjustments to reconcile net income
to net cash provided by operating activities:
Depreciation 10,879 11,686
Amortization 1,177 1,197
Equity in net income of associated
companies, net of dividends (275) (219)
Minority interest in earnings of
subsidiaries 908 1,379
Deferred income tax 1,014 (354)
Uncertain tax positions (non-
deferred portion) 211 1,577
Deferred compensation and other, net 819 (85)
Stock-based compensation 3,901 1,550
Restructuring and related charges 2,916 -
Environmental charges - 3,300
(Gain) loss on disposal of
property, plant and equipment (10) (40)
Insurance settlement realized (1,556) (1,854)
Pension and other postretirement benefits (3,527) (3,596)
Increase (decrease) in cash from
changes in current assets and
current liabilities, net of acquisitions:
Accounts receivable 15,582 (4,093)
Inventories (73) (5,182)
Prepaid expenses and other current assets (181) 122
Accounts payable and accrued liabilities (27,892) 7,612
Change in restructuring liabilities (749) -
Estimated taxes on income (885) (970)
Net cash provided by operating
activities 13,391 27,501
Cash flows from investing activities
Capital expenditures (11,742) (9,165)
Payments related to acquisitions (1,859) (2,373)
Proceeds from disposition of assets 177 259
Insurance settlement received and
interest earned 5,306 5,705
Change in restricted cash, net (12,031) (3,851)
Net cash used in investing activities (20,149) (9,425)
Cash flows from financing activities
Proceeds from short-term debt - 2,250
Net increase (decrease) in short-term
borrowings 743 (3,198)
Proceeds from long-term debt 10,000 -
Repayments of long-term debt (3,401) (8,345)
Dividends paid (9,503) (8,654)
Stock options exercised, other 11,919 3,309
Distributions to minority shareholders (404) (1,265)
Net cash provided by (used in)
financing activities 9,354 (15,903)
Effect of exchange rate changes on cash (1,899) 1,960
Net increase in cash and cash equivalents 697 4,133
Cash and cash equivalents at the
beginning of the period 20,195 16,062
Cash and cash equivalents at the
end of the period $20,892 $20,195
SOURCEQuaker Chemical Corporation -0-02/25/2009 /CONTACT:Mark A. Featherstone , Vice President and Chief Financial Officer, +1-610-832-4160/ /Web Site: http://www.quakerchem.com / (KWR) CO:Quaker Chemical Corporation ST:Pennsylvania IN: CHM FIN SU: ERN CCA PR -- PH75671 -- 947102/25/2009 19:23 EST http://www.prnewswire.com
