Press Releases
Quaker Chemical Announces Fourth Quarter And Full Year 2012 Results
- Record full year 2012 revenue and net income despite challenging environment
- Full year 2012 record cash flow generation enhances strong balance sheet
- 41% shareholder return in the full year 2012
Full year net sales and earnings per diluted share were
Michael F. Barry, Chairman, Chief Executive Officer and President, commented, "We are pleased to report solid results in the fourth quarter despite weak market conditions in
Mr. Barry continued, "2012 was a record year for Quaker in terms of revenue, net income, and net operating cash flow despite a challenging global environment. Also, our shareholder value creation was 41% as we continued with both dividend and share price appreciation. At the close of the year, our balance sheet remains very strong, as our cash position exceeds our debt, which provides us the financial flexibility to pursue acquisitions as appropriate."
Mr. Barry also noted, "Going into 2013, we will continue to face challenging economic environments in various parts of the world, especially Europe. In addition, we are likely to see higher raw material costs from current levels due to increasing crude oil pricing. However, we also expect a continued recovery in
Key items to note related to the fourth quarter of 2012 are as follows. The fourth quarters of 2012 and 2011 include equity income in associated companies of
Key items to note related to the full year 2012 are as follows. The full years of 2012 and 2011 include equity income from the Company's investment in the captive insurance company, noted above, of
Net sales for the fourth quarter of 2012 were
Gross profit increased approximately
Selling, general and administrative expenses ("SG&A") increased approximately
The decrease in interest expense was primarily due to lower average borrowings and lower interest rates in the fourth quarter of 2012 as compared to the fourth quarter of 2011.
The increase in other income in the fourth quarter of 2012 was primarily due to higher other income related to the change in fair value of a contingent consideration liability of
The increase in equity in net income of associated companies was caused by improved performance over the majority of the Company's equity affiliates in the fourth quarter of 2012 as compared to the fourth quarter of 2011, in particular in our Japanese affiliate, partially offset by lower income from the Company's equity investment in its captive insurance company.
Changes in foreign exchange rates negatively impacted the fourth quarter of 2012 net income by approximately
Full Year Summary
Net sales for 2012 were
Gross profit increased by approximately
SG&A increased by approximately
The decrease in interest expense was primarily due to lower average borrowings and lower interest rates in 2012 as compared to 2011, and the decrease in interest income from 2011 to 2012 was primarily caused by lower cash levels invested in higher interest rate jurisdictions.
Other income for 2012 included increases due to changes in the fair value of the contingent consideration liability of
The Company's 2012 and 2011 effective tax rates of 24.7% and 24.0%, respectively, reflect decreases in reserves for uncertain tax positions due to the expiration of applicable statutes of limitations for certain tax years of approximately
The decrease in equity in net income of associated companies was primarily caused by lower income from the Company's equity investment in its captive insurance company, partially offset by improved performance over the majority of the Company's other equity affiliates in 2012 as compared to 2011, in particular in our Japanese affiliate.
Earnings per diluted share for 2012 of
Balance Sheet and Cash Flow Items
The Company's 2012 record level of operating cash flow of
Change in Accounting Method
During 2012, the Company's ownership percentage in
Forward-Looking Statements
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, future terrorist attacks and other acts of violence. Other factors could also adversely affect us. Therefore, we caution you not to place undue reliance on our forward-looking statements. This discussion is provided as permitted by the Private Securities Litigation Reform Act of 1995.
Conference Call
As previously announced,
About Quaker
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Quaker Chemical Corporation | ||||||||
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Condensed Consolidated Statement of Income | ||||||||
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(Dollars in thousands, except per share data) | ||||||||
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(Unaudited) | ||||||||
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Three Months Ended December 31, |
Twelve Months Ended December 31, | |||||||
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2012 |
2011 |
2012 |
2011 | |||||
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(re-cast) |
(re-cast) | |||||||
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Net sales |
$ 172,868 |
$ 173,261 |
$ 708,226 |
$ 683,231 | ||||
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Cost of goods sold |
113,714 |
116,597 |
469,515 |
460,581 | ||||
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Gross profit |
59,154 |
56,664 |
238,711 |
222,650 | ||||
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% |
34.2% |
32.7% |
33.7% |
32.6% | ||||
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Selling, general and administrative expenses |
45,478 |
45,297 |
175,487 |
164,738 | ||||
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Operating income |
13,676 |
11,367 |
63,224 |
57,912 | ||||
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% |
7.9% |
6.6% |
8.9% |
8.5% | ||||
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Other income, net |
2,886 |
980 |
3,415 |
5,050 | ||||
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Interest expense |
(924) |
(1,082) |
(4,283) |
(4,666) | ||||
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Interest income |
183 |
276 |
592 |
1,081 | ||||
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Income before taxes and equity in net income of associated companies |
15,821 |
11,541 |
62,948 |
59,377 | ||||
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Taxes on income before equity in net income of associated companies |
2,883 |
1,295 |
15,575 |
14,256 | ||||
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12,938 |
10,246 |
47,373 |
45,121 | |||||
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Equity in net income of associated companies |
829 |
664 |
2,867 |
3,102 | ||||
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Net income |
13,767 |
10,910 |
50,240 |
48,223 | ||||
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Less: Net income attributable to noncontrolling interest |
760 |
540 |
2,835 |
2,331 | ||||
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Net income attributable to Quaker Chemical Corporation |
$ 13,007 |
$ 10,370 |
$ 47,405 |
$ 45,892 | ||||
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% |
7.5% |
6.0% |
6.7% |
6.7% | ||||
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Per share data: |
||||||||
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Net income attributable to Quaker Chemical Corporation Common Shareholders - basic |
$ 0.99 |
$ 0.80 |
$ 3.64 |
$ 3.71 | ||||
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Net income attributable to Quaker Chemical Corporation Common Shareholders - diluted |
$ 0.99 |
$ 0.80 |
$ 3.63 |
$ 3.66 | ||||
Quaker Chemical Corporation Condensed Consolidated Balance Sheet (Dollars in thousands, except par value and share amounts) (Unaudited) December 31, December 31, 2012 2011 ASSETS (re-cast) Current assets Cash and cash equivalents $ 32,547 $ 16,909 Accounts receivable, net 154,197 150,676 Inventories, net 72,471 74,758 Current deferred tax assets 6,401 6,338 Prepaid expenses and other current assets 12,194 10,868 Total current assets 277,810 259,549 Property, plant and equipment, net 85,112 82,916 Goodwill 59,169 58,152 Other intangible assets, net 32,809 31,783 Investments in associated companies 16,603 14,073 Deferred income taxes 30,673 29,823 Other assets 34,458 34,856 Total assets $ 536,634 $ 511,152 LIABILITIES AND EQUITY Current liabilities Short-term borrowings and current portion of long-term debt $ 1,468 $ 636 Accounts payable 67,586 65,026 Dividends payable 3,208 3,099 Accrued compensation 16,842 16,987 Accrued pension and postretirement benefits 2,188 2,038 Current deferred tax liabilities 253 238 Other current liabilities 16,247 18,625 Total current liabilities 107,792 106,649 Long-term debt 30,000 46,701 Deferred income taxes 6,383 7,094 Accrued pension and postretirement benefits 49,916 34,533 Other non-current liabilities 52,867 54,818 Total liabilities 246,958 249,795 Equity Common stock, $1 par value; authorized 30,000,000 shares; issued 2012 - 13,094,901 shares 13,095 12,912 Capital in excess of par value 94,470 89,725 Retained earnings 215,390 180,710 Accumulated other comprehensive loss (41,855) (28,967) Total Quaker shareholders' equity 281,100 254,380 Noncontrolling interest 8,576 6,977 Total shareholders' equity 289,676 261,357 Total liabilities and equity $ 536,634 $ 511,152
Quaker Chemical Corporation Condensed Consolidated Statement of Cash Flows For the twelve months ended December 31, (Dollars in thousands) (Unaudited) 2012 2011 (re-cast) Cash flows from operating activities Net income $ 50,240 $ 48,223 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 12,252 11,455 Amortization 3,106 2,338 Equity in undistributed earnings of associated companies, net of dividends (2,350) (2,365) Deferred income taxes 2,354 2,431 Uncertain tax positions (non-deferred portion) (1,407) 3,673 Acquisition related fair value adjustments (1,909) (2,624) Deferred compensation and other, net (156) 566 Stock-based compensation 3,807 3,513 Gain on disposal of property, plant and equipment (108) (86) Insurance settlement realized (1,391) (1,840) Pension and other postretirement benefits (1,427) (4,239) Increase (decrease) in cash from changes in current assets and current liabilities, net of acquisitions: Accounts receivable 779 (31,558) Inventories 3,228 (9,281) Prepaid expenses and other current assets 504 (2,505) Accounts payable and accrued liabilities (2,562) 4,442 Estimated taxes on income (2,067) (2,477) Net cash provided by operating activities 62,893 19,666 Cash flows from investing activities Investments in property, plant and equipment (12,735) (12,117) Payments related to acquisitions, net of cash acquired (5,635) (25,477) Proceeds from disposition of assets 245 393 Insurance settlement received and interest earned 69 80 Change in restricted cash, net 1,322 1,760 Net cash used in investing activities (16,734) (35,361) Cash flows from financing activities Net decrease in short-term borrowings (315) (254) Repayments of long-term debt (17,632) (27,364) Dividends paid (12,616) (11,586) Stock options exercised, other (924) 1,105 Excess tax benefit related to stock option exercises 2,045 109 Proceeds from sale of common stock, net of related expenses - 48,143 Distributions to noncontrolling shareholders (1,099) (1,000) Net cash (used in) provided by financing activities (30,541) 9,153 Effect of exchange rate changes on cash 20 (2,315) Net increase (decrease) in cash and cash equivalents 15,638 (8,857) Cash and cash equivalents at the beginning of the period 16,909 25,766 Cash and cash equivalents at the end of the period $ 32,547 $ 16,909
SOURCE
Margaret M. Loebl, Vice President, Chief Financial Officer & Treasurer, +1- 610-832-4160, loeblm@quakerchem.com
