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.

                  

CONTACT: Michael F. Barry, Vice President and Chief Financial Officer of Quaker Chemical, +1-610-832-8500

URL: http://www.quakerchem.com
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