UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
April 29, 2013
Date of Report (Date of earliest event reported)
QUAKER CHEMICAL CORPORATION
(Exact name of Registrant as specified in its charter)
Commission File Number 001-12019
| PENNSYLVANIA | No. 23-0993790 | |
| (State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
One Quaker Park
901 E. Hector Street
Conshohocken, Pennsylvania 19428
(Address of principal executive offices)
(Zip Code)
(610) 832-4000
(Registrant’s telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
£ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
£ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
£ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
£ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
INFORMATION TO BE INCLUDED IN THE REPORT
| Item 2.02. | Results of Operations and Financial Condition. |
On April 29, 2013, Quaker Chemical Corporation announced its results of operations for the first quarter ended March 31, 2013, in a press release, the text of which is included as Exhibit 99.1 hereto. Supplemental information related to the same period is also included as Exhibit 99.2 hereto.
| Item 9.01. | Financial Statements and Exhibits. |
The following exhibits are included as part of this report:
| Exhibit No. | ||
| 99.1 | Press Release of Quaker Chemical Corporation dated April 29, 2013. | |
| 99.2 | Supplemental Information related to first quarter ended March 31, 2013. |
| -2- |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| QUAKER CHEMICAL CORPORATION | |||
| Registrant | |||
| Date: April 29, 2013 | By: | /s/ Margaret m. loebl | |
| Margaret M. Loebl | |||
| Vice President, Chief Financial | |||
| Officer and Treasurer | |||
| -3- |
| NEWS |  |
| Contact: | |
| Margaret M. Loebl | |
| Vice President, Chief Financial Officer & Treasurer | |
| loeblm@quakerchem.com | |
| T. 610.832.4160 |
| For Release: Immediate |
QUAKER CHEMICAL ANNOUNCES FIRST QUARTER 2013 RESULTS
· Solid net sales and operating income despite challenging environment
· Gross margin improvement
· Net operating cash flow of $11.3 million enhances strong balance sheet
April 29, 2013
CONSHOHOCKEN, PA – Quaker Chemical Corporation (NYSE: KWR) today announced net sales and earnings per diluted share of $176.2 million and $1.04 for the first quarter of 2013, respectively, compared to first quarter of 2012 net sales and earnings per diluted share of $177.6 million and $0.95, respectively. Net income for the first quarter of 2013 was $13.6 million compared to net income of $12.4 million for the first quarter of 2012. Non-GAAP earnings per diluted share were $0.96 for the first quarter of 2013 compared to $0.91 for the first quarter of 2012. See Non-GAAP Measures section below.
Michael F. Barry, Chairman, Chief Executive Officer and President, commented, “We are pleased to report solid results in the first quarter given the challenging global economic environment. We generated good cash flow and our gross margins are continuing to return to more acceptable levels. Our market share gains and acquisitions have helped us to have relatively stable volumes and revenues despite weak conditions in numerous parts of the world, especially in Europe.
Mr. Barry concluded, “Going forward, we believe we will continue to face challenging market conditions around the world with Europe continuing to be the most pronounced. We do, however, remain optimistic about our future and expect 2013 to be another good year for Quaker.”
First Quarter of 2013 Summary
Net sales for the first quarter of 2013 were $176.2 million, a decrease of less than 1% from $177.6 million in the first quarter of 2012. Foreign exchange rate translation decreased revenues by approximately $2.2 million, or 1%, which was partially offset by a slight increase due to selling and price mix of less than 1%. Product volumes, including acquisitions, were consistent in the first quarter of 2013 compared to the first quarter of 2012.
Gross profit increased approximately $2.8 million, or approximately 5%, from the first quarter of 2012. The increase in gross profit on consistent sales was due to an improvement in gross margin to 35.5% compared to 33.7% for the first quarter of 2012 and 34.2% for the fourth quarter of 2012. The increase in gross margin is reflective of the Company’s continuing initiative to restore its margins to more acceptable levels.
Quaker Chemical Corporation
One Quaker Park, 901 E. Hector Street, Conshohocken, PA 19428-2380 USA
P: 610.832.4000 F: 610.832.8682
quakerchem.com
Selling, general and administrative expenses (“SG&A”) increased approximately $2.1 million compared to the first quarter of 2012, primarily related to increases due to acquisitions, higher incentive compensation and higher selling, inflationary and other labor related costs which were partially offset by a decrease in foreign exchange rate translation.
The decrease in interest expense was due to lower average borrowings and lower interest rates experienced in the first quarter of 2013 as compared to the first quarter of 2012.
The Company’s effective tax rates for the first quarters of 2013 and 2012 of 24.1% and 21.5%, respectively, reflect decreases in reserves for uncertain tax positions due to the expiration of applicable statutes of limitations for certain tax years of approximately $0.10 and $0.12 per diluted share, respectively. Also, contributing to the difference in the effective tax rate is that the tax rate in China was 15% in 2012 compared to 25% in the first quarter of 2013. While the Company's re-certification of its Chinese subsidiary as a high tech enterprise is pending, the Company will record tax expense at the statutory rate of 25%. The Company has experienced and expects to further experience volatility in its effective tax rates due to the varying timing of tax audits and the expiration of applicable statutes of limitations as they relate to uncertain tax positions, among other factors. The Company estimates that its full year 2013 effective tax rate will be in the high twenty percent range, as compared to the lower rate experienced in the first quarter of 2013.
The increase in equity in net income of associated companies was primarily due to higher earnings related to the Company’s equity interest in a captive insurance company in the first quarter of 2013 compared to the first quarter of 2012 of $0.11 and $0.04 per diluted share, respectively. The Company’s first quarter of 2013 equity in net income of associated companies includes a non-cash out of period adjustment of approximately $1.0 million, which primarily related to a reinsurance contract held by the Company’s captive insurance equity affiliate. This increase was partially offset by a charge of approximately $0.03 per diluted share related to the devaluation of the Venezuelan Bolivar Fuerte during the first quarter of 2013.
Changes in foreign exchange rates negatively impacted the first quarter of 2013 net income by approximately $0.1 million or $0.01 per diluted share.
Balance Sheet and Cash Flow Items
Net operating cash flow increased to $11.3 million for the first quarter of 2013 compared to $6.7 million in the first quarter of 2012, which was primarily driven by improved working capital management and the Company’s first dividend distribution from its captive insurance equity affiliate of $2.0 million. The Company’s liquidity continues to be strong, as its cash position exceeded its debt as of March 31, 2013 and its consolidated leverage ratio was less than one times EBITDA.
Non-GAAP Measures
Included in this public release is a non-GAAP financial measure of non-GAAP earnings per diluted share. The Company believes this non-GAAP financial measure provides meaningful supplemental information as it enhances a reader’s understanding of the financial performance of the Company, is more indicative of future operating performance of the Company, and facilitates a better comparison among fiscal periods, as the non-GAAP measure excludes items that are not considered core to the Company’s operations. Non-GAAP results are presented for supplemental informational purposes only and should not be considered a substitute for the financial information presented in accordance with GAAP.
| -more- |
The following is a reconciliation between the non-GAAP (unaudited) financial measure of non-GAAP earnings per diluted share to its most directly comparable GAAP (unaudited) measure:
| Three Months Ended March 31, | ||||||||
| 2013 | 2012 | |||||||
| GAAP earnings per diluted share attributable to Quaker Chemical Corporation Common Shareholders | $ | 1.04 | $ | 0.95 | ||||
| Devaluation of the Venezuelan Bolivar per diluted share | 0.03 | — | ||||||
| Equity income in a captive insurance company per diluted share | (0.11 | ) | (0.04 | ) | ||||
| Non-GAAP earnings per diluted share attributable to Quaker Chemical Corporation Common Shareholders | $ | 0.96 | $ | 0.91 | ||||
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, Quaker Chemical’s investor conference call to discuss the first quarter of 2013 results is scheduled for April 30, 2013 at 8:30 a.m. (ET). A live webcast of the conference call, together with supplemental information, can be accessed through the Company’s Investor Relations website at http://www.quakerchem.com. You can also access the conference call by dialing 877-269-7756.
About Quaker
Quaker Chemical is a leading global provider of process fluids, chemical specialties, and technical expertise to a wide range of industries, including steel, aluminum, automotive, mining, aerospace, tube and pipe, cans, and others. For nearly 100 years, Quaker has helped customers around the world achieve production efficiency, improve product quality, and lower costs through a combination of innovative technology, process knowledge, and customized services. Headquartered in Conshohocken, Pennsylvania USA, Quaker serves businesses worldwide with a network of dedicated and experienced professionals whose mission is to make a difference.
| -more- |
Quaker Chemical Corporation
Condensed Consolidated Statement of Income
(Dollars in thousands, except per share data and share amounts)
| (Unaudited) | ||||||||
| Three Months Ended March 31, | ||||||||
| 2013 | 2012 | |||||||
| Net sales | $ | 176,193 | $ | 177,638 | ||||
| Cost of goods sold | 113,585 | 117,843 | ||||||
| Gross profit | 62,608 | 59,795 | ||||||
| % | 35.5 | % | 33.7 | % | ||||
| Selling, general and administrative expenses | 45,197 | 43,093 | ||||||
| Operating income | 17,411 | 16,702 | ||||||
| % | 9.9 | % | 9.4 | % | ||||
| Other income, net | 346 | 341 | ||||||
| Interest expense | (744 | ) | (1,174 | ) | ||||
| Interest income | 169 | 123 | ||||||
| Income before taxes and equity in net income of associated companies | 17,182 | 15,992 | ||||||
| Taxes on income before equity in net income of associated companies | 4,133 | 3,445 | ||||||
| Income before equity in net income of associated companies | 13,049 | 12,547 | ||||||
| Equity in net income of associated companies | 1,142 | 565 | ||||||
| Net income | 14,191 | 13,112 | ||||||
| Less: Net income attributable to noncontrolling interest | 572 | 747 | ||||||
| Net income attributable to Quaker Chemical Corporation | $ | 13,619 | $ | 12,365 | ||||
| % | 7.7 | % | 7.0 | % | ||||
| Per share data: | ||||||||
| Net income attributable to Quaker Chemical Corporation Common Shareholders - basic | $ | 1.04 | $ | 0.96 | ||||
| Net income attributable to Quaker Chemical Corporation Common Shareholders - diluted | $ | 1.04 | $ | 0.95 | ||||
| -more- |
Quaker Chemical Corporation
Condensed Consolidated Balance Sheet
(Dollars in thousands, except par value and share amounts)
| (Unaudited) | ||||||||
| March 31, | December 31, | |||||||
| 2013 | 2012 | |||||||
| ASSETS | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | 35,256 | $ | 32,547 | ||||
| Accounts receivable, net | 157,163 | 154,197 | ||||||
| Inventories | 73,965 | 72,471 | ||||||
| Prepaid expenses and other current assets | 17,763 | 18,595 | ||||||
| Total current assets | 284,147 | 277,810 | ||||||
| Property, plant and equipment, net | 84,928 | 85,112 | ||||||
| Goodwill | 59,248 | 59,169 | ||||||
| Other intangible assets, net | 32,972 | 32,809 | ||||||
| Investments in associated companies | 15,605 | 16,603 | ||||||
| Deferred income taxes | 28,935 | 30,673 | ||||||
| Other assets | 34,752 | 34,458 | ||||||
| Total assets | $ | 540,587 | $ | 536,634 | ||||
| LIABILITIES AND EQUITY | ||||||||
| Current liabilities | ||||||||
| Short-term borrowings and current portion of long-term debt | $ | 1,905 | $ | 1,468 | ||||
| Accounts and other payables | 74,807 | 70,794 | ||||||
| Accrued compensation | 11,016 | 16,842 | ||||||
| Other current liabilities | 25,280 | 18,688 | ||||||
| Total current liabilities | 113,008 | 107,792 | ||||||
| Long-term debt | 27,675 | 30,000 | ||||||
| Deferred income taxes | 6,256 | 6,383 | ||||||
| Other non-current liabilities | 91,675 | 102,783 | ||||||
| Total liabilities | 238,614 | 246,958 | ||||||
| Equity | ||||||||
| Common stock, $1 par value; authorized 30,000,000 shares; issued 13,139,691 | 13,140 | 13,095 | ||||||
| Capital in excess of par value | 95,775 | 94,470 | ||||||
| Retained earnings | 225,790 | 215,390 | ||||||
| Accumulated other comprehensive loss | (41,747 | ) | (41,855 | ) | ||||
| Total Quaker shareholders' equity | 292,958 | 281,100 | ||||||
| Noncontrolling interest | 9,015 | 8,576 | ||||||
| Total equity | 301,973 | 289,676 | ||||||
| Total liabilities and equity | $ | 540,587 | $ | 536,634 | ||||
| -more- |
Quaker Chemical Corporation
Condensed Consolidated Statement of Cash Flows
For the three months ended March 31,
(Dollars in thousands)
| (Unaudited) | ||||||||
| 2013 | 2012 | |||||||
| Cash flows from operating activities | ||||||||
| Net income | $ | 14,191 | $ | 13,112 | ||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
| Depreciation | 3,056 | 3,057 | ||||||
| Amortization | 879 | 746 | ||||||
| Equity in undistributed earnings of associated companies, net of dividends | 921 | (381 | ) | |||||
| Deferred compensation and other, net | (861 | ) | (103 | ) | ||||
| Stock-based compensation | 1,040 | 1,186 | ||||||
| Gain on disposal of property, plant and equipment | (2 | ) | (14 | ) | ||||
| Insurance settlement realized | - | (483 | ) | |||||
| Pension and other postretirement benefits | (2,521 | ) | (2,357 | ) | ||||
| (Decrease) increase in cash from changes in current assets and current liabilities, net of acquisitions: | ||||||||
| Accounts receivable | (3,977 | ) | (9,764 | ) | ||||
| Inventories | (1,837 | ) | 352 | |||||
| Prepaid expenses and other current assets | (457 | ) | (557 | ) | ||||
| Accounts payable and accrued liabilities | 874 | 1,938 | ||||||
| Net cash provided by operating activities | 11,306 | 6,732 | ||||||
| Cash flows from investing activities | ||||||||
| Investments in property, plant and equipment | (2,723 | ) | (3,178 | ) | ||||
| Payments related to acquisitions, net of cash acquired | (647 | ) | - | |||||
| Proceeds from disposition of assets | 13 | 64 | ||||||
| Insurance settlement received and interest earned | 14 | 18 | ||||||
| Change in restricted cash, net | (14 | ) | 465 | |||||
| Net cash used in investing activities | (3,357 | ) | (2,631 | ) | ||||
| Cash flows from financing activities | ||||||||
| Net increase in short-term borrowings | 594 | - | ||||||
| Proceeds from long-term debt | - | 1,350 | ||||||
| Repayment of long-term debt | (2,438 | ) | (189 | ) | ||||
| Dividends paid | (3,208 | ) | (3,105 | ) | ||||
| Stock options exercised, other | (59 | ) | (1,288 | ) | ||||
| Excess tax benefit related to stock option exercises | 369 | 546 | ||||||
| Net cash used in financing activities | (4,742 | ) | (2,686 | ) | ||||
| Effect of exchange rate changes on cash | (498 | ) | 640 | |||||
| Net increase in cash and cash equivalents | 2,709 | 2,055 | ||||||
| Cash and cash equivalents at the beginning of the period | 32,547 | 16,909 | ||||||
| Cash and cash equivalents at the end of the period | $ | 35,256 | $ | 18,964 | ||||
1 Quaker Chemical Corporation Investor Conference Call April 30, 2013 First Quarter 2013 Results
2 Regulation G The attached charts include Company information that does not conform to generally accepted accounting principles (GAAP). Management believes that an analysis of this data is meaningful to investors because it provides insight with respect to ongoing operating results of the Company and allows investors to better evaluate the financial results of the Company. These measures should not be viewed as an alternative to GAAP measures of performance. Furthermore, these measures may not be consistent with similar measures provided by other companies. This data should be read in conjunction with the Company’s first quarter earnings news release dated April 29, 2013, which has been furnished to the SEC on Form 8-K, and the Company’s Form 10-Q for the quarterly period ended March 31, 2013, which has been filed with the SEC. Forward-Looking Statements This presentation may contain 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. Risks and Uncertainties Statement
3 Speakers Michael F. Barry Chairman of the Board, Chief Executive Officer & President Margaret M. Loebl Vice President, Chief Financial Officer & Treasurer Robert T. Traub General Counsel Chart #1
4 1 st Quarter 2013 Headlines • Solid net sales and operating income despite challenging environment • Gross margin improvement • Net operating cash flow of $11.3 million enhances strong balance sheet Chart #2
5 Chairman Comments ▪ Positives x Solid sales / margins in a difficult economy x Winning business & leveraging acquisitions x Strong cash flow generation x Liquidity remains a Company strength ▪ Negatives x Weak market conditions, especially in Europe x Challenging outlook for the remainder of the year First Quarter 2013 Chart #3 On balance, we remain optimistic about our future and expect 2013 to be another good year for Quaker.
6 Product Volume by Quarter 25,000 30,000 35,000 40,000 45,000 50,000 55,000 4Q08 YTD Avg. 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 Metalworking Process Chemicals Segment Chart #4
7 Financial Snapshot Q1 2013 Q1 2012 Net Sales ($Mils.) 176.2 177.6 Gross Margin (%) 35.5 33.7 Operating Margin (%) 9.9 9.4 Net Income attributable to Quaker Chemical Corporation ($Mils.) 13.6 12.4 Adjusted EBITDA ($Mils.) – Trailing Twelve Months 81.9 75.6 Adjusted EBITDA Margin (%) 11.6 10.8 Earnings Per Diluted Share 1.04 0.95 Non - GAAP Earnings Per Diluted Share 0.96 0.91 Debt ($Mils.) 29.6 48.5 Equity ($Mils.) 302.0 277.8 Chart #5
8 Gross Margin Percentage 33.7% 34.3% 32.7% 34.2% 35.5% 20.0% 25.0% 30.0% 35.0% 40.0% Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 QTD Gross Margin Percentage Chart #6 28.0% 34.7% 35.4% 32.6% 33.7% 20.0% 25.0% 30.0% 35.0% 40.0% 2008 2009 2010 2011 2012 YTD Gross Margin Percentage
9 Baseline Historical Performance $40.1 $44.2 $66.8 $73.0 $80.9 $81.9 6.90% 9.80% 12.30% 10.70% 11.40% 11.60% 2008 2009 2010 2011 2012 Q1 2013 Trailing Twelve Months Adjusted EBITDA ($ Mils.) Adjusted EBITDA Margin (%) Chart #7 (Adjusted EBITDA)
10 Balance Sheet Net Cash / (Debt) -$100 -$80 -$60 -$40 -$20 $0 $20 $40 $60 2008 2009 2010 2011 2012 Q1 2013 $ Millions Cash ST/LT Debt Net Debt Chart #8
11 Net Cash Flow From Operations 6.7 15.2 19.8 21.1 11.3 0 10 20 30 40 50 60 70 80 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 QTD Operating Cash Flow ($ Millions) Chart #9 13.4 41.6 37.5 19.7 62.9 0 10 20 30 40 50 60 70 80 2008 2009 2010 2011 2012 YTD Operating Cash Flow ($ Millions)
12 APPENDIX
13 Trailing Twelve Months Adjusted EBITDA Reconciliation Chart #10 I = G + H H G = F - D F E = C + D D C = B - A B A Trailing Twelve Months Q1 2013 Q1 2013 Last Nine Months 2012 YTD 2012 Trailing Twelve Months Q1 2012 Q1 2012 Last Nine Months 2011 YTD 2011 Q1 2011 Net income 48,659 13,619 35,040 47,405 47,231 12,365 34,866 45,892 11,026 Depreciation 12,251 3,056 9,195 12,252 11,856 3,057 8,799 11,455 2,656 Amortization 3,239 879 2,360 3,106 2,598 746 1,852 2,338 486 Interest expense 3,853 744 3,109 4,283 4,622 1,174 3,448 4,666 1,218 Taxes on income 16,263 4,133 12,130 15,575 14,879 3,445 11,434 14,256 2,822 Non-cash gain from the purchase of an equity affiliate - - - - (2,718) - (2,718) (2,718) - Change in fair value of a contingent consideration liability (1,737) - (1,737) (1,737) (595) - (595) (595) - Equity loss (income) from a captive insurance company (2,828) (1,435) (1,393) (1,812) (2,316) (419) (1,897) (2,323) (426) Devaluation of the Venezuelan Bolivar 357 357 - - - - - - - U.S. customer bankruptcies 1,254 - 1,254 1,254 - - - - - Transition costs related to key employees 609 - 609 609 - - - - - Adjusted EBITDA 81,920 21,353 60,567 80,935 75,557 20,368 55,189 72,971 17,782 Adjusted EBITDA Margin 11.6% 12.1% 11.4% 11.4% 10.8% 11.5% 10.5% 10.7% 11.1%
14 Annual Adjusted EBITDA Reconciliation Chart #11 2008 2009 2010 2011 2012 Net income 9,833 16,058 32,120 45,892 47,405 Depreciation 10,879 9,525 9,867 11,455 12,252 Amortization 1,177 1,078 988 2,338 3,106 Interest expense 5,509 5,533 5,225 4,666 4,283 Taxes on income 4,977 7,065 12,616 14,256 15,575 Restructuring and related activities 2,916 2,289 - - - Non-income tax contingency charge - - 4,132 - - Equity affiliate out of period charge - - 564 - - Transition costs related to key employees 3,505 2,443 1,317 - 609 Non-cash gain from the purchase of an equity affiliate - - - (2,718) - Change in fair value of a contingent consideration liability - - - (595) (1,737) Equity loss (income) from a captive insurance company 1,299 162 (313) (2,323) (1,812) Devaluation of the Venezuelan Bolivar - - 322 - - U.S customer bankruptcies - - - 1,254 Adjusted EBITDA 40,095 44,153 66,838 72,971 80,935 Adjusted EBITDA Margin 6.9% 9.8% 12.3% 10.7% 11.4%
15 Non - GAAP Earnings Per Diluted Share Reconciliation Q1 2013 Q1 2012 GAAP Earnings Per Diluted Share $ 1.04 $ 0.95 Devaluation of the Venezuelan Bolivar 0.03 -- Equity income in a captive insurance company (0.11) (0.04) Non – GAAP Earnings Per Diluted Share $ 0.96 $ 0.91 Chart #12