-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, KRvZ4hKwCtQTDYhSNmysKTZghHCSt+SweqVoIttXqNDP0jpjla+MBRt9kdpTbxau dUtDMVG/dBCCwDrGbuQMFw== 0000920049-96-000025.txt : 19960517 0000920049-96-000025.hdr.sgml : 19960517 ACCESSION NUMBER: 0000920049-96-000025 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960331 FILED AS OF DATE: 19960515 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: QUAKER CHEMICAL CORP CENTRAL INDEX KEY: 0000081362 STANDARD INDUSTRIAL CLASSIFICATION: MISCELLANEOUS PRODUCTS OF PETROLEUM & COAL [2990] IRS NUMBER: 230993790 STATE OF INCORPORATION: PA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-07154 FILM NUMBER: 96565209 BUSINESS ADDRESS: STREET 1: ELM AND LEE STS CITY: CONSHOHOCKEN STATE: PA ZIP: 19428 BUSINESS PHONE: 21583240119 MAIL ADDRESS: STREET 1: ELM & LEE STS CITY: CONSHOHOCKEN STATE: PA ZIP: 19428 10-Q 1 QUARTERLY REPORT SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 _______________________ FORM 10-Q [ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 1996 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ____________to____________ Commission file number 0-7154 ------ QUAKER CHEMICAL CORPORATION ------------------------------------------------------------------------- (Exact name of Registrant as specified in its charter) Pennsylvania 23-0993790 --------------------------------- ----------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) Elm and Lee Streets, Conshohocken, Pennsylvania 19428 - 0809 -------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code 610-832-4000 -------------- Not Applicable ----------------------------------------------------------------------- Former name, former address and former fiscal year, if changed since last report. Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No ----- --- APPLICABLE ONLY TO CORPORATE ISSUERS: Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Number of Shares of Common Stock Outstanding on April 30, 1996 8,674,819 ------------ PART I. FINANCIAL INFORMATION QUAKER CHEMICAL CORPORATION AND CONSOLIDATED SUBSIDIARIES CONDENSED FINANCIAL INFORMATION The following condensed financial statements are filed as part of this quarterly report on Form 10-Q: Consolidated Balance Sheet at March 31, 1996 and December 31, 1995 Consolidated Statement of Income for the three months ended March 31, 1996 and 1995 Consolidated Statement of Cash Flows for the three months ended March 31, 1996 and 1995. * * * * * * * * * * NOTE TO CONDENSED FINANCIAL INFORMATION The attached condensed financial information has been prepared in accordance with instructions for Form 10-Q and, therefore, does not include all financial note information which might be necessary for a fair presentation in accordance with generally accepted accounting principles. Such condensed financial information is unaudited, but in the opinion of management, includes all adjustments, consisting only of normal recurring adjustments and accruals, necessary for a fair presentation of results for the periods indicated. The net income reported for the periods should not necessarily be regarded as indicative of net income on an annualized basis; however, significant variations from the results for the same period of the previous year, if any, have been disclosed in the accompanying management's discussion and analysis. Certain reclassifications of prior year's data have been made to improve comparability. - 2 - Quaker Chemical Corporation Consolidated Balance Sheet (dollars in thousands) March 31, December 31, 1996 1995 (Unaudited) * Assets Current assets Cash and cash equivalents $ 9,548 $ 7,230 Accounts receivable 50,139 46,965 Inventories Raw materials and supplies 11,146 10,964 Work in process and finished goods 9,744 10,669 Deferred income taxes 1,337 1,415 Prepaid expenses and other current assets 9,692 9,475 ------- ------- 91,606 86,718 ------- ------- Investments in and advances to associated companies 9,439 10,715 ------- ------- Property, plant and equipment, at cost Land 6,855 7,279 Buildings and improvements 39,751 40,232 Machinery and equipment 69,822 70,010 Construction in progress 1,464 1,068 ------- ------- 117,892 118,589 Less accumulated depreciation 63,111 62,280 ------- ------- 54,781 56,309 ------- ------- Excess of cost over net assets of acquired companies 18,532 18,973 Deferred income taxes 5,566 5,349 Other noncurrent assets 6,927 7,344 ------- ------- 31,025 31,666 ------- ------- $186,851 $185,408 ======== ======== * Condensed from audited financial statements. - 3 - Quaker Chemical Corporation Consolidated Balance Sheet (dollars in thousands) March 31, December 31, 1996 1995 (Unaudited) * Liabilities Current liabilities Short-term borrowings, current portion of long-term debt, notes payable and capital leases $ 30,594 $ 25,548 Accounts payable 22,012 20,969 Dividends payable 1,474 1,473 Accrued liabilities 11,707 12,392 Estimated taxes on income 547 486 ------- ------- Total current liabilities 66,334 60,868 ------- ------- Long-term debt, notes payable and capital leases 7,614 9,300 Deferred income taxes 2,983 2,977 Accrued postretirement benefits 8,812 8,809 Other noncurrent liabilities 6,753 6,432 ------- ------- Total noncurrent liabilities 26,162 27,518 ------- ------- 92,496 88,386 ------- ------- Minority interest in equity of subsidiaries 3,264 3,030 ------- ------- Shareholders' equity Common stock, $1 par value; authorized 30,000,000 shares; issued (including treasury shares) 9,664,009 shares 9,664 9,664 Capital in excess of par value 776 780 Retained earnings 88,054 87,852 Unearned compensation (656) (722) Foreign currency translation adjustments 9,060 12,333 ------- ------- 106,898 109,907 Treasury stock, shares held at cost; 1996 - 992,109, 1995 - 999,924 (15,807) (15,915) ------- ------- 91,091 93,992 ------- ------- $186,851 $185,408 ======== ======== * Condensed from audited financial statements - 4 - Quaker Chemical Corporation Consolidated Statement of Income Three Months Ended March 31, Unaudited (dollars in thousands except per share data) 1996 1995 Income Net sales $ 58,203 $ 54,527 Other income, net 284 154 ---------- ---------- 58,487 54,681 ---------- ---------- Costs and expenses Cost of goods sold 33,955 32,724 Selling, administrative and general expenses 21,085 18,521 ---------- ---------- 55,040 51,245 ---------- ---------- Income from operations 3,447 3,436 Interest expense (500) (332) Interest income 92 89 ---------- ---------- Income before taxes 3,039 3,193 Taxes on income 1,216 1,261 ---------- ---------- 1,823 1,932 Equity in net (loss) income of associated companies (43) 90 Minority interest in net income of subsidiaries (104) (107) ---------- ---------- Net income $ 1,676 $ 1,915 ========== ========== Per share data: Net income $0.19 $0.22 Dividends declared $0.17 $0.17 Based on weighted average number of shares outstanding 8,666,747 8,823,989 - 5 - Quaker Chemical Corporation Consolidated Statement of Cash Flows For the Three Months Ended March 31, 1996 1995 Cash flows from operating activities: Net income $ 1,676 $ 1,915 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Depreciation 1,525 1,708 Amortization 546 408 Equity in net loss (income) of associated companies 43 (90) Minority interest in earnings of subsidiaries 104 107 Deferred income taxes (214) (20) Deferred compensation and other postretirement benefits 202 92 Net change in repositioning liability (265) (367) Other, net 269 (243) Increase (decrease) in cash from changes in current assets and liabilities net of acquisitions and divestitures: Accounts receivable (3,613) (3,492) Inventories 545 (1,012) Prepaid expenses and other current assets (266) 567 Accounts payable and accrued liabilities 1,002 (2,960) Estimated taxes on income 47 (323) ------- -------- Net cash provided by (used in) operating activities 1,601 (3,710) ------- -------- Cash flows from investing activities: Dividends from associated companies 735 Investments in property, plant, equipment and other assets (1,111) (2,033) Investments in and advances to associated companies (330) (323) Proceeds from the sale of patent, production technology and other assets 339 2,000 ------- -------- Net cash used in investing activities (367) (356) ------- -------- Cash flows from financing activities: Net increase in short-term borrowings 5,268 1,827 Repayment of long-term debt and capital leases (1,892) (1,679) Dividends paid (1,474) (1,500) Treasury stock issued 105 233 Treasury stock acquired (507) ------- -------- Net cash provided by (used in) financing activities 2,007 (1,626) ------- -------- Effect of exchange rate changes on cash (923) (20) ------- -------- Net increase (decrease) in cash and cash equivalents 2,318 (5,712) Cash and cash equivalents at beginning of period 7,230 11,345 ------- -------- Cash and cash equivalents at end of period $ 9,548 $ 5,633 ======= ======= Supplemental cash flow information Cash paid during the quarter for: Income taxes $ 981 $ 1,958 Interest 617 560 - 6 - Management's Discussion and Analysis of Financial Condition and Results of Operations Liquidity and Capital Resources Net cash flow provided by (used by) operating activities amounted to $1.6 million in the first quarter of 1996 compared to ($3.7) million in the same period of 1995. The improvement was principally due to the impact of controlled growth in the required amount of operating working capital. The Company's net cash position (cash and cash equivalents plus short-term investments less short-term borrowings and current portion of long-term debt and capital leases) decreased $2.7 million primarily as a result of increased short-term borrowings associated with the replacement of maturing long-term debt obligations with short-term debt and increases in operating working capital (mainly increases in accounts receivable generated from higher sales). The current ratio was 1.4 to 1 at March 31, 1996, unchanged from December 31, 1995. Operations Comparison of First Quarter 1996 with First Quarter 1995 Consolidated net sales for the first quarter of 1996 increased $3.7 million (7%) over the first quarter of 1995, mainly due to the effects of improved pricing and product sales mix. A 3% decrease in volume was offset by an increase of 3% from a June 1995 acquisition in Brazil. Income from operations was slightly higher than the first quarter of 1995. The Company's gross profit margin as a percentage of sales increased 1.4% mainly as a result of the aforementioned benefits of improved pricing and a more profitable sales mix. Selling, administrative and general expenses as a percent of sales were 2.2% higher than 1995 due to higher operating expenses driven largely by additional spending in targeted geographic and product growth areas. Net interest costs rose due to increased financing costs associated with higher debt levels carried into 1996 related to the financing of a 1995 acquisition and other operating needs. Other income increased in the quarter mainly as a result of the absence of negative exchange impacts recorded in 1995. The decrease in equity in net income from associated companies was primarily due to losses incurred by the Company's FRS joint venture related to increased costs of new business development and staff reorganization along with delays in new business startups. - 7 - The Company remains cautiously optimistic about customer production levels and raw material inflation over the balance of the year. However, the principal challenges still facing the Company are the highly competitive nature of the pricing environment in the Company's major markets and the effective management of the Company's FRS joint venture. Given these factors, the Company is in the process of evaluating alternatives to improve margins and the utilization of assets. - 8 - PART II. OTHER INFORMATION Items 1, 2, 3, 4 and 5 are inapplicable and have been omitted. Item 6. Exhibits and Reports on Form 8-K. (a) Exhibits. Exhibit 27-Financial Data Schedule (b) Reports on Form 8-K. No report on Form 8-K was filed during the quarter for which this report is filed. * * * * * * * * * 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 thereunto duly authorized. QUAKER CHEMICAL CORPORATION -------------------------------- (Registrant) /s/ RICHARD J. FAGAN ---------------------------------------- Richard J. Fagan, officer duly authorized to sign this report, Corporate Controller, Acting Corporate Treasurer and Chief Accounting Officer Date: May 15, 1996 - 9 - EX-27 2 ART.5 FDS FOR FIRST QUARTER 10-Q
5 1,000 3-MOS DEC-31-1996 MAR-31-1996 9,548 0 51,000 861 20,890 91,606 117,892 63,111 186,851 66,334 5,000 9,664 0 0 81,427 186,851 58,203 58,487 33,955 55,040 0 0 500 3,039 1,216 1,676 0 0 0 1,676 0.19 0.19
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