8-K

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, 2008

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 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:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o 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, 2008, Quaker Chemical Corporation announced its results of operations for the first quarter ended March 31, 2008 in a press release, the text of which is included as Exhibit 99.1 hereto.

Item 9.01.Financial Statements and Exhibits.

The following exhibit is included as part of this report:

Exhibit No.
99.1	Press Release of Quaker Chemical Corporation dated April 29, 2008.

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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 thereunto duly authorized.

	QUAKER CHEMICAL CORPORATION
	Registrant
Date: April 30, 2008	By:	/s/ Mark A. Featherstone
		Mark A. Featherstone Vice President and Chief Financial Officer

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EX-99.1

	NEWS
For Release: Immediate		Contact: Mark A. Featherstone Vice President and Chief Financial Officer 610-832-4160

QUAKER CHEMICAL ANNOUNCES RECORD QUARTERLY SALES AND A

44% INCREASE IN FIRST QUARTER EARNINGS

April 29, 2008

CONSHOHOCKEN, PA - Quaker Chemical Corporation (NYSE:KWR) today announced sales for the first quarter 2008 of $147.7 million, a quarterly record, and net income of $5.1 million, increases of 18.3% and 44.0%, respectively, compared to the first quarter of 2007. Earnings per share increased to $0.50 per diluted share from $0.35 per diluted share for the first quarter of 2007.

“We’re very pleased with our start in 2008, particularly given today’s world,” commented Ronald J. Naples, Chairman and Chief Executive Officer.  "We achieved improvement in operating income as a percentage of sales to over 6%, despite the headwinds of rapidly escalating raw material costs. We did see a decrease in our sequential gross margin percentage from the fourth quarter of 2007, but were able to maintain our margins in dollar terms, and continue to work with our customers to recognize the value we deliver and our cost realities. With our future in mind, we remain committed to invest in key growth initiatives, while at the same time being mindful of today’s challenges and limited visibility of the current economic environment and commodity price trends. As suggested by our recent dividend increase, we have confidence about our long-term future and the prospects of earnings improvement for 2008.”

First Quarter 2008 Summary

Net sales for the first quarter were $147.7 million, up 18.3% from $124.9 million for the first quarter 2007. The increase in net sales was attributable to volume growth, higher sales prices and foreign exchange rate translation. Volume growth was realized in virtually all the Company’s regions, including higher revenue related to the Company’s Chemical Management Services (“CMS”) channel. Foreign exchange rate translation increased revenues by approximately 8% for the first quarter of 2008, compared to the same period in 2007. Selling price increases were realized, in part, as a result of an ongoing effort to offset higher raw material costs. CMS revenues were higher due to the full year impact of additional CMS accounts gained in 2007, as well as the renewal and restructuring of several of the Company’s CMS contracts.

Gross margin dollars were up more than $5.0 million, or 13.2% for the first quarter of 2008, compared to the same period in 2007. However, the gross margin percentage was 29.5% for the first quarter of 2008, compared to 30.9% for the first quarter of 2007. The Company’s larger mix of CMS contracts reported on a gross versus pass-through basis decreased gross margin as a percentage of sales by approximately 0.5 percentage points. The remaining decline in gross margin as a percentage of sales is due to increased raw material costs in excess of price increases, as well as product and regional sales mix. The Company has announced and implemented a number of further price increases to aid in offsetting unprecedented levels in the Company’s key raw material costs.

Selling, general and administrative expenses for the quarter increased $2.6 million, compared to the first quarter of 2007. Foreign exchange rate translation accounted for the majority of the increase over the prior year period. Inflationary increases were largely offset by lower legal and environmental costs and lower incentive compensation expense.

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The decrease in other income was primarily due to foreign exchange rate losses in 2008 compared to gains in 2007. Net interest expense was lower due to lower average borrowings as well as lower interest rates.

Balance Sheet and Cash Flow Items

The Company’s net debt increased from December 31, 2007, primarily to fund working capital needs driven by higher quarterly sales and scheduled first quarter payments, including the payment of incentive compensation. The Company’s net debt-to-total-capital ratio was 34% at March 31, 2008, compared to 43% at March 31, 2007 and 32% at December 31, 2007.

Quaker Chemical Corporation is a leading global provider of process chemicals, chemical specialties, services, and technical expertise to a wide range of industries - including steel, automotive, mining, aerospace, tube and pipe, coatings and construction materials. Our products, technical solutions, and chemical management services enhance our customers’ processes, improve their product quality, and lower their costs. Quaker’s headquarters is located near Philadelphia in Conshohocken, Pennsylvania.

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 September 11, 2001. 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.

As previously announced, Quaker Chemical’s investor conference call to discuss first quarter results is scheduled for April 30, 2008 at 2:30 p.m. (ET). Access the conference by calling 877-269-7756 or visit Quaker’s Web site at www.quakerchem.com for a live webcast.

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Quaker Chemical Corporation
Condensed Consolidated Statement of Income
(Dollars in thousands, except per share data and share amounts)
	(Unaudited)
	Three Months Ended March 31,
	2008			2007
Net sales	$	147,718		$	124,891
Cost of goods sold		104,083			86,345
Gross margin		43,635			38,546
%		29.5	%		30.9	%
Selling, general and administrative expenses		34,504			31,919
Operating income		9,131			6,627
%		6.2	%		5.3	%
Other income, net		161			327
Interest expense, net		(1,182	)		(1,350	)
Income before taxes		8,110			5,604
Taxes on income		2,765			1,844
		5,345			3,760
Equity in net income of associated companies		112			125
Minority interest in net income of subsidiaries		(364	)		(348	)
Net income	$	5,093		$	3,537
%		3.4	%		2.8	%
Per share data:
Net income - basic	$	0.50		$	0.36
Net income - diluted	$	0.50		$	0.35
Shares Outstanding:
Basic		10,085,859			9,907,683
Diluted		10,179,539			10,024,905

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Quaker Chemical Corporation
Condensed Consolidated Balance Sheet
(Dollars in thousands, except par value and share amounts)
	(Unaudited)
	March 31,			December 31,
	2008			2007
ASSETS
Current assets
Cash and cash equivalents	$	20,527		$	20,195
Accounts receivable, net		120,273			118,135
Inventories, net		64,559			60,738
Prepaid expenses and other current assets		16,057			14,433
Total current assets		221,416			213,501
Property, plant and equipment, net		63,707			62,287
Goodwill		45,799			43,789
Other intangible assets, net		7,668			7,873
Investments in associated companies		7,959			7,323
Deferred income taxes		32,018			30,257
Other assets		40,476			34,019
Total assets	$	419,043		$	399,049
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Short-term borrowings and current portion of long-term debt	$	3,875		$	4,288
Accounts and other payables		68,519			67,380
Accrued compensation		9,730			17,287
Other current liabilities		17,701			17,396
Total current liabilities		99,825			106,351
Long-term debt		89,235			78,487
Deferred income taxes		8,209			7,583
Other non-current liabilities		77,557			71,722
Total liabilities		274,826			264,143
Minority interest in equity of subsidiaries		4,750			4,513
Shareholders' equity
Common stock, $1 par value; authorized 30,000,000 shares; issued 10,268,988 shares		10,269			10,147
Capital in excess of par value		11,844			10,104
Retained earnings		118,506			115,767
Accumulated other comprehensive loss		(1,152	)		(5,625	)
Total shareholders' equity		139,467			130,393
Total liabilities and shareholders' equity	$	419,043		$	399,049

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Quaker Chemical Corporation
Condensed Consolidated Statement of Cash Flows
For the Three months ended March 31,
(Dollars in thousands)
	(Unaudited)
	2008			2007
Cash flows from operating activities
Net income	$	5,093		$	3,537
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation		2,680			2,719
Amortization		300			339
Equity in net income of associated companies, net of dividends		(112	)		44
Minority interest in earnings of subsidiaries		364			348
Deferred income tax		1,246			361
Deferred compensation and other, net		22			267
Stock-based compensation		376			262
(Gain) Loss on disposal of property, plant and equipment		(35	)		5
Insurance settlement realized		(136	)		(265	)
Pension and other postretirement benefits		(2,458	)		(869	)
Increase (decrease) in cash from changes in current assets and current liabilities, net of acquisitions:
Accounts receivable		1,159			(10,633	)
Inventories		(2,374	)		(3,019	)
Prepaid expenses and other current assets		(3,037	)		(873	)
Accounts payable and accrued liabilities		(9,280	)		2,749
Net cash used in operating activities		(6,192	)		(5,028	)
Cash flows from investing activities
Capital expenditures		(1,949	)		(2,721	)
Payments related to acquisitions		(1,000	)		(1,000	)
Proceeds from disposition of assets		65			-
Insurance settlement received and interest earned		5,112			143
Change in restricted cash, net		(4,976	)		122
Net cash used in investing activities		(2,748	)		(3,456	)
Cash flows from financing activities
Net decrease in short-term borrowings		(378	)		(1,262	)
Proceeds from long-term debt		9,844			5,277
Repayments of long-term debt		(251	)		(225	)
Dividends paid		(2,181	)		(2,137	)
Stock options exercised, other		1,486			1,809
Distributions to minority shareholders		-			(270	)
Net cash provided by financing activities		8,520			3,192
Effect of exchange rate changes on cash		752			17
Net increase (decrease) in cash and cash equivalents		332			(5,275	)
Cash and cash equivalents at the beginning of the period		20,195			16,062
Cash and cash equivalents at the end of the period	$	20,527		$	10,787