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 26, 2011

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:

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 26, 2011, Quaker Chemical Corporation announced its results of operations for the first quarter ended March 31, 2011, 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 26, 2011.
99.2	Supplemental Information related to first quarter ended March 31, 2011.

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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 hereunto duly authorized.

		QUAKER CHEMICAL CORPORATION Registrant
Date:  April 26, 2011	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 CORPORATION ANNOUNCES FIRST QUARTER 2011 RESULTS

· Strong quarterly sales up 25% to $159.9 million from Q1 2010

· Q1 2011 diluted EPS of $0.91 vs. $0.84 diluted EPS in Q1 2010

· Product volumes higher than Q1 2010 by 16%

April 26, 2011

CONSHOHOCKEN, PA – Quaker Chemical Corporation (NYSE:KWR) today announced net sales of $159.9 million and earnings per diluted share of $0.91 for the first quarter of 2011, up 25% and 8%, respectively, compared to net sales of $128.3 million and earnings per diluted share of $0.84 for the first quarter of 2010.

Michael F. Barry, Chairman, Chief Executive Officer and President, commented, “We are off to a good start in 2011, despite the continuing challenge of escalating raw material costs.  We are and will be implementing additional price increases as part of our ongoing effort to restore our margins to more acceptable levels.  However, our profitability continues to grow due to good demand in our base markets, new business gained and the contribution from our recent acquisitions.”

Mr. Barry further stated, “Despite the uncertainties in the raw material markets and global economies, our goal for 2011 remains to build upon the profitability we achieved in 2010.  With our leadership positions in both the emerging and mature markets, as well as our organic and external growth opportunities, I remain confident in our prospects for 2011 and beyond.”

First Quarter 2011 Summary

Net sales for the first quarter of 2011 were $159.9 million, an increase of 25% from $128.3 million in the first quarter of 2010.  The increase in net sales was primarily the result of higher volumes and selling prices across the globe.  Product volumes were higher by approximately 16% including the effects of acquisitions.  Selling prices and mix increased revenues by approximately 7%, as the Company continues to implement price increases to help offset higher raw material costs.  Foreign exchange rates also increased revenues by approximately 2%.

Gross profit increased by approximately $5.4 million, but gross margin decreased from 36.9% in the first quarter of 2010 to 33% in the first quarter of 2011, as raw material costs continued to escalate, particularly in the first quarter of 2011.  The Company continues to implement price increases to recover these higher costs.

Selling, general and administrative expenses (“SG&A”) increased approximately $5.0 million compared to the first quarter of 2010.  Higher selling costs on increased business activity, our 2010 acquisitions, foreign exchange rate translation and higher professional fees accounted for approximately 62% of the increase.  Higher inflationary and other costs partially offset by lower incentive compensation accounted for the remainder of the increase.  SG&A as a percentage of sales decreased to 24.2% in the first quarter of 2011 from 26.2% in the first quarter of 2010.

Net interest expense decreased due to lower interest rates despite higher average borrowings.  Equity in net income of associated companies increased compared to the first quarter of 2010 as the prior year quarter reflected a charge of approximately $0.03 per diluted share related to the first quarter 2010 devaluation of the Venezuelan Bolivar Fuerte.

The Company’s low first quarter 2011 and 2010 effective tax rates include the expiration of applicable statutes of limitations for uncertain tax positions of approximately $0.11 per diluted share, in each period.  The Company has experienced and expects to further experience volatility in its quarterly 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.  However, the Company expects a higher effective tax rate for the full year 2011 as compared to the first quarter 2011 rate.

Balance Sheet and Cash Flow Items

Debt increased from December 31, 2010 due to higher working capital requirements on increased business activity, as well as the timing of payments related to incentive compensation.

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, 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.

Conference Call

As previously announced, Quaker Chemical’s investor conference call to discuss first quarter results is scheduled for April 27, 2011 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 Web site at http://www.quakerchem.com.  You can also access the conference call by dialing 877-269-7756.

About Quaker

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, aluminum, 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.

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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,
	2011			2010
Net sales	$	159,865		$	128,320
Cost of goods sold		107,131			80,980
Gross profit		52,734			47,340
%		33.0	%		36.9	%
Selling, general and administrative expenses		38,634			33,669
Operating income		14,100			13,671
%		8.8	%		10.7	%
Other income, net		539			763
Interest expense, net		(946	)		(1,127	)
Income before taxes and equity in net income (loss) of associated companies		13,693			13,307
Taxes on income before equity in net income (loss) of associated companies		2,822			3,181
Income before equity in net income (loss) of associated companies		10,871			10,126
Equity in net income (loss) of associated companies		359			(89	)
Net income		11,230			10,037
Less: Net income attributable to noncontrolling interest		630			618
Net income attributable to Quaker Chemical Corporation	$	10,600		$	9,419
%		6.6	%		7.3	%
Per share data:
Net income attributable to Quaker Chemical Corporation Common Shareholders - basic	$	0.92		$	0.85
Net income attributable to Quaker Chemical Corporation Common Shareholders - diluted	$	0.91		$	0.84

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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,
	2011			2010
ASSETS
Current assets
Cash and cash equivalents	$	23,564		$	25,766
Accounts receivable, net		130,948			116,266
Inventories		70,230			60,841
Prepaid expenses and other current assets		13,899			12,609
Total current assets		238,641			215,482
Property, plant and equipment, net		78,494			76,535
Goodwill		53,675			52,758
Other intangible assets, net		23,579			24,030
Investments in associated companies		9,439			9,218
Deferred income taxes		27,303			28,846
Other assets		44,896			42,561
Total assets	$	476,027		$	449,430
LIABILITIES AND EQUITY
Current liabilities
Short-term borrowings and current portion of long-term debt	$	809		$	890
Accounts and other payables		76,595			63,893
Accrued compensation		9,728			17,140
Other current liabilities		19,108			19,268
Total current liabilities		106,240			101,191
Long-term debt		83,766			73,855
Deferred income taxes		6,410			6,108
Other non-current liabilities		78,849			81,177
Total liabilities		275,265			262,331
Equity
Common stock, $1 par value; authorized 30,000,000 shares; issued 11,531,148		11,531			11,492
Capital in excess of par value		39,132			38,275
Retained earnings		152,237			144,347
Accumulated other comprehensive loss		(9,497	)		(13,736	)
Total Quaker shareholders' equity		193,403			180,378
Noncontrolling interest		7,359			6,721
Total equity		200,762			187,099
Total liabilities and equity	$	476,027		$	449,430

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Quaker Chemical Corporation

Condensed Consolidated Statement of Cash Flows

For the three months ended March 31,

(Dollars in thousands)

	(Unaudited)
	2011			2010
Cash flows from operating activities
Net income	$	11,230		$	10,037
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation		2,656			2,593
Amortization		486			254
Equity in net (income) loss of associated companies, net of dividends		(262	)		89
Deferred compensation and other, net		1,967			289
Stock-based compensation		868			727
Gain on disposal of property, plant and equipment		(40	)		(32	)
Insurance settlement realized		(365	)		(345	)
Pension and other postretirement benefits		(4,910	)		(2,265	)
Increase (decrease) in cash from changes in current assets and current liabilities, net of acquisitions:
Accounts receivable		(12,478	)		(3,606	)
Inventories		(8,309	)		(5,332	)
Prepaid expenses and other current assets		(2,397	)		(1,360	)
Accounts payable and accrued liabilities		4,455			(5,818	)
Net cash used in operating activities		(7,099	)		(4,769	)
Cash flows from investing activities
Capital expenditures		(3,475	)		(2,042	)
Proceeds from disposition of assets		170			41
Insurance settlement received and interest earned		22			5,038
Change in restricted cash, net		343			(2,742	)
Net cash (used in) provided by investing activities		(2,940	)		295
Cash flows from financing activities
Proceeds from long-term debt		10,000			7,583
Repayments of long-term debt		(231	)		(122	)
Dividends paid		(2,701	)		(2,550	)
Stock options exercised, other		(50	)		135
Excess tax benefit related to stock option exercises		78			321
Net cash provided by financing activities		7,096			5,367
Effect of exchange rate changes on cash		741			(1,124	)
Net decrease in cash and cash equivalents		(2,202	)		(231	)
Cash and cash equivalents at the beginning of the period		25,766			25,051
Cash and cash equivalents at the end of the period	$	23,564		$	24,820

EX-99.2