x
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Pennsylvania
|
23-0993790
|
|
(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
|
One Quaker Park, 901 E. Hector Street,
Conshohocken, Pennsylvania
|
19428 – 2380
|
|
(Address of principal executive offices)
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(Zip Code)
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Large accelerated filer
¨
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Accelerated filer
x
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|||
Non-accelerated filer
¨
(Do not check if smaller reporting company)
|
Smaller reporting Company
¨
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Number of Shares of Common Stock
Outstanding on March 31, 2013
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13,139,691
|
|
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Page
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||
PART I.
|
|
FINANCIAL INFORMATION
|
|
|
Item 1.
|
|
Financial Statements (unaudited)
|
|
|
|
|
3
|
||
|
|
4
|
||
5
|
||||
|
|
6
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||
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7
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||
Item 2.
|
|
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21
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Item 3.
|
|
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25
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Item 4.
|
|
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26
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PART II.
|
|
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27
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Item 1.
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27
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|||
Item 2.
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27
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|||
Item 6.
|
|
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28
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|
Signatures
|
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28
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Unaudited
|
||||||
(Dollars in thousands,
|
||||||
except par value
|
||||||
and share amounts)
|
||||||
March 31, 2013
|
December 31, 2012*
|
|||||
ASSETS
|
|
|
|
|
|
|||
Current assets
|
|
|
|
|
|
|||
Cash and cash equivalents
|
$
|
35,256
|
|
$
|
32,547
|
|||
Accounts receivable, net
|
|
157,163
|
|
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154,197
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|||
Inventories
|
|
|
|
|||||
Raw materials and supplies
|
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40,100
|
|
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40,417
|
|||
Work-in-process and finished goods
|
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33,865
|
|
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32,054
|
|||
Prepaid expenses and other current assets
|
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17,763
|
|
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18,595
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|||
Total current assets
|
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284,147
|
|
|
277,810
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|||
Property, plant and equipment, at cost
|
|
226,170
|
|
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225,177
|
|||
Less accumulated depreciation
|
|
(141,242)
|
|
(140,065)
|
||||
Net property, plant and equipment
|
|
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 and outstanding
|
|
|
|
|||||
2013 – 13,139,691 shares; 2012 – 13,094,901 shares
|
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
|
*
|
Condensed from audited financial statements
|
Unaudited
|
||||||||
(Dollars in thousands,
|
||||||||
except per share amounts)
|
||||||||
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 | ||||||
Selling, general and administrative expenses
|
45,197 | 43,093 | ||||||
Operating income
|
17,411 | 16,702 | ||||||
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 | ||||
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 | ||||
Dividends declared
|
$ | 0.245 | $ | 0.24 |
Unaudited
|
||||||||
(Dollars in thousands)
|
||||||||
Three Months Ended March 31,
|
||||||||
2013
|
2012
|
|||||||
Net income
|
$ | 14,191 | $ | 13,112 | ||||
Other comprehensive (loss) income, net of tax
|
||||||||
Currency translation adjustments
|
(1,763 | ) | 4,048 | |||||
Defined benefit retirement plans
|
1,306 | 57 | ||||||
Current period change in fair value of derivatives
|
— | 96 | ||||||
Unrealized gain on available-for-sale securities
|
432 | 1,078 | ||||||
Other comprehensive (loss) income
|
(25 | ) | 5,279 | |||||
Comprehensive income
|
14,166 | 18,391 | ||||||
Less: comprehensive income attributable to noncontrolling interest
|
(439 | ) | (1,038 | ) | ||||
Comprehensive income attributable to Quaker Chemical Corporation
|
$ | 13,727 | $ | 17,353 |
Unaudited
|
||||||||
(Dollars in thousands)
|
||||||||
For the Three Months Ended
|
||||||||
March 31,
|
||||||||
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 beginning of period
|
32,547 | 16,909 | ||||||
Cash and cash equivalents at end of period
|
$ | 35,256 | $ | 18,964 | ||||
Supplemental cash flow disclosures:
|
||||||||
Non-cash activities:
|
||||||||
Excess tax benefit related to stock option exercises
|
$ | — | $ | 706 |
Fair Value Measurements at March 31, 2013
|
||||||||||||||||
Fair Value
|
Using Fair Value Hierarchy
|
|||||||||||||||
as of
|
||||||||||||||||
Assets
|
March 31, 2013
|
Level 1
|
Level 2
|
Level 3
|
||||||||||||
Company-owned life insurance
|
$ | 1,733 | $ | — | $ | 1,733 | $ | — | ||||||||
Company-owned life insurance - Deferred compensation assets
|
398 | — | 398 | — | ||||||||||||
Other deferred compensation assets
|
||||||||||||||||
Large capitalization registered investment companies
|
63 | 63 | — | — | ||||||||||||
Mid capitalization registered investment companies
|
6 | 6 | — | — | ||||||||||||
Small capitalization registered investment companies
|
10 | 10 | — | — | ||||||||||||
International developed and emerging markets registered investment
|
||||||||||||||||
companies
|
34 | 34 | — | — | ||||||||||||
Fixed income registered investment companies
|
8 | 8 | — | — | ||||||||||||
Total
|
$ | 2,252 | $ | 121 | $ | 2,131 | $ | — |
Fair Value Measurements at March 31, 2013
|
||||||||||||||||
Fair Value
|
Using Fair Value Hierarchy
|
|||||||||||||||
as of
|
||||||||||||||||
Liabilities
|
March 31, 2013
|
Level 1
|
Level 2
|
Level 3
|
||||||||||||
Deferred compensation liabilities
|
||||||||||||||||
Large capitalization registered investment companies
|
$ | 338 | $ | 338 | $ | — | $ | — | ||||||||
Mid capitalization registered investment companies
|
93 | 93 | — | — | ||||||||||||
Small capitalization registered investment companies
|
76 | 76 | — | — | ||||||||||||
International developed and emerging markets registered investment
|
||||||||||||||||
companies
|
179 | 179 | — | — | ||||||||||||
Fixed income registered investment companies
|
45 | 45 | — | — | ||||||||||||
Fixed general account
|
161 | — | 161 | — | ||||||||||||
Acquisition-related consideration
|
5,010 | — | — | 5,010 | ||||||||||||
Total
|
$ | 5,902 | $ | 731 | $ | 161 | $ | 5,010 |
Fair Value Measurements at December 31, 2012
|
||||||||||||||||
Fair Value
|
Using Fair Value Hierarchy
|
|||||||||||||||
as of
|
||||||||||||||||
Assets
|
December 31, 2012
|
Level 1
|
Level 2
|
Level 3
|
||||||||||||
Company-owned life insurance
|
$ | 1,653 | $ | — | $ | 1,653 | $ | — | ||||||||
Company-owned life insurance - Deferred compensation assets
|
437 | — | 437 | — | ||||||||||||
Other deferred compensation assets
|
||||||||||||||||
Large capitalization registered investment companies
|
62 | 62 | — | — | ||||||||||||
Mid capitalization registered investment companies
|
6 | 6 | — | — | ||||||||||||
Small capitalization registered investment companies
|
9 | 9 | — | — | ||||||||||||
International developed and emerging markets registered investment
|
||||||||||||||||
companies
|
37 | 37 | — | — | ||||||||||||
Fixed income registered investment companies
|
8 | 8 | — | — | ||||||||||||
Total
|
$ | 2,212 | $ | 122 | $ | 2,090 | $ | — |
Fair Value Measurements at December 31, 2012
|
||||||||||||||||
Fair Value
|
Using Fair Value Hierarchy
|
|||||||||||||||
as of
|
||||||||||||||||
Liabilities
|
December 31, 2012
|
Level 1
|
Level 2
|
Level 3
|
||||||||||||
Deferred compensation liabilities
|
||||||||||||||||
Large capitalization registered investment companies
|
$ | 336 | $ | 336 | $ | — | $ | — | ||||||||
Mid capitalization registered investment companies
|
88 | 88 | — | — | ||||||||||||
Small capitalization registered investment companies
|
72 | 72 | — | — | ||||||||||||
International developed and emerging markets registered investment
|
||||||||||||||||
companies
|
187 | 187 | — | — | ||||||||||||
Fixed income registered investment companies
|
48 | 48 | — | — | ||||||||||||
Fixed general account
|
173 | — | 173 | — | ||||||||||||
Acquisition-related consideration
|
4,901 | — | — | 4,901 | ||||||||||||
Total
|
$ | 5,805 | $ | 731 | $ | 173 | $ | 4,901 |
Non-competition
|
||||||||||||
Earnout
|
Agreement
|
|||||||||||
Summit
|
Obligation
|
Total
|
||||||||||
Balance at December 31, 2012
|
$ | 4,497 | $ | 404 | $ | 4,901 | ||||||
Interest accretion
|
163 | 8 | 171 | |||||||||
Payments
|
— | (62 | ) | (62 | ) | |||||||
Balance at March 31, 2013
|
$ | 4,660 | $ | 350 | $ | 5,010 |
Fair value at
March 31, 2013
|
Valuation technique
|
Unobservable input
|
Input value
|
|||||||
Summit earnout
|
$ | 4,660 |
Discounted cash flow
|
Discount rate
|
14.5 | % | ||||
Non-competition agreement obligation
|
$ | 350 |
Discounted cash flow
|
Discount rate
|
14.0 | % |
Cash Flow Hedges
|
|||||||||
Interest Rate Swaps
|
|||||||||
Three Months Ended
|
|||||||||
March 31,
|
|||||||||
2013
|
2012
|
||||||||
Amount of Gain Recognized in Accumulated OCI on Derivative (Effective Portion)
|
$ | — | $ | 96 | |||||
Amount and Location of Loss Reclassified from Accumulated OCI into Income
|
|||||||||
(Effective Portion)
|
Interest Expense
|
$ | — | $ | (158 | ) | |||
Amount and Location of Loss Recognized in Income on Derivative (Ineffective
|
|||||||||
Portion and Amount Excluded from Effectiveness Testing)
|
Other Income
|
$ | — | $ | — |
March 31,
|
||||||||
2013
|
2012
|
|||||||
Stock options
|
$ | 100 | $ | 128 | ||||
Nonvested stock awards
|
383 | 380 | ||||||
Employee stock purchase plan
|
12 | 11 | ||||||
Non-elective and elective 401(k) matching contribution in stock
|
525 | 652 | ||||||
Director stock ownership plan
|
20 | 15 | ||||||
Total share-based compensation expense
|
$ | 1,040 | $ | 1,186 |
Weighted
|
||||||
Weighted |
Average
|
|||||
Average
|
Remaining
|
|||||
Number of
|
Exercise Price
|
Contractual
|
||||
Shares
|
per Share
|
Term (years)
|
||||
Options outstanding at December 31, 2012
|
107,455
|
$
|
31.23
|
|||
Options granted
|
29,302
|
58.26
|
||||
Options exercised
|
(20,433)
|
25.46
|
||||
Options forfeited
|
(3,601)
|
37.81
|
||||
Options outstanding at March 31, 2013
|
112,723
|
$
|
39.09
|
5.5
|
||
Options exercisable at March 31, 2013
|
48,581
|
$
|
28.01
|
4.5
|
Weighted
|
Weighted
|
|
Weighted
|
|||||||||||||||
Number
|
Average
|
Average
|
Number
|
Average
|
||||||||||||||
Range of
|
Outstanding
|
Contractual
|
Exercise
|
Exercisable
|
Exercise
|
|||||||||||||
Exercise Prices
|
at 3/31/2013
|
Life
|
Price
|
at 3/31/2013
|
Price
|
|||||||||||||
$
|
0.00
|
-
|
$
|
10.00
|
—
|
—
|
$
|
—
|
—
|
$
|
—
|
|||||||
$
|
10.01
|
-
|
$
|
20.00
|
24,858
|
3.8
|
18.82
|
24,858
|
18.82
|
|||||||||
$
|
20.01
|
-
|
$
|
30.00
|
—
|
—
|
—
|
—
|
—
|
|||||||||
$
|
30.01
|
-
|
$
|
40.00
|
56,371
|
5.4
|
37.78
|
23,723
|
37.65
|
|||||||||
$
|
40.01
|
-
|
$
|
50.00
|
2,192
|
6.3
|
46.21
|
—
|
—
|
|||||||||
$
|
50.01
|
-
|
$
|
60.00
|
29,302
|
6.9
|
58.26
|
—
|
—
|
|||||||||
112,723
|
5.5
|
39.09
|
48,581
|
28.01
|
2013
|
||
Number of options granted
|
29,302
|
|
Dividend Yield
|
2.49
|
%
|
Expected Volatility
|
57.28
|
%
|
Risk-free interest rate
|
0.63
|
%
|
Expected term (years)
|
4.0
|
Weighted
|
|||||
Average Grant
|
|||||
Number of
|
Date Fair Value
|
||||
Shares
|
(per share)
|
||||
Nonvested awards, December 31, 2012
|
122,944
|
$
|
31.98
|
||
Granted
|
26,611
|
$
|
58.26
|
||
Vested
|
(35,183)
|
$
|
20.25
|
||
Forfeited
|
(1,761)
|
$
|
37.76
|
||
Nonvested awards, March 31, 2013
|
112,611
|
$
|
41.77
|
Weighted
|
|||||
Average Grant
|
|||||
Number of
|
Date Fair Value
|
||||
units
|
(per unit)
|
||||
Nonvested awards, December 31, 2012
|
2,100
|
$
|
38.13
|
||
Granted
|
1,418
|
$
|
58.26
|
||
Vested
|
—
|
$
|
—
|
||
Forfeited
|
—
|
$
|
—
|
||
Nonvested awards, March 31, 2013
|
3,518
|
$
|
46.24
|
Three Months Ended March 31,
|
||||||||
2013
|
2012
|
|||||||
Basic earnings per common share
|
||||||||
Net income attributable to Quaker Chemical Corporation
|
$ | 13,619 | $ | 12,365 | ||||
Less: income allocated to participating securities
|
(111 | ) | (200 | ) | ||||
Net income available to common shareholders
|
$ | 13,508 | $ | 12,165 | ||||
Basic weighted average common shares outstanding
|
13,001,963 | 12,730,682 | ||||||
Basic earnings per common share
|
$ | 1.04 | $ | 0.96 | ||||
Diluted earnings per common share
|
||||||||
Net income attributable to Quaker Chemical Corporation
|
$ | 13,619 | $ | 12,365 | ||||
Less: income allocated to participating securities
|
(111 | ) | (198 | ) | ||||
Net income available to common shareholders
|
$ | 13,508 | $ | 12,167 | ||||
Basic weighted average common shares outstanding
|
13,001,963 | 12,730,682 | ||||||
Effect of dilutive securities
|
29,937 | 121,210 | ||||||
Diluted weighted average common shares outstanding
|
13,031,900 | 12,851,892 | ||||||
Diluted earnings per common share
|
$ | 1.04 | $ | 0.95 |
Three Months Ended
|
||||||||
March 31,
|
||||||||
2013
|
2012
|
|||||||
Metalworking Process Chemicals
|
||||||||
Net sales
|
$ | 164,936 | $ | 165,975 | ||||
Operating income for reportable segment
|
32,027 | 30,975 | ||||||
Coatings
|
||||||||
Net sales
|
10,746 | 10,523 | ||||||
Operating income for reportable segment
|
2,506 | 2,513 | ||||||
Other Chemical Products
|
||||||||
Net sales
|
511 | 1,140 | ||||||
Operating (loss) income for reportable segment
|
(21 | ) | 142 | |||||
Total
|
||||||||
Net sales
|
176,193 | 177,638 | ||||||
Operating income for reportable segments
|
34,512 | 33,630 | ||||||
Non-operating expenses
|
(16,222 | ) | (16,182 | ) | ||||
Amortization expense
|
(879 | ) | (746 | ) | ||||
Consolidated operating income
|
17,411 | 16,702 | ||||||
Interest expense
|
(744 | ) | (1,174 | ) | ||||
Interest income
|
169 | 123 | ||||||
Other income, net
|
346 | 341 | ||||||
Consolidated income before taxes and equity in net income of associated companies
|
$ | 17,182 | $ | 15,992 |
Accumulated
|
||||||||||||||||||||||||
Capital in
|
Other
|
|||||||||||||||||||||||
Common
|
excess of
|
Retained
|
Comprehensive
|
Noncontrolling
|
||||||||||||||||||||
stock
|
par value
|
earnings
|
Loss
|
interest
|
Total
|
|||||||||||||||||||
Balance at December 31, 2012
|
$ | 13,095 | $ | 94,470 | $ | 215,390 | $ | (41,855 | ) | $ | 8,576 | $ | 289,676 | |||||||||||
Net income
|
— | — | 13,619 | — | 572 | 14,191 | ||||||||||||||||||
Amounts reported in other comprehensive loss
|
— | — | — | 108 | (133 | ) | (25 | ) | ||||||||||||||||
Dividends ($0.245 per share)
|
— | — | (3,219 | ) | — | — | (3,219 | ) | ||||||||||||||||
Share issuance and equity-based compensation plans
|
45 | 936 | — | — | — | 981 | ||||||||||||||||||
Excess tax benefit from stock option exercises
|
— | 369 | — | — | — | 369 | ||||||||||||||||||
Balance at March 31, 2013
|
$ | 13,140 | $ | 95,775 | $ | 225,790 | $ | (41,747 | ) | $ | 9,015 | $ | 301,973 | |||||||||||
Balance at December 31, 2011
|
$ | 12,912 | $ | 89,725 | $ | 180,710 | $ | (28,967 | ) | $ | 6,977 | $ | 261,357 | |||||||||||
Net income
|
— | — | 12,365 | — | 747 | 13,112 | ||||||||||||||||||
Amounts reported in other comprehensive income
|
— | — | — | 4,988 | 291 | 5,279 | ||||||||||||||||||
Dividends ($0.24 per share)
|
— | — | (3,114 | ) | — | — | (3,114 | ) | ||||||||||||||||
Share issuance and equity-based compensation plans
|
39 | (141 | ) | — | — | — | (102 | ) | ||||||||||||||||
Excess tax benefit from stock option exercises
|
— | 1,252 | — | — | — | 1,252 | ||||||||||||||||||
Balance at March 31, 2012
|
$ | 12,951 | $ | 90,836 | $ | 189,961 | $ | (23,979 | ) | $ | 8,015 | $ | 277,784 |
Unrealized
|
||||||||||||||||||||
Currency
|
Defined
|
Change in
|
gain (loss) in
|
|||||||||||||||||
translation
|
benefit
|
fair value of
|
available-for-
|
|||||||||||||||||
adjustments
|
pension plans
|
derivatives
|
sale securities
|
Total
|
||||||||||||||||
Balance at December 31, 2012
|
$ | 3,336 | $ | (46,914 | ) | $ | — | $ | 1,723 | $ | (41,855 | ) | ||||||||
Other comprehensive (loss) income before reclassifications
|
(1,630 | ) | 762 | — | 1,148 | 280 | ||||||||||||||
Amounts reclassified from accumulated other
|
||||||||||||||||||||
comprehensive loss
|
— | 1,056 | — | (494 | ) | 562 | ||||||||||||||
Current period other comprehensive (loss) income
|
(1,630 | ) | 1,818 | — | 654 | 842 | ||||||||||||||
Related tax amounts
|
— | (512 | ) | — | (222 | ) | (734 | ) | ||||||||||||
Net current period other comprehensive (loss) income
|
(1,630 | ) | 1,306 | — | 432 | 108 | ||||||||||||||
Balance at March 31, 2013
|
$ | 1,706 | $ | (45,608 | ) | $ | — | $ | 2,155 | $ | (41,747 | ) | ||||||||
Balance at December 31, 2011
|
$ | 4,709 | $ | (34,260 | ) | $ | (272 | ) | $ | 856 | $ | (28,967 | ) | |||||||
Other comprehensive income (loss) before reclassifications
|
3,757 | (562 | ) | (10 | ) | 1,837 | 5,022 | |||||||||||||
Amounts reclassified from accumulated other
|
||||||||||||||||||||
comprehensive loss
|
— | 750 | 158 | (203 | ) | 705 | ||||||||||||||
Current period other comprehensive income
|
3,757 | 188 | 148 | 1,634 | 5,727 | |||||||||||||||
Related tax amounts
|
— | (131 | ) | (52 | ) | (556 | ) | (739 | ) | |||||||||||
Net current period other comprehensive income
|
3,757 | 57 | 96 | 1,078 | 4,988 | |||||||||||||||
Balance at March 31, 2012
|
$ | 8,466 | $ | (34,203 | ) | $ | (176 | ) | $ | 1,934 | $ | (23,979 | ) |
NP Coil Dexter
|
||||
Industries, S.r.l.
|
||||
Current assets
|
$ | 5,536 | ||
Fixed assets
|
1,211 | |||
Intangibles
|
3,825 | |||
Goodwill
|
1,786 | |||
Other long-term assets
|
783 | |||
Total assets purchased
|
13,141 | |||
Short-term debt
|
(1,186 | ) | ||
Other current liabilities
|
(6,168 | ) | ||
Long-term debt
|
(854 | ) | ||
Other long-term liabilities
|
(1,258 | ) | ||
Present value of hold-back
|
(927 | ) | ||
Total liabilities assumed
|
(10,393 | ) | ||
Cash paid for an acquisition
|
$ | 2,748 |
Metalworking
|
||||||||||||
Process
|
||||||||||||
Chemicals
|
Coatings
|
Total
|
||||||||||
Balance as of December 31, 2012
|
$ | 51,088 | $ | 8,081 | $ | 59,169 | ||||||
Currency translation adjustments
|
79 | — | 79 | |||||||||
Balance as of March 31, 2013
|
$ | 51,167 | $ | 8,081 | $ | 59,248 |
Gross Carrying
|
Accumulated
|
|||||||||||||||
Amount
|
Amortization
|
|||||||||||||||
2013
|
2012
|
2013
|
2012
|
|||||||||||||
Amortized intangible assets
|
||||||||||||||||
Customer lists and rights to sell
|
$ | 33,371 | $ | 32,356 | $ | 8,684 | $ | 8,192 | ||||||||
Trademarks and patents
|
6,778 | 6,760 | 2,732 | 2,548 | ||||||||||||
Formulations and product technology
|
5,278 | 5,278 | 3,501 | 3,423 | ||||||||||||
Other
|
5,463 | 5,467 | 4,101 | 3,989 | ||||||||||||
Total
|
$ | 50,890 | $ | 49,861 | $ | 19,018 | $ | 18,152 |
For the year ended December 31, 2013
|
$ | 3,395 | ||
For the year ended December 31, 2014
|
$ | 3,164 | ||
For the year ended December 31, 2015
|
$ | 3,164 | ||
For the year ended December 31, 2016
|
$ | 2,684 | ||
For the year ended December 31, 2017
|
$ | 2,030 | ||
For the year ended December 31, 2018
|
$ | 2,014 |
Three Months Ended March 31,
|
||||||||||||||||
Other
|
||||||||||||||||
Postretirement
|
||||||||||||||||
Pension Benefits
|
Benefits
|
|||||||||||||||
2013
|
2012
|
2013
|
2012
|
|||||||||||||
Service cost
|
$ | 838 | $ | 624 | $ | 13 | $ | 4 | ||||||||
Interest cost and other
|
1,380 | 1,470 | 56 | 71 | ||||||||||||
Expected return on plan assets
|
(1,478 | ) | (1,375 | ) | — | — | ||||||||||
Actuarial loss amortization
|
981 | 691 | 47 | 31 | ||||||||||||
Prior service cost amortization
|
28 | 28 | — | — | ||||||||||||
Net periodic benefit cost
|
$ | 1,749 | $ | 1,438 | $ | 116 | $ | 106 |
Management’s Discussion and Analysis of Financial Condition and Results of Operations.
|
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 |
·
|
statements relating to our business strategy;
|
·
|
our current and future results and plans; and
|
·
|
statements that include the words “may,” “could,” “should,” “would,” “believe,” “expect,” “anticipate,” “estimate,” “intend,” “plan” or similar expressions.
|
Quantitative and Qualitative Disclosures About Market Risk.
|
Controls and Procedures.
|
(c)
|
(d)
|
|||||||||||||||
Total Number of
|
Maximum
|
|||||||||||||||
Shares Purchased as
|
Number of Shares that
|
|||||||||||||||
(a)
|
(b)
|
Part of
|
May Yet
|
|||||||||||||
Total Number
|
Average
|
Publicly Announced
|
Be Purchased Under the
|
|||||||||||||
of Shares
|
Price Paid
|
Plans
|
Plans or
|
|||||||||||||
Period
|
Purchased (1)
|
Per Share (2)
|
or Programs (3)
|
Programs (3)
|
||||||||||||
January 1 - January 31
|
9,920 | $ | 57.79 | — | 252,600 | |||||||||||
February 1 - February 29
|
— | $ | — | — | 252,600 | |||||||||||
March 1 - March 31
|
1,301 | $ | 61.33 | — | 252,600 | |||||||||||
Total
|
11,221 | $ | 58.20 | — | 252,600 |
(1)
|
All of the 11,221
shares acquired by the Company during the period covered by this report were acquired from employees upon their surrender of previously owned shares in payment of the exercise price of employee stock options exercised, for the payment of taxes upon exercise of employee stock options or for the vesting of restricted stock.
|
(2)
|
The price per share, in each case, represented the closing price of the Company’s common stock on the date of exercise or vesting, as specified by the plan pursuant to which the applicable option or restricted stock was granted.
|
(3)
|
On February 15, 1995, the Board of Directors of the Company authorized a share repurchase program authorizing the repurchase of up to 500,000 shares of Quaker common stock, and, on January 26, 2005, the Board authorized the repurchase of up to an additional 225,000 shares. Under the 1995 action of the Board, 27,600 shares may yet be purchased. Under the 2005 action of the Board, none of the shares authorized has been purchased and, accordingly, all of those shares may yet be purchased. Neither of the share repurchase authorizations has an expiration date.
|
Exhibits
|
*
|
This exhibit is a management contract or compensation plan or arrangement required to be filed as an exhibit.
|
**
|
Pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933 and are deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934 and otherwise are not subject to liability under these Sections.
|
QUAKER CHEMICAL CORPORATION
(Registrant)
|
||||
/s/ Margaret M. Loebl
|
||||
Date: April 29, 2013
|
Margaret M. Loebl, Vice President, Chief Financial Officer and Treasurer (officer duly authorized on behalf of, and principal financial officer of, the Registrant)
|
/s/ A. Steeples
|
||||
Adrian Steeples
|
||||
Date:
|
17/1/2013
|
|||
Quaker Chemical Limited
|
||||
By:
|
/s/ E. ten Duis
|
|||
Date:
|
1-25-13
|
|||
Quaker Chemical (China) Co Limited
|
Acknowledged and approved:
|
|||
Quaker Chemical Corporation
|
||||
By:
|
/s/ J.F. Nieman
|
By:
|
/s/Ronald S. Ettinger
|
|
Date:
|
1/29/2013
|
Date:
|
1/24/13
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Quaker Chemical Corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
/s/ Michael F. Barry
|
Michael F. Barry
|
Chief Executive Officer
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Quaker Chemical Corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
/s/ Margaret M. Loebl
|
Margaret M. Loebl
|
Chief Financial Officer
|
Dated: April 29, 2013
|
/s/ Michael F. Barry |
|
|
Michael F. Barry
|
|||
Chief Executive Officer of Quaker Chemical Corporation
|
Dated: April 29, 2013
|
/s/ Margaret M. Loebl |
|
|
Margaret M. Loebl
|
|||
Chief Financial Officer of Quaker Chemical Corporation
|