Quaker Chemical Corp. (KWR, Financial) filed Quarterly Report for the period ended 2010-09-30.
Quaker Chemical Corp. has a market cap of $417.71 million; its shares were traded at around $37.34 with a P/E ratio of 13.79 and P/S ratio of 0.93. The dividend yield of Quaker Chemical Corp. stocks is 2.53%. Quaker Chemical Corp. had an annual average earning growth of 6.9% over the past 5 years.KWR is in the portfolios of Chuck Royce of Royce& Associates.
Net cash flows used in investing activities were $9.4 million in the first nine months of 2010, compared to $3.6 million of cash used in investing activities in the first nine months of 2009. Payments related to acquisitions were the primary driver in the change in cash flows used in investing activities. During the third quarter of 2010, the Company completed the acquisition of D.A. Stuarts U.S. aluminum hot rolling business from Houghton International for $6.9 million, while the first quarter of 2009 included the final $1.0 million payment related to the 2005 acquisition of the remaining 40% interest in the Companys Brazilian joint venture. In addition, the 2009 proceeds from the disposition of land in Europe were offset by lower capital expenditures in 2010 as the Company completed its Middletown, Ohio expansion project. Reductions in the use of restricted cash related to the expansion also affected the investing cash flow comparisons.
In June 2010, the Company amended its primary credit facility to increase the maximum principal amount available for revolving credit borrowings from $125.0 million to $175.0 million. This amount can be increased to $225.0 million at the Companys option if the lenders agree to increase their commitments and the Company satisfies certain conditions. At September 30, 2010 and December 31, 2009, the Company had approximately $40.0 million and $46.4 million, respectively, outstanding under its credit facilities. The amendment also extended the maturity date of the Companys credit line from August 2012 to June 2014 and amended certain acquisition and other covenants, including a reduced interest rate spread and a new interest rate tier for leverage ratios below one times EBITDA that would allow for a further interest rate spread reduction. The Companys access to this credit is largely dependent on its consolidated leverage ratio covenant, which cannot exceed 3.5 to 1, and at September 30, 2010 and December 31, 2009, the consolidated leverage ratio was below 2.0 to 1. The Company has entered into interest rate swaps with a combined notional value of $30.0 million as of September 30, 2010 in order to fix the interest rate on a portion of its variable rate debt. Outstanding financial derivative instruments may expose the Company to credit loss in the event of nonperformance by the counterparties to the agreements. To manage credit risk, the Company limits its exposure to any single counterparty. However, the Company does not expect any of the counterparties to fail to meet their obligations.
The Company incurred a final charge related to the former CEOs supplemental retirement plan of approximately $1.3 million, or $0.08 per diluted share, in the third quarter of 2010, compared to a charge of $1.3 million, or $0.07 per diluted share, in the third quarter of 2009.
In the first quarter of 2009, the Company implemented a restructuring program totaling $2.3 million, or approximately $0.14 per diluted share, while 2010 includes a net charge of $3.6 million, or $0.21 per diluted share, for the contingency noted above. The Company incurred a final charge related to the former CEOs supplemental retirement plan of approximately $1.3 million, or $0.08 per diluted share, in the third quarter of 2010, compared to a charge of $2.4 million, or $0.14 per diluted share, in the first nine months of 2009.
Interest Rate Risk. Quakers exposure to market rate risk for changes in interest rates relates primarily to its short and long-term debt. Most of Quakers debt is negotiated at market rates which can be either fixed or variable. Accordingly, if interest rates rise significantly, the cost of debt to Quaker will increase. This can have an adverse effect on Quaker, depending on the extent of Quakers borrowings. As of September 30, 2010, Quaker had $40.0 million in borrowings under its credit facilities, compared to $46.4 million at December 31, 2009, at a weighted average variable borrowing rate of approximately 2.54% (LIBOR plus a spread). The Company uses derivative financial instruments primarily for purposes of hedging exposures to fluctuations in interest rates. The Company does not enter into derivative contracts for trading or speculative purposes. The Company has entered into interest rate swaps in order to fix the interest rate on a portion of its variable rate debt. The swaps had a combined notional value of $30.0 million and $40.0 million and a fair value of $(1.4) million and $(2.2) million at September 30, 2010 and December 31, 2009, respectively. As of the date of this Report, the Company is receiving a LIBOR rate and paying an average fixed rate of approximately 5% on its interest rate swaps. Three of the Companys swaps with a notional value of $15.0 million mature in 2010, while the remaining three swaps with a notional value of $15.0 million mature in 2012. The counterparties to the swaps are major financial institutions. Outstanding financial derivative instruments expose the Company to credit loss in the event of nonperformance by the counterparties to the agreements. To manage credit risk, the Company limits its exposure to any single counterparty. However, the Company does not expect any of the counterparties to fail to meet their obligations. Reference is made to the information included in Note 6 of the Notes to Condensed Consolidated Financial Statements.
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Quaker Chemical Corp. has a market cap of $417.71 million; its shares were traded at around $37.34 with a P/E ratio of 13.79 and P/S ratio of 0.93. The dividend yield of Quaker Chemical Corp. stocks is 2.53%. Quaker Chemical Corp. had an annual average earning growth of 6.9% over the past 5 years.KWR is in the portfolios of Chuck Royce of Royce& Associates.
Highlight of Business Operations:
Quakers cash and cash equivalents increased to $27.1 million at September 30, 2010 from $25.1 million at December 31, 2009. The $2.0 million increase resulted primarily from $19.5 million of cash provided by operating activities, $9.4 million of cash used in investing activities, $8.4 million of cash used in financing activities and a $0.3 million increase from the effect of exchange rates on cash.Net cash flows used in investing activities were $9.4 million in the first nine months of 2010, compared to $3.6 million of cash used in investing activities in the first nine months of 2009. Payments related to acquisitions were the primary driver in the change in cash flows used in investing activities. During the third quarter of 2010, the Company completed the acquisition of D.A. Stuarts U.S. aluminum hot rolling business from Houghton International for $6.9 million, while the first quarter of 2009 included the final $1.0 million payment related to the 2005 acquisition of the remaining 40% interest in the Companys Brazilian joint venture. In addition, the 2009 proceeds from the disposition of land in Europe were offset by lower capital expenditures in 2010 as the Company completed its Middletown, Ohio expansion project. Reductions in the use of restricted cash related to the expansion also affected the investing cash flow comparisons.
In June 2010, the Company amended its primary credit facility to increase the maximum principal amount available for revolving credit borrowings from $125.0 million to $175.0 million. This amount can be increased to $225.0 million at the Companys option if the lenders agree to increase their commitments and the Company satisfies certain conditions. At September 30, 2010 and December 31, 2009, the Company had approximately $40.0 million and $46.4 million, respectively, outstanding under its credit facilities. The amendment also extended the maturity date of the Companys credit line from August 2012 to June 2014 and amended certain acquisition and other covenants, including a reduced interest rate spread and a new interest rate tier for leverage ratios below one times EBITDA that would allow for a further interest rate spread reduction. The Companys access to this credit is largely dependent on its consolidated leverage ratio covenant, which cannot exceed 3.5 to 1, and at September 30, 2010 and December 31, 2009, the consolidated leverage ratio was below 2.0 to 1. The Company has entered into interest rate swaps with a combined notional value of $30.0 million as of September 30, 2010 in order to fix the interest rate on a portion of its variable rate debt. Outstanding financial derivative instruments may expose the Company to credit loss in the event of nonperformance by the counterparties to the agreements. To manage credit risk, the Company limits its exposure to any single counterparty. However, the Company does not expect any of the counterparties to fail to meet their obligations.
The Company incurred a final charge related to the former CEOs supplemental retirement plan of approximately $1.3 million, or $0.08 per diluted share, in the third quarter of 2010, compared to a charge of $1.3 million, or $0.07 per diluted share, in the third quarter of 2009.
In the first quarter of 2009, the Company implemented a restructuring program totaling $2.3 million, or approximately $0.14 per diluted share, while 2010 includes a net charge of $3.6 million, or $0.21 per diluted share, for the contingency noted above. The Company incurred a final charge related to the former CEOs supplemental retirement plan of approximately $1.3 million, or $0.08 per diluted share, in the third quarter of 2010, compared to a charge of $2.4 million, or $0.14 per diluted share, in the first nine months of 2009.
Interest Rate Risk. Quakers exposure to market rate risk for changes in interest rates relates primarily to its short and long-term debt. Most of Quakers debt is negotiated at market rates which can be either fixed or variable. Accordingly, if interest rates rise significantly, the cost of debt to Quaker will increase. This can have an adverse effect on Quaker, depending on the extent of Quakers borrowings. As of September 30, 2010, Quaker had $40.0 million in borrowings under its credit facilities, compared to $46.4 million at December 31, 2009, at a weighted average variable borrowing rate of approximately 2.54% (LIBOR plus a spread). The Company uses derivative financial instruments primarily for purposes of hedging exposures to fluctuations in interest rates. The Company does not enter into derivative contracts for trading or speculative purposes. The Company has entered into interest rate swaps in order to fix the interest rate on a portion of its variable rate debt. The swaps had a combined notional value of $30.0 million and $40.0 million and a fair value of $(1.4) million and $(2.2) million at September 30, 2010 and December 31, 2009, respectively. As of the date of this Report, the Company is receiving a LIBOR rate and paying an average fixed rate of approximately 5% on its interest rate swaps. Three of the Companys swaps with a notional value of $15.0 million mature in 2010, while the remaining three swaps with a notional value of $15.0 million mature in 2012. The counterparties to the swaps are major financial institutions. Outstanding financial derivative instruments expose the Company to credit loss in the event of nonperformance by the counterparties to the agreements. To manage credit risk, the Company limits its exposure to any single counterparty. However, the Company does not expect any of the counterparties to fail to meet their obligations. Reference is made to the information included in Note 6 of the Notes to Condensed Consolidated Financial Statements.
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