Back to GetFilings.com
FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
/ X / ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1993
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)
A Pennsylvania Corporation No. 23-0993790
------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Elm and Lee Streets, Conshohocken, Pennsylvania 19428
-----------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 610-832-4000
------------
Securities registered pursuant to Section 12(b) of the Act:
NAME OF EACH EXCHANGE ON
TITLE OF EACH CLASS WHICH REGISTERED
------------------- ------------------------
None
Securities registered pursuant to Section 12(g) of the Act:
COMMON STOCK, $1.00 PAR VALUE
-----------------------------
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 and (2) has been subject to such filing
requirements for the past 90 days. Yes / X / No / /
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [ ]
State the aggregate market value of the voting stock held by
non-affiliates of the Registrant. (The aggregate market value is computed by
reference to the last reported sale price on the Nasdaq National Market on
March 18, 1994): $166,425,298.
Indicate the number of shares outstanding of each of the Registrant's
classes of common stock, as of the latest practicable date: 9,255,506 shares
of Common Stock, $1.00 Par Value, as of March 18, 1994.
DOCUMENTS INCORPORATED BY REFERENCE
(1) Portions of the Registrant's Annual Report to Shareholders for the year
ended December 31, 1993 are incorporated into Parts I and II.
(2) Portions of the Registrant's definitive Proxy Statement dated March 31,
1994, in connection with the Annual Meeting of Shareholders to be held on
May 4, 1994, are incorporated into Part III.
The exhibit index is located on page 18.
PART I
As used in this Report, the term "Quaker," unless the context otherwise
requires, means Quaker Chemical Corporation, its subsidiaries, and associated
companies.
ITEM 1. BUSINESS.
--------
General Description
- -------------------
Quaker develops, produces, and markets a broad range of formulated
chemical specialty products for various heavy industrial, institutional, and
manufacturing applications. Quaker's principal products include: (i) rolling
lubricants (used by manufacturers of steel in the hot and cold rolling of
steel); (ii) corrosion preventives (used by steel and metalworking customers
to protect metal during manufacture, storage, and shipment); (iii) metal
finishing compounds (used to prepare metal surfaces for special treatments
such as galvanizing and tin plating and to prepare metal for further
processing); (iv) machining and grinding compounds (used by metalworking
customers in cutting, shaping, and grinding metal parts which require special
treatment to enable them to tolerate the manufacturing process); (v) forming
compounds (used to facilitate the drawing and extrusion of metal products);
(vi) paper production products (used as defoamers, release agents, softeners,
debonders, and dispersants); (vii) hydraulic fluids (used by steel,
metalworking, and other customers to operate hydraulically activated
equipment); (viii) products for the removal of hydrogen sulfide in various
industrial applications. During 1993, Quaker developed programs to provide
recycling and chemical management services.
In 1994, Quaker entered into an agreement for the creation of a
joint venture which is expected to enhance the Total Fluid Management (TFM)
service capabilities of Quaker. An initial cash investment of
approximately $3,000,000 has been made with additional investments expected
based on the growth of the venture.
Other specialty products and services are produced and marketed by
Quaker's domestic subsidiaries. AC Products, Inc., Quaker Construction
Products, Inc., QSC Products, Ltd., and Multi-Chemical Products, Inc.
manufacture and/or sell sealants and coatings for aerospace, construction, and
industrial use. Selby, Battersby & Co. manufactures and sells trowel-applied
flooring systems which derive their specialty characteristics from the
different resins used and the methods of their application.
During the third quarter 1992, as part of a plan to exit from the
petroleum production chemicals market, Quaker entered into an agreement to
sell certain of its petroleum production chemical operations assets, the
principal component of which is technology used in the removal of hydrogen
sulfide and organic sulfides from liquid and gaseous streams, embodied in the
SULFA-SCRUB(R) product series. This transaction was consummated in 1993.
Quaker acquired in May 1993 a French producer of metalworking fluids at a
price of approximately French Francs 53,000,000 (approximately US
$10,700,000), to reinforce Quaker's existing metalworking operations in
Europe.
2
Substantially all of Quaker's sales worldwide are made directly through
its own sales forces. Quaker salesmen visit the plants of customers regularly
and through training and experience identify production needs which can be
resolved or alleviated either by adapting Quaker's existing products or by new
formulations developed in Quaker's laboratories. Salesmen may call upon
Quaker's regional managers, product managers, and members of its laboratory
staff for assistance in obtaining and setting up product tests and evaluating
the results of such tests. In 1993, certain products were also sold in
Canada, Korea, India, and Argentina by exclusive licensees under long-term
royalty agreements.
Generally, separate manufacturing facilities of a single customer are
served by different salesmen.
Competition
- -----------
The chemical specialty industry is composed of a number of companies of
similar size as well as companies larger and smaller than Quaker. Quaker
cannot readily determine its precise position in the industry. Many
competitors are in fewer and more specialized product classifications or
provide different levels of technical services in terms of specific
formulations for individual customers. Competition in the industry is based
primarily on the ability to provide products which meet the needs of the
customer and render technical services and laboratory assistance to customers
and, to a lesser extent, on price.
Major Customers
- ---------------
During 1993, Quaker's five largest customers (each composed of multiple
subsidiaries or divisions with semi-autonomous purchasing authority) accounted
for approximately 16% of its consolidated net sales with the largest of these
customers accounting for approximately 4% of consolidated net sales. No one
subsidiary or division of these five customers accounted for more than 3% of
consolidated net sales. During the same period, approximately 46% of
consolidated net sales were made to customers engaged in the manufacture of
cold-rolled steel.
Raw Materials
- -------------
Quaker uses over 500 raw materials, including mineral oils, fats and fat
derivatives, ethylene derivatives, solvents, surface active agents,
chlorinated paraffinic compounds, and a wide variety of organic and inorganic
compounds. In 1993, only one raw material accounted for as much as 11% of the
total cost of Quaker's raw material purchases. Quaker has multiple sources of
supply for most materials, and Management believes that the failure of any
single supplier would not have a material adverse effect upon its business.
3
Patents and Trademarks
- ----------------------
Quaker has a limited number of patents and patent applications,
including patents issued, applied for, or acquired in the United States and in
various foreign countries, some of which may prove to be material to its
business. Principal reliance is placed upon Quaker's proprietary formulae and
the application of its skills and experience to meet customer needs. Quaker's
products are identified by trademarks which are registered throughout its
marketing area. Quaker makes little use of advertising but relies heavily
upon its reputation in the markets which it serves.
Research and Development -- Laboratories
- ----------------------------------------
Quaker's research and development laboratories support its sales
organization. Accordingly, the activities of Quaker's laboratory staff are
directed primarily toward applied research and development since the nature of
Quaker's business requires continuing modification and improvement of
formulations to provide chemical specialties to satisfy customer requirements.
Quaker maintains quality control laboratory facilities in each of its
manufacturing locations. In addition, Quaker maintains in Conshohocken,
Pennsylvania, laboratory facilities which are devoted primarily to applied
research and development.
Most of Quaker's affiliates also have research and development facilities.
Although not as complete as the Conshohocken laboratories, these facilities
are generally sufficient for the requirements of the customers being served.
If problems are encountered which cannot be resolved by local research and
development facilities, such problems are referred to the Conshohocken
laboratory staff.
Approximately 195 persons, of whom 98 have B.S. degrees and 44 have B.S.
and advanced degrees, are employed in Quaker's laboratories.
Number of Employees
- -------------------
On December 31, 1993, Quaker had 1,006 full-time employees, of whom 369
were employed by the parent company, 548 were employed by its international
subsidiaries and associates, and 89 were employed by all domestic
subsidiaries.
Product Classification
- ----------------------
Incorporated by reference is the information concerning product
classification by markets served appearing under the caption "Supplemental
Financial Information" on page 27 of the Registrant's
4
1993 Annual Report to Shareholders, the incorporated portions of which are
included as Exhibit 13 to this Report.
International Activities
- ------------------------
Incorporated by reference is the information concerning international
activities appearing in Note 9 to Notes to Consolidated Financial Statements
and under the caption "General" of the Operations section of Management's
Discussion and Analysis of Financial Condition and Results of Operations which
appear on pages 30 and 31, respectively, of the Registrant's 1993 Annual
Report to Shareholders, the incorporated portions of which are included as
Exhibit 13 to this Report.
ITEM 2. PROPERTIES.
----------
Quaker's principal facilities in the United States are located in
Conshohocken, Pennsylvania and Detroit, Michigan. Quaker also owns a
non-operating facility in Pomona, California. Quaker's international
subsidiaries own facilities in Woodchester, England; Uithoorn, The
Netherlands; Verona, Italy; Villeneuve, France; Santa Perpetua de Mogoda,
Spain; and Seven Hills, N.S.W., Australia. Quaker Construction Products, Inc.
has a manufacturing facility in Sapulpa, Oklahoma that also serves QSC
Products, Ltd. and Selby, Battersby & Co. All of these facilities are owned
mortgage free. Financing for the Corporate Technical Center in Conshohocken,
Pennsylvania was arranged through the use of industrial revenue and
development bonds with an outstanding balance at December 31, 1993 of
$5,000,000.
Quaker's aforementioned facilities consist of various manufacturing,
administrative, warehouse, and laboratory buildings. Substantially all of the
buildings are of fire-resistant construction and are equipped with sprinkler
systems. All facilities are primarily of masonry and/or steel construction
and are adequate and suitable for Quaker's present operations. The Company
has a program to identify needed capital improvements which will be
implemented as Management considers necessary or desirable. Most locations
have various numbers of raw material storage tanks ranging from six to 63
having a capacity from 500 to 80,000 gallons each and processing or
manufacturing vessels ranging in capacity from 50 to 12,000 gallons each.
In order to facilitate compliance with applicable federal, state, and
local statutes and regulations relating to occupational health and safety and
protection of the environment, the Company has implemented a program of site
assessment, currently directed primarily to facilities in the United States
for the purpose of identifying capital expenditures or other actions that may
be necessary to comply with such requirements. The program includes periodic
inspections of each facility in the United States by Quaker and/or independent
environmental experts, as well as ongoing inspections by on-site personnel.
Such inspections are addressed
5
to operational matters, record keeping, reporting requirements, and
capital improvements. In 1993, capital expenditures directed solely or
primarily to regulatory compliance amounted to approximately
$1,000,000.
Quaker's executive offices are located in a four-story building containing
a total of approximately 47,000 square feet. A corporate technical center
containing approximately 28,700 square feet houses the laboratory facility.
Both of these facilities are adjacent to Quaker's manufacturing facility in
Conshohocken.
Multi-Chemical Products, Inc. has a ten-year lease on its facility in
Fontana, California which expires in 2001. AC Products, Inc. has a ten-year
lease on its facility in Placentia, California that expires in 1997.
Quaker's Mexican associate (40% owned) owns a plant in Monterrey, Mexico.
ITEM 3. LEGAL PROCEEDINGS.
-----------------
The Company is a party to proceedings, cases, and requests for information
from, and negotiations with, various claimants and federal and state agencies
relating to various matters including environmental matters, none of which are
expected to result in monetary sanctions in any amount or in awards that would
have a material adverse effect on the Company's financial condition.
Reference is made to Note 11 to Notes to Consolidated Financial Statements
which appears on page 26 in the Registrant's 1993 Annual Report to
Shareholders, the incorporated portions of which are included as Exhibit 13 to
this report, for information concerning pending asbestos-related cases against
a subsidiary.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
---------------------------------------------------
No matters were submitted to a vote of security holders during the last
quarter of the period covered by this Report.
6
ITEM 4(A). EXECUTIVE OFFICERS OF THE REGISTRANT.
------------------------------------
YEAR FIRST
ELECTED AS
AN EXECUTIVE
NAME OFFICE (SINCE) AGE OFFICER
---- -------------- --- ------------
Peter A. Benoliel Chairman of the Board (1980) 62 1963
S. W. W. Lubsen President (1988) and Chief 50 1988
Executive Officer (1993)
John E. Burrows, Jr. Vice President-North America 47 1990
(1992)
Jose Luiz Bregolato Vice President-South America 48 1993
(1993)
Ira R. Dolich Vice President-Quality and 58 1981
Training (1990)
(Retired December 31, 1993)
William G. Hamilton Corporate Treasurer (1985) 57 1985
(Retired December 31, 1993)
Marcus C. J. Meijer Vice President-Europe (1990) 46 1990
Clifford E. Montgomery Vice President-Human Resources 46 1990
(1990)
Karl H. Spaeth Vice President (1981) and 65 1972
Corporate Secretary (1972)
Joseph F. Spanier Vice President (1990), 47 1985
Corporate Controller (1985),
and Corporate Treasurer (1994)
All of the Executive Officers with the exception of Mr. Bregolato, Mr.
Meijer, Mr. Burrows, and Mr. Montgomery have served as an officer of the
Registrant for more than the past five years. Prior to being elected Chief
Executive Officer of the Registrant, Mr. Lubsen served as Managing Director of
Quaker Chemical B.V., a position to which he was appointed in 1984, and
President and Chief Operating Officer to which he was elected in 1988. Prior
to his election as an officer of the Registrant, Mr. Bregolato served as
Financial Consultant and Administrative Director of Fabrica Carioca de
Catalisadores, S.A. to which he was appointed in 1985. Prior to his election
as an officer of the Registrant, Mr. Meijer served as Managing Director of
Quaker Chemical B.V. to which he was appointed in 1988. Prior to that, he
served as President of a Brazilian subsidiary and subsequently as Commercial
Director, Chemical
7
Division of the Akzo N.V. group. Prior to his election as an officer of
the Registrant, Mr. Burrows served as Division Manager, Marine Colloids
Division of FMC Corporation, a position to which he was appointed in 1986.
Prior to being elected Vice President-Human Resources, Mr. Montgomery served
as Manager of Human Resources, General Electric's Worldwide Marketing and
Product Management Organization, and, prior to that, he served as Director,
Human Resources, GE Plastics Europe. Mr. Spanier was elected Treasurer
effective January 1, 1994 on the retirement of Mr. Hamilton.
There is no family relationship between any of the Registrant's
Executive Officers. Each Officer is elected for a term of one year.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND
RELATED STOCKHOLDER MATTERS.
-----------------------------------------
Incorporated by reference is the information appearing under the caption
"Stock Market and Related Security Holder Matters" on page 28 of the
Registrant's 1993 Annual Report to Shareholders, the incorporated portions of
which are included as Exhibit 13 to this Report.
ITEM 6. SELECTED FINANCIAL DATA.
-----------------------
Incorporated by reference is the information appearing under the caption
"Selected Financial Information" on page 29 of the Registrant's 1993 Annual
Report to Shareholders, the incorporated portions of which are included as
Exhibit 13 to this Report.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.
-------------------------------------------------
Incorporated by reference is the information appearing under the caption
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" on pages 30 and 31 of the Registrant's 1993 Annual Report to
Shareholders, the incorporated portions of which are included as Exhibit 13 to
this Report.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
-------------------------------------------
Incorporated by reference is the information appearing on pages 14 through
27 of the Registrant's 1993 Annual Report to Shareholders, the incorporated
portions of which are included as Exhibit 13 to this Report.
8
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURE.
---------------------------------------------
None.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
--------------------------------------------------
Incorporated by reference is the information beginning immediately
following the caption "Election of Directors" to, but not including, the
caption "Executive Compensation" contained in the Registrant's definitive
Proxy Statement to be filed no later than 120 days after the close of its
fiscal year ended December 31, 1993 and the information appearing in Item 4(a)
of this Report. Based on the Company's review of certain reports filed
with the Securities and Exchange Commission pursuant to Section 16(a) of the
Securities Exchange Act of 1934, as amended, and written representations
of the Company's officers and directors, the Company believes that all of
such reports were filed on a timely basis, except for one filing on Form 4
covering one transaction each for Mr. Benoliel and Mr. Delattre.
ITEM 11. EXECUTIVE COMPENSATION.
----------------------
Incorporated by reference is the information beginning immediately
following the caption "Executive Compensation" to, but not including, the
caption "Compensation/Management Development Committee and Long-Term
Performance Incentive Plan Committee Report on Executive Compensation"
contained in the Registrant's definitive Proxy Statement to be filed no later
than 120 days after the close of its fiscal year ended December 31, 1993.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT.
-----------------------------------------------
Incorporated by reference is the information beginning immediately
following the caption "Security Ownership of Certain Beneficial Owners and
Management" to, but not including, the caption "Election of Directors"
contained in the Registrant's definitive Proxy Statement to be filed no later
than 120 days after the close of its fiscal year ended December 31, 1993.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
----------------------------------------------
No information is required to be provided in response to this Item 13.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND
REPORTS ON FORM 8-K.
--------------------------------------------
(a) Exhibits and Financial Statement Schedules
9
1. FINANCIAL STATEMENTS
The following is a list of the Financial State-
ments which have been incorporated by reference from
the Registrant's Annual Report to Shareholders for the
fiscal year ended December 31, 1993, as set forth in
Item 8:
Consolidated Statement of Operations
Consolidated Statement of Cash Flows
Consolidated Balance Sheet
Notes to Consolidated Financial Statements
Report of Independent Accountants
2. FINANCIAL STATEMENT SCHEDULES
The following is a list of the Financial State-
ment Schedules filed herewith, all of which should be
read in conjunction with the financial statements
listed in Item 14(a) 1, above:
Report of Independent Accountants on Financial
Statement Schedules
Schedule V-Property, plant, and equipment
Schedule VI-Accumulated depreciation of proper-
ty, plant, and equipment
Schedule VIII-Valuation and qualifying accounts
Schedule IX-Short-term borrowings
All other schedules are omitted because they are
not applicable or the required information is shown in
the financial statements or notes thereto.
Financial statements of 50% or less owned
companies have been omitted because none of the
companies meets the criteria requiring inclusion of
such statements.
3. EXHIBITS (NUMBERED IN ACCORDANCE WITH ITEM 601 OF
REGULATION S-K)
10
3(a)--Articles of Incorporation.
Incorporated by reference to Exhibit
3(a) to Form 10-Q as filed by the Regis-
trant for the Quarter ended March 31,
1987.
3(b)--By-Laws.
Incorporated by reference to Exhibit 3(b)
to Form 10-Q as filed by the Registrant
for the Quarter ended March 31, 1987.
3(c)--Amendment to Section 3.13 of the By-Laws
dated May 2, 1990 and Amendment to Sec-
tion 8.1 of the By-Laws dated July 11,
1990. Incorporated by reference to Exhib-
it 3(c) as filed by Registrant with Form
10-K for the year 1990.
4 --Shareholder Rights Plan. Incorporated by
reference to Form 8-K as filed by the
Registrant, February 20, 1990.
10(a)--Long-Term Performance Incentive Plan as
approved May 5, 1993.
10(b)--Employment agreement by and between the
Registrant and Peter A. Benoliel, as
amended July 1, 1989. Incorporated by
reference to Exhibit 10(b) as filed by
Registrant with Form 10-K for the year
1989.*
10(c)--Employment agreement by and between the
Registrant and S. W. W. Lubsen. Incor-
porated by reference to Exhibit 10(c) as
filed by Registrant with Form 10-K for
the year 1989.*
10(d)--Restricted Stock and Cash Bonus Plan and
Agreement by and between the Registrant
and S. W. W. Lubsen. Incorporated by
reference to Exhibit 10(d) as filed by
Registrant with Form 10-K for the year
1989.*
10(e)--Employment agreement by and between Reg-
istrant and John E. Burrows, Jr. Incor-
porated by reference to Exhibit 10(h) as
filed by Registrant with Form 10-K for
the year 1990.*
10(f)--Employment agreement by and between
Registrant and Clifford E. Montgomery.
Incorporated by reference to Exhibit
10(i) as filed by Registrant with Form
10-K for the year 1990.*
10(g)--Employment agreement by and between
Registrant and Joseph F. Spanier. Incor-
porated by reference to Exhibit 10(g) as
filed by Registrant with Form 10-K for
the year 1992.*
11
10(h)--Documents constituting employment contract
by and between Quaker Chemical Europe B.V.
and M. C. J. Meijer.*
10(i)--Documents constituting retirement agreement
by and between Registrant and Ira R.
Dolich.*
13 --Portions of the 1993 Annual Report to
Shareholders incorporated by reference.
21 --Subsidiaries and Affiliates of the
Registrant.
23 --Consent of Independent Accountants.
* A management contract or compensatory plan or arrange-
ment required to be filed as an exhibit to this
report.
(b) Reports on Form 8-K.
No reports on Form 8-K were filed by the Registrant
during the last quarter of the period covered by this
Report.
(c) The exhibits required by Item 601 of Regulation S-K filed
as part of this Report or incorporated herein by refer-
ence are listed in subparagraph (a)(3) of this Item 14.
(d) The financial statement schedules filed as part of this
Report are listed in subparagraph (a)(2) of this Item 14.
12
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF SECTION 13 OR 15(d) 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: March 30, 1994 By: S. W. W. LUBSEN
--------------------------------
S. W. W. Lubsen
President and Chief Executive Officer
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, THIS
REPORT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS ON BEHALF OF THE
REGISTRANT AND IN THE CAPACITIES AND ON THE DATES INDICATED.
SIGNATURE CAPACITY DATE
--------- -------- ----
PETER A. BENOLIEL
- ------------------------------ Director March 30, 1994
Peter A. Benoliel,
Chairman of the Board
JOSEPH F. SPANIER
- ------------------------------ Principal Financial March 30, 1994
Joseph F. Spanier, Vice and Accounting Officer
President, Corporate
Controller, and Corporate
Treasurer
SIGISMUNDUS W. W. LUBSEN
- ------------------------------ Principal Executive March 30, 1994
Sigismundus W. W. Lubsen Officer and Director
President and Chief Executive
Officer
- ------------------------------ Director
Joseph B. Anderson, Jr.
PATRICIA C. BARRON
- ------------------------------ Director March 30, 1994
Patricia C. Barron
WILLIAM L. BATCHELOR
- ------------------------------ Director March 30, 1994
William L. Batchelor
- ------------------------------ Director
Lennox K. Black
EDWIN J. DELATTRE
- ------------------------------ Director March 30, 1994
Edwin J. Delattre
FRANCIS J. DUNLEAVY
- ------------------------------ Director March 30, 1994
Francis J. Dunleavy
ROBERT P. HAUPTFUHRER
- ------------------------------ Director March 30, 1994
Robert P. Hauptfuhrer
FREDERICK HELDRING
- ------------------------------ Director March 30, 1994
Frederick Heldring
RONALD J. NAPLES
- ------------------------------ Director March 30, 1994
Ronald J. Naples
ALEX SATINSKY
- ------------------------------ Director March 30, 1994
Alex Satinsky
- ------------------------------ Director
D. Robert Yarnall, Jr.
13
REPORT OF INDEPENDENT ACCOUNTANTS ON
FINANCIAL STATEMENT SCHEDULES
To the Shareholders and Board of Directors
Quaker Chemical Corporation
Our audits of the consolidated financial statements referred to in our
report dated February 18, 1994 appearing on page 26 of the 1993 Annual Report
to Shareholders of Quaker Chemical Corporation (which report and financial
statements are incorporated by reference in this Annual Report on Form 10-K)
also included an examination of the Financial Statement Schedules listed in
Item 14(a) of this Form 10-K. In our opinion, these Financial Statement
Schedules present fairly, in all material respects, the information set forth
therein when read in conjunction with the related consolidated financial
statements.
PRICE WATERHOUSE
Thirty South Seventeenth Street
Philadelphia, Pennsylvania 19103
February 18, 1994
14
QUAKER CHEMICAL CORPORATION
SCHEDULE V -- PROPERTY, PLANT AND EQUIPMENT
YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
BALANCE AT ADDITIONS RETIREMENTS OTHER BALANCE AT
BEGINNING AT OR CHANGES, ADD END OF
CLASSIFICATION OF PERIOD COST SALES (DEDUCT)(1) PERIOD
- --------------- ---------- --------- ----------- ------------ ----------
YEAR ENDED DECEMBER 31, 1993
Land........... $ 6,042,000 $ 144,000 $ (61,000) $ 315,000 $ 6,440,000
Buildings and
improvements. 32,873,000 2,234,000 (1,261,000) 1,744,000 35,590,000
Machinery and
equipment.... 57,306,000 6,174,000 (1,295,000) 881,000 63,066,000
Construction
in progress.. 1,477,000 408,000 95,000 1,980,000
----------- ----------- ----------- ----------- ------------
$97,698,000 $ 8,960,000 $(2,617,000) $ 3,035,000 $107,076,000
=========== =========== =========== =========== ============
YEAR ENDED DECEMBER 31, 1992
Land........... $ 3,169,000 $ 488,000 $ 2,385,000 $ 6,042,000
Buildings and
improvements. 31,284,000 355,000 $ (6,000) 1,240,000 32,873,000
Machinery and
equipment.... 52,474,000 6,257,000 (3,506,000) 2,081,000 57,306,000
Construction
in progress.. 2,077,000 126,000 (726,000) 1,477,000
----------- ----------- ----------- ----------- ------------
$89,004,000 $ 7,226,000 $(3,512,000) $ 4,980,000 $ 97,698,000
=========== =========== =========== =========== ============
YEAR ENDED DECEMBER 31, 1991
Land........... $ 3,152,000 $ (43,000) $ 60,000 $ 3,169,000
Buildings and
improvements. 29,414,000 $ 332,000 (659,000) 2,197,000 31,284,000
Machinery and
equipment.... 48,385,000 2,567,000 (2,048,000) 3,570,000 52,474,000
Construction
in progress.. 2,746,000 5,521,000 (6,190,000) 2,077,000
----------- ----------- ----------- ----------- ------------
$83,697,000 $ 8,420,000 $(2,750,000) $ (363,000) $ 89,004,000
=========== =========== =========== =========== ============
- ---------------
(1) Represents primarily companies acquired and fluctuations resulting
from the translation of foreign currencies in 1993 and 1992, and
fluctuations resulting from the translation of foreign currencies in 1991.
15
QUAKER CHEMICAL CORPORATION
SCHEDULE VI -- ACCUMULATED DEPRECIATION
YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
BALANCE AT ADDITIONS RETIREMENTS OTHER BALANCE AT
BEGINNING AT OR CHANGES, ADD END OF
CLASSIFICATION OF PERIOD COST SALES (DEDUCT)(1) PERIOD
- --------------- ---------- --------- ----------- ------------ ----------
YEAR ENDED DECEMBER 31, 1993
Buildings and
improvements. $12,144,000 $ 1,203,000 $ (560,000) $ (296,000) $ 12,491,000
Machinery and
equipment.... 33,375,000 5,342,000 (578,000) (105,000) 38,034,000
----------- ----------- ----------- ----------- ------------
$45,519,000 $ 6,545,000 $(1,138,000) $ (401,000) $ 50,525,000
=========== =========== =========== =========== ============
YEAR ENDED DECEMBER 31, 1992
Buildings and
improvements. $11,105,000 $ 1,183,000 $ (6,000) $ (138,000) $ 12,144,000
Machinery and
equipment.... 29,238,000 5,244,000 (1,864,000) 757,000 33,375,000
----------- ----------- ----------- ----------- ------------
$40,343,000 $ 6,427,000 $(1,870,000) $ 619,000 $ 45,519,000
=========== =========== =========== =========== ============
YEAR ENDED DECEMBER 31, 1991
Buildings and
improvements. $10,552,000 $ 1,012,000 $ (446,000) $ (13,000) $ 11,105,000
Machinery and
equipment.... 26,829,000 4,176,000 (1,675,000) (92,000) 29,238,000
----------- ----------- ----------- ----------- ------------
$37,381,000 $ 5,188,000 $(2,121,000) $ (105,000) $ 40,343,000
=========== =========== =========== =========== ============
- ---------------
(1) Represents primarily companies acquired and fluctuations resulting
from the translation of foreign currencies in 1993 and 1992, and
fluctuations resulting from the translation of foreign currencies in 1991.
16
QUAKER CHEMICAL CORPORATION AND SUBSIDIARIES
--------------------------------------------
SCHEDULE VIII -- VALUATION AND QUALIFYING ACCOUNTS
ALLOWANCE FOR DOUBTFUL ACCOUNTS
-------------------------------
ADDITIONS
----------------------
CHARGED OR
BALANCE AT CHARGED TO (CREDITED) BALANCE AT
FOR THE YEAR BEGINNING TO TO OTHER END OF
ENDED OF PERIOD INCOME ACCOUNTS DEDUCTIONS PERIOD
- ------------ ---------- ---------- ---------- ---------- ----------
1993 $ 834,000 $693,000 ($68,000)(1) $215,000 $1,244,000
1992 837,000 772,000 84,000 (2) 859,000 834,000
1991 1,101,000 358,000 (20,000)(1) 602,000 837,000
- ------------
(1) Represents primarily fluctuations resulting from the translation of
foreign currencies.
(2) Represents primarily additions due to companies acquired and fluctuations
resulting from the translation of foreign currencies.
QUAKER CHEMICAL CORPORATION AND SUBSIDIARIES
SCHEDULE IX -- SHORT-TERM BORROWINGS(1)
YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
WEIGHTED
MAXIMUM AVERAGE AVERAGE
CATEGORY OF BALANCE WEIGHTED AMOUNT OUT- AMOUNT OUT- INTEREST
AGGREGAGE AT AVERAGE STANDING STANDING RATE
SHORT-TERM END OF INTEREST DURING THE DURING THE DURING THE
BORROWINGS PERIOD RATE PERIOD(2) PERIOD(2) PERIOD(3)
- ---------- ------- -------- ----------- ----------- ----------
1993
Bank loans:
Parent and
subsidiary
companies.. $ 1,168,000 10.0% $ 3,168,000 $ 619,000 6.1%
1992
Bank loans:
Parent and
subsidiary
companies.. 971,000 6.6% 21,264,000 10,042,000 6.0%
1991
Bank loans:
Parent and
subsidiary
companies.. 14,500,000 7.0% 22,398,000 17,607,000 7.8%
- ----------
(1) Short-term borrowings are principally short-term notes payable to
banks and, in the case of certain subsidiary companies, various revolving
lines of credit available to the subsidiary. Generally they may be
renewed or extended beyond the maturity period as specified in the
agreement.
(2) Based on amounts outstanding at the end of each monthly accounting
period.
(3) The weighted average interest rate was calculated by dividing the
interest expense for the period by the average amount outstanding during
the period.
17
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
----------- -----------
10(a) Long-Term Performance Incentive Plan
10(h) Documents constituting employment contract
by and between Quaker Chemical Europe B.V.
and M. C. J. Meijer.
10(i) Documents constituting retirement agreement
by and between Registrant and Ira R.
Dolich.
13 Portions of the 1993 Annual Report to Shareholders
Incorporated by Reference
21 Subsidiaries and Affiliates of the Registrant
23 Consent of Independent Accountants
18