Tag - KWR

Quaker Chemical Corp. (NYSE:KWR) has spared the rod and spoiled the shareholders, showering them with profits as it pampers the metals industry with rolling lubricants, corrosion preventatives and finishing compounds. Flashy gains aside, this is a small-cap company rooted in simplicity, values as plain as a Quaker’s clothes closet.

Quakers — the company and the believers — are steeped in peace, friendship, individual ideas of God and appreciation of plainness. Headquartered unsurprisingly in Conshohocken, Pa., and founded in 1918, Quaker finally opened up to the world in 1999, deciding then to refashion its organizational structure to meet customer needs. It went global. Now, Quaker has regional headquarters in The Netherlands, Brazil and China.

Globalization has been worth the wait. Many CEOs rap passionately to shareholders about a company’s values, but Quaker CEO Ronald Naples takes it to another plane: he’s got the backbeat of Buddha and the concept of “character is destiny.” In the company’s 2007 annual report, Naples — who is stepping down as CEO in October — notes that by holding its course through tough times in 2004 and 2005, Quaker was able to boldly profit in 2006 and 2007.

“For me, the heart of this company character is captured in something I call the Quandary of the Wish. It’s been my unspoken guide for a long time, and what we’ve become as a company flows from it and the belief, hard work, and commitment of Quaker people all over the world,” Naples wrote to shareholders. He described the quandary as having to deal with the world as it is, not as wished for, but to also be unafraid to act “in a way that will create the tomorrow we want.”

Today is that tomorrow. Quaker reported record sales of $546 million in 2007, up 19% from 2006 and more than double sales in 1999, when the company went global. Increased sales in China and Europe helped, as did higher selling prices, which softened pressure from higher raw material costs. Margins in gross dollars improved but decreased as a percentage of sales as these costs were up from 2006 . . .

Bovie Medical Corp. (AMEX:BVX), ZOLL Medical Corp. (Nasdaq:ZOLL) and Jinpan International Ltd. (AMEX:JST) were among the new 52-week highs established during Wednesday's trading among companies with market capitalizations or values under $750 million.

eResearch Technology, Inc. (Nasdaq:ERES), Quaker Chemical Corp. (NYSE:KWR) and Sirtris Pharmaceuticals Inc. (Nasdaq:SIRT) were also among the 52-week small-cap highs.

Here are Wednesday's 52-week small-cap highs:

Quaker Chemical Corp. (NYSE:KWR)
Conshohocken, Pa.
http://www.quakerchem.com

52-week low / high: $15.27 / $32.23
Shares Outstanding: 10.2 million
Market Capitalization: $316 million

Quaker Chemical Corp. (NYSE:KWR) is a maker of specialty chemical products for various heavy industrial and manufacturing applications. Its core customers are in the steel, auto and metalworking sectors. The company, which is quick to point out that it has nothing in common with other companies with “quaker” in their name, has been growing consistently worldwide and is expected to continue on an upward trajectory.

In 2007 sales exceeded half a billion dollars for the first time since the firm’s founding in 1930. Revenues for the year ended Dec. 31, 2007, rose 18.5% to $545.6 million, from $460.5 million in 2006. Profit jumped 32.5% to $15.5 million, or $1.53 per share, compared with earnings of $11.7 million, or $1.18 per share, in 2006.

In response, the company decided to raise its quarterly dividend to $0.23 per share from $0.215 per share previously. Dividends have been handed out for 35 consecutive years.

Quaker currently has operations in the United States, Canada and South Africa, as well as across Europe, Asia, South America and the Middle East. It is aggressively pushing into large developing markets, such as Brazil, Russia, India and China. The company’s China revenues tripled between 2004 and 2007.

Its footprint in India, where it has a joint venture with a producer in Calcutta, has also been expanding. Quaker stated in its 2007 annual report that it is the dominant supplier to the steel industry and has established relationships with metalworking manufacturers.

Part of the company’s success can be attributed to its business model, which includes more than just the sale of chemical products. It has a program that places company associates in its clients’ manufacturing facilities to oversee operations. Quaker’s involvement ranges from inventory management and industrial waste reduction to partnering with the client for data analysis and process optimization purposes.

Basically, the company’s representatives can be in charge of all the chemicals used in the customer’s operation. The model allows Quaker to gain a better understanding of the customer’s needs, giving it an advantage in keeping and winning business.

The company currently has more than 300 of its employees spread out among more than 70 locations and has been expanding its network. In 2007, it began a program in Mexico while building its presence in China and Brazil and adding more sites in the United States.

Investors should keep in mind that Quaker is vulnerable to the rising cost of crude oil, derivatives of which are some of its largest raw material inputs. However, Wall Street does not expect that to be a significant drag on the company’s future performance.

Analysts project earnings to jump 21.6% to $1.86 per share in 2008 before rising another 13.4% to $2.11 per share in 2009. Furthermore, Quaker appears to have plenty of cash on hand to keep growing at a healthy clip. Its working capital at the end of 2007 was $107.2 million, a rise of 11.6% from $96.1 million in 2006.

Note: Quaker Chemical Corp. (NYSE:KWR) is on the "Watch List" of Growth Report, a subscription investment newsletter from Business Financial Publishing, which also publishes SmallCapInvestor.com. As a Watch List company, Quaker displays many characteristics found in successful stock winners, and is being closely monitored for possible inclusion in the Growth Report portfolio at a later date.

Hawaiian Holdings, Inc. (AMEX:HA), Quaker Chemical Corp. (NYSE:KWR) and Clayton Williams Energy, Inc. (Nasdaq:CWEI) were among the new 52-week highs established during Monday's trading among companies with market capitalizations or values under $750 million. 

Global Traffic Network, Inc. (Nasdaq:GNET), Bentley Pharmaceuticals, Inc. (NYSE:BNT) and Aehr Test Systems (Nasdaq:AEHR) were also among the 52-week small-cap highs.

Here are today's 52-week small-cap highs:

The Russell 2000 (NYSE: IWM) and the other major U.S. indices are rising on news that more rate cuts are possible.

At 11:33 a.m. ET, the small-cap index was up 3.13 points, or 0.44%, to 720.45. The Dow Jones Industrial Average (INDU) had added 42.34 points, or 0.33%, to 12,727.26.

“The FOMC will be carefully evaluating incoming information bearing on the economic outlook and will act in a timely manner as needed to support growth and to provide adequate insurance against downside risks,” U.S. Federal Reserve chairman Ben Bernanke told members of the House Financial Services Committee during his semiannual testimony on monetary policy this morning.

Investors took that as a hint the Fed will lower its target federal funds rate, the rate commercial banks charge each other for overnight loans, when it next meets on March 18.

Bernanke also said that further deterioration of the housing or labor markets poses risks for the economy. A worsening of the credit crunch is also a possibility.

The Russell 2000 moved into positive territory at about 10:30 a.m. ET, with shares of AXT Inc. (Nasdaq: AXTI) being among the best performers.

The Fremont, Calif.-based maker of semiconductor substrates reported fourth-quarter net earnings of $1.87 per share, outpacing analysts’ projections of $1.83 per share.