Smiling All the Way to the Bank


The past week brought positive financial reports from lubricant suppliers Fuchs Petrolub, Quaker Chemical and Milacrons Industrial Fluids segment, though Milacron itself saw a net loss for the first quarter.

Fuchs Petrolub AG, the worlds largest independent lubricant manufacturer, reported net profits of 27 million (U.S. $36.7 million) in the first quarter of 2007, a 39 percent increase over the year-ago period. Sales revenues reached 339.2 million, up 2 percent from 332.7 million in last years first quarter. Earnings per ordinary share for the quarter were 1.03, up from 0.74 a year ago.

Yesterday, Fuchs announced that its executive and supervisory boards have authorized the company to buy back up to 10 percent of its ordinary and preferred shares by Nov. 1, 2008. At current market price the share buy-back program, which begins tomorrow, would amount to about 170 million.

In its first quarter financial report of sales by region, Mannheim, Germany-based Fuchs reported total sales of 234 million in Europe in 2007s first quarter, an 8 percent increase over the year-ago period. In Asia/Pacific, quarterly sales totaled nearly 60 million, up almost 4 percent. In the Americas, sales totaled 55 million, a 14 percent decline from a year ago.

Overall sales growth was also negatively impacted by the sale of a polishing division; consolidation of companies in Ukraine and Turkey; and currency translation, the company reported.

Fuchs predicts that sales revenues will increase over the full year ahead, but due to high raw material costs and the impact of exchange rates, growth will not be as high as in previous years. The company reported that it had 3,800 employees on March 31, 2007, down from 4,000 a year earlier.

Milacron Industrial Fluids
Milacrons Industrial Fluids segment, which supplies metalworking and industrial fluids, posted net income of $3.3 million for the quarter, up 74 percent from the same period in 2006. The company attributed the rise mainly to better pricing, lower product liability and other costs.

Quarterly sales for the segment totaled $30 million, even with the sales number in 2006s first quarter. The company said better pricing and favorable currency translation made up for a decline in shipping volume in North America that it attributed in part to a slowdown in automobile and truck component production.

Overall, Cincinnati-based Milacron reported a net loss of $10.8 million during the quarter, compared to a net loss of $9.6 million in the fourth quarter of 2006. The company said the loss this year included $2.4 million in restructuring charges.

Ronald Brown, chairman, president and chief executive officer of Milacron, emphasized the importance of the companys increasing sales to emerging markets.

Our sales to emerging markets were up 24 percent over the first quarter last year, and our machinery aftermarket businesses were up nine percent, Brown said. These gains helped compensate, to some degree, for the weaker demand in North America. We continue to believe that four percent to five percent sales growth for 2007 as a whole is reasonable, with virtually all of the increase coming from outside of North America.

Shareholders of Milacron voted May 2 at its annual meeting to approve a 1-for-10 reverse stock split of both the company’s common stock and four percent preferred stock, for the purpose of increasing the market price of Milacron’s common shares to comply with the minimum share price rule of the New York Stock Exchange.

Quaker Chemical
Conshohocken, Pa.-based Quaker Chemical Corp. reported net income of $3.5 million, jumping 39 percent from $2.5 million in the first quarter last year. First quarter sales totaled $124.9 million, rising 13.7 percent from $109.8 million in 2006s first quarter.

We had a fine first quarter resulting from increased contributions from strategic initiatives such as Asia/Pacific growth and CMS [chemical management services], as well as our continued actions on the pricing front, said Ronald Naples, chairman and chief executive officer. Last fall, Quaker acquired the 40 percent equity interest of Chinese joint venture partner Wuxi Gao Ren Jie Chemical Co. as part of its Asian expansion strategy. Quaker also outlined plans to expand its manufacturing and research and development presence, and early this year consolidate its regional headquarters into a new facility in Qingpu, Shanghai.

Naples said that though the companys quarterly gross margin percentage slipped a bit due primarily to sales mix, we were able to achieve higher gross margin in dollar terms even as raw material costs ran considerably ahead of last year. This flowed from business expansion efforts and, importantly, from our work with customers to recognize the value we deliver as well as our cost realities.

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