Quaker Chemical eliminated more than 80 positions last quarter and is letting 50 go this quarter, in the face of falling customer demand for metalworking fluids and related services. The companys fourth quarter 2008 net sales dropped 18 percent to $116 million from the year-ago quarter, for a quarterly loss of $2.7 million.
President and CEO Michael Barry said, After starting the year with three strong quarters of sales and profits, 2008 finished with disappointing results due to a dramatic falloff in customer demand around the globe and continued raw material price escalation in certain regions. However, we have taken aggressive actions to reduce our cost structure given the market realities we are facing.
In the fourth quarter of 2008, Conshohocken, Pa.-based Quaker eliminated more than 80 positions and included provisions for severance for 57 employees totaling $2.9 million. To further reduce operating costs as volume declines spread in the United States and Europe, the company expects to include provisions for severance for about 50 more employees in the current quarter, totaling about $2.5 million to $3 million.
Net sales for fourth quarter 2008 were $116.2 million, down from $142.4 million in the fourth quarter of 2007. The decrease was due to volume declines in all of the companys regions; volumes were down about 25 percent, partially offset by selling price increases. Quaker reported a loss of $2.72 million in the fourth quarter, compared to net income of $4.62 million in the year-ago quarter.
For the full year 2008, net sales totaled $581.6 million, up from $545.6 million in 2007. Net income for 2008 was $11.1 million, compared to $15.5 million in 2007.
We expect our overall demand for products to be lower in 2009 as a result of the global recession, with gradual improvement in our volumes as the year progresses, said Barry.
Fuchs Results Satisfactory
The global economic collapse in the fourth quarter subdued Fuchs Petrolub AGs normally ebullient year-end financial report. The company reported earnings of 110 million on full-year 2008 sales revenues of 1.39 billion, down from earnings of 120 million on sales of 1.37 billion in 2007.
Fuchs headlined its preliminary results as overall satisfactory, but noted, We anticipate that the unsatisfactory market conditions we are currently experiencing will also continue in 2009. The global drop in demand, and in particular its further development, are difficult to estimate. The company declined to provide 2009 projections.
Cash flow in 2008 was shaped by high levels of inventory at year end due to increases in raw material prices and the severe drop in demand in the fourth quarter, the company said. Free cash flow after acquisitions and major investments at Dec. 31, 2008 was 7.5 million compared to 128.4 million a year earlier.
Fuchs enters this difficult time in robust condition and is confident of its proven business model, the company said. We will continue to work on potential weak areas, move on with our disciplined system of cost management and take every appropriate measure.
Fuchs will release complete financial statements for 2008 on Mar. 27. The Mannheim, Germany-based company does not issue reports for individual quarters.