UNITED STATES

 

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

 

 

 

 

 

 

FORM 10-Q

 

 

 

 

 

 

[X]

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2015

 

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 001-12019

 

 

 

 

 

 

QUAKER CHEMICAL CORPORATION

(Exact name of Registrant as specified in its charter)

 

 

 

 

 

 

 

 

 

Pennsylvania

 

23-0993790

(State or other jurisdiction of

incorporation or organization)

 

(I.R.S. Employer

Identification No.)

 

 

 

 

One Quaker Park, 901 E. Hector Street,

Conshohocken, Pennsylvania

 

19428 – 2380

(Address of principal executive offices)

 

(Zip Code)

 

Registrant’s telephone number, including area code: 610-832-4000

 

Not Applicable

Former name, former address and former fiscal year, if changed since last report.

 

 

 

 

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 (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes     [X]      No   [  ]     

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).            Yes    [X]     No  [  ]     

 

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

 

 

 

Large accelerated filer [X]      

 

Accelerated filer  [  ]

 

 

Non-accelerated filer  [  ] (Do not check if smaller reporting company)

Smaller reporting company [  ]

 

 

 

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  [  ]    No  [X] 

 

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

 

 

 

 

Number of Shares of Common Stock

Outstanding on September 30, 2015

 

 

13,305,629

  

 

 


 

QUAKER CHEMICAL CORPORATION AND CONSOLIDATED SUBSIDIARIES

 

 

 

 

 

 

  

 

Page

PART I.

  

FINANCIAL INFORMATION

 

Item 1.

 

Financial Statements (unaudited)

 

 

 

Condensed Consolidated Statements of Income for the Three and Nine Months Ended September 30, 2015 and September 30, 2014

2

 

 

Condensed Consolidated Statements of Comprehensive Income for the Three and Nine Months Ended September 30, 2015 and September 30, 2014

3

 

 

Condensed Consolidated Balance Sheets at September 30, 2015 and December 31, 2014

4

 

 

Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2015 and September 30, 2014

5

 

 

Notes to Condensed Consolidated Financial Statements

6

Item 2.

  

Management’s Discussion and Analysis of Financial Condition and Results of Operations

22

Item 3.

  

Quantitative and Qualitative Disclosures about Market Risk

30

Item 4.

  

Controls and Procedures

31

PART II.

  

OTHER INFORMATION

32

Item 1.

 

Legal Proceedings

32

Item 2.

 

Unregistered Sales of Equity Securities and Use of Proceeds

32

Item 6.

  

Exhibits

33

Signatures

33

  

1


 

PART I

FINANCIAL INFORMATION

 

Item 1.                        Financial Statements (Unaudited).

 

Quaker Chemical Corporation

Condensed Consolidated Statements of Income

(Dollars in thousands, except per share data)

 

 

 

 

Unaudited

 

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30, 

 

 

 

2015

 

2014

 

2015

 

2014

Net sales

$

189,224

 

$

198,867

 

$

554,280

 

$

571,827

Cost of goods sold

  

117,895

 

  

128,567

 

  

346,006

 

  

368,197

Gross profit

  

71,329

 

  

70,300

 

  

208,274

 

  

203,630

Selling, general and administrative expenses

  

52,601

 

  

49,747

 

  

150,237

 

  

142,759

Operating income

  

18,728

 

 

20,553

 

  

58,037

 

  

60,871

Other income (expense), net

  

185

 

  

914

 

  

(97)

 

  

558

Interest expense

  

(697)

 

  

(641)

 

  

(1,891)

 

  

(1,747)

Interest income

  

422

 

  

642

 

  

1,117

 

  

1,990

Income before taxes and equity in net income of associated

 

 

 

 

 

 

 

 

 

 

 

 

companies

  

18,638

 

  

21,468

 

  

57,166

 

  

61,672

Taxes on income before equity in net income of associated

 

 

 

 

 

 

 

 

 

 

 

 

companies

  

4,541

 

  

5,724

 

  

15,624

 

  

18,808

Income before equity in net income of associated companies

  

14,097

 

  

15,744

 

  

41,542

 

  

42,864

Equity in net income (loss) of associated companies

  

738

 

  

375

 

  

(688)

 

  

2,506

Net income

 

14,835

 

 

16,119

 

 

40,854

 

 

45,370

Less: Net income attributable to noncontrolling interest

 

464

 

 

423

 

 

1,067

 

 

1,517

Net income attributable to Quaker Chemical Corporation

$

14,371

 

$

15,696

 

$

39,787

 

$

43,853

Per share data:

  

 

 

  

 

 

  

 

 

  

 

 

Net income attributable to Quaker Chemical Corporation 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common Shareholders – basic

$

1.08

 

$

1.18

 

$

2.99

 

$

3.31

 

Net income attributable to Quaker Chemical Corporation

 

 

 

 

 

 

 

 

 

 

 

 

 

Common Shareholders – diluted

$

1.08

 

$

1.18

 

$

2.98

 

$

3.31

 

Dividends declared

$

0.32

 

$

0.30

 

$

0.94

 

$

0.85

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

2


 

Quaker Chemical Corporation

Condensed Consolidated Statements of Comprehensive Income

(Dollars in thousands)

  

 

 

 

 

Unaudited

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

 

September 30,

 

September 30,

 

 

 

2015

 

2014

 

2015

 

2014

Net income

$

14,835

 

$

16,119

 

$

40,854

 

$

45,370

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other comprehensive (loss) income, net of tax

 

 

 

 

 

 

 

 

 

 

 

 

Currency translation adjustments

 

(11,380)

 

 

(11,655)

 

 

(19,995)

 

 

(9,400)

 

Defined benefit retirement plans

 

706

 

 

1,797

 

 

3,133

 

 

2,956

 

Unrealized gain on available-for-sale securities

 

(687)

 

 

(214)

 

 

(958)

 

 

(316)

 

 

Other comprehensive loss

 

(11,361)

 

 

(10,072)

 

 

(17,820)

 

 

(6,760)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Comprehensive income

 

3,474

 

 

6,047

 

 

23,034

 

 

38,610

Less: Comprehensive income attributable to noncontrolling

 

 

 

 

 

 

 

 

 

 

 

 

interest

 

(97)

 

 

(177)

 

 

(606)

 

 

(1,470)

Comprehensive income attributable to Quaker Chemical

 

 

 

 

 

 

 

 

 

 

 

 

Corporation

$

3,377

 

$

5,870

 

$

22,428

 

$

37,140

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

3


 

Quaker Chemical Corporation

Condensed Consolidated Balance Sheets

(Dollars in thousands, except par value and share amounts)

  

 

 

 

 

Unaudited

 

 

 

September 30,  2015

 

December 31, 2014

ASSETS

  

  

 

  

  

Current assets

  

  

 

  

  

 

Cash and cash equivalents

$

96,155

 

$

64,731

 

Accounts receivable, net

  

194,852

 

  

189,484

 

Inventories

  

 

 

  

 

 

 

Raw materials and supplies

  

38,585

 

  

37,961

 

 

Work-in-process and finished goods

  

39,948

 

  

39,747

 

Prepaid expenses and other current assets

  

20,477

 

  

19,595

 

 

Total current assets

  

390,017

 

  

351,518

Property, plant and equipment, at cost

  

234,587

 

  

234,516

 

Less accumulated depreciation

  

(148,096)

 

  

(148,753)

 

 

Net property, plant and equipment

  

86,491

 

  

85,763

Goodwill

  

78,412

 

  

77,933

Other intangible assets, net

  

75,829

 

  

70,408

Investments in associated companies

  

19,617

 

  

21,751

Deferred income taxes

  

21,071

 

  

24,411

Other assets

  

32,306

 

  

33,742

 

 

Total assets

$

703,743

 

$

665,526

  

 

 

  

 

 

  

 

LIABILITIES AND EQUITY

  

 

 

  

 

Current liabilities

  

 

 

  

 

 

Short-term borrowings and current portion of long-term debt

$

395

 

$

403

 

Accounts and other payables

  

77,212

 

  

78,977

 

Accrued compensation

  

17,709

 

  

19,853

 

Other current liabilities

  

27,230

 

  

25,668

 

 

Total current liabilities

  

122,546

 

  

124,901

Long-term debt

  

107,913

 

  

75,328

Deferred income taxes

  

11,194

 

  

8,584

Other non-current liabilities

  

85,939

 

  

91,578

 

 

Total liabilities

  

327,592

 

  

300,391

Commitments and contingencies (Note 14)

 

 

 

 

 

Equity

  

 

 

  

 

 

Common stock $1 par value; authorized 30,000,000 shares; issued and

  

 

 

  

 

 

 

outstanding 2015 – 13,305,629 shares; 2014 – 13,300,891 shares

 

13,306

 

 

13,301

 

Capital in excess of par value

  

104,839

 

  

99,056

 

Retained earnings

  

321,856

 

  

299,524

 

Accumulated other comprehensive loss

  

(71,765)

 

  

(54,406)

 

 

Total Quaker shareholders’ equity

  

368,236

 

  

357,475

Noncontrolling interest

 

7,915

 

 

7,660

Total equity

 

376,151

 

 

365,135

 

 

Total liabilities and equity

$

703,743

 

$

665,526

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

4


 

Quaker Chemical Corporation

Condensed Consolidated Statements of Cash Flows

(Dollars in thousands)

 

 

 

 

 

Unaudited

 

 

 

 

For the Nine Months Ended

 

 

 

 

September 30,

 

 

 

 

2015

 

2014

Cash flows from operating activities

  

  

  

  

  

 

Net income

$

40,854

 

$

45,370

 

Adjustments to reconcile net income to net cash provided by operating activities:

  

 

 

  

 

 

 

Depreciation

  

9,229

 

  

9,154

 

 

Amortization

  

4,998

 

  

2,754

 

 

Equity in undistributed earnings of associated companies, net of dividends

  

1,362

 

  

(2,306)

 

 

Deferred compensation and other, net

  

(551)

 

  

1,672

 

 

Stock-based compensation

  

4,500

 

  

3,959

 

 

Gain on disposal of property, plant and equipment and other assets

  

(95)

 

  

(125)

 

 

Insurance settlement realized

  

(549)

 

  

(1,214)

 

 

Pension and other postretirement benefits

  

2,204

 

  

178

 

(Decrease) increase in cash from changes in current assets and current liabilities, net of acquisitions:

 

 

  

 

 

 

Accounts receivable

  

(4,039)

 

  

(23,061)

 

 

Inventories

  

(1,028)

 

  

(9,143)

 

 

Prepaid expenses and other current assets

  

(3,545)

 

  

1,332

 

 

Accounts payable and accrued liabilities

  

(2,521)

 

  

9,470

 

 

   

Net cash provided by operating activities

  

50,819

 

  

38,040

 

 

 

 

 

 

 

 

 

Cash flows from investing activities

  

 

 

  

 

 

 

Investments in property, plant and equipment

  

(6,115)

 

  

(8,376)

 

 

Payments related to acquisitions, net of cash acquired

  

(23,990)

 

  

(51,947)

 

 

Proceeds from disposition of assets

 

130

 

 

178

 

 

Insurance settlement interest earned

  

28

 

  

34

 

 

Change in restricted cash, net

  

521

 

  

1,180

 

 

   

Net cash used in investing activities

  

(29,426)

 

  

(58,931)

 

 

 

 

 

 

 

 

 

Cash flows from financing activities

  

 

 

  

 

 

 

Proceeds from long-term debt

  

30,668

 

  

45,000

 

 

Repayment of long-term debt

  

(304)

 

  

(1,106)

 

 

Dividends paid

  

(12,257)

 

  

(10,580)

 

 

Stock options exercised, other

  

947

 

  

(194)

 

 

Payments for repurchase of common stock

 

(4,989)

 

 

 

 

Excess tax benefit related to stock option exercises

 

400

 

 

430

 

 

Purchase of a noncontrolling interest in an affiliate

 

 

 

(7,422)

 

 

Payment of acquisition-related earnout liability

 

 

 

(4,709)

 

 

Distributions to noncontrolling affiliate shareholders

 

 

 

(1,806)

 

 

   

Net cash provided by financing activities

  

14,465

 

  

19,613

Effect of exchange rate changes on cash

  

(4,434)

 

  

(2,993)

 

 

Net increase (decrease) in cash and cash equivalents

  

31,424

 

  

(4,271)

 

 

Cash and cash equivalents at beginning of period

  

64,731

 

  

68,492

 

 

Cash and cash equivalents at end of period

$

96,155

 

$

64,221

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

5


Quaker Chemical Corporation

Notes to Condensed Consolidated Financial Statements 

(Dollars in thousands, except share and per share amounts)

(Unaudited)

 

Note 1 – Condensed Financial Information

The condensed consolidated financial statements included herein are unaudited and have been prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”) for interim financial reporting and the United States Securities and Exchange Commission (“SEC”) regulations.  Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations.  In the opinion of management, the financial statements reflect all adjustments (consisting only of normal recurring adjustments, except certain material adjustments, as discussed below) which are necessary for a fair statement of the financial position, results of operations and cash flows for the interim periods.  The results for the nine months ended September 30, 2015 are not necessarily indicative of the results to be expected for the full year.  These financial statements should be read in conjunction with the Company’s Annual Report filed on Form 10-K for the year ended December 31, 2014.

In 2003, the Venezuelan government suspended the free exchange of Bolivar Fuerte (“BsF”) for foreign currency and implemented certain foreign exchange controls that served to centralize the purchase and sale of foreign currency within the country.  As of December 31, 2014, there were three legally available exchange rates in Venezuela, the CADIVI (or the official rate, 6.3 BsF per U.S. Dollar), the SICAD I (approximately 12 BsF per U.S. Dollar) and the SICAD II (approximately 52 BsF per U.S. Dollar).  In the first quarter of 2015, the Company understood that the Venezuelan government announced changes to its exchange controls.  The Company understood that there continued to be three exchange mechanisms in Venezuela; however, they now consisted of the CADIVI, a combined SICAD I and SICAD II auction mechanism (the “SICAD”) and a newly created, marginal currency system (the “SIMADI”).  The CADIVI exchange largely remained the same, except that the government further restricted what products qualify and can, therefore, legally be imported or traded under this exchange.  The government has yet to fully disclose who can access or trade on the newly formed combined SICAD market and minimal related auctions have occurred since late 2014.  Finally, the newly created SIMADI is legally available to all parties, however, at significantly higher exchange rates than the CADIVI or SICAD.  As of September 30, 2015, the published rate for the SIMADI is approximately 199 BsF per U.S. Dollar. 

The Company has a Venezuelan equity affiliate, Kelko Quaker Chemical, S.A. (“Kelko Venezuela”).  Venezuela’s economy has been considered hyper inflationary under U.S. GAAP since 2010, at which time Kelko Venezuela’s functional currency was changed to the U.S. Dollar.  Accordingly, all gains and losses resulting from the remeasurement of Kelko Venezuela’s monetary assets and liabilities to the CADIVI or other published exchange rates are required to be recorded directly to the Condensed Consolidated Statement of Income.  As of December 31, 2014, Kelko Venezuela had access to the CADIVI for imported goods, had not been invited to participate in any SICAD I auctions and had limited access to the SICAD II mechanism.  Accordingly, the Company measured its equity investment and other related assets with Kelko Venezuela at the CADIVI exchange rate at December 31, 2014.  In light of the first quarter of 2015 changes to Venezuela’s foreign exchange controls and the on-going economic challenges in Venezuela, the Company re-assessed Kelko Venezuela’s access to U.S. Dollars, the impact on the operations of Kelko Venezuela, and the impact on the Company’s equity investment and other related assets.  During the first quarter of 2015, the Company determined that the CADIVI was no longer available to Kelko Venezuela for import transactions and the government has yet to fully disclose who can access or trade on the newly formed combined SICAD mechanism and minimal related auctions have occurred to date.  As a result, the Company revalued its equity investment in Kelko Venezuela and other related assets to the SIMADI exchange rate of approximately 193 BsF per U.S. Dollar as of March 31, 2015.  This resulted in a charge of approximately $2,806, or $0.21 per diluted share, recorded in the first quarter of 2015.  Comparatively, during the second quarter of 2014, the Company recorded a charge of $321, or $0.02 per diluted share, related to the conversion of certain Venezuelan Bolivar Fuerte to U.S. Dollars on the historical SICAD II exchange.  As of September 30, 2015, the Company’s equity investment in Kelko Venezuela was $174, which continues to be valued at the SIMADI exchange rate.

As part of the Company’s chemical management services, certain third-party product sales to customers are managed by the Company.  Where the Company acts as the principal, revenue is recognized on a gross reporting basis at the selling price negotiated with customers.  Where the Company acts as an agent, such revenue is recorded using net reporting as service revenues, at the amount of the administrative fee earned by the Company for ordering the goods.  Third-party products transferred under arrangements resulting in net reporting totaled $12,140 and $36,193 for the three and nine months ended September 30, 2015, respectively.  Comparatively, third-party products transferred under arrangements resulting in net reporting totaled $11,829 and $33,328 for the three and nine months ended September 30, 2014, respectively.

 

6


Quaker Chemical Corporation

Notes to Condensed Consolidated Financial Statements - Continued

(Dollars in thousands, except share and per share amounts)

(Unaudited)

 

Note 2 – Recently Issued Accounting Standards

The Financial Accounting Standards Board ("FASB") issued an accounting standard update in September 2015 regarding the accounting and disclosure for measurement period adjustments for business combinations.  The update requires that the cumulative impact of a measurement period adjustment be recognized in the reporting period in which the adjustment is identified, rather than restating prior period financial statements.  The guidance within this accounting standard update is effective for annual and interim periods beginning after December 15, 2015, and should be applied on a prospective basis for the reporting periods presented.  The Company is currently evaluating the effects of this guidance, but does not expect a material impact.

The FASB issued an accounting standard update in July 2015 regarding simplifying the measurement of inventory.  The guidance is applicable for entities that measure inventory using the first-in, first-out or average cost methods.  Specifically, the update requires that inventory be measured at lower of cost or net realizable value.  Net realizable value is the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation.  The amendments in this update are effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years.  This guidance should be applied prospectively with early adoption permitted.  The Company is currently evaluating the effects of this guidance, but does not expect a material impact.

The FASB issued an accounting standard update in May 2015 regarding the required disclosures for entities that elect to measure the fair value of certain investments using the net asset value per share (or its equivalent) practical expedient in accordance with the fair value measurement authoritative guidance.  The update removes the requirement to categorize within the fair value hierarchy, and, also, limits the requirement to make certain other disclosures, for all such investments.  The amendments in this update are effective for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years, and should be applied on a retrospective basis for the periods presented.  Early adoption is permitted.  The Company is currently evaluating the effects of this guidance, but does not expect a material impact.

The FASB issued an accounting standard update in April 2015 regarding the presentation of debt issuance costs on the balance sheet.  The update requires capitalized debt issuance costs be presented on the balance sheet as a reduction to debt, rather than recorded as a separate asset.  The amendments in this update are effective for annual and interim periods beginning after December 15, 2015 and should be applied on a retrospective basis for the periods presented.  Early adoption is permitted.  Also, in June 2015, the SEC staff announced that the guidance within this accounting standard update was not applicable to revolving debt arrangements or credit facilities.  The Company is currently evaluating the effects of this guidance, and the SEC’s announcement, but does not expect a material impact.

The FASB issued an accounting standard update in May 2014 regarding the accounting for and disclosure of revenue recognition.  Specifically, the update outlined a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers, which will be common to both U.S. GAAP and International Financial Reporting Standards.  The guidance was effective for annual and interim periods beginning after December 15, 2016, which allowed for full retrospective adoption of prior period data or a modified retrospective adoption.  Early adoption was not permitted.  In August 2015, the FASB issued an accounting standard update to delay the effective date of the new revenue standard by one year, or, in other words, to be effective for annual and interim periods beginning after December 15, 2017.  Entities will be permitted to adopt the new revenue standard early, but not before the original effective date.  The Company is currently evaluating the effects of this guidance. 

Note 3 – Business Segments

The Company’s reportable operating segments are organized by geography as follows: (i) North America, (ii) Europe, Middle East and Africa (“EMEA”), (iii) Asia/Pacific and (iv) South America.  Operating earnings, excluding indirect operating expenses, for the Company’s reportable operating segments are comprised of revenues less costs of goods sold and selling, general and administrative expenses (“SG&A”) directly related to the respective regions’ product sales.  The indirect operating expenses consist of SG&A related expenses that are not directly attributable to the product sales of each respective reportable operating segment.  Other items not specifically identified with the Company’s reportable operating segments include interest expense, interest income, license fees from non-consolidated affiliates and other income (expense).

7


Quaker Chemical Corporation

Notes to Condensed Consolidated Financial Statements - Continued

(Dollars in thousands, except share and per share amounts)

(Unaudited)

 

The following table presents information about the performance of the Company’s reportable operating segments for the three and nine months ended September 30, 2015 and 2014:

 

 

Three Months Ended

 

Nine Months Ended

 

 

September 30,

 

September 30,

 

 

2015

 

2014

 

2015

 

2014

Net sales

  

 

  

  

  

  

  

  

  

  

  

 

North America

$

90,010

 

$

87,909

 

$

258,977

 

$

247,137

 

EMEA

  

45,989

 

  

49,352

 

  

130,345

 

  

148,769

 

Asia/Pacific

  

46,067

 

  

49,601

 

  

138,913

 

  

136,661

 

South America

  

7,158

 

  

12,005

 

  

26,045

 

  

39,260

Total net sales

$

189,224

 

$

198,867

 

$

554,280

 

$

571,827

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating earnings, excluding indirect operating expenses

 

 

 

 

 

 

 

 

 

 

 

 

North America

$

21,893

 

$

17,771

 

$

59,938

 

$

51,350

 

EMEA

 

7,106

 

 

8,589

 

 

20,538

 

 

24,794

 

Asia/Pacific

 

11,250

 

 

11,925

 

 

33,874

 

 

32,064

 

South America

  

261

 

  

883

 

  

2,270

 

  

3,281

Total operating earnings, excluding indirect operating expenses

  

40,510

 

  

39,168

 

  

116,620

 

  

111,489

Indirect operating expenses

  

(20,031)

 

  

(17,489)

 

  

(53,585)

 

  

(47,864)

Amortization expense

  

(1,751)

 

  

(1,126)

 

  

(4,998)

 

  

(2,754)

Consolidated operating income

 

18,728

 

 

20,553

 

 

58,037

 

 

60,871

Other income (expense), net

 

185

 

 

914

 

 

(97)

 

 

558

Interest expense

  

(697)

 

  

(641)

 

  

(1,891)

 

  

(1,747)

Interest income

  

422

 

  

642

 

  

1,117

 

  

1,990

Consolidated income before taxes and equity in net income of

 

 

 

 

 

 

 

 

 

 

 

 

associated companies

$

18,638

 

$

21,468

 

$

57,166

 

$

61,672

Inter-segment revenue for the three and nine months ended September 30, 2015 was $2,250 and $6,885 for North America, $5,185 and $14,559 for EMEA, $267 and $523 for Asia/Pacific and $0 and $13 for South America, respectively.  Inter-segment revenue for the three and nine months ended September 30, 2014 was $2,605 and $6,411 for North America, $5,801 and $16,582 for EMEA, $127 and $329 for Asia/Pacific and zero for South America, respectively.  However, all inter-segment transactions have been eliminated from each reportable operating segment’s net sales and earnings for all periods presented above.

Note 4 – Stock-Based Compensation

The Company recognized the following share-based compensation expense in selling, general and administrative expenses in its Condensed Consolidated Statements of Income for the three and nine months ended September 30, 2015 and 2014:

 

 

Three Months Ended

 

Nine Months Ended

 

 

September 30,

 

September 30,

 

 

2015

 

2014

 

2015

 

2014

Stock options

$

164

 

$

171

 

$

548

 

$

492

Nonvested stock awards and restricted stock units

 

668

 

 

593

 

 

2,179

 

 

1,758

Employee stock purchase plan

 

19

 

 

18

 

 

56

 

 

54

Non-elective and elective 401(k) matching contribution in stock

 

449

 

 

413

 

 

1,624

 

 

1,561

Director stock ownership plan

 

31

 

 

32

 

 

93

 

 

94

Total share-based compensation expense

$

1,331

 

$

1,227

 

$

4,500

 

$

3,959

As of September 30, 2015 and 2014, the Company recorded $400 and $430, respectively, of excess tax benefits in capital in excess of par value on its Condensed Consolidated Balance Sheets related to stock option exercises.  The Company’s estimated taxes payable was sufficient to fully recognize these benefits as cash inflows from financing activities in its Condensed Consolidated Statement of Cash Flows, which represented the Company’s estimate of cash savings through the nine months ended September 30, 2015 and 2014, respectively.

8


Quaker Chemical Corporation

Notes to Condensed Consolidated Financial Statements - Continued

(Dollars in thousands, except share and per share amounts)

(Unaudited)

 

Stock option activity under all plans is as follows:

 

 

 

 

 

 

 

 

 

Weighted Average

 

 

 

 

 

 

Weighted Average

 

Remaining

 

 

 

 

Number of

 

Exercise Price

 

Contractual

 

 

 

 

Options

 

(per option)

 

Term (years)

 

 

Options outstanding at December 31, 2014

87,075

 

$

59.09

 

 

 

 

 

 

 

Options granted

38,698

 

 

87.30

 

 

 

 

 

 

 

Options exercised

(21,157)

 

 

46.61

 

 

 

 

 

 

 

Options forfeited

(4,945)

 

 

78.42

 

 

 

 

 

 

Options outstanding at September 30, 2015

99,671

 

$

71.73

 

 

 

5.3

 

 

Options exercisable at September 30, 2015

31,457

 

$

56.46

 

 

 

4.3

 

As of September 30, 2015, the total intrinsic value of options outstanding was approximately $890, and the total intrinsic value of exercisable options was $643.  Intrinsic value is calculated as the difference between the current market price of the underlying security and the strike price of a related option.

A summary of the Company’s outstanding stock options at September 30, 2015 is as follows: 

 

 

 

 

 

 

 

 

 

 

Weighted

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average

 

Weighted

 

 

 

Weighted

 

 

 

 

 

 

 

 

 

Number

 

Remaining

 

Average

 

Number

 

Average

 

 

Range of

 

of Options

 

Contractual

 

Exercise Price

 

of Options

 

Exercise Price

 

 

Exercise Prices

 

Outstanding

 

Term (years)

 

(per option)

 

Exercisable

 

(per option)

 

 

$

-

 

$

10.00

 

 

 

$

 

 

$

 

 

$

10.01

-

 

$

20.00

 

2,367

 

1.3

 

 

18.82

 

2,367

 

 

18.82

 

 

$

20.01

-

 

$

30.00

 

 

 

 

 

 

 

 

 

$

30.01

-

 

$

40.00

 

6,317

 

3.4

 

 

38.13

 

6,317

 

 

38.13

 

 

$

40.01

-

 

$

50.00

 

 

 

 

 

 

 

 

 

$

50.01

-

 

$

60.00

 

21,055

 

4.4

 

 

58.26

 

11,997

 

 

58.26

 

 

$

60.01

-

 

$

70.00

 

 

 

 

 

 

 

 

 

$

70.01

-

 

$

80.00

 

33,786

 

5.4

 

 

73.47

 

10,776

 

 

73.47

 

 

$

80.01

-

 

$

90.00

 

36,146

 

6.4

 

 

87.30

 

 

 

 

 

 

 

 

 

 

 

 

99,671

 

5.3

 

 

71.73

 

31,457

 

 

56.46

 

As of September 30, 2015, unrecognized compensation expense related to options granted during 2013 was $85, for options granted during 2014 was $360 and for options granted in 2015 was $664.

During the first quarter of 2015, the Company granted stock options under its LTIP plan that are subject only to time vesting over a three-year period.  For the purposes of determining the fair value of stock option awards, the Company uses the Black-Scholes option pricing model and the assumptions set forth in the table below:

 

 

2015

 

 

 

Number of options granted

38,698

 

 

 

Dividend Yield

1.55

%

 

 

Expected Volatility

36.32

%

 

 

Risk-free interest rate

1.22

%

 

 

Expected term (years)

4.0

 

 

Approximately $62 and $163 of expense was recorded on these options during the three and nine months ended September 30, 2015, respectively.  The fair value of these awards is amortized on a straight-line basis over the vesting period of the awards.

 

 

 

 

9


Quaker Chemical Corporation

Notes to Condensed Consolidated Financial Statements - Continued

(Dollars in thousands, except share and per share amounts)

(Unaudited)

 

Activity of nonvested shares granted under the Company’s LTIP plan is shown below:

 

 

 

 

 

Weighted

 

 

 

 

 

 

Average Grant

 

 

 

 

Number of

 

Date Fair Value

 

 

 

 

Shares

 

(per share)

 

 

Nonvested awards, December 31, 2014

124,450

 

$

61.80

 

 

 

Granted

27,266

 

$

86.39

 

 

 

Vested

(33,681)

 

$

46.76

 

 

 

Forfeited

(7,644)

 

$

61.12

 

 

Nonvested awards, September 30, 2015

110,391

 

$

72.51

 

The fair value of the nonvested stock is based on the trading price of the Company’s common stock on the date of grant.  The Company adjusts the grant date fair value for expected forfeitures based on historical experience for similar awards.  As of September 30, 2015, unrecognized compensation expense related to these awards was $4,207 to be recognized over a weighted average remaining period of 1.88 years.

Activity of nonvested restricted stock units granted under the Company’s LTIP plan is shown below:

 

 

 

 

 

Weighted

 

 

 

 

 

 

Average Grant

 

 

 

 

Number of

 

Date Fair Value

 

 

 

 

Units

 

(per unit)

 

 

Nonvested awards, December 31, 2014

7,158

 

$

61.03

 

 

 

Granted

1,450

 

$

87.30

 

 

 

Vested

(2,434)

 

$

43.45

 

 

Nonvested awards, September 30, 2015

6,174

 

$

74.14

 

The fair value of the nonvested restricted stock units is based on the trading price of the Company’s common stock on the date of grant.  The Company adjusts the grant date fair value for expected forfeitures based on historical experience for similar awards.  As of September 30, 2015, unrecognized compensation expense related to these awards was $200 to be recognized over a weighted average remaining period of 1.77 years.

Employee Stock Purchase Plan

In 2000, the Board adopted an Employee Stock Purchase Plan (“ESPP”) whereby employees may purchase Company stock through a payroll deduction plan.  Purchases are made from the plan and credited to each participant’s account at the end of each month, the “Investment Date.”  The purchase price of the stock is 85% of the fair market value on the Investment Date.  The plan is compensatory and the 15% discount is expensed on the Investment Date.  All employees, including officers, are eligible to participate in this plan.  A participant may withdraw all uninvested payment balances credited to a participant’s account at any time.  An employee whose stock ownership of the Company exceeds five percent of the outstanding common stock is not eligible to participate in this plan.

2013 Director Stock Ownership Plan

In 2013, the Company adopted the 2013 Director Stock Ownership Plan (the “Plan”), to encourage the Directors to increase their investment in the Company, which was approved at the Company’s May 2013 shareholders’ meeting.  The Plan authorizes the issuance of up to 75,000 shares of Quaker common stock in accordance with the terms of the Plan in payment of all or a portion of the annual cash retainer payable to each of the Company’s non-employee directors in 2013 and subsequent years during the term of the Plan.  Under the Plan, each director who, on May 1 of the applicable calendar year, owns less than 400% of the annual cash retainer for the applicable calendar year, divided by the average of the closing price of a share of Quaker Common Stock as reported by the composite tape of the New York Stock Exchange for the previous calendar year (the “Threshold Amount”), is required to receive 75% of the annual cash retainer in Quaker common stock and 25% of the retainer in cash, unless the director elects to receive a greater percentage of Quaker common stock (up to 100%) of the annual cash retainer for the applicable year.  Each director who owns more than the Threshold Amount may elect to receive common stock in payment of a percentage (up to 100%) of the annual cash retainer.  The annual retainer is $50 and the retainer payment date is June 1.

10


Quaker Chemical Corporation

Notes to Condensed Consolidated Financial Statements - Continued

(Dollars in thousands, except share and per share amounts)

(Unaudited)

 

Note 5 – Pension and Other Postretirement Benefits

The components of net periodic benefit cost for the three and nine months ended September 30, 2015 and 2014 are as follows:

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

 

 

 

 

 

 

 

Other

 

 

 

 

 

 

 

Other

 

 

 

 

 

 

 

 

Postretirement

 

 

 

 

 

 

 

Postretirement

 

 

Pension Benefits

 

Benefits

 

Pension Benefits

 

Benefits

 

 

 

2015

 

 

2014

 

 

2015

 

 

2014

 

 

2015

 

 

2014

 

 

2015

 

 

2014

Service Cost

$

763

 

$

716

 

$

1

 

$

5

 

$

2,297

 

$

2,186

 

$

12

 

$

15

Interest Cost

 

1,256

 

 

1,506

 

 

47

 

 

58

 

 

3,772

 

 

4,567

 

 

146

 

 

174

Expected return on plan assets

 

(1,367)

 

 

(1,588)

 

 

 

 

 

 

(4,165)

 

 

(4,796)

 

 

 

 

Actuarial loss amortization

 

862

 

 

763

 

 

12

 

 

16

 

 

2,620

 

 

2,311

 

 

64

 

 

48

Prior service cost amortization

 

(25)

 

 

(21)

 

 

 

 

 

 

(76)

 

 

830

 

 

 

 

Net periodic benefit cost

$

1,489

 

$

1,376

 

$

60

 

$

79

 

$

4,448

 

$

5,098

 

$

222

 

$

237

During 2013, it was discovered that the Company’s subsidiary in the United Kingdom (“U.K.”) did not appropriately amend a trust for a legacy change in its pension scheme, as it related to a past retirement age equalization law.  Given the lack of an official deed to the pension trust, the effective date of the change to the subsidiary’s pension scheme differed from the Company’s historical beliefs, but the extent of the potential exposure was not estimable.  In the first quarter of 2014, the Company recorded costs of $902, or $0.05 per diluted share, related to prior service cost and interest cost, to appropriately reflect the past plan amendment related to the retirement age equalization law.

Employer Contributions

The Company previously disclosed in its financial statements for the year ended December 31, 2014, that it expected to make minimum cash contributions of $4,176 to its pension plans and $568 to its other postretirement benefit plan in 2015.  As of September 30, 2015, $1,835 and $449 of contributions have been made to the Company’s pension plans and its postretirement benefit plans, respectively.

Note 6 – Other income (expense), net

The components of other income (expense), net for the three and nine months ended September 30, 2015 and 2014 are as follows:

 

 

Three Months Ended

 

Nine Months Ended

 

 

September 30,

 

September 30,

 

 

2015

 

2014

 

2015

 

2014

Income from third party license fees

$

161

 

$

181

 

$

619

 

$

736

Foreign exchange (losses) gains, net

 

(79)

 

 

160

 

 

(978)

 

 

(824)

Gain on fixed asset disposals, net

 

21

 

 

25

 

 

76

 

 

130

Non-income tax and other related refunds

 

72

 

 

531

 

 

141

 

 

531

Other non-operating income

 

53

 

 

88

 

 

179

 

 

152

Other non-operating expense

 

(43)

 

 

(71)

 

 

(134)

 

 

(167)

Total other income (expense), net

$

185

 

$

914

 

$

(97)

 

$

558

Note 7 – Income Taxes and Uncertain Income Tax Positions

The Company’s first nine months of 2015 effective tax rate was 27.3%, compared to the first nine months of 2014 effective tax rate of 30.5%.  The primary contributors to the difference in the effective tax rate from the prior year were lower changes in reserves related to uncertain tax positions, a mix of earnings between higher and lower tax jurisdictions, and certain other one-time items that impacted 2015’s effective tax rate comparison.

As of September 30, 2015, the Company’s cumulative liability for gross unrecognized tax benefits was $10,628.  At December 31, 2014, the Company’s cumulative liability for gross unrecognized tax benefits was $11,845.

The Company continues to recognize interest and penalties associated with uncertain tax positions as a component of taxes on income before equity in net income of associated companies in its Condensed Consolidated Statements of Income.  The Company recognized ($55) and ($216) for interest and ($1) and $187 for penalties on its Condensed Consolidated Statements of Income for the three and nine months ended September 30, 2015, respectively, and recognized ($6) and ($64) for interest and ($99) and ($1) for

11


Quaker Chemical Corporation

Notes to Condensed Consolidated Financial Statements - Continued

(Dollars in thousands, except share and per share amounts)

(Unaudited)

 

penalties on its Condensed Consolidated Statements of Income during the three and nine months ended September 30, 2014, respectively.  As of September 30, 2015, the Company had accrued $1,508 for cumulative interest and $1,900 for cumulative penalties, compared to $1,868 for cumulative interest and $1,845 for cumulative penalties accrued at December 31, 2014.

During the three months ended September 30, 2015, the Company recognized a decrease of approximately $793 in its cumulative liability for gross unrecognized tax benefits due to the expiration of the applicable statutes of limitations for certain tax years.  During the three months ended September 30, 2014, the Company recognized a decrease in its cumulative liability for gross unrecognized tax benefits of $802 due to the expiration of the applicable statutes of limitations for certain tax years.

During the nine months ended September 30, 2015, the Company recognized a decrease of approximately $1,533 in its cumulative liability for gross unrecognized tax benefits due to the expiration of the applicable statutes of limitations for certain tax years.  During the nine months ended September 30, 2014, the Company recognized a decrease of approximately $1,877 in its cumulative liability for gross unrecognized tax benefits due to the expiration of the applicable statutes of limitations for certain tax years.

The Company estimates that during the year ending December 31, 2015 it will reduce its cumulative liability for gross unrecognized tax benefits by approximately $1,800 to $1,900 due to the expiration of the statute of limitations with regard to certain tax positions.  This estimated reduction in the cumulative liability for unrecognized tax benefits does not consider any increase in liability for unrecognized tax benefits with regard to existing tax positions or any increase in cumulative liability for unrecognized tax benefits with regard to new tax positions for the year ending December 31, 2015.

The Company and its subsidiaries are subject to U.S. Federal income tax, as well as the income tax of various state and foreign tax jurisdictions.  Tax years that remain subject to examination by major tax jurisdictions include Brazil from 2000, Italy from 2007, the Netherlands and the United Kingdom from 2009, China from 2010, Spain from 2011, the United States from 2011, and various domestic state tax jurisdictions from 1993.

During 2012, the Italian tax authorities initiated a transfer pricing audit of the Company’s Italian subsidiary, Quaker Italia S.r.l., relating to the tax years 2007, 2008, 2009 and 2010.  During the second quarter of 2015, the Italian tax authorities completed an audit of the Company’s Italian subsidiary, Quaker Chemical S.r.l. (formerly NP Coil Dexter Industries, S.r.l.), relating to the tax years 2010, 2011, 2012 and 2013, and proposed audit adjustments for those years.  There have been no significant developments during the third quarter of 2015 related to either of these Italian tax assessments.   In October 2015, subsequent to the date of these financial statements, the Dutch tax authorities notified the Company that they intend to assess the Company's Netherlands subsidiary for additional income taxes related to the 2011 tax year.    As of September 30, 2015, the Company believes it has adequate reserves, where merited, for uncertain tax positions with respect to these audits.     

Note 8 – Earnings Per Share

The following table summarizes earnings per share calculations for the three and nine months ended September 30, 2015 and 2014:

 

 

Three Months Ended

 

Nine Months Ended

 

 

September 30,

 

September 30,

 

 

2015

 

2014

 

2015

 

2014

Basic earnings per common share

 

   

 

 

 

 

 

   

 

 

 

 

Net income attributable to Quaker Chemical Corporation

$

14,371

 

 $ 

15,696

 

$

39,787

 

 $ 

43,853

 

Less: income allocated to participating securities

  

(121)

 

  

(140)

 

  

(351)

 

  

(385)

 

Net income available to common shareholders

$

14,250

 

$

15,556

 

$

39,436

 

$

43,468

 

Basic weighted average common shares outstanding

 

13,209,119

 

 

13,133,668

 

 

13,206,122

 

 

13,114,553

Basic earnings per common share

$

1.08

 

$

1.18

 

$

2.99

 

$

3.31

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings per common share

 

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to Quaker Chemical Corporation

$

14,371

 

$

15,696

 

$

39,787

 

$

43,853

 

Less: income allocated to participating securities

 

(121)

 

 

(140)

 

 

(350)

 

 

(384)

 

Net income available to common shareholders

$

14,250

 

$

15,556

 

$

39,437

 

$

43,469

 

Basic weighted average common shares outstanding

 

13,209,119

 

 

13,133,668

 

 

13,206,122

 

 

13,114,553

 

Effect of dilutive securities

 

13,333

 

 

22,673

 

 

16,181

 

 

21,147

 

Diluted weighted average common shares outstanding

 

13,222,452

 

 

13,156,341

 

 

13,222,303

 

 

13,135,700

Diluted earnings per common share

$

1.08

 

$

1.18

 

$

2.98

 

$

3.31

12


Quaker Chemical Corporation

Notes to Condensed Consolidated Financial Statements - Continued

(Dollars in thousands, except share and per share amounts)

(Unaudited)

 

The following aggregate numbers of stock options and restricted stock units are not included in the diluted earnings per share calculation since the effect would have been anti-dilutive: 7,903 and 6,146 for the three months ended September 30, 2015 and 2014, respectively, and 6,460 and 5,254 for the nine months ended September 30, 2015 and 2014, respectively.

Note 9 – Goodwill and Other Intangible Assets

The Company completes its annual impairment test as of the end of the third quarter of each year, or more frequently if triggering events indicate a possible impairment in one or more of its reporting units.  The Company continually evaluates the financial performance, economic conditions and other relevant developments in assessing if an interim period impairment test for one or more of its reporting units is necessary.  The Company completed its annual impairment assessment as of the end of the third quarter of 2015 and no impairment charge was warranted.  The estimated fair value of each of the Company’s reporting units substantially exceeded its carrying value, with no reporting unit at risk for failing step one of the goodwill impairment test.  In addition, the Company has recorded no impairment charges in the past.  Changes in the carrying amount of goodwill for the nine months ended September 30, 2015 were as follows:

 

 

North

 

 

 

 

 

 

 

South

 

 

 

 

 

America

 

EMEA

 

Asia/Pacific

 

America

 

Total

Balance as of December 31, 2014

$

42,677

   

$

16,050

 

$

16,006

 

$

3,200

   

$

77,933

 

Goodwill additions

 

30

 

 

3,457

 

 

103

 

 

 

 

3,590

 

Currency translation adjustments

  

(231)

 

 

(1,107)

 

 

(728)

 

 

(1,045)

   

 

(3,111)

Balance as of September 30, 2015

$

42,476

 

$

18,400

 

$

15,381

 

$

2,155

   

$

78,412

Gross carrying amounts and accumulated amortization for definite-lived intangible assets as of September 30, 2015 and December 31, 2014 were as follows:

 

 

Gross Carrying

 

Accumulated

 

 

Amount

 

Amortization

 

 

2015

 

2014

 

2015

 

2014

Customer lists and rights to sell

$

68,456

   

$

63,502

   

$

15,501

   

$

12,681

Trademarks and patents

  

23,834

   

  

18,944

   

  

5,240

   

  

4,066

Formulations and product technology

  

5,808

   

  

5,808

   

  

4,035

   

  

3,896

Other

  

6,850

   

  

6,647

   

  

5,443

   

  

4,950

Total definite-lived intangible assets

$

104,948

   

$

94,901

   

$

30,219

   

$

25,593

The Company recorded $1,751 and $4,998 of amortization expense for the three and nine months ended September 30, 2015, respectively.  Comparatively, the Company recorded $1,126 and $2,754 of amortization expense for the three and nine months ended September 30, 2014, respectively.  Estimated annual aggregate amortization expense for the current year and subsequent five years is as follows:

 

For the year ended December 31, 2015

$

6,827

 

 

For the year ended December 31, 2016

 

6,864

 

 

For the year ended December 31, 2017

 

6,432

 

 

For the year ended December 31, 2018

 

6,211

 

 

For the year ended December 31, 2019

 

6,109

 

 

For the year ended December 31, 2020

 

5,831

 

The Company has two indefinite-lived intangible assets totaling $1,100 for trademarks at September 30, 2015 and December 31, 2014.

Note 10 – Debt

The Company’s primary credit line is a $300,000 syndicated multicurrency credit agreement with Bank of America, N.A. (administrative agent) and certain other major financial institutions, which matures in June 2018.  The maximum amount available under this facility can be increased to $400,000 at the Company’s option if the lenders agree and the Company satisfies certain conditions.  Access to this facility is dependent on meeting certain financial, acquisition and other covenants, but primarily depends on the Company’s consolidated leverage ratio calculation, which cannot exceed 3.50 to 1.  At September 30, 2015 and December 31, 2014, the consolidated leverage ratio was approximately 1.1 to 1 and below 1.0 to 1, respectively, and the Company was also in compliance with all of the facility’s other covenants.  At September 30, 2015 and December 31, 2014, the Company had approximately $87,261 and $58,421 outstanding under this facility.

13


Quaker Chemical Corporation

Notes to Condensed Consolidated Financial Statements - Continued

(Dollars in thousands, except share and per share amounts)

(Unaudited)

 

Note 11 – Equity and Noncontrolling Interest

In May 2015, the Board of Directors of the Company authorized a share repurchase program authorizing the repurchase of up to $100,000 of Quaker Chemical Corporation common stock (the “2015 Share Repurchase Program”).  The 2015 Share Repurchase Program has no expiration date.  The 2015 Share Repurchase Program provides a framework of conditions under which management can repurchase shares of the Company’s common stock.  The Company intends to repurchase shares to at least offset the dilutive impact of shares issued each year as part of employee benefit and share based compensation plans.  The purchases may be made in the open market or in private and negotiated transactions, in accordance with applicable laws, rules and regulations.  In connection with the 2015 Share Repurchase Program, the remaining unutilized 1995 and 2005 Board of Directors authorized share repurchase programs were terminated.

In connection with the 2015 Share Repurchase Program, the Company acquired 59,110 shares of common stock, for $4,989, during the nine months ended September 30, 2015.  The Company has elected not to hold treasury shares, and, therefore, has retired the shares as they are repurchased.  It is the Company’s accounting policy to record the excess paid over par value as a reduction in retained earnings for all shares repurchased.

The following tables present the changes in equity and noncontrolling interest, net of tax, for the three and nine months ended September 30, 2015 and 2014:

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

 

Capital in

 

 

 

 

other

 

 

 

 

 

 

 

 

 

Common

 

excess of

 

Retained

 

comprehensive

 

Noncontrolling

 

 

 

 

 

 

stock

 

par value

 

earnings

 

loss

 

interest

 

Total

Balance at June 30, 2015

$

13,337

 

$

103,082

 

$

315,060

 

$

(60,771)

 

$

7,818

 

$

378,526

 

Net income

 

 

 

 

 

14,371

 

 

 

 

464

 

 

14,835

 

Amounts reported in other comprehensive

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

loss

 

 

 

 

 

 

 

(10,994)

 

 

(367)

 

 

(11,361)

 

Repurchases of common stock

 

(40)

 

 

 

 

(3,319)

 

 

 

 

 

 

(3,359)

 

Dividends ($0.32 per share)

 

 

 

 

 

(4,256)

 

 

 

 

 

 

(4,256)

 

Share issuance and equity-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

plans

 

9

 

 

1,735

 

 

 

 

 

 

 

 

1,744

 

Excess tax benefit from stock option exercises

 

 

 

22

 

 

 

 

 

 

 

 

22

Balance at September 30, 2015

$

13,306

 

$

104,839

 

$

321,856

 

$

(71,765)

 

$

7,915

 

$

376,151

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at June 30, 2014

$

13,242

 

$

95,508

 

$

279,161

 

$

(31,587)

 

$

8,386

 

$

364,710

 

Net income

 

 

 

 

 

15,696

 

 

 

 

423

 

 

16,119

 

Amounts reported in other comprehensive

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

loss