Original Source: FD (FAIR DISCLOSURE) WIRE
OPERATOR: Greetings ladies and gentlemen. Welcome to the Quaker Chemical Corporation first quarter earnings. At this time all participants are in a listen-only mode mode. A brief question and answer session will follow the formal presentation. (OPERATOR INSTRUCTIONS) as a reminder, this conference is being recorded. It is now my pleasure to introduce your host Mr. Ronald J. Naples, Chairman and CEO for Quaker Chemical. Thank you, Mr. Naples, you may begin.
RONALD NAPLES, CHAIRMAN AND CEO, QUAKER CHEMICAL CORPORATION: Thanks very much. Good afternoon. Welcome, everyone. As usual I've got Mark Featherstone our CFO here with me, and as usual I'll start with a brief overview, and I hope to keep it brief, I'm sure you'll be glad to hear, and then Mark will cover some detail in the second quarter and as was already said, we'll take some questions. It's always a delight to start a conference when your sales are up 18% and your profits are up 44%. We feel like we had a great start to 2008, particularly given the kind of environment we find ourselves in. Our earning per share of $0.50 in the quarter, which is significantly better than last year's $0.35 for the same period as well as the fourth quarter of '07 result of $0.46. And, in fact, it's the highest quarter our earnings per share we've had in some time. So we feel we did get off to a really good start. A point of note that I'd like to direct you to is our operating income margin was 6.2%, better than where we had been in some time. We've talked often about -- in the past -- about our determination to improve that figure because we think it's important to support our ability to invest in growth and technology and operating improvements, and it's really good from my standpoint to see the tangible result of the commitment we've made to do that and the effort we've made to get that done. Frankly, it's a tough time to accomplish this because, as you can see, our gross margins are under some pressure from raw material prices, but we remain determined to get it done, and we're finding ways to get that result. This fine result is really reflective of many aspects of what we do here at Quaker. I'd like to point ultimately to a number of fundamental issues and premises we build on, but first let me point to two financial issues that I think are buried in our effort in our result of achieving the kind of operating income we did in this report.
Number one is that we're getting more out of our SG&As as we go along, more than we ever had. That's a virtue of the infrastructure we have in place to serve our global world, and also it reflects the opportunity we have to grow revenues and run that through that infrastructure. SG&A as a percent of sales has been driven down by the focus that we've continually had on top line, of course, that has more purpose than just to reduce SG&A as a percent but also in our focus on costs to try to get the best out of money we spend.
Even though we're focused on cost, we do have plans for our continued growth. They'll involve market and customer penetration and new business development, and we remain committed to those, I want to say, because we will spend where we think it's appropriate to spend to get the long term result we want, but cost control with financial results in mind is always a balancing priority for that matter of where we're going to spend new dollars. So we're getting more out of our SG&A.
The second point I wanted to mention is the results we're getting from the energy and effort we've spent with our customers on the pricing front. We recognize that the key with our customers is to demonstrate our value to them, which we focus on in all our conversations with them, as well as make sure they understand our cost realities in today's world. It's a world of, as you all know, attention-getting crude oil prices and increasingly attention-getting vegetable oil prices in a world of biodiesel demand. It's just one of the other issues that we have to deal with.
All of us customers and us alike, as well as I'm sure you in your own businesses, face cost pressures, and we just need to keep pace with our customers to make sure they understand our pressures, and at the same time, make sure they understand the value they're getting out of way we deliver to them, so it's just not a pricing discussion, but a value discussion, and we feel good in terms of what we've been able to accomplish in that regard and I think it's reflected in our first quarter report. So at this stage I'd like to step back from that kind of detail and focus a little more fundamentally on some issues about Quaker because I think they're very important …