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Quaker reports record sales for 2007
27 Feb '08
3 min read
Higher selling prices and additional contribution from the Company's CMS channel helped drive a 17% increase in gross margin in dollar terms. Gross margin as a percentage of sales was 30.6% for the fourth quarter of 2007, compared to 32.3% for the fourth quarter of 2006, due to higher raw material costs and sales mix from the restructured CMS contracts that were partially offset by price increases.
Selling, general and administrative expenses for the quarter increased $3.2 million, compared to the fourth quarter of 2006. Foreign exchange rate translation accounted for approximately two-thirds of the increase. Other major contributors were planned spending in higher growth areas, such as China, and higher commissions as a result of higher sales. These were offset in part by lower legal and environmental and incentive compensation costs.
The increase in other income was primarily the result of foreign exchange gains recorded in the fourth quarter of 2007, compared to losses in the same period of the prior year. The lower net interest expense is due to lower average borrowings and higher interest income during the fourth quarter of 2007, compared to the prior year period.
The effective tax rate was 43.6% in the fourth quarter of 2007 versus 28.2% in the prior year quarter. The higher tax rate was due in part to a tax law change, resulting in a revaluation of previously established deferred tax assets, as well as a change in the mix of earningsfrom lower to higher tax rate jurisdictions.
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Selling, general and administrative expenses for the quarter increased $3.2 million, compared to the fourth quarter of 2006. Foreign exchange rate translation accounted for approximately two-thirds of the increase. Other major contributors were planned spending in higher growth areas, such as China, and higher commissions as a result of higher sales. These were offset in part by lower legal and environmental and incentive compensation costs.
The increase in other income was primarily the result of foreign exchange gains recorded in the fourth quarter of 2007, compared to losses in the same period of the prior year. The lower net interest expense is due to lower average borrowings and higher interest income during the fourth quarter of 2007, compared to the prior year period.
The effective tax rate was 43.6% in the fourth quarter of 2007 versus 28.2% in the prior year quarter. The higher tax rate was due in part to a tax law change, resulting in a revaluation of previously established deferred tax assets, as well as a change in the mix of earningsfrom lower to higher tax rate jurisdictions.
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Quaker Chemical Corporation
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