Greetings, and welcome to the Quaker Chemical Corporation First Quarter 2013 Results Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Michael Barry, Chairman, Chief Executive Officer and President for Quaker Chemical Corporation. Thank you, Mr. Barry. You may begin.

Good morning, everyone. Joining me today are Margo Loebl, our CFO; and Robert Traub, our General Counsel. After my comments, Margo will provide the details around the financials, and then we'll address any questions that you may have. We also have slides for our conference call. You can find them in the Investor Relations' part of our website at www.quakerchem.com. I'll start it off now with some remarks about the first quarter. Overall, I am pleased to be able to report that we had a solid quarter and we did so in a challenging environment. Let me now try to give you a sense of what we experienced in the quarter, and I'll start with sales. Our overall sales were relatively flat for the quarter but were negatively impacted 1% from foreign exchange rates. Our volumes were consistent year-over-year despite weak global markets. We believe our business strategies are largely responsible for these results, as we are benefiting in 2 ways: One, we continue to make acquisitions; and two, we have grown our volume by executing our business strategies and taking share in the marketplace. So the combination of both the acquisitions and new organic growth is the reason we have continued to do well under very difficult circumstances. Going around the region. Europe is one of our most challenging regions. However, sales were actually up approximately 2%. This excludes the impact of our recent acquisition of NP Coil Dexter, which added an additional 5% growth in Europe. We are fortunate that we have been able to pick up share in the marketplace, which has helped us to more than offset the inherent steel and industrial market declines in this region, which we estimate to be 10% or more. In South America, our sales were down 5%, but when adjusted…

Thank you, Mike. Good morning, everyone. Turning to the financial portion of the call today, I will reiterate that Quaker continues to deliver strong results in the first quarter of 2013 despite a difficult market environment. As you know, we announced net sales and earnings per diluted share of $176.2 million and $1.04 per share for the first quarter of 2013, respectively, compared to first quarter of 2012 net sales and earnings per diluted share of $177.6 million and $0.95 per share, respectively. Net income for the first quarter of 2013 was $13.6 million compared to net income of $12.4 million for the first quarter of 2012. Please note that non-GAAP earnings per diluted share were $0.96 for the first quarter of 2013 compared to $0.91 for the first quarter of 2012. The adjustments to non-GAAP earnings per diluted share include: In the first quarter of 2013, $0.11 per share related to equity income in a captive insurance company Primex and a $0.03 per share charge related to the devaluation of the Venezuelan Bolivar. And in the first quarter of 2012, $0.04 per share related to equity income in Primex. Another key item to note is a $0.10 per share positive impact in the first quarter of 2013 related to the decrease in reserves for uncertain tax positions due to the expiration of applicable statuses of limitations for certain tax years. Now let's take a deeper look at Quaker's performance in our reported financial results for the first quarter of 2013. Let's please turn to Chart 4. Product volumes including acquisitions were consistent in the first quarter of 2013 compared to the first quarter of 2012. Turning to the financial snapshot in Chart 5. Net sales for the first quarter of 2013 were $176.2 million, a decrease of less than…

Thank you, Margo. We'd now like to address any questions from any of the participants on this conference.

[Operator Instructions] Our first question is coming from Summit Roshan from KeyBanc Capital Markets.

I just wanted to revisit the gross profit -- gross margin initiatives that you've taken over the past years. So -- and there's a pretty significant improvement year-over-year and sequentially. And I think it was a bit of a divergence from maybe, what you're anticipating on your last call just given, I think, expectations for higher raw materials. Could you give us a little bit more color on where the improvement came from? I know there's raw material mix, internal efficiencies, or just the impact of pricing or mix during the quarter?

Probably -- just probably all of those. But the improvement itself is kind of a combination of items, as you can imagine. There's certainly -- you kind of always have to look at where you're starting from, and a year ago, we were starting from a point where raw materials were in a rising environment, and there's always a lag effect between getting our price increases back. So part of that, certainly, has been our price initiatives, and as raw materials have gone up over time, to raise our prices. But that's certainly 1 component. As you also mentioned that raw materials, we have constant projects and looking at ways to lower our raw material costs or be more efficient in the way we do things, so that's obviously another part of it. So it's really -- it's kind of a combination of things. And as we've said all along, I think we target to have around 35% of gross margin area and we're targeting in that range. The second part of your question, really, was some change from our view in the first quarter. And in the first quarter -- I mean, our previous conference call at the beginning of March, we had really -- during that time period, we saw price -- raw materials going up, and they did go up in that February, March timeframe. And we are still seeing -- we're seeing more of a, I would say, more of a stabilization in our raw material cost now. We anticipated them to be up, more so in the second quarter than they're probably going to be, and I think that had to do in that March and April timeframe, the price of crude coming down. That was a big driver. Not that our raw materials are really coming down, but they' more stabilized. And when I say that is we have a whole list of raw materials, a lot of them. A number of them are still going up, some are flat, some might be declining. So but overall, our -- when you look at the mix, I'd say we're in a relatively stable environment right now.

And then, if I look forward as you kind of head into your sequentially stronger quarters, 2Q and 3Q, was there something in the first quarter maybe, as you worked through some lower cost inventory, that helped out there? Or would it be fair to say that the gross margin should expand sequentially as we head into the stronger quarter sequentially?

I wouldn't think it would expand. Again, we're targeting to have something in the 35% range. I think -- so we know -- and I don't think there was anything necessarily, from an inventory point of view, that would drive something in the first quarter. I think another phenomenon that happens in our business that's just really hard to quantify for you is we have these -- the number -- a significant piece of our business, maybe 20%, 25% of our business, is on indexing. And there's kind of always a -- can be a lag effect in the indexing situation, where we have mark-to-market the different raw materials at any point in time. And that can have an impact on things. So there's just a lot of effects in there. But if I was trying to, again, just steer you is 35% is our target of gross margin and we hope to be there for the long term in that area.

Great. And moving over to the acquisition front. Your balance sheet continues to get a bit better here every quarter. And can you give us an update on the pipeline there? Maybe what you're seeing in the markets. And if we should come to expect anything over the next few quarters?

Well, we're always actively looking at acquisitions. We're doing that right now. I don't think anything's imminent at this stage, but we have a number of things happening. And we're looking at different levels of acquisition from different parts of the world, and it's really what will come to closure. So our goal is to make acquisitions. As you mentioned, we have a strong balance sheet and we feel we want to do them, but we want to also want to do them in a smart way. We want to make money in the acquisitions, and so we're very, in some way, conservative or careful, in making sure we spend our money wisely. But we are actively looking at a number of opportunities right now.

Great. And if I could sneak one last one in here, and then I'll jump back in queue. Looking at your performance in Europe, it's certainly encouraging to see sales up 2%, given the market there. Could you give us some color on sort of the initiatives that have been going on to take share? Why is -- why are the market share gains so strong? And what do you expect from there going forward?

Sure. I think we're kind of growing in maybe, 2 or 3 different ways and gaining market share. Some, as we've made these acquisitions over the -- 5 acquisitions over the past, 2.5, 3 years now. And those have brought -- 4 out of 5 brought different technologies to us, and that we can now leverage in our global infrastructure, and sell in different places around the world. So that's part of our growth, and part of our -- how we're taking share. Another part is we have special initiatives around different parts of our business. In our base steel businesses, where we tend to get in with coal rolling oil and we want to sell our whole product lines into our steel customers. And we're making progress doing that. In our Metalworking business, we've tend to focus on initiatives like engines, and transmissions and Tube & Pipe, and we are continuing to get new pieces of business there. We're picking up new mines around the world. And even from a competitive perspective, we're taking share because I think, we are more and more being viewed as a market leader in these areas. And people consider us very dedicated to this business. And over time, we've just taken more share because of that. So it's a whole host of little things, and I kind of mentioned in the past that I tend to think of our -- it's not one big thing. I tend to use the baseball analogy, where we're out there trying to hit a lot of singles and a lot of -- all different regions of the world, all different product lines and all different areas. And you hit enough of these singles that they score runs for you. Unfortunately, in the term short-term period, as they've been just kind of keeping us relatively even, but longer-term, as we see our growth prospects in the inherent markets, steel markets, auto markets, pick up throughout the world, we should be able to get back to growth plus the kind of -- all these other kind of market share growth that we're getting.

[Operator Instructions] Our next question is coming from Laurence Alexander from Jefferies. Laurence Alexander - Jefferies & Company, Inc., Research Division: Just a couple of questions. First, could you give -- was there any FX impacts on -- that was relevant on the EBIT or EPS level?

Let me follow on that, okay? Laurence Alexander - Jefferies & Company, Inc., Research Division: Okay. Secondly...

It was about $0.01 per share, negative effect. Laurence Alexander - Jefferies & Company, Inc., Research Division: Okay, perfect. Okay. Are there any niches that you're in that are growing significantly faster than GDP? And can you sort of, maybe sort of clarify or identify the largest ones?

Well, we are, over time, over the past few years, as I think about our different businesses, we are -- we bought an aluminum business, we're getting new share on aluminum, so we started from a low base and we're growing there. In our mining business, we're -- continue to pick up share and doing very well there. In our Tube & Pipe business, we, historically, over the past several years now, has really been doing double-digit growth in that area. And certainly, in our -- with the new technologies that we've picked up recently in die casting and grease and the surface technologies, we have a number of initiatives in place that we expect to get good growth prospects out of. So I think it's all these -- a lot of them -- a lot of the key ones that I see are related to the acquisitions that we made, should provide us good double-digit growth in those areas. Laurence Alexander - Jefferies & Company, Inc., Research Division: And then, could you discuss a little bit the trends by region that you're seeing into the second quarter? I mean, just what's been happening with order trends in April and May?

I think things are progressing. Like I kind of said, like in my comments, that we kind of get a feeling of -- from the external things we read and what we pick up from our customers in the marketplace, that first quarter was definitely a weak quarter. We -- as I think about the different places around the world, like Europe, it was weak. I think people don't expect it to get too much better quickly, but I don't think we expect to see a continuing of this decline that we've been seeing quarter after quarter in Europe. So it seems like we're hoping we bottomed out. And I get the same sense when I talk about our -- in our Brazilian markets, in North America, I think the same kind of sense, it should be relatively flat or maybe slightly up. And then, that same sense -- in China and India is more -- there's a lot of things going on. But in general, over long periods of time, I expect both those markets to be good. But in the short time, they're kind of choppy right now. So overall, I would just say, Laurence, that we're hoping that the first quarter was one of our weakest one. There's always kind of different seasonality impacts from these quarters, but I look at the overriding trends, I would hope that we don't see anything lower and we should see some moderate growth hopefully as we go forward here. Laurence Alexander - Jefferies & Company, Inc., Research Division: And then just a broader question. The range of sort of more specialty companies have flagged a more severe shift by their customers away -- in terms of focusing on cost cutting and slowing down the number of innovation cycles that they're funding or looking at or implementing. Obviously, your business is a little bit different in terms of the dynamics. Are you seeing any kind of pushback by your customers or a tilt in the types of request that they're asking you to do that affects your mix going forward?

I mean, our customers are still -- first of all, our customers -- a lot of them are steel companies and certainly, there are -- a number of them are not in a very strong profitable state right now maybe if like they were a number of years ago. But -- so there's always a kind of pressure from that perspective. But I think, a lot of our customers are continuing to rely on us and we have to service them and have people there to do that. So I don't -- we're always under pressure from our customers but we've always been able to justify our value that we bring to them. And then, from a cost perspective, we always try to be cautious of our cost side of things, but at the same time, we are investing in our business, we are adding people, especially in the emerging markets part of the world, and we're also adding people where we think they can add value and especially driving these new technologies that we've purchased. For an example, as we buy one of these technologies like grease or die casting and so forth, in the United States, we need people in other places around the world to help execute that for us. And we continue to make investments to help drive these in these new areas.

[Operator Instructions] Our next question is a follow-up from Summit Roshan from KeyBanc Capital Markets.

Just wanted to get a reminder. How -- what does your order visibility typically look like? Is it 30 days, 60 days? And where is that now, maybe relative to 3 months ago and maybe compared to a year ago?

Our order -- our customers keep very little inventory of our product on-site. So we're definitely under 30 days in general with our customers. So from an order perspective, in some ways, it's real-time. What they see, we kind of get impacted relatively quickly. And we -- the longer-term view, we have to kind of pick up from our discussions, just internal discussions with the customer, get a better understanding of how their order books look and things like that.

[Operator Instructions] If there are no further questions at this time, I'd like to turn the floor back over to management for any further or closing comments.

Okay. Thank you, Kevin. Okay, given there are no other questions, we'll end our conference call now. And I want to thank all of you for your interest today. We are pleased with our results in the first quarter and we continue to be confident in the future of Quaker Chemical. Our next conference call for the second quarter results will be in late July or early August. And if you have any questions, in the mean time, please feel free to contact Margo Loebl or myself. Thanks, again, for your interest in Quaker Chemical.

Thank you. This does conclude today's teleconference. You may disconnect your lines at this time, and have a wonderful day. We thank you for your participation today.