Stepan Reports Record Quarterly EarningsEarnings, Excluding Deferred Compensation, Up 30 Percent
NORTHFIELD, Ill., April 24, 2012 /PRNewswire via COMTEX/ --Stepan Company (NYSE: SCL) today reported record first quarter earnings for the period ended March 31, 2012.
- Net income rose 19 percent to $22.3 million compared to $18.8 million a year ago.
- Net income, excluding deferred compensation expense, rose 30 percent to $23.6 million compared to $18.2 million a year ago.
- Net sales increased 10 percent to $465.3 million on volume growth of 4 percent. Higher selling prices attributable to commodity raw material inflation also contributed to the increase.
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SUMMARY |
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($ in thousands, except per share data) |
Three Months Ended March 31 |
||
|
2012 |
2011 |
% Change |
|
|
Net Sales |
$ 465,269 |
$ 422,598 |
+ 10 |
|
Net Income |
22,302 |
18,761 |
+ 19 |
|
Net Income Excluding Deferred Compensation * |
23,640 |
18,223 |
+ 30 |
|
Earnings per Diluted Share |
$ 1.97 |
$ 1.68 |
+ 17 |
|
Earnings per Diluted Share Excluding Deferred Compensation * |
$ 2.09 |
$ 1.63 |
+ 28 |
|
* See Table II for a discussion of deferred compensation plan accounting. |
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SEGMENT RESULTS |
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($ in thousands) |
Three Months Ended March 31 |
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2012 |
2011 |
% Change |
|
|
Net Sales |
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|
Surfactants |
$ 347,156 |
$ 324,885 |
+ 7 |
|
Polymers |
96,749 |
86,399 |
+ 12 |
|
Specialty Products |
21,364 |
11,314 |
+ 89 |
|
Total Net Sales |
$ 465,269 |
$ 422,598 |
+ 10 |
The increase in sales was primarily due to higher selling prices and sales volume.
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Percentage Change in Net Sales Three Months Ended March 31, 2012 |
|
|
Selling Price |
+ 7 |
|
Volume |
+ 4 |
|
Foreign Translation |
- 1 |
|
Total |
+ 10 |
- Surfactant sales volume rose 4 percent. North America and Europe each recorded a 3 percent increase in volume, while Latin American volume rose 6 percent. Volume growth in Brazil accounted for a majority of the Latin American increase. Improved volume of functional surfactants used in agricultural, oilfield and biodiesel led the growth in North American volume. Sales of Consumer Products led the volume growth in Europe and Latin America.
- Polymer sales volume grew by 7 percent. Sales volume of polyol, used primarily in rigid foam insulation, grew by 9 percent due to higher demand for insulation in replacement roofing and new demand in metal panel insulation and adhesive applications.
- Specialty Products net sales rose by 89 percent for the quarter as a result of increased sales, attributable to the Company's 2011 acquisition of the Lipid Nutrition product lines.
Gross profit increased by 24 percent to a record $76.8 million for the quarter.
- Surfactant gross profit grew by 14 percent to $54.0 million. Higher sales volume, improved product mix and the continuing recovery of higher raw material costs in selling prices all contributed to the improvement. North America, Europe and Latin America all posted improved earnings.
- Polymer gross profit grew by 57 percent to $17.4 million. The growth was led by increased demand for polyol in Europe (volume rose 12 percent) and North America (volume rose 7 percent). Selling price increases to recover higher raw material costs contributed to the improvement.
- Specialty Products gross profit rose 57 percent to $6.3 million. The improvement was largely attributable to the Lipid Nutrition product lines acquired in June of 2011.
OUTLOOK
Our strong first quarter results reaffirm our strategy for growth from both global expansion and higher value added products. All three segments delivered record first quarter profits. Our Surfactant business experienced continued growth in higher value functional surfactants used in agricultural and oilfield products. Our expansion efforts in Brazil delivered solid earnings growth. The Singapore methyl ester plant is just coming on line and should begin shipping product during the second quarter.
The Polymer segment delivered a record first quarter on continued growth of its polyol product used in rigid foam insulation. Our polyol plant expansion in Germany is operational. This new capacity will meet anticipated sales growth for the region. Our PA/Polyol plant will complete its triennial maintenance shutdown in North America in the second quarter.
The Lipid Nutrition business acquired last year contributed to a record quarter for our Specialty Products business. We look forward to further synergies with our historic business.
"We have an opportunity to build on our solid start and deliver significant earnings growth in 2012 as we continue to pursue long term initiatives that deliver value for our shareholders," said F. Quinn Stepan, Jr., President and Chief Executive Officer.
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