Call 888-776-0942 from 8 a.m. to 10 p.m. Eastern Time
Northfield, Illinois, February 18, 2021/PRNewswire/--Stepan Corporation (NYSE: SCL) reported today:
* Adjusted net income is a non-GAAP measure and does not include deferred compensation income/expenses, cash-settled stock appreciation rights (SAR) income/expenses, and other major and rare/non-recurring items. For the reconciliation of non-GAAP adjusted net income and adjusted diluted earnings per share, see Table II.
"As the world continues to be challenged by the global pandemic, we at Stepan remain committed to doing our part by supporting customers who provide basic cleaning, disinfection and personal washing products to the market. We are very grateful for the enthusiasm and enthusiasm of our employees . Commitment to complete work for our customers in this challenging year," said Chairman and CEO F. Quinn Stepan, Jr..
"Despite major challenges this year, including the global pandemic and a power outage at our Millsdale, Illinois plant in the first quarter of 2020, the company’s fourth-quarter and full-year earnings hit record highs. Full-year adjusted net income and Adjusted earnings per share increased by 11% compared to the previous year. Due to the 8% increase in sales volume, the fourth-quarter operating income of surfactants increased by 28%, mainly due to the fight against the COVID-19 virus. Strong demand in the consumer product end market. Our polymer business grew significantly this quarter due to the recovery of Millsdale insurance. Excluding the recovery of insurance, our polymer business grew by 12% due to the strong growth of rigid polyols in Europe. Our special Product business performance increased slightly in the fourth quarter."
"In January 2021, we purchased INVISTA's aromatic polyester polyol business and related assets. We are pleased to join INVISTA's polyester polyol business, including its manufacturing base, employees and customers, to Stepan."
(In thousands of U.S. dollars, except per share data)
Net income attributable to Stepan
Adjusted diluted earnings per share *
* For the reconciliation of non-GAAP adjusted net income and diluted earnings per share, please refer to Table 2.
Summary of adjusted net income items for the fourth quarter
The adjusted net income does not include non-operating deferred compensation income/expenses, cash-settled SAR income/expenses, and other major and rare/non-recurring items.
Percent change in net sales
Due to a 7% increase in global sales and an improvement in product and customer mix, net sales in the fourth quarter increased by 11% year-on-year. The improvement in sales reflects an 8% and 7% increase in sales of surfactants and polymers, respectively. The adverse impact of foreign currency translation has a negative impact of 2% on net sales.
(In thousands of U.S. dollars, all amounts are pre-tax)
Compared with the same period last year, the department's total operating income increased by 20.9 million US dollars, or 42%. Compared with the previous year, the annual segment operating income increased by 42.5 million US dollars, or 20%.
* For discussion of deferred compensation plan accounting, please refer to Table III.
The company's full-year effective tax rate in 2020 was 25.4%, compared with 18.1% in 2019. This year-on-year increase was mainly attributable to: (i) the favorable R&D tax credits confirmed in the third quarter no longer occurred in 2019; (ii) the non-recurring unfavorable tax costs related to cash repatriation in the fourth quarter of 2020. Facilitating the acquisition of INVISTA, and (iii) the geographic mix of revenue in 2020 is less favorable compared to 2019.
The company paid a dividend of $6.9 million to shareholders in the fourth quarter of 2020. During the year, the company paid $25.4 million in dividends and repurchased $15.3 million in company stock. The company has 175,874 remaining shares in compliance with the board's share repurchase authorization. With the increase in cash dividends in the fourth quarter of 2020, the company has increased its dividends to the company’s common stock for the 53rd consecutive year.
Compared with the third quarter of 2020, the company's net debt level has decreased by USD 48.7 million, while the net debt ratio has dropped from -12% to -18%, reflecting that the cash balance exceeds the total debt. The decrease in net debt was due to an increase in cash of US$39.5 million and a decrease in debt due to scheduled principal repayments.
Net debt/(net debt + equity)
The main working capital components are:
The company's full-year capital expenditure in 2020 was US$125.8 million, compared with US$105.6 million in the previous year.
“Adjusted net income in 2020 reached a record US$132 million, an increase of 11% over 2019,” said Chairman and CEO F. Quinn Stepan, Jr.. "Looking forward, we believe that due to the continued increase in demand for disinfection, cleaning and personal washing products, our surfactant sales in the consumer product end market will remain strong. We expect the agricultural and oilfield markets to have a slight demand for surfactants. Improvement. 2021. Global demand for rigid polyols has slowly recovered from the delays and cancellations of reroofing and new construction projects related to the pandemic. We expect demand to continue to recover at a moderate rate in 2021. Despite recent faces Challenges, but we believe that the long-term prospects for long-term rigid polyols are still attractive because energy-saving work and stricter building codes should increase demand. We believe that we acquire INVISTA’s aromatic polyester polyol business and two The production base allows us to meet long-term demand growth. We expect our specialty products business results to slightly improve year-on-year."
Stepan will hold a conference call at 10:00 a.m. Eastern Time (9:00 a.m. Central Time) on February 18, 2021 to discuss its fourth-quarter and full-year 2020 results. The call can be accessed via telephone and webcast. You can dial +1 (800) 897-4933 for telephone access, and you can access the webcast through the investor/conference call page on www.stepan.com. A web replay of the conference call will be provided at the same location shortly after the conference call.
The slides supporting this press release will be available on the "Investors/Presentations" page of www.stepan.com, approximately at the same time as this press release.
Stepan is a major manufacturer of specialty chemicals and intermediate chemicals, and its products are widely used in various industries. Stepan is a leading commercial producer of surfactants, which are key ingredients in consumer products and industrial cleaning and disinfection compounds, as well as agricultural and oilfield solutions. The company is also a leading supplier of polyurethane polyols used in the expanding thermal insulation market and CASE (coatings, adhesives, sealants and elastomers) industries.
Stepan is headquartered in Northfield, Illinois, and utilizes a network of modern production facilities in North and South America, Europe and Asia.
The company's common stock is traded on the New York Stock Exchange (NYSE) under the symbol SCL. For more information about Stepan, please visit the company's online www.stepan.com
For more information about Stepan's sustainability plan, please visit the sustainability page at www.stepan.com
Contact: Luis E. Rojo 847-446-7500
Certain information in this press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, the revised section 27A of the Securities Act of 1933, and the revised section 21E of the Securities Exchange Act of 1934. These statements include statements about Stepan's plans, goals, strategies, financial performance and prospects, trends, the amount and timing of future cash distributions, prospects or future events, and involve known and unknown risks that are difficult to predict. Therefore, Stepan Company's actual financial results, performance, achievements or prospects may differ materially from those expressed or implied in these forward-looking statements. In some cases, you can identify forward-looking statements by using words such as "may", "may", "anticipate", "intend", "plan", "seek", "anticipate", "believe", etc. "Estimate", "guidance", "forecast", "potential", "continue", "may", "will", "will", "should", "illustrative" and variants of these terms and similar expressions, Or the negation of these terms or similar expressions. Such forward-looking statements are necessarily based on estimates and assumptions. Although Stepan and its management believe that these estimates and assumptions are reasonable based on their knowledge and understanding of the business and industry, they are inherently uncertain. These statements are not guarantees of future performance, and shareholders should not place undue reliance on forward-looking statements.
There are many risks, uncertainties and other important factors, many of which are beyond Stepan’s control and may cause actual results to differ materially from the forward-looking statements contained in this press release. Such risks, uncertainties and other important factors include Stepan’s Form 10-K, Form 10-Q and Form 8-K reports and the risks, uncertainties and factors described in the attachments to these reports, and include (but Excluding but not limited to) risks and uncertainties related to the impact of the COVID-19 pandemic; accidents, unplanned shutdowns or disruptions in manufacturing facilities; reduced demand due to customer product reformulations or new technologies; we cannot successfully develop or launch New products; compliance with the law; our ability to identify suitable acquisition candidates and successfully complete and integrate acquisitions; global competition; fluctuations in raw material and energy costs and supplies; transportation interruptions or major changes in transportation costs; downturns and overall in certain industries Economic downturn; international business risks, including currency exchange rate fluctuations, legal restrictions, and taxes; litigation solutions that are unfavorable to us; safeguard and protect intellectual property rights; our ability to enter the capital market; global politics, military, security, or other unstable factors ; Costs associated with expansion or other capital projects; interruption or destruction of information technology systems; our ability to retain executive management and key personnel; and our debt covenants.
These forward-looking statements are only made on the date of this article, and Stepan Corporation assumes no obligation to update or revise these forward-looking statements, whether due to new information, future events, or other reasons.
The three and twelve months ending December 31, 2020 and 2019
(Unaudited-in thousands, except per share data)
Research, development and technical services
Net (income) loss attributable to non-controlling interests
Net income attributable to Stepan
Net income per common share attributable to Stepan
The shares used to calculate the net income per common share attributable to Stepan
Reconciliation of non-GAAP net income and diluted earnings per share *
(In thousands of U.S. dollars, except for the amount per share)
* All amounts in this table are after-tax amounts
The company believes that certain indicators that do not comply with generally accepted accounting principles (GAAP), when presented together with comparable GAAP indicators, help evaluate the company's operating performance and better clarify the impact of non-operating items. Internally, the company uses these non-GAAP information as indicators of business performance, and specifically refers to these indicators to evaluate the effectiveness of management. These measures should be considered as supplements to the financial performance measures prepared in accordance with GAAP, and are neither a substitute for nor superior to these measures.
Reconciliation of pre-tax and post-tax adjustments
(In thousands of U.S. dollars, except for the amount per share)
Cumulative tax impact on adjustments
The full impact of the deferred compensation plan on quarterly pre-tax income is $3 million in expenses, compared to $1.9 million in expenses in the previous year. The full year's pre-tax impact was US$5.3 million in expenses, compared with US$10.5 million in the previous year's expenses. The accounting treatment of the deferred compensation plan results in operating income when the price of Stepan common stock or mutual funds held in the plan falls, and expenses when they rise. The company also recognizes changes in the value of mutual funds as investment gains and losses. The market price of the company’s common stock at the end of the quarter is as follows:
The impact of the deferred salary income statement is summarized as follows:
Other, net-mutual fund gains (losses)
The impact of foreign currency conversion
The company’s foreign subsidiaries conduct business transactions and financial performance reports in their respective local currencies. Therefore, the income statement of the foreign subsidiary is converted into U.S. dollars at the average exchange rate during the reporting period. Because the exchange rate of foreign currency against the US dollar fluctuates over time, foreign currency translation will affect the inter-period comparison of financial statement items (that is, due to exchange rate fluctuations, the local currency results of similar periods of foreign subsidiaries may be converted to different US dollar results). The following table lists the impact of foreign currency translation on changes in consolidated net sales and various income items for the three and twelve months ended December 31, 2020, compared with 2019:
Property, plant and equipment, net
Stepan's total shareholders' equity
Total liabilities and shareholders' equity
More news releases on similar topics
Cision Distribution 888-776-0942 8 a.m. to 9 p.m. Eastern Time