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Stepan Posts Record Quarter

Stepan Reports Record First Quarter Earnings

NORTHFIELD, Ill., April 26, 2016 /PRNewswire/ — Stepan Company (NYSE: SCL) today reported:

First Quarter Highlights

  • Reported net income was $27.7 million or $1.21 per diluted share, a 30% increase versus $21.3 million or $0.93 per diluted share in the prior year.
  • Adjusted net income* was a record $29.5 million or $1.29 per diluted share, a 44% increase versus $20.4 million or $0.90 per diluted share in the prior year. Total sales volume increased 12% for the quarter.
  • Surfactant operating income was $37.2 million, up 10% versus prior year benefiting from our internal efficiency program, lower raw material costs and a 10% increase in volume.
  • Polymer operating income was $22.2 million, a 50% increase versus prior year. Volumes were 18% higher, and margins improved partially due to lower raw material costs.
  • The effect of foreign currency translation negatively impacted net income by $1.5 million or $0.07 per diluted share Stepanprior year.

*  Adjusted net income is a non-GAAP measure which excludes Deferred Compensation income/ expense as well as other significant and infrequent/non-recurring items. See Table II for this non-GAAP reconciliation.

"The Company had a good start to the year and delivered record first quarter results," said F. Quinn Stepan, Jr., President and Chief Executive Officer. "The quarter benefited from higher Surfactant and Polymer volumes, increased asset utilization, reduced raw material costs and enhanced internal efficiencies."

Polymer net sales were $113.9 million in the first quarter, a $4.5 million increase versus prior year. Sales volume increased 18% in the quarter primarily due to continued growth in polyols used in rigid foam insulation and insulated metal panels, and this accounted for $19.3 million of the increase. Selling prices were slightly lower which decreased net sales by $12.2 million. The translation impact of a stronger U.S. dollar decreased net sales by $2.6 million. Operating income increased $7.4 million or 50% versus the prior year. The improvement was primarily attributable to volume growth in North America and Europe, improved performance in Phthalic Anhydride, and lower raw material costs.