Fourth Quarter Highlights
- Reported net income was $9.9 million, or $0.42 per diluted share versus $8.4 million, or $0.36 per diluted share, in the prior year. Adjusted net income was $24.6 million, or $1.06 per diluted share versus $12.3 million, or $0.52 per diluted share, in the prior year.* Current year adjusted net income excludes a $14.9 million net after-tax charge related to the new U.S. Tax Cuts and Jobs Act legislation.
- Surfactant operating income was $28.3 million versus $14.6 million in the prior year. This increase was primarily attributable to $8.3 million of non-recurring expenses in the prior year, favorable resolution of a European product claim, growth in key global markets and improved internal efficiencies. Global Surfactant sales volume increased 2% versus the prior year.
- Polymer operating income was $19.0 million versus $16.5 million in the prior year. This increase was mostly attributable to higher European Rigid Polyol and global Specialty Polyol volumes. Global Polymer volume was up 1% versus the prior year.
- Specialty Product operating income was $2.3 million versus $4.2 million in the prior year primarily due to the timing of orders in our flavor business and lower volume and margins in our food business.
- During the fourth quarter of 2017, the Company approved a plan to restructure a portion of its Fieldsboro, NJ production facility. The Company recorded $0.9 million of pre-tax severance expense and $1.3 million of accelerated depreciation for the areas that will be impacted by the shutdown. This decision was made to improve future asset utilization and reduce the Company’s North American cost base going forward.
Polymers delivered its second best full year results despite increased competitive pressure and higher raw material costs within our North American Polyol business. Global Polyol volumes were up slightly despite share loss in North America. The market for insulation materials remains strong due to continued global energy conservation efforts.”
Polymer net sales were $131.1 million in the fourth quarter, a 13% increase versus prior year. Selling prices increased 8% primarily due to the pass-through of certain higher raw material costs. Sales volume increased 1% in the quarter primarily due to higher European Rigid Polyol volume and higher global Specialty Polyol volume. This growth was partially offset by lower North American Rigid Polyol and Phthalic Anhydride volumes. North American Rigid Polyol volume was down 2% due to lost share. The translation impact of a weaker U.S. dollar favorably impacted net sales by 4%. Operating income increased $2.5 million or 15% versus the prior year quarter. This increase was primarily attributable to the European Rigid Polyol and global Specialty Polyol volume growth and the non-recurrence of a scheduled Phthalic Anhydride maintenance shutdown in the prior year quarter. Higher North American raw material costs partially offset these benefits.