NORTHFIELD, Ill., Feb. 22, 2017 /PRNewswire/ — Stepan Company (NYSE: SCL) today reported:
Fourth Quarter Highlights
- Reported net income was $8.4 million, or $0.36 per diluted share versus $12.9 million, or $0.56 per diluted share, in the prior year. Adjusted net income was $12.3 million, or $0.52 per diluted share versus $17.0 million, or $0.74 per diluted share, in the prior year.*
- Total company sales volume increased 1% for the quarter as a result of higher polyol volumes, which benefited from increased demand from the insulation market in the United States and Europe.
- The fourth quarter 2016 results were negatively impacted by $8.9 million of pre-tax non-recurring costs, of which $8.3 million impacted Surfactants and $0.6 million impacted Polymers. The after-tax impact was $6.1 million, or $0.26 per diluted share.
- Surfactant operating income was $14.6 million versus $24.3 million in the prior year. This decrease was primarily attributable to certain non-recurring items including European product claim commitments and environmental remediation expense in the United States. Global Surfactant sales volume was down 1% versus the prior year.
- Polymer operating income was $16.5 million versus $18.1 million in the prior year. The decrease was mostly attributable to a scheduled maintenance shutdown of the Company’s Phthalic Anhydride operations and higher manufacturing costs associated with the Company’s new production facility in China. Global Polymer volume was up 6% versus the prior year.
- Specialty Product operating income was $4.2 million, up $3.3 million versus the prior year, primarily due to sustained improvements within Lipid Nutrition.
- The Company closed on its previously announced acquisition of Tebras/PBC in Brazil.
Full Year Highlights
- Reported net income was a record $86.2 million, or $3.73 per diluted share, a 13% increase versus $76.0 million, or $3.32 per diluted share, in the prior year. Adjusted net income was a record $98.2 million, or $4.25 per diluted share, a 24% increase versus $79.4 million, or $3.46 per diluted share, in the prior year.*
- Surfactant operating income was $99.8 million, a 4% decrease versus prior year. The Polymer segment delivered its seventh consecutive year of record operating income with $96.8 million, a 20% increase versus prior year. Specialty Product operating income was $10.7 million versus $4.4 million in the prior year.
- Total company sales volume increased 6%. Surfactant, Polymer and Specialty Product sales volume increased 5%, 12% and 8%, respectively.
- The effect of foreign currency translation negatively impacted net income by $2.7 million, or $0.12 per diluted share, versus prior 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 reconciliations of non-GAAP adjusted net income and adjusted earnings per share.
“2016 was a very good year as the Company delivered record reported and adjusted net income,” said F. Quinn Stepan, Jr., President and Chief Executive Officer. “Strong global Polymer volumes, increased asset utilization and enhanced internal efficiencies continued to deliver results.
For the full year, the Surfactant segment delivered $99.8 million of operating income while overcoming certain non-recurring items. Operating income improved in the US, Asia and Latin America.
Polymers delivered its seventh consecutive year of record operating income, primarily due to higher volumes in Rigid Polyols which benefited from new customers and global energy conservation efforts.
Specialty Product results were up significantly for the year as the segment benefited from structural actions taken in 2015.
Our internal efficiency program, called DRIVE, delivered $15.0 million of pre-tax benefit.”
Polymer net sales were $116.3 million for the quarter, a 2% increase versus prior year. Sales volume increased 6% in the quarter primarily due to continued growth in polyols used in rigid foam insulation and insulated metal panels. Slightly lower selling prices unfavorably impacted net sales by 2%. The translation impact of a stronger U.S. dollar unfavorably impacted net sales by 2%. Polymer operating income decreased $1.6 million versus the prior year. This decrease was primarily attributable to a scheduled maintenance shutdown of the Company’s Phthalic Anhydride operations and higher manufacturing costs associated with the Company’s new production facility in China. The decrease was partially offset by higher global Rigid Polyol demand from increased insulation standards and growth in construction.