Stepan Full-Year Report 2023

Highlights

• The Company incurred a reported net loss of $1.2 million, or negative $0.05 per diluted share, versus $10.8 million of reported net income, or $0.47 per diluted share, in the prior year.  Adjusted net income* was $7.5 million, or $0.33 per diluted share, versus $13.5 million, or $0.59 per diluted share, in the prior year.
• Polymer operating income was $12.6 million versus $3.0 million in the prior year. This increase was primarily due to a 10% increase in global sales volume.  Global Rigid Polyols grew 12% due to strong double digit growth in North America and Europe.
• Specialty Product operating income was $2.8 million versus $6.6 million in the prior year.  This decrease was primarily attributable to lower unit margins and sales volume within the medium chain triglycerides (MCT) product line.
• The Company increased its quarterly cash dividend in the fourth quarter of 2023 by $0.01 per share, or 3%, marking the 56th consecutive year that the Company has increased its cash dividend to stockholders.
• EBITDA** was $25.8 million during the fourth quarter of 2023 versus $36.6 million in the prior year.  Adjusted EBITDA** was $37.5 million versus $40.0 million in the prior year.
• The Company recorded $6.0 million of after-tax restructuring and impairment expenses in the quarter, inclusive of $2.3 million associated with workforce reductions and $3.7 million of non-cash asset and goodwill/intangible impairments.  As previously announced, the Company expects to realize $50.0 million of pre-tax cost savings in 2024 to help offset inflationary pressures, increased expenses related to the Company’s new Pasadena alkoxylation investment and higher incentive-based compensation expenses.
• Free cash flow for the quarter was a positive $22.3 million and is comprised of $69.0 million of cash generated from operations less $46.7 million of capital expenditures (Free cash flow is a non-GAAP measure).