Stepan Q1 Report 2024
“We are encouraged by the first quarter volume growth in several of our core end markets. Surfactants experienced double-digit volume growth within the Personal Care and Oil Field end markets and with our Distribution partners. As expected, Latin America Surfactant volumes grew double digits as we recovered Consumer volumes in Mexico. Rigid and Specialty Polyols volume grew 4% and 7%, respectively, while Specialty Products volume was up double digits. Soft demand in the Agricultural market due to continued inventory destocking delivered a poor comparison to the prior year first quarter record Agricultural volumes. This weakness in the Agricultural market, coupled with lower Phthalic Anhydride volumes due to operational issues at our Millsdale site, mostly offset volume recovery across our core markets in Surfactants, Polymers and Specialty Products. Margins were in line with expectations despite unfavorable product mix,” said Scott Behrens, President and Chief Executive Officer. “I am pleased with our first quarter progress towards our full year $50 million cost reduction program. We delivered adjusted EBITDA growth of 5% and generated positive free cash flow despite higher operating costs related to operational interruptions at our Millsdale site, pre-commissioning expenses at our new Alkoxylation investment in Pasadena, Texas and the continuing impact of Agricultural destocking.”
Highlights
- Reported net income was $13.9 million. Adjusted net income was $14.7 million, down 11% year-over-year, largely due to a higher effective tax rate in 2024.
- EBITDA was $50.2 million. Adjusted EBITDA was $51.2 million, up 5% year-over-year.
- Global sales volume was up 1% year-over-year. Global sales volume, excluding declines in our Agricultural and commodity Phthalic Anhydride businesses, was up 4%.
- Cash from Operations was $41.6 million during the quarter. Free cash flow for the quarter was $11.4 million as capital expenditures returned to historical levels.
- The Company is on track to deliver its $50 million cost out goal for 2024 and recognized $18 million in pre-tax savings in the first quarter.
