Stepan Reports Fourth Quarter and Full Year 2019 Results
Fourth Quarter Highlights
- Reported net income was
$22.0 million , or$0.95 per diluted share versus$24.0 million , or$1.03 per diluted share, in the prior year. Adjusted net income* was$25.7 million , or$1.10 per diluted share versus$19.5 million , or$0.84 per diluted share, in the prior year. - Surfactant operating income was
$33.9 million versus$29.1 million in the prior year. This increase was attributable to insurance recovery related to the Company's first quarter 2019 equipment failure inEcatepec, Mexico and margin improvement inLatin America and Europe. These items were partially offset by lower sales volume due to lower demand and year end inventory reductions in our distribution channel and higher unit overhead costs inSingapore due to unfavorable production timing differences. Global Surfactant sales volume was flat versus the prior year. - Polymer operating income was
$11.4 million versus$9.5 million in the prior year. This increase was mostly attributable to higher volume and improved margins. Global Polymer sales volume increased 3% versus the prior year. Global rigid polyol volume growth of 7% more than offset lower volume in the phthalic anhydride end market. - Specialty Product operating income was
$5.0 million versus$5.1 million in the prior year. This slight decrease reflects unfavorable order timing differences within our flavor business largely offset by improved margins within our medium chain triglycerides (MCTs) product line.
Full Year Highlights
- Reported net income was
$103.1 million , or$4.42 per diluted share, versus$111.1 million , or$4.76 per diluted share, in the prior year. Adjusted net income* was$119.4 million , or$5.12 per diluted share, a 7% increase versus$111.7 million , or$4.79 per diluted share, in the prior year. - The Surfactant segment delivered operating income of
$122.8 million , an 8% decline versus prior year driven byNorth America . The key drivers in the U.S. were lower Personal Care commodity volume due to one key customer losing an important business and lower demand and year end inventory adjustments in the distribution channel. The Polymer segment delivered$69.6 million of operating income, a 5% increase versus prior year. Specialty Product operating income was$16.4 million versus$11.7 million in the prior year. Total Company sales volume decreased 2% versus the prior year. Sales volume growth within the Polymer and Specialty Product segments was offset by a 3% decline in Surfactant sales volume, or a 2% decline excluding the exit from the sulfonation business inGermany .- The Company had negative net debt at year-end as cash balances of
$315 million exceeded total debt of$222 million . - The effect of foreign currency translation negatively impacted net income by
$2.0 million , or$0.08 per diluted share, versus the prior year. - As disclosed in the first quarter of 2019, the Company elected to change its method of accounting for U.S. inventories from the last in, first out (LIFO) basis to the first in, first out (FIFO) basis. The Company has retrospectively applied this change to its prior year financial statement comparables and denoted impacted prior year columns "As Adjusted". The net impact of changing from the LIFO method to the FIFO method on prior year results was
$3.0 million of additional expense recognition in the fourth quarter and$1.6 million of additional expense recognition for full year 2018.
* Adjusted net income is a non-GAAP measure which excludes deferred compensation income/expense, cash-settled stock appreciation rights (SARs), as well as other significant and infrequent/non-recurring items. See Table II for reconciliations of non-GAAP adjusted net income and adjusted earnings per diluted share.
"Despite significant challenges during the year, driven by the equipment failure in
Financial Summary |
||||||||||||||||||||
Three Months Ended December 31 |
Twelve Months Ended December 31 |
|||||||||||||||||||
($ in thousands, except per share data) |
2019 |
2018 |
% Change |
2019 |
2018 |
% Change |
||||||||||||||
Net Sales |
$ |
444,990 |
$ |
466,659 |
(5) |
% |
$ |
1,858,745 |
$ |
1,993,857 |
(7) |
% |
||||||||
Operating Income (1) |
$ |
28,491 |
$ |
35,451 |
(20) |
% |
$ |
127,260 |
$ |
149,265 |
(15) |
% |
||||||||
Net Income (1) |
$ |
22,038 |
$ |
23,957 |
(8) |
% |
$ |
103,129 |
$ |
111,117 |
(7) |
% |
||||||||
Earnings per Diluted Share (1) |
$ |
0.95 |
$ |
1.03 |
(8) |
% |
$ |
4.42 |
$ |
4.76 |
(7) |
% |
||||||||
Adjusted Net Income (1) (2) |
$ |
25,692 |
$ |
19,482 |
32 |
% |
$ |
119,387 |
$ |
111,652 |
7 |
% |
||||||||
Adjusted Earnings per Diluted Share (1) (2) |
$ |
1.10 |
$ |
0.84 |
31 |
% |
$ |
5.12 |
$ |
4.79 |
7 |
% |
(1) |
The 2018 amounts for the noted line items have been retrospectively changed from the amounts originally reported as a result of the Company's first quarter 2019 change in method of accounting for U.S. inventory valuation from LIFO to FIFO. |
(2) |
See Table II for reconciliations of non-GAAP adjusted net income and earnings per diluted share. |
Summary of Fourth Quarter Adjusted Net Income Items
Adjusted net income excludes non-operational deferred compensation income/expense, cash-settled SARs and other significant and infrequent/non-recurring items.
- Deferred Compensation: The current year fourth quarter reported net income includes
$1.5 million of after tax expense versus$3.4 million of after-tax income in the prior year. - Cash-Settled SARs: These management incentive instruments provide cash to participants equal to the appreciation on the price of specified shares of Company stock over a specified period of time. Because income or expense is recognized merely on the movement in the price of Company stock it has been excluded, similar to deferred compensation, to arrive at adjusted net income. The current year fourth quarter includes
$0.3 million of after-tax expense versus$1.2 million of after-tax income in the prior year. - Business Restructuring: The current year fourth quarter reported net income includes
$0.8 million of after-tax decommissioning expense primarily related to the Company's prior year Canadian plant closure andGermany sulfonation shutdown versus$0.2 million of after-tax expense in the prior year. - Environmental Remediation: The current year quarter reported net income includes
$1.1 million of after-tax expense versus no expense recognition in the prior year. The current year expense primarily relates to higher anticipated environmental remediation costs associated with the Company's formerly-owned site inWilmington, Massachusetts .
Percentage Change in Net Sales
Net sales decreased 5% in the year-over-year fourth quarter due to a 4% decline in global selling prices, mainly attributable to the pass-through of lower raw material costs, and the unfavorable impact of foreign currency translation. Polymer sales volume growth of 3% more than offset slight declines in Surfactant and Specialty Product volume.
Three Months Ended December 31, 2019 |
Twelve Months Ended December 31, 2019 |
||||||
Volume |
— |
(2) |
% |
||||
Selling Price |
(4) |
% |
(3) |
% |
|||
Foreign Translation |
(1) |
% |
(2) |
% |
|||
Total |
(5) |
% |
(7) |
% |
Segment Results |
|||||||||||||||||||||||
Three Months Ended December 31 |
Twelve Months Ended December 31 |
||||||||||||||||||||||
($ in thousands) |
2019 |
2018 |
% Change |
2019 |
2018 |
% Change |
|||||||||||||||||
Net Sales |
|||||||||||||||||||||||
Surfactants |
$ |
309,974 |
$ |
323,224 |
(4) |
% |
$ |
1,272,723 |
$ |
1,385,932 |
(8) |
% |
|||||||||||
Polymers |
$ |
116,443 |
$ |
122,974 |
(5) |
% |
$ |
512,347 |
$ |
527,420 |
(3) |
% |
|||||||||||
Specialty Products |
$ |
18,573 |
$ |
20,461 |
(9) |
% |
$ |
73,675 |
$ |
80,505 |
(8) |
% |
|||||||||||
Total Net Sales |
$ |
444,990 |
$ |
466,659 |
(5) |
% |
$ |
1,858,745 |
$ |
1,993,857 |
(7) |
% |
|||||||||||
Three Months Ended December 31 |
Twelve Months Ended December 31 |
||||||||||||||||||||||
($ in thousands, all amounts pre-tax) |
2019 |
2018 |
% Change |
2019 |
2018 |
% Change |
|||||||||||||||||
Operating Income * |
|||||||||||||||||||||||
Surfactants |
$ |
33,867 |
$ |
29,148 |
16 |
% |
$ |
122,780 |
$ |
133,518 |
(8) |
% |
|||||||||||
Polymers |
$ |
11,419 |
$ |
9,510 |
20 |
% |
$ |
69,567 |
$ |
66,373 |
5 |
% |
|||||||||||
Specialty Products |
$ |
5,041 |
$ |
5,118 |
(2) |
% |
$ |
16,415 |
$ |
11,661 |
41 |
% |
|||||||||||
Segment Operating Income |
$ |
50,327 |
$ |
43,776 |
15 |
% |
$ |
208,762 |
$ |
211,552 |
(1) |
% |
|||||||||||
Corporate Expenses |
$ |
(21,836) |
$ |
(8,325) |
162 |
% |
$ |
(81,502) |
$ |
(62,287) |
31 |
% |
|||||||||||
Consolidated Operating Income |
$ |
28,491 |
$ |
35,451 |
(20) |
% |
$ |
127,260 |
$ |
149,265 |
(15) |
% |
* The 2018 Segment operating income amounts have been retrospectively changed from the amounts originally reported as a result of the Company's first quarter 2019 change in method of accounting for U.S. inventory valuation from LIFO to FIFO. |
Total segment operating income increased
- Surfactant net sales were
$310.0 million for the quarter, a 4% decrease versus the prior year. Selling prices were down 3% primarily due to the pass-through of lower raw material costs. The translation impact of a stronger U.S. dollar decreased net sales by 1%. Sales volume was flat versus the prior year. Higher global demand for products sold into our agricultural and oil field end markets offset lower sales volume of surfactants to our distribution partners. Surfactant operating income increased$4.7 million , or 16% versus the prior year, primarily due to insurance recovery related to theEcatepec, Mexico incident and margin improvement. These items were partially offset by lower U.S. demand and year end inventory adjustments in the distribution channel and higher unit overhead costs inSingapore due to unfavorable production timing differences. - Polymer net sales were
$116.4 million in the fourth quarter, down 5% versus prior year. Total sales volume increased 3% quarter-over-quarter. Global rigid polyol volume growth of 7% more than offset lower phthalic anhydride volumes. Selling prices declined 7% and the translation impact of a stronger U.S. dollar negatively impacted net sales by 1%. Operating income increased$1.9 million , or 20%, versus the prior year quarter primarily due to higher sales volume and a more favorable product mix. - Specialty Product net sales were
$18.6 million for the quarter, a 9% decrease versus the prior year. Sales volume declined 7% for the quarter. Operating income decreased$0.1 million versus the prior year quarter primarily due to unfavorable order timing differences within our flavor business that were mostly offset by improved margins within our medium chain triglycerides (MCTs) product line.
Corporate Expenses |
||||||||||||||||||||||
Three Months Ended December 31 |
Twelve Months Ended December 31 |
|||||||||||||||||||||
($ in thousands) |
2019 |
2018 |
% Change |
2019 |
2018 |
% Change |
||||||||||||||||
Total - Corporate Expenses |
$ |
21,836 |
$ |
8,325 |
162 |
% |
$ |
81,502 |
$ |
62,287 |
31 |
% |
||||||||||
Less: |
||||||||||||||||||||||
Deferred Compensation Expense/(Income) * |
$ |
3,662 |
$ |
(7,300) |
NM |
$ |
15,140 |
$ |
(2,329) |
NM |
||||||||||||
Business Restructuring |
$ |
1,102 |
$ |
242 |
355 |
% |
$ |
2,744 |
$ |
2,588 |
6 |
% |
||||||||||
Adjusted Corporate Expense |
$ |
17,072 |
$ |
15,383 |
11 |
% |
$ |
63,618 |
$ |
62,028 |
3 |
% |
* See Table III for a discussion of deferred compensation plan accounting. |
- Corporate expenses, excluding deferred compensation and business restructuring expenses, increased
$1.7 million , or 11%, versus the prior year quarter. This quarterly increase was primarily due to a$1.3 million pre-tax adjustment to the Company's environmental remediation reserves associated with the Company's formerly-owned site inWilmington , Massachusetts.
Income Taxes
The Company's full year effective tax rate was 18.1% in 2019 compared to 19.4% in 2018. This year-over-year decrease was primarily attributable to higher current year U.S. research and development tax credits, partially offset by the non-recurrence of 2018 favorable tax benefits. Net interest expense is down 45% year-over-year primarily due to interest earned on higher U.S. cash balances after the cash repatriation completed in 2018.
Shareholder Return
The Company paid
Selected Balance Sheet Information
The Company's net debt level decreased
($ in millions) |
12/31/19 |
9/30/19 |
6/30/19 |
3/31/19 |
12/31/18 |
||||||||||||||
Net Debt |
|||||||||||||||||||
Total Debt |
$ |
222.1 |
$ |
231.9 |
$ |
232.6 |
$ |
271.9 |
$ |
276.1 |
|||||||||
Cash |
315.4 |
286.0 |
275.3 |
269.5 |
300.2 |
||||||||||||||
Net Debt |
$ |
(93.3) |
$ |
(54.1) |
$ |
(42.7) |
$ |
2.4 |
$ |
(24.1) |
|||||||||
Equity * |
891.8 |
854.2 |
857.7 |
831.4 |
807.4 |
||||||||||||||
Net Debt + Equity * |
$ |
798.5 |
$ |
800.1 |
$ |
815.0 |
$ |
833.8 |
$ |
783.3 |
|||||||||
Net Debt / (Net Debt + Equity) |
-12 |
% |
-7 |
% |
-5 |
% |
0 |
% |
-3 |
% |
|||||||||
The major working capital components were: |
|||||||||||||||||||
($ in millions) |
12/31/19 |
9/30/19 |
6/30/19 |
3/31/19 |
12/31/18 |
||||||||||||||
Net Receivables |
$ |
276.8 |
$ |
283.0 |
$ |
289.0 |
$ |
298.9 |
$ |
280.0 |
|||||||||
Inventories * |
203.6 |
203.3 |
216.3 |
215.0 |
231.5 |
||||||||||||||
Accounts Payable |
(194.3) |
(175.8) |
(184.7) |
(175.6) |
(206.0) |
||||||||||||||
$ |
286.1 |
$ |
310.5 |
$ |
320.6 |
$ |
338.3 |
$ |
305.5 |
* The 2018 amounts for the noted line items have been retrospectively changed from the amounts originally reported as a result of the Company's first quarter 2019 change in method of accounting for U.S. inventory valuation from LIFO to FIFO. |
The Company had full year capital expenditures of
Millsdale Plant Incident
On
At this time, we are not able to quantify the extent of the impact from this event, but this incident creates a challenge for us in 2020. We are confident that the resources are in place to resolve the issue and move forward. For more than 80 years we have supplied our customers on a reliable basis and are committed to do so in the future.
2020 Outlook
Although we anticipate a very challenging first quarter, we believe our continued focus on end market diversification, Tier 2 and Tier 3 customers, as well as our cost-out activities should benefit our Surfactant business. We believe energy conservation efforts around the world will support our Polymer business and volume should continue to grow. We anticipate our Specialty Products business results will approximate 2019. Additional headwinds include the potential negative impact of Coronavirus in
Conference Call
Supporting Slides
Slides supporting this press release will be made available at www.stepan.com through the Investor Relations page at approximately the same time as this press release is issued.
Corporate Profile
Headquartered in
The Company's common stock is traded on the
Contact: Luis E. Rojo |
(847) 446-7500 |
Tables follow
Certain information in this news release consists of forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements include statements about
There are a number of risks, uncertainties and other important factors, many of which are beyond
These forward-looking statements are made only as of the date hereof, and
Table I |
||||||||||||||||
STEPAN COMPANY |
||||||||||||||||
For the Three and Twelve Months Ended December 31, 2019 and 2018 |
||||||||||||||||
(Unaudited – in thousands, except per share data) |
||||||||||||||||
Three Months Ended December 31 |
Twelve Months Ended December 31 |
|||||||||||||||
2019 |
2018 |
2019 |
2018 |
|||||||||||||
Net Sales |
$ |
444,990 |
$ |
466,659 |
$ |
1,858,745 |
$ |
1,993,857 |
||||||||
Cost of Sales * |
360,246 |
392,065 |
1,519,031 |
1,654,508 |
||||||||||||
Gross Profit * |
84,744 |
74,594 |
339,714 |
339,349 |
||||||||||||
Operating Expenses: |
||||||||||||||||
Selling |
14,661 |
13,447 |
56,956 |
56,319 |
||||||||||||
Administrative |
22,019 |
19,802 |
82,577 |
79,243 |
||||||||||||
Research, Development and Technical Services |
14,809 |
12,952 |
55,037 |
54,263 |
||||||||||||
Deferred Compensation (Income) Expense |
3,662 |
(7,300) |
15,140 |
(2,329) |
||||||||||||
55,151 |
38,901 |
209,710 |
187,496 |
|||||||||||||
Business Restructuring |
1,102 |
242 |
2,744 |
2,588 |
||||||||||||
Operating Income * |
28,491 |
35,451 |
127,260 |
149,265 |
||||||||||||
Other Income (Expense): |
||||||||||||||||
Interest, Net |
(911) |
(2,151) |
(5,932) |
(10,771) |
||||||||||||
Other, Net |
306 |
(2,715) |
4,571 |
(725) |
||||||||||||
(605) |
(4,866) |
(1,361) |
(11,496) |
|||||||||||||
Income Before Income Taxes * |
27,886 |
30,585 |
125,899 |
137,769 |
||||||||||||
Provision for Income Taxes * |
5,853 |
6,631 |
22,798 |
26,664 |
||||||||||||
Net Income * |
22,033 |
23,954 |
103,101 |
111,105 |
||||||||||||
Net (Income) Loss Attributable to Noncontrolling Interests |
5 |
3 |
28 |
12 |
||||||||||||
Net Income Attributable to Stepan Company * |
$ |
22,038 |
$ |
23,957 |
$ |
103,129 |
$ |
111,117 |
||||||||
Net Income Per Common Share Attributable to Stepan Company * |
||||||||||||||||
Basic * |
$ |
0.96 |
$ |
1.04 |
$ |
4.47 |
$ |
4.83 |
||||||||
Diluted * |
$ |
0.95 |
$ |
1.03 |
$ |
4.42 |
$ |
4.76 |
||||||||
Shares Used to Compute Net Income Per Common Share Attributable to Stepan Company |
||||||||||||||||
Basic |
23,005 |
22,987 |
23,054 |
23,022 |
||||||||||||
Diluted |
23,302 |
23,330 |
23,316 |
23,325 |
||||||||||||
* The 2018 amounts for the noted line items have been retrospectively changed from the amounts originally reported as a result of the Company's first quarter 2019 change in method of accounting for U.S. inventory valuation from LIFO to FIFO. |
Table II |
|||||||||||||||||||||||||||||
Reconciliation of Non-GAAP Net Income and Earnings per Diluted Share * |
|||||||||||||||||||||||||||||
Three Months Ended December 31 |
Twelve Months Ended |
||||||||||||||||||||||||||||
($ in thousands, except per share amounts) |
2019 |
EPS |
2018 |
EPS |
2019 |
EPS |
2018 |
EPS |
|||||||||||||||||||||
Net Income Reported |
$ |
22,038 |
$ |
0.95 |
$ |
23,957 |
$ |
1.03 |
$ |
103,129 |
$ |
4.42 |
$ |
111,117 |
$ |
4.76 |
|||||||||||||
Deferred Compensation (Income) Expense |
$ |
1,465 |
$ |
0.06 |
$ |
(3,420) |
$ |
(0.15) |
$ |
7,947 |
$ |
0.34 |
$ |
(787) |
$ |
(0.03) |
|||||||||||||
Business Restructuring |
$ |
806 |
$ |
0.04 |
$ |
182 |
$ |
0.01 |
$ |
2,005 |
$ |
0.09 |
$ |
1,842 |
$ |
0.08 |
|||||||||||||
Cash-Settled SARs (Income) Expense |
$ |
325 |
$ |
0.01 |
$ |
(1,237) |
$ |
(0.05) |
$ |
2,090 |
$ |
0.09 |
$ |
(520) |
$ |
(0.02) |
|||||||||||||
Environmental Remediation |
$ |
1,058 |
$ |
0.04 |
$ |
- |
$ |
- |
$ |
3,268 |
$ |
0.14 |
$ |
- |
$ |
- |
|||||||||||||
Voluntary Debt Prepayment |
$ |
- |
$ |
- |
$ |
- |
$ |
- |
$ |
948 |
$ |
0.04 |
$ |
- |
$ |
- |
|||||||||||||
Adjusted Net Income |
$ |
25,692 |
$ |
1.10 |
$ |
19,482 |
$ |
0.84 |
$ |
119,387 |
$ |
5.12 |
$ |
111,652 |
$ |
4.79 |
* All amounts in this table are presented after-tax |
The Company believes that certain measures that are not in accordance with generally accepted accounting principles (GAAP), when presented in conjunction with comparable GAAP measures, are useful for evaluating the Company's operating performance and provide better clarity on the impact of non-operational items. Internally, the Company uses this non-GAAP information as an indicator of business performance, and evaluates management's effectiveness with specific reference to these indicators. These measures should be considered in addition to, and are neither a substitute for, nor superior to, measures of financial performance prepared in accordance with GAAP.
Reconciliation of Pre-Tax to After-Tax Adjustments |
|||||||||||||||||||||||||||||
Three Months Ended December 31 |
Twelve Months Ended |
||||||||||||||||||||||||||||
($ in thousands, except per share amounts) |
2019 |
EPS |
2018 |
EPS |
2019 |
EPS |
2018 |
EPS |
|||||||||||||||||||||
Pre-Tax Adjustments |
|||||||||||||||||||||||||||||
Deferred Compensation (Income) Expense |
$ |
1,927 |
$ |
(4,500) |
$ |
10,456 |
$ |
(1,035) |
|||||||||||||||||||||
Business Restructuring |
$ |
1,102 |
$ |
242 |
$ |
2,744 |
$ |
2,588 |
|||||||||||||||||||||
Cash-Settled SARs (Income) Expense |
$ |
427 |
$ |
(1,628) |
$ |
2,749 |
$ |
(685) |
|||||||||||||||||||||
Environmental Remediation |
$ |
1,392 |
$ |
- |
$ |
4,300 |
$ |
- |
|||||||||||||||||||||
Voluntary Debt Prepayment |
$ |
- |
$ |
- |
$ |
1,247 |
$ |
- |
|||||||||||||||||||||
Total Pre-Tax Adjustments |
$ |
4,848 |
$ |
(5,886) |
$ |
21,496 |
$ |
868 |
|||||||||||||||||||||
Cumulative Tax Effect on Adjustments |
$ |
(1,194) |
$ |
1,411 |
$ |
(5,238) |
$ |
(333) |
|||||||||||||||||||||
US Tax Reform Impact |
|||||||||||||||||||||||||||||
After-Tax Adjustments |
$ |
3,654 |
$ |
0.15 |
$ |
(4,475) |
$ |
(0.19) |
$ |
16,258 |
$ |
0.70 |
$ |
535 |
$ |
0.03 |
Table III |
|||||||||||||||||||||||||||||
Deferred Compensation Plan |
|||||||||||||||||||||||||||||
The full effect of the deferred compensation plan on quarterly pretax income was $1.9 million of expense versus $4.5 million of income in the prior year. The year-to-date impact was $10.5 million of expense versus $1.0 million of income in the prior year. The accounting for the deferred compensation plan results in operating income when the price of Stepan Company common stock or mutual funds held in the plan fall and expense when they rise. The Company also recognizes the change in value of mutual funds as investment income or loss. The quarter end market prices of Stepan Company common stock are as follows: |
|||||||||||||||||||||||||||||
2019 |
2018 |
||||||||||||||||||||||||||||
12/31 |
9/30 |
6/30 |
3/31 |
12/31 |
9/30 |
6/30 |
3/31 |
||||||||||||||||||||||
Stepan Company |
$ |
102.44 |
$ |
97.06 |
$ |
91.91 |
$ |
87.52 |
$ |
74.00 |
$ |
87.01 |
$ |
78.01 |
$ |
83.18 |
|||||||||||||
The deferred compensation income statement impact is summarized below: |
|||||||||||||
Three Months Ended December 31 |
Twelve Months Ended December 31 |
||||||||||||
($ in thousands) |
2019 |
2018 |
2019 |
2018 |
|||||||||
Deferred Compensation |
|||||||||||||
Operating Income (Expense) |
$ |
(3,662) |
$ |
7,300 |
$ |
(15,140) |
$ |
2,329 |
|||||
Other, net – Mutual Fund Gain (Loss) |
1,735 |
(2,800) |
4,684 |
(1,294) |
|||||||||
Total Pretax |
$ |
(1,927) |
$ |
4,500 |
$ |
(10,456) |
$ |
1,035 |
|||||
Total After Tax |
$ |
(1,465) |
$ |
3,420 |
$ |
(7,947) |
$ |
787 |
Table IV |
|||||||||||||||||||||||||
Effects of Foreign Currency Translation |
|||||||||||||||||||||||||
The Company's foreign subsidiaries transact business and report financial results in their respective local currencies. As a result, foreign subsidiary income statements are translated into U.S. dollars at average foreign exchange rates appropriate for the reporting period. Because foreign currency exchange rates fluctuate against the U.S. dollar over time, foreign currency translation affects period-to-period comparisons of financial statement items (i.e., because foreign exchange rates fluctuate, similar period-to-period local currency results for a foreign subsidiary may translate into different U.S. dollar results). The table below presents the impact that foreign currency translation had on the changes in consolidated net sales and various income line items for the three and twelve month periods ending December 31, 2019 as compared to 2018: |
|||||||||||||||||||||||||
($ in millions) |
Three Months Ended December 31 |
Increase |
Change Due to Foreign Currency Translation |
Twelve Months Ended December 31 |
Increase (Decrease) |
Change |
|||||||||||||||||||
2019 |
2018 |
2019 |
2018 |
||||||||||||||||||||||
Net Sales |
$ |
445.0 |
$ |
466.7 |
$ |
(21.7) |
$ |
(4.1) |
$ |
1,858.7 |
$ |
1,993.9 |
$ |
(135.2) |
$ |
(37.3) |
|||||||||
Gross Profit * |
84.7 |
74.6 |
10.1 |
(0.4) |
339.7 |
339.3 |
0.4 |
(5.0) |
|||||||||||||||||
Operating Income * |
28.5 |
35.5 |
(7.0) |
- |
127.3 |
149.3 |
(22.0) |
(2.5) |
|||||||||||||||||
Pretax Income * |
27.9 |
30.6 |
(2.7) |
- |
125.9 |
137.8 |
(11.9) |
(2.4) |
* The 2018 amounts for the noted line items have been retrospectively changed from the amounts originally reported as a result of the Company's first quarter 2019 change in method of accounting for U.S. inventory valuation from LIFO to FIFO. |
Table V |
|||||
Stepan Company |
|||||
Consolidated Balance Sheets |
|||||
December 31, 2019 and December 31, 2018 |
|||||
December 31, |
December 31, |
||||
ASSETS |
|||||
Current Assets * |
$ |
818,789 |
$ |
833,893 |
|
Property, Plant & Equipment, Net |
639,317 |
608,892 |
|||
Other Assets |
121,261 |
71,829 |
|||
Total Assets * |
$ |
1,579,367 |
$ |
1,514,614 |
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|||||
Current Liabilities |
$ |
339,114 |
$ |
338,582 |
|
Deferred Income Taxes * |
23,391 |
24,961 |
|||
Long-term Debt |
198,532 |
239,022 |
|||
Other Non-current Liabilities |
125,834 |
103,864 |
|||
Total Stepan Company Stockholders' Equity * |
891,783 |
807,425 |
|||
Noncontrolling Interest |
713 |
760 |
|||
Total Liabilities and Stockholders' Equity * |
$ |
1,579,367 |
$ |
1,514,614 |
* The 2018 amounts for the noted line items have been retrospectively changed from the amounts originally reported as a result of the Company's first quarter 2019 change in method of accounting for U.S. inventory valuation from LIFO to FIFO. |
View original content:http://www.prnewswire.com/news-releases/stepan-reports-fourth-quarter-and-full-year-2019-results-301008192.html
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