NORTHFIELD - Stepan Company (NYSE: SCL) today reported.
Second Quarter Highlights
Reported net income was a record $43.3 million, or $1.85 per diluted share, versus $35.7 million, or $1.54 per diluted share, in the prior year. Adjusted net income was a second quarter record $42.2 million, or $1.81 per diluted share, versus $38.3 million, or $1.65 per diluted share, in the prior year. Total Company sales volume increased 5% versus the prior year.
Surfactant operating income was $45.9 million versus $48.5 million in the prior year. This decrease was largely attributable to higher North American supply chain costs due to inflationary pressures and higher planned maintenance costs. Global Surfactant sales volume decreased 6% but the associated impact was more than offset by improved margins, product and customer mix. Consumer product sales volume was negatively impacted by feedstock supply issues following the first quarter 2021 severe weather in Texas, customer inventory rebalancing efforts and lower demand for cleaning products versus the pandemic peak in 2020. Higher demand for products sold into our institutional cleaning and functional product end markets partially offset the above.
Polymer operating income was $23.0 million versus $15.5 million in the prior year. This increase was primarily attributable to a 44% increase in global Polymer sales volume. Global rigid polyol volume was up 41% versus the prior year largely due to the INVISTA polyester polyol acquisition. Global rigid polyol volume, excluding the INVISTA acquisition, was up 7% versus the prior year. Higher demand within the phthalic anhydride and specialty polyols businesses also contributed to the sales volume growth.
Specialty Product operating income was $7.0 million versus $3.2 million in the prior year. This increase was primarily attributable to order timing differences within our food and flavor business and improved margins within our medium chain triglycerides (MCT) product line.
The effect of foreign currency translation positively impacted net sales by 4% and net income by $1.4 million, or $0.06 per diluted share, versus the prior year.
First Half Highlights
Reported net income was a record $83.9 million, or $3.59 per diluted share, versus $63.3 million, or $2.72 per diluted share, in the prior year. Adjusted net income was a record $84.6 million, or $3.62 per diluted share, versus $62.5 million, or $2.69 per diluted share, in the prior year. The prior year first half results were negatively impacted by the first quarter 2020 Millsdale, IL plant power outage. Total Company sales volume was up 6% compared to the first six months of 2020. A 39% increase in global Polymer sales volume was partially offset by a 3% decrease in global Surfactant sales volume.
Corporate Profile
Stepan Company is a major manufacturer of specialty and intermediate chemicals used in a broad range of industries. Stepan is a leading merchant producer of surfactants, which are the key ingredients in consumer and industrial cleaning and disinfection compounds and in agricultural and oilfield solutions. The Company is also a leading supplier of polyurethane polyols used in the expanding thermal insulation market, and CASE (Coatings, Adhesives, Sealants, and Elastomers) industries.
Headquartered in Northfield, Illinois, Stepan utilizes a network of modern production facilities located in North and South America, Europe and Asia.
The Company's common stock is traded on the New York Stock Exchange (NYSE) under the symbol SCL.
Contact:
Luis E. Rojo
Tel: 847-446-7500
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 Stepan Company's plans, objectives, strategies, financial performance and outlook, trends, the amount and timing of future cash distributions, prospects or future events and involve known and unknown risks that are difficult to predict. As a result, Stepan Company's actual financial results, performance, achievements or prospects may differ materially from those expressed or implied by these forward-looking statements.
In some cases, you can identify forward-looking statements by the use of words such as 'may,' 'could,' 'expect,' 'intend,' 'plan,' 'seek,' 'anticipate,' 'believe,' 'estimate,' 'guidance,' 'predict,' 'potential,' 'continue,' 'likely,' 'will,' 'would,' 'should,' 'illustrative' and variations of these terms and similar expressions, or the negative of these terms or similar expressions. Such forward-looking statements are necessarily based upon estimates and assumptions that, while considered reasonable by Stepan Company and its management based on their knowledge and understanding of the business and industry, are inherently uncertain. These statements are not guarantees of future performance, and stockholders should not place undue reliance on forward-looking statements.
There are a number of risks, uncertainties and other important factors, many of which are beyond Stepan Company's control, that could cause actual results to differ materially from the forward-looking statements contained in this news release. Such risks, uncertainties and other important factors include, among other factors, the risks, uncertainties and factors described in Stepan Company's Form 10-K, Form 10-Q and Form 8-K reports and exhibits to those reports, and include (but are not limited to) risks and uncertainties related to the impact of the COVID-19 pandemic; accidents, unplanned production shutdowns or disruptions in manufacturing facilities; reduced demand due to customer product reformulations or new technologies; our inability to successfully develop or introduce new products; compliance with laws; our ability to identify suitable acquisition candidates and successfully complete and integrate acquisitions; global competition; volatility of raw material and energy costs and supply; disruptions in transportation or significant changes in transportation costs; downturns in certain industries and general economic downturns; international business risks, including currency exchange rate fluctuations, legal restrictions and taxes; unfavorable resolution of litigation against us; maintaining and protecting intellectual property rights; our ability to access capital markets; global political, military, security or other instability; costs related to expansion or other capital projects; interruption or breaches of information technology systems; our ability to retain executive management and key personnel and our debt covenants.
These forward-looking statements are made only as of the date hereof, and Stepan Company undertakes no obligation to update or revise these forward-looking statements, whether as a result of new information, future events or otherwise.
STEPAN COMPANY 
