NORTHBROOK, Ill., April 30, 2024 /PRNewswire/ -- Stepan Company (NYSE:SCL) today reported: First Quarter 2024 Highlights Reported net income was $13.9 million. Adjusted net income(1) was $14.7 million, down 11% year-over-year, largely due to a higher effective tax rate in 2024. EBITDA(2) was $50.2 million. Adjusted EBITDA(2) 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(3) 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. "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 $50 million cost reduction program.  We delivered adjusted EBITDA growth of 5% and generated positive free cash flow despite higher operating costs related to operational interruptions at our Millsdale site, pre-commissioning expenses at our new Alkoxylation investment in Pasadena, Texas and the continuing impact of Agricultural destocking." Financial Summary Three Months EndedMarch 31, ($ in thousands, except per share data) 2024 2023 %Change Net Sales $ 551,418 $ 651,436 (15) % Operating Income $ 20,169 $ 21,057 (4) % Net Income $ 13,893 $ 16,142 (14) % Earnings per Diluted Share $ 0.61 $ 0.70 (13) % Adjusted Net Income * $ 14,656 $ 16,419 (11) % Adjusted Earnings per   Diluted Share * $ 0.64 $ 0.71 (10) % * See Table II for reconciliations of non-GAAP adjusted net income and adjusted earnings per diluted share. Percentage Change in Net Sales Net sales in the first quarter of 2024 decreased 15% year-over-year primarily due to lower selling prices that were mainly attributable to the pass-through of lower raw material costs and less favorable product mix.  These lower selling prices were partially offset by a 1% increase in global sales volume and the favorable impact of foreign currency translation. Three Months EndedMarch 31, 2024 Volume 1 % Selling Price & Mix (18) % Foreign Translation 2 % Total (15) % Segment Results Three Months EndedMarch 31, ($ in thousands) 2024 2023 %Change Net Sales Surfactants $ 390,820 $ 467,828 (16) % Polymers $ 145,508 $ 161,127 (10) % Specialty Products $ 15,090 $ 22,481 (33) % Total Net Sales $ 551,418 $ 651,436 (15) %   Three Months EndedMarch 31, ($ in thousands, all amounts pre-tax) 2024 2023 %Change Operating Income Surfactants $ 26,079 $ 27,056 (4) % Polymers $ 8,382 $ 10,004 (16) % Specialty Products $ 4,268 $ 2,530 69 % Total Segment   Operating Income $ 38,729 $ 39,590 (2) % Corporate Expenses $ (18,560) $ (18,533) 0 % Consolidated   Operating Income $ 20,169 $ 21,057 (4) %   Three Months EndedMarch 31, ($ in millions) 2024 2023 %Change EBITDA    Surfactants $ 43.8 $ 42.4 3 %    Polymers $ 16.4 $ 18.3 (10) %    Specialty Products $ 5.8 $ 3.9 49 %    Unallocated Corporate $ (15.8) $ (16.3) (3) % Consolidated EBITDA $ 50.2 $ 48.3 4 % Adjusted EBITDA    Surfactants $ 43.8 $ 42.3 4 %    Polymers $ 16.4 $ 18.3 (10) %    Specialty Products $ 5.8 $ 3.9 49 %    Unallocated Corporate $ (14.8) $ (15.8) (6) % Consolidated Adjusted EBITDA $ 51.2 $ 48.7 5 % Consolidated adjusted EBITDA increased $2.5 million, or 5%, year-over-year as slightly higher sales volume and margin improvement more than offset $5.8 million of negative impact associated with the operational interruptions at the Millsdale plant site.   Surfactant net sales were $390.8 million for the quarter, a 16% decrease versus the prior year. Selling prices were down 18% primarily due to the pass-through of lower raw material costs, less favorable product mix and competitive pricing pressures in Latin America. Sales volume was flat year-over-year as double digit growth within the Personal Care end markets, driven by prior year investments in Low 1,4 Dioxane, the Oil Field end markets and with our Distribution partners was offset by lower Agricultural demand due to continued customer and channel inventory destocking. Foreign currency translation positively impacted net sales by 2%. Surfactant adjusted EBITDA(2) for the quarter increased $1.5 million, or 4%, versus the prior year. This increase was primarily driven by margin improvement that was partially offset by pre-operating expenses at the Company's new alkoxylation production facility being built in Pasadena, Texas and higher expenses associated with operational interruptions at the Millsdale plant. Polymer net sales were $145.5 million for the quarter, a 10% decrease versus the prior year. Selling prices decreased 14%, primarily due to the pass-through of lower raw material costs. Sales volume increased 1% in the quarter as a 4% increase in global Rigid Polyols and higher demand within the Specialty Polyols business was mostly offset by lower Phthalic Anhydride volume. Rigid Polyols experienced growth in all global regions. Foreign currency translation positively impacted net sales by 3%. Polymer adjusted EBITDA(2) decreased $1.9 million, or 10%, versus the prior year primarily due to higher costs incurred at the Millsdale plant site due to operational interruptions. Specialty Product net sales were $15.1 million for the quarter, a 33% decrease versus the prior year. Sales volume was up 11% versus the prior year while adjusted EBITDA(2) increased $1.9 million, or 49%. The increase in adjusted EBITDA(2) was primarily due to both higher unit margins and sales volume within the MCT product line. Outlook "Looking forward, we believe sales volumes will continue to gradually improve due to ongoing recovery in Rigid Polyols and growth in Surfactant volumes including the expected recovery of the Agricultural business in the second half of the year," said Scott Behrens, President and Chief Executive Officer.  "We remain focused on delivering $50 million in pre-tax savings from our previously shared cost reduction program to help offset inflationary pressures, increased expenses associated with the commissioning of our new Pasadena alkoxylation assets, higher incentive-based compensation expenses and expenses associated with the operational issues at our Millsdale site.  Free cash flow should continue to improve versus prior year as we finish construction on our Pasadena investment and benefit from higher Agriculture volumes in the second half of the year.  Continued gradual growth in market volumes, improved operational performance and our continued focus on cost reduction should position us to deliver full year adjusted EBITDA growth and positive free cash flow.  We remain confident in our long-term growth and innovation initiatives."  Notes (1) Adjusted net income and adjusted earnings per share are non-GAAP measures which exclude deferred compensation income/expense, cash-settled stock appreciation rights (SARs) income/expense, certain environmental remediation-related costs 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. (2) EBITDA and adjusted EBITDA are non-GAAP measures.  See Table VI for calculations and GAAP reconciliations of EBITDA and adjusted EBITDA. (3) Free Cash Flow is a non-GAAP measure and reflects cash generated from operations minus capital expenditures. Conference Call Stepan Company will host a conference call to discuss its fourth quarter and full year results at 8:00 a.m. ET (7:00 a.m. CT) on April 30, 2024. The call can be accessed by phone and webcast. To access the call by phone, please click on this Registration Link, complete the form and you will be provided with dial in details and a PIN.  To avoid delays, we encourage participants to dial into the conference call ten minutes ahead of the scheduled start time.  The webcast can be accessed through the Investors/Conference Calls page at www.stepan.com. A webcast replay of the conference call will be available at the same location shortly after the call. Supporting Slides Slides supporting this press release will be made available at www.stepan.com through the Investors/Presentations page at approximately the same time as this press release is issued. 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 Northbrook, 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. For more information about Stepan Company please visit the Company online at www.stepan.com More information about Stepan's sustainability program can be found on the Sustainability page at www.stepan.com 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, ...