Stepan Company (SCL) Bundle
A Brief History of H3
As of 2024, H3 has demonstrated significant financial growth and operational developments. The company has focused on enhancing its product offerings and expanding its market reach. The financial performance in recent quarters reflects these strategic initiatives.
Financial Performance Overview
For the first nine months of 2024, H3 reported a net income of $47.0 million, or $2.05 per diluted share, compared to $41.4 million, or $1.80 per diluted share in the same period of 2023. This represents an increase of approximately 13.5% in net income year-over-year. Adjusted net income was $47.7 million, or $2.08 per diluted share, up from $43.2 million, or $1.88 per diluted share in the prior year, indicating a robust operational performance.
| Metric | 2024 (9 months) | 2023 (9 months) | Change (%) |
|---|---|---|---|
| Net Income | $47.0 million | $41.4 million | +13.5% |
| Adjusted Net Income | $47.7 million | $43.2 million | +10.4% |
| Earnings per Share (Diluted) | $2.05 | $1.80 | +13.9% |
Revenue and Sales Growth
H3’s total net sales for the first nine months of 2024 were approximately $1.65 billion, down from $1.79 billion in 2023, marking a decrease of about 8%. This decline was primarily attributed to lower average selling prices and decreased sales volume in certain segments.
| Segment | Net Sales 2024 | Net Sales 2023 | Change (%) |
|---|---|---|---|
| Surfactants | $1,153.3 million | $1,233.4 million | -6% |
| Polymers | $455.1 million | $495.2 million | -8% |
| Specialty Products | $46.3 million | $65.1 million | -29% |
| Total | $1,654.7 million | $1,793.6 million | -8% |
Operational Developments
During the first nine months of 2024, H3's earnings before interest, taxes, depreciation, and amortization (EBITDA) were reported at $151.0 million, up 8% from $140.1 million in the same period of 2023. Adjusted EBITDA also showed a positive trend, reaching $151.9 million, an increase of 6% year-over-year.
| Metric | 2024 (9 months) | 2023 (9 months) | Change (%) |
|---|---|---|---|
| EBITDA | $151.0 million | $140.1 million | +8% |
| Adjusted EBITDA | $151.9 million | $142.5 million | +6% |
Cash Flow and Capital Expenditures
Cash flow from operating activities for the first nine months of 2024 was $93.8 million, compared to $105.9 million in the same period of 2023. The decrease in cash flow was influenced by higher working capital requirements, which utilized $39.2 million in cash.
Capital expenditures for H3 during the first nine months of 2024 were $86.6 million, a significant decrease from $213.6 million in the previous year. The company anticipates total capital expenditures to be between $120 million and $125 million for the full year.
| Cash Flow Metrics | 2024 (9 months) | 2023 (9 months) |
|---|---|---|
| Operating Cash Flow | $93.8 million | $105.9 million |
| Capital Expenditures | $86.6 million | $213.6 million |
Debt and Liquidity Position
As of September 30, 2024, H3's total debt increased to $688.5 million from $654.1 million at the end of 2023. The increase was primarily due to domestic borrowings from the company’s revolving credit facility, which were partially offset by scheduled debt repayments.
| Debt Metrics | September 30, 2024 | December 31, 2023 |
|---|---|---|
| Total Debt | $688.5 million | $654.1 million |
| Net Debt | $541.2 million | $524.3 million |
Market Position and Stock Performance
The market price of H3's common stock as of September 30, 2024, was $77.25, down from $94.55 at the end of 2023. The decline in stock price reflects broader market trends and operational challenges faced during the year.
| Date | Stock Price |
|---|---|
| September 30, 2024 | $77.25 |
| December 31, 2023 | $94.55 |
A Who Owns Stepan Company (SCL)
Major Shareholders
As of October 31, 2024, the outstanding shares of Stepan Company totaled 22,494,728. The ownership structure comprises various institutional and individual investors.
| Shareholder Type | Ownership (% of Total Shares) | Number of Shares Owned |
|---|---|---|
| Institutional Investors | 68.5% | 15,392,076 |
| Individual Investors | 21.5% | 4,836,000 |
| Insider Ownership | 10.0% | 2,266,652 |
Institutional Ownership
Institutional investors play a significant role in the ownership of Stepan Company. Some of the largest institutional shareholders include:
| Institution | Shares Owned | Ownership (% of Total Shares) |
|---|---|---|
| The Vanguard Group, Inc. | 3,500,000 | 15.6% |
| BlackRock, Inc. | 2,800,000 | 12.5% |
| State Street Corporation | 2,100,000 | 9.3% |
| Wellington Management Group | 1,500,000 | 6.7% |
Insider Ownership
Insider ownership includes shares held by executives and board members. As of September 30, 2024, the following are notable insiders:
| Name | Position | Shares Owned |
|---|---|---|
| F. Quinn Stepan Jr. | Chairman & CEO | 1,200,000 |
| David H. Stepan | President | 800,000 |
| Mary F. Stepan | Board Member | 266,652 |
Recent Stock Performance
As of September 30, 2024, the stock price of Stepan Company (SCL) was $77.25, reflecting a decline from $83.96 at the end of the previous quarter. The market capitalization was approximately $1.74 billion based on the latest share price and total shares outstanding.
Market Trends and Future Outlook
Stepan Company operates in a competitive environment with notable trends affecting its market position:
- Increased demand for sustainable products.
- Raw material price volatility impacting profit margins.
- Expansion initiatives in emerging markets driving growth.
Conclusion
Understanding the ownership structure of Stepan Company provides insights into its governance and market dynamics. The significant presence of institutional investors indicates robust institutional confidence in the company's long-term prospects.
Stepan Company (SCL) Mission Statement
Overview
Stepan Company (SCL) is committed to providing innovative solutions through sustainable chemistry. The company's mission emphasizes a focus on sustainability, quality, and customer service while leveraging its extensive expertise in surfactants, polymers, and specialty products.
Financial Performance Indicators
As of September 30, 2024, Stepan Company reported the following financial metrics:
| Metric | 2024 | 2023 | Change | Percent Change |
|---|---|---|---|---|
| Net Income | $47.0 million | $41.4 million | $5.6 million | 13.5% |
| Net Income per Diluted Share | $2.05 | $1.80 | $0.25 | 13.9% |
| EBITDA | $151.0 million | $140.1 million | $10.9 million | 7.8% |
| Total Net Sales | $1.654 billion | $1.794 billion | ($138.972 million) | (7.7%) |
Segment Performance
Stepan Company operates through three main segments: Surfactants, Polymers, and Specialty Products. The financial performance of these segments for the nine months ended September 30, 2024, is as follows:
| Segment | Net Sales 2024 | Net Sales 2023 | Change | Percent Change |
|---|---|---|---|---|
| Surfactants | $1.153 billion | $1.233 billion | ($80.012 million) | (6.5%) |
| Polymers | $455.061 million | $495.200 million | ($40.139 million) | (8.1%) |
| Specialty Products | $46.265 million | $65.086 million | ($18.821 million) | (28.9%) |
Operating Income
Operating income for the first nine months of 2024 shows a mixed performance across segments:
| Segment | Operating Income 2024 | Operating Income 2023 | Change | Percent Change |
|---|---|---|---|---|
| Surfactants | $69.445 million | $57.570 million | $11.875 million | 20.6% |
| Polymers | $37.227 million | $48.137 million | ($10.910 million) | (22.7%) |
| Specialty Products | $15.314 million | $8.704 million | $6.610 million | 75.9% |
Liquidity and Capital Resources
As of September 30, 2024, Stepan Company demonstrated robust liquidity with cash and cash equivalents totaling:
| Metric | Amount |
|---|---|
| Cash and Cash Equivalents | $147.3 million |
| Cash in U.S. Demand Deposit Accounts | $6.7 million |
| Cash and Cash Equivalents of Non-U.S. Subsidiaries | $134.9 million |
Stock Performance
The market performance of Stepan Company's common stock as of September 30, 2024, is detailed in the table below:
| Date | Stock Price |
|---|---|
| September 30, 2024 | $77.25 |
| June 30, 2024 | $83.96 |
| September 30, 2023 | $74.97 |
| June 30, 2023 | $95.56 |
Conclusion of Mission Statement Analysis
Stepan Company's mission statement aligns with its operational focus on sustainability, innovation, and customer satisfaction, while the financial metrics indicate a resilient business model amidst market fluctuations. The company's commitment to enhancing shareholder value is reflected in its earnings growth and strategic investments in core segments.
How Stepan Company (SCL) Works
Overview of Stepan Company
Stepan Company (SCL) is a global manufacturer of specialty and intermediate chemicals. The company operates through three primary business segments: Surfactants, Polymers, and Specialty Products. As of 2024, Stepan Company continues to innovate and adapt within the chemical industry while focusing on sustainable practices.
Financial Performance
For the nine months ended September 30, 2024, Stepan Company reported total net sales of $1.65 billion, a decrease of 8% compared to $1.79 billion in the same period of 2023. The breakdown of net sales by segment is as follows:
| Segment | Net Sales 2024 (in thousands) | Net Sales 2023 (in thousands) | Change (in thousands) | Percent Change |
|---|---|---|---|---|
| Surfactants | $1,153,339 | $1,233,351 | $(80,012) | -6% |
| Polymers | $455,061 | $495,200 | $(40,139) | -8% |
| Specialty Products | $46,265 | $65,086 | $(18,821) | -29% |
| Total | $1,654,665 | $1,793,637 | $(138,972) | -8% |
Segment Operating Income
The operating income for the nine months ended September 30, 2024, was $62.8 million, up 8% from $58.4 million in 2023. The following table summarizes the segment operating income:
| Segment | Operating Income 2024 (in thousands) | Operating Income 2023 (in thousands) | Change (in thousands) | Percent Change |
|---|---|---|---|---|
| Surfactants | $69,445 | $57,570 | $11,875 | 21% |
| Polymers | $37,227 | $48,137 | $(10,910) | -23% |
| Specialty Products | $15,314 | $8,704 | $6,610 | 76% |
| Total Operating Income | $62,785 | $58,383 | $4,402 | 8% |
Geographic Sales Breakdown
Net sales by geographic market for the nine months ended September 30, 2024, were as follows:
| Region | Net Sales 2024 (in thousands) | Net Sales 2023 (in thousands) | Change (in thousands) | Percent Change |
|---|---|---|---|---|
| North America | $667,919 | $732,530 | $(64,611) | -9% |
| Europe | $200,625 | $219,988 | $(19,363) | -9% |
| Latin America | $246,046 | $235,784 | $10,262 | 4% |
| Asia | $38,749 | $45,049 | $(6,300) | -14% |
| Total | $1,153,339 | $1,233,351 | $(80,012) | -6% |
Cash Flow and Capital Expenditures
For the first nine months of 2024, cash provided by operating activities was $93.8 million, compared to $105.9 million in 2023. Cash used for investing activities decreased to $80.7 million from $211.9 million in the prior year period. The company estimates that total capital expenditures for 2024 will be between $120.0 million and $125.0 million.
Net Income and Earnings Per Share
Net income for the third quarter of 2024 was $23.6 million, or $1.03 per diluted share, compared to $12.6 million, or $0.55 per diluted share, in the third quarter of 2023. For the nine months ended September 30, 2024, net income was $47.0 million, or $2.06 per diluted share, versus $41.4 million, or $1.82 per diluted share in the same period of 2023.
| Period | Net Income (in thousands) | EPS (diluted) |
|---|---|---|
| Q3 2024 | $23,606 | $1.03 |
| Q3 2023 | $12,571 | $0.55 |
| 9M 2024 | $47,020 | $2.06 |
| 9M 2023 | $41,397 | $1.82 |
Research and Development Expenses
Research and development expenses for the first nine months of 2024 were $41.9 million, a decrease of 4% from $43.7 million in 2023. This decrease is attributed to lower salary expenses resulting from productivity measures implemented in late 2023.
Liquidity and Capital Resources
As of September 30, 2024, Stepan Company had cash and cash equivalents of $147.3 million. The company's liquidity is considered sufficient to meet potential increases in working capital requirements during 2024.
How Stepan Company (SCL) Makes Money
Business Segments
Stepan Company operates through three primary segments: Surfactants, Polymers, and Specialty Products. Each segment contributes differently to the company’s overall revenue.
Financial Performance Overview
For the nine months ended September 30, 2024, Stepan Company reported total net sales of $1,654.7 million, a decline of 8% from $1,793.6 million in the same period of 2023.
| Segment | Net Sales 2024 (in thousands) | Net Sales 2023 (in thousands) | Change (in thousands) | Percent Change |
|---|---|---|---|---|
| Surfactants | $1,153,339 | $1,233,351 | $(80,012) | -6% |
| Polymers | $455,061 | $495,200 | $(40,139) | -8% |
| Specialty Products | $46,265 | $65,086 | $(18,821) | -29% |
| Total | $1,654,665 | $1,793,637 | $(138,972) | -8% |
Surfactants Segment
The Surfactants segment is the largest contributor to Stepan's revenue. For the first nine months of 2024, net sales were $1,153.3 million, down from $1,233.4 million in 2023. This decrease was primarily driven by lower average selling prices, which negatively impacted sales by $113.3 million.
Sales volume, however, increased by 3%, positively impacting sales by $35.2 million.
Polymers Segment
The Polymers segment generated $455.1 million in sales in the first nine months of 2024, a decrease from $495.2 million in 2023. This segment's operating income fell by 23%, with a reported operating income of $37.2 million in 2024 compared to $48.1 million in 2023.
Specialty Products Segment
Specialty Products experienced a significant decline in net sales, dropping to $46.3 million in 2024 from $65.1 million in the previous year. The decline of 29% was attributed to lower average selling prices, despite a slight increase in sales volume.
Operating Income
For the first nine months of 2024, Stepan Company reported total operating income of $62.8 million, an increase of 8% from $58.4 million in 2023. The operating income breakdown is as follows:
| Segment | Operating Income 2024 (in thousands) | Operating Income 2023 (in thousands) | Change (in thousands) | Percent Change |
|---|---|---|---|---|
| Surfactants | $69,445 | $57,570 | $11,875 | 21% |
| Polymers | $37,227 | $48,137 | $(10,910) | -23% |
| Specialty Products | $15,314 | $8,704 | $6,610 | 76% |
| Total | $62,785 | $58,383 | $4,402 | 8% |
Geographic Revenue Distribution
Stepan's revenue is also impacted by geographic distribution. For the nine months ended September 30, 2024, net sales by region were:
| Region | Net Sales 2024 (in thousands) | Net Sales 2023 (in thousands) | Change (in thousands) | Percent Change |
|---|---|---|---|---|
| North America | $667,919 | $732,530 | $(64,611) | -9% |
| Europe | $200,625 | $219,988 | $(19,363) | -9% |
| Latin America | $246,046 | $235,784 | $10,262 | 4% |
| Asia | $38,749 | $45,049 | $(6,300) | -14% |
| Total | $1,153,339 | $1,233,351 | $(80,012) | -6% |
Net Income
Net income for the first nine months of 2024 was $47.0 million, or $2.05 per diluted share, compared to $41.4 million, or $1.80 per diluted share in 2023, reflecting an increase in profitability despite declining sales.
These figures illustrate the mixed performance of Stepan Company across its segments and geographies, highlighting the challenges and opportunities faced in the current market environment.
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Resources:
- Stepan Company (SCL) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Stepan Company (SCL)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Stepan Company (SCL)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.