Stepan(US:SCL)2025-02-19 12:00Financial Performance - Reported net income for Q4 2024 was $3.4 million, compared to a net loss of $1.2 million in the prior year, while adjusted net income decreased by 63% to $2.8 million[4]. - Adjusted EBITDA for Q4 2024 was $35.0 million, down 7% year-over-year, while EBITDA increased by 39% to $35.8 million[4][10]. - Net sales for Q4 2024 were $525.6 million, a decrease of 1.0% from $532.1 million in Q4 2023[26]. - Gross profit for Q4 2024 was $56.7 million, down 14.6% from $66.4 million in Q4 2023[26]. - Operating income for Q4 2024 increased to $7.7 million compared to $0.2 million in Q4 2023[26]. - Basic net income per share for Q4 2024 was $0.15, compared to a loss of $0.05 per share in Q4 2023[27]. - Total operating expenses for Q4 2024 were $49.0 million, a decrease from $58.0 million in Q4 2023[26]. - The total pre-tax income for the quarter was $1.016 million, a significant improvement from a pre-tax loss of $2.991 million in the prior year[36]. - Total corporate expenses decreased by 42% to $17.468 million from $30.005 million in the prior year[41]. - The company's total assets decreased to $2.304 billion from $2.363 billion year-over-year[45]. - Total debt decreased by $63.1 million to $625.4 million compared to September 30, 2024[47]. - The net debt ratio remained constant at 31% for the quarter[47]. - Adjusted EBITDA for the twelve months ended December 31, 2024, was $187.0 million, compared to $186.9 million in the previous year[51]. Sales and Market Performance - Global sales volume decreased by 1% year-over-year, with a 2.5% growth in the Surfactant business offset by demand weakness in Polymers[5][11]. - Surfactant net sales increased by 3% to $378.8 million, driven by a 5% increase in selling prices and a 1% growth in sales volume[11]. - Polymer net sales decreased by 12% to $129.8 million, with a 9% decline in sales volume primarily due to reduced global demand[11]. - Specialty Product net sales rose by 10% to $17.0 million, with sales volume increasing by 32%[12]. - Net sales for the three months ended December 31, 2024, were $525.6 million, down 1.2% from $532.1 million in the same period of 2023[39]. Operational Efficiency and Future Outlook - The company expects to start operations at its new Pasadena facility in Q1 2025, which is anticipated to drive volume growth and supply chain savings[14]. - The company aims for improved Adjusted EBITDA and positive free cash flow in 2025, driven by strategic investments and cost reduction initiatives[14]. - The company plans to continue focusing on product development and market expansion despite current economic challenges[22]. - Future outlook includes continued focus on product innovation and market expansion to drive revenue growth[53]. - The company plans to enhance operational efficiency through ongoing restructuring efforts and strategic investments in technology[53]. - The overall financial performance reflects a solid foundation for future growth, supported by strong user data and market demand[53]. Cash Flow and Expenses - Free cash flow for Q4 2024 was $32.1 million, with cash from operations amounting to $68.3 million[4][16]. - Research, development, and technical services expenses for Q4 2024 were $13.8 million, down from $15.3 million in Q4 2023[26]. - The company reported a significant reduction in deferred compensation expense, from $5.227 million in the prior year to an income of $574,000 in the current quarter[41]. - Depreciation and amortization expenses totaled $105.3 million, with $64.4 million from surfactants and $32.4 million from polymers[53]. - The company incurred a business restructuring and asset impairment expense of $12.0 million, along with environmental remediation costs of $1.0 million[53]. - Cash settled SARs resulted in a minor expense of $0.1 million, reflecting limited impact on overall financial performance[53].