Stepan(US:SCL)2021-10-20 18:55Financial Performance - Q3 2021 net income was $36.9 million, or $1.59 per diluted share, an 11% increase compared to $33.2 million, or $1.43 per diluted share, in Q3 2020[8] - Q3 2021 adjusted net income was $36.4 million, or $1.57 per diluted share, flat compared to $36.4 million, or $1.56 per diluted share, in Q3 2020[8] - Surfactant net sales increased by 16% to $387.7 million, driven by a 20% increase in selling prices, but volume decreased by 6%[10] - Polymer net sales increased by 70% to $198.8 million, with selling prices up 44% and sales volume up 27%[11] - Specialty Product net sales increased by 15% to $16.1 million, with sales volume up 9%[12] Factors Affecting Performance - Surfactant operating income decreased by 16% or $6.7 million due to supply chain disruptions, lower sales volume, and the non-recurrence of a $2.2 million insurance recovery[10] - Polymer operating income decreased by 12% or $2.6 million, primarily due to supply chain disruptions and the non-recurrence of $4 million in one-time benefits[11] - Supply chain disruptions had an estimated impact of approximately $4 million on Surfactant operating income and $3 million on Polymer operating income[23, 30] Balance Sheet and Debt - Net debt increased by $62.7 million compared to the second quarter of 2021, with the net debt ratio increasing from 10% to 14%[13] - Net debt stood at $174.5 million, with a net debt to TTM adjusted EBITDA ratio of 0.60[66] Strategic Investments - Stepan acquired INVISTA's aromatic polyester polyol business in January 2021, expecting it to be accretive to EPS and EBITDA margins in 2021[45, 46] - The company is investing in alkoxylation capacity at its Pasadena, Texas facility, with an expected start-up in late 2023, adding approximately 75KTA of annual alkoxylation capacity[47]