Northfield, Illinois -- Stepan Co. has reported year-on-year sales up by 6 percent to $337 million in the first quarter of 2010 (Q1). Net income increased 36 percent to $20.7 million, compared to the same period the previous year.
Stepan's polymer business reported year-on-year sales up by 30 percent to $63 million in Q1, with gross profit and sales volume increasing by 67 percent and by 25 percent, respectively, compared to the same period the previous year, a 20 April Stepan statement said.
According to Stepan, the profit improvement was entirely in North America on the sales of polyol and pthalic anhydride (PA). Sales volumes of polyol in North America increased by 19 percent, the company said, adding that the majority of the polyol is used in insulation for new or replacement roofs.
Sales volumes of PA, which is a plasticiser used automotive, housing and boating markets, were up 25 percent in Q1, compared to the previous year, due to lower raw material costs in inventory, Stepan said.
Net debt increase by $22.1 million during the first quarter, "due to higher working capitals due to improved sales volumes," the company said, adding that it is in discussions to secure $40 million of additional long-term debt financing, which the company expects to obtain in the second quarter of 2010. Stepan said it intends to use the financing for capital expenditures, general corporate purposes and bolt-on acquisitions.
"Our record first quarter earnings were the result of sustained margins and improved volumes across all three business segments," said Quinn Stepan, president and ceo of Stepan. "We believe our core markets provide opportunities for additional profit growth. We are presently adding new capabilities to our surfactant plant in Brazil and expanding our polyol plant in Germany. These and other investments should create the opportunity for us to sustain our earnings momentum," he added. (RD)