Northfield, Illinois-Stepan Co. announced 1 Feb that it will take a $3.0 million pretax charge ($2.3 million after tax) in its fourth quarter 2006 results, to settle personal injury claims by 19 people. These relate to a site in Wilmington, Massachusetts, which Stepan sold 26 years ago.
While not admitting liability, Stepan said it has weighed up the uncertainties and costs of litigation and settled "in the best interest of all the parties," to resolves "claims of injury alleged to have been caused by groundwater contamination."
In a separate matter related to this same site, Stepan has to contribute towards the environmental remediation costs for the site to its current owner. For the current quarter, a sum of $0.4 million pre tax ($0.3 million after tax) has been set aside to cover the revised estimate of Stepan's projected share of future costs. Stepan said to date it has paid $1.2 million already for remediation at the site. The company said it has a reserve of $1.1 million for current and future remediation costs at this site.
As a result of the additional Q4 charge, Stepan said it is revising its earlier earnings forecast to a Q4 net loss in the range of $5.5 to $6.5 million compared to a loss of $0.4 million in 2005. "