Stepan Co (SCL) has reported a 33.87 percent plunge in profit for the quarter ended Sep. 30, 2014. The company has earned $13.49 million, or $0.59 a share in the quarter, compared with $20.40 million, or $0.89 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $15.58 million, or $0.68 a share compared with $18.58 million or $0.81 a share, a year ago.
Revenue during the quarter grew 3.36 percent to $491.43 million from $475.47 million in the previous year period.
Gross margin for the quarter contracted 239 basis points over the previous year period to 13.25 percent. Total expenses were 95.47 percent of quarterly revenues, up from 93.46 percent for the same period last year.That has resulted in a contraction of 201 basis points in operating margin to 4.53 percent.
Operating income for the quarter was $22.25 million, compared with $31.08 million in the previous year period.
"Consistent with prior communications, our North American Surfactant business continued to be challenged by lower commodity volumes which negatively impacted corporate results", said F. Quinn Stepan, Jr., President and Chief Executive Officer. "Opportunities to improve surfactant asset utilization are being aggressively pursued. Our Polymer segment delivered solid earnings from strong North American polyol growth in both our traditional rigid foam insulation business and last year's polyester resin acquisition."
Working Capital
Stepan Co has witnessed a decline in the working capital over the last year. It stood at $336.70 million as at Sep. 30, 2014, down 1.84 percent or $6.30 million from $343 million on Sep. 30, 2013. Current ratio was at 2.24 as on Sep. 30, 2014, down from 2.29 on Sep. 30, 2013. Days sales outstanding went down to 27 days for the quarter compared with 56 days for the same period last year.
Debt Level
Stepan Co has recorded a decline in total debt over the last one year. It stood at $228.81 million as on Sep. 30, 2014, down 17.34 percent or $48 million from $276.80 million on Sep. 30, 2013.
Total debt was 19.41 percent of total assets as on Sep. 30, 2014, compared with 24 percent on Sep. 30, 2013. Debt to equity ratio was at 0.40 as on Sep. 30, 2014, down from 0.52 as on Sep. 30, 2013. Interest coverage ratio decreased to 7.82 for the quarter from 10.41 for the same period last year.
