The following is a summary of the Stepan Company (SCL) Q1 2024 Earnings Call Transcript:

Financial Performance:

• Stepan Company's adjusted EBITDA for Q1 2024 was up 5% YoY to $51.2 million.

• Global sales decreased 15% YoY due to lower selling prices and unfavorable product mix, partially offset by a 1% increase in global sales volume.

• Net sales in Q1 2024 decreased 15% YoY, primarily impacted by lower costs for raw materials and unfavorable product mix.

• The company generated positive free cash flow of $11.4 million in Q1 2024.

• Stepan successfully repaid $8.5 million in dividends with $125 million remaining under the share repurchase program.

• Adjusted net income decreased to $14.7 million in Q1 2024 compared to the prior year's $16.4 million.

Business Progress:

• Weakness in the agricultural and operational issues at their Millsdale site were counterbalanced by strong recovery in volumes across other core markets.

• Significant growth observed in Personal Care, Oilfield end markets, and in Latin American surfactant volumes.

• The construction of a new alkoxylation production facility in Pasadena, Texas, is around 90% complete and due to startup in Q4 2024.

• Added around 400 new Tier 2 and Tier 3 customers in Q1 2024, further diversifying its customer base.

• Stepan's initiatives are on track to deliver $50 million in cost savings in 2024.

• Continuous investment in business growth and returning cash to shareholders is planned.

• Expectation of EBITDA improvement in the second half of the year due to predicted rebound in agriculture business.

• Increased demand at the farmer level is anticipated starting in Q3 or Q4 of the year due to expected inventory destocking phase in agriculture business.

More details: Stepan IR

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