Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2015 | Jul. 21, 2015 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2015 | |
Document Fiscal Year Focus | 2,015 | |
Document Fiscal Period Focus | Q2 | |
Trading Symbol | SCL | |
Entity Registrant Name | STEPAN CO | |
Entity Central Index Key | 94,049 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 22,298,682 |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Income Statement [Abstract] | ||||
Net Sales | $ 452,414 | $ 504,111 | $ 912,865 | $ 981,553 |
Cost of Sales | 372,902 | 432,522 | 756,911 | 846,940 |
Gross Profit | 79,512 | 71,589 | 155,954 | 134,613 |
Operating Expenses: | ||||
Selling | 14,265 | 13,493 | 27,262 | 27,639 |
Administrative | 24,055 | 9,052 | 43,394 | 23,483 |
Research, development and technical services | 12,597 | 12,130 | 24,387 | 24,054 |
Total Operating expenses | 50,917 | 34,675 | 95,043 | 75,176 |
Gain on sale of product line | 2,862 | |||
Operating Income | 28,595 | 36,914 | 63,773 | 59,437 |
Other Income (Expense): | ||||
Interest, net | (2,869) | (3,021) | (6,923) | (5,978) |
Loss from equity in joint ventures | (1,815) | (1,243) | (3,055) | (2,694) |
Other, net (Note 13) | 235 | 556 | 887 | 530 |
Nonoperating Income (Expense), Total | (4,449) | (3,708) | (9,091) | (8,142) |
Income Before Provision for Income Taxes | 24,146 | 33,206 | 54,682 | 51,295 |
Provision for Income Taxes | 7,205 | 8,838 | 16,455 | 13,919 |
Net Income | 16,941 | 24,368 | 38,227 | 37,376 |
Net Income Attributable to Noncontrolling Interests (Note 2) | (27) | (15) | (43) | (5) |
Net Income Attributable to Stepan Company | $ 16,914 | $ 24,353 | $ 38,184 | $ 37,371 |
Net Income Per Common Share Attributable to Stepan Company (Note 9): | ||||
Basic | $ 0.74 | $ 1.07 | $ 1.68 | $ 1.64 |
Diluted | $ 0.74 | $ 1.06 | $ 1.67 | $ 1.63 |
Shares Used to Compute Net Income Per Common Share Attributable to Stepan Company (Note 9): | ||||
Basic | 22,742 | 22,763 | 22,731 | 22,768 |
Diluted | 22,871 | 22,931 | 22,850 | 22,948 |
Dividends Declared Per Common Share | $ 0.18 | $ 0.17 | $ 0.36 | $ 0.34 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Statement Of Income And Comprehensive Income [Abstract] | ||||
Net income | $ 16,941 | $ 24,368 | $ 38,227 | $ 37,376 |
Other comprehensive income (loss): | ||||
Foreign currency translation adjustments (Note 10) | 5,957 | 3,718 | (19,195) | 3,812 |
Pension liability adjustment, net of tax (Note 10) | 750 | 410 | 1,499 | 820 |
Derivative instrument activity, net of tax (Note 10) | 16 | 1 | (26) | 4 |
Other comprehensive income (loss) | 6,723 | 4,129 | (17,722) | 4,636 |
Comprehensive income | 23,664 | 28,497 | 20,505 | 42,012 |
Comprehensive (income) loss attributable to noncontrolling interests (Note 2) | (44) | 9 | (45) | 42 |
Comprehensive income attributable to Stepan Company | $ 23,620 | $ 28,506 | $ 20,460 | $ 42,054 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
Current Assets: | ||
Cash and cash equivalents | $ 82,365 | $ 85,215 |
Receivables, net | 264,496 | 270,436 |
Inventories (Note 6) | 178,582 | 183,233 |
Deferred income taxes | 15,781 | 15,364 |
Other current assets | 23,160 | 21,308 |
Total current assets | 564,384 | 575,556 |
Property, Plant and Equipment: | ||
Cost | 1,417,600 | 1,385,851 |
Less: accumulated depreciation | (880,763) | (861,656) |
Property, plant and equipment, net | 536,837 | 524,195 |
Goodwill, net | 11,398 | 11,502 |
Other intangible assets, net | 19,379 | 20,803 |
Long-term investments (Note 3) | 20,273 | 20,217 |
Other non-current assets | 9,289 | 9,741 |
Total assets | 1,161,560 | 1,162,014 |
Current Liabilities: | ||
Current maturities of long-term debt (Note 12) | 24,826 | 27,034 |
Accounts payable | 140,047 | 156,983 |
Accrued liabilities | 69,100 | 65,496 |
Total current liabilities | 233,973 | 249,513 |
Deferred income taxes | 15,453 | 15,804 |
Long-term debt, less current maturities (Note 12) | 235,644 | 246,897 |
Other non-current liabilities | $ 124,528 | $ 112,856 |
Commitments and Contingencies (Note 7) | ||
Equity: | ||
Common stock, $1 par value; authorized 30,000,000 shares; Issued shares 25,685,308 in 2015 and 25,640,090 shares in 2014 | $ 25,685 | $ 25,640 |
Additional paid-in capital | 142,286 | 139,573 |
Accumulated other comprehensive loss (Note 10) | (101,669) | (83,945) |
Retained earnings | 550,663 | 520,540 |
Less: Common treasury stock, at cost, 3,386,626 shares in 2015 and 3,384,443 shares in 2014 | (66,446) | (66,262) |
Total Stepan Company stockholders’ equity | 550,519 | 535,546 |
Noncontrolling interests (Note 2) | 1,443 | 1,398 |
Total equity | 551,962 | 536,944 |
Total liabilities and equity | $ 1,161,560 | $ 1,162,014 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Jun. 30, 2015 | Dec. 31, 2014 |
Statement Of Financial Position [Abstract] | ||
Common stock, par value | $ 1 | $ 1 |
Common stock, shares authorized | 30,000,000 | 30,000,000 |
Common stock, shares issued | 25,685,308 | 25,640,090 |
Treasury stock, shares | 3,386,626 | 3,384,443 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2015 | Jun. 30, 2014 | |
Cash Flows From Operating Activities | ||
Net income | $ 38,227 | $ 37,376 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 32,859 | 32,482 |
Deferred compensation | 8,150 | (5,665) |
Realized and unrealized gains on long-term investments | (642) | (555) |
Stock-based compensation | 3,162 | 770 |
Deferred income taxes | (1,953) | 1,735 |
Other non-cash items | 508 | 3,234 |
Changes in assets and liabilities: | ||
Receivables, net | (679) | (39,083) |
Inventories | (245) | (30,614) |
Other current assets | (2,438) | 1,288 |
Accounts payable and accrued liabilities | 3,386 | 16,505 |
Pension liabilities | 358 | (970) |
Environmental and legal liabilities | (1,408) | (510) |
Deferred revenues | (781) | (366) |
Excess tax benefit from stock options and awards | (236) | (580) |
Net Cash Provided By Operating Activities | 78,268 | 15,047 |
Cash Flows From Investing Activities | ||
Expenditures for property, plant and equipment | (54,021) | (39,063) |
Business acquisition (Note 16) | (5,133) | |
Proceeds from sale of product line (Note14) | 3,262 | |
Sale of mutual funds | 823 | 890 |
Other, net | (2,569) | (4,277) |
Net Cash Used In Investing Activities | (57,638) | (42,450) |
Cash Flows From Financing Activities | ||
Revolving debt and bank overdrafts, net | (9,435) | 2,090 |
Other debt repayments | (2,503) | (1,371) |
Dividends paid | (8,061) | (7,592) |
Company stock repurchased | (4,924) | |
Stock option exercises | 359 | 1,449 |
Excess tax benefit from stock options and awards | 236 | 580 |
Other, net | (275) | (133) |
Net Cash (Used In) Financing Activities | (19,679) | (9,901) |
Effect of Exchange Rate Changes on Cash | (3,801) | 405 |
Net Decrease in Cash and Cash Equivalents | (2,850) | (36,899) |
Cash and Cash Equivalents at Beginning of Period | 85,215 | 133,347 |
Cash and Cash Equivalents at End of Period | 82,365 | 96,448 |
Supplemental Cash Flow Information | ||
Cash payments of income taxes, net of refunds | 6,873 | 16,753 |
Cash payments of interest | $ 6,046 | $ 6,221 |
Condensed Consolidated Financia
Condensed Consolidated Financial Statements | 6 Months Ended |
Jun. 30, 2015 | |
Accounting Policies [Abstract] | |
Condensed Consolidated Financial Statements | 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS The condensed consolidated financial statements included herein have been prepared by Stepan Company (Company), without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (US GAAP) have been condensed or omitted pursuant to such rules and regulations, although management believes that the disclosures are adequate and make the information presented not misleading. In the opinion of management, all adjustments, consisting only of normal recurring accruals, necessary to present fairly the Company’s financial position as of June 30, 2015, and its results of operations for the three and six months ended June 30, 2015 and 2014, and cash flows for the six months ended June 30, 2015 and 2014, have been included. These financial statements and related footnotes should be read in conjunction with the financial statements and related footnotes included in the Company’s 2014 Form 10-K. |
Reconciliations of Equity
Reconciliations of Equity | 6 Months Ended |
Jun. 30, 2015 | |
Equity [Abstract] | |
Reconciliations of Equity | 2. RECONCILIATIONS OF EQUITY Below are reconciliations of total equity, Company equity and equity attributable to noncontrolling interests for the six months ended June 30, 2015 and 2014: (In thousands) Total Equity Stepan Company Equity Noncontrolling Interests’ Equity (3) Balance at January 1, 2015 $ 536,944 $ 535,546 $ 1,398 Net income 38,227 38,184 43 Dividends (8,061 ) (8,061 ) — Common stock purchases (1) (273 ) (273 ) — Stock option exercises 359 359 — Defined benefit pension adjustments, net of tax 1,499 1,499 — Translation adjustments (19,195 ) (19,197 ) 2 Derivative instrument activity, net of tax (26 ) (26 ) — Other (2) 2,488 2,488 — Balance at June 30, 2015 $ 551,962 $ 550,519 $ 1,443 (In thousands) Total Equity Stepan Company Equity Noncontrolling Interests’ Equity (3) Balance at January 1, 2014 $ 553,741 $ 552,286 $ 1,455 Net income 37,376 37,371 5 Dividends (7,592 ) (7,592 ) — Common stock purchases (1) (5,058 ) (5,058 ) — Stock option exercises 1,449 1,449 — Defined benefit pension adjustments, net of tax 820 820 — Translation adjustments 3,812 3,859 (47 ) Derivative instrument activity, net of tax 4 4 — Other (2) 1,825 1,825 — Balance at June 30, 2014 $ 586,377 $ 584,964 $ 1,413 (1) (2) (3) |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 30, 2015 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 3. FAIR VALUE MEASUREMENTS The following describe the financial instruments held by the Company at June 30, 2015, and December 31, 2014, and the methods and assumptions used to estimate the instruments’ fair values: Cash and cash equivalents Carrying value approximates fair value because of the short maturity of the instruments. Derivative assets and liabilities Derivative assets and liabilities include the foreign currency exchange and interest rate contracts discussed in Note 4. Fair value and carrying value were the same because the contracts were recorded at fair value. The fair values of the foreign currency contracts were calculated as the difference between the applicable forward foreign exchange rates at the reporting date and the contracted foreign exchange rates multiplied by the contracted notional amounts. The fair values of the interest rate swaps were calculated as the difference between the contracted swap rate and the current market replacement swap rate multiplied by the present value of one basis point for the notional amount of the contract. See the table that follows the financial instrument descriptions for the reported fair values of derivative assets and liabilities. Long-term investments Long-term investments include the mutual fund assets the Company holds to fund a portion of its deferred compensation liabilities and all of its non-qualified supplemental executive defined contribution obligations (see the defined contribution plans section of Note 9). Fair value and carrying value were the same because the mutual fund assets were recorded at fair value in accordance with the fair value option rules established by the Financial Accounting Standards Board (FASB). Fair values for the mutual funds were calculated using the published market price per unit at the reporting date multiplied by the number of units held at the reporting date. See the table that follows the financial instrument descriptions for the reported fair value of long-term investments. Debt obligations The fair value of debt with original maturities greater than one year comprised the combined present values of scheduled principal and interest payments for each of the various loans, individually discounted at rates equivalent to those which could be obtained by the Company for new debt issues with durations equal to the average life to maturity of each loan. The fair values of the remaining Company debt obligations approximated their carrying values due to the short-term nature of the debt. The Company’s fair value measurements for debt fall in level 2 of the fair value hierarchy. At June 30, 2015, and December 31, 2014, the fair value of debt and the related carrying values, including current maturities, were as follows: (In thousands) June 30, 2015 December 31, 2014 Fair value $ 269,705 $ 285,441 Carrying value 260,470 273,931 The following tables present financial assets and liabilities measured on a recurring basis at fair value as of June 30, 2015, and December 31, 2014, and the level within the fair value hierarchy in which the fair value measurements fall: (In thousands) June 2015 Level 1 Level 2 Level 3 Mutual fund assets $ 20,273 $ 20,273 $ — $ — Derivative assets: Foreign currency contracts 59 — 59 — Total assets at fair value $ 20,332 $ 20,273 $ 59 $ — Derivative liabilities: Foreign currency contracts $ 149 $ — $ 149 $ — Interest rate contracts 30 — 30 — Total liabilities at fair value $ 179 $ — $ 179 $ — (In thousands) December 2014 Level 1 Level 2 Level 3 Mutual fund assets $ 20,217 $ 20,217 $ — $ — Derivative assets: Foreign currency contracts 73 — 73 — Total assets at fair value $ 20,290 $ 20,217 $ 73 $ — Derivative liabilities : Foreign currency contracts $ 628 — $ 628 — |
Derivative Instruments
Derivative Instruments | 6 Months Ended |
Jun. 30, 2015 | |
Derivative Instruments And Hedging Activities Disclosure [Abstract] | |
Derivative Instruments | 4. DERIVATIVE INSTRUMENTS The Company is exposed to certain risks relating to its ongoing business operations. The primary risk managed by the use of derivative instruments is foreign currency exchange risk. The Company holds forward foreign currency exchange contracts that are not designated as any type of accounting hedge as defined by U.S. GAAP. The Company uses these contracts to manage its exposure to exchange rate fluctuations on certain Company subsidiary cash, accounts receivable, accounts payable and other obligation balances that are denominated in currencies other than the entities’ functional currencies. The forward foreign exchange contracts are recognized on the balance sheet as either an asset or a liability measured at fair value. Gains and losses arising from recording the foreign exchange contracts at fair value are reported in earnings as offsets to the losses and gains reported in earnings arising from the re-measurement of the asset and liability balances into the applicable functional currencies. At June 30, 2015, and December 31, 2014, the Company had open forward foreign currency exchange contracts, all with settlement dates of less than one month, to buy or sell foreign currencies with U.S. dollar equivalent amounts of $45,601,000 and $51,623,000, respectively. The Company is exposed to volatility in short-term interest rates and mitigates certain portions of that risk by using interest rate swaps. The interest rate swaps are recognized on the balance sheet as either an asset or a liability measured at fair value. The Company held an interest rate swap contract with a notional value of $4,138,000 at June 30, 2015, which is designated as a cash flow hedge. At December 31, 2014, the Company held no significant interest rate swap contracts. Period-to-period changes in the fair value of interest rate swap contracts are recognized as gains or losses in other comprehensive income, to the extent effective. As each interest rate swap hedge contract is settled, the corresponding gain or loss is reclassified out of accumulated other comprehensive income (AOCI) into earnings in that settlement period. The latest date through which the Company expects to hedge its exposure to the volatility of short-term interest rates is December 1, 2021. The fair values of the derivative instruments held by the Company on June 30, 2015, and December 31, 2014, and derivative instrument gains and losses for the three and six month periods ending June 30, 2015 and 2014, were immaterial. For amounts reclassified out of AOCI into earnings for the three and six month periods ended June 30, 2015 and 2014, see Note 10. |
Stock-Based Compensation
Stock-Based Compensation | 6 Months Ended |
Jun. 30, 2015 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Stock-Based Compensation | 5. STOCK-BASED COMPENSATION On June 30, 2015 the Company had stock options outstanding under its 2000 Stock Option Plan, stock options and stock awards outstanding under its 2006 Incentive Compensation Plan and stock options, stock awards and stock appreciation rights (SARs) outstanding under its 2011 Incentive Compensation Plan. Compensation expense recorded for all stock options, stock awards and SARs was as follows: (In thousands) Three Months Ended June 30 Six Months Ended June 30 2015 2014 2015 2014 $ 2,364 $ 544 $ 3,162 $ 770 The period-over-period increases in stock-based compensation expenses were primarily attributable to increases in the fair values of the Company’s cash-settled SARs, which are marked to fair value at each reporting period. A significant increase in the market value of Company common stock in the 2015 reporting periods led to the increase in SARs fair value. Additionally, in the first quarter of 2014, management assessed that the profitability performance targets on which the compensation expenses for stock awards vesting on December 31, 2014, were based would not be achieved. Consequently, the resulting adjustment lowered the overall stock-based compensation expense for the six months ended June 30, 2014. Unrecognized compensation costs for stock options, stock awards and SARs were as follows: (In thousands) June December 31, 2014 Stock options $ 1,390 $ 774 Stock awards 3,400 1,365 SARs 2,855 693 The increases in unrecognized compensation costs for stock options, stock awards and SARs reflected the 2015 grants of: Shares Stock options 84,679 Stock awards 74,712 SARs 187,527 The unrecognized compensation costs at June 30, 2015, are expected to be recognized over weighted-average periods of 1.4 years, 2.2 years and 1.4 years for stock options, stock awards and SARs, respectively. |
Inventories
Inventories | 6 Months Ended |
Jun. 30, 2015 | |
Inventory Disclosure [Abstract] | |
Inventories | 6. INVENTORIES The composition of inventories was as follows: (In thousands) June 30, 2015 December 31, 2014 Finished goods $ 128,113 $ 126,157 Raw materials 50,469 57,076 Total inventories $ 178,582 $ 183,233 Inventories are priced primarily using the last-in, first-out inventory valuation method. If the first-in, first-out inventory valuation method had been used for all inventories, inventory balances would have been approximately $31,655,000 and $34,340,000 higher than reported at June 30, 2015, and December 31, 2014, respectively. |
Contingencies
Contingencies | 6 Months Ended |
Jun. 30, 2015 | |
Commitments And Contingencies Disclosure [Abstract] | |
Contingencies | 7. CONTINGENCIES There are a variety of legal proceedings pending or threatened against the Company. Some of these proceedings may result in fines, penalties, judgments or costs being assessed against the Company at some future time. The Company’s operations are subject to extensive local, state and federal regulations, including the U.S. Comprehensive Environmental Response, Compensation and Liability Act of 1980 (CERCLA) and the Superfund amendments of 1986 (Superfund). Over the years, the Company has received requests for information related to or has been named by the government as a potentially responsible party (PRP) at a number of waste disposal sites where cleanup costs have been or may be incurred under CERCLA and similar state statutes. In addition, damages are being claimed against the Company in general liability actions for alleged personal injury or property damage in the case of some disposal and plant sites. The Company believes that it has made adequate provisions for the costs it may incur with respect to these sites. As of June 30, 2015, the Company estimated a range of possible environmental and legal losses of $20.7 million to $41.1 million. At June 30, 2015, and December 31, 2014, the Company’s accrued liability for such losses, which represented the Company’s best estimate within the estimated range of possible environmental and legal losses, was $20.7 million and $22.0 million, respectively. During the first six months of 2015 and 2014, cash outlays related to legal and environmental matters approximated $1.9 and $0.5 million, respectively. For certain sites, the Company has responded to information requests made by federal, state or local government agencies but has received no response confirming or denying the Company’s stated positions. As such, estimates of the total costs, or range of possible costs, of remediation, if any, or the Company’s share of such costs, if any, cannot be determined with respect to these sites. Consequently, the Company is unable to predict the effect thereof on the Company’s financial position, cash flows and results of operations. Given the information available, management believes the Company has no liability at these sites. However, in the event of one or more adverse determinations with respect to such sites in any annual or interim period, the effect on the Company’s cash flows and results of operations for those periods could be material. Based upon the Company’s present knowledge with respect to its involvement at these sites, the possibility of other viable entities’ responsibilities for cleanup, and the extended period over which any costs would be incurred, the Company believes that these matters, individually and in the aggregate, will not have a material effect on the Company’s financial position. Following are summaries of the material contingencies at June 30, 2015: Maywood, New Jersey Site The Company’s property in Maywood, New Jersey and property formerly owned by the Company adjacent to its current site and other nearby properties (Maywood site) were listed on the National Priorities List in September 1993 pursuant to the provisions of CERCLA because of certain alleged chemical contamination. Pursuant to an Administrative Order on Consent entered into between USEPA and the Company for property formerly owned by the Company, and the issuance of an order by USEPA to the Company for property currently owned by the Company, the Company has completed various Remedial Investigation Feasibility Studies (RI/FS), and on September 24, 2014, USEPA issued its Record of Decision (ROD) for chemically-contaminated soil. Based on the most current information available, the Company recorded a $0.6 million increase in its remediation liability for this site in the three months ended March 31, 2015. The Company believes its recorded liability represents its best estimate of the cost of remediation for the Maywood site. The best estimate of the cost of remediation for the Maywood site could change as the Company continues to hold discussions with USEPA, as the design of the remedial action progresses or if other PRPs are identified. The ultimate amount for which the Company is liable could differ from the Company’s current recorded liability. In April 2015, the Company entered into an Administrative Settlement Agreement and Administrative Order on Consent with USEPA which requires payment of certain costs and performance of certain investigative and design work for chemically-contaminated soil. Based on the Company’s review and analysis of this order, no changes to the Company’s current recorded liability for claims associated with soil remediation of chemical contamination were required. In addition, under the terms of a settlement agreement reached on November 12, 2004, the United States Department of Justice and the Company agreed to fulfill the terms of a Cooperative Agreement reached in 1985 under which the United States will take title to and responsibility for radioactive waste removal at the Maywood site, including past and future remediation costs incurred by the United States. As such, the Company recorded no liability related to this settlement agreement. D’Imperio Property Site During the mid-1970’s, Jerome Lightman and the Lightman Drum Company disposed of hazardous substances at several sites in New Jersey. The Company was named as a PRP in the case United States v. Lightman Wilmington Site The Company is currently contractually obligated to contribute to the response costs associated with the Company’s formerly-owned site at 51 Eames Street, Wilmington, Massachusetts. Remediation at this site is being managed by its current owner to whom the Company sold the property in 1980. Under the agreement, once total site remediation costs exceed certain levels, the Company is obligated to contribute up to five percent of future response costs associated with this site with no limitation on the ultimate amount of contributions. To date, the Company has paid the current owner $2.3 million for the Company’s portion of environmental response costs. The Company has recorded a liability for its portion of the estimated remediation costs for the site. Depending on the ultimate cost of the remediation at this site, the amount for which the Company is liable could differ from the current estimates. The Company and other prior owners also entered into an agreement in April 2004 waiving certain statute of limitations defenses for claims which may be filed by the Town of Wilmington, Massachusetts, in connection with this site. While the Company has denied any liability for any such claims, the Company agreed to this waiver while the parties continue to discuss the resolution of any potential claim which may be filed. The Company believes that based on current information its recorded liability for the claims related to this site is adequate. However, depending on the ultimate cost of the remediation at this site, the amount for which the Company is liable could differ from the current estimates. Unclaimed Property Examination The Company is undergoing an unclaimed property examination by the state of Delaware (the Company’s state of incorporation) and seven other states for the period covering 1981 through 2010. The types of unclaimed property under examination include certain un-cashed payroll and accounts payable checks and certain accounts receivable credits. Generally, unclaimed property must be reported and remitted to the state of the rightful owner. In cases where the rightful owner cannot be identified, the property must be reported and remitted to the unclaimed property holder’s state of incorporation. The examination of un-cashed payroll and accounts payable checks has been completed, and no significant adjustments to the Company’s unclaimed property liability were required. The examination of accounts receivable credits is ongoing. On the basis of currently available information, the Company believes its liability for unclaimed property is adequate. Because the audit is not final, the Company’s ultimate actual obligation could differ from the recorded liability. Customer Claims From time to time in the normal course of business, customers make claims against the Company for issues such as product performance and liability, contract disputes, delivery errors and other various concerns. Frequently, such claims are subject to extensive investigation, discussion and negotiation prior to settlement or resolution. On the basis of the most current information available, the Company’s liability for such claims was $784,000 at June 30, 2015 compared to $4,016,000 at March 31, 2015, and $3,475,000 at December 31, 2014. The decline in the claims balance was attributable to a favorable 2015 second quarter settlement of a previously recorded potential claim. The actual amounts ultimately paid, if any, to settle the remaining claims balance could differ from the amounts currently recorded. Mexico Value-Added Tax During an examination of the Company’s 2009 and 2010 Mexico subsidiary financial records, local tax authority auditors determined that the Company’s treatment of value-added tax (VAT) for purchase transactions with a certain vendor was incorrect. As a result, the tax authorities concluded that the Company owed past VAT from 2009 -2010 along with assessed inflation, penalty and interest charges. Consequently, the Company recorded a liability and corresponding income statement charge for the VAT inflation, penalty and interest charges. The liability included the 2009 – 2010 assessment of inflation, penalty and interest charges plus an estimated amount for the potential exposure for 2011 – 2014. The amount recorded was not material to the Company’s results of operations. No charge was recorded for the past unpaid VAT because the Company believes the amount will be recoverable through the normal VAT process. Depending on negotiations with Mexico’s tax authorities, the accuracy of the estimates for 2011 - 2014 and the actual amount of the past VAT that is recovered by the Company, the actual settlement could differ from the current recorded liability. |
Postretirement Benefit Plans
Postretirement Benefit Plans | 6 Months Ended |
Jun. 30, 2015 | |
Compensation And Retirement Disclosure [Abstract] | |
Postretirement Benefit Plans | 8. POSTRETIREMENT BENEFIT PLANS Defined Benefit Pension Plans The Company sponsors various funded qualified and unfunded non-qualified defined benefit pension plans, the most significant of which cover employees in the U.S. and U.K. locations. The U.S. and U.K. defined benefit pension plans are frozen and service benefits are no longer being accrued. Components of Net Periodic Benefit Cost UNITED STATES (In thousands) Three Months Ended June 30 Six Months Ended June 30 2015 2014 2015 2014 Interest cost $ 1,702 $ 1,723 $ 3,403 $ 3,446 Expected return on plan assets (2,393 ) (2,378 ) (4,786 ) (4,756 ) Amortization of net actuarial loss 1,149 661 2,298 1,323 Net periodic benefit cost $ 458 $ 6 $ 915 $ 13 UNITED KINGDOM (In thousands) Three Months Ended June 30 Six Months Ended June 30 2015 2014 2015 2014 Interest cost $ 198 $ 247 $ 393 $ 490 Expected return on plan assets (265 ) (333 ) (527 ) (661 ) Amortization of net actuarial loss 46 — 91 — Net periodic benefit (income) cost $ (21 ) $ (86 ) $ (43 ) $ (171 ) Employer Contributions U.S. Plans As a result of pension funding relief provisions included in the Highway and Transportation Funding Act of 2014, the Company expects to make no 2015 contributions to the funded U.S. qualified defined benefit plans. Approximately, $185,000 is expected to be paid related to the unfunded non-qualified plans. As of June 30, 2015, $164,000 had been paid related to the non-qualified plans. U.K. Plan The Company’s United Kingdom subsidiary expects to contribute approximately $609,000 to its defined benefit pension plan in 2015. As of June 30, 2015, $416,000 had been contributed to the plan. Defined Contribution Plans The Company sponsors retirement savings defined contribution plans that cover U.S. and U.K. employees. The Company also sponsors a qualified profit sharing plan for its U.S. employees. The retirement savings and profit sharing defined contribution plans include a qualified plan and a non-qualified supplemental executive plan. Defined contribution plan expenses for the Company’s retirement savings and profit sharing plans were as follows: (In thousands) Three Months Ended June 30 Six Months Ended June 30 2015 2014 2015 2014 Retirement savings plans $ 1,136 $ 1,178 $ 2,320 $ 2,309 Profit sharing plan 1,211 1,227 2,191 1,991 Total defined contribution expense $ 2,347 $ 2,405 $ 4,511 $ 4,300 The Company funds the obligations of its non-qualified supplemental executive defined contribution plans (supplemental plans) through a rabbi trust. The trust comprises various mutual fund investments selected by the participants of the supplemental plans. In accordance with the accounting guidance for rabbi trust arrangements, the assets of the trust and the obligations of the supplemental plans are reported on the Company’s consolidated balance sheets. The Company elected the fair value option for the mutual fund investment assets so that offsetting changes in the mutual fund values and defined contribution plan obligations would be recorded in earnings in the same period. Therefore, the mutual funds are reported at fair value with any subsequent changes in fair value recorded in the consolidated statements of income. The liabilities related to the supplemental plans increase (i.e., supplemental plan expense is recognized) when the value of the trust assets appreciates and decrease when the value of the trust assets declines (i.e., supplemental plan income is recognized). At June 30, 2015, the balance of the trust assets was $1,827,000, which equaled the balance of the supplemental plan liabilities (see the long-term investments section in Note 3 for further information regarding the Company’s mutual fund assets). |
Earnings Per Share
Earnings Per Share | 6 Months Ended |
Jun. 30, 2015 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | 9. EARNINGS PER SHARE Below are the computations of basic and diluted earnings per share for the three and six months ended June 30, 2015 and 2014: (In thousands, except per share amounts) Three Months Ended June 30 Six Months Ended June 30 2015 2014 2015 2014 Computation of Basic Earnings per Share Net income attributable to Stepan Company $ 16,914 $ 24,353 $ 38,184 $ 37,371 Weighted-average number of common shares outstanding 22,742 22,763 22,731 22,768 Basic earnings per share $ 0.74 $ 1.07 $ 1.68 $ 1.64 Computation of Diluted Earnings per Share Net income attributable to Stepan Company $ 16,914 $ 24,353 $ 38,184 $ 37,371 Weighted-average number of shares outstanding 22,742 22,763 22,731 22,768 Add weighted-average net shares issuable from assumed exercise of options (under treasury stock method) (1) 127 158 116 170 Add weighted-average net shares related to unvested stock awards (under treasury stock method) 2 10 3 10 Weighted-average shares applicable to diluted earnings 22,871 22,931 22,850 22,948 Diluted earnings per share $ 0.74 $ 1.06 $ 1.67 $ 1.63 (1) |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 6 Months Ended |
Jun. 30, 2015 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Income (Loss) | 10. ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) Changes in Company accumulated other comprehensive income (loss) (AOCI) by component (net of income taxes) for the three and six months ended June 30, 2014 and 2015, are presented below: (In thousands) Foreign Currency Translation Adjustments Defined Benefit Pension Plan Adjustments Cash Flow Hedge Adjustments Total Balance at March 31, 2014 $ (10,854 ) $ (18,262 ) $ 118 $ (28,998 ) Other comprehensive income before reclassifications 3,742 — — 3,742 Amounts reclassified from AOCI — 410 1 411 Net current-period other comprehensive income 3,742 410 1 4,153 Balance at June 30, 2014 $ (7,112 ) $ (17,852 ) $ 119 $ (24,845 ) Balance at March 31, 2015 $ (68,051 ) $ (40,400 ) $ 76 $ (108,375 ) Other comprehensive income before reclassifications 5,940 — 16 5,956 Amounts reclassified from AOCI — 750 - 750 Net current-period other comprehensive income 5,940 750 16 6,706 Balance at June 30, 2015 $ (62,111 ) $ (39,650 ) $ 92 $ (101,669 ) Balance at December 31, 2013 $ (10,971 ) $ (18,672 ) $ 115 $ (29,528 ) Other comprehensive income before reclassifications 3,859 — — $ 3,859 Amounts reclassified from AOCI — 820 4 $ 824 Net current-period other comprehensive income 3,859 820 4 4,683 Balance at June 30, 2014 $ (7,112 ) $ (17,852 ) $ 119 $ (24,845 ) Balance at December 31, 2014 $ (42,914 ) $ (41,149 ) $ 118 $ (83,945 ) Other comprehensive income before reclassifications (19,197 ) — (27 ) (19,224 ) Amounts reclassified from AOCI — 1,499 1 1,500 Net current-period other comprehensive income (19,197 ) 1,499 (26 ) (17,724 ) Balance at June 30, 2015 $ (62,111 ) $ (39,650 ) $ 92 $ (101,669 ) Information regarding the reclassifications out of AOCI for the three and six months ended 2015 and 2014, is displayed below: (In thousands) Amount Reclassified from AOCI (a) Affected Line Item in Consolidated Statements of Income AOCI Components Three Months Ended June 30 Six Months Ended June 30 2015 2014 2015 2014 Amortization of defined benefit pension actuarial losses $ (1,195 ) $ (661 ) $ (2,389 ) $ (1,323 ) (b) 445 251 890 503 Tax benefit $ (750 ) $ (410 ) $ (1,499 ) $ (820 ) Net of tax Gains and losses on cash flow hedges: Interest rate contracts $ (5 ) $ (7 ) $ (10 ) $ (14 ) Interest, net Foreign exchange contracts 3 3 5 5 Cost of sales (2 ) (4 ) (5 ) (9 ) Total before tax 2 3 4 5 Tax benefit $ - $ (1 ) $ (1 ) $ (4 ) Net of tax Total reclassifications for the period $ (750 ) $ (411 ) $ (1,500 ) $ (824 ) Net of tax (a) Amounts in parentheses denote expense to statement of income. (b) This component of accumulated other comprehensive income is included in the computation of net periodic benefit cost (see Note 8 for additional details). |
Segment Reporting
Segment Reporting | 6 Months Ended |
Jun. 30, 2015 | |
Segment Reporting [Abstract] | |
Segment Reporting | 11. SEGMENT REPORTING The Company has three reportable segments: Surfactants, Polymers and Specialty Products. Net sales by segment for the three and six months ended June 30, 2015 and 2014, were as follows: (In thousands) Three Months Ended June 30 Six Months Ended June 30 2015 2014 2015 2014 Segment Net Sales Surfactants $ 299,743 $ 333,761 $ 630,294 $ 669,471 Polymers 133,613 148,270 242,977 267,377 Specialty Products 19,058 22,080 39,594 44,705 Total $ 452,414 $ 504,111 $ 912,865 $ 981,553 Segment operating income and reconciliations of segment operating income to consolidated income before income taxes for the three months and six months ended June 30, 2015 and 2014, are summarized below: (In thousands) Three Months Ended June 30 Six Months Ended June 30 2015 2014 2015 2014 Segment Operating Income Surfactants $ 24,232 $ 19,239 $ 57,996 $ 37,577 Polymers 23,429 18,444 38,214 29,270 Specialty Products 1,522 3,550 3,766 7,571 Segment operating income 49,183 41,233 99,976 74,418 Unallocated corporate expenses (1) (20,588 ) (4,319 ) (36,203 ) (14,981 ) Consolidated operating income 28,595 36,914 63,773 59,437 Interest expense, net (2,869 ) (3,021 ) (6,923 ) (5,978 ) Loss from equity in joint ventures (1,815 ) (1,243 ) (3,055 ) (2,694 ) Other, net 235 556 887 530 Consolidated income before income taxes $ 24,146 $ 33,206 $ 54,682 $ 51,295 (1) |
Debt
Debt | 6 Months Ended |
Jun. 30, 2015 | |
Debt Disclosure [Abstract] | |
Debt | 12. DEBT At June 30, 2015, and December 31, 2014, debt comprised the following: (In thousands) Maturity Dates June 30, 2015 December 31, 2014 Unsecured private placement notes 3.86% 2019-2025 $ 100,000 $ 100,000 4.86% 2017-2023 65,000 65,000 5.88% 2016-2022 40,000 40,000 5.69% 2015-2018 22,857 22,857 6.86% 2015 4,284 4,284 Unsecured U.S. bank debt 2019 10,000 20,000 Debt of foreign subsidiaries Unsecured bak debt, foreign currency 2015 10,064 12,043 Unsecured bank term loan, foreign currency 2021 4,137 4,840 Secured bank term loan, foreign currency 2015 278 2,723 Secured bank debt, foreign currency 2015 3,350 1,638 Unsecured bank debt, U.S. dollars 2015 500 546 Total debt $ 260,470 $ 273,931 Less current maturities 24,826 27,034 Long-term debt $ 235,644 $ 246,897 The Company has a committed $125,000,000 multi-currency revolving credit agreement that expires in July 2019. The Company maintains standby letters of credit under its workers’ compensation insurance agreements and for other purposes, as needed from time to time, which are issued under the revolving credit agreement. As of June 30, 2015, the Company had outstanding letters of credit totaling $4,952,000 and outstanding borrowing of $10,000,000 under this agreement. There was $110,048,000 available under the revolving credit agreement as of June 30, 2015. The various loan agreements contain provisions which, among others, require maintenance of certain financial ratios and place limitations on additional debt, investments and payment of dividends. Based on the loan agreement provisions that place limitations on dividend payments, unrestricted retained earnings (i.e., retained earnings available for dividend distribution) were $107,400,000 and $88,684,000 at June 30, 2015 and December 31, 2014, respectively. On July 10, 2015, the Company completed a new $100,000,000 unsecured private placement loan. See Note 18. |
Other, Net
Other, Net | 6 Months Ended |
Jun. 30, 2015 | |
Other Income And Expenses [Abstract] | |
Other, Net | 13. OTHER, NET Other, net in the consolidated statements of income included the following: (In thousands) Three Months Ended June 30 Six Months Ended June 30 2015 2014 2015 2014 Foreign exchange gain (loss) $ 101 $ (93 ) $ 99 $ (298 ) Investment income 23 117 146 273 Realized and unrealized gains on investments 111 532 642 555 Other, net $ 235 $ 556 $ 887 $ 530 |
Sale of Product Line
Sale of Product Line | 6 Months Ended |
Jun. 30, 2015 | |
Sale Of Product Line [Abstract] | |
Sale of Product Line | 14. SALE OF PRODUCT LINE In January 2015, the Company sold its specialty polyurethane systems product line (kits) to J6 Polymers, LLC (J6) for cash of $3,262,000. Kits were part of the Company’s Polymers segment and accounted for approximately $2,800,000 of the Company’s 2014 net sales. The sale of kits included inventory as well as customer and supplier lists, formulations, manufacturing procedures and all other intellectual property associated with the manufacturing and selling of kits. As a result of the sale, the Company recognized a pretax gain of $2,862,000 in the first quarter of 2015. The gain was attributed to the Polymer segment. J6 is a business wholly-owned and operated by members of the immediate family of Robert J. Wood, a former Company executive who retired from the Company in April 2014. Mr. Wood is a managing member of J6. |
Business Restructuring
Business Restructuring | 6 Months Ended |
Jun. 30, 2015 | |
Restructuring And Related Activities [Abstract] | |
Business Restructuring | 15. BUSINESS RESTRUCTURING 2014 Restructuring In the fourth quarter of 2014, a restructuring plan was approved that affected certain Company functions, principally the research and development function and to a lesser extent product safety and compliance and plant site accounting functions (primarily affecting the Surfactants segment). The objective of the plan was to better align staffing resources with the needs of the Company’s diversification and growth initiatives. In implementing the plan, management offered a voluntary retirement incentive to employees of the affected functions. By December 31, 2014, 13 employees accepted the voluntary termination incentive. As a result, the Company recognized a $1,722,000 charge against income in the fourth quarter ended December 31, 2014. Although the Company may realize some short-term cost savings from the action, the restructuring was not considered a cost savings initiative but rather an opportunity to create some staffing flexibility to reposition roles to meet changing business needs. The severance payouts were completed in the three-month period ended June 30, 2015. Other costs for the restructuring were not material. Below is a reconciliation of the beginning and ending balances of the restructuring liability: (In thousands) Severance Expense Restructuring liability at December 31, 2014 $ 1,722 Amounts paid (1,435 ) Foreign currency translation (23 ) Restructuring liability at March 31, 2015 $ 264 Amounts paid (260 ) Expense adjustment (9 ) Foreign currency translation 5 Restructuring liability at June 30, 2015 $ - 2013 Restructuring In the fourth quarter of 2013, the Company recorded a $1,040,000 restructuring charge for estimated severance expense related to an approved plan to reduce future costs and increase operating efficiencies by consolidating a portion of its North American Surfactants manufacturing operations (part of the Surfactants reportable segment). In the third quarter of 2014, the Company shut down certain production areas at its Canadian manufacturing site. Production in those areas was moved to other U.S. plants. This consolidation resulted in the elimination of 16 North American positions. Other restructuring costs for this plan were not material. Below is a reconciliation of the beginning and ending balances of the restructuring liability: (In thousands) Severance Expense Restructuring liability at December 31, 2013 $ 1,040 Amounts paid in 2014 (420 ) Foreign currency translation in 2014 (57 ) Restructuring liability at December 31, 2014 $ 563 Amounts paid (338 ) Foreign currency translation (39 ) Restructuring liability at March 31, 2015 $ 186 Amounts paid (96 ) Foreign currency translation 4 Restructuring liability at June 30, 2015 $ 94 In connection with the planned business restructuring, the Company reduced the useful lives of the manufacturing assets in the affected areas of the Canadian plant. For the three and six months ended June 30, 2014, the Company recognized $918,000 and $1,825,000, respectively, of accelerated depreciation resulting from the reduction of asset useful lives. The depreciation expense was included in the cost of sales line of the consolidated statement of income. |
Acquisition
Acquisition | 6 Months Ended |
Jun. 30, 2015 | |
Business Combinations [Abstract] | |
Acquisition | 16. ACQUISITION On June 15, 2015, the Company closed on the previously announced agreement with Procter & Gamble do Brasil S.A. (P&G Brazil) to acquire (through the Company’s Brazilian subsidiary) P&G Brazil’s sulfonation production facility in Bahia, Brazil. The facility is located in northeastern Brazil and has 30,000 metric tons of surfactants capacity. The acquisition will be included in Latin American operations of the Company’s Surfactants segment. The acquired business complements the Company’s existing Vespasiano, Brazil, plant and provides opportunities to serve growing northeastern Brazil. The purchase price was cash of $5,133,000. The acquisition was accounted for as a business combination and, accordingly, the assets acquired and liabilities assumed as part of the acquisition were measured and recorded at their estimated fair values. The purchase included property, plant and equipment valued at $6,007,000 and the assumption of liabilities valued at $874,000. No intangibles or goodwill were acquired in the business combination. The Company continues to evaluate the purchase price allocation, including the estimated fair values of the assets acquired and liabilities assumed, which may result in adjustments to amounts currently recorded. Other acquisition-related expenses were not material. Post-acquisition financial results for the acquired business were insignificant. Pro forma financial information has not been included because revenues and earnings of the Company would not have been significantly different than reported had the acquisition date been January 1, 2014. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 6 Months Ended |
Jun. 30, 2015 | |
Accounting Changes And Error Corrections [Abstract] | |
Recent Accounting Pronouncements | 17. RECENT ACCOUNTING PRONOUNCEMENTS In April 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-08, Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity. In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) In January 2015, the FASB issued ASU No. 2015-01, Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items Income Statement – Extraordinary and Unusual Items In February 2015, the FASB issued ASU No. 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis In April 2015, the FASB issued ASU No. 2015-03, Interest – Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs In April 2015, the FASB issued ASU No. 2015-05, Intangibles - Goodwill and Other – Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2015 | |
Subsequent Events [Abstract] | |
Subsequent Events | 18. SUBSEQUENT EVENTS On July 10, 2015, the Company completed a new $100,000,000 unsecured private placement loan. This loan bears interest at a fixed rate of 3.95% with interest to be paid semi-annually and with equal annual principal payments beginning on July 10, 2021, and continuing through final maturity on July 10, 2027. The proceeds of this loan will be used primarily for capital expenditures, to pay down existing debt in accordance with normal payment schedules and for other corporate purposes. This loan agreement requires the maintenance of certain financial ratios and covenants that are substantially identical to the Company’s existing long-term debt and customary events of default. |
Recent Accounting Pronounceme25
Recent Accounting Pronouncements (Policies) | 6 Months Ended |
Jun. 30, 2015 | |
Accounting Changes And Error Corrections [Abstract] | |
Recent Accounting Pronouncements | In April 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-08, Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity. In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) In January 2015, the FASB issued ASU No. 2015-01, Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items Income Statement – Extraordinary and Unusual Items In February 2015, the FASB issued ASU No. 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis In April 2015, the FASB issued ASU No. 2015-03, Interest – Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs In April 2015, the FASB issued ASU No. 2015-05, Intangibles - Goodwill and Other – Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement |
Reconciliations of Equity (Tabl
Reconciliations of Equity (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Equity [Abstract] | |
Reconciliations of Total Equity | Below are reconciliations of total equity, Company equity and equity attributable to noncontrolling interests for the six months ended June 30, 2015 and 2014: (In thousands) Total Equity Stepan Company Equity Noncontrolling Interests’ Equity (3) Balance at January 1, 2015 $ 536,944 $ 535,546 $ 1,398 Net income 38,227 38,184 43 Dividends (8,061 ) (8,061 ) — Common stock purchases (1) (273 ) (273 ) — Stock option exercises 359 359 — Defined benefit pension adjustments, net of tax 1,499 1,499 — Translation adjustments (19,195 ) (19,197 ) 2 Derivative instrument activity, net of tax (26 ) (26 ) — Other (2) 2,488 2,488 — Balance at June 30, 2015 $ 551,962 $ 550,519 $ 1,443 (In thousands) Total Equity Stepan Company Equity Noncontrolling Interests’ Equity (3) Balance at January 1, 2014 $ 553,741 $ 552,286 $ 1,455 Net income 37,376 37,371 5 Dividends (7,592 ) (7,592 ) — Common stock purchases (1) (5,058 ) (5,058 ) — Stock option exercises 1,449 1,449 — Defined benefit pension adjustments, net of tax 820 820 — Translation adjustments 3,812 3,859 (47 ) Derivative instrument activity, net of tax 4 4 — Other (2) 1,825 1,825 — Balance at June 30, 2014 $ 586,377 $ 584,964 $ 1,413 (1) (2) (3) |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Fair Value Disclosures [Abstract] | |
Fair Values and Related Carrying Values of Debt | At June 30, 2015, and December 31, 2014, the fair value of debt and the related carrying values, including current maturities, were as follows: (In thousands) June 30, 2015 December 31, 2014 Fair value $ 269,705 $ 285,441 Carrying value 260,470 273,931 |
Financial Assets and Liabilities Measured on a Recurring Basis at Fair Value | The following tables present financial assets and liabilities measured on a recurring basis at fair value as of June 30, 2015, and December 31, 2014, and the level within the fair value hierarchy in which the fair value measurements fall: (In thousands) June 2015 Level 1 Level 2 Level 3 Mutual fund assets $ 20,273 $ 20,273 $ — $ — Derivative assets: Foreign currency contracts 59 — 59 — Total assets at fair value $ 20,332 $ 20,273 $ 59 $ — Derivative liabilities: Foreign currency contracts $ 149 $ — $ 149 $ — Interest rate contracts 30 — 30 — Total liabilities at fair value $ 179 $ — $ 179 $ — (In thousands) December 2014 Level 1 Level 2 Level 3 Mutual fund assets $ 20,217 $ 20,217 $ — $ — Derivative assets: Foreign currency contracts 73 — 73 — Total assets at fair value $ 20,290 $ 20,217 $ 73 $ — Derivative liabilities : Foreign currency contracts $ 628 — $ 628 — |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Compensation Expense Recorded for All Stock Options, Stock Awards and SARs | Compensation expense recorded for all stock options, stock awards and SARs was as follows: (In thousands) Three Months Ended June 30 Six Months Ended June 30 2015 2014 2015 2014 $ 2,364 $ 544 $ 3,162 $ 770 |
Unrecognized Compensation Costs for Stock Options, Stock Awards and SARs | Unrecognized compensation costs for stock options, stock awards and SARs were as follows: (In thousands) June December 31, 2014 Stock options $ 1,390 $ 774 Stock awards 3,400 1,365 SARs 2,855 693 |
Share Based Payment Awards Granted in Period | The increases in unrecognized compensation costs for stock options, stock awards and SARs reflected the 2015 grants of: Shares Stock options 84,679 Stock awards 74,712 SARs 187,527 |
Inventories (Tables)
Inventories (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Inventory Disclosure [Abstract] | |
Composition of Inventories | The composition of inventories was as follows: (In thousands) June 30, 2015 December 31, 2014 Finished goods $ 128,113 $ 126,157 Raw materials 50,469 57,076 Total inventories $ 178,582 $ 183,233 |
Postretirement Benefit Plans (T
Postretirement Benefit Plans (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Compensation And Retirement Disclosure [Abstract] | |
Components of Net Periodic Benefit Cost | Components of Net Periodic Benefit Cost UNITED STATES (In thousands) Three Months Ended June 30 Six Months Ended June 30 2015 2014 2015 2014 Interest cost $ 1,702 $ 1,723 $ 3,403 $ 3,446 Expected return on plan assets (2,393 ) (2,378 ) (4,786 ) (4,756 ) Amortization of net actuarial loss 1,149 661 2,298 1,323 Net periodic benefit cost $ 458 $ 6 $ 915 $ 13 UNITED KINGDOM (In thousands) Three Months Ended June 30 Six Months Ended June 30 2015 2014 2015 2014 Interest cost $ 198 $ 247 $ 393 $ 490 Expected return on plan assets (265 ) (333 ) (527 ) (661 ) Amortization of net actuarial loss 46 — 91 — Net periodic benefit (income) cost $ (21 ) $ (86 ) $ (43 ) $ (171 ) |
Defined Contribution Plan Expenses for Company's Retirement Savings Plans and Profit Sharing Plan | Defined contribution plan expenses for the Company’s retirement savings and profit sharing plans were as follows: (In thousands) Three Months Ended June 30 Six Months Ended June 30 2015 2014 2015 2014 Retirement savings plans $ 1,136 $ 1,178 $ 2,320 $ 2,309 Profit sharing plan 1,211 1,227 2,191 1,991 Total defined contribution expense $ 2,347 $ 2,405 $ 4,511 $ 4,300 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Earnings Per Share [Abstract] | |
Computation of Basic and Diluted Earnings Per Share | Below are the computations of basic and diluted earnings per share for the three and six months ended June 30, 2015 and 2014: (In thousands, except per share amounts) Three Months Ended June 30 Six Months Ended June 30 2015 2014 2015 2014 Computation of Basic Earnings per Share Net income attributable to Stepan Company $ 16,914 $ 24,353 $ 38,184 $ 37,371 Weighted-average number of common shares outstanding 22,742 22,763 22,731 22,768 Basic earnings per share $ 0.74 $ 1.07 $ 1.68 $ 1.64 Computation of Diluted Earnings per Share Net income attributable to Stepan Company $ 16,914 $ 24,353 $ 38,184 $ 37,371 Weighted-average number of shares outstanding 22,742 22,763 22,731 22,768 Add weighted-average net shares issuable from assumed exercise of options (under treasury stock method) (1) 127 158 116 170 Add weighted-average net shares related to unvested stock awards (under treasury stock method) 2 10 3 10 Weighted-average shares applicable to diluted earnings 22,871 22,931 22,850 22,948 Diluted earnings per share $ 0.74 $ 1.06 $ 1.67 $ 1.63 (1) |
Accumulated Other Comprehensi32
Accumulated Other Comprehensive Income (Loss) (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Equity [Abstract] | |
Summary of Changes in Accumulated Other Comprehensive Income | Changes in Company accumulated other comprehensive income (loss) (AOCI) by component (net of income taxes) for the three and six months ended June 30, 2014 and 2015, are presented below: (In thousands) Foreign Currency Translation Adjustments Defined Benefit Pension Plan Adjustments Cash Flow Hedge Adjustments Total Balance at March 31, 2014 $ (10,854 ) $ (18,262 ) $ 118 $ (28,998 ) Other comprehensive income before reclassifications 3,742 — — 3,742 Amounts reclassified from AOCI — 410 1 411 Net current-period other comprehensive income 3,742 410 1 4,153 Balance at June 30, 2014 $ (7,112 ) $ (17,852 ) $ 119 $ (24,845 ) Balance at March 31, 2015 $ (68,051 ) $ (40,400 ) $ 76 $ (108,375 ) Other comprehensive income before reclassifications 5,940 — 16 5,956 Amounts reclassified from AOCI — 750 - 750 Net current-period other comprehensive income 5,940 750 16 6,706 Balance at June 30, 2015 $ (62,111 ) $ (39,650 ) $ 92 $ (101,669 ) Balance at December 31, 2013 $ (10,971 ) $ (18,672 ) $ 115 $ (29,528 ) Other comprehensive income before reclassifications 3,859 — — $ 3,859 Amounts reclassified from AOCI — 820 4 $ 824 Net current-period other comprehensive income 3,859 820 4 4,683 Balance at June 30, 2014 $ (7,112 ) $ (17,852 ) $ 119 $ (24,845 ) Balance at December 31, 2014 $ (42,914 ) $ (41,149 ) $ 118 $ (83,945 ) Other comprehensive income before reclassifications (19,197 ) — (27 ) (19,224 ) Amounts reclassified from AOCI — 1,499 1 1,500 Net current-period other comprehensive income (19,197 ) 1,499 (26 ) (17,724 ) Balance at June 30, 2015 $ (62,111 ) $ (39,650 ) $ 92 $ (101,669 ) |
Summary of Reclassifications Out of Accumulated Other Comprehensive Income | Information regarding the reclassifications out of AOCI for the three and six months ended 2015 and 2014, is displayed below: (In thousands) Amount Reclassified from AOCI (a) Affected Line Item in Consolidated Statements of Income AOCI Components Three Months Ended June 30 Six Months Ended June 30 2015 2014 2015 2014 Amortization of defined benefit pension actuarial losses $ (1,195 ) $ (661 ) $ (2,389 ) $ (1,323 ) (b) 445 251 890 503 Tax benefit $ (750 ) $ (410 ) $ (1,499 ) $ (820 ) Net of tax Gains and losses on cash flow hedges: Interest rate contracts $ (5 ) $ (7 ) $ (10 ) $ (14 ) Interest, net Foreign exchange contracts 3 3 5 5 Cost of sales (2 ) (4 ) (5 ) (9 ) Total before tax 2 3 4 5 Tax benefit $ - $ (1 ) $ (1 ) $ (4 ) Net of tax Total reclassifications for the period $ (750 ) $ (411 ) $ (1,500 ) $ (824 ) Net of tax (a) Amounts in parentheses denote expense to statement of income. (b) This component of accumulated other comprehensive income is included in the computation of net periodic benefit cost (see Note 8 for additional details). |
Segment Reporting (Tables)
Segment Reporting (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Segment Reporting [Abstract] | |
Operating Segment | The Company has three reportable segments: Surfactants, Polymers and Specialty Products. Net sales by segment for the three and six months ended June 30, 2015 and 2014, were as follows: (In thousands) Three Months Ended June 30 Six Months Ended June 30 2015 2014 2015 2014 Segment Net Sales Surfactants $ 299,743 $ 333,761 $ 630,294 $ 669,471 Polymers 133,613 148,270 242,977 267,377 Specialty Products 19,058 22,080 39,594 44,705 Total $ 452,414 $ 504,111 $ 912,865 $ 981,553 |
Reconciliation of Segment Information to Consolidated Financial Statements | Segment operating income and reconciliations of segment operating income to consolidated income before income taxes for the three months and six months ended June 30, 2015 and 2014, are summarized below: (In thousands) Three Months Ended June 30 Six Months Ended June 30 2015 2014 2015 2014 Segment Operating Income Surfactants $ 24,232 $ 19,239 $ 57,996 $ 37,577 Polymers 23,429 18,444 38,214 29,270 Specialty Products 1,522 3,550 3,766 7,571 Segment operating income 49,183 41,233 99,976 74,418 Unallocated corporate expenses (1) (20,588 ) (4,319 ) (36,203 ) (14,981 ) Consolidated operating income 28,595 36,914 63,773 59,437 Interest expense, net (2,869 ) (3,021 ) (6,923 ) (5,978 ) Loss from equity in joint ventures (1,815 ) (1,243 ) (3,055 ) (2,694 ) Other, net 235 556 887 530 Consolidated income before income taxes $ 24,146 $ 33,206 $ 54,682 $ 51,295 (1) |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Debt Disclosure [Abstract] | |
Debt | At June 30, 2015, and December 31, 2014, debt comprised the following: (In thousands) Maturity Dates June 30, 2015 December 31, 2014 Unsecured private placement notes 3.86% 2019-2025 $ 100,000 $ 100,000 4.86% 2017-2023 65,000 65,000 5.88% 2016-2022 40,000 40,000 5.69% 2015-2018 22,857 22,857 6.86% 2015 4,284 4,284 Unsecured U.S. bank debt 2019 10,000 20,000 Debt of foreign subsidiaries Unsecured bak debt, foreign currency 2015 10,064 12,043 Unsecured bank term loan, foreign currency 2021 4,137 4,840 Secured bank term loan, foreign currency 2015 278 2,723 Secured bank debt, foreign currency 2015 3,350 1,638 Unsecured bank debt, U.S. dollars 2015 500 546 Total debt $ 260,470 $ 273,931 Less current maturities 24,826 27,034 Long-term debt $ 235,644 $ 246,897 |
Other, Net (Tables)
Other, Net (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Other Income And Expenses [Abstract] | |
Other Net in Consolidated Statements of Income | Other, net in the consolidated statements of income included the following: (In thousands) Three Months Ended June 30 Six Months Ended June 30 2015 2014 2015 2014 Foreign exchange gain (loss) $ 101 $ (93 ) $ 99 $ (298 ) Investment income 23 117 146 273 Realized and unrealized gains on investments 111 532 642 555 Other, net $ 235 $ 556 $ 887 $ 530 |
Business Restructuring (Tables)
Business Restructuring (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
2014 Restructuring [Member] | |
Reconciliation of Restructuring Liability | Below is a reconciliation of the beginning and ending balances of the restructuring liability: (In thousands) Severance Expense Restructuring liability at December 31, 2014 $ 1,722 Amounts paid (1,435 ) Foreign currency translation (23 ) Restructuring liability at March 31, 2015 $ 264 Amounts paid (260 ) Expense adjustment (9 ) Foreign currency translation 5 Restructuring liability at June 30, 2015 $ - |
2013 Restructuring [Member] | |
Reconciliation of Restructuring Liability | Below is a reconciliation of the beginning and ending balances of the restructuring liability: (In thousands) Severance Expense Restructuring liability at December 31, 2013 $ 1,040 Amounts paid in 2014 (420 ) Foreign currency translation in 2014 (57 ) Restructuring liability at December 31, 2014 $ 563 Amounts paid (338 ) Foreign currency translation (39 ) Restructuring liability at March 31, 2015 $ 186 Amounts paid (96 ) Foreign currency translation 4 Restructuring liability at June 30, 2015 $ 94 |
Reconciliations of Equity - Rec
Reconciliations of Equity - Reconciliations of Total Equity (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | ||
Reconciliations of total equity | |||||
Beginning Balance | $ 536,944 | $ 553,741 | |||
Beginning Balance | 535,546 | ||||
Beginning Balance | 1,398 | ||||
Net income | $ 16,941 | $ 24,368 | 38,227 | 37,376 | |
Net income | 27 | 15 | 43 | 5 | |
Dividends | (8,061) | (7,592) | |||
Common stock purchases | [1] | (273) | (5,058) | ||
Stock option exercises | 359 | 1,449 | |||
Pension liability adjustment, net of tax (Note 10) | 750 | 410 | 1,499 | 820 | |
Translation adjustments | 5,957 | 3,718 | (19,195) | 3,812 | |
Derivative instrument activity, net of tax | 16 | 1 | (26) | 4 | |
Other | [2] | 2,488 | 1,825 | ||
Ending Balance | 551,962 | 586,377 | 551,962 | 586,377 | |
Ending Balance | 550,519 | 550,519 | |||
Ending Balance | 1,443 | 1,443 | |||
Noncontrolling Interests' Equity [Member] | |||||
Reconciliations of total equity | |||||
Beginning Balance | [3] | 1,398 | 1,455 | ||
Net income | [3] | 43 | 5 | ||
Translation adjustments | [3] | 2 | (47) | ||
Ending Balance | [3] | 1,443 | 1,413 | 1,443 | 1,413 |
Stepan Company Equity [Member] | |||||
Reconciliations of total equity | |||||
Beginning Balance | 535,546 | 552,286 | |||
Net income | 38,184 | 37,371 | |||
Dividends | (8,061) | (7,592) | |||
Common stock purchases | [1] | (273) | (5,058) | ||
Stock option exercises | 359 | 1,449 | |||
Pension liability adjustment, net of tax (Note 10) | 1,499 | 820 | |||
Translation adjustments | (19,197) | 3,859 | |||
Derivative instrument activity, net of tax | (26) | 4 | |||
Other | [2] | 2,488 | 1,825 | ||
Ending Balance | $ 550,519 | $ 584,964 | $ 550,519 | $ 584,964 | |
[1] | Includes the value of Company shares purchased in the open market and the value of Company common shares tendered by employees to settle minimum statutory withholding taxes related to the receipt of performance awards and deferred compensation distributions. | ||||
[2] | Primarily comprised of activity related to stock-based compensation, deferred compensation and excess tax benefits. | ||||
[3] | Reflects the noncontrolling interest in the Company’s China joint venture. |
Fair Value Measurements - Fair
Fair Value Measurements - Fair Values and Related Carrying Values of Debt (Detail) - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Carrying value | $ 260,470 | $ 273,931 |
Level 2 [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Fair value | $ 269,705 | $ 285,441 |
Fair Value Measurements - Finan
Fair Value Measurements - Financial Assets and Liabilities Measured on a Recurring Basis at Fair Value (Detail) - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Mutual fund assets | $ 20,273 | $ 20,217 |
Derivative assets: | ||
Foreign currency contracts | 59 | 73 |
Total assets at fair value | 20,332 | 20,290 |
Derivative liabilities: | ||
Foreign currency contracts | 149 | 628 |
Interest rate contracts | 30 | |
Total liabilities at fair value | 179 | |
Level 1 [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Mutual fund assets | 20,273 | 20,217 |
Derivative assets: | ||
Total assets at fair value | 20,273 | 20,217 |
Level 2 [Member] | ||
Derivative assets: | ||
Foreign currency contracts | 59 | 73 |
Total assets at fair value | 59 | 73 |
Derivative liabilities: | ||
Foreign currency contracts | 149 | $ 628 |
Interest rate contracts | 30 | |
Total liabilities at fair value | $ 179 |
Derivative Instruments - Additi
Derivative Instruments - Additional Information (Detail) - USD ($) | 6 Months Ended | |
Jun. 30, 2015 | Dec. 31, 2014 | |
Derivative Instruments And Hedging Activities Disclosures [Line Items] | ||
Derivative notional amount | $ 45,601,000 | $ 51,623,000 |
Derivative foreign currency exchange contracts settlement date | 1 month | |
Cash flow hedges [Member] | Interest rate contracts [Member] | ||
Derivative Instruments And Hedging Activities Disclosures [Line Items] | ||
Derivative notional amount | $ 4,138,000 | $ 0 |
Stock-Based Compensation - Comp
Stock-Based Compensation - Compensation Expense Recorded for All Stock Options, Stock Awards and SARs (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | ||||
Compensation expense | $ 2,364 | $ 544 | $ 3,162 | $ 770 |
Stock-Based Compensation - Unre
Stock-Based Compensation - Unrecognized Compensation Costs for Stock Options, Stock Awards and SARs (Detail) - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
Stock Option [Member] | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Unrecognized compensation costs for stock options, stock awards and SARs | $ 1,390 | $ 774 |
Stock Awards [Member] | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Unrecognized compensation costs for stock options, stock awards and SARs | 3,400 | 1,365 |
Stock Appreciation Rights (SARs) [Member] | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Unrecognized compensation costs for stock options, stock awards and SARs | $ 2,855 | $ 693 |
Stock-Based Compensation - Shar
Stock-Based Compensation - Share Based Payment Awards Granted in Period (Detail) | 6 Months Ended |
Jun. 30, 2015shares | |
Stock Option [Member] | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Stock options granted in period | 84,679 |
Stock Awards [Member] | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Awards granted in period | 74,712 |
Stock Appreciation Rights (SARs) [Member] | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Awards granted in period | 187,527 |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Detail) | 6 Months Ended |
Jun. 30, 2015 | |
Stock Option [Member] | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Weighted average period for amortization of unrecognized compensation cost | 1 year 4 months 24 days |
Stock Awards [Member] | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Weighted average period for amortization of unrecognized compensation cost | 2 years 2 months 12 days |
Stock Appreciation Rights (SARs) [Member] | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Weighted average period for amortization of unrecognized compensation cost | 1 year 4 months 24 days |
Inventories - Composition of In
Inventories - Composition of Inventories (Detail) - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
Inventory Disclosure [Abstract] | ||
Finished goods | $ 128,113 | $ 126,157 |
Raw materials | 50,469 | 57,076 |
Total inventories | $ 178,582 | $ 183,233 |
Inventories - Additional Inform
Inventories - Additional Information (Detail) - USD ($) | Jun. 30, 2015 | Dec. 31, 2014 |
Inventory Disclosure [Abstract] | ||
LIFO reserve | $ 31,655,000 | $ 34,340,000 |
Contingencies - Additional Info
Contingencies - Additional Information (Detail) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |
Mar. 31, 2015USD ($) | Jun. 30, 2015USD ($)States | Jun. 30, 2014USD ($) | Dec. 31, 2014USD ($) | |
Site Contingency [Line Items] | ||||
Environmental and legal losses, minimum | $ 20,700,000 | |||
Environmental and legal losses, maximum | 41,100,000 | |||
Accrued liability for losses | 20,700,000 | $ 22,000,000 | ||
Cash outlays related to legal and environmental matters | $ 1,900,000 | $ 500,000 | ||
Number of states examining company unclaimed property records | States | 7 | |||
Liability for unpaid claim and claim adjustment expense, claims paid | $ 4,016,000 | $ 784,000 | $ 3,475,000 | |
VAT inflation, penalty and interest charges | $ 0 | |||
Maywood Site [Member] | ||||
Site Contingency [Line Items] | ||||
Accrual for environmental loss contingencies, increase (decrease) for revision in estimates | $ 600,000 | |||
Wilmington Site [Member] | ||||
Site Contingency [Line Items] | ||||
Contribution for future response costs | 5.00% | |||
Payment of environmental response costs | $ 2,300,000 |
Postretirement Benefit Plans -
Postretirement Benefit Plans - Components of Net Periodic Benefit Cost (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
United States [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Interest cost | $ 1,702 | $ 1,723 | $ 3,403 | $ 3,446 |
Expected return on plan assets | (2,393) | (2,378) | (4,786) | (4,756) |
Amortization of net actuarial loss | 1,149 | 661 | 2,298 | 1,323 |
Net periodic benefit (income) cost | 458 | 6 | 915 | 13 |
United Kingdom [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Interest cost | 198 | 247 | 393 | 490 |
Expected return on plan assets | (265) | (333) | (527) | (661) |
Amortization of net actuarial loss | 46 | 91 | ||
Net periodic benefit (income) cost | $ (21) | $ (86) | $ (43) | $ (171) |
Postretirement Benefit Plans 49
Postretirement Benefit Plans - Defined Benefit Pension Plans - Additional Information (Detail) - Jun. 30, 2015 - Defined Benefit Pension Plan [Member] - USD ($) | Total |
U.S Plans [Member] | |
Defined Benefit Plan Disclosure [Line Items] | |
Company's expected contribution to qualified plan, current fiscal year | $ 0 |
Expected payment related to non-qualified plan | 185,000 |
Payments related to non-qualified plans | 164,000 |
U.K Plans [Member] | |
Defined Benefit Plan Disclosure [Line Items] | |
Company's expected contribution to qualified plan, current fiscal year | 609,000 |
Employer contributions | $ 416,000 |
Postretirement Benefit Plans 50
Postretirement Benefit Plans - Defined Contribution Plan Expenses for the Company's Retirement Savings Plans and Profit Sharing Plan (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Defined Contribution Plan Disclosure [Line Items] | ||||
Total defined contribution expense | $ 2,347 | $ 2,405 | $ 4,511 | $ 4,300 |
Retirement Savings Plans [Member] | ||||
Defined Contribution Plan Disclosure [Line Items] | ||||
Total defined contribution expense | 1,136 | 1,178 | 2,320 | 2,309 |
Profit Sharing Plan [Member] | ||||
Defined Contribution Plan Disclosure [Line Items] | ||||
Total defined contribution expense | $ 1,211 | $ 1,227 | $ 2,191 | $ 1,991 |
Postretirement Benefit Plans 51
Postretirement Benefit Plans - Defined Contribution Plans - Additional Information (Detail) | Jun. 30, 2015USD ($) |
Defined Benefit Pension Plan [Member] | |
Defined Contribution Plan Disclosure [Line Items] | |
Balance of trust assets | $ 1,827,000 |
Earnings Per Share - Computatio
Earnings Per Share - Computation of Basic and Diluted Earnings Per Share (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | ||
Computation of Basic Earnings per Share | |||||
Net income attributable to Stepan Company | $ 16,914 | $ 24,353 | $ 38,184 | $ 37,371 | |
Weighted-average number of common shares outstanding | 22,742 | 22,763 | 22,731 | 22,768 | |
Basic earnings per share | $ 0.74 | $ 1.07 | $ 1.68 | $ 1.64 | |
Computation of Diluted Earnings per Share | |||||
Net income attributable to Stepan Company | $ 16,914 | $ 24,353 | $ 38,184 | $ 37,371 | |
Weighted-average number of common shares outstanding | 22,742 | 22,763 | 22,731 | 22,768 | |
Add weighted-average net shares issuable from assumed exercise of options (under treasury stock method) | [1] | 127 | 158 | 116 | 170 |
Add weighted-average net shares related to unvested stock awards (under treasury stock method) | 2 | 10 | 3 | 10 | |
Weighted-average shares applicable to diluted earnings | 22,871 | 22,931 | 22,850 | 22,948 | |
Diluted earnings per share | $ 0.74 | $ 1.06 | $ 1.67 | $ 1.63 | |
[1] | Options to purchase 91,678 and 158,888 shares of Company common stock were excluded from the computations of diluted earnings per share for the three and six months ended June 30, 2015, respectively. Options to purchase 103,382 and 75,511 shares of Company common stock were excluded from the computations of diluted earnings per share for the three and six months ended June 30, 2014, respectively. The options’ exercise prices were greater than the average market price for the common stock and their effect would have been antidilutive. |
Earnings Per Share - Computat53
Earnings Per Share - Computation of Basic and Diluted Earnings Per Share (Parenthetical) (Detail) - shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Earnings Per Share [Abstract] | ||||
Options to purchase shares of common stock not included in the computations of diluted earnings per share | 91,678 | 103,382 | 158,888 | 75,511 |
Accumulated Other Comprehensi54
Accumulated Other Comprehensive Income (Loss) - Summary of Changes in Accumulated Other Comprehensive Income (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Accumulated Other Comprehensive Income Loss [Line Items] | ||||
Accumulated Other Comprehensive Income (Loss), beginning balance | $ (108,375) | $ (28,998) | $ (83,945) | $ (29,528) |
Other comprehensive income before reclassifications | 5,956 | 3,742 | (19,224) | 3,859 |
Amounts reclassified from AOCI | 750 | 411 | 1,500 | 824 |
Net current-period other comprehensive income | 6,706 | 4,153 | (17,724) | 4,683 |
Accumulated Other Comprehensive Income (Loss), ending balance | (101,669) | (24,845) | (101,669) | (24,845) |
Foreign Currency Translation Adjustments [Member] | ||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||
Accumulated Other Comprehensive Income (Loss), beginning balance | (68,051) | (10,854) | (42,914) | (10,971) |
Other comprehensive income before reclassifications | 5,940 | 3,742 | (19,197) | 3,859 |
Net current-period other comprehensive income | 5,940 | 3,742 | (19,197) | 3,859 |
Accumulated Other Comprehensive Income (Loss), ending balance | (62,111) | (7,112) | (62,111) | (7,112) |
Defined Benefit Pension Plan Adjustments [Member] | ||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||
Accumulated Other Comprehensive Income (Loss), beginning balance | (40,400) | (18,262) | (41,149) | (18,672) |
Amounts reclassified from AOCI | 750 | 410 | 1,499 | 820 |
Net current-period other comprehensive income | 750 | 410 | 1,499 | 820 |
Accumulated Other Comprehensive Income (Loss), ending balance | (39,650) | (17,852) | (39,650) | (17,852) |
Cash Flow Hedge Adjustments [Member] | ||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||
Accumulated Other Comprehensive Income (Loss), beginning balance | 76 | 118 | 118 | 115 |
Other comprehensive income before reclassifications | 16 | (27) | ||
Amounts reclassified from AOCI | 1 | 1 | 4 | |
Net current-period other comprehensive income | 16 | 1 | (26) | 4 |
Accumulated Other Comprehensive Income (Loss), ending balance | $ 92 | $ 119 | $ 92 | $ 119 |
Accumulated Other Comprehensi55
Accumulated Other Comprehensive Income (Loss) - Summary of Amounts Reclassifications Out of Accumulated Other Comprehensive Income (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | ||
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items] | |||||
Tax benefit | $ (7,205) | $ (8,838) | $ (16,455) | $ (13,919) | |
Interest, net | (2,869) | (3,021) | (6,923) | (5,978) | |
Cost of sales | (372,902) | (432,522) | (756,911) | (846,940) | |
Defined Benefit Pension Plan Adjustments [Member] | Amounts Reclassified From Accumulated Other Comprehensive Income [Member] | |||||
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items] | |||||
Amortization of defined benefit pension actuarial losses | [1],[2] | (1,195) | (661) | (2,389) | (1,323) |
Tax benefit | [1] | 445 | 251 | 890 | 503 |
Income applicable to common stock | [1] | (750) | (410) | (1,499) | (820) |
Cash Flow Hedge Adjustments [Member] | Amounts Reclassified From Accumulated Other Comprehensive Income [Member] | |||||
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items] | |||||
Tax benefit | [1] | 2 | 3 | 4 | 5 |
Income applicable to common stock | [1] | (1) | (1) | (4) | |
Total before tax | [1] | (2) | (4) | (5) | (9) |
Cash Flow Hedge Adjustments [Member] | Interest rate contracts [Member] | Amounts Reclassified From Accumulated Other Comprehensive Income [Member] | |||||
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items] | |||||
Interest, net | [1] | (5) | (7) | (10) | (14) |
Cash Flow Hedge Adjustments [Member] | Foreign exchange contracts [Member] | Amounts Reclassified From Accumulated Other Comprehensive Income [Member] | |||||
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items] | |||||
Cost of sales | [1] | 3 | 3 | 5 | 5 |
Accumulated Other Comprehensive Income (Loss) [Member] | |||||
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items] | |||||
Income applicable to common stock | [1] | $ (750) | $ (411) | $ (1,500) | $ (824) |
[1] | Amounts in parentheses denote expense to statement of income. | ||||
[2] | This component of accumulated other comprehensive income is included in the computation of net periodic benefit cost (see Note 8 for additional details). |
Segment Reporting - Additional
Segment Reporting - Additional Information (Detail) | 6 Months Ended |
Jun. 30, 2015Segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 3 |
Segment Reporting - Operating S
Segment Reporting - Operating Segment (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Segment Reporting Information [Line Items] | ||||
Net Sales | $ 452,414 | $ 504,111 | $ 912,865 | $ 981,553 |
Surfactants [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Net Sales | 299,743 | 333,761 | 630,294 | 669,471 |
Polymers [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Net Sales | 133,613 | 148,270 | 242,977 | 267,377 |
Specialty Products [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Net Sales | $ 19,058 | $ 22,080 | $ 39,594 | $ 44,705 |
Segment Reporting - Reconciliat
Segment Reporting - Reconciliation of Segment Information to Consolidated Financial Statements (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | ||
Segment Reporting Information [Line Items] | |||||
Operating income | $ 28,595 | $ 36,914 | $ 63,773 | $ 59,437 | |
Interest expense, net | (2,869) | (3,021) | (6,923) | (5,978) | |
Loss from equity in joint ventures | (1,815) | (1,243) | (3,055) | (2,694) | |
Other, net | 235 | 556 | 887 | 530 | |
Income Before Provision for Income Taxes | 24,146 | 33,206 | 54,682 | 51,295 | |
Operating Segments [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Operating income | 49,183 | 41,233 | 99,976 | 74,418 | |
Operating Segments [Member] | Surfactants [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Operating income | 24,232 | 19,239 | 57,996 | 37,577 | |
Operating Segments [Member] | Polymers [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Operating income | 23,429 | 18,444 | 38,214 | 29,270 | |
Operating Segments [Member] | Specialty Products [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Operating income | 1,522 | 3,550 | 3,766 | 7,571 | |
Segment Reconciling Items [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Unallocated corporate expenses | [1] | $ (20,588) | $ (4,319) | $ (36,203) | $ (14,981) |
[1] | Unallocated corporate expenses primarily comprise corporate administrative expenses (e.g., corporate finance, legal, human resources, information systems, deferred compensation and environmental remediation) that are not included in segment operating income and not used to evaluate segment performance. |
Debt - Debt (Detail)
Debt - Debt (Detail) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2015 | Dec. 31, 2014 | |
Debt Instrument [Line Items] | ||
Total debt | $ 260,470 | $ 273,931 |
Less current maturities | 24,826 | 27,034 |
Long-term debt | 235,644 | 246,897 |
Unsecured private placement 3.86% note [Member] | ||
Debt Instrument [Line Items] | ||
Total debt | $ 100,000 | $ 100,000 |
Debt instrument interest rate percentage | 3.86% | 3.86% |
Unsecured private placement 3.86% note [Member] | Minimum [Member] | ||
Debt Instrument [Line Items] | ||
Maturity Dates | 2,019 | 2,019 |
Unsecured private placement 3.86% note [Member] | Maximum [Member] | ||
Debt Instrument [Line Items] | ||
Maturity Dates | 2,025 | 2,025 |
Unsecured private placement 4.86% note [Member] | ||
Debt Instrument [Line Items] | ||
Total debt | $ 65,000 | $ 65,000 |
Debt instrument interest rate percentage | 4.86% | 4.86% |
Unsecured private placement 4.86% note [Member] | Minimum [Member] | ||
Debt Instrument [Line Items] | ||
Maturity Dates | 2,017 | 2,017 |
Unsecured private placement 4.86% note [Member] | Maximum [Member] | ||
Debt Instrument [Line Items] | ||
Maturity Dates | 2,023 | 2,023 |
Unsecured private placement 5.88% note [Member] | ||
Debt Instrument [Line Items] | ||
Total debt | $ 40,000 | $ 40,000 |
Debt instrument interest rate percentage | 5.88% | 5.88% |
Unsecured private placement 5.88% note [Member] | Minimum [Member] | ||
Debt Instrument [Line Items] | ||
Maturity Dates | 2,016 | 2,016 |
Unsecured private placement 5.88% note [Member] | Maximum [Member] | ||
Debt Instrument [Line Items] | ||
Maturity Dates | 2,022 | 2,022 |
Unsecured private placement 5.69% note [Member] | ||
Debt Instrument [Line Items] | ||
Total debt | $ 22,857 | $ 22,857 |
Debt instrument interest rate percentage | 5.69% | 5.69% |
Unsecured private placement 5.69% note [Member] | Minimum [Member] | ||
Debt Instrument [Line Items] | ||
Maturity Dates | 2,015 | 2,015 |
Unsecured private placement 5.69% note [Member] | Maximum [Member] | ||
Debt Instrument [Line Items] | ||
Maturity Dates | 2,018 | 2,018 |
Unsecured private placement 6.86% note [Member] | ||
Debt Instrument [Line Items] | ||
Total debt | $ 4,284 | $ 4,284 |
Debt instrument interest rate percentage | 6.86% | 6.86% |
Maturity Dates | 2,015 | 2,015 |
Unsecured U.S. bank debt [Member] | ||
Debt Instrument [Line Items] | ||
Total debt | $ 10,000 | $ 20,000 |
Maturity Dates | 2,019 | 2,019 |
Debt of foreign subsidiaries Unsecured bank debt, foreign currency [Member] | ||
Debt Instrument [Line Items] | ||
Total debt | $ 10,064 | $ 12,043 |
Maturity Dates | 2,015 | 2,015 |
Debt of foreign subsidiaries Unsecured bank term loan, foreign currency [Member] | ||
Debt Instrument [Line Items] | ||
Total debt | $ 4,137 | $ 4,840 |
Maturity Dates | 2,021 | 2,021 |
Debt of foreign subsidiaries Secured bank term loan, foreign currency [Member] | ||
Debt Instrument [Line Items] | ||
Total debt | $ 278 | $ 2,723 |
Maturity Dates | 2,015 | 2,015 |
Debt of foreign subsidiaries Secured bank debt, foreign currency [Member] | ||
Debt Instrument [Line Items] | ||
Total debt | $ 3,350 | $ 1,638 |
Maturity Dates | 2,015 | 2,015 |
Debt of foreign subsidiaries Unsecured bank debt, U.S dollars [Member] | ||
Debt Instrument [Line Items] | ||
Total debt | $ 500 | $ 546 |
Maturity Dates | 2,015 | 2,015 |
Debt - Additional Information (
Debt - Additional Information (Detail) - USD ($) | 6 Months Ended | ||
Jun. 30, 2015 | Jul. 10, 2015 | Dec. 31, 2014 | |
Subsequent Event | Unsecured Private Placement Loan | |||
Debt Instrument [Line Items] | |||
Unsecured private placement loan | $ 100,000,000 | ||
Multi currency revolving credit agreement [Member] | |||
Debt Instrument [Line Items] | |||
Revolving credit agreement | $ 125,000,000 | ||
Credit agreement expiry Date | Jul. 31, 2019 | ||
Letters of Credit Outstanding | $ 4,952,000 | ||
Debt Outstanding | 10,000,000 | ||
Unused Revolving credit | 110,048,000 | ||
Unrestricted retained earnings | $ 107,400,000 | $ 88,684,000 |
Other, Net - Other Net in Conso
Other, Net - Other Net in Consolidated Statements of Income (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Other Nonoperating Income Expense [Abstract] | ||||
Foreign exchange gain (loss) | $ 101 | $ (93) | $ 99 | $ (298) |
Investment income | 23 | 117 | 146 | 273 |
Realized and unrealized gains on investments | 111 | 532 | 642 | 555 |
Other, net | $ 235 | $ 556 | $ 887 | $ 530 |
Sale of Product Line - Addition
Sale of Product Line - Additional Information (Detail) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | Mar. 31, 2015 | Jan. 31, 2015 | |
Sale Of Product Line [Line Items] | |||||||
Net Sales | $ 452,414,000 | $ 504,111,000 | $ 912,865,000 | $ 981,553,000 | |||
J6 Polymers, LLC [Member] | |||||||
Sale Of Product Line [Line Items] | |||||||
Pretax gain from the kits sale | $ 2,862,000 | ||||||
J6 Polymers, LLC [Member] | Polyurethane Systems Product Lines [Member] | |||||||
Sale Of Product Line [Line Items] | |||||||
Sale of product line for cash | $ 3,262,000 | ||||||
Net Sales | $ 2,800,000 |
Business Restructuring - Additi
Business Restructuring - Additional Information (Detail) | 3 Months Ended | 6 Months Ended | |||
Dec. 31, 2014USD ($)Employees | Sep. 30, 2014Employees | Jun. 30, 2014USD ($) | Dec. 31, 2013USD ($) | Jun. 30, 2014USD ($) | |
2014 Restructuring [Member] | |||||
Restructuring Cost And Reserve [Line Items] | |||||
Number positions eliminated | Employees | 13 | ||||
Restructuring charges | $ 1,722,000 | ||||
2013 Restructuring [Member] | Surfactants [Member] | |||||
Restructuring Cost And Reserve [Line Items] | |||||
Restructuring charges | $ 1,040,000 | ||||
Accelerated depreciation expenses | $ 918,000 | $ 1,825,000 | |||
2013 Restructuring [Member] | North America [Member] | Surfactants [Member] | |||||
Restructuring Cost And Reserve [Line Items] | |||||
Number positions eliminated | Employees | 16 |
Business Restructuring - Reconc
Business Restructuring - Reconciliation of Restructuring Liability (Detail) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2014 | |
2014 Restructuring [Member] | ||||
Restructuring Cost And Reserve [Line Items] | ||||
Restructuring charges | $ 1,722 | |||
2014 Restructuring [Member] | Severance Expense [Member] | ||||
Restructuring Cost And Reserve [Line Items] | ||||
Restructuring liability at Beginning Balance | $ 264 | $ 1,722 | ||
Amounts paid | (260) | (1,435) | ||
Foreign currency translation | 5 | (23) | ||
Expense adjustment | (9) | |||
Restructuring liability at Ending Balance | 264 | 1,722 | $ 1,722 | |
2013 Restructuring [Member] | Severance Expense [Member] | ||||
Restructuring Cost And Reserve [Line Items] | ||||
Restructuring liability at Beginning Balance | 186 | 563 | 1,040 | |
Amounts paid | (96) | (338) | (420) | |
Foreign currency translation | 4 | (39) | (57) | |
Restructuring liability at Ending Balance | $ 94 | $ 186 | $ 563 | $ 563 |
Acquisition - Additional Inform
Acquisition - Additional Information (Detail) | Jun. 30, 2015USD ($) | Jun. 15, 2015USD ($)T | Dec. 31, 2014USD ($) |
Business Acquisition [Line Items] | |||
Goodwill, net | $ 11,398,000 | $ 11,502,000 | |
Procter and Gamble Company [Member] | Brazil [Member] | |||
Business Acquisition [Line Items] | |||
Capacity of production facility purchased in connection with acquisition | T | 30,000 | ||
Acquisition purchase price | $ 5,133,000 | ||
Acquisition of property, plant and equipment | 6,007,000 | ||
Acquisition of liabilities | 874,000 | ||
Acquisition of intangible assets | 0 | ||
Goodwill, net | $ 0 |
Subsequent Events - Additional
Subsequent Events - Additional Information (Detail) - Jul. 10, 2015 - Subsequent Event - Unsecured Private Placement Loan - USD ($) | Total |
Subsequent Event [Line Items] | |
Unsecured private placement loan | $ 100,000,000 |
Debt instrument interest rate percentage | 3.95% |
Private placement loan, maturity date range, start | Jul. 10, 2021 |
Private placement loan, maturity date range, end | Jul. 10, 2027 |